Myers v. Bendewald , 160 Mont. 338 ( 1972 )

No. 12178
I N THE SUPREME COURT O THE STATE O M N A A
F F OTN
1972
ROBERT W. MYERS and GLORIA JEAN MYERS,
husband and w i f e ,
P l a i n t i f f s and A p p e l l a n t s ,
OTTO BENDEWALD and EVELYN BENDEWALD ,
husband and w i f e ,
Defendants and Respondents.
Appeal from: D i s t r i c t Court of t h e S i x t e e n t h J u d i c i a l D i s t r i c t ,
Honorable A l f r e d B. Coate, Judge p r e s i d i n g .
Counsel o f R x o r d :
For Appellants :
Tipp, Hoven and B r a u l t , Missoula, Montana.
Raymond W. B r a u l t a r g u e d , M i s s o u l a , Montana.
William T. K e l l y a r g u e d , B i l l i n g s , Montana.
F o r Respondent:
William F. Meisburger a r g u e d , County A t t o r n e y ,
F o r s y t h , Montana.
Submitted: September 27, 1972
Decided : w $ - 197'2
m
Mr. Justice Frank I. Haswell delivered the Opinion of the Court.
This is an appeal from a judgment and an order denying
a new trial in Rosebud County. The district court, the Hon.
Alfred B. Coate, district judge, sitting without a jury, entered
findings of fact, conclusions of law, and judgment for the de-
fendants in an action brought by plaintiffs for conveyance of a
disputed one-half interest in lands situated near Forsyth, Mon-
tana. The court held that the statute of frauds barred plaintiffs'
action and rendered judgment for defendants. Plaintiffs appeal.
In 1967, plaintiff, Robert Myers, desired to purchase
land near Forsyth, Montana, suitable for operating a bowling
alley. In researching the records in the Rosebud County court-
house, Myers located two separate tracts of land designated the
"Harris tract" and the "Caskey tract". Myers purchased the Harris
tract in May, 1967, and continued to inquire about the Caskey
tract which was involved in probate proceedings. Later in the
summer of 1967, the Caskey tract became available but Myers was
without funds to purchase it. At that time, Myers was working in
the service station of the defendant, Otto Bendewald, and Myers
told Bendewald about the Caskey tract and that the attorney for
the o the tract said the Caskey tract might be valuable
f
for speculation if certain interstate highway construction ma-
terialized. The circumstances and conditions under which Myers
imparted his knowledge of the Caskey tract to Bendewald remain
controverted but in July 1967 Bendewald purchased the Caskey
tract taking title in Bendewald and his wife's name.
At the time Myers discussed the Caskey tract with Bende-
wald there was an oral discussion of a proposed partnership be-
tween Myers and Bendewald involving Myers' proposed construction
of a bowling alley and potentially an undertaking to include a
possible trailer park. Myers, later at trial, testified that in
their "gentlemen's agreement", Bendewald purchased the Caskey
tract subject to Myers' right to repurchase a one-half interest
at a later date. However, Bendewald denied that the purchase of
the Caskey tract was involved in the proposed partnership events
which later developed.
Subsequently, pursuant to the proposed future partnership
between Myers and ~endewald,Myers sold Bendewald a one-half
interest in the Harris tract in November 1967. In May, 1968, Myers
and Bendewald executed written articles of partnership to do bus-
iness as "Evergreen Lanes" and to operate the bowling alley
which was eventually constructed on the Harris tract.
In December 1969, it was ascertained that the highway
department would, in fact, use some of the Caskey land for high-
way construction and Myers contacted Bendewald and together they
drove to the land to observe the highway stakes. Myers then
offered to buy a one-half interest in the Caskey tract and pressed
Bendewald for a response. Bendewald asserted then, and again at
trial, that he conditioned any sale upon the status of the partner-
ship which was then in existence and operating. Bendewald did,
however, give Myers a dollar figure required to reimburse Bendewald
fully for one-half the purchase price, taxes, interest, and ab-
stract costs. With this figure Myers had a deed prepared convey-
ing a one-half interest in the Caskey tract from Bendewald and
his wife to Myers and his wife. Later Myers attached a check to
the unsigned deed and left the deed and check with Bendewald's
attorney. Bendewald's attorney informed him that the deed and
check were in his office but Bendewald never picked them up or
ever saw them.
Shortly thereafter, while the deed and check were being
held by Bendewald's attorney, Bendewald on January 4, 1970, ex-
amined the books of the partnership and discovered that the
partnership was ailing financially. Bendewald then told Myers
he would not sell in view of the financial condition of the
partnership and refused to discuss the matter further. In due
time the partnership between Myers and Bendewald was dissolved,
whereupon Myers then brought this suit seeking specific perfor-
mance of an alleged contract for the sale of a one-half interest
in the Caskey tract.
In Myers' complaint, he asserted two theories: (1) Bende-
wald was trustee for the benefit of Myers; and (2) Bendewald was
unjustly enriched at the expense of Myers. Bendewald, in his
answer, asserted the affirmative defense of the statute of frauds.
The court, sitting without a jury, entered findings of fact and
conclusions of law applying the statute of frauds and entered
judgment in favor of the defendants, Bendewald and his wife.
Following a denial of plaintiffs' motion for a new trial, plain-
tiffs appeal from the judgment and the denial of their motion
for a new trial.
Appellants' issues on appeal substantially encompass the
questions of whether the district court erred in failing to hold
that the respondents were trustees for the benefit of the appel-
lants and that the respondents were unjustly enriched at the ex-
pense of the appellants; whether the district court erred in its
conclusion of law that the respondents were the sole owners of
the Caskey land and that the statute of frauds was applicable;
whether the district court erred in failing to accept the appel-
lants' proposed findings of fact and conclusions of law; and
whether the district court erred in failing to grant appellants'
consolidated motion for new trial.
In substance these issues are confined to the central
issue of what was the nature of the agreement, if any, between
the parties Myers and Bendewald, the operative facts of that
agreement, and the law applicable in the resolution of the
action brought before the district court.
Appellantshaveargued the existence of an oral "gentlemen's
agreement" between the parties providing for a purchase of a
one-half interest in the Caskey land pursuant to a larger scheme
involving a partnership between Myers and Bendewald. Alterna-
rively appellants argue that there was a valid contract entered
into in December 1969,which was fully executed on Myerst part,
consisting of memorandums in writing in the form of the check
given in payment and the deed of conveyance which was drafted
although never signed by Bendewald. Thus appellants argue that
the statute of frauds does not apply following the holding of
Besse v. McHenry, 89 Mont. 520, 527, 300 P. 199, stating the
exception to the statute of frauds in the instance where there
is complete performance of an oral contract by one of the parties.
Under the two theories of appellants' argument there are
two facts which remain as a common problem underlying any theory
of recovery in this case; specifically, the absence of any written
agreement regarding the terms of any subsequent conveyance between
Myers and Bendewald. In the first instance of appellantst argument,
at the time of Bendewaldts purchase of the Caskey tract in July
1967, there was no writing between Myers and Bendewald that per-
tained to either the Caskey tract or to any proposed partnership
which was subsequently created in May 1968. Finding no written,
enforceable agreement between the parties, the district court
properly concluded that the statute of frauds was applicable in
the absence of a written agreement.
In the second instance of appellants' argument, the tender
of payment and draft of a deed are offered as proof of a memoran-
dum and executed performance on the part of Myers which constitutes
an exception to the statute of frauds. Standing alone, the actions
of Myers are unsupported by the conflicting testimony of the
parties regarding both the existence of any oral agreement and
the terms of such agreement,if any, The lack of evidence to
support the claimed oral agreement and its claimed performance
by appellants relates again to the inadequacy of an oral agree-
ment for conveyance of land, the inescapable difficulty of
determining the nature of such oral agreements and any claimed
performance thereof. The problems involved in enforcing oral
agreements for the conveyance of land as attempted in this case
are nothing more than those constituting the basic purpose of
the statute of frauds.
Without reference to the legislative history or the legion
of cases giving rise to the statute of frauds, section 93-1401-7,
R.C.M. 1947, expressly states which contracts must be in writing:
"Agreement not in writing when invalid.
In the following cases the agreement is in-
valid, unless the same or some note or memo-
randum thereof be in writing, and subscribed
by the party charged, or by his agent; evi-
dence, thereof, of the agreement cannot be
received without the writing or secondary evi-
dence of its contents:
"4. An agreement for the leasing for a longer
period than one year, or for the sale of real
property, or of an interest therein; and such
agreement, if made by an agent of the party
sought to be charged, is invalid, unless the
authority of the agent be in writing, sub-
scribed by the party sought to be charged. * * *"
There being no evidence present in the case other than
conflicting oral statements relating to an oral agreement between
Myers and Bendewald, erstwhile business partners, for the convey-
ance of a one-half interest in the Caskey tract, the district
court properly ruled that the statute of frauds barred recovery
on plaintiffs' claim. We agree.
Accordingly, the judgment of the district court is
affirmed.
.
Associate Justice