Perrin v. Chidester

139 N.W. 930, 159 Iowa 31

• Court: Supreme Court of Iowa
• Decided: February 14, 1913
• Status: Published

Opinion

Deemer, J.

The general nature of this controversy is outlined in the preceding statement, and the grounds relied upon for a reversal may be briefly summarized as follows: (a) The title offered Stout was not such as he bargained for. (b) The deed tendered by the referees did not comply with the terms of the sale; and, having elected to rescind, there was a mutual rescission, and Stout was entitled to .the return of his money, (c) The contract did not provide for a forfeiture ; and, the referees having elected to rescind and resell, Stout was entitled to the return of his money, (d) Stout was not tendered a deed until October 24th, giving the referees ample time to perfect the title and give him a mercantile title; but this they failed to do in that: (1) The deed did not comply with the terms of the sale in that it reserved all the coal and mineral underlying the land, whereas the sale of the premises was subject only to a coal lease then outstanding; (2) the proceedings were defective in that, in the paper served and filed, it was stated that coal and mineral rights would be retained by the owners, and, at the time the deed was tendered, the referees could not transfer any coal or mineral rights; (3) the supplemental decrees were made after the sale to Stout, and the referees were not in position, in October, to deliver to Stout a merchantable title to the land.

1. Partition: referees sale: mutual rescission: damages. I. We may first dispose of a general contention made for Stout that there was a mutual rescission and abandonment of the contract of purchase. • If that be true, then Stout would unquestionably be entitled to a return of the money paid by him. Anderson v. Haskell, 45 Iowa, 45; Burge v. Railroad Co., 32 Iowa, 101; Frederick v. Davis, 133 Iowa, 362; Myers v. Townsend, 103 Iowa, 569; Irish v. Martin, (Iowa) 113 N. W. 470; Wood v. Whitton, 66 Iowa, 295; Tague v. McColm, 145 Iowa, 179; Reiger v. Turley, 151 Iowa, 491. On the other hand, if the referees were not at fault, and Stout, the bidder, without justifiable excuse, refused to complete the contract by paying the balance of the purchase money and taking title to the land — that is, such title as the referees were authorized to convey — then Stout was not entitled to a return of the money paid, but the referees had an election to sue him for the balance due by action for specific'performance, or to secure an order for the resale of the land, retaining the amount paid to reimburse them for any damages which might follow, because of Stout’s failure to comply with his contract; these damages, of course, being the differencé between the amount of his bid and the amount obtained at the resale. Downey v. Riggs, 102 Iowa, 88; Claude v. Richardson, 127 Iowa, 623; Thompson v. Brown, 106 Iowa, 367; Austin Mfg. Co. v. Decker, 109 Iowa, 277; Olson v. Sortedahl, 143 Iowa, 166; Simmons v. Sefrit, (Iowa) 125 N. W. 93. This is but a familiar application of the rule that a party cannot profit by his own wrong.

In actions between vendor and purchaser, if the purchaser, without just cause, refuses to complete his contract, he cannot, in the absence of some promise or agreement, demand the return of the consideration paid. Warvelle on Vendors, page 949; Lawrence v. Miller, 86 N. Y. 131; Bakeman v. Pooler, 15 Wend. (N. Y.) 637.

2. Same: title: time for perfecting. Ordinarily, if it is found the vendor cannot make a good or merchantable title, the vendee is relieved from paying for the land, and may receive back what he has paid. Sennett v. Shehan, 27 Minn. 328 (7 N. W. 266). But, if the vendor is willing and offers to- perform his part, no action will lie to recover the portion of the purchase price paid, and the fact of a resale does not change the rule. Ketchum v. Evertson, 13 Johns (N. Y.) 359 (7 Am. Dec. 384).

Again, even in ordinary sales where a vendor has received the purchase money for land which he has agreed to convey, if no time be specified, he is entitled to a reasonable time within which to make a conveyance, and in such case there should be a demand of a deed and a refusal, before a suit for the return of the purchase money will lie. Kime v. Kime, 41 111. 397. How far these rules are applicable to judicial or referees’ sales will be hereafter considered.

3. Same: mutual abandonment of sale: evidence. Whether or not there was an abandonment or mutual rescission of the contract between the parties is wholly a question of fact; and a reading of the record fully convinces us that there was no such abandonment or mutual rescission. It is true that, from near the time Stout saw the land down until the commencement of this proceeding, he, Stout was endeavoring to find some cause for rescission; but the referees never consented thereto; on the contrary, they were insisting that he perform; and it also appears that they were attempting to meet all objections which Stout had interposed to the title or to the proceedings.

Moreover, in the proceedings asking for a resale, the referees in their application recited the following facts:

Come now the referees in the above-entitled partition proceeding and state to the court that heretofore, to wit, March 8, 1911, they sold at public sale, under the orders and directions of the court, the following described real estate, to wit: [Here follows description.] That said land was sold on said date to one A. N. Stout, who was the highest bidder therefor, bidding for the sum of $3,600, $500 cash down, and the balance to be paid upon delivery of deed and abstract; that said sale was duly approved by the court on the 13th day of September, 1911. They further state that they have presented to said A. N. Stout a referees’ deed therefor, together with an abstract of title for said land, but that said A. N. Stout refused to comply with his part of the contract to purchase, and refused to pay the amount due from him, and still neglects and refuses to pay therefor, and that he has now forfeited all his rights to said land and to the $500, which he paid at time of sale. Wherefore, said referees ask the court to set aside said order approving sale to said A. N. Stout of said land, and which order was made on September 13, 1911, and .that the deed to him be set aside, and that said sale be set aside and held for naught, and that they be directed to readvertise the said land to be sold at public sale in the manner required by law, and sell the same at public sale after giving due and legal notice thereof.

It was pursuant to this application that the order for resale was made; and it will be noticed that in this they claimed the right to retain the $500 because of Stout’s default. There being, then, no rescission or abandonment, we go now to the other grounds relied upon for a reversal. These are, in substance, that the proceedings were defective, that the title tendered was not merchantable, and that, by reason of these facts, Stout is entitled to recover back the purchase money paid.

4. Same: caveat emptor: rescission. A partition sale is a judicial sale, and the rule of caveat emptor applies at least to a limited extent. Findley v. Richardson, 46 Iowa, 103; Hale v. Marquette, 69 Iowa, 376. In sales upon partition, the rule is applicable, in so far as any warranties are concerned; but a purchaser has a right to demand that the proceedings be such as that he gets the title of the parties to the proceedings. If, then, he shows that the proceedings were so defective that he could not obtain the title of the various parties, no matter what that title may have been, he is not, according to the weight of authority, required to complete the sale. Cashion v. Faina, 47 Mo. 133; Sebring v. Mersereau, 9 Cow. (N. Y.) 344.

The rule announced in Freeman on Cotenancy and Partition is as follows: “If errors and irregularities occur in the course of the proceedings, but are not of a character such as to render the sale in partition void, in whole or in part, they have no prejudicial effect on the purchaser. If the parties against whose interests the errors and irregularities were committed take no steps to set aside or otherwise avoid the sale, the purchaser, by reason of their acquiescence, can acquire their title, and must therefore make good his bid.” The writer cites the following in support of the text: Rogers v. McLean, 34 N. Y. 536; Mead v. Mitchell, 17 N. Y. 211 (72 Am. Dec. 455); Croghan v. Livingston, 17 N. Y. 218; Dunning v. Dunning, 37 Ill. 315. We have examined them and find that they do so. Again the same text-writer says: “A sale in partition is a judicial sale. The purchase is protected by the judgments of the court as fully as in any execution or judicial sale. The various matters necessary to authorize the sale have all been made the subjects of judicial inquiry and determination. If the court' acted erroneously in deciding upon the sale, or committed any other error, this should have been corrected by appeal or by some other appropriate proceeding in the partition suit. Not being so corrected, the parties interested have acquiesced in and ratified it, and they cannot employ it in any collateral manner to defeat tbe purchaser’s title.”

5. Same: rescision: tender. Now the evidence shows that, when the referees took the abstract to Stout, he (Stout) delivered the same to his attorney for examination, and that this attorney pointed out certain defects which should be cured. Stout then sai¿ to one of the referees that he did not think the defects could be cured, but this referee said that they could and would be, and the matter was immediately placed in the hands of the attorneys in the original suit, and supplemental decrees on proper notice were procured, which were intended to meet all these defects. These were extended upon the abstract, and the abstract was again handed to Stout’s attorney, and he (the attorney) put his “O. K.” upon it. True, Stout says he had no authority to do so, but he does not distinctly negative his continued employment. Having met all these objections, one of the referees tendered Stout a referees’ deed and demanded that Stout pay the balance within five days, or he would forfeit the $500. Stout then made no other objection to the title, but within two or three days served notice upon the referees to the effect that:

Complying with the verbal notice heretofore given you during the month of April, 1911, I demand of you, and each of you, the return of the money deposited, being the sum of five hundred ($500.00) dollars, which money was deposited as earnest money, wherein I had arranged to purchase certain property from you in certain partition proceedings in the above-entitled cause, and wherein you agreed to. sell said property, but by reason of the imperfect and defective title you were unable to comply with the terms of your agreement, whereby you were to convey said premises during the month of March, 1911, and that by reason of your inability at that time to furnish me a good title, I advised you in the month of April, 1911, that I would not take said property and would require you to return the money delivered, to wit, five hundred ($500.00) dollars.' You are now notified that I demand of you, and each of you, the return of said money, to wit, the sum of ($500.00) five hundred dollars. Dated this October 24th, 1911. A. N. Stout.

It will be noticed that Stout placed his notice of rescission upon what had been done in April, and that he made no-other complaints of the title than those which appeared at that time. The referees had a reasonable time within which to cure the defects appearing upon the abstract which were pointed out to them, and this was done. As a rule, wrhere a party gives a reason for his- conduct, and plants his objections upon certain grounds, he cannot, after the other party has gone to expense and cleared up all these defects, make his objections upon other and distinct grounds. In other words, he cannot, after litigation is commenced, “mend his hold.” Donley v. Porter, 119 Iowa, 542, and cases cited.

The defects thus pointed out were cured within a reasonable time, and Stout then made no other objections than the ones first insisted upon. It is said, however, that the referees did not tender a deed and demand the money after the defects were cured. But this is a mistake, as. the record will show. But, however this may be, Stout, in order to recover, would, under the facts disclosed, as it seems to us, be compelled to tender his money and demand a compliance with the contract. Rutherford v. Haven, 11 Iowa, 587; Washburn v. Carmichael, 32 Iowa, 475; Grimmell v. Warner, 21 Iowa, 12; Winton v. Sherman, 20 Iowa, 295; Hayward v. Hunger, 14 Iowa, 516.

6. Same. Appellant’s counsel rely quite largely upon the fact that, in reporting the sale to Stout, the referees expressly said that: “All coal and mineral underlying the same, which is expressly reserved, and all of which above-described property is subject to a certain coal lease covering said property and in favor of the Smoky Hollow Coal Company”- — and that the deed contained a like reservation, and that in other parts of the proceedings this was the statement. But our examination shows that the original decree provides for a sale, subject to the Smoky Hollow Coal lease, that the referees were authorized to make such a sale, and did in fact do so, when the property was offered at auction. Again, whatever trouble there may have been with the original decree and proceedings in this regard was cured by a supplemental decree entered October 22, 1909, and another decree entered December 4, 1911. No objection upon this score was ever entered by Stout until he filed his application thereon on December 13, 1911. The deed which was offered him in October was in perfect form, and the original decree was corrected, and the mistake in some of the intermediate proceedings was corrected before Stout even made any objections thereto. On the whole record, we are impressed with the thought that Stout “got sick” of his bargain, and from the time he first saw the land concluded to rue it; and that without substantial grounds for complaint, save that he offered too much for the land, he is attempting to get rid of a binding bargain; and without fault on the part of the referees, and solely because he did not wish to complete the sale, he asks the court to return him the money paid. This we think he should not be permitted to do; and, with the trial court, we agree that his application should be overruled.— Affirmed.