Atma v. Munoz.

• Decision Date: 23 February 1944
• Docket Number: No. 4763.,4763.
• Citation: 146 P.2d 631,48 N.M. 114
• Parties: ATMAv.MUNOZ.
• Court: New Mexico Supreme Court

48 N.M. 114

146 P.2d 631

ATMA

v.MUNOZ.

No. 4763.

Supreme Court of New Mexico.

Feb. 23, 1944.Rehearing Denied March 22, 1944.

Appeal from District Court, Chaves County; J. C. Compton, Judge.

Action by Stella Atma against Pete Munoz, for unlawful detainer. From a judgment for defendant, plaintiff appeals.

Affirmed.

Where lessor had right to terminate lease if farm was not operated to her satisfaction, dissatisfaction of lessor's husband was immaterial though husband may have been looking after lessor's business affairs.

Frazier & Quantius, of Roswell, for appellant.

E. E. Young, of Roswell, for appellee.

BRICE, Justice.

This is an action of unlawful detainer. At the trial on appeal from an adverse judgment of the justice of the peace court the appellant (plaintiff) was denied relief in the district court and thereupon appealed to this court.

The appellant leased a farm to appellee for the crop year of 1942. Among the provisions of the written lease, material to a decision, was the following:

“Lessor is to get all the Government checks, free from any claim of the Lessee, and in the event the farm is not operated in a manner satisfactory to Lessor, in her judgment, the contract may be forthwith terminated by her, and in such event Lessee is to have no right of any sort or description in or to the crops or to the premises.

“The lessee is to receive one-half of all of the crops grown on the premises, and he is to furnish all labor and expense in irrigating, cultivating and otherwise attending to the farm.”

In May 1942, after appellee's crop was growing, appellant gave appellee notice to vacate the leased premises for the alleged failure to “operate the farm in a manner satisfactory” to the appellant. The appellee refused to vacate, and the action for unlawful detainer followed.

The appellant tried the case in the district court upon the theory that the lease contract had been breached, and that the appellant terminated it in good faith because of the breach. Her counsel, at the beginning of the trial, stated to the court: “If the Court please, we don't think this is exactly relative to the issues, but in order to prove the good faith of the plaintiff, we want to introduce some testimony as to the crops, and so forth, and for that purpose only.”

The respective parties called many witnesses who gave testimony pro and con upon the question of whether the appellee had properly cultivated the crops then growing on the leased premises. The appellant requested the trial court to adopt the following findings of fact and conclusions of law:

“That the parties hereto entered into the written lease agreement introduced in evidence, and that said lease constitutes the entire agreement between the parties for the possession of the land involved.

“That plaintiff elected, in good faith, to terminate the lease pursuant to her option to do so in her judgment ***.

“That defendant refused to vacate the premises, and yield possession of the crops, and unlawful detainer was instituted against him on May 21, 1942.

“That the lease agreement is entire.

“Requested Conclusions of Law:

“That pursuant to the terms of the lease agreement, plaintiff was allowed an option to terminate the agreement, at her discretion, and that her election so to do terminated the contract as of May 16, 1942; that since said date defendant has been guilty of unlawful detainer of the premises, and the crops growing thereon.

“That the contract is entire, and must stand or fall together; that if the option provision is stricken as improper, the entire contract would fall with it, and defendant would be in possession without any right whatever.

“That equitable defenses are not permissible in this action, and that judgment should be entered for plaintiff, with costs.”

The request was refused, and the trial court filed his decision, as follows:

“Findings of Fact

“That both plaintiff and defendant are residents of Chaves County, New Mexico, and the Court has jurisdiction of the parties hereto, and the subject matter involved.

“That on the 1st day of January, 1942, the plaintiff leased to the defendant herein a farm known as the Frank Stevens farm, located in Chaves County, New Mexico, for farming purposes for the year 1942: the tenure of said lease was from January 1st, 1942 until the 1st day of January 1943, the premises to be used for farming purposes.

“That Section 4 of said lease provides that in the event the farm is not operated in a manner satisfactory to the plaintiff, in her judgment, the contract may forthwith be terminated by the plaintiff, and in such event the defendant is to have no right of any sort or description in or to the crops or the premises described therein.

“That on the 16th day of May, 1942, the plaintiff elected to terminate the said lease pursuant to her option to do so, whereupon the defendant refused to vacate the said premises and yield possession of the crops growing thereon.

“There was no mutuality of obligation between the parties as to that part of Paragraph 4 of said contract providing for a forfeiture or termination of the said contract at plaintiff's option.

“Based upon the foregoing findings of fact the Court concludes:

“Conclusions of Law

“That that part of Paragraph 4 of said contract providing for a forfeiture depended solely upon the will and pleasure of the plaintiff, and is therefore unilateral and unenforcible.

“That defendant is entitled to judgment.”

The trial court stated at the conclusion of the testimony: “The only thing worrying me is this provision in this contract about the right given to the plaintiff to have repossession of the premises, not only the repossession of the premises, but as to all crops and everything else. *** I am of the opinion, gentlemen, that this defendant has done about all he can do under the circumstances to make a crop. From the testimony of Mr. Miles and other gentlemen who knew the place, Mr. Munoz has as good a crop as has been on that place through all these years. I am of the opinion there is not sufficient grounds for the plaintiff to set aside the contract between them. It is just now before the Court on whether or not the defendant can forfeit his right to that contract by its provisions, as set forth in Paragraph 4. He seemed to leave the matter solely up to the plaintiff, at her discretion, to terminate the contract. It looks to me like a unilateral contract altogether lacking mutuality, but to say he could not bind himself by it is quite different. It looks to me like gentlemen, that clause is a complete forfeiture of the rights of the defendant I want to be sure about this. My feelings are with the defendant very strongly on the fact that he has done all that he can do out there. I find that the Court does not look with favor on a contract where it forfeits him at any time he wants to.”

Paragraph 4 of the lease is as follows: “Lessor is to get all the Government checks, free from any claim of the Lessee, and in the event the farm is not operated in a manner satisfactory to Lessor, in her judgment, the contract may be forthwith terminated by her, and in such event Lessee is to have no right of any sort or description in or to the crops or to the premises.”

It is obvious the trial court construed this paragraph of the lease to authorize the appellant-lessor to terminate the lease at her will without reference to whether she was dissatisfied with, or had exercised her judgment, honest or otherwise, regarding the manner of the cultivation of the crops; also that the trial court's finding of fact No. 4 to the effect that appellant elected to terminate the lease “pursuant to her option to do so,” must be construed in the light of the court's statement, that she might terminate the lease at will. This seems to be the construction placed upon it by appellant, as shown by his requested conclusion of law No. 1, as follows: “That pursuant to the terms of the lease agreement, Plaintiff was allowed an option to terminate the agreement at her discretion, and that her election so to do terminated the contract as of May 15, 1942; that since said date defendant has been guilty of unlawful detainer of the premises, and the crops growing thereon.” (Our emphasis.)

We will so construe the finding.

The authorities are not in accord regarding the effect of a contract wherein one of the parties agrees to perform to the satisfaction of the other. Such provision is held by some courts to contemplate only that performance be to the satisfaction of any reasonable man, MacDonald v. Kavanaugh, 259 Mass. 439, 156 N.E. 740; Bottini v. Addonizio, 261 Mass. 456, 158 N.E. 846; Duffy Bros. v. Bing & Bing, 217 App. Div. 10, 215 N.Y.S. 755; Patry v. Berick, 50 R.I. 345, 147 A. 877. High authority has stated that “this is an arbitrary refusal by the court to enforce that contract the parties made, and seems unwarranted.” 3 Williston on Contracts, (Rev. Ed.) Sec. 675-A.

[1] It is the majority rule, which we adopt, that a promise by one party to a contract to perform on his part to the satisfaction of the other party is binding; but the dissatisfaction must be real and in good faith. Thompson-Starrett Co. v. La Belle Iron Works, 2 Cir., 17 F.2d 536; Jones-McLaughlin, Inc. v. Kelly, 100 Cal.App. 315, 279 P. 1076; Raisler Sprinkler Co. v. Automatic Sprinkler Co., 6 W.W.Harr. Del., 57, 171 A. 214; Melson v. Turner, 125 Neb. 603, 251 N.W. 172; 3 Williston on Contracts (Rev. Ed.) Sec. 675-A; Restatement of the Law of Contracts, Sec. 265.

The Supreme Court of the United States considered a similar contract in Goltra v. Weeks, Secretary, 271 U.S. 536, 46 S.Ct. 613, 617, 70 L.Ed. 1074.

It was stipulated that the lessor could terminate the lease if in his judgment Goltra (the lessee) was not complying with the obligations of the contract. The Supreme Court said, “The cases leave no doubt that such a provision for the termination of a contract is valid, unless there is an absence of good...