Turner v. Pierce

1. CONTRACTS. Land Contract — Anticipated payment and conveyance of part of the land; effect as to subsequent installments.— Failure of title as to pa/rt of lands; effect upon installments of purchase price. 2. Pleadin® and Practice. Strict foreclosure of land contract.— Supplemental complaint for personal demands, arising after suit brought.— Effect of order, made upon consent, permitting such complaint to be filed. 1. Plaintiff, in 1863, gave defendant a written contract for tlie sale and conveyance of certain lands, to lie paid for in installments of $1,000 each, on the 1st of August, in 1865, and the four following years, and $600 on the 1st of August, 1870; interest on the whole amount unpaid to become due on the 1st of August of each of said years. Payment oí $1,000 cash is also acknowledged in the contract, hut the same was not in fact so paid, but defendant’s note therefor given, payable in October, 1864, with interest, and secured by mortgage. Defendant was to be allowed to pay any installments before they became due; and, on payment of the two falling due in 1865 and 1866, plaintiff was to convey to him the whole of said lands, taking back a mortgage thereof for the unpaid balance. In August, 1864, defendant paid $4,000 (partly in money, partly by discharging certain incum-brances on the land, and partly by note and mortgage), and his note and mortgage maturing in October following were surrendered and cancelled; and plaintiff receipted for the $4,000 as “ paid upon the contract;” and it does not appear that there was any agreement to modify the original contract further than it might be necessarily modified by said transactions. Defendant having made no further payments either of principal or interest, this action was commenced for a strict foreclosure of said contract, in March, 1866. EetA, that the $4,000 must be applied on the payments first becoming due, and that there was nothing due on the contract when the action was brought. 2. It was error, therefore, to treat the $4,000 as simply a payment in' full for the lands then conveyed to defendant, and to regard the remainder of the original purchase price for the whole of the lands named in the contract as payable in proportional installments in each of the several years there specified. 3. The title to a part of the lands embraced in said contract (and not conveyed in 1864) having failed, each installment should be reduced in the proportion that the value of such part ($1,832) bears to the value of the whole of said lands ($6,600); and defendant was entitled to have the $4,000 applied to the payment of the installments first becoming due at such decreased rates; so that nothing became due thereon until August 1st, 1869. 4. A supplemental complaint was filed by consent in September, 1870, setting up claims against defendant (1) for moneys recovered and received by him for the value of improvements (largely made by plaintiff) on the lands to which plaintiff’s title had failed, and from which defendant was evicted; (2) for moneys paid by the proper owners to redeem said lands from the tax sales under which plaintiff claimed title thereto, which moneys defendant had demanded and received from the county clerk under color of said land contract; (3) for interest accrued in August, 1864, on the $1,000 note then surrendered, which interest (it is alleged) defendant then promised to pay. Eeld, fl.) That the matters set up in such supplemental complaint are not germane to the relief sought in the original complaint. (2.) That the suit for a strict foreclosure of the land contract having "been prematurely brought, the action cannot be retained on plaintiff's demand, for an accounting as to transactions connected with such contract, and set up by supplemental complaint. (3.) That perhaps, if defendant had asked for a final accounting as to all matters growing- out of said failure of title as to a part of the lands, and the ejectment suit therefor, and for a determination of the amount, if any, due on said contract, the action might have been retained for that purpose. (4.) That the mere fact that defendant, denying, by way of defense, that any part of the purchase price remained unpaid, asked for judgment that plaintiff convey to him the remainder of the lands embraced in the contract, will not justify a retaining of the action for an accounting between the parties. (5.) The fact that such amended and supplemental complaint was filed with defendant’s consent, was not a waiver of his right to object, by answer or demurrer, that, such complaint stated no cause of action. (6.) An order granting leave to file such complaint, being made upon consent, should not be treated as an adjudication binding upon the parties, as to the sufficiency of the pleading.

APPEAL from tbe Circuit Court for Dane County. On the 22d of October, 1863, tbe plaintiff, Daniel B. Turner, and Josiah Pierce, one of tbe defendants, entered into a written contract for tbe sale and conveyance of lands by tbe former to the latter. Tbe lands described in said contract are: tbe S. 1-2 of S. W. 1-4 of Sec. 11; tbe N. W. 1-4 of Sec. 14; tbe S. E. 1-4 of N. W. 1-4 and S. W. 1-4 of N. E. 1-4 of Sec. 10; and tbe N. E. 1-4 of tbe S. W. 1-4 of Sec. 21 — all in T. 9 N. of R. 9 E.; and also a certain tract described by metes and bounds in tbe N. E. 1-4 of Sec. 14 in tbe same town; tbe whole containing three hundred and thirty-one acres according to the government survey. The consideration for such sale and conveyance is stated to be tbe sum of $1,000, paid at that time, tbe receipt of which is acknowledged, and tbe further sum of $5,600, to be paid with interest as follows: $1,000, with interest on tbe whole sum unpaid, on tbe first day of August in each of tbe years 1865, 1866, 1867. 1868 and 1869; and tbe remaining $600, with interest thereon, August 1, 1870. Turner covenanted that, upon payment of the two installments becoming due in 1865 and 1866, he would convey to Pierce, by warranty deed, the lands above described, giving him a good title free of incumbrance; and he was then to receive a bond for the remainder of the purchase money, secured by a mortgage of the premises so to be conveyed. Pierce on his part covenanted to make the payments above mentioned, and to pay all taxes and assessments upon the land until the consideration was fully paid. The contract further states that the payment to become due August 1, 1865, is secured by a note and mortgage of even date with said contract, made by Pierce; that Pierce is to have possession of the premises on the 24th of October, 1863, and retain possession until default made by him upon his said covenants; that in case of such default, he shall have no claim on Turner for the money paid under the contract; and that he may make the payments above named on or before the times named, and shall only pay interest to the time of such payment. Two days after the execution of the contract, it was recorded; .and on the same day Pierce took possession of the lands therein described, and continued in possession until the time of the trial of the present action, except that he was evicted, in 1868, from the possession of an undivided three-fourths of the N. W. 1-4 of Sec. 14, as hereinafter stated. This action was brought in March, 1866, for a strict foreclosure of said contract. Afterwards, in August, 1870, by consent of parties, an “amended and supplemental complaint” was filed, and Pierce filed an answer thereto. The complaint sets out the contract in full, and avers: 1. That at the time such contract was made, plaintiff held and possessed the two tracts in section 10, therein described, by virtue of two certificates of sale made by the commissioners of school and university lands of this state, held by him in his own right, on which there was due the state only a' small amount, and which entitled him, on payment of that amount, to a patent from tbe commissioners vesting in lrim an absolute estate in fee simple in said lands; that plaintiff was tben seized of an absolute estate in fee simple in the lands situate in sections 11 and 21, and tbe tract in section 14 described by metes and bounds ; and that be claimed in good faitb to be tbe owner of tbe N. W. 1-4 of section 14, under certain tax deeds duly executed and recorded, and deeds to bimself from tbe grantees named in sucb tax deeds, and was at tbe time aforesaid, and for a long time previously bad been, in tbe actual adverse possession thereof, and bad made many valuable improvements tbereon; all of wbicb things were well known to Pierce when be entered into said contract. 2. That although in said contract plaintiff acknowledged tbe receipt of $1,000 as actually paid at tbe time of its execution, yet in fact be received from Pierce no money whatever upon said contract at that time, but instead thereof received Pierce's note for $1,000, bearing even date with said contract, payable in one year, with interest, and secured by a mortgage on other lands of Pierce, in Columbia county. 3. That about tbe 17th of August, 1864, Pierce and tbe plaintiff agreed upon a modification of said contract, whereby tbe plaintiff was tben presently to convey to Pierce tbe lands in sections 10 and 11, above mentioned, for tbe price of $4,000 out of tbe whole price named in tbe contract for all tbe land therein mentioned, said $4,000 to be tben and there partly paid and partly secured to be paid by Pierce; and tbe other lands mentioned in tbe contract were to remain subject to tbe terms thereof — tbe remainder of tbe whole purchase price of $6,600, and interest tbereon accumulated, less said $4,000, to remain as tbe price of said other lands, to be paid according to tbe contract; that accordingly, on said 17th of August, 1864, tbe plaintiff executed and delivered to Pierce a deed of conveyance of tbe S. half of tbe S.W. quarter of section 11, and also assigned' and transferred to Pierce tbe two certificates above mentioned for tbe lands in section 10, it being tben agreed that Pierce should assume to pay the state tbe amount due on said certificates ($182.34), wbicb amount should be treated by plaintiff: as a part of the $4,000 aforesaid; that Pierce paid plaintiff $2,000 in money, and discharged, at plaintiffs request, an indebtedness of plaintiff which was supposed to be an incum-brance on said lands, to the amount of $047.96, leaving a residue to be paid of said $4,000 amounting to $1,169.70, for which Pierce gave his note secured by a mortgage on the lands so conveyed and assigned to him; that thereupon plaintiff surrendered and satisfied the mortgage given by Pierce to secure the payment of $1,000 on the 1st of August, 1865, as above stated, and also surrendered to Pierce the note of the latter for the $1,000 described in the land contract as paid at the time of the execution thereof, and surrendered and cancelled the mortgage given to secure the same; that there had accumulated interest on said last named note, on said 17th of August, to the amount of $57.35 ; and that Pierce, as a part of the arrangement then made, promised to pay said sum of $57.35, but has never paid it, though often requested, and said sum, with interest thereon, is still due to plaintiff. After some further allegations, not material here, the complaint avers that on said 17th of August, 1864, the whole amount of the purchase price of the lands originally contracted to be sold by plaintiff to defendant, with interest, less the $4,000 aforesaid, was $2,978.58, which was to be paid according to the terms of said contract, with interest payable annually, but that no part thereof, either of principal or interest, has been paid. 4. The amended and supplemental complaint then sets up certain proceedings in' an action of ejectment against Pierce, commenced in December, 1865, wherein judgment was rendered in June, 1867, adjudging that each one of three plaintiffs in. that action was owner of an undivided fourth part of the N. W. quarter of sec. 14; and a subsequent recovery by P'ierce (in 1868) of a judgment against the plaintiffs in said-ejectment suit, for $1,500 for three fourths of the value of tbe permanent improvements put upon said land, less tbe value of tbe use and occupation between the dates of rendition of said judgments. It alleges, in substance, that of tbe improvements for which such recovery was bad, tbe greater part, viz., to tbe value of $1,425, was put upon the premises by tbe plaintiff; that be, said plaintiff, procured the attendance of witnesses, and employed counsel, at great expense, to try said issue for him in connection with Pierce; that tbe whole of said judgment for $1,500 was however paid to Pierce, who bad refused to pay over to plaintiff on demand said sum of $1,425, which is plaintiff’s just proportion thereof, and tbe same, with interest, is now justly due to plaintiff. It is further alleged that in December, 1865, the owners of the undivided three-fourths of said N. W. quarter of sec. 14, paid to the cleric of the board of supervisors the sum of $168.34, to redeem their interests from the tax sales upon which plaintiff’s claim of title was founded; and that in September, 1868, Pierce, without authority from the plaintiff, but under color of said land contract, demanded and received said sum from the cleric of said board, and applied the same to his own use, and has since refused to pay the same to plaintiff on demand. There are also like aver-ments as to one or two other small amounts paid as taxes on said N. W. quarter of sec. 14, and which plaintiff claims to recover from Pierce. The relief demanded is, that the said several sums due plaintiff upon said land contract, or collected and received by Pierce under color thereof, as aforesaid, may be adjudged to plaintiff, with interest; that all the right and title of defendants, etc., may be foreclosed in the one undivided fourth of said N. W. quarter of sec. 14, and in the parcel in the N. E. quarter of said section, and in the land in section 21; that said lands may be sold to pay the amount thus found to be due plaintiff, etc.; and that Pierce may be adjudged to pay any deficiency. Pierce's answer denies that anything is due the plaintiff on said contract, and alleges that on the 19th of August, 1864, he paid plaintiff. on said contract $4,000, and took bis receipt, wbicb is set out in hcec verba, and is- in the form “ Beceived of Josicih Pierce four thousand dollars to apply on land contract between him and me,” [describing it.] The answer further denies that at the time such payment was made, or at any other time, any uew contract was made, or any modification of the old one, but avers that at the time mentioned plaintiff could not give a deed of the N. W. quarter of sec. 14, because he had not tide thereto in fee simple, and therefore defendant would not take a deed of the whole of the lands mentioned in the contract, and give a mortgage back, as it was stipulated in said contract he might do; that at that time there was only $1,000 due plaintiff, and nothing would be due on said contract until August 1, 1865; and that by the payment of the $4,000 at that time defendant anticipated the payment to become due on the first of August in 1865,1866 and 1867. In reference to the ejectment suit against Pierce, mentioned in the complaint, the answer avers that the plaintiffs in that action recovered judgment against said Pierce for $979.55, damages for use and occupation of the premises there in dispute, and $89.60 costs, which was set off against the subsequent judgment for improvements mentioned in the complaint ; and that said ejectment suit was defended by Pierce, at the request of the present plaintiff, at an expense of $1,000, which is properly chargeable to the present plaintiff. The allegation that plaintiff made the greater part of the improvements for which recovery was had is denied ; and it is further alleged that the purchase price of the land, as agreed upon in said contract, was about $20 per acre ; that the 120 acres in the N. W. quarter of sec. 14, as to which plaintiff’s title had failed, was worth as much as any other portion of said lands; and that defendant is not indebted to plaintiff in any sum whatever. Prayer, that plaintiff be adjudged to convey to said defendant the undivided one-fourth of the N. W. quarter of sec. 14, and the land in sec. 21, described in the complaint, and that defendant have judgment for costs. The trial took place at the April term of said court, 1871. Defendant objected to the admission of any evidence under the complaint, on the ground that it did not state a cause of action; and after plaintiff’s evidence was in, moved for a nonsuit. The objection was overruled and the motion denied. The evidence was voluminous, and will be omitted. The court found, inter alia, 1. That the deed of the S. 1-2 of S.W. 1-4 of sec. 11, executed by plaintiff to defendant in August, 1864, acknowledged the receipt of $2,000 as the consideration thereof; that the $4,000 then paid and agreed and secured to be paid for the 160 acres of land in sections 10 and 11, then conveyed by deed and the assignment of school land certificates, was the value of said land relatively to the whole land described in the contract, and the whole consideration therein expressed, and the remaining sum of $2,600 was the relative value of the residue of said land, and this was so regarded by the parties at the time, and they both regarded said contract as continuing between them subject only to such modifications as the transactions then had between them would necessarily make ; that the receipt set forth in the answer was then executed as a part of the transaction; and that a proper construction of the instruments then executed (deed, assignment, mortgage and receipt), taken in connection with the surrounding facts, was, “ to eliminate the land thus conveyed, and the consideration therefor, from said contract, leaving it in other respects unmodified, and in force according to its terms, for the balance of said land and the remaining consideration therefor.” 2. That the title to an undivided three-fourths of the N. W. 1-4 of sec. 14, had failed, leaving subject to the contract the remaining undivided fourth part of said quarter section, and ten acres in sec. 21; that the value of said undivided one-fourth and of said ten acres, on the basis of the contract, was $767.30 ; that plaintiff was entitled to interest on that sum from the date of the contract, amounting to $404.07; that from the aggregate of these two sums defendant was entitled to deduct the taxed costs and other expenses paid by him in the ejectment suit and interest thereon since the rendition of the judgment in that suit (making an aggregate of $494.90); and that for the balance thus found due plaintiff on the contract ($676.74) he was entitled to a strict foreclosure thereof. 3. That plaintiff was also entitled to recover from defendant $57.55 of interest due on the $1,000 note surrendered in 1864, with interest on that sum from that date ; the sum of $1,346.25 for three-fourths of the value of improvements put by him on the N.W. 1-4 of sec. 14 (for which defendant recovered judgment in the ejectment suit), with interest thereon; and the sum of $186.60, redemption money demanded and received by defendant as alleged in the complaint, with interest; that from the aggregate of these items defendant was entitled to deduct $200 paid by him as expenses in the suit for the value of said improvements, with interest; and that plaintiff was entitled to a personal judgment against Pierce for the balance, to wit, the sum of $1,611.64. The court held, further, that the two causes of action so found, one legal and the other, equitable, were properly joined, or, if not, that the objection was waived by a failure to demur to the complaint for a misjoinder. Judgment of strict foreclosure of said land contract in case said sum of $676.74 should not be paid within three months ; and a personal judgment against Pierce for said sum of $1,611.64, etc., in accordance with said finding. The defendant Pierce filed exceptions to the finding, and appealed from the j udgment. argued, among other things, that payments made on a contract, if not especially applied by the parties, are applied by"the law itself to the payment of installments first falling due (Bobbins v. Lincoln, 12 Wis., 1; Broom’s Leg. Max., 512 [638] );-that the action on the contract was prematurely brought, and judgment should have been for the defendant (Cheatham v. Lewis, 3 Johns., 42; Bond v. Griffiths, 11 Pick., 130; Ilsley v. Jewett, 2 Met., 168; Svnft v. Crocker, 21 Pick, 241); that no part of the claims for which a personal judgment was rendered existed at the commencement of the action, unless it was the claim for $57 interest on the first installment of $1,000; that the court could have adjusted this matter in applying the $4,000 on the contract, especially as Pierce paid more interest at the time than was due, having paid on the 120 acres that were lost; and that this could have been done more appropriately than by adding a new and incongruous cause of action by supplemental complaint. Blawson v. Hngleharl, 34 Barb., 198; Wattson v. Thibou, 17 Abb. Pr. R., 184; McGullough v. Colby, 5 Bosw., 477; Hoffman v. Hoffman, 35 How. Pr. R., 384; Bobbins v. Wells, 26 id., 15. argued that the contract was “modified ” by the conveyance of a part of the land instead of and before the whole, and the payment of a part of the price before it was due; that the deed was an instrument of a higher nature, and, so far as it extended upon the contract, superseded it (Smith v. Higbee, 12 Yt., 113; Creigh v. Beelin, 1 W. & S., 83 ; Cronisier v. Civnister, id., 442; Haggerly v. Fagan, 2 Penn., 533); that as to the land conveyed and the consideration therefor, the conveyance was a part performance, necessarily modifying the contract (Selden v. Williams, 9 Watts, 9) ; and that the parties, by this transaction, made a designation of $4,000 as the price of the 160 acres in sections ten and eleven, and $2,600 as the price of the residue, the contract in other respects remaining unchanged. They further contended that the findings of fact and conclusions of law of the court below contained nothing to which the appellant could object.