Court Opinion

ID: 6909382
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:15:04.627791+00
Date Added: 2024-06-11T16:06:28.326664
License: Public Domain

On Petition eor Rehearing
Before Latourette, Chief Justice, and Warner, Rossman, Lusk and Brand, Justices.
LATOURETTE, C. J.
Defendant’s petition for rehearing raises a question which merits discussion. In our opinion we said that the court did not err in instructing the jury that the taking by the State Highway Commission of a portion of the premises described in the complaint was not a defense to the action because the record disclosed that the plaintiff was willing to accept the deed to the property, excluding the property condemned.
Petitioner urges that we are in error in the above because the reply in which the offer to accept was made was withdrawn at the trial. The record discloses that plaintiff here in the condemnation suit in which he was made a party defendant filed an answer wherein he evinced a willingness, to accept the property not under condemnation with a demand for judgment against the highway commission for the value of the strip sought to be condemned. In his reply plaintiff in the present case reaffirmed the above offer. It appears from the record that such reply was withdrawn at the trial. This we overlooked and, further, were somewhat misled by plaintiff’s counsel at the oral argument at which time he stated, according to our recollection, that plaintiff at all times was willing to accept the land, excluding the portion condemned.
The question now before us is what legal effect the condemnation of a portion of the land involved in the sale had on the contract between the parties.
*463The record is rather meager as to what course the condemnation proceedings took. The day the complaint was filed in the present case plaintiff withdrew his answer in the condemnation proceedings and a default was taken against him in that action. The record does not disclose what happened to the condemnation case thereafter; however, there is a strong suggestion from the evidence that defendant dealt independently with the highway commission and sold it the strip of land in controversy and received the purchase price therefor.
Since the record on this point is so obscure, we decline to discuss the question of the rights of a vendee where a sale to a condemning body is voluntary, but will assume for the purpose of this opinion that the strip of land involved was taken by condemnation.
The courts are divided on whether the risk, as it is called, will fall on the vendee or on the vendor in a case of condemnation effected after the execution of the contract; however, this matter has been put to rest in Oregon in the case of Hill v. Doerfler, 150 Or 628, 47 P2d 260. In that case, after the contract of sale was executed, Marion county condemned for road purposes a strip across a portion of the land contracted to be sold. The vendee sought rescission of the contract for that reason. We held that the vendee was not entitled to rescind because of such condemnation, such decision revolving around the principle of equitable conversion, i.e., that under an executory contract of sale the vendee is to be deemed the equitable owner of the property while the vendor holds legal title to the same in trust for the vendee and as security for the unpaid purchase price. We held that where eminent domain is invoked, the theory is that the forced sale provides full compensation, and the vendee, being considered as the *464owner of the premises, is entitled to the full damage awarded and, therefore, does not suffer any loss since he is deemed to be fully compensated, and, if the vendor perchance should receive the award, he must hold the same as trustee for the vendee. We also said that a covenant of warranty is not breached when the right of eminent domain takes a portion of the property affected by the covenant.
We did not mean to imply, however, that a vendee would be obligated in every case to accept the award paid to the vendor where the vendee was not a party to the condemnation proceedings. There might be some instances where the award is less than the reasonable market value of the property taken, and, in the usual course of events, a party is entitled to his day in court; however, it is unnecessary to pass on this phase of the matter as the vendee was a party to the condemnation proceedings and a default was entered against him.
In the case of Reife v. Osmers, 252 NY 320, 169 NE 399, 67 ALR 1101, cited in Hill v. Doerfler, supra, plaintiff, who was the vendee, sought by action to recover from his vendor the amount of money he had paid under the contract to the vendor and expenses on ae- ' count of the taking of a portion of the premises contracted to be sold by eminent domain. The court of appeals affirmed judgment in favor of defendant, basing its decision on the equitable conversion doctrine.
In the ease of Salvatore v. Fuscellaro, 53 RI 271, 166 A 26, 27, it is said:
“The initiation of condemnation proceedings with respect to property, subject to an executory contract of sale, does not relieve the vendor from the obligation of his contract. Clarke v. Long Island Realty Co., supra.”
*465Turning to Clarke v. Long Island Realty Co., 126 App Div 282, 283, 110 NYS 697, we find that the vendee sued the vendor to recover payments made under an executory contract where condemnation had been invoked. The court said:
“It is not necessary to cite authority for the familiar proposition that the vendee under an ex-ecutory contract of purchase and sale has the equitable title, the vendor holding the legal title merely as security for the payment of the purchase money. The plaintiff’s theory is that the contract was abrogated by the condemnation proceedings; but no authority is cited in support of that proposition, and no reason is urged or suggests itself to us for so holding. The contract is not abrogated.” See Summers v. Midland Co., 167 Minn 453, 209 NW 323, 46 ALR 816; also Adlai E. Stevenson et al. v. Anna B. Loehr (1871), 57 Ill 509,11 Am Rep 36.
 Since the vendor may compel the vendee to accept title to the remaining property where condemnation is invoked, a fortiori, a vendee may compel a conveyance of title to the remaining property or obtain damages for the refusal of the vendor to perform, such refusal being predicated on condemnation. The record shows that defendant’s failure to perform was based, as evidenced by his letter to plaintiff prior to the institution of these proceedings, on the refusal of his wife to join in a deed, and not on account of condemnation. It, therefore, follows that defendant could not successfully set up condemnation as a defense in the instant action against him for damages for breach of contract; consequently, the instruction given by the court was not error.
The other points urged in the petition for rehearing are without merit. Petition denied.