Wetherby v. Griswold

Mr. Justice Bean

delivered the opinion of the court.

1. It appears from the record that after the lease was prepared and forwarded by Wetherby for Miss *473 Griswold to sign some question was raised as to the provision for a deed in case of purchase. The United States patent for the land to defendant’s .father, from whom she received a deed, did not mention the right of way or depot grounds of the railroad company. Anent this matter, on October 31, 1905, Wetherbv wrote the defendant’s brother, W. T. Griswold, in part as follows:

“The Patent purports to convey 161.76 acres, about twenty acres of which the O. E. & N. E. E. Go. holds, as station grounds, acquired under the Provs. of the Act of Cong, dated March 3rd, 1875, practically 141.76 conveyed by the Patent, as the E. E. Co. will doubtless continue to occupy above mentioned twenty acres indefinitely. ’ ’

On April 12, 1906, Wetherby wrote the same party in part:

“Cannot entertain any change in terms of lease, as executed by me and transmitted with former letter. * * The lease mentioned described the property subject to E. E. E. of W., as established, constructed and operated over said premises. Later provision, Eight to lessee to receive Warranty deed of said premises, as hereinbefore described ‘Now, as the patent describes the land as Lots 1-2 & 3 in Sec. 7 Tp. 1 N. 6 E. W. M. 161.76/100 acres subject to any vested and accrued water rights, for mining, agricultural, manufacturing or other purposes, A Warranty Deed describing the premises and designated, as Lots 1-2 & 3 in sec. 7, as above described quoting the exception, quoted above will convey the premises, as conveyed by the patent, which is the intention of all parties interested in sale and purchase, contemplated, therefore there is no ground for objection to form of deed mentioned in the lease.”

This correspondence clearly shows that at all times during the negotiations Wetherby knew of the ex *474 istence of the depot grounds. As to the force of his construction of the clause relating to the conveyance in case he elected to purchase the land, we do not deem it necessary to inquire further than as the same, affects the equities which are now prayed for by Wetherby’s representatives. It would at least seem fair to say that Wetherby had put his own construction upon this clause of the option, and, in conformity therewith, the defendant tendered to him a conveyance of the property, which he refused. The option contract contained in the lease set out above was unilateral. This could only be converted into a valid contract of sale binding upon both parties by an unqualified acceptance by the optionee within the time prescribed therein: Friendly v. Elwert, 57 Or. 599 , ( 105 Pac. 404 , 111 Pac. 690 , 112 Pac. 1085 , Ann. Cas. 1913A, 357.)

2, 3. An application to invoke the ’ jurisdiction of a court of equity to decree the specific performance of a contract is addressed to its sound and reasonable discretion, and is granted or rejected according to the circumstances of each case. Such power cannot be invoked as a matter of right in the parties in all cases: 36 Cyc. 548; 2 Story, Equity Juris. (13 ed.),§ 742; Hawkins v. Doe, 60 Or. 437, 446 ( 119 Pac. 754 , Ann. Cas. 1914A, 765). When the ground of the defense is the unfairness of the contract or the hardship of the remedy of specific performance, the court frequently exercises a discretion in the truest sense, since the great variety in the forms of unfairness and of hardships which have arisen for consideration has prevented the establishment of many special rules for the guidance of the courts: 36 Cyc. 551, b. Let us then examine the case at bar from an equitable standpoint. The objection to the title offered to be conveyed by *475 Miss Griswold to Wetherby was made by him on account of the depot grounds upon the premises. The records show that many excursionists visit Multnomah Falls, situated upon the land of the defendant, and in order to accomodate such travel the Oregon Railroad & Navigation Company uses the depot grounds for trainloads of passengers visiting the pleasure resort. The occupancy of the 20-acre tract by the railroad company was notoriously obvious. From the letter of Wetherby it appears beyond question that he knew of the extent of the holdings of the railroad company. It does not appear from the lease or option memorandum that it was the intention of the parties thereto that defendant would obtain the right to the depot grounds of the Oregon Railroad & Navigation Company. This cannot reasonably be presumed. On the other hand, in very general way the writing indicates that there was to be a reservation of the right of the company, but the length, width or total area were not attempted to be stated. Under all the circumstances it was not in consonance with equity and fair dealing for Wetherby to demand an abatement in the purchase price on account of the depot grounds.

4. This rule is stated in 36 Cyc., page 742:

“If the purchaser at the time of entering into the contract was aware of the defect in the vendor’s interest or title, or deficiency in the subject-matter, he is not, on suing for specific performance, entitled to any compensation or abatement of price.”

See, also, Waterman on Specific Performance, section 506. Maupin on Marketable Title (2 ed.), page 197, is authority for a stronger general rule, to the effect that the existence of an open, notorious and visible physical encumbrance upon the estate is not a ground for objection to the title, for the reason that *476 it is presumed that the purchaser was to take subject to such encumbrance. Neither does such encumbrance entitle the purchaser to compensation, nor to an abatement of the purchase money, nor to a conveyance with a covenant against the encumbrance, because it is presumed that in fixing the price the existence of the same was taken into consideration. The last-named rule was applied in a law action in the case of Barnum v. Lockhart, post, p. 528, ( 146 Pac. 975 ). In that opinion Mr. Justice McBride, suggests the following:

“Without reference to authority, it seems reasonable that, where the existence of so palpable a physical easement as a railroad is urged as an objection to the title, the burden of pleading and proof should be upon the purchaser to show that he was, in fact, ignorant of its existence.”

See, also, Desvergers v. Willis, 56 Ga. 515 ( 21 Am. Rep. 289 ); Ashburner v. Sewell, 3 L. R. Ch. Div. 405. The language of Mr. Justice Spencer in Whitbeck v. Cook & Wife, 15 Johns. (N.Y.) 483 ( 8 Am. Dec. 272 ), quoted in Jordan v. Eve, 31 Gratt. (72 Va.), at page 8 of the opinion, is very applicable to this case:

‘ ‘ It must strike the mind with surprise that a person who purchases a farm through which a public road runs at the time of purchase, and had so run long before, who must be presumed to have known of the existence of the road, and who chooses to have it included in his purchase, shall turn around on his grantor and complain that the general covenants in the deed have been broken by the existence of what he saw when he purchased, and what must have enhanced the value of the farm. It is hazarding little to say that such an attempt is unjust and inequitable, and contrary to the universal understanding of both vendors and purchasers. If it could succeed, a floodgate of litiga *477 tion would be opened, and for many years to come this kind of action would abound.”

5. Where the encumbrance upon the real property is an easement which the vendor cannot remove as a matter of right, and it does not appear from the option contract that it was within the contemplation of the parties at the time of making the agreement that the condition of the title would be changed in this respect, the fact that the vendee had full knowledge of the occupancy and right of a third party is a strong reason for applying the general rule that the existence of an open, notorious, and visible encumbrance upon the land constitutes no basis for an objection to the title: Maupin on Marketable Title, 197, and notes. In the present case the controversy relates to the enjoyment of an easement and right openly, and notoriously exercised for a quasi-^vMlio, purpose. It is indeed probable that the depot grounds being located upon the premises were an important factor in inducing Wetherby to attempt to make the purchase. J. M. Griswold offered Wetherby all the title to the land that she had. She therefore did all in her power to comply with his demand. He declined to accept the title tendered, and it is not in furtherance of equity to require the defendant to execute a conveyance with covenants of warranty to real estate which she does not own, and which, according to Wetherby’s construction of the contract, she never intended to sell. Such a decree would tend only to lead to further complications. The plaintiffs are not entitled to equitable relief: Mills v. Van Voorhis, 23 Barb. (N. Y.) 125; Whitney Co. v. Smith, 63 Or. 187, 192 ( 126 Pac. 1000 ).

In an endeavor to arrange the matter equitably, the trial court required the plaintiffs to pay $1,500 in ad *478 dition to the price named in the option, as we understand, contemplating that the parties would accept the same as a settlement. This was not an issue in the case.

The decree of the lower court will therefore be reversed, and one entered in favor of the defendant dismissing the suit; defendant to recover costs.

Reversed.

Mr. Chiee Justice Moore, Mr. Justice Benson and Mr. Justice Harris concur.