Friedrichsen v. Cobb
| Decision Date | 04 March 1929 |
| Docket Number | 6382. |
| Parties | FRIEDRICHSEN v. COBB. |
| Court | Montana Supreme Court |
Rehearing Denied March 16, 1929.
Appeal from District Court, Judith Basin County; John C. Huntoon Judge.
Action by Matthiew H. Friedrichsen against Eugene F. Cobb. Judgment for defendant, and plaintiff appeals. Affirmed.
F. A Ewald, of Great Falls, for appellant.
Hurd, Hall & McCabe, of Great Falls, for respondent.
On September 6, 1927, the plaintiff, Matthiew H. Friederichsen, commenced action against the defendant, Eugene F. Cobb, to recover the sum of $13,628.97, alleged to have been paid under, or paid out because of, a written contract for the purchase by plaintiff from the defendant of certain ranch property in Judith Basin county. A general demurrer to the complaint was sustained, and, plaintiff refusing to plead further, judgment of dismissal was entered in favor of defendant, and from this judgment plaintiff has appealed. The only question presented is whether or not the complaint states facts sufficient to constitute a cause of action.
Briefly summarized, the complaint alleges the following facts: In March, 1918, plaintiff was a postal clerk with no knowledge of farming or farming conditions in Montana; in order to induce him to enter into a contract for the purchase of certain lands, defendant represented to him that he (the defendant) was the owner of certificates from the state for the purchase of the lands, which were of the richest in the state, containing only sufficient gravel to be advantageous, and would raise from 40 to 50 bushels of the best wheat to the acre, and the climatic conditions in the section were favorable and the rainfall abundant to insure crops. Plaintiff relied upon these representations, and purchased the lands under contract calling for a down payment of $1,000 and the payment of $3,000 on May 15, 1918, the payment to the state of defendant's remaining deferred payments, amounting to $3,723, and payment of the balance of the purchase price, or $20,160, from the crops raised during an indefinite period of years. While the contract was silent as to when the certificates and the assignment thereof were to be placed in escrow, the agreement was that this should be done when the payment was made on May 15, 1918. That plaintiff entered into possession of the premises on March 23, 1918, under the contract, and continued in possession until November 2, 1925. That all of the representations made were false, and the certificates were not placed in escrow until June 15, 1924. That plaintiff rescinded and terminated the contract on the date last mentioned, and that defendant foreclosed the contract and caused a judgment of foreclosure to be entered on November 2, 1925. That the allegations of the complaint and the testimony adduced on the foreclosure proceeding were false. It is then alleged that "plaintiff gives for his reason for not having sooner sought to obtain his rights with respect to said transactions that he went broke in farming said lands, and that he has since been financially unable to defend said foreclosure suit or sooner seek to obtain redress by a separate action."
It will be seen that this complaint intermingles allegations which form the basis of an action for the rescission of the contract and one for breach thereof; it then shows laches on the part of the plaintiff and the adjudication of the rights of the parties under the contract and seeks to evade these bars to maintaining the action by alleging that plaintiff was financially unable to protect his rights and that defendant committed perjury in obtaining the judgment of foreclosure of the contract. Nevertheless, on general demurrer, the allegations of the complaint must be taken as true; all facts reasonably to be inferred from, or implied in, those alleged, must be treated as actually alleged (Ray v. Divers, 72 Mont. 513, 234 P. 246; Grover v. Hines, 66 Mont. 230, 213 P. 250; Connelly Co. v. Schlueter Bros., 69 Mont. 65, 220 P. 103); and, if the complaint states facts sufficient to constitute a cause of action on any theory, it is good as against a general demurrer (Awbery v. Schmidt, 65 Mont. 265, 211 P. 346; Anderson v. Border, 75 Mont. 516, 244 P. 494; Calvert v. Anderson, 73 Mont. 551, 236 P. 847).
Does this complaint, then, state facts sufficient to entitle plaintiff to any relief? One in the situation in which plaintiff alleges he found himself prior to June 15, 1924, has an election of remedies. If he does not restore what he has received he must offer to do so upon condition that the other party does likewise. Section 7567, Rev. Codes 1921; Smith v. Christe, 60 Mont. 604, 201 P. 1011; Como Orchard Land Co. v. Markham, 54 Mont. 438, 171 P. 274.
As plaintiff alleges that he farmed the land year after year from 1918 on, he must have discovered the facts with relation to the condition of the soil, the climate, and amount of rainfall, and wheat the land would produce long prior to his tendered rescission in June, 1924, and he does not bring himself within the provision that one must "act promptly" (section 7567) and the decisions thereunder ( Ott v. Pace, 43 Mont. 82, 115 P. 37; Edwards v. Muri, 73 Mont. 339, 237 P. 209), and, even had the tender been timely, the act was of no avail, as plaintiff did not keep the tender good by removal from the premises ( Fontaine v. Lyng, 61 Mont. 590, 202 P. 1112; Smith v. Christe, above). The complaint does not, therefore, state a cause of action for rescission on the ground of misrepresentations.
2. It is urged that the defendant breached the contract by failure to deposit the certificates and assignment thereof in escrow in 1918, as agreed and that time was of the essence of the contract. Plaintiff, however, waived strict compliance with the terms of the contract or agreement by remaining in possession after the breach and merely insisting, from time to time, that the vendor place the instruments in escrow, up to June 15, 1924, when he tendered his rescission of the contract. Had plaintiff then abandoned the premises and repudiated the contract and thus kept his rescission good, it might be said that, on the ground now considered, the complaint states a cause of action (Hogsed v. Gillett, 60 Mont. 467, 199 P. 907), if no effect is given to the allegation that the contract was thereafter foreclosed by the defendant; but the complaint discloses on its face that he did not do so, and, under the authorities cited above, he waived his right to rescission on this ground as well as on those grounds heretofore considered.
Whether time is or is not of the essence of a contract is material only where the defaulting party has, after the expiration of the time limit, made a tender which was refused by the other party. Cook-Reynolds Co. v. Chipman, 47 Mont. 289, 133 P. 694.
In this complaint it is alleged that, on June 15, 1924, the defendant finally placed the instruments in escrow, and, as plaintiff waived the right to rescind, his continuing in possession would constitute an acceptance rather than a rejection of defendant's performance of the alleged agreement. It is clear from the allegations of the complaint that the time for performance of the contract, by conveyance of the certificate, had not arrived on June 15, 1924, when the plaintiff made his tender of rescission, nor yet at the time of trial. Under the circumstances shown, defendant was not required to have title to the certificates at any time prior to the time, when he was, under the contract, required to convey title thereto (Wilson v. Corcoran, 73 Mont. 529, 237 P. 521; Hollensteiner v. Anderson, 78 Mont. 122, 252 P. 796), and, as he placed the certificates and assignment thereof in escrow prior to the time limit and before this plaintiff effected a rescission of the contract for his delinquency, the complaint does not state a cause of action on the ground now considered.
3. Counsel for plaintiff asserts that, as in drafting the complaint he used the word "terminated" in connection with "rescinded and canceled" in alleging rescission on June 15, 1924, the complaint should not be considered as alleging mere cancellation, but should be taken as alleging an abandonment of the contract, and that, therefore, the rules above announced should not be applied; he relies upon expressions contained in the decision in Cook-Reynolds Co. v. Chipman, above, wherein it is held that there may be an abandonment of a contract without rescission and recovery of compensation on breach of the contract, on the "acceptance of the situation which the wrongdoing of the other party has brought about."
In that case it is held that, on declaring a forfeiture of a contract for sale of lands, thus terminating the contract, the party against whom forfeiture is declared may be relieved from the forfeiture under the provisions of section 8658, Revised Codes of 1921, on showing that he is equitably entitled to such relief, if his breach of duty was not grossly negligent willful, or fraudulent. Therein it was shown that the property could be returned in undiminished value, and the value of its use was readily ascertainable, and the applicant for relief was willing that the vendor should have full compensation for the use of the property and all damages sustained, and it...
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