Butler v. Cortner

*306 VARIAN, District Judge. This is an action at law for money had and received. It grows out of an* agreement by respondent Butler to purchase a farm from appellant Cortner. The agreed purchase price of the farm was $27,000. Nine thousand dollars was paid at the time of the execution of the agreement, and the payment of a debt, secured by a mortgage on the premises, was assumed. The remaining instalments were further evidenced by promissory notes deposited in escrow, one of which, in the sum of $1,500 and interest, was due on or before December 1, 1921. In addition, respondent agreed to pay annually the taxes and certain hwigation charges. The agreement was in writing, and contained the following provision: “It is hereby mutually agreed that first parties shall execute to second party a deed conveying the title of said premises to second party, said deed to contain the usual covenants of warranty and said deed is to be placed in escrow in the First National Bank of Boise City, Idaho, together with a copy of this contract and the notes herein-before referred to, and an escrow contract shall be executed upon the back of the envelope containing the' same providing *307 that when the second party has made all the payments as herein provided to said escrow for the nse and benefit of first parties,, then and in that event said escrow shall be directed to deliver said deed to said second party. But in the event that second party shall fail, refuse or neglect to make any of said payments at the time and in the manner herein provided, for a period of more than thirty days from the date that any of the said payments are due according to the terms of this contract and the notes executed in evidence of said indebtedness, said deed shall be returned to first parties and this contract shall be held for naught and void in all its terms.” The respondent failed to pay the taxes and irrigation charges due in the fall of 1921, and also failed to pay the instalment due on December 1, 1921, or within thirty days thereafter, the period of grace allowed under the agreement. Prior to the expiration of this period of grace, appellant notified the bank not to accept the payment due December 1, 1921, if offered after December 31, 1921, and substantially gave the same instructions to the bank on January 3', 1922. One of respondent’s brothers, who was his agent, arrived in Boise on the night of January 4, 1922, and went to the bank on the next day to see about paying the instalment then past due. The bank told him that it would not accept any payment offered by him. Respondent’s agent then met appellant and offered to pay him the amount then due, together with interest on deferred payments and taxes and irrigation assessments. Appellant refused to accept the payment. On the next day, which was January 6th, respondent’s agent, together with his attorney, went to the bank and again sought to make the payment. The bank refused to accept the payment, and so did appellant. At that time, respondent’s agent and appellant had another conversation, participated in by respondent’s attorney, about which there is some conflict; and while the word “rescind” may have been used by appellant, it was not used in its technical, legal sense, and it was fully understood that appellant simply refused to accept the payment of the amount then past due, and claimed a forfeiture of the money paid. *308 On the same day, January 6th, appellant demanded and received from the bank the deed to the premises. It appears that respondent left the farm in November, 1921. There is no evidence that respondent ever returned to the property, but there is evidence that another of respondent’s brothers went on the farm about January 15, 1922, talcing with him his trunk, bedding and food. The same evening appellant put the brother’s belongings out of the house, and retained possession of the premises. Thereafter respondent demanded of appellant the repayment to him of the initial payment of $9,000, the taxes and irrigation charges paid by him, together with interest thereon, and for certain work and labor performed, less the rental value of the farm during the time it was occupied by himself. The demand was refused. Action was instituted and was tried to the court without a jury. Judgment was made and entered for the respondent according to the prayer of his complaint, from which this appeal is taken. It must be borne in mind that this is not a suit in equity by a vendor for specific performance; it is not a suit by a purchaser, offering to pay the balance due, and asking the aid of a court of equity to compel the parties to carry out their agreement. For this reason, much of the argument and many of the numerous authorities are not helpful. On the contrary, this is a law action, brought by a purchaser admittedly in default in his payments, against a vendor not in default in any particular, to recover payments already made. The refusal to accept the payment then past due did not put the vendor in default; such act did not constitute a rescission or an offer to rescind. The act of the vendor was harsh, but it was authorized by the agreement, and might have been anticipated by the purchaser; and the purchaser, being in default, could not, by merely making a tender thereby put the vendor in default. It is time that, in this case, the payment offered by the purchaser was not more than five or six days overdue, but such a circumstance is of little if any consequence in an action at law to recover the payments already made. The parties fixed the time for making the payment. An offer of payment on *309 the following day would be no more a compliance with the exact terms of the agreement than such an offer made a greater time thereafter. A provision that if the purchaser fails to make the stipulated payments at the time and in the manner provided, the deed shall be returned to the vendor, and the contract of sale “shall be held for naught and void in all its terms,” makes time of the essence of the contract. (6 R. C. L. 899; 39 Cyc. 1369; Quinlan v. St. John, 28 Wyo. 91, 201 Pac. 149, 203 Pac. 1088; Pickens v. Campbell, 104 Kan. 425, 179 Pac. 343; Coughram, v. Bigelow, 9 Utah, 260, 34 Pac. 51; Martin v. Morgan, 87 Cal. 203, 22 Am. St. 240, 25 Pac. 350; Greg v. Tubbs, 43 Cal. 359.) It is the intention of the parties that must govern. Other than by the use of the exact words, it would be difficult to state more clearly that time was of the essence of the agreement than was done by the parties themselves. The foregoing is taken verbatim from a memorandum written by Mr. Justice Wm. E. Lee prior to rehearing. Respondent’s theory is that he is entitled to recover moneys paid upon an instalment contract for the sale of real estate rescinded by the vendor and acquiesced in by the vendee. The action lies only “(1) 'where the contract has been rescinded by mutual consent and agreement of the parties, and there has been no default on either side; (2) where the vendor is unable or unwilling to perform the contract on his part; (3) where the vendor has been guilty of fraud in making the contract; (4) where, by the terms of the contract, it is left in the purchaser’s power to rescind it by any act on his part, and he does so; and (5) where neither party is ready to complete the contract at the stipulated time, but each is in default.....But where the contract is still incomplete a vendee will not be permitted to maintain an action to recover the money paid in part performance unless he is himself without fault.” (2 Warvelle on Vendors, 2d ed., p. 1092, sec. 918.) See, also, 5 Thompson on Real Property, p. 441, sec. 4331; 27 R. C. L. 625; 39 Cyc. 1999 et seq., 2025 et seq. *310 Respondent- was in default when his brother made the tender of January 5, 1922, and appellant was entitled to stand upon the terms of the contract, having notified the escrow-holder of his intention after respondent’s default and before any tender was made. Respondent was without the state, and appellant had no knowledge of any other agent of respondent to whom notice might be given. Respondent, being already “at fault,” could not, by making a tender, place himself in position to maintain an action for the return of the instalments of the purchase price theretofore paid by him. The record fails to show sufficient legal grounds for relief from the consequences of respondent’s failure to make his instalment payment within the time fixed by the contract. His relief, if any, lies in equity for specific performance or other appropriate remedy. The judgment is reversed, with costs to appellants. Wm. B. Lee and Taylor, JJ., concur.