Rosendahl v. Mudbaden Sulphur Springs Co.

On March 1, 1911, the plaintiffs entered into a contract to convey cer*362tain lands to Tkenus M. Larsen and Olaf Rosendahl for the sum of $30,000. It provided that when the purchase price was reduced by payments to $18,000 the grantors would give a warranty deed, and the grantees would give notes aggregating $18,000, each for $83.33, one due each month. The grantees covenanted that until the full amount of the purchase price was paid they would not permit or give a lien upon the premises ; that they would pay all taxes; that they would keep the buildings insured, and that in case of loss the proceeds of the insurance would be applied to rebuilding or would be paid to the grantors up to the amount then unpaid on the purchase price. There was a provision to the effect that if there should be a default there should be a forfeiture. Afterwards the grantees assigned the contract, to the defendant Mudbaden company. On June 14, 1915, the plaintiff conveyed to the Mudbaden company as assignee of Larsen and Rosendahl, and the company gave its notes amounting to $18,000. The deed contained this provision:

“This deed is executed pursuant to that certain contract of sale of said premises executed by the first parties to Thenus M. Larsen and Olaf Rosendahl, dated March 1, 1911, which contract has been assigned to the second party hereto, and the conveyance hereby made is subject to all the terms and conditions of said contract.”

Afterwards the Mudbaden company made a mortgage for $100,000 to the defendant Minnesota Loan & Trust Company.

The court found the amount due the plaintiffs -upon the contract and adjudged it a lien upon the premises prior to the lien of the trust company mortgage. The correctness of this holding is all that is involved.

The contract intended that the grantees should have a deed when the purchase price was reduced by payments to $18,000 and that notes should be then executed for such amount. It did not intend that a purchase money mortgage should be executed. It did intend that the grantors should have a lien until the $18,000 was paid. When the Mudbaden company took its deed it was not in discharge of the contract of March 1, 1911, for the recital was that it was' made “subject to all the terms and conditions o C said contract.” One of the terms and conditions was that no lien should be given until the purchase price was paid and this meant until the $18,000 evidenced by notes was paid. That it was the intention of both parties that the unpaid purchase price should be a lien is not open to seri*363ous question. The lien was to continue after the deed and until full payment. The deed was not accepted in full performance of the contract, for it was made subject to its provisions, and the case is not within Hubachek v. Brown, 126 Minn. 359, 148 N W. 121, and other cases cited therein. The trust company took under the deed and is not in a better position than its mortgagor. The trial court correctly ruled.

Order affirmed.