Steen v. Rustad
| Decision Date | 19 August 1957 |
| Docket Number | No. 9373,9373 |
| Citation | 313 P.2d 1014,132 Mont. 96 |
| Parties | Donald H. STEEN, Plaintiff and Respondent, v. Hubert E. RUSTAD and Evelyn T. Rustad, Husband and Wife, Defendants and Appellants. |
| Court | Montana Supreme Court |
George J. Allen, Livingston, Leavitt & Lucas, Miles City, and Ralph J. Anderson, Helena (Ralph J. Anderson argued orally), for appellants.
Young, Martin & Young, Baker (Arthur B. Martin, Baker, argued orally), for respondent.
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 payment 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 land 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'
'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.
'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, where 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.
In 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, I now wish to notify you that I wish to exercise the option to buy, as set forth in Plan No. 2.
'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 18, 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 ad 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 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, Hurbert E. Rustad, indicates that on October 19, 1951, $1,500 was deposited to his 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, § 17-803, and was unenforceable as calling for the performance of personal services under R.C.M.1947, § 17-807, subd. 1.
Was the plaintiff granted an exclusive option to buy or was it conditioned first upon defendants' decision to sell? Defendants' contention that plaintiff was not, rests upon the following words in the contract: 'Landlord hereby agrees to let and lease unto the tenant, and give the tenant a first option to buy.' Emphasis supplied. In arguing that the words as set out give plaintiff only the first opportunity to buy if defendants wish to sell, defendants rely upon certain definitions of the words 'first option to buy' in Vol. 17, Words and Phrases, Cumulative Pocket Part. While those authorities cited in that notable work may be relied upon in some instances, suffice it to say they are inapplicable in the present case. It is well established that a court, in interpreting a written instrument, will not isolate certain phrases of that instrument in order to garner the intent of the parties, but will grasp the instrument by its four corners and in the light of the entire instrument, ascertain the paramount and guiding intention of the parties. Mere isolated tracts, clauses and words will not be allowed to prevail over the general language utilized in the instrument. R.C.M.1947, § 13-707; Snider v. Carmichael, 102 Mont. 387, 58 P.2d 1004; Johannes v. Dwire, 94 Mont. 590, 23 P.2d 971; Lee v. Lee Gold Mining Co., 71 Mont. 592, 230 P. 1091.
If the following language in the lease is examined in the light of the aboverule of construction the paramount intent of the parties becomes immediately apparent:
'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 land for year 1951, and further, shall constitute a down payment upon a contract for sale of said land * * *
'Landlord agrees to sell and tenant agrees to buy the land hereinbefore described for the sum of $8,500.00. * * *
'The foregoing paragraph shall constitute the minimum provisions under which tenant may exercise his option to buy * * *
'It Is Further Understood and Agreed, that in the event that the tenant is called into the military services 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.' Emphasis supplied.
Nowhere in the above-quoted language does the term 'first option to buy' appear. On the contrary the entire language of the agreement tends toward only one interpretation; that the...
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