Court Opinion

ID: 7171499
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:26:54.927376+00
Date Added: 2024-06-11T16:15:44.706591
License: Public Domain

On Rehearing.
DAWKINS, J.
It has been strenuously urged on rehearing that we were in error in allowing the defendant the benefit of the release clause contained in the deed from Wad-dell to it; the main argument being that, in order to avail itself of this stipulation, payments should have been made for the express purpose of a release and in anticipation of the maturity of the notes representing the purchase price.
A familiar rule of interpretation requires that ambiguous or doubtful language in a contract must be construed most strongly against him who has obligated himself. R. O. 3957. It is true that, as to the obligation to pay the purchase price, the defendant was the debtor, and any ■ doubt as to time and manner of payment should be construed against it, hut with respect to the release of the lands from the operation of the mortgage the vendor or holder of the notes was the ob-ligor ; and to hold that defendant could not *311require the release, as stipulated in the deed, except by making payments in advance of the maturity of the notes (after paying $12,600 upon the note due December 1, 1914), would not only be giving a construction most favorable to plaintiff, the obligor, but would be to write into the contract a condition which the parties themselves did not see fit to impose.
[7] Contrary to the view expressed by the lower court that the purpose of this stipulation was to enable the vendee to give clear titles in case of sale, and not for its benefit, we think that, when the deed recites that “the vendor or legal holder or holders * * * will release in tracts of not less than than 2,500 acres in a compact body to the purchaser hereof or to its assigns,” it means what it says, and defendant had the right to have the property in the proportions stipulated released to itself. We also think that, when defendant performed sufficient of the terms of the agreement to entitle it to a release, the right became a vested one which could not be, and was not, forfeited, either by the failure to make the demand or by the failure to pay the notes subsequently maturing. To the extent that payments were made and the right to a release had accrued the undertaking became an executed contract on the part of defendant, and entitled it to demand performance of that part which had accrued in its favor. Of course, as long as defendant had not performed the obligation or condition which was necessary to a release, plaintiff held for its security the entire property, and, according to the mortgage, a failure to pay any one of the notes matured all the rest; but, when those obligations were performed, plaintiff’s mortgage rights were reduced pro tanto, if defendant saw fit to exact the release. Plaintiff had the right, or its transferor did, in making the sale, to require that all of the land remain mortgaged until the final payment of the purchase price; but, for reasons which were mutually satisfactory, it saw fit to waive or modify this right in the manner indicated, and must abide the result.
[8] It is argued that, inasmuch as no releases had been demanded for payments made prior to plaintiff’s acquisition of the notes sued upon, it was entitled to rely upon the security which the record showed them to possess. However, this loses sight of the fact, not only that the very mortgage upon which it relies for the right to foreclos'e contained the stipulation for releases in favor of defendant (and, claiming the benefits, it must recognize the obligations), but in the very act, dated December 31, 1913, by which plaintiff acquired these notes as collateral security, it is recited that all of the notes maturing prior to that time had been paid, and upon which defendant had the right to releases when the condition necessary to obtain them had been performed. It also held the note due December 1, 1914, upon which it was necessary to make the payment of $12,600 before the first release could be had, and that was paid. We think plaintiff’s position is no better than Waddell’s would have been had he continued to hold the notes.
We were in error in our former decree in not allowing interest from June 1, 1916, instead of from June 1, 1916.
Por the reasons assigned, our former decree is amended so as to allow the stipulated interest from June ,1, 1915, and in all other respects the said decree is reinstated and made the final judgment of this court.