No. 84-470 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

WILLIAM HARLOW HASS, individually 

and on behalf of HASS LAND COMPANY, 

Plaintiff and Appellant, 

HASS LAND COMPANY, a Mont. corp., 

and PAULA ALTHOFF and LAURA JEAN 

KNOTT, individually and as directors of said corporation, 

Defendants and Respondents. ******************* 

HASS LAND COMPANY and PAULA ALTHOFF 

and LAURA JEAN KNOTT, individually 

and in the right of HASS FARMS, INC., 

a Montana corp., 

Cross-Plaintiffs and Respondents, 

-vsHASS FARi?4S, INC., and WILLIAM 

HARLOW HASS, individually and as 

President and Director of Bass 

Farms, Inc., 

Cross-Defendants and Appellants. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Robert W. Holmstrom, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

Tipp, Hoven, Skjelset & Frizzell; Thomas Frizzell, 

Missoula, Montana 

For Respondents: 

Moulton, Bellingham, Longo & Mather; B.E. Lcngo, 

Billinqs, Montana 

- 

Submitted on Briefs: April 25, 1985 

Filed: ii,c~I; 2 1985 

Clerk 
Mr. Justice L.C. Gulbrandson delivered the Opinion of the 

Court. 

William Harlow Hass appeals from an order of the 

District Court of the Thirteenth Judicial District, 

Yellowstone County, Montana, granting the specific 

performance of a settlement agreement between the parties. 

We affirm. 

This appeal involves a long-standing family dispute 

between William Harlow Hass and his two sisters, Paula 

Althoff and Laura Jean Knott, over the control and operation 

of two family farm corporations in Sheridan County, Montana. 

Hass Land Company owns approximately 6,130 acres of farm 

land which was the family farm bequeathed by Margaret Hass in 

the approximate shares of 50 percent to Tdil.liam and 25 

percent each to Paula and Laura. Hass Farms, Inc., is the 

operating arm of the Hass Land Company, and owns the 

machinery and equipment. It was also bequeathed by Margaret 

Hass to her children in approximately the same proportions as 

the Land Company. 

In 1976, William filed suit against his sisters, Paula 

and Laura, and Hass Land Company, alleging stockholder 

oppression and requesting the appointment of a receiver for 

the corporation. The sisters cross-claimed against William 

and Hass Farms, Inc., for an accounting. On the motion of 

William the District Court severed the sisters1 cross-claim, 

resulting in the filing of separate complaints against 

William and Hass Farms, Inc. These complaints were 

consolidated for trial with the Hass Land and William Hass 

suit. 

On July 23, 1982, all of the parties, acting in both 

their persona1 and corporate capacities, entered into an 

"Agreement of Settlement." Among other arrangements settling 

the various lawsuits, the Agreement called for the parties to 
appoint appraisers who were to "determine the entire value of 

the assets of each corporation. I' Further, the agreement 

provided that " [t] he value determined . . . [by the 

appraisers] shall be reduced by corporate debts owed to third 

parties such as banks or the CCC," subject to the 

qualification that I' [o] nly $100,000 of third-party debts is 

to be used to reduce the market value of Hass Farms 

corpora tion. " 

After executing this agreement, the sisters promptly 

appointed their appraiser. William did not, and, in fact 

delayed until May 11, 1983, through an entire planting season 

during which he was in full control of the farm. On that 

date, the sisters filed a petition with the District Court 

requesting that the court enforce the specific performance of 

the settlement contract. William then appointed his 

appraiser and both appraisers were able to agree on the 

requested valuations. The petition did not reach trial until 

April 2, 1984; through yet another planting season. The 

District Court entered its findings, conclusions, and order 

on August 20, 1984; well into the third season after the 

parties had settled their disputes. William was in full 

control of the farm during the whole time, planting, 

harvesting, and selling the crops each year. William then 

appealed the District Court's order to this Court. We note 

that it is now four years since the parties "settled" their 

dispute. 

Appellant raises the following issues on appeal: 

1. That the District Court erroneously substituted its 

judgment for the appraisers in making additions to the market 

value of Hass Land Company and Hass Farms. 

2. That even if the settlement agreement allowed the 

District Court to determine the price to be paid by William 
to his sisters, the court interpreted the agreement contrary 

to the parties' intent, and the law. 

3. That the District Court erred in levying interest 

against William. 

In his first allegation of error, William contends that 

the District Court erred in adding to the appraised value of 

Hass Farms, Inc. the amount of the Commodity Credit 

Corporation (CCC) grain held as loan collateral, and the "115 

account"; thereby increasing the amount he was required under 

the settlement agreement to tender his sisters to purchase 

their interests. The appraisers had previously agreed to the 

valuation of the assets of Hass Farms, Inc., and Hass Land 

Company. William argues that when the appraisers reached 

these figures, they had already incorporated those debts. 

Two separate clauses of the settlement agreement are 

relevant to the CCC grain issue. The first states: 

"The appraisers will determine the value 

- of - the assets of each corporation." 

(Emphasis added.) 

And the second: 

"The value as determined above shall be 

reduced by corporate debts owed to third 

parties sbch as banks or the CCC. . . . 

"Only $100,000 of third party debts is 

to be used to reduce the market val-ue of 

Hass Farms corporation." 

On this point, the District Court found: 

"The court finds that the provision to 

finding market value contained in the 

agreement of settlement is plain and 

unambiguous and all grain owned by Hass 

Farm as of July 23, 1982, is to be 

included in the valuation of the 

corporate assets and further, the 

deduction for debts owed to third 

parties, including the CCC is limited to 

$100,000 . . ." 

In Ryan v. Board of County Commissioners, etc. (Mont. 

1980), 620 P.2d 1203, 37 St.Rep. 1965, we referred to the 
following statutes in interpreting a disputed contract 

provision: 

"Section 28-3-301, MCA, provides: 

"A contract must be so interpreted as to 

give effect to the mutual intention of 

the parties as it existed at the time of 

contracting, so far as the same is 

ascertainable and lawful. 

"Section 28-3-303, MCA, provides: 

"When a contract is reduced to writing, 

the intention of the parties is to be 

ascertained from the writing alone if 

possible, subject, however, to the other 

provisions of this chapter." 

Further, in Wortman v. Griff (Mont. 1982), 651 P.2d 998, 

39 St.Rep. 1916, we held that where the "language is clear 

and unambiguous an its face, it is the duty of the court to 

enforce it as the parties made it." (Citing Ryan, supra.) 

The District Court held that the contract was clear and 

unambiguous and we agree. It specifically provides that the 

assets of each corporation includes "all personal property 

owned and used in the operation of Hass Land for Hass Farms, 

all of its grain, [and] personal equipment . . ." The 

appraisers were, by the terms of the contract, simply 

directed to determine the value of those assets. They were 

not directed to engage in any adjustments for debt. The 

simple language in the contract, that "the value - as 

determined above" necessarily suggests that the value 

referred to is antecedent to the adustment for debt. In the 

clause where the debt adjustment is directed no reference to 

the appraisal is made. The contract simply provided first 

that the appraisers were to reach a value of the assets. 

Then, secondly and independently, that value would be 

increased by corporate debts in excess of $100,000. The 

court, in enforcing the specific performance of this 

agreement did no more than the parties had agreed to do. 
William made a practice over the years of drawing on the 

bank account of Hass Farms, Inc. as though it was his own 

personal bank account. By deposition, Cordell Almond, a CPA 

and accountant for Hass Farms, testified that this account, 

called the "115 account," was a personal checking account of 

William, though drawn on the corporation. William argues 

that his liabilities under this account were released when 

all of the claims were released by the settlement agreement. 

Alternatively, he contends the account, being an asset of the 

corporation, was specifically includ-ed within the appraisers 

calculations and the parties are bound thereby. 

The District Court held: 

"The said account is an asset of the 

corporation and should be included in 

determining the value of the assets of 

said corporation and that in addition 

thereto, accounts owed by Paula Althoff 

and Laura Jean Knott to Hass Land Company 

should be included as an asset of said 

corporation for the purpose of 

determining the value of its assets." 

We affirm the District Court for two reasons. First is 

that the court's order effectuated the parties' contractual 

expectations. William argues that his personal liability 

under the "115 account" was released in the settlement 

agreement. To determine the validity of his contention, we 

must turn to the agreement itself. It directed the 

appraisers, when valuing Hass Farms, Inc. to consider: "all 

of its grain, personalty, equipment and machinery . . . and 

other equipment and personal property - of - all types as 

shown on the books of the corporation. " (Emphasis added. ) 

The District Court deemed this clause "clear and 

unambiguous." Based on evidence on the record that William, 

Paula, and Laura owed money to Hass Farms, Inc., and that 

these debts were "on the books" the court determined that 

they were corporate assets and added them to the amount 

reached by the appraisers. Since the Agreement of Settlement 
is controlling, appellants argument mentioned above is 

irrelevant. 

As to William's argument that the appraiser's 

calculations are binding, we recognize the general rule that: 

" [A]n award made by the appraisers is 

supported by every reasonable intendment 

and presumption, and it should not be 

vacated unless it was made without 

authority, or was the result of fraud or 

mistake, or the misfeasance or 

malfeasance of the appraisers.'' Lee v. 

Providence Washington Insurance Co. 

(1928), 82 Mont. 264, 274, 266 P. 640, 

643. 

In accord, 5 Williston - on Contracts, 5802, p. 825. 

Here it was clear that the appraisers mistakenly forgot 

to include in the asset valuation of each corporation those 

debts that the individual parties owed thereto. Along with 

neglecting to consider William's debts to Hass Farms, Inc., 

the appraisers overlooked those owed by Paula. Althoff and 

Laura Knott. This type of mistake, affecting both parties, 

negates any inference of partiality or bias. It is this type 

of mistake, where the indica of impartiality is strong, that 

the District Court may correct when examining an appraiser's 

report. We affirm on this point. 

William next contends that even if the District Court 

was empowered under the contract to make deductions from the 

appraisal value that it erred in determining that the CCC 

loans were corporate debt. 

The District Court found that the CCC loans were 

corporate debt. At issue is grain used as collateral for a 

non-recourse loan program administered by the CCC. Under 

this program, a farmer borrows from the government a sum 

calculated to reflect the value of the crop and puts up the 

crop itself as collateral. If the market price of the grain 

turns out higher than the loan rate, the Farmer can sell the 

crop, satisfy the loan, and keep the difference. If the 
market price does not go above the loan rate, the farmer can 

activate a "non-recourse clause" in the loan agreement and 

turn over the crop to satisfy his obligation. 

At trial William presented testimony through his 

accountant that Hass Farms, Inc., was a cash basis entity, 

and treated the loans as sales. Paula Althoff and Laura 

Knott pr~sented evidence to the effect that the CCC payments 

were actual-ly a loan and not a sale. Further, they argued 

the contract specifically provides that CCC payments were 

corporate debt. The District Court concluded that these 

payments were a loan, thus debt, and deducted their amount 

from the corporate assets pursuant to the settlement 

agreement. 

In Lauterjung v. Johnson (1977), 175 Mont. 74, 572 P.2d 

511, we stated: 

"'When reviewing findings of fact and 

conclusions of law of a district court, 

sitting without a jury, this Court has 

repeatedly held such findings and 

conclusions will not be disturbed if 

supported by substantial evidence and by 

the law . . . . When reviewing evidence 

it will be viewed in the light most 

favorable to the prevailing party in the 

district court, and the credibility of 

witnesses and the weight assigned to 

their testimony is for the determination 

of the ~istrict Court in a nonjury 

trial. (Citations omitted.)'" Citing 

Luppold v. Lewis (1977), 172 Mont. 280, 

284, 563 P.2d 538, 540 

Given our deference to the District Court's findings and 

conclusions we do not find error. There is substantial 

credible evidence on the record to support the District 

Court's conclusion that Hass Farms, Inc. treated the 

Commodity Credit Corporation's loans as corporate debt. The 

CCC loans have few of the aspects of a true sale. There is 

no transfer of title. Under the loan program the farmer has 

the continuing power to dispose of the grain should the price 

go higher or otherwise desires to do so. Actual title or 
ownership (possession with the intent to exclude) of the 

grain is not specifically transferred until the farmer either 

activates the non-recourse clause or pays his loan. The 

government pays the farmer for storing the grain during the 

term of the loan, but aside from that has no other power to 

use the same. The fact, frequently mentioned by William, 

that title to the grain has gone to the government through 

activation of the non-recourse clause for the past few years 

is irrelevant. There is substantial credible evidence in the 

record supporting the District Court's determination and we 

affirm the same. 

Finally, William argues that the District Court erred in 

awarding interest to the respondents. On this point, the 

court held: 

"That for many years William Harlow 

Hass . . . has continued to farm all of 

the Hass Land Company's land since the 

date of the execution of the agreement of 

settlement; that any rental paid by Hass 

Farms, Inc. since the appraisal 

date, . . . was not taken into account in 

the determination of market 

value . . . [and] that if said agreement 

is specifically enforced and the court 

does hereby conclude that it should be 

specifically enforced, Hass Farms, Inc. 

and William Harlow Hass will have gained 

unfair advantage by the delay in the 

closing of this transaction in that they 

have had the use of the land and not had 

to pay any rent thereupon; the court 

therefore concludes that it would be fair 

and equitable for interest to be paid by 

William Harlow Hass and Hass Land upon 

the amount stated from September 5, 1982, 

the date of the anticipated closing." 

The general rule stated in 81A Corpus Juris Secundum, 

Specific Performance, S198, p. 164 is: 

"Where there is delay in the completion 

of a contract for the sale or conveyance 

of property, an adjustment of the rights 

of the parties may be made by providing 

for an accountinq as to the rents and 

profits, or for the payment of interest 

on the purchase price." Accord, 71 

Am.Jur.2d, Specific Performance, $219, 

pp. 282-283. 
This Court, in Schultz and Wood v. Campbell (1966), 147 Mont. 

439, 413 P.2d 879, "for future specific performance 

cases, . . . reserve[d] the right to allow interest as an 

offset against profits or crops." In specifically enforcing 

this contract, the court acted under the general equity 

umbrella and had the power to adjust the parties obligations 

to put them in nearly as good a position as if the contract 

had been performed when required and as required. In this 

case William's delay of now up to four years of his 

performance under the settlement agreement clearly deprived 

Paula Althoff and Laura Knott of the benefit of those years 

interest on the rent to be paid by William. Further, he had 

the use of a substantial piece of property for that period. 

The District Court acted fully within its powers in awarding 

interest. 

The order of District Court is affirmed. 

4, / 

ief Justice