Case Title: Olson v. Peterson

Citation: 288 N.W.2d 294

Docket Number: 

State: north-dakota

Court: North Dakota Supreme Court

Date: 1980-01-24T00:00:00Z

Document:
288 N.W.2d 294 (1980) Crystal OLSON, Plaintiff and Appellant, v. Lynn PETERSON, as Executor of the Estate of Carrie Glaholt, Deceased, Defendant and Appellee. Civ. No. 9677. Supreme Court of North Dakota. January 24, 1980. Ralph W. Bekken, Stanley, for plaintiff and appellant, on brief. A. R. Tossett, of Anderson, Tossett & Dobrovolny, Minot, for defendant and appellee. VANDE WALLE, Justice. Crystal Olson appeals from the district court's judgment requiring Lynn Peterson, as executor of the estate of Carrie Glaholt, deceased, to prepare and sign the appropriate deed from the estate of Carrie Glaholt to Irene Lee, beneficiary under the codicil to a will. We reverse. The parties to this action stipulated to the facts in district court. No additional evidence was submitted to the district court. The stipulated facts reveal that in 1969 Carrie Glaholt entered into a farm contract with Crystal Olson. That contract provided for a lease of the property by Crystal for a period of ten years and contained the following provision which is the basis for the dispute in this lawsuit: Carrie Glaholt died on September 24, 1974, leaving a will dated November 18, 1963, to which she had added a codicil on November 29, 1966. That codicil devised the property to Irene Lee on the condition that she pay $10,000 to the estate. Following Carrie's death, Crystal made an offer to purchase the land in question. That offer was rejected by Peterson, as executor of Carrie's estate. Crystal brought action in district court to require Peterson, as executor, to execute and deliver a good and sufficient warranty deed to the property upon the payment of $10,000 by Crystal. Subsequent to the submission of the stipulation of facts and trial briefs to the district court, the court issued its findings of fact, conclusions of law, and order for judgment. The pertinent findings of the trial court are: Based upon its findings the trial court made the following pertinent conclusions of law: "In any event, the option ran co-extensive with the Farm Contract and has the *296 same January 1979 termination unless the conditions under which it might be exercised by tenant arose before that date. Following the issuance of the trial court's findings of fact, conclusions of law, and order for judgment, a judgment requiring the executor to prepare and sign a deed from the estate of Carrie Glaholt to Irene Lee upon the payment by Irene of $10,000 to the estate was entered. Crystal has appealed from that judgment and has set forth the following issues: 1. Did the trial judge err by failing to conclude that the farm contract creates both a right of first refusal and an absolute option? 2. Did the trial judge err by failing to construe the contract in favor of the optionee? 3. If the contract created only a right of first refusal, did the trial judge err in not concluding that a testamentary transfer for value constituted a sale under the contract? Although the trial court issued findings of fact, those findings were based upon a stipulation of facts entered into by the parties. We have previously held that Rule 52(a), N.D.R.Civ.P., prohibiting this court from setting aside findings of fact unless we find them to be clearly erroneous, does not apply where the parties have stipulated to the facts and the evidence before the trial court is documentary in nature, because we have before us precisely the same evidence as did the trial court. Butts Feed Lots v. Board of Cty. Commissioners, 261 N.W.2d 667 (N.D.1977); Matter of Estate of Koch, 259 N.W.2d 655 (N.D.1977); Dolajak v. State Auto. & Cas. Underwriters, 252 N.W.2d 180 (N.D.1977); E. E. Bach Millwork Co. v. Meisner & Co., 228 N.W.2d 904 (N.D.1975). In determining whether a finding is of fact or of law, the label placed thereon by the trial court is not conclusive. Butts Feed Lots, supra. We construe finding of fact VI, that the option language in the farm contract gave the tenant an incipient right to purchase only if the owner (Glaholt) or her heirs decided to sell, a conclusion of law rather than a finding of fact. This court has previously held that "Rules of construction relating to contracts generally govern with reference to the construction of a lease." Drees Farming Assn. v. Thompson, 246 N.W.2d 883, 885 (N.D. 1976). In interpreting a written contract the intention of the parties is to be ascertained from the writing alone if possible. Sec. 9-07-04, N.D.C.C. The construction of a written contract to determine its legal effect is always a question of law for the *297 court to decide. Tallackson Potato Co., Inc. v. MTK Potato Co., 278 N.W.2d 417 (N.D. 1979); Metcalf v. Security Intern. Ins. Co., 261 N.W.2d 795 (N.D.1978); Stetson v. Blue Cross of North Dakota, 261 N.W.2d 894 (N.D.1978). Crystal argues that the provision in dispute in the farm contract must be construed to give her a right of first refusal during the lifetime of Carrie or during the ten-year term of the lease or an absolute option to purchase for $10,000 if Carrie died during the ten-year period of the lease. Both Crystal and the executor cite Berry-Iverson Co. of North Dakota v. Johnson, 242 N.W.2d 126 (N.D.1976), in which this court construed an "option to purchase" clause in a lease as a preferential right to purchase. Examination of the clause in that agreement, however, clearly reveals the clause gave the lessee a right to purchase only when the owner decided to sell the premises. Another clause in the lease made it binding upon the successors and assigns of the owner and the lessee. The purchasers of the property from the lessor had contended that the option clause was neither definite nor certain enough to permit the courts to enforce it. This court concluded the clause was sufficiently definite to require its enforcement. Because the language of the clause in Berry-Iverson is substantially different from that at issue in this case, the decision is not of great assistance nor are the other cases cited by both parties. Although those cases involve interpretation of language which is somewhat similar to the clause in the instant contract, there are sufficient differences in the language of the contract interpreted to distinguish those cases. We must look to the specific language of the clause in the farm contract entered into between Crystal as lessee and Carrie as lessor to determine its intent. For convenience we repeat the language of that clause: The contract was on a printed form but the above-quoted provision was typewritten and obviously added to the contract form by the parties. The clause is far from a model of clarity, but this court has previously held that a lease is ordinarily construed against the lessor in case of ambiguity. Drees Farming Assn. v. Thompson, supra; Hughes Realty Company v. Breitbach, 98 N.W.2d 374 (N.D.1959). In Hughes, this court stated: Applying this principle of construction to the specific language of the clause at issue, we conclude that Crystal had a right of first refusal during the life of Carrie or for ten years, whichever period was shorter; that after Carrie's death Crystal had an absolute option to purchase. *298 The clause provides that upon the death of Carrie the option is binding upon Carrie's heirs, successors, or assigns. The district court concluded that the "option" was a right of first refusal; that upon Carrie's death the obligations thereunder passed to her heirs; and that only if the heirs determined to sell the property was Crystal entitled to purchase. The latter part of the clause governing procedures in the event of Carrie's death is explained by the trial court to mean that if the heirs determine to sell Crystal has the right to purchase for the sum of $10,000 or the appraised value at the time of Carrie's death, whichever is lower. We do not agree with the district court's analysis of the language used. If Crystal's right prior to Carrie's death was only the right of first refusal, which we agree that it was, presumably Crystal would have had to pay the price stipulated by Carrie because no price is specified in the contract. See Berry-Iverson Co. of North Dakota v. Johnson, supra. After Carrie's death, however, Crystal had the right to purchase for $10,000 or the appraised value, whichever was lower. Thus the option which is made obligatory upon Carrie's heirs cannot be the "option" or right of first refusal referred to in the sentences immediately preceding it. To construe the last sentence as only a right of first refusal if Carrie's heirs determined to sell the property is not logical because the price is established at $10,000 or the appraised value, whichever is lower, at the time of Carrie's death. Should Carrie have died shortly after the execution of the lease and the heirs determined not to sell the land until shortly prior to the end of the lease, the appraised value at Carrie's death would appear to have little relevance to the value at the time. The district court was also concerned with a printed portion of the contract form which provided: The district court concluded that one of the rights of Carrie's successors was the right to sell or not to sell the property. As we have already noted, we do not agree with that conclusion. Furthermore, if there is a conflict between two provisions in an instrument, the parts which are purely original control those which are copied from a form. Sec. 9-07-16, N.D.C.C. We construe the provision of the lease in question to grant Crystal a right of first refusal during the period of the lease and until Carrie's death and, after Carrie's death if the lease is still in effect, an option to purchase for $10,000 or the appraised value, whichever was lower. Because of our holding on the first issue we do not find it necessary to consider the other issues raised by Crystal on appeal. The judgment of the district court is reversed and the case is remanded with instructions to enter a judgment requiring Lynn Peterson, as executor of the estate of Carrie Glaholt, to prepare and sign the appropriate deed from the estate of Carrie Glaholt to Crystal Olson upon the payment by Crystal Olson of the sum of $10,000 to the estate of Carrie Glaholt within the time specified by the district court. ERICKSTAD, C. J., and PEDERSON, PAULSON and SAND, JJ., concur.