Opinion
No. 4743.
November 17, 1927.
APPEAL from the District Court of the Seventh Judicial District, for Washington County. Hon. B.S. Varian, Judge.
Action for return and cancelation of deed. Judgment for respondents. Reversed and remanded, with instructions.
Hawley Hawley, for Appellants.
Contract sued upon is illegal and cannot be enforced. (Rev. Stats., sec. 2290; also pars. 4531, 4532, 4535, U.S. Comp. Stats. 1916, found at vol. 5, pp. 5338, 5343, 5354, 43 U.S.C.A., sec. 162; Harris v. McCrary, 17 Idaho 300, 105 P. 558; McFall v. Arkoosh, 37 Idaho 243, 215 P. 978; Sutphen v. Sutphen, 30 Kan. 510, 2 P. 100; In re Cohn, 171 Fed. 568; Frink v. Hoke, 35 Or. 17, 56 P. 1093; Libby v. Pelham, 30 Idaho 614, 166 P. 575; 13 C. J., pp. 411, 492.)
If it be conceded that the contract is not illegal in its entirety, it certainly is illegal in part, and the illegal part must be severed from the legal part. (6 R. C. L. 858; 13 C. J. 563; 4 Page on Contracts, 2d ed., p. 3611, also, pp. 3618, 3619; 2 Elliott on Contracts, pars. 1543-1546, found on pp. 828, 832; Choctaw, O. G. R. R. Co. v. Bond, 160 Fed. 403, 87 C.C.A. 355; In re Johnson, 224 Fed. 180; Central N.Y. T. T. Co. v. Averill, 199 N.Y. 128, 139 Am. St. 878, 92 N.E. 206, 32 L.R.A., N.S., 494.)
Defendant had only an option on the additional homestead. ( Berding v. Northwestern Securities Co., 36 Idaho 384, 211 Pac. 62.)
Oral testimony cannot be introduced to vary the terms of the written instrument. ( Gardiner v. Gardiner, 36 Idaho 664, 214 Pac. 219; Davis v. Idaho Minerals Co., 40 Idaho 64, 231 Pac. 712; Milner v. Earl Fruit Co., 40 Idaho 339, 232 P. 581; Craven v. Bos, 38 Idaho 722, 225 P. 136; International etc. Co. v. Beverland, 37 Idaho 782, 219 P. 201.)
The Portland Trust Company was an innocent encumbrancer for value and should have been protected. ( Keith v. First Nat. Bank, 36 N.D. 315, 162 N.W. 691, L.R.A. 1917E, 901; 4 Thompson, Real Property, pars. 39-51; Bailey v. Crim, 9 Biss. 95, Fed. Cas. No. 734; Moore v. Trott, 156 Cal. 353, 134 Am. St. 131, 104 P. 578; Guthrie v. Field, 85 Kan. 58, 116 P. 217, 37 L.R.A., N.S., 326; Simson v. Bank of Commerce, 43 Hun (N. Y.), 156, 6 N.Y. St. Rep. 176; Blight v. Schenck, 10 Pa. 285, 51 Am. Dec. 478.)
Ed. R. Coulter for Respondents.
The contract is not a severable contract; contract is not void. (U.S. Rev. Stats., secs. 2290, 2291, pp. 5338, 5343; United States v. George, 228 U.S. 14, 33 Sup. Ct. 412, 57 L.ed. 712.)
The delivery of the deed being wrongful and without authority under the contract or otherwise, respondents are entitled to have deed canceled. ( Bowers v. Cottrell, 15 Idaho 221, 96 Pac. 936; 2 Page on Contracts, sec. 1192; King v. Upper, 57 Wn. 130, 106 P. 612, 31 L.R.A., N.S., 606; Ambler v. Jones, 102 Neb. 40, 165 N.W. 886.)
The deed having been wrongfully delivered, appellant Portland Trust Company acquired no lien on said lands under its trust deed. (10 R. C. L. 637; 16 Cyc. 579; 21 C. J. 883; 3 Williston on Contracts, p. 424, sec. 212; Wood v. French, 39 Okl. 685, 136 P. 734; Sharp v. Kilborn, 64 Or. 371, 130 P. 735.)
July 25, 1919, respondents and appellants entered into an agreement, the main portion essential to an understanding and determination of the case being as follows:
"That the parties of the first part for and in consideration of the sum of $500.00 paid on this date by the party of the second part, receipt whereof is hereby acknowledged, as a part payment of the purchase price of the premises first hereinafter described and in consideration of the premises, do hereby sell to the party of the second part the S 1/2 of Section Nine, Township Twelve, North of Range Seven West of the Boise Meridian, upon which final certificate has been issued for the sum of Twenty-one Hundred ($2,100.00) Dollars; and do hereby contract to sell to the party of the second part the NE 1/4 of Section Seventeen and the SE 1/4 of Section Eight, Township Twelve, North, Range Seven West of Boise Meridian, upon which an allowance of additional homestead application has been made for the sum of Two Thousand ($2,000.00) Dollars, making a total purchase price of Forty-one Hundred ($4,100.00) Dollars.
"It is further understood and agreed:
"That the balance due upon the purchase price of the first of the above-described lands included in the original homestead, that is, the sum of $1,600.00 shall be paid on or before the 20th day of June, 1920, with accrued annual interest at 8% from January 1st, 1920.
"That payment of the purchase price for the land included in said additional homestead entry, that is, the sum of $2000.00, shall be met on or before the 20th day of June, 1922, with accrued interest to date of payment at the rate of 6% per annum, interest payable annually; provided, however, that in the event the parties of the first part shall not receive patent to said premises on or before said date, then the part of the contract relating to the purchase of these said premises shall be null and void."
Thereafter the appellants entered into the possession of the premises, paid the $1,600 balance upon the original homestead, and without the knowledge of respondents caused the First National Bank of Weiser, the escrow-holder, to deliver to it the separate deed therefor and refused to pay anything further. After an unavailing demand for the return of the deed, suit was instituted by respondents to have the deed canceled and their title quieted. Respondents did not offer to return the money paid by appellants.
Appellants contend that the entire contract was void by reason of U.S. Rev. Stats., secs. 2290 and 2291, vol. 5, U.S. Comp. Stats. Ann. (West, 1916), secs. 4531 and 4532, vol. 8, Fed. Stats. Ann., 2d ed., secs. 2290 and 2291, 43 U.S.C.A., secs. 162, 164. Both parties admit that the contract constituted only an option.
Respondents, in support of the proposition that the contract was not void, cite only United States v. George, 228 U.S. 14, 33 Sup. Ct. 412, 57 L. ed. 712. That case, however, merely held that a department could not make regulations, in effect, contrary to and enlarging the statutory requirements for making proof in connection with the entry and acquisition of public lands, thereby rendering one not complying with such regulations guilty of a crime. The inhibition herein important is contained in the statute itself and therefore the cited case does not support respondent's position.
Appellants contend that the contract is severable while respondents urge that it is not. If severable and the portion providing for the sale of the original homestead was valid, the appellants having paid the entire purchase price for the land for which they now have the deed, the severable portion has, in effect, been completely fulfilled by both parties and the respondent is entitled to no relief in connection therewith. If the respondent contends that he would not have sold the original homestead unless appellants had contracted to buy both, he then perforce relies on the contract as a whole and not on the severable portion. On the other hand, if the contract is not severable and is to be considered as an entirety, it is void in toto. ( Harris v. McCrary, 17 Idaho 300, 105 P. 558), and the parties will be left where they are. (13 C. J., p. 492, sec. 440; McFall v. Arkoosh, 37 Idaho 243, 215 Pac. 978.)
Respondents may not contend that the appellants secured the deed in contravention of the contract considered as an entirety, and thus were acting outside the contract, because, in seeking its return, they must rely on the terms of the contract considered as indivisible, or at least their interpretation of it, to the effect that no deeds were to be delivered until the full purchase price was paid for both, which positions are inconsistent, and furthermore, not having offered to return the money they have received, they may not ask for a cancelation and return of the deed. ( Tarr v. Western Loan Savings Co., 15 Idaho 741, 99 P. 1049, 21 L.R.A., N. S., 707; 9 C. J., p. 1207, sec. 93.) No affirmative relief was sought by appellants. Respondents sought relief only as to the original homestead.
The case is therefore reversed and remanded, with instructions to dismiss respondents' complaint. This conclusion renders it unnecessary to pass upon the questions of evidence raised by appellants, or the rights of the Portland Trust Company. Costs awarded to appellants.
Budge, Taylor and T. Bailey Lee, JJ., concur.