 97-169




                                                                             No. 97-160

                                        IN THE SUPREME COURT OF THE STATE OF MONTANA

                                                                           1998 MT 117N



                                                             IN RE THE MATTER OF THE ESTATE
                                                                 OF WILLIAM D. BANDEROB,

                                                                                  Deceased.




                         APPEAL FROM:                 District Court of the Thirteenth Judicial District,
                                                       In and for the County of Yellowstone,
                                                    The Honorable G. Todd Baugh, Judge presiding.



                                                                           COUNSEL OF RECORD:

                                                                               For Appellant:

                                                             Wendell Stanton, Billings, Montana

                                                                               For Respondent:

                                        Robert L. Stephens, R.L. Stephens, Ltd., Billings, Montana




                                                                 Submitted on Briefs: April 16, 1998

                                                                                          Decided: May 5, 1998
                                                                                            Filed:



                                                                     __________________________________________
                                                                                     Clerk

Justice James C. Nelson delivered the Opinion of the Court.


¶1   Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1996
Internal Operating Rules, the following decision shall not be cited as precedent

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but shall be filed as a public document with the Clerk of the Supreme Court
and shall be reported by case title, Supreme Court cause number and result to
the State Reporter Publishing Company and to West Group in the quarterly
table of noncitable cases issued by this Court.

¶2   This is an appeal by Darlene Durand (Durand) from the District Court's
judgment entered on January 13, 1997, and from the court's underlying
findings of fact and conclusions of law entered on December 31, 1996,
declaring void certain transactions by Juanita Alvarez (Juanita), personally,
and, purportedly, as personal representative of the estate of William D.
Banderob (the estate). We affirm in part and reverse in part.
                         Issues

¶3        We restate the issues on appeal as follows:

¶4   1. Are the findings of fact of the District Court supported by
substantial evidence and are the court's conclusions of law correct?


¶5   2. Did the court err in ordering Roy Watson, individually, to remove
or satisfy all mortgage indebtedness with respect to the subject real property?

                                              Background


¶6   The decision appealed from followed an evidentiary hearing on the
current personal representative's petition to set aside and to declare void
various buy and sell agreements, an assignment of proceeds and a quit claim
deed executed by Juanita with respect to real property of the estate, described
as Township 2 North, Range 28 East, M.P.M., Yellowstone County, Montana,
Section 33: SE¬SE¬, E«SW¬SE¬, NW¬NE¬ and SW¬NE¬ (the real
property).

¶7   William D. Banderob died in 1986. Intestate probate proceedings were
commenced with the appointment of Clara Garza (Garza), the decedent's
daughter, as personal representative. Subsequently, it was determined that Mr.
Banderob died testate and a second probate proceeding under another cause
number was initiated by Juanita, the decedent's stepdaughter and devisee
under his will. From June 1988 until October 13, 1993, both probate
proceedings coexisted, and there were two personal representatives. On
October 13, 1993, then presiding Judge William J. Speare signed an order
relieving Garza of responsibility as personal representative and appointing
Juanita as the sole personal representative of the estate. On October 27, 1993,
letters testamentary were issued by the clerk of the court to Juanita.

¶8   On April 20, 1994, Juanita resigned as personal representative, having
been incarcerated at the State of Montana Women's Correction Center for
some time prior to that date. Her daughter, Angelina Alvarez (Angelina), was
appointed successor personal representative of the estate on June 20, 1994.

¶9        In attempting to administer the estate, Angelina determined that a

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certain assignment of proceeds of sale of land in favor of Attorney Jack Sands
(Sands) operated as a cloud upon the title to the real property. She further
determined that certain buy and sell agreements in favor of Roy Watson
(Watson) and Durand and in favor of Sands executed by Juanita as seller and
covering the real property had never been performed by any of the parties with
whom Juanita had dealt. One of these buy and sell agreements resulted in
Juanita executing a quit claim deed covering the real property and dated
October 13 or 14, 1993, to the Pryor Hill Ranch Trust (the Trust). Juanita
purportedly signed this deed as personal representative of the estate. The deed
does not recite that it was executed and delivered in exchange for any
consideration.

¶10    It appears that this conveyance followed as a result of the buy and sell
agreement dated October 2, 1993, in which Watson and Durand agreed to buy
the real property from Juanita. This buy and sell agreement was signed by
Juanita individually, and she personally retained the earnest money payment
of $100. Moreover, the court found that the other consideration for this buy
and sell agreement, part of which included a mobile home to be delivered to
Juanita, was to be paid to or for her benefit personally. The trial court found
that Watson, Durand and the Trust were apparently the same for purposes of
this case. This finding, as regards Durand and the Trust, has not been
challenged on appeal.

¶11 To clear title to and to preserve the estate real property, Angelina
rescinded the buy and sell agreements and, in October 1994, petitioned the
court to void the quit claim deed and the assignment of proceeds. On October
27, 1994, following the filing of Angelina's petition, the court ordered Watson
and Durand, as trustees of the Trust, to appear and show cause why the
October 13 or 14, 1993 quit claim deed should not be canceled. Durand, as
a trustee of the Trust, filed her response to Angelina's petition and counter-
claimed,
requesting that the court declare the quit claim deed valid and require
specific performance of the buy and sell agreement, or, in the alternative,
award actual damages plus reasonable costs and attorney fees.
¶12 Subsequently, Sands was joined in Angelina's petition in connection
with the August 22, 1992, assignment to him of proceeds of sale of the real
property and with respect to a December 31, 1992, buy and sell agreement in
which he agreed to purchase the real property. Both of these documents,
signed by Juanita individually, resulted from Juanita's attempt to secure and
then to discharge past due and future obligations for rent which she personally
incurred and expected to incur in leasing a residence from Sands. (Sands has
not appealed the District Court's decision against him; accordingly, we refer
to this aspect of the case in our further discussion only to the extent
necessary.)

¶13   On March 21, 1995, the real property was mortgaged by the Trust to
Associates Financial Services Co. of Montana, Inc. The mortgage was
executed by Durand as trustee. A portion of the mortgage proceeds was
tendered to Sands under the assignment, but the check was not cashed. Other
sums were tendered to the attorney for the estate for fees.

¶14       Angelina's petition was tried to the court on December 8 and 13, 1995.

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Angelina appeared by counsel and testified personally; Sands appeared,
represented himself, and testified; and Durand and the Trust appeared by
counsel. Neither Durand nor Watson testified.

¶15 On the documentary evidence and testimony presented, the court found
that during the time that there were two personal representatives, Juanita in her
individual capacity, but not as personal representative of the estate, entered
into several transactions including: the assignment of proceeds of sale and the
buy and sell agreement to Sands and the buy and sell agreement with Durand
and Watson. The court also found that on October 13 or 14, 1993, Juanita,
purportedly as personal representative, executed and delivered a quit claim
deed for the real property to the Trust. Finally, on October 20, 1993, Juanita,
individually, also executed a buy and sell agreement covering the real property
in favor of a couple named Forsyth; however, the Forsyths were not joined in
these proceedings.

¶16 The court concluded that at the time Juanita executed the buy and sell
agreements to Watson and Durand and to Sands that she was not acting as a
personal representative but, rather, was acting in the context of a beneficiary
of the estate with an expectation of a future inheritance. The court also
determined that Juanita's assignment in favor of Jack Sands was for her
personal obligation and not for any estate obligation. Accordingly, the court
declared the assignment of proceeds not to be a lien on estate property and the
buy and sell agreement with Sands and buy and sell agreement with Watson
and Durand and the quit claim deed to the Trust void.

¶17     The court also determined that Juanita executed only one document
as personal representative of the Banderob estate, that being the quit claim
deed to the Trust. However, the court went on to conclude that this
conveyance was not supported by any consideration flowing to the estate.
Rather the court determined that the consideration for the deed was to go
directly to Juanita and that the consideration was not even tendered until 1995,
well after Angelina was appointed personal representative and after she had
notified the various parties that the estate was declaring the quit claim deed
null and void. The court concluded that regardless of whether the Trust could
have legally paid Juanita as the sole heir of the estate to purchase the real
property from the estate, the Trust did not give the consideration promised
much less in a timely manner. As a result, the court concluded that the quit
claim deed was void for failure of adequate consideration. From the District
Court's judgment and these findings and conclusions, Durand and the Trust
appeal.
                    Standard of Review

¶18 We review a district court's findings of fact to determine whether they
are clearly erroneous. A district court's findings are not clearly erroneous if
they are supported by substantial evidence; if the trial court has not
misapprehended the effect of the evidence; and if our review of the record
leaves us without a definite and firm conviction that a mistake has been
committed. We review a district court's conclusions of law to determine
whether the court's interpretation of the law is correct. Matter of the Estate
of Dern Family Trust (1996), 279 Mont. 138, 144, 928 P.2d 123, 127. In this


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case, we conclude that the court's findings of fact are not clearly erroneous
and, with one exception, that the court's conclusions of law are correct.

                                              Discussion
                                                  I.

¶19   Are the findings of fact of the District Court supported by substantial
evidence and are the court's conclusions of law correct?

¶20   It is axiomatic that to be valid, a contract requires identifiable parties
capable of contracting. Section 28-2-102(1), MCA. Moreover, one cannot
convey better title than that with which one is vested. Section 70-1-519,
MCA. A personal representative has the power to contract to sell and to sell
real property of an estate. Section 72-3-613(23), MCA. However, to acquire
the powers and undertake the duties and liabilities of a personal representative,
a person must be appointed by order of the court or clerk, qualify and be
issued letters. Administration of an estate is commenced by the issuance of
letters. Section 72-3-103, MCA. Here, it is undisputed that Juanita had not
been appointed personal representative nor had she been issued letters
testamentary at the time she executed the buy and sell agreement as seller to
Watson and Durand and to Sands as purchasers. Accordingly, she,
individually, was not capable of entering into a contract for the sale of the real
property on behalf of the estate, nor was she capable of assigning the proceeds
from the sale of any such agreement or otherwise encumbering estate property.
The District Court correctly declared these various buy and sell agreements
void and it correctly determined that the assignment did not constitute a lien
against the real property.

¶21 As to the quit claim deed to the Trust, the uncontradicted testimony at
the hearing was that the estate received no adequate consideration from
Juanita's execution and delivery of the deed, and the court so found.
Substantial evidence in the record supports this finding. Accordingly, the
court correctly declared the deed to be a nullity. See Eliason v. Eliason
(1968), 151 Mont. 409, 417, 443 P.2d 884, 889 (where there is no
consideration for a deed moving from the grantee to the grantor and where the
question of a gift is not at issue, the deed is null, void and subject to
cancellation).

¶22 We have carefully reviewed the record and have considered, but are
unpersuaded by, the various arguments raised by Durand in her briefs. We
conclude that, with respect to this issue, the trial court's findings of fact are not
clearly erroneous and that its conclusions of law are correct.
                          II.

¶23 Did the court err in ordering Roy Watson, individually, to remove or
satisfy all mortgage indebtedness with respect to the subject real property?

¶24 The March 21, 1995 mortgage to Associates Financial Services Co. of
Montana, Inc. was executed by Durand as trustee on behalf of the Trust.
Durand was served and appeared on behalf of the Trust. However, it is
undisputed that Roy Watson was not personally served with Angelina's


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petition.   While, on these facts, the District Court had jurisdiction to require
the Trust and Durand and Watson, as trustees, to remove and satisfy all
existing mortgage indebtedness incurred by the Trust against the real property,
it had no jurisdiction to require Watson to do so in his individual capacity as
he was not joined as a party to or served, individually, with Angelina's
petition. See Kessinger v. Matulevich (1996), 278 Mont. 450, 460, 925 P.2d
864, 870 ("A person who is not a party to the action, cannot be a party to the
judgment").   To the extent that the District Court's judgment requires Watson,
individually, to satisfy the March 21, 1995 mortgage, it is reversed.

¶25 On appeal Durand contends that Watson was not even a trustee of the
Trust but was in fact a beneficiary of that Trust. The problem with this
argument is that there was nothing before the District Court supporting this
contention and we will, accordingly, not address this argument further. See
State v. MacKinnon, 1998 MT 78, ¶ 15, 55 St.Rep. 331, ¶ 15 (parties on
appeal are bound by the record and may not introduce extraneous information
into the proceedings).

¶26 The District Court's judgment dated January 13, 1997, is affirmed in
all respects, except to the extent that the court required Roy Watson,
individually, to remove and/or satisfy of record all existing mortgage
indebtedness incurred by Darlene Durand and the Trust and secured by the
March 21, 1995 mortgage in favor of Associates Financial Services Co. of
Montana, Inc. That portion of the court's judgment is reversed.

¶27       Affirmed in part and reversed in part.

                                                             /S/       JAMES C. NELSON

We Concur:

/S/       WILLIAM E. HUNT, SR.
/S/       W. WILLIAM LEAPHART
/S/       TERRY N. TRIEWEILER
/S/       KARLA M. GRAY




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