Anderson v. Morse

222 P. 1083, 110 Or. 39, 1924 Ore. LEXIS 177

• Court: Oregon Supreme Court
• Decided: February 13, 1924
• Status: Published

Opinion

COSHOW, J.

The respondents, who were the plaintiffs in the Circuit Court, have suggested that this appeal should be dismissed because the defendants who do not appeal were not served with notice of appeal. None of those defendants appeared in this .suit. Only the parties appearing are entitled to be served with notice of appeal: Section 550, Or. L.

The demurrer to the complaint is predicated on the theory that the contract upon which it is based is void in these particulars: (a) That Eli K. Anderson, one of the vendors, was dead and the other vendor, Elizabeth N. Anderson, had conveyed her interest in the land; (b) that the contract provides that the only conveyances the vendors were to receive were the deeds said vendors executed in 1909 and then in escrow in the bank; (c) that Eli K. Anderson, one of the vendors, was not a party to the contract which is the basis of this suit; (d) that the contract was never deposited in said bank; and (e) that the parties to the deed are not the same as the parties to the contract.

None of the reasons assigned by appellants for sustaining their demurrer to the complaint are sound. The complaint stated a good cause of suit under all the authorities cited by appellants. It alleges the option to sell, its acceptance by the appellants, and the deposit of the deeds with the approval of the appellants. The deeds, by the agreement made at the time of the deposit, were to be delivered in ten years from that date; provided, payment was made according to that agreement. The fact that the 1917 contract is based on a prior contract does not eliminate the allegations in the complaint regarding the original contract and deposit of the deeds in accordance therewith. The children of Eli K. Anderson, the original vendor, succeeded to his interest in the land as devisees. They were as to all legal intent and purposes, as far as this suit is concerned, the original grantors. The deed from the other vendor, Elizabeth N. Anderson, to the devisees in no way changed the escrows. That deed was made subject to the escrows, was accepted by the devisees in full knowledge thereof, and subject thereto. The contract dated October 9, 1917, did not change the escrows. The deeds were the escrows. The contracts, whether made at the time of or after the deposit, defines the terms for holding and delivering the escrows. Those contracts are not the escrows. The death of the original grantor is alleged. It thus appears from the complaint that a delivery of the escrows at any time after the date of the 1917 contract would have conveyed title to the grantees Morse as of August 31, 1909, the date of the original deposit: Foulkes v. Sengstacken, 83 Or. 118, 127 (158 Pac. 952, 163 Pac. 311); Jackson v. Jackson, 67 Or. 44 (135 Pac. 201, Ann. Cas. 1915C, 373); Devlin on Peal Estate, Deeds, § 33a. The 1917 contract, which is a part of the complaint, confirms those deeds and the devisees of the grantor, Eli K. Anderson, affirm and confirm the acts of their testator in depositing the deeds and in a writing, duly sealed and acknowledged, consent that the escrows may he delivered to the grantees conveying the title as of Angnst 31, 1909. The complaint further alleges, and this allegation is supported by the contract made a part of the complaint, that the appellants accepted those deeds as sufficient title to the premises therein described.

The contention that the plaintiffs, who are respondents here, either rescinded or seek to rescind the original contract of sale is not tenable.

“It [the escrow agreement], may, however, be subsequently varied by the agreement of the parties.” 21 C. J. [§ 9].

Christian v. Deadwood First Nat. Bank, 155 Fed. 705 (84 C. C. A. 53); Raymond v. Smith, 5 Conn. 555 ; Beamer v. Morrison, 210 Ill. 443 (71 N. E. 402). Indeed, it is not always necessary that the agreement be in writing. Although some of the authorities hold that the condition upon which the instrument is deposited in escrow must be expressed in writing, the weight of authorities is to the effect that it need not be. Whether or not the escrow agreement should be in writing depends upon the nature of that agreement and its conditions: 21 C. J. 868, and authorities cited in notes 49 and 50; Foulkes v. Sengstacken, 83 Or. 118 (158 Pac. 952, 163 Pac. 311); Jackson v. Jackson, 67 Or. 44 (135 Pac. 201, Ann. Cas. 1915C, 373); 2 Tiffany, Beal Property (2 ed.), § 462. It necessarily follows, therefore, that the escrow agreement need not be deposited with the escrow.

Instead of the original agreement having been rescinded, it was modified by a subsequent agreement voluntarily made by all of the parties having interest in the land under contract of sale. The 1917 agreement was substituted for the 1909 agreement, but the escrows were to be deliverd as originally prepared. If the escrows had been delivered as contemplated by the parties to the 1917 agreement the grantees would have acquired title to the land as contemplated in the 1909 agreement. There is nothing on the face of the contract of 1917 that indicates illegality; it was not subject to attack by demurrer. The demurrer was properly overruled.

A large discretion is vested in the Circuit Courts in the matter of setting aside defaults. The action of the Circuit Courts in that matter will not be reviewed in this court except for abuse of discretion: Wallace v. Portland, Ry., L. & P. Co., 88 Or. 219 (159 Pac. 974, 170 Pac. 283). The abstract of record does not disclose the steps taken to have the default set aside. The appellants have set out only the order setting aside the default. The presumption is that the order was properly made: Section 799, subd. 17, Or. L.; First Nat. Bank v. Linn County Bank, 30 Or. 296, 300 (47 Pac. 614).

Of the matter stricken from the answer on motion of plaintiffs paragraphs 6, 9, 10 and 13 were based on the escrow agreement of 1909. Defendants, Morse, admit the execution of the agreement of 1917. The latter agreement contains this clause:

“ * * It is mutually agreed by and between the parties hereto that this ag’reement be and hereby is substituted for the agreements depositing said deeds in escrow and which agreements were dated August 31, 1909, and is substituted for said supplemental agreement of September 1, 1909, and all of said prior agreements; * * ”

Said paragraphs did not constitute any defense to the cause of suit and were properly stricken out.

Paragraphs 22, 23, 24 and 25 constituted no defense to the complaint in this suit. These paragraphs allege that the defendants, Morse, never had an attorney to examine the abstract of title to said premises but relied upon the attorney for the plaintiffs ; that .the tender of the escrow deeds was not a tender of a sufficient title; that the quitclaim deed of the grantor, Elizabeth N. Anderson, attempting to convey the two acres referred to above, is wholly insufficient to convey a marketable title, and that the said escrow deeds, if delivered to the defendants, Morse, are wholly insufficient to convey a marketable title or any title. It will thus be seen that most of the allegations are mere conclusions. The answer admits the execution of the 1917 agreement. That agreement recites that the answering defendants had been “ furnished an abstract of title to the real property above described and which abstract the second parties hereto [the appellants] have duly approved and accepted after having had the title shown therein passed upon by their attorney at law.” The defendants, Morse, in said paragraph 22 in effect stated that the abstract of title was not certified to a date later than May 1, 1914, more than four years after the execution of the escrow agreement. No valid reason is alleged for not thoroughly informing themselves about the title prior to the execution of the 1917 agreement. Nothing appears in the last-mentioned paragraphs' of the amended answer imputing fraud to any of the plaintiffs. The allegations in those paragraphs do not constitute any issue of fact triable in this suit. They were properly stricken out. No issuable matter is presented in paragraph 27 of the amended answer and it was properly stricken out.

The reasons assigned for sustaining the complaint on the attack by the demurrer apply with equal force against appellants’ contention that the contract dated October 9, 1917, is illegal and void. The evidence also sustains the contract. It was entered into between parties capable of contracting. It was voluntarily made for a sufficient consideration. The parties plaintiffs were represented in negotiating the contract by able counsel and also participated personally in the negotiations. The defendants, Morse, were represented by the defendant George A. Morse. Ten months were consumed in consummating the contract. There is no evidence of deceit or fraud. The contract was a settlement of controversies and disputes, which easily could and probably would have developed into prolonged litigation. Additional time was given to the defendants, Morse, in which to make payment of the amount owing under the original escrow agreements. These were sufficient considerations for the contract. The defendant, George A. Morse, voluntarily acted in his own behalf and in behalf of his wife. No improper influence was exercised over him to induce him not to employ an attorney. He had ample time to consider very thoroughly the matter. His own evidence discloses that he was accustomed to buying and selling real property. He testified that he had been interested in different transactions involving real property in Jackson County to the extent of $500,000. The allegations of fraud connected with framing the 1917 contract are not supported by any testimony. The agreement is valid and binding upon all the parties thereto.

The improvements for which appellants claim credit were all made long prior to the date of the 1917 agreement. The appellants enjoyed the use of the premises, including all alleged improvements, for over two years thereafter. At the time this suit was commenced the premises were occupied by appellants. The improvements thereon were being allowed to fall in disrepair. There is no evidence to prove the value of the alleged improvements made by the appellants. The appellant, George A. Morse, testified as to the amount he expended in making the alleged improvements, but there is no testimony which tends to prove that the premises were more valuable at the time of the commencement of this suit by reason of said alleged improvements.

In cases where a vendee in possession of the land is allowed improvements upon a strict foreclosure, the evidence must show that the land has increased in value by reason of the alleged improvements, or that the contract provided for an allowance for improvements.

“In the absence of some provision in the contract fixing a definite measure of compensation, the amount recoverable for improvements is not what it cost to put them on the property, but the enhanced value of the property, not exceeding the amount expended for the improvements, and from this is to be deducted an amount equivalent to the fair rental value of the premises.” 39 Cyc. 1402; Hawkins v. Rodgers, 91 Or. 483, 500 (179 Pac. 563, 905).

“When the vendor has neither waived his legal rights nor committed any default, he cannot be involuntarily taxed with improvements made upon his property without his consent, or be made to pay a price for recovering it back.” Moore v. Giesecke, 76 Tex. 543, 551 (13 S. W. 290, 293).

“Declaring a forfeiture for breach of the conditions of a contract is not rescission of the contract. It puts an end to the contract and extinguishes it in pursuance to its terms just as performance extinguishes it.” 13 C. J. 608, cited in Kemmerer v. Title & Trust Co., 90 Or. 137, 143 (175 Pac. 865); Stennick v. J. K. Lumber Co., 85 Or. 444, 478 (161 Pac. 97, 166 Pac. 951).

The time allowed for redemption in strict foreclosures must be determined from the facts in each case. It is largely a matter of discretion of the court. The appellants claim that when the decree was entered in the Circuit Court in this suit the time for the final payment had not arrived. This claim is predicated upon the 1917 agreement. The decree was entered on December 6, 1919, more than ten years after the original escrow agreement was entered into. The 1917 agreement extended the time for completing the payments to January 10, 1920. The appellants cannot claim the benefits of the 1917 agreement and at the same time repudiate that agreement.

“Doth a fountain send forth at the same place sweet water and bitter?” James iii:ll.

The appellants have not sought to do equity in this suit. They have not come into court offering to place the respondents in the same condition in which they would have been had the escrow never been made. They come seeking to have their own contract, deliberately and voluntarily made, declared void. They allege fraud in the making of that contract, but no evidence is introduced to support that allegation. They urge strict technicalities to defeat plaintiffs, and ask for the most liberal equities in their own behalf: Vance v. Blakely, 62 Or. 326, 331 (123 Pac. 390).

By the terms of that contract all payments heretofore made were forfeited in case the terms of the contract were not fully performed by them. Equity cannot, under the circumstances, relieve them of that forfeiture.

“It is well settled that where the parties have so stipulated as to make the time of payment of the essence of the contract, within the view of equity as well as of the law, a court of equity cannot relieve a vendee who has made default.” 1 Pomeroy’s Equity Jurisprudence, § 455.

Sheehan v. McKinstry et al., 105 Or. 473, 484 (210 Pac. 167); Maffet v. Oregon & California R. Co., 46 Or. 443, 454, 455 (80 Pac. 489); Security Savings Co. v. Mackenzie, 33 Or. 209 (52 Pac. 1046); Glock v. Howard & Wilson Colony Co., 123 Cal. 1, 10, 12 (55 Pac. 713, 69 Am. St. Rep. 17, 43 L. R. A. 199).

The appellants complain of the decree in this, that it directs a deed to be executed and delivered by the plaintiffs in case the appellants redeem as provided in the decree. The appellants contend that they would be entitled to a warranty deed. The plaintiffs did, before instituting this suit, tender the defendant, Morse, the two escrow deeds. The plaintiffs fully complied with their contract and did all required of them to entitle them to the relief prayed for. The decree prescribes that in case the defendants, Morse, redeem

“the plaintiff shall make, execute and deliver to the redemptioner a good and sufficient deed to the premises so redeemed, including the water rights as redeemed, and upon the failure of the plaintiffs to make such conveyance this decree should stand in lieu thereof. ’ ’

The decree also provides that in case the defendants, Morse, pay the amount required to make redemption,

“then upon such payment the defendants, Morse, or their successors in interest, shall without any further decree herein be the owners of all the lands above described.”

These provisions in the decree, under Section 9895, Or. L., are ample to have vested title to the lands in the defendants, Morse. The appellants were not entitled to more. They had been in possession of the premises more than ten years at the time the decree was entered. They had during that time exercised ownership over the property, by selling some of it, contracted for the sale of other parts of it; and had subdivided it into tracts, laid out roads through it, platted it, recorded the plat and attempted to dedicate the roads to the public. It would have been unjust under those circumstances to have required the plaintiffs to have executed a deed with covenants of general warranty.

The defendants, Morse, never complained of the insufficiency of the escrow deeds until after this suit had been commenced. They knew that the original grantor was dead at the time they entered into the 1917 contract. They leased the premises for a period of three years to a stranger after this suit was instituted. It was too late to object to the title conveyed by the escrow deeds after this suit had been instituted: Sheehan v. McKinstry et al., 105 Or. 473 (210 Pac. 167).

The defendants, Morse, by their default, prevented the delivery of the escrow deeds. If the defendants Morse had performed, according to the 1917 agreement, the conditions would have been satisfied and the title would have passed: 2 Tiffany, Beal Property (2 ed.), p. 1778, § 462. The plaintiffs lawfully withdrew the escrow deeds and they thereupon ceased to he escrows. The original grantor having died long prior to the commencement of this suit, his deed could not thereafter be delivered. The destruction of the escrow was therefore the fault of the defendants, Morse, and they cannot be heard to complain thereof.

The appellants, Morse, assign as error the provision in the decree requiring them to pay interest on the amount found due while at the same time plaintiffs were by said decree awarded possession of the land. Under the conditions of this suit this was not error requiring’ a modification of the decree, if error at all. The time for redemption expired long before appellants filed their brief in this court. The undertaking on this appeal does not stay execution. Appellants are not injured by that provision in the decree appealed from.

The appellants assign error because they claim that no proof was offered to sustain the allegation in the complaint that the Andersons were the owners of the land involved in this suit on August 31, 1909. By their amended answer appellants admit the title in Andersons at that time, and further admit that after an examination of the abstract of title furnished them by the Andersons at that time, they, appellants, were satisfied with the title. That admission is clearly established by the excerpt from the 1917 agreement set out above.

The plaintiffs acted promptly after the defendants, Morse, defaulted. “Equity aids the vigilant.” The decree of the Circuit Court is affirmed. The Circuit Court retained jurisdiction of this suit for the purpose of adjudicating the rights of some of the defendants who were not served and for the further purpose of appropriately adjudicating the issues regarding platting and subdividing the land under the contract. The suit will, therefore, be remanded to the Circuit Court for such further proceedings as indicated. • Affirmed.