Wilson v. Sunnyside Orchard Co.

• Decision Date: 28 February 1921
• Citation: 33 Idaho 501,196 P. 302
• Parties: W. T. WILSON, Appellant, v. SUNNYSIDE ORCHARD COMPANY, Respondent
• Court: Idaho Supreme Court

196 P. 302

33 Idaho 501

W. T. WILSON, Appellant, v. SUNNYSIDE ORCHARD COMPANY, Respondent

Supreme Court of Idaho

February 28, 1921

CONTRACT FOR SALE OF AGRICULTURAL LAND-EXPRESS WARRANTY OF QUALITY OF SOIL-RESCISSION-LACHES-WAIVER-VENDEE'S LIEN-RESTORATION OF PREMISES.

1. When the vendor of real estate expressly warrants that the soil is practically free from alkali, and agrees to return to the purchaser the contract price paid should it prove to have alkali sufficient to harm its productiveness materially in the production of grain, hay, vegetables and fruit, provided it is properly drained and farmed, an action to recover on such warranty, although brought in an equitable form, is not barred by the lapse of time short of the period of the statute of limitations, unless the delay has been inexcusable, and special circumstances exist which would make recovery inequitable.

2. The right of the vendee to recover on such warranty is not waived by going into possession of the land, with knowledge that the soil is impregnated with alkali to the extent mentioned in the warranty, or by cultivating the land or by making a cropping contract in regard to it.

3. Cancelation of outstanding notes for the remainder of the purchase price, and a vendee's lien for the instalments on the purchase price already paid, result from a recovery on such warranty.

4. From the fact that the warranty provides for a return of the purchase money paid in the event of its breach, a resulting rescission of the contract is necessarily implied in order to prevent the vendee from getting back his money and keeping the land. Such rescission is not a condition precedent to the vendee's right to recover the purchase price, but a result flowing therefrom.

5. Failure of plaintiff to restore possession of the land, or tender it prior to commencement of suit, is not fatal to plaintiff's recovery on such warranty. The court in its decree will impose such conditions for defendant's protection as may be just.

APPEAL from the District Court of the Seventh Judicial District, for Washington County. Hon. Ed. L. Bryan, Judge.

Action on contract of warranty. Judgment for defendant. Reversed and remanded.

Reversed and remanded, with instructions. Costs awarded to appellant.

Lot L Feltham, for Appellant.

In the case of agricultural lands, a contract for their purchase may be rescinded by the vendee on discovering that he had been deceived by false representations of the seller as to the character, fertility or chemical composition of the soil, as to its adaptability to the growing of particular crops. (2 Black on Rescission, sec. 425, p. 1052; Becker v Sunnyside Land & Inv. Co., 76 Wash. 685, 136 P. 1147; Field v. Hood Riv. Orchard Land Co., 75 Ore. 223, 146 P. 98.)

"Mere delay in asserting a right, short of the limitation fixed by statute, does not bar the right in equity." ( Luddington v. Patton, 111 Wis. 208, 86 N.W. 572.)

"Whether plaintiff rescinded promptly did not depend alone on the lapse of time, but on all the circumstances." ( Beardsley v. Clem, 137 Cal. 328, 70 P. 175; 2 Black on Rescission, sec. 536, p. 1264; 9 Cyc. 435, and cases cited.)

The bringing of an action to recover money paid is sufficient evidence of an election to treat the contract as rescinded. (6 R. C. L., sec. 315, and notes.)

When a purchaser is entitled to call for a good title, his taking possession with the concurrence of the vendor will not amount to a waiver of any right. (1 Sugden on Vendors, p. 518.)

The plaintiff was entitled to a lien upon these lands and the capital stock in the Sunnyside Irrigation Co. as security for the repayment to him of the purchase money paid under these contracts. (Wickman v. Robinson, 14 Wis. 493, 80 Am. Dec. 789; Taft v. Kessel, 16 Wis. 273; Ihrke v. Continental L. Ins. & Inv. Co. 91 Wash. 342, 157 P 866, L. R. A. 1916F, 430; Bullitt v. Eastern Ky. Land Co., 99 Ky. 324, 36 S.W. 16; Stewart v. Wood, 63 Mo. 252; Davis v. Rosenzweig Realty Operating Co., 192 N.Y. 128, 127 Am. St. 890, 84 N.E. 943, 20 L. R. A., N. S., 175; Speicher v. Lacy, 28 Okla. 541, 115 P. 271, 35 L. R. A., N. S., 1066.)

When the vendor refuses peremptorily to rescind the sale, no legal tender is necessary. (Simon v. Burnett, 8 La. Ann. 84; Tibbs v. Timberlake, 14 Ky. (4 Litt.) 12.)

"In an equitable action to rescind a contract, it is not essential that a tender back of the property be made; the court will take into consideration the offers made before trial, at the trial, and in the pleadings, and make proper provisions in the judgment therefor." (Smith v. Howlett, 21 Misc. 386, 47 N.Y.S. 1002; Smith v. Howlett, 29 A.D. 182, 51 N.Y.S. 910; Nelson v. Hatch, 67 N.Y.S. 570; Halpin v. Mutual Brewing Co., 20 A.D. 583, 47 N.Y.S. 412; Ludington v. Patton, supra; Martin v. Martin, 35 Ala. 560; Perry v. Boyd, 126 Ala. 162, 85 Am. St. 17, 28 S.W. 711.)

Edwin Snow and B. S. Varian, for Respondent.

A party entitled to the rescission of a contract must act with reasonable promptness on discovery of the facts entitling him to rescind. (Faulkner v. Wassmer, 77 N.J. Eq. 537, 77 A. 341, 30 L. R. A., N. S., 872; Evans v. Duke, 140 Cal. 22, 73 P. 732; Slothower v. Oak Ridge Land Co. (Va.), 27 S.E. 466; Owen v. Pomona Land & Water Co., 131 Cal. 530, 63 P. 850, 64 P. 253.)

"A purchaser's right to rescind the purchase of real estate is deemed to have been waived if he, with knowledge of the facts authorizing a rescission, exercises such rights of ownership over the property as to lease it." ( Shappirio v. Goldberg, 192 U.S. 232, 24 S.Ct. 259, 49 L.Ed. 419; Precious Blood Society v. Elsythe, 102 Tenn. 40, 50 S.W. 759; Pollock v. Smith, 49 Neb. 864, 69 N.W. 312; Lockbridge v. Foster, 5 Ill. 569; 2 Black on Rescission, sec. 597.)

"A vendee under an executory contract cannot rescind and recover back payments while retaining possession of the land." ( Sievers v. Brown, 34 Ore. 454, 56 P. 170, 45 L. R. A. 642; Vaughn v. Smith, 34 Ore. 54, 55 P. 99; O'Donnell etc. Brewing Co. v. Farrar, 163 Ill. 471, 45 N.E. 283; Haynes v. White, 55 Cal. 38; Herman v. Haffenegger, 54 Cal. 161; Gates v. McLean, 70 Cal. 42, 11 P. 489; Rhorer v. Bila, 83 Cal. 51, 23 P. 274; Hammond v. Wallace, 85 Cal. 522, 20 Am. St. 239, 24 P. 837.)

MCCARTHY, J. Rice, C. J., and Budge, Dunn and Lee, JJ., concur.

OPINION

MCCARTHY, J.

Appellant 's predecessors in interest and respondent entered into a contract, by which the former agreed to buy and the latter to sell the lands and water right involved. Respondent was to plant an orchard, remain in possession and control and care for it for five years and retain the crops. Appellant's predecessors made an initial payment and agreed to pay the balance in six annual installments. The contract provides for a forfeiture of all rights and of any amounts paid, upon default in any of the agreed payments. In March, 1912, the contract was modified by the addition of the following writing indorsed thereon:

"We hereby guarantee the land described in the within contract to be practically free from alkali, and should said land prove to have alkali sufficient to harm the productiveness of the land materially in producing grain, hay, vegetables and fruit, provided said land is properly drained and farmed, the undersigned will return to the holder of this contract the purchase price paid for said land."

This amounts to an express warranty of the character of the soil.

Appellant acquired individually a one-sixth interest in the contracts in November, 1913, and all of the interests in February, 1916. On January 1, 1916, he took possession on behalf of himself and others interested, and maintained possession thereafter. On February 28, 1916, he made a written demand on respondent for a return of all moneys paid on the contracts and a cancelation of the notes representing the remaining installments, on the ground that the land was so impregnated with alkali as to materially harm its productiveness in producing grain, hay, vegetables and fruit. This demand not being met, on March 18, 1916, he brought this action. In the complaint he sets out the original agreement, the subsequent warranty, the breach of the condition of the warranty in regard to alkali, his demand and the failure of respondent to meet the same, alleges that he elects to annul the contract, and, as relief, asks for the installments of the purchase price already paid and a lien upon the premises to secure the same, and for the cancelation of the notes representing the remaining installments and for the rescission of the contracts. Respondent in its answer denies any breach of the condition of the warranty, and sets up that appellant, with full knowledge of the existing conditions, has waived his right to rescind or to any relief on account of the warranty. In a cross-complaint it alleges that several of the notes are past due and unpaid, that it has complied with its contract, and asks the court to decree that unless said remaining payments are made within sixty days of the decree, all rights of appellant under the contracts be forfeited upon respondent surrendering up the unpaid notes. To this cross-complaint, appellant filed an answer, incorporating all the allegations of his complaint, including those in regard to the breach of the warranty.

The court treated the action as equitable, and submitted to the jury this interrogatory: "Has the land alkali sufficient to harm its productiveness materially in producing grain, hay, vegetables and fruit, provided it is properly farmed and drained?"

The jury answered "Yes."

The court then made findings, adopting the finding of the jury as to the alkali character of the land. The court also found first, that appellant did not act with sufficient promptness after...