Steele v. Bond

Vanderburgh, J. This action was originally brought in the municipal court of the city of St. Paul, under the statute relating to forcible entries and unlawful detainers. Upon a former appeal the judgment of that court was reversed for want of jurisdiction to determine the question of title involved. The action was properly commenced, and the complaint gave the municipal court jurisdiction to entertain the case in the first instance. It could not, however, try the issues raised upon the equitable matters affirmatively pleaded in the an [19] swer. Petsch v. Biggs, 31 Minn. 392. Upon its being remanded, the ease was properly certified to the district court, because involving tbe question of title, and the issues were there tried upon the merits by the court, without a jury. It will be sufficient to refer to the decision of this court upon the former appeal for a statement of the issues and the construction of the pleadings. 28 Minn. 267. The findings of the court do not sustain the allegations of the answer, that the relation of mortgagor and mortgagee was continued or renewed by any agreement between these parties subsequent to the foreclosure sale, or that the lease in question was given to further secure the plaintiff for the amount already due him in that relation. On the contrary, the court finds that, upon the expiration of the time of redemption, the defendants recognized him as owner of the premises and became his tenants, and from time to time paid him rent for the use and occupation thereof. Upon examining the record we are satisfied that these conclusions are sustained by the evidence, and that the course of dealing between the parties subsequent to the sale, including the negotiations and agreement in respect to a repurchase of the premises by the defendants, is not inconsistent with such conclusions. These findings of fact upon these issues, we think, necessarily dispose of the case, because, if the plaintiff became and continued to be the owner of the premises upon the expiration of the time for redemption, there is no good reason why the agreement of lease above mentioned, which was entered into and accepted by defendants, should not declare and establish an existing relation of landlord and tenant, as it purports to do. Hence, the usual procedure for the recovery of the possession by plaintiff was proper and applicable to this case. The plaintiff had presumptively become possessed of the legal title under the foreclosure. The defendants necessarily assumed the burden of proving a new contract, under which the relation of debtor and creditor was continued, and that the subsequent agreements between the parties were simply new forms of security for the same debt. Upon this state of the issues, the defendants were bound to establish these allegations of fact by satisfactory proof. The issue was substantially narrowed down to these questions of fact, upon which the decision of the trial court must be deemed final. [20] 2. It is, however, claimed that defendants have acquired certain equitable rights and interests by virtue of the stipulations in certain agreements between the parties, the nature of which requires briefly to be considered. The following facts appear by the findings of the court: The foreclosure sale took place February 24, 1877. The amount then due plaintiff, including costs, was $11,543. The court finds that defendants paid rent to plaintiff for the use of the premises from the expiration of the period of redemption to August 5, 187S, and thereupon the parties entered into a written agreement, whereby, in consideration of $3,000 paid by defendants to the plaintiff for the option or privilege of purchasing the premises within one year for the sum of $11,500, without interest, the plaintiff executed a deed of the same, running to defendant Joanna Bond, which he deposited in escrow, to be delivered to her upon condition that such sum should be paid within that time, but also upon the express condition that if payment should not be so made on or before the 5th day of August, A. D. 1879, such deed should be immediately surrendered to the plaintiff. The defendants appear to have remained in possession without, rent during the year, save as the same may have been taken into account in fixing the consideration of such agreement, and, having made default in the payment thereby required on the 5th day of August, 1879, they secured an extension of this privilege or option from plaintiff “until the 5th day of November, 1879, at 12 o’clock noon,” upon the same terms and conditions, except as to time, and paid as consideration therefor the sum of $483.13, and also paid as rent during the same period the sum of $300. They also failed to comply with these terms, and the deed, after the expiration of the time limited, was duly surrendered to plaintiff, as by the agreement provided. The court also finds that the defendants remained in possession, with the understanding that they should pay rent at $100 per month, until March 15, 1880, when the parties entered into the lease in controversy, which contained a stipulation giving the defendants “the right and privilege to purchase of and from the party of the first part said land and premises, at any time prior to the expiration of this lease, for $11,117, to be paid down in cash to the party of the first part upon the demand of a deed prior to the expiration of this lease.” [21] This lease ran to June 5, 1880, and was signed by both defendants. It was afterwards extended in writing, with a similar option to purchase, until the 5th day of September, 1880, and it was “expressly stipulated that time shall be of the essence of this contract.” The defendants also failed to accept or comply with the terms of such option nr privilege by making the payment stipulated, and no sale of the premises was therefore consummated. Plaintiff’s debt having been ■extinguished by the foreclosure, and the relation of debtor and creditor not being found to have been re-established or to exist between the parties, these several stipulations are. mere optional agreements for a sale of the premises to the defendants upon the condition of payment within the time limited therefor, and are not to be treated as evidence that plaintiff’s title under the foreclosure was defeasible or held as security merely. Nor do the facts warrant the interposition of equity to relieve defendants from their default. It was plainly the meaning of these agreements that the privilege of purchasing the property should not remain open after the expiration of the time limited. Time was made essential upon the face of the writings. It amounted substantially do a written proposition or offer to sell upon the proposed terms. The assent or act of acceptance, whether by'payment or the fulfilment of some other condition, was necessarily to be made within the time limited; otherwise, no contract could be consummated. Pomeroy on Contracts, § 387. Equity cannot vary the terms of such a stipulation by an extension of the privilege. The time limited for acceptance or payment is, in such case, part of the contract or option, and equity cannot interfere, unless in cases where its jurisdiction can be properly invoked on the ground of fraud or mistake, which is not alleged here. Nicholls v. Maynard, 3 Atk. 519; Adams, Eq. *108, 109. It differs from the case of penalties which are annexed to contracts to secure their performance, or from the case of a forfeiture of .some estate or interest actually acquired, and from which a party may seek relief on equitable terms. Robinson v. Cropsey, 2 Edw. Ch. 138; Wells v. Smith, 7 Paige, 22; Davis v. Thomas, 1 Russ. & M. 506; Kerr v. Purdy, 51 N. Y. 629; People’s Bank v. Mitchell, 73 N. Y. 406. The fact that defendants paid considerable sums to plaintiff to se [22] cure these optional privileges of purchase constitutes no ground for unequitable accounting and relief. Leonard v. Morgan, 6 Gray, 412; Ketchum v. Evertson, 13 John. 359. The payments were made upon a valuable consideration, and the failure to consummate the purchase according to the terms of the agreement was not the fault of the plaintiff, but the fault or misfortune of the defendants. The plaintiff is not enforcing a forfeiture. He is not rescinding a contract already made. He is not in the position of a party invoking equitable relief, entitling the court to impose any conditions. He stands upon the legal title with which the court finds he is invested, and the continued possession of defendants must be referred to the lease, and not to the proposed purchase which was never consummated. Stewart v. Murray, 13 Minn. 393, (426.) Judgment affirmed.