Stauth v. Brown

• Decision Date: 27 March 1987
• Docket Number: No. 58318,58318
• Citation: 734 P.2d 1063,241 Kan. 1
• Parties: A.M. STAUTH, Randy M. Stauth, J. Wes Berghouse, Dee Jacquart, and Rollie Jacquart, Appellees, v. William F. BROWN, Jr., and Amy E. Brown, husband and wife, and William C. Eckles and Cheryl A. Eckles, husband and wife, Appellants.
• Court: Kansas Supreme Court

Page 1063

734 P.2d 1063

241 Kan. 1

A.M. STAUTH, Randy M. Stauth, J. Wes Berghouse, Dee

Jacquart, and Rollie Jacquart, Appellees, v. William F. BROWN, Jr., and Amy E. Brown, husband and wife, and William C. Eckles and Cheryl A. Eckles, husband and wife, Appellants.

No. 58318.

Supreme Court of Kansas.

March 27, 1987.

Syllabus by the Court

1. A judgment of foreclosure is a final judgment for purposes of appeal if it determines the rights of the parties, the amounts to be paid, and the priority of claims.

2. The legal description of property in a real estate contract by reference to an unrecorded plat does not invalidate the contract or make it ambiguous.

3. The existence of fraud is ordinarily a question of fact and this court's review is limited to determining whether the trial court's finding is supported by substantial competent evidence.

4. Fraud is never presumed and must be proved by clear and convincing evidence.

5. The parol evidence rule excludes from evidence any oral testimony which would tend to add to, subtract from, or alter the terms of a clear and unambiguous contract.

6. The language in a contract is ambiguous when the words used to express the meaning and intention of the parties are insufficient in the sense that the contract may be understood to reach two or more possible meanings.

7. Where it is clear that one party to a contract is going to be unable to perform, the other party need not wait for the date when performance is due to treat the contract at an end and pursue his remedies.

8. If an injured party wishes to treat a renunciation or repudiation of a contract as an anticipatory breach, he must either (1) bring an immediate suit for damages; or (2) treat the contract as still binding and bring an action only after time for performance by the promisor has passed; or (3) rescind the contract and sue for money paid or the value of services or property furnished.

9. Where the remedy at law is inadequate, a court of equity may compel a party to a contract to do that which ought to be done and which was contemplated at the time the agreement was entered into.

Max Eugene Estes, of Williams, Larson, Strobel, Estes & Malone, P.A., Dodge City, argued the cause and Terry J. Malone and Ronald C. Mason, of the same firm, were with him on the brief for appellants.

David H. Snapp, of Minner & Waite, Dodge City, argued the cause and Harry A. Waite, of the same firm, was with him on the brief for appellees.

HERD, Justice:

This is a breach of contract/mortgage foreclosure case. The district court granted judgment in favor of the plaintiffs and the defendants appealed. The Court of Appeals dismissed the appeal as interlocutory, 722 P.2d 593, and we granted review. The facts are:

On January 3, 1977, the appellees ("Sellers") contracted to sell certain real estate located in Ford County to the appellants ("Buyers") for $60,600. The property subject to the contract was identified by a preliminary plat and was described in the contract as "[l]ots 1, 2 and 3, Block 11; Rollie Dee Hills Addition, except all minerals will be reserved." The Buyers paid $5,000 down and $10,000 upon approval of title with the balance of $45,600 to be paid in annual installments of $3,000 and payments to continue "until streets and utilities are available and installed to the lots or until the total amount is paid," some fifteen years hence. The contract further provided:

"The total unpaid balance shall be payable when streets and utilities are available and installed to the lots; provided however, in no event shall the entire balance be payable before December 1, 1978. The streets and utilities shall be installed prior to the expiration of this contract." (The entire contract is set out later in our discussion of the issues.)

The Buyers hired attorney Harry Waite to examine the abstracts covering the subject property. Mr. Waite's opinion, dated February 15, 1977, included the following statement:

"Although the plat showing the subdivision of a part of the quarter section into lots and blocks has not been recorded in the office of the Register of Deeds, such plat is fully prepared and is going through the process of approval by the city before it is filed in the office of the Register of Deeds. The fact such plat is not yet recorded is of no real significance at this time."

No final plat was ever approved or recorded in the register of deeds office.

The Buyers made annual payments until February 20, 1984, at which time they stated they wanted to pay off the contract and requested information from the Sellers as to (1) when the final plat would be recorded; (2) when the streets and utilities would be installed; and (3) when commercial zoning would be verified. In a letter dated March 7, 1984, the Sellers responded that the items mentioned by the Buyers "were all met" at the time the papers were placed in escrow. The Sellers further advised the Buyers that if they wished to pay the contract in full, they need only take the money to the bank and pick up the deed. The Buyers ceased making payments upon the contract after receiving the Sellers' response.

The Sellers brought the present action on November 29, 1984, seeking judgment for the unpaid indebtedness, plus interest, costs, and taxes. The Sellers further requested the court to foreclose the real estate contract as a first mortgage lien and enter an order directing a sheriff's sale of the property. The Buyers answered, raising numerous equitable defenses, and counterclaimed.

The district court ruled in favor of the Sellers on May 24, 1985, ordering judgment in the amount of the unpaid contract balance ($27,600) plus interest. The court further held the Sellers were "entitled to a decree foreclosing the contract as a first and prior mortgage."

The Buyers filed a notice of appeal with the district court on June 19, 1985.

In an unpublished per curiam opinion dated May 29, 1986, the Court of Appeals dismissed this case for lack of jurisdiction. The court held that because the order of sale and order confirming sale were never filed, there was not a final judgment upon which an appeal could be based. The court further directed the trial court to make "explicit findings as to the legal description of the real estate to be foreclosed." We granted review.

The first issue presented for review is whether an order of judgment in a mortgage foreclosure action is a final judgment which may be appealed.

The Buyers argue that an order of judgment in a mortgage foreclosure action is a final judgment which may be appealed from because the rights of the parties have been settled and nothing remains to be done but to have the sale and pay out the proceeds.

In support of this argument, the Buyers cite Ex Parte Norton, 108 U.S. 237, 2 S.Ct. 490, 27 L.Ed. 709 (1883). There, the United States Supreme Court held that in foreclosure proceedings a decree is final for purposes of an appeal which settles every question in dispute between the parties and leaves nothing to be done but to complete the sale under the proceedings for foreclosure and hand over the surplus as the decree directs.

Although this court has not directly ruled upon the issue presented here, the case of Miller v. Rath, 173 Kan. 192, 244 P.2d 1213 (1952), is relevant. In Miller, this court held that a decision by the trial court finding the lien of a judgment creditor superior to the lien of the plaintiff was not a final judgment. The court reasoned there was no final judgment because "[t]here was no determination of amounts due any litigant, or of the priority of claims of any other defendant in the action." 173 Kan. at 194. This holding implies that a final judgment in a foreclosure action consists of a determination as to the amounts due litigants and the priority of claims. These determinations were made and included in the journal entry of judgment in the present case. Judgment was entered against the Buyers in the amount of $27,600 plus interest. The unfinished task was that of collecting the judgment. The rights of the parties were determined.

The Court of Appeals determination that there was no final order in this case is in conflict with the decisions of courts of other jurisdictions and with the views expressed by various commentators.

For instance, in Shuput v. Lauer, 109 Wis.2d 164, 325 N.W.2d 321 (1982), the Supreme Court of Wisconsin held that a judgment of foreclosure and sale is a final judgment appealable as of right which must be appealed within the time prescribed by statute. Thus, the court ruled that where the mortgagors failed to appeal from a judgment of foreclosure and sale and did not contest the later order of confirmation, the mortgagor could not challenge the judgment of foreclosure and sale in the appeal from the order confirming the foreclosure sale. The court noted at pages 173-74:

"Our holding in this case is also in accord with the views expressed by the commentators and with the decisions of courts in other jurisdictions. There is general agreement that the judgment of foreclosure and sale is a final decree; that the proceedings subsequent thereto relating to the sale are analogous to the execution of a judgment and simply enforce the parties' rights which have been adjudicated; that a party who wishes to contest the judgment of foreclosure and sale must appeal from that judgment; that the judgment of foreclosure and sale cannot be challenged on appeal from an order confirming the sale; and that on an appeal from an order confirming the sale an aggrieved person may challenge the regularity of the proceedings subsequent to the judgment of foreclosure and sale."

Further, in MDG Supply v. Diversified Inv., 51 Hawaii 375, 463 P.2d 525 (1969), cert denied 400 U.S. 868, 91 S.Ct. 99, 27 L.Ed.2d 108 (1970), the Supreme Court of Hawaii held that a judgment of foreclosure of mortgage or other lien is final although it contains a direction to make a report of sale and to...