No. 82-25 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1982 

SUN DIAL LAND COMPANY, INC., 

Plaintiff and Respondent, 

VS. 

GOLD CREEK RANCHES, INC., RONALD 

A. JEROME a/k/a R. A. JEROME, 

and ROY A. JEROME, 

Defendants and Appellants. 

Appeal from: District Court of the Thirteenth Judicial District, 

In and for the County of Carbon 

Honorable Jack Shanstrom, Judge presiding. 

Counsel of Record: 

For Appellants: 

Radovich and Johnson, Billings, Montana 

For Respondent : 

Towe, Ball, Enright and Mackey, Billings, Montana 

Submitted: March 25, 1982 

Decided: May 17, 1982 

Filed: MAY 1 7 198g 

Clerk 
Mr. Chief Justice Frank I. Haswell delivered the Opinion of the 

Court. 

Defendants appeal from the judgment of the District Court 

which gave possession of certain property to plaintiff. We 

affirm and assess damages of $500 against defendants for a frivolous appeal. Rule 32, M. R.App.Civ. P. 

On December 3, 1974, defendants Roy A. Jerome and Ronald 

A. Jerome (Roy's son) executed a pencil agreement with plaintiff 

signed by Edward Towe (president) which provided that plaintiff 

Sun Dial Land Company would obtain financing for the purchase of 

Grove Creek Ranches, Inc. near Belfry, Montana. In return the 

Jeromes were to pay plaintiff 30% of all net earnings from the 

sale or operation of the ranch. On December 17, 1974, Sun 

Dial purchased the ranch. 

On August 4, 1976, a formal contract was executed between 

Sun Dial and defendant Gold Creek Ranches, Inc., a corporation 

set up by the Jeromes. About 9,000 acres were to be divided up 

into 20-acre parcels for sales as homesites . Defendants' planned 

sales did not materialize, and plaintiff sent defendants two 

default notices, one on February 6, 1978, and another on December 

31, 1978. 

On December 6, 1979, defendants filed a claim against 

Sun Dial alleging usury and fraud and seeking to set aside the 

formal contract of August 4, 1976, and reinstate the prior pencil 

agreement of December 3, 1974. On February 4, 1980, Sun Dial 

filed suit against the defendants, alleging the defendants' 

default and seeking judgment against defendants for unlawful 

detainer and restoration of the land to Sun Dial. Thereafter 

an involved series of procedural maneuvering between the parties 

followed which need not be recounted herein, except to note that 

the cases were consolidated. 

On September 17, 1980, the District Court set a trial date 

of October 6, 1980, and, at the October 6 hearing, the parties 

signed a settlement agreement in open court, the thrust of which 
was that defendants were to pay to the plaintiff $1,320,424.33 

with interest, plus over $150,000 in contract payments and taxes 

by October 6, 1981 (exactly one year after the agreement was 

signed). If the payment was not forthcoming on that date, defendants agreed to entry of judgment against them for immediate 

possession of the property by plaintiff and a quitclaim deed, 

wherein defendants relinquished all interest in the property, was 

placed in escrow to be filed if the payment was not made. The 

settlement agreement concluded with the statement that " . . . no 

further hearing shall be required for the entry of the judgment . . .I1 and recited that the settlement agreement was to be the 

final resolution of all disputes between the parties in the two 

law suits . 

As the payment deadline approached, there was some communication between the parties regarding an extension but no 

papers were ever signed. On October 6, 1981, the day the payment 

was due, defendant deposited $50,000 in Towe's account which was 

rejected. 

Because defendants did not make the required payments, on 

October 20, 1981 (pursuant to the settlement agreement), the 

court ordered that the judgment for Sun Dial's immediate 

possession of the property and the quitclaim deed be released 

to Sun Dial. The District Court signed the judgment against 

defendants on October 26 (which was filed on October 29) and the 

next day (October 27) defendants filed a lis pendens and a 

"cross-petition" alleging malicious interference by plaintiff in 

the negotiation of the sale of the land, and seeking to set aside 

the settlement agreement. 

Sun Dial answered the "cross-petition" and moved to 

strike the lis pendens on November 4, 1981, and a hearing on the 

motion was set for November 12. The parties stipulated that the 

"cross-petition" would be treated as combined motions for a new 

trial, to alter or amend judgment and to set aside the judgment. 
Hearings were held on November 12 (Thursday) and November 15 

(Sunday), 1981. On November 23, the District Court entered findings of fact and conclusions of law which denied all of 

defendantst motions and ordered that Sun Dial be entitled to 

possession of the property and struck defendants' lis pendens. 

The next day defendants filed their notice of appeal from 

the judgment and were granted a stay pending appeal, upon the 

filing of $150,000 bond. Defendants posted the bond. 

Plaintiff Is issues on appeal can be stated as follows: 

1. Whether the Montana policy against forfeiture prevents 

plaintiff from recovering the property; 

2. Whether the doctrine of waiver operates against 

plaintiff; 

3. Whether the doctrine of estoppel operates against 

plaintiff; 

4. Whether the District Court erred in adopting 

plaintiff Is findings of fact and conclusions of law (of November 

With regard to the first issue, appellants argue that the 

Montana statute for relief from forfeiture has been satisfied. 

Section 28-1-104, MCA, provides: 

"Relief from forfeiture. Whenever by the terms 

of an obliqation a party thereto incurs a forfeiture or-a loss in the nature of a forfeiture 

by reason of his failure to comply with its 

provisions, he may be relieved therefrom upon 

making full compensation to the other party, 

except in case of a grossly negligent, willful, 

or fraudulent breach of duty." 

Appellants also argue that Montana case law regarding forfeiture 

supports the nullification of the settlement agreement and a 

remand for a full trial, citing several cases including Montana 

Williams Double Diamond vs. Royal Village, Inc . ( 1980 ) , Mon t . , 607 P.2d 1120, 37 St.Rep. 421; Parrott v. Heller (1976), 171 

Mont. 212, 557 P.2d 819; and S-wAas- Homes Company v. North 

Si~-burbq~ 

(1914), 50 Mont. 108, 145 P. 2. 
This contention is utterly devoid of merit. How can 

defendants forfeit something they never had? It is undisputed 

in this case that Sun Dial bought the property and thus obtained equitable title. In every case relied on by appellants, 

the forfeiture discussion centered around the buyer's loss of 

payments. Here Sun Dial, not defendants, was the buyer and 

defendants' reliance on the Montana cases is misplaced. See - The 

Default Clause -- in the Installment Land Contract (1981), 42 

M0nt.L.R. 110, 117-25, and Forfeiture - of Payments Under Land 

Purchase Contract - in Montana (1957), 19 M0nt.L.R. 50. 

Appellants fare no better by relying on section 28-1-104, 

MCA, which requires, as a condition precedent to relief, that 

defendants tender full compensation to Sun Dial. It is undisputed here that under the terms of the settlement agreement, 

defendants were to pay to Sun Dial within the year, a sum in 

excess of $1,300,000. Defendants'deposit of $501000 in Towe's 

account is a far cry from that. See Gamble-Skogmo, Inc. v. 

McNair Realty Co. (D.C. Mont. 1951), 98 F.Supp. 440 (full compensation is required for relief from forfeiture). 

Moreover, a forfeiture is an affirmative defense which 

was not affirmatively pleaded in defendants' answer. It does 

not even appear in the llcross-petitionll. Accordingly, we need 

not consider this issue raised for the first time on appeal, 

Marcus Daly Memorial Hospital Corp. v. Borkoski ( 1981 ) , 

Mont. , 624 P.2d 997, 38 St.Rep. 322. 

Appellants next contend that Towe's actions constituted a 

waiver of his rights under the settlement agreement because Towe 

led Roy Jerome to believe an extension had been granted. Appellants then suggest that we require Sun Dial to send an additional notice of default before allowing Sun Dial to proceed 

with the action, citing Surburban Homes and Montana Williams, 

supra. 

At no time during these lengthy proceedings have Gold 

-5- 
Creek or the Jeromes been under any misapprehension as to how 

much was due and owing on October 6, 1981. Indeed, Sun Dial Is 

February 6, 1978, letter to them spells out in detail the obligations of the parties and in the December 31, 1978, notice, the 

February 6 letter was enclosed. We refuse to require such a 

pointless act. 

Appellants next apparently argue that Sun Dial should 

not be allowed to enforce the settlement agreement because of 

an estoppel created by Towe's actions. Appellants cite section 

26-1-601 (3) , MCA, which provides: 

"Complete -- list of conclusive presumptions. The 

following presumptions and no others are deemed 

conclusive : 

"(3) whenever a party has, by his own 

declaration, act, or omission, intentionally and 

deliberately led another to believe a particular 

thing true and to act upon such belief, he cannot in any litigation arising out of such 

declaration, act, or omission be permitted to 

falsify it. . ." 

We have recently stated with regard to estoppel: 

"Six essential elements have been held necessary 

to constitute an equitable estoppel : 

"'(1) there must be conduct, acts, language, or 

silence amounting to a representation or a concealment of material facts; (2) these facts must 

be known to the party estopped at the time of 

his conduct, or at least the circumstances must 

be such that knowledge of them is necessarily 

imputed to him; (3) the truth concerning these 

facts must be unknown to the other party 

claiming the benefit of the estoppel at the time 

it was acted upon by him; (4) the conduct must 

be done with the intention, or at least with the 

expectation, that it will be acted upon by the 

other party, or under the circumstances that it 

is both natural and probable that it will be so 

acted upon; (5) the conduct must be relied upon 

by the other party, and, thus relying, he must 

be led to act upon it, and (6) he must in fact 

act upon it in such a manner as to change his 

position for the worse. "' Sweet v. Colburn 

School Supply (1982), Mont . , 639 P.2d 

521, 524, 39 St.Rep. 168,172-73. 

First of all, estoppel is an affirmative defense that 

must be pleaded. Rule 8(c), M.R.Civ.P. We will not consider the 

issue raised for the first time on appeal. Borkoski, supra. 
However, this defense is mentioned in defendants' "crosspetition". 

The trial court found that there was no evidence supporting a claim of estoppel. We agree. Towe did not represent 

to defendants that the simple forwarding of $50,000 to his 

account was sufficient to extend the agreement and he did not 

intend or expect that the defendantswould act on this purported 

representation. Instead he insisted that a writing be executed 

regarding the extension and this was never done. 

Appellants finally contend that the District Court erred 

in adopting the findings of fact and conclusions of law prepared 

by Sun Dial's attorney. While it is true that we disapnve of 

this practice, Tomaskie v. Tomaskie (1981), Mont. , 625 

P.2d 536, 38 St. Rep. 416, they will be upheld if they are suff iciently comprehensive and supported by the evidence presented, 

Jensen v. Jensen (1981), Mon t . --, 631 P.2d 700, 38 St.Rep. 

1109. Here the court's findings and conclusions meet the above 

test. 

Sun Dial raises other issues in response to appellants1 

brief but si,nce, in our view, appellants1 contentions are 

meritless, we will not consider the additional issues raised by 

Sun Dial. 

We note that Gold Creek and the Jeromes have succeeded in 

accomplishing what they set out to do, i.e. forestalling the 

effect of the judgment to give them more time to find a 

buyer of the property or seek another settlement with plaintiff. 

Defendants have pursued this action through the appeal process 

and by the filing of the lis pendens and the "cross-petition" the 

day af ter the judgment was signed. Obviously with the -- lis pendens of record Sun Dial could not remedy the situation by conveying or selling the real estate. All these defendants1 actions 

were done in the face of the language of the settlement 

agreement, repeated several times therein, that if the payment 
deadline was not met defendants would relinquish possession of 

the land immediately. This agreement was to be the final resolution between the parties. 

We cannot condone such action and abuse of the appeal 

process. Our court dockets are overcrowded as it is. Therefore 

on the day this case is decided, plaintiff shall have judgment 

against defendants in the amount of $500 damages for a frivolous 

appeal pursuant to Rule 32, M.R.App.Civ.P. 

Affirmed . 

Chief Justice