Court Opinion

ID: 3838471
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:07:27.952994+00
Date Added: 2024-06-11T09:25:56.805859
License: Public Domain

Argued on the merits March 9 and affirmed March 29, 1938                              ON THE MERITS                              (77 P.2d 824)
Department 2.
This is a suit for the rescission of a contract for the purchase and sale of a building occupied as a service station and lunchroom and of the fixtures and stock of goods therein. The contract was entered into between the plaintiff and the defendant, W.E. Bramel, on or about June 1, 1936, and, in and by its terms, the plaintiff agreed to buy and the defendant to sell said property for the sum of $5,500. The building stands on premises belonging to one Joseph Weber and these premises are located on Macadam Road just north of the west end of the Sellwood bridge in Multnomah county, Oregon.
On May 10, 1928, Weber demised these premises to one Conway for a term of 10 years for an agreed rental during the time involved in this controversy of $15 per month. Shortly after the making of said lease, Conway, with Weber's consent, assigned the lease for the remainder of the term to the defendant Bramel and he erected said building on the premises and, at the time this controversy arose, was occupying the same as a filling station and lunchroom and claimed to be the owner of the building by virtue of some undisclosed agreement with the landlord.
Desiring to sell the property, Bramel, in May, 1936, employed the defendant Wenger, who was doing business as a broker under the trade name of Fidelity Brokerage Company, and authorized him to contract *Page 702 
for the sale of said property for the sum of $5,500 and, upon his finding a purchaser ready and willing to pay said sum, Bramel agreed to pay Wenger the sum of $500 as commission therefor. Under his said employment, Wenger advertised the property for sale and the plaintiff, who resides in Columbia county, went to Wenger's office in Portland and consulted with him in regard to the property. He then visited the property and talked with Bramel and, at that time, was informed by Bramel that he was holding under a lease which then had but 22 months to run. The plaintiff informed Bramel that he was looking for a location for his son, who was then out of employment, to engage in business and that a lease on the premises for 22 months only would not justify the expenditure of so large a sum for the purchase of the property. Whereupon Bramel informed the plaintiff that, if he would purchase the property for $5,500 and pay $3,000 thereof in cash and execute a promissory note for $2,500, bearing interest at 7 per cent per annum, payable in monthly installments of $50 each plus accrued interest, he could and would procure from Weber an extension of the lease for an additional three years upon the same terms as were provided in the original lease. Plaintiff then returned to Wenger's office and entered into an agreement with Wenger that he would pay Wenger $250 in cash and the additional $2,750 upon Bramel's obtaining from Weber an extension of the lease for a period of three years, and it was agreed between them at that time that Wenger would retain all moneys paid him until Bramel secured the extension and, if he failed to do so, would return the money to the plaintiff. With said understanding, the plaintiff paid Wenger said sum of $250. *Page 703 
On June 9, 1936, Wenger wrote a letter to the plaintiff (plaintiff's exhibit 11), in which he stated, among other things, that:
"Mr. Bramel contacted the landlord and received his consent for a three-year extension on the lease at $15.00 per month. * * * He (Weber) also consented for Mr. Bramel to give a sublease to you on the same conditions."
Relying on the statements contained in said letter, the plaintiff paid Wenger the further sum of $2,750, thereby completing the cash payment which he had contracted to make and, on June 26, 1936, plaintiff executed a note payable to the order of Bramel for the sum of $2,500, bearing interest at the rate of 7 per cent per annum, and payable in monthly installments of $50 each plus accrued interest, as he had agreed to do and deposited the same in escrow with the Bank of Sellwood to be held by said bank in escrow and not to be delivered by the bank to Bramel until the promised extension of the lease for the additional three years had been obtained and deposited in said bank.
It appears from the evidence that Weber declined to grant said extension and that he also refused to permit Bramel to assign said lease to the plaintiff or to sublease the premises to the plaintiff. When the plaintiff ascertained those facts, he brought this suit to rescind the contract and to recover back the moneys which he had paid and the note which he had executed and placed in escrow and joined in said suit, for the purpose of enjoining them from paying over the money or delivering the note to Bramel, Wenger, who was in possession of the money, and the Bank of Sellwood, which was in possession of the note, and obtained an order enjoining them from delivering the same to the defendant Bramel. *Page 704 
Upon the trial of the cause, the lease under which the defendant Bramel was occupying the premises on which the building had been erected was offered and produced in evidence and this lease contains the express provision that:
"Said lessee will not, without the written consent of said lessor being first obtained, voluntarily or involuntarily or directly or indirectly assign or mortgage or pledge this lease or any share or interest therein or permit or allow the same to be assigned or transferred by operation of law or otherwise."
From this it will be seen that, upon Weber's refusal to give his written consent to the assignment of the lease, the plaintiff could obtain no legal right to the possession or occupancy of the building for any purpose or for any length of time, which was a material part of his contract. This constituted a failure of consideration in a material respect which entitled the plaintiff to a rescission of the contract.
Under this contract, the plaintiff was to acquire not only the building, the fixtures and the stock of goods but also to acquire for the remainder of the term and for three years thereafter the right to occupy the building for the purpose of transacting therein the business for which it had been erected. Unless the building could be so occupied, it could be of no possible value to the plaintiff and, since the contract was an entire contract and the consideration which the plaintiff was to pay therefor was not apportionable, the consideration failed and entitled the plaintiff to a rescission of the contract and to a return of the moneys paid and of the note given therefor. See 1 Black on Rescission, sec. 158 et seq. Again, as said by the same author in section 208, when performance of a contract by one of the *Page 705 
parties is inherently impossible, or has become impossible in consequence of events occurring after the making of the contract, it is generally the right of the other party to rescind.
From this it follows that, upon Weber's refusal to extend the term of the lease or to permit Bramel to assign the lease for the remainder of the term, as, under the terms of the lease, Weber had a lawful right to do, this constituted such a material breach of the contract upon Bramel's part as to entitle the plaintiff to a rescission of the contract and to a return of the moneys paid and of the note given by him in reliance upon Bramel's promise to perform.
This conforms to the decree entered in the court below. The decree, therefore, is affirmed.
BEAN, C.J., and KELLY and BAILEY, JJ., concur.
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