Rader v. Taylor

333 P.2d 480, 134 Mont. 419, 1958 Mont. LEXIS 38

• Court: Montana Supreme Court
• Decided: November 24, 1958
• Docket: 9875
• Status: Published

Opinions

MR. JUSTICE ANGSTMAN:

This action was brought by plaintiffs to obtain restitution of certain real property in Meagher County sold by plaintiffs to defendants under a contract for installment payments. Likewise plaintiffs sought an injunction enjoining and restraining the defendants from removing improvements and from cutting or removing trees and saw logs until the further order of the court.

The cause was originally set for trial on April 3, 1957, before the court without a jury. On that day defendant Frances A. Taylor tendered $58,000 in cash as settlement in full for all claims made by plaintiffs. This offer was rejected. Defendants then demanded a jury trial which was granted. The cause was then continued for trial until July 23. After the jury was selected and sworn the cause was continued for trial until July 24. At the opening of court on that day and before any evidence was introduced plaintiffs made a motion for judgment on the pleadings. Counsel for defendants again tendered full payment on reasonable notice in exchange for a deed. He also objected to the motion because of a want of notice thereof. The motion for judgment on the pleadings was sustained on that day!

Judgment in favor of the plaintiffs was entered accordingly. It is from this judgment that defendant Frances A. Taylor, has appealed. At the outset we are met with motions to dismiss the appeal for several reasons: The first of which is that the transcript was not timely filed. The facts with reference thereto are the following:

The judgment was rendered on August 1, 1957. Notice of appeal was filed on September 11, 1957. On the same day the appellant ordered a transcript of the judgment roll. On affidavit showing the necessity therefor an order was obtained from the trial judge on October 23 extending the time to file the transcript to December 11, 1957. The transcript on appeal was filed on December 5, 1957.

After the appeal had been taken to this court the district court no longer had authority to extend the time for the filing of a transcript on appeal.

However, the fact that appellant did obtain an order from the trial court purporting to extend the time may be considered in determining whether she was guilty of laches in preparing her transcript on appeal. Under our statute, section 93-8019, it is provided “that no appeal can be dismissed for any objections to the record * * * if the cause of such objection is removed by perfecting the record * * * to the satisfaction of the court, or a justice thereof, before the hearing of a motion to dismiss.”

Likewise, subd. 2 of Rule VI of the rules of this court in part, provides: “ * * * if it appear that the delay [in serving and filing the transcript] has been without laches on the part of appellant, his appeal vdll not be dismissed for such delay until reasonable time has been allowed for filing the record.”

Subd. 3 of the same Rule provides, in part, as follows: “No appeal shall be dismissed for failure to file the record within the time required by these Rules unless the motion to dismiss shall have been filed and notice thereof given to the appellant, prior to the filing of the record; provided: however, that the Court may dismiss an appeal upon its own motion where it appears the appellant has been guilty of laches.”

Here the transcript was filed before the hearing of the mo- tion to dismiss the appeal, and we are satisfied that defendant was not guilty of laches in serving and filing the record on appeal. The motion therefore to dismiss on that ground is overruled.

The ground, of the second motion to dismiss, was that the undertaking on appeal was defective and void. It appears from the record that when defendant, Frances A. Taylor, was about to perfect the appeal her counsel obtained an order from the trial court staying execution of the judgment upon the filing of a good and sufficient bond in the amount of $7,500, conditioned that “appellant will pay all costs awarded against her on the appeal or on a dismissal thereof not exceeding- $300, and during possession of the property involved in said action by the appellant aforesaid that she will not commit, or suffer to be committed, any waste thereon and that if the said judgment appealed from shall be affirmed or the appeal dismissed that the said appellant will pay the value of the use and occupation of the said property from the time of the appeal until the delivery of possession thereof, not exceeding the amount of $3,000 per year.”

The undertaking on appeal after reciting the entry of the judgment in favor of plaintiffs awarding restitution of the property and $1,500 attorneys’ fees and costs recites that the appellant will pay all damages and costs which may be awarded against her on the appeal or on a dismissal thereof not exceeding $300.

The undertaking on appeal then made provision for the surety to be further bound in the sum of $7,500 in consideration of the stay of execution of the judgment. Plaintiff contends that the undertaking on appeal is so uncertain and ambiguous as to be void. The undertaking is sufficient to meet the requirements of sections 93-8005 and 93-8006 as an undertaking on appeal.

If there be any ambiguity in the undertaking so far as it relates to the supersedeas, that would furnish no ground for the dismissal of the appeal for -want of an undertaking for costs. Compare Marlowe v. Michigan Stove Co., 48 Mont. 342, 137 Pac. 539. The motion to dismiss the appeal on this ground also must be and the same is denied.

We then come to the question of the propriety of the court’s action sustaining the motion for judgment on the pleadings. Appellant first contends that the judgment cannot stand because the complaint does not state facts sufficient to constitute a cause of action.

A motion for judgment on the pleadings searches the record and permits an examination of the prior pleadings of the party making the motion. 71 C.J.S. Pleading, section 427, page 870; Board of Trustees of York College v. Cheney, 160 Neb. 631, 71 N.W. (2d) 195; Rose v. City of New Rochelle, Sup., 119 N.Y.S. (2d) 900; Lipski v. Schwartz, 5 Ill. App. (2d) 577, 126 N.E. (2d) 415; Brickell v. Kansas City, 364 Mo. 679, 265 S.W. (2d) 342, 41 A.L.R. (2d) 878.

Appellant specifically contends that the plaintiffs’ complaint is insufficient because the notice of cancellation of the contract served upon defendants is not authorized by the contract pleaded in the complaint and therefore the case stands as if no notice of cancellation has yet been given to them.

Briefly the complaint alleges that plaintiffs as sellers entered into a contract for the sale of certain described land to the defendants on March 6, 1952. The total purchase price was $67,-400; that defendants made a down payment of $15,000 and agreed to pay the balance in installments; that $3,000 was to be paid on or before November 1, 1953, $3,000 on or before November 1, 1954, and ten additional installments were agreed to be made of $4,560, each payable annually, commencing on November 1, 1955. The unpaid balance was to draw interest at the rate of four percent per annum. Time of payment was made of the essence of the contract. The contract was made a part of the complaint and contains these provisions:

“And in case of the failure of Buyers to make either of the payments, or interest thereon or any part thereof or perform any of the covenants on their part hereby made and entered into, then the whole of said payments and interest shall, at the election of Sellers be foi’feited and determined by giving to Buyers ninety days (90) notice in writing, of the intention of Sellers to cancel and determine this contract, setting forth in said notice the amount due upon said contract, and the time and place, when and where payment can be made by Buyers-It is mutually understood and agreed by- and between the parties to this Contract that ninety (90) days is a reasonable and sufficient notice to be given to said Buyers in case of failure to perform any of the covenants on their part hereby made and entered into, and shall be sufficient to cancel all obligations hereunto on the part of Sellers and fully reinvest them with all right, title and interest hereby agreed to be conveyed, and Buyers shall forfeit all payments made by them on this contract, and all their right, title and interest in all buildings, fences or other improvements shall be retained by Sellers, in full satisfaction and as a reasonable rental for the property above-described and in liquidation of all damages by them sustained, and they shall have the right to enter and take possession of the premises aforesaid.”

One of the affirmative defenses averred that when defendants were in default in the payments due on November 1, 1953, and November 1, 1954, they entered into an agreement with plaintiffs called a Standby Agreement, the effect of which was to postpone those payments. Plaintiffs admit that such a Standby Agreement was entered into. Defendants being in default on payments on November 1, 1955, plaintiffs attempted to proceed under the contract to give notice of cancellation.

The notice served upon the defendants by plaintiffs on November 3, 1955, contained the following:

‘ ‘ * * * you have failed, refused and neglected to pay the following sums due and payable under said contract, to-wit:

“1. The sum of $3000.00 due under the terms of said contract for deed at or before the 1st day of November, 1953;

“2. The sum of $3000.00 due under the terms of said contract for deed at or before the 1st day of November, 1954;

“3. The sum of $4560.00 due under the terms of said contract for deed at or before the 1st day of November, 1955;

“4. The sum of $2096.00, being interest on the principal sum unpaid on said contract, due under the terms of said contract at or before the 1st day of November, 1955;

“5. The sum of $147.94, being the taxes assessed and imposed on said land for the year 1954, said amount of $147.94 being the amount of taxes together with penalty and interest, which taxes together with penalty and interest, have been paid by the undersigned.

“You are further notified that the undersigned, pursuant to the terms of said contract for deed, intend to cancel and terminate the contract at the expiration of 90 days from the time of service of this notice upon you and you are further notified that pursuant to the texms of said conti'act, the undersigned have elected and do elect that the whole of the payments and interest agreed to be paid by you under the terms of said contract, to-wit: the sum of $52,400.00 principal and $2096.00 interest thereon and $147.94, taxes, penalty and interest, being the total sum of $54,643.94, are due and payable by you to the undersigned and may be paid bj^ you at the National Park Bank in Livingston, Montana, at any time within 90 days after the service of this notice upon you and that your failure so to make payment of said total sum of $54,643.94 will forfeit and determine said contract. * * *

“* ® * unless said sum above mentioned to-wit: $54,643.94, has been by you paid as above provided within 90 days of the service of this notice upon you, all obligations under the terms of said conti’act for deed on behalf of the undersigned are can-celled and the undersigned will be fully reinvested with all right, title and interest in and to the property agreed to be conveyed under the terms of said contract for deed and you the said Garvin C. Taylor and Frances (Francis) A. Taylor shall forfeit all payments made by you under said contract for deed and all your right, title and interest in all buildings, fences or other improvements shall be retained by the undersigned * # *”

It requires no citation of authority to sustain the proposition that a vendor must strictly pursue the course prescribed by the contract in foreclosing the vendee’s rights thereunder particularly when it involves a forfeiture of the payments made by the vexxdee. See generally 92 C.J.S. Vendor and

Purchaser, section 462, page 426; 17 C.J.S. Contracts, section 402, page 892; Thompson v. Lincoln Nat. Life Ins. Co., 110 Mont. 521, 105 Pac. (2d) 683; Tomsheck v. Doran, 126 Mont. 598, 256 Pac. (2d) 538, and compare Gulick v. Copeland, 186 Or. 640, 207 Pac. (2d) 1042.

In the absence of an agreement or statutory provision to that effect the maturity of the debt cannot be accelerated. 92 C.J.S. Vendor and Purchaser, section 422, pages 374, 375, note 35; 55 Am. Jur., Vendor and Purchaser, section 453, page 858, note 2; Annotation, 77 A.L.R. 290; Better v. Williams, 203 Md. 613, 102 A. (2d) 750, and Fox v. Pinson, 172 Ark. 449, 289 S.W. 329.

The contract in question here does not contain an accelera tion clause. All that it provides is that upon default of the vendee as provided in the contract the whole of the payments and interest shall at the election of the seller be forfeited. It does not state that the seller may elect to declare the entire future installments due. It does authorize the seller to give notice in writing to cancel the contract which notice shall set forth “the amount due upon said contract.” Obviously that does not authorize a notice setting forth what will later become due under the contract. It follows therefore that the complaint does not state facts sufficient to constitute a cause of action because plaintiffs have not given the defendants the requisite notice called for by the contract. The notice given called for payment in full of not only all sums past due, but also of all sums later to become due under the contract. This, as before stated, the contract does not authorize. In fact by a separate clause in the contract it is provided:

“It is understood and agreed that buyers will not be permitted to pay and Sellers will not accept as payment of the above mentioned purchase price more than twenty-five per cent, (25%) of said purchase price in any one year.”

The notice served upon defendants went beyond the terms of the contract so far as it attempted to make all future installments of the contract due and payable. It underook to place a burden upon defendants beyond that specified in the contract.

The situation is much the same as that involved in applying for a tax deed. In such cases the application must state the amount due as delinquent taxes so as to enable the owner to redeem by paying such amount.

It has been held that the amount must be stated correctly in order that the notice be valid. The statement of an incorrect amount due is fatal to the proceedings. Hinz v. Musselshell County, 82 Mont. 502, 267 Pac. 1113; Tilden v. Chouteau County, 85 Mont. 398, 279 Pac. 231; Morse v. Kroger, 87 Mont. 54, 285 Pac. 185; Shubat v. Glacier County, 93 Mont. 160, 18 Pac. (2d) 614.

We are not to be understood as holding that a slight error in the notice, as to the amount stated to be due and owing and which must be paid, would invalidate the notice as held in some of the foregoing cases. The cases relied on in the dissenting opinion of Mr. Justice Adair are illustrative of the fact that a slight error in the amount due as stated in the notice will not invalidate the notice. In the case of Montana Wheat Land Co. v. Northern Pacific Ry. Co., 308 Ill. 620, 139 N.E. 876, it was contended that the notice was invalid because it demanded repayment of the cost of serving the notice and that it demanded a greater sum than was due under the contract. The opinion does not indicate how much more was demanded than the contract called for but the fact that complaint was made that it included the cost of serving the notice is indicative of the fact that there was not much of a discrepancy between the amount demanded and the amount due.

In the Montana Wheat Land Co. case, the court, having concluded that the notice was sufficient, was justified in holding that the purchaser must within the time specified in the notice tender the amount due. But in this case the notice was unauthorized and there was no obligation on the part of the purchaser to do anything within the time stated in the purported notice, to prevent the forfeiture.

Under the contract, before a forfeiture could be obtained the seller ivas obliged to give a valid notice. '

Likewise that case as well as the case of Forest Preserve Real Estate Improvement Co. v. Miller, 379 Ill. 375, 41 N.E. (2d) 526, relied on in the dissenting opinion, differ from this in that the buyer was seeking to rescind the contract and recover what he had paid because of the miss tat emeu t of the amount due.

In none of the cases relied on in the dissenting opinion did it appear that the seller had placed an unwarranted interpretation on the contract whereby he called upon the buyer to pay sums not yet due on the theory that the contract contained an acceleration clause, which it did not.

Here the amount stated was based upon an erroneous construction of the contract. It assumed that the contract had an acceleration clause, which it has not. The error was substantial in amount. The amount actually past due at the time the notice was given was approximately $13,000, whereas the notice called for payment in excess of $54,000 in order to prevent a forfeiture. An error of such dimensions certainly invalidates the notice.

To uphold the forfeiture here on the notice here given requires the rewriting of the contract between plaintiffs and defendants.

Instead of taking the contract as written which stated that the payments and interest “shall, at the election of sellers be forfeited and determined by giving to buyers ninety days (90) notice in writing, of the intention of sellers to cancel and determine this contract, setting forth in said notice the amount due upon said contract” we must revise and rewrite the contract so that a forfeiture may be accomplished by giving ninety days notice of the intention of the sellers to terminate the contract “which notice need not set forth the amount due under the contract. ’ ’

We must take the contract as it is written, and we are not at liberty to rewrite it in order to accomplish a forfeiture.

Forfeitures are not favored in law or in equity and certainly not to the exeht that the court should accomplish it by rewriting the contract and particularly in a ease such as this where the buyer has offered to make full payment of all sums due or to become due before a valid notice of forfeiture has been given under the contract.

Furthermore defendants ought not to be required to pay the $13,000, which is admittedly due and which was correctly demanded in the notice at the risk of having it forfeited too in the event that it should finally be held as contended by plaintiffs that the contract contained an acceleration clause.

Counsel for plaintiffs contend that the clause above-quoted is the standard acceleration clause appearing in sales contracts. Such is not the case. A usual clause is, “then all of said debt secured hereby shall become due and collectible.” Bohan v. Harris, 71 Mont. 495, 230 Pac. 586, 587. “* * * the total balance due under the contract shall become immediately due and payable * * *” Silfast v. Asplund, 93 Mont. 584, 594, 20 Pac. (2d) 631, 636. “* * * then the whole of said payments and interest shall, at the election of said first party become immediately due and payable * * *” White v. Jewett, 106 Mont. 416, 78 Pac. (2d) 85, 86.

The language under the contract in question here is not sufficient authority to declare future installments not yet due, to be due and payable. The complaint on this account fails to state a cause of action. The statement in the dissenting opinion of Mr. Justice Adair that defendants in their answer admitted that notice had been served upon them as required by the contract is not a fact. On this point the answer simply “admits that on the 3rd day of November 1955 the plaintiffs caused to be served upon the defendants, a written notice marked Exhibit A and made a part of the plaintiffs’ amended complaint.”

There was no admission that notice was given as required by the contract.

The further question presented, and which must be determined, is whether the complaint states a cause of action under the second cause of action. In substance it alleges that the defendants have made improvements upon the property which plaintiffs contend belongs to them if the contract is forfeited, and that the defendants threaten to, and unless restrained, will remove the improvements from the premises. It likewise contains an allegation that defendants threaten to and will, if not restrained, cut and remove “timber, pulp wood and saw logs, and trees, thus permanently and irreparably damaging the plaintiffs.”

Whether the plaintiffs have a right to restitution or not they do have the right to restrain the defendants from committing waste upon the property. This is expressly so stipulated in the contract. We hold that the second cause of action in the complaint does state facts sufficient to constitute a cause of action. However it does not follow that plaintiffs are entitled to a judgment on the pleadings as to it.

As to the second cause of action most of the allegations therein are denied by the defendants in their answer. The answer admits that defendants have placed improvements upon the property and alleges that the improvements are worth approximately $10,000. It denies the other allegations with respect to the purpose of defendants to withdraw or remove the improvements from the property. The defendants likewise in their answer deny each and every allegation with respect to the cutting and removal of timber, pulp wood and saw logs and trees. They thus deny that plaintiffs are or will be permanently and irreparably damaged.

In connection therewith, defendants allege affirmatively that plaintiffs agreed that they could remove and cut timber from the property and remove pulp wood, saw logs and trees in order to make the payments under the contract.

Before the purchaser may be enjoined from cutting timber or removing timber already cut it must be shown that the vendor’s security will be impaired and rendered insufficient. 55 Am. Jur., Vendor and Purchaser, section 392, page 814, note 17, and cases therein cited. As above-noted, it is alleged that plaintiffs will be irreparably damaged if defendants are not restrained, but this is put in issue by the specific denial in the answer. That presents a question of fact for the jury as to whether the security will be impaired by the amount of timber which defendants have been or are threatening to remove.

Whether the pleadings present other issues of fact we need not now determine. Suffice it to say, that if some of the affirmative defenses do not state facts sufficient to constitute a defense they should be subject to the right of amendment. Strack v. Federal Land Bank, 124 Mont. 19, 218 Pac. (2d) 1052, and cases therein cited.

If plaintiffs would attack the answer of the defendants, it should be done before the day of the trial with a jury in attendance, and opportunity is afforded the trial judge to study the pleadings and the issues, if any, tendered by them. Obviously, when a jury is in attendance the court must act speedily and necessarily without much time for investigating or studying questions relating to the pleadings. We may say in passing that what we have said with reference to amendments certainly applies to defendants’ affirmative defense to plaintiffs’ first cause of action wherein it is attempted to be alleged that the plaintiffs wrongfully, intentionally and maliciously used their influence to prevent the defendants from renting the property so as to obtain income from it to enable them to meet the contract payments. If plaintiffs desired information as to how or in what manner they used their influence they should either have demurred to this defense for uncertainty or made a motion to more definitely state the nature of the influence, and in either event defendants would have an opportunity to amend if the court should hold that the answer as it now stands is insufficient. For the above-stated reasons the judgment is reversed and the cause remanded for trial.

MR. CHIEF JUSTICE HARRISON, and MR. JUSTICE CASTLES, and THE HONORABLE W. R. FLACHSENHAR, District Judge, sitting in place of MR. JUSTICE BOTTOMLY, concur.