Newcomb v. Ogden Plow Co.

95 N.W. 174, 120 Iowa 570

• Court: Supreme Court of Iowa
• Decided: May 22, 1903
• Status: Published

Opinion

McOlaiN, J.

The contract between the three parties, the plaintiff, the plow company, and the bank, provided for the conveyance by the plow company to plaintiff of the premises in controversy, for a consideration of- $3,200, payable in certain installments, with the condition thht, in the event of default on the part of plaintiff to .make any of the payments specified in the contract, either the plow company or the bank might declare the 'Contract forfeited, and the plaintiff should have no right to recover back any payments made, the same to be treated as and for rent for said premises, the effect of such failure being to make the contract a lease; and, as between the plow company and the bank, it was agreed that the bank should continue to hold its certificate of purchase of the property on executor’s sale against the plow company, or a deed which it might take for the property in pursuance of the certificate of purchase, as security for the indebtedness of the plow company to it, so long as the payments specified in plaintiff’s contract of purchase were made in accordance with the terms of such contract, which was thereby assigned to the bank, with the provision that the payments specified therein should be made to it. The note given by plaintiff to the plow eothpany for the purchase price specified in the contract was also assigned to-the bank, and with it the mortgage upon other property of plaintiff to secure the payment of such note. It appears that plaintiff made some payments under the contract to the bank,' and that, under the provisions of the contract, he has no right to recover from the plow company any sums of money thus paid, and, on the other hand, that if thé plow company has no. longer any right 'of action against the plaintiff, tó compel him to pay the remainder of the purchase price stipulated for in the contract, then the contract and the note and mortgage should be canceled, as prayed by plaintiff.

The sole question to be determined, therefore, is whether the right of the plow company to enforce payment of the balance of the purchase price, as against plaintiff, i; LAHDcon-cation of. has been in any way lost or extinguished. Counsel for the plow company do not question the correctness of the proposition advanced by counsel for plaintiff, that only the plow company or the bank could take advantage of the provision in the contract for forfeiture, and that if a forfeiture has not been declared, or has not resulted from any act of the plow company or the bank, then the plaintiff remains liable under his contract; and, on the other hand, the proposition is not controverted, that if, without the fault of the plaintiff, the plow company and the bank have become unable tp carry out the contract to convey the premises on payment of the balance of the purchase price by the plaintiff, then there can be no recovery, as against the plaintiff, of the unpaid portion of the purchase price. Counsel for plaintiff insist that by the action of the bank in transferring the sheriff’s certificate on the property to Harrison, and the acquisition by Harrison of title to the property by a sheriff’s deed issued, on the maturity of this certificate, it has become impossible for the bank'and the plow company to perform the contract, and therefore that it is no longer binding upon plaintiff. One contention for the plow company is that before Harrison took an assignment of the sheriff’s certificate from the bank, he had already acquired a tax title to the premises under a sale for taxes which the plaintiff had agreed to pay, and that the inability of the plow company and the bank to make conveyance is due to plaintiff’s own fault in failing to pay such taxes. However this may be, it appears that the bank did actually transfer its sheriff’s certificate on the property to Harrison for a consideration of some $1,300, and that the plow company has claimed the benefit of this consideration, so that it has recognized the fact that the power of the bank and the plow company to make conveyance under the contract above referred to was materially impaired by the act of the bank in transferring such certificate. It does not fol-. low tha.t if no such, transfer had been made, and Harrison had not secured a sheriff’s deed, he would have been able . to maintain his title to the premises as against any claim of plaintiff. The act of .the bank in .transferring the sheriffs certificate, and of the plow company in insisting upon the benefit of such transfer, certainly operated as a revocation of the contract to convey to plaintiff; and neither of these parties can now say that they are ready and able to perform the contract, and that plaintiff is liable for the balance of the purchase money.

The contention of counsel for the plow company that its judgment against the bank was only for the value of the property, of which it was deprived by the act of the 2. same; iia-vénle¿f bank in not continuing to hold such property as security, subject to the plow company’s right of redemption, and therefore that, while plaintiff is entitled to credit to that extent on the purchase price of the property, as provided for in the contract, he remains liable for th¿ unsatisfied balance to the extent of. some $500, is manifestly unsound. It assumes that plaintiff may be compelled to pay the full purchase price of this property, without any possibility of securing title thereto. Title has irrevocably passed from the plow company and the bank* and that too, as we have seen, by reason of' the act of the bank itself, and not merely through failure of the plaintiff to redeem from sales for taxes which he was under obligation to pay. In order to avail itself of the claim that the inability to make title under the contract was due to plaintiffs default inpayment of taxes, the plow company should show that through such default alone did an adverse title accrue to Harrison. This it did not and could not do.

We réach the conclusion that-by the act of the bank in parting with the sheriff’s certificate, under which it held the property as security for the plow company, and the act of the plow company in insisting upon and recovering for its own advantage the consideration received by the bank for such conveyance, the plow company has become completely estopped from collecting any unpaid portion of the consideration provided for in the contract with plaintiff, and represented by the note with mortgage security, as already described, and that the contract, the note, and the mortgage should be canceled and declared no longer of any validity, and, further, that plaintiff is ■entitled to have the mortgage satisfied of record in. the ■county where the property is situated on which such mortgage was given. Plaintiff can have such a decree in this court, at his election, or he may have the case remanded to the lower court for a proper decree. — Keversed.