Ward v. Warren

Mr. Justice Bean,

after stating the facts in the foregoing terms, delivered the opinion of the court.

1. Fromtheallegationsofthecross-billitappearsthatthe judgment upon which the defendant is now seeking to recover in this State was founded on two promissory.notes given by plaintiffs to her for deferred payments on an ex-ecutory contract for the sale and purchase of land, and that after the rendition of the judgment the defendant exercised the option given her by the contract of rescinding and canceling the same, and reentered into possession of the property, which she subsequently sold to another. It requires no argument to show that it would be mani *105 festly unjust that she should thus rescind the contract, recover possession of and title to the property which she agreed to convey to plaintiffs, and also recover a part of the unpaid purchase money. Such a result forms no part of an ordinary contract, and is opposed to well-established rules of law. The obligation of a vendee to pay the purchase price under an executory contract for the sale of real estate is ordinarily dependent upon performance by the vendor, and the latter’s failure to comply with the contract and to make the required conveyance is a good defense to an action on a promissory note given therefor: Sayre v. Mohney, 30 Or. 238 ( 47 Pac. 197 ); Sayre v. Mohney, 35 Or. 141 ( 56 Pac. 526 ). The respective obligations of the parties to such a contract are mutual and dependent, and neither can require performance by the other until he himself has performed or offers to perform. Where- such a contract is rescinded, the law contemplates the restoration of the parties, as far as possible, to the position they respectively occupied before entering into the agreement: Frink v. Thomas, 20 Or. 265 ( 25 Pac. 717 , 12 L. R. A. 239). The rescission also operates as a failure of consideration for the unpaid purchase money, and the vendor, in exercising his right to cancel and rescind the contract, relinquishes his right thereto : 2 Warville, Vendors (2 ed.), § 916.

2. Neither is the fact that the deferred payments are evidenced by a judgment of any consequence. A judgment is conclusive as to all defenses arising prior to its rendition, for the reason that they either were or might have been litigated in the original case (Black, Judgts. § 970), but it does not conclude a defense which did not exist at the time. Thus, the failure of a vendor’s title is a good defense to an action brought to enforce payment of a judgment obtained upon notes given in part payment of the first installment of the purchase money on a contract to convey land, when the failure occurred after the date of *106 the judgment: Burwell v. Jackson, 9 N. Y. 535 . In the case at bar, likewise, the rescission of the contract and the reentry of the defendant into possession of the property occurred after the rendition of the judgment, and may be pleaded as a defense to an action thereon. It follows that the court was in error in sustaining the demurrer to the cross-bill, and the decree should be reversed, and the cause remanded for such further proceedings as may be proper, not inconsistent with this opinion. Reversed.