IN THE SIJPREME COURT OF THE STATE OF MONTANA 

RALPH M. HOLMAN, 

Plaintiff and Appellant., 

-vsGEORGE G. HANSEN, MARGARET E. HAP?SEN, 

RITA M. TURIJEY, GEORGIA L. HANSEN, CHRIS 

M. HANSEN, T7IC G. HANSEN and MICHAEL J. HANSEN, 

Defend-ants, Respondents and Cross-- 

Appellants. 

APPEAL FROM: District Court of the Sixth Judicial District, 

In and for the County of Sweet Grass, 

The Honorable Byron I,. Robh, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Richard F. Cebull; Anderson, Brown, Gerbase, Cebull, 

Fulton, Harman & Ross, Billings, Montana 

For Respondent: 

John T. Jones; Moulton, Rellingham, Jmngo & Mather, 

L-Billjngs , Montana . - 8 

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r: i- Submitted on Briefs: April 6, 1989 

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L LIj . Decided: April 27, 1989 

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Mr. Justice R. C. McDo~ough delivered the opinion of the 

Court. 

This appeal involves a contract for deed to ranch 

property located near Big Timber, Montana. Plaintiff Ralph 

M. Holman (Holman), the buyer under the contract, appeals 

from the order of the District Court of the Sixth Judicial 

~istrict, Sweet Grass County, granting summary judgment in 

favor of the sellers, George G. Fansen, et al. (Hansens!. 

The order held Holman's claims to be barred, and granted one 

of the two alternative remedies sought bv Hansens. The court 

ordered that Holman would forfeit all payments made un2er the 

contract, and Hansens wouI.cl retake possession of the 

premises, less a 40-acre tract described below. The court 

denied Iqansens' request for payment in full of the halance of 

the contract price. We affirm. 

Holman presents two issues on appeal: 

1. Whether the District Court improperly usurped 

Holman's right to a jury trial by resolving questions of fact 

in its grant of summary judgment to Hansens? 

2. Did the District Court err in granting Hansens' 

motion for summary judgment on the grounds that Folman's 

claim is barred by the applicable statute of limitations, 

waiver, estoppel and contract terms? 

Hansens present one additional issue on cross-appeal: 

Whether the trial court erred in ruling that Hansens 

could not elect the remedy of specific performance and obtain 

a judgment for the accelerated balance of the contract for 

deed, and that Hansens' sole remedy was repossession of +he 

ranch property and retention of the payments made by Holman. 

The contract for deed at issue is dated January 1, 1982. 

The subject of the contract is approximately 2,800 acres of 

deeded land and assignment of a leasehold interest in another 
1,120 acres. The purchase price is $950,000.00, paid with a 

$200,000.00 down payment and 20 annual installments of 

$88,132.76. The contract also provides that upon payment of 

$500,000.00 in principal and interest, Holman receives title 

to a 40-acre parcel within the ranch where a house and other 

improvements are to be built for Holman. 

After execution of the contract, Holman took possession 

of the property, which he still retains. After the 19PO 

installment was made, more than $500,000.00 in principal an? 

interest had been paid on the contract, and Holman received 

the deed to the 40-acre parcel. Holman failed to pay the 

1987 installment. Pursuant to contract terms, Hansens sent 

Holman a ~otice of Default, which gave him 40 days to pay the 

1987 j-nstallment in full. Holman did not make the payment. 

Hansens +hen elected under the contract to accelerate the 

entire balance due, and sent a ~otice of Acceleration to 

Ho lman . The notice gave Holman 90 days to pay all 

outstanding principal and interest under the contract. 

Holman did not do this, and filed suit against FTansens on 

January 30, 1987. 

Holman's complaint alleged fraud, breach of warranty, 

breach of the implied covenant of good faith and fair 

dealing, failure of consideration and breach of four separate 

contracts to make improvements on the property. Holman 

sought rescission, or in the alternative, reformation of the 

contract for deed, general an6 punitive damag~s for fraud, 

contract damages, costs and attorney's fees. 

Holman's claims of fraud stem from his alleged intention 

to use the ranch property to pursue an outfitting business. 

While Holman's primary profession was the operation of an 

iron and steel business, he had been licensed as an outfitter 

in Montana since IPS7. Accnrdjnq to Holman, he was 
contemplating the sale of his business in order to "retire" 

to the ranch to work full-time as an outfitter. 

George Hansen was Holman's main contact with the 

sellers. It Was George Hansen who showed the ranch to 

Holman. According to the Complaint, George Eansen made 

misrepresentations to Holman by claiming that, among other 

things, an abundance of game and fish inhabited the property, 

only one smal-1 patch of noxious weeds was to be found on the 

entire ranch, 250 to 300 cow/calf pairs could he grazed on 

the land in season, and Hansen himself had paid ~600,000.00 

for the property approximately ten years earlier. According 

to Bolman, these statements were false, Hansen knew they were 

false, an2 Holman relied on them in deciding to purchase the 

property. 

Jn their answer, Hansens asserted a counter-claim 

alleging two counts: (I) Holman was in default on the 

contract for deed, which entitled Hansens to judgment for the 

entire balance of the purchase price, or in the alternative 

awarding forfeiture of all payments made and repossession of 

the property; and (2) the location of Folman's 40-acre parcel 

rendere?. much of the ranch unusable by inhibiting access to 

it, therefore Holman's warranty deed to the 40 acres should 

be declared void and quiet title granted to Hansens. 

Hansens later moved for summary judgment. By its order 

of February 29, 1988, the ~istrict Court granted summary 

judgment, but permitted Holman to retain the 40-acre parcel 

together with an easement for access over existing roads. 

The court requested briefs detailing Hansens' claim to the 

balance of the purchase price as opposed to forfeiture anc' 

repossession as provided for in the contract.. By its Order 

of April 6, 1988, the court denied Hansens' request for the 

contract balance and instead awarded forfeiture and 

repossession. This appeal followed. 
I. Holman's Appeal 

Holman's arguments on appeal center on the District 

Court's holding that his fraud-based claims are barred by the 

applicable statute of limitations. The statute of 

limitations for fraud is found at § 27-2-203, MCA: 

The period prescribed for the commencement of an 

action for relief on the ground of fraud or mistake 

is within 2 years, the cause of action in such case 

not to be deemed to have accrued until the 

discovery by the aggrieved party of the facts 

constituting the fraud or mistake. 

~ccording to Holman, he did not discover the facts 

constituting George Hansen' s fraud until 1985, 1-ess than two 

years before the complaint was 'iled. 

The party asserting fraud is put on inquiry notice of 

the other part.yls misdeeds, and must exercise ordinary 

d-iligence to di-scover the facts constituting the fraud. 

Yellowst.one Conference of United ~ethodist Church v. D.A. 

Davidson (Knnt.. ?987), 741 P.2d 794, 44 St.Rep. 1528; Gregory 

v. city of Forsyth (1980), 187 Mont. 132, 609 P.2d 248. Mere 

ignorance of the facts will not suffice to toll the statute 

of limitations. 

"He must show that the acts of fraud were committed 

under such circumstances that he would not be 

presumed to have knowledge of them, it being the 

rule that if he has 'notice or information of 

circumstances which would put him on inquiry which 

if followed would lead to knowledge, or that the 

facts were presurnptj.vel y within his knowledge, he 

will be fleemed to have actual knowledge of the 

facts. ' " 

Mobley v. Hall (1983), 202 Mont. 237, 232, 657 P.2d 604, 607 

(quoting Kerrigan v. O'Meara (1924), 71 Mont. 1,8, 237 P. 

819, 8321. As stated in Holman's brief to t-.his Court, "The 

gravamen of Mr. Holman's compl-aint is that Hansen engaged in 
a continuing fraudulent concealment of facts that disallowed 

Mr. Holman from truly ascertaining the extent of the fraud. " 

Holman thus relies on the doctrine of fraudulent 

concealment to toll the statute until 1985. Holman cites our 

definition of fraudulent concealment from E.W. v. D.C.H. 

(Mont. 1988), 754 P.2d 817, 821, 45 St.Rep. 778, 783: 

"Fraudulent concealment has been described as the 

employment of artifice, planned to prevent inquiry 

or escape investigation, and mislead or hinder 

acquisition of information disclosing a right of 

action. " 

(quoting Monroe v. Harper (1974), 164 Mont. 23, 28, 518 P.2d 

788, 790). We have previously held that in the context of 

non-malpractice negligence actions, invoking fraudulent 

concealment requires a showing of affirmative conduct by the 

defendant calculated to obscure the existence of the cause of 

action. Yellowstone, 741 P.2d at 798. Given our previous 

discussions of fraud, this rule applies with equal force to 

the case at hand. 

Holman first contends that the District Court "usurped" 

his right to a jury trial by resolving questions of fact in 

order to grant summary judgment. According to Hol-man , 

numerous issues of material fact existed as to when he knew, 

or should have known, that Hansen defrauded him. He cites 5 

28-2-404, MCA; and Jenkins v. Hillard (1382), 199 Mont. 1, 

647 P.2d 354, for the proposition that actual fraud is always 

a question of fact. While this is a correct statement of the 

law which would apply to the merits of this case, it 

sidesteps the threshold barrier of the statute of 

limitations. 

Under 5 27-2-203, MCA, whether there has been a 

"discovery" of facts sufficient to start the running of the 

statute of 1imi.tat.j.ons i,s a question of law. Mobley, 657 
P.2d at 607. Holman's fraud! claims were held to be barred 

under the statute of limitations because he discovered, or 

should have discovered by the use of his senses, the facts 

constituting the alleged Fraud more than two years prior to 

the filing of this suit. This was a question of law. The 

court did not "usurp" Holman's right to a jury trial. 

Holman's second argument asserts that Hansens are 

estopped from raising the statute of limitations as a defense 

hecause of George Hansen' s acts of fraudulent concealment. 

He relies on Reneco v. Cantrell (1977), 174 Mont. 130, 568 

P.?d 1225, which he asserts is factually similar to this 

case. In Keneco, the plaintiff and the defendant were 

president and vice president., respectively, of a small 

corporation. The two men held all of the corporation's 

stock. The plaintiff had been responsible for labor 

management and day-to-day operations, while the defendant had 

been responsible for bookkeeping an6 "business phases" of the 

corporation. 

A disagreement arose as to the distribution of several 

issuances of corporate stock. The plaintiff confronted the 

defendant with his belief that he was not receiving his fair 

share of the stock. The defendant replied by assuring the 

plaintiff that it was a bookkeeping matter, the defendant 

knew what he was doing and things would be straightened out; 

i.e., the defendant would "make things right." We concluded 

that the defendant's assurances had lulled the plaintiff into 

a false sense of security, which had led to his failure to 

initiate suit before the statute of limitations had run. We 

held that the plainti f f had established the necessary 

elements of estoppel to prevent the defendant from raising 

the statute of limitations as a defense. The plaintiff 

relied on the defendant's assurances (and presumably his 

superior bookkeeping knowledge? to his detriment. 
Holman argues that he was likewise assured by George 

Hansen that the problems he comp1-ained of cfould be made 

right. Holman argues that Hansen concealed defects in the 

premises through these assurances, and lulled Holman into an 

equally false sense of security. However, necessary elements 

of estoppel we found present in Keneco are not present in 

this case. 

In Keneco, we held that there had been conduct amounting 

to representation or concealment of material facts, and that 

the truth concerning these facts was unknown to the party 

claiming the henefit of the estoppel. In this case, Folman 

either knew or should have known the truth about the defects 

at issue here. In fact, the alleged assurances made by 

Hansen came in response to Holman's complaints about the 

defects. Holman's deposition testimony shows that by 1984, 

he had uncovered "a whole barrelful of problems just about 

any place you looked." He had sufficient information about 

any alleged misrepresentations made by George Hansen during 

their negotiations to have stated to Hansen in 1984 that the 

ranch did not have "10 percent of the assets you claimed it 

had. " 

Holman testified, and his counsel now argues, that 

George Hansen's fraud was not "fully ascertainable" until the 

spring of 1985. While this argument places Holman's fraud 

claims neatly within the statute of 1-imitations, it does not 

mesh with the law set out above. Holman admitted that the 

alleged misrepresentations were "in part ascertainable" prior 

to 1985. His deposition indicates that some were apparent as 

early as 1983. 

Holman has been licensed in Montana as an outfitter 

since 1957, and has owned other property in the Big Timber 

area for a number of years. His testimony shows his skilland experience in matters such as discerning the presence of 
game, the growth of noxious weeds and the average price of 

local real estate. Under the rules from the Yellowstone and 

h 

Moblev cases, Holman was on inquiry notice, and was required 

to exercise ordinary diligence to discover the facts 

constituting the fraud alleged here. Hal-man noticed problems 

before 1985 and did in fact investigate them. He is 

therefore "deemed to have actual knowledge of the facts" 

under Mobley, and is unable to establish the elements of 

estoppel. Furthermore, Holman has failed to establish 

fraudulent concealment. There has not been a showing of 

conduct by George Hansen "calculated to obscure the existence 

of the cause of action" as required under Yellowstone. The 

defects being complained of were apparent to IIolman. George 

Hansen may have attempted to placate Hol-man with assurances 

that all would. he made right, but he did not obscure Holman's 

cause of action. Holman's fraud-based claims are barred by 

the statute of Limitations. 

Lastly, Holman argues that the ~istrict Court was in 

error when it determined that his claims of misrepresentation 

were barred by the independent investigation clause found in 

the contract. We need not address this argument, having held 

that these claims are barred by the statute of limitations. 

We affirm the decision of the ~istrict Court on Holman's 

appeal.. 

11. Hansens' Cross-Appeal 

The ~istrict Court relied mainly on the terms of the 

contract for deed in deciding Hansens' counterclaim. Hansens 

were unable to convince the court that their alleged 

entitlement to the balance of the contract price overcame the 

contract's forfeiture clause, which reads in relevant part: 

IT IS FURTHER MUTUALLY UNDERSTOOD AND AGREEC 

b:7 and between the parties hereto that said forty 

(40) clays a~d ninety (PO) days is a reasonable and 
sufficient notice to be given to the said Party of 

the Second Part in case of his failure to perform 

any of the covenants on his part hereby made and 

entered into, and shall be sufficient to cancel all 

obligations hereunder on the part of the said 

parties of the First Part and fully reinvest them 

with all risht, <. title and interest hereby - aqreed - to 

be conveyed, and in case of such cancellation, the 

Party 7- of - the Second Part shall forfeit all 

made & --- him on this contract, and 7- all his right, 

title and! --- interest in bbuildlngs - or other 

improvements whatsoever, -- and such payments shall be 

retaixzc? -A-i-.-- bv t-rties of 7 the First Part in 

fu1.1 satisfaction --- and inidatlon -- 0x1 damages - 

them sustained . . . (Emphasis added.) 

Hansens' claim for the contract balance rested on this 

Court's decision in Glacier Campground v. Wild Rivers, Inc. 

(197E), 184 Mont. 543, 597 P.2d 689. In Glacier, we held 

that a seller under a contract for deed could pursue a remedy 

other than forfeiture and repossession as long as the 

contract did not preclude the remedy sought or provide that 

forfeiture and repossession was the exclusj-ve remedy for 

breach. 

On cross-appeal, Hansens again assert their enti tlement 

to seek specific performance (payment of the balance of the 

contract price) under the rule in Glacier. In response, 

Holman raises two arguments, one based on parol evidence and 

one based on the doctrine of election of remedies. We need 

not address the election of remedies issue, because parol 

evidence admissibl-e on this claim establishes the intent of 

the parties to this contract that specific performance would 

not be available to the Hansens. 

In Glacier, we allowed the seller to seek a remedy 

outside the contract in part because the forfeiture clause in 

that case was "on its face, ambiguous and uncertain" 

requiring recourse to rules of construction and extrinsic 

evidence to give it meaning. Glacier, 597 P.?d at 692. 
Hansens point out that the forfeiture clause in this case is 

very similar to that construed in Glacier, which by analogy 

should allow them to go outside the contract and seek 

specific performance. 

We noted in Glacier that a primary rule of contract 

construction is to give effect to the mutual intent of the 

parties. Glacier, 597 P.2d at 692; see S 28-3-301, MCA. 

Hansens placed the imperfections in the forfeiture clause in 

issue by seeking an alternative remedy based on Glacier. We 

are therefore able to look to extrinsic evidence in order to 

discover the mutual intent of Holman and the Hansens. 

Section 28-2-905, MCA. 

Holman placed two affidavits before the District Court, 

his own and that of the attorney representing him when the 

contract was negotiated, pointing out that George Kansen had 

requested a clause giving Hansens the right to seek specific 

performance. ~ccording to the affidavits, Holman rejected 

such a provision, and none was included in the contract. As 

the District Court stated in the explanatory comment to its 

order of April 6, 1988, these affidavits were not 

contradicted by Hansens. T+ is thus apparent that the mutual 

intent of these parties was that specific performance would 

not be a possible remedy under this contract. Hansens were 

precluded from pursuing that remedy. 

We affirm the decision of the District Court. d 

We Co cur I 

P $47 

Justice /' 
Mr. Justice John C. Sheehy did not participate.