Title: STOVALL v WATT
Citation: N/A
Docket Number: 14712
State: Montana
Issuer: Montana Supreme Court
Date: April 30, 1980

N o . 14712 I N THE S U P R E M E COURT O F T H E STATE O F M O N T A N A 1979 JAY STOVALL and JUANITA STOVALL, P l a i n t i f f s and & n t s , -vs- LILLWWATT, DAN HARDY and F E R N HARDY, t I ' Defendants and *~&ell&ts. Appeal from: District Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , Honorable Charles Luedke, Judge presiding. Counsel of Record: For Appellants: Hibbs, Sweeney and Colberg, B i l l i n g s , Montana Maurice R. Colberg, Jr., argued, B i l l i n g s , Montana For Respondents: Freeman and Martin, Hardin, Montana Laurence R. Martin argued, Hardin, Montana Submitted: September 18, 1979 Decided: 4 ~ f i 2 1384 - - - - F i l e d : - .- M r . J u s t i c e Daniel J. Shea d e l i v e r e d t h e Opinion of t h e Court. The S t o v a l l s , p l a i n t i f f s below, appeal from a judgment and order of t h e Big Horn County D i s t r i c t Court denying t h e i r request f o r s p e c i f i c performance of an option t o purchase c l a u s e contained i n a l e a s e which t h e S t o v a l l s had e n t e r e d i n t o with L i l l i a n I. Watt. Defendant L i l l i a n W a t t a l s o cross- appeals from an award t o t h e S t o v a l l s of $9,600 i n damages f o r h e r breach of agreement t o convey t h e real property involved. The t r i a l c o u r t determined t h a t defendants Dan M. Hardy and Fern A. Hardy had s u p e r i o r e q u i t a b l e claims t o t h e purchase of t h e land involved as a r e s u l t of a l e a s e option t o purchase agreement which they a l s o had entered i n t o with defendant L i l l i a n W a t t . The e s s e n t i a l contention of t h e S t o v a l l s i s t h a t t h e t r i a l c o u r t abused its d i s c r e t i o n by n o t granting t h e i r claim f o r s p e c i f i c performance of t h e option t o purchase c l a u s e contained i n a l e a s e dated March 3 , 1969. The primary con- t e n t i o n of defendant Watt i n her cross-appeal seeking t o avoid damages awarded t o t h e S t o v a l l s , is t h a t t h e s t o v a i l lease had no inception i n f a c t and t h a t t h e l e a s e was a l s o s u b j e c t t o a condition precedent t h a t t h e Hardys vacate t h e land involved, and t h a t t h e Hardys never d i d vacate t h e land. The problems began with t h e death of Edmund Andrett who owned t h e property i n question u n t i l h i s death i n June 1966. Andrett had previously used C. D. Wolfe of Farm and Ranch Management Co. of B i l l i n g s t o a c t a s h i s agent i n l e a s i n g t h e land involved. Through a continuing s e r i e s of l e a s e s t h e Hardys had leased t h e land from t h e agency s i n c e 1951. The problems began when t h e l e a s i n g agency d e a l t d i r e c t l y with t h e Hardys a f t e r t h e death of Edmund Andrett but where L i l l i a n W a t t d e a l t , through her attorney, p r i m a r i l y , with t h e S t o v a l l s . -2- Lillian Watt, an elderly Seattle, Washington resident, became the owner of the property involved by virtue of a decree of distribution entered on July 18, 1967. The property was then subject to an existing Hardy lease. She retained Missoula attorney, Dwight N. Mason, to handle her affairs concerning the property. During all of the proceedings or transactions in relation to the land, she had never gone to see the land in this state located in Big Horn County. The Hardy lease was to expire on March 1, 1968. Prior to this time, however, Lillian Watt and the Hardys were disputing lease rental payments. For some reason, Lillian Watt believed that the Hardy lease had expired and that the Hardys were in default on rental payments. For this reason, she contacted attorney Mason and asked him to find a new tenant. Unknown to Lillian Watt or to attorney Mason, however, the leasing agency managed by Wolfe, had entered into a renewal lease with the Hardys on March 1, 1968. This lease was recorded on November 22, 1969. The problem became complicated then because attorney Mason had, pursuant to Lillian Watt's instructions, found another tenant for the farmland and entered into a lease and purchase option with the Stovalls. The following circumstances led to the Stovall-Lillian Watt lease option to purchase agreement. Attorney Mason wrote a letter to the father of Jay Stovall and solicited him as a tenant. Jay Stovall's father had died however, and the letter was passed along to Jay Stovall, who was ranching property adjacent to the ~illian Watt property occupied by the Hardys. Jay Stovall and his wife met with attorney Mason in Missoula in early February 1969, and expressed their interest in leasing the property. Mason told the Stovalls t h a t L i l l i a n W a t t would be receptive t o an o f f e r t o l e a s e t h e land involved because she was then having problems with t h e Hardys and d i d not want t o continue l e a s i n g t o them. A f t e r r e t u r n i n g home, t h e S t o v a l l s s e n t a w r i t t e n o f f e r f o r lease terms, negotiations ensued, and f i n a l l y a t t o r n e y Mason prepared a l e a s e dated March 3, 1969 and L i l l i a n Watt and t h e S t o v a l l s signed it. This l e a s e was recorded on September 22, 1969, a month before t h e Hardys recorded t h e i r l e a s e from t h e l e a s i n g agency managed by Wolfe. The S t o v a l l l e a s e was f o r a t h r e e year term s t a r t i n g March 3, 1969 and it a l s o included a p r e f e r e n t i a l r i g h t of renewal and an option " t o m e e t t h e purchase p r i c e o f f e r e d " i n t h e event of any s a l e during t h e term of t h e l e a s e . Another c l a u s e r e c i t e d t h a t ". . . possession thereof t o be given a s soon as p r e s e n t t e n a n t ( t h e Hardys) vacates same . . ." The Hardy lease a l s o contained an option t o purchase c l a u s e s i m i l a r t o t h a t contained i n t h e S t o v a l l l e a s e . Although t h e S t o v a l l s knew t h a t t h e Hardys w e r e occupying t h e land a t t o r n e y Mason t o l d them t h a t i f any problem arose a s t o possession t h a t he would e v i c t t h e Hardys and place t h e S t o v a l l s on t h e land a s t h e tenants. Problems erupted almost immediately because of t h e two competing l e a s e s and claims made by t h e r e s p e c t i v e p a r t i e s . Upon receiving a signed copy of t h e i r lease t h e S t o v a l l s immediately proceeded t o claim possession of the land. They r e b u i l t some fences, opened up g a t e s , and moved t h e i r c a t t l e from adjoining land onto t h e L i l l i a n Watt property. his sparked a c t i o n by t h e Hardys, who w e r e occupying t h e land. They moved t h e c a t t l e o f f t h e property and locked t h e g a t e s . These a c t s t r i g g e r e d a series of communications between a t t o r n e y Mason, t h e Hardys, L i l l i a n Watt, and Wolfe, t h e manager of -4- t h e l e a s i n g agency who had signed t h e lease with t h e Hardys. From t h e s e communications it w a s learned t h a t the Hardys w e r e n o t a c t u a l l y i n d e f a u l t on t h e r e n t a l payments, and t h a t t h e Hardys had e n t e r e d i n t o t h e March 1, 1968 renewal l e a s e with agent Wolfe. The Hardys had paid t h e r e n t a l money t o agent Wolfe. Wolfe then t r i e d t o settle t h e r e n t s with L i l l i a n Watt on March 21, 1969, but she r e j e c t e d h i s o f f e r , returned h i s check, and t o l d Wolfe t h a t she would n o t accept any r e n t from t h e Hardys f o r 1969. O n A p r i l 5, 1969 L i l l i a n W a t t wrote t o a t t o r n e y Mason and t o l d him she would not r a t i f y t h e Hardy l e a s e . L i l l i a n Watt and a t t o r n e y Mason then suggested a compromise agreement between t h e competing lessees whereby t h e Hardys would be allowed t o have t h e cropland through t h e 1969 crop season and t h e S t o v a l l s would use t h e grazing land. The S t o - ~ a l l s d i d not need t h e g r a s s u n t i l f a l l , and they f e l t t h a t under customary p r a c t i c e t h e Hardys would, i n any event, be e n t i t l e d t o t h e 1969 crop which t h e Hardys had planted. It appears however, t h a t n e i t h e r t h e Hardys nor t h e S t o v a l l s e v e r s p e c i f i c a l l y agreed t o t h i s compromise arrangement. I n any event, t h e a t t i t u d e of L i l l i a n W a t t toward t h e Hardys changed markedly a f t e r she decided t o l e t t h e Hardys s t a y on t h e property through 1969. Although she apparently believed a t t h a t t i m e t h a t t h e Hardys d i d not have a v a l i d lease, ~ i l l i a n Watt accepted t h e grazing r e n t a l from t h e Hardys. I n September 1969, L i l l i a n Watt decided t o sell t h e property, and i n June 1970, she s o l d t h e property t o t h e Hardys. A s a r e s u l t of t h i s s a l e t o t h e Hardys, t h e S t o v a l l s f i l e d s u i t seeking s p e c i f i c performance from L i l l i a n W a t t , and t h a t they w e r e e n t i t l e d t o purchase t h e land r a t h e r than t h e Hardys. I n e n t e r i n g i t s o r d e r denying s p e c i f i c performance t h e t r i a l c o u r t determined t h a t L i l l i a n Watt had r e l i e d i n good - 5- f a i t h on a t t o r n e y Mason's advice, and t h a t o u t of t h i s r e l i a n c e flowed a series of f a c t u a l and l e g a l misapprehen- sions. The t r i a l c o u r t decided t h a t under t h e t o t a l c i r - cumstances of t h e case, equity would n o t permit t h e S t o v a l l s t o o b t a i n t h e property by s p e c i f i c performance a g a i n s t L i l l i a n W a t t , and t h a t damages awarded a g a i n s t L i l l i a n Watt, would, under t h e circumstances, be the proper remedy. Under s e c t i o n 27-1-415(4), MCA, s p e c i f i c performance w i l l not be enforced a g a i n s t a p a r t y t o a c o n t r a c t i f h i s a s s e n t was given under t h e influence of mistake, misapprehension, o r s u r p r i s e . S p e c i f i c performance, w i l l not, furthermore, be granted i n a s i t u a t i o n i n which t h e t o t a l circumstances demonstrate t h a t it would produce a hardship o r i n j u s t i c e . S e i f e r t v. S e i f e r t (1977), 173 Mont. 501, 504, 568 P.2d 155, 157. H e r e t h e Hardys w e r e not delinquent on t h e i r l e a s e payments and always believed they had a v a l i d l e a s e . L i l l i a n Watt accepted t h e Hardys' r e n t a l payments before she decided t o sell t h e property, although she c l a i m s she d i d n o t thereby r a t i f y t h e Hardy l e a s e previously executed by agent Wolfe. Attorney Mason s e n t l e t t e r s t o both t h e Hardys and t h e S t o v a l l s s o l i c i t i n g o f f e r s f o r t h e purchase of t h e property, and t h e Hardys responded by making an o f f e r t o purchase t h e property. This s a l e w a s mnsl-m.ated by recording a deed on June 3, 1970. To g r a n t s p e c i f i c performance t o t h e S t o v a l l s would be t o deprive t h e Hardys of property which they had continuously leased, farmed and operated s i n c e t h e e a r l y 1 9 5 0 ' ~ ~ and then l a t e r decided t o purchase. The t r i a l c o u r t made no f i n d i n g s t h a t t h e Hardys w e r e operating ir?. bad f a i t h . There can be no doubt t h a t s p e c i f i c performance granted t o t h e S t o v a l l s would work a harsh r e s u l t upon t h e Hardys who w e r e a c t u a l occupants of t h e land f o r many years. Nor can w e ignore t h e f a c t t h a t L i l l i a n Watt had s u b s t a n t i a l l y changed h e r -6- p o s i t i o n by conveying t h e property t o t h e Hardys and there- f o r e she was i n no p o s i t i o n t o convey t h e land t o t h e S t o v a l l s . W e cannot say, moreover, t h a t t h e d e n i a l of S t o v c l l s rcquesc f o r s p e c i f i c performance operates as harshly upon them. They never had possession of t h e property and made no l e a s e r e n t a l payments under t h e l e a s e they had signed with L i l l i a n W a t t . Although t h e S t o v a l l s l a t e r wrote a letter t o L i l l i a n Watt and a t t o r n e y Mason s t a t i n g t h a t they would m e e t t h e $20,000 o f f e r e d by t h e Hardys and made arrangements f o r such financing, they made no payments toward a purchase p r i c e . I n balancing t h e e q u i t i e s it is c l e a r t h a t t h e t o t a l circum- stances favor t h e r e s u l t reached here by t h e t r i a l court. W e note furthermore, t h a t t h e t r i a l c o u r t awarded damages a g a i n s t L i l l i a n W a t t f o r her breach of t h e agreement with t h e S t o v a l l s , and t h e S t o v a l l s had thus been made whole. I n contending t h a t she snould not have t o respond i n damages t o t h e S t o v a l l s , L i l l i a n Watt contends t h a t t h e S t o v a l l l e a s e w a s s u b j e c t t o a condition precedent t h a t t h e Hardys vacate t h e property, which event never occurred. She thus contends t h a t t h e lease d i d n o t i n f a c t commence and thus no l i a b i l i t y can accrue f o r any breach of t h e agreement per- m i t t i n g t h e S t o v a l l s t h e r i g h t t o m e e t t h e purchase p r i c e o f f e r e d by anyone else. Such a contention, however, f l i e s i n t h e f a c e of t h e c l e a r Lmguage of t h e l e a s e i t s e l f which provided t h a t t h e t e r m w a s t o s t a r t "Three Years from and a f t e r t h e s a i d 3rd day of March, 1969." H e r contention is, moreover, i n c o n s i s t e n t with t h e circumstances surrounding i t s execution and with her conduct i n r e l a t i o n t o t h e l e a s e a f t e r its execution. A t t h e t i m e she signed t h e l e a s e with t h e S t o v a l l s , L i l l i a n Watt and a t t o r n e y Mason had unfriendly f e e l i n g s toward t h e Hardys, and it is c l e a r they d i d not want them t o continue -7- i n possession. Indeed, u n t i l l i t i g a t i o n appeared imminent, L i l l i a n W a t t c o n s i s t e n t l y operated on t h e assumption t h a t t h e S t o v a l l l e a s e was v a l i d and she and her a t t o r n e y had made e f f o r t s t o place t h e S t o v a l l s i n possession. Further- more, n e i t h e r she nor h e r a t t o r n e y ever contended t h a t t h e S t o v a l l l e a s e was i n v a l i d a t t h e t i m e when t h e S t o v a l l s w e r e pressing her and a t t o r n e y Mason f o r information on o t h e r b i d s s o t h a t t h e S t o v a l l s could decide whether o r not t o m e e t any b i d s t h a t had been made. Attorney Mason f i r s t p u t f o r t h t h e theory t h a t t h e S t o v a l l l e a s e was conditioned upon t h e Hardys vacating t h e property only a f t e r t h e s a l e t e r m s t o t h e Hardys had been agreed upon and a t t o r n e y s f o r t h e Hardys had made a r e l e a s e of t h e S t o v a l l l e a s e , a t i t l e requirement. The t r i a l c o u r t s p e c i f i c a l l y found t h a t t h e S t o v a l l l e a s e with L i l l i a n W a t t was not conditioned upon t h e Hardys f i r s t vacating t h e property. S u b s t a n t i a l c r e d i b l e evidence supports t h i s finding. Under s e c t i o n 27-1-314, MCA, i f t h e breaching p a r t y operates i n bad f a i t h , t h e measure of damages is t h e d i f f e r e n c e between t h e agreed p r i c e and t h e value of t h e e s t a t e a t t h e t i m e of t h e breach, p l u s expenses properly incurred i n preparing t o e n t e r t h e land. The events here c l e a r l y demonstrate t h a t L i l l i a n Watt, d i r e c t l y , and i n d i r e c t l y through h e r a t t o r n e y , acted i n a fashion c o n s t i t u t i n g bad f a i t h . By September 1969, L i l l i a n W a t t had decided t o sell t h e property and had informed attorney Mason of her decision. By t h i s t i m e she had already signed t h e l e a s e agreement with t h e S t o v a l l s . Attorney Mason's letter t o t h e S t o v a l l s on September 15, 1969, informed them t h a t t h e property was f o r s a l e and s o l i c i t e d an o f f e r . Later, on October 16, 1969, t h e S t o v a l l s s e n t a letter t o L i l l i a n Watt reminding h e r of t h e l e a s e agreement, t h e i r r i g h t t o t a k e possession, and t h e option t o purchase provision i n t h e lease. I n t h i s r e s p e c t t h e S t o v a l l s requested information a s t o any o f f e r which L i l l i a n Watt received s o t h a t t h e S t o v a l l s could decide whether o r n o t t o m e e t t h e o f f e r and e x e r c i s e t h e i r r i g h t s under t h e lease. I n response L i l l i a n Watt wrote t o t h e S t o v a l l s on October 27, 1969 and t o l d them t h a t she d i d not know whether a t t o r n e y Mason had received any b i d from t h e Hardys, b u t she assured t h e S t o v a l l s t h a t they would most c e r t a i n l y be consulted and given a chance t o m e e t t h e bid. Nothing t r a n s p i r e d u n t i l January 1970 when a t t o r n e y Mason wrote i d e n t i c a l letters t o t h e S t o v a l l s and t h e Hardys s o l i c i t i n g o f f e r s f o r t h e property. The Hardy's a t t o r n e y responded with an o f f e r of $20 per a c r e , making $19,200 t h e t o t a l o f f e r . The S t o v a l l s responded by telephoning both L i l l i a n Watt and a t t o r n e y Mason and asked t o determine what b i d they would need t o m e e t i n o r d e r t o e x e r c i s e t h e i r option under t h e l e a s e agreement. But n e i t h e r L i l l i a n Watt nor a t t o r n e y Mason gave a f o r t h r i g h t answer t o t h e S t o v a l l s . L i l l i a n Watt r e f e r r e d t h e S t o v a l l s t o a t t o r n e y Mason and a t t o r n e y Mason r e f e r r e d t h e S t o v a l l s t o L i l l i a n W a t t . A t t h i s p o i n t , t h e S t o v a l l s could not o b t a i n anything d e f i n i t e . Sometime later, L i l l i a n Watt mentioned a f i g u r e of $20,000 t o t h e S t o v a l l s , and i n response t h e S t o v a l l s wrote both L i l l i a n W a t t and a t t o r n e y Mason asking f o r t h e exact f i g u r e which they had t o meet i f they w e r e t o e x e r c i s e t h e i r option. Neither L i l l i a n W a t t ror a t t o r n e y Mason responded t o t h e S t o v a l l s ' request. Furthermore, a t t h e t i m e t h e S t o v a l l s had w r i t t e n t h i s letter, a t t o r n e y Mason had already decided t o accept t h e Hardy o f f e r and i n f a c t t h e attorney f o r t h e Hardys had already tendered a 10 percent down payment and a -9- c o n t r a c t f o r deed t o a t t o r n e y Mason. Mason, however, never disclosed t h i s information t o t h e S t o v a l l s although it does appear t h a t he t o l d t h e S t o v a l l s of t h e $20,000 o f f e r made by t h e Hardys. A s a r e s u l t of t h e S t o v a l l s l e a r n i n g of t h e $20,000 o f f e r by t h e Hardys, t h e S t o v a l l s on March 27, 1970 s e n t letters t o both L i l l i a n Watt and attorney Mason advising them t h a t they would m e e t t h i s $20,000 b i d and e x e r c i s e t h e i r option under t h e lease. But n e i t h e r L i l l i a n Watt nor a t t o r n e y Mason responded t o t h e letters. Furthermore, L i l l i a n Watt and a t t o r n e y Mason f a i l e d t o r e t u r n numerous phone c a l l s t o them by t h e S t o v a l l s i n r e l a t i o n t o t h e property involved. Before t h e Hardys signed t h e purchase agreement, t h e i r a t t o r n e y examined t h e a b s t r a c t s and found a d e f e c t i n t i t l e , namely, t h e S t o v a l l lease with t h e option t o purchase provision, which had been recorded on September 2 2 , 1969. A s a r e s u l t of t h i s , L i l l i a n Watt signed a letter of indemnity t o p r o t e c t t h e Hardys from any damages which might flow a s a r e s u l t of any a c t i o n brought by t h e S t o v a l l s i n r e l a t i o n t o t h e property involved. L i l l i a n W a t t a l s o agreed t o pay any l e g a l f e e s incurred i n r e l a t i o n t o such a c t i o n brought by t h e S t o v a l l s . W e cannot say, i n l i g h t of a l l t h e s e circumstances, t h a t L i l l i a n W a t t ' s conduct, both personally, and through her a t t o r n e y , was less than bad f a i t h i n r e l a t i o n t o t h e dealings with t h e S t o v a l l s . The damages awarded here a r e c l e a r l y within t h e l i m i t s of s e c t i o n 27-1-314, MCA. Damages w e r e e s t a b l i s h e d by a simple process. L i l l i a n W a t t sold t h e 960 a c r e s t o t h e Hardys a t a p r i c e of $20 per acre. Joe Cormier, a l o c a l rancher f a m i l i a r with t h e market conditions f o r land s a l e s , t e s t i f i e d t h a t t h e L i l l i a n Watt lan2 was conservatively worth -10- $30 an acre. Cormier had made a s a l e of h i s own ranchland a t about t h e s a m e t i m e as L i l l i a n W a t t s o l d her property t o t h e Hardys. Cormier received a p r i c e of $35 per a c r e f o r comparable land, but t h a t was i n conjunction with a ranch s a l e involving a l a r g e q u a n t i t y of deeded land, p l u s l e a s e s . The t r i a l c o u r t found t h a t t h e L i l l i a n Watt property w a s reasonably worth $30 p e r acre. There is no record, however, of any expenses incurred by the S t o v a l l s preparatory t o e n t e r i n g t h e land t o take possession. There is testimony t h a t one-half m i l e of fence was r e b u i l t , but no attempt was made t o itemize t h e c o s t s o r expenses s o incurred. I t is c l e a r , t h e r e f o r e , t h a t t h e measure of damages i s ($30) t h e d i f f e r e n c e between t h e value per acre/as found by t h e t r i a l ($20) c o u r t , and t h e a c t u a l c o n t r a c t p r i c d , which i s $10 p e r a c r e . Accordingly, t h e t r i a l c o u r t w a s c o r r e c t i n e n t e r i n g judgment a g a i n s t L i l l i a n Watt f o r t h e amount of $9,600 and c o s t s . The judgment of t h e D i s t r i c t Court i s affirmed. W e Concur: Chief J u s t i c e u J u s t i c e s Justice John C. Sheehy dissenting: I concur in part and dissent in part from the foregoing opinion. The statute under which the District Court granted the the judgment in the sum of $9,600 to/Stovalls was section 17-306, R.C.M. 1947, now section 27-1-314, MCA, which provides: "The detriment caused by the breach of an agree- ment to convey an estate in real property is deemed to be the price paid, and the expenses properly incurred in examining the title and preparing the necessary papers, with interest thereon; but adding thereto, in case of bad ---- faith, the difference between the price agreed to be paid and the value of the estate agreed to be conveyed, at the time of the breach, and the expenses properly incurred in preparing to enter upon the land." (Emphasis added.) The District Court confined itself to that statute in determining damages. When one examines the language of section 27-1-314, MCA, above, one sees that damages thereunder can take two forms and two determinations: (1) a return of monies paid and expenses incurred in document preparation; and, (2) if bad faith - is present the difference between the price agreed upon and the value of the estate agreed to be conveyed at the time of the breach. Under the first portion of section 27-1-314, MCA, the District Court found that no damages had been proved, since no purchase price had been paid and there was no evidence relating to document preparation or other expenses. In con- nection with the second determination, the District Court found bad faith on the part of Lillian Watt, and on that basis awarded the damages stated above. The District Court found that the conduct of Lillian Watt in refusing to recognize the option agreement as having any validity was bad faith "admittedly because of the guidance of [her attorney]." The District Court further found that -12- Lillian Watt was not guilty of fraud or misrepresentation, and it did not find that she had unclean hands as against the Stovalls. The controlling element as far as the District Court is concerned is that Lillian Watt, through the advice of her counsel, took the position that the Stovall lease was not a binding lease because the condition precedent, "possession thereof to be given as soon as present tenant vacates same . . ." never occurred. The District Court found that Lillian Watt's position that the lease was not binding until the possession transferred was not asserted at the time the Stovalls were pressing Mason and Lillian Watt for information on the bids so they could exercise the option, and that "it was not until after the sale to the Hardys had been agreed upon and Hardys attorney made a release of the Stovall lease a title requirement, that Mason put forth the theory that the Stovall lease was conditioned upon Hardy vacating." This determination by the District Court however, does not square with the written evidence of the case. In the time when attorney Mason was soliciting bids from the Hardys and the Stovalls, between January 1970 and March 27, 1970, the latter date being when the Stovalls indicated they would meet the $20,000 bid, attorney Mason solicited the bids from both parties to avoid "cutthroat action". It also appears that when the facts of the dual leases became known to all the parties, that the attorney wrote both to Hardy and Stovall suggesting that they share the lease, one to take the lease for farm purposes, and the other to have the grazing privileges after the farming was completed in the fall. Indeed, on April 5, 1969, nearly - - a year before the sale to Hardys was consummated, Lillian Watt had written to -- her attorney "the lease to the Stovalls was contingent upon the Hardys moving off the place, and no money has changed hands . . ." I think the evidence is clear that the contention -13- that Stovall had a conditional lease was not an afterthought on the part of Lillian Watt, but her view of the legal status of the Stovall lease all along. While such legal position may have been mistaken, when we consider her actions from the aspect of bad faith, she cannot be characterized as a miscreant. This brings us to a consideration of what constitutes "bad faith" in connection with an award of damages under section 27-1-314, MCA. It is a term that cannot be defined with scientific precision. It has been held that "good faith" is that ordinarily exhibited by a seller who is unable to perform through no fault of his own; while "bad faith" is that s.hown by a seller who refuses to perform though able to do so. Charles County Broadcasting Co., Inc. v. Meares (Md. 1973), 311 A.2d 27, 31. As applied to an insurer under an insurance policy it is said that "bad faith" embraces more than negligence and imports dishonest purpose or conscious wrongdoing. Simpson v. Motorists Mutual Insurance Company (7th Cir. 1974), 494 ~ . 2 d 850, 853. Cal.2d 499, Although in Rasmussen v. Moe (1956), 1381 292 P.2d 226, 229, it was held that the negligence of a vendor which put him in a position of being unable to perform his contract was sufficient to show bad faith, it has also been held in California that in general bad faith extends beyond fraud or dishonesty and embraces unfair dealings; it often denotes a deliberate refusal to perform without just or reasonable cause. County of Inyo v. City of Los Angeles (Cal. 1978) , 144 Cal.Rptr. 71, 77, 78 Cal.3d 82. A refusal to perform without just cause or excuse is sufficient to constitute bad faith according to Brandolino v . Lindsay (Cal. 1969), 75 Cal.Rptr. 56, 60, 269 Cal.2d 319. I would hold that before bad faith may be found as to a vendor who refuses to perform an agreement to convey real estate, such bad faith must be based upon some motive of self-interest or ill will toward the other party. Those elements are lacking entirely here. The refusal to perform has not bene- fited Lillian Watt. In fact, the evidence indicates that the property which she agreed to sell had a value at the time of the trial of $157,000. While that is not a factor to be considered, since section 27-1-314, MCA requires the value to be determined as of the time of the breach, it does indicate that she was not motivated by self profit or self-interest in refusing to convey the property to Stovalls. Nor can it be said from the evidence that her decision was based upon ill will toward Stovall. She made her decision apparently because she recognized that the Hardys had farmed her properties since the 1950's and had acted in good faith in making their lease payments and procuring a new lease from the agent of her predecessor in ownership. Of course, she had received no monies of any kind under the Stovall lease. Therefore since her actions do not constitute bad faith in the premises, the award of damages against her on that ground should be reversed. Nothing I say here should be taken to mean that in a proper case a prospective vendee or option holder is precluded from recovering damages not only under section 27-1-314, MCA, but also under section 27-1-311, MCA. Section 27-1-311 is the general statute on the measure of damages for breach of contract, and incorporates the ancient principle of Hadley v. Baxendale (1854), 9 Exch. 341, 156 Eng. Reprint 145; Laas v. Mont. Hwy. Comm'n. et al. (1971), 157 Mont. 121, 131, 483 P.2d 699. The general rule is that the measure of damages in a contract breach is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby or which in the ordinary course of things will be likely to result therefrom. Section 27-1-314, MCA, is not necessarily exclusive. Wiseman v . Holt (1973), 163 Mont. 387, 517 P.2d 711. But this case was tried under the theory that extra damages were recoverable on the ground of bad faith and on that ground I would determine that the award of damages against Lillian Watt must fall. Accordingly, I concur in the majority opinion that specific performance is not applicable here but I dissent to the affirmance of the judgment against Lillian Watt in favor of the Stovalls. ................................ Justice