#### J. B. McLaughlin v. E. Y. Royce, Appellant, and O. M. Barrett.

1 3 Deeds; eight to REPURCHASE. A deed reserved to the grantor the right to repurchase at a certain price within two years. A witness who heard the negotiations testified that it was agreed that if the grantor desired to take the land off the grantee’s hands, at a certain price, within two years, the latter would redeed it to him. The grantor testified that he reserved the right to repurchase by paying the sum named in the deed, “which was only given for securing the same as a mortgage." The grantee testified that he was to deed the land back within two years “if he still owned it." *Held,*that the evidence did not sustain the grantor’s contention that the deed was a mortgage. Besides, as the arrangement to reconvey created nothing but an option to repurchase, the grantor made no debt for a mortgage to secure.

3 Demand. Where a deed provided that the grantor might repurchase of the “grantee or his assigns” within a certain time, a'demand and tender by the grantor to the grantee, with' knowledge of the sale of the land by the latter to a third person, are not sufficient; they should be made to the assignee.

*2554 TENDER. A grantor was entitled to a reconveyance on payment of $1,500, but, before tender, the land was sold to third person, who assumed a mortgage of $600. *Held,*that the latter was not obliged to accept a tender of $1,000.

5 Breach of Covenant: assuming mortgage. Where the seller of land covenants against encumbrances, the covenant is breached and damage shown if a mortgage exists even though the buyer sells again and the last grantee assumes such mortgage.-

*Appeal from O’Brien District Court.*— HoN. Scott M. Ladd, Judge.

Tuesday, May 9, 1899.

ActioN in equity to quiet the title in the plaintiff to certain land described, as against the defendant E. Y. Noyce, upon hearing on the issues joined, judgment' and decree were rendered against' the defendant E. Y. Noyce, from which he *appeals.*

— Affirmed.

*Boies & Both*for appellant

*B. C. Herrick*for appellees.

Given, J.

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      *255— I. Appellant being the owner of the land in question, did, on the seventeenth day of July, 1888, in pursuance of an agreement for an exchange of properties, convey the same to defendant O. M. Barrett by deed containing the usual covenants that the land was free of aJl incumbrances, and for the recited consideration of one thousand five hundred dollars. This deed, after describing the land, contains the following: “Sold subject to the lease of 1888, which inures to grantor, except that the grantor or his heirs or assigns, has the right at any time within two years, by the payment of fifteen hundred dollars cash, or one-fourth cash and balance in five equal payments, at eight per cent., to repurchase this tract of land of the grantee, or his heirs or assigns.” Defendant Barrett conveyed the lots in Sheldon given in exchange for this land, to the appellant, and he took possession thereof. On the twenty-fourth day ’ of *256November, 1888, Barrett conveyed the land to the plaintiff for the consideration of one thousand dollars, subject, to a mortgage of six hundred dollars that plaintiff assumed, which mortgage had been put upon the land by appellant when he owned it. ■ Plaintiff went into possession of the land, made lasting and valuable improvements thereon, paid taxes and interest on said mortgage debt. Appellant alleges and contends that, at the time he executed said deed to Barrett, it was orally agreed, in addition to what is recited therein, that said deed “should be and operate as a mortgage upon said premises for the security of the payment of said sum of money.” lie further alleges that on the fifteenth, and again on the sixteenth, day of July, 1890, he tendered one thousand five hundred dollars in money to O. 1VÍ. Barrett, and demanded a reconveyance of said land, which he refused to make. He prays that said deed be decreed to be a mortgage, that it be foreclosed, and that he have a reasonable time in which to redeem therefrom, or, if said deed is not decreed to be a mortgage, that a decree be entered that, upon payment of one thousand five hundred dollars into court, said land be reconveyed to him. Appellees deny that it was agreed that said deed should operate as a mortgage, deny that appellant tendered one thousand five hundred dollars, as alleged, and deny that he is entitled to a reconveyance upon the payment of one thousand five hundred dollars; and herein we have the first issues to be considered.

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      *256II. As to the alleged oral agreement, it appears that, after negotiating for several days, it was agreed that Barrett would convey to Royce certain lots in Sheldon, in consideration of which Royce would deliver to Barrett ceifiain personal property, and a conveyance of the land in question free of incumbrances. The personal property was delivered, and the conveyance made, as already stated. S. A. Calvert, who heard the negotiations, says: “It was agreed that, at any time within the next two years, if Royce desired to take the land off jSarrett’s hands at one thousand five hundred dollars, *257be (Barrett) would re-deed tbe laud to him (Boyce), and thereupon the trade was consummated.” Boyce testifies: “I decidedly reserved the right of repurchasing by paying Mr. Barrett one thousand five hundred dollars, — agreed to the conditions named in the deed, which was only given for securing the same as a mortgage.” Barrett testifies: “Mr. Boyce and I were trying to make a trade. He said he wouldn’t take my Sheldon lote unless he could trade me land for them. I asked him two thousand dollars for the lots. He offered to take the lots at two thousand dollars, if I would take the land in question at one thousand six hundred dollars. I offered one thousand five hundred dollars for the land. I finally told him that I would not take the land at one thousand six hundred dollars, but I would take it at one thousand five hundred dollars, and that, if I still owned the land, that 1 would sell it back to him any time within two years; and he finally said that he would do that, and that he would accept the offer.” These witnesses do not materially differ as to what the agreement was, except that Barrett says he was to sell it back “if I still owned the land;” but he does not plead such a condition, nor does the preponderance of the evidence sustain it. Brom the recital in the deed quoted above, and this evidence, it is clear that Mr. Boyce had an option to repurchase the land within the time and on the terms specified in the deed. Such an agreement did not create any indebtedness from Boyce to Barrett to be secured. No indebtedness could arise until Boyce exercised his choice to repurchase. There is no evidence to sustain the claim that it was agreed that the deed was to operate as a mortgage, and the terms of agreement preclude such'an understanding.

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      *257III. The agreement, as recited in the deed, was that Boyce, or his heirs or assigns, had the right, at any time within two years, by the payment of one thousand five hundred dollars cash, or one-fourth cash and the balance in five equal payments at eight per cent., “to repurchase this tract of *258•land of'tbe grantee or bis beirs or assigns.” There was no obligation on tbe part of Royce, bis beirs or assigns, to take tbe land. It was a mere option, tbat could not be enforced. Mr. Royce alleges, as showing an election on bis part to take tbe land, tbat, in compliance with tbe agreement, be within two years tendered one thousand five hundred dollars in cash to Barrett, and demanded a reconveyance of tbe land. Appellant knew at and long before tbe date of tbe alleged tender that Barrett bad conveyed tbe land to plaintiff. Tbat deed was filed for record November 24, 1888. Tbe agreement was that Mr. Royce, bis beirs or assigns, might purchase “of tbe grantee, bis beirs or assigns.” Barrett having conveyed tbe land to tbe plaintiff, tbe right to repurchase was from him, not from Barrett. There was nothing in tbe contract to prevent Barrett from conveying to another, subject to tbe option. Tbe deed expressly provides for tbat, in giving appellant tbe option to repurchase from Mr. Barrett, “or bis beirs or assigns.” Appellant does not allege tbat be ever made any tender of money to tbe plaintiff, and demanded of him a conveyance of tbe land. Though not alleged, evidence seems to have been fully taken on tbat subject, and also as to tbe alleged tender to Barrett, Mr. Royce says: “I went with my son, R. B. Royce, to Barrett, with one thousand five hundred dollars; and be tendered tbe money to Mr. Barrett, and made a written demand, and retained a copy of tbe written demand, demanding a deed of Mr. Barrett. Mr. Barrett said be was powerless, as far as making a deed was concerned, and said, ‘See Mr. McLaughlin about that.’ I asked Mr. Barrett bow much I should pay Mr. McLaughlin; and be said if Mr. McLaughlin bad not paid tbe mortgage, be would be entitled to one thousand dollars.” Mr. R. B. Royce identifies a written notice, dated July 15, 1890, from appellant to Barrett, demanding a reconveyance of tbe land on compliance therewith, and offering therewith to pay one thousand five hundred dollars in cash, or on tbe terms named in tbe deed, if preferred. He says tbat on tbe day of its date *259be read said notice to Mr. Barrett, and that: “In making the tender, I informed bim that I bad one thousand five hundred dollars, to pay bim, with me, and-said Barrett refused to execute a deel of the same; and on the 16th day of July, 1890, I took a warranty deed to bim, and requested bim to execute the same, and told bim I bad the money; and be still refused to execute a deed, and said that McLaughlin was the one to make deeds.” While Mr. Boyce had the money, and displayed it, it was not counted, because Barrett refused to receive it and make a deed, but properly referred Mr. Boyce and bis son to the plaintiff. If it might be said that this was sufficient tender in form, it was not made to the proper person. The land having been conveyed to plaintiff, and appellant knowing that fact, the tender should, under the terms of the deed, have been made to the plaintiff. The two years dated from July 17, 1888, and there is no evidence of any offer to the plaintiff until the eighteenth day of July, 1890. F. B. Boyce testifies that on that day he tendered plaintiff one thousand dollars, and that his father demanded a quitclaim deed, and that plaintiff said he wanted the land, and had a bond to secure him on his deed from Barrett. Plaintiff testifies: “Boyce came to me and said that he had a thousand dollars to pay me for the place. I told him I wouldn’t take it. This was all on the eighteenth day of July, 1890. A few days after, he met me, and we talked again about the thousand dollar offer; and I offered then to take the thousand dollars, and he then said he would have to see Barrett. This was in the presence of Frank Frisbee. After he said he would see Barrett, he turned from us and went 4 away, and never afterwards mentioned the matter to me.” There is no evidence that a tender of any other sum than one thousand dollars was ever made to the plaintiff, and it is evident that appellant was not willing to pay that sum without seeing Barrett. In view of plaintiff’s liability assumed in his deed, to pay the mortgage on the land, he was certainly not obliged to accept a tender of one thousand *260dollars, even if it bad been made in time. The cross bill of appellant was properly dismissed.

5 IY. The defendant Barrett, by cross bill, asks to recover damages against appellant, Noyce, for a breach of the-covenants in his deed against incumbrances, because of his failure to pay said six hundred dollar mortgage. Judgment was rendered in favor of Barrett against Noyce-for eight hundred and twenty-six dollars, with six per cent, interest from date of judgment. The covenant in the-deed from Noyce to Barrett is that the land was “free and clear of all liens and incumbrances whatsoever,” while tke-fact is that it was incumbered by said six hundred dollar-mortgage which Noyce had placed upon it, and which he has failed to pay. Plaintiff assumed said mortgage as part of' the consideration to Barrett for his deed. The covenant, the-breach, and the damage appear beyond dispute. The judgment and decree of the district court are correct, and they are aebiemed.

Ladd, L, took no part.