Title: MARTEL CONSTR INC v GLEASON EQUI

State: montana

Issuer: Montana Supreme Court

Document:

No, 12886 I N T H E S U P R E M E C O U R T O F T H E STATE O F M O N T A N A 1975 M A R T E L CONSTRUCTION, INC,, a Montana corpora tion, P l a i n t i f f and Respondent, G L E A S O N EQUIPMENT, INC., an I l l i n o i s c o ~ p o r a t i o n , Defendant and Appellant, Appeal from: D i s t r i c t Court of the Eighteenth Judicial D i s t r i c t , Honorable W, W, Lessley, Judge presiding, Counsel of Record: For Appellant : Berg, Angel, Andriolo and Morgan, Bozeman, Montana Gregory 0, Morgan argued, Bozeman, Montana For Respondent : Drysdale, McLean and Scully, Bozeman, Montana James A. McLean argued, Bozeman, Montana Submitted : April 8, 1975 Decided: APR 2 8 7975 M r . J u s t i c e Wesley C a s t l e s delivered t h e Opinion of t h e Court. This i s an appeal by t h e defendant, Gleason Equipment, I n c . , h e r e i n a f t e r r e f e r r e d t o a s s e l l e r , from a judgment entered i n t h e d i s t r i c t c o u r t , G a l l a t i n County, i n favor of p l a i n t i f f , Martel Construction, Inc., h e r e i n a f t e r r e f e r r e d t o a s buyer, i n t h e amount of $2,101.39. O n A p r i l 19, 1973, buyer entered i n t o n e g o t i a t i o n s f o r t h e purchase of a P & H Model 4 4 0 TC-40 t o n t r u c k crane by w r i t - i n g a letter of i n q u i r y t o t h e s e l l e r . S e l l e r r e p l i e d by l e t t e r dated April 2 4 , 1973. O n May 15, 1973, buyer agreed t o purchase and s e l l e r agreed t o s e l l t h e crane a s described i n s e l l e r ' s quotation 7173 f o r t h e sum of $93,328.40, p l u s t h e c o s t of f r e i g h t i n t h e amount of $3,186.48. The c o n t r a c t consisted of s e v e r a l i t e m s of correspondence which taken together c o n s t i t u t e d t h e substance of t h e agreement between buyer and s e l l e r . Although t h e r e was no statement i n t h e w r i t i n g s s p e c i f i c a l l y s t a t i n g t h a t time was of t h e essence t o t h e c o n t r a c t o r naming a d e l i v e r y d a t e , t h e r e w e r e statements t h a t s e l l e r was t o supply t h e crane "promptly" and " t o s u i t your con- venience". Over o b j e c t i o n , t h e d i s t r i c t c o u r t permitted Walter Martel, s e c r e t a r y - t r e a s u r e r of t h e buyer, t o t e s t i f y t h a t buyer advised s e l l e r t h e crane was needed during t h e l a t t e r p a r t of May 1973; t h a t s e l l e r represented t h e crane d e s i r e d was a v a i l - a b l e and would be shipped promptly t o s u i t buyer's convenience and needs; and, t h a t a m a t e r i a l p a r t of t h e c o n t r a c t inducing buy- e r t o purchase t h e crane was s e l l e r ' s assurances t h a t t h e c r a n e would be delivered t o buyer t h e l a s t week i n May o r t h e f i r s t p a r t of June 1973. The crane a r r i v e d by r a i l r o a d i n Bozeman on June 3, 1973. S e l l e r ' s s e r v i c e engineer, Joe Ashley, a r r i v e d i n Bozeman on June 7, 1973, and buyer was a b l e t o unload t h e crane t h e following day. I n unloading t h e crane, t h e following p a r t s w e r e d i s - covered t o be missing which rendered t h e crane inoperable: a 350 f o o t c a b l e ; hook, block and b a l l ; and two d r i v e wedges. Buyer immediately gave n o t i c e t o s e l l e r of t h e missing p a r t s . Following j o i n t e f f o r t s by buyer and s e l l e r , t h e missing p a r t s w e r e received on June 26, 1973. O n September 2 6 , 1973, buyer f i l e d its complaint a l l e g i n g damages r e s u l t i n g from " f a i l u r e t o d e l i v e r t o t h e p l a i n t i f f t h e crane i n operable condition." The d i s t r i c t c o u r t judgment awarded t h e s e damages: $40,demurrage t o t h e railway company; $62.18,freight on t h e hook and block; $351.61 c o s t of c a b l e and f r e i g h t ; $191.87,overcharge f o r f r e i g h t of crane; $77.50, t h e n e t sum expended by buyer f o r t h e r e n t a l of a crane i n B i l l i n g s ; and, $1,378.23, t h e reasonable r e n t a l value of t h e crane from June 5, 1973, ( t h e d a t e t h e c o u r t found t h e crane f i r s t could have been unloaded) t o June 26, 1973. While a number of i s s u e s w e r e r a i s e d by t h e p a r t i e s , we f i n d t h e r e s o l u t i o n of two t o be determinative of t h i s appeal: (1) Whether parol evidence was admissible i n support of a finding t h a t time was of t h e essence i n t h i s c o n t r a c t ? ( 2 ) Whether t h e r e i s s u b s t a n t i a l c r e d i b l e evidence t o support t h e d i s t r i c t c o u r t ' s f i n d i n g of f a c t No. I V ? The f i r s t i s s u e is whether p a r o l evidence wa.s admissible i n support of a f i n d i n g t h a t time of d e l i v e r y was of t h e essence i n t h i s c o n t r a c t . W e hold it was e r r o r t o admit such p a r o l evi- dence. Section 13-724, R.C.M. 1947, provides: "Time is never considered a s of t h e essence of a c o n t r a c t , u n l e s s by i t s t e r m s expressly so provided. " I n i n t e r p r e t i n g t h a t s e c t i o n , t h i s Court s t a t e d i n C u r t i s v. Parham, 49 Mont. 1 4 0 , 1 4 4 , 1 4 0 P. 511: "Under t h i s s e c t i o n , but one s u b j e c t i s open t o discussion, and t h a t i s not what t h e p a r t i e s may have intended t o say, but what they d i d say i n t h e i r c o n t r a c t . It i s t r u e , of course, t h a t no set form o r arrangement of words i s neces- sary, but t h e c o n t r a c t must, upon i t s face, convey t h e meaning t h a t t i m e s h a l l be of t h e essence. Our s t a t u t e w i l l not permit an o r a l e x t r i n s i c showing t h a t such was t h e i n t e n t i o n of t h e p a r t i e s t o a w r i t t e n c o n t r a c t , t h e terms of which a r e expressed i n c l e a r and e x p l i c i t language." Buyer r e l i e s on statements i n t h e correspondence between t h e p a r t i e s which, it contends, c r e a t e an ambiguity a s t o whether time was of t h e essence and t h a t par01 evidence was admissible f o r t h e r e s o l u t i o n of t h a t ambiguity. W e f i n d no ambiguity. I n h i s i n i t i a l l e t t e r of inquiry, Walter Martel s t a t e d t h a t t h e crane was "Required May 15, 1973". I n i t s l e t t e r of r e p l y , s e l l e r s t a t e d , "we can s h i p new from t h e f a c t o r y between now and e a r l y May, t o s u i t your convenience." These statements were made four and t h r e e weeks p r i o r t o t h e agreement entered i n t o on May 15, 1973, over t h e telephone, and shed no l i g h t on t h a t l a t e r agree- ment. I n i t s l e t t e r dated May 15, 1973, confirming t h e agreement of t h e same day, s e l l e r s t a t e d , "we w i l l t r y t o g e t [it] shipped from t h e factory by no l a t e r than Friday of t h i s week." The statement i s straightforward, it i s not ambiguous. There i s no h i n t t h a t time i s of t h e essence. The f a c t t h a t buyer was en- t i t l e d t o a 1 2 % cash discount f o r f u l l payment upon d e l i v e r y sheds no l i g h t upon t h e i s s u e of when d e l i v e r y was required. The above discussion is not a l t e r e d by section 87A-2-202, Uniform Commercial Code, R.C.M. 1947, which s t a t e s t h a t a w r i t t e n c o n t r a c t "may be explained o r supplemented * * * (b) by evidence of c o n s i s t e n t additional terms * * *". The terms of a s p e c i f i c s t a t u t e p r e v a i l over those of a general s t a t u t e which otherwise might be controlling. Sun Insurance Co. of New York v. Diver- s i f i e d Engineers, Inc., 2 4 0 F.Supp. 606, 609 (D.Mont. 1965). The second i s s u e is whether t h e r e i s s u b s t a n t i a l c r e d i b l e evidence t o support t h e d i s t r i c t c o u r t ' s finding of f a c t No. I V : "That t h e m a t e r i a l a p a r t of t h e b a s i s of t h e transaction and bargain inducing Martel t o pur- chase t h e crane was Gleason's assurances t h a t t h e crane would be delivered t o Martel t h e l a s t week i n May o r t h e f i r s t week i n June of 1973, and f u r t h e r , t h a t Gleason would have a represen- t a t i v e i n Bozeman, Montana, upon a r r i v a l of t h e crane t o unload and e r e c t t h e crane a t no e x t r a charge. " W e do not f i n d s u b s t a n t i a l c r e d i b l e evidence t o support t h i s finding. A s previously determined, par01 evidence must be disregarded i n making any determination a s t o time of delivery. Thus we a r e l e f t with t h e statements i n t h e correspondence which we previously discussed. From what we have s a i d , it i s evident t h e r e is no evidence whatsoever from which t o make a determina- t i o n a s t o time of delivery. The second p a r t of finding of f a c t No. IV--that s e l l e r would have a representative i n Bozeman upon a r r i v a l of t h e crane, is simply contradicted by t h e evidence. The only person t o t e s t i f y a t t h e t r i a l was Walter Martel. He s t a t e d t h a t "When t h e equip- ment arrived" buyer was t o contact s e l l e r , s o t h a t a s e r v i c e engi- neer could f l y o u t t o a s s i s t i n t h e unloading. The s e r v i c e en- gineer a r r i v e d i n Bozeman l a t e on June 7 and t h e crane was unloaded t h e next day. There was no evidence t h e s e r v i c e engineer's a r - r i v a l was unreasonably delayed. Since t h e c o u r t ' s finding t h a t t h e service engineer w a s t o be i n Bozeman upon a r r i v a l of t h e crane formed t h e b a s i s f o r t h e d i s t r i c t c o u r t ' s judgment awarding $40 damages f o r t h e demurrage t o the railway company, t h a t portion of t h e judgment must be reversed. Contrary t o t h e c o u r t ' s finding No. X I V s e l l e r has never admitted l i a b i l i t y f o r t h e $40 demurrage charge. Section 87A-2-309(1), R.C.M. 1947, s t a t e s : "The t i m e f o r shipment of d e l i v e r y o r any o t h e r a c t i o n under a c o n t r a c t i f not provided i n t h i s chapter o r agreed upon s h a l l be a reasonable t i m e . " N o contention has been made t h a t t h e d e l i v e r y of a complete crane by June 2 6 , 1973, was not within a reasonable time. S e l l e r admitted its breach of s e c t i o n 87A-2-307, R.C.M. 1947, i n t h a t it d i d not tender a complete crane i n a single d e l i v e r y , and admitted i t s l i a b i l i t y f o r t h e s e damages: $62.18, f r e i g h t on t h e hook and block; $351.61, c o s t of c a b l e and f r e i g h t ; $191.87, overcharge f o r f r e i g h t of crane. Accordingly, t h e judgment i s modified so a s t o award buyer judgment i n t h e amount of $605.66, p l u s i n t e r e s t from t h e r e s p e c t i v e d a t e s t h e r i g h t s t o recover t h e damages vested i n t h e buyer ( s e c t i o n 17-204, R.C.M. 1947) through J u l y 2 , 1974, t h e d a t e seller o f f e r e d t o l e t judgment be rendered a g a i n s t it f o r t h e sum of $605.66 ( s e c t i o n 58-427, R.C.M. 1947). Costs on appeal a r e awarded t o s e l l e r . , . " ---, ~---,L,~Cz,4,--i---i--i--i--i-A -------------- ! J u s t i c e W e concur: Hon. E. Garaner Brcwnlee, d i s t r i c t judge, s i t t i n g i n place of M r . Chief J u s t i c e James T. Harrison.