WHITNEY v BAILS
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No. 13355 I N THE SUPREME COURT O F THE STATE OF MONTANA RUSSELL C . WHITNGY, JR., d/b/a Double 4 Cattle Company, and Julia S. Whitney, his wife, Plaintiffs and Appellants, RICHARD J. BAILS and PATRICIA J. BAILS, husband and wife, Defendants and Respondents. Appeal from: District Court of the Eighteenth Judicial District Honorable W. W. Lessley, Judge presidina Counsel of Record: For Appellants: Corette, Smith and Dean, Butte, Montana Dolphy Pohlman argued, Butte, Montana For Respondents : Berg, Angel, Andriolo & Morffan, Bozeman, Montana Ben E. Berg argued, Bozeman, Montana Hibbs, Sweeney and Colberg, Billings, Montana Submitted: Decided : Filed: !I>,~; , .r -.,/ [ January 10, 1977 fIRR 7 '1971 M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e Court. I n an a c t i o n f o r d e c l a r a t o r y judgment t h e d i s t r i c t c o u r t , G a l l a t i n County,found p l a i n t i f f Whitney e n t i t l e d t o c a n c e l l a t i o n of two c o n t r a c t s f o r deed. The a c t i o n involved t h e s u c c e s s i v e s a l e of a ranch by c o n t r a c t f o r deed, w i t h each succeeding c o n t r a c t assuming t h e p r i o r P e t e T o c c i & Son I n c . was t h e o r i g i n a l owner f o r contracts. t h e purposes of t h e s e c o n t r a c t s . t o McGregor f o r $500,000. I n 1969, T o c c i s o l d t h e r a n c h I n March 1971 McGregor s o l d t o Blome f o r $650,000. lm I n August 1972 Bt e s o l d t o Whitney, p l a i n t i f f h e r e , f o r $425,000. I n September 1973 Whitney s o l d t o Gar f o r $740,000. Gar s o l d t o B a i l s , defendant h e r e , f o r $750,000 i n J u l y 1974. I n December 1974 B a i l s missed a payment, t h e b a s i s f o r I n A p r i l a f t e r t h e c o n t r a c t u r a l n o t i c e s were s e r v e d , t h i s default. a c t i o n was f i l e d a g a i n s t a l l p a r t i e s t o a l l t h e c o n t r a c t s t o determine t h e r i g h t s of t h e p a r t i e s . By s t i p u l a t i o n a l l c o n t r a c t s up t o and i n c l u d i n g Blome t o Whitney were found ,, t o be i n f u l l f o r c e . By t h e same p r o c e s s , Gar was dismissed from t h e a c t i o n w i t h p r e j u d i c e . A t r i a l without j u r y t o determine t h e r i g h t s a s between p l a i n t i f f and B a i l s , t h e l a s t remaining d e f e n d a n t , was had b e f o r e Hon. W.W. Lessley. d e c i s i o n i s appealed by p l a i n t i f f . The a p p e a l r a i s e s two q u e s t i o n s : 1) Who owns t h e c r o p s h a r v e s t e d by B a i l s d u r i n g t h i s litigation? 2) What i s t h e measure of damages? His The crops involved are the grain crop, straw crop, and the irrigated seed hay crop. Kester v. Amon,.81 Mont. 1, 9, 261 P. 288, states the rule in Montana: "* * * when an occupant of lands plants, cultivates and harvests crops during the term of his occupation, they are his personal property, whether he occupied the land as a purchaser, a tenant, or a mere trespasser holding the land adversely to the real owner, and whether he came into possession of the land lawfully or not, provided he remain in possession until after the crops are harvested." There could be no fact situation more extreme than that in Kester where the grain was cut after the sheriff, pursuant to \ a writ of assistance, had taken possession of the land. Hamilton v. Rock, 121 Mont. 245, 191 P.2d 663, states the rule in Kester but found it inapplicable to native grasses and trees which do not owe their existence to the trespasser. Here, the crops were planted, work was done by Bails or persons paid by him, and harvested long before the court ordered the change in possession. The crops therefore belong, as the court ordered, to defendant Bails. The second issue concerns the measure of damages. Section 17-301, R.C.M. 1947, states: "Measure of damages for breach of contract. For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which in the ordinary course of things, would be likely to result therefrom." (Emphasis supplied.) Section 17-307, R.C.M. 1947, sets out the specific measure of damages for breach of an agreement to buy real property: "Breach of agreement to buy real property. The detriment caused by the breach of an agreement to purchase an estate in real property is deemed to be the excess, if any, of the amount which would have been due to the seller, under the contract, over the value of the property to him." This express provision was discussed by this Court in Wyatt v. School District No. 104, 148 Mont. 83, 88, 89, 417 P.2d 221. The interpretation of California Civil Code $3307, identical to section 17-307, R.C.M. 1947, was used by analogy to interpret another provision of Chapter 3, Title 17, R.C.M. 1947, on the question of whether the provisions of that section were the exclusive measure of damages. In Wyatt the Court found the sections of title 17 were not exclusive basing its decision in part on Royer v. Carter, 37 Cal.2d 544, 233 P.2d 539, where the California Court said: 'I' * * * vendee's breach may make it necessary for the vendor to incur additional expenses to realize the benefit of his bargain. * * * When such additional expenses are the natural consequence of the breach, they may be recovered in addition to those provided for in section 3307.' (Emphasis supplied.)" This Court then set out the reason for this ruling: "* * * the statutes are to be regarded as guides in the estimation of damages to be recovered, and that the respondent should receive a sum which, when added to the benefits already received under the contract, will give her an economic status identical to that which she would have enjoyed had the contract been performed .I1 In Wiseman v. Holt, 163 Mont. 387, 517 P.2d 711, a similar question was raised. In Wiseman the Court again referring to Royer, the California case, found an instruction offered by the defendant was incorrect because it set the maximum damages recoverable to those provided in section 17-307, R.C.M. 1947. The Court explained that the philosophy of contract damages was to allow those damages which would return the damaged party to an economic s t a t u s i d e n t i c a l t o t h a t which would have been enjoyed had t h e c o n t r a c t been performed and t h i s policy would be v i o l a t e d i f c e r t a i n a d d i t i o n a l damages were n o t allowed. W d i s a g r e e and o v e r r u l e e our holding i n Wiseman a s t o a d d i t i o n a l damages. Here, even a f t e r deducting t h e f u l l amount of t h e a l l e g e d damages from t h e market p r i c e a t t h e time of t h e breach, t h e seller i s s u b s t a n t i a l l y b e t t e r o f f than he would have been had t h e cont r a t~ been performed. findings t o t h i s e f f e c t . The d i s t r i c t c o u r t made d e t a i l e d and s p e c i f i c This r e s u l t i s c l e a r l y contemplated by s e c t i o n 17-307: "The detriment caused by t h e breach of an agreement t o purchase an e s t a t e i n r e a l property i s deemed t o be t h e excess, i f any, of t h e amount which would have been due t o t h e s e l l e r , under t h e c o n t r a c t , over t h e value of t h e property t o him," (Emphasis supplied.) This measure of damages may seem harsh because it does n o t allow recovery f o r harm done t o t h e land, b u t t h e e f f e c t i s t h a t t h e s e l l e r of t h e land g e t s a l l he bargained f o r a t t h e t i m e he irret r i e v a b l y p a r t e d with . t h e land. P l a i n t i f f argues damages a r e due because t h e waste provision of t h e c o n t r a c t was v i o l a t e d . P l a W f f has a r i g h t t o tfie r e t u r n of t h e r e a l property only i f t h e c o n t r a c t i s breached. The measure of damages f o r t h e breach of a c o n t r a c t f o r t h e s a l e of r e a l property i s t h a t s e t out i n s e c t i o n 17-307, R.C.M. 1947, The damage done may be used, a s i t was h e r e , t o reduce t h e market value of t h e land b u t i t may n o t be used, a s urged h e r e , t o allow damages where none would be due under t h e s t a t u t o r y measure. The judgment of t h e d i s t r i c t c o u r t i s affirmed. Justice. W concur: e K" -L'- ,.e T i ..-" / , " Chief J u s t i c e Yustices. 7 .\ U
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