Rynhart v. Welch

• Decision Date: 23 March 1937
• Citation: 156 Or. 48,65 P.2d 1420
• Parties: RYNHART v. WELCH et al.
• Court: Oregon Supreme Court

65 P.2d 1420

156 Or. 48

RYNHART v. WELCH et al.

Supreme Court of Oregon

March 23, 1937

Department 2.

Appeal from Circuit Court, Marion County; L. G. Lewelling, Judge.

Suit by Rose Marie Rynhart against Ellen L. Welch (Mrs. F. A.), whose true name is Ivy Ellen Welch, and another. From a judgment for defendants, plaintiff appeals.

Affirmed.

Otto K. Paulus and Custer E. Ross, both of Salem, for appellant.

E. M Page, of Salem (Carson & Carson and Keyes & Page, all of Salem, on the brief), for respondents.

RAND, Justice.

This appeal is from a decree in favor of the defendants in a suit wherein the plaintiff is seeking to recover for moneys paid and improvements made under a written contract for the purchase and sale of lands and to have the sums thus paid decreed to be a lien upon the land.

The contract was entered into on September 18, 1929, by plaintiff, as purchaser, and Ellen L. Welch and her husband who has since died, as vendors. The subject-matter of the contract was the purchase and sale of a certain described 10.6-acre tract of land located some six miles north of the city of Salem. The price stipulated to be paid therefor was the sum of $3,150, of which $100 was paid at the time the contract was entered into, the balance to be paid in monthly installments of $10 each with interest on the unpaid balance at the rate of 6 per cent. per annum; the first of said installments to be paid on October 20, 1929, and the remaining installments to be paid on the 20th day of every succeeding month until the full purchase price had been paid. It further provided that, during the life of the contract the vendee should "regularly and seasonably pay all taxes" which should thereafter be assessed and levied against the land.

Pursuant to the terms of the contract, plaintiff entered into the possession of the premises and, while so in possession and before making default in the payment of any installment, she erected a small dwelling house and two chicken houses and made certain other improvements on the premises. In addition thereto, and with the exception of two installments falling due on July 20 and September 20, 1931, respectively, she paid each of said monthly installments up to and including the one falling due on December 20, 1931, the total amount so paid during said period being the sum of $616.05 of which $250 was applied as part payment of the purchase price and the balance of $366.05 was payment in full, except for the two months above referred to, of the interest then due under the terms of the contract. From that date on the plaintiff has continuously been in default. During the year 1932, she paid $11.12 on March 4th, $11.98 on April 30th, $12 on October 8th, and $5 on November 29th, a total of $40.10 only.

During eight months of the year 1933 and prior to October 1 thereof, the defendant Guy W. Jonas, who was then occupying the premises as a tenant of the plaintiff, paid to the vendor, under plaintiff's direction, the sum of $16 each month and, in addition thereto, plaintiff herself paid to the vendor $25 on January 13th, $50 on March 31st, and $23.53 on July 20th, making a total of $226.53 paid prior to November 1, 1933, on which day the vendor terminated the contract because of plaintiff's failure to comply with its terms.

It will thus be seen that had plaintiff complied with the terms of her contract on and prior to November 1, 1933, all interest and taxes then due would have been paid and the amount due on the purchase price would have been reduced to $2,560, whereas in fact the total obligations of the plaintiff, under the contract, on that date, including the unpaid taxes, exceeded the total amount which she had obligated herself to pay when she entered into the contract of September 18, 1929. Her obligations to the vendor, instead of having been reduced during the four years in question, had in fact been increased.

Before terminating the contract, the vendor wrote several letters to the plaintiff, calling her attention to her defaults and stating that, unless the defaults were made good and future payments were not more punctually made, she would be compelled to terminate the contract. The first of said letters was written on November, 1932, and of course referred to the defaults that had previously occurred. During the following year she wrote other letters to the same effect, and eventually on October 16, 1933, the vendor wrote a letter to the plaintiff which, in part, reads as follows: "You are notified that you are in arrears on the payments of your contract with me dated Sept. 18, 1929, for the purchase of real estate in Marion County, Oregon, since July, 1933. You have also failed to pay taxes assessed against said premises since the date of your contract. For these reasons, I will declare the contract null and void on November 1, 1933, unless full payments are made thereon, together with taxes. And upon your failure at said date to pay the said due, I will enter said premises and take possession thereof and thereafter the contract will be of no force and effect."

It is well settled that a right to rescind at the option of one of the parties may be reserved in the contract and may then be exercised by such party without reference to any other conditions than those specified in the contract. Under this contract the right to rescind was reserved to the vendor. It provides that time shall be of the essence of the contract and that, if the vendee "shall fail to make the payments aforesaid, and each of them punctually, and upon the strict terms and times above limited, and likewise to perform and complete all and each of the agreements and stipulations aforesaid, strictly and literally, without any failure or default, then this contract, so far as it may bind the first party, shall become utterly null and void, and all rights and interests hereby created, or then existing in favor of the second party, shall utterly cease and determine, and the right of possession, and all equitable and legal interests in the premises hereby contracted shall revert to and revest in said party, without any declaration of forfeiture or act of reentry, or any other act by said first party to be performed, and without any right of said second party of reclamation or compensation for money paid, improvements made or service performed, as absolutely, fully and perfectly as if this contract had never been made."

It is also well settled in this state that a covenant in the contract for the sale of land that the time of payment shall be of the essence of the contract and that, upon failure of the vendee to comply therewith, the contract becomes null and void, is for the exclusive benefit of the vendor, and gives him the right to elect whether to terminate the contract or to continue it in force, and that, where it has been waived for a time, reasonable notice must be given by the vendor of an intention to resort to the strict terms of the contract before a forfeiture may be declared. So it has uniformly been held in this state that, where a purchaser of land, under a contract for a deed containing a clause making time of payment of the essence of the contract, is in default of payments thereunder and the vendor has not taken...