Court Opinion

ID: 9608942
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:20:03.782637+00
Date Added: 2024-06-11T13:30:25.473917
License: Public Domain

PERRY, C. J.,
dissenting.
I am unable to concur in the result reached in the majority opinion.
I am in full accord with the conclusion that the defendants did not have a right to rely upon the plaintiffs’ apparently wrongful declaration of forfeiture to effect a rescission of the contract after plaintiffs had withdrawn that declaration by filing their suit for a strict foreclosure. The commencement of a suit for a strict foreclosure recognized that defendants still retained an interest in the property and its maintenance would be inconsistent with a claim that there had been a forfeiture of all rights therein.
I cannot, however, agree with the majority conclusion that, after the suit for strict foreclosure was instituted, the plaintiffs did not by their actions assent to a mutual rescission of the contract of purchase.
Within a few days after plaintiffs commenced this suit, the defendants on January 13, 1954, went to the home of the plaintiffs’ Morrison. Plaintiffs’ own version of what occurred is as follows:
“A. I [Morrison] got in the car and set down, and he says, T’m going to turn it back to you.’ He [Handler] says, ‘You broke the contract,’ and I said, ‘How did I break the contract?’ I asked him *510two or three times, and no tell me; he just set there. He says, ‘I want my money. You broke the contract.’ I never said anything about his money or nothing, only I said, ‘Well, Mr. Handler, I hate to see you lose it. I have done everything I can do for you, and I hate to see you lose it.’ He says, ‘You’ll have to take the sheep over in the morning, and I have sold the hay, and I have given a few days’ notice to somebody they could keep it, and there’s no hay.’ I said, ‘Well, is there any hay?’ and he said, ‘Yes, I’ve got two men taking care of it.’ His family had moved, I guess. So we borrowed hay the next night, or made arrangements.”
While it is true the defendants had been sent by their attorney to the home of the plaintiffs’, where this conversation occurred, and they did not know wherein the plaintiffs had breached the contract, whether by the premature declaration of forfeiture previously made, or for some other reason, it is clear they offered to return the property to the plaintiffs and demanded a return of their money. The plaintiffs’ own account of this meeting discloses only an offer to rescind, accompanied by a tender of the property which was the subject of the contract, and a demand to be placed in statu quo. The plaintiffs on the following day went into possession of the property. While in possession of the property they lambed the ewes, sold and disposed of the lamb crop, sold the ewes, a portion of the farm machinery, and changed the operation of the farm by changing fences and operating cattle thereon.
It is immaterial whether the defendants at the time they made the offer to rescind had a legal right to do so or not, if in fact a rescission was effected. “If either party, without right, claims to rescind the contract, the other party need not object, and if he permits it to be rescinded, it will be done by mutual consent.” *511Woodard v. Willamette Val. Irr. Etc. Co., 89 Or 10, 15, 173 P 262; 17 CJS 881, Contracts § 389.
Therefore, after the offer to rescind was made by the defendants, it is necessary to determine the legal rights of each of the parties.
There can be no question but that the plaintiffs had an election of rights. Even though the defendants had no legal right at that time to rescind, the plaintiffs were required to reject that offer or acquiesce therein. If plaintiffs rejected the offer, and the defendants left the property which was the subject of the contract, they could enter therein as keepers. If plaintiffs elected to accept the offer, then the contract was at an end and their full ownership of the property confirmed.
The defendants, in order to keep their tender of rescission intact, could either depart from the premises, as they did, or return thereto and operate the premises as keepers. Schuler et ux. v. Humphrey et ux., 198 Or 458, 257 P2d 865, 27 ALR2d 14.
We are, therefore, concerned with what was done by the parties in view of their legal rights.
It must be kept in mind that throughout these proceedings the plaintiffs have maintained they have a right to a strict foreclosure of the contract, thus maintaining that defendants have an interest in the property until terminated by legal proceedings. Such relief was granted by the trial court, and could only have been granted on the basis that defendants had breached their contract.
I believe the majority fall into error when they say:
“We must next consider whether the conduct of plaintiffs after they resumed possession of the property effected any change in the rights of the parties. We believe it did not. In the first place, *512there is no evidence that plaintiffs, after they resumed possession of the property, took any action which would prevent them from fully performing the contract. No evidence was offered to prove or attempt to prove to what extent, if any, defendants would be damaged or even seriously inconvenienced by any action taken by plaintiffs in connection with the real and personal property.” (Italics mine)
The issue is not, did plaintiffs do some act that would prevent them from being able to fully perform or which in some way would damage or inconvenience the defendants if foreclosure was denied by the court? Such conclusions would be immaterial to the true issue except as the acts from which the conclusions may be drawn disclose an election to accept the offer of rescission.
The true issue is, did they by their actions elect to consent to defendants’ offer of rescission?
Assent to rescission may be accomplished by acts as well as words. Woodard v. Willamette Val. Irr. Etc., Co., supra.
Mr. Justice Holmes, speaking for the Court in Wm. W. Bierce L’D v. Hutchins, 205 US 340, 346, 27 S Ct 524, 51 L Ed 828, said:
“Election is simply what its name imports: a choice, shown by an overt act, between two inconsistent rights, either of which may be asserted at the will of the chooser alone.”
It seems to me that an election to treat property as one’s own is established by overt acts whenever it appears a seller, having only the equitable title to the property, and although having rights of a keeper, exercises control over the property inconsistent with the ownership of the purchaser. Montgomery v. Heider, 147 Or 523, 34 P2d 657; Bodding v. Staehli et al., 146 *513Or 370, 30 P2d 3; Gray v. Mitchell, 145 Or 519, 28 P2d 631; Kellogg v. Smith, 70 Or 449, 142 P 330, and cases cited infra.
Under the facts of this case, I would think there could be no argument but that the plaintiffs could lawfully re-enter upon the premises, but this right would extend no further than the rights of a keeper or conservator. That this is the established law of this state there can be no question. This rule is clearly set forth by this court in Kellogg v. Smith, supra, and again re-affirmed in Schuler et ux. v. Humphrey et ux., supra. While the former case deals with acquiescence in a judgment, the rule of law relative to consent or acquiescence which results in an election is the same. Lewis et ux. v. Shook et ux., 182 Or 483, 188 P2d 148.
In the Kellogg case, Kellogg had brought a suit to cancel a deed to real property, a promissory note, and a chattel mortgage, due to the fraud of the vendor, Smith. The trial court cancelled the contract, returning Smith to the ownership of certain personal property and equipment used in the operation of a “wet-wash” laundry. Smith appealed. While the appeal was pending, Smith leased the building, machinery and equipment to a Mr. Perkins. This court dismissed the appeal for the reason that Smith had elected to acquiesce in the judgment. We said, p. 456:
“It must be conceded that it was the right and duty of the defendant to protect and preserve the property described in the chattel mortgage, and, if his possession of the machinery, equipments, etc., had been limited to such care, the motion to dismiss the appeal would necessarily be denied. It appears, however, that his management of, and control over, such property extended far beyond its mere protection.”
*514To the same effect is the case of Fluhrer v. Bramel, 158 Or 694, 72 P2d 47, 73 P2d 265, 77 P2d 824. In this ease a suit was commenced to rescind a contract involving the purchase and sale of a service station. The trial court granted rescission and Bramel, the defendant, was decreed to again be the owner of the filling station. Bramel appealed. While this appeal was pending, the court, believing Bramel had leased the property for $35 per month for the purpose of obtaining money to maintain the property pending the outcome of the litigation, dismissed the appeal on the ground that Bramel had elected to acquiesce in the judgment entered by the trial court.
In Gray v. Mitchell, 145 Or 519, 28 P2d 631, the vendees, unable to make payment on the contract, executed a $500 note, payable to vendor. Also, being unable to pay this $500, vendees advised vendor of their intention to abandon the contract, and tendered the key to the premises to vendor who re-entered the land in question. Suit was brought to enforce payment of the $500 note. The court held that when the vendees declared their intention to “abandon the contract” and vacated, it was incumbent upon the vendor either to affirm or disaffirm the contract; that vendor’s reentry upon the land effected a forfeiture of the contract; that when the vendor exercised dominion and ownership over the property, such conduct was a concurrence in the “rescission of the contract.” See, also, Bodding v. Staehli et al., supra.
As previously pointed out, the plaintiffs in this case on going into possession, after the offer to rescind had been made, sold the farm flock of ewes, some of the machinery, changed the fences to care for cattle which they were going to and did run upon the premises. All of these acts of the plaintiffs’ occurred *515before tbe rights of the defendants’ were determined or extinguished by any decree of the trial court, and at a time that the plaintiffs were admitting the defendants were the owners of the property.
To me it appears clear that such actions as a sale of a portion of the corpus of the security and changing the operation of the property solely for the benefit of the plaintiffs could be done under no other theory than that the contract had been terminated and they were the owners thereof.
The plaintiffs by their overt acts in exceeding their authority as conservators or keepers for security purposes, and acting for their own benefit, did elect to accept the offer of the defendants to rescind. I would, therefore, reverse the judgment of the trial court and direct a judgment of mutual rescission, placing the parties in statu quo.
Mr. Justice Sloan joins in this dissent.