Langley v. Stondall Land & Investment Co.

264 F. 474, 1920 U.S. App. LEXIS 1275

• Court: Court of Appeals for the Eighth Circuit
• Decided: February 17, 1920
• Docket: No. 5402
• Status: Published

Opinion

PER CURIAM.

[1] The extended litigation between these parties demands as complete determination as the facts and law will permit. The contents of the pleadings, which include general prayers for relief, afford full opportunity for the exercise of equitable powers. Under the admitted facts John Johnstone is the only defendant appellant having a real interest involved, so his rights and those of the appellee will be examined. Johnstone claims through two general sources — his continued adverse possession, and his acquired rights from Schmidt. The Schmidt Case involved the same defenses and contentions, so far as based upon Johnstone’s possession, as are here urged. A court of competent jurisdiction denied all of those defenses and contentions, and that decision was affirmed by'the highest appellate court of the state. If the result so determined was, in Johnstone’s opinion, unjust, he had the right to have such reviewed by the Supreme Court of the United States, tie brought his writ of error for that purpose. Pie later signified his intention to accept the result reached in the state courts, by abandoning the writ and permitting it to be dismissed by the Supreme Court. This was done after the present suit had been filed, and he had been made party thereto. To permit him again, in this action, to attempt to have those same contentions re-examined, would be to tolerate a trifling with the courts, and an extension of litigation already finally determined, which we will not countenance. All claims based upon his possession and his contract of 1906 with the Golden Valley hand & Cattle Company we regard as finally settled against him.

[2, 3] His acquirement of the Schmidt rights was complete. He stands in the shoes of Schmidt, entitled to the rights, and subject to the burdens and liabilities, of that position. A determination of those rights, burdens, and liabilities is to be found in the contract of sale by appellee to Schmidt, in the so-called option contract, given by Schmidt to appellee, and in what has been done under those contracts. The status of the former is that, after the initial payment of $1,920, Schmidt has refused further performance, because the appellee could not perform upon its part in respect to giving him possession. Neither party has ever treated this contract as repudiated or as abrogated, except as it would be necessarily if the option contract were performed. Appellee recognized an equitable title as existing in Schmidt, and sought to acquire that title, under the option contract, by payment of $4,000 therefor. Therefore the Schmidt purchase contract remains effective, unless the option contract is still effective, or unless there has been failure of performance by Schmidt or his transferees under the Schmidt purchase contract. The appellee contends that the option contract is in full force, and filed this suit for the purpose of enforcing its specific performance. While the cancellation of the Schmidt purchase contract is also asked, there is no offer to repay the $1,920 paid by Schmidt thereon, and it is clear from the petition that this relief was based and sought upon the theory that the enforced performance of the option contract would necessarily annul the purchase contract. The first inquiry, therefore, is as to the status of the option contract which is sought to be enforced specifically. This contract, while expressed as a “renewal” of an earlier option contract, which had expired, is not properly so, but. is complete in itself, and in some respects inconsistent with the former option. The terms of this earlier option are not effective, and it will be disregarded. The option here involved is as follows:

“Received of Stondall Land & Investment Company the sum of four hundred '($400) dollars, for renewal the option that is hereby given to said Stondall Land 6 Investment Company, residing at St. Paul, Minnesota, to purchase within 7 months from the date hereof the following described lands: * * * For the sum of four thousand ($4,000) dollars to be paid in the following manner, to wit: Four hundred ($400) dollars as mentioned above; balance in installments from time to time without interest, all, however, to be paid on or prior to November 1, 1913. All of which sums are to bear interest from the date hereof at the rate of -per cent, per annum, payable annually. It is further agreed 'that the holder of this option shall pay all taxes and assessments levied or assessed on said land for the year A. I>. 1913.

. “It is further agreed that in case of default hereof on the part of the said purchaser the money paid hereon shall be retained by Andrew Schmidt as liquidated damages for a breach hereof.

“It is hereby mutually agreed that the said purchaser shall have and receive a land contract, bond for deed, in the usual form, which shall set forth fully the terms of said sale and shall provide that on full compliance therewith the said purchaser shall be entitled to a warranty deed conveying said land free and clear of all encumbrances, as above set forth, reserving to the public an easement in such roads, or roads, across said lands as may already be in the public, and that said land contract shall be duly signed and executed •by the parties hereto within seven months from the date hereof.

“Dated Stockton, Minn., April 1, 1913.

Andrew Schmidt.

“In the presence of Harold Harris.”

If this option was accepted and performed by appellee, it is entitled to the specific performance it here seeks; otherwise, not. The evidence is undisputed that no part of the balance of $3,600, required by the option to be paid by November 1, 1913, was ever paid by that date; but it is equally clear, that after that date both appellee and Schmidt treated the contract as in force. The inevitable effect of this was a waiver by Schmidt of the condition that the balance should be paid by November 1, 1913. As no other date limit was considered by the parties, it must be taken that their intention was that the balance should be paid'within a reasonable time. To this extent the option •contract was modified. It is not claimed, and under the evidence could not be claimed, that any other requirement of that contract was ever altered. As thus amended, the contract required the payment of the balance of $3,600, in installments, within a reasonable time from, November 1, 1913. Beginning shortly after this date, Schmidt commenced to urge payments by appellee. This he did persistently and strongly, being finally compelled to place the matter in the hands of an attorney, who conducted an insistent correspondence. In response to these repeated urgings appellee, clearly influenced by the pendency of the Schmidt suit, grudgingly paid as follows: November 21, 1913, $100; December, 1913, $50; May 5, 1914, $100; June 30, 1914, $400; December 1/ 1914, $50; June 5, 1915, $200; January 14, 1916, $400. More than four months after this final payment, in response to a particularly urgent letter demanding further payment, appellee wrote that it could not then state when it could make further payment, but would do so at the first opportunity, adding:

“As soon as the ruling has Leen made in Washington, which will he some time during the summer, and which we of course expect to be in our favor, we will make a loan on the land and pay the Schmidts their balance.”

In 30 months it thus paid $1,300, or slightly over one-third of the $3,600 due to be paid within a reasonable time, and over 4 months after the last payment, after urgent demand, indefinitely postponed further payment. We cannot regard these acts as any compliance with the requirement of payment within a reasonable time. The option contract also required payment of the taxes for 1913. No attempt to <lo this was ever made, until long after the land had been sold for taxes, when appellee, in December, 1917, offered to redeem the land from the tax sale. The importance of this requirement to Schmidt is clear. Appellee did not perform. Thus appellee utterly failed to per-forin either of the only two things which the contract required it to do. It is therefore in no position to insist upon specific performance, or to object to Schmidt treating that contract as breached in essential particulars. He did so treat it as breached and at an end, when he transferred his title and interest in the land to Langley.

The annulment of the option contract left the parties where they were when that contract was made, subject, in so far as performance of that contract was concerned, to what had occurred since its execution. After the first payment by Schmidt he refused to further perform, until appellee placed him in possession, as required by that contract. Neither party treated the contract as terminated, and both acquiesced in the suspension of further performance, until appellee could place Schmidt in possession. This it was endeavoring to do in the .Schmidt suit. When it should place Schmidt in possession, appellee would he in position to demand performance upon his part. Schmidt never secured possession, hut when the transfers by him resulted in his rights being held for one who had actual possession, the contract in that regard might have been regarded as performed by appellee, had it not challenged both those rights and that possession by this action, which operates as a suspension of performance until this litigation is terminated. When it is terminated, appellee will be in position to demand performance of the purchase contract by those who have replaced Schmidt, and to protect itself if such performance is not promptly forthcoming.

[4] There is another substantial ground for the reversal of this decree. The option contract of April 1, 1913, was champertous and void under section 9406 of the Compiled Laws of North Dakota of 1913, which reads in this way:

“9106. Buying Pretended Tilles. — Every person wlio buys or sells or in any manner procures, or makes or takes any promise or covenant to convey any pretended right or title to any lands or tenements, unless the grantor thereof or the person making such promise or covenant has been in possession, or he and those by whom he claims have been in possession of the same, or of the reversion and remainder thereof, or have taken the rents and profits thereof for the space of one year before such grant, conveyance, sale, promise or covenant made, is guilty of a misdemeanor.”

See Galbraith v. Payne, 12 N. D. 164, 169, 170, 172, 96 N. W. 258 ; Burke v. Scharf, 19 N. D. 227, 232, 124 N. W. 79; Dever v. Hagerty, 169 N. Y. 481, 484, 62 N. E. 586; Byrnjolfson v. Dagner et al., 15 N. D. 333, 336, 337, 338, 109 N. W. 320, 125 Am. St. Rep. 595.

Neither Schmidt, the grantor, nor the appellee, the grantee, in the option contract to convey Schmidt’s alleged right to the land and to its possession, nor any of those under whom the appellee and Schmidt claim, had been in the possession of the north half of the section, or of the reversion or remainder thereof, or had taken the rents or profits thereof, for the space of one year before Schmidt’s promise or covenant to convey his alleged right to the land was made. Johnstone was, and ever after 1906 had been, in the actual exclusive possession of this land. The contention of counsel for the appellee is not tenable that the option contract does not fall under the ban of this statute because (1) such covenants and promises are void only against those claiming adversely; and (2) because Johnstone claimed his right, title, and possession under his contract of January 15, 1906, with the Golden Valley Land & Cattle Company, the owner of this land at that time, and that, as he was estopped from denying his grantor’s title, he was not claiming adversely to Schmidt, who was the grantor in the option contract. The question is: Was Johnstone claiming adversely to Schmidt when the latter made his option contract in 1913 ? Johnstone was undoubtedly estopped from denying that the Golden Valley Cattle Company had title to this land in 1906, when it made the contract with him, and he was also estopped from denying that its successor in interest, the appellee, did not acquire title to the land subject to his contract, but that was the extent of the estoppel against him. When Schmidt made his option contract, the appellee had repudiated Johnstone’s contract of 1906 and his right to the land and to its possession thereunder, and had set up and was maintaining, by suits against Johnstone and by the contract it made with Schmidt, an alleged right to the title and possession of the land inconsistent with and adverse to Johnstone’s contract for and his title and actual possession thereof under that contract. Johnstone was not estopped by that contract of 1906, and his claim to hold the right to the title and the actual possession under it, from making his adverse claim to that title and possession against the subsequent inconsistent claim of Schmidt initiated and maintained by the appellee. Against that claim, and against Schmidt and his claim under his contract, and against the appellee who was maintaining that claim and seeking to strike down thereby Johnstone’s right, title, and claim to the land, and to its actual possession, which he held, Johnstone was therefore an adverse claimant, and the option contract was void.

With instructions to dismiss appellee’s bill, with an equal division of the costs, the decree is reversed.