Title: FRASER v EDMISTEN

State: montana

Issuer: Montana Supreme Court

Document:

No. 14965 IN THE SUPREME COURT OF THE STATE OF MONTANA 1980 JOSEPH FRASER, Plaintiff and Appellant, VS . DONALD D. EDMISTEN, Defendant and Respondent. Appeal from: District Court of the Fifth Judicial District, Honorable Frank E. Blair, Judge presiding. Counsel of Record: For Appellant: Chester L. Jones, Virginia City, Montana For Respondent : Burgess, Joyce, Prothero & Whelan, Butte, Montana Submitted on briefs: April 25, 1980 Decided : SEP 8 - 798p Mr. J u s t i c e Daniel J. Shea d e l i v e r e d t h e Opinion of t h e Court. p l a i n t i f f , Joseph H. F r a s e r , a p p e a l s from a judgment i n Madison County D i s t r i c t C o u r t d e n y i n g h i s c l a i m f o r r e s t i t u t i o n of payments made under an o r a l c o n t r a c t f o r t h e purchase of d e f e n d a n t ' s t a v e r n . The d e f e n d a n t , Donald D. Edmisten, counterclaimed i n t h e a l t e r n a t i v e f o r s p e c i f i c performance o r f o r f e i t u r e t o him of t h e downpayments made by F r a s e r . The t r i a l c o u r t g r a n t e d o n l y f o r f e i t u r e of t h e downpayments. Although p l a i n t i f f F r a s e r r a i s e s four i s s u e s , t h r e e of them a r e moot because t h e y a r e d i r e c t e d a t Edmisten's c o u n t e r c l a i m f o r s p e c i f i c performance which t h e t r i a l c o u r t d i d n o t g r a n t . Nor h a s Edmisten appealed from t h e t r i a l c o u r t ' s o r d e r r e f u s i n g t o g r a n t h i s c o u n t e r c l a i m f o r s p e c i f i c performance. Accordingly, t h e s o l e i s s u e on a p p e a l is t h e s u f f i c i e n c y of t h e evidence t o s u p p o r t t h e judgment p e r m i t t i n g f o r f e i t u r e of t h e payments. W e a f f i r m . A purchaser of r e a l p r o p e r t y under an o r a l agreement who v o l u n t a r i l y t e r m i n a t e s t h e c o n t r a c t c a n n o t r e c o v e r p a r t i a l payments on t h e purchase p r i c e s o long a s t h e s e l l e r is w i l l i n g and a b l e t o perform h i s p a r t of t h e agreement. P e r k i n s v. A l l n u t ( 1 9 1 3 ) , 47 Mont. 13, 1 5 , 130 P. 1, 1-2. Although F r a s e r r e l i e s i n p a r t on s e c t i o n 28-1-104, MCA, which c o d i f i e s an e x c e p t i o n t o t h i s g e n e r a l r u l e t h e s t a t u t e has no a p p l i c a t i o n h e r e . I t p r o v i d e s : "Whenever by t h e terms of an o b l i g a t i o n a p a r t y t h e r e t o i n c u r s a f o r f e i t u r e o r a l o s s i n t h e n a t u r e of a f o r f e i t u r e by reason of h i s f a i l u r e t o comply w i t h i t s p r o v i s i o n s , h e may be r e l i e v e d t h e r e f r o m upon making f u l l compensation t o t h e o t h e r p a r t y , e x c e p t i n t h e c a s e of a g r o s s l y n e g l i g e n t , w i l l f u l , o r f r a u d u l e n t breach of d u t y . " W e have c o n s t r u e d t h i s s t a t u t e t o mean " t h a t a person may o b t a i n r e l i e f under it i n any c a s e where he s e t s f o r t h f a c t s which appeal t o t h e conscience of a c o u r t of e q u i t y . " Lewis v. S t a r l i n ( 1 9 5 4 ) , 127 Mont. 474, 477-78, 267 P.2d 127, 128-29. F o r f e i t u r e c a s e s i n v o l v e two competing s o c i a l p o l i c i e s . The g e n e r a l r u l e s e t f o r t h i n P e r k i n s , s u p r a , encourages enforcement of agreements though t h e y may be t e c h n i c a l l y d e f i c i e n t . Lewis v. S t a r l i n , s u p r a , 127 Mont. a t 477, 267 P.2d a t 128. On t h e o t h e r hand, we have noted t h a t t h e law does n o t f a v o r n e e d l e s s f o r f e i t u r e s . P a r r o t v. H e l l e r ( 1 9 7 6 ) , 171 Mont. 212, 215, 557 P.2d 819, 820, r e l y i n g on Yellowstone County v. Wight ( 1 9 4 3 ) , 115 Mont. 411, 417, 145 P.2d 516, 518. S e c t i o n 28-1-104, MCA, s t r i k e s a balance between t h e s e competing p o l i c y c o n s i d e r a t i o n s . I t g r a n t s r e l i e f from f o r f e i t u r e s i n most i n s t a n c e s , b u t upholds f o r f e i t u r e i n t h e c a s e of a " g r o s s l y n e g l i g e n t , w i l l f u l , or f r a u d u l e n t breach of d u t y by t h e person s e e k i n g r e l i e f from f o r f e i t u r e . " Here t h e t r i a l c o u r t found t h a t F r a s e r had indeed r e p u d i a t e d t h e c o n t r a c t . To be e n t i t l e d t o r e l i e f , F r a s e r had t o e s t a b l i s h e i t h e r (1) t h a t t h e s e l l e r , Edmisten, was u n w i l l i n g o r unable t o c a r r y o u t t h e c o n t r a c t ; o r ( 2 ) t h a t he, F r a s e r , had committed no " g r o s s l y n e g l i g e n t , w i l l f u l , o r f r a u d u l e n t breach of t h e c o n t r a c t , while a f f i r m a t i v e l y s e t t i n g f o r t h f a c t s t h a t appeal t o a c o u r t of e q u i t y . " The t r i a l c o u r t was n o t s a t i s f i e d w i t h h i s proof nor do w e s e e any reason t o u p s e t t h e t r i a l c o u r t ' s d e c i s i o n . The t r i a l c o u r t found t h a t Edmisten was w i l l i n g and a b l e t o c a r r y o u t t h e c o n t r a c t . Thus, t h e f a c t t h a t t h e c o n t r a c t was not i n w r i t i n g and t h e r e f o r e i n v i o l a t i o n of t h e s t a t u t e of f r a u d s , should n o t permit F r a s e r t o p r e v a i l i n h i s a t t e m p t a t r e c o v e r i n g h i s c o n t r a c t payments. A c l e a r f a c t u a l d i s p u t e e x i s t e d on t h i s q u e s t i o n , and i t was r e s o l v e d i n favor of Edmisten. F r a s e r contends t h a t t h e f e d e r a l t a x l i e n s on t h e p r o p e r t y still e x i s t i n g a t t h e t i m e of t r i a l demonstrated Edmisten's i n a b i l i t y t o t r a n s f e r c l e a r t i t l e . But Edmisten t e s t i f i e d a t l e n g t h concerning h i s a s s e t s , solvency and a b i l i t y t o pay o f f t h e l i e n and p r o v i d e c l e a r t i t l e t o F r a s e r . H e s a i d he would have provided a c l e a r t i t l e when t h e p a r t i e s signed a c o n t r a c t . T h e evidence s u f f i c e s t o j u s t i f y a f i n d i n g i n favor of Edmisten on t h i s i s s u e . The t r i a l c o u r t a l s o found t h a t Edmisten made no m i s r e p r e s e n t a t i o n s t o F r a s e r and t h u s concluded t h a t F r a s e r had n o t made a showing s u f f i c i e n t t o move a c o u r t of e q u i t y t o r e l i e v e him of t h e f o r f e i t u r e . The evidence s u p p o r t s t h i s c o n c l u s i o n . The evidence is s u f f i c i e n t t o j u s t i f y t h e f i n d i n g t h a t Edmisten was "ready, w i l l i n g , and a b l e " t o f u r n i s h e i t h e r t i t l e i n s u r a n c e or an a b s t r a c t of t i t l e t o F r a s e r . Edmisten t e s t i f i e d t h a t he would have provided one o r t h e o t h e r when t h e c o n t r a c t was s i g n e d . H e f u r t h e r t e s t i f i e d t h a t t h e proposed w r i t t e n c o n t r a c t between t h e p a r t i e s e x p r e s s l y r e q u i r e d him t o g u a r a n t y c l e a r t i t l e t o F r a s e r . The t r i a l c o u r t found t h a t Edmisten had d i s c h a r g e d a l l of t h e l i e n s encumbering t h e p r o p e r t y e x c e p t f o r t h e f e d e r a l t a x l i e n t h a t was "of record." The evidence s u p p o r t s t h e s e f i n d i n g s . F r a s e r admitted h e knew t h a t Edmisten had renewed t h e t a v e r n ' s l i q u o r l i c e n s e and had p a i d t h e back s t a t e t a x e s on t h e premises. Furthermore, F r a s e r 's a t t o r n e y i n t r o d u c e d i n t o evidence a c e r t i f i e d copy o f t h e n o t i c e o f a f e d e r a l t a x l i e n e n c u m b e r i n g t h e premises. A t t h a t t i m e , he s t a t e d t h a t it was on f i l e i n t h e Madison County Clerk and R e c o r d e r ' s O f f i c e . The d e t a i l s of t h e l i e n a g a i n s t t h e p r o p e r t y were r e a d i l y a c c e s s i b l e t o Fraser. He cannot complain, therefore, that he was not able to learn the specifics of the tax liens. The judgment of the District Court is affirmed. We Concur: Chief Justice / I ' r'\\\ , ' / Justices V