The writer of this opinion agrees that the plaintiff has not made a case compelling specific performance of the contract for the sale of land. One good reason for the conclusion is that it is pleaded in the complaint and appears in evidence that the plaintiff has gone upon the land and built his logging road for the purpose of removing timber from said premises. By the explicit provisions of the contract, upon which the plaintiff relies, this entry upon the land causes the entire balance due on the purchase price to become immediately due and payable. It is hornbook law that specific performance of a contract to sell land cannot be compelled unless the plaintiff shows that he has performed, or tenders performance of all the covenants on his part necessary to be fulfilled before a conveyance can be required. Thus far the plaintiff has tendered only $1,500 of the total purchase price of $5,500. It is specific, or complete, performance which courts of equity decree. They will not make piecemeal of a controversy and direct partial performance, leaving the remainder for future adjudication. For this reason *Page 393 alone, if for no other, he is not entitled to specific performance.
I dissent, however, from the reasoning of Mr. Justice RAND in denying relief to the plaintiff. The central idea of his opinion is that there was no delivery of any contract so as to call for performance on the part of either party. However natural this theory may seem, yet it is erroneous. Taking both instruments as constituting one, because they relate to the same subject matter, we must consider them both together. The parties either made a contract or they did nothing whatever. It is very plain that they inaugurated a procedure which, if it had been complied with by both parties, would have resulted in a conveyance of the land by the defendants to the plaintiff. A common-sense view of it is that they made an escrow agreement involving certain conditions and delivered that agreement so as to take effect and bind them both according to its terms. As said by Mr. Justice HARRIS, inFoulkes v. Sengstacken, 83 Or. 118, 129 (158 P. 952, 163 P. 311), —
"A consummated escrow involves two deliveries: (1) To the depositary; and (2) to the grantee."
In the sense there indicated, there was a delivery of the papers sufficient to support a binding escrow agreement between the parties.
Evidenced as it was by both these documents, there were mutual covenants. It is true that the plaintiff was called upon to approve the title. On the other hand, as a condition precedent to that approval, the defendants bound themselves to furnish an abstract of title, the same to show title in them free and clear from all encumbrances, and Kinney was to have five days after the receipt of that kind of an abstract *Page 394 for the purpose of examining the same. Beyond controversy, the defendants have never furnished such an abstract. Hence they are in no position to rescind even the escrow agreement, because they did not make it possible for the plaintiff to approve the title. No one pretends that the defendants could have withdrawn the papers from the bank prior to thirty days from the date of the letter to the bank. Why? Because there was a contract between the parties controlling their conduct to the contrary. But that contract contained mutual covenants and neither party could put the other in default or rescind without first performing, or tendering performance, on his part. Reading both papers together, furnishing a perfect title abstract was a condition to be performed by defendants precedent to plaintiffs approving the title. To furnish an abstract showing perfect title necessarily implies that the defendants must perfect the title, else they could not produce the requisite abstract. On the other hand, suppose the plaintiff had approved the title and had not taken the contract from the bank, would the agreement have been void for want of delivery? The answer is no, and the reason is that both the parties had done some act indicating recognition of the writings as a binding stipulation. In law this amounts to delivery, irrespective of whose hand clutches the paper.
As said by Mr. Chief Justice LORD in Fain v. Smith, 14 Or. 82,84 (12 P. 365, 367, 58 Am. Rep. 281):
"* * The delivery is defined to be that part of the operation in executing the deed by which the grantor signifies his intention when and how it is to take effect. It is required by the law, in order to demonstrate beyond doubt that the party making the deed meant it to be his act. No precise formula is required. It is not necessary there should be an actual *Page 395 handing over of the instrument to constitute a delivery. A deed may be delivered by doing something and saying nothing, or by saying something and doing nothing, or it may be by both. * *
"Nor is it essential to the complete execution of the deed, that it should be delivered to the party intended to be benefited by it. It may be valid, although it remains in the possession of the grantor."
The principle thus enunciated applies to the escrow agreement to be extracted in this instance from a consideration together of the two documents. As in the case of all other mutual covenants, neither party to an escrow contract has a right to disregard it or to declare the other party in default without first fulfilling his own engagement or at least tendering performance on his part.
It is argued that defendants could not make perfect title, but there is no evidence of that, and besides they themselves allege that they are the owners in fee simple of the land. Still further, if it becomes impossible for a vendor to convey the land he had agreed to convey, he must allege it in defense of a suit for specific performance: Columbia River Co. v. Smith, 83 Or. 137 (162 P. 831, 163 P. 309). No such defense appears in the record. It is also contended that the plaintiff has refused the title tendered and hence cannot come into court and demand a conveyance of the same title. This reasoning is fallacious, because there is no evidence or pleading that the plaintiff refused the title. All that appears is that the plaintiff directed attention to certain defects in the abstract which are practically confessed. To furnish an abstract is but one of the terms of the contract. To object to the abstract is not necessarily to object to the title. As said by Mr. Chief *Page 396 Justice LORD in Kane v. Rippey, 24 Or. 338 (33 P. 936):
"* * It may be true that the title tested by the original record and conveyances and other facts not upon the face of the abstract is good and free from defects. It may be true that the curative acts will obviate the objections suggested, and the statute of limitations bar the uncanceled encumbrance, but these are matters which may involve litigation or judicial inquiry to determine the validity of title. The title, as disclosed by the abstract, is not the good title the defendants agreed to convey."
Because the separate covenant of the defendants to furnish a clear abstract is one which may be waived, provided he has complied with the contract on his part, the plaintiff is entitled to compel conveyance of the land despite the fact that the abstract tendered was not such a one as the contract called for. This is what he has attempted to do, in accordance with the rule laid down by Mr. Chief Justice EAKIN, in Kuratli v. Jackson,60 Or. 203, 209 (118 P. 192, 1013, Ann. Cas. 1914A, 203, 38 L.R.A. 1196, and note):
"There is no dissent from the statement that plaintiff is entitled to a decree of specific performance, if he is willing to accept a deed from the vendor alone, with covenants as broad as those called for in the contract; and he may then resort to his legal remedy, if he has one, against the vendor."
No tender of title deed has ever been made to the plaintiff. He has never indicated that he would not accept such a deed. He has only objected to the abstract, concerning which a separate covenant was made.
In brief, the defendants have not performed their part of the contract, considering the transaction as an *Page 397 escrow agreement, in that they did not furnish the abstract. Under those conditions they had no right whatever to rescind even the escrow agreement. The situation is one where neither party has shown a right either to rescind or to compel specific performance of the principal contract. The situation is like that portrayed in Annand v. Austin, 86 Or. 403 (167 P. 1017, 168 P. 725), and Wurfel v. Bockler et al., 106 Or. 579 (210 P. 213), where neither party having performed the part of the contract required of him, the suit for specific performance was dismissed without prejudice.
Time was not made the essence of this contract, and, even if it had been, the defendants waived it by not acting promptly on the failure of Kinney to approve the title thirty days after April 23d, the date of the letter to the bank. They gave no notice to the plaintiff of their intention to withdraw the papers or to rescind the contract. By their delay until June 15th before they acted, it may be said they lulled the plaintiff into a sense of security, and they cannot then act without notice to him and giving him a reasonable opportunity to perform what was required of him. The stipulation that time is the essence of the contract, even if it had been made in this instance, required both parties, plaintiff and defendants, to act accordingly or they will be deemed to have waived it: Graham v. Merchant, 43 Or. 294 (72 P. 1088); Gray v. Pelton, 67 Or. 239 (135 P. 755);Johnson v. Berns, 111 Or. 165 (209 P. 94, 224 P. 624, 225 P. 727); Denning v. Bailey, 112 Or. 621 (229 P. 912). To turn the plaintiff out of court absolutely and irrevocably is to put a premium upon the conduct of the defendants as covenant breakers. *Page 398
The opinion of my Brother RAND is illogical and inconsistent in affirming the decree of the Circuit Court removing a cloud from the title of the defendants. A cloud is a claim which is apparently valid but in fact without foundation. It is thus defined in 11 C.J. 920:
"An outstanding claim or encumbrance which if valid would affect or impair the title of the owner of a particular estate, and which apparently and on its face has that effect, but which can be shown by extrinsic proof to be invalid or inapplicable to the estate in question."
If the reasoning of the opinion is correct, there was no delivery and hence no contract upon which any claim could be based. Under that theory there never has been any outstanding claim or encumbrance. Hence, it does not present even an academic question for our decision. The parties either made a contract or they did not make one. If they did not make a contract it is not incumbent upon them to perform anything. On the other hand, if they made a contract they are each bound to perform it. In that the defendants failed in performance of one of their covenants in the contract, they are not in a position to either enforce or rescind. The plaintiff is equally remiss in performance on his part, and that justice, in which equity delights, ought to move us in accordance with Annand v. Austin and Wurfel v.Bockler, supra, to dismiss the plaintiff's suit without prejudice, and with it in like manner the cross-bill of the defendants seeking to remove a cloud from their title.
BEAN, J., concurs with this opinion. *Page 399