No. 81-462
IN THE SUPREME COURT OF THE STATE OF MONTANA
1982
LOIS TILLOTSEN,
Plaintiff and Respondent,
MARADELL FRAZER, a single woman;
DAVID LEE BOVEE and THERESA LEE
BOVEE, as Joint tenants,
Defendants and Appeilants.
Appeal from: District Court of the First JudiciaD District,
in and for the County of Lewis and Clark
Honorable Gordon Bennett, Judge presiding.
Counsel of Record:
For Appellants:
Leaphart Law Firm, Helena, Montana
William Leaphart argued, Helena, Montana
For Respondent:
Small, Hatch and Doubek, Helena, Montana -\
John Doubek argued, Helena, Montana
Submitted: June 29, 1982
Decided: August 11, 1982
Mr. Justice John C. Sheehy delivered the Opinion of
the Court.
Defendants appeal from a judgment of the District Court
of the First Judicial District, wherein the court ordered
the partition of certain lots in the TOK Park Subdivision on
Hauser Lake and in effect adjudged the plaintiff sole owner
of the remaining land in the quarter section where the
subdivision is Located. We affirm.
Initially, we note that respondent's brief does not
comply with Rule 23(b), M.R.App.Civ.P., which requires,
inter alia, headings for the various parts of respondents'
briefs. There are none in this instance, which has hampered
our efforts to compare the parties' positions on the facts,
the procedural posture of the case and the points of law at
issue here. It appears that respondent simply started dis-
cussing the first page of appellants' brief and continued to
the end thereof without following the format that a quick
glance at Rule 23(b), M.R.App.Civ.P., would have indicated
is necessary.
On August 19, 1976, plaintiff entered into an "Agreement
to Convey Real Property" with her ex-husband (Ira Tillotson)
and another person (Johnson). The agreement provided that
plaintiff was the owner of the following described property:
"The Northwest 1/4 of Section 26 of Township
11 North of Range 2 West of the Montana
Principal Meridian, including therein the
whole of the dedicated subdivision recorded
in the office of the County Recorder of Lewis
and Clark County as TOK Park Subdivision, but
excepting therefrom lots 2, 8, 10, 16, 18,
20, 22, 26, 28 and 30 of said TOK Park Subdivision,
and subject to all easements and encumbrances of
record."
According to the plat on file at the county clerk and
recorder, the TOK Park Subdivision consisted of the whole
northwest quarter of the section 26 rsferred to in the
property description. A county road ran across the property
and there were some subdivided lots south of the road but
none north of the road.
Plaintiff had fallen behind in taxes and assessments on
the property. The agreement provided that Ira and Johnson
would take the necessary steps to quiet title in plaintiff's
name in return for the conveyance from her of an undivided
one-half interest in the land described in the agreement, at
which time Ira and Johnson were to subdivide the rest of the
land into lots and sell them. The agreement expressly
provided that the failure to so subdivide and sell would
constitute a failure of consideration for the conveyance.
On August 20, 1967, Ira assigned his interest in the
contract to Johnson and by February, 1968, the unpaid taxes,
penalties and liens were paid as the agreement provided.
A Helena attorney was instructed (by whom the record is
unclear) to draft a deed conveying an undivided one-half
interest in the land to Johnson and the deed that the attorney
sent to Johnson had the following property description:
"A one-half interest undivided of, in and to
the following: Lots 3, 5, 7, 9, 11, 13, 14,
15, 17, 19, 21, 23, 24, 25, 27, 29, 31 to 34,
of the T.O.K. Park Subdivision, situated in
the Northwest Quarter (NW1/4) of Section Twenty-
six (26), Township Eleven (11) North of Range
Two (2) West M.P.M. in said County of Lewis and
Clark, as said Lots are numbered., designated
and described on the official plat of said
subdivision on file in said Lewis and Clark
County. "
However, Johnson sent a different deed to the plaintiff
in California to sign, which had the following property
description:
"A one-half interest undivided of, in and to
all of the Northwest Quarter (AW1/4) of Section
Twenty-six (26), Township Eleven (11) North of
Range Two (2) West, M.P.M., except the T.O.K.
Park Subdivision.
"A one-half interest undivided of, in and to the
following: Lots 3, 5, 7, 9, 11, 13, 14, 15, 17,
19, 21, 2 3 , 24, 25, 27, 29, and 31 to 34, of the
T.O.K. Park Subdivision, situated in the Northwest
Quarter (NW1/4) of Section Twenty-six ( 2 6 ) , Township
Eleven (11) North of Range Two (2) West, M.P.M.
in said County of Lewis and Clark, as said Lots
are numbered, designed and described on the official
plat of said Subdivision on file in the said Lewis
and Clark County."
It can be seen that the second paragraph of the second
deed is virtud~yidenticalto the description in the first
deed. The first paragraph of the second deed was apparently
added because it was thought that the TOK Park Subdivision
consisted of only the subdivided lots south of the road
rather than the whole quarter section. Johnson testified
that he did not know how the new description was inserted in
the second deed, and Ira died prior to trial.
At any rate, Johnson sent the second deed, along with a
cover letter (describing the contents of the deed as a
"half-interest in TOK Park") to plaintiff in California who
testified that when she signed this deed, she realized she
was conveying a half-interest in less than the entire quarter
section. According to her testimony she did this because
Ira convinced her it was needed to facilitate selling of the
lots and also because Ira and Johnson had not improved and
sold the lots the way they should have under the agreement.
The executed deed was recorded on March 21, 1968.
Through mesne conveyances appellants Teresa and David
Bovee received a quarter interest in the land described in
the "Agreement to Convey" as did appellant Fraser.
On November 14, 1979, plaintiff filed an amended complaint,
seeking a partition of the lots mentioned in the filed deed
and also seeking to have herself declared the sole owner of
all of the rest of the land in the quarter section. All
parties agree that plaintiff has a one-half interest in the
surveyed lots south of the road. Defendants answered also
seeking partition and claiming to own an undivided one-half
interest in all the land in the quarter section by virtue of
the filed deed, which according to defendants, should be
reformed to reflect the parties' true intentions.
After a nonjury trial the court found there was a
failure of consideration (because of the rest of the property
not being subdivided and sold), ordered partition of the
lots described in the filed deed and, declaring that the
first sentence of the deed was a nullity, found that plaintiff
was fee owner of the rest of the quarter section.
The court further found there was a discrepancy between
the property description in the "Agreement" (which the District
Court interpreted as conveying all the land in the quarter
section) and the property description in the deed (which hhe
District Court interpreted as conveying only the subdivided
lots south of the road). The court concluded that Johnson
and his successors recognized the discrepancy but failed to
act and that the "Agreement" became merged in the deed
description thereby precluding reformation. Defendants
appeal.
We frame the issues on appeal as follows:
1. Did the District Court err in holding that plaintiff
was sole owner of the unsubdivided portion of the quarter
section?
2. Did appellants acquiesce in the property description
in the deed to effect a merger?
3. Was plaintiff guilty of laches?
Appellants first attack the District Court's statements
that the failure to improve and sell the lots constituted a
failure of consideration negating specific performance,
arguing that neither defendants nor plaintiff pleaded specific
performance or failure of consideration and that it is
reversible error for a lower court to consider issues not
before it. We disagree.
Paragraph 3 of the agreement provides in part:
"3. If and when the title to said property
is quieted in Grantor and Grantor has conveyed
an undivided 1/2 interest in said property to
Grantees, subject to the exceptions outlined in
paragraph 2a, - b, c above, ran tees will take
--
all necessary steps - survey, subdivide, manage,
-- to
advertise, promote, develop, improve --and sell
said property by individual- - - -
- lots on the open
market - - -
at its fair market value." (Emphasis
added. )
Paragraph 6 of the agreement provides in part:
"6. It is further understood by and between
the parties hereto that . ..all of the duties
outlined in paragraph 3 above are further con-
sideration for the conveyance of said 1/2
interest to Grantees and that the failure to
perform said duties will be a failure of
consideration for said conveyance."
We acknowledge that the agreement could have been more
clearly drafted. On the one hand, it would appear that (as
appellants argue) the conveyance of the one-half interest in
the property is a condition precedent to the subdividing and
selling of the lots. On the other hand, paragraph 6 specifically
states that any failure on the part of the grantees (Ira and
Johnson) to so sell and subdivide will constitute a failure
of consideration. It is uncontroverted here that further
subdividing and selling of the land did not occur and when
the agreement is viewed as a whole, it appears that the parties
intended the provisions~ofparagraph 6 totloverridethe state-
ments in paragraph 3.
While it is true that neither party expressly sought
specific performance, whether one labels it "specific performance"
or "reformation", the result is the same, i.e. appellants
would obtain title to a one-half interest in all the land if
they were successful. We hold that the District Court was
not in error for the statements regarding specific performance.
Appellants next contend that the deed has the effect of
conveying all the land which plaintiff owned in the quarter
section and that the District Court's interpretation disregards
the rule of construction that each term of an instrument is
presumed to have some effect, and also disregards section
70-1-516, MCA, which states that the provisions of a deed
are to be interpreted in favor of the grantee.
The first sentence of the deed grants a one-half interest
in all the land in the quarter section except the TOK Park
Subdivision. The District Court found that this first
sentence was incapable of conveying anything and we concur.
The plat of the TOK Park Subdivision on file in the county
records showed the subdivision as consisting of the entire
quarter section and to grant any land in the quarter section
while excepting the subdivision is thus an impossibility.
The second issue focuses on merger and appellants'
acquiescence and is related to the first issue. Appellants
argue that there is no evidence to support the District
Court's finding regarding acquiescence and that all parties'
conduct indicated that they understood the deed to convey
a one-half interest of the entire quarter section and not
just of the lots south of the road. Appellants point to the
following facts as supporting their assertion. In September
1968, during highway right-of-way proceedings, plaintiff
told one of the highway department agents that she had
deeded a one-half interest in all her property to Johnson.
After the Bovees and Fraser received their interests, records
showed that plaintiff paid taxes on one-half of all the
land in the quarter section, and that Bovees and Fraser
each paid taxes on one-quarter of the other one-half.
Appellants' contention ignores the impact of the state-
ments in the granting clause of the deed and the subdivision
plat, both of which were of record. Appellants are charged
with constructive notice of the contents of the deed,
section 70-21-302, MCA and any statements orally made are
controlled and overridden by these filed documents.
Appellants further argue that there can be no merger of
the property description in the agreement into the deed
unless the grantee (Johnson) agreed to accept the deed in
lieu of what was called for in the agreement, which he
did not do, and cite Hollensteiner v. Anderson (1927), 78 14ont.
122, 252 P. 796. By these arguments, appellants attack the
following conclusion of law made by the District Court:
"3. Defendants, having been aware of the
discrepancy between the agreement and the
deed for some twelve years and having taken
no action to have the deed corrected to conform
to the agreement in that time, must be deemed
to have acquiesced in the land description.set
forth in the deed, which effects a merger of
the agreement description into and with the
description of the deed, which precludes
reformation." (Citing Schillinger v. Huber
(1958), 133 Mont. 80, 320 P.2d 346.)
There is substantial evidence to support this conclusion
and we will not reverse it on appeal. Blasdel v. Montana
Power Company (1982) , ,
Mont. - 640 P.2d 889, 39 St.Rep.
219. The facts here indicate that a signatory of the
"Agreement" sent a deed with a different property description
to the plaintiff for signature. This deed was duly filed
and appellants were charged with constructive notice thereof,
section 70-21-302, MCA. Furthermore, appellant Fraser
testified that plaintiff was keeping the land in the quarter
section outside the subdivided lots as a "nest egg."
Appellants' filing of the "Agreement" on August 6, 1969,
indicates that the document was in their possession at that
time and they cannot now be heard to argue that they were
unaware of the differences in the property descriptions.
In Schillinger, supra, the purchaser accepted a deed
which did not conform to a prior contract and the court
found the contract to be merged into the deed. Schillinger
is sufficiently on point to provide valid authority for the
District Court's conclusion of law above and we uphold it
here.
In the third issue, appellants argue that plaintiff was
guilty of laches because she realized appellants claimed a
one-half interest in - the property for 12 years and did
all
nothing about it. We disagree. The exhibits and evidence
adduced at trial indicated that plaintiff had been concerned
about her interest in the property for quite a while. She
wrote a number of letters to her lawyer, and other parties
interested in the land, with little or no response thereto
by the latter. These actions do not indicate that plaintiff
sat on her rights so as to render enforcement thereof
inequitable, Estate of Wallace (1980), - Mont . - 606
,
P.2d 136, 37 St.Rep. 158.
Affirmed.
We Concur: