Court Opinion

ID: 9552809
Source: CourtListenerOpinion
Date Created: 2023-08-07 19:17:20.724468+00
Date Added: 2024-06-11T15:29:04.028790
License: Public Domain

MR. JUSTICE ANGSTMAN
(dissenting) :
Plaintiffs brought this action to reform a contract for the sale of real and personal property and for its cancellation.
Findings of fact, conclusions of law and judgment were entered in favor of plaintiffs and against defendants. At the outset it should be noted that we have not been furnished with a bill of exceptions containing a transcript of the evidence. The questions presented on the appeal are those which appear from the judgment roll alone. They have to do with alleged defects in the pleadings. The majority opinion reverses the trial court on *83matters not presented to the trial court and not suggested in the pleadings or briefs of counsel. The majority opinion suggests that there is a difference between a voluntary and an involuntary assignment of licenses.
That is beside the point here because if defendants agreed to return the licenses to plaintiffs in case they defaulted under their contract as the court found, then their obligation to return the licenses to plaintiffs with the other property became in effect a voluntary assignment because they voluntarily assumed that obligation.
The majority opinion stresses the fact that the licenses did not belong to all the plaintiffs but only to one of them. I think this is wholly immaterial and counsel evidently so considered it because no question was raised on this score.
The rights of the plaintiffs between themselves or their right to sell liquor collectively when the licenses were issued only in the name of one of them was not involved in the case. No such issue was presented in the pleadings and counsel make no argument on this point. I think a complete answer to this contention is that if defendants acquired the licenses as a part of the purchase price of the property involved, as the court found they did, then upon default in the contract the licenses should be returned to the plaintiffs, or H. F. Green. In other words, all that defendants acquired by the contract should be returned upon their default in performing the terms of the contract. The courts should not permit defendants to hold part of the property on the supposition that plaintiffs may have been guilty of some misconduct in holding the license in the name of one plaintiff for the benefit of all. If there is any merit in the claim asserted in the majority opinion that six persons cannot sell liquor under a license issued to one person, then that question should be settled in some proceeding where that issue is tendered by the pleadings and where the parties have notice and opportunity to be heard, and even if true it adds nothing to defendants’ rights.
I have given consideration to the points raised by appellants *84in their brief to see if I could concur in the result reached by the majority but I find no merit in any of those contentions.
The first point urged is that the court erred in denying defendants’ motion to separately state and number the causes of action set out in the complaint. Defendants contend that the complaint contains three causes of action which should be separately stated and numbered by reason of R. C. M. 1947, sec, 93-3203. The fallacy of this contention rests on the fact that defendants fail to recognize the difference between a cause of action and the relief or remedy sought. There is here but one cause of action though different forms of relief were asked.
After pointing out this distinction Mr. Pomeroy on Code Remedies, Fifth Edition, sec. 353, p. 541, has this to say: “Actions brought to reform instruments in writing, such as policies of insurance and other contracts, mortgages, deeds of conveyance, and the like, and to enforce the same as reformed by judgments for the recovery of the money due on the contracts, or for the foreclosure of the mortgages, or for the recovery of possession of the land conveyed by the deeds, fall within the same general principle. One cause of action only is stated in such eases, however various may be the reliefs demanded and granted.”
The rule is stated similarly in 45 Am. Jur., “Reformation of Instruments,” sec. 91, p. 641. And see to the same effect: Hutchinson v. Ainsworth, 73 Cal. 452, 15 Pac. 82, 2 Am. St. Rep. 823; Horton v. Winbigler, 175 Cal. 149, 165 Pac. 423; Depuy v. Selby, 76 Okl. 307, 185 Pac. 107.
The court did not err in denying defendants’ motion to separately state and number the supposed causes of action.
The next point urged is that the court erred in overruling defendants’ demurrer to the complaint upon the ground that there “is a defect or nonjoinder in parties defendant in this, to-wit, that it appears from said complaint that Herman G. Baehler and Alice V. Baehler are necessary and proper parties defendants in said action, and that a complete determination of the controversy cannot be had without their- presence. ’ ’
*85The complaint sets out as an exhibit the contract for the sale of the property involved which shows on its face that the purchasers were defendants Zeiters and Herman G. and Alice Y. Baehler.
In the answer it is alleged that Herman G. and Alice Y. Baehler after default under the contract of sale gave to plaintiffs a deed covering the property in question, a copy of which deed is attached to the answer.
“Where one has parted with all the interest he ever had in the subject matter of the controversy, so that he is no longer interested in the result, he is not a necessary party, unless relief is sought against him. * * *” 30 C. J. S., Equity, see. 135f, page 567, and to the same effect is sec. 152,- page 591.
And though the complaint on its face shows a defect of parties the objection thereto is waived where defendant answers in such a way as to show that a party necessary under the complaint is not in fact an indispensable or necessary party. 30 C. J. S., Equity, sec. 155, page 597, n. 42.
The circumstances presented here, so far as this point is concerned, call for application of R. C. M. 1947, sec. 93-3909, reading : ‘ ‘ The court must, in every stage of an action, disregard any error or defect in the .pleadings or proceedings which does not affect the substantial rights of the parties, and no judgment shall be reversed or affected by reason of such error or defect. ’ ’
It should be noted that the court found that the beer and liquor licenses, — the subject matter of the reformation, stand in the name of the defendants.
Since the evidence is not before us we must assume that the evidence supports this finding. The court properly overruled the demurrer on the ground of the alleged defect or non-joinder of parties.
The next point urged by defendants is that the complaint does not state facts sufficient to show mutual mistake justifying reformation. The majority opinion contains sufficient of the allegations of the complaint to show that the complaint states facts sufficient to constitute a cause of action for reformation *86on the ground of .mutual mistake under R. C. M. 1947, section 17-901, and within the requirements specified in Thielbar Realties, Inc., v. National Union Fire Ins. Co., 91 Mont. 525, 9 Pac. (2d) 469, and see Brubaker v. D’Orazi, 120 Mont. 22, 179 Pac. (2d) 538, which involved reformation relative- to a liquor license.
If the allegations of the complaint be true, as we must assume under the circumstances of this ease, then the reformation does not amount to the making of a new contract for the parties which of course the court may not do. Comerford v. United States Fidelity & Guaranty Co., 59 Mont. 243, 196 Pac. 984. It simply gives effect to what was actually agreed upon by the parties but which was inadvertently omitted from the writing.
Defendants contend that the complaint is insufficient because there is no allegation of any consideration for the agreement to reacquire the ownership and possession of the licenses upon default under the contract. This argument overlooks the fact that there is but one contract and one consideration for the entire contract. There was no separate consideration, for the assignment of the licenses. Compare Parchen v. Chessman, 49 Mont. 326, 142 Pac. 631, 146 Pac. 469, Ann. Cas. 1916A, 681.
Contention is made bj^ defendants that the licenses are personal property and with this I agree. Stallinger v. Goss, 121 Mont. 437, 193 Pac. (2d) 810. They contend that the complaint is insufficient in that it shows that at most if the contract is reformed plaintiffs have a lien upon the licenses as security for the balance due on the contract of purchase and that upon default of defendants they would be forfeited and that such an agreement is void under R. C. M. 1947, sec. 45-112, reading: “All contracts for the forfeiture of property subject to a lien, in satisfaction of the obligation secured thereby, and all contracts in restraint of the right of redemption from a lien, are void.” I fail to see how this section has anything to do with the question before us.
The court found that part of the personal property which defendants were buying from plaintiffs was the liquor and beer *87licenses. If the payments were met by defendants then all would be well. If they defaulted then plaintiffs were to have all the property returned to them upon their giving notice of cancellation of the contract. The complaint is not insufficient on this account.
The next contention of defendants is that the contract of purchase was cancelled before the suit was brought for reformation and that there was nothing left to reform at the time the action was commenced.
The contract provided that in case of default on the part of the purchasers the sellers at their option were given the privilege of cancelling the contrast by giving thirty days’ notice in writing, which notice should designate the breach complained of and if the default be in the payment of money the notice shall contain the amount necessary to cure the breach and if it is not cured in thirty days the property as well as all payments made shall be the property of the sellers.
Under the contract the purchasers ’were to pay $2,500 principal and accrued interest on September 15, 1947. This they failed to do. Plaintiffs on September 22d notified defendants of their default and demanded the payment of $2,500 with interest on or before thirty days after receipt of the notice. ■
Defendants failed to make the payments within the thirty days. The court found that after service of the notice defendants negotiated with plaintiffs to work out a proposition whereby defendants would be the sole proprietors of the business conducted at the Corral Club and represented to plaintiffs that they would be in a better position to take care of the contract payments if plaintiffs bought out the Baehlers, so that defendants could obtain all of the revenue from the operation of the business; that as a result plaintiffs did purchase the interest of the Baehlers for $900; that defendants thereupon remained in possession of the property and the licenses following the expiration of the thirty days from the date of receipt of the notice; that plaintiffs relied upon the ability of defendants to fulfill the terms of the contract after they purchased the Baehler’s interest. *88The court also found that on February 2, 1948, plaintiffs again served written notice on defendants of their default but specified the amount due as $17,279.79 which was many thousand dollars in excess of the amount of delinquencies; that the mistake in the amount was due to inadvertence in figuring; that defendants ignored the notice, remained in possession, continued to transact business and received the revenues therefrom.
On March 10, 1948, plaintiffs served another notice by registered mail which was received by defendants on March 18th, which specified the correct amount then due. It contained this paragraph: “You are further notified under the provisions above quoted that this is notice likewise that no further notice of cancellation and forfeiture shall be given if the breach is not cured, but that the parties shall, following the expiration of thirty (30) days, sue to cancel said contract and forfeit the same. ’ ’
As above pointed out the court found that defendants after they received the first notice induced plaintiffs to purchase the interest of the Baehlers, -and thus in legal effect to waive the benefits derived by giving the notice and defendants are estopped from contending that the contract was cancelled. It was of course at an end so far as the Baehlers were concerned but of full force and effect as to defendants.
The second notice was obviously defective and the defendants treated it as a nullity by continuing in possession and otherwise ignoring it. The fact that an ineffectual notice was given does not deprive the plaintiffs of the benefit derived from the giving of a good notice. Huffine v. Lincoln, 87 Mont. 267, 287 Pac. 629. But defendants contend that after the lapse of 30 days from the giving of the third notice the contract was cancelled and there was nothing left to reform.
The third notice as above pointed out specified that it would be followed by an action. The provision in this contract giving plaintiffs the right to terminate the contract on 30 days’ notice was for the benefit of the plaintiffs which they had the right to waive. Fratt v. Daniel-Jones Co., 47 Mont. 487, 133 Pac. 700. And see, Hammond-Dodson Co. v. Slattery, 67 Mont. 489, 216 *89Pac. 323. Plaintiffs were not bound to pursue the remedy mentioned in the contract for its cancellation. They were privileged to pursue any remedy which the law affords in addition to that provided in the contract where as here the remedy provided in the contract was not declared to be exclusive. White v. Jewett, 106 Mont. 416, 78 Pac. (2d) 85.
Plaintiffs had the right to draw the notice in such form as to keep the contract alive for the purpose of bringing action to reform it after the failure of defendants to cure the default under it.
I have considered the other questions urged by defendants but I find no basis for disturbing the judgment.
I have considered the ease, as did counsel for the parties, as if reformation of the contract was necessary in order for plaintiffs to reacquire the liquor licenses.
As a matter of law it was not necessary to reform the contract.
Since this case was tried in the district court this court in the case of State ex rel. Jester v. Paige et al., 123 Mont. 301, 213 Pac. (2d) 441, Mr. Justice Preebourn and I dissenting, held that liquor licenses are applicable only to the premises in respect to which they are issued and may not be transferred to any other premises.
Hence any other conclusion than that reached by the trial court would permit the defendants to retain liquor licenses which would be valueless to them since they are applicable only to the premises now owned by plaintiffs. The effect of the holding in the Jester case is that liquor licenses attach to the premises and pass to successive owners of the property subject to the consent of the liquor control board as to the fitness of the person to become licensee.
The conclusion reached by the trial court was right and the conclusion reached by the majority leaves a result “which not enriches” the defendants but makes plaintiffs “poor indeed” since the court found on presumptively sufficient evidence that *90the premises involved are practically valueless to plaintiffs without the licenses in question.
Rehearing denied June 9, 1950.
I do not find that the court committed any error, and in consequence I think the judgment should be affirmed.