73 P.2d 541 | Mont. | 1937
Specific performance being an exceptional remedy, the general rule is that great accuracy of averment is required, — the facts relied on must be stated in the complaint, and, unless they are so stated, they may not be supplied by proof. Generally speaking, the performance, or part performance, where the agreement is admittedly oral and for the sale of land, must be such that the court can say, from an examination of the complaint alone, that nonperformance would, unless the other party to the alleged agreement were compelled to perform, be a fraud upon the one claiming performance. (Eccles v. Kendrick,
So far as the sufficiency of the complaint is concerned, the test is not so much whether the oral contract has been partly or even fully performed. Bare allegations and proof of such facts are not sufficient. Part performance, or full performance, in order to take an invalid oral agreement for the sale of land out of the statute, must be such as to place the party performing in a situation which is a fraud upon him unless specific performance is decreed. Complete performance by one party is not always sufficient to authorize specific performance of an invalid oral agreement. (Forbes v. City of Los Angeles,
Acts of part performance, in order to justify specific performance of an oral contract must have been done in pursuance of the contract, with intention to carry it into execution and with the consent and knowledge of the other party. Anything done after the other party has repudiated the oral agreement cannot be considered as part performance. (Fritz v. Mills,
To warrant specific performance the facts and evidence must be such as to show that the remedy at law is inadequate. True, by the provisions of section 8717, Revised Codes, a presumption exists that an agreement for the transfer of real property cannot be adequately relieved by pecuniary compensation, and that one for the transfer of personal property can be so relieved. However, this is only a presumption and like all presumptions, unless they are made conclusive, can be rebutted. (Fleishman v.Woods,
It might be said that the tendency of modern decisions is to maintain the statute of frauds and to limit the exceptions. (French v. Mitchell,
All plaintiffs lost were the crops on the land for the year 1935, and its temporary possession while defendant Helvik harvested such crops. For the value of these crops plaintiffs had and have an adequate remedy at law. Another element which is essential to the remedy of specific performance, and which should appear from the complaint, and which must be *441
established by the evidence, is mutuality of remedy and obligation. (Templeton v. Williard,
This court is in line with the general rule that there must be something more than mere temporary possession to warrant specific performance of an oral agreement for the sale of land. (Milwaukee Land Co. v. Ruesink,
On the escrow agreement: An escrow must in all cases be grounded upon a valid executory contract, and in case of an escrow in reference to the sale of land, such executory contract must be in writing and signed by the parties to be charged, and must embody all the essential terms of the sale. The execution of the deed by plaintiffs, even though they should now agree to abide by its terms, — which they do not, — and the check left there signed by L.L. Helvik, cannot possibly constitute an escrow agreement for these are not based upon any valid, written, executory contract of sale. (Los Angeles etc. School District
v. Quinn,
Here, the agreement being oral, and as we seriously contend, there being no sufficient part performance to take it out of the statute of frauds, all the evidence in reference to the agreement, alleged to have been made at the office of R.A. O'Hara, was improper, and defendants' objection to it should have been sustained.
Assuming that oral agreements for the sale of land may be reformed, which premise we do not admit, where is the evidence in this case which warrants reformation of either the alleged oral contract or the deed executed by plaintiffs? The reformation is sought upon the ground that there was a mutual mistake of the parties, and a mistake upon the part of the scrivener in reference to the description of the land sold and mentioned in the deed. We know of no such evidence.
Now, in order to entitle one to reformation of a written agreement or written instrument the evidence must be clear and convincing that there was in fact a mutual mistake. (Humble v.St. John,
Here, the letter, Exhibit C, refers to the deed, and to the check. [See opinion.] It likewise refers to the release of mortgage and the time within which it must be delivered. The letter likewise refers to the agreement of sale. Thus from the connected writings we get: 1. An agreement to sell. 2. The property to be sold. 3. The cash price. 4. The date of performance. 5. The obligation relative to taxes.
Upon the delivery of the release to Mr. O'Hara, the deed was to pass to appellants and the check to respondents. Thereupon the contract would have been complete and none of the *444 terms would have rested in parol. Consequently we respectfully submit that there is no question of the enforcement of an oral contract involved and that appellants' argument as to part performance is entirely aside from the point.
The question of reformation: The evidence shows almost without dispute that a reformation on the ground of mutual mistake is not only warranted, but compelled by the evidence. There is no dispute that, 1. Appellants lived next to the tract in question. 2. The boundaries of the land excluding the Terrio tract and the highway were described to appellants before the sale. 3. A day or two after the meeting in O'Hara's office the parties went over the land and discussed the boundaries with reference to the part each should fence. 4. At all times from the beginning to the end of the transaction the Terrio land was fenced and the highway stakes were set out. 5. The appellants farmed the land for a whole season and expressed no dissatisfaction with the boundaries. The appellants did not deny a single one of the above facts. Under the authorities the court was required to reform the instrument on the ground of mutual mistake. (Clack v. Clack,
The remedy at law is inadequate: Section 8718, Revised Codes, provides: "It is to be presumed that the breach of an agreement to transfer real property cannot be adequately relieved by pecuniary compensation, and that the breach of an agreement to transfer personal property can be thus relieved." There is not one iota of evidence in the case rebutting the presumptions established by the above section of the Code. If appellants wished to overcome the presumption, the duty was upon them to furnish the evidence. Not having done so they cannot now claim that the presumption has no application. In not one of the cases cited by appellants on this feature of the case did a court hold that specific performance should not be allowed where the subject matter was land.
The remedy was mutual: Where respondents went to O'Hara and tendered the release of mortgage and requested that he deliver the check and deed, the remedy was mutual. All appellants *445
had to do to get the land was pay the money as they agreed to do. They would have then received the deed. Under this deed they would have received a title to more than they bargained for, but they would have received everything for which they did bargain. There was nothing left to be done by anyone but the appellants. This is sufficient to satisfy the requirement of mutuality. (Finlen v. Heinze,
Under the provisions of section 8722, Revised Codes, the respondents are entitled to relief even though reformation is not granted. That section provides: "Specific performance cannot be enforced in favor of a party who has not fully and fairly performed all the conditions precedent on his part to the obligation of the other party, except where his failure to perform is only partial, and either entirely immaterial, or capable of being fully compensated; in which case specific performance may be compelled, upon full compensation being made for the default." There seem to be no cases in Montana construing the provisions of this section. However, the matter has been thoroughly decided elsewhere and the cases on this proposition are to be found in a note in 81 A.L.R. 900. The general rule is stated there as follows: "A court of equity, in granting specific performance, looks at the substance and not merely the letter of the contract. Accordingly, where a vendor seeks specific performance of a contract which he is in a position substantially to perform by conveying substantially the quantity of land described therein, a decree for specific performance will be entered with compensation for any small and immaterial deficiency." If that were done in the instant case, then, since the appellants bargained to pay $1,000 for 25 acres of land, the price per acre would be $40. Substracting the price of .7 of one acre, the vendor here is entitled to specific performance less an abatement of $28 on the purchase price. Plaintiffs brought this action to compel the specific performance of a contract to sell and purchase real property. After *446 some preliminary negotiations relative to the sale and purchase, the parties met on March 9, 1935, at the law office of O'Hara Madeen, at Hamilton, Montana. The plaintiffs made and acknowledged a deed of conveyance to the defendants, and the defendant L.L. Helvik made and signed a check payable to the order of the plaintiffs for the purchase price of the land; the deed and check were deposited with R.A. O'Hara, a member of the law firm mentioned above.
It appears to have been the intention of the parties to place the deed and check in escrow at a local bank, the deed to be delivered to the defendants and the check to the plaintiffs when the plaintiffs obtained and delivered a release of a mortgage held by the Federal Land Bank, covering a part of the land conveyed; but such tacit understanding about depositing the documents in the bank was never carried out. They were left in the custody of Mr. O'Hara, and it would appear from the record that the parties by their subsequent actions considered O'Hara as the escrow holder.
Delay was encountered in obtaining the release of the mortgage, and on October 24, 1935, defendants mailed to the plaintiffs the following letter:
"You are hereby notified that unless within thirty (30) days from this date you obtain a release of the Federal Land Bank mortgage on the land you agreed to sell us and for which deed was deposited with Mr. O'Hara at Hamilton, we will direct him to return deed to you and withdraw our check and call the transaction off. We do not feel that we can keep this matter open any longer."
On or about November 5, 1935, plaintiff Conner received the release of the mortgage from the Federal Land Bank, and on the following day called the defendant Helvik by 'phone and advised him that the release had come, and to come down and settle up. It does not appear from the record whether plaintiff received any response to this advice or not, and on November 16 thereafter the plaintiffs had a letter prepared which they signed and addressed to R.A. O'Hara, and the plaintiff Conner personally delivered such letter to Mr. O'Hara and at *447 the same time delivered to O'Hara the release of the mortgage. Such letter was in the following words:
"In accordance with our contract with Lewis L. Helvik and Lena C. Helvik, with reference to certain lands in Ravalli county, Montana, and for which you hold a deed from us in favor of them to be delivered when the Federal Land Bank mortgage on the same has been released and is ready for delivery, we now herewith tender you said release and authorize you to turn over the same along with the deed to the said Helviks and demand that you turn over to us the check you hold as the purchase price thereof. Should you not see fit so to do we hereby demand that you retain said papers and the check representing the purchase price of said lands, until there has been a determination of the rights of the respective parties by a court of competent jurisdiction."
About the same time the defendants notified O'Hara not to deliver any of the instruments held by him to any person. Such was the situation, as it appears from the record, when this action was commenced.
In addition to the foregoing facts, the complaint alleges that on March 9, 1935, plaintiffs were the owners of certain lands therein described, free and clear of encumbrances, except a mortgage to the Federal Land Bank of Spokane; that on the date last mentioned plaintiffs orally agreed to sell, and defendants orally agreed to buy, a certain tract of land about which prior negotiations had been carried on; that the purchase price was $1,000, to be paid upon plaintiffs' obtaining a release from the Federal Land Bank of the mortgage heretofore mentioned; that defendants should pay the taxes for 1935 and thereafter; that the deed and check deposited with O'Hara should be delivered to the respective parties upon the receipt and delivery of the release of mortgage referred to; that by reason of the mistake of the scrivener the land agreed to be sold and purchased was misdescribed, which was not discovered by plaintiffs until a short time prior to the commencement of the action; that the grant was of 21 acres more or less and that 24.4 acres were actually conveyed by the deed, and that the amount included *448 by mistake is a small area and not an inducing factor in the agreement; that defendants took possession of the land, irrigated the same, harvested two crops of hay therefrom, retained such crops, and paid one-half the taxes for the year 1935 in accordance with the agreement; admits the receipt of defendants' letter of October 24, 1935; that plaintiffs obtained the release after overcoming objection of the mortgagee and deposited the same with R.A. O'Hara within the 30 days mentioned in defendants' letter of October 24, supra; that the defendants have refused to deliver the check or pay the purchase price on request; that plaintiffs have performed all of the obligations imposed upon them by the agreement and are ready and willing to convey a fee simple title to defendants free and clear of all liens, mortgages, encumbrances, and defects of title whatsoever, and pray that the deed be reformed to convey only such land as the parties agreed upon in their oral negotiations, for the payment of the purchase price of $1,000, with interest thereon from November 10, 1935, and for such further relief as may be just and proper. Copies of the deed involved and the check of defendants deposited with R.A. O'Hara are made Exhibits A and B, respectively, attached to and made a part of the complaint.
Defendants' demurrer to the complaint was overruled. The answer is a general denial of all the material allegations of the complaint; it admits farming the land involved in the year 1935 and the payment of one-half the 1935 taxes, but alleges that such payment was made inadvertently by reason of the fact that such taxes were mixed up with defendants' own taxes and that such payment was made by oversight. Plaintiffs' reply is confined to a denial that such taxes were inadvertently paid by defendants.
The cause was tried by the court sitting without a jury. After the introduction of evidence and the arguments by counsel, the court on request made findings of fact in writing, which were, in substance, as follows: That the deed did not correctly describe the land intended and agreed to be sold; that the title to the land involved was in the plaintiffs and Clara A. Wolfinbarger; *449 that the deed deposited with R.A. O'Hara, in which the defendants were named as grantees, was not signed by Clara A. Wolfinbarger; that the erroneous description was caused by the inadvertence and excusable neglect of the parties, and the deed did not correctly indicate the true intent of the parties; that plaintiffs agreed to furnish defendants a good and marketable title to the land described in the deed; that, at the same time and place where the deed was delivered, defendants delivered to R.A. O'Hara a check for $1,000 as and for the purchase price of the land, and that the deed and check were to be delivered to the respective parties entitled thereto when the mortgage release was obtained and delivered; that thereupon defendants went into possession of the land involved, cut two crops of alfalfa therefrom in the year 1935, used the land for pasturing livestock, and paid taxes thereon; that plaintiffs used reasonable diligence in obtaining the release of the mortgage; that plaintiffs received the letter of defendants dated October 24, 1935, in due course, and received and delivered the release of mortgage to R.A. O'Hara, and advised defendants of such action, all within the 30 days mentioned in the letter of October 24; that, on the date of delivery of the release of mortgage to R.A. O'Hara, plaintiffs were the owners in fee of the land heretofore described, free and clear of all encumbrances and clouds of title, were willing and ready to convey the same to the defendants by a good and sufficient warranty deed, but defendants refused to do or perform the obligations by them to be performed in the premises; that the land excluded by reformation of the deed has no particular value and is not necessary to the use of the land agreed to be sold. The court thereupon directed judgment to be entered in favor of the plaintiffs, reforming the deed as prayed for, for the payment of $1,000 by defendants to plaintiffs, and allowing plaintiffs' costs. From such judgment defendants appeal.
Twenty-four assignments of error are specified. As we view the matter, the determinative questions to be solved are as to whether or not the contract is within the statute of frauds, *450 whether plaintiffs were entitled to reformation of the deed, and whether the deed conveys to defendants a marketable title.
Defendants contend that the amended complaint affirmatively shows that the contract was oral, and, such being the fact, the contract comes within the statute of frauds. We think defendants misinterpret the third paragraph of the complaint. It is there alleged "that on or about the 9th day of March, 1935, the plaintiff orally agreed to sell and the defendants orally agreed to buy the lands upon the following terms, to-wit. * * *" If this were all the parties did, certainly this action could not be maintained. But the part of the complaint just quoted is merely a preliminary recital preceding what is subsequently alleged to have been done to carry out the oral agreement; namely, the meeting at the office of O'Hara Madeen, the execution of the deed, the making of the check, and the deposit of the deed and check with O'Hara, pending the receipt of the release of mortgage from the Federal Land Bank, and thereafter the receipt and delivery of such release to O'Hara.
Depositing the deed and check with O'Hara constituted O'Hara[1] the escrow holder, irrespective of the expressed intention in the beginning to select a bank to hold the instruments. Section 6846, Revised Codes, provides: "A grant may be deposited by the grantor with a third person, to be delivered on performance of a condition, and, on delivery by the depositary, it will take effect. While in the possession of the third person, and subject to condition, it is called an escrow." This section was construed by this court in Glendenning v. Slayton,
As further explanation of the meaning of "escrow" it is said in 21 C.J., pages 866, 867: "The term `escrow' was originally applied to instruments for the conveyance of land, but it is now applied to all written instruments so deposited. * * * To constitute an instrument an escrow it must be deposited with the intention that it shall take effect upon the performance of an express condition or the happening of a certain event, and, as such condition or event is what differentiates an escrow from a completely executed instrument, * * * *451 the condition must be one in fact which will prevent the operation of the instrument until it is performed." The condition upon which the deed and check were left with O'Hara was the procurement of the release of the mortgage by the Federal Land Bank. It is further said in 10 Ruling Case Law, section 623, page 4: "No precise form of words is necessary to constitute an escrow. The term `escrow' need not be used, nor will the misuse of that term in designating an instrument necessarily make it an escrow."
It appears from the argument of counsel that defendants'[2] position is that a formal, written instrument must accompany a deed deposited in escrow, and that such formal written instrument must conform to all of the requirements of the statute of frauds essential to a deed conveying land, and that, because the deed and check deposited with O'Hara were not so accompanied, no contract was made that will stand the test of the statute of frauds. This view is erroneous for the reason that the deed and check constituted the escrow. An agreement to deposit an instrument in escrow may be made orally, according to the general rule. (10 R.C.L., p. 623, sec. 5; 21 C.J. 868, sec. 7.) The citations from the text-books are supported by numerous authorities.
"The condition upon which an instrument is delivered in escrow need not, however, be expressed in writing, but may rest in parol, or be partly in writing and in part oral. The rule that a contract or instrument made in writing inter partes must be deemed to contain the entire writing or understanding has no application in the case of escrows. It is only necessary that it should distinctly appear from all the facts and circumstances attending the execution and delivery, that the instrument was not to take effect until a certain condition should be performed, and where the language of a written escrow agreement is vague and indefinite, it is the duty of the court in construing it to inquire into the circumstances and conditions existing when it was made, in order to ascertain the intention and actual meaning of the parties." (10 R.C.L., pp. 623, 624.) *452
In volume 21 of Corpus Juris at pages 868 and 869, section 7, it is stated: "At common law an apt and proper form of words was required to evidence the deposit of an instrument as an escrow, but this is no longer required. It will generally depend rather on the words and purposes expressed than upon the name which the parties give to the instrument. Thus the term `escrow' need not be used; nor on the other hand will the use of the term necessarily make the instrument an escrow. When, however, the term is used, it indicates more clearly and distinctly than any other the actual intention of the parties. Although some of the authorities hold that the condition upon which the instrument is deposited in escrow must be expressed in writing, the weight of authority is to the effect that it need not be. The rule that an instrument of contract made in writing between the parties must be deemed to contain the entire agreement has no application. No particular form of words is necessary to constitute an escrow; the terms of the escrow stipulations may be derived from all the circumstances. However, it obviates all questions as to the intention of the parties if at the time of the deposit it is expressly declared that the instrument is to be delivered upon the performance of such conditions."
In our view, therefore, the contract here under consideration[3, 4] does not fall within the statute of frauds, for two reasons: First, awaiting the fulfillment of the condition, which was the receipt and delivery of the release of the mortgage, the defendants took possession of the land conveyed, harvested the crops, grazed their livestock on the grass, and paid half the taxes due for the current year. This would take the contract out of the statute of frauds on the ground of part performance. (Rentfro v. Dettwiler,
On the question of the court erroneously granting plaintiffs'[5, 6] motion to reform the deed, no absolute rule can be laid down but the right of reformation depends upon the particular facts and circumstances of each case. (George v. Fritsch L. T. Co.,
The evidence as to the mutual mistake of the parties in describing the lands is in sharp conflict; the trial court found the misdescription was due to mutual mistake, and, in accordance with the established rule, such finding will not be disturbed on appeal unless it be contrary to a clear preponderance of the evidence. We are unable to say that there is a clear preponderance of the evidence against such finding. The burden of showing the insufficiency of the evidence to support the finding is on the party claiming such insufficiency. (Gravelin v. *454 Porier,
Defendants contend that plaintiffs did not have a marketable[7, 8] title, and ground such contention on the fact that the court found that the record title at the time of the trial stood in the names of plaintiffs and Clara A. Wolfinbarger. The court by a separate finding found that plaintiffs had a fee simple title, free and clear of encumbrances. Findings must be read and construed in their entirety. (Chancellor v. Hines Motor SupplyCo.,
Defendants contend that record title should have been in plaintiffs before suit was commenced, and that, in any event, the trial court erred in allowing plaintiffs to record the deed before the decree was made and entered. The essentials of a title in a vendor suing for specific performance are defined in the case of Ogg v. Herman,
Defendants' contention that plaintiffs had an adequate remedy[11, 12] at law and should not be heard in a court of equity is without merit. Section 8717, Revised Codes, provides: "It is to be presumed that the breach of an agreement to transfer real property cannot be adequately relieved by pecuniary compensation." Defendants presented no evidence to overcome the presumption. (See, also, secs. 8715 and 8716.) The contention that there is a lack of mutuality of remedies and that for that reason specific performance should not be decreed is likewise without merit. The applicable rule is announced in Finlen v.Heinze,
Other contentions of the defendants we do not deem of sufficient merit to warrant consideration. Finding no material error in the record, the judgment is affirmed.
MR. CHIEF JUSTICE SANDS and ASSOCIATE JUSTICES STEWART, ANDERSON and ANGSTMAN concur.