Kemmerer v. Title & Trust Co.

HARRIS, J.

Apparently a priffted or typewritten form had been prepared to be used by salesmen; and the form seems to have been drafted on the assumption that in most eases a deposit of $150 would be paid with each application. However, in the instant case the parties probably adapted themselves to the financial situation of the plaintiff and instead of re *142 quiring the payment of the $150 in a lump sum he was permitted to pay this amount as well as the remainder of the price in monthly $10 installments. An examination of the writing discloses that $750 is the purchase price. Every word which refers to the subject at all plainly contemplates the issuance of a contract providing for the payment of the final $600 in monthly installments of $10; and also, the language which was “inserted” in the instrument by the parties permits the plaintiff to make monthly $10 payments “until first payment of $150 is paid.” It is obvious, too, that it cannot be said that the “deposit” mentioned at the end of the instrument meant more than the “first payment of $150.”

1. The plaintiff contends that the writing does not meet the requirements of the statute- of frauds and that “therefore, appellant is entitled to recover money paid thereunder.” While it has been decided in Davis v. Brigham, 56 Or. 41, 47 ( 107 Pac. 961 , Ann. Cas. 1912B, 1340), that the agreement need only be signed by the party charged yet, waiving any conclusion that might be deduced from that precedent, there was nevertheless sufficient part performance to enable the plaintiff to compel specific performance: Johnson v. Puget Mill Company, 28 Wash. 515 ( 68 Pac. 867 ). Moreover, while it is true that the writing is styled an “application,” it is also true that this “application” was accepted by the defendant; for the Title & Trust Company not only accepted ten several payments in addition to the first ten-dollar payment but it also permitted the plaintiff to enter into possession of the lot and cut wood and, as we infer from the record, build a house upon the property.

2. The plaintiff earnestly insists that there was a mutual rescission of the agreement; and this conten *143 tion proceeds upon the theory that the abandonment by the plaintiff was acquiesced in by the defendant and hence resulted in a mutual rescission. If the agreement was mutually rescinded the plaintiff is of course entitled to maintain this action: Maffett v. Oregon & California Ry. Co., 46 Or. 443, 457 ( 80 Pac. 489 ); but it must be remembered, however, that as pointed out in Stennick v. J. K. Lumber Co., 85 Or. 444, 478 ( 161 Pac. 97 , 166 Pac. 951 )— " declaring a forfeiture for breach of the conditions of a contract is not rescission of the contract. It puts an end to the contract and extinguishes it in pursuance to its terms just as performance extinguishes it. The act of taking possession under a forfeiture clause is not an act of rescission or in avoidance of the contract, but the assertion of a right growing out of it”: 13 C. J. 608.

The parties had a right to insert the forfeiture clause in the writing and since the plaintiff does not claim that the stipulation involves a penalty as distinguished from liquidated damages, the defendant is entitled to the benefit of the stipulation for a forfeiture and can retain the money paid to it, unless it can be said that the defendant has lost such benefit by failing properly to exercise its right: Snider v. Lehnherr, 5 Or. 386 , 390; Holbrook v. Investment Co., 30 Or. 259, 265 ( 47 Pac. 920 ); Graham v. Merchant, 43 Or. 294, 304 ( 72 Pac. 1088 ); Mitchell v. Hughes, 80 Or. 574, 588 ( 157 Pac. 965 ).

3-5. The language found in the forfeiture provision necessarily determines the right of forfeiture. A stipulation providing for the forfeiture of payments may be self-executing: Maffett v. Oregon & California Ry. Co., 46 Or. 443, 454 ( 80 Pac. 489 ); Gray v. Pelton, 67 Or. 239, 243 ( 135 Pac. 755 ); Potter *144 Realty Co. v. Derby, 75 Or. 563, 572 ( 147 Pac. 548 ); T. B. Potter Realty Co. v. Breitling, 79 Or. 293, 301 ( 155 Pac. 179 ); or the stipulation may do no more than merely to confer an option upon the vendor, and in that event a default in paying an installment does not of itself work a forfeiture, but there must be a declaration of forfeiture or some equivalent act or conduct: Graham v. Merchant, 43 Or. 294, 304 ( 72 Pac. 1088 ); Higinbotham v. Frock, 48 Or. 129, 131 ( 83 Pac. 536 , 120 Am. St. Rep. 796 ); 13 C. J. 608. A provision for the forfeiture of payments will not be construed to be self-executing unless unequivocal language is used showing plainly and clearly that such was the intention of the parties: 39 Cyc. 1384. The instrument involved in the instant ease does not contain a self-executing forfeiture clause; nor do we understand that the defendant claims that a default in the payment of a monthly installment ipso facto works a forfeiture.

In the writing now being examined it is said that “time is the essence of this agreement.” While it is true that a blank space appears before the word “days,” it is nevertheless obvious that the parties understood that Kemmerer was to make the “first payment of $150” in monthly installments of $10 and that they intended that time was to be of the essence of the agreement to pay such monthly installments. As already stated, the word “deposit” manifestly includes no more than the “first payment of $150.” It must be noted that the writing does not provide for the forfeiture of any moneys except the “deposit”; and it must also be remembered that the writing contemplates that when the “first payment of $150” is made a contract is to be issued in lieu of the “application receipt,” and the remaining $600 of the *145 purchase price is to be paid in monthly installments “in accordance with the terms” of the contract to be issued. The record is silent as to the terms of the contract ‘ ‘ to be issued. ” In other words, the purchase price of $750 is payable in part in accordance with the “application receipt” and in part in accordance with the terms of a contract to be issued. ' The first $150 is payable according to the terms of the “receipt” and the final $600 in accordance with the contract to be issued. Although the final sum of $600 was to be paid monthly yet it was to be paid in accordance with the terms, not of the application receipt, but of a contract not yet issued; and although the “receipt” states that the final $600 is payable in $10 monthly installments nevertheless the duty to commence such payments does not arise until the payment of the first $150 and the issuance of the contract.

6. The right of the defendant to forfeit the “deposit” depends upon the failure of the purchaser “to comply with the terms” of the application; and therefore, while the writing is not easy to construe, it is our opinion that the $140 could not be forfeited except upon default in the payment of the remaining installment due on the “first payment of $150.” Although time was made of the essence of the contract, nevertheless the Title & Trust Company waived strict compliance with the terms of the agreement and therefore unless it can be said that Kemmerer waived the right to notice, the Title & Trust Company could not successfully claim a forfeiture of payments made to it, without first notifying the purchaser that it intended to claim a forfeiture unless payment was made within a reasonable time: 39 Cyc. 1382, 1384. It must be remembered that the time for the payment of the *146 final installment of the purchase price had not yet arrived and since the instant case involves only the failure to make one or more intermediate payments it is to be distinguished from all those cases which involve a final installment and require the tender of a deed: Reese v. Westfield, 56 Wash. 415 ( 105 Pac. 837 , 28 L. R. A. (N. S.) 956); 39 Cyc. 1376.

7. The plaintiff abandoned the contract: 39 Cyc. 1353. The letter written by Kemmerer on February 7, 1914, was equivalent to saying to the Title & Trust Company: “I abandon the contract and I waive and surrender whatever right I had to insist on additional time or notice of your intention to terminate the contract; notice to me would be an idle ceremony, and since I do not require notice, you may terminate the contract,without previous notice.” The law does not ordinarily require the doing of a vain thing: Clarno v. Grayson, 30 Or. 111, 126 ( 46 Pac. 426 ). Kemmerer waived and surrendered the right to notice: Cummings v. Rogers, 36 Minn. 317 ( 30 N. W. 892 ); 39 Cyc. 1385; the defendant promptly exercised its right; and there was" a termination as distinguished from a pure rescission of the contract: Stennick v. J. K. Lumber Co., 85 Or. 444, 478 ( 161 Pac. 97 , 166 Pac. 951 ); 13 C. J. 608. See, also, Kennedy v. Embry, 72 Tex. 387 ( 10 S. W. 88 ); Dunlap v. Green, 60 Fed. 242 ( 8 C. C. A. 600 ); 39 Cyc. 1384.

The judgment is affirmed. Affirmed, 'i McBride, C. J., and Burnett and Benson, JJ., concur.