117 P. 1064 | Mont. | 1911
delivered the opinion of the court.
This is a suit in equity, brought to secure a .decree canceling a certain contract. Issues were joined upon the original pleadings and the cause brought to trial before the court sitting with a jury. By agreement of counsel and the approval of the court, after a portion of the evidence had been taken the jury were discharged, the parties permitted to reform their pleadings, and the cause was thereupon tried and submitted to the court. The plaintiffs filed an amended and supplemental complaint — referred to in the brief as the substituted complaint — and the defendant filed an answer thereto which contains certain admissions, certain denials and four affirmative pleas denominated “counterclaims.” From the record it appears that on May 1, 1907, the plaintiffs and the defendant entered into a contract in writing, by the terms of which the plaintiffs agreed to sell to the defendant, and the defendant agreed to purchase from the plaintiffs, certain real estate and personal property situated near Billings, Montana. The purchase price agreed upon was $37,000, payable in six installments: $2,000 upon the execution of the contract, and the balance, with interest, payable in five annual installments, the last payment to be made May 1, 1912, each of the
1. The first contention made is, that the complaint does not state a cause of action; that it is deficient in the following particulars: (a) It does not appear therefrom that the notes representing the deferred payments were tendered to the defendant
(c) It is further urged that the complaint is defective in failing to allege that plaintiffs have tendered to defendant the money paid by him under the contract. Upon the trial of this cause in the district court, and upon this appeal, both parties have proceeded upon the assumption that it is necessary for the complaint to contain an allegation that the plaintiffs have returned, or offered to return, to the defendant the moneys paid by him to or for plaintiffs’ use, or an equivalent allegation, and we shall determine this appeal upon the theory- of the parties as thus presented, reserving the question whether in a suit to cancel a contract of this character it is necessary for the plaintiff to place the defendant in statu quo, or to allege in his complaint that he has done so or made tender. Assuming for the purposes of this
2. It is insisted by appellant that at the time this action was commenced he sustained toward respondents the relationship of mortgagor to mortgagees, and that plaintiffs’ only remedy was by foreclosure, under section 6861, Revised Codes. This contract is not in form a mortgage but an agreement to sell; however, it is insisted that since notes were given for the deferred payments, the vendee let into possession and the legal title retained by the vendors, equity will treat the transaction as a mortgage, and cases are cited which appear to lend support to this view. An examination of the authorities, however, will disclose the distinguishing characteristic in every instance. Every such case must be determined on its own facts and circumstances; for it is a cardinal rule in equity that the intention of the parties must give character to their transactions. In Western Nat. Bank v. National Union Bank, 91 Md. 613, 46 Atl. 960, the court said: “An equitable mortgage results from different forms of transactions in which there is present an intent of the parties to make a mortgage, to which intent, for some reason, legal expression is not given in the form of an effective mortgage; but in all such eases the intent to create a mortgage is the essential feature of
3. It is next insisted that the relationship existing between the parties was that of landlord and tenant at will, and the notice to quit, given but eleven days before suit, was insufficient under section 4502 of the Revised Codes, and that this suit was brought prematurely. In speaking of the relationship existing between the parties to a contract to purchase real estate prior to default, the author of the article on Landlord and Tenant, in 24 Cyc. 884, says: “While in many cases a person in possession of premises under an executory contract of purchase has been said to be a tenant at will of the vendor, the rule supported by apparently the better authority is that, in a strict sense, the relation of landlord and tenant does not arise under such circumstances, it being said that there can be no implied contract from which the relation of landlord and tenant may arise in opposition to the express contract of sale.” And, speaking of the same subject after default, the author says: “After default in, or abandonment of, the contract of sale, further occupancy by the vendee may raise an implied tenancy at will, or, according to some cases, at sufferance. But in the absence of a provision in the contract of sale for the creation of a tenancy, such as an express agreement to pay rent upon default, the failure of the purchaser to comply with his contract, or of the vendor to fulfill upon his part, will not cause the occupancy under the contract to be regarded as having been as tenant.” It is elementary that the relationship of landlord and tenant arises out of contract, express or implied. (24 Cyc. 876.)
There is not any contention made — -and there could not be— that this contract in terms creates the relationship of landlord and tenant; but apparently the theory is that after default the vendee holds possession at the pleasure of himself or of the vendor, and by some process is converted into a tenant at will. There are authorities which uphold this view, but with them we
4. Complaint is made of the ruling of the trial court in striking out the so-called counterclaims. In the first of these it is alleged that the plaintiffs orally represented to the defendant that the land — the subject of the agreement — comprised 365 acres, whereas in truth and in fact there were but 340 acres; that plaintiffs knew the representations to be false but defendant believed them to be true, relied upon them and in consequence thereof executed the contract. It is alleged that the land was valued at $100 per acre, and defendant insists that, whether the contract be canceled or not, he should be given credit for $2,500 because of this deficiency in the quantity of' land. Assuming
5. The second so-called counterclaim is predicated upon the refusal of plaintiffs to permit the defendant to sell forty acres of the land for $6,000 and to approve the sale and credit defendant with the- amount of this purchase price. It is alleged that prior to the execution of the written contract of May 1, 1907, plaintiffs and defendant had negotiated for the sale and had reached an oral agreement. It is then alleged that at the time this oral agreement was made, the plaintiffs contracted orally to permit the defendant to sell quantities of the land in question for not less than $100 per acre, and to approve such sales and credit defendant with the amounts of such sale prices upon his contract price for the entire property. A breach of this oral agreement is then alleged, and defendant claims that he is entitled to be credited with $6,000. But this contract, if made, was superseded
6. In the third so-called counterclaim stricken out by the court, it is alleged that at the time the contract was made the plaintiffs represented to defendant that the ditches for the irrigation
The trial court disregarded the questions arising upon the alleged failure of defendant to keep the buildings insured or to pay the assessments upon the ditch stock; but found that the defendant had breached the agreement by his failure to make the payments due on May 1, 1908, and the payments due on May 1, 1909. The court also found that the value of the use and occupation of the premises by the defendant was $5,000, while the total amount paid by defendant to and for the use and benefit of plaintiffs was approximately $3,000. These findings are not attacked at all; and assuming that they are fully supported by the evidence, the defendant is not in a position to complain; for had the item of expense for repairing the ditches and the full amount of damages claimed by him as the result of injury to his crops been credited to him, it would still be found that he had received, in the use and occupation of the premises, an
7. Our conclusions upon these specifications render it unnecessary to consider the remaining assignments, further than to say that we do not find any reversible error. *
The judgment and order are affirmed.
Affirmed.