Malmberg v. Baugh

• Decision Date: 20 September 1923
• Docket Number: 3979
• Citation: 218 P. 975,62 Utah 331
• Court: Utah Supreme Court
• Parties: MALMBERG et al. v. BAUGH et al

218 P. 975

62 Utah 331

MALMBERG et al. v. BAUGH et al

No. 3979

Supreme Court of Utah

September 20, 1923

Appeal from District Court, First District, Cache County; M. C Harris, Judge.

Action by Annie E. Malmberg and others against William L. Baugh and another. Judgment for plaintiffs, and defendants appeal.

REVERSED and REMANDED, with directions.

J. D Skeen, of Salt Lake City, for appellants.

Leon Fonnesbeck, of Logan, for respondents.

THURMAN J. WEBER, C. J., and GIDEON, FRICK, and CHERRY, JJ., concur.

OPINION

THURMAN, J.

Plaintiffs' second amended complaint in substance alleges that on or about the 6th day of December, 1920, plaintiffs agreed to sell, and the defendants agreed to buy, certain real estate described in the complaint for the sum of $ 10,000, payable as follows: $ 2,500, by conveyance to plaintiffs of certain residence property in Cache county, Utah, which was made in advance. The balance $ 7,500, was to be paid in monthly installments on the 6th day of each month commencing January 6, 1921, until the said $ 7,500 had been fully paid, with interest at the rate of 6 per cent. per annum. An agreement to that effect was made in writing, placed in escrow, and is referred to and made part of the complaint. At the same time plaintiffs executed a warranty deed to the defendants for the property in question, which, together with an abstract showing good and marketable title in plaintiffs, was included in the escrow and delivered to the Farmers' Banking Company of Cache county, Utah, as the depository thereof. The escrow agreement, among other things, provided:

"In case of default in the above conditions the contents of this envelope consisting of the above-described papers are to be returned to the said grantors, upon demand, after thirty days from the date of such default, and the bank's responsibility for the custody thereof ceases at the expiration of said thirty days, it being understood that a payment of the amount due within said thirty days shall act as a reinstatement of this agreement."

It is then alleged in the complaint that the property referred to in the agreement consisted of real estate, the hotel building thereon, and the furniture and furnishings thereof, a list of which is attached as an exhibit and made a part of the complaint; that although defendants made the first payment of $ 2,500 by conveyance of the residence property, as above stated, they afterwards breached the escrow agreement by failing and neglecting to pay the installments due for February and March, 1922; that a demand was made of defendants to pay such installments, but defendants failed and neglected to pay the same, and on or about March 1, 1922, repudiated said agreement; that after defendants had been in default for more than 30 days and after demand for payment had been refused, the said Farmers' Bank, as escrow holder, at plaintiffs' request, delivered back to plaintiffs said escrow agreement together with the aforesaid abstract and deed.

It is further alleged that plaintiffs are the owners of said property, and that on or about March 17, 1922, after the papers had been returned to plaintiffs, plaintiffs demanded possession of the premises, but defendants refused to deliver such possession until November 22, 1922, at which time defendants vacated the premises; that during said period from March 17 to November 22, 1922, defendants had the full use and occupation of the property and collected the rents and profits from the same, but have failed, neglected, and refused to pay plaintiffs any sum or amounts as rental therefor or to in any manner account for the rents and profits thereof during said period; that the reasonable value of the use and occupation of said property during said period was and is the sum of $ 150 per month, or $ 1,225 in all, which defendants impliedly promised to pay, but they have not paid the same, or any part thereof. The plaintiffs also allege a second cause of action for the value of certain items of furniture which they allege were not returned to them when defendants surrendered possession of the premises.

Plaintiffs demand judgment for $ 1,225 on the first cause of action and $ 217 on the second. This complaint was filed December 1, 1922.

The defendants, answering the complaint, admit the escrow agreement and the papers connected therewith, and depositing the same with said Farmers' Banking Company, as the depository thereof; admit that defendants conveyed to plaintiffs the residence property referred to in the complaint at an agreed consideration of $ 2,500, and that defendants discontinued payments for the property in escrow on the 1st day of February, 1922, and that no payments were made by them after that date; admit that on or about March 17, 1922, plaintiffs elected to rescind the contract of sale and demanded and received from the Farmers' Banking Company the deed in escrow and demanded possession of the property in question; and admit that defendants refused to surrender possession thereof until about November 22, 1922, at which time plaintiffs accepted possession subject to the jurisdiction and control of the court for the purpose of adjudicating and enforcing the equities of the parties in and to the premises; admit that defendants from the 17th day of March to the 22d day of November, 1922, had the full use and occupation of the premises and collected the rents and profits thereof and refused to pay the same, or any part thereof, to the plaintiffs; deny that the property during said period was of the reasonable rental value of $ 150 per month, or any greater value than $ 50 per month.

Defendants deny the allegations of the second cause of action concerning the failure to surrender certain items of furniture, except as to one or two articles which they allege they sold with plaintiffs' knowledge and consent.

Further answering, defendants affirmatively allege that certain representations were made by William E. Malmberg, intestate of plaintiff Lucy Malmberg, concerning the condition of the property in question, which representations defendants relied on as an inducement to enter into said contract. Defendants allege they would not have entered into said contract except for said representations, and further allege that the same were untrue, and for that reason defendants refused to make further payments under said contract after February 1, 1922.

Finally it is alleged in the answer that on the 17th day of March, 1922, plaintiffs elected to rescind said contract and demanded possession of the premises; that on November 22, 1922, under stipulation duly made and entered in court, defendants surrendered to plaintiffs possession of the property subject to the jurisdiction and control of the court for the purpose of adjusting the equities between the parties; that plaintiffs are now in the sole and exclusive possession of the property.

Defendants then allege certain items of expenditure which they were compelled to make on account of the property being defective, out of repair, and unsuitable for habitation. (We have omitted such matters as are deemed immaterial to the questions to be determined.)

Defendants pray that the court determine the amount paid by them on the purchase price, and interest thereon, the cost of making necessary repairs on the building, the amount of taxes and insurance paid, the fair reasonable rental value of the property conveyed by defendants to plaintiffs as part of the purchase price of the escrow property, and after deducting therefrom the fair reasonable rental value of said escrow property, not exceeding $ 1,225, that defendants have judgment against the plaintiffs for the amount so found by the court, and that said sum be made a paramount lien upon the said escrow property and also upon the real estate conveyed by defendants to plaintiffs, or, in the alternative, that plaintiffs be decreed to reconvey said property to defendants, and when so conveyed that defendants have judgment against the plaintiffs for the residue of the amounts so found by the court.

The trial court sitting without a jury found the controlling issues in favor of the plaintiffs. It found the facts as alleged and admitted in the pleadings. In addition thereto, it found that on or about March 17, 1922, when the plaintiffs demanded possession of the premises, they informed defendants that from then on they would be required to pay rent for the premises; that the reasonable rental value, as stipulated at the trial, was $ 75 per month; that defendants made no tender or offer to perform after their breach of the contract, and there was no mutual rescission of the same, as alleged by defendants; that the allegations in defendants' answer of fraud and misrepresentation by the plaintiffs were untrue; that plaintiffs' allegations as to defendants with-holding certain articles of furniture when they surrendered the premises are not sustained, except as to two items totaling the sum of $ 30.

Conclusions were made in accordance with the findings and judgment entered for the plaintiffs for the sum of $ 612.50 on account of rent and $ 30 for conversion of the personal property. Judgment was also entered quieting plaintiffs' title to the premises in question.

Defendants appeal.

The questions involved, in the main, must be determined on the pleadings and the findings made by the court. There is but one question of fact in the case which the parties consider of controlling importance. It is contended by appellants that there was a mutual rescission of the escrow agreement, and that in such case the defendants are entitled to be repaid the payments made by them on the purchase price of the property; also for money paid on account of taxes and insurance; that as against...