Case Title: HILLSTROM v GOSNAY

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1980-07-01T00:00:00Z

Document:
No. 79-102 IN THE SUPREME COURT OF THE STATE OF MONTANA 1980 ROBERT A. HILLSTROM and PATRICIA HILLSTROM, husband and wife, Plaintiffs and Respondents, MAURICE GOSNAY and PAMELA GOSNAY, husband and wife, and JEREMI VILLANO, Defendants and Appellants. Appeal from: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, Honorable W. W. Lessley,Judge presiding. Counsel of Record: For Appellants: Moore, Rice, O'Connell & Refling, Bozeman, Montana Mark D. Refling argued, Bozeman, Montana For Respondents: Landoe, Brown, Planalp, Kommers and Lineberger, Bozeman, Montana J. Robert Planalp argued, Bozeman, Montana Submitted: May 23, 1980 Decided: JUL 1 - Filed: dUL 1 - 1 9 0 4 - -. M r . ~ u s t i c e Gene B. Daly delivered t h e Opinion of t h e Court. his i s an appeal from a judgment of t h e D i s t r i c t Court of the ~ i g h t e e n t h J u d i c i a l D i s t r i c t , G a l l a t i n County, t h e Honorable W. W. Lessley presiding. P l a i n t i f f s Hillstrom brought t h i s a c t i o n f o r a breach of c o n t r a c t a g a i n s t defen- d a n t Villano and f o r an interference with t h e c o n t r a c t a g a i n s t defendants Gosnay. P l a i n t i f f s sought s p e c i f i c performance of t h e i r c o n t r a c t o r , i n t h e a l t e r n a t i v e , a c t u a l damages, and f o r punitive damages. The D i s t r i c t Court,. s i t t i n g without a jury, found t h a t p l a i n t i f f s had a v a l i d and enforceable c o n t r a c t with defendant Villano f o r t h e purchase of r e a l property and t h a t defendant Villano breached t h e contract. The c o u r t f u r t h e r found t h a t defendants Gosnay d i d not i n t e r f e r e with the contract. The c o u r t ordered t h a t defendant Villano s p e c i f i c a l l y perform t h e c o n t r a c t with t h e p l a i n t i f f s but denied p l a i n t i f f s ' request f o r punitive damages. Defendants bring t h i s appeal. The real property which i s t h e s u b j e c t matter of t h i s a c t i o n i s a ten-acre t r a c t of land located i n G a l l a t i n County, Montana, h e r e i n a f t e r r e f e r r e d t o as "Tract B." Defendant-appellant D r . Jeremi Villano i s a medical doctor whose employment d u t i e s a t t h e t i m e of t h i s controversy required her t o frequently be away from her home i n Bozeman, Montana, f o r one and two week periods. Villano is t h e owner and s e l l e r of T r a c t B i n t h i s action. H e r r e a l t o r is Joyce S trahn. From August 1977 t o August 1978, no o f f e r s were received f o r the purchase of Tract B although the property had been advertised f o r s a l e . O n J u l y 31, 1978, Maurice and Pamela Gosnay, r e s i d e n t s of Liberty, Missouri, who own a vacation home i n t h e G a l l a t i n Canyon near Bozeman, signed an option t o purchase T r a c t A, a ten-acre p a r c e l adjoining T r a c t B. LeRoy s p a i n agreed t o r e p r e s e n t t h e Gosnays i n obtaining T r a c t B a l s o . Spain later telephoned Strahn and informed h e r t h a t he had a p a r t y i n t e r e s t e d i n Tract B and asked Strahn what t h e commission was and whether o r n o t it would be s p l i t with him. Strahn informed Spain t h a t t h e commis- s i o n was 8 percent and t h a t it w a s t h e i r policy t o s p l i t t h e commission with t h e buyer's broker. After s e v e r a l r e j e c t e d o f f e r s , Spain telephoned Strahn on August 25, 1978, and informed her t h a t h i s c l i e n t s ( t h e Gosnays) w e r e w i l l i n g t o pay $54,500 f o r T r a c t B. Villano agreed t o accept $54,500 b u t s t a t e d t h a t she would r a t h e r have $55,000. Because Villano w a s leaving town t h e next day t o go t o Sundance, Wyoming, and because Strahn wanted something i n w r i t i n g , Strahn prepared two e a r n e s t money r e c e i p t s , one with a s a l e s p r i c e of $54,500 and t h e o t h e r with a sales p r i c e of $55,000. Villano signed both e a r n e s t money agreements i n S t r a h n ' s o f f i c e on August 26, 1978, before leaving f o r Wyoming. Strahn conveyed both o f f e r s over t h e telephone t o Spain. The next day, August 27, 1978, P a t r i c i a L. Hillstrom telephoned Strahn and informed her t h a t she and h e r husband, who r e s i d e i n Minneapolis, Minnesota, w e r e i n t e r e s t e d i n purchasing T r a c t B. M r s . Hillstrom s t a t e d t h a t her husband, Robert A. Hillstrom, was a lawyer and r e a l e s t a t e b:roker and t h a t he would c a l l Strahn concerning Tract B. Strahn telephoned Villano i n Wyoming and informed her Hillstrom was coming i n t o her of £ i c e t o d i s c u s s t h e purchase o f T r a c t B. During t h i s conversation, Strahn a l s o informed Villano t h a t t h e Gosnays would purchase T r a c t B f o r $54,500. Strahn advised Villano she could withdraw her w r i t t e n o f f e r t o sell t o t h e Gosnays because no e a r n e s t money had been received and t h e w r i t t e n o f f e r s had n o t been picked up o r signed by them. A f t e r being advised of t h i s , Villano agreed t o withdraw her o f f e r t o t h e Gosnays t o s e e what t h e H i l l - stroms would o f f e r . Strahn telephoned Spain and informed him t h a t Viilano had withdrawn her o f f e r t o sell T r a c t B t o t h e Gosnays. The Hillstroms m e t with Strahn i n her o f f i c e on August 28, 1978. They o f f e r e d $55,000 f o r t h e property. There- a f t e r , M r . Hillstrom approached Strahn concerning S t r a h n ' s s p l i t t i n g t h e real estate commission with him. It w a s decided t o reduce t h e s a l e s p r i c e by one-half of t h e com- mission and reduce t h e s t a t e d commission t o 4 percent. A f t e r discussing t h e o f f e r with Villano, Strahn d i c - t a t e d t h e wording of a telegram t h a t Villano w a s t o use i n accepting t h e Hillstroms' cf.'fer, t h e language of t h e ac- ceptance having been suggested by M r . Hillstrom. Strahn t o l d Villano t o go t o t h e telegraph o f f i c e and s i g n t h i s telegram. Villano informed Strahn t h e r e w a s no telegraph o f f i c e i n Sundance, Wyoming, and Strahn t o l d Villano t o send t h e telegram anyway. Villano telephoned Western Union and d i c t a t e d t h e telegram as she was i n s t r u c t e d t o do. The telegram w a s s e n t t o Landmark R e a l E s t a t e , a t t e n t i o n Joyce Strahn. I t s t a t e d : "PLEASE CONSIDER THIS AS MY WRITTEN ACCEPTANCE O F T H A T OFFER MADE ON MY REAL ESTATE I N THE GALLATIN CANYON A S PRESENTED T O L A N D M A R K R E A L T Y BY ROBERT A. AND PATRICIA L. HILLSTROM ON A U G U S T 28, 1978. " JEREMI VILLANO MD" I n a complaint dated September 13, 1978, t h e Gosnays sued D r . Villano and Landmark Real E s t a t e (Joyce Strahn) i n a n e f f o r t t o e s t a b l i s h some r i g h t s t o t h e land. Following n e g o t i a t i o n s conducted through t h e i r r e s p e c t i v e a t t o r n e y s , v i l l a n o and t h e Gosnays reached an agreement f o r t h e s a l e of T r a c t B by Villano t o t h e Gosnays i n a c o n t r a c t dated Octo- ber 20, 1978. Under t h i s c o n t r a c t , Villano agreed t o sell t h e property t o t h e Gosnays f o r t h e p r i c e of $54,500. v i l l a n o was n o t required t o pay any r e a l e s t a t e commissions o u t of t h i s p r i c e and t h e Gosnays agreed t o hold Villano harmless and indemnify her f o r a l l expenses incurred defend- i n g any l i t i g a t i o n commenced by t h e Hillstroms. Villano gave t h e Hillstroms n o t i c e of r e s c i s s i o n i n letters dated October 18 and October 20, 1978, on t h e grounds t h a t her consent was obtained by mistake and fraud i n t h a t she believed t h e s a l e s p r i c e t o be $55,000 and had n o t consented o r been t o l d t h a t her real estate agent would s p l i t t h e commission and reduce t h e purchase p r i c e t o $52,800. On November 29, 1978, t h e Hillstroms f i l e d t h i s a c t i o n a g a i n s t Villano and t h e Gosnays. There i s b u t one i s s u e f o r review by t h i s Court: Whether t h e typewritten name "JEREMI VILLANO M D " a t t h e bottom of a telegram i s a s u f f i c i e n t s u b s c r i p t i o n t o s a t i s f y t h e requirements of t h e s t a t u t e of frauds? Appellants argue t h a t t h e r e a r e two b a s i c requirements of t h e s t a t u t e of frauds, s e c t i o n 28-2-903(1) ( d ) , MCA. Appellants concede t h a t t h e f i r s t requirement, t h a t t h e r e be some note o r memorandum of t h e agreement i n w r i t i n g , has been s a t i s f i e d . The second requirement, t h a t the w r i t i n g be subscribed by t h e p a r t y t o be charged o r by h i s agent, a l l e g e d l y has n o t been s a t i s f i e d i n t h i s case. It i s argued t h a t t h e typewritten name "JEREMI VILLANO MD" a t t h e bottom of t h e telegram i s n o t a s u f f i c i e n t s u b s c r i p t i o n under t h e s t a t u t e of frauds, which a p p e l l a n t s claim r e q u i r e s an a c t u a l signing with one's own hand. I n a d d i t i o n , t h e s t a t u t e r e q u i r e s t h a t i f an agreement is made by an agent of t h e p a r t y t o be charged, t h e a g e n t ' s a u t h o r i t y must be i n w r i t - i n g and subscribed by t h e p a r t y 'LO be charged. Since t h e telegraph company, a s an agent, was n o t authorized i n a subscribed w r i t i n g t o make t h e agreement by "signing" V i l l a n o ' s typewritten name, a p p e l l a n t s contend t h a t t h e s t a t u t e w a s n o t s a t i s f i e d . Therefore, t h e Hillstrom-Villano agreement i s i n v a l i d and void. Secondly, a p p e l l a n t s argue t h a t Villano d i d n o t have t h e r e q u i s i t e i n t e n t t o authen- t i c a t e t h e typewritten name "JEREMI VILLANO M D " a t t h e bottom of t h e telegram a s her signature. The Montana s t a t u t e of frauds provides: "What c o n t r a c t s must be i n writing. (1) The following agreements a r e i n v a l i d u n l e s s t h e s a m e o r some note o r memorandum thereof i s i n w r i t i n g and subscribed by t h e p a r t y t o be charged o r h i s agent: " ( d ) A n agreement f o r t h e l e a s i n g f o r a longer period than 1 year o r f o r t h e sale of real property o r of an i n t e r e s t t h e r e i n . Such agreement i f made by a n agent of t h e p a r t y sought t o be charged, i s i n v a l i d unless t h e a u t h o r i t y of t h e agent i s i n w r i t i n g and subscribed by t h e p a r t y sought t o be charged." Section 28-2-903 (1) (d) , MCA. Appellants concede t h a t t h e f i r s t requirement of t h e s t a t u t e , t h a t t h e r e be some note o r memorandum of t h e agree- ment i n w r i t i n g , has been s a t i s f i e d by t h e telegram and t h e "Earnest Money Receipt and Agreement t o S e l l and Purchase" with attached documents. A telegram may c o n s t i t u t e a suf- f i c i e n t w r i t t e n memorandum t o s a t i s f y t h e requirements of t h e s t a t u t e of frauds. Yaggy v. B.V.D. Co. (1970), 7 N.C.App. 590, 173 S.E.2d 496; 72 Am.Jur.2d S t a t u t e of - Frauds 9300; 37 C.J.S. Frauds, S t a t u t e - o f , "No p a r t i c u l a r form of . . . instrument i s necessary t o c o n s t i t u t e a memorandum o r note i n w r i t i n g under t h e s t a t u t e of f r a u d s . . . It i s t h e g e n e r a l r u l e t h a t a memorandum wholly untechnical i n form may be s u f f i c i e n t . It may c o n s i s t of any kind of w r i t i n g . . . I 1 Johnson v. Ogle (1947), 120 Mont. 176, 181 P.2d 789, 791, quoting 49 Am.Jur. S t a t u t e of Frauds S321. - It i s t h e second requirement of t h e s t a t u t e of f r a u d s which a p p e l l a n t s contend was n o t s a t i s f i e d i n t h e transac- t i o n s between t h e Hillstroms and Villano. This is t h e re- quirement t h a t t h e w r i t i n g be "subscribed by t h e p a r t y t o be charged o r h i s agent . . ." and t h a t " [ s l u c h agreement, i f made by an a g e n t of t h e p a r t y sought t o be charged, i s i n v a l i d u n l e s s t h e a u t h o r i t y of t h e agent is i n w r i t i n g and subscribed by t h e p a r t y sought t o be charged." S e c t i o n 28- 2-903, MCA. Villano i s t h e p a r t y sought t o be charged i n t h i s p a r t i c u l a r s u i t and t h e person who must have subscribed a w r i t t e n n o t e o r memorandum under t h e s t a t u t e of frauds. Thus, t h e narrow i s s u e t o be decided i s whether t h e type- w r i t t e n name "JEREMI VILLANO MD" a t t h e bottom of t h e tele- gram i s a s u f f i c i e n t s u b s c r i p t i o n t o s a t i s f y t h e r e q u i r e - ments of t h e s t a t u t e of f r a u d s . The D i s t r i c t Court found t h a t it was. W e agree. This Court has never r u l e d on what c:onstitutes a v a l i d s u b s c r i p t i o n f o r purposes of t h e s t a t u t e of frauds. Other c o u r t s , however, have c o n s i s t e n t l y h e l d t h a t a.ny mark a f - f i x e d t o a w r i t i n g w i t h t h e i n t e n t t o a u t h e n t i c a t e it con- s t i t u t e s a s u f f i c i e n t s u b s c r i p t i o n by t h e p a r t y sought t o be charged. 72 Am.Jur.2d S t a t u t e - of Frauds S358; 37 C.J.S. Frauds, S t a t u t e o f , - 85202-204; 4 W i l l i s t o n , Contracts, 8585 (3rd Ed. 1961) ; Restatement of Contracts S210 (1936). (See a l s o t h e Uniform Commercial Code, which, although it does n o t apply t o sales of real property, n e v e r t h e l e s s has a s i m i l a r d e f i n i t i o n of t h e word "signed." Section 30-1- 201(39), McA.) Provided t h e necessary i n t e n t t o a u t h e n t i - cate i s shown, t h e typewritten "signature" on a telegram i s a proper s u b s c r i p t i o n within t h e meaning of t h e s t a t u t e . Yaggy v. B.V.D. Co. (1970), 7 N.C.App. 590, 173 S.E.2d 496, 502; La M a r Hosiery M i l l s , Inc. v. C r e d i t and Commodity Corporation (1961), 28 Misc.2d 764, 216 N.Y.S.2d 186, 190; Joseph DeNunzio F r u i t Co. v. Crane (S.D.Ca1. 1948), 79 F.Supp. 117, 128-129. The two Montana cases c i t e d by a p p e l l a n t s i n support of t h e i r narrow treatment, I n re S a l e s ' E s t a t e (1939), 108 Mont. 202, 89 P.2d 1043, and I n re Miller's E s t a t e (1908), 37 Mont. 545, 97 P. 935, as w e l l as t h e C a l i f o r n i a case c i t e d , I n re Moore's E s t a t e (1949), 92 Cal.App.2d 120, 206 P.2d 413, d e a l with t h e test'xnentary f o r m a l i t i e s f o r exe- c u t i n g a w i l l , n o t with t h e s t a t u t e of frauds, and cannot be used here. Neither does Schwedes v. Romain (1978), - Mont. , 587 P.2d 388, 35 St.Rep. 1784, address t h e i s s u e presented here because t h e r e was no memorandum of t h e par- ties' agreement i n w r i t i n g i n t h a t case. W e need n o t address t h e general question of whether o r n o t a telegraph company i s t h e agent of t h e sender of a telegram. Our s t a t u t e provides t h a t t h e a g e n t ' s a u t h o r i t y must be i n w r i t i n g subscribed by t h e p a r t y sought t o be charged only i f an agreement f o r t h e same of real property is "made" by t h e agent. I t is apparent i n t h i s case t h a t t h e agreement w a s n o t "made" by t h e telegraph company and t h a t t h e company was v i l l a n o ' s agent, i f a t a l l , only f o r t h e l i m i t e d purpose of communicating her telegram. A s i d e i s s u e a r o s e i n t h i s appeal as t o whether t h e r e i s s u b s t a n t i a l evidence i n t h e record t o support t h e v is- t r i c t c o u r t ' s findings t h a t Villano understood t h e t e r m s of t h e ~ i l l s t r o m s ' o f f e r and t h a t she i n f a c t accepted t h e o f f e r intending her t e l e t y p e w r i t t e n s i g n a t u r e t o a u t h e n t i - cate her telegram. Notwithstanding a p p e l l a n t s ' contention t h a t Villano d i d n o t intend her typewritten name t o authen- ticate t h e telegram because she understood t h e s a l e s p r i c e t o be $55,000 with an 8 percent commission r a t h e r than t h e $52,800 with a 4 percent commission which r e s u l t e d a f t e r Strahn and Hillstrom agreed t o s p l i t t h e commission, t h e D i s t r i c t Court found otherwise. Villano ' s i n t e n t t o a u t h e n t i c a t e her typewritten name on t h e telegram as her v a l i d subscription is, of course, required t o s a t i s f y t h e s t a t u t e of frauds. Radke v. Brenon (1965), 271 ~ i n n g 3 5 , 134 N.W.2d 887; Marks v. Walter G. McCarty Corp. (1949), 3 3 Cal.2d 814, 205 P.2d 1025, 1028. The i n t e n t t o a u t h e n t i c a t e i s e s t a b l i s h e d on t h e f a c e of t h e telegram which states, "PLEASE CONSIDER THIS MY WRITTEN ACCEPTANCE . . ." The f a c t t h a t t h e wording t o be used w a s d i c t a t e d by Hillstrom t o Strahn, and then over t h e phone t o Villano, i n d i c a t e s t h a t both p a r t i e s intended t o bind them- s e l v e s and c l o s e t h e deal. This i n t e n t i s supported f u r t h e r by p l a i n t i f f ' s t e s t i - mony t h a t she understood she had a firm d e a l , notwithstand- i n g her contention t h a t she thought t h e terms of t h e d e a l t o be otherwise. The District Court accepted t h e testimony of Strahn t h a t t h e f i g u r e of $52,800, as w r i t t e n on t h e " ~ a r n e s t Money Receipt and Agreement t o S e l l and Purchase," w a s read t o Villano over t h e telephone by Strahn. I n any case, Villano received $88 more f o r her property under t h e s p l i t commission arrangement than she would have received under a s a l e s p r i c e of $55,000 with an 8 percent commission. v his evidence e s t a b l i s h e s V i l l a n o ' s i n t e n t t o a u t h e n t i c a t e her typewritten s i g n a t u r e on t h e telegram. W e note t h a t t h i s case involves a c o n t r a c t which i n f a c t has been admitted. V i l l a n o ' s admission of t h e agree- ment i s important because i n cases involving admitted con- t r a c t s , w e have construed t h e s t a t u t e of frauds less tech- n i c a l l y , r e f u s i n g t o allow t h e s t a t u t e t o be used so as t o d e f e a t i t s purpose t o prevent t h e commission of a fraud. Farmers Elevator Co. v. Anderson (1976), 170 Mont. 175, 552 P.2d 63; Gravelin v. P o r i e r (1926), 77 Mont. 260, 250 P. 823, 829. The judgment of t h e D i s t r i c t Court i s affirmed. W e concur: . . Chief J u s t i c e Q . ~ J W - , , J u s t i c e s