Marshall v. Gilster

• Decision Date: 26 October 1921
• Citation: 201 P. 711,34 Idaho 420
• Parties: CHARLES J. MARSHALL and R. M. FARMER, Appellants, v. HENRY GILSTER and MARGARET GILSTER, His Wife, Respondents
• Court: Idaho Supreme Court

201 P. 711

34 Idaho 420

CHARLES J. MARSHALL and R. M. FARMER, Appellants, v. HENRY GILSTER and MARGARET GILSTER, His Wife, Respondents

Supreme Court of Idaho

October 26, 1921

REAL ESTATE-CONTRACT OF SALE-FAILURE OF TITLE-RESCISSION-RECOVERY OF PURCHASE PRICE-TENDER-NOTICE-DEMAND-TIME OF ESSENCE-EXTENSION OF TIME.

1. A motion for nonsuit admits the truth of plaintiff's evidence and of every fact which it tends to prove or which could be gathered from any reasonable view of it, and he is entitled to the benefit of all inferences in his favor which the jury would have been justified in drawing from the evidence had the case been submitted to it.

2. An agreement by a vendor to convey real estate by good and sufficient warranty deed requires that title shall be good and free from reasonable doubt.

3. Where, under a contract to convey real property by a good and sufficient warranty deed, vendor insists on vendee taking a doubtful title, vendee is at liberty to rescind the contract and demand repayment of money paid by him on the purchase price.

4. If the vendor is unable to perform at the time performance is required of him, a tender of performance by the purchaser is not required.

5. A statement by the purchaser that the deal is off, that he will have nothing more to do with it, and that he will have to have his money back, is a sufficient notice of rescission.

6. An agreement extending time for performance in a contract for sale of real estate makes time of the essence.

APPEAL from the District Court of the Sixth Judicial District, for Lemhi County. Hon. F. J. Cowen, Judge.

Action for recovery of purchase price following rescission of contract. Appeal from judgment of nonsuit. Reversed.

Reversed and remanded. Costs to appellants.

E. W Whitcomb and Wyman & Wyman, for Appellants.

A motion for nonsuit admits the truth of plaintiffs' evidence and of every fact which it tends to prove or which could be gathered from any reasonable view of it, and he is entitled to the benefit of all inferences in his favor which the jury would have been justified in drawing from the evidence had the case been submitted to it (citing same authorities cited in opinion).

An agreement by the vendor to convey by "good and sufficient warranty deed" requires that his title shall also be good and fairly deducible from the records. (39 Cyc 1445, 1446; Boyd v. Boley, 25 Idaho 584, 139 P. 139; Crim v. Umbsen, 155 Cal. 697, 132 Am. St. 127, 103 P. 178; Turner v. McDonald, 76 Cal. 177, 9 Am. St 189, 18 P. 262; Collins v. Delashmutt, 6 Ore. 51; Campbell v. Harsh, 31 Okla. 436, 122 P. 127; Sheehy v. Miles, 93 Cal. 288, 28 P. 1046; Howe v. Coates, 97 Minn. 385, 114 Am. St. 723, 107 N.W. 397, 4 L. R. A., N. S., 1170; Benson v. Shotwell, 87 Cal. 49, 25 P. 249, 681; Irving v. Campbell, 121 N.Y. 353, 24 N.E. 821, 8 L. R. A. 620; Hooe v. O'Callaghan, 10 Cal.App. 567, 103 P. 175; Warvelle on Vendors, 2d ed., sec. 299.)

In an executory contract for the sale of land, the purchaser may rescind where the vendor has no title to a material part of the lands at the time performance is required of him. (39 Cyc. 1406, 1407 (and cases there cited); Groves v. Stouder, 58 Okla. 744, 161 P. 239.)

"Where under a contract to convey real property by a good and sufficient warranty deed vendor insists on vendee taking a doubtful title, vendee is at liberty to rescind the contract and demand repayment of money paid by him on the purchase price." (Boyd v. Boley, supra; Talbot v. New Orleans Land Co., 143 La. 263, 78 So. 553.)

While ordinarily the purchaser cannot put the vendor in default without first offering to pay the balance of the purchase price or otherwise tendering performance of any precedent covenants on his part, yet, if the vendor is unable to perform at the time performance is required of him, a tender of performance by the purchaser would be a vain thing and is not required. (39 Cyc. 1422, 2048; Sutthoff v. Maruca, 57 Wash. 102, 106 P. 632; Aurand v. Perry T. L. & Imp. Co., 178 Iowa 262, 159 N.W. 779; McManus v. Patch, 20 Cal.App. 479, 129 P. 613; Sherwin v. Baxter, 86 Kan. 730, 121 P. 1128; Kreutzer v. Lynch, 122 Wis. 474, 100 N.W. 887; Nelson v. Chingren, 132 Iowa 383, 106 N.W. 936; Kicks v. State Bank, 12 N.D. 576, 98 N.W. 408; Burk v. Schreiber, 183 Mass. 35, 66 N.E. 411; Smith v. Lewis, 24 Conn. 624, 63 Am. Dec. 180; Burks v. Davies, 85 Cal. 110, 20 Am. St. 213, 24 P. 613; Runkle v. Johnson, 30 Ill. 328, 83 Am. Dec. 191; Smith v. Lamb, 26 Ill. 396, 79 Am. Dec. 381.)

Upon default by the vendor, the purchaser has the right to elect as among several remedies. He may undoubtedly choose to disaffirm the contract and sue to recover back the part of the purchase price theretofore paid by him. (39 Cyc. 1997; White v. Harvey, 175 Iowa 213, 157 N.W. 152; Neff v. Rubin, 161 Wis. 511, 154 N.W. 976; Hall v. Yaryan, 25 Idaho 470, 138 P. 339.)

Time is of the essence of a contract for the sale of personal property, where the contract fixes the time of delivery. (Cleveland Rolling Mill Co. v. Rhodes, 121 U.S. 255, 7 S.Ct. 882, 30 L.Ed. 920; Sunshine Cloak & S. Co. v. Roquette Bros., 30 N.D. 143, 152 N.W. 359, L. R. A. 1916E, 932; Connell Bros. Co. v. H. Diederichsen & Co., 213 F. 737, 130 C. C. A. 251; Gaut v. Dunlap (Tex. Civ.), 188 S.W. 1020; Williston on Sales, sec. 189; Mechem on Sales, sec. 1138.)

Parties to a contract for the sale of land may abandon it or rescind it by mutual consent or by the act of one acquiesced in by the other. In such case, the purchaser may recover that part of the purchase price he has already paid. (39 Cyc. 1353 et seq., 2001 et seq.; Smith v. Stewart, 83 N.C. 406; San Diego Const. Co. v. Mannix, 175 Cal. 548, 166 P. 325; Gwin v. Calegaris, 139 Cal. 384, 73 P. 851; Shively v. Semi-Tropic Land & W. Co., 99 Cal. 259, 33 P. 848; 2 Parsons on Contracts, 8th ed., p. 791; Amonson v. Idaho Dev. Co., 25 Idaho 615, 139 P. 352.)

The contract for extension of time within which respondent could perfect title makes time the essence of the contract. (Friess v. Rider, 24 N.Y. 367, 82 Am. Dec. 308; note, 50 Am. Dec. 600.)

J. M. Stevens and W. H. O'Brien, for Respondents.

The purchaser is not entitled to rescind if he is himself in default. (39 Cyc. 1422, and cases cited; Fountain v. Semi-Tropic Land etc. Co., 99 Cal. 677, 34 P. 497; Hyde v. Heller, 10 Wash. 586, 39 P. 249.)

Even if there had been a tender of performance by the purchaser and a demand for performance by the vendor, the vendor cannot be placed in default for defect of title, or inability to convey, before the expiration of the time fixed by the contract for making conveyance. (39 Cyc. 1410, and cases cited.)

Where time is made of the essence of a contract for the sale of land, terminating it on failure to comply strictly and punctually with conditions, the effect is to entail a forfeiture on the mere default of the purchaser by his failure to make payments when and as he obligated himself to do, if the vendor has not waived the default and forfeiture, as is within his right by express agreement or unequivocal acts or demeanor. (Andrews v. Karl, 42 Cal.App. 513, 183 P. 838; Newell v. E. B. & A. L. Stone Co., 181 Cal. 385, 9 A. L. R. 993, 184 P. 659; Papesh v. Wagnon, 29 Idaho 93, 157 P. 775.)

The fact that the vendor has, after the purchaser's default, put it out of his power to perform does not authorize a rescission by the purchaser. (Aikman v. Sanborn, 5 Cal. Unrep. 961, 52 P. 729.)

Where there has been no fraudulent misrepresentation as to the vendor's title, the fact that he has an imperfect title or no title at all at time of execution of a contract of sale does not invalidate the contract of sale; it being sufficient if vendor has good title at time he is called upon to perform. (Lemle v. Barry, 181 Cal. 6, 183 P. 148.)

MCCARTHY, J. Rice, C. J., and Budge, Dunn and Lee, JJ., concur.

OPINION

MCCARTHY, J.

On August 27, 1917, respondents and appellants entered into a written contract by which the former agreed to sell and the latter to buy a large stock ranch, 4,950 sheep, 140 head of cattle, 40 head of horses and 400 tons of hay, together with farm equipment and other personal property, for a consideration of $ 100,000. Ten thousand dollars was paid upon the execution of the agreement. The contract provided:

"That the said parties of the second part hereby agree and obligate themselves jointly and severally, to receive said property and pay the balance of said purchase price, on or before the 17th day of September, 1917, and upon their failure so to do, the said sum of $ 10,000 paid at the time of the execution of this agreement, shall be forfeited to the said parties of the first part as liquidated damages.

"That upon the payment or tender of the said purchase price as herein agreed upon, to the said parties of the first part they shall execute and deliver to said second parties a good and sufficient warranty deed to all of said real property, together with an assignment of all forest reserve rights and lease rights owned by them, and a good and sufficient bill of sale to all said personal property, including therein in addition to the property hereinbefore described, their stock brand, and any other property owned by them and not particularly described herein."

On September 13th, respondents' agent, L. E. Glennon notified appellants that patents to 320 acres of the land were not recorded in the recorder's office of the county in which the land is situated. Glennon, on September 15th, told appellant Farmer he thought the patents could be procured in three or four days and asked for an extension of time. It was agreed that the time should be extended to September 22d. The patents were not procured by that time and a few days later appellants told r...