Richards v. Jarvis

• Decision Date: 30 July 1925
• Citation: 41 Idaho 237,238 P. 887
• Parties: DON C. RICHARDS, Respondent, v. SAMUEL M. JARVIS, ELLEN F. JARVIS and THE LEMHI VALLEY BANK, a Corporation, Appellants
• Court: Idaho Supreme Court

238 P. 887

41 Idaho 237

DON C. RICHARDS, Respondent, v. SAMUEL M. JARVIS, ELLEN F. JARVIS and THE LEMHI VALLEY BANK, a Corporation, Appellants

Supreme Court of Idaho

July 30, 1925

VENDOR AND PURCHASER-CONTRACTS FOR SALE OF REAL AND PERSONAL PROPERTY-CONSTRUCTION AND OPERATION-PERFORMANCE-CONCURRENT ACTS-RIGHT TO RESCISSION-BREACH OF CONDITIONS-WAIVER-ACTIONS FOR RESCISSION-PLEADINGS-TRIAL-FINDINGS OF FACT-FORM OF JUDGMENT.

1. Complaint in this case examined and held sufficient.

2. Agreement construed, and held to require delivery by the sellers of abstract for inspection not later than the time they are required to tender to buyer their deeds for the property.

3. Provisions of the agreement herein held to require performance by the buyer and the sellers as concurrent acts.

4. Under an agreement for the sale of real and personal property providing that performance by the buyer shall be concurrent with performance by the sellers, nonperformance by the buyer is not the proximate cause of the other's inability to perform, especially where the latter waives the former's default.

5. Where the evidence is conflicting but there is evidence enough, if uncontradicted, to support the finding of the trial court, such finding will not be disturbed by the appellate court.

6. Where a vendor is unable to perform at the time performance is required of him, a tender of performance by the vendee is not required.

7. Where under a contract to convey by good and sufficient warranty deed, the vendor insists upon the vendee taking a doubtful title, the vendee is at liberty to rescind the contract and recover back any payments made on the purchase price.

8. Where a vendor in a contract for the sale of real and personal property admits that he is unable to perform, the vendee may rescind the contract without tendering performance by him.

9. A finding by the trial court not sustained by sufficient evidence will not support a judgment based thereon.

10. A judgment awarding money damages should run in favor of the judgment creditor, against the judgment debtor, so that same may be enforced by execution.

11. An escrow-holder with no personal interest in the main action or in the money deposited in escrow with it, but defending jointly with others an action in part for the recovery of the money so deposited, cannot complain that costs are awarded jointly against it and the other defendants.

APPEAL from the District Court of the Sixth Judicial District, for Lemhi County. Hon. Ralph W. Adair, judge.

Action for rescission of contract for sale of real and personal property. Judgment for plaintiff. Reversed and remanded, with instructions.

Cause remanded, with directions.

E. H Casterlin and Whitcomb, Cowen & Clark, for Appellants.

The respondent was not entitled to rescind himself, being in default by not executing and placing mortgages and notes with the Leadore State Bank. This is especially true where such default makes it impossible for the vendor to perform. (39 Cyc. 1422 and cases cited, 2025, n. 58; Fountain v Semi-Tropical Land Co., 99 Cal. 677, 34 P. 497; Lemle v. Barry, 181 Cal. 6, 183 P. 148; Hall v Yaryan, 25 Idaho 470, 476, 138 P. 339.)

Had the respondent fully performed his part of the contract to purchase by placing mortgages and notes with the Lemhi Valley Bank, appellant would have been able to give a good marketable title to all of the property, real and personal free and clear of all encumbrances.

A purchaser of land who has paid part of the price and failed to carry out his contract, the vendor at the same time "being ready and willing to proceed and fulfill all his stipulations according to contract," cannot recover the money paid, although the contract does not provide for a forfeiture. (Downey v. Riggs, 102 Iowa 88, 70 N.W 1091; Glock v. Howard & Wilson Colony Co., 123 Cal. 1, 69 Am. St. 17, 55 P. 713, 43 L. R. A. 199; Hansbrough v. Peck, 5 Wall. 497, 18 L.Ed. 520; Hurley v. Anicker, 51 Okla. 97, 151 P. 593, L. R. A. 1918B, 538.)

The appellant Jarvis, having fully performed his part of the written agreement, except as prevented by respondent, and the respondent Richards having failed to perform his part thereof, the $ 3,000 paid to the Leadore State Bank became the property of the appellant under the terms of the contract, and Richards cannot maintain suit therefor. (27 R. C. L., p. 624, sec. 378, and p. 644, sec. 406; 39 Cyc. 1353, note 11; Hurley v. Anicker, supra; Stratton v. California Land etc. Co., 86 Cal. 353, 24 P. 1065.)

No tender for the use and occupation of the property involved, or for loss of property, was made by respondent at the time of his giving notice of attempted rescission of the contract, and no demand was then made that Jarvis perfect his title, or free the same from encumbrances. (Kessler v. Pruitt, 14 Idaho 175, 93 P. 965; 39 Cyc. 1423 and 1427, n. 60, 2051, n. 78.)

Respondent knew of existing encumbrances upon the property at the time the contract of sale was entered into, and he had no right to refuse full performance of his part of the contract and claim rescission on the ground that the property was encumbered. ( Papesh v. Wagnon, 29 Idaho 93, 157 P. 775; Griesemer v. Hammond, 18 Cal.App. 535, 123 P. 818; Higgins v. Eagleton, 155 N.Y. 466, 50 N.E. 287; Galvin v. Collins, 128 Mass. 525; Ready v. Sound Inv. Co., 64 Wash. 422, 116 P. 1093; Rischar v. Shields, 26 Idaho 616, 145 P. 294; Lemle v. Barry, 181 Cal. 6, 183 P. 148; Henderson v. Fields, 143 Ga. 547, 85 S.E. 741; Claude v. Richardson, 127 Iowa 623, 103 N.W. 991; 39 Cyc. 1409, n. 24, 1410, n. 32 and 33.)

Respondent by entering into possession of the property, and exercising ownership thereover, knowing of the encumbrances thereon, waived his right to rescind. (Barnett v. Gaines, 8 Ala. 373; Akerly v. Vilas, 21 Wis. 88; Christian v. Scott, 1 Stew. (Ala.) 490, 18 Am. Dec. 68; Worley v. Nethercott, 91 Cal. 512, 25 Am. St. 209, 27 P. 767.)

The right to rescind was waived by the unreasonable length of time plaintiff held possession of the property and exercised domain thereover, after knowledge of existing encumbrances. (39 Cyc. 1427d, 1429, note 66.)

The respondent having refused to perform his part of the contract, and having elected to rescind, relieved the appellant from all further obligation under the contract, forfeits his right to the $ 3,000 paid and becomes liable for the reasonable rental value of the premises and property, the value of personal property not returned to the defendant Jarvis. (39 Cyc. 1358, note 55; Holverson v. Evans, 38 Idaho 428, 224 P. 1067; Citizens Nat. Bank of Roswell v. Davisson, 229 U.S. 212, Ann. Cas. 1915A, 272, 33 S.Ct. 625, 57 L.Ed. 1153; Keefe v. Fairfield, 184 Mass. 334, 68 N.E. 342; Buchanan v. Lorman, 3 Gill (Md.), 51; Huson v. Anderson, 1 Rich. Eq. Cas. (S. C.) 164.)

Even though the vendor, after the purchaser's default had put it out of his power to perform, that does not authorize a rescission by the purchaser. (Aikman v. Sanborn, 5 Cal. Unrep. 961, 52 P. 729; Ketchum v. Evertson, 13 John. (N. Y.) 359, 7 Am. Dec. 384.)

Plaintiff cannot rescind and recover any part of the purchase money already paid by him without restoring or offering to restore appellants to the status quo as nearly as might be done. This was not done, and no offer was made to compensate Jarvis for loss of personal property. (6 R. C. L., p. 936, sec. 319; Conner v. Henderson, 15 Mass. 319, 8 Am. Dec. 103; Chamberlin v. Ivens, 36 Idaho 235, 210 P. 580.)

Since the covenants in the contract were mutual and dependent and were to be simultaneously performed by the respective parties thereto, the plaintiff must aver and prove performance so far as he was able to perform, and offer to perform such covenants as he was prevented from performing by acts of the vendor. (39 Cyc. 1422, 2060, note 40; Ketchum v. Evertson, 13 Johns. (N. Y.) 359, 7 Am. Dec. 384; Bean v. Atwater, 4 Conn. 3, 10 Am. Dec. 91.)

The complaint did not state a cause of action and the demurrer should have been sustained. (Bell v. Stadler, 31 Idaho 568, 174 P. 129; Peckham v. Stewart, 97 Cal. 147, 31 P. 928.)

Burleigh & Glennon and Thomas & Andersen, for Respondent.

Appellants never did, and never were in a position to, execute and deliver conveyance which would convey a marketable title, because the property was at all times so heavily encumbered that it was beyond the power of these parties to convey a marketable title. (39 Cyc. 1406, 1407, 1409.)

The purchaser has the right to a clear title before he can be compelled to pay the purchase price. (Warren v. Stoddart, 6 Idaho 692, 59 P. 540; 39 Cyc. 1442.)

"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, 25 Idaho 584, 139 P. 139; Bell v. Stadler, 31 Idaho 568, 174 P. 129, Marshall v. Gilster, 34 Idaho 420, 201 P. 711; Bank of Columbia v. Hagner, 26 U.S. 455, 7 L.Ed. 219; Adams v. Henderson, 168 U.S. 573, 18 S.Ct. 179, 42 L.Ed. 584; Adams v. Reed, 11 Utah 480, 40 P. 720; Justice v. Button, 89 Neb. 367, 131 N.W. 736, 38 L. R. A., N. S., 1; Ankeny v. Clark, 148 U.S. 345, 13 S.Ct. 617, 37 L.Ed. 475.)

"Neglect or refusal to convey title at the time fixed by the contract constitutes a breach of the agreement to convey which entitled the purchaser to rescind." (39 Cyc. 1416; Colpe v. Linblom, 57 Wash. 106, 106 P. 634.)

The purchaser would not be liable for rent, where he is not in default, until after demand had been made on him for possession. (Hannan v. McNickle, 82 Cal. 122, 23 P. 271; Kerns v. Dean, 77 Cal. 555, 19 P. 817.)

"Where the property has been destroyed or taken...