No. 12808 INTHE 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 SixthJudicial 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 251975 Filed:

## jqp~ 

## %51975Mr. Justice Gene B. Daly delivered the Opinion of the Court,

This 

### is an appeal from a judgment entered in the district court, SweetaassCounty, denying plaintiff specific performance for an allegedbreach of contract because of defendants' failure to selltheir ranch to plaintiff after execution of a buy-sell agreement. On September 23, 1970, defendants Stanley and Ann Stenberg, hereinafter referred toas sellers, listed their ranch consisting of approximately 315 acres located west of Big Timber, Montana, for salewith real estatebroker Harold Mjolsness, hereinafter referred to asrealtor, for the price of $70,000. The listingexpiredMarch 

### 1, 1971. With the consent of sellers, therealtor 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 toas purchaser, decided to settleinMontana 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 inpart: 1) The purchaser pay a $1,000 deposit as earnest money and

aspart payment of the purchase price of $75,000. The balance in the amount of $74,000 tobe paid $1,000 on orbefore August 7, 1972, and additional payments each month until purchaser had paid a total of $15,000, on orbefore January 

### 1, 1973, Purchaser thereafter to make annual payments of $6,000 which willinclude interest atthe current rate charged by the federal land bank for the duration of the contract a period of fifteenyears, and, atthat time theunpaid balance willbe due and payable inone 

### sum.2) A legal description of the land purchased, including allrecorded water rights; sellers toretain one-half of the existing mineral rights and purchaser the remaining one-half, until final payment. Upon finalpayment sellers agreed torelease allmineral rights to purchaser. 

### 3) Allirrigation fixtures, heating fixtures and equipment, including water heaters etc., were tobe left as part of the property purchased. 

### 4) Sellers attheir expense shall furnish an abstract of title or attheir option title insurance showing merchantable title vested in sellers, free and clear of allliens and encumbrances, with no exceptions. 

### 5) The realproperty was tobe conveyed by warranty deed and personal property by billof sale, free and clear of allencumbrances, except zoning reservations in the federal patent, 

### 6) Sellers shallpay alltaxes for 1972 and prior years. Purchaser shallpay alltaxes and assessments thereafter. Encumbrances may be paid out of purchase priceby sellers atthe date of closing. 7) Time 

### is of the essence and purchase rights arenot assignablewithout written consent of sellers. 8) Sellers agreed toremove allold machinery before possession date.9) Sellers agree to transfer present private leases [including the description] topurchaser atthe time of closing sale. 10) Harold Mjolsness is agent for sellers and sellers agree toconvey topurchaser the property described and on the 

### terms contained in the agreement. Sellers agree topay their agent $2,500 for services rendered in the transaction, and further provided: 

# "* fc 2k 1/we authorize said agent topay out of the cash proceeds of salethe 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 toenter into any other contract agreement atany future time. The agreement, in fact, recites as it relates topurchaser and oral promises, that the purchaser enters into this agreement in fullreliance upon his independent investigation and judgment. There areno verbal or other agreements which modify or affect thebuy-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 attorneybut hired 

### Mr. Richard Heard of Columbus, Montana, to prepare a contract for deed, because relator's regular attorneywas not satisfactory to sellers. In November 1972, purchaser returned toMontana and met with sellers and

, inMr. ~eard's law office todiscuss terms and refinements tobe included in a formal contract for deed tobe prepared by Heard. Atthis meeting purchaser ,offered topay the remaining balance on thebuy-sell agreement, but was requested by sellers towithhold 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 tothe tax problem, but maintained the money could have been placed in escrow. In any event, the parties agreed thenew date for payment of the $14,000 tobe January 

### 5, 1973. Atthis point the partieswere left aloneby 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 Californiawhere itwas signed by him on December 11, 1972. In order toconstruct a home on the ranch, purchaser*needed five acres released tohim to satisfy the financial arrangements for the home. Sellers refused to sign the contract for deed becausethe urovision granting the fiveacres topurchaser on closing

was unacceptable to them. Purchaser was so informed by telephone

on December 9, 1972. An amendment tothe contract was prepared, but sellers continued to object toany release of five acres prior
to payment of a more substantial sum than the $15,000 down payment. Atthis point therewere several telephone callsbetween relator and purchaser concerning the $14,000 due on January 5, 1973, under thebuy-sell agreement. Purchaser testified he had nothing in hand ardno titlereport, etc., and therefore he chose tocome toMontana and close the matter personally, but did not arrive in time tomake the payment on January 

### 5, 1973. On January 

### 8, 1973, sellers requested realtor tonotify 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 inMontana 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.Il Purchaser and realtor testified that on January 19, 1973, the parties were tomeet inrealtor's officebut sellers excused their absence due to cattlebeing out, etc. Purchaser and realtor finally went tothe ranch late in the afternoon of the same day and sellers explained they had to see about financing inBozeman and could not close the deal atthat time. Sellers maintain they told purchaser and realtor the "deal was off", yet, sellers came to another meeting the evening of the 19thatrealtor's office. Another conference was had then between the parties, but no positive results

came of the meeting. Purchaser returned toCalifornia 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 sittingwithout 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.

rIThat, in any event, the Plaintiff abandoned the BuySellAgreement by failingto pay the balance of the down payment as initiallyagreed; by insistingupon the release provision, which materially changed the agreement; and, finally, by failing topay the down payment or tocome toMontana toresolve matters on orbefore January 

### 5, 1973." On appeal, the controlling issues are: (1) Was thebuy-sell agreement a binding and enforceable contract? (2) If so, does the purchaser's breach prevent recovery? (3) Was thebuy-sell agreement abandoned by the purchaser? The realtor involved inthis transaction was the agent of sellers. Hisagency is express and contained in the contract document. His authority to disburse funds 

### is expressly given and he would have apparent authority toreceive the purchase price. 12Am 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. Hisagency statuswas not questioned in the record. Sellers citeDineen v. Sullivan, 123Mont. 

### 195, 213 P.2d 241,

as principal authority in support of their argument that the nine essential elements inDineen that were not included in the memorandum in that case, constituted some kind of guide as to the requirements necessary tohave an enforceable memorandum. They ask this Court to make these comparisons with thebuy-sell agreement in the instant

case and somehow use the proposed contract for deed here as a control reference. Sellershave misread Dineen and the holding therein. Dineen is distinguishable in several respects. It involved an admittedly bland agreement to selland purchase real property which contained

an agreement toenter 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 towriting 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 trialcourt sustained a "demurrer" to the complaint and 

### itsjudgment was appealed. This Court merely reviewed the law of contracts inWilliston 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 everywritten contract presupposed a prior verbal agreement, the writing 

### is the evidence of that agreement and must contain the essentialexecutory oral agreements of the parties or itwillnot be enforced. The Court held that the complaint on itsface demonstrated the memorandum did not contain allof the parties' essential verbal agreements therefore the complaint was defective on its face and subject todemurrer. The Court sustained thejudgment of the trialcourt and in essence the causewas dismissed. The agreements of the parties contained in or left out of the memorandum inDineen were never discussed in the context of requirements toconstitute 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 tothebuy-sell agreement. They plead bad faith and fraud in theNovember 1972 tender. They considered the agreement terminated, and "did enter intonew 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 toby the sellers. Sub-sequently sellers tried their case on the same theory. It would be somewhat difficult on appeal toadopt 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 todetermine if thebuy-sell agreement in this cause 

### is

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

### 96, 106, 313 P.2d 1014, cited by both parties. Steen concerns a leasewith option tobuy containing two plans of payment, one for rent and the other for down payment to exercise an option topurchase. 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 thebuy-sell agreement under consideration here. The Court in Steen first draws the distinction that tobe enforced in equity a contract must be one wherein the parties intend to setdown the essential elements of a contract for the purchase and saleof realty and not



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

### is intended tobe a binding contract and a more formal agreement is contemplated in the future, equity

### willgrant specific performance of the less formal instrument. The Court then went on to say: 

### "*

# ** It 

### is of course well-settled that a contract tobe specifically enforceable must be complete and certaini n a l lessentialmatters included within 

### its scope. Nothing ,must be left toconjecture or surmise, orbe so vague as tomake it impossible for the court toglean 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 inevery detail is not a prerequisite of specific performance, only reasonable certainty and completeness being required. Those matters which are merely subsidiary, collateral, orwhich go to the performance of the contract arenot essential, and therefore need not be expressed in the informal agreement. [Citations]

"fc 9; *The defendant stressed the fact therewas no mention of taxes, interest, security, acreage tobe planted or time of performance. However there aremany cases holding that these are a11collateral matters which arenot essential to the validity of the contract. [Citations]" (Emphasis ours).A close examination of the buy-sell agreement involved here revealsby its terms, that allof the agreed provisions arecontained therein. The conduct of the parties, the admissions in the pleadings, the trialrecord, 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 essentialmatters, 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 allegedbreach in so far as it would prevent recovery based on not having made final payment on orbefore January 

### 5, 1973, "time being the essence of the contract1', Reviewing the conduct of the parties: keeping inmind that purchaser had a problem liquidatinghis business and selling his home in California, that purchaser promptly proceeded todo so after execution of thebuy-sell agreement, 

### He came back to Montana in November 1972 and was led tobelieve that thesenegotiations would lead to a more formal contract for deed. Atthat time purchaser offered to pay the entire $14,000 but consented to another date to accommodate sellers. It was conceded attrial that purchaser had the abilitytopay. Purchaser returned toCalifornia and executed there the new contract when itwas presented. Purchaser was then advised the sellersrefused to enter into the contract for deed based on the five acre release provision. Sellers1agent assured purchaser the contract could be and would be amended, and an agreement would be reached, Thereafter, purchaser was pressed tomake 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 tocome toMontana with a new truck, purchased for the ranch operation and loaded with furniture, to personally close the deal. Allparties knew purchaser was enroute and purchaser was never advised not toproceed, or that the contract

was considered cancelledby sellers.There is a dispute as towhat was said atthe ranch the day the ~arties met there, but they continued tonegotiate the same

~ evening on the contract for deed. Purchaser had alreay tendered the $14,000 cashier's check torealtor and itwas accepted by him. No instructions toreturn the money were given realtorby 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. Sellerskept pressing for payment which resulted inbringing purchaser toMontana, again. The record reveals realtor had difficultywith sellerswhen sellerswere asked toproduce merchantable title evidence. As a matter of fact, neither sellersnor their agent ever produced evidence of good titleforpurchaser, even though the contract required sellers to furnish such evidence. Considering purchaser's change of position tohis detriment, and constant urging and assurances given by sellers' agent and sellers' failure to advise purchaser tothe contrary or put purchaser on notice, sellerswould be estopped not to comply with the contract. This would be particularly true after accepting payment. 17Am Jur 2d, Contracts $ 9. So far as the latepayment 

### isconcerned Brown v. Griffin, 150 Mont. 

### 498, 505, 436 P.2d 695, examined 

### a contractwith the identical wording on furnishing of titleby the seller and the identical language "Time is of the essence". It further concerned making of

a final payment under thebuy-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 titleinsurance, a reasonable timewillbe 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 shallbe furnished without specifying a particular time 

### isconstrued torequire such abstract as a condition precedent toany 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

casewould be open tono other suggestion than the latepayment

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 latepayment excused, thejudgment of the trialcourt is reversed and thebuy-sell agreement is ordered enforced by a decree of specific performance. The contract fordeed 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 inconsistentwith this opinion.

Justice

We Concur:

4"

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## ---------------.---------------- ' Chief Justice



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