Severson v. Eide
| Decision Date | 13 December 1927 |
| Docket Number | 5288. |
| Citation | 216 N.W. 581,52 S.D. 20 |
| Parties | SEVERSON v. EIDE et al. |
| Court | South Dakota Supreme Court |
Appeal from Circuit Court, Brown County; B. A. Walton, Judge.
On rehearing. Judgment and order reversed and remanded, with directions.
For former opinion, see 48 S.D. 142, 203 N.W. 199.
Campbell & Fletcher, of Aberdeen, for appellant.
McNulty & Campbell, of Aberdeen, and Baldwin & Lyons, of Howard, for respondents.
This cause is now before us on rehearing. The former opinion is reported in 48 S.D. 142, 203 N.W. 199, to which reference is made for the facts to be considered with those that are here added. The action was brought under sections 2914 to 2917 inclusive, R. C. 1919, for strict foreclosure of the contract. The total consideration to be paid for the land was $76,800. A cash payment of $8,000 was made, and the balance of $68,800 was to be paid on March 1, 1930, but interest at 6 per cent. on such deferred payment was to be paid annually and also taxes subsequent to the year 1919. Defendants failed to pay the taxes and interest accruing, which constitutes the default supporting the action. The amount of taxes for the years 1920 and 1921 is not disclosed by the record, but by computation the interest is shown to amount to $8,256 for those years. The value of the rents for those years was found by the court to be $2,960.98. Plaintiff claims the right to apply or set off the rent against what is due him and proceed with the action for default in payment of the balance. Defendants claim the right to forfeit the initial payment $8,000, have the contract canceled, and recover the rent. The trial court sustained defendants' position, and plaintiff has appealed from the judgment.
The disposition of the rents is the source of the questions presented.
In the former opinion this language was used:
"As these rentals accrued, plaintiff applied them on the purchase price of the land, and they thereby became as much a payment on the purchase price of the land as though defendants had actually paid that amount into the hands of plaintiff, and plaintiff had the right to treat this amount as though it had been paid directly to him by the defendants."
As this statement did not appear to be supported by the record, a rehearing was granted. With the difference in facts as now stated, should a different result be reached? If there had been an agreement that, as the rents accrued, they should be applied on the contract, and such application had been made there would have been a completed payment. With such an agreement, a belated payment with a proper allowance of interest could have been made on the contract at any time before its termination. But without an agreement that the rents shall be so applied and paid on the contract, the right to make such disposition of the rentals, if it exists, must rest upon some legal or equitable principle, and not by virtue of express contract. Plaintiff's pleading is appropriate for the relief asked. Defendants' answer, so far as it refers to the rentals, asks for an accounting of them, but for no affirmative relief. A decree adjudicating the amount of the rentals, allowing them to be set off against the accrued interest and taxes, and fixing the balance to be paid would have been consistent with the pleadings.
The decree that was rendered declared that the contract should be strictly foreclosed, but did not state the amount due or fix any time for compliance with the contract as provided by the statute. Instead it declared defendants had no interest, estate, right, or title to the premises covered by the contract, quieted the title in plaintiff, and rendered judgment against plaintiff in favor of defendants for $2,960.98, the amount of the rent. This was not in accordance with the statutory requirements in this form of action or responsive to the pleadings, there being no counterclaim or affirmative relief asked in the answer.
During the trial, however, defendants offered to waive any right under the contract and to forfeit the amount paid and consented that no time be given for redemption, and it seems to have been at least tacitly understood that the status of the rents should be determined, and, if found to belong to defendants, they should have judgment therefor. The vital question and the one of real interest to the parties is not whether the court could in this action grant the relief it did, but whether defendants can recover the rents in any action.
The theory upon which plaintiff is denied the right to set off what he owes defendants for rent against what defendants owe him for interest and taxes seems to be based upon the contract of the parties, whereby it is provided that if the contract be...
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