Donnay v. Boulware
| Decision Date | 19 August 1966 |
| Docket Number | No. 40124,40124 |
| Citation | 144 N.W.2d 711,275 Minn. 37 |
| Parties | L. A. DONNAY, Appellant, v. John S. BOULWARE et al., Respondents. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
1. The intent of the parties as expressed in an inconsistent and ambiguous contract should not be determined without an examination of all the facts and circumstances surrounding the transaction. The court should try to place itself in the position of the parties and, from a consideration of the instrument as a whole in light of surrounding circumstances, endeavor to arrive at their real understanding. It should not be assumed that the parties intended to enter into a contract which was unjust or that either party assumed he would secure an advantage not clearly expressed in its terms.
2. Where the intention of the parties may be gained wholly from the written contract, the construction of it is for the court. Where the language of a contract is ambiguous, resort may be had to extrinsic evidence, and construction may then become a question of fact unless such evidence is conclusive.
3. The construction which the parties in their dealings and by their conduct have placed upon the terms of a contract will furnish the court with persuasive evidence of their meaning.
4. Although preliminary negotiations cannot be allowed to contradict or vary the plain terms of a written contract purporting to integrate the entire transaction, nevertheless, where the terms or words used are ambiguous or reasonably susceptible of more than one interpretation, such negotiations may be considered in order to determine the meaning and intent of the parties.
5. Summary judgment, Rule 56, Rules of Civil Procedure, should be employed only 6. Summary judgment is not appropriate where the terms of a contract are at issue and any of its provisions are ambiguous or uncertain. The trial court should allow the parties a full opportunity to present evidence of facts and circumstances and conditions surrounding its execution and the conduct of the parties relevant thereto.
where it is perfectly clear that no issue of fact is involved and where it is neither desirable nor necessary to inquire into facts which might clarify the application of the law to the issues involved.
Strong, Tully & Bush, Minneapolis, for appellant.
Thoreen, Thoreen & Lawson, Stillwater, for Boulware.
Neumeier & Kimmel, Stillwater, for George and Stepka & Orth.
Walter & Jansen, Bayport, for Czikalla.
This is an appeal from a summary judgment dismissing an action brought against John S. and Ellen B. Boulware by L. A. Donnay for the return of the sum of $25,000 paid pursuant to the terms of a land purchase contract which plaintiff claims was legally terminated, entitling him to a return of the money paid. The trial court agreed with defendant-sellers who claimed that because of a default by the plaintiff the amount paid had been forfeited under the terms of the agreement. This is one of six actions consolidated for trial, all of which relate t agreements for the purchase of real estate for residential development.
From the record in the Donnay case, which is before us, the complaint alleges that the defendants are owners of certain acreage property in Washington County; that pursuant to an agreement plaintiff paid the defendants $25,000; that plaintiff terminated the agreement in accordance with its terms and requested a return of the money paid, which demand was refused. The answer alleges that plaintiff failed to make payments within the time specified by the agreement as a result of which defendants were released from further obligations to perform and plaintiff forfeited any right to recover money paid.
From the contract which is made a part of the complaint, it appears that the Boulwares agreed to sell an area slightly in excess of 170 acres for 'approximately the sum of $139,000.00, the exact amount to be based upon a price of $800.00 per acre.' Payments were to be made as follows: $3,700 cash on the date of execution of the contract; $3,300 on or before October 15, 1961, and $3,000 on or before December 15, 1961, at which time the seller agreed to convey to the buyer a tract of 6 acres located in the area; $15,000 on or before May 1, 1962, and $15,000 on September 1, 1962, at each of which times the seller was to convey to the buyer a tract of 7 acres, contiguous to the prior conveyance. The payments made through September 1, 1962, were to make a total of $40,000.
The contract went on to provide that upon completion of the $40,000 payment, the sellers would convey to the buyer by warranty deed the original tract described, at which time the buyer would execute a purchase money mortgage for the balance of the purchase price. The contract also provided that possession of the property should remain with the sellers until the time of execution of the mortgage and that, for a period of 3 years after the execution of the mortgage, the sellers should have the right to use for agricultural purposes so much of the land as would not be actually occupied by the buyer for residential development. After various provisions with reference to the use and occupancy of the property subsequent to the giving of the mortgage, the contract provided for conditions under which the purchaser could secure release of the property from the lien of the mortgage.
The contract goes on to express what plaintiff claims is the controlling and determinative part of it. This clause characterizes the instrument as a conditional contract for purchase. It provides:
'This contract is conditioned upon certain conditions as hereinafter set forth, the failure or nonoccurrence of any one of which prior to the payment of said sum of $40,000.00 shall give Buyer the right to terminate this agreement, in which event all monies theretofore paid to Sellers shall be refunded to Buyer.'
The condition which is relevant to this case provides:
It is clear from the writing thus far that the purchaser intended to acquire land for residential development on the condition that F.H.A. and V.A. approval could be secured. Denial of approval prior to the payment of $40,000 would give the buyer the right to terminate the agreement and secure a refund of payments made. After the buyer paid the periodic installments totaling $25,000, he was informed by the F.H.A. that the project would not be given approval. He accordingly informed the sellers by letter on November 5, 1962, of this fact and requested that the amount paid be returned. The sellers refused, relying on paragraph 5 of the contract which contains the following provision:
'* * * (I)f the Buyer shall fail for a period of thirty (30) days after the same shall be due under the terms of this agreement to pay to the Sellers any of the sums herein agreed to be paid by the Buyer, either as installments on account of principal or as interest, taxes, assessments, or shall fail to comply with any of the covenants on his part to be kept and performed, then the Sellers shall be released from all obligations in law or equity to convey said property, and the Buyer shall forfeit all rights thereto and any and all payments theretofore made by the Buyer in excess of land already conveyed shall be considered as rent and compensation for the use and occupancy of said premises, and be retained by the Sellers and this contract may be terminated as provided by law.'
It should be noted, however, that following the foregoing paragraph and certain other references made to the subject of providing a marketable title, the agreement returns to a restatement of the conditional nature of the contract, where the last provision recites:
'The Buyer is hereby granted the right and privilege to terminate this contract at any time prior to the payment of the said sum of $40,000.00 by written notice to the Sellers; provided, that, however, if the Buyer shall exercise his right to so terminate the contract and the basis therefor is not one of the conditions the failure or nonoccurrence of which gives Buyer the right to terminate as hereinbefore provided, all payments made prior to this...
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