No. 86-396
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
JOHN A. STARK and NADINE A. STARK,
husband and wife,
Plaintiffs and Respondents,
-vs-
MAYNARD BORNER and OPAL BORNER,
husband and wife,
Defendants and Appellants,
APPEAL FROM: District Court of the Tenth Judicial District,
In and for the County of Fergus,
The Honorable Peter Rapkoch, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Maynard and Opal Borner, pro se, Grass Range,
Montana
For Respondents:
Calton, Hamman, Calton & Wolff; Rodd A. Hamman,
Billings, Montana
Submitted on Briefs: Feb. 19, 1987
Decided: A p r i l 9, 1987
APRlr.. ,.j
Filed:
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
Maynard and Opal Borner, husband and wife, appeal an
August 12, 1986 preliminary injunction issued by the District
Court of the Tenth Judicial District, Fergus County. We
uphold the District Court's preliminary injunction, but
remand so that the court may conduct a hearing to consider
whether its findings were proper in light of Sharbono v.
,
Darden (Mont. 1986), - P.2d - 43 St.Rep. 400 and other
cases cited herein.
Maynard and Opal Borner entered a contract for deed in
November, 1983, for the purchase of a 3,700 acre cattle ranch
near Grass Range, Montana, from John and Nadine Stark. The
purchase price for the place was $525,000. The Borners paid
approximately $107,000 down on the contract and agreed to an
annual payment of almost $40,000 until the full amount was
paid. Annual payments were made in 1984 and 1985, but the
Rorner's were unable to meet the obligation of the 1986
payment when it came due in January.
On January 23, 1986, the Starks sent the Borners a
notice of default. When the Borners failed to cure the
default within sixty (60) days, the Starks sent a notice of
acceleration on March 26, 1986. The second sixty days
expired May 26, 1986. In June, the Starks began moving their
cattle onto the property, as well as cutting and baling the
hay.
Although the parties discussed a rental arrangement and
renegotiation of a new contract, no agreement was ever
reached. The Borners had written a $1,000 check for pasture
lease, but stopped payment on it when their attorney advised
them that the Starks had no authority to be in possession.
On July 9, 1986, the Starks filed a complaint requesting
that they be put in possession of the property, as well as
that the Borners be enjoined from interfering with Stark's
possession, that the contract for deed be forfeited and that
the Borner's right, title, and interest in the property he
terminated. The Starks also requested attorney's fees.
After an August 12, 1986 hearing, the District Court
made the following findings: 1) that the Borners had not
made the land contract payment due Starks, 2) that all
contract terms had been complied with by Starks, 3) and
that the Starks had demonstrated a strong chance of
prevailing on the merits of the suit. For these and other
reasons, the District Court found that injunctive relief
restraining the Borners from interfering with the Stark's
repossession of the property was appropriate and ordered the
Borners to vacate the ranch by September 6, 1986.
On September 5, 1986, the Borners filed an emergency
application to this Court for a stay of the District Court's
order granting the preliminary injunction giving possession
of the ranch premises to the Starks. This Court denied the
Borners' request, explaining that the questions and evidence
presented by the Borners were considered and denied by the
District Court and that the Borners failed to show a case for
their emergency application.
The Borners now appeal, pro set raising the following
issues:
1. Whether the District Court was required to make a
finding that the Starks would be irreparably harmed in order
to issue the injunction.
2. Whether the District Court erred in choosing not to
require a written undertaking.
3. Whether the District Court erred in finding that the
Borners defaulted under the terms of the contract for deed.
4. Whether the District Court is properly providing the
due process required for mortgage foreclosures.
The issues raised by the Borners are properly raised on
appeal. Rule 1 (b)(2) of the Montana Rules of Appellate Civil
Procedure provides:
(b) In civil cases a party aggrieved may appeal
from a judgment or order, except when expressly
made final by law, in the following cases:
(2) from an order
injunction.
. . . granting or dissolving an
The statute could not be clearer in providing for the
Rorners' right to appeal the District Court's issuance of the
preliminary injunction.
As the Borners are representing themselves in this
appeal it is understandable that they are unfamiliar with the
laws concerning preliminary injunctions. Borners first
contend that the District Court should not have granted the
preliminary injunction because it fail-ed to make a finding
that the Starks would suffer irreparable injury if the
injunction was not issued.
Section 27-19-201, MCA, provides that a preliminary
injunction order may be granted in the following cases:
(1) when it shall appear that the applicant is
entitled to the relief demanded and such relief or
any part thereof consists in restraining the
commission or continuance of the act complained of,
either for a limited period or perpetually;
(2) when it shall appear that the commission or
continuance of some act during the litigation would
produce a great or irreparable injury to the
applicant;
( 3 ) when it shall appear during the litigation
that the adverse party is doing or threatens or is
about to do or is procuring or suffering to be done
some act in violation of the applicant's rights,
respecting the subject of the action, and tending
to render the judgment ineffectual;
(4) when it appears that the adverse party, during
the pendency of the action, threatens or is about
to remove or to dispose of this property with
intent to defraud the applicant, an injunction
order may be granted to restrain the removal or
disposition;
(5) when it appears the applicant has suffered or
may suffer physical abuse under the provisions of
40-4-121.
The District Court's order granting the preliminary
injunction stated:
That it thus appears to the court that plaintiffs
Stark have demonstrated a strong chance of
prevailing on the merits herein, which under the
contract includes right to possession, and that
defendants should be temporarily restrained from
interfering with that possession during the
pendency of the suit.
That it further appears defendants may be unable to
respond in damages if plaintiffs prevail herein,
which would render any substantial damage award
plaintiffs may recover ineffectual and
unrecoverable, and further that Starks' damages
from Borners continued possession of the lands
while suit is pending would be quite difficult or
impossible to accurately determine.
It is apparent that the District Court granted the
preliminary injunction pursuant to S 2 7 - 1 9 - 2 0 1 ( 1 ) and ( 3 ) .
Findings that satisfy the elements of subparagraph ( 2 ) are
not also required.
The subsections are disjunctive, meaning that findings
that satisfy one subsection are sufficient. All five
subsections need not be satisfied for an injunction to issue.
The District Court properly granted injunctive relief
pursuant to S 2 7 - 1 9 - 2 0 1 ( 1 ) and ( 3 ) .
Borners next contend that the injunction is void because
the District Court did not require Starks to post a written
undertaking. Montana's law regarding requirements of
security for damages on granting an injunction is set out in
$ 27-19-306(1), MCA, which states:
27-19-306. Security for damages. (1) On granting
an injunction or restraining order, the court or
judge shall require a written undertaking to be
given by the applicant, in such sum as the court
considers proper, for the payment of such costs and
damages as may be incurred or suffered by any party
who is found to have been wrongfully enjoined or
restrained. The undertaking may not be required in
domestic disputes or when the state or a state
agency, a county or subdivision thereof, or a
municipal corporation is the party seeking the
injunction or restraining order. - any - -
In case, the
court - - discretion may waive the undertaking
in its
- - interest - justice. (Emphasis supplied.)
in the of
The District Court may, in its discretion, waive the
undertaking in the interest of justice. Although the
District Court did not require a bond from the Starks, it
protected the Borners' interest by ordering the Starks to
refrain from selling or encumbering the property (other than
by a lease for less than a year); by ordering that the hay
which had been cut, baled and stacked could not be sold or
used by either party without court order or written agreement
between the parties; and by ordering that the Borners cou1.d
cut and sell the barley crop they had planted on 85 acres of
the property. As we find no abuse of discretion, we uphold
the District Court's conclusions.
The Borners third argument is that the District Court
granted the preliminary injunction before a finding was made
that Borners were in default under their contract. This is
not the case. The District Court found that Borners were in
breach and that Starks had complied with the terms of the
contract in declaring a default:
That the evidence clearly established that
defendants Borner had not made the land contract
payment due plaintiffs January 2, 1986, that
plaintiffs have complied with the unambiguous terms
of said contract in giving defedants written notice
of default and also notice of acceleration of the
contract balance, that defendants have not tendered
the full principal and interest due and are in
breach of their contract of purchase of the
premises involved.
There is no indication in these findings or in the
arguments made by the Borners that the District Court abused
its discretion or had insufficient evidence to conclude that
the Borners were in default. The District Court's order
granting preliminary injunction was proper.
The final assertion made by Borners is that the District
Court improperly "ousted" them from the property because it
did not provide them the due process required for mortgage
foreclosures. They argue that the Starks have not proven in
court that forfeiture is Stark's proper remedy, and that
they, Borners, have not been given full opportunity to
present the merits of their case.
The District Court's issuance of the preliminary
injunction was not a final adjudication. The injunction was
used as an interlocutory procedural device to protect the
subject of the controversy until a final determination could
be reached. by the court. The Borners' due process
protections have not been violated insofar as the grant of
the preliminary injunction is concerned.
This Court is concerned, however, about the lack of any
findings regarding the sellers' ability to convey title after
they accelerated payment. The established rule of law is
that a vendor cannot, while unable to tender good title,
enforce a forfeiture provision of a contract on default of
the vendee. Silfvast v. Asplund (1933), 93 Mont. 584, 20
P.2d 631. Wells Fargo and Company v. Page (Or. 1905), 82 P.
856; Sievers v. Brown (Or. 1899), 56 P. 171.
... the mere failure of the purchasers to make
the deferred payments did not ipso facto entail a
forfeiture of their rights under the contract, and,
when the vendor elected to give the notice which
would effect that result, the forfeiture could only
be declared if, at the time she demanded final
payment, she could convey marketable title.
(Citations omitted. )
Silfvast v. Asplund, 93 Mont. at 595, 20 P.2d at 636.
This rule was enunciated most recently in Sharbono v.
Darden (Mont. 1986) , - P.2d - 43 St.Rep. 400, where we
,
agreed with the Fourth Judicial District's finding that the
vendee's "failure to make the balloon payment when due is
excused by Sharbono ' s [vendors] inability to convey title. "
Sharbono v. Darden, 43 St.Rep. at 404.
Therefore, this Court sustains the District Court's
issuance of the preliminary injunction pending the District
Court's determination or remand as to whether its findings
Q. u
were proper in light of the a b o v e A e d cast- - -
Justice
We Concur: - /