J.M. Hamilton Co. v. Battson

• Decision Date: 10 May 1935
• Docket Number: 7368.
• Citation: 44 P.2d 1064,99 Mont. 583
• Parties: J. M. HAMILTON CO. v. BATTSON.
• Court: Montana Supreme Court

44 P.2d 1064

99 Mont. 583

J. M. HAMILTON CO. v. BATTSON.

No. 7368.

Supreme Court of Montana

May 10, 1935

Rehearing Denied May 22, 1935.

Appeal from District Court, Cascade County; H. H. Ewing, Judge.

Action by the J. M. Hamilton Company against Paul Battson. From the judgment, plaintiff appeals.

Affirmed.

George E. Hurd, of Great Falls, for appellant.

Speer & Hoffman, of Great Falls, for respondent.

ANDERSON Justice.

Plaintiff brought this action in two counts against the defendant--the first to recover the balance due on a contract for the sale and the purchase of real estate; the second to recover the reasonable value of certain personal property alleged to have been sold by him to the defendant.

Plaintiff on August 19, 1930, entered into a contract with defendant whereby the former agreed to sell and the latter agreed to buy certain real property situated in Great Falls. The purchase price of the property was the sum of $6,300, payable as follows: $300 cash upon the execution of the contract $3,500 represented by a note and mortgage on the property of even date with the contract, payable to the order of Elizabeth Brzenski, and assumed by the defendant; and $2,500 evidenced by a promissory note attached to the contract and made a part of it by the terms thereof, and payable beginning with the month of September, 1930, at the rate of $100 per month, with the accruing interest, on the 25th of each month, until paid. The defendant agreed to pay all taxes thereafter levied, and a proportionate part of the taxes for the year 1930. It was further agreed that "time shall and is hereby made of the essence of this agreement and each and every provision thereof," and that if default should be made in the payments or the interest, or should any taxes levied or assessed after January 1, 1931, become delinquent, or should the defendant fail to keep and perform the agreements in any other respect, plaintiff should be accorded the right to declare the entire balance of the purchase price immediately due and payable, although by the terms of the agreement the payments should not then be due.

It was further provided that plaintiff might then "institute proceedings for the immediate collection of the entire balance of said purchase price, in which event all the rights and remedies and privileges granted to the mortgagees of real estate under the laws of the State of Montana may be exercised by said vendor," including the right to collect reasonable attorney's fees and the cost of the continuation of an abstract of title. Under the terms of the contract defendant was to be entitled to the possession of the premises after August 25, 1930, and to continue in possession under its terms until default; but in the event of default plaintiff was to become entitled to the immediate possession of the property. The defendant agreed "quietly and peaceably to vacate and surrender up possession" of the property and the improvements then situated thereon to the plaintiff "without the aid of any process issued by any court."

A warranty deed conveying the premises was to be executed by the plaintiff and delivered in escrow to a bank in Great Falls, to be delivered to the defendant upon the performance of the contract. The defendant, at his option, might on any day on which a payment fell due make additional payments in any multiple of $100. The contract further provided that "if the purchaser is in default and said default has continued for a period of thirty days and vendor has elected to declare the whole amount due, and has notified the purchaser to that effect, then and in the event that said purchaser vacates the said premises and turns them back to the vendor within thirty days after said default and upon receipt of notice by him that the vendor has elected to declare the whole amount due that no deficiency judgment shall be entered or taken against the said purchaser." The notice provided for in the preceding quotation might be given to the defendant by registered mail at his address mentioned in the contract. The contract also contained other provisions unimportant here.

By letter dated the same day as the contract, signed either by the plaintiff or its president and delivered to the defendant, the contract was supplemented to the extent that defendant was accorded the right, in certain instances, to place a tenant in possession of the property. It was further modified or explained as follows: "In reference to the certificate No. 23211 of tax sale for the year 1928 for $245.75 and for the year 1929 for $163.23, it is expressly understood and agreed as part of the contract the parties of the first part, including the undersigned, are to pay those amounts, together with any interest thereon on or before the 30th day of November, 1930. Failing to pay them within that time, you may elect to pay them yourself and apply any sums so paid upon your monthly payments as they may come due."

The deed was executed and delivered in escrow, in accordance with the agreement. The defendant went into possession of the property, made the $300 down payment, and the payments on the principal, together with the accruing interest, during the months of September, October, and November of 1930; he, however, failed to make the payments when due in December, 1930, although thereafter at various times in the year 1931, and as late as February, 1932, he made payments on the principal. Altogether he made a total payment of $980 on the principal and $51.33 on account of interest. He did not pay the taxes levied and imposed after January, 1931, and neither he nor the plaintiff paid the 1928 and 1929 delinquent taxes, mentioned in the letter of August 19, 1930. The defendant made no payments on either principal or interest on the outstanding mortgage which he had assumed and agreed to pay.

On July 27, 1932, plaintiff served notice on the defendant, in the manner provided by the contract, for the acceleration of the maturity of the balance due on the purchase price, reciting the various defaults on the part of defendant in his failure to pay the interest on the mortgage indebtedness, the taxes levied and imposed, and the payments theretofore accruing under the contract, as well as the interest, and specifying the full sum of $2,075.83 claimed to be the balance then due pursuant to the provisions of the contract. The cause was tried before the court sitting without a jury. The facts thus far related are without substantial dispute in the evidence.

Over objection the defendant was permitted to testify that about the time the contract was entered into he had certain conversations with Mr. Hamilton, the president of the plaintiff corporation, wherein Mr. Hamilton explained to him that under the terms of the contract if he would, upon receipt of the notice of the acceleration of the maturity of the indebtedness, forthwith surrender possession of the premises no judgment could be obtained against him personally on account of the unpaid portion of the purchase price. Upon receipt of the notice defendant vacated the property, prepared and tendered to the plaintiff a quitclaim deed, signed by himself and wife, to the land and premises, and also tendered the key to the house located thereon. Plaintiff refused to accept this deed, but accepted the key, according to the plaintiff's theory of the case, for the purpose of inspection only. Some dispute exists as to the manner in which the key was accepted.

The court found the issues generally in favor of the defendant on plaintiff's first cause of action, and on the second cause of action in favor of the plaintiff to the extent of $60. A judgment was entered dismissing the complaint on the first cause of action, and awarding plaintiff judgment in the sum of $60 on the second cause of action. Plaintiff has appealed from this judgment in its entirety, although in its brief it specifies no error on, and makes no argumentative attack against, the judgment so far as the second cause of action is concerned. Defendant has made a cross assignment of error against the judgment as to the second cause of action but has perfected no cross-appeal.

Plaintiff assigns as error the action of the court in finding that plaintiff was not entitled to any relief on its first cause of action and that it should be dismissed. Also it is asserted that the court was in error in permitting the witnesses to testify as to the conversation had between the defendant and the president of the plaintiff corporation with reference to the alleged interpretation of the written agreement.

The defendant contends that plaintiff could not recover on its first cause of action for three reasons: (a) That by reason of plaintiff's failure to pay the delinquent taxes for the years 1928 and 1929 within the time stipulated in the letter of August 19, 1930, plaintiff was in default, under the terms of the contract as modified by the letter, and could not, therefore, maintain the action; (b) that, under the terms of the agreement and the supplemental letter plaintiff could maintain no action for the recovery of a personal judgment on the contract, if defendant upon receipt of the notice promptly vacated and surrendered the premises to plaintiff; and (c) that, if the result contended for under su...