Turner v. Ferrin
| Decision Date | 24 May 1988 |
| Docket Number | No. 88-30,88-30 |
| Citation | 232 Mont. 146,757 P.2d 335 |
| Parties | David TURNER and Patricia M. Turner, Plaintiffs and Appellants, v. Steve W. FERRIN and Debra A. Ferrin, Defendants and Respondents. |
| Court | Montana Supreme Court |
J.B. Wheatcroft, Miles City, for plaintiffs and appellants.
Bruce Brown, Brown & Huss, Miles City, for defendants and respondents.
This is an appeal from a judgment and final order denying plaintiffs/appellants David and Patricia Turners' (Turners) motion to amend findings of fact and conclusions of law issued by the District Court of the Sixteenth Judicial District Court, Custer County, Montana. Following a bench trial, the court disallowed rescission of a contract for deed entered into by the Turners with defendants/respondents Steve and Debra Ferrin (Ferrins). We affirm.
Appellants raise two issues for our review:
1. Whether the District Court erred in failing to find the Turners were entitled to rescission?
2. Whether the court erred by declaring a forfeiture when Ferrins could not provide title?
In the judgment, issued on October 21, 1987, the District Court found that the sale of property involved in this case was a sale in gross with an approximate six percent acreage variation that was not a material nor substantial lack of consideration that would entitle the Turners to rescission. The court found the Turners guilty of laches, and that the Ferrins had given due notice of default that was not cured. Finally, the court ordered the Turners to cure the default within thirty days of entry of the judgment at which time the Ferrins were to deliver a deed to the Turners and that failure would result in termination of the contract with the Ferrins entitled to immediate possession of the property.
The Turners filed consolidated post-trial motions moving for amendment of the findings of fact, conclusions of law and judgment or in the alternative, a new trial on October 30, 1987. It is from this final order denying these motions and the judgment that the Turners appeal.
Steve and Debra Ferrin owned an irrigated ranch near Miles City, Montana. The size of the parcel is in dispute, either approximately 96 acres or, as the Turners claim, as small as 90 acres. A buy-sell agreement, prepared by Steve Ferrin, who is also a real estate broker, was signed by the Turners on September 13, 1982. The total purchase price was $230,000 with a $100,000 down payment paid previous to the closing on October 12, 1982. A contract for deed was executed by all parties. The Turners were represented by counsel. Attached to the contract for deed as exhibit "A" was a description of the real property as follows:
Township 8 North, Range 48 East, M.P.M. Section 5:
N 1/2SW 1/4 and NW 1/4SE 1/4, LESS that portion described as Tract 3, containing 19.26 acres, more or less, in accordance with the Certificate of Survey filed for record as Document No. 60202 in Envelope No. 191 of the Plat Cabinet, records of Custer County, Montana, and LESS that portion of the NW 1/4SW 1/4 which lies north and west of the right-of-way of the Burlington Northern Railroad (formerly Northern Pacific Railroad Company).
That portion of the NE 1/4SE 1/4 which lies south and east of the right-of-way of the Burlington Northern Railroad (formerly the Northern Pacific Railroad Company).
Containing 96.73 acres, more or less.
This description was exactly the same as that contained in the buy-sell agreement. Paragraph nine of the contract for deed referred to title insurance and stated the property was subject to easements and rights of way of record and other visible easements. However, the warranty deed placed in escrow from the Ferrins to the Turners contained no reservations or exceptions for any servitudes. The warranty deed did contain the exact description of the property as in the contract for deed and the buy-sell agreement.
The Turners moved onto the property in October of 1982 and Patricia Turner testified that they thereafter spent $26,815.69 on improvements on the property. Both annual payments of $16,133.97 were timely made in 1983 and 1984, however, the 1985 payment was not made. The Turners and Ferrins entered into an accommodation agreement on December 24, 1985 extending the time to make the annual payment but the default was not cured.
Prior to the scheduled date of forfeiture, the Turners filed an action for declaratory judgment attempting to have the contract declared a mortgage thereby entitling them to a right of redemption and occupancy. The Ferrins were granted summary judgment on this issue. The Turners then filed for relief under Chapter 11 in Bankruptcy Court. The Turners pursued rescission of the contract in Bankruptcy Court but the cause was remanded to the Montana State District Court because of mandatory abstention under Section 28 U.S.C. 1334(c)(2).
An amended complaint was filed March 19, 1987 in which it was alleged for the first time that an acreage shortfall was present in the sale of the property. The Turners employed a survey company to survey the property and the company's report disclosed that less than 96.73 acres existed. The amended complaint alleged that no exceptions were made in the warranty deed for a right of way. It was alleged that a portion of the property actually contained a right of way for a state highway and this easement was "on file and of record." The complaint also alleged that due to the fact the premises described in the warranty deed did not describe the property as "an aliquot part as defined by the subdivision laws of the State of Montana and is otherwise not subject to a certificate of survey" the deed was "ineligible for filing for record if the warranty deed were delivered to plaintiffs."
A bench trial was held September 18, 1987 and both parties presented testimony and exhibits. Although the Turners presented the survey they had recorded, they did not call the surveyors themselves. The Ferrins also presented two unofficial surveys that were not recorded and did not call a surveyor. The Turners' survey shows the tract contained 90.73 acres. This survey gave the recorded right of way for U.S. Highway 10 as a boundary rather than the Burlington Northern Railroad right of way stated in the description.
The Ferrins' exhibits were also admitted into evidence. These exhibits show, and Steve Ferrin testified to, the possible mistake that occurred in this case. The Ferrins' exhibit number two shows the property involved as an undivided 115.99 acre tract, only a portion of which was subject to the contract for deed. The Ferrins' exhibit number one shows tract three as a 19.26 acre plot that had been sold earlier by the Ferrins. The remainder of the property, 115.99 minus the 19.26 acres, is the unit that was sold to the Turners. It was in this manner that the figure, 96.73 acres, was determined.
The District Court adopted the Ferrins' proposed findings of fact and conclusions of law. The court stated that the sale was one "in gross" because the contract provided for the sale of 96.73 acres "more or less" and the six percent acreage variation was not material. Further, the court concluded, the Turners did not prove "by a preponderance of the evidence that there was in fact any acreage discrepancy."
This Court's standard of review of a lower court's findings of fact is whether the findings are supported by substantial evidence. Where conflicting evidence is presented, the trial court will not be overturned unless there is a clear preponderance of the evidence against the findings. Taylor et al. v. Cannaday (Mont.1988), 749 P.2d 63, 66, 45 St.Rep. 102, 105. We have held numerous times that a trial court's verbatim adoption of all proposed findings and conclusions is acceptable if they are comprehensive and detailed, are supported by the evidence before the court, and are not clearly erroneous. Olsen v. McQueary (Mont.1984), 687 P.2d 712, 716, 41 St.Rep. 1669; R.L.S. v. Barkhoff (Mont.1983), 674 P.2d 1082, 1085, 40 St.Rep. 1982.
The Turners' argument that the District Court erred is based on two theories. First, that the presence of the easement not referred to in the warranty deed entitles them to the equitable remedy of rescission of the contract for deed and return of all the money they have paid. Secondly, the Turners contend forfeiture was not properly granted and they are entitled to rescission because the title to be conveyed by the Ferrins was unmerchantable as it was unrecordable.
Initially, we note that this sale indeed seems to be for a "sale in gross." The Ferrins appropriately point out that this Court has stated in Hardin v. Hill (1967), 149 Mont. 68, 74, 423 P.2d 309, 312, that "[g]enerally when land is sold in gross, a variation in acreage from what the parties had contemplated is not grounds for rescission or other relief." There was sufficient evidence to support the finding of the District Court that the property was a sale in gross. However, not only does this rule require determination of whether the property in question is sold in gross, where the relief requested is equitable in nature as is rescission, we should also consider whether the acreage shortfall is material.
In Parcel v. Myers (Mont.1985), 697 P.2d 92, 93, 42 St.Rep. 352, the words "in gross" were not actually used in the sale document but we held the district court properly found a bulk real estate transaction occurred and the property was sold "in gross." The purchaser in Parcel, "looked at the property at least three (3) times;" walked the property boundary which was fenced on its borders; and was told "you are looking at what you get." No conversation about price per acre occurred and negotiations centralized around the total purchase price and buildings. Here, the Ferrins fixed a purchase price of $240,000 and the Turners bargained for and received a unit price of $230,000. At trial, no evidence was ever...
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...while unable to tender good title, enforce a forfeiture provision of a contract on default of the vendee. See Turner v. Ferrin (1988), 232 Mont. 146, 155, 757 P.2d 335, 340. ¶ 53 In light of the foregoing, it is undisputed here that Elk Park agreed to "simultaneously with the execution of t......
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...that the failure was "partial"—but has led to a similar degree of confusion in much of our case law. Compare Turner v. Ferrin (1988), 232 Mont. 146, 152-54, 757 P.2d 335, 338-40(concluding that pursuant to § 28-2-1711(2), a claim for rescission was properly denied where there was no showing......
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