No. 84-433 

IN THE SUPREME COURT OF THE STATE OF P4ONTANA 

MICHAEL J. SCHEITLIN, Personal 

Representative of the Estate of 

Edward E. Scheitlin, Deceased, 

Plaintiff and Respondent, 

R & D MINERALS, a Montana 

corporation, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Fifth Judicial District, 

In and for the County of Madison, 

The Honorable Frank Davis, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Lino A. Marsillo, Missoula, Montana 

For Respondent: 

Leaphart Law Firm, Helena, Montana 

Jardine, McCarthy & Grauman, Whitehall, Montana 

Submitted on Briefs: February 28, 1985 

Decided: July 2, 1985 

Filed: du!. 2 '985 

-- Clerk 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

This is an appeal from an Order of the District Court, 

Fifth Judicial District of the State of Montana, Madison 

County. On November 15, 1978, Edward E. and Vaeda G. 

Scheitlin entered into a contract to sell certain mining 

properties and certain personal property to R & D Minerals. 

R & D was given immediate possession of the property and the 

right to begin mining. It was obligated to make monthly 

installment payments, the last one due on December 31, 2000. 

On August 16, 1983, Michael Scheitlin, as personal 

representative of the Estate of Edward and Vaeda Scheitlin, 

filed a complaint in Madison County District Court which 

asked that R & D Minerals be declared in default on the 

contract. During the course of the ensuing litigation R & D 

Minerals filed for bankruptcy. On April 13, 1984, the United 

States Bankruptcy Court for the District of Montana remanded 

the case to the Montana State District Court, Madison County, 

for the determination of the following matters concerning the 

above-mentioned contract between R & D Minerals and the 

Scheitlin estate: 

1. The current status (terms and 

conditions) of any agreements between 

R & D Minerals and the Scheitlin estate; 

-. 3 The rights and liabilities of the 

parties under the current contract or 

agreement ; 

3. When the sellers are legally 

obligated to provide buyers with clear 

title; 

4. The status of sellers' title; 

5. The amounts, if any, due to the 

sellers under the current contract; and 

6. Any other issues stipulated to by 

R & D Mint~rals and the Scheitlin Estate. 
After an evidentiary hearing, and pursuant to the order 

of the Bankruptcy Court, the District Court on May 31, 1984, 

issued an order containing the following findings: 

"1. The only contract in existence 

between the parties is the Mining 

Property Sale Agreement of November 15, 

1978, as amended on February 25, 1980, 

and May 8, 1980; 

"2. R & D is in default of the contract 

obligations by virtue of its failing to 

make the required payments; 

"3. The amount owing Scheitlin may be 

calculated from an examination of the 

contract and by the records of the 

designated escrow agent; 

"4. The rights and liabilities of the 

parties to the contract are limited to 

the specific terms and conditions of that 

contract and none other. 

"5. Scheitlin's obligation to provide 

marketable title is now moot, but that if 

the contract were in good standing, 

Scheitlin was obligated to provide 

marketable title at any time prior to the 

R & D's making the final payment; 

"6. The status of R & D's title to the 

properties is moot, given its default; 

"7. There was no novation of the 

original contract, there having been no 

executed agreement between the parties." 

R & D Minerals appeals from these findings of the trial 

court and raises the fo11-owing issue for review: Is the 

purchaser of mineral claims, upon notification of serious 

title defects, justified in ceasing installment payments 

after the passing of a reasonable period in which the vendor 

took no meaningful action to correct said defects? 

The rule in Montana is that a seller under an 

installment sales contract does not have to produce 

marketable title until the date set for final payment and 

tender of the deed. Silfvast v. Asplund (1933), 93 Mont. 

584, 592, 20 P.2d 631, 636. R & D does not dispute that 
this is the rule in Montana but argues that there are 

exceptions applicable to this case. 

First, R & D contends that the contract "expressly 

contemplates that the vendor was to produce marketable title 

well in advance of the closing date." The contract provides 

the following under the heading, Marketability - of Title 

to Real Pro~ertv: 

"Prior to October 15, 1979, the sellers 

will cause to be furnished to the 

purchaser abstracts of title for such 

mineral claims as are the property of the 

sellers, and will permit the purchaser 

reasonable time, not to exceed sixty (60) 

days, to have such abstracts examined by 

an attorney of its own choice. Should 

such examination disclose the title to 

such properties to be unmarketable, then 

the sellers shall take such steps as may 

be necessary to render the same 

marketable, including a quiet title 

action, all at sellers' own expense." 

The contract further provides for the setting up of an escrow 

account, requiring the escrow to "deliver such instruments, 

documents and papers to the purchaser at the time of final 

payment hereunder." We find that neither of these provisions 

is inconsistent with the rule in Silfvast requiring that 

marketable title be produced no earlier than the time of 

final payment. The contract provides that sellers, upon 

notification of discrepancies in title, " . . . will 

immediately take any necessary steps to bring such items into 

conformity with their warranty." However, the contract does 

not contemplate that purchasers can withhold payments in 

order to coerce the sellers into correcting title. Rather, a 

specific remedy is provided: 

"Upon discovery of a breach of sellers' 

warranties concerning ownership or lien 

obligations, or sellers ' fail-ure to keep 

current any underlying obl igations not 

assumed by purchaser and affecting the 

real or personal property, purchaser may, 
at its option, correct any deficiency by 

paying any outstanding amount due, lien 

or encumbrance, or by initiating legal 

proceedings to clear any defects in 

title. Sellers agree to cooperate fully 

with purchaser in correcting any such 

deficiency and agree that any legal 

proceeding may be brought in their names. 

The costs, including attorneys' fees and 

court costs, incurred by purchaser in 

applying any amounts due, obtaining the 

release of any liens or otherwise 

correcting any defects of title shall be 

deducted from the purchase price called 

for hereunder and may be offset against 

any payments due sellers." 

Even assuming that there were defects in title, R & D did not 

invoke the remedy provided by contract. Consequently, by 

terminating payments R & D was in breach of contract and 

properly held in default by the District Court. 

Second, R & D argues that even if the contract does not 

contemplate that marketable title be provided prior to the 

closing date, the purchaser may demand marketable title if 

there are defects in the seller's title that are incurable. 

In other words, if it is apparent that the seller cannot 

acquire marketable title by closing then the purchaser is 

justified in halting payments on the contract. By making 

this argument R & D assumes that there were defects in the 

Scheitlin's title that could not be cured. However, there is 

nothing in either the record on appeal or the District Court 

transcript which supports this assumption. Furthermore, the 

contract provides for the possibility of an incurable defect 

as follows: 

"If any defects of title cannot be 

corrected to conform to the sellers' 

warranties, the parties agree to 

renegotiate the purchase price to reflect 

the difference in value between what was 

bargained for by the purchaser and what 

sellers actually delivered. Failing 

agreement in this regard the parties 

agree to submit that issue for 

determination by the District Court of 
the Fourth Judicial District of the State 

of Montana in and for the County of 

Missoula.'' 

R & D's argument that incurable defects in the seller's title 

justifies withholding payments on the contract must fail 

since, even if there were evidence of incurable defect, there 

has been no resort to the remedy provided by contract. 

R & D further argues that the Scheitlins are guilty of 

fraud and misrepresentation for selling property with 

incurable defects in the title and that R & D was within its 

rights in withholding payments. We note: 1. The record does 

not support that there are incurable defects in title. 2. 

Rule 8(c), M.R.Civ.P. states that fraud is an affirmative 

defense that must be pleaded in the answer. R & D's answer 

contains no pleadings concerning fraud and/or 

misrepresentation. 3. The transcript of the May 30, 1984 

hearing before the State District Court contains no 

allegations of fraud or misrepresentation. 4. This is the 

first time that R & D Minerals has raised the issue of fraud 

and misrepresentation in this litigation. As we have noted 

often times before, this Court will not consider on appeal 

issues that have not been raised below. See, e.g., Rustics 

of Lindberg Lake v. Lease (Mont. 19841, 690 P.2d 440, 41 

St.Rep. 2092. 

Finally, respondent asks us to dismiss this appeal 

because of appellant's failure to comply with Rule 10(c), 

M.R.App.Civ.P. Rule 10(c) provides that the record on appeal 

must be submitted to this Court within ninety days of the 

notice of appeal. Ninety days from the filing of the notice 

of this appeal expired on September 26, 1984, and the record 

was not forwarded to this Court until October 3, 1984. In 

Hannifin v. Retail Clerks (1973), 162 Mont. 170, 172-173, 511 
P.2d 982, 984, we noted that Rule 10 (c) gives this Court wide 

discretion in permitting the filing of a record, and we 

quoted from that rule as follows: "If the District Court is 

without authority to grant the relief sought or has denied a 

request therefore, the Supreme Court may on motion extend the 

time for transmitting the record or may permit the record to 

be transmitted and filed after the expiration of the time 

allowed or fixed." In this case both the appellant, who 

requested an extension for transmitting the record to more 

than ninety days from the filing of the appeal, and the 

District Court, which granted the request, though it had no 

authority to do so, indicated a relaxed attitude about the 

Appellate Rules which we do not encourage. However, the 

violation in this case was not egregious and there is no 

evidence that it was anything but inadvertent. Under these 

circumstances we refuse to dismiss. 

The judgment of the District Court is affirmed. 

We concur: --/