Wandell v. Johnson
227 P. 58
Mont.
1924
Check Treatment
MR. JUSTICE HOLLOWAY

delivered the opinion of the court.

This action was commenced in 1923 to recover installments alleged to be due upon the purchase price of real estate. The ¿plaintiff prevailed in the lower court, and defendant appealed from the judgment.

In January, 1919, the parties to this action entered into an agreement in writing the material portions of which -are the f ollowing:

“If the said party of the second part [defendant Johnson] shall first make the payments and perform the covenants hereinafter mentioned on Ms part to be made and performed, ,the said party of the first part [plaintiff Wandell] hereby covenants and agrees to convey and assure to the said party *75of the second part, in fee simple, clear of all encumbrances Whatever by a good sufficient deed” 163.73 acres of land in Richland county, particularly described. “And the said party of the second part, hereby covenants and agrees to pay to the said party of the first part the sum of forty-eight hundred dollars” as follows:

“The sum of $480.00 on the first day of November, 1920, hnd the sum of $480.00 on the first day of November of each and every year following until the full amount due under the terms of this contract shall have been paid, with interest at the rate of six per cent per annum, payable annually, on the whole sum remaining from time to time unpaid; and to pay W1 taxes, assessments, or impositions that may be legally imposed upon said land, subsequent to the year 1917. And in case of failure of the said party of the second part to make either of the payments, or interest thereof or any part thereof, ior perform any of the covenants on his part hereby made and entered into, then the whole of said payments and interest shall, at the election of said first party become immediately due and payable, and this contract shall, at the option of the party of the first part, be forfeited and determined by giving to the said second party thirty days’ notice in writing,” which notice “shall be sufficient to cancel all obligation hereunto on the part of the said first party and fully reinvest him with all right, title and interest hereby agreed to be conveyed, and the party of the second part shall forfeit all payments made by him on this contract, and all his right, title and interest in all buildings, fences or other improvements, whatsoever, and such payments and improvements shall be retained by the said party of the first part, in full satisfaction and in liquidation of all damages by him sustained, and he shall have the right to re-enter and take possession of the premises aforesaid.”

It is admitted that Johnson took possession of the land immediately upon the execution of the contract and retained ^possession thereafter; that he paid the interest and $438 upon *76the first installment of the principal, but failed to pay anything further.

It is the contention of the defendant that the agreement lacks mutuality of obligation, and in any event forfeiture of the contract, retention of the money paid, and re-entry into possession constitute the only remedy available to plaintiff.

1. The contention that the agreement lacks mutuality is predicated upon the language employed in the first paragraph quoted above. It is insisted that Wandell did not bind himself to sell the land, but agreed only to sell if Johnson first performed fully all the terms mentioned to be performed by him, and since Johnson failed to perform fully, Wandell never assumed any liability whatever.

Speaking generally, mutuality of obligation is an essential ingredient of an enforceable contract (Raiche v. Morrison, 37 Mont. 244, 95 Pac. 1061), and mutuality is lacking, of course, when only one of the contracting parties is bound to perform (6 Cal. Jur. 211; 13 C. J. 331). Whether a contract is .bilateral or unilateral depends upon the intention of the parties, and when, as in this instance, the contract is in writing, the intention is to be ascertained from the writing alone, if ¡possible (sec. 7530, Rev. Codes); that is to say, the language (of the contract is to govern its interpretation if the language is clear and explicit and does not involve an absurdity (see. 7529).

No one would have the temerity to suggest that the language of this agreement is either clear or explicit. Indeed, dt would be difficult to conceive of a contract expressed more clumsily; hence we are required to resort to the usual rules /of construction to ascertain, if possible, what the parties meant by the language they employed. (Sec. 7528.)

It is a general rule that “a contract should be construed in such a way as to make the obligations imposed by its terms mutually binding upon the parties, unless such construction is wholly negatived by the language used.” (Minnesota Lumber Co. v. Whitebreast Coal Co., 160 Ill. 85. *7731 L. R. A. 529, 43 N. E. 774; 13 C. J. 539; see. 7534, Rev. Codes.)

Paraphrased, the first provision of this agreement declares that if Johnson first performs all the terms by him to be performed, Wandell will convey the land by good and sufficient deed. Defendant lays much emphasis upon the word “if,” and though primarily it imports a condition (Alexander’s Estate, 149 Cal. 146, 85 Pac. 308), it means “at the time when; whenever” (Funk & Wagnall’s Standard Dictionary); and the particular meaning assigned to it will depend upon its- association with other terms employed in the Same instrument (Sutton v. West, 77 N. C. 429). That Johnson was absolutely bound to pay the purchase price of the land does not admit of doubt; and while it is true that Wan-dell did not in express terms agree to sell, the only fair inference from the entire agreement is that both parties intended that he should do so and understood that he promised to do so. In 39 Cyc. 1207, the general rule immediately applicable is stated as follows: “Where there is a promise to sell or to purchase, as the case may be, it is not necessary in order that there may be mutuality that there shall be an express promise on the other side, but it is sufficient if upon a fair consideration of the agreement such a promise can be implied.”

These parties did agree expressly that if Wandell elected to declare a forfeiture of the contract for breach by Johnson, thirty days’ notice should be sufficient for that purpose and sufficient to reinvest Wandell “with all right, title and interest hereby agreed to be conveyed.” If this is an executory contract for the sale of the land, Wandell parted with and Johnson secured the equitable title. (39 Cyc. 1302.) If defendant’s theory be accepted, Wandell did not part with anything; but to say that he did not part with anything does violence to the language employed, for in that event there would not be -anything with which he could be reinvested. Furthermore, Johnson went into possession and paid a part of the pinchase price, which was accepted by Wandell. These *78considerations lead us to the conclusion that the parties intended this agreement to be an executory contract for the sale of the land in question; that Wandell bound himself to sell and that the execution and delivery of the deed only were contingent upon Johnson performing his part of the contract; in other words, that the initial provision of the contract .means that when Johnson fully performed, Wandell would execute and deliver the deed (Sharp v. Behr (C. C.), 117 Fed. 864), and the fact that the agreement provides for a forfeiture of the contract and of all payments made upon the purchase price does not affect the mutuality of the obligation (Le Vine v. Whitehouse, 37 Utah, 260, 109 Pac. 2).

2. It is contended further that the contract itself provides an exclusive remedy, hence plaintiff cannot maintain this action, and Wing v. Brasher, 59 Mont. 10, 194 Pac. 1106, is relied upon to support the contention. In the case cited the contract specifically provided certain remedies for the vendor in case of the vendee’s default, and concluded: “And that should the said party of the second part [vendee] default in any payments that may become due and payable under this contract, this contract shall be the only course of settlement thereunder.” No such provision is contained in the contract now before us. On the contrary, the right to declare a forfeiture of the contract and payments already made is expressly declared to be “at the option of the party of the first part.” In Alexander v. Wingett, 63 Mont. 254, 206 Pac. 1087, the contract involved provided for a forfeiture in ease of default by the vendee, but did not provide that the remedy by forfeiture should be exclusive. In disposing of the same contention as that now made, this court said: “We are of the opinion that the forfeiture clause in the contract of sale was for the benefit of the vendor; and that the failure of the vendee to make the payments when due did not render the contract void so as to preclude an action for the purchase price of the real estate or so much thereof as was due when this action was commenced.” The decision in that case is conclusive upon the question now under consideration.,

*79The provisions of the contract that the payments made by Johnson and the improvements placed upon the land by him “shall be retained by the said party of the first part in full satisfaction and in liquidation of all damages by him sustained, and he shall have the right to re-enter and take possession of the premises aforesaid,” could become operative only in the event that Wandell elected to declare a forfeiture. The language is too plain to admit of controversy ■ over its meaning. A forfeiture was not declared; hence Wandell was free to treat the contract as in full force and recover the amount of the installments then due. (Rock Island L. & M. Co. v. Fairmount Town Co., 51 Kan. 394, 32 Pac. 1100; Rourke v. McLaughlin, 38 Cal. 196.)

The judgment is affirmed.

Affirmed^

Mr. Chief Justice Callaway and Associate Justices Galen and Stark concur. Mr. Justice Cooper, being absent, did not hear the argument and takes no part in the foregoing decision.