Cotton v. Butterfield

• Decision Date: 18 October 1905
• Parties: COTTON v. BUTTERFIELD et al.
• Court: North Dakota Supreme Court

14 N.D. 465

105 N.W. 236

COTTON

v.BUTTERFIELD et al.

Supreme Court of North Dakota.

Oct. 18, 1905.

Syllabus by the Court.

Where, in an action at law, the answer interposes an equitable counterclaim, the issues arising on the latter should be heard and determined by the court before a trial of the legal issues, as if the counterclaim were a separate suit in equity.

If the decree entered on the equity side of the case renders unnecessary the trial of any question arising on the law side, then such decree is the final determination of the action.

The cause of action was at law and the counterclaim in equity, but the issues on the equity side of the case involved all disputed questions on the law side. The action was tried as if both the cause of action and counterclaim were in equity. Held, that the case is triable de novo on appeal.

Evidence examined, and held, that there had been no rescission by the plaintiff of her contract to buy defendants' land, and that the latter are entitled to specific performance thereof.

Where a decree of specific performance of a contract, under which the vendee is not entitled to possession until conveyance, is awarded to the vendor, who appears to have used some or all of the land after the time when, as determined by the decree, the conveyance should take effect, the value of such use or the net profits thereof, as the vendee may elect, will be deducted from the purchase price remaining unpaid.

Appeal from District Court, Emmons County; W. H. Winchester, Judge.

Action by Bertha A. Cotton against J. C. Butterfield and John F. Demaris. Judgment for plaintiff, and defendants appeal. Reversed.

Geo. W. Lynn and G. N. Williamson, for appellants. H. A. Armstrong and F. H. Register (I. C. Fenninger, of counsel), for respondent.

ENGERUD, J.

Plaintiff brought this action in district court to recover a sum of money which she claims to be entitled to by reason of the alleged failure and refusal of defendants to perform a contract for the sale by them to her of a farm. The answer, besides putting in issue some of the facts constituting the plaintiff's cause of action, pleaded a counterclaim for the specific performance of the contract, upon which the plaintiff based her cause of action, and the plaintiff replied. The action was tried by the court without a jury, and resulted in a judgment for plaintiff. Defendants have appealed from the judgment, and in addition to a demand for a new trial of all the issues, under section 5630, Rev. Codes 1899, numerous specifications of errors have been incorporated in the settled case, aimed at certain alleged errors of law at the trial, and also challenging the sufficiency of the evidence to sustain the findings. The action was tried after the taking effect of chapter 201, p. 277, Laws 1903, amending section 5630, so as to exclude from its operation cases “properly triable with a jury.” The complaint states a cause of action at law for the recovery of money only, and hence, to the extent of the issues arising on the complaint and the defensive parts of the answer, the action was one properly triable with a jury. The issues arising on the counterclaim and reply, however, were equitable, and were properly triable by the court without a jury. We are therefore confronted with a question as to the extent of our jurisdiction on this appeal. Is the action one “properly triable without a jury,” to be heard and determined under the provisions of section 5630, or are we limited to the review of errors only as in jury cases?

In this case the adjudication of the issues arising on the counterclaim and reply necessarily determine all the disputed facts essential to plaintiff's right to recover. As pointed out in Arnett v. Smith, 11 N. D. 55, 88 N. W. 1037, which was a case very similar to this, “the established procedure is that, when an equitable defense is presented, it is to be decided by the court as if it were an equitable proceeding before other issues are determined, because the determination of the equitable issues in favor of the defendant would put an end to the litigation and obviate the necessity of trying the legal issues involved.” That statement of the rule is, perhaps, too broad. It is more correct to say that the equitable issues should be first heard and disposed of by the court, as in a suit in equity, when the answer presenting such a defense is in the nature of a bill in equity containing the essential averments of such a pleading, and requiring the interposition of a court of equity to afford the relief sought. Estrada v. Murphy, 19 Cal. 248, 272;Lombard v. Cowham, 34 Wis. 486;Du Pont v. Davis, 35 Wis. 631. This case comes fully within that rule. The issues on the counterclaim and reply were to be first tried and disposed of by the court in the same manner as if the counterclaim were the complaint in an action commenced by the defendant. The equity side of the case should proceed to a final decree. The contents of that decree would determine whether all the issues on the law side of the case were foreclosed or not. If the decree left any part of the legal issues still open to litigation, then such issues are for trial as in a law action. Martin v. Zellerbach, 38 Cal. 300, 99 Am. Dec. 365, and cases supra. In this case, as already stated, the determination of the equitable counterclaim left nothing further to litigate, and hence the decree was the final determination of all the issues in the action. In such a case as this, the amount of plaintiff's recovery would be an issue triable by a jury if the amount were in dispute; but the pleadings admit the amount and date of the payment of the $500 which plaintiff recovered. Plaintiff concedes that the recovery of this sum was all she was entitled to. All questions arising on the law side of the case were eliminated by the trial of the equity side, and hence it seems clear to us that this appeal is from a final judgment in an action properly triable without a jury, and is here for trial de novo.

In passing, however, it may be well to call attention to the erroneous practice pursued in the trial of this case. When the case was called for trial, the plaintiff proceeded to introduce evidence in support of her cause of action, and the whole case was tried as if it were one triable under section 5630, both as to the cause of action in the complaint, and the counterclaim. In such a case as this, when the answer calls for a separate trial of the equitable issues, the trial should be confined to those issues alone, and the proceedings on the trial should be the same as if the defendant were plaintiff. Encyc. of Pl. & Pr. p. 811, and cases cited in note 2.

We come now to the merits of the case. As already indicated, the question to be decided on this appeal is whether or not the defendants have shown themselves entitled to a decree for specific performance of the contract in suit. It is unnecessary to set forth the pleadings. It is sufficient to say that the defendants allege the making of the contract hereinafter described, and that they have performed or offered to perform, and are now ready, able, and willing to perform the same. The plaintiff claims that the defendant failed to tender performance within the stipulated time, and that the contract had been rescinded before defendants tendered performance. The contract is as follows:

“Received of Bertha A. Cotton Five Hundred no/100 dollars ($500.00) as earnest money and in part payment for the purchase of the following described property situated in the county of Emmons and State of North Dakota, viz: West half of section fifteen. East half of section ten. Southeast quarter of section nine, all in township one hundred thirty-four North of range seventy six West of 5th P. M. which I have this day through owners J. C. Butterfield and J. F. Demaris sold and agreed to convey to said Bertha A. Cotton for the sum of six thousand and eight hundred no/100 dollars ($6,800.00) on terms as follows, viz.: Five hundred no/100 dollars ($500.00) in hand paid as above, and $3,300.00 January 1st, 1903, with 8 per cent. interest from date; $3,000.00 on or before January 1st, 1908, as stated below, payable on or before the dates as named above, or as soon thereafter as a warranty deed conveying a good title to said land is tendered, time being considered of the essence of this contract. And the above three thousand no/100 dollars shall be secured as follows: $1,500.00 first mortgage on E. 1/2 of Sec. 10-134-76. $550.00 first mortgage on N. W. 1/4 of Sec. 15-134-76. $550.00 first mortgage on S. W. 1/4 of Sec. 15-134-76. $400.00 first mortgage on S. E. 1/4 of Sec. 9-134-76. Interest at 8 per cent. per annum from date. And it is agreed that if the title to the said premises is not good, and cannot be made good within thirty days from date hereof, this agreement shall be void, and the above title of above land shall rest upon abstract satisfactory to second party. Five hundred no/100 dollars ($500.00) refunded. But if the title to said premises is now [not?] good, in the names of J. C. Butterfield and John Demaris within thirty days, and said purchaser refuses to accept the same, said five hundred no/100 dollars ($500.00) shall be refunded to the said Bertha A. Cotton and contract null and void. But it is agreed and understood by all parties to this agreement, that said forfeiture shall in no way affect the right of either party to enforce the specific performance of this contract. Possession of above land to be given March 1st, 1903. Second party is to accept or reject abstracts within thirty days after delivery of abstracts to Emmons Co. State Bank, Braddock, N. Dak. J. C. Butterfield. [Seal.] John F. Demaris.

I hereby agree to purchase the said property for the price and upon the terms above mentioned and also agree to the conditions of forfeiture and all other conditions therein expressed. Bertha A. Cotton, by F. H. Cotton, Agent.”

The contract was not...