Silfvast v. Asplund

• Decision Date: 22 March 1933
• Docket Number: 7005.
• Citation: 20 P.2d 631,93 Mont. 584
• Parties: SILFVAST v. ASPLUND et al.
• Court: Montana Supreme Court

20 P.2d 631

93 Mont. 584

SILFVAST v. ASPLUND et al.

No. 7005.

Supreme Court of Montana

March 22, 1933

Rehearing Denied April 10, 1933.

Appeal from District Court, Jefferson County; Lyman H. Bennett Judge.

Action to quiet title by Aino Silfvast against the Unique Dairy Company, Ester Asplund, O. W. Asplund, and others. From a judgment quieting title in plaintiff against defendants second and last named, Ester Asplund and John Sundberg, as administrator of the estate of O. W. Asplund, deceased, who had died in the meantime, appeal.

Reversed as to appealing defendants, and remanded, with directions.

M. H Parker, of Boulder, and H. L. Maury and A. G. Shone, both of Butte, for appellants.

H. A Tyvand and W. D. Kyle, both of Butte, for respondent.

MATTHEWS Justice.

Appeal by Ester Asplund and John Sundberg, as administrator of the estate of O. W. Asplund, deceased, from a judgment quieting title in the plaintiff, Aino Silfvast, to certain land in Jefferson county, which judgment was entered against O. W. Asplund and Ester Asplund during the lifetime of the former.

On May 31, 1928, Mrs. Aino Lundgren, now Silfvast, desired to dispose of a dairy farm, formerly operated by her husband, Armas Lundgren, then deceased. O. W. Asplund and his wife Ester were seeking such a place; the parties were brought together and a contract for the sale and purchase of the land, equipment, live stock, and milk route in the city of Butte, near which the land was situated, although in Jefferson county, was entered into. The purchase price fixed was $20,000; a down payment of $3,500 was made, and the purchasers were given immediate possession. The contract provided that the balance of the purchase price should be paid in monthly payments of $200, with accrued interest on the unpaid balance up to July 15, 1930, after which the payment on principal should be $300 per month, but further provided that, if possible, the plaintiff should secure a $5,000 loan from the Federal Loan Bank, which amount would then be credited on the purchase price, and the purchasers would assume the loan and obligation thereof. The application for the loan had already been made.

The contract provides that the purchasers shall have immediate possession of both real and personal property and use the same, "but the title *** shall be and remain in" the vendor until the full purchase price is paid. The contract bound the vendor to execute "a good and sufficient grant deed" and a bill of sale, and place the instruments in escrow in a Butte bank, to be delivered on completion of the payments, with an abstract of title showing that the vendor "has clear title to the same on the date of the delivery of said deed and bill of sale, subject to *** right of way of the Montana Power Company." The contract recites: "Time is hereby expressly agreed to be of the essence of this agreement."

The deed and bill of sale were executed and placed in escrow. The application for the loan was evidently rejected. The purchasers made all payments up to and including November 15, 1929, and early in that year they made application to the Federal Farm Loan Bank for a loan on the property of $8,000, which application was approved for $6,000, subject to approval of the title. The title was thereafter declared "unsatisfactory," for the reason that, in the estate of Armas Lundgren, this plaintiff, as administratrix, caused a sale of the premises to be had for the purpose of paying the debts of the estate, and thereupon purchased the premises from the purchaser at the sale, on the day following the sale; this was declared to be an indirect purchase by the administratrix contrary to law. It was further objected that the records showed that a mortgage had been foreclosed on a portion of the property against the Unique Dairy Company, a corporation of which plaintiff was secretary, and, on foreclosure sale, the mortgagee bid in the property and, before sheriff's deed was issued to it, conveyed the premises to this plaintiff; this, it was objected, might be held to constitute a redemption rather than a purchase. The application was therefore rejected.

The challenge to the title seems to have been accepted by the vendor as sufficient excuse for failure to make payments under the contract from November 15, 1929, to June, 1930, for no intimation was given that plaintiff vendor considered the purchasers in default; but, recognizing the validity of the contract, in May, 1930, plaintiff instituted this action against the Unique Dairy Company and all "unknown" persons claiming, or who might claim, some interest in the premises, and in the complaint alleged that the plaintiff is "in possession, through Oscar W. Asplund and Ester Asplund, vendees, under an escrow agreement" of the property described. Counsel for plaintiff earnestly assure us that the action was instituted, not against, but for the benefit of, these defendants.

The Unique Dairy Company defaulted, but the patentees of a portion of the land filed answer alleging that they are the owners of all ores or minerals beneath the surface of the land, but have granted to the plaintiff an option to purchase their rights at any time before July 17, 1932. This action was commenced May 15, 1930; the option to purchase the mineral rights was not secured until the July following.

Although, on the institution of the action, plaintiff was not insisting on the payment of installments past due, on June 25, 1930, she served formal notice on the vendees of their delinquency and demanded payment of the full amount then due, within fifteen days, under penalty, upon failure so to do, of having the entire balance due under the contract declared immediately payable, and, if not paid, declared that plaintiff would repossess the property, recall the papers in escrow, and cancel the contract. On July 14, 1930, plaintiff served upon defendants notice that unless the entire balance of $13,100 was paid within fifteen days, all their rights would be declared forfeited, and plaintiff would exercise her right under the contract to retake the property, and demand the return of the deed and bill of sale from the bank.

On receipt of this notice, the time for answer in the action to quiet title being about to expire, the vendees, these defendants, filed an answer and cross-complaint, setting up the contract and alleging its breach by plaintiff in failing at the outset to deposit in escrow a deed conveying marketable title to the premises; alleging the Blake-Page ownership of the mineral rights in the premises; and that, by reason of the manner in which the title was conveyed from the Lundgren estate, the father and mother of Lundgren own a half interest in the land described.

It is further alleged in the cross-complaint that plaintiff has never furnished defendants or the bank an abstract showing good title in her, and that such abstract cannot be furnished at any time; that, at the time the parties contracted, plaintiff and her attorney assured defendants that the title was good, and, having confidence in the attorney, defendants believed the representation to their damage; and that all payments made were made under a mistake as to the facts. Defendants demand judgment of rescission and return to them of all payments made, with certain damages. By reply the plaintiff denies the affirmative allegations of the answer.

On a trial to the court the foregoing facts were brought out, and it was further shown that the Mountain States Telephone & Telegraph Company had a right of way for a pole line across the premises, without any showing as to whether or not such a line had ever been constructed.

On the showing made the court found that the contract was entered into as alleged, and required the plaintiff to convey "good and perfect" title, but only when the terms of the contract were fully complied with; that plaintiff had performed her part of the contract, but that defendants defaulted by failing to make any payments after November 15, 1929; and that plaintiff gave them the opportunity to be relieved from their default by subsequent payment, but that they refused the offer. The court further found that the action was commenced for the benefit of defendants to enable them to secure a loan and not in disaffirmance of their rights under the contract; that no fraud or deceit was practiced upon them; that they discontinued the milk route but remained in possession of all of the property covered by the contract.

The court declared that certain parties known to the plaintiff should have been made defendants specifically, including the telephone company, the Montana Power Company, and "possibly" the mother and father of Armas Lundgren, deceased.

On these findings the court quieted title as to all persons except Blake and Page, and the known persons above named, and specifically as to these defendants, declaring that, as against them, the plaintiff is entitled to the immediate possession of all of the property described in the contract. The judgment and decree followed.

Counsel for the defendants contend that the court erred in rendering its decree in favor of the plaintiff, as defendants were justified in suspending payments because plaintiff breached the contract at its inception by then failing to deposit in escrow a deed conveying marketable title. This theory is based upon the wording of the contract providing that the title "shall be and remain" in the vendor until the payments shall have been made, and that "time *** is *** of the essence of this agreement."

We cannot agree with this interpretation of the agreement; it is but the usual contract of purchase and for sale of real estate. The first-quoted clause merely evidences the intention of the parties that title...