Steen v. Rustad

313 P.2d 1014, 132 Mont. 96, 1957 Mont. LEXIS 10
CourtMontana Supreme Court
DecidedAugust 1, 1957
Docket9373
StatusPublished
Cited by53 cases

This text of 313 P.2d 1014 (Steen v. Rustad) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Steen v. Rustad, 313 P.2d 1014, 132 Mont. 96, 1957 Mont. LEXIS 10 (Mo. 1957).

Opinions

MR. CHIEF JUSTICE HARRISON:

On November 2, 1950, defendants and plaintiff made and executed a certain agreement entitled “Lease "With Option to Buy — Agreement” describing certain lands owned by the defendants which covered the farming year of 1951. As a part of its terms the agreement provided:

“In consideration of the foregoing premises, tenant agrees to pay the landlord under one of the following plans:
“Plan No. 1. Tenant shall deliver on or before Nov. 1, 1951, one-third of the wheat so raised to the landlord at the nearest accessible grain elevator, such payments to constitute rental for the year 1951.
“Plan No. 2. Tenant shall pay on or before Nov. 1, 1951, $1,500.00 to the landlord. In the event ‘Plan No. 2’ is chosen by tenant, tenant shall notify landlord prior to said date of his choice, and such payment shall then constitute rental of the [99]*99land for year 1951, and further, shall constitute a down payment upon a contract for sale of said land, which contract shall be drawn up at that time and contain the following which shall be a memorandum of said contract:
“ ‘Memorandum’
“Landlord agrees to sell and tenant agrees to buy, the land hereinbefore described for the sum of $8,500.00. The sum of $1,500.00 shall constitute a down payment, as hereinbefore set forth. The balance of $7,000.00 may thereafter be paid by tenant by delivering unto the landlord two-thirds of the crop raised each year, and the market value of the crop share going to landlord shall constitute the payment due and owing on the contract for that year.
“The foregoing paragraph shall constitute the minimum provisions under which tenant may exercise his option to buy, but it is understood that parties may mutually agree to other terms as to the payment of the balance.
“It Is Further Understood and Agreed that in the event that the tenant is called into the military services of the United States before he exercises his option to buy then the tenant cannot exercise said option and the landlord shall not be bound by tenant’s option to buy. However, plan No. 1 shall then be in full force and effect, and the parties bound thereby.
“The landlord under the contract of sale shall be bound to furnish an abstract of title, showing good and merchantable title to said land. ’ ’

In the above-quoted portions of the agreement the defendants are referred to as the landlord, the plaintiff as the tenant.

Under this agreement plaintiff went into possession and farmed the premises. Following harvest in the fall of 1951 the plaintiff went to see the defendant, Hubert E. Rustad, at Livingston, Montana, w’here he was then residing, and advised him that he was ready to finish the deal and make the payment, but the defendant, Hubert E. Rustad, advised that he wouldn’t sell and let the mineral rights go, but if the plaintiff wanted to buy without the minerals he could have the land.

[100]*100In this conversation plaintiff offered to pay the $1,500 down payment, but it was refused. The defendant, Hubert E. Rustad, admits that the only matter brought up in this conversation was reservation of the minerals.

Thereafter under date of September 27, 1951, by registered mail, the plaintiff sent a letter to the defendant, Hubert E. Rustad, which reads as follows:

“According to our agreement by which you leased me with option to buy the North half of Section 14, Township 9, Range 60,1 now wish to notify you that I wish to exercise the option to buy, as set forth in Plan No. 2.
“We should have a contract drawn up, which will set forth the essential features stated in the memorandum. I wish to make the $1,500.00 down payment at this time, and wish to know whether I should forward it directly to you or deposit to your credit in one of the banks here at Baker. The contract itself should provide for that.
“If you will have a contract prepared which is in line with our previous agreement, and will forward it to me, I shall sign and return your copy to you. ’ ’

Receiving no reply to this letter, the plaintiff on October 38, 1951, wrote the defendant, Hubert E. Rustad, as follows:

“Inasmuch as I have had no reply to my letter of Sept. 27, 1951, asking where to make payment on our contract or a new contract which I also asked for, by which I’m to buy the North half of Section 14, Township 9, Range 60, I have deposited the $1,500.00 set forth as down payment to your credit here in The Bank of Baker, Baker, Montana. Please give me a reply.’’

The defendant, Hubert E. Rustad, admitted that he received a letter from the bank with regard to the deposit of $1,500.00' paid by the plaintiff and defendant stated he later refused to accept the payment, but admits that the bank took $508.22 from his account to pay a note of his. Defendants never did anything toward having the contract prepared.

The situation with regard to the bank account of the defendant, Hubert E. Rustad, indicates that on October 19, 1951, $1,-[101]*101500.00 was deposited to Ms credit; on October 24, 1951, $508.22 was withdrawn by the bank apparently without defendant’s knowledge to pay a note which defendant had at the bank; on November 19, 1951, $1,000 was withdrawn by the defendant which then left a balance of $177.37. Thereafter a service charge of 46 cents was deducted from the account on December 7, 1951, leaving a balance then of $176.91. On December 27, 1951, a deposit of $1,429.40 was made and the defendant, Hubert E. Rustad, testified this was money paid upon another land contract in escrow that was deposited in the bank to his credit. Plaintiff tendered into court $540 covering two-thirds of the crop raised in the year 1952.

Plaintiff brought this action for specific performance of the agreement. Defendants answered and by cross-complaint demanded an accounting of the rents payable for the use of the lands for the year 1951 under the lease. The action was tried to the court without a jury; the court found that the agreement was a valid and subsisting contract; that the defendants accepted the down payment; that the unpaid balance was $6,460; and that plaintiff was entitled to a decree of specific performance. Judgment was entered in accordance with the findings.

From such judgment the defendants appeal and by specifications of error contend that the complaint did not state facts sufficient to constitute a cause of action, and that the court could not compel specific performance of the agreement.

Although the defendants set forth nine specifications of error they may be grouped under three headings: (1) That the plaintiff was not granted an exclusive option, his right to buy being conditioned upon defendants’ prior decision to sell; (2) That the agreement was merely an agreement to entered into an agreement in the future, and that the agreement lacked certainty; (3) That the agreement lacked mutuality as required by R.C.M. 1947, section 17-803, and was unenforceable as calling for the performance of personal services under R.C.M. 1947, section 17-807, subd. 1.

Was the plaintiff granted an exclusive option to buy or was [102]*102 it

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Cite This Page — Counsel Stack

Bluebook (online)
313 P.2d 1014, 132 Mont. 96, 1957 Mont. LEXIS 10, Counsel Stack Legal Research, https://law.counselstack.com/opinion/steen-v-rustad-mont-1957.