Court Opinion

ID: 875587
Source: CourtListenerOpinion
Date Created: 2013-06-04 20:06:22.144535+00
Date Added: 2024-06-11T12:59:20.444754
License: Public Domain

No. 12386

        I N THE SUPREME COURT O THE STATE OF M N A A
                               F              OTN

                                       1973

STATE e x re1 JAMES R. HOWETH,

                           p l a i n t i f f and A p p e l l a n t ,

D. A. DAVIDSON & CO. , a Montana
C o r p o r a t i o n ; and I A N B. DAVIDSON and
LEON WEAR;

                           Defendants and Respondents.

Appeal from:       D i s t r i c t Court of t h e E i g h t h J u d i c i a l D i s t r i c t ,
                   Honorable R. J . Nelson, Judge p r e s i d i n g .

Counsel o f Record:

     For Appellant :

            Loble, P i c o t t e and Loble, Helena, Montana
            Gene P i c o t t e a r g u e d , Helena, Montana

     F o r Respondents :

            Church, H a r r i s , Johnson and W i l l i a m s , Great F a l l s ,
             Montana
            C h a r l e s C. Love11 and Richard F. G a l l a g h e r a r g u e d ,
             Great F a l l s , Montana

                                                        Submitted:        September 24, 1973

                                                           Decided :    DEC 8 6 lm.
Mr Justice Frank I. Haswell delivered the Opinion of the Court.

          This action began as a mandamus action filed by James
R. Howeth, who claimed to be a stockholder in defendant D. A.
Davidson   &   Company, to secure access to financial and other
records of the company.        The application for writ was filed in
Lewis and Clark County against D. A. Davidson      &   Company, Ian B.
Davidson, as president, and Leon Wear, as secretary and custodian
of the corporate records.       Venue was changed by stipulation to
Cascade County.     Defendants counterclaimed, demanding specific
performance of a buy-back agreement covering plaintiff's stock
and seeking equitable relief.       At the time set for trial, plain-
tiff dismissed his petition, interposed additional affirmative
defenses to the counterclaim, and immediately thereafter, the
counterclaim and defenses came on for trial before the Hon. R. J.
Nelson, sitting without a jury, in the district court of Cascade
County.    The court granted defendant specific performance of the
stock buy-back agreement.       From this judgment, plaintiff appeals.
          D. A. Davidson   &   Company is a closely held corporation,
conducting a stock brokerage business in Montana.        Howeth was an
employee of Davidson Company from 1959 until September 30, 1970.
He was employed as a stock salesman, manager of Davidsonls Helena
branch office, and he became a vice president and director of
the company in 1964 and 1969, respectively.
          In 1965 Howeth and the Davidson Company entered into a
written agreement whereby Howeth would purchase 60 shares of
treasury stock held by the corporation.       Howeth tendered $15,000
for these shares, representing approximately 50% of book value.
As part of this agreement the corporation retained an option to
repurchase the stock within 90 days in the event Howeth's em-
ployment was terminated for any reason.       The agreement provides

that if said event should occur       " * * * the purchase price shall
be fifty percent (50%) of the book value, or the cost basis of
the SECOND PARTY in the stock, whichever is greater (this price
may be increased upon a majority vote of the Board of Directors
of the CORPORATION, but not to exceed one hundred percent (100%)
   book value. ) ''
         Sixty shares of stock evidenced by Stock Certificate
#16 was issued to Howeth pursuant to this agreement.      At the
time of issuance the stock certificate contained the following
language written on the reverse side:
         "The holder of this certificate has a written
         agreement with the Pacific Coast Stock Exchange,
         dated January 22, 1965, which states 'that so
         long as the corporation is a member of the ex-
         change no stock in the corporation shall be
         transferred, sold, assigned, pledged or otherwise
         encumbered or disposed of without the prior
         written consent of such exchange.'"
         On September 30, 1970, Ian Davidson, president of the
Davidson Companyrpersonally delivered a letter written by him-
self to Howeth.       The letter informed Howeth that as of this day
his employment with the Davidson Company was terminated.
         Over the course of the next three months the Davidson
Company was conducting negotiations with Howeth for the repurchase
of his stock.    On December 2, 1970, Ian Davidson wrote Howeth to
advise him:
         " * * * pursuant to a corporate resolution
         passed on t.he 30th day of November, 1970, at
         a special meeting of the Board of Directors of
         D. A. Davidson & Co. the corporation has elected
         to exercise its option to pu;chase your stock
         in the corporation.It
Upon unanimous vote of the board of directors present, Ian B.
Davidson, David S. Davidson, and William S. MacFadden, (represent-
ing 335 of the 440 shares outstanding) it was decided to purchase
the stock at 50% of book value as provided in the agreement dis-
cussed above.
         The repurchase price of Howethts stock was set at $43,473.30.
T h i s amount was computed by Howard Gaare, a c e r t i f i e d p u b l i c

accountant.

            The d i s t r i c t c o u r t found t h a t when Davidson Company

i n i t i a t e d t h e r e p u r c h a s e of Howeth's s t o c k , i t was d i s c o v e r e d

t h a t Howeth had borrowed monies from t h e Union Bank and T r u s t

Company, Helena, Montana, had d e l i v e r e d c e r t i f i c a t e #16 t o

s a i d bank, had e x e c u t e d a s t o c k power t o s a i d bank, and t h a t t h e

Union Bank c l a i m e d a s e c u r i t y i n t e r e s t i n c e r t i f i c a t e #16 a s

c o l l a t e r a l f o r t h e l o a n t o Howeth.     T h i s was done w i t h o u t t h e

knowledge o r c o n s e n t of e i t h e r t h e Davidson Company o r t h e Pac-

i f i c Coast S t o c k Exchange i n v i o l a t i o n of h i s agreement w i t h t h e

Davidson Company, and i n v i o l a t i o n of exchange r u l e s .

            Howeth had a l s o borrowed monies from t h e F i r s t N a t i o n a l

Bank, Helena, Montana and had g i v e n w r i t t e n i n s t r u c t i o n s t o t h e

Davidson Company i n a l e t t e r of May 1, 1967, t o pay s a i d bank

from t h e p r o c e e d s of any s a l e of s t o c k c e r t i f i c a t e #16.

            R o b e r t Burke, p r e s i d e n t o f t h e F i r s t N a t i o n a l Bank t e s t -

i f i e d Howeth had t o l d him on October 1 2 , 1970 t h a t he was g o i n g

t o s e l l h i s s t o c k t o t h e Davidson Company and t h a t t h e $12,800 he

owed t o F i r s t N a t i o n a l Bank would be p a i d by t h e Davidson Company

from t h e s a l e p r o c e e d s .   Burke confirmed t h i s u n d e r s t a n d i n g of

t h e c o n v e r s a t i o n w i t h Howeth by h i s l e t t e r of October 1 3 , 1970

which was r e c e i v e d by Howeth and Davidson.

            To remove any encumbrances upon t h e s t o c k t h e Davidson

Company caused i t s a t t o r n e y s t o p r e p a r e a w r i t t e n c o n s e n t t o t h e

payment t e r m s w i t h t h e December 2 , 1970 l e t t e r .             The c o n s e n t

p r o v i d e d t h a t Davidson would r e p u r c h a s e t h e s t o c k f o r $43,473.30,

payable a s follows:

               (a)   $8,357.00, p l u s i n t e r e s t , t o Union Bank and T r u s t

Zompany    .
               (b)   $12,800.00, p l u s i n t e r e s t , t o F i r s t N a t i o n a l Bank.
             (c)     The d i f f e r e n c e between t h e t o t a l of      (a) and ( b )

above and $23,473.30 t o Howeth, on o r b e f o r e December 31, 1970.

             (d)     Remainder o f $20,000.00 by D a v i d s o n l s p r o m i s s o r y

n o t e p a y a b l e t o Howeth, on o r b e f o r e J a n u a r y 1 5 , 1971.

            Howeth d i d r e c e i v e t h e December 2 , 1970 l e t t e r b u t d i d

n o t s i g n and r e t u r n t h e c o n s e n t .   H e d i d , however, keep and re-

t a i n t h e $20,000 p r o m i s s o r y n o t e d a t e d November 30, 1970, e x e -

c u t e d by I a n Davidson, and s a i d n o t e i s s t i l l i n Howeth's p o s s e s -

sion.

             I a n Davidson c a l l e d Howeth on o r a b o u t December 1 0 , 1970,

t o i n q u i r e why h e had n o t y e t r e t u r n e d t h e c o n s e n t forwarded t o

him w i t h t h e l e t t e r o f December 2 , 1970.             Howeth r e p l i e d t h a t he

was concerned a b o u t t h e income t a x consequences of t h e s t o c k r e -

purchase.

            I n o r d e r t o minimize Howethls income t a x e s on t h e $28,473.30

c a p i t a l g a i n t h e payment terms were r e v i s e d a s f o l l o w s :

             (a)     $8,357.00,       p l u s i n t e r e s t , t o t h e Union Bank and

T r u s t Company.

             (b)    The d i f f e r e n c e between ( a ) above and $13,000.00 t o

Howeth on o r b e f o r e December 31, 1970.

             (c)     $12,800 p r i n c i p a l and $531.20 i n t e r e s t ( t o t a l o f

$13,331.20) t o t h e F i r s t N a t i o n a l Bank on J a n u a r y 5 , 1971.

             (d)    The r e m a i n i n g b a l a n c e of $17,142.10 t o Howeth on

J a n u a r y 1 5 , 1972.

            Davidson a g a i n c a u s e d i t s a t t o r n e y s t o p r e p a r e a w r i t t e n

c o n s e n t t o t h e above payment t e r m s and a p r o m i s s o r y n o t e , and

m a i l e d t h e s e t o Howeth w i t h i t s l e t t e r of December 1 5 , 1970.

Howeth r e c e i v e d t h e l e t t e r and e n c l o s u r e s b u t d i d n o t s i g n and

r e t u r n t h e consent.       Howeth d i d , however, keep and r e t a i n t h e

$17,142.10 p r o m i s s o r y n o t e d a t e d November 30, 1970 which was s i g n e d

by I a n Davidson.
        Ian Davidson called Howeth on December 21, 1970 and
inquired about the papers sent Howeth on December 15.   Davidson
testified that Howeth reaffirmed his agreement to accept payment
and again promised to sign and mail the consent to Davidson.
At the time of that telephone conversation, Ian Davidson made a
note of the conversation in the upper right hand corner of the
file copy of the December 15 letter which reads:
        "656-6322
         called 12-21-70
         he said okay wld
         send papers back
         IBD"
Howeth, however, did not sign and return the consent papers.     In
fact he has denied that he ever agreed to accept the purported
offer by oral telephone conversation.   Howeth testified that he
found the letters "surprising" and "somewhat maddening" because
they seemed to assume that he had agreed to Davidson's propositions
when in fact he had not.
        Ian Davidson realizing that Howeth's written consent was
not forthcoming and the 90 day option period at its end, sent
Howeth another check.   The check was in the amount of $12,500 rep-
resenting the minimum payment the corporation was required to
tender as a down payment to exercise its option.   This letter and
tender of payment for the repurchase of the stock was dated Dec-
ember 30, 1970, 91 days after the event specified by the option,
i.e. Howeth's termination as an employee.
        The annual meeting of Davidson and Co. was held on Feb-
ruary 13, 1971.   Howeth received notice of that meeting.   Howeth
was not re-elected as a director.   At that meeting all the acts
of the officers and directors of the corporation were approved,
ratified and adopted, including the action by Ian Davidson and
the executive committee on November 30, 1970, in discharging
Howeth as officer and director of the corporation, effective
September 30, 1970.
        From the foregoing findings of fact the district court
concluded that the option for repurchase was timely exercised
by Davidson Company, resulting in a contract by the terms of
which Howeth is required to sell Davidson Company, certificate
#16 for $43,473.30.   And further that Howeth, by his actions,
is estopped to deny that Davidson properly exercised the option.
Howeth appeals from this judgment.
        The fundamental issue in this appeal is the sufficiency
of the evidence to support the judgment.   Three issues underlie
this determination:

        (1) Whether the option of the Davidson Company to purchase
Howeth's stock was properly exercised within the time specified
in the option?
        (2)   Whether the district court's judgment of specific
performance constitutes a harsh forfeiture which equity ought
not to enforce?

        (3)   Whether the telephone conversations during the month
of December, 1970, and all other alleged verbal communications
between Ian Davidson and Howeth violate the par01 evidence rule?
       At the outset, we observe that plaintiff lists numerous
findings of the district court that he contends are not supported
by the evidence.   We have examined these findings and the evidence
supporting each and conclude that with one exception the material
findings are supported by substantial, credible evidence.   This
exception relates to the finding that Howeth resigned as officer
and director of the Davidson Company on September 30; this find-
ing is not material, however, in view of the application of the
doctrines of ratification, waiver and estoppel discussed later
in this opinion.
       Howeth's primary contention on the first issue is that as
a director of the Davidson Company he was entitled to notice
of the board of directors' meeting of November 30, 1970.      It
was at that special meeting that the corporation passed a
resolution to exercise its option to repurchase his stock.
Howeth claims that the actions at said meeting were void because
notice was not given.
          The Davidson Companyton the other hand, contends that
even if notice was not properly given the action of the directors'
meeting to repurchase the stock was merely voidable and that
Howeth's subsequent actions constitute a ratification of the cor-
porate resolution.    By encumbering the stock, by requesting pay-
ment on different terms than contained in the agreement, by never
objecting to the tender, and by never objecting to not receiving
notice he led the corporation to believe that it had properly
exercised its option.    Therefore, Howeth should be estopped to
deny the validity of the corporate resolution.    In the alterna-
tive the Davidson Company claims that Howeth was disqualified
from voting by his personal interest.    Thus the directors' meet-
ing is not illegal because no notice to an interested director
is required.
          As a general rule notice of special meetings must be
given the directors, so that each one may be afforded an opportun-
ity to participate and vote.    Section 15-2239, R.C.M.   1947.    Under
this rule, such notice to all directors is essential to the power
of the board to do any deliberate act which shall bind the cor-
poration.
          When a number of directors are elected to manage the
affairs of the corporation, it is contemplated that the corpora-
tion shall have the benefit of the judgment, counsel and influence
of all.     In the absence of special circumstances or express
provisions to the contrary, every one of them should have an
opportunity to be present and take part in the deliberations
of the board and attempt to convince the other members even if
he represents a minority view.          The great weight of authority,
therefore, is to the effect that notice of a special meeting
must be given to every director, unless there is some express
provision in the charter or bylaws or established usage to the
contrary.      2 Fletcher Cyc. Corp. 8406.
            There is also authority to the effect that such action
by the board of directors is valid, although proper notice not
given, if all directors are present or the absent directors waive
notice, or if the acts done at the meeting are ratified by the
absent directors, or at a subsequent meeting at which all dir-
ectors have legal notice.        19 C.J.S. Corporations 8747, p. 88, 89.
Also a directors1 meeting is not illegal, or the action thereat
invalid, because of failure to give notice to a director who would
have been disqualified from taking part by reason of personal
interest.      19 Am Jur 2d, Corporations 81133; 2 Fletcher Cyc. Corp,
(Perm. Ed.) S413.      See also Alward v. Broadway Gold Min. Co., 94
Mont. 45, 53-54, 20 P.2d 647.
            The requirement for directors to act as a board rather
than individually is based upon the ground that they are not
authorized to act in any other way than by meeting and conferring
and not on the ground that they cannot act in any other way.
Therefore the stockholders or directors and corporation may be
estopped to deny the validity of their action where it is the
custom or usage of the directors to act separately or where
benefits have been received or the actions subsequently acquiesced
in or ratified by the directors.          2 Fletcher Cyc. Corp. S394, $429
et seq.; 19 C.J.S. Corporations 81016 et seq., p. 1015; American
B.   &   T. Co. v. Farmers' E.   &   M. Co., 63 Mont. 612, 208 P. 594.
            During the course of the 90 day option period Howethls
conduct is indicative of an acquiescence that may well consti-
tute a ratification of the resolution passed at the November 30
meeting.     Ian Davidson testified that several times during this
90 day period Howeth was advised of the resolution to repurchase
his stock for $43,743.30.      At no time during this period did
Howeth ever object to not receiving notice.
           Twice during the month of December the Davidson Company
caused its attorneys to prepare a written consent to the payment
terms and a promissory note, and mailed these to Howeth.         Each
time Howeth acknowledged receipt but failed to sign the consent
forms or object to the payment.        Instead Howeth requested the
splitting of payment terms to limit his personal taxes and to
permit the sale proceeds to pay off the debts in order to allow
the release of the stock certificate from the bank.         Such re-
quests justifiably led the Davidson Company to believe that
Howeth would accept repurchase pursuant to the repurchase agree-
ment and the directors' action.
        Affirmance of the district court's judgment can also be
founded upon the general principles of contract law.         Howeth was
required by sections 58-424 and 93-2201-3, R.C.M.         1947, to state
his objections to the December 2 and December 15 tenders.
           Section 58-424, R.C.M.   1947   provides:
           "Objections to mode of offer. All objections
           to the mode of an offer of performance, which
           the creditor has an opportunity to state at the
           time to the person making the offer, and which
           could be then obviated by him, are waived by
           the creditor, if not then stated."
           Section 93-2201-3, R.C.M.   1947   provides:
        "Objections to tender must be specified. The per-
        son to whom a tender is made must, at the time,
        specify any objection he may have to the money,
        instrument, or property, or he must be deemed
        to have waived it; and if the objections be
        to the amount of money, the terms of the instru-
        ment, or the amount or kind of property, he must
        specify the amount, terms, or kind which he
        requires, or be precluded from objecting
        afterward."
Not only did Howeth not object to the terms and the sufficiency
of those tenders, but the district court found that he spec-
ifically requested them and agreed to accept them.     Thus the
objections he now raises were waived.   Schultz v. Campbell, 147
Mont. 439, 413 P.2d 879; Sherlock v. Greaves, 106 Mont. 206,

        The estoppel and waiver contention is grounded upon the
equitable principle of estoppel.   That doctrine is set out in
section 93-1301-6(3), R.C.M.   1947, which provides:
        "Whenever a party has, by his own declaration,
        act, or omission, intentionally and deliberately
        led another to believe a particular thing true,
        and to act upon such .belief, he cannot, in any
        litigation arising out of such declaration, act,
        or omission, be permitted to falsify it."
        This Court has further defined estoppel and its essential
elements in Hustad v. Reed, 133 Mont. 211, 223, 321 P.2d 1083:
       "In defining this doctrine this court in Mundt
        vs. Mallon, 106 Mont. 242, 249, 76 P.2d 326, 329,
        and reiterated in City of ~illingsv. Pierce
        Packing Co., supra, said:
        "'"Generally speaking estoppel arises when a
        party by his acts, conduct, or acquiescence has
        caused another in good faith to change his posi-
        tion for the worse. [Citing cases.] The follow-
        ing six essential elements have been held neces-
        sary to constitute an equitable estoppel: '1.
        There must be conduct--acts, language, or silence--
        amounting to a representation or a concealment
        of material facts. 2. These facts must be known
        to the party estopped at the time of his said
        conduct, or at least the circumstances must be
        such that knowledge of then is necessarily im-
        puted to him. 3. The truth concerning these facts
        must be unknown to the other party claiming the
        benefit of the estoppel, at the time it was acted
        upon by him. 4. The conduct must be done with the
        intent.ion, or at least with the expectation, that
        it will be acted upon by the other party, or under
        such circumstances that it is both natural and
        probable that it will be so acted upon. 5. The
        conduct must be relied upon by the other party,
        and thus relying, he must be led to act upon it.
        6. He must in fact act upon it in such a manner
        as to change his position for the worse; in other
        words, he must so act that he would suffer a
        loss if he were compelled to surrender or forego
        or alter what he has done by reason of the first
        party being permitted to repudiate his conduct
        and to assert his rights inconsistent with it.'"'
        1117 Mont. 255, 161 P.2d 640.1"
        The six essential elements are met in this case.    First,
Howeth's response to the phone calls indicated his willingness
to sell, i.e. requesting payments to be made to banks and the
remaining balance which he would receive be deferred to 1971 for
tax purposes.   Ian Davidson and MacFadden testified that Howeth
promised to sell.   Second, Howeth knew of the resolution passed
at the meeting of November 30.   And yet he testified that he
never intended to sell his stock at 50% 02 book value.   He never
objected during this time to not receiving notice.   Third, Howeth's
conduct led the Davidson Company to believe the consent to pur-
chase would be signed.   They had no reason to believe that Howeth
would object to the repurchase or object to not receiving notice.
Fourth, based on the circumstances Howeth knew that his failure
to object would be relied upon by the Davidson Company and that
a meeting with notice to all directors would not be had within
the 90 day period unless he objected.   Fifth, although a formal
meeting could have been called had Howeth objected, the corpor-
ation held no such meeting because it relied upon Howeth's fail-
ure to object and his promise to sign the consent papers.     Sixth,
by relying on Howeth's representations the Davidson Company failed
to call another meeting of the board with the requisite notice.
By so doing the option period expired during which time the cor-
poration's right to repurchase could be exercised.   The above facts
estop Howeth from asserting that the tenders were not timely.
        The principles of waiver and estoppel are especially
applicable to an option contract such as the one before us.     Al-
though time is of the essence in an option contract, the rule is
well established that an optionor who has given a right to an
optionee may not do any act, or omit to perform any duty,
calculated to cause the optionee to delay in exercising the
right.   If he does the optionee may be excused from exercising
his option within the stated time.   This principal has been
succinctly summarized in 17 Am Jur 2d, Contracts S61, p. 399,
as follows:
         " * * * Thus, in this respect, the optionor may
         not make statements or representations calculated
         to cause delay * * *. Nor may the optionor, by
         his absence or evasive conduct, cause the optionee
         to delay in exercising his right to purchase * * *
         within the specified time. It has been held that
         if an optionor has prevented the exercise of the
         option within the stipulated period, the optionee
         is entitled to a reasonable time for action after
         the condition which necessitated the delay has
         ceased. "
         Contracts making time of the essence, and providing
for termination on default, will be enforced unless provisions
are waived, or the party is estopped from asserting them.      Huffine
v. Lincoln, 87 Mont. 267, 287 P. 629.   An optionor may expressly
or by voluntary acts or conduct, waive a requirement of a contract
of option to purchase, that exercise of the option shall be made
within a limited time, thereby excusing, under the general prin-
ciples relating to waiver, a delay of the optionee in that regard.
17 Am Jur 2d, Contracts 861.
         Estoppel does apply when as in this case, it was intend-
ed that the promise should be relied upon and a refusal to enforce
it would sanction a fraud or would result in injustice, especially,
if the promise or representation concerns the intended abandonment
of existing rights.   See Fiers v. Jackson, 123 Mont. 242, 211 P.2d
968.
         In this case failure to exercise the option would result
in the abandonment of the right to purchase Howeth's stock cer-
tificate.   Instead of telling Ian Davidson that he would not sell
his stock, he requested that the banks be paid, he requested terms
of payment which would give him favorable tax results, and he
promised and agreed to return the consents embodying those
terms.     Howeth's conduct evidencing his willingness to sell
and his requesting the change in payment terms caused the
Davidson Company's delay in exercising its option.        Accordingly,
Howeth is now estopped to object to the timeliness of the tender.
           The second issue involves the contention by Howeth that
forced sale of his stock at 50% of book value is a harsh for-
feiture from which this Court should grant him relief in accord-
ance with the provisions of section 17-102, R.C.M. 1947.        The
cases decided under that section almost all involve the rights
of a defaulting purchaser in a purchase contract.        Equity will
intercede in cases where forfeiture of the purchaser's equitable
title is provided by the purchase contract in the event of his
default.     If the defaulting purchaser can make a showing that
he is equitably entitled to such relief and that his breach of
duty was not grossly negligent, willful or fraudulent, the courts
will, in proper cases, relieve the defaulting purchaser from the
forfeiture.    See Kovacich v. Metals Bank   &   Trust Co., 139 Mont.
449, 365 P.2d 639; Shuey v. Hamilton, 142 Mont. 83, 381 P.2d 482.
         Howeth was allowed to buy stock in 1965 as a fringe bene-
fit to encourage participation in the corporate affairs.        He paid
less than one-half of book value for that stock, a total of
$15,000.00.    At that time Howeth signed the repurchase agreement
whereby the corporation could buy back the stock at 50% of book
value (or up to 100% if the corporation so approved) in the event
of termination of his employment.    Five years later the corpor-
ation exercised its option upon Howeth's termination as an em-
ployee at one-half of book value, which is $43,473.30.        That is
an increase of $28,473.30 over what he paid for it.
         Howeth's forfeiture argument is premised upon his assertion
that his efforts greatly contributed to the increase in the
book value of the Davidson Company stock.    The record indicates
that over the years Howeth was well compensated for his efforts.
Often times this was in the form of commissions directly re-
sulting from a percentage of his sales in addition to his
regular salary.    Additionally the substantial gain in the book
value of his stock under the repurchase agreement rewarded his
efforts.     Under such circumstances no harsh forfeiture is in-
volved.
          The final issue presented for review is whether Ian
Davidson's testimony concerning Howeth's promises and agreements
by oral telephone conversations violate the parol evidence rule.
See section 13-907, R.C.M. 1947.
          Parol evidence is not admissible to vary and contradict
the terms of a written contract.    1st Nat. Bank v. Soil Cons.
Dis., 130 Mont. 1, 293 P.2d 289.    But parol or other extrinsic
evidence not showing a modification or change in the terms of
the original writing may be admitted to show that a party to a
contract has waived the benefit of, or become estopped to assert,
his rights under some or all of the provisions in his favor in
the agreement.     32A C.J.S., Evidence 5966; Flint v. Mincoff, 137
Mont. 549, 353 P.2d 340.
          The oral conversations were not introduced to vary the
terms of the contract but rather to demonstrate that the tender
and acceptance under the stock repurchase agreement had in fact
been made.    Accordingly, there is no violation of the parol evi-
dence rule.
          Me have examined all other contentions raised by plain-
tiff and find them to be without merit and requiring no further
discussion herein.
          The judgment of the district court is affirmed.
    /'"Chief, J u s t i c e   >
                              ,
f

   H 0 n . h . James S o r t e , D i s t r i c t
Judge, s i t t i n g i n place of M r .
J u s t i c e John C . H a r r i s o n .