Byrne v. Terry

• Decision Date: 16 September 1987
• Docket Number: No. 87-51,87-51
• Citation: 44 St.Rep. 1620,741 P.2d 1341,228 Mont. 387
• Parties: Maxine H. BYRNE, and J. Michael Byrne, co-personal Representatives of the Estate of James Byrne, Plaintiffs and Appellants, v. Teresa M. TERRY, Defendant and Respondent.
• Court: Montana Supreme Court

Page 1341

741 P.2d 1341

228 Mont. 387

Maxine H. BYRNE, and J. Michael Byrne, co-personal Representatives of the Estate of James Byrne Plaintiffs and Appellants, v. Teresa M. TERRY, Defendant and Respondent.

No. 87-51.

Supreme Court of Montana.

Submitted on Briefs July 30, 1987.

Decided Sept. 16, 1987.

Milodragovich, Dale & Dye, Kim L. Ritter, Missoula, for appellant.

Garnaas, Hall & Pinsoneault, H.L. Garnaas, Missoula, for respondent.

HARRISON, Justice.

Maxine Byrne and J. Michael Byrne, acting as co-personal representatives of the estate of James Byrne, appeal a judgment of the Fourth Judicial District in and for the County of Missoula that awarded the estate $42,000 in commission fees as detailed in a note signed by Teresa Terry but that specifically refused to award interest. The judgment was issued September 8, 1986; the memorandum refusing to reconsider the question of an award of interest was issued December 8, 1986.

We affirm in part and reverse in part. We remand the matter to the District Court for proceedings to award interest.

James Byrne served as a realtor for Terry when she entered into a contract for deed on November 6, 1978 to buy some 400 acres of property in Ravalli County. In that contract she agreed to pay James Byrne's commission. She signed a handwritten note on May 28, 1979 in which she agreed to pay James Byrne $42,000 in commission from the resale of parcels of the acreage. One clause of the note said James Byrne would not charge Terry interest. The relevant portion of the note reads:

[w]hereas J. Byrne has requested at this time a note be signed for a total of Forty-two Thousand and no/100 dollars ($42,000.00), and whereas J. Byrne has stated that payments of this commission will be made from the assigning of portions of the funds received from the sales of parcels of the purchased property; I therefore promise to pay Forty-two Thousand and no%1/400 dollars ($42,000.00) as set forth above.

s/Teresa M. Terry

(Lineouts appear on the original.)

On September 24, 1979, Terry sold 352 acres of the property. Terms were $50,000 payable on that date, $100,000 due on January 31, 1980 and the remaining $450,000, subject to 8 1/2 interest, due January 1, 1990. Terry transferred her remaining interest on May 16, 1980 pursuant to an agreement that required the transferees to assume all of Terry's obligations, including the resolution of a claim for $42,000 in commission fees by the James Byrne estate. (James Byrne had died October 30, 1979.) Terry retained 19 acres as security that the transferees would settle the claim. The co-personal representatives, ignorant of the attempted transfer of the obligation, presented the note to Terry. When she refused to honor it, this litigation arose.

The District Court, sitting without a jury, heard the evidence on February 24, 1986. The court found that the writing signed by Terry was a promissory note demonstrating an obligation to pay $42,000 as commission fees when the acreage was resold. It found that substantially all of the property was resold on September 24, 1979 and that Terry received $50,000 in partial consideration of that sale on that date. The court concluded that the note became payable on September 24, 1979 because of the resale of the property, and entered judgment accordingly.

The co-personal representatives moved for reconsideration of the matter in order to obtain interest on the debt. They claimed they were due 8% interest per year as spelled out in a preprinted, typewritten note that had not been presented into evidence and did not contain Terry's signature. Otherwise, they claimed they still would be entitled to the statutory rate of interest.

Terry also asked the court to reconsider its findings of fact and conclusions of law. She argued to the District Court that plaintiff had failed to prove that she had received any payments on the November 1979 contract or that the proceeds of that contract were intended to pay the $42,000 commission. She now adds the argument that the commission fee is not due since the final payments on the November 1979 contract are not due until January 1990.

The District Court denied the motions to reconsider. In its memorandum of December 8, 1986, the court discounted the provisions of the note referred to by the co-personal representatives. The court wrote:

There was no copy of the note attached to the Motion. However, referring to the copy of the note which is an exhibit, there is no mention whatsoever of interest except a provision "... and whereas J. Byrne has stated there will be no interest charged," ... The note is payable upon the happening of a contingency and therefore is not payable at a date certain.

The question of whether interest is appropriate may be resolved through the examination of several statutes, Secs. 27-1- 211, 27-1-312, and 31-1-106, MCA. These statutes indicate that interest was owed and should have been awarded. Co-personal representatives of the estate base their claim on Sec. 27-1-211, MCA, which reads:

Every person who is entitled to recover damages certain or capable of being made certain by calculation and the right to recover which is vested in him upon a particular day is entitled also to recover interest thereon from that day except during such time as the debtor is prevented by law or by the act of the creditor from paying the debt.

A party must satisfy three criteria to be eligible for prejudment interest under Sec. 27-1-211, MCA. Those criteria are (1) an underlying monetary obligation; (2) the amount of recovery is certain or capable of being made certain by calculation; and (3) the right to recover the obligation vests on a particular day. Agrilease Inc. v. Gray (1977), 173 Mont. 151, 160, 566 P.2d 1114, 1118-19. The three criteria were satisfied in Agrilease even though the obligation was not due on a specific date, but rather when an irrigation system was completed. Thus, the three criteria are satisfied in the case before this Court: the underlying...