No. 13339 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

VERN J. DOBITZ, JAMES L. 

SCHAREN and JOHN FURGASON, 

Plaintiffs and Appellants, 

FRED E. OAKLAND and LORETTA OAKLAND, 

husband and wife, and WESTERN PROPERTIES, 

a Montana general partnership, 

Defendants and Respondents. 

Appeal from: District Court of the Thirteenth Judicial 

District, 

Honorable Charles Luedke, Judge presiding. 

Counsel of Record: 

For Appellants: 

Michael J. Whalen argued, Billings, Montana 

For Respondents : 

Moulton, Bellingham, Longo and Mather, Billings, 

Montana 

B. E. Longo argued, Billings, Montana 

Hutton, Sheehy and Cromley, Billings, Montana 

Submitted: January 26, 1977 

Decided: MAR 4 fgn 
Honorable Peter G. Meloy, District Judge, sitting in place of 

Mr. Justice Frank I. Haswell. 

This is an appeal from a declaratory judgment granted 

by the district court, Yellowstone County, in favor of defendants 

Fred E. Oakland and Loretta Oakland. 

The facts from which this litigation arises are: 

Oaklands sold certain real property rental units to the 

plaintiffs,Vern J. Dobitz, James L. Scharen and John Furgason, 

on a contract for deed, which contract contained a provision 

for nonassignment unless Oaklands' consent was given. 

Plaintiffs, without Oaklands' consent, entered into 

a contract for deed to sell to defendant Western Properties, Inc. 

The contract for deed between Oaklands and plaintiffs 

provided that in the event of default by plaintiffs, Oaklands 

would give a written notice of default and plaintiffs would 

have 30 days to cure the default. Notice of default was given 

on October 7, 1975. 

The contract further provided that in the event the default was not cured within the 30 day period, that Oaklands could, 

by written notice, dzclare the entire balance on the contract 

due. Such notice was given November 12, 1975. Plaintiffs on 

November 13, 1975 filed this action for declaratory relief and 

requested an order restraining Oaklands from further action on 

the notice of acceleration. The district court granted a temporary restraining order and order to show cause. Oaklands 

filed an answer and a motion for a summary judgment. Defendant Western Properties, Inc., acknowledged service but has not 

otherwise pleaded to the complaint. 

On December 5, 1975 a hearing before the district court 

was had upon the order to show cause and the motion for summary 

judgment. The district court entered judgment for Oaklands 

holding: (1) that plaintiffs had violated the provisions of the 
contract by entering into the contract with Western Properties, 

Inc. without first obtaining the consent of the Oaklands; (2) 

that a proper notice of default was given by Oaklands; (3) that 

there was a failure to cure within the 30 days allowed by the 

contract and that further notice accelerating the balance was 

given; and (4) that the order restraining the Oaklands as to 

action on accelerating the balance be quashed. (The district 

court thereafter stayed the execution of the judgment, the 

effect of which restrained Oaklands from taking any further action under the default provision of the contract until 10 days 

after the filing of the remittitur from the Supreme Court.) 

On appeal plaintiffs raise issues hereinafter discussed: 

First: Has there been a default by plaintiffs which 

came within the default provisions of the contract for deed? 

Plaintiffs contend there was not a "default", as such, 

but merely a "breach". They admit there was a breach but argue 

that the remedy is for damages and does not come under the default provisions which provides for notice and an opportunity 

to cure the default. Plaintiffs argue the default provision 

applies only to a failure on the part of plaintiffs to perform 

their affirmative obligations under the contract. 

The pertinent sections of the contract for deed are: 

"11. DEFAULT PROVISIONS. Should Buyer fail to 

make the payment provided herein or to perform 

any of the other terms on Buyer's part to be 

performed hereunder * * *." (The balance of 

the section provides for notice, etc.) 

"12. REMEDIES NOT EXCLUSIVE. In the event of a 

breach by Seller or Buyer of a provision hereof 

or in the event of anyadefault as defined herein, 

the party aggrieved thereby shall have all the 

rights and privileges accorded by law or otherwise. No remedy herein conferred upon or reserved 

to any of the parties herein is exclusive of any 

other remedy or remedies, and each and every 

remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now 

or hereafter existing at law or in equity." 

Plaintiffs argue Section 12 makes a distinction between 
breach and default. 

The question is presented as to whether the action on the 

part of plaintiffs in reselling the property and violating the 

nonassignment clause without consent constitutes a default within the meaning of Section 11 of the contract. 

The district court found the failure to procure the 

consent constituted a default within the meaning of Section 11. 

We agree. 

We note the default provision carries the words, in 

addition to the failure to make payments, "or to perform any of 

the other terms on Buyer's part to be performed hereunder * * *." 

There was an obligation of performance on plaintiffs' 

part to secure the Oaklands' consent prior to the sale to Western 

Properties, Inc. Such obligation was not performed and thus such 

failure of performance constitutes a default within the meaning 

of Section 11 of the contract. 

Second: Was the provision of Oakland's contract for deed 

prohibiting assignment or transfer of interest without Oaklands' 

prior consent void in contravention of public policy, and in 

contravention of section 67-405, R.C.M. 1947, as an unlawful 

restraint upon alienation? 

Section 67-405, provides: 

"Conditions restraining alienation, when repugnant 

to the interest created, are void." 

The district court found the contract provision against 

transfer without the Oaklands' consent was not void and was a 

condition not encompassed within the meaning of section 67-405. 

We agree. 

The general rule is stated in 4 Corbin on Contracts, 

"We have substantial unanimity of authority to 

the effect that in contract for the future 

conveyance of land or goods, the vendor can 
limit or forbid the purchaser's assignment of 

his right to transfer. The court may hesitate 

to interpret general words against assignment 

as being intended as such a prohibition; but 

such a prohibition, if made, is not invalid. 

Attention may again be called, however, to the 

difference between forbidding the assignment of 

a contract right to a future transfer, and forbidding a future conveyance of land or goods by 

the buyer after their transfer to him. The 

latter may be invalid for various reasons; it 

is the former that is now being considered." 

This statement of the law recognizes the difference between a 

conveyance and a contract to convey. The land contract such as 

is involved here is an executory contract and the legal title 

does not pass until the conveyance is actually made. We adopt 

the general rule. (Compare: Rother-Gallagher v. Montana Power, 

164 Mont. 360, 552 P.2d 1226, wherein this Court held that the 

provisions for nonassignment in a contract be upheld in Montana 

and cited Winslow v. Dunham, 46 Mont. 71, 125 P. 136; Standard 

Sewing Machine Co., v. Smith, 51 Mont. 245, 152 P. 38. See also: 

Lipsker v. Billings Boot Shop, 129 Mont. 420, 288 P.2d 660.) 

Plaintiffs reason the judgment of the district court 

holding the new assignment clause to be valid operates to prevent plaintiffs from entering into rental agreements. There 

was, in this case, no default specified in the notice as to the 

rental agreements and is not an issue here. We note, however, 

that the default complained of here is that of the granting of 

an interest which is not a terminable interest, as is the case 

of a month to month tenancy. 

Plaintiffs do not concede the so-called assignment clause 

is not void but contend that should this Court hold that it is 

not void, then plaintiffs urge this Court to adopt what the Oaklands characterize as the minority rule. Under the so-called 

minority rule the clause is not void, but must be of reasonable 

application. Plaintiffs contend the failure of Oaklands' giving 

of consent was unreasonable and was solely motivated by a desire 

to get an increase in their interest rate. 
The district court made no findings as to the reasonableness of the withholding of consent, and under the view of 

this Court such finding is not necessary. (There was conflict 

in the testimony as to the information given to Oaklands as 

to the terms of the resale contract and the names of the 

purchasers. ) 

The judgment of the 

sitting in place of stice Frank 

I. Haswell. 

Chief Justice 

h 

justices