Northwestern Union Trust Co. v. Worm

No. 84-127
I N THE SUPREME COURT O THE STATE O M N A A
F F OTN
1984
NORTHWESTERN U N I O N TRUST CO. ,
e t al.,
P l a i n t i f f and A p p e l l a n t ,
-vs-
BEN WORM and DORIT WORM,
D e f e n d a n t and R e s p o n d e n t .
APPEAL FROM: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l District,
I n and f o r t h e County o f T r e a s u r e ,
The H o n o r a b l e C h a r l e s Luedke, J u d g e p r e s i d i n g .
COUNSEL O RECORD:
F
For Appellant:
I c e e f e r , R o y b a l , Hanson, S t a c e y & J a r u s s i ; Gene
J a r u s s i a r g u e d , B i l l i n g s , Montana
B r u c e E . L e e , B i l l i n g s , Montana
For Respondent :
H . D . Buelow a r g u e d f o r D o r i t W o r m , M i l e s C i t y ,
Montana
W i l l i a m F. M e i s b u r g e r a r g u e d f o r Ben Worm,
F o r s y t h , Montana
Submitted: S e p t e m b e r 11, 1984
Decided: O c t o b e r 31, 1984
Filed:
OC T 3 I. i%4-
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Clerk
Mr. Justice Daniel J. Shea delivered the Opinion of the
Court.
The plaintiff, Northwestern Union Trust Co., acting as
personal representative of the estate of Christ Worm, Sr.,
deceased, appeals from a judgment entered in favor of Ben
Worm and Dorit Worm, respectively, the son and the former
daughter-in-law of Christ and Helen Worm. The trust company
sued Ben and Dorit Worm, contending that the warranty deed in
their name to the land in question, was invalid because Ben
and Dorit Worm had never performed on the underlying contract
for deed concerning the ].and, and that the parties had in
fact cancelled the contract. The sole issue is whether there
is substantial credible evidence to support the jury's
verdict, which in effect decided that Ben and Dorit Worm had
paid for the land and therefore were entitled to the warranty
deed. We affirm.
Christ Worm and Helen signed a contract for deed in 1960
to sell their land to their son and daugher-in-law, Ben and
Dorit Worm. As part of this contract Christ and Helen Worm
signed a warranty deed but were to hold onto the deed until
the contract was performed. In April of 1975 Christ and
Helen Worm delivered the deed to Ben and Dorit Worm, hut the
deed was not filed immediately. Two months later, Christ
Worm executed a will in which he willed the land in question
to persons other than Ben and Dorit Worm. Ben and Dorit Worm
did not file the deed until November 4, 1981, 10 days before
Christ Worm died. The trust company, as personal
representative of Christ Worm's estate, based on the
provisions of the will, filed suit against Ben and Dorit Worm
seeking to set aside the warranty deed on the ground that Ben
and Dorit Worm had never performed on the underlying contract
for deed and therefore that they were not entitled to the
property.
This case is before us for the second time. In the
first case, (Northwestern Union Trust Co. v. Worm (Mont.
1983), 663 P.2d 325, 40 St.F.ep. 758) we granted a new trial
to the trust company because the trial court failed to
instruct on the trust company's theory of the case that the
parties had mutually cancelled the contract for deed. As
stated, however, the sole issue in this appeal is whether
substantial evidence exists to support the jury verdict that
the parties did not cancel the contract and that Ben and
Dorit Worm had paid for the land and were therefore entitled
to the deed which they filed. The defendants, Ben and Dorit
Worm, argue the appeal is frivolous and ask that damages be
imposed for a frivolous appeal. We hold the appeal is not
frivolous, but that substantial credible evidence supports
the jury verdict that the parties had not cancelled the
contract for deed.
In reviewing a question of whether substantial credible
evidence supports a judgment, we view the evidence in the
light most favorable to the prevailing party. The trust
company contends that sometime between the years 1960 (when
the contract was first entered into) and 1980, the parties
cancelled the contract for deed and that the evidence
requires a conclusion as a matter of law that the contract
had been cancelled. The trust company primarily relies on
six situations tha-t occurred over the course of years that
lead, according to the views of the trust company, to the
inescapable conclusion the parties cancelled the contract for
deed. In each of these situations, however, Ben and Dorit
Worm explained to the jury what they did and why they did it,
and this evidence was sufficient to make a jury question on
whether the underlying contract for deed had been cancelled.
The jury resolved those factual questions in favor of Ben and.
Dorit Worm.
First, the trust company argues Ben and Dorit Worm had,
in the contract for deed, assumed a $12,000 mortgage on the
land, but that the evidence discloses it was the father,
Christ Worm, who actually nade the mortgage payments to the
Federal Land Bank. The trust company focuses primarily on
the payments made by the father after Ben and Dorit Worm had
filed for bankruptcy in 1965. These facts, the trust company
argues, compel a conclusion Ben and Dorit Worm cancel-led the
contract for deed that required them to make the mortgage
payments, and therefore they no longer had an equitable
interest in the land. However, Ben Worm and Dorit Worm
testified they believed the duty to pay off the mortgage on
the loan was the responsibility of Christ Worm, and therefore
they gave the money to Christ Worm, who in turn paid off the
mortgage. In addition, and although the evidence is
conflicting, Helen Worm, Ben's mother, testified Christ Worm
made the payments because Ben didn't ha.ve the money. She
further testified Christ Worm and Ben Worm then had an
agreement that changed the method and manner of payment. She
testified Christ Worm and Ben Worm agreed the cattle of
Christ and Helen Worm would be fed free of charge on the
land, and further, because Christ Worm was unable to work the
land himself because of health problems, Ben Worm continued
to work the land for 10 years after the bankruptcy was filed.
Based on this testimony, the jury was free to decide the
parties changed the method and manner of payment, but that
they in effect recognized and honored the contract.
Second, the trust company argues that in several of the
years between 1960 and 1981, Ben and Dorit Worm signed
numerous financial statements and loan applications on which
they claimed no interest in the land involved, either as
having an equitable interest in the land or as being
liabilities. This evidence, the trust company contends, is
inconsistent with a claim of ownership. However, both Ben
and Dorit Worm testified they believed they did not own the
property until the final payment had been made and therefore
they did not make these disclosures on the financial forms.
This interpretation is supported by the fact that Christ Worm
continued making the payments on the mortgage to the Federal
Land Bank even though the contract for deed stated Ben and
Dorit Worm assumed the mortgage. The jury had a right to
believe the testimony of Ben and Dorit Worm.
Third, the trust company argues the failure of Ben and
Dorit to list their equity in the property as an asset in
their bankruptcy petition filed in 1965, and their failure to
list the obligation to the Federal Land Bank as a claim
against the bankruptcy estate, are clear evidence they no
longer had an interest in the property. However, after
filing the bankruptcy, Ben and Dorit Worm, and their children
continued to live and work on the farm. Ben and Dorit Worm
testified they did not list the real property as an asset
because they believed the exemption under the Homestead Act
meant they did not have to list their interest in the
property. It was the jury's prerogative to believe their
testimony.
Fourth, the trust company argues that when Dorit Worm
filed for dissolution of her marriage to Ben Worm in 1977,
she failed to list the land as an asset of the marriage, and
that this also is clear evidence neither she nor Ben Worm
considered they had an interest in or owned the ranch land.
Although it is true the petition stated the parties to the
marriage had accumulated no real property, Dorit Worm
testified she did not list the property in her petition for
dissolution because she was of the impression she and Ber,
Worm would not actually own the property until Ben Worm died.
Again, the jury had a right to believe her testimony.
Fifth, the trust company argues that as late as 1978 and
1980 the father, Christ Worm, leased the land to others and
the son was not a party to the leases, again indicating Ben
and Dorit Worm must have cancelled their contract for the
purchase of the land. In 1978 the father leased the land to
Harold Zent Farms, Inc., and in 1980 the father leased the
land to Robert and James DeCock. However, both lessees
testified they knew Ben Worm claimed an interest in the land.
And the fact Ben Worm consented to the lease does not compel
a conclusion that this consent constituted a waiver or
forfeiture of his ownership interest in the land. The jury
could simply have decided Ben Worm consented to the leases.
Sixth and finally, the trust company argues that because
Christ Worm's will devised the land to other relatives, the
conclusion i.s inescapable Ben and Dorit Worm did not own the
land. The will was executed in June of 1975, and took effect
on November 14, 1981, upon the death of Christ Worm.
However, this attempted devise is not conclusive of ownership
being in Christ Worm. The devise would only be possible if
Christ Worm owned the property at the time of his death. At
the time of his death Ben and Dorit Worm had possession of
the warranty deed for six years, and they filed it 1 0 days
before he died. The jury was properly instructed on these
matters a.nd clearly determined that Christ Worm did not own
the property at the time of his death.
The judgment of the District Court is affirmed.
We Concur:
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Chief Justice