Stene v. County of Divide

197 N.W. 595, 50 N.D. 616, 1924 N.D. LEXIS 13

• Court: North Dakota Supreme Court
• Decided: February 18, 1924
• Status: Published

Opinion

Birdzell, J.

This is an action to recover moneys paid to the defendant under protest to discharge a purported seed lien against a certain quarter section of land owmod by the plaintiff. In the lower court the plaintiff had judgment and the defendant, appeals. The facts Avere stipulated and are as follows: The plaintiff Stene is the fee title OAvner of the northeast quarter of section 13, tOAvnship 162, north of range 182, west of the 5th P. PI. in Divide county. On August 25, 1919 he entered into a written contract to sell this land to one Tcnny Stromstad for a consideration of $3,300 to be paid on the crop 2>ayinent plan. No payment was made by the purchaser, but he went into possession and farmed the land in 1920. In April, 1920 Stromstad entered into a seed grain contract with the defendant Divide county, in which he purported to give to the latter a lien in the sum of $300 for seed grain furnished. September 23, 1920, the sale contract between the plaintiff and Stromstad wás rescinded and the latter executed a quitclaim deed. Stromstad had paid no money under the contract and he received no present consideration for the quitclaim deed. Thereafter, the plaintiff, being desirous of making a loan, found it necessary to remove the purported seed lien from the land. This lie. did by paying to the county the sum of $331.54 under protest, and the county caused the seed grain contract to be cancelled of record. In this action the plaintiff is attempting to recover the money thus paid to discharge the purported seed lien. The defendant and appellant, argues that the judgment is erroneous for the reason that it stands in as good a position with respect to its lien as though it were a second mortgagee; that, conceding that Stené hold the legal title at the time the seed grain contract was entered into, he held it only as security for the amount due under the sale contract, and Stromstad was, in contemplation of law, the owner of the land; and that as such an owner he had a right to negotiate the seed grain contract and give to the county whatever security his equity afforded and thus place it in the position of a second mortgagee. As against this contention it is asserted by the respondent that, inasmuch as Stromstad had not paid any part of the consideration, he had no equity in the land and consequently had no interest to which a seed grain lien could attach in fgvor of the county. We. think the contention of the appellant is clearly correct. Tt is elementary law that a contract for the sale of real property works an equitable conversion through the application of the maxim that equity considers as done that which ought to be done. After the contract the vendor has a right to the purchase price and the vendee to the title, but the title is held as security for the payment of the price. The ■equity of the purchaser under a crop payment contract does not depend exclusively upon the payment of a cash consideration. Under such a contract it is expected that he will enter into possession and perform services in utilizing the land which will inure to the benefit of the title owner as well as to himself. In so doing, he is acting to his own prejudice in law and acquiring an interest in the land, the value of which is measured by the difference between the unpaid consideration and the value of the land. There" are no facts in the present record from which it can be ascertained whether there is any such margin in the instant case, if such an inquiry were material. But it nevertheless does appear that Stromstad entered into possession and performed services in carrying out the contract, hence it was not wholly executory. It further appears that he, as the equitable owner consented to give to the defendant a lien for the seed grain furnished. No argument is presented which challenges the validity of this contract, except, on the theory that Stromstad acquired no equity or interest which he could mortgage. Since the respondent is in error in this contention, we must deal with the seed lien as a second mortgage. Obviously, it was not extinguished by the quitclaim deed. For aught that appears in this record the defendant county would have had a right to take steps to preserve its security, even after the quitclaim deed. TIence, when it cancelled the lien contract on the only basis upon which it would consent to cancel it, namely payment, it furnished a good consideration for the money paid and it can not be recovered hack.

Judgment reversed.

Nuessi/e, Johnson, and Christianson, JJ., concur. Bronson, Oh., concurs in result.