Summary
In Oregon Western Colonization Co. v. Strang, 123 Or. 377, 260 P. 1002 (1927), this court considered the issue of whether the assignee of a land sale contract was bound by a provision requiring the vendee to "pay all taxes that may be hereafter levied" on the property.
Summary of this case from Kunzman v. ThorsenOpinion
Argued at Pendleton November 4, 1927
Affirmed November 15, 1927 Rehearing denied December 20, 1927
From Crook: T.E.J. DUFFY, Judge.
For appellant there was a brief over the names of Mr. Donald M. Graham and Mr. N.G. Wallace, with an oral argument by Mr. Wallace.
For respondent there was a brief and oral argument by Mr. M.R. Elliott.
In Banc.
This action was instituted to collect a promissory note given to plaintiff by defendants as part of purchase price of land; also to collect amount paid by plaintiff as taxes assessed against the land sold by plaintiff to defendant Strang. September 15, 1917, plaintiff agreed to sell to defendant Strang, who agreed to buy from plaintiff 80 acres of land for the sum of $2,400. Of the purchase price $240 was paid on the date of the said agreement and the remainder thereof was to be paid in nine annual installments of $240 each. Deferred payments bore interest at the rate of 6 per cent per annum. The contract contains this provision:
"It is further agreed as a part of the consideration hereof, that said party of the second part will, before the same become delinquent under the laws of the said State of Oregon, pay all taxes that may have been heretofore levied on said premises but which are not yet due, and all taxes that may be hereafter levied thereon while this contract is in force, and also all assessments of every kind hereafter coming due, imposed under the laws of the said State by public authority for irrigation ditches, or other structures or improvements designed for or connected with the irrigation of said land, also all assessments made for any other local improvements made upon or in the vicinity of said land for which the same may be lawfully assessable under the laws of said State, * * prior to the time when such assessment shall become delinquent, or become a lien on said land."
The deferred installments were represented by nine promissory notes each for the sum of $240. Defendant Strang entered into the possession of said premises and remained in such possession until May 18, 1918, when he sold and assigned his interest therein and transferred his contract to defendant Orville I. Davison. Since then said Davison has been in the possession of said land. Defendant Davison paid several of said notes but failed to pay the note coming due on the fifteenth day of March, 1924. That note is the basis of the first cause of action stated in plaintiff's complaint. Defendant Davison also paid the taxes for several years but permitted the taxes for the years 1921, 1922 and the first half of taxes for 1924 to become delinquent. This action was instituted on the second day of November, 1926. The land was subject to sale for the taxes for the year 1921 when plaintiff paid said delinquent taxes. The amount so paid is the basis of the second cause of action stated in plaintiff's complaint. The assignment of said contract by defendant Strang to defendant Davison is in writing on a printed form, doubtless in general use by the plaintiff, which is the owner of a large tract of land in Crook County, Oregon. The contract contains these provisions:
"Should default be made by said party of the second part, in the payment of the principal or interest aforesaid at the time when the same becomes due, or in the payment of the taxes or assessments above referred to, prior to their delinquency, then, or in either such case, the whole amount of the principal or interest unpaid, may, at the option of said party of the first part, be declared due and payable forthwith, and said party of the first part may thereupon proceed to collect the same at law or otherwise, as if each of said payments had matured by it terms; * *."
Defendant Strang was not served and did not appear. Defendant Davison answered admitting most of the allegations of the complaint but denying personal liability on his part. The defendant Davison relies upon his contention that he is not personally liable for the taxes because he did not agree in writing to pay the same. Defendant Davison did not sign the contract nor the assignment thereof. He did sign all of the notes not theretofore paid by his assignor, the defendant Strang. After trial the court found for the plaintiff and entered judgment for the full amount demanded from which judgment defendant Davison appeals. AFFIRMED.
Defendant Davison demurred to the complaint on the ground that two causes of action are improperly joined in one complaint and on the ground that the complaint does not state facts sufficient to constitute a cause of action against him. At the beginning of the trial defendant Davison also objected to the introduction of any testimony because the complaint did not state a cause of action against him. The same question was raised in other ways. At the argument in this court defendant Davison waived all assignments of error, except the one based on the second cause of action. It is urged here that inasmuch as defendant Davison did not sign the contract for the sale of the land he is not personally bound to pay the taxes. He claims that his promise to pay the taxes was within the statute of frauds because it was an undertaking to pay the debt of another person and, therefore, to be valid must be in writing.
Plaintiff claims that defendant Davison, having accepted the assignment of the contract between it and defendant Strang and that contract having provided that vendee Strang should pay the taxes, is bound thereby; he cannot accept the benefits of said contract without also becoming liable for the obligations. Plaintiff also claims that the covenant to pay the taxes is a covenant which runs with the land; that defendant Davison having accepted the assignment of contract to purchase said land steps in the place and stead of defendant Strang and is liable to plaintiff to the same extent as his assignor Strang was and is. We think that plaintiff's positions are correct. While the authorities are not uniform we believe that both in reason and by weight of the authorities defendant Davison became personally liable for the payment of the taxes when he accepted an assignment of the contract, signed the notes given by his assignor Strang to plaintiff and entered into the possession of the land: Corvallis Alsea R.R. Co. v. Portland E. E. Ry. Co., 84 Or. 524, 534 ( 163 P. 1173); 27 R.C.L. 567, §§ 308, 309; Windle v. Hughes, 40 Or. 1, 5 ( 65 P. 1058). It must be remembered in this connection that defendant Davison assumed and agreed to pay the debt owing by the defendant Strang to plaintiff. By analogy the position of defendant Davison is similar to that of a purchaser of land under mortgage who agrees to assume and pay the mortgage debt. Such agreement binds the mortgagor to all the burdens contained in the mortgage itself: Knighton v. Chamberlin, 84 Or. 153, 159 ( 164 P. 703).
It is our opinion that the covenant to pay the taxes, which is a part of the contract under which defendant Davison was in possession of the land and enjoyed the benefits thereof, runs with the land: 15 C.J. 1253, § 71. In this state the land is assessed and taxes levied against it may be collected although the owner thereof may not be named: Or. L., § 4268.
The notes given by the defendants constitute independent contracts and plaintiff could sue on one or all of them without tendering a deed: Hawley v. Bingham, 6 Or. 76. By the terms of the contract the notes must be paid and other covenants in the contract performed by defendants before they or either of them is entitled to a deed. Plaintiff had the option of suing on the notes as they came due and were not paid according to the terms of the contract. Defendants have no right to select for plaintiff the remedy or the course of procedure where it has more than one open to it under the law: Walker v. Hewitt, 109 Or. 366, 377 ( 220 P. 147, 35 A.L.R. 100). Since we hold that defendant Davison is personally liable for the taxes it follows that the order of the court overruling the demurrer was correct.
Defendant Davison's contention that plaintiff had no authority to pay the taxes and collect the amount so paid from the vendee or his assignee is not well taken. As vendor under contract of sale plaintiff holds the title to the land as security for the purchase price. It was necessary for plaintiff to pay the taxes in order to preserve its security. The contract under which Davison has had the benefit and enjoyment of the land requires him to pay the taxes before they become delinquent. That contract also authorizes plaintiff to pay said taxes, if not paid by defendants, and to maintain an action at law to collect the amount so paid by it.
Finding no error in the record the judgment is affirmed.
AFFIRMED.
BEAN, J., concurs in the result.