Roberts v. Morin

                                             No.    81-448

                  I N THE SUPREME COURT O THE STATE O M N A A
                                         F           F OTN

                                                    1982




STANLEY J. ROBERTS and DONNA J .
ROBERTS,

                   P l a i n t i f f s and A p p e l l a n t s ,



MARY JANE BORIN,

                   Defendant and Respondent.




Appeal from:       D i s t r i c t Court o f t h e F o u r t h J u d i c i a l D i s t r i c t ,
                   I n and f o r t h e County o f M i s s o u l a , The Honorable
                   J a c k L. Green, Judge p r e s i d i n g .


Counsel o f Record:


      For A p p e l l a n t :

                   J e f f r e y H.   Langton, Hamk?ton, Montana

      For Respondent :

                   M o r a l e s , V o l i n k a t y & H a r r , M i s s o u l a , Montana




                                             S u b m i t t e d on B r i e f s :   J a n u a r y 1 4 , 1982

                                                                   Decided:       May 1 3 , 1982
Mr. J u s t i c e Gene B.        Daly d e l i v e r e d t h e Opinion of t h e C o u r t .

           Appellants,           S t a n l e y and Donna R o b e r t s ,         brought        this

s u i t i n t h e D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t ,

i n and f o r t h e County o f M i s s o u l a , t o o b t a i n r e l i e f from t h e

forfeiture         of    their       real      estate     contract       with       rsspondent,

Mary J a n e M o r i n ,      or,     in the alternative,               t o o b t a i n damages

f o r b r e a c h of     that       contract.          After     a    nonjury        trial,      the

District        Court      entered            judgment      in       favor     of    Morin       and

awarded      her     the    property           and    attorney        fees    in     the    amount

requested.         The c o u r t t h e r e a f t e r e n t e r e d an amended judgment

jiving      the     Robertses             a   credit      for    expenses           incurred      in

making      improvements             to       the    property        while     they     were      in

possession.          The R o b e r t s e s a p p e a l from t h e amended j u d g m e n t .

           M o r i n ' s p r e d e c e s s o r , Morin Lumber Company, o r i g i n a l l y

sold the subject property                      i n 1974 t o a Mr.             Woolhiser         by a

c o n t r a c t f o r deed.         The s a l e s p r i c e was $ 9 , 5 0 Q .        A downpay-

rnent o f $8(ZI0 was made,                l e a v i n g a balance of          $8,9(ZI0 p a y a b l e

at    8% i n t e r e s t    in      monthly          installments        of     $72.78       until

S e p t e m b e r 2 0 , 1 9 8 2 , a t which t i m e t h e f u l l b a l a n c e ,          includ-

i n g i n t e r e s t , was t o become d u e .

           The c o n t r a c t p r o v i d e d ,     in part,    t h a t i n t h e event of

b u y e r ' s b r e a c h and c o n t i n u a n c e o f t h e b r e a c h f o r s i x t y d a y s

Lollowing w r i t t e n n o t i c e of breach m a i l e d ,              " t o t h e buyer a t

1318     Defoe          Street,        Missoula,          Montana,           return        receipt

r e q u e s t e d , o r such o t h e r a d d r e s s a s t h e buyer s h a l l p r o v i d e

t o t h e s e l l e r from t i m e t o t i m e , "         the s e l l e r could,           at his

option,      declare a          f o r f e i t u r e and    retake      possession          of    the

p r o p e r t y o r pursue a l l o t h e r remedies a v a i l a b l e a t law.

           The c o n t r a c t a l s o p r o v i d e d t h a t t h e p r e v a i l i n g p a r t y

in   any     litigation          would        be    entitled     to    attorney        f e e s and
costs      of     suit     and      that      no      assignment             would        be    permitted

without the s e l l e r ' s w r i t t e n consent.

            Not l o n g a f t e r W o o l h i s e r         entered          into the contract,

he    assigned           his     interest        to Albert             and    Emma R o b e r t s ,         the

p a r e n t s of S t a n l e y R o b e r t s ,        The a s s i g n m e n t was c o n s e n t e d t o

by Morin Lumber                 Company.           Later,      i n December 1 9 7 6 , A l b e r t

and Emma R o b e r t s a s s i g n e d t h e c o n t r a c t t o t h e i r s o n S t a n l e y

and    his      w i f e Donna.           At      t h e t i m e of       t h i s assignment,                the

principle          balance         due      to     Morin       was      $8,299.36.                   Mor i n ' s

predecessor consented t o t h i s assiynment.                                      While a p p e l l a n t s

owned      the     property,          they        resided         there        and       made        various

improvements,             which      the      court       determined               to    be    valued        at

$4,981.

            On     October         12,      1977,        appellants                entered           into     a

contract         for     the     s a l e of      t h e p r o p e r t y t o Warren and K a t h y

Iverson.           The         contract       provided         that          the        Iversons        would

assume       the      Robertses'         obligations              to    Morin           and     that     upon

completion of              the    Iversons'            obligations            to        the    Robertses,

the     Robertses          would       assign          their      interest               in    the      Morin

contract         to      the    Iversons.             Pursuant         to     this        agreement          an

a s s i g n m e n t of    c o n t r a c t was drawn up t o be p l a c e d                       i n escrow

and a c o n s e n t t o a s s i g n m e n t was drawn and                          s i g n e d by Morin

and p l a c e d       i n escrow with t h e assignment.                             Morin was a w a r e

a t t h i s t i m e t h a t t h e R o b e r t s e s were s e l l i n g t o t h e I v e r s o n s

on a s e p a r a t e c o n t r a c t ,

            Unknown t o t h e R o b e r t s e s t h e t i t l e company m i s t a k e n l y

filed      the     a s s i g n m e n t of     record        before delivering                    t h e con-

tract      and     related        papers         to    escrow.           Further,              the    escrow

agent      of      the     parties          treated         the    contract              as     presently

a s s i g n e d and s e t up s e p a r a t e e s c r o w f i l e s f o r t h e R o b e r t s -
I v e r s o n c o r l t r a c t and t h e Iversori-Morin               contract.            The r e s u l t

was    that      t h e I v e r s o n s made payments                  through         escrow t o       the

R o b e r t s e s and p a y m e n t s t h r o u g h e s c r o w t o Morin.

           P e r s o n a l and f i n a n c i a l p r o b l e m s b e s e t t h e I v e r s o n s i n

1979,     resulting            in their             separation       and     falling          behind    on

t h e e s c r o w payments.              The I v e r s o n s m i s s e d a payment t o Morin

e a r l y i n 1 9 7 9 , b u t no a c t i o n was t a k e n on t h e p a r t o f Morin

t o e n f o r c e t h e t i m e of             the essence clause i n the contract.

The I v e r s o n s '       l a s t payment t o Morin was on J a n u a r y 1 7 , 1 9 8 0 .

Morin s e n t a n o t i c e o f d e f a u l t t o t h e I v e r s o n s a t 1 3 1 8 Defoe

S t r e e t a f t e r t h e I v e r s o n s m i s s e d t h e i r payment.                L a t e r , upon

expiration            of     the    sixty-day          default        period,          Morin     sent    a

n o t i c e of    forfeiture              to    the        Iversons     at    the       Defoe     Street

address        and         took     possession.               Meanwhile,           the      Robertses,

though having               trouble with              the    t i m e l i n e s s of     the    payments

from t h e I v e r s o n s , r e c e i v e d payments u n t i l J u l y 1 9 8 0 .

           Morin s e n t no n o t i c e o f d e f a u l t o r f o r f e i t u r e t o t h e

Robertses,            nor     did       the    I v e r s o n s inform t h e Robertses t h a t

they     had     defaulted              on     the     Morin      contract            until    July     or

August      1980.            On A u g u s t     18,    1980,       the Robertses'              attorney

requested         a        statement           of    the      balance        due       from     Morin's

a t t o r n e y and o f f e r e d        to cure the default.                      T h i s o f f e r was

rejected.         On S e p t e m b e r 1 0 , 1 9 8 0 , R o b e r t s e s '         attorney sent a

written        tender         of    payment           to    Morin     and     to      her     attorney,

offering         to     pay       the    amount        in     default        and      related      costs

t o g e t h e r w i t h i n t e r e s t from t h e d a t e o f t h e l a s t payment by
Iversons t o the d a t e of                     tender,       a total        of    $7,552.61         plus

i n t e r e s t , i n e x c h a n g e f o r a d e e d from Morin.                     T h i s o f f e r was

r e j e c t e d , b u t t h e amount o f t h e o f f e r was n o t d i s p u t e d .

           On S e p t e m b e r 1 7 ,          1 9 8 0 , t h e R o b e r t s e s commenced s u i t
t o compel lvlorin t o a c c e p t t h e i r t e n d e r and d e l i v e r h e r d e e d ,

o r f o r damages.               Throughout t h e proceedings,                     Hobertses have

o f f e r e d t o pay t h e a b o v e - s t a t e d       amount,

           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 f o r r e v i e w :

           1.          Were     the Robertses e n t i t l e d             to notice        prior    to

Morin d e f a u l t i n g t h e I v e r s o n c o n t r a c t ?

           2.         Once t h e R o b e r t s e s had n o t i c e o f t h e d e f a u l t and

offered         to      tender       full      compensation          to   Morin,       should      the

t r i a l c o u r t have d e n i e d a f o r f e i t u r e of t h e c o n t r a c t ?

           The         first      issue       presented       by    appellants         is w h e t h e r

t h e y were e n t i t l e d t o n o t i c e p r i o r           t o Morin d e f a u l t i n g t h e

Iverson         contract.              The      contract       provides        that       notice    of

d e f a u l t be s e n t t o t h e " b u y e r " a t 1 3 1 8 D e f o e .            Morin i n t e r -

preted      this         t o Inean t h a t n o t i c e o f         d e f a u l t had   t o be s e n t

only to         the      a d d r e s s of      the     "buyer"      named     in    the    original

contract,            r e g a r d l e s s of    t h e assignments.            The p r o b l e m w i t h

t h i s type of           notice       is t h a t      it f a i l s in     t h i s situation to

take i n t o account the Robertses i n t e r e s t i n the property.

           A l t h o u g h t h e r e is no s p e c i f i c c a s e o r s t a t u t e d e a l i n g

d i r e c t l y w i t h t h i s s i t u a t i o n , t h e r e is an a n a l o g y i n t h e l a w

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

in    this       instance.               In     Chambers       v.     Cranston         (1976),      16

Wash.App.        5 4 3 , 558 P.2d             2 7 1 , i t was h e l d :

           "The p u r c h a s e r i n an e x e c u t o r y r e a l e s t a t e
           c o n t r a c t h a s a n i n t e r e s t which h e c a n mort-
           g age           Sigman v .       Stevens-Norton,            Inc.  70
           inJash,2d 9 1 5 , 425 P.2d 8 9 1 ( 1 9 6 7 ) ; N e l s o n v .
           B a i l e y , 54 Wash.2d           1 6 1 , 338 P.2d 757, 73
           A. L . R , 2d 1400 ( 1 9 5 9 )          .
                                                   I f t h e purchaser has
           mortgaged h i s i n t e r e s t , t h e mortgagee i s
           e n t i t l e d t o n o t i c e of f o r f e i t u r e i f t h e
           s e l l e r knows o f t h e m o r t g a g e , and t h e m o r t -
           g a g e e h a s t h e r i g h t t o t e n d e r payments t o t h e
           s e l l e r necessary t o protect h i s security,
           i.e.,        t o keep t h e c o n t r a c t i n e f f e c t . "  558
           P.2d a t 273.
S e e a l s o , MacFadden v .             Walker      ( 1 9 7 1 ) , 97 C a l . R p t r .     537,       488

P.2d    1353.

             The      situation           presented         here        and     the        situation

p r e s e n t e d above a r e n o t s u b s t a n t i a l l y d i s s i m i l a r .         Here, t h e

R o b e r t s e s a s s i g n e d t h e d u t y o f p a y i n g on t h e Morin c o n t r a c t

to     the    Iversons but            did     not    assign       their        interest           to    the

Iversons.             Further,       the     Iversons did              not    "assume"            in    the

s t r i c t l e g a l sense the contract of the Robertses but merely

agreed,        in writing,           to    pay Morin d i r e c t l y t h e amount                      that

t h e R o b e r t s e s had been           i n i t i a l l y paying      according t o t h e i r

c o n t r a c t assignment.             The f a c t t h a t t h e a s s i g n m e n t was d u l y

r e c o r d e d by t h e t i t l e company d o e s n o t a f f e c t t h e i n t e n t o f

the parties,              and i t h a s no l e g a l e f f e c t on t h e t r a n s a c t i o n

itself.         66 Am.Jur.2d          R e c o r d s and R e c o r d i n g Laws,            sec.    98.

             The i m p o r t a r l t s i m i l a r i t y l i e s i n t h e f a c t t h a t h e r e ,

a s i n Chambers,              supra,     t h e r e was a r e t a i n e d i n t e r e s t i n t h e

land.         In     Chambers,        the    court       held     that        because        Citizens

S a v i n g s and Loan A s s o c i a t i o n was t h e m o r t g a g e e i t had                  ". . .
t h e r i g h t t o n o t i c e o f d e f a u l t and t o an o p p o r t u n i t y t o k e e p

the contract in effect                    . . ." 558       P.2d     a t 274.      The R o b e r t s e s

s h o u l d h a v e had t h a t same o p p o r t u n i t y .             They were e n t i t l e d

to a     n o t i c e of        default      because       they     retained        an       interest,

similar        to     a       mortgagee's       interest,         in     the     property,              and

Morin was a w a r e o f t h a t i n t e r e s t .

             The     second       issue     is whether           the    trial      court          should

have     denied           a    forfeiture       when       the     Robertses          offered            to

tender       full      compensation           to    Morin.         A    discussion           of        this

issue        should       be    premised       with      the     statement         that       "equity

abhors       forfeitures."                Yellowstone          County v.         Wight        (1944) ,

115 Mont.           4 1 1 , 1 4 5 P.2d      516;    Sharp v.        Holthusen ( 1 9 8 0 ) ,            -
Mont.      ,
          - 616 P.2d                374,    37 S t . R e p .     1651.      Here,       there are

both     s t a t u t o r y and e q u i t a b l e r e a s o n s t o d e n y f o r f e i t u r e o f

the contract.

           Montana h a s a s p e c i f i c s t a t u t e d e a l i n g             with    forfei-

ture.       S e c t i o n 28-1-104,        MCA,     provides:

           "-l i e f f r o m f o r f e i t u r e .
             R e-                                        Whenever by t h e
           terms of an o b l i g a t i o n a p a r t y t h e r e t o i n c u r s
           a f o r f e i t u r e or a l o s s i n the nature of a
           f o r f e i t u r e by r e a s o n o f h i s f a i l u r e t o comply
           w i t h i t s p r o v i s i o n s , h e may b e r e l i e v e d
           t h e r e f r o m upon m a k i n g f u l l c o m p e n s a t i o n t o
           the other party, except i n case of a grossly
           negligent, w i l l £u l , o r fraudulent breach of
           duty."

            This Court h a s i n t e r p r e t e d            s e c t i o n 28-1-104,      MCA,   in

numerous c a s e s .           I n Yellowstone County v.                   Wight,       supra,    we



           " S e c t i o n 8 6 5 8 , R e v i s e d C o d e s [now 28-1-104,
           MCA] , was e n a c t e d f o r t h e b e n e f i t o f o b l i g o r s
           w h o s e f a i l u r e t o p u n c t u a l l y p e r f o r m would
           r e s u l t i n l o s s t o them i n t h e m a t t e r s i n
           r e s p e c t t o which t h e y have c o n t r a c t e d .           The
           i n t e n t i o n of t h e Legislature i n enacting t h e
           s t a t u t e was t h a t i t s h o u l d b e o p e r a t i v e a n d
           t h a t it s h o u l d be g i v e n f u l l f o r c e and e f f e c t
           when t h e c i r c u m s t a n c e s i n a n y c a s e g a v e i t
           application.              The i n t e n t i o n o f t h e l a w u n d e r
           t h i s s t a t u t e is t h a t a f o r f e i t u r e should n o t
           be n e e d l e s s l y e n f o r c e d .        The c o u r t s h a v e
           e s t a b l i s h e d t h a t a s t h e p o l i c y o f law i n t h e
           absence of s t a t u t e .          The r u l e a s i t h a s f o u n d
           e x p r e s s i o n i n c o u r t d e c i s i o n s g e n e r a l l y is
           t h a t b o t h i n l a w and i n e q u i t y f o r f e i t u r e s
           a r e abhorred."             1 4 5 P.2d a t 518.

See a l s o ,      P a r r o t v.   Heller      ( 1 9 7 6 ) , 1 7 1 Mont.      212,       5 5 7 P.2d

819,    and S h a r p v.        Holthusen,          supra,       for a reaffirmation              of

t h e above s t a t u t o r y i n t e r p r e t a t i o n .

           The D i s t r i c t      Court ruled         t h a t t h e R o b e r t s e s had n o t

appealed        to    the conscience of               t h e c o u r t and      cited       section

28-1-104,        IvlCA,    and F r a t t v .      Daniels-Jones            ( 1 9 1 3 ) , 47 Mont.

4 8 7 , 1 3 3 P.     700, a s a u t h o r i t y .     The C o u r t i n F r a t t c o n c l u d e d

that     to     invoke       the    anti-forfeiture                statute     a    party      must
appeal        to the conscience of a c o u r t of                         equity.           While t h i s

Inay      indeed        be    true,        the    philosophy         of       the     law      since    the

r u l i n g i n F r a t t h a s changed d r a m a t i c a l l y .                   What a p p e a l s t o

t h e conscience of                  a court          i n e q u i t y i n 1913 is n o t neces-

s a r i l y t h e same a s w h a t a p p e a l s t o t h e c o n s c i e n c e o f a c o u r t

of     e q u i t y i n 1982.            I n 1913, t h e l e g a l concept t h a t e q u i t y

abhors        forfeitures              was       in    its    infancy,               Presently,         the

c0ncep.t       is       one     that        is   considered          axiomatic.                Under    the

p r e s e n t s t a t e o f t h e law and t h e c u r r e n t                  interpretation of

s e c t i o n 28-1-104,           MCA,       F r a t t v.    Daniels-Jones,               supra,     i s no

longer t h e proper authority.

            The D i s t r i c t C o u r t a l s o r u l e d t h a t t h e R o b e r t s e s were

grossly negligent                    and    therefore         unable      t o avail themselves

the     use    of        section        28-1-104,           MCA,    for       failing          to   remain

a b r e a s t of     Iversons'             delinquency.            T h e r e is n o t h i n g       in the

r e c o r d s u p p o r t i n g t h e r u l i n g t h a t t h e R o b e r t s e s were g r o s s l y

negligent           in       their     duty      under       the   terms o f          the      contract.

The     f a c t t h a t t h e R o b e r t s e s were h a v i n g              trouble collecting

from t h e        Iversons does not                    necessarily            impute      to    them    the

k n o w l e d g e t h a t t h e I v e r s o n s h a d d e f a u l t e d o n t h e i r M o r i n ob-

ligation.           Indeed,           w i t h o u t n o t i c e from Morin t h a t a d e f a u l t

existed,          they could            not      have been         expected          to   correct       the

default,           Also,        t h e r e c o r d s h o w s t h a t upon l e a r n i n g o f            the

default,          they        immediately             contacted      their          attorney,        asked

lvIorin     for     a        payoff        figure,      and    made       a    written         offer      to

perform.           Morin,        through her attorney,                  rejected t h i s offer.

A s f o r Morin's             reasons behind t h e r e j e c t i o n ,              she t e s t i f i e d :

            "Q, Now, t o y o u r k n o w l e d g e , d o e i t h e r you o r
            your a t t o r n e y o b j e c t t o t h e amount o f f e r e d ?
            O r you j u s t o b j e c t e d t o t a k i n g a n y a m o u n t o f
            money?      A.       I j u s t objected.        I j u s t wanted
            t h e house.
           IlQ.         To your knowledge h a s t h e p r o p e r t y
           a p p r e c i a t e d i n v a l u e s i n c e i t was s o l d i n
           1 9 7 4 ? A,          Yes, i t ' s a much b e t t e r p r o p e r t y
           now."         ( E m p h a s i s s u p p l i e d .)

           There       are      instances             where      a   party      who       fails    to

perform        cannot       utilize      section            28-1-104,      MCA,     but    this    is

n o t one of t h o s e i n s t a n c e s ,            W f i n d t h a t t h e R o b e r t s e s were
                                                       e

not     grossly     negligent          in    their           duty    to   Morin     and    clearly

f a l l w i t h i n t h e p a r a m e t e r s o f s e c t i o n 28-1-104,           MCA.

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

u s e d by t h i s C o u r t and c o u r t s o f               other      jurisdictions.           In

State     ex    rel.        Howeth v .      D.        A.    D a v i d s o n & Co.    ( 1 9 7 3 ) , 163

Mont.    3 5 5 , 517 P,2d 7 2 2 , we s t a t e d :

           " E q u i t y w i l l i n t e r c e d e i n c a s e s where f o r f e i -
           t u r e of t h e p u r c h a s e r ' s e q u i t a b l e t i t l e is
           p r o v i d e d by t h e p u r c h a s e c o n t r a c t i n t h e
           e v e n t of h i s d e f a u l t .           If the defaulting
           p u r c h a s e r c a n make a showing t h a t he i s
           e q u i t a b l y e n t i t l e d t o s u c h r e l i e f and t h a t
           h i s b r e a c h o f d u t y was n o t g r o s s l y n e g l i g e n t ,
           willful or fraudulent, the courts w i l l , in
           proper           cases,          relieve        the     defaulting
           p u r c h a s e r from t h e f o r f e i t u r e . "   517 P.2d a t
           730.

          The Supreme C o u r t o f Hawaii i n J e n k i n s v.                         Wise   (Haw,

1 9 7 8 ) , 574 P.2d        1337, s t a t e d :

           ". . .       A c c o r d i n g l y , where t h e v e n d e e ' s b r e a c h
          h a s n o t been due t o g r o s s n e g l i g e n c e , o r t o
          d e l i b e r a t e o r b a d - f a i t h c o n d u c t , on h i s p a r t ,
          and t h e v e n d o r c a n r e a s o n a b l y and a d e q u a t e l y
          be c o m p e n s a t e d f o r h i s i n j u r y , c o u r t s i n
          equity w i l l generally grant relief against
          f o r f e i t u r e and d e c r e e s p e c i f i c p e r f o r m a n c e o f
          t h e agreement.
          574 P.2d a t 1 3 4 1 .
                                            [Citations omitted.]               . . ."
          Also,        in    MacFadden           v.        Walker    ( 1 9 7 1 ) , 97    Cal ,Rptr.

537, 4 8 8 P.2d        1353, t h e C a l i f o r n i a Court h e l d :

           ". . .      A s we p o i n t e d o u t i n t h e B a r k i s c a s e ,
          allowing t h e d e f a u l t i n g vendee t o c u r e h i s
          d e f a u l t and p e r f o r m t h e c o n t r a c t may o f t e n be
          the f a i r e s t solution, for the unjust enrich-
          ment o f t h e v e n d o r t h a t i s p r e c l u d e d by
           r e s t i t u t i o n of t h e e x c e s s of p a r t payments
           o v e r t h e damages c a u s e d by t h e b r e a c h may
           b e a r l i t t l e o r no r e l a t i o n t o t h e f o r f e i t u r e
           imposed on t h e v e n d e e i f h i s r i g h t t o p e r f o r m
           t h e c o n t r a c t is t e r m i n a t e d .       'A vendee i n
           d e f a u l t who is s e e k i n g t o k e e p t h e c o n t r a c t
           a l i v e , however, is i n a b e t t e r p o s i t i o n t o
           s e c u r e r e l i e f t h a n one who is s e e k i n g t o
           r e c o v e r back t h e e x c e s s o f what h e h a s p a i d
           o v e r t h e amount n e c e s s a r y t o g i v e t h e v e n d o r
           t h e b e n e f i t of h i s b a r g a i n a f t e r performance
           under t h e c o n t r a c t h a s t e r m i n a t e d .     In the
           l a t t e r s i t u a t i o n i t may be s o d i f f i c u l t t o
           compute t h e v e n d o r ' s damages t h a t t h e v e n d e e
           w i l l be u n a b l e t o p r o v e t h a t t h e v e n d o r w i l l
           be u n j u s t l y e n r i c h e d by a l l o w i n g him t o k e e p
           a l l t h e money t h a t h a s been p a i d                  ...
                                                                      I II    488
           P.2d a t 1 3 5 6 .

Here, e q u i t a b l e p r i n c i p l e s m u s t b e invoked t o a c h i e v e a j u s t

result.

           The      equitable          reasons        to     deny       forfeiture          are    quite

apparent.            In    comparing            the    equities           of     this      case,        the

D i s t r i c t Court f a i l e d t o i n c l u d e one v e r y important f a c t o r .

The    factor       not     included         in    the       comparison           was      that    Morin

would     receive the property,                   not      at    i t s 1974 v a l u e ,           but    at

its g r e a t l y    increased           1982 v a l u e .          Morin's         predecessor           in

i n t e r e s t s o l d t h e p r o p e r t y t o t h e o r i g i n a l buyer              f o r $9,500

in    1974.         By    the   time      the Robertses sold                     the property            in

1977,     the value         had    increased            to      $23,@0O.            If    Morin     were

allowed       to     keep       -the     property,           she        would     not      only     have

received       $2,027.21,          or      21     percent          of     the     original         sales

price,     but      s h e would        be e n h a n c e d by t h e i n c r e a s e d v a l u e o f

the property.

           On t h e o t h e r      hand,        the     R o b e r t s e s would           retain    only

t h e arnount r e c e i v e d     on t h e I v e r s o n s c o n t r a c t ,             amounting t o

about      $7,080.          Though         the        Robertses          may      have      recovered

r o u g h l y 47 p e r c e n t of t h e i r o r i g i n a l e q u i t y ,          t h e y have been

denied t h e b e n e f i t of t h e increased v a l u e of t h e property.

           By a p p l y i n g s e c t i o n 28-1-104,              MCA,        t o deny a f o r f e i -
t u r e , and by r e q u i r i n g t h e R o b e r t s e s t o make f u l l payment o f

t h e b a l a n c e of     t h e o r i g i n a l c o n t r a c t t o Morin, t h e e q u i t l e s

i n t h i s case a r e resolved--that                  i s , Morln r e c e i v e s t h e bene-

f i t of    the original contract,                    and t h e R o b e r t s e s r e t a i n t h e

l a n d , l e s s t h e l r payment         t o Morin.            Further,      the Robertses

a r e o b l i g a t e d t o Morin        f o r any e x p e n s e s        i n c u r r e d by Morin

reiatlny t o the Iversons'                    possession          of the property.            This

would      consist        of    utility         expenses,         maintenance          expenses,

r e p a i r e x p e n s e s and d e l i n q u e n t t a x e s .     It d o e s n o t      include,

however,        any      i m p r o v e m e n t s made by Morin w h i l e            this action

was p e n d i n g .      S e e , L a r r y C.    lverson,          Inc.    v.     Bouma    (1981),

- Mont        . -,        639 P.2d       47,    38 S t .Rep.       1911.

           Morln i s r e s p o n s i b l e f o r a t t o r n e y f e e s and c o s t s .

           The judgment            of   the D i s t r i c t Court is reversed,                 and

the    cause       is     remanded       to     the    District           Court    for    further

proceedings consistent with t h i s opinion.




W e concur:



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      Chief J u s t i c e            c-e&s?,