Moeller v. Schultz

• Court: Washington Supreme Court
• Writing for the Court: DRIVER, Justice.
• Citation: Moeller v. Schultz, 119 P.2d 660, 11 Wn.2d 416 (Wash. 1941)
• Decision Date: 28 November 1941
• Docket Number: 28372.
• Parties: MOELLER et ux. v. SCHULTZ et ux.

119 P.2d 660

11 Wn.2d 416

MOELLER et ux. v. SCHULTZ et ux.

No. 28372.

Supreme Court of Washington

November 28, 1941

Department 1.

Action by William Moeller and wife against Christ Schultz, also known as Chris Schultz, and wife, for the reformation of an executory real estate contract wherein defendant filed a cross-complaint. From a judgment for the plaintiffs defendants appeal.

Affirmed.

Appeal from Superior Court, Lincoln County; W. Lon Johnson, Judge.

Brown &amp Huneke, of Spokane, and Howard E. Phillips, of Davenport, for appellants.

Roy C Fox, of Spokane, for respondents.

DRIVER Justice.

The plaintiffs, husband and wife, brought this action for reformation of an executory real estate contract. The defendants, also a marital community, have appealed from findings and judgment, in favor of the plaintiffs, entered after a trial to the court. As there will be no occasion to mention the wives of the parties, we shall refer to Christ Schultz as if he were the only appellant, and to William Moeller as if he were the sole respondent.

The pertinent facts are not in dispute. In August or September 1939, the appellant made arrangements with a real estate agent to sell his farm lands in Lincoln county. The agent succeeded in interesting respondent in the property, and, after preliminary negotiations, the parties reached an agreement as to the terms of sale. They then went together to Davenport, the county seat of Lincoln county, where they employed a lawyer suggested by the appellant to reduce their agreement to writing. The attorney drafted the contract, taking the real property descriptions from documents submitted to him by appellant. The property consists of 640 acres in one tract, and approximately 160 acres in another. The dwelling house and other farm buildings are on the smaller tract, which the witnesses at the trial called the 'town quarter.' For convenience, it will be so designated herein. By inadvertent oversight, about 25 acres of land in the town quarter, on which the buildings are situated, were not included in the description of the lands set forth in the contract. Before signing it, the respondent took the instrument to Ritzville to his own attorney, who examined it and suggested some changes not material here, but did not discover the deficiency in the description.

The contract dated September 29, 1939, provides that the purchase price, $22,500, shall be paid as follows: 'The sum of $2,500.00 in cash, the receipt whereof is hereby acknowledged. The balance of the purchase price, and being the sum of $20,000.00 together with interest at the rate of five per cent per annum, is to be paid $4,500.00 in lawful money of the United States on or Before the first day of October, 1940, which will leave on the principal of the purchase price the sum of $15,500.00 unpaid, which shall be paid as follows: The Southeast Quarter (SE-1/4) of Section Twenty (20), the South half (S-1/2) of Section Twenty-one (21), and the Northwest Quarter (NW-1/4) of Section Twenty-eight (28) of said lands [being all of the lands involved except the town quarter] are to be farmed by the parties of the second part after the custom of the country, beginning with the date hereof, alternately cropping and summer-fallowing the same, and the parties of the second part are to harvest all crops hereafter raised thereon and to deliver to the parties of the first part one-half thereof in bulk, free and clear of all costs and charges, at the warehouse of the United Grain Growers, Inc., at Harrington, Washington, in due and proper season, and to cause negotiable warehouse receipts therefor to be issued to the parties of the first part and delivered to the escrow holder hereinafter named for the purpose of settlement between the parties.'

The contract further provides that, when respondent pays $3,000 of the $4,500 due October 1, 1940, the appellant shall convey to him,

'* * * by good and sufficient warranty deed * * * that portion of said premises described as follows, to-wit: [here follows a description of the town quarter, omitting the twenty-five acres previously mentioned] * * *

'It is further agreed that the parties of the first part have, contemporaneous herewith, executed to the parties of the second part their two warranty deeds. One for the said lands in Sections Twenty (20), Twenty-one (21), and Twenty-eight (28), and the other for the lands in Section Twenty-two (22) [the town quarter], and that said warranty deeds, together with this contract, are to be left in escrow with the Harrington Branch of The Old National Bank & Union Trust Company at Harrington, Washington, which is hereby constituted the escrow holder and agent of the parties hereto for the purpose of applying the proceeds of the sale of the crops in accordance with the terms hereof, * * * The escrow holder is authorized and instructed, when full payment has been made for said premises in accordance with the terms hereof, to deliver the deed or deeds, as the case may require, to the parties of the second part.'

The contract contains the usual forfeiture provision, to the effect that, in case the respondent fails to comply with any of its terms, the appellant shall have the right to cancel and terminate the contract and retain all payments made thereunder as liquidated damages: 'Provided, however, this forfeiture agreement shall have no effect as to any land which has theretofore been conveyed in accordance with the terms hereof.' The two warranty deeds mentioned in the contract were deposited with the designated escrow holder, but the deed to the town quarter omitted the same 25 acres which had been left out of the contract.

In the fall of 1939, respondent entered into possession of the premises, including the 25 acres not described in the contract. He did not discover the mistake in the real estate description until the spring of 1940, when he immediately called it to the attention of the appellant. The latter admitted that it was an 'oversight'; that a mistake had been made in not including the 25 acres. But, when, at his request, the same attorney who had prepared the original agreement drafted a corrected contract, the appellant refused to sign it unless certain changes were made in the terms of payment. In July, 1940, respondent instituted the present action. Thereafter, respondent paid, through the escrow holder, a sum representing one-half the gross proceeds of the crops for the season of 1940, which payment appellant accepted and retained.

On November 15, 1940, appellant served upon respondent a written notice to the effect that the real estate contract would be forfeited if the respondent did not, within ten days after that date, deposit with the bank designated as escrow holder the sum of $4,500 to cover the payment due on October 1. On November 23, respondent paid the stated sum to the bank, but with certain written conditions, or reservations, which will be discussed later on in this opinion. November 26, the appellant served a notice of forfeiture of the contract and demand for possession upon the respondent. On December 9, appellant served upon respondent his answer and a cross-complaint, seeking to have his cancellation of the contract confirmed, his title quieted, and possession of the premises restored to him. The case was tried in February, 1941, and the court ordered that the real estate contract and the deed to the town quarter be reformed so as to include therein the omitted 25 acres, and denied appellant relief on his cross-complaint.

Where both parties have an identical intention as to the terms to be embodied in a proposed written contract and a writing executed by them is materially at...