Irish v. Lundin , 28 Neb. 84 ( 1889 )

Maxwell, J.

This action was brought in the district- court of Douglas county by the plaintiff against the defendant to foreclose a mechanic’s lien.

On the trial of the cause the court found the issues in favor of the defendant Wilson and dismissed the action.

The petition is substantially in the ordinary form.

Maria Wilson filed a petition to intervene, which being sustained, she filed an answer, in which, after setting out her purchase of the lot in question, she alleges: “That on, to-wit, the thirty-first day of January, A. D. 1888, George E. Gibson, the agent of said defendant Maria Wilson, at the county and state aforesaid, did, as agent of said last named defendant, make an oral, verbal contract to and with said defendant N. M. Lundin for the sale of all her right, title, and interest in said premises to said N. M. Lundin; that such contract was oral and rested entii’ely in oral agreement; that no note or memorandum thereof was ever reduced to writing or signed by any one; that said contract could not and did not vest or convey to said N. M. Lundin any right, title, or interest in or to said premises; that said N. M. Lundin did not at any time have possession or own any right, title, or interest in or to the said premises, and that said N. M. Lundin has not now any right, title, or interest in or to said premises.

“ Said defendant Maria Wilson, further answering, says that in and by the terms of said oral and void contract so entered into by said George E. Gibson, her agent, and said N. M. Lundin, it was agreed that the said contract should become binding upon the parties thereto only in case said N. M. Lundin should, in ninety days from said last named date, make a certain payment to said George E. Gibson as the said agent of this defendant; that by the said contract it was provided that if said N. M. Lundin should fail, neglect, or refuse to make such payment in said time, then and in that case he was not to acquire or have any right, title, or interest in or to said premises. This defendant says that the said N. M. Lundin did fail, neglect, and refuse, and has wholly failed, neglected, and refused to make such payment in said time, or at any time thereafter; that said payment has not been made nor has any part thereof been paid, but that on the contrary said defendant N. 'M. Lundin has absconded and left the county and state aforesaid; and said defendant says that said defendant N. M. Lundin did not and has not acquired any right, title, or interest in or to said premises by said contract.”

She also denies that she, or her agent, delivered possession of said lot to Lundin.

The testimony tends to show that about Januazy 31st, 1888, one George E. Gibson, az’eal estate agent in Omaha, and duly authorized to sell the lot in question, negotiated a sale of the same to the defendant N. M. Lundin for the sum of $800; ozie-fourth of the sum was paid at the time of the purchase and the remainder to be paid in ninety days from that date.

To obtaizz the $200 part payment, Lundin and one Roos executed a note to Gibson, secured by a mortgage ozi real estate owned by them, and he (Gibson) either loaned them the money or obtained it on those securities from a loan company for which he was agent. The question how the money was procured does not seem to enter into. the case, as it was izz fact obtained and paid upon the contz-act for the purchase of the lot. This money has been retained, and it is claimed by the seller that Lundin had a mere option to purchase and upon his failing'to pay the remaining $600 the payment already made was forfeited and also all of Lundin’s rights therein.

The attorneys for Wilson contend that this being 'im oral contract, and Lundin not having possession of the lot, the contract cannot be enforced, and a large part of their brief is taken up with the citation of authorities to sustain that proposition.

As a matter of fact, however, Lundin did immediately enter into possession of the lot in question and erected a house thereon of the value of $700 or $800 and the mechanics’ liens in suit were created by the erection of said building. The work was nearly completed before the expiration of the ninety days from January 31st, 1888. Lundin seems to have left the state and has failed to pay the balance due on the lot or to the mechanics and material men for the erection of the house. This house is now in the possession of Wilson. She seems to claim the same free from any liens, etc. It is gravely urged that for the privilege of an option on the purchase of a lot more than two miles north of the post-office in the city of Omaha, and for which, so far as appears, the full value was agreed to be paid, Lundin actually paid $200 for the privilege of purchasing the same in ninety days. It is not claimed that he had any property adjoining or near that place that would be enhanced in value by the purchase. The sale was made, therefore, we infer, at the full value of the lot and the $200 paid as one fourth of the consideration therefor. To that extent, therefore, Lundin has an interest in the lot.

Forfeitures are odious in law. (Dickenson v. State, 20 Neb., 81; Estabrook v. Hughes, 8 Id., 501; Hibbeler v. Gutheart, 12 Id., 530.) In the latter case it is said, after showing that the lessee was in default: “It was evidently the intention of the legislature, in passing the law containing these provisions, to hold the purchasers and lessees of the school lands to the strict performance of the terms of their obligations to the state. And while by the terms of the law all delinquents were limited to thirty days from the receipt of notice of such delinquency in which to remove the same by payment, yet we think it was the policy of the law to allow them to do so at any time before the commencement of suit to dispossess them by the prosecuting attorney, as provided for in the section. While the lessee is in possession, and not proceeded against in the manner provided by law, he is presumed to have rights, and these rights could only be cut off by the method pointed out in the name of the people, and not by proceedings moved by and in the name of an individual designing to become the purchaser or lessee, or otherwise. While the state can have no preferences as between different citizens, yet, as the law does not favor forfeitures, it will always favor the removal of delinquencies, on the part of those already its lessees and in possession, rather than the forfeiture of their rights to make room for others.” This we regard as a correct statement of the law so far as it applies to a purchaser of real estate in possession, where he has made a considerable payment on the land and has a subsisting interest therein.

While in particular cases, by reason of peculiar circumstances, it is necessary to sustain a forfeiture, yet where any considerable portion of the purchase price of real estate has been paid and possession taken under the contract, the purchaser has an equity in the premises to the extent of the money paid by him, and it is gross injustice to permit the seller to retain this money and also the property free from any claim of such purchaser; and particularly is this true where, by reason of such forfeiture, creditors of the purchaser will be deprived of the amount due them. In an ordinary case this cannot be permitted. The seller is entitled to the price of his property as agreed upon, and the purchaser, upon the payment of such price, is entitled to the remainder. If, however, lawful liens are filed on the interest of such purchaser, as in this case, they must first be satisfied out of the amount due the purchaser before any part of the surplus will be paid to him. The judgment of the district court is reversed, the property is directed to be sold as upon execution, and out of the proceeds of said sale shall be paid, first, the amount due upon the contract of purchase, with lawful interest; and second, the several liens of the parties to this action are to be paid— the surplus, if any, to be paid to Lundin. In case the sum remaining after paying the amount due on the contract of purchase is not sufficient to pay all the lien holders in full, then said sum is to be applied pro rata among said lien-holders.

Judgment accordingly.

The other judges concur.