Payne v. Buechler

No. 80-227
IN THE SUPREME COURT OF THE STATE OF MONTANA
1981

RAD LEE PAYNE,

Plaintiff and Appellant,
vs.
BILLIE BUECHLER,
Defendant and Respondent.

Appeal from: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone.
Honorable Nat Allen, Judge presiding.
Counsel of Record:
For Appellant:
Gerald J. Neely, Billings, Montana
For Respondent:
Berger, Anderson, Sinclair & Plurphy, Billings, Montana

Submitted on briefs: December 17, 1980
Decided
:lT!R 2 6 1901
Filed:
M r . C h i e f J u s t i c e F r a n k I . H a s w e l l d e l i v e r e d t h e O p i n i o n of t h e
Court.
T h i s i s a n a c t i o n by a r e a l e s t a t e b r o k e r t o c o l l e c t a
c o m m i s s i o n u n d e r a w r i t t e n c o n t r a c t g r a n t i n g him t h e e x c l u s i v e
r i g h t to s e l l t h e p r o p e r t y . D u r i n g t h e t e r m of t h e l i s t i n g , t h e
p r o p e r t y owner c a n c e l e d t h e l i s t i n g and s o l d t h e p r o p e r t y

herself. From a judgment o f t h e D i s t r i c t C o u r t of Y e l l o w s t o n e

County d e n y i n g r e c o v e r y of t h e commission, t h e b r o k e r a p p e a l s .
P l a i n t i f f and a p p e l l a n t i s Rad L e e P a y n e , a l i c e n s e d real

e s t a t e b r o k e r i n B i l l i n g s , Montana. D e f e n d a n t and r e s p o n d e n t i s
B i l l i e Buechler, t h e owner of t h e Red Rooster B a r i n S h e p h e r d ,
Montana. On J u l y 5, 1 9 7 7 t h e owner and b r o k e r e n t e r e d i n t o a

w r i t t e n a g r e e m e n t w h e r e b y t h e b r o k e r was employed t o s e l l t h e
o w n e r ' s b a r , l i q u o r l i c e n s e , f u r n i t u r e and f i x t u r e s , a t h r e e -
bedroom r e s i d e n c e and f o u r l o t s f o r $ 1 3 9 , 0 0 0 o n a 1 0 - y e a r

i n s t a l l m e n t b a s i s a t 841% i n t e r e s t . The w r i t t e n a g r e e m e n t

p r o v i d e d , among o t h e r t h i n g s :
"THIS LISTING I S AN EXCLUSIVE LISTING and you
h e r e b y a r e g r a n t e d t h e a b s o l u t e , sole and e x c l u -
s i v e r i g h t t o s e l l or e x c h a n g e t h e s a i d
described property. I n t h e e v e n t o f a n y sale by
m e o r any o t h e r p e r s o n , o r o f exchange o r
t r a n s f e r of s a i d business, personal property,
l e a s e ( s ), i f a n y , o r a n y p a r t t h e r e o f , d u r i n g
t h e term o f y o u r e x c l u s i v e employment, o r i n
c a s e I withdraw t h e a u t h o r i t y hereby given p r i o r
t o s a i d e x p i r a t i o n d a t e , I a g r e e t o pay you t h e
s a i d c o m m i s s i o n j u s t t h e same a s i f a s a l e had
a c t u a l l y b e e n consummated by you."
The a g r e e m e n t p r o v i d e d t h a t t h e c o m m i s s i o n was 1 0 % o f t h e s e l l i n g
price. The e x p i r a t i o n d a t e o f t h e a g r e e m e n t and l i s t i n g was

J a n u a r y 1, 1 9 7 8 . The a g r e e m e n t p r o v i d e d f o r r e a s o n a b l e a t t o r n e y
f e e s i n c a s e o f s u i t on t h e c o n t r a c t .
The b r o k e r p r o c e e d e d t o a d v e r t i s e t h e p r o p e r t y i n t h e

B i l l i n g s G a z e t t e , p r e p a r e d and m a i l e d b r o c h u r e s i n c l u d i n g t h e
p r o p e r t y which went t o a p p r o x i m a t e l y 3 , 0 0 0 p o t e n t i a l o u t - o f - s t a t e
b u y e r s , and showed t h e p r o p e r t y to a number of p e o p l e . He sent

f u r t h e r i n f o r m a t i o n to t h o s e making i n q u i r i e s and r e s p o n d e d to

telephone inquiries. H e expended $ 1 , 1 2 0 i n a t t e m p t i n g to s e l l
the property.
T h e r e a f t e r o n S e p t e m b e r 15, 1 9 7 7 , t h e owner s e n t a l e t t e r
to the broker a s follows:

" D e a r Rad:

"Having d e c i d e d t o k e e p t h e b a r , I w i s h t o t a k e
i t o f f t h e m a r k e t and c a n c e l my l i s t i n g .

" I f i n t h e f u t u r e I w a n t t o l i s t it I w i l l g i v e
you f i r s t chance.
"Yours t r u l y ,
" B i l l i e Buechler
"Red R o o s t e r B a r
" S h e p h e r d , Mont. 59079"

T w e l v e d a y s l a t e r o n S e p t e m b e r 27, t h e owner e n t e r e d i n t o
a n agreement t o s e l l t h e b a r to a t h i r d p a r t y f o r $120,000.

The b r o k e r f i l e d h i s c o m p l a i n t t o c o l l e c t h i s 1 0 %

c o m m i s s i o n , i n t e r e s t f r o m t h e d a t e o f s a l e , a t t o r n e y f e e s and
costs. The owner a n s w e r e d d e n y i n g t h e c o n t r a c t was e x c l u s i v e and

a l l e g i n g t h a t t h e b r o k e r ' s a u t h o r i t y was t e r m i n a t e d p r i o r to s a l e
a n d t h a t t h e p u r c h a s e r was n o t p r o c u r e d t h r o u g h a n y e f f o r t s o f
t h e broker.

P r e t r i a l d i s c o v e r y c o n s i s t e d o f i n t e r r o g a t o r i e s and
a n s w e r s o f t h e b r o k e r and o w n e r , d e p o s i t i o n s o f t h e b r o k e r , h i s

f a t h e r who was a s s o c i a t e d i n b u s i n e s s w i t h him, and t h e o w n e r .
The case came o n f o r t r i a l o n March 2 6 , 1 9 8 0 b e f o r e t h e
District Court s i t t i n g without a jury. Admitted i n e v i d e n c e

w i t h o u t o b j e c t i o n were t h e d e p o s i t i o n and e x h i b i t s t h e r e t o of t h e

b r o k e r ; t h e d e p o s i t i o n of h i s f a t h e r ; a n e x h i b i t c o n c e r n i n g t h e

b r o k e r ' s a t t o r n e y f e e s ; t h e l e t t e r f r o m t h e owner t o t h e b r o k e r
c a n c e l i n g t h e l i s t i n g ; a n e x h i b i t r e l a t i n g to t h e b r o k e r ' s c o s t s
a n d e x p e n s e s ; t h e i n t e r r o g a t o r i e s and a n s w e r s o f t h e b r o k e r and
t h e o w n e r ; and a r e a l e s t a t e l i s t i n g a g r e e m e n t o n t h e b a r b e t w e e n
t h e owner and a n o t h e r b r o k e r . The b r o k e r a l s o moved f o r

a d m i s s i o n i n e v i d e n c e o f t h e d e p o s i t i o n o f t h e owner e x c e p t i n g t h e r e f r o m

c e r t a i n p a r t s which t h e b r o k e r c o n t e n d e d were p a r 0 1 e v i d e n c e and
i n a d m i s s i b l e ; t h e owner s o u g h t a d m i s s i o n i n e v i d e n c e o f h e r
e n t i r e d e p o s i t i o n ; and t h e c o u r t r e s e r v e d a r u l i n g o n t h e
a d m i s s i b i l i t y o f t h o s e p a r t s o b j e c t e d t o and a d m i t t e d t h e rest.

A t the trial the broker, t h e o w n e r and a M r . V a n L u e s c h e n e
t e s t i f i e d i n person, a l b e i t b r i e f l y .
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 o f f a c t , c o n c l u s i o n s

o f l a w and j u d g m e n t i n f a v o r o f t h e o w n e r . The s u b s t a n c e o f t h e

c o u r t ' s f i n d i n g s was t h a t t h e w r i t t e n a g r e e m e n t g r a n t i n g t h e
b r o k e r t h e e x c l u s i v e r i g h t t o s e l l t h e b a r was e n t e r e d i n t o by

t h e b r o k e r and owner o n J u l y 5 , 1 9 7 7 ; t h a t t h e owner d i d n o t
i n t e n d t o g r a n t t h e b r o k e r t h e e x c l u s i v e r i g h t t o s e l l t h e b a r as
s h e had a t l e a s t two o t h e r l i s t i n g s w i t h o t h e r r e a l e s t a t e agen-

c i e s o n t h e same p r o p e r t y i n e f f e c t o n J u l y 5 , 1 9 7 7 ; t h a t n o con-
s i d e r a t i o n flowed from t h e b r o k e r t o t h e owner o t h e r t h a n t h e i r
m u t u a l c o n t e m p l a t i o n t h a t t h e b r o k e r would a t t e m p t t o a t t r a c t

p r o s p e c t i v e p u r c h a s e r s f o r h i s own b e n e f i t ; t h a t t h e o w n e r
a d v i s e d t h e b r o k e r o n S e p t e m b e r 1 5 , 1 9 7 7 , t h a t t h e a g r e e m e n t was

c a n c e l e d ; and t h a t t h e b r o k e r had n o t h i n g to d o w i t h a t t r a c t i n g

t h e s u b s e q u e n t p u r c h a s e r s t o c o n t a c t t h e o w n e r o r t o buy t h e
property.
From t h e s e f i n d i n g s t h e c o u r t c o n c l u d e d t h a t t h e w r i t t e n

c o n t r a c t o f J u l y 5 l a c k e d c o n s i d e r a t i o n and m u t u a l i t y and t h e
o w n e r had t h e r i g h t t o r e v o k e i t a t a n y t i m e ; t h a t t h e a g r e e m e n t

was n o t a n e x c l u s i v e a g r e e m e n t to s e l l t h e o w n e r ' s p r o p e r t y ; and
t h a t t h e owner a c t e d i n good f a i t h i n t e r m i n a t i n g t h e w r i t t e n
c o n t r a c t and d i d n o t p e r p e t r a t e a f r a u d o n t h e b r o k e r . Judgment
f o r t h e o w n e r was e n t e r e d a c c o r d i n g l y .

W e frame t h e i s s u e s o n a p p e a l i n t h i s manner:

(1) Did t h e w r i t t e n c o n t r a c t b e t w e e n t h e b r o k e r and o w n e r

l a c k c o n s i d e r a t i o n and m u t u a l i t y ?
( 2 ) Was t h e r e s u f f i c i e n t e v i d e n c e to s u p p o r t t h e f i n d i n g

t h a t t h e w r i t t e n c o n t r a c t was n o t i n t e n d e d to and d i d n o t g i v e

t h e broker the exclusive r i g h t to sell the property?

( 3 ) Did t h e owner h a v e t h e r i g h t t o c a n c e l t h e w r i t t e n
c o n t r a c t d u r i n g i t s term w i t h o u t l i a b i l i t y f o r t h e c o m m i s s i o n ?
Lack o f c o n s i d e r a t i o n was n o t r a i s e d as a d e f e n s e t o t h e

w r i t t e n c o n t r a c t by t h e owner b u t becomes a n i s s u e o n a p p e a l by

r e a s o n o f t h e D i s t r i c t C o u r t ' s f i n d i n g s and c o n c l u s i o n s . It h a s

b e e n r e g u l a r l y h e l d t h a t a b r o k e r ' s e x p e n d i t u r e of t i m e and money
t o f i n d a p u r c h a s e r is s u f f i c i e n t c o n s i d e r a t i o n f o r t h e p r o m i s e

t o p a y a c o m m i s s i o n and upon s u c h e x p e n d i t u r e o f t i m e and money,
t h e a g r e e m e n t becomes b i l a t e r a l and b i n d i n g upon t h e o w n e r .
K i m m e l v . S k e l l y ( 1 9 0 0 ) , 1 3 0 C a l . 555, 62 P. 1 0 6 7 ; G a r r e t t v.

R i c h a r d s o n ( 1 9 6 2 ) , 1 4 9 Colo. 449, 369 P.2d 566. Here t h e o w n e r
e m p l o y e d t h e b r o k e r o n a c o m m i s s i o n b a s i s and t h e b r o k e r ' s expen-
d i t u r e o f h i s t i m e and $ 1 , 1 2 0 o f h i s money t o a t t r a c t a p u r c h a s e r

c o n s t i t u t e d c o n s i d e r a t i o n f o r t h e o w n e r ' s a g r e e m e n t t o pay a
commission.
The D i s t r i c t C o u r t f u r t h e r found t h a t t h e a g r e e m e n t l a c k e d

mutuality. M u t u a l i t y o f o b l i g a t i o n was c r e a t e d by t h e e f f o r t s o f
t h e b r o k e r t o f i n d a p u r c h a s e r f o r t h e p r o p e r t y on t h e o w n e r ' s
terms and t h e b r o k e r ' s e x p e n d i t u r e o f t i m e and money i n t h i s

effort. H a r r i s v. McPherson ( 1 9 2 2 ) , 97 Conn. 1 6 4 , 1 1 5 A . 723,
24 ALR 1 5 3 0 .
W e are n e x t f a c e d w i t h t h e i s s u e o f w h e t h e r t h e e v i d e n c e

i s s u f f i c i e n t to s u p p o r t t h e c o u r t ' s f i n d i n g t h a t t h e o w n e r d i d

n o t i n t e n d t o g i v e t h e b r o k e r t h e e x c l u s i v e r i g h t to s e l l t h e
p r o p e r t y and t h e w r i t t e n c o n t r a c t was n o t a n e x c l u s i v e a g r e e m e n t

t o sell. The w r i t t e n c o n t r a c t p l a i n l y s t a t e s o n i t s f a c e t h a t
t h e b r o k e r is g r a n t e d t h e e x c l u s i v e r i g h t to s e l l t h e p r o p e r t y t o
t h e e x c l u s i o n o f t h e owner o r a n y o t h e r p e r s o n . The D i s t r i c t
C o u r t ' s f i n d i n g s and c o n c l u s i o n s t o t h e c o n t r a r y a r e c l e a r l y
b a s e d on t h e t e s t i m o n y o f t h e owner t h a t s h e d i d n o t i n t e n d to
g i v e t h e b r o k e r a n e x c l u s i v e l i s t i n g ; t h a t s h e had p r e v i o u s l y

g i v e n l i s t i n g s t o o t h e r a g e n c i e s which were s t i l l i n e f f e c t ,

o n e o f w h i c h was p r o d u c e d and a d m i t t e d i n e v i d e n c e ; and t h a t t h e
b r o k e r had w r i t t e n " n o n e x c l u s i v e " o n h e r c o p y o f t h e c o n t r a c t .
S h e a l s o c a l l e d a M r . VanLueschene who t e s t i f i e d t h a t
" n o n e x c l u s i v e l ' was w r i t t e n o n h e r c o p y o f t h e a g r e e m e n t . Her

c o p y o f t h e w r i t t e n a g r e e m e n t was n e v e r p r o d u c e d ; s h e t e s t i f i e d

t h a t s h e had d e s t r o y e d it a f t e r h e r home had b e e n v a n d a l i z e d and
molasses and k e t c h u p had b e e n p o u r e d o n i t . With t h e e x c e p t i o n

o f t h e c o p y o f a p r i o r and e x i s t i n g l i s t i n g o f t h e p r o p e r t y w i t h

a n o t h e r r e a l e s t a t e a g e n c y , a l l t h i s e v i d e n c e w a s o b j e c t e d to
u n d e r t h e p a r o l e v i d e n c e r u l e and t h e o b j e c t i o n was t a k e n u n d e r

a d v i s e m e n t by t h e c o u r t .
The p a r o l e v i d e n c e r u l e g e n e r a l l y p r o v i d e s t h a t t h e terms
o f a w r i t t e n a g r e e m e n 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 o r a l

t e s t i m o n y s u b j e c t to c e r t a i n well-recognized exceptions. See
s e c t i o n 28-2-905, MCA. The w r i t t e n c o n t r a c t s u p e r s e d e s a l l o r a l
n e g o t i a t i o n s o r s t i p u l a t i o n s which p r e c e d e d o r a c c o m p a n i e d i t s

execution. S e c t i o n 28-2-904, MCA. In accord, Danielson & Ward
v. Danielson & Neu ( 1 9 7 7 ) , 1 7 2 Mont. 55, 5 6 0 P.2d 8 9 3 ; B a t e y Land
& L i v e s t o c k C o . v . Nixon ( 1 9 7 7 ) , 1 7 2 Mont. 99, 560 P.2d 1334;

L a r s o n v. B u r n e t t ( 1 9 7 2 ) , 1 5 8 Mont. 421, 492 P.2d 921.
The owner c o n t e n d s t h a t t h e f o r e g o i n g p a r o l e v i d e n c e is
a d m i s s i b l e p u r s u a n t t o s e c t i o n 26-1-103, MCA, which p r o v i d e s :
"Where t h e d e c l a r a t i o n , a c t , o r o m i s s i o n f o r m s
p a r t o f a t r a n s a c t i o n which is i t s e l f t h e f a c t
i n d i s p u t e o r e v i d e n c e of t h a t f a c t , such
d e c l a r a t i o n , a c t , o r o m i s s i o n is e v i d e n c e as
p a r t of the transaction."

N o t so. T h i s s t a t u t e is s i m p l y a n e x c e p t i o n to t h e h e a r s a y

r u l e , C a l l a h a n v. C B & Q Ry. Co. ( 1 9 1 3 ) , 4 7 Mont. 401, 1 3 3 P.
687. I t h a s n o t h i n g t o d o w i t h t h e p a r o l e v i d e n c e r u l e which i s

a r u l e of substantive law.

The owner a l s o a s s e r t s t h a t R u l e 1 0 6 o f t h e Montana R u l e s
o f E v i d e n c e and R u l e 3 2 ( a ) ( 4 ) , M.R.Civ.P., render t h i s p a r o l evi-
dence admissible. T h e s e a r e r u l e s on a d m i s s i b i l i t y o f e v i d e n c e .
P a r 0 1 e v i d e n c e c a n n o t b e i n t r o d u c e d b e c a u s e as a matter o f

s u b s t a n t i v e l a w t h e w r i t t e n agreement c o n s t i t u t e s t h e e n t i r e

t r a n s a c t i o n between t h e p a r t i e s .
 The owner a l s o a r g u e s t h a t t h e e v i d e n c e i s a d m i s s i b l e u n d e r
a n e x c e p t i o n to t h e p a r o l e v i d e n c e r u l e set f o r t h i n s e c t i o n
1-4-102, MCA:

"For t h e proper c o n s t r u c t i o n of an i n s t r u m e n t ,
t h e c i r c u m s t a n c e s u n d e r which it w a s made,
i n c l u d i n g t h e s i t u a t i o n of t h e s u b j e c t of t h e
i n s t r u m e n t and o f t h e p a r t i e s t o i t , may a l s o be
shown so t h a t t h e j u d g e be p l a c e d i n t h e p o s i -
t i o n o f t h o s e whose l a n g u a g e h e i s t o i n t e r p r e t . "

T h i s s t a t u t e r e l a t e s t o c o n s t r u c t i o n and i n t e r p r e t a t i o n o f w r i t -
t e n i n s t r u m e n t s b u t is i r r e l e v a n t h e r e . The l a n g u a g e o f t h e

c o n t r a c t i s p l a i n and unambiguous. Under s u c h c i r c u m s t a n c e s , the
l a n g u a g e a l o n e c o n t r o l s and t h e r e is n o t h i n g f o r t h e C o u r t to
i n t e r p r e t or c o n s t r u e . S e c t i o n 28-3-401, MCA and s e c t i o n

28-3-303, MCA. The q u o t e d s t a t u t e o n l y a p p l i e s w h e r e a n ambi-

guity e x i s t s i n t h e language of t h e c o n t r a c t .
W h a v e e x a m i n e d t h e cases c i t e d b y t h e owner which s h e
e

claims s u p p o r t t h e a d m i s s i b i l i t y o f p a r o l e v i d e n c e t h a t s h e d i d
n o t i n t e n d t o g i v e t h e b r o k e r a n e x c l u s i v e l i s t i n g and d i d n o t
g i v e him s u c h a l i s t i n g . None s u p p o r t t h e a d m i s s i b i l i t y o f s u c h

p a r o l e v i d e n c e i n t h i s case. Brown v. Homestake E x p l o r a t i o n Co.
( 1 9 3 4 ) , 98 Mont. 3 0 5 , 39 P.2d 1 6 8 , i n v o l v e d a l e n g t h y w r i t t e n
c o n t r a c t a m b i g u o u s o n i t s f a c e and p a r o l e v i d e n c e w a s a d m i t t e d a s

a n a i d t o i n t e r p r e t a t i o n s , a c l e a r e x c e p t i o n to t h e p a r o l e v i -
dence rule. I n P l a t t v. C l a r k ( 1 9 6 3 ) , 1 4 1 Mont. 3 7 6 , 3 7 8
P. 2d 235, p a r o l e v i d e n c e w a s a d m i t t e d , n o t t o v a r y o r a l t e r t h e

terms o f a w r i t t e n c o n t r a c t , b u t t o show t h a t a c o n d i t i o n p r e c e -
d e n t t o a n o t h e r w i s e v a l i d and b i n d i n g lease had n o t o c c u r r e d and
t h e r e f o r e t h e w r i t t e n lease n e v e r became e f f e c t i v e . See g e n e r a l l y
Anno: A p p l i c a b i l i t y of Par01 Evidence Rule t o W r i t t e n L i s t i n g
A g r e e m e n t o f R e a l E s t a t e B r o k e r , 38 ALR2d 5 4 2 .
Here t h e p a r o l e v i d e n c e d i r e c t l y c o n t r a d i c t s t h e p l a i n and

u n a m b i g u o u s l a n g u a g e of t h e w r i t t e n i n s t r u m e n t ; i t d o e s n o t f a l l

w i t h i n any recognized e x c e p t i o n p e r m i t t i n g i t s admission i n

e v i d e n c e , and is c l e a r l y i n a d m i s s i b l e . Although t h e D i s t r i c t
C o u r t d i d n o t r u l e o n t h e b r o k e r ' s o b j e c t i o n to i t s a d m i s s i o n i n
e v i d e n c e , i t s f i n d i n g s and c o n c l u s i o n s c l e a r l y r e f l e c t t h a t t h e

c o u r t b a s e d them on t h i s i n a d m i s s i b l e e v i d e n c e . T h i s was e r r o r .
The l a s t i s s u e c o n c e r n s w h e t h e r t h e owner had t h e r i g h t

t o c a n c e l t h e w r i t t e n l i s t i n g a g r e e m e n t d u r i n g i t s t e r m and

t h e r e b y deny t h e b r o k e r a commission. The w r i t t e n a g r e e m e n t
p l a i n l y gave t h e b r o k e r an e x c l u s i v e r i g h t t o sell t h e p r o p e r t y
d u r i n g t h e term o f t h e a g r e e m e n t ; p r o v i d e d t h a t i f t h e o w n e r o r

any o t h e r person sold o r transferred the property, t h e owner
would p a y t h e b r o k e r t h e c o m m i s s i o n ; and f i n a l l y p r o v i d e d t h a t i f
t h e owner w i t h d r e w t h e b r o k e r ' s e x c l u s i v e a u t h o r i t y t o s e l l t h e

property, t h e owner would p a y t h e b r o k e r t h e c o m m i s s i o n . The
D i s t r i c t C o u r t h e l d t h a t t h e owner had t h e r i g h t t o r e v o k e t h e
a g r e e m e n t a t a n y t i m e and d e n i e d t h e b r o k e r a n y c o m m i s s i o n .

A s we have p r e v i o u s l y i n d i c a t e d , once t h e b r o k e r began

p e r f o r m a n c e u n d e r t h e w r i t t e n a g r e e m e n t by e x p e n d i t u r e o f h i s
time, e f f o r t s and money t o a t t r a c t a p u r c h a s e r on t h e o w n e r ' s
terms, t h e w r i t t e n a g r e e m e n t became b i l a t e r a l and b i n d i n g o n b o t h
parties. I t c o u l d n o t be u n i l a t e r a l l y t e r m i n a t e d b y t h e o w n e r

w i t h o u t payment o f t h e b r o k e r ' s c o m m i s s i o n . Piatt & H e a t h Co.

v . W i l m e r ( 1 9 3 0 ) , 8 7 Mont. 382, 288 P. 1 0 2 1 ; McDonald & Co. v.
F i s h t a i l C r e e k Ranch ( 1 9 7 7 ) , 1 7 5 Mont. 5 3 , 572 P.2d 1 9 5 ; Anno:
8 8 ALR2d 9 3 8 , 966.
F l i n d e r s v . H u n t e r ( 1 9 2 2 ) , 60 U t a h 314, 208 P. 526, is

c i t e d by t h e owner f o r t h e p r o p o s i t i o n t h a t a n a g e n c y r e l a -
t i o n s h i p is r e v o c a b l e by t h e owner u n l e s s t h e b r o k e r h a s a n

i n t e r e s t i n the property. The b r o k e r ' s c o n t e n t i o n i n t h i s case
i s n o t t h a t t h e owner l a c k s t h e r i g h t t o t e r m i n a t e t h e b r o k e r ' s

authority. The b r o k e r ' s c o n t e n t i o n is t h a t i f t h e o w n e r d o e s
r e v o k e , h e i s n o n e t h e l e s s l i a b l e f o r t h e b r o k e r ' s c o m m i s s i o n by
t h e c l e a r l a n g u a g e of t h e w r i t t e n a g r e e m e n t . Flinders does not

s u p p o r t t h e o w n e r ' s c o n t e n t i o n t h a t s h e is n o t l i a b l e f o r t h e

commission.
I n summary, t h e D i s t r i c t C o u r t ' s f i n d i n g s and c o n c l u s i o n s
that the written agreement lacked consideration and mutuality
and that the agreement was not an exclusive agreement to sell
the property were error as a matter of law.
The judgment of the District Court denying the broker
his commission is reversed. The cause is remanded to the
District Court for entry of judgment for plaintiff broker in
the amount of 10% of the price at which the property was sold
by defendant owner to Eugene F. Schaul and Karen M. Schaul,
his wife, under the agreement dated September 27, 1977, plus
reasonable attorney fees and costs.

&
*
4
g
% Chief Justice

We concur:

Mr. Justice Daniel J. Shea dissents and will file a written
dissent later.
 -----
No. 80-227
-----

PAYNE V. BUECHCER

DISSENT

J u s t i c e D a n i e l J . Shea

Opinion handed down 5/26/81

D i s s e n t handed down 5/27/81
Mr. Justice Daniel J. Shea dissenting:

If compelled to make a choice, I would affirm the
judgment. The majority is clearly in error by invoking the
parol evidence rule to prevent the defendant from proving that
she had an agreement with the plaintiff that the real estate
listing contract was nonexclusive. But even though I believe
the majority is in error, this case was so poorly tried, and
the findings and conclusions are so inadequate that I cannot
in good conscience vote to affirm the judgment. It would be
an injustice to do so. Justice requires that the judgment be
vacated, and that the case be tried again.
REASONS WHY THE JUDGMENT MUST BE VACATED AND THE CASE TRIED AGAIN
This case took no more than an hour to try. Attorneys
for both sides stipulated that three depositions (that of the
plaintiff,Rad Lee Payne, that of his father, Carl Payne, and
that of the defendant, Billie Buechler) be admitted in evidence.
The only exception was that plaintiff's attorney reserved an
objection to a part of the defendant's deposition testimony on
her claim that she had a listing agreement with plaintiff with
the word "nonexclusive" written on it in the defendant's
handwriting. Plaintiff's attorney claimed that this testimony
was barred by the parol evidence rule.
In addition to the depositions, the parties agreed that
all pretrial interrogatories and their answers be admitted in
evidence.
The record does not disclose the answer, but I surmise
that the parties were pressured into speeding up the trial--
but it was hurried up so much that it was hardly a trial at all.
The trial transcript of testimony covers a total of sixteen
pages. The plaintiff did not testify to the circumstances
surrounding the execution of the listing agreement. He only
testified to the amount of work he put in trying to sell
the defendant's property after he had obtained the listing.
Nothing in the record discloses why he did not testify on
the circumstances surrounding the execution of the listing
agreement on July 5, 1977. In effect, plaintiff's case-in-
chief on the main legal question was based entirely on
depositions.
Defendant's case was not much longer. Defendant was
called to the witness stand and her counsel asked her if
she understood that "your deposition has been introduced
into evidence in lieu of a great deal of your testimony . . ."
and she replied'kes." She then identified another listing
agreement that was in existence and still in effect when she
signed the listing agreement with plaintiff on July 5, and
this listing agreement was introduced into evidence with no
objection from the plaintiff. She then testified that she
refused to sign an exclusive listing agreement with the
plaintiff.
She testified that Mr. Van Lueschene was present when
she signed the listing agreement with plaintiff. Next, she
testified that she sold the property on her own and that
plaintiff did nothing to find the buyer. Her testimony on
direct examination covers four pages.
Plaintiff's attorney then cross-examined her by asking
her if she had found her copy of the listing agreement that
she had with the plaintiff, and she again explained how her
copy was destroyed as a result of vandalism. This cross-
examination covers one-and-a-half pages of trial transcript.
Next, defendant called Mr. Van Lueschene as a witness,
and he testified that he was present when plaintiff and
defendant signed the listing agreement, that he had seen the
plaintiff filling ouk the listing agreement and that he had seen
-11-
 the
hord "nonexclusive" written on the defendant's copy of the
listing agreement. Before Van Lueschene testified to the
circumstances surrounding the execution of the listing agree-
ment, plaintiff's attorney asked for a continuing objection
on the ground that this testimony should be barred by the
parol evidence rule. The entire testimony (direct and cross)
covers five pages of the trial transcript.
In rebuttal, plaintiff called the defendant as an adverse
witness. She was asked if she agreed with Van Lueschene's
testimony to the effect that the word "nonexclusive" was
written on the front of her copy of the listing agreement,
and she replied yes. He then attempted to impeach her by
revealing that at her deposition, she had testified that the
word"nonexc1usive" was handwritten on the back side of her
copy of the listing agreement. Both sides then rested.
Plaintiff then submitted proposed findings and conclusions
to the court and the defendant, who did not have any prepared,
was given time to get them submitted. Later, the court adopted
verbatim the defendant's proposed findings and conclusions, and
entered judgment for the defendant. These findings and con-
clusions are absolutely inadequateland I could not put the stamp
of approval on a judgment based on them.
The findings and conclusions contain no reference to
the claimed "ncnexclusive" listing agreement. The findings
are absolutely silent as to whether plaintiff knew that defendant
had one or more listing agreements in effect when the listing
agreement was signed on July 5, 1977. In fact, there is no
finding which covers the main issue of this appeal--whether
parol evidence of the claimed "nonexclusive" listing agreement
should be admitted.
The only finding which remotely bears on this issue,
finding no. 3 states:
 "That the contract was not intended by the
defendant to be an exclusive right of the
plaintiff to sell her property; that she had
at least two other listing agreements with other
real estate agencies in effect on July 5, 1977,
whereby they also had the right to sell the
property."
This finding is in essence, the entire basis for
the trial court's decision, for the question of consideration
and the question of the letter of termination are not dis-
positive 'of this case.
The only way that the judgment should be affirmed on
the basis of the findings and conclusions is to invoke the
doctrine of implied findings, and I am not about to do so.
Too often it is used to get trial courts off the hook who
have simply not done their job. If the case was well-tried
and there was a good evidentiary record in existence, I
would remand only for further findings. But here, because
there was hardly a trial at all, I would order a new trial.
I add that neither the parties nor the trial court have
pointed out a glaring discrepancy as to who was present on
July 5, 1977, when the listing agreement was signed. In
their depositions, the plaintiff, Rad Lee Payne, and his
father, Carl Payne, testified that both of them were with
the defendant when they discussed the listing agreement and
when it was signed. Both of them also testified that Mr.
Van Lueschene was not present on July 5. On the other hand,
the defendant and Van Lueschene testified that only the
defendant, the plaintiff, and Van Lueschene were present on
July 5 when the listing agreement was signed. Both of them
unequivocally testified that Carl Payne was not there. Someone
is not telling the truth, and who was present is vital to the
question of whether plaintiff wrote "nonexclusive" on defendant's
copy of the listing agreement.
For these reasons, I would vacate the judgment and remand
for a full trial--before a different judge. I turn now to a
discussion of why the majority is wrong in reversing the
case and ordering judgment to be entered for the plaintiff.
Before proceeding to an analysis of the applicable rules,
I think it necessary to expand on the facts stated in the

majority opinion, and also to put this case in a procedural
perspective as to how it was tried. The procedural question
will be considered first.
As previously indicated, the depositions of plaintiff,
of defendant, and of Carl Payne, were admitted in evidence.
Plaintiff did reserve an objection, however, to defendant's
claim that she had a "nonexclusive" listing--the objection
was apparently aimed at keeping out of evidence her discussions
with the plaintiff where she claims to have insisted on a
"nonexclusive" listing.
The fact is, however, that the depositions of plaintiff
and of Carl Payne, cover their version of discussions they
had with plaintiff as to whether the listing was to be
exclusive or nonexclusive, and as to whether plaintiff or
anyone else had written "nonexclusive" on defendant's copy
of the listing agreement. Their deposition testimony also
covers their claim that they believed that plaintiff did not
have the property listed with anyone else at the time she
signed their listing agreement, even though they knew she had
previously had listing agreements in effect with other real
estate agencies.
For reasons of fairness alone, the trial court should
also have been allowed to consider the testimony of the plaintiff
and of Van Lueschene on their version of the signing of the
listing agreement. See Rule 32(a) ( 4 ) , M.R.Civ.P. But aside
from this, the majority has missed the point in applying the
par01 evidence rule to bar the evidence. The evidence clearly
falls within the exceptions to the parol evidence rule
(set out in the statute itself, section 28-2-905, MCA),
but unfortunately, the majority opinion does not discuss
the exceptions other than to state that the evidence "does
not fall within any recognized exception permitting its
admission in evidence . . ." The exceptions, however, clearly
apply to this case.
ADDITIONAL FACTS NOT MENTIONED IN THE MAJORITY OPINION
I proceed next to an expansion of the facts beyond those
stated in the majority opinion, because it must be done in
order to reach the legal issues not covered in the majority
opinion.
In her deposition, the defendant explained what had
happened to her copy of the listing agreement:
"And on my exhibit, or on my contract which
was destroyed when my house was broken into,
I lost all my bank statements, lost all my
records from my bar, I lost all my bank
statements from last year, everything that
I had, because when they broke into my bar
or into my house, they poured ketchup, mustard,
molasses, anything they could find in my house,
all over everything, I mean there was no way that
I could salvage anything . . ."
At trial, plaintiff's attorney did not object to this
testimony introduced through defendant's deposition.
He did object, however, to the remainder of the
defendant's answer in the deposition, which states:
"I told him right then, I said I would not list
this exclusively; he said: 'Well, we really
don't do this this way, but' he said, 'we will
make an exception.' So on the top of my listing
he wrote 'non-exclusive.' Well, I have nothing
to prove that he wrote this, except that people
-
-

that were sitting there listening to me say
this. "
The basis of the plaintiff's objection was that the
parol evidence rule barred admission of this testimony.
 Further, at trial, plaintiff's counsel, in his first
question to the defendant on cross-examination, opened up
the question of the defendant's missing copy of the listing
agreement. He asked her if she had ever found her copy,
and she again repeated what she said in her deposition. She
said that vandals had broken into her house and, among other
things, had poured ketchup, mustard and molasses over many
of her papers, including the listing agreement, and that the
papers had been ruined. In explaining how she threw out many
of the items she said:
"I didn't even realize what I was throwing
out, because there was so much stuff there
that I couldn't salvage. They had poured
molasses and ketchup and everything out of
my cupboards all over my papers."
By her deposition testimony, and by her trial testimony,
admitted without objection, defendant laid a f~undationunder
Rule 1004(1), M.R.Evid., for proof of the contents of a lost
or destroyed document--here the listing agreement. The next
question, then, is whether defendant and Van Lueschene were
entitled to testify that plaintiff had written "nonexclusive"
on her copy of the listing agreement. I have no doubt that
such testimony is admissible.
Contrary to the implications of the majority opinion, we
are not dealing with only the plaintiff's copy of the listing
agreement. Rather, we are dealing with the plaintiff's copy
and defendant's copy, and the defendant claims that her copy
contradicts the contents of the plaintiff's copy. Although
the effect of defendant's offered evidence is clearly to
alter the terms of the listing agreement copy held by the
plaintiff, the evidence was offered to show that another copy
of the same listing agreement existed, and that it contradicted
the plaintiff's copy. Proof of the contents of a lost or
destroyed document is permitted under Rule 1004 (l), M.R.Evid.
The parol evidence rule certainly would not bar evidence that
defendant's copy contained the word "nonexclusive" in the
plaintiff's handwriting. Once this evidence was admitted,
the parol evidence rule would not bar the evidence needed to
explain the patent contradiction in the listing agreements.
Both versions cannot be right.
The logic of the majority opinion means that the outcome
would always have to be controlled by the copy of the
contract held by the broker. If a broker actually wrote
different terms on the seller's copy of the listing agreement,
he would never have to worry about being bound by what he
had written on the seller's copy.
If this case were sufficiently tried to bring out the
facts and if sufficient findings had been entered, I would
affirm the judgment for two reasons. First, the two copies
of the listing agreement (one of which the contents had been
proved by first laying a foundation of a lost or destroyed
document), not only created an ambiguity in need of explanation,
they created a patent contradiction for which the explanation
was vital. Because the actual copy of defendant's listing
agreement was not produced, the question becomes one of credibility:
Either the trial court believes plaintiff and his father that
neither of them wrote "nonexclusive" on defendant's copy of
the listing agreement, or the trial court believes the defendant
and Van Lueschene,that plaintiff did write "nonexclusive" on
defendant's copy of the listing agreement.
Second, assuming that "nonexclusive" was never written
on defendant's copy of the listing agreement, defendant still
could claim on the basis of illegality, invalidity, or fraud
(section 28-2-905, MCA) that the listing was nonexclusive.
If the defendant told plaintiff that she dici not want an
exclusive listing agreement, and if she told plaintiff that
she already had a listing agreement in effect, what right
would plaintiff have to claim that he had an exclusive listing
agreement and be entitled to a real estate commission under
the facts here? Assuming these facts, plaintiff would have
known he had no right to receive an exclusive listing because
defendant had no right to give him one. In such event, the
exclusive listing would be invalid (an exception to the parol
listed
evidence ruk/in section 28-2-905(1)(b), MCA), and any attempt
by the plaintiff to recover on this basis of an exclusive
listing could well be given the name of fraud (another exception
to the parol evidence rule listed in section 28-2-905(2), MCA).
My explanation follows.
THE MAJORITY RATIONALE FOR EXCLUSION OF THE EVIDENCE
Without any analysis, the majority collects the following
evidence under one umbrella and implicitly declares it in-
admissible by application of the parol evidence rule:
". ..
The District Court's findings and
conclusions are clearly based on the testimony
of the owner that she did not intend to give
the broker an exclusive listins; that she
had previously given listings t b other agencies
which were still in effect, one of which was
produced and admitted in evidence; and that the
broker had written 'nonexclusive' on her copy
of the contract. She also called Mr. Van
Lueschene who testified that 'nonexclusive' was
written on her copy of the agreement. Her copy
of the written agreement was never produced; she
testified that she had destroyed it after her
home had been vandalized and molasses and ketchup
had been ~ouredon it. With- exception -- -
-- -- -- -- - -
- the of a
prior andLexisting listing - - property with
of the
another --
real estate agency, -- evidence
all this
was objected to under - par01 evidence rule
the
and -=n
-- co was taken under advisement
by - -
- the court." (~mphasis added.)
Only once does the majority refer to the parol evidence rule
(section 28-2-905, MCA), and never to the exceptions contained
in the same statute. They state: "The parol evidence
rule generally provides that the terms of a written agree-
ment cannot be altered or contradicted by oral testimony
subject - certain well-recognized exceptions.
to See section
28-2-905, MCA." (Emphasis added.) After summarizing the
evidence that apparently violates the parol evidence rule
(previously discussed), and never setting out the exceptions
to the parol evidence rule, the opinion states: "Here the
parol evidence directly contradicts the plain and unambiguous
language of the written instrument; - - -not fall within
it does -
any recognized exception permitting its admission - evidence,
in

- - clearly inadmissible
and is . . ." (Emphasis added. )
I find such analysis and rationale to be seriously
defective.
THE PAROL EVIDENCE RULE AND ITS APPLICATION HERE
All of the evidence (excluded by the majority opinion)
is plainly admissible by the very terms of the entire parol
evidence statute, section 28-2-905. Section 28-2-905 (cited
but neither quoted nor applied by the majority) states:
"(1) Whenever the terms of an agreement have been
reduced to writing by the parties, it is to be
considered as containing all those terms.
Therefore, there can be between the parties
and their representatives or successors in
interest no evidence of the terms of the agree-
ment other than the contents of the writing
except - - following cases:
in the
"(a) when a mistake or imperfection of the
writing is put in issue by the pleadings;
" (b) when the validity - - agreement
of the
is - - - in dispute.
- the fact
"(2) This section does not exclude other evidence
of the circumstances under which the agreement is
made or to which it relates, as defined in 1-4-102,
or other evidence to explain an extrinsic ambiguity
- to
or - establish illegality - fraud.
or
"(3) The term 'agreement'. . .
includes deeds ...
as well as contracts between parties." (Emphasis added,)
The validity of the agreement is "the fact in dispute"
and therefore falls within the exception listed in section
28-2-905(1) (b), MCA. That is, the plaintiff broker contends
he had an exclusive listing and was therefore entitled to
a commission. But the defendant owner contends the broker
had only a "nonexclusive" listing, and that he wrote "non-
exclusive" on her copy of the listing agreement. Assuming
the defendant to be correct, the listing agreement being
held by the plaintiff broker would be invalid as an "exclusive"
listing. Applied here, it would mean that under the facts
here, the plaintiff could not collect a commission.
Further, although the pleadings were not so framed, the
clear intent of the defendant was to show that the plaintiff
broker was holding an -
illegal exclusive listing agreement,
that in fact, when all the facts are considered, including
her lost or destroyed copy of the listing agreement, the
broker was holding a "nonexclusive" listing agreement. This
being so, the evidence would be admissible under section
28-2-905(2). If defendant prevailed (that is, if the trial
court believed plaintiff and the witness Van Lueschene), the
plaintiff broker would be holding an -
illegal exclusive listing
agreement, and he could not recover a commission based on the
facts of this case.
The essence of defendant's case is that she tried to
show that the exclusive listing held by the broker did not
constitute the entire transaction--that her copy of the listing
agreement stating "nonexclusive", flatly contradicted plaintiff's
copy of the listing agreement. If plaintiff had actually
written "nonexclusive" on the listing agreement, or otherwise
agreed to a nonexclusive listing, I have no doubt he would
be guilty of fraud against the defendant by then trying to
collect a commission based only on his copy of the listing
agreement showing that he had an "exclusive" listing. For
this reason, all of the testimony would be admissible under
the fraud exception set out in section 28-2-905(2).
-20-
 Under all of the circumstances here, admitting the
evidence would mean that the trial court was faced with a
question of fact as to who to believe. If he believed
plaintiff and his father, he could still order that the
commission be paid. But if he believed the defendant and
the witness Van Lueschene, he could rule (as he did here)
that the plaintiff held only a "nonexclusive" listing and
was therefore not entitled to collect a commission under the
facts of the case.
I have set forth the reasons why I cannot affirm the
District Court judgment, and I have also set forth the reasons
why I cannot abide by the majority opinion. One more factor,
however, must be addressed--and that is the evidentiary
question posed by the need to introduce evidence of the
contents of the destroyed listing agreement.
PROOF OF CONTENTS OF THE DESTROYED COPY OF THE DEFENDANT'S
LISTING AGREEMENT
An implied assumption of the majority decision is that
even if the defendant produced a copy of her listing agreement
with "nonexclusive" written in the plaintiff's handwriting,
that defendant would still be bound exclusively by the
plaintiff's copy of the listing agreement. Such decision
has behind it neither logic nor justice.
The first question on defendant's listing agreement
is: could the listing agreement be introduced in evidence
if it still existed. I have no doubt that it could, for
her copy was every bit as much an original as was the
plaintiff's copy. Further, if her copy contained the word
"nonexclusive" written on it, in plaintiff's handwriting,
it would defeat plaintiff's right to recover the real estate
commission. Simple fairness requires that defendant be
permitted to introduce her copy of the agreement, just as
simple fairness requires that plaintiff be permitted to
introduce his copy of the listing agreement. The question
then becomes one of whether plaintiff, who claims to have
thrown away her copy of the listing agreement because it was
virtually destroyed by vandals, should be permitted to
establish the contents of this document anyway. The law
permits her to do so.
The applicable rule of evidence to prove the contents
of an original or copy where it has been lost or destroyed,
Rule 1004(1), M.R.Evid., provides:
"The original is not required, and other evidence
of the contents of a writing, recording, or
photograph is admissible if: . .
. (1) All originals
are lost or have been destroyed, unless the
proponent - -or destroyed - -in bad faith;
lost them -
... " (Emphasis added.)
The defendant's copy of the listing agreement was an
original within the meaning of the rules of evidence. Rule
1001(3), M.R.Evid., defines original as follows:

"(3) An original of a writing or a recording
is the writing or recording itself, of any
counterpart intended to have the same effect
by a person executing or issuing it . . ."
The evidence establishes that the listing agreements were
form listings, with a carbon in between the top and the
second copy. With the exception of the word "nonexclusive"
being written on defendant's copy by the plaintiff (according
to the plaintiff's testimony) after she received her copy,
the listing agreement was filled out all in one motion. The
defendant's copy was also an original.
Under Rule 1004(1), supra, the defendant could prove the
contents of her copy of the listing agreement by her testimony
and by Van Lueschene, who testified that he saw plaintiff
write "nonexclusive" on the defendant's copy. The only
question for the trial court to determine under this rule
was whether defendant threw away her copy in bad faith

after she claimedit was made worthless by the vandals. If
the court ruled she did it in bad faith, it would rule that
she could not introduce through her testimony and that of
Van Lueschene, evidence of the contents of this listing
agreement. But if it ruled that she was in good faith when
she threw away the listing agreement, evidence of the contents
of her listing would be permitted. In any event, this would
be a question of fact for the trial court to first determine.
If the trial court ruled defendant was not in bad faith
in throwing away her copy of the listing agreement, she could
testify, and so could witness Van Lueschene, to its contents--
that plaintiff wrote the word "nonexclusive" on her copy.
The trial court was not, of course, required to believe either
the defendant or Van Lueschene. But if he did, it would be
a devastating admission against plaintiff's interest, for it
would flatly contradict his claim that he had an "exclusive"
listing. Nonetheless, once evidence of the contents of both
these writings were in evidence, a flat contradiction arose.
In this situation, the trial court undoubtedly would have the
right to hear evidence from both sides as to the circumstances
surrounding the execution of the listing agreements. The
trial court would well decide either way depending on whose
version of the facts it believed. In any event, the par01
evidence rule would not prevent introduction of evidence
to explain the contradiction existing between the two listing
agreements. Both of them could not be right.
For the reasons stated, I would vacate the judgment and
remand for a new trial.

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