Turley v. Turley

No. 81-61
IN THE SUPREME COURT OF THE STATE OF MONTANA

LYCURGUS A. TURLEY and ELNORA FAYE
TURLEY, husband and wife,

Plaintiffs and Appellants,
VS.

GERALD 0 TURLEY and PHYLLIS K. TURLEY,
.
his wife, a.nd JAMES M. TURLEY a/k/a
MICHAEL TURLEY and MAXINE M. TURLEY,
his wife,
Defendants and Respondents.

Appeal from: District Court of the Fourteenth Judicial District,
In and for the County of Musselshell
Honorable Nat Allen, Judge presiding.
Counsel of Record:
For Appellants:

Hennessey Law Office, Billings, Montana
Joseph P. Hennessey argued, Billings, Montana
For Respondents:

Crowley, Haughey, Hanson, Toole & Dietrich, Billings,
Montana
George C. Dalthorp argued and Cynthia Ford argued,
Billings, Montana

Submitted: May 14, 1982

Decided: July 22, 1982
Filed: JUL 2 2 1982
Mr. J u s t i c e J o h n Conway H a r r i s o n delivered the Opinion of
the Court.

P l a i n t i f f s commenced t h i s a c t i o n i n S e p t e m b e r 1 9 7 8 i n

the District Court of the Fourteenth Judicial District of

t h e S t a t e o f Montana, i n and f o r t h e County of M u s s e l s h e l l ,

t o s e t a s i d e two q u i t c l a i m d e e d s e x e c u t e d b y them i n f a v o r

of the defendants. The c a s e was t r i e d w i t h o u t a j u r y a n d i n

J u l y 1980 t h e c o u r t found f o r t h e d e f e n d a n t s . This appeal

follows,

G e r a l d E. and Regina T u r l e y ranched a t Musselshell,

Montana. They had s e v e n l i v i n g c h i l d r e n a t t h e t i m e o f t h e

trial--Edward, Gerald O., Turla, Mike, Francis, Adele and

Lycurgus. Gerald 0. and Mike, the two defendants, have

spent their entire l i v e s working on the ranch. Lycurgus,

t h e p l a i n t i f f , went t o l i v e w i t h r e l a t i v e s i n Texas from a g e

e l e v e n t o t h e completion of h i g h s c h o o l because he r e q u i r e d

special attention for h i s cerebral palsy. Lycurgus r e t u r n e d

t o t h e T u r l e y r a n c h i n 1 9 6 3 a n d b e g a n t o work t h e r e o f f a n d

on with his father and his brothers Mike and Gerald 0,

Lycurgus l e f t t h e r a n c h i n 1967 and h a s n o t l i v e d o r worked

there since.

The f a t h e r , G e r a l d E. T u r l e y , d i e d i n 1973. Prior to

h i s d e a t h , he e s t a b l i s h e d an e s t a t e p l a n by which t h o s e s o n s

who w o r k e d t h e r a n c h would own t h e s u r f a c e o f the land. He

a l s o intended t o g r a n t the r i g h t t o l e a s e the mineral r i g h t s

t o t h e s o n s working t h e ranch, but t o reserve to a l l of the

children the right to receive royalties from production.

The s o n s o n t h e r a n c h were t o p a y $ 1 0 , 0 0 0 t o e a c h o f their

brothers and s i s t e r s upon the parents' death. The e s t a t e

p l a n was i n i t i a t e d i n 1 9 6 4 when G e r a l d 0 . a n d Mike w e r e t h e

o n l y s o n s working t h e ranch. At t h a t time, G e r a l d 0. and
Mike w e r e e a c h d e e d e d a n u n d i v i d e d o n e - s i x t h of the surface

i n February 1964. Lycurgus returned t o t h e ranch in June

1 9 6 4 a n d was d e e d e d a o n e - s i x t h interest in the surface in

December 1964. Gerald E, and Regina Turley continued to

convey e q u a l i n t e r e s t s t o G e r a l d O., Mike a n d Lycurgus in

1 9 6 5 , 1 9 6 6 , and 1 9 6 7 .

After Lycurgus had left the ranch, the parents

continued t o deed the surface t o Gerald 0. a n d Mike from

1969 to 1973 b u t did not convey any further interest to

Lycurgus. The father, Gerald E., died before the entire

p l a n was c a r r i e d o u t a n d , as a result, none of the mineral

i n t e r e s t and a l l but 2-1/2% of t h e s u r f a c e r i g h t s had n o t

been deeded. The mineral interest and a small surface

percentage became part of the father's e s t a t e and thereby

p a s s e d t o h i s w i f e and c h i l d r e n .

L y c u r g u s p o s s e s s e d a 24-1/2% i n t e r e s t i n t h e r a n c h a t

t h e d a t e o f h i s f i n a l d e p a r t u r e from t h e r a n c h i n 1967. His

f a t h e r w a n t e d him t o d e e d t h i s i n t e r e s t t o t h e s o n s who were

working the ranch. The Turley family lawyer prepared a

quitclaim deed from Lycurgus to Gerald 0, and Mike,

Lycurgus signed the deed on August 18, 1968, The deed

q u i t c l a i m e d Lycurcjus's s u r f a c e r i g h t s o n l y .

In that same year, 1968, the Turley ranch was

r e f i n a n c e d a n d a l o a n was p r o c u r e d f r o m P r u d e n t i a l I n s u r a n c e

Company i n t h e sum o f $ 1 5 0 , 0 0 0 . T h i s n o t e was s i g n e d b y t h e

p a r e n t s , G e r a l d O., Mike a n d L y c u r g u s . When L y c u r y u s q u i t -

c l a i m e d h i s i n t e r e s t t o G e r a l d 0. and M i k e , they agreed t o

assume all the l i a b i l i t y of Lycurgus under the promissory

note and mortgage to Prudential Insurance Company and to

i n d e m n i f y a n d h o l d him h a r m l e s s f r o m a l l c o n s e q u e n c e s o f h i s
execution thereof, all according to the language of the

q u i t c l a i m deed. W h i l e L y c u r g u s ' s name was n o t removed f r o m

the note, t h e r e was n o s h o w i n g t h a t h e s u s t a i n e d a n y damage

or detriment as a result. After the action began, the

d e f e n d a n t s s o u g h t t o h a v e L y c u r g u s ' s name removed from t h e

n o t e , b u t h e r e f u s e d t o upon a d v i c e f r o m c o u n s e l .

The c h i l d r e n o f G e r a l d E. each r e c e i v e d an i n t e r e s t

in the minerals under the land upon the distribution of

Gerald E.'s estate. Gerald 0. and Mike requested each of

their siblings to quitclaim t h e i r mineral interest but to

reserve their right to royalties. Lycurgus and his wife

e x e c u t e d s u c h a q u i t c l a i m d e e d o n March 3 , 1 9 7 7 .

Lycurgus later claimed that both the 1968 and 1977

q u i t c l a i m d e e d s were e x e c u t e d a s a r e s u l t o f f r a u d a n d u n d u e

i n f l u e n c e a n d t h i s s u i t was t h e r e s u l t .

The f o l l o w i n g i s s u e s a r e p r e s e n t e d o n a p p e a l :

1. Whether the court erred in declaring the 1968

deed valid and in barring the plaintiffs' action for

recovery?

2. Whether the court erred in declaring the 1977

deed valid and in barring the plaintiffs' action for

recovery?

Four cases are cited by the appellant as authority

for this Court to overrule the judgment of the District

Court. Denny v . Brissonneaud (1973), 1 6 1 Mont. 468, 506

P.2d 77; M e r c h a n t ' s Bank v . Greenhood ( 1 8 9 5 ) , 1 6 Mont. 395,

4 1 P. 250; Cameron v. Cameron (1978), 1 7 9 Mont. 219, 587

P.2d 939; Van E t t i n g e r v . Pappin ( 1 9 7 8 ) , - Mont. -, 588

P.2d 9 8 8 , 35 S t . R e p . 1956.

Two o f t h e a b o v e c a s e s r e l i e d upon by t h e a p p e l l a n t ,
Van E t t i n g e r , s u p r a , and Denny, supra, are not controlling.

Van E t t i n g e r establishes nine criteria necessary to show

fraud, and failure t o e s t a b l i s h any one of these elements

will result in dismissal. One of these elements is the

h e a r e r ' s r e l i a n c e on t h e r e p r e s e n t a t i o n . The r e c o r d is b a r e

of any evidence of reliance on the part of Lycurgus on

s t a t e m e n t s made t o him.

In Denny, supra, involving vendors, a real estate

b r o k e r and a p u r c h a s e r o f a r e s i d e n c e , t h i s Court held t h a t

the vendors who accepted cash as an assignment of the

p u r c h a s e r ' s i n t e r e s t i n a n o t e i n escrow f o r t h e i r e q u i t y i n

the r e s i d e n c e were n o t entitled to recover from the pur-

c h a s e r and t h e r e a l e s t a t e b r o k e r f o r f r a u d b e c a u s e v e n d o r s

received o n l y two m o n t h l y payments on t h e n o t e i n escrow.

T h i s C o u r t h e l d where t h e r e was no p r o o f t h a t t h e n o t e was

valueless, t h e y had n o t b e e n damaged. Here, as i n Denny,

t h e a p p e l l a n t g o t what h e b a r g a i n e d f o r when h e d e e d e d b a c k

h i s i n t e r e s t upon l e a v i n g t h e r a n c h o p e r a t i o n .

Appellant h a s contended that the t r i a l court is i n

error for not declaring the 1968 and 1977 d e e d s invalid.

The appellant argues that the confidential relationship,

undue i n f l u e n c e , f r a u d , l a c k o f c o n s i d e r a t i o n , n e c e s s i t y f o r

rescission, and n o n a p p l i c a b i l i t y of t h e s t a t u t e of limita-

tions are readily apparent and can be gleaned from the

evidence presented a t t r i a l .

It is important at the outset of this opinion to

reiterate the law concerning the scope of this Court's

review of the findings and conclusions of a trial court

s i t t i n g without a jury. I n Cameron v . Cameron ( 1 9 7 8 ) , 179

Mont. 219, 587 P.2d 9 3 9 , when r e v i e w i n g t h i s a r e a o f l a w , we
stated:

" ' T h i s C o u r t ' s f u n c t i o n i n reviewing f i n d i n g s
of f a c t i n a c i v i l a c t i o n t r i e d by t h e d i s -
t r i c t c o u r t without a jury is n o t t o s u b s t i -
t u t e i t s judgment i n p l a c e of t h a t of t h e
t r i e r of f a c t s b u t r a t h e r i t i s " c o n f i n e d t o
determining whether t h e r e is s u b s t a n t i a l
c r e d i b l e evidence t o support" t h e f i n d i n g s of
f a c t and c o n c l u s i o n s o f law. Hornung v .
E s t a t e o f L a g e r q u i s t , 1 5 5 Mont. 413, 420, 473
P.2d 541, 5 4 6 , ' O l s o n v. W e s t f o r k P r o p e r t i e s ,
I n c . ( 1 9 7 6 ) , 1 7 1 Mont. 1 5 4 , 557 P.2d 8 2 1 ,
8 2 3 , 33 S t . R e p . 1133.

"A1 t h o u g h c o n f l i c t s may e x i s t i n t h e e v i d e n c e
p r e s e n t e d , i t is t h e d u t y of t h e t r i a l judge
t o r e s o l v e such c o n f l i c t s . H i s findings w i l l
n o t be d i s t u r b e d on a p p e a l where t h e y a r e
b a s e d on s u b s t a n t i a l t h o u g h c o n f l i c t i n g
e v i d e n c e , u n l e s s t h e r e is a c l e a r p r e p o n d e r -
a n c e of e v i d e n c e a g a i n s t s u c h f i n d i n g s .
[Citations omitted,]

" I n determining whether t h e t r i a l c o u r t ' s
findings are supported by substantial
evidence, t h i s Court m u s t view t h e evidence
i n t h e l i g h t most f a v o r a b l e t o t h e p r e v a i l i n g
party. H e l l i c k s o n v. B a r r e t t M o b i l e Home
T r a n s p o r t , I n c . ( 1 9 7 3 ) , 1 6 1 Mont. 455, 507
P , 2 d 5 2 3 , 5 2 5 ; W e s t f- - o p e r t i e s , I n c . ,
o r -P r
k
supra. ' S u b s t a n t i a l evidence' is evidence
s u c h ' a s w i l l c o n v i n c e r e a s o n a b l e men and on
which s u c h men may n o t r e a s o n a b l y d i f f e r a s
t o whether it e s t a b l i s h e s t h e [ p r e v a i l i n g
p a r t y ' s ] c a s e , a n d , i f a l l r e a s o n a b l e men
must c o n c l u d e t h a t t h e e v i d e n c e d o e s n o t
e s t a b l i s h such c a s e , then i t is n o t substan-
t i a l evidence.' Morton v. Mooney ( 1 9 3 4 ) , 97
Mont. 1, 33 P,2d 262, 265; S t a g g e r s v . USF&G
( 1 9 7 2 ) , 159 Mont. 254, 496 P.2d 1 1 6 1 , 1163.
The e v i d e n c e may be i n h e r e n t l y weak and s t i l l
b e deemed ' s u b s t a n t i a l ' and s u b s t a n t i a l
e v i d e n c e may c o n £ l i c t w i t h o t h e r e v i d e n c e
p r e s e n t e d , Campeau v . Lewis ( 1 9 6 5 ) , 1 4 4 Mont.
543, 398 P.2d 960, 9 6 2 , " 587 P.2d a t 944-945,

The i s s u e s i n Cameron, supra, a l s o d e a l t with fraud

and undue i n f l u e n c e . H e r e , a s i n Cameron, t h e t r i a l c o u r t ' s

d e c i s i o n was b a s e d upon t h e j u d g e ' s r e s o l u t i o n of c o n f l i c t -

ing testimony. W h e l d i n Cameron:
e
"Much o f the evidence presented a t t r i a l ,
.. - - - - -
-i c-t -h e t- r i a -
w h-h- - - - - - -- l i u -d a e c o n s i d e r e d i n making
2 - - a -

h i s f i n d i n g s a n d c o n c l u s i o n s , -n s i s t e d o i
c o- -
w i t n e s s e s ' testimonv. The c r e d i b i l i t y o f
s u c h w i t n e s s e s is of prime i m p o r t a n c e i n t h i s
 appeal. ' T h e c r e d i b i l i t y a -- w e i g h t g-e n
nd i v-
t h e w i t n e s s e s , however, is n o t f o r t h i s C o u r t
t o determine. This is a primary f u n c t i o n o f
a- - -i- l j u d g e s i t t i n g w i t h o u t a j u r y ; i t i s
-- t- - a
r
o f s p e c i a l c o n s e q u e n c e where t h e e v i d e n c e i s
conflicting.~omitted.)'llick-
son, supra.

". . . W w i l l n o t s u b s t i t u t e o u r judgment
e
f o r t h a t of t h e t r i e r o f f a c t , b u t r a t h e r
w i l l only consider whether substantial
c r e d i b l e e v i d e n c e s u p p o r t s t h e f i n d i n g s and
conclusions. Those f i n d i n g s w i l l n o t be
o v e r t u r n e d by t h i s C o u r t u n l e s s t h e r e i s a
c l e a r p r e p o n d e r a n c e o f e v i d e n c e a g a i n s t them.
W w i l l view t h e e v i d e n c e i n a l i g h t most
e
favorable t o the p r e v a i l i n g p a r t y , recogniz-
i n g t h a t s u b s t a n t i a l e v i d e n c e may be weak o r
c o n f l i c t i n g with o t h e r evidence, y e t s t i l l
support the findings. F i n a l l y , w h e r e t h-
e
c r e d i b i l i t y of-witnesses is of prime
i m p o r t -c e , a s i t i s h e r e , t h e d e t e r m i n a t i o n
a n-
of t h e weight given t o t h e t e s t i m o n y i s t h e
primary function of t h e t r i a l j u d g e s i t t i n g
w i t h o u t a j u r y and n o t t h a t o f t h i s C o u r t . "
587 P.2d a t 945. (Emphasis added.)

Applying t h e r u l e s of r e v i e w s e t o u t i n Cameron, we

c o n c l u d e t h a t t h e f i n d i n g s and c o n c l u s i o n s were s u p p o r t e d by

substantial credible evidence and the trial court was

c o r r e c t i n i t s judgment.

Appellant argues that a con£i d e n t i a l relationsl~ip

e x i s t e d between h i m s e l f and h i s f a m i l y and t h a t a s a r e s u l t

of t h i s relationship, he was o v e r t l y susceptible to their

i n £1u e n c e s . He further maintains that because of this

relationship, he failed to seek independent advice before

signing t h e deeds.

The trial court's findings fail to support this

contention. The record reveals that the appellant had

n o t h i n g more, or l e s s , t h a n a normal familial relationship

w i t h t h e o t h e r members o f h i s f a m i l y . The l a w i s c l e a r w i t h

respect to what constitutes a "con£i d e n t i a l relationship''

t h a t may a f f e c t t h e v a l i d i t y of a d e e d . I t is s t a t e d a t 26

C.J.S. Deeds, s e c t i o n 58 a t 751-752:
 "On t h e o t h e r h a n d , t h e b a r e e x i s t e n c e o f a
con£i d e n t i a l r e l a t i o n between g r a n t o r and
g r a n t e e does not, standing a l o n e , r a i s e a
p r e s u m p t i o n o f f r a u d , a d e e d w i l l n o t be s e t
a s i d e m e r e l y b e c a u s e g r a n t o r and g r a n t e e
s u s t a i n e d a c o n f i d e n t i a l r e l a t i o n s h i p where
t h e e v i d e n c e shows no a b u s e o f c o n f i d e n c e ;
and t h e mere f a c t t h a t t h e g r a n t o r l a t e r
c h a n g e d h i s mind w i l l n o t j u s t i f y a c o u r t i n
undoing t h e g r a n t . Mere e x p r e s s i o n o f
c o n f i d e n c e by t h e g r a n t o r i n t h e g r a n t e e d o e s
not create a confidential relationship . . ."
Further, independent advise is n o t a prerequisite to the

v a l i d i t y of a d e e d . 26 C.J.S. D e e d s , s e c t i o n 58 a t 752-753.

Appellant has also contended that the evidence

s u p p o r t s a c l e a r c a s e o f undue i n f l u e n c e . He c i t e s s e c t i o n

28-2-407, MCA, and Cameron v. Cameron, supra, to support

t h i s c o n t e n t i o n and a l l e g e s t h a t t h e t e s t f o r undue i n f l u -

e n c e h a s been c o m p l e t e l y s a t i s f i e d by t h e f a c t s .

Again, the trial court failed to agree and stated

t h a t t h e r e was no e v i d e n c e t o s u p p o r t t h i s c o n t e n t i o n . We

agree. The t e s t o f what undue i n f l u e n c e i s t h a t i s r e q u i r e d

t o s e t a s i d e a c o n v e y a n c e i s s e t f o r t h i n s e c t i o n 28-2-407,

MCA, which p r o v i d e s :

"What c o n s t i t u t e s u n d u e - i n £ l u e n c e .
- Undue
influence consists in:

" ( 1 ) t h e u s e by o n e i n whom a c o n f i d e n c e i s
r e p o s e d by a n o t h e r o r who h o l d s a r e a l o r
a p p a r e n t a u t h o r i t y o v e r him o f s u c h c o n f i -
dence o r a u t h o r i t y f o r t h e purpose of
o b t a i n i n g a n u n f a i r a d v a n t a g e o v e r him;

" ( 2 ) t a k i n g an u n f a i r a d v a n t a g e of a n o t h e r ' s
w e a k n e s s o f mind;

" ( 3 ) t a k i n g a g r o s s l y o p p r e s s i v e and u n f a i r
advantage of another's necessities or
distress."

See, Blackmer: The P r e s u m p t i o n o f Undue I n f l u e n c e i n

Montana, 37 Mont. L.Rev. 250 ( 1 9 7 6 ) ; O r t o n v. Gray ( 1 9 7 0 ) ,
285 A l a . 270, 231 So.2d 305; Thomas v . Seaman ( 1 9 7 3 ) , 457

Pa. 347, 304 A.2d 134.
 The facts of this case do not indicate over the

period here i n v o l v e d a n i n t e n t b y a n y member o f the family

t o take advantage of appellant.

The n e x t a r y u m e n t made b y a p p e l l a n t i s t h a t t h e f a c t s

presented i n t h e record support a c l e a r case of fraud. He

contends t h a t s e c t i o n 28-2-405, MCA, applies and that the

f a c t s s a t i s f y t h e n i n e p a r t t e s t s e t o u t i n Van E t t i n g e r v .

Pappin, supra. Further, appellant argues that if actual

fraud was not established by the facts, then constructive

f r a u d , a s d e f i n e d by s e c t i o n 28-2-406, MCA, is p r e s e n t ,

A necessary part of appellant's contention as to

whether fraud is p r e s e n t should include a d i s c u s s i o n of the

applicability of the statute of limitations on fraud,

s e c t i o n 27-2-203, MCA. The trial court concluded, a n d we

agree, t h a t s e c t i o n 27-2-203, MCA, a s applied here, bars the

appellant from even bringing a claim as to fraud with

respect t o t h e 1968 q u i t c l a i m deed, A s t h i s Court held in

I s r a e l s o n v . M o u n t a i n T r a c t o r s Co. ( 1 9 7 0 ) , 1 5 5 Mont. 6 9 , 467

". . . t h e c l a i m a r i s e s upon t h e o c c u r r e n c e
o f t h e f r a u d a n d n o t upon d i s c o v e r y w i t h t h e
e x c e p t i o n o f t h e p e r s o n who c a n show t h a t t h e
a c t o f f r a u d was c o m m i t t e d u n d e r s u c h c i r c u m -
s t a n c e s t h a t h e would n o t b e p r e s u m e d t o h a v e
Itnowledge o f them. However, under t h i s
e x c e p t i o n a n o b l i g a t i o n r e s t s upon t h e ag-
g r i e v e d p a r t y t o p r e s e n t f a c t s t o b r i n g him-
s e l f within the exception. He m u s t show some
a f f i r m a t i v e a c t o r r e p r e s e n t a t i o n , -o r i t s
----------- --
e q u i v a l e n t , d e s i g n e d t o prevent-and which d i d
p r e v e n t h e r e , d i s c o v e r y o f f a c t s b y him. T o o ,
h e m u s t show d i l i g e n c e . I ' 467 P.2d a t 1 5 2 .
( E m p h a s i s s u p p l i e d .)

As f o r t h e 1977 q u i t c l a i m d e e d , t h e evidence does n o t

support the appellant's contention. The a p p e l l a n t d i d n o t

s a t i s f y a l l n i n e p a r t s o f t h e t e s t s e t o u t i n Van E t t i n g e r ,

supra. The n i n e e l e m e n t s f r o m Van E t t i n g e r a r e a s f o l l o w s :
 "1. A representation;

"2. F a l s i t y of t h e r e p r e s e n t a t i o n ;

"3. Materiality of the representation;

"4. S p e a k e r ' s knowledge of t h e f a l s i t y o f
t h e representation o r ignorance of its t r u t h ;

"5. Speaker's intent it should be relied
upon;

"6. The h e a r e r ' s i g n o r a n c e o f t h e f a l s i t y o f
the representation;

"7. The h e a r e r ' s r e l i a n c e o n t h e r e p r e s e n t a -
tion;

"8. The h e a r e r ' s r i g h t t o r e l y o n t h e r e p r e -
s e n t a t i o n ; and

"9. Consequent and proximate i n j u r y caused
by t h e r e l i a n c e on t h e r e p r e s e n t a t i o n . " 588
P.2d a t 9 9 4 .

A s p r e v i o u s l y n o t e d a t t h e time o f the father's death

i n 1 9 7 3 , a l l o f t h e l a n d e x c e p t 2-1/2 percent of t h e s u r f a c e

r i g h t s h a d b e e n d i s t r i b u t e d t o t h e s o n s , G e r a l d 0. a n d M i k e ,

according to the previously set up estate plan. Regina

Turley, mother of the children, testified at length about

the ranch, the estate plan, the reasons for leaving the

property i n t h e manner i t was d o n e , and t h e problems that

resulted.

Mrs. T u r l e y , a t t h e t i m e s h e t e s t i f i e d , was a woman

of seventy-three years, who was c a u g h t i n a f a m i l y d i s p u t e

over property arrangements made some years before to

preserve t h e ranch. S h e t e s t i f i e d t h a t h e r h u s b a n d was t h e

d o m i n a t i n g member o f t h e f a m i l y o n b u s i n e s s m a t t e r s a n d t h a t

s h e went a l o n g w i t h him on d e c i s i o n s made t o p r e s e r v e t h e

ranch. S h e t e s t i f i e d s h e w e n t w i t h him t o s e e Mr. K i l b o u r n e

at the time the e s t a t e plan was s e t up a n d that s h e went

along with her husband's p l a n s t o g i v e t h e s u r f a c e r i g h t s of

t h e r a n c h t o t h e b o y s who s t a y e d o n t h e r a n c h . The t e s t i m o n y
indicates she agreed that the boys who worked the ranch

should b e n e f i t and t h a t when L y c u r g u s l e f t , s h e was a w a r e

t h a t h e r h u s b a n d went t o Two Dot t o g e t L y c u r g u s t o s i g n t h e

q u i t c l a i m of t h e i n t e r e s t g i v e n him when h e r e t u r n e d t o t h e

ranch f o r a s h o r t period. From h e r testimony, confused a s

i t was, i t c a n be s e e n t h a t t h e p r o b l e m o f who g o t t h e r a n c h

was a n u p s e t t i n g p r o b l e m i n t h e f a m i l y , b u t t h e r e c o r d f a i l s

to i n d i c a t e such i n f l u e n c e by t h e father or brothers that

warrants s e t t i n g a s i d e t h e deeds.

Here, the appellant failed t o prove t h a t any f r a u d

existed. First, i t is d o u b t f u l w h e t h e r the representation

made t o t h e a p p e l l a n t c o n c e r n i n g t h e n e c e s s i t y o f t h e s i g n a -

tures on the 1977 quitclaim deed was anything but good

business practice, much l e s s f a l s e . Second, the appellant

d i d n o t prove t h a t h i s b r o t h e r s , G e r a l d a n d Mike, nor h i s

mother, knew that the representations were anything but

true. Third, the appellant did not have to r e l y on the

i n f o r m a t i o n t h a t was g i v e n him. A s t h i s Court s t a t e d i n -
Van

E t t i n g e r , s u p r a , 588 P.2d a t 994:

" A p p e l l a n t s c o u l d n o t r e l y on t h e a l l e g e d
r e p r e s e n t a t i o n s of r e s p o n d e n t s a s a m a t t e r of
law. I n Lee v . S t o c k m e n ' s N a t i o n a l Bank
( 1 9 2 2 ) , 63 Mont, 262, 284, 207 P. 6 2 3 , 6 3 0 ,
i t was s t a t e d :

"'When i t a p p e a r s t h a t a p a r t y , who c l a i m s t o
h a v e been d e c e i v e d t o h i s p r e j u d i c e , - has
i n v e s t i g a t e d f o r h i m s e l- - r t h a t t h e means
f- o
were a t hand t o a s c e r t a i n t h e t r u t h ... of
a n y r e p r e s e n t a t i o n s made t o him, h i s r e l i a n c e
u p o n s u c h r e p r e s e n t a t i o n s made t o h i m ,
however f a l s e t h e y may h a v e b e e n , a f f o r d s no
ground of c o m p l a i n t . ( G r i n d r o d v , Anglo-
American Bond Co., 34 Mont. 1 6 9 , 85 P. 891;
Power & B r o t h e r s v . T u r n e r , 37 Mont. 521, 97
P. 950; 26 C . J . 1 1 4 9 . ) ' ( E m p h a s i s a d d e d . )

W n o t e t h a t t h e D i s t r i c t C o u r t d i d n o t make s p e c i f i c
e

f i n d i n g s on t h e i s s u e o f constructive fraud. Constructive
f r a u d i s d e f i n e d by s e c t i o n 28-2-406, MCA, a s follows:

"Constructive fraud consists in:

" ( 1 ) Any b r e a c h o f d u t y w h i c h , w i t h o u t a n y
actually fraudulent intent, gains an
a d v a n t a g e t o t h e p e r s o n i n f a u l t -or anyone
c l a i m i n g u n d e r him by m i s l e a d i n g a n o t h e r t o
t h i s p r e j u d i c e o r t o t h e p r e j u d i c e of anyone
c l a i m i n g u n d e r him; o r

" ( 2 ) Any s u c h a c t o r o m i s s i o n a s t h e l a w
e s p e c i a l l y d e c l a r e d t o be f r a u d u l e n t , w i t h o u t
respect t o a c t u a l fraud." (Emphasis added.)

The r e c o r d f a i l s t o s e t f o r t h a n y f a c t s showing t h a t

the a p p e l l a n t was m i s l e d by the respondents. The record

does not show any act on the part of the respondents

declared by law t o be fraudulent. We therefore conclude

t h a t t h e a p p e l l a n t has f a i l e d t o prove c o n s t r u c t i v e fraud.

The f a c t s and l a w do n o t s u p p o r t a p p e l l a n t ' s c o n t e n -

tion that there was no consideration for either deed.

S e c t i o n 70-1-502, MCA, provides: "A v o l u n t a r y t r a n s f e r is

an e x e c u t e d c o n t r a c t s u b j e c t t o a l l r u l e s o f law c o n c e r n i n g

contracts in general, except that a consideration is n o t

necessary to its validity." Also, at 13 Am.Jur.2d

C a n c e l l a t i o n o f I n s t r u m e n t s , s e c t i o n 2 5 a t 519-520, we f i n d :

"The r u l e i s c l e a r t h a t i n a d e q u a c y o f c o n s i d e r a t i o n i s n o t ,

in itself, a sufficient ground for cancellation of any

agreement o r i n s t r u m e n t , i n c l u d i n g a deed."

From t h e f a c t s we f i n d t h a t c o n s i d e r a t i o n was i n d e e d

present. The appellant's brothers agreed to hold him

harmless on the promissory note from P r u d e n t i a l Insurance

Company i f h e s i g n e d t h e q u i t c l a i m d e e d . The f a c t t h a t t k e

appellant's name was m i s t a k e n l y n o t taken off the note is

i r r e l e v a n t i n l i g h t o f t h e h o l d h a r m l e s s c l a u s e o f t h e 1968

q u i t c l a i m d e e d and t h e f a c t t h a t a p p e l l a n t was n e v e r a s k e d

t o pay on the note. As f o r t h e 1977 q u i t c l a i m deed, the
a p p e l l a n t r e c e i v e d a $ 2 , 5 0 0 down payment froin h i s b r o t h e r s

who p r o m i s e d t o pay an a d d i t i o n a l $7,500 t o a p p e l l a n t when

their mother dies. The respondents have been paying the

premiums on a life insurance policy that is in their

m o t h e r ' s name. The p r o c e e d s of t h e p o l i c y w i l l p a s s t o t h e

a p p e l l a n t and h i s s i b l i n g s , other t h a n G e r a l d and Mike, in

r e t u r n f o r t h e s i g n a t u r e on t h e 1977 q u i t c l a i m d e e d .

Appellant's contention that both quitclaim deeds

should be rescinded because they come under section 28-2-

1711, MCA, is u n f o u n d e d . The c i t e d s e c t i o n is n o t a p p l i -

c a b l e t o t h e f a c t s of t h i s c a s e . F i r s t , o u r s t a t u t e s do n o t

r e q u i r e c o n s i d e r a t i o n f o r t h e t r a n s f e r of p r o p e r t y . Section

70-1-502, MCA, voluntary transfer--applicability of

contract, rules:

"A v o l u n t a r y t r a n s f e r i s an executed c o n t r a c t
s u b j e c t t o a l l r u l e s o f law c o n c e r n i n g con-
t r a c t s i n general, except t h a t consideration
is n o t n e c e s s a r y t o i t s v a l i d i t y . "

In addition, h e r e e v i d e n c e c l e a r l y showed a p p e l l a n t

was t o be i n d e m n i f i e d f o r s i g n i n g and t h a t would be s u f f i -

c i e n t consideration.

Appellant's f i n a l contention is t h a t h i s action a s t o

the 1968 q u i t c l a i m deed is not barred by the statute of

limitations. Again, this assertion is not supported by

either the f a c t s or law. Both p a r t i e s a g r e e d t h a t s e c t i o n

27-2-203, MCA, i s c o n t r o l l i n g on t h i s p o i n t . S e c t i o n 27-2-

203, MCA, provides:

" - t i- s f o - - - l i e f o n g r o u n d o f f r a u d o r
A c o n- r- -e
- r
mistake. The p e r i o d p r e s c r i b e d f o r t h e com-
mencement o f a n a c t i o n f o r r e l i e f on t h e
ground of f r a u d o r m i s t a k e is w i t h i n 2 y e a r s ,
t h e c a u s e o f a c t i o n i n s u c h c a s e n o t t o be
deemed t o h a v e a c c r u e d u n t i l t h e d i s c o v e r y by
t h e aggrieved p a r t y of t h e f a c t s c o n s t i t u t i n g
the fraud or mistake."
The c a s e l a w i n t e r p r e t i n g when t h e s t a t u t e of limitations
b e g i n s t o run is q u i t e c l e a r l y i n f a v o r of t h e r e s p o n d e n t s .
I n I s r a e l s o n v. Mountain T r a c t o r s Co., s u p r a , we h e l d t h a t
s t a t u t e begins to r u n when t h e f r a u d o c c u r s and t h e o n l y
exception to this is if t h e r e was an affirmative act to

p r e v e n t a p e r s o n from d i s c o v e r i n g t h e f r a u d . This Court i n
I s r a e l s o n , s u p r a , c i t e d K e r r i g a n v . O'Meara ( 1 9 2 4 ) , 7 1 Mont,

1, 227 P. 8 1 9 , which c o n t a i n s t h e f o l l o w i n g l a n g u a g e :
" T h e r e m u s t be some a c t i v e a f f i r m a t i v e con-
cealment of t h e f r a u d , something s a i d o r done
t o continue the deception or t o prevent
i n q u i r y and l u l l t h e p l a i n t i f f i n t o a s e n s e
of s e c u r i t y , i n o r d e r t o postpone t h e running
of t h e s t a t u t e . ..
"As a g e n e r a l r u l e , t h e s t a t u t e of l i m i t a -
t i o n s b e g i n s t o r u n from t h e t i m e t h e r i g h t
o f a c t i o n a c c r u e s , and n o t when t h e p l a i n t i f f
who i s i g n o r a n t b e f o r e comes t o a knowledge
of h i s r i g h t s ...
"Now t h e word ' d i s c o v e r y ' a s used i m p l i e s
t h a t t h e f a c t s h a v e been c o n c e a l e d from t h e
p a r t y r e l y i n g upon t h e e x c e p t i o n . ' D i s c o v e r y '
and ' k n o w l e d g e ' a r e n o t c o n v e r t i b l e t e r m s ,
and w h e t h e r t h e r e h a s been a d i s c o v e r y o f t h e
fac ts constituting the fraud within the
meaning o f t h e s t a t u t e i s a q u e s t i o n o f l a w
t o be d e t e r m i n e d from t h e f a c t s p r o v e d . It
i s n o t enough f o r t h e p l a i n t i f f m e r e l y t o s a y
h e was i g n o r a n t o f t h e f a c t s a t t h e time o f
t h e i r o c c u r r e n c e , a n d h a s n o t come i n t o
knowledge o f them u n t i l w i t h i n two y e a r s . He
m u s t show t h a t t h e a c t s o f f r a u d w e r e
committed under such c i r c u m s t a n c e s t h a t he
would n o t b e presumed t o h a v e knowledge o f
t h e m , i t b e i n g t h e r u l e t h a t - h-h a s i f -e -
' n o t i c e o f i n f o r m a t i o n o f c i r c u m s t a n c e s which
- o -l - p u t h i m -n i n q u i r y w h i c h -f f o l l o w e d
w--
-u d o- i-
would -e- - - - k n o w l e d g e , o r t h a t t h e f a c t s
l - a d- -o
- t -
- e -e p r e s u m p t i v e l y w i t h i n h i s knowledge, h e
w -r -
-
w i l l b e deemed t o h a v e --- a c t u a l k n o w l e d g e
had
of t h e f a c t s .

"The f a c t t h a t a p e r s o n e n t i t l e d t o a n a c t i o n
h a s no knowledge o f h i s r i g h t t o s u e , o r o f
t h e f a c t s o u t o f which h i s r i g h t a r i s e s , d o e s
n o t , a s a g e n e r a l r u l e , prevent t h e running
o f t h e s t a t u t e , o r p o s t p o n e t h e commencement
of t h e p e r i o d of l i m i t a t i o n , u n t i l he
 d i s c o v e r s t h e f a c t s o r l e a r n s of h i s r i g h t
thereunder. Nor d o e s t h e m e r e s i l e n c e o f t h e
person l i a b l e t o the action prevent the
running of t h e s t a t u t e . To h a v e s u c h e f f e c t ,
t h e r e must be something done t o p r e v e n t
discovery--something which c a n be s a i d t o
amount t o concealment ...
" I g n o r a n c e o f r i g h t , t h e r e b e i n g no more t h a n
mere p a s s i v e n e s s , mere s i l e n c e , on t h e p a r t
of h i s a d v e r s a r y , c a n n o t be e n g r a f t e d a s an
e x c e p t i o n on t h e s t a t u t e of l i m i t a t i o n s ,
w i t h o u t a d e s t r u c t i o n of its w i s e p o l i c y , and
w i t h o u t a n encouragement o f mere n e g l i g e n c e .
[ C i t a t i o n s o m i t t e d ; e m p h a s i s s u p p l i e d . ] " 227
P. a t 821.

Appellant did not bring this claim until ten years

a f t e r t h e 1 9 6 8 q u i t c l a i m d e e d was s i g n e d . The t e s t i m o n y d i d

n o t r e v e a l a n a f f i r m a t i v e a c t on t h e p a r t o f respondents o r

a n y member o f appellant's family. Clearly, t h e law cannot

b e s t r e t c h e d t o accommodate a p a r t y who s i t s o n h i s r i g h t s

for so long. The d o c t r i n e o f l a c h e s would b a r t h e appel-

l a n t ' s c l a i m i f t h e r e was a n y d o u b t a s t o t h e a p p l i c a b i l i t y

o f s e c t i o n 27-2-203, MCA.

I n summary, t h i s c a s e c a n b e q u i t e e a s i l y c a p s u l i z e d .

It is apparent from the testimony that the appellant was

aware of the original purpose behind the quitclaim deeds.

He knew that his father's plan was to give the ranch to

t h o s e members o f t h e f a m i l y who c h o s e t o s t a y a n d work on

t h e ranch. The r e s p o n d e n t s h a v e w o r k e d t h e r a n c h f o r t h e i r

entire lives; the a p p e l l a n t was there approximately three

years.

The j u d g m e n t i s a f f i r m e d .
We concur:

Judge, sitting in place of Mr.
Justice John C. Sheehy

Mr. Justice Frank B. Morrison, Jr., dissenting:
I respectfully dissent.

The majority opinion correctly notes that appellant relies
upon the existence of a confidential relationship routed in
family as a basis for constructive fraud allegations. The crux
of this argument is that appellant, because of his weak physical
and mental condition, was dependent for financial advice upon
his father and brothers. If appellant indeed were found to
have reposed special trust and confidence in defendant3,a breach
of such trust could form the basis for constructive fraud relief.

The majority states "The trial court's findings fail to
support this contention." However, the trial court made no
findings with respect to constructive fraud. Therefore, I would
remand this case to the District Court with directions to make
findings.