Short v. Rogue River Irrigation & Power Co.

• Citation: 162 P. 845,82 Or. 662
• Parties: SHORT ET AL. v. ROGUE RIVER IRRIGATION & POWER CO. ET AL.
• Decision Date: 30 January 1917
• Court: Supreme Court of Oregon

162 P. 845

82 Or. 662

SHORT ET AL. v. ROGUE RIVER IRRIGATION & POWER CO. ET AL.

Supreme Court of Oregon

January 30, 1917

In Banc.

Appeal from Circuit Court, Josephine County; F. M. Calkins, Judge.

Action by Maggie E. Short and another against the Rogue River Irrigation & Power Company, W. B. Sherman, and others. From a decree for plaintiffs, defendant Sherman appeals. Modified and affirmed.

This is a suit to quiet adverse claims to real property and to annul and cancel a certain selling contract made between the plaintiffs and the defendant Sherman. The contract is set up in the complaint, and its essential provisions are as follows: The land included in the contract was the whole of section 20, township 35 south, range 6 west, Willamette Meridian, in Josephine county, with the exception of certain lots and tracts not necessary to be enumerated here. By the terms of the agreement, Sherman was authorized to negotiate sales according to a schedule agreed upon by the parties until June 8, 1911. He was within 15 days from the date of the contract to start an active campaign for the sale of the lands in lots and tracts, surveying, platting, and advertising and selling the property at his own expense in such manner as to him might seem best. The lands were to be sold by a schedule to be agreed upon by the parties as soon as the surveying should have been completed at a price to aggregate not less than $27,500, except by the written consent of the Shorts, upon the following terms: Ten per cent. in cash to be paid by the purchaser upon the delivery of a contract of sale to be executed by the Shorts, the balance to be paid in monthly installments of not less than 3 per cent. and deferred payments to draw 6 per cent. interest. Sherman was to collect all money from such sales and place the same in a fund to be divided as follows: One-half of the money received on each sale to be retained by Sherman as his commission until he had received the amount of 25 per cent of each sale; the remaining 75 per cent. to be given to the Shorts in payment for the land sold. The fund, however, was to be kept intact until the Shorts should be satisfied that all expenditures incurred by Sherman for which they might be liable had been paid out of his commission, and until all indebtedness of the Shorts which might conflict with their ability to make a good conveyance of the land sold should have been paid out of the Shorts' portion of the fund. An accounting was to be made every 30 days. Then followed these clauses:

"Fifth. The first party agrees to sell the property at the price of $13,800 net to them on the following terms: At least $4,725 and interest at the rate of 7 per cent. per annum shall be paid on or before August 1, 1910, and the balance to be paid from the proceeds of the sale as heretofore provided.

"Sixth. Said first party hereby agrees to issue good and sufficient warranty deeds to any lot or parcel of said land as the same may be paid for by the third party or upon the payment of 50 per cent. of the purchase price as a mortgage given for the remainder.

"Seventh. It is expressly understood and agreed that if the party of the second part shall on or before June 8, 1911, pay to the party of the first part from the proceeds of the sale of said lots, parcels, or tracts of land $6,900 in cash and mortgages covering such property on which 50 per cent. of the purchase price has been paid in an amount aggregating $13,800, as above provided, then and in that event the party of the first part shall promptly as they receive said sum convey all the remaining unsold lots, parcels, or tracts of land to the party of the second part, free and clear of all incumbrances of whatsoever name or nature, it being expressly understood and agreed that the total amount in cash or otherwise to be received by the party of the first part under and by virtue of this agreement is not to exceed the sum of $13,800.

"Eighth. The party of the second part expressly agrees that he will maintain an active selling campaign on said property during the life of this contract; that he will pay at least $4,725 with interest at seven per cent. from date hereof, by August 1, 1910, either from the proceeds of the sales, or otherwise and should he fail to keep actively engaged in the sale of said land or to make the payment as above described, then and in that event, he shall forfeit all his rights and interests in and to this contract, excepting as to his commissions for the sales already made; and no action at law is necessary to place the title to this property in the hands of the first party the same as before this contract was made.

"Ninth. It is further understood and agreed that nothing herein shall constitute or be considered as an agreement or obligation of any kind on the part of the party of the second part to purchase the above described property, or any part thereof nor to pay any amount thereon.

"Tenth. And the parties of the first part hereby agree by and with the party of the second part that they will sell to him all of the property herein designated and described upon his faithful performance of the conditions herein promised and upon the terms and conditions herein specified. Time is expressly declared to be the essence of each and every term, condition, or covenant herein, and upon default in the observance of either term, condition, or covenant, or the payment of any sum herein mentioned, the second party herein, his heirs and assigns, shall ipso facto forfeit all payments made hereunder and all rights acquired herein without notice from the first parties and any sums paid shall be retained and kept by the first parties as liquidated damages and rental for the use of said premises, and upon default the second party shall not be deemed to have acquired any rights in the property mentioned herein by virtue of any payments or things done or performed hereunder, and it shall not be necessary for the second party to begin proceedings at law or equity to determine any rights hereunder, the parties hereto by this instrument determining the rights of each hereunder, and upon the default of the second party in any of the foregoing matters the said forfeiture shall apply to all things contained herein except to commissions already earned."

The complaint alleged that on May 20, 1910, Sherman assigned the foregoing contract to the defendant Rogue River Irrigation & Power Company; that said company paid upon said contract the sum of $4,725 and interest to August 1, 1910; that neither said company nor any other person had made any other payments nor performed any of the stipulations of said contract required by them to be performed; that the other defendants claim some interest or lien upon said property, but if they have any it is subordinate to the rights of plaintiffs. There was a prayer that the defendants be adjudged to have no interest or estate in the premises; that the title of plaintiffs be adjudged good and valid; that the defendants be enjoined from asserting any adverse claim to the property; that the agreement be canceled and annulled; that the Rogue River Irrigation & Power Company and Sherman be required to execute quitclaim deeds to the property; and for general equitable relief.

All the defendants except the power company and Sherman made default. The power company answered disclaiming any interest in the property and alleged:

"Because of the damage caused one W. B. Sherman, one of the defendants herein, by reason of the failure of the said Rogue River Irrigation & Power Company to fulfill the promises and agreements made with the said W. B. Sherman and by reason of which the said W. B. Sherman entered into that written agreement and assignment...