Miller v. Barker

• Decision Date: 31 December 1962
• Citation: 377 P.2d 343,233 Or. 113
• Parties: Donald G. MILLER and Nancy K. Miller, husband and wife, Respondents, v. A. L. BARKER and Rosemary Barker, husband and wife, Appellants.
• Court: Oregon Supreme Court

Page 343

377 P.2d 343

233 Or. 113

Donald G. MILLER and Nancy K. Miller, husband and wife, Respondents, v. A. L. BARKER and Rosemary Barker, husband and wife, Appellants.

Supreme Court of Oregon, Department 2.

Dec. 31, 1962.

William B. Wyllie, Salem, argued the cause for appellants. With him on the briefs were Rhoten, Rhoten & Speerstra, Salem.

Edward L. Clark, Jr., Salem, argued the cause for respondents. With him on the brief were Goodenough, Clark & Marsh, Salem.

Before McALLISTER, C. J., and WARNER, SLOAN, O'CONNELL and LUSK, JJ.

WARNER, Justice.

Millers, as plaintiffs-vendees, bring this suit for a rescission of a contract to buy a motel and furnishings, situated at Detroit, Oregon, and for restitution of money paid. From a decree of rescission and judgment for $11,755.23, Barkers, as defendants-vendors, appeal.

Plaintiff Donald G. Miller is a man 35 years of age, who was a factory worker until 1954. After that year he worked in the Los Angeles area as a carpenter and became a licensed contractor for two years. In 1960 he came to Salem with his wife. Two days after arrival, on July 28, 1960, they went to Detroit to examine the Barker motel, which they learned about through an advertisement which they had seen in California. Mr. Barker showed Mr. Miller the general layout and Mrs. Barker showed him briefly two or three rooms. Miller observed that the place was good looking and neatly kept.

The following day the parties met at the office of Barker's then attorney, in Salem, and executed an earnest money receipt for a purchase price of $48,000, of which $4,000 was to be paid in cash and $6,500 upon the sale of Miller's house in Los Angeles. Millers paid $1,000 at the time of signing the receipt.

In due course a contract was executed by the parties and the stipulated cash down payments were made. As stated in the contract, the balance was to be paid at the rate of $400 per month, plus accrued interest, for the months of September, October and the months of March to September. For the four months of November to February, inclusive, the principal payments were reduced to $200 per month.

Millers went into possession and started operating the motel on August 14, 1960.

About November 18, 1960, Miller experienced difficulty in making the required payments and Barker agreed to an extension of time to September, 1961, for the payments due in the months of December, 1960, and for the months of January, February and March, 1961, with a proviso that interest would be paid each month, as provided in the contract.

On May 12, 1961, plaintiffs contacted an attorney with reference to the instant matter and a few days before May 26, 1961, for the first and only time, plaintiffs protested to defendants the misrepresentations which they presently rely upon. On the date last mentioned and acting on the advice of their counsel, the Millers returned to the Barkers the keys to the motel and informed them they were rescinding the contract and abandoning the motel. Defendants thereafter immediately went into possession of the motel property and have operated the same ever since. Millers filed their complaint in this suit on May 31, 1961. This was five days after their declaration of rescission and delivery of keys to the Barkers. But before doing so, they collected rents currently due from their motel operation.

In their complaint the Millers allege that the Barkers were guilty of four different misrepresentations which entitle them to rescind. However, in their brief they confine their argument to two: the alleged misrepresentation as to the motel's income and the claim of a misrepresentation respecting the condition and repair of the buildings namely, the rot found under the floors of certain units.

The defendants, on July 20, 1961, filed an answer in general denial with a further and separate answer seeking to foreclose the contract. Plaintiffs made reply alleging that the defendants had acquiesced and agreed to plaintiffs' notification of rescission given on May 26 by immediately going into possession of the motel and thereafter operating the same.

Before giving attention to the sufficiency of the misrepresentations claimed by plaintiffs in support for their rescission, we will first dispose of their motion for a dismissal of defendants' appeal and then their contention respecting defendants' acquiescence in plaintiffs' rescission as disclosed by their reply.

Sometime prior to oral argument in this matter, plaintiffs filed a motion to dismiss defendants' appeal. The motion was grounded on the representation that defendants had evidenced an intent to accept and accede to the terms of the decree. The motion to dismiss was then denied with leave to renew at the time of presenting plaintiffs' argument on the merits, and this plaintiffs elected to do.

The Barkers were living across the street from the motel when it was abandoned by the Millers in May, 1961.

Plaintiffs argue that the possession and operation of the motel by the Barkers evidences an acceptance of the decree and that the appeal should be dismissed on the authority of Kellogg v. Smith, 70 Or. 449, 142 P. 330 (1914), and Lange v. Devlin, 80 Or. 238, 156 P. 260 (1916).

The Kellogg and Lange cases are distinguishable from the case at bar. In both, the vendors were defendants in suits to rescind contracts. But in those cases the vendor's objectionable 'dealing' with the property occurred after the trial court had entered a decree of rescission and while an appeal was pending. Both cases used substantially the following language:

'* * * it is apparent that the defendant used and dealt with the mortgaged property as though he then intended freely to accept and accede to the terms of the decree rendered herein, and, such being the case, he will not be permitted now to change the position which he voluntarily assumed, and is estopped from asserting a different attitude * * *.' (Kellogg v. Smith, supra, at 456, 142 P. at 333 and see Lange v. Devlin, supra, at 239, 156 P. at 261.)

Here, the defendants Barker resumed possession of the motel before the decree was rendered by the trial court. That this is a distinction which removes the present case from the early strict rule of Kellogg and Lange is recognized in the later cases of Fluhrer v. Bramel, 158 Or. 694, 72 P.2d 47, 73 P.2d 265, 77 P.2d 824 (1938); and Lewis v. Shook, 182 Or. 483, 188 P.2d 148 (1947).

Fluhrer was an action for rescission of a contract for the sale of a service station. The vendor appealed from a decree in favor of the plaintiff-vendee. The plaintiff moved to dismiss the appeal for the reason that the defendant had acquiesced in the decree in that he had leased the service station to a third party. The court dismissed the appeal on the authority of the Lange case, supra. However, upon petition for rehearing, the court said:

'* * * it is shown that the lease from [the vendor] W. E. Bramel to [the third party] * * * was made before the decree of the lower court was rendered in the above entitled case. For this reason the order dismissing the appeal taken by Bramel * * * will be set aside.' (158 Or. 694, 699-700, 73 P.2d 265)

Lewis v. Shook, supra, is even more nearly in point. In that case Lee contracted to sell some property of Shook, who then contracted to sell part of the property to one Lewis. Lewis took possession and then, desiring to rescind, and fearing that continued possession might stand in his way, quit possession, whereupon Shook resumed possession. Lewis brought an action for declaration of rights under the contracts for the sale of land, and Shook appealed from the judgment. Lewis moved to dismiss the appeal, one of his grounds being Shook's act of taking possession and using the premises. This court disposed of plaintiff's contention as follows:

'The record is clear that appellants' possession of the premises involved commenced prior to the rendition of the decree, and for that reason does not constitute an acquiescence in the decree. Fluhrer v. Bramel * * *.' (Lewis v. Shook, supra (182 Or. at 491, 188 P.2d at 151))

It, therefore, appears clear that when a vendee voluntarily quits the premises and the vendor resumes possession prior to the rendition of a decree of rescission in favor of the vendee, the vendor's resumption of possession does not in itself evidence such an acceptance of the decree as will prejudice the vendor's right to appeal from the decree.

Plaintiffs in their brief affirm defendants' right to act in any limited and reasonable way to protect the property. Our knowledge concerning defendant's activities subsequent to the entry of the decree is, however, limited to what is stated in the affidavit given in support of the motion. The activities of the defendants as therein revealed appeal to us as consistent with what is reasonable for the protection and maintenance of property of its kind and uses. Moreover, there is no suggestion in the record that the Barkers at any time entered into any agreements with third parties concerning the property before or after the entry of the decree, as did the vendors in the cases above mentioned. Nor is there any evidence to show how or to what extent, if any, the Millers would be damaged, or even inconvenienced, by the repairs and slight changes made by the Barkers if they had redeemed the property or resumed possession. Morrison v. Kandler, 215 Or. 489, 505, 334 P.2d 459 (1959).

The motion to dismiss the appeal is denied.

We now address ourselves to plaintiffs' contention that the Barkers acquiesced in Millers' acts of rescission and which, if true, would preclude the Barkers from the right to foreclose the contract or declare a forfeiture thereunder.

The contention respecting the acquiescence of the Barkers is predicated solely upon Miller's declaration of rescission made at defendants' home May 26, 1961, and the fact that Barkers thereafter took possession of the motel and continued to operate it....