234 N.W. 59 | N.D. | 1930
The plaintiff, as party of the first part, executed a land agreement with one Herrington as party of the second part, for 320 acres of land, principally upon what is known as crop payments, but all to be paid on or before November 1, 1926. Possession was given Herrington and he made some payments.
This land agreement provides that after the sum of $8,000 with interest and taxes has been paid the plaintiff "will then sell said lands to second party, his heirs or assigns, and upon request at its office in St. Paul, Minnesota, and the surrender of this agreement will execute and deliver a deed for said land. . . ."
Further: "That time is of the essence of this agreement and of every part thereof, and that not only the payments of the sums herein provided to be paid at the times and in the manner herein provided . . . but also all and singular the other items, conditions . . . to be kept and performed by the second party are conditions precedent to the right of the second party, his heirs or assigns, to purchase said lands . . . and to the obligations of the first party to sell the same."
Further: "It is also mutually understood and agreed that at any time when any default shall exist on account of which first party shall have the right, at its option as hereinbefore provided, to declare this *337 contract null and void, the first party instead of exercising such option, may elect to treat the sums herein provided to be paid to be immediately due and payable, and in such event second party promises and agrees upon demand to pay the full amount thereof remaining unpaid and accrued interest, and first party may collect the same in a suit at law or otherwise."
Also: "It is also mutually understood and agreed that this agreement and the terms thereof shall bind and inure to the benefit of the first party and its successors and assigns and the second party, his heirs, executors, administrators, and assigns, but no assignment of this contract or any interest therein shall be valid unless endorsed hereon and signed by second party. . . ."
Under the contract title remains in the vendor as no deed was to issue until all payments were made. The agreement contains the further provision that "title and possession of all grain and crops raised in each year shall be and remain in said first party the vendor."
The vendee assigned his interest in this contract to the defendant; and plaintiff claims that by such assignment the defendant assumed and agreed to pay for the land in accordance with the terms of the contract.
The plaintiff decided not to exercise the option of declaring the "contract null and void" but commenced this action to foreclose the contract in a manner similar to the foreclosure of a real estate mortgage, and asked judgment for the amount due under the contract, that this amount be declared a lien against said land, that an order for sale of the land issue, and in case the land did not sell for the amount of the judgment, that he have judgment against the defendant for the deficiency. The trial court found that the sum of $7,356.83 with interest and some unpaid taxes was due under the contract; that the vendee "with the consent of the plaintiff assigned the said contract to the defendant and transferred all of said Geo. W. Herrington's right, title and interest in and to said real estate and premises and said contract to the said defendant . . ." and "the said assignee defendant . . . has paid to the plaintiff the sum of about $3,490.27 and there has been paid upon said contract a total sum of $4,240.36 together with such compliances with the terms of said contract with reference to improvements as has been heretofore made." The court however failed to find *338 specifically that there was a written acceptance of the assignment executed by the defendant. The trial court determined "that said land contract is in default, and plaintiff is entitled to a decree of foreclosure thereof and termination and forfeiture of the equitable interest of said defendant," but refused to enter an order for deficiency judgment in case the land did not sell for the sum due under the contract.
The plaintiff appeals, asking for a trial de novo. As stated by the respondent, "the sole issue of law is whether the plaintiff as vendor is entitled to take a deficiency judgment against the vendee or his assignee after a sale of the land described in the contract." There is practically no dispute in the evidence. The respondent points out that the record regarding the assignment to him and his assumption of liabilities under the contract is not as clear and precise as it might be, but he does not go to the extent of denying his acceptance of the assignment. In this respect testimony by deposition was given which might have been objected to as hearsay. However such objection was not made and therefore it is before us. Deponent testifies that the defendant did assume the liabilities. This acceptance it appears was on a printed form, and is substantiated by secondary evidence, to which there was no objection; nor was there any objection to the court making a finding to that effect. The defendant knew the contract contained a provision requiring vendor's approval of the assignment, and a provision making the terms binding on him; he acted under this contract and paid practically all that was paid on it. Hence there is no real controversy on the facts.
"Where a sale of land is evidenced by a contract only, and the purchase price has not been paid, and the vendor retains the legal title, the parties occupy substantially the position of mortgagor and mortgagee. The vendor has a lien for his purchase money by virtue of his contract." Roby v. Bismarck Nat. Bank,
The general rule is that where in a contract for sale, the vendor reserves title "the transaction creates in equity the relation of mortgagor and mortgagee." See 11 Am. Eng. Enc. Law, 2d ed. 131, and the general remedy of an equitable mortgagee is by bill in equity for a foreclosure of his mortgage (Id. 143). This lien has all the incidents *339
of a mortgage. Birdsall v. Cropsey,
Our own statute, § 6861, gives the vendor a lien upon the land sold independent of possession for the amount of the purchase price remaining unpaid and otherwise unsecured. This lien is of no value to him if it cannot be foreclosed. Under the provisions of §§ 6720 and 6721 such a lien may be foreclosed. Being a lien with all the incidents of a mortgage it may be foreclosed as a mortgage.
Where a foreclosure is had by action it is governed by the law for foreclosure of mortgage by action. It is said that the court of equity in foreclosing the lien has no authority to order judgment for a deficiency. Under the provisions of § 8100, Comp. Laws, where an action is brought for the foreclosure or satisfaction of a mortgage "the court may direct the issuing of an execution for the balance that may remain unsatisfied after applying the proceeds of such sale." Under the provisions of § 8102 such action may also be taken against one whose obligation also secures the mortgage debt when this other person is made a party to the action, as in this case.
Our attention has not been called by either side to any specific decision of this court involving the question herein: but each side cites decisions claimed to be in harmony with its theory of the case. Respondent cites the case of Woodward v. McCollum,
While Schafer v. Olson,
"While not passed upon in this state, there is no doubt as to the authority of the court to enter this twofold judgment in effect a personal judgment and a decree in equity combined, yet its rendition in such form cannot change the nature of the action of which it is but the conclusion."
This court further said referring to the trial court:
"The court having equitable jurisdiction . . . it was clothed with a right to render such judgment as was necessary to completely adjudicate all matters involved in the cause of action litigated. It saw fit to enter a judgment personal in form as it would do in a law action as a part of the relief adjudged and in aid of its main decree in equity. But the judgment remains primarily one of lien foreclosure directed *341 against specific real property; in effect by force of law governing foreclosures, a judgment to sell and deliver such property, the subject-matter of the action."
We are not so much concerned with the nature of the action as set forth in the pleadings so long as the facts show the plaintiff is entitled to relief. In Graham v. McCampbell, Meigs, 52, 56, 33 Am. Dec. 126, 128, the court says:
"We are not able to draw any sensible distinction between the cases of a legal title conveyed to secure the payment of the debt, and a legal title retained to secure the payment of a debt. In both cases courts of Chancery consider the estate only as security for the payment of the debt upon the discharge of which, the debtor is entitled to conveyance in the one instance and a re-conveyance in the other."
The respondent argues this action must be one in specific performance and therefore no judgment for deficiency can be obtained. If for specific performance the provision of the contract to be performed is the payment of the money and upon tendering of deed the vendor is entitled to a judgment for the money. He offers the deed and demands his money. The vendee has an equitable interest in the land because he has paid on the contract. There is nothing in the theory of specific performance which prevents a personal judgment. In an action for specific performance against the vendee in a contract for a deed judgment may be rendered against the vendee for the total amount of the purchase price due. See Paulson v. Hammond,
There is nothing in the contract which required him to look to the land alone for the purchase price. In the case of Roney v. H.S. Halversen Co.
In Abbott v. Moldestad,
"Where one contracts to convey real estate to another upon the payment of the agreed price, retaining the title until payment is fully made, it is not very important, in our opinion, what the security so retained is called, whether a trust, a vendor's lien, an equitable mortgage, an equitable security, or any other kind of a lien. . . . Where the title is retained by the seller as security for the payment of the debt, the security is, in this country, very generally regarded as possessing all the essential features of a mortgage, and the vendor as standing for all personal purposes as mortgagee in relation to the vendee. . . . So regarded, there can be no doubt of the power of the court. to render a deficiency judgment where, as in the present case, the sale of the vendee's interest in the property fails to bring enough to satisfy his debt."
Appellant does not dispute the findings of the court as to the amount due on the contract or the amount of payments made, neither does he raise any question as to the terms which the court gave to the vendee as time and manner of payment. These are assumed by this court to be correct. The complaint states appellant performed its part, and so a deed is tendered or will be forthcoming when purchase price is paid.
The order for judgment must be modified so as to provide that, in case the purchase price is not paid and the land is sold and there be a deficiency, judgment be rendered against the defendant for the amount of the deficiency. The case is remanded to the lower court for judgment in compliance with this decision.
BURKE, Ch. J., and BURR, NUESSLE, BIRDZELL, and CHRISTIANSON, JJ., concur. *344