Title: Kuhn v. Hamilton
Citation: 138 N.W.2d 604
Docket Number: 8247
State: north-dakota
Issuer: north-dakota Supreme Court
Date: November 29, 1965

138 N.W.2d 604 (1965) Paul KUHN, Plaintiff and Respondent, v. Echo HAMILTON, Lyle Spicer, Carl Spicer, Emil Bourgois, and all other persons unknown claiming any interest In, or lien or encumbrance upon the property described in the complaint, Defendants, Echo Hamilton, Defendant and Appellant. No. 8247. Supreme Court of North Dakota. November 29, 1965. *605 Rausch &amp; Chapman, Bismarck, for appellant. Kelsch &amp; Wise, Mandan, for respondent. *606 ERICKSTAD, Judge. This is an appeal by the defendant, Echo Hamilton, from a judgment for $814.99 ordered by the District Court of Morton County in favor of the plaintiff, Paul Kuhn. Trial de novo is demanded. This is the second time that these parties have been before the Supreme Court in connection with the same contract. In August 1960 Mr. Kuhn brought an action in district court to quiet title to certain real estate situated in Morton County. Mrs. Hamilton, in her answer, asked that the complaint be dismissed and that she be adjudged to be the owner of the property. The trial court quieted title in Mr. Kuhn and awarded him a judgment against Mrs. Hamilton for $1,320 for rent of the premises in question. In reversing the decision of the trial court and remanding the case, this court said: The part of the contract pertinent to this appeal reads as follows: On remand the balance of the principal of the purchase price of the real estate and the amount of the real estate taxes paid by Mr. Kuhn since the date of the contract were stipulated by the parties and paid by Mrs. Hamilton to Mr. Kuhn. The unpaid balance of the principal was computed to be $2,565; the taxes were $611.64. The issues remaining before the trial court were: whether Mrs. Hamilton was obligated to pay interest on the diminishing balances of the purchase price of the real estate; whether she was obligated to pay interest on the money paid for real estate taxes; and whether she was obligated to pay the cost of the insurance premiums on the store building plus interest on the money spent for the premiums from the date of the contract. The trial court found that $489.78 in interest accrued on the diminishing balances of the purchase price of the real estate, computed at 4 per cent per annum from January 2, 1959, to January 25, 1963, the date of payment of the principal; that $48.72 in interest accrued on the money paid for real estate taxes on the premises for the years 1959, 1960, and 1961, computed at 4 per cent per annum from January 1, 1960, to January 25, 1963, the date of payment of the principal sum of the taxes; and that insurance premiums on the premises for the years 1959, 1960, 1961, and 1962, and interest thereon at 4 per cent per annum amounted to $257.08, computed to September 10, 1964. Judgment was therefore ordered by the trial court in the sum of $795.58 plus interest thereon of $19.41, for a total judgment of $814.99. As that part of the contract relating to the option to purchase the real estate did not contain a reference to interest, we agree with the trial court that §§ 47-14-03 and 47-14-05, N.D.C.C., control. * * * * * * That being the case, unless the tender or the offer in open court made by Mrs. Hamilton stopped the running of the interest, Mr. Kuhn was entitled to receive interest on the diminishing balances of the purchase price of the real estate from the date the option was exercised to the date of the payment of the principal sum thereof. On May 27, 1960, Mrs. Hamilton tendered payment of $2,654.07 by mailing her check for that amount to Mr. Kuhn, contending that this was the balance due of the purchase price of $4,500, less $58.53 expended for repairs to the store building. The offer was rejected and the check was returned. On May 4, 1961, at the original trial of the quiet title action, Mrs. Hamilton offered in open court to pay the sum of $2,712.60. This was the same figure contained in the tender, without the deduction of $58.53 for repairs. In that connection, we note that neither the tender of the sum of $2,635.07 made on May 27, 1960, nor the offer to pay $2,712.60 made in open court on May 4, 1961, included interest from January 2, 1959, the date determined by this court on the first appeal to be that on which Mrs. Hamilton exercised *608 her option to purchase the property. Both merely included interest from May 1, 1959, rather than from January 2, 1959. The offer in open court did not include interest for the period between May 27, 1960, and May 4, 1961. The tender was not of the full obligation nor was the offer in court an offer to fully perform. Neither in the case of the tender nor in the case of the offer in court was a deposit of funds in a bank in the name of the creditor made. In this connection, the following sections of our code have been brought to our attention: * * * * * * Our view is that, as the tender was not of the full obligation and the offer in court was not an offer of full performance, the cited statutes do not apply. Section 9-12-18, N.D.C.C., at first reading seems to support the purchaser's argument that the tender or the offer in court stopped interest from running, as no objection was made to the mode of the offer. We have said, however, that an obligation is not extinguished by an offer of partial performance. See Schaff v. Kennelly, No. 11 of the syllabus, 61 N.W.2d 538 (N.D.1953). In this case the objection was not to the mode but to the amount of the offer. The amount being insufficient, it was not necessary to object to the mode. If the taxes were a proper obligation of the purchaser, and the purchaser now has apparently agreed that they were (as she has now paid the seller for money expended for the real estate taxes incurred during her possession of the premises), the amount of tax liability to the date of tender or offer, plus interest thereon, should have been included in the tender or the offer. As neither the tender nor the offer made in open court included any sum of money for the real estate taxes on the premises paid by Mr. Kuhn while Mrs. Hamilton was in possession or for interest on that *609 money, the tender and the offer in open court were that much less a tender of the full obligation or an offer of complete performance. The remaining question is whether the purchaser, Mrs. Hamilton, should be required to pay to the seller the cost of insuring the premises for the period she was in possession of the premises, plus interest thereon. Under the circumstances, in which it appears and is undisputed that both parties insured the premises against the same losses and in which the contract was silent as to insurance, it would be inequitable to penalize the purchaser by requiring her to pay the insurance costs twice. Having failed to provide for the payment of insurance in the contract (and our statutes being silent on the matter), the seller cannot now compel the purchaser to pay his insurance costs. The judgment of the trial court is therefore reversed in part, and the case is remanded with instructions to modify the judgment in conformity with this opinion by granting interest at the rate of 4 per cent per annum on the diminishing balances of the purchase price and on the money paid for the real estate taxes but denying recovery for the cost of the insurance premiums and interest thereon. BURKE, C. J., and TEIGEN, STRUTZ, and KNUDSON, JJ., concur.