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MR. JUSTICE GALEN
delivered the opinion of the court.
The defendant was charged, by information filed in the district court of Beaverhead county, with the crime of un lawfully possessing whisky. Upon her plea of not guilty the case was regularly tried to a jury, which by its verdict found her guilty as charged, leaving the punishment to be fixed by the court. The court sentenced her to a term of imprisonment of four months in the county jail and to pay a fine of $500. Judgment was accordingly entered. The appeal is from the judgment.
It appears that on the morning of May 9, 1925, for the purpose of discovering evidence of violation of the liquor laws, A. F. Mooney, sheriff of Beaverhead county, accompanied by Frank Kellum, under-sheriff, Charles Nelson, chief of police of the city of Dillon, and Harry Hackett, a police officer, visited a rooming-house in the city of Dillon conducted by the defendant. They were armed with a search-warrant, and pursuant thereto proceeded to search the premises, as a result of which they found in a closet a pitcher containing moonshine whisky, six glasses and a tray. The defendant then and there acknowledged ownership of the whisky, and likewise later at the sheriff’s office. In a hallway leading to the toilet there was a strong odor of moonshine, and there was a quantity of the same substance on the toilet floor; this being determined from the odor and by applying a match thereto. When lighted, it burned up with a blue flame, indicating that the substance was alcohol. In the toilet there were several empty jugs, two of which were gallon jugs, which latter were filled with water, and were wet on the outside. Upon uncorking them there was present a distinct odor of moonshine, which, at the time of the trial, upon introduction of these two jugs in evidence, witnesses said was still present. The defendant, upon being brought before a justice of the peace, “pleaded guilty.” The information was filed five days subsequent to her arrest. There is no dispute as to the defendant’s possession of the liquor, and it stands uncontradieted that it was moonshine whisky.
The specifications of error relate: (1) To alleged irregularities in the proceedings; and (2) to the exclusion of certain evidence by the court.
1. As to the first group of errors assigned, they were similarly urged in the case of State v. Sorenson, ante, p. 30, 241 Pac. 616. What is said in the opinion in that case effectually disposes of .them as not meritorious, and nothing further need be said on the subject.
2. The defendant offered to prove by the testimony of Dr. Dan J. Donohue that the health of Joe Charette, husband of the accused, was such, on account of heart trouble, that it was advisable at all times to have whisky on hand as a heart stimulant, and that the witness had so advised, which evidence was excluded. Further, the defendant was by the court denied the right to show that she had obtained the whisky through a messenger when her husband was suffering from an attack of heart trouble, for him and for no other purpose.
The offefed testimony was properly excluded. The statute makes the possession of intoxicating liquor by any person not legally entitled thereto prima facie evidence that it is kept for the purpose of being sold or disposed of in violation of the law; the burden of proof being placed on the possessor thereof to show that it was lawfully acquired and is lawfully possessed and used. (Sec. 11079, Rev. Codes 1921.) The burden of proof being thus shifted to the defendant (State v. Lewis, 67 Mont. 447, 216 Pac. 337; State v. Griebel, 65 Mont. 390, 211 Pac. 331), she could only justify her possession of intoxicating liquor procured since the enactment of the liquor laws by showing that' it was obtained under a permit (Id., sec. 11052) or a physician’s prescription (Id., sec. 11053), or that it was possessed for sacramental or non-beverage purposes (Id., sec. 11049). So that the offered testimony would constitute no defense, more especially so as to moonshine, denoting whisky unlawfully and illegally manu faetured, the possession of which can never be lawful. Moonshine is whisky which has been illicitly distilled or produced. (State v. Sedlacek, 74 Mont. 201, 239 Pac. 1002.) By the proof offered she did not offer to show that it had been obtained on a doctor’s prescription or that it was otherwise lawfully'in her possession. Admitting the proof offered for its full value, it would not justify defendant’s possession of moonshine. At most, it would show that her husband needed whisky as a heart stimulant; that she had been so advised by Dr. Donohue; and that she obtained the liquor through a messenger for treatment of her husband and for no other purpose. It neither justifies nor furnishes excuke for the act, nor does it show or tend to show such possession as the statutes authorize.
The judgment is affirmed.
'Affirmed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Stark and Matthews concur. | [
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PER CURIAM.
Relator’s application for writ of review herein is denied. | [
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PER CURIAM.
Relator’s application for a writ of review herein is denied. | [
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JUSTICE WEBER
delivered the Opinion of the Court.
This is an appeal from an Order issued by the First Judicial District Court, Lewis and Clark County amending a previous judgment issued by the court following a jury trial. We affirm.
We consider the following issues on appeal:
1. Did the District Court err as a matter of law in eliminating interest on the judgment award pursuant to § 2-9-317, MCA?
2. Did the District Court err in assessing half the cost of the trial transcript on appeal to the State?
This is the second appeal in this case. In the original action, Stephen R Weber (Weber) brought a wrongful discharge action against the State of Montana. On September 27, 1990, a jury found for Mr. Weber and awarded him $33,230 in damages. The original judgment in this case was entered on November 9, 1990 and did not provide for costs or for post-judgment interest. On November 13, 1990, Weber filed a motion pursuant to Rule 59(g), M.R.Civ.P., to have the court include “costs.”
On November 27, 1990, the District Court issued an Order granting Weber’s motion to amend the judgment. In that Order the District Court awarded costs of over $3,000 plus the judgment award and “interest thereon at 10% per annum until paid.” On December 4,1990, the State filed a Rule 59, M.R.Civ.P., Motion to Amend the Amended Judgment which had been entered on November 27, 1990. In that motion the State requested that the District Court enter a nunc pro tunc order striking the post-judgment interest from the order because of the State’s immunity to post-judgment interest pursuant to § 2-9-317, MCA.
Before the District Court had time to rule on the State’s motion, Weber filed the Notice of Appeal. The State then filed a cross-appeal. On January 2, 1991, the District Court granted the State’s motion, issued a nunc pro tunc order assessing costs but eliminating interest on the judgment award pursuant to § 2-9-317, MCA. Thereafter, both sides proceeded with the appeal of Weber I.
In its opinion this Court concluded that sufficient evidence existed to support the jury verdict, that the District Court properly admitted certain evidence, that the District Court properly instructed the jury, that the District Court properly denied plaintiff’s motion for a new trial, and that Weber was not entitled to attorney fees and costs. See Weber v. State (1992), 253 Mont. 148, 831 P.2d 1359. (Weber I).
On May 19, 1992, this Court issued Remittitur to the District Court. On May 20,1992, Weber filed a Motion to Tax Costs of Appeal, claiming successful party status in the Weber I appeal. The District Court granted that motion in part on June 11, 1992, and ordered the State to pay one-half of the $6,000 cost of transcribing the transcript on appeal.
On July 10, 1992, the State paid to Weber the judgment amount plus costs as prescribed by the nunc pro tunc amended judgment. That payment of the judgment was made within the two year period described in § 2-9-317, MCA, so that interest was not appropriate. The total included the jury award of damages of $33,230.00 and $3,827.53 for costs for a total of $37,057.53. On July 14, 1992, the State filed a Notice of Appeal from the Order granting motion to tax costs. On July 23,1992, Weber moved the District Court for an order compelling the State to pay interest on the judgment. Within his motion, Weber argued that the District Court was without jurisdiction to issue the nunc pro tunc order after both parties had filed a notice of appeal and that it was without effect. Thus, Weber argued that the State should be compelled to pay interest.
On July 28, 1992, Weber filed a Partial Satisfaction of Judgment admitting that he had been paid the $37,057.53 by the State but refused to file a total satisfaction because the State had not paid interest on that amount. Interest on the judgment would amount to approximately $6,000.
On August 28, 1992, the District Court denied Weber’s motion regarding post-judgment interest. The court stated that it lacked jurisdiction because Weber had already appealed to this Court from “all orders” of the District Court. Weber subsequently filed a Motion to Consolidate the various appeals, which was granted by this Court without opposition from the State.
The plaintiff is no relation to the author of this opinion.
I.
Did the District Court err as a matter of law in eliminating interest on the judgment award pursuant to § 2-9-317, MCA?
Weber argues that § 2-9-317, MCA, on which the District Court based its nunc pro tunc order is unconstitutional under our State Constitution, Art. II, § 18. According to Weber, § 2-9-317, MCA, is an immunity provision which must pass each house by a 2/3 vote, which it did not do. Weber claims that the amended judgment was correct before the court changed it in its nunc pro tunc order because interest attaches to a judgment, regardless of what is expressly said in the judgment. Weber contends that since the amended judgment containing interest has been affirmed by this Court, it is that judgment which governs all other proceedings in this case.
The State argues that Weber did not object in a timely manner to the State’s Motion to Amend the Judgment nunc pro tunc to delete an award of post-judgment interest which conflicted with the applicable statute. Thus, according to the State, Weber cannot now object to the State’s motion. Further, the State contends that Weber cannot challenge the constitutionality of § 2-9-317, MCA, because that statute has been in effect for 15 years and he only has two years from passage of a legislative bill to challenge it on technical irregularities in the way it was passed. The State also argues that § 2-9-317, MCA, is not a sovereign immunity statute, and interest can be suspended by the legislature because it is not an integral part of the action.
Weber appealed “all orders of the District Court”. One of those orders was the nunc pro tunc order in which the District Court did not assess interest against the State pursuant to § 2-9-317, MCA. We review a District Court’s legal analysis as to whether it is correct. Steer, Inc. v. Dept, of Revenue (1990), 245 Mont. 470,803 P.2d 601. On appeal, Weber argues that § 2-9-317, MCA, is not controlling for various reasons. We disagree.
Section 2-9-317, MCA, is not a sovereign immunity statute. As we stated in Jacques v. Montana Nat’l Guard (1982), 199 Mont. 493, 649 P.2d 1319, interest is a separate issue from the cause of action. Jacques, 199 Mont. at 508, 649 P.2d at 1327. And it is only the cause of action which is involved with sovereign immunity:
State subject to suit. The state, counties, cities, towns, and all other local governmental entities shall have no immunity from suit for injury to a person or property, except as may be specifically provided by law by a 2/3 vote of each house of the legislature. (Emphasis added.)
Montana Constitution, Art. II, § 18 (1972). Thus, whether this statute passed either house with a 2/3 majority vote is irrelevant.
Further, interest does not accrue automatically as Weber argues: The judgment is itself a creation of law. It bears no interest unless granted by legislative enactment ... A party is not entitled to interest merely because he has a judgment, but solely because the legislature, in its discretion has said he may charge interest.
Jacques, 199 Mont. at 507, 649 P.2d at 1327. In Jacques, we held that interest, not being a detriment arising from the wrongful act itself, can be suspended by statute. In the case before us, the statute which suspends interest assessed to the State was passed by the legislature. The 2/3 vote was not required because it was not a sovereign immunity statute. A majority vote was sufficient. We conclude that § 2-9-317, MCA, is constitutional as a limitation on interest assessed against the State and does not violate either the spirit or substance of Art. II, § 18 of the Montana State Constitution.
In addressing Weber’s argument concerning his first appeal in Weber I, we note that we there addressed certain issues which touched upon trial procedure, sufficiency of evidence to sustain a verdict, and Weber’s claim for attorney’s fees. We did not affirm any amended judgment entry which is now the central concern in this appeal.
We hold that the District Court did not err as a matter of law in eliminating interest to the State pursuant to § 2-9-317, MCA.
II
Did the District Court err in assessing half the cost of the trial transcript on appeal to the State?
Appellant Weber paid the $6,072.00 cost of the transcript. According to Weber, both parties used the transcript for their appeals and both parties should, therefore, share the cost of the transcript.
The State argues that § 25-10-104, MCA, upon which the District Court based its ruling that the State should pay for half of the cost of the transcript is only discretionary in two situations: 1) when a new trial is ordered, and 2) when a judgment is modified. According to the State, in all other cases, only the “successful party’ is entitled to recover his costs from the other party.
The applicable statute is § 25-10-104, MCA,
When costs of appeal are discretionary. (1) In the following cases, the costs of appeal are in the discretion of the court: (a) when a new trial is ordered; (b) when a judgment is modified.
(2) In all other cases the successful party shall recover from the other party his costs.
Here both parties appealed. In addition both parties were partially successful and partially unsuccessful. As pointed out in Nyquist v. Nyquist (1992), [255 Mont. 149] 841 P.2d 515, 520, 49 St.Rep. 927, 929, there are cases where both parties gain a victory but neither is the actual prevailing or successful party. That is the situation in the present case. Neither party can claim to be the totally successful party on appeal because both parties lost a portion of their appeal. In considering the transcript cost, the District Court stated: “For whatever reason, the State chose to file an appeal in this case. It benefitted, then, at Plaintiff’s expense in using the transcript.” We conclude that the District Court was correct in dividing the cost of the transcript.
We hold that the District Court did not err in assessing half the cost of the transcript to the State.
Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, HUNT and HARRISON concur. | [
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JUSTICE HARRISON
delivered the Opinion of the Court.
This is an appeal from the Seventh Judicial District, Dawson County, the Honorable Dale Cox presiding. Appellant Craig Lueck (Lueck) appeals from an order granting summary judgment in favor of respondent United Parcel Service (UPS) and dismissing his retaliatory discharge complaint. We affirm.
UPS hired Lueck as a part time delivery driver on April 16, 1984. He joined the Teamsters Union shortly after he was hired. In June 1986, Lueck became a full time driver, driving a tractor-trailer combination on a “swing run” three nights and one day per week. After driving on this schedule for approximately twenty months, Lueck was given a new route in February 1988, from Glendive to Wolf Point on a regular schedule. Another driver, who had more seniority than Lueck, bid for and got Lueck’s swing run.
UPS discontinued the Glendive-Wolf Point run after only one week, and Lueck went back to part time driving. Around May 1,1988, the driver who had taken Lueck’s swing run took another position with UPS and Lueck took over the swing run again. By then, however, it had been changed.
The revised swing run followed a schedule Lueck describes as “bizarre.” It began at 1:00 p.m. on Sunday, when Lueck was scheduled to drive from Glendive to Billings, returning at approximately 2:00 a.m. on Monday morning. On Monday evening at 7:00 he was scheduled to drive to Bismarck, returning at approximately 8:00 on Tuesday morning. On Wednesday he was scheduled to begin driving at 6:45 a.m., returning at approximately 7:00 that evening, and on Thursday, he was scheduled to begin driving at 8:30 p.m., returning at 9:00 on Friday morning.
After his first week on this schedule Lueck complained about lack of sleep. He spoke to his supervisors on three separate occasions, indicating that he was having serious problems and was unable to sleep. On June 9,1988, Lueck reported to work at the UPS Center in Glendive and put on his uniform in preparation for leaving on the evening’s run. At that point he “flipped out,” as he describes it, and went home without doing the run. His doctor prescribed anti-depressants and admitted him to Glendive Community Hospital for treatment over the weekend of June 11-12, 1988. He was then referred to the Eastern Montana Mental Health Center for outpatient counselling.
Don LaPlante, a counselor at the mental health center, described Lueck’s “presenting problem” as a “physical/psychological adverse stress reaction to working swing shifts as a truck driver for UPS” and recommended continuing anti-depressant medication as well as counselling. Lueck’s family physician, Dr. J.E. Harkness, a Glendive osteopath, saw him in June 1988 and again on July 13, 1988, when he reported that although Lueck appeared to be considerably improved, “it’s unlikely that he will be able to go back into such a swing shift as it was a direct causal effect of his acute hysterical depression episodes.” In fact, Lueck never returned to work for UPS.
On July 25, 1988, Lueck filed a claim for compensation with the Montana Division of Workers’ Compensation, stating that his “double swing” work schedule had disrupted his sleeping and eating patterns, leading to severe physical fatigue, loss of weight, ringing in the ears, dizziness, headaches, nervousness and insomnia. This claim was denied by UPS’s insurer on August 24, 1988, on the grounds that Lueck’s condition was not compensable under the 1987 Workers’ Compensation Act. Lueck never appealed the denial of his claim.
Lueck also filed a claim under his credit disability insurance policy in July 1988. Dr. Harkness completed the required attending physician’s statement on July 20, 1988, describing Lueck’s current condition as “acute anxiety — hysteria, stress reaction, depression” and adding as a “remark” that Lueck “cannot do that type of shift switch work again.”
Lueck occasionally played guitar with a band on weekend nights during the spring of 1988, until he became ill in June. In October 1988 he again began playing with a band. On October 6, 1988, he filed a claim for disability benefits under a Teamsters Union insurance policy, but he never received any benefits because he had begun working in the band before the payments began. In connection with Lueck’s Teamsters Union claim, Dr. Harkness completed a physician’s statement indicating that October 11, 1988, was the “date patient able to return to work.”
In November 1988, UPS learned that Lueck had started working again in a band, that he was not receiving benefits through the Teamsters Union, and that Dr. Harkness had approved his return to work on October 11, 1988. Joe Kriskovich, a Billings UPS manager, called Lueck at home on December 8,1988, to verify this information and to ask why he had not returned to work for UPS. Lueck explained that Dr. Harkness had said that he could not return to the swing shift schedule. Kriskovich told Lueck that UPS had nothing in its files to document this statement. Later on the same day, Lueck took a copy of the statement Dr. Harkness signed as attending physician on July 20, 1988, indicating that Lueck “cannot do that type of shift switch work again,” to his supervisor in Glendive, for delivery to Kriskovich the next day.
In the meantime, Kriskovich wrote Lueck a letter, dated December 8, 1988, telling him that he was no longer on authorized leave, that he was scheduled to return to work on Sunday, December 11, 1988, and that his employment at UPS “could be terminated” if he did not return to work on December 11. Lueck did not communicate with UPS or return to work, and on December 12 he received a mailgram and a telegram from the UPS division manager in Billings, telling him that if he did not return to his regularly scheduled shift on Monday, December 12, his name would be removed from the employment records. Lueck again did not communicate with UPS or return to work, and on December 13 the division manager sent him an official separation letter terminating his UPS employment.
Asked during his deposition why he ignored these messages from UPS, Lueck said:
It was just inconceivable to me that they could have received this, that says I cannot return to the shift work and persist in calling me back to shift work without so much as checking with my doctor or having me checked out by a doctor to find out whether or not I am able to go back to work.
On December 8, 1989, Lueck filed a complaint in District Court alleging that UPS had discharged him because he had filed a workers’ compensation claim, in violation of the retaliatory discharge provision in the Workers’ Compensation Act, § 39-71-317(1), MCA, and that UPS had intentionally inflicted emotional distress by refusing to alter his work schedule in May 1988. In 1991 Lueck amended his complaint by adding a new cause of action under § 39-71-317(2), MCA, alleging that UPS had failed to give him preference for a position that became vacant within two years after the date of his injury, as the statute requires. The District Court granted summary judgment on the amended complaint on May 14, 1992, after oral argument on January 14, 1992.
The issue on appeal is whether the District Court erred in granting summary judgment and dismissing Lueck’s retaliatory discharge, preference, and emotional distress claims. We will address each of Lueck’s claims separately.
The Retaliatory Discharge Claim
Lueck contends that the District Court should not have dismissed his retaliatory discharge claim because the record contains sufficient facts from which a jury could infer that he was discharged for filing a workers’ compensation claim. He relies on Lingle v. Norge Division of Magic Chef Inc. (1988), 486 U.S. 399, 108 S.Ct. 1877, 100 L.Ed.2d 410, for the proposition that employer motivation is a factual question and is not appropriate for summary judgment. In Lingle, however, the Supreme Court did not decide whether summary judgment was appropriate in a retaliatory discharge action. Instead, it held that the appellant’s retaliatory discharge remedy under the Illinois Workers’ Compensation Act was not preempted by Section 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C. § 185(a). The relevant holding in Lingle follows:
[I]f the resolution of a state-law claim depends upon the meaning of a collective-bargaining agreement, the application of state law ... is pre-empted and federal labor-law principles ... must be employed to resolve the dispute.
Lingle, 486 U.S. at 405-406, 108 S.Ct at 1881. In the case before us as well, a decision on the merits of Lueck’s retaliatory discharge claim can be made without reference to the collective bargaining agreement. See Foster v. Albertsons, Inc. (1992), 254 Mont. 117, 835 P.2d 720, 49 St.Rep. 638 (directed verdict based on § 301 preemption reversed, following Lingle, because appellant’s wrongful discharge claim could be resolved without reference to the collective bargaining agreement).
Here, however, the District Court granted summary judgment in favor of UPS, not because Lueck’s claims were preempted by § 301 but because Lueck had failed to exhaust the remedies available to him under the collective bargaining agreement between his union and UPS. To support its argument that summary judgment was properly granted for this reason, UPS relies on Brinkman v. State (1986), 224 Mont. 238, 729 P.2d 1301.
In Brinkman, we upheld the district court’s grant of summary judgment for the respondents based on the state-employee appel lant’s failure to exhaust his contractual remedies under a collective bargaining agreement. To the extent that Brinkman is based on federal preemption under § 301, our holding there was overruled in Foster, 835 P.2d at 725. But to the extent that Brinkman requires an employee subject to a collective bargaining agreement to exhaust his remedies under that agreement, it is not overruled. We hold, as we held in Brinkman, that union employees “must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress,” for a “contrary rale which would permit an ... employee to completely sidestep available grievance procedures in favor of a lawsuit has little to recommend it.” 729 P.2d at 1305-1306. Accord, Fellows v. Sears, Roebuck & Co. (1990), 224 Mont. 7, 795 P.2d 484.
The collective bargaining agreement in effect between UPS and the Teamsters Union in 1988 provides in pertinent part that:
The right to process and settle grievances is wholly, to the exclusion of any other means available, dependent upon the provisions of this Article.
The Union and the Employer agree that there shall be no strike, picketing, lockout, tie-up, or legal proceedings without first using all possible means of a settlement, as provided for in this Supplement ....
The agreement includes specific steps for a discharged employee to follow in settling the grievance over his discharge, and ultimately provides for binding arbitration.
Lueck attempted to meet with the Teamsters Union representative in Billings in September 1988, but the union representative broke their appointment. Concluding that relying on the union was “fruitless,” Lueck did not attempt to contact the union or enlist its support after he was discharged in December 1988. Clearly, he did not attempt to use the grievance procedure in the collective bargaining agreement before he resorted to legal action in 1989.
Even if Lueck had gone through the prescribed grievance procedure, however, his retaliatory discharge claim would fail for lack of evidence. To prove retaliatory discharge under § 39-71-317, MCA, Lueck would have to show (1) that he was discharged and (2) that UPS’s motive in discharging him was to retaliate for his filing a claim under the Workers’ Compensation Act. UPS amply documented its efforts to persuade Lueck to return to work, which were justified by the information it had at the time. From UPS’s point of view, Lueck simply abandoned his job without providing a coherent explanation and without filing a grievance after he was discharged.
Summary judgment is appropriately granted where no genuine issue as to any material fact exists and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. The party moving for summary judgment has the initial burden of demonstrating that “there is no genuine issue as to any fact deemed material in light of the substantive principles that entitle the movant to judgment as a matter of law.” Fleming v. Fleming Farms, Inc. (1986), 221 Mont. 237, 241, 717 P.2d 1103, 1105-1106. Once the movant has met this burden, the party opposing the motion must show “by present facts of a substantial nature that a material fact issue does exist. Mere conclusory or speculative statements are insufficient to raise a genuine issue of material fact.” Mayer Bros. v. Daniel Richard Jewelers, Inc. (1986), 223 Mont. 397, 399, 726 P.2d 815, 817 (citations omitted); see also First Security Bank of Bozeman v. Jones (1990), 243 Mont. 301, 303, 794 P.2d 679, 681, and Kenyon v. Stillwater County (1992), 254 Mont. 142, 835 P.2d 742, 744.
Lueck has provided no facts to show or even suggest that UPS fired him in December for filing a workers’ compensation claim in July. Lueck must provide facts that support a reasonable inference that UPS’s motive was retaliatory, as mere assertions of a retaliatory motive are not enough to defeat a motion for summary judgment. See Kenyon, 835 P.2d at 745; Foster v. Arcata Associates, Inc. (9th Cir. 1985), 772 F.2d 1453, 1459.
Lueck implies that because UPS knew of Dr. Harkness’ statement on Lueck’s July 1988 credit disability claim form, it could have had no reason other than retaliation for firing him. He does not explain why UPS should have given that statement greater weight than Dr. Harkness’ later statement on Lueck’s October 1988 application for union benefits, which indicated that Lueck was able to work, or why UPS’s failure to give the earlier statement greater weight is evidence that he was fired in retaliation for filing a workers’ compensation claim.
We hold that the District Court concluded correctly that Lueck did not raise a genuine issue of material fact regarding UPS’s motive for terminating his employment.
The Preference Claim
Section 39-71-317(2), MCA, provides that
When an injured worker is capable of returning to work within 2 years from the date of injury and has received a medical release to return to work, the worker must be given a preference over other applicants for a comparable position that becomes vacant if the position is consistent with the worker’s physical condition and vocational abilities.
In his amended complaint, Lueck alleged that when a vacancy occurred in Glendive in March 1989, UPS was required by this statute to prefer him for it. UPS, however, did not notify Lueck that the position was available.
The District Court dismissed this claim on the grounds that (1) Lueck was not an injured worker under the definition in the Workers’ Compensation Act, and (2) if he had been injured, he would have had to apply for the preference within two years after the injury. Lueck made no such application.
Under § 39-71-119, MCA, an “injury” consists of physical harm to the body and is caused by an accident, which is defined as an “unexpected traumatic incident or unusual strain” that is caused by a specific event on a single day or during a single work shift. It does not include a physical or mental condition arising from emotional or mental stress. The District Court correctly decided that this statutory definition does not include Lueck’s “adverse stress reaction” of June 9,1988.
Lueck argues that his condition actually was an “occupational disease,” defined in § 39-72-102, MCA (1987), as “harm, damage or death as set forth in 39-71-119(1) arising out of or contracted in the course and scope of employment and caused by events occurring on more than a single day or work shift.” Although the statute goes on to exclude conditions arising from emotional or mental stress, Lueck argues that his condition was caused by “physical disruption of his eating and sleeping schedule” and therefore is not excluded. The District Court concluded correctly, however, that the term “injury” in the preference statute, § 39-71-317(2), MCA, does not include occupational disease.
Lueck contends that the District Court’s reading of the preference statute is too narrow, and that it erred in ignoring the declaration of public policy in § 39-71-105(3), MCA (1987), which states that “an objective of the workers’ compensation system is to return a worker to work as soon as possible after the worker has suffered a work-related injury or disease.” UPS argues that this objective does not apply to an occupational disease, for there is no good reason to return a worker to a job that caused his disease. The District Court agreed, concluding correctly that the preference statute applies only to work-related injuries.
We review a district court’s interpretation of the law only for correctness. Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 803 P.2d 601. Here, we conclude that the District Court correctly interpreted the preference statute as excluding Lueck’s condition, and that UPS therefore was entitled to summary judgment on Lueck’s preference claim, as a matter of law.
The Emotional Distress Claim
Lueck claims that as a result of UPS’s refusal to alter his work schedule and as a result of his termination, he suffered severe emotional distress. His emotional distress was severe enough that he sought counselling and was on medication for several months.
This Court has adopted the requirements for recovering damages for infliction of emotional distress that are set out in Restatement (Second) of Torts § 46 comment j (1965). First Bank (N.A.)-Billings v. Clark (1989), 236 Mont. 195, 206, 771 P.2d 84, 91. The victim must show that the defendant’s tortious conduct resulted either in physical or mental injury or in “a substantial invasion of a legally protected interest,” and that it “caused a significant impact,” including emotional distress “so severe that no reasonable person could be expected to endure it.” Clark, 771 P.2d at 91. Accord, Doohan v. Bigfork School Dist. No. 38 (1991), 247 Mont. 125, 805 P.2d 1354.
The District Court concluded that UPS’s actions did not approach the level of outrageousness needed to establish a prima facie case of intentional infliction of emotional distress. See Frigon v. Morrison-Maierle, Inc. (1988), 233 Mont. 113, 123, 760 P.2d 57, 64 (the defendant’s conduct must be “so outrageous ... as to go beyond all possible bounds of decency”).
In the past we have characterized emotional distress as an element of damages rather than a distinct cause of action; see Frigon, 760 P.2d at 63; Shiplet v. First Security Bank (1988), 234 Mont. 166, 171, 762 P.2d 242, 247. Even if considered only for the purpose of establishing damages, however, Lueck’s deposition testimony demonstrates the absence of any genuine issue of material fact concerning the severity of his alleged emotional distress. UPS was entitled to summary judgment on this claim.
AFFIRMED.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY and McDonough concur. | [
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JUSTICE REGNIER
delivered the Opinion of the Court.
¶ 1 David Thurston (Thurston) was charged with two counts of sexual intercourse without consent and one count of sexual assault. Thurston pleaded guilty to the two counts of sexual intercourse without consent as part of a plea agreement. The District Court sentenced Thurston to twenty years in prison for the first Count of sexual intercourse without consent, and ten years suspended for the second count. Thurston later filed a Petition for Postconviction Relief which the District Court denied. Thurston appeals from the District Court’s Order. We affirm in part, reverse in part, and remand.
¶2 We address the following issues on appeal:
¶3 1. Did the District Court err when it refused to address Thurston’s postconviction claim that the District Court was without authority to sentence him without considering the statutory nonviolent offender criteria?
¶4 2. Did the District Court abuse its discretion when it denied four of Thurston’s claims for postconviction relief?
¶5 3. Did the District Court abuse its discretion when it denied Thurston’s request to amend his Petition for Postconviction Relief?
BACKGROUND
¶6 On September 4, 1992, David Thurston was charged with two counts of sexual intercourse without consent and one count of sexual assault. Steven Hudspeth (Hudspeth) represented Thurston before the District Court. As part of a plea agreement, Thurston pleaded guilty to the first two counts. In exchange, the State dropped the sexual assault charge and agreed to recommend up to a twenty-year prison sentence on Count I, and up to a ten-year suspended sentence on Count II. The District Court sentenced Thurston in accordance with the State’s recommendation. Thurston did not appeal his sentence.
¶7 On November 30, 1998, Thurston filed a pro se Petition for Postconviction relief. Thurston was later appointed counsel to represent him in the postconviction proceedings. The District Court denied Thurston’s Petition. Thurston appeals from the District Court’s Order.
STANDARD OF REVIEW
¶8 We review a district court’s denial of postconviction relief to determine whether the court’s findings of fact are clearly erroneous and whether its conclusions of law are correct. Soriach v. State, 2002 MT 187, ¶ 13, 311 Mont. 90, ¶ 13, 53 P.3d 878, ¶ 13. Discretionary rulings in postconviction relief proceedings, including rulings relating to whether to hold an evidentiary hearing, are reviewed for an abuse of discretion. Soriach, ¶ 13. Moreover, claims of ineffective assistance of counsel are mixed questions of law and fact; therefore, this Court’s review is de novo. Soriach, ¶ 13.
¶9 An order denying a motion to amend a postconviction petition is reviewed for an abuse of discretion. Kills On Top v. State (1996), 279 Mont. 384, 390, 928 P.2d 182, 187.
DISCUSSION ISSUE ONE
¶10 Did the District Court err when it refused to address Thurston’s postconviction claim that the District Court was without authority to sentence him without considering the statutory nonviolent offender criteria?
¶ 11 In Ground Eight of his Petition for Postconviction Relief, Thurston alleged the District Court erred by imposing a prison sentence without considering the statutory nonviolent offender criteria. Section 46-18-201(10), MCA (1991), the statute in effect at the time of Thurston’s trial, provides that in sentencing a nonviolent felony offender, the sentencing judge shall consider alternatives to imprisonment in a state prison, including placement in a community corrections facility or program. The sentencing court apparently failed to do so. The District Court denied Thurston’s postconviction claim regarding the nonviolent offender criteria, concluding it should have been raised on direct appeal pursuant to § 46-21-105(2), MCA. Section 46-21-105(2), MCA, provides that an issue which could have been reasonably raised on direct appeal may not be raised in a petition for postconviction relief. ¶12 On appeal Thurston argues that the sentencing court’s failure to comply with § 46-18-201(10), MCA (1991), is an issue of subject matter jurisdiction and can therefore be raised at any stage of a judicial proceeding. He cites to State v. Moorman (1996), 279 Mont. 330, 928 P.2d 145, for the proposition that sentences imposed without statutory authority raise claims of subject matter jurisdiction which are never procedurally barred. In Moorman, the defendant claimed that the sentencing court lacked jurisdiction to continue his dangerous offender designation upon revocation of a suspended sentence. We stated that “If the District Court lacked the statutory authority to impose the dangerous offender designation on Moorman, then Moorman’s sentence is void.” Moorman, 279 Mont. at 336, 928 P.2d at 149.
¶13 While Thurston is correct that issues involving subject matter jurisdiction may be raised at any stage of a judicial proceeding, we disagree that subject matter jurisdiction is at issue here. Moorman is not applicable in this case. In Moorman, the defendant challenged the sentencing court’s jurisdiction to impose a sentence in the first place. Moorman, 279 Mont. at 336, 928 P.2d at 149. Here, Thurston is arguing the sentencing judge failed to consider sentencing alternatives, not that it lacked jurisdiction to impose a sentence in the first place. We conclude the District Court did not err when it refused to address Thurston’s postconviction claim that the District Court was without authority to sentence him without considering the statutory nonviolent offender criteria. Here, Thurston did not raise this matter on direct appeal and pursuant to § 46-21-105(2), MCA, he may not do so in this postconviction proceeding.
ISSUE TWO
¶14 Did the District Court abuse its discretion when it denied four of Thurston’s claims for postconviction relief?
¶15 Thurston next argues that the District Court erred when it dismissed four other postconviction claims because they were not raised on direct appeal and were therefore barred by § 46-21-105(2). These claims include Ground Seven, alleging that Thurston’s attorney, Hudspeth, had a conflict of interest; (2) Grounds Four and Six, alleging that Hudspeth provided ineffective assistance at sentencing because he failed to present arguments in mitigation of the sentence; and (3) Ground Thirteen, alleging that Hudspeth provided ineffective assistance when he advised Thurston about the length of the sentence.
¶16 Thurston argues that Hudspeth had a conflict of interest while representing Thurston because Hudspeth was a former Cascade County Deputy Attorney. Thurston states that Hudspeth exchanged information about the investigation of Thurston’s case while he was a deputy county attorney.
¶17 A defendant claiming ineffective assistance of counsel due to a conflict of interest must show: (1) that counsel actively represented conflicting interests; and (2) that an actual conflict of interest adversely affected counsel’s performance. State v. Deschon, 2002 MT 16, ¶ 18, 308 Mont. 175, ¶ 18, 40 P.3d 391, ¶ 18. The District Court denied Ground Seven in Thurston’s Petition for Postconviction Relief stating, “First, this [the conflict of interest] was admittedly disclosed to the Defendant who did not elect to ask for other counsel. Second, there is no statement as to how this might have affected the performance of counsel or how Defendant might have been prejudiced.” ¶18 Thurston cites us to Sanders v. Ratelle (9th Cir. 1994), 21 F.3d 1446. In Sanders, the Ninth Circuit stated, “Once an actual conflict has been demonstrated, prejudice is presumed since the harm may not consist solely of what counsel does, but of ‘what the advocate finds himself compelled to refrain from doing, not only at trial but also’ during pretrial proceedings and preparation.” Sanders, 21 F.3d at 1452, citing Holloway v. Arkansas (1978), 435 U.S. 475, 490, 98 S.Ct. 1173, 1181, 55 L.Ed.2d 426. The Ninth Circuit further stated that, “The existence of an actual conflict cannot be governed solely by the perceptions of the attorney; rather, the court itself must examine the record to discern whether the attorney’s behavior seems to have been influenced by the suggested conflict.” Sanders, 21 F.3d at 1452.
¶19 Thurston also cites to the American Bar Association’s Standards for Criminal Justice. Standard 4-3.5 states:
(f) Defense counsel should not defend a criminal case in which counsel’s partner or other professional associate is or has been the prosecutor in the same case.
(g) Defense counsel should not represent a criminal defendant in a jurisdiction in which he or she is also a prosecutor.
(h) Defense counsel who formerly participated personally and substantially in the prosecution of a defendant should not thereafter represent any person in the same or a substantially related matter. Defense counsel who was formerly a prosecutor should not use confidential information about a person acquired when defense counsel was a prosecutor in the representation of a client whose interests are adverse to that person in a matter.
ABA Standards on Criminal Justice 4-3.5(f)-(h), 3d Ed. (1993). In addition, Thurston directs us to § 37-61-413, MCA, which states:
Former public prosecutors not to defend. An attorney and counselor who has brought, carried on, aided, advocated, or prosecuted or has been in anyway connected with an action or special proceeding, civil or criminal, as attorney general, county attorney, or other public prosecutor, must not, at any time thereafter, directly or indirectly advise concerning, aid, or take any part in the defense thereof; or take or receive either directly or indirectly, from a defendant therein or other person a fee, gratuity, or reward for or upon any cause, consideration, pretense, understanding or agreement, either express or implied, having relation thereto or to the prosecution or defense thereof.
Section 37-61-413, MCA.
¶20 While Standard 4-3.5 and § 37-61-413, MCA, support an argument that Hudspeth should not have represented Thurston in criminal proceedings after supposedly gaining knowledge of his case through his employment as a Deputy Cascade County Attorney, it is not a basis for reversal unless Thurston is able to establish an “actual conflict” existed. No evidence exists that Hudspeth’s representation of Thurston was influenced by the suggested conflict. Thus, we affirm the District Court’s ruling on Thurston’s conflict of interest claim.
¶21 In Ground Four Thurston alleged that his attorney failed to raise mitigating information at his sentencing hearing. According to Thurston, he provided his attorney with information needed to support at least seven of the criteria to support his designation as a non-violent felony offender, but his attorney failed to raise the issue at sentencing. In Ground Six Thurston alleged his attorney was unprepared for the sentencing hearing. He allegedly did not discuss with Thurston how to refute testimony of the State’s witness until Thurston and the attorney were walking to the sentencing hearing. Thurston would have recommended calling certain witnesses to refute the State’s testimony, but by this time it was too late to do so. The District Court denied these claims, concluding they “would have been reflected in or apparent from the record of the sentencing hearing,” and therefore could have been raised on direct appeal.
¶22 Finally, in Ground Thirteen, Thurston alleged that his attorney failed to provide him with an accurate portrayal of the 20-year prison sentence contained in the plea agreement. Apparently, Thurston’s attorney advised him that if designated as a non-dangerous offender, a 20-year sentence meant parole eligibility after approximately two and one half years. However, because Thurston required sex offender treatment before becoming eligible for parole, he could not be parole eligible in less than five years.
¶23 Claims for ineffective assistance of counsel alleging facts beyond the record are not appropriately raised on direct appeal. State v. Black (1990), 245 Mont. 39, 43, 798 P.2d 530, 533. When ineffective assistance of counsel claims require consideration of factual matters outside the record, the claims are appropriately raised in a petition for postconviction relief. State v. J.C., 2004 MT 75, ¶ 25, 320 Mont. 411, ¶ 25, 87 P.3d 501, ¶ 25. In Strickland v. Washington (1984), 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674, the United States Supreme Court set forth the standard used to determine whether a convicted defendant’s claim that counsel’s assistance was so defective as to require reversal of a conviction:
First, the defendant must show that counsel’s performance was deficient. This requires showing that counsel made errors so serious that counsel was not functioning as the “counsel” guaranteed the defendant by the Sixth Amendment. Second, the defendant must show that the deficient performance prejudiced the defense. This requires showing that counsel’s errors were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable. Unless a defendant makes both showings, it cannot be said that the conviction or death sentence resulted from a breakdown in the adversary process that renders the result unreliable.
Strickland, 466 U.S. at 687, 104 S.Ct. at 2064, 80 L.Ed.2d 674.
¶24 The District Court refused to address Grounds Four, Six and Thirteen on the basis that they would have been reflected in or apparent from the record of the sentencing hearing. It concluded that, “Therefore, they could have been raised on appeal and cannot be raised in a petition for postconviction relief.”
¶25 We disagree with the District Court. The basis for these three grounds in Thurston’s Petition for Postconviction Relief rests upon conversations Thurston had with his counsel which would not be reflected in the record. What counsel told Thurston outside the courtroom, the witnesses that counsel failed to call, and counsel’s explanation for failure to fully present mitigating evidence, by their very nature, cannot be found in transcripts or the record. We reverse and remand this issue to the District Court. The District Court is ordered to consider Grounds Four, Six and Thirteen on their merits in accordance with Strickland.
ISSUE THREE
¶26 Did the District Court abuse its discretion when it denied Thurston’s request to amend his Petition for Postconviction Relief?
¶27 Thurston argues the District Court abused its discretion when it denied his motion to amend his Petition for Postconviction Relief to allege counsel was ineffective for failing to perfect an appeal. Thurston cites Kills On Top, 279 Mont. at 391, 928 P.2d at 187, for the proposition that an amendment should be allowed at any time, as long as the amendment would not be “futile.”
¶28 The present case and Kills On Top are distinguishable. Here, Thurston did not file his motion until several months after the District Court had already denied his Petition for Postconviction Relief. InKills On Top, the petitioner sought to amend his petition within the deadline period set by the District Court, before a final judgment was issued. We affirm the District Court’s refusal to allow Thurston to amend his Petition for Postconviction Relief after the District Court had already denied his Petition.
¶29 Affirmed in part, reversed in part, and remanded.
CHIEF JUSTICE GRAY, JUSTICES LEAPHART, NELSON, WARNER, COTTER and RICE concur. | [
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JUSTICE REGNIER
delivered the Opinion of the Court.
¶1 Plaintiff, Lori Blain, as personal representative of the estate of Gary Everhard, filed a Complaint and Jury Demand asserting wrongful death, personal injury and survival action in the Thirteenth Judicial District Court, Yellowstone County. Defendants, Stillwater Mining Company and Robert Aafedt, answered the complaint and subsequently filed Motions for Summary Judgment pursuant to Rule 56, M.R.Civ.P. On June 5, 2003, the District Court granted both Defendants’ Motions for Summary Judgment. It is from this Order that Blain appeals. We affirm.
BACKGROUND
¶2 On March 13,2000, Gary Everhard (Everhard) and Robert Aafedt (Aafedt) were employed by Stillwater Mining Company (SMC). Everhard was the brakeman and Aafedt was the driver of a mining locomotive used to transport cars of ore in the mine. On the date in question, the men moved eight ore cars by train from the 5000 West Portal to the 7800 Crosscut in the mine. Aafedt solely controlled the train and usually had an unrestricted view of the entire length of the train. At the 7800 Crosscut on the mainline, Aafedt drove the cars past the switch until the locomotive was even with it when he stopped the train. Everhard then exited the locomotive at the switch while Aafedt backed up the locomotive until the last ore car cleared the switch. Everhard then gave Aafedt a signal with his headlamp to stop the locomotive when all the cars had crossed the switch. Everhard threw the switch from the mainline to the 7800 Crosscut and signaled Aafedt again with his headlamp indicating that he had thrown the switch and Aafedt could proceed to push the ore cars off the mainline into the crosscut.
¶3 After Everhard gave the signal to go forward, Aafedt testified that he made a conscious decision to put the locomotive into forward gear and applied the throttle to make the train go forward. He honked the horn as procedure dictated. Aafedt also testified that he did not know Everhard’s location when he moved the train forward, but moved the train forward because Everhard had signaled him to do so. He testified that only if he had seen Everhard standing by the switch could he know that Everhard was in a position of safety. Yet, Aafedt testified that even though he had the ability to stop the train, he decided to continue to move it forward to clear the mainline while not knowing Everhard’s location.
¶4 SMC safety procedure dictates that the switchman, Everhard in this case, is supposed to stand in the vicinity of the switch after giving the signal to the driver to proceed forward until the locomotive reaches the switch.
¶5 Arriving at the switch, Aafedt noticed that Everhard was not there and exited the locomotive to look for him. He called dispatch to report that the train had cleared the mainline, however, when outside the locomotive he noticed that it had not completely cleared. As a safety precaution, he got back in to move the train another two feet so that the rear end of the locomotive indeed cleared the mainline. It was standard procedure to never leave equipment on the mainline, because other trains used it simultaneously and to leave equipment on the mainline posed a risk of a collision with another train.
¶6 At that point, Aafedt noticed that the furthest ore car raised up off the track. He stopped the locomotive, walked towards the ore car and found Everhard’s miner’s hat at the fourth car past the locomotive. As he arrived at the last car, Aafedt found Everhard underneath the ore car, obviously deceased. From the time he began moving the train forward to the time he found Everhard, he did not know Everhard’s location.
¶7 The Mine Safety and Health Administration conducted an investigation of the accident. Due to the curvature of the tracks, the report stated that the locomotive driver temporarily could not see any hazards in front of the cars, and when he was within thirty feet of the switch he did not see the brakeman. Failing to stop there, the locomotive driver traveled approximately sixty feet without knowing the location of his brakeman. The report concluded that the following factors contributed to the accident: (1) management’s failure to implement work procedure that required the locomotive driver to be in communication or visual contact with the brakeman while pushing rail cars; and (2) failure of the locomotive driver to immediately stop the train when he realized that his brakeman was not waiting for him at the switch.
¶8 On October 22, 2001, Blain brought this action in the Thirteenth Judicial District Court to recover damages for the death of her father, pursuant to § 39-71-413, MCA (1999). On July 5, 2002, pursuant to Rule 56(c), M.R.Civ.P., SMC filed a Motion for Summary Judgment. On August 5, 2002, Aafedt also filed a Motion for Summary Judgment. After fully considering the record and arguments of all parties, the court granted the Defendants’ Motions for Summary Judgment. It is from this Order that Blain appeals.
¶9 We restate the issue on appeal:
¶10 Did the District Court err when it granted summary judgment to SMC and Aafedt based on its conclusion that there was a complete absence of any facts from which it could be proven or inferred by a jury that Aafedt’s actions were malicious under § 39-71-413, MCA (1999)?
STANDARD OF REVIEW
¶11 Our review of a summary judgment order is de novo. Summary judgment is an extreme remedy and is proper only when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law. See Rule 56, M.R.Civ.P. The initial burden is on the moving party to establish that there is no genuine issue of material fact; and once met, the burden shifts to the party opposing the motion to establish otherwise. Erker v. Kester, 1999 MT 231, ¶ 17, 296 Mont. 123, ¶ 17, 988 P.2d 1221, ¶ 17. Furthermore, on review, all reasonable inferences that might be drawn from the offered evidence should be drawn in favor of the party opposing summary judgment. Erker, ¶ 17. However, once the court determines that genuine issues of fact do not exist, “the court must then determine whether the moving party is entitled to judgment as a matter of law.” We review this legal conclusion to determine whether the court erred. Wages v. First Nat. Ins. Co. of America, 2003 MT 309, ¶ 9, 318 Mont. 232, ¶ 9, 79 P.3d 1095, ¶ 9.
DISCUSSION
¶12 Did the District Court err when it granted summary judgment to SMC and Aafedt based on its conclusion that there was a complete absence of any facts from which it could be proven or inferred by a jury that Aafedt’s actions were malicious under § 39-71-413, MCA (1999)?
¶13 Section 39-71-413, MCA, provides the exception to workers’ compensation exclusivity and immunity from tort liability for employers and co-workers for injuries and death occuring within the course and scope of employment. This statute, as it read at the time of this incident, stated in relevant part:
[i]f an employee receives an injury while performing the duties of his employment and the injury or injuries so received by the employee are caused by the intentional and malicious act or omission of a servant or employee of his employer, then the employee or in case of his death his heirs or personal representatives shall, in addition to the right to receive compensation under the Workers’ Compensation Act, have a right to prosecute any cause of action he may have for damages against the servants or employees of his employer causing the injury.
Section 39-71-413, MCA (1999) (emphasis added).
¶14 In Sherner v. Conoco, Inc., 2000 MT 50, 298 Mont. 401, 995 P.2d 990, we took the opportunity to clarify the definition of “intentional and malicious act or omission” within the context of § 39-71-413, MCA (1999). In interpreting these terms, we stated that we were guided by the plain language of the statute as well as by the definition of “actual malice” as described in § 27-1-221, MCA. Sherner, ¶¶ 36-38. Under this 1999 statute, a plaintiff must pass the conjunctive test of proving that his employer or co-employee intentionally and maliciously acted or omitted to act. See § 39-71-413, MCA (1999).
¶15 In this case, the District Court determined that Aafedt did intentionally act by moving the train without seeing Everhard. It found that “[i]f intention is defined without regard to the consequences of an act, then Aafedt’s acts meet the Sherner definition of intent.” The court also stated that the facts of this case did not reflect Aafedt having an intent to harm Everhard when he moved the train.
¶16 Next, the court pointed out that the second part of the inquiry requires Blain to show that Everhard suffered an injury caused by a malicious act or omission by Aafedt or SMC in accordance with the definition of “actual malice” found in § 27-1-221(2), MCA (1999). The court determined from the facts of the case that it could not find actual malice by either defendant.
¶17 The District Court stated that to make a finding of actual malice, Aafedt would have had to know of facts creating a high probability of injury to Everhard. In responding to Everhard’s signal to proceed, the court concluded that Aafedt was simply performing his job of moving the train forward and consequently, under these facts, could not be acting in a manner that created a high probability of injury to Everhard. In finding that Aafedt’s and SMC’s acts were not malicious, the court stated that Aafedt did not move the train with conscious disregard, intentional disregard or indifference to the high probability of injury to Everhard, as he had every reason to believe that Everhard was in a position of safety by the fact that he signaled Aafedt to move the locomotive forward. The District Court concluded that Blain may have satisfied the “intentional” prong of the test, however, she could not establish that Aafedt deliberately proceeded to act in conscious or intentional disregard or even indifference to the high probability of injury to Everhard. Thus, it granted summary judgment to SMC and Aafedt.
¶18 At the outset, we conclude that Blain misread the District Court’s Order regarding Aafedt’s actions meeting the intentional prong. On appeal, Blain argues that the District Court ignored the essence of Sherner and alleges that the District Court adopted the “intent to harm” approach-one that Sherner abrogated-when it concluded that Aafedt intended to move the train but the facts of this case “do not show an intent to harm Everhard by Aafedt when he moved the train.” Thus, she asserts that the District Court erred when it concluded that Everhard was not killed by an intentional act. We conclude that a fair reading of the District Court’s entire order indicates that the court was convinced that Aafedt did, in fact, meet the definition of intention as described in Sherner. In any event, our review of the record indicates that Aafedt’s conduct was “intentional” under the Sherner standard.
¶19 Blain next contends that a reasonable person may conclude that Aafedt did, in fact, deliberately proceed to act in conscious disregard of, or with indifference to, the high probability of injury to Everhard, thus meeting the definition of actual malice. As such, she maintains that there were genuine issues of material fact, and the court erred in granting summary judgment. She bases her argument upon the following facts: (1) Aafedt’s knowledge that the brakeman was supposed to be in close proximity to the switch; (2) Everhard, as an experienced brakeman, had always done so; (3) this measure was proscribed for safety, that only if Aafedt saw Everhard standing at the switch would Aafedt know that Everhard was in a position of safety before continuing to drive the train forward; (4) this knowledge was critical to prevent an accident; and (5) Aafedt’s conscious decision to move the train forward even though he had already observed that Everhard was not standing at the switch prior to the locomotive reaching the switch.
¶20 Blain relies on Wolf v. Williamson (1995), 269 Mont. 397, 889 P.2d 1177, to argue that she is entitled to the inference of Aafedt’s state of mind, and Aafedt’s state of mind as to the foreseeability of injury to Everhard is a question of fact for the jury. Kolar v. Bergo (1996), 280 Mont. 262, 266-67, 929 P.2d 867, 869-70. Blain asserts that summary judgment should not be used as a substitute for a trial if factual controversy exists, and such controversy exists here.
¶21 To rebut Blain’s argument, SMC and Aafedt point out that the evidence she presented pertained to establishing intention, not malice, and the District Court granted summary judgment based upon the lack of evidence of malicious conduct. The Defendants assert that there is no evidence that there was a high probability of injury at all, much less that Aafedt acted indifferently to it. In maintaining that the most Blain can prove is Aafedt’s negligence, SMC and Aafedt underscore that “allegations of negligence, no matter how wanton, are insufficient to avoid the exclusive remedy of the Workers Compensation Act.” Sherner, ¶ 32 (quoting Schmidt v. State (1997), 286 Mont. 98, 105, 951 P.2d 23, 28). The Defendants maintain that the District Court correctly concluded that summary judgment was proper. We agree.
¶22 Sherner requires a plaintiff to meet both prongs of § 39-17-413, MCA (1999), intentional and malicious act or omission, in order to avoid the Workers’ Compensation exclusivity doctrine. As previously stated, the District Court concluded that Aafedt’s conduct was intentional as we have defined in Sherner. The determinative question in this case is whether Everhard’s death was caused by a malicious act or omission by SMC or Aafedt in accordance with the definition of actual malice found in § 27-1-221(2), MCA (1999). Section 27-1-221(2), MCA (1999), provides:
[a] defendant is guilty of actual malice if the defendant has knowledge of facts or intentionally disregards facts that create a high probability of injury to the plaintiff and: (a) deliberately proceeds to act in conscious or intentional disregard of the high probability of injury to the plaintiff; or (b) deliberately proceeds to act with indifference to the high probability of injury to the plaintiff.
¶23 We agree with the District Court that a reasonable person could not conclude that Aafedt intentionally disregarded facts that created a high probability of injury to Everhard. Once Everhard signaled Aafedt to move the locomotive forward, Aafedt acted as a reasonable person responding to the signaling procedure established by SMC. Upon receiving Everhard’s signal to proceed, Aafedt was reasonable to assume that Everhard was in a position of safety and would remain so. This procedure has been successful in preventing injury in the past and there was no reason for Aafedt to believe it would not on this occasion. Both Everhard and Aafedt were aware of this procedure established by SMC and acted accordingly. Although safer procedures may certainly be required in the future, we do not think Aafedt’s conduct can be characterized as malicious under the circumstances. Aafedt’s conduct was in stark contrast to the conduct of management in Sherner who intentionally allowed their employee to enter a space when it was known that hydrogen sulfide gas was present.
¶24 We agree with the District Court that, as a matter of law, it cannot be said that Aafedt deliberately proceeded to act in conscious or intentional disregard or even indifference to the high probability of injury to Everhard pursuant to the definition of actual malice. See § 27-1-221(2), MCA (1999). Absent meeting the definition of actual malice, Blain could not overcome the exclusive remedy rule under the Workers’ Compensation Act and her claim fails as a matter of law. Accordingly, summary judgment in favor of SMC and Aafedt was proper. We affirm.
CHIEF JUSTICE GRAY, JUSTICES LEAPHART, WARNER and COTTER concur. | [
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MR. JUSTICE SMITH
delivered the opinion of the court.
This suit was brought to obtain a decree declaring a resolution of the council of the defendant city of Poison, creating a special-improvement district, null and void, and to enjoin the defendants from entering into a contract or accepting any bid for the construction of the improvements contemplated by the resolution. ' The appeal is from an order of the district court dissolving a temporary restraining order. This court enjoined the defendants from proceeding, pending the appeal.
1. The first contention of the appellants is that the resolution failed to sufficiently state the character of the improvements to be made.
Section 4 of the resolution reads as follows: “That the character of the improvements to be made in said district are hereby described as follows: The construction of concrete sidewalks and curbs on the east side of Kootenai avenue and the east and west sides of Third street within the boundaries of said district. Also the east side of block 4 and along the north side of A street from Kootenai avenue east to the center line of lot 2, block 3, the north side and the south sides of B, C and D streets from Third avenue to the alley between Third street and Fourth street along the west half of the south side of block 19, and the east half of the south side of block 20 and along the north and south sides of B street from Third street west to the alley line in block 11. The construction of a concrete cross-walk on the east side of Kootenai avenue at A street, four concrete cross-walks at the intersection of B street and Third street, four concrete cross-walks at the intersection of C street and Third street, and four concrete cross-walks at the intersection of I> street and Third street, and one concrete cross-walk on the north side of E street across Third street. Also the grading, surfacing and graveling of the roadway of Third street and Kootenai avenue and all of B, C and D streets between Third street and the alley between Third street and Fourth street and all of A street within the boundaries of said district.”
Section 3397, Bevised Codes, invoked by the appellants, among other things provides that whenever it is desired to create a special improvement district- for the purpose of grading, paving, curbing, macadamizing, planting trees, constructing grass plots and sowing grass seed thereon, constructing sidewalks, sewers and gutters, in any street, avenue or alley, the council shall by resolution designate the number of such district, describe the boundaries thereof, and state therein the character of the improvement or improvements which are to be made, an approximate estimate of the cost thereof and the time when the council will hear objections to its final adoption.
In the case of Levy v. City of Chicago, 113 Ill. 650, the court said: “The statutes require the city council, when an improvement is to be made by special assessment, to pass an ordinance specifying the nature, character, locality and description of such improvements.” It was accordingly held that an ordinance which did not meet the requirements of the statute was void. This case has been followed in City of Sterling v. Galt, 117 Ill. 11, 7 N. E. 47; City of Kankakee v. Potter, 119 Ill. 324, 10 N. E. 212; Otis v. City of Chicago, 161 Ill. 199, 43 N. E. 715; Cass v. People, 166 Ill. 126, 46 N. E. 729; People v. Hurford, 167 Ill. 226, 47 N. E. 368; Sanger v. City of Chicago, 169 Ill. 286, 48 N. E. 309; and City of Geneseo v. Brown, 250 Ill. 165, 95 N. E. 172.
In Fay v. Reed, 128 Cal. 357, 60 Pac. 927, the court held that under a statute requiring a city council, before ordering work on a street improvement, to pass a resolution of intention to do so “describing the work,” a resolution to improve a street by grading, 'curbing and for the construction of “suitable drains and inlets at all intersecting street crossings to carry the surface water of intersecting streets and of Market street into tbe main branch sewer running along said Market street,” was fatally defective, because it failed to specify the number of drains and inlets, or the size of the drains, or the materials of which they were to be constructed, or the kind and character of the inlets. To the same general effect are the cases of Grant v. Barber, 135 Cal. 188, 67 Pac. 127, and Lambert v. Cummings, 2 Cal. App. 642, 84 Pac. 266.
These proceedings are purely statutory. The only limitation upon the power of the legislature is that the property of the citizen shall not be taken without due process of law. An opportunity to be heard must be afforded. (See Cunningham v. Northwestern Improvement Co., 44 Mont. 180, 119 Pac. 154.) The contents of the resolution, in so far as they relate to notice of what improvements are contemplated, are for the legislature to dictate, and so long as a reasonably comprehensive notice is provided for, the courts have no power to declare it insufficient. Our statute does not require a detailed description of the work to be done, or any description, as such. We have no requirement that the “nature, locality or description of such improvements” shall be set forth in the resolution. All that is demanded is that the council shall designate the “character of the improvement.” The legislatures of sister states have seen fit to require a more detailed description of the contemplated improvement, and the courts of those states have very properly held that the council must comply with the statutory command. The fact that our lawmakers did not see fit to declare that the resolution must contain a description of the work, as is the case in Illinois and California, is good evidence that the general character of the work is all that is necessary to be given in the resolution. We think the resolution adopted by the city council of Poison was sufficient in this regard.
2. The minutes of the city council show this entry under date of March 11, 1912: “Upon motion duly made, seconded and carried, the graveling of the streets will be left out of the specifications.” The complaint alleges that this action was taken without notice to the plaintiffs and the change was a ma terial one. The notice to contractors, inviting bids for the work, omits any reference to graveling the streets. It is contended on behalf of the appellants that the resolution of the council was a contract,, and its action in resolving not to gravel the streets was a violation thereof which rendered it void.
On general principles, the resolution being the sole authority for the construction of a public improvement to be paid for by special assessment, the municipal authorities have no right to change the nature, locality or character of the improvement as set forth in the resolution. Where the improvement about to be constructed is materially and substantially different from that authorized by the resolution and the cost of the same is materially increased, the courts will interfere. But a substantial compliance of the work done with that provided for in the resolution is all that is necessary. (Hamilton on Law of Special Assessments, secs. 391, 392.) It is alleged that the omission to gravel will be a substantial and material change from the original plan as evidenced by the resolution. There is not anything in the record, however, to prove the allegation.. The change may be altogether immaterial for aught we know. It may be that the condition of the streets in question is such that but little, if any, graveling was contemplated in the first instance, and that the council afterward considered the matter of graveling of so little consequence that it resolved to omit it altogether. It was for the appellants to prove the materiality of the change in the resolution and this they failed to do. This court cannot take judicial notice of it. It is altogether possible, also, that the council may provide for graveling in separate specifications.
3. Among other provisions the resolution contained the following: “That to defray the cost of said improvements an assessment shall be levied against all the assessable property within said district, and each lot or parcel of land within said district shall be assessed for that part of the whole cost which its area bears to the entire district, exclusive of streets, alleys and public places.”
It is finally urged upon us that the proceedings of the council were void for the reason, in effect, that the owner of an inside lot will be obliged to bear tbe same proportion of expense for improvements on side streets adjacent to a comer lot of the same area as would the owner of tbe comer lot, and it is said that tbe benefits to tbe inside lot owner are disproportionate to .those received by owners of other lots in tbe district. Section 3396, Revised Codes, provides that whenever tbe council desires to make improvements and extend the payments for the same over a period of three years, it shall enact by ordinance that the entire expense of all improvements within each special improvement district, including cost of street and alley intersections, shall be paid by the entire district, each lot or parcel of land within such district to be assessed for that part of the whole cost which its area bears to the area of the entire district, exclusive of streets, alleys and public places. It will thus be seen that the plan of assessment pursued by the city council of Poison was strictly in accord with the statute. The learned counsel who argued the cause for the appellants states in his brief that it is not insisted that the plan provided by the Code is wrong, “but that the city council has in this case included the side streets, thus forcing the inside lot owner to pay for the additional improvement to the already more valuable comer lots; that it has applied a scheme of improvement which the law did not contemplate and which is therefore void.” It is undoubtedly true that hardship to individuals is sometimes involved in applying the hard-and-fast rule of the statute to particular eases. It is likewise true that some scheme of assessment must necessarily be enforced to pay for special improvements. The legislature in its wisdom has adopted the “superficial area” rale. This court in McMillan v. City of Butte, 30 Mont. 220, 76 Pac. 203, declared that this rule amounts to a legislative declaration that all property in a proposed district is, presumptively, equally benefited by the improvement. That case settled the law in this state as to the legality of the rale, and although the lots there in question were somewhat differently located with reference to the proposed improvement than are those of the appellants, nevertheless the law permits the respondent city council to proceed, ex actly as it did. We find nothing in principle to distinguish this case from that of McMillan v. City of Butte, supra.
The order is affirmed and the restraining order heretofore issued by this court is dissolved.
Affirmed.
Mb. Justice Holloway concurs. | [
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MR. JUSTICE' GALEN
delivered the opinion of the court.
On motion for a rehearing it has been thought best to make some changes in the original opinion so as to remove doubt as to the proper practice to be pursued in such cases as this. Therefore, the original opinion is withdrawn, this one substituted, and the respondents’ motion for a rehearing denied.
This is an original application for a writ of prohibition. An alternative writ was issued, made returnable October 28, 1925. The respondents filed a motion to quash the writ and the matter was regularly brought on for hearing and argument on the day set, pursuant to the order of this court. From the affidavit filed on behalf of the relator in application for the writ, and facts stipulated by counsel, the salient facts appear.
In a mandamus proceeding instituted in the district court of Golden Valley county, one Dana L. Case therein secured a peremptory writ, directed to H. A. Bolles as county treasurer and the board of county commissioners of Golden Valley county, requiring them to make provision for the payment of certain county warrants held by the relator. By the judgment the relator was awarded his costs, and among other things it is therein provided that “this decree is given without prejudice to relator’s claim for or right to recover the damage he has sustained on account of these proceed ings.” Judgment was entered therein on December 22, 1924, and a peremptory writ issued forthwith. An appeal was perfected to this court from the judgment, and on June 29, 1925, the judgment was affirmed. (State ex rel. Case v. Bolles, County Treasurer, 74 Mont. 54, 238 Pac. 586.) On July 23, 1925, after remittitur was received from this court by the district court, the respondents therein fully satisfied the judgment by payment of the warrants. On the, sixth day of February, 1925, pending a decision of the case on appeal, the relator filed in the office of the clerk of the district court of Golden Valley county, and duly served, an application for the allowance of damages alleged, comprising attorney’s fees, traveling and other expenses incurred in the action, and also claim for accrued interest on the warrants and for an attorney’s fee for presentation of the cause on appeal to this court, which was entitled in the same proceeding. No demand for damages was made in the original application for the writ of mandate, nor during the course of the hearing, and the judgment was entered therein without reference to any damages suffered by the relator, save as above indicated. It appears that the respondents will proceed to hear the application and determine the right of Case to damages, and the amount thereof, unless prohibited by this court from so doing.
The only question presented for determination is whether the district court now has jurisdiction to proceed with the assessment of such damages as may have been suffered by the relator in the mandamus action.
So far as pertinent, the statute governing the allowance of such damages provides: “If judgment be given for the applicant, he may recover the damages which he has sustained, as found by the jury, or as may be determined by the court or referees, upon a reference to be ordered, together with costs; and for such damages and costs an execution may issue; and a peremptory mandate must also be awarded without delay.” (See. 9858, Rev. Codes 1921, as amended by Cbap. 5, Laws of 1925.)
“A statute must be so construed as to give effect to all its parts and no part of it will be held inoperative if it is reasonably possible to reach any other conclusion,” (City of Billings v. Public Service Co., 67 Mont. 29, 214 Pac. 608; In re McLure’s Estate, 68 Mont. 556, 220 Pac. 527.) Courts will give meaning to every word, phrase, clause and sentence therein if it is possible to do so. (Stange v. Esval, 67 Mont. 301, 215 Pac. 807; Mid-Northern Oil Co. v. Walker, 65 Mont. 414, 211 Pac. 353; Daley v. Torrey, 71 Mont. 513, 230 Pac. 782.) “A statute must be given effect in its entirety if it is reasonably possible to do so.” (State ex rel. Koefod v. Board of County Commrs., 56 Mont. 355, 185 Pac. 147.) Of two admissible constructions of a statute, courts are never justified in adopting one which defeats manifest object of law (State ex rel. Boone v. Tullock, 72 Mont. 482, 234 Pac. 277), and in every instance of statutory construction it is the fundamental duty of the courts to ascertain the intent of the legislature. (Anaconda C. M. Co. v. Junod, 71 Mont. 132, 227 Pac. 1001.) If reasonably possible the statute must be so interpreted as to make it operative.
Applying these rules of construction we are of opinion that the practice in legislative contemplation and by the statute intended to be prescribed, more clearly stated, is that after the applicant for a writ of mandate shall have made prima facie showing of right to the issuance of such writ, should he claim damages consequent upon having been required to resort to mandamus proceedings, he shall assert right thereto and submit such proofs as he may have covering the several items of damage claimed. At the conclusion of the hearing, should the court determine that the writ shall issue, judgment thereupon shall be entered awarding the applicant a peremptory writ and such damages as he may be found to have sus tamed incident to the proceeding, together with his costs. Thereupon a peremptory writ will issue forthwith, and the applicant may secure the issuance of an execution for the amount of damages and costs awarded him in the judgment.
The statute is silent as to the proper course to be pursued in making claim for the damages authorized to be awarded, and with propriety some future legislative assembly may specifically outline the proper procedure. In the absence of definite direction as to the proper practice in such cases, we think the applicant for the writ may with propriety make claim in his original application for such damages as can then be reasonably anticipated; or the course pursued in the instant ease 'by filing in the action a bill of particulars, covering the several items of damages claimed, would be unobjectionable if adopted before conclusion of the hearing. Where the method of procedure is not definitely pointed out by a statute conferring a specific right, any suitable mode of procedure may be resorted to which may appear best to conform to the spirit of the law. (Sec. 8882, Rev. Codes 1921.) Manifestly, however, the right to recover damages must be claimed and proof submitted in support thereof before the conclusion of the hearing; otherwise the court, after final judgment entered, is without jurisdiction to make award thereof. In this case the attempt made in the judgment to reserve the applicant’s right to damages sustained on account of the proceeding was wholly gratuitous and may be treated as surplusage.
Under the statute as we interpret it the* demand is not segregable. This being so all rights involved in the mandamus proceeding properly triable in the district court must be adjudicated therein. Mandamus being an action at law rather than in equity judgment therein is conclusive as to all of the relator’s rights properly involved therein, whether asserted or not. (See. 10561, Rev. Codes 1921.) One versed in the law cannot conceive of a court by its judgment finding the amount of the plaintiff’s actual damages and in the same judgment making reservation to him of suck prospective damages as he may thereafter suffer to he tried out in the same action. Were it to so do it is manifest that such attempted reservation would he wholly disregarded as a nullity. An attempted reservation of such a right would he clearly unavailing, and so too in mandamus, under the construction we have given the statute. A reservation of rights involved may be and is frequently effectually made in a decree in equity, but not so in a judgment at law, as to matters properly embraced in the action.
“An adjudication is final and conclusive not only as to the matter actually determined, but as to every matter which the parties might have litigated and have had decided as an incident to, or essentially connected with, the subject matter of the litigation, and every matter coming within the legitimate purview of the original action, both in respect to matters of claim and of defense.” (Harris v. Harris, 36 Barb. (N. Y.) 88; Gray v. Dougherty, 25 Cal. 266; Estate of Bell, 153 Cal. 331, 95 Pac. 372; Helpling v. Helpling, 50 Cal. App. 676, 195 Pac. 715; Southern Pacific v. Edmunds, 168 Cal. 415, 143 Pac. 597; Thompson v. Myrick, 24 Minn. 4.) Anything is barred which might and should have been presented as an inseparable part of the demand. (Black on Judgments, 2d ed., see. 620; Thompson v. Myrich, supra.)
From the record it would appear that the applicant for the writ waived his right to damages incident to the proceeding as he neither asserted claim thereto nor submitted any proof upon which the court could base judgment as to the amount thereof. The language used in the statute is somewhat awkward and not easily interpreted and applied; however, we think the legislative intent as to the proper practice in such cases is as stated above. It cannot be given other interpretation without violating the canons of construction, and rendering inoperative the legislative intent. Such a construction of the statute makes it operative, the practice free from doubt, and is consistent with former decisions of this court. In the ease of Bailey v. Edwards, 47 Mont. 363, 133 Pac. 1098, the plaintiff sought to recover, in an independent action, damages comprising the emoluments due him during the period he was unlawfully deprived of his office of sergeant of police of the city of Helena. The defendant plead in bar the judgment rendered in a mandamus proceeding entered before the institution of the action, it being contended that the plaintiff’s right to damages should have been litigated and determined in that proceeding, and that since damages were not therein claimed or determined, the plaintiff was estopped and barred from recovery in a separate suit. Mr. Justice Sanner, interpreting this statute, and speaking for this court, said: “The damages therein provided to be allowed in mandamus proceedings. are such damages as are incidental to the proceedings themselves, and not those arising out of the prior preclusion or deprivation which the writ itself was invoked in part to redress. This brings us within, not the letter, but the spirit of the decision in Peterson v. City of Butte, 44 Mont. 401, Ann. Cas. 1913B, 538, 120 Pac. 483.” The holding in that ease is entirely in accord with our present views, and as applied to the case before us, the damages now claimed 'by Case, arising as they do in consequence of the mandamus proceeding, should have been litigated and determined therein. Such practice was observed and approved in the ease of State ex rel. Shea v. Cocking, 66 Mont. 169, 28 A. L. R. 772, 213 Pac. 594, wherein Mr. Chief Justice Callaway, in interpreting this statute, said: “The question as to whether this word ‘damages’ includes the expense which relator has been put to in paying for the services of a lawyer to bring the proceeding, must be answered in the affirmative. Under the construction given the section in Bailey v. Edwards, 47 Mont. 367, 133 Pac. 1098, with which we are satisfied, this must be so. * * * There is reason underlying this interpretation. In the instant case the relator was police judge of the city of Butte and entitled to the salary provided by law. He was deprived of this salary by the wrongful acts of the defendants; * * * . The relator was compelled to employ and pay an attorney. The court found $250 to be the amount of his damage. Under the statute he is entitled to reimbursement in that sum; his attorney’s fee is not in the nature of costs; the statute provides for damages and costs.”
"While damages are allowable in such cases, they may not be recovered where the right thereto has neither been asserted nor proved. (16 Cal. Jur. 880; Beatty v. Clark Colony Water Co., 28 Cal. App. 751, 752, 153 Pac. 991; Colthurst v. Fitzgerald, 56 Cal. App. 740, 206. Pac. 471; Gould v. Moss, 158 Cal. 548, 111 Pac. 925.) It is therefore clear that the relator should have had the damages now claimed by him litigated and determined in the mandamus action; and not having done so, the court is now without jurisdiction to proceed in that action to determine them.
In Achey v. Creech, 21 Wash. 319, 58 Pac. 208, the supreme court, construing the "Washington statute (Laws of 1895, p. 118), identical with ours, held that as the statute gives an applicant for mandamms the right to recover in such a proceeding the damages thereby sustained, the law will presume that he demanded and received therein all that he was entitled to, and will not permit him to subject the defendant to a multiplicity of suits when all the subjects of controversy could and should have been decided in the one action.
It is elementary that all questions which might be litigated in an action or proceeding of which the court has jurisdiction are res judicata as to all parties thereto and their privies. (24 Am. & Eng. Ency. of Law, 2d ed., p. 781.) This rule has been applied to issues that might be litigated in proceedings to obtain a writ of mandamus. (Bailey v. Edwards, supra; Holt County v. National L. Ins. Co., 80 Fed. 686, 25 C. C. A. 469; Sauls v. Freeman, 24 Fla. 209, 12 Am. St. Rep. 190, 4 South. 525; Kaufer v. Ford, 100 Minn. 49, 110 N. W. 364; Achey v. Creech, supra.)
The right of Mr. Case to recover the interest accrued and owing on the warrants must be determined in an independent action; and likewise, his claim to allowance of a reasonable attorney’s fee consequent to the appeal of the mandamus case to this court, if such fee is recoverable at all. It being manifest that the district court is without jurisdiction to proceed further in the mandamus action, a peremptory writ of prohibition will issue forthwith.
Writ Issued.
Mr. Chief Justice Callaway and Associate Justices Holloway and Matthews concur.
MR. JUSTICE STARE:
I agree with the construction of the mandamv,s statutes as declared in the foregoing opinion, but am not in accord with what is said concerning that portion of the judgment in the original mandamus proceeding which declares: “This decree is given without prejudice to relator’s claim for or right to recover the damage he has sustained on account of these proceedings.” What motivated the court to insert this reservation, whether it was done by stipulation of the parties or caused by uncertainty as to the proper method of procedure, or both, does not appear, but this does not seem material to me. The important matter is that the reservation was incorporated.
Since the decision is grounded upon the hypothesis that the relator in the mandamus proceeding is now forever precluded from maintaining any action or proceeding for the recovery of any damages which he may have sustained incident thereto, it is needless to consider whether the particular method adopted by him — filing a motion therein after judgment — was the proper one, and I pass that matter.
If relator and respondents in the mandamus proceeding had prior to the hearing therein or during the progress thereof, for considerations which appeared sufficient to them, contracted between themselves that the damages incident to the proceeding which the relator might be entitled to recover should not be determined therein but might be recovered in a subsequent action or proceeding, I can perceive no reason why, under appropriate proceedings or in a proper action based on that contract, the relator might not recover such damages. Surely, the rule against splitting demands would not preclude him from doing so, since that rule is clearly for the benefit of a party defendant, and if he agrees to such splitting the courts will respect the agreement. (See cases cited in 1 K, C. L. 342, 343; 1 C. J. 1109, see. 280.)
Even if the -judgment containing this reservation was erroneous on its face, it was binding upon the parties to the suit unless and until reversed on appeal. As a fact, an appeal from that judgment was prosecuted in this court by the defendants in the mandamus proceeding, but no complaint was made of this reservation and the judgment containing the reservation was affirmed in whole by this court. (State ex rel. Case v. Bolles, 74 Mont. 54, 238 Pac. 586.) "Whatever right was reserved to the relator in that action to take further proceedings for the ascertainment and recovery of damages which he had sustained incident to the mandamus proceeding became res adjudícala and this right ought not now to be questioned by the relator here. “A judgment or decree which expressly excepts or reserves from its operation specified rights or claims of the parties in suit, or the decision of questions in issue, or the right to take further proceedings in respect to certain matters, is not a bar to a subsequent action on the matters so reserved; but, on the contrary, the reservation itself becomes res adjudícala, and prevents the raising of any question as to the right to bring or maintain such subsequent suit.” (34 C. J. 797; see, also, Bodkin v. Arnold, 45 W. Va. 90, 30 S. E. 154; Ahlers v. Smiley, 163 Cal. 200, 124 Pac. 827; Hardin v. Hardin, 26 S. D. 601, 129 N. W. 108.)
As the basis of an action a judgment is considered as a contract of record. (15 R. C. L. 573; Story on Contracts, 5th ed., sec. 2; Chitty on Contracts, 11 Am. ed., 3; 1 Parsons on Contracts, 9th ed., 8.) Treating the reservation in the judgment as a contract of record, which has become res adjudicata, it appears to me that the parties to the mandamus proceeding now stand in the same relation thereto as though they had themselves entered into a formal contract, reserving to the relator therein the right by an appropriate proceeding thereafter to recover the damages which he had sustained incident to that proceeding. For this reason it is my conclusion that the declaration in the foregoing opinion to the effect that this reservation is a nullity, wholly gratuitous and should be treated as surplusage, is erroneous and from that portion thereof I dissent. | [
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] |
MR. CHIEF JUSTICE HASWELL,
delivered the opinion of the court.
Defendant Howard L. Bashor appeals from his conviction by a jury in Toole County of the crime of deliberate homicide.
This case arose out of the death of James Hurley. It is undisputed that Hurley died of a gunshot wound and that defendant fired the fatal shot. The parties, however, present conflicting versions of the events which led to Hurley’s death.
The State’s version is that Hurley, Marian Irgens, Duane Enneberg, and Jeanette Frost visited a bar in Kevin, Montana, on the evening of December 2, 1977. During the evening, Marian Irgens twice observed defendant’s car being driven down the street next to the bar. At approximately 1:30 a.m. of December 3, the group decided to leave the bar. As they left, they noticed defendant’s car parked a short distance away with the headlights on. They saw William Schaeffer, a friend of defendant, standing in front of the car, hollering at them in a belligerent manner. The four friends began to get into Hurley’s car, but the hollering continued. Finally, Hurley and Enneberg started walking in the direction of defendant’s car. As Enneberg and Hurley approached, Schaeffer confronted Enneberg in front of the car. Hurley proceeded toward the driver’s window. The defendant was sitting in the driver’s seat. A few seconds later a shot was heard, and Hurley walked away from the car saying, “I’ve had it.” He died shortly thereafter.
Defendant’s version is that he and Schaeffer had noticed Hurley’s car at the Kevin bar during the early morning hours of December 3, 1977, and decided not to go inside until Hurley and his friends had left. Hurley approached defendant’s car while Schaeffer was still sitting in the passenger’s seat of the car. Defendant rolled down his window and at about this time, Schaeffer got out of his side of the car and began to walk around to the front of the car. Meanwhile, Hurley reached into the driver’s window and began trying to pull defendant out of the car. Fearing that his eye, which had been operated on the previous summer, would be permanently damaged in a fight, defendant took- his gun from the car console and fired at Hurley.
Prior to trial Schaeffer underwent a polygraph examination. His answers were to the effect that Hurley had been the aggressor in the altercation. The operator of jthe polygraph testified that he was satisfied as to the truthfulness of Schaeffer’s answers. The State filed a motion in limine seeking to prohibit defendant from entering or attempting to enter into evidence the polygraph examination. The motion was granted.
The defendant raises nine specifications of error:
1. Whether the trial court erred in denying defendant’s motion for change of place of trial?
2. Whether the trial court erred in denying defendant’s challenge to the jury panel and in denying defendant’s challenge to juror Pettigrew for cause?
3. Whether the trial court erred in failing to properly hear and consider defendant’s offer of proof concerning the polygraph examination of witness Bill Schaeffer?
4. Whether the trial court erred in ruling that the examination of Bill Schaeffer was inadmissible as a matter of law?
5. Whether the trial court erred in refusing admission of the polygraph test given Bill Schaeffer?
6. Whether the trial court erred in denying defendant’s motion to set aside the verdict because of prejudicial remarks made by the special prosecutor in his closing argument?
7. Whether the trial court erred in permitting the State to place into evidence acts, statements and circumstances occurring prior to December 2, 1977?
8. Whether the trial court failed to fairly and fully instruct the jury on the law of self-defense?
9. Whether the trial court erred in not instructing the jury on the lesser included offenses of mitigated deliberate homicide and negligent homicide?
In the present case the defendant moved for a change of place of trial based on inflammatory pretrial publicity and general bias against him in Toole County. Defendant and the State each submitted affidavits on the matter, and a hearing was held on the motion in District Court. The judge reserved his ruling on the issue pending the outcome of voir dire examination, at the conclusion of which he denied defendant’s motion. Defendant contends this denial constituted reversible error.
Section 46-13-203(1), MCA, provides that a defendant “may move for a change of place of trial on the ground that there exists in the county in which the charge is pending such prejudice that a fair trial cannot be had in such county.” A motion for change of venue is addressed to the discretion of the trial court, and a denial is not reversible error in the absence of an abuse of discretion by the trial court. State v. Kirkaldie (1978), 179 Mont. 283, 587 P.2d 1298, 1303; State v. Lewis (1976), 169 Mont. 290, 295, 546 P.2d 518, 521. In State v. Board (1959), 135 Mont. 139, 143-144, 337 P.2d 924, 927, this Court said:
“Indicia of this denial of fair trial, resulting from prejudicial publicity, as gleaned from our law, seems to be: Arousing feelings of the community, threat to personal safety of defendant, established opinion of members of the community as to the guilt of the accused, news articles beyond the objectivity of news printing and dissemination, State v. Dryman, 127 Mont. 579, 269 P.2d 796, and difficulty or failure in securing a fair, impartial jury from the community in which the news articles appeared, State v. Bess, 60 Mont. 558, 199 P.426.
“Our court looks for a chain reaction. It starts with the basic premise that the accused is entitled to a fair trial. Next it checks the publicity complained of, as to its contents and more important, as to its total effect upon the ‘fair trial right.’ Further, it looks at effects in the form of the discriminating marks we have discussed. Finally, it objectively considers the end result — was a fair trial denied as a result of the publicity and its effects? If its findings are negative it refuses to find abuse of discretion on the part of the trial court.”
The news items of which defendant complains consisted of a newspaper article appearing on Friday, December 9, 1977, and a statement on the local radio that was made a day or two after the shooting. The newspaper article had the headline: “Bashor Charged with Deliberate Homicide in Shooting.” The first two paragraphs of the article read as follows:
“Shades of the old west were re-enacted at Bert’s Bar in Kevin early Saturday morning, when a bar patron was shot down and killed, at about 1:15.
“According to reports, James F. Hurley, 41, was inside the bar when Howard ‘Ozzie’ Bashor, 56, drove up and sent word inside for Hurley to come outside. Hurley walked outside and was shot down.”
Defendant contends that the article insinuates he shot Hurley in cold blood. The State agrees that the article was an in correct statement of the facts. However, a misstatement of facts in a single newspaper article does not necessarily constitute sufficient grounds to change venue. In State v. Bess (1921), 60 Mont. 558, 199 P. 426, this Court said that newspaper articles may not be the basis of a change of venue unless the articles “. . . were passionate enough to excite undue prejudice, to the extent of rendering it impossible for an accused to secure a jury free from exception.” 60 Mont, at 569, 199 P. at 429, In State v. Sandstrom (1978), 176 Mont. 492, 580 P.2d 106, rev’d on other grounds, Sandstrom v. Montana (1979), 442 U.S. 510, 99 S.Ct. 2450, 61 L.Ed.2d 39, this Court said that “[published accounts of crimes are not considered prejudicial unless so passionate as to excite undue prejudice, rendering it impossible to empanel a trial jury free from prejudice against the defendant.” 580 P.2d at 108, 35 St.Rep. at 746.
The article complained of states that the defendant “. . . sent word inside for Hurley to come outside.” This is the only statement which is actually contrary to the undisputed facts. The article only appeared once, and this was six months before the trial. To justify a change of venue not only must an article be adverse to the defendant, it must also make it impossible to empanel a fair jury.
During the examination of prospective jurors, each person who eventually sat on the jury stated either that they had not read the article at all or that they could not remember any of the details other than that someone had been shot, or that they could put aside any prejudice and judge the case solely on the evidence presented. The article is not the impassioned type of news item which will justify a change of venue. Under the circumstances the jury could not have been influenced by the article in any event. Consequently, the article did not present a sufficient basis for granting a change of venue.
The radio broadcast of which the defendant complains contained the statement that the victim “. . . was apparently shot as he was leaving a Kevin tavern.” The defendant contends that this statement, when taken in conjunction with the newspaper article, suggests that the victim was shot in cold blood.
A reading of the record indicates that Hurley was shot shortly after he left the tavern. Neither party disputes this fact. The radio report was simply a factual report of the homicide. When news accounts are not editorialized reports and they appear to be factually done and no inflammatory statements appear, there is no abuse of discretion in denying a defendant’s motion for change of venue. See State v. Bischert (1957), 131 Mont. 152, 156, 308 P.2d 969. Based on these news accounts there was no error in denying the motion.
The defendant also based his motion for change of venue on his assertion that the community in Toole County harbored a bias against him, making it impossible to receive a fair trial therein. The affidavits and testimony at the hearing on change of venue are largely contradictory opinions concerning whether defendant could have a fair trial in Toole County. The affidavits supporting a change of venue indicate threats against defendant’s brother, the caretaker of defendant’s property, and the justice of the peace who had a pending motion to admit defendant to bail. The threats were made anonymously by telephone calls, by patrons at bars, and in one instance, directly to the caretaker by a friend of the victim while in a bar. Certain members of the community testified that there had been a lot of talk in the county to the effect that defendant was guilty. The people who testified for the State on the venue motion said that most of the talk had died down shortly after the shooting, that the community was not biased against the defendant, and that he could receive a fair trial in Toole County.
As indicated by the quote from State v. Board, supra, our basic concern is to insure that the level of community bias did not reach a point where the defendant could not secure a fair trial. In analyzing the facts, we must consider all of the indications of prejudice, including the news releases mentioned above. In determining the level of community bias which will justify a change of venue, it is helpful to consider the cases of State v. Spotted Hawk (1899), 22 Mont. 33, 55 P. 1026, and State v. Dryman (1954), 127 Mont. 579, 269 P.2d 796.
In Spotted Hawk a sheepherder had been murdered, and the white citizens of the county suspected members of an Indian tribe who lived on a nearby reservation. The defendant moved for a change of venue based upon affidavits which showed the degree of community prejudice. Examples of this prejudice were: 200 armed men who gathered near the Cheyenne Indian Agency demanding the murderer and threating to exterminate the tribe if he was not handed over; an oath taken by a large number of men that they would take the law into their own hands if the murderer were acquitted and would take vengeance upon the court and counsel in case of acquittal; and newspaper reports made during a five-week period which tended to excite the readers by extravagant and inflammatory accounts of the murder and of the current trouble between whites and Indians. The District Court refused to grant a change of venue, and the defendant was convicted. This Court reversed because of the obvious bias in the community and made the following observation:
“. . . Jurors, witnesses, and officers cannot be insensible to a strong and excited public feeling and sentiment concerning the trial that is going on, and are liable to be influenced by it, unconsciously, and with an honest intention of doing their whole duty. The court room is a public place, and a trial, in which a community is deeply interested, brings the people there; and the pressure of their presence and feeling is a strong argument, and almost irresistible, one way or the other. The influence of their presence, and the expression of their interest in the event of the trial, in diverse ways, might give a false coloring to the testimony, or warp and bias the judgment in weighing and considering it’ (Kennon v. Gilmer, 5 Mont. [257,] at page 264, 5 P. [847,] 850.)” 22 Mont. at 56, 55 P. at 1032.
In Dryman, supra, the defendant had pleaded guilty to a homicide charge and then had asked to withdraw his plea. The trial court refused to allow the withdrawal, but this Court allowed him to withdraw the plea and ordered a new trial. The defendant then asked for a change of venue based in part upon a news article that had appeared in the county. This article had a picture of the defendant captioned “KILLER.” The article used phrases describing the defendant as a “cold blooded killer” and “. . . it appeared he was so steeped in criminal tendencies that nothing could appeal to his warped and stony mind.” The article described the homicide as “. . . the most dastardly deed in the history of Toole County ...” The District Court denied the motion for change of venue, and the defendant was convicted. This Court reversed, saying that the record revealed a “wide-spread and deep-seated opinion in Toole County . . . that defendant is guilty . . .” 127 Mont. at 590, 269 P.2d at 801.
The bias presented in the instant case does not reach the level of that presented in Spotted Hawk and Dryman. The affidavits lack any convincing quality that the feelings of the members of the community were aroused to the point where the defendant could not receive a fair trial. The examples of prejudice were obviously genuine, but most of it appears to be in the nature of isolated outbursts by people who were connected with the victim. The news articles in this case are not of the outrageous quality presented in Dryman, supra.
The evidence of prejudice presented by the defendant is inconclusive. In such circumstances, the trial judge’s discretion must be relied upon. In this case the judge took the change of venue motion under advisement until the voir dire examination of the jury. It was not until after voir dire that the motion was denied. From our review of the record we do not find county wide prejudice which would preclude a fair trial. In view of the conflicting testimony and affidavits and the District Court’s opportunity to personally observe the voir dire examination of the prospective jurors, we find that there was no abuse of discretion in denying the change of venue motion.
Defendant next contends the trial court erred in denying his challenge to the jury panel as a whole and to juror Pettigrew specifically. This Court has held that the right to trial by an impartial jury is an unqualified one. State v. Brooks (1920), 57 Mont. 480, 487, 188 P. 942.
In the present case approximately sixty prospective jurors were examined before twenty-eight positions were filled from which the final twelve trial jurors were selected. Twenty-nine prospective jurors were excused for cause. The State and defendant each used nine peremptory challenges. Defendant alleges that these large numbers indicate the difficulty of securing an impartial jury. The pertinent inquiry is, however, whether the jury as empaneled were able to render an impartial judgment based solely upon the evidence presented at trial.
Defendant’s arguments concerning the bias and partiality of the jury amount in large part to speculation as to the hidden pressures and prejudices of the jury members. Defendant alleges that certain jurors were closely connected with law enforcement personnel or had some connection with the victim. The State correctly points out that the trial judge allowed both parties wide latitude in examination of the jurors and permitted individual questioning of each prospective juror in chambers. All of the jurors who finally sat at the trial stated under oath either that they would judge defendant solely on the evidence presented and that they could put aside any opinions they might have formed, or that they had no opinions in the case, or that they understood a person is presumed innocent until proven guilty.
“In the examination of a juror to determine his competency the trial court is in a peculiarly advantageous position from observing his demeanor, his expression and his manner in answering questions.” State v. Simpson (1939), 109 Mont. 198, 207, 95 P.2d 761, 764.
In State v. Borchert (1970), 156 Mont. 315, 320, 479 P.2d 454, 457, this Court stated that a trial judge’s decision as to the impartiality of a jury should not be set aside unless there is a clear abuse of discretion. In speaking of the level of juror prejudice which would mandate the disqualification of a juror, this Court said:
“It is only where they form fixed opinions of the guilt or innocence of the defendant which they would not be able to lay aside and render a verdict based solely on the evidence presented in court that they become disqualified as jurors.” Great Falls Tribune v. District Court (1980), 186 Mont. 433, 608 P.2d 116, 120.
As noted above, each juror gave an assurance of impartiality. In addition, the trial judge made cautionary remarks to the jury that they had a duty to lay aside their opinion and impressions. Under these circumstanses the trial judge did not abuse his discretion by denying defendant’s challenge to the jury panel.
The defendant assigns as error the District Court’s denial of the challenge for cause of juror Pettigrew. Mrs. Pettigrew was the dancing instructor of Donna Hurley, the daughter of the victim. Donna testified at trial. During voir dire examination Mrs. Pettigrew testified as follows while being questioned by defense counsel:
“Q. Do you think you could be a fair and impartial juror in this case? A. Well, no, I really don’t think I can.”
“Q. You can’t give your positive assurance that you could give Mr. Bashor a fair trial? A. There’s a question about it, so I guess my answer is no.”
“Q. Your can’t give us your positive assurance? A. No.”
The court then conducted the following inquiry:
“Q. You said previously to Mr. Conner that you didn’t think you could be a fair juror. Explain what you mean or what your thoughts are on that, and just why you think this. A. Okay. Mr. Kalbfleisch, when he asked me, was asking if I could do this on the facts, you know, of the case, and I really think I can. The other lawyer was questioning on my emotions, and those are two different things.”
“Q. Undoubtedly you will be instructed that if you were to serve as a juror in this case the case must be decided upon the evidence presented in the courtroom — A. Yes.”
“Q. — and that you are not to decide this case on sympathy, conjecture, or any other thing. Now would you be able to follow an instruction of that nature? A. Yes, I really think I could because even though I would feel sympathy or emotion my conscience would not let me. I would still have to be fair when it came to choosing.
“Q. You think you could be a fair juror? A. Yes, I think I could.”
“Q. I gather what you are saying is that you are a compassionate person, but a fair person also? A. Yes.”
This Court has previously considered a similar problem. In State v. Juhrey (1921), 61 Mont. 413, 202 P. 762, a proposed juror had stated that he had already formed an opinion about the case based on a newspaper article. He also stated, however, that he would base his opinion as to defendant’s guilt upon the evidence presented at the trial. This Court noted that during voir dire this juror had “. . . made statements which, if standing alone, would indicate a fixed opinion amounting to prejudice.” The Court went on to say:
“. . . where the evidence relating to the qualifications of a juror is in conflict, it is the function of the trial court to pass upon that evidence and determine the qualifications of a juror is in conflict, it is the function of the trial court to pass upon that evidence and determine the qualification of the juror, and this determination of the trial court is final, unless it appears from the record that there has been some abuse of discretion.” 61 Mont. at 421, 202 P. at 763-64.
In the instant case the juror gave answers to defense counsel which, if standing alone, would indicate that she could not give a fair opinion in the case. When questioned by the judge, however, Mrs. Pettigrew, made it clear that she could put her emotions aside and judge the defendant fairly and solely upon the evidence presented at trial. As in Juhrey, the District Court did not abuse its discretion in refusing the challenge for cause.
Prior to defendant’s trial, the State made a motion in limine to prevent the introduction of expert testimony regarding the results of a polygraph examination taken by William Schaeffer. The motion was granted. Defendant attacks the ruling on three grounds:
(1) The trial court erred in refusing to hear defendant’s offer of proof on the polygraph; (2) the trial court erred in ruling that the proposed testimony was inadmissible as a matter of law; and (3) the trial court erred in refusing admission of the particular polygraph-related testimony offered by defendant. These three grounds will be disposed of in the following discussion.
The questions and answers during the polygraph examination were:
“Question No. 1: Is your last name Schaeffer?
“Answer: Yes.
“Question No. 2: Was Ozzie [defendant] looking for Jim on that night?
“Answer: No.
“Question No. 3: Are you now in Great Falls?
“Answer: Yes.
“Question No. 4: Did you see the gun at any time?
“Answer: No.
“Question No. 5: Is your hair brown?
“Answer: Yes.
“Question No. 6: Did you know if Ozzie ever got out of his vehicle at any time?
“Answer: No.
“Question No. 7: Are your eyes hazel?
“Answer: Yes.
“Question No. 8: Did you see Ozzie fire the gun?
“Answer: No.
“Question No. 9: Regarding this case are you telling me the complete truth?
“Answer: Yes.
“Question No. 10: Did Jim start the altercation?
“Answer: Yes.
“Question No. 11: Are you 37 years old?
“Answer: Yes.
“Question No. 12: Other than what you said did Ozzie say anything about the shooting?
“Answer: No.
“Question No. 13: Are you covering up for Ozzie in any way?
“Answer: No.”
These answers corroborate the story which defendant gave to the law enforcement authorities. This testimony could conceivably have helped defendant by showing Hurley as the aggressor and the defendant as a victim, thereby lending credence to the self-defense theory.
The trial judge ruled that as a matter of law the testimony of the polygraph examiner was inadmissible. If this ruling was correct, it was not error for the District Court to refuse to consider defendant’s offer of proof or for it to refuse to admit into evidence this particular area of testimony and evidence.
In State v. Hollywood (1960), 138 Mont. 561, 358 P.2d 437, the defendant had attempted to introduce polygraph tests in District Court by laying a foundation as to the accuracy of the tests and the qualifications of the examiner. The District Court refused to admit the evidence, and this Court affirmed that ruling. This Court’s decision was based, in part, on the lack of reliability inherent in polygraph tests. The decision, however, was also partially based on the fact that the machine cannot be cross-examined and that the polygraph examination had taken place approximately five and one-half months after the crime was committed. In State v. Campbell (1978), 176 Mont. 525, 579 P.2d 1231, 35 St.Rep. 733, 737, this Court stated:
“The Montana rule is that the results of polygraph examinations are not admissible as evidence in a criminal trial. State v. Hollywood [citation]: State v. Cor (1964), 144 Mont. 323, 396 P.2d 86.”
In the present case the defendant argues that Hollywood and Campbell are based upon the lack of reliability of polygraph tests at the time those decisions were written. The time has now come, defendant asserts, when the courts must recognize that polygraph examinations have reached the level of accuracy where they should be admitted as evidence.
In defense of this assertion, defendant has presented several scholarly articles on the subject. The most persuasive of these authorities is a 1977 treatise entitled “Truth and Deception 2nd Edition” (Williams and Wilkins Company, 1977). In this treatise the authors reverse their long-standing opposition to the introduction of polygraph results into evidence and State that such evidence should now be allowed subject to certain conditions. For a full discussion of the scientific respectability of polygraph results, see State v. Stanislawski (1974), 62 Wis.2d 730, 216 N.W.2d 8.
As noted in the Stanislawski case, several jurisdictions have allowed polygraph results into evidence under varying circumstances. Two cases are representative of the circumstances under which courts have allowed this type of evidence. In United States v. Ridling (D.C.Mich. 1972), 350 F.Supp. 90, which involved a perjury charge, the court said, “. . . polygraph evidence would be valuable aid in connection with determining the kinds of issues involved in this case . . .”, i. e., was the defendant telling the truth when he made the statements that were alleged to be the basis of the perjury charge? “A perjury case is based on ‘willfully’ or ‘knowingly’ giving false evidence. The experts all agree that the polygraph examination is aimed exactly at this aspect of truth.” 350 F.Supp. at 93. As a result, the court allowed polygraph evidence to be introduced into evidence. In State v. Dorsey (Ct.App.1975), 87 N.M. 323, 532 P.2d 912, aff’d, State v. Dorsey (1975), 88 N.M. 184, 539 P.2d 204, the trial court had refused to allow into evidence the results of the defendant’s polygraph examination. The results tended to bolster the defendant’s story that the victim had provoked the fight and that the defendant had killed the victim in self-defense. The New Mexico Court of Appeals reversed, saying that the results were admissible under a due process rationale. The court in Dorsey said that the examination results were admissible because they were reliable and critical to the defendant’s case. “The defense case came down to the credibility of defendant.” The Dorsey decision was followed in State v. Shaw (Ct.App.1977), 90 N.M. 540, 565 P.2d 1057.
In the present case the District Court refused the polygraph evidence as a matter of law. Apparently the judge had the mistaken belief that the examination was of the defendant rather than of the witness Schaeffer. Regardless of this mistake, however, we decline to overrule Hollywood and Campbell. We also decline to follow the rationale expressed by the New Mexico court in Dorsey.
We believe that the better rationale is expressed in United States v. Alexander (8th Cir. 1975), 526 F.2d 161. Alexander contains an in depth discussion of the science of polygraph and why the results should not be allowed into evidence, viz., the scientific unreliability of the process. The Eighth Circuit Court, however, went on to point out an even larger problem in allowing such evidence before the jury. It said:
“. . . in many cases where polygraph evidence is admitted, a single person, the polygraphist, will give testimony which will often be the determinative factor as to the guilt or innocence of a defendant in a jury-tried case. This would deprive the defendant of the common sense and collective judgment of his peers, derived after weighing facts and considering the credibility of witnesses, which has been the hallmark of the jury tradition.” 526 F.2d at 168.
The court noted that other forms of scientific evidence may be allowed into evidence under Federal Evidence Rule 702 which is identical to Rule 702, Mont.R.Evid. Both rules state:
“If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in isue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise.”
The court in Alexander noted, however, that there is a profound difference between polygraph results and most other types of scien tifie evidence which are admissible, such as fingerprint comparisons or handwriting analysis. These types of scientific evidence are
“. . . elicited solely for the purpose of identifying either an individual or an object allegedly involved in the perpetration of a criminal act. There scientific tests do not purport to indicate with any degree of conclusiveness that the defendant who is so identified or connected with the object actually committed the crime. The jury, after receiving such expert testimony, has the additional responsibility of reviewing other facts which tend to prove or disprove defendant’s connection with the crime and, if participation is shown, the jury may further be required to ascertain the defendant’s mental state at the time of the crime in appropriate cases.
“The role of the jury after a polygraphist has testified that the results of a polygraph examination show that the defendant’s denial of participation in the crime was fabricated is much more circumscribed. If the expert testimony is believed by the jury, a guilty verdict is usually mandated. The polygraphist’s testimony often is not limited to mere identification or any other limited aspect of defendant’s possible participation in the criminal act. Through the testimony of the polygraph expert relating to whether the defendant was being truthful in his responses concerning participation in the crime, the expert is thus proffering his opinion based on scientific evidence bearing upon the issue reserved for the jury — Is the defendant innocent or guilty?” 526 F.2d at 169.
The same rationale applies to Schaeffer’s polygraph results. Rule 702 allows expert opinion to be introduced at trial if specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue. Defendant contends that Schaeffer’s polygraph results will help establish a defense of self-defense. We disagree.
The only thing that Schaeffer’s polygraph results can accomplish in this regard is to establish Schaeffer’s understanding of the defendant’s motives. This is not a fact in issue in this case. Schaeffer’s credibility in understanding the defendant’s motive is not the type of evidence which needs to be explained by an expert witness.
The only facts in issue here were defendant’s acts and intentions on the night Hurley was killed. The opinion of the polygraph operator does not fall within the scope of Rule 702 because this expert would not be assisting the jury to understand a fact in issue. Schaeffer was allowed to testify fully at trial to every item that he testified to during the polygraph examination. The jury was able to determine for themselves whether this testimony was credible. The polygraph expert in this case would be directly invading the province of the jury if he had been allowed to offer his opinion as to whether Schaeffer had been telling the truth. Schaeffer’s credibility was not a fact in issue. It is distinctly the jury’s province to determine when a witness is being truthful or untruthful. For these reasons it was not error for the District Court to grant the States motion and rule as a matter of law that the evidence was inadmissible.
Defendant next argues that his conviction must be reversed because of certain statements that the special prosecutor made in his closing argument to the jury. The gist of these statements was to discredit defendant’s claims that he acted in self-defense and that Hurley was the aggressor. The language used by the special prosecutor in the closing argument was as follows:
“Bill Schaeffer thought they were just going there to beat him up a little. And you can tell by the way he sat on the stand and testified that it wouldn’t take him long to completely annihilate more than two or three people. So he knew they were going over there for a fight. That’s why he came into town. But he didn’t know the defendant was going to shoot Hurley. He never had any idea about that. But he was out in front of the Blazer, and he was jumping and hollering around like a wild maniac with his Kung Fu. While he was out there the dome light of the Blazer came on. (Counsel taking exhibit gun in hand.) The defendant reaches down into the console, withdraws his weapon out of the holster — because this is the time — this is the time he has finally chosen after all of these months of trailing, surveilling, calling — this is the time. And he cocks it, (Counsel cocking gun) and he looks in there to make sure there’s a shell. That’s why the dome light is on. That’s why Bill Schaeffer never saw the gun. And he shoots. (Counsel pulling trigger). He shot James Hurley before Hurley ever got a chance to grab him.”
Defendant notes that these statements are contrary to Schaeffer’s answers during the polygraph examination. Because the State was aware of the polygraph results, defendant argues, the State should not be allowed to present a version of the facts that is contrary to those results. In other words, the prosecution should not take unfair advantage of the District Court’s exclusionary rulings.
Section 46-16-401(6), MCA, allows an attorney to comment upon the evidence of the case. An attorney may argue and draw reasonable inferences from evidence so long as there are facts to support such statements. State v. Moore (1975), 112 Ariz. 271, 540 P.2d 1252, 1256. The State, in the present case, presented evidence to support the prosecution’s version of the homicide. There was evidence that defendant knew Hurley was in the bar, that defendant and Schaeffer attracted Hurley’s attention outside of the bar, that Schaeffer had been standing outside defendant’s vehicle prior to the time Hurley approached defendant, and of the defendant’s prior relationship with Marian Irgens and Hurley. Given this evidence, the closing remarks did not exceed the bounds of comment and reasonable inference which may be made upon the evidence by an attorney.
Once again we note that the defense was allowed to put on their evidence. In particular Schaeffer was allowed to testify at trial as to every fact which was asked about during the polygraph examination. Defense counsel was allowed to comment on this evidence and put forward, to the jury, defendant’s version of the circumstances surrounding Hurley’s death. The State did not violate any constitutional or statutory provisions by making the closing argument quoted above.
Defendant next contends that the trial court erred in admitting into evidence acts and statements of the defendant which occurred prior to the shooting. This evidence, which was introduced by the State, was to the effect that defendant and Marian Irgens had had a romantic relationship and that this relationship had subsequently deteriorated. This resulted, according to the State’s testimony, in ill-feelings on the defendant’s part toward Marian Irgens and James Hurley, when these two began seeing each other socially. This testimony indicated that defendant was keeping Marian Irgens and Hurley under surveillance, that defendant made phone calls to Irgens and to the Hurley household, and that defendant made threatening statements to and about Irgens.
Defendant made a motion in limine to exclude any threats that related to persons other than James Hurley. The trial judge ruled that the threats made directly to Marian Irgens were not to be mentioned but that statements made about her to other people were admissible.
Defendant points to three instances of testimony in this regard. (1) Marian Irgens was allowed to testify as follows:
“Q. The defendant said to you, ‘When you have a problem you eliminate it?’ A. Right.
“Q. And you felt that you were his problem? A. I felt that, yes, at the time.”
(2) Irgens was allowed to testify that “He [the defendant] said he was going to ruin my name in Toole County ...” This testimony was admitted in evidence despite the fact that the trial judge had specifically ruled that Marian Irgens could not testify as to this fact.
(3) Deidra Merritt was called to the stand and testified that the following conversation took place on August 20, 1977:
“Q.... Who came in? A. Ozzie Bashor. He came in and sat down next to me and bought a drink. . . . Then he proceeded to say, ‘You know, I caught Marian and Jim Hurley in bed last night at five o’clock in the morning.’ Then he said, ‘She’s too goddam old a girl to be screwing around until five o’clock in the morning with some young guy like Jim.’ I said, ‘Well, under the circumstances, you and Marian aren’t married and so you have no control of the sitúa tion and she can do anything she pleases.’ He said, ‘Well, she’s nothing but a goddam whore. I’m going to make her pay for this.’ I said, ‘How are you going to do that?’ and he said, T don’t know, but I’m going to make her pay, and I’m going to hurt her as bad as she’s hurt me, and she’s nothing but a fucking whore.’ . .”
Rule 402, Mont.R.Evid., states in part that relevant evidence is admissible, while irrelevant evidence is not. Rule 401, Mont.R.Evid., defines relevant evidence as “. . . evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” In the instant case the State had to prove that defendant purposely or knowingly caused the death of James Hurley. Section 45-5-102(l)(a), MCA. Consequently, evidence of the defendant’s intent in this case is relevant.
In State v. Fine (1931), 90 Mont. 311, 2 P.2d 1016, this Court said:
“The jury was entitled to know the relations of the parties, — to be given information of the conditions which led up to the homicide. The defendant alleged that he shot in self-defense. It was permissible for the state to show, if it could, that he had another motive than self-protection. ... It is familiar law that the emotion of jealousy may lead to a desire to kill. . . . The motive to kill may spring as certainly from a fixed intention to possess the object of one’s affections, as from the fear of loss of that already possessed.” 90 Mont, at 314, 2 P.2d at 1017.
Similarly, in the instant case the defendant alleged that he shot in self-defense. The relationship between the defendant and Marian Irgens was relevant to show intent. Consequently, it was admissible.
Defendant further argues that the threats made against Marian Irgens were irrelevant because they were not directed at Hurley, the victim. As a general rule, threats against persons other than the victim are not admissible. “However, where the circumstances are such that the threat, although made to a third per son, tends to show the hostility toward the deceased, it is relevant. Thus, it may be shown that the accused made a threat to a woman with whom both the accused and the deceased were intimate. . . .” 1 Wharton’s Criminal Evidence § 204 (13th Ed. 1972).
“Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive . . . [or] intent. . . .’’Rule 404(b), Mont.R.Evid.
In State v. Eaton (Me. 1973), 309 A.2d 334, the Maine court said:
“Previous threats made and assaults committed by the defendant are admissible in evidence where there is a close logical connection with the crime charged in the indictment such as shedding light upon the motive or intent of the defendant or where such evidence forms part of a single chain of facts so intimately connected that the whole must be considered in order to interpret its several parts.” 309 A.2d at 338-39.
The same observations apply in the present case. The threats made to Marian Irgens indicate that defendant was very upset about the relationship between Hurley and Irgens. This bears on defendant’s intent or motive for the shooting. As such, it is relevant and admissible.
Defendant contends that even if this evidence was relevant, it should have been excluded because its probative value was substantially outweighed by the danger of unfair prejudice. Rule 403, Mont.R.Evid. We disagree.
The State was required to prove intent. It was important, therefore, to show that defendant had harbored strong feelings of resentment against Marian Irgens and Hurley and that this feeling manifested itself in a pattern of harassment, threatening statements and belligerent actions. This showing was especially necessary to counter defendant’s contention that he was the victim of an unprovoked attack. Thus, the challenged testimony was crucial to prove defendant’s mental state at the time of the shooting, and as a result, the probative value outweighed its prejudicial effect.
Defendant next contends that the trial court failed to fairly and fully instruct the jury on the law of self-defense. Under this specification of error defendant directs our attention to several of his proposed instructions which the trial court refused to give. Defendant also directs our attention to several of the State’s proposed instructions concerning the law of self-defense which the trial court did give to the jury. These will be considered separately.
Defendant’s Proposed Instruction No. 15 states:
“You are instructed that ‘serious bodily injury’ means bodily injury which creates a substantial risk of death or which causes serious permanent disfigurement or protracted loss or impairment of the fuction or process of any bodily member or organ.”
This proposed instruction is taken from section 45-2-101(53), MCA. The State objected to this instruction as follows:
“We object to Defendant’s Proposed No. 15. This is not a proper instruction for a self-defense case. It is not applicable to the definition of serious bodily injury. It is meant for the statute on aggravated assault. The entire definitions in the justifiable use of force section of the code and all through the comment refer to serious bodily harm and not serious bodily injury or death and serious bodily harm. This isn’t a proper instruction.”
The trial court refused the instruction.
The jury was given an instruction which was virtually identical to Montana’s statute on self-defense. Section 45-3-102, MCA. This statute says, in part, that a person may use deadly force to protect himself to prevent “. . . serious bodily harm to himself . . .” The term “serious bodily harm” is not defined in Montana’s Criminal Code.
During trial the defense introduced testimony which showed that the defendant had had a recent eye operation and that a blow to the head could cause the loss of vision in that eye. According to defendant, the refusal to give the definition of “serious bodily injury” as an instruction denied him the ability to fully present his self-defense theory to the jury.
In State v. Freeman (1979), 183 Mont. 334, 599 P.2d 368, the defendant had pleaded self-defense and the trial court gave both the statutory definition of self-defense and “serious bodily injury.” This Court held that the jury had been adequately instructed on this point. This Court, however, did not hold in Freeman that the “serious bodily injury” definition had to be given to the jury. Rather, the test is whether “. . . the instructions given on justifiable force gave the defendant ample opportunity to expound to the jury in argument his theory with respect to the use of force as self-defense against an unlawful act.” Freeman, 599 P.2d at 373, 36 St.Rep. at 1628.
In the present case defendant was able to present his evidence to the jury concerning the condition of his eye. He was permitted to argue that Hurley’s actions threatened serious bodily harm. The jury was free to consider whether the fear of the loss of an eye could be considered as serious bodily harm. In short, defendant had ample opportunity to present to the jury his theory of self-defense. The refusal by the trial court to give proposed Instruction No. 15 did not prevent defendant from fully presenting his case. Consequently, this refusal did not constitute error.
After the trial court refused the Proposed Instruction No. 15, defendant offered Proposed Instruction No. 15-A, which substituted the word “harm” for “injury” in Proposed Instruction No. 15. The State objected to this instruction, as follows:
“No. We would have the same objection, Your Honor. The entire code is phrased in terms of serious bodily harm, and the comments very clearly say specifically whether or not something is serious bodily harm is a question for the jury, and this would be a comment on the evidence by defining what is or is not serious bodily harm.”
The instruction was correctly refused by the trial court. “Serious bodily harm” is not defined by statute and does not necessarily equate with the statutory definition of “serious bodily injury.” There is no indication that the legislature intended to integrate the definition of “serious bodily injury” into the self-defense statute. “We must presume the legislature knew what it was doing and was cognizant of the statutes of Montana as then enacted.” Dept. of Revenue v. B. N. Inc. (1976), 169 Mont. 202, 211, 545 P.2d 1083, 1088. As a result, it was not error to refuse defendant’s Proposed Instruction No. 15-A.
Defendant asserts that the trial court committed reversible error by refusing to give defendant’s Proposed Instruction No. 17, which read:
“You are instructed that ‘forcible felony’ means any felony which involves the use or threat of physical force or violence against any individual.”
This proposed instruction was taken from section 45-2-101(16), MCA. The State objected to this instruction stating, “We will object to No. 17 because there is no evidence in this case of a felony of any kind, much less a forcible felony.”
As noted above, the jury was given an instruction on self-defense which was taken from section 45-3-102, MCA. The statute and the instruction use the term “forcible felony.”
In Freeman, supra, the definition of “forcible felony” was given, but, once again, this Court did not hold that a District Court must give a definition of every term included in an applicable statute. By necessity, each case must be considered on its own facts as to whether the jury has been adequately instructed on every theory having support in the evidence presented. When the definition of “forcible felony” is considered it is apparent that the trial court did not err in not including it in the instructions. The definition adds nothing to the term being defined. The lack of this instruction could not prevent the defendant from fully presenting his case to the jury
Defendant claims error in refusing to give defendant’s Proposed Instruction Nos. 16 and 18. Defendant’s Proposed Instruction No. 16 read:
“You are instructed that ‘occupied structure’ means any building, vehicle, or other place suited for human occupancy or night lodging of persons or for carrying on business whether or not a person is actually present. Each unit of a building consisting of two or more units separately secured or occupied is a separate occupied structure.”
This proposed instruction was taken from section 45-2-101(34), MCA. Defendant’s Proposed Instruction No. 18 basically consisted of the statutory explanation of the law of defense of an occupied structure. Section 45-3-103, MCA.
The trial court was correct in refusing these instructions. Defendant argues that it was error to refuse such instructions because the definition of “occupied structure” includes the word “vehicle.” Defendant was sitting in a Chevrolet Blazer when he shot Hurley. There is no evidence presented that the vehicle was equipped for human occupancy or night lodging.
From a reading of the definition of “occupied structure” it is clear that a vehicle, such as defendant’s, is not intended. The structure must be “suitable for human occupancy or night lodging of persons or for carrying on business . . .” A defendant is entitled to an instruction having support in the evidence presented. State v. Quinlan (1929), 84 Mont. 364, 372, 275 P.750, 753. He is not entitled to an instruction having no support in the evidence.
Defendant next contends that the trial court erred in giving several instructions which defined self-defense. The instructions involved are Nos. 24, 26 and 28. Defendant argues that these instructions do not clearly express the proposition that a person has the right to defend himself against what he reasonably believes to be a threat of death or serious bodily harm even though the danger is not real. Section 45-3-102, MCA, uses the term “reasonably believes.”
The court’s Instruction No. 24 reads:
“You are instructed that before the defendant can avail himself of the right of self-defense, it must appear to him, acting as a reasonable person, that at the time of the killing the danger was apparently so urgent and pressing that in order to save his own life, or to prevent his receiving serious bodily harm, the killing was absolutely necessary.”
The court’s Instruction No. 28 reads:
“In order to justify the use of force likely to cause death or serious bodily harm (often called deadly force), it must appear to the Defendant that the danger was so urgent that, in order to save his own life, or to save himself from serious bodily harm, the use of such deadly force was absolutely necessary. And it must further appear that the deceased was the assailant. A bare fear of the commission of the offense, to prevent which the Defendant used a deadly weapon, is not sufficient to justify it; but the circumstances must be sufficient to excite the fears of a reasonable man, and the Defendant must have acted under the influence of such fears alone. It is not necessary, however, to justify the use of a deadly weapon that the danger be actual. It is enough to be in apparent danger; such an appearance as would induce a reasonable person to believe he was in danger of serious bodily harm. Upon such appearance a party may act with safety, nor will he be held accountable though it would afterward appear that the indications upon which he acted were wholly fallacious, and that he was in no actual peril. The rule in such case is this:
“What would a reasonable person — a person of ordinary caution, judgment and observation — in the position of the Defendant, seeing what he saw, knowing what he knew, suppose from this situation and these surroundings? If such reasonable person so placed would have been justified in believing himself in imminent danger, then the Defendant would be justified in believing himself in such peril and acting upon such appearances.”
Defendant’s objection to both of these instructions was to the effect that they were incorrect statements of the law. A review of these two instructions indicates that it was made absolutely clear to the jury that the danger need not be actual, it need only be what a reasonable person would perceive as being a threat to the person’s life or a threat of serious bodily harm. The instructions were correctly given.
Instruction No. 26, which was given to the jury, reads: “You are instructed that if you believe from the evidence that the defendant killed the deceased in necessary self-defense as explained and defined in these instructions, you must acquit the defendant.”
Conceivably, the words “necesssary self-defense” could be an incorrect statement of the law. However, in this case the instruction contains the proviso “as explained and defined in these instructions.” As noted above, self-defense was correctly explained and defined in the other instructions; therefore, in this context, there was no error committed by giving Instruction Nos. 24, 26, and 28.
Next, defendant contends that it was error to give Instruction No. 27, which stated:
“You are instructed that an aggressor is one who provokes an attack upon himself, brings on or encourages a difficulty or quarrel. An aggressor cannot assert that he acted in self-defense.”
Defendant contended at trial and contends on appeal that there was no evidence presented in support of this instruction and that the law as given was an incorrect statement of the law.
The trial judge must instruct the jury on every essential question presented by the evidence. State v. Quinlan, supra, 84 Mont. at 372, 275 P. at 753. In the present case there was some evidence to support the instruction given which defined “aggressor.” There was testimony that defendant had left the headlights on as he sat in his vehicle in the parking lot, thereby attracting Hurley’s attention. There was testimony that Schaeffer was outside defendant’s vehicle hollering at Hurley and his companions. There was also the testimony, discussed above, as to defendant’s prior acts of hostility towards Hurley and Marian Irgens. Given this testimony, there was sufficient evidence to justify the aggressor instruction.
Defendant also contends that this instruction was an incorrect statement of the law. He bases this contention upon the fact that there are some exceptions to the aggressor limitation. Section 45-3-105, MCA, states thast an aggressor may use the theory of self-defense if (1) he has exhausted every reasonable means of escape, or (2) if he withdraws from physical contact with the assailant and clearly indicates that he desires to terminate the use of force. These exceptions are inapplicable under the evidence in this case.
In addition, the State offered an instruction which incorporated the statutory language of section 45-3-105, MCA. The defense objected to this instruction on the ground that there was no evidence that defendant provoked an attack. The State then withdrew the instruction. Defendant did not offer an instruction which dealt with the same subject. He now contends such an instruction should have been given. In State v. Romero (1965), 146 Mont. 77, 83, 404 P.2d 500, 503, this Court considered a similar situation and said:
“Had the defendant felt the court improperly instructed the jury on all aspects of the case, it was his duty to submit instructions which more fully covered the particular matter which he was dissatisfied with, and in failing to do so he cannot now allege prejudicial error.”
Having objected to the very instruction he now asserts should have been included, defendant may not now predicate error on the absence of the qualifying instruction.
Defendant contends that the trial court erred in failing to instruct the jury on mitigated deliberate homicide and negligent homicide. This Court has recently stated the general rule that “an instruction is required where there is some evidence to support the lesser [included] offense.” State v. Hamilton (1980), 185 Mont. 522, 605 P.2d 1121, 1129. This Court also said in Hamilton that negligent homicide (section 45-5-104, MCA) was to be considered a lesser included offense of deliberate homicide (section 45-5-102, MCA), because the two crimes consist of the same elements, the only difference being the presence of “extreme mental or emotional stress” in the lesser crime.
We need not, in this case, determine whether there is evidence to support the lesser included offense. The State offered an instruction on mitigated deliberate homicide. Defense counsel objected to this instruction “for the reason that the evidence shows the defendant was either guilty of deliberate homicide or not guilty.” The instruction was then withdrawn.
This Court has held that error may not be predicated upon the failure to give an instruction when the instruction was not offered. State v. Harvey (1979), 184 Mont. 423, 603 P.2d 661. Failure to offer an instruction removes the cause of error, particularly when the defense counsel has objected to the instruction upon the ground that the defendant was either guilty of deliberate homicide or not guilty.
Affirmed.
MR. JUSTICES DALY and HARRISON concur.
MR. JUSTICES SHEA and SHEEHY dissent and will file a written dissent later. | [
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MR. CHIEF JUSTICE HASWELL,
delivered the opinion of the court.
Appellant Szczepan Korol sought the return of his son to his custody through a petition for habeas corpus. The Cascade County District Court denied his petition and he appeals.
Szczepan and Gwen Korol, the natural parents, obtained a divorce in Cascade County in October, 1976. Mr. Korol was awarded the custody of their child, Stephen, who was born in May, 1977. In March, 1978, Gwen Korol and her mother, Verna Locke, went to Pennsylvania and brought the child back to Great Falls. There is conflicting testimony as to whether the parties had agreed to transfer custody or whether a mere visit was intended. Gwen Korol gave Mr. Korol a stipulation to modify the custody provisions of the divorce decree, but he did not sign it at that time and has not signed it to this date.
It appears that the child resided with Gwen Korol for a short period of time and when she became ill and lost her job in April 1978, Richard and Verna Locke, Gwen’s parents, took physical custody. Szczepan Korol requested the return of Stephen after learning in early September, 1978, that the child was in the physical custody of the grandparents.
On September 22, 1978, the Lockes petitioned the District Court for custody of the child. The District Court awarded temporary custody to the Lockes and issued a temporary restraining order which restrained Szczepan Korol from removing the child or disturbing the Lockes. On October 24, 1978, Mr. Korol filed a motion to quash the temporary restraining order and petitioned for a writ of habeas corpus. A hearing was held upon the petition on November 14, 1978. The temporary custody order was dismissed because of the grandparents’ failure to comply with the affidavit practice provisions of section 48-340, R.C.M. 1947, now codified in amended form in section 40-4-220, MCA. The only issue presented with regard to the habeas corpus petition was who was entitled to custody of Stephen as between the natural father Szczepan Korol and the maternal grandparents.
Following the hearing, the District Court issued an order on November 15, 1978, which quashed the temporary restraining order, but the grandparents were once again given temporary custody of Stephen. The petition for habeas corpus relief was taken under advisement. On July 9, 1979, the District Court entered an order which found: that a habeas corpus proceeding is appropriate to determine whether custody of a minor should be changed; that the father agreed to surrender custody of the child to the mother in March, 1978; that the father agreed to a modification to change the custody from the custodian to the non-custodian, the mother; that the minor child’s present environment will better serve his welfare and best interest; that the custody of the minor child should be “assigned” to the mother until further order; and that the father is financially able to contribute $100 per month in support until the child reaches majority. The petition for habeas corpus was dismissed and custody assigned to the mother.
The following issues have been considered on appeal:
(1) Whether the denial of the natural father’s petition for habeas corpus is appealable; and
(2) Whether the District Court abused its discretion in awarding custody to the natural mother, a nonpetitioning party.
The respondent strenuously contends that the District Court’s order denying a writ of habeas corpus is not appealable. The basis of this contention is that the court merely awarded temporary relief and that another remedy exists since the grandparents’ petition for modification is still pending. Respondent also analogizes the present situation to the seeking of a writ of habeas corpus in a criminal case in stating that the sole issue is the legality of restraint, and it is therefor not appealable.
In reviewing the District Court’s findings and conclusions we find that the court purported to make a final determination of custody. In addition, no petition is pending as a result of section 48-339, R.C.M. 1947. Although this section was amended by the 1979 legislature it was in effect in the following form throughout the District Court proceedings.
“(1) No motion to modify a custody decree may be made earlier than two (2) years after its date, unless the court permits it to be made on the basis of affidavits that there is reason to believe the child’s present environment may endanger seriously his physical, mental, moral, or emotional health.” (Emphasis added.)
This provision is jurisdictional and requires the District Court to find that the child is seriously endangered if a motion for a change of custody is brought within two years of entry of a divorce decree. Strouf v. Strouf (1978), 176 Mont. 406, 578 P.2d 746; Olson v. Olson (1978), 175 Mont. 444, 574 P.2d 1004; Schiele v. Sager (1977), 174 Mont. 533, 571 P.2d 1142; Gianotti v. Mc-Cracken (1977), 174 Mont. 209, 569 P.2d 929. Olson also reveals that the exception to the two-year limitations is not to be liberally applied.
In our present case the motion to modify custody was brought within the two-year limitation, and the District Court failed to find that the child’s health was seriously endangered. Neither does the record reveal any evidence that the child would be endangered in the custody of his father. As a result, there is no jurisdictional basis for the District Court to consider the grandparents’ petition for a change of custody.
Since the District Court’s order is expressed in terms of a final determination of child custody, this Court is entitled to review the District Court’s denial of the father’s petition. In addition, a distinction exists concerning appealability between who is entitled to custody in a habeas corpus proceeding and the typical criminal habeas corpus issue of whether the restraint exercised is legal. See State ex rel. Graveley v. District Court (1978), 178 Mont. 1, 582 P.2d 775.
Turning to the standard of review from habeas corpus, we have held on numerous occasions that the District Court is given wide discretion in habeas corpus proceedings and we will not interfere unless there is a clear abuse of discretion. In re Thompson (1926), 77 Mont. 466, 251 P. 163; Veach v. Veach (1948), 122 Mont. 47, 195 P.2d 697. In the present case we find a clear abuse of discretion.
The sole issue before the District Court was who was entitled to custody as between the natural father and the child’s maternal grandparents. This was the issue expressly presented to the court by the parties. The court refused to hear any testimony concerning the best interest of the child. However in its order the District Court, without any evidence before it on the subject, purported to consider the best interests of the child and gave custody to the mother, who had never sought custody. This constitutes an abuse of discretion. The District Court is without authority to award custody to a nonpetitioning party under ordinary circumstances.
As between the natural father and the grandparents, the natural father was entitled to prevail on the basis of his superior rights as a parent as well as his custodial rights under the divorce decree. Absent a finding of abuse, neglect, or unfitness as a parent, a natural parent is entitled to the custody of his child. In the Matter of Doney (1977), 174 Mont. 282, 570 P.2d 575. In addition, the custody provisions of the Uniform Marriage and Divorce Act, sections 40-4-211 through 40-4-221, MCA, are designed to favor custodial continuity over the rights of the competing custodians. This Court has stated that the following policy reasons underlie the changes created by the Act in the child custody area: (1) to preserve the basic policy of custodial continuity; (2) to maximize finality of the custody provisions of the divorce decree; (3) to prevent “ping-pong” custody litigation; and (4) to implement the principle that finality of the custody decree is of greater importance to the best interest of the child than the determination of which parent should have custody. See Schiele v. Sager, supra; Holm v. Holm (1977), 172 Mont. 81, 560 P.2d 905; Groves v. Groves (1977), 173 Mont. 291, 567 P.2d 459; Easton v. Easton (1978), 175 Mont. 416, 574 P.2d 898. On the basis of this authority, we find that the natural father is entitled to the return of his son.
Although we find, several inconsistencies in the District Court’s findings and conclusions, we have deemed it unnecessary to address them, since we have held that the custodial parent has superior rights than a nonparent and no jurisdiction to change custody was invoked.
We therefore reverse the District Court’s order dismissing the petition and direct the District Court to grant the father’s petition for habeas corpus. Nothing in this opinion is to be construed as preventing the mother from bringing a subsequent motion for modification pursuant to section 40-4-219, MCA.
MR. JUSTICES DALY, HARRISON, SHEA and SHEEHY, concur. | [
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MR. CHIEF JUSTICE HASWELL,
delivered the opinion of the Court.
Gerald Krum appeals from the property settlement provisions of a divorce decree entered in the Yellowstone County District Court.
Gerald and Linda Krum were married in 1964. They were separated briefly in 1976 and were permanently separated in December, 1977. Linda filed for divorce on August 30, 1978, the trial was held on August 16, 1979, and the District Court entered its findings of fact, conclusions of law, and decree of dissolution on October 25, 1979.
Until December, 1977, both husband and wife took an active part in the family farming operation located near Huntley, Montana. Following the separation, Linda lived in the family’s trailer home with the parties’ two children. She no longer took an active part in the farming operation, although she did not interfere with Gerald’s use of the land and equipment which was held in their joint name. Following the separation, Jerry continued to operate the farm and received all the profit and loss from the operations, he paid Linda $500 per month in child support in addition to allowing her the use of the family home. Linda began working part-time as a legal secretary-receptionist and attending Eastern Montana College.
The principal assets of the marital estate were 120 acres of irrigated farm land, acquired from Gerald’s parents in 1975 through a contract for deed, and farm machinery, acquired partly from Gerald’s parents and partly during the marriage and after separation. The principal liabilities were the amount owing on the contract for deed and a fluctuating farm operating loan.
The District Court made the following valuation of the marital estate as of the trial date:
MARITAL ESTATE
The District Court also found that husband and wife had contributed equally to the accumulation of the marital estate prior to the separation and that although Linda did not function as a marital partner following the separation, her unfulfilled obligation was offset by Gerald’s use of her interest in the land and machinery. As a result, the District Court entered a divorce decree which required Gerald to provide support of $250 per month per child and made the following equal property division:
TO PETITIONER LINDA ANN KRUM:
Mobile Home and 5 acres of farmstead $ 27,000.00
Savings Account 2,000.00
1978 Pontiac (net) 1,500.00
Horse 100.00
Furniture 500.00
Cash Payment 61,820.00
GRAND TOTAL $92,920.00
TO RESPONDENT GERALD JACOB KRUM:
Farm Land (net) $ 77,000.00
Farm Equipment and pickup truck 71,240.00
Keogh Plan 6,500.00
TOTAL $154,740.00
LESS cash payment to petitioner -61,820.00
FINAL TOTAL $ 92,920.00
It will be noted that this division does not make provision for the farm operating loan. The amount of this loan fluctuates considerably. The lowest it has been in the last seven or eight years is approximately $7,000 and the highest was $49,500 on the date of trial. The note balance on the date of separation was $28,000 and the balance on April 1, 1979, was $22,000. The proceeds have been used for farm expenses and personal items. The testimony at trial does not reveal the exact disposition of the proceeds and no attempt was made to quantify the amounts. Gerald testified that the balance on the note is directly related to the income that will come out of the farm for 1979. He estimated that approximately $35,000 is attributable to 1979 farm expenses. Also a pickup truck and combine were purchased through the borrowings. Gerald also testified that portions of the note were used to pay child support, to buy personal items, and to repair his current leased residence. The last expense will be reimbursed in the future.
Gerald Krum moved to amend the findings, conclusions and decree to include the operating loan in the net marital estate and to value the estate as of the date of separation in December, 1977, instead of the date of trial. The District Court entered an order denying the husband’s motion. In an attached memorandum the court stated:
“The primary adjustment being urged by respondent in his motion to amend Findings and Conclusions, and the principal cognizable one, is to incorporate into marital estate calculations the amount of the farm operating loan which, at the time of trial, was $49,500.00. This loan account exists upon a continuing basis, is renewed annually, and fluctuates widely. It was intentionally omitted in the Court’s calculations because of lack of sufficient information to do otherwise. For example: The evidence showed that respondent purchased a combine, a pickup truck, a camper shell, CB radio and stereo in 1978, after the parties separated, for a total cost of $12,800.00. The money for these purchases came from the operating loan and, as a consequence, no specific encumbrance became imposed upon the equipment itself and, although the evidence advises that some $22,000.00 in payments were made upon the loan in 1978, there is no itemization given to show the relationship of such payments to the indebtedness incurred in purchasing this equipment; so its net equity is impossible of determination under the evidence presented. Consequently, the Court was left with the alternative of either using the purchase price as the value to the marital estate as though it was paid in full, or considering it encumbered to its full value and, therefore, having no equity whatever. Obviously, it is not valueless, so the first alternative had to apply.
“Further, in connection with using the whole amount of the loan balance as a deduction from marital assets, as is urged by the respondent, it appears that the proceeds from the operating loan are used largely for noncapital expenses, being $35,000.00 in 1979 to date of trial. These expenses have no relationship to a determination of marital assets when the farm proceeds are excluded as has been the case here. Even if included, however, in the circumstances of these parties there would be a problem of detailed accounting to determine which expenditures are relevant to the marriage and the marital assets of these parties and which are not. Also, it would very likely require a reconciliation of the operating loan account over several years in the past, as well as into the future, by reason of the mechanics of its continuing operation.
“The respondent has had, and under the decree continues to have, the farm operation exclusively to himself, with both expenses and income his, as well as any profit or loss. That was the basis upon which the evidence tendered the issues to the Court for its decision and it was on that basis that the matter had to be decided.”
With regard to the future proceeds, Gerald Krum testified that he could not estimate the value of his sugar beets, corn, grain and hay crops which were growing on the jointly owned land and 260 additional acres that he leased.
The District Court also found no authority to support Gerald Krum’s contention that the marital estate should be valued as of the date of separation rather than the date of trial.
The following issues are raised on appeal:
(1) Whether the District Court committed reversible error by refusing to deduct the value of a farm operating loan from the value of the marital estate; and
(2) Should the net marital estate be determined on the date of separation or on the date of dissolution?
The disposition of a marital estate is governed by section 40-4-202, MCA, and is largely within the discretion of the District Court. This Court will not disturb the decision of the trial court absent a clear abuse of discretion. Eschenburg v. Eschenburg (1976), 171 Mont. 247, 557 P.2d 1014. The test for abuse of discretion is whether the trial court acted arbitrarily without the employment of conscious judgment or exceeded the bounds of reason. In re Marriage of Berthiaume (1977), 173 Mont. 421, 567 P.2d 1388; Fredericksen v. Fredericksen (1980), 185 Mont. 548, 605 P.2d 1135.
Of the $49,500 balance of the farm operating loan, Gerald Krum testified that he estimated that $35,000 represented 1979 noncapital farm expenses and $1,400 represented residence repairs. The $1,400 will be reimbursed by the owner of the residence at a later date and the $35,000 will be reimbursed by farm profit or absorbed in farm loss from the 1979 crops and the sale of cattle. Neither of these future proceeds were included in the marital estate; thus the District Court was entirely correct in offsetting $36,400 of the $49,500 note. The husband also testified that a portion of the loan represented child support payments and personal living expenses. Apparently a portion of the remaining balance of the loan represents the unpaid balance of the operating loan from prior years. Evidence also reveals that the only proceeds used to purchase capital assets following the separation were $7,500 to purchase a combine and approximately $6,000 to purchase a pickup truck. Both purchases occurred in 1978.
Thus, the District Court was faced with whether or not to include any, a part or all of the unquantified balance of $13,100, which represented child support, personal expenses, and prior borrowings. This was a difficult question, largely accounting oriented. We find the District Court’s reasoning in the previously quoted memorandum persuasive. Gerald Krum operated the family farm entirely on his own for the years 1978 and 1979 and was entitled to the profit and loss from the operation. The entire portion of the loan representing operating expense should be absorbed by him, and the only items which could rationally be deducted from the estate were the amounts attributable to the acquisition of farm equipment. Depending upon the accounting method used, this amount could be a proportionate amount of the $13,500 equipment purchased in 1978 or nothing if the first-in first-out accounting method is used. We find the omission of the $49,500 note to be reasonable under the circumstances of this case.
With regard to the valuation date issue, it is admitted in appellant’s brief that the valuation will not alter the result in the present case since the appreciation in land after the separation was nearly equal to the depreciation of equipment. The only authority presented by appellant is section 40-2-206, MCA, which pertains to earnings and accumulations of a married person while living separate from his spouse. The only increase in asset values between the date of separation and the date of dissolution was the appreciation of land, which can hardly be characterized as an accumulation solely of Gerald Krum since the property is held jointly. The value of farm equipment in fact declined due to depreciation. Consistent with In re Marriage of Kramer (1978), 177 Mont. 61, 580 P.2d 439, and Hamilton v. Hamilton (1980), 186 Mont. 282, 607 P.2d 102, we find the date of dissolution to be the date of valuation of the marital estate.
Affirmed.
MR. JUSTICES SHEEHY, HARRISON, DALY and SHEA, cur. con- | [
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] |
MR. JUSTICE SHEEHY,
delivered the opinion of the Court.
Appellants, Irvin G. and Charlotte A. Riis, commenced action in the District Court, First Judicial District, Broadwater County, for damages for breach of a renewal provision in a lease. The appellants appeal the District Court’s order granting summary judgment to the respondents, Robert J. and Donna Rae Day.
On June 1, 1976, the appellants entered a two year lease agreement with Ned George, the father of respondent Donna Rae Day and the then owner of the subject property. The lease was typed by appellant Charlotte Riis. It contained a renewal provision which reads as follows:
“Lessees are hereby given an exclusive option to renew this Lease and Agreement for an additional two years, under the same terms and provisions as this present Lease and Agreement except that the amount of rental shall be subject to negotiation and mutual agreement between the parties. In any event it is agreed that Lessees shall, if they exercise their said option to renew, have the right and privilege of meeting the bid of any other bona fide person, firm or corporation interested in leasing said property and if they shall meet such bid, they shall be entitled to a two year renewal of the Lease and Agreement.
“Lessee’s option to renew may be exercised by Lessees giving Lessor notice of exercise of said option, in writing at least 60 days prior to the termination of the Lease and Agreement.”
On December 28, 1976, Ned George sold the subject property to his daughter and son-in-law, the respondents, the conveyance was expressly made subject to the 1976 lease between appellants and Ned George. More than a year prior to the termination date of the lease, the respondents advised appellants the lease would not be renewed. The respondents wanted the property for their own use.
Appellants later gave respondents written notice of their decision to exercise the renewal provision. The notice was given within the prescribed time period for exercising the renewal provision, but the respondents refused to recognize the renewal request. The appellants vacated the property upon the expiration of the lease on May 31, 1978.
On or about June 4, 1978, the respondents entered into an oral agreement with Joe Clark regarding the subject property. In exchange for caring for respondents’ cattle on the subject property and an additional $8.00 per animal unit, Clark was permitted to graze ten head of his cattle with those of the respondents.
On August 30, 1978, appellants brought this cause for damages for breach of the renewal provision. After discovery and submission of affidavits, both parties moved for summary judgment. On December 28, 1979, the District Court entered its opinion and order. The District Court found the renewal provision void for lack of certainty regarding rent and granted summary judgment in respondents’ favor.
The sole issue for review is whether the summary judgment entered was proper. We affirmed the District Court. Under the facts at hand, no genuine issues of material fact remain unresolved, and the respondents rather than appellants were entitled to judgment as a matter of law. Rule 56, M.R.Civ. P.
As a general rule, an agreement must contain all its essential terms in order to be binding. Monahan v. Allen (1913), 47 Mont. 75, 130 P. 768. In this cause, we find the District Court was correct in holding the renewal provision void for lack of certainty regarding the essential term of rent.
We have never ruled on the validity of a renewal provision which is open to negotiation regarding rent, and the other jurisdictions are divided on this issue. After a review of the authorities, we find three views prevail.
Under the old rule, a provision for the renewal of a lease must specify the time the lease is to extend and the rate of rent to be paid with such certainty that nothing is left to future determination. If it falls short of this requirement, the agreement is not enforceable. Slayter v. Pasley (1953), 199 Or. 616, 264 P.2d 444, 446. Jurisdictions following this view reason that courts cannot make contracts for the parties nor can they compel parties to agree upon one. Thus, if an essential term depends upon later agreement, the contract is void ab initio. Hall v. Weatherford (1927), 32 Ariz. 370, 259 P.2d 282, 285.
Under another view, which the parties here characterize as the “first minority view”, a renewal provision will be enforced if it expressly contemplates a clear and definite mode for determining future rent. Thus, if a definite mode for renewal rent is provided by the lease agreement or by operation of law, which can be determined at the time of renewal without negotiation, the court is not making a new contract for the parties but merely compelling the parties to do what they plainly contemplated in the beginning. Slayter v. Pasley, supra, 264 P.2d at 446, 448.
Under the third and most liberal view, even if no mode for determining future rent is provided in the agreement, a renewal provision is valid if the contract shows the parties mutual consent to meet in the future for the purpose of making further provisions for a reasonable rent. If so, the court will imply a mutual agreement for a reasonable rent. According to the jurisdiction following this view, this rule effectuates the parties’ intent. The provision must have been included for a reason, and if one party agreed only in the secret belief the provision would later be held unenforceable, then the equities compel enforcement. Voluntary consideration often already has been paid for it as an inducement for the original lease. To this extent, the landowner has benefited from the tenants’ reliance on the clause, and the tenant has a stronger claim to the reciprocal benefit of the renewal provision. Moolenair v. Co-Build Companies, Inc. (D. Virgin Islands 1973), 354 F.Supp. 980, 982-983.
We believe the “first minority view” reflects the best standard. It recognizes the business utility of renewal provisions. Such provi sions often do provide the inducement for entering the original lease. But, given fluctuating market conditions, the parties cannot fairly determine what would be an adequate rent in the future. At the same time, this standard also adheres to the wisdom of the old rule. It recognizes the danger of courts arbitrarily interpolating provisions into an arm’s length transaction to breathe life into an otherwise invalid agreement.
Having adopted this view, we next answer whether the agreement here satisfies the standard chosen. We find it does not, and therefore, the renewal provision is void for lack of certainty regarding the essential term of rent.
As the District Court noted, the first two sentences of the renewal provision appear to conflict with each other. The first sentence gives appellants an “exclusive option”, which constitutes an unconditional and continuing offer by the lessor. By supplying the proper acceptance, a tenant can compel the lessor to perform whether he wants to or not. Phalen v. Rilley (1971), 159 Mont. 239, 245, 496 P.2d 295, 298. The second sentence, on the other hand, appears to give the appellants a right of first refusal which is conditioned upon a lessor’s decision to relet the premises. Phalen, supra.
A contract is to be construed so as to make provisions effective, if possible. Repugnant provisions should be interpreted in such a way as will give them some effect, subordinate to the general intent and purpose of the entire contract. Sections 28-3-201, 28-3-202, and 28-3-204, MCA.
With these rules in mind, the most reasonable approach is that followed by the District Court below. The first sentence should be construed as an exclusive option to renew with the second sentence establishing a method of determining the amount of future rent to be owed. The renewal provision itself suggests this approach. Under the express terms of the agreement, the second sentence of the questioned provision is operative only if appellants have exercised their option to renew.
Even given this construction however, the renewal provision must still fail for lack of certainty regarding rent. As the District Court reasoned, the mode for determining rent comes into play only if a bid by a third-party is made. If there is no such bid, there is no expressed method for determining rent, and the essential term of rent remains uncertain. Yet, in an option situation like that presented here, a binding bilateral contract is created only at the time all conditions precedent to the exercise of the option are performed. Corbin on Contracts, § 264. Since there were no third party bids at the time this contract should have been created in 1977, the option to renew was void for lack of certainty as to how future rent was to be determined.
In the appellants’ view, the respondents’ arrangement with Joe Clark is a bona fide offer bringing the lease agreement’s method of determining rent into play. Beyond this alleged question of fact, appellants maintain a further question is raised regarding whether the arrangement between respondents’ and Clark was a deliberate attempt to defraud the appellants. We do not agree.
There are no facts in the record indicating the arrangement between Clark and respondents is a leasehold arrangement. A lease is a contract which gives a lessee exclusive possession of the premises as against all the world, including the owner. Herigstad v. Hardrock Oil Co. (1935), 101 Mont. 22, 34-35, 52 P.2d 171, 174. Such is not the case here. Moreover, even assuming a lease arrangement between Clark and respondents, that arrangement was not entered into until after the option to renew had expired. Finally, concerning the alleged question of a deliberate fraud by respondents, there are no facts in the record giving rise to such a question. Once respondents established a lack of material questions of fact, appellants bear the burden of submitting facts in proper form which raised such questions. Silloway v. Jorgenson (1965), 146 Mont. 307, 310, 406 P.2d 167, 169. The respondents failed this burden.
The District Court’s judgment is affirmed.
MR. CHIEF JUSTICE HASWELL, and JUSTICES HARRISON, SHEA and DALY, concur. | [
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MR. JUSTICE DALY
delivered the opinion of the Court.
Defendant Robert A. Kamrud appeals from his conviction, following a jury trial, of the offense of criminal sale of dangerous drugs.
On March 9, 1979, John Nelson and Gary Gill were employed as undercover deputy sheriffs of Wheatland County to investigate possible drug sales and drug use in Harlowton, Montana. They set up a trailer at Clark’s Trailer Court on a space next to the defendant’s trailer and became friendly with the defendant. The officers assumed fictitious names, displayed and used marijuana, and also held parties to ingratiate themselves with persons suspected of selling or using illegal drugs. Nelson and Gill had obtained marijuana from Wheatland County Sheriff William Duncan as a part of their cover. They manicured this marijuana and made it available for smoking to some persons invited by them to parties at their trailer. Defendant attended one such party on March 10, 1979.
Another party was had at the undercover officers’ trailer during the early morning hours of March 17, 1979, after the bars had closed. Defendant did not attend this party, although he did appear at the door very briefly to recover a bottle of whiskey he had previously left at the officers’ trailer. Officer John Nelson testified on cross-examination by defense counsel that at about 3:05 a. m. that morning, as the defendant was leaving with his bottle of whiskey, Officer Gary Gill approached the defendant and asked him if he could supply Gill with some “stuff.” None was supplied. Nelson did not personally witness this conversation. At the time of the hearing on defendant’s pretrial motions, Officer Gary Gill testified to the same effect, but he did not testify at trial. Defendant took the stand at trial and testified that after recovering his bottle of whiskey, he went back to his camper to have some drinks with a woman-friend. Defendant made no mention in his testimony of any conversation with Gill in which Gill approached him for drugs at that time.
Later on the 17th, at approximately 11:30 a. m., the defendant and a girlfriend stopped briefly at the trailer occupied by Nelson and Gill and had a short conversation with them. Nelson testified that at that time he heard defendant, in his presence, ask Gill if he still wanted some drugs, to which Gill responded that they would see the defendant later that afternoon at his home. Gill testified to the same effect during the hearing on defendant’s pretrial motions. The defendant and his girlfriend contradicted this testimony, saying that drugs were not discussed during this conversation.
At approximately 4:20 that afternoon, according to Nelson’s testimony, he and Gill went to defendant’s trailer, where Gill requested some “stuff” and defendant gave him a vial containing 1.8 grams of marijuana. Defendant refused to take any money. Gill’s testimony at the hearing on pretrial motions was similar. Defendant denied that the officers came to his trailer house that afternoon or that he sold or gave them any drugs. He testified that he spent the afternoon checking his trapline and having a beer with his girlfriend in the Argonaut Bar until her workshift began, and then drove home and went to bed and slept the rest of the day.
On March 27, 1979, defendant Robert A. Kamrud was charged in the District Court, Fourteenth Judicial District, Wheatland County, Montana, with the crime of criminal sale of dangerous drugs in violation of section 45-9-101, MCA. The information charged that on March 17, 1979, at approximately 4:30 p. m. in his trailer house at Harlowton, Wheatland County, Montana, the defendant “Robert A. Kamrud gave away to Gary L. Gill a quantity of dangerous drugs as defined in Section 50-32-101, MCA, 1979, to-wit: marijuana, a Class I drug.”
On June 12, 1979, the defendant’s attorney filed various pretrial motions, including a motion to dismiss the information on the grounds of entrapment. A hearing was held on these motions on June 21, 1979. Defendant made the contention that entrapment was established as a matter of law by the allegations contained in the State’s affidavit of probable cause filed in support of its application to file the information and by the evidence presented at the hearing. The District Court denied defendant’s motion in an order filed June 25, 1979, stating that entrapment had not been estab lished as a matter of law but that it would present a question of fact for the jury.
Kamrud pleaded not guilty and was tried before a jury. He was. found guilty and was sentenced to five years in the Montana State Prison.
Appellant presents several issues on appeal but we need consider only one: Did the District Court err in denying defendant’s pretrial motion to dismiss on the grounds that entrapment was established as a matter of law?
As a preliminary matter, the State urges that defendant is precluded from asserting the inconsistent defenses of (1) entrapment coupled with (2) a denial of having committed the offense. In State v. Parr (1955), 129 Mont. 175, 283 P.2d 1086, we held: “The rule is that the defense of entrapment is not available to one who denies commission of the offense.” Parr, 283 P.2d at 1089, citing Annot., 33 A.L.R.2d 883, 910. Parr involved the sale of whiskey to a minor. The minor, who was incarcerated in the juvenile department of the county jail, was given a ten dollar bill by a probation officer and instructed to purchase a bottle of whiskey in defendant’s bar while the county attorney and state liquor inspector watched the transaction. The defendant denied having sold any whiskey to the minor. In affirming defendant’s conviction for selling intoxicating liquor to a minor, we stated that the evidence did not entitle defendant to an instruction on the question of entrapment and noted further that the defendant denied having sold the liquor to the minor, holding that the entrapment defense was therefore not available.
We followed the same rule in State v. O’Donnell (1960), 138 Mont. 123, 354 P.2d 1105, 1107, and State v. LaCario (1974), 163 Mont. 511, 518 P.2d 982, 985. There are cases to the contrary in other jurisdictions: United States v. Demma (9th Cir. 1975), 523 F.2d 981; People v. Perez (1965), 62 Cal.2d 769, 44 Cal.Rptr. 326, 401 P.2d 934.
In the present case defendant took the stand and expressly denied that he had ever sold or given any marijuana to the under cover officers. The District Court nevertheless instructed the jury on the issue of entrapment in the words of our statute, section 45-2-213, MCA, and is an additional instruction to which the defendant did not object. Thus, defendant was given the benefit of instructions to which he was not entitled under Montana law when the entrapment defense was submitted to the jury, which rejected the defense in returning a verdict of “guilty.”
Although the jury, in returning their verdict of “guilty,” found as a matter of fact that there was no entrapment, and although this Court has held, in our decisions in Parr and O’Donnell that the defense of entrapment is not available to one who denies commission of the offense, as this defendant did when he took the stand at trial, the specific holding in those cases was that the trial court did not commit error in refusing to instruct the jury on the question of entrapment. In the present case defendant contends that the District Court committed error by refusing to grant his pretrial motion to dismiss on grounds of entrapment after the hearing on pretrial motions. At that time defendant had not denied committing the acts which formed the basis of the offense. The testimony of Officer Gill at the pretrial hearing on motions was substantially identical to Officer Nelson’s at the trial in regard to the facts relating to the entrapment defense. Thus, defendant argues on appeal that the testimony at the pretrial hearing and the allegations in the State’s affidavit establish entrapment as a matter of law.
The entrapment defense is not a constitutional one, as the United States Supreme Court recognized in United States v. Russell (1973), 411 U.S. 423, 433, 93 S.Ct. 1637, 1643, 36 L.Ed.2d 366, where it held that “the defense is not of a constitutional dimension.” Therefore, we must look primarily to Montana statutes and case law.
The federal cases are nevertheless relevant to the extent that they apply the same test used in Montana. The Commission Comment to our statute defining entrapment, section 45-2-213, MCA, states that “[t]he defense of entrapment generally follows the rule stated by the majority in the Sorrells case.” (Sorrells v. United States (1932), 287 U.S. 435, 53 S.Ct. 210, 77 L.Ed. 413, 86 A.L.R. 249.) Entrapment is, of course, an affirmative defense, and the burden of proving it rests on the defendant. LaCario, 518 P.2d 982, 985; State v. White (1969), 153 Mont. 193, 456 P.2d 54, 56; O’Donnell, 354 P.2d 1105, 1106; Parr, 283 P.2d 1086, 1089.
This Court has held that the defense of entrapment may be established as a matter of law. In State v. Grenfell (1977), 172 Mont. 345, 564 P.2d 171, we overturned the defendant’s conviction of sale of dangerous drugs on the grounds that the defense of entrapment had been established as a matter of law. Montana has recognized the entrapment defense by case law, and it is now codified in section 45-2-213, MCA:
“Entrapment. ” A person is not guilty of an offense if his conduct is incited or induced by a public servant or his agent for the purpose of obtaining evidence for the prosecution of such person. However, this section is inapplicable if a public servant or his agent merely affords to such person the opportunity or facility for committing an offense in furtherance of criminal purpose which such person has originated.”
This Court has held:
“This statute is consonant with earlier decisions of this Court which set forth the following elements of entrapment: (1) Criminal intent or design originating in the mind of the police officer or informer; (2) absence of criminal intent or design originating in the mind of the accused; and (3) luring or inducing the accused into committing a crime he had no intention of committing. State ex rel. Hamlin, fr. v. District Court, 163 Mont. 16, 515 P.2d 74; State v. Karathanos, 158 Mont. 461, 493 P.2d 326.” State v. Grenfell, supra, 564 P.2d at 173.
See also State v. Gallaher (1978), 177 Mont. 150, 580 P.2d 930, 935.
This Court has on previous occasions discussed in detail the matters to be considered in determining whether or not the entrapment defense has been established:
“Entrapment occurs only when the criminal intent or design originates in the mind of the police officer or informer and not with the accused, and the accused is lured or induced into committing a crime he had no intention of committing. Only when the criminal design originates, not with the accused, but in the mind of government officers and the accused is by persuasion, deceitful representations, or inducement, lured into the commission of a criminal act, can a case of entrapment be made out. In short, there is a controlling distinction between inducing a person to do an unlawful act and setting a trap to catch him in the execution of a criminal design of his own conception . . .” State v. Karathanos (1972), 158 Mont. 461, 493 P.2d 326, 331 (holding that there was no entrapment where the defendant approached a police informant in a bar and offered to sell her drugs, later completing the transaction).
See also, State v. Frates (1972), 160 Mont. 431, 503 P.2d 47, 51.
In Grenfell the defendant was approached by an informant, whom the Court characterized as a frustrated and unfulfilled policeman attempting to land a job as a deputy sheriff with the Silver Bow County sheriff’s department. The informant and his wife had cultivated a close friendship with defendant and his wife over a period of six months. On several occasions within a period of four days, the informant persistently requested the defendant to procure him some drugs, which the defendant did with reluctance. Defendant obtained the drugs from two men he had worked with and knew to be involved with drugs. In coaxing the defendant to obtain and sell him drugs, the informant promised defendant that he could get him a job in Utah with a mining company, and that the trip to Utah could be financed by the profits from the sale of a large quantity of drugs to the informant’s friend. In overturning defendant’s conviction for selling the drugs to the informant on the grounds that there was entrapment as a matter of law, we stated that this was not a case where the drug informer made only a casual offer to buy and that the entire scheme originated in the informer’s mind.
“The record shows Grenfell was not predisposed to commit this offense. There was no evidence that prior to January 26, 1975, Grenfell had ever used or sold drugs. Grenfell’s close friendship with [the informer] spanned approximately six months, yet [the informer] testified that Grenfell never offered to sell him drugs.” Grenfell, 564 P.2d at 173-74.
The facts of the present case fall within the cases cited where we have held entrapment as a matter of law, and we believe that they are sufficient to establish entrapment as a matter of law. The criminal intent or design to sell marijuana did not originate with the defendant, but with the undercover officers Gary Gill and John Nelson, who induced defendant to give them a minute quantity of marijuana. The officers did more than merely afford Kamrud with the opportunity to commit the offense by making a casual offer to buy. As in Grenfell, they befriended him and approached him on more than one occasion for the purpose of soliciting drugs.
Likewise, there was no evidence whatsoever that Kamrud had ever sold or offered to sell drugs to anyone prior to his “sale” to Gill and Nelson, which was made at their request; i. e., there was no evidence that he was predisposed to commit the offense or that the idea originated with defendant. That is further buttressed by the fact that the minute quantity of marijuana involved here, 1.8 grams, is not an amount that would ordinarily be exchanged by a person who had the criminal intent to make a sale or even a gift. The officers did far more than merely afford Kamrud with the opportunity to commit the offense — they came up with the whole idea. The officers established themselves as drug users and they themselves violated the very law with which defendant is charged by preparing and giving away marijuana supplied by the Wheat-land County sheriff’s department. In short, the record does not disclose that there was any drug traffic in Harlowton by the defendant or anyone else, other than that engaged in by these law enforcement officers. While the defendant may well have had the intent to possess marijuana, the idea for him to sell it or to give it away cer tainly originated with the police officers and not with defendant. Therefore, we hold that under these facts, entrapment was established as a matter of law. Grenfell, 564 P.2d at 173-74.
The judgment of the District Court is reversed with directions to dismiss the information.
MR. CHIEF JUSTICE HASWELL and JUSTICES HARRISON and SHEEHY, concur.
MR. JUSTICE SHEA will file a specially concurring opinion at a later date. | [
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] |
MR. JUSTICE HARRISON,
delivered the opinion of the Court.
This is an appeal from an action brought in Missoula County District Court for the recovery of certain monies allegedly owed to North Dakota State University on a contract for the promotion of a rock concert. Summary judgment was'entered in favor of respondent State of North Dakota. Appellant Newberger appeals from the granting of the motion for summary judgment.
Appellant, through his business, Amusement Conspiracy, promotes rock concerts at several universities and colleges throughout the Northwest. Appellant is a resident of the State of California with his principal offices located in Encino, California. Appellant entered into a contract with North Dakota State University to promote a rock concert at the University in Fargo, North Dakota, on February 13, 1979. The contract contained a clause which provided that, in the event of cancellation of the concert, proceeds from advance ticket sales and certain promotion expenses would be refunded. Due to the illness of one of the performers, the rock concert was never held. As a result of the cancellation, appellant allegedly owed monies for promotion expenses and advance ticket sales.
On March 2, 1979, respondent filed a complaint in the District Court of the Fourth Judicial District, in and for the County of Missoula, to recover the monies allegedly owed. The complaint was filed in Missoula County because appellant was actively promoting another rock concert at the University of Montana field-house in Missoula. The concert was scheduled to be held on March 2, 1979. In filing the complaint, respondent caused a summons to be issued. However, appellant was never personally served with the summons.
In addition to the complaint, respondent also filed an affidavit in support of a prejudgment writ of attachment. Respondent sought to attach the proceeds of the Missoula concert to the extent that they would satisfy the debt allegedly owed to North Dakota State University. After testimony was taken at a hearing, the District Court issued an order for a writ of attachment, and the proceeds of the Missoula concert were attached in the amount requested.
On March 5, appellant, through his counsel, appeared to discharge the writ of attachment on the ground that it was improperly and irregularly issued. Appellant argued that the writ should be discharged because it was accompanied only by one undertaking, the surety, and section 27-18-204, MCA, required that it be accompanied by two. The motion to discharge was denied. On March 28, 1979, appellant again appeared before the District Court and moved that the action be dismissed for improper venue and lack of jurisdiction. That motion, too, was denied.
Prior to appellant’s motion to dismiss, on March 20, 1979, respondent filed a request for thirteen admissions from appellant. Appellant, however, did not respond to the requests. On June 21, 1979, respondent notified appellant, because there had been a failure to answer the requests within the time provided by law, that the matters would be deemed admitted. Again, appellant did not respond.
On July 17, 1979, respondent filed a motion for summary judgment, based upon the admissions which had been obtained. Appellant then filed on August 13, 1979, a motion for the withdrawal of previous admissions and a request for an extension of time so that the answers could be filed. A hearing was held with respect to the motions filed by the parties on August 23, 1979. The District Court denied appellant’s motion for leave to file answers and entered summary judgement for respondent.
Appellant raises three issues for our consideration on this appeal:
(1) Whether the District Court erred in denying appellant’s motion to dismiss for lack of jurisdiction?
(2) Whether the District Court erred in denying appellant’s motion for leave to file answers to respondent’s requests for admissions?
(3) Whether the District Court erred in continuing the writ of attachment over liens which may possibly have been superior to respondent’s interest in the attached proceeds?
Appellant’s first issue is to the effect that the District court lacked in personam jurisdiction over him. Appellant is, of course, a nonresident, and in personam jurisdiction is conferred over nonresidents by Montana’s “long-arm statute,” Rule 4B, M.R.Civ.P., provided that certain criteria are met. That rule provides in pertinent part:
“All persons found within the state of Montana are subject to the jurisdiction of the courts of this state. In addition, any person is subject to the jurisdiction of the courts of this state as to any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the following acts:
“(a) the transaction of any business within this state;
“(c) the ownership, use or possession of any property, or of any interest therein, situated within this state;
“(e) entering into a contract for services to be rendered or materials to be furnished in this state by such person;”
In interpreting state “long-arm” statutes, we have stated that the determination of whether a court may assume jurisdiction over a nonresident defendant without offending the principles of due process is a two-step process. “The court first must look to the state statute to determine whether the statute provides for the exercise of jurisdiction under the particular facts of the case, and second, the court must determine whether it would offend due process to assert jurisdiction” May v. Figgins (1980), 186 Mont. 383, 607 P.2d 1132, 1134, quoting 2 Moore’s Federal Practice ¶4.41-1[1] at 4-421. We have also recognized that there is a prevailing trend toward expanding the permissible scope of state jurisdiction to the fullest extent possible. May v. Figgins, supra, 607 P.2d at 1134, 37 St.Rep. at 496; Prentice Lumber Company v. Spahn (1970), 156 Mont. 68, 76, 474 P.2d 141, 145.
The basic rule with regard to due process limitations imposed upon a state’s power to exercise in personam jurisdiction over a nonresident defendant was stated in the landmark case of International Shoe Co. v. State of Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95:
“. . . due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” International Shoe, supra, 326 U.S. at 316, 66 S.Ct. at 158.
The Supreme Court went on to elaborate the requirements of the “minimum contacts” test:
“Whether due process is satisfied must depend rather on the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. That clause does not contemplate that a state may make a binding judgment in personam against an in dividual or corporate defendant with which the state has no contacts, ties or relations . . .
“But to the extent that a corporation exercised the privilege of conducting activities within a state, it enjoys the benefits and the protection of the laws of that State. The exercise of that privilege may give rise to obligations; and, so far as those obligations arise out of or are connected with the activities within the state a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue.” International Shoe, supra, 326 U.S. at 319, 66 S.Ct. at 160.
The doctrine of state jurisdiction over a nonresident defendant has since been developed in a long line of cases. See Hanson v. Denckla (1958), 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283; McGee v. International Life Ins. Co. (1957), 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; Perkins v. Benquet Consolidated Mining Co. (1952), 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485; L.D. Reeder Contractors v. Higgins Industries, Inc. (9th Cir. 1959), 265 F.2d 768; Travelers Health Ass’n. v. Virginia ex. rel. State Corporation Comm’n (1950), 339 U.S. 643, 70 S.Ct. 927, 94 L.Ed. 1154.
If a nonresident defendant’s activities within a state are “substantial” or “continuous and systematic,” there is a sufficient relationship between the defendant and the state to support jurisdiction even though the cause of action is distinct from, unrelated to, or does not arise out of the defendant’s activity within the forum state. Perkins, supra, 342 U.S. at 446-447, 72 S.Ct. at 418-419; Wells Fargo & Co. v. Wells Fargo Express Co. (9th Cir. 1977), 556 F.2d 406, 413; Data Disc., Inc. v. Systems Tech. Assoc., Inc. (9th Cir. 1977), 557 F.2d 1280; see also Annot., 2 L.Ed.2d 1664, 1670.
Applying these principles to the case at bar, we find appellant has sufficient and substantial “minimum contacts” with this state for the District Court to have assumed jurisdiction of this matter. Appellant purposely avails himself of the privileges and benefits of the laws of this state by conducting his business of pro moting rock concerts in Montana and throughout the Northwest. The record reveals that appellant has promoted concerts in Montana prior to the one in Missoula at which the proceeds were attached. As part of his business transactions, appellant also enters into contracts for services to be provided in this state. It is out of a similar and related contract that respondent’s claim for relief of course of action arises. The basis of respondent’s claim is, therefore, not totally unrelated to or distinct from the activities of appellant in this state. Further, at the time of this action, appellant was in possession of monies or personal property in this state which were alleged to have rightfully belonged to respondent. It is for this reason that respondent chose to file this action in Missoula.
It appears, therefore, that appellant has “minimum contacts” with this state; appellant was found in Montana, transacts business in Montana, had an interest in proceeds in Montana which were attached, and contracts for services to be provided in Montana. The facts of this case satisfy the requirements of Rule 4B(l)(a), (c) and (e), M.R.Civ.P.
We find further that, under the circumstances of this case and for the reasons aforementioned, the “traditional notions of fair play and substantial justice” were not offended by the District Court assuming jurisdiction. Respondent, by filing this action, in no way sought to “vex,” “harass” or “oppress” appellant by inflicting upon him expense or trouble not necessary to his own right to- pursue his remedy. To the contrary, respondent chose the Missoula District Court because both appellant and the proceeds could be found there. While there may have been, from the choice of this forum, some inconvenience to both parties, it is clear that no advantages or obstacles to a fair trial were thereby created. To deny jurisdiction of this cause would be to thwart the public interest this state has in providing a forum for companies doing business and for the carrying on and enforcing of proper business practices, such as the payment and collection of debts. See Prentice Lumber Company v. Spahn, supra. We find, therefore, that the District Court did not err in denying appellant’s motion to dismiss for lack of jurisdiction.
In any event appellant through his counsel appeared without objection to jurisdiction over his person. He thereby waived any objection under Rule 12, M.R.Civ.P.
Appellant’s second issue concerns whether the District Court erred in denying appellant leave to file late answers to admissions which respondent had previously obtained. Appellant contends that there were compelling circumstances which explained the failure to answer, since he was hospitalized for a substantial period of time.
Respondent served on appellant requests for thirteen admissions pursuant to Rule 36, M.R.Civ.P.; appellant did not respond within the time provided by law. After respondent gave notice to appellant that the matters would be deemed admitted, the District Court granted respondent summary judgment based upon the admissions. The following timetable is pertinent:
March 20 Respondent requested 13 admissions. No response.
June 19 Appellant hospitalized.
June 21 Respondent notified appellant that matters would be deemed admitted. No response.
July 17 Respondent moved for summary judgment.
August 6 Appellant released from hospital.
August 9 Appellant moved for leave to file late answers.
This Court has recently had two occasions to discuss the issue of whether leave to file late answers should have been allowed when previous admissions had been obtained by a party’s failure to respond. Heller v. Osburnsen (1973), 162 Mont. 182, 510 P.2d 13; Morast v. Auble (1974), 164 Mont. 100, 519 P.2d 157. In Heller, the District Court allowed a party to file late answers because the delay was caused by a mixup in office procedure and not by bad faith. We upheld the discretion of the District Court, and, quoting 2 Moore’s Federal Practice ¶15.-05[2] at 1156, stated the general rule:
“ * * Failure to take any action within the period stated in the request results in an admission of the facts stated therein, although the court may permit the party to file his answer after the expiration of such time where the delay was not caused by a lack of good faith. Or in the absence of any prejudice to the party requesting the admission.’ ” Heller, 162 Mont. at 190, 510 P.2d at 17, (Empahsis added.)
In contrast, the District Court in Morast refused plaintiffs leave to file late answers. There, an eight and one-half month delay occurred and an intervening admonition during a pretrial conference had been given and names had been furnished to plaintiffs through interrogatories during discovery. On appeal, this Court held that the District Court had not abused its discretion, emphasizing that a litigant’s right to file a late response is “not a matter of right,” but is rather “a matter resting within the discretion of the district court and will not be disturbed on appeal unless there is a showing of manifest abuse of that discretion.” Morast, 164 Mont. at 105, 519, P.2d at 159.
In this case approximately a five-month delay occurred. During seven weeks in the latter part of the period, appellant was hospitalized. For the first three months, however, including the thirty-day period the law allows for a response to the requests, appellant was carrying on the normal daily affairs of his business. The transcript indicates that the District Court was well aware of this:
“THE COURT: Well, where was he [appellant] from March until June 19th?
“MR. OLDENRURG: I believe he was traveling in his business, Your Honor. . .”
At no time during this traveling or the period of his hospitalization did appellant or his counsel ask for an extension of time to reply to the requests or indicate any reason for the failure to respond. Where respondent served notice of the consequences of failing to answer the requests, which is not required by the rules, appellant simply chose not to respond. In other courts, arguments similar to those advanced by appellant here have fallen on “deaf ears.” See Oscelola Inns v. State Highway Dept.(1975), 133 Ga.App. 736, 213 S.E.2d 27, 29. Under these circumstances, we find that appellant has not demonstrated a manifest abuse of discretion, and the District Court did not err in denying appellant leave to file late answers.
Appellant’s final issue concerns whether the District Court erred in continuing the writ of attachment over liens which possibly may have been superior to respondent’s interest in the attached proceeds. At the hearing on the motion for leave to file late answers and the motion for summary judgment, appellant made a brief and passing reference to the fact that a third party allegedly held a perfected security interest in the proceeds. The trial court continued the writ of attachment over any other liens in the money.
In conducting our research, we find, as both parties acknowledged, that there is little authority on this issue. Where the situation has arisen before, the third party has intervened to assert his perfected security interest in the attached proceeds and subsequently moved to dissolve the attachment. See Barocas v. Bohemia Import Co., Inc. (1974), 33 Colo.App. 263, 518 P.2d 850. We find that if the third party’s interest is to be asserted at all, such intervention is necessary and defendant lacks standing to raise a third party’s interest as a defense to the attachment. Therefore, without such intervention, the District Court did not err in continuing the writ of attachment over any liens which may possibly have been superior to respondent’s interest in the proceeds.
Accordingly, the judgment of the District Court is affirmed.
MR. CHIEF JUSTICE HASWELL, and JUSTICES DALY, SHEA and SHEEHY, concur. | [
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MR. JUSTICE DALY,
delivered the opinion of the Court.
This case presents a regrettable state of affairs wherin the parties to a divorce are still disputing the distribution of marital property ordered by the District Court in its 1975 decree of dissolution and affirmed by this Court. Zell v. Zell (1977), 174 Mont. 216, 570 P.2d 33.
The facts of this case are adequately set out in our prior opinion. Briefly, the marriage of Raymond Zell and Victoria M. Zell was dissolved in an October 20, 1975 decree which distributed equally the marital property of the parties. For purposes of this appeal, it is necessary only to point out that the wife, appellant here, was to receive the family residence, and the husband was to receive a rental property and all farm machinery. The farmland owned by the parties was ordered to be partitioned equally between them, and certain leases were also divided. The proceeds from the 1975 crops were to be divided equally between the parties after the husband was reimbursed for the costs of production and after all existing encumbrances against the farm machinery and the family residence were discharged. The aforementioned distribution of marital property was challenged by the wife on appeal and was affirmed by this Court in our prior opinion.
The controversy now before this Court arises out of the parties’ refusal to carry out the property division ordered by the District Court. The wife neglected to convey her interest in the rental property to the husband, as ordered in the District Court decree, and she continued to collect rents on that property until January 1979. The husband failed to apply the net proceeds from the 1975 crops to discharge all encumbrances against the family residence, which was awarded to the wife. Both parties failed to effect an equal partition of the farmland until November 1978, and the husband, who continued to farm the property after the October 20, 1975 divorce, made no accounting to the wife of his income derived from the property until 1979, although he delivered a share of the crop to her each year.
On motion of the wife, a hearing relating to the performance of the terms of the October 20, 1975 decree was held on February 22, 1979, before the same district judge who had presided at the original dissolution proceedings. After the hearing the judge directed each party to file an accounting of income and expenses for the years 1975 through 1978 to assist in implementing the original decree.
Following a second hearing on May 30, 1979, the judge appointed an accountant as a special master to make a complete report of the income and expenses of both husband and wife for the years in question. After the special master filed his report with the District Court on August 21, 1979, the parties made exceptions and objections to the special master’s report. A hearing was held on September 27, 1979, during which both parties examined the special master and submitted further evidence and arguments.
On November 15, 1979, the District Court entered its supplemental findings of fact, conclusions of law, and judgment, ordering husband to pay wife the sum of $11,912.69 with interest at the rate of 6 percent per annum from July 1, 1976. The District Court entered a further order relinquishing jurisdiction. Wife filed a motion requesting a new presiding judge and a motion for a new trial and to amend and alter the supplemental findings of fact, conclusions of law and judgment relating to property matters, which motion was denied by the new presiding judge following a hearing. She now brings this appeal.
The District Court stated in its supplemental findings of fact:
“2. The principal dispute between the parties relates to the income from the farm lands owned by the parties and from leased lands during the period starting with the year 1975 and ending with the year 1978. The October 20, 1975, judgment provided that the 1975 crops grown on these lands were to be sold and the proceeds used, first, to pay costs of production; second, to discharge liens and encumbrances existing against the real and personal property, and third, any balance to be divided equally between the parties. From the time of the divorce through the year 1978, plain tiff continued to farm all of the deeded and leased land. He delivered over to defendant a share of the crop each year, but made no accounting to her of income and expenses until 1979. The 1975 income was not applied when received in accordance with the directives of the judgment. During the period from October 20, 1975, to September 21, 1977, when the Supreme Court decision was handed down, it appears that no action was taken by either party to carry out the terms of the decree. Thereafter, much of the delay in having an accounting and arriving at a settlement was due to defendant’s change of attorneys and her inability to understand or agree to the terms of the judgment.
“6. Defendant’s exception No. 6 to Master’s report asks that plaintiff be responsible for the interest that has accumulated on the encumbrance existing against the property at 800 First Street South since he failed to make a timely full accounting and that he be ordered to discharge this encumbrance as provided by the October 20, 1975, judgment. The judgment provided that the encumbrance existing as of May 19, 1975, be discharged from proceeds of 1975 crop income before any part of the income was divided between the parties. The report shows that the property in question was encumbered to the amount of $ 16,065.10 on May 19, 1975. The report further shows that the net 1975 income from the farm lands, after reimbursing plaintiff for costs of production, was $64,910.48. Encumbrances to be deducted totaled $21,355.68, which included the $16,065.10 and $5,290.58 owing on farm machinery. This left $43,554.80 to be divided between the parties at $21,777.40 each. It appears further from the report that plaintiff did not apply the receipts from the 1975 crop in that fashion. He did not pay off the encumbrance on the property at 800 First Street South. Instead, he delivered to defendant 1975 grain of a value of $17,858.19, a sum sufficient to pay off the encumbrance. Defendant did not use the proceeds of the 1975 grain sale for that purpose, nor has she applied any of the payments received from plaintiff in subsequent years for that purpose, so this encumbrance still has not been satisfied. Plaintiff did not deliver to defendant any additional part of the 1975 crop. In effect, whatever balance is found by the Court in this proceeding to be owing to defendant is accountable to the failure of plaintiff to apply the 1975 sales proceeds as required by the judgment. Plaintiff should be chargeable for interest on that balance at the rate of 6% per annum from July 1, 1976, the approximate date on which the final sale of 1975 grain should have been made.
These findings are not seriously in dispute. Instead, wife presents arguments amounting to a claim that the District Court abused its discretion. She contends (1) that husband should be responsible for the accrued interest on the residence awarded to wife; (2) that the District Court abused its discretion by allowing husband to charge depreciation of farm machinery against his net income; and (3) that she was not given adequate access to husband’s income and expense records, which were submitted to the special master and to the District Court. We find these arguments to be without merit.
Wife argues that because husband failed to discharge all encumbrances against the residence awarded to her as he was required to do under the October 20, 1975 decree, he should have been held responsible for all accrued interest rather than merely 6 percent per annum on the balance found owing to the wife. This argument might have some force if the wife had come to the court with clean hands, but she did not. The District Court found that much of the delay in carrying out its original decree was due to the wife’s actions or inactions. While the husband was at fault for his failure to discharge the encumbrances against the wife’s residence out of the proceeds of the 1975 crops, the wife also disregarded the decree by failing to convey the rental property to husband as allocated by the decree and by collecting rents from the premises. Thus, we are satisfied that the District Court did not abuse its discretion in reaching an equitable solution. We stated in our previous opinion:
“It is well settled in Montana that a district court has far reaching discretion in resolving property divisions and its judgment will not be altered unless a clear abuse of that discretion is shown . . . The Criteria for reviewing the district court’s discretion is: Did the district court in the exercise of its discretion act arbitrarily without employment of conscientious judgment, or exceed the bounds of reason in view of all the circumstances.” Zell v. Zell, supra, 570 P.2d at 35.
Rather than having acted arbitrarily, the District Court must be commended for employing not only its conscientious judgment but also the patience of Job in attempting to protect the rights of the parties, notwithstanding the fact that both parties must share responsibility for refusing to carry out the terms of the original decree issued nearly five years earlier. The District Court granted wife several hearings and appointed an accountant as a special master to determine each party’s income and expenses for the years in question, an appointment which would have been unnecessary but for the intransigence of both parties in complying with the original decree. The District Court felt, and we agree, that there has been an unjustifiable delay in complying with its decree. Should there be any further delay, the District Court is, of course, empowered to utilize its contempt powers.
There being no abuse of discretion, the judgment is affirmed.
MR. CHIEF JUSTICE HASWELL, and JUSTICES HARRISON, SHEA and SHEEHY, concur. | [
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MR. JUSTICE HARRISON,
delivered the opinion of the court.
The State initiated this action on November 15, 1979, by filing a petition in Youth Court, Yellowstone County, alleging R.P.S. was a delinquent by having committed the crimes of deliberate homicide and sexual intercourse without consent. On November 26, 1979, counsel for R.P.S. filed a motion to suppress a confession made by R.P.S. and all physical evidence related to the confession. A hearing on the motion was held the next day. R.P.S. presented evidence in support of the motion including a psychological evaluation. The State was given time to present rebuttal testimony and was granted permission to have an independent examination of R.P.S. The State presented its rebuttal testimony on December 17, 1979. The testimony included a psychiatric evaluation of R.P.S.
The Youth Court, the Honorable Diane G. Barz presiding, subsequently entered an order granting the motion to suppress the confession and all physical evidence derived as a result of the confession. The court found the evidence should be suppressed because R.P.S. was incapable of making a knowing and intelligent waiver of his constitutional rights at the time of the confession and because law enforcement personnel had failed to comply with Montana’s Youth Court Act by obtaining a waiver of rights from R.P.S.’s parents prior to the confession. The State brings this appeal from the order of the Youth Court.
On November 14, 1979, R.P.S. went to the Yellowstone County sheriff’s office at the request of a sheriff’s officer. R.P.S. was 18 years old on that date, having turned 18 on October 19, 1979. The alleged offenses contained in the petition filed in this case occurred on October 9, 1979, before R.P.S. was 18.
R.P.S. arrived at the sheriff’s office at about 7:00 p.m. Between 7:00 p.m. and approximately 11:30 p.m. that evening, R.P.S. was interviewed several times by sheriff’s officers. He also took a polygraph examination. R.P.S. signed several waiver of rights forms and a consent form for the polygraph test during the evening. R.P.S. confessed to the crimes charged during the interview sessions. The following day he accompanied officers to the scene of the crimes and assisted them in locating several pieces of physical evidence connected with the crimes.
At the direction of Yellowstone County attorney Harold Hanser, the sheriff’s officers interviewing R.P.S. treated him as an adult. They did not, therefore, gain a waiver of rights form from his parents as required by the Montana Youth Court Act. See section 41-5-303, MCA. In fact, R.P.S.’s mother called the sheriff’s officer several times during the interview sessions. Each time officers told her she could not talk to R.P.S.
Two expert witnesses testified at the suppression hearing concerning psychological evaluations they had performed of R.P.S. Dr. Ned Tranel testified that R.P.S. was schizophrenic. Dr. Tranel stated that because of his mental condition, there was a high probability that R.P.S. could not understand the abstract terms contained in the Miranda warnings or understand the consequences of making statements to the officers after being advised of his rights. Dr. Tranel was of the opinion that R.P.S. was incapable of making a knowing and intelligent waiver of his constitutional rights at the time he allegedly did so.
Dr. Bryce Hughett also testified as to the mental condition of R.P.S. Dr. Hughett found no evidence of thought disorder present. He stated that R.P.S. was capable of understanding the Miranda warnings and of making a knowing and intelligent waiver of his rights at the time of the officers interviewed him.
The State raises the following issues on appeal:
1. Did the Youth Court err in finding that R.P.S. was incapable of voluntarily waiving his constitutional rights?
2. Did the Youth Court err in suppressing the confession and all evidence obtained as a result of the confession because law enforce ment personnel did not treat R.P.S. as a youth and obtain a waiver of rights from his parents?
Addressing the first issue, we note that the rules governing the review of a lower court’s determination of the voluntariness of a confession are well established in Montana. The issue of voluntariness is largely a factual determination for the trial court. The trial court’s judgment will not be disturbed on appeal unless it is clearly against the weight of the evidence. State v. Blakney (1979), 185 Mont. 470, 605 P.2d 1093, 1096; State v. Grimestad (1979), 183 Mont. 29, 598 P.2d 198, 202. As we stated in Grimestad:
“. . . the standard to be applied by the trial judge on a suppression question is ‘preponderance of the evidence’, but when the same question comes to us on appeal the credibility of the witnesses and the weight to be given their testimony is for the trial court’s determination and our review is limited to determining whether there is substantial credible evidence supporting the District Court’s findings.” 598 P.2d at 203, 36 St.Rep. at 1251.
Under this standard, we must examine the record for substantial credible evidence to support the trial court’s decision. The evidence that supports the decision is found mainly in the testimony of Dr. Tranel. Dr. Tranel testified that R.P.S. suffered from a severe emotional disturbance technically diagnosed as schizophrenic reaction, acute undifferentiated type. Dr. Tranel stated one consequence of R.P.S.’s emotional disturbance was a severely impaired ability to form logical conclusions, understand cause-effect relationships and concentrate. Dr. Tranel said this resulted in R.P.S.’s normal functioning being similar to that of a person in a dream. A second feature of R.P.S.’s emotional disturbance, according to Dr. Tranel, was a disconnection between his emotion and the idea associated with it. As an example of this feature of R.P.S.’s disorder, Dr. Tranel said R.P.S. may not have the unpleasant feeling normally associated with .experiencing an unpleasant event. Beyond the schizophrenic condition, Dr. Tranel testified that R.P.S. had a low level of ego strength. The doctor said this meant that R.P.S. would “come apart quite easily” under stress. Based on this diagnosis, Dr. Tranel stated he did not think R.P.S. could have understood the Miranda warnings given to him, especially at the end of over four hours of interrogation.
There is conflicting evidence on the record. Dr. Hughett testified that R.P.S. showed no signs of schizophrenia when he interviewed him. Dr. Hughett also stated that the results of one of the tests administered by Dr. Tranel indicated R.P.S. was consciously or unconsciously attempting to make his mental condition appear worse than it was.
In resolving this conflict in the testimony, the trial court assessed the testimony of Dr. Hughett as follows:
“Dr. Hughett, through his testimony, failed to convince the Court that the youth in question was not suffering from any mental defect, which would have impaired his ability to make an intelligent, voluntary waiver of his rights.”
As pointed out above, the determination of the credibility of the witnesses is for the trial court.
Thus, the following situation exists here. Two experts testified as to the mental condition of R.P.S. Their testimony conflicted. The trial court found the testimony of the expert who found R.P.S. capable of voluntarily waiving his rights unconvincing and based its decision on the testimony of Dr. Tranel set out above. We have reviewed Dr. Tranel’s testimony. It is very thorough and definitely supports the conclusion that R.P.S. was incapable of voluntarily waiving his constitutional rights. Further, according to the trial court, Dr. Tranel’s testimony is more credible than Dr. Hughett’s testimony. Dr. Tranel’s testimony, therefore, represents substantial credible evidence on the record to support the decision of the trial court. As such, we affirm the order of the trial court suppressing R.P.S.’s confession and all physical evidence obtained as a result of the confession because R.P.S. did not make a voluntary waiver of his rights.
Having determined the evidence in question must be suppressed because R.P.S. did not voluntarily waive his constitutional rights, it is unnecessary to consider the second issue raised by the State.
Affirmed.
MR. CHIEF JUSTICE HASWELL, and JUSTICES DALY, SHEA and SHEEHY, concur. | [
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MR. JUSTICE HARRISON
delivered the opinion of the Court.
This is an appeal arising out of defendant’s conviction of the crimes of attempted deliberate homicide and aggravated burglary in the District Court of the Thirteenth Judicial District, in and for the County of Yellowstone, the Honorable Charles Luedke presiding.
The facts as presented by the parties upon appeal are the following: On the night of June 26, 1978, Ms. Joyce Ann Lamb awoke in the bedroom of her Billings, Montana, residence to find a man standing beside her in the dark. She immediately screamed at the sight of the man, and the man, in response also screamed. The man then proceeded to her bed and positioned himself so that he was straddled over her. In an effort to seek the help of her neighbors, Ms. Lamb began hitting her hand against the wall. The man then struck her and continued striking her for approximately one minute, at which time he raised up, backed against a closet, stood and looked at her, and finally turned and ran out of the room. The man apparently had difficulty in leaving the residence, because Ms. Lamb heard him hit something as he went through the back door. At this point, Ms. Lamb realized that she was bleeding. She left her house, sought help from her neighbors, and was taken to the hospital, where it was determined that she suffered 11 stab wounds in total.
Sometime later, an officer of the Billings Police Department stopped the defendant after a tip had been obtained from one of Ms. Lamb’s neighbors that a man had just been seen peaking into her windows. The defendant was asked for his identification, and, after some brief questioning, was released. At the time of the stop, defendant had a knife attached to his belt. Defendant’s residence was later searched by the police pursuant to defendant’s consent. Upon the basis of the search, defendant was taken into custody and advised of his constitutional rights. At the police station, defendant gave a statement to the police which reflected that he had been at Ms. Lamb’s residence that night, but that he could not remember hitting her or stabbing her, or, for that matter, having any involvement in the crime. Defendant also stated that he did have a knife, that he always carried it with him, and that he washed it off and placed it in a drawer underneath the television after returning home that night.
Defendant was charged by information on July 5, 1978 with the crimes of attempt (deliberate homicide) and aggravated burglary. Defendant entered a plea of not guilty to both charges, and trial was held on February 26, 1979. The jury returned a verdict of guilty with respect to both charges, and defendant was sentenced to a 50 year sentence for the crime of attempt and a 20 year sentence for the crime of aggravated burglary, said terms to be served concurrently. From these judgments, defendant appeals.
Defendant originally raised two issues for our consideration upon this appeal. However, during oral argument, counsel for defendant admitted that one of these issues had been resolved by this Court in a prior decision. Thus, we find it only necessary to consider the remaining issue — whether the trial court erred in giving the following instruction to the jury:
“If you find that the defendant, Dale A. Sheriff, attempted to commit a homicide and no circumstances of mitigation, excuse or justification appear, then you may infer that the attempted homicide was committed knowingly or purposely.”
At the outset, we note two observations with respect to the above instruction. The first is that the instruction goes only to the crime of attempted deliberate homicide and not to the crime of aggravated burglary. Defendant’s conviction of the latter charge must, therefore, stand. The second is that we have previously decided in another case that an instruction identical to the one challenged here was not error in the context of other instructions given. See, State v. Coleman (1979), 185 Mont. 299, 605 P.2d 1000. Although Coleman may therefore have persuasive application to this case, there still remains the need for this Court to independently determine the effect of the challenged instruction in the context of the instructions given here.
Defendant’s sole contention upon this appeal is that the instruction, on the basis of Sandstrom v. Montana (1979), 442 U.S. 510, 99 S.Ct. 2450, 61 L.Ed.2d 39, has the effect of relieving the State of its burden to prove each and every element of the offense beyond a reasonable doubt or shifting the burden of proof to the defendant.
The threshold inquiry in ascertaining whether the State has been relieved of its burden of proof, according to the United States Supreme Court in Sandstrom, requires “careful attention to the words actually spoken to the jury . . . for whether a defendant has been accorded his constitutional rights depends upon the way in which a reasonable jury could have interpreted the instruction.” Sandstrom, 99 S.Ct. at 3453, 61 L.Ed.2d at 45. In Sandstrom, the jury was instructed that “the law presumes that a person intends the ordinary consequences of his voluntary acts.” This instruction related to a presumption of law and was mandatory by its very terms. There was no discretion allowed on the part of the jurors. In contrast, the jurors were told here that they “may infer” a material element of the crime, namely that the attempted homicide was committed knowingly or purposely. This instruction referred to an inference of fact and was, by its express terms, permissive. Ulster County Court v. Allen (1979), 442 U.S. 140, 99 S.Ct. 2213, 60 L.Ed.2d 777. The jurors were given discretion with respect to the finding of intent and were free to follow or not to follow the instruction. The language of the instruction, did not involve either a conclusive or burden-shifting presumption, as was involved in Mullaney v. Wilbur (1975), 421 U.S. 684, 95 S.Ct. 1881, 44 L.Ed. 2d 508; Sandstrom, supra; or Morissette v. United States (1952), 342 U.S. 246, 72 S.Ct. 240, 96 L.Ed. 288. Nor did the instruction have the effect of allocating to the defendant some part of the burden of proof that properly rested on the State throughout the trial.
That the burden remained on the State in proving the elements of the offense is made clear by the other instructions given by the trial court in this case. On appeal, we consider the instructions as a whole. State v. Farnes (1976), 171 Mont. 368, 558 P.2d 472.
“The whole of the law on a subject cannot be given in one instruction. In determining the effect of given instructions, all instructions must be considered as a whole and if they fairly tender the case to the jury, the fact that one or more instructions, standing alone, is not as full or accurate as it might have been is not reversible error. [Citations omitted.]” State v. Caryl (1975), 168 Mont. 414, 430, 543 P.2d 389, 398.
Here, Instruction No. 21 stated that, in order to sustain the charge of attempted deliberate homicide, the State had to prove intent as one of the elements of the offense. Instruction No. 2 provided that the defendant was afforded a presumption of innocence and that the burden of proof was upon the prosecution to establish every material allegation of the information beyond a reasonable doubt. Instruction No. 5 reiterated the defendant’s presumption of innocence. Instruction No. 10 stated that the defendant could not be convicted on conjecture, probability or suspicion, but rather only on evidence which established his guilt beyond a reasonable doubt. Instruction No. 12 stated in pertinent part:
“In order to prove the charge of COUNT I: ATTEMPT (FELONY) and COUNT II: AGGRAVATED BURGLARY as alleged in the Information, the State must prove beyond a reasonable doubt that each element of the offense, all necessarily included offenses, was committed or perpetrated knowingly by the defendant as a voluntary act.
“Purpose or knowledge are manifested by the circumstances connected with the offense and need not be proved by the direct evidence but may be inferred from acts, conduct, and circumstances appearing in evidence.
“There are two classes of evidence recognized and admitted in courts in the State of Montana. One is ‘direct evidence,’ the other is ‘circumstantial evidence.’ In ‘direct evidence’ the witnesses testify directly of their own knowledge of the main fact or facts to be proved, while ‘circumstantial evidence’ is the proof of certain facts and circumstances in a given case from which the jury may infer other connecting facts which usually and reasonably follow according to the common experiences of mankind . . .” (Emphasis added.)
Instruction No. 7 also provided:
“Where the case of the State rests substantially or entirely on circumstantial evidence, you are not permitted to find the defendant guilty of any crime charged against him unless the proved circumstances are not only consistent with the theory that the defendant is guilty of the crime, but cannot be reconciled with any other rational conclusion and each fact which is essential to a complete set of circumstances necessary to establish the defendant’s guilt has been proved beyond a reasonable doubt.
“Also, if the evidence, as to any particular count, is susceptible of two reasonable interpretations, one of which points to the defendant’s guilt and the other to his innocence, it is your duty to adopt that interpretation which points to the defendant’s innocence, and reject the other which points to his guilt. If, on the other hand, one interpretation of the evidence appears to you to be reasonable and the other interpretation unreasonable, it would be your duty to accept the reasonable interpretation and to reject the unreasonable.”
Defendant submits, however, that these instructions were nevertheless inadequate. He argues that, while the jury was instructed that they could infer intent from the acts, conduct, or circumstances appearing in evidence, the jury should have also been instructed that they need not make such inference. Apparently, defendant’s argument is that this qualification should have been included as an addendum to the challenged instruction or submitted as an entirely separate instruction. In support defendant relies on State v. Bryant (Tenn.1979), 585 S.W.2d 586; and State v. Roberts (1977), 88 Wash.2d 337, 562 P.2d 1259.
We disagree.
In Roberts an instruction was given to the jury creating a presumption of second-degree murder where no excuse or justification appeared. The court held in that case that, where an instruction was silent as to how the presumption might be overcome, the jury should be further instructed regarding the clear operation of the presumption. Roberts, 562 P.2d at 1261-62. In Bryant an instruction was given to the effect that, if a person entered the premises of another disguised or in mask, the jury could consider that act as prima facie evidence of the person’s intent to commit a felony. The court held that the inclusion of that instruction was error where no express instructions were given as to the effect of the inference. Bryant, 585 S.W.2d at 590.
We find here that there was no duty on the part of the trial court to submit any qualifications or additions to the instructions which were given, because the terms of the instructions made clear the effect and operation of the inference. As such, this case is distinguishable. Bryant and Roberts do not control. The jury was told in very explicit terms by Instruction Nos. 7 and 12 what kind of evidence could be considered in making the inference and what kind of logical steps were permissible to take. Instruction No. 12 allowed the jury to infer purpose or knowledge from circumstantial evidence submitted by the State. Instruction No. 7 further directed the jurors that, where circumstantial evidence is susceptible of two reasonable interpretations, and one of the interpretations points to defendant’s innocence, they should find the defendant innocent. These instructions, taken together with other instructions regarding defendant’s presumption of innocence and the State’s burden of proof, made clear the operation and effect of the inference.
We find, therefore, that the trial court properly instructed the jury and that there was no error. The language of the challenge instruction was permissive. The words “may infer” connoted in plain terms and in plain understanding to the jurors that they had discretion to follow or not to follow the instruction. Further, the operation and effect of the inference was clearly explained to the jury. The instruction did not have the effect of allocating to the defendant some part of the burden of proof that properly rested on the State throughout the trial. Accordingly, the judgment of the District Court is affirmed.
MR. CHIEF JUSTICE HASWELL and JUSTICES DALY and SHEEHY, concur.
MR. JUSTICE SHEA, dissents. | [
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MR. JUSTICE SHEEHY,
delivered the opinion of the court.
This is a quiet title action brought in the District Court, Eleventh Judicial District, Flathead County, by Charlotte Taylor Price against Rudolph L. Zunchich and Raymond E. Bauer. Trial was held in District Court without a jury, and judgment was rendered against Price and in favor of Bauer and Zunchich. Price appeals from those portions of the judgment which quiet title to the disputed land in favor of Bauer and Zunchich and which order Price to remove a fence she had built on that land.
This cause involves two tracts of property owned by the respective parties and located on Lake Five, near West Glacier, Montana. The Bauer-Zunchich tract is immediately north of the Price tract. The Bauer-Zunchich chain of title specifies the common boundary as “East ... to a point on the Westerly boundary of the county road.” The Price chain of title calls out the common boundary as “northeasterly 620 feet.”
Both tracts can be traced back to a common title. After acquiring Government Lot 6 in 1928, Fred and Evelyn Parker began selling portions of that Lot using Lake Five as the west boundary and the county road as the east boundary. The descriptions in all the various deeds begin at the northwest corner of Lot 6 and call out the westerly boundary of Lake Five in specific footage.
On April 8, 1940, the Bauer-Zunchich tract was conveyed by the Parkers to John Sloan. By way of mesne conveyances, the BauerZunchich tract was transferred to Charles Corbett, who in turn sold the tract to Bauer and Zunchich on October 29, 1957. The Price tract, on the other hand, was conveyed by quitclaim deed from Evelyn Parker, then the sole owner, to C.W. McKerr in 1945. The tract eventually was distributed in probate to Price on October 3, 1967.
At some point, Price decided to build a new home on her tract. Standing at a point on the shore of Lake Five which all parties agree to be a common point, Price took a compass reading which allegedly showed Zunchich’s improvements encroached upon Price’s property. Price retained a registered land surveyor, M.L. Haiges, who prepared a certificate of survey. Rather than using the northeast course specified in the Price chain, Haiges used a course of “East 620 feet, more or less, from the point of beginning” which is specified in the Bauer-Zunchich chain. If the northeast course is used, the description in the Price deed will not close.
After Haiges finished his survey, Price built a fence within the property claimed by her and south of the boundary line as established by Haiges. This was done without the consent of Bauer and Zunchich and for the purpose of claiming ownership of the property.
Using the Haiges survey, there were still encroachments by Zunchich’s improvements. Negotiations between Price, Bauer and Zunchich failed. Consequently, in December 1976, Price filed this cause to determine the proper boundary line, to quiet title to the disputed land and to force the removal of the alleged encroachments. The answer of Bauer and Zunchich also sought title to the disputed land and sought damages for the fence built by Price.
Three separate surveys were conducted prior to trial, one by Haiges for Price, one by Lewis Fontana for Bauer and Zunchich, and one by Dean K. Marquardt for Mrs. Corbett. All three surveys produced a different result.
The trial began September 5, 1978, and was completed on November 21, 1978. On February 16, 1979, the District Court filed the findings and conclusions. Five days later, the District Court entered its judgment, and the notice of entry of judgment was given the following day.
The District Court found the Fontana survey reflected the true boundary line. Accordingly, title to the disputed land was quieted in Bauer and Zunchich. The judgment also ordered Price to remove a portion of the fence she had built on the disputed land.
On March 12, 1979, Price filed motions (1) for an order vacating and amending the findings, conclusions and judgment of the District Court; (2) for a new trial; (3) for permission to present additional testimony by registered surveyors; and (4) for a nunc pro tunc order finding the Haiges survey as establishing the proper common boundary line. A hearing on the motions was set for April 20, 1979.
On March 23, 1979, the District Court by its own motion vacated the judgment of February 21 and the findings and conclusions supporting that judgment pending the hearing on Price’s motions. In a memorandum appended to the order, the District Court manifested its intention to protect the parties’ rights to appeal. The District Court made it clear that no judgment should be deemed to have been entered in this cause.
On April 20, 1979, the District Court entered an order denying all of Price’s motions. The order ended by stating, “the parties’ individual rights for notice of appeal . . . shall follow the judgment and notice rendered and entered by the Court this date.” Price’s notice of appeal was given on May 4, 1979.
The general issue raised by Price is whether the District Court’s judgment is supported by substantial evidence. Specifically, Price objects to the District Court’s rejection of the Haiges survey, allowing Zunchich and Bauer to maintain improvements on the disputed land and the order requiring removal of Price’s fence.
We do not have jurisdiction to determine this issue. Price’s notice of appeal was not timely, and Price did not take any action which would suspend the time limits for an appeal. Rule 6(c), M.R.Civ.P., and Rule 5, M.R.App.Civ.P. Consequently, Price’s appeal must be dismissed.
Under Rule 5, M.R.App.Civ.P., the time for filing a notice of appeal may be suspended by certain timely post-trial motions. Here, however, Price’s post-trial motions were without effect to extend the time limits for a notice of appeal. Motions to amend the findings and judgment and for a new trial would be barred by the ten day limitation on such motions. Rules 52(b), 59(b) and (g), M.R.Civ.P. The notice of entry of judgment was filed here on February 22, 1979, and Price’s motions were filed on March 12, 1979. Additionally, Price did not assert the proper grounds for a new trial in a bench trial. Sections 25-11-102 and 25-11-103, MCA.
A District Court may also suspend the time for a notice of appeal up to an additional thirty days upon a showing of excusable neglect. Rule 5, M.R.App.Civ. P. Here, however, Price made no motion alleging excusable neglect, no showing of such neglect and no showing an injustice would otherwise result. Moreover, even assuming excusable neglect here, Price’s time for appeal ran out on April 26, 1979, sixty-three days from February 22, 1979. Yet, Price mailed her notice of appeal on May 4, 1979, and under Rule 5(b), M.R.Civ.P., service by mail is complete upon mailing.
On March 23, 1979, the District Court vacated its judgment pending the hearing on Price’s post-trial motions. Since Price’s motion was without effect, the District Court had no power to enter the above order. A District Court may amend judgments at any time to make them express what was actually decided. However, once a judgment has been rendered as intended, it is final and must stand until corrected by some statutory method, generally by a timely motion for new trial or an appeal. State ex rel. Smith v. District Court (1919), 55 Mont. 602, 605-06, 179 P. 831, 833.
We stress here that the time limits for an appeal are mandatory and jurisdictional. An appellant has a duty to perfect an appeal in the manner and within the time limits provided by law. Absent such compliance, this Court does not acquire jurisdiction to entertain and determine an appeal. Snyder v. Gommenginger (1979), 183 Mont. 375, 600 P.2d 171, 172-73.
Bauer and Zunchich have moved under Rule 32, M.R.App.Civ.P., for damages to be awarded in their favor and against Price. We find this attempted appeal to have been taken in good faith although not timely. Consequently, we will not assess damages for a frivolous appeal.
In passing, we note that Price could not be granted any relief even if we had jurisdiction to entertain this appeal.
The District Court was not bound to establish the boundary line as shown by the Haiges survey. The conflicting testimony of Haiges and Fontana created a question of fact for the District Court, the trier of fact here, and it was within the District Court’s province to resolve that issue against Haiges so long as its choice was supported by substantial credible evidence. Rule 52(a), M.R.Civ.P.
The District Court was in a peculiarly advantageous position to judge the effect of the testimony of the witnesses. The surveyors gave the District Court first impressions by pointing out how a definite location of the proper boundary line could be determined. Before the District Court’s presumptively correct judgment can be impeached, it must clearly be shown some fact was arbitrarily determined by the District Court. Stephens v. Hurly (1977), 172 Mont. 269, 279, 563 P.2d 546, 552. This was not done here.
Price having failed to file a timely notice of appeal from the decision of the District Court, Eleventh Judicial District, Flathead County, granting judgment in favor of Bauer and Zunchich:
IT IS HEREBY ORDERED:
1. Price’s appeal is dismissed under Rule 5, M.R.App.Civ.P.
2. This Court being satisfied from the record and the presentation of the appeal that the same was taken in good faith although not timely, the motion of Bauer and Zunchich for damages to be awarded in their favor under Rule 32, M.R.App.Civ.P., is denied.
MR. CHIEF JUSTICE HASWELL, and JUSTICES DALY, HARRISON and SHEA, concur. | [
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MR. JUSTICE DALY
delivered the opinion of the Court.
This is an appeal by the employer, H. C. Smith Construction Co., and compensation carrier, Argonaut Insurance Co., from the findings of fact, conclusions of law, and judgment of the Montana Workers’ Compensation Court, the Honorable William E. Hunt presiding, entered on behalf of claimant Bonnie J. Gordon upon a finding that the death of her husband, John N. Gordon, arose out of and within the course of his employment.
John N. Gordon, age 33, was employed as an electrician by H. C. Smith Construction Co. on various missile sites in the area of Den-ton, Montana. During the fourteen months of his employment by H. C. Smith Construction Co., his permanent residence was at Butte, Montana, where his wife, the claimant in this case, and four minor children reside. From March 20, 1978, to the date of his death, May 1, 1978, Gordon’s temporary residence was the Brand T Motel in Lewistown, Montana. On May 1, 1978, he was still registered as a guest at the motel and was sharing a room with a fellow employee whose permanent residence was also in Butte.
On Sunday, April 30, 1978, Gordon returned to the motel in Lewistown after spending the weekend with his family in Butte. On the morning of May 1, 1978, he drove his pickup truck from Lewistown to the jobsite approximately 24 miles northeast of Den-ton, Montana, where he was working a 7:00 a. m. to 5:30 p. m. shift.
The events that occurred on May 1, the day Gordon was killed, are summarized in the Workers’ Compensation Court’s findings of fact:
“10. John N. Gordon was an electrician and he worked on May 1, 1978 with fellow electricians James Peters and James Walding. The employees sometimes got off work early and on May 1, 1978 Gordon, Peters and Walding got off no later than 5:30 p. m. and possibly earlier. James Peters and James Walding left the job site in a pickup truck belonging to James Peters. John N. Gordon left the job site alone in his own pickup. From the job site, the three drove the approximate 24 miles to Denton, Montana, where they met at the Denton Bar. They arrived at the Denton Bar no later than 6:00 p. m. and possibly as early as 5:30 p. m.
“11. At the Denton Bar, Gordon, Peters and Walding joined other fellow employees in drinking and playing pool. They continued in these activities for some four to four and one-half hours. No food was served in the bar, other than snacks, and the three employees did not eat a meal at the bar or elsewhere.
“12. At about 10:00 p. m. May 1, 1978, Gordon, Peters and Walding left the Denton Bar together. Gordon did not leave in his own pickup in which he had come, but accompanied Peters and Walding in Peters’ pickup. From the Denton Bar the three traveled west on State Primary Highway 81. About 2.3 miles west of Den-ton, Peters’ pickup went off the road and John N. Gordon and James Walding were instantly killed. James Peters was slightly injured and survived.
“13. A highway patrolman and a Fergus County deputy sheriff investigated the one-car accident and the patrolman determined that the accident resulted from speed and alcohol involvement. Blood alcohol tests were taken and the blood alcohol content on Walding was found to be .12, and on Peters .06. The blood sample on John N. Gordon leaked and no result was obtained.” (Emphasis added.)
The terms of John N. Gordon’s employment were controlled by a union contract of the Great Falls Division, Montana Chapter, National Electrical Contractors Association and Local Union No. 122, International Brotherhood of Electrical Workers, Great Falls, Montana. He was earning in excess of $500 per week, not including overtime. In addition to his wages, he received a $22 per day subsistence allowance for working at the job site more than 54 miles from Great Falls.
Article III, Section 18, of the Union Agreement states:
“No travel time or travel allowance shall be required of the Employer before or after working hours to any employee for traveling to or from any job located within a four (4) mile radius of Second Avenue at 15th Street North, Great Falls, Montana, plus the entire fenced boundaries of Malmstrom Air Force Base, immediately east of Great falls, and all of Great Falls International Airport, when employees are ordered to report on the job.
“On jobs between the perimeter of the four (4) mile radius and fifty-four (54) road miles from Second Avenue at 15th Street North, Great Falls, Montana except Malmstrom Air Force Base and Great Falls International Airport, employees shall be allowed a travel allowance as follows: Effective 3-1-78 twenty-two cents ($.22); Effective 3-1-79 twenty-three cents ($.23) per road mile from the perimeter of the four (4) mile radius circle each way, per day worked.
“On jobs in excess of fifty-four (54) road miles from Second Avenue at 15th Street North, Great Falls, Montana, the employee shall receive twenty-two dollars ($22.00) effective 3-1-78 and twenty-three dollars ($23.00) effective 3-1-79 subsistence per day worked in lieu of any travel time or travel allowance . . .
“The employees will transport their own tools and furnish their own transportation and travel on their own time reporting to the job and put in eight (8) hours on the job . . .
“On jobs having multiple jobsite locations, the Employer shall designate the location to which each workman shall report and each workman shall report on his own time and in his own transportation.” (Emphasis added.)
Bonnie J. Gordon, widow of the decedent, filed a claim for death benefits under the provisions of the Workers’ Compensation Act on behalf of her children and herself. After Argonaut Insurance Co. summarily denied her claim on November 21, 1978, Mrs. Gordon petitioned the Workers’ Compensation Court for an order granting her claim. After a hearing on February 27, 1979, the court issued findings of fact and conclusions of law and judgment on July 6, 1979, which held that decedent’s death arose out of and in the course of his employment and that claimant and her four minor children were entitled to workers’ compensation death benefits.
Appellants present two substantive issues on appeal:
1. Did the payment to decedent of $22 per day “subsistence” according to the labor contract under which he was employed constitute travel pay so as to entitle claimant to worker’s compensation benefits under an exception to the “going and coming” rule?
2. Did John N. Gordon “deviate” from the course of his employment by stopping at the Denton Bar for approximately four hours and by traveling in a direction which was opposite to that of his Lewistown motel room when he left the bar and was killed in an automobile accident?
We have in past cases explained the foundation principles that justify the application of an exception to the “going and coming” rule. The “going and coming” rule states that travel by an employee to and from work is generally regarded as outside the course and scope of employment. The leading Montana cases establishing an exception to this rule are McMillen v. McKee & Co. (1975), 166 Mont. 400, 533 P.2d 1095, 1098, and Ellingson v. Crick Co. (1975), 166 Mont. 431, 533 P.2d 1100, 1101. Theexcep tion and its rationale are summarized in McMillen, 533 P.2d at 1098, quoting 1 Larsen, Workmen’s Compensation Law, § 16.30:
“However, in the majority of cases involving a deliberate and substantial payment for the expense of travel, or the provision of an automobile under the employee’s control, the journey is held to be in the course of employment. This result is usually correct because when the subject of transportation is singled out for special consideration it is normally because the transportation involves a considerable distance and therefore qualified under the rule herein suggested: that employment should be deemed to include travel when travel itself is a substantial part of the service performed. The sheer size of the journey is frequently the principal fact supporting this conclusion ...”
The facts in McMillen were almost identical to those in this case. Employees were paid a travel allowance based on a sliding scale, not an actual mileage rate, and the parties had referred to the pay as “travel pay or subsistence” while here the reference is to “subsistence ... in lieu of . . . travel allowance.” In both cases the payment is for travel, no matter what the parties may have selected to call it. In other words, the superficial distinctions in the contract or the labels attached to benefits contained therein are not the primary consideration. Because the union contract singles out for special consideration a travel allowance and it is .paid as an incentive to get men onto jobs and results in a reasonable benefit to an employer, then while the employee is “traveling” en route to or from work, any injury is within the exception and arises out of and in the course and scope of employment.
In determining that the injuries in Ellingson arose out of and in the course of employment, we refused to distinguish McMillen on the basis of differences in the contractual methods of computing the respective travel allowances, stating:
“In McMillen, the computation was predicated upon the miles actually traveled by the individual employee, while here it is based on the distance from the job site to the nearest county courthouse. The disparity results in McMillen employees receiving varying amounts of compensation depending on the distance traveled, while the employees here all received a uniform amount.
“We cannot see where that distinction varies the applicability of the test enunciated in McMillen. The fact that the travel allowance here was based on a distance other than mileage between residence and job site is not important. The union contract singled out transportation as the subject of a specific allowance. When transportation is thus singled out in the employment contract, the travel to and from work is brought within the course of employment. Injuries sustained en route are therefore compensable. McMillen, supra; 1 Larsen, Workmen’s Compensation Law, § 16.30.” 533 P.2d at 1101. (Emphasis added.)
Appellant insurance carrier, relying on Majors v. Lewis and Clark County (1921), 60 Mont. 608, 201 P. 268, claims that subsistence has a restricted meaning, limited to support. Majors was not a workers’ compensation situation and did not involve the use of the word “subsistence” when it is clear from the context that both parties meant travel pay. In Majors the issue was the interpretation to be given to words in carefully drafted state and federal legislation. Federal law provided the United States would pay for the “subsistence” of federal prisoners in local jails and also pay fifty cents per month per prisoner for the use and upkeep of the jail.
The test to be applied to determine coverage under the exception to the rule really becomes a simple matter of substance over form. In this instance there can be no question that the underlying consideration singled out in the contract was travel and coverage is proper.
Argonaut further contends that John Gordon’s death is not compensable because he stopped at Denton for a time and after-wards proceeded toward Stanford and not Lewistown where he maintained a motel room by the month.
It is uncontradicted from the testimony at the hearing that it was John Gordon’s custom and habit to often stay in Stanford with fellow employees instead of returning each night to Lewistown. It was also proved that there were absolutely no company restrictions in this regard and he would be covered heading for either Stanford or Lewistown. Roger Wingard testified that the company did not care where its employees spent the night, be it Stanford, Lewistown or “Timbuktu.” All the company cared about was that they show up at work on time and put in a full day.
The language of Montana cases is clear that travel to and from work is covered and that injuries sustained en route are compensable. The evidence supports the conclusion that John Gordon was traveling from work and was killed en route to Stanford where he was going to spend the night as he had done in the past. There was no requirement either oral or written that he go to Lewistown. To carry Argonaut’s argument to its logical conclusion, if John Gordon were driving to work the next morning from Stanford, and he was killed before he reached Denton then his death would not be compensable.
Argonaut produced nothing of substance to refute the fact that John Gordon was proceeding to Stanford for the night as was his custom at times. A “white horse witness,” found by a company official but never identified or produced at the hearing, purportedly told the official that he, the witness, had overheard a conversation of Gordon, Peters and Walding outside the Denton Bar discussing which one would drive to Stanford to get a steak. This testimony by the company official, being hearsay upon hearsay, is questionable in any light; but the insurer’s inability to identify or produce or excuse nonproduction of the first hearsay conduit casts further doubt on the probative value of the testimony. The alleged statement supposedly refers to getting a steak at the “Sundown Inn” at Stanford, implying an intent to go out for dinner. This is not relevant in the first instance because even if that were true, Gordon was at the same time traveling while en route from work.
The question of deviation raised by the insurer is, of course, its to prove. Steffes v. 93 Leasing Co. (1978), 177 Mont. 83, 580 P.2d 450, 454, citing Blair, Reference Guide to Workmen s Compensation Law, § 9.25. The appellants mixed alcohol into the proceedings; however, if this was relevant, it would not be a major concern as no one was intoxicated. As a practical matter, Walding had 0.12 percent blood alcohol, which only said he has a legislative presumption of under the influence since the legislature selected to reduce the blood level of presumption from 0.15 to 0.10 several years ago. Peters had 0.06 percent blood alcohol, which does not give rise to any presumption and which, as a practical matter, reflected very little consumption. There was no reading obtained on John Gordon and no evidence of overindulgence on his part.
Even if there were evidence that Gordon was legally intoxicated at the time of his death, which we emphasize there was not, we have held that that fact alone does not establish a deviation from the course of employment. Steffes v. 93 Leasing Co., supra. In any case, it cannot come as a great shock to the employer or be unforeseeable by the insurer that working men away from their homes and families may visit a saloon for a beer after work. Again, in arguing that stopping at the Denton bar constitutes a disqualifying deviation, the insurer is attempting to interject fault into a no fault system.
Workers’ compensation legislation is the original no fault insurance. If an employee performs his job negligently and is killed as a result, his death is compensable. If a fellow employee negligently causes another employee’s death, that is also compensable. The risk insured here, i. e., the possibility that a worker may be involved in a fatal automobile accident while en route from work, is exactly the risk contemplated by McMillen and Ellingson. What would the insurer here argue if John Gordon had stopped to eat his supper and then resumed his journey and been killed?
Argonaut’s contention of deviation could only be considered if John Gordon had been killed in the Denton Bar, but that question is not before this Court. Rather, this case falls squarely within the McMillen holding and presents no true deviation question. The risk of travel is what was insured against, and when John Gordon was killed while traveling from his job, his death was compensable.
Assuming, arguendo, that the stop at Denton did present a true deviation question relevant in some way to our case, i. e., what is the conduct of a reasonable man, in this case a boomer electrician, miles out into a rural area, without his family, when it concerns stopping at Denton, Montana, for a beer and a game of pool after completing his work day? It could be said here that the conduct comported with the general requirements for all persons as stated by Professor Larsen:
“An identifiable deviation from a business trip for personal reasons takes the employee out of the course of his employment until he returns to the route of the business trip, unless the deviation is so small as to be disregarded as insubstantial. In some jurisdictions, the course of employment is deemed resumed if, having completed his personal errand but without having regained the main, business route, the employee at the time of the accident was proceeding in the direction of his business destination. If the main trip is personal, a business detour retains its business character through the detour.” 1 Larsen, Workmen’s Compensation Law, § 19.00.
See also, Mohawk Rubber Co. v. Claimants in Death of Cribbs (1968), 165 Colo. 526, 440 P.2d 785; Adams v. U.S.F.&G. Co. (1971), 125 Ga.App. 232, 186 S.E.2d 784.
The judgment of the Workers’ Compensation Court is affirmed.
MR. CHIEF JUSTICE HASWELL and JUSTICES HARRISON, SHEA and SHEEHY concur. | [
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MR. CHIEF JUSTICE HASWELL
delivered the opinion of the Court.
This action was commenced in the Cascade County District Court by plaintiff-respondent Mary Toeckes. She sought actual and punitive damages for an alleged malicious removal of a gate and approach to state property which she holds as a cotenant with her sister, Andrea Baker, and for a deprivation of the use of the property through intimidation. The District Court entered judgment against defendant Ronald Baker, Mrs. Toeckes’ brother-in-law, and awarded actual damages of $230 and punitive damages of $ 1,000. Ronald Baker appeals.
Mary Toeckes and Andrea Baker inherited a leasehold interest in 80 acres of state grazing land as tenants in common upon the death of their mother in 1969. The land was subleased to Dan Engelmeier until October 15, 1975. The parties could not reach an agreement concerning the use of the leasehold interest after the sublease terminated.
Appellant’s counsel aptly describes this action as a “Hatfield-McCoy dispute.” It is apparent from the record that Mary Toeckes and Ronald Baker have not been able to get along since 1969. Mrs. Toeckes testified at trial that Mr. Baker had threatened bodily harm to herself and Dan Engelmeier. This testimony was corroborated by Mr. Engelmeier, who also testified as did Mrs. Toeckes, that Ronald Baker had threatened to shoot any livestock placed on the leased land. Mr. Engelmeier leases other farmland from Mrs. Toeckes and has at times, assisted her in farm work since her husband’s death in 1975.
Prior to May, 1977, there was no direct access to the property from the adjacent county road, and in order to enter the property one was required to drive past Mr. Baker’s home or across Mr. Engelmeier’s land. Because of the strained relations between Mrs. Toeckes and Ronald Baker, she contacted Cascade County in order to have an approach constructed to give her direct access to the property. She did not communicate with her cotenant, Andrea Baker, concerning the installation.
The approach was constructed by Cascade County and Dan Engelmeier installed a gate on behalf of Mary Toeckes in May, 1977. Ronald Baker saw the trucks and men installing the approach. He and his wife then went to Helena to discuss the installation with the State Department of Lands. Mrs. Baker testified that she and her husband were told by a person of unknown professional status or authority that a cotenant has no authority to install an approach unless the other tenant consents. Allegedly on the basis of this conversation, Mr. Baker, acting on behalf of his wife, proceeded to tear out the gate and remove the approach with a tractor and loader. This act prompted Mrs. Toeckes to commence this litigation.
The District Court found that: (1) Defendant’s threats to shoot Mary Toeckes, Dan Engelmeier, and any livestock placed on the property put the plaintiff in fear and prevented her from using her interest in the land; (2) Ronald Baker’s action in removing the gate and approach was willful and malicious and was prompted by an intent to deprive the plaintiff of the use and enjoyment of the leasehold; and (3) the plaintiff was entitled to actual damages of $230 as a result of defendant’s conduct. The District Court also awarded $ 1,000 punitive damages.
The issue on appeal is whether there is substantial evidence to support the findings of fact and conclusions of law of a willful and malicious deprivation of the use of the property as well as the amount of damages awarded.
With regard to the standard of review, this Court has repeatedly stated it will not overturn findings of fact and conclu sions of law if supported by substantial evidence and by the law. Evidence will be viewed in the light most favorable to the prevailing party. Rule 52, M.R.Civ.P.; Luppold v. Lewis (1977), 172 Mont. 280, 563 P.2d 538; Morgen & Oswood Const. Co. v. Big Sky of Montana (1976), 171 Mont. 268, 557 P.2d 1017. The judgment of the District Court is presumed to be correct and will be upheld unless clearly shown to be erroneous; the burden of such showing is upon the appellant. Kamp v. First National Bank and Trust Co. (1973), 161 Mont. 103, 504 P.2d 987. Where a trial court judge’s findings are based upon substantial though conflicting evidence they will not be disturbed on appeal unless there is a clear preponderance of evidence against such findings. Cameron v. Cameron (1978), 179 Mont. 219, 587 P.2d 939.
The record in the instant case reveals substantial evidence of intimidating actions toward Mary Toeckes’ use of the property in question, including the previously mentioned threats and culminating in Ronald Baker’s willful removal of the gate and approach. Although the Bakers have denied the threats and other incidents of intimidation, those denials are not sufficient to rebut the presumption of validity of the trial court judge’s findings. We find substantial evidence to support the findings of fact. Thus, the appellant must demonstrate a misapplication of law to prevail on appeal.
Appellant contends on appeal that Mary Toeckes was not authorized to have the approach and gate installed, and therefore he was entitled to remove it. He cites the following passage as authority for this proposition.
“. . . Thus, it is obvious that a tenant in common has no right to alter or change the property to the injury of his cotenant without his assent or to obstruct, or deny to his cotenant, the latter’s equal right to its use ...” 20 Am. Jur. 2d Cotenancy and Joint Ownership § 37.
However, we find that this provision does not apply to the facts of this case since appellant’s only contention of injury from the installation is that he cannot see the access to the property.
Cotenants have the right to equal access and use of property held in common and one tenant cannot deprive the other of the use of the property. It is also well established that if one cotenant attempts to use the property to the exclusion of the other, the excluded cotenant may have access to the property by any reasonable means which does not create waste. This common law rule has been partially codified in section 70-1-311, MCA, which provides:
“If any person shall assume and exercise exclusive ownership over or take away, destroy, lessen in value, or otherwise injure or abuse any property held in joint tenancy or tenancy in common, the party aggrieved shall have his action for the injury in the same manner as he would have if such joint tenancy or tenancy in common did not exist; provided that nothing herein contained shall prevent one cotenant or joint tenant or any number of co tenants or joint tenants acting together less than all from entering on the common property at any point or points not then in the actual occupancy of the nonjoining cotenants or joint tenants and enjoying all rights of occupancy of the property, without waste ...” (Emphasis added.)
On the basis of this common law and statutory authority and the facts of this case, we find that the installation of the access to the property was authorized by law and appellant’s actions were not justified.
Appellant further contends that the actual damages of $230 were not supported by the evidence. The District Court does not provide a basis for its calculation of the actual damages award. However, we find substantial evidence in the record to support this amount. The amount is not excessive. The record reveals that Mrs. Toeckes was deprived of the use of the leasehold in 1976 and a portion of 1977, that she incurred costs in constructing the gate and reconstructing the gate after Mr. Baker removed it, and that she received an itemized statement from Cascade County for $249.28. The testimony of the value of the land for grazing purposes varied from $7.50 to $10.00 per animal unit month and the state lease specified a carrying capacity of 27 units per year. The testimony also conflicts concerning the cost of constructing the gates with the range being $ 10 to $50 for each gate. There was also conflict as to whether or not the statement from the county was actually a bill. Although the evidence on damages is conflicting, we find that $230 in actual damages is not excessive, since combinations of these amounts could total a much higher figure depending on the weight the District Court gives the testimony.
Next appellant contends that punitive damages should not have been awarded. The basis of this contention is that although Ronald Baker admits removing the gate and approach without consulting Mary Toeckes, his trip to Helena and his discussion with the Department of State Lands negates any malicious intent.
Section 27-1-221, MCA, provides the guidelines for an award of punitive damages.
“27-1-221. When exemplary damages allowed. In any action for a breach of an obligation not arising from contract where the defendant has been guilty of oppression, fraud, or malice, actual or presumed, the jury, in addition to the actual damages, may give damages for the sake of example and by way of punishing the defendant.”
The District Court, as the trier of fact, found that Ronald Baker’s actions of removing the gate and approach and intimidating the respondent through threats of bodily harm were malicious. Judge Coder properly admitted testimony concerning Ronald Baker’s conversation with an employee of the Department of State Lands for the purpose of determining Ronald Baker’s state of mind. This conversation may be considered as a factor in determining the propriety of an award of exemplary damages; the fact that the conversation actually took place does not preclude a finding of malice. See Perkins v. Stevens (1957), 131 Mont. 138, 308 P.2d 620. There is substantial evidence to support a finding of malice by reason of appellant’s conduct in destroying the gate and approach as well as the intimidation exerted upon the respondent.
With regard to the amount of punitive damages, there is no established rule to be followed for ascertaining whether such an award is excessive. Johnson v. Horn (1929), 86 Mont. 314, 283 P. 427. The District Court is in a better position to determine the amount and this Court is unwilling to disturb the award since it is not disproportionate under the circumstances of this case.
We have deemed it unnecessary to discuss several incidents of alleged misconduct which are contained in the record as they would not change the result in this case.
The judgment is affirmed.
MR. JUSTICES DALY, HARRISON, SHEA and SHEEHY, concur. | [
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MR. CHIEF JUSTICE HASWELL
delivered the opinion of the Court.
Continental Insurance Company appeals from an order of the Workers’ Compensation Court denying the Insurance Company’s motion for an evidentiary hearing prior to a judicial determination of an award of attorney fees and costs.
Richard B. Horton (claimant) was injured in an industrial accident on May 28, 1975. His injury arose out of and in the course of his employment. Initially, the Insurance Company paid claimant his proper disability rate and certain medical expenses. During approximately the next 18 months the claimant sought additional medical assistance for his injury and underwent two operations. By June, 1977, the Insurance Company was refusing to pay certain medical expenses incurred by claimant. They also refused to pay claimant’s full disability rate. As a result, claimant filed a petition for an emergency hearing before the Workers’ Compensation Court. That Court entered findings of fact, conclusions of law and judgment in claimant’s favor.
The judgment awarded attorney fees and costs to claimant pursuant to section 92-616. R.C.M. 1947 [now section 39-71-611, MCA], Claimant’s attorney submitted a statement to the Workers’ Compensation Court claiming attorney fees and costs incurred in the case totaling $3,355.19. Subsequently, the Insurance Company filed a petition requesting a hearing on the question of attorney fees.
A hearing was held before the Workers’ Compensation Court for the limited purpose of hearing arguments on whether a hearing on attorney fees, should be granted. The Workers’ Compensation Court entered an order granting Horton’s motion for leave to verify his previously filed statement for attorney fees and costs, and denied the Insurance Company’s motion for an evidentiary hearing prior to an award of attorney fees and costs. This appeal followed.
The sole issue, as framed by appellant Insurance Company, is whether the 1979 amendment to section 39-71-611, MCA, providing that attorney fees shall be established by the Workers’ Compensation judge instead of the Division of Workers’ Compensation requires the opportunity for an evidentiary hearing, including sworn testimony and cross-examination prior to the judicial determination and award of attorney fees.
In 1979, section 39-71-611, MCA, was amended. Prior to the amendment this statute read:
“In the event the insurer denies the claim for compensation or terminates compensation benefits, and the claim is later adjudged compensable, by the division or on appeal, the insurer shall pay reasonable costs and attorneys’ fees as established by the division . . .” (Emphasis added.)
After the amendment this statute read:
“In the event an insurer denies liability for a claim for compensation or terminates compensation benefits and the claim is later adjudged compensable by the workers’ compensation judge or on appeal, the insurer shall pay reasonable costs and attorneys’ fees as established by the workers’ compensation judge.” (Emphasis added.)
For the purposes of this case, the only pertinent distinction between this statute as it existed prior to the amendment and after the amendment is the substitution of “workers’ compensation judge” for “division.”
In 1978, prior to the amendment, this Court decided the case of Smith v. Pierce Packing Co. (1978), Mont., 581 P.2d 834, 35 St.Rep. 979. In Smith, as in the present case, the appellant contended that an award of attorney fees was improper for the reason that no evidence of such fees was adduced before the Workers’ Compensation Court. In Smith, as in the present case, the appellant cited Crncevich v. Georgetown Recreation Corp. (1975), 168 Mont. 113, 541 P.2d 56, for the proposition that evidence must be introduced in the District Court to demonstrate the proper amount of attorney fees. This Court’s response to the appellant’s contention in Smith was as follows:
“Further, claimant argues that no evidence per se of attorney fees need be presented in a workers’ compensation case, as the procedure entails submission of a verfied petition to the division, set ting forth the number of hours spent and services performed. The division administrator then reviews the petition and sets a ‘reasonable fee’. We concur.” Mont., 581 P.2d at 838, 35 St.Rep. at 984.
In other words, the rules pertaining to attorney fees as enunciated in Crncevich do not apply in workers’ compensation cases. In the present case, the appellant contends that the amendment to section 39-71-611, MCA, requires us to overrule Smith and apply the Crncevich rule to workers’ compensation cases. We decline to so hold.
The amendment, noted above, merely changes the party who sets the reasonable fee. The amendment to section 39-71-611, MCA, does not change the Smith decision. The statute both before and after the amendment does not require an evidentiary hearing to determine attorney fees in workers’ compensation cases. The method used to fix attorney fees is discretionary with the Workers’ Compensation judge, and the matter of allowing a hearing concerning attorney fees is also discretionary. The failure to allow such a hearing is not per se an abuse of discretion. In the present case, the appellant’s only allegation of abuse of discretion is the failure to provide a hearing on attorney fees. Since we hold that such a hearing is not required for workers’ compensation cases, the Workers’ Compensation Court is affirmed.
Affirmed.
MR. JUSTICES DALY, HARRISON, SHEA and SHEEHY concur. | [
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JUSTICE NELSON
delivered the Opinion of the Court.
¶1 The Appellant, Gary Lee Hall, was charged with a fourth offense of driving under the influence of alcohol pursuant to § 61-8-401, MCA, and for driving with a suspended license, pursuant to § 61-5-212, MCA, in the District Court for the Twenty First Judicial District in Ravalli County. Hall filed motions to suppress evidence and to dismiss the felony charge of driving under the influence of alcohol. The District Court denied both motions. After a bench trial, Hall was convicted of the charges. He now appeals. We affirm.
ISSUES PRESENTED
¶2 On appeal, Hall raises two issues:
1. Whether the police officer had a particularized suspicion to justify the stop; and
2. Whether Hall’s three previous convictions in the state of Washington for driving while under the influence were appropriately used to form the basis of his Montana felony charge of driving under the influence of alcohol and/or drugs, fourth offense.
FACTS
¶3 Bob and Debra Walker made a stop at the Lone Pine Station on the south side of Hamilton, which resulted in Mrs. Walker calling in a report of a drunk driver. While Mr. Walker waited in their truck, Mrs. Walker went inside for a cappuccino. While she was waiting in line, she noticed a man come staggering through the door who she immediately thought was drunk. The man tripped through the door and almost fell down, but caught himself. The man was disheveled, his hat was askew, his shirt was untucked and his eyes were bloodshot. When Mrs. Walker returned to the truck, the couple conferred, agreeing that the man was drunk. Mr. Walker indicated that after the man parked his truck across the painted parking lines and perpendicular to Mr. Walker’s truck, the man staggered about, reached into his pockets and pulled them out and dropped some money. The man paused for a long time, staring at his hands before staggering into the store, leaving the money he dropped on the ground. The couple agreed that the man was obviously too drunk to drive.
¶4 The Walkers watched the man leave the store and get into the driver’s side of his truck. So as not to appear suspicious, the Walkers slowly drove away while Mrs. Walker used her cell phone to call 9-1-1. She identified herself and gave a description of a drunk man driving a black and maroon Ford pickup truck, with a blonde female passenger and a dog in the back-end wearing an orange vest, and gave the truck’s license plate number. Because they were driving away, Mrs. Walker could not say which direction the man was traveling, so the dispatcher called the Lone Pine Station. The clerk confirmed that a drunk man had just been in there, but because it was so busy, he could not give the direction of travel.
¶5 Meanwhile, Hamilton Police Officer Hochalter was parked in the parking lot of Al’s Car Care on the 93 strip in Hamilton when he received the dispatcher’s report at 9:16 p.m., relaying the information supplied by Mrs. Walker. Within two minutes, a black and maroon Ford truck driven by a man with a blonde female passenger and a dog in the back-end wearing an orange vest drove by in the lane closest to Officer Hochalter. He followed the truck for four to five blocks, watching for signs of erratic driving. But the truck drove at the 25 mile per hour speed limit and appropriately signaled to change lanes. When the truck pulled in to the Gas N’ Grub and Hall got out of the driver’s side, Officer Hochalter pulled in right behind the truck, just turning on his emergency flashers to let Hall know they needed to talk.
¶6 Hochalter’s investigation quickly revealed that Hall smelled of alcohol. Hall admitted to having drunk between six to eight beers. Hochalter then administered field sobriety tests which indicated that Hall was intoxicated. After refusing to take a Preliminary Breath Test (PBT), Hochalter arrested Hall for driving under the influence.
DISCUSSION
¶7 We review a district court’s denial of a motion to suppress evidence to determine whether the court’s findings of fact are clearly erroneous and whether those findings were correctly applied as a matter of law. State v. Nelson, 2004 MT 13, ¶ 5, 319 Mont. 250, ¶ 5, 84 P.3d 25, ¶ 5. Our review of statutory interpretation is plenary, and our standard of review is whether the tribunal’s interpretation of the law is correct. State v. McNally, 2002 MT 160, ¶ 5, 310 Mont. 396, ¶ 5, 50 P.3d 1080, ¶ 5.
1. Did the police officer have a particularized suspicion to justify the stop?
¶8 Hall claims that Officer Hochalter lacked sufficient reliable objective data to form a particularized suspicion of wrongdoing, and that his stop was therefore illegal. The Fourth Amendment to the United States Constitution and Article II, Section 11 of the Montana Constitution protect persons against unreasonable searches and seizures. Whenever a police officer restrains a person’s freedom, such as in a brief investigatory stop of a vehicle, the officer has seized that person. State v. Reynolds (1995), 272 Mont. 46, 49, 899 P.2d 540, 542. However, Montana recognizes that an investigatory stop is reasonable when an officer has a particularized suspicion that the person has committed or is committing an offense. State v. Lacasella, 2002 MT 326, ¶ 19, 313 Mont. 185, ¶ 19, 60 P.2d 975, ¶ 19; codified at § 46-5-401, MCA. To evaluate whether a police officer has a particularized suspicion to make an investigatory stop, the State has the burden to show:
(1) objective data from which an experienced officer can make certain inferences; and (2) a resulting suspicion that the occupant of the vehicle is or has been engaged in wrongdoing or was a witness to criminal activity.
State v. Martinez, 2003 MT 65, ¶ 22, 314 Mont. 434, ¶ 22, 67 P.3d 207, ¶ 22. The existence of a particularized suspicion is determined by the totality of the circumstances. State v. Henderson, 1998 MT 233, ¶ 12, 291 Mont. 77, ¶ 12, 966 P.2d 137, ¶ 12.
¶9 In State v. Pratt (1997), 286 Mont. 156, 951 P.2d 37, we adopted a three factor test to evaluate the totality of the circumstances when an investigative stop is made pursuant to a tip. State v. Elison, 2000 MT 288, ¶ 16, 302 Mont. 228, ¶ 16, 14 P.3d 456. The first factor is whether the informant remains anonymous or subjects herself to civil and criminal liability. The second factor is whether the report is based on personal observations. The third factor is whether the officer’s own observations corroborate the informant’s information.
¶10 According to Hall, Officer Hochalter lacked sufficiently reliable objective data to form a particularized suspicion according to the Pratt test. Officer Hochalter testified that he did not know from the dispatcher whether the tip was anonymous or if it was from an identified citizen. Further, the dispatcher did not relay the personal observations of the caller to Officer Hochalter. Lastly, Officer Hochalter admitted that Hall’s driving was not erratic. Thus, according to Hall, the totality of the circumstances fail to support a particularized suspicion.
¶11 However, we rejected this same argument in Pratt, concluding that an officer in the field does not have to personally assess the reliability of the tip given to dispatch. Pratt, 286 Mont. at 167, 951 P.2d at 44. In Pratt, we looked to the decisions of the United States Supreme Court in United States v. Hensley (1985), 469 U.S. 221, 105 S.Ct. 675, 83 L.Ed.2d 604 (an officer unaware of the factual basis for the reasonable suspicion may make an investigative stop in reliance on a report or bulletin from another law enforcement agency so long as the reporting person possessed the requisite suspicion); and Whitley v. Warden (1971), 401 U.S. 560, 91 S.Ct. 1031, 28 L.Ed.2d 306 (an officer who is unaware of the factual basis for probable cause may make an arrest upon the directive of another officer with probable cause). We also quoted the Ninth Circuit case of United States v. Robinson (9th Cir. 1976), 536 F.2d 1298, “effective law enforcement cannot be conducted unless police can act on directions and information transmitted by one officer to another and that officers, who must often act swiftly, cannot be expected to cross-examine their fellow officers about the foundation for the transmitted information.” 536 F.2d at 1299.
¶12 Other courts, in considering a motion to suppress based on a citizen’s tip, reject the narrow rule advanced by Hall, that only the information known to the investigating officer is to be considered. Instead, courts find it appropriate to consider the knowledge of the officer or dispatcher who relayed the tip or other information. The Ninth Circuit, under the totality of the circumstances, looks to the information relayed to the officer in the field and the information known to the dispatcher. United States v. Fernandez-Castillo (9th Cir. 2003), 324 F.3d 1114, 1118 (highway patrol officer had a reasonable suspicion under the totality of the circumstances when a Montana Department of Transportation employee reported erratic driving which was relayed to a highway patrol officer, who then encountered the vehicle and corroborated erratic driving). Massachusetts recently determined there was a reasonable suspicion to make an investigatory stop premised on the informant’s basis of knowledge and what he relayed to the dispatcher. Commonwealth v. Riggieri (Mass. 2003), 782 N.E.2d 497, 500 (an off-duty reserve officer followed an erratic driver and gave updates via his cell-phone to the arresting officer who did not witness evidence of wrongdoing). In Feathers v. Aey (6th Cir. 2003), 319 F.3d 843, the Sixth Circuit determined that it was appropriate to impute to the arresting officer the dispatcher’s knowledge that the tipster remained anonymous, and therefore, there was an insufficient indicia of reliability to give rise to a reasonable suspicion. Similarly, the Tenth Circuit employs the “fellow officer” rule, which considers the pool of information known to all the officers involved in the stop or arrest in order to determine the existence of a reasonable suspicion under the totality of the circumstances. United States v. Hinojos (10th Cir. 1997), 107 F.3d 765, 768 (an anonymous tip was relayed to the investigating officer who independently corroborated the information). ¶13 Jurisdictions which have limited the scope of inquiry to the knowledge of the arresting or investigating officer also applied the rule from U.S. v. Hensley, 469 U.S. 221, allowing officers to rely on a report from another officer or dispatch. The resulting combination of the two rules lends to a finding of reasonable suspicion based solely on the officer’s reliance on the report from dispatch, without an inquiry into the basis of knowledge of the dispatcher’s report. See, e.g. City of Maumee v. Weisner (Oh. 1999), 720 N.E.2d 507, 511. Such a situation is ripe for abuse. The Missouri Supreme Court rejected such a rule, stating that, “[t]he requirements of reasonable suspicion and probable cause would be rendered meaningless if police could simply filter a ‘hunch’ through a radio or cellular phone and have it come out reliable on the other end.” State v. Miller (Mo. 1995), 894 S.W.2d 649, 653 (under the totality of the circumstances the Court considered an anonymous tip relayed by dispatch as well as the collective information known to the officers involved in the stop, concluding there was no reasonable suspicion). Missouri continues to analyze the knowledge of each of the officers as well as the information told to the dispatcher. State v. Monath (Mo. 2001), 42 S.W.3d 644, 650 (there was a reasonable suspicion when store clerks relayed information of two individuals buying large quantities of pseudoephedrine, which was corroborated by the police investigation).
¶14 In Ohio, the appellate courts had a split of authority for situations where an investigative stop was made in sole reliance on a police dispatch. City of Maumee, 720 N.E.2d 507. The Ohio Supreme Court resolved the split by requiring the state to demonstrate that the facts which precipitated the dispatch justified a reasonable suspicion, and so rejected the rule which found it was sufficient for the police to merely rely on the dispatch without a showing of the information available to the dispatcher. 720 N.E.2d at 511.
¶15 Based on the foregoing, Pratt was correct in that an officer in the field must be able to rely on reports and dispatches from other officers without having to conduct a cross-examination as to the basis of the report. However, under our three factor analysis of Pratt, when a tip has been relayed from dispatch and an officer has acted on that information, it is appropriate to look beyond the stopping or investigating officer to include the information known to the dispatching or reporting officer. Here, although the dispatcher did not testify, the dispatcher’s transcript and log were entered into evidence. From the record it is apparent that Mrs. Walker called and reported a drunk driver, giving a detailed description of the vehicle. Mrs. Walker stated that the man was, “so drunk, he can’t even hardly walk” and that “he just about fell down, he’s so drunk.” The veracity of Mrs. Walker’s report was further supported when the dispatcher called the clerk at the Lone Pine Station, who, when told about the report of a “really drunk guy” responded that, “he was just in and went out ...” Thus, there was one named citizen informant who relayed information, and the details of the information support that it was based on personal observations. The indicia of reliability ofMrs. Walker’s report was further bolstered by the affirmative response of the store clerk. These facts lend to a high indicia of reliability in regard to the first two Pratt factors.
¶16 As for the third Pratt factor, Officer Hochalter saw the vehicle only a few minutes after getting the report and it matched the detailed description. Furthermore, Hochalter waited until Hall had pulled into a gas station and had gotten out. Neither Hall nor the State address at what point Hochalter’s response became an investigatory stop. In a similar situation in State v. Wagner, 2003 MT 120, 315 Mont. 498, 68 P.3d 840, the responding officer found the reported drunk driver had already parked his vehicle and was at a pay phone. There, we concluded that the initial encounter between officers and the defendant was not a stop, because it was at a public venue of the defendant’s own choosing and absent a show of force or authority, the defendant was free to walk away. Wagner, ¶ 31. Similarly here, Hall himself stopped at the gas station and got out of his vehicle, unaware that Officer Hochalter had pulled in behind him. Hall was unsteady on his feet as he walked around the truck to get gas. When Hall realized that a police car was parked right behind him, he stopped what he was doing and attempted to get into the cab of his truck, at which point, Officer Hochalter grabbed him. Following Wagner, Hall was clearly not free to leave after Hochalter physically grabbed and detained him. For the purposes of the Pratt third factor corroboration, Hochalter’s observations prior to the stop included encountering the described vehicle within a short time of receiving the dispatch, Hall’s eyes were red and watery, he smelled of alcohol and was unsteady on his feet. Furthermore, Hall attempted to leave when he realized a police officer was behind him, implicating Illinois v. Wardlow (2000), 528 U.S. 119, 125, 120 S.Ct. 673, 676, 145 L.Ed.2d 570, 577 (unprovoked evasive behavior and headlong flight when police officers appear may create a reasonable suspicion). Under the totality of the circumstances, these facts satisfy the factors of the Pratt test.
2. Whether Hall’s three previous convictions in the state of Washington for driving while under the influence appropriately used to form the basis of his Montana felony charge of driving under the influence of alcohol and/or drugs, fourth offense?
¶17 Montana law provides that the fourth or subsequent conviction of driving under the influence is a felony. Section 61-8-731, MCA. The previous convictions which may be used in the calculation include violations of Montana’s driving under the influence laws, §§ 61-8-401, & 406, MCA, as well as convictions of similar statutes and regulations of other states. Section 61-8-734, MCA. Hall claims that the state of Washington’s statute is not similar to Montana’s statutes, because the Washington statute requires a lesser degree of culpability.
¶18 We addressed a similar claim in State v. McNally, 2002 MT 160, 310 Mont. 396, 50 P.3d 1080, where we determined that Colorado’s driving while ability impaired (DWAI) statute was insufficiently similar to Montana’s statute for the purpose of enhancing a charge to a fourth offense felony DUI. McNally, ¶ 22. Although Colorado had a DUI statute, which was similar in nature to Montana’s driving under the influence statutes, there was no statute in Montana comparable to Colorado’s DWAI statute. Colorado’s DWAI standard allowed for a conviction if a person was impaired “to the slightest degree.” The Montana Legislature had considered and rejected using the phrase “to the slightest degree,” and decided to use the standard of “diminished” in its stead. McNally, ¶ 21. We determined that “to the slightest degree” was a lesser degree of culpability than “diminished,” and therefore, convictions under Colorado’s DWAI statute could not be used in Montana to enhance an offense to a felony fourth violation.
¶19 We now consider the issue of whether or not Washington’s drunk driving laws are sufficiently similar so as to enhance Hall’s Montana conviction to a fourth offense. Under Montana law, a person may be convicted for a per se violation of driving under the influence if the person’s blood alcohol concentration is greater than 0.10. Section 61-8-406, MCA (2001) (Hall’s conviction was under the old standard, which the 2003 legislature lowered to 0.08 BAC for a per se violation). Alternatively, a person may be convicted if he operates a vehicle under the influence, meaning that the person’s ability to safely operate a vehicle had been diminished, which may be supported by certain inferences of the person’s BAC. Section 61-8-401, MCA.
¶20 Washington’s statutory scheme also criminalizes driving under the influence, with a generic category, and a per se category. The main difference between Montana and Washington is in the organization of the statutes. Washington only has one offense, rather than two separate offenses as in Montana. However, the Washington statute “sets out alternate methods of committing the crime of driving while under the influence.” State v. Franco (Wa. 1982), 639 P.2d 1320, 1323. While each subsection provides alternate methods for committing the same offense, those subsections are analogous to Montana’s two statutes. Both states disallow driving with a BAC in excess of 0.10 (Wash. Rev. Code § 46.61.502(1) & (2), and § 61-8-406, MCA) and driving under the influence of intoxicating drugs or liquor (Wash. Rev. Code § 46.60.502(3) & (4), and § 61-8-401, MCA).
¶21 Hall claims the Washington standard of culpability is best described by its case of State v. Hansen (Wa. Ct. App. 1976), 546 P.2d 1242, where the Washington Court of Appeals affirmed the use of the following jury instruction: “A person is deemed to be under the influence of or affected by intoxicating liquor if such person’s ability to handle a motor vehicle is lessened in any appreciable degree.” 546 P.2d at 1243. Hall places great weight on the use of the phrase “any appreciable degree” and claims it is similar to “in the slightest degree,” which was at issue in McNally. Although Henson interpreted Wash. Rev. Code § 46.61.515, and Hall was convicted of violating Wash. Rev. Code § 46.61.502, which prohibits driving while intoxicated (DWI), the Henson standard of “any appreciable degree” appears to still apply. See, State v. Randhawa (Wa. 1997), 941 P.2d 661, 664. The Washington standard of “any appreciable degree” bears obvious similarities to the Colorado standard of “in the slightest degree,” as was at issue in McNally. However, in McNally, we recognized that Colorado’s DUI statute was similar to Montana’s DUI statutes, but that the culpability of “to the slightest degree” for DWAI (driving while ability impaired) had no comparable counterpart in Montana, because it makes it illegal to drive after consuming any alcohol. Therefore, we concluded that a Colorado conviction for DWAI could not be used to enhance the Montana offense to a fourth or subsequent felony offense. Although Washington established its per se standard after its decision of Hansen in 1976, it is only a per se violation to have a BAC in excess of 0.10 (now 0.08, just as in Montana). Even with a per se standard, the logic of Hansen continues to apply in Washington, that a person may have drunk liquor and yet, not be under the influence of it to the extent that driving is proscribed by law. State v. Franco (Wa. 1982), 639 P.2d 1320, 1324 (citing Hansen, 546 P.2d at 1242). Thus, although Washington’s DUI statute has a per se subsection, it is more similar to Montana’s per se statute than it is to Colorado’s DWAI statute.
¶22 Hall also claims that it is inappropriate to use his Washington DWI convictions to enhance his Montana DUI conviction because the Washington law combines the per se DWI and regular DWI into one statute. The result, according to Hall, is that Washington does not allow the defendant to establish innocence by way of lack of impairment, in spite of a BAC in excess of the limit, while such a person would be allowed to establish innocence in Montana. Hall is correct, in that a person charged with driving under the influence, § 61-8-401, MCA, who had a BAC over the legal limit might nonetheless be able to establish that his or her ability to safely operate a vehicle had not been diminished, and thus, he or she was not in violation of § 61-8-401, MCA. However, Hall’s analysis fails to take into account that such a person would have violated Montana’s per se statute, § 61-8-406, MCA, where a crime would have occurred regardless of the level of impairment. While we do not necessarily know which sub-section of Wash. Rev. Code § 46.61.502 the defendant violated, whether it was the regular DWI or the per se aspect, see, e.g., Franco, 639 P.2d at 1324 (the jury need only be unanimous as to guilt of the overall offense but need not be unanimous as to guilt of a particular subsection), it is nonetheless certain that a person convicted of violating Wash. Rev. Code § 46.61.502 committed an offense for which each sub-section has an analogous statute in Montana. Therefore, the decision of the district court was correct. We affirm the order of the district court.
CHIEF JUSTICE GRAY, JUSTICES WARNER, REGNIER and RICE concur. | [
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JUSTICE RICE
delivered the Opinion of the Court.
¶1 Thomas and Susan Benson (collectively, Bensons) brought this action against Diverse Computer Corporation, a/k/a Pronto Progress Software Development (hereinafter, Diverse Corp.), in the Thirteenth Judicial District Court, Yellowstone County, alleging the corporation had breached its contract to repurchase the Bensons’ shares in the company. The jury found that Diverse Corp. had breached its contract with the Bensons, causing them damages in the amount of $64,933.60, but nonetheless entered a verdict in favor of the corporation, finding that Diverse Corp. had proven at least one of its affirmative defenses of rescission, waiver, release, or accord and satisfaction. Following entry of judgment in favor of Diverse Corp., the Bensons brought a combined motion in District Court for judgment as a matter of law, amended judgment, or a new trial. On July 16,2002, the District Court denied the Bensons’ motion. From this order and the verdict entered in Diverse Corp.’s favor, the Bensons appeal. We reverse and remand.
¶2 The Bensons raise the following issues on appeal:
¶3 1. Was the jury’s verdict supported by substantial evidence?
¶4 2. Did the District Court err in excluding the testimony of Renee Southworth as hearsay?
¶5 3. Did the District Court err in refusing to give the Bensons’ Proposed Instruction No. 38 concerning rescission of a contract following breach?
¶6 4. Did the District Court err when it instructed the jury on the legal principle of rescission?
¶7 5. Did the District Court err in denying the Bensons’ combined motions for a new trial, judgment as a matter of law, and amended judgment?
¶8 Because we determine the first issue is dispositive, we decline to address the remaining issues on appeal.
FACTUAL AND PROCEDURAL BACKGROUND
¶9 Diverse Corp. is a small, closely held corporation, located in Wisconsin, specializing in computer software development. Timothy Proksch (Proksch), Mrs. Benson’s brother, founded the corporation and acts as the company’s president and principle shareholder.
¶10 In March of 1992, the Bensons purchased 200 shares of stock in Diverse Corp., making them the second largest shareholder in the company. In the years that followed, Diverse Corp. made several offers to buy-back the Bensons’ shares, each of which the Bensons rejected.
¶11 Familial relationships between the parties became strained with the commencement of divorce proceedings between Proksch and his ex-wife in 1999. By the early part of 2000, Proksch and the Bensons had become bitterly estranged. On May 12, 2000, the Bensons offered to sell their 200 shares to the corporation for $400 per share, or a total of $80,000, in order to sever all ties to Proksch and the corporation.
¶12 Diverse Corp. was unwilling to pay $400 per share, but was very interested in purchasing the Bensons’ shares for a reasonable value in order to obtain a severance of the Bensons’ interest in the corporation. In a letter dated May 18, 2000, Proksch offered to purchase the Bensons’ shares for book value, or $282.32 per share, plus 15 percent, for a total of $64,933.60 for all 200 shares. To accept the offer, the Bensons were instructed to “fill out the back of the stock certificate(s) and mail the signed stock certificates to the Corporation.”
¶13 On June 15, 2000, the Bensons mailed a signed stock certificate to the corporation, representing their 200 shares in Diverse Corp., along with a letter stating that by accepting the corporation’s offer, they were not relinquishing their rights under “any state or federal statute or regulation.”
¶14 Although the Bensons had signed their original stock certificate as instructed, Diverse Corp. found the language preserving the Bensons’ rights under state and federal law unacceptable. On June 19, 2000, Diverse Corp. declined to proceed with its purchase of the shares and returned the signed stock certificate to the Bensons.
¶ 15 Upon receipt of the returned stock certificate, the Bensons became concerned about possessing an endorsed stock certificate, and therefore requested a new certificate be issued by the corporation. In response to their request, Diverse Corp. suggested the Bensons write over the endorsement with their initials, or, alternatively, that the Bensons post a $65,000 indemnity bond and a new certificate would be issued. Dissatisfied with either option, the Bensons made a personal visit to the corporation in Wisconsin, where they surrendered their endorsed stock certificate in exchange for a new one.
¶16 On January 30, 2001, the Bensons brought suit against Diverse Corp. in District Court for breach of contract, asserting damages in the amount of $64,933.60, the amount the corporation had originally agreed to pay for their shares. The Bensons alleged that Diverse Corp.’s May 18, 2000 letter constituted an offer to repurchase their shares, which they had accepted by sending their endorsed stock certificate to the corporation. In response, Diverse Corp. denied the existence of a contract, and argued that the Bensons’ reply to its May 18, 2000 offer was not an acceptance, but a counteroffer, since it included a letter stating that the Bensons were retaining all their rights under state and federal law. Alternatively, Diverse Corp. maintained that, if a contract did exist between the parties, the Bensons had waived their rights under it by forfeiting the endorsed certificate to the corporation in favor of a new one, and failing to immediately assert their rights under the contract in District Court.
¶17 The matter proceeded to trial before jury on April 15 and 16,2002. At trial, the Bensons sought to introduce the testimony of Renee Southworth (Southworth), a friend of Mrs. Benson, concerning the Bensons’ statement to her that they believed they had a contract with Diverse Corp., and that the corporation had breached the contract by refusing to purchase their shares. Prior to Southwoi’th’s testimony, however, Diverse Corp. objected to the testimony as inadmissible hearsay. The District Court sustained the objection over the Bensons’ offer of proof, and the testimony was not presented.
¶18 On April 16,2002, the jury returned a special verdict finding that a contract for the purchase of the shares existed between the Bensons and Diverse Corp., that Diverse Corp. had breached the contract, and that the Bensons were entitled to receive the contract amount of $64,933.60. The jury further concluded, however, that Diverse Corp. had proven by a preponderance of the evidence at least one of its affirmative defenses of rescission, waiver, release, or accord and satisfaction. On April 23,2002, the District Court entered judgment in favor of Diverse Corp. and dismissed the lawsuit.
¶19 The Bensons thereafter brought a combined motion in District Court for judgment as a matter of law, amended judgment, or a new trial, asserting that the court had improperly excluded the testimony of Renee Southworth and had erroneously instructed the jury concerning the legal principle of rescission. The Bensons further maintained that the defense verdict was not supported by the law or evidence produced at trial. The District Court denied the Bensons’ motion on July 16, 2002, and this appeal followed.
STANDARD OF REVIEW
¶20 Although the scope of our review is necessarily very limited, we review a jury’s verdict in a civil case to determine whether substantial credible evidence in the record supports the verdict. Morgan v. Great Falls School Dist. No. 1, 2000 MT 28, ¶ 8, 298 Mont. 194, ¶ 8, 995 P.2d 422, ¶ 8. We have defined substantial credible evidence as evidence which a reasonable mind might accept as adequate to support a conclusion. Barrett v. Asarco, Inc. (1990), 245 Mont. 196, 200, 799 P.2d 1078, 1080. The test of substantial credible evidence allows for reversal only if there is an absence of probative facts to support the verdict. Morgan, ¶ 9 (citing Sandman v. Farmers Ins. Exchange, 1998 MT 286, 291 Mont. 456, 969 P.2d 277). In determining whether substantial evidence supports the verdict, we view the evidence in the light most favorable to the prevailing party, drawing all reasonable inferences from the facts proven in favor thereof. Morgan, ¶¶ 8-9.
DISCUSSION
¶21 Was the jury’s verdict supported by substantial credible evidence?
¶22 The Bensons argue that the evidence produced at trial was insufficient to support the jury’s verdict that Diverse Corp. proved any of its affirmative defenses of rescission, release, waiver, or accord and satisfaction. They maintain that there is no evidence that they voluntarily or intentionally relinquished any known rights against the corporation.
¶23 In response, Diverse Corp. contends that the jury could have inferred from the evidence presented at trial that the Bensons intended to rescind, release, or waive their rights under the contract, or to enter an accord and satisfaction with Diverse Corp. In support of this proposition, the corporation relies on the following facts: (1) that the Bensons submitted their endorsed stock certificate to the corporation in favor of a new one following the breach; and (2) that the Bensons made no immediate demand on the corporation for damages, but continued to assert their rights as shareholders. For the reasons set forth below, we conclude that such evidence is insufficient to support a finding of intent, a material element necessary to each of Diverse Corp.’s affirmative defenses.
¶24 In reaching this determination, we necessarily examine the components of each affirmative defense. In so doing, we begin with Diverse Corp.’s claim that the Bensons agreed to rescind the contract. Pursuant to § 28-2-1711, MCA, a party to a contract may rescind only in the following cases:
(1) if the consent of the party rescinding or of any party jointly contracting with him was given by mistake or obtained through duress, menace, fraud, or undue influence exercised by or with the connivance of the party as to whom he rescinds or of any other party to the contract jointly interested with such party;
(2) if, through the fault of the party as to whom he rescinds, the consideration for his obligation fails in whole or in part;
(3) if such consideration becomes entirely void from any cause;
(4) if such consideration, before it is rendered to him, fails in a material respect from any cause; or
(5) if all the other parties consent.
(Emphasis added.)
¶25 In this case, there is no evidence or allegation of duress, menace, fraud, or undue influence, nor is there any evidence of failed consideration. Rather, this defense is supported only by Diverse Corp.’s contention that the Bensons mutually consented to rescind the contract by exchanging the endorsed stock certificate in favor of a new one. At trial, however, the Bensons testified that they requested a new certificate only because they felt the endorsed certificate was like having “a fully endorsed check in their back pocket.” Diverse Corp. offered no evidence of an intent to the contrary.
¶26 We have stated that to rise to the level of substantial evidence, the evidence must be greater than trifling or frivolous. Sandman, ¶ 41. In this case, we conclude that the act of exchanging a compromised stock certificate in favor of a new one following a breach of contract is insufficient, without more, to support a claim for rescission.
¶27 This conduct is likewise inadequate to make a case for release or accord and satisfaction. Release is defined as the abandonment of a claim to the party against whom it exists. Sperry v. Mont. St. U. (1989), 239 Mont. 25, 30, 778 P.2d 895, 898. In Watters v. Guarantee Nat. Ins. Co., 2000 MT 150, ¶ 39, 300 Mont. 91, ¶ 39, 3 P.3d 626, ¶ 39 (overruled in part on other grounds by Shilhanek v. D-2 Trucking, Inc., 2003 MT 122, ¶ 21, 315 Mont. 519, ¶ 21, 70 P.3d 721, ¶ 21), we stated that “a release, as a matter of law, is nothing more than an accord and satisfaction, or one of several ways in which an obligation, contractually, may be discharged or ‘settled’ for less than or for something different than that owed.” See also §§ 28-1-1401 and 1402, MCA. To be enforceable, a release must at a minimum be unambiguous, explicit, and unequivocal. Sperry, 239 Mont. at 30, 778 P.2d at 898.
¶28 In this case, there was no evidence presented from which the jury reasonably could have inferred that the parties entered a subsequent agreement to release or discharge the corporation’s obligations under the original contract to purchase shares. In fact, Proksch admitted on cross-examination that the corporation never requested a release from the Bensons nor discussed the possibility of obtaining one.
¶29 Diverse Corp.’s claim that the Bensons entered an accord and satisfaction suffers from the same infirmity. There is no evidence on the record that the Bensons understood that by exchanging their stock certificate they were agreeing to accept something less than or different from the original obligation. Furthermore, the record reveals no evidence showing that any such obligation was satisfied by the corporation. We have stated that where there is no satisfaction, the original debt is not extinguished and the debtor remains liable for damages. Watkins v. Williams (1994), 265 Mont. 306, 314, 877 P.2d 19, 23. Accordingly, this defense also fails for lack of substantial evidence.
¶30 In support of its remaining defense, waiver, Diverse Corp. contends that the Bensons waived their rights under the contract by failing to make an immediate demand upon the corporation for payment. The corporation additionally argues that the Bensons waived any rights they may have had under the contract by continuing to exercise their rights as shareholders (i.e. examining company records and minutes) following the breach. While it is true that a waiver may be implied by a course of action or conduct which induces the belief that the intention and purpose was waiver, Stewart v. Covill and Basham Const., L.L.C., 2003 MT 220, ¶ 8, 317 Mont. 153, ¶ 8, 75 P.3d 1276, ¶ 8, such implied waiver requires a detrimental reliance by the party who is led by the conduct to believe a waiver has occurred. Reiter v. Yellowstone County (1981), 192 Mont. 194, 202, 627 P.2d 845, 850. Even assuming arguendo that the Bensons’ decision to wait and “weigh their options” for approximately six months following the breach could reasonably give rise to a waiver, the corporation has failed to show any detrimental reliance on its part. Nor do we think that the Bensons waived their rights under the contract by asking to review corporate minutes and records which they were already entitled to as shareholders.
¶31 Thus, even drawing all legitimate inferences in favor of Diverse Corp., we cannot conclude that the corporation proved by a preponderance of the evidence that the Bensons intended to rescind the contract, waive their rights to recover under the stock certificate, or otherwise release Diverse Corp. from its obligations. While it is only in rare cases that a jury verdict should be set aside, in this case we conclude that the complete absence of any probative evidence supporting the corporation’s affirmative defenses commands reversal.
¶32 On appeal the parties do not take issue with the jury’s finding that a contract existed, was breached by the corporation, and that the Bensons sustained damages in the amount of $64,933.60. Accordingly, we reverse only that portion of the verdict finding Diverse Corp. proved by a preponderance of the evidence at least one of its affirmative defenses, and remand this matter to the District Court for entry of judgment in favor of the Bensons for $64,933.60.
¶33 Reversed and remanded with instructions for entry of judgment consistent with this opinion.
CHIEF JUSTICE GRAY, JUSTICES REGNIER, COTTER, LEAPHART, NELSON and DISTRICT JUDGE HENSON, sitting in place of JUSTICE WARNER concur. | [
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MR. JUSTICE HARRISON
delivered the opinion of the court.
This appeal arises out of a proceeding for a dissolution of marriage and the equitable apportionment of assets of a marital estate filed in the District Court of the Eighteenth Judicial District Court of the Eighteenth Judicial District, the Honorable W.W. Lessley presiding. Appellant husband appeals from the District Court’s apportionment of the marital estate.
Appellant husband and respondent wife were married in Bozeman, Montana, on December 11, 1955. On October 18, 1977, after twenty-two years of marriage, wife petitioned the court for a dissolution of marriage and the equitable apportionment of assets of their marital estate. At the time of the filing of the petition, husband was 45 years old. Husband had a college education and worked in various occupations during the marriage: foreman and ranch hand, insurance agent, teacher, and automobile salesman. Wife had approximately two years of college and worked primarily as a housewife, although she was employed at different times throughout the marriage as a waitress, newspaper reporter, and retail clerk.
Five children were born to the parties during their marriage. One child, Kevin, is a minor who presently lives with wife in Helena, Montana. Three children have attained the age of majority, and the remaining child died in an accident during the marriage.
The assets accumulated by the parties during the marriage include a family home in Bozeman, two cars, a motorcycle, several shares of corporate stock, a boat, home furnishings, clothing and other incidental items of personal property. In 1965, wife also received an inheritance from her grandmother, Ada Smith. The inheritance consisted of a cash bequest, which was used for family expenses, and a remainder interest in certain farm and ranch land near Saco, Montana (hereinafter referred to as the Smith Ranch). The value of the land was stipulated by the parties as being between one and two million dollars before taxes. The interest is subject to a life estate held by wife’s father, Hugh C. Smith. From this interest, the parties have received approximately $39,554.15 in the form of mineral royalty payments and life estate principal and income distribution. These proceeds have also been applied toward family living expenses.
During the marriage, husband left a $5,500 teaching contract in White Sulphur Springs in 1958, and the parties moved to the Smith Ranch, where husband worked as foreman and ranch hand. Husband continued in this capacity for six years at a salary of $250 per month plus housing. During this time an additional 100 acres of wheat were put into production. In 1964, because of financial reasons, the parties moved from the ranch into the town of Saco, where husband taught vocational agriculture in the public school system. In 1971, because of wife’s desire to leave Saco, the parties moved to Bozeman. Husband cashed his teacher’s retirement fund and some smaller life insurance policies to finance the move.
Wife presently works as a clerk in state government in Helena, Montana. Husband is presently unemployed, having been terminated from his job in early 1977 and working for only four months in 1978. Husband has suffered both emotional and physical problems since the parties’ separation and has incurred substantial medical and hospital expenses.
The marriage of the parties was dissolved by the District Court on April 10, 1978. The court apportioned the assets of the marital estate on February 15, 1979. Several of the assets were distributed pursuant to a stipulation of the parties. An agreement was made between the parties to equally split that portion of the proceeds which represented equity resulting from the sale of their Bozeman residence. That figure amounted to approximately $11,200. With respect to the other assets, the parties stipulated, with the exception of a few items, who was to receive each asset, but left the particular valuation of each asset to the court. The property was distributed and valued by the District Court in the following manner: Wife was awarded a 1967 model car (less than $1,000); a wedding ring ($800); home furnishings (unvalued); china closet (unvalued); clothing and other incidental items of personal property. Husband received a 1977 Buick Riviera automobile ($3,500); a Honda 90($150); a boat ($2,700); corporate shares of stock (unvalued); home furnishings (unvalued); clothing and other incidental items of personal property in his possession. It should be mentioned that the District Court noted in its findings that husband paid remaining purchase money mortgages on the 1977 car and the boat out of the proceeds received from the sale of the house.
The District Court further found that husband had not contributed to the maintenance of wife’s remainder interest and awarded her sole ownership of the interest on the basis of the property distribution and as an alternative to maintenance. The District Court ordered husband to assume the remaining debts of the marriage, pay $110 per month for the support of the parties’ minor child until he reached the age of majority and pay wife’s attorney fees.
We consider three issues on appeal:
1. Whether the District Court erred or abused its discretion in apportioning the assets of the marital estate?
2. Whether the District Court erred in awarding wife sole ownership of the remainder interest as an alternative to maintenance?
3. Whether the District Court erred in ordering husband to pay wife’s attorney fees?
The first issue raises the question of whether it is necessary for a District Court in a dissolution proceeding to first place a value upon all of the assets within a marital estate and determine the net worth of the parties before distributing property within that marital estate. In this case, the District Court distributed the marital estate without determining the net worth of the parties or valuing the following items of the marital estate: the china closet, the corporate shares of stock, and the home furnishings received by husband and wife.
Husband contends it was error for the court to apportion the assets without undertaking such preliminary matters. Husband relies upon several cases in which this Court has stressed the importance of valuing assets and determining the net worth of parties in dissolution proceedings before distributing property within the marital estate. See Herring v. Herring (1979), 184 Mont. 353, 602 P.2d 1006; In re Marriage of Brown (1978), 179 Mont. 417, 587 P.2d 361; Martinez v. Martinez (1978), 175 Mont. 280, 573 P.2d 667, 35 St.Rep. 61.
Wife argues that the District Court did not err in apportioning the assets of the marital estate. She asserts there was no need for the District Court to concern itself with the valuation of certain assets or with the determination of the net worth of the parties because there was a stipulation entered into between the parties regarding the distribution of assets. Wife contends, because of the stipulation, that this case is distinguishable from the authority relied upon by husband. Further, on the basis of Penn v. Northern, Inc. (1980), 185 Mont. 223, 605 P.2d 600, wife contends that husband is precluded from raising any issues relating to the stipulation on appeal.
In Penn both parties agreed that certain documentary evidence did not need to be introduced at trial if the railroad would admit that it had notice of the dangerous nature of a railroad crossing. The railroad admitted notice, and the plaintiff did not attempt to introduce the documents for other purposes at trial. On appeal, however, the plaintiff argued that the evidence was relevant to the issue of notice and punitive damages. We refused to consider that issue, however, because of the stipulation.
The transcript very clearly indicates in this case that there was a stipulation entered into between the parties. However, the transcript further indicates, unlike Penn, that the stipulation was limited in nature. The parties here agreed only as to which would receive particular assets and not to a particular valuation. The valuation of assets was left to the court. The following colloquy occurred at the beginning of the trial:
“THE COURT: This is the time set by the Court and Counsel of Record in 24041 to hear the matter of property decision and gentlemen you may proceed.
“MR. KOMMERS: Thank you, your Honor, I represent the petitioner and I have some proposed findings for the Court and I realize that some of these will have to be changed, but I submit that now. The Petitioner and Respondent in this matter have reached agreements with respect to several matters in dispute here, and we would stipulate for the record that the following items are true and need no proof. With respect to the personal properties acquired by the couple during the term of the marriage, property has been divided and the Petitioner is in possession of a 1967 automobile, home furnishings, and a wedding ring, and the Respondent is in possession of a 1977 Buick Riviera automobile, a Honda 90, a certain number of Life of Montana corporate shares, a boat, and certain home furnishings. The evaluation of the property could not be agreed to by the parties and will be provided in testimony before the Court today.
“With respect to real estate acquired by the parties during the term of the marriage, it is agreed to be true and requires no further proof that the home consisted of real estate. The family home consisted of real estate acquired by them which was sold for the fair market value of $55,400 at which Petitioner and Respondent share equally in the net proceeds in the amount of approximately $11,458.86. That with respect to other sources of income of the parties and it is at issue today with respect to the future interest of Petitioner, the parties have agreed on a valuation of monies received from the estate of Ada Smith, and that these monies were received and used by the couple equally during the term of the marriage ...” (Emphasis added.)
Here, counsel did not agree to an overbroad stipulation. There was no agreement, for example, that the distribution of assets would remain the same if the value of the estates received by each individual party were inequitable and disproportionate. To the contrary, the stipulation was well-defined and limited. Assuming that the court would undertake a division of property that was equitable, the parties only agreed as to who would receive particular assets and left the valuation of the assets to the court. Under these circumstances, we find that husband is not precluded from raising his arguments on appeal.
This Court has held in many previous cases that, before a trial court may properly apportion the assets of a marital estate, it must first determine the net worth of the parties. Herring, supra; Brown, supra; Martinez, supra. We have also stressed the importance of valuing each asset of the marital estate. In Herring, where the District Court made no findings as to the net worth of the parties or as to the present fair market value of the substantial assets of the marital estate, we remanded and stated:
“We have held in a number of cases that, before there may be a proper distribution of marital property, the District Court must first determine the net worth of the parties. [Citations omitted.] Here, the District Court made no such finding. While the District Court did indicate that the only significant assets were the diamond rings and the lot and the home, there was no attempt to place a present, fair market value upon these items or to determine the net worth of the parties at the time of their divorce. ” Herring, 602 P.2d at 1007, 36 St.Rep. at 2054. (Emphasis added.)
In Martinez, where it was argued that we should take judicial notice of certain property values by looking to state appraisals because no evidence was introduced regarding property values at trial, we stated:
“Whether or not in retrospect these figures provide an accurate indication of fair market value, of the Billings property, however, begs the issue. Section 48-321, R.C.M. 1947, requires the trial judge to consider the property values. Neither the appraised valúa tion nor the assessed valuation were introduced as evidence at trial; nothing in the judge’s findings of fact or conclusions of law shows that he ever considered the assessed or appraised value of the land prior to his property disposition order.
“Respondent also maintains that the Mexican property is irrelevant to the property disposition because it is of negligible válue and because a Montana District Court is of no effect in Mexico. The record is silent as to the value of the Mexican property. The Mexican property is relevant to a property distribution because, although Montana Court orders encumbering or transferring title to Mexican property may be of no legal effect in Mexico, that Mexican property still is of value to the owner, is part of the owner’s estate, will affect the owner’s future needs and therefore must be considered under section 48-321.” Martinez, 573 P.2d at 669-670, 35 St.Rep. at 64. (Emphasis added.)
We find in this case that the District Court erred in not placing a value upon the aforementioned items of the marital estate and in not determining the net worth of the parties at the time of their divorce. The valuation of assets and the determination of net worth are two important steps which must be made by District Courts in the apportionment process, regardless of whether parties enter into any stipulations concerning their marital estate. From these determinations, a basis is provided from which a District Court may make, or an appellate court may decide, that an apportionment is equitable. Without these determinations, the equitable distribution of marital assets amounts only to guesswork. This case must, therefore, be remanded to the District Court so that the parties’ marital estate may be distributed on this basis.
By our decision today, we mean in no way to discourage parties in dissolution proceedings from entering into stipulations such as the case here. To the contrary, stipulations provide an economical and efficient way to handle such proceedings. We intend only to reemphasize the importance of taking certain preliminary steps before property is distributed. Where parties cannot agree as to the value of a particular asset, we further encourage counsel to provide ample testimony for the District Court regarding values. Despite the statements of counsel, that was not done here.
The remaining issues in this case are directly affected by and intertwined with our holding regarding husband’s first issue. The second issue concerns whether the District Court erred in awarding wife sole ownership of the remainder interest on the basis of the property distribution and as an alternative to maintenance. The District Court found:
The Court concludes that the respondent has made no contributions which have facilitated maintenance or [sic] the property subject to the life estate and petitioner’s remainder interest, and therefore, has no claim for any portion of petitioner’s remainder interest. Petitioner should retain sole ownership of the remainder interest. This award constitutes a portion of the property disposition and as an alternative to maintenance arrangements in favor of petitioner which would otherwise be required from the respondent.”
Husband’s primary argument is that he is entitled to a portion of the remainder interest because of his contributions while working on the Smith Ranch and his sacrifices in surrendering employment opportunities to accommodate his wife’s desire to move. We decline to rule upon this issue in view of our holding in the first issue and leave husband’s arguments to the District Court for consideration on remand. Whether wife is entitled to sole ownership of the remainder interest, especially as an alternative to maintenance, depends upon the property distribution. Maintenance is properly awarded only after the property is apportioned between the parties. In re Marriage of Herron (1980), 186 Mont. 397, 608 P.2d 97, 102; Vivian v. Vivian (1978), 178 Mont. 341, 583 P.2d 1072, 1075. The spouse seeking maintenance must lack sufficient property to provide for his/her reasonable needs and be unable to support himself/herself through appropriate employment or be the custodian of -a child whose conditions or circumstances make it appropriate that the custodian not be required to seek employment outside the home. Section 40-4-203(1), MCA.
Conceivably, on remand, when the District Court places a value upon all of the assets of the marital estate and determines the net worth of the parties, the findings may reveal that a different apportionment is appropriate. In this connection, if the court finds that the award of the remainder interest to wife is appropriate partly as an alternative to maintenance, it should make findings pursuant to section 40-4-203(1), MCA. Those findings are not present here.
The third issue in this case concerns whether the District Court erred in ordering husband to pay wife’s attorney fees. For attorney fees to be awarded in dissolution proceedings, necessity must be shown. In Re Marriage of Kaasa (1979), 181 Mont. 18, 591 P.2d 1110, 1114. Here again, whether wife is able to demonstrate necessity for an award of attorney fees depends to some extent upon the court’s apportionment of marital assets. In this regard, we also note that while husband was terminated from his job in 1977 and worked for only four months in 1978, wife is presently employed. We leave this issue to the District Court for consideration on remand.
This case is remanded to the District Court to proceed in accordance with this opinion.
MR. CHIEF JUSTICE HASWELL, and MR. JUSTICE SHEA, concur.
MR. JUSTICES SHEEHY and DALY, dissent and will file a written dissent later. | [
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MR. JUSTICE SMITH
delivered the opinion of the court.
The complaint in this action alleges that at all times mentioned the defendant was an Illinois corporation, doing business in the county of Silver Bow and state of Montana; “that on the first day of January, 1904, and upon each succeeding day subsequent thereto, in the years 1904 and 1905, in the county of Silver Bow, state of Montana, the defendant did attempt to carry on, and then and there carried on, the business of selling oleomargarine, butterine, and imitation of cheese.” It is further alleged that, between the dates mentioned, the defendant sold certain quantities of oleomargarine, butterine, and imitation of cheese, and has failed to pay the license required by law for carrying on said business. The answer admits the corporate character of the defendant and that during the times mentioned it was doing business in Silver Bow county. It denies that the defendant sold any butterine or imitation of cheese, and then further alleges as follows:
(1) “That at all the times in the complaint mentioned the defendant had a warehouse and fixed place of business in Silver Bow county, Mont., and carried on in said county the business of selling oleomargarine and other products and merchandise. That at said place of business in said county, between the first day of January, 1904, and the 31st day of December, 1905, the defendant transacted the following business, to wit: Defendant sold and delivered between said dates 40,656 pounds of oleomargarine in said county of Silver Bow, state of Montana.
“ (2) That all of said oleomargarine was manufactured outside of the state of Montana, at the city of Chicago, state of Illinois, and the same was contained in packages ranging from 10 to 60 pounds, and shipped from the defendant’s factory at Chicago, Ill., to the defendant’s warehouse in Silver Bow county, Mont., in said packages.
“(3) That all of the said oleomargarine was stored in the defendant’s warehouse in Silver Bow county, Mont., in the same packages in which it was shipped, and was thereafter sold and .delivered by defendant in such packages direct from said warehouse in Silver Bow county to the customer and purchaser thereof, and all the said sales and deliveries were made in Silver Bow county, Mont.
“(4) That no part of said oleomargarine herein mentioned was ordered or purchased by said customers until after the arrival of the same in the said county of Silver Bow and storage of the same in defendant’s warehouse as aforesaid, and that none of said oleomargarine was shipped from outside the state of Montana direct to any customer, or upon any previous order of any customer.
“(5) Defendant further alleges that section 4064 of the Political Code of Montana is in violation of and in conflict with the fourteenth amendment to the Constitution of the United States, in that the effect thereof is to deprive this defendant of its property without due process of law and to deny to this defendant the equal protection of the laws.”
The district court entered a judgment on the pleadings in favor of the state of Montana, for the sum of $406.56 with interest. Defendant appeals.
The sole question presented to this court is as to the constitutionality of paragraph 13 of section 4064 of the Political Code of 1895, as amended by House Bill No. 80, Daws of 1901, page 144 (Rev. Codes, see. 2763), under which the license was demanded, which reads as follows: “(13) Every person, company or corporation selling oleomargarine, butterine or imitation of cheese shall pay a license fee of one cent per pound for all these articles sold.” Appellant contends that the law is unconstitutional for the following reasons: •
(1) Because it is not a valid exercise of the police power of the state.
(2) It is not a valid exercise of the taxing power of the state, for the reason that section 1, Article XII, of the state Constitution, only authorizes the legislature to tax property and to impose a license tax on persons and corporations doing business in this state. It is said that the authority to tax for the purpose of raising revenue is limited by this section, which authorizes but one license tax for doing business.
(3) It is in conflict with the fourteenth amendment to the Constitution of the United States, which declares that no state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws.
(4) It creates a monopoly in restraint of trade.
(5) It is an unreasonable interference with interstate commerce.
Specifically stated, the objections to the law as a revenue measure are as follows, quoting from the brief of counsel for the appellant:
“ (1) Because, if a license, it is not a tax imposed upon persons or corporations doing business, but is a tax imposed upon persons and corporations selling the articles mentioned, which of itself does not constitute doing business.
“ (2) Because, if a property tax, it is in violation of the uniformity clause of the Constitution.
“(3) Because the classification made is unwarranted and arbitrary and does not rest upon any reasonable foundation, in consequence of which the statute is in violation of the fourteenth amendment to the Constitution of the United States.
“(4) Because the purpose of the statute is to prohibit and restrain the sale of the articles mentioned, under the guise of a tax for revenue.
“(5) Because the tax is prohibitive, and therefore in violation of the right to liberty, guaranteed by the Constitution.
“(6) Because it is vicious class legislation, clearly discriminatory, and intended to confer upon those making and selling dairy products a monopoly.”
It is claimed that the affirmative allegations of the answer raised a material issue of fact, or, at any rate, that the motion for judgment on the pleadings admitted the truth thereof, and, as this contention is not disputed by the attorney general in his brief, we may assume that the allegations of the answer are true. We find in the answer, however, no allegation to justify the conclusion that the statute grants a monopoly in restraint of trade; nor that, in application, it does not operate equally upon all persons in like situations or engaged in like pursuits; nor that it discriminates, in its operation, against the appellant, or in favor of others dealing in similar commodities, or other commodities, such as butter.
1. We shall assume that the Act imposes a license tax for the purpose of raising revenue; that no attempt is made to impose a property tax; and that it is not a police regulation; also, that oleomargarine is a pure and wholesome article of food and commerce, the sale of which cannot be prohibited by law, either directly or by indirection. The sole contention of the attorney general is that the law may be upheld as a measure exacting a license fee from those engaged in the business of selling oleomargarine.
The Act places dealers in oleomargarine, butterine, and imitation of cheese in a class by themselves for the purpose of calculating a portion of the license fee to be paid by vendors of goods, wares, and merchandise. Section 1 of Article XII of the state Constitution reads, in part, as follows: “ * * * The legislative assembly may also impose a license tax, both upon persons and upon corporations doing business in the state.” The legislature is not required to tax all occupations equally or uniformly. (State ex rel. Sam Toi v. French, 17 Mont. 54, 30 L. R. A. 415, 41 Pac. 1078.) The classification does not on its face appear to be arbitrary, unreasonable, or unjust. The legislature has power to single out dealers in oleomargarine, butterine, or imitation of cheese, and compel them to pay a license, and if the burden falls upon all such dealers alike, no one of them is aggrieved. (Quong Wing v. Kirkendall, 39 Mont. 64, 101 Pac. 250; Cunningham v. Northwestern Imp. Co., 44 Mont. 180, 119 Pac. 554.)
During the period mentioned in the complaint, section 4064, Political Code, as amended by the Laws of 1901, was in force. So much of that section as is material here reads as follows: “Sec. 4064. Every person who at a fixed place of business sells any goods, wares and merchandise, drugs or medicines, jewelry or wares of precious metals, whether on commission or otherwise, and all butchers, must obtain from the county treasurer of the county in which the business is transacted, and for each branch of such-business, [a] license, and pay quarterly therefor an amount of money to be determined by the class in which such person is placed by the county treasurer; such business to be classified and regulated by the amount of the monthly average sales made or hiring done, and at the rate following: Those who are estimated to make average monthly sales to the amount: (1) Of one hundred thousand dollars or more, constitute the first class, and must pay seventy-five dollars per month. [Paragraphs 2 to 12 provide for the payment of graduated licenses of from sixty dollars to one dollar, dependent upon the amount of monthly sales. Paragraph 13 is the one we have under consideration.] (14) Every person who keeps a public weighing or platform scales for hire shall pay a license of ten dollars per year. (15) Every person or persons who is engaged in the business of selling cigarettes, cigarette paper or materials used in the making of cigarettes, except tobacco, shall pay a license of ten dollars per month, in addition to any other license herein provided for.” Paragraph 15 is evidently a police regulation, as well as a revenue measure.
It is contended that in enacting section 4064, supra, and kindred sections, the legislature exhausted the power to impose licenses given it by the Constitution, and for the purposes of this decision we may assume, without deciding, that such was the case. But the appellant goes further and contends that, having enacted the first twelve paragraphs of the section, the legislature was powerless to impose an additional tax on persons engaged in selling, oleomargarine at a fixed place of business. This argument is founded in a misconception of the purpose and scope of section 4064. Paragraphs 13 and 15 are as much a part of the section as are the preceding paragraphs. All parts thereof must be read together. The general design of the legislature was to impose a license tax upon persons engaged in selling goods, wares, and merchandise at a fixed place of business, graduating the tax, for the most part, according to the amount of monthly sales; but in .case such persons sold oleomargarine, butterine, or imitation of cheese as a part of the goods, wares, and merchandise so handled by them, the proceeds of such sales should not be included in the monthly sales theretofore mentioned, but such persons should pay a tax of one cent per pound for the privilege of selling those articles. It is very clear that the amounts received from the sales of oleomargarine, butterine, or imitation of cheese were not to be included in the monthly sales mentioned in paragraphs 1 to 12, because the legislature found apt words in paragraph 15 to express its intention to impose an additional license tax on those engaged in selling cigarettes and cigarette material.
We find, then, that the legislature, pursuant to section 1, Article XII, of the Constitution, exercised its authority to impose a license tax on persons and corporations doing business in this state, by enacting: (a) That every person who at a fixed place of business sold any goods, wares, or merchandise, drugs, medicines, jewelry, or wares of precious metals, and all butchers, should pay a graduated license tax in accordance with the amount of their monthly sales; (b) that every person, company, or corporation who also sold oleomargarine, butterine or imitation of cheese should pay a license tax, fixed on a basis of one cent per pound on all such articles sold, not in addition to the license on his or its sales including the sales of those articles, but as a part of the same license, figured on a different basis and not included in the amount of monthly sales; (c) that every person engaged in the business of selling cigarettes or cigarette materials should pay a license of $10 per month in addition to the license on his monthly sales including the sales of those articles. In the preparation of this opinion we have given no thought to the ease of a person engaged solely in the business of selling oleomargarine, butterine, or imitation of cheese, and what is said must be read with this in mind.
But it is contended that paragraph 13 of the statute imposes a license tax upon a person or corporation for each sale made in conducting the business, and thereby exacts several licenses for doing a single business. But such is not its purpose or effect. The statute imposes but one license tax for doing business, but the amount thereof is found by making two calculations instead of one. We know of no objection to this method of procedure. Although the terminology of paragraph 13 is somewhat different from that of the preceding paragraphs, we have no doubt that its effect is the same, to-wit, to impose a license tax upon persons and corporations doing business in the state. We have already demonstrated, we think, that no double taxation, or extra taxation, is imposed npon those who at a fixed place of business sell oleomargarine, butterine, or imitation of cheese, as well as other articles of merchandise. So far as this appellant is concerned, we find no difficulty in holding that one who sells 40,000 pounds of oleomargarine in two years in one county of the state is engaged in the business of selling that article and is “doing business” within the meaning of the constitutional provision above quoted, regardless of the admission in the answer that it is also selling other goods, wares, and merchandise, at the same fixed place of business. The effect of the statute on others who may deal in oleomargarine alone is no concern of the appellant. (Uihlein v. Caplice Commercial Co., 39 Mont. 327, 102 Pac. 564.)
2. Having decided that the tax in -question is a license tax imposed upon persons and corporations doing business in this state as vendors of oleomargarine, for the privilege of carrying on said business, we further hold, on the authority of Osborne v. Mobile, 16 Wall. 479, 21 L. Ed. 470, American Harrow Co. v. Shaffer (C. C.), 68 Fed. 750, and 7 Cyc. 483, that the •Act is not repugnant to clause 3, section 8, of Article I of the Constitution of the United States, giving to Congress the power to regulate commerce among the several states.
The judgment is affirmed.
Affirm, ed.
Me. Chief Justice BRANtly and Mb. Justioe Holloway concur.
Rehearing denied May 3, 1912.
Appeal taken to supreme court of the United States on May 6, 1912. | [
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] |
MR. JUSTICE STARK
delivered the opinion of the court.
The American Bank & Trust Company of Great Falls, Montana, at the times herein mentioned, was, and still is, a banking corporation, organized under the laws of this state. On December 3, 1921, this 'bank, being insolvent, closed its doors to business, and on January 7, 1922, plaintiff was appointed and qualified as receiver thereof, and has continued to act in that capacity at. all times since.
On January 15, 1915, the defendant William Springer became the owner of ten shares of the capital stock of this bank of the par value of $100 each, and has since remained such owner. On June 7, 1923, an assessment of $100 per share was duly levied upon all stock in the bank, including that of the defendant Springer. The latter neglected and refused to pay the amount levied upon his stock, whereupon the plaintiff herein, having been duly authorized to do so, brought suit against him to recover the amount. Such proceedings were had in that action that on February 20, 1924, a judgment was duly given and made therein in favor of the plaintiff and against the defendant for the amount of $1,000, with interest. Execution was issued upon this judgment, but it was found that on June 12, 1923, five days after the levy of the assessment upon his stock, defendant William Springer had recorded a deed purporting to convey all of his property, valued at $8,930, to his wife, the defendant Elizabeth Springer, for a consideration of $1. Thereupon the execution was levied upon the interest of the defendant William Springer in the real property, and, it appearing that he had no other property out of which the judgment could be satisfied, this action was brought to set aside the above-mentioned deed and subject the property therein described to the execution.
The above deed purported to be dated the - day of March, 1912. It was acknowledged by William Springer before a notary public on March 12, 1912. It was delivered to the county recorder by William Springer in person on the twelfth day of June, 1923, duly recorded in the records of Cascade county and then returned to him. There ’was no showing that this deed was ever out of the possession of William Springer prior to the time that he turned it over to the county recorder for record, nor was there any testimony that he had ever mentioned the deed to any person. There was no evidence of any change in possession or control of the property conveyed or that the defendant Elizabeth Springer was present when the deed was signed or acknowledged or ever knew of its existence either before or after it was recorded. There was no testimony, direct or indirect, that the $1 mentioned in the deed did not express the full and actual consideration therefor.
At the trial of the case the issues were submitted to a jury for determination, and in response to two special interrogatories submitted they found that the deed in question had been delivered to the defendant Elizabeth Springer before the clos ing of the bank on December 3, 1921, and that the transfer of the property by said deed was made in good faith without intent to hinder, delay or defraud the plaintiff as receiver of the bank.
Plaintiff duly moved the court to reject the findings of the jury and to adopt findings, make conclusions of law, and enter judgment in his favor, which was denied; 'but the court sustained a motion made by defendants to adopt the findings of the jury and enter judgment in their favor. In accordance with this determination a judgment was entered in favor of defendants and against the plaintiff, from which the plaintiff has appealed.
Only one question is, presented for consideration, viz.: Is the evidence sufficient to sustain the judgment? Under the rule heretofore adhered to by this court, if there is a substantial conflict in the evidence, this court will not disturb the judgment of the trial court on the ground of its insufficiency.
It is apparent that the determinative question in the case is: When, if at all, was the deed from defendant William Springer delivered to the defendant Elizabeth Springer? If the deed was delivered in March, 1912, the appellant has no cause for complaint, for the bank was not then an existing creditor of the defendant William Springer. On the other hand, if the deed was not delivered until June, 1923, the date of its recordation, then the defendants have no defense to the plaintiff’s cause of action, for the plaintiff, as receiver of the bank, was at that time an existing creditor of the defendant William Springer, and the defendants did not controvert by evidence, direct or indirect, the presumption of fraud arising in favor of an existing creditor in respect to a voluntary conveyance from husband to wife with the present inability of such husband to satisfy the judgment upon which the action is 'based, under the rules laid down in the' analogous cases of Security State Bank v. McIntyre, 71 Mont. 186, 228 Pac. 618, and Hart-Parr Co. v. Schafer, 73 Mont. 429, 236 Pac. 675. This .much is conceded by counsel for both sides of the controversy.
Delivery is the final act which consummates a deed. Until there was a delivery of the deed by the grantor, William Springer, to the grantee, Elizabeth Springer, title to the described property did not vest in her. “A grant takes effect, so as to vest the interest intended to be transferred, only upon its delivery by the grantor.” (See. 6843, Rev. Codes 1921.)
Actual, manual delivery is not required. Section 6848. provides: “Though a grant be not actually delivered into the possession of the grantee, it is yet to be deemed constructively delivered in the following cases: 1. Where the instrument is, by the agreement of the parties at the time of execution, understood to be delivered, and under such circumstances that the grantee is entitled to immediate delivery; or, 2. Where it is delivered to a stranger for the benefit of the grantee, and his assent is shown, or may be presumed.”
The facts and circumstances which have been held sufficient to constitute the actual or constructive delivery of a deed are exceedingly numerous and varied. (8 R. C. L., p. 985, sec. 53.) While delivery may be by either words or acts, or both combined, and actual, manual handing over of the deed to the grantee by the grantor is not required, it is settled that delivery is not complete until the grantor has so dealt with the instrument as a means of- divesting his title as to lose all control over it and place it beyond the right of recall. It is required that the grantor shall unequivocally indicate it to be his intention that the instrument shall take effect as a conveyance of property in order to have it produce that result. (Hibberd v. Smith, 67 Cal. 547, 56 Am. Rep. 726, 4 Pac. 473, 8 Pac. 46; Fain v. Smith, 14 Or. 82, 58 Am. Rep. 281, 12 Pac. 365.)
To sustain their contention that the deed was delivered in March, 1912, counsel for defendants rely upon section 6844, Revised Codes of 1921, which declares, “A grant duly executed is presumed to have been delivered at its date,” and on section 10598, which provides: “Every instrument conveying or affecting real property, acknowledged or proved and certified, as provided in the Civil Code, and every instrument authorized by law to be filed or recorded in the county clerk’s office, may, together with the certificate of acknowledgment or proof, be read in evidence in an action or proceeding, without further proof; also, the original record of such conveyance or instrument thus acknowledged or proved, or a certified copy of the record of such conveyance or instrument thus acknowledged or proved, may be read in evidence, with the like effect as the original instrument, without further proof.”
This deed was acknowledged as provided in the Civil Code (Rev. Codes 1921) and the certificate of acknowledgment attached conforms to section 6914, which requires it to state that the person signing the deed acknowledged to the certifying officer that he executed the same, and so was entitled to be read in evidence without further proof. “The execution of an instrument is the subscribing and delivering it.” (Sec. 10581.)
While there is some divergence in judicial expression as to the effect of the acknowledgment of an instrument, it appears to us that the better rule is that laid down in the case of Albany County Sav. Bank v. McCarty, 149 N. Y. 71, 43 N. E. 431, where it is said: “The officer, by a solemn official act, certifies to the acts and declarations of the person appearing before him, and those acts and declarations are thereby stamped with the character of evidence, tending to establish whatever those acts and declarations would establish if proved by oral testimony in a court of justice. We think that, as between the parties, a certificate of acknowledgment, when read in evidence, makes out a prima facie case as strong as if the facts certified had been duly sworn to in open court by a witness, apparently disinterested and worthy of belief. The legal presumption of the proper performance of official duty by a public officer requires that this effect should be given it.” (Andrews v. Reed (Kan. Supp.), 48 Pac. 29; Sheldon v. Freeman, 116 Mich. 646, 74 N. W. 1004; Currier v. Clark, 145 Iowa, 613, 124 N. W. 622.) This evidence, however, is not conclusive and it may be rebutted by other facts or presumptions. (Albany County Sav. Bank v. McCarty, supra.)
So, when plaintiff introduced the original record of the deed from William Springer to Elizabeth Springer, he established prima facie that it had been signed and delivered; that it was a valid instrument and conveyed the interest it was intended to convey. This fact being established, prima facie, the presumption declared in section 6844 would attach; that is, that the deed was delivered at its date, which was March -, 1912. Had plaintiff stopped at this point, his case would have failed,, but he went further and showed that the grantor, William Springer, had possession of the deed on June 12, 1923, and had, himself, turned it over to the recorder for recordation; that after being recorded it was returned to him; and also that he had remained in the possession and control of the described premises for the eleven years and three months intervening between the date of the deed and the time of its recordation.
It is generally held that the possession of a deed by the grantor long subsequent to its date and before recordation raises a presumption that the same had not been delivered.
Section 6844, supra, is identical with section 466 of the Field Civil Code. Under this section, as reported in the Field Code, citation is made to the case of Harris v. Norton, 16 Barb. (N. Y.) 264, in which it is said with reference to the presumption declared that “It is utterly repelled when it appears in the proofs that the instrument continued in the hands of the grantor after its date.” And in the cited ease reference is made to the earlier case of Elsey v. Metcalf, 1 Denio (N. Y.), 323, wherein it is stated: “The presumption never prevails against direct evidence. Here there is affirmative proof that some time after the date of this deed it was in the hands of the 'grantor. This destroys the presumption of a delivery at its date.”
Section 923 of. the Civil Code of South Dakota is the same as section 6844, supra. In the ease of Cassidy v. Holland, 27 S. D. 287, 130 N. W. 771, the court said: “Where a deed is found in the possession of the grantor unexplained, the presumptions in relation to the delivery, thereof are exactly opposite to those where the deed comes from the possession of the grantee. We are of the opinion that section 923, Civil Code, has no reference to a deed in the possession of the grantor.” And in that case it was held that the burden was upon the party claiming under the deed to produce before the court satisfactory evidence to overcome the presumption of nondelivery arising from the possession of the deed by the grantor, or, in other words, that the burden was on such party to satisfy the court by evidence that a delivery had been made by the grantor to the grantee. (See, also, Shelter v. Stewart, 133 Iowa, 320, 107 N. W. 310, 110 N. W. 582; Tyler v. Hall, 106 Mo. 313, 27 Am. St. Rep. 337, 17 S. W. 319.)
Upon the record before us, when the evidence closed, the plaintiff had made out a prima facie case of the nondelivery of the deed prior to the time of the levy of the assessment upon the stock of the defendant William Springer. The defendants did not produce any evidence to overcome the prima facie ease. It follows that the findings of the jury upon the two questions submitted to them were not supported by any evidence whatever; that the same should have been rejected by the court; and that judgment should have been entered in favor of the plaintiff.
This being an equity ease, under the rule announced in Feeley v. Feeley, 72 Mont. 84, 231 Pac. 908, and Hart-Parr Co. v. Schafer, supra, tbe judgment is reversed, and tbe cause remanded to tbe district court, with directions to reject tbe findings of the jury and to make findings and enter judgment in favor of the plaintiff in accordance with the prayer of his complaint.
Reversed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Matthews concur. | [
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] |
JUSTICE GRAY
delivered the Opinion of the Court.
L. Michael Beasley appeals an order of the Eleventh Judicial District Court, Flathead County, granting summary judgment in favor of Semitool, Inc., Semitherm, Inc. and Raymon Thompson on his claim for wrongful discharge, breach of express and implied contract, and breach of the covenant of good faith and fair dealing. We reverse.
The sole issue on appeal is whether the District Court erred in concluding that the Wrongful Discharge Act barred Beasley’s contract claims for breach of express and implied contract and breach of the covenant of good faith and fair dealing.
While L. Michael Beasley (Beasley) was working as an electronics project engineer in Kentucky, an agent of Semitool, Inc. (Semitool) began employment negotiations with Beasley. Semitool, located in Kalispell, manufactures products in the electronics, memory disk and semiconductor industry. On June 3, 1986, Semitool offered Beasley the position of “Product Marketing Manager for Spray Acid Tool,” which Beasley accepted eight days later. Beasley contends that Semi-tool’s offer included oral promises of stock options, bonuses tied to sales increases and opportunities for advancement not specifically set forth in the letter offering him the position.
Beasley moved to Kalispell, began working for Semitool and received excellent job evaluations. In November of 1987, he was transferred to Semitherm, Inc. (Semitherm), a sister company of Semitool, to lead the development, marketing and production of a vertical diffusion furnace. He alleges that this transfer was accompanied by oral promises of raises, higher bonuses, and stock options. On January 28,1989, Beasley resigned from Semitherm, citing the company’s failure to keep its compensation-related promises.
On February 13, 1990, Beasley filed a complaint against Semi-tool, Semitherm and Raymon Thompson (collectively hereafter Semitool) for breach of express and implied contract, breach of the covenant of good faith and fair dealing, and wrongful discharge. Semitool moved for summary judgment, arguing that the Montana Wrongful Discharge From Employment Act (Wrongful Discharge Act) provided Beasley’s exclusive remedy and that he could prove no damages under the Wrongful Discharge Act. The District Court granted Semitool’s motion, and entered judgment against Beasley. This appeal follows.
Initially, we note that Beasley was hired by a Texas firm at a significantly higher salary soon after his resignation from Semitherm. As a result, Beasley has abandoned his claim for wrongful discharge on appeal.
Did the District Court err in concluding that the Wrongful Discharge Act barred Beasley’s contract claims for breach of contract and breach of the covenant of good faith and fair dealing?
In its order, the District Court first stated that Beasley’s three claims for damages were based on the same facts and that the acts complained of occurred during the employment relationship. The court focused on § 39-2-913, MCA, of the Wrongful Discharge Act, which reads:
Preemption of common-law remedies. Except as provided in this part, no claim for discharge may arise from tort or express or implied contract.
The District Court then determined that this provision of the Wrongful Discharge Act barred Beasley’s contract claims. It concluded that Beasley would be unable to prevail on his complaint under any set of facts because his contract claims were barred as a matter of law and he could prove no damages under the Wrongful Discharge Act. Therefore, the District Court granted summary judgment for Semitool.
Our standard in reviewing a grant of summary judgment is the same as that initially utilized by the trial court. McCracken v. City of Chinook (1990), 242 Mont. 21, 24, 788 P.2d 892, 894. Summary judgment is appropriate when the pleadings, depositions, and other documents on file demonstrate that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. In its order, the District Court assumed the facts alleged by Beasley to be true and concluded, as a matter of law, that the Wrongful Discharge Act barred Beasley’s contract claims. Therefore, we focus our initial inquiry on this legal conclusion. Our review of legal questions is plenary. See Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 603.
Beasley agrees that the Wrongful Discharge Act is the exclusive remedy for claims arising from an employee’s discharge and that no discharge claim thereunder can arise from tort or express or implied contract. He argues, however, that his contract claims arise from Semitool’s failure to abide by its representations during his employment and, therefore, that his breach of contract and covenant claims occurred both prior to, and independent of, his resignation. On that basis, Beasley argues that his independent contract-based claims for damages are not affected or barred by the Wrongful Discharge Act.
In interpreting statutes, including the Wrongful Discharge Act, we first look to the plain meaning of the words used. Allison v. Jumping Horse Ranch, Inc. (1992), 255 Mont. 410, _843 P.2d 753, 755, 49 St.Rep. 1039, 1040. To interpret a phrase within the plain meaning rule, the language used must be reasonably and logically interpreted, giving words their usual and ordinary meaning. Allison, 843 P.2d at 755. Furthermore, it is the function of the courts to ascertain and declare what in terms or substance is contained in a statute; it is not our function to insert what has been omitted or omit what has been inserted. Section 1-2-101, MCA; City of Bozeman v. Racicot (1992), 253 Mont. 204, 208, 832 P.2d 767, 769.
Turning to § 39-2-913, MCA, we must give effect to the entirety of the statute, which reads: “[e]xcept as provided in this part, no claim for discharge may arise from tort or express or implied contract.” The usual and ordinary meaning of “claim for discharge” does not encompass any and all claims an employee may have against the employer, but only those claims for damages caused by an asserted wrongful discharge. The District Court’s interpretation of § 39-2-913, MCA, effectively omits the words “for discharge” from that statute and results in a sweeping preemption of all other claims arising out of the employment relationship. This result disregards the stated purpose of the Wrongful Discharge Act, which is to set forth “certain rights and remedies with respect to wrongful discharge.” Section 39-2-902, MCA (emphasis added). We conclude that § 39-2-913, MCA, bars claims for discharge arising from tort or implied or express contract, but does not bar all tort or contract claims merely because they arise in the employment context.
Semitool contends that because Beasley relied on the same set of facts for each cause of action in his complaint, he presented one claim and three alternative theories of recovery, two of which are barred by the Wrongful Discharge Act. It may be true that Beasley’s complaint is not a model of artful pleading and that the manner in which it is structured creates confusion. Rather than specifying which factual allegations support each cause of action individually, Beasley sets forth all of his factual allegations at the beginning of the complaint; he then separately sets out his causes of action, essentially incorporating all of the factual allegations into each count. However, Beasley does aver his contract damages separately from the damages claimed for wrongful discharge. The complaint is sufficient to indicate Beasley’s intent to plead the causes of action as separate and independent claims.
Further, Rules 8(a) and 18(a), M.R.Civ.R, specifically allow the joinder of alternative claims in a complaint. Mere joinder of alternative or inconsistent claims in a complaint does not require dismissal of an otherwise legitimate claim. See Bozeman Deaconess Foundation v. Cowgill (1963), 143 Mont. 98, 100, 387 P.2d 435, 436. Nor does the Wrongful Discharge Act limit a claimant’s right to plead independent causes of action in conjunction with a claim under the Wrongful Discharge Act. We conclude that Beasley’s reliance in his complaint on the same set of facts for his three causes of action does not require dismissal of the alleged independent contract-based claims.
Semitool further argues that Dagel v. City of Great Falls (1991), 250 Mont. 224, 819 P.2d 186, relied on by the District Court, requires the dismissal of Beasley’s contract claims. It does not. Dagel did not concern, as does the case before us, the effect of the Wrongful Discharge Act on claims which are separate and independent from the claim of wrongful discharge. A close examination of the allegation in plaintiff’s complaint on which we focused in Dagel illustrates the distinguishing characteristics between Dagel and the present case:
8. By reason of Plaintiff’s satisfactory service and the performance of her duties, her employer’s assurances, policies, and procedures, salary increases, and the absence of criticism of her performance, there was an implied promise by the City that Plaintiff’s employment would not be terminated and she would not be discharged except for just cause. In terminating Plaintiff’s employment as alleged, the City wrongfully, unreasonably and tortiously violated its implied promise and its duty implied in the employment relationship to deal fairly and in good faith with Plaintiff.
Bagel, 819 P.2d at 194. Clearly, Bagel sets forth a tort claim for breach of the implied covenant of good faith and fair dealing relating to the plaintiff’s discharge. The only conceivable contract-based claim found in the complaint in Bagel is the allegation regarding an “implied promise by the City that Plaintiff’s employment would not be terminated. ...” Most importantly, however, it is clear both the tort and implied contract claim in Bagel are completely and inextricably intertwined with and based on Dagel’s termination and discharge. Bagel is simply inapplicable here.
In sum, the Wrongful Discharge Act is the exclusive remedy for claims arising from an employee’s wrongful discharge. Beasley’s contract-based claims, taken as true solely for purposes of the issue before us, arise from Semitool’s breach of his employment contract rather than from an alleged wrongful discharge. We hold that the District Court erred in granting summary judgment for Semitool on Beasley’s contract-based claims.
Finally, Semitool argues that even if Beasley’s remaining contract-based claims are not barred by the Wrongful Discharge Act, he did not present a prima facie case on those claims and, therefore, summary judgment is appropriate. Furthermore, Semitool argues that Beasley’s allegations of oral representations concerning the employment contract are barred by the statute of frauds.
It is well settled that this Court will not address on appeal an issue not presented to the district court. Wyman v. BuBray Land Realty (1988), 231 Mont. 294, 299, 752 P.2d 196, 200. Before the District Court, Semitool argued only that the Wrongful Discharge Act barred Beasley’s contract claims and that he had not suffered compensable damages under the Act; it did not present and, accordingly, the District Court did not address the additional issues now presented by Semitool. Having determined that the District Court’s legal conclusion that the Wrongful Discharge Act barred Beasley’s contract claims was in error, we leave further consideration of the contract-based issues for the District Court on remand.
Reversed and remanded for further proceedings consistent with this opinion.
CHIEF JUSTICE TURNAGE, JUSTICES TRIEWEILER, HUNT, HARRISON, McDONOUGH and WEBER concur. | [
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JUSTICE WEBER
delivered the Opinion of the Court.
This is an appeal of an order of the Youth Court in the Fourth Judicial District, Missoula County, ordering the youth’s placement at Pine Hills School for Boys until he reaches the age of eighteen years. We reverse.
The sole issue for our review is whether the Youth Court had the authority to determine the length of time B.L.T. must spend at Pine Hills School for Boys when custody was committed to the Department of Family Services.
B.L.T. was placed in Pine Hills School for Boys (Pine Hills) for the first time in January 1991. He remained there until April 4, 1991 when he was released by the Department of Family Services (Department). On December 18, 1991, a second petition was filed with the Youth Court alleging that B.L.T. was a delinquent youth because he had committed two subsequent thefts. While he was being transported to Pine Hills on January 3, 1992 to await trial on the theft charges, he and another youth escaped from the transport van in a car stolen by a third youth.
On January 9,1992, after the prearranged escape from the transport van, the petition was amended to allege an additional count of theft and one count each of escape and criminal mischief. On May 11, 1992, pursuant to an agreement between the youth and the State, these charges were amended, alleging that B.L.T. had committed an unauthorized use of a motor vehicle, a theft by accountability, and escape. B.L.T. admitted to these charges.
The Youth Court ordered that 15-year-old B.L.T. be committed to the custody of the Department, with placement at Pine Hills until he reaches the age of eighteen years. The Youth Court’s order gave custody of B.L.T. to the Department on May 13, 1992. Section 41-5-103(17) defines “legal custody” as follows:
(a) “Legal custody” means the legal status created by order of a court of competent jurisdiction that gives a person the right and duty to:
(i) have physical custody of the youth;
(ii) determine with whom the youth shall live and for what period;
(iii) protect, train, and discipline the youth; and
(iv) provide the youth with food, shelter, education, and ordinary medical care. (Emphasis supplied.)
B.L.T. contends that the Youth Court could not give legal custody to the Department and at the same time retain the power to control where he will live for a specified period of time. B.L.T. further contends that after the Youth Court has placed him at Pine Hills, the Department has the sole authority to determine when he is in need of less restrictive placement and is sufficiently rehabilitated to leave Pine Hills. The Youth Court’s order, he argues, is more like a sentence imposed upon habitual offenders and is not in keeping with the purpose of the Youth Court Act — rehabilitation and not retribution.
The Youth Court’s judgment will not be overruled unless it is clear that the court abused its discretion. In the Matter of T.A.S. (1990), 244 Mont. 259, 263, 797 P.2d 217, 220.
The Montana Youth Court Act, Title 41, Chapter 5, MCA, governs the handling of youth offenders in Montana. The Youth Court Act has a specific statement of purposes which is stated in § 41-5-102, MCA, as follows:
Declaration of purpose. The Montana Youth Court Act shall be interpreted and construed to effectuate the following express legislative purposes:
(1) to preserve the unity and welfare of the family whenever possible and to provide for the care, protection, and wholesome mental and physical development of a youth coming within the provisions of the Montana Youth Court Act;
(2) to remove from youth committing violations of the law the element of retribution and to substitute therefor a program of supervision, care, rehabilitation, and, in appropriate cases, restitution as ordered by the youth court;
(3) to achieve the purposes of (1) and (2) of this section in a family environment whenever possible, separating the youth from his parents only when necessary for the welfare of the youth or for the safety and protection of the community;
(4) to provide judicial procedures in which the parties are assured a fair hearing and recognition and enforcement of their constitutional and statutory rights.
Before ordering the placement of a delinquent youth in a youth correctional facility, the Youth Court must determine that the youth is a serious juvenile offender and that such placement is necessary for the protection of the public. Section 41-5-523(l)(b)(ii), MCA. The Youth Court here determined that B.L.T. was a serious juvenile offender and committed him to the Department, specifying that B.L.T. be placed in Pine Hills. In making this order, the Youth Court made the requisite finding that such placement was necessary for the protection of the public.
Section 41-5-523(2), MCA, states: “When a youth is committed to the department, the department shall determine the appropriate placement and rehabilitation program for the youth ....” Two provisions in the Youth Court Act concern jurisdiction of the Youth Court after it has committed a youth to the Department:
Retention of jurisdiction. Once a court obtains jurisdiction over a youth, the court retains jurisdiction unless terminated by the court or by mandatory termination in the following cases:
(1) at the time the proceedings are transferred to adult criminal court;
(2) at the time the youth is discharged by the department, and
(3) in any event, at the time the youth reaches the age of 21 years. (Emphasis supplied.)
Section 41-5-205, MCA.
Continuing jurisdiction of youth court. The youth court committing a delinquent youth or a youth in need of supervision to the department of family services retains continuing jurisdiction over the youth until the youth becomes 21 years of age or is otherwise discharged by the department after notice to the youth court of original jurisdiction. (Emphasis supplied.)
Section 41-3-1114, MCA. These statutes were changed significantly by the 1987 legislature. Section 41-5-205(2), MCA (1985), previously provided that the Youth Court lost jurisdiction “at the time of commitment of the youth to the custody of the department of institutions” and § 41-3-1114, MCA (1985), previously provided:
The youth court placing a delinquent youth or a child in need of supervision in a youth care facility retains continuing jurisdiction over the youth until the youth becomes 21 years of age or is otherwise discharged by order of the court. (Emphasis supplied.) The 1987 legislature enacted House Bill 325 (HB 325), which
consolidated services affecting youth into the Department of Family Services. The 1987 revisions of the above-quoted statutes reflect the expanded role of the Department in youth services and the diminished role of the youth courts. In a joint hearing of the State Administration Committee conducted on January 23,1987, a member of the Youth Services Study Council, speaking in support of HB 325, emphasized that services to youth were very fragmented resulting in no continuity or flexibility and that the bill would dramatically change the judge’s dispositional authority. Other proponents of HB 325 shared their concerns that the bill as originally drafted would limit the youth court in the disposition it could take over a youth — limiting it to either placing the youth on probation or committing the youth to the department. They felt that the youth courts should be given a little more authority. Subsequently, the legislation was amended to include the authority of the youth court to specify placement of delinquent youths to a youth correctional facility provided that the youth is first determined to be a serious juvenile offender.
The outline of HB 325 prepared prior to its consideration by the legislature contains the following statements:
Section 54 amends 41-5-205 to allow the youth court’s jurisdiction of a youth to continue until the new department discharges a youth. Currently, this statute terminates the youth court’s jurisdiction at the time the youth is committed to the state. This amendment is in accordance with the Council’s recommendation to alter the dispositional options available to the youth court in Section 60, but to allow the youth court to continue to be involved at the judge’s discretion by extending the court’s jurisdiction. Some have indicated that allowing continued jurisdiction is messy, but the Council wanted to be sure that youth court judges have an obvious method to review cases if questions arise.
Section 60 is the amendment to the dispositional options available to the youth court judge. The Council recommended that the youth court judge should have the authority to order placement of youth in need of supervision or a delinquent youth, but that the new department, which is responsible for the funding for the placement, be the party responsible to place the youth. ... Placement advise (sic) and recommendations would become decisions by departmental staff who are currently youth court staff.
1) ... This amendment continues all of the existing dispositional authority of the judge with the exception of the actual facility or home the youth is placed. Some judges indicated that they need to be able to protect their communities from dangerous juvenile offenders. The Council then recommended that the judges be able to require a physically secure placement in the case of public safety. With the definition of the “serious juvenile offender” added ... and the amendments ..., that recommendation is accomplished. (Emphasis supplied.)
Before the consolidation of youth services into the Department of Family Services in 1987, a youth court could sentence a youth to a facility for any period of time up to the child’s 21st birthday. Section 41-2-1113, MCA (1985). The 1987 legislature repealed § 41-2-1113, MCA (1985), and the provision that the court may place a delinquent youth in a facility for any period of time up to the child’s 21st birthday is no longer a part of the Youth Court Act.
It is clear from the Declaration of Purpose of the Youth Court Act that the express legislative purposes include the removal of an element of retribution, and the substitution of a program of supervision, care, rehabilitation, and in appropriate cases, restitution. Matter of T.A.S., 797 P.2d at 220. The statutes do not give to the Youth Court the specific power to fix a determinate amount of time to be served. That is consistent with the elimination of the element of retribution.
In § 41-5-106, MCA, the legislature has emphasized that the placement to a youth correctional facility shall not be deemed commitment to a penal institution, and such an adjudication shall not be deemed a criminal conviction. As stated in In the Matter of C.S. (1984), 210 Mont. 144, 146, 687 P.2d 57, 59:
A sentence of imprisonment following a criminal conviction is imposed because a particular crime was committed, and its purpose is both retributional and rehabilitational. Though a juvenile commitment is usually triggered by a crime, the commitment is strictly for rehabilitation, not retribution.... There is more than an artificial distinction between commitment under the Youth Court Act and sentencing under the Montana Criminal Code. Thus an adult sentenced for a crime and a juvenile committed to the youth authorities are not similarly situated with respect to the purpose of their detention.
Similarly in Matter of T.A.S., 797 P.2d at 220, this Court reemphasized these points, stating:
Both the Youth Court Act and this Court have made it clear that a delinquent youth is not committed to the Department as punishment for a crime, but is committed as a delinquent youth for care, protection and rehabilitation. ... Commitment is strictly for rehabilitation, not retribution.... The purpose of the Youth Court Act is “to provide a mechanism through which the state can act as the parens patriae of its youth.” (Citations omitted.)
The Youth Court does have a statutorily reserved power to revoke or modify a disposition. In In the Matter of the Application of Robert Peterson on Behalf of B.S.M. (1989), 235 Mont. 313, 767 P.2d 319, 321, this Court stated:
The power of the Youth Court is not diminished through granting the Department placement power of a delinquent youth. The court has the exclusive power to sentence the youth. If the court chooses to place the youth with the Department, it is just one of the possible proper dispositions. Furthermore, the court reserves residual power, pursuant to § 41-5-523(5), which allows it to revoke or modify the disposition of the Department at any time, upon notice to the Department and subsequent hearing. This assures that the youth retains his rights in case the Department exceeds or abuses its authority.
Peterson farther concluded that the youth court has authority to review Department decisions to determine if the placement is in the best interests of the minor. Peterson, 767 P.2d at 321. The Department’s broad authority to fashion rehabilitation programs for youths committed to its care is not diminished when the court adjudges the child a “serious offender” and specifies that the youth be placed in a state youth correctional facility under § 41-5-523(l)(b)(ii), MCA, except to the extent that the initial placement choice has already been made.
Other states with similar statutory schemes have determined that the rehabilitative goals of their juvenile offender acts require that ultimate authority over the child rest with the appropriate human services agency, not the court. In so holding, the West Virginia Supreme Court commented that “it is quite likely that a rule which would permit courts to sentence children for a definite term would confound the rehabilitation and behavior modification program of the institution.” State ex rel. Washington v. Taylor (W. Va. 1980), 273 S.E.2d 84, 86. See also In re the Welfare of Lowe (Wash. 1978), 576 P.2d 65.
It is important that we emphasize the distinction between the present case and Matter of T.A.S. In Matter of T.A.S., after reviewing the theory of commitment to the Department as not being punishment for a crime but for care, protection and rehabilitation in order to provide a mechanism through which the State could act as the equivalent of a parent for the youth, this Court concluded that it was not an abuse of discretion to commit the youth to the Department until age 19. Matter of T.A.S., 797 P.2d at 220. It is important to keep in mind the broad discretion given to the Department under the Youth Court Act. When a youth is committed to the Department, the Department has the statutory power to determine appropriate placement and rehabilitation programs for the youth, subject to various statutory limitations. As a result, a commitment to the Department is not equivalent to a commitment to a specific state correctional facility, such as Pine Hills. If the Youth Court in the present case had committed B.L.T. to the Department for a specified period of time, we would have approved that determination. However, there is no legislative authority granting the Youth Court the power to commit B.L.T. to Pine Hills School for Boys, a specific correctional facility, for a specified period of time.
We hold that the Youth Court did not have the authority here to determine the length of time B.L.T. should spend at Pine Hills.
Reversed and remanded for further proceedings consistent with this opinion.
JUSTICES HUNT, TRIEWEILER, GRAY and McDONOUGH concur. | [
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] |
JUSTICE TRIEWEILER
delivered the Opinion of the Court.
This is an appeal from an order of the Fifth Judicial District Court, State of Montana, terminating a mother’s parental rights to her four children and awarding permanent legal custody to the Department of Family Services. The mother asserts on appeal that the District Court violated her constitutional right to due process and denied her statutory right to appointed counsel when the court refused to appoint counsel for her at the hearing to terminate her parental rights. We reverse.
The dispositive issue on appeal is:
Did the District Court err when it refused to appoint counsel to represent an indigent mother in proceedings brought to involuntarily terminate her parental rights?
On August 13, 1990, the Department of Family Services (DFS) petitioned for temporary investigative authority and temporary emergency protection of D.A.’s four children. The District Court granted the DFS petition. In August 1991, the court granted a subsequent petition by the DFS to continue temporary investigative authority and protection services for the four children.
On December 18,1991, the DFS filed a petition for termination of D.A.’s parental rights and permanent legal custody with the right to consent to adoption. A termination hearing was held on February 5, 1992. In the initial minutes of the hearing, Joseph Massman, guardian ad litem for the children, informed the court that D.A., an indigent mother, was not represented by counsel. Massman explained to the court that D.A. was entitled to appointed counsel at the hearing to terminate her parental rights, and requested that an attorney be appointed to represent her.
The court acknowledged that D.A. was entitled to an attorney in the termination proceedings; however, the court elected to proceed without appointing counsel for D.A., because according to the District Court, the DFS was prepared to present its evidence and the judge wanted to hear it. The court asked D.A. directly if she was going to contest not having an attorney and D.A. indicated that she planned to do so.
Massman made numerous comments to the court throughout the hearing to the effect that D.A. was unrepresented by counsel and that she was entitled to counsel at the termination proceedings. In spite of such suggestions, however, the court continued to hear evidence without appointing counsel for D.A.
At one point in the hearing, the court admonished Massman that he was abdicating his position as guardian ad litem for the children and that he was advocating for the mother. At another time, the court warned Massman that he could not serve two masters. However, the court did not stop the termination proceedings and appoint counsel for D.A.
At the conclusion of the termination hearing on February 5, 1992, the District Court “tentatively” terminated D.A.’s parental rights to her children. The court informed the parties that the decision to terminate was based on the evidence presented at the hearing. The parties were told that the termination was tentative because D.A. was not formally represented at the hearing. The court reserved the right to amend its decision to terminate and explained that additional reports filed by the attorneys would be considered. The court then removed Massman as the guardian ad litem for the children and appointed Massman to be attorney for D.A., the mother. Paul Smith was appointed as guardian ad litem for the children.
In an omnibus order dated February 5, 1992, (the same date as the hearing), the District Court directed the deputy county attorney to prepare proposed Findings of Fact and Conclusions of Law supporting the court’s decision to terminate D.A.’s parental rights. The court also ordered both Massman and Smith to review the proposed findings, to conduct further inquiry, and to each make a formal recommendation to the court as to whether D.A.’s parental rights should be terminated.
On February 13, 1992, the court issued temporary Findings of Fact and Conclusions of Law and Order in which D.A.’s parental rights were terminated. Attorney Massman filed two reports, dated April 8 and April 16,1992. Attorney Smith filed a report dated April 15, 1992. On May 4, 1992, the court issued its final order and reaffirmed its earlier decision to terminate D.A.’s parental rights to her four children. D.A. appeals.
D.A. asserts on appeal that when the District Court refused to appoint counsel to represent her at the hearing to terminate her parental rights, the court (1) violated her constitutional right to due process, and (2) deprived her of her statutory right to appointed counsel. D.A. contends that the due process clause found at Article II, § 17, of the Montana Constitution guarantees indigent parents the right to court-appointed counsel in proceedings to terminate parental rights. We agree.
The United States Supreme Court has ruled that a natural parent’s right to the care and custody of his or her child is a “fundamental liberty interest” that must be protected by fundamentally fair procedures. Santosky v. Kramer (1982), 455 U.S. 745, 753-54, 102 S.Ct. 1388, 1394-95, 71 L. Ed. 2d 599, 606. In Santosky, the Court explained:
The fundamental liberty interest of natural parents in the care, custody, and management of their child does not evaporate simply because they have not been model parents or have lost temporary custody of their child to the State. Even when blood relationships are strained, parents retain a vital interest in preventing the irretrievable destruction of their family life. If anything, persons faced with forced dissolution of their parental rights have a more critical need for procedural protections than do those resisting state intervention into ongoing family affairs. When the State moves to destroy weakened familial bonds, it must provide the parents with fundamentally fair procedures.
Santosky, 455 U.S. at 753-54, 102 S.Ct. at 1394-95.
In Matter of R.B. (1985), 217 Mont. 99, 102-03, 703 P.2d 846, 848, the Montana Supreme Court recognized that a natural parent’s right to the care and custody of his or her child is a “fundamental liberty interest.” This Court also affirmed the requirement set forth in Santosky that when the State moves to terminate a parent’s rights, the parent must be protected by fundamentally fair procedures. Matter of R.B., 703 P.2d at 848.
The guarantee of fundamental fairness injudicial proceedings to terminate parental rights has its source in our State Constitution. Article II, § 17, of the Montana Constitution requires that “[n]o person shall be deprived of life, liberty, or property without due process of law.” When the State seeks to terminate a parent’s liberty interest in the care and custody of her child, due process requires that the parent not be placed in an unfair disadvantage during the termination proceedings. Fairness requires that a parent, like the State, be represented by counsel at parental termination proceedings. Without representation, a parent would not have an equal opportunity to present evidence and scrutinize the State’s evidence.
The potential for unfairness is especially likely when an indigent parent is involved. Indigent parents often have a limited education and are unfamiliar with legal proceedings. If an indigent parent is unrepresented at the termination proceedings, the risk is substantial that the parent will lose her child due to intimidation, inarticulateness, or confusion. Lassiter v. Dept. of Social Services (1981), 452 U.S. 18, 47, 101 S. Ct. 2153, 2170, 68 L. Ed. 2d. 640, 662 (Blackmun, J., dissenting). Because of the substantial risk of an unfair procedure and outcome, and the guarantee under our Constitution of fundamental fairness, we hold, as a growing number of other jurisdictions have concluded, that the due process clause in our State Constitution guarantees an indigent parent the right to court-appointed counsel in proceedings brought to terminate parental rights. See V.F. v. State (Ak. 1983), 666 P.2d 42; Joel E. Smith, J.D., Annotation, Right of Indigent Parent to Appointed Counsel in Proceeding for Involuntary Termination of Parental Rights, 80 A.L.R.3rd 1141 (1977).
Our review of the record reveals that during the proceedings to terminate D.A.’s parental rights, D.A. was not represented by counsel. The court appointed counsel for D.A. at the end of the termination hearing; however, this late action was no substitute for representation during the hearing. It was the evidentiary hearing which formed the basis of the court’s decision to terminate D.A.’s parental rights.
We conclude that because D.A. was not protected by a fundamentally fair procedure at the hearing to terminate her parental rights, her constitutional right to due process was violated.
We hold that the District Court committed reversible error when it denied D.A.’s request for court-appointed counsel at the termination hearing. We reverse the judgment of the District Court and remand this case for determination of D.A.’s parental rights in further proceedings consistent with this opinion.
CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, McDONOUGH and WEBER concur. | [
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] |
JUSTICE HARRISON
delivered the Opinion of the Court.
Candis DeChaine, formerly Candis Fesolowitz (Candy), appeals from an order modifying child custody, visitation, and support entered by the Eighteenth Judicial District Court, Gallatin County, the Honorable Larry W. Moran presiding. We affirm.
Candy and her former husband, Victor Fesolowitz (Victor) were married in 1976 in Sioux City, Iowa. They had two children, both girls, born on July 8, 1979, and October 1, 1984. Candy petitioned for dissolution of the marriage in February 1986. She was then, and still is, a flight attendant for Northwest Airlines, living in Bozeman, Montana but flying out of Minneapolis, Minnesota. Victor was and still is a pilot for Northwest Airlines, living in Bozeman and Big Sky, Montana, but flying out of Detroit, Michigan.
The August 1988 Order
A decree of dissolution was entered by Judge Gary on October 30, 1987, “reserving until later all other issues which have to be considered in this matter.” The findings of fact, conclusions of law and order that accompanied the decree followed a five-day hearing which in turn concluded eighteen months of litigation over property, child support, child custody and visitation. Conflict over these issues continued until Judge Gary issued a second order on August 9,1988, granting the parties joint custody with primary physical custody to Candy for ten months of each year, and to Victor for July and August of each year, until the younger child reached the age of seven. Visitation was ordered as follows:
[Djuring these nine months of the school year, Victor is granted visitation of no less than ten days during each month. The ten days shall be agreed upon between the parties by the 25th of the preceding month and adjusted to both parties’ schedules. If the parties cannot peaceably agree upon a schedule, the aggrieved party may seek an absolute order dictating times by the court, and the party causing a return to court shall be responsible for both attorney fees incurred. ...
[DJuring the two months that Victor is the primary custodian the reverse procedures for Candy shall apply. ...
[Wjhile Candy is remarried and has a number of relatives in the western United States, Victor has no relatives in the United States except these two children, and the court deems it important... that Victor has as much visitation and custody as possible. Victor shall have the right to have custody of the children any day the children are in town and Candy is out of town, and will not count against Victor’s ten days.
Judge Gary’s August 1988 order also divided the parties’ extensive real estate holdings, investments, and personal property and required Victor to pay Candy $800 a month as child support during the months when the children lived with her, and $400 a month in July and August, retroactive to January 15, 1988. Child support was to increase at a rate equivalent to the annual increase in Victor’s salary.
Candy moved to amend the order, pointing out that no provision had been made for custody after the younger child reached the age of seven. Victor responded, asserting that “it is apparent from the Court’s order” that the parties would have “equal time with the two children,” after the younger child reached the age of seven. Neither party contested the court’s finding that Victor’s annual salary was $98,000 and Candy’s, $22,000, or its finding that the cost of caring for the two children was $1,000 per month.
In September 1988, the parties signed a “settlement agreement” amending the court’s division of the marital estate. This agreement did not address child support, child custody, or visitation. On October 4, 1988, Judge Gary entered an amended order incorporating the settlement agreement.
The August 1992 Order
Judge Gary’s August 1988 order, as amended in October 1988, did not explicitly provide for custody and visitation after the younger child’s seventh birthday. In June 1991, four months before that birthday, Candy filed a motion to review custody and child support. Victor filed a cross-motion requesting that child support be reviewed under the Child Support Guidelines that had been implemented after Judge Gary’s last order. A hearing was held before Judge Moran on January 31,1992. By then, Victor was paying $1,054 a month as child support for the ten months each year that Candy had physical custody of the children.
After testimony on the parties’ experience with the physical custody and visitation arrangements Ordered by Judge Gary in August 1988, the court recessed while Candy and Victor met with their lawyers. On returning three hours later, Victor’s lawyer told the court that the parties had “come to an agreement with the exception of two points” on the subject of custody and visitation, and that the parties had agreed to submit their agreement to the court in writing, with position papers on the two unresolved issues. Child support issues were to be resolved through further negotiation or at a later hearing.
In March 1992, Candy asked the court to make the position papers confidential. In her motion she said that she and Victor had not been able to agree on “several primary issues.” She asked that the position papers be confidential so that Victor would not keep challenging her position in “numerous and lengthy counter-position papers.” The court granted this motion, and both parties filed confidential position papers in May 1992.
Victor filed an objection three days later, saying that Candy had refused to sign a stipulation based on their agreement at the January 31 hearing. A letter from Candy’s lawyer was attached, listing seven “contested” issues. Chief among these were the months during which each party controlled the scheduling of visitation for the following month; the number of visitation days for Victor (ten or eleven, during the ten months Candy had physical custody); and the number of months during the school year during which Victor would have visitation for two weekends rather than one. The parties did not contest Candy’s ten months of physical custody or her control of scheduling for seven months of the year.
Judge Moran held a two-day hearing on child support modification in late May, and on August 14, 1992, he entered judgment awarding child support to Candy at $588.97 a month and specifying the following physical custody and visitation arrangements:
Father shall have the children two complete weekends each month of the year, a weekend being defined as Saturday and Sunday. Father shall have the children a minimum of 12 days per month, except July and August when Mother shall have the children a minimum of twelve days per month.
Father shall be the primary custodial parent six months of the year, being January, February, March, July, August, and September. During the six months that Father is the custodial parent, he will notify Mother by the 14th of each month regarding which days he will have the children for the following month. It will be his obligation to get those days off and it will be Mother’s obligation to bid her job responsibilities around Father’s days with the children.
Parallel provisions followed, covering the six months that Mother is the custodial parent.
As for child support, the court found that the parties had combined net annual resources of $96,985, of which Victor’s share was 72.85 per cent, and that under the child support guidelines for two children ages seven and twelve, an “appropriate percentage” for child support was 23.6 per cent, or $22,664. Victor’s share was $16,511 annually, or $1,375.92 per month. The order reduced Victor’s share to $588.97 per month based on the court’s expectation that the children would live with him 150 days, or approximately five months, each year. Candy appealed from this judgment, raising the following issues:
1. Whether the District Court erred in modifying a stipulation without notifying the parties;
2. Whether the District Court failed to provide for the best interests of the children in its custody decree; and
3. Whether the District Court erred in modifying child support.
I
Did the District Court err in modifying a stipulation without notifying the parties?
In her motion for a new trial, filed in September 1992, Candy stated that she and Victor had agreed, in an oral stipulation at the January 31, 1992 hearing, that she would have physical custody for ten months; that Victor’s visitation would include one weekend per month; and that she would schedule the visitation for seven months each year. Victor’s lawyer told the court:
We’ve agreed that we would submit in writing to the court the agreed portion of our stipulation, and that we will submit ... position papers on the two additional points yet to be resolved. Based upon receipt of the position papers from both parties and review of the agreed stipulation, the court will then be requested to make a decision on the two remaining points and approve the agreed-to stipulation.
No written stipulation was submitted to the court, however, and it appears that more than two points remained unresolved at the time of the hearing on child support in May 1992. Having before it statements from Candy and her lawyer to the effect that several issues were unresolved, and having no evidence that the parties had reached an agreement on those issues, the court decided all the outstanding custody and visitation issues based on the position papers, as it had agreed to do at the January 31, 1992 hearing.
We have held that in matters relating to children, the best interests of the children control; therefore, child custody, visitation and support cannot be left to contract between the parties. In re Marriage of Carlson (1984), 214 Mont. 209, 693 P.2d 496; In re Marriage of Neiss (1987), 228 Mont. 479, 743 P.2d 1022. Whether the stipulation is written or oral is unimportant, and even if both parties stipulate to custody, the court is not bound by that stipulation but may instead order a different custody arrangement in accord with the best interests of the children. In re Marriage of Mager (1990), 241 Mont. 78, 785 P.2d 198; In re Marriage of Converse (1992), 252 Mont. 67, 826 P.2d 937.
Here, the parties’ stipulation as to custody and visitation would not have been binding on the District Court even if it had been in writing. Therefore, the court was under no obligation to notify the parties that it intended to depart from their alleged oral agreement.
II
Did the District Court fail to provide for the best interests of the children in its custody decree?
Judge Moran’s order of August 1992 actually included both a “custody decree” and a modification of the visitation arrangements in Judge Gary’s joint custody award of August 1988.
The 1992 order departed from the 1988 order primarily in specifying the months in which each parent could designate the other’s visitation days during the following month. It also gave Victor more weekend time with the children during the months that Candy was the physical custodian.
Lacking clarification in the 1992 order itself, we infer that the provision that “Father shall be the primary custodial parent six months of the year” merely refers to control over scheduling of visitation and does not mean that Father is to have physical custody. We base this inference on Judge Moran’s findings of fact, in which he stated that the parties have shared custody for the past two years “so that Mother has the children for approximately 215 days per year and Father has the children approximately 150 days per year.” He found that “the children have adapted successfully to this amount of shared custody and have prospered by being with each parent a substantial amount of time each month.”
These findings indicate that Judge Moran found the previous custodial arrangement to be in the best interests of the children, and that he intended to preserve that arrangement while altering visitation so that Victor had more weekend visitation and more control over the scheduling of visitation. In short, we infer that in the order of August 1992, the phrase “custodial parent” refers merely to control over scheduling of visitation and not to physical custody.
The court’s child support order also indicates that it intended its custody order to preserve the ten-month/two-month division of physical custody, as it is based explicitly on the court’s expectation that the children would live with Victor five months, not six, each year.
Our standard of review in this case is whether substantial credible evidence supports the court’s determination. In re Marriage of Clingingsmith (1992), 254 Mont. 399, 404-405, 838 P.2d 417, 420-421; In re Marriage of Nash (1992), 254 Mont. 231, 234, 836 P.2d 598, 600. Joint custody is presumed to be in the best interests of the child and is awarded to assure the child frequent and continuing contact with both parents. Section 40-4-224, MCA. Physical custody should be arranged as equally as possible between the parents to comply with the express purpose of a joint custody award, with the child’s best interest as the primary consideration. In re Marriage of Ulland (1991), 251 Mont. 160, 823 P.2d 864.
The District Court must consider the factors set forth in § 40-4-212, MCA, in determining whether modification of physical custody is in the child’s best interest. Ulland, 823 P.2d at 869; Clingingsmith, 838 P.2d at 421. Candy argues that the court erred in failing to address these factors in its findings of fact and conclusions of law. We disagree. All the statute requires is that the court consider the factors listed. It is not required to make specific findings concerning each element, though it must express “the essential and determining facts upon which its conclusions rest.” Ulland, 823 P.2d at 869; Clingingsmith, 838 P.2d at 421.
Here, the essential and determining fact was the court’s finding that the Fesolowitz children “have successfully adapted” to shared custody and “have prospered by being with each parent a substantial amount of time each month.” The court therefore did not materially alter the amount of time the children would live with each parent — both parents testified that the children had been living with Victor an average of twelve days a month — but instead specified that their time with Victor would include two weekends each month, rather than one.
Candy did not object to the court’s findings with regard to the children’s successful adaptation, or to the number of days allotted to each parent’s visitation or physical custody. Instead, she appears to object primarily to the court’s designation of the party who was to control the scheduling of visitation, unfortunately termed the “primary custodial parent” in Judge Moran’s order. In her confidential position paper, she requested that she have control over scheduling for seven months, rather than six, and that Victor’s visitation include two weekends only in September, October and January.
The court evidently was persuaded by Victor’s argument, in his position paper, listing numerous activities that he could not share with his children because they were not with him on most weekends. It found that Candy had used the job-bidding process at Northwest Airlines to confine Victor to one weekend with the children each month, and that this arrangement is “contrary to the best interests of the children, because of their age and good relationship with their father.” The court amended the parties’ visitation arrangements accordingly.
Section 40-4-224(2), MCA, states that in a joint custody situation, “[t]he allotment of time between the parents must be as equal as possible; however ... each case shall be determined according to its own practicalities, with the best interest of the child as the primary consideration. ...” See In re Marriage of Ward (1986), 223 Mont. 401, 725 P.2d 1211 (district court’s visitation order, giving the father in a joint custody situation only 75 days of visitation out of a total of approximately 170 non-school days available, was affirmed as a practical method of providing for the child’s best interests).
Here, the court produced an order, based on its perception of the Fesolowitz children’s best interests, that was adapted to the exigencies of the parents’ airline work schedules. We conclude that substantial credible evidence supports the District Court’s allocation of visitation time and control over visitation days.
Ill
Did the District Court err in modifying child support?
Both parents requested in 1991 that the court review Judge Gary’s 1988 child support order, applying the guidelines. After extensive testimony by the parties and their accountants, the court found that under the guidelines, 23.6 percent of the parents’ total combined net resources was to be allocated for child support. Finding that the parents’ total combined resources, less reasonable deductions, were $96,036 annually, it arrived at a figure of $22,664 per year for child support.
Candy objects to the court’s assessment of Victor’s net resources. In particular, she objects to the court’s deduction of $27,205 from Victor’s income and assets, reflecting losses Victor incurred on his Big Sky condominium and an apartment house in Madison, Wisconsin, and his $7,171 disability insurance premium.
In reviewing an award of child support, we presume that the judgment of the district court is correct, and we will reverse the district court only if it has abused its discretion. In re Marriage of Saery (1992), 253 Mont. 378, 833 P.2d 1035; In re Marriage of Smith (1990), 242 Mont. 495, 791 P.2d 1373. Here, the District Court heard exhaustive testimony about Victor’s rental property and concluded that he had in fact sustained a net loss on that property. Losses of this kind are legitimate business deductions, allowed by the guidelines. Smith, 791 P.2d at 1377.
Disability insurance premiums are not specified as a deduction under the guidelines. In Smith, however, we concluded that the obligor in that case “should be encouraged, as a matter of public policy, to carry disability insurance. ... Consequently, the Court concludes that the disability insurance premium is a legitimate expense deduction under the guidelines, and is at least partially for the benefit of the minor child.” 791 P.2d at 1377.
Candy urges us to distinguish Smith on the grounds that the obligor was a self-employed doctor, while Victor has an employer and “would be covered under Workmen’s [sic] Compensation provisions in the event he was injured on the job.” We are not persuaded by this argument. Workers’ Compensation benefits would be available only if Victor were injured on the job, while his disability insurance covers injuries he might sustain while commuting, driving, skiing, and so on. We conclude that disability insurance benefits the children and that the District Court did not err in allowing Victor to deduct his disability insurance premiums.
Candy argues that in reducing Victor’s monthly child support obligation by over $500 a month the court ignored the standard of living the children would have enjoyed had the marriage not been dissolved. This is one of the factors the District Court must consider in awarding child support, under § 40-4-204(2), MCA. See In re Marriage of Anderson (1988), 230 Mont. 89, 748 P.2d 469 (pre-guidelines child support award remanded because it was not commensurate with the father’s financial resources and the children’s pre-dissolution standard of living).
Here, the total child support award in the 1988 order, adjusted for increases in Victor’s salary, was $16,200 per year at the beginning of 1992. In the 1992 order this was increased to $22,664 per year, taking into account increases in Candy’s salary as well as Victor’s. Victor’s monthly payment was reduced partly because Candy’s obligation was increased, pursuant to the guidelines, and partly because Victor is, as he testified, providing a fully-equipped home for the children five months out of every twelve.
The District Court found that the total child support award of $22,664 per year was “ample to maintain the children in a lifestyle to which they have become accustomed.” We hold that substantial credible evidence supports this conclusion, and that the District Court did not abuse its discretion in determining Victor’s child support payments.
Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, TRIEWEILER and HUNT concur. | [
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JUSTICE HUNT
delivered the Opinion of the Court.
This is an appeal from the Ninth Judicial District Court, Toole County, Montana. The appellant mother appeals the District Court’s award of joint custody with the respondent father in which respondent was designated primary residential custodian of the minor child, C.J.K. We reverse and remand.
The following issue is dispositive of this case:
Was the issue of primary physical custody of C.J.K. properly before the District Court?
On July 24, 1990, C.J.K. was born to appellant and respondent after a one-year relationship in which the parties resided together but were never married. Prior to the birth of C.J.K., there were four other children born to appellant from a previous marriage, and one child from a previous relationship. C.J.K. is respondent’s only son.
Several months after the birth of C.J.K., the parties separated and have since lived apart. Because of this separation, it was necessary to determine custody and support issues for C.J.K. Appellant filed a petition for custody and support on March 12,1991, which requested that there be “joint care, custody and control”; that she be the custodial parent; and that respondent be granted reasonable rights of visitation. Respondent filed a response and counterpetition on June 27,1991, which requested split custody until C.J.K. reached the age of five, at which time respondent would be granted primary physical custody. On February 21,1992, the parties went to trial on the issues of custody and support of C.J.K. During trial, respondent moved for an order that he be granted immediate primary custody of C.J.K. Counsel for appellant immediately made a motion to stay or continue the proceedings on the basis of surprise.
Was the issue of primary physical custody of C.J.K. properly before the court?
In his response and counterpetition, respondent specifically requested that appellant be designated primary physical custodian for eight months of the year, and that he be designated primary physical custodian for only four months of the year until C.J.K. reaches age five. No mention was made of respondent being designated primary physical custodian before C.J.K. reached the age of five.
After the conclusion of appellant’s case-in-chief, respondent unexpectedly requested immediate primary physical custody. This was the first time appellant was put on notice that respondent sought immediate custody and that she might lose her right to custody.
The purpose of a pleading is to provide notice before trial to the opposing party of the specific relief being sought so that both parties have an opportunity to present evidence on the issues in dispute. Gallatin Trust Bank v. Darrah (1968), 152 Mont. 256, 261, 448 P.2d 734, 737. The requirement that all issues to be tried must be raised in the pleadings is extended to child custody disputes byin re Custody of C.S.F. (1988), 232 Mont. 204, 209, 755 P.2d 578, 581.
An exception to the requirement that all issues to be tried must be raised in the pleadings, is set out in Old Fashion Baptist Church v. Department of Revenue (1983), 206 Mont. 451, 457, 671 P.2d 625, 628:
A District Court does not have jurisdiction to grant relief outside of the issues presented by the pleadings unless the parties stipulate that other questions be considered or the pleadings are amended to conform to the proof.
The parties may “stipulate” or consent to consideration of issues outside of the pleadings expressly or impliedly. Butte Teachers’ Union v. Board of Trustees (1982), 201 Mont. 482, 486, 655 P.2d 146, 148. In the case at bar, respondent argues that since appellant raised the issue of primary physical custody in her petition and he specifically contested the issue, in essence, appellant expressly consented to trial on this issue. We disagree.
Respondent, in his responsive pleading, set out the parameters of the dispute which did not include a request that he be granted primary physical custody at the present time. Appellant never expressly consented to trial on any issue except that which was discussed in the responsive pleading.
Concerning the issue of implied consent, we have stated that “pleadings will not be deemed amended to conform to the evidence because of “implied consent” where the circumstances were such that the other party was not put on notice that a new issue was being raised.” Darrah, 448 P.2d at 737. In the case at bar, appellant did not receive adequate notice before trial, and therefore, could not impliedly consent to consideration of the new issue of whether or not respondent be granted immediate primary physical custody. Appellant’s adamant objection to the consideration of this issue, and her claim that she was “caught off-guard” by this “eleventh-hour change in attack” is in no way indicative of implied consent.
Because of lack of notice, possible prejudice to appellant must be considered. Respondent’s unexpected request denied appellant adequate opportunity to prepare her case thereby denying her due process of law.
We conclude that the determination of primary physical custody was not properly before the District Court.
Reversed and remanded for further proceedings in accordance with this opinion.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, TRIEWEILER, McDONOUGH and WEBER concur. | [
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JUSTICE GRAY
delivered the Opinion of the Court.
Appellant Joe Silva (Silva) appeals from an order of the Eleventh Judicial District Court, Flathead County, granting summary judgment to the City of Columbia Falls, Montana (the City). We affirm.
On January 15, 1989, Silva, a Columbia Falls police officer, suffered an industrial injury to his left thigh when he was kicked by an individual he was attempting to arrest. Silva was immediately eligible for workers’ compensation because the injury occurred while he was on duty, and he has received benefits under the Workers’ Compensation Act since the date of his injury. It appears that in approximately March 1989, while he was still off duty due to his leg injury, he fell down some steps.
Silva began treatment for his left thigh injury on January 20,1989, with Dr. Chet Hope, his family doctor in Columbia Falls. On March 2, 1989, Silva applied in writing for police disability retirement benefits, based on a letter from Dr. Hope stating that Silva was currently unable to return to work as a police officer. The claim was denied on March 30,1989. According to a letter to Silva from the city attorney, benefits were denied because statements from Dr. Hope indicated that Silva’s injury would not result in permanent disability or permanent impairment and because an evaluation by the Kalispell Orthopedic Clinic indicated that Silva should be able to return to work in the near future.
Silva was evaluated by an Evaluation Panel at St. Patrick Hospital in Missoula in August, 1989. No specific trauma could be identified as the cause of Silva’s left thigh pain. In addition, the evaluation indicated that Silva’s lumbar spine problem might be related to his falling down steps and that there might be permanent partial impairment of his lumbar spine. Surgical treatment of the lumbar spine specifically was not recommended. The conclusion of the Evaluation Panel was that Silva could return to work on a gradual basis.
In September 1989, the City, through its chief of police, advised Silva that he would be scheduled to begin a gradual return to work on September 27, 1989, unless he was still on certain medication prescribed by his doctor. Dr. Hope subsequently advised the chief of police that Silva continued to require medication for inflammation and pain; Dr. Hope was uncertain how long the medication would be needed.
On March 2, 1990, Silva was examined by Dr. James H. Mahnke, a neurosurgeon, for the purpose of obtaining an opinion about back surgery. Dr. Mahnke’s opinion, based on an MRI scan done in August 1989 and on his own examination, was that Silva was suffering from a back lesion that would respond only to surgery. Dr. Mahnke did not connect the lesion to the January 1989 injury at that time.
On June 6, 1990, the city attorney informed Silva that the City could no longer hold his position on the police force open. She noted the conclusion of the independent medical panel in August 1989 that he could return to work on a gradual basis and advised that the City would terminate him as a police officer unless he arranged to return to work by July 6, 1990.
On June 13, 1990, Silva renewed his request for police disability retirement benefits. In renewing the request, Silva’s attorney stated “it is quite apparent that he is now precluded from returning to work as a patrolling officer ....” The attorney subsequently forwarded a letter from Dr. Mahnke, dated June 11,1990, stating that Silva’s back lesion was attributable to his industrial injury in January 1989 and that Silva “was disabled from working as a police officer from the time of that injury.” This letter, received by the City on June 21,1990, was the City’s first medical evidence indicating that Silva was permanently disabled from performing his duties as a police officer.
The Police Commission of the City of Columbia Falls (Police Commission) considered Silva’s reapplication for benefits on September 7, 1990, and determined that Silva was entitled to disability retirement benefits effective on that date. Silva disputed the Police Commission’s use of September 7,1990, as his entitlement date. The Police Commission subsequently decided that Silva was entitled to disability retirement benefits effective June 21, 1990, the date the City first received medical evidence that Silva was permanently disabled from performing his duties as a police officer.
Silva filed a complaint in District Court alleging that he was entitled to payment of disability retirement benefits retroactive to the date of his injury. He contended that the Police Commission’s decision not to pay disability retirement benefits for the period between the date of his injury and June 21, 1990, was arbitrary and capricious and that it violated §§ 19-10-402 and 19-10-502, MCA.
The City moved to dismiss the complaint, presented additional evidence and affidavits, and requested that its motion be converted to one for summary judgment. Silva filed a cross-motion for summary judgment.
The District Court rejected the City’s argument that it had no authority to review a local government agency’s decision, but granted the City’s motion for summary judgment on other grounds. The court determined that applicable statutes do not provide an express time when a transfer from the active duty list to the retired list is to take effect. It concluded that the Police Commission had discretion in deciding when an officer would be transferred to the retired list and, as a result, entitled to receive disability retirement benefits. Reviewing the evidence before it, the court then concluded that the Police Commission had not acted without a reasonable basis in making Silva’s disability retirement benefits effective June 21, 1990. Silva appeals.
The sole issue before us is whether the District Court erred in granting summary judgment in favor of the City.
Initially, we note the City’s argument on appeal that the District Court erred in refusing to dismiss Silva’s complaint for failure to state a claim on the basis that the court had no authority for judicial review of a police commission’s decision regarding disability retirement benefits. We also note that the City failed to cross-appeal on this issue. Where a respondent seeks review of rulings on matters separate and distinct from those sought to be reviewed by an appellant, a cross-appeal is necessary. Rouse v. Anaconda-Deer Lodge County (1991), 250 Mont. 1, 817 P.2d 690; Johnson v. Tindall (1981), 195 Mont. 165, 635 P.2d 266. Thus, we are precluded from addressing this issue on appeal.
Silva argues first that the District Court erred as a matter of law in interpreting §§ 19-10-402 and 19-10-502, MCA. Our standard in reviewing a court’s conclusion of law is whether the court is correct. Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 603.
In essence, Silva argues that §§ 19-10-402 and 19-10-502, MCA, require the payment of police disability retirement benefits as of the date of the original injury or disability. Section 19-10-502, MCA, provides for both the amount and commencement of disability retirement benefits: when an officer is transferred to the retired list, “he shall thereafter receive monthly payments from the city’s police retirement fund ....” Nothing in the statute requires payments to be made before transfer to the retired list or for any period of time prior to the transfer from the active list to the retired list.
Section 19-10-402, MCA, sets forth how the determination of transferring a police officer injured or disabled in the line of duty from the active list to the retired list — for purposes of receiving the disability retirement benefits specified in § 19-10-502, MCA — is made. The statute mandates transfer to the retired list when an officer receives duty-related injuries or disabilities and the injuries are, “in the opinion of the board of police commissioners or city council of the city or town, of such character as to impair his ability to discharge his duties as an active police officer....” Section 19-10-402, MCA. The statute is clear that the appropriate entity has discretion in making the determination as to whether and when the injuries or disabilities permanently impair the officer’s ability to perform. A transfer to the retired list is mandatory only upon the making of such an impairment determination.
Silva concedes that neither statute expressly states when a transfer to the retired list must take effect. He argues that the statutes, read together, require benefit commencement as of the date of the onset of the injury or disability. Our discussion of the statutes makes it clear that such a conclusion is unwarranted. No express time for transfer to the retired list is contained in either § 19-10-402 or § 19-10-502, MCA; furthermore, § 19-10-402, MCA, does contain plain language vesting discretion in the police commission or city council authorized to make the impairment determination and any corresponding transfer to the retired list. To accept Silva’s argument would require this Court to insert a provision into the statute which is not contained therein; it also would require us to insert a provision inconsistent with the legislative determination of when and how disability retirement benefits are to be paid. The role of this Court is to ascertain what is contained in statutes; it is not our role to insert or vary provisions of statutes adopted by the Montana legislature. See § 1-2-101, MCA.
Silva also suggests that statutes governing other retirement systems in Montana, particularly the Public Employees’ Retirement System (PERS), buttress his statutory interpretation of §§ 19-10-402 and 19-10-502, MCA. We disagree. Like the statutes before us, the PERS authorizes a specific entity to determine whether a member has become disabled. See § 19-3-1003, MCA. Unlike the applicable statutes here, however, public employee disability retirement benefits are to commence “on the day following the member’s last day of membership service.” Section 19-3-1006, MCA. Thus, in the PERS, the legislature specifically provided a date certain — related to when the member stopped working — for the commencement of benefits. Such a date certain is not contained in § 19-10-402 or § 19-10-502, MCA. Further, § 19-3-1006, MCA, makes it clear that the legislature is aware of how to provide for a result similar to that argued by Silva here. It did not adopt such a provision for local government police disability retirement benefits.
We conclude that §§ 19-10-402 and 19-10-502, MCA, do not require that police disability retirement benefits commence or be paid as of the date of the original injury or disability. As a result, we hold that the District Court did not err in its statutory interpretation.
Silva’s second assertion of error relates to the District Court’s failure to conclude that the Police Commission acted arbitrarily and capriciously in making his disability retirement benefits effective June 21, 1990. Silva contends that there was a total lack of record support for the Police Commission’s determination and that, as a result, the decision was arbitrary and capricious.
We note here that this case does not present itself in the usual posture of a review by this Court of a grant of summary judgment. The District Court determined that it had inherent authority to review actions of an administrative agency under the “arbitrary and capricious” standard alleged by Silva in his complaint and proceeded to review the Police Commission’s determination pursuant to that standard. As discussed above, the City did not properly raise on appeal the issue of whether judicial review of the Police Commission’s decision was available, thereby precluding our review. Thus, for purposes of this appeal, we assume arguendo that the District Court had authority to review the Police Commission’s action pursuant to the “arbitrary and capricious” standard. Our review is confined to whether the court erred in determining that the Police Commission’s action was not “without reasonable basis” and, therefore, not arbitrary or capricious.
Webster’s Ninth New Collegiate Dictionary defines “arbitrary” to mean “existing or coming about seemingly at random or by chance or as a capricious and unreasonable act of will;” similarly, “capricious” is defined as “characterized by a sudden, impulsive and seemingly unmotivated notion or action.” Thus, a review by a district court or this Court of an action under the “arbitrary and capricious” standard does not permit a reversal merely because the record contains inconsistent evidence or evidence which might support a different result. Rather, the decision being challenged must appear to be random, unreasonable or seemingly unmotivated, based on the existing record. Like the District Court, we cannot reach such a conclusion regarding the Police Commission’s determination to make Silva’s disability retirement benefits effective June 21,1990.
Silva was originally injured on the job in January, 1989. His first application for disability retirement benefits, in March 1989, was denied. Medical evidence at the time indicated that Silva would be able to return to work. In August, 1989, medical evidence indicated that Silva was able to return to work on a gradual basis at that time. The first medical statement that Silva would not be able to return to his position as a police officer was received by the City on June 21, 1990. While Dr. Mahnke also indicated in that statement that he thought Silva had been disabled from working as a police officer from the date of the injury in January 1989, that statement conflicted with the medical evidence noted above covering much of that period.
We cannot conclude, on the basis of this record, that the Police Commission’s decision to make Silva’s disability retirement benefits effective on the date the City received the Mahnke letter, and its refusal to make the benefits effective at any earlier time, was arbitrary and capricious. Substantial evidence exists to support the decision and, while other decisions also may have been appropriate, we cannot conclude as a matter of law that the decision is random, seemingly unmotivated or unreasonable based on the record before the Police Commission, the District Court and this Court. The District Court did not err.
AFFIRMED.
CHIEF JUSTICE TURNAGE, JUSTICES McDONOUGH, HARRISON and WEBER concur. | [
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JUSTICE GRAY
delivered the Opinion of the Court.
Appellant Lisa Keele appeals from an order of the Thirteenth Judicial District Court, Yellowstone County, dismissing her claim for loss of parental consortium. We reverse and remand.
The sole issue on appeal is whether a minor child’s cause of action for loss of parental consortium requires the parent to have suffered an injury rendering him or her a quadriplegic.
Because this appeal is before us following the grant of a motion to dismiss under Rule 12(b)(6), M.R.Civ.P, the well-pleaded allegations in the complaint are considered true. Mogan v. City of Harlem (1987), 227 Mont. 435, 437, 739 P.2d 491, 493. Therefore, we distill the facts relevant to our discussion from the complaint.
Lois Keele (Lois), accompanied by her husband, Frank Keele (Frank), was admitted to St. Vincent Hospital and Health Center (St. Vincent’s) on December 15,1985. She was 38 weeks pregnant and in active labor. The obstetrical ward nurses examined Lois and immediately determined that the fetus was in the “transverse lie position.” This condition results in a high likelihood of a cesarean section delivery. Dr. James Harris, an obstetrician at St. Vincent’s, began treating Lois according to established procedure.
Anesthesiologists were available on an “on-call” basis only at St. Vincent’s. Hospital procedure required the staff to allow the anesthesiologists thirty minutes to arrive at the operating room after the initial call. Dr. Harris did not call an anesthesiologist when he became aware of the fetal position.
Lois’ water broke, and an immediate Code I cesarean section was required to preserve the health of the fetus. Fetal distress required immediate action, notwithstanding the fact that an anesthesiologist had not been called to prepare Lois for surgery. Dr. Harris administered a local anesthesia before surgical cutting began, but the abdominal surgery proceeded without a spinal block or general anesthesia.
In November of 1988, Lois and Frank Keele filed a medical malpractice action against St. Vincent’s; in April, 1989, they filed a separate action against Dr. James Harris. On September 27, 1991, Lois and Frank amended their complaint, consolidating the cases against Dr. Harris and St. Vincent’s and adding their minor daughter Lisa Keele, the child born during the traumatic delivery, as a plaintiff. The amended complaint alleged injury to all three plaintiffs due to the negligence of the defendants in failing to obtain timely anesthesia services before performing the cesarean section on Lois Keele. Lisa Keele claimed loss of parental consortium.
In October, 1991, Dr. Harris and St. Vincent’s moved to dismiss Lisa’s claim for loss of parental consortium pursuant to Rule 12(b)(6), M.R.Civ.P. After briefing and oral argument, the District Court ordered entry of judgment against Lisa Keele. Lisa Keele appeals.
Does a minor child’s cause of action for loss of parental consortium require the parent to have suffered an injury rendering him or her a quadriplegic?
Appellant Lisa Keele (Lisa) bases her argument that she has a claim for loss of parental consortium on Pence v. Fox (1991), 248 Mont. 521, 813 P.2d 429. In Pence, a case of first impression, we recognized a child’s cause of action for loss of parental consortium against a tortfeasor who had rendered the father a quadriplegic. Pence, 813 P.2d at 433. In that case we held:
[M]inor children who have been deprived of these rights have a separate cause of action for loss of parental consortium when a parent is tortiously injured by a third party and rendered a quadriplegic.
Pence, 813 P.2d at 433.
Respondents Dr. Harris and St. Vincent’s contend that the Pence decision must be strictly interpreted, and that this Court intended to set a reasonable, enforceable boundary for loss of consortium claims. They urge this Court to limit loss of parental consortium claims to cases in which the parent suffers a severe, permanent and disabling physical injury, similar to quadriplegia.
Lisa argues that in Pence, this Court established a policy to protect, support and foster the parent-child relationship in Montana. She contends that this broad policy of enforcing the familial emit espoused in Pence covers the cause of action in this case, even though the specific holding in Pence was limited to cases involving quadriplegia. Lisa asserts that the respondents improperly focus on the nature of the injury to the parent; instead, the court should focus on the damage to the parent-child relationship caused by the tortfeasor.
The District Court correctly recognized the limited nature of our holding in Pence, and based its decision to dismiss Lisa’s claim on the specific language therein. However, we have recognized repeatedly our authority and responsibility for the continued development of the common law. See Pence, 813 P.2d at 431. We see no rational basis for limiting the cause of action for loss of parental consortium to children whose parents are rendered quadriplegic; such a result arbitrarily would exclude children whose parents suffered, for example, a severe brain injury resulting in a lifelong coma which totally eliminated parental consortium. Therefore, further development of the cause of action for loss of parental consortium in Montana is appropriate.
We noted in Pence the growing trend to recognize loss of parental consortium actions. At the time of that decision, at least ten states had recognized the claim: Arizona, Alaska, Vermont, Washington, Wisconsin, Iowa, Michigan, Massachusetts, Oklahoma and Texas. Pence, 813 P.2d at 431. Additional jurisdictions now recognizing the cause of action include West Virginia and Wyoming. See Belcher v. Goins (W.Va. 1990), 400 S.E.2d 830 and Nulle v. Gillette-Campbell County Joint Powers Fire Board (Wyo. 1990), 797 P.2d 1171.
We have surveyed the approaches employed in these jurisdictions and discovered a wide range of standards. For example, in Michigan, a child can recover for loss of the parent’s society and companionship when the parent is tortiously injured. Berger v. Weber (Mich. 1981), 303 N.W.2d 424, 427. In Berger, the Michigan Supreme Court expressly refused to limit the cause of action to instances of “severely” injured parents of a minor child. Berger, 303 N.W.2d at 427. At the other end of the spectrum, the Vermont Supreme Court has limited the cause of action to cases in which the parent has been rendered permanently comatose. Hay v. Medical Center Hosp. of Vermont (Vt. 1985), 496 A.2d 939, 946.
We also have revisited the important public policies relating to, and competing interests inherent in, this cause of action, as expressed by our sister jurisdictions and our opinion in Pence. In crafting the standard to be applied to loss of parental consortium claims in Montana, we borrow heavily from the Arizona Supreme Court’s rationale in Villareal v. State Dept. of Transp. (Ariz. 1989), 774 P.2d 213. We note that the facts of Villareal do not necessarily reflect the facts before us nor the facts required for a cause of action for loss of parental consortium. Instead, we rely on the legal analysis of the Arizona Supreme Court to guide our definition of the cause of action in Montana.
In Montana, the elements necessary for a minor child to establish a claim for loss of parental consortium are:
1) a third party tortiously causes the parent to suffer a serious, permanent and disabling mental or physical injury compensable under Montana law; and
2) the parent’s ultimate condition of mental or physical impairment must be so overwhelming and severe that it causes the parent-child relationship to be destroyed or nearly destroyed.
See Villareal, 774 P.2d at 219.
The first element describes the extent of injury to the parent which must be present to form the basis for a loss of parental consortium claim, as well as the source of that injury. Thereafter, the element contains a limitation: the described injury to the parent must be “compensable under Montana law.” The limitation reflects the derivative nature of the minor child’s claim for loss of parental consortium. That claim is wholly derivative of the parent’s claim against the tortfeasor for personal injuries; if the tortfeasor is not subject to liability to the parent under tort principles, the child cannot sustain a cause of action against the tortfeasor for loss of parental consortium. Villareal, 774 P.2d at 220.
For example, recovery for severe mental injury absent physical manifestations is limited to a few specific instances in Montana. See discussion in Nay v. Montana Power Co. (1990), 242 Mont. 195, 199, 789 P.2d 1224, 1226-7; Versland v. Caron Transport (1983), 206 Mont. 313, 671 P.2d 583; and Johnson v. Supersave Markets, Inc. (1984), 211 Mont. 465, 686 P.2d 209. Consequently, if the parent could not recover from the tortfeasor for his or her purely mental or emotional injury absent a physical component, the child cannot bring an action for loss of parental consortium resulting from that injury to the parent.
We find support for this conclusion in Priest v. Taylor (1987), 227 Mont. 370,740 P.2d 648. In Priest, we discussed the derivative nature of a spouse’s claim for loss of consortium. We stated that although the cause of action is separate and distinct, the loss of spousal consortium claim is completely derivative of the injured spouse’s claim. Priest, 740 P.2d at 653. In Pence, we relied heavily on our recognition of spousal consortium to support our decision to recognize the cause of action for a child’s loss of parental consortium. Pence, 813 P.2d at 431-2. As such, we conclude that this limitation on a minor child’s claim for loss of parental consortium is both necessary and grounded in Montana case law.
With regard to the second element of the claim for loss of parental consortium, we emphasize that the destruction or near destruction of the parent-child relationship as a result of the parent’s impairment is a necessary element in establishing the cause of action itself, not merely a factor in computing damages. See Belcher, 400 S.E.2d at 841, and Villareal, 774 P.2d at 219-20.
Returning to the case before us, we express no opinion as to whether Lisa can appropriately allege and sustain a claim for loss of parental consortium under the standard set forth in this opinion. We conclude, however, that the District Court erred in dismissing her complaint for failure to state a claim upon which relief can be granted.
Reversed and remanded for further proceedings consistent with this opinion.
CHIEF JUSTICE TURNAGE, JUSTICES McDONOUGH, HARRISON and WEBER concur. | [
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CHIEF JUSTICE TURNAGE
delivered the Opinion of the Court.
This is an appeal from an administrative action. The District Court for the First Judicial District, Lewis and Clark County, reversed the findings, conclusions, and order entered by the Board of Nursing and ordered that the recommended findings, conclusions, and order of the Board’s hearing examiner be adopted instead. The Board appeals. We affirm.
The issues are:
1. Did the District Court err in ruling that the Board violated § 2-4-621, MCA, by receiving and considering the prosecuting attorney’s proposed findings?
2. Did the court err in concluding that the Board’s review of the hearing examiner’s proposed findings was substantially impaired by the Board’s rejection of the hearing examiner’s opinion that Mary Mouat was more credible than Ellen Wirtz?
3. Did the court err in concluding that the Board was biased and prejudiced so that it could not objectively determine the discipline for the nurses upon remand?
4. Did the court err in holding that the Board’s rejection of the hearing examiner’s findings was erroneous, arbitrary and capricious, and an abuse of discretion?
At the time relevant to this action, the registered nurses who appear here as petitioners were employed by St. Peter’s Hospital, Helena, Montana, in its hospice program. As registered nurses practicing in Montana, their licenses were subject to regulation by the Board of Nursing. Title 37, Chapter 8, MCA.
In October 1990, Ellen Wirtz, a registered nurse who had resigned from the hospice program, filed a complaint with the Board charging that the hospice nurses were stockpiling painkilling medications, primarily morphine suppositories, received from families of deceased patients. It has not been alleged that the nurses were appropriating the drugs for their own personal use or personal gain. The drugs were stored in an unlocked desk drawer at the hospice office and were used when a nurse felt it would take too long to obtain a new prescription or to get a prescription filled for a hospice patient in need.
The complaint resulted in charges that the nurses’ conduct was in violation of § 37-8-441(5), MCA, and § 8.32.413(2), ARM. In response to the filing of the complaint, the nurses signed statements admitting their conduct. However, in her statement, Mary Mouat, the supervisor of the hospice program nurses, pointed out that they had ceased the practice and that the hospice program had initiated a new procedure for obtaining drugs in emergency situations. A supply of narcotic drugs had been placed in the hospice office in a lockbox, the contents of which were periodically audited by a pharmacist.
On April 15, 16, and 17, 1991, a public hearing was held on the complaint, before a hearing examiner appointed by the Board. The Board was represented at the hearing by counsel who assumed the role of prosecuting the complaint. The nurses were represented by privately-retained counsel. After the hearing, the nurses’ attorneys submitted proposed findings of fact and conclusions of law and supporting briefs. The prosecuting attorney did not.
On April 30, the hearing examiner issued his findings of fact, conclusions of law, and a recommended order concluding that the substantive charges of unprofessional conduct were not proven and should be dismissed. He found that the nurses, with the exception of Verna VanDuynhoven, committed technical violations of law pertaining to record keeping and storage of narcotics. The hearing examiner recommended that all charges against VanDuynhoven be dismissed and that letters of reprimand be placed in the files of the other nurses for three years.
The Board met and agreed to individually review the transcripts of the hearing before the hearing examiner. Different counsel was brought in to advise the Board. The attorney who had prosecuted the complaint and was normally the Board’s counsel appeared on behalf of the Department of Commerce, the administrative arm of the Board.
At a subsequent meeting made open to the public, the Board rejected the hearing examiner’s findings of fact, conclusions of law, and recommended order. It later issued its own findings, conclusions, and order, based on objections and proposed findings and conclusions filed directly with the Board by the attorney who had prosecuted the complaint. The Board concluded that the nurses essentially committed every violation alleged in the complaint. It placed the licenses of the nurses on probation for terms ranging from three to five years, with certain education and reporting requirements. The Board’s order also prohibited the nurses from supervising other nurses during their probation.
The nurses petitioned for judicial review of the Board’s final order. The parties submitted briefs to the District Court, which then held a hearing on the petition for judicial review. The court reversed the findings, conclusions and final order of the Board. It remanded the matter and ordered the Board to adopt the findings, conclusions, and recommended order of the hearing examiner in their entirety. The Board appeals.
I
1. Did the District Court err in ruling that the Board violated § 2-4-621, MCA, by receiving and considering the prosecuting attorney’s proposed findings?
The District Court found that the Board acted improperly in receiving and considering the prosecuting attorney’s proposed findings, conclusions, and order after the hearing examiner had submitted to the Board his findings, conclusions, and proposed order. The court found that, at that point in the proceedings, the parties were entitled to file only exceptions to the hearing examiner’s decision. The court further found that
[b]y permitting [the prosecuting attorney] to file proposed findings after the hearing examiner had already issued his decision, the prosecuting arm of the Board was given an unfair advantage over the Nurses in the Board’s review of the case. Moreover, by accepting and using [the prosecuting attorneys] proposed findings, the Board favored the prosecution and violated its neutrality which it was required to maintain at that stage of the proceedings.
The Board claims that no reason has been shown why it was permissible to file proposed findings with the hearing examiner but not with the Board. It asserts that, under § 2-4-614(l)(e), MCA, proposed findings can be filed with the hearing examiner, the administrative agency, or both.
Section 2-4-614, MCA, provides:
(1) The record in a contested case shall include:
(e) proposed findings and exceptions^]
Section 2-4-621, MCA, provides:
(1) When in a contested case a majority of the officials of the agency who are to render the final decision have not heard the case, the decision, if adverse to a party to the proceeding other than the agency itself, may not be made until a proposal for decision is served upon the parties and an opportunity is afforded to each party adversely affected to file exceptions and present briefs and oral argument to the officials who are to render the decision.
(3) The agency may adopt the proposal for decision as the agency’s final order. The agency in its final order may reject or modify the conclusions of law and interpretation of administrative rules in the proposal for decision but may not reject or modify the findings of fact unless the agency first determines from a review of the complete record and states with particularity in the order that the findings of fact were not based upon competent substantial evidence or that the proceedings on which the findings were based did not comply with essential requirements of law. The agency may accept or reduce the recommended penalty in a proposal for decision but may not increase it without a review of the complete record.
We agree with the District Court that § 2-4-614, MCA, merely describes the contents of the record in a contested case. It does not provide that proposed findings may be filed at any point in an administrative proceeding.
Section 2-4-621, MCA, sets forth the procedure by which an agency may alter the findings and conclusions of its finder of fact. The Board did not comply with that statute. In allowing the prosecuting attorney to file findings, conclusions, and a proposed order after the hearing examiner’s findings, conclusions, and proposed order had been filed, the Board went beyond its authority under § 2-4-621(1), MCA, to allow parties adversely affected to “file exceptions and present briefs and oral argument” in response to the proposed decision.
Further, the Board did not follow the procedure set forth in § 2-4-621(3), MCA, for modifying or rejecting the findings of its hearing examiner. In its deliberations, instead of focusing on whether the hearing examiner’s findings were supported in the record, the Board focused on whether the prosecuting attorney’s objections to the proposed findings were supported in the record. The Board then considered each of the prosecuting attorney’s proposed findings, adopting them with minor modifications.
Notwithstanding the Board’s position that the transcript demonstrates its reasons for rejecting the findings of the hearing examiner, § 2-4-621(3), MCA, requires that the agency’s order state “with particularity” why such findings have been rejected. Instead of stating with particularity why each of the hearing examiner’s findings was rejected, the Board’s order stated only that the findings, conclusions, and recommended order of the hearing examiner “are rejected in their entirety.”
A hearing examiner, when one is used, is in the unique position of hearing and observing all testimony entered in the case. In the present case, none of the Board members heard the evidence “live;” they were limited to reviewing a cold record. The findings of the hearing examiner, especially as to witness credibility, are therefore entitled to great deference. This is reflected in the procedural requirements which must be met under § 2-4-621, MCA, before a hearing examiner’s findings may be rejected or modified. The failure of the Board to meet those requirements in this case is clear.
The Board cites the provision of § 2-4-623(4), MCA, that “[i]f, in accordance with agency rules, a party submitted proposed findings of fact, the decision shall include a ruling upon each proposed finding.” Because the prosecuting attorney’s proposed findings were not submitted in accordance with the statutes governing proceedings before the Board as discussed above, this statute does not apply to his proposed findings. Therefore, there was no need for the Board to rule upon each of the prosecuting attorney’s proposed findings.
We hold that the District Court did not err in ruling that the Board violated § 2-4-621, MCA, by receiving and considering the prosecuting attorney’s proposed findings after the recommended findings, conclusions, and order of the hearing examiner were submitted.
II
Did the court err in concluding that the Board’s review of the hearing examiner’s proposed findings was substantially impaired by the Board’s rejection of the hearing examiner’s opinion that Mary Mouat was more credible than Ellen Wirtz?
At the hearing before the hearing examiner, the testimony of Ellen Wirtz, the former hospice nurse, conflicted in numerous respects with the testimony of Mary Mouat, the supervisor of the hospice nurses. The hearing examiner found that Wirtz’s testimony was not credible. The District Court stated that the Board “failed to provide adequate grounds for rejecting the hearing examiner’s determinations of credibility of Mary Mouat and Ellen Wirtz.” As the District Court pointed out, the Board failed to determine whether there was substantial credible evidence to support two findings by the hearing examiner which provided specific examples of Wirtz’s lack of credibility.
In objecting to the District Court’s opinion on this issue, the Board relies upon the language of § 2-4-704(2), MCA, prohibiting a district court from substituting its judgment for “that of the agency as to the weight of the evidence on questions of fact.” The Board asserts that this language prohibits not only the District Court, but also the hearing examiner, from making any judgment that is binding on the Board as to the weight of Wirtz’s or Mouat’s testimony.
The Board misinterprets § 2-4-704(2), MCA. This relates back to the use of a hearing examiner by an administrative agency as discussed under Issue I. As stated under that issue, the credibility of a witness is best judged by one who has the opportunity to observe the demeanor of the witness in person. In this case, the hearing examiner definitely found that Mouat was a more credible witness than was Wirtz, and supported that finding. We have reviewed the record, as did the District Court. We hold that the District Court did not err in ruling that substantial credible evidence supports the findings of the hearing examiner concerning the credibility of Mouat and Wirtz.
The Board also argues that the District Court erred in stating that the hearing examiner’s findings of fact and conclusions of law “were based in large part on the testimony and credibility of these two witnesses [Mouat and Wirtz].” Because the nurses admitted their conduct, a major focus of the hearing was the appropriate discipline to be imposed upon them. Whether they were being candid in their admissions was, of course, crucial to this determination. The primary challenge to the nurses’ credibility was the testimony of Wirtz, and her testimony conflicted with Mouat’s. We hold that the District Court did not err in ruling that the Board’s review of the hearing examiner’s proposed findings was substantially impaired by the Board’s improper rejection of the hearing examiner’s opinion as to the relative credibility of Mouat and Wirtz.
Ill
Did the court err in concluding that the Board was biased and prejudiced so that it could not objectively determine the discipline for the nurses upon remand?
The District Court found that the Board violated its neutrality and impartiality and had become “irreparably tainted.” The Board claims, however, that there is no factual or legal basis for the court to divest it of its legal duty to determine the discipline for the nurses.
The Board’s perhaps unintentional bias against the position taken by its hearing examiner and in favor of the position taken by the prosecuting attorney, who was usually the Board’s attorney is demonstrated by the improper procedure used by the Board, as discussed above. The District Court’s decision not to remand the action to the Board for determination of discipline is further supported by the need for final resolution of this matter. As evidence of absence of bias on its part, the Board points out that it now has several new members who did not consider this matter the last time it was before the Board. But the new Board members would require time to study the record before the Board could meet and enter an order. The nurses have been under the cloud of this litigation long enough.
We have ruled that the findings and conclusions of the hearing examiner are supported by substantial evidence. The discipline recommended by the hearing examiner and adopted by the District Court is commensurate with those findings and conclusions. The discipline is also commensurate with the Board’s discipline rulings in other cases between 1986 and 1991, as summarized by the Board in a document in the record before the hearing examiner. We hold that there was no error in the District Court’s ruling that the hearing examiner’s recommendations for discipline shall be adopted.
IV
Did the court err in holding that the Board’s rejection of the hearing examiner’s findings was erroneous, arbitrary and capricious, and an abuse of discretion?
The Board challenges several specific findings of the hearing examiner. It claims that the hearing examiner’s finding that “the practice” was “stopped voluntarily” is error because Mouat was directed by her supervisor to see that “the practice” stopped. The Board points out the contrast between the drug destruction record indicating that 158 doses of drugs were destroyed on June 7, 1990, and the hearing examiner’s finding that “not a large number of suppositories” were placed in Mary Mouat’s desk drawer. We note that “the practice” ceased prior to the initiation of these proceedings. Further, it is unclear from the record whether all the drugs destroyed on June 7,1990, had been stored in Mouat’s desk drawer, or whether some had just been received by the hospice program. At any rate, we conclude that neither of these semantic uncertainties are critical, in light of the entire record.
The Board also disputes the finding that Mary Mouat was a credible witness. The Board cites evidence that Mouat had forged Ruth Sasser’s signature on a drug destruction record and that Mouat told Sasser to use her own judgment about retaining drugs, after having been directed to stop the practice. It also cites Mouat’s testimony that all of the nurses participated in “the practice,” which conflicted with VanDuynhoven’s statement that she knew of “the practice,” but did not participate. Again, in the context of the entire record, we conclude that the evidence cited by the Board, some of which is disputed, is not fatal to the finding that Mouat was credible.
The Board cites the following omissions from the findings: Wirtz testified that Mouat never told her to cease “the practice;” the hearing examiner did not account for the source of all the drugs in Mouat’s desk drawer; Sasser kept two morphine suppositories in her nursing bag after being told not to; Lynn Zavalney took drugs from the drawer to a patient on the basis of financial need, not medical emergency; Aleñe Brackman admitted she did not tell Dr. Simms she was filling a prescription from the drawer; and VanDuynhoven knew there were drugs in the drawer. While it is true there was evidence on all of these points, findings are not required to be made on every point on which evidence is produced. We conclude that none of these points constitute significant omissions from the findings.
The District Court examined each of the findings of the hearing examiner, one by one, as the Board should have done, and determined that each was supported by substantial credible evidence in the record. Therefore, the court concluded that under § 2-4-621(3), MCA, the hearing examiner’s findings of fact should have been adopted by the Board.
Rejection of a hearing examiner’s factual recommendations in violation of § 2-4-621(3), MCA, constitutes an abuse of discretion within the meaning of § 2-4-704(2)(a)(vi), MCA. Brander v. Director, Dept, of Inst. (1991), 247 Mont. 302, 308, 806 P.2d 530, 533. In this case, the Board abused its discretion by rejecting the hearing examiner’s findings without following the procedure required pursuant to § 2-4-621(3), MCA. We hold that the District Court did not err in holding that the Board’s rejection of the hearing examiner’s findings, conclusions, and proposed order constituted an abuse of discretion and violated § 2-4-704(2)(a)(vi), MCA.
Affirmed.
JUSTICES GRAY, TRIEWEILER, HUNT, HARRISON and WEBER concur.
ORDER
The Court’s opinion in this case was filed on May 6,1993. On May 17, 1993, the Board of Nursing filed a petition for rehearing. Having considered that petition, the Court hereby ORDERS that the petition for rehearing is DENIED.
IT IS FURTHER ORDERED that the opinion in this matter is clarified to reflect that counsel for the Board of Nursing on appeal was not the attorney who prosecuted this matter below.
The Clerk is directed to mail copies of this ORDER to counsel for the parties and to West Publishing and the State Report with the request that it be published with the Court’s opinion.
DATED this 20th day of May, 1993.
/s/J.A. TURNAGE, Chief Justice
/s/ JOHN CONWAY HARRISON, Justice
/s/ KARLA M. GRAY, Justice
/s/ WILLIAM E. HUNT, SR., Justice
Isl TERRY TRIEWEILER, Justice
/s/ FRED J. WEBER, Justice | [
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JUSTICE NELSON
delivered the Opinion of the Court.
¶1 The Stanley L. and Carolyn M. Watkins Trust, and Steven B. Williamson, individually and as Personal Representative of the Estate of Stanley L. Watkins, deceased (collectively, “Appellants”), brought a legal malpractice action in the District Court for the Eleventh Judicial District, Flathead County, to recover damages allegedly sustained as a result of attorney Susan Lacosta’s negligence in drafting the Trust documents and Stanley’s will. The District Court granted Respondent’s motion for summary judgment concluding that Appellant’s action was time-barred under the three-year statute of limitations for legal malpractice actions and that the doctrines of res judicata, equitable estoppel and judicial estoppel barred Appellants’ claim. We reverse and remand for further proceedings consistent with this Opinion,
f 2 We address the following issues on appeal:
¶3 1. Whether Appellants have standing to bring a legal malpractice action against Respondents.
¶4 2. Whether the doctrines of res judicata, collateral estoppel, equitable estoppel and judicial estoppel bar Appellants’ claims against Respondents.
¶5 3. Whether Appellants’ claims against Respondents are barred by the three-year statute of limitations for legal malpractice.
Factual and Procedural Background
¶6 Steve Williamson and his stepfather, Stanley Watkins, each owned interests in a trucking operation they had built together. In late 1991 or early 1992, Stanley’s wife, Carolyn, retained Susan Lacosta, an attorney whose emphasis was in estate and tax planning, to draft an estate plan for Stanley and Carolyn along with partnership and shareholder agreements related to the trucking operation. At Stanley’s and Carolyn’s request, Lacosta included in the Trust agreement a direct bequest of Stanley’s interest in the trucking operation to Steve upon the death of the survivor of Stanley and Carolyn.
¶7 In January 1992, Stanley and Carolyn signed their wills and a Trust agreement entitled “The Stanley L. and Carolyn M. Watkins Revocable Trust Agreement” (the Trust). At the same time, they each signed an assignment of virtually all of their property to the Trust, over which they both were Trustees. Stanley suffered from a heart condition and he was legally blind. Because of Stanley’s ill health, Lacosta never met with him, nor did she discuss the estate plan with him. Instead, Lacosta sent the wills and Trust documents home with Carolyn and, contrary to the attestations appearing in the wills, they were signed outside of the presence of the purported witnesses (including Lacosta) and outside of the presence of a notary public.
¶8 Stanley died on April 7, 1992, and his will, prepared only a few months earlier, was admitted to probate. Although Stanley’s 1992 will was admitted to probate with Lacosta’s knowledge, Lacosta did not disclose to Carolyn or to the court that the will had been improperly executed because it was not signed in the presence of witnesses as required by § 72-2-522, MCA. Lacosta also did not disclose to Carolyn that when Stanley died, the Trust became irrevocable.
¶9 Upon Stanley’s death, Carolyn became the sole Trustee under the Trust. For the next three years, Carolyn, as Trustee, facilitated the administration of the Trust and Stanley’s estate.
¶10 In early January 1995, Steve met with John Hagman, an insurance agent, to discuss Steve’s own life insurance and estate planning needs. They reviewed the Trust agreement, but because neither of them were able to decipher what the Trust agreement meant or accomplished, they met with Lacosta on January 13,1995, to clarify the disposition of the trucking operation stock through the Trust. Lacosta told them that the Trust was revocable and that Carolyn could do whatever she wanted with the assets. However, a few months later, Lacosta informed Carolyn that the Trust was a Qualified Terminable Interest Property (QTIP) trust and that Carolyn could not revoke the provisions of the Trust that left Stanley’s interest in the trucking operation to Steve.
¶11 In August 1995, Carolyn, Lacosta, Steve and the other Watkins’ children attended a meeting for the specific purpose of discussing the Trust and other related financial matters. At the meeting, Lacosta summarized the Trust, but at no time did she or anyone else give any indication that there were questions about the validity of the Trust or Stanley’s will.
¶12 Sometime prior to this meeting, Carolyn had contacted Neil McKay, an estate and tax planning attorney, to inquire about the Trust. McKay testified in his deposition that the Trust would be very difficult for the average layperson to understand. In fact, he testified that even as an estate and tax planning expert, he had to spend many hours reading the Trust agreement before he could understand it. ¶13 In December 1995, McKay wrote to Steve and the other Trust beneficiaries on Carolyn’s behalf, disclosing that there were defects in the estate plan. He sought their agreement to declare void an attempted transfer to the Trust. Thereafter, Carolyn attempted to invalidate Stanley’s 1992 will and the Trust. This resulted in acrimonious and protracted litigation between Carolyn and the Trust beneficiaries. In those cases (hereafter collectively referred to as the “Beneficiary Suits”), the District Court found Carolyn’s claims to be time barred.
¶14 Carolyn died on February 23,1997. On April 3, 1997, Appellants brought this legal malpractice action to recover damages allegedly caused by Lacosta. Appellants alleged that Lacosta committed malpractice in connection with the estate plan enabling an attack on the Trust and Stanley’s will thereby damaging each of them. Because Lacosta’s alleged malpractice created conflicting expectations among the survivors, the Estate of Carolyn M. Watkins brought a separate malpractice action wherein Carolyn’s estate asserted that in addition to the problems regarding the witnessing of Stanley’s will, Lacosta failed to draft the Trust according to Stanley’s and Carolyn’s wishes. Estate of Carolyn Watkins v. Hedman, Hileman & Lacosta, 2004 MT 143, 321 Mont. 419, _ P.3d _.
¶15 In the instant case, Respondents moved for summary judgment. The District Court granted Respondents’ motion concluding that the statute of limitations on Lacosta’s alleged malpractice began to run by the time Stanley’s will was admitted to probate in April 1992, and that this action is therefore untimely. The court further held that Appellants did not have standing because they were not clients of Lacosta and that the action was barred by res judicata, equitable estoppel and judicial estoppel. Thereafter, Appellants filed a Motion for Relief from Judgment that was not ruled upon. Appellants also filed a Motion to Alter or Amend that was denied. From this judgment and these orders, Appellants appeal.
Standard of Review
¶16 Summary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. Our standard in reviewing a district court’s summary judgment ruling is de novo. Johnson v. Barrett, 1999 MT 176, ¶ 9, 295 Mont. 254, ¶ 9, 983 P.2d 925, ¶ 9 (citing Stutzman v. Safeco Ins. Co. of America (1997), 284 Mont. 372, 376, 945 P.2d 32, 34). We use the same Rule 56, M.R.CÍV.P., criteria applied by the district court. Johnson, ¶ 9. Moreover, all reasonable inferences which may be drawn from the offered proof must be drawn in favor of the party opposing summary judgment. Johnson, ¶ 8 (citing Schmidt v. Washington Contractors Group, 1998 MT 194, ¶ 7, 290 Mont. 276, ¶ 7, 964 P.2d 34, ¶ 7).
Issue 1.
¶17 Whether Appellants have standing to bring a legal malpractice action against Respondents.
¶18 Appellants contend that the District Court’s orders should be reversed and remanded because the court’s rationale on this issue is unclear. In their motion for summary judgment, Respondents did not raise any issues as to Appellants’ standing to bring this action. Rather, the standing issue was raised by the District Court at the close of the hearing on the motion for summary judgment, based on an inquiry to Respondents’ counsel regarding the existence of a fiduciary relationship between Lacosta and Appellants.
¶19 With regard to the Estate of Stanley L. Watkins (the Estate), Lacosta admits that Stanley was a client. Because the Estate stands in the shoes of the decedent, it is considered to be in privity with the attorney, and the personal representative has standing to prosecute a malpractice claim. Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner (Fla. 1993), 612 So.2d 1378, 1380.
¶20 A fact issue exists as to whether the Trust is a client or a nonclient beneficiary. The Trust may be considered a client based upon the legal services provided by Lacosta to the Trust and its Trustees, services which involved Trust assets and transactions. Because Lacosta did not raise the issue of standing in her motion for summary judgment, she presented no facts as to whether the Trust was or was not a client. And, in its order, the District Court failed to cite to any cases and made no conclusions as to whether a duty exists to nonclients, or the extent of that duty if it does exist. However,
[tjhe courts agree that the existence of the attorney-client relationship, the contractual scope of duty, the causation of damages and the extent of damages usually are issues for the trier of fact.... A common factual dispute is whether there was an attorney-client relationship.
Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice, Vol. 5, § 33.11 (5th ed. 2000) (hereafter, Mallen).
¶21 Steve claims standing as a nonclient beneficiary of the estate plan. The duty owed to a nonclient beneficiary is a matter of first impression in Montana. See Rhode v. Adams, 1998 MT 73, ¶¶ 12-13, 288 Mont. 278, ¶¶ 12-13, 957 P.2d 1124, ¶¶ 12-13. However, the majority rule in other jurisdictions supports standing in cases involving actions by named beneficiaries against drafting attorneys. Cf., Blair v. Ing (Haw. 2001), 21 P.3d 452; Mallen, Vol. 4, § 32.4 (“Despite statements that strict privity is the prevailing or majority rule, just the opposite is true of actions brought by beneficiaries of wills. A duty to a third party is implied because that is the mutual intent of the attorney and client.”)
¶22 Moreover, a finding of duty is consistent with existing Montana law. This Court has noted that a multi-factor balancing test adopted in other juris dictions may be appropriate in deciding the duty owed by attorneys to nonclients in estate planning. Rhode, ¶ 17. Additionally, we have recognized liability to nonclients in other professional contexts. See, e.g., Thayer v. Hicks (1990), 243 Mont. 138, 793 P.2d 784 (accounting firm liable to nonclient); Jim’s Excavating Serv. v. HKM Assoc. (1994), 265 Mont. 494, 878 P.2d 248 (professional engineer liable to nonclient); Turner v. Kerin & Assoc. (1997), 283 Mont. 117, 938 P.2d 1368 (professional engineer liable to nonclient).
¶23 Accordingly, we hold that the Estate does have standing to bring a legal malpractice action against Respondents. We further hold that whether the Trust and Steve have standing to bring a legal malpractice action against Respondents is a factual issue that must be determined at trial, thus precluding summary judgment.
Issue 2.
¶24 Whether the doctrines of res judicata, collateral estoppel, equitable estoppel and judicial estoppel bar Appellants’ claims against Respondents.
¶25 Appellants contend that the District Court erred in concluding that the doctrines of res judicata, equitable estoppel and judicial estoppel barred Appellants’ claims. Instead, Appellants argue that when an attorney’s estate planning causes loss or injury to estate and trust assets and requires clients and beneficiaries to resort to litigation as the only means of resolving the disposition of assets, a subsequent malpractice action is not barred under the doctrines of res judicata, equitable estoppel or judicial estoppel as the elements necessary to establish those defenses are absent.
¶26 The doctrines of res judicata and collateral estoppel are based on a judicial policy favoring a definite end to litigation. Kullick v. Skyline Homeowners Ass’n, 2003 MT 137, ¶ 17, 316 Mont. 146, ¶ 17, 69 P.3d 225, ¶ 17 (citing Rausch v. Hogan, 2001 MT 123, ¶ 14, 305 Mont. 382, ¶ 14, 28 P.3d 460, ¶ 14). Res judicata bars a party from relitigating a matter that the party has already had an opportunity to litigate. Kullick, ¶ 17 (citing Olson v. Daughenbaugh, 2001 MT 284, ¶ 22, 307 Mont. 371, ¶ 22, 38 P.3d 154, ¶ 22). Collateral estoppel is a form of res judicata and bars the reopening of an issue that has been litigated and resolved in a prior suit. Kullick, ¶ 18 (citing Finstad v. W.R. Grace & Co., 2000 MT 228, ¶ 28, 301 Mont. 240, ¶ 28, 8 P.3d 778, ¶ 28).
¶27 The doctrine of res judicata applies if the following four elements have been satisfied: (1) the parties or their privies are the same; (2) the subject matter of the present and past actions is the same; (3) the issues are the same and relate to the same subject matter; and (4) the capacities of the persons are the same in reference to the subject matter and to the issues between them. Kullick, ¶ 17 (citing Hall v. Heckerman, 2000 MT 300, ¶ 13, 302 Mont. 345, ¶ 13, 15 P.3d 869, ¶ 13). Here, the Beneficiary Suits were not malpractice actions and it is undisputed that Respondents were not parties to that litigation. Thus, res judicata is not applicable in this case.
¶28 The same is true as to the doctrine of collateral estoppel. Collateral estoppel only applies if the following three elements have been satisfied: (1) the identical issue raised was previously decided in a prior adjudication; (2) a final judgment on the merits was issued in the prior adjudication; and (3) the party against whom the plea is now asserted was a party or in privity with a party to the prior adjudication. Kullick, ¶ 18. As Appellants point out in their brief on appeal, this Court has recognized that parties who are drawn into litigation as a result of a professional’s malpractice have a right to bring a subsequent and separate suit against the professional. See Fadness v. Cody (1997), 287 Mont. 89, 951 P.2d 584 (sellers who were awarded damages against purchasers as a result of fraud in real estate action have a subsequent and separate action against real estate agent and closing agent for their breaches of duty). The reason behind allowing a subsequent and separate action is that the later action raises different issues.
Identity of issues is the most crucial element of collateral estoppel. In order to satisfy this element, the identical issue or “precise question” must have been litigated in the prior action.
... The fact that each action arises from the same transaction does not mean that each involve the same issues.
Fadness, 287 Mont. at 96-97, 951 P.2d at 588-89 (citations omitted). We noted in Fadness that “[t]he duties owed by [the professionals] to the [plaintiff] were not decided, nor even considered by the jury in the first case.” Fadness, 287 Mont. at 97, 951 P.2d at 589. Similarly, in the case sub judice, the duties owed by Respondents were not considered or decided in the prior Beneficiary Suits. See In the Matter of Stanley L. and Carolyn M. Watkins Revocable Trust Agreement (Toole County Cause No. DV 96-016); In the Matter of the Estate of Stanley L. Watkins (Toole County Cause No. 92-DP-020).
¶29 Nor is equitable estoppel applicable in this case. Equitable estoppel is based upon the principle that “a party cannot, through his intentional ‘conduct, actions, language, or silence,’ induce another party to unknowingly and detrimentally alter his position and then subsequently deny the just and legal consequences of his intentional acts.” Kelly v. Wallace, 1998 MT 307, ¶ 43, 292 Mont. 129, ¶ 43, 972 P.2d 1117, ¶ 43.
¶30 The following elements must be proved by clear and convincing evidence to show equitable estoppel: (1) there must be conduct, acts, language, or silence amounting to a representation or a concealment of a material fact; (2) the facts must be known to the party to be estopped at the time of that party’s conduct, or at least the circumstances must be such that knowledge of the facts is necessarily imputed to that party; (3) the truth must be unknown to the other party at the time the representation was acted upon; (4) the representation must be made with the intent or the expectation that it will be acted on by the other party; (5) the representation must be relied upon by the other party, leading that party to act upon it; and (6) the other party must in fact rely on the representation so as to change its position for the worse. City of Whitefish v. Troy Town Pump, 2001 MT 58, ¶ 15, 304 Mont. 346, ¶ 15, 21 P.3d 1026, ¶ 15 (citing Billings Post No. 1634 v. Dept. of Revenue (1997), 284 Mont. 84, 90, 943 P.2d 517, 520).
¶31 In the instant case, Steve’s attorneys wrote to Respondents in October 1996, to put them on notice that they would be held liable for damages caused by Lacosta’s faulty work and to advise them to notify their malpractice carrier. The District Court erroneously concluded that equitable estoppel was created by representations in the letter that Carolyn’s claims were “without merit and barred by various statutes and general legal principals.” However, we have previously held that equitable estoppel is inapplicable when the conduct complained of consists solely of legal representations. City of Whitefish, ¶ 17 (citing Elk Park Ranch v. Park County (1997), 282 Mont. 154, 935 P.2d 1131).
¶32 Moreover, the party asserting equitable estoppel has the affirmative duty of proving its elements. Kelly, ¶ 43 (citations omitted). Here, Respondents have not submitted any evidence to establish that they relied on the letter or that they changed their position for the worse because of the letter. Thus, equitable estoppel is not applicable in this case.
¶33 Likewise, judicial estoppel has no application in this case. The doctrine of judicial estoppel binds a party to their judicial declarations and precludes a party from taking a position inconsistent with previously made declarations in a subsequent action or proceeding. Kauffman-Harmon v. Kauffman, 2001 MT 238, ¶ 15, 307 Mont. 45, ¶ 15, 36 P.3d 408, ¶ 15 (citing Fiedler v. Fiedler (1994), 266 Mont. 133, 139, 879 P.2d 675, 679). A party claiming that judicial estoppel bars another party from re-litigating an issue must show: (1) the estopped party had knowledge of the facts at the time he or she took the original position; (2) the estopped party succeeded in maintaining the original position; (3) the position presently taken is inconsistent with the original position; and (4) the original position misled the adverse party so that allowing the estopped party to change its position would injuriously affect the adverse party. Kaufman, ¶ 16 (citing In re Raymond W. George Trust, 1999 MT 223, ¶ 51, 296 Mont. 56, ¶ 51, 986 P.2d 427, ¶ 51).
¶34 Here, the record is devoid of any evidence that Respondents were misled and the District Court did not make any findings or conclusions that Respondents were misled. Furthermore,
[a] judicial admission is not binding unless it is an unequivocal statement of fact. Hence, “[f]or a judicial admission to be binding upon a party, the admission must be one of fact rather than a conclusion of law or the expression of an opinion.”
George Trust, ¶ 37 (quoting DeMars v. Carlstrom (1997), 285 Mont. 334, 337-38, 948 P.2d 246, 248-49). Thus, a judicial admission applies to facts, not to legal theories or positions. The District Court determined in the instant case that Appellants took the position that the provisions of the Trust and Stanley’s will were correctly and properly drafted and that Steve prevailed in the Beneficiary Suits. However, in that event, it would have been a legal position and not an unequivocal statement of fact.
¶35 Accordingly, we hold that the District Court erred in concluding that the doctrines of res judicata, collateral estoppel, equitable estoppel and judicial estoppel barred Appellants’ claims against Respondents.
Issue 3
¶36 Whether Appellants’ claims against Respondents are barred by the three-year statute of limitations for legal malpractice.
¶37 Appellants argue that the statute of limitations for technical defects in complex estate planning documents does not begin to run until laypersons discover or should have discovered the malpractice, a fact issue precluding summary judgment. Appellants further argue that concealment by the attorney also tolls the statute. Additionally, Appellants argue that the statute does not begin to run until damages are suffered and that they could not have sued before 1995, because until that time the estate plan was operating properly and to their benefit, thus they would have had no damages to sue upon.
¶38 The statute of limitations for a legal malpractice action provides:
An action against an attorney licensed to practice law in Montana or a paralegal assistant or a legal intern employed by an attorney based upon the person’s alleged professional negligent act or for error or omission in the person’s practice must be commenced within 3 years after the plaintiff discovers or through the use of reasonable diligence should have discovered the act, error, or omission, whichever occurs last, but in no case may the action be commenced after 10 years from the date of the act, error, or omission.
Section 27-2-206, MCA.
¶39 The first issue to address when determining whether a party is barred by the statute of limitations is when the statute begins to run. In the context of legal malpractice actions, we have held that both the “discovery rule” and the “accrual rule” are statutorily binding. Johnson, ¶¶ 11-20 (confirming statutory adoption of “discovery rule”); Uhler v. Doak (1994), 268 Mont. 191, 195-200, 885 P.2d 1297, 1300-03 (confirming statutory adoption of “accrual rule”).
¶40 The “discovery rule” begins the statute of limitations upon the discovery of the negligent act. Section 27-2-206, MCA; Johnson, ¶¶ 11-20. The “accrual rule” provides that the statute of limitations begins when all elements of a claim, including damages, have occurred. Uhler, 268 Mont. at 195-200, 885 P.2d at 1300-03 (adopting “accrual rule” pursuant to §§ 27-2-102(l)(a) and (2), MCA). Thus, the law in Montana for legal malpractice actions is that the statute of limitations does not begin to run until both the “discovery rule” and the “accrual rule” have been satisfied. Hence, the statute of limitations in a legal malpractice action does not begin to run until the negligent act was, or should have been, discovered, and all elements of the legal malpractice claim, including damages, have occurred.
Discovery Rule
¶41 Appellants’ failure to discover Lacosta’s purported negligence may be excused because of the complexity of the legal transaction involved. In Young v. Datsopoulos (1991), 249 Mont. 466, 817 P.2d 225, we held that if a legal transaction is beyond the understanding of a layperson and the “date of discovery” is disputed, summary judgment is not appropriate. In Young, the decedent’s family hired defendants to probate decedent’s estate. The family claimed that defendants committed legal malpractice by misadvising the family concerning removal of a co-personal representative; the possible defense of lack of consideration to a claim against the estate on several promissory notes; and abandonment of several potential lawsuits. Young, 249 Mont. at 469, 817 P.2d at 227. We reversed the trial court’s grant of summary judgment reasoning that the legal transactions constituting the alleged malpractice were beyond the understanding of a layperson, therefore, when the facts should have been knowable was a question of fact precluding summary judgment. Young, 249 Mont. at 473, 817 P.2d at 229.
¶42 Furthermore, a drafting attorney may not impose upon her client a duty to understand defects in a technical instrument in order to defeat a malpractice claim. In Neel v. Magana, Olney, Levy, Cathcart & Gelfand (Cal. 1971), 491 P.2d 421, 428, the California Supreme Court judicially adopted a “discovery” rule for statutes of limitation in legal malpractice cases stating:
Corollary to [the attorney’s] expertise is the inability of the layman to detect its misapplication; the client may not recognize the negligence of the professional when he sees it. He cannot be expected to know the relative medical merits of alternative anesthetics, nor the various legal exceptions to the hearsay rule. If he must ascertain malpractice at the moment of its incidence, the client must hire a second professional to observe the work of the first, an expensive and impractical duplication, clearly destructive of the confidential relationship between the practitioner and his client.
... In the legal field, the injury may lie concealed within the obtuse terminology of a will or contract;...
¶43 Here, the estate plan created by Lacosta created wills with pour-over provisions and several trusts. The complexity of this estate plan made it difficult even for experts to understand. John Hagman, an insurance and financial advisor with substantial experience in estate planning, could not determine whether the Trust was an irrevocable QTIP trust. Although attorney Neil McKay was ultimately able to comprehend the estate plan, he testified in his deposition that he spent numerous hours attempting to unravel and understand the plan. Given the inability of these professionals to understand the estate plan, we conclude that it was clearly beyond Appellants’ understanding. Furthermore, Lacosta presented no facts to show that either Steve, the Trust or the Estate discovered, or through the use of reasonable diligence should have discovered, the defects in the Trust documents in 1992 when Stanley’s will was probated.
¶44 In addition, whether a plaintiff discovers, or through the use of reasonable diligence should have discovered, the act, error, or omission depends not only on the complexity of the defect, but also on whether the defect is concealed. To that end, this Court has held that
[t]he three-year statute of limitations for legal malpractice actions contains a built-in tolling mechanism for a defendant’s fraudulent concealment of a plaintiffs injury. That is, a statute of limitations does not begin to run until the plaintiff discovers, or with reasonable diligence should have discovered, the act, error, or omission.
Joyce v. Garnaas, 1999 MT 170, ¶ 15, 295 Mont. 198, ¶ 15, 983 P.2d 369, ¶ 15. Thus, in the context of legal malpractice, a nexus exists between a defendant’s fraudulent concealment and the question of whether a plaintiff should have discovered the defendant’s negligent act.
¶45 Although we have not yet ruled upon this issue, other courts have held that “mere failure to reveal information can be fraudulent concealment by a person, such as a fiduciary, who has a duty to disclose.” Geo. Knight & Co. v. Watson Wyatt & Co. (1st Cir. 1999), 170 F.3d 210, 215 (citation omitted). Thus, “if a trust or confidential relationship exists between the parties, which imposes a duty to disclose, mere silence, by the one under that duty constitutes fraudulent concealment and thus tolls the applicable statute of limitations.” Greene v. Morgan, Theeler, Cogley & Petersen (S.D. 1998), 575 N.W.2d 457, 462 (citation omitted).
¶46 This rule recognizes that a client’s failure to discover an attorney’s malpractice often results from “a second breach of duty by the fiduciary, namely, a failure to disclose material facts to his client.” Neel, 491 P.2d at 429. As the California Supreme Court noted in Neel, tolling the statute of limitations when the attorney remains silent “vindicates the fiduciary duty of full disclosure; it prevents the fiduciary from obtaining immunity for an initial breach of duty by a subsequent breach of the obligation of disclosure.” Neel, 491 P.2d at 429.
¶47 In the instant case, the technical nature of the alleged defects, Lacosta’s actions as a fiduciary and as an officer of the court in allegedly concealing the false attestations on Stanley’s will when submitted to probate, her allegedly contradictory advice about the operation of the Trust, and her alleged treatment of the Trust and Stanley’s will as valid and operative, are exactly the type of factual questions appropriate for resolution by a trier of fact. See Young, 249 Mont. at 473, 817 P.2d at 229.
Accrual Rule
¶48 Section 27-2-102, MCA, provides in pertinent part:
When action commenced. (1) For the purposes of statutes relating to the time within which an action must be commenced:
(a) a claim or cause of action accrues when all elements of the claim or cause exist or have occurred, the right to maintain an action on the claim or cause is complete, and a court or other agency is authorized to accept jurisdiction of the action;
(2) Unless otherwise provided by statute, the period of limitation begins when the claim or cause of action accrues. Lack of knowledge of the claim or cause of action, or of its accrual, by the party to whom it has accrued does not postpone the beginning of the period of limitation.
¶49 We have held that this “accrual rule” applies to legal malpractice actions and that the statute of limitations does not begin to run until all elements of a claim, including damages, have occurred. Uhler, 268 Mont. at 195-200, 885 P.2d at 1300-03. More specifically, we stated that
[i]n order to establish a cause of action for legal malpractice, there must be a showing that the attorney owed his client a duty of care, that there was a breach of this duty by a failure to use reasonable care and skill, and that the breach was the proximate cause of the client’s injury and resulted in damages.
Uhler, 268 Mont. at 196, 885 P.2d at 1300 (citing Merzlak v. Purcell (1992), 252 Mont. 527, 529, 830 P.2d 1278, 1279-80) (emphasis added). In Uhler, we overruled our prior decision in Boles v. Simonton (1990), 242 Mont. 394, 791 P.2d 755, wherein we determined that the statute of limitations precluded plaintiffs claims against their attorney even before they had sustained any actual damages as a result of the malpractice. Uhler, 268 Mont. at 199, 885 P.2d at 1302. We further stated in Uhler that it is inherently illogical and unfair to require a plaintiff to file an action prior to the accrual of the cause of action because if a plaintiff filed suit when no actual damages had been sustained, the suit would properly be dismissed. Uhler, 268 Mont. at 198, 885 P.2d at 1302. Moreover, the mere threat of future harm does not constitute actual damages. Uhler, 268 Mont. at 198-99, 885 P.2d at 1301-02.
¶50 In the instant case, Respondents contend that the latest that the statute of limitations could have started to run is April 1992, when Stanley’s will was admitted to probate and when Carolyn acted to her later alleged detriment. However, this fails to explain how Carolyn’s reliance on the will by treating it as valid and seeking its probate damaged Appellants in any fashion. On the contrary, Steve, the Estate and the Trust could not have filed suit against Respondents in 1992 complaining that the Trust agreement and Stanley’s will were operating as valid testamentary documents, to their benefit, and exactly as estate planning documents should operate. In short, there were no damages in 1992 precisely because Stanley’s will was admitted to probate and the Trust was being implemented. Prior to 1995, no claim had been asserted jeopardizing the Trust, Stanley’s will or the bequest to Steve of the trucking operation.
¶51 The Idaho Supreme Court has adopted an “objectively ascertainable damage” rule in legal malpractice actions requiring “objective proof that would support the existence of some actual damage.” Chicoine v. Bignall (Idaho 1992), 835 P.2d 1293, 1298. Like Montana, the Idaho court requires more than faulty legal documents taking final effect. Instead, the cases look for some damage caused by an activity adverse to the damaged party. See, e.g., Elliott v. Parsons (Idaho 1996), 918 P.2d 592 (damages occurred not when faulty legal documents drafted and implemented for sales transactions, but rather four years later when clients incurred legal fees to resolve resulting disputes with the I.R.S.); Bonz v. Sudweeks (Idaho 1991), 808 P.2d 876 (no damages when faulty legal work was done by filing a release of lis pendens in the wrong county; rather, damages occurred later when the mistake resulted in the loss of a potential financier). See also Marshall v. Fenton, Fenton, Smith, Reneau & Moon (Okla. 1995), 899 P.2d 621 (where client is involved in litigation through attorney’s negligence, client suffers no damages until the litigation begins).
¶52 Based on the foregoing, we reiterate our holding in Uhler that the statute of limitations for legal malpractice actions does not begin to run until all elements of a claim, including damages, have occurred. Uhler, 268 Mont. at 195-200, 885 P.2d at 1300-03. In this case, Appellants did not sustain any damages until 1995.
¶53 Accordingly, we hold that the present action, filed on April 3, 1997, was well within the three-year statute of limitations for legal malpractice actions.
¶54 Reversed and remanded for further proceedings consistent with this Opinion.
JUSTICES COTTER, REGNIER and LEAPHART concur. | [
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
The only question presented in this ease is whether the treasurer of Lewis and Clark county could lawfully collect from the plaintiff, for the year 1911, the tax heretofore imposed upon insurance companies under the provisions of section 4073, Re vised Codes. So much of this section as is pertinent reads as follows: “Bach and every insurance corporation or company transacting business in this state must be taxed upon the excess of premiums received over losses and ordinary expenses incurred within the state during the year previous to the year of listing in the county where the agent conducts the business, properly proportioned by the corporation or company at the same rate that all other personal property is taxed, and the agent shall render the list, and be personally liable for the tax; and if he refuse to render the list or to make affidavit that the same is correct, to the best of his knowledge and belief, the amount may be assessed according to the best knowledge and discretion of the assessor.”
By an Act of the legislative assembly, approved March 2, 1911 (Laws 1911, Chap. 67), which became operative immediately upon its approval, section 4073 was repealed. Notwithstanding the repeal, the county assessor demanded from the plaintiff the list provided for in section 4073. This the plaintiff furnished under protest, and thereafter, under like protest, paid to the defendant $79.69, the amount of the tax levied by the taxing authorities of the county upon the excess of premiums collected by the plaintiff, as shown therein, for the year 1910. This action was brought to recover the amount so paid. The district court held the tax unlawful and rendered judgment for the plaintiff. The defendant has appealed.
Under section 2510, Revised Codes, it is the duty of the county assessor to ascertain and list all property in his county subject to taxation, and assess the same to the person by whom it is owned or claimed, or in whose possession or control it was at 12 o ’clock noon on the first Monday of March of the current year. The first Monday in March, 1911, fell on the sixth day of the month. By virtue of the repeal of section 4073, there was, at the time the list was furnished and the assessment and levy were made, no provision of law requiring the payment of the tax. It was within the power of the legislature to have made a reservation in the repealing Act, requiring the payment of the tax upon the excess of premiums collected for tbe year 1910; but it did not do so. The Act contains no reservation, and became immediately operative. Whatever liability there was upon the plaintiff to pay any tax during the year 1911 attached subsequent to the passage of the repealing Act. Hence, as no liability had attached at the time the levy and assessment were made, they were both without authority of law. The repeal of the Code provision had the effect of blotting it out as completely as if it had never existed. (36 Cyc. 1224.)
There is no suggestion by counsel on either side that the repealing Act violates any provision of the Constitution touching the taxation of property, or that by virtue of it the plaintiff has been permitted to escape the payment of taxes upon any of its property or assets subject to taxation in this state.
The judgment is affirmed.
'Affirmed.
Me. Justice Smith and Me. Justice Holloway concur. | [
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MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
This action was brought to recover a tax paid under protest. A general demurrer to the complaint was sustained, judgment rendered and entered for defendant, and plaintiff appealed.
The complaint alleges that the only solvent credits owned by W. B. Dolenty at 12 o’clock noon on the first Monday in March, 1908, or at any other time during the same year, which were liable to taxation, were of the value of $1,180, and no more; that such credits were duly listed by the county assessor for taxation, and the assessment made upon that valuation; that thereafter the board of equalization, without notice to Dolenty, and without knowledge on his part of such action or contemplated action, and without making any investigation or hearing any evidence, decided and determined that Dolenty’s assessment of solvent credits was incorrect, incomplete, and false, and thereupon directed the county assessor to assess to him solvent credits to the value of $19,785 in addition to those already returned and listed; that thereafter Dolenty appeared before the board, protested against such increase, introduced evidence to show' that his original assessment was true and correct, and petitioned the board for a correction of such assessment to the amount originally returned, but that the board refused to make any reduction, and ordered the assessment, as amended by the board, to stand as Dolenty’s assessment for solvent credits for that year. It is then -alleged that the tax levied and extended upon such increased assessment amounted to $712.26; that this tax was invalid, and was paid under protest. This action was commenced on May 1, 1909.
Conceding, without deciding, some of the contentions made by appellant, and we have for consideration the principal question involved, viz.: Can this action be maintained ? Apparently, it is insisted that this action is brought under section 2742 of the Revised Codes; and it is urged that the limitation found in section 2743 does not have any application. Section 2742, as it appeared originally, was enacted March 18, 1895, and is found in the Political Code of 1895 as section 4024. At that time, there was not any provision of law corresponding to section 2743, Revised Codes. In 1905 an Act was passed entitled “An Act to amend section 4024 of the Political Code of the state of Montana, relating to the protest of taxes, and providing for an action at law to recover taxes paid under protest, by adding thereto a section to be known as section 4024-A, relating to assessment and collection of taxes.” (Laws of 1905, Chap. 108.) This title indicates that it was the intention of the legislature to amend section 4024, Political Code, not to enact a new or distinct statute; and the amendment thus made, or the principal part of it, is now found in the Revised Codes of 1907 as section 2743. Provision had been made in section 3789, Political Code (Rev. Codes, sec. 2581), for notice to the taxpayer whenever the board of equalization contemplated an increase of his assessment over the amount returned; but there was not any provision which declared what the effect of a failure to give the notice would have upon the tax of the added portion of the assessment. Manifestly, one purpose of the amendment of 1905 was to provide for like notice whenever the assessor, in advance of the meeting of the board, contemplated making an increase of such assessment; and another was to declare that if the assessment was increased, either by the board or the assessor, and the taxpayer was not given an opportunity to be heard, he might have the tax upon the increase adjudged to be void, if he paid under protest and brought his action under section 4024. But the amendment goes further. It provides that whenever any person has appeared before the board and has contested the increase of his assessment, and is aggrieved at the final action of tbe board, be may attack tbe tax upon tbe increase in court, in an action brought under 4024, upon tbe grounds and for the reasons' advanced by him before tbe board, and for no other reasons and upon no other grounds. This was a distinct limitation upon tbe right which he had theretofore enjoyed under 4024 before the amendment went into effect. But the amendment goes still further, and provides that any action brought to recover any tax paid under protest for any reasons mentioned in the amendment must be commenced on or before November 30 of the-year in which the tax was paid.
It is suggested by counsel for appellant that the phrase “for any reasons mentioned in this section” limits the class of actions which must be brought on or before November 30 to actions instituted to recover taxes upon the increase made to an assessment by the assessor, and not to an increase "made by the board. But this cannot be true. Aside from the first paragraph of the amendment, the Act very clearly discloses that it was the intention of the legislature to have it apply to actions brought to recover a tax paid under protest, whether the tax was upon an increase of the assessment made by the assessor or the board, and whether the taxpayer had been given notice or not. The second proviso of the amendment makes this clear. It provides the rule by which the tax on the increased assessment is to be determined “when an action is instituted to recover any tax paid under protest on the ground and for the reason that the valuation of the property as increased by the board of equalization or assessor, is an overvaluation of such property,” If the Act of 1905 did not amend section 4024 in the particular which we have indicated, it did not amend that section at all, and the expressed purpose of the legislature, as indicated in the title of the Act, was defeated; for it is elementary that, if the amendatory Act is not germane to the subject matter of the Act to be amended, then it is not of any effect whatever as an amendment. (36 Cye. 1056.)
As a further argument in favpr of the contention just noticed, counsel for appellant direct attention to the fact that after these provisions bad been carried forward into the Revised Codes of 1907 as sections 2742 and 2743, they were again amended by an Act approved March 10, 1909, and in section 2742 there was inserted the proviso “that any action instituted to recover any tax paid under protest shall be commenced within sixty days after the thirtieth day of November of the year in which such tax was paid” (Laws 1909, p. 202); while section 2743 was amended by modifying the provision, referred to above, to read: “Provided, that any action instituted for the purpose of recovering any tax paid under protest for any of the reasons mentioned in this section shall be commenced within sixty days after the thirtieth day of November, of the year in which such tax was paid. ” It is argued with much force that, if the limitation in section 2743 applied to actions arising under 2742, then there was not any reason for this amendment to 2742, and that by making the amendment the legislature in effect construed the provision in section 2743 as not applying to actions brought under 2742; and at first blush the argument appears forceful. The provision of section 2743, both before and after the amendment of 1909, applies only to actions brought to recover taxes paid under protest for any of the reasons mentioned in that section; while the amendment to 2742 applies generally to any action instituted to recover any tax paid under protest. Apparently the legislature assumed that taxes might be paid under protest and contested for reasons other than those referred to in section 2743; and it was for the purpose of covering such cases that the amendment to 2742 was made, and a uniform rule established covering all cases of actions to recover taxes paid under protest. This construction seems reasonable; while the contention of appellant is not in harmony with either the expressed declaration of the legislature or the manifest intention disclosed in 2743 before the amendment of 1909 was made. Clearly this action is brought within the provisions of section 2743. The allegations of the complaint bring the action squarely within that portion of the section which reads: “When any person has appeared before the county board of equalization, and lias contested' the increase in the estimated value of his property, or the additions of other property to his assessment list, and is aggrieved at the final action of the board in making' or allowing such increase or addition, he may, in the action provided for in said section 2742 (4024) of the Political Code, contest and litigate the payment o'f taxes on such increased valuation or added property list.”
It is insisted by counsel for appellant that the provision of section 2743 which prescribes a limit upon the time for bringing an action, even if applicable to cases arising under 2742, is merely a statute of limitation, the bar of which cannot be raised by a general demurrer to the complaint. If counsel properly characterize the provision, their conclusion is correct. It is the rule in this state that a general demurrer does not raise the question of the bar of the statute of limitations. But we are of opinion that this is something more than a mere statute of limitation. The right to sue for taxes paid under protest is purely statutory. Without the statute, the right would not exist. The same statute which confers the right fixes the time within which it must be exercised and the grounds upon which the right may be asserted. To one situated as Dolenty was, who had appeared before the board and had been unsuccessful in his contest there, the statute prescribes three conditions to his right to maintain an action to recover back the taxes paid upon the increased assessment, viz.: (1) The tax must have been paid under protest; (2) he must allege the same grounds of complaint in his action as he urged before the board; and (3) he must have commenced his action on or bef ore November 30 of the year in which such tax was paid. There is not any distinction made as between these several provisions. If the existence of any one of these facts is a condition precedent to plaintiffs right to maintain her action, the existence of each of the others is equally so. If it appeared from the complaint that plaintiff had not paid the tax under protest, the complaint would not state a cause of action under the statute. If it appeared that plaintiff had been before the board, but had been un successful, or was aggrieved at the final action of the board, and it further appeared from the complaint that the grounds of her attack in the action were different from those urged before the board, her complaint would be fatally defective under the statute. We do not see any reason for saying that the same rule should not apply as to the third provision; and when it appears that the action was not brought until after November 30 of the year in which the tax was paid, as in this case, the plaintiff thereby discloses that she has not the right to prosecute this action. The state has prescribed the conditions upon which it consents that one of its counties may be sued for taxes paid; and compliance with those conditions is a necessary condition precedent to an exercise of the right thus conferred. (Haycraft v. United States, 22 Wall. (U. S.) 81, 22 L. Ed. 738; Hamner v. United States, 13 Ct. of Cl. 7.)
The rule is well settled in this country that whenever a statute grants a right which did not exist at common law, and prescribes the time within which the right must be exercised, the limitation thus imposed does not affect the remedy merely, but is of the essence of the right itself, and one who seeks to enforce such right must show affirmatively that he has brought his action within the time fixed by the statute; and if he fails in this regard, he fails to disclose any right to relief under the statute. (25 Cyc. 1398; Bank v. Powhatan Clay Co., 102 Va. 274, 1 Ann. Cas. 83, 46 S. E. 294; Lambert v. Ensign Mfg. Co., 42 W. Va. 813, 26 S. E. 431; Taylor v. Cranberry I. & C. Co., 94 N. C. 525; The Harrisburg, 119 U. S. 199, 30 L. Ed. 358, 7 Sup. Ct. Rep. 140; Hill v. Board of Supervisors, 119 N. Y. 344, 23 N. E. 921.)
In Finnell v. Southern Kan. Ry. Co. (C. C.), 33 Fed. 428, the court said: “There is also another class of cases in which a cause of action which does not exist at eommon law is created by the laws of a state. Causes of action of that character only exist in the manner and form and for the length of time prescribed by the statutes of the state which created them.”
In speaking of a statute very similar to the one now before us, the supreme judicial court of Massachusetts, in Wheatland v. City of Boston, 202 Mass. 258, 88 N. E. 769, said: “It is to be observed that this is not a mere statute of limitations. It establishes certain conditions precedent to the maintaining of an action to recover back a tax. One of these is, in substance, that the payment must have been made under protest, or under certain modes of compulsion.mentioned in the statute; the other is that the action shall have been brought within the time specified. Compliance with the latter of these conditions is no less essential to the right of action than compliance with the former.”
The principle involved here is analogous to that invoked in adverse suits instituted under section 2326, United States Revised Statutes (U. S. Comp. Stats. 1901, p. 1430); and, since it appears that this action was not commenced on or before November 30, 1908, the plaintiff fails to state a cause of action under the statute, unless she can invoke the benefit attempted to be conferred by the further proviso of the amendment of 1909, which reads as follows: “And provided further, that in all cases where taxes, licenses or other demands have been paid upder protest, during the year 1907 and 1908, and no suit has been brought to recover the same, action to recover the same as herein provided shall be brought within sixty days after the passage and approval of this Act; and if not so brought, the same shall be forever barred. ’ ’ If the provision in section 2743 is a statute of limitations merely affecting the remedy, then the power of the legislature to waive any advantage under it, as against the state, might well be conceded; but as we have held that the provision does not affect the remedy merely, but is of the essence of the right conferred, the power of the legislature to re-create a right already lost is specifically withheld by our Constitution. Section 13, Article XY, reads as follows: “The legislative assembly shall pass no law for the benefit of a railroad or other corporation, or any individual, or association of individuals, retrospective in its operation, or which imposes on the people of any county or municipal subdivision of the state a new liability in respect to transactions or considerations already passed.”
The judgment is.affirmed.
’Affirmed.
Mb. Chief Justice Brantly and Mr. Justice Smith concur. | [
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JUSTICE GRAY
delivered the Opinion of the Court.
John J. Mann and Mann Farms, Inc. appeal from orders of the Fifteenth Judicial District Court, Roosevelt County, granting summary judgment and dismissing third-party claims. They also appeal an order of the District Court denying a motion to dissolve an injunction. John Mann appeals the contempt order entered against him for refusing to comply with the injunction. We affirm in part, reverse in part and remand.
We phrase the issues on appeal as follows:
1) Does the failure of John Mann and Mann Farms, Inc. to post a supersedeas bond on appeal or otherwise stay the proceedings below render this appeal moot?
2) Did the District Court err in concluding that the claims the Mann Family asserted against the third-party defendants did not constitute sufficient grounds for relief from the Mann I judgment under Rule 60(b), M.R.Civ.P.?
3) Did the District Court err in granting summary judgment for the Bank on its foreclosure complaint?
4) Can the District Court’s grant of summary judgment on foreclosure be upheld as to Mann Farms under the doctrines of judicial estoppel, equitable estoppel or quasi-estoppel?
5) Did the District Court err in refusing to dissolve an injunction and in finding John Mann in contempt for failing to abide by the injunction?
The details surrounding this appeal constitute a morass of factual and procedural intricacies. In 1976, Wilbur, Edna, John and Frances Mann formed Mann Farms, Inc. (Mann Farms). (Mann Farms and the individual Mann family members are referred to collectively herein as the Mann Defendants.) They began banking with Traders State Bank of Poplar (the Bank) and operated for several years on an unsecured basis. Mann Farms’ debt load increased, however, and in 1983, the Bank required security for Mann Farms’ line of credit. The parties began negotiations in late April of 1985 in attempts to reduce the loan balance.
On April 29,1985, the Mann Defendants executed two promissory notes to the Bank. The first note renewed a previous note of $215,000, and the second renewed a previous note of $85,000. On that date, the Mann Defendants also signed a mortgage pledging real property to secure the $300,000 of existing debt (the $215,000 and the $85,000 debts evidenced by the renewal notes) and $150,000 of contemplated future advances. In addition, they executed four security agreements, which were:
• A security agreement covering crops, livestock and farm equipment and vehicles signed on April 29, 1985 by John Mann, Frances Mann, Wilbur Mann, and Edna Maim, individually and as officers of Mann Farms as security for notes totalling $300,000;
• A security agreement covering a 1962 11/2 ton truck signed on May 15,1985, by Wilbur Mann as security for the $215,000 note;
• A security agreement covering various farm vehicles signed on May 15, 1985 by John Mann as president of Mann Farms as security for the $215,000 note; and
• A security agreement covering livestock signed on May 13,1985, by Patricia Mann Mingus as security for notes totalling $300,000 (Patricia Mingus is not a party to this appeal but had ownership interest in the cattle).
On May 1,1985, the Bank advanced the Mann Defendants $7,500, which was evidenced by a promissory note and designated by the Bank as operating money for 1985. Around this time, the Bank approved two additional conditional loans of $25,000 each. Due to disagreements over the collateral for the conditional loans, the funds were not advanced.
On May 15,1987, Mann Farms filed for bankruptcy under Chapter 12 of the United States Bankruptcy Code. On March 28, 1988, the Mann Defendants filed a tort claim against the Bank alleging, among other things, breach of the covenant of good faith and fair dealing and breach of fiduciary duty.
As required by the Bankruptcy Act, Mann Farms then filed its plan of reorganization and characterized the debt with the Bank as dis puted. The reorganization plan specified that the Bank’s lien status would be determined in conjunction with the bad faith action in state court. The Bank immediately contested the plan, arguing that Mann Farms could not seek to cancel the notes in state court and simultaneously seek to restructure the notes in the bankruptcy action. Mann Farms amended its plan of reorganization, and included the following clause:
The Debtor will not contest the validity of notes, mortgages, or security interests of the Bank in state court or by adversary proceedings in this court. Debtor does intend to pursue the state court action previously commenced by the debtor, insofar as prosecution of the debtor’s tort claims are concerned.
On June 22, 1988, the United States Bankruptcy Court for the District of Montana approved the amended plan of reorganization, and the Bank appealed to the United States District Court. That court also affirmed the amended plan, and the Bank appealed to the United States Court of Appeals for the Ninth Circuit, arguing that the state court tort action would restructure de facto its status in the bankruptcy plan. The Ninth Circuit concluded that the tort claims were independent of the contractual rights of the parties and, therefore, that the Mann Defendants’ action for tort damages in state court could not affect the approved plan of reorganization. In re Mann Farms, Inc. (9th Cir. 1990), 917 F.2d 1210, 1213.
Meanwhile, in state court, the District Court granted summary judgment in favor of the Bank on the tort claims. We affirmed in Mann Farms, Inc. v. Traders State Bank (1990), 245 Mont. 234, 801 P.2d 73 (Mann I)-
On April 19,1991, the United States Bankruptcy Court dismissed Mann Farms’ bankruptcy proceeding; final decree closing the case was filed May 28,1991. Two months later, the Bank filed a complaint against the Mann Defendants, seeking judgment on the promissory notes signed April 29 and May 1,1985, which totalled $307,500, and foreclosure of the security agreements and mortgage described above. The complaint alleged that on May 15, 1987, the Mann Defendants had defaulted on the notes and that, at the time of the complaint, they owed the Bank $575,709.85. The Bank also sought to foreclose on a March 23,1984, security agreement covering crops, cattle, and farm equipment signed by John Mann as president of Mann Farms as security for notes totalling $305,100.
John, Frances, Wilbur and Edna Mann (the Mann Family), appearing pro se, answered the foreclosure complaint by generally denying its allegations. They also asserted third-party claims against Northeast Montana Bank Shares (the holding company for Traders State Bank of Poplar) and two bank employees, John Witte and Richard Loegering (the Bank Defendants), alleging that the Bank Defendants had committed fraud upon the court in the earlier bad faith action. Additionally, they asserted third-party claims against Bruce Fredrickson, Charles Cashmore, Malcolm Goodrich, and the law firm of Crowley, Haughey, Hanson, Toole & Dietrich (the Lawyer Defendants), claiming that the Lawyer Defendants had assisted in perpetrating this alleged fraud. They also asserted third-party claims against district court judge James Sorte, for abandoning his judicial function in the bad faith action, and against First Citizens Bank of Wolf Point, for conspiring with the Bank to subvert the judicial process.
On August 12,1991, John Mann, acting in his capacity as president of Mann Farms, transferred all assets held by Mann Farms into the Mann Family Trust. The Bank then sought an injunction requiring the Mann Defendants to provide an accounting of all proceeds received from any sale of the Bank’s collateral and to execute certain financing statements; the Bank also asked the court to enjoin the Mann Defendants from disposing of any of the Bank’s collateral and from retaining any proceeds that may have been obtained from the collateral.
Upon motion of the Bank, on September 3,1991, the District Court entered a default judgment on the foreclosure claim against Mann Farms for failing to respond to the foreclosure complaint.
Judge Sorte and First Citizens Bank of Wolf Point moved to dismiss the third-party claims. The Bank Defendants and the Lawyer Defendants moved for summary judgment on the third-party claims asserted against them. After a hearing on the motions on October 3, 1991, the District Court dismissed the Mann Family’s third-party claims against Judge Sorte and First Citizens Bank of Wolf Point. The court also granted the Lawyer Defendants and the Bank Defendants’ motions for summary judgment and issued the injunction requested by the Bank.
On November 4,1991, counsel appeared on behalf on Mann Farms. On November 15, Mann Farms moved to set aside the default judgment entered against it. The District Court set aside the default judgment and allowed Mann Farms to file an answer. Mann Farms’ answer generally denied the foreclosure allegations and asserted various affirmative defenses. John Mann and the other family members continued to represent themselves pro se.
The Bank also moved for summary judgment on its foreclosure complaint. In response, Mann Farms moved for summary judgment on that issue; the Mann Family contended that summary judgment was improper because genuine issues of material fact existed regarding the foreclosure complaint. The Bank requested the District Court to hold the Mann Defendants in contempt for their continued failure to comply with the requirements of the October preliminary injunction.
On December 20, 1991, a hearing was held on the remaining motions. Mann Farms orally moved to dissolve the injunction; the court denied the motion. After testimony and oral argument, the District Court granted summary judgment for the Bank on the issue of foreclosure. In a separate order, the District Court also found each Mann family member to be in contempt of court for failing to comply with its earlier injunction. This appeal follows.
During the lower court proceedings, John, Frances, Edna and Wilbur Mann signed the pleadings individually and represented themselves pro se. On appeal, we note that only John Mann and Mann Farms have filed a notices of appeal. In Montana, a non-lawyer may represent himself or herself, but only attorneys may practice law and represent others. Weaver v. Law Firm of Graybill, et al. (1990), 246 Mont. 175, 178, 803 P.2d 1089, 1091; § 37-61-210, MCA. John Mann may not appeal on behalf of Frances, Wilbur and Edna Mann. Therefore, John Mann and Mann Farms are the only appellants properly before this Court.
Does the failure of John Mann and Mann Farms, Inc. to post a supersedeas bond on appeal or otherwise stay the proceedings below render this appeal moot?
As a threshold issue, the Bank argues that because it has foreclosed upon the security for the debt, and neither John Mann nor Mann Farms posted a supersedeas bond or stayed the lower proceedings, this appeal is moot. It cites First Sec. Bank of Kalispell v. Income Properties, Inc. (1984), 208 Mont. 121, 126, 675 P.2d 982, 985, which held that a defendant is considered to have acquiesced in a judgment if a bond is not posted or a stay of proceedings obtained, citing Gallatin Trust & Sav. Bank v. Henke (1969), 154 Mont. 170, 461 P.2d 448.
Since First Sec. Bank was decided, we have held that where payment or performance of a judgment by an appellant is involuntary, the appellant does not acquiesce to the judgment and the right to appeal is not affected. LeClair v. Reiter (1988), 233 Mont. 332, 335,
760 P.2d 740, 742 (emphasis added). In LeClair, the respondents foreclosed on a contract for deed and filed the quitclaim deeds prior to our review. Like the Bank in this case, the respondents argued that because they repossessed the property and the appellant had not filed a supersedeas bond or otherwise stayed execution, the appeal was moot. LeClair, 760 P.2d at 742. We expressly overruled Henke and, in effect First Sec. Bank, and held that the appeal was not moot because the defendant had not voluntarily surrendered the property. LeClair, 760 P.2d at 742; First Nat’l Bank in Eureka v. Giles (Mont. 1987), 225 Mont. 467, 733 P.2d 357, 43 St.Rep. 1326, 1328.
As in LeClair, Mann Farms and John Mann did not voluntarily relinquish their real estate and personal property to the Bank; the Bank foreclosed. We conclude that the failure to post a supersedeas bond or otherwise stay the proceedings below does not render Mann Farms and John Mann’s appeal moot.
Did the District Court err in concluding that the claims the Mann Family asserted against the third-party defendants did not constitute sufficient grounds for relief from the Mann I judgment pursuant to Rule 60(b), M.R.Civ.P.?
In response to the Bank’s foreclosure complaint, the Mann Family set forth a variety of third-party claims. John Mann appeals only the dismissal of the third-party claims against the Bank Defendants and the Lawyer Defendants. The substance of those claims, as paraphrased by this Court, are:
• that the Bank Defendants conspired with the Lawyer Defendants to deceive the court and subvert justice in Mann I;
• that Bank Defendant Loegering and Lawyer Defendant Fredrickson perjured themselves during testimony and argument in Mann I;
• that the Lawyer Defendants used “forceful argument” and “artful pleading” to develop a fictitious theory of the case that misled the district court in Mann I; and
• that the Lawyer Defendants misrepresented facts to the district court in Mann I.
We note initially that although these allegations originally were pled as third-party claims, John Mann testified at the October 3, 1991, hearing on the third-party claims that the claims were filed under Rule 60(b), M.R.Civ.R, and had no standing outside of that rule. The District Court concluded that, even if all the allegations against the Lawyer Defendants and the Bank Defendants were true, the claims did not constitute sufficient grounds for maintaining an inde pendent equitable action to set aside the judgment under Rule 60(b), M.R.Civ.P. The District Court also set forth alternative bases for granting summary judgment in favor of both the Lawyer Defendants and the Bank Defendants. Because we find Rule 60(b), M.R.Civ.P., dispositive, we need not address the alternative theories.
We have stated that a party seeking relief from a judgment through an independent equitable action under Rule 60(b) has three avenues of relief: extrinsic fraud, lack of personal notification, and fraud upon the court. Salway v. Arkava (1985), 215 Mont. 135, 140, 695 P.2d 1302, 1305; Brown v. Small (1992), 251 Mont. 414, 420, 825 P.2d 1209, 1213. Lack of personal notification is inapplicable to the present case; accordingly, we examine the third-party claims to determine whether extrinsic fraud or fraud upon the court provide sufficient grounds for the Rule 60(b) action.
Extrinsic fraud is defined as fraud that has prevented the unsuccessful party from presenting his or her case. Extrinsic fraud is collateral to the matters tried by the court and is not fraud in the matters on which the judgment was rendered. Brown v. Jensen (1988), 231 Mont. 340, 346, 753 P.2d 870, 874. We have held repeatedly that neither perjured testimony nor false or fraudulent allegations used in obtaining a judgment constitute extrinsic fraud. Jensen, 753 P.2d at 875; Salway, 695 P.2d at 1307.
It is apparent that none of the Mann family’s allegations, even if taken as true, constitute extrinsic fraud. None of the allegations regarding the Lawyer Defendants or the Bank Defendants are collateral to the action in Mann I; all focus on alleged fraud during the proceedings in Mann I. Accordingly, we conclude that the Mann family’s allegations are insufficient for relief from the judgment for extrinsic fraud pursuant to Rule 60(b), M.R.Civ.P.
Rule 60(b), M.R.Civ.P. also allows relief from a judgment for “fraud upon the court.” We have characterized fraud upon the court as that species of fraud which subverts or attempts to subvert the integrity of the court itself. Salway, 695 P.2d at 1306; Small, 825 P.2d at 1213. Fraud which attempts to defile the court has been construed to include only the most egregious conduct, such as bribery of a judge or member of the jury or the fabrication of evidence in which an attorney has been implicated. Salway, 695 P.2d at 1306.
In this case, the record does not support any of the Mann family’s allegations, nor do such allegations, even if supported by the record, constitute fraud upon the court. Fraud between the parties, without more, does not rise to the level of fraud upon the court. Small, 825 P.2d at 1213. John Mann can point to no outside influence on the judicial proceedings in Mann I; the claims, even if true, would constitute fraud between the parties. Additionally, “forceful argument” and “artful pleading” do not rise to the egregious conduct contemplated by this rule, but more closely relate to the Lawyer Defendants’ exercise of their duty to zealously represent their client.
Because John Mann can demonstrate neither extrinsic fraud nor fraud upon the court, we hold that the District Court did not err in concluding that the third-party claims Mann asserted against the Bank Defendants and Lawyer Defendants did not constitute sufficient grounds for maintaining an independent equitable action for relief from the Mann I judgment under Rule 60(b), M.R.Civ.P.
Did the District Court err in granting summary judgment for the Bank on its foreclosure complaint?
The District Court granted the Bank’s summary judgment motion on its foreclosure complaint and issued findings of fact, conclusions of law and a decree of foreclosure. It concluded that the Bank had established a prima facie case of foreclosure and that all of the Mann Defendants’ defenses to foreclosure were barred under the doctrine of res judicata. Specifically, the court opined that the gravamen of the defenses was that the Bank committed some form of fraud in its lending relationship, and that those matters were raised or could have been raised in Mann I. The court also set forth additional legal doctrines supporting its decision.
Our standard in reviewing a grant of summary judgment is the same as that initially utilized by the trial court. McCracken v. City of Chinook (1990), 242 Mont. 21, 24, 788 P.2d 892, 894. Summary judgment is appropriate when the pleadings, depositions, and other documents on file demonstrate that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. With that standard in mind, we review the District Court’s decision.
The District Court’s grant of summary judgment turned on its conclusion that res judicata barred all of the Mann Defendants’ defenses. Having essentially removed the defenses from consideration, the District Court then concluded that no genuine issue of material fact remained and the Bank was entitled to judgment as a matter of law. Therefore, we initially review whether the District Court correctly concluded that res judicata barred the defenses asserted by the Mann Defendants; our review of legal conclusions is plenary. See Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 603.
The principle underlying the doctrine of res judicata is that a party is prohibited from relitigating a matter that the party has already had an opportunity to litigate. Whirry v. Swanson (1992), 254 Mont. 248, 250, 836 P.2d 1227,1228. The four criteria for res judicata are:
1) the parties or their privies must be the same;
2) the subject matter of the action must be the same;
3) the issues must be the same and relate to the same subject matter; and
4) the capacities of the persons must be the same in reference to the subject matter and to the issues.
Whirry, 836 P.2d at 1228. Furthermore, once there has been full opportunity to present an issue for judicial decision in a given proceeding, the determination of the court in that proceeding must be accorded finality as to all issues raised or which fairly could have been raised. Filler v. Richland County (1991), 247 Mont. 285, 291, 806 P.2d 537, 541.
In this case, the parties are the same in both actions; the Mann Defendants sued the Bank in Mann I, and the Bank’s foreclosure complaint named all Mann Defendants as defendants in the present action. The subject matter is also generally the same; both suits revolve around the banking relationship between the Bank and the Mann Defendants.
As in Whirry, the third element — whether the issues are the same — is the key element here. In order to determine that the issues are the same, the fundamental or essential question involved in the second case must have been raised and determined in the first case. Whirry, 836 P.2d at 1229, citing Baertsch v. County of Lewis and Clark (1986), 223 Mont. 206, 727 P.2d 504. Thus, scrutiny of the precise questions involved in Mann I and those involved in the present case is necessary.
In Mann I, the complaint against the Bank alleged tort claims, including breach of the covenant of good faith and fair dealing, negligent misrepresentation, and breach of fiduciary duty. As paraphrased by the District Court, the facts supporting the Mann Defendants’ tort claims in Mann I were:
1. The Bank’s decision to withdraw $25,000 of conditional operating credit in 1985.
2. The Bank’s discussions with Citizens First National Bank of Wolf Point regarding Mann Farms’ financial situation.
3. The Bank’s refusal to loan operating funds to Mann Farms during the spring of 1986. .
4. The SBA’s refusal to loan disaster relief funds unless certain conditions were met.
Here, the Bank’s complaint alleged its prima facie case of foreclosure. The Mann Family generally denied the foreclosure allegations in their answer and, in response to the Bank’s motion for summary judgment, set forth in detail a multiplicity of defenses to foreclosure. Mann Farms’ answer also included defenses. The majority of the Mann Defendants’ defenses to foreclosure sounded in contract; however, a few asserted defenses were tort-related. We address first whether res judicata bars the Mann Defendants’ contract-related defenses.
Although the events surrounding both suits occurred in the same time frame, the issues presented in the tort action are distinct from those inherent in the contract defenses raised to the foreclosure complaint. The issues in the first case were the Mann Defendants’ allegations of tortious conduct by the Bank over an extended period of time and their resulting entitlement to damages. The fundamental question raised and determined in Mann I was whether the Bank’s conduct in dealing with the Mann Defendants violated a standard of due care. The fundamental question here is whether the mortgage, security interests and notes are valid and enforceable contracts. We conclude that the issues involved in Mann I were different from those raised by the contract defenses to foreclosure in this case.
We find support for this conclusion in Bras v. First Bank & Trust Co. (Okla. 1985), 735 P.2d 329, a closely analogous case. In Bras, the bank foreclosed upon notes executed by the debtor, and the debtor raised the defense of illegality of the notes due to self-dealing by the bank. The bank was granted summary judgment on the notes. Bras, 735 P.2d at 330. The debtor then sued the bank in tort, alleging conspiracy to commit fraud based on circumstances surrounding the original loan. The Oklahoma Supreme Court concluded that his second suit was not barred by the first, stating:
The [initial] summary judgment ... necessarily determined that the petitioner was primarily liable on the note and that such note was not illegal because of any “self-dealing.” Unlike the former action, the present one contains allegations of conspiracy to commit fraud. We find no common elements between the fraud action, a tort claim involving misrepresentation, and the contract action in which illegal self-dealing was raised as a defense to the validity of the note.
Bras, 735 P.2d at 333. Although the Mann cases occurred in reverse order, the same is true here. The tort issues involved in Mann I and the contract issues raised by the Mann Defendants’ contract-related defenses to foreclosure are not the same; therefore, res judicata does not bar the defenses to foreclosure.
The Bank argues that although the validity of the notes was not raised and determined in the first case, that issue fairly should have been raised in Mann I. The Bank is correct that res judicata prohibits both claims that were raised and claims that should have been raised from being relitigated. Higham v. City of Red Lodge (1991), 247 Mont. 400, 403, 807 P.2d 195, 197. We disagree, however, that the Mann Defendants’ defenses contesting the validity of the notes should have been raised in Mann I.
Mann Farms filed for bankruptcy on May 15, 1987, and the bankruptcy proceedings were eventually dismissed and closed in May of 1991. The Maim Defendants commenced their tort action in Mann I in March of 1988, and this Court affirmed the District Court’s grant of summary judgment on November 8,1990. The entirety of the tort action took place during the period Mann Farms was in bankruptcy. During the pendency of Mann Farms’ bankruptcy proceeding, and pursuant to its plan of reorganization, the debtor could not challenge the validity of the notes and security interests. The plan also specifically allowed Mann Farms to proceed with the tort claims in state court. The Bankruptcy Court, the United States District Court and the Ninth Circuit Court of Appeals all approved Mann Farms’ amended plan of reorganization. See In re Mann Farms, Inc., 917 F.2d at 1215.
The Ninth Circuit opinion also makes clear that Mann Farms’ agreement not to contest the validity of the notes was contingent on the implementation of the bankruptcy plan of reorganization, by noting “the debtor’s agreement not to relitigate the matters concluded by the approved plan ....” In re Mann Farms, Inc., 917 F.2d at 1213 (emphasis added). Here, however, the bankruptcy action ultimately was dismissed, and the reorganization plan was not implemented; thus, issues surrounding the validity of the debt to the Bank were never concluded pursuant to the approved plan. Under such circumstances, Mann Farms’ agreement not to “relitigate” those matters was extinguished when the bankruptcy action was dismissed.
The bankruptcy action was formally closed on May 28,1991, some months after our decision in Mann I. Only then could the Bank foreclose on the notes, and only then could Mann Farms assert any claims it had regarding the validity of the loan documents. Had Mann Farms’ bankruptcy been pursued to a final conclusion and the debts discharged or restructured, Mann Farms could not have contested the validity of those documents; nor would such a challenge have been necessary.
We conclude that the District Court’s determination that the Mann Defendants could have raised their contract-related defenses to the notes in the earlier action is incorrect. Therefore, we hold that the District Court erred in granting summary judgment to the Bank on the basis that res judicata barred the Mann Defendants’ contract-related defenses.
For similar reasons, the District Court did not err in concluding that the Mann Defendants’ tort-related defenses were precluded by res judicata. For example, the Mann Family raised questions regarding whether the Bank owed the Manns a “general duty of care” and whether the Bank was “negligent” in its dealings with the Manns in their response to the Bank’s motion for summary judgment. Mann Farms’ answer included the affirmative defense of “contributory negligence.” Pursuant to our analysis and discussion above, we conclude that tort-based allegations or defenses raised by the Mann Defendants which do not directly concern the contractual defenses to the notes, mortgage, and security interests at issue are barred by res judicata because they could have been raised in the earlier tort action.
Having determined that the Mann Defendants’ contract-related defenses are not barred by res judicata the issue is whether genuine issues of disputed fact remain and whether the moving party is entitled to judgment as a matter of law on those defenses. To prevail on summary judgment, the initial burden on the Bank, as the moving party, is to establish that the evidence raises no genuine issue of material fact. Mayer Bros. v. Daniel Richard Jewelers (1986), 223 Mont. 397, 399, 726 P.2d 815, 816. As noted above, the District Court found that the Maim Defendants had executed the promissory notes, security agreements and mortgage at issue and that the Mann Defendants were in default on those instruments. It concluded that the Bank had established a prima facie case for foreclosure and, therefore, had met its initial burden on summary judgment. We agree.
When the movant has met this initial burden, the burden shifts to the party opposing summary judgment to show by present facts of a substantial nature that a material fact issue does exist. Mayer, 726 P.2d at 816. The party opposing summary judgment may not rest upon the mere allegations of the pleadings, but has an affirmative duty to respond by affidavits or sworn testimony with specific facts that show a genuine issue of fact remains for trial. See Mayer, 726 P.2d at 816-7. Conclusory or speculative statements or allegations in pleadings, arguments in briefs, and arguments made by counsel do not constitute sufficient factual evidence to carry the non-moving party’s burden. See Sprunk v. First Bank System (1992), 252 Mont. 463, 466-7, 830 P.2d 103, 104-5; Mayer, 726 P.2d at 817; Eitel v. Ryan (1988), 231 Mont. 174, 178, 751 P.2d 682, 684.
Because of its conclusion that res judicata barred the Mann Defendants’ defenses to foreclosure, the District Court did not reach the question of whether the Mann Defendants had met their burden in opposing summary judgment on the matter of foreclosure. We have determined that the District Court erred in concluding that res judicata barred the Mann Defendants’ contract-related defenses. Thus, the question of whether the Mann Defendants have presented sufficient factual evidence to demonstrate a genuine issue of fact on the contract-related defenses remains to be determined by the District Court on the basis of the record before it.
Can the District Court’s grant of summary judgment on foreclosure be upheld as to Mann Farms under the doctrines of judicial estoppel, equitable estoppel or quasi-estoppel?
As an alternative basis for summary judgment, the District Court concluded that judicial estoppel, equitable estoppel and quasi-estoppel barred Mann Farms from disputing the validity of the debt instruments in the foreclosure action. The District Court did not apply the estoppel doctrines to the Mann Family. Although the parties do not argue these doctrines on appeal, this Court will examine the record to determine whether separate support exists for the District Court’s result. See Wolfe v. Webb (1992), 251 Mont. 217, 234, 824 P.2d 240, 250. We conclude that the aforementioned doctrines do not bar Mann Farms from contesting the documents in this case.
Judicial estoppel binds a party to his or her judicial declarations, and precludes a party from contradicting those declarations in a subsequent action or proceeding. DeMers v. Rancor, Inc. (1991), 249 Mont. 176, 180, 814 P.2d 999, 1001. The District Court concluded that the following clause in Mann Farms’ reorganization plan for bankruptcy triggered the doctrine:
The Debtor will not contest the validity of notes, mortgages, or security interests of the Bank in state court or by adversary proceedings in this court.
The court concluded that because Mann Farms had asserted this proposition in bankruptcy proceedings, it could not challenge the documents in defense of foreclosure.
The elements of judicial estoppel are:
1) the party being estopped must have knowledge of the facts at the time the original position is taken;
2) the party must have succeeded in maintaining the original position;
3) the position presently taken must be actually inconsistent with the original position; and
4) the original position must have misled the adverse party so that allowing the estopped party to change its position would injuriously affect the adverse party.
DeMers, 814 P.2d at 1001-2. Applying those factors to the present case, it is clear that neither element two nor element four is satisfied here.
Mann Farms’ bankruptcy proceeding was dismissed in May of 1991. Mann Farms did not “succeed” in its bankruptcy proceeding; its debts were not discharged nor its reorganization plan fully implemented. We stated in DeMers that acquiring a judgment in its favor is not always necessary to satisfy this element, but the party must have been at least successful in arguing its original position against the party asserting the estoppel. DeMers, 814 P.2d at 1002. The record contains no evidence that would allow us to conclude that Mann Farms successfully maintained the reorganization plan and the pertinent clause against the Bank.
Furthermore, the record is devoid of evidence that the Bank was misled by Mann Farms’ original position or that allowing Mann Farms to change its position adversely affects the Bank. On the contrary, under the reorganization plan, the Bank was to receive a $263,467.03 “cram down” debt in periodic payments. After foreclosure, the Bank had at its disposal a foreclosure sale and the possibility of a deficiency judgment against the individual Mann family members — for the full amount of its debt. We conclude that the clause in Mann Farms’ reorganization plan, a plan that was ultimately dismissed, does not trigger judicial estoppel and Mann Farms is not barred from challenging the validity of the security agreements in foreclosure proceedings.
For similar reasons, the doctrines of equitable estoppel and quasi-estoppel are inapplicable to the present case. Equitable estoppel requires reliance by the party asserting the estoppel on an act or representation, and this reliance must induce the party asserting estoppel to change its position for the worse. Wassberg v. Anaconda Copper Co. (1985), 215 Mont. 309, 316, 697 P.2d 909, 914. Although this Court has not defined “quasi-estoppel,” the phrase is used interchangeably with equitable estoppel. See 28 Am. Jur.2d Estoppel and Waiver § 29 (1966). As discussed above, the record contains no evidence that would support the application of the estoppel doctrines.
Did the District Court err in refusing to dissolve an injunction and in finding John Mann in contempt for failing to abide by the injunction?
On September 19, 1991, the Bank applied for a preliminary injunction under § 27-19-201, MCA, against the Mann Defendants. On October 3, 1991, following the evidentiary show cause hearing, the District Court issued the requested injunction. The Mann Defendants refused to comply with the terms, and the District Court issued an order requiring the Mann Defendants to appear and show cause why they should not be held in contempt for failing to comply with the October injunction. At the show cause hearing in December, Mann Farms orally moved to dissolve the injunction; the District Court denied the motion and found the Mann Defendants in contempt.
Mann Farms argues that the District Court erred in denying its motion to dissolve the injunction; in essence, this argument goes to the propriety of the District Court’s decision to issue the injunction itself. Mann Farms contends that the District Court issued the injunction without any legal authority, and that the injunction improperly resolved a contested issue regarding alleged lapsed security interests. The Bank, on the other hand, argues that the injunction was properly issued pursuant to § 27-19-201, MCA.
The injunction in question contained six integral provisions. Mann Farms challenges only the following provision of the injunction:
It is further ordered that the Mann Defendants complete the following affirmative acts:
To execute the appropriate security documents, including security agreements and Uniform Commercial Code Financing Statements, which documents are necessary to maintain the Bank’s security and priority positions in its collateral pending appropriate resolution of the above captioned litigation, and in order to bring the Bank’s security documents into conformity with the Food Security Act of 1985.
Section 27-19-201, MCA, lists the specific circumstances under which a District Court may issue a preliminary injunction. The District Court did not include supporting findings of fact and conclusions of law when it issued this injunction in October of 1991. We have specifically required that findings of fact and conclusions of law must accompany preliminary injunctions. Ensley v. Murphy (1983), 202 Mont. 406, 408, 658 P.2d 418, 419. Rule 52(a), M.R.Civ.P., expressly provides that:
[I]n granting or refusing interlocutory injunctions the court shall similarly set forth the findings of fact and conclusions of law which constitute the grounds of its action.
An important purpose of findings of fact and conclusions of law is to aid the appellate court in its review of the decision. See Continental Realty, Inc. v. Gerry (1991), 251 Mont. 150,153, 822 P.2d 1083,1085.
As in Ensley, we have no basis for determining whether the disputed portion of the October injunction was properly included. We cannot ascertain the facts on which the District Court relied or the legal basis on which it issued the injunction or the order denying Mann Farms’ motion to dissolve it. Consequently, we cannot properly determine whether the District Court erred. Therefore, we vacate the preliminary injunction and remand for reconsideration and entry of findings and conclusions. See Ensley, 658 P.2d at 419.
Finally, John Mann also filed a notice of appeal of the order finding him in contempt for failing to abide by the injunction. Contempt orders generally are not appealable in Montana. Section 3-1-523, MCA, states in relevant part:
Judgment and orders in contempt cases final. The judgment and orders of the court or judge made in cases of contempt are final and conclusive. There is no appeal, but the action of a district court or judge can be reviewed on a writ of certiorari by the supreme court....
John Mann has not filed the appropriate writ as directed by the statute. This issue, therefore, is not properly before this Court.
As a final matter we note that, by order dated October 14, 1992, this Court denied a motion by the Bank to strike John Mann’s briefs and for sanctions; we stated therein that we would address the issue of sanctions against John Mann in our decision on appeal. In light of our determinations herein, we conclude that further consideration of the issue of sanctions is inappropriate at this time.
Affirmed in part, reversed in part and remanded for further proceedings consistent with this opinion.
JUSTICES HARRISON, HUNT, McDONOUGH and TRIEWEILER concur. | [
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JUSTICE WEBER
delivered the Opinion of the Court.
This is an appeal from the Twelfth Judicial District Court, Hill County, continuing a 1974 award of $250 per month for permanent maintenance to the ex-wife. We affirm.
We consider the following issues on appeal:
1. Did the District Court err in determining that Mr. Burris was responsible to pay $250 per month maintenance to his ex-wife, from whom he was divorced in 1974?
2. Did the District Court properly award part of Mrs. Burris’s legal fees?
Martha and Billy Burris were first married in October of 1955. This marriage was dissolved in 1964. The couple remarried in 1965 and subsequently divorced in 1974. In the 1974 divorce decree, the court ordered Mr. Burris to pay a $250 per month sum “as and for permanent alimony.” Throughout both marriages, Mr. Burris held a position as an Immigration Officer of the United States. Mrs. Burris did not work outside the home but took care of the couple’s three sons. Today Mr. Burris is retired. Mrs. Burris is now unemployed, although at one time she held a full-time job for five years at Francis Willard Home for Girls in Tulsa, Oklahoma, as a group care worker. Following an extended leave of absence in order to achieve diabetes stabilization, she never returned to work.
Mr. Burris attempted to modify his maintenance obligation in May of 1975. The District Court denied modification and the $250 award was affirmed by this Court in Burris v. Burris (1976), 171 Mont. 227, 557 P.2d 287. Mr. Burris petitioned again in 1983 for modification of his maintenance payment. The District Court denied modification and he did not appeal.
Mr. Burris retired in December of 1989. His last full check was in January of 1990. He did not receive any of his retirement pay until July of 1990. Because of this, he was -unable to pay the $250 maintenance to Mrs. Burris until that time. He subsequently sent her a check for all delinquent months due to this delay.
Meanwhile, in May of 1990, Mrs. Burris filed a motion asking for certain relief because Mr. Burris had not paid his maintenance payments for February, March, April and May. Thereafter, Mr. Burris petitioned the court for elimination of the maintenance requirement. Subsequently, Mrs. Burris filed a petition for modification of maintenance, seeking $500 per month.
The District Court denied both parties’ petitions, maintaining $250 monthly award and awarding Mrs. Burris $1,000 of her attorney’s fees and costs. Mr. Burris appeals.
I
Did the District Court err in determining that Mr. Burris was responsible to pay $250 per month maintenance to his ex-wife from whom he was divorced in 1974?
Mr. Burris claims that the District Court erred by determining that the word “permanent” defining maintenance payments to his ex-wife cannot be modified. According to Mr. Burris, his circumstances have substantially changed due to his retirement and it is unconscionable that he continue to pay his ex-wife the maintenance payments. Mr. Burris contends that maintenance awards are only given ex-spouses until such time as the ex-spouse can become self-sufficient. Mr. Burris argues that his ex-wife received college training and had a self-sustaining position but through her own choices, gave up that position.
According to Mrs. Burris, it was her ex-husband’s burden to establish that his circumstances were substantially changed and that his continuance to pay the agreed-upon maintenance was unconscionable. The District Court specifically determined that Mr. Burris had not met his burden.
Mr. Burris’s contention that the District Court determined as a matter of law that the 1974 award of “permanent” alimony could not be modified is an incorrect assessment of the District Court’s findings of fact and conclusions of law. In the District Court’s conclusions of law, the court obviously employed the reasoning of § 40-4-208(2)(b)(i), MCA:
(1) Except as otherwise provided in 40-4-201(6), a decree may be modified by a court as to maintenance or support only as to installments accruing subsequent to actual notice to the parties of the motion for modification.
(2)(b) whenever the decree proposed for modification contains provisions relating to maintenance or support, modifications under subsection (1) may only be made:
(i) upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable. (Emphasis added.)
The court’s words were:
Defendant has not shown a substantial change in circumstances which make the terms unconscionable as to Defendant and his petition to reduce maintenance ought to be denied.
It is clear that the court considered the evidence presented to it in light of the modification provision. It did not, as Mr. Burris contends, determine that it could not modify the 1974 decree. The court made a reasoned decision that modification was inappropriate.
A District Court’s conclusion of law is reviewed as to whether it is correct. Steer Inc. v. Dept, of Revenue (1990), 245 Mont. 470, 803 P.2d 601. We conclude that the District Court used the appropriate legal standard in reviewing Mr. Burris’s evidentiary burden.
The District Court supported its conclusions of law with a lengthy recitation of facts concerning the Burrises’ health, financial condition and need. The standard of review concerning these findings of fact is whether the District Court’s findings are clearly erroneous. Marriage ofEschenbacher (1992), 253 Mont. 139,831 P.2d 1353. Such a determination involves consideration of whether the facts are supported by substantial evidence, next whether the court correctly understood the evidence, and finally, whether, the first two considerations having been met, this Court still believes a mistake has been made. Interstate Prod. Credit Assn. v. DeSaye (1991), 250 Mont. 320, 820 P.2d 1285.
The District Court stated that Mr. Burris receives only $1400 retirement per month because he withdrew $17,000 from his retirement. Further, Mr. Burris purchased a new truck while delinquent in his alimony. Part of the strain on Mr. Burris’s monthly budget, according to the court, comes from monthly truck payments of $350.29 and monthly property settlement to his second wife for $468.29. Both of these monthly obligations ended last year. Thus, Mr. Burris is not now required to pay these out of the $1,400 he receives each month.
The court also states that Mr. Burris owns real property in Montana valued at $100,000 as well as property in Oklahoma valued at $35,000. Mr. Burris received $7,800 in 1989 as a CRP payment on the Montana land and received $469 monthly from trailer rentals in that same year. Also, Mr. Burris has $4,500 in a credit union, approximately $15,000 in stocks, an IRA valued at $5,158.78 and an interest in Realty Income Corp. worth $3,352.00. This brings Mr. Burris’s worth to in excess of $120,000, not including his retirement drafts.
Mrs. Burris, on the other hand, currently has no employment, poor health, $13,000 in savings, $17,000 owed by the Burnses’ three sons, and a 1975 Chevrolet. The court determined that while Mr. Burris’s income has diminished it has not disappeared, so as to make the $250 per month unconscionable. However, the court also acknowledged that Mrs. Burris did not do what was necessary to preserve the $11,000 per year job she had prior to being diagnosed as a diabetic.
First, we conclude that there is substantial credible evidence in the record to clearly substantiate the court’s assessment of the Burrises’ life situation. The trial transcript bears out the court’s breakdown of financial worth except for $5,000 in an IRA account which Mr. Burris claims he has now depleted paying his bills. Therefore, we find substantial evidence to support the court’s findings.
Next we consider whether the court misapprehended the evidence it had before it. Mr. Burris claims that he never imagined that the $250 per month payment would be permanent but, if it is, that such an arrangement cannot be used by courts.
Mr. Burris has known from the original 1974 order that the $250 award to his ex-wife was “permanent.” In March of 1974, Mr. Burris filed a motion for new trial and an affidavit by his attorney objecting to the “permanent alimony.” Awards of maintenance are within the broad discretion of the District Court. In re Marriage of Tahija (1992), 253 Mont. 505, 833 P.2d 1095. We do not disturb a District Court’s award of maintenance provided that the award is based upon substantial evidence and exhibits no clear abuse of discretion. In re Marriage of Cole (1988), 234 Mont. 352, 763 P.2d 39. The court does not abuse its discretion in awarding permanent or lifetime maintenance if the facts of the case necessitate such an award. In re Marriage of Gauthier (1982), 201 Mont. 320, 654 P.2d 517. See also In re Marriage ofDeichl (1989), 239 Mont. 425, 781 P.2d 254. In both of these cases, we affirmed grants of lifetime maintenance.
Such discretion to award permanent or lifetime maintenance is derived directly from the legislature:
(2) The maintenance order shall be in such amounts and for such periods of time as the court deems just. ... (Emphasis added.)
Section 40-4-203(2), MCA. Given the foregoing law, permanent or lifetime maintenance can be awarded by a court. The facts of this particular case show that Mr. Burris understood the permanent nature of the maintenance, and although he has protested it on various occasions, both the District Court and this Court have determined it to be appropriate because of Mr. Burris’s superior financial situation.
In terms of the evidence presented by Mr. Burris regarding his change of circumstances, it is true that he receives less money now that he is retired. Mr. Burris claims that pursuant to § 40-4-203(2)(f), MCA, he should not have to pay a maintenance award because he cannot meet his own bills. In opposition to Mr. Burris’s condition, Mrs. Burris currently receives nothing. She is in bad health and some concern exists as to her employability because of her health and age. While she attended college she is essentially in the same position as when maintenance was awarded to her.
In considering whether to modify her maintenance, the District Court must consider statutory language. In re Marriage of Cooper (1985), 216 Mont. 34,699 P.2d 1044. It is clear that the District Court here considered appropriate elements found in § 40-4-208, MCA, because it determined that the changes in Mr. Burris’s financial condition although decreasing his income, did not prevent him from meeting the maintenance obligation of the 1974 order. In reaching that determination, the court set out in great detail the financial facts provided by each party and upon which it relied. Those facts clearly show that the award of $250 per month to Mrs. Burris is not unconscionable because Mr. Burris continues to be in a superior financial position despite his retirement. We conclude that the District Court did not misapprehend the evidence with which it was provided.
Finally, after reviewing the entire record we do not feel that the court has made a mistake in continuing the $250 per month maintenance award. We conclude, therefore, that the District Court was not clearly erroneous.
We hold the District Court did not err in determining that Mr. Burris was responsible to pay $250 maintenance to his ex-wife from whom he was divorced in 1974.
II
Did the District Court properly award part of Mrs. Burris’s legal fees?
The District Court awarded Mrs. Burris $1,000 of her $2,966.09 legal fees. The court directed attention to § 40-4-110, MCA, and stated that after considering the financial resources of both parties Mr. Burris is able to pay $1,000 toward Mrs. Burris’s fees because of his ‘better financial position.”
Mr. Burris argues that he should not have to pay his ex-wife’s legal fees because any inability she has in regards to payment is her own fault in losing or not pursuing employment. Mrs. Burris argues that the District Court appropriately assessed the award of attorney’s fees.
The appropriate statute declares:
The court ... after considering the financial resources of both parties, may order a party to pay a reasonable amount for the cost to the other party of maintaining or defending any proceeding under chapter 1 and 4 of this title and for attorney’s fees ...
Section 40-4-110, MCA. We will review an award of attorney fees in a dissolution action as to whether the court abused its discretion. Tahija, 253 Mont. at 511, 833 P.2d at 1099.
The District Court considered carefully the respective financial situations of the parties and determined Mr. Burris could reasonably afford to help pay Mrs. Burris’s attorney’s fees at a rate of $100 per month. We conclude no abuse of discretion occurred.
We hold the District Court properly awarded part of Mrs. Burris’s attorneys fees.
Affirmed.
JUSTICES HARRISON, HUNT, TRIEWEILER and GRAY concur. | [
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PER CURIAM.-
It is ordered that the appeal in the above-entitled cause be, and the same is hereby, dismissed, in accordance with motion of appellant on file herein. | [
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MR. JUSTICE SMITH
delivered the opinion of tbe court.
On the fourteenth day of July, 1910, the district court of Yellowstone county, Hon. Sydney Sanner, judge presiding, on petition of the state of Montana, a creditor in the sum of $25,000, appointed Samuel G. Reynolds as receiver of the First Trust & Savings Bank of Billings, Montana, an insolvent corporation theretofore organized under the laws of this state. The Gazette Printing Company is a domestic corporation, having a capital stock of 300 shares of a par value of $100 each, located at Billings, owning a plant and Associated Press franchise, and engaged in publishing two daily newspapers, the “Billings Daily Gazette” and the “Billings Evening Journal.” Among other assets of the First Trust & Savings Bank of Billings, which came to the hands of the receiver, were 297 shares of the capital stock of the Gazette Printing Company, which stock was the absolute property of the bank, and certain claims against the printing company. It appears to be, admitted that on November 29, 1910, these claims, which were evidenced by promissory notes, amounted, with accrued interest, to the sum of $13,035.38. The stock in the printing company was carried arbitrarily on the books of the bank at a valuation of $6,001. The total of these two amounts is $19,036.38, the significance of which sum will hereafter become apparent. P. B. Moss was the president of both corporations. He testified: “I paid $40,000 for the stock, and charged it down from the profit of the company and otherwise down to $6,000. That is how the value of $6,000 got into the stock.” It will thus be seen that the amount at which the stock was carried on the books of the bank was no criterion of its real value. On or about the thirty-first day of October, 1910, the receiver, at the request of Mr. Moss, procured from Hon. Sydney Fox, judge of the thirteenth judicial district, an order authorizing him to sell the notes and capital stock of the printing company to unnamed persons, for the amount due upon said notes, and $6,001 additional for the 297 shares of capital stock. This order was never filed in court. There was some controversy at the hearing subsequently had as to what conversations took place between Reynolds and Moss after the order was procured; but, at any rate, it is clear that Mr. Moss was experiencing some difficulty in getting the money. He himself testified that on November 15, 1910, he offered to pay enough money to take up the stock, and was told by Reynolds that Judge Fox had instructed him not to surrender the stock until the notes were paid, whereupon they agreed that the matter might rest until Moss could get all the money. On November 21, 1910, the notes and stock not having been sold to Moss, the receiver presented to Judge Fox a petition wherein he set forth that the former order of the judge had not been complied with; “that such proposition has not been fulfilled, and now your petitioner has a proposition offered to pay in full liquidation and payment of the obligations of the Gazette Printing Company to the defendant for the capital stock now held by the bank and carried on its books at the sum of $6,001 the sum of $15,000; that your petitioner now desires to submit this proposition to the court, and, if in the judgment of the court or judge thereof such sale should be made, your petitioner asks for an order to sell,” etc. The court thereupon ordered the sale to be made in accordance with the terms set forth in the petition last mentioned. The sale was accordingly made to Odell W. McConnell, the appellant; and the notes and certificates of stock were transferred to him. On December 3, 1910, a petition was filed in the district court of Yellowstone county in behalf of the Gazette Printing Company, verified by P. B. Moss, and entitled, “In the Matter of the Receivership of the First Trust & Savings Bank of Billings, Montana.” The petition recites the facts substantially as hereinbefore set forth, and alleges that the second order of sale was made notwithstanding the prior order, “and notwithstanding the said P. B. Moss was ready, able, and willing to take up said indebtedness and receive said notes and shares of stock, and without giving any notice or warning whatever to said Moss or the Gazette Printing Company. ” It is therein further alleged: ‘ ‘ That on the twenty-fourth day of November, 1910, the Gazette Printing Company, by P. B. Moss, its president, and also by and through O. F. Goddard, Esq., its attorney, made demand upon the receiver that he call in said notes and certificates of stock, and that the printing company was ready to pay over the full amount of the indebtedness held by said trust against it, but the receiver refused to do so; that on the twenty-ninth day of November, 1910, the Gazette Printing Company, by P. B. Moss, its president, made a formal tender to the receiver of $19,036.38, being the amount due, principal and interest, on said promissory notes, and also including $6,001, for which the said receiver had the said 297 shares of stock, which amount the receiver ‘took into his possession,’ but has refused to deliver the notes and shares of stock; that, unless the last-mentioned order [the McConnell order] is rescinded, the creditors of said trust will be damaged in the sum of $4,036.38, and the Gazette Printing Company will be irreparably injured and defrauded of its property, and great injury will be done.” The prayer was that the court set aside the order by virtue of which the appellant purchased the notes and stock; “that the first-mentioned order be revived and the receiver required to accept the $19,036.38, and to surrender to the Gazette Printing Company the promissory notes, as well as the 297 shares of its stock.” After answers filed by Reynolds, as receiver, and Mr. McConnell, and a reply to the receiver’s answer, filed by P. B. Moss, who styled himself “the petitioner herein,” a hearing was had before Judge Sanner. At this hearing Mr. Moss testified that in the latter part of August, 1910, the Gazette Printing Company was indebted to the First National Bank of Billings in the sum of about $12,000; that Reynolds did not inform him of the second order of- sale until after the notes and stock were sold to McConnell; that, if he had done so, he, Moss, could have gotten the money for him, but he did not suppose there was any hurry about it; that the inventory value of the physical property of the Gazette Printing Company is $30,000, the goodwill and franchise is worth from $30,000 to $40,000, the profits “last year” were around $8,000; “that would be a profit on $75,000 or $80,000 at ten per cent net profits, including the interest paid and the net profit and the addition to the plant, figures up about $8,000. * * * Q. What do you say as to $15,000 or $19,000 being an .inadequate price or consideration for the Gazette Printing Company’s business and plant? A. The price was entirely inadequate as to the value of the property, but the estimate that the state examiner placed upon the assets of the trust company put down the stock as worthless, and I figured from conversations that I had with Mr. Reynolds, and some time previous, that the plant would be sold for very much less than its value. I got that part of the tender to meet and liquidate these notes held by the receiver from Mr. Snidow. I did not undertake to tender any part of this upon the part of the Gazette Printing Company to obtain this stock of the Gazette Printing Company. My wife was paying $6,001 for the stock. The First National Bank has since been paid in full. One share of the Gazette Printing Company’s stock was issued to me, one to Mr. Hays, one to Mr. Becker, and 297 to the First Trust & Savings Bank. The paper was bought with the money of the First Trust & Savings Bank, except the three shares. There has been no election of officers or directors since 1907. The vacancy caused by the resignation of Mr. Becker has not been filled yet. The amount of the note which Snidow got of the Gazette Printing Company was $25,000. I don’t know why it was that in my reply I styled myself as the petitioner, and not the Gazette Printing Company at all. I think this paper of the Gazette Printing Company is worth around $75,000. The company owes Mr. Snidow $25,000 and Mr. Jeni-zon $2,000. Out of the $25,000 paid by Snidow the trust company and the First National Bank were paid. I paid the First National Bank between $12,000 and $13,000.”
C. E. Wood, manager of the Gazette Printing Company, produced as a witness by the petitioners, testified: “During the last year I think it [the Gazette Printing Company] has paid a profit of probably ten per cent. I think it made a profit of ten per cent on the gross $80,000 or $90,000. I think that would be safe. The property, the franchise, and. the goodwill of the Gazette Printing Company possibly is worth somewhere between $60,000 and $70,000 — might be more than that.”
Judge Sanner filed a “memorandum and order,” wherein he recites, referring to the hearing had before him: “Nothing appeared to especially engage the concern of the court in behalf of either Moss, or Mrs. Moss, or of the printing company. "Whether or not Moss, or Mrs. Moss, or the printing company can be said to have been injured by this transaction, it is certain that unless set aside, the creditors of the trust will have lost some $4,000 by it.” He then very properly exonerated Mr. McConnell, and the receiver, Mr. Reynolds, from any suspicion of bad faith in the transaction. He did find, in effect, however, that the court was not fully advised as to all of the facts and circumstances surrounding the transaction at the time of signing the second order.
There is a conflict of testimony on this point, and we are bound by the finding of the trial judge. (Slater Brick Co. v. Shackleton, 30 Mont. 390, 76 Pac. 805.) There is not anything in the record to indicate that the receiver or anyone in his behalf knowingly or willfully deceived or withheld information from the court; but even so, it is entirely possible that the second order of sale was inadvertently and improvidently made. The question is: Did the court have power subsequently to set it aside? Judge Sanner, being of opinion that he had such power, entered the following order, from which an appeal has been perfected by Odell W. McConnell, viz,: “It is therefore ordered that the order heretofore made and entered herein on November 21, 1910, authorizing the sale of said property for $15,000, and all the proceedings had thereunder be, and the same are, hereby annulled; that within thirty days of the filing hereof the receiver herein return to Odell McConnell the sum of $15,000 heretofore paid under said order for said property by said McConnell, and that said McConnell redeliver said property to the receiver herein, making-such appropriate indorsements or conveyance as may be necessary to pass title to the same; that the receiver cancel and deliver to the Gazette Printing Company the said promissory notes and transfer to Mattie W. Moss the said shares of capital stock, in consideration of the sum of $19,036.38, now held by him under the Gazette Printing Company’s tender of November 29, 1910; that each party to this proceeding pay his own costs.”
1. The first contention with which we have to deal is that of the respondents. They urge, through their counsel, that this court has no jurisdiction to hear the appeal because no notice of it was ever served on either the state or the First Trust & Savings Bank. It is enough to sa.y in answer to this contention that neither of the parties mentioned was made a party to these proceedings by the respondents themselves. They entitled their petition, “In the Matter of the Receivership,” etc., and obtained an order to show cause why their prayer should not be granted, directed only to S. G. Reynolds, the receiver, and Odell W. McConnell, the purchaser at the sale. These parties came into court as directed, filed their answers, to which the petitioners replied, and the issues so made up were fully tried. After the final order of the court was entered, Mr. McConnell, the party feeling himself aggrieved thereby, gave notice of appeal to the only other persons who were parties to the proceedings, to wit, P. B. Moss, Mattie W. Moss, the Gazette Printing Company, and S. G. Reynolds, the receiver of the bank. The disposition we shall make of the case will fully protect the First Trust & Savings Bank and all of its creditors, including the state of Montana.
2. For the appellant it is contended that the sale to him was complete, that his rights thereunder had vested, and the court had no power to set it aside. In support of this contention he cites the cases of Files v. Brown, 124 Fed. 133, 59 C. C. A. 403; Koontz v. Northern Bank, 16 Wall. 196, 21 L. Ed. 465; Kimple v. Conway, 75 Cal. 413, 17 Pac. 546; White v. Rand (In re Denison), 114 N. Y. 621, 21 N. E. 97; Morrison v. Burnette, 154 Fed. 617, 83 C. C. A. 391; Virginia F. & M. Ins. Co. v. Cottrell, 85 Va. 857, 17 Am, St. Rep. 108, 9 S. E. 132; In re Perryman, 7 Ind, Ter. 472, 104 S. W. 804; also, High on Receivers, 4th ed., p. 782. The principal case is Files v. Brown. In that action the receiver of the First National Bank of Little Rock, Arkansas, filed his petition in the circuit court praying for" an order directing him to accept 'a bid of $25 made by Files, for a judgment of $9,230.90 against one Kelso, which was one of the assets of the bank, and authorizing him to make the sale and assign the judgment to Files. The court ordered the receiver to accept the bid and sell and assign the judgment, and the receiver complied with the order. Afterward the latter petitioned the court to rescind the sale, on the ground that he had since learned that the debt evidenced by the judgment was secured by a pledge of certain collateral notes. He set forth that he was unable to state the exact value of the notes, but that he was led to believe that about $3,200 was to be distributed in part payment thereof. He also alleged that at the time of the sale of the judgment Files knew of the existence of the collateral notes and of their probable value. The circuit court of appeals said: “The order to the receiver to sell and convey the property to a purchaser named, for a price fixed in the order, is itself both an acceptance of the bid and a confirmation of the sale so that, when the order has been executed, the court is as firmly bound in law and in morals as any private citizen by his executed sale.” The court proceeded, however, to inquire into the questions of inadequacy of consideration and bad faith on the part of Files, and determined both questions in his favor.
In the case of Koontz v. Northern Bank, supra, the sale had been confirmed by the court after a master had examined the report of the receiver thereon and had recommended its confirmation.
The supreme court of California in Kimple v. Conway, supra, held that there was no law in that state requiring confirmation of a sale of land by a sheriff under a decree for the sale of community property.
In White v. Rand, supra, the court of appeals of New York held that defendant’s offer to purchase a judgment from a re cver, which offer the court had authorized the receiver to accept, constituted a judicial sale which could be enforced on motion.
In Morrison v. Burnette, supra, the United States circuit court of appeals held that on confirmation of a judicial sale the rights of the purchaser became vested. There was “no fraud, no mistake, no surprise, no accident, no equitable g’round for setting it aside,” no inadequacy of price; therefore, it should not have been rescinded on motion of an unsuccessful bidder. To the same general effect is the decision of the court in Virginia F. & M. Ins. Co. v. Cottrell, supra.
The court of appeals of Indian Territory, in Re Perryman, supra, held that an order confirming a sale of an oil and gas lease was a final order which the court had no power to set aside, even during the term at which it was made, for inadequacy of price or on other grounds, other than ones for which a court of equity might avoid a judicial sale..
Not any of these decisions, however, reaches the point involved in this case. The question here is: Have courts of equity in receivership proceedings the power to set aside orders of sale which have been inadvertently and improvidently made? We fully agree with the learned trial judge that the court was not concerned with any supposed rights of P. B. Moss, or Mrs. Moss, or the Gazette Printing Company, in the premises. But we are of opinion that in the interests of the trust inquiry should have been made concerning the identity of the unnamed bidder who had offered $19,036.38 for the property and the probability of his being able to comply with the terms of his offer. If appellant’s position is correct, on the authority of White v. Rand, supra, this sale could probably have been enforced. If a court has by mistake or inadvertently, or by improvidence, made an order which, but for such mistake, inadvertence, or improvidence would not have been made, it matters not by what agency the court was induced to act. Judge Fox himself testified at the hearing: “If I had thought or had believed that Mr. Moss or the Gazette Printing Company, or anyone else, would have taken up the indebtedness of that company and taken up the stock for $19,000,1 would not have signed this order at that time.” While the judge had power to make the second order without notice, we cannot doubt that had his attention been directed to the fact that there was any possibility of disposing of the property for more than $15,000, he would not have made it. There is also evidence to warrant the lower court’s conclusion that the idea was conveyed to the judge from some source that, if the payment of the notes held by the First National Bank was delayed, the property of the printing company might be saerified at sheriff’s sale.-
In the case of Weeks v. Weeks, 106 N. Y. 626, 13 N. E. 96, the court said: “The general power of a court to modify or vacate its judgments or orders for fraud or irregularity or where it has acted inadvertently, or improvidently, is well settled. It is true the law protects the title of a third person, being a bona fide purchaser at a sale on an execution under a judgment voidable, but not void, although the judgment is subsequently reversed for error. This principle does not, we think, preclude the court from modifying or vacating a summary order made improvidently in the course of an action, although the rights of third persons may be affected thereby.” In this ease the trial court had authorized the receiver to make a lease for three years. His trust was terminated before the expiration of the lease. The court, therefore, modified the order by reducing the term of the lease to one year. The court of appeals affirmed this order, and, in addition thereto, directed the receiver to indemnify the lessees out of the funds in his hands for any damages they had sustained, saying: “Nothing less will satisfy the claims of justice.”
In Hale v. Clauson, 60 N. Y. 339, the court said: “The court has power to set aside judicial sales, made pursuant to its judgments, or orders, for fraud or irregularity. * * * A purchaser at a sheriff’s sale, although a stranger to the judgment or decree, by his purchase submits himself to the jurisdiction of the court, in respect to the sale and purchase. * # * A conveyance to a bona fide purchaser may be a circumstance which will influence the court in the exercise of its discretion, but it does not take away jurisdiction.” (See Wakeman v. Price, 3 N. Y. 334.)
In the ease of Horse Springs Cattle Co. v. Schofield, 9 N. M. 136, 49 Pac. 954, the supreme court of New Mexico laid down the broad principle that a sale bj a receiver under an order of the court should be set aside whenever it appears that the purchaser is enjoying an unreasonable advantage by the sacrifice of the property through mistake. The court said: “If the court should become advised that, either from mistake or other cause, the receiver was disposing of the property at a sacrifice, it would become the duty to stay his hand. This duty did not depend upon proof of corruption or bad faith, but, even though the receiver acted by mistake of fact, it would be equally the duty of the court to protect the estate which it was administering. The receiver was the trustee of all parties in interest. It was his duty to see that the property realized the highest sum, and it was the duty of the court to see that he did. * * * We are of opinion that the evidence shows that the order authorizing the receiver to sell these cattle was based upon great and material ■errors as to the number of cattle and the reasonable value thereof, and that to refuse to set the sale aside would result in permitting the purchaser to enjoy an ‘unconscionable advantage,’ by the sacrifice of the property through such mistake. When the purchaser bid upon the property, he submitted himself to the jurisdiction of the court as to all matters connected with the sale and relating to him in the character of purchaser. ’ ’ The court then ordered that the purchaser’s money be returned with six per cent interest.
In Blackburn v. Selma R. R. Co. (C. C.), 3 Fed. 689, the United States circuit court for the western district of Tennessee held, in effect, that a sale should be set aside when the circumstances afford substantial evidence" that for some perhaps unknown reason the property has been greatly undersold.
In Anderson v. Foulke, 2 Har. & G. (Md.) 356, the chancellor declared: “If there should be made to appear, either before or after the sale has been ratified, any injurious mistake, misrepre sentation or fraud, the bidding will be opened, the reported sale will be rejected, or the order of ratification will be rescinded, and the property again sent into the market and resold. * * * In all judicial sales under orders or decrees of this court the rule caveat emptor has been applied.”
From the foregoing and other cases we deduce the following rules of law: (a) That a court of equity has jurisdiction to set aside an order of sale, either before or after confirmation, whenever it is made to appear that the same was entered through mistake, inadvertence, or improvidence; (b) that the purchaser at such sale tabes the property with notice that the court has power, in its discretion, to set it aside; (c) that, while mere inadequacy of consideration is not ordinarily in itself sufficient to warrant the court in setting aside a sale to a bona fide purchaser, if it shall appear that for some reason, disclosed or undisclosed, the property has been greatly undersold and the purchaser has, even in good faith, obtained an undue advantage of the persons for whose benefit the sale was made, the court may, in its discretion, set it aside; (d) that the fact that the purchaser acted in good faith, without intention to obtain an unfair advantage, and has fully complied with the terms of the sale, or even that he cannot be placed in statu quo, does not affect the power of the court to rescind the sale, but all of these facts should be taken into consideration by the court in the exercise of its discretion ; (e) that, when a sale is rescinded, the purchaser should, if possible, be reimbursed for any damage he sustains by reason of its rescission; (f) that the question of the time within which a rescission should be ordered may be considered by the court in the exercise of its discretion, but mere lapse of time does not affect its power to rescind.
We must not forget that this is an equitable proceeding, the ultimate object of which should be to dispose of 297 shares of the capital stock of the Gazette Printing Company at the highest obtainable price, for the benefit of the creditors of the First Trust & Savings Bank. So far as the record discloses, it has resolved itself into a conflict between Mr. McCon nell and Mr. Moss to ascertain which shall control the “Billings Daily Gazette” and the “Billings Evening Journal.” We say this advisedly, for while the testimony shows that the $6,001, therein mentioned, came from Mrs. Moss, it also discloses that Mr. Moss was the active agent in the transaction, that he is now in control of the affairs of the Gazette Printing Company; and it is fair to assume, we think, that such control has existed since 1907. Mr. Moss testified: “I paid Becker $40,000 for the stock. I purchased the property of Becker. We more than doubled the business since I got it. I got all the money from Snidow.” In fact, it appears that Mr. Moss is, in effect, the Gazette Publishing Company. At or about the time of the two offers to purchase from the receiver, the indebtedness of the printing company, so near as we are able to figure, was about $27,000, and remains at substantially that amount to-day. That is to say, in lieu of owing about $12,000 to the First Trust & Savings Bank and about $13,000 to the First National Bank, as it did at that time, it now owes Snidow $25,000; and, in addition thereto, it is indebted to one Jenizon in the sum of $2,000. We are, of course, speaking with reference to the day of the hearing, having no means of knowing whether any part of the indebtedness has since been paid. However, if the newspapers continue to earn a net annual income of $8,000 as they did during the year immediately prior to the hearing, it is not at all unlikely that the indebtedness has been greatly reduced. What was the value of the property of the Gazette Printing Company at the timé of the sale of practically all of its stock to the appellant? As the trial judge found for the respondents, it is not unreasonable to conclude that he deemed the price paid an inadequate one. Moreover, it is strenuously contended by the respondents’ counsel that it was grossly inadequate. In this latter conclusion we concur. Moss paid Becker $40,000 for the stock in 1907. The company has the exclusive Associated Press franchise in the immediate vicinity of Billings, and, according to all of the testimony, an exceptionally profitable field of circulation for its newspapers. In 1907 the physical property alone was worth $30,000, and since that time $8,000 of improvements have been added thereto. The goodwill and franchise were thought to be worth $20,000 in 1907, and Moss testified: “We more than doubled the business since I got it, so I can say that $30,000 or $40,000 would not be an unreasonable figure to place upon the goodwill and franchise. The net profits for the year prior to November 1, 1910, were $8,000. That would be a profit on $80,000 at ten per cent net profits, including the interest paid and the net profit. And the addition to the plant figured up about $8,000.” It is not entirely clear from this testimony whether the company added $8,000 to its plant besides paying $8,000 in net profits or not, but, at any rate, $8,000 would be statutory annual interest on $100,000. Mr. Wood testified that he considered the business “a prosperous concern,” and that the prospects were it would improve, in the future. We heartily agree with the respondents that $15,000 was a grossly inadequate price for the stock and notes. The newspapers would pay this amount in less than two years. Let us recollect, too, that the $15,000 not only purchased the stock, but also increased the value thereof by wiping out an indebtedness of the company of about $12,000 to the First Trust & Savings Bank, leaving the only creditors the First National Bank, in the sum of about $13,000, which amount has since been paid from the proceeds of the Snidow note, and Mr. Jenizon in the amount of $2,000. The result of these figures is that for $15,000 the purchaser virtually purchased a concern worth at least $80,000, with an indebtedness of about $15,000. The net profit was $50,000. We conclude, therefore, that Judge Sanner was correct in his determination that the second order of Judge Fox was made through grave mistake and inadvertence, and improvidently. It follows that the order was properly rescinded and set aside.
3. But were the respondents in a more favorable situation to appeal to a court of equity than was the appellant? Of the many maxims of equitable jurisprudence perhaps the best known and most salutary is that a suitor must approach the court with “clean hands.”
Every consideration which operated against the appellant is equally applicable to the respondents. More so, indeed, for Mr. Moss confessedly knew the real value of the property, and, so far as the record shows, Mr. McConnell did not. There is not any force in the suggestion that the stock was carried on the books of the company at but $6,000. Mr. Moss admitted on the witness-stand that he “figured the plant would be sold for very much less than its value.” He had an intimate acquaintance with the affairs of the company, financial and otherwise, and was in a position to judge of the real worth of its assets. He offered $6,001 for property for which he had paid $40,000 but three years before. We are not advised that it had any indebtedness at that time; but, if it had any, there is no suggestion that the same was not paid from the funds of the company itself. In three years the property had practically doubled in value, and the field of usefulness of the newspapers operated by the company had greatly increased.
The function of a court of equity in eases like this is to have a vigilant eye to the interests of the beneficiaries of the trust which it has in charge. The main, in fact the only, consideration should be that the unfortunate creditors of the defunct bank and trust company shall realize the greatest possible amount from the disposal of its assets. If the testimony of the respondent, Mr. Moss, is to be given full force and effect, the property of the bank will be sold at an enormous sacrifice, whether the sale price be $15,000 or $19,000. In either event they will lose many thousands- of dollars to which they are justly entitled. If, as indicated by his testimony, this loss would amount to $50,000 in ease of a sale to the appellant for $15,000, it will amount to $46,000 in the event of a sale to him. The assets of the trust should be sold for the highest amount which it is possible to realize therefor, to the end that the rights of the creditors may be fully protected. Every opportunity for investigation and competitive bidding should be afforded to all who contemplate purchasing. ¥e do not mean to indicate how the sale shall be made. That is a matter for the district court to determine in its discretion. Neither do we wish to be understood1 as deciding that the amounts heretofore referred to must necessarily be realized. What we .do hold is that the property should be sold to the best advantage, and for all it is worth, if possible.
If we merely affirm the order appealed from, we shall concur, not only in that portion rescinding the sale to the appellant and directing the return of his money, but also in that part thereof ordering a sale to Mrs. Moss and the Gazette Printing Company for $.19,036.38. We cannot in equity and good conscience do this.
The receiver now has in his hands the sum of $15,000 belonging to Mr. McConnell, $6,001 belonging to Mrs. Moss, and $13,035.38 belonging- to the Gazette Printing Company. This latter amount was realized through Mr. Moss upon the company’s note to Snidow. It is proper that the receiver shall retain this amount and cancel and deliver the company’s notes, after receiving the same from the appellant, to the proper officer of the printing company. The record shows that the receiver has other funds in his possession. Judge Sanner having exonerated Mr. McConnell from wrongdoing, it is proper that he shall be placed in statu quo.
It is therefore ordered that those portions of the order appealed from rescinding the sale to the appellant, directing the return of his money, and that he shall redeliver the stock and notes to the receiver, be and the same are hereby affirmed. It is also ordered that out of any appropriate funds in his hands the receiver shall pay to Mr. McConnell interest on the said sum of $15,000 at eight per cent per annum from the twenty-first day of November, 1910. That portion of the order requiring the receiver to cancel and deliver to the Gazette Printing Company its promissory notes is also affirmed. That part thereof directing the receiver to deliver 29-7 shares of the capital stock of the Gazette Printing Company to Mattie W. Moss is reversed, and tbe receiver is ordered to return to Mattie W. Moss, or her accredited agent, the sum of $6,001, so paid to him by her, through P. B. Moss. The district court of Yellowstone county is directed to ascertain whether in its judgment Mattie "W. Moss is entitled to interest on the sum of $6,001 deposited by her, and, if so, to allow such interest. Each party to this proceeding shall pay his own costs in this court.
Mr. Chief Justice Brantly and' Mr. Justice Holloway concur. | [
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MR. CHIEF JUSTICE BRANTUY
delivered the opinion of the court.
This action was brought to quiet title in plaintiffs to the use of the water flowing in Staubaeh creek in Broadwater county. They claim by separate rights. Plaintiff Kenck alleges an appropriation and diversion of 340 inches by predecessors in interest, in the early spring of the year 1866, for the purpose of irrigating 160 acres of land in section 35 of township 9 north, range 1 west, and continuous use by his predecessors and himself, down to the bringing of this action. A second claim is predicated upon an appropriation of 100 inches which is alleged to have been made in May, 1893. Plaintiff Gravel alleges an appropriation and diversion of 100 inches, by a predecessor in the spring of 1866, to irrigate 160 acres of land in section 36, adjoining the land of Kenck and like continuous use by his predecessors and himself, down to the bringing of this action. It is alleged that the defendants, claiming some right to the use of water from the stream, are diverting it therefrom and depriving the plaintiffs of its use, to their irreparable damage, though such rights as the defendants have are subsequent and inferior to the rights of plaintiffs. The complaint concludes with a prayer for a decree determining the respective rights of plaintiffs and defendants and fixing their priorities and amounts.
The defendants Reynolds, Kerehlechner, and Moody suffered default to be entered against them and were not awarded any rights. The defendant Deegan, controverting plaintiffs’ rights, alleges that his ward, Valentine Staubaeh, now an incompetent, in the spring of 1866 appropriated and diverted from the stream 160 inches for use upon agricultural land then owned by Staubach, in section 2 of township 9 north, range 1 west, and that ever since the date of appropriation, when the flow of the stream has been sufficient, the amount so appropriated has been used by Staubaeh and the defendant, his guardian, upon this and other land belonging to Staubaeh in sections 2, 34, and 35, all of it being of such character as to need irrigation. It is alleged that other appropriations were made by Staubaeh in the years 1871 and 1877. These rights and the second right claimed by plaintiff Kenck are not involved on these appeals. As to the other rights, the court found that on March 31, 1867, Staubach appropriated and diverted forty inches for use upon a portion of the land now belonging to him in section 2, and that since that date he and his guardian have needed and used this amount; that the predecessors of Kenck on May 1, 1869, appropriated and diverted fifty inches for use upon the land now owned by Kenck in section 35, and that since that time his predecessors and he have made continuous use of this amount; and that the predecessor of Gravel on the same day appropriated and diverted fifty inches for use upon the land now owned by him in section 36, and that his various predecessors and he have made continuous use of this amount. The decree fixes the amounts and priorities in accordance with these findings. The plaintiffs have appealed from the decree and an order denying their motion for a new trial. The contention is that the evidence is insufficient to justify the findings as to the date and amount of plaintiffs’ appropriations, and also that the award to defendant is excessive.
The evidence is voluminous, covering more than 500 printed pages of the record. Owing to the omission by plaintiffs to have certified up to this court, as a part of the record, the maps introduced at the trial to illustrate the testimony of the witnesses, it is impossible to gain a clear understanding of the situation of the lands of the respective parties with reference to Staubach creek, or the location of their ditches. Moreover, most of the persons who were in the vicinity and had personal knowledge of the situation as it was in 1866 and during the years immediately following are now dead. Those of them who were still living at the time of the trial and who testified were evidently affected by failure of memory, due either to advancing years or to lapse of time. Still others were at the time of the events about which they testified too young to observe intelligently, and hence did not have more than a vague and indefinite recollection of the situation. Taken altogether, the evidence is not clear and satisfactory. But, so far as it relates to the dates of the original appropriations, it is clear and involves no controversy. It presents ratber a question as to wbat is the rule of law which must be applied to the admitted facts. .
Two men, referred to by the witnesses as Doc Mann and Joe Barber, settled on the Kenck land in 1866 and made an appropriation of water as early as May of that year. One Northrop settled on the Gravel land about the same time and, by an agreement with Mann and Barber, extended the ditch constructed by them to his land to irrigate a portion of it. Thereafter, during the continuance of the occupation by these parties, all used the ditch in common. Other persons occupied these lands during 1867 and 1868 and used a small amount of water. In the spring of 1869 possession of both settlements was taken by one John W. Rodgers; subsequently a homestead patent was secured by him to the 160 acres in section 35, now owned by Kenck, and by proper conveyances Kenck is vested with his title and the appurtenant rights. At a date not shown, patent to the Gravel land was secured by one Vm. F. Hamilton. Gravel is now vested with the Hamilton title, with appurtenances. When, however, we come to connect the Rodgers possession in 1869 with that of the prior occupants, either by written or oral conveyances, we are unable to find any; nor are we able to find any connection between the Hamilton title and that of Rodgers or his predecessors. So far as can be ascertained from the evidence in this connection, Rodgers went into possession as a volunteer without having acquired the rights of those who preceded him, either by virtue of the law of succession or by conveyances. Staubaeh made his settlement in October, 1866. His appropriation was made in the spring of 1867, as early as some time during the month of March. He and his guardian have been in possession ever since, Stau-baeh having secured patent first to a pre-emption claim of 160 acres in section 2, and later to other land under homestead and desert entries in sections 2, 34, and 35. Under this condition of the evidence the court correctly found and fixed the date of the latter appropriation as of the time it was made in 1867. And though the appropriations of Mann and Barber and of Northrop antedated the inception of this right by a year, the plaintiffs having failed to put themselves in privity with them, the court properly fixed the date of the inception of plaintiffs’ rights as of May 31, 1869, the earliest date at which Rodgers, the predecessor under whom they both claim, is shown to have been in possession.
While there is no presumption that any predecessor of Rodgers abandoned the Mann-Barber right or that of Northrop, the absence of this presumption cannot supply the proof of privity with these rights through Rodgers, which the law requires the plaintiffs to show in order to establish their claims of succession to them. The mere possession by one person of a water right originated by another does not show such privity. In order to make good his claim to the right as of the date at which it was initiated, the possessor must show some contractual relation between himself and the original appropriator, or privity with him under the laws of succession. Otherwise the initiation of the right will be fixed as of the date at which possession was taken. (Hays v. Buzard, 31 Mont. 74, 77 Pac. 423; Head v. Hale, 38 Mont. 302, 100 Pac. 222; Farnham on Waters, sec. 670a.) The author cited states the rule thus: “The question whether or not one in possession of a water right at a given time, which was originated by another, has sufficient title thereto to enable him to protect and defend it depends upon whether or not he is in privity with the original owner. The rights of an owner of land claiming water as appurtenant thereto do not relate back to the inception of the alleged right in 'the appropriation made by the original settler of such land, where there is no proof of any contractual relation between his predecessor in title and such original settler, either directly or indirectly touching the settler’s rights, and it is not apparent that his predecessor ever acquired such rights from such settler.”
Some contention is made that the plaintiffs have established their right to priority by adverse use. In our opinion this issue is not properly made by the pleadings. But, even so, the evidence is in conflict both upon the question of continuous, uninterrupted use by the plaintiffs, or either of them, and upon the question whether the use by them and their predecessors, following the assumption of possession by Rodgers, has not always been subordinated to, and in recognition of, the Staubach right. Under this condition of the evidence, we are concluded by the findings of the district court.
The same must be said of the findings of the amounts allotted to each of the parties. The evidence tends to show that in the earlier months of the season Staubach creek furnishes water sufficient to supply the wants of all the parties, but at the average low-water season, in July and August, it furnishes not to exceed 100 inches at most. In finding upon this branch of the case the court was evidently influenced somewhat by the notion that while the defendant is entitled to the oldest right, the amount awarded to him should not be so fixed as to give him a monopoly during the extreme low-water season. In any event, the allowance made to each of the parties is well within the extreme limits fixed by the conflicting evidence as to their respective necessities. Under this condition of the evidence we cannot disregard the findings as made.
The judgment and order of the district court are affirmed.
Affirmed.
Mr. Justice Smith and Mr. Justice Holloway concur. | [
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] |
MR. CHIEF JUSTICE BRANTLT
delivered the opinion of the court.
The defendants, charged jointly with grand larceny, were convicted and sentenced to terms in the state prison at hard labor — Matkins to a term of four years, and Gatliff to a term of five years. They moved for a new trial, on the ground, among others, of newly discovered material evidence which they could not with reasonable diligence have discovered and introduced at the trial. They have appealed from the judgment and from an order denying their motion. The only question submitted for decision is whether the trial court abused its discretion in denying a new trial.
The larceny charged was that of a yearling colt. The evidence introduced by the state tends to show that the colt was foaled by a mare belonging to Warren, the prosecuting witness, in April, 1909; that in October following Warren took it from the dam and left it at the ranch of one Edwards, to be fed and oared for during the fall and winter; that it was put in a pasture in care of one Williams, who had charge of the ranch, where it remained until about the middle of December, when it disappeared with other colts belonging to Edwards; and that in the latter part of March, or the early days of April, 1910, it was found in the possession of the defendants at the ranch of Gatliff, where Matkins was employed, with Gatliff’s brand upon it. Gatliff resided upon his ranch in Rosebud county, in the same general vicinity in which the Edwards ranch was situated, but several miles away. The Edwards ranch was about thirty-five miles from Forsyth, the county seat, where Warren resided. The controversy in the evidence was as to the identity, or, what is the same thing, the ownership, of the colt. The testimony of Warren and other witnesses was positive and circumstantial as to its birth, history, and physical markings. The defendants, not dis puting the fact that Warren had lost a eolt by larceny or otherwise, claimed and endeavored to show that the one found in their possession had been foaled on the range by a mare belonging to Gatliff, and had been taken from her during the month of December, 1909, and driven with other animals to the Gatliff ranch, to be fed and cared for during the winter. There was evidence tending to show that the eolt was taken to the Gatliff ranch before the colt disappeared from the Edwards pasture, and was there at the time. There was also evidence tending to show that it differed materially in its general appearance and markings from that claimed and described by Warren. Gatliff did not offer himself as a witness, though the testimony of other witnesses showed that at the time of his arrest he claimed ownership of all the colts found in his possession. No declaration was then or thereafter made by either defendant, other than a statement made by Matkins to the deputy sheriff at or about the time of his arrest, as follows: “You have got me now. How many more have you got in this ease?”
In support of the motion several affidavits were presented; the one upon which the defendants chiefly rely being that of one Fred Oration. He alleges in detail his acquaintance with the defendants and the prosecuting witness, a knowledge of the locality of the Edwards and Gatliff ranches, a knowledge of the colt described by Warren as the one stolen from him by the defendants, as well as those claimed by Edwards, his acquaintance with the testimony given by Warren at the trial of defendants, and then proceeds: “At the time of the alleged larceny of the said Warren colt and the said Edwards colts, I was residing on what is known as Sarpy creek in Eosebud county, Montana, about twelve miles from the Edwards ranch, where said colts were claimed to have been located, and about eighteen miles from the ranch of said defendant Gatliff; that I was present at the time of the preliminary examination of the said Gatliff and Mat-kins, upon which an information was filed, and upon which the trial herein mentioned was had in Forsyth, during the latter part of November, 1910: that I saw the eolt claimed by the state and its officials to have been stolen from the said Warren by the said defendants-; that I had seen’said oolt long previous to the time of said preliminary examination, and while it_ was in the possession of the defendant Gatliff; that I know personally that the colt mentioned by the said Warren in his testimony was not the colt which was mentioned by the said Warren in his testimony at said trial; that I know personally that the colt which I saw at the time of the preliminary examination and the colt testified to by the witness Warren in said trial was not the property of the witness Warren, and have every reason to believe, and I am practically sure, that said colt was the property of the defendant Gatliff; that, at the time of the trial of said defendants Gatliff and Matkins, I was indicted for grand larceny in Rosebud county, Montana, and did not advise any person or persons of my knowledge in connection with the taking of the Warren colt, for the reason that I considered any such information to be prejudicial to my rights in the case then on trial; that at the time of the trial of Gatliff and Matkins neither of said defendants, nor any counsel connected or employed by them, had any knowledge -of the facts known by me in connection with said affair, and could not have obtained the same, until after a dismissal of the case of the state of Montana against myself, for the reasons hereinbefore stated; that there is another reason why I did not give this information previous to the trial of said Gatliff and Matkins, and that is that I knew that neither the said Gatliff or the said Mat-kins had anything to do with the taking of said Warren colt, and I believed that justice would be done in the premises, and that the said defendants nor either of them would be unjustly convicted; that since the conviction of said Gatliff and Matkins I realize and know that an unjust conviction has been had and two innocent men have been sentenced for a violation of law, of which neither of them are guilty, and I feel that it is my duty to make a statement of the true facts, as they exist, that justice may be done to the said defendants and the state of Montana in the premises ; that during the latter part of December, 1909, I personally went to the pasture of Charles C. Edwards mentioned hereinbefore and where the Warren colt in controversy then was, and took said Warren colt from said pasture, without the assistance or knowledge, so far as I know, of any other person or persons; that, after taking said colt from said pasture, I kept said colt in my possession for a considerable length of time, and then sold, disposed of, and delivered said property to a resident of Rosebud county, Montana; that, to the best of my knowledge and belief, said colt has been in the possession- of the person to whom I sold it ever since the time of said sale, and is now in the possession of the person to whom I made such sale, in Rosebud county, Montana, and can be produced at retrial of said action or at any other time, when the person to whom I sold said colt is called upon to produce it; that the sale of said Warren colt was made to the purchaser herein mentioned some time in the spring of 1910, at which time said colt, together with other livestock, was running upon the common range; that, after the sale of said colt and other livestock, said colt was rounded up and delivered by me to the said purchaser, with other livestock, at which time I told and represented to said purchaser that I was the owner of said colt and -other livestock, and that no person had any claim upon or to the same; that said purchaser had no means or knowledge, either directly or indirectly of knowing or assuming, that I was not the absolute owner of said colt and other livestock and entitled to transfer and deliver the same; that the name of the purchaser to whom said colt was sold as hereinbefore stated is George Johnson, now residing on Beaver creek, in Rosebud county, Montana. I am making this affidavit freely and voluntarily and simply that justice may be done in the premises, and, if called as a witness at this time or at any other time in the above-entitled cause in the above-named court, I will testify to the same facts as are set forth in this affidavit. ’ ’
George Johnson states that he has read the affidavit of Oration, and also the transcript of the testimony of Warren as given at the trial, especially that part of it in which Warren gave a description of the colt claimed by him. He then avers: “That during the year A. D. 1910 I purchased from the said Fred Oration above mentioned a colt which, as I understand it, answers the description given by said Warren in said testimony, and which I know to be the colt mentioned in the affidavit of said Oration as being the colt of said Warren, for that the colt which I now refer to is the only colt purchased by me from said Oration; that I purchased said colt in connection with a saddle-horse, and that the said colt and said saddle-horse were delivered to me by said Oration, and that said colt and said saddle-horse are both now in my possession, and that I am willing to produce said colt on retrial of said cause, or at any other time when the same may be desired for any purpose in connection with this case; that I am familiar with said colt, its appearance and its markings, and that said colt which I know to be the colt referred to in Oration’s affidavits answers the description of the colt testified to by the witness Warren above referred to; that at the time of the purchase of said colt and said saddle-horse said Oration represented that he was the sole, true owner of the same, and that he had good right to sell and convey said colt and said saddle-horse, and that no person had any claim upon the same; that I had no knowledge, either directly or indirectly, that his representations were false or untrue, and did not know that said colt was the property of said Warren, or was in any manner connected with the offense charged against Gatliff and Matkins, or that said colt was not the absolute property of said Oration, until after I had read the affidavit of said Oration, heretofore exhibited to me, and that, if called as a witness, I will produce said colt and testify to the facts set forth in this affidavit at any time or place, or in any court where said testimony may be desired.”
Harvey Jones, a witness for the defendants at the trial, repeating in substance the testimony then given, that he knew both the colt described by Warren and the one taken from the possession of the defendants, and that he knew that the latter w.as altogether different in its description from the former, states: ‘ ‘ That I have read the affidavit of one Fred Oration in the above-entitled cause, in which he says that he took the colt in controversy and afterward sold the same to one George Johnson, and that I have read the affidavit of George Johnson in this ease, in which he says he purchased said colt in connection with a saddle-horse from said Oration, and that I have seen and made careful examination of the colt mentioned in the affidavits of said Oration and said Johnson, and that from my examination of said colt I know that said colt is the colt of said Warren which was the subject matter of the controversy in this cause, and that said colt is not the colt taken from the possession of the defendants Gatliff and Matkins and testified to by said Warren at the trial of this cause in the district court, and that I will, if called as a witness, testify to the facts set forth in this affidavit at any time or place or in any court where said testimony may be desired or required; that I had no knowledge of the facts set forth in this affidavit as to the whereabouts of said colt at the time of the trial of this cause in the district court, and further this affiant saith not.”
The affidavit of A. W. Anderson, also a witness at the trial, is substantially a copy of that of Jones.
Mr. Collins, one of counsel who represented the defendants at the trial, states in his affidavit, in substance, that, as soon as he was employed by the defendants he made a careful investigation of the facts and circumstances in connection with the case and the evidence which could be procured both on the part of the state and the defendants; that, by consultation with the defendants and their friends, he elicited from them all the facts of which he could obtain knowledge in connection with the charge against defendants; that he instructed them to make inquiry pertaining to the issues involved; that he made a thorough personal examination in an effort to ascertain who were the really guilty parties, but without getting possession of any tangible evidence; that he was also the attorney of Fred Oration, who was confined in jail at Forsyth under a charge of grand larceny; that the trial of Oration was set to follow immediately the trial of defendants; that at no time prior to said trial did Oration intimate to him that he had any knowledge of the stealing of the Warren colt; that affiant gained no information of the knowledge possessed by Oration until long after the trial, and not until the affidavit made by Oration was presented to him; that immediately after the affidavit was made he delivered it to the officers of Rosebud county for such use as they might make of it; that the evidence of Oration could not by any amount of diligence have been discovered before the trial of defendants. After expressing the opinion that the evidence disclosed by the affidavits of Oration, Johnson, Jones, and Anderson would lead to a different result if another trial were granted the defendants, he proceeds: “That since the disclosure of the contents of the affidavit of Oration which is now on file herein to the county attorney and the sheriff of Rosebud county the said Oration was in New Mexico confined in jail íor a period of fourteen days, as affiant is informed and believes, and that the officers of Rosebud county then knew of his whereabouts, and were by the officers of the county in New Mexico where the said Oration was confined in jail notified that they held said Oration in confinement, and by reasonable diligence could have apprehended and brought the said Oration to the state of Montana, and that, as affiant is informed and believes, the said Oration is now in New Mexico, and, if a retrial of said cause be granted, that his appearance can be had, that said application for a new trial is not made for the purpose of delay, but that justice may be done in the premises.”
Mr. Hathhorn makes a brief statement to the effect that he had no knowledge of the facts stated by Oration and Anderson, prior to the trial of defendants, and then corroborates Mr. Collins in his statement as to the diligence employed by counsel and their clients in the preparation of the case, and concurs in the opinion that a different result would be reached in case a new trial were granted.
The county attorney presented counter-affidavits by Mr. Guy, the sheriff, and Warren, the prosecuting witness. After alleging his official capacity, affiant Guy states: “That said colt was delivered to him, in the city of Forsyth, at or about the time of the arrest of said defendants on said charge. Affiant further states that after said colt was delivered to him, as aforesaid, he placed the same in a pasture near said affiant’s ranch at Rancher, Rosebud county, state of Montana, and that thereafter and before the trial of the above-named defendants in the district court of said Rosebud county, state of Montana, said colt disappeared from the said pasture, and that affiant believes, and has reason to believe, that the same was stolen from said pasture by certain persons, who were interested, on behalf of the defendants in said prosecution.”
Warren states: “That he is the prosecuting witness in the above-entitled ease and the owner of the colt, for the larceny of which the said defendants were convicted; that he has read the affidavit of George Johnson, filed in this case, and is familiar with the contents thereof, and that, on the second day of May, A. D. 1911, he personally went to the ranch and home of the said George Johnson, in Rosebud county, state of Montana, and requested the said George Johnson to show him the colt mentioned and described in said affidavit, and that the said George Johnson at said time and place absolutely declined and refused to allow this affiant to inspect the said colt or to show him where said colt was; that at the said time and place the said George Johnson admitted to this affiant that, after mature reflection, he did not believe that the colt referred to in his affidavit as being the Warren colt, for the larceny of which the above defendants have been convicted, was the same colt that he had purchased from Fred Oration and mentioned and described in his, the said George Johnson’s, affidavit, filed herein.”
Applications for new trials on the ground of newly discovered evidence are not favored by the courts. The reason is that the moving party has already had a hearing after ample opportunity to prepare his ease, and that, while smarting under defeat and disappointment, he is under strong temptation to manufacture a plausible showing in support of his motion. He may be entirely willing to take the chances of a new trial, but unwilling or afraid to swear to a statement necessary to procure it. It is often the case that the sense of loss arouses him to the diligent activity which he should have put forth before the trial. By importunity be then, interests his friends and through them brings to his support evidence which, if not false, is only cumulative or impeaching in character, and the efficacy of which to produce a different result is speculative and dependent entirely upon the personal characteristics of another jury. The courts have, therefore, formulated rules within which they hold the particular application must be brought, or it will not avail. They are enumerated in Berry v. State, 10 Ga. 511, substantially as follows: (1) That the evidence must have come to the knowledge of the applicant since the trial; (2) that it was not through want of diligence that it was not discovered earlier; (3) that it is so material that it would probably produce a different result upon another trial; (4) that it is not cumulative merely — that is, does not speak as to facts in relation to which there was evidence at the trial; (5) that the application must be supported by the affidavit of the witness whose evidence is alleged to have been newly discovered, or its absence accounted for; and (6) that the evidence must not be such as will only tend to impeach the character or credit of a witness. To some of these there may be, and doubtless are, exceptions. For illustration: The cumulative evidence may be so overwhelmingly convincing as to compel the conclusion that to sustain the verdict would be a gross injustice, or the impeaching evidence may demonstrate perjury in the witnesses upon whose evidence the verdict is founded. Again, the evidence may be in the form of written documents which from their character may be conclusive of the rights of the parties. When the evidence is of the character last mentioned, an affidavit is not indispensable, unless to authenticate the writings, if necessary. However this may be, the rules enumerated above were early adopted and have been uniformly observed by this court throughout its history, as appears from the following cases: Caruthers v. Pemberton, 1 Mont. 112; Kleinschmidt v. Dunphy, 1 Mont. 118; Morse v. Swan, 2 Mont. 306; Garfield M. & M. Co. v. Hammer, 6 Mont. 53, 8 Pac. 153; Territory v. Clayton, 8 Mont. 1, 19 Pac. 293; Territory v. Bryson, 9 Mont. 32, 22 Pac. 147; Leyson v. Davis, 17 Mont. 220, 31 L. R. A. 429, 42 Pac. 775; State v. Gay, 18 Mont. 51, 44 Pac. 411; Holland v. Huston, 20 Mont. 84, 49 Pac. 390; Baxter v. Hamilton, 20 Mont. 327, 51 Pac. 265; State v. Brooks, 23 Mont. 146, 57 Pac. 1038; Elliott v. Martin, 27 Mont. 519, 71 Pac. 756; In re Colbert’s Estate, 31 Mont. 461, 107 Am. St. Rep. 439, 3 Ann. Cas. 952, 78 Pac. 971, 80 Pac. 248; State v. Wakely, 43 Mont. 427, 117 Pac. 95. To these rules may properly be added’ still another, vis., that it must appear to be within reasonable probability that the evidence is within reach of the moving party and that he can produce it at the trial.
The affidavits of Johnson, Anderson, and Jones, considered apart from that of Oration, present evidence which is only cumulative and impeaching in character; for it relates only to the identity, and therefore the ownership, of the colt in controversy, and contradicts the claim made by Warren. The facts disclosed in them assume the character of new original evidence only when taken in connection with the disclosures made by Oration; for their knowledge of the history and ownership of the Johnson colt they obtained only through Oration’s affidavit. Therefore, if the evidence of Oration could not be obtained to be used at another trial, such other trial would be but a reinvestigation of the issue already tried, upon the same evidence, supplemented by such cumulative and impeaching facts as they would be permitted to testify to touching the identity of the colt now in the possession of Johnson.
The facts disclosed by Oration constitute wholly new and original evidence. They are also material. As corroborative of his testimony, could it be had, the statements of Johnson, Anderson, and Jones would assume the form of new and original evidence. If Oration had surrendered himself to the authorities of Rosebud county and submitted to arrest for his alleged larceny, it would be within the power of the defendants to produce his evidence, for, though a convicted felon, his testimony would be competent. The fact that he had surrendered himself for punishment, in order to protect the defendants from injustice, would furnish well-nigh a demonstration of the truth of his state ments. In any event, bis evidence would under these circumstances be stroDgly persuasive of the innocence of the defendants. But all the circumstances point to the.conclusion, not only that his story is probably false, but also that his presence as a witness will in all probability not be obtainable even if a new trial were granted. His affidavit was made on December 14, 1910. It was filed with the clerk on April 27, 1911, about four months and a half later. Exactly when the authorities of Rosebud county gained knowledge of it does not appear. That he was not arrested in itself indicates that he was then out of the jurisdiction, probably beyond the reach of the authorities, and intended to remain so.
It would seem that counsel for defendants, if satisfied of the truth of his statement, would have exerted every effort to have had Oration arrested, and thus detain him within the jurisdiction, so that his evidence could be made available. Upon the face of it, the affidavit of Oration seems to have been made, not to serve the ends of justice, but in order to secure the defendants a new trial and thus give them another chance, but without the intention of serving them further, by being present or where they could secure his deposition; for, though he avers that ho makes the affidavit freely and voluntarily in order that justice may be done, and that if called as a witness he will testify to the facts, it is impossible to believe that he then and there had, or now has, any intention voluntarily to come into the jurisdiction or disclose his whereabouts to the state authorities. It is therefore altogether improbable that his evidence can be obtained, even if a new trial were granted. Doubtless this consideration, as it ought, greatly influenced the trial judge in reaching the conclusion that the motion should be denied. Besides, while the affidavits of counsel show diligence so far as they are concerned, the defendants themselves have failed to deny knowledge of the facts stated by Oration. It is entirely possible that, while they did not commit the larceny of the Warren colt, they may have had such knowledge of it as to require them to speak. They should at least have gone so far asi to deny such knowledge, and thus have shown that they themselves have not been guilty of a lack of diligence. They should, incidentally, also have disclaimed their own guilt. Up to this point in- the case the defendant Gatliff has never seen fit to speak on this subject, except in his plea of not guilty. Nor has Matkins, except so far as a disclaimer may be predicated upon his assertion that he knew that the colt found at the Gatliff ranch was the property of Gatliff. So far as we can see, the Cration affidavit is probably the result of an understanding between him and the defendants — a clever device by which he seeks to aid them to escape what appears to be a proper conviction.
Upon the showing made, the motion was properly denied. The judgment and order are therefore affirmed.
Affirmed.
Mr. Justice Smith and Mr. Justice Holloway concur. | [
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] |
MR. JUSTICE HOLBOWAY
delivered the opinion of the court.
The defendant was charged with committing an assault in the first degree upon one J. Roy Huntington by means of a rifle, described as a deadly weapon. At the close of the case for the prosecution, the trial court directed a verdict of not guilty, and the state has appealed.
The only evidence offered by the state at the trial was furnished by the witness James Wasson, corroborated in part by-Arthur Wasson, and the prosecuting witness, Huntington. James.,Wasson was Tile oltly. witness who assumed to detail all the facts and ciraimstances. H^testified that on July 18, J.911, Arthur Wasm, and Huntington were riding on horseback along a road, when the defendant \stepped from behind some bushes, leveled a rifle at them, and commanded them to hold up their hands. At the time Barry was sixty or seventy feet away. The witness immediately leveled his own gun at Barry, and Barry cried out, “For God’s sake, don’t shoot me, Jim! You’re not the man I am after. It’s that dirty s-o-b-over there, ’ ’ pointing to Huntington. Other conversation was had, during which Barry used threatening and abusive language toward Huntington, but it is of no particular moment here. {Arthur Was-son did not see .or hear ■ all that occurred, or, if he did, he had forgotten part of it) However, he corroborated James Wasson as to the principal points covered by the latter’s testimony. ^{Huntington, the prosecuting witness, did not see or hear a part of what transpired. He testified that his attention was first attracted by some exclamation from James Wasson, that he turned and saw Wasson with his gun leveled to the front, and, looking in that direction, saw Barry just as Barry begged Was-son not to shoot. From that point on he corroborates Wasson as to all material matters.y
The motion for a directed verdict made by the defendant was based upon the ground that since there was not any evidence tending to show that the gun which Barry'had was loaded, or that he attempted to use it in any manner other than as a firearm, the evidence was insufficient to support a conviction for assault in any degree. This view was adopted by the trial court.
In every instance where an assault is charged to have been committed by means of a gun used as a firearm only, not as a club or bludgeon, and there is not any evidence as to whether the gun was loaded, a question arises upon which the courts are hopelessly divided. The difficulty‘arises in the attempt to dis^ tinguish between violence merely menaced and an assault. It is useless to. attempt to reconcile the decisions, even upon substantially the same facts. Some courts hold that, in the absence of proof that the gun was loaded, no offense is made out because there is no showing of a present ability to inflict injury which it is insisted is an essential element of the crime. Others hold that there is a presumption to be indulged that the gun was loaded, and'the burden is upon the defendant to overcome the presumption by evidence that the gun was not loaded. Typical of the first class of cases are Klein v. State, 9 Ind. App. 365, 53 Am. St. Rep. 354, 36 N. E. 763, and Chapman v. State, 78 Ala. 463, 56 Am. Rep. 42. A leading case of the second class is Crow v. State, 41 Tex. 468. In State v. Herron, 12 Mont. 230, 33 Am. St. Rep. 576, 29 Pac. 819, this court adopted the doctrine of the Texas court. However, the Herron Case was one of an attempt to commit an assault and much that appears in the opinion is clearly dictum. The rule there announced would seem to be altogether at variance with the other rule, universally recognized, that it is incumbent upon the prosecution to prove every material allegation of the information beyond a reasonable doubt. The more sensible rule, we think, and the one adopted by the later decisions and by text-writers, is founded upon the purpose which the statutes defining assaults have in view, viz., to prevent breaches of the peace.
In Hochheimer’s Criminal Law, section 254, the rule is stated as follows: “Any attempt unlawfully to apply the least actual force to the person of another constitutes an assault. ¡The attempt is made whenever there is any action or conduct reasonably tending to create the apprehension in another that the person engaged therein is about .to apply such force to him. It is sufficient that there is an apparent intention to inflict a battery and an apparent ability to carry out such intention. It is the outward demonstration that constitutes the mischief which is punished as a breach of the peace. * * * If the offender presents a pistol within apparent range and threatens to shoot another, it is immaterial that the weapon is not in fact loaded, if the person threatened has reasonable cause to believe it loaded.”
In 1 "Wharton’s Criminal Law, tenth edition, section 606, the same rule is stated thus: “An offer to strike by one person rushing upon another will be an assault, although the assailant be not near enough to reach his adversary, if the distance be such as to induce the latter, under the accompanying circumstances, to believe that he will instantly receive a blow, unless he strike in self-defense. And one reason for this is that an attack appar ently likely to hurt is as provocative of a breach of the peace as one actually capable of hurting. Hence, drawing a gun or other dangerous weapon on another with threat to use it is an assault, although the weapon is not pointed. Whether, when the weapon is not loaded, there is an assault has been doubted. But, as will be soon more fully seen, when the attitude is threatening, and the effect is to terrify, the offense is complete; the party assaulted believing in the reality of the attack. * * * The true rule is that there must be some adaptation of the means \ to the end, and it is enough if this adaptation be apparent, so • as to impress or alarm a person of ordinary reason.” (See, also, Clark & Marshall on the Law of Crimes, secs. 201, 206; 1 McClain’s Criminal Law, see. 234.) Bishop defines an assault as “any unlawful physical force partly or fully put in motion creating a reasonable apprehension of immediate physical injury! to a human being.” (2 Bishop’s New Criminal Law, 8th ed., sec. 23.) Again, the same author says: “There is no need for the party assailed to be put in actual peril, if only a well-founded apprehension is created; for his suffering is the same in the one case as in the other, and the breach of the peace is the same. To illustrate: If within shooting distance one menacingly points at another with a gun, apparently loaded, yet not in fact, he commits an assault the same as if it were loaded. There must be some power, actual or apparent, of doing bodily harm; but apparent power is sufficient. In the instances we are referring to, the person assaulted is really put in fear.” (Section 32.) After stating the foregoing rules, the author enters upon an extended discussion of the subject with reference to the questions which have led to conflicting decisions. (See subdivision 3, sec. 32, above.)
In Commonwealth v. White, 110 Mass. 407, the defendant was' charged with committing an assault upon one Harrington by the use of a gun. The trial court charged the jury “that an assault is any unlawful physical force partly or fully put in motion which creates a reasonable apprehension of immediate physical injury; and that if the defendant, within shooting distance, menacingly pointed at Harrington a gun, which Harrington had reasonable cause to believe was loaded, and Harrington was actually put in fear of immediate bodily injury therefrom, and the circumstances of the case were such as ordinarily to induce such fear in the mind of a reasonable man, .then an assault was committed, whether the gun was in fact loaded or not.” This instruction was held to state the rule of law correctly, and with it we agree.
^Applying the principle to the facts disclosed by the record, ; and the correctness of the trial court’s ruling is apparent at once. Not only is there an entire absence of evidence that Huntington was put in fear, but the contrary appears. (He did not even see the defendant until after James Wasson had Barry covered with his gun and rendered completely harmless. Barry had neither, the actual nor apparent ability to inflict harm upon Huntington, and, under the circumstances, with Barry hors de combat, it would seem impossible for any reasonable man in • Huntington’s position to affirm that he was then in fear for his safety. But, however this may be, the prosecuting witness does not even intimate that he was in fear. The circumstances would not be materially different if Huntington had been several hundred yards in the rear of James and Arthur Wasson and entirely ignorant of what was transpiring until after Barry had been disarmed. Under such circumstances, it seems impossible that it can be contended that an assault upon Huntington was committed. In People v. Lilley, 43 Mich. 521, 5 N. W. 982, it is said: “An assault may be made upon a person, even though he had no knowledge of the fact at the time.” The statement is not amplified and at first blush appears to be a contradiction of terms, and is such in fact if the authorities quoted above cor-Tfiotly-^aru-ionnoe the rules applicable to cases of assault.
We have not been called upon to consider whether this defendant might have been convicted of an attempt to commit an assault or of any other crime.
The order of the district court is affirmed. Affirmed.
Mr. Chief Justice BraNtly concurs. | [
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
The defendant was charged with the crime of assault in the second degree. The information is formally entitled in the proper court, and reads as follow: “The State of Montana, Plaintiff, v. G. W. Barry, Defendant. In the district court of the Thirteenth judicial district of the state of Montana, in and for the county of Carbon, on this 6th day of November, 1911, in the name and on behalf of the state of Montana, G. W. Barry is accused by P. E. Allen, the duly elected, qualified, and acting county attorney of Carbon county, Montana, by this information with the crime of assault in the second degree, committed as follows, to-wit: That at the county of Carbon, state of Montana, on or about the 17th day of July, 1911, and before the filing of this information [describing the circumstances of the assault], contrary to the form, force, and effect of the statutes in such cases made and provided and against the peace and dignity of the state of Montana. ’ ’ At the close of the evidence in the ease the court, on motion of defendant, directed a verdict in his favor on the ground that the information is defective, in that it is not alleged therein that it is presented “in the name and by the authority of the state of Montana. ’ ’ The appeal is by the state, and the only question presented is whether the information is sufficient.
The Constitution declares: “The style of all process shall be ‘The State of Montana,’ and all prosecutions shall be con ducted in the name and by the authority of the same.” (Const., Art VIII, see. 27.) While the provision is mandatory, it by no means follows that an indictment or information is defective if it does not contain a formal specific allegation that it is presented in the name and by the authority of the state. The provision embodies both a command to the courts that they shall not entertain a prosecution of a citizen by any authority other than that of the state, acting through the officers provided for that purpose, and also a guaranty to the citizen that he shall not be held to answer by any other authority.
The constitutions of several of the states of the Union contain provisions similar to that found in our own. It is held generally that the requirement is complied with if it appears from the record that the prosecution is conducted in the name of the state and by its authority. (State v. Russell, 2 La. Ann. 604; Greeson v. State, 5 How. (Miss.) 33; Horne v. State, 37 Ga. 80, 92 Am. Dec. 49; Savage v. State, 18 Fla. 909; State v. Blakely, 83 Mo. 359; State v. Delue, 2 Pinn. (Wis.) 204; Holt v. State, 47 Ark. 196, 1 S. W. 61; People v. Bennett, 37 N. V. 117, 93 Am. Dec. 551; State v. Thompson, 4 S. D. 95, 55 N. W. 725; Wharton’s Criminal Pleading and Practice, 8th ed., 92.) In Savage v. State, supra, it is said: “The Constitution says all prosecutions shall be conducted in the name and by the authority of the state. It is not required that the indictment on its face shall say in words that it is ‘prosecuted in the name and by the authority’ of the state. It merely directs that the state in its name and by its authority shall prosecute, and that no other name or any other authority shall control the prosecution. It is sufficient that the court shall recognize the state and its authority, and no other party or authority in such prosecutions, and that the proceedings, are so conducted and the records show it.”
The information in this case meets the requirement of section 9156 of the Revised Codes. It is entitled in the proper court; it is subscribed by the county attorney of the county; it contains the name of the defendant; it alleges that the offense was committed within the jurisdiction of the court at a time prior to the date on which it was filed. It is also in the form prescribed by section 9148, in that it is entitled, ‘ ‘ The State of Montana v. Gr. W. Barry,” and concludes, “contrary to the form, force and effect of the statute in such case made and provided and against the peace and dignity of the state, ’ ’ and is signed officially by the officer whose duty it is under the statute (Rev. Codes, see. 3052), enacted in pursuance of the Constitution (Art. VIII, sec. 19), to prosecute offenses against the state. Moreover, it is alleged that the defendant is accused “in the name and on behalf of the state of Montana. ” We are of opinion that it sufficiently appears from it that the prosecution was instituted and conducted in the name of the state and by its authority.
No brief has been presented on behalf of defendant; but we gather from the record that the trial judge based his ruling upon the case of Independent Pub. Co. v. Lewis and Clarke County, 30 Mont. 83, 75 Pac. 860. The case is not in point. The question before the court was whether the attorney general of the state could lawfully charge a county in which a defendant had been convicted upon a criminal charge with the expense of printing a brief on behalf of the state on appeal to this court. It was held that he had no such authority.
The action of the district court was erroneous. The order is accordingly reversed.
Reversed.
Mb. Justice Smith and Mb. Justice Holloway concur. | [
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] |
MR. JUSTICE STARK
delivered the opinion of the court.
The above actions arose out of a collision between a Nash truck and a locomotive engine hauling a west-bound freight train of the defendant company, which occurred at what is known as the Main Street crossing in Baker, Montana. The truck in question belonged to the plaintiff Stroud. It had a four-wheel drive, four-wheel brakes, the front wheels equipped with chains, and was used by the plaintiff Stroud in trucking and hauling timbers. At the time in question he was employed about the business of the plaintiff Harris. Stroud brought this action for damages to the truck, and Harris brought his action to recover for personal injuries sustained by him.
Except as to the damages claimed, the issues in the two cases were the same, and by stipulation they were tried together in the lower court. In each case the negligence charged against the defendant was the failure to blow the whistle or sound the bell of the locomotive in accordance with the provisions of section 6521, Revised Codes of 1921, as the train approached the crossing.
The answers denied generally the negligence alleged in the complaints, and set up, as affirmative defenses, contributory negligence on the part of the plaintiff in each case. The cases were tried to a jury. At the close of all the evidence, defendant moved for a directed verdict in each case, which was denied. The jury returned a verdict in favor of the plaintiff in each case, upon which judgments were entered. After defendant’s motions for new trials had been overruled, it appealed from the judgments, and the appeals have' been consolidated.
Stated in the light most favorable to plaintiffs’ contentions where they are in dispute, the facts disclosed in .the record are: Main Street of the city of Baker runs north and south, and is 100 feet in width between the sidewalks which extend along either side. The main line track of defendant’s railway crosses this street, running approximately east and west. Immediately north of the main line track, and parallel therewith, are three other tracks which are designated, successively, the passing track, the team track and the house track. The distance from center to center of these tracks is as follows: Main line track to passing track 15' 2", passing track to team track 16' 7", team track to house track 2' 1". The portion of Main Street across these tracks, used as a driveway, is planked. Just north of the house track and east from Main Street there are numerous buildings and structures which cut off a view of the tracks from one approaching Main Street from the east, until he reaches a point near the sidewalk. At the time in question there were some box-cars standing on the house track about - feet east of the crossing, and also a string of box-cars standing on the team track, extending east for a considerable distance, the first one. of which whs about six or eight feet east of the Main Street sidewalk. These cars further obstructed the view of the main track from one crossing from the north until he had gone far enough south to permit his line of vision to pass the southwest corner of the box-car nearest the sidewalk. Plaintiff Harris lived one-half block north of the tracks and one block east of Main Street.
Shortly after 8 o’clock on the morning of January 12, 1924, the two plaintiffs riding on the truck, with Stroud driving, started from the Harris home to cross over to the south side of defendant’s tracks. In doing so they proceeded southwesterly until they reached the east line of Main Street, when they turned to the south, and, entering upon the planked portion thereof, continued in a southerly direction. Both plaintiffs were possessed of good eyesight and hearing. At all times after starting from the Harris house they were both diligent in looking and listening for approaching trains. Neither of them heard a whistle blow or a bell ring, and did not see the west-bound freight train approaching until they reached a point about the middle of the team track. At about this time Harris saw the train and shouted to Stroud, “Hold ’er!” whereupon both plaintiffs reached for the emergency brake, which Stroud set, locking the wheels. At that time the clear distance between the front end of the truck and the point of impact with the locomotive was seventeen feet. When the train came into view, the truck was traveling at the rate of two or three miles per hour, according to Stroud, and at four and one-half miles per hour, according to Harris. The speed of the train was estimated by different witnesses at ten, twelve and twenty-five miles per hour. Harris testified that under normal conditions, setting the brakes so as to lock the wheels would stop the truck “right now,” and Stroud said it would have stopped it within a foot or two. The planking was icy and slippery. When the brakes were applied so as to lock its wheels, instead of stopping “right now” or “within a foot or two,” the truck skidded forward for a distance of seven to ten and one-half feet, and, when it was “practically at a complete stop,” collided with the side of the locomotive near its front end, causing the injuries complained of. Both plaintiffs were familiar with the crossing and knew of its condition. Stroud had driven the truck over it within half an hour before the accident. As the train approached the crossing, it was running down a slight grade; the loco motive was making little noise, and was not emitting smoke or steam.
Defendant’s first specification of error is that the court erred in overruling its motion for a directed verdict in each case, and specifications 3 and 4 are to the effect that the court erred in overruling its motions for new trials on the ground that the evidence was insufficient to justify the verdict, and that it was against the law. These specifications will all be considered together, and may be disposed of in determining (1) whether the testimony showed that the plaintiffs themselves were guilty of negligence which contributed to bringing about the collision and resultant damage, and (2) whether the testimony showed that the injuries and damages sustained hy plaintiffs were proximately caused by the negligence alleged in the complaint.
1. An examination of the testimony fails to convince us that it shows the plaintiffs were guilty of contributory negligence as a matter of law. They were on a public highway, where they had a right to be. The testimony tends to show that they were proceeding with due caution and circumspection; that they were diligently looking and listening for approaching danger; that the truck was traveling at such a low rate of speed that it could be brought to a stop almost instantly; and that they did everything essential to have saved themselves from injury under ordinary normal conditions.
The length of the truck was twenty-one and one-half feet. A mere mathematical computation demonstrates that, from the time plaintiffs crossed the north rail of the house track, which was about thirty-eight feet from the point where their line of vision would pass the line of box-cars on the team track, there was no place where they could have stopped the truck to go ahead and see whether a train was approaching on the main track from the east, without leaving the truck in a position where it would be struck by moving cars on either the home track or the team track.
The testimony was sufficient to warrant a finding that plaintiffs had not been advised of the oncoming train in the manner in which the law requires that they should be warned.
The weakness of the plaintiffs’ case is that they failed to introduce testimony which would have warranted a finding that, if they had been warned, they would have taken earlier steps to have avoided the collision by sooner applying the brakes,_ or not entering upon the crossing until after the train had passed. Instead of making this essential showing, the testimony in the record leads inevitably to the conclusion that the proximate cause of the collision was the icy and slippery condition of the planking on the crossing, which caused the truck to skid forward until it collided with the locomotive. The defendant was not responsible for the condition of the crossing; it did not know of its condition, and was not chargeable with knowledge thereof.
Failure of the defendant to comply with the statute requiring the blowing of the whistle and sounding of the bell on approaching the crossing was negligence per se. (Hunter v. Montana C. Ry. Co., 22 Mont. 525, 57 Pac. 140; De Atley v. Northern Pac. Ry. Co., 42 Mont. 224, 112 Pac. 76.) But the mere fact that defendant was proven negligent did not establish plaintiffs’ right to recover. They were required to go further and show that the defendant’s alleged negligence was the proximate cause of the injuries which they received. (Monson v. La France Copper Co., 39 Mont. 50, 133 Am. St. Rep. 119, 101 Pac. 243.) This proximate cause has many times been defined by this court to be one “which in a natural and continuous sequence, unbroken by any new, independent cause, produces the injury, and without which the injury would not have occurred.” (Mize v. Rocky Mt. Bell Tel. Co., 38 Mont. 521, 129 Am. St. Rep. 659, 16 Ann. Cas. 1189, 100 Pac. 971.)
These rules are so elementary that no citation of authorities should be required to support them; for, as said by Mr. Justice Sanner in Westlake v. Keating Gold Min. Co., 48 Mont. 120, 136 Pac. 38: “It is a rule so fundamental as to be axiomatic * * * that before negligence, however established, can become a basis for recovery, causal connection must be shown between it and the injury complained of.”
The rules defining the duty of one traveling on a highway and approaching a railroad crossing have been considered and declared by this court in a large number of cases, from Hunter v. Montana C. Ry. Co., supra, down to West v. Davis, 71 Mont. 31, 227 Pac. 41, but none of these cases has presented the proposition involved in this one.
In Barrett v. United States R. R. Adm., 196 Iowa, 1143, 194 N. W. 222, the facts were that the driver of an automobile, exercising due care, approached a railway crossing with her machine under such control as to be prepared to stop instantly, and, upon discovering an approaching train which had failed to give warning by blowing the whistle and ringing the bell as required by statute, successfully applied the brakes, but, owing to the presence of ice and snow on the highway, the automobile skidded into contact with the train. It was held that the skidding of the automobile, and not the failure to give the statutory crossing signals, was the proximate cause of the collision; if further appearing that the record would not support a finding that the driver would have applied the brakes sooner had the signals been given, and judgment in favor of the plaintiff was reversed.
Another case of similar import is Hickey v. Missouri Pac. R. R. (C. C. A.), 8 Fed. (2d.) 128, wherein it was held that the railroad company’s negligent failure to give statutory crossing signals was not the proximate cause of a collision with an automobile at a highway crossing, when the driver of the machine was unable to stop the same in time to avoid a collision by reason of ice on the highway, and that there was no liability on the part of the railway company, where there was no testimony showing how far from the place of collision the driver of the automobile would have tried to stop if he had heard any signals from the approaching train.
Under the reasoning of the foregoing cases, which appeals to us as being correct, and upon the record before us, the conclusion seems inevitable that the evidence fails to show a causal connection between the defendant’s failure to give the crossing signals and the collision of the truck with the locomotive, for which reason the plaintiffs failed to prove the negligence alleged in their complaint, and the court should have sustained defendant’s motions for directed verdicts, and erred ip not granting the motions for new trials on that ground.
While counsel for plaintiffs concede that the collision was occasioned by the icy and slippery condition of the crossing which caused the truck to skid, he contends that there was nothing about the icy crossing which would have made it dangerous in the absence of the defendant’s negligence, that it was a condition for which neither party was responsible, and he invokes the rule laid down in Meisner v. City of Dillon, 29 Mont. 116, 74 Pac. 130: “Where two causes contribute to an injury, one of which is directly traceable to the defendant’s negligence, and for the other of which neither party is responsible, the defendant will be held liable, provided the injury would not have been sustained but for such negligence.” But this rule has no application to the facts in this case, because, as above pointed out, there is nothing to show that the alleged negligent act of the defendant in failing to give the crossing signals in any way influenced the plaintiffs’ actions; so it cannot be said on this record that “the injury would not have been sustained but for such negligence.”
Defendant specifies as error the rulings of the court in re- fusing to give to the jury certain instructions offered by it, designated as D-l, D-4, D-6 and D-9. Offered instruction D-l, after stating that the burden was upon the plaintiffs to prove the negligence alleged in their complaints, and that such negligence resulted in damage to them, continued: “The happening of the accident is no evidence of negligence, and shall not be considered by you as indicating negligence.” The court struck out the portion quoted, and gave the instruction as thus modified. The action of the court was right. The portion stricken was not at all applicable to the facts, since plaintiffs had not claimed any presumption of negligence from the mere happening of the accident. While defendant’s exception only went to the action of the court in striking from the offered instruction the Vpart above quoted, the instruction as given was objectionable, in that it failed to point out that the negligence proved must have been the proximate cause of the damage sustained, in order to entitle plaintiff to recover.
Behearing denied February 27, 1926.
Offered instruction D-6 was sufficiently covered by the court’s instruction No. X; while offered instructions D-7 and D-9 were in effect peremptory directions to the jury to return verdicts in favor of the defendant on the ground that plaintiffs were guilty of contributory negligence. There was no error in the court’s refusal to give these instructions.
Offered instruction D-4 was objectionable by reason of the uncertainty as to the antecedent of the pronoun “this” as used therein. However, the jury should have been given the substance thereof. This could have been accomplished by inserting, after the sentence, “It is not always sufficient if he looks and listens,” in the court’s instruction IX, the following, “If the circumstances require it, it is his duty to stop in order to make such looking and listening effective.”
The judgments are reversed and the causes remanded to the district court, with directions to grant the defendant’s motions for new trials.
Reversed and remanded.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Matthews concur. | [
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MR. JUSTICE MATTHEWS
delivered the opinion of the court.
The defendant, John A. Smith, has appealed from the judgment pronounced on his conviction of the crime of giving intoxicating liquor to minors.
The evidence adduced on the trial, briefly stated, is as follows: One Percey Williams testified that on the morning of March 7, 1925, at the request- of defendant, he went from Virginia City to Laurin, where he procured from a person to whom he was directed by defendant, a one-gallon jug of moonshine whisky, placing it in a traveling bag furnished by defendant for that purpose and charging the whisky to defendant, and that, on his return to Virginia City, he was accompanied to defendant’s cabin by one Joe Judge. Both Williams and Judge testified that Williams then delivered the jug to defendant, who opened it, took a drink himself, and gave each of the witnesses a drink and put the jug away; whereupon the witnesses left the cabin. Each of these witnesses testified that he returned to defendant’s cabin in the afternoon, brought no liquor with him, but proceeded to drink with defendant from his supply; that while they were thus engaged, one Robert Allen, a boy seventeen years of age, was seen approaching, whereupon defendant stated that he wanted to see young Allen, and requested Williams to call the boy in. Allen entered in response to the call, and thereafter drank from a bottle sitting on the table. Later defendant requested young Allen to go after one Joe Gillipsie, a youth of twenty years; Gillipsie was brought to the cabin, and the whole party continued drinking. When the first bottle was emptied, a second was produced from the mattress at the foot of defendant’s bed, and when this was emptied defendant took it to a rear room and returned it to the table full of moonshine whisky stating, “There is plenty more of it.” Both boys hecame drunk, and were expelled from the cabin by defendant. After an investigation was instituted, the defendant accused each of the boys of informing against him.
Defendant did not deny the testimony concerning the drinking party, but denied that he, personally, gave liquor to the boys, and denied that he sent Williams for the jug of liquor or instructed him to call young Allen to the cabin; he contended that the liquor belonged to Williams. The defense introduced some evidence as to defendant’s good reputation in the community ; young Allen, then, on rebuttal, told of another occasion when defendant invited him to the cabin and gave him four drinks of moonshine whisky.
Defendant makes bnt two specifications of error, to-wit: (1) The evidence is insufficient to support the judgment, in that there is no evidence tending to connect the defendant with the crime charged, other than that of Percy Williams, an accomplice. (2) The court erred in refusing to instruct the jury, on defendant’s request, to the effect that a defendant cannot be convicted upon the uncorroborated evidence of an accomplice.
1. Defendant’s contention, as to the first assignment, is that, as there is no direct evidence showing that defendant actually handed the liquor to Allen, it devolved upon the state to prove that defendant was the owner of the whisky, and that this proof was furnished from the lips of Williams, an accomplice in procuring the liquor. This argument is fallacious; the procuration of the liquor was an independent transaction, and was closed when Williams left the cabin after delivery to defendant.
There is no intimation that Williams had any knowledge that defendant intended to give any portion of the liquor to minors, and if in fact the defendant did give liquor to a minor, it was immaterial whether, at the time, he was the owner of the liquor so given or was merely entertaining at another’s.expense. The only question for determination was: Did Smith give to a minor? On this question, while no witness testified that defendant handed liquor to young Allen, it was clearly shown that he was the host at a drinking party in his home; he had liquor in his bed as well as on his table, and a main supply in a rear room over which he had dominion and control; for, when the supply on the table was exhausted, he refilled the bottle and replaced it within reach of his- young guests, stating that there was “plenty more of it.” Thus there was sufficient evidence to warrant a verdict of guilty of the crime charged had the man Williams not appeared at the trial at all.
2. With reference to whether Williams was an accomplice of the defendant in giving liquor to young Allen, had the evidence shown that defendant directed Williams to call Allen in for the purpose of giving him a drink and that Williams had
obeyed tbe direction, intending that Allen should join the party, Williams might be equally guilty with defendant and, hence, an accomplice. But, according to the evidence, all that was said by defendant was that he wanted to see Allen, who was then called in by Williams. This testimony falls short of proof constituting Williams an accomplice of the defendant in the commission of the crime charged in the information. “The test to determine whether one is an accomplice is to ascertain whether he could be indicted for the offense for which the accused is being tried” (12 Cyc. 445), or, as was stated by this court, “To constitute a witness for the state an ‘accomplice’ he must have entertained a criminal intent common with that which moved the defendant to commit the crime with which he stood charged, or, not having been present at its commission, must have advised and encouraged it.” (State v. Slothower, 56 Mont. 230, 182 Pac. 270; State ex rel. Webb v. District Court, 37 Mont. 191, 15 Ann. Cas. 743, 95 Pac. 593.) Mere presence, acquiescence or silence, in the absence of a duty to act, is not enough, no matter how reprehensible it may be, to constitute one an accomplice. (1 R. C. L. 157, and cases cited.)
3. Even conceding that Williams was an accomplice, the evidence was amply sufficient to justify a conviction under the well-known rule as to corroboration, to-wit, the corroboration is sufficient if “unaided by the testimony of the accomplice, it tends to connect the defendant with the commission of the offense.” (State v. Bolton, 65 Mont. 74, 212 Pac. 504; State v. Biggs, 45 Mont. 400, 123 Pac. 410; State v. Stevenson, 26 Mont. 332, 67 Pac. 1001.)
4. The question as to whether a witness for the state is an accomplice is — unless such fact is undisputed — for the jury, under proper instruction by the court (State v. Slothower, above), and where the evidence is conflicting or doubtful, either as to this fact or as to corroboration, the court should not invade the province of the jury. (16 C. J. 947.) The instruction requested was merely a general rule of law as to corroboration, based upon section 11988, Revised Codes of 1921, without preliminary instruction as to what constitutes a witness an accomplice, or accompanied by an instruction as to what corroboration would take the case out of the rule. Under the case as made, such an instruction was unnecessary, would have served no good purpose, and might have tended to confuse, rather than to enlighten, the jury, and therefore its refusal did not constitute prejudicial error.
No prejudicial error appearing in the record, the judgment is affirmed.
Affirmed.
Mr. Chief "Justice Callaway and Associate Justices Holloway, Galen and Stark concur. | [
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] |
MR. JUSTICE SMITH
delivered the opinion óf tbe court.
This is a suit in equity, the purpose of which is, in effect, to set aside a sale of 40,983 1/3 shares of the capital stock of the Smith Bros. Sheep Company, made by Napoleon B. Smith, as executor of the last will and testament of William A. Smith, deceased, to John M. Smith in his lifetime, and to obtain an accounting. The plaintiff is a son and one of three heirs at law of William A. Smith, deceased. His two sisters, Annie Maud Kahle, residing in the state of Ohio, and Nellie Mae Moore, a resident of the state of Missouri, are the other heirs at law of their father. A suit, similar to the instant one, was begun in the circuit court of the United States for the district of Montana by Nellie Mae Moore; that court entered a decree in favor of the defendants, which was reversed on appeal by the circuit court of appeals for the ninth circuit, the latter court ordering a decree in favor of the complainant, substantially as prayed for. This cause was tried to the district court of Meagher county, sitting without the aid of a jury. The result was a decree or judgment in favor of the defendants, from which, and an order denying a new trial, the plaintiff has appealed. The action was, by stipulation, submitted to the district court on a printed transcript of the evidence taken in the case of Nellie Mae Moore against the defendants, theretofore heard in the federal court, supplemented by a brief examination of the plaintiff touching the circumstances under which he made settlement with his guardian, John M. Smith, on arriving at his majority. As stated in the brief of counsel for the appellant, “the cause is before this court for determination on identically the same evidence on which it was heard in the circuit court of appeals.” We therefore take the following statement of facts from the opinion in that case (see Moore v. Smith, 182 Fed. 540):
“The record shows that for many years John M. Smith and William A. Smith, who were brothers, were the owners of a large amount of land in the state of Montana, upon which they carried on the sheep, cattle and horse business. At first they managed the business themselves, but in 1890 they organized a corporation under tbe laws of Montana, under the name of Smith Bros. Sheep Company, to which corporation they conveyed all of their property. Each of them was married, and to the wife of each was given 5,000 shares of the capital stock of the company, which amounted to 250,000 shares. The remainder of the stock was divided equally between the brothers. The wife of William A. Smith deserted him in 1891, leaving three small children — the oldest a boy then seven years old, and two younger girls, the older of whom was the complainant in this case and is the appellant here. These children William A. Smith subsequently sent to live with their aunt, a Mrs. Reynolds, in Ohio, who was a sister of the two brothers. Napoleon B. Smith, who was their nephew, was an attorney at law residing at White Sul-phur Springs, Meagher county, Montana, in which county most of the property of the brothers was situated, and in which they both resided. William A. Smith died there on February 13, 1897, and on his deathbed made his will, which was drawn by Napoleon B. Smith, by which will he left all of his estate to his three children and appointed his said nephew executor thereof.
“During the course of his examination as a witness, John M. Smith was asked what, if any request, his brother William made of him in his last illness regarding his children, and answered: ‘A. The last words that he said to me was, “N. B. Smith is my administrator and he will attend to the affairs in that way, and I want you to look after the interests of my children.” Those were the dying words that he said. Q. And did you say you would í A. I said I would, and I have, faithfully. ’ At the time of his death William A. Smith was the owner of 122,950 shares of the stock of the Smith Bros. Sheep Company — John M. Smith then owning a majority of the stock.
“The case shows that John M. Smith was himself then in poor health, as was his wife, and that in consequence he spent much of his time at Pasadena, California, where he was at the time of much of the correspondence hereinafter referred to. Some time after the business was incorporated one McNaught, who was a brother in law of John M. Smith, became manager of the prop erty under the supervision and direction of the latter. The will of William A. Smith was admitted to probate, and Napoleon B. Smith became executor of his estate. After the death of William A. Smith, and because of the age and poor health of John M. Smith, and perhaps from other reasons, both J ohn M. Smith and the executor became desirous of selling the whole property. A sale by John M. Smith of his majority of the stock to a stranger might have worked to the injury of the minority interest of the children of the deceased William A. Smith, so that both John M. Smith and the executor of the estate of William A. Smith became desirous that both interests be sold together. Repeated efforts in that behalf failed of accomplishment.
“On the 23d of November, 1897, McNaught asked for an option of purchase, to run until the end of the year, on all of the property, free of debts, except future payments on certain railroad land contracts, on which application J. M. Smith indorsed this: ‘My figures is two hundred and twenty thousand $220,000 Subject to the approvel of Mary -Smith (wife of John M. Smith) & N. B. Smith to date from Jan 1,1892 time to complete sale about to the 10 of Jan. 1898. J. M. Smith.’ The executor of the estate of William A. Smith indorsed thereon the following: ‘In case a buyer can be found for the property at the amount above stated I will immediately make application to the district court of Meagher county, Montana, to sell the interest of the Estate of W. A. Smith, deceased, in said property at the rate above stated. [Signed] N. B. Smith.’
“The evidence shows that the executor regarded the estimate of John M. Smith as to the value of the property at the time too high, as did others.
‘ ‘ On the 14th of December, 1897, J ohn M. Smith wrote a letter from Martinsdale, Montana, to the executor, which reads in part as follows: ‘N. B. Smith Der Sir & Nefue. * * * Mr. Me-Naught is back from Helena he could not get a party to take hold of the property, but I think the chance will be better next summer I want to sell out so as to go some piase that I can be with my famley & can send Stanley [his son] to school as long as I hold it I can’t be sadesfied away from it & I dont want to sell out & leave the childrens interest in it I think the coming year will be the time to let gow of the intire plant you can at the next turm get a permit to sell wills intrest at anney time that we can get fair value for it then we can go ahead with it when the opertunity Shows up I think it will be well to arange that the text turm of Court I dont think that we will sell much befoar next July or Auges but I dew want to sell as soon as we can to advantage if I was yong I would not cair to sell for it is a good property well managee at what I ask for it. ’
“The record shows that on the 24th day of January, 1898, the judge of the probate court made an order based upon the application of the executor, authorizing him to sell all of the 122,950 shares of the stock of the company belonging to the estate of William A. Smith, deceased, ‘at private sale and without previous notice, provided that said personal property be sold at a sum not less than seventy-five thousand dollars, and may indorse said stock for the purpose of said sale, and may do all other acts and things requisite and necessary to transfer all of the interest of said estate in and to said stock and the property represented by said stock. That said stock be present at the time of said sale, and that said executor present to this court at the next. term thereof after such sale, an account of sale, verified by his affidavit.’
“On the 19th of the following March, John M. Smith wrote a letter from Helena, Montana, to the executor, which is in part as follows:
“ ‘Mr. N. B. Smith Dear Nefue
“ ‘I wish to get the least price that you can exeep for the children stalk [stock] I may have to dew some figuering to sell the Plant & in case I knawed fest how much I could drop and pay all debts it would give me a chance to handel my self what would you give me a opten on the Stock after the debts is payed I think you said the order was for you to sell for $75,000 but we think we can dew better then that I think I can get them 80 or 85000 out it clear for them now can you name enney price that would soat you to give a opchen on so I might have a maregen to mark [work] on think the matter over & let me know.
“‘[Signed] J. M. Smith.’
“On March 25, 1898, the executor replied as follows:
“ ‘Office of N. B. Smith, County Attorney, Meagher County.
“ ‘White Sulphur Springs, Mont., March 25th, 1898.
“ ‘Dear Uncle: Your letter in regard to the stock of the estate came to hand. I have been thinking over the matter. I think rather than see a sale go bye I would be willing to take $85,000 for the stock. I want to do what is fair by the estate and also by you. I want to see a sale go through in some shape, but at the same time I want to do the best I can for the estate. I would want the $85,000 alone for the stock, and the party who gets the stock to pay all the debts of the company, and also that the sheep company cancel whatever debts it might have against the Alice or Blackhawk Mining Companies.
“ ‘Yours truly,
“‘[Signed] N. B. Smith.’
“On July 2, 1898, John M. Smith wrote to the executor as follows:
“ ‘Smiths Ranch July 2 1898.
“ ‘N. B. Smith Dear Nefue
“ ‘I have been figerin Since you laft on this Sheep Sale you know that our Judgment difers as to the value of the property you being willen to take less then would satiesfy me & thaught that you would rether than miss a sail would take $80000 for the pert you represent rether then miss a sail it was on that bases that I made my offer to Me My offer gave me a maregen that would sadesfy me but I dont have a small margen it cuts me down so low that I dont feal sadesfiged if I had made my figers with the intent of giving you the benefit of my Judgment I should have piase my figers higher then I did so you can see that your astemate throwed me off in my calculation & will bring me out with less money then is sadesfactery to me & Mary I told her as you was willing to take less then I thought the stock worth & I was willing to take 80000 that I would have a margin to work on & best my offer acorded now under tbeas circumstances I think you can afoard to take $84000 as your figers estemate 85000 now if I can have a small margen to work on as I don’t know jest what it will take to Squair all debts but I think if I can get yours at 84,000 that I will still have a small margein to work on if this deel goes but I would not be sadesfied to take the offer & devide equel as our Judgment difered as to value I made the offer below what I should have done if I had not had some aserence that you would take 80000 for the interest now if you think you can take 84000 I think that will be very close to to it if the sail goes if you cant aford to take that Mary may not sell her stock & and that will spoil the sale if enny can be made atall. let me know at onse So I cam calculat aeorden.
“ ‘Your uncel,
“ ‘JOHN M. Smith.
“ ‘If we dont sell this time we may get that much.’
“December 30, 1898, came without the effecting of any sale, although strenuous efforts in that behalf were made by John M. Smith (to one Miles, among others) as well as by MeNaught. On the day last mentioned Henry Neill made to the executor the cash offer of $80,000 for the stock belonging to the estate. The next day the executor wrote to John M. Smith this letter:
“ ‘Office of N. B. Smith, County Attorney, Meagher County,
“ ‘White Sulphur Springs, Mont., Dee. 31st, 1898.
“ ‘Dear Uncle: Neill of Helena was in to see me yesterday in regard to the ranch property. He wanted an option on my interest. I told him I could not give it at this time as I had let you have an option. If you are figuring on Miles making a trade I think you had better look for other parties. Neill thinks he can sell the property. I am very anxious to do something with the property as I feel that the estate is going to lose money by holding it. Heitman and Danzer have a large number of sheep feeding in east and it is the prevailing opinion of those who know that they will lose from 50 cents to a dollar a head on the transaction. Neill said he would make me a cash offer of $80,000 for the estate’s interest in the property. If you will make me a cash offer of $85,000 you can have tbe property. I told Neill I would not make such an offer. McNaught writes me that you now owe the company $13,839.35, and that the company will have to commence borrowing money. If you do not take the stock it would be your duty to put your note in to the company- for the amount so that the company could raise the money on the same to carry on the business. Under our law the only money can be drawn out of a company by a stockholder is by declaring so much dividend on each share of stock. I do not make the suggestion to hurt your feelings, but you know yourself that such large transaction should not be carried on in such a loose way. Please let let me hear from you in the matter. We are all well. I wish you all a happy new year. I got a letter from Barnes at your place. Give all the Montana people my best regards.
“ ‘Your nephew,’
“On the 14th of January, 1899, John M. Smith wrote to Mr. George L. Ramsey, cashier of the Union Bank & Trust Company, Helena, Montana, this letter:
“ ‘Pasadena, Cal., Jan. 14, 1899. '
“ ‘Mr. George L. Ramsey Helena Mont.
“ ‘Would your bank lone ninty thousand dollars to me a& take the entire stock of the Smith Bros Sheep Co as security. I consider it gilt edge I am about to buy the estates intrest I will onley want it ontell I can make a sale of the property perheps 4 or 5 months Wire me your lowest rate of intrest & if I can get it wire at my expense all the compny owes is the $2000 — that I sent the Note for the othr day,
“ ‘Yeus Truly
“ ‘ J. M. Smith.’
“Two days thereafter, to-wit, January 16, 1899, John M. Smith wrote from Pasadena, California, to the executor at White Sulphur Springs, Montana, as follows:
“‘N. B. Smith Dear Nefue W. S Springs I wired you that I would except y-our offer for the Stock of the Sheep plant be-loning to the children I have not herd from Miles yet if he makes a raise I will pay you the $90000 if he fails I will give- you tbe $85000 that you aske you of corse would put it in goveoment bonds if you had it now to make things safe & you be absolutly safe I will give you all of the Sheep Company Stock to hold as security for the payment of the $85000 & I will pay the same interst that you would get on Gov bonds & pay you 3 times per year ontill I can sell out to advantage then you will be safe & if enny one is looser it will be me & I am willing to take the chances they never will be a time but what the hole business will bee the best security for that amount but I dont intend to hold it very long at enny time that I can make a good sale I will pay off your $85000 I think this the best way for us to close up business I intend never to run less than 40000 head of sheep on the ranch as long as I have ennything to dow with it by you holding all the stock as Security no one could com in ontill your Note is payed first I never tried to get in debt much enny more as I intend to keep close payed up all land payments & Taxes & keep the Smith Bros Sheep Co Cr as good as has always bin you can get up the papers so you ar safe & at the same time gives me a chance to handel my self to advantage f if Miles fails you & Mac can fix things so that I will not have to come ontill Apr or May or may you can send the Papers down hear for I and Mary to signe I will pay all revenewe Stamps requires I don’t think you will have to pay taxes on the $85000 while it is repsented by the Smith Bros Sheep Co Stok as I have to pay on all the property if you did have to pay taxes I will agree to pay it for you So it will leave it just the same as gov bonds now I hope you will consider this & after Feb the first proceed to fix up the papers or soaner if you wish I could borrow the money of the Bank at Helena by giving the sae seciorty but I would soaner deel with you & you ar jest as safe as tho you had gov bonds let me hear from you at once & oblige
“ ‘Your uneel John.’
“On the same day, to-wit, January 16,1899, the executor wrote from White Sulphur Springs, Montana, to John M. Smith at Pasadena, California, the following letter;
“ ‘Office of N. B. Smith, County Attorney, Meagher County,
“ ‘White Sulphur Springs, Mont., Jan. 16, 1899.
“ ‘John M. Smith, Pasadena, Cal.
“ ‘Dear Uncle: Your telegram came to hand in which you said you would take the stock. I want a clear understanding with you, so that there may be no hereafter in the matter. It is understood that I am to get $85,000 for the stock and the estate is to have that and not owe the Company anything for money advanced for uncle Bill’s estate. Mack wrote me the other day about the four hundred dollars you were to pay, but I will make no claim as to that if you take the property at the above figure You had better pay a portion down and then I will make the return to the court, and if the court approves the sale, of which I have no doubt, I will want the remainder of the money. Píese let me hear from you at once in the matter.
“ ‘Yours truly,
“ ‘N. B. Smith/
“The record shows that on the 20th of January, 1899, the executor wrote to John M. Smith a letter which in some way disappeared, and is not produced. Before it could have been received at Pasadena, Cal., John M. Smith wrote from that place to the executor this letter:
“ ‘Pasadena, Cal. Jan 22 1899.
“ ‘N. B. Smith Dear Nefue I received yours of the 16 in reply to my telegram, I had written 2 letters that you have no dout receved befoar this in which I asked turms but have not herd from either yet it dont look as tho Miles is going to make a deel. I now will ask you the amount you wish me to pay down on the property & what interst you want on the balence I will take the astates Stock at $85000 and no claim on the astate for enny money advanced it at enny time tell me the least you will take as a down payment & what time you will give on the balence & what interst ontill payed & you hold all the property as securty I made you a propersition in my last but don’t know how it will soat you pleas give me yours best turms as soan as you get this and I will arange to meet it on the $85000 bases Yours Truly Yonr uncle John. I think the coart will aprove of the security & offer for the balence I know your Bondsman would I dont think that it will take me longer then May the first to make some turn So I will get the balance for you. ’
“On the 21st of January, 1899, Mr. Ramsey, cashier of the Union Bank & Trust Company, of Helena, Montana, wrote this letter to John M. Smith:
“ ‘Mr. J. M. Smith, Pasadena, California,
“ ‘Dear Sir: In response to your favor of the 14th, we have wired you to-day that we would make the loan of $90,000 at 9% interest. We suggest in the telegram, however, that the offer to make would be based upon whether or not you should use the money at once. Unless you could take it light away, we would not, of course, want to carry so large a sum here for any particular length of time, awaiting investment. I really hope you will be able to use it. If you have not telegraphed us at the time this letter reaches you of your conclusion as to whether or not you can use the money, we want to ask you to do so, as the loan is a large one and we might have to loan the funds elsewhere, which we would not do, in anticipation of your possible call for these funds. Yours respectfully, George L. Ramsey, Cashier.’
“That John M. Smith replied by wire to the letter last quoted that he did not want the money is shown by this letter from Ramsey of date January 28th, 1899:
“ ‘January 28, 1899.
“ ‘Mr. John M. Smith, Pasadena, Cal.
“ ‘Dear Sir: We now have your telegram reading: ‘Do not want money, ’ which is interpreted to mean that you are not in a position to use the money just at the present time. But that you may possibly desire to later. If our surmise is correct, I beg to advise you that we will be glad to figure with you whenever you are ready; but we would not of course want to promise so large an amount of money at any time in the future as it is a considerable sum and we may have to invest it elsewhere. Just at this time we would be very glad to make the loan and .it is possible we may be in the same position whenever you get ready.
“ ‘Tour respectfully,
“ ‘George L. Ramsey,
“ ‘Cashier,’
“January 24, 1899, the executor wrote to John M. Smith at Pasadena, California, as follows:
“ ‘N. B. Smith, County Attorney, Meagher County,
“ ‘White Sulphur Springs, Mont., Jan. 24, 1899.
“ ‘J. M. Smith, Pasadena, California.
“ ‘Dear Uncle: Tour letter of the 16th of Jan. came to hand. I cannot sell the way you indicated. The only way I can sell is for cash down. If you are appointed guardian of the children then I could turn the money over to you. As I told you all the time I have no right to sell on credit. Tou had better forward me a draft for ten thousand and then I will file the petition, and on the approval of sale by the court the balance can be paid. The offer that I had was a cash down offer. If you but [buy] the stock the company can run on just the same and I can act as one of the trustees as I have some stock in my own name. Give my love to all.
“ ‘Tours, etc.’
“Before the letter last quoted could have been received, John M. Smith wrote from Pasadena to the executor as follows:
“ ‘Pasadena, Cal. Jan. 27.
“‘N. B. Smith:
“ ‘Dear Nefue: I receved yous of the 20 & I think your plan good I will take steps to get the ten thousend down payment & we will proceed to business at once I will write to the Bank & arange for the money if you have me appointed garden for the Children as soon as I sell out I uou & [‘Wan to,’ according to original exhibit] invest in Gove bonds all thair money and also my one as I dont intend to try to dew enny buisness after I sell out & I fully intend to let goew this spring I think your sugjes tion a good one I think I should have the children come out hear the schools is first elas & the climat is good also good society.
“ ‘Yous Truely
“ ‘ J. M. Smith.
“ ‘will wright agane soon.’
“On the same day, to-wit, January 27, 1899, John M. Smith wrote from Pasadena, California, to Ramsey, this letter:
“ ‘Pasadena, Cal Jan 27, 99.
“‘GL Ramsey Helena Mont
“ ‘I received yours of the 23 in regard to the mony I did not want it all at onse. I received a letter today from the admines-trator & now I am in shape to use ten thousand of the money at once. I wish the lone for 6 months with the understanding that I have the privilege of paying it at enny time I can befour it is dew intrest to be at the same for what time I have used the money. You understand I want the money to make a payment on the estate of my brother the money will be turned ovr to the adminestrator N B Smith at White Sulphur Springes, if you will you can make out a Note for ten thousand & send it hear to me I will signe & retem then I will turn it over to the admnes-tratr & close a deel then I will be the eentier oner of the Smith Bros Sheep Co
“ ‘Yous respctfuly
“ ‘J. M. Smith.’
“Four days thereafter, to-wit, January 31, 1899, John M. Smith wrote to Ramsey as follows:
“ ‘Pasadena Cal Jan 31 1899
“ ‘George L Ramsey Helena
“ ‘Sir: I have taken the liberty of drawing a cheek on your Bank for ten thousend Dollars $10,000 — in favor of N. B. Smith of White Sulphr Springes the adminestratr of my Brothers astate I dont think that the money will be caled for onley plast to his cr. I inclose his letter so you can se how we intend to manage so that I don’t think we will have to call for enny of the money will leave it as a creddet for .when I am apointed gardeen of the children I will turn it all back to the Bank and pay what intrest has acrued for-what time we have the money, hoping this will' meat your aprovel I wrote you a letter a few days ago asking you to forward me a Note for $10,000 — for me to signe but I have not reeeved it yet hoping you can favor me with my request & oblige.
“ ‘ J. M. Smith.'
“On the 2d of February, 1899, Ramsey wrote to John M. Smith as follows:
“ ‘Mr. John M. Smith, Pasadena, California.
“ ‘Dear Sir: We enclose you herewith a blank note for $10,000, sent agreeable to your favor of the 27th, drawn for six months, with the understanding that you shall have the privilege of taking it up at any time prior to maturity if you like, interest to-be charged only for the actual time the money is in use. I also-inclose several blank notes, which can be filled up by you at any time the money is needed. With regards, I am,
“ ‘Yours respectfully,
“ ‘George L. Ramsey,
“ ‘Cashier/
“On February 6, 1899, Ramsey wrote to John M. Smith as follows :
“ ‘Mr. J. M. Smith, Pasadena, California.
“ ‘Dear Sir: We now receive y-our letter of January 1st [31st] and beg to advise that we shall have pleasure in honoring your check for $10,000, when it shall be presented. We return herewith letter from N. B. Smith. With regards, I am “ ‘Yours respectfully,
“ ‘GeoRge L. Ramsey,
“ ‘Cashier/
“On February 6th Ramsey also wrote to N. B. Smith this letter:
“ ‘Union Bank & Trust Company of Montana.
“ ‘Helena, Feb. 6, 1899.
‘ ' ‘Mr N. B. Smith, White Sulphur Springs.
“ ‘Dear Sir: Receiving a letter to-day from Mr. J. M. Smith, advising that he had drawn on us for $10,000 in your favor, and this letter indicating that he would probably draw further checks, I am lead to suggest that we would be very happy indeed to serve you as a depository, for all or a part of the proceeds of the check, if it is in your plans to leave it on deposit.
“ ‘Yours respectfully,
“ ‘ GeoRge L. Ramsey,
“ ‘Cashier.’
“On the 8th of February, 1899, John M. Smith wrote to Ramsey as follows:
“ ‘Pasadena Cal Feh 8 1899.
“‘CL Ramsey yours of the 2 came to hand last night I hear sign & return Note. When I am ealed on for the balence I will fill out & send on Notes to cover the balence of the perches. I dont think that one dollar of it will be ealed for except as a credet as you saw in my last letter the way N B Smith perposes to dew with me Many thanks for your acomedation
“ ‘Yours Truely
“ ‘John M. Smith.’
‘ ‘ On the same day, to-wit, February 8,1899, the executor wrote from White Sulphur Springs, Montana, to the Union Bank & Trust Company, as follows:
“ ‘White Sulphur Springs, Mont., Feb. 8th, 1899.
“ ‘Union Bank & Trust Co., Helena, Mont.
“ ‘Gentlemen: I don’t know yet what disposition I will make of the money that J. M. Smith will place to my credit. I would want a certificate of deposit payable on demand. If my Mr. Smith is appointed guardian this money will be turned back to him. I will make no arrangements about the money at this time as I want to get the estate settled up as soon as possible.
“.‘Yours truly,
“ ‘N. B. Smith.’
“On February 10, 1899, a certificate of deposit for $10,000 was issued by the Union Bank & Trust Company, and sent to the executor, with a letter of that date in which the bank said: ‘We are this morning placed in possession of your favor of the 8th instant and having instructions from the First National Bank of White Sulphur Springs to send you certificate of deposit for J. M. Smith’s check of $10,000, we are now having pleasure in handing you same herewith. We note that you do not care to make any arrangements about the money at this time, as it is your desire to get the estate settled as soon as possible.’
“On February 12,1899, the executor wrote to the Union Bank .& Trust Company this letter:
“ ‘White Sulphur Springs, Mont., Feb. 12, 1899.
“ ‘Union Bank & Trust Co., Helena, Montana.
“ ‘Gentlemen: Your favor of the 10th enclosing draft for $100000 [$10,000] came to hand. I am much obliged to you for your kindness in the matter. I presume I will leave the money with you for the present, as I have no use for it. If my uncle is appointed guardian of the children, then in that case, the money will all be turned back to him as guardian. I think I can wind up the estate within three months. I shall be pleased to meet you when I come to Helena which may be some time in this month.
“ ‘Very respectfully,
“ ‘N. B. Smith.'
“The executor proceeded to make application for the confirmation of the sale of the stock, and engaged, in behalf of John M. Smith, an attorney named Waterman to make application for the appointment of John M. Smith .as guardian of the children, the return of sale being filed with the court by the executor on the 20th of February, 1899, and three days thereafter, to-wit, February 23, John M. Smith’s application for his appointment as guardian of the children was filed by Max Waterman as his attorney. On that same day, to-wit, February 23, 1899, the executor wrote to Mrs. Beynolds this letter:
“ ‘Office of N. B. Smith, County Attorney, Meagher County,
“ ‘White Sulphur Springs, Mont., Feb. 23, 1899.
“ ‘Dear Aunt: Uncle John intends to apply to be the permanent guardian of the children. I presume you will be notified in the matter. Under our law a child that is fourteen years of age can appoint his own guardian. I think Willie is about that age. If be is that old he can appoint who he wants and the court will confirm the appointment. Under our law a guardian has to be appointed so that the estate can be distributed. The estate will have to go into the hands of a guardian so that it can be invested in bonds. Uncle John’s address is 481 Eldorado Street, Pasadena, California. He will have to give a bond to the amount of about ninety thousand dollars. 1 don’t think he will make any change in the case of the children, and he can’t make any change after the children become 14 years of age for then they can appoint their own guardian. I thought it my duty to mention the fact to you so that you might understand the proceedings and why they were taken. You see I will have the eighty-five thousand dollars, and the same must be invested which I could not well do as executor. It was uncle Will’s desire that you should look after the children and that desire will no doubt be carried out. I have explained fully because I thought you might worry in the matter. If you have any suggestion to offer would like to hear from you in the matter. Give my love to the children.
“ ‘Yours etc.
*“N. B. Smith.*
“Onthe 1st day of March, 1899, John M. Smith wrote from Pasadena, California, to Mr. Ramsey at Helena, Montana, as follows:
“ ‘Pasadena, Cal., March 1, 1899.
“ ‘George L Remsey Helena Mont. If enny one deposets $5000 — to my cr for a option Wire me at once at my expen 481 El Dorado St Pasadena Cal. I cant say jest when I will be cald to turn over the other $75000 — on the Ranch Deele. the Money will not be drawed out of the Bank but left as a cr to the adminestrater N B Smith as soon as I am appointed gerdean the money will be turne back to me I pay intrest for what time I have it. Will I have to send my note or can you pay my check by Cr to N B Smith for the amout & he leave it in the bank & transfer it back to me.
“ ‘Yous Tuely
“ ‘J. M. Smith.*
“March 10, 1899, the Union Bank & Trust Company wrote to N. B. Smith this letter:
“ ‘Union Bank & Trust Company.
“ ‘Helena, March 10, 1899.
“ ‘Mr. N. B. Smith, White Sulphur Springs.
“ ‘Dear Sir: As you are perhaps aware, we had made arrangements with Mr. John M. Smith to advance him the sum necessary to purchase the the estate’s half interest in the Company. He writes us by letter received to-day, as follows: ‘I can’t say just when I will be called to turn over the other $75,000 on the ranch deal.’ The amount to be advanced on this transaction is a large one, and we like to figure ahead a little bit, so that we may calculate at all times upon the amounts which we have arranged to advance to our several customers, and I am going to take the liberty of inquiring whether you can tell us at this time about when the balance will be called for, so that we can figure accordingly. We felt quite a bit complimented at your making us your depository for the payment that has already been made by Mr. Smith, and I assure you we will be happy to serve yon in the future as well.
“ ‘Tours respectfully,
“ ‘George L. Ramsey,
“ ‘Cashier.’
“On the 28th of March, 1899, the sale of the stock to John M. Smith was confirmed, and the order of confirmation signed and filed. On the same day, to-wit, March 28, 1899, John M. Smith, who was then in California, was appointed guardian of the persons and estates of the minors, the order made and filed reciting due notice of the application, and directing ‘that letters of guardianship of the persons and estates of said minors be issued to him upon his giving a bond to each of said minors in the penal sum of thirty thousand dollars, and upon his taking and subscribing the oath according to law. ’
“On the 18th of April, 1899, John M. Smith wrote from Pasadena, California, to Mr. Ramsey at Helena, Montana, as follows:
“ ‘Pasadena, Cal Apr 1899
‘Mr. G. L. Ramsey Helena Mont
“ ‘I will be in Helena about the 18 of May. I leave hear the 13 then I will be redey to straten out business sadsfaetry I hopw I will have MvNaught send the Stock over to the Bank so it will be thair when I get back I will have N B Smith meet me in Helena & then we can fix up every thing sadesfactory I drew a check to N B Smith for $75,000 — but I dont think he will Send it in ontill I get back.
“ ‘Yous Truely
“ ‘J. M. Smith.’
“April 24, 1899, the bank replied to John M. Smith by letter, saying: ‘We are ready to honor your check for $75,000 when Mr. N. B. presents the same.’
“On the 27th of April, 1899, a four months note for $75,000 of John M. Smith, bearing 9 per cent interest, was cashed by the Union Bank & Trust Company, and the proceeds put to his credit, with which the bank paid the $75,000 check which John M. Smith had given upon it to the executor, and which was by the executor indorsed, such payment being then charged by the Bank & Trust Company to John M. Smith’s account. The before mentioned $10,000 certificate of deposit was at the same time surrendered by the executor, who took from the Bank & Trust Company a certificate of deposit to his order for $80,000 and deposited $5,000 of the amounts mentioned to his personal credit; $2,161.49 of which he paid himself as due him ‘on the sale of the property,’ and the balance to other persons and for other purposes.
‘ ‘ On the 28th of April, 1899, John M. Smith wrote from Long Beach, California, to the executor, this letter:
“ ‘Long Beach, Cal., Apr. 28,1899.
“ ‘N. B. Smith:
“ ‘Dear Nefue I return Pour of atorney [appointing N. B. Smith John M. Smith’s attorney in fact] with instictions to indors the stock that I bought of you to the union Bank as col-atral security for the payment of the $10,000 & $75,000 nots now in the bank. ■ I am booked to leave hear the 13 of May for Helena will arrive about the 17 or 18 & want you to meat me in Helena at that time if I should deside to make it later I will wire you to that afect. * * *
“ ‘Tors Truly our love to orseal
“*J M S.’
“John M. Smith returned to Montana from California on the 18th of May, 1899, and on the 25th of the same month executed his bond as guardian and took the oath of office and filed them with the court. June 1, 1899, the executor filed the final account of his administration of the estate of William A. Smith, and on the 12th of June of the same year a decree settling the account and distributing the estate was signed and on the 14th of June, 1899, placed upon file, the decree providing, among other things: ‘ That the said executor shall be finally discharged from his duties as such executor upon his filing a receipt for the residue of said personal property duly signed by John M. Smith as guardian of William Smith, Nellie Mae Smith, and Annie Maud Smith, minor children of said deceased, and upon the filing of such receipt his bondsmen as such executor shall be discharged.’
“On the same day, to-wit, June 14, 1899, the executor paid the entire amount in his hands over to the guardian, John M. Smith, and took his receipt therefor as such guardian, whereupon an order of final discharge of the executor was signed and filed. John M.. Smith thereupon went to Helena, Montana, and on the 17th of June, 1899, there used the money of his wards so received by him in discharging his indebtedness to that bank, as far as it would go, giving a new note to the bank for the balance due it from him. John M. Smith was questioned in respect to that matter when upon the stand as a witness in this cause, and gave this testimony:
“ ‘Q. Mr. Smith, I believe you said this morning, that you had used the money turned over to you by Mr. N. B. Smith when you were appointed guardian, to pay your notes at the bank?
A. I did.
“ ‘Q. Was the money cash that he turned over to you, or was it certificates of deposit? A. It was a certificate of deposit; it wasn’t counted out as cash, but it was a credit certificate of deposit that he turned over to me when I qualified as guardian, he turned it over to me as administrator. I done business with the bank here, and I will refer to them. I cannot remember just about how it was done at the time, but I will refer you to the bank and Geo. L. Ramsey; they are better authority than my memory is, a great deal.
“ ‘Q. I will state, Mr. Smith, for your information, that these two certificates of deposit were produced here by the bank officers. A. The certificates of deposit were turned over to me as guardian of the children of William Smith by the administrator.
“ ‘Q. And you turned them into the bank in payment of your note? A.. I thought I had a right to.
“ ‘Q. But you did? A. I did, I thought I had a right to, because I gave security for the amount.
“ ‘Q. Did you understand when you did that that you were using money of minors for your own purposes? A. I understood I was using it, and that I had a right to; I didn’t talk with anyone about it.
“ ‘Q. You thought that you had a right to take the money of minors and use it to pay your debts? A. As I had given sécurity for that money, it was the same as though it was in my possession.
“ ‘ Q. Do you understand that you, as a guardian, had the right to use guardianship money, the money of minors, to pay your own debts and for your own personal account? A. I may have made a mistake, but I didn’t do it with the intention of defrauding anybody; I might have made a mistake.
“ ‘Q. But you knew what you were doing? A. I knew I was paying off my indebtedness.
“ ‘Q. And using the money of minors? A. The money that was given security for.
“‘Q. Without asking anybody’s permission? A. Without asking anybody’s permission.
“ ‘Q. Without consulting anybody? A. I didn’t do it with the intention of defrauding anybody, and if I have wronged anybody in any way I am willing to make it right.
“ ‘Q. Was it your view at that time that you as guardian had a right to do such a thing? A. I thought this way: that it was just the same as if I put it in government bonds if I paid the same interest. I acknowledge it may have been wrong, but I didn’t do it with the intention of defrauding anybody. I paid off my note, and that is the condition of things just as they were. ’
“N. B. Smith, the executor, testified that he did not know until the fall of 1899 what use the guardian had made of his wards’ money; that ‘in October, or before October,’ 1899, the guardian told him. He also testified in answer to the question, ‘Did you-report the fact to the judge of the court .that the money you had given to John M. Smith, turned over to him as guardian, had been used by him to pay off his own debts?’ ‘I nlade no such report whatever.’
“On the 20th of November, 1899, N. B. Smith wrote to Mrs. Reynolds this letter:
“ ‘Office of N. B. Smith, County Attorney, Meagher county.
“ ‘White Sulphur Springs, Mont. Nov. 20, 1899.
“ ‘Mrs. D. B. Reynolds, Fayette, Ohio.
“ ‘My Dear Aunt: Enclosed-find draft for four charges for looking after and caring for the minor children of uncle Bill, until December 1, 1899. Please sign the enclosed receipt. In regard to uncle John buying the stock will say that he borrowed the money from a bank in Helena to buy the stock. I would not let him have the stock until he had actually paid me the money. I had the money in my name in the bank until I was finally discharged from my trust. When I made my final account I showed the judge my draft, and my bank account subject to cheek. I turned over to him the money and took his receipt for the same, and filed the same in court and the same is now a matter of record. The Union Bank & Trust Company furnished bis bond and same is perfectly good. He bas to pay tbe bank quite a sum of money for furnishing tbe same. I think be bas to pay about three hundred dollars a year for his bond. Tbe judge and uncle John and I talked over tbe matter of tbe use of tbe money, and the understanding was that be should pay four per cent for tbe use of the money until such time as it should be invested in bonds. That is better than we could do with government bonds, and as long as tbe Union Bank & Trust Company is bis surety the same is perfectly safe. Nothing has been said as to the compensation that the court will allow him. I think tbe compensation would be arrived at in this way, be would be allowed his actual expenses in looking after the children, and a reasonable amount for what time spent in looking after the children and their estate, and the costs connected with the court procedure. In cases of administrators the law fixes the compensation at a certain per cent, based on the value of the estate. I don’t think the court would fix his compensation at anything unreasonable. Uncle Bill reposed confidence in me and I think I did the best thing for his children that could have been done in making the sale. Before making the sale I talked with the best business men of the county in relation to the matter, and not one but what told me to close the sale as I had made a great deal. Although I am no longer administrator, yet I shall always look after their interests. * * *
“ ‘Tour nephew.’
“Both John M. Smith and N. B. Smith gave some testimony tending to show that in 1899 the former had some talk with the judge of the court in which the guardianship matter was pending, about his (John M. Smith’s) using the money of the minors and paying interest on it at the rate of four per cent per annum.
“In December, 1900, this order was made and entered in the matter of tbe estate and guardianship of tbe minors:
“ ‘Probate Minutes, December, 1900.
“ ‘Tuesday, the Eleventh day of December, 1900.
“ ‘255.
“ ‘Estate and Guardianship of ¥m. Smith et al., Minors.
“ ‘Mas Waterman, counsel for guardianship, asked to have his name withdrawn as counsel in the case. N. B. Smith asked to have his name entered as counsel instead of the Max Waterman’s. John M. Smith, the guardian of said minors, having made application to the court for an order authorizing him to borrow the funds in his hands belonging to said minors amounting to the sum of about $82,000 at the rate of three per cent per annum. The court being fully advised in the premises: It is ordered that said guardian be authorized to borrow said sum of $82,000 at the rate of 3% per annum, and to so hold the same at said interest until the further order of this court. ’
“N. B. testified that he did not procure this order to be made, and did not know of it at the time. He admits in his testimony that he thereafter acted as the attorney for the guardian, and prepared the final account of the latter in which the wards were charged for the money paid by the guardian to the surety company for going on his bond as guardian, and in which also the guardian was charged interest on the money of the wards only from December 11, 1900, and at the rate of three per cent per annum, but claims that, as respects the interest, his doing so was an inadvertent mistake.
“In regard to his guardianship attorney John M. Smith was questioned and answered as follows:
“ ‘Q. Who was your lawyer in the guardianship matters? A. Waterman for about a year and a half or two years. I forget about it, but Waterman acted as my attorney.
“ ‘Q. Max Waterman, of White Sulphur Springs? A. Yes, he used to assist me about court matters and get the accounts in and accepted. I didn’t know anything about the business myself. Badger made out some first of it, and Waterman acted later on, and after that I had N. B. Smith. He was fairly con versant with everything, and I knew he would do the square business by all the parties concerned and so I got him after that — after Waterman.’
“And there is in the record this letter from John M. Smith to Mr. Ramsey, of date October 15, 1900;
“ ‘Martindale, Mont. Oct 15 1890 [1900]
“ ‘Geo L Ramsey Helena I have sent to the Springs to have N. B. Smith fill out my report as Gardien of Brother William he is my attorney & Keeps My aeonnts it will be in in a few days as filed in caar.
“ ‘Tour treuly
“ ‘ J. M. Smith.’
“The appellant was but ten years old when the stock was sold, and became eighteen on the 27th of August, 1906. On the 5th of November of the same year her guardian paid her the amount shown to be due her by his final account, which had been approved by the probate court.
“In the deposition of the complainant which was introduced on the trial of the cause, she was asked, among other things, what information she had regarding the sale of the stock, when her guardian settled with her in November, 1906, to which interrogatory she answered: ‘I knew that the sale had been made, of course, and I knew that uncle John had been the purchaser— that is all I knew. I knew nothing about the stock company or the incorporation of the company. I received my money, and that was all I knew about it — what he gave me.’ Being asked what knowledge she had at that time regarding the method, validity and good faith of the sale of the stock, she answered: ‘I had no knowledge of its method, its validity, or of its good faith, and knew nothing about their intentions. ’ In response to the interrogatory, ‘What was told you by your uncle, John M. Smith, or your cousin, Napoleon B. Smith, the above-named defendants, about your affairs, and particularly about the sale of said stock?’ she answered: ‘Nothing was told me by either John M. Smith, or Napoleon B. Smith, concerning the estate in any way — unless I asked it directly, and I never talked to “Poly” about my affairs very much, but I have spoken to Uncle John— he always avoided me or would talk in an indirect way, and I knew no more when I finished than when I begun. He didn’t seem to care about discussing it very much — he didn’t want me to think much about it. I once asked him about the difference between his estate and ours and why he had more than we had, and he said, “Papa owed large sums of money when he died, and they had to be paid off.” I also spoke about the three per cent which was paid us on our money, and asked him why he didn’t give us more — he said, “It was all he could afford.” “Poly” never told me anything at all, except what we had, and in fact intimating that we ought to be thankful for what we got.’
“Both John M. Smith and N. B. Smith were questioned in respect to conversations they had with the complainant. John M. Smith gave this testimony:
“ ‘Q. Do you remember when the complainant in this suit came out to the ranch at the time of the settlement? A. I don’t remember the date, but it was in August, I think.
“ ‘Q. Of what year? A. The 27th of August.
“ ‘Q. Of what year, I said? A. 1906.
“ ‘Q. About how long was she there? A. Well, she wasn’t there long. I can’t remember, but it wasn’t but a few days.
“ ‘Q. What occurred in her matters while she was there? A. N. B. Smith, I think was down there, and was talking about her loaning money. There was a party wanted to borrow the money.
“ ‘Q. Was there any settlement made with her? A. The settlement wasn’t made at the ranch.
“ ‘ Q. Where was it made ? A. At White Sulphur Springs.
“‘Q. Was it made that year? A. Yes, sir. I wasn’t present at the settlement. N. B. Smith done the entire business, he and the court, as I recollect it.
“ ‘Q. Do you recall any talk when N. B. Smith was down at the ranch and the complainant was down at the ranch, about her affairs? A. I cannot recall just what it was, no. They had some talk, but I cannot—
“ ‘Q. Where did they have it? A. In the office.
“ ‘Q. Who was present? A. I don’t know as I could say exactly who was present.
“ ‘Q. Was the complainant present? A. The complainant was present.
“ ‘Q. Was N. B. Smith present? A. N. B. Smith and myself.
“ ‘Q. Were you present? A. Yes, sir, and I think Mr. Flatt and I think probably my wife was. I don’t know whether she was or not. I know at the time she was there it was talked over, but I can’t recall the conversation.
“ ‘Q. What was talked over — what was it about generally? A. It was talked about what was best for her to do with the money, as near as I can remember.
“ ‘Q. Was there any talk about the matter of your purchase of the stock of the company? A. I don’t remember that that was talked over, but it might have been; I don’t remember.
“ ‘Q. Was there any explanation given her of her matters and how the results and amounts due her were arrived at? A. I think that N. B. Smith gave her full information in regard to it. I think so, as near as I remember, but I cannot recall what it was.’
“N. B. Smith was also questioned in respect to the same matter, and also in respect to a visit of the complainant to Montana in 1904, when she was about sixteen years old, as follows:
“ ‘Q. Do you recall when the plaintiff came out to Helena in 1901? A. Yes, sir; I recall when she came out here.
“ ‘Q. Where did she stop, if she stayed at all in White Sul-phur Springs? A. Well, she stopped with us a few days.
“ ‘Q. At your home? A. Yes, sir, at our home.
“ ‘Q. With yourself and wife? A. With myself and wife.
“ ‘Q. And during that time, was any explanation given to her of these matters about which you have been testifying? A. Yes, sir.
“ ‘Q. What was done in that regard, you may tell. A. I showed her the final account of myself as trustee or executor, as in my letter, I invited her to come out here, that was in 1903. I also showed her the annual account. I said I would be glad to explain the affairs of the estate to her, that I was fixing up the annual account as guardian and she was there at the time, and when I was at the courthouse I got the final account and the annual account as executor and showed them to her.
“ ‘Q. Where were you when you showed them to her? A. I was there in my office at the little room at the north — there is two rooms to the office.
“ ‘You said as you had invited her in your letter? A. Yes, sir, in my letter I had invited her.
“ ‘Q. What letter did you refer to, the one of August 13, 1903, that is in evidence here ? A. August 13, 1903.
“ ‘Q. In connection with the explanation of the papers in question, did you say anything to her about it, or what did you say 1 A. Oh, I explained to her about the sale of the property.
“ ‘Q. As you have—
“ ‘Witness (continuing) : I explained to her about the sale of the property and the items of the account.
“ ‘Q. Did you tell her the facts about these matters as you have told.them here? A. I related the facts to her about the sale and why I sold the property.
“ ‘Q. Well, did you give her information the same as you now tell the matter, or definitely ? A. Well, the same information — probably I didn’t go into it quite as fully, but I explained generally the nature of the transaction and why I sold it, and what I got for it, and showed her the accounts.
“ ‘Q. Do you remember, in 1906, when the complainant came out to Montana? A. Yes, sir.
“‘Q. Did you see her at that time ? A. Yes, sir.
“ ‘Q. • Where?’ A. I saw her down at the ranch of.Smith Bros. Sheep Company.
“ ‘Q. What was she doing down there? A. She had, I think, come back from Germany if I remember correctly, and was going back.
“ ‘Q. Well, that states where she came from and where she was going to, but I asked you if you knew what she was doing down there on the ranch? What she was there for. A. Well, she was there, looking after her estate. I don’t remember whether the final account had been put in or not, but we discussed the matter there in our presence there in the office.
“ ‘Q. In the office, where do you mean? A. The office of Smith Bros. Sheep Company.
“ ‘Q. Who discussed it? A. Well, I discussed it with her and Uncle John.
“ ‘Q. Who was present? A. Mr. Flatt'was present.
“ ‘Q. And you discussed what matter? A. Oh, about the sale of the property, and how it had been handled, and how we had tried to manage the property for her.’
“In the same connection a letter written by N. B. Smith to the complainant’s younger sister on the 7th of April, 1905, is pertinent:
“ ‘N. B. Smith, County Attorney, Meagher County.
“ ‘White Sulphur Springs, Montana, April 7th, 1905.
“ ‘Dear Anna: Your favor of the 4th inst. came to hand. Will say presume you have my letter inclosing the $500. Yes, you will get your money in June. You need be at no expense about attorney’s fees. I would like to have you come out and be here when the estate is settled. You can go over all the accounts with me and see where the money has gone. I have taken receipts for everything and have paid out all money by checks. I want you to know everything and then I will feel that I have done my duty. * * *
“ ‘Your cousin,
“ ‘N. B. Smith,’ ”
John M. Smith, as guardian, settled his final account with the plaintiff on the same basis employed in settlement with Nellie Mae Moore, to-wit, three per cent interest on the principal sum held by him from December 11, 1900. The net amount received by the plaintiff was $23,954.01. The initial amount accounted for was one-third of $82,170.20, or $27,390.06. The complaint charges that the sale was “illegal, fraudulent and collusive,” and that “Napoleon B. Smith and John M. Smith colluded and confederated to secure the said property to the said John M. Smith, and to sell the same to him at much less than its real value.” The claim that the property was sold at less than its then present value was virtually abandoned by the appellant in this court, and, indeed, such a contention cannot be justified in the evidence. The United States circuit court of appeals decided that “the sale of the stock of the estate of the deceased Wm. A. Smith and the subsequent misappropriation of the money of the minors by their guardian were parts and parcels of a scheme entered into by and between N. B. and John M. Smith, which was a fraud upon the minors and the probate [district] court." Judge Hunt, who tried the Moore ease in the federal district court, and Judge Stewart who heard this case in the Meagher county district court, were of the opposite opinion; that is to say, in their judgment there was no fraud, collusion or conspiracy and the sale was in all respects legal, regular and free from fraud.
The additional testimony given by plaintiff in the state court was, in part, as follows: “I became twenty-one in 1906; had attended school in Missoula, at Shattuck Military School and at Notre Dame; had had no business experience; the settlement between myself and my uncle was transacted by myself, N. B. Smith and Mr. Flatt; Mr. Flatt gave me a check at the ranch for a part of the money and I think N. B. Smith gave me part of it; I saw the expense account and what the money was supposed to have been spent for; I did not question it further than this, that I asked what certain accounts were for and any account that I happened to pick out and see I would ask what it was. Q. Now, Mr. Smith, what, if anything, did you know at that time in relation to the circumstances and conditions under which your uncle, John M. Smith, became the apparent owner of the stock that had formerly been owned by your father in the Smith Bros. Sheep Company? A. Nothing at all, but one thing I asked my uncle John while on the ranch — I asked him why it was that our property was sold and he said that he did not feel that he wanted us children to take a chance so he bought the property. I knew nothing of the fact that the money that was turned over to him he used to pay off his notes at the bank; knew nothing of his purpose to have himself appointed guardian so that he might utilize the money to pay off the notes. I knew nothing of the affidavit presented to the court that the purpose was to sell the stock of John M. Smith in conjunction with the stock of the estate in order that the best price might be realized for it, or that John M. Smith had got ten $13,000 in two years after father’s death while the executor of father’s estate only procured about $800. Mr. N. B. Smith told Mrs. Reynolds and she told me that father’s stock had been sold to my uncle.” The inventory value of the stock in the Smith Bros. Sheep Company belonging to the estate of Wm. A. Smith, deceased, was $61,475.
We approach the final determination of the case with the greatest respect for the decision of the learned judges of the circuit court of appeals. Nevertheless it is our duty to decide it in conformity with the dictates of our own consciences. In so doing we first consider the situations and characters of the persons accused of having formed a conspiracy to defraud the plaintiff; for unless such conspiracy existed, the conduct of the parties subsequent to the sale becomes altogether immaterial. The principal actor in the alleged plot is John M. Smith, a man sixty-four years of age, of comparative wealth, in poor health, who, whatever motive may have actuated his later conduct, appears beyond a doubt to have been sincerely desirous of disposing of his interests in the sheep business and retiring from active participation in industrial pursuits, at the beginning of the negotiations for the sale of the corporate assets. This man, who is now accused of so unnatural a purpose to overreach and defraud his brother’s orphan children, had been intimately associated with that brother for many years prior to his death. They lived in a sparsely settled community; John at least was illiterate ; but by their personal efforts and attention to business, they had succeeded in accumulating a considerable fortune. John, on account of the exposure incident to the conduct and management of a large sheep ranch, had contracted a disease which necessitated his spending the winters ■ in California. He died pending this litigation. It is not unnatural to assume from a contemplation of his life and its environments that he was provincial in his habits and ideas; that the spirit of thrift and a desire to save characterized his conduct and dictated his actions generally. This is constantly to be borne in mind in passing judgment upon the facts in the case and the successive steps taken looking to a disposition of the property of the parties. It is not unreasonable to assume, from their relationship and association, that some considerable degree of affection existed between the brothers. John was present at the death of William, and the latter’s last words were a request that John would look after the interests of his children. The promise was given and John testified that it had been faithfully kept. It is impossible to read the correspondence of this uneducated man with his nephew N. B. Smith, and thereafter entertain a doubt that, in the beginning, at least, he entertained a sincere regard for the plaintiff and his sisters, was actuated by the highest motives of solicitude for their welfare and a desire to protect and conserve their inheritance. Although he held a controlling interest in the stock of the corporation, he was reluctant to sell his portion aloné, for fear the minority interests of the children would suffer if strangers acquired his stock, and in giving an option to MeNaught he stipulated that it should be subject to the approval of the executor of his brother’s estate. It must not be forgotten, either, that the corporation was a sort of family affair; and the record tends to show that no particular surprise was caused by the fact that John M. Smith was in the habit of drawing from its funds such moneys as he had occasion to require. The books of the concern were kept in a very informal and careless manner. In all probability the brothers had that trust and confidence in each other which was engendered and justified among those whose sturdy characters and integrity of purpose alone made it possible for the early settlers to go into the remote regions of the state and by hard labor and mutual dependence, build homes for themselves and develop the natural resources of the country.
The other alleged conspirator is Napoleon B. Smith, now and for many years a member of the bar of this court in good stand ing; a man of family, whose character for truth, honesty and integrity generally, is unimpeached, so far as the record discloses.
The property in controversy consisted of stock in the Smith Bros. Sheep Company, of the appraised value of $61,475, which Judge Armstrong, presiding in the district court of Meagher county at the time, authorized the executor to sell for $75,000 at private sale and which actually sold for $85,000. Several bona fide efforts had been made to effect a sale of the whole plant, without success. Touching the value of the stock held by the executor, he testified that he figured $75,000 was what it was worth; that he had counseled with Mr. Anderson, Dr. Parberry, Perry Moore and Len Lewis, representative sheep men of the county, and they advised him to sell if he could get a fair price, which, in their judgment, would be $150,000 to $160,000 for the whole property.
Regarding the methods pursued in the probate proceedings growing out’ of the administration and guardianship matters shown by the records, it is well to note that White Sulphur Springs, the county seat of Meagher county, was at that time a village of about 450 inhabitants, situated many miles from a railroad; court was held four times a year and it is well known to the profession that probate matters were sometimes loosely conducted in those remote country districts, and the people generally regarded the district judge as a repository for all their troubles growing out of the administration of estates, and did not hesitate to seek his counsel and advice wherever they could encounter him and in the most informal manner.
Coming now to the correspondence which is claimed to disclose the conspiracy: As was well said by Judge Ross who prepared the opinion of the circuit court of appeals: “A sale by John M. Smith of his majority of the stock to a stranger might have worked to the injury of the minority interest of the children of the deceased William A. Smith,' so that both John M. Smith and the executor became desirous that both interests should be sold together.” The executor, therefore, indorsed upon the option to McNaught an agreement to immediately make application to the district court to sell the interest of the estate in the property at the rate therein named, in ease a buyer could be found. At that time, however, as is also noted in the opinion of the court of appeals, the evidence shows that the executor regarded the estimate of John M. Smith as to the value of the property as too high, as did others. Under date of December 14, 1897, John M. Smith informed the executor, by letter (we shall not attempt to reproduce his spelling), that he wanted to sell out “so as to go some place that I can be with my family and can send Stanley [his son] to school as long as I hold it I can’t be satisfied away from it and I don’t want to sell out and leave the children’s interest in it I think the coming year will be the time to let go of the entire plant you can at the next term get a permit to sell Wills interest at any time that we can get a fair value for it.” He also declared that if he were young he would not care to sell. The executor thereupon, on January 24, 1898, obtained from' the district court an order to sell the property for $75,000, which was $13,525 more than its appraised valuation. There is no indication in this transaction that the executor had any notion of selling the property for less than it was worth, or, indeed, that he intended to sell it to John M. Smith. On March 19, 1898, John M. Smith asked the executor to name the least price he would accept for the children’s stock, saying he understood the latter had authority to sell for $75,000 but that he thought they could do better than that and get them $80,000 or $85,000 clear. Bearing in mind that John M. Smith held his stock at a higher valuation than did the executor that of the children, it is not unreasonable to conclude that he acted in good faith in naming a minimum price so that the former might have a “margin to work on.” On March 25, 1898, the executor expressed a reluctance to “see a sale go by” and indicated a willingness to take $85,000 for the interest of the estate. He said: “I want to do what is fair by the estate and also by you. I want to see a sale go through in some shape, but at the same time I want to do the best I can for the estate.” It does not seem possible that these men would take the trouble to express such sentiments in private correspondence if they were engaged in a conspiracy to defraud their minor relatives. On July 2, 1898, John M. Smith very frankly told the executor that their judgments differed as to the value of the property, and that he would not be satisfied with the same amount received by the estate. He then attempted to induce the executor to take less than $85,000. In our opinion these negotiations disclose no concert of action or meeting of minds between these two men. On December 30, 1898, Henry Neill made a cash offer of $80,000 for the stock of the estate. On the next day the executor informed his uncle, by letter, of this offer. In the course of the letter he said: “I am very anxious to do something with the property as I feel that the estate is going to lose money by holding it. If you will make me a cash offer of $85,000 you can have the property. I told Neill I would not make such an offer. McNaught writes me that you owe the company $13,839.35. If you do not take the stock it would be your duty to put your note into the company for the amount. Under our law the only way money can be drawn out of a company by a stockholder is by declaring so much dividend on each share of stock. I do not make the suggestion to hurt your feelings, but you know yourself that such large transaction should not be carried on in such a loose -way.” It is suggested by the appellant that the expression, “I told Neill I would not make such an offer,” discloses some secret understanding between the nephew and uncle at this time. We do not know exactly what was intended by N. B. Smith, but it is fair to presume that if he got his price, — what he thought the property of the estate was actually worth, — he would naturally prefer a relative to a stranger as a purchaser, provided the former wanted to buy. Or it may be said that the only meaning of the words was that the executor told Neill he would not give him an option on the estate’s holdings. If Neill had offered more than $85,000 it might be contended that the executor was willing to sell to his uncle at a lesser price, but there is not any testimony to justify such a conclusion. It will be observed, also, that in the letter the executor respectfully, but firmly, called upon his uncle to pay his indebtedness to the company, which is altogether at variance with the idea that they were conspiring to defraud the children. Note, also, that at this time John M. Smith was endeavoring to -obtain an option so that he might dispose of the whole property to some third person, and also that the price of $85,000 had been fixed many months prior to the offer of Neill.
What relation did John M. Smith and Napoleon B. Smith bear to the Union Bank & Trust Company and Mr. Ramsey, its president, at this time? Substantially none, so far as the record shows, save that John M. Smith was very friendly with Henry Klein, the vice-president of the bank. The first account opened with the bank was on April 11, 1898, by the Smith Bros. Sheep Company depositing $2,000. John M. Smith’s account was opened April 27, 1899, by a deposit of $75,000. Yet on January 14, 1899, we find John M. Smith openly and frankly informing Mr. Ramsey in a letter, that he was about to buy the estate’s interest in the stock of the sheep company and asking if the bank would loan $90,000 on the entire stock. This letter also indicates that at that time he had a mind to sell the entire property at the first opportunity and thought he could make a sale in four or five months. On January 16, 1898, John M. Smith wrote to the executor saying that he had wired an acceptance of his offer to take $85,000 for the stock belonging to the estate, stating also, “If Miles makes a raise I will pay you the $90,000 that you ask you of course would put it in government bonds if you had it now to make things safe and you be absolutely safe I will give you all of the sheep company stock to hold as security and I will pay the same interest that you would get on government bonds and pay you 3 times per year until I can sell out to advantage then you will be safe and if any one is loser it will be me and I am willing to take the chances there never will be a time but what the whole business will be the best of security for that amount but I don’t intend to hold it very long at any time that I can make a good sale I will pay off your $85,000. I think this the best way for us to close up business you can get up the papers so you are safe and at the same time give me a chance to handle myself to advantage if Miles fails if you did have to pay taxes I will agree to pay it for you so it will leave it just the same as government bonds I could borrow the money of the bank at Helena by giving the same security but I would sooner deal with you and you are just as safe as though you had government bonds.” To this letter N. B. Smith replied on January 16: “I want a clear understanding with you so that there may be no hereafter in the matter. It is understood that I am to get $85,000 for the stock and the estate is to have that and not owe the company anything. You had better pay a portion down.” On January 22 John M. Smith inquired, by letter, how much the executor wanted him to pay down and what interest he would want on the balance. He also said that in his judgment it would not take longer than May the first to make “some turn so I will get the balance for you.” On January 21 John M. Smith was informed by Mr. Ramsey that he could borrow $90,000 at 9% interest. On January 24 the executor wrote to his uncle in part as follows: “I cannot sell the way you indicated. The only way I can sell is for cash down. If you are appointed guardian of the children then I could turn the money over to you. As I told you all the time I have no right to sell on credit.” But on January 20 the executor wrote the so-called “lost letter,” which is thought by the appellant to have mapped out a fraudulent scheme to defraud him and his sisters. It really makes very little difference who first proposed the plan. There does not appear to have been anything secret about it. John M. Smith sent the “lost” letter to Ramsey, who read and returned it. On January 27th John M. Smith wrote to the executor: “I think your plan good. I will take steps to get the ten thousand down payment and we will proceed to business at once. I will write to the bank and arrange for the money if you have me appointed guardian for the children as soon as I sell out I want to invest in government bonds all their money and also my own as I don’t intend to try to do any business after I sell out and I fully intend to let go this spring I think your suggestion a good one. I think I should have the children come out here the schools is first class and the climate is good also good society.”
It would serve no useful purpose to again quote any substantial portion of the correspondence. It is very clear to us (1) that neither John M. Smith nor Napoleon B. Smith ever had any intention or design to defraud the children or to gain any advantage over them. Indeed, in our opinion, all of their correspondence and actions indicate a most praiseworthy solicitude for their material welfare. (2) The property was sold for its full market value and the children suffered no detriment whatsoever on account of the sale. "We believe that both John M, Smith and Napoleon B. Smith acted with the utmost good faith in the premises, that they exercised sound judgment as to the affairs of the children, and constantly had in mind the fact that they were dealing with a trust estate and ought not to jeopardize it by taking any chances of its being diminished or lost while in their care. With this in mind it naturally occurred to them that an investment in government bonds was perhaps the safest that could be made. At least they appear to have had such an ultimate investment constantly in mind. (3) We think it equally clear that neither of these parties at any time pending negotiations for the sale, or at the time of the sale, had any idea that John M. Smith should buy the property as a speculation or as a permanent investment. We cannot read their correspondence or contemplate their actions and hold the opinion that either of them ever entertained any other notion than that John M. Smith, after becoming sole owner, should dispose of the entire plant at the earliest opportunity, and, - if possible, within a very few months after the sale. We think the correspondence shows, also, that they were dealing with each other at arm’s-length, and we find no evidence that N. B. Smith was dominated by his uncle or influenced by him to do any act inimical to the interests of the children. It is very easy to select a fragment of one letter here, and another there, and by patching them together draw a partisan conclusion, altogether variant from the intentions and sentiments of the writers. We do not think that any of the main deductions of fact drawn by the appellant are justified in the evidence. We are also of opinion that John M. Smith’s frank and repeated assertion that in his judgment the property was of greater value than that at which the executor estimated it, in itself shows good faith on his part. (4) Neither have we any doubt that John M. Smith was honestly of the opinion that, considering the large undertaking he would be required to give, and which he eventually did give, for the faithful performance of his duties as guardian, together with his individual respofisi-bility, and the further fact that the entire property would be speedily disposed of and the proceeds invested in government bonds, it was a perfectly legitimate transaction to employ the guardianship funds temporarily to take up the indebtedness to the Union Bank & Trust Company and thus avoid the payment of so large a rate of interest as nine per cent per annum on the sum of over $80,000. He testified that he thought he had a right to turn in the certificates in payment of his notes because he had given security; that he understood he was using money that was turned over to him as guardian but thought he had a right to do so, as he had given security, because “it was the same as though it was in my possession.” He very frankly stated that he might have made a mistake but that he did not do so with intent to defraud anyone and if he had wronged anybody he was willing to make it right. He said he thought it was just the same as if he put it in government bonds if he paid the interest. We cannot believe that this old man was engaged in a fraudulent conspiracy to defraud his brother’s orphan children. Moreover, the facts show that they have not been defrauded. Their property was sold to the only purchaser who could be found who was willing to give as much as $85,000, the full value thereof; and that sum, after deducting expenses of administration, has been fully paid to them. It may be that upon settlement of the guardian’s accounts he should have been required to pay a greater rate of interest and for a longer period of time, than was actually required of him, but that question is not before us; and even if it should be answered in the affirmative, the fact cannot by relation characterize as fraudulent and void prior transactions which were in themselves honest and free from actual fraud.
But it is contended that the plan adopted by John M. Smith of using guardianship funds to take up his personal indebtedness to the bank was fraudulent and void as a matter of law. In this connection it may be well to note that aside from the question of the rate of interest that should have been exacted from John M. Smith as guardian, the equities of the ease are all with the respondents. The appellant is attempting, in a court of equity, to overturn and set aside a purchase of property sold in good faith, for its full value, every dollar of which has been accounted for, because, as he claims, his guardian used his money for a short time, in order to effect the purchase. In fact, this consideration is of no moment whatsoever, so far as the result to the appellant is concerned. Not any of his property was embezzled or withheld. All of it was duly and regularly accounted for when he became of age, and turned over to him. During the latter years of his minority he took no chances of the sheep industry being affected by adverse legislation; he was fully protected from loss; if John M. Smith had continued to pay interest on the amounts temporarily borrowed from the bank and had allowed the guardianship funds to lie idle, or if he had sold out the entire holdings of the sheep company, as contemplated, the result to the appellant would'have been exactly the same as that brought about by the course of procedure actually adopted. If the appellant had been defrauded in fact, or if he had lost anything by reason of the methods pursued by his guardian, he would be in an altogether different situation; but such is not the case.
It is claimed by the learned counsel for the appellant that in the circumstances disclosed by the record, John M. Smith was guilty of larceny under the provisions of section 8656, Revised Codes, which are as follows: “Every person acting as * * # guardian * * # who secretes, withholds or otherwise appropriates to his own use * * # any money * * * in his possession or custody, by virtue of his office, employment or appointment, is guilty of larceny.” This section has no bearing upon the case disclosed by the record. Smith did not secrete or withhold the money of his wards. They were in nowise aggrieved by his method of procedure. Even if we assume that he was not justified in using the funds as he did, and that he thereby technically appropriated them to his own use, yet we must look to the ultimate result of his actions in order to correctly judge of the effect thereof upon the instant controversy. It is impossible for us to believe that a guardian who had given ample security to account for all funds coming into his hands, who was personally able to raise the amount thereof on demand, who sincerely believed that he was acting legally and for the best interests of his wards, and who did, in fact, fully account for all moneys paid over to him, should or could be adjudged guilty of a heinous crime in a subsequent suit by one who has not lost or suffered by his conduct.
The particular infirmity in the case of the plaintiff is that he is attempting to avoid the sale for a purely technical reason; a reason based in facts arising after the sale was complete, and which had no effect whatsoever upon the sale itself. It is claimed that this may be done because the whole course of action was fraudulent and therefore void; that the subsequent use of his money, pursuant to a prior design to so employ it, vitiated the sale theretofore made. But his premises are defective. Not any fraud in fact was contemplated or practiced in any part of the proceedings; at most a mistake was made by the guardian as to his right to so use the money; and a technical violation of duty on his part may not now be employed to overturn a transaction otherwise regular and legal, by which no one had suffered any injury.
Two very elaborate and able briefs have been submitted by counsel for the appellant. Numerous decided cases are therein cited, all of which we have examined with painstaking care, but not any of which, in our judgment, deal with the exact question here involved. It is contended that equity must frown upon such a proceeding as that disclosed by this record, because it has a tendency to “despoil the weak wards of chancery, even though in the individual case it may have been entered upon with the most praiseworthy motives and a fair and even liberal consideration for the property was paid.” But we conceive that a court of equity, while constantly be'aring in mind the beneficent' fundamental principles of its jurisprudence, should carefully and conscientiously examine and decide each case upon the particular facts therein disclosed, with a view to doing substantial justice by the immediate litigants, lest in applying a hard-and-fast rule to all cases alike, injustice may be done to the parties then claiming the attention of the court. ¥e find no occasion to unduly lengthen this opinion by a review of the cases cited.
In addition to the basic question heretofore considered, several technical points of law are advanced in behalf of the appellant and elaborately argued. Some of them are incidentally disposed of by what has already been said; the others have no merit, in our judgment. The facts of the case are against the appellant.
The judgment and order are affirmed.
Affirmed.
Mr. Chief Justice Brantly and Mr. Justice Holloway concur.
Petition for rehearing pending. | [
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] |
MR. JUSTICE HOLLOWAY
delivered tbe opinion of tbe court.
On May 20, 1909, this plaintiff was the duly qualified and acting chief of police of tbe city of Butte, appointed to such office under tbe Metropolitan Police Law (Laws 1907, p. 344). In disregard of tbe provisions of that statute, tbe mayor assumed to appoint, and tbe city council to confirm, John J. Quinn as chief of police, and thereupon tbe name of this plaintiff was stricken from tbe pay-roll of tbe city. On June 21 tbe plaintiff instituted proceedings in quo ivarranto against Quinn to test bis right to tbe office. Tbe district court sustained a demurrer to bis complaint and rendered judgment in favor of Quinn. Upon appeal that judgment was reversed. (State ex rel. Wynne v. Quinn, 40 Mont. 472, 107 Pac. 506.) On June 28, 1910, a final judgment was entered restoring Wynne to the office. This action was thereupon commenced to recover from the city the. salary for the period of time during which the plaintiff was prevented from discharging the duties of the office. The city attempted to defend upon the theory that the salary had been paid to Quinn, who was a de facto officer, and as a further partial defense it is alleged that during the time Wynne was kept out of office he was able to, and did, earn a considerable sum of money in other employment. The trial resulted in a judgment in favor of plaintiff for the full amount claimed, and the city has appealed.
1. Whether, in the absence of statute, payment to a de facto officer discharges the employing municipality is a question upon which the courts are divided. Those holding the affirmative rest their conclusion upon the ground of public policy; but a review of the decisions is unnecessary, for in this state we have a statute which declares the public policy here. Section 375, Revised Codes, reads as follows: “When the title of the incumbent of any office in this state is contested by proceedings instituted in any court for that purpose, no warrant can thereafter be drawn or paid for any part of his salary until such proceedings have been finally determined. ’ ’ If, then, after the quo warranto proceeding was instituted, the city disregarded the statute and paid the salary to Quinn, it did so at its peril. Between May 20 and June 21 the plaintiff was attempting to discharge the duties of the office.
2. But it is insisted that the city was entitled to notice of the pendency of the proceeding, and that since it did not receive such notice it cannot be bound. Section 376, Revised Codes, provides that the clerk of the district court shall' certify to the disbursing officer the fact that the title to an office is contested; but the failure of the clerk to perform his duty cannot operate to deprive this plaintiff of the salary attached to the office from which he was wrongfully excluded.
3. The city is not entitled to have credited upon plaintiff’s claim for salary the amount he earned in other employment during the time he was wrongfully excluded from his office. His claim does not rest upon contract. He was not an employee, but an officer. The salary is an incident to the office, and, if entitled to the office, his right to the salary follows. (Reising v. City of Portland, 57 Or. 295, 111 Pac. 377, and cases cited.)
4. It was not necessary for Wynne to file with the city a verified claim for the salary due him. The auditing statute (Rev. Codes, sec. 3288) does not have any reference to a claim for salary which is fixed by ordinance. (Dawes v. City of Great Palls, 31 Mont. 9, 77 Pac. 309; State ex rel. Dudley v. Daggett, 28 Wash. 1, 68 Pac. 340.)
5. The right of action given by section 6959, Revised Codes, cannot refer to one for salary; for to assert that it does presupposes a violation of section 375, above.
Most of the questions presented upon this appeal were determined adversely to appellant in Peterson v. City of Butte, 44 Mont. 401, 120 Pac. 483.
The judgment and order are affirmed.
Affirmed.
Me. Chief Justice Brantly and Mr. Justice Smith concur. | [
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
Appeal from an order directing the issuance of an injunction pendente lite. The action was brought to quiet title in the plaintiff to the use of fifty inches of the water flowing in Beaver creek, in Broadwater county. The complaint alleges an appropriation by the predecessors in interest of plaintiff and defendant in the year 1865 of about 1,000 inehes of water, and a diversion thereof by means of a diteh for use upon placer mines and other purposes ; a sale by such predecessors in 1881 of fifty inches to mesne grantees through whom the plaintiff claims title in consideration of a grant to the original appropriators by said grantees of a right of way across lands of the latter for a diteh which was thereafter constructed; continuous adverse use of the water the right to which was so conveyed by the mesne grantees and plaintiff to the bringing of this action; and a purpose on the part of” the defendant to divert all of the water flowing in the stream, and to convey it away by means of a pipe-line to supply a water system about to be erected by it. The prayer is for a decree declaring the plaintiff entitled to the use of the amount claimed, and for a perpetual injunction restraining the defendant from carrying out its purposes.
The amended answer of the defendant denies the right of plaintiff to the use of any of the water. It then, by way of counterclaim, alleges, substantially, the following: That prior to 1865 its predecessors appropriated and applied to useful purposes 1,328 inches of water flowing in the stream; that after the date of its appropriation and down to the year 1901, when defendant by mesne conveyances acquired these rights, the water was continuously used by its said predecessors, and their successors in interest; that on March 8, 1910, the defendant leased to the Spokane Ranch and Water Company, a domestic corporation, all of said water and also certain other water designated as Beaver Creek bedrock drain water, and that since the execution of said lease all of the water has been used for agricultural purposes by said lessee and by other corporations and persons owning lands in the vicinity of the lands of the lessee and using said water under such agreement with the said lessee; that at divers times since the execution of the said lease by the defendant the plaintiff has by means of ditches tapping the stream above the head of the ditch by which the water is conveyed to the lands referred to diverted water from the stream to sucb an extent that there has not been left flowing therein an amount equal to 1,000 inches, and that plaintiff has repeatedly so diverted water and threatens to do so to the great damage of the lessee of the defendant; that all the water so conveyed to defendant by its predecessors is necessary for the cultivation of crops of hay and grain on the lands of defendant’s lessee and the adjacent land owners; that the entire amount of water now flowing in the stream and which has been flowing therein since July 10, 1911, has been much less than 1,000 inches, and less than is adequate for the cultivation and maturity of the crops growing upon the lands of the defendant’s lessee for the irrigation of which it procured said lease to be executed. The prayer is for a decree against plaintiff perpetually enjoining it from diverting any water from the stream so as to reduce the amount of the flow to less than' 1,328 inches. The amended answer was filed on July 20, 1911. It was accompanied by affidavits by H. H. Pigott and W. B. Fisher, respectively president and general manager of the Spokane Ranch and Water Company, and upon the showing made by these affidavits and the answer the district judge made an order requiring plaintiff to show cause why the injunction should not issue. It was made returnable at chambers in Bozeman, Gallatin county, on July 24, 1911. After a hearing had upon affidavits and oral testimony the order was made directing the injunction to issue.
The contention is made that the counterclaim does not state facts sufficient to warrant the making of the order. It will be noted that the pleading contains no allegation showing that defendant is bound by the terms of the lease to protect the Spokane Ranch and Water Company in the quiet enjoyment of the right leased, nor that the reversionary interest is being injured in any way, nor that the defendant will suffer any pecuniary loss if the plaintiff is not restrained during the progress of the litigation from doing the acts complained of. The only allegation of wrong other than that upon which defendant desires ultimate relief is that which is accruing and will accrue to the Spokane Ranch and Water Company and its associates. The question presented, therefore, is whether the defendant is entitled to a temporary injunction solely upon the ground of plaintiff: ’s interference with the right of the lessee company.
That a landlord may maintain an action against a stranger for a permanent injury to his lands in the possession of a tenant cannot be doubted. By virtue of the lease an estate is carved out of the fee and is vested in the tenant, but the landlord still has an inheritance technically designated as the reversion. For a trespass upon the possession of the tenant or for injury to his estate, the right of action is in him. An injury which affects the reversion is a wrong to the landlord, to be redressed by an action by him, although the tenant is in possession. (24 Cyc. 925; Arneson v. Spawn, 2 S. D. 269, 39 Am. St. Rep. 783, 49 N. W. 1066.) The wrong may be such as to affect both these distinct interests. This gives a right of action to the owner of each. (Kernochan v. New York E. R. Co., 128 N. Y. 559, 29 N. E. 65.)
The right to the use of water is an incorporeal hereditament, an intangible right. From its nature a contract with respect to it cannot, technically speaking, establish the relation of landlord and tenant. (Swift v. Goodrich, 70 Cal. 103, 11 Pac. 561.) Wrongs done by interference with such an interest cannot therefore be redressed by the same character of actions as are applicable to wrongs done by the invasion of corporeal rights. The most appropriate remedy to protect such an interest is a suit in equity. (Barkley v. Tieleke, 2 Mont. 59.)
But the form of the remedy does not alter the relation of the parties to each other or to their respective rights in the property. Under the statute, with the exceptions enumerated, an action must be brought in the name of the real party in interest. (Rev. Codes, see. 6477.) There can be no doubt of the right of the defendant to have the ultimate relief demanded in its counterclaim, via., the determination of plaintiff’s adverse claim; for, if the plaintiff should be permitted to continue its diversion, the right thus asserted might finally ripen into a title by adverse use. Upon the assumption that defendant’s right is superior, plaintiff’s diversion- is an injury to tbe reversion which defendant may protect by suit, but the right of use during the term of the lease is vested in the Spokane Ranch and Water Company, the lessee.
The purpose of an injunction pendente lite is to preserve the status quo until the ultimate rights of the parties may be determined. Under the facts stated, the defendant has no concern as to whether its lessee is disturbed or not. The running of the statute is stopped by the pendency of the action; and, if the lessee is indisposed to assert its right of present use under its contract, this is no concern of defendant. The lessee might by intervention in this action or by an independent action obtain temporary relief by injunction, but the defendant is suffering no injury which demands this temporary relief. It must follow, therefore, that the court erred in issuing the injunction at the instance of the defendant. The order is accordingly reversed.
Reversed.
Me. Justice Smith and Me. Justice Holloway concur. | [
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PER CURIAM.
Respondents’ motion to dismiss tbe appeal herein, this day submitted, is after due consideration by tbe court granted, and tbe appeal is accordingly dismissed at tbe cost of tbe appellant. (Motion to reinstate denied June 18, 1912.) | [
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
On August 19, 1911, J. H. Miewald filed with the defendant, a justice of the peace in Chinook township, Chouteau county, an affidavit asking for the issuance of a search-warrant, a copy of which follows:
“State of Montana, County of Chouteau,
“ J. H. Miewald, being first duly sworn, on oath deposes and says that the above-named defendant, Herman Streit, has in his possession in that certain frame building situated on lot 8 of block 3, in the town of Chinook, which said building is near to and adjoining the Arlington Hotel on the north side thereof, and which said frame building is known as ‘ Streit’s saloon building, ’ certain spirituous, malt, vinous, distilled, and fermented liquors, to-wit, wines, whiskies, beers, ales, brandies and other intoxicating liquors in bottles, casks, kegs and barrels, a more particular description of which said liquors and of the place where the «ame are kept, and of the bottles, kegs, barrels and casks containing same, being to affiant unknown, and which said liquors so in the possession of the said Herman Streit are kept and held by him with the intent in him, the said Herman Streit, to use the same as the means of committing a public offense, to wit, with the intent in him, the said Herman Streit, of offering the same for sale, and of selling the same, without having first obtained, and without first obtaining a license so to do under the provisions of the ordinances of the town of Chinook, county of Chouteau, Montana, and particularly under Ordinance No. 61 of said town of Chinook, which selling and which offering for sale the said Herman Streit intends to carry on and make within the limits of said town of Chinook, contrary to the provisions of Ordinance No. 61 of the town of Chinook, said county. And affiant asks that a search-warrant may issue commanding that the said frame building so known as ‘Herman Streit’s saloon’ be searched for the property above specified, to-wit, the said liquors, and bring same before this magistrate.”
The defendant issued a warrant, and thereupon the said Mie-wald, as town marshal of the town of Chinook, and pursuant to the command of the warrant, seized, carried away, and took before the defendant the whole of the stock in trade of said Streit, consisting of wines, whisky, beer, etc., of the value of more than $2,000. The defendant by order fixed August 23 as the time for a hearing of the proceeding and to determine what disposition should be made of the property. Streit immediately applied to the district court of Chouteau county for a writ of prohibition, and an alternative writ was issued. Thereafter the proceeding was, on motion, transferred for final hearing to Cascade county, in the eighth district. The result was a judgment by Hon. J. B. Leslie, one of the judges of that district, awarding a peremptory writ with costs. The defendant has appealed.
While counsel assigns many alleged errors upon the proceedings had in the district court, it is not necessary to consider any of them. The ultimate question presented is whether the facts stated in tbe affidavit disclose a case in which the defendant was authorized to issue the warrant.
Under the statute (Rev. Codes, sec. 9-677) a search-warrant may issue in three cases only: (1) "When the property has been stolen or embezzled; (2) when it has been used as a means of committing a felony; and (3) “when it is in the possession of any person with the intent to use it as the means of committing a public offense. * * * ”
“A crime or public offense is an act committed or omitted in violation of a law forbidding or commanding it, and to which is annexed, upon conviction, either of the following punishments-: (1) Death; (2) imprisonment; (3) fine; (4) removal from office; or (5) disqualification to hold and enjoy any office of honor, trust or profit in this state.” (Rev. Codes, sec. 8107.)
In order to enforce the ordinances of a town, the town council is given authority to designate a justice of the peace of the township in which the town is situated to act as police judge to try and punish violations of them. (Rev. Codes, see. 3242.) In this capacity he has exclusive jurisdiction of all eases arising uiider the ordinances, in addition to his jurisdiction as a justice. (Secs. 3242, 3298.) The two jurisdictions are separate and distinct, however, because he can act as police judge only by virtue of his designation under the statute and by the mode of procedure provided for that purpose. Prosecutions for violations of local ordinances must be conducted in the name of the municipality (sec. 3298), by its prosecuting officer (sec. 3303). Criminal cases arising under the state laws must be prosecuted in the name of the state and by the county attorney. (Const., sec. 27, Art. VIII; Rev. Codes, sec. 3052.) It does not appear from the record whether the defendant was ever designated by the town council of Chinook to act as police judge. It was assumed by counsel at the argument that he had been so designated, but for the purposes of this case it is not material to inquire whether he had been or not. It is evident that he issued the warrant upon the assumption that the violation of an ordinance of a municipality is a public offense, within the meaning of tbe statute, supra; for the proceedings were entitled, “The State of Montana, Plaintiff, v. Herman Streit, Defendant,” and the warrant ran in the name of the state. This brings us to the inquiry whether this assumption is correct.
In City of Helena v. Kent, 32 Mont. 279, 4 Ann. Cas. 235, 80 Pac. 258, this court considered the question whether a violation of a city ordinance, making it the duty of the occupant of premises to keep the sidewalks in front of them free from snow and ice, is a crime or misdemeanor and must be prosecuted in the name of the state. It was held that infractions of local police regulations, such as that, are not in their essence “crimes” or “misdemeanors,” as those terms are employed in our criminal jurisprudence, and that prosecutions of them are therefore not criminal prosecutions. (See, also, State ex rel. City of Butte v. District Court, 37 Mont. 202, 95 Pac. 841.) In the statute, supra, “crime” and “public offense” are used synonymously and include all felonies and misdemeanors — that is, all acts which are denounced as crimes eo nomine — but do not include violations of local ordinances. It must follow, therefore, that violations of city ordinances are not included within the meaning of the expression “public offense,” as used in the statute (sec. 9677, supra) authorizing the issuance of a search-warrant. It is true that, in the section conferring upon police courts exclusive jurisdiction of ordinance cases, they are referred to as both civil and criminal. (Sec. 3298.) The same act may be a violation of an ordinance and at the same time of a public law. (State ex rel. City of Butte v. District Court, supra; Dillon on Municipal Corporations, sec. 633.) It may therefore be punishable both under the state law and imder the ordinance. Again, there is attached to the violation of an ordinance a penalty in the form of a fine, imprisonment, or both. Nevertheless, whether such offense be classified as civil or criminal, or quasi criminal, the prosecution to enforce the penalty does not rise to the dignity of a criminal prosecution, in the sense in which that expression is commonly used.
The search-warrant was not known to the early common law. It grew up by “imperceptible practice” and was first confined to the case of stolen goods. Its legality was denied by Lord Coke. (Entick v. Carrington, 19 How. St. Tr. 1030.) The use of it was subsequently extended. (2 Chitty’s General Practice, p. 180.) Because it is a process subject to much abuse, it has in this country generally been limited in its use by constitutional restrictions. (Const., sec. 7, Art. III; Robinson v. Richardson, 13 Gray (Mass.), 454; State v. Guthrie, 90 Me. 448, 38 Atl. 368.) In this state the statute has extended its use as an aid to the discovery and punishment of any character of public offense when it may be available; but this use of it may not be extended by construction to any ease not clearly covered by the statute. (Robinson v. Richardson, supra; 35 Cyc. 1266, and eases cited.) As was observed in State v. Guthrie, mpra: “It is a sharp and heavy police weapon to be used carefully, lest it wound the security or liberty of the citizen.”
The alleged intention on the part of Streit to violate the ordinance by conducting a saloon without first obtaining a town license did not justify the issuance of the warrant. The district court was therefore right in awarding the peremptory writ.
It was also right in adjudging costs against the defendant. In this class of cases the prevailing party is entitled to his costs as a matter of course. (Rev. Codes, secs. 7154, 7155.)
The judgment is affirmed.
Affirmed.
Me. Justice Smith and Me. Justice Holloway concur. | [
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JUSTICE WEBER
delivered the Opinion of the Court.
This is an appeal from the Worker’s Compensation Court of a judgment concluding that the claimant, David Dale, was injured during the course and scope of his employment. We reverse.
There are three issues on appeal:
1. Did the Worker’s Compensation Court err in determining that David Dale was injured in the course and scope of his employment?
2. Did the Worker’s Compensation Court correctly apply § 39-71-407(3), MCA?
3. Did the Worker’s Compensation Court err in failing to assess costs against the appellant?
David Dale (Dale) was a long haul trucker for Trade Street Inc. As part of his employment, he left Missoula, Montana on March 20,1991 and picked up a load of lumber at Townsend, Montana to be delivered by March 25, 1991 in Mount Clemens, Michigan. He then drove to Billings, Montana where he stayed at his sister’s home for two nights and a day.
On March 22,1991, Dale drove to the Flying J Truck Stop near Miles City, where his brother had previously arranged to meet him. Dale left the truck at the truck stop and rode into Miles City in his brother’s truck. It is difficult to tell what happened thereafter because neither Dale nor his brother, Lester “Buddy” Dale Jr. (Buddy), remember what occurred between 3:30 p.m. that afternoon and 9:30 p.m. that evening when they were involved in a single car accident. The accident occurred approximately one mile from the Flying J Truck Stop on the only road from Miles City to the Flying J Truck Stop.
Buddy, the driver of the vehicle, was cited at the accident for driving under the influence and the claimants’s blood alcohol content (BAC) was measured at 0.14. Other facts will be presented as necessary in the following portion of the opinion.
“Our standard for reviewing a decision of the Workers’ Compensation Court is to determine if there is substantial evidence to support the findings and conclusions of that court. Where there is substantial evidence to support the Workers’ Compensation Court, this Court cannot overturn the decision.” Garcia v. State Comp. Mut. Ins. Fund (1992), 253 Mont. 196, 198, 832 P.2d 770, 771-772. When the question is one of law or how particular findings of fact apply to the law, our scope is not so limited and we remain free to reach our own conclusions. Wassberg v. Anaconda Copper Co. (1985), 215 Mont. 309, 697 P.2d 909.
Appellant, State Compensation Mutual Insurance Fund (State Fund) argues that Dale had deviated from his employment at the time of the accident under consideration. Dale contends that the Workers’ Compensation Court had substantial evidence from which to conclude that Dale was injured within the course and scope of his employment.
In 1987, the legislature amended § 39-71-407, MCA, to codify exceptions to the general workers’ compensation rule that actions occurring when employees are going to or coming from work are not within the course and scope of their employment. This statute provides in pertinent part:
Liability of insurers - limitations. (1) Every insurer is liable for the payment of compensation, in the manner and to the extent hereinafter provided, to an employee of an employer it insures who receives an injury arising out of and in the course of his employment or, in the case of his death from such injury, to his beneficiaries, if any.
(3) An employee who suffers an injury or dies while traveling is not covered by this chapter unless:
(a) (i) the employer furnishes the transportation or the employee receives reimbursement from the employer for costs of travel, gas, oil, or lodging as a part of the employee’s benefits or employment agreement; and
(ii) the travel is necessitated by and on behalf of the employer as an integral part or condition of the employment; or
(b) the travel is required by the employer as part of the employee’s job duties. ...
Section 39-71-407, MCA.
We will discuss the 1987 statutory additions in our discussion of Issue II below. However, our determination of the controlling issue in this case is discussed in Issue I below and is based on existing case law interpretations of the course and scope of employment.
I.
Did the Workers’ Compensation Court err in determining that claimant was injured during the course and scope of his employment?
Axiomatic to a determination of workers’ compensation coverage is that the injured worker be injured in the course and scope of his employment. Section 39-71-407(1), MCA. It is well-established in Montana that traveling employees are not covered 24 hours a day, without limitation, regardless of the conduct or activity in which they are involved. See, e.g., Correa v. Rexroat Tile (1985), 217 Mont. 126, 703 P.2d 160. The employee must remain in the course and scope of employment while traveling in order for the injury to be compensable. Correa, at 129-31, 703 P.2d at 163.
Here, the Workers’ Compensation Court concluded that “the dis-positive issue was that the employee was compensated for the time, was on his employer’s business in being there and had not deviated from the employer’s business.” The Workers’ Compensation Court also concluded that Dale was considered to be within the course and scope of his employment because he was hauling a load of lumber en route from Townsend, Montana to Mount Clemens, Michigan. Although the load was not due until March 25, 1991, Dale had picked the load up in Townsend on March 20, 1991.
State Fund contends that prior case law does not support the Workers’ Compensation Court’s conclusion. It cites Ogren v. Bitterroot Motors, Inc. (1986), 222 Mont. 515, 723 P.2d 944, as support for its contention that Dale was not within the coruse and scope of his employment when he was injured. Ogren declares the factors to be considered in determining whether a deviation from the scope of employment is substantial enough to take an employee out of the employment context: (1) the amount of time taken up by the deviation; (2) whether the deviation increases the risk of injury; (3) the extent of the deviation in terms of geography; and (4) the degree to which the deviation caused the injury. Ogren, at 521-22, 723 P.2d at 948.
In Ogren, Erik Ogren of Bitterroot Motors flew a co-worker from Missoula to Great Falls in the company plane. From there, he proceeded to Sheridan, Wyoming to pick up his daughter from a beauty pageant and bring her home to Missoula. Ogren had trouble with the plane while in Wyoming and rented a car to complete the journey. He and his daughter were killed in an automobile accident caused when Ogren fell asleep and lost control of the vehicle while driving to Missoula. Ogren, at 517-19, 723 P.2d at 945-46.
The Workers’ Compensation Court concluded that Ogren was not within the course and scope of his employment. On appeal, this Court determined that the trip from Great Falls to Sheridan was personal, was not a minor deviation and did not fall within the exception to the “going and coming” rule. Ogren, at 519-21, 723 P.2d at 947. In applying the deviation factors to determine that the deviation was substantial, we concluded that the deviation occurred over a period of 11 hours which was much longer than a round trip from Missoula to Great Falls, the business-related portion of his trip. Also, the deviation spanned 744 miles as compared to 336 miles for the business aspect of the trip. “This is clearly a case where the personal deviation completely dwarfed the business purpose.” Ogren, at 522-24, 723 P.2d at 949. As for the two remaining factors, the trip to Sheridan and then on toward Missoula not only increased the risk of injury, it was the main reason the deaths occurred. We also cited with favor a quote from Calloway v. State Workmen’s Comp. (1980), 165 W.Va. 432, 268 S.E.2d 132, as follows:
In the case of a major deviation from the business purpose most courts will bar compensation recovery on the theory that the deviation is so substantial that the employee must be deemed to have abandoned any business purpose and consequently cannot recover for injuries received, even though he has ceased the deviation and is returning to the business route or purpose.
Ogren, 222 Mont. at 521-22, 723 P.2d at 948.
The Workers’ Compensation Court considered the facts of the present case to be similar to Gordon v. H.C. Smith Const. Co. (1980), 188 Mont. 166, 612 P.2d 668. We do not agree. Gordon, an electrician who lived in Butte but was working near Lewistown, maintained a temporary residence at the Brand T Motel in Lewistown. On May 1, 1978, Gordon worked a full day at the work site which was about 24 miles northeast of Denton, Montana. Shortly after work, Gordon met some of his coworkers at the Denton bar for beer and pool. They left the bar at approximately 10:00 p.m. and drove toward Stanford, where Gordon customarily stayed, rather than returning to Lewis-town. Gordon was a passenger in a truck driven by a co-worker who had his quarters in Stanford. A few minutes after leaving the Denton Bar, the truck went off the road and Gordon was killed.
Gordon’s employment contract provided for $22 daily in subsistence pay when working more than 54 miles from the home office. In concluding that his compensation for travel qualified the claimant for workers’ compensation coverage, we reasoned as follows:
Because the union contract singles out for special consideration a travel allowance and it is paid as an incentive to get men onto jobs and results in a reasonable benefit to an employer, then while the employee is “traveling” enroute to or from work, any injury is within the exception and arises out of and in the course and scope of employment.
Gordon, at 171-73, 612 P.2d at 671.
In this case, although Dale received a subsistence allowance and was paid for each mile he traveled, he was not paid for traveling to or from work. He was paid for the actual miles traveled during work. Unlike Gordon, it was not an incentive to get him to his place of employment. Also unlike Gordon, Dale’s subsistence pay was not an incentive to get him to work in a remote location. We conclude that the Workers’ Compensation Court was incorrect in holding that Gordon was controlling here.
As for the alcohol consumption, we previously stated that the alcohol factor alone does not establish a deviation from the course and scope of employment. Gordon, at 173-75, 612 R2d at 672. See also Steffes v. 93 Leasing Co. (1978), 177 Mont. 83, 580 P.2d 450; and Parker v. Glacier Park, Inc. (1991), 249 Mont. 225, 815 P.2d 583. In Parker, we found no deviation from the course and scope of employment, stating:
We refuse to overrule thirteen years of precedent to hold that an employee who may be under the influence of alcohol, without having abandoned the course of his employment, is precluded from recovering under the workers’ compensation system.
Parker, at_, 815 P.2d at 586. The claimant in Parker had not abandoned the course and scope of his employment. Although he consumed several beers, he had done so while also working on employment-related tasks after driving to another work location. He wrecked his car while driving back to the first work location to speak with another employee about business-related matters. There was no evidence that the claimant was acting outside the scope of his employment at that time. Parker, at 229-30, 815 P.2d at 586.
In this case, however, there is no evidence that Dale was attending to employment-related matters. In Courser v. Darby School Dist. #1 (1984), 214 Mont. 13, 16-17, 692 P.2d 417, 419, we discussed a four-part test to determine if an injury was work related: (1) whether the activity was undertaken at the employer’s request, (2) whether the employer directly or indirectly compelled the employee’s attendance at the activity, (3) whether the employer controlled or participated in the activity, and (4) whether both employer and employee mutually benefitted from the employee’s attendance at the activity. Dale’s actions do not fit within any of these factors. For an injury received while traveling, there must be some identifiable benefit to the employer. Steffes, 177 Mont. at 87-88, 580 P.2d at 453. We conclude that Dale was injured during a six-hour period when he had temporarily abandoned the course of his employment and during which he attended to no employment-related matters. During the deviation from his scheduled route, the continuity ofD ale’s employment here was severed and remained so as he had not returned to the point of deviation from the path of duty.
Although the employer permitted its drivers to visit relatives along the route, there is no evidence that visits such as Dale’s Miles City trip were contemplated. The employer’s policy manual states that the equipment is to be routed according to a computer map and no deviations are allowed for off-route usage and that equipment is not to be used for any reason as a personal conveyance without prior authorization. Dale’s supervisor testified that time spent “goofing off’ is considered “off-duty” or personal time of the driver. Dale also testified that he considered himself to be “off-duty” while he visited his sister. Dale testified that, as far as he could remember, the sole purpose for the Miles City stop was to visit his brother. During this “off-duty” time, he consumed alcohol with his brother.
Dale’s visit to his brother was a substantial deviation from Dale’s employment. We reach the conclusion that there was a substantial deviation in Miles City by applying the Ogren factors to the facts of this case. The first Ogren factor is the amount of time taken up by the deviation. Although the time spent here was several hours less than in Ogren, when considered with the second factor, whether the deviation increases the risk of injury, it becomes substantial. Six hours of drinking with a companion and then having that companion drive back six miles to the location of the claimant’s truck greatly increased the risk of injury. Similarly, the third factor, the extent of the deviation in terms of geography, becomes accentuated here, although it was a relatively small deviation when compared with that in Ogren. When considered in terms of the activity claimant engaged in, however, it, too, becomes substantial. The fourth factor, the degree to which the deviation caused the injury, is also significant here. The deviation was the cause of the injury. The Workers’ Compensation Court deemed the geographical distance to be of paramount importance here as in Ogren. However, other factors in this case outweigh the significance of geographical distance.
Applying the Ogren factors to this case, we conclude that Dale’s injury occurred while he was engaged in a substantial deviation from his employment. We conclude, therefore, that the Workers’ Compensation Court erroneously held that Dale’s acts were within the course and scope of his employment.
We hold that Dale was not injured within the course and scope of his employment.
II.
Did the Workers’ Compensation Court correctly apply § 39-71-407(3), MCA?
Sections 39-71-407(2)-(4), MCA, were added by the legislature in 1987. Section 39-71-407(1), MCA, remained intact. Section 1-2-101, MCA, requires the courts to construe the several provisions of a statute to give effect to all, if possible.
There is no evidence that the legislature intended to provide that employees would be covered under § 39-71-407(3) even though they did not meet the § 407(1) requirement that the injury arise in the course of employment. Nor is there evidence that the legislature intended that traveling employees be covered 24 hours a day, no matter what they are doing, how they are doing it, or how far removed the activity engaged in by the employee is from the employer’s business purpose.
In applying § 39-71-407(3), MCA, to the present action, the Workers’ Compensation Court judge concluded that:
It is undisputed in this case that the claimant was driving his employer’s truck when he went to Miles City, thus he fits within section 39-71-407(a)(i). Additionally, the payment of “subsistence” money clearly encompasses meals and lodging expenses. A worker cannot reasonably be expected to eat and sleep in his truck. Whether claimant was in Miles City to eat or not is unknown but what is known is that he was in Miles City, enroute to Michigan and clearly was there as a part of his job. It is also undisputed that driving was, not only a necessary, integral part of the job, but was the job itself, thus claimant satisfies (a)(ii) and (b). Since it is also undisputed that he was not injured as a result of his use of alcohol subsection (4) does not apply. (Emphasis in original.)
Section 407(3)(a)(i), MCA, states that workers are covered by employers if the employer furnishes the transportation or the employee receives reimbursement from the employer for travel costs as part of the benefits of an employee agreement. Dale was paid twenty one cents per mile driven, with six cents as “subsistence” pay. Transportation was provided for Dale by the employer and he received subsistence pay for meals, lodging and other travel costs as part of his employment. There is substantial evidence that Dale falls within § 39-71-407(3)(a)(i), MCA.
Dale contends that he also qualifies under § 407(3)(a)(ii) because travel is not only necessitated by and on behalf of the employer, and is not just integral to the employment, but it is the employment itself. He makes a similar argument under § 407(3)(b). Under both §§ 407(a)(ii) and (b), reference is made to “the travel” not “travel” in general. These sections refer to travel that is necessitated by and on behalf of the employer or required by the employer in order to carry out the job. The travel to Miles City was necessitated by and on behalf of the employer; the side trip to Miles City to visit the brother was not. The fact that the employer allowed visits to family members along the route does not transform such visits to travel contemplated by § 407(3). We conclude that § 39-71-407(3) does not require a change in the conclusion reached above in Issue I.
Our conclusion is not without consideration of the employee’s needs when travel is the nature of the job. Indeed, no one can argue that certain stops along the way are not essential for eating, sleeping and taking breaks. These stops benefit the employer as well as the employee. It is only when the employee substantially deviates from the employer’s business that he is not covered for injuries arising during the time which can reasonably be considered as the abandonment of the course of the employment. We conclude the Workers’ Compensation Court was incorrect in its application of § 39-71-407(3), MCA.
III.
Finally, Dale argues that the Workers’ Compensation Court should have assessed costs against State Fund under § 39-71-611, MCA. However, Dale did not cross-appeal this issue and therefore, this Court will not address the issue. “[T]he respondent must file a cross-appeal when seeking review of issues not raised by appellant.” Baldwin v. Orient Express Restaurant (1990), 242 Mont. 373, 377, 791 P.2d 49, 51.
Reversed.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, TRIEWEILER and HARRISON concur. | [
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MR. CHIEF JUSTICE HASWELL
delivered the opinion of the Court.
Farmers State Bank brought this action to collect on a promissory note executed by Imperial Cattle Company (Company). In addition, the Bank asserted a claim against James and Phillis Edmiston for conversion of property in which the Bank held a security interest as security for the note. Following depositions the Bank moved for summary judgment. The Edmistons did not file affidavits or briefs in response to the motions. Summary judgment in favor of the Bank and against all of the defendants was entered. Only the Edmistons appeal.
The Company was incorporated in 1967 by appellant and two other individuals not involved in this suit. The Company remained dormant until defendants Lillethun and Rock became involved and began engaging in the dairy business in March of 1973. James Edmiston was president and Rock and Lillethun became vice-presidents of the corporation.
In March, 1973, Edmiston was in financial difficulties and needed to obtain refinancing of certain items of machinery. He contacted Western Farm Bureau, and a loan was made for the refi nancing. This loan was taken under the name of the Company and Western was told that the equipment belonged to the Company. The Company insured the equipment with the Wyoming Farm Bureau. The loan was also personally guaranteed by Edmiston.
In May, 1973, the Bank began to loan money to Lillethun. These loans were secured by milk assignments and were guaranteed by Rock. According to the depositions the money from the loans was put into the Company checking account and used to meet Company expenses such as the payroll and cattle feed. By March 1, 1974, these loans amounted to $35,600. On that date the Company executed a note with the Bank for $35,810.79. Rock and Lillethun signed this new note in their corporate capacity as vice-presidents of the Company. The money from the new loan was used to pay in full the Lillethun loans. This note was also personally guaranteed by Rock and Lillethun. To secure the note the Company also executed and delivered to the Bank a security interest in certain equipment which was in the name of the Company. This was the same equipment which was covered by the loan made by Western Farm Bureau and insured by the Wyoming Farm Bureau.
At the same time that the Bank entered into the loan with the Company, the Bank also required Rock and Lillethun to personally sign a note for the same amount ($35,810.79). The banker who made the two loans said that the second loan was “to emphasize that I’m looking to them [Rock and Lillethun] also personally if Imperial Cattle Company did not pay.”
Apparently, Edmiston was not active in the management of the dairy. This was left to Lillethun, and Rock. As to Edmiston’s knowledge of the loans being made to Lillethun, Edmiston testified in his deposition as follows:
“Q. And you knew that they had, they were dealing with the bank as far as getting funds to operate Imperial Cattle?
“A. Yes.
“Q. Okay. A. Well, I don’t want to give you the impression that I knew anything about the dealings of the bank because I did not.
“Q. Without asking you as to knowledge of specific transactions, I am speaking in general terms. A. They told me they’d be able to do business with the Victor Bank.
“Q. And you knew that they had been doing business with the bank as far as borrowing money for Imperial Cattle?
“A. Yes.
“Q. The bank at Victor? A. Yes.”
Lillethun testified in his deposition that he was sure that Edmiston knew of the loans and that Edmiston knew the money was being used to operate the Company “. . . because this had been the pattern of our operation from the . . . beginning.” Rock testified to the same effect.
Rock and Lillethun executed the $35,810 corporate note and the security agreement pursuant to a corporate resolution of the Company. This resolution, adopted on March 6, 1973, provided in part:
“Be it further resolved that the President, Vice-president, and the Secretary-Treasurer or any two of them sháll be authorized and empowered to act in the name of the corporation and execute and deliver any note, mortgages, leases, security agreements, or other instruments evidencing indebtedness for money so borrowed.”
The security agreement which secured the note had a provision which stated that the sale of the collateral constituted a default. Before any action to collect on the note was commenced Edmiston sold some of the secured equipment. The proceeds of the sale were not transferred to the Company or to the Bank.
The sole issue which this case presents is whether the District Court erred in entering summary judgment against the Edmistons.
This Court in Anderson v. Applebury (1977), 173 Mont. 411, 567 P.2d 951, made the following observations:
“The principles governing summary judgment under Rule 56(c), M.R.Civ.P., were recently detailed in Harland v. Anderson, [169 Mont. 447], 548 P.2d 613 [33 St.Rep. 363]. Summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file show there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. The initial burden of establishing the absence of any genuine issue of material fact is upon the movant. The party opposing the motion will be afforded the benefit of all reasonable inferences which may be drawn from his offered proof. Mally v. Asanovich, 149 Mont. 99,423 P.2d 294; Johnson v. St. Patrick’s Hospital, 148 Mont. 125, 417 P.2d 469. However, where the record before the court discloses no genuine issue of material fact, the burden shifts to the party opposing the Rule 56(c) motion to come forward with proof establishing such a genuine factual issue. Harland v. Anderson, supra; Rickard v. Paradis, 167 Mont. 450, 539 P.2d 718; Barich v. Ottenstror [170 Mont. 38], 550 P.2d 395 [33 St.Rep. 481].” 173 Mont. at 414-15, 567 P.2d at 953, 954.
This Court is still guided by the principles enunciated in Anderson.
The Edmistons contend that a material question of fact exists as to the authority of Lillethun and Rock to sign the note in their corporate capacity. This contention is based on the argument that the corporate resolution, cited above, does not allow two vice-presidents to sign such a note. The Edmistons argue that the resolution requires either the president or the secretary-treasurer, if not both, to be parties to any borrowing that, the Company might engage in.
This contention is actually a legal argument. The material facts are not disputed. The resolution was in effect at the time the loan was made and Rock and Lillethun, as vice-presidents, signed the note. Whether they were parties capable of contracting, under these facts, is a legal question.
Section 1-4-101, MCA, states, in part:
“In the construction of an instrument, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted ...”
The resolution states “.. . that the President, Vice-president, and the Secretary-Treasurer or any two of them . . .” are empowered to act in the name of the Company. This language in dicates that corporate officers from at least two of the three above-designated titles must sign the note or the security agreement. In other words, either the President or the Secretary-Treasurer or both of them would have to join the vice-presidents in any action taken pursuant to this resolution.
The question of whether the Company is bound by the note and security agreement, however, does not end with a finding that the resolution did not permit Lillethun and Rock to act on these matters. In Edwards v. Plains Light & Water Co. (1914), 49 Mont. 535, 143 P. 962, this Court had occasion to consider whether a corporation could be bound by the corporation president’s contracts when the contract was outside of the president’s authority.
This Court said:
“. . . It is well settled, however, that when the corporation entrusts to its president the active management of its business, he may bind the corporation by contracts which are within the scope of the powers of the corporations, and which are necessary or proper or usually made in the conduct of its business. (Citations omitted.) The fact that he is permitted by the board of directors to occupy the position of such an agent, carries with it the implication that he has been clothed by it with all the powers necessary to enable him to carry forward the ordinary business of the corporation; and when, as in this case, the board of directors, the members of which hold all the shares, either by direct action evidenced by a by-law or a resolution, or by continued acquiescence, authorizes or permits the president to exercise all its powers and functions, the board itself remaining entirely inactive, he becomes, for the time being, the board of directors, with all the powers it possesses, and the corporation cannot thereafter question the validity of any act done by him within the scope of its legal powers.” 49 Mont, a 545, 143 P. at 964, 965.
This principle has been explained by the Supreme Court of Delaware in Mulco Products v. Black (1956), 50 Del. 246, 127 A.2d 851, as follows:
“. . . even if authority were lacking yet if the corporation received and retained the fruits of the loan it is estopped to deny authority in Welch to borrow the money. This principle is settled beyond question.” 127 A.2d at 856.
The facts of the instant case lend themselves to this rule of law. Edmiston had allowed Lillethun and Rock to operate the dairy business. Practically from the day the business was started the vice-presidents were required to borrow money on a short term basis. They borrowed money from the Bank for the Company at least ten times in the year preceding the March 1, 1974 note and these loans were secured by corporate milk assignments. This money was put directly into the Company’s checking account and used to pay Company obligations. The $35,810 corporate note executed on March 1, 1974, was used as a mechanism to consolidate the previous loans and to provide additional security for the Bank. As noted above, Edmiston knew that the vice-presidents were borrowing money from the Bank for the Company. He might not have known all of the details but he cannot now interpose a defense based on the corporate resolution. Pue v. Northern Pacific Ry. Co. (1926), 78 Mont. 40, 252 P. 313. As is stated in 2 Fletcher Cyc. Corp. (Perm.Ed.) § 773:
“A private corporation by accepting and retaining the fruits or benefits of an unauthorized contract or other transaction made or entered into by one of its officers thereby ratifies it and will be es-topped to deny its validity and binding effect, unless the contract or transaction is in violation of some positive law or well-settled rule of public policy.”
The Edmistons next contend that there exists a genuine issue of a material fact on whether the note of March 1,1974, was for a valuable consideration. On that date a second note for the same amount was signed by Rock and Lillethun in their personal capacity. This was a device used by the bank to have additional security for the loan. The note signed by Rock and Lillethun in their personal capacity was not processed by the Bank and was never put on the Bank’s books as an obligation.
The Edmistons contend that the presence of two notes creates a material fact as to which note was supported by valuable consideration. The Bank is only suing on the first note, signed by Rock and Lillethun in their corporate capacity. This note was issued by the Bank, to the Company, in order to cover the prior debts of Rock and Lillethun. Because the second note is not being sued upon, whether it is supported by valuable consideration need not be decided at this time. It is only the first note that need be considered here.
Section 28-2-801, MCA, provides:
“Any benefit conferred or agreed to be conferred upon the promisor by any other person, to which the promisor is not lawfully entitled, or any prejudice suffered or agreed to be suffered by such person, other than such as he is at the time of consent lawfully bound to suffer, as an inducement to the promisor is a good consideration for a promise.”
Section 28-2-802, MCA, provides:
“An existing legal obligation resting upon the promisor, a moral obligation originating in some benefit conferred upon the promisor, or prejudice suffered by the promisee is also a good consideration for a promise to an extent corresponding with the extent of the obligation, but no further or otherwise.”
This Court has said that a prior debt is sufficient to constitute consideration. S-W Company v. Schwenk (1977), 173 Mont. 481, 568 P.2d 145, 148. In the present case, the note represented an accumulation of previous loans borrowed by Lillethun and Rock for Company purposes. This represents sufficient consideration and does not present a material issue of fact.
The Edmistons next contend that there is an issue of fact presented as to whether the assets listed in the security agreement were owned by the Company, and whether the Bank acted justifiably and in good faith in regard to its belief concerning the ownership of the assets listed in the security agreement. These assets, which served as collateral, had been treated by Edmiston as though they were corporate property. The Company listed these assets in a financial statement that reflected the loan from Western Farm Bureau as a liability. These assets were also incurred by the Company. The Bank officer who made the loan relied upon these documents as expressions of Company ownership and the security agreement was based upon these documents.
Section 26-1-601(3), MCA, states:
“. . . whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true and to act upon such belief, he cannot in any litigation arising out of such declaration, act, or omission be permitted to falsify it . . .”
This is a conclusive presumption by statute. As a matter of law Edmiston may not allege that the Company did not own the property. Edmiston allowed the Bank to rely on the documents; consequently no material issue of fact is presented in this regard.
Finally, the Edmistons contend that there is a genuine question of material fact as to whether the Edmistons may be held individually liable for a corporate debt. The pleadings in this case show that the Bank was suing the Company on the note, and they were suing Rock and Lillethun as endorsers and guarantors of the note. The claim against the Edmistons was based on conversion. The claim, in other words, is not based upon Edmiston’s status as a shareholder. Under circumstances other than those presented by this case, the issue could be framed as follows: Is the Bank entitled to recover against the Edmistons as a matter of law on a conversion theory? In the present case, however, we decline to reach this issue. We hold that the Edmistons are estopped from defending against the Bank’s conversion action.
As noted above, section 26-1-601(3), MCA, prevents a party from denying any intentional act which has led another to believe a particular thing and to act upon that belief. The predecessor to this statute was considered in Waddell v. School Dist. No. 2 (1925), 74 Mont. 91, 96, 238 P. 884, and this Court said that the statute gives the basic principle of equitable estoppel. In Hustad v. Reed (1958), 133 Mont. 211, 223, 321 P.2d 1083, this Court said:
“ ‘ . The following six essential elements have been held necessary to constitute an equitable estoppel: ‘ 1. There must be conduct — acts, language, or silence — amounting to a representation or a concealment of material facts. 2. These facts must be known to the party estopped at the time of his said conduct, or at least the circumstances must be such that knowledge of them is necessarily imputed to him. 3. The truth concerning these facts must be unknown to the other party claiming the benefit of the estoppel, at the time it was acted upon by him. 4. The conduct must be done with the intention, or at least with the expectation, that it will be acted upon by the other party, or under such circumstances that it is both natural and probable that it will be so acted upon. 5. The conduct must be relied upon by the other party, and thus relying, he must be led to act upon it. 6. He must in fact act upon it in such a manner as to change his position for the worse; in other words, he must so act that he would suffer a loss if he were compelled to surrender or forego or alter what he has done by reason of the first party being permitted to repudiate his conduct and to assert rights inconsistent with it.’ ” ’ [117 Mont. 255, 161 P.2d 640.]”
Edmiston, although claiming to own the equipment personally, knew it was listed as an asset of the Company on financial statements and other documents. Edmiston knew that Lillethun and Rock were borrowing from the Bank for Company purposes. Edmiston should have known that the Company documents which listed the equipment as assets were being used to secure loans from the Bank. At the very least, he created a situation where the Bank had a right to believe that the equipment was Company property. The Bank officer who made the loan based the security agreement on the Company documents which listed the equipment as Company assets. This indicates that he believed that the Company did own the property.
Under these facts, the Edmistons are estopped from denying that they converted the property. By allowing others to rely on the documents which purported to show Company ownership of the property, the Edmistons cannot now assert that they are the true owners. Consequently, they will not be allowed to say that they did not convert the property.
Affirmed.
MR. JUSTICES DALY, HARRISON, SHEA and SHEEHY,. concur. | [
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] |
MR. JUSTICE SHEEHY
delivered the opinion of the Court.
This is an appeal from an order entered in Choteau County District Court denying Robert G. Winters’ petition for modification of a divorce decree.
Loretta M. Winters and Robert G. Winters were married on June 2, 1956 in Columbus, Montana. Four children were born the issue of the marriage, two of which reached the age of majority prior to the order now in question. Because of irreconcilable differences, a divorce complaint was filed by Loretta Winters on December 10, 1974. A decree of divorce was granted January 14, 1975.
A property settlement was incorporated into the decree of divorce. Custody of the couple’s four children was awarded to Loretta. The decree provided for the support and maintenance of these children and the home as follows:
“The Defendant [is ordered to] pay Plaintiff the sum of $500.00 per month as and for the support and maintenance of the said minor children and the support and maintenance of a home, and further defendant to pay for all reasonable medical, dental, optical, doctor and hospital expenses required for and on behalf of said minor children, and in accordance with the provisions of Exhibit A hereto attached for the period of 10 years from and after the date hereof.”
Robert Winters has fulfilled this provision without fail since the time of issuance of the decree.
Robert Winters filed a petition and affidavit for modification of the decree on April 17, 1978 requesting a reduction of payments to an amount of $ 125 per child per month during minority, i. e. $250 per month total. The change was precipitated by the following summarized factors according to the petition:
(1) Mrs. Winters’ financial situation has changed in that although unemployed and without income at the time of the divorce, she is now earning a net income of $800 per month as an automobile service manager and additionally has recently inherited property.
(2) Only two of the four children are still minors and the remaining two are not at home nor attending college;
(3) Mr. Winters, recently divorced from his second wife is now without her additional income which has enabled him in the past to make the monthly payments, is left with a net income of $1,160 per month and unable to continue the payments at the previous rate.
The first hearing on the petition was held April 23, 1979. No testimony was presented. However briefs were to be filed concerning authority of the District Court to modify the agreement. Argument on this point centered on the question of whether the decree could be modified because of the words therein denominated “child support”, or whether it was the intent of the parties via the agreement to guarantee an income of $500 per month for ten years as part of the property settlement which was incorporated into the divorce decree. During argument, the question of duress was introduced into the case.
A final hearing was held on August 14, 1979. At that time respondent moved that the petition be dismissed and that the sole issue the court consider be duress or fraud upon the court, and that all testimony be so restricted. The court in effect so restricted the testimony.
The court entered its findings and conclusions on August 22, 1979 denying the petition to modify. The court found the existence of an agreement “settling the parties (sic) property rights and [which] provided for support of the minor children.” It went on to find that Mr. Winters agreed to the demand of payment of $500 per month for ten years in return for Mrs. Winters not contesting the divorce which would “drag the husband’s lover through the mud.” No duress or fraud was found nor were any circumstances found to make the divorce unconscionable.
It is from this order which Robert Winters appeals.
Appellant frames the issues for our review as follows:
(1) Did the District Court err in determining the agreement could not be modified?
(2) Did the District Court err in curtailing the evidence presented?
(3) Did the District Court have authority, upon the record before it, to make the findings and conclusions it did?
(4) Did the District Court make findings and conclusions sufficient to warrant the order it made?
(5) Are the findings of fact supported by the evidence?
The basic conflict which arises in this case is as follows: the husband contends the decree provision constitutes a child support issue which may be modified whereas the wife contends and the District Court agreed, the provision constitutes a contractual issue and therefore may not be modified without the mutual consent of both parties. We affirm the decision of the District Court.
It is clear to this Court that the contested payment provision creates a contractual obligation on the part of the husband to pay to the wife the amount of $500 per month for a period of ten years as a minimum sum to be used for the support and maintenance of the children and home. This contractual obligation is based on a quid pro quo which is the consideration for the contract. The court stated in its findings:
“The husband had found another woman and wanted a divorce so that he could marry her. The wife advised her husband that unless he agreed to pay the sum of Five Hundred Dollars ($500.00) per month as child support for the support of the children and for the purpose of support and maintenance of a home for a period of ten (10) years, that she would contest the divorce and ‘drag the husband’s lover through.the mud.’ The husband chose to agree to meet the demands of the wife. Under those provisions the Property Settlement Agreement was signed by the parties, incorporated into the Decree, and the husband shortly thereafter married his girlfriend.”
The payment provision of the contract is integral to the agreement of the parties, as a matter of law. The provision may not be chopped-up and modified as the husband advocates without destroying the contract itself. See Washington v. Washington (1973), 162 Mont. 349, 512 P.2d 1300.
What we hold here has no bearing on the power of the court to modify agreements of the parties regarding child support in later applications. Butler v. Brownlee (1969), 152 Mont. 453, 451 P.2d 836. The question before the court here did not involve the welfare of the children, in which event the court could modify any agreement of the parties to achieve their protection. Gessell v. Jones (1967), 149 Mont. 418, 427 P.2d 295. Instead, the District Court was presented with a provision of contract law. The courts will not relieve a party of his contractual agreement, in light of after events. Link v. State By & Through Dept. Of Fish & Game (1979), 180 Mont. 469, 591 P.2d 214; Meyer v. Diesel Equipment Co., Inc. (1977), 1 Kan.App.2d 574, 570 P.2d 1374; Wilson & Co. v. Fremont Cake & Meal Co. (1950), 153 Neb. 160, 43 N.W.2d 657. That is the situation here.
The decision of the District Court is affirmed.
MR. CHIEF JUSTICE HASWELL and JUSTICES DALY, HARRISON and SHEA, concur. | [
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] |
MR. JUSTICE DALY
delivered the opinion of the Court.
The District Court’s order suppressing the evidence on the basis of State v. Jetty (1978), 176 Mont. 519, 579 P.2d 1228, 35 St.Rep. 739, is affirmed.
MR. CHIEF JUSTICE HASWELL and JUSTICES HARRISON, SHEA and SHEEHY concur. | [
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MR. CHIEF JUSTICE HASWELL
delivered the opinion of the Court.
In an action by the sellers of a farm to recover a real estate commission and treble damages, the District Court granted summary judgment in favor of the real estate broker and dismissed the broker’s counterclaim for malicious prosecution. Both parties appeal from the respective judgments against them.
In 1970 Jack Sisson and his brother Mark owned a ranch in Judith Basin County, Montana. The ranch consisted of about 8,400 acres of deeded land and about 6,320 acres of leased and together with livestock, machinery, and improvements. The defendant was at all times pertinent to this case a licensed real estate broker. In October 1969, the Sissons executed a real estate broker’s contract authorizing the defendant to sell the Sissons’ real property for $800,000. The defendant was unable to complete a sale and the contract expired on May 1, 1970. The Sissons thereafter had the ranch listed with two or more other real estate brokers, but no sale was consummated at that time.
On about December 6, 1972, the Sissons again sought defendant’s services in selling the ranch. Defendant sought another broker’s contract but was unsuccessful. He did, however, begin looking for a purchaser and determined that an area rancher, Bill Skelton, was interested in purchasing the real property only for $700,000. Without informing the Sissons of Skelton’s interest in the land, the defendant attempted to persuade the Sissons to separate the livestock and machinery from the real estate for separate sale. The Sissons declined because they wanted a single sale.
On or about December 14, Floyd Hicks, a cattle buyer, expressed an interest to the defendant in purchasing the cattle and machinery. Bill Skelton was apparently still interested in buying just the land at this time for $700,000. Defendant then approached the Sissons and apparently left them with the impression that Hicks wanted to buy the entire ranching operation for $900,000. The reason defendant did not tell the Sissons that Hicks was only interested in the cattle and machinery and that Skelton was to put up the money for the land was given in the following testimony of defendant broker:
“Q. Did they know who the buyer was?
“A. No.
“Q. Was there a reason why you did not tell them who the buyer was? A.'Yes.
“Q. What was the reason? A. Well, Jack Sisson had fights with all his neighbors. When I had the place sold to Sanmeyer, he refused to go because he didn’t like Sanmeyer. I knew the same thing would happen if I told him who the buyer was, so I didn’t tell him the buyer. The buyer was a very good buyer, substantial money, good backing, but for personal reasons, Jack wouldn’t have sold, probably — that is my surmise.”
On December 18, the Sissons told defendant that they would sell to Hicks for $900,000. Defendant and Hicks went to the Sisson ranch, and a purchase agreement was drawn up but not signed. Defendant and Hicks then went to Skelton’s ranch and discovered that Bill Skelton was beginning to change his mind about buying the entire Sisson ranch. The Sissons, in the meantime, discussed the proposed sale with their accountant, who suggested that the sale price be allocated $675,000 for the land and $225,000 for the personal property. The Sissons contacted the defendant and a new purchase agreement was prepared on December 20 pursuant to the accountant’s advice. Hicks was not present at this meeting, but had given defendant $20,000 earnest money for a deposit on the property. The Sissons signed the agreement at this time.
On December 21 defendant again visited the Sissons. By this time defendant knew that Bill Skelton was no longer interested in purchasing all of the Sisson land. During the visit, the defendant informed the Sissons that Hicks could not handle the deal alone and that defendant would have to go in with Hicks. Defendant also informed the Sissons, during this visit, that he wanted five separate deeds so that the ranch could be resold in parcels. On December 29, the Sissons, Hicks, and defendant met; the buy and sell contract was signed; and the earnest money was paid.
The District Court found that throughout the time defendant was attempting to sell the ranch, he was in contact with several neighbors and that some of these neighbors were interested in buying parcels of the ranch. The District Court also found that defendant had not made any deals to resell the parcels until after the closing date on December 29, 1972.
Within eleven days from the date when the defendant and Hicks bought the ranch, the land was resold in parcels for $800,000. The cattle, hay and equipment were eventually resold for $279,657.39. This resulted in a $179,657.39 profit for defendant and Hicks. In addition, defendant earned a commission on the sale of $45,000.
The amended complaint alleges that defendant breached his fiduciary duty by failing to disclose to the Sissons the fact that he had been conducting negotiations to resell the parcels and that defendant had violated certain statutes governing the conduct of real estate brokers. Defendant’s answer, among other things, included a counterclaim for malicious prosecution. During the pendency of the actions, Jack Sisson died and the First Trust Company of Montana, the personal representative of his estate, was substituted as plaintiff in the action.
Both parties moved for summary judgment. The District Court issued findings of fact, conclusions of law, and judgment denying plaintiff a summary judgment and granting defendant a summary judgment. Additionally, the District Court granted plaintiff’s motion for dismissal of defendant’s counterclaim. Plaintiff appeals from the summary judgment against it, and defendant cross-appeals from dismissal of his counterclaim.
The plaintiff has listed several issues which may be summarized as follows:
1. Did the District Court err in granting summary judgment in favor of the defendant?
2. Did the District Court err in dismissing the malicious prosecution counterclaim for failing to state a cause of action?
Rule 56(c), M.R.Civ.P., provides that summary judgment shall be rendered if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. In the present case the District Court granted defendant’s motion for summary judgment because the court concluded there was no issue of material fact as to the breach of any duty by the defendant, in this connection, the District Court also concluded that defendant had acted in good faith in his dealings with the Sissons. Obviously, the District Court felt that the duty a broker owes to his principal is a duty of good faith and that defendant did not breach his duty.
In the recent case of Lyle v. Moore (1979), 183 Mont. 274, 599 P.2d 336, this Court had occasion to consider the duty of disclosure which a broker owed to his principal. That case involved a clause in a broker’s agreement which said, among other things, that the broker was entitled to a commission if the defendants withdrew the broker’s authority to sell before a certain date. The defendants withdrew the authority before that date and the plaintiff sued for his commission. The defendants claimed they did not understand the terms of the contract. The District Court held this did not excuse the defendants and gave judgment for plaintiff. This Court reversed, finding that plaintiff had failed in his duty to explain the provision granting the broker his commission if the defendants withdrew his authority prior to a specified date. This Court said, “[i]n Carnell v. Watson (1978), [176 Mont. 344] 578 P.2d 308, 312, 35 St.Rep. 550, 555, we recognized a fiduciary relationship between a real estate broker and his client. This fiduciary relationship between a broker and his client has been found to encompass a ‘duty of full disclosure’ by a number of courts.” 599 P.2d at 337. We went on to say: “. . . there are times when the law imposes a duty upon a party to speak rather than remain silent and thereby to disclose information to place the person with whom he is dealing on an equal footing with him. The failure to speak in such a case amounts to the suppression of a fact which should have been disclosed and constitutes fraud.” 599 P.2d at 339. (Citations omitted.)
A broker has a duty to act in good faith toward his client. Embodied within this duty is a requirement to make full disclosure. This duty to disclose all pertinent facts becomes particularly important where the broker is himself buying the property. See Crowley v. Rorvig (1921), 61 Mont. 245, 203 P. 496.
This principle is set forth in Comment A to Restatement of Law, Agency 2d, Section 390, in the following language:
“. . . Refore dealing with the principal on his own account, however, an agent has a duty, not only to make no misstatements of fact, but also to disclose to the principal all relevant facts fully and completely. . .”
12 Am.Jur.2d Brokers § 91 at 844 states:
“The general rule is that a broker can neither purchase from, nor sell to, his principal unless the latter expressly assents thereto or, with full knowledge of all the facts and circumstances, acquiesces in such transaction. Moreover, even though the principal gives his assent to a purchase or sale by the broker, the latter’s actions throughout must be characterized by the utmost good faith. In the event of any litigation between him and his employer, the burden is upon him to prove both the permission and the exemplary manner in which he availed himself of it. The reason is that it is inconsistent for one to act as a principal in his own behalf while he is duty bound to act as the agent of another, for in the latter capacity he is bound to exercise his best skill and labor and a high degree of fidelity and good faith to secure for his principal the best bargain possible, even though his own conflicting interests at the same time impel him to do just the opposite and thereby gain the most advantageous terms for himself..”
In the present case, defendant orally agreed to buy the land on December 21, 1972. On December 29 the papers were signed and a check was given to the Sissons. Defendant testified that on December 22 he offered the entire ranch to Henry Wortheimer for $950,000. Wortheimer later declined the offer. Defendant did not inform the Sissons that this offer was outstanding. He testified:
“Q” Why did you not tell them? A. Well, we made a deal to buy on the 20th, as far as I was concerned, and it was sold on the 20th. It was now my obligation to try to pick up the pieces. I was in a position I had to deal for myself.”
Defendant also testified that he had contacted Ray Hill on December 23 and Hill had indicated an interest in purchasing a parcel of the ranch; that he had contacted Bill Skelton on December 20th and Skelton- indicated an interest in purchasing a portion of the ranch; that he contacted Eloise Reed on about December 27 and she was not interested. On December 27, Bill Skelton gave defendant a purchase agreement for a portion of the ranch. Defendant did not inform the Sissons of these facts.
In addition, the defendant told the Sissons that Hicks was going to buy the ranch for $900,000 when in truth Hicks merely wanted to buy the cattle, hay, and machinery for $200,000 and the land was to be sold for $700,000 to Bill Skelton. Defendant did not tell Jack Sisson that Skelton was a potential buyer because he was afraid that Jack Sisson would not agree to the sale if he knew that Skelton was involved.
Defendant argues that he had no duty to disclose after December 21 because that was the day when the agency relationship came to an end. He argues that the agency relationship ends when a broker earns the commission and the commission is earned when the broker produces a ready, willing and able buyer for the property. Therefore, according to defendant, he no longer had a duty to disclose after he produced himself and Hicks as ready, willing and able buyers on December 21.
Defendant is correct in one respect. Montana cases have repeatedly stated that a broker is entitled to his commission when he produces a ready, willing, and able buyer. In Diehl & Associates, Inc. v. Houtchens (1977), 173 Mont. 372, 567 P.2d 930, this court said:
“It is a generally accepted law that a real estate broker is entitled to commissions when he has, in pursuance of his employment and within the time specified in the contract of employment, procured a purchaser able, ready and willing to purchase the seller’s property on the terms and conditions specified in the contract of employment. Roscow v. Bara, 114 Mont. 246, 135 P.2d 364; 12 Am.Jur.2d 921, Brokers § 182. When the broker procures a buyer who makes a counteroffer or agrees to terms at variance to the terms specified in the employment contract, the seller has the option of accepting or rejecting the counteroffer. If the seller accepts the counteroffer of the procured buyer, the seller is legally obligated to pay commissions to the broker, either under the terms of the contract of employment or the mutually agreed terms of a contract for sale.
“The broker’s ability to recover commissions is premised on the broker’s ability to accomplish what he undertook to do in his contract of employment . . .
“We note the distinction between a brokerage contact which requires a broker to merely find a purchaser and a brokerage contract which requires a broker to sell, make or effect a sale. In the first case the broker earns his commission when he procures a buyer able, ready and willing to purchase on the seller’s terms. A broker employed to sell or effect a sale does not earn his commission until he completes the sale. Completion of the sale, where real property is involved, amounts to payment of the purchase price and conveyance of title. O’Neill v. Wall, 103 Mont. 388, 62 P.2d 672.” 567 P.2d at 933-35.
See also Holliger v. McMichael (1978), 177 Mont. 144, 580 P.2d 927, and Apple v. Henry (1923), 66 Mont. 244, 213 P. 444.
It must be noted, however, that in each of the above-cited cases, the issue was whether the broker was entitled to a commission, not whether the broker had a duty to disclose relevant facts to the principal. and in none of the cases was the broker the prospective buyer. A close reading of these cases reveals that the rule of law set forth therein is to protect a broker who has produced an eligible buyer. These cases do not stand for the proposition that a broker is released from a duty to disclose as soon as he proposes to buy the land for himself.
Here defendant was not legally bound to buy the property on December 21, 1972, the date that defendant and Hicks orally offered to buy the property for $900,000 and the Sissons orally accepted the offer. Defendant was not legally bound to buy the land until December 29 when the written contracts were signed. He could have backed out at any time. It was during this time that the defendant made several contacts concerning the property and did not tell the Sissons about the contacts.
Research has not revealed a Montana case which is directly on point. We note, however, the case of Irby v. Lee (Okl.App. 1973), 512 P.2d 253, which presented a similar fact situation. In Irby the defendant was a broker who had been trying to sell the plaintiff’s land. On April 14, 1969, the broker entered into a contract with a third party to sell the portion of land that the broker had bought. This was not disclosed to the plaintiff seller. In May the plaintiff received money for the land and conveyed the land to the broker. The court was presented with the issue of whether a fiduciary relationship still existed on April 30, the day the broker contracted to sell to a third party. The court held that the fiduciary relationship did not expire until May, when the broker paid the plaintiff for the property. The reasoning used by the court was that the broker was not legally bound to buy the property until May and he was, therefore, still under a duty to disclose on April 30.
We follow the same rationale and hold that defendant had a duty of full disclosure until he was legally bound to buy the property on December 29, 1972. This holding comports with the high standards applicable to brokers buying property from a principal. However, this does not automatically entitle plaintiff to summary judgment. The case presents genuine issues of material fact as different inferences can be drawn from the facts as to whether the defendant breached his duty. Consequently, the summary judgment in defendant’s favor is vacated and the case is remanded to the District Court for trial.
Plaintiff has alleged that the District Court erred in not finding that defendant violated certain sections of Montana’s Real Estate License Act. At the time this action arose, the pertinent statute was found at section 66-1937, R.C.M.1947, and has since been amended. Those amendments, however, do not change our disposition of the case. In particular plaintiff cites section 37-51-321, MCA, which provides in pertiment part:
“Revocation or suspension of license — initiation of proceedings — grounds. The board may on its own motion and shall on the sworn complaint in writing of a person investigate the actions of a real estate broker or a real estate salesman, subject to 37-1-101 and 37-1-102, and may revoke or suspend a license issued under this chapter when the broker of salesman has been found guilty by a majority of the board of any of the following practices:
“(3) pursuing a continued and flagrant course of misrepresentation or making false promises through agents or salesmen or any medium of advertising or otherwise;
“(9) offering real property for sale or lease without the knowledge and consent of the owner or his authorized agent or on terms other than those authorized by the owner or his authorized agent;
“(19) demonstrating his unworthiness or incompetency to act as a broker or salesman . . .”
The District Court made no findings concerning these statutory provisions. Because there is conflicting evidence which presents a genuine issue of material fact, this issue can be determined at the trial.
Defendant has appealed from dismissal of his counterclaim. The counterclaim is based on an allegation of malicious prosecution. The trial court dismissed this counterclaim for failing to state a cause of action.
In actions for malicious prosecution the party bringing the action must prove that there has been a termination of proceedings. This rule has been stated as follows:
“. .. On the other hand, an action for malicious prosecution may not be asserted by way of cross-complaint or counterclaim in the original proceeding, prior to its termination, since it is essential that the original proceeding shall have been previously terminated in favor of the party bringing the malicious prosecution action. Hence a counterclaim purporting to set forth the cause of action in malicious prosecution is properly dismissed as premature . . .” (Emphasis added.) 52 Am.Jur.2d Malicious Prosecution § 14 at 195.
In Bollinger v. Jarrett (1956), 146 Mont. 355, 406 P.2d 834, this Court said:
“It is also contended that it was error for the court to render summary judgment against appellant-buyer’s counterclaim. The basis of the counterclaim was that the sellers’ action wrongfully injured the credit standing of the buyers. The only possible grounds for such a claim are libel and malicious prosecution, neither of which can be sustained here. There is no libel because any publication in a judicial proceeding is privileged under R.C.M., 1947, 64-208. And malicious prosecution founded on a civil action is not the proper subject of a counterclaim since it requires proof of termination of the former proceeding in favor of the defendant therein. Baker v. Littman, 138 Cal.App.2d 510, 292 P.2d 595; 54 C.J.S. Malicious Prosecution § 54, p. 1021.” (Emphasis added.) 406 P.2d at 837.
For this reason the dismissal of defendant’s counterclaim was proper.
Affirmed in part and reversed in part. The summary judgment in defendant’s favor is vacated and the cause remanded to the District Court for trial.
MR. JUSTICES DALY, HARRISON and SHEA concur.
MR. JUSTICE SHEEHY, I dissent. | [
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] |
MR. JUSTICE SHEA
delivered the opinion of the Court.
Missoula General Hospital (herein referred to as Hospital) appeals from an order of the Lewis and Clark County District Court denying its motion for change of venue. The sole issue presented is whether the trial court properly denied the motion for change of venue from Lewis and Clark County to Missoula County.
On December 18, 1978, the Montana Board of Health and Environmental Sciences (herein referred to as the Board) issued findings of fact, conclusions and an order granting the Hospital a certificate of need, allowing the Hospital to initiate construction of a 80 bed intermediate care nursing home facility adjacent to the present hospital site in Missoula, Montana. Montana Health Systems Agency, Inc. (herein referred to as Montana Health) and the Montana Nursing Home Association (herein referred to as Association) appeared and opposed the issuance of the certificate of need at the administrative hearing level. Montana Health and the Association appealed to the Lewis and Clark County District Court seeking judicial review of the Board’s order.
On February 5, 1979, the trial court allowed the Hospital to intervene. On March 5, 1979, the Hospital filed a motion seeking a change of venue to Missoula County. On April 2, 1979, the trial court entered an order denying the motion for change of venue, determining that section 2-4-702(2)(a), MCA, was controlling. On April 29, 1979, the Hospital filed a motion to reconsider. On June 6, 1979, the trial court entered a memorandum and order denying the motion to reconsider, affirming the prior ruling that venue should remain in Lewis and Clark County. This appeal followed.
The Hospital does not contest the procedural course taken by Montana Health and the Association in appealing the Board’s administrative decision to grant the certificate of need. However, the Hospital contends that as a private litigant doing business in Missoula County, it is entitled to a change of venue to Missoula County under section 25-2-201, MCA, and section 25-2-105, MCA; general statutory provisions relating to venue. The Hospital further contends that Missoula County is the proper county for judicial review because the certificate of need is operative only in Missoula County, where the nursing home is to be constructed. Montana Health and the Association contend that Lewis and Clark County is the proper county for judicial review under section 2-4-702, MCA, the venue provision of Montana Administrative Procedure Act (herein referred to as MAPA).
Section 2-4-702, MCA, is a statute providing for judicial review of the actions of any administrative agency of the state. Clearly, the Board is an administrative agency of the state, and judicial review of the Board’s order granting the certificate of need is sought in the instant case. Section 2-4-702(2)(a) provides that “[p]roceedings for review shall be instituted by filing a petition in district court within thirty days after service of the final decision of the agency . . . Exceptas otherwise provided by statute, the petition shall be filed in the district court for the county where the petitioner resides or has his principal place of business or where the. agency maintains its principal office.” (Emphasis added.) The language of section 2-4-702(2)(a), “[ejxcept as otherwise provided by statute”, would indicate that in specific instances, other statutes be looked to in order to determine venue. State, Consumer v. Mont. Dept. of Pub. Serv. Reg. (1979), 181 Mont. 225, 593 P.2d 34, 36. To the extent of any inconsistency a more specific statute will control over a more general statute pertaining to the same subject matter. State, Consumer v. Mont. Dept. of Pub. Serv. Reg. supra, 593 P.2d at 36, 36 St.Rep. at 649; State v. Holt (1948), 121 Mont. 459, 194 P.2d 651.
This case involves the Board’s granting of a certificate of need, and section 50-4-301, et seq., MCA, provides the statutory framework relating to the issuance of certificates of need. Section 50-5-306, MCA, specifically provides a right to a hearing and appeal of a decision on an application for a certificate of need, and contains a specific provision relating to venue. Section 50-5-306(4) provides that “[t]he final decision of the Board shall be considered the decision of the department for purposes of an appeal to district court. Any affected person may appeal this decision to the district court as provided in Title 2, chapter 4, part 7.” Title 2, chapter 4, part 7, is that portion of the MAPA relating to judicial review of contested cases. It contains section 2-4-702(2)(a), the MAPA provision relating to venue.
Section 50-5-306(4) specifically provides that the MAPA provision relating to venue applies. Accordingly, section 2-4-702(2)(a) is the controlling statutory provision. The trial court properly determined that venue should remain in Lewis and Clark County.
Affirmed.
MR. CHIEF JUSTICE HASWELL, and JUSTICES DALY and HARRISON, concur.
MR. JUSTICE SHEEHY, deeming himself disqualified, did not participate. | [
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] |
MR. JUSTICE HARRISON
delivered the opinion of the court.
Respondent Ed Skillman petitioned the District Court for judicial review of a decision by the State Board of Land Commissioners to renew a lease of state land to James R. Foster. The Board of Land Commissioners had renewed the lease after finding that Foster had a preference right. The District Court held the Board of Land Commissioners erred in renewing the lease. The court remanded the case to the Board with directions to concel the Foster lease and lease the land without a preference right. The Department of State Lands and the State Board of Land Commissioners appeal the decision of the District Court asserting the lease to Foster should be reinstated. Skillman cross-appeals contending the court should have awarded the lease to him rather than ordering the lease reopened for bids.
The facts in this case are not disputed by the parties. Foster held a State of Montana surface lease to 640 acres of grazing land in Park County, Montana. The lease expired on February 28, 1979. On January 2, 1979, Foster applied to renew his lease on the land at a rate of $7.50 per AUM (animal-unit-month). On January 23, 1979, Skillman applied to lease the land at a rate of $18.75 per AUM. Foster was notified of the bid submitted by Skillman and informed that as current lessee he was entitled to exercise a preference right to meet the bid. Foster exercised the preference and met the bid on February 22, 1979. The lease was renewed to him on February 28, 1979.
Foster also requested and was granted a hearing to determine whether the bid was in the best interest of the State of Montana. State Land Commissioner Leo Berry conducted the hearing on the matter on March 27, 1979. Evidence introduced at the hearing showed that Foster had subleased the land to Jim Serrazzenn but had not filed a sublease form with the Commissioners. Subsequent to the hearing, Commissioner Berry recommended that a renewal lease be issued to Foster at the rate of $7.50 per AUM. The Board accepted the lease at the $7.50 rate.
On July 2, 1979, the Department of State Lands cancelled Foster’s lease for failure to file a sublease. On cancellation of the lease, it was explained to Foster that his lease would be renewed if he paid a penalty of 50 percent of the annual rental of the land. Foster paid the penalty, and the lease was reinstated.
The following issue is raised by the Department of State Lands for review:
Did the District Court err in determining Foster should not be granted a preferential right to lease the land in question under the authority of Jerke v. State Department of Lands 1 (1979), 182 Mont. 294, 597 P.2d 49]
Respondent Skillman raises the following issue on cross-appeal:
Did the District Court err in declaring the land in question should be reopened for public bid rather than awarding the lease to Skillman?
The arguments of the State are not persuasive in this case. Although the State is correct in stating that Jerke is limited to its facts,, the distinctions made by the State are not fatal to its application here. As Chief Justice Haswell pointed out in Jerke, the crucial point of the case is this:
“To allow an existing lessee who does not use the land to exercise a preference right constitutes an unconstitutional application of the preference right statute, section 81-405 (1), R.C.M. 1947, now section 77-6-205 (1), MCA.” 597 P.2d at 51, 36 St.Rep. at 392.
The mere fact that the lessee in this case is an individual instead of a grazing district is not sufficiently material to the policy involved to disallow the application of the precedent.
Further, if the case is distinguishable and Jerke should not be controlling as precedent, there is even more justification for applying the rationale of Jerke here. In Jerke, although there was a sublease involved, there is no evidence that there was an illegal sublease, as in the case before us. Here the lessee, Foster, sublet his grazing lease without having the sublease approved by the Department of State Lands as required by his lease with the State. Section 77-6-205(1). MCA, recites in applicable part:
“(1) A lessee of state land classed as agricultural, grazing, town lot or city lot who has paid all the rentals due from him to the state and who has not violated the terms of his lease is entitled to have his lease renewed . . .” (Emphasis supplied.)
Futher, ARM § 26.3.108(2) establishes the Department’s policy:
“(2) A surface lessee has a preference right to renew his lease provided all rental have been paid and the terms of the previous lease have not been violated.” (Emphasis supplied.)
A strict reading of these statutes raises a serious question whether Foster even had a right to renew (section 77-6-205, MCA) or a preferential right in the leasing procedure (ARM § 26.3.108(2)),when this case-was filed in District Court. Assuming his sublease arrangement, although not approved by the Department, was not sufficient to deprive him of his preference right, he would clearly be the type of lessee that the policy of ferke was designed to affect.
In consideration of our reasoning in ferke, we are compelled to apply the same reasoning to the case before us. In ferke, we held:
“Where the preference right does not further the policy of sustained yield, it cannot be given effect. In such a situation, full market value can be obtained only by pure competitive bidding. Here, the Grazing District, the holder of the preference right, does not even use the land; it cannot use good agricultural practices or make improvements thereon ...”
“To allow the preference right to be exercised in this case would be to install the Grazing District as the trustee of the land. It, rather than the Department of State Lands, would decide who will occupy the land, but it would not be bound by a constitutional or fiduciary duty. Under such a scheme, the concept of sustained yield would have no place.” 597 P.2d at 51, 36 St.Rep. at 391.
There appears to be no operative fact on the record here that would justify overruling the trial court’s decision to follow Jerke. Every point of law and every policy consideration is as applicable to Foster as it was to the grazing district. Therefore, the underlying rational that originally decided Jerke is equally dispositive of this case.
On cross-appeal Skillman contends that he should be awarded the lease because he was the highest bidder when bids were originally opened. He interprets the language of Jerke and section 77-6-205(2), MCA, relating to “pure competitive bidding” as meaning bidding once and a subsequent award to the highest bidder.
It would be truly inequitable to follow this interpretation. Foster was under the impression that he would have a valid preference right, and he should not be penalized for that good faith belief. He should have an equal opportunity to bid on the lease. Indeed, if he is not allowed to participate, then the spirit of the competitive bidding statute would be defeated. In addition, Foster had no reason to suspect that he could not exercise the preference right since Jerke had not been decided by this Court.
The judgment of the District Court is affirmed. The lease is canceled and reopened for bidding by all parties.
MR. CHIEF JUSTICE HASWELL and JUSTICES DALY, SHEA and SHEEHY concur. | [
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MR. CHIEF JUSTICE HASWELL,
delivered the-opinion of the Court.
Plaintiff brought this action to recover damages for personal injuries sustained in an automobile accident. Plaintiff appeals from a judgment on jury verdict and the denial of a motion for a new trial.
This action arose out of an April 14, 1975, traffic accident at the intersection of North Orange Street and West Broadway in Missoula, Montana. Stenberg, the plaintiff and appellant, was a policeman operating a police patrol car at the time of the accident.
Prior to the accident Stenberg had been writing a parking ticket at a location south of where the collision occurred. At that time he received a call informing him of a disturbance at a local secondhand store. During trial the plaintiff described what happend next, as follows:
“When I received the call, I left the area of Second and Hickory and I turned on my pursuit lights and my overhead lights and my siren. I turned northbound on Orange Street off of Second Street and proceeded across the bridge. The traffic was quite heavy during the lunch hour and I was pretty much in the flow of traffic going across the bridge. I got to the north end of the Orange Street bridge and the traffic was heavy at all the intersections and on the streets, so I had to go on across the centerline to get into the intersection. I entered the intersection, the light was red but all the vehicles were stopped. I got about halfway through the next block, traffic was stopped at the intersection and again I had to go to the left because of the cars that were stopped. At the intersection I entered the intersection and that’s when I was involved in the accident.”
Neel, the defendant, was driving his automobile east on Broadway when the accident occurred. He had the green light in his favor. His testimony indicates that he did not hear the siren or see the emergency lights on the patrol car. Other eyewitnesses gave conflicting testimony as to the audibility and visibility of the patrol car’s emergency equipment. As the Neel automobile entered the intersection it was hit midway on the passenger side by the front of the patrol car. As a result of the accident Stenberg suffered a pinched nerve in the neck. This has resulted in severe, incapacitating, intermittent pain.
Stenberg brought this suit to recover his damages arising from the accident. The jury returned a verdict in defendant’s favor.
Stenberg raises four issues on appeal:
1. Whether the District Court erred in instructing the jury on the standard of care applicable to the plaintiff?
2. Whether the District Court erred in instructing the jury to apply the law of contributory negligence rather than the law of comparative negligence?
3. Whether the District Court erred in refusing to give two of plaintiff’s proposed instructions?
4. Whether the District Court erred in not granting the plaintiff’s motion for a new trial?
Stenberg contends that the trial court erred by giving court’s instruction no. 15 which instructed the jury as to standard of care applicable to both parties. This instruction reads:
“The legal standard of care governing the conduct of motor vehicle operators is unvarying, and rests alike upon all drivers at all times. The standard of care is the conduct of an ordinarily prudent person in the same or similar circumstances-, in other words, ordinary care. Ordinary care, as the term is used in these instructions means that degree of care which a reasonable prudent person would use or exercise under the same or similar circumstances, in relation to the same or similar matters to avoid injury, and it implies the use of such care as is fairly commensurate with the danger to be avoided when measured by the standards of common prudence and experience. “And, generally speaking, negligence is, therefore, the want of ordinary care, the failure to do what a reasonable and prudent person would ordinarily have done under the circumstances of the situation, or the doing what such a person under the existing circumstances would not have done.
“Negligence may also consist in the doing of some act which the law forbids, or in the failure to do that which the law commands.
“In this action any negligence is of no consequence unless it was a proximate cause of the injuries and damages complained by the plaintiff.” (Emphasis added.)
Stenberg contends that the instruction was incorrect, because of certain language which appears in section 61-8-107, MCA. This statute grants certain privileges to the operators of authorized emergency vehicles. Section 61-8-107, MCA, was set forth in substantial part in the court’s instruction no. 16. The instruction reads in part:
“(b) The driver of an authorized emergency vehicle may:
“ 1. Park or stand, irrespective of the provisions of this act;
“2. Proceed past a red or stop signal or stop sign, but only after slowing down as may be necessary for safe operation;
“3. Exceed the speed limits so long as he does not endanger life or property;
“4. Disregard regulations governing direction of movement or turning in specified directions.
“(c) The exemptions herein granted to an authorized emergency vehicle shall apply only when such vehicle is making use of audible and visual signals meeting the requirements of § 32-21-132, except that an authorized emergency vehicle operated as a police vehicle need not be equipped with or display a red light visible from in front of the vehicle.
“(d) The foregoing provisions shall not relieve the driver of an authorized emergency vehicle from the duty to drive with due regard for the safety of all persons, nor shall such provisions protect the driver from the consequences of his reckless disregard for the safety of others.” (Emphasis added.)
Stenberg contends that the statute relieves the driver of an authorized emergency vehicle from the duty of exercising ordinary care, and, instead, imposes a lesser duty. Therefore, Stenberg argues, instruction no. 15 constituted reversible error, because it imposes a duty of ordinary care upon both parties.
Section 61-8-107, MCA, has not been construed by this Court. Other jurisdictions have, however,, had occasion to construe and apply nearly identical statutes. Schatz v. Cutler (D.Vt.1975), 395 F.Supp. 271; Shawnee T. P. Fire Dist. No. 1 v. Morgan (1977), 221 Kan. 271, 559 P.2d 1141.
In Shawnee the court was faced with a factual situation very much like that presented by the instant case. The court had to determine the duty imposed by a Kansas statute which is identical to section 68-8-107(4), MCA, in all material respects. The court said:
“Even though the use of the word ‘reckless’ suggests an element of wantonness, we believe it was the intent of the legislature to charge the driver of an emergency vehicle with due care under the existing facts and circumstances. The facts and circumstances include the privileges and immunities granted by statute. The test for due care (or due regard as used in the statute), as applied to the driver of an emergency vehicle, is whether with the privileges and immunities provided by statute he acted as a reasonably careful driver.” 559 P.2d at 1147. (Emphasis added.)
We agree. The driver of an authorized emergency vehicle is charged with a duty of due care under the circumstances, and the circumstances include the privileges granted by section 61-8-107(2), MCA. In the present case, instruction no. 15 stated, in essence, that all drivers must use ordinary care under the circumstances. Instruction no. 16 gave the privileges provided to Stenberg under the terms of section 61-8-107. Consequently, the instructions correctly presented the law to the jury. The statute may well have been intended to protect the driver of an emergency vehicle, but it does not relieve him of exercising ordinary care. No error was committed by giving instruction no. 15.
Stenberg next contends that the District Court erred in instructing the jury to apply the law of contributory negligence rather than the law of comparative negligence.
Section 27-1-702, MCA, sets forth Montana’s law of comparative negligence. The effective date of this statute was July 1, 1975, although it was passed by the legislature on March 17, 1975. Section 1-2-201(1), MCA, provides that “Every statute, unless a different time is prescribed therein, takes effect on the first day of July following its passage and approval.” A different time is not prescribed by section 27-1-702, MCA.
In Dunham v. Southside National Bank of Missoula (1976), 169 Mont. 466, 548 P.2d 1383, this Court affirmed a District Court’s grant of summary judgment in defendant’s favor. The holding was based on the defendant’s lack of duty to the plaintiff. This Court went on, however, to consider whether the new comparative negligence statute was to be retroactively applied. This Court said:
“The order of the district court granting summary judgment is affirmed, as is the district court’s conclusion that the Montana comparative negligence law Section 58-607.1, R.C.M.1947 [now § 27-1-702, MCA], shall not apply to a cause of action arising prior to July 1, 1975.” 169 Mont. at 475-76, 548 P.2d at 1388. (Emphasis added.)
These observations from the Dunham case control the present case. The District Court did not err in instructing the jury to apply the law of contributory negligence rather than the law of comparative negligence.
Stenberg next contends that the trial court erred in refusing to grant plaintiff’s proposed instruction no. 12. This instruction read, “You are instructed that when interpreting statutes particular expressions qualify those which are general.” This was taken from section 1-3^225, MCA. According to plaintiff’s contention, the instruction was necessary in order that the jury could properly interpret the court’s instructions no. 16 and no. 18, which were both taken from two other Montana statutes.
Section 26-1-201 ,MCA, states that all questions of law, including the construction of statutes, are to be decided by the court. Section 26-1-202, MCA, states that questions of fact are to be decided by the jury, where the trial is by jury. Consequently, it was not the jury’s function to interpret any statutes, and it was not error to refuse plaintiff’s proposed instruction no. 12.
Stenberg also contends that the trial court erred in refusing to grant plaintiff’s proposed instruction no. 22. This proposed instruction stated:
“You are instructed if you find for the Plaintiff on the question of liability you may then consider what damages, if any, the Plaintiff has sustained in relation to the enjoyment of hobbies; to what extent, if any his said injuries disabled the Plaintiff and prevented him from engaging in his usual hobbies such as fishing, playing baseball, hunting, and any other recreational activities.” (Emphasis added.)
The failure to give this instruction does not constitute reversible error. “Reversible error is error materially affecting the substantial rights of the aggrieved party. Rule 14, M.R.App.Civ.P.” Ehni v. N. P. and White Pine Co. (1969), 152 Mont. 373, 381, 450 P.2d 882, 886. In the present case the jury found in favor of the defendant. The jury did not reach the issue of damages. Consequently, no reversible error can be predicated on damage instructions.
Stenberg’s final contention is that the District Court erred in denying his motion for a new trial. In addition to the issues which have been discussed above, Stenberg alleged in his motion for new trial that there was insufficient evidence to support a determination by the jury that he was contributorily negligent.
Rule 59, M.R.Civ.P. permits the trial judge to order a new trial pursuant to motion. This is a matter within the trial court’s discretion if there is an insufficiency of evidence to support a jury verdict. Campeau v. Lewis (1965), 144 Mont. 543, 547, 398 P.2d 960. However, a new trial may not be granted by the trial court when there is substantial evidence to support the verdict. “The court’s discretion is exhausted when it finds substantial evidence in the record to support the verdict.” Hinton v. Peterson (1946), 118 Mont. 574, 578, 169 P.2d 333, 335.
In the present case, various witnesses estimated that Stenberg’s speed immediately prior to the accident was between 25 miles per hour and 50 miles per hour. There is no dispute that the intersection was busy, that Stenberg had to drive the police car across the centerline to get into the intersection, and that Stenberg entered the intersection against a red light. While these actions are authorized for drivers of authorized emergency vehicles by section 61-8-107, MCA, Stenberg was still required to exercise “. . . due regard for the safety of all persons . . .” There was sufficient evidence from which a jury could find that Stenberg failed to exercise the required standard of care. The trial court did not abuse its discretion in denying the motion for a new trial.
Affirmed.
MR. JUSTICES HARRISON, SHEA and SHEEHY concur. | [
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PER CURIAM.
Respondent’s motion to dismiss the appeal herein is sustained and the appeal is dismissed. | [
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PER CURIAM.
On motion of counsel for respondent, the appeal herein is dismissed, the appellants having failed to file and serve their brief within the time allowed by the rules of this court. | [
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JUSTICE HUNT
delivered the Opinion of the Court.
Petitioner Rebecca Gray Wackier appeals the decision of the Fourth Judicial District Court, Missoula County, modifying visitation, capping child support at $39,500, and failing to award her attorney fees.
We affirm.
Petitioner raises three issue for this appeal.
1. Did the District Court err in refusing to modify child support?
2. Did the District Court err in modifying visitation without providing advance notice to petitioner?
3. Did the District Court err in failing to award petitioner attorney fees and costs?
Rebecca Gray Wackier and Thomas Paul Wackier were married on December 16, 1990, in Missoula. Rebecca filed a petition for dissolution on March 12, 1991. Rebecca was pregnant at the time of filing the petition. On April 4, 1991, the parties entered into a marital and property settlement agreement. On July 9,1991, the court found that the agreement was not unconscionable and incorporated it into the decree of dissolution. The parties were given joint custody of the child, with Rebecca designated as principal residential custodian. Thomas was to have custody of the child 25 percent of the time, with visitation to be essentially arranged by the parties. Thomas was ordered to pay $400 per month in child support until January 1992 when the parties agreed to exchange information regarding their income for the purpose of applying the Uniform Child Support Guidelines.
Thomas works as a commissioned salesman and currently earns $77,000 a year. Rebecca is employed part-time as a hair stylist and has a yearly income of $7,000.
The record demonstrates that the parties have had difficulty implementing the dissolution decree. Thomas filed a motion in September 1991 requesting a clarification of visitation and day care expenses. Following a hearing, the court issued an order on October 25, 1991, establishing a visitation schedule and day care payments.
The parties failed to agree on a child support amount, based on 1991 incomes, by January 15, 1992, and on January 27, 1992, Rebecca filed a motion regarding child support. A hearing was held on February 19, 1992, and on April 20, 1992, the District Court issued its order finding that $400 a month in child support was sufficient and ordering Thomas to provide for post-high school education. In addition, the court clarified Thomas’s visitation rights. Rebecca appeals the decision.
I.
Did the District Court err in refusing to modify child support?
When this Court reviews child support awards, a presumption exists in favor of the district court’s determination, and this Court will reverse the district court only if it has abused its discretion. In re Marriage of Sacry (1992), 253 Mont. 378, 833 P.2d 1035, 1038, 49 St. Rep. 452, 453. Whenever the court issues or modifies an order relating to child support, the district court is required to determine the child support obligation on the basis of the factors set out in § 40-4-204(1) and (2), MCA, and the Uniform Child Support Guidelines adopted by the Department of Social and Rehabilitation Services. Section 40-4-204(3), MCA.
In its order, the District Court found that Thomas’s yearly gross income was approximately $77,000. He is currently paying $400 a month in child support, $260 a month in day care, and $25 a month in insurance costs. Rebecca requested that the court increase the monthly child support to $557. The court found that $400 a month in child support was sufficient. In addition, the court ordered Thomas to provide for the child’s post-high school education. The court based its decision on the belief that child support should not be calculated on income in excess of $39,500 and that the reasons for capping support at this level were the specific statements contained within the Uniform Child Support Guidelines.
The District Court’s order was issued prior to our decision in Sacry where we concluded that the mandatory provisions of the guidelines do not apply to incomes greater than $39,500. Sacry, 833 P.2d at 1038. The $39,500 limitation does not place a cap on the amount of child support to be awarded based on incomes greater than $39,500. For incomes exceeding $39,500, the first $39,500 should be “first applied in the appropriate column and line which shows the number and age of the child to arrive at a minimum support amount.” Sacry, 833 P.2d at 1038 (quoting 46.30.1543(2), ARM). Any parental income that exceeds the $39,500 may be used to supplement a minimum support amount. The amount of the supplement is to be determined on a case-by-case basis utilizing the factors set out in § 40-4-204(1) and (2), MCA. The district court is given broad discretion in awarding supplemental child support based on parental incomes that exceed $39,500. Sacry, 833 P.2d at 1038. Thus, the guidelines do not establish a cap on child support on incomes exceeding $39,500, but instead provide the district court with greater flexibility in setting child support payments when parental income exceeds $39,500.
Even though the District Court erred in ruling that there was a cap on the amount of child support payments because Thomas earned more than $39,500, the court’s decision does not amount to reversible error. After applying the first $39,500 of Thomas’s income, he is currently paying $400 a month in child support which is within the limits of the child support guidelines. Thomas is also responsible for $260 in monthly day care costs, as well as $25 per month in health insurance. In addition, Thomas is required to make arrangements to pay for any post-high school education that the child may need. We hold that the District Court did not err in refusing to modify child support.
II.
Did the District Court err in modifying visitation without providing advance notice to petitioner?
During the February 19, 1992, hearing, the District Court granted Thomas’s oral motion to modify the visitation schedule over Rebecca’s objection. The court modified visitation by giving Thomas visitation on Thursday evenings instead of Monday evenings, and clarified summer visitation, as well as allowing additional visits upon request when Thomas’s relatives visit from out of town. Rebecca contends that § 40-4-208, MCA, requires that she be given notice prior to modification of visitation rights.
Section 40-4-208(1), MCA, requires notice be given for a motion to modify a decree relating to child support and maintenance. Section 40-4-217(3), MCA, grants the district court authority to modify an order granting or denying visitation “whenever modification would serve the best interest of the child ....” In this instance, Rebecca was not prejudiced by the lack of notice because the District Court only clarified visitation rights as a result of some apparent confusion relating to the previous visitation schedule. Rebecca’s counsel was able to discuss these matters and properly raise Rebecca’s concerns as to Thomas’s request to extend visitation rights, which was denied. We hold that the District Court did not err in its clarification of Thomas’s visitation rights.
III.
Did the District Court err in failing to award petitioner attorney fees and costs?
The marital agreement entered into by the parties provided an award of attorney fees to the prevailing party should an action be initiated to enforce or modify the agreement. During the hearing, both parties requested attorney fees. The District Court concluded that neither side substantially prevailed in their requests and denied attorney fees pursuant to § 40-4-110, MCA.
The District Court has discretion to grant attorney fees after considering the financial resources of the parties. Section 40-4-110, MCA. The award of attorney fees is permissive not mandatory. Section 40-4-110, MCA. We will not overturn the court’s decision denying attorney fees absent an abuse of discretion. In re Marriage of Manus (1987), 225 Mont. 457, 733 P.2d 1275. The District Court stated it had considered the financial resources of the parties and that neither side substantially prevailed in the case. We hold that the District Court did not err in failing to award attorney fees.
We affirm.
CHIEF JUSTICE TURNAGE, JUSTICES TRIEWEILER, HARRISON and McDONOUGH concur. | [
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OPINION AND ORDER GRANTING SUPERVISORY CONTROL
MR. JUSTICE SHEEHY
delivered the opinion of the Court.
Relator, Great Western Sugar Company, filed its application with this Court, praying that we issue a writ of supervisory control or other appropriate writ to the District Court of the Thirteenth Judicial District, in and for Yellowstone County, upon the following facts:
On September 20, 1979, Jim R. Shelton filed his amended complaint in cause no. 71515 in the Yellowstone County District Court, naming as defendants Kober Farms, Inc., Great Western Sugar Company and Silver Engineering Works.
In that amended complaint, Jim R. Shelton alleged that on October 4, 1976 in the course of his employment with the Great Western Sugar Company, he was unloading sugar beets from trucks to a conveyor system, constructed and designed by Silver Engineering Works. Shelton further alleged that while unloading a truck operated by an employee of Kober Farms, Inc. the truck’s winggate struck him in his right foot causing permanent damages.
Kober Farms, Inc. filed a response to the amended complaint, denying in general the allegations of the amended complaint raising affirmative defenses, and including a cross claim against Great Western Sugar Company based either upon indemnity or upon contribution. Great Western Sugar Company moved to dismiss the plaintiff’s amended complaint against it, and the cross-claim of defendant Kober Farms, Inc. against it, on the grounds that the pleadings in each case failed to state a claim against Great Western Sugar Company upon which relief could be granted.
The allegations upon which Jim R. Shelton claims to be entitled to relief against Great Western Sugar Company are these:
“9. That the defendant, Great Western Sugar Company, failed to comply with the following duties that it owed to plaintiff:
“a. the common law duty of providing a reasonably safe place to work for the plaintiff;
“b. the duty to employ competent help, equipped with proper equipment and assisted with a proper safety program and trained personnel;
“c. the duty of warning the plaintiff of all the hazards which it knew or should have known, in the exercise of due care, existed;
“d. Although the defendant, Great Western Sugar Company, was aware that the machinery involved in the use of the conveyor system was extremely hazardous and that the utilization of the machinery placed the plaintiff and other people like him in an extremely hazardous position, they failed to install a system that would prevent the trucks, when loading and unloading on the platforms, from going forward and moving while the plaintiff was in a position of danger. They failed to install or have installed any fail-safe devices or self-checking devices that would prevent harm to plaintiff in the position in which he was located.
“e. They failed to adequately warn the plaintiff of the dangers involved in working in the position in which they placed him and failed to adequately train him to protect himself against the dangers that the defendant, Great Western Sugar Company, at all times, from many previous experiences with other employees, knew or should have known existed.
“f. The defendant sugar company failed to adequately train the fellow employees as well as the customers utilizing the conveyor system of the safe use of the conveyor system. That the said company did negligently, carelessly and wantonly continue to place untrained and unskilled people such as the plaintiff in this case in the position of danger on the conveyor system, knowing at all times that the system, because of its faulty design, placed the plaintiff in an extremely dangerous position to his life and limb.
“g. The defendant sugar company failed to comply with the safety provisions then and there in effect in the State of Montana.
“h. Although the defendant knew that other employees had been injured on the conveyor system of the type used by the plaintiff in this matter, they failed to take any steps to avoid further unnecessary injuries, although they were, at all times, aware that modifications were possible that could make it safer for the employees to work in the position occupied by the plaintiff on the conveyor system.”
The District Court on January 11, 1980, granted the motion to dismiss the cross-claim of Kober Farms, Inc. against Great Western. In the same order, it denied Great Western’s motion to dismiss the amended complaint of Shelton against it.
Great Western’s application for supervisory control alleges that the case in the District Court involves complex liability claims against multiple defendants that will require extended and complicated discovery and a jury trial. It alleges that while it has a remedy by appeal from the claimed error of the District Court in refusing to grant its motion to dismiss the amended complaint, the remedy is not speedy or adequate and would subject Great Western Sugar Company to unnecessary expense and involvement in the proceedings and trial until judgment before it could find its remedy by appeal. Accordingly, Great Western claims that it is proper in this situation for this Court to grant a remedial writ.
Upon receipt of the application from Great Western, and after considering the same, we ordered responses to be filed by all the interested parties. Such responses have been received from the plaintiff, Jim R. Shelton, and from the defendant, Kober Farms, Inc. After considering the application, the responses, and the documents filed in connection therewith, and the memoranda of the parties, we have concluded that this is a proper case to assume jurisdiction and to issue an order of supervisory control directed to the said District Court ordering the dismissal of the amended complaint against Great Western. Our reasons follow:
Kober’s response is that Great Western Sugar Company, as the employer of the plaintiff, because it has supplied Workers’ Compensation coverage to the plaintiff, is entitled to recover, if plaintiff is successful, at least 50 percent and perhaps 100 percent of the monies which it has paid to plaintiff as Workers’ Compensation benefits. Kober further contends that we are thus presented with a case where an employer which might itself have been negligent in a substantial degree as a proximate cause of Shelton’s injuries will nevertheless enrich itself by its subrogation interest in the outcome of Shelton’s lawsuit. Kober therefore supports Shelton’s opposition to the dismissal in the lower court, and the grant of a writ or order in this cause.
Section 39-71-411, MCA, under the Workers’ Compensation Act, provides that the “employer is not subject to any liability whatever” to an injured employee except under the Act itself. Western contends that this exclusivity provision applies here and insulates the employer Great Western, from the cause of action claimed by Shelton, .the employee.
On the other hand, Shelton contends that under the allegations of his amended complaint, as we have set them forth previously, Great Western, by wantonly, maliciously and carelessly placing the plaintiff in a position of danger, has committed the equivalent of an intentional harm; that applying the exclusivity clause to the contractual agreement of employment between Great Western and Shelton, under principles of contract law, would be against public policy as enunciated in section 28-2-702, MCA; and that since the quid pro quo for the adoption of Workers’ Compensation Acts was the elimination of defenses or contributory negligence, assumption of risk, and the fellow servant rule, which defenses do not apply to intentional torts, that the exclusivity clause should not apply in Shelton’s case. Shelton also contends that Great Western has not made out a proper case for supervisory control.
In Enberg v. Anaconda Company (1971), 158 Mont. 135, 489 P.2d 1036, we held that where a plaintiff’s complaint did not allege intentional injury by the defendant employer, any claim for relief was barred by the exclusive remedy provisions of the Workers’ Compensation law; 158 Mont, at 137, 138, 489 P.2d at 1037. Although the charges in Shelton’s complaint against Great Western, set forth above, are broadly stated, they fall short of intentional tort, and therefore do not state such a claim against the employer as would serve to override the exclusivity provision of the Workers’ Compensation Act. See State ex rel. City of Havre v. District Court (1980), 187 Mont. 181, 609 P.2d 275..
Since intentional tort against Great Western is not alleged, but only negligence, however wanton or malicious, the right of an employee to sue his employer for work related injuries covered by the Workers’ Compensation Act is subject to the principles we enunciated in Cordier v. Stetson-Ross, Inc. (1979), 184 Mont. 502, 604 P.2d 86. In Cordier, we stated:
“It is our opinion that the broad provisions of section 92-204.1, R.C.M. 1947, now section 39-71-411, MCA, require us to hold that the provisions of the Workers’ Compensation Act are exclusive as to the liability of the employer for damages sustained by the injured employee whether they are sought by the employee directly, or by a third party under contribution. Our statute rules out ‘any liability whatever’ even before it goes on to state that the employee and those under him are limited to such recovery as the Act allows against the employer. The language ‘any liability whatever’ would be surplusage unless it is read to mean liability not only to the employee and those claiming under him, but also any other party attempting to claim liability against the employer for the same incident . . .” 604 P.2d at 89-90, 36 St.Rep. at 2111.
Our holding that the allegations of Shelton’s complaint do not constitute a claim of intentional tort disposes of Shelton’s contention that the exclusivity rule should not apply here. The quid pro quo on which Shelton claims we should have ignored the exclusivity clause, that is the elimination of Workers’ Compensation Act of the defenses of contributory negligence, assumption of risk and the fellow servant rule, have indeed been sacrificed by the employer Great Western in this case in providing Workers’ Compensation coverage for its employee Shelton. Shelton pointed us to the holding in Mandolidis v. Elkins Industries, Inc. (1978), W.Va., 246 S.E.2d 907. The West Virginia statute provided immunity from suit to an employer who “does not inflict an injury with deliberate intention.” Even with the requirement of section 39-71-104, MCA, that the Workers’ Compensation Act be liberally construed, no part of Mandolidis would allow us to transmute negligence into deliberate or intentional harm.
We hold that the “intentional harm” which removes an employer from the protection of the exclusivity clause of the Workers’ Compensation Act is such harm as it maliciously and specifically directed at an employee, or class of employee out of which such specific intentional harm the employee receives injuries as a proximate result. Any incident involving a lesser degree of intent or general degree of negligence not pointed specifically and directly at the injured employee is barred by the exclusivity clause as a basis for recovery against the employer outside the Workers’ Compensation Act.
Likewise we see no substance in the public policy contention of Shelton. Section 28-2-702, MCA states:
“All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or for violation of law, whether willful or negligent, are against the policy of the law.”
The drafters of the Workers’ Compensation Act have been careful to include all possible contracts of employment within their provisions. See sections 39-71-401 to 39-71-405, inch, MCA. It is more nearly accurate to state that it is the public policy of this State to make certain that all forms of employment be subject to the Workers’ Compensation Act, and that this includes the exclusivity clause therein. As we pointed out in Cordier, supra, it is also the public policy of this State to allow the employer to be reimbursed out of any recovery that the employee may make against a responsible third party:
“. . . We must look at the subrogation rights provided by the Montana Act from the viewpoint that the employer has accepted liability without fault of the employee; that the employee’s recovery against the employer is limited to the benefits under the Act; that the employer has given up its common law defenses if it does not come under the Act; and that the special provisions of the Act with respect to subrogation are designed to provide an incentive to the employee to seek reimbursement for his damages from a responsible party so that the employer may be reimbursed in whole or in part out of any recovery made by the employee.” 604 P.2d at 93, 36 St.Rep. at 2115.
We find therefore that the complaint against Great Western by Shelton should have been dismissed in the District Court. Great Western finds itself in a situation where it has no plain, speedy or adequate remedy at law, and it has no right of appeal of the order of the District Court. In those circumstances, it is proper for us to assume jurisdiction, and to order supervisory control. State v. Doty (1977), 173 Mont. 233, 566 P.2d 1388.
Accordingly, IT IS ORDERED:
That the amended complaint of Jim Shelton against Great Western Sugar Company in cause no. 71515, in the District Court, Thirteenth Judicial District, County of Yellowstone, be dismissed;
That the Clerk of this Court serve a copy of this opinion and order upon all counsel of record herein;
That as and at the time when, under the Rules of this Court, remittitur would issue upon decisions of this Court, the Clerk of this Court shall mail a certified copy of this opinion and order to the respondent District Court;
That said certified copy of this opinion and order shall be and serve the office of a writ of supervisory control from this Court to the said District Court. Costs of this proceeding to relator.
MR. JUSTICES DALY, HARRISON and SHEA, concur.
MR. CHIEF JUSTICE HASWELL did not participate in this cause. | [
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OPINION AND ORDER
PER CURIAM:
Original application by Walter Schantle for a writ of habeas corpus directed against the warden of the Montana State Prison, Roger Crist.
Schantle had previously sought a writ of habeas corpus from the United States District Court for the District of Montana, Billings Division, but writ was denied by that Court on the grounds that Schantle had not exhausted his available state remedies.
On November 22, 1976, in the District Court for the Thirteenth Judicial District of Stillwater County, Schantle entered a plea of guilty to a charge of burglary involving a grocery store in Absarokee, Montana. The crime was alleged to have occurred on July 22, 1976. He was sentenced to ten years at hard labor in the state prison of the State of Montana upon judgment and conviction following his plea of guilty.
Schantle seeks a declaration that this conviction was illegal upon these grounds: (1) that he was refused the right to proceed as his own attorney in the Stillwater County District Court; (2) that the District Court failed to interrogate him as to the elements constituting the crime with which he was charged; (3) that the petitioner’s court-appointed attorneys failed to assist petitioner with the filing of pretrial motions or to provide effective assistance in connection with his defense to the charges; (4) the pretrial motions filed by petitioner were not heard by the District Court; (5) that new counsel was appointed for petitioner outside of his presence in court; and (6) that he was coerced into pleading guilty by the threat of the filing of prior convictions.
Petitioner has been supplied with a transcript of the proceedings that occurred when he entered his plea of guilty. Upon receipt of his petition, the matter was referred to the District Court of Still-water County for a factual determination. A hearing on his petition was conducted by Judge Jack D. Shanstrom, who was called into the Thirteenth District in connection with this matter on February 28, 1980. A transcript of the proceedings before Judge Shanstrom are also part of our record here.
Schantle was arraigned with a codefendant before the District Court in Stillwater County on August 3, 1976. He stood mute as to the three counts charged against him, and the court entered his plea of not guilty to each of the charges. The court further ap pointed Richard W. Heard, an attorney of Columbus, Montana, to represent Schantle and the codefendant.
We find that on August 26, 1976, Schantle, with his codefendant, wrote a letter to the district judge advising that they dismissed attorney Heard and would thereafter act in their own defense. On August 26, 1976, Schantle also filed a letter entitled, A Motion for Probable Cause Hearing, asking the court to set a date for the same. On September 22, 1976, Schantle and his codefendant filed in District Court a motion for a production and suppression of evidence hearing. On October 23, 1976, Schantle and his codefendant filed in court a motion for a just cause hearing and a motion that the court show cause within three days why the District Court did not grant their motion for a production and suppression of evidence hearing previously filed. On November 3, 1976, the codefendants had also filed a motion for discovery requiring the county attorney to produce all evidence which would be used at the trial of the defendants.
Attorney Heard testified before Judge Shanstrom in the hearing on the habeas corpus proceedings. He testified that on October 27, 1976, he visited in the jail in Yellowstone County Courthouse with Schantle and the codefendant, and that they indicated an unwillingness for Heard to represent them at trial. Heard then went to the presiding district judge who advised that he would appoint John Adams, an attorney in Billings, Montana, to represent both defendants. Attorney Heard had only one conference with the defendants, that on October 27. The defendants had been removed from Columbus, Montana, the county seat of Stillwater County, to the jail in Yellowstone County in Billings, Montana, some forty miles away. After Heard received a copy of the letter dismissing him as attorney, he undertook no further actions on behalf of the defendant Schantle.
John Adams testified that after he was appointed by Judge Luedke, he visited with the defendants in the first part of November, 1976. He states that he did not discuss any defenses with Schantle, particularly because he did not find from a review of the county attorney’s file and the evidence therein that there were any legal defenses to the charges. His discussion with Schantle was on the point of what could be done with the county attorney of Stillwater County to effect the least possible sentence for Schantle on the crimes charged. He was informed by Schantle that the county attorney was threatening to file notice of prior convictions against Schantle for the purpose of increased punishment if he did not plead guilty to the charges.
Trial of the charges in Stillwater County against the defendant had been set for November 29, 1976. On November 16, 1976, the county attorney did in fact file a notice of prior convictions for the purpose of seeking increased punishment against Schantle.
On November 22, 1976, before the presiding judge, but in the courtroom in Yellowstone County, pursuant to agreement, the defendant, and his attorney Mr. Adams, and the county attorney of Stillwater County appeared. As the proceedings opened, Mr. Adams, in the presence of Schantle, informed the court that Schantle had advised that with respect to the count of simple burglary, he would like to withdraw his plea of not guilty and enter a new plea to that charge. The court granted that request. The proceedings that followed are here set forth verbatim:
“THE COURT: . . . Mr. Schantle, under Count No. I you are charged with the crime of burglary, which was alleged to have occurred on or about July 23rd, 1976. What is your plea to this count?
“THE DEFENDANT: Your Honor, I’d like to know what I’m pleading to.
“THE COURT: All right, Count No. I says that you knowingly entered or remained unlawfully in an occupied structure with the purpose to commit an offense therein, to-wit: defendant entered the business premises of Milligan’s IGA store with the purpose to commit theft. Now, that’s Count No. I. That’s what you’re pleading to.
“MR. ADAMS: Further I should indicate that the punishment, this crime carries a maximum punishment of ten years. I believe that is what you’re interested in.
“THE DEFENDANT: Yes.
“Your Honor, I’ll enter a plea of guilty to that charge if that is all that is going to be filed against me in District Court as to this crime or any crimes arising out of it or as to any further action that might be filed against me stemming from my past or from the present.
“THE COURT: Well, I guess, Mr. Laws, that calls for—
“MR. LAWS: Your Honor, Stillwater County is willing to dismiss Counts II and III against Mr. Schantle and will not notice any priors on the matter.
“THE COURT: All right, does that answer your question?
“THE DEFENDANT: Yes, sir. And I’ll plead guilty.
“THE COURT: All right. Now, the penalty is a maximum of 10 years, Mr. Schantle, and in view of your past record you should anticipate that’s probably the sentence you’re going to get. I want you to understand that right from the beginning.
“Has anybody promised you anything just to get you to come in here and plead guilty to this count?
“THE DEFENDANT: No, sir.
“THE COURT: Has anybody threatened you to force you to come in this morning and plead?
“THE DEFENDANT: No, sir.
“THE COURT: Well, they’re saying that you went unlawfully to this IGA store for the purpose of stealing. Is that what you did?
“THE DEFENDANT: Yes, sir. Your Honor, could I ask for a presentence investigation before sentence is pronounced?
“THE COURT: Do you have any information concerning the past record of Mr. Schantle?
“MR. LAWS: Your Honor. I have an FBI rap sheet on Mr. Schantle, but other than that, the fact that he has a commonlaw wife and three children, I know nothing more about his background.
“THE COURT; Mr. Schantle, I just want to make it clear that you understand normally you would be entitled to have a jury trial on this charge — and one is scheduled for the 29th of this month— and during that trial you have the right to remain silent without your silence being held or used against you; and also you have the right to have all the witnesses against you appear in open court so that you can see them, you can hear them, and you can have them cross-examined. Now, if I accept this plea of guilty to Count No. I, there won’t be any trial, there won’t be any witnesses. And you have already told me what you have done. Now, is that what you want?
“THE DEFENDANT: Yes, sir.
“THE COURT: Well, the record may show that the Court accepts the plea of guilty to Count No. I as being voluntary and with knowledge of the consequences.”
With respect to the presentence investigation, Schantle was advised by the court that in view of his prior record that he would in any event was going to receive a ten year sentence and that the presentence report would have little effect. Upon interrogation by Mr. Adams if he wanted to be sentenced, the defendant replied “Yeah.” Thereupon the court pronounced sentence.
On the foregoing, this Court finds and concludes that defendant entered his plea of guilty to the crime of burglary voluntarily and with full knowledge of the consequences; that he did so after admitting to the District Court that he did in fact commit the act for which he was charged. It further appears that Schantle’s entry of plea was the result of a plea bargain under which he received the maximum sentence possible for simple burglary, ten years, without increased punishment by reason of prior convictions. Two other criminal counts against him were dismissed.
The standard under which the validity of a guilty plea is judged is whether the plea represents a voluntary and intelligent choice among the alternative courses of action open to the defendant as affirmatively disclosed by the record. North Carolina v. Alford (1970), 400 U.S. 25, 31,91 S.Ct. 160, 164, 27 L.Ed.2d 162, 168; Brady v. United States (1970), 397 U.S. 742, 747, 90 S.Ct. 1463, 1468, 25 L.Ed.2d 747, 755; Wilkins v. Erickson (9th Cir. 1974), 505 F.2d 761, 763; State v. Griffin (1975), 167 Mont. 11, 21, 535 P.2d 498, 503.
We find no merit in the application for habeas corpus here.
DISMISSED.
MR. CHIEF JUSTICE HASWELL and JUSTICES DALY, HARRISON, SHEA and SHEEHY, concur. | [
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MR. JUSTICE SHEA
delivered the opinion of the Court.
Plaintiffs appeal the orders of the Flathead County District Court setting aside the entry of default against the defendant County and granting summary judgment to the County. Plaintiffs contend that the default should not have been set because the County had no justifiable excuse in failing to timely file an answer, and that the facts do not support a finding that the public possessed a prescriptive easement over that portion of Echo Lake Road which crosses the plaintiff’s property.
Echo Lake Road is located in Rig Fork, Montana, and has been used by members of the public for over 33 years. In April 1951, when the plaintiffs, Marion and Lois McClurg, bought their property, the road was a narrow, ungraded trail. Over the years, the Flathead County Road Department has widened and graded the road. Other maintenance has included placing gravel on the road, and in winter sanding and plowing.
The plaintiffs have never placed barriers on the road or attempted to block the public’s access to it. However, in recent years they have become increasingly annoyed by car owners whose vehicles have become immobilized on the snowy hill adjacent to their home. On September 2, 1976, the plaintiffs filed a complaint seeking a declaratory judgment that the County had a duty to erect signs, barricades, and gates in order to prevent the public from crossing plaintiffs’ property.
Other than filing a motion to dismiss, the County did not oppose the plaintiff’s complaint. While their motion was still pending, the County received an extension of time to file an answer. During this time, the County consulted with plaintiffs and advised them to address their grievance to county administrators. In December 1976, the plaintiffs filed a petition to abandon the road with the county commissioners. On February 3, 1977, prior to the county’s action on the petition, the plaintiffs had the clerk of court enter a default against the County. Approximately three weeks later, the County denied the plaintiffs’ petition and filed an answer to the complaint.
On May 16, 1977, the County filed a motion to set aside the entry of default. The court granted the motion on April 13, 1978. The plaintiffs appealed this order but in an opinion filed on December 21, 1978, we concluded that court’s order was not a final judgment and dismissed the appeal.
After the issuance of the remittitur, both parties filed motions for summary judgment. The County also filed the depositions of Marion and Lois McClurg and the affidavit of Road Superintendent, Clifford Vinje. On August 22, 1979, the court filed an order which denied the plaintiffs’ motion and granted the defendant’s motion for summary judgment. The court’s judgment provided that the public had acquired a prescriptive easement for use of the road on the plaintiffs’ property and that the plaintiffs should receive nothing by reason of their complaint against the County. The defendant appeals this judgment and the court’s order setting aside entry of default.
The party seeking to set aside an entry of default must establish good cause for the default and the existence of a meritorious defense to the action. See, Donlan v. Thompson Falls C & M Co., et al. (1910), 42 Mont. 257, 112 P. 445; Gomes v. Williams (10th Cir. 1970), 420 F.2d 1364, 1366; 6 Moore’s Federal Practice § 55.10[2], p. 55-237. See also, Rule 55(c), M.R.Civ.P. The plaintiff contends it was error for the District Court to set aside the default because the County had no justifiable excuse for failing to file a timely answer and the County’s answer did not cure the default.
A District Court’s discretion to set aside entry of default should be liberally exercised to promote trial on the merits, and an order setting aside default will be reversed only in exceptional cases. See Holen v. Phelps (1957), 131 Mont. 146, 308 P.2d 624. This is not, as the plaintiffs suggest, a case where the party attempted to cure a default by simply filing an answer. See Johnson v. Matelich (1973), 163 Mont. 329, 336, 517 P.2d 731. Here the County filed an affidavit stating that the plaintiffs prior to obtaining an entry of default, filed a petition for abandonment of the road and led the County to believe that further judicial action would be forestalled until completion of administrative proceedings on the petition. The County’s affidavit was sufficient to support the court’s finding that the delay was not totally inexcusable.
The County also made a showing that a defense to the plaintiffs’ action was available. Before making its motion to set aside entry of default, the County filed an answer in which it alleged the public possessed a prescriptive easement over the plaintiffs’ property. The existence of an easement was supported by the plaintiffs’ complaint which alleged that the public land continually harassed the plaintiffs during the winter months when cars became immobilized on plaintiffs’ road. There was no abuse of discretion in permitting the case to proceed to trial.
The plaintiffs’ next contention is that the public used the road with the plaintiffs’ consent and thus did not acquire a prescriptive easement. But there is undisputed evidence here to support each of the elements required for establishing a prescriptive easement, and summary judgment for the County was proper.
The public acquires the right of prescription to use a road passing through private property when its use of the road is continuous and uninterrupted across a definite course for the prescribed statutory period with the exercise of control adverse to the owner. See Kostbade v. Metier (1967), 150 Mont. 139, 432 P.2d 382. Since 1953, the statutory period for adverse possession has been 5 years. See section 70-19-404, MCA. It is not disputed that the public has used the road to cross plaintiff’s property for over 25 years. The public’s use of the road has been continuous and uninterrupted. The road has always been open and unimpeded by any barrier. It has not changed course since the plaintiffs’ purchase of the land in 1951.
The plaintiffs’ assertion of error concerns only the last element for establishing a prescriptive easement, the exercise of control adverse to the owner. Adverse control is presumed when all other elements have been proved. See Garrett v. Jackson (1979), 183 Mont. 505, 600 P.2d 1177; Kostbade v. Metier (1967), 150 Mont. 139, 145, 432 P.2d 382. The undisputed facts support rather than rebut this presumption. Plaintiff Marion McClurg admitted in his deposition that most members of the public never asked for permission. In 1962, the County did talk with McClurg about widening the road. On the other hand, grading, laying gravel and other maintenance of the road has been performed without the plaintiffs’ permission. There are no disputed facts material to the motion for summary judgment and the order granting summary judgment to the County was proper.
The plaintiffs argue that the public’s acquisition of a prescriptive easement without compensation to the plaintiffs is an unconstitutional taking of private property. In this connection, they maintain that taking of private property for a public roadway is not permissible when an alternate route is available. In effect, the plaintiffs have argued that the public cannot acquire a prescriptive easement. Such a contention is contrary to well established precedent. See Kostbade, supra. We see no reason to establish additional requirements for acquiring a public easement.
The judgment is affirmed.
MR. CHIEF JUSTICE HASWELL and JUSTICES DALY, HARRISON and SHEEHY, concur. | [
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JUSTICE HARRISON,
delivered the opinion of the Court.
This is an appeal by the Department of Revenue from a decision of the District Court of the Eighth Judicial District, in and for Cascade County, affirming a decision of the State Tax Appeal Board providing for a blanket 34 percent reduction in the Department’s appraisal of the improvements on certain parcels of commercial real property in Cascade County. The Board is joined by thirty-eight taxpayers as respondents. Briefs amicae have been received from taxpayers of several other counties. The decision of the District Court is reversed.
Respondent taxpayers applied to the Cascade County Tax Appeal Board for reduction of the valuation of their commerical property improvements pursuant to section 15-15-102, MCA, after appraisal by the county assessor for the Department of Revenue. After hearing, the county tax appeal board denied relief and appeal was taken to the State Tax Appeal Board (hereinafter referred to as “the Board”) under section 15-2-301, MCA. The Board overruled the county appeal board and ordered the Department to reduce all of the contested valuations by 34 percent. The Department petitioned for judicial review under section 15-2-303, MCA, seeking reversal of the Board decision and reinstatements of its valuations or, in the alternative, remand to the Board for determination as to whether section 42-2.22(l)-S2200 of the Administrative Rules of Montana (referred to hereafter as A.R.M.) is arbitrary, capricious or unlawful. The District Court denied relief, affirming the Board determination. By separate order, the Court denied the Department’s motion to present additional evidence under sections 15-2-303(4) and 2-4-703, MCA, on the ground the Department had an opportunity to present such evidence at the county and state appeal board hearings and declined to do so as a “deliberate tactical decision.” Both orders were appealed.
The uncontested central facts in the case include the following: The Department in its 1978 appraisal procedures used replacement cost less depreciation as the basis for determining values of all real property improvements. In determining the replacement cost it used statistics contained in two manuals adopted under A.R.M. Section 42-2.22(l)-S2200. The Montana Appraisal Manual was used for appraising residential property improvements and the Marshall Swift Valuation Service Manual was used for appraising commercial property improvements. The statistics in the Montana Appraisal Manual reflected 1971 replacement costs, while those in the Marshall Swift Manual reflected 1976 replacement costs. At the county appeal board hearing several witnesses testified the 1971 replacement cost figures contained in the Montana Appraisal Manual were only 66 percent of the 1976 replacement cost figures contained in the Marshall Swift Manual. The Cascade County appraiser testified that implementation of the regulation resulted generally in valuation of residential improvements at 60 percent of market value and valuation of commercial improvements at 100 percent of market value.
A preliminary issue is whether the Board has authority to review and determine the legal propriety of the Department’s appraisal methods. This gives us little pause. Article VIII, Section 7 of the 1972 Constitution calls for legislature provision of “. . . independent appeal procedures for taxpayer grievances about appraisals . . .” Pursuant to that requirement, section 15-2-201(l)(c), MCA, was enacted to give the Board general authority to hear appeals from the Department with regard to property assessments, and section 15-7-102(5), MCA, gives the Board specific power to determine appeals of appraisals. Certainly the power to hear appraisal appeals includes the power to pass judgment on appraisal methods, and we so hold.
The next question is whether using different cost data for appraising different types of property within the same statutory classification constituted unlawful discrimination and violation of the requirement for uniformity in taxation. We start with the factual premise that such disparate cost data was in fact used in assessment of respondent taxpayers’ property improvements, as found by the Board and the District Court. The legal premise is that both residential and commercial improvements to real property are in the same legislative classification. Section 15-6-134, MCA. The constitutional and statutory requirements for equalization or uniformity within a legislative classification cannot be questioned. See Article VIII, Sections 3 and 7, 1972 Montana Constitution; section 15-7-103(1), MCA; section 15-9-101(1), MCA; Larson v. State and Dept, of Revenue (1975), 166 Mont. 449, 454-455, 534 P.2d 854, 857; State ex rel. Schultz-Lindsay Constr. Co. v. Board of Equalization (1965), 145 Mont. 380, 393, 403 P.2d 635, 641-642. Failure to adhere to the uniformity rule also offends due process and equal protection principles. Larson, supra, 166 Mont. at 455, 534 P.2d at 857. Given the legal and factual premises noted, the method used by the Department in these cases would seem, on its face, to have violated uniformity, equal protection and due process requirements. If different valuation statistics are applied to different pieces of property in the same legal classification, an illegal disparity in valuation is likely to result. We cannot, however, reach such a conclusion as to any particular properties evaluated in this case because there is inadequate evidence in the record to do so. No evidence of comparable evaluations, as between particular commercial and residential improvements, under the Department’s system, appears in the record.
The Department contends, however, that even if the valuation did not meet equalization and due procesg/equal protection requirements, the assessments were part of a “rolling” or “cyclical” reappraisal system and were, therefore, an exception to these requirements. Such a system contemplates reappraisal of a portion of the property in a particular classification each year under a plan that is aimed at uniformity within the classification of the conclu sion of all reappraisal. See discussion in Ernest W. Hahn, Inc. v. County Assessor for Bernalillo County (1978), 92 N.M. 609, 592 P.2d 965, 969; Maricopa County v. North Central Development Co. (1977), 115 Ariz. 540, 566 P.2d 688, 691-692; Patterson v. State and Department of Revenue (1976), 171 Mont. 168, 176, 557, P.2d 798; Larson, supra, 166 Mont, at 455; Annot., 76 A.L.R.2d 1077 (1961). In Larson, supra, we recognized this exception where the inequalities are temporary, but there is no evidence in the record that the Department ever intended, much less planned, that the system be temporary, or that it was part of an overall plan that would eventually result in equalization. The District Court found there was no rolling or cyclical reappraisal system working that would permit an exception to the uniformity, equal protection/due process requirements, and we agree.
Thus, the Board had the authority to adjust and equalize these appraisals and had determined they were unequal. What should it have done? It apparently followed a 1923 ruling of the United States Supreme Court in Sioux City Bridge Company v. Dakota County (1923), 260 U.S. 441, 43 S.Ct. 190, 67 L.Ed. 340, and reduced the commercial improvement appraisals by 34 percent across the board in an attempt to equalize them with residential improvement appraisals.
The key holding in Sioux City Bridge, supra was stated as follows:
“This Court holds that the right of the taxpayer whose property alone is taxed at 100 per cent of its true value is to have his assessment reduced to the percentage of that value at which others are taxed even though this is a departure from the requirement of statute. This conclusion is based on the principle that where it is impossible to secure both the standard of the true value, and the uniformity and equality required by law, the latter requirement is to be preferred as the just and ultimate purpose of the law.” (Emphasis added.) Sioux City Bridge, 260 U.S. at 446, 43 S.Ct. at 192, 67 L.Ed. 343.
This disposes the Department’s argument that the appraisals could not be reduced, even though unequal, if they resulted in an assessment at true market value, or 100 percent of market value as required by section 15-8-111(1), MCA. Reduction is required where it is satisfactorily shown that under the system as applied it is impossible to meet both the true value and equality standards. It could have been concluded, as the Board and the District Court concluded, that application of the Department’s system would work an inequality of assessment and that it would be impossible to have both full value assessment and equality under that system. If it were to be so concluded, reduction would be required and that remaining question would be, how much?
The evidence presented to the county and state boards and to the District Court provides an inadequate basis for any reduction that is not conjectural or speculative. The burden is on the taxpayer to remove this determination from the realm of conjecture or speculation. Skinner v. N. M. State Tax Comm. (1959), 66 N.M. 221, 345 P.2d 750, 752. It is not sufficient to show the possibility or even the probability of an appraisal of commercial improvements that would be, generally, 34 percent or 40 percent higher than appraisals of residential improvements, as was shown here. Workable criteria for concrete determination of discrepancy have been delineated by the Iowa Supreme Court:
“In order to obtain relief upon the ground that his property is assessed inequitably, it is essential that the taxpayer prove (1) that there are several other properties within a reasonable area similar and comparable to his; (2) the amount of the assessments on these properties; (3) the actual value of the comparable properties; (4) the actual value of his property; (5) the assessment complained of; (6) that by a comparison his property is assessed at a higher proportion of its actual value than the ratio existing between the assessed and actual valuations of the similar and comparable properties, thus creating discriminations.” Maxwell v. Shivers (1965), 257 Iowa 575, 133 N.W.2d 709, 711.
We would adopt these criteria as at least a starting place for actual comparison of true value to assessed value ratios. They, and other reasonable criteria that might be devised by the Department or the Board, should set the standard for proof in each case. See also Bynum v. Alto Independent School Dist. (Tex.1975), 521 S.W.2d 656, 660. Because no such criteria were followed, and because there was no comparison of actual true and assessed value ratios as between the commercial improvements of the respondent taxpayers and residential improvements of other taxpayers in the county, the decision of the District Court must be reversed and the state Tax Appeal Board’s blanket reduction of 34 percent on commercial improvement appraisals must be set aside.
In reversing we do not, however, hold that the appraisals of the Department are confirmed. We only hold that the taxpayers have not introduced sufficient evidence to justify a finding that the appraisal method employed by the Department violates uniformity, equal protection and due process requirements and to warrant a blanket 34 percent reduction of the assessments of commercial property. Therefore, the matter must be returned to the Board for its further consideration.
On further consideration, the Board should hold a hearing at which evidence of the true and assessed values of commercial and residential property is introduced pursuant to the criteria adopted above. This will allow it to compare the actual difference in the true value to assessed value ratios between commercial and residential property resulting from the appraisal method adopted by the Department. The Board might find on such hearing that the Department’s appraisal method is arbitrary, capricious or otherwise unlawful, but it may not amend or repeal the appraisal regulation. Section 15-2-301(4), MCA. It may, however, modify the appraisals by reducing the appraisals of commercial property to a ratio of true value to assessed value equal to the ratio applied to residential property. Section 15-2-301(4), MCA.
If, upon a further hearing, the Board finds the Department’s appraisal procedure arbitrary, capricious or unlawful and that a reduction in the appraisals of commercial property is justified, proof of an excessive appraisal must be made by each taxpayer who seeks relief. Bynum, supra, 521 S.W.2d at 660. Each taxpayer should follow the above criteria to establish the amount of reduction the taxpayer is entitled to. This does not mean each taxpayer seeking relief must introduce evidence as to the value of all improvements to real property in a county. The taxpayer must, however, introduce evidence of enough property located near the taxpayer’s property and in the same legislative classification so the Board can establish the proper true value to assessed value ratio for the property without speculation or conjecture. Skinner, supra, 345 P.2d at 752. Once the proper ratio has been established, the Board can determine the proper amount to reduce an individual taxpayer’s property by applying the ratio to the property.
Resolution of other issues raised on the appeal is not essential to this decision or its implementation and they, therefore, are not considered here. The cause is remanded to the District Court, which is directed to return it to the State Tax Appeals Board for further proceedings in accord with this opinion.
MR. CHIEF JUSTICE HASWELL, and JUSTICES SHEA and SHEEHY, concur.
MR. JUSTICE DALY, agrees with this Opinion but is unavailable to sign. | [
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MR. JUSTICE DALY
delivered the opinion of the Court.
Plaintiff appeals from a judgment entered in the District Court of the Fifth Judicial District, the Honorable Frank E. Blair, presiding, in favor of defendant First National Bank of Dillon (Bank), in an action by plaintiff to recover on a check allegedly improperly negotiated by the Bank and deposited in a joint account controlled by plaintiff’s then wife.
On August 8, 1974, Checking Account No. 2-227-7 was opened at the Bank in the names of plaintiff Fred Beyer and his then wife, Peggy Beyer. The account was designated as a joint tenancy with right of survivorship. The wife, Peggy Beyer, executed the signature card which evidenced the account and made an opening deposit therein of money and checks belong to herself and her husband. She caused to be ordered, and thereafter received, printed personal checks embossed “Fred and Peggy Beyer, 35 North Idaho No. 2, Dillon, Montana 59725.”
Peggy Beyer executed the signature card required by the Bank which evidenced the account. Plaintiff did not sign the card; however, a typed notation on the card read, “Fred Beyer in the hospital, will sign card later.” Fred Beyer never did sign the signature card.
From the date the account was opened on August 8, 1974, until it was closed on June 30, 1975, plaintiff and his wife used the checking account. Monthly bank statements received by plaintiff and his wife at their home address indicated normal checking and deposit activity over a period of some ten months while the account was open. Plaintiff himself, however, did not write any checks against the account.
Both plaintiff and his wife individually and jointly deposited funds to the account from various sources, including checks payable solely to Peggy Beyer as wages, unemployment insurance, checks payable solely to plaintiff-as wages, and checks payable to plaintiff and to his wife, which were received from plaintiff’s parents. The District Court found that all the deposits made and checks drawn on this account were made with the knowledge, consent and permission of plaintiff. Plaintiff’s objection to the manner in which the account was utilized apparently developed when the couple started having marital difficulties.
On or about May 10, 1975, plaintiff and his wife received from an insurance company a check payable to them and to an attorney in Great Falls, Montana. This check represented the proceeds of the settlement of a personal injury claim for injuries which plaintiff had sustained in a July 25, 1974, motorcycle accident. As a result of this accident, plaintiff was hospitalized until mid-October, 1974, during which time his wife opened Checking Account No. 2-227-7 on August 8, 1974. The litigation resulting in this settlement was instituted by plaintiff and his wife as plaintiffs against Peggy Beyer’s insurance company under the uninsured motorists coverage of their motor vehicle liability policy. The parties jointly, by a written contract, employed a law firm to prosecute the action on their behalf.
Following the receipt of the insurance company check, plaintiff endorsed the same, as did his wife, and returned it to their attorney, who was also a payee, to be negotiated by the attorney and disbursed by him pursuant to the contract of employment.
On or about May 13, 1975, plaintiff and his wife received a check from their attorney in the amount of $5,899.00, which was their share of the proceeds of the personal injury settlement. The check was payable to “Fred Beyer and Peggy Beyer.” It was deposited to the account by Peggy Beyer without being endorsed by her or by the plaintiff. The Bank negotiated this check after a Bank employee stamped the check with the following endorsement:
“Deposited to the account of the within named payee in accordance with payee’s instruction. Absence of the endorsement guaranteed by the First National Bank of Dillon, Montana.”
The trial court found that this deposit was made with the specific knowledge and consent of plaintiff.
The court further found that when the $5,899 check was received, the couple agreed that it would be deposited to their account at the bank and checks drawn for the payment of their outstanding bills and for the opening of a joint savings account. Peggy Beyer immediately proceeded to draw checks on the account in payment of the bills. These checks represented payments for rent, medical bills, hospital bills, bills for local services and supplies, credit card invoices charged to both parties, and the repayment of a $1,780.10 loan which was owed by Peggy Beyer on the family automobile, all of which aggregated the sum of $3,333.51. At this time, Peggy Beyer opened a joint savings account to which she deposited the sum of $1,000. The signature card evidencing the savings account was likewise signed only by Peggy Beyer, but the trial court found that it was opened with the knowledge, consent and at the direction of plaintiff. Likewise, the court found that Peggy Beyer signed all the checks in payment of the outstanding bills with plaintiff’s consent and at his direction.
Marital difficulties had arisen between Fred and Peggy Beyer, and on May 28, 1975, two weeks after the arrival of the $5,899 check, plaintiff returned to the State of Pennsylvania where he had formerly resided. He did not return to Montana until the trial of the dissolution of his marriage in the summer of 1976. In the meantime, plaintiff’s wife went to Pennsylvania in an unsuccessful effort to effect a reconciliation, purchasing an airline ticket for her transportation in the amount of $198 with a check drawn on the account. While in Pennsylvania, plaintiff’s wife gave him various unspecified sums of money, and she also sent him a check for $ 150 after she returned to Montana.
Plaintiff consulted with legal counsel in Pennsylvania and called the Bank regarding the $5,899 check. He thereafter obtained counsel in Montana, who made a formal written demand upon the Bank in December 1975. Plaintiff filed his complaint in this action on May 6, 1977, and trial was held on April 3, 1979. The District Court issued its findings of fact and conclusions of law on July 6, 1979, and its judgment in favor of defendant Bank on July 17, 1979.
The District Court found that the aggregate benefit which plaintiff realized from the insurance settlement of $5,899 was the sum of $4,681.51, consisting of $3,333.51 for the payment of outstanding bills, including the loan on the family automobile, $ 1,000 for the joint savings account deposit, $198 for the airline ticket, and the $150 check. Plaintiff acknowledged that he had received the benefit of $1,831.52 for the payment of outstanding bills and expenses, but he denied receiving any benefit from the remainder, in particular, the repayment of the $1,780.10 car loan, the $1,000 deposit opening the joint savings account, and the $ 150 check. The court also found that at no time during the ten-month existence of the joint account did plaintiff ever object to the manner in which it was utilized, either with respect to the depositing of funds or the withdrawal of funds, and that he affirmatively participated in both the depositing and disbursement of funds.
It was not disputed that Fred Beyer never signed the signature card or wrote any checks against the account. Gary Kruger, cashier of the defendent Bank and the only bank employee called as a witness at trial, testified that Fred Beyer, not having signed the signature card, was never authorized to draw checks on Account No. 2-227-7 and that Peggy Beyer was the only person who could draw a check on the account. Nevertheless, when asked whether the Bank would have honored a check written on the account by Fred Beyer, Kruger stated, “possibly we would have.” He admitted, however, that it would not be good banking practice and there would be no way of knowing whether the signature was a forgery or not. This testimony was apparently the basis of that part of the trial court’s Finding No. 9, which states:
“While the Plaintiff never signed a check himself, the Court finds that he could have, and that any such checks drawn by him would have been paid, because of the manner, habits and usage of the account for some ten months.”
Kruger also testified that Fred Beyer did not endorse the $5,899 check and that he did not authorize or instruct the Bank to deposit that check to Account No. 2-227-7. Plaintiff likewise testified that he did not authorize the Bank to endorse the $5,899 check, but the Bank nevertheless stamped its guaranteed endorsement on the check and negotiated it.
The District Court concluded that Checking Account No. 2-227-7 was established and owned by plaintiff and his wife and that both were entitled to draw funds on the account. Furthermore, the proceeds of the $5,899 check were the joint property of plaintiff and his wife as tenants in common, and it was deposited to Account No. 2-227-7 to the credit of both payees.
The District Court concluded that plaintiff was equitably es-topped from denying his joint and beneficial ownership of the account and the proceeds deposited and withdrawn therefrom by reason of his affirmative acts, conduct and silence and the Bank’s reliance thereupon to its detriment. The District Court also concluded that plaintiff was guilty of laches and that he had sustained no damages, so that to grant him relief would constitute unjust enrichment. In the alternative, the court also found that plaintiff made a gift to Peggy Beyer to the extent of his co-ownership of the moneys deposited to the account. From this judgment, plaintiff appeals.
The issue on appeal is whether the judgment of the District Court is supported by substantial credible evidence.
Although the check at issue in this case is a nonnegotiable instrument payable to “Fred Beyer and Peggy Beyer,” section 30-3-805, MCA, and the commission comments to that section of the Uniform Commercial Code make it clear that Chapter 3 of the U.C.C. applies to transactions involving this check, with the exception that there can be no holder in due course of such an instrument. In particular, this check is governed by section 30-3-116, MCA, which provides:
“Instruments payable to two or more persons: An instrument payable to the order of two or more persons:
“(a) if in the alternative is payable to any one of them and may be negotiated, discharged or enforced by any of them who has possession of it;
“(b) if not in the alternative is payable to all of them and may be negotiated, discharged, or enforced only by all of them.” (Emphasis added.)
Since the check is payable only to “Fred Beyer and Peggy Beyer” together, subsection (b) applies and “both must endorse in order to negotiate the instrument, although one, of course, may be authorized to sign for the other.” Comment to the Uniform Commercial Code, section 30-3-116, MCA. The mere fact that the copayees are husband and wife does not authorize one to sign for the other:
“Normally, when a check is made payable to husband and wife, it is considered to be payable to them jointly and the check must be endorsed by both of them . .” Murray, Joint Payee Checks -Forged and Missing Endorsements, 78 Comm.L.J. 393, 395 (1973).
It is undisputed that neither Peggy Beyer nor Fred Beyer endorsed the $5,899 check, and that it was deposited to Account No. 2-227-7 by Peggy Beyer and stamped with the Bank’s guaranteed endorsement.
As a general proposition,
“Courts in a number of cases have held or recognized that a cashing or collecting bank which pays a check drawn to joint payees, other than partners, without obtaining the authentic endorsement of all such payees, is liable to a nonsigning payee for the value of his interest in the check, unless the nonsigning payee has authorized or ratified such payment.” Annot., 47 A.L.R.3d 537, 543 (1973).
See Edwards Co. Inc. v. Long Island Trust Co. (1973), 75 Misc.2d 739, 347 N.Y.S.2d 898.
The depository or collecting bank’s liability to a nonendorsing copayee has been founded on a conversion theory:
“A bank’s liability for paying a check drawn to joint payees without requiring the authentic endorsement of all such payees usually has been based upon the view that the payment of such a check without the statutorily prescribed endorsements constituted a conversion of the instrument or was a breach of a quasi-contractual duty.” Annot., 47 A.L.R.3d 537, 540 (1973).
Peoples Nat’l Bank v. American Fidelity Fire Ins. Co. (1978), 39 Md.App. 614, 386 A.2d 1254; Trust Co. of Columbus v. Refrigeration Supplies, Inc. (1978), 241 Ga. 406, 246 S.E.2d 282, on remand 146 Ga.App. 825, 247 S.E.2d 542; Berkheimers, Inc. v. Citizens Valley Bank (1974), 270 Or. 807, 529 P.2d 903; Federal Deposit Insurance Corp. v. Marine Natl. Bank (5th Cir.1970), 431 F.2d 341; CF., Insurance Co. of North America v. Atlas Supply Co. (1970), 121 Ga.App. 1, 172 S.E.2d 632. In particular, this result has been reached under the Uniform Commercial Code, section 30-3-419, MCA, which provides: “(1) An instrument is converted when: . . . (c) it is paid on a forged endorsement.” With reference to this section, it has been observed:
“While the Code rule is strictly applicable only to cases involving payment on a forged endorsement, it may be applied by analogy to those cases wherein a check was paid without requiring the endorsement of a copayee . . .” Annot., 47 A.L.R.3d 537, 541 (1973), citing Federal Deposit Ins. Corp. v. Marine Natl. Bank (5th Cir. 1970), 431 F.2d 341.
See also Peoples Natl. Bank v. American Fidelity Fire Ins. Co. (1978), 39 Md.App. 614, 386 A.2d 1254. The same result was reached in Berkheimers, Inc. v. Citizens Valley Bank (1974), 270 Or. 807, 529 P.2d 903, on general principles of law relating to conversion under Section 1-103 of the U.C.C.
“The rationale of such decisions appears to be that since joint-payee instruments require the endorsement of all payees under § 3-116(b) payment on the endorsement of fewer than all payees is an exercise of dominion and control over the instrument inconsistent with the rights of the owner, and results in liability for conversion.” Annot., 47 A.L.R.3d 537, 542 (1973).
Section 30-3-419(3), MCA, however, gives the depository or collecting bank a defense to a suit for conversion and limits the bank’s liability where the bank acts in good faith and in accordance with reasonable commercial standards:
“. . . a representative, including a depository or collecting bank, who has in good faith and in accordance with the reasonable commercial standards applicable to the business of such representative dealt with an instrument or its proceeds on behalf of one who was not the true owner is not liable in conversion or otherwise to the true owner beyond the amount of any proceeds remaining in his hands.”
See Murray, supra, 78 Comm.L.J. at 402; Comment 5 to section 3-419 of the U.C.C.; and sections 30-4-201(1) and 30-4-202(1 )(a), MCA.
Therefore, if the defendant-respondent, First National Bank of Dillon, acted in good faith and in accordance with reasonable commercial standards when it permitted Peggy Beyer to deposit the $5,899 check payable to “Fred Beyer and Peggy Beyer” in Checking Account No. 2-227-7 without the endorsement of either payee, the Bank would not be liable to Fred Beyer beyond the amount of any proceeds remaining in the Bank. Since the record indicates that neither the instrument itself nor any proceeds of it remained in the Bank at the time of suit, the Bank would not be liable at all if it acted in good faith and in accordance with reasonable commercial standards.
The Bank’s good faith has not been challenged, and since the account to which the check was deposited was in fact the joint account of Fred and Peggy Beyer, as the trial court found, the Bank has complied with reasonable commercial standards.
Without again reciting the facts in this case, we find the conclusions of the District Court to be supported by substantial evidence. Arrowhead, Inc. v. Safeway Stores (1978), ... Mont. ..., 587 P.2d 411, 35 St. Rep. 1830. In particular, there is substantial evidence to support the conclusion that plaintiff-appellant Fred Beyer is equitably estopped from denying his joint and beneficial ownership of Account No. 2-227-7, by virtue of his acknowledgement and use of the account over a period of time, and the Bank’s reliance thereupon in crediting the $5,899 check to that account. Section 26-1-601(3), MCA; Howeth v. D.A. Davidson & Co. (1973), 163 Mont. 355, 517 P.2d 722; City of Billings v. Pierce Packing Co. (1945), 117 Mont. 255, 161 P.2d 636; Mundt v. Mallon (1938), 106 Mont. 242, 76 P.2d 326, 329. Appellant cannot be heard to complain that he lacked authority to draw checks on the account when he could have remedied that situation by the simple expedient signing of the signature card.
The judgment of the District Court is affirmed.
MR. CHIEF JUSTICE HASWELL, and JUSTICES HARRISON, SHEA and SHEEHY, concur. | [
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MR. JUSTICE DALY
delivered the opinion of the Court.
Appellant appeals from an order denying his petition to modify support payments. The order was entered by the District Court, Eleventh Judicial District, Flathead County.
The parties to this action were divorced on December 13, 1971. Under the divorce decree, respondent was given the custody of the parties’ four minor children. Appellant was ordered to pay $60 per month per child in support payments.
In September 1977, the District Court entered an order modifying child support. Under this order appellant was required to pay $75 per month per child until July 1, 1978, and thereafter $85 per month per child current support and $50 per month on accrued support which totaled $2,280.
Shortly after the entry of this order, appellant sustained an injury which resulted in a one month disability. The parties stipulated in writing to reduce appellant’s October 1977 child support obligation by one-half.
In addition to this, one of the children began residing with appellant on a part-time basis while attending school. As a result of these circumstances, the parties further stipulated to reduce appellant’s child support obligation, as to that child, by one-half. Approximately a year after the September 1977 order the appellant sustained a severe, work-related injury to his foot, and as a result, the front half of the foot was nearly severed. He underwent two operations and was still totally disabled at the time of the May 1979 hearing.
At the time of the September 1977 order, appellant’s monthly net income was $ 1,074.62. As a result of the second injury and his temporary total disability, appellant’s expendable income was diminished. His cumulative income, after the accident, comprised of industrial accident disability benefits in the sum of $752 a month and disability credit payments in the sum of $153.71 per month, for a total monthly income of $905.71.
This situation was brought to the attention of the District Court, and although a formal petition was not filed by either party, proceedings were commenced for a full review of child support obligations and for such modification as had become appropriate under the circumstances. The District Court entered its findings of fact, conclusions of law and order on May 22, 1979. It found that appellant owed $2,335 in accrued support and ordered him to repay the sum at the rate of $50 per month. The court, however, suspended these payments during the period of appellant’s disability. The court further ordered appellant to continue to pay child support for the couple’s two remaining minor children at the rate of $85 per month, suspending $10 per child per month during the period of disability. These suspended payments were to be added to the amount appellant owed in accrued support. The court also required the parties to share equally all medical, dental and ocular expenses in excess of the insurance coverage which appellant is required to maintain. Finally, the court ordered that during periods of visitation of two weeks or more, the child support payments would be reduced by one-half for the duration of the visit.
Appellant raises the following issue on appeal:
1. Whether the District Court’s findings of fact and conclusions of law were sufficient to support the May 1979 order?
More particularly, the issues to be resolved are:
(a) Did the District Court err in denying appellant a reduction in child support?
(b) Did the District Court err in its computation of accrued child support?
(c) Did the District Court err in reserving the right to order all or a part of accrued support to be paid from proceeds of appellant’s industrial accident settlement, if any?
Appellant initially contends that the District Court erred in not reducing his child support obligation. He submits that the change in his financial circumstances occurring after his accident was sufficient to require a modification of the support decree. Respondent argues that the plan laid out by the District Court to suspend appellant’s payments during the period of disability was a more than adequate modification under the circumstances.
Before it was amended in 1979, and for the purposes of this appeal, section 40-4-208(1), MCA, provided:
“Except as otherwise provided in 40-4-201(6), the provisions of any decree respecting maintenance or support may be modified by a court only as to installments accruing subsequent to the motion for modification and either:
“(a) upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable; or
“(b) upon written consent of the parties. The provisions as to property disposition may not be revoked or modified by a court, except:
“(i) upon written consent of the parties; or
“(ii) if the court finds the existence of conditions that justify the reopening of a judgment under the laws of this state.”
The record here shows that the trial court was cognizant of appellant’s financial situation when issuing its order partially suspending support payments. Further, the order was formulated in a manner which would serve the best interests of the children. Therefore, we cannot say that the District Court abused its discretion in modifying the support payments as it did. We affirm that portion of the modification order partially suspending appellant’s future child support.
We must, however, reverse that part of the order relating to the suspension of payments for appellant’s delinquent child support during the period of his disability. This portion of the order, in effect, modified the judgment previously entered in the District Court as to the accrued child support payments. As such, it conflicts with section 40-4-208(1), MCA, and is impermissible. Williams v. Budke (1980), 186 Mont. 71, 606 P.2d 515.
“. . . the order of the District Court deferring payments took away [the wife’s] right to levy execution for the accrued payments if property could be found in the possession of the husband which could be applied to the arrearages. Our holding here keeps in force the rights that every holder of a judgment for support in a dissolution of marriage has:
“ ‘. . . There are various means of enforcing orders directing the payment of support money in actions for divorce. The most common are: (a) By requiring the husband to give security for the enforcement of the payments ordered [citing a statute and a case]; (b) by contempt proceedings [citing cases]; (c) by execution, as in the case of other money judgments [citing the authority] and (d) by invoking the police power of the state to punish the parent for willfully failing, refusing or neglecting to support his child [citing authority].’ State v. District Court (1948), 122 Mont. 61, 72, 198 P.2d 761, 767.
“Moreover, our holding here does not mean that a District Court is entirely without power to arrange a deferred schedule for arrearages and support payments . . . The District Court always has jurisdiction in contempt proceedings for the purpose of enforcing a support money decree, to find the defaulting party in contempt, and to stay the execution of punishment for the contempt upon the proviso that the defaulting party purge himself by making payments in accordance with a schedule established by the District Court. We so stated in State v. District Court, supra, 122 Mont. at 74, 75, 198 P.2d at 768.
“However, the deferral schedule adopted by the District Court here, without reference to contempt, constituted a modification of a judgment for accrued payments. This cannot be done.” Williams v. Budke, supra, 606 P.2d at 518-519, 37 St.Rep. at 232-33.
Appellant next contends the District Court erred in computing the amount of delinquent child support owed by him. A review of the record indicates that, although a conflict in the evidence exists, there is substantial evidence to support the District Court’s findings and conclusions. Cameron v. Cameron (1978), 179 Mont. 219, 587 P.2d 939. The District Court’s computation of accrued child support is therefore affirmed.
Finally, appellant submits the District Court erred in its Finding of Fact No. 15 wherein it reserved the right to order all or a portion of the delinquent child support payments to be paid from any workers’ compensation settlement appellant might receive. This is merely a statement of a future action the court might take. It is not a final order and, therefore, does not constitute an appealable issue. Rule 1, M.R.App.Civ.P.
The judgment of the District Court is affirmed in part and reversed in part.
MR. CHIEF JUSTICE HASWELL and JUSTICES HARRISON, SHEA and SHEEHY concur. | [
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MR. JUSTICE HARRISON,
delivered the opinion of the court.
This is an appeal from a judgment of the District Court of the Tenth Judicial District, State of Montana, in and for the County of Fergus, dissolving the marriage, settling custody and child support provisions and dividing the marital property. The appeal principally centers around the division of the marital property.
Respondent wife is a teacher and a coach at Fergus County High School, where she has taught since the fall of 1977. Appellant husband is a mechanic and maintenance man for the Montana State Highway Department where he has worked since January 1973.
The parties began their married life without assets. Except for a short period of time when she was finishing her college education at Eastern Montana College, wife has worked with husband in his various occupations. Early in the marriage the couple operated a service station in Wisconsin, and wife worked with husband in the operation of this station. After coming to Montana, husband worked as a mechanic in Billings, Montana, while wife finished her education. Thereafter, they moved to Lewistown, Montana, where wife became a teacher and a coach and husband continued to work in the field of mechanics, prior to going to work for the Highway Department. The parties purchased a home when they moved to Lewistown for which a downpayment was made from monies husband had obtained from his family.
The parties sold the house in Lewiston and used the proceeds of the sale to purchase ten and one-half acres outside of town where they erected a Capp home. The Capp home cost $25,000 and was put in place over a basement that had been dug and poured. The house was a shell of a house when it was put up in 1975. Since that time the family has continually worked on the house to finish it and make it totally livable. This has taken some three years of work by husband, wife and their two boys, and the family’s income has gone into the purchase of materials, etc., to complete this house. The property and house are the principal assets of the family and are the center of this dispute because the trial court’s order and judgment directed that respondent wife get this property.
Respondent testified as to the value of the property and put the value at $80,000. Husband valued the property at between $85,000 and $100,000, and a separate appraisal was made by an FHA appraiser who set a value of $85,000. In addition, the parties owned a lot in Wisconsin of a lake which was recreational property. The value of this property is estimated between $10,000 and $15,000. There was at the time of the decree of dissolution a $24,508 mortgage against the house and ten acres. The rest of the property listed and divided by the court was personal property including automobiles, horses, farm equipment, and tools, and those things that are necessary around the house, including a collection of guns estimated at a value of approximately $2,500.
According to the net distribution, respondent wife received approximately 73 to 79 percent of the net worth of the couple, and husband received 21 to 27 percent. Appellant husband argues on appeal this distribution is totally inequitable.
This issue before us is whether the trial court complied with the provisions of section 40-4-202, MCA, in making the distribution of property of the marriage in an equitable manner, or whether the court abused its discretion in making the property division.
This Court has, since 1975 when the Marriage and Divorce Act was passed, considered many cases with regard to proper property division in dissolution of marriage cases. We have adopted certain guidelines for the equitable distribution as mandated under section 40-4-202, MCA.
Several criteria stand out as mandates, first of which is that the District Court make findings of fact from which there can be established a net worth of the parties. See In re Marriage of Schultz (1979), 184 Mont. 245, 597 P.2d 1174; Herring v. Herring (1979), 184 Mont. 353, 602 P.2d 1006; Vivian v. Vivian (1979), 178 Mont. 341, 583 P.2d 1072; Downs v. Downs (1979), 181 Mont. 163, 592 P.2d 938; In re Marriage of Capener (1978), 177 Mont. 437, 582 P.2d 326; Kruse v. Kruse (1978), 179 Mont. 79, 586 P.2d 294; In re Marriage of Brown (1978), 179 Mont. 417, 587 P.2d 361; Robertson v. Robertson (1978), 180 Mont. 226, 590 P.2d 113; Grenfell v. Grenfell (1979), 182 Mont. 229, 596 P.2d 205; In re Marriage of Herron (1980), 186 Mont. 397, 608 P.2d 97.
The above cases generally hold that there must be complete findings as to the assets and liabilities of the parties and their values for establishment of a net worth. This Court has allowed a failure to find a net worth to stand only where there has been a 50/50 split of the property. See Bailey v. Bailey (1979), 184 Mont. 418, 603 P.2d 259; Reese v. Reese (1979), 185 Mont. 52, 604 P.2d 326; Kuntz v. Kuntz (1979), 181 Mont. 237, 593 P.2d 41.
Here the trial court’s failure to make findings establishing the net worth of the parties prior to dividing the marital property and dividing it in an inequitable manner without regard to the husband’s contributions and inheritance necessitates a reversal. We remand with directions to ascertain the net worth of the parties in arriving at a proper division of the same.
MR. CHIEF JUSTICE HASWELL and JUSTICES DALY, SHEA and SHEEHY, concur. | [
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] |
MR. JUSTICE SHEA
delivered the opinion of the court.
Defendant Mike J. Berek, appeals from an order of the Flathead County District Court denying his motion for a change of venue to Cascade County. The sole issue in this appeal is whether the place of performance in a contract is in Flathead County or Cascade County. We affirm the District Court.
Plaintiff, R. K. Peenstra, d/b/a Town House Furniture (herein furniture store) operates a retail furniture store in Kalispell, Montana. Defendant purchased furniture in Kalispell but had it delivered to Great Falls, Montana, his place of residence. Defendant (herein buyer) paid $100 down with the balance to be paid after delivery in Great Falls. Payment was to be made to the plaintiff (herein seller) at his office and business in Kalispell. Delivery was made by the seller but the buyer failed to pay, and the seller filed suit in Flathead County District Court for the balance allegedly owed plus interest.
The buyer moved the court to change the venue to Cascade County, his place of residence, and the place where he alleges the contract was to be performed. The trial court entered findings and conclusions and an order denying the motion for change of venue, and this appeal followed. The essence of the buyer’s argument is that the contract called for performance in Great Falls — apparently because delivery was made there. On the other hand, the seller contends that delivery was made and the only remaining performance to be made was that of payment, which was to be made in Kalispell.
Although the general rule in civil actions is that they are “. . . tried in the county in which the defendants . . . reside at the commencement of the action” (section 25-2-108, MCA), an exception is provided in section 25-2-101, MCA, which provides that “actions upon contracts may be tried in the county in which the contract was to be performed ...” This section applies either where “The place of performance must be evident either by (a) the express terms of the contract, or (b) by necessary implication that a county other than that of defendant’s residence is intended to be the county of performance.” Deimler v. Ostler (1979), 183 Mont. 480, 600 P.2d 814, 815; Hopkins v. Scottie Homes, Inc. (1979), 180 Mont. 498, 591 P.2d 230, 232.
Here the express terms of the contract provide that the seller was to perform by making delivery in Great Falls (Cascade County), but that the buyer would perform by making payments in Kalispell (Flathead County). The seller fully performed, but the buyer allegedly has failed to perform his obligations which are to be performed in Flathead County. Under these circumstances, we conclude that venue is properly in Flathead County.
The order of the District Court is affirmed.
MR. CHIEF JUSTICE HASWELL and JUSTICES HARRISON, DALY and SHEEHY concur. | [
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MR. JUSTICE DALY,
delivered the opinion of the Court.
The issue in this case is whether the District Court, County of Silver Bow, abused its discretion in ordering appellant to pay his former wife $200 per month maintenance pursuant to a decree of dissolution of marriage.
The marriage of Robert Wilber Vivian and Elizabeth Pearl Vivian was dissolved in 1977 by a decree of the District Court. Wife appealed from the District Court’s distribution of marital property and award of maintenance, and this Court reversed and remanded for a new trial. Vivian v. Vivian (1978), 178 Mont. 341, 583 P.2d 1072. In our prior opinion, we held that the District Court had failed to determine the net worth of the parties and make specific findings to support the distribution of marital assets; had erred in deducting the husband’s inheritance from the value of the home prior to dividing the marital property; and that because the distribution was reversed, the award of maintenance would also have to be reversed because “[t]he rule is that the need of the spouse as to maintenance and the reasonableness of such an award can only be properly determined after there has been an equitable division of the marital estate.” Vivian v. Vivian, supra, 583 P.2d at 1075, 35 St.Rep. at 1362.
After a new trial following remand, the District Court entered findings of fact and conclusions of law on June 26, 1979. The husband challenged these findings and conclusions and additional hearings were held on August 8, 1979 and on August 30, 1979. The District Court issued its final amended findings of fact and conclusions of law, together with an accompanying memorandum on September 7, 1979, and the amended judgment and decree was filed on October 23, 1979.
The District Court ultimately found the new worth of the parties to be $47,500.55 at the time of the divorce and determined that the wife owed medical bills of $1,025.70 and further indebtedness of $5,000 plus interest on a bank loan. The marital property was divided equally, based on the wife’s contribution as a homemaker for nearly thirty years, with each party to receive $23,750. The husband was ordered to pay the wife $200 per month maintenance. Husband was given the option of satisfying the wife’s share of the marital estate by payment of a lump sum of $23,750 or by paying $8,509.73 cash and the balance of $15,240 over ten years at $184.90 per month, which includes 8 percent annual interest on the balance due.
The pertinent findings of the District Court are:
“III That Petitioner, Elizabeth Pearl Vivian is now 59 years old and has no formal training for any type of employment outside the home.
“IV That Petitioner has recently undergone major surgery and is convalescing therefrom; that prior to her surgery she was in extremely poor health, suffering from diabetes and high blood pressure and was mentally and physically incapable of working. That Petitioner still suffers from hypertension, weakness and diabetes and she is still under a Doctor’s care for hypertension and diabetes.
“VII That the Respondent, Robert Vivian is an able-bodied man, age 57, employed by the Montana Power Company in Butte and earns a gross income of $1,740.00 per month.
“VII That the only source of income Petitioner now has is the temporary support which the Montana Supreme Court ordered Respondent to pay in the sum of $200.00 per month and that it was established during the hearing that this was inadequate to meet her modest needs and support.
“XII That when Petitioner has paid [her debts] she will have remaining about $17,724.30 from the marital assets allocated to her hereunder. The Court finds that said sum is insufficient to provide for ordinary and reasonable needs, the Petitioner being unable to support herself by employment in any of the ways suggested by Respondent, or at all.
“That in consideration of all of the facts in this case the Court finds it fair, equitable and just that Respondent pay maintenance for Petitioner in the amount of $200.00 per month until the further order of this Court, said payments to commence the 15th day of the month succeeding the date of the entry of the amended judgment in this action.”
The wife’s needs and the District Court’s reasoning for awarding her maintenance are further detailed in the District Court’s memoranda filed August 20, 1979 and September 7, 1979. On appeal, the husband urges that the District Court abused its discretion in awarding his former wife $200 per month in maintenance. He contends that the District Court abused its discretion by failing to consider the elements of a maintenance award and by failing to adopt findings of fact regarding the ability of the husband to pay, the ability of the wife to work, and the wife’s needs after receiving her half of the marital estate. Respondent wife challenges the District Court’s finding as to her indebtedness, arguing that the court erred in failing to find that she owes $5,000 in attorney fees and in reducing her maintenance from the original award of $250 per month to $200 per month. We find these contentions to be without substance.
The prerequisites for a maintenance award are set forth in section 40-4-203, MCA:
“Maintenance. (1) In a proceeding for dissolution of marriage or legal separation or a proceeding for maintenance following dissolution of the marriage by a court which lacked personal jurisdiction over the absent spouse, the court may grant a maintenance order for either spouse only if it finds that the spouse seeking maintenance:
“(a) lacks sufficient property to provide for his reasonable needs; and
“(b) is unable to support himself through appropriate employment or is the custodian of a child whose condition or cir cumstances make it appropriate that the custodian not be required to seek employment outside the home.
“(2) The maintenance order shall be in such amounts and for such periods of time as the court deems just, without regard to marital misconduct, and after considering all relevant facts including:
“(a) the financial resources of the party seeking maintenance; including marital property apportioned to him, and his ability to meet his needs independently, including the extent to which a provision for support of a child living with the party includes a sum for that party as custodian;
“(b) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment;
“(c) the standard of living established during the marriage;
“(d) the duration of the marriage;
“(e) the age and the physical and emotional condition of the spouse seeking maintenance; and
“(f) the ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance.”
An affirmative showing must be made as a precondition to the award of maintenance. Schultz v. Schultz (1979), 184 Mont. 245, 597 P.2d 1174, 1177.
Contrary to appellant’s contentions, the District Court in this case made appropriate findings under section 40-4-203(1), MCA, that the wife (a) lacks sufficient property to provide for her reasonable needs, even after the property distribution, and (b) is unable to support herself through appropriate employment. Thus, the District Court did not abuse its discretion. These findings are supported by substantial credible evidence, and the wife sustained her burden of making an affirmative showing. The facts show that the wife is 59 years old, has not been employed other than as a homemaker for the past thirty years and has no training for any employment, is in extremely poor health, has no outside income, is over $6,000 in debt, and that the State of Montana has paid $8,200 of her outstanding medical bills.
Furthermore, as evidenced by its findings and memoranda, the District Court properly assessed all of the relevant facts in determining the amount and duration of the maintenance award, including the considerations listed in section 40-4-203(2), MCA having made specific findings as to those facts. Regarding the issue of the husband’s ability to pay, the District Court specifically found, “[t]hat the Respondent Robert Vivian is an able-bodied man, age 57, employed by the Montana Power company in Butte and earns a gross income of $1,740.00 per month.” The court did not commit any error by failing to include a specific finding that his net take-home pay was $1,159.87 per month or that his alleged monthly expenses total $1,090.89 per month.
Likewise, while it is true that the District Court did not go so far as to draw up a monthly budget of the wife’s reasonable needs after receiving her half of the marital estate, to do so was unnecessary in view of the amount of the property award, the wife’s debts, her nonexistent earning capacity, her poor health, her age, and her lack of outside income or additional assets. Appellant’s contention that the wife should be able to rely on the amortized property distribution payments of $184.90 per month as her sole source of income is ludicrous. That such an amount is insufficient to meet her needs is supported by the wife’s testimony that she could not live on $200 per month and by the District Court’s observations in its memoranda. In addition, the wife testified to several items of support those being her $50 per month rent at government assisted housing, her expenses for medication, and the cost of food, as well as her need for clothing, furnishings, eyeglasses and dental work. In summary, it can be said that the District court adequately considered the wife’s reasonable needs.
The judgment of the District Court is affirmed with costs of this appeal assessed against appellant.
MR. CHIEF JUSTICE HASWELL, and JUSTICES, SHEA, HARRISON and SHEEHY, concur. | [
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MR. JUSTICE HARRISON
delivered the opinion of the court.
In 1977 respondents in this action filed a criminal complaint with the Musselshell County Attorney, John Pratt. The complaint alleged that appellant herein had deprived them of some money. As a result of the filing of the criminal complaint, Pratt filed a motion requesting leave to file an information in the District Court charging appellant with felony theft. The motion was granted after a finding of probable cause that appellant committed felony theft by the District Court.
Appellant was subsequently tried on the felony theft charge. The jury in the case was unable to reach a verdict at the conclusion of trial. The charges were ultimately dismissed with prejudice.
In May 1979 appellant filed this action in the District Court of the Tenth Judicial District, in and for the county of Fergus. Appellant’s complaint alleged that judicial proceeding had been instigated against him at the insistence of respondents, that the proceedings had terminated in his favor, that respondents had maliciously instituted the proceedings, that there was no probable cause for the proceedings, and that he had suffered damages as a result of the judicial proceedings instigated by respondents. The complaint asked for damages in excess of three million dollars.
Respondents filed motions to dismiss the suit brought by appellant and briefs in support of the motions. Appended to several of the briefs were copies of the motion for leave to file the criminal information filed against appellant and the order of the District Court granting leave to file the criminal information. The District Court initially denied respondents’ motions to dismiss. On further consideration, however, the court granted the motions to dismiss based on the fact that the District Court had found probable cause to allow the charges to be filed against appellant and to have the case submitted to the jury. Because of this judicial finding of probable cause, the court found one of the elements of a claim for malicious prosecution, want of probable cause for the filing of the alleged maliciously prosecuted action, was not present, and, therefore, a cause of action for malicious prosecution did not exist.
After entry of the order granting respondents’ motions to dismiss, appellant petitioned the District Court to grant the parties an opportunity to present oral argument on the motions to dismiss. The District Court granted the oral argument. After the hearing the court issued an order leaving its prior order granting the respondents’ motions to dismiss in effect. This appeal followed.
Appellant raises the following issues on appeal:
1. Did the District Court err in finding that the determination of the existence of probable cause to file the criminal charges against appellant in the criminal proceedings brought against him precludes a subsequent civil action for malicious prosecution?
2. Did the District Court err in considering matters outside the pleadings in granting respondents’ motions to dismiss without providing a hearing before granting the motions?
It is well settled that a judicial determination of probable cause to hold a party answerable to criminal charges does not preclude the party from subsequently bringing suit for malicious prosecution. While the fact the party was held to answer the criminal charge is considered prima facie or presumptive evidence of the existence of probable cause, it is not considered conclusive proof of probable cause to initiate the criminal action. De La Riva v. Owl Drug Co. (1967), 253 Cal.App.2d 593, 61 Cal.Rptr. 291, 293; Willis v. Gurry (1954), 331 Mass. 19, 116 N.E.2d 689, 690; Foster v. Banks (1931, 112 Cal.App. 622, 297 P. 106, 107;Annot., 68 A.L.R.2d 1168 (1959).
The trial court here held that the prior determination of probable cause to bring the criminal charges against appellant was conclusive on the probable cause issue in the malicious prosecution case. It then dismissed appellant’s suit because, with the conclusive determination of probable cause for the bringing of the criminal action, it would have been impossible as a matter of law for appellant to prove an essential element of a malicious prosecution cause of action. Under the above rule, this decision by the trial court was error.
The decision by the judge in the criminal proceedings that probable cause existed to hold appellant on the criminal charges and submit the case to the jury is not conclusive on the probable cause issue in the malicious prosecution case. It is not, therefore, impossible as a matter of law for appellant to prove the lack of probable cause element of a cause of action for malicious prosecution, and his case should not have been dismissed on that basis. Therefore, the decision of the District Court is reversed and the case remanded for such further proceedings as are necessary to decide the merits of appellant’s claim.
Having reversed and remanded this case on the first issue raised by appellant, it is unnecessary to comment on the second issue raised. We do, however, feel it would be helpful in ultimately deciding the case to make on additional note.
Although it is universally held that a prior determination of probable cause constitutes prima facie evidence or presumptive evidence of probable cause at a subsequent malicious prosecution proceding, there is a split of authority as to the quantum of proof necessary to overcome the presumption. Annot., 68 A.L.R.2d at 1170. Some jurisdictions require the showing of fraud, perjury, or other undue means in obtaining the original determination that probable cause existed to overcome the effect of the prima facie or presumptive evidence of probable cause established by the prior judicial determination of probable cause. See, for example, Lee v. City of Mount Vernon (1979), 68 A.D.2d 902, 414 N.Y.S.2d 215, 217; Rodgers v. W.T. Grant Company (Fla.App.1976), 326 So.2d 57, 64; Annot., 68 A.L.R.2d at 1190. Other jurisdictions only require a showing of lack of probable cause by a preponderance of the evidence to overcome the presumption of the existence of probable cause raised by a determination of probable cause in a prior proceeding. See, for example, Zalewski v. Gallagher (1977), 150 N.J.Super. 360, 375 A.2d 1195, 1200; Lampos v. Bazar, Inc. (1974), 270 Or. 256, 527 P.2d 376, 383; Annot., 68 A.L.R.2d at 1173.
The latter rule has been adopted in the numerical majority of jurisdictions. We also feel that it is the better reasoned position as it is consistent with our statutes stating a presumption which is not deemed conclusive can be controverted by other evidence and setting the normal standard of proof in civil cases as the preponderance of the evidence. See section 26-1-602, MCA; section 26-1-403(1), MCA. We see no reason to impose a higher burden of proof to overcome the presumption here than in other situations.
Therefore, we adopt the majority position. A plaintiff in a malicious prosecution action can overcome the presumption of probable cause raised by a determination of probable cause to hold the plaintiff in a criminal proceeding by showing by a preponderance of the evidence that there was no probable cause for filing the original criminal action.
Thus, should this case proceed to trial, respondents may introduce evidence of the ruling of the District Court that probable cause existed to hold appellant on the criminal charges brought against him. This will be prima facie or presumptive evidence of the existence of probable cause. Appellant can. however, overcome this presumption by showing by a preponderance of the evidence that probable cause to file the criminal action did not exist.
Reversed and remanded.
MR. CHIEF JUSTICE HASWELL and JUSTICES SHEA and SHEEHY concur. | [
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MR. CHIEF JUSTICE HASWELL,
delivered the opinion of the Court.
Claimant-appellant James E. Shannon sought benefits from the Uninsured Employers’ Fund for injuries received September 24, 1977. Claimant appealed to the Workers’ Compensation Court after relief had been denied by the Division of Workers’ Compensation. The Workers’ Compensation Court also denied relief and Shannon brings this appeal.
Claimant, James E. Shannon, was employed by Paul C. Keller and Lynn Sordie, d/b/a K & S Transport, in September 1977. On September 24, 1977, Shannon was seriously injured when a tractor-trailer rig was involved in an accident in Deer Lodge County. At the time of the accident, claimant was a relief driver and was in the truck sleeper. His injuries consisted of multiple fractures and resulted in hospitalization and extensive treatment. Shannon’s employer did not have workers’ compensation insurance coverage.
In June 1978, claimant filed a claim with the Division of Workers’ Compensation, seeking benefits from the Uninsured Employers’ Fund. His claim was denied on the ground that his injury occurred before the effective date of the payout provision of the Uninsured Employers’ Fund.
Claimant’s petition to the Workers’ Compensation Court was denied. The judgment was based on the following provision contained in section 92-214, R.C.M. 1947 (not codified in MCA):
“Effective date of uninsured employers fund. Except as provided in this section, 92-212 is effective on July 1, 1977. Payouts for benefits may not be made from the uninsured employers fund until the fund attains a level of $150,000 or fanuary 1, 1979, whichever occurs first. However, until payouts for benefits from the uninsured employers fund begin, an uninsured employer, as defined in 92-212(1), is subject to suit by an employee who suffers an injury arising out of and in the course of employment ...” (Emphasis added.)
The Workers’ Compensation Court found: “That the Division’s position relative to the retroactive effect of the Uninsured Employers’ Fund to cover accidents occurring prior to January 1, 1979 is intended to preserve the fund and make it solvent for accidents happening after January 1, 1979 and said construction is a valid and correct construction of the law.”
The claimant contends on appeal that the date specified to commence payouts, i.e. the date on which the fund attains a level of $150,000 or January 1, 1979, whichever occurs first, merely requires a claimant to wait until this date to secure payment but does not preclude recovery for injuries sustained prior to the date. This contention is based upon the effective date of the statute, July 1, 1977.
The sole issue on appeal is whether an employee, who was injured prior to the effective payout date of section 92-214, R.C.M.1947, may collect benefits from the Uninsured Employers’ Fund.
If the statute is plain, unambiguous, direct and certain, the statute speaks for itself and there is nothing left for the Court to construe. Dunphy v. Anaconda Co. (1968), 151 Mont. 76, 438 P.2d 660; Doull v. Wohlschlager (1963), 141 Mont. 354, 377 P.2d 758. If the statute is ambiguous or unclear the intention of the legislature is to be pursued if possible. Section 1-2-102, MCA. To ascertain the legislative intent, recourse must first be had to the language employed and to apparent purpose to be subserved. State ex rel. Krona v. Holmes (1943), 114 Mont. 372, 136 P.2d 220. In order to more plainly determine the legislative intent and purpose in passing the Uninsured Employers’ Fund, the relevant statutes are set out below as they were presented to the legislature, Ch. 550, Laws of Montana (1977), and as contained in R.C.M.1947. Section 92-214, R.C.M.1947, has not been codified in MCA. The remaining portion of the Uninsured Employers’ Fund has been codified in sections 39-71-501, MCA through 39-71-510, MCA.
“92-213. Election of uninsured employee to take under the fund or bring action against employer - limitation on benefit entitlement under the fund. (1) An employee who suffers an injury arising out of and in the course of employment while working for an uninsured employer as defined in 92-212(1), or an employee’s beneficiaries in the injuries resulting in death, may elect to either receive benefits from the uninsured employers fund or pursue a damage action against the employer. However, once an election has been made to either take from the fund or pursue a damage action, the election is final and binding on the employee or the employee’s beneficiaries, heirs, and personal representatives. An injured employee or the employee’s beneficiaries may not receive both benefits from the fund and pursue a damage action. If an injured employee or the employee’s beneficiaries elect to bring an action to recover damages for personal injuries sustained or for death resulting from personal injuries so sustained, it is not a defense for the employer that the:
“(a) employee was negligent unless such negligence was willfull:
“(b) injury was caused by the negligence of a fellow employee; or
“(c) employee had assumed the risks inherent in, incident to, or arising out of his employment or arising from the failure of the employer to provide and maintain a reasonably safe place to work or reasonably safe tools or appliances.
“(2) Notwithstanding the provisions of 92-212 and 92-614, injured employees or an employee’s beneficiaries who elect to receive benefits from the uninsured employers fund are not granted an en titlement by this state for full workers’ compensation benefits from the fund. Benefits from the fund shall be paid in accordance with the sums in the fund. If the division determines at any time that the sums in the fund are not adequate to fully pay all claims, the division may make appropriate proportionate reductions in benefits to all claimants. The reductions do not entitle claimants to retroactive reimbursements in the future.” (Emphasis added.)
“92-214. Effective date of uninsured employers’ fund. Except as provided in this section, 92-212 is effective on July 1, 1977. Payouts for benefits may not be made from the uninsured employers’ fund until the fund attains a level of $150,000 or January 1, 1979, whichever occurs first. However, until payouts for benefits from the uninsured employers’ fund begin, an uninsured employer, as defined in 92-212(1), is subject to suit by an employee who suffers an injury arising out of and in the course of employment. In any such action to recover damages for personal injuries sustained or for death resulting from personal injuries so sustained, it is not a defense that the:
“(1) employee was negligent unless such negligence was willful;
“(2) injury was caused by the negligence of a fellow employee; or
“(3) employee had assumed the risks inherent in, incident to, or arising out of his employment or arising from the failure of the employer to provide and maintain a reasonably safe place to work or reasonably safe tools or appliances.”
The ambiguity created under the two preceding statutes is the result of the legislative failure to expressly specify that causes of action arising prior to the effective payout date may only be maintained against the employer. However, this intent is readily determinable from the language of the statutes and the apparent underlying purpose. Section 92-214, R.C.M.1947, states that July 1, 1977, is the effective date for section 92-212, R.C.M.1947, which creates the Uninsured Employers’ Fund and reveals the purpose, funding and administration of the fund. Section 92-214, R.C.M.1947, further provides that in the period between July 1, 1977, and January 1, 1979, an injured employee may initiate an action against the uninsured employer who does not have the benefit of certain common law defenses. The purpose of this provision is to allow the fund to attain a sufficient level to pay claims without a substantial risk of insolvency. This purpose is further bolstered by the provision of 92-213(2), R.C.M. 1947, which provides that injured employees are not entitled to retroactive reimbursements if the division determines that there is not sufficient funds to pay all benefits.
We conclude that the legislative intent and purpose for including section 92-214, R.C.M.1947, was to ensure the likelihood of the Fund’s solvency by requiring employees injured prior to the effective date to seek recovery from the uninsured employer. Without this interpretation, the Uninsured Employers’ Fund would immediately become available to hundreds of claimants injured prior to January 1, 1979, which would defeat the purpose of the effective date provision contained in section 92-214, R.C.M. 1947.
The judgment of the Workers’ Compensation Court is affirmed.
MR. JUSTICES DALY, HARRISON, SHEA and SHEEHY, concur. | [
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] |
MR. JUSTICE HARRISON
delivered the opinion of the Court.
Carrie M. Morrell appeals from a summary judgment entered in favor of Robert Lee Giesick. The judgment, entered by the District Court, Sixteenth Judicial District, Rosebud County, precluded Morrell from challenging Giesick’s custody of Morrell’s child, Sandy Joe Giesick.
Sandy Joe was born on July 21, 1974. Morrell is listed on Sandy Joe’s birth certificate as the mother but no father is named. Sandy Joe’s surname on the birth certificate was Baertsch, Morrell’s maiden name. According to Giesick, he and Morrell were living together and having sexual intercourse at the time Sandy Joe was conceived. Morrell, however, maintains she had not ever met Giesick at the time Sandy Joe was conceived and Morrell was dating and having sexual intercourse exclusively with Darrell Canfield. Canfield did contribute $360 towards the medical expenses associated with Sandy Joe’s delivery.
On Thanksgiving 1974, Morrell told Giesick he was not Sandy Joe’s natural father. Morrell told Giesick this again in July 1975 and repeated it numerous times thereafter.
In December 1974, Morrell and Giesick were married in Sheridan, Wyoming. Giesick took Sandy Joe into his home, openly held her out as his natural child and allowed her to use his surname.
At some point, Morrell signed a “Consent To Custody And Guardianship” transferring Sandy Joe’s custody and control to Morrell’s parents, George and Dorothy Baertsch. In November 1975, Morrell and Giesick jointly petitioned for a writ of habeas corpus to secure Sandy Joe’s return from Morrell’s parents. The petition recited that Morrell and Giesick were Sandy Joe’s natural parents. Subsequently, Morrell’s parents voluntarily returned Sandy Joe, and the petition was dismissed.
Morrell and Giesick separated several times during their marriage. The last separation occurred in May 1976, when Morrell took the children, Sandy Joe and Amy Marie Giesick, to Oklahoma. In late December 1976, the children were returned to Montana and put into Giesick’s custody. The children have lived in Montana with Giesick and his second wife since that time.
On March 24, 1977, Giesick obtained a dissolution of his marriage with Morrell in the District Court, Rosebud County. Morrell was served by publication. Giesick was given custody of Sandy Joe and Amy Marie under the default judgment entered by the District Court. No issue has been raised here regarding the propriety of the marriage dissolution itself.
On March 29, 1979, Morrell filed this petition to set aside the child custody provision in the default marriage dissolution decree. The petition alleged Giesick possibly committed a fraud upon the District Court by alleging in the dissolution petition that Sandy Joe was “born of the marriage.” The petition also alleged the District Court lacked jurisdiction to award Giesick custody of Sandy Joe since Morrell was served by publication.
Giesick moved for summary judgment which was granted on September 26, 1979. The District Court held the dissolution court had jurisdiction to award Giesick custody of the children since the children were in Montana at the time the dissolution petition was filed and there was no irregularity in service of process. Next, the District Court held Morrell was barred by estoppel, laches and res judicata from challenging the dissolution decree’s custody provision.
Upon appeal, Morrell challenges the propriety of the summary judgment itself as well as the jurisdiction of the District Court to determine Sandy Joe’s custody. We affirm the District Court.
According to Morrell, genuine issues of material fact remain unresolved, and Giesick was not entitled to a judgment as a matter of law. The contention is without merit. Morrell admits Giesick took Sandy Joe into his home, openly held her out as his natural child, and allowed her to use his surname. Morrell also ad mits her representation in the 1975 petition for a writ of habeas corpus that Giesick is Sandy Joe’s natural father. Moreover, Morrell admits she has acquiesced for almost five years in Giesick’s being Sandy Joe’s natural father. Certainly, Giesick has changed his position in reliance on Morrell’s representations and long acquiescence. Therefore, having admitted the necessary elements, Morrell is estopped from asserting Giesick is not Sandy Joe’s natural father.
Morrell is also barred by laches from asserting Giesick is not Sandy Joe’s natural father. Morrell claims to have known for over five years that Giesick is not Sandy Joe’s natural father. Yet, Morrell waited for over three years after Giesick was awarded Sandy Joe’s custody to bring a petition for modification. During this period, Sandy Joe has undoubtedly become an integral part of the Giesick family.
Finally, Morrell is barred by res judicata from asserting that Giesick is not Sandy Joe’s natural parent. The record demonstrates Morrell was validly served by publication and in fact had notice of the proceedings. Thus, Morrell had her opportunity to challenge Giesick’s paternity of Sandy Joe, yet she failed to appear.
Morrell next contends Sandy Joe’s custody could not constitutionally be determined without personal jurisdiction over Morrell. Morrell asserts her due process rights have been violated. This contention also has no merit.
Morrell’s contentions are based on a misreading of May v. Anderson (1953), 345 U.S. 528, 73 S.Ct. 840, 97 L.Ed. 1221. While the language of this opinion is very broad, most courts interpreting the decision have limited the holding to where both the child and the defending parent are not in the rendering state at the time of the custody proceeding. See, e. g., Worland v. Worland (1976), 89 N.M. 291, 551 P.2d 981, and Bush v. Bush (Okl.1956), 299 P.2d 155. The Supreme Court decision itself indicates this is the proper interpretation. May v. Anderson, supra, 345 U.S. at 534 n. 8, 73 S.Ct. at 844 n. 8.
Limiting the effect of the May decision in this manner also makes good sense. Otherwise, the convenience of a leave-taking parent is placed above the welfare of the child. The situation becomes such that one state cannot bind the father and another state cannot bind the mother. Possession becomes not merely nine-tenths of the law but all of the law. Self-help becomes the ultimate remedy, and the law of custody is reduced to a rule of seize and run. Batchelor v. Fulcher (Ky.1967), 415 S.W.2d 828, 832-33 (Osborne, J., dissenting).
Morrell finally contends the custody provision in the dissolution decree is void since Sandy Joe is not Giesick’s natural child and there has not been a proper showing of child abuse, neglect or dependency. As noted above, Morrell is barred by estoppel, laches and res judicata from asserting Giesick is not Sandy Joe’s natural parent.
Having found no error, the judgment of the District Court is affirmed.
MR. CHIEF JUSTICE HASWELL and JUSTICES DALY, SHEA and SHEEHY, concur. | [
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JUSTICE NELSON
delivered the Opinion of the Court.
¶1 The Estate of Carolyn Watkins (the Estate) brought a legal malpractice action in the District Court for the Fourth Judicial District, Missoula County, to recover damages allegedly sustained as a result of attorney Susan Lacosta’s negligence in drafting a will and trust for Carolyn and her husband. The District Court granted Respondent’s motion for summary judgment concluding that the Estate’s action was time-barred under the three-year statue of limitations for legal malpractice. The Estate appeals. We reverse and remand for further proceedings consistent with this Opinion.
¶2 We address the following issue on appeal: Whether the District Court erred in determining that the Estate’s claim of legal malpractice was barred by the three-year statute of limitations for legal malpractice actions.
Factual and Procedural Background
¶3 Carolyn and Stanley Watkins were a married couple whose varied business holdings included a substantial interest in Watkins-Shepherd Trucking as well as vending businesses and beverage distributorships. Carolyn and Stanley maintained their business interests despite Stanley’s worsening heart condition and his legally blind status. For many years, the couple’s estate planning consisted of simple wills drafted in 1987. These wills provided that upon the death of one spouse, everything was to go to the survivor. In 1991, Stanley’s health deteriorated substantially and, given the size of the multi-million dollar estate, Carolyn became concerned about preserving the family assets for their children.
¶4 In 1992, Carolyn retained Susan Lacosta, an attorney whose emphasis was in estate and tax planning, to draft an estate plan for Stanley and herself. Carolyn instructed Lacosta to draft an estate plan with the same result as the 1987 wills, but with additional protection as far as probate, privacy and with some tax advantages. Lacosta never met with Stanley, nor did she discuss the estate plan with him.
¶5 Lacosta prepared a complex estate plan with wills and several trusts pursuant to a trust agreement entitled “The Stanley L. and Carolyn M. Watkins Revocable Trust Agreement” (the Trust). Carolyn later testified that it was her desire that the Trust remain revocable so that she would retain flexibility. Carolyn also testified that she continuously asked Lacosta whether the Trust was revocable and that Lacosta assured her that it was and that it could be changed at any time. Because Stanley was ill, Lacosta sent the documents home with Carolyn and left it to Carolyn to explain the documents to Stanley and obtain his signature. Lacosta and a member of her staff subsequently “witnessed and acknowledged” Stanley’s will.
¶6 Stanley died on April 7, 1992, and his will, prepared only a few months earlier, was admitted to probate. Although Stanley’s 1992 will was admitted to probate with Lacosta’s knowledge, Lacosta did not disclose to Carolyn or to the court that the will had been improperly executed because it was not signed in the presence of witnesses as required by § 72-2-522, MCA. Carolyn was also unaware that the Trust became irrevocable upon Stanley’s death.
¶7 More than a year after Stanley’s death, Carolyn instructed her local attorney, Don Lee, to sell an asset owned by the Trust. Lee contacted Lacosta for advise in understanding the estate plan. Lacosta advised Lee to effect the following series of transfers: (1) Carolyn, as trustee, should transfer the asset to a separate revocable trust; (2) Carolyn, as trustee of the separate revocable trust, should then transfer the asset to herself individually, and (3) Carolyn, individually, should then sell the asset to the buyer. This series of transactions was completed on July 17, 1994.
¶8 In January 1995, during a meeting with Carolyn and her insurance and financial advisor, John Hagman, Lacosta again assured Carolyn that the Trust was revocable. Hagman had substantial experience in estate planning and he directly asked Lacosta whether the Trust created a Qualified Terminable Interest Property (QTIP) trust. Lacosta responded that the Trust agreement did not create a QTIP trust and that Carolyn could do anything she wanted with any of the Trust assets because the trust was fully revocable by her. However, on April 21, 1995, during a meeting with Carolyn and her CPA, Gary McDermott, Lacosta admitted that the Trust was an irrevocable QTIP trust.
¶9 Sometime between May and July 1995, Carolyn hired Neil McKay, an estate and tax planning attorney, to determine whether and to what extent the Trust was irrevocable. McKay testified in his deposition that the Trust would be very difficult for the average layperson to understand. In fact, he testified that even as an estate and tax planning expert, he had to spend many hours reading the Trust document before he could understand it. Sometime after July 1995, McKay confirmed that the Trust was irrevocable.
¶10 When Carolyn discovered that the estate plan prepared by Lacosta did not reflect her and Stanley’s intent, she made several efforts to minimize or negate the damage. She first attempted to obtain the Trust beneficiaries’ cooperation in correcting the mistakes. This cooperative effort failed, so Carolyn next proceeded with legal action to have the erroneous estate plan legally modified. These efforts resulted in acrimonious and protracted litigation between Carolyn and her son, Steve Williamson, as well as some of the other Trust beneficiaries. In those cases (hereafter collectively referred to as the “Beneficiary Suits”), the District Court found Carolyn’s claims to be time-barred. The court reasoned that as the personal representative of her husband’s estate, Carolyn had an absolute legal duty to the beneficiaries to understand and administer the estate. It did not matter whether she in fact understood the legal documents.
¶11 Carolyn died on February 23, 1997. On December 29, 1997, her Estate brought an action to recover damages sustained by Carolyn as a result of Lacosta’s negligence. Respondents moved for summary judgment based on the statute of limitations and on the doctrines of res judicata and collateral estoppel. On December 28, 2001, the District Court ruled that the Estate’s claim was time-barred under the three-year statute of limitations. The court did not address Respondent’s other arguments. Thereafter, the Estate filed a Motion to Alter or Amend the Judgment, which the District Court denied on March 4, 2002. The court’s orders concluded that Carolyn should have discovered Lacosta’s negligence by April 1992, and that because Carolyn sustained damages by April 1992, the Estate’s claim was time-barred. The Estate appeals from these orders.
Standard of Review
¶12 Summary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. Our standard in reviewing a district court’s summary judgment ruling is de novo. Johnson v. Barrett, 1999 MT 176, ¶ 9, 295 Mont. 254, ¶ 9, 983 P.2d 925, ¶ 9 (citing Stutzman v. Safeco Ins. Co. of America (1997), 284 Mont. 372, 376, 945 P.2d 32, 34). We use the same Rule 56, M.R.Civ.P., criteria applied by the district court. Johnson, ¶ 9. Moreover, all reasonable inferences which may be drawn from the offered proof must be drawn in favor of the party opposing summary judgment. Johnson, ¶ 8 (citing Schmidt v. Washington Contractors Group, 1998 MT 194, ¶ 7, 290 Mont. 276, ¶ 7, 964 P.2d 34, ¶ 7).
Discussion
¶13 Whether the District Court erred in determining that the Estate’s claim of legal malpractice was barred by the three-year statute of limitations for legal malpractice actions.
¶14 The Estate argues that the District Court, when rendering its orders in December 2001 and March 2002, failed to recognize the substantial legal distinctions between the Beneficiary Suits and this legal malpractice case, thus, the court improperly applied the same analysis to this case as it applied in the Beneficiary Suits. The Estate maintains that the relationship at issue here and the legal duties inherent in that relationship are different from that adjudicated in the Beneficiary Suits. In the Beneficiary Suits, the court reasoned that Carolyn, as the personal representative of her husband’s estate, had an absolute legal duty to understand and administer the estate plan, thus the fiduciary duty ran from Carolyn to the beneficiaries. In this legal malpractice case, the fiduciary duty runs from Lacosta to Carolyn. We agree with the Estate that this distinction changes the application of the statute of limitations in this case.
¶15 The statute of limitations for a legal malpractice action provides:
An action against an attorney licensed to practice law in Montana or a paralegal assistant or a legal intern employed by an attorney based upon the person’s alleged professional negligent act or for error or omission in the person’s practice must be commenced within 3 years after the plaintiff discovers or through the use of reasonable diligence should have discovered the act, error, or omission, whichever occurs last, but in no case may the action be commenced after 10 years from the date of the act, error, or omission.
Section 27-2-206, MCA. The Estate argues that in some circumstances, a plaintiff is not strictly bound by this three-year statute of limitations. Rather, the Estate contends that the statute begins to run upon discovery and accrual, and delayed discovery must be excused under certain circumstances.
¶16 The first issue to address when determining whether a party is barred by the statute of limitations is when the statute begins to run. In the context of legal malpractice actions, we have held that both the “discovery rule” and the “accrual rule” are statutorily binding. Johnson, ¶¶ 11-20 (confirming statutory adoption of “discovery rule”); Uhler v. Doak (1994), 268 Mont. 191, 195-200, 885 P.2d 1297, 1300-03 (confirming statutory adoption of “accrual rule”).
¶17 The “discovery rule” begins the statute of limitations upon the discovery of the negligent act. Section 27-2-206, MCA , Johnson, ¶¶ 11-20. The “accrual rule” provides that the statute of limitations begins when all elements of a claim, including damages, have occurred. Uhler, 268 Mont. at 195-200, 885 P.2d at 1300-03 (adopting “accrual rule” pursuant to §§ 27-2-102(1)(a) and (2), MCA). Thus, the law in Montana for legal malpractice actions is that the statute of limitations does not begin to run until both the “discovery rule” and the “accrual rule” have been satisfied. Hence, the statute of limitations in a legal malpractice action does not begin to run until the negligent act was, or should have been, discovered, and all elements of the legal malpractice claim, including damages, have occurred.
Discovery Rule
¶18 The Estate contends that its claim filed on December 28, 1997, was timely because Carolyn did not discover and should not have discovered Lacosta’s negligent acts until 1995, which delay tolled the statute of limitations because of (1) the existence of a fiduciary relationship between Carolyn and Lacosta; (2) the complexity of the legal transaction; and (3) Lacosta’s concealment of her negligent acts. ¶19 First, we observe that a fiduciary relationship existed between Carolyn and Lacosta. In Shiplet v. First Sec. Bank of Livingston (1988), 234 Mont. 166, 174, 762 P.2d 242, 247, overruled on other grounds by Sacco v. High Country Indep. Press (1995), 271 Mont. 209, 896 P.2d 411, appellants cited 37 Am. Jur. 2d Fraud and Deceit § 409, for the rule that “[w]here a confidential relationship exists between the parties, failure to discover facts constituting [a claim] may be excused” and the statute of limitations may be tolled. Although Shiplet involved an action against a bank for fraud, we conclude that the rule propounded in that case is equally applicable to legal malpractice claims. The United States Supreme Court noted long ago:
There are few of the business relations of life involving a higher trust and confidence than that of attorney and client... and it is the duty of the court... to be watchful and industrious, to see that confidence thus reposed shall not be used to the detriment or prejudice of the rights of the party bestowing it.
Stockton v. Ford (1851), 52 U.S. 232, 247, 11 How. 232, 13 L.Ed. 676.
¶20 In the instant case, Carolyn did not discover Lacosta’s negligence until 1995. Carolyn trusted Lacosta to draft an estate plan according to Carolyn’s and Stanley’s wishes. In fact, when Carolyn asked Lacosta whether the Trust was revocable as they had requested, Lacosta assured her that it was. Lacosta even advised Carolyn’s insurance and financial advisor that the Trust was revocable.
¶21 As the Estate argues in its brief on appeal, Carolyn’s mistake was in relying upon her attorney. However, that is not a mistake for which she should be punished. Carolyn was entitled to trust her attorney as her fiduciary. To hold otherwise would ignore the nature of the fiduciary relationship between attorney and client.
¶22 Second, Carolyn’s failure to discover Lacosta’s negligence may be excused because of the complexity of the legal transaction involved. In Young v. Datsopoulos (1991), 249 Mont. 466, 817 P.2d 225, we held that if a legal transaction is beyond the understanding of a layperson and the “date of discovery” is disputed, summary judgment is not appropriate. In Young, the decedent’s family hired defendants to probate decedent’s estate. The family claimed that defendants committed legal malpractice by misadvising the family concerning removal of a co-personal representative; the possible defense of lack of consideration to a claim against the estate on several promissory notes; and abandonment of several potential lawsuits. Young, 249 Mont. at 469, 817 P.2d at 227. We reversed the trial court’s grant of summary judgment reasoning that the legal transactions constituting the alleged malpractice were beyond the understanding of a layperson, therefore, when the facts should have been knowable was a question of fact precluding summary judgment. Young, 249 Mont. at 473, 817 P.2d at 229.
¶23 Here, the estate plan created by Lacosta created wills with pour-over provisions and several trusts. The complexity of this estate plan made it difficult even for experts to understand. Attorney Don Lee failed to understand the ramifications of the estate plan and had to call Lacosta for advice. Although attorney Neil McKay was ultimately able to comprehend the estate plan, he testified in his deposition that he spent numerous hours attempting to unravel and understand the plan. John Hagman, an insurance and financial advisor with substantial experience in estate planning, could not determine whether the Trust was an irrevocable QTIP trust. Given the inability of these professionals to understand the Estate plan, we conclude that the plan was clearly beyond Carolyn’s understanding.
¶24 Third, Carolyn’s failure to discover Lacosta’s negligence may be excused if Lacosta concealed her mistakes. This Court has held that
[t]he three-year statute of limitations for legal malpractice actions contains a built-in tolling mechanism for a defendant’s fraudulent concealment of a plaintiffs injury. That is, a statute of limitations does not begin to run until the plaintiff discovers, or with reasonable diligence should have discovered, the act, error, or omission.
Joyce v. Garnaas, 1999 MT 170, ¶ 15, 295 Mont. 198, ¶ 15, 983 P.2d 369, ¶ 15. Thus, in the context of legal malpractice, a nexus exists between a defendant’s fraudulent concealment and the question of whether a plaintiff should have discovered the defendant’s negligent act.
¶25 Although we have not yet ruled upon this issue, other courts have held that “mere failure to reveal information can be fraudulent concealment by a person, such as a fiduciary, who has a duty to disclose.” Geo. Knight & Co. v. Watson Wyatt & Co. (1st Cir. 1999), 170 F.3d 210, 215 (citation omitted). Thus, “if a trust or confidential relationship exists between the parties, which imposes a duty to disclose, mere silence, by the one under that duty constitutes fraudulent concealment and thus tolls the applicable statute of limitations.” Greene v. Morgan, Theeler, Cogley & Petersen (S.D. 1998), 575 N.W.2d 457, 462 (citations omitted).
¶26 This rule recognizes that a client’s failure to discover an attorney’s malpractice often results from “a second breach of duty by the fiduciary, namely, a failure to disclose material facts to his client.” Neel v. Magana, Olney, Levy, Cathcart & Gelfand (Cal. 1971), 491 P.2d 421, 429. As the California Supreme Court noted in Neel, tolling the statute of limitations when the attorney remains silent “vindicates the fiduciary duty of full disclosure; it prevents the fiduciary from obtaining immunity for an initial breach of duty by a subsequent breach of the obligation of disclosure.” Neel, 491 P.2d at 429.
¶27 In the instant case, Carolyn may have been damaged by two distinct acts of malpractice. First, if Lacosta failed to draft the estate plan according to Carolyn’s and Stanley’s wishes. And second, if Lacosta improperly executed Stanley’s 1992 will and failed to inform Carolyn of that fact. Consequently, if Lacosta committed the underlying acts of malpractice, and if in each instance, she actively concealed her malpractice, then that should not inure to her benefit. Nevertheless, these are exactly the type of factual questions appropriate for resolution by a trier of fact. See Young, 249 Mont. at 473, 817 P.2d at 229.
Accrual Rule
¶28 Section 27-2-102, MCA, provides in pertinent part:
When action commenced. (1) For the purposes of statutes relating to the time within which an action must be commenced:
(a) a claim or cause of action accrues when all elements of the claim or cause exist or have occurred, the right to maintain an action on the claim or cause is complete, and a court or other agency is authorized to accept jurisdiction of the action;
(2) Unless otherwise provided by statute, the period of limitation begins when the claim or cause of action accrues. Lack of knowledge of the claim or cause of action, or of its accrual, by the party to whom it has accrued does not postpone the beginning of the period of limitation.
¶29 We have held that this “accrual rule” applies to legal malpractice actions and that the statute of limitations does not begin to run until all elements of a claim, including damages, have occurred. Uhler, 268 Mont. at 195-200, 885 P.2d at 1300-03. More specifically, we stated that
[i]n order to establish a cause of action for legal malpractice, there must be a showing that the attorney owed his client a duty of care, that there was a breach of this duty by a failure to use reasonable care and skill, and that the breach was the proximate cause of the client’s injury and resulted in damages.
Uhler, 268 Mont. at 196, 885 P.2d at 1300 (citing Merzlak v. Purcell (1992), 252 Mont. 527, 529, 830 P.2d 1278, 1279-80) (emphasis added). In Uhler, we overruled our prior decision in Boles v. Simonton (1990), 242 Mont. 394, 791 P.2d 755, wherein we determined that the statute of limitations precluded plaintiffs claims against their attorney even before they had sustained any actual damages as a result of the malpractice. Uhler, 268 Mont. at 199, 885 P.2d at 1302. We further stated in Uhler that it is inherently illogical and unfair to require a plaintiff to file an action prior to the accrual of the cause of action because if a plaintiff filed suit when no actual damages had been sustained, the suit would properly be dismissed. Uhler, 268 Mont. at 198, 885 P.2d at 1302. Moreover, the mere threat of future harm does not constitute actual damages. Uhler, 268 Mont. at 198-99, 885 P.2d at 1301-02.
¶30 In the instant case, the Trust was misleadingly titled “The Stanley L. and Carolyn M. Watkins Revocable Trust Agreement.” Despite the title, the Trust became irrevocable upon the death of the first spouse. Thus, while the Trust became irrevocable upon Stanley’s death in April 1992, Carolyn, relying upon Lacosta’s advice, continued to transfer the Trust assets as if the Trust was revocable. Consequently, for several years following Stanley’s death, Carolyn sustained no actual damages and she continued to treat the Trust assets as her own. In addition, when the irrevocable nature of the Trust was discovered by attorney Neil McKay in mid-1995, he contacted Lacosta who advised that the Trust could be revised with the beneficiaries’ consent. Had this effort been successful, Carolyn would never have suffered the damages that formed the basis of the Beneficiary Suits. As it was, Carolyn did not sustain any actual damages until suit was brought to remove her as Trustee on May 30,1996. Hence, the present action, filed on December 28,1997, was well within the three-year statute of limitations set forth in § 27-2-206, MCA.
Res Judicata and Collateral Estoppel
¶31 Respondents also contend on appeal that this action is barred by the doctrines of res judicata and collateral estoppel. Both of these doctrines are based on a judicial policy favoring a definite end to litigation. Kullick v. Skyline Homeowners Ass’n, 2003 MT 137, ¶ 17, 316 Mont. 146, ¶ 17, 69 P.3d 225, ¶ 17 (citing Rausch v. Hogan, 2001 MT 123, ¶ 14, 305 Mont. 382, ¶ 14, 28 P.3d 460, ¶ 14). Res judicata bars a party from relitigating a matter that the party has already had an opportunity to litigate. Kullick, ¶ 17 (citing Olson v. Daughenbaugh, 2001 MT 284, ¶ 22, 307 Mont. 371, ¶ 22, 38 P.3d 154, ¶ 22). Collateral estoppel is a form of res judicata and bars the reopening of an issue that has been litigated and resolved in a prior suit. Kullick, ¶ 18 (citing Finstad v. W.R. Grace & Co., 2000 MT 228, ¶ 28, 301 Mont. 240, ¶ 28, 8 P.3d 778, ¶ 28).
¶32 The doctrine of res judicata applies if the following four elements have been satisfied: (1) the parties or their privies are the same; (2) the subject matter of the present and past actions is the same; (3) the issues are the same and relate to the same subject matter; and (4) the capacities of the persons are the same in reference to the subject matter and to the issues between them. Kullick, ¶ 17 (citing Hall v. Heckerman, 2000 MT 300, ¶ 13, 302 Mont. 345, ¶ 13, 15 P.3d 869, ¶ 13). Here, the Beneficiary Suits were not malpractice actions and Lacosta was not a party to those claims. Thus, res judicata is not applicable in this case.
¶33 The same is true as to the doctrine of collateral estoppel. Collateral estoppel only applies if the following three elements have been satisfied: (1) the identical issue raised was previously decided in a prior adjudication; (2) a final judgment on the merits was issued in the prior adjudication; and (3) the party against whom the plea is now asserted was a party or in privity with a party to the prior adjudication. Kullick, ¶ 18. This Court has recognized that parties who are drawn into litigation as a result of a professional’s malpractice have a right to bring a subsequent and separate suit against the professional. See Fadness v. Cody (1997), 287 Mont. 89, 951 P.2d 584 (sellers who were awarded damages against purchasers as a result of fraud in real estate action have a subsequent and separate action against real estate agent and closing agent for their breaches of duty). The reason behind allowing a subsequent and separate action is that the later action raises different issues.
Identity of issues is the most crucial element of collateral estoppel. In order to satisfy this element, the identical issue or “precise question” must have been litigated in the prior action.
... The fact that each action arises from the same transaction does not mean that each involve the same issues.
Fadness, 287 Mont. at 96-97, 951 P.2d at 588-89 (citations omitted). We noted in Fadness that “[t]he duties owed by [the professionals] to the [plaintiff] were not decided, nor even considered by the jury in the first case.” Fadness, 287 Mont. at 97, 951 P.2d at 589. Similarly, in the case sub judice, the duties owed by Lacosta to Carolyn and Stanley were not considered or decided in the prior Beneficiary Suits. See In the Matter of the Stanley L. and Carolyn M. Watkins Revocable Trust Agreement (Toole County Cause No. DV 96-016); In the Matter of the Estate of Stanley L. Watkins (Toole County Cause No. 92-DP-020).
Conclusion
¶34 We hold that because Carolyn did not discover Lacosta’s negligence until 1995, and because Carolyn did not sustain any actual damages until 1996, the present action, filed on December 28, 1997, was filed within the three-year statute of limitations for legal malpractice actions. In addition, we hold that the doctrines of res judicata and collateral estoppel are not applicable in this case because neither the parties nor the issues in this case are the same as in the Beneficiary Suits. Accordingly, we hold that the District Court erred in granting Respondents’ motion for summary judgment.
¶35 Reversed and remanded for further proceedings consistent with this Opinion.
CHIEF JUSTICE GRAY, JUSTICES COTTER, LEAPHART and REGNIER concur. | [
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JUSTICE RICE
delivered the Opinion of the Court.
¶1 Matthew Dean Eixenberger (Eixenberger) was charged with two felony counts of burglary in violation of § 45-6-204, MCA, in the Eleventh Judicial District, Flathead County. Eixenberger moved to suppress evidence gained from an investigative stop, but the District Court denied the motion. Eixenberger then entered an Alford plea to Count I of the information and reserved his right to appeal the District Court’s denial of his motion to suppress. Eixenberger now appeals, and we affirm in part and reverse in part.
¶2 We restate the issues on appeal as follows:
¶3 1. Did the District Court err in denying the defendant’s motion to suppress?
¶4 2. Did the District Court err in imposing the restitution condition portion of Eixenberger’s sentence?
FACTUAL AND PROCEDURAL BACKGROUND
¶5 Beginning in July 2000, several casinos were burglarized in the City of Kalispell and surrounding areas. All of the burglaries had similar characteristics. The glass front door of each casino had been broken with small round river rocks, creating an opening through which the burglar would then enter the casino. After entering the premises, the burglar would pry open the cash boxes of the keno machines with the flat tip of a pry tool, large screwdriver, or a tire iron, and exit with the cash. In almost every case, all of this was accomplished in under a minute.
¶6 Detective Greg Burns (Burns) of the Kalispell Police Department (KPD or department) was assigned to investigate the case. Burns had been an officer with the department for twenty-four years, and a detective with special investigative training for three to four years. While investigating the burglaries, Burns was contacted by Eixenberger’s former parole officer, Paul Berg (Berg). After learning of the casino burglaries, Berg decided to notify Burns that Eixenberger was in the area and had been previously convicted of two casino burglaries. Burns himself was familiar with Eixenberger because Eixenberger had been a suspect in another Kalispell burglary in 1997.
¶7 Burns investigated Eixenberger and discovered that Eixenberger had recently been issued two traffic tickets while driving a red Ford Thunderbird, which was registered to an Adrian Hertz (Hertz). In addition, he learned that Eixenberger and Hertz were good friends; that they had been involved in various thefts as youths; and that they were probably living together in Kalispell. After this initial investigation of Eixenberger, officers from the KPD began monitoring Eixenberger, along with seven or eight other suspects, during late night and early morning patrol surveillance.
¶8 Shortly after the KPD began monitoring Eixenberger, Patrolman Sean McRae (McRae), while patrolling the casinos early one morning, identified the Thunderbird and license plate from a list of potential suspect vehicles at about 2:00 a.m. and followed it until about 2:10 a.m. McRae ceased trailing the Thunderbird about two hundred yards from the Montana Grille. At 2:19 a.m., the Montana Grille Casino was burglarized. Due to the similarity between the Montana Grille burglary and other prior burglaries, and the fact that the Thunderbird was sighted in the vicinity shortly before the Montana Grille was burglarized, Eixenberger became a prime suspect.
¶9 The police increased their early morning patrols of the casinos and their surveillance of the Thunderbird and Eixenberger. The Thunderbird was spotted cruising the valley several times, with either Eixenberger or Hertz driving, between two and six o’clock in the morning, the time period in which the burglaries had occurred. Based on this evidence, Burns applied for a search warrant, which was issued by Judge Ortley, enabling a tracking device to be placed on the Thunderbird. However, at approximately 4:00 a.m. on September 14, 2000, before the device was installed, the Best Bet Casino was burglarized.
¶10 Burns was immediately awakened and notified of the Best Bet Casino burglary. He alerted the KPD and the Flathead County Sheriffs Department to patrol other casinos and to watch particularly for the Thunderbird. KPD Patrol Officer Jim Wardinsky (Wardinsky) was dispatched to the Hertz residence to ascertain whether Eixenberger or the Thunderbird were there. Wardinsky discovered that neither Eixenberger nor the Thunderbird were present at the Hertz residence. In addition, Flathead County Deputy Sheriff Art Nelson (Nelson) was dispatched to Los Caporales in Evergreen, which had suffered a similar break-in, to conduct surveillance.
¶ 11 Approximately an hour after the Best Bet Casino was burglarized, the Gold Bar Casino was burglarized. Wardinsky responded to the break-in and found that it was similar to the break-in at the Best Bet Casino, but that the interior door had not been breached and that no money had been taken. Meanwhile, as Nelson was patrolling the Evergreen area, he encountered the Thunderbird and stopped it. The stop occurred within minutes of the Gold Bar burglary and within a quarter-mile from the Gold Bar. Nelson testified that he stopped the Thunderbird because it was the precise car he was looking for at the request of the KPD. Nelson called in the stop and Burns was notified. When Burns arrived at the scene of the stop, he identified two people in the car. Eixenberger was the driver and an unknown person, who gave his name as Eric but was later determined to be Aaron Diaz, was in the passenger seat. Burns also observed, in the front passenger area of the car, six round river rocks and two screwdrivers. Burns further noted that Eixenberger’s clothing matched the clothing description which KPD Sergeant Brian Fulford (Fulford) had radioed to Bums after Fulford had viewed the surveillance tapes from the Best Bet Casino burglary earlier that night.
¶12 Eixenberger consented to a search of the vehicle and officers recovered a screwdriver with paint on it, glass fragments, and a tire iron. The officers arrested Eixenberger, and he was charged with two felony counts of burglary in violation of § 45-6-204, MCA. He was arraigned and pled not guilty to both counts. The State filed a notice of intent to seek persistent felony offender designation. Eixenberger filed a motion to suppress evidence from the stop, alleging that the stop was illegal. The District Court denied his motion. The State then filed a Just notice concerning Eixenberger’s previous crimes, to which Eixenberger objected by filing a motion in limine to exclude the evidence. The District Court granted his motion in limine. In March of 2002, Eixenberger entered an Alford plea to Count I of the information, reserving his right to appeal the District Court’s denial of his motion to suppress. The State dismissed Count II and withdrew the persistent felony offender notice. In May, the District Court sentenced Eixenberger to twenty years at Montana State Prison with eight years suspended, and ordered restitution in a sum to be determined. Eixenberger appeals from the denial of his motion to suppress.
STANDARD OF REVIEW
¶13 We will not “overturn a District Court’s findings of fact regarding suppression hearing evidence unless those findings are clearly erroneous.” State v. Hermes (1995), 273 Mont. 446, 449, 904 P.2d 587, 589. Findings of fact are clearly erroneous “if they are not supported by substantial evidence, the court has misapprehended the effect of the evidence, or our review of the record convinces us that a mistake has been committed.” State v. Lacasella, 2002 MT 326, ¶ 10, 313 Mont. 185, ¶ 10, 60 P.3d 975, ¶ 10.
DISCUSSION
ISSUE ONE
¶14 Did the District Court err in denying the defendant’s motion to suppress?
¶15 Although Eixenberger argues that the stop was unlawful because there was insufficient probable cause, his authorities and argument indicate he is actually asserting the lack of particularized suspicion for the investigative stop made by the officers. Eixenberger analogizes his situation with that in State v. Lafferty, 1998 MT 247, 291 Mont. 157, 967 P.2d 363, where an officer stopped the defendant based on an anonymous informant’s tip that the defendant was drunk but the officer did not observe any illegal driving or any indication of impairment to corroborate the informant’s tip before stopping the defendant. Lafferty, ¶ 4. Eixenberger maintains that the officer who stopped him needed to observe illegal driving or some indication of impairment before Eixenberger could be stopped. However, we disagree. Lafferty addressed the necessary police corroboration of an anonymous informant’s tip. Lafferty, ¶ 12. Here, the issue is whether the police had the requisite particularized suspicion from their own investigation to initiate an investigative stop of the Thunderbird Eixenberger was driving.
¶16 “[Warrantless searches are per se unreasonable, subject to a few carefully drawn exceptions. One of those exceptions is the investigatory stop.” State v. Tackitt, 2003 MT 81, ¶ 24, 315 Mont. 59, ¶ 24, 67 P.3d 295, ¶ 24 (citation omitted). Under § 46-5-401, MCA, “a peace officer may stop any person or vehicle that is observed in circumstances that create a particularized suspicion that the person or occupant of the vehicle has committed, is committing, or is about to commit an offense.” To determine whether an officer had the requisite “particularized suspicion,” we utilize a two-part test. Anderson v. State Dept. of Justice (1996), 275 Mont. 259, 263, 912 P.2d 212, 214; State v. Gopher (1981), 193 Mont. 189, 192, 631 P.2d 293, 295. There must have been “(1) objective data from which an experienced officer can make certain inferences; and (2) a resulting suspicion that the occupant of a certain vehicle is or has been engaged in wrongdoing.” State v. Fisher, 2002 MT 335, ¶ 12, 313 Mont. 274, ¶ 12, 60 P.3d 1004, ¶ 12 (citing Gopher, 193 Mont. at 194, 631 P.2d at 296). Whether particularized suspicion exists to justify an investigative stop is a question of fact which depends on the totality of the circumstances. State v. Reynolds (1995), 272 Mont. 46, 49, 899 P.2d 540, 542.
¶17 We have noted that “objective data may be based on ‘various objective observations, information from police reports, if such are available, and consideration of the modes or patterns of operation of certain kinds of lawbreakers.’ ” State v. Anderson (1993), 258 Mont. 510, 514, 853 P.2d 1245, 1248 (quoting United States v. Cortez (1981), 449 U.S. 411, 418, 101 S.Ct. 690, 695, 66 L.Ed.2d 621, 629). Though Eixenberger maintains that the only reason he was stopped was because of his previous burglary convictions, the record reveals other factors which led to the stop.
¶18 First, police conducted a background investigation of Eixenberger which prompted police to add him to a list of potential suspects. The background investigation revealed that Eixenberger had been issued two traffic citations while driving a red Ford Thunderbird, which was registered to Hertz; that Eixenberger and Hertz were good friends; that they had been involved in various thefts as youths; and that they were possibly living together in Kalispell.
¶19 Eixenberger become a primary suspect after the Montana Grille Casino was burglarized and the Thunderbird was seen about two hundred yards away from the Montana Grille some nine minutes before the burglary occurred. Subsequently, the Thunderbird was spotted several times, with either Eixenberger or Hertz driving, between two and six o’clock in the morning. During the early morning hours of September 14, 2000, following the burglary at the Best Bet Casino, police checked the Hertz residence, finding that neither Eixenberger nor the Thunderbird were there. About an hour later, the Gold Bar Casino was burglarized, and Eixenberger was stopped in the Thunderbird within minutes of that burglary and about a quarter-mile from the Gold Bar.
¶20 We conclude that sufficient objective data existed to support a police suspicion that Eixenberger was engaged in wrongdoing, or had engaged in wrongdoing, and that the investigative stop of Eixenberger’s vehicle was appropriate. Therefore, the District Court did not err in denying Eixenberger’s motion to suppress.
ISSUE TWO
¶21 Did the District Court err in imposing the restitution condition of the sentence?
¶22 [3] Eixenberger challenges the amount the District Court awarded in restitution. The District Court held that Eixenberger “must pay restitution in a sum to be detei'mined, with interest accruing at the legal rate of 10% per annum, for losses and damages sustained by Best Bet Casino ... and Gold Bar Casino ...” (Underlining in original.) The State concedes that the District Court did not follow the statutory guidelines for imposing restitution. Section 46-18-244(1), MCA, reads that “[t]he court shall specify the total amount of restitution that the offender shall pay.” The District Court did not specify the total amount of restitution, instead it held that Eixenberger would pay restitution “in a sum to be determined.” We have held that district courts must comply with § 46-18-244, MCA, and, here, the District Court did not comply. See State v. Flanagan, 2003 MT 123, ¶ 35, 316 Mont. 1, ¶ 35, 68 P.3d 796, ¶ 35. State v. Pritchett, 2000 MT 261, 302 Mont. 1, 11 P.3d 539; State v. Brown (1994), 263 Mont. 223, 867 P.2d 1098. Further, the State also notes that the presentence investigation report failed to document the victim’s pecuniary loss and Eixenberger’s financial resources and ability to pay, as required by § 46-18-242, MCA (1999). Therefore, we reverse and remand this matter for further sentencing proceedings consistent herewith.
¶23 Affirmed in part, reversed in part and remanded.
CHIEF JUSTICE GRAY, JUSTICES REGNIER, WARNER and COTTER concur. | [
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MR. JUSTICE HARRISON,
delivered the opinion of the Court.
In August 1974 petitioner was convicted of robbery on a plea of guilty. In July 1979 petitioner instituted an original proceeding in this Court for post-conviction relief, seeking leave to withdraw his plea of guilty. This Court remanded the matter to the District Court with directions to conduct a hearing and to determine the merits of the petition. The District Court, after hearing, denied the request for leave to withdraw the plea, and petitioner appeals.
On July 2, 1974, a Kwik Way store in Billings, Montana, was robbed. Petitioner was arrested the following morning. On July 15, 1974, petitioner appeared with appointed counsel and entered a plea of not guilty before the District Court. On July 31, 1974, petitioner appeared before the District Court and moved to change his plea to guilty. At that time petitioner was not advised by the District Court of the nature of the charge, the rights waived by a plea of guilty, or potential punishment. Defense counsel did, however, tell the court that he had advised petitioner of the possible maximum penalty of forty years in prison. The court accepted the plea and set sentencing before another district judge for August 14, 1974, which was later continued to August 26.
In the time between arraignment and sentencing, the sentencing judge, the Honorable Charles Luedke, became aware of a letter written by petitioner to the county attorney in which petitioner asserted his innocence. Judge Luedke, therefore, engaged petitioner in an extended discussion of the nature of the charge, the consequences of his plea, and his reasons for pleading guilty. Petitioner admitted being in the car with the robbers and sharing the proceeds with them. He also admitted that he had prior knowledge that the robbery would take place. The judge advised petitioner that his plea constituted a waiver of several constitutional rights, such as the right to trial by jury, right to confront and cross-examine witnesses, and the right to remain silent. The judge informed petitioner that the plea would probably result in a sentence of confinement in the state prison. Judge Luedke on two occasions offered petitioner further time to consider his plea, which petitioner refused. Finally, the judge advised petitioner that he had the right to a jury trial and that a jury might find him not guilty on the facts before the court. Petitioner nonetheless refused to withdraw his guilty plea.
The sole issue before this Court is whether the trial court committed error in denying petitioner’s post-conviction request to withdraw his plea of guilty.
In State v. Haynie (1980), 186 Mont. 374, 607 P.2d 1128, 1131, this Court held:
“A change of plea will be permitted only if it fairly appears the defendant was ignorant of his rights and the consequences of his act, or he was unduly and improperly influenced either by hope or by fear in making the plea, or if it appears the plea was entered under some mistake or misapprehension. State v. McAllister (1934), 96 Mont. 348, 353, 30 P.2d 821, 823.”
This has been the long-standing rule in Montana. In applying it to the case before us, we find that the decision of the District Court must be sustained.
Judge Luedke provided petitioner every opportunity to consider his action, the consequences of the plea and the rights he could exercise. Looking to the record, we find that the District Court was very careful and explicit in its discussions with petitioner:
“JUDGE LUEDKE: Well, Mr. Cunningham, are you satisfied in your own mind that your participation in this whole transaction was sufficient that you are actually guilty, that you did take part in the robbery by aiding and by abetting or by actively participating, any of them?”
Further, the judge gave an extensive explanation, to petitioner regarding his right to a jury trial, his right to remain silent, the right to cross-examine and the right to confront the witnesses and evidence against him.
We are also persuaded by the fact that petitioner was assisted by legal counsel at every point in the criminal procedure. Although petitioner bases his appeal in part on the assertion that his plea was the product of a fundamental mistake in his legal understanding, Judge Luedke made a special effort to guarantee that petitioner was aware of the consequences of his plea and the fundamental principles of law involved. In its memorandum accompanying the order denying the motion to withdraw the plea, the District Court stated:
“Assuming that the charge against the attorney is more than adumbration, it is apparent from the record that the defendant’s claim was the very concern the court had at the time of sentencing; and is the reason why defendant was queried in the context of ‘aiding and abetting’; and why it was suggested that a jury could possibly find him not guilty; and why he was offered on more than one occasion further time to discuss and consider the matter. It was the conclusion of the court at that time that the defendant knew what he was doing and wanted to do it. The new hearing has produced the same factual picture as was before the court on August 26, 1974.”
The record reveals that petitioner was accorded every consideration but declined to reconsider his action.
Sitting without a jury, the trial judge, as finder of fact, is as fully entitled to believe or disbelieve a defendant’s assertions as a jury would be. State v. Hilton (1979), 183 Mont. 13, 597 P.2d 1171, 1174. In light of petitioner’s continual insistence on a guilty plea and the evidence against him, we find a completely adequate basis for the District Court’s factual conclusions. From petitioner’s own testimony there is sufficient admission to warrant the court’s decision: “The only reason I have for participating in this crime is I needed money to get to Texas.”
Our view of the applicable law in this case is supported by several of our recent decisions. In re Brown (1980), 185 Mont. 200, 605 P.2d 185; State v. Haynie, supra; State v. Doty (1977), 173 Mont. 233, 566 P.2d 1388; and State v. Griffin (1975), 167 Mont. 11, 535 P.2d 498. The importance of these decisions, as they apply to the case at bar, is that it is the sole province of the trial court to determine whether a motion to withdraw a guilty plea should be granted. The abuse of discretion required to reverse the lower court is not present in this case.
Affirmed.
MR. CHIEF JUSTICE HASWELL, and JUSTICES DALY, SHEA and SHEEHY, concur. | [
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JOSEPH B. GARY, District Judge, sitting in place of MR. JUSTICE DALY,
delivered the opinion of the Court.
Claimant, who had had trouble with a knee since 1941, injured his knee on two separate occasions in 1978 while working for Structural Systems, Inc. The first injury occurred on April 4, 1978, when the claimant slipped on a roof of the Craighead Apartments at the University of Montana in Missoula, Montana. At that time, Structural Systems was insured for workers’ compensation purposes by U.S.F.&G. Claimant’s second injury occurred on June 6, 1978, when claimant was carrying iron bars while working on the Reserve Street Bridge in Missoula. At the time of the second accident, Industrial Indemnity Co. was Structural Systems’ insurer for workers’ compensation purposes.
Both injuries were inflicted upon claimant’s right knee. Claimant did not consult a doctor after the first accident and was able to continue working although he continued to experience severe difficulties and pain with the knee. Claimant also continued to work for a month after the second accident until he was laid off. At that time, he sought medical attention. It was determined that claimant was temporarily totally disabled pending a final determination by the Workers’ Compensation Court.
Claimant filed a petition in the Workers’ Compensation Court on November 15, 1978, against U.S.F&G. and Industrial Indemnity. A pretrial conference was held, and a full hearing began on April 10, 1979. The court entered an interim order on April 23, 1979, in which U.S.F.&G. and Industrial Indemnity were ordered to reimburse claimant for all accrued temporary total disability benefits and medical.expenses on an equal share basis. On September 28, 1979, the court entered its findings of fact and conclusions of law holding that U.S.F.&G. was to reimburse Industrial Indemnity for any and all benefits that had been paid pursuant to the court’s interim order. The court held that claimant’s benefits stemmed primarily from one injury which occurred on April 4, 1978, and which was reinjured and aggravated on June 6, 1978. Since the second injury was merely an aggravation of a preexisting condition, the court took the position that U.S.F.&G. was liable for claimant’s benefits because, according to Montana law, it was improper to apportion the liability for workers’ compensation benefits between successive insurers.
From this judgment, U.S.F.&G. appeals and raises the following issue:
Whether the claimant suffered an aggravation of a preexisting condition on June 6, 1978; if so, whether the insurer on the risk at the time of the last injurious exposure is liable for the resulting disability?
U.S.F.&G. submits that there is no dispute by the parties that claimant did in fact suffer an aggravation of a preexisting condition on June 6, 1978. It further submits that claimant had a history of knee trouble and that the April 4, 1978, accident was also an aggravation of a preexisting injury which would have entitled him to benefits had he incurred medical expenses or lost wages. It contends, however, that on June 6 claimant suffered a new and com pensable industrial accident and that since this was the disabling injury causing him to seek medical attention, Industrial Indemnity Co. is solely responsible for compensating claimant.
U.S.F.&G. premises its argument on the well-established doctrine in Montana that an employer takes an employee as he finds him. It contends that the Workers’ Compensation Court’s ruling was contrary to the above doctrine and that the “last injurious exposure” rule should operate here, placing the responsibility for claimant’s compensation on Industrial Indemnity.
Industrial Indemnity argues that under Hartl v. Big Sky of Montana, Inc. (1978), 176 Mont. 540, 579 P.2d 1239, 35 St.Rep. 806, it is improper to apportion workers’ compensation benefits between successive insurers. It submits that the workers’ compensation court correctly followed the dictates of Hartl in holding U.S.F.&G. liable for compensating claimant. Industrial Indemnity also cites Newman v. Kamp (1962), 140 Mont. 487, 374 P.2d 100, for the proposition that where a second injury occurs before the first injury is healed, the first carrier is liable for all compensation, and the second carrier is relieved of liability. It contends that in the instant case there is a plethora of medical and lay testimony indicating that the injury resulting from claimant’s first accident had not completely healed at the time of the second accident. Therefore, Industrial Indemnity contends that both Hartl and Newman provide ample authority for holding U.S.F.&G. liable for claimant’s compensation.
Claimant in this case basically agrees with the Workers’ Compensation Court’s decision holding U.S.F.&G. liable for his compensation.
First of all, in examining the contentions by the parties to this appeal, it should be pointed out that this Court has consistently held the test of sufficiency of the evidence to be whether there is substantial evidence to support the court’s findings of fact. See Stamatis v. Bechtel Power Co. (1979), 184 Mont. 64, 601 P.2d 403; Head v. Larson (1979), 181 Mont. 129, 592 P.2d 507; Strandberg v. Reber Company (1978), 179 Mont. 173, 587 P.2d 18; Jensen v. Zook Brothers Construction Company (1978), 178 Mont. 59, 582 P.2d 1191. In Stamatis and Jensen, this Court further held that where the findings are based on conflicting evidence, this Court’s function on review is confined to determining whether there is substantial evidence to support the findings and not to determine whether there is sufficient evidence to support contrary findings.
With that as the basic premise, we will then examine the facts and the law applicable thereto.
It is undisputed in Montana that an employer takes his employee subject to the employee’s physical condition at the time of employment. It is also undisputed that an aggravation of a preexisting condition is a compensable injury under the Workers’ Compensation Act. Robins v. Anaconda Aluminum Co. (1978), 175 Mont. 514, 575 P.2d 67, 35 St.Rep. 213; Schumacher v. Empire Steel Mfg. Co. (1977), 175 Mont. 411, 574 P.2d 987, 34 St.Rep. 1112.
Where there have been two accidents, each occurring under a different insurer, and the second happens before the first injury is completely healed, the second accident is incident to the first and the first insurer is required to pay all compensation. Newman v. Kamp, supra. This is so because in Montana there is no apportionment of workers’ compensation benefits between successive insurers. Hartl v. Big Sky of Montana, Inc., supra.
There is no question that claimant here suffered a compensable industrial injury. The main factual issue before the Workers’ Compensation Court was which carrier was responsible for compensating claimant. Resolution of this issue rests on a determination of whether the second injury was separate and distinct or merely an aggravation of a preexisting condition. In essence, then resolution of liability is dependent on a determination of which particular injury was the proximate cause of the present condition for which claimant seeks compensation.
The Workers’ Compensation Court, in effect, held that the second injury, since it occurred before the first had completely healed, was merely an aggravation of a preexisting condition and, therefore, the first injury was the proximate cause of claimant’s disability. U.S.F.&G. contends that this determination is not supported by the record and that the second injury was separate and distinct from the first. U.S.F.&G. bases its argument on the fact that claimant continued to work after the first accident and did not seek medical help; however, it argues, he did see a doctor and quit working after the second accident. It contends that under our holding in Hartl, Industrial Indemnity should be liable. This is not, however, a completely accurate statement of the facts of either this case or of Hartl.
The testimony of Dr. C.G. Cragg, an orthopedic surgeon, indicated that claimant had had knee problems since 1941. Both accidents, in his opinion, were aggravations of that preexisting condition. He also testified that at the time of the June 6 accident, claimant had not recovered from the April 4 accident.
The record showed that claimant was somewhat stoical and had a high tolerance for pain. It also showed that claimant at times had continued to work even though he was in pain. In fact, claimant continued working after the June 6 accident until he was laid off. He apparently sought medical help then because the pain had become too much and because he was afraid of doing steelwork above the ground for fear of his knee collapsing.
In Hartl, the claimant also suffered from a preexisting condition. The physician there testified that all of the claimant’s back injuries contributed to his present condition, and it was impossible to separate the accidents as to the cause of claimant’s disability. The physician in Hartl, unlike Dr. Cragg here, testified that claimant’s most recent injury was a separate and distinct one and his present impairment was greater as a result of it. As pointed out above, Dr. Cragg testified that the June 6 injury here was not a separate and distinct injury but merely an aggravation of the preexisting one.
In cases like this, it is incumbent on the insurer seeking to be relieved from liability to establish by a preponderance of the evidence that the claimant’s present condition was caused by an accident occurring when the other insurer was on risk. Newman v. Kamp, supra, 374 P.2d at 104. A review of the record indicates that U.S.F.&G. has failed to do this and that there is substantial evidence to support the decision of the Workers’ Compensation Court.
U.S.F.&G. contends we should apply the “last injurious exposure” rule, as stated in 4 Larson, The Law of Workmen’s Compensation § 95.12 at 17-71. This Court has, however, previously held this rule to be inapplicable in Montana because we are committed to the doctrine that the particular injury must be the proximate cause of the present condition for which the claimant seeks compensation. Newman, 374 P.2d at 104.
There is sufficient evidence in the record to support the finding of the Workers’ Compensation Court. Its decision is therefore affirmed.
One further matter merits discussion. This appeal essentially involves only a question of liability between the two insurers, with both U.S.F.&G. and Industrial Indemnity agreeing that claimant had suffered a compensable injury. Claimant’s attorney, however, filed a brief and made an appearance at oral argument. He now requests attorney fees and costs for that appearance. In a case such as this, where the claimant is assured of compensation, it is unnecessary for him to make an appearance other than the filing of a short brief stating his position and that he will not appear. As the appearance was unnecessary, claimant’s request for attorney fees and costs on appeal is denied.
Affirmed.
MR. CHIEF JUSTICE HASWELL and JUSTICES HARRISON, SHEEHY and SHEA concur. | [
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MR. JUSTICE SHEEHY
delivered the opinion of the Court.
This is an action involving the conflicting mining claims of Morton K. Whittaker and the Anaconda Company. Whittaker appeals from a judgment entered in the District Court, Sixth Judicial District, Sweet Grass County, in favor of Anaconda. Under the judgment, Anaconda is entitled to the possession and enjoyment of the area covered by its Eve 62 and Eve 69 mining claims which conflict with Whittaker’s Pine mining claim. Whittaker also appeals from a denial of his motion for a judgment notwithstanding the verdict.
Whittaker located the Pine claim on October 1, 1950. Anaconda, on the other hand, is a successor in interest to the Eve 62 and Eve 69 claims which were located on June 10, 1968, by R. Davidson Piper. Piper was employed by Anaconda to supervise engineering crews in locating and staking approximately 79 mining claims generally known as the Eve group claims. These claims were located in an area about four to five miles in length beginning on the Boulder River and moving up the slope of Chrome Mountain. Piper signed the certificates of location for Eve 62 and Eve 69 verifying he was the locator of the two mining claims and had complied with the legal requirements for locating and recording mining claims. Section 50-701, etseq., R.C.M.1947. Piper’s certificates were based upon information provided to him by the engineers and geologists of Anaconda. Under an agreement with Anaconda, Piper was to transfer to Anaconda any mining claim Piper located in Montana.
In June 1976, Whittaker applied to the Bureau of Land Management for a patent to the Pine claim. Anaconda filed an adverse claim with that agency and brought this cause to determine its right of possession to the area covered by its Eve 62 and Eve 69 mining claims.
The jury trial of this cause began on February 26, 1979. Following Anaconda’s case-in-chief, Whittaker moved for a directed verdict on the grounds that Anaconda had failed to establish a valid mining location for Eve 62 and Eve 69 and therefore, lacked standing to challenge Whittaker’s patent application. The motion was taken under advisement, and Whittaker was required to present evidence regarding the validity of the Pine claim.
The cause was submitted to the jury on special interrogatories, and the jury returned a verdict in favor of Anaconda. Under the verdict, the jury found Whittaker had not abandoned the Pine claim but had subjected the claim to forfeiture. The jury further found that Whittaker had in fact forfeited the Pine claim when Anaconda validly located the Eve 62 and Eve 69 claims in 1968. Accordingly, judgment was entered in favor of Anaconda.
Whittaker moved for a judgment notwithstanding the verdict, alleging the same grounds as were alleged for his motion for a directed verdict. The District Court did not rule on the motion, resulting in the motion being deemed denied. Rules 50(b) and 60(d), M.R.Civ.P. Whittaker now appeals.
The sole issue upon appeal is whether sufficient evidence supports the jury’s verdict that Anaconda validly located the Eve 62 and Eve 69 mining claims. Having carefully examined the briefs of the parties and the record in this cause, we hold there is insufficient evidence to support the jury verdict.
At the outset, we note that the validity of mining locations must be judged by the law in effect at the time of the attempted location. Therefore, we judge the validity of Anaconda’s attempts to locate its Eve 62 and Eve 69 mining claims under section 50-701, R.C.M.1947, as it existed prior to the 1971 amendments.
Our function in reviewing the issue presented is to determine whether substantial credible evidence in the record supports the jury’s verdict. We must view the evidence in light most favorable to Anaconda, the prevailing party below, and where the record presents conflicting evidence, resolved by the jury, this Court is precluded from disturbing the verdict. Strong v. Williams (1969), 154 Mont. 65, 68-69, 460 P.2d 90, 92. Here, however, there is insufficient evidence to support the jury’s findings that Anaconda validly (1) discovered a vein, lode, or ledge of rock in place bearing valuable mineral deposits or (2) posted a notice of location at the point of discovery. Accordingly, the judgment entered by the District Court must be reversed. Section 50-701, R.C.M.1947.
An attempted location of a mining claim fails unless there is substantial compliance with the statutory requirements. Ferris v. McNally (1912), 45 Mont. 20, 25, 121 P. 889, 892. Moreover, the acts required by the statute are independent of each other, and all must be performed before a valid location exists. The last act to be performed does not relate back to the first act performed, Thornton v. Kaufman (1910), 40 Mont. 282, 286, 106 P. 361, 362.
The actual discovery of a vein, lode, or ledge of rock in place bearing a valuable mineral deposit is a condition precedent to a grant from the government to the exclusive possession and enjoyment of the ground located. Upton v. Larkin (1885), 5 Mont. 600, 603, 6 P. 66, 68. There is insufficient evidence in the record to support a finding that such an actual discovery was made on the Eve 62 and Eve 69 claims. Richard N. Miller, Anaconda’s project geologist for the Stillwater complex, testified that in his opinion the legal requirements for a valid discovery had been met. However, on cross-examination, Miller admitted that no one, to his knowledge, had actually found minerals in place on the Eve 62 and Eve 69 claims. The testimony of the other Anaconda witnesses was to the same effect.
According to Anaconda, the type of discovery necessary in a controversy between rival locators has been treated much more liberally than that required in a controversy involving the federal government, and therefore, an attempted discovery based on geological studies for potential mineralization is valid. The liberality, however, which exists in a contest between rival claimants is in the consideration and application of the evidence admitted at trial and does not involve a liberal construction of the statutory requirements. 1 American Law Of Mining, § 4.46, at 650-51.
There also is not sufficient evidence in the record to support the jury’s finding that Anaconda posted a notice of location at the point of discovery on the Eve 62 and Eve 69 claims. Butte Northern Copper Co. v. Radmilovich (1909), 39 Mont. 157, 163, 101 P. 1078, 1080. Granted, it may often times be impossible to post notice squarely on the point of discovery. Yet, the record here shows that notice was not posted near any discovery point. Dean E. Yongue, the surveyor who staked out the Eve group claims, testified regarding the method used to stake out those claims. According to Yongue, a U.S. geological map was used to stake out the corners of each claim, and once this was accomplished, previously prepared notices of location were then posted in the center of each claim, generally 50 feet from one end line and 300 feet from the corners. Yongue testified further that he never saw any mineralization at the point where the notice of location was posted. The testimony of Anaconda’s other witnesses was to the same effect.
Having found no evidence whatsoever in the record to support the jury’s findings that Anaconda validly (1) discovered a vein, lode or ledge of rock in place bearing a valuable mineral deposit or (2) posted a notice of location at or near the point of discovery, the judgment of the District Court is reversed. The cause is remanded to the District Court with directions to vacate the judgment entered in favor of Anaconda.
MR. CHIEF JUSTICE HASWELL and JUSTICES DALY, SHEA and HARRISON, concur. | [
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MR. JUSTICE DALY
delivered the opinion of the court.
This is an appeal from a judgment of the District Court of the Eighteenth Judicial District, Gallatin County, the Honorable W. W. Lessley presiding. Plaintiffs Hillstrom brought this action for a breach of contract against defendant Villano and for an interference with the contract against defendants Gosnay. Plaintiffs sought specific performance of their contract or, in the alternative, actual damages, and for punitive damages. The District Court, sitting without a jury, found that plaintiffs had a valid and enforceable contract with defendant Villano for the purchase of real property and that defendant Villano breached the contract. The court further found that defendants Gosnay did not interfere with the contract. The court ordered that defendant Villano specifically perform the contract with the plaintiffs but denied plaintiffs’ request for punitive damages. Defendants bring this appeal.
The real property which is the subject matter of this action is a ten-acre tract of land located in Gallatin County, Montana, hereinafter referred to as “Tract B.” Defendant-appellant Dr. Jeremi Villano is a medical doctor whose employment duties at the time of this controversy required her to frequently be away from her home in Bozeman, Montana, for one and two week periods. Villano is the owner and seller of Tract B in this action. Her realtor is Joyce Strahn.
From August 1977 to August 1978, no offers were received for the purchase of Tract B although the property had been advertised for sale. On July 31, 1978, Maurice and Pamela Gosnay, residents of Liberty, Missouri, who own a vacation home in the Gallatin Canyon near Bozeman, signed an option to purchase Tract A, a ten-acre parcel adjoining Tract B. LeRoy Spain agreed to represent the Gosnays in obtaining Tract B also. Spain later telephoned Strahn and informed her that he had a party interested in Tract B and asked Strahn what the commission was and whether or not it would be split with him. Strahn informed Spain that the commission was 8 percent and that it was their policy to split the commission with the buyer’s broker.
After several rejected offers, Spain telephoned Strahn on August 25, 1978, and informed her that his clients (the Gosnays) were willing to pay $54,500 for Tract B. Villano agreed to accept $54,500 but stated that she would rather have $55,000. Because Villano was leaving town the next day to go to Sundance, Wyoming, and because Strahn wanted something in writing, Strahn prepared two earnest money receipts, one with a sales price of $54,000 and the other with a sales price of $55,000. Villano signed both earnest money agreements in Strahn’s office on August 26, 1978, before leaving for Wyoming. Strahn conveyed both offers over the telephone to Spain.
The next day, August 27, 1978, Patricia L. Hillstrom telephoned Strahn and informed her that she and her husband, who reside in Minneapolis, Minnesota, were interested in purchasing Tract B. Mrs. Hillstrom stated that her husband, Robert A. Hillstrom, was a lawyer and real estate broker and that he would call Strahn concerning Tract B.
Strahn telephoned Villano in Wyoming and informed her Hillstrom was coming into her office to discuss the purchase of Tract B. During this conversation, Strahn also informed Villano that the Gosnays would purchase Tract B for $54,500. Strahn advised Villano she could withdraw her written offer to sell to the Gosnays because no earnest money had been recieved and the writ ten offers had not been picked up or signed by them. After being advised of this, Villano agreed to withdraw her offer to the Gosnays to see what the Hillstroms would offer. Strahn telephoned Spain and informed him that Villano had withdrawn her offer to sell Tract B to the Gosnays.
The Hillstroms met with Strahn in her office on August 28, 1978. They offered $55,000 for the property. Thereafter, Mr. Hillstrom approached Strahn concerning Strahn’s splitting the real estate commission with him. It was decided to reduce the sales price by one-half of the commission and reduce the stated commission to 4 percent.
After discussing the offer with Villano Strahn dictated the wording of a telegram that Villano was to use in accepting the Hillstroms’ offer, the language of the acceptance having been suggested by Mr. Hillstrom. Strahn told Villano to go to the telegraph office and sign this telegram. Villano informed Strahn there was no telegraph office in Sundance, Wyoming, and Strahn told Villano to send the telegram anyway. Villano telephoned Western Union and dictated the telegram as she was instructed to do. The telegram was sent to Landmark Real Estate, attention Joyce Strahn. It stated:
“PLEASE CONSIDER THIS AS MY WRITTEN ACCEPTANCE OF THAT OFFER MADE ON MY REAL ESTATE IN THE GALLATIN CANYON AS PRESENTED TO LANDMARK REALTY BY ROBERT A. AND PATRICIA L. HILLSTROM ON AUGUST 28, 1978. “JEREMI VILLANO MD”
In a complaint dated September 13, 1978, the Gosnays sued Dr. Villano and Landmark Real Estate (Joyce Strahn) in an effort to establish some rights to the land. Following negotiations conducted through their respective attorneys, Villano and the Gosnays reached an agreement for the sale of Tract B by Villano to the Gosnays in a contract dated October 20, 1978. Under this contract, Villano agreed to sell the property to the Gosnays for the price of $54,500. Villano was not required to pay any real estate commissions out of this price and the Gosnays agreed to hold Villano harmless and indemnify her for all expenses incurred defending any litigation commenced by the Hillstroms.
Villano gave the Hillstroms notice of rescission in letters dated October 18 and October 20, 1978, on the grounds that her consent was obtained by mistake and fraud in that she believed the sales price to be $55,000 and had not consented or been told that her real estate agent would split the commission and reduce the purchase price to $52,800. On November 29, 1978, the Hillstroms filed this action against Villano and the Gosnays.
There is but one issue for review by this Court:
Whether the typewritten name “JEREMI VILLANO MD” at the bottom of a telegram is a sufficient subscription to satisfy the requirements of the statute of frauds?
Appellants argue that there are two basic requirements of the statute of frauds, section 28-2-903(l)(d), MCA. Appellants concede that the first requirement, that there be some note or memorandum of the agreement in writing, has been satisfied. The second requirement, that the writing be subscribed by the party to be charged or by his agent, allegedly has not been satisfied in this case. It is argued that the typewritten name “JEREMI VILLANO MD” at the bottom of the telegram is not a sufficient subscription under the statute of frauds, which appellants claim requires an actual signing with one’s own hand. In addition, the statute requires that if an agreement is made by an agent of the party to be charged, the agent’s authority must be in writing and subscribed by the party to be charged. Since the telegraph company, as an agent, was not authorized in a subscribed writing to make the agreement by “signing” Villano’s typewritten name, appellants contend that the statute was not satisfied. Therefore, the Hillstrom-Villano agreement is invalid and void. Secondly, appellants argue that Villano did not have the requisite intent to authenticate the typewritten name “JEREMI VILLANO MD” at the bottom of the telegram as her signature.
The Montana statute of frauds provides: “What contracts must be in writing. (1) The following agreements are invalid unless the same or some note or memorandum thereof is in writing and subscribed by the party to be charged or his agent:
“(d) An agreement for the leasing for a longer period than 1 year or for the sale of real property or of an interest therein. Such agreement, if made by an agent of the party sought to be charged, is invalid unless the authority of the agent is in writing and subscribed by the party sought to be charged.” Section 28-2-903-(l)(d), MCA.
Appellants concede that the first requirement of the statute, that there be some note or memorandum of the agreement in writing, has been satisfied by the telegram and the “Earnest Money Receipt and Agreement to Sell and Purchase” with attached documents. A telegram may constitute a sufficient written memorandum to satisfy the requirements of the statute of frauds. Yaggy v. B.V.D. Co. (1970), 7 N.C. App. 590, 173 S.E.2d 496; 72 Am.Jur.2d Statute of Frauds § 300-, 37 C.J.S. Frauds, Statute of, §§ 175, 176.
“No particular form of . .. instrument is necessary to constitute a memorandum or note in writing under the statute of frauds ... It is the general rule that a memorandum wholly untechnical in form may be sufficient. It may consist of any kind of writing . . .” fohnson v. Ogle (1974), 120 Mont. 176, 181 P.2d 789, 791, quoting 49 Am.Jur. Statute of Frauds § 321.
It is the second requirement of the statute of frauds which appellants contend was not satisfied in the transactions between the Hillstroms and Villano. This is the requirement that the writing be “subscribed by the party to be charged or his agent. . .” and that “[s]uch agreement, if made by an agent of the party sought to be charged, is invalid unless the authority of the agent is in writing and subscribed by the party sought to be charged.” Section 28-2-903, MCA. Villano is the party sought to be charged in this particular suit and the person who must have subscribed a written note or memorandum under the statute of frauds. Thus, the narrow issue to be decided is whether the typewritten name “JEREMI VILLANO MD” at the bottom of the telegram is a sufficient subscription to satisfy the requirements of the statute of frauds. The District Court found that it was. We agree.
This Court has never ruled on what constitutes a valid subscription for purposes of the statute of frauds. Other courts however, have consistently held that any mark affixed to a writing with the intent to authenticate it constitutes a sufficient subscription by the party sought to be charged. 72 AM.Jur.2d Statute of Frauds § 358; 37 C.J.S. Frauds, Statute of, §§ 202-204; 4 Williston, Contracts, § 585 (3rd Ed. 1961); Restatement of Contracts § 210 (1936). (See also the Uniform Commercial Code, which although it does not apply to sales of real property, nevertheless has a similar definition of the word “signed.” Section 30-1-201(39), MCA.) Provided the necessary intent to authenticate is shown, the typewritten “signature” on a telegram is a proper subscription within the meaning of the statute. Yaggy v. B.V.D. Co. (1970), 7 N.C.App. 590, 173 S.E.2d496, 502; La Mar Hosiery Mills, Inc. v. Credit and Commodity Corporation (1961), 28 Misc.2d 764, 216 N.Y. S.2d 186, 190; Joseph DuNunzio Fruit Co. v Crane (S.D.Cal. 1948), 79 F.Supp. 117, 128-129.
The two Montana cases cited by appellants in support of their narrow treatment, In re Sales’ Estate (1939), 108 Mont.202, 89 P.2d 1043, and In re Miller’s Estate (1908), 37 Mont. 545, 97 P. 935, as well as the California case cited, In re Moore’s Estate (1949), 92 Cal.App.2d 120, 206 P.2d 413, deal with the testamentary formalities for executing a will, not with the statute of frauds, and cannot be used here. Neither does Schwedes v. Romain (1978), 179 Mont. 466, 587 P.2d 388, address the issue presented here because there was no memorandum of the parties’ agreement in writing in that case.
We need not address the general question of whether or not a telegraph company is the agent of the sender of a telegram. Our statute provides that the agent’s authority must be in writing subscribed by the party sought to be charged only if an agreement for the sale of real property is “made” by the agent. It is apparent in this case that the agreement was not “made” by the telegraph company and that the company was Villano’s agent, if at all, only for the limited purpose of communicating her telegram.
A side issue arose in this appeal as to whether there is substantial evidence in the record to support the District Court’s findings that Villano understood the terms of the Hillstroms’ offer and that she in fact accepted the offer intending her teletypewritten signature to authenticate her telegram. Notwithstanding appellants’ contention that Villano did not intend her typewritten name to authenticate the telegram because she understood the sales price to be $55,000 with an 8 percent commission rather than the $52,800 with a 4 percent commission which resulted after Strahn and Hillstrom agreed to split the commission, the District Court found otherwise.
Villano’s intent to authenticate her typewritten name on the telegram as her valid subscription is, of course, required to satisfy the statute of frauds. Radke v. Brenon (1965), 271 Minn. 35, 134 N.W.2d 887; Marks v. Walter G. McCarty Corp. (1949), 33 Cal.2d 814, 205 P.2d 1025, 1028. The intent to authenticate is established on the face of the telegram which states, “PLEASE CONSIDER THIS MY WRITTEN ACCEPTANCE . . .” The fact that the wording to be used was dictated by Hillstrom to Strahn, and then over the phone to Villano, indicates that both parties intended to bind themselves and close the deal.
This intent is supported further by Villano’s testimony that she understood she had a firm deal, notwithstanding her contention that she thought the terms of the deal to be otherwise. The District Court accepted the testimony of Strahn that the figure of $52,800, as written on the “Earnest Money Receipt and Agreement to Sell and Purchase,” was read to Villano over the telephone by Strahn. In any case, Villano received $88 more for her property under the split commission arrangement than she would have received under a sales price of $55,000 with an 8 percent commission. This evidence establishes Villano’s intent to authenticate her typewritten signature on the telegram.
We note that this case involves a contract which in fact has been admitted. Villano’s admission of the agreement is important because in cases involving admitted contracts, we have construed the statute of frauds less technically, refusing to allow the statute to be used so as to defeat its purpose to prevent the commission of a fraud. Farmers Elevator Co. v. Anderson (1976), 170 Mont. 175, 552 P.2d 63; Gravelin v. Porier (1926), 77 Mont. 260, 250 P. 823, 829.
The judgment of the District Court is affirmed.
MR. CHIEF JUSTICE HASWELL, and JUSTICES HARRISON, SHEA and SHEEHY, concur. | [
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MR. JUSTICE SMITH
delivered the opinion of the court.
Plaintiff seeks to recover damages for loss, alleged to have been sustained by himself and four other persons, his assignors, on account of the negligence -of the defendant in transporting a train-load of cattle for them from Dorsey, Montana, to Chicago, Illinois. As to each consignment of cattle, the complaint alleges, inter alia: “That the defendant did not safely carry the said cattle as it undertook and agreed to do, but, on the contrary, by its servants and agents, so negligently conducted and misbehaved in regard to the same * * * that the said cattle were damaged and injured * * * by reason of the negligence of the defendant.” The defendant answered affirmatively “that it safely carried said cattle with reasonable care and speed, and in accordance with the usual and regular schedule of time for the running of stock trains over its road; that said cattle were unloaded at Montevideo, Minnesota, # * * for the purpose of feeding and watering the same; * * * that the said cattle had received the necessary feed and water; * * * that any damage to said cattle through unusual shrinkage or otherwise was due solely to the actions of the parties in charge thereof, by delaying the shipping.” As a further defense, it was alleged that the cause of action is barred by the provisions of subdivision 4, section 6450, Revised Codes. This subdivision reads, in part, as follows: “4. An action for killing or injuring stock by a railroad corporation or company” must be commenced within one year. Plaintiff had verdict and judgment. Defendant appeals from the judgment, and from an order denying a new trial.
1. Respondent objects to our considering the bill of exceptions for technical reasons; but we prefer to decide the appeal on its merits.
2. Appellant contends that the cause of action is barred. It has never been supposed in this jurisdiction that subdivision 4 of section 6450, supra, has reference to causes of action, such as the one we have under consideration. While this is an action founded in tort (Nelson v. Great Northern Ry. Co., 28 Mont. 297, 72 Pac. 642), it is essentially an ordinary common-law action for injury to personal property, and falls within the provisions of the statute of limitations, relating to such actions, rather than within subdivision 4 of section 6450, which has special reference to stock killed or injured by railroads, other than stock in their possession and under their control as bailees or common carriers. The Kentucky court of appeals so held in Illinois Central R. Co. v. Brown (Ky.), 54 S. W. 169, in construing a somewhat similar statute, and again in Burnside & C. R. Ry. Co. v. Tupman (Ky.), 72 S. W. 786. We shall not undertake to point out the manner or circumstances of killing or injuring stock to which subdivision 4 of section 6450 relates, any further than to hold that it has no reference to eases like this.
3. It is argued that the allegations of the complaint are not sufficiently broad to justify evidence that the water and hay furnished en route were of inferior quality. Appellant contends that the words “safely carried” limited the issue as to the manner in which the injuries to the cattle were occasioned. We cannot agree with counsel in their conclusion that the court committed prejudicial error in admitting or refusing to strike the testimony concerning the quality of the hay and water furnished by the defendant. There was no special demurrer to the complaint or motion to make more definite and certain. The witness Potter was permitted to testify fully as to these alleged grounds of negligence, without objection. The complaint charges that the defendant “so negligently conducted and misbehaved * * * that the cattle were damaged, and injured * * * by reason of the negligence of the defendant.” The word “safely” adds nothing to the statement of a cause of action. It has reference to the contractual relation existing between the parties, and not to the negligence feature of the charge. The defendant’s answer shows that it was advised in a general way that one ground of alleged negligence was failure to furnish proper feed and water. No judgment should be reversed by reason of any error or defect in the pleadings or proceedings which does not affect the substantial rights of the parties. We do not think the substantial rights of the defendant were affected by the alleged errors of which complaint is made. The cause was tried on its merits.
4. Over defendant’s objection, the court gave the following instruction to the jury, viz.: “No. 8. You are instructed that in the transportation of cattle from one state to another by a railway company such cattle must be unloaded, fed, and watered every twenty-eight hours; and if they are not so fed and watered the railway company is liable for such damage to said cattle as they may be proximately caused by such failure.” Chapter 3594 of the Public Acts of the Fifty-ninth Congress of the United States, passed June 29, 1906 (volume 34, part 1, Public Laws, p. 607), makes it lawful for the carrier at the written request of the owner or person in custody of a shipment of livestock, to extend the period of confinement in transit to thirty-six hours. The witness Stewart, one of the owners, testified that when the cattle were shipped he got (gave?) a permit, which entitled them to run continuously for thirty-six hours. The objection to the instruction was that it was not applicable to the facts in the case, “as the testimony shows that thirty-six hour permits were signed, in this case, by the shippers, which gave the defendant the right to run said train continuously for thirty-six hours,” and also “that it recognizes the right of the plaintiff to recover for his own contributory negligence in not insisting that the cattle should have been unloaded before they had been held so long as to violate the law; it appearing that the shipper accompanied the shipment of cattle.” It will be at once noted that the instruction, while evidently founded in the federal statute, is silent as to any ground of negligence predicated upon a failure to unload the cattle. It relates entirely to a failure to feed and water. There is testimony in the record to show that, while the cattle were unloaded and fed, they were without water suitable to drink, or which they would drink, for many hours in excess of thirty-six. An inspection of the charge of the court, as a whole, discloses the fact that the question of negligence on the part of the defendant for failure to unload within twenty-eight or thirty-six hours, as provided by the federal statute, was not submitted to the jury. They were told that, if they believed the defendant used reasonable care in furnishing the cattle with water that was “fit and suiable for watering cattle,” it had discharged its full duty in that regard. Also, that if the delays along the road, if any, were due to the acts or instructions of the shippers, then the defendant was not liable for any injuries to the cattle growing out of such delays. Under these circumstances, we fail to see how the defendant was prejudiced by the instruction of which complaint is made, although we are at a loss to know why it was given.
5. Instruction No. 9, given by the court, reads as follows: “If the jury should find for the plaintiff, then, in estimating the damages sustained by him, they should also allow such an amount as will compensate for all the detriment approximately caused by the wrongs, if any, to the cattle sued for herein.” Defendant objected to this instruction “that it does not limit the amount of damages for which the jury can return a verdict,” and “the correct measure of damages would be the difference between the market price in Chicago on that day and what the said cattle actually brought.” The instruction given, although crude and peculiar in phraseology, appears to be unobjectionable in substance. An attempt was evidently made to follow the general rule laid down in the Codes. If the defendant desired a more specific direction on the subject of damages, it was the duty of counsel to frame and offer one in conformity with their views of the law. (Rand v. Butte, Electric Ry. Co., 40 Mont. 398, 107 Pac. 87.) This rule has not been changed by the statute (Rev. Codes, sec. 6746) relative to procedure on settlement of instructions. It is still necessary to put the trial court in error. The instruction given, being good so far as it goes, leaves nothing for this court to consider.
6. Appellant complains of the following instruction, given by the court over its objection: “(11) The jury are instructed, that parties have a right to get together and buy their peace, by making concessions to each other; and any offer or proposition of settlement, if made for that purpose merely, will not be binding upon the party as an admission of the amount due or claimed at the time.” It appears from the record that upon their arrival in Chicago with the cattle the appellant and other shippers filed claims for damages with the defendant for amounts considerably less than those which are now demanded. The defendant put these written demands in evidence at the trial. The objections to the instruction were “that there was no testimony in the case showing any offer of compromise,” and “the claim filed by the plaintiff and his assigns was an unqualified demánd for the full amount of damages alleged to have been sustained by them at the time of the filing of said claims.” It is somewhat difficult to ascertain the meaning of the instruction and the reason for giving it. Two of the shippers had testified, in effect, that they were willing to take the amount demanded at the time, in order to get a settlement; but that the sum mentioned did not in fact represent the actual damages sustained. One testified: “We didn’t want to stand a lawsuit, and put in the claim, thinking they would accept it.” The claims were voluntarily presented. There was no necessity for their presentation as the basis of a lawsuit. Viewed as admissions as to the amount of the damages sustained, they were contradictory of the evidence offered at the trial, and in that regard were against the interest of the plaintiff, and might have been so considered by the jury. But they were not conclusive. They could be explained and contradicted, and the jury might attach to them such weight as they saw fit. They were in fact not binding as to the amount actually due, and so the court told the jury. We do not understand from the instruction that the court intended to advise the jury that they were not competent evidence, or that they were entitled to no weight or consideration whatsoever. The jury probably considered them for what they were worth in arriving at a verdict. At any rate, there is not anything in the instruction to preclude them from so doing.
7. The court refused to give defendant’s offered instruction No. 3, which reads as follows: “If the jury find from the evidence that said cattle were damaged or injured over and above the injury or damage that would necessarily result to a shipment of the kind and character of the cattle these were, and in their condition, in making the trip by rail that these cattle made, and you further find from a preponderance of the evidence that the acts of the shippers accompanying said cattle, or any of said acts, as set out and alleged in defendant’s answer, proximately contributed to cause said- damage, then your verdict should be for the defendant.” The court did, however, give instructions Nos. 13, 14, 16, 17, and 18, which, we think, fully covered that branch of the ease.
8. The court also refused to give the following instructions, tendered by the defendant: “ (9) If you find from the evidence that the defendant furnished suitable ears in which to ship said cattle, and used all reasonable care in managing and transporting the .same, and that the damage and injury, if any, was caused by the peculiar character of the animals themselves, such as bad temper, unusual restiveness, or viciousness, or was such as is ordinarily incident to the transportation of such animals, resulting from being confined in the cars and carried, contrary to their usual habits, and from unavoidable delays, then the defendant is not liable in this case.” “(11) If the jury believe from the evidence that the defendant had no knowledge of a steer being down in the car until after it was dead, and that such steer got down as the result of the inherent nature and propensities of the animal, or of the other cattle in such car, and through no negligence of the defendant, then the defendant is not liable for damages for the loss of said steer.” These instructions were properly refused on the authority of Nelson v. Great Northern Ry. Co., supra, Wahle v. Great Northern Ry. Co., 41 Mont. 326, 109 Pac. 713, and section 5353, Revised Codes.
9. Offered instruction No. 15 was refused, and defendant excepted. It reads thus: “You are instructed that it is undisputed that the yard where said cattle were loaded at Milwaukee was under the control of a private concern, and not under the control or management of the defendant company. You are further instructed that, although you find that a stopover at Milwaukee was necessary by reason of prior negligence on the part of the defendant, you cannot find for the plaintiff for damages sustained, if any, by reason of tbe handling of said cattle in loading them into the cars by the employees of the concern that had charge of said yard, however improper said handling was.” It is a sufficient answer to this assignment of error to say the testimony shows that the injuries complained of as having been sustained at Milwaukee were occasioned by the negligent manner in which the defendant company set the cars, preparatory to reloading the cattle.
The judgment and order are affirmed.
IAffirmed.
Me. Chief Justice Brantly and Me. Justice Holloway concur. | [
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MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
This action was brought to enforce payment of a promissory note dated December 16, 1905, due on demand, and executed and delivered by defendant and one John Eakins to the plaintiff. Before the action was commenced, Eakins died. The complaint, after alleging the execution and delivery of the note, contains, in paragraph 3, the following: “That prior to the commencement of this action plaintiff demanded of the defendant the payment of said promissory note, and that the defendant has at all times failed, refused, and neglected to pay said promissory note or any part or portion thereof, and that the said John Eakins in his lifetime, and his legal representatives since his death, have failed, neglected, and refused to pay said promissory note or any part or portion thereof.” It is further alleged that Eakins died, that an administratrix of his estate was appointed, that plaintiff presented its claim, and the same was duly allowed,. and paragraph 5 concludes as follows: “That no part or portion of said claim has been paid.” The defendant answered, admitted the execution and delivery of the note, the death of Eakins, that he (defendant) had not paid the note, and then denies any knowledge or information as to whether Eakins in his lifetime, or his legal representatives since his death, paid the note or the debt evidenced by it; and further denied, upon information and belief, that an administratrix had been appointed for Eakins’ estate, and denied any knowledge or information as to whether plaintiff had presented its claim or whether the same had been allowed or remains unpaid. Defendant then pleaded two counterclaims, in the first of which he alleges that, prior to the execution of the note sued upon, he and Eakins formed a copartnership to carry on certain work in Butte; that the money represented by the note was borrowed by them as copartners for the use of the copartnership in carrying on its undertaking and was in fact used by them as copartners in their copartnership enterprise. It is alleged that about January 19, 1906, one O’Brien, in payment for work done by the copartnership, executed and delivered to Eakins a cheek drawn upon the Daly Bank and Trust Company for $424.20; that Eakins received such check as the property of the copartnership and held it as such, and had it in his possession unindorsed at the time of his death. It is alleged that about February 16, 1906, this plaintiff, after the death of Eakins, wrongfully obtained possession of such check, caused the name of John Eakins to be indorsed upon it, and then presented the cheek to the bank upon which it was drawn, collected the money, converted it to its own use, and ever since has failed and refused to account to the defendant for the same or any part thereof. The second counterclaim is in similar terms, except' as to the amount of the check which it is alleged plaintiff procured and cashed. The prayer of the answer is that plaintiff take nothing; that defendant recover the amount of each of the two checks with interest, that he recover his costs, and for general relief. Upon these pleadings plaintiff moved for judgment, and the motion was granted. Plaintiff thereupon waived its claim for attorneys’ fees, and the district court rendered and entered judgment, from which the defendant appealed.
1. Contention is made that paragraph 3 of the complaint, quoted above, does not contain allegations sufficiently Specific to show nonpayment of the note; but with this we d’o not agree. It requires the most strained construction of the pleading to admit of a doubt that payment has not been made by anyone, if the allegations above are true.
2. While it may well be said that the denial of information as to whether plaintiff presented its claim and had same allowed, and the further denial upon information and belief that an administratrix has been appointed for Eakins’ estate are frivolous, since these facts can be ascertained from public records, still the allegation that Eakins in his lifetime did not pay the note is put in issue by a denial of knowledge or information sufficient to form a belief as to the truth of that allegation. This form of denial is authorized by the Codes (Rev. Codes, see. 6540), and when interposed to any material allegation of the complaint raises an issue (sec. 6723). That the allegation of nonpayment is a material and essential allegation in an action of this character is established in this state by repeated decisions of this court. (Yancey v. Northern Pac. Ry. Co., 42 Mont. 342, 112 Pac. 533, and eases cited.) The note sued upon is joint and several, and payment by one of the makers extinguishes the liability of all. (Rev. Codes, sec. 4923.) Therefore, in order to show a breach of the condition of the obligation, it is necessary to allege that payment has not been made by any of the parties liable; and if issue be joined upon such allegation, then the burden is upon the plaintiff to make proof. (Yancey v. Northern Pac. Ry. Co., above.) Since the answer raises an issue as to nonpayment by Eakins in his lifetime, the motion for judgment on the pleadings should not have been granted.
3. The motion should not have been granted for another reason: If the answer states facts sufficient to constitute counterclaims, plaintiff cannot recover upon the record as now presented to us. The allegations of new matter are not denied, and the amount of the counterclaims exceeds the amount of plaintiff’s demand. As we understand the answer, there is not any attempt made to set up a counterclaim in favor of a copartnership as against the individual liability of the defendant. The answer sets forth facts which, if true, disclose that the obligation upon which plaintiff sues is in fact a partnership obligation, and in an action upon such an obligation it is elementary that one partner may avail himself of a counterclaim in favor of the copartnership to defeat the plaintiff’s recovery, even though such partner is separately sued or answers separately; the fundamental principle being that, if the demands are mutual, one may be counterclaimed as against an action upon the other. To constitute a counterclaim, the facts must disclose a cause of action in favor of the defendant and against the plaintiff, existing at the time of the commencement of the action. (Rev. Codes, sec. 6541.) If the allegations of these counterclaims be true, defendant and Eakins were copartners at the time this note was executed, and the note was the copartnership obligation (sec. 5489) and the money received upon it was partnership property (see. 5468); so, likewise, were the checks received by Eakins, and converted by plaintiff, partnership property, and each member of the partnership can- require that the partnership property be applied to the discharge of partnership obligations (sec. 5472). The death of Eakins worked a dissolution of the partnership (sec. 5494), but did not affect the partnership property, except to give to this defendant, as the sole surviving partner, exclusive control of the property. (See. 7607.) He could retain possession and control, not by virtue of any supposed representative relationship, but jure proprio, since the interest of each member of the partnership extends to every portion of its property. (See. 5469; Krueger v. Speith, 8 Mont. 482, 3 L. R. A. 291, 20 Pac. 664.) By reason of his right to the possession of the partnership property, defendant may maintain any appropriate action for its recovery.
It is elementary, also, that one who has a cause of action in conversion may waive the tort and sue as upon an implied contract. (Galvin v. Mac M. & M. Co., 14 Mont. 508, 37 Pac. 366.) If the allegations of these counterclaims are true, defendant had causes of action against the plaintiff at the time it commenced this action, and by waiving the tort and proceeding as upon the implied contract, defendant could set up these causes as counterclaims to plaintiff’s action, for subdivision 2 of section 6541 includes implied as well as express contracts. (34 Cyc. 676, 711.) And if the taking by plaintiff was wrongful, as alleged, a demand was not necessary; and neither is it essential to defendant’s right to recover that plaintiff knew of the interest asserted by this defendant at the time of the conversion, or since.
Our conclusion is that the defendant has stated a cause of action against the plaintiff in each of these counterclaims, and the motion for judgment on the pleadings should have been overruled.
The judgment is reversed and the cause is remanded, with directions to overrule the motion.
Reversed and remanded.
Mr. Chief Justice Brantlt concurs.
Mr. Justice Smith concurs in the result. | [
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] |
MR. CHIEF JUSTICE CALLAWAY
delivered the opinion of the court.
This action was brought by the plaintiff, Capital Finance Corporation, to recover of the defendant, Metropolitan Life Insurance Company, the cash surrender value of an insurance policy issued by the defendant to Herman Krogman in favor of Krogman’s wife. The policy was executed March 20, 1919j and at the time of the assignment had a cash surrender value of $83.
On February 21, 1924, the plaintiff loaned to Mr. and .Mrs. Krogman $50, evidenced by a promissory note executed by them on that day, and to secure the payment of which they executed a writing whereby they assigned to plaintiff all their rights in and to the policy. Duplicate of the writing, called the assignment, was sent immediately to the defendant’s home office in the city of New York. After some correspondence the defendant pronounced the assignment “not acceptable” and refused to recognize it. Upon maturity of the note the Krogmans failed to pay it. The plaintiff then foreclosed its pledge. There being no other bidder plaintiff purchased the policy at the sale, and thereafter demanded from defendant the surrender value thereof. The defendant refused to pay, and the plaintiff brought this suit. The court rendered judgment for the plaintiff, and the defendant appealed.
The single question presented is whether the assignment, not being upon blanks furnished by the defendant, is valid. Its sufficiency under the laws of Montana is not questioned.
A provision of the policy reads: “4. Assignment: No assignment of this policy shall be binding upon the company unless it be executed upon blanks furnished by the company and filed with the company at its home office in the city of New York. The company assumes no responsibility as to the validity of any assignment.”
A letter addressed to the defendant’s agent in Butte, emanating from the Pacific Coast head office of the defendant in San Francisco, was introduced in evidence. The writer, speaking for the defendant, made reference to the assignment in question here and eight others. In the letter he said, among other things: “We have delayed final decision on same until we could communicate with our legal department in the home office, and are but just now in position to inform you that the purported assignments as submitted are not acceptable.”
Commenting upon the form of the Krogman assignment, the writer says: “You will observe by comparing it with our “own printed form the absence of the very valuable and important words £for value received.’ These words have a marked legal significance, and any conveyance that lacks them is imperfect.” This sage pronouncement will be of interest to Montana lawyers. The writer then goes on to say that “we are accepting assignments every day that are not on our forms, but they are legally drawn.”
Any attempt to render a contract of this nature unassignable would be futile in view of the provisions of section 8160, Revised Codes of 1921: “A policy of insurance upon life, health, or freedom from accident may pass by transfer, will, or succession to any person, whether he has an insurable interest or not, and such person- may recover upon it whatever the insured might have recovered.” This section is in harmony with section 7414, Revised Codes of 1921, which declares that a right arising out of an obligation is the property of the person to whom it is due.
The contract between Krogman and the defendant, made in this state, is governed by the laws of this state. (See. 7537, Rev. Codes 1921; 14 R. C. L. 997.) The principle that the parties may put into insurance contracts such provisions and conditions as they choose, provided such are not in contravention of law and public policy, and that the same will be given their appropriate and intended effect (14 Cal. Jur. 416; 14 E. C. L. 929, 930), will, of course, be conceded. That insurance companies may not insert in their policies provisions restricting the operation of section 8160 must also be conceded. It is a general rule that the validity of an assignment must be determined by the law of the place of assignment. (Cooley’s Briefs on the Law of Insurance, 1079.)
As to what extent an insurance company may prescribe reasonable conditions concerning the assignment of a policy we need not now inquire. Certainly conditions will not be permitted which will serve to nullify the provisions of section 8160, or which will tend to render that section inoperative. The conditions imposed, whatever they may be, will be interpreted in accordance with section 7534, Eevised Codes of 1921: A contract must receive such an. interpretation as will make it lawful, operative, definite, reasonable and capable of being carried into effect.
An examination of the authorities submitted in the exhaustive brief of defendant’s counsel does not disclose a ease which discusses an assignment like the one here. “No assignment of this policy shall be binding upon the company unless it be executed upon blanks furnished by the company.”' Must we adhere to the exact wording of that provision? If so, an assignment in the exact words employed by defendant in its blanks — including those very valuable and important words, “for value received” — but written upon paper different in quality or size, or written or printed in type of different size and color, would not suffice. An affirmative answer would be absurd. Upon any view we may take of the case, the most the defendant could contend for would be a substantial compliance with its forms. And as the defendant’s spokesman says “we are accepting assignments every day that are not on our forms,” the defendant, must realize that it has not the right to insist “absolutely and iu all events” that an assignment to be valid must be upon blanks furnished by the company.
The trial court’s judgment is correct, and it is affirmed.
Affirmed.
Associate Justices Holloway, Galen, Stark and Matthews concur. | [
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] |
MR. JUSTICE STARK
delivered the opinion of the court.
From the pleadings and the evidence, all the material facts involved in this case are established without any dispute. These facts are as follows:
The plaintiff, a California corporation, sold to the Heisey Company of Great Falls (hereafter called the company) a carload of merchandise, on October 1, 1922, drew its draft for the sum of $2,958.89 on that concern, with a bill of lading attached, and sent the same to the Commercial National Bank of Great Falls. The bank presented this draft to-the company on October 3, 1922, whereupon the company gave the bank a check for the amount of the draft, drawn against its account in the bank. When this check was given, the company had a credit balance in the bank in excess of $8,000. The cheek was afterwards returned to the company in the usual course of banking business, marked “Paid.” The following day, October 4, 1922, in payment of the amount collected from the company, the bank forwarded to the Wells-Fargo Nevada ■ National Bank of San Francisco, for plaintiff’s account, its draft for the amount collected, less discount and collection charges. This draft was not paid, for the reason that the Great Falls bank failed, and did not open its doors for business on the morning of October 5, 1922. When this hank failed, it had on hand in cash $6,823.66. Later on F. D. Williams was duly appointed and qualified as receiver of the bank, which position he continued to occupy until April 9, 1923, when he resigned and was succeeded by the defendant.
On March 28, 1923, the plaintiff presented its duly verified claim to the receiver for the amount of the unpaid draft, and demanded that it be allowed as a preference claim, which demand was denied, Thereafter this action was brought, for the purpose of obtaining a judgment of the court requiring the receiver to allow said amount as a preference claim, and ordering it paid as such in the due course of administration of the affairs of the defunct bank.
Trial of the case was commenced before a jury, but before its conclusion the jury was dismissed, by consent of both parties, and the cause submitted to the court, which subsequently found the issues and entered judgment in favor of the defendant, and the plaintiff has appealed.
Counsel for plaintiff and defendant each rely upon the case of Hawaiian Pineapple Co. v. Brown, 69 Mont. 140, 220 Pac. 1114. Under the rule adopted in that ease, to establish that it had a preference claim to the funds of the bank in the hands of the defendant receiver, it was necessary for plaintiff to show three coexistent conditions, viz.:
(a) That the transaction created the relation of principal and agent — not creditor and debtor — between itself and the bank, so that the bank would be deemed to hold the amount collected from the company in trust for the plaintiff as beneficiary.
(b) That by the transaction the assets of the bank were augmented.
(c) Ability to trace the trust funds into the possession of the bank.
Failure to show the existence of either of these conditions would necessarily result in the defeat of plaintiff’s claim to the preference.
In order to show fulfillment of the first of the named conditions, plaintiff alleged in its complaint that the draft was sent “for collection and remittance.” Proof of this allegation, without anything to qualify it, taken in connection with the admitted fact that the bank collected the plaintiff’s draft and, instead of transmitting the money to plaintiff, sent its own draft on another bank in payment of the amount collected, would have established the first element of a preference claim against the funds of the defunct bank in the hands of the defendant as its receiver. (Hawaiian Pineapple Co. v. Brown, above cited.)
What, if any, instructions the' plaintiff gave to the bank as to the disposition to be made of the proceeds of the collection, at the time the draft was sent, or at any time thereafter, was not shown.
It is admitted that the plaintiff’s draft was sent to the bank for collection. To maintain its contention that it was also sent “for remittance,’’ counsel for plaintiff undertake to draw an inference and declare a presumption to that effect from the admitted and proven facts. In support of this contention counsel point out that inferences and presumptions permitted or declared by law are indirect evidence (Rev.
Codes 1921, sec. 10600); that an inference is a deduction which may be made from the facts proved, without an express direction of law to that effect (Id., see. 10601), and must be founded upon a fact legally proved and “oh such a deduction from that fact as is warranted by a consideration of * * * the course of business,” etc. (Id., sec. 10603); that a presumption is a deduction which the law expressly directs to be made from particular facts (Id., see. 10602), and in the absence of proof to the contrary is sufficient to establish a fact (I'd., sec. 10604); and that amongst the disputable presumptions is “that the ordinary course of business has been followed” (Id., sec. 10606, subd. 20). The argument then runs along this line: From the fact that the bank promptly collected and remitted, the inference arises that it did so because it had received the draft for that purpose; also that, since in “the ordinary course of business” a collecting bank would follow instructions, when the bank in this case collected and remitted, the law would presume that what it did was done pursuant to instructions.
The inference claimed by counsel is a legitimate one, and the presumption is as they assert, namely, that in the ordinary course of banking business a bank follows its instructions. (Guignon v. First Nat. Bank of Helena, 22 Mont. 140, 55 Pac. 1051.) Applying both the inference and the presumption to the facts admitted and proved in this case, we are able to conclude that the plaintiff sent its draft on the company to the bank with instructions to collect and remit the same, less charges, by its draft upon the Wells-Fargo Nevada National Bank of San Francisco, California.
Under these circumstances the plaintiff wholly failed to establish the first of the above-named elements of a preference claim against the funds in the hands of the defendant as receiver of the defunct bank, for when it directed the bank to send it a draft on the Wells-Fargo Nevada National Bank of San Francisco it was virtually an express direction not to send the identical money collected, nor to hold it separate for the plaintiff, but was equivalent to an agreement that the bank might use the money collected and pay the plaintiff by its draft on the San Francisco bank. An agreement or understanding'whereby the collecting bank is to use the identical .money collected and substitute its own obligation in its stead destroys all idea of a trust, and creates the relation of debtor and creditor, instead of trustee and beneficiary. (Akin v. Jones, 93 Tenn. 353, 42 Am. St. Rep. 921, 25 L. R. A. 523, 27 S. W. 669; Sayles v. Cox, 95 Tenn. 579, 49 Am. St. Rep. 940, 32 L. R. A. 715, 32 S. W. 626.)
In 3 R. C. L., p. 633, the rule gathered from decided cases is summarized in these words: “Where the understanding is that the bank, when the collection shall have been made, shall pass it to the general credit of the depositor, kept subject to check, such credit being authorized, it is the same as though the money had been deposited by the depositor to his credit; the title to the proceeds, after being credited, passes to the bank, and the relation becomes merely that of debtor and creditor. The same is true where the proceeds of the collection are to be remitted to the customer by check or draft.”
Since the plaintiff’s evidence fails to establish one of the three conditions which must coexist in order to entitle it to a preference claim against the fund in question, it is unnecessary to consider the evidence relative to the other two conditions. The judgment is affirmed.
Affirmed.
Mr: Chief Justice Callaway ' and Associate Justices Holloway, Galen and Matthews concur. | [
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] |
MR. JUSTICE STARK
delivered the opinion of the court.
This is an action, on a $2,500 policy of insurance, issued by the defendant to one J. J. Rogers on January 23, 1922,' covering a frame dwelling-house located on a farm near Ronan in what is now Lake county. The policy contained the following provision: “In consideration of the'rate at which this policy is written, and subject to the conditions of this policy regarding vacancy and nonoccupancy, it is warranted that the dwelling described hereunder will be occupied only by the owner of the title to the realty, by the members of the owner’s family, or by the salaried employees of the owner. A breach of this warranty suspends this insurance during such breach.”
On August 31, 1922, the insured dwelling was totally destroyed by fire, causing a loss in excess of $2,500. The insured made proofs of loss as required by the policy and subsequently assigned his interest therein to the plaintiff. The amount of the loss not having been paid, plaintiff brought this action to recover it. The only defense- interposed was that the above-quoted provision of the policy had been breached by the insured in this: That prior to and at the time of the fire which caused the loss, the insured dwelling was not occupied by Rogers, or by members of his family, or by his salaried employees, and that by reason of this condition the insurance had been suspended and was not in force at the time of the fire on the thirty-first day of August, 1922, and therefore the defendant was not liable for any loss alleged to have been sustained. At the trial the jury returned a verdict in favor of the plaintiff, upon which a judgment was entered, and from this judgment the defendant has appealed.
By its instruction No. 2 the court advised the jury: “If you believe from a preponderance of the evidence that the said dwelling destroyed by fire on August 31, 1922, was not at the time occupied by' J. J. Rogers, by members of the family of J. J. Rogers, or by the salaried employees of said J. J. Rogers, then the said insurance would be suspended and not in force and effect on the day of said fire, and the said J. J. Rogers and plaintiff herein cannot recover, and your verdict should be for the defendant.” Without objection the court gave to the jury its instruction No. 5, as follows: “You are instructed that the term ‘salaried employee’ as found in the warranty in the policy means any person who receives a recompense or consideration for his pains or industry in another’s behalf. It is not necessary that actual money be paid, but the recompense may be in food, shelter, or other considerations of value, and it is not essential that such recompense or consideration be paid or given for labor or services rendered in, at, or about the insured premises. If you believe that Handford was a “salaried employee of Rogers under the definition herein contained, your verdict must be for the plaintiff.” These instructions became the law of the case, and whether right or wrong were binding upon the jury.
1. There was no contention that at the time in question the insured house was occupied by Rogers or any member of his family; but the undisputed testimony showed that on the date of the fire Henry G-. Handford and his wife had their household effects in this house and were using the same as a dwelling, but were temporarily absent at the time of the fire.
The defendant contended that Handford was a tenant of the insured, whereas the plaintiff contended that he was a “salaried employee.” The case turned upon the determination of this disputed question. By returning its verdict for the plaintiff, the jury necessarily found that Handford was a “salaried employee” of Rogers at the date of the fire.
It will be observed that in order to bring Handford within the definition of a “salaried employee” as given in the above-quoted instruction, it was only necessary for the plaintiff to show that he was at the time in question expending some pains or industry in behalf of the insured for which he was receiving a recompense; it might be either in money, food, shelter or other consideration of value.
The testimony showed that some time about the middle of June, 1922, Rogers was negotiating with Handford and his two brothers for the purpose of leasing to them the ranch upon which the insured house was located. There was much dispute in the testimony as to whether or not a lease was actually executed in accordance with these negotiations. Rogers claimed that while a lease was prepared, it was never executed by him; while defendant's witnesses asserted that it was actually executed by all the parties and delivered. Whether the lease was in fact executed or not is not very material, for Handford testified that about the middle of August he abandoned the lease, and this statement is not challenged by counsel for either party.
At the time Handford abandoned the lease, there were on the place about a half dozen milk cows and some chickens belonging to Rogers, and also a garden which had been planted by Rogers. Notwithstanding that he had abandoned the lease, Handford continued to occupy the house from the middle of August down to the time of the fire as a shelter for himself and family and their household goods. During this time he milked the cows, cared for the chickens and garden, and received for his own use all of the dairy products, used the vegetables from the garden on his family table, consumed eggs produced by the flock of chickens, and also killed and ate some of them.
The plaintiff claimed, and Rogers testified, that although Handford originally went upon the premises with the intention of entering into the lease referred to, the lease was never executed and the idea of making one was abandoned, and that long prior to the time when the fire occurred Handford and Rogers had entered into a different arrangement whereby Hand-ford was to perform for Rogers certain labor in cutting and stacking grain and to render other services about the Rogers ranches for a money consideration, and that in addition thereto Handford was to occupy the house, look after the cows and chickens, take care of the garden, as a compensation for which services he was to receive the milk, eggs and vegetables from the garden; and that Handford was occupying the house under this arrangement at the time of the fire.
The testimony of Rogers, if accepted by the jury, was sufficient to establish the fact that at the time of the fire Handford was receiving from him some recompense or consideration for his pains and industry expended in his behalf, and was therefore a “salaried employee” within the definition of that term given by the court.
Handford and his wife testified as witnesses for the defendant and contradicted the testimony of Rogers in many points.
There was nothing in the testimony of Rogers above referred to, or the circumstances concerning which he testified, which would warrant this court in saying that his testimony was inherently improbable or incredible. The jury was entitled to accept it, if it chose to do so. Cohtradieted as it was by the testimony of defendant’s witnesses, it presented only a conflict in the evidence, and under such circumstances this court cannot disturb the jury’s findings.
2. After the plaintiff and defendant had introduced all their testimony in chief, defendant moved the court to allow it to amend .its answer by setting up as a second affirmative defense that the insured, Rogers, had falsely and fraudulently made a sworn statement in the proofs of loss which he had furnished to the company, to the effect that at the time of the fire the dwelling-house was occupied by a tenant, which statement touched a material matter and by the terms of the policy rendered it null and void. The application was denied by the court, and this ruling is assigned as error.
Defendant made no showing in connection with this application to amend. Counsel stated that it was offered “to take care of the evidence that was produced at the trial.” The evidence so referred to was the proofs of loss which had been delivered to the defendant by Rogers on October 30, 1922; so that defendant had been in possession of the facts which it desired to set up as its second affirmative defense for a period of more than two years before the trial of the ease began on the sixteenth day of December, 1924.
Rehearing denied December 15, 1925.
Granting or refusing to.grant leave to amend a pleading is always addressed to the sound judicial discretion of the court. (Dietz v. Rabe, 65 Mont. 500, 211 Pac. 343; Pue v. Bushnell, 72 Mont. 265, 233 Pac. 124.) In the case of Cullen v. Western etc. Title Co., 47 Mont. 513, 134 Pac. 302, it is said: “While it is the policy of our law to permit amendments to pleadings in order that litigants may have their causes submitted upon every meritorious consideration that may be open to them * # * and while it is the rule to allow, and the exception to deny, amendments (Leggatt v. Palmer, 39 Mont. 302, 102 Pac. 327; Flaherty v. Butte Electric Ry. Co., 43 Mont. 141, 115 Pac. 40), yet they are not at all stages of the proceedings a matter of right. After issue joined, the matter lies within the sound judicial discretion of the trial court, and an abuse of that discretion must be made to appear before this court can say that a refusal of leave to amend was wrong.”
Upon the record presented in this case the court clearly did not abuse its discretion in refusing to allow the proposed amendment.
The judgment is affirmed.
!Affirmed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Matthews concur. | [
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
Plaintiffs brought this action as copartners doing business in Butte, Montana, under the firm name of Crystal Ice Company. They sought to charge the defendants, husband and wife, as co-partners under the firm name of Oro Fino Ice Company, for a balance of $274.71, which is alleged to be due on account for goods, wares, and merchandise sold and delivered to defendants, no part of which had been paid. The defendants interposed a general denial. At the close of plaintiff’s evidence, the court directed a nonsuit as to the wife. The jury returned a verdict against the defendant Peter Linden for the full amount claimed, and judgment was entered accordingly. The case comes to this court on appeals by this defendant from the judgment and an order denying his motion for a new trial. Several assignments of error are made by counsel, but only one of them demands special notice.
The evidence introduced on the part of plaintiffs tended to show the following: That the defendant is the owner of an ice pond from which he harvests and stores ice for sale; that prior to 1907 he had! been leasing the pond to plaintiffs for $800 per year; that during the year 1907 the plaintiffs had purchased ice from him at the rate of $2.50 per ton; that payment was made to him by the delivery of ice by plaintiffs to certain customers of his, with the agreement that he should collect the current bills from these customers, and retain the amounts of them; that at the beginning of the year 1908 the defendant was informed by plaintiffs that the agreement was ended; that it was then agreed that plaintiffs should for a short time longer continue deliveries to defendant’s customers as theretofore because he was not then in a situation to care for them, and that he was to collect the current bills and pay the amour ts over to plaintiffs, retaining ten per cent to compensate him for his trouble; that this arrangement was continued up to the end of June, when defendant assumed charge of his own customers; that defendant accounted for all amounts collected by him up to the end of March, but after that time he ceased to account; that on June 29 he paid plaintiffs $50, and at different times sold and delivered to plaintiffs 150 tons of ice at $2.50 per ton; that these sales were made outright for a stipulated price in money; and that defendant after being given credit for the amount due for ice delivered and the cash payment made, was indebted to the plaintiffs for the full amount demanded. The defendant introduced evidence tending to show that the arrangement entered into in 1907 was at the beginning of 1908 renewed to cover the months of January, February and March; that on April 1 it was agreed that the arrangement should be continued in force until the defendant could take charge of his customers, which he did at the beginning of July; that, when the last agreement was made, it was stipulated that defendant, though collecting as before, should not pay over the amount of his collections, but should discharge the indebtedness to become due to the plaintiffs in that behalf by delivering to them ice as they needed it at any time prior to January 1, 1909, at the price of $2.50 per ton; that defendant was able and willing at any time to deliver an amount sufficient to discharge the balance due from him and repeatedly offered to do so; that he did deliver 150 tons, but that plaintiffs refused to allow him to make further delivery. He stated that in one instance plaintiffs refused to accept delivery of ice actually hauled to their place of business.
From this brief summary it is apparent that there was a conflict in the evidence as to what the terms of the contract were. If the plaintiffs’ theory was the correct one, they were entitled to recover; on the other hand, if the agreement was that defendant should reimburse plaintiffs for the amount collected for the months of April, May, and June by delivery of ice at the stipu lated price, they could not recover except for damages, upon allegation of the agreement as made and a breach of it by the defendant by a-failure to perform it according to its terms. (Clark v. Pinney, 7 Cow. (N. Y.) 681; Cummings v. Dudley, 60 Cal. 383, 44 Am. Rep. 58; Page on Contracts, sec. 1392.) Parties may stipulate for the discharge of their obligations in money or any other lawful medium. The office of the court is to ascertain their intent and understanding, and not to disregard the agreement which they themselves have made. If it was the agreement that defendant was to deliver ice in payment, plaintiffs had a right to demand ice. So the defendant had the right to acquit himself of his obligation by delivering ice. Before the breach of such an agreement by the debtor, the creditor cannot elect to have payment made in money, but must permit an acquittance by the debtor under the terms of the agreement. (Page on Contracts, supra; 2 Parsons on Contracts, 808, 809; Ragland v. Wood, 71 Ala. 145, 46 Am. Rep. 305; Drake v. Harrison, 69 Wis. 99, 2 Am. St. Rep. 717, 33 N. W. 81; Pierce v. Marple, 148 Pa. 69, 33 Am. St. Rep. 808, 23 Atl. 1008; Roberts v. Beatty, 2 Pen. & W. (Pa.) 63, 21 Am. Dec. 410.)
Counsel for defendants requested the court to submit an instruction to the jury, which embodies the rule of law applicable to his theory of the case, as follows: “Peter Linden claims that the ice so delivered to his customers by the plaintiffs was under a contract whereby he agreed to pay for the same, and the plaintiffs agreed to accept payment for the same in ice delivered to the plaintiffs by him at the rate of $2.50 per ton at any time prior to the first day of January, 1909; that he, Peter Linden, was ready, willing, and able at all times to perform his part of the contract, but that the plaintiffs refused to accept the ice in payment thereof from him. If you find that Peter Linden’s contentions are true, you are instructed that your verdict should be for the defendant Peter Linden and against the plaintiffs.” It was prejudicial error to refuse to give this or a similar instruction; for the defendant was entitled to have the case submitted to the jury so as to permit them to reach a conclusion upon the evidence from his point of view.
Counsel for plaintiffs suggest that the court was justified in refusing the instruction, because the expressions “Peter Linden claims,” etc., and “if you find Peter Linden’s contentions are true,” etc., particularize his testimony, and are thus implied comments upon the weight of it. We do not think it subject to criticism for this reason. But, even so, since he was the only witness who gave testimony tending to show the terms of the contract to be as he claimed, the jury could not have been misled by it. Manifestly, the jury could not have found in his favor unless they believed him; and, if they did, they could not have found otherwise.
The judgment and order are reversed, and the cause is remanded for a new trial.
Reversed and remanded.
Mr. Justice Smith and Mr. Justice Holloway concur. | [
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MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
This is an action for damages for a personal injury. The plaintiff recovered judgment against the defendant railway company, and from that judgment and an order denying a new trial the railway company appealed. There are several assignments of error, but only one need be considered, as it is determinative of this appeal.
The plaintiff, who was a passenger upon defendant railway company’s train between Logan and Bozeman, was injured. In his complaint he charges negligence on the part of the carrier and the train conductor, as follows: ‘ ‘ That at Bozeman, -and before the train on which plaintiff was riding came to a full stop, the said defendants negligently opened the vestibule of the said car on which plaintiff was standing and the said defendants negligently permitted a crowd of passengers, greater than the plaintiff could withstand, to surge out upon the platform of the vestibule of the car on which said plaintiff was riding and the said defendants negligently permitted the said crowd of passengers then and there to push, and they and a certain brakeman of the defendant acting negligently did then and there push the plaintiff from the said car.” There is also an allegation that the ears were overcrowded, but this fact had nothing whatever to do with the injury, and that ground of negligence, if such it was intended to be, was apparently abandoned at the trial. The evidence failed entirely to support the allegation that any of the passengers contributed to plaintiff’s injury, and the court so informed the jury in instruction No. 6 and withdrew that portion of the charge from further consideration.
There were but two grounds of negligence relied upon: First, opening the vestibule door, and, second, forcing the plaintiff from the car while the train was in motion. The evidence given by the plaintiff himself is that the vestibule door was ■opened by the train conductor at his special' request. The plaintiff testified: “About getting the vestibule open, just before I got to Bozeman, I asked the conductor if he would open it so as I wouldn’t have to go back through all the people, wanted to get out of there instead of going through the car to get out. The conductor did it when we got to Bozeman; I don’t know how far it was, just before we got to Bozeman, I asked him that question. After he said he would open it, he went through the car after that, when he came back he opened the door; the conductor opened it himself. He stepped back in behind me and I stepped out on the platform, or onto the steps and took hold of the bar ■and had a valise in my hand, and I stood there waiting for the train to stop and I would get off, and I was struck between the shoulders and that is all I know.” If, then, the opening of the door was a negligent act, it was one committed at the plaintiff’s request and for his benefit, and he will not be heard to complain. Volenti non fit injuria.
The testimony given by plaintiff eliminated the opening of the door as actionable negligence, and left the case to go to the jury upon the allegation that plaintiff was struck, pushed or forced from the car while the train was in motion. Upon the submission of the case, counsel for the railway company sought to have the court restrict the jury to a consideration of that one ground of negligence, by an offered instruction (D7), but the court refused the instruction as offered, modified it to such an extent as to submit to the jury the two charges of negligence contained in the complaint, and then, in instruction No. 12, told the jury that in order for plaintiff to recover it was only necessary for him to establish, by a preponderance of the evidence, either one of the acts of negligence alleged in the complaint; in other words, the trial court submitted the cause upon the theory that proof of negligence in opening the vestibule door, or proof of negligence in forcing plaintiff from the car, was sufficient to justify a recovery by the plaintiff. It is impossible to determine upon which of these two charges of negligence the jury founded its verdict; but as we have said above, the plaintiff cannot be heard to say that in complying with his request and opening the door, the agents of the railway company were negligent. It was error to refuse offered instruction D7 as presented; and in submitting both charges of negligence to the jury, the trial court adopted an erroneous theory of the ease to the prejudice of the appellant.
The judgment and order are reversed and the cause is remanded for a new trial.
Reversed and remanded.
Mr. Chief Justice BraNtly and Mr. Justice SMith concur.
Mr. Justice Holloway:
In addition to what is said above'as the conclusion of the court, I am of the opinion that the evidence is entirely insufficient to support either charge of negligence and that tbe motion for nonsuit should have been granted. So far as disclosed by the record, no one saw the plaintiff pushed, crowded or forced from the car. He testified that he received a blow in the back which threw him from the car and caused his injury; but he did not see the blow struck and does not know who it was that administered the force. Even a- railway company ought not to be mulcted in damages without proof of wrongdoing, merely because no one else can be found upon whom to fix liability. By a process of elimination, counsel for plaintiff seek to draw the inference that it must have been the brakeman who caused plaintiff’s fall; but the circumstances from which the inference is sought to be drawn are so intangible that at best they produce nothing more than a bare scintilla of evidence, and that is not sufficient to support a judgment. (Pierce v. Great Falls & C. Ry. Co., 22 Mont. 445, 56 Pac. 867.) In order to support a judgment there must be substantial evidence of every fact necessary to a recovery. Mere conjectures or speculations are not sufficient. (Watson v. Colusa-Parrot M. & M. Co., 31 Mont. 513, 79 Pac. 14.) | [
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Mil. JUSTICE SMITH
delivered the opinion of the court.
On the thirtieth day of November, 1909, the parties hereto entered into a written contract, wherein the plaintiffs leased to the defendant a tract of land in Missoula county for a term of ninety-nine years, at an annual rental of $300. It appears from the lease that the lands so let are part of a larger tract owned by the plaintiffs. We quote certain portions of the agreement: “The lessors agree that the lessee may take within the boundaries of the land described all such clay, earth, and other material as it shall desire for the purpose of using the same in, about, or in connection with its business in manufacturing brick, tile, etc., and such other purposes as to it shall seem proper. * * * If the said lessee shall damage any of the trees in the orchard of the lessors, or other fruit or berry-bearing trees or shrubbery or shade trees, a reasonable compensation is to be made therefor. * * * The lessee may build * * * tracks and wagon road any place on the premises hereby leased * * * for the purpose of moving clay, fuel, or other material. * * * The lessee covenants that it will so far as the operations of the lessee are concerned protect all irrigating ditches of the lessors and maintain the same in condition necessary to enable the same to carry water in the usual quantities. * * * The lessee may construct buildings, brick kilns, and any and all other structures and apparatus that it may deem necessary for its use in connection with its business of manufacturing brick, tile, etc., upon the said premises. * * * Until such time as the lessee shall require for its use the lands and premises hereby leased and let, the lessors shall have the privilege to occupy and use the same or any portion thereof as they 'have heretofore done. * * >s It is further agreed that the lessee will not excavate upon or in any manner disturb the surface conditions of that portion of the land covered by this lease which is meadow and grazing land until such time as the doing so may become actually necessary in the successful and proper operation and conduct of the business by said lessee contemplated, and until the same shall become necessary the lessors are to have the right to use the said meadow and grazing land and to cut, take, and use the crops of hay grown thereon the same as if this lease had not been given. * * * The lessee is to provide * * * a practicable way for (lessors’) stock to go to and from the barnyard and corral to the grazing lands.” This action was brought to annul the lease, plaintiffs alleging in their complaint that “the land covered by said lease is agricultural land, and the lease is therefore invalid under the provisions of section 4465, Revised Codes, as an attempt to lease agricultural lands for a longer period than ten years.” A copy of the lease was attached to the complaint. The district court of Missoula county sustained a general demurrer to the complaint, and, plaintiffs declining to amend, judgment was entered for the defendant. From the judgment an appeal has been taken.
Section 4465, Revised Codes, reads as follows: “No lease or grant of agricultural land for a longer period than ten years, in which shall be reserved any rent or service of any kind, shall be valid.”
We encounter no difficulty in adopting all of the rules of statutory construction contended for by counsel for the appellants. In the construction of a statute the intention of the legislature is to be pursued, if possible. (Rev. Codes, sec. 7876; 36 Cyc. 1102.) “Courts may witb propriety, in construing a statute, recur to the history of the time when it was passed, and this is frequently necessary in order to ascertain the reason as well as the meaning of particular provisions in it.” (United States v. Union Pac. R. R. Co., 91 U. S. 72, 23 L. Ed. 224.) The New York court of appeals in Tonnele v. Hall, 4 N. Y. 140, said: “It is a sound principle that such a construction ought to be put upon a statute as may best answer the intention which the makers had in view, and that is sometimes to be collected from the cause or necessity of making it, at other times from other circumstances. "Whenever the intention can be discovered, it ought to be followed with reason and discretion in its construction, although such construction may seem contrary to its letter.” (See, also, City of Evansville v. Summers, 108 Ind. 189, 9 N. E. 81; Commercial Bank v. Foster, 5 La. Ann. 516; State ex rel. Meinzer v. Diveling, 66 Mo. 375; Keith v. Quinney, 1 Or. 364.) With this end in view, we may inquire the reason why this particular statute was enacted. New York appears to have been its parent state. As we find substantially the same statute there, prior to its adoption here, it may be presumed that we adopted it, perhaps indirectly via California, from that state, together with the construction placed upon it there by the courts. (In re Wisner, 36 Mont. 298, 92 Pac. 958.) The statute has been construed several times in New York.
In Stephens v. Reynolds, 6 N. Y. 454, Mr. Justice Gridley, speaking for the court, said: “A large part of the manorial lands in this state were originally settled under leases in fee, leases for lives, or a long term of years. In other words, the proprietors, instead of selling their lands out and out to purchasers, demised them to tenants, for long periods of time, reserving an annual rent, in money, produce, or services. Experience proved that this mode of settling the country was prejudicial to the prosperity and interests of the state as a question of political economy. The proprietors owning the lands, and the tenants having only the usufructuary interest, subject to be lost by forfeiture, by a nonperformance of any of the conditions of the lease, the latter felt none of the pride of independent ownership, and no desire to improve, by the best mode of cultivation, an inheritance which was liable to pass from them, or their descendants without a compensation. Impressed with the conviction of this truth, the framers of the Constitution of 1846, by a provision in the fundamental law, abrogated these tenures, and provided that no lease or grant of agricultural land for a longer period than twelve years thereafter made in which should be reserved any rent or service of any kind should be valid.”
In Parsell v. Stryker, 41 N. Y. 480, Mr. Justice James said, for the court: ‘ ‘ That clause of the Constitution, as all know, was * * * aimed * * * against manorial leases.”
In Odell v. Durant, 62 N. Y. 524, the court said: ‘ ‘ The character of the land is made by the Constitution the test of the validity of the lease, not the purpose for which the lease was made. There was nothing in this lease which precluded the lessee from using the land * * * for agricultural purposes if he saw fit. The plaintiff admits that the demised premises consisted in part of agricultural land, and the lease, being for more than twelve years, was clearly invalid as to that land. * * * The right to take ore may have been entirely worthless, and the whole value of the premises may have consisted in the use for agriculture, even though that may not have been the purpose for which" the premises were in fact leased; still, being agricultural lands and there being no restriction in the lease as to their use, the constitutional prohibition applies. If all that was intended to be demised was the mining right, the lease should have been put in that form and it would have been free from objection.”
In Clark v. Barnes, 76 N. Y. 301, 32 Am. Rep. 306, Mr. Justice Earl, speaking of the constitutional provision, said: “This provision condemns all leases for a longer period than twelve years.”
These cases were all decided before the adoption of onr Code provision, but, as the holding of the New York court since that date has been in accord with the earlier decisions, we may with propriety examine that also.
In Massachusetts Nat. Bank v. Shinn, 163 N. Y. 360, 57 N. E. 611, the court said: “We think that this lease does not come within the spirit of the constitutional prohibition, because the property leased was an iron mine extending for an unknown distance under agricultural lands, and was to be used exclusively for mining purposes. The right granted was to mine and carry away ore found under the surface of the ground, and, as incidental thereto, the further right to erect such structures and build such roads as were necessary for the primary object of mining. The lands not needed for this purpose were to be used by the lessor for agricultural purposes. There was to be no interference with the farming operations of the lessor, except as required by the mining operations of the lessee, who was made the sole judge of the necessity and extent thereof. It was not a lease of agricultural lands for agricultural purposes, but of mineral lands for mining purposes. The lessee had no right to cultivate the land, for he could simply mine and ship ore. The pursuit of agriculture was prohibited by the express covenant of the lessee to permit no business to be dene upon the premises ‘other than the business of mining.’ The evil aimed at by the Constitution is long leases of farming lands for farming purposes, not the leasing of a part of a suburban farm for the erection of dwelling-houses, stores, or manufactories, or of a mine in the bowels of the earth, with the right to bring ore to the surface and ship it. Even if the process of mining necessarily interferes to some extent with the tilling of the soil above the mine, it is merely incidental, and does not convert a mine lease into a farm lease. * * * While the purpose of a lease may be to mine ores, if there is no restriction to that use, the land may be used as a farm, and the Constitution thus violated. Hence the purpose is no test of validity, for the lease, whatever its purpose, if it covers agricultural lands, must exclude that use, or it will be void, provided the term exceeds twelve years. If that use is prohibited, the lease is not of a farm to be used as a farm, which the history of the times shows was the particular mischief aimed at in adopting the provision in question. The theory of the convention * * * was that long leases of agricultural lands for agricultural purposes were detrimental to the interests of agriculture.”
Having ascertained the reason for the adoption of the measure, as above indicated, we may proceed to examine the provisions of the lease involved in this case. Before doing so, however, it is to be remarked that counsel for the appellants contend that that portion of the opinion in Massachusetts Nat. Bank v. Shinn, which holds that the limitation of the constitutional provisions applies only to leases “for agricultural purposes, ’ ’ is obiter dictum,. But we do not so regard it. It seems to us that that ease and Odell v. Durant, supra, are in accord. The expression found in the latter case that “the character of the land is the test of the validity of the lease, not the purpose for which the lease is made,” is quoted in the Massachusetts Bank Case, and explained to mean that the purpose of a lease of agricultural land is immaterial so long as the lands may be used for agricultural purposes.
Again it is contended that, in order that the lease be valid, there must be an express prohibition of use for agricultural purposes, and the Massachusetts Bank Case is cited as authority for the contention. If by this is meant that the lease must contain an express provision, in terms, that the lessee may not use the land for agricultural purposes we cannot agree with counsel. If the terms of the lease disclose that the land may not be used for agricultural purposes by the lessee, and do not permit the use of the land by him for such purposes, we think it can be upheld as a valid lease by authority of both Odell v. Durant, supra, and Massachusetts Nat. Bank v. Shinn, supra. In other words, if a fair interpretation of the lease as written discloses the fact that the right of the lessee to use the land was strictly limited to other than agricultural purposes, then the lease is not invalid. When a lease of land is made ostensibly for purposes other than agricultural and the land so leased cannot by the terms of the lease, either express or implied, be put to agricultural uses by the lessee, the purpose of the statute has been satisfied, and the land in effect ceases to be agricultural land within the meaning of the law, although susceptible of use for agricultural purposes. •
In this particular lease the parties first described a tract within the boundaries of which the operations of the lessee were to be confined under any circumstances. They then provided that the lessee might take within such boundaries all clay, earth, and other material necessary for use in and about its business of manufacturing brick, tile, etc., “and such other purposes as it shall deem proper.” This latter expression must be construed to mean such other purposes as are germane to the business of manufacturing brick and tile. It is very'clear that the entire tract'was not to be used by the lessee without restriction. Indeed, the phraseology employed leads to the conclusion that the land was not leased for the purpose of being cultivated, or for grazing or raising hay, or for any other purpose which would leave it intact, but that such portions thereof as were suitable should be severed and manufactured into brick, tile, etc., and thereafter removed permanently from the locality. It was necessary, of course, in order to carry forward the main purpose, that provision should be made whereby portions of the land might be occupied for buildings, brick kilns, and roads, but this use was merely incidental to the other. If the lessee caused any loss or damage to fruit trees, shade trees, berry bushes, or other shrubbery, it was to make compensation therefor. It was also to protect and maintain all irrigating ditches of the lessors. It was then clearly stipulated that, until the lessee required the land for the purpose of making brick and tile, the lessors should have the privilege of occupying and using the same “as they have heretofore done.” If, as alleged in the complaint, the land is agricultural in character, it is not an unreasonable conclusion that the lessors used1 it for agri cultural purposes; and, if the privilege of so using it was reserved until such time as the lessee desired to use it for manufacturing purposes, the latter was necessarily prohibited from using it for agricultural purposes. This idea is further strengthened by other parts of the lease, wherein the right to use the meadow, grazing, and hay lands is expressly reserved by the lessors until the manufacturing operations of the lessee make it necessary to “excavate upon” or disturb the surface thereof. We are clearly of opinion that the contract between the parties amounted in effect to a sale of so much of the soil as might become necessary from time to time for the purpose of manufacturing brick and tile, and a lease of sufficient surface ground, within the limits described, to carry on its operations, and no more; and that the lessee is, partly by express agreement and partly by necessary implication, prohibited from using any portion of the ground for agricultural purposes. While a section of the California Code, identical with our section 4465, supra, has been amended since its adoption here so as to read “no lease of land for agricultural purposes,” instead of “no lease of agricultural land/’ we regard the amendment as simply an attempt to more clearly define the original intention of the legislature, and to make the statute clearly set forth the theory of •its purpose as shown by the decisions of the court of appeals of New York.
Our attention is called to the fact that section 4466, Revised Codes, declares that no lease or grant of any town or city lot for a longer period than twenty-five years, in which shall be reserved any rent or service of any kind, shall be valid; but we do not regard this section as having any bearing or throwing any light upon the preceding one. It applies to all city and town lots, as such, whereas section 4465 refers to but one kind of lands, to wit, agricultural lands. The status of a town or city lot is fixed by the confines of the municipality, while the term “agricultural lands” is descriptive of the nature of the land itself. It does not necessarily mean acre property. It is not possible to misunderstand the meaning of the words “city lot.” They mean a lot within the limits of a city, regardless of its other characteristics.
The judgment is affirmed.
'Affirmed.
MR. Chief Justice Brantly and Mr. Justice Holloway concur.
Rehearing denied April 17, 1912. | [
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] |
MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
The evidence discloses the following: The accident occurred on October 11, 1909, near the point where the road crosses Elk creek by a steel or iron bridge. As it approaches the bridge, the road extends along the shore of the stream only a few feet away. It is upon a grade two and a half or three feet above the level of the natural surface. At the bridge it turns at a right angle. In the grade was a culvert, constructed so as to allow the passage of water into Elk creek through a coulee which the road crosses. On the side toward the stream between the culvert and the bridge, the grade, except a small portion about three feet in width, had been undermined and washed away by high water in the latter part of the preceding June, leaving a cut hank and an excavation several feet in depth. At the time of the accident this excavation was filled with water. In the morning plaintiff had gone to Augusta, traveling over a cut-off road through the country. He left there about dark, taking the county road, because, as he said, he deemed it safer. He knew that there had been high water early in the year and that the roads in some places had been washed out, but had no knowledge of any washout on this road. The night was so dark that he could not see. He trusted to his team, which consisted of old and gentle horses, to follow the road. When the horses passed the culvert and reached the excavation they plunged into it, partially overturning the wagon into the water. He was much frightened by the suddenness of the accident, and, being unable to see, could not tell what further danger was impending. He was under the impression that the horses in their plunging would completely overturn the wagon and pin him down in the water. As he struggled in the water to escape the plunging horses and to extricate himself, his foot was caught and held fast in the “comb” of the wagon brake. He finally succeeded in releasing the horses by cutting the traces with his pocket knife; but in the struggle to avoid injury from them and afterward to release his foot, which he finally did by cutting off bis shoe, bis ankle was bruised and wrenehed, with the result that be has become permanently lame. There is little direct testimony tending to show that any of the defendants had actual notice of the condition of the road; but it is not controverted that the washout had occurred in the month of June and that no attempt had been made to repair the defect or remove the obstruction caused by it. It appears that the road is an old and regularly traveled road, having been used as such for many years, the plaintiff stating that he had known and traveled it for thirty-nine years; that it had been repaired at times by the supervisor of the district, and that, as already noted, it crosses Elk creek by an iron bridge. It appears also that there is a record and map of it among those of the county roads kept in the office of the county clerk.
Passing, for the moment, the question whether upon the facts disclosed there arose a liability on the part of the defendants or any of them for an injury resulting from their failure to discharge a duty enjoined upon them by law, the motion for a nonsuit should not have been sustained upon any of the four other grounds enumerated. Upon the assumption that it was the imperative duty of the defendants under the law, without reference to their rank of office, to keep the roads of the county in a reasonably safe condition, they were under an obligation, equally imperative, to exercise reasonable care to inspect them from time to time to ascertain their condition, in order that they might perform this duty; for it would be absurd to say that they owed a duty to the public generally and to the private- citizen personally by reason of their official position, but that they were under no obligation to ascertain when action on their part was required, or that they were not obliged to act until they had received personal notice of a condition calling for action. An equivalent proposition would be to assert that though these officers have exclusive control and supervision over the county roads, with the incidental but imperative duty to keep them in reasonably safe condition, they are not required to repair until they are requested to do so. . If they are liable at all, the rule of reasonable diligence applicable to municipalities applies to them, viz., that when the defect has existed for such a length of time and under such circumstances that the municipality or its officers, in the exercise of reasonable care and diligence, ought to have obtained knowledge of it, notice will be presumed. (Leonard v. City of Butte, 25 Mont. 410, 65 Pac. 425; Elliott on Roads and Streets, sec. 626.) The evidence on this branch of the case was sufficient to require it to be submitted to the jury.
The evidence was also sufficient to go to the jury upon the question whether the road was a public highway falling under the jurisdiction of the defendants, within the definition of the statute (Rev. Codes, sec. 1337), viz.: “All * * * roads laid out or erected by the public or now traveled or used by the public, or if laid out or erected by others, dedicated or abandoned to the public, or made such by the partition of real property are public highways.” The record kept by the commissioners, presumably under the requirements of other provisions of the Codes (secs. 1341, 1357) amounts to a recognition of the road in question by the board of commissioners, the executive body of the county, as a public road. This, together with the other facts showing its use by the public, was a sufficient prima facie showing that it is a public road. (State v. Auchard, 22 Mont. 14, 55 Pac. 361; Bequette v. Patterson, 104 Cal. 282, 37 Pac. 917; Bayard v. Standard Oil Co., 38 Or. 438, 63 Pac. 615; Kircher v. Town of Larchwood, 120 Iowa) 578, 95 N. W. 185; Madison Township v. Scott, 9 Kan. App. 871, 61 Pac. 967.)
The fact that the injury suffered by the plaintiff was due, m any measure, to his inadvertence in driving into the excavation or to his struggle to extricate himself from the dangerous position, does not necessarily lead to the conclusion, as a matter of law, that he was guilty of negligence. The evening was so dark that he could not see. It was natural that, not having any knowledge of the washout, he should leave the horses to follow the road. He had a right to presume that there was no pitfall therein into which they would take him; in other words, that the public officers had done their duty. (Weed v. Village of Ballston Spa, 76 N. Y. 329.) And when the wagon was overturned iuto the water and his foot became fastened, it was but natural that in his fright and anxiety for his own safety and that of his property, induced by his inability to understand the situation, he did not act with that coolness and prudence which would have been required of him under ordinary circumstances.
In alleging the fourth ground of the motion the defendants evidently sought to invoke the exception or eorrollary to the general rule, that contributory negligence is a matter of defense, viz., that when the plaintiff’s own ease raises a presumption of contributory negligence, the burden of proof is immediately upon him to exculpate himself from the suspicion, thus created, of the lack of due care on his own part, which will otherwise be imputed to him. (Kennon v. Gilmer, 4 Mont. 433, 2 Pac. 21; Nelson v. City of Helena, 16 Mont. 21, 39 Pac. 905.) If it be admitted that, had plaintiff refrained from struggling to save himself and his property, he would not have been caught in the brake or suffered injury, it was nevertheless, under the circumstances shown, a question for determination by the jury whether he acted as a reasonably prudent person would in the emergency in which he unexpectedly found himself. (Kennon v. Gilmer, supra.)
We are of opinion, also, that the fifth ground of the motion was not well laid. The question involved was considered by this court in Merritt v. McNally, 14 Mont. 228, 36 Pac. 44, and decided adversely to the contention of defendants. As there pointed out, it is not incumbent upon the plaintiff to allege and prove that defendant Zimmer had funds at his disposal which he could use in order to make the necessary repairs in the road, but that the question of defense based upon such matter must be determined upon an answer. (See, also, Adsit v. Brady, 4 Hill (N. Y.), 630, 40 Am. Dec. 306; Weed v. Village of Ballston Spa, supra.)
This brings ns to the consideration of the question presented by the first ground of the motion. In Adsit v. Brady, supra, Judge Bronson, speaking for the court, said: “When an individual sustains an injury by the misfeasance or nonfeasance of a public officer, who acts or omits to act contrary to his duty, the law gives redress to the injured party by an action adapted to the nature of the case. This principle is so well settled that it is only necessary to inquire whether there be anything in this case to take it out of the operation of the general rule.” The rule thus broadly stated includes nonfeasance or misfeasance with reference to any official duty, whether it is ministerial or discretionary, ®r whether it falls exclusively within the class of those which are due to the public only, as distinguished from those which are due to the private citizen also.
After pointing out the distinction between the different kinds of duties imposed upon public officers, Judge Cooley, with reference to their liability to private suits for nonfeasance or misfeasance in the performance of them, says: “The rale of official responsibility, then, appears to be this: That if the duty which the official authority imposes upon an officer is a duty to the public, a failure to perform it, or an inadequate or erroneous performance, must be a public, not an individual, injury, and must be redressed, if at all, in some form of public prosecution. On the other hand, if the duty is a duty to the individual, then a neglect to perform it, or to perform it properly, is an individual wrong, and may support an individual action for damages.”
In Shearman & Redfield on Negligence, third edition, section 156, the rule is stated thus: “The liability of a public officer to an individual for his negligent acts or omissions in the discharge of an official duty depends altogether upon the nature of the duty as to which the neglect is alleged. Where his duty is absolute, certain and imperative, involving merely the execution of a set task — in other words, is simply ministerial — he is' liable in damages to anyone specially injured either by his omitting to perform the task, or by performing it negligently or un skillfully. On tbe other hand, where his powers are discretionary, to be exercised or withheld according to his own judgment as to what is necessary and proper, he is not liable to any person for a neglect to exercise those powers, nor for the consequences of a lawful exercise of them, where no corruption or malice can be imputed, and he keeps within the scope of his authority. An officer possessing such discretionary powers is spoken of as a judicial or quasi-judicial officer, from the likeness of his discretionary functions to those of a judge who decides controversies between individuals. ’ ’
We apprehend that no court would fail to observe the distinction here pointed out, because it is based upon principles of public policy. It would be intolerable if every public officer were compelled to act or refrain from acting at his peril of a suit for damages by a private citizen, without regard to the nature of the duty involved or the character of the resulting injury. It must, therefore, be the case that unless the particular duty is one the performance of which the individual citizen has a right to demand in his own behalf, or the omission or inadequate performance of which results in special injury to him, he has no right of action for a dereliction with reference to it, by the officer upon whom it is imposed; for in such a case the wrong is public, not private, and must be redressed, if at all, by some remedy invoked on behalf of the public, such as summary removal from office, pr removal by impeachment, or a criminal prosecution under the provisions of law applicable. A reference to a few cases will show that this is the rule established by current authority. As we have said, the statement of Judge Bronson, in Adsit v. Brady, supra, taken literally, would cover every case of official dereliction; yet at the close of the opinion, in answer to the contention of counsel that the defendant had a discretion with reference to the duty involved, and that his neglect should have been charged as willful and malicious, the court said that in the performance of the particular duty he had no discretion. This statement impliedly recognized the distinction pointed out by Cooley and Shearman & Bedfield, supra.
In Garlinghouse v. Jacobs, 29 N. Y. 297, the same court, through Judge Wright, criticised the opinion in Adsit v. Brady as stating the rule too broadly; but in the case of Robinson v. Chamberlain, 34 N. Y. 389, 90 Am. Dec. 713, it was said by Peckham, Judge, with reference to the rule as therein declared: “This is a healthful rule, sound entirely in public policy, if as a rule of law it can be questioned. ’ ’ The ease is cited and approved in Hover v. Barkhoof, 44 N. Y. 113, and later eases. It may be said, however, that the dereliction in question in each of these cases was with reference to a specific duty expressly imposed by statute upon the defendant. In Adsit v. Brady the charge was neglect as superintendent of repairs on canals, to remove an obstruction from the Brie canal, a duty enjoined upon the defendant by statute. In Robinson v. Chamberlain, for a similar reason the defendant who had, under authority of a statute, undertaken by contract to keep a portion of the canals in proper condition and repair, was held for neglect of his duty, upon the theory that, having by his contract assumed to perform a specific duty, he was liable for any negligence resulting in special injury to a private citizen, just as much as a public officer would have been, had the same duty been imposed upon him. In Hover v. Barkhoof the commissioners of a town having sufficient funds in their hands, or obtainable, to repair a defective bridge, were held for neglect to repair, which resulted in damage to plaintiff by a fall of the bridge. In this case the duty was enjoined by statute.
It may well be said that the rule of liability is the same, whether the duty is imposed by statute or arises by implication out of the character of the office and the attendant duty; yet the duty must be clear and certain. In Doeg v. Cook, 126 Cal. 213, 77 Am. St. Rep. 158, 58 Pac. 707, under a charter of a town which imposed upon the board of town trustees and the marshal the duty to keep the streets of the municipality in repair, it was held that these officers were liable to the plaintiff for permitting a culvert to remain open and without guard, by reason of which the plaintiff fell into it and was injured. The court quotes approvingly from Robinson v. Chamberlain, supra, wherein the broad rule as stated in Adsit v. Brady is approved. But the court evidently understood the rule as referring to duties ministerial in character, and not to those which are discretionary.
In County Commissioners v. Duckett, 20 Md. 468, 83 Am. Dec. 557, the commissioners of Anne Arundel county were held liable for an injury caused by a defect in a road because they were charged generally • with the duty of keeping the roads in repair.
In Sells v. Dermody, 114 Iowa, 344, 86 N. W. 326, there was involved the question whether a road supervisor was liable for neglect to repair a road in his district, whereby the plaintiff suffered injury. The court, after an extensive citation of authorities, including American and English cases, held that he was. The following authorities also sustain the rule: Mattson v. Astoria, 39 Or. 577, 87 Am. St. Rep. 688, 65 Pac. 1066; Amy v. Supervisors, 11 Wall. (U. S.) 136, 20 L. Ed. 101; Bennett v. Whitney, 94 N. Y. 354; County Commissioners v. Wilson, 97 Md. 207, 54 Atl. 71, 56 Atl. 596; Pennington v. Straight, 54 Ind. 376; Grider v. Tally, 77 Ala. 422, 54 Am. Rep. 65; McCord v. High, 24 Iowa, 336; 11 Cyc. 412.
In two cases—Merritt v. McNally, supra, and Bair v. Struck, 29 Mont. 45, 63 L. R. A. 481, 74 Pac. 69—this court has recognized and applied the rule, holding public officers liable for nonfeasance or misfeasance, with reference to ministerial duties. In some states the liability of officers having supervision of the public roads is denied. In Worden v. Witt, 4 Idaho, 404, 95 Am. St. Rep. 70, 39 Pac. 1114, the court bases its conclusion that they are not liable, upon considerations of public policy. Where the services required by the statute are compulsory, it is held that liability does not attach, except when declared expressly by the statute. (Thornton v. Springer, 5 Tex. 587.) The holding in these cases is exceptional.
The liability of defendants in this ease, then, is to be determined by reference to the provisions of the Codes defining their duties. These are the following:
The boards of county commissioners must divide their respective counties into suitable road districts. (Rev. Codes, sec. 1356.) The board has general supervision over the highways and must cause to be opened and worked such as may be necessary. It also has power to do whatever in its judgment and discretion may be necessary for the best interests of the roads and road districts in the county; and the road supervisor shall in all things be under the direction and control of the board. (Sec. 1357.) The board must appoint road supervisors. (Sec. 1358.) The supervisor shall be a resident of his district. (See. 1359.) “Under the direction and supervision of the board of county commissioners,” the supervisor must take charge of the roads, keep them clear from obstructions and in good repair, cause banks to be graded, bridges and causeways to be made where necessary and to keep the same in good repair and renew them when destroyed. (Sec. 1360.) If a supervisor neglects or fails to perform the duty imposed by law and such rules and regulations as may be laid down by the board, the board may remove him and appoint another suitable person in his place. (Sec. 1362.) The supervisor must open- or cause to be opened when ordered by the board all highways which have been laid out and established, and must keep the same in good repair ; and if the levy for that purpose is not sufficient, the board may appropriate from the general road tax any amount that may be necessary for the purpose. (See. 1363.) When directed by the board to repair any highway in his district, the supervisor must proceed without unnecessary delay, and for that purpose is empowered to employ laborers, teams and obtain implements. (Sec. 1364.) If at any time during the year a highway becomes obstructed, the supervisor must “upon being notified thereof” forthwith cause the obstruction to be removed, and for this purpose he may order out such number of the inhabitants of the district as may be necessary. (Sec. 1372.) He must cause encroachments upon the highways to be removed. '(See. 1373.) The board may by order direct the county surveyor or any member of the board, or both, to inspect the condition of any highway before payment is made for work thereon. (Sec. 1387.) The board must keep a roadbook, containing a record of all proceedings and adjudications relating to the use, maintenance, change or discontinuance of roads and road districts and relating to road supervisors. (Sec. 2890.)
It thus appears that the agency ultimately responsible for the care of public roads is the board of commissioners. This body acts as a unit. A majority of its members control its action. But this is not a reason why the individual members who are in the majority should not be held responsible for the result of a dereliction of duty. Under the provisions of the statute the general supervision of the. roads, which includes attention to necessary repairs upon those already made as well as the improvement of them, and the opening of new ones, is vested in the board. It must designate suitably districts and appoint a supervisor for each of them. He must act under the requirements of the law and the regulations prescribed by the board, and keep the roads clear of obstructions and in good repair. In case a road becomes obstructed from any cause, upon being notified, that is when he has actual knowledge of the fact or the'circumstances are such that notice must be presumed, he must at once cause the obstruction to be removed. To meet the exigency, ample means are put at his disposal. If he fails in his duty, one of two courses is open to the board, viz., it may order him to do his duty and thus compel performance, or it may remove him and substitute an efficient man in his place. Does the time never come when the duty to pursue one of these courses becomes imperative? Upon making the appointment, may the members of the board close their eyes to conditions which are certain to arise from time to time, demanding efficient action to guard the interests of the public generally and the safety of the individual citizen who had a right to expect them to discharge their duty? May they, knowing that a supervisor is grossly derelict in his duty, devest themselves of all responsibility to the individual members of the community by the claim that they owe service to the general public only, and that their duties are altogether discretionary? We think not. Clearly, the supervisor is liable under the provision of section 1372, supra,; for under it, when an emergency arises calling for action, his duty is made imperative. So, also, when through his dereliction conditions of which the members of the board must have notice are permitted to continue, imperiling the safety of the citizen, the obligation is upon them to act; in other words, to see that their appointee, the supervisor, or one appointed in his stead, discharges his official duty.
Under the facts appearing in the evidence, a prima facie case of liability is made against the defendant Zimmer, for failure to make the repairs by removing the obstruction, or, in case he could not do so, for failure to warn the public of the existing condition; and as against the other defendants, for failing to compel him to discharge his duty. At the trial all of the defendants may be able to show that the conditions were such that, with the means at their disposal, they were unable to make the necessary repairs. But the burden rests upon them to do so, the presumption being that they had such means. But even this would not excuse the omission to take suitable measures to give notice of the obstruction or to provide suitable barriers to prevent a traveler from being injured by it, if the facts show that such was the case.
The judgment is reversed, and the cause is remanded for further proceedings.
Reversed and remanded.
Mr. Justice Smith concurs. | [
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MR. JUSTICE SMITH
delivered the opinion of the court.
On the fourteenth day of August, 1911, the county attorney of Silver Bow county filed an information in the district court of that county, against the above-named defendant, charging as follows: “That during thirty days in the calendar year A. D. 1911, and before the eighth day of August, 1911, in the said county of Silver Bow, state of Montana, there had been bets and wagers made, reported, recorded, and registered upon the results of contests of speed, skill, and endurance of animals upon two certain inclosed racetracks both situated in Silver Bow county, Montana, to-wit, fifteen days upon the racetrack of the Butte Jockey Club and Fair Association, and seventeen days upon the racetrack of the Butte Driving Club, and that each and all of said bets and wagers were made, and all acts done in making, reporting, and recording said bets and wagers were done, within the respective inclosures where the said contests were held and upon the same day the said contest was held, and that thereafter during the said calendar year 1911, to-wit, on the eighth day of August, A. D. 1911, and before the filing of this information, at the said county of Silver Bow, state of Montana, the said defendant, William Gemmell, did willfully and unlawfully make a bet and wager of lawful money with one John Doe, upon the result of a contest of speed, skill, and endurance of animals, to-wit, horses, which said contest was •held upon the said racetrack of the Butte Jockey Club and Fair Association, then and there an inclosed racetrack.” It will be noted that the information charges in effect that thirty-two days’ racing, upon which betting was allowed, had been had in Silver Bow county on inclosed racetracks, prior to the day on which the defendant is alleged to have laid a wager on the result of a horserace held upon the inclosed track of the Butte Jockey Club and Fair Association. The court below allowed a general demurrer to the information, for want of facts therein stated sufficient, to constitute a public offense. The state appeals.
Did the court err in allowing the demurrer, which, under the peculiar «practice in such eases, amounted to entering a judg ment in favor of the defendant? (Rev. Codes, see. 9203; People v. Long, 121 Cal. 494, 53 Pac. 1097.) The question involved is whether it is unlawful to make a wager within an inclosed racetrack upon the result of a horserace held within the same inclosure, after fifteen days’ racing has been had on one inclosed track, in a county of the first class, and seventeen days ’ racing on another such track, in the same county.
The eleventh legislative assembly passed “An Act to prohibit the reporting or recording or registering of any bet or wager upon the result of any contest of speed or skill or endurance of animal or beast, within certain limitations therein stated, and to limit the number of days when such bets or wagers may be recorded, reported or registered, and providing penalties for "the breach of the same.” The Act provided:
“Sec. 1. It shall be unlawful to report or record or register any bet or wager upon the result of any contest of speed or skill or endurance of animal or beast, whether such contest is held within or without the state of Montana, unless said contest is held within an inclosed racetrack or fair-grounds, and said bet or wager is made and all acts done in registering, reporting and recording said bet or wager are done within the inclosure of the racetrack or fair-grounds where such contest is held, and upon the same day such contest is held.
“See. 2. "Whenever, during fourteen days, whether consecutive or not, in any calendar year, there have been bets or wagers reported or recorded or registered upon the result of any contest of speed or skill or endurance of animal or beast upon any inclosed racetrack or fair-grounds, it shall thereafter be unlawful during such calendar year to report or record or register any .wager or bet upon the result of any contest of speed or skill or endurance of animal or beast held within- such inclosure. ’ ’
Section 4 provided a penalty of fine and imprisonment for a violation of the Act. (See Laws 1909, p. 22.)
Subsequently, and at the same session of the legislative assembly, the Act just quoted was amended by the passage of the Act under which the respondent was prosecuted. Section 1 of the Act as amended is the same as section 1 of the Act before amendment, save that the words “make” and “making” are inserted therein before the words “or report” and “reporting,” 'respectively; and section 2 as amended reads as follows:
“Sec. 2. Whenever, during thirty days, whether consecutive or not, in any calendar year in any county of the first class and whenever, during fourteen days, whether consecutive or not, in any calendar year, in any county not a county of the first class, there have been bets or wagers made, or reported or recorded or registered upon the result of any contest of speed or skill or endurance of animal or beast upon any inclosed racetrack or fair-grounds, it shall thereafter be unlawful during such calendar year to make, or report or record or register any Wager or bet upon the result of any contest of speed or skill or endurance of animal or beast held within such inclosure.” (See Laws 1909, p. 122.)
It is contended by the attorney general that the intent of the legislative assembly was to limit wagering on the results of contests of speed, in counties of the first class, to a period of thirty days; and that the construction to be placed upon the Act should be such as to carry this intention into effect; otherwise the statute becomes nugatory. On the other hand, it is argued for the respondent that the statute is plain and unambiguous in its terms and requires no construction. Counsel contend that no question of public policy is involved; that the public policy of the law is that which the legislature has declared to be the law. They contend that the last three words of section 2 of the amended Act, to-wit, “within such inclosure,” refer to an inclosed racetrack or fair-grounds upon which wagering on contests of speed has already taken place, and that the statute simply prohibits betting, for more than thirty days, within the same inclosure. This interpretation of the law, if adopted, would of course result in a decision that, in first-class counties, thirty days of such wagering may take place on one inclosed track, and an additional thirty days on another, and so on, until the calendar year expires. ¥e fully agree with all the rules of statutory construction quoted in the brief of the counsel. They are elementary. But we are invited to examine and consider, also, the history of the legislation, and shall do so.
The Act, both before and after amendment, by section 1, prohibited, and was intended to prohibit: (a) Reporting, recording, or registering any bet or wager on any contest of speed of animals held outside of the state; (b) reporting, recording, or registering any wager upon the result of a contest of speed, skill, or endurance of animals, in the state, unless the contest is held within an inclosed racetrack or fair-grounds and all acts relating to the wager are done on the day of the contest and within the same inclosure. (State v. Rose, 40 Mont. 66, 105 Pac. 82; State v. Sylvester, 40 Mont. 79, 105 Pac. 86.) The legislation was and is commonly referred to as the “anti-poolroom law.” Section 2 of the Act, before amendment, provided inter alia that whenever, during fourteen days in any one year, wagers upon the result of contests of speed of animals had been reported, recorded, or registered upon any inclosed racetrack or fair-grounds, it should thereafter be unlawful, during the remainder of that year, to report, register, or record a similar wager on a contest of speed held within such inclosure. It will be noted that this Act applied' to all counties alike, and that it is silent as to “making” a bet or wager, except in so far as section 3 declares that all who aid or abet in any transaction prohibited by sections 1 and 2 are deemed to be principals. If the Act had remained upon the statute books, unamended, the contention of the respondent might perhaps have been upheld. "What, then, was the purpose of the legislature in amending it? That purpose was obviously fourfold, viz.: (1) To continue in force section 1, prohibiting poolselling on races held outside of the state, and also within the state outside of an inclosed racetrack or fair-grounds; (2) to enable Silver Bow county, the only county of the first class in the state, to hold race meetings at which wagers were laid, on inclosed tracks, for more than fourteen days, to-wit, thirty days; (3) to declare “making” a wager an offense without invoking the provisions of section 3 of the Act; and (4) to limit the privilege of making, reporting, registering, or recording wagers on the results of contests of speed, held within the state, to a period of thirty days in counties of the first class, and fourteen days in all other counties. The words “within such in closure,” found in the last line of section 2 of the Act as amended, do not refer to the particular in closure within which wagers have already been made, recorded, registered, or reported; these words are simply descriptive of the nature of the place, or the kind of place, in which wagering on contests of speed is to be permitted' under any circumstances, to-wit, an inclosed racetrack or fair-grounds. Construed in the light of the history of the Act and the phraseology of the Act itself, they mean the same as “within any inclosure,” or “within any such inclosure,” or “within such an inclosure.” They, in a certain sense, qualify and explain the word “contest”; that is to say, the contest must be held upon an inclosed racetrack or fair-grounds in order that the wagering shall be lawful within the meaning of the Act. The interpolation of the word “county” in the amended Act changed the entire meaning and scope thereof, and the legislature undoubtedly so intended. The presumption is that section 2 of the Act, before amendment, did not sufficiently express its intention to place a definite limit on the privilege of laying wagers on horseraces and other like contests. The evident purpose was to amend the so-called “anti-poolroom” law so as to make it clear that the privilege of laying wagers on the results of contests of speed was not alone limited to wagering in a particular inclosure for a certain number of days, but that the privilege was limited to thirty days in counties of the first class, and to f ourteen days in other counties, under any circumstances. In other words, it was the intention to prohibit and make punishable the act of which this respondent was accused. This construction of the statute, while contrary to the argument advanced by counsel for the appellant in their printed brief, is in strict accord with all the authorities therein cited.
The attorney general has called our attention to the case of State v. Dycer, 85 Md. 246, 36 Atl. 763. If it be permitted to enter upon an inquiry concerning the motives which prompted the legislative body to enact this class of legislation, as evidenced by the general scope of the statute, this case is, perhaps, authority for his position. The Maryland court said: “The comprehensive, absolute, and unqualified expressions used by the legislature show that they regarded this species of gambling as a serious evil, and that they desired to suppress it. But for reasons which they considered satisfactory they saw fit to permit it under certain circumstances for the space of thirty days in any one year. Now, when they made in a guarded manner this exception to the general scope and operation of [the] statute, they certainly did not intend to nullify its provisions altogether. They conceded, to certain persons whose tastes and wishes they desired to gratify, a license under certain prescribed conditions for the space of thirty days in a year. During this period, if they complied with the statute, they would be exempt from penalties; its operation would be suspended so far as their actions were concerned. But it was not intended that they should have the power to free themselves entirely from its authority. If such were the case, the statute would be abortive and nugatory. If an owner of a racecourse can extend the exemptions of the statute to two racecourses, he has the same right to a dozen, or twenty, or as many more as he chooses to have. And consequently, instead of having a remission of the penalties of the law for only thirty days in a year, he would be beyond its control during the entire period. That is to say, it would not bind him at all, or in any respect. And a few persons co-operating together might with impunity carry on in every county in the state, without constraint or limit, the gambling denounced by the statute. We think that it would be an irrational construction, if we should give to an exception, which by its terms is limited in time and place, the effect of overthrowing the entire body of the law.”
The district court was in error in allowing the demurrer, and its decision thereon is reversed. The demurrer should have been overruled.
Reversed.
Mr. Chief Justice Brantly and Mr. Justice Holloway concur. | [
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] |
MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
The information herein recites that “Mike Larson is accused by the deputy county attorney of Roosevelt county, Montana, by this information of the crime of burglary,” etc., and it is signed, “Erick Mourn, Deputy County Attorney of Roosevelt County.” Defendant was convicted, and has ap pealed from the judgment and from an order denying him a new trial.
1. It is insisted that the deputy county attorney did not have authority to present an information in his own name, that he could act officially only in the name of his principal, and that the information in question is ineffectual for any purpose. The propriety of the deputy’s action might be subject to criticism from the standpoint of the ethics of his profession, but his authority so to act is hardly open to question from a legal standpoint.
Section 418, Revised Codes of 1921, provides: “Powers of Deputies. — In all cases not otherwise provided for, each deputy possesses the powers and may perform the duties attached by law to the office of his principal.”
In section 570, Meehem’s Public Offices and Officers, it is said: “Where a public officer is authorized to appoint a deputy, the authority of that deputy, unless otherwise limited, is commensurate with that of the officer himself, and, in the absence of any showing to the contrary, it will be presumed. Such a deputy is himself a public officer, known and recognized as such by law. Any act, therefore, which the officer himself might do, his general deputy may do also.” (See, also, State v. Crouch, 70 Mont. 551, 227 Pac. 818; State v. Riddell, 33 Wash. 324, 74 Pac. 477; Canada V. Territory, 12 Okl. 409, 72 Pac. 375.)
At most, the act of the deputy was a mere irregularity (State v. Wilkins, 118 Kan. 160, 234 Pac. 45), which could not affect any substantial right of the defendant, and section 11853, Revised Codes, declares: “No indictment or information is insufficient, nor can the trial, judgment, or other proceedings thereon be affected by reason of any defect or imperfection in matter of form which does not tend to the prejudice of a substantial right of the defendant upon its merits.”
2. It is insisted that the evidence does not sustain the ver diet, and it is true that there is not any direct evidence of defendant’s guilt; but the state’s case does disclose that between' December 2 and December 7, 1923, an automobile tire — rim, casing and inner tube — and three chains were stolen from a car belonging to the prosecuting witness. Thorvald Johnson; that at the time Johnson discovered that his property had been taken he also discovered on the ground near his ear a letter addressed to the defendant. He procured a search-warrant to be issued, and accompanied the deputy sheriff in searching the defendant’s premises, where the stolen property, except the rim, was found. Johnson identified positively the easing, inner tube and one chain, and advanced a plausible reason for his identification. At the time the articles were taken they were on Johnson’s automobile, and the tire, used as an extra, was fastened to the rear of the ear by a clamp, and the car was in a building, a portion of which was used as a garage. The opening into the building was without a door shutter, but in lieu thereof a canvas curtain was attached above the doorway and extended nearly to the ground, covering the opening to such extent that a person could not enter the building without raising the curtain or moving it to one side. The letter addressed to the defendant was found inside the building and immediately behind the car, and the clamp which held the tire had been twisted to one side.
Section 11346, Revised Codes, defines burglary as follows: “Every person who enters any house, room, apartment, tenement, shop, warehouse, store, mill, barn, stable, outhouse, or other building, tent, vessel, railroad ear, with intent to commit grand or petit larceny or any felony, is guilty of burglary,” and section 11349 declares: “The word ‘enter,’ as used in this chapter, includes the entrance of the offender into such house, room, apartment, tenement, shop, warehouse, stable, outhouse, or other building, tent, vessel, or railroad car, or the insertion therein of any part of his body, or of any instru ment or weapon held in Ms band, or used or intended to be used, to threaten or intimidate tbe inmates, or to detach or remove tbe property.”
It is idle to argue that tbe circumstances disclosed by tbe evidence do not warrant a finding that defendant entered tbe building with tbe intention to commit larceny.
3. Error is predicated upon tbe refusal of tbe trial court to give defendant’s offered instructions 3 and 4. As 4 includes everything in 3 as well as other matters, it alone will be copied. It follows: “I further charge you, gentlemen of tbe jury, that before you can find tbe defendant guilty tbe state must establish by competent evidence to your satisfaction, beyond a reasonable doubt, every essential element of tbe crime of burglary, as that crime is defined in these instructions. One of tbe essential elements of the crime of burglary as charged in tbe information is that tbe defendant not only entered tbe barn, but that bis entry, if any, was with intent to steal something. If, therefore, tbe defendant’s intent at tbe time of entering tbe barn, if be did enter, was not to steal, but under tbe belief that be bad a right to enter and obtain some property to which be bad a right, or if you have any reasonable doubt as to what bis intent was, then it is your duty to find tbe defendant not guilty.”
Tbe first portion of tMs instruction was covered fully by other instructions given by tbe court.
Tbe court also instructed tbe jury to acquit tbe defendant unless it appeared from tbe evidence beyond a reasonable doubt that (1) be entered tbe building (2) “with tbe particular intent at tbe time to commit tbe crime of larceny.”
Tbe tendered instruction assumes that tbe defendant may have entered tbe building, but without any criminal intent, It is elementary that tbe instructions must be applicable to tbe case made by tbe evidence (Territory v. Rowand, 8 Mont. 110, 19 Pac. 595; State v. Trosper, 41 Mont. 442, 109 Pac. 858; State v. Smith, 57 Mont. 563, 190 Pac. 107), and since tbe state’s evidence tended to prove an entry with a criminal intent, and since defendant denied that he entered the building at all, the latter portion of the proposed instruction was altogether inapplicable, and the instruction itself was refused properly.
No error appearing, the judgment and order are affirmed.
Affirmed.
Mr. Chief Justice Callaway and Associate Justices Galen, Stark and Matthews concur. | [
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MR. JUSTICE MATTHEWS
delivered the opinion of the court.
The complaint herein is in the usual form in an action to quiet title in plaintiffs to certain real estate described; it is therein alleged that each of the defendants claims some interest in the property adverse to plaintiffs, but that such claims are “without right.” . The plaintiffs were, at the time of the commencement of the action, minors, and therefore appeared by guardian ad litem.
The Belgrade Company, Limited, demurred to the complaint, but, on the demurrer being overruled, failed to plead further, and its default was duly entered. The Farmers’ Bank of Belgrade, by affirmative allegations in its answer, claimed a lien upon the property described in the complaint, by reason of a deficiency judgment entered October 20, 1922, in a foreclosure proceeding against other property of its judgment debtors, W. J. Hale and Rose L. Hale, parents of the plaintiffs, and further alleged that the deed under which plaintiffs claim title, and which was executed on October 18, 1922, by Rose L. Hale, was without considera tion moving from plaintiffs and was wholly voluntary, sham and fictitious, and was given for the purpose of concealing the property of the said Rose L. Hale and to hinder, delay and defraud this defendant and her other creditors.
The cause was tried to the court without a jury, and resulted in a judgment and decree quieting title to the property in the plaintiffs, and from this judgment the defendant Farmers’ Bank of Belgrade has appealed.
Counsel for plaintiffs has filed herein a motion to strike from the transcript on appeal' the bill of exceptions con- tained therein, upon the grounds: (1) That, as the time for the preparation and presentation of the bill was extended by stipulation and not by order of court, the court was without jurisdiction to settle the bill. (2) That the bill was settled without the county in which the trial was had.
1. In support of the first ground stated, counsel cites O’Donnell v. City of Butte, 72 Mont. 449, 235 Pac. 707. In that case this court held that “on the expiration of the time allowed by statute (whether original or extended) the court loses jurisdiction to settle or sign the bill,” and that a bill “presented, settled, and signed after the expiration of the time * * * is a nullity, and cannot be considered on an appeal, * * * even though counsel should, by consent or written stipulation filed in the appellate court, agree that it shall be considered.” Counsel asserts that, while he does not withdraw from his stipulation, the latter clause of the above quotation prohibits counsel from stipulating for an extension of time. The situation here presented, however, differs materially from that shown in the record in the O’Donnell Case. Here it is admitted that the stipulation for extension of time was entered into and filed before the expiration of the statutory time, while the declaration found in the O’Downell Case, relied upon by counsel, was made with references to, and applies only to, a reinvestiture, of jurisdiction after the trial court had lost jurisdiction.
Stipulations are recognized by courts generally, and may govern in procedural matters so long as counsel do not thereby attempt to confer jurisdiction where none exists, or where jurisdiction has theretofore been lost, or to determine thereby questions of law or the validity of statutory provisions, or to affect rights other than those existing between the parties to the suit in which the stipulation is filed; they may go so far as to waive statutory provisions or irregularities. (36 Cyc. 1285.)
Nothing said in the O’Donnell Case indicates that counsel may not, while the court still retains jurisdiction, waive the necessity of securing a court order for further time, and, having done so, the plaintiffs will not be heard to question the sufficiency of the bill, settled and allowed pursuant to the stipulation entered into on their behalf.
2. The contention that the bill of exceptions was not set- tied within the jurisdiction in which the case arose and the trial was had is not borne out by the record; therefore we are not called upon to determine whether, under the provisions of Chapter 53, Laws of 1923, declaring the jurisdiction of district judges in certain judicial matters coextensive with the state of Montana, a bill of exceptions may be settled outside of the county in which the cause was tried.
■Section. 9390, Revised Codes of 1921, provides the steps to be taken in the settlement of a bill of exceptions, among which are that the “judge must designate the time and place at which he will settle the bilí” and that “at the time designated, the judge must settle the bill.” After prescribing the manner of settlement, the section declares that, “when settled, the bill must be signed by the judge or referee with his certificate to the effect that the same is allowed, and shall then be filed with the clerk.”
The record discloses that all necessary steps were taken as directed by the statute; that there were two bills of exceptions presented in the ease and amendments thereto filed, and that, on the day designated, the judge who tried the ease* sat in open court in Gallatin county, counsel for plaintiff and defendant being present, and settled the bills of exceptions, determined what should be included therein, and passed upon the amendments offered. He then- directed that the two bills be incorporated in one, with the amendments. This clerical work requiring time, the judge returned to his home in Anaconda where, a few days later, on receipt of the bill in the form in which it was settled, he signed the bill and attached thereto his certificate as required. Thus it appears that the judicial function was performed within Gallatin county; no rights were lost by plaintiffs by this procedure, and the bill as settled and signed was exactly what it would have been had it been in shape for signature of the judge at the time it.was settled.
The signing was no part of the settlement of the bill, and the certificate was merely evidence of what was done at the time of the settlement. Mr. Justice Holloway, speaking for the court in State ex rel. Lindsey v. Ayers, 52 Mont. 62, 155 Pac. 276, said: “The legal distinction between settling and signing a bill of exceptions has been adverted to frequently. (Montana L. & P. Co. v. Howard, 10 Mont. 296, 25 Pac. 1024.) By ‘settlement’ is meant the elimination of all unnecessary matter and the incorporation of all matter necessary to present the exceptions as briefly as possible.”
The statute requires only that the bill shall be settled at the time and place designated. It then requires that the bill, as settled, be signed by the judge and his certificate attached thereto, which action shall follow as soon after the bill is settled as possible; but these are acts over which the party presenting the bill has no control, and a failure' on the part of the court to follow the statute cannot defeat the rights of such party. A note to Cincinnati Traction Co. v. Ruthman, 85 Ohio St. 62, 96 N. E. 1019, found in Ann. Cas. 1913A, 914, and citing many authorities, reads: “It has been stated as a general proposition of law that, where an individual in the prosecution of a right does everything which the law requires him to do, and he fails to attain his right by the misconduct or neglect of a public officer, the law will protect him. * * * It is by virtue of this principle that it is held that, where a bill of exceptions is presented to the judge for his signature, within the time required by law, and [he] neglects to sign [it], * * * the bill of exceptions will not be rendered invalid, and the signing of the same nunc pro tunc is proper.”
Even though the action of the judge was irregular — which we do not hold it to be, under the above authorities — such action does not warrant the action sought, and the motion to strike is therefore denied.
3. Beverting to the question presented by the appeal. The record contains no substantial conflict in the evidence. The plaintiffs introduced documentary evidence of title in Bose L. Hale on October 18, 1922, and transfer on that day to plaintiffs, and rested their case. The defendant then proved its deficiency judgment, the issuance of execution thereunder and levy upon and sale of “all the right, title and interest of” W. J. Hale and Bose L. Hale in and to the property in controversy, to defendant, and the subsequent issuance to it of a sheriff’s deed therefor. For the purpose of proving its allegations concerning the transfer, it relied upon the testimony of Bose L. Hale. The facts brought out in her examination and cross-examination are substantially as follows :
W. J. Hale and Bose L. Hale acquired this property in 1912; the consideration therefor being $19,500. Of this amount they secured $7,000 from one H. J. Stevens, an uncle of Bose L. Hale, who lived with the Hales for years, giving no security therefor: $11,000 was evidently secured from the Drake-Ballard Company, and a mortgage given on the property for the payment thereof. Thereafter W. J„ Hale and Bose L. Hale borrowed money from time to time for the payment of interest on the Drake-Ballard mortgage, for taxes on the property, and for other purposes, from Stevens, without giving to him any security for its repayment. In 1920 W. J. Hale quit-claimed his interest in the property to Bose L. Hale.
In October, 1922, the Hales were indebted to Stevens, on unsecured notes and claims, in excess of $14,000. Stevens, who was then old, sick and believed to be on his death-bed, demanded payment or security, but the Hales were without money or property other than this land and its appurtenances. Bose L. Hale offered to deed the property to him, subject to the Drake-Ballard mortgage, but Stevens stated that, as he was about to die, he did not want the .property. He then offered to cancel the entire indebtedness if Bose L. Hale would so deed the property to his three nieces, these plaintiffs, stating that he would thus be enabled to fulfill his promises to leave them something at his death. This Bose L. Hale agreed to do; whereupon Stevens told her she could get the notes from the bank and destroy them on executing the deed. Mrs. Hale, under this authority, secured the notes, took them to the office of Walter Aitken in Bozeman, and there executed and delivered the deed as agreed, two days prior to the entry of defendant’s deficiency judgment. She did not, however, destroy the notes, but left them with Mr. Aitken, who produced them at the trial. She testified that the deed was executed and delivered for the purposes recited and with no intention of defrauding defendant.
Before the death of Stevens, his deposition “to perpetuate testimony” was taken and was on file in the case at the time of trial. Had there been any question as to the version given of the transaction by Mrs. Hale, the deposition could have been produced, but, as it was not introduced in evidence, we assume that it would have corroborated rather than controverted her testimony.
During the examination of Mrs. Hale, defendant asked leave' to amend its answer by alleging that at the time of the conveyance both W. J. Hale and Rose L. Hale were insolvent and had no other property out of which defendant’s deficiency judgment could have been satisfied. The court agreed to grant the request on terms, whereupon it was withdrawn. Thereafter the defendant proved, over the objection of plaintiffs, that at the time she conveyed the property, Rose L. Hale was insolvent and had no other property out of which defendant could have satisfied its deficiency judgment, and, without objection, made like proof as to W. J. Hale.
In its decision, the court found that, by deed duly executed and delivered on the eighteenth day of October, 1922, Rose L. Hale, then the owner thereof, conveyed the property in question to the plaintiffs, her minor daughters; that at said time the “plaintiffs paid to the said Rose L. Hale no money or other valuable consideration therefor, and the said deed was executed and delivered by the said Rose L. Hale to the plaintiffs herein in consideration of love and affection, and for no other consideration”; that at said time “the said Rose L. Hale was largely indebted and, among others, was indebted to the defendant the Belgrade Company, Limited, a corporation, and also to the defendant Farmers’ Bank of Belgrade, on the demand for which the deficiency judgment mentioned in these findings and in the answer of the Farmers’ Bank of Belgrade, was made and given.” No further finding was made as to the financial standing or property holdings of the grantor.
Both the plaintiffs and the defendant filed written objections to the findings of fact and conclusions of law as filed. The defendant contended that the court should have found that both Rose L. Hale and W. J. Hale were insolvent and had no other property out of which its deficiency judgment could be satisfied, and that, with this finding made, a finding that the deed was fraudulent and void would have necessarily followed. The plaintiffs attacked the finding that the deed was made in consideration of love and affection alone, and insisted that, on the testimony regarding the Stevens indebtedness, the court should have found that the conveyance was made for a good and sufficient consideration. The court by separate orders overruled the objections of both plaintiffs and defendant.
Defendant’s specifications of error challenge the judgment upon the ground that the court should have allowed the amendment of its answer and, upon the pleadings as amended and the proof adduced, found as indicated in its objections to the findings.
'Section 8603, Revised Codes of 1921, provides that “every transfer of property * * # with the intent to delay or defraud any creditor or other person of his demands, is void against all creditors of the debtor.” But section 8605 declares that “a creditor can avoid the act or obligation of his debtor for fraud only where the fraud obstructs the enforcement, by legal process, of his right to take the property affected by the transfer or obligation.” And section 8606 declares that “the question of fraudulent intent is one of fact and not of law.” Under these provisions it becomes necessary for the party seeking to invalidate a transfer to allege and prove that the debtor was, at the time the conveyance was made, insolvent and that the debtor had no other property out of which his claim could 'be satisfied or enforced by legal process. (Security State Bank v. McIntyre, 71 Mont. 186, 228 Pac. 618.)
Counsel for defendant contends that the allegations of its answer sufficiently alleged insolvency to warrant the introduction of the evidence thereof, that the evidence established the fact of insolvency, and that the court should have permitted an amendment of the answer to conform to the proof and there upon should have included a finding in conformity therewith in its findings of fact.
For reasons hereinafter stated, it is not necessary to go fully into the question of the sufficiency of the answer in this respect, but for the purpose of this discussion only we will assume that counsel is correct in the position taken, and consider the evidence as properly admitted under a sufficient pleading.
A conveyance made in consideration of natural love and affection alone is to be treated, merely as voluntary. (Security State Bank v. McIntyre, supra.) We would have then, under the proof adduced, conceding the allegation and proof of insolvency, a case where an insolvent debtor, on the eve of the entry of judgment against her, transferred to near of kin, by a mere voluntary conveyance, the only property out of which the judgment creditor could, on securing its judgment, collect such judgment. Such a decision on the part of the trial court would warrant but one judgment — i. e., that the conveyance was fraudulent and void (Security State Bank v. McIntyre, supra; Hart-Parr Co. v. Schafer, 73 Mont. 429, 236 Pac. 675) — and, if it appeared from the record that the trial court was justified in making findings as suggested on each of the several elements involved in the above statement, the record would compel a reversal of the judgment.
4. However, the plaintiffs have made cross-assignments of error based on the finding that the conveyance was made in consideration of love and affection and was without other consideration, and, if the record discloses that error was committed in this respect, and that, except for such error, the plaintiffs would be entitled to prevail, regardless of the proof of insolvency, the error committed against the appellant is compensated by that committed against the respondents and the judgment must be affirmed. (State ex rel. La France Copper Co. v. District Court, 40 Mont. 206, 103 Pac. 721; In re Murphy’s Estate, 43 Mont. 353, Ann. Cas. 1912C, 380, 116 Pac. 1004.)
Section 9394, Revised Codes of 1921, provides: “Hereafter all district courts and judges, on settlement and allowance of any bill of exceptions at any stage of the trial of a cause, shall, upon demand of either party, or, in the discretion of said court or judge upon its or his own motion, incorporate into such bill of exceptions all rulings, or orders, or proceedings made in the cause against either of the parties, affecting the substantial rights of either, together with the objections and exceptions thereto properly made and reserved, and the same shall be settled and allowed as a part of such bill.” Section 9751 then directs that: “Whenever the record on appeal shall contain a bill of exceptions or statement of the case properly settled, setting forth any order, ruling or proceeding of the trial court against the respondent, affecting his substantial rights on the appeal of said cause, together with the objection and exception of such respondent propeiiy made, and reserved, settled and allowed in such bill of exceptions or statement, the supreme court on such appeal shall consider such orders, rulings, or proceedings, and the objections and exceptions thereto, and shall reverse or affirm the cause on said appeal according to the substantial rights of the respective parties, as shown upon the record. And no cause shall be reversed upon appeal by reason of any error committed by the trial court against the appellant, where the record shows that the same result would have been attained had such trial court not committed an error or errors against the respondent.”
Counsel for plaintiffs has, by his cross-specifications of error, brought his case squarely within the provisions of the above sections. (See Cook v. MacGinniss, 72 Mont. 280, 233 Pac. 129.)
The presumption is that there w^as a good and sufficient consideration for the deed. (Sec. 10606, subd. 39, Rev. Codes 1921.) The plaintiffs were under no obligation to show the actual consideration, as the burden rested upon defendant to show a want of consideration sufficient to support the instrument. (Sec. 7513, Id.)
The testimony of Rose L. Hale,, as a witness for the defendant, respecting her indebtedness to and agreement with her uncle, M. J. Stevens, stands uncontradicted and unimpeached in the record; there is nothing in the court’s findings to indicate that the presiding judge did not believe that she was, in this connection, telling the truth. This testimony did not differ in its nature from the remainder of her testimony, on which the court, in fact, made its. findings, and, while this court has heretofore said, “It is a wild conceit that any court of justice is bound by mere swearing; it is swearing credibility that is to conclude its judgment” (Casey v. Northern Pac. Ry. Co., 60 Mont. 56, 198 Pac. 141), since the court did credit the testimony of this witness in other matters, there is no reason to presume that it did not credit her testimony on this subject. This undisputed evidence should have been considered by the court and a finding made thereon, as the consideration of “love and affection” found by the court was not sufficient to support the judgment.
In this state “a debtor may pay one creditor in preference to another, or may give one creditor security for the payment of his demand in preference to another” (sec. 8601, Rev. Codes 1921), provided, of course, the creditor thus discriminated against is not a preferred creditor (Aetna Acc. & L. Co. v. Miller, 54 Mont. 377, L. R. A. 1918C, 954, 170 Pac. 760). This court has never 'been called upon to declare that the above provision applies to a transfer of property by an insolvent debtor, but the section is sufficiently broad to include all debtors, and in California, where they have the identical statute (sec. 3432, Civ. Code of California), it has been repeatedly held that the provision applies equally to solvent and insolvent debtors, the court declaring that: “A conveyance, giving such preference, is not fraudulent, though the debtor be insolvent, and the creditor aware, at the time, that it will have the effect of defeating the collection of other debts.” (Heath v. Wilson, 139 Cal. 362, 73 Pac. 182, and eases cited therein.)
The rule is announced in Corpus Juris as follows: “An actual preference of a valid debt is not rendered fraudulent by the fact that it was made and accepted with the intent to defeat a judgment or execution against the debtor. The fact that a transfer is made by an insolvent debtor on the eve of rendition of judgments against him is at most a badge of fraud; and when it appears that the transfer is a sale to a creditor in payment of a debt admitted to be justly due, and for a full and fair price, and that the debt is thereby discharged, all presumption of fraud arising from pendency of the suit is thereby removed.” (27 C. J. 634.)
While transactions between near relatives are subject to the most rigid scrutiny, the fact that such relationship exists between the grantor and grantee, is not itself a “badge of fraud.” (12 R. C. L. 637; Noyes v. Ross, 23 Mont. 425, 75 Am. St. Rep. 543, 47 L. R. A. 400, 59 Pac. 367; Wilson v. Harris, 21 Mont. 374, 54 Pac. 46; Security State Bank v. McIntyre, above; Hart-Parr Co. v. Schafer, above.)
This defendant was not in the position of a creditor under the Bankruptcy Act (U. S. Comp. Stats., sees. 9585-9656), seeking to have a conveyance set aside that all creditors might share in the proceeds of a debtor’s property, but is seeking the aid of a court of equity to enable it to secure the satisfaction of its debt at the expense of one who, by his foresight and industry, has first secured an advantage. If, therefore, the transfer had been made directly to Stevens, there is no question but that such conveyance would be held valid as against the attack made upon it by the defendant.
Does the fact that Stevens, by the cancellation of the debtor’s obligations to him, secured the transfer of property to third persons, without consideration moving from them to the debtor, render the transaction invalid? The question can only be answered in tbe negative. While an obligation to pay money is ordinarily extinguished by payment of the amount due to the creditor (secs. 7424 and 7429, Bev. Codes 1921), “if a creditor * # * at any time directs the debtor to perform his obligation in a particular manner, the obligation is extinguished by performance in that manner, even though the creditor does not receive the benefit of such performance” (sec. 7427, Id.).
In addition to the statute quoted, not only the statute defining a “good consideration,” but the provisions treating the subject of “accord and satisfaction” sanction a conveyance to a third party in satisfaction of an obligation; that is to say: “Any benefit conferred, or agreed to be conferred, upon the promisor, by any other person, to which the promisor is not lawfully entitled, or any prejudice suffered, or agreed to be suffered, by such person, other than such as he is at the time of consent lawfully bound to suffer, as an inducement to the promisor, is a good consideration for a promise.” (See. 7503, Bev. Codes, 1921.) “An accord is an agreement to accept, in extinction of an obligation, something different from or less than that to which the person agreeing to accept is entitled.” (Sec. 7456, Id.) And “acceptance by the creditor of the consideration of an accord extinguishes the obligation, and is called satisfaction.” (Sec. 7458, Id.) “The phrase ‘accord and satisfaction’ as generally known and applied in the law and under the definitions of our statute means the substitution of a new agreement in satisfaction of an obligation, different from the original rights existing under an antecedent liability.” (Nelson v. Young, 70 Mont. 112, 224 Pac. 237.)
While Bose L. Hale was not bound, under her original obligation, to part with title to the property, and Stevens was not bound to accept in satisfaction thereof anything other than payment of the full amount, with these original rights in mind Stevens agreed to accept, in lieu of the payment to which he was entitled, a conveyance of this property to the plaintiffs in extinction of the obligation of the grantor* to him, and Rose L. Hale thereupon parted with title to her property in consideration of that extinction of the obligation, which consideration was accepted by Stevens, the creditor, in full satisfaction of his demands.
It appears from the record that the amount of Stevens’ claim was not disproportionate to the market value of the land subject to the Drake-Ballard mortgage, and therefore the court erred in finding that the property was conveyed for no other consideration than love and affection; it should have found that the conveyance was made for.a valuable and adequate consideration. On such finding being made, the plaintiffs would be entitled to the judgment as made and entered, regardless of whether the grantor was, at the time of the transfer, solvent or insolvent, or whether she, at the time, had any other property out of which the defendant could have satisfied its deficiency judgment, and therefore, if error was committed with respect to the subject of insolvency, such error was compensated by the error committed against the plaintiffs on the subject of consideration.
5. The decree entered is supported and justified 'by the evi dence, and is sufficient, without modification; it is therefore immaterial what reasons were assigned for the conclusion reached, or that the result was arrived at on a wrong theory. (Lee v. Laughery, 55 Mont. 238, 175 Pac. 873; Lowry v. Carrier, 55 Mont. 392, 177 Pac. 756; Minneapolis Machinery Co. v. Thomas, 54 Mont. 132, 168 Pac. 40; State v. Rocky Mt. Elevator Co., 52 Mont. 487, 158 Pac. 818.)
The judgment is affirmed.
Affirmed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Stark concur. | [
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ME. JUSTICE STAEK
delivered the opinion of the court.
The plaintiffs, copartners under the name of Hunt & White, brought this action against the defendant, a corporation, to recover the sum of $5,346.15, alleged to be due them for running, pasturing and grazing certain cattle for the defendant on their range in Custer county.
The complaint alleges that between April 1, 1923, and June 15, 1923, the defendant turned over to plaintiffs 2,300 head of cattle, under an agreement that they were to be grazed and cared for by them until the fifteenth day of October, 1923. Before the cattle were turned over to the plaintiffs, the parties had a verbal agreement concerning them which was subsequently reduced to a written contract and duly executed on June 29, 1923. Among other things, this contract provided that the cattle should be rounded up for redelivery to the defendant whenever it wished, provided, however, that they should all be gathered up and redelivered not later than October 15, 1923.
It is alleged that all of said cattle were rounded up, gathered, and ready for delivery to defendant prior to October 15, 1923, and the charges for the care of all of them, except 22 head of cows and 158 head of steers, duly paid, and the balance due to plaintiffs for the grazing of these cows and steers under the contract of June 29, 1923, is alleged to be $339.40. The com plaint then sets out: “That at the time the said cattle were rounded up and gathered as aforesaid, and on or immediately prior to the fifteenth day of October, A. D. 1923, it was further agreed by and between the defendant corporation and the plaintiffs that, in addition to the 22 head of cows, which are hereinbefore referred to, the plaintiffs were to retain 865 head of said cattle, and which, together with the 22 head of cows, were to be run, cared for, pastured, and grazed by the said plaintiffs for the said defendant from October 15-, 1923, in accordance with said agreement made on or about October 15, A. D. 1923, aforesaid, and as is hereinafter alleged.” And in the next paragraph says: “That under and by virtue of the said agreement, made and entered into on the fifteenth day of October, A. D. 1923, it was expressly understood and agreed between the plaintiffs and the defendant corporation that the plaintiffs should continue to run, care for, pasture, and graze the said 865 head of cattle and the 22 head of cows, ’ ’ following which allegation the other terms of the contract are stated, including the length of time it was to continue, the method of gathering the cattle, the compensation to be paid and the time of payment, and that under said contract the plaintiffs did run, care for, pasture and graze the 22 head of cows from October 15, 1923, to January 15, 1924, and 865 head of cattle from October 15, 1923, up and including the first day of October, 1924. The facts showing plaintiffs’ compliance with all the terms, provisions and conditions of the contract of October 15, 1923, are set out in detail, and judgment is asked against the defendant for the sum of $399.40, alleged to be due under the original contract, and $5,006.75, alleged to be due under the contract of October 15, 1923, with interest.
The defendant’s answer admitted the contract of June 29, 1923, and that it agreed to pay the plaintiffs for the running, earing for, pasturing and grazing of 2,300 head of cattle until the termination of said agreement, as alleged in the complaint, alleged that prior to October 15, 1923, approximately 2,120 head of cattle were rounded up ready for delivery to the de fendant, and that the full amount due to the plaintiffs for the running, pasturing and grazing thereof was paid to the plaintiffs, and denied all the other allegations of the complaint.
The cause was tried to a jury. To sustain the allegations of their complaint, the plaintiffs introduced evidence tending to establish the fact that, under the written contract of June 29, 1923, there was due to them from the defendant the sum of $339.40 for the grazing of the 22 head of cows and 156 head of steers.
With reference to the transactions between the parties after the expiration of the term of the written agreement of June 29, 1923, the plaintiff Sherman Hunt testified that, prior to the round-up of the cattle in October, 1923, for delivery to the defendant, as provided in the written contract, he had a conversation with one Colvin, the manager of the defendant, in which the latter said he wanted the plaintiffs to- keep about 1,000 head of steers for another year, but no final arrangements were then made; that some time between the 1st and the 15th of October, 1923, when plaintiffs and defendant were engaged in rounding up the cattle, with their headquarters near the head of Spring Creek, the witness sent for Colvin to come over and complete the arrangements for keeping the cattle mentioned in the previous conversation between them. The manager came over as requested, and stated that the defendant did not have feed for the cattle at the home place, and thereupon it was agreed between these parties that the plaintiffs should keep the portion of the cattle to be selected by the plaintiffs and a representative of the defendant company, as the ones that would winter there on plaintiffs’ range; that for such services the plaintiffs should receive fifty cents per head per month, one dollar per head to be paid in advance, one dollar per head on January 1, 1924, and on May 29, 1924, all that was then earned was to be paid, and that the balance should be paid when final delivery of the cattle was made to the defendant.
The plaintiffs were also running certain cattle on their range known as the S H cattle, and it was agreed that the cattle left on the range by the defendant under this last-mentioned arrangement should be rounded up at the time the S H beef cattle were rounded up the following year. This witness also testified to other details of the agreement, and stated that immediately following the arrangement he and the defendant’s manager went to the plaintiff "White, who was at a corral about forty feet distant, recited to him the agreement which they had made, and that he then assented thereto. The witness then detailed the rounding up of the cattle, the selection by representatives of the parties of the ones which were to be turned back and kept by the plaintiffs under the new arrangement, and facts tending to show that plaintiffs had complied therewith, but that defendant had not paid them therefor.
On the cross-examination of this witness, referring to the oral agreement of October, 1923, the following questions were asked and answers given: “Q. You saw Mr. Colvin quite often subsequently to the entering into this oral contract; was anything ever said about reducing the terms of the oral agreement to writing? A. Yes, sir. Q. And did you have any agreement that it would be reduced to writing? A. We did. Q. Where was that agreement made? A. At the head of Spring Creek. Q. What was said about reducing the oral agreement to writing? A. We would just put this agreement into writing as soon as the round-up was over and we found out how many cattle that there was that was left with us, and it was convenient for us to meet in town.”
The plaintiff White, called as a witness, corroborated the testimony of the plaintiff Hunt, and other testimony was given tending to show plaintiffs’ complete performance of the agreement of October 15, 1923.
At the close of plaintiffs’ testimony, counsel for defendant made the following motion: “Comes now the defendant and moves the court to strike all testimony in the record- in rela tion to any conversations, transaction, contract or agreement in relation to the running of any livestock by the plaintiffs for the defendant on or subsequent to the fifteenth day of October, 1923, * * * for the reason that it appears from the uncontroverted testimony of both Sherman Hunt and Smith "White, the plaintiffs in this action * * * that said alleged agreement of, on or about October 15, 1923, * * * was to be reduced to writing and signed and executed by the respective parties to said proposed written agreement, to-wit, Sherman Hunt and Smith White, and the said S Y Cattle Company by Ben Colvin, its manager; * * * that it further appears that said agreement was never reduced to writing as contemplated by the respective parties to the proposed contract, and therefore the plaintiffs cannot recover under the said alleged contract for the reasons hereinbefore recited,” which motion was sustained.
The defendant did not introduce any evidence. The case was submitted to the jury, which returned a verdict in favor of plaintiffs for $339.40, upon which judgment was entered. Plaintiffs moved for a new trial, which was denied, and they have appealed from the judgment.
Counsel for the plaintiffs have made eight assignments of error in their brief, the first of which is that the court erred in sustaining defendant’s motion to strike out all of the testimony relating to the oral agreement had on, or immediately prior to, October 15, 1923. The other seven relate to the giving or refusal to give certain instructions, but all are dependent upon and grow out of the legal questions involved in the first assignment, so they will all be treated together.
Counsel for plaintiffs first contend that the stricken testimony should have been allowed to remain in the record, on the theory that it tended to establish an alteration of the written contract of June 29, 1923, by an executed oral agreement as permitted by section .7569, Revised Codes of 1921. A sufficient response to this contention is that the complaint does not plead such an alteration. Our view of the complaint is that it states two grounds of recovery; one for a balance alleged to be due under the written contract, and the other under the oral agreement of October, 1923. As we read the record, that is the theory upon which plaintiffs tried the case in the lower court, and they may not change that theory on appeal. (O’Hanlon v. Ruby Gulch Min. Co., 61 Mont. 318, 209 Pac. 1062.)
In passing upon this motion to strike, the' trial court relied entirely upon the decision of this court in Hopkins v. Paradise Heights Fruit Growers’ Assn., 58 Mont. 404, 193 Pac. 389, and particularly the portion thereof which reads: “It is a general rule that, when it is a part of the understanding between the parties that the terms of their agreement are to be reduced to writing and signed by them, their assent to its terms must be evidenced in the manner agreed upon or it does not become a completed contract.” If this declaration is to be taken literally, and the rule therein announced strictly applied to all cases, then the ruling of the district court in striking out this testimony was correct.
Language used in the decision of a case must be interpreted in the light of the facts presented in the case where the language is used. That quoted from the opinion in the Hopkins Case does not seem to be limited in its scope to a situation like the one presented by the particular facts under consideration. A re-examination of the record in that case discloses that the facts therein were sufficient to justify the court in holding that it must have been the understanding of the parties to the agreement there under consideration that the same should not be binding upon them, and so become effective as a contract, until such time as its terms had been reduced to writing and signed by them, and that this had not been done. If the language quoted had been limited- to a declaration that under such circumstances the assent of the parties to their agreement could only be established in the manner agreed upon — that is, by a written instrument — it would not be subject to criticism, for such is the law. That it was not the intent of the court to go further, and that the language was inadvertently used, is manifest from a consideration of the authorities cited to sustain it, and attention is now directed to them.
The first case cited by the court is Spinney v. Downing, 108 Cal. 666, 41 Pac. 797, from which the language of the Hopkins Case is taken almost verbatim. In support of this declaration the California court cited three cases, one of them being Ambler v. Whipple, 20 Wall. 546, 22 L. Ed. 403 [see, also, Rose’s U. S. Notes], in which case the court, considering the effect of a written instrument which had been signed by one of the contracting parties but not by the other, and which was sought to be enforced against the party who had not signed, said: “It is clearly on its face a paper which requires the signature of both parties to make it binding on either.”
The next authority cited in Spinney v. Downing is Fuller v. Reed, 38 Cal. 99. The court was there considering an agreement concerning the sale of real estate. The parties had been in conference on the 10th of March, and had reached an understanding concerning most of the details of their agreement, and had arranged to meet on the following morning, complete their arrangements and reduce théir contract to writing. The defendant in the action failed to meet with the plaintiff therein as agreed, and the latter brought suit claiming that the previous negotiations had resulted in the formation of a contract. In passing upon this contention the court said: “Regarding alone all the testimony in behalf of plaintiff as uncontroverted, no contract is shown to have been completed or executed between the parties; something remained to be done by each of the parties to consummate the contract, which appears never to have been accomplished. Cleaiiy, neither of the parties understood, from what transpired between them on the afternoon of the 10th, that any such agreement had been by them then consummated as to vest in either a legal interest or right. They understood that something remained to be done to vest such legal interest; that there was to be some further assurance.”
The next ease cited as authority in Spinney v. Doivmng is Morrill v. Tehama. M. & M. Co., 10 Nev. 125. The court there declared that the legal principle upon which its decision was based was: “That where parties enter into any agreement, and the understanding is that it is to be reduced to writing, or if it is already in a written form, that it is to be signed before it is acted on or to take effect, it is not binding until it is so written or signed.”
It is thus seen that each of the eases cited by the California court to sustain the decision in Spinney v. Downing is based upon a holding to the effect that it was a part of the agreement between the contracting parties that the same should not become effective so as to bind them to its terms, until it was reduced to writing and signed by them.
The next authority cited in the Hopkins Case is Hodges v. Sublett, 91 Ala. 588, 8 South. 800. In that ease the court said: “It is an elementary principle that the mutual assent of the parties to the same thing, and in the same sense, is an essential element of every contract. When the parties orally agree upon the terms of the contract, and there is a final assent thereto, so that no variation can be introduced into the writing except by mutual consent, the mere suggestion or intention to put it in writing at a subsequent time is not, of itself, sufficient to show that they did not mean the parol contract to be complete and binding without being put in writing. Parties may, however, agree verbally upon the terms of a contract, and yet stipulate that it is not to be binding until put in writing; in which case, such stipulation becomes an operative term of the contract, and, unless reduced to writing, and signed by the parties, it does not constitute a complete and binding agreement.”
In Montague v. Weil, 30 La. Ann. 50, next cited in the Hopkins Case, the court said: “In a very early case, Des Boulets v. Gravier, 1 Mart. (n. s.) 420, this court approvingly quotes from Pothier the general rule touching the necessity of re dncing the agreement to writing and thus states it: It must appear to be the intention of the parties to make the perfection of the agreement depend on the writing, for if it was merely contemplated to secure a more authentic mode of proof, then neither party can pretend the contract was not complete.”
The court next cites Mississippi etc. Steamship Co. v. Swift, 86 Me. 248, 41 Am. St. Rep. 545, 29 Atl. 1063. In that case the court had under consideration the question whether certain negotiations between the parties which had been partly oral and partly by means of correspondence, and in which mention had been made that the terms of their agreement should be reduced to the form of a written contract, and after a somewhat extended examination of the authorities, said: “From these expressions of courts and jurists, it is quite clear that, after all, the question is mainly one of intention. If the party sought to be charged intended to close a contract prior to the formal signing of a written draft, or if he signified such an intention tc the other party, he will be bound by the contract actually made, though the signing of the written draft be omitted. If, on the other hand, such party neither had nor signified such an intention to close the contract "until it was fully expressed in a written instrument and attested by signatures, then he will not be bound until the signatures are affixed. The expression of the idea may be attempted in other words: If the written draft is viewed by the parties merely as a convenient memorial, or record of their previous contract, its absence does not affect the binding force of the contract; if, however, it is viewed as the consummation of the negotiation, there is no contract until the written draft is finally signed.”
In 9 Cyc. 282, which is the final authority cited in the Hopkins Case, the text is merely a summarization of the holdings in the above-mentioned cases, all of which, with many others, are cited in the footnotes to sustain the text.
Turning now to the authorities other than those cited in the Hopkins Case, we find they are numerous and practically uniform in holding to the general principle announced in the ex cerpts from the opinions in the cases above cited. As stated in Disken v. Herter, 73 App. Div. 453, 77 N. Y. Supp. 300: “Where all the substantial terms of a contract have been agreed on, and there is nothing left for future settlement, the fact, alone, that it was the understanding that the contract should be formally drawn up and put in writing, did not leave the transaction incomplete and without binding force, in the absence of a positive agreement that it should not be binding until so reduced to writing and formally executed.” And in Green v. Cole, 103 Mo. 70, 15 S. W. 317: “It is well-settled law that, where the parties have assented to all the terms of the contract, the mere reference to a future contract in writing does not negative the existence of a present contract. In other words, if the parties make an agreement which they intend shall be binding from the time it is made, effect will be given to it from that time, though they intend it shall be superseded by a more formal written agreement.” The following illustrative cases are to the same effect: Loewi v. Long, 76 Wash. 480, 130 Pac. 673; Lawrence v. Milwaukee L. S. & W. R. Co., 84 Wis. 427, 54 N. W. 797; Lamoreaux v. Weisman, 136 Minn. 207, 161 N. W. 504; Concannon v. Point Min. Co., 156 Mo. App. 79, 135 S. W. 988. See, also, 1 Williston on Contracts, sec. 28:; 6 R. C. L., p. 618, sec. 39; 13 C. J. 290.
Hopkins v. Paradise Heights Fruit Growers’ Assn., supra, in so far as .it conflicts with the rule announced in the foregoing authorities, must be considered as overruled.
Reverting to the testimony in this case which was stricken out on motion of the defendant, it appears that, at the time of the transaction between the plaintiffs and the defendant in October, 1923, at the head of Spring Creek, there was a complete agreement between them concerning the cattle which the plaintiffs were to care for, pasture and graze after October 15, 1923, and that there was nothing left for further settlement.
The statement of the witness Hunt that the parties intended to reduce their oral agreement to writing when the round-up was over and it was convenient for them to meet in town does not negative the existence of a then existing valid and binding oral agreement, bnt rather indicates that the written contract, when made, should be viewed by the parties as a convenient memorial or record of their previous contract and not as the consummation of their negotiations. The testimony is that they would reduce to writing the oral agreement then made, not that they would make another agreement and reduce it to writing. This must be so, for it appears that, after making this contract, for a period of twenty days the parties thereto were engaged in rounding up the cattle, designating the class and number which were to be grazed under the contract, and in driving them to the plaintiffs’ winter range after the round-up was made.
If, upon a submission of this case to a jury, the plaintiffs should establish to its satisfaction the existence of facts which the testimony stricken out tended to establish, it would entitle them to recover from the defendants upon the contract of October, 1923, notwithstanding its terms were not reduced to writing and signed by the parties. For this reason the court erred in sustaining defendant’s motion to strike out this testimony.
Under the views above expressed, the court erred in overruling plaintiffs’ motion for a new trial, although in doing so it followed literally a former decision of this court.
The judgment is reversed and the cause remanded to the district court, with direction to grant the plaintiffs a new trial.
Reversed and remanded.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Matthews concur. | [
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MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
The defendant was found guilty of keeping open a dance-hall on Sunday and has appealed from the judgment and from an order denying his motion for a new trial. "
The cause was submitted upon an agreed statement of facts, from which it appears that from 9 P. M. until midnight of Sunday, October 18, 1925, the defendant kept open a dance-hall located on the second floor of a building at 102 South Montana Street in the business district of the city of Butte, and conducted a public dance therein.
Prior to 1915' there was in force in this state a statute which provided: “Every person who on Sunday, or the first day of the week, keeps open or maintains or aids in opening or maintaining any theater, playhouse, dance house, race track, gambling house, concert saloon or variety hall is guilty of a misdemeanor.” The Fourteenth Legislative Assembly amended the Act and in the amended form it is now section 11039, Revised Codes of 1921, and reads as follows:
“Every person who on Sunday, or the first day of the week, keeps open or maintains, or who aids in opening or maintaining any dance hall, dance house, race track, gambling house or pool room, variety hall, or any other place of amusement where any intoxicating liquors are sold or dispensed, is guilty of a misdemeanor; provided, however, that the provisions of this section shall not apply to such dancing halls or pavilions as are maintained or conducted in public parks or playgrounds where no admission is. charged, and where good order is maintained, and where no intoxicating liquors are sold.”
The history of the legislation in this jurisdiction will be found in the opinion in In re Klune, 74 Mont. 332, 240 Pac. 286. It will be observed that one effect of the amendment was to relieve theaters and playhouses from the restriction theretofore imposed upon them, while dance-houses and dance-halls were continued under the ban of the law; and it is the contention of the defendant that in making this discrimination the amended Act denies to him the equal protection of the law.
It is conceded, as it must be, that it is competent for the lawmakers to classify subjects of legislation and to deal differently with the different classes created, if the classification is reasonable and not a mere artificial arrangement or subterfuge to avoid the inhibition of the Fourteenth Amendment to the federal Constitution. Whether the classification made by the amended Act is reasonable was a matter for legislative determination in the first instance (Hilger v. Moore, 56 Mont. 146, 182 Pac. 477), and every reasonable presumption will be indulged in favor of the validity of the Act; in other words, it will be presumed that the classification is reasonable, and the defendant must assume the burden of showing that there is not any admissible hypothesis upon which it can be justified (Quong Wing v. Kirkendall, 39 Mont. 64, 101 Pac. 250).
We enter upon our investigation with this principle in mind: It is not necessary that classification depend “on scientific or marked differences in things or persons or in their relations. It suffices if it is practical, and it is not reviewable unless palpably arbitrary.” (Insurance Co. v. Daggs, 172 U. S. 557, 562, 43 L. Ed. 552, 19 Sup. Ct. Rep. 281, 282; Hill v. Rae, 52 Mont. 378, Ann. Cas. 1917E, 210, L. R. A. 1917A, 495, 158 Pac. 826.)
The mere fact that the Act discriminates between theaters and playhouses, on the one hand, and dance-houses and dance-halls, on the other, wifi not condemn it. Discrimination is the very essence of classification and is not objectionable unless founded on distinctions which the courts are compelled to pronounce unreasonable or purely fictitious. (Quong Wing v. Kirkendall, 223 U. S. 59, 62, 56 L. Ed. 350, 32 Sup. Ct. Rep. 192.)
Emphasis is laid upon the fact that, from 1871 to 1915, theaters, playhouses and dance-houses were included in one class' of subjects under police regulation, and it is" urged that the statute in force during that period was a legislative declaration that those subjects were so closely akin in their nature and effect that it was necessary that they be grouped in one class. This much may be conceded, bnt it does not follow that a different classification might not be made in 1915. The Fourteenth Legislative Assembly was not bound by the classification made by any of its predecessors. It may be assumed that the surrounding circumstances in 1871 justified fully the association of theaters and playhouses with dance-houses; but if, in fact, the character of entertainments given in theaters and playhouses on Sundays in 1871, or the manner in which those places were conducted, had changed to such extent that the evil sought to be remedied in the first instance had disappeared altogether or had been mitigated in 1915, whereas no such change had occurred in the manner in which dance-houses or dance-halls were conducted, this would justify the 'reclassification, and the existence of facts sufficient to warrant the change will be presumed. (Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61, Ann. Cas. 1912C, 160, 55 L. Ed. 369, 31 Sup. Ct. Rep. 337.)
It is always competent for the legislature to recognize dif ferent degrees of the possible evil tendencies inherent in different forms of amusement or entertainment, and to give effect thereto in classifying the subjects for the purpose of appropriate regulation, without being open to the charge that the Act is arbitrary or unwarranted. (Manufacturing Co. v. Worst, 207 U. S. 338, 52 L. Ed. 236, 28 Sup. Ct. Rep. 114; Engel v. O’Malley, 219 U. S. 128, 55 L. Ed. 128; 31 Sup. Ct. Rep. 190; Loan Co. v. Martell, 222 U. S. 225, Ann. Cas. 1913B, 529, 56 L. Ed. 175, 32 Sup. Ct. Rep. 74.) A very wide latitude is permitted in making selections for classification, and necessarily so, for it is obvious that things may have diverse qualities and belong to the same class, or they may have many characteristics in common and be cast into different classes. (Billings v. Illinois, 188 U. S. 97, 47 L. Ed. 400, 23 Sup. Ct. Rep. 272.)
Sunday observance laws similar to the one under consideration are in force in practically every state of the Union, and almost without exception they contain provisions exempting certain businesses, occupations or vocations. They are sustained quite uniformly upon the theory that the selection of subjects for exemption is peculiarly a matter of legislative discretion. (Geyer v. Buck (Sup.), 175 N. Y. Supp. 613.) The decided cases are reviewed at length in Carr v. State, 175 Ind. 241, 32 L. R. A. (n. s.) 1190, 93 N. E. 1071, and in the note to 29 A. L. R. 397.
But, although theaters and playhouses are still proper subjects of police regulation, the fact that the state does not now see fit to exert its authority in that respect does not militate against its right to regulate other subjects clearly .within the range of its police power. (City of Butte v. Paltrovich, 30 Mont. 18, 104 Am. St. Rep. 698, 75 Pac. 521.) The equal protection clause of the Fourteenth Amendment neither requires that state laws shall be perfect nor that the entire field of appropriate legislation shall be covered in a single enactment. (Rosenthal v. New York, 226 U. S. 260, Ann. Cas. 1914B, 71, 57 L. Ed. 212, 33 Sup. Ct. Rep. 27.)
Laws are not judged by theoretical standards, but by concrete conditions which induce them, and, before the de fendant can insist that the amended Act be condemned, he must be able to demonstrate that there are not any valid reasons for the application of Sunday observance regulations to dance-houses and dance-halls which do not apply equally to theaters and playhouses (Missouri, K. & T. R. Co. v. May, 194 U. S. 267, 48 L. Ed. 971, 24 Sup. Ct. Rep. 638; Watson v. Maryland, 218 U. S. 173, 54 L. Ed. 987, 30 Sup. Ct. Rep. 644), and in this he has failed; at least we are not satisfied beyond a reasonable doubt that the classification made by the amended Act is arbitrary or unreasonable, and this is the test by which the validity of the Act must be determined (Goodell v. Judith Basin County, 70 Mont. 222, 224 Pac. 1110).
It is contended, further, that by the proviso found in the amended Act an arbitrary distinction is drawn be tween subjects of the same class, in this: That a dancing hall or pavilion in a public park or playground is permitted to open and operate on Sunday, whereas a dance-house or dance-hall located outside of a public park or playground is required to close on that day. If it be assumed that a dancing hall or pavilion in a public park or playground of necessity belongs to the same class as a dance-house or dance-hall located outside of a public park or playground, defendant might be in a position to complain. On the other hand, if we assume the existence of two distinct classes, defendant cannot insist that the same regulations must apply to each.
The principal controversy arises over the question: Was it competent for the legislature in 1915 to create one class which includes dance-houses and dance-halls located outside of public parks and playgrounds, and another class composed of dancing halls or pavilions in public parks and playgrounds where admission is not charged, where good order is maintained, and where intoxicating liquor is not sold?
It is elementary that the police power may be exerted by restricting the territorial limits within which certain businesses may be conducted or certain privileges enjoyed. It is in virtue of this power that fire limits are prescribed for municipalities and objectionable classes of business or amusements are excluded from residence districts. The decided cases upholding legislation which restricted the districts in which saloons, livery-stables, powder magazines, cemeteries, cab-stands and other subjects of police regulation might be conducted or maintained, are too numerous to be mentioned here. Likewise, statutes which sanctioned betting on races .within fair-grounds or race-grounds, but prohibited such betting elsewhere, were sustained uniformly. (Ex parte Tuttle, 91 Cal. 589, 27 Pac. 933; State v. Thompson, 160 Mo. 333, 83 Am. St. Rep. 468, 54 L. R. A. 950, 60 S. W. 1077; Debardelaben v. State, 99 Tenn. 649, 42 S. W. 684; 6 R. C. L. 424; 12 C. J. 1133. See, also, State v. Rose, 40 Mont. 66, 105 Pac. 82; State v. Sylvester, 40 Mont. 79, 105 Pac. 86; State v. Gemmell, 45 Mont. 210, 122 Pac. 268.) The right of the state to regulate dance-houses or dance-halls cannot be questioned (Freund on Police Power, sec. 250), and, for the same reasons which justified the legislation above, the state may prescribe the territorial limits within which dance-houses or dance-halls may be opened on Sunday. The amended Act does not discriminate between subjects of the same class, but does create two distinct classes, based upon location (Bacon v. Walker, 204 U. S. 311, 51 L. Ed. 499, 27 Sup. Ct. Rep. 289), and it is not inconceivable that the legislature had before it ample evidence to justify the distinction made.
It is apparent that one purpose of the amendment was to strengthen the law by imposing restrictions where none were imposed theretofore. The legislature has never assumed to define the term “dance-house” or “dance-hall,” for the obvious reason that it did not require definition. It always has meant and now means a place maintained for promiscuous and public dancing, the rules for admission to which are not based upon personal selection or invitation. (State v. Rosenfield, 111 Minn. 301, 137 Am. St. Rep. 557, 29 L. R. A. (n. s.) 331, 126 N. W. 1068.) Prior to the amendment of 1915 a dancing pavilion in a public park was not subject to any state regulation whatever. It was not comprehended in the original Act, for a dancing pavilion is not a dance-house or dance-hall. (Israel v. New Orleans, 130 La. 980, 58 South. 850.) By the amendment, dancing pavilions in public parks or playgrounds were made subject to police regulation for the first time. They are now permitted to open and operate on Sunday only on condition that admission is not charged, that good order is maintained, and that intoxicating liquors are not sold. It was competent for the legislature to require that admission be free, to the end that the public generally, or such portion as chose to take advantage of the privilege, might have the opportunity to observe the conduct of those engaged in the pastime and exert a restraining influence upon any attempt at disorder. It may be that the same reasons for closing dance-houses and dance-halls outside of public parks exist, but in a different degree, with respect to dancing halls or pavilions in public parks; but, as we have observed heretofore, it is competent for the legislature to recognize different degrees of evil to be avoided or benefit to be obtained 'and legislate accordingly, without being arbitrary.
Emphasis is also laid upon the fact that the particular dance-hall in question is patronized by some of the best people of the community; that good order is maintained at all times; that objectionable characters are excluded; and that intoxicating liquors are not sold; but the police power is not re- stricted to the regulation or supervision of what is offensive, disorderly or insanitary. It embraces regulation designed to promote the public convenience and the peace and good order of society (Railway Co. v. Commissioners, 200 U. S. 561, 592, 4 Ann. Cas. 1175, 50 L. Ed. 596, 26 Sup. Ct. Rep. 341), or, as has been said aptly: “It extends to all the great, public needs. * * * It may be put forth in aid of what is sanctioned by usage, or held by the prevailing morality or strong and preponderant opinion to be greatly and immediately necessary to the public welfare.” (Noble State Bank v. Haskell, 219 U. S. 104, 111, Ann. Cas. 1912A, 487, 32 L. R. A. (n. s.) 1062, 55 L. Ed. 112, 31 Sup. Ct. Rep. 186, 188; Cunningham v. Northwestern Imp. Co., 44 Mont. 180, 119 Pac. 554; Colvill v. Fox, 51 Mont. 72, L. R. A. 1915F, 894, 149 Pac. 496.)
No useful purpose would be served by a review of the cases of that class to which State v. Cudahy Packing Co., 33 Mont. 179, 114 Am. St. Rep. 804, 8 Ann. Cas. 717, 82 Pac. 833, and Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 46 L. Ed. 679, 22 Sup. Ct. Rep. 431, belong. The distinction between eases in that class and cases like the one before us is pointed out in Ozan L. Co. v. Bank, 207 U. S. 251, 257, 52 L. Ed. 195, 28 Sup. Ct. Rep. 89. The police power has its foundation in the maxim, “Sic utere üio ut alienum non laedas,” translated liberally by our Code, “One must .so use his own rights as not to infringe upon the rights of another” (sec. 8743, Rev. Codes), and is put forth upon the theory that many restrictions must be imposed upon human activities in order to adapt our laws to human conduct.
It is our judgment that the amended Act is not open to the objections urged against it, and accordingly the judgment and order are affirmed.
'Affirmed.
Me. Chief Justice Callaway and Associate Justices Galen, Stark and Matthews concur. | [
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MR. CHIEF JUSTICE CALLAWAY
delivered tbe opinion of tbe court.
Upon bis trial before a jury for feloniously making a false report to tbe state examiner, Barton B. Dakin was acquitted by direction of tbe district court of Silver Bow county. Judgment of dismissal followed, from wbieb tbe state appealed.
During tbe argument suspicion in tbe minds of tbe members of tbis court that tbe cause was moot ripened into a certainty when, upon being interrogated, counsel for tbe state admitted that they could see no advantage to follow our consideration of tbe cause. Mr. Sullivan, deputy county attorney, who was arguing tbe case ably, upon being asked whether, if tbe cause should be reversed and remanded, a new trial would ensue, said be thought not; be said the case was tried in tbe district court by tbe predecessors in office of tbe present county attorney’s force and tbe appeal was being prosecuted out of deference to them. Assistant Attorney General Choate, upon being interrogated as to whether he knew of any reason why tbe court should consider tbe case, replied that be was in duty bound to answer in tbe negative.
It appeared from tbe argument that no novel or important proposition of law was involved, and that a formal decision would only follow principles of law already sufficiently covered in tbe Montana Reports. Tbis court is too busily engaged in tbe consideration of meritorious causes to consider mere moot questions. No such proposition confronts tbe court as was presented in State v. Kindle, 71 Mont. 58, 227 Pac. 65, or in State v. Wong Hip Chung, 74 Mont. 523, 241 Pac. 620.
As no useful purpose can be served by deciding tbe cause upon tbe merits, we refuse to entertain tbe appeal, and, accordingly, it is dismissed.
Dismissed.
Associate Justices Holloway, Galen, Stark and Matthews concur. | [
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MR. CHIEF JUSTICE CALLAWAY
delivered tbe opinion of the court.
Tbe plaintiff, on June 26, 1925, obtained a judgment by default against tbe defendant for tbe sum of $1,699.85 and costs. Upon tbe application of defendant tbe court, on September 28, 1925, entered an order setting aside tbe default and vacating tbe judgment. After the entry of this order, and on tbe same day, tbe plaintiff sought to avail himself of tbe ancillary remedy of attachment to secure tbe amount be claimed to be due him from the defendant; to that end be filed in tbe action affidavit for attachment in which be set forth that the defendant was then indebted to him in tbe sum of $1,699.85, and tbe statutory undertaking. Tbe writ issued and pursuant to it tbe sheriff, on tbe same day, attached approximately 9,201 acres of land standing on tbe records of Blaine county in tbe name of tbe defendant. Tbe levy has never been released. On October 22 tbe plaintiff filed notice of appeal from tbe order of the court made on September 28, 1925, “granting tbe motion of tbe defendant to open the default and set aside tbe judgment,” and in due time filed transcript and briefs with the clerk of tbe court. Tbe defendant has moved to dismiss tbe appeal, tbe motion having been served on the attorney for plaintiff upon February 10, 1926„ The plaintiff has not filed any resistance to the motion.
In a proper case “the plaintiff, at the time of issuing the summons, or at any time afterward, may have the property of the defendant attached, as security for the satisfaction of any judgment that may be recovered,” etc. (Sec. 9256, Rev. Codes 1921.) As will be noted the foregoing section presupposes that attachment proceedings must be prior to judgment, and this presupposition the entire chapter relating to attachments confirms.
Judgment having been entered and still being in effect, attachment will not lie. There being a judgment, execution will issue pursuant to which a levy upon the defendant’s property may be made, sale following. If an attachment exists at the time of judgment in favor of the attaching creditor, it becomes merged in the judgment. (Bagley v. Ward, 37 Cal. 121, 99 Am. Dec. 256; Oliver v. Wright, 47 Or. 322, 83 Pac. 870; Great Falls Nat. Bank v. McClure, 176 Fed. 208, 99 C. C. A. 562.)
From the date the writ of attachment is levied the property seized is impressed with a lien (see. 9288, Rev. Codes 1921) which continues in force until judgment, and if the judgment is in favor of the party procuring the attachment, the property is subject to sale in satisfaction of the judgment (sec. 9276, Rev. Codes 1921; Moreland v. Monarch, Min. Co., 55 Mont. 419, 178 Pac. 175).
A judgment is itself a lien on the nonexempt property of the debtor in the county or counties wherever the judgment is docketed (Rockefeller v. Bellinger, 22 Mont. 418, 74 Am. St. Rep. 613, 56 Pac. 822); while the judgment exists the creditor may not avail himself of the remedy of attachment because in order to obtain the issuance of the writ he must make affidavit that the payment of the amount claimed “has not been and is not now secured by any mortgage, lien or pledge upon real or personal property.” Moreover, having a judgment upon which execution could be obtained, the credi tor might reach the same end by causing a levy upon property which otherwise would be subject to attachment.
To sum up, under our statutes, attachment may not issue upon a cause of action which has ripened into judgment. Plaintiff cannot be permitted to maintain the judgment and at the same time to sue out a writ of attachment upon the cause of action upon which the judgment is based. When he sued out the writ he conceded, or will be held to have conceded, that the judgment no longer had any existence. Otherwise, if on appeal the action of the trial court were declared erroneous and the judgment declared valid, we should have an attachment in clear violation of statutory provisions.
In Parr v. Webb, 40 Mont. 346, 106 Pac. 353, this court held that where the district court granted the vacation of a default judgment and leave to answer on condition that defendant pay to plaintiff the costs theretofore accrued, the latter, by accepting the costs, waived his right to appeal from the order. The court said: “The right to accept the fruits of an order, and the right to appeal therefrom, are not concurrent. On the contrary, they are toally inconsistent. An election to take one of these courses is a renunciation of the other. (In re Shaver’s Estate, 131 Cal. 219, 63 Pac. 340.) A party cannot accept the benefit or advantage given him by an order, and then seek to have it reviewed. (San Bernardino County v. Riverside County, 135 Cal. 618, 67 Pac. 1047.)”
When the plaintiff availed himself of the remedy of attachment, which he could not have had, the judgment existing, he must be held to have accepted the benefit of the order which set aside the judgment.
The appeal is dismissed.
Dismissed.
Associate Justices Holloway, Galen, Stark and Matthews concur. | [
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] |
MR. JUSTICE STARK
delivered the opinion of the court.
The Red Lodge-Rosebud Irrigation District is a public corporation, organized under the laws of this state for the purpose of acquiring water rights, and the construction of ditches and canals to be used in connection with the irrigation of the lands situated within its boundaries, all of which are located in Carbon county. Charlotte Dilworth at all times herein named was, and now is, the treasurer of said county, and as such was, by law, required to hold and disburse the funds of the district.
On the twenty-eighth day of April, 1923, this district entered into a written contract with one J. S. Haley, by the terms of which the latter agreed to construct the work specified in certain schedules designated 1 and 2 in the plans adopted by the district for the completion of its canals, which contract provided that the work to be done by Haley should be performed under the supervision of the district engineer; that the engineer should make monthly measurements of all.work performed and materials delivered by Haley prior to that date, classify the same according to the items named in the contract, make an estimate of the value of the labor performed and materials furnished on the basis of the unit price named in the contract, and, upon the approval of said account and estimate, the district would pay thg amount shown by the estimates of the engineer. Such payments are, by law, required to be made by warrants drawn against the “construction fund” of the district, held by the county treasurer.
On or about the twenty-fifth day of May, 1925, the district engineer measured and estimated the value of the work and labor performed and materials furnished by Haley, for the purpose of determining the amount earned by him under the contract for the preceding month, and, after making all the deductions provided for by the terms of the contract, ascertained that there was then due to Haley the sum of $5,962.98; and thereafter, on or about the twentieth day of June, 1925, the said district engineer caused measurements and estimates to be made of the value of the work and labor performed and materials furnished by Haley under the terms of the contract during the month preceding that date, and cer titled that the further sum of $9,210.91 was due and owing to him. These estimates were approved in all respects as provided by law. The board of directors of the district thereafter caused its warrants, drawn upon the treasurer, against the funds in her possession belonging to the district for the purpose of paying the same, to be issued and delivered to Haley. Haley indorsed said warrants, presented them to the treasurer at her office, and demanded payment of the same, which was refused.
On October 22, 1925, Haley filed in the district court a petition reciting these facts; also that at the time he demanded payment of said warrants the county treasurer possessed sufficient funds available for payment of the same, and prayed that a writ of mandate issue commanding her to do so. - Thereupon an alternative writ of mandate was issued commanding the treasurer to pay said warrants, or show cause why she had not done so.
The treasurer appeared in said action by filing an answer, which, among other things, admitted that, as county treasurer, she had on deposit in the “construction fund” of the district the sum of $27,430.32, but alleged that the same was not available for the" payment of the warrants above mentioned, for the reason that before the presentation of said warrants she had been instructed and ordered by the board of directors of the district not to pay any warrants drawn on its construction fund, and, further, that the moneys of said fund in her hands should be held by her for said district as a ten per cent holdback fund and as a penalty fund under the Haley contract, and that if. any warrants on said fund were presented, certified as required by law, she should register them and not pay them out of said fund; that these instructions had not been revoked or rescinded by the district, and were still in force and effect.
Subsequent to the filing of this answer, Haley, by his counsel, moved the court for judgment in his favor on the pleadings. Before this motion came on fqr hearing, the district, by its counsel, presented to the court an application for leave to intervene in the action. The petition was denied. The motion for judgment on the pleadings was sustained, and on November 18, 1925, judgment was entered directing a writ of mandate to issue, as prayed for. An appeal was taken from that judgment by the treasurer, which is now ’'pending, and execution of judgment has been stayed by the ’filing of a proper bond.
On November 23, 1925, the irrigation district petitioned this court for a writ of supervisory control to annul the order of the court refusing to grant its petition for leave to intervene. On this petition an order to show cause was issued. In due time the respondents appeared and filed answer. The matter was submitted to the court on this petition and answer.
At the argument counsel for the relator presented a motion for leave to amend its petition by attaching thereto and making a part thereof the answer, reply and a motion for interest and attorney’s fees, filed in the mandamus proceeding, and the judgment entered therein. No objections were interposed to the granting of this motion, and the same is allowed. .
The petition filed in this court contains a copy of the complaint in intervention which the district sought to file in the mandamus proceeding, and the same will hereafter be referred to as the complaint.
After reciting the institution of the mandamus proceedings, the complaint sets out in greater detail the facts referred to in the pleadings therein, exhibits the contract mentioned in the petition, and discloses that among its provisions were:
(a) That Haley should begin work after the district had deposited with the treasurer of Carbon county the sum of #216,381.58 for the purpose of providing funds out of which to pay Haley what he might earn under the contract, and that the work should be completed on or before the tenth day of January, 1925;
(b) That at the end of each calendar month the engineer should make an approximate measurement of all work done and materials delivered up to date and of the value thereof, upon the basis of the unit prices agreed upon, together with all extra work, and from the total amount so found to be due to Haley there should be deducted ten per cent thereof, together with the amount of damages which the district had sustained for delays, or otherwise, under the terms of the contract, and the balance thus determined should be paid to Haley upon the.approval of the account, and the ten per cent thus deducted should not become due or payable to Haley until the contract had been fully completed;
(c) That a. deduction of $25 per day for each of Schedules 1 and 2 should be made for each and every day, including Sundays and holidays, that such schedule remained uncompleted, in the event that Haley should fail, to complete the work at the time agreed upon.
It is stated that the above-mentioned sum of money was deposited with the county treasurer by the district prior to the tenth day of November, 1923, and that Haley commenced active work under his contract within the time agreed upon. From time to time thereafter, down to July, 1925, the district engineer made monthly estimates of the amount of work and labor performed and materials furnished by Haley, and the district, from time to time, caused warrants to be issued to Haley for the amounts of such estimates, after making the deductions provided for in the terms of the contract.
The complaint also sets out in detail damages alleged to have been sustained, and which would subsequently be sustained by the district on account of the defaults of Haley. In paragraph 15 it is alleged that on July 14, 1925, when the warrants in question were issued, these damages amounted to more than $29,250, and that the district then advised Haley.: “That it had no funds with which to pay said warrants, but agreed that said warrants could be registered with the county treasurer of Carbon county, Montana, and issued said warrants to said Haley, and said Haley agreed to accept the same and to register said warrants, so that said warrants would draw six per cent interest from the date of registration, and, at the time said Haley accepted said warrants, he understood and it was agreed between the parties hereto that said warrants would not be paid in cash by the county treasurer of Carbon county, Montana, until such time as funds were available for that purpose, and thereupon the directors of said intervener directed and ordered the county treasurer of Carbon county, Montana, not to pay said warrants, or either of them, and directed and ordered her to register the same if the said warrants were presented by the said Haley for registration.”
It is further alleged that on October 5, 1925, the district passed a resolution, which, among other things, recited that the treasurer, as the custodian of the funds of the district, was then holding the sum of $27,430.32 in a fund which she had designated “construction fund”; that under the terms of the contract it was the duty of the directors of the district to deduct the ten per cent holdback as provided for in the contract, and keep the same intact until the contract had been in all things completed and accepted; that this ten per cent holdback then exceeded the sum of #21,638.58, and that there was due to the district from Haley for delays and otherwise the sum of $5,791.74; that the said sum so held by the treasurer was not properly available in the construction fund to meet the warrants held by Haley, and the treasurer was directed to transfer from the construction fund the sum of $21,638.58 to a fund which was by the resolution designated as the “ten per cent holdback fund of the construction fund,” under the Haley contract, and the sum of $5,791.74 to a fund which was thereby designated as the “damage fund of the construction fund,” under the Haley contract. It was further alleged that a certified copy of this resolution was served upon the treasurer on October 6, duly filed in her office, and that she made the transfers on her books in accordance therewith.
It is also alleged that Haley had failed to complete his contract and had abandoned it; that the district had, by proper resolution, declared said contract abandoned; that Haley was insolvent; and that demand had been made upon the sureties on the bond which he had given to guarantee performance of the contract that they complete the same, which demand had been ignored.
Whether the district court was in error in granting the motion for judgment on the pleadings in the mandamus ease cannot be reviewed in this proceeding. The only matter which we can consider on this application is whether the court should have permitted the proposed complaint in intervention to be filed.
An appeal does not lie from an order denying a motion for leave to file such complaint. (Equity Co-operative Assn. v. Equity Mill. Co., 63 Mont. 26, 206 Pac. 349.) The unsuccessful movant in such an application cannot appeal from the final judgment entered in the action, since he is not a “party” thereto within the contemplation of section 9730, Revised Codes of 1921. The only recourse open to such applicant is by application to this court for an appropriate writ.
Assuming, but not deciding, that the application for leave to intervene was made in time, if the complaint disclosed facts sufficient to entitle the relator to intervene in the mandamus proceeding, the order of the court denying the application was erroneous and should be vacated, and we shall proceed to a consideration of that matter.
In so far as the complaint attempted to state a cause of action in favor of the district and against Haley for damages alleged to have accrued, and which would thereafter accrue by reason *of breaches of the . contract, it will be disregarded, for an issue on general damages is not triable in a mandamus proceeding. (Bailey v. Edwards, Mont. 363, 133 Pac. 1095; State ex rel. Shea v Cocking, 66 Mont. 169, 28 A. L. R. 772, 213 Pac. 594.)
. When the district caused the warrants to be issued and de livered to Haley, the treasurer was legally obligated to recognize and pay them, provided she had sufficient money in the construction fund for that purpose, unless the same had been revoked and rescinded or payment thereof stopped. It is admitted that there was $27,430.32 in this fund on July 14, 1925, and at all times subsequent thereto, but, to show that it was not available for payment of the warrants subsequent to the latter date, the resolution of October 5, above referred to, was relied upon.
Apparently the Haley contract did not call for the construction and completion of the work provided for in Schedules 1 and 2 for a specified sum, but the work actually done was to be paid for at stipulated unit prices. It was not agreed that the $216,381.58 deposited with the treasurer should cover the entire amount which might be earned under this contract. If the value of the work done by Haley, computed at the unit prices, should exceed the amount of the deposit, the district would be obliged to pay for the same at the agreed price. It would rather appear that this fund was deposited by the district as an evidence of its ability to pay Haley the amount which he would be entitled to receive from time to time for the work done at the unit price and as shown by the engineer’s estimates. By the contract it was expressly agreed that the fund should be used for that purpose and no other.
The resolution of October 5 recited that there was then in this construction fund a balance of $27,430.32. This resolution did not assume to revoke, rescind or question the validity of the warrants held by Haley. On the contrary, ■by necessary inference, it recognized them as valid and subsisting obligations of the district.
The complaint disclosed that, when this resolution was passed, Haley had already been paid more than $196,000 after deducting from the amount actually earned under his contract $21,638.58 as the ten per cent holdback, and $9,250 for stipulated damages, so that the amount which he had" actually earned prior to that date exceeded $226,888.58', and the district was then holding back $30,888.58 of this money.
Sections 3985 and 3986, Revised Codes of 1921, contain the only authorization for the transfer of money from the construction fund of an irrigation district, and under their provisions the directors have no power to make any such transfer unless, upon completion of the district project, there is a surplus of money in such fund, when the same may be transferred to an appropriate fund for the redemption of the outstanding bonds of the district.
The mere direction of the district to the county treasurer by the resolution of October 5 to designate portions of this fund by some other name, and her compliance with this direction by bookkeeping entries in her records, did not change the status of the fund. It still remained the construction fund, although called by other names.
We conclude that, despite this resolution and. the acts of the treasurer thereunder, she had in her possession sufficient funds available for payment of the warrants when they were presented to her on July 14, 1925, and still had at the time of the entry of judgment directing the peremptory writ of mandate to issue commanding her to do so.
Nor does the complaint disclose that the district had revoked and rescinded the warrants or stopped payment thereon. As shown above, this was not accomplished by the resolution of October 5. The quoted portion of paragraph 15 of the complaint, instead of alleging a revocation or rescission of the warrants, is a direct recognition of their validity and of the obligation of the district to pay them. If the words “the directors of said intervener directed and ordered the county treasurer of Carbon county, Montana, not to pay said warrants” were separated from their context, they would be construed as an effective order to stop payment; but read in connection with the entire sentence wherein they appear, which recognizes the validity of the warrants, but declares that at the time of their issuance it was agreed between Haley and the district that they should not be paid in cash “until such time as funds were available for that purpose,” these words can mean nothing more than that the order not to pay should cease to be effective when the treasurer had funds available with which to make payment.
Rehearing denied January 9, 1926.
Finally, basing the argument on paragraph 21 of the complaint, counsel contend it shows that Haley procured the issuance of the warrants to him by fraud. This contention is not sustained by the pleading. The paragraph of the complaint relied upon does not state facts sufficient to constitute fraud by false representations. (McIntyre v. Dawes, 71 Mont. 367, 229 Pac. 846.)
Our conclusion is that the proposed complaint in intervention did not state facts sufficient to entitle the relator to intervene in the mandamus proceeding, and that the court did not err in refusing permission to file the same.
The application for the writ is denied and the proceeding is dismissed.
Dismissed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Matthews concur. | [
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23
] |
MR. JUSTICE GALEN
delivered the opinion of the court.
Joseph E. Oppenheimer, a resident of the city of Butte, died therein on January 31, 1924, leaving a large estate, disposition of which was by him provided in a last will and testament. The will was admitted to probate on March 1, 1924, and letters testamentary were regularly issued to the persons designated therein as executors. Subsequently the widow of the testator, Cornelia E. Oppenheimer, duly presented a claim against the estate for the sum of $150,000, being the amount agreed to be paid her under the terms of an antenuptial agreement, which claim was allowed in full by the executors on May 12, 1924, and by the judge on the day following. The antenuptial agreement is in writing, and was entered into between Joseph E. Oppenheimer, “as party of the first part,” and Cornelia E. Bingham, “as party of the second part,” in New York City, on June 30, 1921, and immediately thereafter the parties thereto were there married on the same day. By the terms of the prenuptial agreement, made the basis of the claim of Cornelia E. Oppenheimer against the estate of the deceased, it is provided:
“Whereas, a marriage is intended to be had between the parties of the first and second part, and the party of the first part is seized and possessed of a large estate;
“And whereas, it is agreed between the parties hereto that the party of the second part is not to have any dower, thirds, or right of dower in any real property of which the party of the first part is now or may hereafter become seized, possessed, and entitled to;
“And whereas, the party of the first part has agreed to make provision for the party of the second part in lieu of such dower, and in lieu of any claim that she, as the wife, or upon his death, as his widow, or as one of the heirs at law or next of kin, would be seized or possessed or entitled to;
“And whereas, the party of the second part has agreed to accept the sums and payments hereinafter mentioned in full for all claims of dower, or right of dower or thirds that she, the said party of the second part is entitled to as the wife, or will become entitled to as the widow, or heir at law or next of kin of the party of the first part:
“Now, therefore, in consideration of the said intended marriage and of the sum of one (|1.00) dollar to me, the said party of the second part, in hand paid, the receipt whereof is hereby acknowledged, I, Cornelia E. Bingham, the said party of the second part, hath granted, remised, conveyed, and forever quitclaimed and by these presents do grant, remise, release, and forever quitclaim unto the said Joseph E. Oppenheimer, the party of the first part, and to his heirs and assigns forever, all the dower, thirds, right and title to dower, thirds and of all other rights, title, interest, property, claim, and demand whatsoever at law or in equity of me, the said Cornelia E. Bingham, the party of the second part, of, in, and to all and every the lands, tenements, and real estate whereof the said Joseph E. Oppenheimer is now seized or possessed, or whereof he may hereafter become seized or possessed or entitled to, so that I, the said Cornelia E. Bingham, my heirs, executors, administrators, or assigns nor any other person or persons for me, them, or either of them, shall have, claim or demand any dower or thirds or any other right, title, claim, or demand, of, in, or to the same or any part thereof, but thereof and therefrom shall be utterly barred and excluded forever, and I do further sell, assign, transfer, and set over unto the said Joseph E. Oppenheimer, his personal representatives and assigns any claim that I, after becoming his wife or widow, may be entitled to in the personal property which he now owns or may hereafter become possessed or entitled to, and I do hereby agree that, in consideration of the payments as hereinafter provided, I have and will hereafter make no further claim against him or against his estate, his heirs, executors, administrators, or assigns, upon his demise for any share to which I as his wife, widow, heir at law, and next of kin may be entitled in the personal property of which he may be possessed.
“And the party of the first part in consideration of the above release, conveyance, and assignment, agrees for himself, his heirs, executors, administrators,- and assigns to pay to the party of the second part, or in the event that the party of the second part shall predecease the party of the first part, then to her heirs, executors, administrators, personal representatives, and assigns, the sum of one hundred and fifty thousand ($150,000) dollars, as follows, to wit: Twenty-five thousand ($25,000) dollars on or before one year after the date of his ■death; twenty-five thousand ($25,000) dollars on or before two years after the date of his death; twenty-five thousand ($25,000) dollars on or before three years after the date of his death; twenty-five thousand ($25,000) dollars on or before four years after the date of his death; fifty thousand ($50,000) dollars on or before five years after the date of his death. * * * ’ ’
And 'by the terms of the will of the testator it is provided: “Having heretofore entered into a prenuptial agreement with Cornelia E. Bingham (now my wife), which was accepted by her and the sums therein being intended and agreed to be in satisfaction and bar of her dower or other rights to which by the law of the state of Montana, or by custom or otherwise, she might be entitled in or out of any property of which I was seized at the time of my marriage to her or afterwards, therefore in accordance with the terms of said agreement and in fulfillment and satisfaction thereof, I direct that my trustees shall pay to my wife, Cornelia E! Oppenheimer, the sums mentioned therein.”
We have heretofore had occasion to consider the effect of the terms of this contract as respects the right of the widow to a widow’s statutory allowance for her support pending administration of the estate. (In re Oppenheimer’s Estate, 73 Mont. 560, 238 Pac. 599.)
On June 23, 1925, John Gribbin, the special appraiser appointed by the court to ascertain and fix the fair market value of the property of the deceased at the time of his death and of any interests or transfers of property made by the deceased subject to an inheritance tax, made and filed a written report, by which there was allowed and deducted as a debt of the decedent the sum of $150,000 due unto Cornelia E. Oppenheimer pursuant to the terms of the antenuptial contract. The clear market value of the estate as shown by such report, was reduced by the amount of the payments required to be made under the prenuptial agreement. On July 27, 1925, the state board of equalization filed its written objections to the report of the special appraiser, in part as follows:
“Objects to the report of said special appraiser in allowing as a deduction the sum of ($150,000) one hundred and fifty thousand dollars, pursuant to the prenuptial agreement made between the decedent and Cornelia E. Oppenheimer, upon the ground and for the reason that the said sum of one hundred and fifty thousand ($150,000) dollars is not a proper deduction, and upon the ground and for the reason that the same represents money distributed from the estate of the above-named decedent, and that the same, pursuant to said agreement, took effect at and after the death of the above-named decedent, and represents a transfer of property subject to tbe inheritance tax under the laws of this state.”
The matter was regularly brought on for hearing before the court on July 27, 1925, after the conclusion of which the objections so made were sustained, and it was ordered that the executors forthwith pay to the county treasurer of Silver Bow county the amount of tax prescribed by statute upon the amount of money so to be paid to the widow under the terms of the antenuptial agreement.
On August 25, 1925, the executors of the will, together with the widow of the deceased, made and filed an application for a rehearing as to the matter of the assessment and determination of the inheritance tax due from the estate. Thereafter such application came on regularly for hearing before the court, and, after all evidence and stipulated facts were submitted, the court, on September 14, 1925, denied a rehearing. The appeal is from the order made sustaining the objections of the state board of equalization to the report of the special appraiser of the estate, and from the order denying the petition for a rehearing.
The assignments of error made present but a single question determinative of the appeal, viz.: Is the amount payable to Cornelia E. Oppenheimer under the antenuptial agreement properly subject to an inheritance tax?
So far as applicable to the question presented, the statute provides: “A tax shall be and is hereby imposed upon any transfer of property, real, personal or mixed, or any interest therein, or income therefrom in trust or otherwise, to any person, association or corporation * * * in the following eases: * * * (3) When the transfer is of property made by a resident or by a nonresident when such nonresident’s property is within the state or within its jurisdiction, by deed, grant, bargain, sale or gift, made in contemplation of the death of the grantor, vendor, or donor, or intended to take effect in possession or enjoyment at or after such, death. * * * ” (Laws 1923, Chap. 65, sec. 1.)
It is the appellants’ contention that the gift or transfer of the amount of money stipulated in the prenuptial agreement was not made by will, by virtue of the laws of succession, nor' made in contemplation of death, within the meaning of the statute, and consequently is not property subject to the tax. Many authorities are cited in support of this contention by the learned counsel for the appellants in an elaborate brief by them filed. Independent, however, of the decisions of other courts, we are called upon to interpret and declare the legislative intent expressed in our own statute. The opinions of other courts are helpful to us in giving correct meaning to the language employed; however, decisions are to be found, both in support and against the appellants’ contention under like statutory provisions. (See note to Be Minor (Cal.), 4 A. L. E. 461.)
“The right of succession is not inherent, and the govern ment may or may not permit it; so that when the privilege is granted, such conditions may be imposed as may appear desirable; and a law regulating succession of estates may prescribe such terms as the legislature may deem appropriate. «= * # tíl© beneficiary of an estate has no claim by right of blood or otherwise to the estate of a decedent, except as the law gives it to him. The state has a right to take all of a decedent’s property or to impose such taxes or conditions on distributive shares as it deems proper.” (State ex rel. Rankin v. District Court, 70 Mont. 322, 225 Pac. 804.)
Many states have like statutes, embodying provisions similar to those under consideration, notably Wisconsin, New York, New Jersey, Massachusetts, Maine, Illinois, North Carolina, California and Utah, and in pursuance of our task we have read many decisions from the highest courts of these states. Our statute was copied from the inheritance tax law of Wis consin (Laws of Wisconsin, 1903, Chap, 44, see. 1087, Wisconsin Statutes, Supp. 1906; State ex rel. Murray v. Walker, 64 Mont. 215, 210 Pac. 90), and the Wisconsin statute was borrowed from New York (Estate of Bullen, 143 Wis. 512, 139 Am. St. Rep. 1114, 128 N. W. 109). The courts of these states, however, are not in accord in construction of its provisions. (Estate of Bullen, supra.)
In accordance with the accepted canons of statutory con- struction (State ex rel. Golden Valley County v. District Court, ante, p. 122, 242 Pac. 421), it is plain that the lawmakers intended that the tax should attach to such gifts or transfers as were to become effective after the death of the donor or grantor.
Stripped of all unnecessary verbiage, as applied to the facts before us, the statute clearly requires the imposition of the tax “when the transfer is of property made by a resident intended to take effect in possession or enjoyment at or after * * iS death,” and independent of the decisions of other courts in the construction of language employed in similar statutes of other states, we have heretofore held, and we think correctly, that, where the transfer of property is not to take effect in possession or enjoyment until after the death of the transferor, whether in contemplation of death or not, it is subject to the tax. (In re Estate of Schuh, 66 Mont. 50, 212 Pac. 516.)
Upon reference to the antenuptial agreement, it is at once disclosed that the wife was not to be paid the amount of money agreed upon until after the death of Joseph E. Oppenheimer. The amounts so to become due are, by the contract, to be paid her within a period of five years after the death of the donor by his executors; such sums to be received and accepted in full of all claims, or dower, or right of dower, or thirds, that the widow would otherwise be entitled to receive as his widow or next of kin. Therefrom it is plain that the payment was not intended to take effect in possession or enjoyment by Cornelia E. Oppenheimer until after the death of her husband. As well said by the supreme court of New York: “The law searches out the reality and is not halted or controlled by the form. * * “ The measure determining the liability or freedom from liability to the tax is the nature, the essence, the effect of the transfer.” (In re Orvis Estate, 223 N. Y. 1, 3 A. L. R. 1636, 119 N. E. 88.)
In the case before us the essence and effect of the prenuptial agreement was to permit Joseph E. Oppenheimer, during his lifetime, to use all of his property and money as he saw fit as his own until his death, after which Cornelia E. Oppenheimer, as his widow, would be entitled to the payment of certain sums of money in full satisfaction of all her rights to dower or otherwise as his widow or heir. It is obvious that, had the section quoted above merely provided that personal property passing by will or the laws of succession should be subject to the tax, the intended scheme of taxation would have been a complete failure, for the reason that transfers, made only to take effect after the death of the grantor, would or could be substituted for wills and intestacy in order to escape the tax. It is likewise apparent that the very purpose of the antenuptial contract before us was to settle all property rights of the intended wife after the marriage, and upon the death of her husband, in lieu of testamentary or intestate disposition. It was never intended by the lawmakers, when enacting the inheritance statute, to permit the owner of an estate falling within its provisions to continue in possession and enjoyment of all of his property and the rents and income therefrom during his lifetime, secure in 'the knowledge that, upon advent of death, the legislative intent would be effectually circumvented by some such device as this. Clearly, a gift or a transfer for a valuable consideration must be in prmsenti in order to escape the tax. A deceased person can have but one estate, and all property owned by him at the time of his death, including gifts or transfers previously made by him which are not to become effective until after his death, is taxable. The tax imposed is upon the right to transfer, not upon the estate. (State ex rel. Rankin v. District Court, supra; State ex rel. Bankers’ Trust Co. v. Walker, 70 Mont. 484, 226 Pac. 894; Nunnemacher v. State, 129 Wis. 190, 108 N. W. 627, State v. Pabst, 139 Wis. 561, 121 N. W. 531; Estate of Week, 169 Wis. 316, 172 N. W. 732; Estate of Stephenson, 171 Wis. 452, 177 N. W. 579. See, also, note in the opinion in Re McKennan, 33 L. R. A. (n. s.) 606.) In the case of State v. Pabst, supra, the supreme court of Wisconsin said, and we think correctly: “The statute was not intended to restrict persons in their right to transfer property in all legitimate ways, but it clearly manifests a purpose to tax all transfers which are accomplished by will, the intestate laws, and those made prior to death which can be classed as similar in nature and effect, because they accomplish a transfer of property under circumstances which impress on it the characteristics of a devolution made at the time of the donor’s death.”
Accordingly, in application of the explicit directions of the statute, the money to be paid as provided by the antenuptial contract is paid pursuant to a gift or transfer effective in possession or enjoyment only after the death of the grantor, and it is therefore properly subject to the tax.
The district court correctly construed and applied the statute, and its orders are affirmed.
'Affirmed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Stark and Matthews concur. | [
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