No. 13355
I N THE SUPREME COURT O F THE STATE OF MONTANA
RUSSELL C . WHITNGY, JR.,
d/b/a Double 4 Cattle Company,
and Julia S. Whitney, his wife,
Plaintiffs and Appellants,
RICHARD J. BAILS and PATRICIA J.
BAILS, husband and wife,
Defendants and Respondents.
Appeal from: District Court of the Eighteenth Judicial
District
Honorable W. W. Lessley, Judge presidina
Counsel of Record:
For Appellants:
Corette, Smith and Dean, Butte, Montana
Dolphy Pohlman argued, Butte, Montana
For Respondents :
Berg, Angel, Andriolo & Morffan, Bozeman, Montana
Ben E. Berg argued, Bozeman, Montana
Hibbs, Sweeney and Colberg, Billings, Montana
Submitted: January 10, 1977
Decided : fIRR 7 '1971
Filed: !I>,~; ,
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M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e
Court.
I n an a c t i o n f o r d e c l a r a t o r y judgment t h e d i s t r i c t c o u r t ,
G a l l a t i n County,found p l a i n t i f f Whitney e n t i t l e d t o c a n c e l l a t i o n of
two c o n t r a c t s f o r deed.
The a c t i o n involved t h e s u c c e s s i v e s a l e of a ranch by
c o n t r a c t f o r deed, w i t h each succeeding c o n t r a c t assuming t h e p r i o r
contracts. P e t e T o c c i & Son I n c . was t h e o r i g i n a l owner f o r
t h e purposes of t h e s e c o n t r a c t s . I n 1969, T o c c i s o l d t h e r a n c h
t o McGregor f o r $500,000. I n March 1971 McGregor s o l d t o Blome
f o r $650,000. I n August 1972 Bt e s o l d t o Whitney, p l a i n t i f f h e r e ,
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f o r $425,000. I n September 1973 Whitney s o l d t o Gar f o r $740,000.
Gar s o l d t o B a i l s , defendant h e r e , f o r $750,000 i n J u l y 1974.
I n December 1974 B a i l s missed a payment, t h e b a s i s f o r
default. I n A p r i l a f t e r t h e c o n t r a c t u r a l n o t i c e s were s e r v e d , t h i s
a c t i o n was f i l e d a g a i n s t a l l p a r t i e s t o a l l t h e c o n t r a c t s t o
determine t h e r i g h t s of t h e p a r t i e s .
By s t i p u l a t i o n a l l c o n t r a c t s up t o and i n c l u d i n g Blome t o
Whitney were found ,, t o be i n f u l l f o r c e . By t h e same p r o c e s s ,
Gar was dismissed from t h e a c t i o n w i t h p r e j u d i c e . A t r i a l without
j u r y t o determine t h e r i g h t s a s between p l a i n t i f f and B a i l s , t h e
l a s t remaining d e f e n d a n t , was had b e f o r e Hon. W.W. Lessley. His
d e c i s i o n i s appealed by p l a i n t i f f .
The a p p e a l r a i s e s two q u e s t i o n s :
1) Who owns t h e c r o p s h a r v e s t e d by B a i l s d u r i n g t h i s
litigation?
2) What i s t h e measure of damages?
The crops involved are the grain crop, straw crop, and
the irrigated seed hay crop. Kester v. Amon,.81 Mont. 1, 9, 261
P. 288, states the rule in Montana:
"** * when an occupant of lands plants, cultivates
and harvests crops during the term of his occupation,
they are his personal property, whether he occupied
the land as a purchaser, a tenant, or a mere trespasser
holding the land adversely to the real owner, and
whether he came into possession of the land lawfully
or not, provided he remain in possession until after
the crops are harvested."
There could be no fact situation more extreme than that in
Kester where the grain was cut after the sheriff, pursuant to
\
a writ of assistance, had taken possession of the land. Hamilton
v. Rock, 121 Mont. 245, 191 P.2d 663, states the rule in Kester
but found it inapplicable to native grasses and trees which do
not owe their existence to the trespasser.
Here, the crops were planted, work was done by Bails or
persons paid by him, and harvested long before the court ordered
the change in possession. The crops therefore belong, as the
court ordered, to defendant Bails.
The second issue concerns the measure of damages.
Section 17-301, R.C.M. 1947, states:
"Measure of damages for breach of contract. For the
breach of an obligation arising from contract, the
measure of damages, except where otherwise expressly
provided by this code, is the amount which will com-
pensate the party aggrieved for all the detriment
proximately caused thereby, or which in the ordinary
course of things, would be likely to result therefrom."
(Emphasis supplied.)
Section 17-307, R.C.M. 1947, sets out the specific measure
of damages for breach of an agreement to buy real property:
"Breach of agreement to buy real property. The detri-
ment caused by the breach of an agreement to purchase
an estate in real property is deemed to be the excess,
if any, of the amount which would have been due to the
seller, under the contract, over the value of the property
to him."
This express provision was discussed by this Court in
Wyatt v. School District No. 104, 148 Mont. 83, 88, 89, 417 P.2d
221. The interpretation of California Civil Code $3307, identical
to section 17-307, R.C.M. 1947, was used by analogy to interpret
another provision of Chapter 3, Title 17, R.C.M. 1947, on the
question of whether the provisions of that section were the exclu-
sive measure of damages. In Wyatt the Court found the sections
of title 17 were not exclusive basing its decision in part on
Royer v. Carter, 37 Cal.2d 544, 233 P.2d 539, where the California
Court said:
'I' * * * vendee's breach may make it necessary for
the vendor to incur additional expenses to realize
the benefit of his bargain. * * * When such additional
expenses are the natural consequence of the breach,
they may be recovered in addition to those provided
for in section 3307.' (Emphasis supplied.)"
This Court then set out the reason for this ruling:
"* * *the statutes are to be regarded as guides in
the estimation of damages to be recovered, and that
the respondent should receive a sum which, when added
to the benefits already received under the contract,
will give her an economic status identical to that
which she would have enjoyed had the contract been
performed .I1
In Wiseman v. Holt, 163 Mont. 387, 517 P.2d 711, a similar
question was raised. In Wiseman the Court again referring to
Royer, the California case, found an instruction offered by the
defendant was incorrect because it set the maximum damages recover-
able to those provided in section 17-307, R.C.M. 1947. The Court
explained that the philosophy of contract damages was to allow
those damages which would return the damaged party to an economic
s t a t u s i d e n t i c a l t o t h a t which would have been enjoyed had t h e
c o n t r a c t been performed and t h i s policy would be v i o l a t e d i f c e r t a i n
a d d i t i o n a l damages were n o t allowed. W d i s a g r e e and o v e r r u l e
e
our holding i n Wiseman a s t o a d d i t i o n a l damages.
Here, even a f t e r deducting t h e f u l l amount of t h e a l l e g e d
damages from t h e market p r i c e a t t h e time of t h e breach, t h e seller
i s s u b s t a n t i a l l y b e t t e r o f f than he would have been had t h e con-
t r a t~ been performed. The d i s t r i c t c o u r t made d e t a i l e d and s p e c i f i c
findings t o t h i s e f f e c t . This r e s u l t i s c l e a r l y contemplated by
s e c t i o n 17-307:
"The detriment caused by t h e breach of an agreement t o
purchase an e s t a t e i n r e a l property i s deemed t o be
t h e excess, i f any, of t h e amount which would have been
due t o t h e s e l l e r , under t h e c o n t r a c t , over t h e value
of t h e property t o him," (Emphasis supplied.)
This measure of damages may seem harsh because it does n o t allow
recovery f o r harm done t o t h e land, b u t t h e e f f e c t i s t h a t t h e
s e l l e r of t h e land g e t s a l l he bargained f o r a t t h e t i m e he irre-
t r i e v a b l y p a r t e d with . t h e land.
P l a i n t i f f argues damages a r e due because t h e waste provision
of t h e c o n t r a c t was v i o l a t e d . P l a W f f has a r i g h t t o tfie r e t u r n
of t h e r e a l property only i f t h e c o n t r a c t i s breached. The measure
of damages f o r t h e breach of a c o n t r a c t f o r t h e s a l e of r e a l property
i s t h a t s e t out i n s e c t i o n 17-307, R.C.M. 1947, The damage done
may be used, a s i t was h e r e , t o reduce t h e market value of t h e
land b u t i t may n o t be used, a s urged h e r e , t o allow damages where
none would be due under t h e s t a t u t o r y measure.
The judgment of t h e d i s t r i c t c o u r t i s affirmed.
Justice.
W concur:
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Chief J u s t i c e .\
Yustices. U