Alfson v. Anderson

• Decision Date: 28 September 1956
• Docket Number: No. 7606,7606
• Citation: 78 N.W.2d 693
• Parties: Alfred ALFSON and Ella Alfson, Plaintiffs and Appellants, v. F. R. ANDERSON, and all other persons unknown claiming any estate or interest in, or lien or encumbrance upon, the property described in the complaint in this action, Defendants and Respondents.
• Court: North Dakota Supreme Court

Page 693

78 N.W.2d 693

Alfred ALFSON and Ella Alfson, Plaintiffs and Appellants, v. F. R. ANDERSON, and all other persons unknown claiming any estate or interest in, or lien or encumbrance upon, the property described in the complaint in this action Defendants and Respondents.

No. 7606.

Supreme Court of North Dakota.

Sept. 28, 1956.

Syllabus by the Court.

1. An option is an offer on the part of the optionor that does not become a binding contract until it has been accepted by the optionee within the time and upon the terms and conditions provided in the option. The acceptance must be unconditional and without modification or the imposition of new terms.

2. In determining the meaning of the provisions of an option with respect to its acceptance the court should ascertain the intent of the parties in the light of the language used and the surrounding circumstances.

3. An action to quiet title is essentially an equitable action.

4. Specific performance is an equitable remedy governed by equitable principles.

5. An oil and gas lease that provides that it shall remain in full force for a term of years and as long thereafter as oil and gas or either of them is produced from the land by the lessee vests in the lessee an interest in real estate.

6. A contract for the sale of real estate ordinarily imports mutuality. The vendor may be compelled by a decree of specific performance to convey according to the terms and conditions provided in the contract or the vendee may be compelled to perform specifically even though his performance consists only in the payment of the purchase price.

7. The same equitable principles that apply between the vendor and vendee of a contract for the sale of land are applicable between the parties to a contract to give an oil and gas lease which when executed would vest in the lessee an interest in real estate.

8. Lack of mutuality of remedy in a proposed lease is not always fatal to the right to specifically enforce a contract to make such a lease.

9. A contract to make an oil and gas lease which may be terminated at the will of the lessee is specifically enforceable if the contract contains important mutually enforceable provisions such as the payment of a substantial sum as consideration for making the lease and rental for the first rental period which are in themselves enforceable regardless of the surrender of the lease.

10. A party to a contract to execute an oil and gas lease cannot prevent performance by the opposite party and use that lack of performance as a basis for invoking Section 32-0408, NDRC 1943 as a defense to an action for specific performance.

11. The rule of mutuality either as a rule of equity or under Section 32-0408, NDRC 1943 has no application to contracts that have been fully performed by one seeking specific performance.

12. Sections 9-1224 and 9-1225, NDRC 1943 provide for a deposit in the name of the creditor for the purpose of extinguishing an obligation and do not apply to the validity or sufficiency of a tender that is a necessary precedent to the right to maintain an action in specific performance for the conveyance or leasing of real estate.

13. Laches as an equitable defense to the enforcement of a contract does not arise from delay or lapse of time alone. A party against whom laches is sought to be invoked must be actually or presumptively aware of his rights and fail to assert them against a party who has in good faith permitted his position to become so changed that he cannot be restored to his former state.

Cox, Pearce & Engebretson, Bismarck, for plaintiffs and appellants.

Burk & O'Connell, Williston, for defendants and respondents.

NORRIS, Judge.

This is an action to quiet title to some 1,960 acres of land in Williams County. The complaint is substantially in statutory form. Section 32-1704, NDRC 1943. The defendant F. R. Anderson by way of answer and counterclaim denies the material allegations of the complaint and alleges that in consideration of one dollar paid to them and in further consideration of the mutual execution of an option for a commercial oil and gas lease covering all of the land described in their complaint, the plaintiffs did on the 11th day of June, 1951, execute an option for an oil and gas lease, a copy of which is attached to and made a part of the counterclaim. The defendant Anderson further alleges that he exercised his option within the time and in the manner provided therein and that the plaintiffs have refused to comply, although the defendant Anderson has at all times been ready and willing to accept the lease and comply with the conditions of the agreement which he describes as an option. He asks the court to require the plaintiffs to specifically perform the agreement. The plaintiffs replied, denying the material allegations of the answer and counterclaim and specifically denying that any option was ever executed by the plaintiffs.

This is one of fourteen actions to quiet title involving similar agreements. These actions were tried together, although they are brought by different plaintiffs. This appeal, however, only involves the plaintiff Alfred Alfson and Ella Alfson, his wife. The case was tried to the court without a jury who found in favor of the defendant F. R. Anderson on his counterclaim and decreed specific performance of the instrument known as an option contract with respect to the land owned by Alfred Alfson but excluding from the decree a one-half interest owned by Ella Alfson in 480 acres and a one-half interest in oil and gasrights owned by the State of North Dakota in another 640 acres. The plaintiffs appeal and demand a trial de novo.

The appeal as presented to us involves questions of fact and law arising out of the execution and the effect of an instrument in writing at the top of which appears the title 'Option to Lease For Oil and Gas.' It covers about a sheet and a half of legal size paper. On the lower half of the second sheet are seven signatures. Attached to the instrument are four other sheets of paper bearing the purported signatures of approximately 65 persons. Opposite each signature is the word 'owning' followed by a description of real property in general terms. On the third signature sheet appears the signature of Alfred Alfson and opposite the word 'owning' is this description: 'app. 1960 acres in 154/102 (In Judson Twp).' Underneath his signature in parentheses appears the notation: 'Ella Alfson, his wife.' It is not contended that this is her signature. Also attached to the instrument are four forms of 'Oil And Gas Lease' which are identical in terms but very with respect to the location of land in that they name different townships. These leases are not completed and contain neither the names of lessors nor specific descriptions of land.

The issues of fact arise both with respect to consideration for and the intent with which Alfson placed his signature upon the sheet attached to the instrument. The evidence is conflicting as to whether the stated consideration of $1 was ever paid. Alfson contends that he was fraudulently induced to sign the instrument in that he was told that he was merely listing his property as being available for lease and that the signature page was with other sheets of paper on a clipboard and was not attached to the instrument designated as an option to lease for oil and gas. The trial court found against him on the facts and decreed specific performance as to the oil and gas rights owned by Alfred Alfson in Judson Township.

The first and primary issue of fact is whether the plaintiff Alfred Alfson signed the agreement referred to as an option knowing that he was making a binding offer to give Anderson an oil and gas lease upon his property as provided by the option or whether, as he testifies and contends, he signed his name on a sheet of paper below some other signatures because Anderson 'just wanted my name and the amount of acres I had and he wanted to know if they assembled this block if I would lease.' and that it was necessary to put down his name to verify the truth that he had 1,960 acres of land. Alfson also testifies that Anderson's agent who procured his signature 'mentioned they were leasing land. He talked like they were trying to assemble a block of land to lease.'

It appears that Anderson was attempting to assumble a block or blocks of oil and gas leases in nine townships in Williams County. To facilitate this operation he held various meetings which were attended by groups of interested landowners and at which he or his representatives explained the purpose of the operation that Anderson was conducting and secured signatures of landowners to option agreements similar to the involved in this case. The first of these meetings was held June 11, 1951, at Corky's Cafe in Williston and was attended by about fifteen landowners of that area. Alfson was not present. At that time most, if not all, of those present signed the same agreement that was later signed by Alfson. Other pages and other signatures were added. These pages contain only names and property descriptions. In all there appear to be thirty signatures before that of Alfson, while forty-two appear to have signed it afterward.

Mr. Joe Brownrigg testified that he was employed by Mr. Anderson in the summer of 1951 and after the meeting in Corky's Cafe he was told that Mr. Alfson had approximately 2,000 acres in Judson Township that he wanted to lease. Judson Township was outside of the nine township area that was being covered in obtaining option agreements. Mr. Alfson was in the grain buying business in Williston. Brownrigg went to his office with the option agreement stapled together and on which was the first typewritten page. Brownrigg told Alfson that Mr. Anderson had asked him to come to see him and that Brownrigg understood he was favorable to entering into an option to lease his land in Judson Township. He read the option to Alfson, explained the...