230 N.W. 219 | S.D. | 1930
Lead Opinion
On April 7, 1920, plaintiff, who owned a tract of land in Codington county containing from 70 to 80 acres, entered into a contract to sell it to defendant for $80 an acre, the purchase price being named as $6,400, based on 80 acres; but the contract contained a provision that the total price was to be adjusted at final settlement on November 1, 1920, “according to the record acreage on file in the office of the county auditor and register of deeds of said county.” Defendant paid' on the contract $1,000 at the time of the execution of the contract and was to pay $1,400, “more or less,” on November 1, 1920, and the balance of $4,000 to be paid on November 1, 1925, secured by a mortgage on the premises. Defendant went into possession, and on November 1st paid the interest due at that date, but nothing on the principal. Defendant claims that he made numerous requests of plaintiff to have the land .surveyed to ascertain the acreage, but nothing was ever done by plaintiff to ascertain the shortage; that defendant finally made some sort of measurement himself and found it measured only 69 or 70 acres. He therefore got a draft for $600, which was the amount he claimed would be due November 1st on the basis of the tract containing 70 acres, and deposited this draft in a bank which was authorized to receive and transmit to plaintiff, residing in Illinois, the amount of the payment due November 1st.
By the terms of the contract defendant acquired a vested equitable estate in the land, of which he could not be deprived except by decree of court or mutual consent of the parties, or in pursuance of strict compliance with the terms of the contract on the part of the vendor. Phillis v. Gross, 32 S. D. 438, 143 N. W. 373; Reid v. Gorman, 37 S. D. 314, 158 N. W. 780.
Plaintiff’s right to the payment due November 1st, and defendant’s right to receive a warranty deed to the land with ■ an abstract showing a merchantable title, were mutually dependent covenants, and plaintiff could not put defendant in default or
In Hauert v. Kaufman, supra, the situation was quite similar to that in the present case. Plaintiff brought action to' quiet title against defendant, a vendee under a land contract like that in the case at bar. Defendant in his answer set up a counterclaim, setting forth facts showing that plaintiff wrongfully attempted to cancel and forfeit the contract and demanding judgment for the money that defendant had paid under the contract. We held that plaintiff having wrongfully sought to terminate the contract, “appellant had the right to elect to treat the same as mutually abandoned, and to recover the $1,000.00” that he had paid.
Plaintiff contends there was more due him on November 1, 1920, than $600, and that as defendant had only offered to pay that much, it would have been an idle act for him to tender a deed and abstract, but it clearly would equally have been an idle act for defendant to have tendered any sum less than $1,400, which plaintiff now concedes was $366 more than was due him, to say nothing of plaintiff’s demand for taxes in the sum of $202.73 to which he was not entitled. If thus appears that the parties bad arrived at a stage where any further move by either of them under the contract would have been an idle act. Plaintiff unjustifiably declared the contract canceled and determined. Defendant promptly surrendered possession and demanded the return of what he had paid. Plaintiff now comes into a court of equity asking to have the cloud on his title created by the contract removed, but he confesses that his termination of the contract was founded upon defendant’s failure to comply with his own unjustifiable demand for more than $500 in excess of what was due him-. He who seeks equity must do equity. Rev. Code 1919, § 48. Plaintiff cannot insist upon a forfeiture provided by a contract which he himself has unjustifiably terminated. In this action he is only entitled to have the cloud of the contract removed from the land upon a proper adjustment of the equities between himself and defendant, that is, upon the return of the money he received on the contract, 4 — Vol. 57, s. D.
-The judgment and order appealed from- are affirmed.
Dissenting Opinion
(dissenting). I regret that I am unable to agree with my associates. It seems to me the principles involved in this case are of such vital importance to real estate transactions in this state that the issues ought to be squarely met and decided. I think this action was maintained on the theory of the holding in Hauert v. Kaufman, 45 S. D. 132, 186 N. W. 555, to' the effect that if one give notice of cancellation of a contract for failure to' make payments as agreed, under a provision of the contract that a cancellation may be declared for such cause, without first tendering a deed, so as to put the purchaser in default, he thereby repudiates the contract and the purchaser may recover back all payments made by him and rescind the contract. This case seems to' me to- be so contrary to equity and so out of harmony with the law of contracts that- it ought to be at the earliest opportunity overruled. I think the facts of this case are such that we are in duty bound to either affirm the Hauert v. Kaufman case by deciding this on the authority of that case, or by overruling that case and reversing the judgment here. There is no room to evade the issue. I cannot agree that the facts are as stated in the majority opinion. The majority say: “Defendant claims that he made numerous requests of plaintiff to have the land surveyed to ascertain the acreage, but nothing was ever done by plaintiff to ascertain the shortage; that defendant finally made some sort of measurement himself and found it measured only 69 or 70 acres. He therefore got a draft for $600, which was the amount he claimed would be due November 1st on the basis of the tract containing 70 acres, and deposited this draft in a bank which was authorized to' receive and transmit to plaintiff, residing in Illinois, the amount of the payment due November 1st.”
The facts as I gather them are these: The contract provided for a payment of $6,400 on the 'basis of $80 per acre, with this pro
Defendant is given a lien for what he has paid and will get the land thereunder, because in present depreciated values that is all it is worth, subject to the accumulated taxes the purchaser has refused to pay. Perhaps, I feel the injustice of this more, because I have had experience as a real estate broker and know the temptation to speculate in other people’s property on thin margins, and now to give to the broker a recovery of his thin margin after inducing the seller to let him out of the purchase in the good-faith belief he can keep the margin, which is wholly inadequate as damages, does not seem just. In this case judgment was rendered in favor of the purchaser for $1,010.68, and he was awarded execution not only against the land but a general execution against any property of the seller. A bandit can get only what he may seize. The law, if this- be the law, is more efficient. It can rob one of both present and future acquisitions.
This action is one to determine adverse claims. Section 2848, Rev. Code 1919, provides: “The defendant in his answer must set forth fully and particularly the origin, nature and extent of his claim to the property; and may set forth his rights in the property as a counterclaim and demand affirmative relief.n The purpose of the action is to settle by a decree the rights of claimants to the property. Defendant’s answer does not set up an adverse claim to the land. Under the provisions of the contract, plaintiff could give notice of its termination, and declare a forfeiture of all money paid
The first decision of this court in the case of Hauert v. Kaufman et al., supra, I think was plainly wrong. The case was twice before this court on appeal. While I cannot approve the reasoning in the later decision reported in 50 S. D. 203, 208 N. W. 981, the result therein announced was right, not for the reasons assigned, but because of the decision on the earlier appeal (opinion reported in 45 S. D. 132, 186 N. W. 555), which became the law of that case on the second appeal. As a precedent, however, I am not willing to adhere to the rule announced in Hauert v. Kaufman et al., 45 S. D. 132, 186 N. W. 555, 556, because I do not consider it sound. In that case this court considered the covenants of the vendor and vendee in their relation to each other as dependent or indepedent and concluded that the covenant to convey and the covenant to pay were 'dependent and that neither party to the contract could put the other in default without tendering performance on his part. This court said: “If they were dependent, then * * * respondent had no power to declare appellant’s rights * * * forfeited.” So far I approve. But here the court fell into error by treating a declaration of forfeiture as a rescission or abandonment of the contract. This probably occurred because of the form of the action and a failure to distinguish between an action to quiet title and one to enforce a forfeiture provision of a contract. On first thought it may seem that one who declares a forfeiture and then sues to quiet title is seeking to sustain the forfeiture. But that is not the case. The object is to remove the cloud of the contract.
The only authority cited in the Hauert Case to support the conclusion that an erroneous declaration of a forfeiture constituted a breach of the contract entitling the purchaser -to a refund of payments made was Cleary v. Folger, 84 Cal. 316, 24 P. 280, 281, 18 Am. St. Rep. 187. In that case the California'Court was construing a contract containing this clause: “In the event of a failure to comply with the terms hereof by the said party of the second part [the purchaser], the said party of the first part shall be released from all obligations, in law or equity, to convey said property, and said party of the second part shall forfeit all right thereto.” This clause does not provide for a forfeiture of the money paid, but only a •forfeiture of the right to a deed. That court held time the essence of the contract and that the failure -to make the payments required ternmtaied the contract. Exactly the reverse of the situation that obtains in this and the Hauert Case, where the contract is not terminated. The 'California court was deciding the right to
In the case at bar no such situation arises. This court held in Ink v. Rohrig, 23 S. D. 548, 122 N. W. 594, that the covenants of the vendor to convey and of the vendee to pay are dependent and neither can be placed in default until the other tenders performance. If the vendor does not tender a deed and demand payment when due, he waives the time of payment. Speer v. Phillips, 24 S. D. 257, 123 N. W. 722; Burchfield v. Hageman, 35 S. D. 147, 151 N. W. 47. Under such circumstances there can be no forfeiture as such, abhorrent to a court of equity. A notice of forfeiture under a contract giving the vendor the option to either insist upon the performance of the contract, or if payments are not made as per contract to waive further payments, cancel the contract, and retain payments already made, amounts to no more than an offer on the part of the vendor to release the purchaser from further obligation under the contract if he will surrender payments. If this offer is accepted (and in this case defendant admits his acceptance), he ought to be bound by the new contract he has thus made. If he does not accept, he has the option to perform on his part and compel specific performance by the vendor. So long as such right is not lost there is no occasion for a court of equity to relieve from a forfeiture. The purchaser may relieve himself by performing and compelling performance by the vendor.
I feel that a grave injustice has been done by the decision in this case, but being unable to prevent it, I content myself with this expression of my views.