No. 14965 IN THE SUPREME COURT OF THE STATE OF MONTANA 1980

JOSEPH FRASER, Plaintiff and Appellant, VS . DONALD D. EDMISTEN, Defendant and Respondent.

Appeal from: District Court of the Fifth Judicial District, Honorable Frank E. Blair, Judge presiding. Counsel of Record: For Appellant: Chester L. Jones, Virginia City, Montana For Respondent : Burgess, Joyce, Prothero & Whelan, Butte, Montana

Submitted on briefs: April 25, 1980 Decided : SEP 8 - 798p Mr. J u s t i c e D a n i e l J . Shea delivered the Opinion of the Court.

p l a i n t i f f , J o s e p h H. F r a s e r , a p p e a l s from a judgment i n Madison County District Court denying his claim for r e s t i t u t i o n of payments made u n d e r a n o r a l c o n t r a c t f o r t h e

p u r c h a s e of defendant's tavern. The d e f e n d a n t , Donald D. Edmisten, counterclaimed in the alternative for specific

p e r f o r m a n c e o r f o r f e i t u r e t o him o f t h e downpayments made by

Fraser. The trial court granted only forfeiture of the downpayments. Although p l a i n t i f f Fraser r a i s e s four i s s u e s , t h r e e of

them are moot because they are directed at Edmisten's c o u n t e r c l a i m f o r s p e c i f i c p e r f o r m a n c e which t h e t r i a l c o u r t did not grant. Nor h a s Edmisten appealed from t h e t r i a l

court's order refusing to grant his counterclaim for s p e c i f i c performance. A c c o r d i n g l y , t h e s o l e i s s u e on a p p e a l

i s t h e s u f f i c i e n c y of t h e e v i d e n c e t o s u p p o r t t h e judgment

p e r m i t t i n g f o r f e i t u r e of t h e payments. W affirm. e A purchaser of r e a l p r o p e r t y under an o r a l agreement who voluntarily terminates the contract cannot recover

p a r t i a l p a y m e n t s on t h e p u r c h a s e p r i c e s o l o n g a s t h e s e l l e r is w i l l i n g and a b l e t o p e r f o r m h i s p a r t o f t h e agreement. P e r k i n s v. Allnut ( 1 9 1 3 ) , 47 Mont. 1 3 , 1 5 , 1 3 0 P. 1, 1-2.

Although Fraser relies in part on section 28-1-104, MCA,

which c o d i f i e s an e x c e p t i o n t o t h i s g e n e r a l r u l e t h e s t a t u t e h a s no a p p l i c a t i o n h e r e . It provides:

"Whenever by t h e t e r m s o f a n o b l i g a t i o n a p a r t y thereto incurs a f o r f e i t u r e or a l o s s in the n a t u r e o f a f o r f e i t u r e by r e a s o n o f h i s f a i l u r e t o c o m p l y w i t h i t s p r o v i s i o n s , h e may b e relieved therefrom upon making full compensation t o t h e o t h e r p a r t y , except i n t h e c a s e of a g r o s s l y n e g l i g e n t , w i l l f u l , o r f r a u d u l e n t b re a c h of d u t y . " W h a v e c o n s t r u e d t h i s s t a t u t e t o mean e " t h a t a person

may o b t a i n r e l i e f u n d e r it i n any c a s e where h e s e t s f o r t h

f a c t s which a p p e a l t o t h e c o n s c i e n c e o f a c o u r t o f e q u i t y . "

Lewis v. Starlin ( 1 9 5 4 ) , 1 2 7 Mont. 474, 477-78, 267 P.2d 1 2 7 , 128-29. F o r f e i t u r e c a s e s i n v o l v e two c o m p e t i n g s o c i a l

policies. The general rule set forth i n Perkins, supra,

encourages enforcement of agreements though they may be

technically deficient. Lewis v. Starlin, supra, 1 2 7 Mont.

a t 477, 267 P.2d a t 128. On t h e o t h e r h a n d , we h a v e n o t e d

t h a t t h e law d o e s n o t f a v o r n e e d l e s s f o r f e i t u r e s . P a r r o t v.

Heller (1976), 171 Mont. 212, 215, 557 P.2d 819, 820,

relying on Y e l l o w s t o n e C o u n t y v. Wight (1943), 1 1 5 Mont. 411, 417, 1 4 5 P.2d 5 1 6 , 518. S e c t i o n 28-1-104, MCA, strikes

a b a l a n c e between t h e s e c o m p e t i n g p o l i c y c o n s i d e r a t i o n s . It

grants relief from forfeitures in most instances, but

upholds forfeiture in the case of a "grossly negligent,

w i l l f u l , o r f r a u d u l e n t b r e a c h o f d u t y by t h e p e r s o n s e e k i n g

relief from f o r f e i t u r e . " Here t h e t r i a l court found that

F r a s e r had i n d e e d r e p u d i a t e d t h e c o n t r a c t .

To be entitled to relief, Fraser had to establish

either (1) t h a t the seller, Edmisten, was unwilling or

unable to carry out the contract; or ( 2 ) t h a t he, Fraser,

had c o m m i t t e d no " g r o s s l y n e g l i g e n t , willful, or fraudulent

breach of the contract, while affirmatively setting forth

f a c t s t h a t a p p e a l t o a c o u r t of equity." The t r i a l court

was n o t s a t i s f i e d w i t h h i s p r o o f n o r do w e s e e any r e a s o n t o

upset the t r i a l c o u r t ' s decision.

The trial court found that Edmisten was willing and

able t o carry out the contract. Thus, the fact that the

c o n t r a c t was n o t in writing and therefore i n v i o l a t i o n of

t h e s t a t u t e of f r a u d s , should not permit Fraser t o p r e v a i l

i n h i s a t t e m p t a t r e c o v e r i n g h i s c o n t r a c t payments. A clear factual dispute existed on this question, and it was

resolved i n f a v o r of Edmisten. Fraser contends t h a t t h e f e d e r a l t a x l i e n s on t h e p r o p e r t y s t i l l e x i s t i n g a t t h e t i m e of t r i a l d e m o n s t ra t e d E d m i s t e n ' s i n a b i l i t y t o t r a n s f e r c l e a r

title. But Edmisten testified at length concerning his

a s s e t s , s o l v e n c y and a b i l i t y t o pay o f f t h e l i e n and p r o v i d e clear t i t l e t o Fraser. He s a i d h e would h a v e p r o v i d e d a

clear title when the parties signed a contract. The

e v i d e n c e s u f f i c e s t o j u s t i f y a f i n d i n g i n f a v o r of E d m i s t e n on t h i s i s s u e .

The trial court also found that Edmisten made no

m i s r e p r e s e n t a t i o n s t o F r a s e r and t h u s c o n c l u d e d t h a t F r a s e r had n o t made a showing s u f f i c i e n t t o move a c o u r t o f e q u i t y to relieve him o f the forfeiture. The e v i d e n c e s u p p o r t s t h i s conclusion. The e v i d e n c e i s s u f f i c i e n t t o j u s t i f y t h e finding that Edmisten was "ready, willing, and able" to

furnish either t i t l e i n s u r a n c e or an a b s t r a c t of title to

Fraser. E d m i s t e n t e s t i f i e d t h a t he would h a v e p r o v i d e d o n e or the other when the contract was signed. He further

testified that the proposed written contract between the p a r t i e s e x p r e s s l y r e q u i r e d him t o g u a r a n t y c l e a r title to

Fraser. The t r i a l c o u r t found t h a t E d m i s t e n had d i s c h a r g e d

a l l of the l i e n s encumbering the property except for the

federal tax lien that was "of record." The evidence supports these findings. Fraser admitted he knew that Edmisten had renewed the tavern's liquor license and had paid t h e back s t a t e t a x e s on t h e premises. Furthermore, F r a s e r ' s a t t o r n e y i n t r o d u c e d i n t o e v i d e n c e a c e r t i f i e d copy of the notice of a federal tax lien encumbering the premises. At that time, h e s t a t e d t h a t i t was on f i l e i n t h e Madison County C l e r k and R e c o r d e r ' s O f f i c e . The d e t a i l s

o f t h e l i e n a g a i n s t t h e p r o p e r t y were r e a d i l y a c c e s s i b l e t o Fraser. He cannot complain, therefore, that he was not able

to learn the specifics of the tax liens.

The judgment of the District Court is affirmed.

We Concur:

Chief Justice r'\\\ /

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V ,'/ Justices