Court Opinion

ID: 6902161
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:55:59.532374+00
Date Added: 2024-06-11T16:06:12.697111
License: Public Domain

Rehearing allowed April 4, decided July 5, 1911.
On respondent’s rehearing decided August 1, 1911.
On Rehearing.
[117 Pac. 273.]
Opinion
Per Curiam.
The plaintiff being in the possession of certain real estate under a contract for the sale thereof from the defendant to himself, having paid a portion of the purchase price, began this suit to determine the adverse interest of the defendant in the land in question. Having been defeated in the circuit court, the plaintiff appealed, and this court heretofore affirmed the decision of the circuit court: Miles v. Hemenway, 111 Pac. 696. A rehear*337ing having been granted, we have again examined the questions involved. The facts are stated in the former opinion.
It is only necessary at this time to consider the legal effect of the quitclaim deed and the accompanying agreement there mentioned. It should be remembered that the plaintiff found himself unable to meet one of the installments due upon the contract, whereupon he executed a quitclaim deed to the defendant for the premises, and at the same time as part of the transaction the parties executed the writing here set out which for convenience will be called “Exhibit C.”
“This agreement, entered into by and between V. Hemenway, party of the first part, and S. W. Miles, party of the second part, witnesseth: That whereas, on the 12th day of July, 1907, said parties entered into a contract by the terms of which the first party agreed to convey to the party, of the second part the northeast quarter of section 32, township 17 south, range 4 west, Willamette Meridian, containing 160 acres more or less, and whereas the $1,000.00 with interest on deferred payments is now due and the party of the second part is unable to make said payments; and whereas, the party of the second part desires an extension of time as follows: He desires until October 11th, 1909, at 12:00 o’clock A. M. of said day in which to make said payments and in consideration of said extension of time the party of the second part has executed to the party of the first part a quitclaim deed to all his right, title and interest in said property, which said deed, together with this contract, is to be deposited in the First National Bank where the other deed and contract is deposited and said bank is instructed and the parties hereto as follows: That if the said party of the second part fails to make said payments, then said original deed and contract, together with this contract and deed, is to be delivered to the party of the first part, and that all contracts and agreements between the parties hereto shall be at an end without any claim upon the part of either against the other.
*338“In witness whereof, the said parties have hereto set their hands and seals this first day of October, 1909.
“V. Hemenway [Seal.]
“S. W. Miles [Seal.]
“In the presence of
“A. C. Woodcock,
“Zelma Edwards.”
We adhere to the principle laid down in the former opinion that responsible parties may voluntarily settle their respective interests and estates in land and may discharge their obligations to each other by a conveyance of land; but, as in all other cases, such a conveyance must be unconditional and be taken in payment or discharge of subsisting obligations.
11. The question to be determined here is whether the quitclaim deed and Exhibit C, accompanying the same, constituted a rescission of the former contract for the sale of the premises or whether it operated as a new contract between the parties. A rescission contemplates not only the destruction of the contract, but also the restoration of the parties to their former estate or situation.
12. The transaction mentioned did not produce such a result, because, on the one hand, Miles did not surrender the possession of the land, and, on the other, Hemenway did not return the notes which Miles gave for the purchase price. Two of the notes had been indorsed by Hemenway, and were held at the time by the bank as collateral security for indebtedness owing by him to the bank.
13. It is true he says he told the cashier to give up these notes to Miles, but, without dispute, they were not offered to Miles until some days after the quitclaim deed had been surrendered to Hemenway by the officers of the bank. For the purpose of delivering these notes, the cashier was the agent of Hemenway and the latter must be bound by the act or failure to act on the part of his agent.
*33914. In legal contemplation, Hemenway had not surrendered the notes, and, conceding that he had a right at 12 o’clock noon on October 11th to declare a forfeiture, his failure to surrender the notes would be a waiver of his right to declare the forfeiture at that time. He could not afterwards insist upon a forfeiture without giving reasonable notice to Miles and making a new demand for payment of the balance due on the purchase price: Graham v. Merchant, 43 Or. 294 (72 Pac. 1088). That the transaction was still open, preventing a forfeiture, see Bickel v. Wessinger, 58 Or. 98 (113 Pac. 34, 38).
A strict analysis of Exhibit C discloses by recitals that the party of the second part is -unable to make the payments required by the original contract, including not only the one then due, but also the deferred payments. It also recites that the party of the second part desires an extension of time, but it does not disclose anywhere that Hemenway agreed to extend the time.
15. So far as the extension of time is concerned, the agreement is unilateral. It having been executed under seal, however, Exhibit C may be said to be supported by a sufficient consideration, for the seal is primary evidence of consideration. Section 776, L. O. L.
16. It is said wtih reference to the quitclaim deed “that if the said party of the second part fails to make said payment,” Exhibit C and the quitclaim deed should be delivered to the party of the first part. No time is specified in Exhibit C within which said payments are to be made. It is set out, as above stated, that Miles “desires until October 11, 1909, at 12 o’clock A. M.,” but it is not prescribed that he should make the payments at that time, or at any other particular time. Indeed, time is not made the essence of this agreement or of the original agreement; hence we must construe Exhibit C as to the time of payments to mean that such payments must be made within a reasonable time. Taking the quitclaim deed and *340Exhibit C together, they amount in legal effect to a contract in which Exhibit C is in the nature of a defeasance of the quitclaim deed, the whole having a general consequence like the former agreement. The complete transaction as evidenced by the deed and Exhibit C is in the nature of a further assurance from the plaintiff to the defendant for carrying out the original obligation to pay the purchase price of the land. The deed is substantially a renewed acknowledgment of the defendant’s legal title in the land, but the defendant took said deed, like any other grantee in a quitclaim deed, affected by the principles of caveat emptor, and all the more in this case because he had actual knowledge of the equities of Miles in the land. It was, at least, enhanced security to Hemenway because it includes in one and hastens the deferred payments on the land. In other words, the effect of Exhibit C, including, as it does, all the payments, was to make new terms whereby the transaction should be ended once for all, either upon payment of the whole balance of the purchase price, or render Miles liable to a strict foreclosure of his rights in the premises. If Miles had paid in full the balance of $3,800 remaining of the purchase price, the quitclaim deed would not have been lawfully deliverable. On the other hand, failure to pay, installed the new contract declared by the quitclaim deed and its defeasance, Exhibit C, by which a strict foreclosure is incurred for the full balance of the price remaining unpaid.
So far as mere words are concerned, the original contract is in form not less absolute than the quitclaim deed and Exhibit C in providing for a forfeiture in case the plaintiff fails to pay to the uttermost farthing. But equity looks to the substance rather than to the form. Things which are equal to the same thing are equal to each other, and if, as shown in the former opinion, it would require a strict foreclosure to divest the plaintiff of his equitable *341estate in the land under the original contract, the same process ought to be necessary to dispose of the similar situation arising under the analogous contract resulting by legal effect from the quitclaim deed and Exhibit C.
17. Another matter here claims our attention. During the pendency of this suit, Hemenway commenced an action at law in the circuit court against Miles upon the accounts of the Chabmers Hardware Company and the note of the First National Bank of Eugene against Miles, all of which had been assigned to Hemenway and about which some mention is made in the testimony. A writ of attachment was issued and levied upon the interest of Miles in the land in dispute so far as it could lawfully be done. That action proceeded to judgment on March 10, 1910, in favor of Hemenway and against Miles for the sum of $332.20, with interest at 10 per cent per annum from that date until paid, for the further sum of $334.50, with interest at eight per cent per annum from then until paid, $30 attorney’s fees, costs, and disbursements, also an order that the real property in question be sold for the satisfaction of that judgment.
At the proper time, the plaintiff here moved the circuit court for leave to file a supplemental complaint, alleging, in substance, what has been here stated about that judgment, relying upon the matter as a confession of the title of Miles in the land and a waiver on the part of Hemenway of the right to declare a forfeiture on the original contract. The court denied his motion to file the supplemental complaint, and also refused to allow Miles to introduce the judgment roll in the law action in evidence for the same purpose in the equity case.
Without deciding whether or not the court erred in denying the right to file the supplemental complaint or to give these matters in evidence, it sufficiently appears from plaintiff’s own record that something is due from him to Hemenway on account of those transactions. Miles in *342seeking equitable relief should be required to do equity, and these matters ought to be considered in any decree rendered herein.
The conclusion follows that the decree of the circuit court will be reversed and the cause remanded with directions to the circuit court to ascertain the amount due from Miles to Hemenway on the judgment mentioned above, and then to enter a decree, in substance, that the plaintiff Miles shall pay into that court for the use of the defendant, on or before 90 days after the date of such decree, the sum of $3,800, with interest thereon at the rate of eight per cent per annum since October 1, 1908, until paid, together with the amount due upon such judgment at the time of payment, and that in default of such payment, in full, the plaintiff be forever barred and excluded as upon a strict foreclosure from asserting or claiming any right, title, interest, or estate, either in law or equity, to the real property in question; and, further, that upon such payment being made as required by the decree, the defendant shall, within ten days thereafter, make, execute under his hand and seal, in the presence of two subscribing witnesses, acknowledge so as to entitle the same to record, and deliver to the clerk of the circuit court for the plaintiff a deed conveying from the defendant to the plaintiff the unincumbered fee-simple title to the real property in question and deliver to the clerk for the plaintiff the promissory notes mentioned in the pleadings in this suit, or that in default of the execution and delivery of such deed as so required, the decree shall stand and operate in all things as such deed of conveyance.
Neither party should recover costs or disbursements from the other. Reversed.
Mr. Chief Justice Eakin did not participate in the rehearing of this cause.
*343[117 Pac. 275.]