(24 Or. 494)

JOHNSTON v. WADSWORTH. (Supreme Court of Oregon. July 17, 1893.) SPECIFIC PERFORMANCE-CONTRACT TO PURCHASE LAND-VENUE-WAIVER OF OBJECTION STATUTE OF FRAUDS.

1. Specific performance will lie at the instance of the vendor to enforce a contract for the purchase of land where he alleges and makes tender of a deed therefor, since the decree will compel the acceptance of the deed as well as the payment of money.

2. Under Hill's Ann. Code, § 388, providing that the court may change the place of trial, on the motion of either party, when it appears from the affidavit of such party that the suit has not been commenced in the proper county, the objection that a suit for specific performance of a land contract was not commenced in the county in which the land lay cannot be raised after the suit has been tried on its merits.

3. Where, as an inducement to plaintiff to purchase land through defendant, the latter gives him a contract by which he agrees to buy the land from him within a certain time if plaintiff so desire, such contract is not void for want of mutuality.

4. The presence of a seal is sufficient recital of consideration to satisfy the statute of frauds.

Appeal from circuit court, Multnomah county; L. B. Stearns, Judge.

Action by S. R. Johnston against Philip C. Wadsworth. From a decree for plaintiff, defendant appeals. Affirmed.

Cake & Simon, for appellant. W. McCamant, for respondent.

LORD, C. J. This is a suit in equity for the specific performance of a written contract. The complaint alleges that the plaintiff and defendant entered into an agreement whereby the defendant, in consideration of the sums to be paid as alleged, agreed to procure title for plaintiff to certain school lands belonging to the state, and at the same time, and as a part of said agreement, expressly stipulated that if the plaintiff should be dissatisfied with the land at any period within six months from or after the date of said agreement, and if plaintiff should so desire, the defendant would purchase said lands from him at the rate of three dollars per acre; that, in pursuance of such agreement, application was duly made for the purchase of the land described in the complaint, and plaintiff made the purchase relying upon defendant's agreement to purchase the land; that, upon examining such land, the plaintiff ascertained that the same was of little or no value, and thereupon notified the defendant of his desire that he should repurchase the same in accordance with his agreement, which the defendant failed and refused to do; that the plaintiff has made due tender to the defendant of a transfer of said land in compliance with his agreement, etc. A demurrer to the complaint was interposed by the defendant, on two grounds: First, that the complaint does not state facts sufficient to constitute a cause of suit; and, second, that the court did not have jurisdic

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tion of the subject of the suit. The dewas overruled, and the defendant answered, denying the allegations of the complaint, and alleging that the procurement of the land for the plaintiff constituted the only contract that was made between them, and that it had been fully executed. The cause being referred, the findings were for the plaintiff, which, after argument, were affirmed by the court, and a decree was entered specifically enforcing the contract, from which decree the defendant has brought this appeal. The objection to the jurisdiction, presented by the demurrer, is based on two grounds: First, that the plaintiff has a plain and adequate remedy at law; and, second, that the suit was not brought within the county in which the land is situated. Upon the first point the contention is that the facts show that the only relief sought is a money judgment, and hence that the plaintiff is not entitled to the remedy of a specific performance unless there were acts alleged which the defendant is required to perform other than the single payment of money. "While it is true," as was said by Mr. Pomeroy, "that in these suits by the vendor there is generally some other act to be done by the purchaser besides the simple payment of money, the performance of which may be enforced by the decree," yet, he adds, "even in those cases, when no such act has been undertaken by him in the contract, he may be compelled to accept the deed or assignor other subject-matter, as well as to pay the price, so that the decree is not purely one for the recovery of money." Pom. Spec. Perf. § 6. In the case at bar the plaintiff alleges, among other things, a tender to the defendant of a deed for the land, and that he brings the same into court, and thereby tenders to defendant a transfer of all his rights to such land. Upon this state of facts, the court would be authorized by its decree to compel the defendant to accept the deed, as in fact it has done, as well as to pay the price of the land, so that the decree would not be purely one for the recovery of money. The general rule that a court of equity will take cognizance of contracts sought to be enforced by the vendor, as well as those sought to be enforced by the vendee, is well settled, for Mr. Pomeroy says: "Since the vendee may, by a suit in equity, compel the execution and delivery of the deed, the vendor may also, by a similar suit, enforce the undertaking of the vendee, although the substantial part of his relief is the recovery of money." Pom. Spec. Perf. § 6. "As the vendor of land," says Mr. Waterman, "seeks only the payment of the purchase money, it might be contended that he had an adequate remedy at law, and therefore could not sustain a bill for the specific performance of the contract;" but, he adds, "a moment's reflection will, however, show that damages would not restore him to the situation he would be in if the

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contract were performed."

Wat. Spec. Perf. § 15. Pecuniary damages for the breach of the contract is not what the plaintiff asks or is entitled to receive at the hands of a court of equity. He asks to receive the price stipulated to be paid in lieu of the land. While it is said that specific performance is not a matter of absolute right in a party, but of sound discretion in the court, yet the rule has come to be established, if a contract respecting real property is in writing, and is certain, fair in all its parts, for an adequate consideration, and capable of being performed, it is as much a matter of course for courts of equity to decree specific performance of it as it is for a court of law to give damages for the breach. 2 Beach, Eq. Jur. § 636; Tied. Eq. Jur. § 493.

The second objection to the jurisdiction is based on the fact that the lands which the defendant contracted to purchase are situated in Jackson county, and the suit to enforce the contract was brought in Multnomah county. It is claimed that under section 387, Hill's Ann. Code, the circuit court of Multnomah county had no jurisdiction to enforce the specific performance of a contract in relation to lands located in Jackson county. As a general rule, it is not necessary in equity that the subject-matter of a suit should be corporeally within the jurisdiction of the court, provided that the parties are in person within the jurisdiction, so that they can be personally summoned to answer the complaint; hence the rule established that, where the court has jurisdiction of the proper parties, it may compel them to do equity in relation to lands lo cated without its jurisdiction in another county or state. Tied. Eq. Jur. § 475. "A suit for the specific performance of a contract," said Gray, C. J., "proceeds in personam, and may be maintained in any court of equity which has jurisdiction of the parties, even if the land lies in another state or foreign country." Brown V. Desmond, 100 Mass. 269. See, also, Gardner v. Ogden, 22 N. Y. 327; Sutphen v. Fowler, 9 Paige, 281; Massie v. Watts, 6 Cranch, 148; 3 Pom. Eq. Jur. § 1313. The relief sought by this suit is not to determine title, but to recover the price stipulated to be paid for the land. The decree is in personam, and not in rem; and it would seem, therefore, when the parties are within its jurisdiction, a court of equity may make its decree in personam for the specific performance of a contract for the sale of land in another county, notwithstanding 'section 387. But, however that may be, if the plaintiff brought his suit in the wrong county, the defendant waived this objection under section 388 by not availing himself of the right to a change of venue to the proper county. We think, therefore, that it is too late to raise this objection after a suit has been tried on its merits.

The next objection is that the contract is not mutual. This objection is based on the

well-settled rule that equity will not specifically enforce a contract unless it is mutual in its obligations. But this rule is subject to certain well-established exceptions, to which it is claimed the contract sought to be enforced belongs. The facts show that defendant made an agreement with the plaintiff, in consideration of the payment of a certain sum of money, a part of which was to be retained by the defendant, and a part thereof to be paid to the state of Oregon, whereby he promised to obtain title for the plaintiff to certain school lands belonging to the state of Oregon, and that, as a part of said contract, the defendant made and delivered to the plaintiff his agreement, as follows: "Portland, Oregon, February 19th, 1891. I hereby covenant and agree to purchase from S. R. Johnston six hundred and forty (640) acres of land, three hundred and twenty (320) applied for from the state of Oregon by John Harriman, and transferred to him, and three hundred and twenty (320) applied for in his own name, at the expiration of six months from date, if he so desires, at the rate of three dollars ($3) per acre. [Signed] Philip C. Wadsworth. [Seal.] Witnesses: E. J. Young. John Harriman,"-and at the same time agreed that if the plaintiff should, within six months after the date of the sale, be dissatisfied with the lands sold to him by the defendant, he (the defendant) would purchase the same upon the terms set forth in the agreement. The lands referred to and described were applied for and purchased under the agreement, and, in accordance with the terms of such purchase from the state, the plaintiff delivered certain promissory notes, etc., and made the purchase and entered into the agreement relying solely upon the representations of the defendant, and upon his written promise to repurchase the land as set out in the agreement. That plaintiff, after examining such land, was dissatisfied therewith, and notified the defendant of his desire that he should repurchase the same in accordance with the terms of his agreement, and that the defendant then promised in writing to so repurchase the land, and further promised to assume the promissory notes given to the state for a part of the purchase price. That the defendant did not comply with his agreement, and has wholly failed and neglected to repurchase the land at the price named, or for any other sum, and that, prior to the commencement of the suit, the plaintiff tendered to the defendant a conveyance of the property, and demanded that he repurchase the same, in compliance with his agreement, and that he has failed and refused to carry out the agreement; and, also, that the plaintiff has tendered to the defendant the transfer of said property, subject to the payment of said promissory notes by the defendant, and that such tender was refused. These facts are based on the testimony of the

plaintiff, which is uncontradicted. At the time of the sale the plaintiff was engaged in the business of school teaching at Portland, and was unable to examine the lands, owing to their location in a distant part of the state, and, being unwilling to buy them without seeing the same, the defendant, to induce him to make the purchase, made the agreement in writing set out. At the expiration of the school term, the plaintiff examined the lands, and found them utterly unfit for the purpose for which they had been purchased. The defendant introduced no testimony, and relies solely upon technical suggestions to defeat the enforcement of the agreement.

One of the questions presented is whether the agreement set out is wanting in mutuality. The decided cases show that the rule as to mutuality is greatly circumscribed by numerous limitations, and that a conditional or unilateral contract may come within these exceptions. 2 Beach, Eq. Jur. § 586; Wat. Spec. Perf. § 200. The principle is well settled that where an owner of land gives another, for a sufficient consideration, an option or privilege for the purchase of land within a given time, in writing, with a full knowledge of the fact that he is bound, and the other party is not, it is such a contract as will be enforced in equity at the instance of the party holding the option. As Mr. Justice Newman asks: "Does such a contract, indeed, lack mutuality? The seller, for a fair consideration, agrees to give the proposed purchaser a certain fixed time in which to make the contract mutual by acceptance of the offer to sell. If he accepts within the specified time, both parties are fully bound." Johnston v. Trippe, 33 Fed. Rep. 536. In Hall v. Center, 40 Cal. 67, the court says: "If the owner of an estate has fairly made a contract for a sufficient consideration received by him, by which contract he has himself stipulated that another person may, at the option of the latter, receive a conveyance of the estate upon the payment or tender of a fixed sum within a given time, what principle of equity is violated by making the owner comply with his contract? If the other party has obtained the option, he has fairly bought it and paid for it, and there is no principle or policy of law violated in its purchase." See, also, Hawralty v. Warren, 18 N. J. Eq. 124; Clason v. Bailey, 14 Johns. 484; Schroeder v. Gemeinder, 10 Nev. 355; Pom. Spec. Perf. § 169. In the case at bar the defendant sold the land to the plaintiff, and, to protect him in case of dissatisfaction therewith, he gave him the option to disaffirm the contract, if he so desired, in which event the defendant agreed to repurchase it. After the plaintiff notified the defendant that he was dissatisfied, and expressed the desire that he should repurchase the land, in accordance with the terms of the agreement, the offer of the defendant to purchase was accepted by the plaintiff; so that, when the

plaintiff exercised the option within the time specified, the minds of the parties met, and the contract became mutual, and enforceable by either party. We think, therefore, the contract, as thus made, the other conditions existing, is a proper subject of specific performance.

The last contention is that the agreement sought to be enforced is void, because it does not state the consideration. The statute provides that an agreement for the sale of land is void unless the same, or some memorandum thereof expressing the consideration, be in writing, and subscribed by the party to be charged, etc. Section 785, Hill's Ann. Code. Under statutes of this character, it has been held that if, from the terms of the writing, the consideration for the promise is inferable, it is expressed in such agreement, within the meaning of the statute; and, while we think the consideration is apparent from a reasonable construction of the terms of the contract, yet, the agreement being under seal, the seal is itself the expression of a consideration sufficient to satisfy the statute. There are numerous authorities which show that it has been repeatedly held that words "for value received" sufficiently comply with statutes like ours, which require the consideration to be expressed. Day v. Elmore, 4 Wis. 214; Watson v. McLaren, 19 Wend. 557; Miller v. Cook, 23 N. Y. 495; Osborne v. Baker, 34 Minn. 307, 25 N. W. Rep. 606; Brooks v. Morgan, 1 Har. (Del.) 123; Whitney v. Stearns, 16 Me. 394. The text writers also generally state the law to be that the words "for value received" sufficiently express the consideration. 1 Reed, St. Frauds, § 430; Brown, St. Frauds, § 408a; Daniel, Neg. Inst. § 1767; 3 Pars. Cont. 16; Brandt, Sur. § 70. It is the law, too, that the seal is a sufficient expression of the consideration. Reed, St. Frauds, § 431. "We have held again and again," said Cowan, J., "that a seal expresses a consideration, within the meaning of the statute." Douglass v. Howland, 24 Wend. 45. If the memorandum is under seal, the implication of consideration therefrom is sufficient. Brown, St. Frauds, § 408a. Woodruff, J., said: "An instrument under seal is held not void under the statute, although no consideration is in terms stated therein, upon the ground that the seal imports consideration. It is sufficient if, upon the face of the instrument, consideration is a necessary legal implication." McKensie v. Farrell, 4 Bosw. 207. The object of the statute of frauds was to prevent the facility to fraud and perjury to which contracts dependent upon the memory of witnesses were exposed by requiring them to be reduced to writing. When this is done, there does not seem to be any reason why the consideration might not be proved by parol, as in the case of any other contract, or, if there is any reason for expressing the consideration, the true one ought to be expressed; yet the authorities cited show that

the words "for value received" or that a seal itself sufficiently expresses the consideration. The fact is, as Mitchell, J., said, "that the expression of the consideration is so unnecessary in order to prevent the mischief aimed at that the courts have always been inclined to give this provision of the statute a very liberal construction, which sometimes, as in the instances cited, reduces it to a mere formality." Osborne v. Baker, supra. In view, therefore, of the authorities, we think the seal sufficiently expresses the consideration, within the meaning of the statute. The decree is affirmed.

(24 Or. 486)

BRUCE v. GERMAN SAV. & LOAN SOC. et al.

(Supreme Court of Oregon. July 17, 1893.) PLEADING ESTOPPEL INSURANCE POLICYBREACH OF CONDITION-WAIVING PROOFS OF Loss.

1. An estoppel of an insurance company to claim a breach of the conditions of a policy of fire insurance by nonoccupancy of the premises, after having issued the policy with knowledge of such nonoccupancy, must be specially pleaded.

2. On an issue as to whether an insurance company waived proof of loss by declining to pay a policy, the insured testified that the general agent and the adjuster of the company both told him that the loss would not be paid, which statement these officers denied. It appeared that the insured, to secure insurance on another building near the house covered by the policy in suit, and burned at the same time, testified, that he was occupying such building at the time of the fire, while he afterwards swore that at that time, and for six weeks previous, he had occupied the house covered by the policy. Held, that a finding by the referee that the company did not decline to pay the policy was justified.

Appeal from circuit court, Multnomah county; Loyal B. Stearns, Judge.

Action by W. S. Bruce against the German Savings & Loan Society and the Phoenix Insurance Company. From a decree for defendants, plaintiff appeals. Affirmed.

The other facts fully appear in the following statement by MOORE, J.:

This is a suit brought by the plaintiff against the German Savings & Loan Society and the Phoenix Insurance Company to recover from the latter $1,800, the amount claimed to be due on an insurance policy, on account of a loss by fire. The facts show that on May 31, 1890, plaintiff was the owner of certain real property in Portland Homestead, Multnomah county, upon which was a two-story frame building, of the value of about $2,600, and on that day he executed and delivered to the German Savings & Loan Society a mortgage upon said real property to secure the sum of $1,000, payable in three years from that date, in which mortgage he covenanted to keep said building insured for $1,800 against loss by fire in some reputable insurance company, the loss, if any, to be made payable to said mortgagee; that on June 2, 1890, he made application to one J.

A. Arment, a local agent of the Phoenix Insurance Company, for an insurance upon said building in the sum of $1,800, for the term of three years, while occupied as a family dwelling, and paid $27 as a premium thereon, and thereupon the company executed and delivered to him policy No. 3,538, as applied for by him, which he delivered to said German Savings & Loan Society as collateral security for its loan, and to be held by it as trustee for the plaintiff, after the payment of the said mortgage debt; that on July 4, 1891, said building was totally destroyed by fire, and the plaintiff, on or about the 7th of that month, notified the agent of the insurance company thereof, but, the company failing to pay said loss, the plaintiff requested the German Savings & Loan Society to bring an action against the said insurance company upon said policy, which it refused to do, thus compelling him to bring a suit in equity to protect his rights. The conditions of the policy issued to plaintiff, and relied upon by the insurance company to defeat the recovery, are as follows: "This entire policy, unless otherwise provided by agreement indorsed thereon or added hereto, shall be void if * * * a building herein described, whether intended for occupancy by owner or tenant, be or become vacant or unoccupied, and so remain for ten days." The policy also provides, among other things, that, "if fire occur, the insured shall give immediate notice of any loss thereby, in writing, to the general agent at San Francisco; * * * and within sixty days after the fire, unless such time shall be extended in writing by this company, shall render a statement to this company, signed and sworn to by said insured, stating the knowledge and belief of the insured as to the time and origin of the fire; the interest of the insured and all others in the property; the cash value of each item thereof, and the amount of loss thereon; all incumbrances thereon;

any changes in the title, use, occupation, location, possession, or exposure of said property since the issuing of this policy; by whom and for what purpose the building herein described, and the several parts thereof, were occupied at the time of the fire," etc. The policy further provided that "no suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity until after full compliance by the insured with all the foregoing requirements, nor unless cornmenced within twelve months next after the fire." Reference is also made in the policy to the application and survey of the insured. The plaintiff alleged that he had duly per formed all the conditions of said policy on his part to be performed. The insurance company, after denying the material allegations of the complaint, set up three separate defenses: (1) That plaintiff caused to be constructed a frame building with shingle roof at a distance of 35 feet from the in

sured building, when at the time the policy was written the space was 100 feet to the nearest building, thereby increasing the hazard, without notifying the company; (2) the building insured became vacant and unoccupied, and so remained for more than 10 days; and (3) the insured furnished no proof of loss, as required by the policy, and that such proof was not waived by the insurance company. After the issues were completed, the cause was referred to Mark O'Neill to take his testimony, and report his findings of fact and conclusions of law thereon, and, after some testimony had been taken, the plaintiff, by leave of the court, filed an amended complaint, in which he alleged that he offered to furnish the insurance company with due proof of loss, but that it, by its duly-authorized agent, waived the condition of said policy by which it was required to furnish proof of loss to said defendant, and relieved and discharged the plaintiff from the performance thereof by stating to him that the said insurance company would not pay said loss. After the testimony had been taken, the referee reported, as his findings of fact, that said building was and had been unoccupied for more than 10 days prior to the fire, without the knowledge or consent of the insurance company or its agents, and that the insured failed and neglected to make proof of loss within 60 days after said building was destroyed by fire, and that said insurance company had not extended the time in writing to said insured to make such proof of loss; but he made no findings upon the question of the hazard caused by the construction of said frame building at a distance of 35 feet from the building covered by the policy in question, and, as a conclusion of law, found that the insurance company should recover from the plaintiff its costs and disbursements. The court approved the report of the referee, and a decree was rendered dismissing the suit, from which the plaintiff appeals.

George A. Brodie, for appellant. R. Mallory, for respondents.

MOORE, J., (after stating the facts.) The appeal presents the following questions: Was the hazard increased by the construction of another building after the policy was issued? Was the house unoccupied at the time of the fire, and had it been so unoccupied for more than 10 days prior thereto? And was the proof of loss waived by the insurance company?

We do not deem it necessary to examine the first question, as we think the solution of the other two decisive of the case. The plaintiff alleges that he duly kept and performed all the conditions of the policy to be performed by him. The answer denies this, and, for a separate defense, alleges that at the time of the fire the house was unoccupied, and that it had been so unoccupied for more v.34P.no.1-2

than 10 days prior thereto, without the knowledge or consent of the insurance company. The reply denies this separate defense, and the issue is thus clearly made by the pleadings upon this question. The proof conclusively shows that at the time of the fire the house was unoccupied, and that it had not been occupied for about six weeks prior thereto, and that the company had no knowledge thereof. The plaintiff contends, however, that, at the time he applied for insurance, J. A. Arment, the agent of the insurance company, visited the house in question, and knew that the building was unoccupied, and that, having accepted the risk with knowledge thereof, the company is estopped from disclaiming a waiver of the policy on that account; that such knowledge on the part of the agent is notice to the company; and that the act of issuing the policy constitutes an estoppel in pais, which can be established by evidence without any allegation in the pleading to support it. It is well settled at common law that an estoppel in pais need not be pleaded, (Big. Estop. 699,) but the contrary has been held in this state. In Rugh v. Ottenheimer, 6 Or. 231, it was held, in a case in which the legal title to real property of the wife was held by her husband, that she was not estopped to claim the title against the husband's creditors, who had furnished goods upon the faith of his ownership of the land, without alleging the facts constituting the estoppel. Boise, J., said: "If she had been guilty of fraud which would estop her, then the same should be pleaded to make it allowable, which is not done, and the matter of estoppel cannot be considered in this case. So, in Remillard v. Prescott, 8 Or. 37, it was held that where the defendant had, without objection, permitted the plaintiff to make improvements and pay the taxes upon defendant's land, the latter was not estopped from claiming the legal title, and that it could not be controverted without alleging the estoppel. The same learned justice said: "The appellants claim title by estoppel, and, if they intended to rely on such title, they should have pleaded it in the complaint, as they had an opportunity to do so. They made their case on the complaint, wherein they relied on the fact that Craig had purchased the property from Chapman, and that, by mistake or the procurement of Prescott, the deed was made to Prescott and Craig. We think, therefore, that the matter of estoppel as sustaining the claim of the appellant as prayed for cannot be considered in this case." These cases have settled the rule in this state that an estoppel in pais must be pleaded, and we see no reason for changing it. The plaintiff relied upon the issue he made in his complaint, and not upon the estoppel, and, having elected his cause of suit, he should be bound thereby.

2. The original complaint, in substance, alleges that on July 7, 1891, plaintiff noti