Ginger v. Smith , 47 S.D. 106 ( 1923 )

PO'LLEY, J.

This action is brought to rescind a contract for the sale of a half section of land, and- certain farming implements, in Fall River -county. The contract is dated February 25, 1920. The total consideration named is $25,600. The terms of payment are not material, except the following provision, to wit:

“The 'balance of said purchase price in the sum of $6,100 is to- be deposited in the Stockman’s Bank at Hot Springs, S. D., to be paid to the parties of the first part as soon as the titles to said lands are perfected and abstracts of title furnished showing good and perfect titles thereto in the parties of the first part, clear and free of all liens and incumbrances whatever, and approved by Messrs. Buell & Denu, attorneys at law, of Rapid City, IS. D*.

“Whereas there is some defect in said titles-, the parties of the first part agree to proceed with reasonable diligence to perfect the titles to said lands so that the same may be perfected- and proper abstracts furnished on or before -September 1, 1920; it •being understood that the titles will be perfected with all reasonable diligence.”

The deed conveying title to the land- was executed and delivered to plaintiff on or about the 1st day of March, 1920, and on that date plaintiff executed and delivered to defendant a note and mortgage for $12,000. Plaintiff paid the first year’s interest of $720 on the $12,000 note, but defendant appears to have taken no steps to- perfect the title to the land nor to- furnish abstracts of title as- provided for by the terms of the contract.

On or-about the nth day of October, 1921, plaintiff caused to- be served upon defendant a notice of rescission of the said contract, in which notice he offered to- reconvey title to the- property to defendant and offered to pay defendant $2,000 for the- use of the .land during the time it had been occupied by plaintiff. This tender was -conditioned upon, the return to plaintiff of all the money, including the $720 interest on the $12,000 note and mortgage, that had been paid by plaintiff on account of the purchase of the land. The ground for such rescission, as stated in said notice, was that defendant “failed to perfect title to the premises therein described, • though more than one year has elapse-d since the date you promised to deliver, to the undersigned, good and perfect title thereto.”

Defendant demurred to the complaint on the ground that the said complaint does not state facts sufficient to -constitute a cause of action. The demurrer was sustained, and plaintiff appeals.

We are of the opinion that the facts set out in the complaint do not entitle plaintiff to the relief demanded, nor to any relief. . The transactions arising out of the contract are of su-chnature that it would be very difficult, if not impossible, to- place defendant in the same position as before the making of the contract. Whether the amount offered by plaintiff as compensation for the use of the land is a reasonable amount for that purpose could be determined only by the taking of evidence as to the value thereof, and the offer of restitution made by plaintiff does not include any of the farm implements- that were left on the place by defendant.

By the terms of the contract the defendant was to proceed with reasonable diligence to perfect the title to the land and was to have such title perfected- on or before the 1st day of September, 1920; 'but this was a provision that could be waived by plaintiff, and by his -conduct he did waive performance within the time specified in the contract. Had he intended to stand upon the strict letter of the contract, he -would not have paid a year’s interest on the $12,000 note until the title had been perfected and abstracts delivered. The payment of this interest waived any forfeiture that may have existed up to that date, and, before plaintiff could have declared a forfeiture thereafter, it was necessary to put defendant in default by the making of a demand on defendant to proceed with such steps as might be necessary to remove the existing defects in the title.

“Time is not of the essence of a contract which is to be performed within a reasonable time, but either party can make it so whenever he desires by simply giving notice to that effect. If notice is not given the contract continues in force. It may be sued on as an existing contract and damages for its breach recovered. But it cannot be treated as at an, end and a forfeiture enforced. (McTague v. Sea Isle City Lot & Building Asso., supra.) The rule is a just one and is necessary to protect the unwary..” Taylor v. Goelet, 208 N. Y. 253, 101 N. E. 867, Ann. Cas. 1914D, 284.

What the defect in the title to the land is does not appear, but it is not claimed that plaintiff cannot, by appropriate steps, cause the removal of such defect as well as defendant, and if, within a reasonable time after demand, defendant does not proceed to take the necessary steps to clear said title, then plaintiff himself may do so, and the $6,100 on deposit in the Stock-man’s Bank may be used, so far as necessary, for that purpose.

The judgment appealed from, is affirmed.

Note. — Reported in 196 N. W. 298. See, Headnote (1), American Key-Numbered Digest, Vendor and purchaser, Key-No. 116, 39 Cyc. 1423, 1424; (2) Vendor and purchaser, Key-Nos. 114, 143, 39 Cyc. 1433, 1535; (3) Vendor and purchaser, Key-No. 120, 39 Cyc. 1431; (4) Vendor and purchaser, Key-No. 144(3), 39 Cyc. 1536 (see 1925 Anno.).

On acceptance of deed with knowledge of defects in. title as waiver of purchaser’s right to rescind contract, see note in 30 L. R. A. (N. S.) 879.

On right of .purchaser in possession to rescind in action for defective title, see note .in 21 L. R. A. (N. S.) 395.