Jandric v. Skahen

• Citation: 235 Minn. 256,50 N.W.2d 625
• Decision Date: 07 December 1951
• Docket Number: No. 35561,35561
• Parties: JANDRIC et al. v. SKAHEN et al.
• Court: Supreme Court of Minnesota (US)

Page 625

50 N.W.2d 625

235 Minn. 256

JANDRIC et al. v. SKAHEN et al.

No. 35561.

Supreme Court of Minnesota.

Dec. 7, 1951.

Syllabus by the Court.

1. Acceptance of payment after default under a contract for deed is inconsistent with the right to insist upon a forfeiture. Forfeitures are not favored, and the waiver principle has always been available under certain conditions in order to defeat them. A vendor may waive his right to insist upon a forfeiture by acts done after the expiration of the 30-day period in a contract for deed, and his acceptance of the amount in default as a payment on the contract constitutes such a waiver as a matter of law.

2. Retention of the amount in default by the vendor or his agent for a period of 14 days, under the facts and circumstances involved, where all parties concerned were in close proximity to each other, Held sufficient evidence to support an inference that plaintiff had formed an intent to accept the payment.

D. D. Daly, St. Paul, for appellants.

Bouthilet & Daubney, St. Paul, for respondents.

FRANK T. GALLAGHER, Justice.

Appeal from a judgment of the municipal court of St. Paul denying restitution of real estate.

Plaintiffs are husband and wife, as are defendants. They will be referred to hereinafter respectively as plaintiff and defendant.

On June 20, 1950, plaintiff sold certain real estate to defendant under a contract for deed. Plaintiff proved a default in the terms of the contract, service of the statutory 30 days' notice of cancellation of the contract, and failure to make up the default within the 30-day period. As a defense, defendant maintained that plaintiff had waived his right to insist upon a forfeiture. The issue of waiver was submitted to a jury, which returned a verdict for defendant.

Defendant failed to make the monthly payment due under the contract on September 15, 1950, and also failed to pay the first half of the taxes payable that year. The notice of cancellation of the contract on the ground of these defaults was served on defendant on September 28, 1950. On October 28 (the last day of the 30-day period), defendant left a check for the amount in default at the office of plaintiff's attorney, Leo J. Maher. This check was mailed to plaintiff on the following Monday, October 30, and upon receipt thereof plaintiff deposited it in his account for collection. Payment on the check was refused because of insufficient funds, and defendant was notified of this on November 2, 1950. The following day, defendant appeared in Maher's office and offered the amount in default in the form of a certified check for part and the balance in cash. Maher refused to take the payment on the ground that the 30-day period had expired and that he had no authority to jeopardize the position of his client. However, after consultation with defendant's attorney, Maher agreed to take the payment with the understanding that it would not be a payment or reinstatement of the contract unless approved by plaintiff; and this understanding was incorporated into the terms of the receipt given defendant by Maher. Plaintiff was notified of this transaction on the same day, November 3, 1950.

From this point, the testimony as to what occurred is in conflict. Defendant testified that he had no further conversations or dealing with plaintiff or his attorney until November 17, 1950, a period of 14 days after he had given the money to Maher. Plaintiff's witness, Maher, testified that he spoke to defendant several times between November 3 and 17 and that each time he told defendant that plaintiff refused to accept the money and was insisting that the contract was at an end. Maher further testified that defendant requested him on such occasions to hold the money a while longer until he (defendant) could see plaintiff and see what he could do with him or until he could try and get a loan to pay off plaintiff. Plaintiff testified that he talked to defendant over the telephone on November 12 and that he told defendant that he had not accepted the money and 'was all through with this.' On November 17, the payment still in its original form was taken from its storage place in Maher's desk and returned to the office of defendant's attorney. This action was taken following a telephone conversation between Maher and defendant in which Maher told defendant that plaintiff would not take the money and that 'in fact, the night before he (plaintiff) had called me and said to get rid of it once and for all.'

1. M.S.A. § 559.21 provides for the termination of a contract for the conveyance of land by the vendor upon default in the terms of the contract by the vendee by service of a notice stating that the contract will terminate in 30 days unless during that time the vendee complies with the conditions in which the default has been made. The statute further provides: 'If, within the time mentioned, the person served complies with such conditions and pays the costs of service, the contract shall be thereby reinstated; but otherwise shall terminate.'

Before this statute became effective, if there was a failure to make payment on the designated date and the contract made time of the essence, the vendor could insist upon a forfeiture peremptorily cutting off the rights of the vendee. See, Graceville State Bank v. Hofschild, 166 Minn. 58, 206 N.W. 948. However, certain conduct on the part of the vendor would constitute a waiver of his right to insist upon a forfeiture. If the party entitled to enforce the default should, after default and with knowledge of the facts, treat the contract as still in force or should deal with the other party in a manner consistent only with a purpose on his part to regard the contract as still existing and not terminated by default, the right to enforce the default would be effectually waived. Quinn v. Olson, 34 Minn. 422, 26 N.W. 230. Upon tender of payment after the stipulated time, the vendor was faced with the choice between rejecting the offer and insisting upon a termination of the contract or accepting the offer. Cf. Blythe v. Kujawa, 177 Minn. 79, 224 N.W. 464. If he accepted the offer, it constituted conduct inconsistent with an intention to insist upon the forfeiture and amounted to a waiver of that right. Tingue v. Patch, 93 Minn. 437, 101 N.W. 792. That acceptance of payment after default is wholly inconsistent with the insistence upon a forfeiture is demonstrated by the holdings that the installments in default under such a contract are not collectible after the vendor has terminated the contract because of the default. Des Moines Joint Stock Land Bank v. Wyffels, 185 Minn. 476, 241 N.W. 592; Warren v. Ward, 91 Minn. 254, 97 N.W. 886. A similar...