Yost Farm Co. v. Cremer

• Decision Date: 04 December 1968
• Docket Number: No. 11459,11459
• Parties: YOST FARM COMPANY, a corporation, Plaintiff and Respondent, v. Leo CREMER, Jr., Defendant and Appellant.
• Court: Montana Supreme Court

Page 688

447 P.2d 688

152 Mont. 200

YOST FARM COMPANY, a corporation, Plaintiff and Respondent, v. Leo CREMER, Jr., Defendant and Appellant.

No. 11459.

Supreme Court of Montana.

Dec. 4, 1968.

Rehearing Denied Dec. 30, 1968.

Arthur P. Acher, Rankin & Acher, Helena, John P. Acher (argued), Missoula, for defendant and appellant.

Franklin S. Longan (argued), Longan & Holmstrom, Billings, for plaintiff and respondent.

HASWELL, Justice.

This is an appeal by a purchaser of land from a decree requiring him to convey his interest in the land to and quieting title in a prior contract purchaser. The cause was tried in the district court of the sixth judicial district before the Honorable Victor H. Fall, presiding judge, without a jury.

This case involves a half section of farmland in Sweet Grass County which had been leased for many years prior to the purchase contract in question by plaintiff Yost Farm Company, hereafter called Yost or purchaser, from John and Ernest Brennemann and after their deaths from their heirs, Mrs. Warren Bradbury, Mrs. Kendall Getman, and Mrs. Carl Reimuller, the original defendants in this case. On May 2, 1961, Yost, as purchaser, and Mrs. Bradbury, Mrs. Getman, and Mrs. Reimuller, as sellers, entered into a contract entitled 'Receipt and Agreement to Sell and Purchase' whereby Yost agreed to purchase and the three women agreed to sell the land in question under the terms contained in the contract.

Broadly speaking, the contract contained the following terms: (1) The total purchase price was $10,000, payable $500 down as a part payment and earnest money at the time of execution of the contract and the balance of $9,500 payable as follows: $2,500 upon evidence of merchantable title, with the balalce payable in annual installments in specified amounts with the final payment on July 1, 1964; (2) The sellers were to furnish purchaser an abstract of title or title insurance; (3) If sellers' title was not merchantable and could not be made so within a reasonable time after written notice by purchaser of defects, the earnest money would be returned to purchaser and all his rights under the contract terminated unless he elected to waive the defects and accept such title as sellers had; (4) If sellers' title was merchantable or insurable and purchaser did not complete the purchase, the earnest money would be retained by sellers and the contract would be at an end.

At the time of execution of the contract, Yost made the $500 initial payment. Thereafter sellers' attorney began checking into the status of the title to the land and determined that legal proceedings would be necessary to render the title merchantable. Conversations and correspondence followed between sellers' attorney and purchaser's attorney regarding the title, eventually culminating in an offer by sellers to convey such title as they had to purchaser under the contract. This offer was refused by purchaser. Subsequently sellers' attorney notified purchaser's attorney that the contract was terminated and refunded the $500 to purchaser.

According to the determination made by sellers' attorney the defects in the title were (1) absence of ancillary probate proceedings in Montana continuing the chain of title to the three women, and (2) a 1/6 interest in the property was held by one Bessie Brennemann who was not a party to the contract. No abstract or title insurance was ever furnished purchaser.

On December 17, 1962 Yost filed suit against Mrs. Bradbury, Mrs. Getman, and Mrs. Reimuller to specifically enforce the purchase contract. Thereafter in April, 1963, Leo Cremer, Jr., hereafter called Cremer, acquired title by quitclaim deed from the three women named as defendants in the suit and from Bessie Brennemann, the purported owner of a 1/6 interest in the property. Subsequently he was substituted as the sole party defendant. A supplemental complaint was filed covering events that occurred after the filing of the original complaint.

Trial was had on July 20, 1967. Judge Fall subsequently entered findings of fact, conclusions of law, and judgment favorable to Yost. The gist of the findings of fact and conclusions of law was: (1) that no abstract, title insurance, or evidence of merchantable title had ever been furnished Yost, (2) that no fractional ownership in Bessie Brennemann had been proved, (3) that Cremer purchased the land with notice of the purchase contract with Yost, (4) that Yost's contract was specifically enforceable, (5) that Yost should deposit the full purchase price with the clerk of court, that Cremer should deposit a quitclaim deed with the clerk thereafter, and that a quiet title decree should be granted Yost in the absence of furnishing him an abstract or title insurance. Judgment was entered accordingly.

After denial of Cremer's motion for new trial and amendment of the court's findings of fact and conclusions of law, Cremer appealed from the judgment and order denying new trial.

Cremer presents the following issues for review upon this appeal: (1) Did purchaser's rights under the contract terminate upon its refusal to accept such title as sellers had? (2) Was sellers' obligation to furnish an abstract of title a 'useless act' not requiring performance? (3) Was sellers' title merchantable? (4) Is purchaser entitled to specific performance of the purchase contract? (5) Is purchaser entitled to a decree quieting title?

At the outset we note that the parties to this appeal have treated the obligations of Cremer as co-extensive with the obligations of Mrs. Bradbury, Mrs. Getman, and Mrs. Reimuller under the purchase contract. No issue has been raised upon this appeal concerning the enforceability of Yost's rights under the purchase contract against Cremer. We shall treat this appeal accordingly.

Directing our attention to the first issue presented for review, it is Cremer's contention that the contract did not obligate the sellers to perfect their title. Hence when purchaser refused to accept the sellers' title as it was and was refunded his $500 earnest money and partial payment, the contract was at an end and the purchaser had no further rights thereunder.

Let us examine the language of the contract. The sellers agreed to sell the half section of land to the purchaser for a fixed price payable on specified terms. Payment terms on the balance of $9,500 are set forth in the following contract language: 'An additional $2,500 in cash upon evidence of merchantable title. The balance of the purchase price in the amount of $7,000.00 is to be carried by the seller on a Contract for Deed. Payments are to be made as follows: $3,000.00 plus Interest July 1, 1962, $3,000 plus Interest, July 1, 1963, $1,000 plus interest, July 1, 1964'. Sellers agreed to furnish purchaser an abstract of title or title insurance by the following language in the contract: 'It is further agreed: Seller shall at his expense furnish Purchaser an Abstract of Title continued to a date subsequent hereto showing merchantable...