Duluth Loan & Land Co. v. Klovdahl

Vanderburgh, J.

This action is brought for the recovery of the-second installment upon each of the certain land contracts set forth in the complaint, which bécame due on the 14th day of April, 1892. By the terms of the contract, the third and last installment would fall due on the 14th day of April, 1893. The plaintiff, vendor, covenanted therein that upon full performance by the defendant, including the payment of all the installments of the purchase money as agreed, it would convey the lands therein described to the defendant, party of the second part, by a good and sufficient deed, etc.

The fact that the lands are incumbered, or the title otherwise imperfect, when the contract is made, or at any time before the date fixed for its completion, will not, alone, constitute a defense to an action for the recovery of an installment falling due at any earlier date, or a ground for a rescission of the contract, since such incum-brance or other defect may be removed within the time fixed for the completion of the purchase. Townshend v. Goodfellow, 40 Minn. 314, (41 N. W. Rep. 1056.)

(Opinion published 56 N. W. Rep. 1119.) Application for reargument denied December 13, 1893.

If, at the time when, by the terms of the contract, plaintiff is required to execute a deed, the title is unmarketable, the defendant will not be required to take it, but may then rescind, and recover back the installments already paid, or may recoup or recover damages, as the nature of the case may warrant. Moore v. Williams, 115 N. Y. 586, (22 N. E. Rep. 233.)

In this instance, however, the defendant claims that it would be unsafe to make payment of the installment sued on, because of the incumbrances on the property, and the insolvency of the plaintiff, and insists that the court should interpose in his behalf for this reason.

It is enough, however, to say, in respect to the allegations in the answer, that they are entirely insufficient to support any such' claim. There is no sufficient averment of the insolvency of the plaintiff, but it is alleged, generally, that the lands are covered with mortgages; but the amount of the incumbrance is not shown, and it does not appear that it is greater than that of the last installment, nor is it made to appear, from any allegations of fact in the answer, that the defendant may not seasonably remove the same.

The contract provides for a charge of $50 for attorney’s fees in case the contract is foreclosed by the plaintiff. Whether the court will allow this sum as additional costs in such an action, if it should be prosecuted, we need not determine here. But it does not make the contract usurious on its face. It is not presumptively a contract to pay this sum for the use or forbearance of money. Such stipulations have never been so treated in this state. Johnston Harv. Co. v. Clark, 30 Minn. 311, (15 N. W. Rep. 252;) Bank of Benson v. Hove, 45 Minn. 42, (47 N. W. Rep. 449.) And there is nothing in the answer tending to show that it was intended as a cover for usurious interest.

The answer was clearly insufficient, and the judgment must be affirmed.