Suburban Homes Co. v. North
| Decision Date | 16 December 1914 |
| Docket Number | 3440. |
| Citation | 145 P. 2,50 Mont. 108 |
| Parties | SUBURBAN HOMES CO. v. NORTH ET AL. |
| Court | Montana Supreme Court |
Appeal from District Court, Yellowstone County; Geo. W. Pierson Judge.
Action by the Suburban Homes Company against Austin North and others. From a judgment for plaintiff, defendants North appeal. Affirmed.
O. F Goddard, of Billings, for appellants.
Johnston & Coleman, of Billings, for respondent.
On March 17, 1905, the plaintiff and the defendant Austin North entered into a contract under the terms of which the plaintiff agreed to sell to this defendant a number of blocks and lots situated in the city of Billings and Foster's addition thereto, in Yellowstone county. The consideration for the contract was the sum of $25,000, to be paid by North in installments as follows: $1,000 in cash upon the execution of the contract, $5,000 on March 17, 1907, a like sum on March 17, 1908, and the balance of $10,000 on March 17, 1909 with interest on any installment not paid when it should become due at the rate of 8 per cent. per annum, payable on March 17th of each year. The defendant was to pay all taxes and assessments, ordinary and extraordinary that might be subsequently levied and assessed against the property or any part of it. Upon default by defendant in the payment of any installment of the purchase price or interest thereon, or of any taxes or assessments upon the property, plaintiff might, at its option, declare the contract null and void and no longer binding upon it. In such case the property, together with all payments, should thereupon be and remain the property of the plaintiff, its successors and assigns, the defendant thereafter to have no right or interest therein or right of action to recover it or any installment of the purchase money theretofore paid. Time was expressly made of the essence of the contract. It was further agreed that in case the defendant defaulted in the performance of any of the stipulations of the contract, and the plaintiff elected to exercise its option to declare it null and void because of such default, such declaration should be made by written notice directed to the defendant and deposited in the post office at Billings. Upon the performance by the defendant of all the stipulations of the contract on his part, he became entitled to a conveyance with the usual covenants of warranty. Except the cash payment and the installment due on March 17, 1906, the defendant failed to pay any of the installments as they fell due, or at all. He did make payments of interest in amounts not exceeding $600 at any one time, down to April 23, 1912, when the last payment was made. On June 5, 1912, the plaintiff made written demand for payment of the balance then due, amounting to $25,983.33. In this demand the defendant was informed that, if he did not make payment on or before July 10, 1912, the plaintiff would treat the contract null and void and would bring an action to have it canceled. Defendant was further informed that the plaintiff would also ask for the cancellation of a deed executed to defendant by Yellowstone county to the streets and alleys contiguous and adjacent to the property covered by the contract. The defendant having failed to comply with this demand, the plaintiff on July 27th notified him by mail, through the post office at Billings, that it had elected to terminate the contract because of his failure to comply with its demand, and thereupon brought this action to have the contract and deed canceled. After reciting the foregoing facts, the complaint alleges that the taxes and assessments levied upon the property for the years 1910 and 1911 are due and unpaid; that if the contract between the plaintiff and defendant North be left outstanding, it may cause serious injury to plaintiff, in that it would appear as a cloud upon his title; and that the defendant Hattie North is the wife of defendant Austin North. The relief demanded is that the defendants be decreed to have no right or interest in the property, and that plaintiff's title thereto be decreed good and valid, that said defendants be enjoined from claiming any interest therein, that the contract between plaintiff and defendant Austin North be ordered delivered up for cancellation, and that the plaintiff recover its costs.
The answer does not controvert any of the material allegations in the complaint, except that it is denied that the plaintiff made written demand upon North for payment of the balance of the purchase price, or that it thereafter gave notice of its election to forfeit the contract. It does not allege facts upon which defendant seeks affirmative relief. It states as separate defenses the following: (1) That after the execution of the contract the defendant North paid to the plaintiff $10,870, but that plaintiff did not at any time prior to the bringing of the action offer to repay to the defendant this amount or any part of it; (2) that after defendant went into possession he expended large sums of money in installing a water supply, in grading the streets and alleys, and otherwise improving the property, but that plaintiff did not, before commencing the action, pay to the defendant the money so expended, or any portion thereof; (3) that after default by defendant in making payment, the plaintiff accepted various payments from him, applying the same upon the contract without objection, that by this conduct it had led the defendant to believe that it intended to extend the time of payment fixed in the contract, and that it thereby waived its right and estopped itself to declare forfeiture of the contract under the stipulation therein; and (4) that plaintiff at no time before commencing the action offered to restore to the defendant the benefits it had received under the contract.
The findings of fact and conclusions of law by the trial court were in favor of plaintiff, and a decree was entered awarding it the relief demanded. The defendants North have appealed from the decree and an order denying their motion for a new trial. A recital of the facts relating to the deed from Yellowstone county has been omitted from the foregoing statement, for the reason that no appearance was made at the trial by the defendant commissioners, and the propriety of the relief granted in this behalf is not brought in question in this court.
1. The first contention made is that the court erred in overruling defendants' objection to the introduction of evidence. It is said that, since the apparent purpose of the action is to enforce a rescission of the contract, it was incumbent upon plaintiff to allege that it had restored, or offered to restore, to the defendant Austin North everything of value received from him in part performance of the contract, viz., payments made by him. This contention is based upon a misconception of the scope and purpose of the action. Rescission requires the party seeking to rescind to restore, or offer to restore, to the other party everything of value received by the former under the contract, upon condition that the latter will do likewise. Rev. Codes, § 5063; Clark v. American Dev. & Min. Co., 28 Mont. 468, 72 P. 978; Cotter v. Butte & Ruby Valley S. Co., 31 Mont. 129, 77 P. 509. If he seeks the aid of a court of equity, he must aver that he has done this, or set forth excusatory facts. Such is not the purpose of this action. Plaintiff seeks to have the contract canceled as a menace to his title, having asserted his right under the express stipulation therein to declare it no longer binding upon him because of a breach of it by the defendant. While both actions are of equitable cognizance, they are wholly different in their scope and purpose, and the rules applicable to the one have no application to the other. Cook-Reynolds Co. v. Chipman, 47 Mont. 289, 133 P. 694; Fratt v. Daniels-Jones Co., 47 Mont. 487, 133 P. 700. In this sort of action the complaint need not contain any allegation on the subject of restoration.
2. The same may be said of the contention that the purpose of the action is to enforce a forfeiture, and therefore cannot be sustained. Plaintiff does not ask that the court declare a forfeiture of the amounts paid by the defendant, nor does the decree adjudge the rights of the parties in this behalf. It merely declares that the plaintiff is entitled to be restored to its rights as they existed prior to the execution of the contract, and that the instrument--the only evidence of any right in defendant--be delivered up for cancellation, so that it may not hereafter be a source of embarrassment to the plaintiff, as a standing menance to its title. It leaves the question whether the defendant is entitled to recover his payments, or any part of them, wholly unadjudicated. As was pointed out in Clifton v. Willson, 47 Mont. 305, 132 P. 424, one who has been guilty of a breach of his contract by stopping short of full performance, cannot ordinarily recover payments, or any part thereof, made prior to the breach; nor can he do so under any circumstances, unless, within the rule of the statute, upon full compensation to plaintiff (Rev. Codes, § 6039), he can allege and prove that the default was not the result of...
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