CHAS. E. FOXLEY, Respondent, v. J. Y. RICH, J. M. JENSON and JOHN PINGREE, as Individuals and Copartners Doing Business as THE BANK OF BRIGHAM CITY, and Homer J. Rich, Appellants.

No. 1961. Decided January 13, 1909 (99 Pac. 666).

1. ESCROWS-TIME EFFECTIVE. An escrow deed does not become effective until the conditions upon which it is executed are fully performed, and the taking possession of the property by the purchaser, and part performance, ordinarily does not render it effective, so that, where a deed was deposited in escrow for delivery when the vendee paid purchase-money notes, taxes, etc., title remained in the vendor until that time. (Page 170.) 2. ESCROWS-TIME EFFECTIVE RELATION BACK TO DELIVERY. The passing of title under an escrow deed, upon performance of the conditions upon which it was executed, will relate back to the execution of the deed only when justice requires it. (Page 170.) 3. VENDOR AND

PURCHASER-RESCISSION-RIGHT

OF PURCHASER. While the vendor, in a contract to convey, by a subsequent conveyance to another prevents himself from complying with his contract, or the conveyance amounts to a repudiation of the contract, or places an additional burden upon the vendee, the latter may treat the conveyance as an abandonment of the contract by the vendor, and recover any payments thereunder; but, where the conveyance does not prevent performance of the contract, as where the transferee recognizes the contract vendee's rights, and is willing to convey, the vendee cannot rescind. (Page 171.) 4. VENDOR AND PURCHASER-RESCISSION-RESCISSION BY PURCHASER -ABANDONMENT BY VENDOR. Where the vendor, in a contract to convey, conveyed the land to another, to whom the purchasemoney notes had been previously transferred for the purpose of securing the notes, with the understanding that the transferee should convey to the contract vendee when the notes were paid, in accordance with the contract, such conveyance by the vendor did not amount to an abandonment of the contract, so as to entitle the vendee to rescind and recover payments made under the contract. (Page 172.)

5. VENDOR AND PURCHASER-RESCISSION-RIGHT OF VENDEE. The fact that the vendor, under a contract to convey, breached and abandoned the contract in February by conveying to another would not justify the failure of the contract vendee to make payments due before that time, so as to entitle him to rescind and recover payments already made. (Page 173.)

6. VENDOR AND PURCHASER-PERFORMANCE OF CONTRACT-PAYMENTTENDER-SUFFICIENCY. A tender of payment by the vendee, conditioned upon the vendor making deeds to certain lands not covered by the contract, and after making arbitrary deductions of unliquidated claims against the vendor, was not good. (Page 174.)

7. VENDOR AND PURCHASER-RESCISSION-AGREEMENT BY PARTIESEFFECT. A vendee, in an executory contract to convey, may recover the amount paid thereunder, where both parties voluntarily rescinded the contract. (Page 174.)

8. VENDOR AND PURCHASER RESCISSION BY VENDEE-EFFECT-RIGHTS ON RESCISSION. The purchaser, under a contract to convey, may recover the amount paid thereunder, where the vendor fails to perform his part of the contract, or was guilty of fraud in making it, or the purchaser rescinds, under an option to do so contained in the contract, or where both parties are in default and unable to complete the contract at the time stipulated.. (Page 174.)

9. VENDOR AND PURCHASER-RESCISSION BY VENDEE RIGHT. That the vendor demanded some security for the debt, after the vendee had refused to make payments due, would not entitle the latter to rescind the contract and recover payments already made. (Page 175.)

4

10. VENDOR AND PURCHASER-CONSTRUCTION OF CONTRACT-"DEFAULT IN PAYMENT." A contract to convey provided that the deed should be delivered to the vendee upon payment of a certain amount each year, from 1904 to 1910, and in case of "default in payment" the deed should be returned to the vendor, and previous payments should be used as rent on the premises. Held, that the contract could not be construed so as not to put the vendee in default for nonpayment until 1910, but his failure to make any payment when it became due would amount to a default. (Page 177.)

11. VENDOR AND PURCHASER-PERFORMANCE OF CONTRACT-BREACH— EFFECT. A contract to convey required the payment of the purchase price at stipulated periods, and provided that, in case of default in payment, the escrow deed was to be returned to the vendor, and previous payments should be used as rent on the premises. Held, that the rights of the parties upon a breach by the vendee were measured by the contract itself, and the vendor was entitled thereunder to apply payments already made upon the rent, and to have the deed returned, while the vendee was entitled to have the unpaid purchase-money notes surrendered to him, so that the vendor could not recover thereon. (Page 178.)

12. CONTRACTS-BREACH-EFFECT. Where the parties to a contract stipulate what the result of a breach thereof shall be, the courts will ordinarily give it only the result stipulated. (Page 179.)

APPEAL from District Court, First District. Hon. W. W. Maughan, Judge.

Action by Charles E. Foxley against J. Y. Rich and others. From a judgment for plaintiff, defendants appealed.

REVERSED AND REMANDED (with directions).

J. D. Call for appellants.

J. D. Johnson for respondent.

FRICK, J.

The pleadings in this case cover twenty-eight pages of the printed abstract, and are too long to be set forth even in condensed form. The evidence is also quite voluminous, and we shall not attempt to set it forth, except such parts as we deem are controlling of the principles involved. The object of the action was to recover back money paid by respondent to the appellant J. Y. Rich in pursuance of a certain executory contract entered into between them, whereby respondent agreed to purchase from said Rich certain lots, together with a dwelling-house thereon, in Brigham City, Utah. The other appellants were made parties to the action because they had succeeded to the rights of Rich by assignment of the contract and certain promissory notes, hereafter to be noticed.

Before such assignment respondent had made a payment of $500 as part payment of the purchase price for said lots, which was made at the time the contract was entered into, and he agreed to pay the remainder, amounting to $3,500, in seven annual installments, the first of which became due on November 15, 1904. Mr. Rich executed a deed to the

premises at the time the contract was entered into, and both the contract and the deed were dated August 5, 1903. The deed was placed in escrow, and was to be held by the Bank of Brigham City, in which the other appellants were interested in some capacity or other, until respondent had made the final payment. The agreement between Rich and respondent, so far as material, is as follows: "Brigham City, Utah, August 5, 1903. To The Bank of Brigham City-Upon payment of the amounts listed below, you will deliver to Chas. E. Foxley, or order, the inclosed deed from Mrs. Florence Rich and husband, conveying the following property in Brigham City, Utah, to wit: [describing it] payments to be made as follows: On or before November 15, 1904, $500.00; on or before November 15, 1905, $500.00; on or before November 15, 1906, $500.00; on or before November 15, 1907, $500.00; on or before November 15, 1908, $500.00; on or before November 15, 1909, $500.00; on or before November 15, 1910, $500.00. Total $3,500.00. All of the above to draw interest at the rate of ten per cent. per annum from October 1, 1903, payable on or before the 15th day of November of each year. In case of default in payment of above payments, said deed to be returned to J. Y. Rich, and previous payments made shall be used as rent on said premises. Charles E. Foxley shall pay all taxes and assessments that may be levied against said premises after Oct. 1, 1903, and may pay all or any part of said amounts specified above at any time, whether due or not, and stop interest thereon, and shall be entitled to the possession of said premises on and after the 1st day of October A. D. 1903. John Y. Rich, Chas. E. Foxley. Witness: John Pingree." Upon the back of the agreement was indorsed: "Received the within-described escrow papers this 5th day of August, 1903. The Bank of Brigham City, John Pingree, Cashier."

Respondent, at the time the foregoing agreement was entered into, also made and delivered to J. Y. Rich seven promissory notes for $500 each, negotiable in form. The

first note was made payable on the 15th day of November, 1904, and the others were payable annually on the 15th day of November of each year thereafter, so that the last one became due on November 15, 1910. Respondent made no payments except the one of $500 at the time the contract was entered into. At the time of the trial, however, he claimed that he had made some arrangements with J. Y. Rich, during the summer or fall of 1904, whereby it was agreed between them that certain moneys, which were claimed to be owing by said Rich to respondent's father and to Foxley Bros., were to be applied on the $500 note coming due November 15, 1904, but respondent, on cross-examination, admitted that Mr. Rich had settled and paid both his father and Foxley Bros. in full, and that respondent never had any personal claims of any kind against Mr. Rich, and made no claim that anything had been paid upon the contract except the $500 aforesaid. He had paid the taxes for 1904, and had expended some small sums of money for some work done on the property. The claim, therefore, that the first note had been paid, or that respondent is entitled to any benefit from the alleged transaction with regard thereto, may be entirely eliminated from consideration in this case.

Soon after the contract was entered into, and the notes had been delivered, J. Y. Rich transferred them to the Bank of Brigham City, to secure an indebtedness owing by him to the bank. On the 3d day of November, 1903, and pursuant to the contract of purchase, respondent went into possession of the premises. He remained in the house but a short time, but held possession of the barn for several months, when he moved out and abandoned the premises. The water pipes froze, and the house, being deserted, was entered by some boys, and one of the appellants took possession of it, placed it in repair, and used it, paying and receiving rent therefor. On February 9, 1905, after respondent had failed to pay the note which became due on November 15, 1904, and had been transferred to the bank,