PROPERTY
KLEEB v. KLEEB: EQUITABLE CONVERSION-AN
APPARENT CHANGE IN THE ALLOCATION OF
THE BURDEN OF PROOF AS TO
LIABILITY FOR ACCUMULATED
INTEREST
INTRODUCTION
In Kleeb v. Kleeb,1 the Nebraska Supreme Court dealt with the
respective rights of a vendor and vendee when a land sales con2
tract to which both are parties has been delayed in performance.
At issue were: (1) the responsibility for payment of real estate
taxes and the right to income derived from the land; (2) the right to
the interest which had accrued on the downpayment; and (3) the
right to interest which had accrued on the unpaid balance of the
purchase price during the delay in performance while the disputed
land sales contract was on appeal.3
The first two issues were agreed upon by both the majority
and the dissent.4 The third issue, however, prompted a three
member dissent. 5 Though the terminology was not explicitly used
in the text of either opinion, the adjudication of this third issue
involved two legal concepts, equitable conversion and burden of
proof.
Interestingly, both the majority and the dissent discuss many
of the same rules of equitable conversion and both rely heavily on
the same Nebraska case, McCleneghan v. Powell.6 To understand
why the Kleeb court had such a split of opinion, it is necessary to
consider the facts of Kleeb in light of the role of equitable conversion and the court's distribution of the burden of proof. In addition, an analysis of similar cases from other jurisdictions, and the
rationales expressed therein, is helpful, and supports the conclusion that the majority opinion in Kleeb is better reasoned.
1. 213 Neb. 537, 330 N.W.2d 484 (1983).
2. Id. at 538, 330 N.W.2d at 485.
3. Id. at 538-39. The income from the land was the landlord's share of crops
grown on the property while the case was on appeal. Id.
4. Id. at 543, 330 N.W.2d at 487.
5. Id. at 543-44, 330 N.W.2d at 487-88. Justice Boslaugh wrote the dissent and
was joined by Justices McCown and Hastings.
6. 105 Neb. 306, 180 N.W. 576 (1920).
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FACTS
Kleeb v. Kleeb originally appeared before the Nebraska
Supreme Court in 1982, 7 where the court dealt with the question of
whether the district court had reached the proper result in confirming a referee's sale of certain inherited land as part of a partition action.8 The sale of the land had been required as a result of
the referee's unsuccessful attempt to divide the land among the
heirs; after the trial court had confirmed this sale, two of the vendor-heirs filed a notice of appeal and what purported to be a supersedeas bond.9 Their objections became the substance of the first
appeal of Kleeb to the Nebraska Supreme Court, 10 where the district court's confirmation of the referee's sale was affirmed." The
issues in the second Kleeb case arose because of the extension of
the period between downpayment and final payment of the
purchase price, such delay being caused by the aforementioned
appeal from the referee's sale.
On its second appearance before the Nebraska Supreme
Court, the three issues involved in Kleeb were: (1) who was responsible for the real estate taxes that accrued on the land while
the case was on appeal (1980 through 1981) and who was entitled to
the rental income 12 for those years; 13 (2) who was entitled to the
interest earned on the downpayment during the appeal; 14 and
7. Kleeb v. Kleeb, 210 Neb. 637, 316 N.W.2d 583 (1982).
8. Id. at 638, 316 N.W.2d at 585.
9. 213 Neb. at 538, 330 N.W.2d at 485. Owners Wilma Askey and Arden Askey
filed the appeal and the additional owners Stewart Kleeb, Allene Kleeb, Velma
Jezbera and Frank Jezbera did not join in this appeal. Id.
A supersedeas bond is defined as "[a] bond required of one who petitions to set
aside a judgement or execution and from which the other party may be made whole
if the action is unsuccessful." Black's Law Dictionary 1280 (5th ed. 1979). Section
25-1916 Neb. Rev. Stat. (reissue 1979) provides for the filing of a supersedeas bond.
The Kleeb majority ruled that a supersedeas bond does not set aside an order of the
court but merely suspends its enforcement. 213 Neb. at 540, 330 N.W.2d at 486. The
Kleeb court noted, 'The general rule is that the effect of a supersedeas bond is to
suspend proceedings and preserve the status quo pending the determination of the
appeal. It suspends all further proceedings on the judgment of decree appealed
from, but does not, like a reversal of the judgment by this court, annul the judgment
itself." Id. (quoting Guaranty Fund Comm'n v. Teichmeier, 119 Neb. 387, 229 N.W.
121 (1930)).
10. Id. at 639, 316 N.W.2d at 586.
11. Id. at 638-39, 316 N.W.2d at 585.
12. Id. 213 Neb. at 538, 330 N.W.2d at 485. During the pendency of the appeal the
referee leased the property for farming on a sharecrop arrangement, which resulted
in income for the years 1980 and 1981.
13. Id. at 538-39, 330 N.W.2d at 485. "Lauritzen assigns as error the trial court's
awarding of the landlord's share of the crops to the original owners."
14. Id. at 538, 330 N.W.2d at 485. 'The trial court also ordered that the interest
earned on the downpayment held by the referee during the time of appeal should
be paid to the purchaser." Id.
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PROPERTY
(3) was the vendee liable to the vendor for the interest earned on
the unpaid balance of the purchase price while the case was on
appeal?15
Regarding the first issue, the trial court had found that the
vendors were responsible for the real estate taxes and entitled to
the rental income derived from the land. 16 The Nebraska Supreme
Court reversed, holding the vendee responsible for the taxes as
7
well as awarding him the rental income.'
As to the second issue, the trial court had determined that the
interest earned on the downpayment of the purchase price during
the appeal should be awarded to the vendee.' 8 The Supreme
Court again reversed the trial court decision, awarding this interest to the vendors. 19
The court stated, however, that it would not issue an order on
the third issue regarding the liability of the vendee to the vendor
for the interest earned on the unpaid balance of the purchase
price. 2° This decision was due to the lack of evidence presented on
this point.2 1 It was this issue that provoked the three-member dissent in Kleeb. The dissent claimed that the vendee was liable to
the vendor for the interest on the unpaid balance of the purchase
price.2 2 The dissent took the position that "[i]f the income from
the property is to be awarded to the purchaser, he should be required to account for interest on the unpaid balance of the
23
purchase price."
BACKGROUND
Though the terminology was not specifically stated in the
text, 24 the majority's rationale in Kleeb follows the general princi15. Id. at 541, 330 N.W.2d at 486. '"That leaves us with the final question of
whether the purchaser herein should be required to pay interest on the balance of
the purchase price from the date of confirmation to the present." Id.
16. Id. at 538, 330 N.W.2d at 485.
17. Id. at 541, 330 N.W.2d at 486.
18. Id. at 538, 330 N.W.2d at 485.
19. Id. at 541, 330 N.W.2d at 486.
20. Id. at 543, 330 N.W.2d at 487. The question of interest on the unpaid balance
was not presented to the trial court and thus it made no finding on this matter. Id.
at 541, 330 N.W.2d at 486-87. Appellee Stewart Kleeb, by way of cross-appeal at the
Supreme Court level in Kleeb asserted that the vendors were entitled to interest on
the unpaid balance of the purchase price. Id. at 539, 330 N.W.2d at 485.
21. Id. at 542-43, 330 N.W.2d at 487.
22. Id. at 543, 330 N.W.2d at 487 (Boslaugh, J., dissenting). The dissent stated:
'The majority opinion fails to do equity between the parties because it awards both
the use of the unpaid purchase price and the income from the land to the purchaser." Id.
23. Id. at 544, 330 N.W.2d at 488.
24. Though the Kleeb court doesn't specifically use the phrase "equitable con-
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ples of the doctrine of equitable conversion. 25 Equitable conversion 26 is a legal fiction in which equitable title to land is said to
pass to a purchaser as soon as a valid, enforceable obligation for
the sale of the realty is signed.2 7 "Equitable conversion thus treats
the parties as having changed positions, the original estate of each
having been converted-that of the purchaser from personal into
real property, and that of the vendor from real into personal
property.
' 28
The doctrine of equitable conversion rests on several principles. The first is the maxim that "equity considers that done which
ought to be done. '29 That is, equitable conversion accomplishes
version," the court does allude to the doctrine as well as apply its principles. First,
the court states, "[oIn June 6, 1980, the purchaser became the equitable oumer of
Id. at 540, 330 N.W.2d at 486 (emphasis added). Second, the
the property . ."
court's ruling on who should pay the real estate taxes for 1980 and 1981 and who
should be entitled to the rental income for those years is merely what the court
states would have happened had the notice of appeal not been filed: "Absent the
filing of a notice of appeal, the purchaser in this case would have been entitled to
the crops for the years 1980 and 1981 and would have been obligated to pay the
expenses, including the real estate taxes." Id. at 539, 330 N.W.2d at 485. Thus the
court is applying the essential principle of equitable conversion, treating the parties
as having "changed positions." J. CRIBBET, PRINCIPLES OF THE LAW OF PROPERTY (2d
ed. 1975). That is, the purchaser is treated as the owner of the property on the day
he contracted to buy it, June 6, 1980, not when he actually gained title. See 213 Neb.
at 539, 330 N.W.2d at 485.
25. While some may consider the topic of equitable conversion interesting,
John E. Cribbet, Dean and Professor of Law at the University of Illinois considered
the topic, "a hoary chestnut" and "a fascinating controversy which has been raging
in Anglo-American law." J. CRIBBET,supra note 28, at 147-50. The doctrine of equitable conversion has had what Cribbet called a '"profound influence" on the law of
real property in three areas in particular-creditors' rights, the devolution of property interests on the death of either the vendor or the vendee while the contract is
still executory, and the risk of loss. Id.
26. The rule of equitable conversion was first announced in Paine v. Meller, 31
Eng. Rep. 1088 (1801), a case concerning the sale of several houses which are destroyed by fire after the contract date but prior to conveyance. Id. The vendor refused to return the vendee's deposit and then sued for specific performance. Id.
The court ruled that the risk of loss should fall on the vendee, stating:
As to the mere effect of the accident itself no solid objection can be founded
upon that simply; for if the party by the contract has become in equity the
owner of the premises, they are his to all intents and purposes. They are
vendible as his, chargeable as his, capable of being incumbered as his; they
may be devised as his; they may be assets; and they would descend to his
heir.
Id. at 1089.
27. J. CRIBBET, supra note 28, at 150-51. While the doctrine of equitable conversion is usually invoked in the context of a contractual obligation to sell real property, this obligation can also arise by will or court order. C. SMrrH & R. BOYER,
SURVEY OF THE LAw OF PROPERTY 254 (2d ed. 1971).
28. J. CRmBET, supra note 28, at 151.
29. Buford v. Dahlke, 158 Neb. 39, 43, 62 N.W.2d 252, 255 (1954); In re Estate of
Wiley, 150 Neb. 898, 904, 36 N.W.2d 483, 489 (1949); Hendrix v. Barker, 49 Neb. 369, 69
N.W. 531, 532 (1896).
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PROPERTY
the results that the parties attempted to accomplish. 30 Second, the
vendor is treated as the trustee of the land for the purchaser, and
the purchaser is treated as the trustee of the purchase money for
the vendor.3 ' Third, the seller retains legal title as security for the
32
deferred installments of the purchase price.
In a case such as Kleeb, where the performance of a land sales
contract has been delayed and either the vendor or vendee sues for
specific performance, the doctrine of equitable conversion, as applied in Nebraska, recognizes the vendee as the owner of the land
from the date of the contract.33 The doctrine in this situation also
holds the vendor liable and accountable for rents and profits realized from the land and holds the vendee accountable for interest
gained on the unpaid balance of the purchase price. 34 This rule is
said to be "generally just and equitable, because between the due
date of performance and the decree the vendor usually receives
the rents and profits and the vendee usually retains and has the
' 35
use of the money requisite to pay the purchase price.
Holding the vendor accountable for rents and profits and the
vendee accountable for interest on the purchase price is the general rule.36 There is, however, an exception to the latter part of the
general rule where the vendee is not held accountable for interest
on the unpaid balance. This exception arises when the vendee
doesn't actually receive the interest from the unpaid balance, but
30. J. CRIBBET, supra note 28, at 150.
31. Buford v. Dahlke, 158 Neb. 39, 43, 62 N.W.2d 252, 255 (1954).
32. In re Estate of Wiley, 150 Neb. 898, 904, 36 N.W.2d 483, 489 (1949). See also 0.
KING, A BASIC INTRODUCTION TO THE STUDY OF PROPERTY (1971). There, the basic
effect of equitable conversion is summarized as follows: "Where parties have entered into a complete and binding agreement and before performance one or both
of the parties is prevented from performing by some act not the fault of either party,
equity will consider that the act of performance has been completed." Id. at 62.
The following example is given to show the effect of the doctrine:
A has agreed to sell blackacres [sic] to B, the deed to be delivered in thirty
days. All the terms and conditions of the sale have been agreed upon and
all that remains to be done is to exchange the deed for the money. Before
A can deliver the deed he dies. Does this mean that the whole deal is off?
It does not. Under our doctrine of equitable conversion the court would
consider that the property equitably became the property B on the day that
the contract was completed. The court would then simply order the deed
delivered to B by the proper representative of A's estate.
Id.
33. Note, Equity-EquitableConversion-RiskofAccidental Destruction Under
an Executory Contract of Convey Land, 14 NEB. L. BuL 178, 179 (1935).
34. Russell v. Western Nebraska Rest Home, Inc., 180 Neb. 728, 735, 144 N.W.2d
728, 733 (1966).
35. Beckwith v. Clark, 188 F. 171, 178 (8th Cir. 1911). See also McCleneghan v.
Powell, 105 Neb. 306, 313, 180 N.W. 576, 579 (1920) (quoting from Beckwith).
36. Russell, 180 Neb. at 735-36, 144 N.W.2d at 733; Beckwith, 188 F. at 178; Bostwick v. Beach, 105 N.Y. 662, 663, 12 N.E. 32, 33-34 (1887).
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deposits the money, to the knowledge of the vendor, and subject to
the vendor's order upon delivery of the deed.3 7 In this situation,
the vendor is accountable for the rents and profits, but the vendee
38
is not accountable for the interest on the unpaid balance price.
To hold the vendee accountable in such a situation would be inequitable. 39 This exception prevents harm from being done to the
vendee and prevents the vendor from reaping a windfall. 40 Holding the vendee accountable in this situation could reward the vendor for his own wrong in that it "would enable him by simply
refusing to perform his contract to deprive the vendee of the possession and use of the property which might yield no rents or profits and at the same time to mulct the vendee to the extent of
interest on the amount of the purchase price which he does not
' 41
receive.
An analysis of McCleneghanv. Powell,4 which both the majority and minority in Kleeb cite, 43 is a good example of how equitable
conversion is supposed to work. In McCleneghan, the vendee
(McCleneghan) entered into a contract to purchase real estate
from the vendors (Powells). 44 The vendee made the downpayment when the contract was signed, May 22, 1917, and the balance
was to be paid to the vendors, and possession delivered to the vendee on March 1, 1918. 4 5 However, the vendors informed the vendee
that they would not be able to deliver possession in March 1, 1918,
because of a lease agreement that was not to expire until March 1,
1921.46 The vendee eventually obtained title and possession on
March 1, 1919, and then sued the vendors for the rental value of the
4
land from March 1, 1918 to March 1, 1919. 7
The trial court awarded the vendee the rental values of the
land, and denied the vendor's claim for interest that had accrued
on the unpaid balance of the purchase price. 48 On appeal, the Nebraska Supreme Court reversed in part, awarding the vendors in37.
38.
39.
40.
41.
42.
43.
188 F. at 178-79.
Id.
Id.
See id.
Id. at 179.
105 Neb. 306, 180 N.W. 576 (1920).
213 Neb. at 542, 330 N.W.2d at 487 (majority); id. at 543, 330 N.W.2d at 487
(minority).
44. 105 Neb. at 307-08, 180 N.W. at 577. The agreed purchase price was $21,000
and the vendee made a downpayment of $1,000. Id. at 308, 180 N.W. at 577.
45. Id.
46. Id.
47. Id.
48. Id. February 26, 1919 was the date that the remainder of the purchase price
was paid into court by the vendee. Id.
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PROPERTY
terest on the unpaid balance of the purchase price.4 9 The court
determined that the vendee was to be treated as trustee of the unpaid purchase money and was thus chargeable for interest on the
and no benefit from the
money unless it had been appropriated
50
money had accrued to the vendee.
ANALYSIS
It is helpful to apply the doctrine of equitable conversion to
the facts and holding of Kleeb, and then to compare the Kleeb and
McCleneghan decisions. The court's findings pertaining to the first
two issues in Kleeb are consistent with the general principles of
equitable conversion. Regarding the first issue of Kleeb, if it is true
under the doctrine of equitable conversion that "[t] he estate from
the sealing of the contract is the real property of the vendee,"' S
then the court in Kleeb was correct in holding the vendee responsible for the real estate taxes as well as being entitled to the rental
income from the land from the date of the contract.5 2 As to the
second issue, the doctrine of equitable conversion "makes the
purchase money a part of the personal estate of the vendor. .... ,,53
Thus, if the purchase money is to be treated as part of the personal
estate of the vendor from the date of the contract, then the Kleeb
court was correct in holding that the vendor was entitled to the
interest earned on the downpayment from the date of the
54
contract.
In deciding the third issue, the Kleeb majority strayed from
the previously discussed application of the doctrine of equitable
conversion. According to the principles of the doctrine, the
purchase money is to be treated as part of the personal estate of
the vendor from the date of the contract. Thus not only the downpayment, but the unpaid balance of the purchase price-and any
interest derived therefrom-is to be treated as being part of the
vendor's estate.55 Contrary to this doctrine, the majority did not
hold the vendee liable for this interest.5 6 The Kleeb dissent, however, followed this rule, stating: "[T] he purchase price is the prop49. Id. at 312, 180 N.W. at 579.
50. Id. at 312-13, 180 N.W. at 579.
51. Note, Equitable Conversion by Contract, 13 COLUM. L. RE V. 368, 371 (1913)
(quoting from Seton v. Slade, 12 Eng. Rep. 108, 111 (1802)).
52. See note 17 and accompanying text supra.
53. Note, supra note 51, at 371 (quoting from Lysaght v. Edwards, 2 Ch. D. 499,
507 (1876)).
54. See note 19 and accompanying text supra.
55. Note, supra note 55, at 371.
56. 213 Neb. at 543, 330 N.W.2d at 487.
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erty of the vendor held in trust for him by the vendee." 57 The
dissent continued, noting that "[u]pon specific performance [of
the sales contract] the vendor is liable to account for rents and
profits and vendee for interest on the purchase price."58
The decision of the majority to treat only the downpayment of
the purchase price as being the property of the vendor, and not the
entire purchase price 59 can be criticized because, in addition to
not conforming with the traditional applications of the doctrine of
equitable conversion, the decision of the majority differs from that
obtained in McCleneghan, where, on essentially the same facts, the
vendor was awarded interest on the entire purchase price.6 0 The
reason for this difference, as discussed below, can be attributed to
the Kleeb majority's placement of the burden of proof.
In Kleeb the vendee escaped the payment of interest on the
unpaid balance of the purchase price because no evidence was
presented showing that the vendee had gained any interest from
6
the balance of the purchase price while the case was on appeal. '
Because of this lack of evidence, the court made no order regarding the request that the purchaser be ordered to pay interest on
the unpaid balance, thus releasing the vendee from his accounta62
bility for interest on the balance.
On the other hand, Justice Boslaugh's dissent claimed that the
vendee was liable for the interest on the unpaid balance of the
purchase price specifically because of the lack of evidence as to
whether or not the vendee derived any benefit from this money
during the appeal.63 Justice Boslaugh noted that "[in the
McCleneghan case we held that the vendor was entitled to interest
on the unpaid balance of the purchase price because the evidence
of the vendee failed to show that the vendee had either borrowed
the money or held it unused for the benefit of the vendor."6 4 Later,
57. Id. (Boslaugh, J., dissenting).
58. Id. (emphasis added).
59. Id. at 537-43, 330 N.W.2d at 484-87.
60. 105 Neb. at 312, 180 N.W. at 579.
61. 213 Neb. at 541-42, 330 N.W.2d at 486-87. The language of the court was, "we
are totally without any evidence to determine whether purchaser was obligated to
make any payments to anyone else during this time in order to keep the proceeds
on reserve for payment when needed or whether he gained any benefit by reason of
the delay." Id. at 542-43, 330 N.W.2d at 487. It was the filing of the supersedeas bond
which prevented payment of the balance: "had the Askeys not superseded the judgment and prevented the payment of the balance, payment would have been forthcoming upon delivery of the deed. It was the Askey's act which authorized
Lauritzen to withhold payment." Id. at 542, 330 N.W.2d at 487.
62. Id. at 543, 330 N.W.2d at 487.
63. Id. at 544, 330 N.W.2d at 488 (Boslaugh, J., dissenting).
64. Id. (emphasis original).
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PROPERTY
Justice Boslaugh stated: "The evidence must show that the money
was 'appropriated' to the contract and 'no benefit has accrued' to
the vendee from the unpaid money before the vendee can avoid
'65
accounting to the vendor for interest on the purchase price.
As mentioned before, the majority and minority opinions do
not differ as to when the vendee is accountable for interest on the
purchase price and when the vendee is released from this accountability. 66 The real difference between the opinions then seems to
be in the court's allocation of the applicable burden of proof,67 even
though both opinions cite McCleneghan as authority for their respective positions. The majority implicitly shifts the burden of
proof from the vendee to the vendor, thereby departing from the
allocation laid down in McCleneghan.68 Under the majority's approach the vendor is saddled with the burden of proving that the
vendee has derived a benefit from the money to entitle the vendor
to the interest.69 Conversely, the minority opinion states that it is
the vendee who has the burden of proving that he did not derive a
70
benefit from the balance in order to avoid the interest payment.
The treatment of the burden of proof in McCleneghan supports
the minority position in Kleeb. The McCleneghan court said that
the evidence that the vendee offered as to whether or not he derived benefit from the balance was "evasive and obscure" and "not
satisfactory." 7 1 Apparently the trial court in McCleneghan had released the vendee from any obligation to pay interest on the theory
that the vendee had either "borrowed or exclusively appropriated
$20,000 and that the money was held continuously from March 1,
1918, unused and in readiness to be paid to the defendants upon
fulfillment of their part of the contract, and that the Powells had
65. Id.
66. The Kleeb majority states, "Equity will not permit a vendee to enjoy the
rentals that are derived from land for which he has not paid and at the same time
permit him to escape the payment of interest to the vendor on the unpaid purchase
price unless a tender has been made of such purchase price and kept good." Id. at
542, 330 N.W.2d at 487 (quoting McCleneghan). The Kleeb minority states, "The evidence must show that the money was 'appropriated' to the contract and 'no benefit
has accrued' to the vendee from the unpaid money before the vendee can avoid
accounting to the vendor for interest on the purchase price." Id. at 544, 330 N.W.2d
at 488.
67. Volkmer, Case Notes, 1 NEB. REAL EST. L.J. 59, 64 (1983). There, the author
in discussing Kleeb v. Kleeb states: "In one sense, the majority ruling on this point
might be viewed as a pleading-and-proof problem in which the moving party simply
failed to meet the burden of proof that the law assigned to him." Id.
68. 213 Neb. at 541-43, 330 N.W.2d 486-87.
69. Id.
70. Id. at 543-44, 330 N.W.2d at 487-88 (Boslaugh, J., dissenting).
71. 105 Neb. at 311, 180 N.W. at 578.
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knowledge of this fact." 72 In reversing the trial court's ruling, the
Nebraska Supreme Court stated: "But this state of facts does not
appear in the record." 73 The court thus awarded the vendors the
74
legal rate of interest on the unpaid balance of the purchase price.
Therefore, in McCleneghan, on the basis of a lack of evidence,
the court implied that the vendee was accountable for interest on
the unpaid balance of the purchase price.7 5 In Kleeb, however, on
the very same basis of a lack of evidence, the majority reached a
76
contrary result by releasing the vendee from accountability. It
thus appears that the McCleneghan decision supports the argument of the Kleeb dissent, namely, that the vendee has the burden
of showing that he did not derive a benefit from the unpaid balance. A failure to meet this burden would leave the vendee accountable for the interest on the balance of the purchase price.
The minority opinion then gives a better interpretation of
McCleneghan in light of the facts of that case.
A more recent Wisconsin case, factually similar to McCleneghan, also supports the Kleeb dissent. In Estreen v. Bluhm,7 7 the
vendor and vendee entered into two land contracts in 1967.78 A dispute arose concerning the amount of money due under the contract and a compromise agreement was entered into.79 A dispute
then developed concerning the provisions of the compromise and
the vendee sued for specific performance of the compromise
agreement.80
The vendee, who had been receiving rents from the properties,
was awarded specific performance in 1975.81 On appeal to the
Supreme Court of Wisconsin, the vendor charged that the vendee
was liable to the vendor for interest that had accrued on the un82
paid balance of the purchase price.
The vendee claimed that he had made a tender of the purchase
72. Id. at 312, 180 N.W. at 579.
73. Id.
74. Id. The vendors were awarded the interest that had accrued from March 1,
1918 to February 25, 1919, the date the remainder of the purchase price was paid into
court. Id.
75. Id. at 312-13, 180 N.W. at 578-79.
76. 213 Neb. at 542-43, 330 N.W.2d at 487.
77. 79 Wis.2d 142, 255 N.W.2d 473 (1977).
78. Id. at -, 255 N.W.2d at 476.
79. Id.
80. Id.
81. Id. at-, 255 N.W.2d at 478. The vendee was awarded specific performance
conditioned on his making payment of the amount due, less certain real estate
taxes. Id.
82. Id.
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price. 83 The court stated: "Estreen [vendee] only showed that he
was willing and able to perform the contract according to his own
terms. There is further no showing that the money, which Estreen
claims he tendered, was placed beyond his own use. ' 84 After fail-
ing to prove that he derived no benefit from the unpaid balance of
the purchase price, the vendee was charged with interest on this
85
amount.
Placing the burden upon the vendee to demonstrate that he or
she has not retained the use and benefit of the purchase money
during the delay in performance also seems accurate in light of the
United States Court of Appeals, Eighth Circuit, case of Beckwith v.
Clark.86 There the Eighth Circuit, in applying Kansas law, stated
that between execution of a contract and the due date of performance "the vendee usually retains and
has the use of the money req87
uisite to pay the purchase price."
CONCLUSION
The minority opinion may be a better decision simply because
it is more equitable. As pointed out in the minority argument, the
majority opinion is inequitable because it awards both the use of
the unpaid purchase price and the income from the land to the
purchaser. 88 This rule is also reiterated in Estreen v. Bluhm where
the court stated that "it is inequitable to permit either party, vendor or vendee, to enjoy both the beneficial use of the property and
the use of the purchase money without being held accountable in
some manner to the other."89 Estreen also states another reason
83. Id. at-,
255 N.W.2d at 481-82.
84. Id. at -, 255 N.W.2d at 482.
85. Id. at-, 255 N.W.2d at 482-83. In the ruling the court also stated, "except in
relation to a wrongful refusal to accept a satisfactory tender of a payment, it is a
misconception that fault is a critical factor in determining to whom and upon what
amounts interest should be allowed." Id. at -, 255 N.W.2d at 482.
86. 188 F. 171 (8th Cir. 1911).
87. Id. at 178. In Beckwith, the vendor was Edwin Gaylord who entered into a
contract for the sell of land to David 0. Clark. Id. at 172. The vendor died and his
interests passed to the trustees under his will who refused to convey the property
to the vendee. Id. at 172-73. The vendee sued for specific performance and the vendors claimed that the contract for the sale of land was not valid under the statute of
frauds and that the vendee had not performed his part of the contract. Id. at 172.
The vendee was eventually victorious and was awarded specific performance, and
was awarded the rents and profits that accrued from the land from the date of the
contract until the date of the decree. Id. at 179. The vendee however, was not
charged with interest on the purchase price from the date of the contract to the date
of the decree. Id. The vendee was released from this obligation to pay the interest
since he had presented evidence that he derived no benefit from the money requisite to pay the purchase price while the land was in dispute. Id.
88. 213 Neb. at 543, 330 N.W.2d at 487 (Boslaugh, J., dissenting).
89. 79 Wis.2d at -, 255 N.W.2d at 481.
CREIGHTON LAW REVIEW
[Vol. 17
for allowing interest to the vendor. "Interest is required for the
purpose of compensating one to whom payment is due for the lack
of the use of the money." 90
Regardless of the equities involved, the minority opinion must
be viewed as the better decision in light of the fact that both arguments presume to follow the rules laid down by McCleneghan.
The minority argument gives the best interpretation of McCleneghan and that case's allocation of the burden of proof. Ironically,
while citing McCleneghan as controlling in this type of case, the
majority argument effectively overrules it.
Certainly strong arguments could be made for either allocation. 91 The court, however, should be consistent as to where the
burden of proof is allocated, and where a change is being made, the
court should at least state its reasons for so holding. Unfortunately, even the minority argument in Kleeb failed to state why it
favored placing the burden of proof upon the vendee.
Robert G. Dailey-'85
90. Id.
91. For example, C.J.S. states: "In an action involving the recovery of interest,
one who claims to be entitled to interest has the burden of establishing that
fact... ." 47 C.J.S. Interest § 84 (1982). And in an Indiana case where the plaintiffs
sought to have police pensions recomputed, the court ruled that a judgement including principal and interest in a lump sum was improper since the trial court had
no evidence to base its computation of principal and interest. The court stated:
"Plaintiffs, in order to be entitled to interest before judgment, must prove by evidence and established precedent that they are entitled to such interest, and must
furnish proper data from which the amount, if owing, can be computed." City of
Vincennes v. McCarter, 142 Ind. App. 493, -, 266 N.E.2d 76, 77 (1968).