Tompkins v. Sandeen

• Decision Date: 03 December 1954
• Docket Number: No. 36349,36349
• Citation: 243 Minn. 256,67 N.W.2d 405,49 A.L.R.2d 1162
• Parties: , 49 A.L.R.2d 1162 Lucy TOMPKINS, Respondent, v. Elmer B. SANDEEN and Vira Sandeen, Appellants.
• Court: Minnesota Supreme Court

Page 405

67 N.W.2d 405

243 Minn. 256, 49 A.L.R.2d 1162

Lucy TOMPKINS, Respondent, v.Elmer B. SANDEEN and Vira Sandeen, Appellants.

No. 36349.

Supreme Court of Minnesota.

Dec. 3, 1954.

Syllabus by the Court.

1.An appeal will not lie from an order denying a motion for amended findings.

2.Where an action for specific performance of an oral contract to convey land fails because the contract is too indefinite, the court may retain the cause to grant equitable relief.The rules to be applied in adjusting the rights of the parties in such instances are the same as those applied where the purchaser seeks to recover for improvements made in reliance upon an unenforceable contract.Recovery is permitted on the principle that the defaulting vendor ought not to be unjustly enriched and the parties are to be restored to the Status quo.Held that the purchaser in the instant case is entitled to recover for the enhanced value of the land attributable to her contributions measured as of the time possession is surrendered, and the vendor is entitled to set off against this sum the reasonable value of the use and occupation of the premises without the purchaser's improvements from the inception of the purchaser's occupancy.

3. M.S.A. § 504.06, requiring a tenant from month to month to give 30-day notice of intention to quit, has no application to a purchaser in possession under an unenforceable contract to convey land even though the vendor has disaffirmed.

Remanded with directions.

Lauerman, Johnson & Gustafson, Olivia, for appellants.

H. R. Pfeiffer, Olivia, Russell L. Frazee, Bird Island, for respondent.

DELL, Chief Justice.

This is an appeal from an order denying defendants' alternative motion for amended findings or a new trial.

Plaintiff commenced this action against the defendants for specific performance of an oral contract to convey real estate to her upon which a dwelling had been erected.Defendants answered denying the existence of the contract alleged and counterclaimed for the sum of $251.55, which it is claimed plaintiff was owing as the remainder due as rent for the premises.Thereafter defendants moved for judgment on the pleadings or in the alternative for summary judgment in their favor.Both motions were denied, the court holding that, while the complaint did not state a cause of action for specific performance because the alleged contract was too indefinite, nevertheless, the facts pleaded, if proved, justified equitable relief.

The court found, among other things, that in the spring of 1950the plaintiff, being required to vacate certain premises in Hector, Minnesota, rented by her for the operation of a beauty parlor, was advised by the defendants, her sister and brother-in-law, that she ought to have a place of her own.They offered to let her have a part of their real estate adjoining their home for the purpose of erecting a building to be used by her as a beauty parlor and for living quarters.This offer was made so that plaintiff and defendants could live next door to each other.The defendantElmer B. Sandeen, hereinafter referred to as the defendant, drew the plans for the building and they were approved by the plaintiff.He offered to do the work in constructing the building, and it was agreed that the plaintiff should furnish what money she had for use in its construction.Defendant was to advance the remainder.The agreement did not provide when the money advanced by the defendant should be repaid by the plaintiff.In reliance upon this agreement plaintiff delivered to the defendant a number of checks drawn on the Security State Bank of Hector in blank, and by means of these checks, he paid out $810.91 for labor and materials for the building.In its construction defendant used some materials obtained from the beauty shop previously occupied by the plaintiff in Hector and some furnished by her from other sources, all of the reasonable value of $255.75.Plaintiff also performed labor and services in connection with the construction of the building of the reasonable value of $180, the total contribution by the plaintiff toward the construction of the building being $1,246.66.The plaintiff moved into the building on July 5, 1950, and occupied it continuously until July 8, 1953.Sometime in April 1952, defendant made a demand upon plaintiff for rent of the premises whereupon plaintiff demanded a statement from him as to the amount of advances he had made.Defendant denied the agreement made, failed to furnish such statement, and refused to transfer and convey the building to the plaintiff.

Upon these findings the court held that the agreement was not sufficiently definite to permit a decree of specific performance, but that the plaintiff should have a specific lien upon the real estate involved for the amount of her claim together with interest thereon less rent chargeable to her for the use of said premises from May 1, 1952, to July 8, 1953, at the rate of $45 per month.Judgment was thereupon ordered in favor of the plaintiff and against the defendant for the sum of $807.01.

1.Plaintiff points out, and rightfully so, that an appeal will not lie from an order denying a motion for amended findings.¹Consequently that portion of the appeal requires no discussion.

2.It is defendant's primary contention that rent should be chargeable to the plaintiff from the inception of her occupancy in July 1950 rather than from the date of disaffirmance of the contract by

the defendant in April of 1952, as held by the trial court.If the action at the time of trial was essentially one for a rescission of the contract, defendant's position is well taken.Since there was a material breach of the contract by the defendant, the plaintiff was entitled to rescind if she so desired.²Although the vendor and purchaser under a contract to sell do not occupy, at least for rental purposes, the relationship of landlord and tenant, ³ it is well established that in an action to rescind the purchaser is obligated to return the benefits received under the contract.This has repeatedly been held to include the reasonable value of the use and occupancy of the premises offset by the value of any improvements the purchaser may have made.⁴

However, as aptly pointed out by the plaintiff, this was not an action for rescission but rather for specific performance in affirmance of the contract.Plaintiff contends that, since there is no landlord-tenant relationship under a contract to purchase, it follows that the vendor, after unjustifiably refusing to perform, cannot recover rent based on the purchaser's possession of the premises prior to the date of disaffirmance.⁵More specifically, analogy is drawn by the plaintiff to the situation where the vendor refuses performance on the ground that the contract cannot be enforced against him because it fails to comply with the statute of frauds.It is generally held that in such a situation the purchaser is not liable in a suit by the vendor for the use and occupation of the premises prior to the vendor's disaffirmance.⁶

The arguments are not inconsistent.On one hand the purchaser brings an action to rescind the contract and the parties are restored to the Status quo.On the other hand the defaulting vendor brings the action to recover rent based upon a nonexistent landlord-tenant relationship.Neither type of action is involved here.It is apparent from the record that at the time of trial the court and the parties treated plaintiff's cause of action as one for recovery of a money judgment for contributions made by the plaintiff toward improvements on the defendants' land, together with interest, and for the imposition of an equitable lien on the property involved for this amount.Having determined that specific performance of the agreement could not be compelled because of its indefiniteness, the court was right in adopting and taking this action.⁷Consequently we conclude that the rules to be applied in this case must necessarily be the same as control situations where the purchaser, unable to compel specific performance because the contract is within the statute of frauds or too indefinite in its terms, seeks to recover for the improvements made in reliance upon the contract.There is no doubt that the purchaser can have such a recovery, ⁸ which should properly be measured by the enhanced value of the land at the time possession is surrendered and not by the cost of the improvements.⁹

However, in this type of action this court, as well as others, has allowed the vendor to set off the reasonable value of the use and occupation of the premises by the purchaser against the value of improvements.¹⁰The theory permitting the purchaser to recover for improvements does not rest on the contract but rather on the principle that the defaulting vendor ought not to be unjustly enriched.¹¹In Schultz v. Thompson, 156 Minn. 357, 360, 194 N.W. 884, 885, this court said:

'* * * We need not stop to inquire whether the contract, unenforceable because not in writing, is sufficiently definite and certain to be specifically enforced if it had been in writing.The right of the vendee to recover for improvements made in good faith in reliance on an oral contract which fails through no fault of his, does not rest on the contract or any right to enforce it, but rests on the ground that the vendor, through whose fault the contract failed, ought not to obtain the enhanced value given to his property by the money and labor of the vendee without making compensation therefor.'

While some courts do not specifically characterize the action as one for 'unjust enrichment' or 'quasi contract' as this court has done, it is clear that the basis of most of the decisions rests on the same principle.¹²It is well settled that under the unjust enrichment theory the parties are to be restored to the Status quo as far as practicable, which necessarily involves the return of any...