Slimmer v. Martin

Bikdzell, J. This is an appeal from a judgment in a vendor’s action for specific performance. The specification is for a trial de novo. The appellants, however, insisted upon a jury trial in the court below,- and upon this appeal they also rely upon the ruling of the trial court denying it as an error vitiating the judgment. The action was commenced by the service of a summons on December-8, 1913, and the complaint was filed in the office of the clerk of the district court of Divide county, January 23, 1914. The trial took place on September 18, 1916. Findings and conclusions, order for — 257 — judgment, and judgment, were filed on December 7, 1917. Tbe record on appeal to this court was filed on April 30, 1918. In the comAaint, relief is prayed for as follows: “(1) That tbe amount agreed by tbe defendant to be paid for said land and tbe whole thereof, with interest according to tbe terms of tbe said contract, and tbe amount of tbe taxes paid on said premises by tbe plaintiffs, be ascertained by tbe court, or under its direction, and that tbe plaintiff have judgment against tbe defendant for tbe amount so ascertained,' together with their costs and disbursements herein;” “(2) That by tbe decree and judgment of this court herein,- tbe premises hereinbefore and in said contract described be sold to satisfy tbe amount of such judgment, together with tbe costs and expenses of -such sale; ” “(3) That tbe defendant be foreclosed of all right, title, interest, and estate in and to said premises, and tbe whole thereof, except tbe right of redemption thereof from such sale within such time as may be by tbe decree of tbe court fixed, for that purpose; ” “(4) That if tbe proceeds of such sale are insufficient to satisfy tbe judgment herein, together with tbe expenses of such sale, that tbe plaintiff have execution against tbe defendant for any deficiency remaining after applying thereto tbe proceeds of such sale; ” “(5) That tbe plaintiffs have such other and further relief as to tbe court may seem just and equitable.” Tbe first contention of tbe appellant is that tbe action should-have been considered an action at law, and that the defendant was consequently entitled to a jury, trial. It is clear .from a reading of tbe complaint that it purported to state a cause of action cognizable in equity. The contract, however, was set forth in full in tbe complaint and made a part thereof; so that if, under all tbe allegations, tbe complaint states a cause of action triable to a jury, it should have been so tried. It provided for tbe payment of tbe purchase price ($11,000) by tbe giving of a promissory note bearing 8 per cent interest per annum from March 1, 1909, payable as thereinafter stated. The terms of payment were expressed .as follows: “$1,000 on tbe principal and all accrued interest on November 1, 1909, and $1,000 and accrued interest on tbe first day of November of each and every year thereafter, until entire purchase price and accrued interest has been paid.” Tbe contract — 258 — also embraced other obligations of the purchaser, such as the obligation, to break the land, deliver the crops, pay taxes, and to secure the annual payments by mortgage on the crops, though the ownership of the same is reserved in the vendor. There is no acceleration clause under which the whole amount of deferred instalments might be declared to be due on the failure of the purchaser to fully perform with respect to a single instalment, or in case of other default. It is provided, however, that in case the purchaser shall fail to perform punctually “all and each of the stipulations of this contract, . . . then the party of the first part shall have the right to declare this contract null and void, and on such declaration all right and interest thereby created . . . shall utterly cease and all payments made or improvements placed upon said premises shall remain in and belong to the party of the first-part as rent for the said premises.” It is further provided that upon cancelation the party of the first part shall cancel and surrender the purchase-price note. It is apparent that, at the time the action was brought, the time had not arrived for the delivery of the deed; and that but five of the eleven annual instalments ($1,000 each) of the purchase price were-due. From this it follows that the plaintiff could have secured a money judgment for the instalments due by bringing an action at law for the-unpaid instalments. Shelly v. Mikkelson, 5 N. D. 22-27, 63 N. W. 210. But, as held in the case cited, such an action is essentially an equitable proceeding for specific performance. See also to this effect Beecher v. Conradt, 13 N. Y. 1008, 64 Am. Dec. 535, where it was held that independent promises to pay instalments of the purchase-price become dependent upon the tender of the deed when the time has arrived for the transfer to be made. See also 39 Cyc. p. 1900. In other jurisdictions, however, it is held that an action for the purchase price, under instalment contracts, may he maintained independently of any equitable considerations governing the remedy of specific performance. See Gray v. Meek, 199 Ill. 136, 64 N. E. 1020; 39 Cyc. supra; 36 Cyc. 565. We are convinced that both the better reason and the weight of authority support the proposition that, since an action by the vendor to recover the price is not essentially an action to recover damages as compensation, it should be controlled by equitable considerations. 29 Am. & Eng. Enc. Law, 720. — 259 — Since the action mnst be regarded as primarily one in equity to obtain specific performance, it presents a somewhat novel feature. It attempts to secure specific performance of a contract before the time has arrived for the delivery of the deed by the vendor or the full payment of the purchase price by the vendee. The query arises whether, in the proper exercise of equity jurisdiction, a court can decree the specific performance of a contract which is broken in reality as to some of its provisions, and which is broken only in anticipation as to the remainder. Does the doctrine, in short, of anticipatory breach of contract, as announced in the leading case of Hochster v. De la Tour, 2 El. & Bl. 678, 118 Eng. Reprint, 922, 22 L. J. Q. B. N. S. 455, 17 Jur. 972, 1 Week. Rep. 469, 6 Eng. Rul. Cas. 576, extend to the remedy by way of specific performance ? Since the case of Stanford v. McGill, 6 N. D. 436, 38 L.R.A. 760, 72 N. W. 938, was overruled (Hart-Parr Co. v. Finley, 31 N. D. 130, L.R.A.1915E, 851, 153 N. W. 137, Ann. Cas. 1917E, 706), it has been the law of this jurisdiction that, upon the repudiation of a contract in advance of the time for performance, the opposite party may treat the contract as broken for the purpose of maintaining an action to recover damages for its breach. The doctrine of Hochster v. De la Tour, supra, is thus the law of this jurisdiction applicable to all contracts except, probably, negotiable instruments. See Roehm v. Horst, 178 U. S. 1, 44 L. ed. 953, 20 Sup. Ct. Rep. 780. In applying the remedy of specific performance, however,, before the time for performance has arrived, there are inherent practical difficulties that are not present in the same degree where it is sought merely to recover damages. Damages can well be estimated in advance on the supposition that the contract will not be performed, but to enforce specific performance before the time has arrived for performance under the contract necessarily involves the compelling of one to do that which he has not contracted to do. In the case of Miller v. Jones, 68 W. Va. 526, 36 L.R.A.(N.S.) 408, 71 S. E. 248, this question was considered and it was there said: “The contract in the present case being of that general class of contracts which equity will specifically enforce, we see no reason why plaintiff may not maintain his suit, notwithstanding the time has not arrived for complete performance of the contract.” It was held that the suit, though brought by the vendee for specific performance prior to the time for — 260 — the delivery of the deed, was not prematurely brought. The court further held, however, that its decree could go no further than to require performance according to the agreement. So, in reality, the suit merely determines what the rights of the parties are under the agreement, and does not compel performance in advance of the time stipulated; For additional authorities supporting the remedy of specific performance, see Bear v. Fletcher, 252 Ill. 206, 96 N. E. 997; Payne v. Melton, 67 S. C. 233, 45 S. E. 154; McRae v. Smart, 120 Tenn. 413, 114 S. W. 729; Bogard v. Barhan, 56 Or. 269, 108 Pac. 214; Contra Friedman v. McAdory, 85 Ala. 61, 4 So. 835; see also note in 36 L.R.A.(N.S.) 408. It is obvious that in the case at bar the court could not have entered a personal judgment against the defendant, at the time the action was brought, for the entire amount of the purchase price. It could only have decreed that the contract was binding; that it was one which the plaintiffs were entitled to have specifically enforced; that the defendant should make payments from time to time as they matured under the contract; and that, in the event of his failure to do so, the vendors might have a special execution directing the sale of defendant’s interest in the land, subject to redemption. Having sought specific performance, the plaintiffs, on account of the provisions of the contract in question governing cancelation, are precluded from obtaining a personal judgment covering instalments falling due subsequent to the bringing of the action. It is expressly "■provided in the contract that upon cancelation the vendor will cancel and surrender the note for the purchase price; and, though no note was given in the instant case, this provision, of course, would operate to cancel the' obligation to pay future instalments of the purchase price ■ in the event of a cancelation for any cause or in any manner whatsoever. If, as a result of the action for specific performance, the purchaser should fail to pay the judgment for the amount of the purchase price, due up to the bringing of the action, and his equity were sold to satisfy the judgment, and there should be no subsequent redemption, it is clear that it would be impossible for him to obtain title to the land by performing his contract to the extent of making the payments subsequently falling due. The contract would have been canceled by - operation of law through the exhaustion of the remedy chosen by the — 261 — vendors themselves. The vendors, then, in bringing the action, must be held to have consented to a cancelation of the contract, in the event that the remedy sought should result in foreclosing the purchaser’s right to ultimately obtain the title. Hence, it would be inequitable to ■ allow a personal judgment against the purchaser to stand for any amount that was not due at the time the action was brought. The judgment in this action is therefore erroneous to the extent that it embraces the instalments payable after action was brought and before the date of trial, which, as indicated in the statement of facts, occurred some eight years after the contract was made. So, taking the view of this case which is most favorable to the respondent, we. would be com- • polled to modify the judgment so as to direct the sale for only the amount due up to the time of the bringing of the action, and to further limit it so that the subsequent instalments could not be made the basis of a personal judgment in the event of the failure of the purchaser to' redeem from a special execution sale. The questions discussed above were fully aruged or suggested in briefs of counsel and upon oral argument. A determination of them has seemed to the writer and to Mr. Chief Justice Christianson to be necessary in order to determine' the character of the action and the principles that should control in arriving at a decision. But inasmuch as the plaintiff’s remedy is, in the opinion of the court, wholly precluded by acquiescence and laches, our associates deem such discussion unnecessary. We who agree to the principles heretofore stated are not disposed to question the judgment of our associates in this respect; but" our views are stated for what bearing they may be thought to have upon the case in hand. The court is agreed that the plaintiff’s remedy is barred. As previously stated herein, the contract between these parties was made in April, 1908, and possession was to be given on March 1, 1909. The note stipulated for in the contract was never given, and as early as January, 1909, the plaintiffs, in a letter to one Scofield, who was intei’ested in the deal going through, manifested considerable concern over this fact, and anticipated that the defendant, who had previously made some objection to the title, did not care to go through with the deal. In the letter referred to th,e plaintiff said: “ . . . ■ We presume that States may try to back out on this deal, and are sending you these ■ — 262 — papers believing that you had better have Palda get States to come to Minot on some pretext or other and get him to sign the note, and accept a copy of the contract covering these lands. Palda stands ace high with States, and we think he can handle him better than anyone else, and as you seem to consider this a good sale on this land it will never do to lot it fall through, and in the event that Palda cannot get States to come to Minot, it might be well to have him go to Crosby, North Dakota, whore States lives and bluff the thing through. He would no doubt come across better if he could be gotten to Minot, as his family are liable to make a kick, if Palda has to go to his home to get his signature.” The record discloses that the defendant early repudiated his obligation under the contract, and that he persisted in a course of nonperformance. Yet, this action was not begun until December 8, 1913, or •about five years after the defendant’s attitude was known. And in the record, though the defendant pleaded the acquiescence of the plaintiffs in his abandonment of the contract, no explanation whatever is found for the delay. We are of the opinion that the laches shown on the face of the record not only amounts to proof of the acquiescence pleaded, but it puts the plaintiffs in a position where they are not entitled to invoke the equity powers of the court. .While the remedy by way of specific performance is equally open to both the vendor and the purchaser under a contract for the sale of real property, it is not to be resorted to in. cases where hardship or inequitable consequences are apt to follow. In the case at bar, the possession of the land during the entire period of delay, and in fact to the present time, — eleven years after the contract was made, — has remained in an uncertain state, — a banker testified that up to the time the action was tried he had collected from different occupants $1,685, which was on deposit in his own name in the bank, subject to the call of the successful litigant. It is manifest that, owing to this delay and the long period of uncertainty as to the result, it will be impossible for a court of equity to put either party in the position he or they would have occupied had the contract been faithfully performed or had its performance been promptly - compelled according to its spirit. This inability is apparently due, primarily, to the delay of the plaintiffs in promptly pursuing their remedy; hence, they are in no position to complain. - ' — 263 — Where a party desires to avail himself-of the equitable remedy of specific performance, he should proceed as promptly as the circumstances permit. Even a short delay may result in a situation mailing the pursuit of the remedy inequitable; and especially where, as here, the purchaser has not gone into possession and hag enjoyed no valuable rights under the contract. Eor authorities, see Scott v. Desire, 175 Ill. App. 215; McDermid v. McGregor, 21 Minn. 111; Eastman v. Plumer, 46 N. H. 464; Colby v. Gadsden, 34 Beav. 418, 55 Eng. Reprint, 696, 17 L. T. N. S. 97, 15 Week. Rep. 1185; Fry, Spec. Perf. 5th ed. §§ 1100-1102; Pom. Spec. Perf. Contr. §§ 412, 425; 36 Cyc. 724. Eor the foregoing reasons, the judgment appealed from is reversed, and the cause dismissed, with costs, Bronson., J. I concur in result. Grace, J. I concur in the result only.