Keller v. Hummel, 10350

• Decision Date: 26 May 1983
• Docket Number: No. 10350,10350
• Citation: 334 N.W.2d 200
• Parties: Robert KELLER, Plaintiff and Appellee, v. John HUMMEL, Jr., Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 200

334 N.W.2d 200

Robert KELLER, Plaintiff and Appellee, v. John HUMMEL, Jr., Defendant and Appellant.

Civ. No. 10350.

Supreme Court of North Dakota.

May 26, 1983.

Freed, Dynes, Reichert & Buresh, Dickinson, for plaintiff and appellee; argued by George T. Dynes, Dickinson.

Vogel Law Firm, Mandan, for defendant and appellant; argued by Jos. A. Vogel, Mandan.

PEDERSON, Justice.

John Hummel, Jr. appeals from a partial summary judgment interpreting a contract for the sale of a quonset building. We reverse and remand for trial.

In April 1979 the parties entered into a written agreement whereby Hummel agreed to sell a quonset-type building to Robert Keller. ¹ The contract provided for a purchase price of $3,500, with $2,000 to be paid April 25, 1979, and the balance of $1,500 to be paid before the structure was moved or by April 15, 1980, whichever came first. The terms of the contract set the rate of interest for the unpaid amount at 5%. The contract also provided that Keller could use the quonset for storage of grain until the time of its removal from the premises and that the building could be removed anytime, but no later than April 15, 1982.

Keller paid the $2,000 down payment and subsequently stored approximately 10,000 bushels of wheat from his 1979 crop in the quonset. It is not disputed that Keller failed to pay the balance due on the contract by April 15, 1980. Hummel contends that Keller informed him that he no longer had any use for the building and that, therefore, Hummel was justified in treating the contract as cancelled. Keller disputes Hummel's contention and says that he informed Hummel, shortly after he had missed payment on April 15, 1980, that he intended to remove and sell his grain in the summer of 1980 and use the proceeds to pay the balance due on the contract, but that Hummel denied him access to the quonset.

In April 1982, following unsuccessful attempts to settle the dispute, Keller commenced this action seeking an injunction to restrain Hummel from interfering with the removal of the grain from the quonset and for compensatory and punitive damages. Hummel counterclaimed, alleging cancellation of contract and seeking an equitable storage lien on Keller's wheat from April 15, 1980. In April 1982 Keller tendered to Hummel the sum of $1,725 which represented the balance due on the contract, plus interest at the contract rate of 5%. Hummel refused to accept payment and the money was then deposited in the district court where it remains pending the final outcome of this action.

The district court entered a restraining order prohibiting Hummel from interfering with the removal of Keller's grain. Keller's subsequent motion for partial summary judgment was granted. ² The district court interpreted the contract and determined ownership of the quonset in favor of Keller, leaving for trial the issue of damages. ³ It is from this partial summary judgment that Hummel appeals. ⁴

Hummel states the issues on appeal as follows:

1. Did the plaintiff breach the contract, thus entitling defendant to cancel the same pursuant to Chapter 9-09, NDCC?

2. Is the defendant entitled to a storage lien on the grain stored by the plaintiff in the quonset after April 15, 1980, the date of breach, until its removal in June 1982?

3. Is summary judgment appropriate in the instant case?

Summary judgment will be entered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to judgment as a matter of law. Rule 56(c), NDRCivP. Summary judgment is not appropriate if the moving party is not entitled to judgment as a matter of law, nor is summary judgment appropriate if it appears from the record that there is an unresolved issue of material fact or if reasonable differences of opinion exist as to the inference to be drawn from undisputed facts. Hadland v. Schroeder, 326 N.W.2d 709 (N.D.1982); Benson Cty. Co-op., Etc. v. Central Livestock, 300 N.W.2d 236 (N.D.1980).

Summary judgment is not appropriate in the instant case because there are genuine issues as to a number of material facts. The material facts involve such questions as whether time of performance of the contract is of the essence and, if time is not of the essence, whether Keller tendered payment within a reasonable time after the date specified in the contract.

In Sorlie v. Ness, 323 N.W.2d 841, 844 (N.D.1982) this court stated:

"The construction of a written contract to determine its legal effect is a question of law for the court to decide. Metcalf v. Security International Ins. Co., 261 N.W.2d 795 (N.D.1978). The determination of whether or not a contract is ambiguous is also a question of law for the court to decide. Schulz v. Hauck, 312 N.W.2d 360 (N.D.1981); Grove v. Charbonneau Buick-Pontiac, Inc., 240 N.W.2d 853 (N.D.1976). Pursuant to Section 9-07-04, N.D.C.C., the intention of the parties under a written contract is to be ascertained from the writing alone if possible. If the parties' intentions can be ascertained from the writing alone, without reference to extrinsic evidence, then the interpretation of the contract is entirely a question of law, and this court will independently examine and construe the contract to determine whether or not the district court erred in its interpretation of it. Metcalf v. Security International Ins. Co., supra; Stetson v. Blue Cross of North Dakota, 261 N.W.2d 894 (N.D.1978). But, if the parties' intentions cannot be determined from the writing alone and reference must be made to extrinsic evidence, then those questions in regard to which extrinsic evidence is adduced are questions of fact to be determined by the trier of fact. Farmers Elevator Company v. David, 234 N.W.2d 26 (N.D.1975); Stetson v. Investors Oil, Inc., 140 N.W.2d 349 (N.D.1966)."

See also Ray Co., Inc. v. Johnson, 325 N.W.2d 250 (N.D.1982).

Under the circumstances of this case it was error for the court to conclude, as a matter of law, that the contract was not ambiguous. The parties' intentions as to whether or not time was of the essence cannot be determined from the writing alone. Unless the intent that time is of the essence is manifest from the face of the contract, it is a question to be determined by the trier of fact and summary judgment should not be granted if reasonable men could differ on the issue. Farmers Elevator Company v. David, supra. Although the quonset sale agreement provided that the balance of the purchase price was to be paid by April 15, 1980, it did not contain the words "time is of the essence," and some of the words used and the conduct of the parties do not support an intent that time was of the essence. If time was of the essence, Keller's failure to pay the balance due on time discharged Hummel from further obligation under the contract, and therefore Keller would not be entitled to summary judgment on the question of ownership of the quonset. E.E.E., Inc. v. Hanson, 318 N.W.2d 101 (N.D.1982)....