McDaniel v. Hager-Stevenson Oil Co.
| Decision Date | 08 February 1926 |
| Docket Number | 5796. |
| Citation | 243 P. 582,75 Mont. 356 |
| Parties | McDANIEL v. HAGER-STEVENSON OIL CO. |
| Court | Montana Supreme Court |
Appeal from District Court, Toole County; W. E. Carroll, Judge.
Actions by John McDaniel against the Hager-Stevenson Oil Company, in which defendant filed counterclaims. From a judgment for plaintiff in the first action, and on the first cause of action stated in the second action, and for defendant on his counterclaim in the second action, defendant appeals. Modified and affirmed.
Homer G. Murphy and Hurd, Rhoades, Hall & McCabe, all of Great Falls, for appellant.
Louis P. Donovan, of Shelby, for respondent.
This is an appeal from a judgment rendered in two actions which were consolidated for the purpose of trial. We shall, for convenience, refer to these as the first and second actions.
In the first action plaintiff sought recovery of the sum of $1,017 with interest, claiming that sum as a balance due for work labor, and services in building a water reservoir upon plaintiff's land for defendant. (The land was leased from plaintiff by defendant.) In its answer defendant admitted the employment of plaintiff, and claimed the balance due to be $383 only. The defendant interposed a counterclaim based upon an alleged breach of a covenant to convey the land on part of plaintiff.
In the second action the complaint consisted of two causes of action. Under the first the plaintiff sought to recover $3,380.67, alleged to be due him by virtue of a contract in writing whereby defendant, in consideration of an oil and gas lease executed by plaintiff to defendant upon plaintiff's land, engaged to pay off various liens, mortgages, and taxes thereon. The second cause of action set forth in this complaint need not be considered, as a jury found against plaintiff thereon.
Defendant answering the second action, set up three defenses. The first defense admitted the execution of the contract in so far as it related to the payment of a mortgage in the sum of $2,300; admitted an agreement to pay all taxes which were liens upon the land. The second defense need not be noticed, as it related to the second cause of action.
The third defense, together with a counterclaim, was directed to the entire complaint. Defendant alleged the employment of plaintiff to build a reservoir, and placed valuation upon the employment; alleged payment of various sums of money in consideration of the conveyance to it of oil and gas interests in plaintiff's land; alleged that such interests are without value by reason of the fact that plaintiff had given a prior lease upon the land which had not been canceled. Upon the counterclaim defendant sought to recover $2,298.86 and interest.
During the trial it was stipulated that plaintiff's causes of action should be deemed merged and consolidated into one complaint, setting forth three causes of action, and that the answers and counterclaim of the defendant in both actions should be deemed merged and consolidated into one answer, and counterclaim; and, in the event that inconsistency between the answer and counterclaim interposed in the first action and that interposed in the second should appear, the latter should be controlling; also that the replies should be merged and consolidated into one.
The jury found for the plaintiff upon the cause of action stated in the first action, upon the first cause of action stated in the second action, and upon the counterclaim; found in favor of the defendant upon the second cause of action set forth in the second action. Judgment was entered accordingly. The defendant moved for a new trial, which was denied. Thereafter the defendant appealed.
Counsel for defendant say that, as the verdict of the jury in the first action was based upon conflicting evidence, they will not undertake to overthrow it. They confine themselves to a discussion of the issues raised by the pleadings and evidence in the second action, but, as the two were consolidated, the ultimate result reached in the first is dependent upon the defense and counterclaim interposed in the second.
The specifications of error, when analyzed, say counsel for defendant, present two main issues as follows: (1) What is the proper construction of the agreement set forth in plaintiff's complaint and defendant's answer in the second action? (2) Was there a breach by plaintiff of his covenant of good right to convey?
The plaintiff on his part makes cross-assignments of error, which he asks us to consider under the provisions of section 9751, R. C. 1921, which requires this court to consider, upon a record of this character, the errors assigned by respondent as well as those by appellant, and to reverse or affirm the cause according to the substantial rights of the parties, as shown by the record. This we shall do, taking into consideration also section 8805, R. C. 1921, which provides in part:
"The Supreme Court may affirm, reverse, or modify any judgment or order appealed from, and may direct the proper judgment or order to be entered, or direct a new trial or further proceedings to be had."
1. The facts are that on November 11, 1922, the plaintiff and his wife executed to defendant an oil and gas lease on 320 acres of land for a term of five years from date, "and as long thereafter as oil, gas, hydrocarbons, or minerals is produced therefrom in commercial quantities, unless terminated earlier as hereinafter provided." The lease reserved to the lessors the usual royalties. Other provisions will be referred to later. Simultaneously with the execution of this lease the defendant made and delivered to the plaintiff the agreement which is in controversy. By its terms it was acknowledged that the true consideration for the lease was that defendant agreed "to pay off and discharge, at its own expense, delinquent taxes upon said lands for the years 1920 and 1921, and also pay off and discharge that certain mortgage for $2,300 together with the unpaid interest thereon, which mortgage is now a lien upon said lands."
The fact is that on February 18, 1918, in order to secure a loan of $2,300, plaintiff had executed his promissory note in that amount payable in five years, with five 6 per cent. interest coupons thereto attached, one of which came due on the 1st day of March of each year. To secure the payment of the same, plaintiff and his wife executed a mortgage upon the land. At the same time, and as a part of the same transaction, plaintiff executed five additional promissory notes, the amount of which was calculated upon the principal sum of 2 per cent. thereof, and these notes were in the sum of $46 each, except the first one, which was for $47.66. These notes were secured by what was called a second, or commission, mortgage on this same land.
Plaintiff contends that the true intention was, and it was within the contemplation of the parties in making the agreement, that the defendant should pay the second mortgage, as well as the first, and in his complaint he pleaded accordingly. He alleged that the agreement was drawn by defendant's counsel, who represented to him that the agreement, as drawn, expressed the intention of the parties. While admitting the execution of the agreement and its drafting by defendant's counsel, defendant denied that there ever was any understanding that the second mortgage should be paid by it. The plaintiff did not ask for a reformation of the instrument, but stood upon its terms. His counsel said to the court that he was not attempting to vary its terms:
"I am attempting to show the circumstances under which it was executed, as an aid in its construction and interpretation. * * *"
In order to substantiate his contention, the plaintiff gave testimony tending to show that, when the agreement was being discussed, he told Mr. Stevenson and Mr. Murphy, who represented the defendant, that the amount of the loan upon the land was $2,300, and it bore interest at 9 per cent. The mortgage was not produced. The plaintiff knew there were two mortgages, a first and a second, but he did not mention the second mortgage.
It is insisted that, as plaintiff advised the defendant's representatives that the interest was 9 per cent., they especially Mr. Murphy, should have known there was a second mortgage. Mr. Murphy admitted upon cross-examination that, when he drew the agreement, he was aware of the general practice followed in the locality, under which the mortgagee took two mortgages, one for the principal, with interest thereon at 6 per cent., and a second mortgage for 2, 3, or 4 per cent. on the amount loaned, representing a commission on the loan. Mr. Murphy testified that, when he was negotiating for the lease, he did not know there was a second, or commission, mortgage. "Nothing whatever was said by either Mr. or Mrs. McDaniel about there being a second, or commission, mortgage." This testimony was corroborated by Mr. Stevenson, and it is not asserted by Mr. or Mrs. McDaniel that either ever mentioned the second mortgage. To sum up without further reference to the evidence: Plaintiff contends that, as he told Mr. Murphy the mortgage drew interest at 9 per cent., whereas it drew but 6 per cent., and as Mr. Murphy knew the custom, he should have known the other 3 per cent. was included in a second mortgage. This is too far-fetched. The agreement provided that the defendant should "pay off and discharge that certain mortgage for $2,300, together with the unpaid interest thereon, which mortgage is now a lien upon said lands." This is plain and unequivocal. It does not require any interpretation. It speaks a definite language. A contract may not be changed or revised under the guise of interpretation. Where a contract is plain and clear in its terms, neither...
To continue reading
Request your trial