Morrison v. Kandler

• Decision Date: 10 December 1958
• Citation: 334 P.2d 459,215 Or. 489
• Parties: Harrison M. MORRISON, Esther Morrison, Harley E. Noah and Lulu B. Noah, Respondents, v. Floyd KANDLER and Minne Kandler, Appellants.
• Court: Oregon Supreme Court

Page 459

334 P.2d 459

215 Or. 489

Harrison M. MORRISON, Esther Morrison, Harley E. Noah and Lulu B. Noah, Respondents, v. Floyd KANDLER and Minne Kandler, Appellants.

Supreme Court of Oregon.

Argued and Submitted at Pendleton Oct. 28, 1957.

Reargued and Submitted at Pendleton Oct. 29, 1958.

Decided Dec. 10, 1958.

Harold Banta, Baker, argued the cause for appellants. On the briefs were Vernon Daniel, Payette, Idaho, and Banta, Silven & Horton, Baker.

Wm. Schreder, Vale, and M. P. Gallagher, Ontario, argued the cause for respondents. On the brief were Lytle & Schroeder, Vale, and Gallagher & Gallagher, Ontario.

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

McALLISTER, Justice.

This is a suit in equity by the plaintiffs, as vendors, for the strict foreclosure of a contract for the sale of real and personal property. The defendants, as purchasers, filed a cross-complaint to rescind the contract and to recover the amounts paid on the purchase price. From a decree in favor of plaintiffs, the defendants appeal.

By a contract dated February 2, 1952, the plaintiffs, Harrison M. Morrison and Esther L. Morrison, his wife, agreed to sell to the defendants, Floyd Kandler and Minnie Kandler, his wife, a ranch containing about 170 acres, together with 211 sheep and certain farm machinery. The ranch is located in the Westfall valley of Malheur county.

The purchase price for all the real and personal property was the sum of $51,500, which defendants agreed to pay as follows:

(a) $3,500 in cash upon the execution of the agreement;

(b) $12,000 by conveying to plaintiffs a 40 acre tract of land owned by defendants;

(c) $7,000 by assuming and agreeing to pay the balance of a debt due the State Land Board and secured by a mortgage on plaintiffs' ranch; and

(d) $2,580 on February 1, 1953, and a like sum annually thereafter until the full purchase price, together with the interest thereon, was paid.

The defendants took possession of the real and personal property at about the time the contract was executed.

On June 10, 1952, the Morrisons assigned to Harley E. Noah and Lulu B. Noah the first $19,000 to be paid thereafter by defendants under the contract of sale. This assignment was given to secure the payment of an indebtedness due to the Noahs by the Morrisons. Because of this assignment, Harley E. Noah and his wife joined as plaintiffs in this suit. Since this controversy is primarily between the Morrisons as vendors and the defendants as purchasers, we will refer to the Morrisons as the plaintiffs and when necessary, refer to the Noahs by name.

The ranch in question was irrigated and used primarily for the production of alfalfa hay. The flock of sheep was referred to during the trial as a 'farm flock' and was apparently of secondary importance in the farming operation.

The controversy between plaintiffs and defendants which culminated in this suit began in the fall of 1953. During the latter part of November, 1953, Morrison visited the ranch on two occasions and objected to the Kandlers' conduct in disposing of some of the farm equipment without Morrison's consent. The equipment being purchased under the contract included a Model A John Deere tractor. In January, 1953 Kandler had traded this tractor to an equipment dealer as part of the down-payment for an International Super C tractor and other equipment. The Super C tractor and the other equipment was purchased by Kandler under a contract by which title was retained by the seller to secure the payment of the balance of the purchase price in the sum of $1,500.

During 1953, Kandler also traded, sold or attempted to dispose of a hydro loader, a cover crop disk, a Model D John Deere tractor, a grain drill, a manure spreader and a tractor mower. The proceeds from the sale of three of these items were paid to the escrow agent and applied on the contract. The remaining three items were recovered and returned to the ranch by Kandler after Morrison's visits in November.

Since the disposal of this farm machinery by Kandler is not decisive of this case, it is not necessary to go into further detail. Defendants contended that they were authorized to dispose of this machinery by a provision of the contract permitting them to replace unuseable equipment and claimed that the assignee, Harley Noah, had expressly approved some of the transactions.

On December 29, 1953, Morrison went to the ranch accompanied by W. F. Schroeder, one of his attorneys. These men inspected the ranch, the sheep and the farm equipment. The Kandlers were not at home but after inspecting the property Morrison and his attorney prepared and left with one of the Kandler children the following notice:

'12-29-53

11:40 a. m.

'Floyd and Mrs. Kandler

'By reason of your defaults under Morrison contract, 2 Feb 1952, among them and particularly in relation to absence of:

Model A John Deer tractor No. A2468R

Model D John Deer tractor No. D914R/B

Hydro Loader

Cover Crop Disk

2 Tractor Hay Bucks

1 John Deere Grain Drill & attachment

1 Manure Spreader

1 Track Harrow

2 Swathers

1 Tractor Mower

permitting tax lien on real and personal property and bad husbandry, we herewith take possession of the real and personal property involved in, and pursuant to said contract. A keeper, Mr. Lee Slabaugh to assume the lambing operation tomorrow.

's/H. M. Morrison

s/Lytle, Kilpatrick and Schroeder by W. F. Schroeder'

Pursuant to this notice Mr. Morrison returned to the ranch the following day accompanied by Lee Slabaugh. Morrison intended to take possession of the real and personal property and leave Slabaugh to care for the sheep which were then beginning to lamb. Again, the Kandlers were not at home but the Kandler children, in emphatic language, ordered Morrison and Slabaugh to 'get off' the ranch and the two men got. Morrison made no further effort to obtain possession of the property and the Kandlers remained on the ranch.

The next significant step in this controversy was the filing of this suit on January 5, 1954, and the service of a summons on both defendants on that same day. Plaintiffs' complaint alleged the execution of the contract and further alleged that the defendants had failed to comply with the contract in the following particulars:

(1) in selling or otherwise disposing of certain items of the farm machinery;

(2) in failing to pay to the State Land Board the payment due October 1, 1953;

(3) in failing to pay the taxes on the real and personal property (4) in failing to properly care for the sheep; and,

(5) in failing to properly care for and maintain the real property and the buildings thereon.

The complaint taken as a whole recognized the right of the defendants to remain in possession of both the real and personal property during the pendency of the suit unless otherwise ordered by the court. It alleged that the sheep were not receiving proper care and asked for the appointment of a receiver to care for them. The complaint concluded with a prayer for the strict foreclosure of the contract and the restitution of the real property if the amounts found due the plaintiffs were not paid within the time fixed by the court. Plaintiffs did not press their request for the appointment of a receiver to take charge of the sheep and no receiver was appointed.

After this suit was filed the Kandlers, acting on the advice of their attorney, took prompt action to remedy the alleged defaults. On January 6, 1954, they paid the first quarter of the taxes on the real and personal property for the fiscal year 1953-54. At the same time defendants paid some real property taxes for the fiscal year 1952-53 amounting to $10.65 which appearently had been overlooked the year before. On January 7, the defendants paid the delinquent installment due the State Land Board and paid to the escrow agent the proceeds received from the sale of the tractor mower in the sum of $110.

The next decisive step in this controversy was taken by defendants. On the evening of January 13, 1954, again acting on the advice of their attorney, the defendants, accompanied by two friends to serve as witnesses, called on plaintiffs at Durkee. The Kandler car was parked in front of plaintiffs' home and Morrison was persuaded to come out to the car where he and Kandler engaged in a conversation.

In substance, Kandler said that Morrison had broken the contract, that the Kandlers were moving off the property and wanted their money back. Kandler did not say how the contract was broken although Morrison questioned him about it several times. Kandler said 'We are declaring the contract ended. You take possession immediately.' Morrison said 'Alright if that is the way you feel--I don't see how I broke the contract. I will have a man there by noon tomorrow.' Morrison was informed that there was very little hay on the ranch to feed the sheep and that he would have to buy some feed. As a witness, Kandler was asked why he did not tell Morrison how the contract had been broken. Kandler replied 'I didn't know; I am going to be frank with you; I didn't know.'

On the following day, January 14, 1954, the Kandlers voluntarily vacated the property and plaintiffs took possession and started caring for the sheep. The plaintiffs have been in possession of the property since that date.

On January 14, 1954, the defendants filed their answer and cross-complaint in this suit. By their answer, defendants denied that they were in default in the performance of the contract and alleged that all of the defaults charged had been cured within the 60 day period of grace allowed by the contract. In their cross-complaint, defendants alleged that plaintiffs had repudiated the contract by serving the Kandlers with the notice quoted above and by attempting to take possession of the premises on December 29, 1953. Defendants further alleged that they had acquiesced in said repudiation of the contract by plaintiffs and thereby had rescinded the contract. Defendants...