text:
    MEGARRY BROS. v. CITY OF ST. THOMAS.
    No. 7444.
    Supreme Court of North Dakota.
    Sept. 2, 1954.
    On Rehearing Nov. 18, 1954.

      Day, Stokes, Vaaler & Gillig, Grand Forks, for plaintiff and appellant.
    M. J. Clayburgh, Grafton, for defendant and respondent.
   MORRIS, Chief Justice.

Because of the unusual situation presented by this appeal we deem it necessary to set out the pleadings at some length. The plaintiff alleges in the complaint

2.
“That the City of Saint Thomas is a Municipal Corporation organized and existing under and by virtue of the laws of the State of North Dakota.
3.
“That between the fifteenth day of June, 1948, and the first day of January, 1949, the Plaintiff furnished material and equipment and furnished machinery and labor for the construction of paving in the City of Saint Thomas of the agreed value as follows:
Excavation, street 4,915 C. Y. $0.75 $ 3,686.25
Excavation, Inter. 465 C. Y. 0.75 348.75
Gravel, pit run 5,462 C. Y. 2.15 11,743.30
Pump and Housing 1 Ea. 2,550.00
Catch basins 12 Ea. 130.00 1,560.00
Manhole 1 Ea. 175.00 175.00
18" Perforated Pipe 200 1. f. 3.75 750.00
10" Perforated Pipe 1,072 1. f. 2.80 3,001.60
8" Perforated Pipe 1,800 1. f. 2.50 4,500.00
Rock Trenchfill 560 C. Y. 3.50 1,960.00
Gravel Trenchfill 590 C. Y. 2.15 1.268.50
Crushed Gravel Base 2,045 C. Y. 2.90 5.930.50
Bit, Surfacing, 1 ½" 10,528 S. Y. 0.50 5,264.00
Bit, Surfacing, 2½" 8,273 S. Y. 0.75 6,204.75
Prime Bit. 6,260 Gal. 0.14 876.40
Seal Bit. 4,320 Gal. 0.15 648.00
Sand for Seal 170 Ton 5.00 850.00
Force Account Work 1,071.65
“That said work and material was of the agreed value of Fifty Two Thousand Three Hundred Eighty Eight and 70/100 ($52,388.70) Dollars and was accepted by the Engineer for the City and certified to the City as of said value. That no part of said amount has been paid except the sum of Thirty Nine Thousand Seven Hundred Twenty Five and 75/100 ($39,725.75) Dollars leaving a balance due and owing of the sum of Twelve Thousand Six Hundred Sixty Two and 95/100 ($12,662.95) Dollars together with interest at the legal rates of the first day of January, 1949, to the date hereof.
4.
“That Plaintiff has made demand for said sum and that payment has been refused.
“Wherefore, Plaintiff prays for judgment against Defendant for the sum of Twelve Thousand Six Hundred Sixty Two and 95/100 ($12,662.95) Dollars together with Plaintiff’s costs together with interest at the rate of 4% per an-num from the first day of January, 1949, together with Plaintiff’s costs and disbursements herein.”
For its answer the defendant
II
“Denies that the City of Saint Thomas has sufficient knowledge or information to form a belief as to the allegation contained in paragraph one of said complaint.
III
“The City of Saint Thomas affirmatively alleges that between the approximate dates of the 15th day of June, 1948, and the 1st day of January, 1949, the plaintiff furnished materials and equipment and furnished machinery and labor for the construction of paving in the City of Saint Thomas and for the said materials, equipment, machinery and labor, the plaintiff has been paid in full and that no part thereof is due and owing.
“As and For a Further Affirmative Defense and Counterclaim To the Complaint of the Plaintiff, Defendant Respectfully Alleges and Shows to the Court the following:
I.
“That the plaintiff negligently and in an unworkmanlike manner constructed the paving of main street between Ha-ger Avenue and Cleland Avenue as to cause same to be unfit for general travel, requiring the City of Saint Thomas to reconstruct said paving to their damage of Two Thousand, Five Hundred and Fifteen ($2,515.00) Dollars.
II.
“That the approaches to main street were constructed in such an unwork-manlike manner through the negligence of the plaintiff and his employees that proper drainage cannot be had without considerable fill and labor thereby damaging the City of Saint Thomas in the amount of Four Thousand, Five Hundred ($4,500.00) Dollars.
III.
“That due to poor workmanship and the negligence of the plaintiff and his employees, the drainage pipe extending from Cleland Avenue to Moore Avenue on the west side of main street was so constructed and placed that it could not possibly carry water; that due to this act of negligence, it was necessary for the plaintiff and his employees to replace said drainage pipe at additional cost of labor and materials; that due to the necessity of removing said drainage pipes and replacing same, the structure of the highway within the city limits hereinbefore specified was so weakened that said portion of the road sunk causing a depression along the west side of the street; that to repair the sunken condition of the highway, it will be necessary for the City of Saint Thomas to expend moneys in excess of Three Thousand, Five Hundred ($3,500.00) Dollars all of which is to defendant’s damage.
“Wherefore, The defendant prays that the plaintiff’s action be dismissed with costs and disbursements and the defendant further prays for Judgment against the plaintiff for the sum of Ten Thousand, Five Hundred and Fifteen ($10,515.00) Dollars, together with interest, costs and disbursements herein.”

To the defendant’s answer the plaintiff replied by a general denial.

The case was tried at length to a jury and at the close of all of the evidence both sides moved for a directed verdict. The court denied both motions and instructed the jury under the pleadings and the evidence, whereupon the jury returned the following verdict:

“We, the jury empanelled in the above entitled action, find for the defendant for the dismissal of the plaintiff’s complaint and we find for the plaintiff for the dismissal of defendant’s counter-claim.”

The plaintiff moved in the alternative for a judgment notwithstanding the verdict or for a new trial. This motion was denied on October 27, 1953, and on that date judgment was entered dismissing plaintiff’s action. The plaintiff appeals from the judgment and from the order denying its alternative motion.

The plaintiff specifies errors at law in the admission of evidence and in the court’s instructions to the jury. It also challenges the sufficiency of the evidence to support the verdict.

We now turn to the evidence, from which we extract these important facts: At a special meeting June 8, 1948, the City Council of the City of Saint Thomas passed this resolution:

“that this Council has found and determined, and hereby declares, that the owners of less than a majority of the property liable to be specially assessed for the improvement which is to be made in paving district No. 1 have filed protests against the making of said improvement, and the time for filing such protests has expired, said date being the 17th day of May, 1948 and the protests filed are insufficient, and therefore the City and its governing body are authorized. and empowered to cause said improvement to be made and to contract and levy and collect assessments therefor.”

It appears that prior to this meeting of June 8, the city council had passed a resolution declaring it to be necessary and convenient and to the best interests of the city that a hard surface street be constructed within the limits of paving district number one. May 17 had been set as the date for making protests against the improvement. An engineer, Theodore Spriggs, had been employed and had prepared plans, specifications, and an estimate of the probable cost of the proposed improvement. Notice of the receipt of sealed bids based upon these plans and specifications had been published on April 15 and 22. The only bid received was that of the plaintiff. The city council at the special meeting of June 8 adopted the following resolution:

“Be it Resolved by the City Council of the City of Saint Thomas, North Dakota, that the bid submitted by McGerry Bros, in the amount of $39,725.75 for the construction of a paving project within the confines of Paving District No. One (1) and the furnishing of materials, labor and skill needed for said project, was the lowest and sole bid submitted and upon consultation with the City Engineer, Mr. T. F. Spriggs of Grand Forks, North Dakota, and with approval said bid is hereby and herein accepted and approved.”

This meeting adjourned to meet on June 15 to consider the contract to be signed by Megarry Brothers.

On June 15, 1948, a construction contract was executed by Megarry Brothers and the City of Saint Thomas, paragraph 1 of which reads as follows:

“That, for the considerations and payments hereinafter mentioned to be made by the party of the second part, the Contractor promises and agrees to furnish and deliver all the material and to do and perform all the work and labor required to be furnished and delivered, and to pay or cause to be paid as they become due, all claims for any work or labor performed, including that performed repairing machinery and equipment, or renting any motor power equipment of all kinds and machinery or furnishing' any skill, hand tools or materials or insurance premiums or supplies for equipment, all as done and performed in and about the construction of the paving project known and referred to by the party of the second part as paving district No. One (1), in strict conformity with the provisions of this contract, and bond, proposal and the plans and specifications as approved by the City Council of the City of Saint Thomas, copies of which are on file with the party of the second part, and which said plans and specifications and proposal and bond are hereby made a part of this agreement as fully and to the same effect as if the same had been set forth in the body of this agreement.”

The bond referred to in the construction contract was entered into in the sum of forty thousand dollars and contained this provision:

“The condition of this obligation is such that whereas, said principal has entered into a contract with the said City of Saint Thomas for the paving project within the confines of that district known as Paving District No. One (1), reference to which contract is hereby made as a part hereof: * *. ”

The proposal referred to in the contract and submitted by Megarry Brothers set forth unit prices for various items a,nd the “approximate quantities” to be furnished and a total bid of $39,725.75.

As the work progressed changes were made in the plans which increased the amount of both materials and labor that entered into the completed project. The plaintiff contends that its bid was approximate and that it is entitled to be paid for all work and materials above the original estimate at unit prices. The defendant, on the other hand, contends that the additional work and materials furnished by the plaintiff were incidental to the project, were covered by the original lump sum bid, and that the plaintiff is entitled to no additional compensation therefor. The plaintiff strenuously contends that the additional work and material were furnished according to the agreed unit price, were accepted by the city engineer and by him certified to the city in a final estimate, and that the plaintiff is entitled to a judgment against the City of Saint Thomas for this agreed and certified value. The acceptance and certification are controverted by the city and was one of the issues submitted to the jury.

We are here presented with a unique and somewhat difficult situation. The plaintiff’s complaint and the evidence submitted under it contain the seeds of destruction of plaintiff’s cause of action. .The plaintiff seeks a new trial. The point fatal to plaintiff’s right of recovery has neither been pleaded nor in any manner presented in the court below. Yet, were we to grant either a judgment notwithstanding the verdict or a new trial as plaintiff requests, we would thus sanction the recovery of a judgment against a municipality contrary to express statutory provisions.

Ordinarily questions not raised at the trial will not be considered on appeal, but to that rule there are certain exceptions. Where a pertinent statute has been overlooked resulting in plain error that is of public concern, this court will consider the error though it be not brought to our attention by either of the parties. Adley Express Co. v. Town of Darien, 125 Conn. 501, 7 A.2d 446; Magnolia Petroleum Co. v. State, 175 Okl. 11, 52 P.2d 81; White v. McCoy Land Co., Mo.App., 101 S.W.2d 763; Mitchell v. Allison, 54 N.M. 56, 213 P.2d 231; Lambert Pharmacal Co. v. Roberts Bros., 192 Or. 23, 233 P.2d 258; Crichfield v. Bermudez Asphalt Paving Co., 174 Ill. 466, 51 N.E. 552, 42 L.R.A. 347.

Section 130 of the North Dakota Constitution directs the legislative assembly to provide by the general law for the organization of municipal corporations. These municipal corporations when created pursuant to statute become agencies of the state and have only the powers expressly conferred upon them by the legislature or such as may be necessarily implied from the powers expressly granted. Fradet v. City of Southwest Fargo, N.D., 59 N.W.2d 871. Among legislative grants of power to cities is the power to create improvements by the special assessment method as set out in Chapter 40-22, NDRC 1943 and amendments thereto. It appears from the evidence in this case that the pavement involved was an improvement which the 'City of Saint Thomas sought to make pursuant to the provisions of Chapter 40-22, supra. Most of the provisions of this chapter had their origin in Chapter 62, SLND 1905. In Schieber v. Mohall, 66 N.D. 593, 268 N.W. 445, 453, we said:

“There is nothing plainer in the whole chapter than that the city is not to be held responsible generally for the cost of the improvement. The cost is to be paid by the property benefited, from a fund raised by taxation of said property, and from no other source. The city is not to be held liable generally. Not only is this the plain import of the chapter; but it must also be clear that if any portion of the cost, other than the part assigned to the city for intersections of streets, etc., were to become the general obligation of the city, then the taxpayers of the city would be saddled with the cost of improvements in the making of which they had no voice. Only the district benefited by the extension of sewers and waterworks is consulted. The city council determines the necessity for the work and gives general notice; but it is only in case ‘the owners of a majority of the property liable to be specially assessed for such proposed improvement’ protest that the city council considers protest at all. The theory is that the only ones affected are those assessed for the benefits, and, therefore, they are the only ones concerned.”

Turning now to our present statute, we find that Section 40-2236, NDRC 1943 provides :

“A contract let under the provisions of this chapter shall require the work to be done pursuant to the plans and specifications on file in the office of the city auditor or village clerk, as the case may be, subject to the approval of the engineer acting for the municipality, and shall provide further:
“1. That the governing body shall have the right to suspend the work at any time for improper construction and to relet the contract therefor or to order a reconstruction of the work as to any part thereof improperly done;
“2. The time within which the work shall be completed;
“3. The period of time for which the work shall be guarantied as to workmanship and materials;
“4. The fund from which the contract price is to be paid by the municipality ;
“5. That the consideration expressed in the contract is payable only in warrants drawn on the fund described in the contract; and
“6. That the municipality assumes and incurs no general liability under such contract.
The engineer acting for the municipality shall supervise and inspect the work during its progress.”

None of the provisions required by Section 40-2236, supra, except the date for completion of the work, were inserted in the contract between Megarry Brothers and the City of Saint Thomas, yet it clearly appears that the city was attempting to proceed under the provisions of Chapter 40*-22. The amount of the original bid, $39,725.75, has been paid to Megarry Brothers. This money presumably was raised by special assessments levied against the property benefited. Those assessments are now being collected from the property owners. There can be no question that the improvement was to be financed through special assessments. In fact, plaintiff’s brief states:

“The procedural steps were taken as provided for improvement by special assessment and Plaintiff submitted the only bid which was accepted.”

We now consider the problem of the effect of a contract for a special improvement in which the provisions of Section 40-2236, NDRC 1943 are omitted and the municipality promises to pay for the improvement in cash, as the plaintiff contends was the agreement here.

Persons entering into contractual relations with municipal corporations or their officers are chargeable with notice of the extent of and limitations upon their powers. Roberts v. City of Fargo, 10 N.D. 230, 86 N.W. 726; City and County of San Francisco v. Superior Court, Cal.App., 231 P.2d 583; Von Schmidt v. Widber, 105 Cal. 151, 38 P. 682; see also Bankers Trust & Savings Bank v. Anamoose, 51 N.D. 596, 200 N.W. 103; McQuillin, Municipal Corporations, 3rd Ed., Section 37.103.

The law in existence at the time the contract is made forms a part of the contract to the same extent as if it were expressly incorporated therein. State ex rel. Cleveringa v. Klein, 63 N.D. 514, 249 N.W. 118, 86 A.L.R. 1523; Williston on Contracts, Revised Edition, Section 615. This rule is applicable to contracts for public improvements made by municipalities. The ordinances and statutes must be treated as a part of the contract entered into between the municipality and the contractor. City of Paducah v. Koller Plumbing Co., 219 Ky. 779, 294 S.W. 477. Section 40-2236, NDRC 1943 specifically requires that the contract state the fund from which the contract price is to be paid and that the municipality assumes and incurs no general liability. We therefore must read into the contract these statutory requirements. Accordingly we hold that the plaintiff when it entered into the contract agreed that the City of Saint Thomas would incur no general liability and that this agreement is fatal to the plaintiff's right to recover under the contract.

In support of its right to recover the plaintiff also argues that this is an action on implied contract for the recovery of the reasonable value of labor and materials furnished to the city and accepted by it. In support of its right to recover under this theory the plaintiff cites McGuire v. City of Rapid City, 6 Dak. 346, 43 N.W. 706, 5 L.R.A. 752, and Northwestern Sheet & Iron Works v. Sioux County, 76 N.D. 451, 36 N.W.2d 605. We are unable to read plaintiff’s complaint as pleading an action on implied contract for reasonable value. But if we were, plaintiff still could not recover. The prohibition against general liability contained in Section 40-2236 is fatal to any recovery by the plaintiff upon contract, either express or implied. In McGuire v. City of Rapid City, supra, the distinction is made between a want of power and an irregular exercise of power on the part of a municipality and in the latter instance recovery was permitted. It was held that where the city had entered into a contract that it had power to make, it could not shield itself behind the defense that the power had been irregularly exercised. We applied that theory in Northwestern Sheet & Iron Works v. Sioux County, supra, wherein we analyzed our prior cases dealing with the subject in controversy.

“An implied contract must fall within the scope of corporate powers. The general rule is that if the express contract is one the municipality had no power to make, i. e., ultra vires in the strict sense of the term, or if the municipality could not make an express contract of the kind sought to be enforced, the municipality cannot be held liable for the value of benefits received. A municipality is not required to compensate for benefits received under a void contract, where td do so would he tantamount to annulling a statute, or doing by indirection that which the municipality is not permitted to do directly.” McQuillin, Municipal Corporations, Section 29.111; Williams v. Fargo, 63 N.D. 183, 247 N.W. 46.

For a discussion of “Liability of City if Contract Price is Payable from Assessment” see Municipal Corporations, Dillon, Fifth Edition, Section 827.

We can reach no other conclusion but that Section 40-2236, NDRC 1943 prohibits a municipality from assuming or incurring a general liability upon a contract for improvements made pursuant to Chapter 40-22, NDRC 1943 and that by virtue of the statute the exemption from liability became a part of the contract entered into between Megarry Brothers and the City of Saint Thomas. The plaintiff claims that a total liability of $52,388.70 was incurred on the part of the city. $39,725.75 has been paid by assessments levied against benefited property within the paving district. The city was prohibited from assuming or incurring any general liability under the contract. What the city is forbidden to do by express contract it cannot do indirectly by implied contract. The plaintiff is not entitled to recover judgment against the city for the unpaid balance in an action on contract, either express or implied. The jury returned a verdict dismissing plaintiff’s action and the defendant’s counterclaim. Judgment has been entered pursuant to the verdict. An alternative motion was denied by the trial court. The order and judgment appealed from are affirmed.

BURKE, SATHRE, JOHNSON and GRIMSON, JJ., concur.

On Rehearing

We granted a rehearing in this case upon the petition of the appellant. The case was reargued and a supplemental brief filed in which the appellant calls our attention particularly to the case of Pine Tree Lumber Company v. City of Fargo, 12 N.D. 360, 96 N.W. 357, 360, from which it quotes a number of passages that seemingly support the right to recover against the city. However, an analysis of that case discloses that it is not in point. The Pine Tree Lumber Company brought an action against the City of Fargo to recover upon ten warrants drawn against the city paving accounts. The court analyzed the pertinent statutes as they then existed and said:

“As between the city and the parties with whom it contracted to furnish the labor and mate'rial and to pave its streets, the city had power to render itself generally liable, notwithstanding the cost of the improvement was to fall ultimately upon the owners of abutting property. The scheme of the statute was to enable the city to make the improvements enumerated in the statute, and to reimburse itself for the costs of the same through special assessments of property abutting upon, and theoretically, at least, benefited, to the extent of the assessments, by the improvements made. * * * There is nothing in the statute which imposes upon the person to whom the contract is let to pave the streets the requirement to look alone to the proceeds of the special assessments for his pay, or limiting his recovery to the funds realized therefrom.”

At the session following the decision in Pine Tree Lumber Company v. City of Fargo, the legislature enacted Chapter 62, SLND 1905 providing a new charter for cities. Article 18 of that chapter dealt with sewers, paving and watermains. Section 149, which is a part of that article, prescribed in a general way what contracts entered into for work provided for in the act should contain and specifically stated:

“Each contract so entered into shall state the time on or before which such work must be completed, and must state from what fund the amount to be paid thereon by the city is to be paid, and that the consideration of such contract is payable only in warrants drawn on such fund, and that such city assumes and incurs no general liability under such contract.”

These requirements have continued to be the law of this state down to the present time and now form a part of Section 40-2236, NDRC 1943 which we have quoted in the main opinion. The statements in Pine Tree Lumber Company v. City of Fargo regarding the general liability of a city under a contract for special improvements are no longer applicable. We adhere to our former opinion.

GRIMSON, JOHNSON, SATHRE, and BURKE, JJ., concur.


source: Caselaw Access Project

author: MORRIS, Chief Justice. BURKE, Judge

license: Public Domain

text:
    STATE of North Dakota, Plaintiff and Respondent, v. Harold PRINCE, Defendant and Appellant.
    No. 259.
    Supreme Court of North Dakota.
    Oct. 30, 1954.

      J. K. Murray, Bismarck, for defendant and appellant.
    Norman B. Jenson, State’s Atty., Bismarck, for plaintiff and respondent.
   MORRIS, Chief Justice.

The defendant was convicted of the crime of assignation and on June 19, 1953, was sentenced to the state farm for a term of six months. On the same day he made a motion for arrest of judgment, which was denied. The defendant also filed objection to the jurisdiction of the court to enter judgment or impose a penalty. This objection was overruled. Ón June 22, 1953, the court entered an order staying execution of the judgment for a period of ninety days. Bail was fixed at five hundred dollars and the defendant released from custody. On April 22, 1954, the defendant served notice of motion for a -new trial. The hearing was set for May 10, 1954. This motion was based upon the affidavit of defendánt’s attorney, the deputy clerk of court, and the official court reporter. The attorney’s affidavit, in part, states:

“That within said ninety days’ period and on or about the 1st day of September, 1953, this affiant called Mabel Engeseth, the Deputy District Court Clerk, for the purpose of having her forward to the Court Reporter at Jamestown the shorthand notes and the exhibits for the purpose of procuring an estimate of the cost of a transcript, and with the objective in view of securing a transcript; that on that same day, and within about two hours after said telephone call, said Deputy Clerk called this affiant on the telephone and said she had located the shorthand notes of the trial, but was unable to locate the exhibits and files in the case, * ⅜ *.
“That one of the exhibits was the record of the taxicab company for whom the defendant was employed during the period of the date of the alleged crime and for a long time prior thereto and thereafter, and covered the period and the dates that the complaining witness testified to relative to the date of the commission of the crime by the defendant upon her; that said exhibit and the other exhibits introduced in evidence conclusively proved the defendant’s innocence; that without such exhibits made a part of the record with the transcript on a motion for a new trial and on appeal, this affiant is of the opinion that the defendant would not be successful in his motion for a new trial nor on the appeal therefrom and appeal from the judgment; that immediately after the conviction, this af-fiant contemplated, in addition to the appeal, making a motion for a new trial on a settled statement of the case, including the exhibits, and if same was denied to appeal from such denial.
“That by reason of the loss of the exhibits aforementioned, and by reason of the fact this affiant was continually trying to get the exhibits into the hands of the Court Reporter, this af-fiant accidently and inadvertently overlooked procuring the necessary extension of time to perfect the record; that the Toss of said exhibits and the fact that the Clerk could not find them upset this affiant, and by reason thereof he neglected to procure the necessary extension.”

The affidavit of the court reporter shows that the shorthand notes and the exhibits were filed with the clerk of the district court of Burleigh County subsequent to the trial and that the reporter has not had either'1 the notes or the exhibits in his possession since they were filed. All of these affidavits áre dated in April 1954. On May 14, 1954, the trial court

“Ordered that the defendant’s motion for a new trial be and the same is hereby in all things denied.”

The order does, not recite and is not accompanied by a memorandum showing the reason for the denial.

During most of the time the foregoing proceedings were being had, an appeal by the defendant was pending in the supreme court. About July 3, 1953, the defendant served and filed a notice of appeal from the judgment. A partial record on that appeal was certified to this court by the clerk of the district court. The state noticed for hearing at the May 1954 term of the supreme court a motion to dismiss the appeal upon the ground that the record had not been perfected in the supreme court. At the same time the motion to dismiss was heard, the. defendant made application to the supreme court for an extension of time to settle the statement of the case. On May 12, 1954, we denied the defendant’s application for extension of time and ordered

“That the motion of the respondent for a dismissal of the appeal herein be and the same is hereby granted and the appeal from the judgment of the District Court of Burleigh County is ordered dismissed.”

This was two days before the trial court made its order denying the defendant’s motion for a new trial from which this appeal is taken and two days after the motion had been heard.

The defendant seeks to bring himself within thosfe portions of Section 29-2402, NDRC 1953 Supp. which provide that

“When a verdict has been rendered against the defendant, the court in which the trial was had, upon his application, may grant, a new trial in the following cases only: * * *
“8. When the defendant, without fault or negligence on his or her part, is unable to procure a correct and complete transcript of the evidence given and the proceedings had at the trial.”

Paragraph 8, above quoted, was added to Section 29-2402, NDRC 1943 by Chapter 216, SLND 1949. In addition to the language above quoted the original bill also provided:

“A motion for new trial based upon this ground may be made within six months after the rendition of judgment. This ground for new trial applies, in addition to cases in the future, to cases in the past now pending either in the - district courts or in the supreme court.”

The original bill was amended in the state senate by striking out the language last quoted. Senate Journal, 1949, pages 379 and 400.

The striking out of that portion of the original bill left the general statute fixing the time for making motions for new trial in criminal cases applicable to paragraph 8. The general statute, Section 29-2404, ND RC 1943, provides:

“The motion for a new trial must be made upon not less than one nor more than five days’ notice and, if based upon any of the grounds mentioned in subsections 2, 3, 4, and 7 of section 29-2402, such written notice must be served and filed within thirty days after the discovery of the facts upon which the party relies in support of his application. In all other cases, the notice must be served and filed within ten days after the rendition of the verdict or within such further or other time as the court may allow or fix:”

The verdict was rendered June 18, 1953. On April 22, 1954, the defendant served notice of motion for a new trial to be heard on May 10, 1954. No application was made for an order, or order issued, extending the time for making a motion for a new trial. The trial court might properly, within the exercise of his judicial discretion, have refused to hear the motion or have denied it on the ground that it had not been made within the time prescribed by statute or any extended time allowed by the court. McKinney v. State of Wyoming, 3 Wyo. 719, 30 P. 293, 16 L.R.A. 710; Harris v. Jennings, 64 Neb. 80, 89 N.W. 625, 97 Am.St.Rep. 635; Heeter v. Nisi, 134 Neb. 209, 278 N.W. 271; Brockman v. Hall, 37 Idaho 564, 218 P. 188; Louder v. Hunter, 27 S.D. 271, 130 N.W. 774; Bancroft’s Code Practice and Remedies, Section 6100.

We resolve the uncertainty as to the ground upon which the motion for a new trial was denied in favor of the defendant and assume that the trial court denied the motion on the merits rather than the procedural ground that the defendant had failed to secure an extension of time within which to move for a new trial. At the time the motion was made and heard the appeal from the judgment was pending in the supreme court.

“The jurisdiction of the court to entertain a motion for a new trial is not terminated as long as the action is pending. Whether the facts and circumstances are such that the court should hear and consider the motion on its merits is a different question and one for the court’s determination in the exercise of its jurisdiction. It was for the court to determine whether the motion should or should not be heard.” Nevland v. Njust, 78 N.D. 747, 51 N.W. 2d 845, 849.

Prior to the repeal of Section 29-2406, NDRC 1943 by Chapter 207, SL ND 1951, the district court had no power to entertain a motion for a new trial made after the time for appeal elapsed. State v. Hagen, 54 N.D. 136, 208 N.W. 947; State v. Gibson, 69 N.D. 70, 284 N.W. 209; State v. McClelland, 72 N.D. 665, 10 N.W.2d 798. This rule was changed by the repeal. An appeal from a criminal judgment must be taken within three months after its rendition and under the old rule the same time applied to the making of a motion for a new trial. The removal of the limitation by the repeal of Section 29-2406, NDRC 1943 now permits the defendant in a criminal case to make a motion for a new trial after the expiration of three months, from the rendition of the judgment and set it for hearing during the time that the case is pending. A civil action is deemed pending from the time of its commencement until its final determination upon appeal or until the time for appeal is past. Section 28-0510, NDRC 1943. By analogy it would seem that a criminal action is also pending until its final determination upon appeal or until the time for appeal has passed.

The defendant’s motion for a new trial was set for hearing and heard on the tenth day of May 1954, at which time the case was pending'on appeal in the supreme court. Th'e motion having been submitted to the court while the case was pending, he had 'jurisdiction to hear and determine it, his determination being made in his order denying the motion on May 14, 1954.

The taking of an appeal does not terminate the right of the appellant to also move for a new trial. McCann v. Gilmore, 42 N.D. 119, 172 N.W. 236. A motion for a new trial and an appeal from a judgment are separate remedies. State v. McClelland, supra. The existence of our present statutory ground fof a motion for a new trial as set forth in paragraph 8 of Section 29-2402, NDRC 1943, as amended, affords a practical example of the wisdom of the rule. It may well be that the loss of stenographic notes and the consequent inability to secure a settled statement of the •case for review is not discovered until after the notice of appeal has been served and filed. If taking an appeal would terminate the right to move for a new trial, the relief afforded by paragraph 8 would be short lived or completely unavailable in many instances.

On the hearing of the motion- for new trial it was established that none of the records or files in this case were really lost but were only misplaced. The exhibits were found sometime in April 1954 in the clerk’s office by the state’s attorney. When the defendant or his counsel learned of the discovery does not appear. According to the affidavit of defendant’s counsel, his activities in attempting to procure a transcript began about September 1, 1953, when he called the deputy clerk of the district court for the purpose of having her forward to the court reporter the shorthand notes and exhibits for the purpose of procuring an estimate of the cost of the transcript. Section 29-2301, NDRC 1943 provides:

“A statement of the case, as the term is used in this chapter, is a statement in writing constituted, prepared, settled, certified, and filed, as provided in section 28-1806.”

Section 28-1806, in part, provides:

“Within thirty days after notice of the entry of judgment or of the order to be reviewed, or within such further time as the court shall, allow, the moving party must procure a transcript of the evidence and furnish a copy thereof to the adverse party with a notice that at a time not less .than fifteen nor more than thirty days after the service of such notice, he will present the same to the judge for certification as a correct transcript of the evidence and of all proceedings had and made matter of record by the official reporter, and that, at the same time, he will ask the judge for a certificate identifying the exhibits and depositions in the case; * *

No attempt was made to comply with these statutory provisions for almost two and one-half months after the entry of the judgment of conviction and it was not until then that the loss or misplacement of any of the records was discovered. The shorthand notes were found shortly after the telephone call from defendant’s counsel to the deputy clerk. Only the exhibits remained misplaced until April 1954. The shorthand notes were never presented to the court reporter for an estimate of the cost of a transcript and no transcript was ever ordered. The defendant made no attempt to locate the missing exhibits other than to call the clerk’s office from time to time up until March 1, 1954, to inquire about the exhibits. The exhibits were introduced by the defendant. No showing is made of the contents of the exhibits other than that one was a record of' the taxicab company by whom the defendant was employed during the period within which the crime was committed. It does not appear that the contents of the exhibits could not have been shown or could not have been stipulated so as to complete the record.

From this record we are unable to ascertain whether the misplaced exhibits would be material to any issues raised on appeal. If we assume that the taxicab records were introduced in evidence for the purpose of establishing an alibi for the defendant, we cannot determine their materiality or importance to the issues on appeal without a transcript of the evidence. The stenographic notes were available and a transcript could have been procured and presented to the trial court at the hearing on the defendant’s motion for a new trial and made a part of the record on this appeal.

In Cadoma Sheep Co. v. Doughaard, 41 Wyo. 502, 287 P. 436, it was held that a new trial because of inability to furnish a record for review was unwarranted where the judge’s certificate showed that certain evidence had been “misplaced.”

In Ex parte Stanley, 203 Ala. 408, 84 So. 773, 774, it is said:

“We are unwilling to hold that the mere loss of papers, after a verdict and judgment, entitles either party to have that verdict and judgment set aside, merely because the papers cannot be substituted, or their contents proven, and when they were lost without the fault of the party complaining. If it was made to appear that the lost papers would show prejudicial error to the party complaining, and no other relief was availing, then a new trial might be awarded by the trial court, or an appellate court; but a mere loss of papers, without fault of the party complaining, without showing error or injury, on the part of the trial court, is not sufficient.”

We construe paragraph 8 of Section 29-2402, NDRC 1943, as amended, to include within its scope not only the transcribed oral testimony but also exhibits that are material to the issues to be presented. However, it is not every instance of miss-ing exhibits that requires a new trial to be granted. The party seeking a new trial under this statute must show diligence on his part in attempting to secure a transcript or to find or replace missing exhibits. It must also appear that the exhibits are necessary to a review in the appellate court or to properly present the record on a motion for new trial on grounds other than prescribed by paragraph 8, or that they are of such a nature that under the circumstances disclosed by the available record their absence will be presumed to be prejudicial. In this case there is a lack of diligence on the part of the defendant and we are.unable to ascertain from the record presented whether or not the missing exhibits are material to the issues which the defendant sought to have reviewed. . The order appealed from is affirmed.

GRIMSON, JOHNSON and SATHRE, JJ., concur.

BURKE, Judge

(concurring specially).

I concur in the affirmance of the order denying the motion for a new trial in this case. At the time the motion was heard the lost exhibits had been found and there was therefore available to the defendant the opportunity to move for a new trial on the merits.

The only reason for making the loss of • records a ground for a new trial is that such loss would prevent a review upon the merits. To grant a motion, made upon that ground, after the lost records have been discovered and before the time to move for a new trial on the merits had expired, would, in my opinion, verge on the ridiculous.


author: JOHNSON, Judge.

text:
    Orton IVES, Plaintiff and Appellant, v. Willard HANSON and Esther Hanson, Defendants and Respondents.
    No. 7455.
    Supreme Court of North Dakota.
    Nov. 12, 1954.

      Swendseid & Bekken, Stanley, for plaintiff and appellant.
    H. Morris Borstad, Tioga, and E. C. Rudolph, Ray, for defendants and respondents.
   JOHNSON, Judge.

This is an equitable action for the reformation of a warranty deed.

On November 29, 1946, the plaintiff, Or-ton Ives, made, executed, and delivered a warranty deed covering the East Half of the Southwest Quarter (£½5\¥¼!) and Lots 6 and 7, Section 6, Township 157 North, Range 94 to Harold Hanson. In the deed his son, Willard Hanson, was named as grantee. There are no reservations in the deed.

The plaintiff pleads his right of reformation on an alleged oral agreement wherein and whereby he had agreed to sell to Harold Hanson the surface of the above described property and the undivided fifty per cent (50%) interest in all the minerals, oil and gas in and under and produced therefrom; that at the time of the execution and delivery of the warranty deed mentioned, the plaintiff and Harold Hanson were informed and believed that Mountrail County owned fifty per cent (50%) of the oil, gas and other minerals in and under said land; that by mutual mistake of both law and fact, the deed made, executed and delivered by the plaintiff contained no reservation whatsoever and erroneously conveyed said land in fee simple; and the plaintiff requests that the deed be reformed to convey the surface rights to the land covered by the warranty deed and that fifty per cent (50%) of the oil, gas and other minerals be reserved to him. Willard Hanson is a nephew and Esther Hanson, his mother, is a sister of the plaintiff. They answered denying that there was a mutual mistake on the part of the plaintiff and Harold Hanson with reference to reserving in the plaintiff certain oil and gas in the lands described in the plaintiff’s complaint, and alleged that the deed of conveyance was intended to, and did express the actual intent of the parties; that nearly six years have elapsed since the execution and delivery of the deed, and that the plaintiff did not assert any mistake until the commencement of this action; that since the execution and delivery of the deed, Harold Hanson has died and that his testimony is no’ longer available; that by reason of the plaintiffs laches and negligence the defendants have been prejudiced because of the difficulty of securing certain and exact evidence as to conversations leading up to the deed.

This action was tried to the court and resulted in a decision in favor of the- defendants. The plaintiff appealed and demanded a trial de novo.

The real object of this action is to determine whether or not the plaintiff, as grantor, or the defendant, Willard .Hanson, as grantee, in the warranty deed mentioned, is the owner of fifty per cent (50%) of the minerals, including oil and gas, in the real property covered by the deed, which by the statute, Section 11-2704 of the NDRC 1943, was reserved to the county.

The only persons having actual knowledge of the alleged oral agreement were the plaintiff himself and Harold Hanson. It is upon the testimony of the. plaintiff alone that the action to reform the deed is based.

It appears from the evidence that when the parties reached an agreement of sale and purchase of the land described in the warranty deed to Willard Hanson, they decided to drive to the city of Stanley and consult attorney F. F. Wyckoff, The plaintiff testifies that the alleged oral agreement was explained to Attorney Wyckoff and that he informed the parties that under the provisions of Chapter 136 of the Session Laws of 1941, the county automatically retained fifty per cent (50%) of all the oil, gas and other minerals in tax. title land acquired hy the county. The plaintiff, Orton. Ives, had purchased the land from Mountrail County under a contract for deed dated December 22, 1942, Mountrail County had acquired title to the property by tax deed executed and delivered to it on the 1st day of October, 1940. On February 17, 1945, Mountrail County executed and delivered a county deed from County to purchaser, Orton Ives, covering and describing the land involved in the transaction between the plaintiff and Harold Hanson. This deed contains no reservations whatsoever.

The plaintiff asserts that he had agreed to sell the surface and fifty per cent (50%) of the minerals, including oil and gas, to Harold Hanson; that inasmuch as the county owned fifty per cent (50%) of the minerals including oil and gas, if the plaintiff was to comply with the alleged oral agreement made to Harold Hanson, he could not retain any of the oil, gas or other minerals. It is stated that Attorney Wyc-koff advised that any assertion of the reservation of the minerals in and to the plaintiff would merely serve to pass less than fifty per cent (50%) of the minerals, which would be contrary to the terms of the alleged oral agreement; that after some discussion between Orton Ives and Harold Hanson concerning the status of the minerals, the plaintiff agreed to abide by the oral contract that he made with Harold Hanson and that the warranty deed to Willard Hanson was drawn without any reservations.

Mr. Wyckoff died in October 1948. At the time of the trial of this action, the only party who could shed any light on the consummation of the alleged oral agreement was the plaintiff himself, as both Harold Hanson and F. F. Wyckoff, the attorney who drew the deed had died.

On March 21, 1951, this court decided the cases of Kershaw v. Burleigh County, 77 N.D. 932, 47 N.W.2d 132, and Kopplin v. Burleigh County, 77 N.D. 942, 47 N.W.2d 137. These cases, following the case of Adams County v. Smith and Dakota Collieries Company, 74 N.D. 621, 23 N.W.2d 873, determined that the counties of the state no longer had any interest in the fifty per cent (50%) of the minerals as provided by Chapter 136 of the 1941 Session Laws, now Section 11 — 2704 the NDRC 1943; that this statute had been superseded by Chapter 286 of the 1941 Session Laws, now Section 57-2816 of the NDRC 1943, passed at the same session of the legislature as Chapter 136.

At the time that the plaintiff and Harold Hanson consulted Attorney Wyckoff, and upon the advice given, they were both laboring under the mistaken belief as to the law regarding the ownership of minerals by a county.

Shortly after the public announcement of these decisions and on or about June 1, 1951, the plaintiff contacted the defendant, Willard Hanson, and told him that fifty per cent (50%) of the minerals under the land covered by the warranty deed dated November 29, 1946, belonged to him and stated: “Well the boy made the statement that he knew about it. He knew it was so.” This statement, however, is inconsistent and in conflict with the testimony of both Willard Hanson and his mother, Esther Hanson. They both stated that they knew nothing about the alleged agreement between the plaintiff and Harold Hanson; that the plaintiff had never mentioned this matter prior to June 1951 to either of the defendants. Esther Hanson also testified that her husband had never mentioned anything with reference to the reservation of oil and gas in the land deeded to Willard Hanson and that she had never heard of it until the plaintiff talked to her about it for the first time along about June 1951.

It is significant to note that although the plaintiff asserts positively the terms of the alleged oral agreement leading up to the execution and delivery of the warranty deed to Willard Hanson, at one point he testifies as follows:

“And the agreement was between Hanson, Harold Hanson, and I think I was supposed to have half of 'that mineral rights if the county couldn’t claim them. And we went to Stanley with that understanding that I was supposed to have that if the county didn’t reserve it. And we went to the State’s Attorney. He said the county did hold that half of that. And that’s, that is the way it was with the agreement, I understand, was the way it was supposed to be.”

At another point in the testimony of the plaintiff he asserts, referring to Hanson:

“A. He said, ‘I don’t care about that.’
“Q. He didn’t care about what ? A. About the fifty per cent of the mineral rights. ‘I don’t care about that’, he said.”

This testimony of the plaintiff is in conflict with the alleged oral agreement that he was to convey fifty per cent (50%) of the minerals and the surface. It would be logical to suppose that if Harold Hanson did not care about the minerals as testified to by the plaintiff, that the plaintiff would then have insisted upon fifty per cent (50%) reservation thereof. This he did not do.

The deed involved in this action grants a fee-simple title without reservations. A fee-simple title is presumed to be intended to pass by a grant of real property unless it appears from the grant that a lesser estate was intended. Section 47-1013, NDRC 1943. A grant shall be interpreted in favor of the grantee. Section 47-0913, NDRC 1943.

Parol evidence is inadmissible to vary or contradict the terms of a written contract as between the parties thereto unless through fraud or mistake or accident the. contract as written fails to express the real intention of the parties. Hanes v. Mitchell, 78 N.D. 341, 49 N.W.2d 606.

Parol evidence is admissible to establish the fact of fraud or of a mistake in actions to reform written instruments, and to show how the writing should be corrected in order to conform to the agreement of intention which the parties actually made or had. 45 Am.Jur. 650, Reformation of Instruments, Sec. 113. A presumption arises from the instrument itself that it fully and clearly sets forth the true agreement of the parties, and where the mistake is denied, the burden is on the party alleging it to prove that the written instrument does not fully or truly state the agreement that the parties intended to make. 45 Am.Jur. 649, Reformation of Instruments, Sec. 112.

In an action of this kind much stronger and clearer evidence is required than in an ordinary action for damages. The high remedy of reformation is never granted on a probability, or on a mere preponderance of the evidence. The requirements relate not only to the mistake and the mutuality thereof, but also to the real agreement which is alleged to have been made. 45 Am.Jur. 651, Reformation of Instruments, Sec. 116.

“While there are cases holding that, as in other civil cases, a mere preponderance of the evidence may be sufficient to warrant reformation of an instrument, it is generally held, except in special circumstances, that a mere preponderance of the evidence is insufficient, and that the courts should exercise great caution and require a high degree of proof, especially when death has sealed the lips of the original parties or a party.” 76 C.J.S., Reformation of Instruments, § 84a, pages 454 and 455. (Emphasis supplied.)

Many expressions are found in the opinions with reference to actions for reformation of an instrument to the effect that the evidence must be, “clear and convincing, evidence which is clear and satisfactory, evidence which is the clearest and most satisfactory, evidence which is clear, precise, and indubitable, evidence which is clear, cogent, and convincing, evidence which is clear, convincing, and satisfactory, evidence which is clear, positive, and convincing, evidence which is clear, unequivocal, and convincing, evidence which is clear, unequivocal, and decisive, and similar expressions.” 76 C.J.S., Reformation of Instruments, § 84, pages 455, 456, 457 and 458.

There is sufficient evidence to justify the reformation of an instrument by parol only when such evidence is clear, satisfactory, specific and convincing that there was a mutual mistake of fact. Forester v. Van Auken, 12 N.D. 175, 96 N.W. 301; Wilson v. Polsfut, 78 N.D. 204, 49 N.W.2d 102.

In the case at bar the trial court found, “that the evidence presented by the plaintiff in this action is not such clear, satisfactory, specific, and convincing evidence that there was a mutual mistake of fact as to justify reformation of said written instrument by parol evidence.”

When we consider that the action for reformation is based solely upon the evidence presented by one of the parties to the alleged oral agreement resulting in the warranty deed to Willard Hanson; that no corroboration of the facts or circumstances is offered; that the plaintiff’s evidence is in conflict with the terms of his warranty deed to Willard Hanson; that the evidence is in some respects not credible, particularly with reference to the testimony of the plaintiff that Harold Hanson was not interested in the mineral rights involved, and that the plaintiff did not mention the alleged agreement to either Willard Hanson or his mother, Esther Hanson, who were his relatives, a nephew and a sister, until June, 1951, after publicity had been given to the Kershaw and Kopplin cases, supra; and that Harold Hanson, during his lifetime, never mentioned the alleged agreement to his son, Willard, or to his wife, Esther, the trial court’s findings of fact, based upon all the circumstances and the evidence is fully justified.

In the case of Wheeler v. Boyer Fire Apparatus Co., 63 N.D. 403, at page 417, 248 N.W. 521, 526, which was an action involving the modification of a commission contract, this court quoted with approval from Pomeroy:

“ ‘The authorities all require that parol evidence of the mistake and the alleged modification must be most clear and convincing — in the language of some judges, “the strongest possible”— or else the mistake must be admitted by the opposite party. * * * Courts of equity do not grant the high remedy of reformation upon a probability, nor even upon a mere preponderance of the evidence, but only upon the certainty of the error.’ ” 2 Pom.Eq.Jur., 4th Ed., Sec. 859, pp. 1756, 1757. (Emphasis supplied.)

In the case of Moragne v. Moragne, 234 Ala. 660, 176 So. 455, 456, the court said:

“Courts should use great caution and require a high degree of proof in cases of reformation of written instruments. Johnson v. Sandlin, 209 Ala. 430, 96 So. 223. ‘The proof must be clear, exact, and satisfactory that the writing does not express the intention, of the parties, and also as to what the parties did intend the writing should contain.’ Lipham v. Shamblee, 205 Ala. 498, 88 So. 569. See, also, 17 Alabama Digest, Release, p. 45. This rule is especially salutary in cases like this one where death has sealed the lips of the party against whom relief is sought(Emphasis supplied.)
“When many years have passed, and the parties to a transaction are dead, caution must be used in changing the deliberate language of their contracts.” Tope v. Tope, 370 Ill. 187, 18 N.E.2d 229, at page 232. See also Stormon v. Weiss, N.D., 65 N.W.2d 475, at pages 518 and 519; Hills v. Hill, 58 S.D. 556, 237 N.W. 769.
“The court should weigh the testimony, taking into consideration all of the circumstances shown by the evidence. The fact that the persons most concerned and who could have testified of their own knowledge have nearly all died is a matter to be considered in weighing the evidence and determining the facts.” 30 C.J.S., Equity, § 479a, page 874.

The trial court undoubtedly took into consideration in weighing the evidence in this case that one of the parties most concerned, Harold Hanson, was deceased, and that the attorney who prepared the deed and gave advice to the parties is also deceased.

The conclusion of the trial court that the deed as executed expressed the real intention of the parties when executed, was justified by the evidence. It cannot be said that the evidence is so clear, satisfactory, specific and convincing as to warrant the reformation of the deed executed by the plaintiff to Willard Hanson, as grantee, resulting from the negotiations between him and Harold Hanson.

It is argued and contended that the testimony of the plaintiff, Orton Ives, stands uncontradicted and unimpeached and, therefore, should be accepted by the court in determining the issues in this case. In support of that argument the appellant cites a note in 8 A.L.R. at page 796 and quotes at page 828 from the case of Hull v. Littauer, 1900, 162 N.Y. 569, 57 N.E. 102, in support of this contention.

A great many cases are cited in the note in 8 A.L.R. at page 801 and also at page 814 announcing the rule that the testimony of a witness, though uncontradicted, is for the triers of facts, whether court or jury, who are not bound thereby.

In the case of Crilly v. Morris, 70 S.D. 584, 19 N.W.2d 836, 840, it was said:

“The rule is well settled that where an unimpeached witness testifies distinctly and positively to a fact and is uncontradicted, but the statements of the witness are grossly improbable or he has an interest in the question at issue, . Courts are not bound to blindly adopt the statements of such witness.
“ ‘Blount v. Medbery, 16 S.D. 562, 94 N.W. 428; McGill v. Young, 16 S.D. 360, 92 N.W. 1066; Union Nat. Bank v. Mailloux, 27 S.D. 543, 132 N.W. 168; Hudson v. Sheafe, 41 S.D. 475, 171 N.W. 320; Jerke v. Delmont State Bank, 51 S.D. 623, 216 N.W. 362, on rehearing 54 S.D. 446, 223 N.W. 585, at page 594, 72 A.L.R. 7; Quock Ting v. United States, 140 U.S. 417, 11 S.Ct. 733, 851, 35 L.Ed. 501; Yeager v. Chicago, R. I. & P. R. Co., 148 Iowa 231, 123 N.W. 974; Logue v. Grand Trunk Ry. Co., 102 Me. 34, 65 A. 522; Anderson v. Liljengren, 50 Minn. 3, 52 N.W. 219; Elwood v. Western Union Tel. Co., 45 N.Y. 549, 6 Am.Rep. 140; Keene v. Behan, 40 Wash. 505, 82 P. 884; Gosline v. Dryfoos, 45 Wash. 396, 88 P. 634; Atlantic Works v. Brady, 107 U.S. 192, 2 S.Ct. 225, 27 L.Ed. 438; Leavitt v. Thurston, 38 Utah 351, 113 P. 77; Sonoma County v. Stofen, 125 Cal. 32, 57 P. 681.”

In an action against motion picture thea-tre owner for death of a projection machine operator in a fire caused by negligence of fellow employee, jury was not required to accept the testimony of owner and fellow employee as to probable origin of the fire, even if such testimony is uncontradicted. Hossack v. Metzger, 8 Cir., 156 F.2d 501.

“Evidence which is uncontradicted is not necessarily to be accepted as true.” Kasper v. Baron, 8 Cir., 191 F.2d 737.

Furthermore, the Hull case cited by appellant does not support his contention, as it states, “and whether it should be accepted without question [referring to the evidence of a party] depends upon the situation as developed by the facts and circumstances and the attitude of his adversary.” Hull v. Littauer, supra, at page 103 of 57 N.E. The weight of evidence is not a question of mathematics, but depends on the effect it has in inducing belief, under all of the facts and circumstances involved. The triers of facts may and should consider and weigh all the evidence in the case, and cannot arbitrarily reject evidence, whether the witness is interested or disinterested, although they are not obliged to believe or disbelieve all, or any particular part of, the evidence presented. 32 C.J.S., Evidence, pages 1068, 1069, Weight of Evidence, § 1031.

Under all the circumstances and the evidence in this action, the fact that one of the persons most concerned, and the attorney who prepared the warranty deed, which is the subject hereof, had died, and who could have testified of their own knowledge as to the actual agreement involved, are matters to be considered in weighing the evidence. When the evidence of Orton Ives, the plaintiff, who is seeking to show that the deed which he executed to Willard Hanson does not express the true intent of the parties, 'S weighed on the basis of these considerations, although uncontradicted, it was clearly within the province of the trial court to determine that it was not so clear, satisfactory and convincing as to warrant reformation.

The judgment of the trial court is affirmed.

MORRIS, C. J., and BURKE, SATHRE, and GRIMSON, JJ., concur.


author: BURKE, Judge.

text:
    Roy G. FROLING, Plaintiff and Respondent, v. John A. ODEGARD, Defendant and Appellant.
    No. 7410.
    Supreme Court of North Dakota.
    Nov. 18, 1954.
    Odin J. Strandriess, Fargo, for defendant and appellant.
    Henry J. Stiening, Moorhead, Minn., for plaintiff and respondent.
   BURKE, Judge.

This is an action upon a real estate broker’s contract. Plaintiff is the assignee of the broker’s rights under the contract. The case was tried without a jury in the County Court of Cass County, and a judgment in favor of the plaintiff was rendered and entered. Defendant has appealed from the judgment and has demanded a trial de novo in this court.

Defendant was engaged in the business of building dwelling houses for sale. He and plaintiff’s assignor, M. J. O’Connor, a real estate broker, met fortuitously in a restaurant in Fargo about the 15th of December, 1952. A conversation ensued between the parties concerning the sale of houses which the defendant was building. As to the particular house involved in this action, defendant testified that he told O’Connor he could sell the house and that his commission would be all that he obtained above a net price of $11,000. O’Connor testified that defendant told him he could have a commission of $500 if he sold the house for a gross price of $11,500.

A day or two thereafter O’Connor brought a Mr. Oye to the house. The defendant was present at the time and although he had known Mr. Oye before, this was the first time he had met him as a prospective purchaser. Oye had known that the house was for sale prior to this visit. His father had worked upon the construction of the house and had recommended that he purchase it and on a previous occasion he had inspected it.

A day or two later O’Connor arranged to meet Mr. and Mrs. Oye at the house. Together they viewed the house and discussed terms of sale. Oye testified that he finally told O’Connor that he couldn’t pay $11,500 for the house because he didn’t have enough money for a down payment at that price, and asked O’Connor if he couldn’t get the price reduced. He said that O’Connor told him that the owner would not reduce 'the price. Mr. O’Connor testified that he did not remember this conversation, but did not deny that it took place.

A day or two before Christmas O’Connor left the city for a vacation over the Christmas Holidays. On December 29, defendant sold the house to Oye for the sum of $10,-800.

The only question in the case is whether under these facts the judgment of the court can be sustained. We are agreed that it cannot. The contract sued upon is not the usual broker’s contract under which the broker receives a fixed percentage of the gross price obtained. Accepting as true the broker’s testimony as to its terms,, the contract was much more limited in character. Its sole content was that the broker was to receive a $500 commission if he procured a buyer who would pay a price of $11,500 for a new house then in process of completion by the owner. Under the broker’s testimony there was no agreement whatever as to what the commission should be in the event that he found a purchaser who would pay less than $11,500. The contract was to pay the broker a stated fixed sum as his commission if he obtained the stipulated price for the house, and nothing more.

If we accept as sufficient, the proof that the broker procured Mr. Oye as a prospective buyer of the house, the evidence is nevertheless uncontradicted that Mr. Oye notified the broker that he would not and could not pay $11,500 for the house and that the broker refused to negotiate with the owner for the purpose of securing a reduction in price. The broker’s refusal to negotiate is evidence that he fully understood the limited nature of his contract.

In Grangaard v. Betzina, 33 N.D. 267, at page 270, 156 N.W. 1035, at page 1035, this court said:

“It is well settled, indeed, in North Dakota, that when a man agrees to pay a commission in consideration of the receipt of a certain price, he means what he says, and nothing more; and the fact that one has agreed .to pay $1 per acre if the broker sells his land for $50 an acre does not make him liable for such commission and under such contract if he afterwards sells the land for $48 an acre, and even to a person presented by the broker, provided that the person has positively refused to purchase at $50 and the seller has in no way prevented the broker from perfecting the sale of such land at the said sum.”

In support of this statement the court cited; Anderson v. Johnson, 16 N.D. 174, 112 N.W. 139; Fulton v. Cretian, 17 N.D. 335, 117 N.W. 344; Terry v. Bartlett, 153 Wis. 208, 140 N.W. 1133; Good v. Erker, 170 Mo.App. 681, 153 S.W. 556; Gage v. Billing, 12 Cal.App. 688, 108 P. 664; Montgomery v. Slater, 87 Kan. 848, 126 P. 1085; Steere & Ballah v. Gingery, 21 S.D. 183, 110 N.W. 774; Paulson v. Reeds, 33 N.D. 141, 156 N.W. 1031. The principle of law, above laid down, applies with full force to the facts in the instant case.

Plaintiff contends that the rule, which the opinion in Grangaard v. Betzina, supra, announces as established in this state, was modified in the later case of Red River Valley Land Co. v. Hutchinson, 41 N.D. 193, 170 N.W. 317, wherein a commission was allowed to a real estate broker. In the opinion in that case the court distinguished it from the case of Grangaard v. Betzina, saying 41 N.D. at page 199, 170 N.W. at page 319:

“The case at bar is likewise clearly distinguishable from the case of Gran-gaard v. Betzina, supra, in that the parties in the latter case were dealing upon the basis of a certain price per acre, whereas in the instant case throughout the negotiations it appears that the parties regarded rather the aggregate consideration of the sale, the defendant never stating the minimum net aggregate upon which he would be willing to pay the stipulated commission.”

In the instant case the owner did state the minimum net aggregate upon which he would be willing to pay the stipulated commission. Thus the facts which distinguish the Grangaard case from the Red River Valley Land Co. case also distinguish this case from the Red River Valley Land Co. case, and that case therefore has no application here.

The judgment of the county court is reversed.

MORRIS, C. J., and P. O. SATHRE and G. GRIMSON, JJ., concur.

JOHNSON, J., did not participate.


author: PER CURIAM.

text:
    Harold HAALAND, J. W. Mueller, Otis K. Schlak, Herbert Adam, Henry Severson, Marion Swanson, Gretha Hooke, Richard Pederson, Marion Rearick, B. K. Holum, Emil Sitz, John Dethloff and Kyle Miller, Plaintiffs and Respondents, v. VERENDRYE ELECTRIC COOPERATIVE, a corporation, "Rusty" Melford Hanson as its manager, Lawrence Erickson, Glenn Pace, Leon Birdsall, Nels Solheim, Axel Kongslie, Frank Bruner, Leonard Smestad, Leslie M. Pederson and Myron Shook, acting Directors of said corporation, Defendants and Appellants.
    No. 7483.
    Supreme Court of North Dakota.
    Nov. 18, 1954.

      Ilvedson, Pringle & Herigstad, Minot, and Heringer, Nelson & McClintoclc, Rugby, for applicants.
    Waldron & Kenner, Minot, for respondents.
   PER CURIAM.

This is an original application to the supreme court wherein the defendants and appellants ask this court to issue an order staying execution of a judgment entered against the defendants on September 21, 1954, and staying all proceedings thereunder.

This litigation is in the form of a summary proceeding maintained and determined under the provisions of Section 10-0518, ND'RC 1943:

“Upon the application of any person or body corporate aggrieved by any .election held by any corporate body, or any proceedings thereof, the district judge of the judicial district in which such election is held must proceed forthwith summarily to hear the allegations and proofs of the parties or otherwise inquire into the matters of complaint, and thereupon to confirm the election, order a new one, or direct such other relief in the premises as accords with right and justice. Before any proceedings are. had, five days’ notice thereof must be given to the adverse party or those to be affected thereby in such manner as the court may direct.”

After a trial had on June 28, 1954, judgment was entered pursuant to the order of the trial court determining these things: an attempted amendment of the bylaws by the board of directors on April 19, 1954, abolishing proxy voting was null and void and the old section of the bylaws permitting proxy voting was valid and subsisting. It was held that at the annual stockholders meeting on June 3, 1954, the declared election of nine directors of the corporation is null and void ab initio and of no force and effect and those directors are ousted from office. It was further determined that certain other persons had been elected directors at the annual meeting. The judgment was declared to be self-executing.

On September 22, 1954, on application by counsel for the defendants, the trial court entered an order staying all proceedings on the judgment for a period of thirty days from the date of the entry of the order and setting the amount of the stay bond at $250. The defendants served and filed an appeal bond and undertaking on appeal. The record on appeal is in the course of being perfected. On October 16, 1954, the trial court denied a motion to further extend the stay of proceedings and execution of the judgment; whereupon the defendants, on October 18, 1954, applied for an order to show cause directed to the plaintiffs why their application for a stay by this court should not be granted. We stayed all proceedings temporarily and heard the parties through their respective counsel on both briefs and oral argument.

It is contended by the plaintiffs and respondents that the judgment is self-executing; that there is no statutory provision for the stay of such judgment by supersedeas or otherwise; and that the supreme court has no jurisdiction or power to interfere with the operation of the self-executing judgment pending appeal. It is further contended that, if it should be determined that the supreme court does have power to stay further proceedings, the supreme court in the exercise of its judicial discretion should not under the circumstances here presented grant a stay or otherwise interfere with the effectiveness or operation of the judgment pending appeal.

The first question to be decided is whether we have any specific statute under which the appellants are entitled to a stay of the execution of the judgment appealed from. It is urged that the statute most nearly applicable to the situation in this case is Section 28-2716, NDRC 1943, which provides:

“If the judgment appealed from directs the doing of any particular act or thing and no express provision is made by statute in regard to the undertaking to be given on appeal therefrom, the execution thereof shall not be stayed by the appeal therefrom unless an undertaking is entered into on the part of the appellant, in such sum as the court shall direct, and by at least two sureties, to the effect that the appellant will pay all damages which the opposite party may have sustained by not doing the particular thing or act directed to be done by the judgment appealed from and to such further effect as such court in its discretion shall direct.”

The judgment in this case seems to have been carefully drawn so that it does not direct the doing of any particular act or thing. Without declaring that anything shall be done or shall not be done, it determines that a purported amendment to the bylaw is void and that the old bylaw is still in effect and that the election of the defendant directors is void and they are ousted. Certain plaintiffs are declared to be the directors of the Verendrye Electric Cooperative, Incorporated. It then provides :

“That the Judgment herein is declared to be self-executing and effective from and after the time of filing in the office of the Clerk of District Court of McHenry County, Towner, North Dakota.”

We have reached the conclusion that this judgment is so worded that it does not fall within the provisions of Section 28-2716, NDRC 1943 -and that the defendants are not entitled to a stay upon statutory grounds.

Our next question is whether this judgment is of such a nature that it cannot be stayed by an order of this court during the pendency of an appeal from the judgment. The respondents contend that this judgment is in the nature of a judgment in quo warranto and is self-executing and that a judgment in quo warranto may not be stayed. Putting aside for the moment the fact that this judgment was rendered in a summary proceeding specially provided for in Section 10-0518, NDRC 1943, above quoted, we turn to a brief consideration of quo warranto and our statutory actions in place of quo warranto provided by Chapter 32-13, NDRC 1943. In State ex rel. Sathre v. Roberts, 67 N.D. 92, 269 N.W. 913, 108 A.L.R. 37, this court declared that Section 7969 et seq., Complied Laws 1913 (now Chapter 32-13, NDRC 1943)

"providing that the remedies formerly attainable by writ of quo warranto, and proceedings by information in the nature of quo warranto, may be obtained by a. civil action in the district court, does not abolish the said writ of quo warranto, or proceedings by information in the nature of quo war-ranto, but is cumulative and additional procedure accomplishing the same results by a civil action.”

That case involved the right to the public office of county judge which was challenged in a quo warranto proceeding as distinguished from: the statutory action. With respect to the proceeding in that case, this court said:

“A judgment in- quo warranto proceedings of ouster from a public office divests the person ousted of all authority, is self-executing, and not suspended by an appeal bond or super-sedeas.”

This statement is in accordance with .general authority. 3 Am.Jur., Appeal and Error, Section 565. It is applicable to quo warranto proceedings of ouster from a public office and is no authority for the contention that this court does not have power to stay a judgment rendered' in the summary statutory proceeding provided by Section 10-0518, NDRC 1943.

We turn now to Chapter 32-13, NDRC 1943, which provides for civil actions in place of quo warranto. The. first section of this chapter, 32-1301,' states:

“The remedies formerly attainable by thé writ of scire facias, the writ of quo warranto, arid proceedings by information in the nature of quo war-ranto may be obtained by civil action in the district court under the provisions of this chapter and of chapter;-14 of the title Corporations.”

The statutory provision for the summary proceedings resulting in the judgment against which this stay is sought is a part of Chapter 10 of the title, Corporations, and bears no relation to statutory proceedings provided by Chapter 32-13, NDRC 1943. The latter chapter specifically provides ’ that the action • contemplated by it will lie' when any person shall usurp any office in a corporation created by the authority of this state, Section 32-1303. Judgment may be rendered in this proceeding upon the right of the defendant and also upon the right of the person alleged to be entitled to the office or only upon the right of the defendant. Section 32-1307, which obviously applies to a public office of the state or its subdivisions, provides that

. “If judgment is rendered upon the right of the person alleged to be entitled to the office and the same is in favor of such person, he shall be entitled, after taking the oath of office and executing such official bond as may be required by law, to take upon himself the execution of the office, and it shall be his duty immediately thereafter to demand of the defendant in the action all the books and papers in his custody ©r within his power, belonging to the office from which he shall have been excluded.”

That such a judgment, is not completely self-executing is obvious from the reading of the next section, 32-1308:

“If the defendant refuses or neglects to deliver any of the books or papers demanded, as prescribed in section 32-1307, he is guilty of a misdemeanor, and the court, or a judge thereof, by order, may put the person entitled to the office in possession thereof and of all the books and papers belonging thereto, and any party refusing to deliver the same, when ordered as aforesaid, shall be punished as for a contempt.”

Thus it appears that such a judgment is not self-executing to the extent that failure to comply does not subject the defendant to immediate contempt. It is not until the court or a judge thereof by order has put the person entitled’to the office in possession that the party refusing to deliver possession shall be punished for a contempt. It- should also be noted that the failure to vacate the office prior to demand is not made a misdemeanor but refusal to turn over all the books and papers in the custody or power of the defendant upon demand of the victor who has taken the oath and executed the bond required by law is punishable. It would seem that this provision is not applicable where an office in a private corporation is involved. 13 Cal.Jur.(2d), Corporations, Section 252; Foster v. Superior Court, 115 Cal. 279, 47 P. 58.

We call attention to these statutory provisions in order that they may be compared with the judgment, which it is contended is completely self-executing in the present summary procedure. They point to the conclusion that Section 10-0518, NDRC 1943, does not contemplate a non-stayable summary judgment.

In Smith v. Reid, 60 S.D. 128, 244 N.W. 81, 83, the court had before it a motion for an order of the supreme court staying all proceedings in the case and preserving the status quo until the merits could be determined on appeal. Reid had been ousted from the office of commissioner of the City of Sioux Falls in proceedings had pursuant to statutes which provided that the remedies formerly obtainable by writ of quo warranto and proceedings in the nature of quo warranto could be obtained by a civil action. Reid appealed but was denied a stay in the lower court. On application to the supreme court the stay was granted. The court said:

“We believe that appellant is right in his position that this court has an inherent power, in furtherance of the effective exercise of its appellate jurisdiction, to preserve the status quo of parties litigant pending appeal. Our statutes with reference to stay pending appeal relate entirely to the power and authority of the trial court. Over and above that power, there is, we think, the inherent discretionary power of the appellate court, above referred to, which power the Legislature has never attempted to limit, if indeed it could be subject to legislative impairment. * * * Not only has the Legislature of this state made no attempt to limit the inherent power of this court to issue such writs and orders as circumstances may require in aid of its appellate jurisdiction, but such power has been specifically recognized by section 2105, R.C. 1919, reading as follows: ‘Its original jurisdiction extends to all writs which by law may issue from this court, and to all writs necessary to the exercise of its appellate jurisdiction.’ ”

The following provisions of the North Dakota Constitution are pertinent:

“Section 86. The supreme court, except as otherwise provided in this constitution, shall have appellate jurisdiction only, which shall be co-extensive with the state and shall have a general superintending control over all inferior courts under such regulations and limitations as may be prescribed by law.
“Section 87. It shall have power to issue writs of habeas corpus, mandamus, quo warranto, certiorari, injunction and such other original and remedial writs as may be necessary to the proper exercise of its jurisdiction, * * *y>

Pursuant to the above quoted provisions of our constitution, the legislature has seen fit to provide:

Section 27-0204, NDRC 1943. “The supreme court may exercise appellate jurisdiction only, except when otherwise specially provided by law or by the constitution. Such court, in the exercise of its original jurisdiction, may issue writs of habeas corpus, mandamus, quo warranto, certiorari, and injunction. In the exercise of its appellate jurisdiction, and in its superintending control over inferior courts, it may issue such original and remedial writs as are necessary to the proper exercise of such jurisdiction.”-

In State ex rel. Barnard v. Board of Education, 19 Wash. 8, 52 P. 317, 318, 40 L.R.A. 317, 67 Am.St.Rep. 706, charges were filed with the board of education of the City of Seattle seeking the removal of one Barnard as superintendent of schools. An application was made to the superior court for a writ of prohibition. That court after a hearing quashed the writ. Barnard appealed from the order quashing the writ and asked the trial court to fix the amount of a supersedeas bond. The trial court held that the stay would affect only the execution tor costs and that the judgment could not be superseded. The board, which included a member who was objectionable to the appellant, proceeded to hear the charges. Pending the appeal the superintendent applied to the supreme court for an order of supersedeas. After holding that the appeal bond did not, under the Washington statutes, operate to suspend or supersede the judgment quashing the alternative writ, the court said:

“But we think that this court, in the exercise of its discretion, by virtue of its inherent powers as an appellate tribunal, can issue an order of supersedeas to preserve the status quo of the parties, pending the determination of the appeal upon its merits.”

The court then quoted a constitutional provision empowering the court to issue certain writs “ ‘and all other writs necessary and proper to the complete exercise of its appellate and revisory jurisdiction’ ” Const, art. 4, § 4, and held that under this provision of the constitution “for the purpose of making that appeal effective, and to insure the complete exercise of this court over that appeal, it becomes necessary and proper to supersede the judgment, otherwise the right to appeal which the statute has given would be of no avail to the appellant, for if the board of directo*-* in the meantime were to proceed to remove him, when the case finally reached this court on appeal it would have to be dismissed for want of merit, because the trial on merit would already have terminated.”

It is clear to us that under the provisions of Section 87 of the North Dakota Constitution and Section 27-0204, NDRC 1943, this court has the power to issue such original and remedial writs as are necessary to the proper exercise of its appellate jurisdiction. This leads to the final questions as to whether the order or writ sought by the defendants and appellants falls within that category and, if it does, should we in the exercise of our discretion issue such a writ?

Black’s Law Dictionary, Fourth Edition, defines “remedial” as “Affording a remedy; giving the means of obtaining redress. Of the nature of a remedy; intended to remedy wrongs or abuses, abate faults, or supply defects. Pertaining to or affecting the remedy, as distinguished from that which, affects or modifies the right.” A writ of this court which stays proceedings under a judgment in the court below and preserves the status quo as between the parties with respect to the controversy is clearly a remedial writ. The action in this court sought by the defendants and appellants seeks such a remedy pending the determination of the correctness of the judgment in an appeal to this court.

We revert again to the point that this judgment was rendered in a summary proceeding under a special statute. The proceeding is neither in quo warranto nor a statutory action in place of quo warranto under Chapter 32-13, NDRC 1943. It applies only to elections held by a corporate body or any proceedings thereof and the judge hearing the case may confirm the election, order a new one, or .direct such other relief in the premises as accords with right and justice. There is no question that the action of the judge is reviewable in the supreme court on appeal. An unusual difficulty arises in this case from the form of the judgment rendered in the trial court. It determines that a certain, purported amendment to the bylaws of the corporation is void; that the declared result of the election is void; that the directors that were declared to be elected were not elected at all but that certain other persons were actually elected. It does not direct that any act should be done by any of the parties nor does it prohibit the doing of any act. It thus escapes falling within any of our statutory provisions with regard to supersedeas. The judgment nevertheless declares itself to be self-executing. If that means, as the plaintiffs and respondents contend, that the board of directors declared by the court to be elected may immediately take over the control and operation of the corporation pending the appeal and the determination of the correctness of the judgment appealed from, it appears to us that, should the judgment be reversed, the appellants may be deprived of a part of the fruits of their successful appeal. Foster v. Superior Court, 115 Cal. 279, 47 P. 58. The new board would be in control of the corporation without surety and without assurance of being able or willing to adequately account for their stewardship. On the other hand, should the present board be permitted to continue in office pending the appeal under an adequate supersedeas bond, a proper accounting for their stewardship will be assured, should the judgment be affirmed. It is the object of the exercise of appellate jurisdiction by this court to assure ultimate justice as far as possible to the parties concerned. It is our opinion that this can best be done by the issuance of a writ by this court in aid of its appellate jurisdiction directing that all further proceedings in the court below be stayed under proper bond and that the declaration of the trial court that the judgment be self-executing be suspended in its effect until the determination by this court of the appeal on the merits.

It is therefore ordered that the present temporary order staying proceedings will continue in force for fifteen days after the date of filing this opinion. If within fifteen days the defendants and appellants file with the clerk of this court an undertaking in the sum of $2,000 .conditioned upon the payment of any damages which the plaintiffs and respondents may suffer by reason of a stay of proceedings and the preservation of the status quo between the parties, in the event the judgment appealed from is ultimately affirmed by this court, which undertaking shall be executed on behalf of the defendants and appellants by a surety company authorized to do business in this state or by at least two sureties who shall qualify as prescribed by Section 32-0201, NDRC 1943, a writ of supersedeas will issue staying enforcement of the judgment in conformity with this • opinion.

MORRIS, C. J., and BURKE, SATH-RE, JOHNSON, and GRIMSON, JJ., concur.


author: CARTER, Justice.

text:
    Timothy RINGELBERG, Administrator of the Estate of Danielle Ringelberg, Zachary Ringelberg, by his Next Friend, Timothy Ringelberg, Christopher Ringelberg, by his Next Friend, Timothy Ringelberg, and Timothy Ringelberg, Individually, Appellants, v. EMC INSURANCE GROUP, INC., an Iowa Corporation, Appellee.
    No. 02-0163.
    Supreme Court of Iowa.
    April 2, 2003.
    Michael J. Jacobsma of Klay, Veldhuizen, Bindner, De Jong & Jacobsma, P.L.C., Orange City, for appellants.
    Mark L. Tripp and David N. May of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellee.
   CARTER, Justice.

Zachary Ringelberg, Christopher Ringelberg, and the estate of their deceased sister, Danielle Ringelberg, appeal from the decision in a declaratory-judgment action that interpreted the uninsured-motorist coverage in a family auto policy as providing only minimum limits. Although the policy in question had uninsured-motorist coverage with limits of $250,000 per person and $500,000 per accident, endorsements to the policy provided a step-down of that limit to the minimum limit provided by law, i.e., $20,000 per person and $40,000 per accident, in the event that the liability coverage under the policy was not available because of a policy exclusion. The policy had an endorsement that excluded liability coverage with respect to claims by family members. Appellants urge that the step-down clause is impermissible under Iowa Code section 516A.2 (2001) because it does not serve the purpose of preventing duplication of benefits. We disagree with that contention and affirm the judgment of the district court.

Kari Ringelberg lost control of her vehicle, and the single-car accident that followed resulted in the death of her daughter, Danielle, and injuries to her two sons, Zachary and Christopher. All of the children were minors and resided with their parents. The Ringelberg family was insured under a family automobile insurance policy issued by defendant, EMC Insurance Group (EMC). An endorsement to the policy contained a family-member exclusion with respect to liability coverage. Although the policy’s uninsured-motorist coverage had limits of $250,000 per person and $500,000 per accident, another endorsement to the policy provided that, if the policy’s liability coverage was not available as a result of a policy exclusion, the uninsured-motorist limit was stepped down to $20,000 per person and $40,000 per accident, the minimum limit mandated by the Iowa financial responsibility law, Iowa Code § 321A.21(2)(b).

The appellants rejected EMC’s offer to pay the minimum limit and instituted a declaratory-judgment action seeking a judicial determination that the step-down provision in the policy endorsement violated Iowa Code section 516A.2 and was against public policy. The district court granted summary judgment in favor of EMC.

The appellants urge that the step-down endorsement reducing the policy limits for uninsured-motorist coverage is contrary to the goals and limitations of Iowa Code section 516A.2. Although this court has previously upheld a similar step-down provision in Krause v. Krause, 589 N.W.2d 721 (Iowa 1999), they seek to avoid the result in Krause by urging the opinion in that case only considered whether the step-down provision at issue there was ambiguous or frustrated the reasonable expectations of the policyholder. Appellants urge that their public-policy argument based on the goals and limitations of chapter 516A presents an issue of first impression. Assuming that this is correct, we are convinced that this argument fails.

Section 516A.2 provides:

Except with respect to a policy containing both underinsured motor vehicle coverage and uninsured or hit-and-run motor vehicle coverage, nothing contained in this chapter shall be construed as requiring forms of coverage provided pursuant hereto, whether alone or in combination with similar coverage afforded under other automobile liability or motor vehicle liability policies, to afford limits in excess of those that would be afforded had the insured thereunder been involved in an accident with a motorist who was insured under a policy of liability insurance with the minimum limits for bodily injury or death prescribed in subsection 11 of section 321A.1. Such forms of coverage may include terms, exclusions, limitations, conditions, and offsets which are designed to avoid duplication of insurance or other benefits.

Appellants urge that this court recognized in Gentry v. Wise, 537 N.W.2d 732 (Iowa 1995), that, in order to reduce the limits of uninsured-motorist benefits payable to an injured party as a result of policy conditions, those conditions must serve to avoid a duplication of benefits. That type of avoidance, appellants urge, is not an attribute of the step-down provision, in the EMC policy.

The issue in the Gentry case was whether a setoff against uninsured-motorist benefits as a result of social security disability benefits was limited to social security benefits attributable to the accident or occurrence giving rise to the uninsured-motorist claim. We held that the right of setoff was so limited and referred to the duplieation-of-benefits language in section 516A.2. Appellants argue that, because the limit on uninsured-motorist coverage in the Gentry case was well above the minimum limit, the decision stands for the proposition that any reduction of the stated policy limits may only be enforced if the reduction serves to prevent duplication of benefits.

In reassessing the issues presented in Gentry, we believe the result arrived at in that case would more properly have been based solely on an interpretation of the insurance contract rather than a resort to the duplication-of-benefit provisions in section 516A.2. As long as the conditions of an uninsured-motorist policy reducing the policy limits do not reduce those limits below the minimum amount provided by law, this is a matter to be decided between the contracting parties based on the language of their agreement. See Preferred Risk Mut. Ins. Co. v. Federated Mut. Ins. Co., 611 N.W.2d 283, 285-86 (Iowa 2000) (policy condition reducing uninsured-motorist benefits for certain insureds to zero was only effective to reduce the stated policy limit to the minimum limit provided by law). In the present case, the agreement clearly limits uninsured-motorist coverage to the minimum limit allowed by law based on the absence of liability coverage due to a policy exclusion.

We have considered all issues presented and conclude that the judgment of the district court should be affirmed.

AFFIRMED.

      . That endorsement provided: We do not provide Liability Coverage for any "insured” for "bodily injury” to you or any "family member.”

      . That endorsement provided:
      If Uninsured Motorists Coverage is payable because liability coverage for "your covered auto” ... is excluded for damages sustained in the accident:
      1. That part of the limit of liability shown for each person for Uninsured Motorists Coverage in the Declarations that does not exceed the limit specified in the financial responsibility law of Iowa, is our maximum limit of liability....
      2. Subject to this limit for each person, that part of the limit of liability shown in the Declarations for each accident for Uninsured Motorists Coverage that does not exceed the limit specified in the financial responsibility law of Iowa is our maximum limit of liability for all damages arising out of "bodily injury” resulting from any one accident.