Shepherd v. Dougan

The trial court denied appellant any relief, holding the statute of limitations had run, which is the only ruling of the trial court challenged by the assignments of error. It is necessary, however, to determine what if any rights appellant has, and when accruing, in order to determine when the statute of limitations began to run. Respondents sued to quiet title, which is an equitable proceeding. Appellant set up a claim of lien on the real property in question to effect the return to her of the money paid by her under a void contract and which, therefore, ex aequo et bono should not be retained by respondents as purchasers from the original vendor with knowledge of the void contract, and evidently taken into consideration when they purchased from the original vendor, F.T. Shepherd. The entire proceeding, therefore, is clearly in equity and to be determined according to principles of equity in which the rights and so-called equities of the parties may be legitimately balanced, in order to determine in whose favor the scales tip. (21 C. J., p. 198, sec. 187-8, p. 206, sec. 207, p. 207, sec. 208.)

The following factual situations are not disputed: That the contract of sale and purchase between the original vendor, F.T. Shepherd, and appellant and her husband, now deceased, was void because not signed by the original vendor's wife, Mrs. F.T. Shepherd. The consequent legal affluent is that the vendees and the original vendor are equally charged as a matter of law with knowledge that the contract was void, and the present respondents, assignees of the original vendor, F.T. Shepherd, purchased with full knowledge of these facts and are therefore bound thereby. The scales, therefore, remain even.

Being a void contract, neither party could enforce it as such, and it conferred no rights and imposed no obligations, nor did either party gain any rights thereunder or thereby of a contractual nature.

The authorities are in agreement that a vendee not in default as to payments under a void contract, where the continuation of the relationship, not strictly that of vendor and vendee because there is no valid contract, is ended, not strictly by cancelation or rescission (by vendor or his assignees or successors) because cancellation and rescission connote a pre-existing valid contract, but whatever term the relationship may be called, when it is ended the purchase money, less the reasonable value of the use and occupancy of the land, is returnable to the vendee together with, under a statute like ours, a lien therefor on the land to enforce such repayment. (Aronstein v. Irvine, 49 La. Ann. 1478, 22 So. 405; annotation, 20 L.R.A., N.S., 175; Montgomery v. Meyerstein, 186 Cal. 459,199 P. 800; Newman v. Moore, 94 Ky. 147, 21 S.W. 759, 42 Am. St. 343; Pierson v. Lum, 25 N.J. Eq. 390, 45 A.L.R. 352n, 354, 360; 33 Mich. Law Rev., (Nov. 1934) 108.)

Respondents argue because appellant was in default she cannot recover a personal judgment against them because they did not receive any of the money paid by her, and also and perforce, no lien.

Thus, at this point (not in point of time but progressive consideration of the parties' respective equities), except that appellant was in default, the scales would tip in her favor. In other words, the above-recognized rights of recovery tipping the scales in her favor are in effect claimed by respondents to be counter-balanced by her default. It seems to me, however, that this further fact which is peculiar to this case is sufficient to tip the scales in her favor and is counter-balanced by no other consideration in favor of respondents.

It is true the contract is void because the wife of the original vendor did not sign, nor, had she lived and later given her consent, could the contract have been enforced. (Childs v. Reed, 34 Idaho 450, 202 P. 685; McKinney v. Merritt,35 Idaho 600, 208 P. 244; Elliott v. Craig, 45 Idaho 15,360 P. 433.) But upon her death all her individual and community interest in and to this property passed to her husband, F.T. Shepherd, the original vendor, and thereafter he continued to accept payments on, as and of the purchase price, and his assignees, respondents, purchased with full knowledge thereof and benefited thereby. It would be an anomaly to hold the vendee is deprived of rights because of being in default under a void contract, a dead thing, one which gave and could give no right of action in her favor or against her, and that a vendor or his assignees with full knowledge, and with all opposed title vested in them, could be accorded any rights because of such void contract or dead thing.

The argument is made that appellant, if allowed recovery herein, receives greater rights than if she had been in default under a valid contract, because if in default under a valid contract she could not recover the money paid by her, at most perhaps would be entitled to only a personal judgment against the original vendor (Wilson v. Smith, 69 Cal. App. 211,230 P. 963; California Delta Farms v. Chinese American Farms, (Cal.) 268 P. 1050), a holding not legitimately renderable herein because F.T. Shepherd is not a party herein. The answer to this is that if the contract had been valid and the vendee had defaulted she would have been solely responsible for the loss of her rights to compel specific performance of the contract. The default herein neither added to nor detracted from the right of the vendor or his assignees to at any time end the void relationship, that is, further continuance under a void contract of sale and purchase. Appellant likewise had the right to end the relationship but she did not do so unless her failure to continue payments could be so construed, and if so considered, i. e., ending the relationship not merely defaulting, under a parity of reasoning such construction would entitle her to recover; but she did no affirmative act, the appellants did, and the statute of limitations did not begin to run against her until the anomalous relationship between the parties had ended, which termination respondents effected by bringing suit to quiet title. The trial court therefore erred in denying appellant relief and in holding the statute of limitations had run. Appellant is entitled to a lien because of sec. 44-704, I. C. A., as is the holding of the opinion by Holden, C.J., and the statute did not commence to run against appellant's rights herein until what we may call rescission, though not strictly so, by respondents when they brought suit to quiet title. (Bedell v. Tracy, 65 Vt. 494,26 A. 1031; 66 C. J. 1517, n. 33; Little v. Davidson, (Ky.)67 S.W. 34.) Thus interest on the money allowed her would likewise commence on that date.

For the above reasons I continue to concur with the opinion of the Chief Justice as modified by him and think the petition for rehearing should be denied.