Hares v. Nelson

                              No. 81-246
               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                1981


I. J. HARES and IRMA HARES,
husband and wife,
                              Plaintiffs and Respondents,


RONALD W. NELSON,
                              Defendant and Appellant.


Appeal from:   District Court of the Thirteenth Judicial District,
               In and for the County of Carbon
               Honorable William J. Speare, Judge presiding.
Counsel of Record:
   For Appellant:
         Sally M. Johnson, Red Lodge, Montana
   For Respondents:
         Joseph E. Mudd, Bridger, Montana


                              Submitted on briefs:    July 30, 1981
                                            Decided : M 2 3
                                                       V      I$@

Filed:     2 5 1981
Mr. J u s t i c e Gene B . D a l y 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 .

             Defendant-appellant,                     Ronald       Nelson,          appeals           from    a

judgment e n t e r e d i n t h e T h i r t e e n t h J u d i c i a l D i s t r i c t C o u r t

of     the     State          of    Montana,           Carbon       County,          the        Honorable

William Speare p r e s i d i n g .                 T h i s judgment          t e r m i n a t e d a con-

t r a c t f o r d e e d b e t w e e n t h e p l a i n t i f f s and t h e d e f e n d a n t d u e

t o defendant's default;                    granted p o s s e s s i o n of                the property

subject       of        the    contract           to     the      plaintiffs;             ordered           the

defendant          to    sign       all     necessary           documents            to    convey           his

i n t e r e s t t o p l a i n t i f f s ; and awarded r e a s o n a b l e a t t o r n e y f e e s

i n t h e amount of $872.50 p l u s c o s t s t o t h e p l a i n t i f f s .

             Plaintiffs,            I.     J.     and    Irma       Hares,       entered              into    a

contract        for      deed       with        the     defendant,         Ronald          Nelson,           on

December 29,            1 9 7 8 , whereby N e l s o n was t o p u r c h a s e 365 a c r e s

of    land     plus       some       buildings.              The    property,             an        old    town

s i t e , i s l o c a t e d i n Carbon C o u n t y , Montana.                       After the s a l e ,

t h e Hares rented                 their    r e s i d e n c e on t h i s p r o p e r t y .                Other

r e n t e r s a l s o r e m a i n e d on t h e p r o p e r t y .           The t o t a l p u r c h a s e

p r i c e was $ 9 2 , 7 5 0 ,       together with              i n t e r e s t of     8 percent per

annum.        N e l s o n was t o pay              this      i n monthly         i n s t a l l m e n t s of

$1,000,        with       no       downpayment,              beginning           April          1, 1 9 7 9 .

N e l s o n made p a y m e n t s A p r i l t h r o u g h O c t o b e r 1 9 7 9 .

             No payment was made on November                              1, 1 9 7 9 .              The con-

t r a c t r e q u i r e d w r i t t e n n o t i c e s t o be g i v e n and t o be s e r v e d

upon     the parties personally                         or   by     registered            mail.             The

address       in    the       contract          for     Ronald          Nelson      was        P.     0.    Box

255323, S a c r a m e n t o , C a l i f o r n i a 95825.

             The   plaintiffs              gave       notice       of    default          by    mail        and

a l s o t h r o u g h t h e Carbon County s h e r i f f .                  Within t h e f i f t e e n

d a y s a l l o w e d by c o n t r a c t t o c u r e t h e d e f a u l t ,                N e l s o n made

t h e $ 1 , 0 0 0 payment.               However,        he d i d n o t p a y t h e a t t o r n e y

f e e s r e q u e s t e d i n t h e n o t i c e and r e q u i r e d by t h e c o n t r a c t .
           No    f u r t h e r p a y m e n t s were made o n t h e c o n t r a c t .                In

January       1980,          Eric    Brabec,       a     grandson       of      the    Hares,     at-

t e m p t e d t o g i v e N e l s o n a n a c c o u n t i n g and a c h e c k f o r r e n t a l s

collected         from        the    buildings          on    the    property.            T h i s was

rejected         by     Nelson.        A t     the       same     time,      Brabec        informed

N e l s o n t h a t a d e f a u l t n o t i c e was w a i t i n g f o r him a t h i s p o s t

o f f i c e box i n Red Lodge, Montana.                         A n o t i c e of      d e f a u l t was

also     sent      to    the        California          address       as     required        by   the

contract.         N e i t h e r n o t i c e was e v e r c l a i m e d .

           The H a r e s t h e n d e c l a r e d t h e f u l l o u t s t a n d i n g b a l a n c e

on t h e c o n t r a c t d u e and p a y a b l e on F e b r u a r y 8 , 1 9 8 0 .              A t no

t i m e d i d N e l s o n o f f e r t o make f u l l payment on t h e c o n t r a c t ;

h e o f f e r e d o n l y t h e amount i n a r r e a r s .             The n o t i c e f o r t h e

b a l a n c e was a l s o m a i l e d b u t u n c l a i m e d .

           No p a y m e n t s w e r e made t o c u r e t h e d e f a u l t .             The H a r e s

b r o u g h t s u i t s e e k i n g t o compel N e l s o n t o e x e c u t e a l l n e c e s -

s a r y documents t o t e r m i n a t e h i s i n t e r e s t i n t h e c o n t r a c t f o r

deed.

           N e l s o n a n s w e r e d and c o u n t e r c l a i m e d f o r a n i n j u n c t i o n

t o r e t a i n p o s s e s s i o n o f t h e p r o p e r t y p e n d i n g t h e outcome o f

the     action,         as    well     as    for        specific       performance           of   the

contract.         N e l s o n c o n t e n d e d t h a t a n o r a l a g r e e m e n t had b e e n

r e a c h e d by t h e p a r t i e s t o f o r e s t a l l p a y m e n t s on t h e c o n t r a c t

u n t i l a p r o p e r a c c o u n t i n g of         t h e r e n t s r e c e i v a b l e from t h e

Hares      and     collected          from     other         renters       by    the      Hares     on

b e h a l f o f N e l s o n was made.

           Trial        on    t h i s matter       was       held    June       2,    1980.       The

D i s t r i c t Court        found    t h a t no a g r e e m e n t e x i s t e d t o p r e v e n t

foreclosure proceedings.                     The D i s t r i c t C o u r t e n t e r e d f i n d -

i n g s of f a c t and c o n c l u s i o n s o f l a w on J a n u a r y 1 6 , 1 9 8 1 .              A

judgment         i n accordance with               s u c h f i n d i n g s and        conclusions

was e n t e r e d on F e b r u a r y 3 , 1 9 8 1 .
        The issues presented on appeal are:
        1.   Did the trial court err in declaring a forfei-
ture?
        2.   Did the trial court err in awarding attorney fees
to the respondents?
        Appellant      Nelson   contends    that    this   Court   should
apply section 28-1-104, MCAI to prevent a forfeiture.                That
section provides:
        "Relief from forfeiture. Whenever by the
        terms of an obligation a party thereto incurs
        a forfeiture or a loss in the nature of a
        forfeiture by reason of his failure to comply
        with its provisions, he may be relieved
        therefrom upon making full compensation to
        the other party, except in case of a grossly
        negligent, willful, or fraudulent breach of
        duty. I'



        Two important reasons exist for not applying section
28-1-104, MCA, in this instance.           First, there is nothing in
the record to indicate that appellant ever complied with
section 28-1-104, MCA, by making full compensation to the
respondents. Second, appellant made no claim to the District
Court that section 28-1-104, MCA, was controlling.                 There-
fore, since this section was not addressed by the trial
court, this Court cannot          review the       application of     the
statute or the issue presented by it on appeal.               See Rules
8(c) and 12(b), M.R.Civ.P.        In Chadwick v. Giberson (1980),
     Mont.         ,   618 P.2d 1213, 1215, 37 St.Rep. 1723, 1726,
we held:     "However, it is also a well-settled rule of law
that alleged error as to issues not raised in trial court
will not be considered on appeal."                 See also, State v.
Armstrong (1977), 172 Mont. 296, 562 P.2d 1129; Spencer v.
Robertson    (1968), 151 Mont.      507, 445 P.2d          48; Clark v.
Worrall (1965), 146 Mont. 374, 406 P.2d 822.
        The trial court did not err when it declared a for-
feiture and terminated the contract for deed.               In Suburban
Homes Co. v . N o r t h ( 1 9 1 4 ) , 50 Mont.                 1 0 8 , 1 1 7 , 1 4 5 P.    2,     5,

t h i s Court held:

           " I f payment i s t o b e made i n i n s t a l l m e n t s ,
           d e f a u l t i n t h e payment o f a n y i n s t a l l m e n t i s
           a d i s t i n c t b r e a c h and g i v e s t h e vendor t h e
           right to declare a forfeiture.                             The r i g h t
           m u s t b e p r o m p t l y e x e r c i s e d , however; o t h e r -
           wise, t h e r i g h t being e x c l u s i v e l y t h a t of t h e
           p l a i n t i f f , h e w i l l be presumed t o r e g a r d t h e
           c o n t r a c t a s s t i l l v a l i d and e x i s t e n t . "

T h i s r u l e was r e a f f i r m e d i n Hansen v .           Transamerica I n s .           Co.

( 1 9 7 8 ) , 1 7 5 Mont. 273, 573 P.2d 663.                     T h i s Court i n Suburban

Homes went on t o s a y :

           "If      t h e l a t t e r ( t h e vendee) continues i n
           d e f a u l t , t h e v e n d o r , by demand f o r payment o f
           t h e b a l a n c e o f t h e p u r c h a s e money and n o t i c e
           of h i s p u rp o s e t o t e r m i n a t e t h e c o n t r a c t i n
           c a s e o f f u r t h e r d e f a u l t , may p u t t h e v e n d e e
           upon h i s g u a r d .       I f a f t e r such n o t i c e he d o e s
           n o t make payment w i t h i n a r e a s o n a b l e t i m e ,
           t h e v e n d o r may d e c l a r e t h e c o n t r a c t a t a n
           end."         1 4 5 P. a t 5 .

           I n t h i s c a s e a p p e l l a n t d i d n o t make p a y m e n t s on t h e

c o n t r a c t f o r two m o n t h s .      N o t i c e was s e n t by r e g i s t e r e d m a i l

t o h i s a d d r e s s a s p e r t h e t e r m s o f t h e c o n t r a c t and t o a Red

Lodge, Montana, a d d r e s s .              Respondents s t r i c t l y complied w i t h

t h e d e f a u l t terms of t h e contract.                The a p p e l l a n t d i d n o t .

           A p p e l l a n t c o n t e n d s t h a t t h e r e a s o n he d i d n o t p a y a n y

a t t e n t i o n t o t h e n o t i c e s o f d e f a u l t was b e c a u s e h e t h o u g h t

a n o r a l c o n t r a c t f o r a n o f f s e t had been e n t e r e d i n t o b e t w e e n

himself      and r e s p o n d e n t s .      The a l l e g e d o r a l c o n t r a c t was t o

modify      the    written        contract         by    allowing       the    appellant          to

o f f s e t r e n t , owed t o him by r e s p o n d e n t s , a g a i n s t t h e m o n t h l y

p a y m e n t s t h a t were d u e on t h e c o n t r a c t f o r d e e d .           However,

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

i n t o and t h a t a t b e s t t h e r e was m e r e l y a n a g r e e m e n t t o d i s -

c u s s some f o r m o f o f f s e t .        F u r t h e r , u n d e r s e c t i o n 28-2-1602,

MCA,    which      provides         that      "[a] contract            i n w r i t i n g may b e

altered      by    a   contract            i n writing      or    by    an    executed      oral

agreement,        and n o t o t h e r w i s e , "       t h e r e could n o t have been a
proper modification of the written contract.      Finally, the
only recourse available to the appellant after he had failed
to respond to the notices of default and forfeiture would
have been to tender full compensation to respondents.     Sec-
tion 28-1-104, MCA.   Appellant at no time offered to tender
full compensation; the best he offered was to tender the
payments owed.
       The appellant argues that he did not receive effec-
tive notice according to the terms of the contract.        The
contract states:
       "It is further mutually agreed between the
       parties hereto that any notice to be given
       hereunder shall be served upon the parties
       personally or by reqistered o certified mail
                                    ;
       directed to the party or parties to be served
       at their respective addresses as set forth,
       to wit
       "Buyer -- Ronald W. Nelson
                 P. 0 . Box 255323
                 Sacramento,     California    98525"
       (Emphasis added. )
      Not only did respondents send notice to appellant at
the California address, but they also sent notice to his Red
Lodge, Montana, address.   Further, Eric Brabec informed the
appellant that a notice of default was at the post office in
Red Lodge.   Under the circumstances, the notice was suffi-
cient, and the fact that notice of an earlier default was
personally delivered does not mean that the mailed notices
were in any way defective under the terms of the contract.
      Appellant's final contention is that the trial court
erred in awarding attorney fees to respondents.
       The contract states:
       "In the event of default of the Buyer, Buyer
       agrees to reimburse the Seller, on demand,
       for all costs and expenses of whatsoever
       nature incurred by the Seller in enforcing
       any of the provisions of this agreement,
       including but not limited to, a reasonable
       attorney's fee for attorneys employed by the
       Seller in connection with the said default."
          I t is c l e a r t h a t t h e c o n t r a c t f a i r l y provided f o r an

award o f a t t o r n e y f e e s i n t h e e v e n t o f a d e f a u l t .   The t r i a l

c o u r t j u s t l y awarded t h e f e e s i n a c c o r d a n c e w i t h t h e t e r m s

of t h e contract.
          The judgment o f t h e D i s t r i c t C o u r t i s a f f i r m e d .




                                                                                    /I
                                                                                    V
                                                    Justice



We concur: