No. 13354 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

MIKE T. QUINN, 

Plaintiff and Respondent, 

GEORGE HAROLD BRIGGS, LELAND RICHARD 

BRIGGS, JOHN W. BRIGGS, and ROBERT 

HUGH BRIGGS, 

Defendants and Appellants. 

Appeal from: District Court of the Fifth Judicial District, 

Honorable Frank E. Blair, Judge presiding. 

Counsel of Record: 

For AppellantsKline and , Helena, Montana 

John R. Rline argued, Helena, Montana 

Schulz, Davis and Warren, Dillon, Montana 

Carl Davis argued, Dillon, Montana 

For Respondent : 

Leaphart Law Firm, Helena, Montana 

C. W. Leaphart argued and W. William Leaphart 

appeared, Helena, Montana 

John H. Jardine argued, Whitehall, Montana 

Submitted: January 20, 1977 

Decided: -KAY 11 1977 

Filed: LAY I : y,r 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

Plaintiff brought this action in the district court, 

Beaverhead County, in equity to rescind a contract to recover 

$100',400'.00' in payments and to cancel a promissory note for 

$150,000.00. Defendants counterclaimed seeking enforcement of 

the $150,000.00 promissory note and attorney fees for defense of 

the contract. The district court ordered rescission of the contract, restitution of the $100,000.00 in payments, cancellation of 

the promissory note and denied defendants any recovery on their 

counterclaim. The controlling issue is whether plaintiff is entitled to relief on the ground of unilateral mistake. 

Plaintiff Mike T. Quinn is a cattle rancher and speculator in 

ranch real estate. He buys ranch properties for resale, rather 

than long term investment. Defendants are the majority stockholders of Briggs Ranch, Inc., a Montana corporation, located south 

of Dillon, Montana and engaged in the ranching business. In 

December 1973, plaintiff visited the Briggs Ranch to inspect cattle 

which he was interested in purchasing. Plaintiff was accompanied 

by Bruce Mecklenburg, a licensed real estate broker. Mecklenburg 

informed plaintiff the Briggs Ranch was for sale. Plaintiff expressed 

an interest in purchasing and returned to the ranch several times 

to inspect the holdings of Briggs Ranch Inc. 

At the recommendation of Mecklenburg, plaintiff met with 

an attorney from Bozeman, Montana. Plaintiff, Mecklenburg and 

the attorney discussed the aspects involved in purchasing Briggs 

Ranch Inc. Subsequent to this initial meeting, plaintiff conferred 

with the attorney and discussed in particular (1) the large dollar 

value involved in the purchase; (2) the fact the proposed sale 
agreement was for the purchase of corporate stock, as opposed 

to the purchase of assets; (3) the number of cattle involved 

in the ranch operation; (4) the possibility of forfeiture in the 

event that $50,000.00 was paid in under the sale agreement and 

plaintiff was unable to make the second payment; and (5) general 

tax consequences associated with the purchase of corporate stock. 

On February 18, 1974, plaintiff, plaintiff's attorney, 

Mecklenburg and George Harold Briggs met with defendants' attorney 

at his office with the intent of negotiating the sale of Briggs 

Ranch Inc. A substantial part of the day involved the discussion 

and explanation of the sale agreement entitled "AGREEMENT TO PURCHASE STOCK OF BRIGGS RANCH, INC.". The culmination of these negotiations was the execution of the sale agreement; the execution 

of the memorandum entitled "MEMORANDUM OF UNDERSTANDING AS TO 

AGREEMENT TO PURCHASE STOCK OF BRIGGS RANCH, INC." ; and plaintiff' s 

tender of $50,000.00. 

The sale agreement provided for the purchase of 5,000 shares 

of common capital stock, which comprised all of the issued and 

outstanding shares of Briggs Ranch, Inc. The purchase price was 

$6,550,000.00 :and payment* was provided for in. the -agreement. 

"(b) Buyer shall pay said purchase price as follows: 

" (1) Fifty Thousand and 00/100 Dollars (50,000.00) 

upon execution of this Contract, receipt of which is 

herewith acknowledged. 

"(2) Two Hundred Thousand and 00/100 Dollars 

($200,000.00) On June 1, 1974. 

"(3) One Million Three Hundred Thousand Dollars, 

($1,300,000.00) not later than the 2nd day of January, 

1975. In the event that Buyer fails to make any payment 

called for herein and/or fails to deposit a sufficient 

amount in escrow as provided in paragraph 3 to satisfy 

Briggs Ranch, Inc.'s obligations as agreed in paragraph 17, 

on or before 5:00 o'clock P.M. on said 2nd day of January, 

1975, this Contract shall end and be of no further force 
and effect at the time and on the date of Buyer's 

default, and Sellers shall have no further obligation 

under this Contract and Sellers shall retain as liquidated 

damages for the breach of said Contract the payment or -* 

payments made to the time of default. 

"(4) The balance of the purchase price in the amount of 

$5,000.000.00 shall be satisfied by note executed by 

Buyer and by Briggs Ranch, Inc . , payable on the basis of 

20 equal annual amortized installments of principal and 

interest. Interest at the rate of 7-112% per annum shall 

be paid monthly. The interest on said $5,000,000.00 shall 

commence and shall run from the 31st day of December, 1974; 

the first such monthly payment shall be due on-or before 

the 31st day of January, 1975, and each payment thereafter 

shall be due on or before the last day of each succeeding 

month. The annual principal payments shall commence on the 

31st day of December, 1975, and shall be payable on the 

31st day of December each and every year thereafter until 

the unpaid balance, plus interest at the rate of 7-112% 

per annum is paid in full, and in any and all events, on $.. 

or before the 31st day of December, 1984, upon which last 

mentioned date there shall be a 'balloont payment of the 

entire unpaid balance of principal and interest." 

The sale agreement further provided that, upon the purchase 

of the corporate stock, plaintiff was to assume certain debts of 

Briggs Ranch, Inc .': 

"17. RECEASE FROM ESCROW: 

"The 5,000 shares of Briggs Ranch, Inc., stock 

shall be released to the Buyer at such time as the 

Federal Land Bank Mortgage has been satisfied by Buyer 

through Briggs Ranch, Inc., and the payment contemplated 

by paragraph 2.(b) (3) has been paid to the Sellers on 

January 2, 1975. In this regard, it is further agreed 

among the parties that: 

I' (a) Buyer shall use the money deposited in escrow 

on January 2, 1975, to cause Briggs Ranch, Inc., to satisfy 

its indebtedness to the Federal Land Bank. In this regard 

Buyer warrants that he knows the principal amount of the 

Federal Land Bank mortgage to be $850,254.88, and the amount 

of the accrued interest thereon to January 2, 1975. Buyer 

agrees and does hereby assume the oblipation of the payment 

of the said $850,254.88 principal and all interest accruing 

from and after January 1, 1974, to the date of payment in 

full on January 2, 1975. It is further understood that 

Buyer shall obtain and record a Release of Mortgage from 

said Federal Land Bank. It is further understood that Briggs 

Ranch, Inc., owns 9,750 shares of Federal Land Bank stock 

worth $5.00 per share, for a total amount of $48,750.00, 

which shall be credited upon the Federal Land Bank loan upon 

payment in full. During the term of this Contract said Buyer 

shall keep all of the real property presently owned by Briggs 
. . 

Ranch, Inc., free and clear of all liens, mortgages 

or other encumbrances, other than the mortgage granted 

to Sellers and except that the Havasu and Texas properties 

may be dealt with by Buyer as Buyer sees fit. 

"(b) At such time as the Buyer satisfies the Note set 

forth on Exhibit 'D' in full, the contents;, of the escrow 

shall be delivered to the Buyer." (Emphasis added,) 

Under paragraph 4(b) of the sale agreement -- "CORPORATE 

PROPERTIES" appears : 

"(b) The Texas farm, described on Exhibit 'B' attached 

hereto, and the Lease thereon which expires December 31, 

1977. Sub.ject to that certain Mortpage in the amount of 

approximately $27,000.00, plus interest to date, said 

Mortgage to remain an obligation of Briggs Ranch, Inc., 

or its successor in interest, after the sale of the stock 

contemplated herein and to which Sellers are relieved 

from any obligation thereon by Buyer." (Emphasis added.) 

The contract further specified the manner by which plaintiff 

would acquire possession of the stock certificates and the ranch 

premises : 

"3. DELIVERY OF STOCK AND PAYMENT OF PURCHASE PRICE: 

"The certificates for the shares of capital stock sold 

hereunder shall be delivered to the escrow agent named 

hereafter, on the 31st day of December, 1974, upon acknowledgement to the Sellers by the Buyer before December 15, 

1974, that (a) the payment called for in paragraph 2.(b)(3) 

will be made on January 2, 1975; (b) that the note and 

mortgage specified in paragraph 2.(b)(6) has been executed 

by the Buyer and Briggs Ranch, Inc. ; (c) that a sufficient 

amount will be deposited with the escrow agent to satisfy 

the Federal Land Bank loan referred to in paragraph 17. 

In the event Buyer informs Sellers that the payments specified in paragraph 2.(b)(3) will be met and Buyer fails to 

make said payments on January 2, 1975; in addition to the 

forfeitures specified in said paragraph 2(b)(3) Buyer will be 

responsible for payment to Sellers of all legal and escrow 

costs incurred in preparing documents and setting up the 

escrow and all income taxes caused by Sellers' repossession 

of the stock sold herein." 

"5. POSSESSION: 

"Possession of the premises owned by the Corporation, 

except as noted herein, shall be surrendered on the 31st 

day of December, 1974, or as soon thereafter as it is 

physically possible for the Buyers to assume the complete 

operation of the ranch. It is understood that Sellers will 

cooperate with Buyer and stay on the premises and help with 

the operation for a reasonable time after December 31, 1974, 

to assure a smooth transition in the management of the 

operation. II 
Subsequent to executing the sale agreement with .defendants, 

plaintiff executed two contracts drafted by his attorney. One of 

the contracts, dated February 18, 1974, and entitled "CONTRACT 

FOR LEGAL SERVICES", provided that plaintiff and Mecklenberg would 

pay their attorney legal fees at specified rates for the performance 

of legal work arising out of the ~riggs/~uinn sale. This contract 

further provided that the attorney would receive $25,000.00 upon 

resale of the Briggs Ranch. The second contract, also dated 

February 18, 1974, and entitled "AGREEMENT" acknowledged Mecklenburg's efforts in the completion of the sale of Briggs Ranch, Inc. 

The contract provided Mecklenburg be compensated for all expenses 

incurred in the resale or attempted resale of Briggs Ranch, Inc. 

and in lieu of a real estate commission that plaintiff and Mecklenburg divide on an even basis any profit realized from the resale 

of Briggs Ranch, Inc. 

Prior to the June 1, 1974, contract payment deadline, plaintiff 

realized he could not tender the required $200,000.00 payment. 

On June 1, 1974, plaintiff tendered $50,000.00 and a promissory 

note in the amount of $150,000.00. 

Mecklenburg continued to offer the Briggs Ranch for sale 

until December 9, 1974. On Oecember 17, 1974, plaintiff executed 

a notice of ~sdssion which was delivered to defendants' attorney. 

Thereafter, plaintiff filed his action for rescission in the 

district court, Beaverhead County. 

On January 13, 1976, the district court sitting without 

a jury, heard the action to rescind the AGREEMENT TO PURCHASE STOCK 

OF BRIGGS RANCH, INC. The district court found that plaintiff, 

at the time of the execution of the sale agreement (1) did not 

understand that he was buyinglthe corporate stock of Briggs Ranch, 

-6- 
Inc. ; (2) did not appreciate the consequences that flow from a 

stock purchase, as opposed to an asset purchase; (3) believed 

the purchase price of Briggs Ranch to be $6,550,000.00; (4) 

failed to comprehend there would be additional payments required 

of him in order to satisfy the $27,000.00 Texas farm mortgage 

and the $850,254.88 indebtedness to the Federal Land Bank; and 

(5) did not appreciate the tax consequences associated with the 

purchase of capital stock. 

The district court concluded: Plaintiff executed the sale 

agreement under mistakes of fact; that the mistakes of fact were 

not caused by plaintiff's neglect of a legal duty, but occurred 

regardless of plaintiff's exercise of ordinary care; that it would 

be unconscionable to enforce the sale agreement; and defendants 

would be unjustly enriched if the sale agreement was enforced. 

Defendants appeal from the district court's judgment ordering 

(1) rescission of the sale agreement; (2) restitution from 

defendants in the amount of $100,000.00; (3) cancellation of 

the promissory note for $150,000.00;and (4) that defendants 

recover nothing from plaintiff on their counterclaim. 

For the following reasons the judgment of the district 

court is reversed. 

A party to a contract cannot avoid the contract on the ground 

that he made a mistake where there has been no misrepresentation, 

no ambiguity in the terms of the contract and the other party 

has no notice of such mistake and acts in good faith. Furthermore, 

even if one of the contracting parties believes the words of the 

contract mean something different, the parties to the contract are 

bound by the plain meaning of the words used in the agreement as 

properly interpreted, unless the other party knows of such mistake. 17 Am Jur 2d, Contracts $5 146,148. 
One who executes a written contract is presumed to know the 

contents of the contract and to assent to those specified terms, 

, in the absence of fraud, misrepresentation, or other wrongful 

act by the other contracting party. Absent incapacity to contract, ignorance of the contents of a written contract is not a 

ground for relief liability. Parchen Chessman, 49 Mont . 

326, 142 P. 631; Ferd L. Alpert Industries, Inc. v. Oakland 

Metal Stamping Co., 3 Mich.App. 101, 141 N.W.2d 671, reversed 

on other grounds, 379 Mich.272, 150 N.W.2d 765. 

If a contracting party acts negligently . and in such a 

manner as to lead others to suppose that the writing is assented to 

by him, the contracting party will be bound in law and in equity, 

even though the contracting supposes the writing 

instrument of an entirely different character, 17 Am Jur 2d, 

Contracts 5149; Hjermstad v. Barkuloo, 128 Mont. 88, 270 P.2d 

1112. The integrity of written contracts would be destroyed if 

contracting parties, having admitted signing the instrument, were 

allowed to rescind the contract on the basis they neither read 

nor understood the expressed agreement. Ryan v. Ald,Inc., 149 

Mont. 367, 427 P.2d 53. 

Section 13-903, R.C.M. 1947, sets forth the grounds for 

rescission of contract: 

"When party may rescind. A party to a contract may 

rescind the same in the following cases only: 

"1. If the consent of the party rescinding, or of 

any party jointly contracting with him was given by mistake, or obtained through duress, menace, fraud, or undue 

influence, exercised by or with the connivance of the party 

as to whom he rescinds, or of any other party to the contract jointly interested with such party; 

"2. If, through the fault of the party as to whom 

he rescinds, the consideration for his obligation fails, 

in whole or in part; 
"3. If such consideration bec~mes entirely void 

from any cause; 

"4. If such consideration, before it is rendered 

to him, fails in a material respect, from any cause; 

or 3 

"5. By consent of all the other parties." 

Plaintiff contends he executed the sale agreement under 

mistakes of fact as to the character of the property being sold 

and the purchase price of the property. In addition, plaintiff 

claims he acted without understanding the tax consequences of the 

purchase, a mistake of law. For plaintiff to avoid the sales 

agreement he must show that his unilateral mistakes meet the 

standards set forth in sections 13-313,314, R.C.M. 1947, which 

provide : 

"13-313. Mistake of fact. Mistake of fact is a mistake 

not caused by the neglect of a legal duty on the part 

of the person making the mistake,-and consisting in: 

1. An unconscious ignorance or forgetfulness of 

a fact, past or present, material to the contract; or, 

"2. Belief in the present existence of a thing 

material to the contract, which does not exist, or in 

the past existence of such a thing, which has not existed." 

"13-314. Mistake of law . Mistake of law constitutes a 

mistake, within the meaning of this chapter, only when it 

arises from: 

"1. A misapprehension of the law by all parties, all 

supposing that they knew and understood it, and all making 

substantially the same mistake as to the law; or, 

"2. A misapprehension of the law by one party, of 

which the others are aware at the time of contracting, 

but which they do not rectify.'' 

Here, the evidence fails to support plaintiff's contention 

that he executed the sale agreement under mistakes of fact. The 

sale agreement clearly and specifically sets forth the subject 

matter of the sale agreement, the purchase price of the capital 

stock and the debts assumed by the buyer. Furthermore, defendants' 
counsel spent considerable time in explaining the provisions 

of the sale agreement prior to executing the instrument. Plaintiff, 

Mecklenburg and their attorney were in attendance and participated in the clarification and execution of the sale agreement 

and the execution of the memorandum of understanding. If plaintiff 

failed to understand the terms of the sale agreement it was not 

due to any misrepresentations on the part of defendants. Under 

these circumstances, neither plaintiff's purported inability to 

comprehend the terms of the sale agreement nor his failure to 

procure adequate advice can be attributed to defendants, Plaintiff 

was under a legal duty to execute the sale agreement with the 

prudence and care of a reasonable and cautious businessman. 

Having failed to exercise such care, plaintiff cannot seek relief 

from a court of equity on the ground of unilateral mistake of 

fact. 

Similarly, plaintiff's argument that he executed the sale 

agreement without appreciating the tax consequences falls short 

of the standard required to avoid a contract. Section 13-314, 

R.C.M, 1947, provides that a mistake of law is ground for relief 

only when there is a misapprehension of the law by all parties 

or a misapprehension of the law by one party with the knowledge 

of the other contracting party. Clearly, defendants were aware 

of the tax consequences flowing from the sale agreement. Plaintiff, 

on the other hand, never brought to defendants' attention the 

fact that he was either unaware of the tax consequences or unable 

to understand the tax consequences, Under these circumstances, 

equitable relSef cannot be utilized to rescind the contract. 

We conclude that plaintiff is bound by the terms of the 

agreement to purchase stock of Briggs Ranch, Inc. Plaintiff's 
filing of the notice of re'scission and failure to tender payments pursuant to the sale agreement amounted to a material 

breach of contract and plaintiff is to recover nothing. In 

view of the express terms of the sale agreement providing for 

the payment of defendants' attorney fees, the matter of attorney 

fees is remanded to the district court to determine reasonable 

attorney fees and costs. 

The judgment of the district court is reversed and the cause 

is dismissed. 

/' 

Justice. 

We Concur: 

~hyef Justice 

Justices. C/