Brown v. Griffin

• Decision Date: 30 January 1968
• Docket Number: No. 11285,11285
• Citation: 150 Mont. 498,25 St.Rep. 77,436 P.2d 695
• Parties: Coy BROWN, Plaintiff and Respondent, v. Harold H. and Clarice D. GRIFFIN, Defendants and Appellants.
• Court: Montana Supreme Court

Page 695

436 P.2d 695

150 Mont. 498

Coy BROWN, Plaintiff and Respondent, v. Harold H. and Clarice D. GRIFFIN, Defendants and Appellants.

No. 11285.

Supreme Court of Montana.

Submitted Jan. 11, 1968.

Decided Jan. 30, 1968.

Vance & Leaphart, Helena, C. W. Leaphart, Jr., (argued) Helena, John H. Jardine, (argued) Whitehall, for defendants and appellants.

Collins & Burns, Dillon, Richard F. Burns, (argued) Dillon, for plaintiff and respondent.

HASWELL, Justice.

Appeal by sellers from a judgment in favor of purchaser entered by the district court of Madison County decreeing specific performance of a contract of sale of a ranch and related personal property and awarding compensatory damages for wrongful possession of the same.

Plaintiff in the case was Coy J. Brown, who contracted to purchase the ranch. He died after the trial and judgment in district court and during the pendency of this appeal; his executor, his son and agent at all times, has been substituted for the purpose of this appeal. For simplicity and because the rights of each are identical, the Browns will be referred to herein as the purchaser. Defendants are Harold H. Griffin and Clarice D. Griffin, husband and wife, who contracted to sell the ranch and who will hereafter be referred to as the sellers.

On January 16, 1964, purchaser and sellers executed a written 'Receipt and Agreement to Sell and Purchase' sellers' ranch in Madison County, together with personal property used in connection with the operation of the ranch. Purchaser agreed to pay the total purchase price of $51,000 as follows: $20,000 'earnest money' in partial payment of the purchase price at the time of execution of the contract, assumption of an existing mortgage on the property of $24,000, and payment of the balance of $7,000 on or before July 1, 1964. Purchaser was entitled to immediate possession of the land excepting the dwelling house the possession of which sellers were entitled to retain until the balance of the purchase price was paid in full and thereafter at an agreed rental of $35.00 per month. Sellers were required to use the 'earnest money' deposit to pay off in full the equity of a former owner of the property from whom sellers had purchased. The contract further provided:

'1. It is further agreed: Seller shall at his expense furnish Purchaser an Abstract of Title continued to a date, subsequent hereto showing merchantable title to the above-described property vested in Seller, or in lieu thereof, at Seller's option, a title insurance policy insuring title thereto vested in Purchaser, free and clear of all liens and encumbrances, except the above mentioned mortgage to The Connecticut Mutual Life Insurance Co., to the extent of $24,000.

'It is further agreed that the broker assumes no responsibility in regard to the title and broker recommends that Purchaser have the Abstract of Title of Title Insurance Policy examined by an attorney.

'2. The real property is to be conveyed by warranty deed and the personal property by Bill of Sale free and clear of all encumbrances except * * * those enumerated in Section 1 above * * * '4. * * * if Seller's title is not merchantable or insurable and cannot be made so within a reasonable time, after written notice containing statement of defects is delivered to Seller, then said earnest money herein receipted for shall be returned to the Purchaser on demand and all rights of Purchaser terminated unless Purchaser waives said defects and elects to purchase; but if * * * Seller's said title is merchantable or insurable and Purchaser neglects or refuses to complete the purchase or shall fail to pay the balance of the purchase price as hereinabove provided, then said earnest money shall be forfeited to the Seller as liquidated damages and not as a penalty and this Agreement thereupon shall be of no further force of effect. * * *

'7. Time is of the essence of this Agreement * * *.' (Emphasis supplied.)

The purchaser paid $20,000 at the signing of the contract and shortly thereafter took possession of the property excepting the dwelling house. Later purchaser placed his own cattle on the pasture land, did some work to bring the summer crops to maturity, and performed some maintenance work on the premises.

Meanwhile on January 25, 1964, sellers paid off the equity of the former owners and ordered a title insurance policy. Apparently at no time did sellers advise purchaser, (1) of their election to furnish title insurance, (2) their ordering of title insurance, or (3) their paying off the equity of the former owners.

On the evening of July 3, 1964, when the sellers were over at the Brown's for ice cream, cake and talk, it became apparent that sellers considered purchaser in violation of the contract, had consulted an attorney about this a day or so previously, and that a notice of termination of the contract for failure to pay the final payment of $7,000 and make arrangements for assumption of the $24,000 mortgage by July 1 had been turned over to the sheriff for service on the purchaser. At this point a rather frosty atmosphere blanketed the assembled group. The sellers left shortly thereafter.

That same evening purchaser's son contacted Camilla Gage, the realtor handling the transaction, advising her of these development and depositing with her a $7Ooo check to cover the purchaser's final payment on the contract. The following day the sheriff served the notice of termination of the contract referred to above. Shortly thereafter, the sellers took possession of the ranch and have remained in possession continuously since. At no time did sellers furnish purchaser either an abstract, title insurance or any evidence of title; nor did sellers at any time execute a waranty deed or bill of sale, refusing to do so until after they had received final payment. Purchaser at no time prior to July 1 notified sellers or demanded of sellers that they furnish an abstract or title insurance policy.

On September 10, 1964, purchaser filed suit against sellers essentially seeking to compel sellers to specifically perform the contract and to secure damages from sellers for their wrongful seizure and possession of the property in question. In this suit purchaser contended, among other things, that he had been since the time of execution of the contract and still was ready, willing and able to pay the balance owed on the contract but that no abstract, title insurance policy or evidence of sellers' title had ever been furnished him. Purchaser further elected to receive an abstract of title in default of sellers' election within a reasonable time. Trial was had before the Honorable Jack D. Shanstrom, presiding Judge, sitting without a jury who thereafter entered findings of fact, conclusions of law and judgment against sellers. The judgment generally ordered restoration of possession to purchaser with damages for wrongful seizure and possession by sellers; delivery of an abstract showing merchantable title to purchaser, who would have 60 days thereafter in which to make written objection to title and after curing defects if any, (1) the final payment on the purachase price would become payable, (2) adjustment of mutual rights and liabilities of the parties would take place consisting of appropriate credits and liabilities specified therein, and (3) execution of deed and bill of sale by sellers contemporaneous with payment of balance owing by purchaser as so adjudged. From this judgment sellers appeal.

The issues which sellers present for review are as follows: (1) Is exact compliance with the terms of the contract making 'time of the essence' essential to purchaser's right to compel specific performance? (2) Is a finding that purchaser 'has been, and still is ready, able and willing to perform the contract fully on his part' the legal equivalent of tender of performance by purchaser?

(3) Does the preponderance of evidence show tender of performance by purchaser?

(4) Must purchaser prove that damages and restitution are inadequate remedies and that an unconscionable result would occur without specific performance in order to secure a decree of specific performance?

It should be noted that all these issues are bottomed on the sellers' basic contention that the decree of specific performance cannot stand in the instant case because (a) purchaser failed to pay or tender payment of the $7,000 balance of the purchase price to sellers by July 1, and (b) adequacy of other remedies, specifically damages and restitution.

In our view, none of the first three issues presented for review are material to the decision in this case. If all were answered favorably to sellers, they still would not prevail. The reason these issues are immaterial in the instant case is that each is predicated on the proposition that the contract requires payment of $7,000 or tender thereof by the purchaser by July under the facts and circumstances disclosed here. We do not so construe this contract.

The contract is to be construed according to the intention of the parties at the time of contracting (section 13-702, R.C.M.1947); and the language of the contract governs its interpretation (section 13-704, R.C.M.1947) unless the language is doubtful or ambiguous in which case the conduct of the parties under the contract is one of the best indications of their true intent. (Musselshell Valley Farming and Livestock Co. v. Cooley, 86 Mont. 276, 283 P. 213.) The interpretation of the contract required in the instant case is whether performance of the sellers' agreement to furnish an abstract or title insurance must be rendered prior to, concurrently with or subsequent to purchaser's agreement to make the final $7,000 payment on the purchase price. Sellers argue that their...