No. 81-297 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1981 

PONDEROSA PINES RANCH, INC., 

a Mont. corp., 

Plaintiff and Appellant, 

STANLEY W. McBRIDE, 

Defendant and Respondent. 

Appeal from: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, The Honorable 

W. W. Lessley, Judge presiding. 

Counsel of Record: 

For Appellant: 

Landoe, Brown, Planalp, Kommers & Lineberger, 

Bozeman, Montana 

For Respondent: 

Bennett & Bennett, Bozeman, Montana 

Submitted on Briefs: December 3, 1981 

Decided: March 25, 1982 

Filed: 

MAR 2 5 1982 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

Ponderosa Pines Ranch, Inc. appeals from a judgment 

in the Eighteenth Judicial District, Gallatin County, dismissing its complaint seeking cancellation of a land sale 

contract with Stanley ~cBride. 

On July 24, 1978, the parties entered into a sales 

contract under which McBri.de was to purchase a tract of land 

from Ponderosa. The contract provided: 

"Time is of the essence of this contract. In the 

event the buyer shall fail to pay any installment 

as and when due, the Seller shall, 45 days or 

more thereafter, have the right to cancel this 

contract by notice thereof mailed by registered 

or certified mail to the Buyer . . ." 

On February 6, 1981, Ponderosa filed its complaint 

alleging that McBride was a year behind in his monthly 

payments and that he had been sent notice of the default. 

Ponderosa demanded that the District Court order the cancellation 

of the contract, remove the contract as a cloud on Ponderosa's 

title, require McBride to vacate the premises, and decree 

that Ponderosa had title to the property. 

On February 24, 1981, McBride filed a motion to dismiss 

on the ground that. the complaint failed to state a claim 

upon which relief could be granted. The motion was not 

accompanied by a brief and was not ruled on by the District 

Court. 

On March 4, 1981, McBride filed a notice of tender with 

the District Court, accompanied by a certified check for 

$5,308.48, representing the full sum due and owing plus 

interest. That same day McBride filed a motion to dismiss 

on the ground that all sums due and owing Ponderosa had 

been tendered by deposit with the Clerk of the District 
Court. The motion to dismiss included notice to Ponderosa 

that McBride would present the motion to the District Court 

on March 16, 1981, at 10:OO a.m. No brief was filed by 

McBride in support of this motion to dismiss. 

The hearing was held as scheduled on March 16, 1981. 

McBride's counsel was present, but neither Ponderosa nor its 

counsel attended. The District Court granted McBride's 

motion to dismiss on March 18, 1981, and ordered: (1) that 

Ponderosa's action be dismissed with prejudice; (2) that the 

amount tendered by McBride be delivered to Ponderosa in 

satisfaction of all amounts due and owing Ponderosa in the 

transaction; and, (3) that Ponderosa deliver to McBride a 

warranty deed to the property. Ponderosa moved to amend its 

complaint on April 2, 1981, and a hearing on the motion was 

held on April 13, 1981. The District Court did not specifically 

rule on this motion, but the amended complaint was never 

filed. At the hearing, Ponderosa indicated that it had not 

been served with a copy of the District Court's order of 

March 18, 1981. Ponderosa subsequently submitted an affidavit 

to that effect, and on April 16, 1981, filed a motion to set 

aside the order of the court and allow plaintiff to file an 

amended complaint. The motion was argued on May 11, 1981. 

In an order filed May 12, 1981, the District Court denied 

Ponderosa's motion. The order contains the following statement: 

"The Court does not file a Memorandum here. The 

Defendant's brief in opposition sets out in 

chronological order the events concerning the 

matter before the court. It also cites the law, 

and I think properly the conclusion, therefore, I 

do not file my own Memorandum in this instance." 

Ponderosa appeals from the dismissal order of March 18, 

and from that portion of the May 12 order refusing to set 

aside the dismissal. 
The issue on appeal is whether the District Court erred 

in dismissing Ponderosa's complaint or in subsequently 

refusing to set aside its judgment of dismissal. We find 

there are insufficient facts in the record to determine 

whether or not McBride is entitled to relief from forfeiture 

under section 28-1-104, MCA. We therefore remand the case 

for a hearing on the question of whether McBride's actions 

constituted a "grossly negligent, willful, or fraudulent 

breach of duty. " 

Section 28-1-104, MCA, cited by both parties, is 

dispositive of this appeal. The statute states: 

"Relief - from forfeiture. Whenever by the terms 

of an obligation a party thereto incurs a forfeiture or a loss in the nature of a forfeiture 

by reason of his failure to comply with its 

provisions, he may be relieved therefrom upon 

making full compensation to the other party, 

except in case of a grossly negligent, willful, 

or fraudulent breach of duty." 

This statute has proved a popular source of litigation 

in Montana. Fraser v. Edmisten (1980), - Mont. - , 616 

P.2d 360, 37 St-Rep. 1607, states: "[wle have construed this 

statute to mean 'that a person may obtain relief under it in 

any case where he sets forth facts which appeal to the 

conscience of a court of equity' [citation omitted]." 616 

P.2d at 362, 37 St.Rep. at 1608. See also Parrot v. Heller 

(1976), 171 Mont. 212, 214, 557 P.2d 819, 820. Fraser also 

states that section 28-1-104 "grants relief from forfeitures 

in most instances, but upholds forfeiture in the case of a 

'grossly negligent, willful, or fraudulent breach of duty 

[by the person seeking relief from forfeiturel.'" 616 P.2d 

at 362, 37 St-Rep. at 1608. It is the duty of the defaulting 

purchaser to show that he is equitably entitled to relief 

from forfeiture and that his breach of duty was not grossly 

negligent, willful, or fraudulent. State ex rel. Howeth v. 
D. A. Davidson & Co. (1973), 163 Mont. 355, 369, 517 P.2d 

722, 730; Ellinghouse v. Hansen Packing Co. (1923), 66 

Mont. 444, 449, 213 P. 1087, 1089; 19 Mont. L. Rev. 50 

(1957). 

The record is devoid of any pleading or evidence that 

would entitle McBride to relief from forfeiture under the 

statute. He prevailed below on the basis of an uncontested 

motion to dismiss. It is when the defaulting purchaser can 

make a showing that he is equitably entitled to such relief 

and that his breach of duty was not grossly negligent, willful, 

or fraudulent that the courts will in proper cases, relieve 

the defaulting purchaser from the forfeiture. Howeth, supra, 

163 Mont. at 369, 517 P.2d at 730. 

When confronted with the complaint demanding forfeiture, 

McBride should have filed an affirmative defense in his 

answer alleging the reasons he was entitled to relief from 

forfeiture under section 28-1-104. In this case, hoisever, 

McBride filed a motion to dismiss rather than an answer. 

McBride's first motion was not ruled on by the District 

Court. His second motion to dismiss, however, which was 

filed shortly after the first, was set for hearing on March 

16, 1981. The motion was presented as scheduled, but Ponderosa 

did not attend the hearing. The motion was granted. Only 

two other hearings were held in the case. The first, held 

on April 13, 1981, concerned Ponderosa's motion for leave to 

amend complaint. No formal ruling was made on this motion. 

On April 15, 1981, Ponderosa filed a memorandum in which it 

xm argued that the order should be set aside on procedural 

grounds and that Ponderosa should be allowed to file an 

amended complaint. On April 16, 1981, a second motion was 

filed by Ponderosa. This one was titled "Motion to Set 
Aside Order of the Court and Allow the Plaintiff to File an 

Amended Complaint." Ponderosa did not file an additional 

memorandum. On April 21, 1981, McBride filed a brief in 

opposition to Ponderosa's latest motion. The brief argues: 

(1) that the District Court acted properly in treating 

McBride's motion to dismiss as a motion for summary judgment; 

(2) that Ponderosa failed to appear and resist the motion; 

and, (3) that Ponderosa waived any right to object to the 

tender by failing to affirmatively state the objection. The 

third and final hearing was held on May 11, 1981. It concerned Ponderosa's second motion. The motion was denied. 

None of the hearings were recorded and the only evidence 

we have of what transpired at them are the minutes of the 

hearings, the briefs filed in support of the motions, and 

the orders of the District Court based on the hearings. 

Nowhere is there any evidence that McBride has satisfied the 

requirements for relief from forfeiture called for by section 

28-1-104, MCA, and Montana case law. That is, he has neither 

alleged nor proved that his action did not constitute a 

"grossly negligent, willful, or fraudulent breach of duty," 

and he has not presented any facts which would "appeal to 

the conscience of a court of equity." Absent such a 

showing, McBride is not entitled to relief from the forfeiture 

clause of the contract. The case is reversed and remanded 

for further proceedings in accordance with this opinion. 
We Concur: 

1 Chis Justice 

I 

Justices