Title: Swick v. MUELLER ET UX.
Citation: 193 Or. 668, 238 P.2d 717
Docket Number: N/A
State: Oregon
Issuer: Oregon Supreme Court
Date: December 12, 1951

Reversed with directions December 12, 1951.
Petition for rehearing denied with correction in judgment February 6, 1952.
*670 L.Z. Terrall, of Union, argued the cause and filed a brief for appellants.
E.M. Sabin, of Union, argued the cause for respondent. With him on the brief was Carl G. Helm, Jr., of La Grande.
Before BRAND, Chief Justice, and ROSSMAN, LUSK, LATOURETTE, WARNER and TOOZE, Justices.
REVERSED WITH DIRECTIONS.
LATOURETTE, J.
This is an action for the recovery of real and personal property, and damages for the unlawful withholding thereof at the rate of $13 per day, predicated on the breach of a written contract entered into between plaintiff and defendants. Defendants returned the property to plaintiff on the theory that plaintiff herself had breached the contract. The trial court instructed the jury to return a verdict in favor of plaintiff for the reasonable rental value of the premises for a period of one month, the time during which the *671 defendants occupied the premises after their alleged breach of the contract, whereupon a verdict was rendered for plaintiff in the sum of $103. Defendants appeal.
The basis of the law suit was a contract entered into between the parties wherein defendants, the purchasers, agreed to purchase certain real property for the sum of $11,000, payable as follows:
The contract contained the following provision:
The foundation of plaintiff's complaint may be based on two propositions:
(1) an actual breach, i.e., "The defendants failed *672 and neglected to pay said sums, or any of them on the 30th day of June, 1950, or at any time prior thereto or at all."; and,
(2) an anticipatory breach, i.e., "On the 1st day of July, 1950, the plaintiff, through her agent and attorney called upon the defendants and demanded payments of said mentioned sums of $500 and $100, and $142.50 and the said defendants refused to pay the same or any part thereof, stating that they would not make any more payments called for by said agreement."
As an exhibit to plaintiff's complaint, there was attached thereto the following document:
Defendants' amended answer, among other things, alleged a repudiation of the contract on the part of plaintiff, in which they acquiesced, the answer containing, in part, the following allegations:
Defendants demanded the return of all the moneys which they had paid under the contract, less the reasonable rental value of the property for the period during which defendants were in possession of the same.
1, 2. The court properly took from the jury that there was an actual breach of the contract on the part of the defendants in failing to make the payments under the contract on July 1, 1950, when plaintiff demanded payment of the same at 11 a.m. of said date as, at that time, the 30-day grace period allowed by the contract had not expired. In any event, plaintiff could not object to such ruling since she has not appealed from the same.
At the trial the court instructed the jury as follows:
The court then instructed the jury that the measure of damages to be awarded to the plaintiff would be based on the reasonable rental value of the property occupied by defendants for a period of one month, i.e., from July 1, 1950, to July 30, 1950, inclusive. The jury returned a verdict in favor of plaintiff and against defendants in the sum of $103.
The court based its instructions on defendants' alleged abandonment on the following testimony of defendant, Edward J. Mueller:
*676 Defendants duly excepted to the court's instructions, taking from the jury defendants' counterclaim, and assign as error the giving thereof.
The above-quoted testimony of Mueller, upon which the court based its ruling, would not be conclusive that defendants had anticipatorily breached the contract. The plain language itself does not necessarily sustain such construction nor plaintiffs' allegation "that they would not make any more payments called for by said agreement."
3. When one considers Mueller's testimony in conjunction with plaintiff's declaration of forfeiture, Exhibit "B," wherein it is stated that when they called upon Mueller on June 1, 1950, for payment he stated that he had the money but would take his 30 days of grace to pay the same, it is clear that when Mueller was importuned at 11 a.m. on July 1 to make the payments, he could very well have been talking about making payments at that hour and not otherwise. It was, therefore, a jury question.
4. The general rule is that before a party to an executory contract may be said to have anticipatorily breached the same he must refuse by acts or deeds or perform his obligations under the contract positively, unconditionally, unequivocally, distinctly and absolutely. See Ratcliffe v. Union Oil Co. of Calif., 159 Or 221, 229, 231, 77 P2d 136; Cornely v. Campbell, 95 Or 345, 377, 186 P 563, 187 P 1103; Suburban Improv. Co. v. Scott Lumber Co., 67 F2d 335, 90 ALR 330; 12 Am Jur, Contracts, 972, § 393; Restatement of the Law, Contracts, 475, § 318; 5 Williston, Contracts, (rev ed) 3724, § 1324; 3 Words &amp; Phrases, (perm ed) 527.
As an example of an unequivocal refusal to be bound by the terms of a contract, we quote the following *677 letter from Ratcliffe v. Union Oil Co. of Calif., supra: "`Herewith returned the check sent by your company as June rent of my property, for the reason that you are no longer renting my property.'" Speaking through Mr. Justice LUSK, we said:
5. There is another rule of law applicable to the present case, and that is where one breaches a contract anticipatorily, before it may become an effective breach, the other party must accept and act on the same. In 12 Am Jur, Contracts, 974, § 395, we read:
See Dibble v. Hodes Co., 132 Or 596, 277 P 820, 286 P 554.
6, 7. There is no claim made by plaintiff, either in her pleadings or otherwise, that she accepted or acted *678 on defendants' alleged breach. On the other hand, plaintiff's notice of termination of the contract, "Exhibit B," affirmatively shows that plaintiff terminated the contract not on account of an anticipatory breach but by reason of an alleged actual breach, i.e., defendants' failure to pay the installments not then due. Having terminated the contract on the basis of an actual breach, plaintiff cannot at a later time change her position and base her claim on an anticipatory breach.
In their brief defendants state that:
In other words, defendants wish us to invoke Article VII, § 3 of the Oregon constitution, which, in part, follows:
8. The purpose of the above provisions is to facilitate the disposal of causes on appeal, where proper, and the prevention of costs and disbursements resulting from a second trial. Wright v. Wimberly, 94 Or 1, 184 P 740.
*679 9. We have repeatedly held that where a party bound by an executory contract repudiates his contract before the time for preformance the other party may treat the contract as terminated and maintain an action for the recovery of the moneys paid under such contract, with interest, less the reasonable rental value of the property during the period of occupancy. See Grider v. Turnbow, 162 Or 622, 94 P2d 285; Olson v. Pixler et ux., 138 Or 250, 6 P2d 23; Johnson et al. v. Berns et al., 111 Or 165, 209 P 94, 224 P 624, 225 P 727; Cornely v. Campbell, supra, and cases cited therein.
10, 11. He must act promptly and within a reasonable time, and, "* * * the right of action for such breach is not affected by subsequent nonperformance of the acts which were such conditions precedent." 12 Am Jur, Contracts, 966, § 388. See also 55 Am Jur, Vendor and Purchaser, 948, § 554; 12 Am Jur, Contracts, 1029, § 447.
12. In the present case defendants allege in their answer that they assented to and acquiesced in plaintiff's breach of the contract, and it is admitted that the property involved was restored to the plaintiff within 30 days from the time of plaintiff's declaration of forfeiture. It appears from the record that the contract of sale included both real and personal property, the personal property consisting of a cleaning and pressing establishment. Although no contention was made to the contrary, we hold that under the circumstances of the case 30 days was a reasonable time for defendants to have acted.
We are of the opinion that from the record before us we can determine what judgment should have been entered in the court below.
Since plaintiff breached the contract in the case at *680 bar by terminating the contract at a time when defendants were not in default, defendants are entitled to a return of the moneys paid by them to plaintiff under the contract, with interest, less the rental value of the premises during the period of defendants' occupancy.
13. The amount of money paid in by defendants is admitted. The jury found the rental value of the premises to be $103 for one month. Multiplying this amount by four-and-one-third months, the period of defendants' occupancy of the premises, we arrive at $447, the amount with which plaintiff is entitled to be credited.
Judgment will be entered in favor of defendants against plaintiff for the sum of $1,500, with interest at the rate of six per cent per annum as follows: on $500 from March 20, 1950; on $500 from March 28, 1950; and on $500 from March 29, 1950, less the above credit of $447; together with costs and disbursements.
Reversed with directions.