Petty v. Clark

• Decision Date: 21 April 1948
• Docket Number: 7074
• Citation: 192 P.2d 589,113 Utah 205
• Court: Utah Supreme Court
• Parties: PETTY et ux. v. CLARK et al

192 P.2d 589

113 Utah 205

PETTY et ux. v. CLARK et al

No. 7074

Supreme Court of Utah

April 21, 1948

Appeal from District Court, Fifth District, Washington County Charles G. Cowley, Judge.

Action by Charles B. Petty and wife, against Dean A. Clark and others, to recover a balance allegedly due on a contract to buy realty, that same be declared a lien thereon, and that the lien be foreclosed. From an adverse judgment, plaintiffs appeal.

Reversed and remanded in accordance with the opinion.

A Ladru Jensen, of Salt Lake City, for appellants.

George S. Ballif, of Provo, for respondents.

Wade Justice. McDonough, C. J., and Pratt, Wolfe, and Latimer, JJ., concur.

OPINION

Wade, Justice.

Plaintiffs, Charles B. and Maggie C. Petty, husband and wife and appellants herein, brought this action to recover from defendant Dean A. Clark the balance which they claim is owing to them, on a written contract of purchase and sale, as the purchase price of certain real estate in Hurricane, Utah. Plaintiffs also ask that such balance be adjudged a lien against the property purchased and that such property be sold in satisfaction thereof and that the lien be foreclosed against the defendants. The wife of Dean A. Clark and Hannah C. Pike, a judgment creditor of Clark, were joined as defendants in order to foreclose any interest which either of them might have in this property.

This case was here once before, see Petty v. Clark, 102 Utah 186, 129 P. 2d 568. In that case the trial court submitted the issues of fact to a jury on special interrogatories which the jury answered in favor of the defendant. But the court concluded that this was an equity case and the jury's findings were only advisory and made and entered findings and judgment contrary thereto. We reversed the trial court on the grounds that the findings of the jury were binding on the court and remanded it back for a new trial. On the new trial another judge was called in to try the case who again submitted the same issues of fact to another jury on special interrogatories, and again the jury found in favor of the defendant, and the court entered a judgment accordingly of no cause for action. To reverse that judgment plaintiffs appeal to this court.

In making the contract in question, only after much negotiation was a tentative agreement reached and the contract reduced to writing. Clark claims that on January 18, 1929, the day the contract was entered into, Petty came to his drug store at St. George, Utah, and brought with him the proposed contract with a promissory note already prepared; that each were dated that day and typewritten with an original and two carbon copies. That the original and carbon copies of the contract were already signed by the Pettys and without careful examination he also signed them. That upon examining the promissory note preparatory to signing it he noticed that it provided for interest at one per cent per month from maturity on all installments not paid when due until paid. Whereupon he examined the contract more carefully and found that it contained a similar provision. He then stated that this provision was not in accordance with their previous understanding, which was that he should not be required to pay interest on any installment either before or after it became due, and that he would not sign such a note and unless Petty would agree to his terms the sale was all off. After some discussion Petty agreed to his terms and took a pen and Xed out, in at least one copy of the contract, which copy was later deposited with the bank, the paragraph which provided for interest on past due installments, whereupon he destroyed the note which Petty had prepared and drew an original and two copies of a new note on his own typewriter which provided that the payments should be made without interest and that he signed this new note.

Both Petty and Clark agree that a copy of the note and contract, together with a deed dated January 22, 1929, from the Pettys to Clark and a rider were, pursuant to the contract, deposited in escrow with the Hurricane State Bank, and that each of them retained a copy of these instruments. That later another rider dated November 12, 1932, was deposited with these papers in the bank which allowed a reduction in the monthly installments from $ 50 to $ 25 per month for at least a period of two years. Under the terms of the contract Clark agreed to pay Petty at the Bank a total of $ 4800, in payments of $ 50 each, commencing on February 1, 1929, and continuing for a period of eight years. In the interest clause in the contract which Clark claims was Xed out there was a provision that

"no interest should be charged until after maturity of the respective installments, and the second party (Clark) shall be given forty days grace on any payment, and the past due payments shall bear interest at the rate of one per cent per month until paid."

The note simply provides for same payments as the contract "without interest." On June 28, 1938, Clark completed his payments of $ 4800 without interest and the bank surrendered the escrow papers to him and he immediately recorded the deed.

Petty does not agree that the interest paragraph of the contract or any other part thereof was Xed out of the contract or any copy thereof before it was entered into or deposited with the bank. Nor does he agree that the note was rewritten to take out the interest clause and provide for no interest, or that he ever agreed to enter into any contract with the interest provisions of the contract omitted. He was not sure whether the contract and note were already drawn up before he went to Clark's Drug Store the day those papers were executed or whether he and Clark wrote them out on Clark's typewriter after he got there, nor is he sure whether Mrs. Petty signed it before or after it had been signed by Clark. But according to his testimony he is positive that no newnote was written on Clark's objection to the interest provision thereof, and he is positive that neither he nor Clark nor any one else Xed out the interest provision of the contract on any copy thereof before Clark signed it or before it was delivered to the Bank or at all. As soon as Petty learned that the bank had surrendered the escrow papers to Clark and the deed had been recorded, he began negotiations with both Clark and the bank to recover the balance which he claimed was owing to him on the contract. After numerous negotiations and failing to reach a settlement he commenced this action on May 11, 1940.

In each trial the only issues of fact presented were: Did the parties, upon Clark's objection to the interest clause in the note and contract as originally drawn, agree that no interest should be payable on the installments either before or after maturity, and pursuant thereto was the note rewritten providing for the payment of the installments without interest and the paragraph in the contract providing for interest at one per cent per month on past due installments Xed out in the contract as executed and deposited with the bank? In each trial these issues were submitted to the jury on special interrogatories and the jury in each case found in favor of Clark. In the first trial six of the eight jurors agreed on the findings, and in the last trial seven of them agreed thereon. In the first trial the court found the facts contrary to the jury's findings and entered judgment in favor of Petty. We reversed that judgment on the ground that the finding of the jury was binding on the court under Section 104-23-5, R. S. U. 1933, which is now same section of U. C. A. 1943, which provides that,

"in actions * * * for money claimed as due upon contract * * * an issue of fact may be tried by a jury, unless a jury trial is waived * * *."

Since that decision the legislature has amended that section of the statute by adding the following provision thereto:

"Included within the equitable suits in which a jury shall be only advisory to the court shall be suits to foreclose mortgages and other liens." Laws of Utah for 1945, Chapter 25, page 68.

Plaintiff's contend that in enacting this provision of the statute the legislature clearly expressed its intention to overrule our previous decision in this case. That it in substance and effect thereby said: That although under our statute in effect at the time of the previous trial in actions for money claimed as owing upon a contract the issues of fact raised on that question must, unless such trial is waived, be tried by a jury, yet in such actions to recover money claimed to be owing on a contract where the foreclosure of a mortgage or other lien to secure the payment thereof is also sought, the findings of the jury on such issues shall only be advisory to the trial court and may be reviewed by the Supreme Court on appeal.

From the wording of this amendment and the surrounding facts and circumstances we are convinced that such was the legislative intention in enacting it. It was enacted shortly after our previous decision. The provisions which it adds deal exclusively with this kind of a case and the type of cases which were discussed in that opinion. Its language deals only with problems therein decided and contrary to that decision, it provides that in such cases the "jury shall be only advisory to the court." It also touches on the review of this court on appeal by providing that such type of cases shall be "included within the equitable suits" which, inview of our constitutional provision (Article 8, Section 9) that in "equity cases the appeal may be on questions of both law and fact," requires that this court review the facts on an appeal. Under these circumstances it appears clear that such was the purpose and effect of this amendment.

De...