David Properties, Inc. v. Selk

Facts

On January 18, 1957, Selk (Plaintiff) sold 320 acres of land to David Properties, Inc. (Defendant) for $50,000. Defendant paid $5,000 in cash and executed a purchase-money mortgage, under which Defendant would pay the remaining $45,000 in five installments of $9,000. While Defendant made payments on the property, Plaintiff continued to live in a small dwelling located on the 320 acres. On October 20, 1959, Defendant and Plaintiff signed a written lease allowing Plaintiff to remain on the property until December 31, 1959, in consideration for $1. Plaintiff did not vacate the dwelling by December 31, 1959. He stayed on the premises until November 27, 1961, nearly twenty-three months after the lease required him to vacate. On February 17, 1960, Defendant sent a letter to Plaintiff instructing him to vacate the property and demanding that Plaintiff pay $300 per month for use of the property after December 31, 1959. Defendant wrote Plaintiff again on February 16, 1961, instructing Plaintiff to leave and including an invoice for unpaid rent at $300 per month. Plaintiff received both letters but did not respond. On February 14, 1962, Defendant’s last $9,000 installment to Plaintiff was about one month overdue. Plaintiff wrote to Defendant demanding the $9,000 plus interest. Defendant responded, acknowledging that it owed Plaintiff $9,000 plus $405 in interest, but arguing that it was entitled to subtract $6,600 in Plaintiff’s unpaid rental fees at $300 per month for twenty-two months. Plaintiff sued to foreclose on the property. Defendant counter-claimed, demanding the unpaid rental fees. After the final hearing, the chancellor found that Plaintiff was an old man who lived in what amounted to a shack, and that his use of the property did not injure Defendant. The chancellor then dismissed Defendant’s counter-claim.