Smith v. Krall

75 P. 263, 9 Idaho 535, 1904 Ida. LEXIS 74

• Court: Idaho Supreme Court
• Decided: January 28, 1904
• Status: Published

Opinion

STOCKSLAGEE, J.

It appears from the record that on the twenty-ninth day of March, 1900, appellant entered into an oral agreement to purchase two lots in Boise from defendant Krall, for the sum'of $850. Negotiations were made through W. S. Walker, agent for Krall. Appellant at said time paid to said defendant through his agent, Walker, $20. On the second day of April following a formal written agreement was prepared and signed, and on the same day, before any further money was paid, an additional agreement was executed and on April 3d following the execution of both agreements, appellant paid' to defendant Krall the 'further sum of $130, and gave his two promissory notes of $350 each for the balance of the purchase money due in one and two years, respectively, and bearing interest at eight per cent per annum. The first agreement after stating the necessary facts of purchase and sale has the following clause:

“And the said party of the second part agrees to pay all state, •city and school and county taxes, or assessments of whatsoever nature, which are or may become due on the premises above described.

“In the event of failure to comply with the terms hereof by the said party of the second part, the said party of the first part shall be released from all obligation in law- or equity to convey said property, and the said party of the second part shall forfeit all right thereto, and all payments made on said property. And the said party of the first part on receiving the payments hereinbefore specifiedj at the time and in the manner above mentioned, agrees to execute and deliver, to the said party of the second part, or to his assigns, a good and sufficient warranty deed to said premises, free from all encumbrances, and it is understood that the stipulation’s aforesaid are to apply to and bind the heirs, executors, administrators and assigns of the respective parties.”

The second contract is as follows: “On or before four months after this agreement, John Krall, party of the first part, agrees to remove from lots No. 1 and 2 in block No. 1 of Krall’s addition, the buildings thereon. O. "W. Smith, party of the second part, agrees to build on lots No. 3 and 4 in same block and addition, a residence that will cost not less than $2,000. The removal of said buildings herein stated is a part of the consideration for the purchase of lots No. 3 and 4 in the said block No. 1 from John Krall.” These agreements were acknowledged.

The eleventh paragraph of the complaint is that the said defendant Krall refused and neglected to remove the said apple buildings from the said lots, and did not remove the same until sometime in the month of July, 1901, by reason of which the plaintiff was prevented from constructing the said house upon the said lots as required by the terms of the said contract.

The twelfth paragraph alleges that by reason of defendant John Kralhs failure to carry out his said agreement, and by reason of his failure to remove the said apple-house, outhouses, bams, etc., from the lots purchased by this plaintiff, and from the lots numbered 1 and 2 of said block 1 until July, 1901, in, violation of his said agreement as above set forth, this plaintiff was damaged in various and large sums of money, to wit: By-increase in cost of building material between August 2, 1900, and July, 1901, $700; by extra cost incurred in moving plaintiff’s bam, $150; by loss of use of said lots 3 and 4, block 1, $300.

The thirteenth paragraph alleges, among other things, that on or about the tenth day of August, 1901, defendant Krall called upon plaintiff for the payment of the first note, whereupon plaintiff offered to pay said defendant both of the notes, together with the interest thereon, except the interest on the first note from the termination of the said four months, for the reason that the plaintiff had been deprived of the use of said lots in the construction and operation of said building thereon, and being injured and damaged as above set forth by reason of the breach of said contract on the part of said defendant, whereupon said defendant notified plaintiff that he would not accept any money upon said notes or either of them except the principal on both notes together with the interest from date to said tenth day of August, 1901.

The fourteenth paragraph states that plaintiff is informed and believes, etc., “and therefore alleges the fact to be, that on the tenth day of August, 1901, defendant Krall was not financially able to respond in damages to this plaintiff for the injury sustained .... and that a judgment against said Krall for the damages sustained would have been uncollectable and worthless, and this plaintiff ever since the offer aforesaid has at all times been ready and willing to pay defendant Krall the total amount due under the contract in gold coin aforesaid, less the interest due on the first note from the termination of said four months, and has always been, and now is, ready and willing to receive a conveyance of said premises and pay defendant Krall the amount due under the contract, less the damages sustained by this plaintiff by reason of the failure of said defendant Krall to carry out his said agreement under the terms of his said contract.” By amendment permitted by the court following this paragraph, plaintiff says: “And on or about the fourth day of August, 1902, this plaintiff tendered to the defendant, John Krall, the full amount due on said notes, and each of them, including interest thereon at the rate provided for from the date of said notes to the day of such tender, but that said Krall declined and refused to execute a deed, and still so refuses etc.”

The seventeenth paragraph alleges that Della Gwinn, wife of Montie B. Gwinn, claims to have purchased these lots on or about the twenty-second day of April, 1902, from defendant Krall. Defendant Krall, answering for himself, admits the first and second paragraphs of the complaint — that is, the ownership of the property and the agreement to sell to plaintiff — but denies the third paragraph which alleges that the removal of said buildings from lots 1 and 2 aforesaid is a part of the consideration for the purchase of lots 3 and 4, block 1, or that he ever signed such agreement. Denies that he refused or neglected to remove said buildings until the month of July, 1901; admits that a portion of said buildings, for reasons beyond the control of this defendant, were not removed from lots 1 and 2 of said block 1, but that a portion of said buildings were almost immediately moved, and the buildings permitted by defendant to remain thereon in no way prevented the plaintiff from constructing his house or from keeping and performing each and all of the promises and agreements contained in the said written agreement and by him (plaintiff) promised to be kept and performed; denies that plaintiff was damaged in any sum by reason of defendant not carrying out his agreemfent or not removing the buildings; admits that on or about the tenth day of August, 1901, and at divers and sundry times, he called upon plaintiff for the payment of the first note and for the payment of both notes; admits that he notified, or caused plaintiff to be notified, that he would not accept any money upon said notes except the principal on both, together with the interest thereon, without deduction from any cause whatever; alleges that he was at all times ready and willing and prepared to accept any payment upon said notes offered or tendered by plaintiff, provided the same was made unconditionally and uncompromised by a demand for a reduction of said interest account; denies that August 10, 1901, or at any time prior thereto, he was not financially able to respond to any judgment plaintiff might recover against him for damages, or that a judgment against him would have been uncollectable or worthless; denies the damage of $1,150 set out in the complaint.

Further answering, defendant Krall alleges: That plaintiff is not entitled to the relief prayed for, for the reason that the said plaintiff has at all times since making the agreement failed and refused to keep and perform his promises and agreements set forth in the written agreement; that prior to the twenty-second day of April, 1902, and almost constantly between the second day of April, 1901, and the twenty-second day of April, 1902, he demanded the money due on the notes, but plaintiff refused to pay any part thereof except upon terms involving a modification of the contract and agreement; that by such refusals he forfeited all rights under the contract, etc.; that April 22, 1902, defendant conveyed the lots in dispute to Della Gwinn; that long before the commencement of this suit plaintiff knew defendant had sold and conveyed the lots to Della Gwinn, and that defendant had no power or control over said premises, and for that reason knew this defendant was unable to convey said premises or any part thereof to plaintiff.

Defendants Gwinn answer for themselves, setting up title to the lots in dispute by virtue of a warranty deed executed by defendant Krall to Della Gwinn on the twenty-second day of April, 1902. There seems to be no dispute as to the conveyance by defendant Krall to Della Gwinn at the time and in the manner alleged.

After hearing all. the evidence offered and received by all the parties to the action, the court made its findings of fact and conclusions of law, and ordered judgment accordingly.

The court finds, first, that on or prior to April 2, 1900, defendant Krall was seised in fee simple of the lots in dispute, and that on said day plaintiff and defendant Krall entered into the written contract set out in the complaint. Second, that plaintiff has not paid the promissory notes with the interest as agreed or at all, etc. Third, that John Krall did not remove the buildings upon lots 1 and 2 in Krall’s addition as mentioned in the agreement of April 2, 1900, until about July 1, 1901; that O. W. Smith has not built or constructed any residence of any nature or kind upon lots 3 and 4 described in the contract. Fourth, that plaintiff never at any time prior to the sale of the property covered by said contract of April 2, 1900, to Della Gwinn, tendered to John Rrall the amount due under said contract, but at all times neglected and refused to pay the full amount due according to the terms of said contract; that O. W. Smith paid the taxes upon said property after the execution of said contract.

The fifth assignment finds-that on April 22d, 1902, Rrall sold and conveyed to Della Gwinn the lots in controversy, and that the consideration was $807; that plaintiff had knowledge of said sale not later than April 24, 1902; that the notes above referred to were returned to plaintiff and he was notified that he had forfeited his right under the contract above referred to; that at the time of the said sale above referred to plaintiff had not paid or tendered the amount due under the contract referred to in paragraph 2 of plaintiff’s complaint, although the plaintiff had been requested to make such payments and to comply with said contract by defendant Rrall.

The sixth assignment finds that on or about the second day of August, 1902, the plaintiff stated to defendant Rrall that he was ready to pay the amounts due under said contract, including principal and interest, and exhibited a roll of money at said time without counting the same out to the defendant. That Rrall notified plaintiff at said time that he had sold said property- and had nothing further to do with the same.

As conclusions of law the court finds that the plaintiff failed to comply with the terms of the agreement set forth in plaintiff’s complaint and had forfeited his right to conveyance under said contract, and is not entitled to the specific performance of the same.

Counsel for appellant insist that the evidence was insufficient to sustain the findings and decision of the court.

We find a very complete record in the case, and the attorneys have favored the court with exhaustive briefs on all the issues involved. There seems to be no dispute as to most of the facts.

The contract for the sale of the lots by Krall to Smith — - date, 'amount, terms and conditions — are all shown by the record. The second contract entered into is somewhat in dispute, Krall testifying that he has no recollection of the clause therein providing that the removing of the buildings should be a part of the consideration for the sale of the lots, but does not dispute the fact that he did enter into the two contracts. It is also beyond dispute that respondent Krall did not move, the buildings from the lots as contemplated by the contract until about eleven months after he should have done so. It is further shown that he ignored repeated requests frcm appellant to comply with the contract by the removal of the buildings, but finally about July 1, 1901, he did remove the buildings. It is disclosed by the record that neither party to this transaction acted in good faith toward the other, respondent insisting on appellant paying the notes with interest when due, notwithstanding he had failed to comply with the clause in the contract for the removal of the buildings. On the other hand, appellant seeks to constitute himself the arbitrator of the shortcomings of respondent, and refuses to pay the notes with the interest as provided for in the notes and contract. The two contracts are not difficult of construction. Appellant agreed to pay a fixed consideration for this property, and paid $150 at the time of the execution and delivery of the contract and notes, and also agreed to pay all taxes that might be assessed against the property until he got his deed. This he did, but because respondent Krall did not remove the buildings as per his agreement, appellant refuses to comply with his contract, and only proposes to pay such amount on the notes as in his judgment he should pay. Thus'we find them contending up until after the second note fell due, and soon thereafter respondent Krall says, after making another demand for payment from appellant and being refused, he executed the deed to Della Gwinn.

Appellant cites a long list of authorities holding that either party to a contract of the character before us before forfeiture should give reasonable notice, also to the effect that the party first at fault should not be heard to complain of the laches of the other party. This is unquestionably the rule, but do the facts in this case bring it within the rule contended for?

Courts of equity do not make contracts for parties, merely construe them, and as we construe the contract in this case, time was of the essence of the contract, and both parties could be held to a strict performance of it.

If Mr. Krall was here asking the court to assist him in requiring the plaintiff Smith to comply with the contract, the authorities cited by appellant would apply, and we certainly would say to him, “The trial court by its findings says you have also violated the contract, and hence cannot be heard to complain here, and you must first make the plaintiff whole in any damage he may have sustained by reason of your failure in the performance of your contract.”

In this case Mr. Krall is not in court asking any assistance from it; he stands on his contract and insists that he only did what the contract authorized him to do when he sold the lots to Della Gwinn. This fact is conceded by appellant. He admits that he never made a tender to respondent until after he knew the lots had been sold and conveyed to another party. In equity the party asking relief must came into court with clean hands and good faith, and as we view it neither party to this contract would have any standing in court asking its assistance in the enforcement of this contract. We cannot refrain, however, from saying that good faith and honest dealing would have prompted Mr. Krall to have tendered back the payment of $150 on the contract as well as the taxes on the property theretofore paid by appellant, amounting to $48. This is based on the statement of appellant that he had been greatly damaged by the failure of respondent to remove the buildings and which he assigns as his reasons for not tendering to respondent Krall the payments as they fell due. This, however, did not excuse him from a compliance with his contract. He had entered into a solemn obligation to meet the payments as they fell due, and before he can be heard in equity he must show that he is not at fault in any of his obligations. In other words, he cannot plead the laches of Krall in justification of his own shortcomings.

We think we are justified in this conclusion by all the modern authorities to which our attention has been called. We have carefully examined all the questions raised by appellant, and whilst we have not taken them up in the order named in the brief and record, we do not find any error that would warrant a reversal of the judgment.

We conclude that this judgment should be modified to the extent that the respondent Krall should be required to pay appellant Smith the amount of taxes paid on the property, together with the $150 paid to Krall at date of contract.

The judgment is modified as above indicated, each party to pay their own costs, and cause remanded for further proceedings in harmony with this opinion.

Sullivan, C. J., and Ailshie, J., concur.