Case Name: W. E. Foltz et al., Respondents, v. W. A. Manson, Appellant
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1931-10-31
Citations: 164 Wash. 692
Docket Number: No. 23073
Parties: W. E. Foltz et al., Respondents, v. W. A. Manson, Appellant.
Judges: 
Reporter: Washington Reports
Volume: 164
Pages: 692–711

Head Matter:
[No. 23073.
En Banc.
October 31, 1931.]
W. E. Foltz et al., Respondents, v. W. A. Manson, Appellant.
B. M. Smith, for appellant.
A. H. Denman, for respondents.
Uteported in 4 P. (2d) 509.

Opinion:
Parker, J.
On April 14, 1923, the plaintiffs, Foltz and wife, entered into a contract with the defendant, Manson, for the sale by them to him of lot 8 in block 5 of Cavender and Wallace's Addition to Fern Hill, in Pierce county, for the agreed purchase price of two thousand dollars. Manson then entered into the actual, physical possession of the lot and then paid two hundred dollars on the agreed purchase price, it being agreed that the balance thereof be paid by him in monthly installments of twenty-five dollars each, and that Foltz and wife should have, at their election, the right to forfeiture of all rights of Manson under the contract upon his default in making the payments or any of them. In June, 1930, Foltz and wife, claiming Manson to be in default in making payments as agreed, commenced this action in the superior court for Pierce county praying for relief as follows:
"Wherefore plaintiffs pray for judgment against defendant
"1st. To determine the amounts due from defendant to plaintiffs pursuant to said contract;
"2nd. That defendant be required to pay the amount so found due to plaintiffs, and in default thereof, said agreement and all claims of the defendant thereunder he forfeited, cancelled and held for naught and plaintiffs be awarded immediate possession of said real estate."
Manson's defense is wholly affirmative, and consists of his claim that he has been compelled to incur expense in defending an action commenced and unsuccessfully prosecuted against him in the superior court for Pierce county by one Doyle seeking recovery from him of land three feet in width adjudged by the court to be a part of lot 8, which was claimed by Doyle to be a part of lot 9 adjoining lot 8 upon the south; and that he is therefore entitled to have the amount of the expense so incurred by him credited upon the unpaid installments due upon the contract; which amount, if so credited, he claims, would save his rights under the contract from forfeiture.
The cause proceeded to trial in the superior court sitting without a jury, resulting in the court, on November 1, 1930, making findings of fact upon which judgment was rendered, so far as need be here noticed, as follows:
"It is Accordingly Ordered, Adjudged and Decreed that there is due and owing to the plaintiffs from the defendant to October 20, 1930, upon the agreement set forth in plaintiffs' complaint the sum of four hundred dollars, and that defendant make payment thereof to plaintiffs or to the clerk of this court for the plaintiffs on or before the first day of December, 1930.
"It is Further Adjudged and Decreed that in the event of the failure of defendant to make such payment within said time that said agreement be null and void, and all rights of the defendant therein, or derived from said agreement, shall cease and determine, and the premises described in said agreement and hereinafter described shall revert to and revest in plaintiffs as absolutely and perfectly as if said agreement had never been made."
From this disposition of the canse in the superior court, Manson has appealed to this court.
The evidence has not been brought here by certified statement of facts, so we must presume that the facts as stated in the court's findings are supported by the evidence. Omitting the usual formal recitals, we quote the whole of the findings:
"(1) That plaintiffs as vendors, and defendant as purchaser of the real estate in Pierce county, state of Washington, described as lot eight in block five according to the plat of 'Cavender and Wallace's Addition to Fern Hill,' recorded in the office of the auditor of said county, entered into an agreement in writing, bearing date April 14, 1923, whereby the said purchaser agreed to pay said vendors the sum of two thousand dollars and interest thereon at the rate of seven per cent per annum in consideration of the conveyance of said real estate to defendant by deed containing the usual covenants of warranty, upon said payment being fully made.
"(2) That said agreement provided that the purchaser should make an initial payment of two hundred dollars and make payment of the remainder in amounts of not less than twenty-five dollars on or before the twentieth day of each month commencing with May, 1923, and continue the same until remaining principal and interest were fully paid.
" (3) That defendant has made said initial payment and all monthly payments required by the terms of said agreement to and including the payment of June, 1929, but has wholly failed to make the payment of twenty-five dollars that came due July 20, 1929, and failed to make any of the payments subsequent thereto required by the terms of said agreement.
"(4) That the amount due to plaintiffs from defendant and unpaid on said agreement, to and including the payment required for October 20, 1930, is the sum of four hundred dollars.
"(1%) That said agreement provides that if the purchaser make default in any of the covenants therein contained or fail to make the payments aforesaid, or any of them, punctually and upon the strict terms without any failure or default, the times of payment being declared to be the essence of said agreement, then the vendors shall have the right to declare said agreement null and void, and in such case, all the rights and interests thereby created or then existing in favor of the purchaser or derived under said agreement, shall utterly cease and determine, and the premises aforesaid shall revert to and revest in the vendors without any declaration of forfeiture, or act of re-entry, or without any other act by the vendors to be performed, and without any right of the purchaser to reclamation or compensation for money paid or improvements made, as absolutely, fully and perfectly as if said agreement had never been made.
"(5) That plaintiffs by their attorney on May 28, 1930, mailed to defendant a written notice requiring him within a reasonable time, to-wit, on or before June 10, 1930, to pay the sum of two hundred and seventy-five dollars that was then due by the terms of said agreement or that said agreement would then be deemed forfeited and void; that defendant has wholly failed to make any of the payments overdue since June 26, 1929.
"(6) That defendant went into possession of said real estate on or about April 14, 1923, and has had ever since the use and occupation thereof, for more than five years wholly unquestioned and undisturbed; that defendant has ever since maintained his occupancy of the entire premises and has never been dispossessed of any part thereof, and continues to hold the same and every part thereof as delivered to him by plaintiffs.
"(7) That in the month of June, 1928, more than five years after defendant had occupied said real estate, one Joseph Doyle, claiming to own land abutting on the south boundary line of said lot eight, claimed that defendant's occupancy included a strip three feet wide and formed part of Doyle's property; that said Doyle brought action in this court to recover such three feet strip; that plaintiffs were not made parties to such action, and the plaintiff Linnie M. Foltz refused to defend the same and left the defense thereof to the defendant.
" (8) That defendant prevailed in the action brought by said Doyle, and this court on June 8,1929, rendered judgment therein providing that said strip was a part of said lot eight, and that the defendant William A. Manson had the right of possession and occupancy of the same as a part of the real estate he was purchasing from the plaintiffs pursuant to said agreement.
"(9) That the costs and expenses incurred by defendant in so defending the possession which plaintiffs had given him were not caused by any defect in the title which the vendors agreed to convey, and defendant has not been occasioned any loss by the assertion of any lawful claims made against plaintiffs."
By the terms of the contract, a concededly correct copy thereof being attached to the complaint, Foltz and wife agree that, upon full payment of the purchase price by Manson, they will execute a deed conveying to him "said premises in fee simple, with the usual covenants of warranty."
If it be a fact, as found by the trial court, as we must assume it to be in the absence of a statement of facts bringing the evidence here, that it was adjudged, in the action which was unsuccessfully prosecuted by Doyle against Manson, that the strip there in question is a part of lot 8 under contract of sale from Foltz and wife to Manson, then it seems plain that Doyle was not lawfully claiming that strip off the southerly part of lot 8. We have noticed that conveyance by Foltz and wife, to be given to Manson upon payment of the whole of the contract purchase price, was to be "with usual covenants of warranty." This, we think, means those covenants recited in Bern. Ooinp. Stat., § 10552, which section reads as follows:
"Warranty deeds for the conveyance of land may be substantially in the following form:
"The grantor (here insert the name or names and place of residence), for and in consideration of (here insert consideration), in hand paid, convey and warrant to (here insert the grantee's name or names) the following described real estate (here insert description), situate in the county of.........................................., state of "Washington.
"Dated this.................................day of......................................., 18.......... .(Seal).
"Every deed in substance in the above form, when otherwise duly executed, shall be deemed and held a conveyance in fee simple to the grantee, his heirs and assigns, with covenants on the part of the grantee:
"(1) That at the time of the making and delivery of such deed he was lawfully seised of an indefeasible estate in fee simple in and to the premises therein described, and had good right and full power to convey the same;
"(2) That the same were then free from all encumbrances; and
" (3) That he warrants to the grantee, his heirs and assigns, the quiet and peaceable possession of such premises, and will defend the title thereto against all persons who may lawfully claim the same; and such covenants shall be obligatory upon any grantor, his heirs and personal representatives, as fully and with like effect as if written at full length in such deed."
We think there is none of these covenants here in question other than the covenant to "defend the title thereto [to lot 8] against all persons who may lawfully claim the same." In Hoffman v. Dickson, 65 Wash. 556, 118 Pac. 737, Ann. Cas. 1913B 869, 39 L. R. A. (N. S.) 67, wherein an alleged breach of a covenant of substantially this same import was drawn in question, we said:
"We have seen that the defendants only agreed to warrant and defend the title ' against all lawful claims. ' We have also seen that the claim of lien, made against the plaintiffs in the suit in which they incurred these expenses, was not a lawful claim against the plaintiffs' title. Under such circumstances, the rule seems to be well settled that no recovery can be had against the grantor upon his covenant of warranty. Indeed,, it seems inconceivable that the nnsnccessfnl assertion of an unlawful claim should constitute a breach of a covenant of warranty to defend against lawful claims. We find in the case of Smith v. Parsons, 33 W. Va. 644, 11 S. E. 68, remarks of the court peculiarly applicable to this state of facts, as follows:
" 'It is true that Smith, in his sale to Parsons, stipulated for a conveyance with general warranty, but the ejectment resulted in favor of the title sold by Smith, and showed that it was the paramount title. A covenant of general warranty is not broken until there is an eviction under a paramount title, or what is equivalent. Rex v. Creel, 22 W. Va. 373; 2 Minor, Inst. 643; 2 Lomax, Dig. 355; 2 Rob. Pr. (New) 87; 2 Suth. Dam. 279; Rawle, Cov. Secs. 127, 131; Yancey v. Lewis, 4 Hen. & M. 390. Why then should Smith pay costs expended in defending this action? He sold a good and valid title, as shown by the result of the action of ejectment, and did no wrong in so doing, and by no reasonable view can it be claimed that he was to stand good for expenses in defense of assaults by inferior title. He did not warrant that no one should ever sue Parsons for the land, or in any manner bind himself to refund expenses incurred in defending the land against any one who might think he had a valid claim to the land, and bring a suit for it. Had Parsons lost the land, then Smith, upon his covenant, would have been bound for the land lost, and costs expended in ah unsuccessful defense of the title. Threlkeld v. Fitzhugh, 2 Leigh 451; 2 Suth. Dam. 302; Rawle, Cov. Sec. 197. But the covenantee is clearly not entitled to demand of the covenantor expenses in defending a suit which sustains the title as valid, for the covenant does not bind for any outlays necessitated by the simple existence or assertion of an adverse claim. The covenant does not protect against any but lawful claims, which negative the title that the deed purports to convey.'
"See, also, Norton v. Schmucker, 83 Tex. 212, 18 S. W. 720; West v. Masson, 67 Cal. 169, 7 Pac. 452; Ritt-master v. Richner, 14 Colo. App. 361, 60 Pac. 189. No decisions have come to our attention holding contrary to this view, and we think there are none such. ' '
Our later decision in Stanley v. Parsons, 156 Wash. 217, 286 Pac. 654, may seem somewhat out of harmony with our decision in Hoffman v. Dickson; but that decision involved an element of fraud wholly absent from our present inquiry. Here, there is not shown to have been any misrepresentation or fraud of any nature on the part of Foltz and wife, or even that Doyle made any claim to any portion of lot 8 until some five years after they had contracted with Manson for the sale of it to him and placed him in possession thereof.
We are of the opinion that the unlawful claim made by Doyle to a portion of lot 8 was not such a claim or threat against the title to the lot or to Manson's possession thereof as Foltz and wife were obligated to defend; and that therefore they are not liable to Manson for expense incurred by him in his defense of the action unsuccessfully prosecuted against him by Doyle. See note in 61 A. L. E. 169.
It is contended in behalf of Manson that the trial court erred in overruling his demurrer to the complaint, in that it improperly joined two causes of action. The argument seems to proceed upon the theory that the complaint sets up two inconsistent causes of action. The complaint, it may be conceded, states facts which would entitle Foltz and wife to recover the matured, unpaid installments of the contract, and also states facts which would entitle Foltz and wife to have the rights of Manson under the contract forfeited. But, reading the allegations of the complaint in their manifest intended relation to each other and in connection with the alternative prayer for relief, it is manifest that Foltz and wife did not thereby seek recovery of the matured installments and forfeiture of Manson's contract rights except in the alternative, leaving to Manson, in the event judgment be rendered against him, the right of election as to whether he shall pay the amount due upon the unpaid matured installments or default therein and suffer forfeiture of Ms contract rig'hts. It seems plain to us that the complaint is not defective to the prejudice of Manson in this respect.
It is contended in behalf of Manson that he successfully defended the action prosecuted against him by Doyle, upon the ground that the title to the three-foot strip claimed by Manson was in Foltz and wife by virtue of their and his adverse possession thereof for a period of more than ten years, and that therefore they did not have an unclouded record title to the three-foot strip in question. It does appear by the original formal pleadings in this action that Doyle prosecuted his action against Manson claiming the three-foot strip to be a part of lot 9 adjoining lot 8 on the south; and that Manson defended that action claiming that Foltz and wife, by their and his possession of the strip for more than ten years, had title thereto by adverse possession. However, the facts so appearing in the formal pleadings do not negative the finding No. 8, above quoted, made in this action, that it was adjudged in that action that the three-foot strip in question is in fact "a part of lot 8."
We must now presume that that question, as well as that of adverse possession, became, by amendment, an issue in the Doyle case under our liberal practice. So it does not here appear that either the actual or the record title of Foltz and wife to lot 8, including the three-foot strip in question, which has been adjudged a part thereof, is in the least defective. Indeed, Doyle made no claim to the three-foot strip other than as a part of lot 9 adjoining lot 8 on the south.
Contention is made in behalf of Manson that the court erred to his prejudice in sustaining a demurrer to his affirmative defense. The only manner in' which we are advised of any snch demurrer being interposed, or of the court's disposition thereof, is a brief observation made by the court in its memorandum decision, which we find among the files but not made a part of the record by statements of facts, evidently rendered following the trial upon the merits of Manson's affirmative defense, and about a week before the making of its findings of fact and rendering judgment thereon on November 1, 1930. The court does in this paper tentatively express the opinion that "the demurrer to the affirmative defense should have been sustained." There is, however, no demurrer before us. Possibly, this refers to an oral demurrer to Manson's affirmative defense interposed and overruled at the time of the trial, of which, however, we have no record, there being no statement of facts here.
However, that opinion of the court, if we are to notice it at all, is only tentative. The whole cause and the proper disposition thereof were still within the breast of the court, until it finally made its findings of fact upon the evidence touching the merits of Manson's affirmative defense, and rendered judgment thereon a week later on November 1, 1930. Quigley v. Barash, 135 Wash. 338, 237 Pac. 732.
We conclude that the judgment must be affirmed. It is so ordered.