Security Savings & Trust Co. v. Mackenzie

• Decision Date: 30 April 1898
• Citation: 52 P. 1046,33 Or. 209
• Parties: SECURITY SAVINGS & TRUST CO. v. MACKENZIE.
• Court: Oregon Supreme Court

52 P. 1046

33 Or. 209

SECURITY SAVINGS & TRUST CO. v. MACKENZIE.

Supreme Court of Oregon

April 30, 1898

Appeal from circuit court, Multnomah county; L.B. Stearns, Judge.

Bill by the Security Savings & Trust Company against William Mackenzie. Judgment for complainant. Defendant appealed. Affirmed.

F.D Chamberlain, for appellant.

Joseph Simon, for respondent.

BEAN J.

This is a suit commenced April 13, 1895, to foreclose the equitable interest of an obligee in a bond for a deed of real estate. The complaint alleges that on October 15, 1894 John Hale and wife, who were then the owners and in possession of the property in question, conveyed the same to the plaintiff, and that it immediately entered into, and ever since has been in, possession thereof, and that the defendant wrongfully claims an estate therein adverse to the plaintiff by reason of a bond for a deed executed by Hale and wife to him in July, 1891, whereby they covenanted and agreed to convey the property in question to defendant on payment of the sum of $2,500 and interest on or before the 1st day of July, 1894, and the performance of certain other conditions that defendant has not paid such purchase price, or any part thereof, except the sum of $500, but has made default therein. A copy of the bond is annexed to and made a part of the complaint. It is in the penal sum of $6,000, and contains the conditions usual in such instruments. The answer denies the possession of the premises by the plaintiff, and, as an affirmative defense, alleges that, immediately upon the delivery of the bond, the defendant entered into and has ever since been in the sole possession of the property; that he has made sundry payments of principal and interest on the bond; and that neither the plaintiff nor the Hales ever demanded from him any money as due on said bond, or ever declared the defendant in default thereon, nor has any suit ever been instituted to foreclose said bond or defendant's interest in said land. A reply having been filed, the case was tried, and a decree entered requiring defendant to pay the balance of the purchase price of such property, with interest thereon at 7 per cent. per annum from the 1st day of January, 1894, within 60 days after the date of such decree, and further decreeing that, in default thereof, he be barred and foreclosed of any right, title, or interest therein, from which decree the defendant appeals.

It is claimed that the decree ought to be reversed, and the complaint dismissed, because the plaintiff failed to show such a possession of the property in question at the time the suit was instituted as to entitle it to maintain a suit under section 504 of the Code, to determine an adverse interest in real estate. The evidence upon this point shows that the premises were when the bond was given, and at the time the suit was commenced, vacant, unimproved, uninclosed, and unoccupied city lots, and never have been in the actual possession of either the plaintiff or the defendant. If, therefore, this was a suit under the section referred to, there might be room for argument as to whether the constructive possession of such property which follows the legal title would be sufficient to sustain the suit. But, in our opinion, the statute in question has no application to a case of this character. The remedy sought and the relief granted have always been within the jurisdiction of a court of equity. Although the complaint contains allegations indicating that it was framed under the statute, the relief sought is, in effect, a decree barring and foreclosing the equitable interest of the defendant under the contract in question, and this belongs to one of the well-recognized grounds of equitable jurisdiction. Under an agreement for the sale of land, the vendor has, under the doctrine of equitable conversion, a so-called "equitable lien" upon the property for the unpaid purchase money; and courts of equity have always exercised jurisdiction in cases arising under such contracts to enforce such lien and foreclose the rights of the delinquent vendee. 1 Ping.Mortg. § 308; 3 Pom.Eq.Jur. § 1260. Independent, therefore, of any statute, the court had jurisdiction, whether the plaintiff was in possession or not.

Again it is claimed that the complaint should be dismissed, because there is neither allegation nor proof that plaintiff or the Hales ever offered to perform their part of the contract. A sufficient answer to this contention is that the case at bar is neither a suit for the specific performance of the contract nor for the rescission or cancellation thereof, but one to enforce the right of the vendor to have the equitable interest of the vendee barred and foreclosed; and, while in such case there is a conflict in the authorities, it is believed to be the better rule that a failure to tender performance before suit is no defense. Freeson v. Bissell, 63 N.Y. 168. A failure in this regard can only affect the question of costs which is always in the...