Case Title: WHITNEY v BAILS

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1977-03-07T00:00:00Z

Document:
No. 13355 I N THE SUPREME COURT OF THE STATE OF MONTANA RUSSELL C. WHITNGY, JR., d/b/a Double 4 Cattle Company, and Julia S. Whitney, his wife, Plaintiffs and Appellants, RICHARD J. BAILS and PATRICIA J. BAILS, husband and wife, Defendants and Respondents. Appeal from: District Court of the Eighteenth Judicial District Honorable W. W. Lessley, Judge presidina Counsel of Record: For Appellants: Corette, Smith and Dean, Butte, Montana Dolphy Pohlman argued, Butte, Montana For Respondents : Berg, Angel, Andriolo & Morffan, Bozeman, Montana Ben E. Berg argued, Bozeman, Montana Hibbs, Sweeney and Colberg, Billings, Montana Submitted: January 10, 1977 Decided : fIRR 7 '1971 Filed: !I>,~; , . r ,/ [ -. M r . J u s t i c e John Conway Harrison delivered the Opinion of the Court. I n an action f o r declaratory judgment the d i s t r i c t court, G a l l a t i n County,found p l a i n t i f f Whitney e n t i t l e d t o cancellation of two contracts f o r deed. The action involved the successive s a l e of a ranch by contract f o r deed, with each succeeding contract assuming t h e prior contracts. Pete Tocci & Son Inc. was the o r i g i n a l owner f o r the purposes of these contracts. I n 1969, Tocci sold t h e ranch t o McGregor f o r $500,000. I n March 1971 McGregor sold t o Blome f o r $650,000. I n August 1972 B l t m e sold t o Whitney, p l a i n t i f f here, f o r $425,000. I n September 1973 Whitney sold t o Gar f o r $740,000. Gar sold t o B a i l s , defendant here, f o r $750,000 i n July 1974. I n December 1974 Bails missed a payment, t h e b a s i s f o r default. In April a f t e r t h e contractural notices were served, t h i s action was f i l e d against a l l p a r t i e s t o a l l t h e contracts t o determine t h e r i g h t s of the p a r t i e s . By s t i p u l a t i o n a l l contracts up t o and including Blome t o Whitney were found ,, t o be i n f u l l force. By the same process, Gar was dismissed from t h e action with prejudice. A t r i a l without jury t o determine t h e r i g h t s a s between p l a i n t i f f and Bails, t h e l a s t remaining defendant, was had before Hon. W.W. Lessley. H i s decision i s appealed by p l a i n t i f f . The appeal r a i s e s two questions: 1) W h o owns the crops harvested by Bails during t h i s l i t i g a t i o n ? 2) What is the measure of damages? The crops involved are the grain crop, straw crop, and the irrigated seed hay crop. Kester v. Amon,.81 Mont. 1, 9, 261 P. 288, states the rule in Montana: "* * * when an occupant of lands plants, cultivates and harvests crops during the term of his occupation, they are his personal property, whether he occupied the land as a purchaser, a tenant, or a mere trespasser holding the land adversely to the real owner, and whether he came into possession of the land lawfully or not, provided he remain in possession until after the crops are harvested." There could be no fact situation more extreme than that in Kester where the grain was cut after the sheriff, pursuant to \ a writ of assistance, had taken possession of the land. Hamilton v. Rock, 121 Mont. 245, 191 P.2d 663, states the rule in Kester but found it inapplicable to native grasses and trees which do not owe their existence to the trespasser. Here, the crops were planted, work was done by Bails or persons paid by him, and harvested long before the court ordered the change in possession. The crops therefore belong, as the court ordered, to defendant Bails. The second issue concerns the measure of damages. Section 17-301, R . C . M . 1947, states: "Measure of damages for breach of contract. For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will com- pensate the party aggrieved for all the detriment proximately caused thereby, or which in the ordinary course of things, would be likely to result therefrom." (Emphasis supplied.) Section 17-307, R.C.M. 1947, sets out the specific measure of damages for breach of an agreement to buy real property: "Breach of agreement to buy real property. The detri- ment caused by the breach of an agreement to purchase an estate in real property is deemed to be the excess, if any, of the amount which would have been due to the seller, under the contract, over the value of the property to him." This express provision was discussed by this Court in Wyatt v. School District No. 104, 148 Mont. 83, 88, 89, 417 P.2d 221. The interpretation of California Civil Code $3307, identical to section 17-307, R.C.M. 1947, was used by analogy to interpret another provision of Chapter 3, Title 17, R.C.M. 1947, on the question of whether the provisions of that section were the exclu- sive measure of damages. In Wyatt the Court found the sections of title 17 were not exclusive basing its decision in part on Royer v. Carter, 37 Cal.2d 544, 233 P.2d 539, where the California Court said: ' I ' * * * vendee's breach may make it necessary for the vendor to incur additional expenses to realize the benefit of his bargain. * * * When such additional expenses are the natural consequence of the breach, they may be recovered in addition to those provided for in section 3307.' (Emphasis supplied.)" This Court then set out the reason for this ruling: "* * * the statutes are to be regarded as guides in the estimation of damages to be recovered, and that the respondent should receive a sum which, when added to the benefits already received under the contract, will give her an economic status identical to that which she would have enjoyed had the contract been performed .I1 In Wiseman v. Holt, 163 Mont. 387, 517 P.2d 711, a similar question was raised. In Wiseman the Court again referring to Royer, the California case, found an instruction offered by the defendant was incorrect because it set the maximum damages recover- able to those provided in section 17-307, R.C.M. 1947. The Court explained that the philosophy of contract damages was to allow those damages which would return the damaged party to an economic status identical t o that which would have been enjoyed had the contract been performed and t h i s policy would be violated i f certain additional damages were not allowed. W e disagree and overrule our holding i n Wiseman a s t o additional damages. Here, even a f t e r deducting the f u l l amount of the alleged damages from the market price a t the time of the breach, the seller i s substantially better off than he would have been had the con- t r a ~ t been performed. The d i s t r i c t court made detailed and specific findings t o t h i s effect. This result i s clearly contemplated by section 17-307: "The detriment caused by the breach of an agreement t o purchase an estate i n r e a l property is deemed t o be the excess, i f any, of the amount which would have been due t o the s e l l e r , under the contract, over the value of the property t o him," (Emphasis supplied.) This measure of damages may seem harsh because it does not allow recovery for harm done t o the land, but the effect i s that the s e l l e r of the land gets a l l he bargained for a t the t i m e he irre- trievably parted with .the land. Plaintiff argues damages are due because the waste provision of the contract was violated. P l a W f f has a right t o tfie return of the r e a l property only i f the contract i s breached. The measure of damages for the breach of a contract for the sale of r e a l property i s that s e t out i n section 17-307, R.C.M. 1947, The damage done may be used, a s it was here, t o reduce the market value of the land but it may not be used, a s urged here, t o allow damages where none would be due under the statutory measure. The judgment of the d i s t r i c t court i s affirmed. Justice. W e concur: K" T / 7 -L'- , . e i , " ..-" Chief J u s t i c e . \ Yustices. U