No. 93-465 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1994 

EDWARD L. HOFMANN, JR., 

Plaintiff and Respondent, 

DAVID E. GEORGE and 

MARJORIE F. GEORGE, 

Defendants and Appellants. 

MARCH 3, 1994) 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Robert W. Holmstrom, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

Leo Graybill, Jr., Graybill, Ostrem & Crotty, 

Great Falls, Montana 

For Respondent: 

Pierre L. Bacheller, Pierre L. Bacheller, Inc., 

Billings, Montana 

Submitted on Briefs: February 10, 1994 

Decided: March 3, 1994 

Filed: 
Chief Justice J. A. Turnage delivered the Opinion of the Court. 

David E. George and Marjorie F. George (the Georges) appeal 

from a decision of the Thirteenth Judicial District Court, 

Yellowstone County. The court ruled that a buy and sell contract, 

wherein the Georges agreed to sell land to Edward L. Hofmann, Jr., 

was valid; the court further ordered specific performance of the 

contract. We affirm. 

The dispositive issue on appeal is rephrased as whether the 

District Court erred in determining that the parties' buy and sell 

contract was specifically enforceable. 

During 1992, the Georges sought to sell a tract of land they 

owned which is located between Billings and Laurel, Montana. The 

land was listed with area realtors, and realtor James Hoffman, 

located Edward L. Hofmann, Jr. (Hofmann) , as an interested buyer in 

June 1992. 

Hofmann made the Georges an offer to purchase the land for 

$160,000, and the Georges rejected the offer. Approximately one 

month later, however, the Georges approached Hofmann at Hofmannrs 

business address and asked if he was still interested in purchasing 

their land for $160,000. The Georges explained that their contract 

with the realtors had terminated, and they could now sell the land 

to Hofmann, avoiding $11,200 in realtor fees. 

Hofmann agreed to purchase the land under these conditions. 

Marjorie George picked up a buy and sell agreement at a local 

business, typed it out, and both parties signed it on July 29, 

2 
1992. The agreement provided, in relevant part, that payment was 

due as follows: 

$1,000.00 earnest money to be applied at closing . . . $159,000.00 balance of the purchase price will be paid as 

follows: proceeds from loan buyer is acquiring from 

First Federal Savings and Loan. Sale contingent upon 

buyer being able to obtain financing. 

The parties signed another, supplemental agreement on July 30, 

1992, which provided: 

DAVID D, and MARlORIE F, GEORGE (Sellers) agree to split 

with EDWARD L. HOFMANN, Jr. (buyer) any part of the 

$11,200 that is not paid to the realitors [sic] as 

commission at time of closing of the property at: 

4316 Christinson Rd., Billings, Montana 59101. 

/s/ Marjorie I?. George 

/s/ David D. George 

/s/ Edward L. Hofmann, Jr. 

Hofmann presented the Georges with a $1,000 personal check dated 

August 1, 1992. He asked the Georges to notify him when they 

planned to cash it in order to ensure that sufficient funds would 

be in his personal checking account. The Georges attempted without 

success to reach Hofmann; they did not cash the check. 

Instead, after the Georges had learned that realtors had 

initiated court proceedings to recover the $11,200 fee, the Georges 

asserted that the buy and sell agreement was invalid because the 

check was not valid earnest money. Additionally, the Georges 

asserted that the contract was not specifically enforceable because 

it was dependent upon Hofmann obtaining financing, and Hofmannls 

lending institution had yet to finalize the financing procedures. 
Hofmann asserted that the $1,000 check was valid earnest money 

and that the only reason financing had not been completed was 

because his lender's appraisal agent could not contact the Georges 

to make an appraisal appointment. Hofmann asserted that the 

appraiser felt he was "being avoided" by the Georges. The District 

Court agreed with Hofmann and ordered specific performance of the 

contract. The Georges appeal. 

Did the District Court err in determining that the partiest 

buy and sell contract was specifically enforceable? 

Reviewing this civil case tried by the court without a jury, 

we examine whether the court's findings of fact are clearly 

erroneous and whether its conclusions of law are correct. Steer, 

Inc. v. Dep't of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 

601, 603. 

The Georges make two attacks on the validity of the buy and 

sell agreement. First, they maintain that Hofmann's $1,000 earnest 

money check was insufficient because the check was not cashed, 

because Hofmann's personal checking account at times did not have 

sufficient funds to cover the check and because the check was not 

tendered at the time the parties signed the contract. Second, the 

Georges assert that the contract could not be specifically 

performed because Hofmann's lending institution failed to finalize 

the financing process by not performing an appraisal of the 

property. The Georgest arguments are without merit. 

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A personal check is valid consideration. See 5 28-2-801, MCA. 

Here, where the contract stated that "$1,000 earnest money" was due 

"to be applied at closing," Hofmann's check, rendered after the 

contract was signed, constituted valid consideration. 

The courts look to substance over form. Section 1-3-219, MCA. 

While normally the conditions of a contract which can be instantly 

performed are to be performed upon the signing of the contract 

unless otherwise specifically stated, see 3 28-3-601, MCA, here we 

conclude that the District Court did not err in determining that 

the parties intended to enter into a valid, binding contract at the 

time Hofmann tendered the $1,000 earnest money check to the 

Georges. See generally, Ragland v. Sheehan (1993), 256 Mont. 322, 

326-27, 846 P.2d 1000, 1003; Keesun Partners v. Ferdig Oil Co. 

(1991), 249 Mont. 331, 816 P.2d 417. Whether the Georges actually 

cashed the check is irrelevant to our review of its adequacy. 

Concerning their second argument, the Georges essentially 

attack the validity of the contract itself by attacking the court's 

authority to order specific performance. There is no dispute that 

the equitable remedy of specific performance may be had on a valid 

contract for the purchase and sale of real property. Section 27-1- 

411(2), MCA: see also Keaster v. Bozik (1981), 191 Mont. 293, 623 

P.2d 1376. 

Hofmann asserts that he obtained adequate financing and the 

only remaining event to occur in order to finalize the financing 

process is an appraisal of the Georges' property. The appraiser, 

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stated Hofmann, had tried to perform an appraisal with no success. 

In its findings of fact, the court noted that 

[alfter execution of the agreement to sell and purchase, 

[Hofmann] made application for a loan through First 

Federal Savings and Loan Association; as part of his loan 

application, he was requested to provide a profit and 

loss statement for his business; he employed an accountant to prepare such a statement at the cost of Six 

Hundred and No/lOOths Dollars ($600.00); he understood 

that the only thing left to be done with his loan 

application was to obtain an appraisal of the property; 

the appraiser employed by the lending institution called 

him and asked that he help make an appointment to 

appraise the property because the appraiser was unable to 

make arrangements for an appointment with the [Georges] 

for purposes of the appraisal. 

After reviewing the record, we conclude that Hofmann was "able 

to obtain financingw as required by the buy and sell agreement. We 

therefore hold that the District Court did not err in determining 

that the contract was valid and specifically enforceable. See 

Larson v. Undem (1990), 246 Mont. 336, 805 P.2d 1318. 

Affirmed. 

We concur: 
March 3, 1994 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the 

following named: 

Leo Graybill, Jr. 

Graybill, Ostrem & Crotty 

#18 Sixth St. No., Ste. 200 

Great Falls. MT 59401 

Pierre L. Bacheller, Esq. 

Pierre L. Bacheller, Inc. 

P.O. Box 2078 

Billings, MT 59103-2078 

ED SMITH 

CLERK OF THE SUPREME COURT 

ST'4TE OF MONTANA 
October 20. 1994 

CERTIFICATE OF SERVICE 

1 hereby certify that the following certified order was sent by United States mail, prepaid, to the 

following named: 

Leo Graybill, Jr. 

Graybill, Ostrem & Crotty 

#18 Sixth St. No., Ste. 200 

Great Falls, MT 59401 

Kenneth R. Neil1 

LARSEN & NEILL 

Box 1692 

Great Falls MT 59403-1692 

Pierre L. Bacheller, Esq. 

Pierre L. Bacheller, Inc. 

P.O. Box 2078 

Billings, MT 59103-2078 

ED SMITH 

CLERK OF THE SUPREME COURT 

ST.4TE !X MONTANA