No. 13607

IN THE SUPREME COURT OF THE STATE OF MONTANA 1977

EDWIN A. SEIFERT,JR., Plaintiff and Appellant,

EDWIN A. SEIFERT and CHRISTINE SEIFERT and EDWIN A. SEIFERT RANCH, a Montana Corporation, Defendants and Respondents.

Appeal from: District Court of the Eighteenth Judicial District, Honorable Jack D. Shanstrom, Judgepresiding. Counsel of Record: ForAppellant: William Gilbert argued, Bozeman,Montana For Respondents: Bennett and Bennett, Bozeman,Montana Lyman Bennett, Jr argued, Bozeman, Montana

Submitted: May 24, 1977Mr. Chief Justice Paul G. Hatfield delivered the Opinion of the Court. This is an appeal from a judgment entered in the district court, Gallatin County,denying plaintiff's motion for summary judgment, but granting defendants'motion for summary judgment. This case comes to this Court from the district court where the parties stipulated no disputed facts existed and the district court might consider the parties' motions for summary judgment upon the filed briefs. The district court granted defendants' motion for summary judgment. No reasons for its conclusion were given by the district court. On March 1, 1965, the parties here entered into a written lease and option agreement. From this lease option agreement, plaintiff, Edwin

### A. Seifert,Jr., was granted the option to purchase the real property owned by defendants Edwin A. Seifert and Christine R. Seifert for the sum of $150,000. The leaseperiod was 5 years beginning March 1, 1965. The terms of the lease included 2000 acres of the Edwin A. Seifert Ranch, togetherwith all equipment, farm machinery and buildings, except defendants' residence. Plaintiffwas given the privilege to renew the lease for an additional 5 years, upon the same terms, at any time during the original term. Under the lease portion of the agreement, defendants were to receive 1/2 of all crops harvested and pay 1/2 of all expenses for fuel, seed, repairs and other incidental farm expenses. For the considerationof $1.00, plaintiff was given the exclusive option to purchase the Edwin A. SeifertRanch at any time during the term of the lease,or any renewal thereof, for the sum of $150,000. On February 28, 1970,plaintiff sent a written noticeto renew the lease and option for an additional 5years. $1.00 considerationwas submitted with the notice. Defendants requested their attorney return the $1.00 considerationand refused to sign acknowledging receiptof the notice. Plaintiffand defendants continued operating the ranch

as before, but defendant, Edwin, Sr., stated in his deposition: "Q. Up to that time, Ed, had you and Eddy been working back and forth farming,you helping him with his farming and he helping youwith yours? 

### A. Right. "Q. Has there ever been any real change in that? A. Well, not until starting of 1971,where it got to be more of a load forme and he has done less. "Q. Has Ed Jr. evermade any arrangements to give you any compensation for your labor? A. Never mentioned it. "Q. Was it ever discussed? A. No. "Q. Was the fact of repair ever discussed? 

### A. No. "Q. Did it seem to you like you had a tenant? Or, it was the same old ranch? A. Well, I began to think Iwas the boss and the hired man both." On January 17, 1975,plaintiff sent a letter to defendants with his personal check of $150,000 inpayment of the purchase price under the option agreement. In that letter, plaintiff gave notice he was exercising his option to purchase the land as outlined in the lease option agreementdated March 1, 1965. On January 21, 1975, defendants through their attorney, refused to accept the personal check of plaintiff. A second tender of a bank money order was submitted,but this also was rejected by defendants. After various attempts to settle their dispute failed, plaintiff filed suit for specific performance. Following joint motions for summary judgment the district court ruled in favor of defendants. Plaintiff appeals from that order. The issues on appeal are:1. Did the district court err by not granting plaintiff's motion for summary judgment? 2. Did the district court err by granting defendants' motion for summary judgment? Plaintiff brought this suit to compel specific performance of the contract dated March 1, 1965. Specific performance is an equitable remedywhich compels the performance of a contract in the precise terms agreed on. The foundationof a suit for specific performance of a contract is that,by compelling the parties to do the very things they agreed to do,more complete and perfect justice is attained than by giving damages for breach of a contract. Specific performance ispurely an equitable remedy;presenting a purely equitable controversy and is governed by equitable principles. 81 C.J.S. Specific Performance 

### S1,p. 408. See also: State ex rel. Victor's Inc. v. District Court, Mont

# . , 545 P.2d 1098, 33 St.Rep. 23, 27. In 81C.J.S. Specific Performance S3,p. 411, it is stated: 

### " 

## * * * specific performance will be ordered only on equitable grounds inview of all the conditions surrounding the particular case. 

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"Abill in equity for specific performance is an appeal to the conscience of the court, and generally, in such a proceeding, the inquirymust be whether, in equity and good conscience, the court should specifically enforce the contract. Accordingly, specific performance will be granted when it is apparent from a view of all the circumstances of theparticular case that itwill serve the ends of justice,and itwill be withheld when, from a like view, it appears that it will produce hardships or injustice to either party 

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## *." (Emphasisadded.) Section 17-809,R.C.M. 1947, states that specificperformance cannot be enforced in favor of a party to a contract if that party "hasnot fully and fairly performed all conditions precedent on his part to the obligation

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## *." In Si*well v. New Mine Sapphire Syndicate, 130Mont. 189, 197, 297 P.2d 299,this Court stated: "Section17-803,supra,was construed in McDonald v. Stewart, 127Mont. 188, 199, 259 P.2d 799, 805,where the court in affirming a judgment for defendant said: 'Before McDonald is entitled to specific performance by Stewart,he must show that he has performed his part of the agreement. This he has failed to do. R.C.M. 1947, section 17-803,provides: "Neitherparty to any obligation can be compelled specifically to perform it,unless the other party thereto has performed 

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## *". "'Unless performance iswaived or excused,a plaintiff seeking to enforce a contractmust perform his obligations thereunder,and plaintiff's wilful violation of an essential covenant of a contract is a defense to specific enforcement of the contract. 81 C.J.S., Specific Performance, section 94,page 614.'" Therefore, this Court is required to examine the facts and circumstances of this case to determine whether plaintiff fully and fairlyperformed his obligationsunder the contract. The facts showplaintiff farmed approximately 500 acres

as his own,and defendants farmed approximately 2000 acres during the time the contractwas in existence. Defendants and plaintiff exchanged work and machinery between the two properties,but no showingwas made that plaintiff took possession or control of the ranch in any manner different from the operationbefore the contract. According to the contract,defendants were to receive 1/2 of the crop as rent and pay 1/2 of all expenses for fuel, seed, repairs and other incidental farm expenses. In reality, Seifert Sr.'s statements show this was not the case. "Q. You took a little more because of the extra work. A. Of course a11 the way through and all the time he has had that farm or supposed to have been renting and when his leasewas up 

### -- wet when I saywe, the wife and I,have paid for all fuel,paid for all the oil,paid for all the grease, we have paid for all repairs,and all the farm machinery,plus all repairs on the combines,plus Iam safe in saying 95 percent of the hired help we have paid for. When I say 'we', I say the wife and I. Sowhen you figure that all out, that runsinto quite a little sum ofmoney. "Q. That is the reasonyou have taken more of the crop, then? A. Right.

"Q. Did the two of youprovide various parts of thework that went in to operateyour ground in 1972? A. He didn't help much after Igot that big tractor atmy place. I donemy ownwork on my own place, and then he was there to get the tractor to go down and do his. 

### "Q. So, therefore, sinceyouwere doingmost of the work onyour place,you tookmost of the crop? 

### A. Right. "Q. He only took a smaller portion of the crop, and he didn't get any 50percent; is that correct? A. Right." Seifert Sr.'s statements also showplaintiff did not take over the ranch repair work: 

### "A. Well, therewas times when we were caught up, therewas a lot of fence fixing, thingshe could do. But he didn't. He hasn't set a fence post even on his own place since he bought it. What fence fixing has been done, Ihave had done or done myself and paid for it. "Q. I see. And then you have taken a littlemore of the crop because of that? A. Yeah." Under the circumstances,plaintiff failed to showhe fully and fairly performed the lease according to its terms. For plaintiff to secure the desired relief (specific performance) he is required to come into court with clean hands, and with a cause whose ethical qualitieswere such as to commend it to the conscience of the court. Schlegelv. Moorhead, Mont

# . I wP.2d1009, 33 St.Rep. 836, 840; section 49-109,R.C.M. 1947. This action seeks an equitable remedy. In view of the factplaintiff did not perform his obligationsunder the contract, this Court cannot in good conscience grant specific performance to plaintiff. We agree with the district court in not grantingplaintiff's motion for summary judgment. Plaintiff's second issue challenges the granting ofof defendants' motion for summary judgment. The facts showplaintiff continued thework-trade arrangement from 1970 through 1974with the knowledgeof defendants' contention as to the lease. Defendant, Seifert Sr., stated: "Q. Ed, after you sent back the document thatwas sent to you in 1970, 

### Imean after you had me do it for you by certifiedmail--and that is a document that ishere as a copy--what did Eddy say; anything? And you are looking at Exhibit 2. Did he protest to youwhen you sent that back? 

### A. Nope. 

### "Q. Did he continue to work with you the same as before? A. Right. "Q. Right up to about 1974? 

### A. Yeah. But as I say, he started slacking off the last few years and he has been doing less. "Q. Well, Iunderstand. But, 

### Imean, did he start asserting any rights until last fall? A. No." Plaintiff admitted this in his deposition of December 11, 1975: "Q. You talked to your folks. And did they repeatedly advise you that they thought you didn't have a lease? 

### A. Yes. "Q. And from the spring of 1970,did they so advise you everytime it came up? A. Sometime after thatwe mentioned it.

"Q. Everytime it came up for discussion,they didn't change their position, did they? A. Well, I suppose they didn't. "Q. And itwas known to you that thatwas their position throughout the period; wasn't it? 

### Imean, from 1970on? 

### A. Yes;yes." Thus, from 1970 to 1974,plaintiff did nothing to enforce his claim, knowing defendants contended that he had no lease. Plaintiff brought this suit in equity. Sinceplaintiff raised this question in equity, the equitable defense of laches and unreasonable delay is applicable. InAdair v. Capital Invest Co., 165Mont. 26, 29, 525 P.2d 548, this Court reviewed the equitable doctrine of laches, quoting fromRiley v. Blacker, 51 Mont. 364, 152 P. 758, 759:"'Laches,considered asa bar independent of the statute of limitations, is a conceptof equity; it means negligence in the assertion of a right; it is the practical application of the maxim, "Equityaids only the vigilant";and it exists when there has been unexplained delay of such duration or character as to render the enforcement of the asserted right inequitable. Therefore has it often been held by this court that: While amere delay short of the period of the statuteof limitationsdoes not of itself raise the presumption of laches [citing cases], yet "good faith and reasonablediligence only can call into activity the powers of a court of equity, and, independentlyof the period fixed by the statute of limitations, stale demandswill not be entertained or relief granted to onewho has slept upon his rights. Considerations of public policy and the difficulty of doing justicebetween the parties are sufficient to warrant a court of equity in refusing to institute an investigation where the lapse of time in the assertion of the claim is such as to show inexcusable neglect on the part of the plaintiff, no matter how apparently just his claimmay be; and this isparticularly so where the relations of the parties have been materially altered in themeantime." 

## * * *'" 165Mont. 29, 30. In the instant case,plaintiff waived his claimby doing nothing to enforce his rights once defendants' contentionof no lease came to his knowledge. Further,plaintiff allowed defendants to change their circumstances. Defendant, Seifert Sr., bought larger and more expensive equipment to farm all of the land,he testified: "A. Right. Itwas getting to be more work. And in 1971, I bought that big four-wheel tractor, the first one,because with his tractor and the one I had and him buying the rest of that ranch was toomuch. "Q. That was in 1971 that you bought the big outfit? A. Yes, sir. 

### "Q. Was the reason you bought that,was that so you could get all the land taken care of? A. Right." Also, in 1974 the ranchbelonging to Seifert, Sr. and his wife, was incorporated. This incorporation took place with the knowledgeof plaintiff and was aided by suggestionsof plaintiff.

As a result of plaintiff's negligence in asserting hisrights, and the change in defendants' circumstances, the ends of justice are served by granting defendants' motion for summary judgment. The order of the district court is affirmed. 1 /'

Chief Justice 

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