No. 80-168 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1981 

J. LAWRENCE STODDARD, 

Plaintiff and Appellant, 

MARVIN H. GOOKIN and 

SHARON GOOKIN I 

Defendants and Respondents. 

Appeal from: District Court of the Sixteenth Judicial District, 

In and for the County of Fallon, 

Honorable M. James Sorte, Judge presiding. 

Counsel of Record: 

For Appellant: 

Gene Huntley argued, Baker,Montana 

For Respondents: 

Stephens Law Firm, Billings, Montana 

Robert Stephens, Jr. argued, Billings, Montana 

Submitted: January 13, 1981 

Decided: March 4, 1981 

Filed: MAR 4 - 1981 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

J. Lawrence Stoddard appeals from a judgment entered 

against him in the Sixteenth Judicial District Court, Fallon 

County, denying his claims against Marvin H. Gookin and 

Sharon Gookin for cancellation of a deed, damages or in the 

alternative, specific performance. 

We find the issues in this appeal are: 

1. Whether the escrow bank should have delivered to 

the Gookins a deed terminating Stoddard's interest in the 

real property. 

2. Whether the District Court should have allowed 

evidence of an oral contract to purchase an interest in real 

estate. 

3. Whether the District Court should have made findings 

of fact and conclusions of law in this case. 

4. Whether the evidence in the case is sufficient to 

support the judgment. 

In 1970, Marvin and Sharon Gookin entered into a written 

five-year lease of ranch property with parties identified as 

"McGhee". This lease included an option to the Gookins to 

buy the real property for a sum of $100,000. 

While the lease was in effect, J. Lawrence Stoddard and 

the Gookins agreed orally that the Gookins would exercise 

their option to purchase the McGhee property, that the 

contract for the purchase of the McGhee property would show 

Stoddard and his wife and the Gookins as cotenant-purchasers, 

and that thereafter, Stoddard would pay $30,000 to the 

Gookins in exchange for their cotenancy interest in the 

contract for the McGhee property. 

Stoddard and the Gookins retained a Baker attorney, R. 

L. Culver, to prepare the necessary documents to carry out 
their agreement. The attorney prepared a contract for deed, 

warranty deeds, and an escrow receipt for deposit of the 

instruments with the Bank of Baker. 

On June 1, 1973, a contract for deed was executed 

between the McGhees as sellers and the Stoddards and Gookins 

as cotenant purchasers. Stoddard made the downpayment of 

$10,000 to the McGhees. The Stoddards and the Gookins each 

signed warranty deeds, that, if recorded, would respectively 

convey to the other sole title to the ranch property. A 

promissory note for $30,000 was executed by Stoddard, due 

and payable to the Gookins on November 1, 1973. The note 

and the deeds were to be held in escrow at the Bank of 

Baker. An escrow receipt was prepared, which included the 

following instructions for the escrow holder: 

"If said $30,000.00 note is paid on or before 

November 1, 1973 by J. Lawrence Stoddard [the 

escrow agent shall] . . . deliver the deed 

executed by Marvin H. Gookin and wife to J. 

Lawrence Stoddard, unto the said J. Lawrence 

Stoddard, and destroy the remaining deed. 

"If said note, plus interest, is not paid 

by November 1, 1973, then deliver to Marvin 

H. Gookin, the warranty deed executed by J. 

Lawrence Stoddard and wife to Marvin H. Gookin 

and destroy the other deed." 

An additional part of the escrow receipt provided: 

"This escrow is taken expressly subject to 

terms, exceptions, provisions and conditions 

herein stated which are acceptable and approved 

by all the parties accepting this receipt or 

interested in the escrow being as follows: 

"5. Time is and shall be insofar as the escrow 

agent is concerned of the essence of this agreement and part of the consideration, and a waiver 

in one instance to a time condition shall not 

operate to prevent an objection for any subsequent 

default in point of time." 
It may be gleaned from the testimony, though with difficulty, 

that on or approximately November 2, 1973, Marvin and Sharon 

Gookin and J. Lawrence Stoddard entered into a different 

arrangement. Stoddard agreed to pay the $30,000 in two 

installments, $15,000 "in a very short time" and an additional 

$15,000 on or after January 1, 1974. The new arrangement 

was for the Gookins' tax advantage. The parties further 

agreed that the Gookins, instead of moving from the ranch 

premises immediately upon the payment of the $30,000 as 

originally contemplated, would be allowed to remain on the 

property for an unspecified period of time in 1974 to winter 

livestock on the ranch. 

On November 2, 1973, upon request by the Gookins for 

payment of the first $15,000, Stoddard paid $2,000, and 

stated that the remaining $13,000 amount would be paid after 

he sold some stock through a stock broker. Gookin made 

several additional requests for this payment without result. 

On November 24, 1973, Marvin Gookin found it necessary to 

leave Baker for Minnesota because of the illness of his 

father. He was gone from November 24 until December 6, 

1973. Before he left, he talked to Attorney Culver, and 

asked Culver to give Stoddard an additional four days for 

the payment of the balance of the $15,000, with notice that 

if the payment were not made, the Gookins would seek to get 

the deeds which were then supposed to be deposited in escrow. 

At that point, no deposits of the instruments for escrow had 

been made. One of the reasons given was that Mrs. Stoddard 

had delayed in signing the deed. On November 26, 1973, 

Culver took the instruments to the Bank of Baker, and 

deposited them in escrow. The instruments deposited included 

the two warranty deeds and the promissory note, dated June 
1, 1973, which by its terms, was payable on or before 

November 1, 1973. Shortly after the instruments had been 

deposited with the escrow bank, Attorney Culver made contact 

with Stoddard and advised him that he must make payment 

within a few days. Stoddard testified that within a few 

days he brought the balance of the payment to Culverts 

office, but Culver advised him to take the money to the 

Bank of Baker. Stoddard did not do this. On December 6, 

1973, after Marvin Gookin returned to Baker, and found that 

the payment had not been made by Stoddard, he got in touch 

with a Billings attorney. As a result, the Billings firm 

wrote to Stoddard on December 7, 1973, as follows: 

"You are hereby notified that any prior 

agreement that you may have had to purchase 

certain land from Marvin H. Gookin and Sharon 

Gookin in Range 59 East, Fallon County, has 

been breached by your failure to pay sums when 

due. You are further notified that by reason of 

this breach, the agreement is terminated and 

all sums previously paid are forfeited. 

"You are further advised that you have 10 days 

from the date of this letter to remove all your 

livestock from the Gookin property." 

On the same day, the Gookins went to the Bank of Baker, 

and obtained from the bank the instruments which had been 

deposited in escrow. They recorded the warranty deed granting 

them sole title to the property. 

On or about December 10, 1973, Stoddard came to the 

Gookins' residence and attempted to tender the balance of 

the first $15,000 payment. Marvin Gookin refused to accept 

the same, saying that the deed was recorded and the matter 

was closed. 

Following that time, the Gookins have continued to 

possess the ranch property, and have made the annual $9,000 

payments to the McGhees as required by the contract. At the 

time of trial, three additional $9,000 payments remained to be 

made to satisfy the McGhee contract. 
Stoddard brought suit against the Gookins to cancel the 

warranty deed, to quiet the title in him to the ranch property, 

and to obtain specific performance of the agreement by which the 

Gookins agreed to transfer their cotenancy interest to 

Stoddard. The court tried the case with a jury. The 

District Court, in submitting the issues to the jury, gave 

this instruction: 

"The plaintiff brings this action to cancel 

the deed from himself to defendants 

dated June 1, 1973. If the deed is canceled. 

the result will be that the plaintiff and the 

defendant, Marvin Gookin, will each be the 

owner of an undivided one-half interest in the 

land in question. 

"The plaintiff has also elected to claim that 

the contract between the parties as shown by 

the escrow receipt and its oral extensions be 

enforced. If he is successful in this claim, 

he will be the owner of the entire property 

on paying for it and making the other payments 

mentioned in these instructions." 

Interrogatories were submitted to the jurors, and they 

answered as follows: 

"INTERROGATORY NO. 1: Is the plaintiff, under 

the court's instructions entitled to cancellation 

of the deed from him dated June 1, 1973? (Answer 

'Yes' or 'No') No - 

"INTERROGATORY NO. 4: Is the plaintiff, under 

the court's instructions entitled to specific 

performance of the purchase agreement between 

plaintiff and defendant? (Answer 'Yes' or 'No') 

NO" - 

Based upon the answers to the interrogatories by the 

jury, the District Court entered judgment against Stoddard. 

Stoddard made a motion that the court make findings of fact, 

and conclusions of law which the court declined to do. 

Thereafter appeal was perfected to this Court. 

In his appeal, Stoddard attacks first the delivery of 

the warranty deed by the escrow bank to Gookin. Stoddard 

contends that on the date the escrow bank accepted the 

escrow documents, November 26, 1973, the escrow contract was 
already impossible to perform, because the promissory note 

upon which the escrow depended was due and payable November 

1, 1973. Stoddard further contends that the delivery of the 

deed by the escrow holder was ineffective for any purpose 

under Hart v. Barron (1949), 122 Mont. 350, 204 P.2d 797. 

Gookin argues that it is clear that an extension of time had 

been agreed to at the time of the deposit, that the escrow 

contract does not constitute the entire agreement between 

the parties, and that the "time is of the essence" clause in 

the escrow receipt applies. 

We first determine that the Stoddard warranty deed was 

improperly delivered to the Gookins by the escrow bank. At 

the time of the escrow deposit, November 26, 1973, the 

escrow instruments no longer reflected the true agreement 

between the parties at that time and the "time is of the 

essence" clause in the escrow receipt applied only to the 

escrow agent. 

The object of an escrow, as with any other contract, 

"must be lawful when the contract is made and possible and 

ascertainable by the time the contract is to be performed." 

Section 28-2-602, MCA. To constitute an instrument in 

escrow, it must be deposited with the intention that it 

shall take effect upon the performance of an express condition 

or the happening of a certain event. Conner v. Helvik 

(1937), 105 Mont. 437, 73 P.2d 541. When the instruments 

here were deposited, upon the condition that a $30,000 

promissory note payable November 1, 1973 be paid, it was 

foreordained that the warranty deed be delivered to Gookin. 

This was not the arrangement that the parties mutually 

testified was their true agreement at the time of the escrow 

deposit. This determination regarding the delivery of the 

deeds by the escrow holder does not end this case, however. 

-7- 
We come now to the second issue presented for our 

review, whether the District Court should have allowed 

evidence of an oral contract between the parties which 

modified the written documents prepared to carry out the 

agreement. 

The generally applicable rules are familiar. Written 

contracts supersede all oral negotiations (section 28-2-904, 

MCA) which precede or accompany the execution of the written 

contracts. Davison v. Casebolt (1969), 154 Mont. 125, 461 

P.2d 2. 

A written contract may be modified by a subsequent 

agreement of the parties, but only by a contract in writing 

or by an executed oral agreement (section 28-2-1602, MCA). 

This is a rule of substantive law and not of evidence. 

Higby v. Hooper (1950), 124 Mont. 331, 221 P.2d 1043. 

An oral agreement altering a written agreement is not 

an "executed oral agreement" within the statute authorizing 

modification of written contracts by an executed oral agreement unless its terms have been fully performed, and performance 

on one side is not sufficient. Ikovich v. Silver Bow Motor 

Car Co. (1945), 117 Mont. 268, 157 P.2d 785. 

Anoral contract to procure a conveyance of certain 

land, and to transfer an undivided interest to another is a 

"contract for the sale of lands" within the statute of 

frauds, and an action does not lie to enforce it. Dunphy v. 

Ryan (1886), 116 U.S. 491, 6 S.Ct. 486, 29 L.Ed. 703. 

A note given in connection with the sale of lands which 

contains no reference to the terms of the contract of sale 

is not a sufficient memorandum under the requirements of the 

statute of frauds. Eccles v. Kendrick (1927), 80 Mont. 120, 

259 P. 609, 

- 8- 
Part performance, sufficient to take an oral contract 

out of the statute of frauds, is an act or performance which 

puts the party performing it in such position that nonperformance would be a fraud upon him. Payment alone is not 

sufficient part performance. Ducie v. Ford (1888), 8 Mont. 

233, 19 P. 414, aff'd. 138 U.S. 587, 11 S.Ct. 417, 34 L.Ed. 

Payment of the price of the land alone is not a sufficient part performance to take the transaction out of the 

statute. Ducie v. Ford, supra; nor is part payment of the 

purchase price, Boulder Valley Ditch Mining & Milling Co. 

v. Farnham (1892), 12 Mont. 1, 29 P. 277. There must be 

some additional consideration such as taking possession, 

making improvements or other elements showing consideration 

beyond the payment of the price. Shaw v. McNamara & Marlow 

(1929), 85 Mont. 389, 278 P. 836; Kettlekamp v. Watkins 

(1924), 70 Mont. 391, 225 P. 1003. 

The fact that an attorney represented one or both of 

the parties does not bind either of the parties to the 

actions of the attorney where there is not in existence a 

writing signed by the party to be bound indicating that the 

attorney had authority to act on that party's behalf. 

Schwedes v. Romain (1978), - Mont . , 587 P.2d 388, 35 

St.Rep. 1784. 

However, a party may be estopped from relying on the 

statute of frauds. Fiers v. Jacobson (1949), 123 Mont. 242, 

211 P.2d 968. Where one party to an oral contract of purchase 

of land has relied on the other party so that the effect of 

the statute of frauds would be to perpetrate a fraud on the 

other party, equity will regard the case as having been 

removed from the operation of the statute and will enforce 
the contract if necessary or grant other appropriate relief. 

Epletveit v. Solberg (1946), 119 Mont. 45, 169 P.2d 722. 

Under these rules, where as here, both parties agree 

that there was an oral modification of their written agreements, evidence of the oral modification is admissible. See, 

Corbin on Contracts, 5 574. 

Applying the foregoing rules to the fact situation 

before us, it is clear that the oral agreement of Stoddard 

to "cash out" the Gookins' rights under the option, was 

superseded by the written instruments that followed. Thus, 

the contract for deed between the McGhees on the one hand 

and Stoddard and the Gookins as cotenants on the other, plus 

the promissory note of $30,000 due November 1, 1973, and the 

execution of the escrow receipt on June 1, 1973, constitute 

written evidence of the contract between the parties at that 

time. As of that date, Stoddard's right to purchase the 

one-half undivided interest of the Gookins may be determined 

from those instruments. However, on or about November 1, 

1973, the parties entered into an oral modification of their 

written agreement relating to the method of payment by 

Stoddard. For the Gookins' tax benefit, and for allowing the 

Gookins to remain on the ranch through the winter to take 

care of their stock, the $30,000 was to be divided into two 

payments, one payable in November and the other after January 

1, 1974. 

As further consideration, Stoddard paid $2,000 on 

November 2, 1973. He had earlier paid the full $10,000 for 

the downpayment on the McGhee contract. While it appears 

clear from the evidence that if Stoddard did not make the 

$15,000 payment, he would forfeit his right to his one-half 

interest in the property, it is unclear that he would also 
forfeit the earlier monies that he had paid. It is also 

unclear whether there was a specific time agreed upon for 

payment of the full first installment of $15,000. There 

does not appear to be any agreement that time was of the 

essence of their modified arrangement and it is a fact 

question to be determined by a trier of fact whether the 

tender by Stoddard was timely. The statement by Gookin to 

Attorney Culver on November 24, 1973, that he would grant 

Stoddard four additional days to make payment, is not in 

itself a contract, but the utilateral act of one party which 

does not appear to have been assented to by the other party. 

Attorney Culver, of course, had no authority to bind Stoddard. 

We are mindful of the fact that in order for time to be 

of the essence of a contract, it is sufficient if such 

intent is clearly expressed between the parties and the 

words "time is of the essence" need not be used. Johnson v. 

Metropolitan Life Ins. Co. (1938), 107 Mont. 133, 83 P.2d 

922. Of course, if time were not of the essence here, the 

law implies that the payment by Stoddard could be made 

within a reasonable time. Sections 28-3-601, -602, MCA. 

The time for the payment of money only as performance is 

"immediately upon the thing to be done being exactly ascertained". Section 28-3-601, MCA. 

This cause must be remanded to the District Court for a 

determination by a trier of fact of the following fact 

issues: 

1. Under the modified agreement, when was payment to be 

made by Stoddard? 

2. Did Stoddard make or tender timely payment under 

the modified agreement? 

3. If the answer to the second issue is "no", did 

the modified agreement include a forfeiture of Stoddardfs 

earlier payments if he did not perform the modified agreement? 

-11- 
On retrial, it is not relevant evidence that the 

Gookins lost a downpayment on a trailer house in Billings. 

The purposes for which they would have used the monies had 

Stoddard made payment are also not relevant. 

Since this was a case in equity, the District Court 

should have entered findings of fact and conclusions of law 

even though the cause here was tried to a jury. The interrosatories answered by the jury do not set forth the facts 

upon which the jury made its determination. Unless both 

~arties aqreed to be bound by a jury decision without 

further findinss bv the court, the findinqs of the jury were 

advisory onlv and the District Court was required to make 

findinqs under Rule 52, M.R.Civ.P. 

The purpose of requiring findings of fact is threefold: (1) as an aid in the trial judge's powers of adjudication; (2) for purposes of res judicata and estoppel by 

judgment; and (3) as an aid to the appellate court on review. 

Marriage of Barron (1978), 177 Mont. 161, 580 P.2d 936. 

We reverse this cause and remand to the District Court 

for further proceedings. An appropriate judgment shall be 

entered by the District Court after the factual determinations 

herein indicated are made. The court will determine, by 

itself or with an advisory jury, Stoddard's damages if he be 

found entitled to an undivided interest in, or to all of the 

real estate. The District Court will make such further 

orders for both parties as may be appropriate under the 

findings of the trier of fact. Each party shall bear his or 

their own costs in this appeal. 

?%-&&?-Justice 
We Concur: 

C#ef Justice