Haugland v. Hoyt

• Decision Date: 06 July 1978
• Docket Number: No. 9463,9463
• Citation: 267 N.W.2d 803
• Parties: Sigurd Arnold HAUGLAND, a/k/a Arnold Haugland, Plaintiff, Appellee and Cross-Appellant, v. Duwayne HOYT and Gladys Hoyt, Defendants, Appellants and Cross-Appellees. Civ.
• Court: North Dakota Supreme Court

Page 803

267 N.W.2d 803

Sigurd Arnold HAUGLAND, a/k/a Arnold Haugland, Plaintiff Appellee and Cross-Appellant, v. Duwayne HOYT and Gladys Hoyt, Defendants, Appellants and Cross-Appellees.

Civ. No. 9463.

Supreme Court of North Dakota.

July 6, 1978.

Rehearing Denied July 26, 1978.

David Garcia, Devils Lake, for appellants and cross-appellees.

Hovey & Bekken, Ltd., New Rockford, for appellee and cross-appellant; argued by John D. Hovey, New Rockford.

PEDERSON, Justice.

Duwayne and Gladys Hoyt (hereinafter Hoyt) appealed from a judgment of the district court compelling him to specifically perform an option contract requiring that they convey certain farmlands to Sigurd Haugland (hereinafter Haugland). Haugland, being aggrieved by a finding of fact that the transaction between them created an equitable mortgage, cross-appealed from that part of the judgment which accordingly required him to pay Hoyt interest charges for the five-year period involved. We affirm in part and reverse in part.

Hoyt and Haugland are brothers-in-law and both operated farms in Eddy County. In the fall of 1971, the failure of crops for two consecutive years had placed Haugland in a precarious financial position. He began negotiations with Hoyt which culminated in the deeding of approximately two quarter sections of Haugland's land to Hoyt and, in connection therewith, in the drafting of an option contract, which is set forth verbatim below:

"OPTION CONTRACT

"KNOW ALL MEN BY THESE PRESENTS, That Duwayne Hoyt and Gladys Hoyt, husband and wife, of McHenry, N. D., owners, for and in consideration of the sum of One Dollar ($1.00) in hand paid, at or before the ensealing of these presents by Sigurd Arnold Haugland, buyer of McHenry, N. D., have agreed and do hereby agree that for a period of 5 years from the date hereof buyer shall have the first option to purchase the real property below described in the event owners should offer the same for sale. The purchase price to buyer shall be $31,717.00. It is further agreed that commencing 5 years from the date hereof and for a period of 90 days thereafter Buyer shall have an option and right to purchase the following described real property situate in the County of Eddy and State of North Dakota, to-wit:

The West Half (W 1/2) of Section Eighteen (18), Township One Hundred Forty-eight (148), Range Sixty-two (62) subject to easements and rights of way of record,

and owners agree to transfer the said property at any time within the time above prescribed by Warranty Deed, to the said buyer, or such person as the buyer may direct, at and for the price of $31,717.00 payable on the following terms:

To be paid in full at the time this option is exercised.

"If the buyer elects to purchase said property owner will furnish an abstract of title showing good and merchantable title free from all spread taxes, special assessments, liens and encumbrances except as follows:

No exceptions.

"In the event buyer exercises this option and purchases said land, the deed of conveyance to him shall restrict sale or transfer of the same by him for a period of 5 years, during which period of time buyer must till and operate said land himself and shall not lease or rent out the land.

"In the event buyer shall decide to purchase said property at the above price and terms within said time, then and in that case, the said amount paid for this option shall be credited upon the purchase price, but in the event the buyer does not conclude the purchase within the time prescribed, then and in that case, the said amount paid for this option shall be retained by the owner in full satisfaction for holding the property subject to the said order for the said time.

"It is provided, however, that in case there be any delay on the part of the owners in perfecting the title to said property for more than 30 days after the notice of election of the buyer to purchase the said property, then and in that case, the buyer reserves the right to cancel this option and receive back the consideration thereof, or to extend the time until said title is perfected.

"Dated this 13th day of January A.D. 1972.

/s/ Duwayne Hoyt

/s/ Duwayne Hoyt

/s/ Gladys Hoyt

/s/ Gladys Hoyt

Owner"

After five years had elapsed, a timely notice of an election to exercise the option to purchase was sent by Haugland to Hoyt. Hoyt refused to perform and a lawsuit followed. At the conclusion of the trial to the court, the following findings of fact were made:

"FINDINGS OF FACT

"I.

"That on or about January 13, 1972 Plaintiff and Defendants entered into an agreement whereby:

A. Plaintiff by deed transferred to the Defendants the West Half (W 1/2) of Section Eighteen (18), Township One Hundred Forty-eight (148), Range Sixty-two (62), Eddy County, North Dakota.

B. Defendants paid to Plaintiff the sum of $31,717.00.

C. Defendants executed an OPTION CONTRACT in favor of Plaintiff which provided that if Defendants desired to sell the above described property within five years from the date thereof, Plaintiff would have a first option to purchase the same. Said OPTION CONTRACT further provided that commencing January 13, 1977 and for a period of 90 days thereafter, the Plaintiff at his election would have the option to purchase the property for the sum of $31,717.00.

"II.

"That Plaintiff made a complete and proper election to purchase said property and tender of consideration, and was ready, willing and able to perform throughout the 90 day option in strict accordance with the terms of said OPTION CONTRACT.

"III.

"That the overall effect of the January 13, 1972 agreement was to create an equitable Mortgage on the property with Plaintiff as Mortgagor and Defendants as Mortgagees.

"IV.

"That the Defendants have been in possession of the W 1/2 of Section 18, Township 148, Range 62, Eddy County, North Dakota for the farming seasons 1972 through 1977 inclusive and during said period have received all income therefrom; that Defendants wrongfully held said property during the farming year 1977.

"V.

"That a reasonable cash rental for said land in 1977 would be the sum of $20.00 per acre or a total of $6,343.40."

In effect Hoyt challenges, on this appeal, findings numbered I C and II. Haugland, on cross-appeal, asserts that finding of fact number III is clearly erroneous. Haugland objects to the trial court's conclusion, from finding number III, that Hoyt is entitled to interest in the amount of $6,343.40 for the period of five years.

MOTION TO DISMISS

Haugland has made a motion to this Court to dismiss Hoyt's appeal (and with it his own cross-appeal) for failure to comply with the Rules of Appellate Procedure. In response, Hoyt contends that (1) the appeal is meritorious; (2) the rule violation has been corrected, insofar as possible; and (3) he is ready to proceed and no prejudice has resulted to Haugland.

The rule violation has been corrected and, excepting only for a 17-day delay in compliance with filing procedures, no other prejudice is shown. Counsel for Hoyt has acknowledged that the noncompliance is due solely to counsel's laxity, for which he has apologized to this Court and to the parties. Haugland has acknowledged that no prejudice has resulted. We deny the motion to dismiss. This case has been fully briefed and argued on the merits, and the refusal to dismiss is primarily an expression of our preference for deciding cases on their merits.

MERITS

Hoyt questions the sufficiency of the evidence to establish a contract provision requiring a sale of the property at Haugland's option. The trial court found at finding I C that there was, in fact, such a contract. Our review of findings of fact is made pursuant to Rule 52(a), NDRCivP.

"A finding is 'clearly erroneous' only when, although there is some evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been made." In re Estate of Elmer, 210 N.W.2d 815, 820 (N.D.1973).

In this case there is substantial evidence which supports the trial court's finding. All...