Martin v. Community Gas and Oil Co., Inc.

Xo. 83-73
IN THE SUPREME COURT OF THE STATE OF MONTANA
1983

HOMER V. MARTIN and LORETTA MARTIN,
d/b/a IURTIN REALTY,
Plaintiff and Appellants,

COIIIMUNITY GAS AND OIL COMPANY, INC.,
Defendant and Respondent.

APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Ravalli,
The Honorable James B. Wheelis, Judge presiding.

COUNSEL OF RECORD:
For Appellants:
Datsopoulos, MacDonald & Lind, Missoula, Montana

For Respondent:
Boone, Karlberg & Haddon, Missoula, Montana

- -

Submitted on Briefs: June 2, 1983
Decided: August 24, 1983

Filed: AUG 24 1983

Clerk
Mr. J u s t i c e L . C. G u l b r a n d s o n d e l i v e r e d t h e O p i n i o n of t h e C o u r t .

T h i s c a s e comes on a p p e a l from a summary judgment r e n d e r e d i n
the District Court of the Fourth Judicial District, Ravalli

County. The p e r t i n e n t p a r t i e s t o t h e a c t i o n a r e a p p e l l a n t M a r t i n

Realty ( M a r t i n ) and r e s p o n d e n t Community Gas and O i l Co., Inc.

(Community). For the reasons stated below, we affirm the
judgment of t h e D i s t r i c t C o u r t .

Martin arranged for the sale of a tract of land from
Community to the Life Evangelistic ~ssociation (Life

Evangelistic) for a price of $1,168,926. On O c t o b e r 6 , 1975,

Community and L i f e E v a n g e l i s t i c e n t e r e d i n t o a c o n t r a c t f o r deed

for the s a l e of the land. The contract for deed called for
a n n u a l payments a c c o r d i n g t o a p a r t i c u l a r s c h e d u l e . In addition,

the contract for deed contained a "deed release" provision
a l l o w i n g L i f e E v a n g e l i s t i c t o o b t a i n t r a c t s of t e n a c r e s o r more
upon t h e payment of $ 1 , 0 0 0 p e r a c r e . The deed r e l e a s e p r o v i s i o n

a l s o contained the following sentence:

" I t is s p e c i f i c a l l y u n d e r s t o o d and a g r e e d t h a t
a n y s u c h payment ( d e e d r e l e a s e ) made t o t h e
Escrow Agent s h a l l n o t r e l i e v e t h e Buyer of
t h e o b l i g a t i o n t o make t h e n e x t a n n u a l payment
on t h e p u r c h a s e and s a l e p r i c e and of i n t e r e s t
a s h e r e i n provided f o r ."
On O c t o b e r 8 , 1 9 7 5 , M a r t i n and Community e x e c u t e d a w r i t t e n
agreement, drafted by Community, which outlined the terms of
Martin's commission incident to the sale of land to Life

Evangelistic. B e c a u s e L i f e E v a n g e l i s t i c was u n a b l e t o make t h e
e n t i r e down payment from which M a r t i n ' s 6 p e r c e n t commission was
t o be p a i d , Martin agreed t o payment of t h e commission o v e r a
p e r i o d of t i m e . The a g r e e m e n t i n d i c a t e d t h a t r e c e i p t of t h e com-
m i s s i o n p a y m e n t s would o c c u r a s each payment u n d e r t h e c o n t r a c t
f o r deed was made by L i f e E v a n g e l i s t i c . In particular, t h e com-

mission contract stated:

" I t is s p e c i f i c a l l y u n d e r s t o o d t h a t Community
G a s w i l l n o t be r e s p o n s i b l e t o you f o r any of
t h e commission p a y m e n t s s p e c i f i e d above -l e s sun-
and u n t i l t h e Buyer makes t h e payment from
-- - -
which t h e commission payment i s t o be made."
( e m p h a s i s added )
 P u r s u a n t t o t h e s e two d o c u m e n t s , L i f e E v a n g e l i s t i c made its
f i r s t payment on t h e d a t e t h e c o n t r a c t f o r deed was s i g n e d and
M a r t i n r e c e i v e d t h e c o r r e s p o n d i n g c o m m i s s i o n payment. The n e x t
two p a y m e n t s w e r e made, a l t h o u g h n o t on t h e d a t e s s p e c i f i e d in
the contract for deed and t h e commission c o n t r a c t , and M a r t i n
received the corresponding commission payments. Community's

f i n a l payment t o M a r t i n was t o o c c u r on December 6 , 1 9 7 8 , upon
L i f e E v a n g e l i s t i c making a $ 1 1 0 , 0 0 0 p a y m e n t t o Community. Life
E v a n g e l i s t i c was u n a b l e t o make t h e December 6 p a y m e n t , although

i t d i d make p a y m e n t s for deed r e l e a s e s both p r i o r to and for
s e v e r a l months f o l l o w i n g t h e due d a t e .
On F e b r u a r y 1 5 , 1 9 7 9 , Community and L i f e E v a n g e l i s t i c e n t e r e d

i n t o a m o d i f i c a t i o n a g r e e m e n t e x t e n d i n g t h e t i m e f o r payment t o
J u l y 31, 1979. L i f e E v a n g e l i s t i c p a i d $ 2 5 , 0 0 0 a t e x e c u t i o n of

t h e a g r e e m e n t b u t f a i l e d t o make a payment due on A p r i l 1 5 , 1 9 7 9 .

A s a result, Community d e c l a r e d t h e c o n t r a c t f o r f e i t e d and c l o s e d
t h e escrow. On J u l y 11, 1 9 7 9 , t h e p a r t i e s made a n o t h e r a t t e m p t
at extending the due date. When L i f e Evangelistic missed a

payment u n d e r t h a t a g r e e m e n t , Community deemed money r e c e i v e d t o
b e " r e n t " and r e p o s s e s s e d t h e l a n d on A u g u s t 3 1 , 1 9 7 9 .
Martin brought t h i s a c t i o n i n District Court contending t h a t

i t was e n t i t l e d t o t h e l a s t commission payment b e c a u s e Community
actually received more money from L i f e Evangelistic than was

required to trigger the final payment under the commission

c o n t r a c t of O c t o b e r 8 , 1 9 7 5 . S p e c i f i c a l l y , Martin asserted t h a t
Community was o b l i g e d t o c o u n t t h e money p a i d f o r " r e n t " and deed
r e l e a s e s t o w a r d t h e $ 1 1 0 , 0 0 0 amount o r i g i n a l l y d u e on December 6 ,
1978, because at the time of execution of the commission
a g r e e m e n t t h e p a r t i e s d i d n o t i n t e n d t o e x c l u d e t h e s e amounts.
Community argued t h a t M a r t i n was p a i d e v e r y t h i n g due under

the commission agreement of October 8, 1975, because, by the
t e r m s of t h a t agreement, c o n d i t i o n s p r e c e d e n t t o t h e payment of
a n y a d d i t i o n a l c o m m i s s i o n were n o t met.

Before commencement of a jury trial, the court granted
Community's motion i n limine t o exclude a l l evidence a s to the
i n t e n t of t h e p a r t i e s t o t h e commission c o n t r a c t e x c e p t t h e com-

m i s s i o n c o n t r a c t i t s e l f and c o n t r a c t f o r d e e d . In addition, the

trial court concluded that although deed release payments for
l e s s t h a n t e n a c r e s a c c e p t e d b e f o r e d e f a u l t on t h e c o n t r a c t f o r

deed could be counted towards Life Evangelistic 's annual
payments, those amounts were substantially insufficient to
c o n s t i t u t e $ 1 1 0 , 0 0 0 and t h e r e b y t r i g g e r M a r t i n ' s l a s t c o m m i s s i o n
payment. A s a r e s u l t of these rulings, the t r i a l court granted
Community's m o t i o n f o r a summary j u d g m e n t .
M a r t i n now a s s e r t s t h a t t h e t r i a l c o u r t e r r e d i n i t s r u l i n g

t o e x c l u d e e x t r i n s i c e v i d e n c e of t h e i n t e n t of t h e p a r t i e s t o t h e
commission contract. Specifically, Martin contends that the
c o n t r a c t f o r deed and c o m m i s s i o n c o n t r a c t c a n n o t be r e a d t o g e t h e r
b e c a u s e i n o r d e r f o r two c o n t r a c t s t o be r e a d a s o n e , t h e p a r t i e s
m u s t be t h e same f o r b o t h . Thus, t h e o n l y agreement t h e t r i a l
c o u r t s h o u l d have c o n s i d e r e d is t h e commission agreement between

M a r t i n and Community which M a r t i n a r g u e s is ambiguous on i t s f a c e
b e c a u s e i t d o e s n o t i n d i c a t e w h e t h e r t h e p a r t i e s would c o n s i d e r
deed r e l e a s e payments o r r e n t towards a n n u a l payments under t h e

c o n t r a c t f o r deed. T h e r e f o r e , b e c a u s e of t h e a l l e g e d a m b i g u i t y ,

the t r i a l court erred i n d i s a l l o w i n g e x t r i n s i c e v i d e n c e of the
parties' intent at the time of entering into the commission

contract.
Generally, when a c o n t r a c t is reduced t o a w r i t i n g t h a t is
p l a i n and u n a m b i g u o u s , t h e i n t e n t of t h e p a r t i e s is t o be a s c e r -
tained from t h a t w r i t i n g alone i f possible. S e c t i o n 28-3-303,
MCA; Merritt v. Merritt ( 1 9 7 4 ) , 1 6 5 Mont. 172, 526 P.2d 1375.
Moreover, the parol evidence rule provides t h a t t h e terms of a
w r i t t e n c o n t r a c t c a n n o t be a l t e r e d o r c o n t r a d i c t e d by e x t r i n s i c
evidence s u b j e c t t o c e r t a i n recognized exceptions. A m b i g u i t y is

an exception t o the parol evidence rule. S e c t i o n 28-2-905, MCA;

P a y n e v. Buechler (1981), - Mont. ---- , 628 P.2d 646, 38

St.Rep. 799.
 The trial court examined the commission contract and the

c o n t r a c t f o r deed and d e t e r m i n e d t h e c o n t r a c t f o r c o m m i s s i o n of

O c t o b e r 8 , 1 9 7 5 , was n o t ambiguous. The c o n t r a c t s t a t e d :
" I t is s p e c i f i c a l l y u n d e r s t o o d t h a t Community
G a s w i l l n o t be r e s p o n s i b l e t o you f o r any of
t h e commission payments s p e c i f i e d above u n l e s s
and - t h e Buyer - - e p a y m e n t f r o m
-- until makes t h
w h i c h t h e c o m m i s s i o n Davment - - - -
.'C
i s t o b e made."
( e m p h a s i s added )

Clearly, the words of the agreement show t h a t it was the
i n t e n t of t h e p a r t i e s t h a t t h e c o m m i s s i o n p a y m e n t s be c o n t i n g e n t

upon p a y m e n t s owed u n d e r t h e c o n t r a c t f o r d e e d . The c o m m i s s i o n

contract cannot be construed otherwise. Payne v. Buechler,
supra. A m b i g u i t y o n l y e x i s t s when a c o n t r a c t t a k e n a s a whole i n
i t s w o r d i n g o r p h r a s e o l o g y i s r e a s o n a b l y s u b j e c t t o two d i f f e r e n t
interpretations. K e i s e r v. S t a t e Bd. of R e g e n t s of H i g h e r Educ.

(1981)I Mont . , 630 P.2d 1 9 4 , 38 S t . R e p . 674; W i l l i a m s
v . I n s . Co. o f N o r t h America ( 1 9 6 7 ) , 1 5 0 Mont. 2 9 2 , 434 P.2d 395.

Because the language of the commission c o n t r a c t was c l e a r and
unambiguous i t was the duty of the trial court to apply the

l a n g u a g e , a s w r i t t e n , t o t h e f a c t s of t h e c a s e and d e c i d e a c c o r d -
ingly. S e c t i o n 1-4-101, MCA; Kartes v. Kartes (1981),
Mont. , 636 P.2d 272, 38 S t . R e p . 1 9 4 1 ; D a n i e l s o n v. D a n i e l s o n
( 1 9 7 7 ) , 1 7 2 Mont. 5 5 , 560 P.2d 8 9 3 . T h u s , t h e t r i a l c o u r t by way

of Communityls motion i n limine, properly disallowed e x t r i n s i c

evidence of the parties' intent that would modify, alter, or
c o n t r a d i c t t h e t e r m s of t h e w r i t t e n c o m m i s s i o n c o n t r a c t .

M a r t i n a r g u e s f u r t h e r t h a t because t h e t r i a l c o u r t looked t o
t h e c o n t r a c t f o r deed i n making i t s d e c i s i o n , a d d i t i o n a l e v i d e n c e
of t h e p a r t i e s 1 i n t e n t s h o u l d have b e e n a l l o w e d . I n determining
t h e terms of a c o n t r a c t , h o w e v e r , t h e c o u r t was a l l o w e d t o r e f e r
t o t h e c i r c u m s t a n c e s u n d e r which i t was made and t h e m a t t e r t o
which it relates. Section 28-3-402, MCA; Mathis v. Daines

(1982)t Mont . , 639 P.2d 5 0 3 , 39 S t . R e p . 73. Application
of t h i s r u l e does n o t i p s o f a c t o open t h e door t o n o n a p p l i c a t i o n

of the par01 evidence r u l e . On t h e c o n t r a r y , it o n l y a i d s t h e

court in ascertaining whether there is an ambiguity in the
contract. The c o n t r a c t f o r deed i n p a r a g r a p h 1 6 r e l a t i n g t o deed

r e l e a s e payments s t a t e s , ". . . t h a t any s u c h payment made t o t h e
Escrow A g e n t s h a l l n o t relieve t h e Buyer of the obligation to

make t h e n e x t a n n u a l payment."
Once it was clear to the trial court that deed release
p a y m e n t s made u n d e r t h e c o n t r a c t f o r deed were n o t t o be c o u n t e d

toward t h e a n n u a l payments, i t p r o p e r l y c o n c l u d e d t h a t t h e com-
mission contract was not ambiguous and that it governed the

i n t e n t of the parties. Extrinsic e v i d e n c e c o u l d o n l y be con-

s i d e r e d i f t h e commission a g r e e m e n t h a d , on i t s f a c e , a p p e a r e d t o
b e ambiguous o r u n c e r t a i n . H i l l C a t t l e Corp. v .

79 Mont. 3 2 7 , 256 P. 497.

In addition, the appellant argues that the commission
a g r e e m e n t s c o u l d n o t have been c o n s i d e r e d a l o n g w i t h t h e c o n t r a c t
f o r deed b e c a u s e t h e p a r t i e s t o t h e two a g r e e m e n t s were n o t t h e

same. S e e 28-3-203, MCA. However, it was n o t t h e p u r p o s e of t h e
t r i a l c o u r t t o examine t h e c o n t r a c t f o r deed i n o r d e r t h a t i t be

taken together with the commission contract as a single

agreement. R a t h e r , t h e c o n t r a c t f o r deed was u t i l i z e d t o d e t e r -
mine if t h e commission c o n t r a c t was ambiguous, and 28-3-402, MCA,

p r o v i d e s t h a t a c o n t r a c t "may be e x p l a i n e d by r e f e r e n c e t o t h e

c i r c u m s t a n c e s u n d e r which i t was made and t h e m a t t e r t o which it
relates."

Although M a r t i n asserts t h a t t h e commission agreement s h o u l d
b e c o n s t r u e d most s t r o n g l y a g a i n s t Community, it h a s long been
held that to interpret the l a n g u a g e of a contract against the
draftor, the draftor m u s t c a u s e --- e u n c e r t a i n t y .
th Parkhill v.
Fuselier (1981), Mont. , 6 3 2 P.2d 1 1 3 2 , 38 S t . R e p . 1424;
G l a c i e r Campground v. Wild R i v e r s , Inc. ( 1 9 7 8 ) , 1 8 2 Mont. 389,
597 P.2d 689. I n t h e case a t b a r t h e t r i a l c o u r t p r o p e r l y h e l d

t h a t t h e commission c o n t r a c t l a c k e d any u n c e r t a i n t y .
I n h i s r e p l y b r i e f , Martin maintains t h a t , i n any e v e n t , t h e
commission agreement does not contain a valid condition

p r e c e d e n t a n d , t h e r e f o r e , payment of t h e commission m u s t be made.
M a r t i n a r g u e s t h a t t h e c o n t r a c t l a n g u a g e p r o v i d i n g t h a t Community
would not be responsible for making any commission payments
"unless and until the Buyer [Life Evangelistic] makes the

[ c o n t r a c t ] payment .. .I1 e s t a b l i s h e s o n l y a time f o r payment and
n o t a c o n d i t i o n p r e c e d e n t t o payment. A p p e l l a n t c i t e s a l i s t of
c a s e s from o t h e r j u r i s d i c t i o n s f o r t h e p r o p o s i t i o n t h a t t i m e con-

t i n g e n c i e s a l o n e w i l l n o t excuse payments. See, e.g., Mignot v .
P a r k h i l l ( 1 9 6 4 ) , 237 O r . 4 5 0 , 3 9 1 P.2d 755.
W do n o t d i s a g r e e w i t h a p p e l l a n t ' s s t a t e m e n t of t h e law w i t h
e

respect to time contingencies. Nevertheless, we believe the
agreement does establish a specific and unambiguous condition
precedent. The p a r t i e s a g r e e d t h a t Community would n o t make com-

m i s s i o n payments " u n l e s s and u n t i l " L i f e E v a n g e l i s t i c f u l f i l l e d
its duties under the contract for deed. The word "unless"

s u g g e s t s t h a t one h a s a r e s e r v a t i o n o r an o p t i o n t o c h a n g e o n e ' s
mind provided a certain event occurs. See, Black's Law
Dictionary 1378, (rev. 5th ed. 1979). By use of the word
"unless" Community reserved the right to withhold commission

payments i n the event t h a t Life Evangelistic failed to fulfill
its contractual duties. The t i m e c o n t i n g e n c y , which a r i s e s from

t h e u s e of t h e word " u n t i l " , d o e s n o t come i n t o p l a y u n t i l the
condition precedent occurs. C a s e s r e l i e d upon by a p p e l l a n t s p e a k
to contracts containing only time contingencies. See, e.g.,
Mignot, s u p r a . Community was a c t i n g w i t h i n c o n t r a c t u a l b o u n d s by

w i t h h o l d i n g t h e f i n a l c o m m i s s i o n payment u n l e s s L i f e E v a n g e l i s t i c
came up w i t h t h e f i n a l b u y e r ' s payment.
Finally, Martin argues t h a t because it d i d not receive the
f i n a l c o m m i s s i o n payment of $ 2 3 , 3 7 8 . 5 2 o n t o p of t h e $ 4 6 , 7 5 7 . 0 4
it had previously received, it was somehow subjected to an
"abhorent" forfeiture. In order fox a forfeiture to occur,

however, t h e p a r t y whose p r o p e r t y is d i v e s t e d m u s t have a r i g h t

i n t h a t property. S e e , Ridgeway v. C i t y of Akron ( 1 9 4 0 Ohio C t .
App.), 42 N.E.2d 7 2 4 , 726. Martin cannot claim a r i g h t to t h e

f i n a l c o m m i s s i o n payment. Any r i g h t he m i g h t have o b t a i n e d was
c o n d i t i o n e d on t h e f i n a l payment by L i f e E v a n g e l i s t i c u n d e r t h e

c o n t r a c t f o r deed. S i n c e t h e r e was no v a l i d c o n t r a c t p a y m e n t ,
t h e r e was no e n f o r c e a b l e r i g h t i n t h e c o m m i s s i o n payment. With no

enforceable right, M a r t i n c a n n o t make a v a l i d c l a i m t h a t he h a s
suffered a forfeiture.
~7
I n sum, w e f i n d no r e v e r s i b l e error, and & r e f o r e affirm.

I
Justice /

We concur: /