Carey v. Wallner

No. 87-199
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
MICHAEL S. CAREY and KRISTINE
J. CAREY,
Plaintiffs and Respondents,
-vs-
ORVILLE WALLNER and GRACE FIALLNER,
Defendants and Appellants.
PEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Joseph Gary, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Morrow, Sedivy & Bennett; Terry Schaplow, Rozeman,
Montana
For Respondent :
Michael. J. Lilly, Bozeman, Montana
Submitted on Briefs: Aug. 6, 1987
Decided: October 29, 1987
Clerk
Mr. Justice R.C. McDonough delivered the Opinion of the
Court.
Both parties appealed the first judgment in this action.
See Carey v. Wallner (Mont. 19871, 725 P.2d 557, 43 St.Rep.
1706. Therein this Court affirmed in part, and reversed and
remanded in part with instructions to amend the judgment.
Pursuant to the remand, the District Court of the Eighteenth
Judicial District entered an amended judgment on January 6,
1987. The appeal currently before us contests the validity
of that judgment. We affirm.
Briefly summarized, the facts from the former case
reveal a contract for deed dispute. Careys petitioned for
rescission of the parties' contract alleging failure of
consideration and breach of warranty. The District Court
found that Wallners breached certain warranties, and
concluded that Careys should receive damages and Wallners
should receive the return of the contract property. In its
first judgment, however, the District Court failed to
formally revest title, and failed to formally grant
rescission.
On appeal of the first judgment, Wallners contended that
the District Court erred in granting rescission because
restoration of the property would not return them to the
pre-contract status quo. Carey, 725 P.2d at 561. This Court
affirmed the District Court's finding because:
Absolute and literal restoration is not required,
it being sufficient if the restoration be such as
is reasonably possible or as demanded by equity.
O'Keefe v. Routledge (1940), 110 Mont. 138, 146-147,
103 P.2d 307, 310.
Carey, 725 P.2d at 561. Although the District Court was
affirmed in regard to Wallners' appeal, the case was remanded
with instructions to the District Court to correct its error
in calculating Careys' damages. Carey, 725 P.2d at 562.
The District Court fulfilled the instructions over more
objections by Wallners. At the hearing held pursuant to the
remand, Wallners attached an affidavit and various unsworn
statements to a brief supporting their proposed amended
judgment. The affidavit and the statements purported to show
that the property's value had dropped from $75,000 to
$30,000, and Wallners' proposed amended judgment held Careys
liable for the alleged drop in value. The District Court
refused to adopt Walners' amended judgment reasoning in its
order memorandum that:
For this Court to accept that value would clearly
contravene the opinion of the Montana Supreme Court
which pegged the value at SEVENTY-FIVE THOUSAND
DOLLARS ($75,000). Furthermore, it would be making
a leap of faith that such decreased value was due
to the Plaintiffs' neglect rather than a
fluctuation in the real estate market. Also, as
the Plaintiffs argue, the property has actually
been in the hands of the Defendants since the
Defendants did not request a stay of execution of
of this Court's judgment. It appears to this Court
that to decrease that value would be totally
inappropriate.
Wallners have appealed the amended judgment contending
that this Court's prior ruling, and equity, require the award
of more than the allegedly devalued property. First, in
regard to the prior ruling, Wallners contend that this
Court's decision depended on the return of property valued at
$75,000. Second, in regard to equity, Wallners contend that
the risk of damage to the contract property remained with
Careys during the pendancy of the appeal. In support of the
equity argument, Wallners contend that (1) they could not
retake title due to the District Court's failure to revest
title, (2) Careys vacated the property despite the fact that
title had not been revested in Wallners, (3) Careys' failure
to remain caused damage to the property, and (4) the damage
caused by Careys constitutes a violation of their statutory
duty to return everything of value received under the
contract.
We have considered and decided both issues. First, in
regard to the effect of the former opinion, Montana law
empowers this Court to order the proper judgment. Section
3-2-204, MCA. Once we order a particular judgment, the lower
court has no discretion to alter it. See In re the Marriage
of Sarsfield (Mont. 1985), 695 P.2d 473, 474, 42 St.Rep. 231,
233; State ex rel. Olson v. District Court of Nineteenth
Judicial District (1979), 184 Mont. 346, 349, 602 P.2d 1002,
1003-4; In re Stoain's Estate (1960), 138 Mont. 384, 390, 357
P.2d 41, 45. Applying this rule to demands for relief on a
second appeal, the Court of Appeals of Oregon stated:
Relief from asserted changed conditions or rights
allegedly accruing or injuries allegedly occurring
pending or following appeal can be had, if at all,
only by resort to an original proceeding by which
appropriate relief may be sought. See for example
Mackall v. Richards, 116 U.S. 45, 6 S. Ct. 234, 29
L. Ed. 558 (1885); Galbreath v. Wallrich, 48 Colo.
127, 109 P. 417 (1910).
City of Idanha v. Consumers Power Inc. (Ore. Ct. App. 19731,
509 P.2d 1226, 1228. We adopt the Court of Appeals of
Oregon's reasoning in the application of this rule. Thus,
this Court's previous opinion limited the District Court's
remand powers. Its discretion extended only to the entry of
the proper judgment.
At any rate, Wallners misconstrue our first opinion. We
did not order that the District Court revest title to
property currently valued at $75,000. Rather, we affirmed
the District Court's finding that Wallners should receive no
more than the return of the contract property valued near the
time Careys offered to return it. This was all Wallners were
to receive because the burden of the mistake which lead to
the breach of the warranties "must fall on Wallners." Carey,
725 P.2d at 561.
In regard to Wallners' equitable contentions, we need
only point out that a "land contract such as is involved here
is an executory contract and the legal title does not pass
until the conveyance is actually made." Dobitz v. Oakland
(1977), 172 Mont. 126, 130, 561 P.2d 441, 443. Thus,
although the contract transferred the beneficial interest in
the realty to Careys, they never received legal title from
Wallners. Therefore, Wallners have no grounds to argue that
Careys' duty to maintain the premises continued until
Wallners received the return of title to the property.
Wallners never lost title to the property.
Furthermore, any duty to maintain the property incident
to Careys' possession terminated when the District Court
found that rescission was appropriate. This is true because
rescission extinguishes contract duties. See S 28-2-1701,
MCA. Wallners may attempt to argue that recission never
occurred because the District Court failed to formally grant
rescission in its judgment. To prevent the appearance of
that issue before this Court, we now take the opportunity to
point out that Wallners' original appeal contested the
propriety of the rescissionary remedy. Wallners may not
appeal an issue on the one hand, and on the other deny the
basis for its existence. Our previous decision constitutes
res judicata as to this issue. In particular, as we stated
previously in the face of similar contentions, there "must be
an end to litigation, and in this matter it has been
reached." Gray v. Bohart (1957), 131 Mont. 522, 524, 312
P.2d 529, 531.
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Justice
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We Concur:
Chief Justice