Court Opinion

ID: 877120
Source: CourtListenerOpinion
Date Created: 2013-06-04 21:11:02.817385+00
Date Added: 2024-06-11T09:57:12.334419
License: Public Domain

No. 14965
                 IN THE SUPREME COURT OF THE STATE OF MONTANA
                                1980

JOSEPH FRASER,
                     Plaintiff and Appellant,
       VS   .
DONALD D. EDMISTEN,
                     Defendant and Respondent.

Appeal from:    District Court of the Fifth Judicial District,
                Honorable Frank E. Blair, Judge presiding.
Counsel of Record:
    For Appellant:
        Chester L. Jones, Virginia City, Montana
    For Respondent :
        Burgess, Joyce, Prothero   &   Whelan, Butte, Montana

                                 Submitted on briefs: April 25, 1980
                                               Decided :
                                                           SEP 8 - 798p
Mr. J u s t i c e D a n i e l J .          Shea      delivered         the   Opinion      of    the
Court.

        p l a i n t i f f , J o s e p h H.    F r a s e r , a p p e a l s from a judgment i n
Madison         County        District             Court        denying      his      claim     for
r e s t i t u t i o n of payments made u n d e r a n o r a l c o n t r a c t f o r t h e

p u r c h a s e of       defendant's         tavern.        The d e f e n d a n t ,   Donald D.
Edmisten,          counterclaimed             in     the    alternative         for      specific

p e r f o r m a n c e o r f o r f e i t u r e t o him o f t h e downpayments made by

Fraser.            The    trial     court       granted         only    forfeiture        of    the
downpayments.
        Although p l a i n t i f f Fraser r a i s e s four i s s u e s , t h r e e of

them      are      moot     because           they    are       directed      at      Edmisten's
c o u n t e r c l a i m f o r s p e c i f i c p e r f o r m a n c e which t h e t r i a l c o u r t
did not grant.                Nor     h a s Edmisten            appealed     from t h e t r i a l

court's         order       refusing          to     grant       his    counterclaim            for
s p e c i f i c performance.           A c c o r d i n g l y , t h e s o l e i s s u e on a p p e a l

i s t h e s u f f i c i e n c y of     t h e e v i d e n c e t o s u p p o r t t h e judgment

p e r m i t t i n g f o r f e i t u r e of t h e payments.           W affirm.
                                                                      e
        A purchaser           of    r e a l p r o p e r t y under       an o r a l      agreement
who     voluntarily           terminates             the contract cannot                 recover

p a r t i a l p a y m e n t s on t h e p u r c h a s e p r i c e s o l o n g a s t h e s e l l e r
is w i l l i n g     and a b l e t o p e r f o r m h i s p a r t o f          t h e agreement.
P e r k i n s v.     Allnut     ( 1 9 1 3 ) , 47 Mont.           1 3 , 1 5 , 1 3 0 P.    1, 1-2.

Although        Fraser       relies          in part       on    section     28-1-104,         MCA,

which c o d i f i e s an e x c e p t i o n t o t h i s g e n e r a l r u l e t h e s t a t u t e
h a s no a p p l i c a t i o n h e r e .      It provides:

       "Whenever by t h e t e r m s o f a n o b l i g a t i o n a p a r t y
       thereto incurs a f o r f e i t u r e or a l o s s in the
       n a t u r e o f a f o r f e i t u r e by r e a s o n o f h i s f a i l u r e
       t o c o m p l y w i t h i t s p r o v i s i o n s , h e may b e
       relieved              therefrom           upon       making         full
       compensation t o t h e o t h e r p a r t y , except i n t h e
       c a s e of a g r o s s l y n e g l i g e n t , w i l l f u l , o r
       f r a u d u l e n t b re a c h of d u t y . "
        W h a v e c o n s t r u e d t h i s s t a t u t e t o mean
         e                                                                                 " t h a t a person

may o b t a i n r e l i e f u n d e r it i n any c a s e where h e s e t s f o r t h

f a c t s which a p p e a l t o t h e c o n s c i e n c e o f a c o u r t o f e q u i t y . "

Lewis      v.     Starlin         ( 1 9 5 4 ) , 1 2 7 Mont.               474,       477-78,         267    P.2d

1 2 7 , 128-29.            F o r f e i t u r e c a s e s i n v o l v e two c o m p e t i n g s o c i a l

policies.             The     general           rule      set    forth           i n Perkins,            supra,

encourages           enforcement               of     agreements               though        they     may     be

technically deficient.                         Lewis v.         Starlin,              supra,      1 2 7 Mont.

a t 477,        267 P.2d        a t 128.             On t h e o t h e r h a n d , we h a v e n o t e d

t h a t t h e law d o e s n o t f a v o r n e e d l e s s f o r f e i t u r e s .                 P a r r o t v.

Heller          (1976),       171      Mont.          212,      215,           557     P.2d       819,      820,

relying         on Y e l l o w s t o n e       C o u n t y v.    Wight            (1943),         1 1 5 Mont.

411, 417, 1 4 5 P.2d 5 1 6 , 518.                        S e c t i o n 28-1-104,              MCA,    strikes

a b a l a n c e between t h e s e c o m p e t i n g p o l i c y c o n s i d e r a t i o n s .                 It

grants          relief       from      forfeitures               in           most     instances,           but

upholds          forfeiture          in        the     case     of        a     "grossly          negligent,

w i l l f u l , o r f r a u d u l e n t b r e a c h o f d u t y by t h e p e r s o n s e e k i n g

relief       from f o r f e i t u r e . "            Here t h e t r i a l            court       found      that

F r a s e r had i n d e e d r e p u d i a t e d t h e c o n t r a c t .

        To      be    entitled            to        relief,      Fraser              had    to     establish

either          (1) t h a t      the       seller,           Edmisten,               was    unwilling         or

unable       to carry out the contract;                              or       ( 2 ) t h a t he,       Fraser,

had c o m m i t t e d no " g r o s s l y n e g l i g e n t ,           willful,             or fraudulent

breach       of      the    contract,           while        affirmatively                  setting        forth

f a c t s t h a t a p p e a l t o a c o u r t of                equity."              The t r i a l        court

was n o t s a t i s f i e d w i t h h i s p r o o f n o r do w e s e e any r e a s o n t o

upset the t r i a l c o u r t ' s decision.

        The       trial      court        found         that    Edmisten              was     willing        and

able t o carry out                 the contract.                 Thus,           the       fact      that    the

c o n t r a c t was n o t        in writing              and    therefore              i n v i o l a t i o n of

t h e s t a t u t e of f r a u d s ,       should not permit Fraser t o p r e v a i l

i n h i s a t t e m p t a t r e c o v e r i n g h i s c o n t r a c t payments.                       A clear
factual        dispute          existed         on    this        question,          and    it     was

resolved        i n f a v o r of       Edmisten.              Fraser contends t h a t t h e
f e d e r a l t a x l i e n s on t h e p r o p e r t y s t i l l e x i s t i n g a t t h e t i m e
of t r i a l d e m o n s t ra t e d E d m i s t e n ' s i n a b i l i t y t o t r a n s f e r c l e a r

title.         But       Edmisten        testified          at     length      concerning          his

a s s e t s , s o l v e n c y and a b i l i t y t o pay o f f t h e l i e n and p r o v i d e
clear       t i t l e t o Fraser.             He    s a i d h e would h a v e p r o v i d e d        a

clear        title       when     the     parties           signed       a    contract.            The

e v i d e n c e s u f f i c e s t o j u s t i f y a f i n d i n g i n f a v o r of E d m i s t e n
on t h i s i s s u e .

        The     trial        court       also        found       that     Edmisten         made     no

m i s r e p r e s e n t a t i o n s t o F r a s e r and t h u s c o n c l u d e d t h a t F r a s e r
had n o t made a showing s u f f i c i e n t t o move a c o u r t o f e q u i t y
to    relieve        him o f      the     forfeiture.              The e v i d e n c e s u p p o r t s
t h i s conclusion.             The e v i d e n c e i s s u f f i c i e n t t o j u s t i f y t h e
finding        that      Edmisten        was        "ready,       willing,       and       able"    to

furnish either              t i t l e i n s u r a n c e or an a b s t r a c t of           title to

Fraser.        E d m i s t e n t e s t i f i e d t h a t he would h a v e p r o v i d e d o n e
or    the     other        when    the    contract           was    signed.          He     further

testified           that    the     proposed         written        contract         between       the
p a r t i e s e x p r e s s l y r e q u i r e d him t o g u a r a n t y c l e a r          title    to

Fraser.        The t r i a l c o u r t found t h a t E d m i s t e n had d i s c h a r g e d

a l l of      the     l i e n s encumbering            the property           except        for    the

federal        tax       lien     that        was     "of     record."           The       evidence
supports        these        findings.              Fraser       admitted       he     knew       that
Edmisten        had      renewed        the    tavern's          liquor      license        and    had
paid     t h e back        s t a t e t a x e s on t h e          premises.        Furthermore,
F r a s e r ' s a t t o r n e y i n t r o d u c e d i n t o e v i d e n c e a c e r t i f i e d copy
of     the    notice         of    a     federal        tax       lien       encumbering           the
premises.           At     that time,         h e s t a t e d t h a t i t was on f i l e i n
t h e Madison County C l e r k and R e c o r d e r ' s O f f i c e .                 The d e t a i l s

o f t h e l i e n a g a i n s t t h e p r o p e r t y were r e a d i l y a c c e s s i b l e t o
Fraser.    He cannot complain, therefore, that he was not able

to learn the specifics of the tax liens.

     The judgment of the District Court is affirmed.

We Concur:

          Chief Justice
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  ,'/          Justices