*1 PEARCE et al.
SHURTZ
No. 7634.
Supreme of Utah. Court
April 1954. May 4, Opinion
Dissenting Halliday,
H. Hаrtland Fred Finlin- L. son, City, appellants. Salt Lake Wallace,
Rawlings, Black, Roberts & Black, City, respondent. Salt Lake
McDONOUGH, Justice.
Ivan Call sold a ranch Frank Lewel- len giving him a bond for taking deed and in promissory return a note executed placed Lewellen. These items were in escrow. The bond for deed recited the terms of agreement and contained a days forfeiture clause effective comply Lewellen’s failure to certain with expressly terms. This forfeiture clausе provided upon default the seller’s election became at once tenant at will of the seller and the escrow had note, right deed, to return the for bond abstracts, and contract to It the seller. “agreed was also that time was of es- agreement” sence of this and that “it agreed understood and that if the seller accepts payments from the on this according other than to the terms mentioned, doing herein then so way alter the will terms of the con- tract as to forfeiture men- hereinafter tioned.” complex
Various transactions occurred practical purposes for all are abridged assigned as follows: Lewellen equity in the bond for deed to Shurtz perform was to the conditions and who bond, under such assume assigned one-half of his interest Appellant since contends sold then Wright Shurtz Wright. only person оn Lewellen was the liable Real under a Uniform ranch to Johnson payment promissory for note demand delin- Payments became Estate Contract. him, upon should have been that he should bond for deed quent the terms under for have been notified of the period day days the 60 before and two default, and that he should have run Call as- the forfeiture clause joined for defendant a suit in the quitclaimed his interest signed and pоssession This based on the forfeiture. deed, Lewellen’s and endorsed bond might contention if the action be sound promissory note over tO' were other than Un unlawful detainer. expired period After the Pearce. detainer, however, lawful is an action Shurtz, Wright, plaintiff served notice possession remove a tenant from and is them tenants at declaring and Johnson primarily against possession. days them 5 vacate giving quiet is not similar to action title premises. No demand anyone wherein with interest should Shurtz, Lewellen, or Wright, joined. Neither is an ac it similar to was served on Lew- and no notice promissory tion note. Title 104- in unlaw- brought action Plaintiff ellen. 60-7, U.C.A., provides: *3 104-60-3(2), U.C. detainer under ful Title person “No other than the tenant Shurtz, A., Wright, against 1943, John- premises, of the and subtenant if there judgment T entered lower court son. íe occupation one in the is actuаl plaintiff. raise three Defendants for the premises when the action is commenc- appeal. questions on ed, need party be made a defendant give failure no- (1) Whether the to proceeding, in the nor any pro- shall upon Lewellen or make demand tice abate, ceeding plaintiff nor be detainer the action of unlawful made nonsuited, for nonjoinder any premature. might have been made a * * defendant; original
(2) bond for Whether mortgagor-mortgagee provision to gave deed rise This is indicative of the na- relationship. ture the unlawful detainer action and of the fact that failure to serve demand acceptance Whether the (3) upon Lewellen or notice in this case did delinquent constituted not result in the action premature. being provision. discussed in These issues are the order questiоn The second raised on appeal stated. is whether a landlord-tenant rela-
127 tionship agreed upon. defendant than those between There upon contends Appellant resulted circumstances under which the default. re- relationship inequitable sults would be mortgagor-mortgagee so and un- that just equity retains title but that a is created where the seller court of would be relief, possession give takes a authorized to gives to but the case presents in promissory hand contingency. to be no such note for the time title to the made at the end of which ‡ i{i property cas- will be Several transferred. Foxley Rich, transaction in v. su- position support cited es are pra, strikingly like that A here. con- reject Marquardt we not them. do See for the tract sale of land agreed at the 499, Fisher, 256, 77 Or. 295 P. A.L.R. $3,500 price of was entered into. Seven 265 and cases cited anno- and discussed each, payable notes for year $500 beginning page of 77 tation A.L.R. apart, by purchaser. executed pay- held In a situation where is until title The notes and a from the deed seller were complete conclusion to general ment is placed escrow, an agreement with be drawn is that a sale or a conditional parties provided de- relationship mortgagor-mortgagee exists. due, fault when the deed however, contract, expressly The instant and notes were to be returned to the sell- performance
provided failure retain, er who was entitled as rental “become at conditions would any payments prior for the land once tenant at of the seller.” This will the default. adopted undoubtedly to ob- case, In the instant tain the benefits of the unlawful detainer stipulated made, to be and evidenced express provision statute. Such was the note, the escrowed in the Call-Lewellen contract and this re- court $1,000 per year contract amounted to agreement. not within our write the years. found, The trial court that the province meaning other torture some finding supported by record, because of for deed es- out of the bond the reasоnable rental value of the land in provisions. retaining As and title crow per Hence, volved month. $150 Rich, Foxley we stated provision in the contract for retention 672; 99 P. *4 prior seller of made to dec “ *** parties them- Where the of forfeiture laration cannot be held to stipulate result what the of a a penalty, selves for a but is rather particular reasonable, stipulated, a contract shall liquidatеd of one breach Guild, ordinarily damages. Christy have be, courts no au- consequences thority impose other acceptance in re- rely upon that only could not obtain could
Since Johnson gard contract. under to his own give Shurtz what could Shurtz became a Lewellen from assignment ac- Appellant’s he claim that because election, we plaintiff’s at will tenant quired suit the interest of Shurtz relation that а landlord-tenant conclude enlarged, was interest is commenced his was served notice ship at the time existed for- receive inasmuch as did not Shurtz 104— hence Title that on defendants en- mal the seller .intended to notice that applicable. U.C.A., was 60-3(2), prior con- force the condition of the time tract, fact is without merit. The mere ap contention third delinquent payment accepted that a prior de acceptance of pellant is that the not sufficient to constitute of waiver linquent constituted 300, Re- waiver of the condition. Sec. contention provision. The the forfeiture Contracts, defines the rule statement of the cu Appellant is in rejected. must be being: as de that his position maintaining of rious “Acceptance perform- of defective between the contract arose under fаult promise ance of a condition or does that Wright and himself and Shurtz operate assent to receive an on only obligated one Lewellen was the except performance further similar contract; at the same the Call-Lewellen acceptances where such successive of time, acceptance Call that the insists performance justify the belief late constituted in 1946 of рerformance of that character is sat- clause “time the essence” isfactory, thereby and induced $1,000 payment due him. The as to performance rendering materi- 1, 1949, the first annual December ally changes position. Wright-Shurtz payment due under “Acceptance of defective install- upon expiration Johnson performance ments of is insufficient period, according 60-day grace justify evidencе to a belief that such contract, the elec Johnson, at terms performance satisfactory, unless a sellers, became a tenant at tion of reasonable would infer from Likewise, upon Wright and Shurtz. acceptances perform- successive contract, the Call-Lewellen default ance of that character was satisfac- tory. question at will became tenants This is Wright and Shurtz the answer depends to which on the differing Pearce, un who held the of Call facts of each case.” knew, Even if contract. der indicate, evidence does not case, In the instant Call, acceptance payment by late he out of the three made accepted late, *5 subsequent them us, were are not before the cross-com- plaint payment on That the was not time. late of by have been dismissed by satisfаctory him prejudice. to t'he seller is evidenced without required the fact that he an additional $50 respondent. Costs the con- reinstating for consideration tract at that time. There is evidence WOLFE, J., WADE, J., C. concur. Johnson, appellant, misled by this transaction which occurred three CROCKETT, J., dissents. prior years acquired to the time when he assuredly, an interest contract and HENRIOD, J., participate does not by breaching he was not led it into herein. own with Wright and Shurtz. of this The facts case there indicate that CROCKETT, waiver of
was no the time Justice. condition the contract. I dissent. I believe that no forfeiture of contract was effected. Christy Guild, supra,
In recog- we principle acceptance nized de- The facts essential are stated in the main linquent payments may in a well result opinion; only add necessary I those that are ordinаry waiver of the “time es- is of the expression to the of this dissent. by sence” clause since such conduct the assignment Pearce took from Call vendor has led the vendee into the belief after the payment days past was 58 due that the vendor will continue to waive the (2 days expiration short of performance strict of the contract. Such period) apparently express for the purpose еxist, a situation regardless does not here forfeiting defendants out proper- of the effect of the the con- ty. payment for No.demand was made dur- acceptance tract that of late ing grace period and Pearce made none. not constitute a waiver of the days few He waited but a after the grace payment specified dates, for the vendee period expired, thеn gave only had one no- was not misled into by such belief the ven- tice, attempted he into which telescope dor. that all notice theretofore made judgment is The affirmed with mod- this forfeited, that the defendants were ification: that the note of held Lewellen will, and tenants at a demand they by be surrendered cancel- days. within five upon Based vacate Foxley Rich, lation. See supra. proceeded in unlawful detainer. Even rights of the defendants under the Uni- this one notice not served nor in form Real Estate Contract entered into any way communicated Lewellen, since clause ordinary the essence’ ‘timeis of purchase note given original has led the ven- conduct the vendor still such he was property will con- dee into belief that the vendor
liable. performance to waive the strict tinue to forfeiturе right insisting upon his In However, places emphasis the contract.” prop- possession the contract and on the statement that *6 the in language this erty, plaintiff relies accepted late. contract: ordinarily pay- “ may well be that one * * * any pay- to make failure a not be sufficient to constitute would ment due, or become the same shall when ments pro- of the “time is of the essence” waiver be thereafter, shall days the Seller 60 within if we look at the vision a contract. But and in obligations law from all released here, picture fairly it cannot be said entire the convey property, and said equity to analogous a situation where damages that is to liquidated Buyer as shall forfeit monthly theretofore installment on a contract have payments which all * * * Buyer contract, paid on this The thousand dollars was late. will of tenant at at a becoming once yearly payment, and in that sense should * * * is of that time agreed It is Seller. payments be considered as the agreement.” of this the essence therefore, year; for the a full year delinquent, which entire of 1946went up- favor look with law does not The constituted one-third of all of interpretation liberal A on forfeitures.1 the contractual placed both should bе sixty- Long made on the after the contract. in parties of the conduct provisions and the day period' expired, partial pay- prevent- the view them with to relation following July ments were made in all the forfeiture, This is possible.2 if ing a September; they accepted, apparently were pos- summary remedy of more so where recognition objection, without which was detainer, well as as unlawful under sеssion buyer in by the that the contract was still sought.3 damages, are treble effect. It would not unrea- force and be buyer suppose he to notes, sonable opinion properly prevailing The “ * again, * * at the same or least that do could delinquent pay- acceptance of or notice indicate that he demand some of the a waiver result in well ments v. Pacific Mutual Life Insurance 574, Loftis Mills, 221 P. 62 Utah 2. v. 1. Howоrth 532, 134; Calif., 38 Utah 114 P. Apartment In Co. 165; & Hotel v. Munson Apartment 109; and Hotel 13, v. Invest Munson Co., 218 P. Utah 62 vestment supra. Co., ment Tidings Hink of America v. Church Glad 306, Spencer, Utah, P.2d 1016. Se ley, Ariz. 226 243 See Perkins 3. e Cook, Hope Farms, 446; v. Good Wash.2 and Forrester Moeller 206. 292 P. 215 P.2d d could not him given do so would before binding.” so, If all contracts would Soon arbitrary the harsh and terms as forfei- provisions contain such way and the would upon. ture would though be insisted Even open be left chiсanery for manner all was not the this delin- when Likewise, deceit. if the seller has in fact occurred, concedes, quency as waived imposition of the terms strict must, Johnson, assignee, was entitled of the (time essence) assignors, includ- lulled security into sense in ing right of had accrued reliance thereon, fact, a waiver existed in by reason parties conduct of and a recital the contract that there is the timе he took assignment. no waiver change would not that fact. This principle is well recognized; Corbin writes: argument the additional $50 “ * * * paid which was in 1947 evidences the fact express that an that the late satisfactory condition promise promises of a or seller, pure is conjecture. It is based the contract can not be eliminated on neither evidence nor reason: The fact waiver, or by conduct constituting an that the accepted late estoppel, wholly ineffective. The July September before the $50 promisor power still has the to waive paid part September. in the latter *7 condition, the byor his conduct estop to provision relies the himself from insisting upon it,, to the the contract that: same extent that he would have had “ power this if there had been * * * ho such accepts if the pay- Seller provision.”4 * * *
ments other than according * * * to the terms it way will in no I think that the conduct of the sellers terms of the alter the contract as to constituted a waiver of the is of the “time ” * * * forfeiture. provision, essence” notwithstanding the quoted provision above of the contract might this sort Waiver of be considered as appears which to be a against covenant fraud, akin to somewhat in the sense that such result.5 For the seller parties could not contract to in effect the fraud out by “lie in wait” existence, permitting is, that a statement in sixty- entire the con- day period grace by to go that fraud did not tract exist in its forma- without making make or giving any tion could not that so. One demand could not notice whatso- binding condition in ever, make a a contract give and then to that forthwith notice that fraudulent, this contract is “evеn if still being strictly the forfeiture was insisted Contracts, Corbin, (1951). Hirose, Sec. 763 Gonzales 5. See 33 Cal.2nd P.2d 793. could either payment, the seller conduct had offered course such a upon, to amounts it, the con- accept instance arbitrary in the elect to which and high handed as to be effect; tract in full force and equity would remain should which no court extreme But before of or could elect refuse it. After the enforce. condone or election, the seller makes such it is obvious provision, the essence” is of “time uncertain; buyer’s the that status is giving without not be reinstated could oppor- actually a at will that he was not tenant reasonable and a notice other until after election obliga- such seller and comply with his contractual tunity to buyer thereof. Until notice here. tions,6 done not put will, in the status of tenant at he was why the unlaw- a further reason There is position being in the amenable to the grounded. is not detainer action ful summary ejectment provided in the unlaw- pro- take the two essential did not Plaintiff ful detainer statute. necessary: effect a step first, to cedural suggested It be that the distinction into put defendant in order buyer the seller could not declare the will, and at being a tenant the status will and a tenant at treat him as one at the him second, giving treat him as such instant, is technical. The same answer to days. Plaintiff within five to vacate notice found fact that unlawful de- apply the interpret and attempting to summary remedy itself is tainer and that in such a manner language strictly one who uses it must and technical- self- be would that the forfeiture ly comply requirements with the of the law. making is, default executing; seller is attempting Where assert the plus еxpiration of payment, arbitrary remedy of both forfeiture and auto- would period, obligations the seller’s detainer, he unlawful should not be aided matically expire the defendant become by allowing shortcuts. though Even However, it must re- will. a tenant at particular advantage buyer to the seems became membered apparent, occupy he is still entitled to option of the seller. will at the tenant necessarily purchaser that the seller follows status of must until the election is election, notify and his such make are forfeited. And actually actually the latter would be- before until he is a tenant at will thereof he can- *8 at will. This seems neces- a tenant not be treated as such. He come be able to tender, delinquency, waiver, If after claim sarily so. make a or in some Stewart, 12, 473, Airways P.2d v. 68 Utah 249 231 363. See P. Columbia McBride 6. Stevens, Tidings 215, 114; 984; Church of v. 80 Utah America v. 14 Glad P.2d supra; Apartment Hinckley, v. & Scott v. California Munson Co., Hotel Investment supra, al., Cal.App.2d Farming 232, Lundberg, 4 v. and Kohler et Co. Alfrey 850; Richardson, P. 204 Okl. 590. from practical way HENRIOD, himself extricate Justice. to the He entitled
unfortunate situation. Appeal a robbery from conviction in opportunity try to do so. case tried to the Court. Affirmed. having I that no believe case, At close state’s defend- effected, relationship the artificial ants moved dismissal on several created, tenancy at will not and the grounds, all which assailed the suffi- action unlawful detainer should be dis- ciency of the evidence. Defendants offered missed. proof and there no contradiction of adduced,
the evidence
by.a
save as denied
plea.
guilty
m.,
p.
At about 10:30
after attending a
game
Ogden,
hall
the complaining wit-
ness
cigarettes,
went to a tavern for
where
lieved to be a blow. He was taken to an isolated area near the railroad tracks and river, where three defendants beat him. m., At 2:30 about a. railroad fireman saw nude, appearing emerge man from brush, followed another pulled grabbed him and him back. Police were summoned and arrived shortly and found standing two defendants behind a car, where, feet at their was found defend- cigarette lighter. ant’s watch and One de- fendant was observed to throw something bushes, proved to be shorts be- Wallace, Peterson, Adams & Ogden, for longing pants to the witness. His appellants. nearby, pockets all of the of which were on, Callister, Gen., turned inside Further Atty. out. one of the E. R. Walter L. Gen., Budge, Atty. respondent. found Asst. defendants was astraddle the wit-