Epplett v. Empire Inv. Co.

HARRIS, J. The plaintiff argues that, on the facts as found by the court, she is entitled to a judgment. This argument proceeds on the theory that the defendant’s letter of March 26th constituted a repudiation. and rescission of the contract. Defendant meets this argument by saying that the letter of March 26th was an affirmance of the forfeiture clause in the contract and, therefore, was not a repudiation and rescission of the contract. Under the rules as established by prior precedents in this state, the question as to whether the letter of March 26th was a wrongful act and therefore amounted to a rescission, or was a rightful act and therefore amounted to an affirmance of a controlling provision in the — 541 — contract and effected a forfeiture of the moneys previously paid, depends upon whether the plaintiff was entitled to notice, tender of the deed and a reasonable time within which to pay. 1, 2. It will be observed that, although time is made the essence of the contract, the forfeiture provision is not so worded as to make it self-executing; for the contract does no more than to give the defendant “the option to declare the amount paid thereon forfeited”: Maffet v. Oregon & Cal. R. Co., 46 Or. 443, 454 (80 Pac. 489); Higinbotham v. Frock, 48 Or. 129, 131 (83 Pac. 536, 120 Am. St. Rep. 796); Kemmerer v. Title & Trust Co., 90 Or. 137, 144 (175 Pac. 865). The contract does not by force of its own terms automatically work a forfeiture upon failure to pay an installment, but it merely gives the defendant the right to elect that it will declare a forfeiture; and hence, in order to have produced a forfeiture, the defendant must have exercised its right by electing to declare a forfeiture. The right to declare a forfeiture can, when arising out of contracts like the one presented here, be exercised either at or after the maturity of any installment; but, whether exercised at or after maturity, the right does not exist and cannot be lawfully exercised unless reasonable notice has been previously given: Higinbotham v. Frock, 48 Or. 129, 131 (83 Pac. 536, 120 Am. St. Rep. 796); O’Conner v. Hughes, 35 Minn. 446 (29 N. W. 152). Since contracts like the one here are not self-executing, the law by implication introduces into such contracts a provision that the right of forfeiture shall be exercised only after first giving notice for a reasonable period of time, or rather, speaking figuratively, the invisible and omnipresent hand of the law writes such a provision into the contract; and, therefore, the — 542 — right to forfeit cannot he fully exercised unless: (1) the vendor gives reasonable notice; and (2) the purchaser fails to pay within the time fixed by the notice, The defendant did not give any notice to the plaintiff before the maturity of any installment. Nor did the defendant give any notice after the maturity of any installment, except the letter of March 26, 1919; but since that letter is itself a declaration that a forfeiture is then effected, rather than a notice that a forfeiture will be effected in the future unless payment is made within a prescribed time, it necessarily follows that the letter of March 26th constituted a breach of the implied stipulation to give reasonable notice, and amounted to a rescission of the contract, and hence enabled the plaintiff also to rescind, thus producing a mutual rescission, unless it can be further said that the plaintiff waived her right to notice. If the record involved only three facts: (1) the failure to pay at maturity; (2) the defendant’s letter of March 26th; and (3) the plaintiff’s letter of April 4th, the conclusion would be that there was such a mutual rescission as entitles the plaintiff to recover: Maffet v. Oregon & Cal. R. Co., 46 Or. 443 (80 Pac. 489); Cornely v. Campbell, 95 Or. 345 (186 Pac. 563, 187 Pac. 1103). 3. But there are other facts recited in the record, and, among the other facts, is the important one that the plaintiff wrote the letter of October 10th. This letter constituted an abandonment of the contract. It is true that she expressed the hope, and possibly the expectation, that some of the moneys would be repaid to her; but the fact remains that she plainly declared that she would make no more payments, and that she “thought this the quickest way to end the matter.” The law does not require vain perform — 543 — anees or idle ceremonies: Southern Pac. Co. v. Siemens, 77 Or. 62, 68 (150 Pac. 290). By declaring that she abandoned the contract, the plaintiff waived her right to notice, and thus enabled the defendant to exercise its then ripened right of forfeiture; for to require a notice after such abandonment would have been a mere idle ceremony: Mitchell v. Hughes, 80 Or. 574, 584 (157 Pac. 965); Kemmerer v. Title & Trust Co., 90 Or. 137, 146 (175 Pac. 865). The letter of March 26th constituted the employment of the remedy prescribed by the contract, and operated as an affirmance, not a repudiation, of the contract: Stennick v. J. K. Lumber Co., 85 Or. 444, 478 (161 Pac. 97, 166 Pac. 951); 27 R. C. L. 625. 4. The plaintiff contends that the defendant was obliged to tender a deed before it could rightfully declare a .forfeiture. Where a land sale contract provides for the payment of the price in installments and there has been a failure to pay an intermediate installment, the vendor is not, under a contract like the one here, required to tender a deed in order to be entitled to declare a forfeiture on account of the failure to pay such intermediate installment.. Where, however, there is a default in the final payment, the situation is different; for the reason that the obligation to pay the final installment and the obligation to deliver a deed are concurrent obligations. 5. The unpaid installments were overdue when the defendant wrote the letter of March 26th declaring a forfeiture, and therefore we may assume that all the unpaid and overdue installments should be combined and treated as a single sum which was then due as a final payment. We may further assume that, if the plaintiff had done nothing except fail to pay, the defendant would have been obliged to tender a deed be — 544 — fore it could have rightfully declared a forfeiture. But the plaintiff did more than merely fail to pay; she expressly abandoned the contract; and, for the same reason that her abandonment of the contract operated as a waiver of her right to notice, the plaintiff’s act of abandonment relieved the defendant from the necessity of going through the formality of tendering a deed. 6, 7. The plaintiff insists that she is entitled to a judgment on the pleadings, on the theory that the allegation: “That thereafter said plaintiff elected to and did accept said abandonment,” being the third paragraph of the amendment interlined in the answer, is equivalent to an allegation of mutual abandonment, and rescission. Although we have quoted the third paragraph of the amendment exactly as we find it in the printed abstract, we shall assume that a typographical error accounts for the presence of the word “plaintiff” instead of the word “defendant.” The record does not inform us whether the plaintiff asked the trial court for a judgment on the pleadings. For aught that appears in this record there was no motion of any kind, nor any demurrer filed in the court below; and, hence, the answer must be construed most favorably to the defendant. The answer itself does not tell us how or in what manner the defendant “accepted” the abandonment, although it does affirmatively state that “said plaintiff without right and without the consent of said defendant elected to and did abandon said contract.” The pleadings do not give any information about the letters; the findings of fact are the sources of our information concerning the correspondence. The answer does not even allege that the defendant declared a forfeiture. If the record consisted of nothing but the complaint and an — 545 — swer, or if the reply had admitted the third paragraph of the amendment, there would be substantial reason for saying that paragraph 3 of the amendment was equivalent to an admission by both parties that they had abandoned the contract and that they thereby effected a rescission of it. Instead of admitting paragraph 3 of the amendment, the plaintiff denied it, and thus raised an issue, with the result that the plaintiff is in no position now to ask for a judgment on the pleadings; for denials must ordinarily be tried on the evidence: Heatherly v. Hadley, 2 Or. 269, 273; Willis v. Holmes, 28 Or. 265, 268 (42 Pac. 989); State v. West, 74 Or. 112, 119 (145 Pac. 15). The defendant argued that the evidence explained the meaning of paragraph 3, and that “so far as the defendant accepted the abandonment, it did so by declaring a forfeiture in its letter of March 26, 1919.” If then we try the issue raised by the denial of paragraph 3 of the amendment on the evidence, as we must, we find that by the letter of March 26th the defendant declared a forfeiture of the contract and it did so by invoking a provision in the contract and thus affirmed rather than abandoned it. The answer as amended is not a model pleading; and yet, because of the denial made by the plaintiff and the evidence concerning the issue raised by the denial, our conclusion is that the plaintiff is not entitled to a judgment on the pleadings. The judgment is affirmed. Affirmed. — 546 — (194 Pac. 461.) On petition for rehearing. Denied. Mr. George P. Winslow and Mr. H. T. Botts, for the petition. Mr. George W. Gearhart, contra. In Bane.