Jones v. Burr
| Decision Date | 27 June 1986 |
| Docket Number | No. 84-929,84-929 |
| Citation | 389 N.W.2d 289,223 Neb. 291 |
| Parties | Pierce C. JONES et al., Appellees, v. Richard G. BURR, Jr., et al., Appellants, Ed Jurgensmeier et al., Appellees. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Mortgages: Contracts: Foreclosure: Vendor and Vendee. Where the parties enter into an executory contract for the sale of real estate, even though title has not passed, the vendor, upon default by the vendee, may treat the contract as an ordinary real estate mortgage and foreclose it as such.
2. Mortgages: Acceleration Clauses: Foreclosure. A stipulation in a mortgage providing that the whole debt secured thereby shall become due and payable upon failure of the mortgagor to pay the interest or any installment of principal upon maturity thereof, or to comply with any other condition of the mortgage, is a legal, valid, and enforceable stipulation and is not in the nature of a penalty or forfeiture which a court of equity will refuse to enforce.
3. Mortgages: Acceleration Clauses: Foreclosure. If a default exists, and the option to accelerate is exercised by the mortgagee, the effect thereof cannot be defeated by the mortgagor without the concurrence of the holder of the mortgage.
4. Estoppel: Waiver. In order to establish a waiver of a legal right, there must be clear, unequivocal, and decisive action of a party showing such a purpose, or acts amounting to estoppel on his part.
5. Mortgages: Foreclosure: Taxes. The payment of delinquent taxes after the commencement of an action to foreclose a mortgage does not deprive the mortgagee of the right secured by the exercise of his option.
Douglas Pauley of Conway, Connolly and Pauley, P.C., Hastings, for appellants.
D. Charles Shoemaker of Shoemaker & Witt, Hastings, for appellees Jones et al.
Richard G. Burr, Jr., and DeAnne Burr (hereinafter referred to as buyers) appeal from a judgment entered by the district court for Webster County, Nebraska, finding that the appellees Pierce C. Jones, Ellen G. Jones, James M. Corner, and Alice G. Corner (hereinafter referred to as sellers) were entitled to an immediate foreclosure of certain land conveyed by sellers to buyers. The single assignment of error raised by buyers is that the district court erred in finding that the sellers were entitled to foreclosure. We have reviewed the record and conclude that the district court was correct, and the judgment must be affirmed.
On August 16, 1972, sellers entered into an agreement to convey to Ed Jurgensmeier, another one of the buyers, certain real estate located in Webster County, Nebraska, and more particularly described as "The West Half (W 1/2) of Section Five (5) and the West Half (W 1/2) of Section Eight (8), all in Township Two (2) North, Range Eleven (11) West of the 6th P.M., Webster County, Nebraska," for a total purchase price of $253,000. A part of the purchase price was to be paid upon execution of the agreement, a further sum upon delivery to the escrow agent of a warranty deed, and the balance in annual installments over a period of 20 years. On October 31, 1972, Jurgensmeier assigned and conveyed all of his right, title, and interest in the agreement to Richard G. Burr, Jr.
The agreement provided in paragraph 4 in part as follows: "[T]he Buyer agrees to pay, before the same become delinquent, all such taxes for the year 1972 and subsequent years." (Emphasis supplied.) Additionally, paragraph 13 of the agreement provided in part:
If the Buyer fails to pay any amount due under the terms of this contract or if the Buyer fails to perform any of the other terms, covenants, or agreements of this contract, the Owners may declare a default by delivering written notice thereof to the Buyer. Such notice shall be addressed to the Buyer's residence or at such other place as designated from time to time in writing by the Buyer.... If the Buyer fails to make said payment or correct said default within ninety (90) days after delivery of such written notice, the Owners may declare the entire principal sum remaining unpaid under this Agreement together with accrued interest and any advances made by the Owners as herein provided, immediately due and payable at the option of the Owners without further notice or demand.... Failure of the Owners to exercise any option or remedy herein specified at the time of any default or failure of the Owners to give any such notice in the event of such default shall not operate as a waiver of the right of the Owners to exercise such option or remedy for any subsequent default at any time thereafter.
On November 14, 1980, sellers' attorney sent a certified letter to Richard G. Burr, Jr., informing him that he had not paid the 1978 and 1979 real estate taxes, in violation of paragraph 4 of the agreement. The failure to pay these taxes constituted a default under the agreement. Burr was advised that if the default was not cured within 90 days the sellers would consider the full amount of the unpaid balance to be due and owing in accordance with the terms of the contract. In other words, they advised Burr that unless he cured the defect within 90 days sellers would accelerate the entire purchase price. The 90 days passed, the taxes were not paid, and the default was not cured. More than 90 days later, on March 31, 1981, the real estate taxes for the year 1978 only were paid in full. The real estate taxes for the year 1979, which were also delinquent and which had been included in the notice of default letter, however, were not paid. Although Burr did not correct the default by paying the 1979 real estate taxes, he did, nevertheless, tender to the sellers the installment payments for the years 1981 and 1982, which were accepted by the sellers. During all of this time, Burr failed to pay the real estate taxes for the years 1980, 1981, and 1982.
On or about February 18, 1983, sellers' attorney once again sent a certified letter to Burr informing him that he had failed to pay the real estate taxes for 1979 and all subsequent years and that "this constitutes a default enabling [sellers] to declare the entire unpaid balance due on the contract." The letter did not, however, indicate that Burr had 90 days in which to cure any of the defaults noted in the letter of February 18, 1983. On April 25, 1983, suit was commenced by sellers. Nearly a month later, on May 20, 1983, and after suit was commenced, Burr paid the real estate taxes for the years 1979 through 1982. He did not pay the 1983 taxes until September 27, 1984, more than a year after the suit was commenced.
Buyers' argument seems to be that because the sellers accepted the payments of principal which were due, sellers waived the acceleration and therefore could not proceed to foreclose on the agreement for the full amount due and owing on the purchase price unless the sellers gave buyers another 90 days in which to cure the default occasioned by their failing to pay the real estate taxes for the years 1979 through 1983. In that regard we think buyers are in error.
To begin with, the law in this jurisdiction is clear that where the parties enter into an executory contract for the sale of real estate, even though title has not passed, the vendor, upon default by the vendee, may treat the contract as an ordinary real estate mortgage and foreclose it as such. See, Ryan v. Kolterman, 215 Neb. 355, 338 N.W.2d 747 (1983); Hendrix v. Barker, 49 Neb. 369, 68 N.W. 531 (1896). Furthermore, the right to accelerate upon default is binding and enforceable. As we noted in Occidental Sav. & Loan Assn. v. Venco Partnership, 206 Neb. 469, 480-81, 293 N.W.2d 843, 849 (1980) [A] stipulation in a mortgage, providing that the whole debt secured thereby shall become due and payable upon failure of the mortgagor to pay the interest or any installment of principal upon maturity thereof or to comply with any other condition of the mortgage is a legal, valid, and enforceable stipulation and is not in the nature of a penalty or forfeiture which a court of equity will refuse to enforce.
(Emphasis in original.)
The requirement of paragraph 4 of the agreement regarding the payment of taxes was such a condition, and...
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