No. 12178 INTHE SUPREME COURT OF THE STATE OF MONTANA 1972

ROBERT W. MYERS and GLORIA JEAN MYERS, husband and wife, Plaintiffs and Appellants,

OTTO BENDEWALD and EVELYN BENDEWALD

## , husband and wife, Defendants and Respondents.

Appeal from: District Court of the SixteenthJudicialDistrict, HonorableAlfred B. Coate, Judgepresiding. Counsel of Rxord: ForAppellants: Tipp, Hoven and Brault, Missoula, Montana. Raymond W. Brault argued, Missoula, Montana. William

### T. Kelly argued, Billings, Montana. ForRespondent: William F. Meisburger argued, CountyAttorney,

Forsyth, Montana.

Submitted: September 27, 1972 Decided:

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# -197'2Mr. JusticeFrank I. Haswell delivered the Opinion of the Court. This is an appeal from a judgment and an order denying

a new trial in Rosebud County. Thedistrict court, the Hon. Alfred B. Coate,district judge, sittingwithout a jury, entered findingsof fact, conclusions of law, and judgment for the defendants in an action brought by plaintiffs for conveyance of a disputed one-half interest in lands situated near Forsyth,Montana. The courtheld that the statute of fraudsbarred plaintiffs' action and rendered judgment for defendants. Plaintiffsappeal. In 1967,plaintiff, Robert Myers,desired to purchase land near Forsyth, Montana, suitable for operating a bowling alley. In researching the records in the Rosebud County courthouse,Myers located two separate tracts of land designated the "Harristract" and the "Caskey tract". Myers purchased the Harris tract in May, 1967,and continued to inquire about the Caskey tract which was involved inprobate proceedings. Later in the

summer of 1967,the Caskey tract became available but Myers was without funds to purchase it. At that time,Myers was working in the service station of the defendant,Otto Bendewald,and Myers told Bendewald about the Caskey tract and that the attorney for the 

### of the tract said the Caskey tractmight be valuable for speculationif certain interstate highway construction materialized. The circumstances and conditionsunder which Myers imparted his knowledgeof the Caskey tract to Bendewald remain controverted but in July 1967 Bendewald purchased the Caskey tract taking title in Bendewald and his wife's name. At the timeMyers discussed the Caskey tractwith Bendewald therewas an oraldiscussion of a proposed partnership between Myers and Bendewald involvingMyers' proposed construction of a bowling alley and potentially an undertaking to include a possible trailerpark. Myers, later at trial, testified that intheir "gentlemen'sagreement",Bendewald purchased the Caskey tract subject to Myers' right to repurchase a one-half interest at a later date. However, Bendewald denied that the purchase of the Caskey tractwas involved in the proposed partnership events which later developed. Subsequently,pursuant to the proposed future partnership between Myers and ~endewald, Myers sold Bendewald a one-half interest in the Harris tract inNovember 1967. InMay, 1968,Myers and Bendewald executed written articles of partnership to do business as "EvergreenLanes" and to operate the bowling alley which was eventually constructed on the Harris tract. In December 1969, itwas ascertained that the highway department would, in fact,use some of the Caskey land for highway constructionand Myers contacted Bendewald and together they drove to the land to observe the highway stakes. Myers then offered to buy a one-half interest in the Caskey tract and pressed Bendewald for a response. Bendewald asserted then,and again at trial, that he conditioned any sale upon the status of the partnershipwhich was then in existence and operating. Bendewald did, however, give Myers a dollar figure required to reimburse Bendewald fully for one-half the purchase price, taxes, interest,and abstract costs. With this figure Myers had a deed prepared conveying a one-half interest in the Caskey tract from Bendewald and his wife to Myers and his wife. Later Myers attached a check to the unsigned deed and left the deed and check with Bendewald's attorney. Bendewald's attorney informed him that the deed and check were in his office but Bendewald never picked them up or
ever saw them. Shortly thereafter, while the deed and check were being held by Bendewald's attorney,Bendewald on January 

### 4, 1970,examined the books of the partnership and discovered that thepartnership was ailing financially. Bendewald then told Myers he would not sell in view of the financialcondition of the partnership and refused to discuss the matter further. In due time the partnership between Myers and Bendewald was dissolved, whereupon Myers then brought this suit seeking specific performance of an alleged contract for the sale of a one-half interest in the Caskey tract. InMyers' complaint,he asserted two theories: (1)Bendewald was trustee for the benefit of Myers; and (2) Bendewald was unjustly enriched at the expense of Myers. Bendewald, in his answer, asserted the affirmative defense of the statute of frauds. The court, sitting without a jury, entered findingsof fact and conclusionsof law applying the statute of frauds and entered judgment in favor of the defendants, Bendewald and his wife. Following a denial of plaintiffs' motion for a new trial,plaintiffs appeal from the judgment and the denial of theirmotion for 

### a new trial. Appellants' issues on appeal substantially encompass the questions of whether the district court erred in failing to hold that the respondents were trustees for the benefit of the appellants and that the respondents were unjustly enriched at the expense of the appellants; whether the district court erred in its conclusion of law that the respondentswere the sole owners of the Caskey land and that the statute of frauds was applicable; whether thedistrict court erred in failing to accept the appellants'proposed findingsof fact and conclusionsof law; and whether the district court erred in failing to grant appellants' consolidated motion for new trial. In substance these issuesare confined to the central issue of what was the nature of the agreement, if any,between the parties Myers and Bendewald, the operative facts of thatagreement,and the law applicable in the resolution of the action brought before the district court. Appellantshaveargued the existence of an oral "gentlemen's agreement" between the parties providing for a purchase of a one-half interest in the Caskey land pursuant to a larger scheme involving a partnership between Myers and Bendewald. Alternarively appellants argue that there was a valid contract entered into in December 1969,whichwas fully executed on Myerstpart, consisting of memorandums in writing in the form of the check given in payment and the deed of conveyancewhich was drafted although never signed by Bendewald. Thus appellantsargue that the statute of frauds does not apply following the holding of Besse v. McHenry, 89Mont. 520, 527, 300 P. 199, stating the exception to the statute of frauds in the instance where there is completeperformance of an oral contractby one of the parties. Under the two theories of appellants' argument there are two factswhich remain as a common problem underlying any theory of recovery in this case; specifically, the absence of any written agreement regarding the terms of any subsequent conveyance between Myers and Bendewald. In the first instanceof appellantstargument, at the time of Bendewaldtspurchase of the Caskey tract in July 1967, therewas no writing between Myers and Bendewald that pertained to either the Caskey tract or to any proposed partnership which was subsequently created in May 1968. Finding no written, enforceable agreement between the parties, the district court properly concluded that the statute of frauds was applicable in the absence of a written agreement. In the second instance of appellants' argument, the tender of payment and draft of a deed are offered as proof of a memorandum and executed performance on the part of Myers which constitutes an exception to the statute of frauds. Standing alone, the actionsof Myers are unsupported by the conflicting testimony of the parties regardingboth the existence of any oral agreement and the terms of such agreement,if any, The lack of evidence to support the claimed oral agreement and its claimed performance by appellants relates again to the inadequacy of an oral agreement for conveyance of land,the inescapable difficulty of determining the nature of such oral agreementsand any claimed performance thereof. The problems involved in enforcing oral agreements for the conveyance of land as attempted in this case

are nothingmore than those constituting the basic purpose of the statute of frauds. Without reference to the legislative history or the legion of cases giving rise to the statute of frauds, section 93-1401-7, R.C.M. 1947,expressly stateswhich contractsmust be in writing: "Agreementnot inwriting when invalid. In the following cases the agreement is invalid, unless the same or somenote ormemorandum thereof be inwriting, and subscribed by the party charged, or by his agent; evidence, thereof,of the agreement cannotbe received without the writing or secondary evidence of its contents:

"4. An agreement for the leasing for 

### a longer period than one year, or for the sale of real property, or of an interest therein; and such agreement, ifmade by an agent of the party sought to be charged, is invalid, unless the authority of the agent be inwriting, subscribed by the party sought to be charged. 

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## * *" Therebeing no evidence present in the case other than conflicting oral statements relating to an oral agreementbetween Myers and Bendewald,erstwhile business partners, for the conveyance of a one-half interest in the Caskey tract, the district courtproperly ruled that the statute of fraudsbarred recovery
onplaintiffs' claim. We agree. Accordingly, the judgment of the district court 

### is affirmed.Associate . Justice