No. 12077 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1972 

YENS HANSEN, 

Plaintiff and Respondent, 

LEE KIERNAN, Administrator of the Estate of 

JOSEPH PATRICK KIERNAN, deceased, et ale, 

Defendants and Appellants. 

Appeal from: District Court of the Third Judicial District, 

Honorable Sid G. Stewart, Judge presiding. 

Counsel of Record : 

For Appellants : 

Tipp, Haven and Brault, Missoula, Montana. 

Raymond We Brault argued, Missoula, Montana. 

For Respondent : 

William Re Taylor argued, Deer Lodge, Montana. 

James J. Masar, Deer Lodge, Montana. 

Submitted: April 21, 1972 

Decided: JUL f 1 1914 

Filed : JUL 1.1 lm 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

This is an appeal from a judgment and decree of the district 

courc of the third judicial district, Powell County, sitting without 

a jury, ordering specific performance of an oral agreement entered 

into by plaintiff Yens Hansen and decedent Joseph Patrick Kiernan. 

The court further ordered all monies that have accrued and will 

become due to the benefit of decedent's estate as a result of the 

former partnership to be paid to plaintiff. 

By his amended complaint, plaintiff asked (1) for a declaration and adjudication of the rights of plaintiff and the 

estate of Joseph Kiernan, deceased, to monies due under a contract 

for deed agreement; (2) that the district court enter judgment 

establishing an oral contract between plaintiff and decedent; and 

(3) a decree that as a result of the contract plaintiff is entitled 

to all monies that have accrued and will become due under the contract for deed. 

Defendant in the instant suit is the administrator of the 

estate of Joseph Patrick Kiernan, Lee Kiernan. It is defendant's 

position that a partnership existed between plaintiff and decedent 

but that the partnership terminated with Kiernan's death and there 

is now due his estate an accounting of the partnership affairs. 

Further, all testimony relating to an alleged oral agreement between 

plaintiff and decedent to execute mutual wills was inadmissible 

under the so-called "dead man's" statute, section 93-701-3, R.C.M. 

1947. 

The uncontested facts indicate that in 1932 Joseph Kiernan, 

a single man 43 years of age, entered into an oral partnership 

agreement with Yens Hansen, a single man 28 ypars of age. The 

partnership agreement provided that Hansen and Kiernan would purchase a 331 acre ranch known as the "~acklin Place" near Elliston, 
Montana, for the purpose of engaging in the ranching and cattle 

raising business. The partnership flourished and in 1940 they 

purchased additional property known as the at Creek Place" 

consisting of approximately 419 acres. 

At various times during the period 1932 - 1941, both 

Hansen and Kiernan s0ugh.t outside employment to earn cash and each 

contributed his earnings to the partnership. While it may seem 

unusual that such an undertaking was only supported by an oral 

agreement, it should be noted. that Hansen and Kiernan had known 

each other since 1914, and Kiernan had resided at ans sen's grandparents' ranch for a number of years previous to 1932. There is 

every indication that they were not only good friends, but were 

also amiable and diligent business partners. 

On January 23, 1941, the partners executed formal written 

articles of copartnership. The articles provided, among other 

things, that they would: 

'I* * become copartners in the ranching and 

farming business under and by the name, firm and 

style of 'Kiernan & Hansen. ' 9: * % 

"That the term of said partnership 9: 9: * shall 

end whenever the parties may terminate said partnership by mutual consent with or without a written 

agreement of dissolution. * ;k 

"At the termination of this partnership, by expiration of the term or by reason of any other cause d. -1- -L the debts of the partnership shall be discharged; and all money or other assets of the partnership then remaining, shall be divided between 

the parties, share and share alike ik 9: 9:. I' 

In 1942 Hansen was drafted into the United States army 

at the age of 38. Before leaving for active duty Hansen, recognizing the uncertainties of wartime military service, executed 

a will whereby he bequeathed and devised his personal and real 

property to Joseph IGernan, leaving only his "good will1' to his 

heirs-at-law. The will was mailed to Kiernan and deposited by 

him inhis safety deposit box. At all times after receiving an sen's 
wil.1, Kiernan had access and control over the will. 

At trial, over the objection of defendant's counsel, Yens 

Yanseii testified that in 1942 due to his impending military service he and Kiernan entered into an oral agreement to execute mutual 

.~r reciprocal wills whereby each of them would give, devise, and 

bequeath to the other all of his right, title and interest in all 

of their real and personal property except a certain homestead belonging to Kiernan. He testified that pursuant to such agreement 

he executed the aforementioned will, thus fully performing his part 

oZ the agreement. 

Plaintiff further testified that during the 33 months he 

spent on active duty Kiernan continued to operate the partnership; 

that he sent home to Kiernan the sum of $800 to be expended for the 

ranching partnership; and, that upon his discharge he contributed 

an additional $800 to the partnership. 

In 1945 the partners purchased additional propercy known 

as the "~onovan Place" consisting of approximately 360 acres. In 

1960, they purchased another ranch consisting of approximately 800 

acres. In 1960 Kiernan became afflicted with arthritis which required him to use a cane and eventually crutches in order to get 

around. This so restricted Kiernan's activities that the partners 

agreed to sell their partnership and, in effect, retire. 

In 1966 the partners entered into an agreement with two 

prospective purchasers for the sale and purchase of all of the 

real and personal property of the partnership. The partnership 

was sold under a contract for deed agreement the terms of which 

provided for a down payment and a balance due of $85,200 to be 

paid in ten equal annual installments, the first due on November 

15, 1967. 

An escrow agreement, warranty deed, abstract of title and 

insurance policies were held in escrow by the Deer Lodge Bank & 
Trust Company. An escrow receipt was issued to the parties which 

recited the escrow agent would: 

"Credit payments to Sellers, by escrow check 

made payable to both sellersf1. 

Hansen testified that in the fall of 1966 he and Kiernan 

made a "special trip down here to the bank in Deer Lodge on account 

of that" escrow receipt. ftik 9c 9; it didn't leave any provision for 

the survivor of us +i 

* *. " He testified he and Kiernan explained 

to the bank cashier (since deceased) that they wanted the wording 

of the escrow receipt changed: 

"2 * 9; so that if anything happened to either 

one or the other of us, that the money would 

automatically go to the other one * +;." 

As a result of this meeting, the escrow receipt was modified by 

interlineation to read: 

"Credit payments to Sellers, checking account # 14-509f'. 

This change was signed by Hansen and initialed by Kiernan. 

Checking account #14-509 had been used by the partners 

during the existence of their partnership. Each partner had the 

right to draw on this account. After the sale of the partnership 

assets, Hansen and Kiernan continued to use this account for their 

personal use. 

Following the sale of the partnership assets Hansen and 

Kiernan continued their association and friendship. They took 

motor trips together to Alaska and California; they purchased a 

residence in Missoula in joint tenancy with the right of survivorship; they had two savings accounts,both in joint tenancy; and they 

purchased corporate stock also in joint tenancy. 

On April 8, 1968, Joseph Kiernan passed away. No will was 

ever located. Plaintiff brought the instant action for specific 

performance of the oral agreement entered into between himself and 

Kiernan in 1942 to execute mutual or reciprocal wills. Here, the 

problem is to determine who is entitled to the balance of the 
payments due under the contract for deed agreement paid after 

~iernan's death and those still to be paid---Hansen or ~iernan's 

heirs under the intestacy laws? 

The trial court held that there had existed an oral agreenent between Hansen and Kiernan to execute mutual wills; that 

Hansen had performed his part of the agreement; that Kiernan had 

failed and neglected to perform his part of the agreement; and, 

therefore, specific performance of the agreement by the administrator was ordered. 

Defendant raises eleven issues for review on appeal which 

we believe can be more succinctly stated as: 

1. Whether the trial court erred in refusing to hear 

defendant's preliminary motion to strike because of a local court 

rule requiring the filing of briefs with such preliminary motions. 

2. Whether testimony relating to conversations and agreements between the plaintiff and decedent were properly admitted 

1 I' under the "dead man s statute, section 93-701-3, R.C.M. 1947. 

3. Whether defendant's post-trial motion to dismiss 

should have been granted, due to the running of the statute of 

limitations. 

4. Whether plaintiff was guilty of laches. 

5. Whether the attempt to enforce the oral agreement 

varied the terms of the written articles of copartnership. 

6. Whether the trial court ruled specifically on the 

objections raised at trial. 

Issue 1. We find that prior to trial defendant had properly 

filed and noticed a motion to strike certain portions of plaintiff's 

amended complaint. On the date set for hearing of the motion the 

trial judge summarily denied the motion, because of defendant's 

failure to file a brief in support of the motion in accordance 

with a local court rule. 
While defendant has raised this issue on appeal, it has 

not been argued either in defendant's brief or during oral argument 

before this Court. We can only surmise that this specification 

of error has been abandoned and we will not consider it further, 

except to say that such rules of practice may be adopted and 

enforced by the district courts in accordance with section 93-502, 

R.C.M. 1947, and Rule 83, M.R.Civ.P. 

Issue 2. Section 93-701-3, R.C.M. 1947, provides that the 

following persons cannot be witnesses: 

"(3). Parties or assignors of parties to an 

action or proceeding, or persons in whose behalf 

an action or proceeding is prosecuted against an 

executor or administrator upon a claim or demand 

against the estate of a deceased person, as to 

the facts of direct transactions or oral communications between the proposed witness and the deceased, 

excepting when the executor or administrator first 

The purpose of this statute is twofold: (1) it prevents 

the living party, by reason of the death of his adversary, from 

gaining an undue advantage over the administrator, and (2) it 

removes the temptation for the commission of perjury. Leffek 

v. Luedeman, 95 Mont. 457, 463, 27 P.2d 511; Johnson v. Mommoth 

Lode, 136 Mont. 420, 422, 423, 348 P.2d 267; Novak v. Novak, 141 

Mont. 312, 316, 377 P.2d 368. 

The statute, section 93-701-3(3), allows two exceptions 

to the prohibition of a surviving party acting as a witness in an 

action for a claim or demand against an estate. The first is when 

the executor or administrator first introduces evidence of such 

a claim or demand. We are not concered here with this exception. 

However, the second exception provides that the surviving party 

I I may be a witness when it appears to the court that, without the 

I I testimony of the witness, injustice will be done. We must now 

determine if the trial court abused its discretion under this 

second exception. 
In Johnson v. Mommoth Lode, 136 Mont. 420, 423, 348 P.2d 

267, this Court said: 

'If: 9: before a witness, who is declared to be 

incompetent by this statute, will be allowed to 

testify to prevent an injustice, a foundation 

must be laid by the introduction of other evidence, which shows that in all probability the 

proponent has a meritorious cause of action. It 

(Emphasis supplied) 

What then is the "other evidence" that tends to show that 

plaintiff's claim here is meritorious? (1) There is the will 

executed by Yens Hansen in 1942, which bequeaths and devises all 

of his real and personal property to Kiernan. (2) There is the 

testimony of Katie Hansen, plaintiff's sister, who stated that she 

had known Joseph Kiernan all of her life and that in the fall of 

1966, I(iernan and plaintiff had had dinner with her after their 

trip to the Deer Lodge Bank & Trust Company to change the escrow 

receipt. She testified: 

I I I -1- - 4b well, I remember that Joe [Kiernan] made 

the remark that everything was taken care of--- 

that they had been to the bank, and that the 

papers were all in order, so that if anything 

happened to either of them, why it was a right 

of survivorship, and that if one of them would 

pass away, the other one would get it 7k ik *. 11 

(3) There are the two savings accounts in Hansen's and Kiernan's 

names as joint tenants with right of survivorship. (4) There 

are the shares of corporate stock also held in joint tenancy with 

right of survivorship.. (5) There was a purchase of a residence 

in Missoula, again with joint tenancy with right of survivorship. 

(6) There is the escrow receipt which shows that a change to the 

document was made. (7) There was an undisputed lifelong association between Hansen and Kiernan without any indication whatsoever 

that there was ever any discord or mistrust between them. (8) There 

is evidence that an sen's will was mailed to Kiernan in 1942, and 

held by Kiernan in his safety deposit box, (9) There is ample 

evidence of a successful partnership that existed between these two 
men under both an oral agreement and written articles of copartnership. Finally, after the sale of the partnership, Hansen 

and Kiernan continued their association by traveling together, 

living together and looking after each other until ~iernan's death. 

Considering all of the "other evidence" as a whole, we 

cannot say that plaintiff failed to lay a sufficient foundation 

for the admission of his testimony relative to an oral agreement,. 

entered into between himself and Kiernan to execute mutual wills. 

Nor will we reverse without a positive showing that the district 

court abused its discretion. This Court said in Novak v. Novak, 

141 Mont. 312, 316, 377 P.2d 368: 

I -1, 4b ;k it [the court] had the advantage of 

observing the witnesses during their testimony and was in a better position than this 

court to determine whether or not injustice 

would result if the plaintiff were not permitted to testify. " 

Issue 3. Defendant alleges his post-trial motion to dismiss 

should have been granted due to the running of the statute of limitations. He argues that if there ever was an agreement to execute 

mutual wills, that such an agreement was an oral agreement entered 

into in 1942, and is now barred by sections 93-2601 and 93-2604, 

R.C.M. 1947. In support defendant cites Pincus v. Davis, 95 Mont. 

375, 26 P.2d 986. 

Rule 8(c), M.R.Civ.P., provides that a defense of the 

running of the statute of limitations is an affirmative defense 

and can only be raised by answer. Grogan v. Valley Trading Co., 

30 Mont. 229, 76 P. 211; State ex rel. IColbow v. District Court, 

38 Mont. 415, 100 P. 207. Here, defendant failed to plead the 

statute of limitations in his answer and therefore waived such 

defense. 

However, defendant argues that Pincus holds that this 

Court may raise the statute of limitations on its own motion as 

a bar to a claim against an administrator under section 91-2710, 
R.C.M. 1947. Cocanougher v. Cocanougher, 141 Wont. 28, 375 P.2d 

1014, Defendant is correct in this contention however both 

Pincus and Cocanougher apply to cases where the claim against the 

decedent arose many years prior to an action being filed. They 

involve obvious cause of action which the plaintiffs failed to 

do anything about. Such is not the case here. 

ldhile we may dispose of this argument by saying that defendant has waived his right to raise this defense under Rule 

8(c), M.R.Civ.P., we go further and say that the statute of limitations is not a valid defense. The cause of action did not arise 

until there was a breach of the agreement to execute mutual wills. 

Plaintiff had no knowledge of this breach until after the death 

of Joseph Kiernan. We find issue 3 to be without merit. 

Issue 4. Whether plaintiff is guilty of laches even though 

not plead by defendant? 

Rule 8(c), M.R.Civ,P., requires that such a defense must 

be plead to be relied upon. Failing to so plead, we will not further 

consider defendant's issue 4. United States v. Eytcheson, 237 F. 

Supp. 371; Weir v. Silver Bow County, 113 Mont. 237, 124 P.2d 1003; 

State ex rel. Boorman v, State Board of Land Commrs., 109 Mont, 

127, 94 P.2d 201, 

Issue 5. Whether the attempt to enforce the oral agreement 

varied the terms of the written articles of copartnership? In 

asserting this issue, defendant contends the partnership remained 

in effect until the death of Kiernan and therefore controls the 

division of partnership assets as between the partners. The trial 

court found that the sale of all partnership property in 1966 

terminated the partnership. The particular undertaking of the 

partnership was a "ranching and farming businessi'. The termination of that undertaking by the sale of the ranch "lock, stock and 

barrel" as testified by plaintiff, brought the partnership evidenced 

by the written agreement to an end. Section 63-503, R.C.M. 1947. 
Under the particular facts of this case, the trial court correctly 

concluded that the written partnership agreement was not a bar 

either to plaintiff's testimony or his claim. 

Issue 6. Whether the trial court properly ruled on 

evidentiary matters? We have carefully examined the record and 

find no merit to this issue. 

The judgment of the district court is affirmed. 

1 

Associate Justice 

/ Chief justice 

11 Fon. Charles Luedke. District 

Judge, sitting for Mr. Justice 

Castles. 

Mr. Justice Haswell and Mr. Justice Daly dissenting: 

We dissent. 

plaintiff's claim for relief in the instant case is 

bottomed on establishing a valid and enforceable oral agreement 

between plaintiff and decedent in July 1942, whereby each agreed 

to make a will leaving his interest in the partnership property 

to the other. The existence of such an oral agreement rests 

entirely on the uncorroborated testimony of plaintiff, the survivor, 

concerning a conversation he had with decedent almost thirty years 

previously. In our view, plaintiff is an incompetent witness to 
so testify, such testimony is inadmissible in evidence under 

Montana's deadman statute [section 93-701-3(3), R.C.M. 19471, 

and plaintiff's claim fails. 

This statute provides in pertinent part: 

II Persons who cannot be witnesses. The following 

persons cannot be witnesses: 

"3. Parties or assignors of parties to an action 

or proceeding, or persons in whose behalf an action 

or proceedings is prosecuted against an executor or 

administrator upon a claim or demand against the 

estate of a deceased person, as to the facts of 

direct transactions or oral communications between 

the proposed witness and the deceased, excepting 

when the executor or administrator first introduces 

evidence thereof, or when it appears to the court 

that, without the testimony of the witness, injustice will be done. >k f: 2" 

Previous decisions of this Court indicate that the 

purpose of the deadman's statute is twofold: (1) to prevent the 

survivor from gaining an undue advantage over the deceased's 

estate, and (2) to remove the temptation for the commission of 

perjury by the survivor giving testimony that in all probability 

cannot be denied by any living person. Novak v. Novak, 141 Mont. 

312, 316, 377 P.2d 368; Johnson v. Mommoth Lode, 136 Mont. 420, 

348 P.2d 267; Cox v. Williamson, 124 Bfont. 512, 227 P,2d 614; 

Leffek v. Luedeman, 95 Mont. 457, 27 P.2d 511. 

In conformity with such purpose, this Court has required 

that before a witness, who is declared to be incompetent by this 

statute, will be allowed to testify to prevent an injustice, a 

foundation must be laid by the introduction of other evidence which 

indicates that in all probability the proponent has a meritorious 

cause of action. Johnson v. Mommoth Lode, supra, and cases cited 

therein; Potlatch Oil & Refining Co. v. Ohio Oil Co., CCA 9, 199 

F.2d 766, cert. den. 345 U.S. 926, 73 S.Ct. 786, 97 L ed 1357; 

Phelps v. Union Central Life Ins. Co., 105 Flont. 195, 71 Y.2d 887. 
In our view, this foundation evidence must indicate the 

probability of the existence of such oral agreement, and not simply 

establish facts equally consistent with its existence or explainable on unrelated grounds. This requirement is particularly 

important where, as here, the terms of the alleged oral agreement 

are directly contrary to the terms of the three pertinent written 

agreements admitted in evidence ---the partnership agreement, the 

original escrow agreement, and the modified escrow agreement. It 

has been so held by this Court in previous cases involving alleged 

oral agreements to make a will Langston v. Currie, 95 Mont. 57, 26 P, 3 

2d 160; Cox v. Williamson, supra, and particularly in cases where 

the oral agreement modifies or conflicts with a written contract. 

Bauer v. Flonroe, 117 Mont. 306, 158 P.2d 485; Davison v. Casebol t, 

154 Mont. 125, 461 P.2d 2, 

In the instant case there is simply no evidence of the 

existence of an oral contract to devise and bequeath except for 

the testimony of plaintiff, the surviving partner. The making of 

a will by plaintiff no more proves the existence of an oral contract by decedent to execute a will in plaintiff's favor, than the 

execution of any contract or document by one person creates a 

recipricol obligation on the part of the obligee. Nor does any 

of the other evidence listed in the majority opinion prove an oral 

contract by decedent to devise and bequeath his property to plaintiff. The lapse of some 24 years between 1942 and decedent's death 

in 1968, without enforcement or mention of the alleged oral contract 

by plaintiff adds nothing to the required foundation. 

Absent any foundation therefor, we would hold that the 

district court abused its discretion in admitting the testimony 

of plaintiff under the deadman's statute, and accordingly that 

 la in tiff' s claim must fail.