Wells v. Page

Mr. Justice Bean

delivered the opinion of the court.

The money in dispute was the property of -Gilbert, and was deposited with the bank by him. He is therefore entitled to its return, unless Benson and Hyde have a cause of action against him for default in the performance of the contract. He deposited the money as security for the performance of his contract, to be forfeited only in case of his default, and, whether it be regarded as liquidated damages, as security for actual damages sustained, or as a sum to be forfeited to the vendors-in case of the vendee’s default, is immaterial, unless he is liable for a failure to comply with the contract. It is shown by the record, and is admitted, that none of the selections which Benson and Hyde agreed to sell and convey to Gilbert, and which have not been accepted or paid for by him, had -been approved by the Commissioner of the General Land Office at the time of the renunciation of the contract by Gilbert, nor were any of such selections thereafter approved during the life of the contract, or since, except one for 160 acres in May, 1903. All the other lands were, either not open to selection, or had been abandoned by the selectors, or the selections had been rejected or suspended by the land department, or for some reason not approved, and there is no proof or showing that approvals could or would have been obtained but for the renunciation of the contract by Gilbert, except the mere opinion of Hyde, based on no substantial foundation, and for which he can give no sufficient reason. Of the land included in the contract 4,160 acres were conveyed to Gilbert and paid for, 240 acres were not open to selection and 40 acres were abandoned, leaving 3,840 acres, which it is claimed Gilbert refused to accept. Of this amount, the selection for 1,240 acres was rejected April 10, 1902, and was also included in the general order of November 21, 1902, suspending all *79 selections made by Hyde or in his name. The selection for 1,680 acres was suspended April 22, 1902, and was also included in the general order referred to, and this order, so far as the evidence shows, remains in full force and unrevoked. A selection of C. W. Clarke for 640 acres had been rejected prior to the making of the contract. An appeal was taken from the order of rejection and it was. reversed on March 30, 1903, after the expiration of the time for performance. The selection of Clarke for 120 acres was not approved and the Commissioner called for additional evidence, and the selection for 160 acres was approved May 7, 1903. It thus appears that Benson and Hyde were at no time in a position, during the life of the contract, to require Gilbert to receive and accept the deeds, the delivery of which was made a.condition precedent to the payment by him of the purchase price and necessary to put him in default. They did not own and could not have conveyed or caused to be conveyed the land which they had agreed to sell, and which Gilbert had agreed to purchase and pay for.

1. It is contended, however, that the renunciation of the contract, and the refusal of Gilbert to be bound by it, before the time for performance had expired, excused them from tendering the deeds or showing that they were in a position to complete the performance of the contract. Where either party to a contract gives notice to the other, before the time for performance has arrived, that he will not comply with its terms, the other is relieved from averring or proving tender of performance in an action thereon: 3 Page, Contracts, § 1436. Thus, where a vendor of real estate has title or ability to perform, and the vendee repudiates the contract before the time for performance has arrived, it is not necessary for the vendor to aver a tender or offer to perform in an action for a breach of the contract, because such a step would be but an idle and useless ceremony: 2 Warvelle, Vendors (2 ed.), § 757; North's Admrs. v. Pepper, 21 Wend. 636 ; Johnston v. Johnson, 43 Minn. 5 ( 44 N. W. 668 ).

2. But the waiver by refusal to perform goes only to the formal matter of the presentation or tender of a deed or demand *80 of payment; and a vendor of real estate cannot enforce the contract-.against a vendee who is in default or has repudiated it, unless he himself is in, a condition to perform: Sievers v. Brown, 34 Or. 454 ( 56 Pac. 171 , 45 L. R. A. 642); Hampton v. Speckenagle, 9 Serg. & R. 212 ( 11 Am. Dec. 704 ); Bigler v. Morgan, 77 N. Y. 312 ; Gray v. Smith, 83 Fed. 824 ( 28 C. C. A. 168 ); Mix v. Beach, 46 Ill. 311 ; Wallace v. McLaughlin, 57 Ill. 53 ; Peck v. Brighton Co. 69 Ill. 200 ; Birge v. Bock, 24 Mo. App. 330 . In Sievers v. Brown, 34 Or. 454 (45 L. R. A. 642, 56 Pac. 171 ), the vendee refused to pay the first installment due on the contract, and the court said that his default did not authorize the vendor to declare a forfeiture until he himself was ready and able to convey the premises according to the terms of his bond. Hampton v. Speckenagle, 9. Serg. & R. 212 ( 11 Am. Dec. 704 ), was an action by a vendor to recover damages for the nonperformance by a vendee of a contract to convey real estate which was incumbered in excess of the purchase price at the time the contract was made, but which incumbrances were not disclosed to the vendee. Before the time for performance arrived, the vendee denied having made the contract, and declared that he would not comply therewith. It was held that such renunciation by him excused the vendor from tendering a deed before bringing his action, but that, before he “would be entitled to recover damages, it was incumbent on him to show that it was not (sic) in his power to make a good title. He has averred in his declaration that he was ready to do all things necessary to be done on his part, and that averment cannot be supported, if he was unable to make title. If the incumbrances were of such a nature that the jury might be satisfied from the plaintiffs evidence that he could and would have removed them, had the defendant been willing to accept a conveyance, the case would fall within the principle of McMurtie v. Bergasse, and the plaintiff might recover. But the ability to discharge the incumbrances was a point which lay upon the plaintiff to establish beyond doubt. If he failed there, he could not be entitled to damages; but, if he satisfied the jury on that point, he might recover.”

*81 Bigler v. Morgan, 77 N. Y. 312 , was likewise an action for the breach of an executory contract to exchange lands, and the court, speaking through Mr. Justice Rapallo, says.that, to entitle the vendor “to recover damages for a breach of the contract, he must show that he was ready and willing to deliver such a deed as the contract called for. The refusal of the defendant to perform, although it obviated the necessity of a formal tender of a deed, did not dispense with the necessity of showing that the plaintiff was able, ready and willing to perform; and ordinarily this requires that the deed called for by the contract should be prepared and ready for delivery.” And after alluding to the distinction between an action to rescind a contract and recover back payments made thereon, and one to enforce it and recover damages, the learned justice continues: “However positively a vendee may have refused to perform his contract, and however insufficient the reason assigned for his refusal, he cannot be subjected to damages without showing that he would have received what he contracted for, had he performed.” Gray v. Smith, 83 Fed. 824 ( 28 C. C. A. 168 ), was also an action of like character. The vendor did- not have title to the property which he agreed 'to convey. Before the time for the completion of the contract, the vendee refused to abide by and repudiated it. The vendor claimed that such refusal excused him from showing his ability to perform. This position was thus disposed of by Mr. Justice Gilbert: “It is true that where the vendor of property, before the arrival of the time for the completion of his contract of sale or conveyance, disables himself from performing by disposing of the property to another, the purchaser may at once bring his action, and he need not aver or prove tender of the purchase money upon his part, nor his. ability to carry out the contract; and, where either party to a contract gives notice to the other that he will not comply with its terms, the other is excused from averring or proving a tender of performance. But; in any case of action upon a contract, the elements of the plaintiff’s damage must be certain, and the facts must exist from which it may be deduced that he has suffered loss. One *82 who makes a contract to sell property of which he has no title, nor the certain means of procuring title, presents no facts upon which damage to him may be predicated, if the purchaser withdraws from the contract. The pleadings and the findings in this case leave it uncertain whether the plaintiff could ever have acquired title to the Market street lot. So far as the performance of his contract was concerned, he was in no better attitude than one who has disabled himself from carrying out a contract of sale by selling the property to another.”

We are of the opinion, therefore, that Benson and Hyde are not entitled to the money in dispute, because they have not shown that they were able to perform the contract on their part. Gilbert’s repudiation of the agreement before the time for performance had arrived would probably have excused them from making a formal tender of a deed; but it did not relieve them from showing an ability to comply with the contract, if they intended to put him in default, so as to entitle them to the forfeit money. Affirmed.