Christensen v. Christensen

605 P.2d 80, 100 Idaho 733, 1979 Ida. LEXIS 530
CourtIdaho Supreme Court
DecidedDecember 20, 1979
DocketNo. 12849
StatusPublished
Cited by2 cases

This text of 605 P.2d 80 (Christensen v. Christensen) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Christensen v. Christensen, 605 P.2d 80, 100 Idaho 733, 1979 Ida. LEXIS 530 (Idaho 1979).

Opinion

BAKES, Justice.

This appeal involves an action by Albert and Martha Christensen (sellers) against their son, David Christensen (buyer), arising from the sale of the senior Christensens’ farm in Arimo, Idaho, to their son David. Appellant David Christensen brings this appeal from a district court judgment granting respondents money damages and ordering a judicial sale of the property. We affirm in part, reverse in part, and remand to the district court for further proceedings.

In July of 1967 Albert and Martha sold the farm to their son David, using a typical real estate contract.1 Under the terms of the contract the purchase price of $60,000 was payable in monthly installments at 5% interest. David was to pay the property taxes and insurance premiums. The contract provided for the forfeiture of David’s interest in the event he breached the covenants and provided for an award of attorney fees and court costs in the event judicial action was necessary “for the enforcement of this contract for the repossession of said premises.”

Pursuant to the terms of the contract an escrow account was established at the First Security Bank of Idaho in Preston, Idaho, in which the contract and deeds were deposited and to which the installment payments were to be made. Also placed in escrow pursuant to the contract provisions was a state land lease granted Albert in 1963 and an assignment of that lease from Albert to David.

In 1969 David, with Albert’s consent, sold 135 acres of the farm for $26,000. Part of the sale proceeds were used to satisfy a mortgage securing a loan Albert had previously obtained from the Federal Land Bank in Preston. Although the proceeds from the Federal Land Bank loan were used by David in his dairy operation, Albert had actually obtained the loan because David lacked the necessary credit standing. David, however, was to repay the loan. Some of the remaining funds received from sale of the 135 acres were used by David to purchase a truck and also to make a $6,000 payment to the escrow account on the contract.

[735]*735In July of 1975 David and Albert borrowed $17,794.84 from Associates Financial Services, secured by a mortgage on the farm. The proceeds of this loan were used to satisfy some of David’s obligations to another finance company, to purchase a mobile home for Martha and Albert to live in and to purchase a combine. The first annual payment on the loan from Associates came due on December 1, 1975. After David failed to pay it, Albert made the payment of $4,247.32 with money he borrowed from his daughter.

After his payment of $6,000 in 1969, David made only two other payments to the escrow account: $85 in October of 1970 and $2,000 in 1973, both of which were applied entirely to interest. David failed to pay the property taxes for 1974, 1975 and 1976 and allowed the insurance policy covering the property to lapse. Also, the state land lease expired in 1972 while in escrow, and David obtained a new lease in his own name.

During the 1975 and 1976 seasons Albert, using David’s farm equipment over David’s objections, farmed the land. Albert did not pay David any share of the farm’s earnings for 1975 and 1976, nor did he pay David for use of David’s equipment. Albert believed David had committed waste on the farm by failing to maintain the fences, irrigation ditches, and the farmhouse and by permitting rye grass to spread. At the subsequent trial, Albert testified that it would cost approximately $15,000 to rehabilitate the land and $3,000 to repair the farmhouse.

On April 7, 1976, Albert notified First Security Bank that David was in default on his payments and sought withdrawal of the escrow documents. The following day the bank notified David by letter of Albert’s desire to withdraw the escrow documents and advised David that, pursuant to the escrow agreement, he had sixty days to cure his default. David did not cure the default, and his attorney notified the bank that a lawsuit would be necessary “to straighten out the adverse claims involved.”

On July 15,1976, Albert and Martha filed suit against David, alleging in their first count that David had failed to make payments in accordance with the terms of the contract and had failed to pay the taxes and maintain a proper insurance policy on the property. They sought the return of the escrow documents, a money judgment for the balance due on the contract, attorney fees and a judicial sale of the property. In their second count, they sought return of the state land lease which was in escrow. In the third count, they alleged that David had purchased a mobile home with proceeds from the Associates loan acquired by Albert and sought an equitable lien on the title of the mobile home. In their fourth count, the plaintiffs sought damages for waste and destruction to the real property and asked that Albert be appointed conservator of the property during litigation.2 In October of 1976, Albert paid off the balance of the loan with Associates, $16,798.40, with sums he had borrowed from his daughter and had the mortgage assigned to himself.

David answered the complaint and generally denied the plaintiffs’ allegations. As an affirmative defense, he claimed a setoff for the rental value of Albert’s use of his property. At trial David testified that the rental value of the farm equipment used by Albert in the 1975 and 1976 seasons was $18,435.

Following a court trial the district court entered a memorandum decision on August 19,1977, proposing to the parties an equitable alternative to the judicial sale sought by the plaintiffs. The court determined that it would be fair and equitable to order a forfeiture of the contract provided that David convey to the plaintiffs the mobile home, that the plaintiffs release David from all claims including the loan from Associates, and that the plaintiffs purchase from David the various items of farm equipment. The parties rejected the proposal, and on September 23, 1977, the district court entered the following judgment in favor of the plaintiffs: (1) $55,657.67 plus interest as the amount due on the contract; (2) $4,247.32 plus interest for the payment made by the [736]*736plaintiffs on the Associates loan; (3) $16,-798.40 plus interest for the payoff of the Associates loan and the assignment of the mortgage; (4) $93.00 plus interest for water assessments paid by the plaintiffs; and (5) $277.50 for property taxes paid by the plaintiffs.

Referring to the 1969 sale of the 135 acres, the court awarded the plaintiffs $7,000 because that sum “went directly to the defendant for his use and benefit and since the subject matter of the contract has been depleted by 135 acres . . The district court further awarded the plaintiffs $150 for the cost of a title search and $10,000 in attorney fees. The court concluded that David’s claim for the 1975 and 1976 rental value of his equipment used by Albert was offset by the plaintiffs’ claim for waste and therefore allowed David nothing for the rentals and the plaintiffs nothing for waste. The court ordered that the equipment which David purchased at the time he entered into the contract and other items of equipment purchased in the interim be returned to him and that he be awarded the combine and mobile home. The court further ordered that any land leases previously transferred by the plaintiffs to David be transferred from David to the plaintiffs.

The court concluded that the plaintiffs were-entitled to a money judgment for a total of $108,934.05, and ordered a judicial sale of the premises.

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Bluebook (online)
605 P.2d 80, 100 Idaho 733, 1979 Ida. LEXIS 530, Counsel Stack Legal Research, https://law.counselstack.com/opinion/christensen-v-christensen-idaho-1979.