Sachs v. Owings , 121 Va. 162 ( 1917 )

Sims, J.,

after making the foregoing statement, delivered the opinion of the court.

The rules of law governing all the points arising in this case are well settled, so that a limited reference to the authorities, without discussion of them, will be deemed sufficient.

This is an action by a purchaser of land to recover back a payment on account of purchase money under an unexecuted contract on the grounds, (1) that the title of the vendor was not such as the purchaser was entitled under the contract to require; and (2) on the ground that the purchaser was released by the vendor from the contract of purchase under seal by the subsequent oral agreement above referred to.

We will pass upon these defenses in the order in which we have stated them, and incidentally upon the points of law arising therefrom urged upon us in argument by counsel on both sides of the case.

1. Concerning the title the plaintiff had the right to require:

The plaintiff had the right to require only such title as he contracted for. He did not contract for a record title (Mundy V. Garland, 116 Va. 937, 83 S. E. 491), nor for one which an abstract of title would show to be good, or free of liens or encumbrances; nor one in fact free of liens or encumbrances. What he contracted for, indeed, was, by the strict terms of his contract, only “a good and sufficient deed * * * with general warranty and covenants of title.” It is well settled, however, that, even at law, a purchaser under such a contract is entitled to require a marketable title to be conveyed to him by his vendor. Maupin on Marketable Title to Real Estate, secs. 238, 242; 36 Am. & Eng. Anno. Cas., p. 1022, note; Bank of Columbia v. Hagner, 1 Pet. (U. S.) 455, 7 L. Ed. 219; Seibel v. Purchase, (N. J. C. C. of U. S.), 134 Fed. 484; Note 70 Am. Dec. 739; Little v. Paddleford, 13 N. H. 167; Newberry V. French, 98 Va. 479, 36 S. E. 519; 39 Cyc. 1909, 1983; Mundy v. Garland, supra. He is entitled to require this on the day fixed by the contract for completing the contract, where the action is at law, as in the instant case; time always being considered of the essence of the contract where it is construed at law. Maupin on Marketable Title, &c., sec. 310; Bank of Columbia v. Hagner, supra; Siebel v. Purchase, supra. If either party wishes time after the day fixed, for completing the contract, he must resort to a court of equity where, in proper cases, the rigid rule of the common law on this subject will be relaxed. The vendee under such a contract as that in evidence may, at law, elect to rescind the contract, if his vendor cannot, on the day fixed for completing it, convey to him a marketable title (see authorities above cited), and in such case, as he is not in equity asking the enforcement of the contract and his vendor is in default already, the vendee is not required to tender payment to his vendor of any balance due of unpaid purchase money, or to do any further act himself in completion of the contract, such as tendering notes for deférred payments contracted for, or the like, which would in such case be superfluous. Maupin on Marketable Title, &c., sec. 87; Morange v. Morris, 34 Barb. (N. Y.) 311.

2. Now with respect to the question whether the title which the deed from the defendants, which was tendered in the instant case, would have conveyed was a marketable title:

A vendee who is entitled only to a marketable title, “can only demand such title as a reasonably well informed and intelligent purchaser, acting upon business principles; would be willing to accept.” 3 Devlin on Deeds, sec. 1474. To the same effect see, Rife v. Lybarger, 49 Ohio St. 422, 31 N. E. 768, 17 L. R. A. 403; Morrison v. Waggy, 43 W. Va. 405, 27 S. E. 314.

A vendee is entitled to receive a title free of judgment and tax liens. Maupin on Marketable Title, &c., sec. 124; 10 A. & E. Ann. Cas., note, p. 248. But—

A vendee cannot elect to rescind and treat the contract as rescinded on the ground that the title is not a marketable title because there are encumbrances on. .the land purchased, if they are of such character and amount that he can apply the unpaid purchase money to the removal of the encumbrances. Maupin on Marketable Title, &c., secs. 246, 304; Woodman v. Blue Grass Land Co., 125 Wis. 489, 103 N. W. 236, 104 N. W. 920. This can be done where the amount of the encumbrance is definite, does not exceed the unpaid purchase money due, is presently payable (as was the case with the delinquent tax lien in the instant case), and its existence is not a matter of doubt or dispute, or the situation is not such with respect thereto as to expose the vendee to litigation on the subject. (See authorities last cited; also Miller v. Bronson, 26 R. I. 62, 58 Atl. 257; Lindsey v. Humbrecht (C. C.), 162 Fed. 548.)

As to the three alleged judgment liens unreleased of record, on the date fixed for the completion of the contract, but which were barred by the statute of limitations: If they had not been barred by the statute of limitations, and had not been of such character and amounts that they would have been extinguished by application of the purchase money as aforesaid, such judgments would, at law, have rendered the title unmarketable. Maupin on Marketable Title, &c., sec. 307. Only in equity could the vendor have obtained time in which to have had them released of record by proving payment, etc. However, being barred by such statute, they did not, even at law, render the title unmarketable. Rife v. Lybarger, supra. Moreover, they were for definite amounts, and less than the purchase money due and unpaid would have discharged, and were presently payable, so, for this reason also, they did not render the title unmarketable. (See authorities above cited on this subject.)

As to the telephone line easement:

(a) As the jury may have inferred from the evidence that this easement was visible upon the land at the time of the purchase, as above noted, we must so infer. In such case the purchaser is presumed to have taken into consideration the existence of this encumbrance in fixing upon the amount of the purchase money. Maupin on Marketable Titles, &c., sec. 127, p. 300, and authorities collated in note thereto; Scott v. Moore, 98 Va. 668, 37 S. E. 342, 81 Am. St. Rep. 749. See also notes on the subject in 3 L. R. A. 790, 4 L. R. A. (N. S.) 314; 8 L. R. A. (N. S.) 418, 30 L. R. A. (N. S.) 833, and 38 L. R. A. (N. S.) 33.

(b) As the jury may have found from the evidence that this easement was not an injury, but a benefit, to the market value of the land, we must so regard it; in which case it cannot be considered to be an incumbrance of which the plaintiff could complain.

We, therefore, conclude that at the time fixed for completing the contract in the instant case, the vendors could have, and by the deed which they tendered to the plaintiff would have, conveyed to him a marketable title, such as was contracted for.

We come now to the remaining question for our determination, on the merits of the case, namely:

2. Was there a release of the plaintiff by the defendants from the obligation of the contract, by the alleged subsequent parol agreement, above referred to in the statement of facts?

At law, the common law rule that an executory contract under seal can be modified or abrogated only by an instrument of equal dignity, i. e., by one under seal, has not been relaxed. It is only in equity, where the distinctive equitable principles applicable in that forum may be invoked, that there has been a relaxation of such rule. 2 Minor on Real Prop., sec. 1315; 4 Wigmore on Ev., sec. 2455; Campbell v. Alsop, 116 Va. 46, 81 S. E. 31; Jones on Ev. (1912 — 2d Pocket Ed.), sec. 443. The argument for- the abolition of this rule (see authorities last cited and also note 7 Va. L. Reg. 204) might be addressed with great force to the legislature. It is not within the function of courts to change well established rules of law.

Further: It will be noted that the contract in the instant case was not in fact cancelled by mutual agreement. If such a mutual agreement had been executed by actual cancellation or destruction of the contract, it would have operated to have annulled it.- 2 Minor’s Inst. (3d ed.), p. 742. There was, however, merely an alleged parol agreement to cancel the contract — itself an executory agreement. The mutual relinquishment of their respective rights under the contract by the parties thereto would have been a sufficient consideration to have supported the executory agreement for its release; but the latter being by parol, could not, had it existed as a fact, operate, at law, to release the obligations of the contract under seal.

However, in the instant case, upon the conflict of evidence on this point, the jury may have found, and we must therefore hold, that no agreement was made by defendants to release the plaintiff from the obligation of the contract, before the time fixed for its completion.

For the foregoing reasons, we are of opinion that the trial court committed error in sustaining the demurrer of the plaintiff to the evidence of the defendants) because of which the judgment complained of must be reversed, set aside and annulled, and this court will enter such judgment as the trial court should have entered.

Reversed.