SCHEITLIN v R D MINERALS
Annotate this Case
Download PDF
No. 84-433 IN THE SUPREME COURT OF THE STATE OF P4ONTANA MICHAEL J. SCHEITLIN, Personal Representative of the Estate of Edward E. Scheitlin, Deceased, Plaintiff and Respondent, R & D MINERALS, a Montana corporation, Defendant and Appellant. APPEAL FROM: District Court of the Fifth Judicial District, In and for the County of Madison, The Honorable Frank Davis, Judge presiding. COUNSEL OF RECORD: For Appellant: Lino A. Marsillo, Missoula, Montana For Respondent: Leaphart Law Firm, Helena, Montana Jardine, McCarthy & Grauman, Whitehall, Montana February 28, 1985 Submitted on Briefs: Decided: Filed: du!. 2 '985 Clerk -- July 2, 1985 J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion o f t h e Court. Mr. T h i s i s a n a p p e a l from a n O r d e r o f t h e D i s t r i c t C o u r t , Fifth Judicial District County. On November Scheitlin entered of the State Montana, Edward 15, 1978, a contract into of to E. and Madison Vaeda certain sell p r o p e r t i e s and c e r t a i n p e r s o n a l p r o p e r t y t o R G. mining Minerals. & D R & D was g i v e n immediate p o s s e s s i o n o f t h e p r o p e r t y and t h e right t o b e g i n mining. i n s t a l l m e n t payments, On August 16, I t was obligated t o make monthly t h e l a s t one due on December 3 1 , 2 0 0 0 . 1983, Michael Scheitlin, as r e p r e s e n t a t i v e o f t h e E s t a t e o f Edward and Vaeda filed a asked that contract. complaint R & in Madison Minerals D be County District declared personal Scheitlin, Court i n default which on the During t h e c o u r s e of t h e ensuing l i t i g a t i o n R & D Minerals f i l e d f o r bankruptcy. On A p r i l 1 3 , 1984, t h e U n i t e d S t a t e s B a n k r u p t c y C o u r t f o r t h e D i s t r i c t o f Montana remanded t h e c a s e t o t h e Montana S t a t e D i s t r i c t C o u r t , Madison C o u n t y , f o r t h e determination of t h e following matters concerning t h e above-mentioned contract between R & D Minerals Scheitlin estate: 1. The current status (terms and c o n d i t i o n s ) o f a n y a g r e e m e n t s between R & D M i n e r a l s and t h e S c h e i t l i n e s t a t e ; -. 3 The r i g h t s and l i a b i l i t i e s of t h e p a r t i e s under t h e c u r r e n t c o n t r a c t o r agreement ; 3. When obligated title; 4. the sellers are legally t o provide buyers with c l e a r The s t a t u s o f s e l l e r s ' t i t l e ; 5. The amounts, i f a n y , due t o s e l l e r s under t h e c u r r e n t c o n t r a c t ; 6. Any other issues stipulated to the and by R & D M i n t ~ r a l sand t h e S c h e i t l i n E s t a t e . and the A f t e r a n e v i d e n t i a r y h e a r i n g , and p u r s u a n t t o t h e o r d e r o f t h e B a n k r u p t c y C o u r t , t h e D i s t r i c t C o u r t on May 3 1 , 1984, issued an order containing t h e following findings: "1. The only contract in existence between the parties is the Mining P r o p e r t y S a l e Agreement o f November 1 5 , 1978, a s amended on F e b r u a r y 25, 1980, and May 8 , 1980; "2. R & D is i n default of the contract o b l i g a t i o n s by v i r t u e o f i t s f a i l i n g t o make t h e r e q u i r e d payments; "3. The amount owing S c h e i t l i n may b e c a l c u l a t e d from a n e x a m i n a t i o n o f t h e c o n t r a c t and by t h e r e c o r d s o f the d e s i g n a t e d escrow agent; "4. The r i g h t s and l i a b i l i t i e s o f t h e parties t o the contract a r e limited t o t h e s p e c i f i c t e r m s and c o n d i t i o n s o f t h a t c o n t r a c t and none o t h e r . "5. S c h e i t l i n ' s o b l i g a t i o n t o provide m a r k e t a b l e t i t l e i s now moot, b u t t h a t i f the contract were i n good standing, Scheitlin was obligated to provide m a r k e t a b l e t i t l e a t any t i m e p r i o r t o t h e R & D ' s making t h e f i n a l payment; title t o the its default; "6. The s t a t u s o f R & D ' s p r o p e r t i e s i s moot, g i v e n "7. There was no novation of the o r i g i n a l c o n t r a c t , t h e r e h a v i n g b e e n no e x e c u t e d a g r e e m e n t between t h e p a r t i e s . " R & D M i n e r a l s a p p e a l s from t h e s e f i n d i n g s o f t h e t r i a l court and purchaser title raises of mineral defects, fo11-owing i s s u e the claims, justified in upon for review: notification ceasing Is of installment the serious payments a f t e r t h e p a s s i n g o f a r e a s o n a b l e p e r i o d i n which t h e v e n d o r t o o k no m e a n i n g f u l a c t i o n t o c o r r e c t s a i d d e f e c t s ? The rule installment marketable Montana in sales title contract until tender of t h e deed. 584, 20 P.2d 592, 631, is does the date S i l f v a s t v. 636. that a not set f o r Asplund R & D seller have to under an produce f i n a l payment and ( 1 9 3 3 ) , 93 Mont. does n o t d i s p u t e t h a t is this the rule in Montana but argues that there are exceptions applicable t o t h i s case. First, contends R & D that the contract "expressly c o n t e m p l a t e s t h a t t h e v e n d o r was t o p r o d u c e m a r k e t a b l e t i t l e w e l l i n advance o f t h e c l o s i n g d a t e . " the following under the heading, The c o n t r a c t p r o v i d e s of Marketability Title t o Real P r o ~ e r t v : " P r i o r t o O c t o b e r 1 5 , 1979, t h e s e l l e r s will cause t o be furnished to the purchaser a b s t r a c t s o f t i t l e f o r such mineral claims a s a r e t h e property of t h e s e l l e r s , and w i l l p e r m i t t h e p u r c h a s e r r e a s o n a b l e t i m e , n o t t o exceed s i x t y (60) d a y s , t o have s u c h a b s t r a c t s examined by a n a t t o r n e y o f i t s own c h o i c e . Should such examination d i s c l o s e t h e t i t l e t o such p r o p e r t i e s t o be unmarketable, then t h e s e l l e r s s h a l l t a k e s u c h s t e p s a s may be necessary to render the same marketable, including a quiet title a c t i o n , a l l a t s e l l e r s ' own e x p e n s e . " The c o n t r a c t f u r t h e r p r o v i d e s f o r t h e s e t t i n g u p o f a n e s c r o w account, r e q u i r i n g t h e escrow t o " d e l i v e r such instruments, documents and p a p e r s t o t h e p u r c h a s e r a t t h e t i m e o f payment h e r e u n d e r . " is inconsistent marketable final title payment. notification W e find t h a t neither of these provisions with be The of final the rule produced in no Silfvast earlier contract provides discrepancies in requiring than that title, the time sellers, " that of upon . . . will immediately t a k e any n e c e s s a r y s t e p s t o b r i n g such i t e m s i n t o conformity with t h e i r warranty." However, t h e c o n t r a c t d o e s not can contemplate that purchasers withhold payments o r d e r t o coerce t h e sellers i n t o c o r r e c t i n g t i t l e . s p e c i f i c remedy i s p r o v i d e d : "Upon d i s c o v e r y o f a b r e a c h o f s e l l e r s ' w a r r a n t i e s concerning ownership o r l i e n o b l i g a t i o n s , o r sellers ' f a i l - u r e t o keep c u r r e n t any u n d e r l y i n g obl i g a t i o n s n o t assumed by p u r c h a s e r and a f f e c t i n g t h e r e a l o r p e r s o n a l p r o p e r t y , p u r c h a s e r may, in Rather, a a t i t s o p t i o n , c o r r e c t any d e f i c i e n c y by p a y i n g a n y o u t s t a n d i n g amount d u e , l i e n o r encumbrance, o r by i n i t i a t i n g l e g a l proceedings t o c l e a r any d e f e c t s i n title. S e l l e r s agree t o cooperate f u l l y w i t h p u r c h a s e r i n c o r r e c t i n g any s u c h d e f i c i e n c y and a g r e e t h a t any legal p r o c e e d i n g may b e b r o u g h t i n t h e i r names. The c o s t s , i n c l u d i n g a t t o r n e y s ' f e e s and c o u r t c o s t s , i n c u r r e d by p u r c h a s e r i n a p p l y i n g a n y amounts d u e , o b t a i n i n g t h e release of any liens or otherwise c o r r e c t i n g any d e f e c t s o f t i t l e s h a l l b e d e d u c t e d from t h e p u r c h a s e p r i c e c a l l e d f o r h e r e u n d e r and may b e o f f s e t a g a i n s t a n y payments d u e s e l l e r s . " Even a s s u m i n g t h a t t h e r e w e r e d e f e c t s i n t i t l e , R & D d i d n o t invoke the remedy terminating provided payments R & D by was contract. in Consequently, breach of contract by and p r o p e r l y h e l d i n d e f a u l t by t h e D i s t r i c t C o u r t . Second, R & D a r g u e s t h a t even i f t h e c o n t r a c t d o e s n o t contemplate t h a t marketable t i t l e be provided p r i o r t o t h e closing date, t h e p u r c h a s e r may demand m a r k e t a b l e t i t l e i f there a r e defects i n t h e seller's t i t l e t h a t a r e incurable. In o t h e r words, if i t acquire marketable justified i s apparent title by closing i n h a l t i n g payments that then the seller the cannot purchaser on t h e c o n t r a c t . is By making t h i s argument R & D assumes t h a t t h e r e w e r e d e f e c t s i n t h e S c h e i t l i n ' s t i t l e t h a t could n o t be cured. However, t h e r e i s n o t h i n g i n e i t h e r t h e r e c o r d on a p p e a l o r t h e D i s t r i c t C o u r t t r a n s c r i p t which s u p p o r t s t h i s a s s u m p t i o n . Furthermore, t h e c o n t r a c t p r o v i d e s f o r t h e p o s s i b i l i t y o f an i n c u r a b l e d e f e c t a s follows: " I f any defects of title c a n n o t be c o r r e c t e d t o conform t o t h e s e l l e r s ' warranties, the parties agree to r e n e g o t i a t e t h e purchase p r i c e t o r e f l e c t t h e d i f f e r e n c e i n v a l u e between what was b a r g a i n e d f o r by t h e p u r c h a s e r and what sellers a c t u a l l y d e l i v e r e d . Failing agreement i n t h i s r e g a r d t h e p a r t i e s agree to submit that issue for d e t e r m i n a t i o n by t h e D i s t r i c t C o u r t o f t h e Fourth J u d i c i a l D i s t r i c t of t h e S t a t e o f Montana i n and f o r t h e County o f Missoula.'' R & D ' s argument t h a t i n c u r a b l e d e f e c t s i n t h e s e l l e r ' s t i t l e justifies withholding payments on the contract must fail s i n c e , even i f t h e r e w e r e evidence o f i n c u r a b l e d e f e c t , t h e r e h a s been no r e s o r t t o t h e remedy p r o v i d e d by c o n t r a c t . R & D further argues t h a t t h e Scheitlins a r e g u i l t y of fraud and misrepresentation for selling property with i n c u r a b l e d e f e c t s i n t h e t i t l e and t h a t R & D was w i t h i n i t s r i g h t s i n w i t h h o l d i n g payments. W e note: 1. The r e c o r d d o e s support t h a t there a r e incurable defects i n t i t l e . not Rule 8 ( c ) , M.R.Civ.P. states that i s an a f f i r m a t i v e fraud d e f e n s e t h a t must b e p l e a d e d i n t h e answer. contains no pleadings misrepresentation. hearing before allegations of 3. The the concerning transcript State R & D's fraud of District 2. the fraud o r misrepresentation. and/or May Court 4. answer 30, 1984 contains no This i s t h e f i r s t time t h a t R & D Minerals has r a i s e d t h e i s s u e o f fraud A s we h a v e n o t e d and m i s r e p r e s e n t a t i o n i n t h i s l i t i g a t i o n . t h i s C o u r t w i l l n o t c o n s i d e r on a p p e a l often t i m e s before, See, e.g., i s s u e s t h a t have n o t b e e n r a i s e d below. of Lake v. Lindberg St.Rep. of respondent appellant's M.R.App.Civ.P. must b e (Mont. 19841, 690 P.2d 440, 41 2092. Finally, because Lease Rustics asks us failure t o to dismiss this appeal comply w i t h Rule 10(c), Rule 1 0 ( c ) p r o v i d e s t h a t t h e r e c o r d on a p p e a l submitted t o t h i s Court within n o t i c e of appeal. ninety days of the N i n e t y d a y s from t h e f i l i n g o f t h e n o t i c e o f t h i s a p p e a l e x p i r e d on September 2 6 , 1 9 8 4 , and t h e r e c o r d was n o t forwarded t o t h i s Court u n t i l October 3 , H a n n i f i n v . R e t a i l C l e r k s ( 1 9 7 3 ) , 162 Mont. 1984. In 1 7 0 , 172-173, 511 P.2d 982, 984, we noted that Rule 10 (c) gives this Court wide discretion in permitting the filing of a record, and we quoted from that rule as follows: "If the District Court is without authority to grant the relief sought or has denied a request therefore, the Supreme Court may on motion extend the time for transmitting the record or may permit the record to be transmitted and filed after the expiration of the time allowed or fixed." In this case both the appellant, who requested an extension for transmitting the record to more than ninety days from the filing of the appeal, and the District Court, which granted the request, though it had no authority to do so, indicated a relaxed attitude about the Appellate Rules which we do not encourage. However, the violation in this case was not egregious and there is no evidence that it was anything but inadvertent. Under these circumstances we refuse to dismiss. The judgment of the District Court is affirmed. We concur: --/
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
