Shelly v. Mikkelson

• Decision Date: 11 April 1895
• Citation: 63 N.W. 210,5 N.D. 22
• Parties: SHELLY v. MIKKELSON.
• Court: North Dakota Supreme Court

5 N.D. 22

63 N.W. 210

SHELLY

v.MIKKELSON.

Supreme Court of North Dakota.

April 11, 1895.

Syllabus by the Court.

1. Plaintiff sold real estate to the defendant, and received defendant's two promissory notes, due, respectively, in one and two years, for the purchase money. At the same time, plaintiff executed and delivered to defendant a bond for a deed, binding himself or his assigns to convey the land to the defendant upon full payment of the purchase money according to the terms of the notes. The bond was duly recorded. About the time the note last falling due matured,-no action having been brought on the first note, and time not being of the essence of the contract,-the plaintiff, without tendering a deed of conveyance to the defendant, sold and quitclaimed the land to one Percival; and the latter, prior to the commencement of this action, sold and conveyed the land to the defendant, who still owned the land at the time of the trial of this action. Plaintiff, when he quitclaimed to Percival, did not turn over the notes, but retained possession thereof, and brought this action upon said notes. Upon this state of facts appearing in evidence, the trial court directed a verdict for the plaintiff for the amount of the notes, with interest. Held error.

2. Held, further, that the action which was tried as an action at law was essentially an action in equity for the specific performance of a contract to convey land brought by the vendor. In such cases the vendor must either tender a conveyance before suit, or be in such a position with reference to the land that he can be compelled by a decree to perform his part of the contract. When not so compellable, the plaintiff cannot recover.

3. Held, further, that after both notes had fallen due, neither having been sued independently, or transferred, the notes and bond for a deed became essentially one indivisible contract, and must be construed together, as a single contract embracing mutual and dependent covenants.

4. Held, further, that the defendant has a right to assume, prima facie, and act on the assumption, that the plaintiff, who transferred the land to a stranger without tendering a conveyance to the defendant after the debt matured, intended thereby to abandon the contract on the plaintiff's part, and turn over to his grantee all of his rights and obligations growing out of the land contract, and the trust relation created by it, and that if the defendant then, in good faith, purchased of the plaintiff's grantee, and obtained title from him, without any notice that the plaintiff had reserved the right to recover the purchase money, the plaintiff could not recover the purchase money from the defendant, even if the right to recover the purchase money had in fact been reserved, as between the plaintiff and his grantee.

Appeal from district court, Ramsey county; D. E. Morgan, Judge.

Action by Iver E. Shelly against Mads Mikkelson. Judgment for plaintiff, and defendant appeals. Reversed.

Corliss, J., dissenting.

M. H. Brennan, for appellant. Cowan & Denoyer, for respondent.

WALLIN, C. J.

The principal facts in this case, appearing of record, may be condensed as follows: On January 20, 1890, the plaintiff sold to the defendant certain real estate, which was then incumbered by a mortgage, and received as consideration for such land the defendant's two promissory notes, falling due, respectively, on December 15, 1890, and December 15, 1891. The contract of sale was reduced to writing, in the form of a bond for a deed, which was duly recorded on September 7, 1890, and was in the following language: “Know all men by these presents that Mads Mikkelson, of De Groat, in the county of Ramsey and territory of Dakota, is held and firmly bound unto I. E. Shelly in the sum of three hundred and four and 38/100 dollars, lawful money of the United States, to be paid unto I. E. Shelly, his heirs, executors, administrators, or assigns, for which payment well and truly to be made he binds his heirs, executors, and administrators firmly by these presents. Whereas, the said I. E. Shelly has this day bargained and sold unto the said Mads Mikkelson, his heirs, executors, and assigns, a certain lot or parcel of land, situate, lying, and being in the county of Ramsey and territory of Dakota, designated and described as follows, to wit, the north half of the southeast quarter of southeast quarter of section eleven, and the northeast quarter of the northeast quarter of section fourteen, in township one hundred and fifty-six north, of range sixty-five west: Now, therefore, the condition of this obligation is such that if the said I. E. Shelly, his heirs, executors, administrators, or assigns, make, execute, and deliver a good and sufficient warranty deed, with full covenants, except as to such incumbrances as may arise by virtue of any tax assessed subsequent to the execution of this instrument, and a first mortgage of $275 and interest now on the land, and tax of 1889, of the above-described premises, upon being paid the full sum of three hundred and four and 38/100 dollars, according to the conditions of the two notes, one for $154.38, due December 15th, 1890, and one note for $150, due December 15th, 1891, both notes bearing dates the 20th day of Jan., 1890, and 10 per cent. int., or when he has broken 80 acres on the land, and secured said notes with mortgage on crop for 1891 on said land, bearing even date herewith, then this obligation to be null and void, otherwise to remain in full force and virtue. In testimony whereof, I have hereunto set my hand and seal this 20th day of January, A. D. 1890. I. E. Shelly. [Seal.]” This action is upon said promissory notes, and was not instituted until after both notes had matured, by their terms. The plaintiff prays only for a money judgment, and does not set out in his complaint any ground authorizing the intervention of a court of equity. Defendant, by his answer, admits the execution and delivery of the notes, and alleges a failure of consideration as a defense. A copy of said bond for a deed is annexed to and made a part of the answer, and the answer further alleges “that defendant went into possession of said land under said arrangement, and broke and cultivated thereon 80 acres, and improved said land to the amount of four hundred dollars; that all of said acts were done prior to the commencement of this action, and prior to March, 1892; that defendant has demanded of plaintiff a full and faithful performance of the conditions of said bond, and offered to do what he (defendant) was required to do by the terms thereof, but that plaintiff has neglected and refused to execute to defendant said warranty deed for said land; that prior to the commencement of this action, and prior to March 1, 1892, the said plaintiff conveyed and transferred said land, by quitclaim deed, to John A. Percival, and that thereafter, and prior to the commencement of this action, defendant, in order to protect himself, and save to himself the benefits of his improvements on said land, was obliged to purchase said land from John A. Percival; the consideration for said notes has wholly failed; that by reason of said transfer of land to said Percival, and by reason of the fact that since prior to March 1, 1892, plaintiff has not been able or willing to comply with the terms of said bond, and has made it impossible for him to comply therewith.” The case was tried before a jury, and at the close of the testimony the court directed a verdict for plaintiff, and a verdict was accordingly returned for plaintiff for the amount of both notes, with interest.

At the trial the following facts were made to appear: Plaintiff rested his case after putting the notes in evidence, and testifying that he owned the notes, and they had never been paid. The bond for a deed was also put in evidence. Defendant testified that in the year 1890 he entered upon the land under the contract and broke and backset 80 acres thereof, and raised a crop thereon in 1891. The plaintiff tendered a deed of warranty to the defendant some time after the breaking was done, in 1890, and offered to deliver the deed on condition that defendant should execute a crop mortgage on the crop to be grown in 1891 as security for the purchase-money notes. Defendant refused to do so, and plaintiff never delivered a deed to defendant, and never at any time tendered defendant a deed after both notes fell due. Defendant testified that he was at the time of the trial the owner of the land, and had purchased it, about one year prior to the trial, of one Percival. He was asked, “How much did you pay for the land?” Plaintiff, by his counsel, objected to this question on the ground that it was immaterial. The objection was sustained, and defendant excepted to the ruling. Defendant was asked: “Was there any other consideration for these notes, besides the land described in this bond for a deed? A. He says, ‘No.’ The consideration for the purchase of the land was six hundred and forty-four dollars, and a part of that was the two hundred and seventy-five dollars, and that he was to get a larger loan on the land, and through that indemnify himself.” On plaintiff's motion, this answer was stricken out as unresponsive, and as immaterial and irrelevant, and defendant excepted to the ruling. Plaintiff was sworn as a witness for the defendant, and testified, in effect, that he never tendered a deed of the land to the defendant at any time after both notes matured. Plaintiff was asked: “Then, afterwards, without tendering to him any deed, you sold the land to another person, did you? A. I simply quitclaimed my interest. Q. You quitclaimed your interest? A. Yes, sir. Q. You made a quitclaim deed? A. Yes, sir. Q. To whom? A. To John A. Percival.” Plaintiff's counsel, on cross-examination, asked the following question: “Did you receive any consideration for this quitclaim deed you say you gave to John A. Percival?” Defendant...