CHADWICK v GIBERSON

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No. 80-7 I N THE SUPREME COURT O F THE STATE OF M N A A OTN 1980 ELIZABETH FULLER CHADWICK, P l a i n t i f f and Respondent, -V8- CHARLES HOWARD GIBERSON AND LURA B. GIBERSON, husband a n d w i f e , Defenc1ant.s and A p p e l l a n t s . Appeal from: D i s t r i c t C o u r t o f The E l e v e n t h J ' u d i c i a l D i s t r i c t , I n and for: t h e County o f F l a t h e a d , The Hortorable Robert C . S y k e s , J u d g e p r e s i d i n c j . C o u n s e l o f Record: For Appellant: Murphl , R c b i n s o r ~ , H e c k ~ . t h o r n6( P h j . l l j p s , K a l i s p e l l , Montana Karden, C h r i s t i a n s e n & Johnson, K a l i s y : e l l , Montana F o r Respondent: R o b e r t S k e l t o n , F i s s o u l a , Montana Submitted on B r i e f s : A u g ~ i s t1 3 , 1 9 8 0 Decided : C ~ x c + L c & f, / q@ Filed: OCT 8 - 7980 91 Clerk Mr. J u s t i c e Gene B. Daly d e l i v e r e d t h e Opinion of t h e C o u r t . T h i s a p p e a l a r i s e s from a judgment e n t e r e d by t h e Honorable R o b e r t C. Sykes, F l a t h e a d County D i s t r i c t C o u r t , g r a n t i n g p l a i n t i f f s p e c i f i c performance and o r d e r i n g d e f e n d a n t s t o convey by c o n t r a c t f o r deed a p a r c e l of l a n d l o c a t e d i n F l a t h e a d County. Defendants C h a r l e s and Lura B e l l e G i b e r s o n l i s t e d f o r s a l e w i t h Douglas J o h n s Real E s t a t e of K a l i s p e l l , Montana, f o u r f o r t y - a c r e t r a c t s i n F l a t h e a d County ( P a r c e l s A , B , C , and D ) . I n August 1976, p l a i n t i f f E l i z a b e t h Chadwick viewed t h e p r o p e r t y i n t h e p r e s e n c e of F. E. McHenry, a n a g e n t o f Douglas J o h n s Real E s t a t e . I n viewing t h e p r o p e r t y , t h e two p a r t i e s discussed access t o the various parcels. I n par- t i c u l a r , McHenry t e s t i f i e d t h a t he informed Chadwick t h a t t h e r e would be a need t o p r o v i d e a c c e s s t o P a r c e l B. A t the t i m e of t h e showing, however, a s u r v e y showing t h e e x a c t l o c a t i o n and dimensions of any proposed a c c e s s w a s n o t available. A s a r e s u l t of t h e August v i e w i n g , Chadwick s u b m i t t e d an o f f e r t o p u r c h a s e a l l f o u r t r a c t s . The G i b e r s o n s c o u n t e r o f f e r e d , b u t p l a i n t i f f was u n a b l e t o a c c e p t , and t h e e a r n e s t money p a i d was r e t u r n e d . On September 2 5 , 1976, Chadwick made an o f f e r t o p u r c h a s e o n l y P a r c e l A. An e a r n e s t money r e c e i p t and agreement t o s e l l and p u r c h a s e was p r e p a r e d by McHenry on t h a t d a t e , which was s i g n e d by p l a i n t i f f and t h e n s e n t t o t h e G i b e r s o n s f o r t h e i r signatures. E a r n e s t money i n t h e amount of $1,000 was p a i d by Chadwick. Defendants s i g n e d t h e agreement and r e t u r n e d i t t o d e f e n d a n t s ' o t h e r r e a l e s t a t e a g e n t , Douglas J o h n s , who on October 1, 1976, added t h e s p e c i a l p r o v i s i o n s : " S e l l e r w i l l p r o v i d e l e g a l a c c e s s from t h e s o u t h t o t h i s property. " On October 1 8 , 1976, M r . J o h n s m a i l e d t o Chadwick h e r copy of t h e e a r n e s t money r e c e i p t and e n c l o s e d a copy of t h e p r e l i m i n a r y t i t l e r e p o r t i s s u e d on October 5 , 1976. The r e p o r t d i s c l o s e d t h a t t h e o n l y easement of r e c o r d a t t h e t i m e t h e p a r t i e s s i g n e d t h e September 25 agreement w a s o n e r e c o r d e d on J u l y 26, 1967, which r e s e r v e d f o r d e f e n d a n t s ' p r e d e c e s s o r , Vernon and Marva Schmid, a r i g h t of way f o r i n g r e s s and e g r e s s a c r o s s P a r c e l A ( t h e Schmid e a s e m e n t ) . Subsequent t o r e c e i v i n g t h e t i t l e i n s u r a n c e r e p o r t , however, Chadwick w a s forwarded a copy of t h e c e r t i f i c a t e of s u r v e y f o r P a r c e l A. The c e r t i f i c a t e showed a s i x t y - f o o t roadway easement a l o n g a n e x i s t i n g l o g g i n g r o a d and r u n n i n g north-south j u s t w e s t of t h e e a s t e r n boundary of P a r c e l A. I t narrowed t o t h i r t y f e e t n e a r i t s n o r t h e r n t e r m i n a l and p r o v i d e d a c c e s s t o P a r c e l B. A thirty-foot roadway easement w a s a l s o shown a c r o s s t h e s o u t h e a s t c o r n e r of P a r c e l A i n t o P a r c e l B. Chadwick o b j e c t e d t o t h e easements shown on t h e s u r vey--particularly t o t h e l e n g t h and l o c a t i o n of t h e n o r t h - s o u t h easement t o P a r c e l B. A s a r e s u l t of t h i s o b j e c t i o n , a r e v i s e d c e r t i f i c a t e of s u r v e y w a s p r e p a r e d e l i m i n a t i n g t h e l o n g n o r t h - s o u t h easement b u t i n c r e a s i n g t h e w i d t h of t h e s h o r t easement a c r o s s t h e s o u t h e a s t c o r n e r of P a r c e l A from thirty to sixty feet. On December 1 5 , 1976, Chadwick r e c e i v e d a proposed cont r a c t f o r deed f o r t h e p u r c h a s e and s a l e of P a r c e l A. The c o n t r a c t n o t o n l y r e s e r v e d t h e Schmid easement, b u t a l s o c o n t a i n e d a r e s e r v a t i o n u n t o d e f e n d a n t s , t h e i r h e i r s and a s s i g n s , of t h e s i x t y - f o o t roadway and u t i l i t y easement a c r o s s t h e s o u t h e a s t c o r n e r of t h e p a r c e l . hadw wick would n o t s i g n t h e c o n t r a c t o r t e n d e r t h e b a l a n c e of t h e down- payment i n t h a t s h e c o n t i n u e d t o o b j e c t t o t h e s i x t y - f o o t easement which was n o t p r o v i d e d f o r i n t h e September 25, 1976, e a r n e s t money r e c e i p t and agreement t o s e l l and p u r c h a s e . Chadwick b r o u g h t s u i t on F e b r u a r y 1 4 , 1977, f o r s p e c i f i c performance of t h e September 25 agreement t o s e l l and purchase, a l l e g i n g t h a t a t t h e t i m e t h e p a r t i e s entered i n t o t h e agreement, t h e o n l y easement of r e c o r d was t h e Schrnid easement. She a l s o f i l e d on t h i s d a t e a l i s pendens i n r e g a r d t o P a r c e l A, thereby giving n o t i c e of her claim t o said parcel. Defendants answered and c o u n t e r c l a i m e d , a l l e g i n g t h a t p l a i n t i f f was f u l l y a d v i s e d of t h e s i x t y - f o o t easement and t h a t i t would be r e s e r v e d t o p r o v i d e a c c e s s t o a n a d j o i n i n g p a r c e l of l a n d . On F e b r u a r y 1 5 , 1977, d e f e n d a n t s f i l e d w i t h t h e F l a t head County c l e r k and r e c o r d e r a n o t i c e of p u r c h a s e r s ' i n t e r e s t wherein n o t i c e was g i v e n t h a t d e f e n d a n t s g r a n t e d t o V e s t e r and T h e i l a Banta P a r c e l B , a s w e l l a s a n i n t e r e s t i n t h e s i x t y - f o o t roadway and u t i l i t y easement t h r o u g h P a r c e l A. The c o n t r a c t f o r deed between d e f e n d a n t s and t h e B a n t a s was d a t e d J a n u a r y 1 4 , 1977. Defendants forwarded t o p l a i n t i f f on March 2 , 1977, a n o t i c e demanding t h a t p l a i n t i f f e x e c u t e t h e c o n t r a c t of s a l e o r f o r f e i t t h e e a r n e s t money p r e v i o u s l y p a i d . Plaintiff r e f u s e d t o p e r f o r m o r o f f e r t o perform a s demanded i n t h e notice. T r i a l on p l a i n t i f f ' s c l a i m was h e l d on August 7 , 1979, a f t e r which t h e D i s t r i c t C o u r t found f o r p l a i n t i f f and g r a n t e d s p e c i f i c performance. Defendants have a p p e a l e d * The f i r s t i s s u e r a i s e d on a p p e a l i s whether t h e is- t r i c t C o u r t e r r e d i n c o n c l u d i n g t h e r e was a n e n f o r c e a b l e agreement between t h e p a r t i e s . From t h e f i l i n g o f p l a i n t i f f ' s c o m p l a i n t and d e f e n d a n t s ' answer and c o u n t e r c l a i m t o e v e n t u a l t r i a l , b o t h p a r t i e s have contended t h a t t h e September 25, 1976 agreement t o s e l l and p u r c h a s e was v a l i d and e n f o r c e a b l e a s a g a i n s t the other. The i s s u e i n t h e p r o c e e d i n g was n o t t h e v a l i d i t y of t h e c o n t r a c t , b u t whether i t embraced c e r t a i n a l l e g e d easements. D e f e n d a n t s now a r g u e on a p p e a l t h a t a l t h o u g h t h e p a r t i e s e x e c u t e d t h e same agreement, t h e y n e v e r a g r e e d on t h e same t e r m s c o n c e r n i n g t h e r e s e r v a t i o n of a n a c c e s s r o a d a c r o s s P a r c e l A; t h u s , no c o n t r a c t w a s c r e a t e d . I t i s a well-established r u l e t h a t t h e r e must be mutual a s s e n t o r a meeting of t h e minds on a l l e s s e n t i a l e l e m e n t s o r terms t o form a b i n d i n g c o n t r a c t . ( 1 9 5 4 ) , 127 Mont. 818 a t 354. See Johnson v . Smith 594, 289 P.2d 384; 1 7 Arn.Jur.2d Contracts, However, i t i s a l s o a w e l l - s e t t l e d r u l e of law t h a t alleged error a s t o issues not raised i n the trial c o u r t w i l l n o t be c o n s i d e r e d on a p p e a l . S t a t e v . Armstrong ( 1 9 7 7 ) , 172 Mont. 296, 562 P.2d 1129; Spencer v . Robertson ( 1 9 6 8 ) , 1 5 1 Mont. 507, 445 P.2d 48; C l a r k v . W o r r a l l ( 1 9 6 5 ) , 146 Mont. 374, 406 P.2d 822. Here, d e f e n d a n t s have f a i l e d t o a l l e g e a t t h e ~ i s t r i c t C o u r t l e v e l , a s e v i d e n c e d by t h e p l e a d i n g s and p r e t r i a l o r d e r , t h a t t h e r e w a s any l a c k of mutual c o n s e n t , and t h u s , no e n f o r c e a b l e c o n t r a c t . With t h i s b e i n g t h e c a s e , d e f e n - d a n t s ' argument a s t o l a c k o f mutual c o n s e n t w i l l n o t b e c o n s i d e r e d on t h i s a p p e a l . The f i n a l i s s u e r a i s e d on a p p e a l i s whether t h e is- t r i c t C o u r t e r r e d i n g r a n t i n g s p e c i f i c performance of t h e September 25, 1976 agreement t o s e l l and p u r c h a s e . Defendants c o n t e n d t h a t t h e agreement i s n o t s p e c i f i c enough i n i t s t e r m s t o w a r r a n t s p e c i f i c performance a s prayed. I n s u p p o r t of t h e i r p o s i t i o n , d e f e n d a n t s a r g u e t h a t t h e easement a c r o s s P a r c e l A , f o r u s e a s a c c e s s t o P a r c e l B, was a n e s s e n t i a l e l e m e n t of t h e agreement, and s i n c e t h e agreement a s t o easements was n o t complete o r s p e c i f i c , t h e c o n t r a c t i s n o t s p e c i f i c a l l y enforceable. I n r e j e c t i n g d e f e n d a n t s ' argument, w e need o n l y n o t e t h a t i t was d e f e n d a n t s ' r e a l e s t a t e a g e n t who p r e p a r e d t h e agreement. Had d e f e n d a n t s wished t o i n c l u d e t h i s a l l e g e d " e s s e n t i a l " e l e m e n t d e a l i n g w i t h a r e s e r v a t i o n of t h e proposed a c c e s s a c r o s s P a r c e l A , t h e y c o u l d v e r y e a s i l y have done s o . Defendants s h o u l d n o t now be a b l e t o r e l y upon t h e i r f a i l u r e i n t h i s r e g a r d i n c o n c l u d i n g t h e agreement i s n o t s p e c i f i c a l l y enforceable. Defendants a l s o c o n t e n d t h a t s i n c e p l a i n t i f f d i d n o t perform p u r s u a n t t o t h e s e l l and p u r c h a s e agreement, i n t h a t s h e f a i l e d t o t e n d e r t h e b a l a n c e of t h e downpayment owing, p l a i n t i f f i s n o t e n t i t l e d t o t h e r e l i e f of s p e c i f i c p e r formance. I n s u p p o r t of t h i s c o n t e n t i o n , d e f e n d a n t s c i t e S e i f e r t v. S e i f e r t ( 1 9 7 7 ) , 173 Mont. 501, 568 P.2d 155, and McDonald v . S t e w a r t ( 1 9 5 3 ) , 127 Mont. 188, 259 P.2d 799, f o r t h e g e n e r a l p r o p o s i t i o n t h a t u n l e s s performance i s waived o r e x c u s e d , a p l a i n t i f f s e e k i n g t o e n f o r c e a c o n t r a c t must p e r form h i s o b l i g a t i o n t h e r e u n d e r , and any w i l l f u l v i o l a t i o n of a n e s s e n t i a l c o v e n a n t of t h e c o n t r a c t i s a d e f e n s e t o speci f i c performance of t h e c o n t r a c t . S p e c i f i c Performance, S109 a t 958. See a l s o 8 1 C.J.S. Defendants t h e n c o n c l u d e t h e p u r c h a s e p r i c e and i t s payment are e s s e n t i a l c o v e n a n t s t o a c o n t r a c t , and s i n c e p l a i n t i f f f a i l e d t o t e n d e r p e r - formance of t h i s c o v e n a n t , h e r a c t i o n f o r s p e c i f i c p e r formance c a n n o t be e n f o r c e d . W a g r e e w i t h d e f e n d a n t s ' g e n e r a l s t a t e m e n t of t h e l a w e a s s e t f o r t h i n t h e above c a s e s ; however, we c o n c l u d e t h a t p l a i n t i f f ' s f a i l u r e t o t e n d e r performance s h o u l d be excused i n t h i s instance. P r i o r t o t h e s u i t b e i n g b r o u g h t by p l a i n t i f f , d e f e n d a n t s conveyed t o a t h i r d p a r t y a n i n t e r e s t i n t h e s i x t y f o o t roadway and u t i l i t y easement a t i s s u e , t h e r e b y i n d i c a t i n g t o p l a i n t i f f t h e i r r e f u s a l , and i n a b i l i t y , t o s e l l t o h e r P a r c e l A a b s e n t s a i d easement. Under t h e s e c i r c u m s t a n c e s , when by r e a s o n of encumbrances p l a c e d on t h e t i t l e , d e f e n d a n t s a r e u n a b l e t o convey such t i t l e a s t h e p l a i n t i f f c o n t r a c t e d f o r , t o r e q u i r e a t e n d e r of t h e p u r c h a s e p r i c e would be u s e l e s s and i d l e ceremony, and i t i s t h e r e f o r e excused. See Ceizyk v. Goar S e r v i c e and Supply, I n c . ( 1 9 7 3 ) , 2 1 Ariz.App. 119, 516 P.2d 61; Leche v. S t o u t (Okla. 1 9 7 2 ) , 514 P.2d 1399; Greenstone v. C l a r e t i a n T h e o l o g i c a l Seminary, C l a r e t v i l l e ( 1 9 5 9 ) , 173 C.A.2d 8 1 C.J.S. 21, 343 P.2d 161; S p e c i f i c Performance, 8112 a t 965. P l a i n t i f f , by way of h e r p l e a d i n g s , stood ready, w i l l i n g and a b l e t o pay t h e p u r c h a s e p r i c e under t h e s p e c i f i c t e r m s of t h e p a r t i e s ' agreement t o p u r c h a s e and s e l l . Under t h e f a c t s of t h i s c a s e , h e r f a i l u r e t o t e n d e r t h e p u r c h a s e p r i c e w i l l n o t p r e c l u d e h e r t h e e q u i t a b l e r e l i e f of s p e c i f i c performance. Nor do we f i n d m e r i t w i t h d e f e n d a n t s ' c o n t e n t i o n t h a t s p e c i f i c performance i n t h i s i n s t a n c e r e s u l t s i n a n uncons c i o n a b l e advantage t o p l a i n t i f f . P l a i n t i f f i s merely r e c e i v i n g , under t h e t e r m s of t h e p a r t i e s ' i n i t i a l agreement t o p u r c h a s e and s e l l , t h a t p o r t i o n of t h e p r o p e r t y d e f e n d a n t s a r e now a b l e t o convey. The f a c t t h a t d e f e n d a n t s a r e o n l y a b l e t o convey t h e v e r y same t i t l e , i n c l u d i n g t h e encumb r a n c e o f t h e s i x t y - f o o t roadway easement which p l a i n t i f f r e f u s e d i n t h e f i r s t i n s t a n c e , h a s no e f f e c t upon t h e o u t come of t h i s m a t t e r . The judgment of t h e D i s t r i c t C o u r t i s a f f i r m e d . LL kfW+ Justice W e concur: %-w,&&4 Chief J u s t i c e Justices

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