Hughes v. Melby

• Decision Date: 16 July 1958
• Docket Number: No. 9638,9638
• Citation: 340 P.2d 511,135 Mont. 415
• Parties: John Junior HUGHES, Plaintiff and Appellant, v. R. M. MELBY and Eli Melby, his wife, and William Melby, Defendants and Respondents.
• Court: Montana Supreme Court

Page 511

340 P.2d 511

135 Mont. 415

John Junior HUGHES, Plaintiff and Appellant, v. R. M. MELBY and Eli Melby, his wife, and William Melby,

Defendants and Respondents.

No. 9638.

Supreme Court of Montana.

July 16, 1958.

On Rehearing June 4, 1959.

Rehearing Denied June 24, 1959.

H. Leonard DeKalb, Raymond Dockery, Jr., Lewistown, for appellant.

H. Leonard DeKalb, Lewistown, argued orally for appellant.

Anderson & Sorenson, Ralph J. Anderson, Helena, Brown, Sande, Symmes & Forbes, Billings, for respondents.

Ralph J. Anderson, Helena, argued orally for respondents.

ANGSTMAN, Justice.

This is an action for specific performance of an alleged contract for the purchase by plaintiff, John Junior Hughes, from defendants, R. M. and Eli Melby, of certain described real estate situated in Petroleum County and for damages for the refusal of the defendants to surrender possession of the property. The action was tried to the court sitting without a jury resulting in findings of fact and conclusions of law in favor of the defendants. Plaintiff has appealed from the judgment.

The facts are these: On September 24, 1953, defendants, R. M. Melby and Eli Melby, his wife, signed an agreement employing E. F. Carnell as their agent to sell the property. The agreement was as follows:

'I hereby appoint E. F. Carnell of Lewistown, Montana, whose office is located in said City and State, my agent with the exclusive right to sell the following property:

'My ranch property on Flat-willow T. 12 N-R. 26 E, Petroleum County, Mont. (3560 acres more or less.)

'For the sum of $105,000--including 5 stacks of hay on Pike Creek. Conditions and terms of the sale are as follows:

'29% Cash--bal. 10 annual p'm'ts. 5% int. by Nov. 15th, possession of land April 1-1954--seller reserve 1/2 land-owner's Rovalty. Transfer all water rights & grazing rights in District. Seller pay 1953 taxes.

'And I agree to furnish a title as out-lined in the following paragraph A.

'A. An abstract of title showing a good merchantable title to said property together with a warranty deed properly executed.

* * *

* * *

'Said sale may be made for a less amount if hereafter authorized by me; you are further authorized to receive a deposit on the sale price. I agree to pay a commission of $5,000--on the sale price and the commission shall be payable as soon as the sale is made and a down payment has been made, or sale price paid in full at the time of sale, and, or as soon as a binder fee has been collected on the sale, which ever be first.

'This authorization is to remain in effect and full force for 10 days * * *.

'Dated at Lewistown, Montana this 24 day of Sept--1953----.

'/s/ R. M. Melby

'/s/ Eli M. Melby'

Carnell immediately thereafter contacted plaintiff and induced him to buy the property. The plaintiff thereupon signed the following statement:

'To E. F. Carnell, Agent and Broker, for the sale of the Melby lands as per listing.

'I, John Jr. Hughes, have read the Listing Agreement covering the Melby ranch in Petroleum County, Montana and I hereby agree to purchase the same and pay for the said lands in accordance with the said listing agreement and I deposit herewith with you the sum of Ten Thousand Dollars ($10,000.00) as a binder payment and as evidence of good faith and I will go through with the contract in accordance with the listing agreement signed by Mr. and Mrs. Melby, with you as agent.

'Dated this 24th day of Sept. 1953.

'/s/ John Jr. Hughes'

Plaintiff paid to Carnell the sum of $10,000 and received the following receipt:

'Received of John Jr. Hughes----

'Ten Thousand & no/100 Dollars

'Dep. on Melby Ranch as per Listing

'Dated Sept. 24-1953 _____

'$10, 000/00

/s/ E. F. Carnell'

Carnell thereupon wrote his own check in the sum of $5,000 and delivered it to the defendant, R. M. Melby. However, before delivering the check to Mr. Melby, Carnell informed Melby that he had sold the ranch to Mr. Hughes. Then for the first time, according to Carnell, Mr. and Mrs. Melby informed him that their son William owned a part interest in the ranch and that before the contract could be performed they wanted to discuss the matter with William. On October 8, 1953, Carnell received a letter which was written by Mrs. Melby at the request of her husband which was as follows:

'Mr. E. F. Carnell,

'Lewistown, Mont.

'Dear Sir:

'Called at your office Tue. Oct. 6, 1953 found you out. Also called on Mr. Hugh he too out.

'Son said O.K. to sell.

'Sincerely yours,

'/s/ R. M. Melby'

It was after receipt of this letter that Carnell delivered the $5,000 check to Mr. Melby. Arrangements were then made for the plaintiff and Mr. and Mrs. Melby to meet in Roundup at the office of lawyer Mather to prepare and place in escrow the necessary papers. Before this contemplated meeting Carnell received another letter from Mr. R. M. Melby reading as follows:

'Roundup, Montana

'Oct. 15, 1953

'Mr. E. F. Carnell

'Lewistown

'Mont.

'Dear Sir:

'Came to see you today, but find you were out of your office.

'Had another letter from son asking us to hold this deal off until he comes home for his vacation Christmas.

'Enclosing is your check don't want to hold it that long.

'Yours sincerely,

'/s/ R. M. Melby'

On October 15, 1953, R. M. Melby caused two deeds to be recorded which vested an undivided one-third interest in the property to the son William. These deeds had been executed and acknowledged several months before they were recorded. It should be noted that Mr. Melby testified that he had informed Carnell at the inception of the negotiations that the son William had an interest in the ranch. This Carnell denied. However there is no testimony in the record that plaintiff at any time was advised of the fact that William had any interest in the ranch. It should be noted also that before Mr. Carnell undertook any of the dealings resulting in the sale of the property he examined the records in Petroleum County and found that the title to all the property stood in the name of R. M. Melby and his wife, and that there was nothing of record to indicate the son had any interest in it. Carnell agreed to wait until the son returned during the Christmas holidays and plaintiff was so advised. During the Christmas holidays the Melbys declined to go through with the contract and this action followed.

One of the findings made by the trial court was that the plaintiff on November 15, 1953, did not have as much as $20,450 of his own and had no legally binding agreement from any person or corporation or other entity to give him such sum of money. At this point it should be noted that the pleadings do not raise any question of the plaintiff's ability to meet the obligations under the contract. The only defense asserted by the answer is that there was not any binding contract on the part of the defendants because the writing was insufficient to authorize Carnell to make the contract under the statute of frauds. Had the issue been raised by the pleadings doubtless plaintiff would have submitted more, evidence of his ability to meet the contractual obligations assumed by him. He did, however, testify in substance as follows: That at the time of this transaction he was the owner of 250 head of cattle and around 1,500 acres of land; that he had made arrangements with the Northwestern Bank in Lewistown to make full payment for the property; that at the time of the trial he was in a position to make the entire down payment and could in fact write a check for the entire purchase price. This evidence was uncontradicted.

The conclusion reached by the trial court cannot be sustained upon the finding that plaintiff was not able to make the down payment of twenty-nine percent of the purchase price.

The principal contention, however, is that there has been a failure to meet the requirements of the statute of frauds. This was expressly raised in the answer which alleged that the action is barred by sections 13-606, 93-1401-7 and 74-203, R.C.M.1947. It is well settled that the note or memorandum necessary to meet the requirements of the statute of frauds may consist of several writings. Johnson v. Eliot, 123 Mont. 597, 218 P.2d 703; Johnson v. Ogle, 120 Mont. 176, 181 P.2d 789; Ward v. Mattuschek, Mont., 330 P.2d 971. Likewise it is sufficient if it contains all the essentials of the contract and they may be stated in general terms. Dineen v. Sullivan, 123 Mont. 195, 213 P.2d 241; Long v. Needham, 37 Mont. 408, 96 P. 731; Hunt v. S. Y. Cattle Co., 75 Mont. 594, 244 P. 480. The fact that the memorandum did not specify when the deed should be furnished does not defeat the sufficiency of the note or memorandum because the law implies that it be furnished within a reasonable time after plaintiff performed the obligations imposed upon him. R.C.M.1947, Sec. 13-723.

There are many cases supporting the view that ordinarily the contract with a broker simply constitutes a listing of the property for sale and authorizes the broker to search for a purchaser, but it does not give the broker authority to bind the owners of land to any agreement of sale that he might make. There are exceptions to the rule and of necessity each individual contract must be given its own interpretation. It is, of course, essential to ascertain the intention of the parties. If the sellers intended to give the agent authority to make an agreement in their behalf there is no reason why they may not do so. What then was the intention of the parties as expressed in the agreement employing the broker? The document signed by the defendants authorized the broker Carnell to receive a down payment. It is difficult to understand how he could do so without at the same time obligating the defendants to sell the land. That is the sum and substance of our holding in the Ward case, supra. But even on that point there is a conflict of authorities. Thus in 8 Am.Jur., Brokers, Sec. 61, pp. 1018-1019, it is said that 'Ordinarily, there is no implied authority to execute a...