## Facts

- Ernest Cheney (seller) and Blaine and Nita Jemmett (buyers) entered a 1977 real estate contract for Gem County, Idaho property for $32,500, with payments made through escrow; the principal balance was later reduced to $22,745.27.
- The contract barred the buyers from assigning the agreement or any interest without the seller’s written consent and included default/forfeiture provisions with a cure opportunity.
- The Jemmetts sought Cheney’s written consent to transfer their interest; Cheney refused.
- In 1980, the Jemmetts and Douglas and Barbara Honn executed a separate rental and sales agreement allowing the Honns to take possession and make payments credited toward the Jemmetts’ obligation under the Cheney–Jemmett contract.
- Cheney later assigned his own interest in the Cheney–Jemmett contract to a bank as collateral, and a financing statement was filed.
- Cheney sent notices of intent to declare default, asserting the Jemmett–Honn arrangement violated the non-assignment clause.
- The Jemmetts denied any prohibited assignment and continued making payments; Cheney and the bank accepted payments, including those made after notice.
- Cheney sued to compel payment of the remaining balance and to declare the Jemmetts in default based on the alleged non-assignment breach.

## Issues

1. Whether a consent-to-assignment clause permits the seller to withhold consent for any reason, or instead requires a reasonable, good-faith decision.
2. Whether Cheney reasonably and in good faith refused consent and could declare default based on the Jemmett–Honn arrangement.
3. Whether the trial court’s verbatim adoption of the defendants’ proposed findings and conclusions required reversal.

## Decision

- The Idaho Supreme Court affirmed the district court’s involuntary dismissal under Rule 41(b).
- The Court construed the consent requirement to impose a duty to act reasonably and in good faith; consent could not be withheld arbitrarily.
- The Court held Cheney’s refusal lacked a legitimate, contract-related justification and therefore could not support a default.
- The Court rejected the challenge to the trial court’s adoption of proposed findings because the findings were supported by substantial, competent evidence.
- Costs on appeal were awarded to the respondents; an initial award of attorney’s fees on appeal was later stricken on rehearing.

## Legal Principles

- A contractual restriction on assignment conditioned on the other party’s consent is enforceable, but the consent decision must be made reasonably and in good faith.
- A party may refuse consent only to protect legitimate interests related to contract performance; refusal cannot be arbitrary or used to defeat the contract’s purpose.
- Verbatim adoption of a party’s proposed findings is disfavored, but it is not reversible error when the record supports the findings and shows proper evaluation of the evidence.
- Acceptance of continued payments after notice of alleged default may weigh against treating the conduct as a forfeiture-justifying breach.

## Conclusion

The court held that a seller’s power to approve or reject a buyer’s assignment under a real estate contract is limited by reasonableness and good faith; because Cheney offered no legitimate performance-related basis for refusing consent, he could not declare the buyers in default based on their arrangement with third parties, and the dismissal of his action was affirmed.


Cheney v. Jemmett, 693 P.2d 1031 (Idaho 1984)