- Whether the District Court erred by refusing to consider reasonable rental value of the property subject to a land contract for purposes of computing damages upon foreclosure by the seller.
- Whether Montana's anti-forfeiture statute, § 28-1-104, MCA, applies to prohibit the seller from declaring a forfeiture when the purchaser tenders a portion of the property back to the seller as "full compensation" for the balance owing on the contract.
Daugherty Cattle Co. v. General Construction Co.
Plaintiff sold defendant's predecessor company $1,195,000 of real estate. A clause stated that in the event of a breach, plaintiff could keep all payments made "as reasonable rental for the use of the property and as liquidated damages." Eight year later, defendant defaulted on the contract with $338,000 left to pay. Defendant offered to return 47% of the land in exchange for the remaining payment, but plaintiff refused and filed suit to obtain possession of the land.
Trial court granted summary judgment, giving plaintiff possession of the property and allowing him to keep the $1,273,290 defendant had already paid on the contract.
Page 562 (not in casebook)
When a contract includes a forfeiture in the event of a breach, this can be avoided by making full compensation.
Past cases did not consider the value of the rental in determining damages. Starting such a thing would be up to the legislature.
"Full compensation" means paying off the remaining balance. Defendant offered 47% of the land back in exchange for cancelling the balance, but this offer was not accepted.
No, the reasonable rental value should not have been considered.
No, defendant only offered to tender part of the land back, not full compensation, as required.