No. 14492
IN THE SUPREME COURT OF THE STATE OF MONTANA
1979
M . E. ROGERS I
Plaintiff and Respondent,
-vs-
GEORGE A. RELYEA and DOROTHY RELYEA,
Defendants and Appellants.
Appeal from: District Court of the First Judicial District,
Honorable Peter G. Meloy, Judge presiding.
Counsel of Record:
For Appellants:
Daniels and Mizner, Deer Lodge, Montana
For Respondent:
Gough, Shanahan, Johnson & Waterman, Helena, Montana
Submitted on briefs: August 1, 1979
- ,--,- ,
Filed: 6 !-
:'
._. .-
Mr. Justice John Conway Harrison delivered the Opinion of
the Court.
This is an appeal from Broadwater County concerning the
specific performance of an agreement and option to purchase
mining claims.
Defendants Relyea are the owners of patented and un-
patented mining claims in Broadwater County. In 1965 defen-
dants entered into an agreement permitting the Finley Com-
pany to mine the property on which the claims were located
and keep all proceeds from the mining operations. The
agreement included an option to purchase the mining claims
and provided for the establishment of escrow and a deposit
of a deed in escrow by the defendants. In 1967 Finley and
the defendants modified the schedule of payments in the
agreement.
The original agreement with its modification was as-
signed by Finley to plaintiff M. E. Rogers also in 1967.
The assignment specifically recited that the escrow men-
tioned in the original agreement had never been established.
Between 1967 and 1974, the parties modified the assigned
contract four or more times because of plaintiff's failure
to make timely payments. One of these modifications was a
document entitled "Option Agreement" where plaintiff was
granted the exclusive right to purchase the mining claims
and payments were made annually beginning on January 2,
1974. The first January 2nd payment was further extended
until June 15, 1974, by a modification executed by the
parties on March 15, 1974. Plaintiff failed to make the
June 15th payment.
In May 1974 plaintiff contacted Richard Voit to secure
financing for the development of the mine. Voit and plain-
t i f f o b s e r v e d t h e mining p r o p e r t y and went t o t h e bank where
t h e escrow w a s t o have been e s t a b l i s h e d . They d i s c o v e r e d ,
however, t h a t t h e escrow had n o t been e s t a b l i s h e d . Voit
t o l d p l a i n t i f f t h a t he would withdraw h i s f i n a n c i a l commit-
ment t o t h e mine i f t h e escrow was n o t e s t a b l i s h e d . Plain-
t i f f t h e n went t o d e f e n d a n t s ' r e s i d e n c e and r e q u e s t e d t h a t
t h e deed be p l a c e d i n escrow. Defendants r e f u s e d , however,
c l a i m i n g t h a t p l a i n t i f f had n o t complied w i t h t h e t e r m s o f
t h e agreement. D e f e n d a n t s t h e r e a f t e r assumed t h e r e l a t i o n -
s h i p w a s t e r m i n a t e d w i t h p l a i n t i f f and a r r a n g e m e n t s were
made w i t h o t h e r p a r t i e s f o r t h e development o f t h e p r o p e r t y .
P r i o r t o t h e t e r m i n a t i o n of t h e a g r e e m e n t , p l a i n t i f f ,
d e f e n d a n t s and a t h i r d p a r t y e n t e r e d i n t o a c o n t r a c t i n 1974
f o r t h e c u t t i n g o f stumpage on t h e mining p r o p e r t y . Under
t h e stumpage c o n t r a c t , payments by t h e t h i r d p a r t y w e r e made
t o d e f e n d a n t s and a p p l i e d t o p l a i n t i f f ' s a n n u a l payment
under t h e c o n t r a c t between d e f e n d a n t s and p l a i n t i f f .
P l a i n t i f f f i l e d a c o m p l a i n t on December 8, 1975, s e e k -
i n g t o r e s t r a i n d e f e n d a n t s from t e r m i n a t i n g t h e agreement,
r e q u i r i n g defendants t o s p e c i f i c a l l y perform p o r t i o n s of t h e
agreement, and r e q u e s t i n g damages f o r t h e b r e a c h o f t h e
agreement. Upon a motion f o r p a r t i a l summary judgment, the
D i s t r i c t C o u r t found t h a t a v a l i d agreement e x i s t e d between
t h e p a r t i e s which agreement was b r e a c h e d by d e f e n d a n t s '
f a i l u r e t o e s t a b l i s h a n escrow agreement and c r e d i t c e r t a i n
payments t o p l a i n t i f f . The c o u r t excused p l a i n t i f f from h i s
performance under t h e agreement. Upon t h e t r i a l o f t h e
r e m a i n i n g i s s u e s , t h e c o u r t reformed t h e c o n t r a c t and o r d e r e d
s p e c i f i c performance. Damages r e s u l t i n g from t h e b r e a c h
were d e n i e d . From t h i s judgment, b o t h p l a i n t i f f and d e f e n -
dants appeal.
S e v e r a l i s s u e s are r a i s e d on a p p e a l :
1. id t h e D i s t r i c t C o u r t err i n 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 b e c a u s e t h e agreement c o n t a i n e d an
o p t i o n t o p u r c h a s e and t h e r e f o r e l a c k e d m u t u a l i t y r e q u i r e d
f o r t h e g r a n t i n g o f s p e c i f i c performance?
2. Was d e f e n d a n t s ' f a i l u r e t o e s t a b l i s h an escrow
agreement a m a t e r i a l b r e a c h o f t h e c o n t r a c t which excused
p l a i n t i f f ' s f a i l u r e t o make r e q u i r e d payments under t h e
contract?
3. Did t h e D i s t r i c t C o u r t err i n f i n d i n g t h a t d e f e n -
d a n t s f a i l e d t o c r e d i t payments under t h e stumpage c o n t r a c t
to plaintiff?
4. Was t h e stumpage c o n t r a c t n o t b i n d i n g on t h e p a r -
t i e s b e c a u s e i t w a s n o t s u p p o r t e d by c o n s i d e r a t i o n ?
5. I n reforming t h e c o n t r a c t , d i d t h e D i s t r i c t Court
err i n r e q u i r i n g p l a i n t i f f t o e x e c u t e a p r o m i s s o r y n o t e and
r e a l mortgage upon payment of o n e - f i f t h of t h e b a l a n c e of
t h e purchase p r i c e ?
6. Did t h e D i s t r i c t C o u r t err i n f a i l i n g t o g r a n t
p l a i n t i f f damages f o r t h e b r e a c h of t h e agreement?
With r e g a r d t o t h e f i r s t i s s u e , d e f e n d a n t s a r g u e t h a t
e q u i t y w i l l n o t d e c r e e t h e s p e c i f i c performance of a n o p t i o n
t o p u r c h a s e c o n t a i n e d w i t h i n a mining agreement b e c a u s e
o p t i o n s a r e u n i l a t e r a l i n n a t u r e and l a c k mutual o b l i g a t i o n s .
W e disagree. The r u l e i s w e l l s e t t l e d t h a t o p t i o n s t o
p u r c h a s e may be s p e c i f i c a l l y e n f o r c e d i n c i r c u m s t a n c e s l i k e
t h e present case. S t e e n v. Rustad ( 1 9 5 7 ) , 132 Mont. 96, 313
P.2d 1014; McLaren Gold Mining Co. v. Morton ( 1 9 5 0 ) , 1 2 4
Mont. 382, 224 P.2d 975. The McLaren c a s e i s p a r t i c u l a r l y
analogous t o t h i s case. McLaren i n v o l v e d a n a c t i o n f o r
s p e c i f i c performance o f a n o p t i o n t o p u r c h a s e c o n t a i n e d
w i t h i n a mining l e a s e . The p l a i n t i f f , a s l e s s e e , a s s i g n e d
h i s i n t e r e s t i n t h e c o n t r a c t t o a t h i r d p a r t y who expended
c o n s i d e r a b l e sums i n d e v e l o p i n g and mining t h e p r o p e r t y . In
d i r e c t i n g t h e d e f e n d a n t l e s s o r t o s p e c i f i c a l l y perform t h e
t e r m s of t h e c o n t r a c t and o p t i o n t o p u r c h a s e , t h e C o u r t
stated:
" ' T h e r e i s no c l a s s o f c o n t r a c t s c o n n e c t e d w i t h
t h e mining i n d u s t r y more f a m i l i a r t o t h e p r o f e s -
s i o n t h a n t h a t of o p t i o n s t o p u r c h a s e , working
bonds, o r e x e c u t o r y c o n t r a c t s of s a l e . U n l i k e
o t h e r c l a s s e s o f r e a l e s t a t e , t h e v a l u e o f a mine
c a n n o t b e d e t e r m i n e d by m e r e s u p e r f i c i a l o b s e r v a -
t i o n . Expensive i n v e s t i g a t i o n s , i n v o l v i n g mea-
s u r e m e n t s , e x a m i n a t i o n of underground g e o l o g i c a l
c o n d i t i o n s , and sampling i n v a r i a b l y p r e c e d e t h e
consummation o f a p u r c h a s e o r s a l e o f mining
property. I n o r d e r t o j u s t i f y a n i n t e n d i n g pur-
c h a s e r i n making t h e r e q u i s i t e i n v e s t i g a t i o n s
and i n c u r r i n g t h e a t t e n d a n t e x p e n s e , h e i n v a r i -
a b l y e x a c t s some c o n t r a c t from t h e owner by which
he s e c u r e s t h e f i r s t p r i v i l e g e o f p u r c h a s i n g t h e
property i n t h e e v e n t t h e examination proves
s a t i s f a c t o r y . I n a d d i t i o n t o t h i s , a l a r g e army
of " p r o m o t e r s , " r e c r u i t e d from t h e r a n k s of a l l
p r o f e s s i o n s , t r a d e s , and o c c u p a t i o n s , swarm
t h r o u g h t h e mining r e g i o n s , s e e k i n g e x c l u s i v e
p r i v i l e g e s and " o p t i o n s " on mining p r o p e r t i e s of
a l l c l a s s e s f o r t h e purpose of m a r k e t i n g them i n
t h e moneyed c e n t e r s o f t h e world. These condi-
t i o n s have g i v e n r i s e t o a c l a s s o f c o n t r a c t s
i n f i n i t e i n v a r i e t y , from a mere l e t t e r s i g n e d by
t h e owner, a g r e e i n g t o a c c e p t a c e r t a i n p r i c e f o r
h i s mine i f p a i d w i t h i n a c e r t a i n t i m e , t o a
f o r m i d a b l e working bond, which c o n t e m p l a t e s e n t r y
i n t o p o s s e s s i o n and e x t e n s i v e e x p l o i t a t i o n t o
p r o v e t h e v a l u e o f t h e mine b e f o r e t h e p r i v i l e g e
of p u r c h a s e must be e x e r c i s e d . The u l t i m a t e ob-
j e c t of a l l of them, however, i s t o s e c u r e t h e
exclusive p r i v i l e g e of purchasing a t a given
price, within a specified t i m e . * * *
" I * * * t h e r u l e t h a t c o n t r a c t s which do n o t
i n v o l v e m u t u a l i t y c a n n o t be s p e c i f i c a l l y e n f o r c e d
i s modified i n favor of t h e holder of t h i s c l a s s
o r contracts. H e i s afforded t h i s equitable
remedy, where h e f u l l y and f a i r l y p e r f o r m s , o r
o f f e r s t o perform, t h e t e r m s of h i s c o n t r a c t
w i t h i n t h e time s t i p u l a t e d .
"'The very purpose of an o p t i o n a l c o n t r a c t of t h i s
n a t u r e i s t o extinguish t h i s mutuality of r i g h t
and v e s t i n one o f t h e p a r t i e s t h e p r i v i l e g e of
d e t e r m i n i n g whether t h e c o n t r a c t s h a l l be v i t a -
l i z e d and e n f o r c e d . An o p t i o n t o buy o r s e l l l a n d ,
more t h a n any o t h e r form of c o n t r a c t , c o n t e m p l a t e s
a specific performance of its terms; and it is the
right to have them specifically enforced that im-
parts to them their usefulness and value.'" 124
Mont. at 392-93, quoting 3 Lindley on Mines (3rd
Ed.), section 859, pp. 2123-2127.
We hold, therefore, that the option to purchase con-
tained within the contract in the instant case may be enforced
by specific performance.
With respect to the second issue, defendants argue that
the covenant to establish escrow was not a material part of
the contract and was independent of plaintiff's covenant to
make timely payments. On this basis defendants argue that
their failure to establish the escrow did not excuse plain-
tiff's failure to make the June 15 payment. In the alter-
native, defendants contend that plaintiff waived the estab-
lishment of escrow as a material part of the contract. It
is argued that plaintiff knew from the modifications and the
assignment that the escrow had never been established and
that this became an immaterial part of the agreement.
We disagree. The covenant to establish escrow was a
material part of the contract and a condition precedent to
plaintiff's obligation to make payments. The object of the
contract entered into between the parties was the purchase,
development and financing of the mining claims. The estab-
lishment of the deed in escrow was an integral part in the
attainment of this object. Without the escrow, it is highly
probable that the parties would not have even contemplated
such an agreement.
As to defendants' argument that plaintiff waived the
establishment of escrow as a material part of the contract,
the record is clear that plaintiff did not waive this require-
ment. Though the assignment acknowledged the escrow had
never been established, plaintiff went to defendants' resi-
dence i n May 1974 t o r e q u e s t t h e e s t a b l i s h m e n t of t h e e s -
crow. A t that time, p l a i n t i f f w a s c u r r e n t i n h i s payments.
P l a i n t i f f d i d n o t d e f a u l t u n t i l he f a i l e d t o make t h e J u n e
1 5 payment; d e f e n d a n t s , however, d e f a u l t e d e a r l i e r when t h e y
r e f u s e d t o e s t a b l i s h t h e escrow.
The g e n e r a l r u l e i s t h a t a p a r t y committing a s u b s t a n -
t i a l breach of a c o n t r a c t cannot maintain an a c t i o n a g a i n s t
t h e o t h e r contracting p a r t y o r h i s predecessor i n i n t e r e s t
f o r a s u b s e q u e n t f a i l u r e t o perform i f t h e p r o m i s e s are
dependent. 1 7 Am.Jur.2d C o n t r a c t s , S366, p. 807. A sub-
s t a n t i a l o r m a t e r i a l b r e a c h i s one which t o u c h e s t h e funda-
m e n t a l p u r p o s e s o f t h e c o n t r a c t and d e f e a t s t h e o b j e c t o f
t h e p a r t i e s i n making t h e c o n t r a c t . Here, t h e D i s t r i c t
C o u r t found t h a t d e f e n d a n t s committed a s u b s t a n t i a l b r e a c h
o f t h e agreement and o r d e r e d d e f e n d a n t s t o s p e c i f i c a l l y
perform t h e t e r m s of t h e c o n t r a c t . Implicit i n the court's
o r d e r w a s t h e f a c t t h a t t h e c o v e n a n t s were dependent. It is
t h e g e n e r a l r u l e t h a t t h e c o u r t ' s f i n d i n g s w i l l n o t be
d i s t u r b e d on a p p e a l u n l e s s u n s u p p o r t e d by s u b s t a n t i a l e v i -
dence. Arrowhead, I n c . v . Safeway S t o r e s , I n c . (1978),
Mont. , 587 P.2d 4 1 1 , 413, 35 St.Rep. 1830, 1832. Here,
we f i n d t h a t t h e r e i s s u f f i c i e n t c r e d i b l e e v i d e n c e t o sup-
p o r t t h e f i n d i n g s of t h e c o u r t .
Defendants n e x t a r g u e t h a t t h e D i s t r i c t C o u r t e r r e d i n
f i n d i n g t h a t d e f e n d a n t s f a i l e d t o c r e d i t c e r t a i n amounts
r e c e i v e d t o p l a i n t i f f ' s a n n u a l payment under t h e agreement.
These amounts stemmed from a s e p a r a t e c o n t r a c t f o r t h e s a l e
of stumpage on t h e mining p r o p e r t y . Under t h i s c o n t r a c t
p l a i n t i f f , d e f e n d a n t s and a t h i r d p a r t y a g r e e d t h a t payments
under t h e stumpage c o n t r a c t would b e made t o d e f e n d a n t s and
a p p l i e d a g a i n s t t h e p l a i n t i f f ' s a n n u a l payment under t h e
agreement between p l a i n t i f f and d e f e n d a n t s .
Defendants c o n t e n d t h a t t h e f i n d i n g i s n o t s u p p o r t e d by
s u b s t a n t i a l evidence, s i n c e t h e record does n o t r e f l e c t t h e
r e c e i p t of any s u c h money. P l a i n t i f f a r g u e s , however, t h a t
defendants admitted t h e f i n d i n g because they f a i l e d t o
answer a r e q u e s t f o r a d m i s s i o n r e g a r d i n g t h e m a t t e r w i t h i n
30 days. The r e q u e s t a s k e d d e f e n d a n t s t o a d m i t t h a t t h e y
f a i l e d t o c r e d i t payments from t h e stumpage c o n t r a c t t o
p l a i n t i f f ' s a n n u a l payment.
Under Rule 36, M.R.Civ.P., " t h e matter i s admitted
u n l e s s , w i t h i n 30 d a y s a f t e r s e r v i c e of t h e r e q u e s t , o r
w i t h i n s u c h s h o r t e r o r l o n g e r t i m e a s t h e c o u r t may a l l o w ,
t h e p a r t y t o whom t h e r e q u e s t i s d i r e c t e d s e r v e s upon t h e
p a r t y r e q u e s t i n g t h e a d m i s s i o n a w r i t t e n answer o r o b j e c t i o n
. . ." Here, the record d i s c l o s e s t h a t defendants f a i l e d t o
answer t h e r e q u e s t and w e r e n o t g r a n t e d a n e x t e n s i o n by t h e
court. Therefore, a s p l a i n t i f f properly contends, t h e
matter w a s deemed a d m i t t e d . I n s o h o l d i n g , however, w e f e e l
i t i s noteworthy t o mention t h a t t h e D i s t r i c t C o u r t a l s o
o r d e r e d a n a c c o u n t i n g t o a s c e r t a i n t h e e x a c t amount o f
p l a i n t i f f ' s c r e d i t i n t h e i n s t a n t c a s e and t h a t , i f d e f e n -
dants' a s s e r t i o n i s i n f a c t t r u e , it w i l l bear i t s e l f o u t
when t h a t a c c o u n t i n g o c c u r s .
Defendants a l s o a r g u e t h a t t h e stumpage c o n t r a c t was
n o t a b i n d i n g agreement on t h e p a r t i e s b e c a u s e it w a s n o t
s u p p o r t e d by any c o n s i d e r a t i o n . This i s simply n o t t r u e .
Defendants had a n i n j u n c t i o n and a s u i t pending a g a i n s t
p l a i n t i f f and t h e t h i r d p a r t y r e g a r d i n g t h e c u t t i n g o f
stumpage on t h e mining p r o p e r t y . They l a t e r r e l i n q u i s h e d
t h e i r c l a i m when t h e p a r t i e s r e s o l v e d t h e i r d i s a g r e e m e n t by
e x e c u t i n g t h e stumpage c o n t r a c t . T h i s w a s s u f f i c i e n t con-
s i d e r a t i o n t o c r e a t e a binding c o n t r a c t . Murray v . White
( 1 9 1 1 ) , 42 Mont. 423, 113 P. 754; Mustang Equipment, I n c . v .
Welch ( 1 9 7 7 ) , 564 P.2d 895, 115 A r i z . 206.
The f i f t h i s s u e r a i s e d c o n c e r n s t h e e x t e n t t o which a
c o u r t may r e f o r m a c o n t r a c t . P l a i n t i f f c o n t e n d s t h a t i t was
e r r o r f o r t h e D i s t r i c t Court, i n reforming t h e c o n t r a c t , t o
r e q u i r e p l a i n t i f f t o e x e c u t e a p r o m i s s o r y n o t e and a r e a l
e s t a t e mortgage upon payment o f o n e - f i f t h o f t h e b a l a n c e o f
t h e purchase p r i c e . I t i s argued t h a t t h i s requirement
imposed g r e a t e r b u r d e n s on p l a i n t i f f t h a n o r i g i n a l l y contem-
p l a t e d by t h e p a r t i e s : i t o b l i g a t e d p l a i n t i f f t o making a l l
f u r t h e r payments a f t e r making t h e f i r s t payment; i t c r e a t e d
p e r s o n a l l i a b i l i t y on t h e p a r t of p l a i n t i f f f o r t h e unpaid
b a l a n c e of t h e p u r c h a s e p r i c e ; and i t gave d e f e n d a n t s t h e
r i g h t t o f o r e c l o s e i n t h e e v e n t of a f u t u r e d e f a u l t .
Defendants a l s o c o n t e n d i t was e r r o r f o r t h e D i s t r i c t
Court i n reforming t h e c o n t r a c t t o o r d e r an accounting,
s c h e d u l e a new o p t i o n t o p u r c h a s e d a t e , and s e t up a new
payment s c h e d u l e .
The power of a c o u r t t o r e f o r m a c o n t r a c t was d i s c u s s e d
i n S u l l i v a n v . Marsh ( 1 9 5 0 ) , 1 2 4 Mont. 415, 421-22, 225
P.2d 868, 872, where t h i s C o u r t s t a t e d :
"One may n o t employ a s u i t f o r r e f o r m a t i o n of a
c o n t r a c t f o r t h e p u r p o s e of making a n e n t i r e l y
new agreement. Such s u i t s a r e o n l y t o e s t a b l i s h
and p e r p e t u a t e a n a l r e a d y e x i s t i n g agreement,
and t o make it e x p r e s s t h e r e a l i n t e n t o f t h e
p a r t i e s as s u c h i n t e n t e x i s t e d a t t h e t i m e of
t h e making o f t h e agreement. A c o u r t of e q u i t y
i s n o t empowered t o s u p p l y by d e c r e e a n a g r e e -
ment which w a s n e v e r made ... I t i s t h e duty
of t h e c o u r t t o e n f o r c e c o n t r a c t s which t h e p a r -
t i e s t h e m s e l v e s have made and n o t t o make new
and d i f f e r e n t c o n t r a c t s f o r t h e p a r t i e s o r t o
make s i g n i f i c a n t a d d i t i o n s t h e r e t o and t h u s g i v e
t o o n e o r more o f t h e p a r t i e s , b e n e f i t s and ad-
v a n t a g e s on which t h e minds of t h e c o n t r a c t i n g
p a r t i e s have n e v e r met."
W e h o l d t h a t i t was n o t e r r o r f o r t h e D i s t r i c t C o u r t t o
o r d e r a n a c c o u n t i n g , s c h e d u l e a new o p t i o n t o p u r c h a s e d a t e
and s e t up a new payment s c h e d u l e . These a d j u s t m e n t s w e r e
n e c e s s a r y t o d e t e r m i n e t h e s t a t e o f a f f a i r s between t h e
p a r t i e s and c a r r y o u t t h e i r agreement once t h e c o n t r a c t had
been breached and t h e d a t e s f o r p l a i n t i f f ' s performance had
passed. Without t h e s e a d j u s t m e n t s , it w a s i m p o s s i b l e f o r
t h e c o u r t t o g i v e e f f e c t t o t h e o r d e r f o r s p e c i f i c performance.
The a d j u s t m e n t of t h e s e t e r m s was c o n s o n a n t w i t h t h e powers
o f a c o u r t i n e q u i t y and t h e p u r p o s e s of e q u i t a b l e r e l i e f .
Amos v. Bennion ( 1 9 6 9 ) , 23 Utah2d 4 0 , 456 P.2d 172.
However, it w a s e r r o r f o r t h e D i s t r i c t C o u r t t o r e q u i r e
p l a i n t i f f t o e x e c u t e a p r o m i s s o r y n o t e and r e a l e s t a t e
mortgage upon t h e payment of o n e - f i f t h o f t h e b a l a n c e of t h e
purchase p r i c e . Although t h e r e q u i r e m e n t was, u n d e r s t a n d a b l y ,
a s i n c e r e e f f o r t by t h e c o u r t t o remedy t h e p a t t e r n o f
u n t i m e l y payments by p l a i n t i f f , i t n e v e r t h e l e s s exceeded t h e
s c o p e o f t h e agreement a s o r i g i n a l l y c o n t e m p l a t e d by t h e
parties. I t a l t e r e d t h e o r i g i n a l agreement by c r e a t i n g new
r i g h t s and o b l i g a t i o n s , and i t was n o t n e c e s s a r y t o r e i n -
s t a t e t h e c o n t r a c t u a l r e l a t i o n s h i p between t h e p a r t i e s . For
t h e s e r e a s o n s , w e o r d e r t h a t t h e r e q u i r e m e n t be d e l e t e d .
F i n a l l y p l a i n t i f f argues t h a t t h e D i s t r i c t Court e r r e d
i n n o t g r a n t i n g damages f o r t h e b r e a c h o f t h e c o n t r a c t . The
t h r u s t of p l a i n t i f f ' s c o n t e n t i o n i s t h a t d e f e n d a n t s ' b r e a c h
"drove o f f a p o t e n t i a l i n v e s t o r [Voit] a t t r a c t e d t o t h e
mine" and p r e v e n t e d p l a i n t i f f from f i n a n c i a l l y d e v e l o p i n g
t h e mine.
Montana s t a t u t e s s e t f o r t h t h e measure o f damages i n
t h e case of breach of c o n t r a c t . S e c t i o n 27-1-311, MCA,
provides :
"For t h e b r e a c h o f a n o b l i g a t i o n a r i s i n g from
c o n t r a c t , t h e measure of damages, e x c e p t where
o t h e r w i s e e x p r e s s l y p r o v i d e d by t h i s c o d e , i s
t h e amount which w i l l compensate t h e p a r t y ag-
grieved f o r a l l t h e detriment proximately caused
t h e r e b y o r which i n t h e o r d i n a r y c o u r s e o f t h i n g s
would be l i k e l y t o r e s u l t t h e r e f r o m . No damages
-
The D i s t r i c t C o u r t h e l d t h a t p l a i n t i f f ' s c l a i m s w e r e t o o
s p e c u l a t i v e o r n o t s u p p o r t e d by t h e e v i d e n c e t o p e r m i t a n
award of damages. W e agree. W cannot say with absolute
e
c e r t a i n t y t h a t t h e mine would n o t have been developed i f
V o i t had n o t d e c i d e d t o i n v e s t i n t h e v e n t u r e . Another
i n v e s t o r c o u l d have p o s s i b l y e x p r e s s e d i n t e r e s t , o r i t m i g h t
have been t h a t V o i t would have d e c i d e d f o r some o t h e r r e a s o n
n o t t o i n v e s t i n t h e mine r e g a r d l e s s o f t h e e s t a b l i s h m e n t o f
escrow.
Affirmed i n p a r t and r e v e r s e d i n p a r t .
W e concur:
-
C>ief Justice
* & 1,
, ,Jd&d*L-,,/
Justices 9