AYE v FIX

Annotate this Case

Download PDF

No. 13795 IN THE SUPREME COURT OF THE STATE OF MONTANA 1978 MARGARETTE M. AYE, et al., Plaintiffs and Appellants, -vsADOLPH FIX et al., Defendants and Respondents. Appeal from: District Court of the Sixteenth Judicial District, Honorable A. B. Martin, Judge presiding. Counsel of Record: For Appellants : Lucas, Jardine, Monaghan, Miles City, Montana James P. Lucas argued and Thomas M. Monaghan argued, Miles City, Montana Patrick J. Kelly, Miles City, Montana Jerome J. Cate, Billings, Montana For Respondents: Gene Huntley argued, Baker, Montana R. W. Heineman, Wibaux, Montana Submitted: i Filed: KL i7J .J[ b March 10, 1978 Decided : .!!d-hv '. . 7378 M r . J u s t i c e John C. Harrison delivered the Opinion of t h e Court : P l a i n t i f f s appeal from an order of the D i s t r i c t Court, Carter County, assigning t h e i r s t a t e leased lands t o defendant and granting him $20,590, l e s s c e r t a i n r e n t a l s , plus i n t e r e s t , during t h e time he was dispossessed from the s t a t e leased lands. O n January 28, 1961,Mhrgarette Aye and John A. Aye, a s administrators of the e s t a t e of Lester Aye, leased about 5,104 a c r e s of land i n Carter County, Montana, t o Adolph Fix. This l e a s e included the l e a s e on the "school section", S t a t e Lease No. 49401, and provided f o r an annual cash r e n t a l of $18,000 payable i n advance. Also on January 28, 1961, Lona B. Aye, the widow of Lester Aye, leased 834 acres ( r e f e r r e d t o a s the "Perso" place) t o Adolph Fix. This l e a s e provided f o r an annual r e n t of $1.00 payable i n advance. Both leases expired on April 20, 1964. I n December 1963, while the leases were s t i l l i n e f f e c t , W i l l i s Aye (brother of Lester Aye, deceased, and husband of Lona Aye, L e s t e r ' s widow) s o l i c i t e d Adolph Fix t o buy the Perso place f o r $50 per acre. was a A t t r i a l Adolph Fix t e s t i f i e d t h i s high p r i c e f o r land a t t h a t time, but W i l l i s Aye offered the school l e a s e adjoining the Perso place i f Fix would pay $50 per a c r e f o r the Perso place. Adolph F i x f u r t h e r t e s t i f i e d t h a t he thought the school l e a s e was owned by John Aye, so he received assurance from John Aye t h a t the s t a t e l e a s e would go with the Perso place. Fix s t a t e d he paid t h e $50 per a c r e , $41,718 t o t a l , only because the s t a t e lease was included a s p a r t of the consideration. Fix received a deed t o the Perso place but no assignment of t h e lease. A t the t r i a l , W i l l i s Aye t e s t i f i e d the reason he did not convey the s t a t e l e a s e t o Fix when he sold the Perso place was because i t was i n the Lester Aye e s t a t e , and he did not have the a u t h o r i t y t o convey i t . On January 3, 1964, s h o r t l y before the e x p i r a t i o n of the f i r s t l e a s e , another l e a s e was entered i n t o between John Aye and Adolph Fix. This l e a s e , f o r the 5,000 acres o t h e r than the Perso place, was prepared by John Aye and contained t h e same language r e l a t i v e t o the s t a t e lease a s did the e a r l i e r l e a s e , "together with l e a s e on School lands." Fix t e s t i f i e d t h a t he objected t o t h i s language and reminded John Aye t h a t he, Fix, was supposed t o have the l e a s e on the school lands. t e s t i f i e d t h a t Aye explained t o h b t h a t s t a t e l e a s e a t t h e end of the term. Fix a l s o he would g e t the Fix t e s t i f i e d he accepted these assurances a s a s u f f i c i e n t assignment of the lease. The 1964 lease a l s o contained a provision granting Fix the f i r s t r i g h t t o buy the leased premises o r t o meet any bid offered. Fix paid the c o s t of the s t a t e l e a s e t o John Aye d i r e c t l y u n t i l Aye died i n 1966. the s t a t e . I n 1967, Fix made lease payments t o The s t a t e objected t o receiving payments from Fix because he was not the lessee of record. Fix t e s t i f i e d t h a t he then consulted with W i l l i s Aye, personal representative f o r both t h e John Aye and the Lester Aye e s t a t e s , and asked W i l l i s Aye f o r the assignment of the s t a t e lease. W i l l i s Aye t o l d Fix t h a t he would g e t the assignment, but f o r the time being he would have t o s e t t l e f o r a sublease. On March 18, 1970, W i l l i s Aye, a s administrator of the e s t a t e of John Aye, gave n o t i c e t o Fix t h a t t h e leasing agreement was terminated because "it i s contemplated t h a t s a i d property w i l l be sold." The tenancy on t h e s t a t e lease was cancelled by l e t t e r from John R. Carr dated February 12, 1971. A further n o t i c e t o q u i t was given by W i l l i s Aye, "Agent f o r the Aye family" on February 3, 1971, " t o n o t i f y you t h a t t h e Aye ranch * * * has been sold." The Aye family s p e c i f i c a l l y assigned the s t a t e l e a s e t o the buyers, Ralph and Frances Bruski. Fix refused t o vacate the s t a t e leased land and the present l i t i g a t i o n ensued. The t r i a l court ruled Fix was t h e owner of the s t a t e lease by v i r t u e of an o r a l agreement between Fix and John Aye t h a t t h e s t a t e l e a s e land would be assigned a s p a r t of the Perso place land s a l e . P l a i n t i f f s r a i s e the following i s s u e s on appeal: 1. Does the s t a t u t e of frauds bar testimony of an alleged o r a l agreement t o s e l l or assign a s t a t e lease when w r i t t e n lease agreements s p e c i f i c a l l y r e f e r t o a sublease of the s t a t e leased lands? 2. I s a s a l e or assignment of a s t a t e lease a t r a n s f e r of r e a l property which must be i n w r i t i n g t o be v a l i d under the . s t a t u t e of l i m i t a t i o n s ? 3. Was the alleged o r a l agreement f o r the s a l e o r assign- ment of t h e s t a t e lease barred by the s e c t i o n 93-2604, R.C.M. 1947, s t a t u t e of l i m i t a t i o n s ? 4. Did John Aye o r W i l l i s Aye have the l e g a l a u t h o r i t y t o s e l l o r assign the s t a t e l e a s e t o Adolph Fix? 5. Did Adolph Fix waive h i s r i g h t i n s t a t e l e a s e No. 49401 when he f a i l e d t o e x e r t any preference a t the time the l e a s e was up f o r renewal? 6. M y an o r a l agreement t o s e l l o r assign a s t a t e l e a s e a be made w i t h o u t s t a t e approval? W s h a l l discuss only issues 1 and 2 , since they a r e e d i s p o s i t i v e of t h i s appeal. Evidence r e l a t i n g t o any o r a l agreements between t h e p a r t i e s should have been excluded under t h e s t a t u t e of f r a u d s , s i n c e t h e p a r t i e s ' agreement had been reduced t o w r i t i n k . Montana law i s c l e a r t h a t evidence of o r a l r e p r e s e n t a t i o n s , r e l a t i n g d i r e c t l y t o t h e s u b j e c t matter of a c o n t r a c t , i s n o t admissible t o add t o o r a l t e r t h e provisions of a w r i t t e n contract. I n Hosch v. Howe, (1932), 92 Mont. 405, 410, 16 P.2d 699, 700, t h i s Court s a i d : "' * * * The c h i e f and most s a t i s f a c t o r y index i s found i n t h e circumstance whether o r n o t t h e p a r t i c u l a r element of t h e a l l e g e d e x t r i n s i c negot i a t i o n i s d e a l t with a t a l l i n t h e w r i t i n g . I f i t i s mentioned, covered o r d e a l t with i n t h e w r i t i n g , then presumably t h e w r i t i n g was meant t o r e p r e s e n t a l l of t h e t r a n s a c t i o n on t h a t element. '" I n t h e i n s t a n t case t h e r e a r e t h r e e s p e c i f i c w r i t t e n agreements which a r e t o t a l l y i n c o n s i s t e n t with t h e claim of Adolph F i x t h a t S t a t e Lease No. 49401 was s o l d o r assigned t o him. The f i r s t w r i t t e n document i s t h e deed of December 26, 1963, which represented t h e Perso property purchase from W i l l i s and Lona Aye, t h a t Fix claims t r a n s f e r r e d t o him t h e Aye i n t e r e s t i n t h e s t a t e l e a s e . The deed i t s e l f , however, does n o t mention S t a t e Lease No. 49401, and i t does not t r a n s f e r t h a t l e a s e t o Adolph Fix. The second w r i t t e n document i s t h e January 3, 1964 l e a s e agreement between John Aye and Adolph Fix. F i x signed t h i s agreement which contained s p e c i f i c r e f e r e n c e s t o t h e s t a t e l e a s e a s land which Fix would leave from Aye. If F i x had purchased an assignment of t h e s t a t e l e a s e when he bought t h e Perso place i n 1963, he would obviously have no cause t o pay money t o l e a s e h i s own property from John Aye i n 1964. The t h i r d w r i t t e n document i s the mbhSi64- entered i n t o between W i l l i s Aye, a s a d m i n i s t r a t o r of t h e John Aye e s t a t e , and Adolph Fix. This sublease c l e a r l y r e f e r s t o S t a t e Lease No. 49401, and c l e a r l y provides t h a t F i x s h a l l sublease from Aye t h e very same l e a s e which Fix contends had been s o l d o r assigned t o him p r i o r t o December 26, 1963. This sublease was signed by F i x on November 30, 1967. Thus, because t h e a l l e g e d o r a l r e p r e s e n t a t i o n s claimed by Adolph F i x t o have been made t o him by W i l l i s and John Aye were d e a l t with i n a t l e a s t two of t h e t h r e e w r i t t e n agreements, a l l such par01 testimony varying t h e terms of t h e w r i t t e n documents was inadmissible being barred by t h e s t a t u t e of frauds. Furthermore, t h e a l l e g e d o r a l agreement f o r t h e s a l e o r assignment of S t a t e Lease No. 49401 i s barred by t h e s t a t u t e of frauds s i n c e i t involves an agreement t o t r a n s f e r an i n t e r e s t i n r e a l property. Such agreements a r e required by s e c t i o n s 13-606 and 93-1401-7, R.C.M. 1947, t o be i n w r i t i n g . S t a t e Lease No. 49401 i s an i n t e r e s t i n r e a l property o r lands. "Of course, t h e execution of a l e a s e of land o p e r a t e s a s a t r a n s f e r of an i n t e r e s t i n t h a t land, whether t h e s p e c i f i e d term i s long o r short." 2 Corbin Contracts, $402. This Court i n Rider v. Cooney, (1933), 94 Mont. 295, 307, 308, 23 P.2d 261, s t a t e d : "An e s t a t e f o r years has been h e l d by t h i s c o u r t t o be an i n t e r e s t i n land. *** "* * * When a l e a s e i s granted upon t h e public lands of t h e s t a t e , an i n t e r e s t o r e s t a t e i n t h e lands has been a l i e n a t e d , and t h e r e f o r e t h e l e a s i n g of t h e lands of t h e s t a t e f o r a term of y e a r s i s t h e d i s p o s a l of an i n t e r e s t o r e s t a t e i n t h e lands * * * ." See: Sections 67-502(3) and 67-506, R.C.M. 1947. The D i s t r i c t Court r e l i e d on O ' N e i l l v. Wall, (1936), 103 Mont. 388, 62 P.2d 672, f o r t h e conclusion t h a t l e a s e s a r e personal property r a t h e r than r e a l property. O'Neill, however, has never been followed by t h i s Court i n s o f a r a s i t seems t o say t h a t a l e a s e i s n o t a c h a t t e l r e a l o r an i n t e r e s t i n r e a l e s t a t e o r land. The r u l i n g i n Wheeler v. McIntyre, (1918), 55 Mont . 295, 175 P, 892, t h a t a l e a s e i s an i n t e r e s t i n land and c h a t t e l r e a l has been followed i n a s e r i e s of Montana cases. See: Brubaker v. ~ ' O r a z i , (1947), 120 Mont. 22, 34, 179 P.2d 538; Standard O i l Co. v. Idaho Community O i l Co., 660; W i l l i a r d v , Federal Surety Co., (1934), 98 Mont. 131, 37 P.2d (1932), 91 Mont. 465, 471, 8 P.2d 633. The District Court, i n i t s conclusions of law No. I , i n c o r r e c t l y found t h a t t h e a l l e g e d o r a l c o n t r a c t t o convey t h e s t a t e l e a s e was removed from t h e s t a t u t u e of frauds f o r t h r e e o t h e r reasons: "(1) t h e o r a l agreement was p a r t i a l l y executed by t h e execution of t h e deed conveying t h e Perso Place". Section 13-607, R.C.M. 1947, provides t h a t t h e execution of a w r i t t e n c o n t r a c t supersedes a l l o r a l n e g o t i a t i o n s concerning i t s matter which preceded t h e execution of t h e instrument; " ( 2 ) t h e possession by Fix of t h e s t a t e leased lands." would be s u b j e c t Every l e s s o r t o claims made by l e s s e e s such a s F i x , i f mere possession of leased lands under s p e c i f i c w r i t t e n agreements would allow the l e s s e e t o claim exemption from t h e requirements of t r a n s f e r s i n w r i t i n g . The s t a t u t e of frauds i s s p e c i f i c a l l y designed t o avoid t h i s type of t r a n s a c t i o n ; "(3) by t h e subsequent agreements subleasing t h e s t a t e l e a s e which subleases were given i n l i e u of an assignment because of t h e circumstances described i n the f i n d i n g s of fact." The w r i t t e n agreements t h a t s p e c i f i c a l l y provide f o r subleasing, a l l entered i n t o a f t e r t h e purported s a l e o r assignment of the s t a t e l e a s e , however, do not i n any way support t h e alleged o r a l promise t h e r e would be an assignment o r s a l e of the s t a t e lease. Furthermore, Fix could give no reasonable explanation why he would sign an agreement giving him the f i r s t r i g h t of purchase of the Ayes' r i g h t s i n t h e s t a t e lease i f he i n f a c t was already the owner of the l e a s e upon purchase of the Perso place. Fix r e l i e s on Saling v. Flesch, (1929), 85 Mont . 106, 110, 111, 277 P. 612, f o r t h e position t h a t "Whether the instrument * * * was an assignment or a sublease depends upon t h e i n t e n t i o n of t h e parties." I n t h i s . case, the p a r t i e s i n t h e i r 1964 and 1967 agreements, s p e c i f i c a l l y r e f e r r e d t o a "sublease" r a t h e r than an "assignment" of the s t a t e leased land, Moreover, John Aye reserved the r i g h t t o r e e n t e r the property i f Fix f a i l e d t o f u l f i l l the terms of the l e a s e agreement, a f a c t o r which t h i s Court has found i n d i c a t i v e of a sublease of lands. Saling v. Flesch, supra. The w r i t t e n agreements of the p a r t i e s c l e a r l y i n d i c a t e there was no s a l e o r assignment of the e n t i r e Aye i n t e r e s t i n the s t a t e leased lands t o Fix, The D i s t r i c t Court judgment i n favor of Fix i s reversed, and the cause i s remanded t o the D i s t r i c t Court with orders t o e n t e r judgment for p l a i n t i f f s and t o determine damages due them. W Concur: e Chief Just i c e Justices. 0 '

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.