Fraser v. Edmisten

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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