No. 84-289
IN THE SUPREME COURT OF THE STATE OF MONTANA
1955
GEORGE ORLANDO, as Personal Representative
of the Estate of FRANK A. DONNES, Deceased,
Plaintiff and Appellant,
LEE PREWETT and BARBARA PREWETT, husband
and wife,
Defendants and Respondents.
APPEAL FROM: District Court of the Sixteenth Judicial District,
In and for the County of Treasure,
The Honorable Charles Luedke, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Kelly & Halverson, P.C.; Sheehy, Prindle & Finn,
Billings, Montana
For Respondent:
Dunaway & O'Connor; Vicki W. Dunaway, Billings,
Montana
Submitted on Briefs: April 25, 1985
Decided: September 9, 1985
Filed: St'P!i 1985
Clerk
M. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e O p i n i o n o f t h e
r
Court.
This is an appeal from a judgment of the District
Court, Thirteenth Judicial District, Treasure County,
Montana. The l o w e r c o u r t o r d e r e d s p e c i f i c p e r f o r m a n c e o f two
o r a l a g r e e m e n t s e n t e r e d i n t o between Lee and B a r b a r a P r e w e t t ,
respondents ( h e r e a f t e r r e f e r r e d t o a s " P r e w e t t s " ) , and F r a n k
A. Donnes , deceased. George Orlando, as personal
r e p r e s e n t a t i v e o f t h e E s t a t e o f Frank A. Donnes, a p p e a l s from
that order. This case is remanded to comply with this
opinion.
Frank A. Donnes owned a ranch ("Donnes ranch") in
T r e a s u r e County. H e was r a i s e d on a p o r t i o n o f t h e p r o p e r t y
contained in the ranch and lived most of his adult life
thereon. H e was o n c e m a r r i e d b u t h i s w i f e d i e d young and
without children. Some y e a r s p r i o r t o h i s d e a t h , M r . Donnes
c e a s e d o p e r a t i n g t h e r a n c h h i m s e l f and l e a s e d it u n d e r a c a s h
rental agreement. He continued to live on the ranch,
however, and t o h a v e t h e u s e of t h e b u i l d i n g s and t o r u n a
few c a t t l e . This p a r t i c u l a r l e a s e arrangement terminated i n
1978 and from t h a t t i m e u n t i l 1980 M r . Donnes resumed s o l - e
r e s p o n s i b i l i t y f o r o p e r a t i n g t h e ranch.
In May of 1980 M r . Donnes, advancing in years and
h a v i n g grown t i r e d o f w o r k i n g t h e r a n c h h i m s e l f , approached
h i s niece, B a r b a r a P r e w e t t , and a s k e d i f s h e and h e r husband
L e e would b e i n t e r e s t e d i n moving t o t h e r a n c h and o p e r a t i n g
it. Thereafter t h e Prewetts m e t with M r . Donnes and r e a c h e d
a n o r a l a g r e e m e n t w h e r e i n it was a g r e e d t h a t i f t h e P r e w e t t s
moved t o t h e Donnes r a n c h and l e a s e d t h e same f o r $18,000 p e r
year, Mr. Donnes would leave the Prewetts an undivided
one-half i n t e r e s t i n t h e r a n c h and g i v e them t h e o p t i o n o f
purchasing the other half at an appraised value at the date
of his death. As a result of this agreement the Prewetts
bought a trailer-home and moved to the Donnes ranch in July
of 1980. They testified that they would not have moved to
the ranch and assumed the duties of running it if there had
not been the agreement with Mr. Donnes described ahove.
In May of 1982, Lee Prewett and Mr. Donnes made an oral
agreement for the sale of certain items of Mr. Donnes'
personal property. On or about September 9, 1982, Frank
Donnes was murdered. No lease payment on the ranch or
payment on the purchase price of the personal property had
been made to him at the time of his death.
A short period of time passed before the duly executed
last will and testament of Frank A. Donnes was discovered in
the home of one of his sisters in the State of Washington.
Helen Carbone and Mabel Orlando, sisters of Mr. Donnes were
qamed under the will as sole devisees of his entire estate.
On November 16, 1982, appellant George Orlando filed this
will with the Treasure County Clerk of Court along with a
petition for formal probate. On January 8, 1983, the
Prewetts filed creditor's claims wherein they demanded
specific performance of the oral agreements made between them
and Mr. Donnes. On January 19, 1983, the will of decedent
was admitted to formal probate as the valid last will and
testament of Frank A. Donnes.
On January 24, 1983, George Orlando, appellant, having
been appointed personal representative of the Frank A. Donnes
estate, filed notice of disallowance of the creditor's claims
and instituted an action to quiet title against the Prewetts
in and to the Donnes ranch and certain persona1 property.
The Prewetts counterclaimed for specific performance of the
two o r a l a g r e e m e n t s s e t f o r t h i n t h e i r c r e d i t o r ' s c l a i m s . A
bench t r i a l was h e l d b e g i n n i n g on November 7, 1.983 and on
April 17, 1984, t h e D i s t r i c t Court ruled in favor of the
The dispositive issue presented by this appeal is
w h e t h e r t h e o r a l a g r e e m e n t s e n t e r e d i n t o between t h e P r e w e t t s
and M r . Donnes a r e e n f o r c e a b l e ?
The p a r t i e s t o t h i s a p p e a l d i s a g r e e o v e r t h e n a t u r e o f
the oral agreement for the transfer of real property.
Appellant contends t h a t t h e agreement c o n s t i t u t e d a c o n t r a c t
to make a will or devise; the Prewetts argue that the
agreement was for the leasing, sale, and purchase of the
Donnes ranch. The lower court was in accord with the
Prewetts. P a r a g r a p h s 5 and 7 o f i t s C o n c l u s i o n s - - r e a d
of Law
a s follows:
5 . T h a t t h e a g r e e m e n t between d e c e d e n t
and t h e P r e w e t t s , a s h e r e i n s e t f o r t h i n
C o n c l u s i o n No. 1 , a b o v e , was a n a g r e e m e n t
f o r t h e l e a s i n g , s a l e and p u r c h a s e o f
real property and, therefore, is
specifically covered by Sections
30-11-111, 70-20-101, and 70-20-102,
which a u t h o r i z e t h e C o u r t t o compel t h e
s p e c i f i c p e r f o r m a n c e o f an o r a l a g r e e m e n t
f o r t h e l e a s i n g , s a l e and p u r c h a s e o f
r e a l p r o p e r t y i n c a s e o f p a r t performance
thereof.
7. That Section 72-2-105 requires a
c o n t r a c t t o make a W i l l o r d e v i s e o r n o t
t o revoke a W i l l o r d e v i s e o r t o d i e
i n t e s t a t e t o b e i n w r i t i n g , and e v e n
assuming t h i s s t a t u t e t o be a p p l i c a b l e t o
the instant case, which the Court
c o n c l u d e s it i s n o t , it i s a s t a t u t e of
f r a u d s p r o v i s i o n , and p a r t p e r f o r m a n c e
t h e r e o f w i l l remove t h e same from t h e
operation of t h e s t a t u t e .
We disagree with these conclusions and find them
i n e x p l i c a b l e i n l i g h t o f paragraph 13 o f t h e lower c o u r t ' s
own f i n d i n g s o f fact. I n c r u c i a l p a r t t h a t paragraph reads
a s follows:
... Thereafter, in May of 1380,
decedent contacted h i s niece, Barbara
Prewett, one of the defendants
herein ... and a s k e d w h e t h e r o r n o t s h e
a n d h e r husband would b e i n t e r e s t e d i n
movinq t o t h e r a n c h and o p e r a t i n g it. A s
a resklt o f t h e inquiry,- t h e defendant,
Lee P r e w e t t , husband o f B a r b a r a P r e w e t t ,
m e t w i t h d e c e d e n t and d i s c u s s e d t h e
p o s s i b i l i t y o f w o r k i n g o u t an a r r a n g e m e n t
r e l a t i v e t o t h e Donnes Ranch. A few d a y s
l a t e r a s e c o n d m e e t i n g o c c u r r e d , - which
a t
time the ~ a r t i e s eached
r an oral
a g r e e m e n t whereby t h e p a r t i e s a g r e e d t h a t
- -e P r e w e t t s moved - -e Donnes Ranch
i f th to th
and l e a s e d - - -r $18,000.00 per
t h e same f o
year annually, ... t h a t upon h i s d e a t h
d e c e d e n t would l e a v e -- P r e w e t t s a n
unto t h e
undivided one-ha l f interest in -the
Donnes Ranch and t h e P r e w e t t s wouid h a v e
t h e r i g h t t o purchase t h e o t h e r one-half
o f t-e ~ o n n e sRanch a t a n a ~ ~ r a i s e a l u e
- -h -
J. L
vd
a_ s _ - o f t h e - -
- -
d a t e of-death. (Emphasis
added. 1
F u r t h e r , i n p a r a g r a p h o n e o f i t s c o n c l u s i o n s o f law t h e
lower c o u r t r e s t a t e s t h e t e r m s o f t h e agreement:
1. T h a t i n May, 1 9 8 0 , d e c e d e n t and t h e
P r e w e t t s e n t e r e d i n t o an o r a l a g r e e m e n t
whereby t h e y a g r e e d t o move t o t h e Donnes
Ranch and l e a s e t h e Donnes Ranch from
decedent for the remainder of his
lifetime f o r consideration, i n i t i a l l y , of
$18,000.00 a n n u a l l y , and d e c e d e n t a g r e e d
t o g i v e an undivided one-half i n t e r e s t i n
t h e r a n c h t o them a t t h e t i m e o f h i s
d e a t h and p r o v i d e them w i t h t h e r i g h t t o
buy t h e o t h e r o n e - h a l f i n t e r e s t i n t h e
ranch a t t h e appraised value a s o f t h e
d a t e of h i s death.
Given t h e f i n d i n g s o f f a c t , which a r e amply s u p p o r t e d
by the record and not challenged by either party to this
appeal, it c o u l d n o t be more c l e a r t h a t t h e P r e w e t t s and M r .
Donnes e n t e r e d i n t o a n o r a l a g r e e m e n t f o r t h e d i s p o s i t i o n o f
certain of M r . Donnes' property a t h i s death. The v e h i c l e
for making this disposition was t o be either a w i l l or a
grantor trust. But despite the formalities that were
c o n t e m p l a t e d it i s n o t c h a l l e n g e d t h a t t h e i n t e n t o f t h e o r a l
a g r e e m e n t was t h a t F r a n k Donnes s h o u l d l e a v e r e a l p r o p e r t y t o
the Prewetts at his death. The D i s t r i c t Court committed
error, and contradicted i t s own f i n d i n g s o f fact, when it
c o n c l u d e d t h a t t h e o r a l a g r e e m e n t was f o r t h e l e a s i n g , s a l e
and purchase of r e a l p r o p e r t y and t h e r e f o r e was c o v e r e d by
S$ 30-11-111, 70-20-101 and 70-20-102, MCA. Section
72-2-105, MCA, is the clearly applicable s t a t u t e t o the facts
of t h i s c a s e and p r o v i d e s i n p e r t i n e n t p a r t a s f o l l o w s :
Contracts concerning succession. (1) A
c o n t r a c t t o make a w i l l o r d e v i s e o r n o t
t o revoke a w i l l o r d e v i s e o r t o d i e
intestate, i f executed a f t e r J u l y 1,
1 9 7 5 , c a n b e e s t a b l i s h e d o n l y by:
(a) provisions of a will stating
material provisions of the contract;
( b ) an e x p r e s s r e f e r e n c e i n a w i l l t o a
c o n t r a c t and e x t r i n s i c e v i d e n c e p r o v i n g
t h e terms o f t h e c o n t r a c t ; o r
( c ) a w r i t i n g s i g n e d by the decedent
evidencing t h e contract.
In the present case (1) there is no provision in
decedent's will s t a t i n g materia 1 provisions of the contract;
(2) there is no reference, express or otherwise, in
decedent's will to a contract; (3) there is no writing
s i q n e d by t h e d e c e d e n t evidencing the contract. The
a g r e e m e n t between t h e P r e w e t t s and M r . Donnes by which t h e
P r e w e t t s w e r e t o receive h a l f t h e r a n c h and f i r s t o p t i o n t o
purchase t h e o t h e r h a l f a t t h e death o f M r . Donnes d o e s n o t
conform i n a s i n g l e p a r t i c u l a r t o t h e r e q u i r e m e n t s p r o v i d e d
by statute for the enforcement of such an agreement.
T h e r e f o r e t h e a g r e e m e n t must f a i l .
The P r e w e t t s a r g u e t h a t , even if $ 72-2-105, MCA, is
a p p l i c a b l e i n t h e p r e s e n t c a s e , i t s requirement t h a t t h e r e be
a writing signed by the decedent is a statute of frauds
provision, and p a r t p e r f o r m a n c e d e f e a t s t h e o p e r a t i o n o f t h e
s t a t u t e of frauds. Therefore, t h e Prewetts continue, since
t h e y p e r f o r m e d t h e i r p a r t o f t h e a g r e e m e n t by moving t o t h e
r a n c h and assuming i t s operation, the agreement should be
enforced d e s p i t e t h e s t a t u t o r y requirement of a w r i t i n g . We
r e j e c t t h i s argument f o r t h e f o l l o w i n g r e a s o n s .
F i r s t , t h e w o r d i n g o f 5 72-2-105, MCA, i s absolute. A
c o n t r a c t concerning succession can be e s t a b l i s h e d " o n l y " by
meeting certain requirements. "Only" has a plain and
unambiguous meaning. W e w i l l n o t g r a f t an e x c e p t i o n on t o a
s t a t u t e when t h e l a n g u a g e d o e s n o t a l l o w f o r an e x c e p t i o n .
The Prewetts would have us analogize $ 72-2-105, MCA, to
S 70-20-101, MCA, which r e q u i r e s a w r i t i n g f o r t h e t r a n s f e r
of an i n t e r e s t i n r e a l p r o p e r t y , and S 30-11-111, MCA, which
r e q u i r e s t h a t a c o n t r a c t f o r t h e s a l e o f r e a l p r o p ~ r t yb e i n
writing. However, a part performance exception to the
writing requirement of these two statutes is specifically
provided for in the code. There is no such exception
s p e c i f i c a l l y p r o v i d e d t o S 72-2-105, MCA.
Second, we h a v e not been able to discover authority
from any jurisdiction t h a t h a s a d o p t e d t h e Uniform P r o b a t e
Code with a succession contract provision identical or
s i m i l a r t o S 72-2-105, MCA, holding t h a t an oral c o n t r a c t t o
make a w i l l o r d e v i s e c a n b e e n f o r c e d on t h e b a s i s o f a p a r t
performance exception to the statute of frauds. The
a u t h o r i t y and commentary w e c a n f i n d p r o v i d e s t h e o p p o s i t e .
I n F i r s t Gulf Beach Bank and T r u s t Co. v . Grubaugh (Fla.App.
1976), 330 So.2d 205, the District Court of Appeals of
Florida interpreted Florida Statute S731.051 ( 1 9 7 1 ) , which
reads i n p a r t a s follows:
731.051 Agreements to make a will,
requirements.
(1) No a g r e e m e n t t o make a w i l l of r e a l
o r personal property o r t o g i v e a legacy
o r make a d e v i s e s h a l l b e b i n d i n g o r
e n f o r c e a b l e u n l e s s such agreement i s i n
w r i t i n g s i g n e d i n t h e p r e s e n c e o f two
s u b s c r i b i n g w i t n e s s e s by t h e p e r s o n whose
e x e c u t o r o r a d m i n i s t r a t o r i s s o u g h t t o be
charged.
I n r e b u t t i n g t h e argument t h a t p a r t p e r f o r m a n c e s h a l l t a k e an
o r a l agreement t o d e v i s e r e a l p r o p e r t y o u t o f t h e s t a t u t e o f
f r a u d s , t h e F l o r i d a C o u r t q u o t e d a p p r o v i n g l y from a p r e v i o u s
case:
" [ S e c t i o n 731.0511 i s p a r t o f t h e F l o r i d a
P r o b a t e Law, a n d , a s i n t h e c a s e o f w i l l s
where t h e s t a t u t o r y r e q u i r e m e n t s f o r a
v a l i d w i l l must b e m e t i n o r d e r f o r i t t o
be admitted t o probate, t h e s t a t u t e i n
q u e s t i o n p r e s c r i b e s r e q u i r e m e n t s which
a r e n e c e s s a r y f o r a n a g r e e m e n t t o make a
w i l l , i n o r d e r f o r such an agreement t o
b e v a l i d and e n f o r c e a b l e i n F l o r i d a . To
hold that part performance by the
promisee o f an o t h e r w i s e unenforceable
a g r e e m e n t t o make a w i l l would make it
enforceable against the executors of the
p r o m i s o r would d e f e a t t h e p u r p o s e and
intent of the legislation. This is so
b e c a u s e i n most i n s t a n c e s where a p e r s o n
enters i n t o an agreement w i t h a n o t h e r t o
make a will containing devises or
b e q u e s t s t o t h e l a t t e r , it i s done i n
r e t u r n f o r some c o n s i d e r a t i o n s u p p l i e d
b y , o r u n d e r t a k i n g on t h e p a r t o f t h e
o t h e r person, such a s t o c a r e f o r t h e
promisor, and i n most s u c h i n s t a n c e s
t h e r e i s p e r f o r m a n c e , o r some p e r f o r m a n c e
by t h e p r o m i s e e . But it was f o r t h e
purpose o f precluding t h e e n f o r c e a b i l i t y
o f agreements o f t h a t k i n d , u n l e s s they
w e r e i n w r i t i n g and w i t h s u b s c r i b i n g
w i t n e s s e s , t h a t S731.051 was e n a c t e d . "
First Gulf Beach Bank and T r u s t Co. v. Grubaugh (Fla.App.
Though the Florida statute in question was adopted
before t h e drafting of s e c t i o n 2-701 (72-2-105, MCA) of the
Uniform Probate Code, we believe that the same reasoning
animates both. One commentator h a s p r o v i d e d t h e following
background and explanation of section 2-701, UPC (72-2-105,
MCA) :
One of the most common problems concerned
with succession contract is whether oral
succession contracts may be
proved ... Because the Statute of Wills
is not applicable, in most states the
basic question then has been the
applicability of the Statute of Frauds.
Unless the state has a specific provision
dealing with succession contracts which
adequately limits the proof of oral
succession contracts, the Statute of
Frauds has not constituted a significant
limitation on the proof of these oral
contracts. Even where the Statute of
Fraud's provision concerned with the sale
of real estate has been held to be
applicable to succession contracts
dealing with transfers of real estate,
the courts have applied exceptions to the
statute such as part performance and
other presumptions to circumvent the
Statute's proof restriction and permit
the oral contracts to be proved.
Depending upon one's viewpoint toward
formality requirements, this
circumvention of the Statute of Frauds
may or may not be beneficial.
Notwithstanding this value judgment, the
ineffectiveness of the Statute of Frauds
as a bar to proof of succession contract
has significantly encouraged litigation
over these matters.
Clearly, this provision [2-701, UPC;
72-2-105, MCA] is intended to
substantial-ly limit the proof of
succession contracts and to wash away all
of the authority and decisions dealing
with the application of the Statute of
Frauds and its exceptions. As with the
adoption of any new formalistic
requirement, the expectations of some
persons will be destroyed. Considering
that one of the parties to the contract
is no longer available to testify,
however, it would appear to be good
public policy to require some form of
written evidence that the contract
actually exists.
Lawrence H. Averill, Jr., Uniform Probate Code in a Nutshell,
We do n o t agree with the statement in the Prewetts'
b r i e f t h a t " [ t l h e r e i s no sound argument why t h e d o c t r i n e o f
p a r t p e r f o r m a n c e s h o u l d a p p l y any less t o S e c t i o n 72-2-105,
M.C.A., t h a n it would t o a n y o t h e r p r o v i s i o n s o f t h e S t a t u t e
o f F r a u d s which a r e s c a t t e r e d t h r o u g h o u t o u r Code a s Montana
has always followed t h i s d o c t r i n e . " I n a d d i t i o n t o t h e sound
argument provided by the Florida court and the learned
commentator q u o t e d a b o v e , w e n o t e t h i s a d d i t i o n a l rationale
f o r n o t a l l o w i n g a p a r t performance exception t o § 72-2-105,
MCA .
The many o p p o r t u n i t i e s f o r f r a u d and
p e r j u r y i n e s t a b l i s h i n g an o r a l t e s t a m e n t
of personal property led t o t h e provision
o f t h e s t a t u t e o f f r a u d s which r e g u l a t e s
nuncupative testaments. Likewise, t h e
many o p p o r t u n i t i e s which e x i s t f o r f r a u d
and p e r j u r y i n e s t a b l i s h i n g an o r a l
c o n t r a c t t o make a t e s t a m e n t , h a v e l e d
some s t a t e s t o e n a c t s t a t u t e s which d e a l
w i t h c o n t r a c t s t o make t e s t a m e n t s ; and
these statutes usually provide that
c o n t r a c t s t o make t e s t a m e n t s must b e i n
writing or must be proved by
writing ...
W r i t t e n e v i d e n c e i s more n e c e s s a r y i n
contracts of this s o r t than in the
classes of c o n t r a c t s c o v e r e d by t h e
ordinary provisions of the s t a t u t e of
frauds. An u n s c r u p u l o u s c l a i m a n t , who
c a n s e c u r e p e r j u r e d e v i d e n c e , c a n s e t up
and p r o v e a n o r a l c o n t r a c t . The d e a t h o f
t h e promisor makes i t i m p o s s i b l e t o
c o n t r a d i c t t h e testimony t o t h e e f f e c t
t h a t h e made s u c h p r o m i s e ; and t h e f a c t
t h a t t h e t r a n s a c t i o n n e v e r happened makes
i t a l l t h e h a r d e r t o d i s p r o v e it i f t h e
g u i l t y p a r t i e s h a v e been c a r e f u l t o make
t h e i r story f i t the p o s s i b i l i t i e s of t i m e
and p l a c e . I n s p i t e o f t h e f a c t t h a t it
a l s o o p e r a t e s t o t h e d e t r i m e n t o f an
ignorant or confiding promisee,
legislation of this sort should be
adopted g e n e r a l l y .
1 Bowe-Parker, Paqe o n W i l l s § 10.10.
W e h a v e r e c o g n i z e d b e f o r e t h a t c o n t r a c t s t o make w i l l s
are looked on with disfavor because at the time of
enforcement one of the parties is dead and obviously cannot
confirm or deny the existence of the contract. Lazetich v.
Miller (Mont. 1983), 671 P.2d 15, 40 St.Rep. 1626; Craddock
TT. Berryman (1982), 198 Mont. 155, 645 P.2d 399. It was to
tighten the methods by which such contracts could be proved
that section 2-701, UPC was drafted and adopted in Montana as
72-2-105, MCA. To recognize a part performance exception to
this statute would once again create the uncertainties and
litigation that the statute was designed to reduce and
eliminate. Accordingly, the appellant is entitled to a
judgment quieting title to the real property involved in this
action. The oral agreement between the Prewetts and Mr.
Donnes for the making of a devise is without force and
effect, and the judgment of the lower court on this issue is
hereby remanded to comply with this opinion.
The judgment of the District Court is reversed and
the case is remanded to comply with this opinion.
We concur: /