Dean v. Smith

• Decision Date: 31 December 1924
• Citation: 204 N.W. 987,53 N.D. 123
• Court: North Dakota Supreme Court

204 N.W. 987

53 N.D. 123

EMMA B. DEAN, Appellant and Respondent, v. J. H. SMITH, Respondent and Appellant

Supreme Court of North Dakota

December 31, 1924

Rehearing denied August 8, 1925.

Appeal by both parties from a judgment of the District Court of Ramsey County, Kneeshaw, J.

Reversed and dismissed.

Judgment of the trial court reversed and action dismissed.

Cuthbert & Adamson, for plaintiff-appellant. (Separate appeal.)

A trustee who has accepted a trust will be estopped to set up title adversely to his cestui que trust. 11 Am. & Eng. Enc. Law, p. 444, note 4.

Where a trust results by force of a written instrument it cannot be controlled, rebutted or defeated by parol evidence of any kind. McDermott v. Voorhees (Colo.) 25 Am. St. Rep 289; 1 Perry, Trusts, § 150; Langham v. Sanford, 17 Ves. Jr. 435; White v. Williams, 3 Ves. & B. 72.

Amasa E. Wheeler, and Middaugh & Smythe, for defendant-appellant.

A court of equity, which is never active in relief against conscience or public convenience, has always refused its aid to stale demands, where the party has slept upon his rights, and acquiesced for a great length of time. Nothing can call forth this court into activity but conscience, good faith, and reasonable diligence. Smith v. Clay, 3 Bro. Ch. 638.

Generally speaking, the cardinal rule in the interpretation of contracts is to ascertain the intention of the parties and to give effect to that intention if it can be done consistently with legal principles. 6 R. C. L. § 225, p. 835.

The owner of the land may be willing to sell at a price agreed upon, and the purchaser may also be willing to give his vendor the right to repurchase upon specified terms; and if such appears to be the intention of the parties it is not the duty of the court to attribute to them a different intention. Such a contract is not opposed to public policv, nor is it in any sense illegal, and courts will depart from the line of their duties should they, in disregard of the real intention of the parties, declare it to be a mortgage. McGuin v. Lee, 10 N.D. 160.

It is the law that if a deed, and either written or oral contract between the parties thereto, be entered into at the same time, by which the grantee agrees to reconvey the premises to the grantor upon the payment by the grantor of either a pre-existing or then created debt, the transaction is conclusively presumed to be a mortgage, and no stipulation of the parties can make it otherwise. But to give rise to this presumption, there must exist a debt. Turner v. Kerr, 44 Mo. 429.

Where a vendee in a land contract surrenders his contract to his vendor, and the same is accepted, the release of the vendor from the obligations of the contract is a sufficient consideration to support the surrender. Kvello v. Taylor, 5 N.D. 76.

A written contract for the sale of land may be abandoned or annulled by the parties thereto by parol agreement. Haugen v. Skjervheim, 13 N.D. 616; Mahon v. Leech, 11 N.D. 181, 90 N.W. 807; Wadge v. Kittleson, 12 N.D. 452, 97 N.W. 856.

JOHNSON, J. CHRISTIANSON, Ch. J., NUESSLE, BRONSON, BIRDZELL, JOHNSON, and BURKE, JJ., concur.

OPINION

JOHNSON, J.

Judgment was entered in favor of the plaintiff in the district court of Ramsey county upon findings of fact, conclusions of law, and an order for judgment. From this judgment both parties have appealed. This case was here before on appeal from an order which we held not appealable. See Dean v. Smith, 50 N.D. 38, 197 N.W. 589.

The court found, as a basis for its judgment, that plaintiff's assignor, on and prior to April 17, 1915, was the owner of 526 acres of farm lands in Ramsey county; that on that date plaintiff's assignor conveyed the land by a warranty deed to the defendant, and that, at the same time and as a part of the same transaction, the parties entered into an agreement in writing, identified as Exhibit A, in the following form:

"This Agreement made and entered into this 17th day of April, 1915, by and between S. J. Dean of Crary, N.D. party of the first part, and J. H. Smith of the same place, party of the second part.

"Witnesseth that the said party of the first part in consideration of Thirteen Thousand Nine Hundred ($ 13,900.00) Dollars, has this day conveyed to said second party by Warranty Deed about 526 acres of land in the Townships of Odessa and South Minnewaukan, Ramsey county, North Dakota, said land being more fully described in said Deed, Whereas there is at this date Mortgages, accrued interest, and taxes against said land amounting to $ 13,900.00, which the second party assumes, and agrees to pay at this time the accrued interest and taxes, thus preventing foreclosures of mortgages and excessive rate of interest on account of taxes and interest past due.

"The second party hereto agrees to allow the first party to remain on said lands, providing he pays on or before the first day of November, 1915, 1916 and 1917 interest on said sum of $ 13,900.00 at eight per cent per annum, also all taxes assessed against said lands which shall be paid when due, and pay the premium for keeping the buildings insured for a reasonable amount, further that he will during the life of this agreement watch over and protect all buildings and fences on said premises, and will farm and cultivate said lands in a careful and husbandlike manner.

"Further the second party reserves the right to sell said lands for the sum of $ 16,300.00, paying any difference over and above said $ 13,900 and interest at 8 per cent and any further sums accumulating against the premises over to the first party hereto. Further should the party of the first part enter into an agreement to sell about 300 acres of said lands which shall not include the land on which the buildings are located, or that which naturally should go with them, he has the privilege of doing so, providing the amount for which said land is sold for, is not for a price that would reduce the value of the remaining lands, and that the proceeds of said sale of lands shall be applied on said $ 13,900.00.

"Provided further that in case of default by said first party in any or either of the covenants of this agreement to be kept or performed by him, he hereby agrees on demand of said second party to quietly and peaceably surrender possession of the same premises and every part thereof thereby cancelling this agreement after which it shall be null and void and not binding on the second party hereto."

The court finds that the defendant sold 120 acres of this tract to one Wagner in April, 1917, and in September, 1919, the balance to one Rutten; that the total consideration was $ 24,500, some of which was paid in cash and some secured by mortgages. The court also finds the rent and profits taken by defendant from the use of the land and that plaintiff's husband removed from the land in the fall of 1915, and did not pay taxes, or interest on the debt of $ 13,900 and that the defendant thereafter farmed the land by tenant until it was sold. The court finds that the agreement between the parties was "in the nature of a trust" and required the defendant to account to the plaintiff in the manner stated in the findings. The court finds that there was due the defendant, at the time of the trial, the sum of $ 3,707.73 and ordered the plaintiff to pay this sum, whereupon the defendant was directed to transfer to plaintiff, by assignment, in due form, the notes and mortgages received as a part of the consideration for the sale of the land to Wagner and Rutten. The court finds that the trustee dealt with the property in good faith; and that the only consideration for the execution of the warranty deed was Exhibit A. There is no express finding of a continuing and existing indebtedness at and after the date of the execution of the warranty deed and Exhibit A. The court also found that there was no agreement made whereby the parties annulled or cancelled Exhibit A.

The trial court made findings in support of an interlocutory decree, or order, from which an appeal was taken. See Dean v. Smith, 50 N.D. 38, 197 N.W. 589. The court then expressly found that the plaintiff and her husband had failed and neglected to comply with the provisions of Exhibit A in this, that they had not paid interest on $ 13,900, on or before November 1, 1915, 1916 and 1917, nor had they paid taxes or premiums on fire insurance policies as therein provided; that thereafter the plaintiff and her husband vacated the premises and the defendant took possession thereof and retained possession until the property was sold to Wagner and Rutten. The court also found at that time that the defendant treated the contract as cancelled and thereafter asserted title to the land under the deed. Defendant asserts that it was error to omit this finding of fact. The evidence, without substantial dispute, supports the contention of defendant in this regard.

The defendant Smith appeals from the judgment, alleging error in the conclusion of the trial court that Exhibit A constituted a trust agreement. The theory of the defendant is that the transaction was an absolute conveyance, that the rights of plaintiff's assignor under Exhibit A were by mutual agreement fully and completely extinguished and that possession of the land was unconditionally surrendered to defendant in April, 1916, and that the plaintiff's assignor then and there wholly abandoned any right, title to, or claim of interest in, the property described in the warranty deed and in Exhibit A.

The evidence, without dispute, shows that, at the time of the execution of Exhibit A and of the deed conveying the property to defendant, on April 17, 1915, there was an outstanding mortgage due and on which interest was delinquent, held by the George B. Clifford...