Mintle v. Sylvester

• Decision Date: 16 December 1926
• Docket Number: No. 36606.,36606.
• Citation: 202 Iowa 1128,211 N.W. 367
• Parties: MINTLE v. SYLVESTER ET AL.
• Court: Iowa Supreme Court

202 Iowa 1128

211 N.W. 367

MINTLE

v.SYLVESTER ET AL.

No. 36606.

Supreme Court of Iowa.

Dec. 16, 1926.

Appeal from District Court, Jasper County; Charles A. Dewey, Judge.

Action at law to recover purchase money paid on land contract grounded on breach by the vendor and rescission therefor by the vendee, the alleged breach consisting of a declaration of forfeiture and retaking of possession. Verdict and judgment for plaintiff. Defendants appeal. Reversed.

De Graff, C. J., and Stevens, J., dissenting.

By contract in question dated June 26, 1919, defendants agreed to convey to plaintiff on March 1, 1920, and to furnish merchantable abstract showing clear title on that date, for $140,000, of which plaintiff paid $1,000 down, gave note for $2,000 due March 1, 1920, agreed to pay $37,000 on March 1, 1920, and on that date to give notes and mortgages for the balance of $100,000. Plaintiff agreed to pay the taxes for 1920. It was agreed the time of payment of “money, interest, and taxes as aforesaid is the essence and important part of this contract, and that if any default is made in any of the payments or agreements above mentioned, to be performed by the party of the second part in consideration of the damage, injury, and expense thereby resulting, or that may be incurred, by or to the party of the first part thereby, the party of the second part shall have no claim in law or in equity against the party of the first part nor to the above-mentioned real estate,” and any claim of the second party by reason of any payments or improvements shall on default cease and become forfeited and the second party shall remove from the premises.

The notice of forfeiture to which reference will be made was served August 8, 1921, and was denominated, “Notice of intention to declare forfeiture of contract for sale and purchase of real estate.” It notified plaintiff that the defendants “declared their intention to forfeit all your rights, title, and interest in” the land in question, “and which interest you have by virtue of a certain written contract (described), * * * on which contract you have paid only the sum of $35,000 and on which there is due first party the sum of $105,000, together with interest thereon from March 1, 1920, unless within a periodof 30 days after the service of this notice upon you you pay to said first parties said sum of $105,000 with interest thereon from March 1, 1920, as provided in said contract, and * * * the expense of serving this notice upon you, all your right, title, and interest will be forfeited as hereinbefore stated. This notice is served upon you under the provisions of sections 4299 and 4300 of the Supplement to the Code of 1913 and to the Code of 1897, § 4301, and to all of which you will now take due notice and govern yourself accordingly and be prepared to make full settlement for said lands as required of you by the terms of said contract. Upon failure so to do you are hereby notified that first parties will retain under the terms of such contract the sum already paid by you, together with any improvements or betterments which you or any person claiming under you have made on said premises since you took possession on March 1, 1920. You are further notified that said contract provides that second party shall pay the taxes on said land beginning with the taxes for the year 1920, and that you have failed and neglected to pay the taxes, * * * and the first parties also elect to declare a forfeiture for failure to pay taxes as provided in said contract.”

The notice to Van Kooten, to whom plaintiff afterward sold the land, declared that all the right of plaintiff would be forfeited unless plaintiff should “perform said contract as by statute provided, and shall make payment of taxes on said land for the year 1920,” and in the event of forfeiture Van Kooten would be treated as tenant.

Cross & Hamill, of Newton, for appellants.

Ross R. Mowry and Korf & Korf, all of Newton, for appellee.

MORLING, J.

There was no mutual rescission. The question is whether there is evidence of breach or abandonment by defendants entitling the plaintiff to rescind. The defendants did not on March 1, 1920, have a merchantable abstract of title. The parties did not meet on that day, but on March 4, 1920, a verbal arrangement was made by which plaintiff paid $34,000 (including the $2,000 note), and defendants agreed to deposit deed in the bank, waive forfeiture clause, and furnish approved abstracts. When the abstracts were approved plaintiff was to give the notes and mortgages, pay the $5,000, and receive the deed. Plaintiff took possession at that time. He resold to Van Kooten, who took possession in the spring of 1921. The abstracts were not completed until April 7, 1921, and were then delivered to plaintiff. His attorney told him that on account of the sale to Van Kooten it was not necessary for him to go to the expense of having the abstracts examined. The abstracts were then mailed by plaintiff to Van Kooten's attorney, who found them to be objectionable, but accepted defendants' agreement to complete them. No further question was raised about the abstracts. On March 4, 1920, plaintiff was able to pay the remaining $5,000, but was not at or after the time the abstracts were furnished. The taxes for 1920 were not paid. The notes and mortgages were never executed. The deal between plaintiff and Van Kooten was not completed. In July or August, 1921, defendants told plaintiff that the abstract had been approved by Van Kooten's attorney and that they were ready to close the deal. They asked him to pay the remaining $5,000. He told them he could not; he did not know where he was going to get it. He suggested other arrangements for closing the deal, but none were ever made. The notice of forfeiture was served on August 8, 1921. A decree quieting title in defendants was later entered. This decree was vacated in a suit brought by plaintiff, but such decree was, after the trial of the instant case, reversed in this court. Mintle v. Sylvester, 197 Iowa, 424, 197 N. W. 305. The petition in the defendants' suit to quiet title set out the contract, plaintiff's failure to pay or deposit the $5,000 and to execute the notes and mortgages and failure to pay taxes, and alleged a tender of proper abstract and demand for performance. That petition also set out the service of the notice of intention to forfeit, and alleged that the plaintiffs in that suit (defendants here) “are now and at all times have been ready, able, and willing to perform their part of said contract.” The prayer was that the contract “be declared null and void for failure on the part of the defendant (plaintiff here) to perform his part of said contract; that said defendant be barred and forever estopped from having or claiming any right, title, or interest in said real estate, * * * and that plaintiffs be decreed to be the owners in fee simple of the same free and clear of any claim of defendant by virtue of said contract or otherwise.” Defendants took possession of the farm in September, 1921, and then made a lease of it to Van Kooten for 1921.

[1][2] I. Plaintiff's contention is that the forfeiture clause was waived, and that the notice of forefeiture and action to quiet title and the taking possession and leasing the land were a repudiation and rescission entitling him to recover the purchase money paid. There is no evidence that the defendants intended to rescind the contract. On the contrary, both in the notice of intention to cancel and in the petition in the action to quiet title they manifested their willingness to carry out the contract. By the notice the plaintiff was given 30 days “to make full settlement for the lands as required of you by the terms of said contract.” It is not claimed that 30 days was not a reasonabletime. It is claimed that the notice demands a cash settlement rather than the payment of $5,000 cash and the execution of the mortgages and notes for the $100,000. We are of the opinion, however, that the notice, especially when read in connection with the notice to Van Kooten, merely demanded performance of the terms of the contract. There is no evidence that it was misunderstood or any objection made to it on that account. The fact is that the plaintiff was then unable to pay the $5,000. The notes and mortgages had been prepared and delivered to him and were in his possession from March 4, 1920, but he never signed or offered to sign them.

[3] An express stipulation for forfeiture of payments on default of the vendee is not a prerequisite to the right of the vendor on a default to retain the money paid and reinvest himself with possession of the land. Downey v. Riggs, 102 Iowa, 88, 70 N. W. 1091;Mail & Times Co. v. Marks, 125 Iowa, 622, 101 N. W. 458;Richards v. Hellen, 153 Iowa, 66, 74, 133 N. W. 393;Mohler v. Guest Piano Co., 186 Iowa, 161, 172 N. W. 302;Hansbrough v. Peck, 5 Wall. 497, 18 L. Ed. 520;Glock v. Howard, 123 Cal. 1, 55 P. 713, 43 L. R. A. 199, 69 Am. St. Rep. 17;Edgerton v. Peckham, 11 Paige (N. Y.) 352;Francis v. Shrader, 38 Cal. App. 592, 177 P. 168;Oursler v. Thacher, 152 Cal. 739, 93 P. 1007. See, also, Harrington v. Eggen, 51 N. D. 87, 199 N. W. 447;Matteson v. Land Co., 103 Minn. 407, 115 N. W. 195;Engel v. Mahlen, 153 Minn. 1, 189 N. W. 422.

[4] The defendants at the time the notice was served were able to comply with the contract on their part. The objections to the abstract were such as could be corrected, and the plaintiff on his part had waived examination of the title and was contented with the acceptance by Van Kooten's attorney. A deed was presented to plaintiff on March 4, 1920, and by arrangement at that time was left in the bank for delivery. It was offered in evidence by the plaintiff, and no objection on account of insufficient offer of performance of the contract on the part of the defendants, other than has been indicated, is made. The waiver of the time and forfeiture clause...