No. 86-156 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

LOIS A. CAMPBELL, 

Plaintiff and Appellant, 

MYRON CAMPBELL, CAROL CAMPBELL, 

and STANLEY J. CAMPBELL, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Charles Luedke, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Cate Law Firm; Jerome J. Cate, Billings, Montana 

For Respondents: 

Jon A. Oldenburg, Lewistown, Montana 

H. Elwood. English, Billings, Montana 

Filed: 

Submitted on Briefs: July 10, 1986 

Decided: September 4, 1986 

Clerk 
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of 

the Court. 

Plaintiff Lois Campbell appeals the January 30, 1986, 

order of the Thirteenth Judicial District Court granting 

summary judgment in favor of defendants. We affirm. 

At all times relevant to this case, Stanley and Lois 

Campbell were husband and wife. In 1972, Stanley and Lois 

had a home built on property located at 1716 Westwood Drive 

in Billings, Montana. The purchase price of the home was 

$34,000. To finance the purchase, $14,000 was borrowed from 

Hazel Rustuen, Lois's grandmother, who took a mortgage 

against the property in that amount. 

Stanley and Lois experienced financial difficulties in 

the ensuing years. The Internal Revenue Service (IRS) filed 

a lien against the property for $18,098.88 for non-payment of 

taxes. The Montana Department of Revenue filed a lien 

against the property for $919.17, as did the Montana 

Employment Security Division in the amount of $1,494.05. In 

addition, Stanley and Lois owed property taxes in the amount 

of $5,739.06, and $673.74 for Special District Improvement 

assessments. 

The bills went unpaid, and on November 6, 1978, the IRS 

filed a notice of seizure and noticed the Campbell's property 

for sale. A few days prior to the sale date, Myron Campbell, 

Stanley's brother, and other members of Stanley's family 

loaned $20,000 to Stanley and Lois for the purpose of 

satisfying the IRS lien. On the same date, Stanley and Lois 

signed a second mortgage and note payable to Myron in the 

amount of $20,000. These documents were never delivered nor 

recorded. 
Stanley and Lois continued to have financial problems. 

They failed to clear the liens against their property, and 

did not make any mortgage payments to Lois' grandmother, who 

filed suit to foreclose on her mortgage. Stanley and Lois 

were unable to refinance, so they decided to sell their 

property to Myron and Carol Campbell. The buy-sell agreement 

was executed June 26, 1979, in the amount of $34,500. The 

parties agreed that Stanley and Lois would remain in the home 

but would be required to pay $475 monthly rental. The 

parties further agreed that Stanley and Lois would be 

permitted to buy back the home for $34,500 if they were ever 

in a financial position to do so. 

Stanley and Lois never made any rental payments, and 

began to have marital difficulties. Lois filed a dissolution 

action, and Stanley was removed from the home by court order 

in May of 1983. Thereafter, Lois filed suit against Stanley, 

Myron and Carol on February 8, 1984. Lois' complaint alleged 

that the sale of the home was made by the parties with the 

understanding that it would be immediately reconveyed to 

Stanley and Lois subject to the amount of financing obtained 

by Myron and Carol. Lois claimed that Myron and Carol had 

received the property for far less than its actual value and 

prayed that the conveyance be set aside as fraudulent. 

Myron and Carol also filed suit on February 8, 1984, to 

have Lois evicted from the home for failure to pay rent, to 

quiet title, and to collect damages. The two actions were 

consolidated. On February 6, 1985, the district judge 

granted summary judgment in favor of Myron and Carol on the 

issue of title and right to possession. Lois' complaint was 

dismissed with prejudice. Lois appeals and raises the 
following issue: Whether the District Court erred in 

granting summary judgment? 

Lois contends the District Court overlooked material 

issues of fact in granting summary judgment, including the 

following: that the sale of the home was made for the 

purpose of paying off the $20,000 loan to the Campbell family 

and the balance due on the mortgage held by Lois' 

grandmother; that the conveyance of the home to Myron and 

Carol was a method to protect it from creditors and that the 

agreement provided for reconveyance of the home to Stanley 

and Lois; that there was an agreement between Stanley and 

Myron whereby Myron would make the house payments in exchange 

for Stanley's interest in the family farm. 

The depositions of the parties show Stanley and Lois 

sold their home because they were unable to refinance and 

wanted to avoid foreclosure. The buyer's closing statement 

reveals that Stanley and Lois had unpaid obligations of 

$28,881.02 on the date of sale, irrespective of the $20,000 

owed to the Campbell family. Lois' claim that the home was 

transferred in exchange for Stanley's interest in the family 

farm has no support in the record. 

Lois contends the transaction was a mortgage and not a 

sale under the case law of Montana. In Murray v. Butte 

Monitor Tunnel Mining Company (1910), 41 Mont. 449, 110 P. 

497, this Court listed the four factors to be considered in 

determining whether a transaction was a mortgage and not a 

sale: 

1. The transaction in its inception had for its 

purpose a loan, not a sale. 

2. The grantor was in financial distress at the 

time of the transaction. 

3. The price which the grantee claims he paid for 

the property appears to be grossly inadequate. 
4. According to grantee's own theory, the 

transaction did not amount to an absolute sale, but 

to a conditional sale; that is, a sale with an 

option to grantor to repurchase. 

Contrary to Lois' assertions, the value of the home was 

estimated by Lomas and Nettleton Company to be $58,900 on the 

date of closing. Although the purchase price was $34,500, 

Stanley and Lois had already received a $20,000 loan from 

Myron and other family members. Further, Myron testified 

that $34,500 was the maximum amount that an agency would lend 

for the purchase of the property. Thus, the price paid for 

the home was not grossly inadequate. Clearly, Myron and 

Carol were trying to protect their investment by purchasing 

the home rather than allow foreclosure. 

Myron and Carol admit that Stanley and Lois had an 

option to repurchase under their agreement. The evidence 

shows Stanley and Lois were not financially able to do so. 

No rent was ever paid to Myron and Carol, who have been 

making payments on the house since 1979. Whether the option 

to repurchase still exists was not determined by the District 

Court. There is substantial evidence in the record that the 

June 26, 1979, transaction was a sale and not a mortgage. 

Lois contends she was fraudulently induced to 

participate in the transaction with the false promise that 

the home would be deeded back to her. This contention is not 

supported by the facts. Stanley and Lois were in deep 

financial trouble. Myron and Carol were not willing to lend 

them any more money. Under such circumstances, Myron and 

Carol certainly would not assume the responsibility of making 

the payments on the home while surrendering the title to 

Stanley and Lois. Section 28-2-404, MCA, states: "Fraud is 

either actual. or constructive. Actual fraud is always a 
question of fact." This statute does not preclude summary 

judgment where there is no evidence supporting a claim of 

fraud. Van Ettinger v. Pappin (1978), 180 Mont. 1, 588 P.2d 

988. Under Rule 56 (c) , Mont .R.Civ. P. summary judgment was 

appropriate in this case. 

The District Court is affirmed. 

We concur: / / 

Justices