Title: UNITED STATES OF AMERICA, Acting Through the FARMERS HOME ADMINISTRATION v. RICHARD REDLAND, DOROTHY REDLAND, JAMES WYCKOFF, AND JOHN WYCKOFF v. JACK C. MALMBERG, EMIL A. MALMBERG AND MRS. DONALD MALMBERG, A/K/A SYBIL MALMBERG, Individuals, D/B/A THREE QUARTER CIRCLE LAND AND CATTLE COMPANY; JACK C. MALMBERG, EMIL A. MALMBERG AND MRS. DONALD MALMBERG, A/K/A SYBIL MALMBERG, Individuals, D/B/A THREE QUARTER CIRCLE LAND AND CATTLE COMPANY v. RICHARD REDLAND, DOROTHY REDLAND, JAMES WYCKOFF, AND JOHN WYCKOFF

State: wyoming

Issuer: Wyoming Supreme Court

Document:

UNITED STATES OF AMERICA, Acting Through the FARMERS HOME ADMINISTRATION v. RICHARD REDLAND, DOROTHY REDLAND, JAMES WYCKOFF, AND JOHN WYCKOFF v. JACK C. MALMBERG, EMIL A. MALMBERG AND MRS. DONALD MALMBERG, A/K/A SYBIL MALMBERG, Individuals, D/B/A THREE QUARTER CIRCLE LAND AND CATTLE COMPANY;  JACK C. MALMBERG, EMIL A. MALMBERG AND MRS. DONALD MALMBERG, A/K/A SYBIL MALMBERG, Individuals, D/B/A THREE QUARTER CIRCLE LAND AND CATTLE COMPANY v. RICHARD REDLAND, DOROTHY REDLAND, JAMES WYCKOFF, AND JOHN WYCKOFF1985 WY 29695 P.2d 1031Case Number: 83-188, 83-189Decided: 02/21/1985Supreme Court of Wyoming

UNITED STATES OF 
AMERICA, ACTING THROUGH THE 
FARMERS HOME ADMINISTRATION, APPELLANT (INTERVENOR), 

v. 

RICHARD REDLAND, DOROTHY 
REDLAND, JAMES WYCKOFF, AND JOHN WYCKOFF, APPELLEES 
(PLAINTIFFS), 

v. 

JACK C. MALMBERG, EMIL A. 
MALMBERG AND MRS. DONALD MALMBERG, A/K/A SYBIL MALMBERG, INDIVIDUALS, D/B/A 
THREE QUARTER CIRCLE LAND AND CATTLE COMPANY (DEFENDANTS). 

JACK C. MALMBERG, EMIL A. 
MALMBERG, AND MRS. DONALD MALMBERG, A/K/A SYBIL MALMBERG, INDIVIDUALS, D/B/A 
THREE QUARTER CIRCLE LAND AND CATTLE COMPANY, APPELLANTS (DEFENDANTS), 

v. 

RICHARD REDLAND, DOROTHY 
REDLAND, JAMES WYCKOFF, AND JOHN WYCKOFF, APPELLEES 
(PLAINTIFFS). Nos. 83-188, 83-189

 
 
Appeal from the Fremont 
County District Court, Robert B. Ranck, J.

 
 
M.L. Barton of 
Hill, Eichelberger, Young, Barton, Riverton, and R. Dennis Ickes (argued), 
Salt Lake City, Utah, for appellants (defendants) in No. 
83-189.

Richard A. 
Stacy, U.S. Atty., Dist. of Wyoming, and Toshiro Suyematsu (argued), Asst. U.S. 
Atty., Dist. of Wyoming, for appellant (intervenor) in no. 
83-188.

S.B. Freeman, 
III of McCarty, Bormuth & Freeman, Cody, and Calvin A. Calton (argued), of 
Calton & Hamman, Billings, Mont., for appellees (plaintiffs) in nos. 
83-188 and 83-189.

Before THOMAS,* C.J., and ROSE, ROONEY,** BROWN and CARDINE, JJ.

* Became Chief Justice 
January 1, 1985.

** Chief Justice at time of 
oral argument.

CARDINE, 
Justice.

[¶1.]     This appeal is from a 
judgment settling claims arising out of an option for the transfer of federal 
grazing rights. The judgment awarded specific performance and damages which 
included actual damages, attorneys' fees, costs and exemplary damages. The 
judgment also provided for subordination of a lien of the Farmer's Home 
Administration. The defendants, Malmbergs, and the United States, 
intervenor, have appealed this decision. We will affirm in part and reverse in 
part.

[¶2.]     This controversy 
centers around the ownership of the Chapman Animal Unit Months (hereinafter 
called AUMs) grazing rights. The Redlands, who owned these rights, transferred 
their interest to the Wyckoffs on July 21, 1977, with an option to repurchase. 
On March 1, 1978, they reacquired 50% of the AUMs. These AUMs were attached to 
the base property of the Bar K-B Ranch. On September 27, 1978, the Redlands sold the ranch to 
the Malmbergs, retaining the Chapman AUMs. At this time the Malmbergs signed an 
option for purchase of the Chapman AUMs, which provided the right of purchase 
for six months and a right of first refusal for an additional six months. At the 
end of this time, the Malmbergs were to transfer the Chapman AUMs from the Bar 
K-B property to land to be acquired by the Wyckoffs and Redlands to which the AUMs 
could attach. The Bar K-B Ranch property was by now part of the ThreeQuarterCircleLand and Cattle Company. The Wyckoffs 
signed this option sometime in April 1979. In September 1979, when the option 
expired, the parties agreed to extend the period because the Wyckoffs and the 
Redlands had 
been unable to acquire a new base property. The Bureau of Land Management was 
involved in the discussions concerning the option and knew that the AUMs had 
been excluded in the sale even though the ThreeQuarterCircleLand and Cattle Company was the record 
owner. 

[¶3.]     On December 18, 1979, 
the Malmbergs wrote to the Redlands requesting 
that they have the grazing rights transferred from the ThreeQuarterCircleLand and Cattle Company by March 1, 1980 
or to make some arrangement concerning those rights which would satisfy the BLM. 
By February 29, 1980, the Redlands and Wyckoffs had acquired a base 
property to which the AUMs could be attached. The parties met at the BLM office 
on this date to sign a grazing transfer agreement. At this time there were 
trespass charges against the Chapman AUMs which had not been resolved. Malmberg 
testified that he signed the transfer with the condition that the BLM not act on 
it until the trespass charges were either resolved or arrangements made so that 
the trespass liabilities would go with the transfer. Redland testified that he 
did not hear this condition. Redland testified that he offered to put the amount 
of the trespass charge into an escrow account, but that this offer was ignored. 
The concerned parties signed the transfer agreement.

[¶4.]     After this date the BLM 
asked for advice from their solicitor concerning the trespass violations. He 
stated that:

"[I]f disciplinary action 
should be necessary some time in the future for this or any other adverse 
action, any suspensions or cancellations would be from the Three Quarter Circle 
Ranch grazing preference."

The memorandum 
also stated that the solicitor saw no reason to delay or reject any transfer of 
preference because of the trespass situation; that if the parties met the 
qualifications specified in the regulations, the transfers could be approved. 
When the Malmbergs found that their ranch might be liable for the trespass, they 
withdrew the transfer. The trespass charges were dismissed on July 22, 
1981.

[¶5.]     In the Spring of 1979, 
the Wyckoffs ran their cattle on the grazing lands. The Malmbergs paid the 
grazing fee and were reimbursed by the Wyckoffs. After the transfer was 
withdrawn, in April of 1980, the Malmbergs refused to allow the Wyckoffs' cattle 
on the grazing rights. At this time they took the position that the Wyckoffs had 
had a reasonable amount of time to transfer the AUMs and since they had not done 
this, they no longer had a right to the AUMs. At some point, the Malmbergs 
relied on the theory that the initial transfer from the Redlands to the Wyckoffs 
in 1977 terminated their interest in the AUMs by operation of law. Their theory 
was that grazing rights cannot be owned by one who does not own the necessary 
base property and therefore the transfer effectively terminated the rights. The 
Malmbergs used the Chapman AUMs for the grazing seasons of 1980, 1981, and at 
least part of 1982. On March 31, 1981, the Malmbergs traded a portion of the 
Chapman AUMs to the SunLand and Cattle Co. for different AUMs. On 
October 10, 1981, the Malmbergs signed a lien with the Farmers Home 
Administration (hereinafter FmHA) against their interest in the Chapman 
AUMs.

[¶6.]     The Redlands and Wyckoffs 
initiated this lawsuit alleging breach of contract. After the evidentiary 
hearing, a second hearing was held on damages. The United States 
intervened between the two hearings to protect the FmHA lien on the Malmberg 
cattle which dated from the sale of the ranch.

[¶7.]     Appellants and 
appellant-intervenor have raised numerous issues on appeal, however, we find the 
following issues dispositive:

1. Whether a Wyoming state court has 
jurisdiction to settle the dispute.

2. Whether or not there 
was an enforceable contract to transfer the grazing 
rights.

3. Whether the damages 
awarded were appropriate.

4. Whether the court 
properly imposed an equitable and statutory lien on the cattle with priority 
over the United 
States' lien.

I

[¶8.]     The Land Department of 
the United States, which includes the Bureau of Land Management, is vested by 
statute with substantially exclusive jurisdiction to determine questions of 
fact, determining "* * * the disposition, acquisition, and control of the public 
lands, so long as the legal title thereto remains in the United States * * *." 
63A Am.Jur.2d Public Lands § 39.

However, state 
courts may enforce contracts between parties concerning public lands. 63A 
Am.Jur.2d Public Lands § 124. State courts have a related jurisdiction with the 
Land Department, "* * * they may protect a possession lawfully acquired, or 
restore one wrongfully interrupted, for that is a matter which is not confided 
to the Land Department, and may be dealt with by the courts in the exercise of 
their general powers. * * *" Northern 
Pacific Railway Company v. McComas, 250 U.S. 387, 39 S. Ct. 546, 548, 63 L. Ed. 1049 (1919). Appellants contend that the question to be 
resolved is not an interpretation of a contract, but rather whether the parties 
are qualified to lease federal lands under the Taylor Grazing Act, 43 U.S.C. § 
315, et seq., and therefore the case raises a federal question which is 
exclusively within the province of the Secretary of the Interior and the federal 
courts.

[¶9.]     In this situation, it 
is not necessary to decide the ultimate ownership of the Chapman AUMs as 
determined by federal regulations. By limiting our decision to the rights 
between the respective parties and determining the legal effect of the contract, 
we find that this inquiry does not conflict with the BLM's exclusive 
jurisdiction determining ownership or control of grazing rights. We note that 
other states have resolved questions which involve the Taylor Grazing Act when 
the underlying question was a contract determining the rights of various 
parties. Watson v. Barnard, 155 
Mont. 75, 469 P.2d 539 (1970); Phoenix Title and Trust Co. v. Smith, 101 
Ariz. 101, 416 P.2d 425 (1966); Force v. Peccole, 77 Nev. 143, 360 P.2d 362 
(1961). See also, Dredge Corp. v. Husite 
Co., 78 Nev. 69, 369 P.2d 676 
(1962).

II

[¶10.]  Appellants contend that there was not an 
enforceable contract because the Wyckoffs did not have control over the subject 
matter, i.e., the Chapman AUMs. They base this argument on the theory that the 
Redlands lost 
control over the AUMs when they transferred their interest to the Wyckoffs in 
1977 and that this transaction terminated their rights "as a matter of law." 
Therefore the Wyckoffs had no interest which could be transferred in the option 
agreement in 1978. They cite 43 C.F.R. § 4115.2-1(e)(8)(i)1 in support of this proposition. We 
cannot allow appellants to attack the subject matter of the option by raising 
defenses which might or could have happened but did not. Possibly the BLM could 
have made a determination that these rights terminated; however, it did not at 
that time and presumably does not now regard these rights as 
terminated.

[¶11.]  Appellants also contend that there was no 
consideration, mutuality or obligation; and, furthermore, the contract should be 
deemed illegal, impossible, and fraudulent. Whether a contract has been entered 
into depends upon the intent of the parties and is a question of fact. Robert W. Anderson Housewrecking & 
Excavating, Inc. v. Board of Trustees, School Dist. No. 25, Fremont County, 
Wyoming, Wyo., 681 P.2d 1326 (1984). At the end of the evidentiary hearing, 
the court found

"* * * that defendants 
failed to show fraud or misrepresentation as to fact or law on the part of 
plaintiffs, failed to establish the defense of illegality of contract, failed to 
establish the defense of lack of mutuality and failed to establish the defense 
of impossibility of performance. The Court also finds that there was 
consideration for the execution of the option agreement and finds it to be a 
valid and enforceable contract * * *."

The district 
court found consideration involved in the whole transaction concerning the sale 
of the ranch. There was no evidence, and we cannot speculate what particular 
concessions were given for the right to have the Chapman AUMs remain attached to 
the base property. However, we defer to the trial court's finding that the 
transaction surrounding the sale involved consideration for the 
option.

[¶12.]  Appellants' contention regarding 
mutuality is based on an alleged misunderstanding of the essential terms. 
Whether the Malmbergs could have purchased the Chapman AUMs under the option or 
whether the Wyckoffs actually intended to sell the AUMs is irrelevant. This case 
concerns the portion of the contract regarding the transfer, and as to that 
element there was no mistake.

[¶13.]  Appellants also contend that the option 
did not require each party to be bound to the agreement. However, in regard to 
the provision concerning the transfer, the Malmbergs were obligated to sign a 
transfer agreement and the Wyckoffs were obligated to find base property, which 
they did.

[¶14.]  Appellants contend that the option was 
illegal and violates public policy. Appellants base this contention on the fact 
that the underlying reason for the option was to allow the Wyckoffs to control 
the Chapman AUMs until they could find other qualified based property. They 
contend that this option circumvented the BLM regulations requiring that grazing 
privilege holders own or control base property. Contracts which are contrary to 
public policy will not be recognized by the court and the parties to the 
contract will be left as the court finds them. Tate v. Mountain States Telephone and 
Telegraph Co., Wyo., 647 P.2d 58 (1982). However, we do not 
find that this contract was, per se, illegal or against public policy. The BLM, 
which is responsible for enforcing its own regulations, was involved with and 
condoned this option and apparently acquiesces in this method of retaining the 
rights to grazing privileges. It is immaterial to the resolution of this case 
whether or not the BLM could have terminated the Wyckoffs' grazing privileges. 
It is also immaterial whether the BLM office would have accepted the transfer of 
the grazing rights. The option obligated the Malmbergs to sign the transfer 
agreement. It did not obligate them to be responsible for the actions of the BLM 
after that point. This factual situation might afford an adequate basis for 
cancellation by the United 
States. However, it does not enable appellants 
to complain if the United 
States does not cancel the rights or to attack 
appellees' rights collaterally. Northern 
Pacific Railway Company v. McComas, supra.

[¶15.]  Appellants contend that performance was 
impossible on two erroneous assumptions: (1) that they did not have a right to 
be transferred; and (2) that the Wyckoffs and Redlands failed to secure qualified base 
property. Their argument that the "illegal" assignment of the AUMs in July of 
1977 terminated them has already been answered in this opinion, and the Wyckoffs 
and Redlands, by 
February 29, 1980, had secured a qualified base property to which the rights 
could have been transferred.

[¶16.]  Appellants also contend that the option 
agreement was tainted by fraud. In this case there was no evidence in the record 
of a misrepresentation of a material fact, reliance, or of damage to the 
Malmbergs. This is a spurious argument and has no basis in 
fact.

[¶17.]  Appellants also contend that if the 
contract is deemed valid, then they did not breach it, arguing that a valid 
tender of performance, not accepted, excuses the tendering party from 
performance. Kammert Brothers 
Enterprises, Inc. v. Tanque Verde Plaza Company, 102 Ariz. 301, 428 P.2d 678 
(1967). The record does not support this contention. The trial court found that 
after the option expired in September 1979, the parties had a reasonable time in 
which to transfer the AUMs. The Redlands and the Wyckoffs had obtained base 
property by the February 29, 1980 meeting. Appellees' offer to place the amount 
of the trespass liability into escrow would have protected the Malmbergs from 
any potential liability. The offer was not accepted. The Malmbergs did not offer 
a valid tender of performance and cannot now be excused from that 
obligation.

III

[¶18.]  Appellants contend that the damages were 
incorrectly awarded. The judgment included damages for actual expenses incurred 
for grazing the cattle in Texas, rather than on the Chapman AUMs, court 
costs, attorneys' fees, and punitive damages. The parties had stipulated to 
damages based on the rental value of the Chapman AUMs. At the end of the 
evidentiary trial, the court awarded tentative damages based upon the rental 
value of the AUMs. At the trial on damages, appellees presented evidence of the 
actual expenses spent for grazing the cattle in Texas rather than Wyoming. There was also testimony by Redland 
that grazing privileges were probably available in Wyoming during this time, 
but he did not remember if he had attempted to locate any.

[¶19.]  We have stated 
that,

"Compensatory damages are 
awarded in order to compensate an individual for a loss suffered as a result of 
another's failure to perform some duty. They are designed to make the individual 
whole - that is to place him in the condition he would have been in if the other 
party had adequately performed the duty owed." Hollon v. McComb, Wyo., 
636 P.2d 513, 516 (1981).

We approved the 
use of fair rental value as the measure of damages where a property owner has 
lost the use of property. Wheatland 
Irrigation Dist. v. McGuire, Wyo., 
562 P.2d 287 (1977). This is in accord with the general rule that the measure of 
damages for the temporary loss of property is the fair rental value of that 
property. Scott v. Elliott, 253 Or. 168, 451 P.2d 474 (1969). See, Nelson v. Hy-Grade Const. and Materials, 
Inc., 215 Kan. 631, 527 P.2d 1059 (1974). The damage 
caused by delay in performance often takes the form of loss of use of the item 
of property involved. "Where the property is realty, damages are generally 
measured by the rental value of the realty involved." 22 Am.Jur.2d Damages § 50. 
We have used this standard in other cases where the damage was caused by delay 
rather than injury. Quin Blair 
Enterprises, Inc. v. Julien Construction Co., Wyo., 597 P.2d 945 
(1979). See, Mullinax Engineering Co. v. 
Platte Valley Construction Co., 412 F.2d 553 (10th Cir. 1969). In this case, 
the actual damages presented were considerably greater than the fair rental 
value of the AUMs because additional expense occurred in shipping the cattle to 
Texas. We 
cannot find that the actual damages incurred by grazing the cattle in Texas rather than Wyoming flow from appellants' failure to 
timely perform under the option agreement. The parties stipulated to a fair 
rental value of $10 per AUM per grazing season. Therefore, damages should be 
awarded to appellees in a sum of $41,080 for each of the years 1980, 1981, and 
1982, and subsequent grazing seasons, if any, until appellants' cattle are 
removed from the AUMs and the use of grazing privileges have been restored to 
appellees. This sum shall be calculated with ten percent 
interest.

[¶20.]  Appellants also protest the awarding of 
court costs. Section 1-14-126, W.S. 1977, allows a court to award and tax costs 
as it deems right and equitable. Appellants argue that § 1-14-127, W.S. 1977, is 
applicable. That statute provides that:

"When several actions are 
brought on one (1) instrument in writing against several parties who might have 
been joined as defendants in the same action, no costs shall be recovered by the 
plaintiff in more than one (1) of the actions if the parties proceeded against 
in the other action were openly within the state at the commencement of the 
previous action."

This statute is 
not applicable because several actions were not brought against several parties 
who might have been joined as defendants. Appellees brought only this action 
which related to the option agreement; they have not previously litigated the 
option with other parties and been awarded court costs in different proceedings. 
Therefore, this statute does not bar recovery of costs in this 
case.

[¶21.]  Appellants also question the awarding of 
attorneys' fees and punitive damages. As a general rule one is unable to recover 
attorneys' fees without specific statutory authority or a contractual 
obligation. Kvenild v. Taylor, Wyo., 594 P.2d 972 (1979); Mader v. Stephenson, Wyo., 
552 P.2d 1114 (1976). In this case there is no statutory authority nor a 
contractual provision relating to the awarding of attorneys' fees. The parties 
entered into a written option. At that time they could have provided for 
attorneys' fees if they chose to do so. This was not 
done.

"It is one thing to 
interpret a contract or to discern the contractual intent of the parties 
pursuant to established legal rules, but it is another thing to make a contract 
for the parties. We are obliged to do the former, and we are prohibited from 
doing the latter." McCartney v. 
Malm, Wyo., 
627 P.2d 1014, 1020 (1981).

There is a split 
in authority as to whether counsel fees and other expenses in litigation may be 
included in estimating damages in a case where punitive damages are awarded. 22 
Am.Jur.2d Damages § 168. However, we do not need to address that question 
because we cannot uphold the award of punitive damages.

[¶22.]  Punitive damages are not properly given 
against one who acts in good faith under an erroneous sense of duty or against a 
defendant who acts in good faith and under the advice of counsel. 22 Am.Jur.2d 
Damages § 253. In this case, the Malmbergs acted under the advice of their 
attorney and in reliance upon his analysis of their legal rights. They also 
relied upon officials at the BLM office in regard to the trespass charge and the 
consequence of the transfer. We do not find this reliance indicative of 
recklessness, wantonness, willfulness, or malice. An unjustified breach of a 
contract does not entitle the opposing party to punitive damages. The general 
rule regarding damages for breach of contract limits the award to the pecuniary 
loss sustained. Modern Air Conditioning 
v. Cinderella Homes, Inc., 226 Kan. 70, 596 P.2d 816 
(1979).

"[C]ourts in this 
country, as in most of the rest of the world, expressly reject the notion that 
remedies for breach of contract have punishment as a goal, and with rare 
exceptions, refuse to grant `punitive damages' for breach of contract. In so 
refusing they confidently claim to be blind to fault, and they purport not to 
distinguish between aggravated and innocent breach. So Holmes said, `If a 
contract is broken the measure of damages generally is the same, whatever the 
cause of the breach.'" (Footnotes omitted.) E. Allan Farnsworth, Legal Remedies 
for Breach of Contract, 70 Colum.L. Rev. 1145, 1146.

We stated in Waters v. Trenckmann, Wyo., 503 P.2d 1187, 1190 (1972) that in order to properly award punitive damages in an action 
upon breach of contract "there would have to be conduct on the part of defendant 
amounting to aggravation, outrage, malice or willful and wanton misconduct." We 
also stated that there must be evidence of spite, ill will or willful and wanton 
misconduct at the inception of a fraudulent contract and that the remedy for 
wrongful acts occurring afterwards would be compensatory damages for breach of 
contract. Several jurisdictions have stated the rule that punitive damages can 
be awarded in a breach of contract action if the conduct constituting the breach 
rises to the level of an independent tort. Jorgenson v. John Clay and Co., 
Utah, 660 P.2d 229 (1983); Temmen v. Kent-Brown Chevrolet Co., 227 
Kan. 45, 605 P.2d 95 (1980); Miscione v. Bishop, 130 Ariz. 371, 636 P.2d 149 
(1981).

[¶23.]  Appellees present no argument nor cite 
any cogent authority which would sustain the award of punitive damages. Their 
entire argument consists of

"We submit with 2 Trial 
Judges awarding $50,000 punitive damages, the findings of `theft' and 
`outrageous' conduct are ample justification for those 
damages."

We cannot agree. 
We find nothing to indicate that at the time the option was signed that the 
Malmbergs did not intend to carry out their obligations under the agreement. The 
Malmbergs were wrong in breaching the contract. However, from a reading of the 
record, we do not find that appellants' conduct creating the breach rose to a 
level of aggravation, outrage, malice, or willful and wanton misconduct. In 
addition to the reasons stated, it is also apparent that an award of punitive 
damages cannot be here sustained because appellees did not satisfy their burden 
of presenting evidence of appellants' financial worth. The only evidence 
relating to appellants' financial status consisted of appellees' attorney 
asking:

"Mr. Malmberg, if you're 
broke as you've previously characterized yourselves to be, what difference does 
it make to you how much the damages are that are awarded in this proceeding? It 
doesn't make any difference; does it?"

and appellants 
responded:

"I guess I can't answer 
that. I don't know whether it would or not. Just a matter of trying to hang on, 
I guess. It would be easier to hang on if you're two hundred thousand in the 
hole than if you're six hundred thousand in the hole."

This is hardly 
sufficient to meet the requirements of a bifurcated trial establishing the 
factor of financial condition set forth in Cates v. Eddy, Wyo., 669 P.2d 912 (1983) 
and Campen v. Stone, Wyo., 635 P.2d 1121 (1981) nor the holding in Adel v. 
Parkhurst, Wyo., 681 P.2d 886, 892 (1984), which stated that: "[I]n the 
absence of evidence of a defendant's wealth or financial condition an award of 
punitive damages cannot be sustained."

IV

[¶24.]  The United 
States protests the action of the court imposing an 
equitable judgment lien on the Malmberg cattle with priority over the lien of 
the United 
States. The United States 
was granted permission to intervene between the two trials. An equitable lien is 
a remedial device. It is not judicially recognized until the court declares its 
existence and then it relates back to the point it was created by the conduct of 
the parties. 51 Am.Jur.2d Liens § 22. The elements necessary for an equitable 
lien are (1) a duty or obligation from one person to another; (2) a res to which 
that obligation attaches; (3) which can be identified with reasonable certainty; 
and, (4) an intent that the property serve as security for that purpose. 51 
Am.Jur.2d Liens § 24.

[¶25.]  An equitable lien which does not arise 
from a contract is essentially a tool which is used by courts to prevent unjust 
enrichment. The unjust enrichment must result from the receipt of particular 
property upon which the lien is imposed. Marriage of Bull, 48 Or. App. 565, 617 P.2d 317 (1980). To give rise to an equitable lien, the parties must have 
intended to impress the particular fund or thing with the charge of the 
underlying debt. Kinne v. Kinne, 27 Wn. App. 158, 617 P.2d 442 (1980). It is essential to the establishment of an 
equitable lien or constructive trust that an identifiable res is present. Penn Central Transportation Co. v. 
Consolidated Edison Company of New 
York, 333 F. Supp. 81 (E.D.Pa. 1971). An equitable 
lien is essentially a creature of equity, based on the equitable doctrine of 
unjust enrichment. It may be declared by a court of equity out of a 
consideration of right and justice as applied to the relationships involved. 
Caldwell v. Armstrong, 342 F.2d 485 (10th Cir. 
1965).

[¶26.]  The elements necessary for an equitable 
lien are not present with regard to the Malmbergs' cattle. The 
United 
States did not have a duty or obligation to 
appellees concerning the cattle. There was no intent; there was no contract; 
there was no unjust enrichment. We sympathize with the trial judge's motivation 
in attempting to create a secured judgment. However, where legal principles do 
not permit imposition of an equitable lien, it may not be imposed merely from a 
sense of justice in a particular case. Phoenix Mutual Life Ins. Co. v. Harden, 
Okla., 596 P.2d 888 (1979).

[¶27.]  The parties have set forth some 
twenty-four assignments of error, all of which have been considered and disposed 
of by our discussion of the legal principles involved herein. Therefore, the 
judgment is affirmed as to appellees concerning the ownership of the Chapman 
AUMs and reversed in part as to damages. We affirm the original decree awarding 
the rental value of the AUMs to Redlands and Wyckoffs; we reverse the portion 
of the judgment pertaining to attorney fees and punitive damages. The judgment 
is also reversed to the extent that the judgment lien was given priority over 
the United 
States' lien against the Malmbergs' 
cattle.

[¶28.]  Reversed for entry of judgment 
inconsistent with this opinion.

1 43 C.F.R. § 
4115.2-1(e)(8)(i) states:

"(e) Terms and conditions. - The issuance and 
continued effectiveness of all regular licenses and permits will be subject to 
the following terms and conditions:

* * * * * 
*

"(8) If a licensee or 
permittee loses ownership or control of:

"(i) All or part of his 
base property, the license or permit, to 
the extent it was based upon such lost property, shall terminate immediately 
without further notice from the District Manager; except that, if the licensee 
or permittee notifies the District Manager * * *." (Emphasis 
added.)

BROWN, Justice, specially 
concurring.

[¶29.]  The sundry options and agreements 
regarding the Chapman AUMs are illegal. The Redlands, Wyckoffs and Malmbergs attempted to 
circumvent federal law. While the parties' culpability may differ in degree, 
none of them came to court with clean hands.

[¶30.]  The AUMS involved here were obtained by 
Redland from Chapman and were attached to the Bar K-B Ranch. The Redlands attempted to 
illegally transfer the AUMS to Wyckoffs on July 21, 1977. Wyckoffs, however, 
were barred by law from holding the Chapman AUMS because they never controlled 
qualified base property, which is required under federal grazing law. 43 
U.S.C.S. §§ 315 et seq. Grazing rights (AUMS) cannot be held in a vacuum, and 
can only be held in conjunction with qualified base 
property.

[¶31.]  The code of federal regulations provide 
in part:

"(e) Terms and 
conditions. The issuance and continued effectiveness of all regular licenses and 
permits will be subjected to the following terms and 
conditions:

"1) The possession or 
control by the applicant, licensee, or permittee, of feed and forage supplies 
adequate, with the authorized Federal range use, to support his licensed or 
permitted livestock for a full year-round operation.

* * * * * 
*

"(8) If a licensee or 
permittee loses ownership or control of:

"(1) All or part of his 
base property, the license or permit, to the extent it was based upon such lost 
property, shall terminate immediately without further notice from the District 
Manager * * *." 43 C.F.R. § 4115.2-1.

[¶32.]  The dealings between Redlands, Wyckoffs and 
Malmbergs are tainted with the illegal attempt to sever the Chapman AUMS from 
its supporting or base property. The parties attempt to sever the AUMS from the 
base property amounted to treating them as an investment by trading them on the 
market for profit. This is contrary to the spirit and letter of the 
law.

[¶33.]  The attitude of the local office of the 
Bureau of Land Management (BLM) encouraged the parties (Redlands, Wyckoffs, and 
Malmbergs) to violate the law. The BLM knew that the agreements were illegal, 
but pretended that nothing irregular had happened.

[¶34.]  No authority need be cited for the 
proposition that courts do not enforce illegal agreements. The trial court and 
the majority of this court dealt with the problem of the illegal contracts by 
ignoring them, or pretending that the Redland-Wyckoff-Malmberg agreements were 
legal, in effect, creating a fiction.1 

[¶35.]  As a matter of expediency, in order to 
conclude litigation, I will also indulge in this fiction and concur in the 
result determined by the majority. However, I disagree with that portion of the 
majority opinion that purports to determine ownership of the AUMS. I do not 
think a state court has jurisdiction to make that 
determination.

1 Fiction of law: "An 
assumption or supposition of law that something which is or may be false is true 
* * * an assumption, for purposes of justice, of a fact that does not or may not 
exist. * * *" Black's Law Dictionary 562 (5th Ed. 1979).

"It [fiction] is 
the creature of the court, and is moulded to purposes of justice, according to 
the view which its inventors have taken of its capacity to effect those 
purposes." Marshall, Cr., J., Livingston v. Jefferson, 15 Fed.Cas. (No. 8411) 660, 663 
(1811).

ROONEY, Justice, 
dissenting.

[¶36.]  The grazing rights in question were 
granted by the BLM. They were attached to base property of the Bar K-B Ranch. 
The issues in this case arise from an effort by the parties to circumvent the 
requirement of the BLM that the grazing rights be attached to base property. An 
attempt was made to place the rights in limbo until the Redlands acquired base 
property to which the rights could be transferred. Of record, the rights were to 
remain attached to Malmbergs' property, but the conflict here arose because of 
the efforts to thwart the BLM requirement.

[¶37.]  Accordingly, I believe the parties come 
to our courts with dirty hands. I would not grant relief to any of them, but 
would leave them as they were. He who comes into equity must come in with clean 
hands. Walker v. Board of County 
Commissioners, Albany County, Wyo., 644 P.2d 772 (1982); Takahashi v. Pepper Tank & Contracting 
Company, 58 Wyo. 330, 131 P.2d 339 (1942); Wettlin v. Jones, 32 Wyo. 446, 234 P. 515, reh. denied 236 P. 247 (1925).

[¶38.]  I would reverse the judgment granting 
specific performance and awarding damages and direct the district court to 
dismiss the causes presented by all parties. BLM may then concern itself with 
disposition of the grazing rights, hopefully as it should have done when it 
first received knowledge of the manipulation thereof.