Court Opinion

ID: 6905759
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:00:03.465922+00
Date Added: 2024-06-11T16:06:20.488643
License: Public Domain

Former opinion modified and rehearing denied May 29, 1917.
On Petition for Rehearing.
(164 Pae. 370; 164 Pae. 372.)
On petition for rehearing. Former opinion modified by dismissal without prejudice. Respondent to recover costs in the Circuit Court and the appellant the costs in this court.
Mr. M. Vernon Parsons and Messrs. Thompson & Hardy, for the petition.
Messrs. Williams & Bean, Mr. Jesse G. Wells and Messrs. Foster & Hamilton, contra.
*383Department 2.
Mr. Justice McCamant
delivered the opinion of the court.
6-8. Defendants have filed a petition for a rehearing and we have re-examined the questions raised by this appeal. There can be no doubt of the correctness of the former opinion in so far as it denies defendants the right to rescind the contract and recover their payments thereon because of the defects in plaintiff’s title. The defendants are entitled to certain credits on the purchase price, including $500 as the value of a -homestead relinquishment, but after all credits are allowed they were still in default on the payment of interest when the suit was brought. This of itself precludes granting them the affirmative relief prayed for: Eames v. Der Germania Turnverein, 8 Ill. App. 663, 673, 674; Ketchum v. Evertson, 13 Johns. (N. Y.) 359, 365 (7 Am. Dec. 384); Hudson v. Swift, 20 Johns. (N. Y.) 24; Green v. Green, 9 Cow. (N. Y.) 46, 52. In order to put the vendor in default and claim a rescission of the contract the vendee must be ready to pay the entire purchase price, must offer so to do and demand a deed: Eames v. Der Germania Turnverein, 8 Ill. App. 663, 673, 674; Foster v. Jared, 12 Ill. 451, 454; Hudson v. Swift, 20 Johns. (N. Y.) 24. When, as in this case, the purchase price is payable at a time long subsequent to the date of the contract, a defect in the vendor’s title does not call for a rescission of the contract, provided the sale is made in good faith and the vendor has not put it out of his power to perform the contract by some affirmative act, as a conveyance of the property to a third party. It is sufficient that he have title when the vendee has a right to a deed: Thomas J. Baird Investment Co. v. Harris, 209 Fed. 291, 297, (126 C. C. A. 217); Winkler v. Jerrue, 20 Cal. App. 555, 559 (129 Pac. 804); Morris v. Columbia Canal Co., 75 Wash. *384483, 486 (135 Pac. 238); Reard v. Ephrata Orchard Homes Co., 78 Wash. 180, 187 (138 Pac. 678); Golden Valley Land & Cattle Co. v. Johnstone, 25 N. D. 148, 160 (141 N. W. 76); Foster v. Jared, 12 Ill. 451, 454, 455; Eames v. Der Germania Turnverein, 8 Ill. App. 663, 672; Tanzer v. Bankers’ Land & Mtg. Corp., 159 App. Div. 351, 144 N. Y. Supp. 613, 615; 39 Cyc. 1529. In the opinion of the writer the above rule is of doubtful wisdom as applied to the conditions under which real estate is marketed in Oregon, but it is a firmly established principle of the law of contracts and if it is to be departed from in this jurisdiction, the departure should be based on legislative action.
9. The principle as laid down in the books has its limitations; it is held that when the vendor calls on the vendee to perform his part of the contract the vendor must be able to pass title: Eggers v. Busch, 54 Ill. App. 279, 284. We think that the case at bar falls within the operation of this principle. Plaintiff seeks a strict foreclosure; he asks a decree requiring defendants within a limited time to pay the large sum of money still unpaid on the purchase price and in default of such payment, to lose their interest in the property. It is only just to require plaintiff in such case to be able to furnish a good commercial title; the defendants may desire to borrow a part of the purchase price on the security of the land and they should be given a title adequate for such purpose. It is held that a vendor is not entitled to a forfeiture of the interest of the vendee unless he is in a position to furnish such a title as the contract calls for: Bryson v. Crawford, 68 Ill. 362, 365. This principle is held inapplicable when the only defect of title is an encumbrance of such size that it can be liquidated by the purchase price: Reard v. Ephrata Orchard Homes Co., 78 Wash. 180 (138 Pac, *385678); True v. Northern Pacific R. Co., 126 Minn. 72, 77 (147 N. W. 948). In the opinion of the writer this exception to the rule should be further limited to cases where the purchase price has been set apart or appropriated to the payment of the encumbrance. Our holding that a vendor should be denied the remedy of foreclosure unless he is able to furnish such title as the contract calls for is supported by 39 Cyc. 1534 and McKinney v. Jones, 55 Wis. 39, 50 (11 N. W. 606, 12 N. W. 381).
The record sufficiently shows that plaintiff at this time does not have a good commercial title. It appears that he has brought suit to quiet his title and that this suit is contested. We forbear to express any opinion as to the merits of this litigation except in so far as the decision of this cause requires such expression. It is sufficient to say that the title of plaintiff is not such as an attorney for a purchaser should advise his client to accept, and that therefore it is not such as is called for by the contract of these parties.
10. Defendants contend that they are entitled to rescind because plaintiff failed to furnish an abstract of title and we are cited to a number of authorities in support of this contention. These were all cases in which the furnishing of such abstract was made a condition precedent by the contract of sale. The contract in the case at bar makes no mention of an abstract. Defendants contend that it should be reformed in this respect; it is doubtful if they are entitled to a reformation, but if the contract were so reformed we would have to hold that defendants have waived their right to rescind on this ground. It appears that defendants purchased an abstract and that they seek to counterclaim the price against plaintiff; furthermore, that they made a pay*386ment on the purchase price after plaintiff’s alleged failure to furnish the abstract. They cannot now treat the furnishing of an abstract as a condition precedent: McAlpine v. Reicheneker, 56 Kan. 100 (42 Pac. 339).
As a result of our re-examination of the issues we think the decree should be one of dismissal without prejudice. The defendants should recover their costs and disbursements in the lower court, and plaintiff should have a like recovery here.
Modified. Rehearing Denied.
Me. Chief Justice McBbide, Me. Justice Mooee and Me. Justice Bean concur.