No. 14449 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1979 

KENNETH G. NEILS and 

DOROTHY D. NEILS, 

Plaintiffs and Appellants, 

RUSSELL K. DEIST, 

Defendant and Respondent. 

Appeal from: District Court of the Eleventh Judicial District, 

Honorable Robert M. Holter, Judge presiding. 

Counsel of Record: 

For Appellants: 

Hash, Jellison, O'Brien and Bartlett, Kalispell, 

Montana 

James C. Bartlett argued, Kalispell, Montana 

For Respondent: 

H. James Oleson argued, Kalispell, Montana 

Submitted: January 31, 1979 

Decided: 7 - 

Filed: bMft 7- 
Mr. Chief Justice Frank I. Haswell delivered the Opinion of the 

Court. 

Plaintiffs appeal from a judgment in favor of defendant 

in an action to collect the balance of an alleged debt. The 

case was tried in the District Court of Flathead County without 

a jury. The District Court held plaintiffs' claim barred by 

the five year statute of limitations. 

Plaintiffs Ken and Dorothy Neils and defendant Russell 

Deist had been friends for many years, both socially and through 

various business transactions. On April 20, 1970, plaintiffs 

executed a warranty deed conveying a tract of land to defendant. 

The deed did not specify the purchase price of the land, but 

only stated "for value received". On June 26 defendant gave plaintiffs a personal check for $15,000 and accepted delivery of the 

deed. On July 2 the deed was recorded. The only written instruments involved in the transaction were the deed and check. 

Seven years later, on April 18, 1977, plaintiffs filed 

a complaint alleging an oral agreement between the parties that 

the $15,000 was a down payment only and that $10,000 was still 

owing. The complaint further alleged defendant's acknowledgement 

of the $10,000 remaining indebtedness to plaintiffs on numerous 

occasions in the intervening years; that it was still due; but 

that defendant refused to pay. Defendant by answer specifically 

denied any oral agreement for consideration above the $15,000 

already paid, and raised as affirmative defenses the statute of 

limitations and the statute of frauds. Defendant subsequently 

moved for summary judgment on those grounds, which motion was denied. 

On March 3, 1978 trial was held before the court without 

a jury. Plaintiffs introduced evidence that the agreed selling 

price of the property was $25,000, but that they had delivered the 

deed to defendant upon receipt of his $15,000 check because defendant requested that he be given clear title and the parties had 

done business in similar informal fashion over the years with no 
problems. The 1970 tax return of plaintiff Ken Neils reflected 

that he had paid a capital gains tax on a $25,000 sale price. 

Defendant's 1972 income tax return indicated a $25,000 cost basis 

for the property when resold. 

Defendant's testimony was the original agreed price was 

$15,000. Defendant did admit to some confusion, however, in 

that in 1975 when plaintiffs first began making demands on him 

for payment, he thought they were claiming he had paid nothing 

at all. He conceded that he was not positive whether he had 

or not, and searched through his old financial records until he 

found his cancelled $15,000 check. Thereafter, he was adamant 

that he owed plaintiffs nothing. He explained the reporting of 

$25,000 as his cost basis in 1972 when he sold the property as 

having' been reached by capitalization of survey costs, delinquent 

taxes he had paid, purchase of a water right, and interest. He 

contended that if the original purchase price had been $25,000, 

then his cost basis in 1972 would have been much higher by the 

addition of those capitalized items. 

Following trial, findings of fact, conclusions of law and 

judgment were entered. The District Court found that the original 

agreed price was $25,000, but ruled in favor of defendant on the 

grounds that the action was barred by section 93-2604(1), R.C.M. 

1947, now section 27-2-202(2) MCA, the five year statute of limitations applicable to actions upon a contract not founded on an 

instrument in writing. Defendant subsequently moved to amend the 

findings of fact to show that the original agreed price was $15,000, 

and plaintiffs moved for a new trial. Both motions were denied. 

This appeal followed. 

Plaintiffs and defendant both filed notice of appeal; 

plaintiffs from the judgment as a whole, and defendant from that 

portion concluding that the agreed price was $25,000 rather than 

$15,000. After initiation of the appeal, Russell Deist died and 
Joan Deist, his surviving wife and personal representative of 

his estate, succeeded him as party defendant. 

On appeal, plaintiffs contend that the District Court 

erred in holding that their cause of action was barred by the 

five year statute of limitations. They argue that a deed is an 

instrument in writing for the purposes of invoking the 8 year 

statute of limitations applicable to written contracts. Section 

93-2603, R.C.M. 1947, now section 27-2-202(1) MCA. They further 

argue that the actual consideration for a deed may always be 

shown to be greater, less than, or different from, that recited 

in the deed. Their position is that the District Court correctly 

found the original agreed price to be $25,000 and erred only in 

applying the statute of limitations. They seek reversal and entry 

of judgment in their favor for the sum of $10,000 with interest 

from the date of sale. 

Defendant agrees that a deed is an instrument in writing 

for purposes of determining the applicable statute of limitations. 

It is his contention, however, that the District Court erroneously 

admitted the parol evidence of the alleged higher purchase price, 

so that even though the wrong statute of limitations was used the 

ruling in favor of defendant was nonetheless correct. 

The determinative issues can be framed as follows: 

I. What is the applicable statute of limitations? 

11. Is parol evidence admissible to prove the actual 

consideration? 

The question of whether a deed constitutes a contract 

founded upon a written instrument within the meaning sf the 8 

year statute of limitations has not been specifically settled 

in Montana. In general, deeds are seen as contracts in writing 

to which the longer statute of limitations applies. 

"It is established that the acceptance of a deed 

by the grantee named therein makes it a written 

contract, and the obligations created by the deed 
are therefore evidenced by a writing and are 

not governed by the limitation respecting verbal 

contracts." 51 Am Jur 2d Limitation of Actions 

597. 

A summary of cases so holding appears in Annot. 3 ALR2d 809 526. 

We recently recognized this rule in dictum, S-W Co. v. John Wight, 

Inc. (1978), Mont . , 587 P.2d 348, 357, 35 St.Rep. 1674, 

1687, and we adopt it as the law in Montana. 

On the parol evidence question both the law of contracts 

generally and the law relating specifically to deeds allow parol 

evidence on the issue of consideration when the recital in the 

instrument is, as here, merely a receipt ("for value received"). 

"In a case in which the consideration for a written 

contract is mentioned merely by way of recital or 

as a receipt, the parol evidence rule does not preclude the admission of extrinsic evidence to show 

the true consideration . . ." 17 Am Jur 2d Contracts 

590; to the same effect, 30 Am Jur 2d Evidence SS 

1056 and 1057. 

"The tendency of modern times has been to regard the 

consideration clause in a deed merely in the light 

of a receipt and to allow parol evidence to explain 

the consideration for almost every purpose except 

to allow the grantor to avoid the deed where no fraud 

or mistake is shown." 23 Am Jur 2d Deeds S71. 

"As a general rule, and in line with the modern tendency . . . parol or extrinsic evidence . . . is 

admissible to show the actual consideration for the 

conveyance . . ." 23 Am Jur 2d Deeds 573. 

Where a deed is the only instrument involved in a controversy, 

the stated consideration ("one dollar and other considerations1') 

can be explained by oral testimony. Warner v. Johns (1949), 122 

Mont, 283, 201 P.2d 986. 

Accordingly, we hold that plaintiffs' claim is not barred 

by the 5 year statute of limitations and that they are entitled to 

a judgment for the balance of the indebtedness. Since the evidence on the issue of the purchase price was conflicting and the 

trial judge chose to believe plaintiffs, defendant has no grounds 

for challenging the finding of fact that the agreed price was 

$25,000 rather than $15,000. 
"The standard of review in a nonjury case is simply 

to determine if there is substantial evidence to 

support the findings of the trial court. This 

Court will not reverse such findings of fact unless 

there is a clear preponderance of evidence against 

the findings." Hayden v. Snowden (1978). Mont . , 576 P.2d 1115, 1117, 35 St.Rep. 367,369. 

"The credibility and weight given to the witness, 

especially where the evidence is conflicting, is 

a matter for the district court's determination 

in a nonjury case." Olson v. Carter (1977), 

Mont . , 572 P.2d 1238, 1239, 34 St.Rep. 1539, 

1541, citing Miller v. Fox (1977), Mont . I 

571 P.2d 804, 34 St.Rep. 1367. 

Plaintiffs have asked us to assess interest on any judgment in their favor from April 20, 1970, the date of the sale. 

This we decline to do. During oral argument it was established 

that there had been no agreement whatever between the parties 

as to whether interest would accrue on the obligation if it were 

not promptly paid. The issue of interest did not arise during 

the trial of this case and the District Court made no findings 

of fact in that regard. No interest was demanded or paid on the 

first $15,000, although the deed was executed on April 20, 1970 

and the payment was not made until June 26, 1970. Because the 

record is silent on this matter, we hold that interest shall be 

assessed from a reasonable time after demand was made on defendant 

for payment of the outstanding $10,000, to be determined by the 

District Court on remand. 

The judgment of the District Court in favor defendant 

is reversed and the cause remanded with instructions to enter 

judgment for plaintiffs in the sum of $10,000, together with 

interest as may be determined in accordance with this opinion. 

Costs to plaintiffs. We decline to award attorney fees for trial 

or upon appeal. 

Chief Justice