McCracken v. Bay City Land Co.

BENSON, J.

There are two questions presented upon the appeal. The plaintiff bases his right of recovery, first, upon the theory that early in September he tendered the balance due upon his contract and demanded his deed, but that defendant replied that it would be unable to deliver the same, for the reason that it could not, prior to November 30th, secure a release of the land from the lien of a certain trust deed. The question raised upon this proposition is: Was there such a tender of payment of the purchase price as would put defendant in default by failure to make conveyance? •

1. The second proposition upon which plaintiff relies is that the agreement to clear the lots, grade the street, and lay the water-main was a dependent covenant, a failure to perform which would entitle him to rescind. Considering these in the order thus indicated, we note that the evidence of a tender of the purchase price is as follows: On September 12, 1917, plaintiff wrote and mailed to defendant a letter in these words:

*466 “Salem, Ore. 9/12,1917.

“Bay City Land Co.,

“Portland, Ore.

“Gentlemen:

“I will be glad if yon will please inform me bow near finished my payments are as I have received no notice for Sept. If I am not mistaken there is not much more to pay and I’m anxious to get my deed and have it done with. Hope to hear soon and that yonr part of the contract is also fulfilled so I may have clear title. Let me hear at once and also if there is any chance to sell it and oblige,

“Respectfully,

“Lee McCracken,

“2610 Maple Ave., Salem, Ore.”

The plaintiff testifies that he wrote another letter to defendant, a few days later, in which he inquired as to whether or not the clearing and street grading had been done, and the water-main laid, and also, “that I was ready to make a payment or to complete payments on the property and finish, up the payments when I found out what it was.”

This constitutes all of the evidence of a tender. It will be observed that no specific sum is mentioned, and the letter does not offer to pay any sum whatever. The requirements of a sufficient tender in this respect are stated in Hunt on Tender, Section 238, thus:

“In making a tender of money, whether the actual production be dispensed with or not, the tenderer must name the sum which he tenders. Thus, where the person who made the tender had two bank notes twisted up in his hand, enclosing four sovereigns and 19s, 8d, in change, making the precise sum intended to be paid, and the party, without opening it, informed the creditor of the amount, the tender was held good. Best, C. J., said: ‘If he had not mentioned the amount, I think it would not have done.’ So, in another case, a debtor in passing his creditor said: ‘I want to tender *467 you this money, * * for labor you have done me,’ at the same time holding in his hand a sum equal to the indebtedness, but named no sum, it was held insufficient.”

The rule is stated in 38 Cyc. 137, thus:

“Nothing short of an offer of everything that the creditor is entitled to receive is sufficient and a debtor must at his peril tender the entire sum due, including all necessary expenses incurred or damages suffered by the creditor by reason of the default of the debtor, and a mistake in tendering an amount less than the sum due is the misfortune of the tenderer, and the position of the parties remains the same as if no tender had been made. Furthermore, the tenderer must name the sum which he wishes to tender, unless perhaps the exact sum and interest is tendered so that the tenderee may easily satisfy himself that the amount is correct. Where the amount due is within the exclusive knowledge of the creditor, and the creditor on demand neglects or refuses to indicate the correct amount that is due, the debtor may tender so much as he thinks is justly due, and if less than the true amount, the tender nevertheless will he good; and the same rule obtains where the tenderee deprives the tenderer of the means'of ascertaining the exact amount due. ’ ’

The evidence falls far short of these requirements, and we conclude, therefore, that the plaintiff’s first contention must fail.

2. Plaintiff’s second proposition is, that defendant’s promise to clear the lots, grade the street, and lay a water-main, is a dependent covenant, for the breach of which he is entitled to a rescission, and this is the conclusion reached by the trial court. The distinction between dependent and independent covenants is sometimes very shadowy, and frequently is difficult to determine. There is a dearth of authority *468 upon the specific question as to the right of a vendee to rescind an executory contract for the sale of land upon the vendor’s breach of covenant to make improvements, hut we have carefully - examined all to which our attention has been directed. The case of Crampton v. McLaughlin Realty Co., 51 Wash. 525 ( 99 Pac. 586 , 21 L. R. A. (N. S.) 823), appears to he a leading case upon the subject and contains a very full discussion of the problems involved, citing, and quoting copiously, from all of the available cases bearing upon the subject. This was a case wherein the plaintiff had entered into a contract with the defendant, whereby he agreed to purchase certain real property for the sum of $2,400 in installments, the first payment to be made October 22, 1906, and the last falling due on October 22, 1908. The agreement contained certain building restrictions, and the following covenant:

“Said first parties agree that they will, free of cost to said second party, put in the necessary cement sidewalks, sewer and water-mains and pave the abutting street, within one year from the date hereof.”

Plaintiffs made the required payments until the time arrived for making one which became due on October 22, 1907, which was not made, and on October 23d, notified defendants that they elected to rescind the contract for failure on the part of the defendants to put in the cement sidewalks, sewer and water-mains, and pave the abutting streets within one year from the date of the contract, which had been executed on October 22, 1906. The action was then instituted to recover the installments paid. There were other issues raised by the pleadings, but Mr. Chief Justice Eudkin, in the opinion, says:

*469 “Regardless of the merits of these respective contentions, we think there are other reasons why the judgment should be affirmed. The numerous covenants contained in this contract, aside from the covenant to convey and the covenant to pay the purchase price, are wholly independent of each other, and the only remedy for a breach of such covenants is an action for damages. It is sometimes difficult to determine whether covenants are dependent or independent, but we think the covenants contained in this contract in relation to building restrictions, improvements, etc., are clearly of the latter class.”

In support of this conclusion, the opinion quotes from the following cases which support the same fully: 9 Cyc. 642; Hunt v. Tibbetts, 70 Me. 221 ; Turner v. Mellier, 59 Mo. 526 ; American Emigrant Co. v. County of Adams, 100 U. S. 61 ( 25 L. Ed. 563 , see, also, Rose’s U. S. Notes); Tipton v. Feitner, 20 N. Y. 423 ; Front Street etc. R. Co. v. Butler, 50 Cal. 574 .

In American Emigrant Co. v. County of Adams, 100 U. S. 61 ( 25 L. Ed. 563 ), the rule is stated thus:

“The allegations of the bill to the effect that the Emigrant Company has not fulfilled its engagements with respect to the drainage and settlement of the land, rest in covenant merely, and afford no ground for avoiding the contract. Where covenants are mutual and dependent, the failure of one party to perform absolves the other and authorizes him to rescind the contract. But here the contract was largely carried into execution soon after its inception. The engagements of the appellants to introduce settlers and the like were to be performed in the future; and their performance was not a condition, but, as before stated, rested in' covenant. In case of a breach, they would lay the foundation of an action, but nothing more. ’ ’

In the State of Washington, the case of Crampton v. McLaughlin Realty Co., 51 Wash. 525 ( 99 Pac. 586 , *470 21 L. R. A. (N. S.) 823), has been followed in a number of cases. In Toellner v. McGinnis, 55 Wash. 430 ( 104 Pac. 641 , 24 L. R. A. (N. S.) 1082), Mr. Justice Chadwick says:

“ Crampton v. McLaughlin Realty Company has nothing in common with this case. The covenants in that contract were clearly independent under any rule.”

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And again, in Spokane Canal Co. v. Coffman, 54 Wash. 645, 648 ( 103 Pac. 1106, 1107 ), Mr. Justice Mount says:

“In Crampton v. McLaughlin Realty Co., 51 Wash. 525 ( 99 Pac. 586 , 21 L. R. A. (N. S.) 823), we held that covenants to ,put in sidewalks and other improvements contained in a contract for the sale of real estate were independent covenants. The rule in that case is decisive of this. .In this case the promise to pay the purchase price of the land did not depend upon the promise to furnish water at stated times. The latter promise is to be performed after the purchase price is fully paid. It was an independent continuing contract. The fact that the covenant to furnish water was to be performed before all the payments were made was a mere coincidence. The payments were not made dependent thereon.”

Counsel for plaintiff contends that this court is committed to a contrary doctrine by the views expressed in Miller v. Beck, 72 Or. 140 ( 142 Pac. 603 ); Potter Realty Co. v. Derby, 75 Or. 563 ( 147 Pac. 548 ), and Stewart v. Mann, 85 Or. 68 ( 165 Pac. 590, 1169 ). We shall therefore give special attention to these cases.

Miller v. Beck, 72 Or. 140 ( 142 Pac. 603 ), was a case wherein there was a contract for the sale of:

“All of tracts numbered twenty-four (24) and twenty-five (25) of the Dimick Homestead Tracts, which said tracts are duly recorded in the office of the. county recorder of said'Marion County, Oregon; also *471 a right of way for road purposes along tracts 32 and 33 of said Dimick Homestead Tracts, until such time as the twenty-foot road along the front of said tracts numbered 24 and 25 shall have been opened.”

The right of way along the front of tracts 32 and 33 was subsequently closed, and the vendor refused to open one along the front of tracts 24 and 25. Upon these facts this court held that the vendee was entitled to rescind, saying, by Mr. Justice Burnett:

“Miller engaged to buy, and the company obligated itself to sell, not only the two lots, but also ‘a right of way for road purposes along tracts 32 and 33 until * * such time as the twenty-foot road along the front of tracts numbered 24 and 25 shall have been opened.’ ”

It was held that these facts justified rescission. A mere statement of the facts differentiates it from the instant case.

Potter Realty Co. v. Derby, 75 Or. 563 ( 147 Pac. 548 ), was a case wherein the plaintiff had undertaken to create a summer resort city. It was an action brought to recover delinquent installments of the purchase price. Prom the contract itself, it appears that the improvement of the entire town site, to the extent of $100,000 per year until the very extensive improvements therein described should have been fully completed, was the principal consideration. The record discloses that no such improvements had been made, that the only market value that the land had or could have, depended entirely upon the completion of such improvements, and that the plaintiff was an insolvent company, totally unable to perform. There was no question of rescission in the case, and the decision was based upon the language of the contract itself, wherein it was agreed that in the event of default in payment of any installment of the purchase price all payments *472 theretofore made should be forfeited to the seller and the contract should become void as to both parties without notice. This court simply held both parties to the exact terms of the contract as thus expressed, permitting the seller to keep all the payments it had received, hut denying it the right to collect any more, and so the case does not decide the question which now confronts us.

The case of Stewart v. Mann, 85 Or. 68 ( 165 Pac. 590, 1169 ), does not in any manner discuss the problem which we are considering. The situation there was one wherein the vendee insisted, not upon a rescission, but upon an abatement in the purchase price because the fruit trees upon the land had not been cared for as stipulated in the contract, which demand was answered, by the assignee of the original vendor, by returning to the purchaser the payments received subsequent to the assignment, and repudiating all obligations under the contract. This court rendered a decree awarding plaintiff a decree for the return of his payments, because the vendor had repudiated the contract. These cases, therefore, are ,of no assistance in the consideration of the present case. The facts here are substantially like those in Crampton v. McLaughlin Realty Co., 51 Wash. 525 ( 99 Pac. 586 , 21 L. R. A. (N. S.) 823), and the evidence discloses that an expenditure of $200 in a very short time would supply the improvements for which the contract calls, and the breach is one that may be readily compensated in dam-, ages. We think it is clearly an instance of an independent covenant, for which there can be no rescission. The decree is reversed, and -one will be entered dismissing the suit. Beversed AND Suit Dismissed.

McBride, C. J., and BueNett and Harris, JJ., concur. >