Allen v. Angus

¶1Reversed February 17, 1914.

¶2On the Merits.

¶3(138 Pac. 1074.)

¶4delivered the opinion of the court.

¶5This is a snit for specific performance of a contract for the exchange of certain real estate. The contract, omitting the description of the property, is in the following words:

“This agreement, made in duplicate, this 8th day of July, 1912, by and between Mary Coburn Allen and Wilbur B. Allen, husband and wife, of Hood River, Oregon, first parties, and F. W. Angus and Grace E. *496Angus, husband and wife, of Hood River, Oregon, second parties, witnesseth that, for and in consideration of the mutual covenants hereinafter mentioned, first parties have sold and do hereby agree to sell and convey to second parties two certain parcels of land situated in the county of Hood River, State of Oregon, described as follows, to wit: … The property as above described shall be conveyed to second parties free from all encumbrance except one certain mortgage in the sum of $6,000.00 dated December 28, 1910, with interest at 7 per cent payable semi-annually, which mortgage is recorded in volume 5 on pages 113 and 114, in Record of Mortgages, Hood River County, Oregon, and the property second above described shall be conveyed to second parties free from all encumbrance except a certain mortgage in the sum of $8,000, dated December 28, 1910, with interest at 7' per cent payable semi-annually recorded in volume 5 on pages 115 and 116, Record of Mortgages, Hood River County, Oregon. In consideration hereof first parties will also pay second parties the sum of one thousand dollars ($1,000.00) cash.

“II. In consideration of first parties’ performing their covenants hereinabove mentioned, as well as those hereinafter mentioned, .second parties will convey to first parties that property situated in the county of Hood River, State of Oregon, described as follows, to wit: … The last-mentioned property shall be conveyed free of all encumbrance except one certain mortgage in the sum of $6,000.00 due three years after June 1st, 1911, dated June 1st, 1911, and filed in volume 5, on page —, Record of Mortgages* Hood River County, Oregon. "Whereas, suit has been instituted to foreclose the mortgage last mentioned and certain negotiations have been made and are intended looking to the withdrawal of said suit by the payment of the interest upon said mortgage and certain other expenses connected therewith. It is therefore mutually understood and agreed that upon the failure of the parties hereto, or either of them, to secure an adjustment of the last-mentioned matter in the manner prescribed then this contract shall become null and void *497at the option of first parties. It is understood that said adjustment shall he perfected within time for the performance of this contract, which is hereinafter fixed, otherwise this contract shall then become null and void. Whereas second parties owe interest on a certain mortgage on the property last described above, amounting to approximately $420.00, and a second mortgage amounting to approximately $535, and attorneys ’ fees in connection with the above-mentioned foreclosure suit of $150.00, and taxes on the property owned by them amounting to approximately $120.00, and, whereas, it is the intention of first parties to furnish second parties enough taken with the said sum of $1,000.00 to be paid to second parties by first parties, to pay said approximate sums and all the sums mentioned in this paragraph, now therefore, it is mutually understood and agreed that first party will furnish to second party all sums taken with said $1,000.00 necessary therefor and that second parties will give to first parties their note for all sums necessary therefor over and above $1,000.00, with interest from July 15, 1912, at the rate of 8 per cent per annum, which shall be duly secured by a mortgage executed by second parties upon the two tracts of land first above described, or by other security, which may be satisfactory and acceptable to first parties. It is mutually understood that said property shall be conveyed by each of the parties hereto by giving sufficient warranty deeds with the usual covenants and that each shall furnish to the other good and sufficient abstracts of title to the property sold. It is further understood and agreed that this contract shall be fully performed on or before the 15th day of July, 1912. It is understood and agreed that each party shall have and take possession of the property purchased and conveyed to them ten days after the closing of this transaction. This agreement is binding upon the heirs, executors, and administrators of each of the parties hereto.

‘£ In witness whereof we have hereunto set our hands and seals this 8th day of July, A. D. 1912.”

¶6*4982. It is objected to by the defendants that tbe contract is not so definite as to be enforceable, for tbe reason that tbe writing is only an option to plaintiffs, at least that it was not mutual, in that plaintiffs were not to be bound by tbe agreement, unless tbe parties, or one of them, should secure an adjustment of the suit commenced by the Pacific Mutual Life Insurance Company against these defendants, for the accomplishment of which terms had been tentatively agreed upon. The agreement signed by the parties hereto on July 8,1912, was not an option, but was a conditional contract, namely, the adjustment, and dismissal of the foreclosure suit was a condition precedent. The contract was to be binding upon them only on the condition named; and, if not binding upon the plaintiffs, neither was it binding upon defendants, and, until it became mutual, either pafty could withdraw from it. On the morning of the 12th of July defendants notified plaintiffs that they would not proceed further with the contract. At that time nothing had been accomplished toward the actual adjustment of the foreclosure suit. On the 13th of July the money was paid upon the settlement of the suit, and probably the motion by the Pacific Mutual Life Insurance Company asking the court to dismiss the suit was drawn, but it is not dated and was not filed in the court until the 15th of July. The order of dismissal was made on the 5th day of August. If the settlement of the suit is deemed to have been irrevocably made on the 13th, that was after defendants had withdrawn from the agreement and terminated their authority to Sims to settle the suit, and plaintiffs were not authorized to proceed further with the contract. It is said in 7 Am. & Eng. Ency. Law (2 ed.), page 117: “A conditional contract is an executory agreement, the performance of which depends upon a condition. It is not simply an executory *499contract, since the latter may be an absolute agreement to do, or not to do, something; but it is a contract, whose very existence and performance depend upon a contingency or condition.” This language is copied from Story, Contracts, page 31. At page 118 of the first-mentioned compilation appears the following: “A condition which must be performed before the agreement of the parties becomes a valid and binding contract is called a condition precedent.” As said in Redman et al. v. Ætna Ins. Co., 49 Wis. 431 (4 N. W. 591): “A condition precedent calls for the performance of some act or the happening of some event after the terms of the contract have been agreed upon, before the contract shall take effect. That is to say, the contract is made in form, but does not become operative as a contract until some future specified act is performed, or some subsequent event occurs”: See, also, 2 Parsons, Contracts (9 ed.), 681. There is a discussion of this subject to the same effect in Nashville & N. W. R. R. Co. v. Jones, 2 Cold. (Tenn.) 574; Bank of Montreal v. Recknagel, 109 N. Y. 482 (17 N. E. 217).

¶7It is very apparent from the contract that the plaintiffs did not desire or intend to make the trade provided for in the contract, unless the suit commenced to foreclose the mortgage on the lands of defendants was dismissed and the loan allowed to continue until its maturity. Also, as appears from the evidence, defendants objected to executing their deed to plaintiffs until the suit was dismissed.

¶8The decree will be reversed and the suit dismissed.

¶9Reversed : Suit Dismissed.