Opinion ID: 900934
Heading Depth: 1
Heading Rank: 4

Heading: business account

Text: Powell further testified that: The fact of the matter is that I wrote on the checks what they were for. They knew by living in this small community that Donovan didn't have anything to do with the apartments anymore, had open and notorious possession of the apartments. The checks admitted as evidence support this testimony. The check written in February 1999 to cover contract payments for January and February contained the notation, Donovan contract. The second check written in March 1999 contained the notation, March Donovan Apts. The third check written in May 1999 to cover payments for April and May contained the notation, Apr/May. The fourth check written in June of 1999 contained the notation June 99. The sixth check written in August of 1999 contained the notation, Aug 99. None of the checks gave any indication in any fashion that the payments on the contract were being issued by Powell on Donovan's behalf rather than in her own right. Thus, they provided Brown with no reasonable basis to form such a belief. [¶ 15.] If the checks alone were insufficient to make Browns aware of the assignment of the contract for deed and Powell's assumption of some sort of interest in the realty, Powell also showed that she had an exchange with Brown's counsel in June 1999 about insurance coverage on the property. In response to counsel's inquiry, Powell provided him with copies of insurance policy declaration pages showing the property was insured. Some of the declaration pages named both Powell and Donovan as insureds. Powell also indicated in her testimony that she orally informed counsel at that time that she had the property. [¶ 16.] In addition to the checks and the insurance policies, Powell also presented extensive evidence and testimony concerning her payment of various debts against the property including utilities, taxes and insurance. Powell testified that her payment of these debts and her possession of the property and other efforts to improve it and clean it up were open and notorious in the small community. [¶ 17.] In conjunction with the foregoing evidence, this Court must also remain mindful that foreclosure is an equitable remedy and, therefore, various equitable principles are important to our review in this matter. See Alma Group, L.L.C. v. Weiss, 2000 SD 108, ¶ 12, 616 N.W.2d 96, 99 (foreclosure of a mortgage is an equitable action). In that regard, [t]his Court has emphasized on numerous occasions that the law `abhors a forfeiture.' `Forfeitures are considered odious in the law and are not favored by the courts.' Bozied v. City of Brookings, 2001 SD 150, ¶ 24, 638 N.W.2d 264, 273 (citations omitted). Because forfeitures of land sale contracts are highly disfavored by the law, courts are generally quick to find a waiver of conditions alleged as a basis for a claim of breach. Cochran v. Grebe, 578 S.W.2d 351, 354 (Mo.Ct.App.1979)(forfeitures are highly disfavored by the law and the courts are therefore quick to find a waiver or estoppel in a case of this sort). In this particular instance, the condition is a covenant against assignment of the contract. Such conditions are also looked upon with disfavor. See Smith, 88 S.D. at 32-33, 214 N.W.2d at 791 (though this Court will at times enforce covenants in leases against assignment, such restraints against alienation are looked upon with disfavor and are strictly construed against the lessor). [¶ 18.] Equity also favors those with a substantial investment in a land sale contract. See Miller v. Radtke, 230 Neb. 561, 432 N.W.2d 542, 547 (1988)(ejectment of vendee may be granted as remedy for violating terms of a land contract only where the equities justify such disposition, where property is of less value than the contract price and where such procedure does not offend against justice and equity). Accord Poommipanit v. Sloan, 1 Neb.App. 1132, 510 N.W.2d 542 (1993). As held by the Nebraska Supreme Court as a corollary to these principles, [s]trict foreclosure will be decreed only under peculiar and special circumstances where the purchaser does not have a substantial equity in the property. Riffey v. Schulke, 193 Neb. 317, 227 N.W.2d 4, 6 (1975). [¶ 19.] Here, the trial court specifically found that it would be inequitable to require Powell to forfeit the contract and this finding finds ample support in the testimony and evidence submitted by Powell concerning the extent of her investment in the property. As Powell herself summarized that evidence: To date there's been $22,585 just on the contract. It's a $30,000 contract. Of course, that includes interest. The payoff on this thing is around 12,000 at this point but the fact of the matter is they've taken $22,585 in monthly payments. And I paid myself $8,489.32, if we count the check, you know, that I wrote back in November for $1,200 plus I've paidand they've stipulated to thisI've paid one, two, $3,000 in taxes back and current. My client informed me when I took this thing over that the back taxes were paid. I've bettered the Plaintiffs' position in this case. I took a Contract for Deed that was in serious default that they hadn't done one thing on. They've accepted late payments, they let taxes go by. I don't know what their situation was with prior insurance because I think it was insured through Browns but there were numerous defaults in that contract when I took it over and I've gone in and I've cured all the defaults.    In addition to the thousands of dollars in taxes and thousands of dollars of payments that I've tendered to Browns, I've also paid thousands of dollars in back utility bills, water bills, garbage bills, things that were sitting on the books when I took this over.    The Plaintiff has not been damaged. In fact, if I wouldn't have come into this thing they would have gotten stuck with two years of back taxes. Against these facts, Browns could only argue that they did not want to do business with Powell. As found by the trial court, the equities clearly favor Powell's position in this matter. [¶ 20.] Based upon the foregoing evidence and principles of equity, we hold that the trial court was not clearly erroneous in finding that Browns were aware of the assignment of the contract for deed to Powell. Nor was it clearly erroneous in finding that Browns accepted payments on the contract from Powell with knowledge of the assignment and that they thereby waived enforcement of the contract's nonassignability clause. [¶ 21.] Affirmed. [¶ 22.] SABERS and KONENKAMP, Justices, concur.