Tuttle v. King

Stevens, J. 1. Vendor and purchaser : rescission by purchaser: depreciation in value. I. We will first consider the question of plaintiff’s right to rescind the contract on March 7, 1916, the date on which he filed an amendment to his petition praying such relief. It will be observed from the foregoing statement that, at the time of filing said amendment, defendant had perfected the title to said premises by causing all mortgage liens, except the mortgage for $8,500 executed by plaintiff to defendant, to be released of record, so that no question relating to title was at that time involved, and plaintiff was not in a position to demand rescission on account of previous defects existing therein. Until the filing of the amendment praying rescission, the suit commenced by him for specific performance of the contract was pending. It is a general rule that depreciation in the value of real property will not afford a ground of rescission or deprive the party seeking the same of the right to a decree compelling specific performance, where the alleged depreciation is due to conditions existing at the time of the execution of the contract, and that were then known to the parties. The possibility of a change in the action of the Missouri River was well known to plaintiff at the time he entered into the contract, and depreciation of the land on account thereof does not entitle plaintiff to a rescission of the contract. Falls v. Carpenter, 21 N. C. 237; King v. Raab, 123 Iowa 632. [293] It is a general rule that depreciation in the value of land after the execution of a contract will not alone defeat an action for specific performance theréof. Nims v. Vaughn, 40 Mich. 356; Keim v. Lindley, (N. J.) 30 Atl. 1063; Peterson v. Chase, 115 Wis. 239. II. Plaintiff by amendment to his petition, also asks damages for the value of the temporary buildings- removed by the tenant, and because of his inability to sell the premises on account of defendant’s failure to perfect the title thereto, and for the difference in the market value March 1, 1915, and at the time of filing the amendment. What is said above disposes of plaintiff’s claim for damages on account of the depreciation in the land, and the court awarded him damages in full for the buildings, removed by the tenant. 2. Equity : decree : decree nonconformable with proof: court-made contract. III. The only remaining question for our consideration arises on defendant’s cross-petition, praying specific performance of the contract. Plaintiff is not shown to have at any time been in default in carrying out his part of the written contract. All of the difficulty and delay in consummating the contract prior to the filing of plaintiff’s amendment to his petition asking rescission of the contract was due to the default and inability of defendant to perfect the title to the land. He'was unable .to procure a release’ of the $6,700 mortgage prior to the time fixed by the contract for the closing of the sale; and, for the purpose of enabling him to complete the sale, plaintiff orally consented to execute a mortgage for $8,500 and assume and agree to pay a $4,000 mortgage upon the land, to be executed by defendant, both notes to mature March 1, 1925. Defendant executed a mortgage for $4,000, which was placed of record, but it was claimed by him upon the trial that no note was ever given, and he was unable to procure a ten-year loan on that amount, and the note de [294] scribed in the mortgage was to become due in five years instead of ten. This was, of course, contrary to the terms of the contract, and plaintiff was not bound to accept that arrangement, and refused to do so. In February preceding the trial, defendant finally perfected the title to the land and caused all liens and encumbrances, except the $8,500 mortgage executed to him by plaintiff, to be released of record. Defendant’s prayer for specific performance is not of the written contract as originally executed, nor as modified by concessions upon the part of the plaintiff, or oral agreement between the parties. Plaintiff at no time agreed to execute a $4,000 mortgage. The deed executed by defendant and delivered to him contained a provision for the assumption by plaintiff of a $4,000 mortgage to be executed by the defendant, which plaintiff agreed to pay. Plaintiff cannot be required to execute a note and mortgage upon the land to secure the payment thereof for $4,000, for the reason that he has neither in writing nor orally bound himself to do so. The written contract did not make time the essence thereof, but provided that defendant should furnish an abstract showing-title as - therein designated, within a reasonable time after ■March 1, 1915. The record shows that both parties were doubtless eager to consummate the sale, but, on account of defendant’s inability to comply with his agreements, but little progress was made toward a final settlement. Concessions were made to defendant by plaintiff; his action for specific performance was continued from time to time without appearance of record by defendant; plaintiff received an -assignment of the lease for the cropping season of 1915, .received the rent for that year, planted a portion of the land to wheat in the fall of 1915, moved thereon about March 1, 1916, and at the time of the trial, was in possession of the farm and had planted about ninety acres to corn, and had the rest of the tillable land prepared for [295] cropping. The title at this time was perfect in the plaintiff, and nothing remained to conclude the sale except the payment of the balance of $4,000 due on the purchase price. While defendant is not entitled to a decree requiring plaintiff to execute a note for $4,000 and secure the payment thereof by mortgage upon the premises in question, nevertheless, considering the concessions granted defendant, plaintiff’s acquiescence in the delay, and all other facts and circumstances surrounding the transaction, and the position in which the parties have voluntarily placed themselves, we are reluctant to reverse this case without remanding the same for further proceedings in the court below, in harmony with the views herein expressed. The note executed by the clerk of the district court as a commissioner appointed by the court should be canceled and the mortgage released, and plaintiff given an opportunity to execute a note and mortgage for $4,000, due March 1, 1925, or, at his option, to have a cancellation of the $8,500 mortgage, and permission to execute a new note and mortgage for $12,500 due March 1, 1925, the amount found due plaintiff as damages to be paid by defendant, upon execution of note and mortgage. It will be observed that plaintiff’s wife did not sign the contract, nor is she made a party to this suit. Should plaintiff fail or refuse to execute note and mortgage in accordance with an election to be made by him, as above suggested, within a reasonable time to be fixed by the court, plaintiff’s petition and defendant’s cross-petition shall be dismissed by • the court, and defendant left to pursue any other remedy he may have to enforce payment of the balance due on the purchase price of said land, the court to make such decree or apportionment of the costs as shall appear to be just and equitable. — Reversed and remanded. Gaynor, C. J., Weaver and Preston, JJ., concur.