### No. 84-433 INTHE SUPREMECOURT OF THE STATEOF P4ONTANA

MICHAEL J. SCHEITLIN, Personal Representativeof the Estate of Edward E. Scheitlin, Deceased, Plaintiff and Respondent,

R & 

### D MINERALS, a Montana corporation, Defendantand Appellant.

APPEAL FROM: District Court 

### of the Fifth Judicial District, In and for the County of Madison, The Honorable Frank Davis, Judgepresiding.

COUNSEL OF RECORD:

ForAppellant: LinoA. 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

-- ClerkMr. 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 lastone 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 filedforbankruptcy. On April 13, 1984, theUnited StatesBankruptcy Court for theDistrictof Montana remanded the case totheMontana StateDistrict Court, Madison County, forthedetermination of the followingmatters concerningthe above-mentioned contract between R & D Minerals and the Scheitlinestate: 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 statusof 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 theScheitlinEstate.After an evidentiary hearing, and pursuant totheorder of the Bankruptcy Court, the DistrictCourt 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 therequired 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

### termsand conditions of that contract and none other. "5. Scheitlin's obligation to provide marketable 

### title

### isnow moot, but thatif the contract 

### were in good standing, Scheitlin was obligated to provide marketable 

### titleatany 

### timeprior tothe R & D's making the finalpayment; "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 afterthe passing of a reasonable period inwhich thevendor took no meaningful actiontocorrect 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 thatthis 

### is the rule in Montana but argues that there are exceptions applicable tothiscase. First, R & D contends that the contract "expressly contemplates that the vendor was toproduce marketable title 

### well in advance of the closingdate." The contract provides the following under the heading, Marketability 

## - of Title toReal Pro~ertv: "Prior to October 15, 1979, the sellers 

### will cause to be furnished to the purchaser abstracts of 

### title for such mineral claims asaretheproperty of the 

### sellers, and 

### will permit the purchaser reasonable

### time, not toexceed sixty (60) days, tohave such abstracts examined by an attorney of 

### its own choice. Should such examination disclose the title to such properties tobe unmarketable, then the 

### sellers shall take such steps asmay be necessary to render the same marketable, including a quiet title action, all at 

### sellers' own expense." The contract furtherprovides for the settingup of an escrow account, requiring the escrow to "deliver such instruments, documents and papers to the purchaser atthe 

### time of final payment hereunder." We find thatneither of theseprovisions 

### 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 stepstobring such 

### itemsinto conformity with theirwarranty." However, the contract does not contemplate that purchasers can withhold payments in order tocoerce the sellers intocorrectingtitle. Rather, a specificremedy 

### isprovided: "Upon discovery of a breach of sellers' warranties concerning ownership or lien obligations, or sellers

## ' fail-uretokeep current any underlying obligations not assumed 

### by purchaser and affecting the real orpersonal 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 tocooperate fully with purchaser in correcting any such deficiency and agree that any legal proceeding may be brought in theirnames. 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 anypayments due sellers." Even assuming thatthere

### weredefects 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 indefaultby theDistrict Court. Second, R & D argues thateven ifthecontract 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 titlethatcould notbe cured. However, there

### is nothing in either the record on appeal orthe DistrictCourt 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 thepurchase price toreflect the difference invalue 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 oftheFourth Judicial Districtof the State of Montana in and for the County of Missoula.'' R & D'sargument that incurabledefects inthe 

### seller's title justifies withholding payments on the contract must fail since, even ifthere

### wereevidence of incurabledefect, there hasbeen no resort totheremedy provided by contract. R & D further argues that the Scheitlins are guilty of fraud and misrepresentation for selling property with incurable defects inthe title and that R & D was within 

### its rights inwithholding payments. Wenote: 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 firsttime 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 thattherecord on appeal must be submitted to this Court within ninety days of the notice of appeal. Ninety days from the filingof the notice of this appeal expired on September 26, 1984, and the record

was not forwarded tothis Court until October 

### 3, 1984. In Hannifin

### v. Retail Clerks (1973), 162Mont. 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 Courtmay onmotion extend the time for transmitting the record ormay 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 todismiss. The judgment of the DistrictCourt is affirmed.

We concur: --/