True v. Northern Pac. Ry. Co.

• Decision Date: 12 June 1914
• Docket Number: Nos. 18,618-(138).,s. 18,618-(138).
• Parties: JAMES N. TRUE v. NORTHERN PACIFIC RAILWAY COMPANY.<SMALL><SUP>1</SUP></SMALL>
• Court: Minnesota Supreme Court

Page 72

126 Minn. 72

JAMES N. TRUE v. NORTHERN PACIFIC RAILWAY COMPANY.¹

Nos. 18,618-(138).

Supreme Court of Minnesota.

June 12, 1914.

Action in the district court for St. Louis county to recover $2,090.59. The answer enumerated the contracts between the parties; alleged that plaintiff made default in the payments thereunder; that defendant exercised the option given to it to declare each of the contracts void and in the years 1903 and 1905 notified the plaintiff of such cancelation; that the contracts were executed and delivered in the state of Washington and provided they should be performed in that state; and set up the Minnesota statute of limitations as a defense. The reply, among other matters, alleged that after the first payment by plaintiff, he discovered defendant did not have an unincumbered title to the lands as represented, but the lands were embraced in and part of a huge mortgage securing millions of dollars of indebtedness; denied that the contracts were Washington contracts and alleged they were Minnesota contracts and governed solely by the laws of Minnesota.

The case was tried before Fesler, J., who made findings and ordered judgment in favor of defendant. From the judgment entered pursuant to the order for judgment, plaintiff appealed. Affirmed.

James N. True, pro se.

C. W. Bunn and Emerson Hadley, for respondent.

HALLAM, J.

In 1902 defendant sold to plaintiff a number of tracts of land in the state of Washington. Separate contracts were given, each conveying a separate tract. In each case one-sixth of the purchase price was paid down and a contract given, providing for payment of the balance in five annual instalments. A second payment was made in 1903 on one contract. Aside from this, no payment, except the initial payment, was ever made. After default, defendant undertook to cancel each of these contracts, and thereafter sold the land to other purchasers. After many years, in May, 1911, plaintiff made offer of performance, which was refused on the ground that the contracts had been forfeited and canceled. Plaintiff contends that the cancelation of these contracts was unlawful and that the contracts remain in force, that defendant has refused to perform the contracts on its part and that, by reason of its sale of the lands to other parties, defendant has disabled itself from performing, and he accordingly sues to recover the money he paid defendant. The trial court found for defendant and plaintiff appeals.

1. Time was of the essence of the contracts. The contracts each provided that, in case of default in payment of an instalment when due, the contract should, at the option of defendant, be null and void and all payments made thereon should be and remain the property of defendant. This provision was valid and binding on the parties. Reddish v. Smith, 10 Wash. 178, 38 Pac. 1003, 45 Am. St. 781; Sleeper v. Bragdon, 45 Wash. 562, 88 Pac. 1036; Grant v. Munch, 54 Minn. 111, 55 N. W. 902. It follows that, if the contracts were lawfully canceled for plaintiff's default, then plaintiff has no right to recover the payments made.

2. We are of the opinion that the contracts were lawfully canceled.

There is no statute of Washington regulating the cancelation of land contracts. Under the laws of that state, where time is made of the essence of a land contract, the vendor may declare a forfeiture of the contract for nonpayment of any instalment of the purchase price when due. Sleeper v. Bragdon, 45 Wash. 562, 88 Pac. 1036; Douglas v. Hanbury, 56 Wash. 63, 104 Pac. 1110, 134 Am. St. 1096. This is what defendant undertook to do. The notices of cancelation were served in the manner provided by the contracts. Each contract provided that it might be terminated for any breach thereof by notice of cancelation addressed to plaintiff "directed to the post office named below, and deposited in a United States post office, which shall constitute a good and sufficient notice and service thereof." The "post office named below" was Spokane, Washington. After the default of payment on the part of plaintiff, the defendant gave notice of cancelation as here required. Defendant did in fact do more than this, for, when notices directed to plaintiff at Spokane were returned uncalled for, it sent additional notices to other addresses, where it was believed plaintiff could be found, and these were never returned. In the absence of a statute prescribing a different method of service, the method provided by the contract is sufficient. Plaintiff saw fit to stipulate in his contracts that the mailing of a notice of cancelation directed to him at Spokane, Washington, should be sufficient service of such notice, and this provision of his contracts is binding upon him. Kerns v. McKean, 65 Cal. 411, 416, 4 Pac. 404; Schwab v. Baremore, 95 Minn. 295, 104 N. W. 10. The notice of termination of these contracts was sufficient under the laws of Washington.

3. The mode of service of the notices of cancelation was not sufficient to terminate a land contract under the statutes of Minnesota (Laws 1897, p. 431, c. 223, G. S. 1913, § 8081). Plaintiff contends that these contracts were Minnesota contracts, and that they could be canceled only by compliance with the Minnesota laws. The land was located in the state of Washington. Notwithstanding this fact, the contracts might be Minnesota contracts, and, if so, they could be canceled only by compliance with the laws of Minnesota. Finnes v. Selover, Bates & Co. 102 Minn. 334, 113 N. W. 883.

4. We are of the opinion, however, that the contracts were Washington contracts. As stated, the land was located in that state. The negotiations were all had in that state. The contracts were delivered in that state, and they provided for payments to be made at the office of defendant's assistant land commissioner, which office was at Tacoma in that state. Beyond question these facts made the contracts Washington contracts, to be governed by the laws of that state as to their manner of performance, termination and discharge.

5. The applications made by plaintiff for the purchase of these lands contain the language: All applications are "received subject to acceptance by the western land agent" (at Tacoma) "and approval of the land commissioner." The office of the land commissioner was at St. Paul. It is contended that this provision for approval by the land commissioner made the contract a Minnesota...