Court Opinion

ID: 9551199
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:49:12.978259+00
Date Added: 2024-06-11T15:23:16.651811
License: Public Domain

DONALDSON, Chief Justice,
dissenting.
The majority holds that the trial court erred in not allowing appellant Barnard to rescind the parties’ contract. I dissent from that holding. The remedy of rescission is only available where the defendant has materially breached the contract. McEnroe v. Morgan, 106 Idaho 326, 678 P.2d 595 (Ct.App.1984). See 12 S. Williston, A Treatise on the Law of Contracts, *4741445 (3rd Ed.1970). As this Court stated in Blinzler v. Andrews, 94 Idaho 215, 218, 485 P.2d 957, 960 (1971), rescission is an equitable remedy that totally abrogates the contract and should be granted only where one party has committed a breach so material that it destroys or vitiates the entire purpose for entering into the contract. There was no evidence of such a breach in the present case. The trial judge specifically found that, considering the conduct of the parties and the condition of the title disclosed by the preliminary commitment, the Akins were not in default in failing to provide title insurance within a reasonable period of time.
The majority relies on Fajen v. Powlus, 98 Idaho 246, 561 P.2d 388 (1977), for the proposition that the Akins materially breached the contract by failing to provide marketable title. In Fajen, we held that “[a] purchaser of real property who bargained for marketable title thereto cannot be required to accept property with an admitted cloud on the title.” Fajen, supra at 248, 561 P.2d at 390. The sellers in Fajen were required to provide title insurance showing good and marketable title when the purchaser had paid $4,000:00 of the purchase price. It was uncontroverted that a building located on the purchased property encroached onto another piece of property and that title insurance could not be obtained to cover such a defect. Thus, we held that until the encroachment was cured, or until title to the two pieces of property was merged, the buyers could not be compelled to purchase the property.
The present case is clearly distinguishable. There is no cloud on the Akins’ title. Neither Barnard’s April 13, 1979, Notice of Default, nor the June 15,1979, letter to the escrow holder which conditioned payment of the first installment, listed the absence of title insurance as a default. The evidence indicates that the Akins furnished Barnard with a Title Commitment Policy on May 11, 1979. In a letter accompanying that commitment, the Akins’ attorney informed Barnard of his belief that two of the exceptions listed in the commitment were incorrect. He enclosed a copy of a letter he had sent to the title insurance company stating his objections to those exceptions and asking that they be removed. Barnard responded on May 17, by formally objecting to the above-mentioned exceptions in addition to one other exception contained in the commitment. The exceptions were subsequently removed and on August 15, 1979, a policy providing the required title insurance was issued.
The question of whether the title insurance policy was provided within a “reasonable time” as required by the contract, was a question of fact and, as such, was a question for the trial court. The trial court found that the Akins were not in default in failing to provide title insurance within a reasonable time. This finding was supported by substantial and competent evidence and should not have been disturbed on appeal. See Circle C Ranch Co. v. Jayo, 104 Idaho 353, 355, 659 P.2d 107, 109 (1983). Accordingly, the decision of the trial court should have been affirmed.