Stein v. Waddell ( 1905 )

Rudkin, J.

On the 3d day of February, 1903, the plaintiffs and the defendants, Waddell and wife, entered into a contract for the sale of real estate, the material parts of which are as follows:

“That, if the party of the second part shall first make the payments and perform the covenants hereinafter mentioned, on his part to be made and performed, the said parties of the first part hereby covenant and agree to convey, by a good and sufficient warrantee deed, guaranteeing property free from all mortgages, taxes, judgments, liens or any other incumbrance, the following lots, pieces or parcels of land, situated in the county of King, state of Washington, and more particularly described as follows, to wit: [Here follows description.]

“And the said party of the second part hereby covenants to purchase said land, and agrees to pay to said parties of the first part the sum of twenty ($20,000.00) thousand dollars, in the manner following: Rive thousand ($5,000) dollars upon the delivery of these instruments properly signed, sealed and acknowledged; five thousand ($5,000) dollars more on or before August 3rd, 1903; ten thousand ($10,000) dollars more on or before February 3rd, 1904; making a total of twenty thousand ($20,000) dollars, the full amount of the purchase price.

“The parties of the first part hereby agree with the party of the second part that they will, upon the payment of $10,000.00, give a warranty deed and take a note and first mortgage for the balance due: namely, $10,000.00, said note and mortgage to be due and payable on or before February 3rd, 1904. Parties of the first part hereby agree that second party shall'have the right to plat said tract of land into an addition, and upon the payment of the sum of $225.00 per lot they hereby agree to release any lot in said tract when platted, from the lien they now hold against said tract. All payments which are to fall due after the execution of this instrument, to draw interest at the rate of seven (7) per cent per annum, payable semi-annually on each of said installments until the full payment thereof: second party to pay all taxes, assessments and impositions that may he legally levied or imposed upon said lot; and in case of failure of the said party of the second part to make either of the payments or perform any of the covenants on his part, this contract shall he forfeited and determined at the election of the said parties of the first part; and the said party of the second part shall forfeit all payments made hy him on this contract, and such payments shall he retained hy the said parties of the first part in full satisfaction and liquidation of all damages hy him sustained; and they shall have the right to re-enter and take possession of said land and premises and every part thereof.

“It is mutually agreed that time is and shall be the essence of this contract and that all covenants and agreements herein mentioned shall extend to and he obligatory upon the heirs, executors, administrators and assigns of the respective parties.”

The defendants, Waddell and wife, paid on account of this contract the sum of $5,000 at the time of its execution, and thereafter paid the sum of $900 in installments of $225, at various times, the last installment being paid on the 18th day of September, 1903. On the 10th day of October, 1903, this action was commenced for the purpose of declaring a forfeiture of said contract. Among the grounds of forfeiture were, the nonpayment of the balance of the $5,000 due August 3, 1903, with interest ; the nonpayment of taxes; an execution sale of the interest of the Waddells in the property, on a judgment in favor of a third party; the filing of numerous liens against the property hy third parties who had performed labor and made improvements at the instance of the Wad-dells; agreements on the part of the Waddells to sell portions of the land, etc.

It was not claimed that any taxes had been allowed to accumulate against the property, after the sale and before the commencement of the action, and it cannot be seriously claimed that the other matters, above referred to, constituted any breach of the contract of sale: The Waddells agreed to pay all taxes, assessments, and impositions that might be levied or imposed upon the property, but this covenant is clearly limited to impositions which would be a charge against the vendors’ interest in the property, and was not a covenant that the purchasers would pay their own debts or discharge obligations for which they and their interest in the property were alone liable.

The complaint alleged that the interest and claim of the plaintiffs were paramount to’ all the claims above set forth, and the court so found. This is unquestionably true, so that the only breach of the contract of sale shown by the complaint was the failure of the Waddells to pay the balance of the $5,000 installment due on August 3, 1903, with interest. The plaintiffs had judgment below according to the prayer of their complaint, and the defendants, Waddell and wife, appeal.

There is some question in the record as to the waiver of a demurrer interposed by the appellants, but, inasmuch as the defect in the complaint, if any, was not aided by the proof, it is immaterial whether the demurrer was waived or not. The main contention urged by the appellants is that the complaint does not state facts sufficient to constitute a cause of action, for two- reasons: first, because it does not show by what court, if any, the respondents were appointed exe'cutors; and, second, because it does not allege that the respondents performed, or offered to perform, their part of the contract. We think the complaint is sufficient on the first point as against a general demurrer. Waldo v. Milroy, 19 Wash. 156, 52 Pac. 1012. The appellants contracted with the respondents as executors and this, prima facie at least, would give the executors a right to enforce or forfeit the contract, by suit or otherwise. It is also suggested in the reply brief that the trust, created by the will of which the respondents are executors, is void, hut this question was not discussed, and will not he considered on this appeal.

The argument in support of the second point is, that the covenant on the part of the respondents to convey the property and take a mortgage hack, upon the payment of the second installment due under the contract, and the covenant on the part of the appellants to make such payment, are mutual, concurrent and dependent, and that the respondents must perform the contract on their part, or, in other words, must execute and tender a deed before they can maintain an action upon the contract, or to declare a forfeiture thereof. In suits in equity for specific performance, and in actions at law to recover the purchase price, this rule is firmly established by .the authorities. Bank of Columbia v. Hagner, 1 Peters 455, 7 L. Ed. 219; Ackley v. Elwells Adm’rs, 10 N. J. L. 361; Robinson v. Harbour, 42 Miss. 795, 97 Am. Dec. 501, 2 Am. Rep. 671; Frink v. Thomas, 20 Ore. 265, 25 Pac. 717, 12 L. R. A. 239; Egbert v. Chew, 14 N. J. L. 447; Hogan v. Kyle, 7 Wash. 595, 35 Pac. 399, 38 Am. St. 910. The respondents contend that this rule should not obtain in this case for several reasons which we will now consider.

It is first claimed that the covenants in this agreement are independent. A court will not readily presume that a vendor intends to part with his title without receiving the purchase price-, or that the purchaser intends to part with his purchase money without receiving a deed. In oilier words, a covenant to convey and a covenant to pay the purchase price will be held to be concurrent and dependent, unless the contrary clearly appears to have been the intention of tlie parties, and the use of the words, “shall first pay,” as in this case, has no particular significance. Under the authorities above cited, we think that the covenants in this case are clearly concurrent and dependent.

It is further cláimed that there was, also, a default in the payment of the semi-annual interest due on the last payment/ amounting to the sum of $350. In answer to this contention we need only say that this claim was advanced for the first time in the respondents’ brief. Uo.such claim was made in the complaint.

It is further claimed that the respondents could not give a warranty deed by reason of the encumbrances against the property, as set forth in the complaint. We do not agree with counsel that encumbrances created or suffered by a purchaser, under a contract of sale, constitute a breach of the warranty contained in the vendor’s deed which is given in pursuance of the contract of sale. Furthermore-, if the demand for the payment of the purchase money due was insufficient, the demand to discharge the encumbrances would fail for the same reason.

The main contention is that the rule above announced does not apply in an action brought for the purpose of declaring a forfeiture of a contract. We cannot agree with this contention. If a vendor in default cannot maintain an action on the contract, a fortiori he should not be permitted to maintain an action to declare a forfeiture. Frink v. Thomas, supra, was an action brought to cancel or forfeit a contract. In answer to the claim here made, the court says:

“As a general rule, a party who asks for the rescission of a contract for the sale of real estate must be himself without fault; and when, as in this case, the payment of the purchase money and the making or tender of the deed are to occur simultaneously, they are regarded as mutual and concurrent acts, which disable either party from putting an end to the contract, without performance or a valid offer to perform on his part, and, so far as the question of time is concerned, both parties, after the day provided for the consummation, may be considered equally in default, and neither can hold himself discharged from the obligation of complete performance, until he has tendered performance on his own side and demanded it on the other.”

The respondents in this ease did not insist on a strict performance by the appellants. They accepted a partial payment on the contract some sis weeks after the cause of forfeiture accrued, and within three weeks thereafter this action was brought. Under such circumstances, a court of equity should insist upon a strict compliance with the terms of the contract, on the part of one invoking its aid to declare a forfeiture. The complaint was insufficient, and the proofs did not aid it.

The judgment is therefore reversed, with directions to dismiss the action.

Mount, C. J., Dunbar, Hadley, and Fullerton, JJ., concur.

Root and Crow, JJ., took no part.