Case ID: or_34/html/0454-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Moore,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Argued 9 January;
    decided 27 February, 1899.
    SIEVERS v. BROWN.
    [45 L. R. A. 642; 56 Pac. 171.]
    1. Right Conbebbed by Bond bob Deed. — A bond for a deed transfers to tbe obligee an equitable interest in the land agreed to be conveyed, the legal title remaining with the obligor in trust for the purchaser.
    2. Bond b-ob Deed — Right ob Gbantee to Possession. — Unless particularly specified, a bond for a deed does not entitle the obligee to possession, and if he takes possession without consent, he is a trespasser.
    3. Rent bob Possession Undeb a Bond. — Where the obligee in a bond for a deed takes possession, the payment of interest on deferred installments of the purchase price is usually sufficient compensation for the use of the premises until the maturity of the debt under the bond.
    4. Vendob and Pubchasee — Bbbect ob Rebusad to Pay. — A vendee in possession of real property under a contract for its purchase is liable to the vendor for the reasonable rent thereof from the date of his refusal to carry out the contract.
    5. Bbbect ob Foeecdosube on Tenant’s Rights. — The rights of a tenant are not affected by a foreclosure until the delivery of the sheriff’s deed after confirmation of the sale.
    6. Fobbeitube Undeb Bond bob Deed. — The obligor in a bond for a deed cannot demand compliance with the contract by the obligee, or declare a forfeiture for a breach thereof, until he is himself prepared to comply with its terms, and has tendered a deed.
    7. Vendob and Pubchasee — Tebmination ob Tenancy. — The tenancy at will initiated between a vendor and vendee of real property by the failure of the latter to carry out the contract of sale is terminated by a tender of compliance therewith by the vendor, coupled with the ability to make good the tender.
    8. Vendob and Vendee — Emblements.—A vendee who is in possession of real property as a tenant at will under a bond for a deed, the terms of which he has broken, is entitled to the crops sown thereon before such tenancy was ended, but not to such as were sown after notice to quit.
    9. What is Notice to Quit. — The commencement of a suit to foreclose a bond for a deed, is equivalent to a notice to the vendee in possession to quit, within the terms of Section 3523, Hill’s Ann. Laws, giving a tenant the right to harvest a crop sown before receiving a notice to quit.
    
    From Marion : George H. Burnett, Judge.
    
      This is an action by Henry H. Sievers to recover tbe value of certain crops grown by him on the land of Samuel B. Brown, but appropriated by the latter to his own use. The transcript shows that plaintiff, having agreed to purchase from defendant a tract of land in Marion County for the sum of $3,200, paid of the purchase price, on September 8, 1892, the sum of $600, and executed his promissory note for the balance, payable in eight years, in annual installments of $325, which note provided that, if default should be made in the payment of any of said installments when they severally matured, defendant might elect to consider and treat the whole sum as then due and payable ; that, in consideration of said payment and promise, defendant executed to plaintiff a bond for a deed, whereby he covenanted, upon the payment of said note, to convey the premises, by a good and sufficient deed, free from all incumbrances, and plaintiff, by defendant’s license, entered into possession thereof; that, on the maturity of the first installment, defendant demanded payment of the same, but plaintiff, claiming that the land was not correctly described in the bond, and that defendant’s title thereto was defective, refused to comply therewith; that defendant instituted a suit in the Circuit Court of Marion County against the heirs of his grantors, and obtained a decree correcting the description, and, having otherwise perfected his title to the premises, he executed and tendered to plaintiff a deed thereof, and demanded payment of said note, but plaintiff refused to pay any part thereof, whereupon defendant commenced a suit in said court against him, and obtained a decree correcting the description contained in the bond, foreclosing plaintiff’s equitable interest in the premises, which were ordered sold, and the purchaser put in the immediate possession thereof, in pursuance of which the sheriff of said count}' sold the land to defendant, and on July 31, 1894, evicted plaintiff therefrom, and restored the possession to defendant, though the sale was not confirmed until the sixth of November, following; that when said land was sold there was a quantity of wheat and oats growing thereon of the reasonable value of $92.66, and vegetables of the value of $75, and a lot of hay cut from said premises stored in the barn, all of which defendant appropriated to his own use. The cause being at issue, a trial was had, and the jury, in pursuance of the court’s instructions, found that plaintiff was only entitled to the sum of $37.50, the value of the hay, and, judgment having been rendered thereon, plaintiff appeals.
    Aeeirmed.
    For appellant there was a brief over the name of Mitchell, Tanner & Mitchell, with an oral argument by Mr. Albert H. Tanner.
    
    For respondent there was a brief over the name of Holmes & Kellogg, with an oral argument by Mr. William H. Holmes.
    
    
      
      Note. — As to the interest obtained by a bond for a deed, see the opinion in Security Savings Co. v. Mackenzie, 33 Or. at pp. 211 and 214; Gray v. Perry, 25 Or. 1, and Sayre v. Mohney, 30 Or. 328. — Reporter.
    
    
      
      Note. — This section reads as follows: “When the leasing is for the purpose of farming, the tenant * * * shall have free access to * - * gather any crop planted or sown by him before the service of notice to quit.” — Reporter.
    
   Mr. Justice Moore,

after making the foregoing statement of facts, delivered the opinion.

It is contended that, if the crops be regarded as part of the realty, no title thereto vested in defendant under the foreclosure proceedings until the sheriff’s deed was executed; that plaintiff, having planted them, was the owner thereof; and that defendant, having converted them to his own use, is liable for their value.

A bond for a deed transfers to the obligee an equitable interest in the premises agreed to be conveyed, which is measured by the amount paid on account of the purchase. The legal title remains in the obligor, in trust for the purchaser, who, upon payment of the entire consideration, acquires the whole equitable interest, and may maintain a suit to compel the specific performance of the contract, if the obligor refuse to keep his covenants. In Lysaght v. Edwards, 2 Ch. Div. 499, Jessel, M. B., in commenting upon the purport of an agreement to convey real property, and the method of foreclosing the purchaser’s equity, says : “It appears to me that the effect of a contract for sale has been settled for more than two centuries. Certainly it was completely settled before the time of Lord Hardwicke, who speaks of the settled doctrine of the court as to it. What is that doctrine? It is that, the moment you have a valid contract for sale, the vendor becomes, in equity, a trustee for the purchaser of the estate sold, and the beneficial ownership passes to the purchaser; the vendor having a right to the purchase money, a charge or lien on the estate for the security of that purchase money, and a right to retain possession of the estate until the purchase money is paid, in the absence of express contract as to the time of delivering possession. In other words, the position of the vendor is something between what has been called a naked or bare trustee, or a mere trustee (that is, a person without beneficial interest), and a mortgagee who is not, in equity (any more than a vendor), the owner of the estate, but is, in certain events, entitled to what the unpaid vendor is, viz., possession of the estate, and a charge upon the estate for his purchase money. Their positions are analogous in another way. The unpaid mortgagee has a right to foreclose ; that is to say, he has a right to say to the mortgagor, ‘Either pay me within a limited time, or you lose your estate,’ and in default of payment he becomes absolute owner of it. So, although there has been a valid contract of sale, the vendor has a similar right in a court of equity. He'has a right to say to the purchaser, ‘Either pay me the purchase money, or lose the estate.’ Such a decree has sometimes been called a decree for cancellation of the contract. Time is given by a decree of the court of equity, or now by a judgment of the high court of justice ; and, if the time expires without the money being paid, the contract is canceled by the decree or judgment of the court, and the vendor becomes again the owner of the estate.”

It will be observed, from the language quoted, that in England, if the vendee, under a contract for the purchase of real property, make default in the payment of the purchase money, the vendor may maintain a suit to cancel the contract, which is equivalent to a strict foreclosure. In Button v. Schroyer, 5 Wis. 598, it was held that a decree foreclosing a contract for the conveyance of real property, which ordered a sale of the premises, was erroneous, the court saying : “The proper decree in such cases is that the money due upon the contract be paid within such reasonable time as the court may direct, or that the vendee be foreclosed of his equity of redemption.” To the same effect is the case of Baker v. Beach, 15 Wis. 99. The justice of the rule, announced in England and followed in Wisconsin, may well be doubted, and particularly so when the vendor has received a large portion of. the purchase money; in which case equity would seem to demand that the premises be sold to satisfy the balance due on the contract, upon the payment of which the vendee should be entitled to the remainder of the money derived from such sale. But whatever the proper rule may be, the consideration of the decree in the foreclosure proceedings does not seem to be necessary in the determination of this cause.

An examination, of tbe transcript shows that the sheriff, obeying the mandate of the court, sold the land to defendant, which sale was thereafter confirmed by the court, and, in the absence of an appeal from said decree, it must be assumed that defendent did not acquire plaintiff’s equitable interest in the premises until he procured the sheriff’s deed thereto. Such interest not having been barred when plaintiff was evicted, it becomes important to consider the relation that existed between the parties under the contract. A bond for a deed, unless so specified therein, does not entitle the obligee to take possession of the premises, and hence, if he enter without the obligor’s license, express or implied, he is a trespasser: Williams v. Forbes, 47 Ill. 148; Chappell v. McKnight, 108 Ill, 570; Druse v. Wheeler, 22 Mich. 438.

When possession is given, however, either by the bond or the obligor’s license, it is understood, in the absence of any stipulation to the contrary, that the payment of interest on the deferred installments of the purchase price affords an ample consideration for the use and occupation of the premises: Cleveland v. Burrill, 25 Barb. 532; Parke v. Leewright, 20 Mo. 85; Hundley v. Lyons, 5 Munf. 342; Hepburn v. Dunlop, 14 U. S. (1 Wheat.) 179.

It has been held that a purchaser in possession of real property under the vendor’s license cannot be evicted, so long as he offers to perform the conditions of his agreement (Whittier v. Stege, 61 Cal. 238); but, if he refuses to comply therewith, the vendor may treat him as a tenant at will (Harris v. Frink, 49 N. Y. 24, 10 Am. Rep. 318); and he thereby becomes liable to the vendor for the reasonable value of the use of the premises for the time during which he continues in possession after he abandons the agreement (Smith v. Wooding, 20 Ala. 324; Osgood v. Dewey, 13 Johns. 240; Dwight v. Cutler, 3 Mich. 566, 64 Am. Dec. 105; Hogsett v. Ellis, 17 Mich. 351; Gould v. Thompson, 4 Metc. [Mass.] 224). The application of this rule would render plaintiff liable to defendant for the reasonable rent of the land from the time the relation of vendor and purchaser was abrogated by the former’s refusal to keep his agreement.

As a corollary from this plaintiff would undoubtedly be entitled to the crops grown thereon, as emblements, unless the relation of landlord and tenant was terminated, for it has been held that a tenant is not affected by a foreclosure till the sale is consummated and the deed delivered: Whalin v. White, 25 N. Y. 462; Allen v. Elderkin, 62 Wis. 627 (22 N. W. 842).

The relation of vendor and purchaser was undoubtedly severed, and that of landlord and tennant inaugurated, September 8, 1893, when plaintiff refused to pay the first installment due under the contract; but plaintiff’s repudiation of his agreement did not authorize defendant to declare a forfeiture until March, 1894, when he was ready and able to convey the premises according to the terms of his bond: Mix v. Beach, 46 Ill. 311; Peck v. Brighton Co., 69 Ill. 200.

Defendant, in March, 1894, having tendered a deed, and demanded payment of the amount agreed upon, plaintiff’s refusal to comply therewith was tantamount to a declaration of forfeiture, which terminated the tenancy existing between the parties.

This being so, the decision must hinge upon the question whether the crops were planted before or after that date. In Samson v. Rose, 65 N. Y. 411, it is held that one whose estate is terminated by his own act or default is not entitled to emblements. In Harris v. Frink, 49 N. Y. 24 (10 Am. Rep. 318), Mr. Justice Rapallo, in commenting upon the right of a vendee to take the crops grown upon the premises of which he was in possession under a contract of purchase, says: “If he makes default in his contract of purchase, or commits waste, or in any other manner terminates the tenancy by his own wrongful act, he becomes a trespasser, and may be sued as such, or in ejectment, and he cannot dispute the title of the party under whom he entered (Cooper v. Stower, 9 Johns. 331; Dolittle v. Eddy, 7 Barb. 74; Whiteside v. Jackson, 1 Wend. 418; Leonard v. Pitney, 5 Wend. 30; Jackson v. Stewart, 6 Johns. 34 (8 Am. Dec. 293); Quackenboss v. Lansing, 6 Johns. 49); and he would, no doubt, forfeit his right to emblements under those circumstances.” See, also, Stewart v. Doughty, 9 Johns. 107; Whitmarsh v. Cutting, 10 Johns. 360; Powers v. Ingraham, 3 Barb. 576. “It is true,” says Mr. Justice Forger in Reeder v. Sayre, 70 N. Y. 180 (26 Am. Rep. 567), “that a tenant, holding by a tenure which is uncertain as to the time at which it will cease, is entitled to take off, after it has ceased, the crops which he has sowed in the course of husbandry. But if it is certain at the time when he sows how long it will continue, and it is plain that he cannot, before it ceases, reap that which he may sow, then it is his own folly if he sows (per Lord Mansfield, Wigglesworth v. Dallison, 1 Doug. 201), and he will not be permitted to reap. This rule does not give to the tenant any right by reason of his having ploughed, manured, or otherwise prepared the ground for the seed, if he has not sowed.”

There'is no evidence in the bill of exceptions tending to show when the seed was planted or sowed, and, this being so, it must be presumed, in view of the judgment, that the crops were not put in until after the tenancy was terminated by the commencement of the suit to foreclose the bond, which was equivalent to a notice to quit: Hill’s Ann. Laws, § 3523. No error haying been committed by the introduction in evidence of the judgment roll, or by giving the instructions complained of, it follows that the judgment is affirmed.

Affirmed. 
      
      Not:e. — In this connection see Security Savings Company v. Mackenzie, 38 Or. at pp. 212-214, and Gray v. Perry, 25 Or. at p. 6. — Reporter. tion prior to the appointment of a receiver at the instance of unpaid mortgagees will take precedence over the mortgage, see St. Louis Trust Co. v. Riley, 30 L. R. A. 456 (70 Fed. 32, 16 C. C. A. 610) and Green v. Coast Line R. R. Co., 33 L. R. A. 803, 54 Am. St. Rep. at pp. 425-429. — Reporter.