Opinion ID: 880458
Heading Depth: 1
Heading Rank: 2

Heading: issues

Text: Were Welborns entitled to planting and harvesting costs under a theory of unjust enrichment? Welborns claim they were entitled to restitution for their costs, incurred during the holdover period, for the planting and harvesting of crops which they lost when the Ruegseggers re-entered the property. This is an equitable claim under the theory of unjust enrichment and quasi-contract. We have held that equitable issues are a matter of discretion resting with the District Court and will be sustained unless an abuse of discretion is shown. Tope v. Taylor (Mont. 1988), 768 P.2d 845, 848, 45 St. Rep. 2242, 2246; Madison Fork Ranch v. L & B Lodge Pole Timber Products (1980), 189 Mont. 292, 302, 615 P.2d 900, 906. Welborns were holdover tenants during the period for which they seek restitution. They had no right to remain on the property. Any ownership rights Welborns may have had in the property were extinguished in the foreclosure and quiet title action. As stated by the United States Bankruptcy Judge in his order of July 7, 1987: I conclude that by the date of the Chapter 12 bankruptcy petition the Debtors held no valid property right or interest in the land and property sold under Contract For Deed of December 14, 1979, and such interest had fully terminated by the agreement of the parties. Welborns argue, however, that they acted under a mistake of law when they filed their bankruptcy petition, and thus should be entitled to restitution. We disagree. Section 53 of Restatement of the Law of Restitution states in part: (2) A person who, because of mistake of law, reasonably but erroneously believing that he, or a third person, on whose account he acts is the owner: (a) causes improvements to be made upon the land of another, is entitled to restitution for the value of the labor and materials used therein to the extent that the land is increased in value if the mistake is reasonable, as a condition to recovery by the owner of the land in equitable proceedings or in an action of trespass or other action for the mesne profits ... (Emphasis added.) Additionally, § 42 of Restatement of the Law of Restitution states in part: (1) Except to the extent that the rule is changed by statute, a person who, in the mistaken belief that he or a third person on whose account he acts is the owner, has caused improvements to be made upon the land of another, is not thereby entitled to restitution from the owner for the value of such improvements; but if his mistake was reasonable, the owner is entitled to obtain judgment in an equitable proceeding or in an action of trespass or other action for the mesne profits only on condition that he makes restitution ... (Emphasis added.) In Montana, a defendant in a quiet title action is entitled to recover the value of improvements if he was holding under color of title adversely to the claim of the plaintiff, in good faith ... Section 70-28-110, MCA. Welborns, however, were not holding under color of title, but were merely holdover tenants. Additionally, it is apparent from Mr. Welborn's testimony that the holdover and the bankruptcy petition were not in good faith. The District Court concluded that the Welborns' act in holding over was wrongful and that their claims were a flagrant violation of the [lease] agreement ... The District Court carefully considered the issues of this case and concluded that the Welborns did not come into this Court with clean hands. As the court stated in its Memorandum: This Court ordinarily would, and has, stretched the law to the limit in an effort to provide equitable relief to a distressed rancher/farmer caught up in the depressed agricultural economy of the times. To do so, however, there must be some peg to hang the equitable hat. None exists in this case. If it ever existed, it was extinguished on December 30, 1986, by the AGREEMENT & RELEASE incorporated into a judgment of this Court. The equities now lie with the RUEGSEGGERS and primarily because of the desperate but wrongful acts of the WELBORNS. The District Court followed the maxim He who seeks equity must do equity and properly denied the claim for restitution. Welborns have failed to show any abuse of discretion.