Joy v. Little

• Decision Date: 30 July 1958
• Docket Number: No. 9760,9760
• Citation: 328 P.2d 636,134 Mont. 82
• Parties: Cora E. JOY, Plaintiff, v. Forrest LITTLE and LaVon Little et al., Defendants. Lee JOY and Berniece E. Joy, his wife, Appellants and Cross-Complainants, v. Forest LITTLE and LaVon Little, his wife, Respondents and Cross-Defendants.
• Court: Montana Supreme Court

Page 636

328 P.2d 636

134 Mont. 82

Cora E. JOY, Plaintiff, v. Forrest LITTLE and LaVon Little et al., Defendants.

Lee JOY and Berniece E. Joy, his wife, Appellants and Cross-Complainants, v. Forest LITTLE and LaVon Little, his wife, Respondents and Cross-Defendants.

No. 9760.

Supreme Court of Montana.

July 30, 1958.

Corette, Smith & Dean, Butte, Collins & Burns, Dillon, for appellants.

John Collins, Dillon, and Kendrick Smith, Butte, argued orally for defendants.

J. F. Emigh, H. D. Carmichael, Butte, McFadden & Davis, Dillon, for respondents.

Theodore McFadden, Dillon, argued orally for respondents.

ANGSTMAN, Justice.

This action involves the rights of parties to a written contract for the sale of real estate and personal property. Lee Joy and his wife Berniece, were the sellers and Forrest Little and his wife, LaVon, were the buyers. The sale was made on February 28, 1952, and named a consideration of $87,500, of which $5,000 was paid at or prior to the time of signing the contract, and $20,375 was to be paid on or before March 1, 1952, and $5,177.08 on the 1st day of March each year thereafter until payment was made in full. Unpaid balances were to draw interest at the rate of five percent per annum.

The time of making certain installment payments was extended by supplemental written agreements. The contract recited that in the event of default on the part of the purchaser in any of the payments for a period of thirty days, the balance of the purchase price then remaining unpaid, together with accrued interest would become immediately due and payable, 'or at the option of the Sellers' all rights acquired by the purchasers would become 'void and of no further force or effect' and that upon the exercise of such option by the sellers, the 'buyers shall not be entitled to the return of all or any part of the moneys theretofore paid by them pursuant to the terms and conditions of this contract, and all such moneys shall be deemed and considered as rental for the use and occupation of said lands and premises and the use of said personal property by the Buyers up to the time of default, and as liquidation damages for such default, and not as a penalty.'

The contract also provided for a lien against the land in favor of Cora E. Joy, mother of Lee Joy, to secure payments of certain sums of money to thereafter become due to her from Lee Joy and his wife.

The purchasers took possession of the property on March 3, 1952. They have since remained in possession, and paid in excess of $33,000 on the purchase price, inclusive of interest, but failed to pay the installment coming due on March 1, 1954.

Other facts alleged and found by the court will be alluded to later.

This action was brought by Cora E. Joy to foreclose the lien for her benefit. Lee Joy and his wife, Berniece, filed cross complaint against the purchasers, the Littles, setting out the foregoing facts, and alleging that they had performed all things required of them under the contract as modified except that they had not deposited in escrow the instruments mentioned in the contract until April 22, 1954, but alleging facts tending to show that the purchasers waived this requirement of the contract. They alleged that the purchasers have 'failed, neglected and wilfully refused to perform the obligations required of them' under the contract as modified. They further alleged that the purchasers have been guilty of wilful breaches of the contract in several specified particulars, and that on June 1, 1954, the sellers served notice upon the purchasers reciting that the purchasers 'have failed and refused to carry out the terms, provisions and covenants of said agreements to be performed by them and have failed * * * and refused to make the payment of principal and interest due on March 1, 1954, * * * and said default having continued for a period of more than thirty (30) days, the undersigned hereby give notice to said Forrest Little and LaVon Little, his wife, that the entire balance of the purchase price, including principal and interest, under said agreement is now due and payable and demand is hereby made for the payment of the same. * * *

'* * * that under said agreements hereinbefore referred to, there has heretofore been deposited with the State Bank & Trust Company at Dillon, Montna, all of the documents and instruments required to be filed and deposited by the undersigned with said Bank.'

On November 20, 1954, the following letter is alleged to have been sent to the purchasers:

'Forrest Little and LaVon Little

'Dear Mr. and Mrs. Little:

'You, and each of you, are hereby notified that unless you pay to the undersigned, Lee Joy and Berniece E. Joy, his wife, on or before the 20th day of December, 1954, the entire sum due from you to them under and by virtue of that certain contract dated February 28, 1952, between Lee Joy and Berniece Joy, his wife, as 'Sellers' and Forrest Little and LaVon Little, husband and wife, as 'Buyers' which said agreement was modified by an agreement dated April 1, 1953, between the same parties and further modified by an agreement dated December 31, 1953, between the same parties, then and in that event the undersigned, Lee Joy and Bernice [sic] E. Joy, will terminate, and your said failure will terminate, all of your rights under said contract as so amended, together with all the payments heretofore made by you thereon, and all such monies shall be deemed and considered as rental for the use and occupation of the land and premises and use of the personal property by you up to said date and as liquidated damages for such default, and all your defaults, and not as a penalty.

'You, and each of you, are hereby notified of and served with an instrument dated June 1, 1954, and marked Exhibit 'A' and hereby attached hereto which said Exhibit 'A' was heretofore served upon you and which is now again served upon you.

'/s/ Lee Joy

'/s/ Berniece E. Joy'

The Littles filed answer to the cross complaint containing admissions and denials and an affirmative defense. The affirmative defense alleged failure of the sellers to execute and deliver in escrow the necessary papers; that the purchasers had paid in excess of $33,000 on the contract and had made certain improvements on the property involving expenditures of more than $1,300, and alleged the failure of the sellers to meet their obligations under the contract in several particulars; that on March 31, 1954, they, as purchasers, rescinded the contract by giving the following notice:

'To Lee Joy and Berniece E. Joy:

'You, and each of you, will please take notice that the undersigned intend to, and do hereby rescind that certain written contract dated the 28th day of February, 1952, wherein and whereby you agreed to sell, and the undersigned agreed to buy, certain real and personal property situated in Beaverhead County, Montana, in said contract described, for the price and upon the terms and conditions in said contract set out.

'Said rescission is based upon each of the following grounds:

'(a) Your failure to deliver to the undersigned for examination, as in said contract provided, an abstract of the title to the real property agreed to be sold and purchased in and by said contract.

'(b) Your failure to deliver a bill of sale, in escrow, as in said contract provided, to State Bank & Trust Company, of Dillon, Montana, transferring to the undersigned the personal property agreed to be sold in and by said contract, for delivery to the undersigned upon performance by them of said contract.

'(c) Your failure to deliver an assignment, in escrow, as provided in said contract, to State Bank & Trust Company, of Dillon, Montana, assigning to the undersigned the State land lease in said contract described, for delivery to the undersigned upon performance by them of said contract.

'(d) Your failure to deliver an assignment, in escrow, as provided in and by said contract, to State Bank & Trust Company of Dillon, Montana, assigning to the undersigned the Taylor Grazing permit in said contract described, for delivery to the undersigned upon performance by them of said contract.

'(e) Your notifying the undersigned that you would refuse to consent to the sale by them of their right, title and interest in and to said contract, if they found a purchaser for the same, after having previously promised the undersigned and agreed with them, that you would give such consent.

'(f) Your failure to place a copy of said contract, in escrow, with State Bank & Trust Company of Dillon, Montana.

'(g) That said contract is so indefinite and uncertain that the same is unenforceable.

'(h) Any and every additional ground, if any, which entitled the undersigned to rescind said contract.

'The undersigned hereby offer to restore to you everything of value which they have received from you pursuant to said contract, and to surrender to you the possession of all of said properties agreed to be sold and purchased in and by said contract and to do and perform all acts which might be necessary or proper in order to restore to you the properties and things of value received from you pursuant to said contract, as fully and completely as if said contract had never been made, upon the condition that you likewise restore to the undersigned everything of value which you have received from the undersigned pursuant to said contract, as fully and completely as if said contract had never been made.'

The Joys joined issue by filing a reply to the affirmative defense of the buyers.

The cause was tried to the court...