Opinion ID: 1143134
Heading Depth: 1
Heading Rank: 3

Heading: Phillips v. Johnson distinguished.

Text: It is suggested that because plaintiff's original complaint sought specific performance of the contract not as a cash sale, but as a contract for payments over a period of 10 years and because defendants objected by demurrer to such a performance of the contract, they should not be heard to subsequently object to performance of the contract as a cash sale, as decreed by the trial court and as held proper in Phillips v. Johnson, 266 Or. 544, 514 P.2d 1337 (1973). The contract for the sale of the property involved in Phillips, however, did not involve inconsistent provisions for payment. As in this case, the provisions of that contract for payment over a period of time were so indefinite as not to be subject to enforcement by specific performance. That contract, however, included no provisions for guaranteed cash flow or other provisions by which the seller was assured that he would have minimal taxation on long-term capital gains. On the contrary, that contract specifically provided that the balance due under the contract was payable  on or before  as specified date. We held in Phillips v. Johnson, supra, 266 Or. at 557-60, 514 P.2d 1337, that although the contract provisions permitting payments over a period of time were so indefinite as not to be subject to specific performance, the contract by its terms, conferred upon the purchaser the right to pay the entire balance in cash. On that basis, we held in Phillips that the contract was subject to specific performance as a cash sale. Cf. Howard v. Thomas, 270 Or. 6, 526 P.2d 552 (1974). In this case, however, to subject defendants to the enforcement of this contract as a cash sale would require the specific performance of a contract with inconsistent provisions and would also enforce it in such a manner as to defeat one of the important intended purposes of the contract  a guaranteed cash flow for 10 years, with interest at 7.25 per cent and with minimal taxation on long-term capital gains. On the other hand, to subject defendants to specific performance of this contract as one for payment over a period of 10 years would require this court to rewrite the contract because of its incomplete and indefinite provisions for contract payments, mortgage security and partial acreage release. This the court cannot do for reasons stated in Smith v. Vehrs, supra, 194 Or. at 499, 242 P.2d 586. The fact that defendants opposed enforcement of these incomplete and indefinite provisions is not inconsistent with defendants' opposition to enforcement of the contract as a cash sale. Even if it was, that fact would not empower this court to enforce this contract by specific performance. Neither does the fact that defendants may have changed their minds after signing the contract as prepared by Mr. Midura. For these reasons, the decree of the trial court is reversed.