No. 13654 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

McDONALD & CO. , a 

Montana Corporation, 

Plaintiff and Respondent, 

FISHTAIL CREEK RANCH LIMITED 

PARTNERSHIP, A Montana Limited 

Partnership, and JAMES R. REGER, 

Defendants and Appellants. 

Appeal from: District Court of the Thirteenth Judicial 

District, 

Honorable Charles Luedke, Judge presiding. 

Counsel of Record: 

For Appellants: 

Moses, Tolliver and Wright, Billings, Montana 

Kenneth D. Tolliver argued, Billings, Montana 

For Respondent: 

Hibbs, Sweeney and Colburg, Billings, Montana 

Maurice R. Colberg, Jr. argued, Billings, Montana 

Submitted: September 23, 1977 

Decided : goy ;, 9 yf! 

4. -. 

Filed: 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

Plaintiff McDonald & Co. initiated this action in the 

District Court, Yellowstone County, to recover damages for 

defendants' alleged breach of a real estate listing agreement. 

Defendants counterclaimed to recover damages purportedly caused 

by plaintiff's breach of a broker's fiduciary duty. The jury 

returned a verdict and judgment was entered awarding plaintiff 

damages in the sum of $11,830 and awarding defendants damages 

on their counterclaim in the sum of $10,000. Plaintiff filed 

an alternative motion to alter or amend the judgment. The 

District Court granted the motion and an amended judgment on 

the verdict was entered awarding plaintiff damages in the sum 

of $11,830 and awarding defendants damages on their counterclaim 

in the sum of $2,500. 

Defendants appeal from the District Court's amended judgment 

allowing plaintiff to recover $11,830 in dama~s and granting 

plaintiff's alternative motion to amend the judgment by reducing 

defendants' amount of recovery on their counterclaim from 

$10,000 to $2,500. Plaintiff appeals from the District Court 

judgment allowing defendants to recover on their counterclaim. 

The issues presented on appeal are: 

1. Whether plaintiff McDonald & Co. should be entitled 

to recover a commission under the listing agreement? 

2. Whether the written listing constituted merely a written 

confirmation of just one part of the overall oral contract 

between the parties which could be repudiated and thereby allow 

defendants to deem all agreements at an end? 

3. Whether the District Court erred in reducing the jury's 

verdict to defendants on their counterclaim? 
McDonald & Co. is a Montana corporation located in 

Billings, Montana, engaged in the business of selling real 

estate. Sam E. McDonald, Jr., is the president and majority 

stockholder of McDonald & Co. Fishtail Creek Ranch is a limited 

partnership organized under the laws of Montana and qualified 

to do business in Montana. Its original articles of limited 

partnership were executed on May 1, 1973. James R. Reger is 

listed as the general partner with limited partners Russell 

C. Clark, Sam E. McDonald, Jr., John 0. Odegaard, James R. 

Reger, S. C. Sande, C. B. Sand, and S.J. Sande. Mr. Reger 

testified he received a monthly salary of $250 as compensation 

for his duties as general partner. 

In the spring of 1973, Reger became associated with 

McDonald & Co. as a real estate salesman. He received his 

real estate license in June 1973. Reger and McDonald purportedly formed an oral agreement as to the division of commissions between the broker and salesman upon the sale of 

property. Reger remained associated with McDonald & Co. until 

mid-January 1974. During his employment with McDonald Reger's 

major efforts were devoted to negotiating the sale of Fishtail 

Creek Ranch, a cow ranch, formerly known as the Partington Ranch 

located in Stillwater County, Montana. The ranch was purchased 

by Fishtail Creek Ranch Limited Partnership as an investment 

property. 

An instrument entitled "EXCLUSIVE RIGHT TO SELL RANCH 

AND ACREAGE LISTING FORM" was executed by Sam E. McDonald, Jr., 

and James R. Reger, in his capacity as general partner of 

Fishtail Creek Ranch Limited Partnership. The instrument is 

dated June 20, 1973; however, the testimony of the signators 
indica ks the instrument was not executed until sometime in 

November 1973. The instrument indica tes the listing was 

not to expire until June 19, 1974. The apparent motive for 

predating the instrument was to guarantee McDonald & Co. a 

commission from any sale of Fishtail Creek Ranch which might 

have been precipitated after June 20, 1973. 

During Reger's employment with McDonald & Co. there were 

several attempts to consummate a sale of Fishtail Creek Ranch. 

In July 1973, Jim 0. Mayo executed an agreement to purchase 

Fishtail Creek Ranch for $235,000. Mayo deposited $1,000 with 

McDonald & Co. as consideration for an option to purchase, the 

option to expire August 31, 1973. Mayo was unable to obtain 

financing for the purchase and requested a refund of his $1,000. 

McDonald & Co. returned $800 to Mayo, $200 was forfeited to the 

limited partnership. 

In October 1973 McDonald & Co. in an alleged attempt to 

precipitate sale of the Fishtail Creek Ranch, contracted with 

Mueller Engineering for the subdivision and plotting of some 

ten acre tracts on the property. McDonald & Co. paid the 

costs for the subdivision work and was purportedly reimbursed 

by Fishtail Creek Limited Partnership for all costs incurred 

in listing the property. 

On November 9, 1973, an agreement for the purchase of 

Fishtail Creek Ranch (exclusive of the area being subdivided) 

was executed by Reger, in his capacity as general partner for 

Fishtail Creek Ranch Limited Partnership, and the purchasers, 

Jack D. Shanstrom, Morris P. Blakely, and Arnold Huppert, Jr. 

The agreement incorporated a contract for deed which provided 
for the deposit of earnest money. The typed contract specified 

an earnest money deposit in the amount of $5,000. However, the 

printing on the instrument had been struck out by a pen and 

the figure $15,000 written in as a substitution. The facts 

reveal that only $5,000 was ever received by Sam E. McDonald,Jr. 

Checks totaling an additional $10,000 were retained by the 

attorney for the buyers and these checks were eventually 

returned to the buyers when the prospective purchase fell 

through. 

On January 11, 1974, the parties to the purchase agreement 

executed a "MUTUAL RELEASEt' providing that Fishtail Creek Ranch 

Limited Partnership "retain the $5,000 earnest money which is 

presently deposited in the escrow account of McDonald & Company." 

Further,that the purchasers be released from all claims or 

demands arising out of the agreements executed by the parties 

for the purchase of Fishtail Creek Ranch. The $5,000 was 

delivered to Fishtail Creek Ranch Limited Partnership. 

Reger's association with McDonald & Co. was terminated 

in January 1974. The purported basis for termination of the 

employment relationship was Reger's refusal to accept McDonald's 

contractual conditions for the 1974 employment year. By letter 

of February 1, 1974, counsel for Reger informed McDonald that the 

listing agreement for Fishtail Creek Ranch was terminated 

as of January 28, 1974, the date when the parties allegedly 

severed their association. 

Reger subsequently went to work for Northwest Real Estate, 

a real estate brokerage firm located in Billings. By May 1, 

1974, Reger had sold eight of the previously subdivided tracts 

for a total amount of $123,000. Six of the eight tracts were 
sold to or through representatives of Mueller Engineering. 

On April 19, 1974, James E. Edwards entered an option contract 

to purchase Fishtail Creek Ranch for $215,000. Edwards 

eventually exercised the option. 

Issue 1. It is necessary to decide whether or not the 

listing agreement between McDonald & Co. and Fishtail was 

exclusive or nonexclusive. The pertinent parts of the listing 

agreement are: 

The title reads:"EXCLUSIVE RIGHT TO SELL RANCH AND ACREAGE 

The body sets forth: "Agreed Commission Seven percent (7%) 

of Sales price 

"Exclusive Listing McDonald & Co. I I Exclusive Agency - No Non-Exc. - no 

"Commences June 20, 1973 Expires June 

19, 1974." 

The agreement is on a printed form. The items inserted in 

the blanks are typed into the printed form. It is obvious there 

can be no other reasonable construction of this agreement than 

that it grants an exclusive listing to the broker whose name 

is typed in the appropriate blank, "McDonald & Co." . The 

exclusive listing agreement to that broker has a one year period 

of duration commencing June 20, 1973 and expiring June 19, 1974. 

The word "no" is inserted in the blank after the form provision 

of "Non-Exc.". Certainly that means the agreement is not a 

nonexclusive agreement and therefore, the nonexclusive reference 

contained in the last paragraph of the portion of the agreement 

quoted above does not control. The agreement as a whole speaks 

of an exclusive listing agreement. 
The form provides that a commission must be paid upon any 

actual sales prior to the "termination of such right ." Defendants 

argue the February 1, 1974, letter giving notice the listing 

agreement was terminated, unilaterally terminated the listing 

agreement. Plaintiff axtends defendants could not unilaterally 

terminate the listing agreement. In Kester v. Nelson, 92 Mont. 

69, 73, 10 P.2d 379 (1932), this Court stated: 

II 8 Persons competent to contract can as validly agree 

to rescind a contract already made as they could 

agree to make it originally. However, as a contract 

is made by the joint will of two parties, it can be rescinded 

only by the joint will of the two parties. It is 

obvious that one of the parties can no more rescind the 

contract without the other's express or implied assent, 

than he alone can make it. "' 

In the instant case, there was no mutual assent. In fact, 

after Sani McDonald received the termination letter of February 1, 

1974, he personally told James Reger that the exclusive listing 

agreement was still in effect until its termination date. In 

Cloe v. Rogers, 31 Okl. 255, 121 P. 201 (1912), the court, relying 

on similar facts as are found in the instant case, stated a 

general rule that: 

'I* * * where an agency is uncoupled with an interest, 

it may be revoked by the principal at will, without 

liability for damages; but where it is for a fixed 

time, and contemplates on the part of the agent the 

expenditure of time and money to carry it out, and is 

accepted, and the duties imposed are entered upon by 

the agent, and money and time are expanded in pursuance 

of the object of the agency, that, although the principal 

has the power to revoke and bring to a termination the 

contract, yet he lacks the right of so doing, except upon 

the burden of responding to the agent for such damages 

as he may suffer by reason thereof." 121 P. 203. 

Issue 2. Defendants in their second issue raise an ingenious 

but unmeritorious argument. They allege McDonald & Co. breached 

its employer-employee relationship with James Reger and this 

breach also breached the exclusive listing agreement between 
McDonald & Co, and Fishtail on the premise that the general 

partner signing that agreement for Fishtail was also James Reger. 

Defendants cite section 13-708, R.C.M. 1947, as authority. That 

statute requires that contracts to be considered as one transaction must (1) relate to the same matter; (2) be between the 

same parties, It is obvious that any employer-employee agreement 

between McDonald & Co. and Reger personally, has no connection 

with the exclusive listing agreement for the sale of the Fishtail 

properties. The two agreements were between different parties. 

The employer-employee agreement was between McDonald & Co. and 

Reger personally. The exclusive listing agreement is between 

McDonald & Co. and Fishtail. 

Again, in Cloe v. Rogers, supra, it is stated: 

'"Where an agent has an agreement with his principal 

to sell certain lands, which have been placed in his 

hands to be disposed of within a time limited, and the 

agent is to receive no pay or compensation for advertising, putting the same upon the market, or for his 

services, excepting a share of the profits arising from 

the sales of the lands, and in the performance of such 

agreement he renders services for several months, and 

expends time and money, and then, without any reason or 

excuse, the principal revokes the contract, the agent 

is entitled to recover from the principal such compensation in damages as will be equal in amount to his share 

of the profits which would have resulted had the lands 

been sold by him." 121 P. 207. 

In the instant case, McDonald & Co. not only advertised 

this land in major newspapers throughout the country, it also 

arranged for part of these lands to be surveyed and platted 

so it could be subdivided. Robert Sanderson, president of 

Mueller Engineering, testified: 

"Q. Who first contacted you concerning this work? A. 

Our records indicate that Randy Reger was our first 

contact on the project. 

Q One of the defendants in this case is James R. 

Reger. Is that the person you refer to as Randy Reger? 

A. That's correct. 
"Q. Did you understand that he represented another 

firm at that time? A. Yes. Again, our file indicates 

that Randy Reger was the contact on the project and our 

client was actually McDonald & Company, of which we 

understood that he was an employee. 

"Q. You mention your last bill of January 28, 1974. 

To whom was that directed, the bill? A. The statement 

was directed to the client, McDonald & Company." 

As a result of contact with Mueller Engineering which was 

initiated by McDonald & Co., six of the subdivision tracts were 

sold to people associated with Mueller Engineering. 

"It is a generally accepted law that a real estate 

broker is entitled to commissions when he has, in 

pursuance of his employment and within the time 

specified in the contract of employment, procured a 

purchaser able, ready and willing to purchase the 

seller's property on the terms and conditions specified 

in the contract of employment. Roscow v. Baia, 114 

Mont. 246. 135 P.2d 364. * * *I1 Diehl and Associates, Inc. 

v. Houtchens, Mont . , 567 P.2d 930, 34 ~t.~ep. 

814, 817 (1977). 

When, as in the instane case, there is a revocation and 

a subsequent sale within the period of the exclusive listing 

agreement, it will be presumed that the broker with the exclusive 

listing would have made the sale. 

"'Where * * * a real estate broker has an exclusive 

listing and has established that the property described 

in the listing agreement has been sold, a prima facie 

case is established for a codssion upon the entire 

sales price. ''I Seattle Investment Company v, Kilburn, 

5 Wash,App. 137, 485 P.2d 1005, 1007 (1971), quoting 

from Fleetham v. Schneekloth, 52 Wash.2d 176, 179, 324 

P. 2d 429, 431 (1958). 

In the instant case the entire Partington ranch was sold within 

the time the exclusive listing agreement was in effect. Therefore, 

the District Court was correct in its award of commissions 

totaling $11,830 to McDonald & Co. 

Issue 3. The final consideration on appeal is whether 

the District Court erred in reducing the jury's verdict to the 

defendants' counterclaim? Reger and Fishtail claim that McDonald 
& Co. failed to collect an additional $10,000 earnest money 

in connection with the proposed Shanstrom, Blakely and Huppert 

sale. The agreement on this sale called for $15,000 earnest 

money. Of this $15,000 only $5,000 was ever received. The 

reason why the other $10,000 was not received is not clear from 

the record, however, James Murphy, attorney for the three buyers, 

testified: 

"Q. Did you ever get authority from your clients 

to release those checks, totaling $10,000.00 to the 

seller of the property or the broker? A. NO." 

Whatever the reason for withholding the authority to 

deliver those checks, nowhere in the record does it disclose 

that McDonald & Co. was negligent in not collecting this 

$10,000. The Shanstrom, Blakely and Huppert agreement was 

terminated by all parties including Reger and Fishtail. A mutual 

release agreement was signed and dated January 11, 1974. This 

agreement was signed by Reger as general partner of Fishtail. 

It was also signed by the three buyers. All parties agreed that 

any contracts to purchase and sell the property were terminated. 

The buyers agreed that $5,000 earnest money could be forfeited to 

Fishtail and matters were in fact terminated. There is no 

question that there was a recognition in the execution of this 

agreement that $5,000 was the total amount of earnest money to 

be forfeited on behalf of the buyers. 

Here, the record not only fails to substantiate damages but 

it is devoid of any wrongdoing by McDonald in collecting the 

earnest money. Therefore, Fishtail on its counterclaim is entitled 

to nothing and the District Court is affirmed with respect to the 
judgment of $11,830 awarded to plaintiff-respondent. The 

judgment awarding the sum of $2,500 to defendants-appellants 

is vacated. 

Austice