No. 12808 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1975 

ROY A. MAXTED, 

Plaintiff and Appellant, 

STANLEY STENBERG, 

Defendants and Respondents. 

Appeal from: District Court of the Sixth Judicial District, 

Honorable Jack D. Shanstrom, Judge presiding. 

Counsel of Record : 

For Appellant : 

Grant and Heard, Columbus, Montana 

Richard W. Heard argued, Columbus, Montana 

Berger, Anderson, Sinclair & Murphy, Billings, 

Montana 

Richard W. Anderson argued, Billings, Montana 

For Respondents : 

Huppert and Swindlehurst, Livingston, Montana 

Joseph T. Swindlehurst argued, Livingston, Montana 

0. J. Paulson, Big Timber, Montana 

Submitted : January 13, 1975 

Decided : gg>W 2 5 1975 

Filed : jqp~ % 5 1975 
Mr. Justice Gene B. Daly delivered the Opinion of the Court, 

This is an appeal from a judgment entered in the district 

court, Sweetaass County, denying plaintiff specific performance 

for an alleged breach of contract because of defendants' failure 

to sell their ranch to plaintiff after execution of a buy-sell 

agreement. 

On September 23, 1970, defendants Stanley and Ann Stenberg, 

hereinafter referred to as sellers, listed their ranch consisting 

of approximately 315 acres located west of Big Timber, Montana, for 

sale with real estate broker Harold Mjolsness, hereinafter referred 

to as realtor, for the price of $70,000. The listing expired March 

1, 1971. With the consent of sellers, the realtor continued to show 

the property to interested parties but was unable to find a buyer, 

In the summer 1972, plaintiff Roy Maxted, a resident of the 

state of California, hereinafter referred to as purchaser, decided 

to settle in Montana and purchase a ranch. He inquired of the 

realtor and was advised that sellers' ranch was on the market. After 

negotiations, a buy-sell agreement was executed on July 7, 1972, by 

purchaser and realtor, and by sellers on August 3, 1972. The 

agreement provided in part: 

1) The purchaser pay a $1,000 deposit as earnest money and 

as part payment of the purchase price of $75,000. The balance in 

the amount of $74,000 to be paid $1,000 on or before August 7, 1972, 

and additional payments each month until purchaser had paid a total 

of $15,000, on or before January 1, 1973, Purchaser thereafter to 

make annual payments of $6,000 which will include interest at the 

current rate charged by the federal land bank for the duration of 

the contract a period of fifteen years, and, at that time the unpaid 

balance will be due and payable in one sum. 
2) A legal description of the land purchased, including 

all recorded water rights; sellers to retain one-half of the 

existing mineral rights and purchaser the remaining one-half, 

until final payment. Upon final payment sellers agreed to release all mineral rights to purchaser. 

3) All irrigation fixtures, heating fixtures and equipment, 

including water heaters etc., were to be left as part of the property purchased. 

4) Sellers at their expense shall furnish an abstract of 

title or at their option title insurance showing merchantable title 

vested in sellers, free and clear of all liens and encumbrances, 

with no exceptions. 

5) The real property was to be conveyed by warranty deed and 

personal property by bill of sale, free and clear of all encumbrances, 

except zoning reservations in the federal patent, 

6) Sellers shall pay all taxes for 1972 and prior years. 

Purchaser shall pay all taxes and assessments thereafter. Encumbrances may be paid out of purchase price by sellers at the date 

of closing. 

7) Time is of the essence and purchase rights are not assignable without written consent of sellers. 

8) Sellers agreed to remove all old machinery before possession 

date. 

9) Sellers agree to transfer present private leases [including 

the description] to purchaser at the time of closing sale. 

10) Harold Mjolsness is agent for sellers and sellers agree 

to convey to purchaser the property described and on the terms contained in the agreement. Sellers agree to pay their agent $2,500 

for services rendered in the transaction, and further provided: 

"* fc 2k 1/we authorize said agent to pay out of the cash 

proceeds of sale the expense of furnishing evidence of 

title, of recording fees and revenue stamps, if any, as 

well as any encumbrances on said premises payable by me at/or 

before closing.* * 9:" 
There was no provision in this buy-sell agreement to enter into 

any other contract agreement at any future time. The agreement, 

in fact, recites as it relates to purchaser and oral promises, 

that the purchaser enters into this agreement in full reliance 

upon his independent investigation and judgment. There are no 

verbal or other agreements which modify or affect the buy-sell 

agreement. 

Following the execution of the buy-sell agreement purchaser 

sold his home and liquidated his construction business in California. 

The realtor did not use his regular attorney but hired Mr. 

Richard Heard of Columbus, Montana, to prepare a contract for deed, 

because relator's regular attorney was not satisfactory to sellers. 

In November 1972, purchaser returned to Montana and met with 

sellers and , in Mr. ~eard's law office to discuss terms and 

refinements to be included in a formal contract for deed to be 

prepared by Heard. At this meeting purchaser ,offered to pay the 

remaining balance on the buy-sell agreement, but was requested by 

sellers to withhold payment until after January 1, 1973, because 

of sellers' tax problems for 1972. In court, sellers did not 

directly admit making this request, but neither did they deny it 

completely. They allowed as to the tax problem, but maintained 

the money could have been placed in escrow. In any event, the parties agreed the new date for payment of the $14,000 to be January 

5, 1973. 

At this point the parties were left alone by the attorney to 

discuss and agree on the terms of the proposed contract. After an 

hour he returned to the conference room and discussed the oral 

agreement. Thereafter, he prepared a contract for deed, submitted 

to the purchaser in California where it was signed by him on 

December 11, 1972. 

In order to construct a home on the ranch, purchaser*needed 

five acres released to him to satisfy the financial arrangements 

for the home. Sellers refused to sign the contract for deed because 
the urovision granting the five acres to purchaser on closing 

was unacceptable to them. Purchaser was so informed by telephone 

on December 9, 1972. An amendment to the contract was prepared, 

but sellers continued to object to any release of five acres prior 

to payment of a more substantial sum than the $15,000 down payment. 

At this point there were several telephone calls between 

relator and purchaser concerning the $14,000 due on January 5, 

1973, under the buy-sell agreement. Purchaser testified he had 

nothing in hand ardno title report, etc., and therefore he chose 

to come to Montana and close the matter personally, but did not 

arrive in time to make the payment on January 5, 1973. 

On January 8, 1973, sellers requested realtor to notify purchaser "to get some money up here so that I know they were going to 

go through with this". Purchaser, driving a truckload of furniture, 

arrived in Montana on January 19, 1973. He tendered a cashier's 

check for $14,000 to sellers' agent, who accepted the check although 

sellers apparently considered "the deal was off. I l 

Purchaser and realtor testified that on January 19, 1973, the 

parties were to meet in realtor's office but sellers excused their 

absence due to cattle being out, etc. Purchaser and realtor finally 

went to the ranch late in the afternoon of the same day and sellers 

explained they had to see about financing in Bozeman and could not 

close the deal at that time. Sellers maintain they told purchaser 

and realtor the "deal was off", yet, sellers came to another 

meeting the evening of the 19th at realtor's office. Another conference was had then between the parties, but no positive results 

came of the meeting. 

Purchaser returned to California and had a written demand 

served on sellers, which was refused. Subsequently purchaser 

brought the instant action for specific performance which was 

tried to the court sitting without a jury. The court denied 

purchaser relief and in its conclusions of law stated in part: 
"That the Buy-Sell Agreement constituted an agreement 

to enter into a contract in the future and was not an 

enforceable contract. 

r I That, in any event, the Plaintiff abandoned the BuySell Agreement by failing to pay the balance of the 

down payment as initially agreed; by insisting upon 

the release provision, which materially changed the 

agreement; and, finally, by failing to pay the down 

payment or to come to Montana to resolve matters on 

or before January 5, 1973." 

On appeal, the controlling issues are: 

(1) Was the buy-sell agreement a binding and enforceable 

contract? 

(2) If so, does the purchaser's breach prevent recovery? 

(3) Was the buy-sell agreement abandoned by the purchaser? 

The realtor involved in this transaction was the agent of 

sellers. His agency is express and contained in the contract 

document. His authority to disburse funds is expressly given and 

he would have apparent authority to receive the purchase price. 

12 Am Jur 2d Brokers $81, p. 833. His agency expressly went beyond 

the mere act of finding a purchaser. This agency had not been 

revoked or expired during the times pertinent to this matter. 

His agency status was not questioned in the record. 

Sellers cite Dineen v. Sullivan, 123 Mont. 195, 213 P.2d 241, 

as principal authority in support of their argument that the nine 

essential elements in Dineen that were not included in the memorandum 

in that case, constituted some kind of guide as to the requirements 

necessary to have an enforceable memorandum. They ask this Court 

to make these comparisons with the buy-sell agreement in the instant 

case and somehow use the proposed contract for deed here as a 

control reference. 

Sellers have misread Dineen and the holding therein. Dineen 

is distinguishable in several respects. It involved an admittedly 

bland agreement to sell and purchase real property which contained 

an agreement to enter into a formal contract containing the terms 

agreed upon by the parties and designated an attorney to prepare the 

formal contract document. 
In Dineen the amended complaint plead eight essential elements 

of the oral agreement that were reduced to writing and contained in 

the memorandum. In the complaint in Dineen plaintiff plead nine 

essential elements orally agreed upon but not contained in the 

memorandum agreement. The trial court sustained a "demurrer" to 

the complaint and its judgment was appealed. This Court merely 

reviewed the law of contracts in Williston on Contracts 2d Ed.; 

specific performance contained in Pomeroy's Work Specific Performance of Contracts, 3rd Ed.; Restatement of the Law of Contracts; 

and case authority. It then concluded that every written contract 

presupposed a prior verbal agreement, the writing is the evidence 

of that agreement and must contain the essential executory oral 

agreements of the parties or it will not be enforced. The Court 

held that the complaint on its face demonstrated the memorandum did 

not contain all of the parties' essential verbal agreements therefore the complaint was defective on its face and subject to demurrer. 

The Court sustained the judgment of the trial court and in essence 

the cause was dismissed. 

The agreements of the parties contained in or left out of the 

memorandum in Dineen were never discussed in the context of requirements to constitute a valid or an enforceable contract in specific 

performance. The question there decided was ---Did it contain the 

essential elements of the verbal agreements of the parties in that 

case? 

On this point in the instant case, sellers in their answer and 

counterclaim did not plead this defense to the buy-sell agreement. 

They plead bad faith and fraud in the November 1972 tender. They 

considered the agreement terminated, and "did enter into new negotiations for the sale of the same property * Jc *. ''(Emphasis ours). 

~he'hew negotiations" refer to the contract for deed negotiations. They allege they did not sign the contract for deed because 

it contained a five acre release not agreed to by the sellers. Sub- 
sequently sellers tried their case on the same theory. It would be 

somewhat difficult on appeal to adopt the rationale of Dineen, even 

ii permitted under Rule 8(c), M.R.Civ.P. 

: A much better reasoned case for the proposition we 

must face to determine if the buy-sell agreement in this cause is 

an enforceable contract is Steen v. Rustad, 132 Mont. 96, 106, 

313 P.2d 1014, cited by both parties. 

Steen concerns a lease with option to buy containing two 

plans of payment, one for rent and the other for down payment to 

exercise an option to purchase. If the down payment plan was 

selected a contract would be drawn at that time and contain the 

terms statdin the memorandum in the lease-option agreement. Those 

terms were in less detail than those contained in the buy-sell 

agreement under consideration here. The Court in Steen first 

draws the distinction that to be enforced in equity a contract 

must be one wherein the parties intend to set down the essential 

elements of a contract for the purchase and sale of realty and not 

a contract to agree on these terms in the future. Then, assuming 

it is intended to be a binding contract and a more formal agreement 

is contemplated in the future, equity will grant specific performance of the less formal instrument. The Court then went on to say: 

"* * * It is of course well-settled that a contract 

to be specifically enforceable must be complete and 

certain i n a l l essential matters included within its 

scope. Nothing ,must be left to conjecture or surmise, 

or be so vague as to make it impossible for the court 

to glean the intent of the parties from the instrument, 

or the acts sought to be enforced. [Citations] 

"It is equally well-settled that absolute certainty and 

completeness in every detail is not a prerequisite of 

specific performance, only reasonable certainty and 

completeness being required. Those matters which are 

merely subsidiary, collateral, or which go to the performance of the contract are not essential, and therefore 

need not be expressed in the informal agreement. [Citations] 

"fc 9; *The defendant stressed the fact there was no mention 

of taxes, interest, security, acreage to be planted or time 

of performance. However there are many cases holding that 

these are a11 collateral matters which are not essential 

to the validity of the contract. [Citations]" (Emphasis ours). 
A close examination of the buy-sell agreement involved here 

reveals by its terms, that all of the agreed provisions are contained therein. The conduct of the parties, the admissions in 

the pleadings, the trial record, and the fact the agreement was 

prepared by the sellers' agent leaves no doubt that it contained 

che oral agreements of the parties and is complete and certain in 

all essential matters, as required under Montana law, and is therefore enforceable by specific performance. 

Issues 2 and 3 concern alleged abandonment by the purchaser and 

~urchaser's alleged breach in so far as it would prevent recovery 

based on not having made final payment on or before January 5, 1973, 

"time being the essence of the contract1', 

Reviewing the conduct of the parties: keeping in mind that 

purchaser had a problem liquidating his business and selling his 

home in California, that purchaser promptly proceeded to do so after 

execution of the buy-sell agreement, He came back to Montana in 

November 1972 and was led to believe that these negotiations would 

lead to a more formal contract for deed. At that time purchaser 

offered to pay the entire $14,000 but consented to another date to 

accommodate sellers. It was conceded at trial that purchaser had 

the ability to pay. Purchaser returned to California and executed 

there the new contract when it was presented. Purchaser was then 

advised the sellers refused to enter into the contract for deed 

based on the five acre release provision. Sellers1 agent assured 

purchaser the contract could be and would be amended, and an agreement would be reached, Thereafter, purchaser was pressed to make 

the $14,000 payment due under the only contract he had, the buy-sell 

agreement. Purchaser complained he had no title assurance and was 

somewhat leery. He decided to come to Montana with a new truck, 

purchased for the ranch operation and loaded with furniture, to 

personally close the deal. All parties knew purchaser was enroute 

and purchaser was never advised not to proceed, or that the contract 

was considered cancelled by sellers. 
There is a dispute as to what was said at the ranch the day 

the ~arties met there, but they continued to negotiate the same ~ 

evening on the contract for deed. Purchaser had alreay tendered 

the $14,000 cashier's check to realtor and it was accepted by him. 

No instructions to return the money were given realtor by sellers 

until purchaser had returned to California. 

There is no evidence in the record that purchaser ever intended to abandon the contract nor for that matter the sellers. 

Sellers kept pressing for payment which resulted in bringing purchaser to Montana, again. The record reveals realtor had difficulty with sellers when sellers were asked to produce merchantable 

title evidence. As a matter of fact, neither sellers nor their 

agent ever produced evidence of good title for purchaser, even 

though the contract required sellers to furnish such evidence. 

Considering purchaser's change of position to his detriment, 

and constant urging and assurances given by sellers' agent and 

sellers' failure to advise purchaser to the contrary or put purchaser on notice, sellers would be estopped not to comply with the 

contract. This would be particularly true after accepting payment. 

17 Am Jur 2d, Contracts $ 9. 

So far as the late payment is concerned Brown v. Griffin, 150 

Mont. 498, 505, 436 P.2d 695, examined a contract with the identical 

wording on furnishing of title by the seller and the identical 

language "Time is of the essence". It further concerned making of 

a final payment under the buy-sell agreement. It is identical to 

the instant case insofar as language is concerned. In Brown 

the Court explained that under a contract which does not expressly 

provide for the time of performance of sellers' agreement to furnish 

an abstract or title insurance, a reasonable time will be implied. 

The Court then said: 

"9: * 9: What is a reasonable time in a given case 

depends upon the totality of the surrounding circumstances. As a general rule a contract that an 

abstract showing merchantable title shall be furnished without specifying a particular time is construed to require such abstract as a condition precedent to any liability of the purchaser to pay for the 

property. (55 Am.Jur., Vendor & Purchaser, 5 293, p. 

732, and 310, p. 742; 91 C.J.S. Vendor & Purchaser, 

5 100 (b) (1) , pp. 990,991. )* * *". 
A totality of the surrounding circumstances in the instant 

case would be open to no other suggestion than the late payment 

was excused under Brown, aside from a waiver of late payment by 

acceptance of the payment by the sellers' agent. 

Therefore, with a finding of an enforceable buy-sell agreement, never abandoned, and late payment excused, the judgment of 

the trial court is reversed and the buy-sell agreement is ordered 

enforced by a decree of specific performance. 

The contract for deed was never agreed upon or executed and it 

is of no force or effect. 

The cause is remanded to the district court for further proceedings not inconsistent with this opinion. 

Justice 

We Concur: 

4" 

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Chief Justice 

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Justices.