Brooke v. Eastman

Haney, P. J It appears from the agreed statement of facts upon which this cause was submitted to the circuit court that one Iver L. Opsal was the highest bidder for certain tracts of school land; that he deposited with the county treasurer the first payment on each tract; that he received “contracts of sale” in the form prescribed by the board of school and public lands, agreeably to the provisions of chapter 136, p. 296, Laws 1890 (which have not been amended in any manner affecting the questions presented by this appeal); that neither tract was occupied as a homestead, nor exempt as such from sale on execution; that the land was sold at sheriff’s sales under and by virtue of executions duly issued upon personal judgments regularly obtained against Opsal; that no redemp — 341 — tion having been made, sheriff’s deeds were regularly issued to the purchasers, who subsequently conveyed to the plaintiff; that Opsal wholly abandoned the land after the execution sales, and has not offered or attempted to perform any of the conditions of his contract with the state since making the first payment; that the plaintiff and his grantors promptly paid to the treasurer of the county wherein the land is situated, each subsequent payment required by the “contract of sale” and all taxes assessed against the land; and that the plaintiff demanded a patent from the state prior to the commencement of this action, which was refused. Any defect of parties defendant is expressly waived, and defendant admits “that, if Opsal had such an interest in the land as could be levied upon and sold under execution levied upon his right, title and interest in the land, the execution and all other proceedings herein were regular, and his interest -and title passed to plaintiff under said sheriff’s deeds, and he would now be entitled to patents therefor; but defendant contends that Opsal did not have such an interest in the real estate as could be levied upon and sold, and that, in order to entitle relator to patents, the contracts themselves held by Opsal should have been assigned, and that the proceedings herein shown do not amount to such assignment.” The question thus clearly defined has not been heretofore considered by this court. In view of the consequences likely to flow from its determination, a careful examination of the law relating to execution sales and the disposal of school and public lands is demanded. “All goods, chattels, moneys and other property, both real and personal, or any interest therein of the judgment debtor, not exempt by law, * * * are liable to execution.” Rev. Code Civ. Proc. 1903 § 336. — 342 — Upon a sale of real property on execution “the pnrchaser is substituted to and acquires all the right, title, interest and claim of the judgment debtor thereto.” Id. § 373. The sheriff’s deed vests in the purchaser, or his assigns, “as good and as perfect title in the premises therein mentioned and described as was vested in the debtor at or after the time when such real property became liable to the satisfaction of the judgment.” Id. § 384. If, therefore, Opsal had any interest in the land in controversy, such interest was acquired by the plaintiff. Our state Constitution contains the following, among other, provisions relating to the disposal of school and public lands: “No land shall be sold for less than the appraised value, and in no case for less than ten dollars an acre. The purchaser shall pay one-fourth of the price in cash, and the remaining three-fourths as follows; One-fourth in five years, one-fourth in ten years and one-fourth in fifteen years; with interest thereon at the rate of not less than six per cent, per annum, payable annually in advance, but all such subdivided lands may be sold for cash, provided that upon payment of the interest for one full year in advance, the balance of the purchase price may be paid at any time. All sales shall be at public auction to the highest bider, after sixty days’ advertisment of the same in a new-paper of general, circulation in the vicinity of the lands to be sold, and one at the seat of government. * * * All sales shall be conducted through the office of the commissioner of school and public lands as may be prescribed by law, and returns of all appraisals and sales shall be made to said office. No sale shall opperate to convey any right or title to any lands for sixty days after the date thereof, nor until the same shall have received the approval of the Governer in such — 343 — form as may be provided, by law. No grant or patent for any such lands shall issue until final payment be made.'’ Const, art. 8, §§ 5. 6. Substantially if not identically, the same langguage was employed by the Legislature in establishing and providing regulations for the department of school and public lands. Laws 1890, p. 296, c. 136. All sales are required to be at public auction to the highest bider, and conducted through the office of the commissioner of school and public lands. Whenever a bid is accepted, the purchaser must at' once deposit with the county treasurer the amount of the first payment of the price named, together with the amount of the interest for the fiscal year on the deferred payment, or, if the sale be for cash, he must deposit the full amount of the price named, and in either case take the treasurer’s receipt for the money deposited, a copy of which receipt ■ shall be retained by the treasurer. The purchaser shall ■ exhibit such receipt to the county auditor, who shall thereupon make a complete report of the case to the commissioner, who shall, if the land is to be paid for in installments, cause to be prepared a “contract of sale” in duplicate according to the form prescribed by the board of school and public lands, and submit the same to the Governor for his approval. If approved, one copy of such contract shall be filed in the commissioner’s office and another forwarded to the county auditor to be delivered to the purchaser^after the expiration of 60 days from the date of sale. Rev. Pol. Code 1903, §§.375-377. The only statutory provisions of which we are aware, having direct reference, to the effect of a purchaser’s failure to per-• form his obligations under one' of these contracts and to the remedy of the state in such a. case, are as follows:. “The de — 344 — ferred payments for lands sold, and the interest thereon, shall be promptly paid when due, to the county treasurer. Whenever the purchaser of any tract shall fail to pay the principal or interest due by him to the state for such tract, or shall violate any of the provisions of the contract of sale, such sale may be set aside by the circuit court of the county in which the tract is situated. Actions shall be prosecuted to enforce the provisions of this section by the state’s attorney of such county whenever he is directed so to do by the commissioner of school and public lands.” Id. §383. The “contracts of sale” delivered to Opsal were all in the same form, signed by the commissioner and approved by the Governor. The following is a copy of one of them: “At a sale made in the city of Brookings, in the county of Brookings, state of South Dakota, on the 7th day of April, A. D. 1891, of school lands in the county of Brookings, in pursuance of law, Iver L. Opsal of Brookings, purchased the northwest quarter of the southwest quarter of section No. 16, in township No. 110, north, of range No. 50, containing 40 acres and no hundredths, as appears from the plats and records of said lands now in the office of the commissioner of school and public lands, for the sum of four hundred dollars' and no cents, of which amount the said purchaser paid at the time of purchase the sum of one hundred dollars and no cents on account of the purchase money, and thirteen dollars and twenty cents, being the interest on the amount unpaid to the 1st day of January, A. D. 1892. Now if the said purchaser, his heirs, assigns, or other legal representatives, shall pay to the treasurer of the county of Brookings, in'said state, at his office, the further sum of three hundred dollars and no cents, being the amount of the unpaid — 345 — purchase money, as follows: viz: One-third thereof in five years, one-third in ten years, and the remainder in fifteen years from the 1st day of January, A. D. 1892, the date of said purchase, with interest at the rate of six per centum per annum, annually in advance, on the first day of January of each year, until the entire amount of said purchase money is paid, and shall also pay to the proper officer all taxes which may be levied upon said land as the same shall become due, then, and in that event only, will the said purchaser, his heirs, assigns, or other legal representatives, be entitled to a patent for the land herein described. But in case of the nonpayment of the purchase money, or interest, aforesaid, as it may become due, or the violation of any of the provisions of this certificate by the purchaser of said land, or any person claiming under him, then the commissioner of school and public lands may cause proceedings to be instituted in the proper circuit court, as provided in section twenty-six of chapter one hundred thirty-six, of the Laws of 1890, to set aside the sale.” It will be observed that the transaction between the slate and Opsal is termed a “sale,”' in the Constitution and in the statutes; that the formal evidence * of the transaction is termed “a contract of sale” throughout the statutes; and that the instrument delivered to the purchaser in this case is substantially in the language of the law. It simply provides that upon payment of the entire purchase price, with interest and all taxes levied on the land, the purchaser shall receive a patent, and that upon failure to perform either of these conditions an action may be instituted to “set aside the sale.” We are not intending to criticise the form of these instruments. The difficulty in determining the rights of the parties to this controversy arises from the failure of the Legis — 346 — lature to clearly arid accurately express its intention, not from any fault of the state land department. It is doubtful if the officers of the latter would have authority, in preparing these “contracts of sale,” to make any substantial departure from the language of the law. They certainlywould have no power to include any provision not consistent with the Constitution and legislative enactments. But, however, that may be, in the case at bar no attempt was made to go beyond the language of the law in defining the rights of the parties, and the nature of the transaction may be determined without further reference to the phraseology of the instruments delivered to the purchaser. Since long before the adoption of the Constitution the meaning of the word “sale” and the distinction between “sales” and “agreements-for sales” have been legally defined in this jurisdiction. Rev. Codes j 877, p. 380. It cannot be assumed that such meaning and distinction were unknown to or disregarded by either the constitutional convention or the Legislature. “Sale is a contract by which for pecuniary consideration, called a price, one transfers to another an interest in property.” Rev. Civ. Code 1903, § 1299. The word itself implies the transfer of an interest in the subject of the contract. Presuming the word to have been advisedly employed, the conclusion cannot be 'avoided that the transaction between the state and Opsal was intended to be regarded as a transfer of an interest in the land itself. This conclusion does not conflict with, if it is not impliedly supported by, the language of the Constitution. “No sale shall operate to convey any right or title to any lands for sixty days after the date thereof, nor until the same shall have received the approval of the Governor in such form as may be — 347 — provided by law.” Const, art. 8, § 6. These words of limitation were unnecessary unless it was understood that a sale in itself operates to convey some right and title to the land; aud they may be fairly construed to mean that such is the result after sixty days have expired and the approval of the Governor has been obtained. As to sales of private land by contract, it is a well-recognized rule that the property is from the time of the delivery of the executed contract at the risk of the vendee, who holds the full equitable title, the vendor’s legal title merely remaining in him for security to compel the payment of the purchase price; the relation between the parties being analogous to that between mortgagor and mortgagee, the vendee holding an equity which is liable to foreclosure on the suit of the vendor. 28 Am. & Eng. Enc. of law, 107; Bissell v. Heyward, 96 U. S. 580, 24 L. Ed. 678; Jennison v. Leonard, 21 Wall, 302, 22 L. Ed. 539. It is equally well settled with respect to private lands that a vendee with bond for title has an interest which may be reached by execution, and the same is true where the vendee has entered under a contract of sale, and paid part of the purchase money and made improvements. 11 Am & Eng. Ency. Law (2d Ed.) 637. Merely because this controversy involves public land affords no reason.for ignoring wise and universally recognized principles of the law of real property. It is the duty of this court to determine what regulations have' been, not what could or should have been, established for the disposal of the school and public lands. In doing so attention should be given to the language of our own Constitution and the statutes, rather than to the decisions in other states where the Constitution and statutes are not the same as here. — 348 — It will be readily conceded that one who has received a contract of sale as provided in the statute has the right to exclusive possession of the property, the unrestricted right to cultivate it, the right to make permanent improvements thereon, and it is his duty to pay all taxes levied upon it. These rights and this duty continue until the sale has been set aside by the circuit court. Suppose one has made valuable improvements, and paid all of the installments, what has the state in the land beyond the naked legal title? Nothing. Suppose all payments except the last one have been made, and all taxes for 15 years have been paid, has not the purchaser, at least in equity, a substantial and valuable interest in the premises? .He most certainly has. Where only one payment has been made, the interest may be less valuable, but it is the same in nature and quality. The conclusion cannot be avoided that Opsal had an interest in the land in controversy which was subject to sale on execution, and which was, by operation of the execution sales and subsequent conveyances, acquired by the plaintiff. Nothing in the section of the statute heretofore quoted, relating to the setting aside of these sales, militates against this conclusion; on the contrary the purchaser on the installment plan is recognized as having rights which can be terminated only by a judgment or decree of the circuit court. The entire expression of the legislative will on this important subject is brief, and somewhat-peculiar. Sales are usually “set aside” for some cause affecting their validity áb initio. It is scarcely accurate to speak of “setting aside” a valid sale when the evident purpose of the proceeding is to ascertain the rights and liabilities resulting therefrom. Possibly “rescind” would more nearly ex — 349 — press the legislative intent. The otatute is silent as to what consequences shall flow from the setting aside or rescission of one of these sales. A case might arise where an absolute forfeiture of all payments and improvements would be grossly unjust. Whether the Legislature would have power to provide for such a forfeiture is not pertinent to this appeal. It is ■enough to say that it has not attempted to do so, and that under the existing statute a court of equity sitting for the purpose of vacating or rescinding a sale would have inherent power to properly adjust the equities of the respective parties. Therefore the nature of the state’s remedy in cases of failure t.o perform on the par.t of the purchaser is entirely consistent with the contention that he has an interest in the land subject to sale on execution. As all the conditions of the contract of sale have been performed, and it is immaterial to the state who secures the patent, it has no cause to complain if required to convey the legal title, provided it is protected from any future claims on the part of the original purchaser, his heirs or assigns Under the stipulation of counsel in this case, the .state cannot be heard to say that it will be so unprotected. We suggest, however, that in cases of this character all persons connected with the contract of sale should be made parties to the action or proceeding for the benefit of the-plaintiff’s title as well as the protection of the state. We think the plaintiff is entitled to a patent to the land in controversy, and that the judgment of the circuit court should be affirmed. It is so ordered.