Erickson v. Hart

I * .
I N THE SIJPREME COURT O F THE STATE O F MONTANA
ALLEN E . E R I C K S O N and MELBA E .
ERICKSON,
P l a i n t i f f s and R e s p o n d e n t s ,
-vs-
DALE P . HART,
D e f e n d a n t and A p p e l l a n t .
A P P E A L FROM: D i s t r i c t C o u r t of t h e F o u r t h J u d i c i a l D i s t r i c t ,
I n and f o r t h e C o u n t y of M i s s o u l a ,
T h e H o n o r a b l e D o u g l a s G. H a r k i n , Judge p r e s i d i n g .
COUNSEL O F RECORD:
For A p p e l l a n t :
T e r r y A. Wallace, M i s s o u l a , Montana
For R e s p o n d e n t :
Kamrnerer Law O f f i c e s ; C l i n t o n H. Kamrnerer, Missoula,
Montana
s u b m i t t e d on B r i e f s : Jan. 14, 1988
Filed: MARi-1988
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
Dale P. Hart appeals an order of the Fourth Judicial
District, Missoula County, granting possession of real prop-
erty to plaintiffs Allen and Melba Erickson during the pen-
dency of this action. We reverse and remand.
One issue is presented for our review:
Did the District Court abuse its discretion when it
transferred real property to plaintiffs by injunction or
restraining order?
In November 1985 defendant Dale P. Hart assumed the
Terrace Mobile Home contract for deed by assignment. The
contract required that Hart make monthly payments of $1541.44
to the sellers, Allen and Melba Erickson. Hart made monthly
payments for approximately one year. In December 1986 and
January 1987, Hart failed to make the monthly payments. On
February 10, 1987, the Ericksons, pursuant to the contract,
sent Hart a written notice of default. The Ericksons alleged
that Hart was $3,629.88 in arrears. Hart was allowed sixty
days to cure his default. Hart failed to cure his default.
From November 1986 to May 18, 1987, Hart retained possession,
did not make any payments and continued to collect rents.
On May 1, 1987, sellers Allen and Melba Erickson
brought this action demanding: (1) return of the property;
(2) damages for payments not tendered; (3) restitution for
monies paid by the Ericksons for liability insurance; and (4)
recovery of rents and lost profits. On May 1, 1987, the
Ericksons successfully moved the District Court to require
defendant to show cause why the real property should not be
transferred to the Ericksons pending the outcome of the
matter. Hart was served with the order on May 4, 1987.
At the May 11, 1987, hearing, Hart acknowledged that he
had not made any payments since December 1986. Hart testi-
fied that he had and was continuing to collect rents from the
mobile home rentals. Hart testified that he had allowed the
liability insurance to lapse in violation of the contract.
Hart agreed that it was unfair for him to continue collecting
the rents and to remain on the property while making no
payments. Hart admitted the property should be in the pos-
session of some other party but claimed that his assignors
should have priority over the Ericksons. Melba Erickson
testified that $97,000 of the $205,000 purchase price re-
mained unpaid.
On May 12, 1987, eight days after receiving service on
the order to show cause and eleven days after receiving
service on the original complaint, defendant Hart moved for
substitution of the district judge pursuant to S 3-1-802, MCA
(1985), which has since been superseded by S 3-1-804, MCA.
On May 18, 1987, the District Court, without addressing
Hart's motion for substitution, found that:
1. Defendant has made no payments;
2. Plaintiffs have made a prima facie
case for default;
3. The property in question needs to be
protected;
4. Proper relief - - in - - -
is - the form of a
restrainins order;
5. Plaintiffs are entitled to immediate
possession:
a) if they post a $20,000 bond [and]
b) if they made all necessary repairs
and pay taxes when in possession.
The court, after plaintiffs posted bond, restrained
Hart from entering or remaining on the property and granted
plaintiffs Allen and Melba Erickson possession.
After reviewing the record, it is clear that defendant
Hart moved for substitution of the district judge on May 12,
1987. Therefore, the District Court's May 18, 1987 findinqs
and order were made without proper jurisdiction. See
§ 3-1-802, MCA (1985), which permitted a party ten days after
service of show-cause order to make such a motion.
Although we are reversing the District Court, we note
the court's finding, that the property in question needs to
be protected, is supported by substantial credible evidence.
We disapprove of testing title to of real property by
injunction or restraining order pending the outcome of
litigation. Gibbons v. Huntsinger (1937), 105 Mont. 562, 74
P.2d 443, 449; Davis v. Burton (1952), 126 Mont. 137, 246
P.2d 236, 237; Eliason v. Evans (1978), 178 Mont. 212, 583
P.2d 398. "The general rule is that title to, or right of
possession of real estate may not be litigated in an action
for an injunction." Eliason, 583 P.2d at 402.
On remand, we instruct the District Court to consider
appointing a receiver pursuant to B 27-20-101 et seq., MCA.
See,Hastings v. Wise (1931), 89 Mont. 325, 297 P. 482.
Reversed and remanded.