186 N.W. 818 | N.D. | 1922
Lead Opinion
Statement
The defendant has appealed from a decree canceling and foreclosing a contract for a deed. The evidence has not been settled nor certified. Upon the judgment roll and findings the conclusions-of the law and the judgment of the trial court are questioned. The facts, as they appear therefrom, are: On July 23, 1918, plaintiff, through a contract for a deed, agreed to sell and to convey to the defendant approximately one section of farm lands in Ramsey county. The defendant agreed to pay therefor $35,392.50, as follows: The assumption of the Prosser mortgage, a lien upon the lands, for $7,840, together with interest thereon after November 22, 1918; the assignment of a contract for a deed upon-a section of land in Montana subject to liens for $2,765, defendant to receive a credit of $7,235 therefor; the conveyance of 160 acres of land in Benson, county, N. D., subject to liens for $1,900, defendant to receive credit of $1,800 therefor. The balance of the purchase price ($18,517.50, with the interest thereon at 6 per cent.) the defendant agreed to pay by the delivery of one-half of all grain to be sown and grown on the lands beginning with the crop for the year 1919;. such grain to be delivered in designated towns or on board cars at defendant’s cost and expense, and the proceeds thereof applied first in the payment of interest, and then of the principal. The defendant further agreed to pay all taxes and assessments upon the lands commencing with the year 1918. The contract provided that until the delivery of
The plaintiff instituted action December io, 1920. The complairit alleges defaults of the defendant as follows: Failure to pay the Prosser mortgage, either principal or interest; taxes for 1919 and 1920; failure to pay the entire interest due on the balance of the purchase price or any part of the principal thereof; failure to deliver or account for the crop of 1920; failure to farm the premises in a good and husbandlike manner. It further alleges that the Prosser mortgage is about to be foreclosed; that the defendant occupies the premises and will permit such foreclosure; that the contract constitutes a cloud upon plaintiff’s title; that the procedure at 'law for the cancellation thereof will require at least six months, and that the land should be prepared for the crop season of 1921; that accordingly plaintiff applies to a court of equity for relief to the end that the contract may be canceled and declared null and void and decreed to constitute no lien, and that plaintiff be awarded possession of premises on or before March i, 1921.
The answer alleges, among other things, that the land was exceedingly foul when defendant took possession; that he has farmed it in a good and husbandlike manner, so as measurably to free the land of its foul condition; that he has repaired the buildings and dug a well on the land at an expense of approximately $1,500; that he has actually invested in such land, including his equities in the Montana and Benson county lands, $13,603.30; that the contract does not contain all of the agreements between the parties; that after the preparation of the contract' plaintiff assured the defendant that no default would be claimed by reason of failure to make payment of principal or -interest on the Prosser 'mortgage or taxes on the land; that, if the defendant was unable to make such payments, the plaintiff would take care of them and simply add the amount thereof to the contract. He further alleges waiver of the alleged defaults; that plaintiff accepted the payment of $907.25 from defendant on December 1, 1920, after the Prosser mortgage and interest became due; that plaintiff further permitted defendant to proceed with plowing and other farming operations in the fall of 1920; that defendant
The action was tried May 9 to 11, 1921. The trial court found that the improvements made by defendant did not enhance the value of the land to any great extent, excepting the well to the extent of at least $600; in general, concerning farming methods, that defendant has acted in good faith and has gone to large expense in order to farm the land; that the price received for the 1920 grain is the price to be credited the defendant for the reason that he requested the grain to be held; that the defendant is in default concerning the 1919 and 1920 taxes, excepting as to the portion of the latter not yet delinquent, and in the payment of interest on the Prosser mortgage for 1919 and 1920 in the sum of $1,0x0, which was paid by plaintiff on December 1, 1920; that there was no understanding that plaintiff was to make payments of interest or principal on such mortgage when due or that no default would be claimed in the event of defendant’s failure to pay the interest or the mortgage; that it was, however, a part of the agreement that plaintiff would do what was necessary to renew the Prosser mortgage if defendant 'was unable to pay the same; that plaintiff frequently requested defendant in 1920 to pay the interest on such mortgage and the taxes; that the Montana and Benson county properties, at their present market values, and considering the amount of money defendant has put into the same, are not sufficient to compensate the plaintiff for the use and occupancy, or for the rental value, of the land involved, or more than enough to pay him for the loss in damages actually sustained, if he be compelled to take back the land. The court further finds, pursuant to a statement incorporated in the findings, that the total interest accrued on the purchase price of the land up to December 1, 1920, amounted to $2,456.94; that the defendant’s debt, including 1919 and 1920 taxes and the amount
As conclusions of law1 the trial court determined that the defendant was in default by reason of the failure to pay taxes and interest on the Prosser mortgage and to deliver wheat out of the crop of 1920; that the plaintiff was entitled to retain the property and money received as his damages under the contract; that the plaintiff was entitled to one-half of the 1921 crop less one-half of the thresh bill; that the plaintiff should do what was necessary towards renewing the Prosser mortgage, and to that extent the contract was reformed; that the defendant was entitled to make good the defaults on or before September 15, 1921; otherwise that plaintiff should have immediate possession and should be fully reinvested with all title. Pursuant to such findings, judgment was entered on August 19, 1921.
On September 14, 1921, upon application of the defendant, reciting his inability to make good the defaults by reason of inability to thresh, the court granted an extension of time until October 5th and a stay ■of execution. Again, on October 3d, upon a similar application by the defendant for an extension of time in order to enable him to complete threshing, haul, and market the grain, the trial court extended the time within which to make good the defaults until October 20, 1921. On October 26, 1921, upon application of the plaintiff showing failure of the defendant to perform the conditions of the judgment, the trial court ordered judgment to be made final and defendant’s interest in the land and right of redemption absolutely at an end.
The defendant contends that the complaint alleges, and the plaintiff has elected to state, a cause of action for rescission and cancellation; that, accordingly,' the plaintiff, pursuant to his election, cannot rescind the contract and retain the benefits derived; that the trial court erred in entering a judgment of foreclosure; that the plaintiff, by accepting $907.25 on December x, 1920, and the crop of 1920, waived the right to insist on foreclosure for the defaults then existing; that no notice of
Decision
Manifestly, in the absence of a settled case, this court cannot try anew the questions of fact involved. National Cash Register Co. v. Wilson, 9 N. D. 112, 81 N. W. 285. There can be no review of the findings of fact without a settled case; the facts found by the trial court must be accepted as true. This court may determine whether the conclusions of law made by the trial court are warranted by the facts as found. Thuet v. Strong, 7 N. D. 565, 75 N. W. 922; Brown v. Skotland, 12 N. D. 445, 97 N. W. 543; Brandenburg v. Phillips, 18 N. D. 200, 202, 119 N. W. 542. The presumption obtains that the evidence supports the material facts alleged in the complaint, and that the findings are supported by the evidence. Whitney v. Akin, 19 N. D. 638, 643, 125 N. W. 470; Regent State Bank v. Grimm, 35 N. D. 290, 294, 159 N. W. 842. It may further be presumed that additional matters covered by the findings of fact and not embraced in the issxtes formed by the pleadings were properly determined by action of the parties at the ttial. Raad v. Grant, 43 N. D. 546, 169 N. W. 588, 590. However, error appearing affirmatively in the judgment roll requires no settled case for the review thereof. Savold v. Baldwin, 27 N. D. 342, 345, 146 N. W. 544.
The contention of the defendant that the complaint is insufficient to sustain the cancellation and foreclosure of the contract as determined by the trial court is without merit. The rule is well .settled that a complaint challenged for the first time upon appeal as to its sufficiency 'will be liberally construed, and, if any defects therein could have been remedied by amendment in the trial court, will be sustained. Ditton v. Purcell, 21 N. D. 648, 656, 132 N. W. 347, 36 L. R. A. (N. S.) 149; Jensen v. Clausen, 34 N. D. 637, 645, 159 N. W. 30. The evident intent
Bikewise the contention that plaintiff waived rights of foreclosure by accepting payment on December i 1920, cannot be sustained in the absence of the evidence. The trial court found that the sale of the 1920 grain was delayed upon the request of the defendant.
No statutory written notice of intention to cancel the contract was required in order to maintain this action. Chap. 151, Laws 1917; Raad v. Grant, 43 N. D. 546, 169 N. W. 588, 592. The trial court found that the plaintiff repeatedly gave notice to the defendant of intention to cancel the contract if defaults were not made good. The trial court found that the Montana and Benson county properties, upon present market values and considering defendant’s equities therein, were insufficient to compensate plaintiff for use and occupancy or for rental value of the land, or to pay damages sustained by plaintiff. The trial court concluded that the plaintiff was entitled to retain payments made by defendant on the contract. The contract contains an express stipulation so providing in the event of default. From the findings it appears that the interest accrued, upon the balance of the purchase price up to December 1, 1920, amounts to $2,456.94; the interest on the Prosser mortgage paid by the plaintiff is $1,010; the amount of the unpaid taxes for 1919 and 1920 is $711.59. This makes a total of $4,178.53, indebtedness accrued since the date of the contract, owing the plaintiff. The defendant has paid $2,212.29. Adding to this amount the value of the well as found by the court, $600, makes a total of $2,812.29 paid, or to be used as a credit, in favor of the defendant.
Accordingly the defendant has failed to meet subsequent accruing indebtedness, even allowing a credit for the well, to the extent of $1,-366.24 up to December 1, 1920. Presumably the interest accruing on the balance of the purchase price since December 1, 1920, and the 1921 taxes will considerably exceed in amount the value of one-half of the 1921 crop retained by the plaintiff. The findings do not disclose the value of any equity remaining in the Benson county or Montana properties, whether possessed by the plaintiff or the defendant, nor whether any right or title is still retained in such properties either by the plaintiff or the defendant. From the findings it appears that the defendant has contributed no money or property so as to constitute an equity in the balance of the purchase price due upon the contract. The value of the
Howevei-, we are of the opinion that the - defendant should be accorded, upon equitable principles, a further time beyond that allowed by the trial court within which to make good the defaults found. The plaintiff did not proceed by the statutory method of cancellation. Through such method the defendant would have been entitled to a six months’ period of redemption. The plaintiff sought, by an equitable action, to secure speedy relief and more appropriate action. As it has happened through the course of litigation, the time within which plaintiff secured possession of the land under the decree was delayed beyond the statutory time that would have occurred in a statutory cancellation. The plaintiff has sought the aid of equity, and the plaintiff must, and this court should, as far as the present record will permit, accord to the defendant equity. It is manifest, in a period of deflation of land prices such as the parties assert to exist, that loss by one or both of the parties cannot be escaped as far as present money values are concerned. Upon such basis the defendant will suffer loss, if he makes good the defaults; and, if he does not, he will suffer loss equally or more. Upon such basis the plaintiff will suffer loss if such defaults are not made good. Accordingly the plaintiff is not in a posi
In the findings it appears that a credit of $9,035 for the Benson county and Montana lands was given by the plaintiff upon the purchase price of the land involved herein. It is true that the trial court found that the properties at their present market values, considering defendant’s investment therein, are insufficient to compensate the plaintiff for his losses sustained. However, the trial court does not determine their present market value or the present value of defendant’s equities therein. Although upon the record w'e are unable to hold that it was error to decree to the plaintiff the retention of the credit given by the defendant for the Benson county and Montana lands, nevertheless it does not appear affirmatively that full justice is done by retaining such credit and decreeing a strict foreclosure within a comparatively limited time. In such circumstances equity should do full justice, and not by halves. If, now, a foreclosure through sale of the premises should be ordered, it might simply serve purposes of either jeopardizing or destroying the rights and interests of both parties; those of the defendant by imposing an insurmountable burden of costs and the payment of the full obligation; those of the plaitniff by denying the present enforcement of existing defaults and by greatly lessening the value of his lien. A strict fore
It is so ordered.
Dissenting Opinion
(dissenting). Truly this is a Shylock action. On October 1, 1918:
The plaintiff contracted to sell defendant a section of land in Ramsey county, N. D., at $55 an acre................................$35,392.50
He sold the same subject to a mortgage for ........................ 7,840.00
He received and gave credit for a section of Montana land........ 7,235.00
He gave credit for land in Benson county................................ 1,800.0c
*721 From the crops of 1919-20 he received paymnet........................ 2,413.20
He received a good well on the land ........................................ 600.00 —with considerable other improvements.
And on December 10, 1920, within 10 days after receiving nearly $1,000, he commenced .this action to forfeit the land contract and all payments because of the nonpayment of illegal and excessive taxes for two years and the non-payment of about $1,000 on the mortgage which defendant assumed. The action is under a Shylock clause in the contract which provides for such a forfeiture. Defendant answers that because of that clause he refused to sign the contract, and that to induce him to sign the plaintiff agreed that he would not take any advantage of the forfeiture, and that he himself would advance the money to pay interest on the mortgage and to pay the taxes. Defendant by answer asks that the contract be reformed and corrected so as to express that agreement; but the trial court has ignored that issue and all the defendant’s equities and has given a judgment of forfeiture and an order ousting the defendant and giving plaintiff possession. Surely that seems like a mockery of equity and justice, and it may not be covered up by a multitude of words. Of course, the defendant acted the part of a sucker when he relied on the oral agreement to protect himself against the forfeiture clause. Still he had a right to rely on it and to rely on the court to reform the contract. No evidence is needed to show that the forfeiture clause is unconscionable, and here is the plain statute:
“For the purpose of revising a contract it must be presumed that the parties thereto intended to make an equitable and conscientious agreement.”
The court has wholly ignored that statute and the request to revise the contract. Hence the duty of this court is to reform the contract by striking out or holding void the forfeiture clause. We must not ignore the rule that equity never enforces a penalty or a forfeiture. We must not ignore the plain Words of the statute, which is that equity will not enforce a penalty or a forfeiture in any case. Comp. Laws 1913, § 7x88. The plaintiff has no right to claim a forfeiture. He has received about one-third of the purchase price of the land. His position is that of a mortgagee. He holds the legal title of the land only as security for the balance of the purchase money. Bis remedy is that of a mortgagee, to obtain a decree of foreclosure and sale of the land for the sum due, subject to redemption as provided by statute.
