Semmler v. Beulah Coal Mining Co.

• Court: United States State Supreme Court of North Dakota
• Writing for the Court: BRONSON
• Citation: 188 N.W. 310,48 N.D. 1011
• Parties: SEMMLER et ux. v. BEULAH COAL MINING CO. et al.
• Decision Date: 12 May 1922

48 N.D. 1011
188 N.W. 310

SEMMLER et ux.
v.
BEULAH COAL MINING CO. et al.

Supreme Court of North Dakota.

May 12, 1922.

[188 N.W. 310]

Syllabus by the Court.

Upon a conveyance by quitclaim of the right, title, and interest of a vendor in a land contract, the grantee therein secures all of the rights of the vendor, including the right to enforce payment of the unpaid purchase price.

In a land contract containing independent covenants for the payment, upon installments, of the purchase price and for the payment of taxes, the vendee, upon failure to perform such independent covenants, is not in a position to avoid proceedings to enforce the breach of such covenants upon the ground that the holder of the contract is then unable to convey title as required by the contract.

Where the assignee of the vendee's land contract, in an action to quiet title, asserts that proceedings in cancellation of the contract for failure to pay installments of the purchase price and taxes are invalid because the assignee of the vendor cannot convey title by warranty as required by the contract, it is held, for reasons stated in the opinion, that the assignee of such vendee, at the time of the cancellation proceedings, was not required by the contract to then be able so to perform.

Additional Syllabus by Editorial Staff.

Upon making contract for sale of land where purchaser takes possession, a relation more than personal is created between the parties,

[188 N.W. 311]

and a privity of estate arises, and in equity an estate passes to the purchaser, and the equitable estate is measurable as a fee subject to the vendor's lien, and in equity there exists an equitable conversion, and, while in law the vendor retains the legal estate, in reality through the interposition of equity the legal estate is retained to enforce the vendor's rights under the contract and the payment of the unpaid purchase price.

The equitable estate possessed by the purchaser under land sale contract may be sold and assigned in the absence of a contract restriction, and the legal estate possessed by the vendor and recognized in equity as a vendor's lien may be conveyed or assigned.

Appeal from District Court, Mercer County; Pugh, Judge.

Action by Carl Semmler and wife against the Beulah Coal Mining Company and others. From a judgment in favor of the plaintiffs, the defendants appeal. Reversed, and judgment entered dismissing the action.

Grace, J., dissenting.

Newton, Dullam & Young, of Bismarck, for appellants.

Sullivan, Hanley & Sullivan, of Mandan, for respondents.

Statement. BRONSON, J.

This is an action to quiet title in certain coal lands. The salient facts are not seriously in dispute; largely, they are stipulated. They are as follows: Adjacent to the town site of Beulah, N. D., lie a fractional 80 acres of land, underlaid, for some 45 acres, with valuable lignite coal. On June 22, 1915, the owner thereof, one Juzeler, executed a contract for a deed therefor to Carl Semmler, the plaintiff. This contract expressed a consideration of $2,450, of which $105 was paid at the time of its execution. For the balance of the consideration, the contract provided annual payments thereafter covering a period of six years. The contract contained the usual provisions in case of default and prescribed that time was of the essence of the contract. Pursuant to this contract, Semmler entered into possession, sunk a shaft, installed certain mining machinery, and mining buildings. With this outfit he mined a quantity of coal on the premises. In accordance with his testimony the value of the improvements so placed by him upon the premises amounted to $8,600. On November 16, 1915, Semmler assigned his contract to the defendant First State Bank of Beulah. This assignment provided that it should be void if Semmler paid to the bank one note for $1,000 bearing even date therewith and due July 1, 1916. The money he received from the bank was invested in the mining property. Other moneys were advanced by the bank aggregating, in toto, $2,600, all of which were invested in mining improvements. Through such improvements, certain liens were created against the property. On June 16, 1916, Semmler quitclaimed his interest in the mining property to his wife.

On October 18, 1916, the First State Bank assigned its contract and its indebtedness against Semmler to one Mounts. The latter was then connected with a town-site company. He entered negotiations with the bank for the purpose of securing title to the property, understanding that the same was in the market and that the holder must relinquish his contract. He paid the bank $2,600 and interest; also, the liens against the premises. His total payments, so made, aggregated $4,600.

On February 7, 1917, Juzeler quitclaimed the land to one Kenyon, now deceased. Kenyon was then cashier of the First State Bank. No payments were ever made by Semmler upon the contract excepting the sum of $105. On February 14, 1917, Kenyon instituted statutory proceedings to cancel the contract for defaults of Semmler in failing to pay taxes and yearly payments stipulated in the contract. Pursuant to such proceedings, Kenyon declared the contract forfeited on March 19, 1917.

On August 3, 1917, Kenyon quitclaimed the land to the defendant coal company, which was then organized as a North Dakota corporation. Later, it reorganized as a Minnesota corporation with substantially the same stockholders, officers, and directors, taking over the property from its predecessor, the North Dakota corporation. Mounts, above mentioned, was and is the secretary of the coal company. He was reimbursed by the company for the payments made by him to the bank. Semmler ceased his mining operations on July 3, 1916, and since that time has not been in the actual occupancy of the land or the mine. The coal company, in August, 1917, commenced to improve the mining property. They have been in possession of the land ever since. Extensive improvements have been made aggregating about $200,000. This coal company has mined some 100,000 tons of coal upon this land. In March, 1917, Carl Semmler instituted an action against Kenyon to restrain the cancellation proceedings. Demurrer was interposed, to the complaint, by reason of failure to state a cause of action, and was sustained. Judgment, accordingly, was entered in June, 1917, dismissing such action. In July, 1920, this action was instituted by Carl Semmler and his wife to quiet the title in the land. Trial was had in April, 1921. The plaintiff then tendered the full amount due upon the contract. This tender was refused. Thereafter,

[188 N.W. 312]

in August and September, 1921, further evidence was taken. Plaintiff's testimony is to the effect that these lands were worth $27,000 when taken by the defendant. Testimony of the defendants on the contrary is to the effect that such lands, without the improvements, were not worth more than $30 per acre, and that plaintiff's improvements were not of any substantial value. The trial court made findings in...