### 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 theThirteenthJudicial District, In and for the County of Yellowstone, TheHonorableRobert W. 

### Holmstrom, Judgepresiding.

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 hewas 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, 21992. The agreement provided, in relevant part, that payment was due as follows: $1,000.00 earnest money to be applied at closing 

# . . . $159,000.00balance of thepurchase 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 courtproceedings 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 contractwasnot specifically enforceable because it was dependent upon Hofmann obtaining financing, and Hofmannls lending institutionhad yet to finalize the financingprocedures.Hofmann asserted that the $1,000 checkwas valid earnestmoney 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 felthe 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 Georgestarguments are without merit. 4A personal check isvalid 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 theparties 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 thevalidity of the contract itselfby attacking the court's authority to order specific performance. There is no dispute that the equitable remedy of specificperformance

### 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, 5stated Hofmann, had tried to perform an appraisal with no success. In its findings of fact, the court noted that [alfterexecution of the agreement to sell and purchase, [Hofmann] made application for a loan through First Federal Savings and LoanAssociation; aspart 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 theproperty because theappraiserwas unable to make arrangements for an appointment with the [Georges] for purposes of the appraisal. After reviewing the record,we conclude that Hofmannwas "able to obtain financingwas required by thebuy 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 CERTIFICATEOFSERVICE 

### Ihereby certifythat the followingorderwas sent by 

### United Statesmail,prepaid, to the followingnamed:



### LeoGraybill,Jr. Graybill,Ostrem&

### Crotty #18 

### SixthSt.No., Ste.200 GreatFalls.MT 59401 PierreL.Bacheller,

### Esq. Pierre

### L.Bacheller,Inc. P.O. Box2078 Billings,

### MT 59103-2078

EDSMITH CLERKOFTHESUPREME COURT ST'4TE OFMONTANAOctober20. 1994 CERTIFICATEOFSERVICE 1hereby certifythatthe following certified orderwas sentby United States mail, prepaid, to the followingnamed: Leo Graybill,Jr. Graybill, Ostrem&Crotty #18 SixthSt. No., Ste.200 Great Falls,MT 59401 Kenneth R. Neil1 LARSEN & NEILL Box 1692 Great Falls MT 59403-1692
PierreL. Bacheller, Esq. PierreL. Bacheller,Inc. P.O. Box2078 Billings,MT 59103-2078

ED SMITH CLERKOFTHESUPREMECOURT ST.4TE !XMONTANA