Title: Olson v. Brodell

State: north-dakota

Issuer: North Dakota Supreme Court

Document:

128 N.W.2d 169 (1964) Syverin OLSON, Plaintiff and Appellant, v. Melvin BRODELL, Jerry Brodell, and Marvin Waldo, Defendants and Respondents. Syverin OLSON, Plaintiff and Respondent, v. Jerry BRODELL, Defendant and Appellant. No. 8116. Supreme Court of North Dakota. April 21, 1964. Rehearing Denied May 22, 1964. *171 Stokes, Vaaler, Gillig & Warcup, Grand Forks, for plaintiff and appellant. Duffy & Haugland, Devils Lake, for defendants and respondents and for defendant and appellant Jerry Brodell. ERICKSTAD, Judge. This case involves two appeals. The first appeal is from a judgment ordered by the District Court of Eddy County, dismissing the plaintiff's action of forcible entry and detainer. In his appeal the plaintiff demands a trial de novo. In the second appeal the defendant Jerry Brodell appeals from an order of the district court appointing a receiver to manage the real estate involved, pending the determination of the first appeal. The facts will be stated in chronological order as far as possible. In November of 1956 the plaintiff, Syverin Olson, purchased a tract of land located in Eddy County, North Dakota, consisting of approximately 2,000 acres, at a price of $35,000. This property was purchased from the father of the defendant Melvin Brodell. At the time of the purchase the plaintiff leased "one-half interest of operation and income of" the property to the defendant Melvin Brodell at a cash rental of $1,150 per year. This lease was dated November 1, 1956. The same parties also entered into an instrument entitled "Option to Purchase." The pertinent parts of the option, omitting the description of the property, read as follows: On full payment of the purchase price by the plaintiff, the defendant Melvin Brodell and his brothers and sister joined in conveying the property to the plaintiff by warranty deed dated November 10, 1959. No reference to the lease or the option was contained in the deed. The defendant Melvin Brodell contends that this deed was executed subsequent to the death of his father, merely to carry out the terms of the contract for deed entered into between the plaintiff and the father of the defendant Melvin Brodell. On April 12, 1960, the plaintiff, Syverin Olson, and the defendant Melvin Brodell entered into a new lease for the years 1960 and 1961, covering all the premises, except perhaps the "soil bank land," and calling for a cash rental of $2,300 per annum. This lease contained the following language: Prior to the first of November in the years 1960, 1961, and 1962, the defendant Melvin Brodell made payments of $1,000 plus interest to the Farmers & Merchants State Bank of Tolna, North Dakota, to be submitted to the plaintiff according to the installment payment terms of the option dated January 29, 1957; but in all three instances the plaintiff refused to accept the payments. On November 1, 1961, the plaintiff sent the defendant Melvin Brodell notice by certified mail to quit the premises. When the defendant did not quit the premises, the plaintiff had the sheriff of Eddy County, on August 6, 1962, serve upon the three defendants in the instant case an instrument entitled "Landlord's Three Days Notice to Quit" which was dated August 3, 1962. The plaintiff followed this notice with a complaint dated November 10, 1962, bringing an action of forcible entry and detainer seeking to evict the defendants from the premises. The defendant Melvin Brodell alleged in his answer that he was the owner of one-half interest in the land and thus was entitled to possession. The other defendants alleged that they were entitled to possession of parts of the land as lessees of Melvin Brodell, who, they said, was the owner of one-half interest in the land. The county justice concluded that these defenses raised a question of title to real estate, which deprived his court of jurisdiction. For this reason, the county justice, on demand of the defendant contained in the answer, transmitted to the district court the pleadings and papers filed with him. At the commencement of the trial in district court the plaintiff moved to amend his complaint to ask for $4,000 in damages for the withholding of the premises during the year 1962. The court delayed making a decision on this motion until the case was tried and then denied the motion on the ground that the defendant Melvin Brodell had validly exercised his option to purchase; that, in so doing, he became a cotenant; and that, under these circumstances, the plaintiff's only recourse was an action for an accounting. The court, in a memorandum decision dated March 20, 1963, further found that the defendant was not entitled to possession of the land but that he should be permitted to make payment in full of the purchase price of a one-half interest in the land within thirty days thereof. The time for payment was later extended to May 1, 1963. Prior to May 1, 1963, the defendant Melvin Brodell conveyed his interest in the land to the defendant Jerry Brodell, who made payment of the balance of the purchase price, with accrued interest, by delivering said payment to the Farmers & *173 Merchants Bank of Tolna, North Dakota, where previous payments had been made by the defendant Melvin Brodell and retained by the bank for delivery to the plaintiff. Because of Melvin Brodell's assignment of his interest in the land to Jerry Brodell and because of the tender by Jerry Brodell of the purchase price of the one-half interest in the land, the district court found the defendant Jerry Brodell to be the equitable owner of one-half interest in the land and that for these reasons the issue raised as to the right of the defendants to possession of the land, under the option agreement, had become moot. The court then ordered that the action be dismissed. A judgment rendered pursuant to this order was entered, and it is from this judgment that the plaintiff appealed and asked for a trial de novo. After the appeal was taken in this case the plaintiff and appellant requested the trial court to appoint a receiver of the land involved in the first proceeding, pending the determination of the appeal. On submission upon affidavits of the order to show cause why a receiver should not be appointed, the trial court appointed a receiver. The order, which was dated August 20, 1963, provided that the receiver should "have the power as receiver to harvest and preserve the crops raised on the land involved and further, the express power to take care of obligations incurred in connection with the seeding, cultivating and harvesting of the crops grown on the land involved." The defendant Jerry Brodell appealed from the said order appointing the receiver. He does not question the power of the trial court to appoint a receiver pending an appeal in a proper case but argues that this is not a proper case. We shall consider first the contentions of the plaintiff-appellant on appeal from the judgment dismissing the plaintiff's action of forcible entry and detainer. The first contention is that the county justice improperly certified the case to the district court. The plaintiff argues that the statute which provides for a transfer of the case from the county court to the district court when a question of title arises applies only when a question of legal title, not equitable title, is raised. It should be noted that this objection to the jurisdiction of the district court was not made in district court but was made for the first time in the Supreme Court. As an action of this type could have been initiated in district court, the district court had jurisdiction of the subject matter. When the plaintiff appeared generally and invoked the jurisdiction of the district court to permit him to amend his complaint, the district court acquired jurisdiction over the plaintiff as a party. In the syllabus of that case, this court said: We therefore conclude that under these circumstances the district court had jurisdiction in this case. The second contention of the plaintiff, Syverin Olson, is that the option, as agreed to, contained no provision for installment payments and that, as the full purchase price was not tendered within the term of the option, the option has expired. *174 He points out that the option was dated January 29, 1957, while the testimony of both the plaintiff and the defendant Melvin Brodell is to the effect that it was prepared and signed on the date that the first lease was executed, which was November 1, 1956. He further contends that when he signed the option, only the first paragraph of the option was typed and that, because of the lateness of the evening, he and the defendant Melvin Brodell were supposed to return to the bank at another time to complete the terms of the option; that this was not done; and, thus, that he did not agree to the terms of the option providing for payment in installments. The parties stipulated to the introduction of a letter and photographs of the option prepared by a typewriting examiner, which, the plaintiff contends, prove that the typing of the option was not the work of a single writing of one typewriter. In this connection Mr. R. E. Engen testified as follows: From this testimony we could reasonably conclude that Mr. Engen was contending that he typed the option agreement from beginning to end without removing it from the typewriter until it was to be signed. In light of this testimony let us consider the pertinent parts of the typewriting examiner's statement, which read, in part, as follows: The statement of the examiner and our own careful examination of the option agreement cause us to believe that the typewriting is not the work of a single writing. The difference in the impressions of the type and the nonalignment of the type cause us to believe that the agreement, in the course of its typing, was in and out of the typewriter at least three times. If, therefore, the typist's testimony be construed to *176 mean that he did not take the instrument out of the typewriter during the course of typing, that testimony would be untrue. Considering the length of time from the date of preparation of the option to the date of trial, it is, however, possible that the typist may have forgotten the details, and, thus, we cannot assume that he knowingly testified falsely. Whether or not part of the typist's testimony was knowingly false, the testimony to the effect that the agreement as it now appears was signed by both parties before the typist, who also acted as a notary public, is corroborated by the defendant Melvin Brodell. The testimony of the plaintiff and of the defendant Melvin Brodell as to the existence of the terms of the agreement providing for installment payments is thus in conflict. Under these circumstances, where the credibility of the witnesses is to be determined, the findings of the trial court, who observed the demeanor of the witnesses and who heard them testify, is entitled to appreciable weight. Umland v. Frendberg (N.D.), 63 N.W.2d 295; Spielman v. Weber (N.D.), 118 N.W.2d 727; Higgins v. Duprat (N.D.), 120 N.W.2d 16. Giving the findings of the trial court appreciable weight, we conclude that the contention of the plaintiff has not been sustained. This conclusion is supported by the fact that the second lease entered into by the parties contains this clause: This language, although not an example of clarity, would seem to indicate that the option previously granted was being reserved to the defendant Melvin Brodell. It is interesting to note that the option agreement dated January 29, 1957, was recorded in the office of the Register of Deeds of Eddy County on August 29, 1957, and the new lease was executed on April 12, 1960. The third contention made by the appellant is that the option agreement does not provide for possession. He states that the right of possession belongs to the owner of the title and cites the following from Corpus Juris Secundum: The case of Lee v. Schide, 69 N.D. 541, 288 N.W. 556, is cited by C.J.S. to support this rule. The appellant concedes that the option contract itself does not give the right of possession but contends that since the option was exercised, the option became a binding contract of sale, and that it is implied in the option that the purchaser have possession. He cites the following: His view is that the contract clearly contemplated that the purchaser should be in *177 possession under the contract of purchase for the following reasons: In the case of Barnes v. Hulet, 34 N.D. 576, 159 N.W. 25, this court, in its syllabus, found that "[p]ossession in defendant was contemplated by the contract," although there was no specific provision therefor. In that case, however, it should be noted that the defendant had made a nine hundred dollar down payment on a purchase price of only three thousand dollars; that he took possession on making the down payment; and that the plaintiff did nothing to contest his right to possession for six years. That case can be distinguished from this case in that in the instant case the defendant was in possession in the beginning through a lease with his father; that when the plaintiff purchased the property, the defendant remained in possession through a lease with the plaintiff; that he thereafter retained possession through a second lease with the plaintiff; and that on the termination of the second lease, the plaintiff initiated this action for unlawful entry and detainer. Although the defendant is required to pay four per cent interest on the unpaid principal on a contract which could conceivably run for eighteen years, we find this insufficient to create an inference that the defendant was to have possession prior to making payment in full of the purchase price. At the commencement of the action the plaintiff was entitled to possession, but prior to the entry of the judgment the defendant tendered the full purchase price and, in so doing, fully performed the contract. He thereby became entitled to share in the possession of the property as an equitable owner of an undivided one-half interest in the property. The fourth contention of the appellant Olson is that the option agreement was terminated on November 10, 1959, when the defendant Melvin Brodell joined in a deed conveying the property in dispute to the plaintiff. In this connection we note the argument made by the plaintiff's attorney to the trial court when a copy of the deed was offered in evidence, as follows: Our view of this matter is that the reference in the second lease, which was dated April 12, 1960, to an option to buy the property indicates that both parties recognized the option of January 29, 1957, to be in effect at that time. The fifth contention of the appellant Olson is that the court attempted to make a new contract when it found that the provisions of the contract included a prepayment clause permitting the payment of the entire purchase price. *178 As the contract, indicated by the option agreement, provided that the payment should be made "on or before November 1 of each year," we find that the trial court properly construed the contract to permit prepayment. See Kikindal v. Mitchell, 14 Fed.Cas. 468 (No. 7763) (C.C.D. Ind. 1841); Henry v. Lane, Tex., 128 F. 243, 252, 62 C.C.A. 625, citing Kikindal v. Mitchell. The sixth contention made by the appellant Olson is that the option agreement is not assignable. Our view is that when the defendant Melvin Brodell exercised his option to purchase, the option became a contract to purchase. A contract of purchase is assignable unless there is a specific provision in the contract prohibiting assignment. Semmler v. Beulah Coal Mining Co., 48 N.D. 1011, 188 N.W. 310. The last contention of the appellant Olson is that the court erred in denying the appellant's motion to amend the complaint to include a claim for damages arising out of the defendant Melvin Brodell's possession of the premises beyond the term of the lease. Rule 15(a) of the North Dakota Rules of Civil Procedure reads as follows: This rule superseded Section 2807-37 of the North Dakota Revised Code of 1943, which read as follows: There appears to be no material difference between Rule 15(a) and the statute which it superseded. In a case decided since the adoption of Rule 15(a), this court said: We therefore conclude that the adoption of Rule 15(a) did not alter the long-established rule of this court that a motion to amend a pleading is addressed to the sound discretion of the trial court, and its order granting or denying such motion will not be disturbed on appeal except for an abuse of discretion. If the appellant is entitled to damages in the instant case, he is not prejudiced by the trial court's ruling, as he may institute another action in connection therewith. Under the facts of this case we find no abuse of discretion in the trial court's denial of the motion to amend. The judgment of dismissal of the plaintiff's action was therefore proper. We now turn to a discussion of the appeal of the defendant Jerry Brodell from the order appointing a receiver. In this connection we must refer to the affidavits filed with the trial court in support of and in opposition to the appointment of a receiver. The pertinent parts of the affidavit in support of the appointment of a receiver read as follows: The pertinent parts of the affidavit in opposition to the appointment of a receiver read as follows: The affidavits are in conflict on the question of solvency. The defendant Jerry Brodell admits that he has excluded the plaintiff from nine hundred acres of the land. Two subsections of our statute relating to the appointment of a receiver seem pertinent in this case: In this case either or both sections could apply to permit appointment of a receiver. In the syllabus of a case decided in 1954, involving the appointment of a receiver, this court said: The facts surrounding the appointment of the receiver in this case bring it within the said rule. In the same opinion this court further said: We are agreed that it cannot be said upon the record before us that the trial court abused its discretion in appointing a receiver. The judgment dismissing the action in unlawful entry and detainer and the order appointing a receiver are both affirmed for the reasons stated in this opinion. MORRIS, C. J., and STRUTZ, TEIGEN and BURKE, JJ., concur.