Dyksterhouse v. Doornbos

• Court: Montana Supreme Court
• Decided: May 25, 1977
• Docket: 13454
• Status: Published

Opinion

No. 13454 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977

Plaintiff and Respondent,

Defendant and Appellant.

Appeal from: District Court of the Eighteenth Judicial District, Honorable Frank E. Blair, Judge presiding. Counsel of Record: For Appellant: Bolinger and Wellcome, Bozeman, Montana Harry A. Bolinger argued, Bozeman, Montana For Respondent: Holter, Heath and Kirwan, Bozeman, Montana Peter M. Kirwan argued, Bozeman, Montana

Submitted: April 19, 1977 Decided: MAY 2 5 1977 Filed: K 2 5 ~gn AY Mr. J u s t i c e Frank I . Haswell d e l i v e r e d t h e Opinion o f t h e C o u r t .

A c t i o n by buyer a g a i n s t s e l l e r t o e n f o r c e s p e c i f i c

performance o f a c o n t r a c t t o s e l l a t r a c t o f l a n d i n B e l g r a d e ,

Montana. The d i s t r i c t c o u r t o f G a l l a t i n County, Hon. Frank E .

B l a i r , d i s t r i c t judge p r e s i d i n g w i t h o u t a j u r y , e n t e r e d judgment

f o r buyer. S e l l e r appeals.

The d e f e n d a n t - s e l l e r c o n t e n d s : (1) T h a t no c o m p l e t e

c o n t r a c t , o r a l o r w r i t t e n , was e v e r e n t e r e d i n t o ; (2) that the

c o n t r a c t i s unenforceable under t h e s t a t u t e of frauds; (3) that

t h e b u y e r d i d n o t i n s t a l l and pay f o r a sewer l i n e a c r o s s t h e

p r o p e r t y i n r e l i a n c e o n t h e a l l e g e d c o n t r a c t and t h u s d i d n o t

change h i s p o s i t i o n t o h i s p r e j u d i c e .

The p l a i n t i f f - b u y e r contends: (1) T h a t t h e p a r t i e s

e n t e r e d i n t o a c o n t r a c t t o s e l l and buy a p p r o x i m a t e l y 25 a c r e s

o f l a n d a t $2,000 p e r a c r e w i t h 2 9 % down w i t h t h e b a l a n c e a t 6 %

i n t e r e s t p a y a b l e i n monthly i n s t a l l m e n t s o v e r 10 y e a r s ; (2) that

four d i f f e r e n t writings together s a t i s f y t h e s t a t u t e of frauds;

( 3 ) t h a t p a r t i a l performance t a k e s t h e c o n t r a c t o u t of t h e s t a t -

u t e o f f r a u d s ; and, (4) equitable estoppel bars the defense of

t h e s t a t u t e of frauds.

The d i s t r i c t c o u r t , G a l l a t i n County, Honorable Frank E .

B l a i r s i t t i n g without a jury, entered findings of f a c t , conclusions

o f law, and judgment f o r t h e p l a i n t i f f - b u y e r decreeing specific

performance. Defendant-seller appeals.

The c o n t e n t i o n s o f t h e p a r t i e s c a n b e r e d u c e d t o e s s e n t i -

a l l y two i s s u e s : (1) Whether t h e e v i d e n c e s u p p o r t s a f i n d i n g o f

a f i n a l agreement t o buy and s e l l l a n d , and ( 2 ) whether t h a t a g r e e -

ment i s u n e n f o r c e a b l e u n d e r t h e s t a t u t e o f f r a u d s .

The t r a c t o f l a n d i n q u e s t i o n i s l o c a t e d a t B e l g r a d e ,

Montana. P l a i n t i f f d e s i r e d t h e land s o he could c o n s t r u c t a n

o u t f a l l sewer a c r o s s t h e t r a c t from a s m a l l s u b d i v i s i o n t o t h e new c i t y sewer system o f B e l g r a d e . Apparently t h e o t h e r a l t e r n a -

t i v e s of a more c i r c u i t o u s r o u t e and a pump s t a t i o n w e r e l e s s

workable f o r e n g i n e e r i n g r e a s o n s .

I n J u l y , 1974, d e f e n d a n t had o f f e r e d t o s e l l t h e l a n d t o

p l a i n t i f f and on August 29 he went t o p l a i n t i f f ' s r e s i d e n c e and

a g a i n o f f e r e d t o s e l l t h e t r a c t of l a n d . L a t e r t h a t day t h e

p a r t i e s t o g e t h e r w i t h p l a i n t i f f ' s son went t o a n a t t o r n e y ' s

o f f i c e seeking h i s advice. The d i s t r i c t c o u r t found t h a t a t t h e

a t t o r n e y ' s o f f i c e t h e p a r t i e s a g r e e d t o buy and s e l l t h e l a n d on

t h e following t e r m s : t h e p r i c e would be $2,000 p e r a c r e ; down

payment o f 29% w a s t o be p a i d upon d e l i v e r y o f t i t l e i n s u r a n c e

p o l i c y ; t h e b a l a n c e w a s t o be p a y a b l e o v e r 1 0 y e a r s i n e q u a l

monthly payments w i t h i n t e r e s t a t 6 % , s e c u r e d by r e a l e s t a t e mort-

g a g e s owned by p l a i n t i f f t o be pledged i n escrow w i t h t h e Manhattan

S t a t e Bank w i t h i n s t r u c t i o n s t o pay t h e monthly payments o u t o f

t h e proceeds. The c o u r t found t h e p a r t i e s i n t e n d e d t o b i n d them-

s e l v e s t o t h e agreement by e x e c u t i n g and a c c e p t i n g a check f o r

$5,000 e a r n e s t money. The a c r e a g e and t o t a l p u r c h a s e p r i c e w e r e

t o be d e t e r m i n e d by a s u r v e y o f t h e t r a c t t o be done by James

Cummings, l a n d s u r v e y o r . The s u r v e y d e t e r m i n e d t h e a c r e a g e t o be

23.129 a c r e s and t h e r e f o r e t h e t o t a l p u r c h a s e p r i c e was $46,258.

I n a d d i t i o n , t h e buyer was t o g r a n t a right-of-way f o r a sewer

across the t r a c t f o r defendant's residence adjacent t o the t r a c t

and t o i n s t a l l a sewer hookup f o r t h e r e s i d e n c e .

The c o u r t ' s f i n d i n g s of a n agreement t o buy and s e l l and

i t s s p e c i f i c t e r m s a r e s u p p o r t e d by t h e t e s t i m o n y o f James Cummings,

t h e s u r v e y o r ; t h e a t t o r n e y who had been c a l l e d on f o r a d v i c e and

w i t n e s s e d some of t h e n e g o t i a t i o n s ; and Hank Dyksterhouse, p l a i n -

t i f f ' s son.

Defendant Doornbos' t e s t i m o n y d i f f e r s i n t h a t h e c o n t e n d s

t h e y a g r e e d on a p r i c e b u t were u n a b l e t o a g r e e on t h e t e r m s o f

payment a s t o i n t e r e s t , l e n g t h of t i m e t o pay t h e b a l a n c e , and s e c u r i t y f o r t h e d e f e r r e d payments. I t c o u l d be a r g u e d h i s

t e s t i m o n y i s c o r r o b o r a t e d by t h e a t t o r n e y b e c a u s e he w a s u n c e r -

t a i n of t h e agreement on t h o s e t e r m s . The a t t o r n e y was n o t

r e t a i n e d by e i t h e r p a r t y t o d r a f t a n agreement, and t h e t e r m s

w e r e n e v e r reduced t o a f o r m a l w r i t t e n c o n t r a c t s i g n e d by t h e

parties.

W e f i n d t h a t although the evidence i s c o n f l i c t i n g t h e r e

i s s u b s t a n t i a l c r e d i b l e evidence i n t h e record t o support t h e

c o u r t ' s f i n d i n g s o f a n agreement t o buy and s e l l t h e l a n d and

the t e r m s thereof. T h e r e f o r e , t h e y must be upheld on a p p e a l "

H e l l i c k s o n v . B a r r e t t Mobile Home T r a n s p . , 1 6 1 Mont. 4 5 5 , 462,

507 P.2d 523, s t a t e s t h a t even i f t h e t e s t i m o n y were d i r e c t l y

conflicting:

" * * * W cannot r e t r y f a c t u a l determinations e made by t h e t r i a l c o u r t . "

The n e x t i s s u e i s whether t h e s t a t u t e of f r a u d s b a r s

enforcement o f t h e agreement.

The s t a t u t e o f f r a u d s p r o v i d e s t h a t no agreement f o r t h e

s a l e o f r e a l p r o p e r t y i s v a l i d u n l e s s t h e same, o r some n o t e o r

memorandum t h e r e o f , be i n w r i t i n g and s u b s c r i b e d by t h e p a r t y t o

be c h a r q e d ; b u t t h i s d o e s n o t a b r i d g e t h e power o f any c o u r t t o

compel t h e s p e c i f i c performance o f any agreement f o r t h e sale o f

r e a l p r o p e r t y i n c a s e of p a r t performance t h e r e o f . S e c t i o n s 74-

203, 13-606 ( 4 ) , and 93-1401-7 ( 4 ) , R.C.M. 1947.

The r u l e o f p a r t performance a p p l i c a b l e under t h e s t a t u t e

now c o d i f i e d as s e c t i o n 74-203, i s s t a t e d i n Hogan v. T h r a s h e r ,

72 Mont. 318, 328, 233 P. 607, q u o t i n g from 27 C . J . 343:

"'Where o n e p a r t y t o a n o r a l c o n t r a c t h a s , i n r e l i a n c e t h e r e o n , s o f a r performed h i s p a r t o f t h e agreement t h a t i t would b e p e r p e t r a t i n g a f r a u d upon him t o a l l o w t h e o t h e r p a r t y t o re- p u d i a t e t h e c o n t r a c t and t o s e t up t h e s t a t u t e of frauds i n j u s t i f i c a t i o n t h e r e o f , equity w i l l r e g a r d t h e c a s e a s b e i n g removed from t h e o p e r - a t i o n of t h e s t a t u t e and w i l l e n f o r c e t h e c o n t r a c t by decreeing specific performance of it, or by granting other appropriate relief.' * * * (Citing cases. ) "While there is not any hard-and-fast rule for determining just what acts will constitute part performance sufficient to take a case out of the operation of the statute, the authorities are practically all agreed that 'if possession taken in pursuance of the contract is followed by the making of valuable improvements on the land by the vendee, there is a sufficient part performance.'" Also see Kettlekamp v. Watkins, 70 Mont. 391, 399, 225 P. 1003, where taking possession and making alterations of the property and paying the rent agreed upon for a considerable period, under the overwhelming weight of authority, took an oral lease out of the statute of frauds. In this case on August 29, the parties together with Hank Dyksterhouse went to the offices of Mr. Cummings, the surveyor. On a plat showing the land, defendant indicated the boundaries of the tract as Mr. Cummings marked them on the plat. Defendant told Mr. Cummings he had sold the tract to plaintiff and directed him to make a survey of it and prepare a certificate of survey. Mr. Cummings and the parties then discussed the location of the sewer line plaintiff intended to build and the location of the sewer right-of-way to be granted back to defendant. At this time defendant knew the location of the proposed sewer line and made no objection. Shortly thereafter Mr. Cummings' employees made the survey, prepared the certificate of survey, and laid out the sewer location on the ground. Early in September plaintiff entered into possession and began construction of the sewer line. It was completed October 5. The line lying across the tract cost over $6,000 and the cost of the whole line was over $7,000. As constructed it contained hookups for future homes and a hookup installed for defendant's use. While the sewer line was being constructed defendant

- 5 - lived in the immediate vicinity and had actual knowledge thereof. At no time during the construction did he object or attempt to stop construction of the sewer line; nor did he ever inform plain- tiff he was dissatisfied with its location. It was only after the sewer had been constructed that defendant repudiated his con- tract and refused to perform. These fact findings by the district court show sufficient part performance to remove the agreement from the bar of the statute.Hogan v. Thrasher, supra; McIntyre v. Dawes, 71 Mont. 367, 376, 229 P. 846; Cobban v. Hecklen, 27 Mont. 245, 70 P. 805. Each of the findings of fact heretofore stated is supported by substantial credible evidence and testimony in the record and must be upheld on appeal. Hellickson, supra. On this basis the judgment must be affirmed. Defendant's testimony reveals dissatisfaction concerning the location of the sewer line. He claims its location prevents him from utilizing the sewer line for homesite development on his remaining property along the boundary of the tract sold. What- ever his hopes may have been, there is nothing other than his testimony to indicate the bargain was otherwise. It appears Mr. Cummings had done other work for both men, that they both trusted him, and that they left it to him to locate the sewer in the best place. Cummings was also the engineer for the City of Belgrade which was concerned with getting the subdivision connected to the city sewer system. There is no complaint as to Mr. Cumrnings' work. Under the circumstances defendant's argument concerning who paid for the sewer construction and what plaintiff's financial arrangements were with his son for its payment is irrelevant. The fact remains that it was built and the land improved by the plaintiff in reliance upon the oral agreement to buy and sell the land. Having determined that part performance takes the contract out of the statute of frauds, it is unnecessary to determine whether or not the earnest money check endorsed by defendant, the engineer's plat on which defendant indicated the tract sold, the certificate of survey, and the attorney's notes, together, satisfy the statute of frauds under our decision in Anderson v. KFBB Broadcasting Corp., 143 Mont. 423, 391 P.2d 2. Plaintiff's argument on estoppel is essentially covered by our discussion of the part performance exception to the statute of frauds. Judgment affirmed.

Justice W , concur) e 1