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APPEAL by defendants from a decree of the District Court for Emmet County (Lee, J.) in favor of plaintiff in an action brought to cancel a written contract for the sale and exchange of certain land. Affirmed. The facts are stated in the opinion of the court.
1 Mr. C. W. Crim for appellants. Messrs. Morse & Kennedy, for appellee:
Plaintiff is entitled to rescind and cancel the contract because of lack of title and defects therein.
Primm v. Wise, 126 Iowa, 529, 102 N. W. 427; Hopwood v. Corbin, 63 Iowa, 218, 18 N. W. 911; Clark v. Weis, 87 Ill. 438, 29 Am. Rep. 60; Tague v. McColm, 145 Iowa, 179, 123 N. W. 960; 39 Cyc. 1429; Mulholland's Estate, 224 Pa. 536, 132 Am. St. Rep. 791, 73 Atl. 932; Smith v. Detroit & D. Gold Min. Co. 17 S. D. 413, 97 N. W. 17; Owen v. Pomona Land & Water Co. 131 Cal. 530, 63 Pac. 850, 64 Pac. 253; Read v. Loftus, 82 Kan. 485, 31 L.R.A. (N.S.) 457, 108 Pac. 850; Bales v. Williamson, 128 Iowa, 127, 103 N. W. 150; Martin v. Roberts, 127 Iowa, 218, 102 N. W. 1126.
Plaintiff is entitled to recover for improvements and expenditures because of defendants' failure to furnish title.
39 Cyc. 1400, 1440, 1638; Chabot v. Winter Park Co. 34 Fla. 258, 43 Am. St. Rep. 193, 15 So. 756; Erickson v. Bennet, 39 Minn. 326, 40 N. W. 167; Perry v. Boyd, 126 Ala. 162, 85 Am. St. Rep. 17, 28 So. 711; Bryant v. Boothe, 30 Ala. 311, 68 Am. Dec. 117; Read v. Loftus, 82 Kan. 485, 31 L.R.A. (N.S.) 457, 108 Pac. 850; Richardson v. M'Kinson, Litt. Sel. Cas. (Ky.) 320, 12 Am. Dec. 308; Edwin v. Hadley, 4 Litt. (Ky.) 346, 14 Am. Dec. 140; Kirkpatrick v. Downing, 58 Mo. 32, 17 Am. Rep. 678; Thomas v. Evans, 105 N. Y. 601, 59 Am. Rep. 519, 12 N. E. 571; Lawson v. Vernon, 38 Wash. 422, 107 Am. St. Rep. 880, 80 Pac. 559; Isaacs v. Bardon, 114 Wis. 142, 89 N. W. 913; Turner v. Reynolds, 81 Cal. 214, 22 Pac. 546; Burks v. Davies, 20 Am. St. Rep. 213, note.
The institution of a suit to rescind a contract is in itself a sufficient notice of the plaintiff's election to rescind or disaffirm the transaction, and where this course is taken no previous notice is required.
2 Black, Rescission & Cancellation, § 576; Elliott v. Boaz, 9 Ala. 772; Hartwig v. Clark, 138 Cal. 668, 72 Pac. 149; California Farm & Fruit Co. v. Schippa-Pietra, 151 Cal. 732, 91 Pac. 593; Harding v. Olson, 177 Ill. 298, 52 N.
E. 482; Herbert v. Stanford, 12 Ind. 503; Dubois v. Xiques, 14 La. Ann. 430; Parker v. Simpson, 180 Mass. 334, 62 N. E. 401; Knappen v. Freeman, 47 Minn. 491, 50 N. W. 533; Hamilton Brown Shoe Co. v. Milliken, 62 Neb. 116, 86 N. W. 913; McGowan v. Blake, 134 App. Div. 165, 118 N. Y. Supp. 905; Sneve v. Schwartz, 25 N. D. 287, 114 N. W. 348; Kirby v. Harrison, 2 Ohio St. 326, 59 Am. Dec. 677; Davis v. Ross, Tenn. 50 S. W. 650; Miller v. Horn, Tex. Civ. App., 149 S. W. 769; Angel v. Columbia Canal Co. 69 Wash. 550, 125 Pac. 766; Drovers' Live Stock Commission Co. v. Charles Wolff Packing Co. 74 Kan. 330, 86 Pac. 128, 89 Pac. 465; Nelson v. Carlson, 54 Minn. 90, 55 N. W. 821; Higby v. Whittaker, 8 Ohio, 198; Mosier v. Walter, 17 Okla. 305, 87 Pac. 877.
Gaynor, J., delivered the opinion of the court:
On the 7th day of November, 1913, plaintiff and defendants entered into a written contract, by the terms of which the plaintiff agreed to purchase from the defendants certain land in Emmet county, consisting of 320 acres, for the sum of $32,000, to be paid for as follows: By delivering to the defendants a good and sufficient warranty deed to 160 acres in Aurora county, South Dakota, free and clear of all liens and encumbrances, except a first mortgage of $2,000, and by executing and delivering to the defendants a mortgage in the sum of $22,000 on the land purchased from the defendants; both parties agreeing to furnish abstracts showing good and merchantable title to each of their respective properties.
Some time after the contract was entered into plaintiff took possession of the land in Emmet county. and defendants of the land in Aurora county, and each held possession up to the time of the entry of the decree in this case. After the making of the contract and before plaintiff took possession of the Emmet county land, the defendants sub
Iowa, -, 170 N. W. 790.)
mitted to plaintiff an abstract of title from which it appeared that the title to the Emmet county land was not in the defendants; that there was a $9,000 mortgage on the land, and there were other defects in the title. To induce plaintiff to take possession of the land in Emmet county and to surrender to the defendants the land in Aurora county, the defendants promised orally to procure perfect title in themselves and to remove all liens and cure all defects at once. The plaintiff took The plaintiff took possession of the Emmet county land and surrendered to the defendants the Aurora county land in reliance on this promise.
It is reasonably certain from the record that the exchange of possession was brought about by these promises and plaintiff's reliance thereon. From time to time thereafter these promises were renewed by the defendants, but never fulfilled. Plaintiff was at all times ready, able, and willing to perform the contract on his part whenever defendants performed their part of the agreement. The $22,000 mortgage could not be made until the title to the land purchased was in the plaintiff. At the time the contract was made plaintiff had no knowledge of the fact that the defendants were not the owners of the land, or that it was encumbered, and it was the understanding of both parties that the deal was to be closed on the 1st day of March, 1914. Nothing was said about the title to the land in the contract, but each agreed to furnish the other an abstract showing good and merchantable title.
On the 24th day of March, 1916, this action was brought in equity to cancel the contract, and to restore the parties to the same position they were before the contract was made. A decree was entered for the plaintiff, canceling the contract, and directing each party to surrender to the other the land that was the subject of the contract. No deeds. had been exchanged to the lands.
It was further found by the court
that the plaintiff, relying upon the promise of the defendants to convey to him a good and merchantable title, unencumbered, placed improvements upon the Emmet county land, while he was in possession, and incurred other expenses. accounting was had between the parties, and in this accounting the use of the land by the plaintiff during the years he was in possession was taken into consideration. The fair rental value of the Aurora county land was also considered and charged to the defendants. The improvements put upon the land by the plaintiff were shown and considered, and on final adjustment the court found that the use of the Emmet county land fairly compensated the plaintiff for the improvements put upon the land and the rental received by the defendants for the Aurora county land. A balance was struck, leaving nothing due either upon these matters.
The defendants appeal, and claim that the court erred in canceling the contract, and erred in allowing anything to the plaintiff for improvements upon the land while he was in possession.
So far as this record shows, plaintiff had perfect title to the land in Aurora county. At the time he surrendered possession to the defendants and took possession of the Emmet county land he did so with the distinct understanding that defendants would perfect title and be ready to consummate the contract in accordance with its terms on the 1st of March, 1914, and that an abstract would be furnished him showing good and merchantable title on that date. It appears, however, that some time before the 1st of March defendants did furnish the plaintiff with an abstract. This abstract showed upon its face that the defendants did not have title to the land, and that it was largely encumbered. This abstract was examined by counsel for the plaintiff and returned to the defendants on or about April 3, 1914, with objections.
Now, it may be said that, not
time by returning the abstract with his objections. It appears, however, that after the abstract, with objections, was received, the defendants never returned the same to the plaintiff, and never thereafter tendered to the plaintiff, or offered the plaintiff, any abstract showing good and merchantable title; further, that the defendants never did have a good and merchantable title to this land, either at the time the contract was made or at the time this action was begun.
It may be conceded that, when the plaintiff returned this abstract to the defendants, with his objections, he impliedly consented not to repudiate the contract on account of the defects, but this was because of defentants' promise to immediately remedy the defects. This did not release defendants from their contractual duty to perform within a reasonable time. Where no time is fixed in the con
Waiver of date for abstract of title-effect.
tract or by agreement of the parties reasonable time. for the doing, the law requires it to be done within a reasonable time. The defendants having agreed in their contract to convey this land to the plaintiff for a consideration named, the consideration named could not become due until after defendVendor and pur- ants had performed consideration all conditions upon which their right to the consideration rested. They could not have insisted on performance, and no duty to tender a performance rested on the plaintiff until the conditions precedent to the duty had been fully complied with by the defendants. As a condition precedent to the duty of the plaintiff to pay, there was the duty
of the defendants to present and tender to the plaintiff that which they had agreed to give him. They had agreed to furnish the plaintiff an abstract showing good and merchantable title. Until this was done, no obligation rested
on the plaintiff to tender of perform or tender performance of his agreement to pay. Defendants failed to perform on the day stipulated, and, assuming that plaintiff waived performance on that day and consented to further time in which to perform, this did not not waive performance at some time, and did not extend the time for performance beyond a reasonable time. This action was not commenced until more than two years after the time when defendants should have performed, and the waiver of performance on that day extended performance only for a reasonable time. Two years was surely a reasonable time. No performance was made or tendered by defendants. Plaintiff's right to rescind, therefore,
was perfect at the failure to furtime this action was nish abstract of commenced. Even
on the trial, no tender of performance was made, or excuse offered for failure to perform. The fact is that defendants were not able to perform. The court rightly decreed that the contract should be put at an end; that the plaintiff should be no longer bound by the contract.
The facts in this case bring it within elementary law. No authorities need be cited to support our conclusion.
As to the proposition involved in the accounting, we have to say our attention is not called to any error committed in the computation, and it allowance for seems equitable and just, under the record made, and the decree in this respect must stand.
On the whole record, we think the judgment of the court was right, and it is affirmed.
Ladd, Ch. J., and Salinger and Stevens, JJ., concur.
Time for performance of contract for sale or exchange of land where time fixed by contract has been waived.
I. Introductory, 815. II. General rule, 815.
III. Necessity and effect of notice of rescission, 822.
IV. What constitutes reasonable time, 826.
The present note includes only cases discussing the time for completion where the time fixed for the completion of the contract for the sale or exchange of lands has been waived, delayed, or extended. All cases wherein it appears that the time set for the payment of the instalments of the consideration of such a contract has been waived, delayed, or extended have been excluded, except a few wherein the time for the completion of the contract was the real question involved.
11. General rule.
After a waiver, extension, or delay of the time set for the performance of a contract for the sale or exchange of land, a party is entitled to a reasonable time within which to perform his part of the agreement.
Arkansas.-Mays v. Blair (1915) 120 Ark. 69, 179 S. W. 331.
Georgia.-Taylor v. Baldwin (1859) 27 Ga. 438, 73 Am. Dec. 736.
Iowa.-Van Vranken v. Cedar Rapids & M. R. R. Co. (1880) 55 Iowa, 135, 5 N. W. 197, 7 N. W. 504; Hawes v. Swanzey (1904) 123 Iowa, 51, 98 N. W. 586; Bales v. Williamson (1905) 128 Iowa, 127, 103 N. W. 150; Lewis v. Woodbine Sav. Bank (1917) Iowa, 165 N. W. 410. And see CARROLL V. MUNDY (reported herewith) ante,
Missouri. St. Clair v. Hellweg (1913) 173 Mo. App. 660, 159 S. W. 17. Pennsylvania. Irvin v. Bleakley (1870) 67 Pa. 24; Hatton v. Johnson (1876) 83 Pa. 219; Moore's Estate (1899) 8 Pa. Dist. R. 84, affirmed in (1899) 191 Pa. 600, 43 Atl. 474; Hausman v. Johnson (1907) 32 Pa. Super. Ct. 339.
Vermont. Campbell v. Worthington (1834) 6 Vt. 448.
Washington. Opsjon v. Engebo (1913) 73 Wash. 324, 131 Pac. 1146. West Virginia.-Cosby v. Honaker (1905) 57 W. Va. 512, 50 S. E. 610. England. Ex parte Gardiner (1841) 4 Younge & C. Exch. 503, 10 L. J. Exch. in Eq. N. S. 46; Hatten v. Russell (1888) L. R. 38 Ch. Div. 334, 57 L. J. Ch. N. S. 425, 58 L. T. N. S. 271, 36 Week. Rep. 317. Canada. Foster Anderson (1907) 15 Ont. L. Rep. 362, affirmed in (1908) 16 Ont. L. Rep. 565, which is affirmed in (1909) 42 Can. S. C. 251; Norman v. McMurray (1913) 10 D.L.R. 757, 4 Ont. Week. N. 1256, 24 Ont. Week. Rep. 532.
Thus, in Taylor v. Baldwin (Ga.) supra, it appeared that one of the defendants contracted to convey to one of the plaintiffs the title to a lot of land on payment of the balance of the purchase money on a day certain. The vendee thereupon went into possession. Subsequently, he sold his interest to the other plaintiff, who went into possession. The defendant then sold the land to his codefendant. Three years after the entering into the agreement, an action of ejectment was instituted against the assignee of the original vendee. The original vendee thereupon tendered the balance of the purchase money, and demanded a conveyance of the lot of land, which was refused. In a suit instituted for specific performance of the contract for an injunction enjoining the ejectment proceeding and other relief, it was held that not only the bond did not make time of the essence of the contract, but the act of the parties showed that they did not consider it of the essence, and that therefore plaintiffs were entitled to a reasonable time within which to pay the purchase money.
In Mays v. Blair (Ark.) supra, an action for the recovery of part of the purchase price, it appeared that on the
day set for the completion of the contract the parties agreed to change the contract, and it was further agreed that the vendor was to proceed with the perfection of the title. The court, after holding that time was not of the essence of the contract, decreed that the complaint be dismissed unless the complainant was ready to complete his contract, and that the defendant should be given a reasonable time to perfect his title.
In Lewis v. Woodbine Sav. Bank (1917) Iowa, - 165 N. W. 410, it appeared that a contract was entered into for the exchange of land on a day certain. At the time fixed neither party was ready to perform. A few days later both parties undertook to perform. The plaintiff objected to the title of the defendant, who undertook to perfect the same. Thereafter the plaintiff instituted an action to recover the money paid under the contract. It was held that, time not being of the essence of the contract, the defendant was entitled to a reasonable time in which to perfect his title.
In Bales v. Williamson (1905) 128 Iowa, 127, 103 N. W. 150, it appeared that the performance of a contract to convey a tract of land was to be made on a day certain. Time was made the essence of the contract. An abstract of title was furnished to the plaintiff prior to the date fixed, but was objected to. After the date set for performance, another was delivered. This abstract was submitted to the plaintiff's attorney, who advised that an action to quiet title to the tract should be instituted by the defendants to remedy the defect in the abstract. This was immediately done, and the defendants procured a decree several months later. Prior to the procuring of the decree quieting title, the plaintiff instituted a proceeding to rescind the contract. The court held that the plaintiff, having waived performance on the day fixed, and having advised the procuring of a decree to quiet title, and the defendants having proceeded with due diligence, could not then be heard to demand the performance of the contract on the day set.
In Hawes v. Swanzey (1904) 123
Iowa, 51, 98 N. W. 586, it appeared that a contract for the sale of land was entered into between the plaintiff as vendor, and the defendants as vendees. At the time set for performance the plaintiff had a defective title, which he proceeded to cure. Several months later, and the day after the plaintiff cured his title, the defendants served a written notice on the plaintiff that they rescinded the contract. In a proceeding to enforce specific performance, the defendants set up their rescission of the contract, and demanded the return of the advance payment. The court held that, in view of the fact that the defendants had acquiesced in the delay until the title was perfected, equity would not allow them to assign the delay as an excuse from performing on their part.
In Van Vranken v. Cedar Rapids & M. R. Co. (1880) 55 Iowa, 135, 5 N. W. 197, it appeared that the sole heir of an assignee of a contract to purchase land obtained an extension of time to pay the instalments due, on consideration of his paying a higher rate of interest than that provided for in the original contract, and did not pay on that day, but several months later. It was held that the extension of time amounted to a new contract, and the provisions of the old contract which made time of the essence were not applicable. The court said: "Under the original contract the times of payment of the purchase money of the land were made 'of the essence of the contract.' Under that contract, a failure to pay at the time specified would forfeit plaintiff's right to enforce it. But after default as to all the annual payments, on the 29th of August, 1872, a new contract as to the time of payments was entered into, and witnessed by the memorandum indorsed upon the face of the instrument. This new contract extended the times of payment to January 20, 1873. It was based upon the consideration of the increase of interest to 10 per centum instead of 6, and interest at the higher rate was accordingly, then and afterward, paid. It cannot be claimed that after the