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PER CURIAM.
On motion of counsel for respondent, the appeal herein is dismissed. | [
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] |
MR. JUSTICE MATTHEWS
delivered the opinion of the court.
Appeal by the state from an order and judgment of dismissal on a directed verdict.
The defendant, Samuel S. Johnson, was placed on trial upon an information filed 4n the district court of Lewis and Clark county charging that, between the eighteenth day of April and the tenth day of November in the year 1924, he did “own and operate between Helena and East Helena an automobile, motor vehicle, and bus line for the transportation of persons for compensation, * * * without first obtaining a license, * * * and without filing any bond with the Public Service Commission,” etc.
The evidence adduced was rather meager; but three witnesses were called. The first, E. G. Toomey, testified that he was attorney for and secretary of the board of railroad commissioners and in charge of its records; that it appeared therefrom that defendant had never applied for or had issued to him the required permit or license, and had never filed with the board any bond or indemnity insurance such as is required by law and by tbe rules of tbe board on tbe issuance of such permit or license. One Ed. Majors testified that he had on one occasion, during the period named, ridden from East Helena to Helena in defendant’s vehicle, which he designated as “Mr. Johnson’s truck”; that he asked defendant what the fare was, and, on being informed by defendant that it was one dime, paid that amount to defendant. The witness further testified that from eight to twelve smeltermen rode in the truck at that time, who also paid the defendant a dime each, and that defendant was working at the smelter “off” and “on.” C. Ollie Connor testified that he had ridden many times with defendant during the period stated; that “Mr. Johnson operated a bus with seats on the sides and a top over it”; that, while witness had ridden at times gratuitously, he generally paid ten cents each way over the route; that he never asked defendant what the fare was but just handed him ten cents. This witness further testified that the bus was usually filled with passengers, and that, at times, defendant could not accommodate all of those who wished to ride with him; that he took his passengers on at the Helena end near the corner of Sixth Avenue and Main Street, and at the East Helena end, at the smelter. On the cross-examination of Mr. .Toomey, counsel for defendant “assumed” that the car driven by defendant was a one-ton or seven-passenger Dodge car, Inodel of 1922.
The essential portions of the Act under which the state proceeded in this case (Chap. 154, Laws of 19’23) are as follows :
“Sec. 1. ® * * (c) The term ‘transportation company’ when used in this Act means every corporation, person * * * owning, controlling, operating, or managing any motor vehicle, motor truck, motor bus, * * * used in the business of transportation of persons o.r property or as a common carrier for compensation over any public highway in this state between fixed termini; * * * (e) the words ‘for compensation’ shall be construed to mean transportation of any person for hire in any motor vehicle; provided, that the Railroad Commissioners may exempt from the operation of this Act the transportation of freight or passengers by motor vehicle in rural communities when not done on a commercial basis; (f) the term ‘motor vehicle,’ when used in this Act shall mean any self-propelled vehicle moving over the highway of this state, excepting road rollers, farm tractors, traction engines, fire extinguishing engines and police or hospital busses or ambulances; provided that every motor vehicle equipped with more than four wheels shall be declared to be a motor vehicle used in connection with a trailer or sub-trailer.
“See. 2. No corporation or person, as defined in section one of this Act, * * * shall operate any motor vehicle, motor truck, motor bus, but trailer, semi-trailer, or other trailer in connection therewith for the transportation of persons or property for compensation of [on?] any highway or public highway in this state .except in accordance with this Act.”
Section 3 of the Act authorizes the railroad commission to regulate such transportation.
Section 4 provides for the issuance of permits to operate, and prohibits such operation without first obtaining such permit or license, and authorizes the commissioners to fix terms and conditions to be imposed.
Section 5 empowers the commission to revoke permits under certain circumstances.
Section 6, as it existed at the time of the alleged offense, •requires each person or corporation before commencing operations under such license to file with the commission a good and sufficient “surety company”' bond, satisfactory as to sureties and conditions to the commission, “or liability insurance, in such a penal sum as the Railroad Commission may deem necessary to adequately protect the interests of the public, with due regard to the number of persons and amount of property involved, which * * * shall bind the obligators [obligors?] thereunder to make compensation for injuries to persons or loss or damage to property resulting from the operation of such vehicles,” etc.
Section 7 extends the power and authority of the commission under the Constitution and laws of the state relative to complaints, hearings, etc., to and over persons and corporations engaged in this method of transportation, and gives the same right of appeal from its orders as in such other matters.
Section 8 of the Act provides for a graduated license fee, according to the number, weight and size of the vehicle used, but not to exceed $10 per annum, “for defraying the expenses of administration of this Act and the regulation of the businesses herein described.”
Section 9 makes the violation of any of the foregoing provisions, or of the orders, rules, decisions or regulations of the commission a misdemeanor, and provides a penalty therefor.
Section 10 declares that the Act shall not be construed to apply to commerce with foreign nations or among the several states, “except in so far as the same may be permitted under the Constitution of the United States, treaties made thereunder and the Acts of Congress.”
Section 11 declares that, if any part of the Act is declared unconstitutional, such decision shall not affect the validity of the remaining portions, and that the legislature would have passed such remaining portions irrespective of those portions which may be declared unconstitutional.
At the close of the state’s case counsel for defendants stated: “Defendant moves for a directed verdict, * * * on the grounds and for the reason that the state has failed to produce evidence sufficient to prove the commission of a public offense under this law, or produce sufficient evidence to make a case to go to the jury. “The Court: The motion, coming at this time, is equivalent to a motion to dismiss on the ground that, as a matter of law, the evidence is insufficient to submit anything to the jury.” Thereupon, after stating its reason therefor, the court sustained the motion and dismissed the case.
As no appearance was made in this court by the defendant, we are not aided, in the determination of the questions involved, by the usual brief of the respondent, and, were it not for the reasons given by the learned trial judge for his disposition of the case and the questions treated in the brief filed by the attorney general and counsel for the board of railroad commissioners, we would be at a loss to know what matters are before us. From these sources it would seem that no contention was made that the state did not sufficiently prove the allegation of the information to the effect that defendant did, between the dates mentioned, operate some sort of a self-propelled vehicle for the transportation of passengers for compensation and over a regular route between fixed termini, but that the motion was sustained upon the following assumptions:
(1) That the Act under consideration is unconstitutional, by reason of the fact that it attempts to delegate to an executive or administrative board or commission legislative and judicial functions, in that it: (a) Permits the Railroad Commission arbitrarily to exempt from its operation “anybody they please”; (b) to fix the amount of license fees required; (c) to fix the amount of the bond or indemnity insurance which shall be filed; and (d) to make rules and regulations governing the issuance of permits and the conduct of the business engaged in under such permit or license.
(2) That, if the Act is constitutional, it is fatally defective, in that it cannot be determined therefrom what is meant by the term “motor vehicle” as defined therein.
(3) That the evidence is insufficient to warrant a submission of the case to the jury for the reason that the state failed to prove that the vehicle operated came within the purview of the statute by not proving that the vehicle in question was not one of those exempted.
In justice to the learned trial judge be it said that on the hearing it was frankly admitted that this is but a test case brought to determine the constitutionality of the Act, and that it was immaterial which way it was decided, so long as the ruling preserved this question for appeal, and that thereupon the court announced that it was not necessary to waste any more time or expense upon the trial, as the appeal could be taken from an order of dismissal.
The constitutionality of the creation of the railroad commission (Chap. 257, Rev. Codes 1921) and the authority of the state, in the exercise of its police power for the preservation of the lives and property of its citizens, to place transportation by motor vehicles, trucks and busses, whether by common carrier or by individuals, under the supervision and control of such a commission are not here questioned. Similar action has been taken in practically every state of the Union, and has been universally upheld. (Buck v. Kuykendall, 267 U. S. 307, 38 A. L. R. 286, 69 L. Ed. 623, 45 Sup. Ct. Rep. 324 [see, also, Rose’s U. S. Notes]; Hendrick v. Maryland, 235 U. S. 610, 59 L. Ed. 385, 35 Sup. Ct. Rep. 140; Kane v. New Jersey, 242 U. S. 160, 61 L. Ed. 222, 37 Sup. Ct. Rep. 30.)
1. The first question here presented is: Has the legislature, in the enactment of Chapter 154 above, kept within its constitutional bounds?
Our Constitution is not a grant of, but a limitation upon, the powers of the legislature (State v. State Board of Equalization, 56 Mont. 413, 185 Pac. 708).
“The state legislature possesses all legislative power, except such as has been delegated to Congress and prohibited by the Constitution of the United States to be exercised by the United States, and such as is expressly or impliedly withheld by the state Constitution from the state legislature.” (12 C. J. 805, and authorities there cited.) This rule is expressly approved and followed in Mills v. Porter (Veto Case), 69 Mont. 325, 35 A. L. R. 592, 222 Pac. 428.
We have in our Constitution no prohibition against delega tion of legislative powers other than that contained in section 1 of Article IV hereinafter commented upon; but it is a fundamental principle of constitutional law that this inherent power cannot, in the broad sense of an abdication by the legislative body of its sole authority to make laws on any subject, be delegated. (Locke on Civil Government, sec. 142; Cooley on Constitutional Limitations, 6th ed., 137, and cases there cited.) This fundamental principle is, then, an implied restriction upon the legislative department under the above rule and under our Constitution.
Section 1, Article IV of the Constitution, provides: “The powers of the government of this state are divided into three distinct departments: The legislative, executive and judicial, and no person or collection of persons charged with the exercise of powers properly belonging to one of these departments shall exercise any powers properly belonging to either of the others, except as in this Constitution expressly directed or permitted.”
In theory, this section, common in substance, except in a few instances, to all state Constitutions, effects an absolute separation of the three departments of our government, “but, while such is the theory of American constitutional government, it is no longer an accepted canon among political scientists; it has never been entirely true in practice.” (12 C. J. 803; Cooley on Constitutional Law, 44; Story on Constitution of the United States, 525.)
In Brown v. Turner, 70 N. C. 93, it is said: “While it is true that ‘the executive, legislative and supreme judicial powers of the government ought to be forever separate and distinct,’ it is also true that the science of government is a practical one; therefore, while each should firmly maintain the essential powers belonging to it, it cannot be forgotten that the three co-ordinate parts constitute one brotherhood, whose common trust requires a mutual toleration of the occupancy of what seems to be ‘a common because of vicinage’ bordering the domains of each.”
That section 1, Article IV, does not wholly prevent the exercise of functions of a nature belonging to one department by those administering the affairs of another is recognized in State ex rel. Hillis v. Sullivan, 48 Mont. 320, 137 Pac. 392, wherein Mr. Justice Sanner, speaking for this court, said: “The separation of the government into three great departments does not mean that there shall be ‘no common link of connection, or dependence, the one upon the other in the slightest degree’ (1 Story’s Commentaries on the Constitution, sec. 525); it means that the powers properly belonging to one department shall not be exercised by either of the others. (Const., Art. IV, sec. 1.) There is no such thing as absolute independence.” He then cites numerous instances of the exercise of powers by one department which, from their nature, would seem to belong to another, but which are incidents to the proper discharge of the powers vesting in the department exercising them, or are reposed in the particular department as a matter of convenience in governmental affairs.
“While the power to make laws may not be delegated to a board or commission, * * * a certain policy or rule having been prescribed by statute, matters of detail in carrying out the executive duty of giving effect to the legislative will may be left to boards or commissioners. The Interstate Commerce Commission is a conspicuous example of this rule.” (See 12 C. J. 847, where many other examples, including that of Railroad Commissions and Public Service Commissions, are given, and many cases recognizing the rule are cited.)
In the practical administration of public affairs, tbe adoption of this rule is found necessary. It would be impossible to eover by a general statute all of the intricate details of modern public utilities requiring supervision and regulation, or to lay down bard and fast rules which would not work injustice in individual cases.
It is said by Henry C. Spurr in bis work on tbe “Guiding Principles of Public Service Regulation,” volume 1, page 1, that “Tbe present public service or utility commissions with their broad powers * ® * were created because of tbe 'total or partial failure of tbe older forms of regulation.” These “older forms of regulation” are designated as (1) competition; (2) state control by direct legislation. It is said that such statutes were, of necessity, passed without knowledge of conditions affecting tbe individuals of classes, and were, therefore, “arbitrary, unscientific and often unfair. They were found to be inadequate. A legislature cannot examine into tbe merits of individual cases.” Tbe spread of regulation by state commissions was rapid because it was based on scientific principles.
Tbe same author in bis work on “Motor Vehicle Transportation,” page 19, says: “Regulation of automobile transportation may be direct by tbe state, through an Act of tbe legislature ; or indirect, through municipalities or public service commissions, to whom tbe power to regulate has been delegated by tbe state. * * * Tbe right of tbe state to regulate, either directly, or indirectly, through tbe agencies mentioned, is well established.” (Memphis v. State ex rel. Ryals, 133 Tenn. 83, Ann. Cas. 1917C, 1056, L. R. A. 1916B, 1151, 179 S. W. 631, P. U. R. A. 1916A, 825; Ex parte Dickey, 76 W. Va. 576, L. R. A. 1915F, 840, 85 S. E. 781; Auto Transit Co. v. Fort Worth (Tex. Civ. App.), 182 S. W. 685; Greene v. San Antonio (Tex. Civ. App.), 178 S. W. 6; Smith v. State, 130 Md. 482, 100 Atl. 778.)
In Interstate Transit Co. v. Derr, 71 Mont. 222, 228 Pac. 624, this court held that: “It is within the province of the board of railroad commissioners to whom the legislature has delegated authority, to administer the Act [now before us] and impose reasonable and impartial regulations in the use of our highways by persons engaged in, or purposing to engage in, the transportation of passengers and freight by automobile.” The question arose in that case, however, only incidentally, and the constitutionality of the Act was not questioned, and was therefore not decided, as such a question will never be passed upon unless it has been raised. (Potter v. Furnish, 46 Mont. 391, 128 Pac. 542.)
For the reasons stated, and after an examination of the authorities generally, we conclude that Chapter 154, Laws of 1923, neither violates section 1, Article IV, of the state Constitution, nor the fundamental law that legislative power shall not be delegated, in granting to the Railroad Commission the power to impose reasonable and impartial rules and regulations for the conduct of the business to be regulated, and to determine matters of detail in carrying out the expressed legislative will.
2. Nor does it violate section 3 or section 14 of Article III of the state Constitution, nor the Fourteenth Amendment to the Constitution of the United States, securing to the people the right of acquiring, possessing, and enjoying property, and prohibiting the taking of private property for public use or without due process of law, for, while a citizen has the right to travel upon the public highways and to transport his property thereon, that right does not extend to the use of the highways, either in whole or in part, as a place of business for private gain. For the latter purpose no person has a vested right in the use of the highways of the state, but is a privilege or license which the legislature may grant or withhold in its discretion, or which it may grant npon such conditions as it may see fit to impose, provided the imposi tion applies impartially. (Hadfield v. Lundin, 98 Wash. 657, Ann. Cas. 1918C, 942, L. R. A. 1918B, 909, 169 Pac. 516; Gizzardelli v. Presbrey, 44 R. I. 333, 117 Atl. 359; Cummins v. Jones, 79 Or. 276, 155 Pac. 171; Memphis St. Ry. Co. v. Rapid Transit Co., 133 Tenn. 99, Ann. Cas. 1917C, 1045, L. R. A. 1916B, 1143, 179 S. W. 635; Packard v. Banton, 264 U. S. 140, 68 L. Ed. 598, 44 Sup. Ct. Rep. 257.)
Such an Act does not purport to be, and is not in fact, a regulation of the use of the highways, nor does it attempt to transmute a private carrier into a public carrier against his will by legislative fiat, but merely makes a conditional offer of a special privilege, which the offeree may accept or not, as he sees fit. He is not entitled to the privilege as a matter of right, and, if he would accept, he must do so subject to the conditions attached to the offer. (Frost v. Railroad Commission (Cal.), 240 Pac. 26; Buck v. Kuykendall, above; People v. Yahne, 195 Cal. 683, 235 Pac. 50.)
We have, so far, dealt only with the general nature of the Act as affecting its constitutionality.
3. The trial court expressed the opinion that this Act per- mits the Railroad Commission to exempt from its operation persons conducting a transportation business in rural districts, and that, as the Act operates only in rural districts, it permits the commission to “exempt anybody they please”; that the Act is arbitrary and despotic, and would be no more drastic had the legislature given the board power to do just as it pleased in so many words.
If, as a matter of fact, no standard of exemption is laid down in the Act, and the matter is left wholly to the discretion of the commission as to who shall be exempted from its operation, the Act is void. (People v. Klinck Packing Co., 214 N. Y. 121, Ann. Cas. 1916D, 1051, 108 N. E. 278; Noel v. People, 187 Ill. 587, 79 Am. St. Rep. 238, 52 L. R. A. 287, 58 N. E. 616; Anderson v. Manchester F. Assur. Co., 59 Minn. 182, 50 Am. St. Rep. 400, 28 L. R. A. 609, 60 N. W. 1095, 63 N. W. 241; Soliah v. McCormack, 17 N. D. 393, 117 N. W. 125; Peterson v. Lewis, 78 Or. 641, 154 Pac. 101.)
This criticism of the Act is based on the proviso found in subdivision (e) of section 1 thereof. A careful examination of this proviso does not warrant the conclusion reached by the learned trial judge.
It is clearly the express intention of the legislature to include within the prohibition of the Act every person operating a vehicle of the nature described for hire and as a regular business, on a commercial basis, between fixed termini, and to exclude from its operation those residing in rural communities who may occasionally carry either passengers or freight, with or without compensation, but not “on a commercial basis,” and not as a regular business. As to this exemption, no doubt those persons included in the exemption would not be subject to the provisions of the Act had the legislature been silent on the subject; having spoken, no discretion as to those persons is lodged in the commission. The performance of the act required, i. e., the exemption of those falling within the proviso, affects the rights of third persons, and therefore the proviso is to be construed as though it read “must exempt” instead of “may exempt.” (State ex rel. Stiefel v. District Court, 37 Mont. 298, 96 Pac. 337; State v. Dotson, 26 Mont. 305, 67 Pac. 938; State ex rel. Interstate Lumber Co. v. District Court, 54 Mont. 602, 172 Pac. 1030; Dryer v. Director General, etc., 66 Mont. 298, 213 Pac. 210.) The exemption, then, is of a distinct class, and all persons falling within that class are exempted by the Act from its operation.
It is well settled that, in the exercise of the police power of the state, exemptions may be made even of classes which, except for the exception, might fall within the purview of the statute, provided such exemption is reasonable and applies equally to all persons or subjects within the class designated (37 C. J. 236, and cases there cited; People v. Sisk, 297 Ill. 314, 130 N. E. 696), and, so long as the above rules are observed, it is immaterial that the classification is not scientific (Stewart v. Brady, 300 Ill. 425, 133 N. E. 310).
4. It is suggested in the record that the defendant was, during the period covered by the information, under a contract to carry United States mail, and that, as the statute does not exempt such carriers it is invalid as an interference with the federal government. This contention was, at least impliedly, disposed of in the case of Interstate Transit Co. v. Derr, above. It was directly determined adversely to the position taken in State v. Price, 122 Wash. 421, 210 Pac. 787, and again in the state of Washington, while it was held that such an exemption did not render the Act void (State v. Seattle Taxicab Co., 90 Wash. 416, 156 Pac. 837), the court expressed the opinion that the Act was not capable of a construction which would permit the carrier of United States mail to operate as a carrier of passengers or freight for hire without complying with the provisions of the Act; and in Idaho a “Motor Transportation Act” was held invalid because it did exempt from its operation hotel busses operating solely between hotels and trains, and auto vehicles used in carrying the United States mail on “star routes,” thus permitting such exempted vehicles to operate in violation of the provisions governing the carriage of passengers and freight for hire in connection with the exempted business. (State v. Crosson, 33 Idaho, 140, 190 Pac. 922.)
The complete answer to this contention is that the transportation of passengers or freight for hire is an independent business having nothing to do with the carriage of the mail, and the regulation and control of the former cannot in any manner interfere with the transportation of the mail. All that was necessary in order that defendant might escape liability under this Act was for him to proceed with his mail route and refuse to accept passengers for transportation for hire, as his contract for carrying the mail does not come within the definition of either passengers or freight. (See Buck v. Kuykendall (D. C.), 295 Fed. 197.)
"What is here said concerning motor vehicles used in carrying mail applies as well to those exemptions contained in subdivision (f) of section 1 of the Act. The exemption is of a class of transportation not falling within the prohibition of the statute, and the exemption is not capable of a construction which would permit police or hospital busses or ambulances to carry passengers on a commercial basis, in the sense that such carriage is prohibited without first obtaining a license in the Act before us, and such exemption does not therefore affect the validity of the Act.
5. This Act fixes a minimum fee for the license required of but $10 per annum, and leaves to the commission the-fixing of the amount, within the limit prescribed, to be paid by each licensee. This is not a delegation of legislative power. That power was exercised when the statute declared that such business should not be carried on without first procuring a license, and the limit within which the commission could fix the rate was set. It is akin to the power given by Congress to the Interstate Commerce Commission, which is upheld by the supreme court of the United States. (Interstate Commerce Commission v. Goodrich Transit Co., 224 U. S. 194, 56 L. Ed. 729, 32 Sup. Ct. Rep. 436.)
Owing to the diversity of vehicles to be used and their divergent effect upon the surface of the highways, the amount of business transacted varying in each instance, justice and fair dealing require a more or less elastic scale of fees to be charged for the privilege of conducting such business, and this detail can best be handled by a board or commission so situate that it can inquire into the circumstances of each applicant. Any attempt on the part of the legislature to meet all conditions which might arise would, of necessity, result in regulation which would be “arbitrary, unscientific, and unfair.”
In the absence of any showing to the contrary, the license fees required, as fixed by the Act, and the rules, regulations or requirements of the commission, must be presumed to be reasonable. (City of Bozeman v. Nelson, 73 Mont. 147, 237 Pac. 528.)
6. The next contention suggested is that the Act, in grant- ing authority to the commission to fix the amount of the bond required, vests judicial power in that body.
As in the case of the license fee, here the legislature has itself made the law by requiring the filing with the commission of a good and sufficient surety company bond, or indemnity insurance, and again has left the regulation as to the amount of such bond or insurance to the discretion of the commission, but in this instance neither maximum nor minimum is fixed. In this our Act differs from like Acts in most of the states where at least a maximum amount is fixed. The only Act similar to our own in that respect which we have been able to find is that of Massachusetts. There, by Chapter 159, General Laws of Massachusetts, the legislature granted to all incorporated cities and towns the power to regulate motor transportation within the limits of the cities and towns and those passing through such limits and operating over routes with fixed termini, even though they do not take on or discharge passengers within such limits, and granted to the cities and towns the right to delegate such regulation to a board, officer or commission. Section 46 of the above Chapter requires that the licensee must deposit, with the town treasurer, security by bond or otherwise, running to the town treasurer, and approved by him and the licensing board or commission, in such sum as the licensing authority may reasonably require. As here, neither maximum nor minimum was fixed by the Act. . Certain towns delegated to the police commissioner thereof the administration of this law. The constitutionality of the Act was attacked, but the supreme judicial court of Massachusetts held against the contention of defendant. (Commonwealth v. Slocum, 230 Mass. 180, 119 N. E. 687; Commonwealth v. Theberge, 231 Mass. 386, 121 N. E. 30.) In the latter ease the court said: “One purpose of .the statute, if not the main one, was the protection from injury of persons properly using the public ways; the legislature well may have considered that one frequent and serious cause of danger is the reckless or careless automobilist rushing through country towns. The town did not exceed the power given to it by the statute in adopting the regulation in question. Nor can the regulation be condemned as an unreasonable exercise of the power delegated. * # * The bond of $2,500 cannot be condemned as unreasonable in amount, in view of the fact that it is designated to furnish security for injuries to person or property, or damages for death, caused by the negligent or unlawful act of the principal named in the bond or his agents or servants.”
Confronted with the necessity of the regulation of this rapidly increasing mode of transportation and the impossibility of adequately protecting the public by general legislative enactments, the details of classification and regulatory requirements are generally left by the legislative bodies of the several states to such commissions as ours, or those of like character, and such action is upheld by the court as a proper and constitutional method of meeting the new conditions arising, and to be neither a delegation of the powers of one department of the government to another, nor class legislation. (Nolen v. Reichman (D. C.), 225 Fed. 812; Lutz v. New Orleans (D. C.), 235 Fed. 978, affirmed (C. C. A. 5), 237 Fed. 1018, 150 C. C. A. 654; Jitney Bus Assn. v. Wilkes-Barre, 256 Pa. 462, 100 Atl. 954; West Sub. Transportation Co. v. Chicago etc. Co., 309 Ill. 87, 140 N. E. 56; Western Assn. v. Railroad Commission, 173 Cal. 802, 1 A. L. R. 1455, 162 Pac. 391; Huston v. Des Moines, 176 Iowa, 466, 156 N. W. 883; Cummins v. Jones, 79 Or. 276, 155 Pac. 171; Besser v. Wichita, 96 Kan. 820, L. R. A. 1916D, 246, 153 Pac. 1194; Ex parte Dickey, above.)
The rules and regulations promulgated and enforced by the commission, must, however, be reasonable and lawful, reflecting the expressed will of the legislature, and within the discretionary power vested in the commission. Such a commission has no arbitrary power. (Public Utilities Commission v. Smith, 298 Ill. 152, 131 N. E. 371.) If the rules and regulations adopted violate the above rules, the persons affected thereby are not without recourse or relief, as under the Act an appeal lies to the courts from the rulings and orders of the commission.
7. The next contention raised is that the definition of “motor vehicle” contained in subdivision (f) of section 1 of the Act is indefinite.
Why the legislature sought to define the term is not clear. The Act prohibits the operation not only of a “motor vehicle” but also of any motor-truck or motor-bus, and no attempt is made to define either of the latter terms.
Here the information charges the defendant with the operation of an automobile, motor vehicle and motor-bus, using the terms interchangeably, and it would seem that proof that he did operate any one of the prohibited conveyances would be sufficient to establish his guilt. If the term “motor-bus” applied to his conveyance, the remaining designations may be treated as surplusage, and it is immaterial what the definition of “motor vehicle” may be. A defendant cannot question provisions of an Act which do not apply to his case. (People v. Beak, 291 Ill. 449, 126 N. E. 201.)
However, the definition of “motor vehicle” includes “any self-propelled vehicle moving over the highway of this state,” with certain exceptions, and should be readily understood and construed, except as to the proviso that “every motor vehicle equipped with more than four wheels shall be declared to be a motor vehicle used in connection with a trailer or sub-trailer.” We will agree with the trial judge that this pro viso is incapable of accurate construction. It was probably included out of an abundance of caution to prevent the evasion of the law by the attachment to a four-wheeled car of some sort of permanent fixture supported by one or more wheels. But, as the Act applies to all motor cars, trucks or busses, except those exempted, whether operated as a single conveyance or with a trailer or subtrailer attached, it is immaterial what, if any, meaning the proviso has.
8. The final contention is that the state did not prove that the vehicle in question was not one such as is exempted from the operation of the Act. This contention is without merit. An exception need not be negatived, unless it is a constituent part of the offense. (State v. Tully, 31 Mont. 365, 3 Ann. Cas. 824, 78 Pac. 760; Territory v. Burns, 6 Mont. 72, 9 Pac. 432; State v. Big Sheep, ante, p. 219, 243 Pac. 1067.)
For the reasons stated, the judgment appealed from is reversed and the cause remanded to the district court of Lewis and Clark county, with direction to grant the state a new trial.
Reversed and remanded.
■Me. Chief Justice Callaway and Associate Justices Holloway, Galen and Stark concur. | [
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PER CURIAM.
Respondents’ motion to dismiss the appeal in this cause is sustained and the appeal is dismissed. | [
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MR. JUSTICE' MATTHEWS
delivered the opinion of the court.
This is an appeal from a judgment in favor of plaintiff and against defendants establishing a road from the lands of plaintiff across the lands of defendants to a public highway, and awarding damages therefor to defendants, to be paid by plaintiff with all costs of the action.
The complaint alleges that the plaintiff is the owner of certain agricultural lands in Carbon county which he occupies as a home for himself, his wife, and several children, and on which he raises crops of hay and grain; that he has no “practical outlet from his said land to the public highway, * * # and that it is necessary and plaintiff requires a right of way through the lands of defendants for a private road to connect his lands with the public highway; * sS * that plaintiff has children at home who should be going to school, but said children * * * have no way or road to reach the schoolhouse,” and plaintiff has approximately 1,000 bushels of grain and a large quantity of hay which he is unable to move to market. It describes the strip of land to be taken, and declares the proposed road to be a “public use,” and its purpose to enable the plaintiff to haul the produce to market, send his children to school, to haul supplies and fuel to the home, and “for using the same for road purposes and traveling purposes generally.”
Plaintiff alleges that he is willing to pay to defendants all damages suffered by reason of the taking of the land and for maintaining and using “said highway and road,” and declares that he sought to acquire such right of way by purchase, but without success, and that it became necessary for him to seek condemnation thereof under the provisions of the Code referring to the right of eminent domain.
To this complaint the defendants interposed separate demurrers, which were overruled. Francis Powers, as administrator, by answer joined issue as to the allegations of the complaint, and, as a special defense, alleged that at the time of the commencement of the action plaintiff had a good and sufficient road practically paralleling the proposed road, and within one-half mile of it, which road he admitted was impassable a portion of the year by reason of the depth of snow, but alleged that the same condition would prevail as to the proposed road, and further alleged that plaintiff had also a second road across the lands of other neighbors which he could use. He denied that plaintiff had attempted to purchase a right of way for the proposed road, and alleged that the proposed road would damage the property in his charge to the extent of the full value thereof, or $5,000. Maurice Powers, by separate answer, denied the necessity for the road, and alleged that the same would damage his property to the extent of $500.
By replication the plaintiff denied the new matter contained in the answers, and alleged affirmatively that he had but a way by sufferance across defendants’ lands at any time, and that he had been frequently denied the right to travel that way; that gates thereon had been closed and wired; and that he had been warned not to use the said road; and, further, tbat such way was through boggy ground and impassable, not only when blockaded by snow, but during the irrigating season, and that, even if permitted to do so, he could use the road “only occasionally.” He alleges that the damage to the lands held by Francis Powers would not exceed $200, and that to the Maurice Powers land would not exceed $25.
The cause was tried to the court, and a jury duly impaneled for that purpose. At the close of plaintiff’s evidence defendants moved for judgment of nonsuit, which motion was overruled, and at the close of all the evidence defendants moved for a directed verdict, which motion was also overruled. The court instructed the jury as to the law and as to their duty in such a ease, and sent them out to view the entire premises involved, including the proposed road as laid out on the ground and described in the pleadings, and any other practicable route. The jury returned their verdict in favor of plaintiff on all issues in the case, and specifically found that “the road described in the complaint and in the evidence is necessary to be taken by said plaintiff for highway purposes,” and fixed the amount of damages to be awarded to each of the defendants. The court found that the use to which plaintiff sought to apply the land in question was “a public use authorized by law,” and upon the findings and verdict made and caused to be entered the judgment appealed from. The defendants moved for a new trial and supported the motion by affidavits. The motion was denied.
The proceeding here reviewed was instituted under the provisions of sections 9933 to 9958, inclusive, comprising Chapter 14, Revised Codes of 1921, entitled “Eminent Domain,” which term is defined by section 9933 as “the right of the state to take private property for public use.” Section 9934 then provides that “subject to the provisions of this chapter, the right of eminent domain may be exercised in behalf of the fol lowing public uses: * * * [with others] 6. Private roads leading from highways to residences or farms.”
Section 9955 reads: “Private roads may be opened in the manner to be prescribed by the Political Code, but in every case the necessity of the road, and the amount of all damage to be sustained by the opening thereof, shall be first determined by a jury, and such amount, together with the expenses of the proceeding, shall be paid by the person to be benefited.” Turning to the Political Code for direction as to the manner of opening “private roads,” we find but one section on the subject; i. e., section 1765, Revised Codes of 1921, which merely provides in this regard that “private roads may be established in the manner provided in sections 9933 to 9958 of these Codes.”
Defendants predicate error upon the action of the court (1) in overruling defendants’ demurrers to the complaint. They do not, however, attack the complaint as to its sufficiency in either form or substance, but challenge the constitutionality of the above statutory provisions on the grounds discussed in paragraphs 1, 2 and 3 of this opinion.
Further specifications are that the court erred in (2) the admission of evidence; (3) overruling defendants’ motion for nonsuit; (4) overruling defendants’ motion for a directed verdict; (5) the giving of instruction No. 2, and refusing to give certain offered instructions declaring the contrary rule of law; (6) in refusing to give certain offered instructions based on defendants’ theory of the case; (7) refusing to submit a certain special interrogatory to the jury; (8) entering judgment for plaintiff and against defendants; and (9) overruling defendants’ motion for a new trial.
1. The first contention of counsel is that an Act which attempts to take private property for a private use is unconstitutional, and cites a long line of authorities wherein such acts are held invalid. In sustaining this contention we need go no further than to quote from our own case of Helena Power Transmission Co. v. Spratt, 35 Mont. 108, 10 Ann. Cas. 1055, 8 L. R. A. (n. s.) 567, 88 Pac. 773, declaring that ‘‘private property without the owner’s consent cannot be taken for the private use of another without violating the Fourteenth Amendment to the Constitution of the United States.”
2. Counsel next asserts that the legislature cannot, by its mere fiat, transform that which is in truth a private use into a public use, but must leave to the courts the determination as to whether a particular use is public or private. Again counsel submits numerous authorities in support of his position. Without cumbering this opinion with the citation of these authorities, we again agree with counsel. Section 9943 provides that the court must, among other things, determine in such a proceeding as this “whether or not the use for which the property is sought to be appropriated is a public use, within the meaning of the laws of this state,” and the highest court in the land has recently declared that the question is one for the courts. (Rindge Co. v. Los Angeles, 262 U. S. 700, 67 L. Ed. 1186, 43 Sup. Ct. Rep. 689.)
3. In construing statutes providing for the establishment of “private roads,” there is considerable apparent conflict in the authorities as to the character of the use. Mr. Lewis, in his work on Eminent Domain, volume 1, page 519, says: “However, * * * the key to their reconciliation is to be found in the fact that the phrase ‘private roads’ * * * is used in different states and different statutes to designate roads of entirely different character,” — and again on page 232 the author lays down the following test: “If, by a fair construction and operation of the statute, the road when laid out, is in fact a public road for the use of all who may desire to use it, the law is not liable to the charge of unconstitutionality, and is valid though the road may be laid out on the application of, paid for and kept in repair by the petitioner, and primarily designed for his benefit; but if such road is to become a mere private way and not open to the public, the law sanctioning it is void.”
On examination, the authorities do not so readily fall into the two classes stated in the text above. For example, the supreme court of Kansas, evidently overlooking the rule that the question of “public, use” was for the courts, declared a statute similar to our section 9955, but without a companion section such as our section 9934, unconstitutional for the reason that the legislature had described the roads to be established thereunder as “private roads,” stating: “We are asked to proclaim by judicial fiat that roads designated by the lawmakers as ‘private highways’ are public in character. To so declare would be an aggressive and unwarranted invasion into the domain of legislation, from which the courts are excluded.”
The distinction noted is, however, generally observed, and, where the wording of the statute is such as to disclose an intent on the part of the legislature to limit the use of a road, when established, to the individual applying therefor, such statute is held to be unconstitutional. Thus in Osborn v. Kart, 24 Wis. 91, 1 Am. Rep. 161, it was held that a statute which, after providing for the establishment of private roads, declared such private roads, “when so laid out, shall be for the use of such applicant, his heirs and assigns, “ * * nor shall the * * # owner of the land through which such roads shall be laid out be permitted to use the same as a road,” unless he signifies his intention of so doing before the damages are ascertained, was in violation of the Fourteenth Amendment, as it disclosed the intention of the legislature to authorize the establishment of strictly private roads. A similar statute was likewise declared unconstitutional in Illinois. (Nesbitt v. Trurnbo, 39 Ill. 110, 89 Am. Dec. 290; Crear v. Crossly, 40 Ill. 175.)
But the character of a way, whether public or private, is determined by the extent of the right to use it, and not by the extent to which that right is exercised (Butte, Anaconda & Pac. Ry. Co. v. Montana Union Ry. Co., 16 Mont. 504, 50 Am. St. Rep. 508, 31 L. R. A. 298, 41 Pac. 232), and, where statutes authorize the opening of a road from a public highway through the lands of one or more private owners to the lands of another for general road purposes, and which road the public generally has the right to travel, although others than the applicant may have slight occasion to do so, they are by the great weight of authority held not to contravene the Fourteenth Amendment, but to be valid enactments. (Perrine v. Farr, 22 N. J. L. 356; In re Hickman, 4 Harr. (Del.) 580; Robinson v. Swope, 12 Bush (Ky.), 21; Waddell’s Appeal, 84 Pa. 92; Sherman v. Buick, 32 Cal. 241, 91 Am. Dec. 577; Board of Commrs. v. Minnear, 72 Kan. 326, 83 Pac. 828; Sullivan v. Cline, 33 Or. 260, 54 Pac. 154; Latah County v. Peterson, 3 Idaho, 398, 29 Pac. 1089; Towns v. Klamath County, 33 Or. 225, 53 Pac. 604; Bashor v. Bowman, 133 Tenn. 269, 180 S. W. 326; Brock v. Barnett, 57 Vt. 172; State ex rel. Grays Harbor L. Co. v. Superior Court, 82 Wash. 503, 144 Pac. 722.)
As the question as to the character of the road is one for judicial determination, it is of little importance that the statute designates the roads to be established as “private roads.” The expression found in 'a statute, otherwise valid, is “without force or meaning,” as “there is no such thing as the establishment of a private road by the exercise of the right of eminent domain.” (Board of Commrs. v. Minnear, above; Sherman v. Buick, above.)
While the provisions of section 9955, above, would seem to be broad enough to authorize the establishment of a strictly private road, as, for example, a way from one tract of land to another, both owned by the applicant, and if the legislature had left the section to stand alone, it might be open to the charge of unconstitutionality, for a statute authorizing the establishment of such a road as that given in the above example has been properly held to be unconstitutional (Jones’ Heirs v. Barclay, 2 J. J. Marsh. (Ky.) 73; Reynolds v. Reynolds, 15 Conn. 83); but our legislature has limited the application of the section to “private roads leading from highways to farms” (sec. 9934, above), and have, therefore, authorized the taking, by the exercise of the right of eminent domain, of land for those roads only which are, in fact, not “private roads,” but public roads, which lead from a public highway, and must, therefore, be open to any member of the public who may care to travel it, although few may have occasion to do so. The provisions under consideration do not, therefore, violate the Fourteenth Amendment to the Constitution of the United States.
4. Defendants’ second specification of error refers to a question propounded to one Swan, a surveyor, as to whether the land over which he ran a line for the road was plowed at the time he made his survey. To this question defendants objected on the ground that the testimony sought to be elicited was incompetent and immaterial. We are not called upon to determine whether such evidence was competent, for the purpose of aiding the jury in estimating the damage, as the record discloses that the witness had theretofore, without objection, fully answered the question. Under such circumstances, if error was committed, it was harmless, and constitutes no ground for reversal. (Brownfield v. Bier, 15 Mont. 403, 39 Pac. 461; Cannon v. Lewis, 18 Mont. 402, 45 Pac. 572.)
5. Counsel argues his third and fourth assignments jointly, contending that the court should have taken the case from the jury for the reasons that the evidence disclosed that plaintiff had other roads from his land to the highway and that the proposed road was, therefore, not a necessity, and, further, that the location of the proposed road was not definitely fixed by the evidence.
(a) While the defendants testified that plaintiff had a right of way through their lands and another through the lands of one Bunny, which he had been using all winter, the plaintiff testified that the road through defendants’ lands was not passable during at least a part of the winter and during irrigating seasons, and that he had no right of way therefor, but merely traveled the road by sufferance, which right had been repeatedly denied him by the defendants who repeatedly warned him not to traved that road, and had several times wired the gates shut. Defendant Francis Powers testified that he had never denied plaintiff the right to travel the road, and did not know of anyone else doing so, but later stated: “I have forbade him using that road there. The reason why I stopped him was because we had ground on both sides of the road, and we always used to go through there, and we used to go through his place, and he stopped us going through there, and we were justified in stopping him going through ours.” To what road he referred is not clear. Bunny corroborated plaintiff as to the condition of this road, and testified that there is no road through his field; that plaintiff merely passed through his alfalfa field, when he could get out in no other way, by sufferance of this witness.
The most that can be said on this contention is that there was a conflict in the evidence. From the cold record it would seem that the evidence clearly preponderates in favor of the plaintiff’s assertion that he had no right of way or outlet from his premises.
(b) In the complaint and in the judgment the proposed road is described with reference to the legal subdivisions of the land through which plaintiff proposed to lay out such road, as shown by a plat made by the surveyor Swan. Defendants contend that, inasmuch as they introduced evidence to the effect that the fence on their land near the proposed road was over 100 feet from the government line, and the surveyor admitted that he did not go to the government corner between sections 7 and 8, but went by the fence line, the, road as laid out on the ground would be more than 100 feet from the survey made therefor. But the surveyor testified that his plat was “approximately correct,” and that he did not need to go to the corner designated, as he “went to the United States corner between 7 and 6.” Again we have but a conflict in the evidence, on which the court could, and evidently did, decide that the proposed road was correctly described. The road was marked out on the ground, and the jury went over it, so that there could be no question as to its location on the ground.
The requirement of section 9940 in this respect “is met when the description is definite enough to identify the land sought to be taken” (Interstate Power Co. v. Anaconda C. Min. Co., 52 Mont. 509, 159 Pac. 408), and it does not clearly appear that the evidence as to the location of the proposed road in any manner departed from the description thereof contained in the complaint. The rule that the trial court’s
determination on conflicting evidence will not be disturbed if there is any substantial evidence to sustain it is too well settled to require the citation of authorities.
6. Defendants’ next contention is that the court erred in giving its instruction numbered 2, defining “necessity” as used in the statute, as follows: “Necessary and necessity, as used in these instructions, do not mean an absolute and indispensable necessity, but reasonable, requisite and proper for the accomplishment of the end in view under the particular circumstances. That is to say, the plaintiff is not required to show, by a preponderance of the evidence, that the road sought to be condemned is an absolute and indispensable necessity for him to go from his land and residence to the county road, but the burden is upon the plaintiff to show that his demands with reference to this road are reasonable, and that the proposed road is reasonably necessary.”
Defendants objected to this instruction, and offered instructions laying down a different rule. In support of his contention that a showing of absolute necessity is required, counsel cites Violet v. Martin, 62 Mont. 335, 205 Pac. 221. That case, however, dealt with the attempted establishment of a way of necessity by prescription, and what is there said has no application to the case at bar.
With reference to the necessity which will warrant the taking under the right of eminent domain, this court has clearly expressed itself contrary to defendants’ contention, as follows: “It may be observed generally that necessity, in this connection, does not mean an absolute or indispensable necessity, but reasonable, requisite and proper for the accomplishment of the end in view, under the particular circumstances of the case.” (Butte, Anaconda & Pac. Ry. Co. v. Montana Union Ry. Co., above; Northern Pacific Ry. Co. v. McAdow, 44 Mont. 547, 121 Pac. 473.) The court’s instruction accurately followed the pronouncement of this court, and correctly advised the jury on the subject of necessity, and the court did not, therefore, err either in giving the instruction or in refusing contrary instructions.
7. We have examined the i’emaining offered instructions which were refused, and compared them with the instructions given, and are of the opinion that they were sufficiently covered by the court.
8. The defendants requested the submission to the jury of the following special interrogatory: “No. 2. If you find a new road necessary to plaintiff, do you find another more practical route which it could follow than the one in question, or do you find a route as practical as the one in question, and which will cause less damage and inconvenience to defendants?”
When the jury were sent out to view the premises, the court advised them that they could “look over the1 entire situation” and determine whether there were any other routes which would be practical and could-be obtained from the same parties, and, at the request of the defendants, it instructed the jury that, “even though you may believe from the evidence that the plaintiff now has no reasonable outlet or road from his premises, still, if you believe from the evidence that the plaintiff could condemn a road in a different place than the one in question, which would cause less damage than the one in question, and be as practical as the one sought, then your verdict should be for the defendant [defendants?].”
This instruction became the law of the case. (Lacey v. Great Northern Ry. Co., 70 Mont. 346, 36 A. L. R. 1331, 225 Pac. 808; Friesen v. Hart-Parr Co., 64 Mont. 373, 209 Pac. 986; Smith v. Barnes, 51 Mont. 202, Ann. Cas. 1917D, 330, 149 Pac. 963; Harrington v. Butte Miner Co., 48 Mont. 550, Ann Cas. 1915D, 1257, 51 L. P. A. (n. s.) 369, 139 Pac. 451.) Interrogatory No. 2 was in harmony with this instruction, and its submission would have been eminently proper, but the request was addressed to the discretion of the court. No abuse of discretion is shown, as the jury, being fully advised as to their duties, expressly found for the plaintiff on all issues in the case, in addition to finding specifically that the road sought was a necessity, and rendered a general verdict for plaintiff. The issues joined included both questions embraced in the special interrogatory. In the absence of anything to indicate the contrary, it will be assumed on appeal that the jury observed and followed the instructions of the trial court (Roberts v. Sinnott, 55 Mont. 369, 177 Pac. 252), and that the inspection of the premises by the jury, at the request of defendants, disclosed facts “necessary to give verity to their conclusions.” (Michalsky v. Centennial Brewing Co., 48 Mont. 1, 134 Pac. 307.)
The situation here is identical with that in the Centennial Brewing Co. Case above, wherein this court said: “The court could very well have submitted to the jury the special interrogatory requested. * * * The submission of such interrogatories is to be commended, particularly in eases where the answers may be decisive. It has a tendency to keep the jury to the main issues and is often a great aid to this court in ascertaining the precise basis upon which the verdict is made to stand. But the submission of such questions is always within the discretion of the trial court, especially where the answer may not necessarily determine the rights of the parties; hence the refusal is not subject to correction by us. (Poor v. Madison River Power Co., 41 Mont. 236, 108 Pac. 645.) ” (See, also, Hollingsworth v. Ruckman, 72 Mont. 147, 232 Pac. 180.)
9. In arguing defendants’ assignment that the court erred in entering judgment in favor of plaintiff, counsel asserts that, if all other questions raised are decided against the contentions made, judgment should not have been entered in favor of plaintiff, for the reason that the “Eminent Domain” Chapter refers back to the Political Code for tbe method of laying ont private roads, and that, as the Political Code makes no provision therefor, either the law is defective or commissioners must be appointed to view the proposed road.
■Counsel overlooks the fact, heretofore pointed out, that section 1765, Revised Codes of 1921, found in the “Political Code, ’ ’ instead of providing a method of procedure, refers back to the Chapter on eminent domain and authorizes the adoption of the procedure there provided in behalf of these so-called private roads. "While in other matters commissioners must be appointed under the Chapter, section 15 of Article III of the Constitution, section 1765, above, and section 9955, above, all provide that, in the ease of the establishment of a “private road,” those matters ordinarily determined by a commission must be determined by a jury. These provisions modify the requirements of the Chapter on eminent domain to this extent by eliminating the commissioners, just as the provisions of the above section of the Constitution modified like provisions for a determination by commissioners, found in section 1495 et seq., Division 5 of the Compiled Statutes of 1887. (State ex rel. Coleman v. District Court, 14 Mont. 476, 37 Pac. 7.) The plaintiff therefore followed the procedure laid down by the legislature in condemning the road, and the court was justified by the showing made, in entering the judgment appealed from.
10. Finally defendants contend that the court erred in deny- ing them a new trial on their presentation of affidavits containing so-called “newly discovered evidence.”
The record discloses that, after the jury had deliberated for some time it returned into court for further inst.rnfit.innp. What the jurors desired to know was the width of an old road which had been traveled at times by plaintiff and defendants, and “how much room they have to work on it.” They were advised by the court that “the question is whether the road is now in condition so it can be traveled, and if not, can it be put in condition by a reasonable amount of improve ment,” and, in effect, that in determining this question they were confined to the evidence adduced on the trial.
In support of the motion for a new trial, defendants presented the affidavit of six jurors to the effect that two-thirds of the jurors were not in favor of giving the plaintiff a new road, but to give him -the old road, with slight changes, and that, had the court advised them of the width of the old road, they would have found that plaintiff could establish the old road with less damage and inconvenience to defendants than would be caused by the proposed road. By the affidavit of two outsiders it is made to appear that the old road, at the point designated by the jurors, is thirty-six feet in width. By the affidavit of defendant Francis Powers it is made to appear that the old road is fenced, and its width easily ascertainable, at least approximately, by observation, and that, as the jurors viewed the premises and walked over the old road, he did not consider it necessary on the trial to produce evidence of its width, but that, if granted a new trial, he will produce evidence to the effect that the old road is thirty-six feet wide. He further states that he had talked with “some of the jurymen,” and was advised that none of the jurymen desired to give the plaintiff the proposed road, but that, after they were advised by the court that it was immaterial as to the width of the old road, and that they had nothing to do with the old road,-the jury became “antagonistic, and abandoned the question as to whether the old road was sufficient,” etc.
It is apparent from these affidavits that the only evidence which would be produced on a new trial, in addition to that already given, would be that the old road was thirty-six feet wide, and, possibly, that such an amount of land would give plenty of room for work on the old road. These facts were within the knowledge of the defendants prior to and at the time of the trial. Defendant Francis Powers could have testified to the approximate width of the old road without leaving the courtroom. The road was across his.land; it was fenced, and he had traveled it. The only reason why he did not so testify, according to his own affidavit, was that he thought the fact so apparent that testimony was not necessary. Such a showing is not one of “newly discovered evidence,” but an offered excuse for not producing evidence which it was within the power of the party to produce, and does not constitute a ground for a new trial under section 9397, Re- vised Codes of 1921. A' motion for a new trial is a statutory remedy which can only be invoked on grounds provided in the statute. This is the declaration of this court contained in a long line of authorities from Whitbeck v. Motana Central Ry. Co., 21 Mont. 102, 52 Pac. 1098, to State ex rel. Smith v. District Court, 55 Mont. 602, 179 Pac. 831.
The excuse offered for not producing the evidence falls far short of the required showing to “negative negligence” on the part of the defendants on such a motion. (In re Colbert’s Estate, 31 Mont. 477, 107 Am. St. Rep. 439, 3 Ann. Cas. 952, 80 Pac. 248.)
The affidavits of the jurors is an attempt to impeach their verdict on grounds other than the single ground mentioned in section 9397 above, to-wit, when the verdict is arrived at “by resort to determination of chance,” and which is the only ground on which impeachment will be permitted in this state. (State v. Beeskove, 34 Mont. 41, 85 Pac. 376; Sutton v. Lowry, 39 Mont. 462, 104 Pac. 545; Chenoweth v. Great Northern Ry Co., 50 Mont. 481, 148 Pac. 330; State v. Lewis, 52 Mont. 495, 159 Pac. 415.)
The court was justified in ignoring the affidavits filed and in denying the motion for a new trial.
No substantial error appearing in the record, the judgment is affirmed.
'Affirmed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Stark concur.
Case taken to supreme court of the United States on writ of error, July 1, 1926. | [
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JUSTICE WEBER
delivered the Opinion of the Court.
Appellant Karren Kane appeals the order of the District Court of the Eighth Judicial District, Cascade County, which granted defendant Billy Miller’s motion for summary judgment in a legal malpractice action. We affirm.
We find the following issue dispositive:
Whether the District Court erred by granting defendant’s motion for summary judgment.
Ms. Kane’s legal malpractice action originated from Mr. Miller’s representation in a proceeding initiated by the State to obtain permanent custody of Ms. Kane’s son JEH and to terminate her parental rights. Mr. Miller replaced Ms. Kane’s former public defender, Nancy Belcheff, after Ms. Belcheff resigned her position as a Cascade County public defender in early March 1987. Mr. Miller was the third attorney to represent Ms. Kane in that matter.
The events leading to the parental rights termination proceeding began in 1984 when Ms. Kane called the Department of Social and Rehabilitative Services (SRS) and requested that JEH, her eight-year-old son, be placed in residential placement because she could not control his violent behavior. The youth was removed from Ms. Kane’s home and initially placed in foster care. As early as July 18, 1985, Ms. Kane stipulated to a treatment plan with SRS. At that time, she was represented by her first attorney, Mark Bauer. On July 28,1985, JEH was transferred to the Yellowstone Boys and Girls Ranch in Billings, Montana. A psychological evaluation was subsequently ad ministered there. He has received psychological treatment since then with positive results.
The stipulated treatment plan required Ms. Kane and her daughter to obtain psychological evaluations by a licensed clinical psychologist and to follow any of the resultant recommendations. Although she agreed to follow the treatment plan, she did not comply with its provisions. Ms. Kane and her daughter had still not obtained psychological evaluations at the time of the final termination hearing nearly two years later.
In July 1986, the District Court allowed Ms. Kane additional time to comply with the treatment plan. A hearing was subsequently held on November 12, 1986, to terminate Ms. Kane’s parental rights because she had still not complied with the SRS treatment plan. The court again continued the hearing so as to allow Ms. Kane yet another opportunity to comply with the treatment plan. A final hearing was rescheduled for April 2,1987.
Mr. Miller was appointed to represent Ms. Kane shortly before the April 2,1987 hearing. Testimony at that hearing established that Ms. Kane had failed to comply with the court ordered treatment plan after nearly two years. SRS employees testified to their opinion that no additional time should be allowed for Ms. Kane’s compliance due to JEH’s need for permanency and further treatment. A social worker and therapist both testified that Ms. Kane refused to comply because she felt that the problem was physical in nature and originated with the child.
Other evidence, in the form of eleven separate medical statements from various doctors, indicated that JEH suffered from no neurological disfunction. It also established that Ms. Kane had taken the boy to doctors since he was a baby looking for a medical explanation for continuing difficulties that she experienced with him.
Doctors repeatedly diagnosed no neurological disfunction, explaining JEH’s behavior as the result of a severely disturbed mother-child relationship. Dr. Monte Kuka, a clinical psychologist, concluded in his diagnosis of JEH, that JEH was a deeply disturbed child with emotional problems that went back many years. He said the problem developed because the child felt abandoned by his mother and by several father figures and because the mother had emotional problems. Also assessing Ms. Kane in that same year, he diagnosed her as having an inconsistent parenting style, angry outbursts and blaming JEH in an attempt to humiliate him with guilt. None of the doctor’s diagnoses convinced Ms. Kane that JEH’s problems were emotional and not medical in nature.
In February 1987, less than three months before the final hearing in the termination of parental rights proceeding, Ms. Kane attended a foster care review meeting at SRS and insisted that JEH had Tourette’s syndrome. Ms. Kane had not previously attended any of these meetings which were designed to facilitate services provided by SRS. She explained her attendance that particular day as essential, because if she did not attend the review, SRS would win and she wanted to show them that they were wrong.
Throughout the duration of that proceeding, Ms. Kane dealt with several social workers from SRS. In 1986 she began working with Nancy Pallares-Hernandez. Ms. Pallares-Hernandez testified that although Ms. Kane had been involved with four social workers, none of them had been able to help her. She testified that Ms. Kane resisted help because she refused to accept that she had a problem and continued to place all blame on her son’s physical condition. Ms. Pallares-Hernandez testified that when she tried to reassure Ms. Kane that she did indeed want to help her and support her, suggesting that Ms. Kane go to mental health, Ms. Kane told her that “she doesn’t trust the therapists and that she doesn’t trust in the records; that SRS is wrong; that Judge McKittrick is the prosecutor; that all the social workers are crazy; [and] that she is the only one who is okay.”
Ms. Pallares-Hernandez’ efforts to help Ms. Kane included several letters which she wrote to Ms. Kane and home visits to encourage her to get the treatment that she desperately needed to improve the family’s emotional environment so that JEH could be reunited with them. In a letter dated August 22, 1986, she told Ms. Kane that contacting a psychologist was at that time the only way to help her son. On October 1, 1986, she mailed another letter to Ms. Kane encouraging her to get psychological evaluations and reminding her of the upcoming hearing. In February 1987, after the November hearing was continued to give Ms. Kane additional time to comply with the treatment plan, Ms. Pallares-Hernandez wrote another letter reminding her about the importance of complying with the treatment plan before the next court hearing. In that letter she wrote: “This is the only way to have your child back with you.”
On March 2, 1987, she again wrote to Ms. Kane, reminding her of the need to comply with the court order, outlining JEH’s visits to doctors and their diagnoses and again stating SRS’ position that the problem was the mother-child relationship. In addition to Ms. Pal lares-Hernandez letters, Ms. Kane’s previous attorney, Nancy Belcheff, in a letter dated February 18, 1987, noted that she too had received copies of the SRS letters and stated: “If you refuse, no lawyer in the world will be able to help you.”
Billy Miller began employment with the public defender’s office in Cascade County in early March of 1987. He met with Ms. Kane once prior to the termination hearing. He could not locate her file at that time. Mr. Miller testified that he received the file a few days before the hearing. The only witness Mr. Miller called at the hearing to testify on Ms. Kane’s behalf was her mother, who testified regarding the love between Ms. Kane and JEH.
The hearing went forward with the State calling witnesses and Mr. Miller cross-examining them. The order resulting from that hearing terminated Ms. Kane’s parental rights relating to JEH.
On April 27, 1990, Ms. Kane filed a complaint alleging that Mr. Miller had committed professional negligence. In her complaint Ms. Kane alleged that Mr. Miller assured her that he would request a continuance and the continuance would be granted, as well as numerous other inadequacies relating to Mr. Miller’s representation in the parental termination proceeding. The District Court granted Mr. Miller’s motion for summary judgment twelve days before the scheduled trial date of May 14, 1992.
Did the District Court err in granting defendant’s motion for summary judgment?
Summary judgment is proper under Rule 56(c), M.R.Civ.R, when the movant has shown that there is no genuine issue as to any material fact, in light of the substantive legal principles entitling the movant to judgment as a matter of law. Christopherson v. White, Inc. (1991), 250 Mont. 118, 120, 817 P.2d 1165, 1167. The purpose of Rule 56, M.R.Civ.P., is to dispose of those actions which do not raise genuine issues of material fact, and to eliminate the expense and burden of unnecessary trials. Berens v. Wilson (1990), 246 Mont. 269, 271, 806 P.2d 14, 16.
“Our scope of review is the same as the trial court and is a question of law. If as a matter of law no genuine issue of material fact exists summary judgment is granted.” Christopherson, 817 P.2d at 1167. Generally, negligence issues are not susceptible to summary judgment motions because of the factual issues involved in such cases. Lorash v. Epstein (1989), 236 Mont. 21, 24, 767 P.2d 1335, 1337. This case, however, does not involve factual issues germane to a negligence determination as our decision is based on an assumption that Mr. Miller may have been negligent.
In 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. Merzlak v. Purcell (1992), 252 Mont. 527, 830 P.2d 1278.
Clearly the first element was met in this case. There is no dispute that an attorney-client relationship existed between Ms. Kane and Mr. Miller. The second element requires Ms. Kane to establish that Mr. Miller’s conduct constituted a failure to use reasonable care and skill; that is, that he breached his duty to his client. Here, we have assumed that Mr. Miller may have been negligent. However, such breach of duty alone is not sufficient to establish liability for professional negligence.
The third element that Ms. Kane must prove is that Mr. Miller’s negligence proximately caused her injury and damages. In this case, to withstand Mr. Miller’s motion for summary judgment, Ms. Kane needed to establish that “but for” Mr. Miller’s negligence, the result of the hearing to terminate parental rights would have been different. Failure to prove causation and damages is fatal to an attorney malpractice action. Kinniburgh v. Garrity (1990), 244 Mont. 350, 355, 798 P.2d 102, 105. Ms. Kane must show that “but for” Mr. Miller’s conduct, her parental rights would not have been terminated as a result of the April 2, 1987 hearing.
Ms. Kane presented evidence that Nancy Pallares-Hernandez, the SRS social worker, if asked, would have requested that the hearing be postponed, thus giving Ms. Kane a third chance to comply with the stipulated treatment plan. The decisive question in this case, however, is not whether Ms. Pallares-Hernandez would have agreed to a continuance and the plaintiff would then have complied with the treatment plan, but whether a continuance would have made any difference in the result.
The record establishes that such evidence would not have made any difference here. The defendant submitted an affidavit by Judge Joel G. Roth, the presiding judge in the termination hearing. Judge Roth stated that he had two reasons for terminating Ms. Kane’s parental rights: (1) he was unpersuaded that she would comply with the treatment even if she was given yet another chance, and (2) that further delay in the resolution of the case would not serve the best interests of the child. In his affidavit Judge Roth stated:
Despite argument presented at the final hearing by Billy Miller, on Ms. Kane’s behalf, that she had recently become involved in the parenting program at the YWCA, that they were attempting to get her into a mental health program, and that she should be given yet another chance to comply with the treatment plan, this Court was unpersuaded that Ms. Kane would actually comply.
The court gave the following reasons for its belief that Ms. Kane would not comply with its prior order: (1) that she had consistently denied that she needed treatment, (2) that she did not accept the diagnosis that the child had emotional problems, (3) she continued to seek a medical reason for the child’s problems, and (4) she had a pattern of externalizing any basis for the family’s disfunction.
Most importantly, Judge Roth stated that only presentation of evidence that Ms. Kane had, in fact, complied with the treatment plan would have altered his decision to terminate her parental rights. Ms. Kane’s failure to complete her treatment plan was established by uncontradicted evidence.
The environment provided by Yellowstone Boys and Girls Ranch has provided the structure and stability that Ms. Kane was unable to provide. Uncontested evidence indicates that Yellowstone Boys and Girls Ranch has been beneficial to JEH during his extended stay there. Since he has been living in Yellowstone Boys and Girls Ranch, JEH has again done well in school and has responded to their therapy.
The record establishes that Mr. Miller did argue that Ms. Kane should be given another chance. Although he did not file a written motion for a continuance, he stated as follows:
... [CJlearly, your Honor, ... the best interest of the child is the paramount objective of this hearing, and the fact that we have established, by way of testimony, that the love between the mother and child is quite extensive, to the point that when we talk about the best interests of the child, that is one of the ... top objectives .... Now, we have problems .... [JEH] probably will not be adopted. So it’s our recommendation, Judge, that you actually permit us to find some type of program ... for Karren to participate in and give us a certain length of time to actually comply to the court’s order. Therefore, we ask for a postponement of your disposition of this case and give us an opportunity. Sure, she has had a couple in the past, but I feel that what we have here is so unique, it requires more than just two opportunities .... If we have that opportunity, I feel we would at least have given it our best shot in trying to establish a better home for [JEH] and trying to establish a relationship between mother and child whereby we’ll be able to look back ... and say we have done justice to both individuals, [JEH] and his mother.
Ms. Kane argues that the crucial fact question Judge Roth failed to address in his affidavit is what he would have done if Mr. Miller had asked for a continuance. We do not find this to be a question of fact requiring resolution as the above excerpt from the transcript of the hearing indicates that Mr. Miller did ask for another opportunity, although he did not specifically mention the word “continuance.”
Of paramount importance is the best interest of the child. Judge Roth found it was in the youth’s best interest to terminate Ms. Kane’s parental rights so that JEH could continue treatment in a therapeutic foster home and be placed in a permanent home when emotionally ready. Ms. Kane failed to present any evidence to prove that the best interests of the child were not served.
Ms. Kane also failed to present any facts which would establish that Mr. Miller’s actions were the proximate cause of the District Court’s decision to terminate her parental rights with regard to JEH. We conclude that Ms. Kane has not established that “but for” Mr. Miller’s actions, the result in this case would have been different.
We hold that the District Court properly granted Mr. Miller’s motion for summary judgment.
Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES HUNT, HARRISON and McDONOUGH concur. | [
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] |
JUSTICE McDONOUGH
delivered the Opinion of the Court.
The Dowers appeal from a judgment of the Eighth Judicial District Court, Cascade County, finding that they fraudulently induced plaintiffs Dew, Dresch and Posey to enter contracts for deed. We affirm liability, but reverse and remand to recalculate damages.
This case previously came before us after the District Court granted a directed verdict in favor of the Dowers. Dew v. Dower (1989), 237 Mont. 476, 774 P.2d 989 (Dew I). In Dew I, we ruled that a jury question existed as to whether the Dowers fraudulently induced the plaintiffs into entering contracts for deed. Dew, 774 P.2d at 991.
Following a subsequent trial, the District Court determined that Alice Dower did fraudulently induce the plaintiffs to purchase property. The court found that she misrepresented the intended quality of road she promised to build as access to the property. Accordingly, the court granted monetary damages to each of the plaintiffs.
The issues on appeal are restated as follows:
1. Whether the District Court erred in admitting parol evidence that Alice Dower orally promised to improve the road, without first requiring plaintiffs to prove that she intended to defraud them.
2. Whether the District Court erred in determining that Alice Dower intended to defraud the plaintiffs when she induced them into entering the contracts for deed.
3. Whether the statute of limitations barred plaintiffs’ claims of fraud against the Dowers.
4. Whether the District Court erred in determining damages.
A. Whether the court’s property valuation was clearly erroneous.
B. Whether the District Court erred in awarding prejudgment interest.
C. Whether one co-tenant can sue for tort damages in a personal action arising from the tenancy and recover the entire amount of damages to both him and the other co-tenant.
D. Whether a court has jurisdiction to offset a tort judgment with the amount the plaintiffs owe the defendants on the contracts underlying the tort.
In May 1981, the Dowers purchased 205 acres of undeveloped land south of Great Falls, Montana for $75,000. They subdivided the land into ten tracts, each consisting of approximately twenty acres. During 1982 and 1983, the Dowers sold some of the tracts to the plaintiffs through separate contracts for deed.
The purchase price was $1000 per acre. Defendant Alice Dower admitted at trial that she set the price based on intended roadway improvements. In addition, she told plaintiff Dew that the purchase price reflected the fact that she would construct improved roadways.
Before entering into any agreements, Alice Dower told each plaintiff that she would provide improved access roads to the tracts. She showed each of the plaintiffs a survey plat depicting sixty-foot rights-of-way reserved for roadways in two locations on the property. While showing the property to prospective buyers, she pointed out some stakes marking the rights-of-way. She told each of the plaintiffs that between the stakes she would build a road with a twelve-foot wide ditch on each side.
The parties all agree that Alice Dower promised to improve the roads. The parties also agree that when she promised to provide access from the county roads to the plaintiffs’ tracts, she told them she could not guarantee the location of the access. She could not guarantee the location because she was negotiating a relocation of the railroad crossing with Burlington Northern Railroad (BN). The dispute centered on whether she promised county-grade roads or merely promised to improve the roads.
The evidence showed that the minimum “county-grade” road for Cascade County is a gravel road twenty-eight feet wide from shoulder to shoulder. The gravel on the shoulders may taper off beyond the outside edges. The roadbed must consist of a twenty-four foot wide surface with a base of eight inches of pit run gravel covered with two inches of 1 1/2 inch minus crushed gravel.
Alice Dower testified that she promised to provide a passable access road, but she denies promising county-grade roads. According to realtor Ken Stone, however, Alice Dower said she would construct county-grade roads with ditches. Stone testified that she told him county-grade roads were necessary for the county to assume responsibility for maintaining the roads. Alice Dower testified she intended that Stone relay what she told him to prospective purchasers.
Stone testified that he informed plaintiff Dresch that the Dowers would construct roads and turn them over to the county for maintenance. Dresch corroborated Stone’s testimony. Likewise, plaintiffs Dew and Posey testified that Alice Dower told them, during their respective negotiations, that she would construct county-grade roads. That way, she told them, the land owners could petition the county to maintain the roads and the county could not deny their request.
In the summer of 1983, after the plaintiffs had purchased all but one of their respective tracts, the Dowers did some road work. Defendant Douglas Dower and another man leveled out one access road where it intersected the county road and made a pass over both access roads with a grader. The Dowers did some additional road construction in the summer or fall of 1985. However, it is -undisputed that the road construction did not improve the roads to county-grade standards.
According to Douglas Dower, roots and grass remained in the road after he worked on it. He testified that an automobile could navigate the road in good weather, but a person would need a chained-up four wheel drive vehicle to travel the road in wet weather. He also testified that his idea of the roadway was something like two parallel cow paths and he never intended to do any work on the road other than what he completed that day in 1983.
At trial, the plaintiffs introduced photographs of the roads as they looked in 1987. The pictures show narrow, one-lane dirt roads with deep ruts and no gravel. Alice Dower said that the pictures accurately reflect the improved roadways she promised the plaintiffs, but the roads had gone three years -without maintenance. She testified that she had adequately performed her promises to provide the plaintiffs with improved roadways.
This opinion refers to additional facts where they are pertinent to the discussion.
I.
Did the District Court err in admitting parol evidence that Alice Dower orally promised to improve the road, without first requiring the plaintiffs to prove that she intended to defraud them?
The Dowers contend that evidence of Alice Dower’s promises of future road construction was not admissible unless the plaintiffs first showed that she intended to defraud them when she made the promises. The Dowers further argue that the parol evidence rule prevents the court from considering any oral statements made before the parties entered the contracts for deed.
We need not delve into the merits of these contentions because the Dowers failed to object at trial to testimony about promises concerning the road construction. Without a proper objection at trial, the Dowers waived the right to raise the matter on appeal. See Matter ofB.L.O. (1984), 213Mont. 164,169,689P.2d 1246,1249. Accordingly, we hold that the District Court did not err in allowing parol evidence concerning Alice Dower’s promises to improve the road.
The Dowers also argue that the court’s conclusion of law “D” incorrectly states the law. We disagree.
Conclusion of law “D” states:
Fraud in the inducement has always been provable by parol evidence, notwithstanding the Parol Evidence Rule. Dodds v. Gibson Products Company of Western Montana [(1979), 181 Mont. 373, 377, 593 P2d 1022, 1024]. When plaintiffs allege fraud in the inducement, it is incumbent on the Court to admit parol evidence on the question. Dodds, [593 P.2d at 1025].
In Dew I we cited Dodds for the proposition that to prove fraud in the inducement based on promises to be performed in the future, plaintiffs must also introduce evidence that the defendant intended to defraud them at the time she made the promises. See Dew, 774 P.2d at 990.
The Dowers interpret Dew I to mean that before the District Court could allow any parol evidence concerning Alice Dower’s promises concerning road construction, the plaintiffs first had to prove that she intended to fraudulently induce them to enter the contracts. However, this is not necessary as long as the plaintiffs ultimately present a prima facie case of fraud in the inducement. The parol evidence rule does not apply in cases such as this one, because the alleged fraud does not directly contradict the terms of the express written contract. See Sherrodd v. Morrison-Knudsen (1991), 249 Mont. 282, 285, 815 P.2d 1135, 1137.
The District Court took conclusion of law “D” almost verbatim from Dodds, 593 P.2d at 1024, 1025. We conclude that conclusion of law “D” is accurate and a more definitive statement of the law than the Dowers’ interpretation.
II.
Did Alice Dower intend to defraud the plaintiffs when she induced them into entering the contracts for deed?
The issue of whether Alice Dower had an intent to defraud presents a question of fact. This Court will not set aside factual findings of a trial judge sitting without a jury unless the findings are clearly erroneous. Rule 52(a), M.R.Civ.R
This Court uses a three part test to determine if a finding is “clearly erroneous” as provided in Rule 52(a). First, we review the record to see if substantial evidence supports the finding. If the necessary evidence exists, we then determine whether the trial court misapprehended that evidence. Finally, although the trial court correctly construed the evidence, we may still determine that a finding is clearly erroneous if we have a definite and firm conviction that the trial court made a mistake. Interstate Prod. Credit v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287.
The following evidence supports the District Court’s finding that Dower intended to defraud the plaintiffs when she induced them to enter the contracts for deed.
Alice Dower showed the plaintiffs a survey plat depicting 60-foot rights-of-way where she promised she would construct improved roads. While showing the property to each of the plaintiffs at various times from 1982-83, she pointed out stakes marking where she intended to construct the improved access roads. She testified that she informed the plaintiffs she was a real estate broker so they would rely on her promises to provide improved access roads.
Plaintiffs Dew and Posey testified that Alice Dower promised to improve the roads to county-grade standards and they relied on her promises. A realtor testified that Alice Dower asked him to tell prospective buyers that she would provide county grade roads so the county would maintain the roads for the subdivision. The realtor relayed the information to Dresch, who relied on it.
Alice Dower disputes their testimony, stating that she merely promised to improve the roads. In a bench trial, the judge has the best opportunity to ascertain the credibility of a witness. Rule 52(a), M.R.Civ.P. Apparently, the judge did not find Alice Dower a credible witness on this point, as he found that she promised to improve the roads to county-grade standards.
Alice Dower knew about county-grade roads. Before Posey purchased his tract, he asked her the significance of a county-grade road. She gave a description that substantially fit a county-grade road.
The plaintiffs introduced photographs of the roads as they looked in 1987. The court found, and we agree, that the roads shown in the plaintiffs’ photographs are obviously not, and never were, up to county-grade standards as promised by Alice Dower. According to Alice Dower, the photographs accurately reflect the improvements she intended when she promised the plaintiffs improved roads. If, as Alice Dower testified, the rough-graded dirt roads in the photographs depict the roads that she intended when she promised county-grade roads, then it is clear that the District Court could find she had no intention of performing her promises when she told the plaintiffs she would construct county-grade roads.
As the court concluded, there is substantial evidence that Alice Dower had no intention of performing her promises when she made them. We do not have a definite and firm conviction that the District Court made a mistake. Consequently, we hold that the court did not err in finding that Alice Dower intended to defraud the plaintiffs when they entered their respective contracts for deed.
III.
Did the statute of limitations bar the plaintiffs’ claims of fraud against the Dowers?
Plaintiffs filed suit in October 1986. The applicable statute of limitations is as follows:
The period prescribed for commencement of an action for relief on the ground of fraud or mistake is within 2 years, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the fact constituting the fraud or mistake.
Section 27-2-203, MCA.
The District Court determined that the cause of action accrued in the summer or early fall of 1985. The time at which the statute of limitations began to run is a question of fact. Accordingly, we will not set aside the court’s finding unless it is clearly erroneous under the three part test discussed above. See Rule 52(a), M.R.Civ.P.; DeSaye, 820 P.2d at 1287.
The following evidence supports the court’s determination that the statute of limitations did not bar the plaintiff’s fraud claims against the Dowers.
Dresch testified that, before the plaintiffs filed suit, he contacted the Dowers every three or four months for four years. He testified that the Dowers continually assured him they would do road construction and gave him various excuses why the work had not yet commenced. The Dowers’ main excuse was that they were working with BN on an alternative easement across the railroad tracks.
BN had denied requests to allow a railroad crossing, so the Dowers filed for a prescriptive easement early in 1985. In the spring of 1985, Alice Dower told Dresch that once BN had time to react to notice of the prescriptive easement, she would bring the access road up to standard. She said she would have to wait two months so BN would have sufficient time to react. Dew testified that Alice Dower told him the same thing.
Dew further testified that in September or October of 1985, he asked Alice Dower when she planned to improve the roads. She told him that she still planned to have the work done but it was too muddy to get the gravel trucks in and out of the area.
Alice Dower testified that she actually had road construction done three times. In 1983, she had a grader scrape the road. In August or September of 1985, she had some work done on a ditch along one of the roads. She also had a mudhole filled in and a culvert installed. Dew testified that the last of this work was done in the fall of 1985.
In the fall of 1983, after the grader made a pass over the roads, Posey called Alice Dower. She told him that she would not do any more work on the upper road. Posey did not discuss the roads with the Dowers again. He did, however, communicate with Dew and Dresch about their conversations with the Dowers on the subject. Posey and Dew were friends and because Dew and the Dowers were related by marriage, Posey relied on Dew to communicate with the Dowers about the road construction.
The court found that with the exception of one conversation with Posey in 1983, the Dowers continued through the summer or fall of 1985 to assure the plaintiffs that they would improve the roads as Alice Dower had promised. Until the early fall of 1985, the Dowers’ statements and actions led the plaintiffs to believe that the Dowers would do the road construction as promised.
We find there was substantial evidence to support the court’s determination that the statute of limitations did not begin to run for any of the plaintiffs until at least the early fall of 1985, the earliest time the plaintiffs could have discovered all of the facts constituting the fraud.
The plaintiffs filed their case in October 1986, which is within the two year statute of limitations as prescribed in § 27-2-203, MCA. The court did not misapprehend the evidence and we do not have a definite and firm conviction that the District Court made a mistake. We therefore hold that the statute of limitations does not operate to bar the claims of any of the plaintiffs.
IV.
Did the District Court err in determining damages?
The court awarded each plaintiff damages representing the difference between the amount plaintiffs paid for their property, $1000 per acre, and the fair market value of the property following the actual improvements completed on the roadways by the Dowers, $500 per acre. In other words, the court awarded each plaintiff $500 multiplied by 20 acres multiplied by the number of 20 acre tracts purchased by that plaintiff.
The court also awarded prejudgment interest at a rate of 10% simple interest per annum beginning in August 1983. The court approximated that the damages were fixed when the Dowers performed the road improvements at that time.
Dresch purchased one lot before August 1983. The court calculated his damages as $10,000 principal plus 10% per annum from August 1983 through February 1992. Specifically, $10,000 plus $1000 interest per year for eight and one-half years, which equals $18,500.
Likewise, Posey purchased one lot before August 1983. Total judgment in his favor was also $18,500.
Dew negotiated the purchase of seven lots before August 1983. He had entered contracts for deed on six of the lots before that date and he entered the seventh in February 1984. The court calculated Dew’s damages as $70,000 principal plus interest at a rate of 10% per annum on the principal. Interest on the $70,000judgmentwas $8,500 per tract, for a total prejudgment interest award of $59,500. Total judgment in favor of Dew was $129,500.
The court also ruled that each plaintiff should receive post-judgment interest on the unpaid balance at the rate of 10% per annum until paid in full. In addition, the court ruled that the damage awards would be offset by the amount of money each plaintiff owed the Dowers under the respective contracts for deed.
A. Was the court’s property valuation clearly erroneous?
The Dowers contend that the District Court erred by determining damages in the amount of $500 per acre. They argue that $1000 per acre was a reasonable value for the property.
The Dowers paid $366 per acre for 205 acres in May 1981. They sold the property to the plaintiffs in 20 acre tracts for $1000 per acre in 1982-83. Alice Dower testified that the sale price reflected the fact that she would provide improved roadways from the county road through the subdivided tracts. The plaintiffs each testified that they agreed to pay $1000 per acre because she promised to provide the subdivision with county-grade roads.
The plaintiffs as landowners had a right to give reasonable testimony as to the value of their property for the uses to which they put the property. See Zugg v. Ramage (1989), 239 Mont. 292, 297, 779 P.2d 913, 916; State Highway Comm’n v. Marsh (1974), 165 Mont. 198, 203, 527 P.2d 573,575. Dew testified that his property was worth $400 per acre after the Dowers completed the road construction in the summer of 1983. He further testified that the 1983 road construction made access even more difficult than before, because it created runoff areas converging at the main access. According to Posey, the fair market value of his property was $500-$600 per acre following the road construction. Dresch estimated that his property was worth $500 per acre in the summer of 1983.
The Dowers presented their own evidence of higher property values, but the court found the plaintiffs’ evidence more convincing. The District Court determined that $500 was a reasonable estimation of the property’s fair market value after the road construction in 1983.
Substantial evidence supports the District Court’s valuation and the court did not misconstrue the evidence. We do not have a firm and definite conviction that the court made a mistake. Consequently, we find no cause to disturb the court’s determination of the property values. See DeSaye, 820 P.2d at 1287; Rule 52(a), M.R.Civ.P.
B. Did the District Court err in awarding prejudgment interest?
The Dowers contend that the District Court did not have a legal basis to award prejudgment interest. As this presents a question of law, we determine whether the District Court was correct. See Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601, 603.
The court cited § 27-1-212, MCA, as authority for its prejudgment interest award. That statute states in pertinent part: “In an action for the breach of an obligation not arising from contract and in every case of oppression, fraud, or malice, interest may be given, in the discretion of the jury.” Section 27-1-212, MCA. The Dowers argue that because the trier of fact in this case was a judge, rather than a jury, the court had no authority to award prejudgment interest. We disagree.
Montana patterned the statute after the California Civil Code § 3288. When interpreting a statute adopted from a sister state, we generally follow the construction placed on the statute by the highest court of the state from which it was adopted. State v. Murphy (1977), 174 Mont. 307, 311, 570 P.2d 1103, 1105. The pertinent language of § 27-1-212, MCA, is identical to that of the California statute.
The California Supreme Court noted that while the statute grants authority to award prejudgment interest only “to the ‘jury,’ the trial court, when acting as the trier of fact, may award prejudgment interest under [the statute].” Bullis v. Security Pac. Nat’l Bank (Calif. 1978), 582 P.2d 109, 116 n.16. Similarly, we hold that § 27-1-212, MCA, gives a District Court judge authority to award prejudgment interest when the judge, rather than a jury, is sitting as the trier of fact.
The Dowers further argue that the discretionary interest statute, § 27-1-212, MCA, does not give a court the authority to award prejudgment interest, unless the court can pinpoint a date from which the defendants owed and should have paid a sum certain to the plaintiffs. As authority for their argument, the Dowers cite several cases interpreting a different statute, § 27-1-211, MCA. See Thayer v. Hicks (1990), 243 Mont. 138, 793 P.2d 784; McPherson v. Schlemmer (1988), 230 Mont. 81, 749 P.2d 51; Safeco Ins. Co. v. Lovely Agency (1985), 215 Mont. 420, 697 P.2d 1354. That statute gives a person the right to recover prejudgment interest only from the particular day that the right to a sum certain in damages vests. Section 27-1-211, MCA; Thayer, 793 P.2d at 796.
In this case, the District Court awarded interest under the discretionary interest statute, § 27-1-212, MCA, rather than the right to interest statute, § 27-1-211, MCA. The statute on discretionary interest awards does not specify rigid certainty requirements, as does the right to interest statute. See § 27-1-212, MCA; § 27-1-211, MCA.
In contested fraud cases, like contested negligence cases, the right to recover a sum certain in damages usually does not vest until the date of the court’s judgment. Cf. McPherson, 749 P.2d at 54 (in cases where liability for negligence is contested, the right to recover damages vests “only on the date of the jury verdict, not on an earlier date certain”). Therefore, to interpret the discretionary interest statute to require absolute certainty, as to the specific time a sum certain in damages vests, before the trier of fact may award prejudgment interest would render the statute inoperative as to fraud cases. “An interpretation which gives effect is preferred to one which makes void.” Section 1-3-232, MCA.
In addition, the Supreme Court of California has held that the statute allows a trier of fact to award prejudgment interest whether or not plaintiff’s damages are “liquidated” before entry of judgment. Redke v. Silvertrust (Calif. 1971), 490 P.2d 805, 812. Likewise, we hold that in cases where it applies, § 27-1-212, MCA, gives the trier of fact the discretion to award prejudgment interest whether or not the plaintiff’s right to receive a sum certain in damages has vested before judgment. The District Court was correct in determining that the statute gave it discretionary authority to award prejudgment interest in this case.
The Dowers further contend that the District Court erred in awarding plaintiff Dew interest for damages on the last tract he purchased, starting before he purchased the tract. We agree.
The judge awarded interest from the day that the Dowers did the road construction. He determined that the damages were fixed on that day in August of 1983. Dew had purchased six tracts before August 1983, but he purchased a seventh tract in February 1984.
By awarding interest starting six months before Dew purchased the seventh tract, the District Court over-calculated the prejudgment interest due on Dew’s interest in that tract. We hold that interest on the seventh tract should begin on the date Dew purchased the tract.
C. May one co-tenant sue for tort damages in a personal action arising from the tenancy and recover the entire amount of damages to both him and the other co-tenant?
Initially, the wives of plaintiffs Dew, Dresch and Posey were also plaintiffs in the case because they were co-tenants with their respective husbands. An examination of the contracts for deed shows the vendees were tenants in common.
At trial, the claims of the female co-tenants were withdrawn during arguments on the Dowers’ motion for a directed verdict. Apparently, the plaintiffs saw no need to keep the female co-tenants as parties to the suit because there was no evidence that the Dowers made any misrepresentations to these women.
Although the plaintiffs each owned only a one-half interest in their respective tracts, the District Court awarded each plaintiff damages representing the difference between the amount each pair of co-tenants paid for their property and the fair market value of the property.
In Montana, a tenant in common may bring or defend an action in vindication of the tenant’s own rights without joining the other co-tenants as necessary parties. Section 70-1-310, MCA. However, absent an authorized agency relationship between co-tenants, we find no authority for one co-tenant to sue for the entire amount of tort damages to both him and the other co-tenant in a personal action arising out of the tenancy.
Adopting a general rule that allows one co-tenant to sue for all of the damages could easily infringe on the rights of another co-tenant, thus creating due process problems. See Mayo v. Jones (Wash.App. 1972), 505 P.2d 157, 161. In addition, co-tenants are not generally agents of each other and do not have the privity necessary for application of the doctrine of res judicata. 46 Am.Jur.2d Judgments § 573. Therefore, a rule allowing one co-tenant to sue in a personal action for the entire amount of tort damages for injury arising out of the tenancy could expose defendants to multiple actions.
Furthermore, the plaintiffs in this case asked the court to dismiss the female co-tenants from the suit because the Dowers did not make any misrepresentations to them. On dismissal with prejudice, the court lost jurisdiction over the female co-tenant’s interests in the property. See Rule 41(a), M.R.Civ.P.; Miller v. Northern Pac. Ry. (1904), 30 Mont. 289, 296, 76 R 691, 694. A court cannot rule outside of its appointed sphere. A court’s actions are void with respect to persons who are not party to its proceedings. Sloan v. Byers (1908), 37 Mont. 503, 510-13, 97 P. 855, 857-58.
Without deciding whether a single co-tenant may sue for tort damages for injury to the property itself and recover the entire amount, we hold that the court in this case erred in awarding damages for injury to the personal interests of persons who were not plaintiffs at the time of judgment. We remand to the District Court to determine the damages to the interests of the plaintiffs before the court.
D. Does a court have jurisdiction to offset a tort judgment with the amount the plaintiffs owe the defendants on the contracts underlying the tort?
The District Court required Alice Dower to file an accounting reflecting the principal balance due her from each of the plaintiffs for property purchased from her under the contracts for deed. The court then offset and credited the amounts due the plaintiffs from the judgment against the balance of the principal owed by the plaintiffs under the contracts for deed.
Generally, “a judgment must be based on a verdict or findings of the court and must be within the issues presented to the court.” Old Fashion Baptist Church v. Mont. Dep’t of Revenue (1983), 206 Mont. 451, 457, 671 P.2d 625, 628 (quoting National Surety Corp. v. Kruse (1948), 121 Mont. 202, 205-06, 192 P.2d 317, 319). In this case, the contracts themselves were not at issue before the court.
However, the respective obligations of the parties arise because of the same transaction, and the damages relate to the value of the premises and the purchase price, which was the basis of the principal under the contract. The District Court may act as a court of equity and use its authority to allow or compel set-off under special and peculiar circumstances like those presented in this case. The power to allow a set-off of debts by a court of equity exists independent of statute where grounds for equitable interposition are shown, such as fraud or insolvency. Southern Surety Co. of New York v. Maney (Okla. 1941), 121 P.2d 295, 298.
The District Court acted within its equitable authority when it offset the principal amounts due under the contracts with the judgment in this case. We affirm in part, reverse in part, and remand to the District Court to recalculate damages consistent with this opinion.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, HARRISON and WEBER concur. | [
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JUSTICE McDONOUGH
delivered the Opinion of the Court.
This is an appeal from an order of the Workers’ Compensation Court, dismissing Martelli’s claim for permanent total disability benefits. We affirm.
The dispositive issue is whether the Workers’ Compensation Court correctly refused jurisdiction of Martelli’s claim. The court dismissed his claim because he had failed to appeal a previous order of the Employment Relations Division of the Department of Labor and Industry (the Division), which concluded that he could return to work in a suitable related occupation.
On August 10, 1988, Martelli suffered a soft tissue injury to his neck when another vehicle struck his vehicle from the rear. The injury occurred in the course and scope of his employment as a law enforcement officer for Anaconda Deer-Lodge County.
The insurer designated a rehabilitation provider pursuant to § 39-71-1015, MCA (1987). The rehabilitation provider determined that eight full-time occupations were suited to Martelli’s education and skills. Later, she determined that Martelli could return to his previous occupation.
When Martelli did not return to work, the insurer notified the Division, which had jurisdiction of the matter pursuant to § 39-71-1033, MCA (1987), § 39-71-1018, MCA (1987) and 24.29.207 ARM. After the parties completed all of the administrative steps within the Division, the Division granted Martelli’s request for a hearing.
Following a contested hearing, the Division issued a final order, stating that an appropriate rehabilitation option under § 39-71-1012, MCA (1987) was for Martelli to return to a related occupation suited to his education and skills. The Division’s order also stated that “[a]ny party in interest may appeal this order to the Workers’ Compensation Court within ten (10) working days after the mailing of this final order as provided in Section 39-71-1018, MCA.” Martelli failed to appeal the order. Instead, over a year later, he filed a petition with the Workers’ Compensation Court seeking permanent total disability benefits.
Acting on a motion by Anaconda-Deer Lodge, the Workers’ Compensation Court dismissed Martelli’s petition. The court concluded that Martelli’s failure to appeal the Division’s final order precluded him from raising the permanent total disability issue before the court. This appeal followed.
Our review of the Workers’ Compensation Court’s conclusions of law is plenary. We determine whether the court’s conclusions are correct. Steer Inc. v. Dept, of Revenue (1990), 245 Mont. 470, 474-75, 803 R2d 601, 603.
Martelli contends that the Workers’ Compensation Court erred in declining to exercise jurisdiction in this case. He argues that by dismissing his petition for a hearing, the court not only abandoned its exclusive jurisdiction over the issue of whether he was entitled to benefits under the Workers’ Compensation Act, but also gave the Division jurisdiction over the matter. See § 39-71-2905, MCA (1987) (giving the workers’ compensation judge exclusive jurisdiction over claims for benefits).
Anaconda-Deer Lodge contends that the doctrine of collateral estoppel bars Martelli from litigating in Workers’ Compensation Court the issue of whether he was permanently and totally disabled. Anaconda-Deer Lodge argues that because of the interplay between the issue before the Workers’ Compensation Court and the issue previously litigated before the Division, the court would have to relitigate the issue decided by the Division to determine whether Martelli was entitled to permanent total disability benefits. We agree.
The doctrine of collateral estoppel, also called issue preclusion, “precludes relitigation of issues actually litigated and determined in [a] prior suit regardless of whether it was based on the same cause of action as the second suit.” Lawlor v. National Screen Service (1955), 349 U.S. 322, 326, 75 S.Ct. 865, 867, 99 L.Ed. 1122, 1127; see also Smith v. Schweigert (1990), 241 Mont. 54, 58, 785 P.2d 195, 197. The three elements of collateral estoppel are:
1. The issue has been decided in a prior adjudication and is identical to the one presented.
2. A final judgment on the merits was issued.
3. The party against whom the plea is asserted was either a party or in privity with a party to the prior adjudication.
Schweigert, 785 P.2d at 197.
It is clear and undisputed that the present case meets the second and third elements of collateral estoppel. The Division issued an order of final determination which Martelli could have appealed to the Workers’ Compensation Court. See § 39-71-1018, MCA (1987). Martelli did not appeal the Division’s order so it became a final judgment. Thus, the second element of collateral estoppel is clearly-met. All parties to this cause were also parties to the litigation before the Division. The third element of collateral estoppel is therefore satisfied.
The first element, however, is in dispute. To meet the first element, the precise issue must have been litigated in a prior action. Marriage of Stout (1985), 216 Mont. 342, 350, 701 P.2d 729, 734.
Martelli contends that the issue before the Division was not the same as that before the Workers’ Compensation Court. He argues that the issue before the Workers’ Compensation Court was whether he was entitled to benefits for a permanent total disability as defined in § 39-71-116(15), MCA(1987), whereas the issue before the Division was to determine which rehabilitation option under § 39-71-1012, MCA (1987) would be appropriate for him.
Under the circumstances of this case, the two issues are so intertwined that to decide the issue before it, the Workers’ Compensation Court would have to rehear the precise issue previously decided by the Division. The definition of permanent total disability is “a condition resulting from injury as defined in this chapter after a worker reaches maximum healing, in which a worker is unable to return to work in the worker’s job pool after exhausting all options set forth in 39-71-1012, MCA.” One of the options set forth in that statute is the precise issue previously resolved by the Division — whether the worker could “return to a related occupation suited to the claimant’s education and marketable skills.” See § 39-71-1012(c), MCA (1987).
To rule that Martelli was permanently and totally disabled, the Workers’ Compensation Court would have to determine that Martelli could not return to a related occupation suited to his education and skills. See §§ 39-71-116(15), 39-71-1012(c), MCA (1987). As stated above, the Division had previously ruled that Martelli could return to work in a suitable related occupation and Martelli did not appeal the Division’s order. The doctrine of collateral estoppel, therefore, precluded the parties from relitigating the issue before the Workers’ Compensation Court. See Schweigert, 785 P.2d at 197.
Because the parties could not relitigate the issue, the Workers’ Compensation Court was bound by the Division’s determination that Martelli could return to a related occupation suited to his education and skills. Because he could work in a suitable occupation, the Workers’ Compensation Court could not possibly determine that Martelli was permanently and totally disabled. Thus, the court was correct in declining jurisdiction in this cause.
Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, HARRISON and WEBER concur. | [
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OPINION AND ORDER
Kenneth S. Robbins comes before this Court with a Petition for Writ of Habeas Corpus. Petitioner was released from Montana State Prison on April 29, 1993, and is presently serving probation on the suspended portion of his sentence handed down in March 1982 in Sheridan County for Criminal Sale of Dangerous Drugs and Criminal Possession with Intent to Sell.
The issue raised by Petitioner is whether he has been properly ordered to serve probation or if, alternatively, he has completely discharged his sentence.
The pertinent facts are as follows: On April 1,1982, Petitioner, on his plea of guilty to Criminal Sale of Dangerous Drugs and Criminal Possession with Intent to Sell in Sheridan County, received a sentence of fifteen years with ten years suspended.
On April 28,1986, while on parole for the Sheridan County conviction, Petitioner pled guilty to two counts of Criminal Sale of Dangerous Drugs in Gallatin County. On May 16, 1986, he received two concurrent twelve year sentences on his plea. The District Court, however, failed to specify whether the Gallatin County sentences were to run consecutively or concurrently with the Sheridan County sentences.
On June 26, 1986, Petitioner’s parole on the Sheridan County Convictions was revoked and he was ordered incarcerated until his discharge date in August 1986.
Petitioner was discharged from the Montana State Prison on April 29, 1993, on the Gallatin County charges, but he then was placed on ten years probation as a result of the ten year suspended sentence in Sheridan County.
Section 46-18-401, MCA (1985), provides, in pertinent part:
(1) Unless the judge otherwise orders:
(a) whenever a person serving a term of commitment imposed by a court in this state is committed for another offense, the shorter term or shorter remaining term shall be merged in the other term except as provided in subsection (5); and
(b) whenever a person under suspended sentence or on probation for an offense committed in this state is sentenced for another offense, the period still to be served on suspended sentence or probation shall be merged in any new sentence of commitment or probation.
(5) Except as provided in this subsection, whenever a prisoner is sentenced for an offense committed while he was imprisoned in the state prison or while he was released on parole or under the supervised release program, the new sentence runs consecutively with the remainder of the original sentence. The prisoner starts serving the new sentence when the original sentence has expired or when he is released on parole under chapter 23, part 2, of this title in regard to the original sentence, whichever is sooner. In the latter case, the sentences run concurrently from the time of his release on parole.
Petitioner relies on Petition of Arledge (1988), 232 Mont. 450, 756 P.2d 1169, wherein we held, in the absence of a lower court order specifying whether sentences in the Fourth and Eleventh Judicial Districts were consecutive or concurrent, that § 46-18-401(1)(a), MCA, required merger of sentences imposed by the Eleventh Judicial District with those imposed by the Fourth Judicial District.
We did not discuss in our opinion, however, the application of subsection (5) where, as in the instant case, the defendant is convicted or pleads guilty to a subsequent offense while on parole, nor did we consider the application of subsection (l)(b), when the defendant is also under a suspended sentence at the time of his conviction of or plea to the second offense.
Because we did not consider the application of subsections (l)(b) and (5) to the facts in Arledge, we limit our holding on Issue II in Arledge to that case.
In construing a statute where there are several provisions or particulars, the function of this Court is, if possible, to adopt a construction that will give effect to all. Section 1-2-101, MCA.
In the absence of the sentencing court’s order to the contrary, subsection (5) of the statute provides an exception to the general requirement of merger set forth in subsection (l)(a), if the prisoner is sentenced for an offense committed while he is imprisoned in the state prison or while he is released on parole or under the supervised release program.
In the instant case, Petitioner was on parole from the Sheridan County sentence when he was sentenced in Gallatin County. Since the District Court in Gallatin County failed to specify whether the sentences in that case were to be served consecutively or concurrently with the Sheridan County sentences, § 46-18-401(5), MCA, required that the “new” (Gallatin County) sentence run consecutively with the remainder of the “original” (Sheridan County) sentence with the defendant to start serving the “new” (Gallatin County) sentence when the “original” (Sheridan County) sentence expired.
Since Petitioner was also under suspended sentence from Sheridan County at the time he was sentenced on the Gallatin County offenses, subsection (l)(b) required the suspended Sheridan County sentence be merged in the Gallatin County sentences.
The net result of the application of subsections 46-18-401(l)(b) and (5), MCA, is that the Gallatin County sentences commenced to run when the Petitioner’s Sheridan County sentence expired, taking into consideration that the suspended portion of the Sheridan County sentence was merged in the Gallatin County sentences.
There is no authority under § 46-18-401(5), MCA, for the State to require the Petitioner to serve the suspended portion of his “original” (Sheridan County) sentence consecutively with the end of his “new” (Gallatin County) sentence. The plain language of that subsection of the statute requires precisely the opposite, that is, that the “original” sentence be served before the “new” sentence commences to run.
The Petitioner having been discharged from the Gallatin County sentence and the suspended portion of the Sheridan County sentence having been merged in the Gallatin County sentence,
IT IS HEREBY ORDERED that Petitioner be discharged from his probation on the Sheridan County sentence.
DATED this 25th day of May, 1993.
/S/J. A. TURNAGE, Chief, Justice
/S/ TERRY N. TRIEWEILER, Justice
/S/ WILLIAM E. HUNT, SR., Justice
/S/ JOHN CONWAY HARRISON, Justice
/S/ JAMES C. NELSON, Justice
/S/ FRED J. WEBER, Justice | [
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JUSTICE TRIEWEILER
delivered the Opinion of the Court.
Plaintiff Gloria Califato filed her complaint in the District Court of the Twentieth Judicial District, Lake County, as guardian ad litem on behalf of her son, Ryan Johnson. She alleged that he was injured while operating a vehicle owned by Russell Gerke because the seat-belts had been rendered inoperable by Russell’s son, Rusty Gerke. Pursuant to Rule 12(c), M.R.Civ.P., defendants moved for judgment on the pleadings. Plaintiff moved the court to order, by summary judgment, that § 61-9-409, MCA, established a standard of care applicable to defendants, and that its violation was negligence as a matter of law. The District Court denied defendants’ motion, granted plaintiff’s motion, and pursuant to stipulation of the parties, certified its judgment as final for purposes of appeal, pursuant to Rule 54(b), M.R.Civ.P. From that judgment, defendants appeal. We affirm.
The issue on appeal is:
Can an alleged failure to comply with § 61-9-409, MCA, form the basis for plaintiff’s cause of action, or is such claim barred by the terms of § 61-13-106, MCA, and by our decision in. Kopischke v. First Continental Corporation (1980), 187 Mont. 471, 610 P.2d 668?
For purposes of this appeal, the allegations in plaintiff’s complaint are assumed to be true. Those facts are as follows:
On November 19, 1989, Ryan Johnson and Rusty Gerke drove in Russell Gerke’s pickup from Poison to Kalispell. On the return trip, Rusty was tired. He asked Ryan to drive, and Ryan agreed to do so.
Sometime prior to November 19,1989, Rusty had taken the seat-belt from the driver’s side of his father’s vehicle and used it to permanently fasten a stereo speaker behind the seat. For that reason, even though Ryan normally used a seatbelt, he was prevented from doing so on the return trip from Kalispell to Poison.
While Ryan was proceeding in a southerly direction on Highway 93, an oncoming vehicle crossed over the center line and into the southbound lane. Ryan took evasive action to avoid a head-on collision, lost control of the vehicle, hit an embankment, and crashed into a barrow pit on the opposite side of the road. He was thrown through the windshield and out of the vehicle. After flying through the air a considerable distance, he landed on some boulders where he sustained a serious closed head injury, as well as injuries to other parts of his body.
Plaintiff alleged that Ryan’s injuries were caused by the negligence of the oncoming vehicle, but also from the concurrent negligence of the Gerkes. She alleged that Rusty was negligent by rendering the driver’s side seatbelt inoperable, and that Russell was negligent by allowing the seatbelt to be used in that fashion. She alleged that this conduct by both defendants violated § 61-9-409, MCA, and was, therefore, negligence per se.
In support of their motion for judgment based on the pleadings, defendants contended that:
1. Use or nonuse of seatbelts is inadmissible pursuant to our decision in Kopischke and § 61-13-106, MCA;
2. Section 61-9-409, MCA, did not impose a duty on the owner of a vehicle to maintain seatbelts in an operable condition; and
3. The unavailability of seatbelts in defendants’ vehicle could not, as a matter of law, have been the proximate cause of Ryan’s injury.
The District Court concluded that § 61-9-409, MCA, imposed a legal duty on defendants, and that its violation was negligence as a matter of law. Because these conclusions are interrelated with the District Court’s denial of defendants’ motion for judgment on the pleadings, we will limit our discussion to those issues raised by defendants in support of their motion.
ADMISSIBILITY OF SEATBELT USE
In Kopischke we held that since there was no statutory duty to wear a seatbelt, failure to use one which was available was not admissible to prove that an injured driver was contributorily negligent. We held that § 61-9-409, MCA, which required that vehicles manufactured after 1966 be equipped with seatbelts, and furthermore, that those vehicles not be operated unless the belts remained installed, did not require the driver of a vehicle to use the seatbelt. In 1987, the Montana Legislature created a statutory duty to use seatbelts when it enacted the “Montana Seatbelt Use Act.” See §§ 61-13-101 to -106, MCA. Section 61-13-103, MCA, of that Act, requires that no driver may operate a motor vehicle unless each occupant of a designated seating position is wearing a seatbelt. However, § 61-13-106, MCA, provides that:
Evidence of compliance or failure to comply with 61-13-103 is not admissible in any civil action for personal injury or property damage resulting from the use or operation of a motor vehicle, and failure to comply with 61-13-103 does not constitute negligence.
Defendants contend that if failure to use a seatbelt is inadmissible to establish Ryan’s contributory negligence, then plaintiff cannot offer evidence that Ryan had no seatbelt on at the time of this accident and there is no basis for plaintiff’s claim.
However, defendants confuse the duty discussed in Kopischke with the duty provided for in § 61-9-409, MCA.
In Kopischke, the issue was whether the defendant could offer evidence that the plaintiff failed to use a seatbelt which was available for her use, and thereby, contributed to her own injuries and the damages which she sought to recover. In reviewing the common law from other jurisdictions, we discussed the basis on which such evidence had been held inadmissible elsewhere. The recurrent reasoning from other jurisdictions was that since the legislature had not mandated the use of seatbelts as a standard of conduct, the court should not impose that standard on all persons riding in vehicles. Significant to the rationale for these decisions were studies which established that the vast majority of drivers and occupants of vehicles did not use seatbelts, even though they were available. See Amend v. Bell (Wash. 1977), 570 P.2d 138; Fischer v. Moore (Colo. 1973), 517 P.2d 458; Britton v. Doehring (Ala. 1970), 242 So. 2d 666; Miller v. Miller (N.C. 1968), 160 S.E.2d 65; McCord v. Green (D.C. App. 1976), 362 A.2d 720; Fields v. Volkswagen of America, Inc. (Okla. 1976), 555 P.2d 48. Based on this lack of statutory duty, we held that:
In light of the history and the numerous legislative problems that must be considered to effectively extend the seatbelt rule of law, we have concluded that the well-reasoned position of the Washington court in Amend v. Bell, supra, produces the better rule and reach the conclusion that to adopt a seatbelt defense when the legislature has failed to do so would be ill-advised. The trial court properly refused to allow defendant to introduce a seatbelt defense into this case.
Kopischke, 610 P.2d at 683.
In other words, our reason for refusing to admit evidence that plaintiff had failed to use a seatbelt in Kopischke was that there was no statutorily created duty and we chose not to create one. That holding was not based on a lack of causation.
As noted above, in 1987, the Legislature did create a statutory duty for drivers and occupants of vehicles to use seatbelts. However, at the same time, the Legislature provided that where seatbelts are available and a driver or occupant chooses not to use one, that choice is not admissible as evidence of negligence. Section 61-13-106, MCA.
However, neither Kopischke nor § 61-13-106, MCA, apply to the facts in this case. In this case, there was not a seatbelt available for Ryan’s use. The duty which forms the basis of plaintiff’s complaint is defendants’ duty to maintain their vehicle in such a way that seat-belts are available for the driver’s and passenger’s use in the event that they choose to use them. If that duty exists, it exists pursuant to § 61-9-409, MCA, and there is no comparable provision in that statute which would exclude evidence that seatbelts were unavailable and for that reason, were not used at the time of the accident.
We hold that neither Kopischke nor the Montana Seatbelt Use Act, §§ 61-13-101 to -106, MCA, preclude evidence that in this case Ryan Johnson did not have a seatbelt on at the time of his accident because the seatbelt had been rendered inoperable and was unavailable for his use.
STATUTORY DUTY TO MAINTAIN SEATBELTS
Defendants next contend that there is no statutory duty to maintain seatbelts in a operable condition, and that just as we have refused to create a common law duty to use seatbelts in Kopischke, we should decline to create a common law duty to maintain seatbelts in this case.
Section 61-9-409, MCA, provides that:
It is unlawful for any person to buy, sell, lease, trade, or transfer from or to Montana residents at retail an automobile which is manufactured or assembled commencing with the 1966 models unless such vehicle is equipped with safety belts installed for use in the left front and right front seats thereof, and no such vehicle shall be operated in this state unless such belts remain installed. [Emphasis added.]
Defendants contend that the statute pertains only to sellers of vehicles. However, the plain language of the statute clearly imposes more than one duty. It prohibits sellers from transferring vehicles which are not equipped with safety belts, but also prohibits owners of vehicles from operating the vehicle unless the seatbelts remain installed. To hold that the statute has been complied with if the seatbelts are present in the vehicle, even though rendered inoperable by the owner of the vehicle, would clearly frustrate the Legislature’s purpose for enacting the statute. We agree with the District Court when it held that:
It is the opinion of the Court that it would not be necessary that seatbelts be cut out or unbolted and physically removed in order to constitute a violation of the foregoing statute. The phrase “unless such belts remain installed” of necessity means “and reasonably available for use.”
In the past, we have held that statutory provisions relating to motor vehicle equipment imposed a duty and that the violation of that duty constituted negligence per se.
In Ashley v. Safeway Stores, Inc. (1935), 100 Mont. 312, 47 P.2d 53, we held that failure to comply with the statute, § 1753, RCM (1921) (now § 61-9-214, MCA), which requires a display of lights on parked vehicles during certain hours of the night, established negligence as a matter of law. In Lindberg v. Leatham Brothers, Inc. (1985), 215 Mont. 11, 693 P.2d 1234, we held that where there was evidence that defendant failed to comply with § 61-9-221, MCA, which sets forth requirements for the use of multiple beam lighting equipment on vehicles, it would have been appropriate for the trial court to instruct the jury that failure to comply with that statute was negligence as a matter of law. Finally, in Smith v. Rorvik (1988), 231 Mont. 85, 751 P.2d 1053, we held that § 61-9-412, MCA, (1) requires the use of warning device equipment when a vehicle is disabled upon the traveled portion of a highway, and (2) establishes the proper standard of care for the owner and operator of a disabled vehicle. We held that it was proper to instruct the jury on the requirements of that statute.
Likewise, in this case we hold that § 61-9-409, MCA, prohibited defendants from rendering the seatbelts in their vehicle inoperable and unavailable for use, and that breach of that duty constituted negligence as a matter of law.
CAUSATION
Finally, defendants contend that to establish causation, plaintiff must establish both cause in fact and proximate cause. Defendants rely on our decision in Kitchen Krafters v. Eastside Bank (1990), 242 Mont. 155, 789 P.2d 567. They contend that because Ryan’s accident was precipitated by another vehicle swerving into his lane of travel, the lack of seatbelts could not have been the cause in fact of his accident, and therefore, the Kitchen Krafters’ test for causation is not satisfied. However, defendants’ reasoning is faulty. Plaintiff need not prove that the unavailability of seatbelts caused Ryan’s accident. Plaintiff need only prove that the lack of seatbelts was the cause, or one of several concurring causes, for Ryan’s injuries and the resulting damages. For example, in Brandenburger v. Toyota Motor Sales, U.S.A., Inc. (1973), 162 Mont. 506, 513 P.2d 268, we stated that:
While the construction of the vehicle is not the cause of the accident, it is most often the contributing factor in the case of “second collision” injuries. In the recent years courts have held that where the manufacturer’s negligence in design causes an unreasonable risk to be imposed upon the user of its products, the manufacturer should be liable for the injury caused by its failure to use reasonable care in design. These injuries are readily foreseeable as an incident to the normal and expected use of the car. While automobiles are not made for the purpose of colliding with each other, a frequent and inevitable contingency of normal automobile use will result in collisions and injury producing impacts.
Brandenburger, 513 P.2d at 274. For the above reason, we held that where the driver overturned his vehicle, the top of the vehicle came off, and the plaintiff, who was a passenger, was thrown out of the car through the opening created through the top of the vehicle, “the duty of Toyota to provide a safe roof is not eliminated simply because the defective roof did not cause the accident.” Brandenburger, 513 P.2d at 274.
Likewise, seatbelts are clearly for the purpose of restraining occupants of motor vehicles and it is foreseeable that in the event of a motor vehicle accident the occupant is more likely to be thrown from the vehicle if he has no seatbelt, than if he is wearing one. The fact that the unavailability of a seatbelt did not cause the original accident does not relieve defendants of their duty to comply with § 61-9-409, MCA. Whether or not the lack of a seatbelt was, in fact, the cause of Ryan’s injuries, or whether his injuries were worse than they would have been had he been wearing a seatbelt is a question of fact to be resolved based on evidence which has not yet been produced.
For these reasons, we affirm the District Court’s denial of defendants’ motion to dismiss, and its order granting plaintiff’s motion for summary judgment. We hold that rendering the driver’s side seatbelt inoperable was negligence as a matter of law, and we remand to the District Court for farther proceedings consistent with this opinion.
JUSTICES HARRISON, HUNT, and McDONOUGH concur. | [
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JUSTICE HARRISON
delivered the Opinion of the Court.
This is an appeal from an order of the First Judicial District Court, Lewis and Clark County, the Honorable Jeffrey M. Sherlock presiding. The District Court affirmed a Montana Human Rights Commission order that required the appellant, Hearing Aid Institute of Great Falls, Montana (HAI), to pay respondent Carolyn Rasmussen (Rasmussen) $11,300 in front and back pay, plus interest. We affirm.
Rasmussen initiated this action by filing a formal complaint with respondent Human Rights Commission (the Commission) on June 13,1989. She alleged that HAI had refused to hire her for a telemarketing position because she is physically handicapped. The Commission certified her case for a hearing on April 26, 1990, based on an alleged violation of the Montana Human Rights Act at § 49-2-303(l)(a), MCA, and appointed a hearing examiner.
After a hearing on July 24, 1990, at which both parties were represented by counsel and HAI called several witnesses, the hearing examiner issued findings of fact, conclusions of law, and a proposed order. The proposed order required HAI to pay Rasmussen $12,400 as front and back pay and $5,000 in damages for emotional distress; to cease the discriminatory practice of refusing to hire qualified employees with physical handicaps; and to send a management-level employee to training on the federal Americans with Disabilities Act.
In August 1991, HAI filed exceptions to the hearing examiner’s findings of fact and conclusions of law. The Commission heard oral argument on these exceptions on January 23,1992, and issued a final order on March 6, 1992. The Commission determined that Rasmussen did not meet the legal standard for an award of damages for emotional distress and reduced her award accordingly. It also deducted Rasmussen’s interim earnings of $1,100 from the proposed back pay award. In all other respects the Commission adopted the proposed order. HAI petitioned for judicial review on April 3, 1992.
The Commission moved to intervene on May 4,1992, arguing that Rasmussen did not adequately represent its interest in eliminating employment discrimination. The District Court granted the motion on May 27, making the Commission a party to the action, and on September 4, 1992, it denied HAI’s petition and affirmed the Commission’s order. This appeal followed.
Rasmussen was born with cerebral palsy, which affects the muscles in her legs. Although she can walk with a cane, she uses a wheelchair in public. She cannot sit in a standard chair because she is only four feet eight inches tall.
At the time of the Commission hearing in July 1990, Rasmussen was twenty-eight years old and married. She was a high school graduate and had completed a one-year vocational course at Weber State College in Utah. Her work experience, before she applied to HAI in January 1989, included telemarketing for the Bon Marche in Ogden, Utah, for about a year; working as a receptionist at Hill Air Force Base in Clearfield, Utah, for a year; telemarketing for two different firms in Ogden, Utah, including eighteen months with Omni Hearing Aid in 1984-85; and telemarketing for Marketing America in Great Falls, Montana, for a few days.
On or about January 2,1989, Rasmussen applied for a telemarketing job with HAI in Great Falls, Montana. The work involved calling senior citizens and scheduling hearing test appointments for people with hearing problems. Rasmussen was interviewed by HAI’s telemarketing manager, Brian Thomas. Thomas testified at the hearing that he did not ask Rasmussen to complete an employment application, because no copies were available at the time, and that he did not ask her to provide a writing sample. He also testified that he did not ask her for the names and addresses of her previous employers.
At the conclusion of the interview, Thomas said, he decided but did not tell Rasmussen that “she would not be suitable due to the fact that her voice carryover when we talk to hearing impaired people would be inadequate.”
Rasmussen testified that Thomas told her she was hired and would start in about two weeks, after HAI installed a new telephone system. She waited two weeks, she said, then called HAI every other day trying to determine her starting date. She testified that she left messages for Thomas, who did not return her calls. Finally she spoke to Thomas, who told her the new telephones were not installed yet. Later, she spoke to him again. She testified that he told her then that HAI was not hiring anyone, but Thomas testified that he told Rasmussen “they didn’t have anything for her at this time.” Nevertheless, HAI continued to advertize for telemarketers throughout the first half of 1990.
The Commission concluded that Rasmussen had established a prima facie case of employment discrimination. Although HAI attempted to rebut Rasmussen’s prima facie case by articulating a legitimate, non-discriminatory reason for not hiring her, the Commission found that this reason — that Rasmussen’s voice was too soft — was merely a pretext for discrimination. The District Court agreed, and affirmed the Commission’s award of damages.
On appeal, HAI challenges the Commission’s conclusion that Rasmussen was qualified for the telemarketing position and raises numerous subsidiary issues, which we have compressed and rephrased as follows:
1. The District Court erred in concluding that Rasmussen was qualified for telemarketing and therefore erred in concluding that she had established a prima facie case of employment discrimination.
2. The District Court erred in concluding that an employer may not justify rejecting an applicant based on evidence obtained after it decided to reject the applicant.
3. The District Court erred in concluding that the Commission applied the correct test for employment discrimination and not the one used in Price Waterhouse v. Hopkins (1989), 490 U.S. 228,109 S.Ct. 1775, 104 L.Ed.2d 268.
4. The District Court erred in concluding that HAI had not shown that it would not have hired Rasmussen in the absence of discrimination.
5. The District Court erred in concluding that Rasmussen was entitled to front pay.
6. The District Court erred in concluding that evidence of other claims that Rasmussen pursued contemporaneously was not admissible as proof of motive and intent or failure to mitigate.
Judicial review of an administrative agency decision in a contested case is governed by § 2-4-704, MCA. Section 2-4-704(2) provides that an agency’s decision may not be reversed or modified unless substantial rights of the appellant have been prejudiced because the agency exceeded its authority, abused its discretion, made clearly erroneous findings of fact, or interpreted the law incorrectly. Although we applied an “abuse of discretion” standard to an agency’s conclusions of law in two recent Human Rights Commission cases — Johnson v. Bozeman School Dist. No. 7 (1987), 226 Mont. 134, 734 P.2d 209; P. W. Berry Co., Inc. v. Freese (1989), 239 Mont. 183, 779 P.2d 521 — we now apply the standard adopted in Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601, 603: “In reviewing conclusions of law, our standard of review will be merely to determine if the agency’s interpretation of the law is correct, instead of applying the inappropriate abuse of discretion standard.”
All of the Commission rulings that HAI challenges on appeal, as confirmed by the District Court, are essentially conclusions of law. We review the challenged conclusions of law under the standard set forth in Steer, Inc.
As the framework for this review, we use the three-stage test for employment discrimination articulated by the United States Supreme Court in McDonnell-Douglas Corp. v. Green (1973), 411 U.S. 492, 93 S.Ct 1817, 36 L.Ed.2d 668, and adopted by this Court in Martinez v. Yellowstone County Welfare Dep’t (1981), 192 Mont. 42, 626 P.2d 242. Both the Commission and the District Court applied this test correctly in reaching their conclusions.
In the first stage of this test, the plaintiff must establish a prima facie case of discrimination, by proving that she is a member of a protected class; that she applied for and was qualified for a position; that she was rejected despite her qualifications; and that the position had remained open and the employer had continued to accept applications from persons with comparable qualifications. Establishing the prima facie case creates a presumption that the employer unlawfully discriminated against the plaintiff. Texas Dep’t of Community Affairs v. Burdine (1980), 450 U.S. 248, 254, 101 S.Ct. 1089, 1094, 67 L.Ed.2d 207, 216.
In the second stage of the McDonnell-Douglas test, if the plaintiff has established a prima facie case, the burden shifts to the employer to rebut the presumption of discrimination by producing a legitimate, non-discriminatory reason for the employee’s rejection. If the employer clearly sets forth non-discriminatory reasons for rejection, through admissible evidence, the plaintiff’s case is rebutted. Burdine, 450 U.S. at 254-255, 101 S.Ct at 1094-95.
After the employer has produced a legitimate, non-discriminatory reason for the rejection, the plaintiff has an opportunity to prove that this reason is only a pretext for discrimination. Pretext may be proved directly, by persuading the court that a discriminatory reason more likely motivated the employer, or indirectly, by showing that the employer’s proffered explanation is unworthy of credence. Burdine, 450 U.S. at 256. 101 S.Ct at 1095.
I
Did the District Court err in concluding that Rasmussen was qualified for telemarketing and therefore that she had established a prima facie case of employment discrimination?
Under McDonnell-Douglas, Rasmussen must show that she was qualified for the job for which she was rejected. On the basis of her testimony concerning her previous telemarketing experience, the Commission concluded that she was qualified for the telemarketing opening at the Hearing Aid Institute, stating that:
The uncontroverted testimony of Rasmussen that she previously had been employed as a telemarketer on several occasions establishes that she was “qualified” when she applied for a similar position with HAI.
The Commission correctly distinguished Johnson, in which the Bozeman School District defeated an employment discrimination claim by showing that the claimant was not qualified for a teaching position. Unlike the school district, HAI had not established minimum hiring standards or developed any screening procedures when Rasmussen applied for the job and therefore cannot show that Rasmussen did not meet minimum qualifications.
HAI argues that Rasmussen’s performance in an impromptu writing exercise during her hearing demonstrates her lack of qualifications. Rasmussen’s lawyer asked her to “do a little writing” to illustrate what she had done in previous telemarketing jobs. Rasmussen suggested that she write her name, address and telephone number, as these were items she was required to write as a telemarketer, but HAI’s lawyer suggested that she write, instead, “A quick brown fox jumped over the lazy brown dog.” Rasmussen asked to have the sentence repeated several times before she completed the demonstration. The Commission adopted the hearing examiner’s assessment of this exercise in its findings of fact, as follows:
Her final product omits articles and appropriate verb tense, but in other respects, is accurate and legible. ... Although it took Rasmussen a minute or more to complete the demonstration, little weight was afforded to the time lapse or precision of her transcription. Thomas did not observe Rasmussen’s writing ability during her interview, nor did he ask her to demonstrate how efficiently she could record information by hand. Furthermore, the writing exercise was not representative of the type of information a telemarketer usually records.
The District Court determined that “when one considers the tense atmosphere that often times accompanies hearings,” the Commission’s finding that Rasmussen was qualified as a telemarketer was not clearly erroneous. We agree. The record contains substantial credible evidence that Rasmussen was qualified to schedule hearing test appointments.
II
Did the District Court err in concluding that an employer may not justify rejecting an applicant based on evidence obtained after it decided to reject the applicant?
At the hearing on July 24, 1990, HAI attempted to introduce, as evidence that Rasmussen was not qualified for employment as a telemarketer, testimony by Maria Roberts, who was office manager of Marketing America when Rasmussen worked there briefly in 1986. Roberts testified that Rasmussen’s supervisor at Marketing America let her go because “she could not dial the telephone. It took her quite a long time to dial one number. She also had trouble ... writing that quickly — the way the customer talked — and writing it legibly.”
When Rasmussen’s supervisor terminated her employment, she went to the owner, who offered to give her another chance. After another week, Roberts testified, Rasmussen quit because she “could not handle the position.”
Rasmussen herself testified that she found the atmosphere at Marketing America very stressful: “Nobody would talk to me.... They were very rude with me. So I quit.” She also said that her supervisor let her go initially because he had not been authorized to hire her.
As HAI had not asked Rasmussen for names and addresses of previous employers, and had not checked her previous employment record before deciding not to hire her, the hearing examiner ruled that Roberts’ testimony was admissible only for the purpose of impeaching Rasmussen’s own testimony regarding her qualifications, and not for the purpose of proving that Rasmussen was not qualified when HAI rejected her.
The Commission relied on Mantolete v. Bolger (9th Cir. 1985), 767 F.2d 1416,1424, to support the statement that “an employer may not rely upon evidence obtained after its decision to reject an applicant to justify rejection of the applicant.” HAI argues that Mantolete allows a defendant to rely on such evidence to rebut the plaintiff’s prima facie case of discrimination, and that in excluding Roberts’ testimony that Rasmussen was not qualified, the Commission denied HAI the right to a valid defense.
The relevant holding in Mantelete follows:
Although it is questionable whether the Postal Service could justify its refusal to hire Mantolete based on evidence obtained after its decision to reject her application, the admissibility of post-decision evidence is not necessarily forbidden for all purposes. ... Thus, the evidence was admissible to rebut the appellant’s claim that she was qualified for the position, but was not admissible to enlarge the basis upon which the employer relied to reject the appellant at the time that decision was made. Consequently, if the evidence is admitted to rebut the prima facie showing of qualification for the position, and such evidence is determined by the trier of fact to be insufficient to rebut this aspect of the plaintiff’s prima facie case, the evidence cannot further be used to justify the plaintiff’s rejection.
767 F.2d at 1424 (citation omitted; emphasis added).
Roberts’ testimony was admitted to impeach Rasmussen’s testimony rather than to rebut her prima facie case, but the hearing examiner treated it as though it were rebuttal testimony. She concluded that Roberts’ testimony should be “afforded little weight” because she was not present when Rasmussen’s supervisor fired her, or when Rasmussen quit later.
In effect, this is a determination that Roberts’ testimony was insufficient to rebut Rasmussen’s prima facie case of discrimination. Having failed to rebut Rasmussen’s prima facie case with Roberts’ testimony, HAI could not use the same testimony as evidence of a legitimate, non-discriminatory reason for rejecting Rasmussen. Mantolete, 767 F.2d at 1424.
Ill
Did the District Court err in concluding that the Commission applied the McDonnell-Douglas test for employment discrimination and not the one used in Price Waterhouse v. Hopkins?
HAI argues that under Johnson it need not prove that Rasmussen’s lack of qualifications — a legitimate, non-discriminatory reason for refusing to hire her — was the actual reason for rejection, and that the Commission therefore should have found that Roberts’ testimony did rebut Rasmussen’s prima facie case of discrimination.
In Johnson we said:
If the employer is able to demonstrate a legitimate, nondiscriminatory reason for not hiring the complainant, even though that may not have been the actual reason for the rejection, then the plaintiff’s prima facie case of discrimination is rebutted.
734 P.2d at 212, citing Burdine, 450 U.S. at 254, 101 S.Ct. at 1094. In a footnote to its conclusions of law, the Commission described this language as “misleading in light of the more recent U.S. Supreme Court decision in Price Waterhouse v. Hopkins.” Price Waterhouse, the Commission wrote, “illustrates that even in a mixed motive case the asserted legitimate reason for an employment decision must be present at the time the decision is made, i.e., the reason given for not hiring the complainant must have been one of the actual reasons for the rejection.”
HAI contends that in this footnote the Commission “adopted” Price Waterhouse “in derogation of Montana law,” Montana law being the McDonnell-Douglas test as adopted in Martinez and applied in Johnson. HAI is incorrect. As the District Court pointed out, the Commission in fact applied the McDonnell-Douglas test rigorously, though not to the issue of Roberts’ testimony. Instead, the Commission found that HAI’s “legitimate, non-discriminatory reason” was Brian Thomas’ concern with the quality of Rasmussen’s voice, which Thomas offered as the reason for not hiring her.
Because HAI did meet its burden in the second stage of the McDonnell-Douglas test by producing a non-discriminatory reason for rejecting Rasmussen, the Commission moved to the third stage of the test. At this stage, Rasmussen had to prove by a preponderance of the evidence that this reason was only a pretext for discrimination. Johnson, 734 P.2d at 213; Crockett v. City of Billings (1988), 234 Mont. 87, 95, 761 P.2d 813, 818. Pretext may be proved indirectly, by showing that the employer’s explanation is unworthy of belief. Burdine, 450 U.S. at 256, 101 S.Ct. at 1095. The Commission found that Thomas’ alleged concern was not worthy of belief and concluded that Rasmussen had met her burden of proof at this stage of the test; that is, it concluded that voice quality was a pretext for not hiring her. “If Thomas, in fact, believed that Rasmussen’s voice was too soft to be a telemarketer,” the Commission wrote, “he could have told her that and avoided guises such as ‘the phones haven’t been installed yet. ...’ ” The District Court affirmed this conclusion, noting that it could not properly re-weigh evidence given by witnesses.
We hold that substantial credible evidence supports the Commission’s finding that a discriminatory motive was more likely to have motivated HAI’s rejection of Rasmussen, and that its conclusion that the proffered nondiscriminatory reason was merely a pretext is not incorrect.
IV
Did the District Court err in concluding that HAI did not show that it would not have hired Rasmussen in the absence of discrimination?
HAI argues that it would not have hired Rasmussen even in the absence of discrimination, and that Rasmussen therefore is not entitled to damages. HAI relies on Nanty v. Barrows Co. (9th Cir. 1981), 660 F.2d 1327, in which the Ninth Circuit held that:
Where a job applicant has proved unlawful discrimination in the employment process, he must be awarded full relief, i.e., the position retroactively, unless the “defendant shows by clear and convincing evidence that even in the absence of discrimination the rejected applicant would not have been selected for the open position.”
660 F.2d at 1333, quoting Marotta v. Usury (9th Cir. 1980), 629 F.2d 615, 618.
The District Court found no evidence in the record to support HAI’s contention that it would not have hired Rasmussen in the absence of discrimination. The testimony of HAI’s telemarketing manager, Thomas, established that when he interviewed Rasmussen he made no effort to check her references, evaluate her skills, or otherwise determine whether she was qualified for the job. In the absence of any evidence, let alone clear and convincing evidence on this point, the District Court concluded correctly that Rasmussen is entitled to full relief, i.e., back pay. HAI does not dispute the amount of back pay awarded.
V
Did the District Court err in concluding that Rasmussen was entitled to front pay?
The Commission awarded Rasmussen one year of “front pay,” based on its finding that “Rasmussen felt very uncomfortable about HAI as a consequence of these proceedings and its demonstrated treatment, and attitude toward, her” and was “not interested in reinstatement.” Citing Thorne v. City of El Segundo (9th Cir. 1986), 802 F.2d 1131, 1137, the Commission stated in its conclusions of law that “front pay is an appropriate remedy when it would be inappropriate to order reinstatement of the charging party due to hostility or antagonism between the parties.”
HAI correctly points out that in Thorne the Ninth Circuit actually held that front pay is appropriate only when “excessive hostility or antagonism” exists; it remanded the case to the district court to make specific findings on whether the plaintiff, Thorne, would encounter excessive hostility if the City of El Segundo reinstated her as a police officer in the department where she had previously worked as a clerk-typist. Here, the Commission made no specific findings as to whether Rasmussen would encounter “excessive hostility” if she became a telemarketer at the Hearing Aid Institute but it did conclude that one year of front pay was reasonable “considering the antagonism between the parties.”
The District Court concluded that substantial credible evidence supported the Commission’s award of front pay and that “[u]nder these circumstances, it cannot be said that it would be appropriate for Rasmussen to obtain reinstatement with HAI.”
In Fadhl v. City & County of San Francisco (9th Cir. 1984), 741 F.2d 1163, 1167 (cited as authority for the definition of front pay in Thorne), the Ninth Circuit did not insist on “excessive hostility” but instead held that “[a]n award of front pay is made in lieu of reinstatement when the antagonism between employer and employee is so great that reinstatement is not appropriate.” The District Court’s finding in the case before us is consistent with this holding. We conclude that Rasmussen was entitled to front pay.
VI
Did the District Court err in concluding that evidence of other claims that Rasmussen pursued contemporaneously was not admissible as proof of motive and intent or failure to mitigate?
The hearing officer refused to allow HAI to show that Rasmussen had filed other discrimination claims. HAI argued that this evidence would go to show motive, intent, or preparation, but the District Court found that it would be irrelevant to the question of whether HAI discriminated against Rasmussen. We agree. Relevant evidence is “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.” Rule 401, M.R.Evid. Evidence that Rasmussen filed other discrimination claims does not make more or less probable any material fact concerning HAI’s motive for rejecting her for employment.
The hearing officer also refused to hear testimony by Rich Pavlonis, owner of Omni Marketing, Inc., which was the object of a separate discrimination complaint by Rasmussen. As part of the conciliation process for that complaint, Omni had offered Rasmussen a job in November 1989. The hearing officer excluded Pavlonis’ testimony on the basis of 24.9.226, ARM, which makes statements made in the course of a conciliation offer inadmissible in any hearing concerning the complaint. The District Court concluded that this rule does not prevent admission of testimony about a conciliation offer made in a different case. It upheld the exclusion, however, based on our holding in Tribby v. Northwestern Bank of Great Falls (1985), 217 Mont. 196, 704 P.2d 409. There, we held that:
An offer to compromise is not admissible when made in an attempt to effect a settlement. [The defendant bank] argues the offer is admissible to show that Tribby failed to mitigate damages .... We are not persuaded by the contention that refusing an offer to settle is a failure to mitigate damages .... Admitting this evidence would go against the basic policy of Rule 408, M.R.Evid., which is to encourage compromises and settlement of disputes.
704 P.2d at 417-418 (citation omitted).
Admitting or excluding evidence is within the discretion of the trial court or, in this case, the Commission. Weber v. State (1992), 253 Mont. 148, 151, 831 P.2d 1359, 1363. HAI alleged error on the part of the hearing officer, but it offered the District Court no evidence that she abused her discretion, nor did it present any authority showing that Omni’s offer of employment should be admissible to prove failure to mitigate damages.
Affirmed on all issues.
JUSTICES GRAY, HUNT, TRIEWEILER and WEBER concur. | [
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JUSTICE WEBER
delivered the Opinion of the Court.
Plaintiffs Irene Bickler and Victor Bickler appeal the December 22,1988 order of the District Court of the Thirteenth Judicial District, Yellowstone County, Montana, granting summary judgment in favor of defendant Racquet Club Heights Associates. We affirm.
The issues presented for our review are:
1. Did the District Court err in concluding that acts or omissions of Racquet Club Heights Associates were not the proximate cause of a motorcycle car collision which killed Bucky Bickler, the son of plaintiffs Irene Bickler and Victor Bickler?
2. Did Racquet Club Heights Associates owe a duty to Bucky Bickler as a member of the traveling public to maintain trees on property belonging to the City of Billings?
3. Are sanctions appropriate against the appellants and their attorney for bringing a frivolous appeal?
Plaintiffs Irene and Victor Bickler (Bidders) brought this action to recover damages for the wrongful death of their son, Bucky Bickler (Bickler). Bucky Bickler died shortly after 1:00 a.m. on August 3, 1983, when his motorcycle collided with Nadine Evensen’s (Evensen) car within the intersection of Rimrock Road and Arlene Street in Billings, Montana.
Rimrock Road is a through street running east and west in Billings. Arlene Street intersects Rimrock Road from the south. Zimmerman Trail connects with Rimrock Road from the north at the same intersection. Both Zimmerman Trail and Arlene Street are controlled by stop signs at this intersection. Bickler was traveling west on Rimrock Road with Fred Farr as his passenger. Evensen was traveling north on Arlene Street. Her deposition testimony establishes that she stopped for the stop sign on Arlene Street. She did not see the Bickler motorcycle. She proceeded into the intersection intending to execute a left turn in order to proceed west on Rimrock Road. Evensen pulled out in front of the Bickler motorcycle. The motorcycle struck the right rear passenger panel and wheel of Evensen’s car. Both Bickler and Farr were propelled by the force of the collision into the air and landed on the street in front of Evensen’s car. Bickler died at the scene of the accident. Farr died later at a Billings hospital.
Evensen testified she did not see the oncoming Bickler motorcycle. Accident reconstruction experts testified by deposition for both Even-sen and the Bidders. Such testimony indicated that in order to adequately perceive oncoming traffic on Rimrock Road, a driver must stop at a location several feet in front of or to the north of the stop sign itself. Evensen testified that when she stopped at the stop sign on Arlene Street, she looked to the left and to the right and could see clearly in both directions. According to the expert testimony, this suggested that she had stopped at a location in front of the stop sign where her vision was not obstructed by trees located on the right of way. Evensen’s testimony indicated she stopped only once. Evensen testified that her vision was not obstructed or impaired but that she did not see the Bickler motorcycle approaching from the east.
The City of Billings owns a right of way approximately twenty feet in width abutting Rimrock Road to the south at the point Arlene Street intersects. Several Lombardy poplar trees grow on the city right of way near the southeast comer of the intersection of Rimrock Road and Arlene Street. The trees are located within an area described as the clear vision zone by the Billings City ordinances. Testimony of the reconstruction experts established that the poplar trees may obstruct the vision of a driver approaching Rimrock Road on Arlene Street as the driver looks to the east.
Racquet Club Heights Associates (RCH) owns property adjacent to the southern edge of the described city right of way. The RCH strip extends approximately twenty feet south of the City right of way. This area is designated as part of the RCH subdivision’s “common area.” The subdivision covenants place responsibility for maintenance of the “common areas” in the subdivision on RCH. Billings ordinances also place responsibility on a corner lot owner for maintenance of vegetation growing on City boulevards.
Bidders argue that Evensen stopped within three feet in front of the stop sign and at that point, she could not have seen vehicles on Rimrock Road approaching from the east. Because she testified that she had stopped only once at the sign, Bicklers further contend that she would have entered the intersection without a clear view of oncoming traffic.
RCH points out that Evensen’s testimony was that at the point she stopped her car, she could see Rimrock Road clearly enough to make out the lights from a Kwik-Way store located one block to the east. RCH also points out that police records establish that Bickler’s blood alcohol content at the time of his death was 2.0, twice the legal driving limit. The record on summary judgment does not establish whether or not the motorcycle headlights were on at the time of the accident. As necessary, we will provide additional facts.
I.
Did the District Court err in concluding that acts or omissions of Racquet Club Heights Associates were not the proximate cause of a motorcycle car collision which killed the plaintiffs’ son?
The District Court reached the following conclusion in granting summary judgment to RCH:
Defendants Racquet Club and City have argued their acts or omissions in this case were not the actual or proximate cause of plaintiffs’ injuries. Plaintiffs have the burden of proving by specific facts that these defendants’ acts or omissions actually caused the accident or, alternatively, that but for these defendants’ acts or omissions, the accident would not have occurred. Plaintiffs have failed to carry these burdens, and thus summary judgment for Racquet Club and City is appropriate.
We note that the case has been settled and dismissed as to the defendant City.
Summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.R We review a district court’s summary judgment ruling using the same standard of review as the trial court. Higham v. City of Red Lodge (1991), 247 Mont. 400, 402, 807 P.2d 195, 196. Summary judgment is proper if a plaintiff fails to establish an element material to his negligence action. Dvorak v. Matador Service Inc. (1986), 223 Mont. 98,107, 727 P.2d 1306,1311. The showing of proximate cause is a necessary element for such actions. Thus, the pivotal question is whether plaintiffs here satisfied a showing of proximate cause.
In its analysis the District Court quoted from this Court’s analysis of cause in fact and proximate cause in Young v. Flathead County (1988), 232 Mont. 274, 757 P.2d 772. In Young, we stated:
Liability, in any cause of action, attaches if the plaintiff can prove first that defendant’s act is a cause in fact of injury and then that the injury is the direct or indirect result, proximately caused by the negligent act. Causation in fact has been determined by the use of the “but for” test... and in rare circumstances under a substantial factor examination. Prosser and Keeton, The Law of Torts, Section 41, pp. 264-268 (5th ed., 1984). In Montana, the distinction between causation in fact and proximate cause, now occasionally referred to as legal cause, has not generally been made....
Under causation in fact, the “but for” test has been defined as but for defendant’s conduct, the event would not have occurred, or, conversely, defendant’s conduct is not the cause of the event, if the event would have occurred without the conduct. ... As an uncommon alternative to the “but for” test, the “substantial factor” test has been designed to deal with problems where application of the “but for” test would allow each of a number of defendants to escape responsibility because the conduct of one or more others would have been sufficient to produce the same result. ...
Young, 757 P.2d at 777. (Citations omitted.)
In Montana, proximate cause is an act or omission which, “in a natural and continuous sequence, unbroken by any new, independent cause, produces injury, and without which the injury would not have occurred.” Young, 757 P.2d at 777. The phrase “without which the injury would not have occurred” incorporates the “but for” test. Young, 757 P.2d at 777.
The District Court concluded the Bidders failed to factually establish actual or proximate cause here. Plaintiffs argue that there is an issue of fact whether Evensen could see the approaching motorcycle because of the clump of poplar trees on the City right of way, and that such issue of fact precluded summary judgment. We do not agree with that contention.
Plaintiffs have failed to submit evidence which establishes that Evensen could not see oncoming vehicles because of the obstruction of trees at the corner of the intersection. Evensen’s uncontradicted testimony establishes that she stopped at the stop sign, looked left and right and could see clearly in both directions, failed to see the Bickler motorcycle, and pulled out into the intersection in front of the motorcycle. Plaintiffs’ accident reconstruction expert speculated that if Evensen stopped her car at the stop sign or within three feet in front of the stop sign, the trees would have obstructed her vision. There is no evidence to precisely establish where Evensen stopped her car.
The stop sign is located a number of feet south of the south right of way line of Rimrock Road. Evensen testified that she thought she stopped at a point close to the stop sign, but she could not fix the precise point. She testified that she stopped only once, finding it unnecessary to pull further forward in order to be able to see to her right before proceeding into a turn. While her testimony does not specify the exact spot where she stopped, her testimony is unrebutted with regard to her ability to see to the east. Evensen further testified she was familiar with the intersection, having previously driven through it on numerous occasions. Plaintiffs have failed to present any evidence for summary judgment consideration which establishes that Evensen did not or could not see the Bickler motorcycle because of the tree obstruction at the southeast corner of the intersection.
We agree with the conclusion of the District Court that the plaintiffs have failed to meet their burden of proving by specific facts that RCH’s acts or omissions were the proximate cause of the accident, or that but for the acts or omissions of RCH, the accident would not have occurred. We agree with the conclusion of the District Court that visual obstruction was not established as a cause in fact of plaintiffs’ injuries.
We hold the District Court correctly granted summary judgment to the defendant RCH.
II.
Did RCH, as the owner of the corner lot abutting Rimrock Road, owe a duty to members of the traveling public to maintain a clear vision zone?
Because of our holding on Issue I, we conclude it is unnecessary to address this issue.
III.
Are sanctions appropriate against the Bidders and their attorney for bringing a frivolous appeal?
Rule 32, M.R.App.R, allows recovery of damages when this Court is satisfied from the record and the presentation of an appeal in a civil case that the appeal was taken without substantial or reasonable grounds. This Court has imposed such sanctions in cases where counsel’s actions constitute an abuse of the judicial system. Where reasonable grounds for appeal exist, no sanctions will be imposed. Tope v. Taylor (1988), 235 Mont. 124, 768 P.2d 845.
We conclude there were reasonable grounds for an appeal and deny the request for sanctions.
Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, HUNT and HARRISON concur. | [
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JUSTICE McDONOUGH
delivered the Opinion of the Court.
This is an appeal from the Sixteenth Judicial District Court, Rosebud County, of a conviction of a minor for possession of stolen property. We affirm.
The sole issue on appeal is whether there was sufficient evidence to support the conviction under § 45-6-301(3), MCA.
On September 27, 1991, the State filed a petition for a youth hearing alleging that the minor, E.B.G., was a delinquent youth because he violated § 45-6-301(3), MCA, by committing the offense of possession of stolen property. The petition alleged that he “knowingly obtained control over stolen property, No. 1 and No. 2 copper wire, of a value of more than $300 owned by Prince Inc., knowing the property to have been stolen by another and used, concealed or abandoned the property in such a manner as to deprive the owner of the property.” The youth denied the charge and a trial was held. E.B.G. was found guilty by a jury and was later found to be a serious juvenile offender by the District Court Judge. He was ordered committed to Pine Hills School and ordered to pay restitution in the amount of $7047, the replacement cost of the wire.
Sometime between Monday, August 12, 1991, and Friday, August 16, 1991, David Quenzer (Quenzer) discovered that a large amount of wire was missing from his place of business, Prince Inc. Quenzer had seen the wire on Monday, August 12, but on Friday, August 16, he saw two empty pallets leaning against a boxcar used for storage of wire. He could see patterns of dust rings on the empty pallet where the wire had been. Quenzer called the police. He then started to call people in the recycling business and upon calling Border Steel, a recycling center in Glendive, Montana, Quenzer learned that they had received wire on the previous day that was similar to the wire which had been stolen.
The wire received at Border Steel on Thursday, August 15, 1991, was brought in by E.B.G. of ENT Recycling in Forsyth, Montana. Bret Smelser, part owner and manager of Border Steel, stated during trial that either E.B.G. or D.H., a youth assisting E.B.G., told him that the wire had been brought into ENT on Wednesday, August 14. E.B.G. told Smelser that he and his friend, D.H., burned the copper wire Wednesday night and early Thursday morning in South Dakota and then drove to Border Steel in Glendive.
Smelser bought most of the wire brought in by E.B.G., but did not accept some wire which was unbumed and some clamps and connec tors. E.B.G. told Smelser that he would clean those items and sell them to Border Steel at a later date, so they were placed back in the ENT truck.
Officer Skillen, a deputy sheriff with Rosebud County Sheriff’s Department, investigated the case. He went to Border Steel where he interviewed Mr. Smelser and examined some wire from their storage area. Skillen examined No. 1 and No. 2 wire which were identified as wire brought in by E.B.G., as well as some connectors. The officer took several samples of wire and a Hubbel connector that had been brought in by E.B.G.
The investigating officer also examined the scene of the theft and took photographs of the area. He found an area within the boxcar, where wire was stored, that contained multiple footprints. The footprints appeared fresh and there were “three relatively different types of prints.” The officer stated that he was led to believe that the area was the same as it had been since the theft.
Officer Skillen also applied for a search warrant to search ENT, E.B.G.’s place of business. The search of ENT involved Officer Skillen, Sergeant McComb, and Quenzer, and occurred on August 21. The search yielded some wire, which Quenzer stated looked like wire taken from Prince Inc., some brass clamps, and some connectors. Smelser had previously told Officer Skillen about the wire, connectors, and clamps which had been rejected by Smelser and returned to E.B.G. This information formed the basis of the search. Officer Skillen took several samples of the wire, as well as two couplers, during the course of his search.
Officer Skillen also learned that the wire “had been brought in by Justin Smith within a relatively short period of time.” The officer asked for a receipt for the wire purchased by ENT from Smith and he was led to believe that the receipt should not be hard to locate because Smith had recently brought the wire into ENT. E.B.G.’s father, the manager of ENT, was going to locate the receipt and bring it to Officer Skillen, but it was never brought to him.
As another step in Officer Skillen’s investigation of the stolen wire, he took statements from E.B.G. and E.B.G.’s father on August 23, 1991. E.B.G. stated that he understood that Justin Smith brought in a lot of wire and he had borrowed E.B.G.’s father’s truck to haul the wire. E.B.G also stated that his dad told him that Justin received the wire from Justin’s dad. When asked what time E.B.G. left from Forsyth to Glendive, he stated that it was around 12:30 or 1:00 and he drove right to Glendive. When pressed by the detective as to where the wire came from, E.B.G. stated that:
Well, we got, like I said, that one pile Justin Smith brought in quite a bit back there, but I was in school and I just, I never seen what the weight was and stuff. And he worked out — he worked for us for awhile so — and we had him cutting tanks out there and stuff and that’s the time that he took it.
The officer asked: “At Prince’s?” and E.B.G. stated that they were cutting iron out there. Then the officer asked if E.B.G. knew that Justin took it from Prince’s and E.B.G. replied that “He said his dad gave it to him. I’m not familiar where his dad lives or anything.” Officer Skillen asked whether the wire was in the same condition when Smith brought it in as when E.B.G. took it to Glendive or if he had to clean it. E.B.G. answered “Most of it, like the No. 1, we had some No. 1 that we had to clean up.” “Q. That you stripped; it wasn’t burned?” “Yes,” answered E.B.G.
When Mr. G., E.B.G.’s father, was interviewed, he stated that he and his wife kept the business records. He further stated that Justin Smith had brought in a large supply of wire but he did not specify to the officers when the wire was brought in. He explained that when he called Smelser (Border Steel) to negotiate on the price of the wire on August 15 and he told Smelser the wire had come in on the previous day, he meant that “it was loaded up onto my vehicle to be finished prepared.” He said that although E.B.G. owned the business, Mr. G. controlled the money and E.B.G. He also later reported that Justin Smith brought the wire in on November 20,1990. He also related that E.B.G. cashed the check for the wire in Glendive, put some gas in the car and bought food for himself and D.H., who had assisted E.B.G. E.B.G. turned the remainder of the money over to Mr. G. upon his return to Forsyth.
Justin Smith testified that he had never brought in a large amount of copper wire but that he had helped Rob Watson bring in about 20 pounds at one time. He stated that he helped bring in that wire in November 1990. He further related that he had borrowed Mr. G.’s pickup truck at one time but had never used it to pick up wire. Finally, he stated that he could not have delivered wire to ENT in July or August 1991 because he was working from April 27 to August 23 or 24, 1991, on the Colorado River in Arizona.
Our standard of review is “[wjhether, after reviewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” State v. Brown (1989), 239 Mont. 453, 456-57, 781 R2d 281, 284. (Citation omitted.)
Section 45-6-301(3), MCA, the statute at issue, reads:
(3) A person commits the offense of theft when he purposely or knowingly obtains control over stolen property knowing the property to have been stolen by another and:
(a) has the purpose of depriving the owner of the property;
(b) purposely or knowingly uses, conceals, or abandons the property in such manner as to deprive the owner of the property; or
(c) uses, conceals, or abandons the property knowing such use, concealment, or abandonment probably will deprive the owner of the property.
E.B.G. argues that there was no proof that the wire had been stolen by another and there was no proof that the youth knew that the wire was stolen at the time he received the property. Each of these arguments will be taken in turn.
First, the State has provided sufficient evidence for a jury to conclude that E.B.G. knew that the wire was stolen. E.B.G. contends that “[t]here is absolutely no evidence in the record to show that at any period between August 12 and August 15, when the youth would have had physical possession of the wire, that he knew that it was stolen.” The State counters that he would not have burned the insulated copper wire and sold it as scrap unless it was stolen. According to Dave Quenzer, the wire, if insulated, would be worth three to six dollars per foot and he estimated that the wire which was stolen was worth $5000 to $6000. Bret Smelser stated that he bought most of the wire that E.B.G. brought him but did not accept some of the wire because it was not completely burned. E.B.G. told Smelser that he would clean the unburned copper later and sell it to Smelser. In total, Smelser purchased 784 pounds of No. 1 wire and 986 pounds of No. 2 wire for a total of $1,318.80. The burning of the insulated copper wire to sell for scrap at a much lower price is evidence that could lead a jury to determine that E.B.G. knew the wire was stolen, and therefore, tried to change its appearance.
Further, E.B.G.’s inconsistent statements may have damaged his credibility before the jury. Bret Smelser said that E.B.G. told him that he and D.H. had burned the wire in South Dakota on Wednesday night and early Thursday morning and then they drove from South Dakota to Glendive. However, when E.B.G. was interviewed by Officer Skillen, he stated that he drove straight to Glendive after leaving Forsyth between 12:30 and 1:00. He did not mention burning the wire and told Officer Skillen that the wire had been stripped, not burned. E.B.G.’s companion, D.H., testified at trial that they took the wire to Buffalo, South Dakota, to burn on Thursday, August 15. They left at about seven or eight o’clock that morning and then drove to Glendive, Montana, to Border Steel after burning the wire.
E.B.G. also made contradictory statements about how ENT had acquired the copper wire. When Officer Skillen asked E.B.G. during the taped interview where the wire he sold to Border Steel had come from the following discussion took place:
Q. Okay. Well, I guess where we’re at is this. Prince’s had about 2000 pounds of wire stolen in August. They’ve identified the connectors and they’ve identified the wire as being theirs.
A. Yes.
Q. Okay. You brought that wire to Glendive?
A. Yeah, I did.
Q. So the bottom line is where did you get the wire from?
A. We’ve had a lot of wire held up for a long time.
Q. You see what I’m saying, if that amount of wire was taken, No. 1 and No. 2, it was insulated?
A. Yes.
Q. Two thousand pounds approximately sometime the second week of August, maybe the first or second week ofAugust it was noticed; so those connectors and stingers and leads were all on that wire when it was in Glendive and it was identified, okay? So some of that wire, if not all, had to have come from Prince’s.
A. Yes.
Q. So what I need from you is a logical explanation of where you got the wire from?
A. Well, we got, like I said, that one pile Justin Smith brought in quite a bit back there, but I was in school and I just, I never seen what the weight was and stuff. And he worked out — he worked for us for a while so — and we had him cutting tanks out there and stuff and that’s the time that he took it.
Q. At Princes’s?
A. Yeah, when we were cutting iron out there.
Q. Do you know that he took it from Prince’s?
A. He said his dad gave it to him. I’m not familiar where his dad lives or anything.
“This Court has recognized that ‘possession of stolen property, accompanied by other incriminating circumstances, and false or unreasonable explanation by the suspect is sufficient to sustain a conviction ...’’’ State v. Ramstead (1990), 243 Mont. 162, 170, 793 P.2d 802, 807. (Citation omitted.)
Second, the State has provided sufficient evidence for a jury to conclude that the wire was stolen by another. E.B.G., himself, stated during his taped interview with Officer Skillen, that Justin Smith had taken the wire when he was working for ENT cutting up scrap iron at Prince, the scene of the theft.
“The weight of the evidence and credibility of the witnesses is exclusively the province of the trier of fact. If the evidence conflicts, it is within the province of the trier of fact to determine which shall prevail.” Brown, 781 P.2d at 284. (Citation omitted.) In the instant case, there was sufficient evidence for the jury to determine that the State proved all elements of § 45-6-301(3), MCA. Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES HARRISON and WEBER concur. | [
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MR. JUSTICE SMITH
delivered the opinion of the court.
The judgment from which this appeal is prosecuted reads as follows: “ On the eighth day of September, 1911, David J. Ryan made application to the undersigned judge of said court for a writ to review the action and proceeding of the town council of the town of Conrad, Montana, in removing the said David J. Ryan from office as alderman of said town; and thereupon, and on the same day the writ of review was granted, and the board of aldermen of the town of Conrad, Montana, were ordered to certify and return to the said judge, on the sixteenth day of Séptember, 1911, at 10 o ’clock A. M., at his chambers in the city of Great Falls, Cascade county, Montana, all proceedings of said town council pertaining to the removal of said David J. Ryan from office; that on the sixteenth day of September, 1911, the said board of aldermen certified all the proceedings as ordered, from which it appears to the satisfaction of said judge:
• “First. That the said David J. Ryan was prior to the twenty-first day of August, 1911, one of the duly elected, qualified, and acting aldermen of the town of Conrad, Montana,
‘ ‘ Second. That on the fourteenth day of August, 1911, the following written charges were preferred against the said David J. Ryan, as alderman of said town of Conrad, by the mayor thereof, to-wit:
‘ ‘ ‘ Conrad, Mont., August 14,1911.
“ ‘To the Town Council of the Town of Conrad, Montana — Gentlemen :
“ ‘I hereby prefer charges against Councilman David J. Ryan, on the following grounds:
“ ‘First. That he was guilty of improper conduct, in that while a member of the town council of the said town of Conrad, he defended Joseph Papillion in the case of said town of Conrad against Joseph Papillion on charge of operating without license.
“ ‘Second. That he was and is guilty of improper conduct, in that while a member of the town council of the town of Conrad, he was and is employed by Florian Nigg to prosecute his suit against the town of Conrad for damages and an injunction against the sewer system of said town.
“ ‘I most respectfully ask that a date be set for a hearing as to said charge.
“ ‘Respectfully submitted,
“ ‘F. EL Pifgs, Mayor.’
“Which written charges were entered upon the journal of council on the fourteenth day of August, 1911.
“Third. That on the fourteenth day of August, 1911, the said town council set the twenty-first day of August, 1911, as the regular meeting of the council, as a time for which a hearing would be had on said charges.
“Fourth. That on the twenty-first day of August, 1911, at the regular meeting of the council, a hearing and trial by the said board of aldermen was duly had, at which time said David J. Ryan acted as his own counsel, and the town of Conrad was represented by attorney R. M. Hattersley.
' “Fifth. After the said trial the said town council, by a two-thirds vote of all the members elect, found the charges against the said David J. Ryan true and removed him from office as alderman of said town.
“From the following [foregoing?] facts, the said judge finds the following conclusions of law: (1) That the board of aider-men of Conrad, Montana, had jurisdiction to remove the said David J. Ryan, as alderman of said town. (2) That the said board of aldermen of Conrad, Montana, regularly pursued its authority in said matter. Wherefore it is ordered, adjudged, and decreed that the action of the board of aldermen of the town of Conrad, Montana, in removing the said David J. Ryan from office as alderman of said town, be, and the said [same?] is, hereby affirmed. Dated this tenth day of October, 1911.”
The first question involved is whether the charges filed by the mayor constituted misconduct in office on the part of the relator. We may preface our remarks with the statement that proceedings of this nature are designed to be summary, untechnical, and informal; and necessarily so, because they are intended to be carried forward by city and town officials who are not versed in the nice technicalities of practice and procedure in the courts. The substance of the first charge is that the relator, while a member of the town council, performed services as an attorney in court, in behalf of one Papillion, who was accused-, by the town, of having failed to pay a license fee before engaging in business, and that he, as such attorney, defended Papillion against said charge, and thereby voluntarily placed himself in a situation of opposing, as attorney, the purpose of the town of which he was a councilman, in seeking to punish Papillion for an infraction of the law. The gravamen of the second charge .is that, while a member of the town council, he voluntarily accepted employment, as an attorney, from Florian Nigg, to prosecute a certain suit against the town for damages and an injunction growing out of a controversy relating to the sewer system of the town. Did the course pursued by him constitute misconduct in office ?
The power of the council to remove the relator in a proper ease is undoubted. Section 3218, Revised Codes, declares that the officers of a town consist of a mayor, and two aldermen from each ward. Section 3236, Revised Codes, provides that the council, upon written charges, to be entered upon the journal of its proceedings, after notice to the party accused, and after trial by the council, by a two-thirds vote of all its members elect, may remove any officer. Section 18 of Article Y of the state Consti tution provides that such officer shall be removable for misconduct or malfeasance in office. (State ex rel. Working v. Mayor etc., 43 Mont. 61, 114 Pac. 777.) The relator was charged with misconduct in his office of alderman. In State ex rel. Wynne v. Examining & Trial Board, 43 Mont. 389, 117 Pac. 77, it appeared that the relator was charged with misconduct in his office of chief of police. This court said: “Any act involving moral turpitude, or any act which is contrary to justice, honesty, principle, or good morals, if performed by virtue of office or by authority of office, is included in the term ‘misconduct in office.’ ” We have also held, however, that a charge without substance is no charge. (Bailey v. Examining & Trial Board, 42 Mont. 216, 112 Pac. 69.)
What was the effect of the alleged conduct of the relator? Before entering upon his duties as a member of the town board, he must have taken an oath to support, protect, and- defend the Constitution of the United States and the Constitution of the state of Montana, and to discharge the duties of his office with fidelity. He must also have sworn that he would not knowingly receive, directly or indirectly, any money or other valuable thing for the performance or nonperformance of any act or duty pertaining to his office other than the compensation allowed by law. (Mont. Const., Art. XIX, see. 1; Bev. Codes, sec. 362.) As an attorney at law he has heretofore filed in the office of the clerk of this court his written oath of office, wherein he solemnly obligated himself to faithfully discharge the duties of an attorney and counselor at law with fidelity to the best of his knowledge and ability. (Bev. Codes, sec. 6384.) The gist of the charges is that he has voluntarily placed himself in a situation, as an attorney, which disqualifies him from acting as a councilman in any matter concerning the litigation to which the town of Conrad is a party. “The officers of a municipal corporation, like those of private corporations, are agents of the corporate body. It is a cardinal doctrine of the law of agency that, whenever an agent is invested with authority to use any discretion in the exercise of the powers conferred upon him, it is an implied condition that this discretion shall be used in good faith for the benefit of tbe principal, and in accordance with tbe true purpose of the agent’s appointment. To this extent every agency which is not a purely ministerial one involves a fiduciary relation between the parties.” (Capital Gas Co, v. Young, 109 Cal. 140, 29 L. R. A. 463, 41 Pac. 869.) Let us suppose that the questions were presented to the town board whether Papillion should be prosecuted for operating without a license and whether the suit of Nigg should be defended. Could the relator take part in the deliberations of the council and act upon the questions thus presented with dispassionate, unbiased and unprejudiced judgment for the best interests of the municipality? We do not see how he could do so, being interested in both matters as attorney for the town’s opponents. Nevertheless that was exactly what he agreed to do when he qualified as alderman and took the oath to perform the duties of his office with fidelity. A man cannot legally, or in good morals, act for two principals whose interests are conflicting. He cannot serve two masters. As a councilman the relator had sworn to act with fidelity to the interest of the city, while as an attorney his sworn duty was to discharge his obligations to his clients with equal fidelity. These latter duties were entirely incompatible with those which he had undertaken to perform for his other principal, the town of Conrad. But it may be suggested that every sentiment of propriety and fair dealing would impel him to refuse to act, as an alderman, in any matter in which he was interested as an attorney. Even so, he had taken an oath to refrain from receiving, either directly or indirectly, any money or other valuable thing for the nonperformance of any act or duty pertaining to his office of alderman. It is not a violent or unwarranted presumption, we think, that for his services as an attorney he was to be or had been compensated by his clients. In accepting, or agreeing to accept, such compensation, he, by implication and indirection, contracted to abstain from acting against their interests, as an alderman; and he further impliedly agreed either not to act in the interest of the town or not to act at all. In either event the town would be denied the benefit of his services as a member of its council, and we under take to say that it had a right to command such services and to insist, throug'h its proper officers, that his seat in the council should be filled by one who was uninfluenced by private considerations which were adverse to its welfare and advantage. Judge Dillon, in his work- on Municipal Corporations, fifth edition, section 477, says: “ ‘Cause for removal’ means some substantial shortcoming which renders continuance in office or employment in some way detrimental to the discipline and efficiency of the service, and something which the law and a sound public opinion will recognize as a good cause for his no longer occupying the place. The misconduct for which an officer may be removed must, in general, be found in his acts and conduct in the office from which his removal is sought. But to treat misconduct or incompetency in the performance of official duties as the only ground of removal is to give too rigid and narrow an application to the principles governing the subject. A cause for removal may exist for acts and conduct of a public officer at a time when he is not acting in the performance of a public duty, if these acts and conduct are such as to fairly show that he is unfit for the place.”
In the case of Joyce v. City of Chicago, 216 Ill. 466, 75 N. E. 184, Mr. Justice Hand said: “It is further contended that the offense with which the plaintiff in error was charged pertained to misconduct on his part while acting as a notary public, and not to misconduct on his part while acting as a lieutenant of police, and that, although he may be guilty of the charge, it formed no proper basis for his discharge from office as a lieutenant of police. * * * We do not agree with the contention that no cause is sufficient for the removal of an officer, * * * unless the offense is committed while the officer is acting strictly within the line of his duty as an officer.”
But it is contended that the written charges fail to state a cause of action for misconduct in office, for the reason that there is no averment that the relator’s actions were willful. The case of State ex rel. Winsor v. Mayor etc., 10 Wash. 4, 38 Pac. 761, is cited in support of the argument. The decision in that case, however, was placed upon the gróund that the statute expressly provided that the violation of its provisions must be “willful.” Neither our Constitution nor the Codes require that misconduct in office shall be “willful” in order to justify the removal of an officer. This court, in effect, decided the point adversely to the contention of the appellant, in State ex rel. Working v. Mayor etc., supra. Mr. Mechem, in his work on Public Offices and Officers (section 457), has this to say: “Misconduct, willful maladministration, or breach of good behavior in office do not necessarily imply corruption or criminal neglect. The official doing a wrongful act, or the official neglect to do an act which ought to have been done, will constitute the offense, although there was no corrupt or malicious motive.” This court, in Leggatt v. Prideaux, 16 Mont. 205, 50 Am. St. Rep. 498, 40 Pac. 377, held that the fact that the officer acted in good faith in taking illegal fees was not a defense, and the same point was again decided in State ex rel. Wynne v. Examining & Trial Board, supra, and in State ex rel. Rowe v. District Court, 44 Mont. 318, 119 Pac. 1103.
The judgment is affirmed.
!'Affirmed.
MR. Justice Holloway concurs.
Mb. Chief Justice Beantly concurs in the result. | [
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
This cause is before this court upon appeals by the plaintiff from a decree in favor of defendants and an order denying his motion for a new trial. The controversy involves the right to the use of the water in Blind or Ryan lake, situated in Powell county. Dempsey creek has its source on the eastern slope of a range of mountains extending north and south, and flows through a canyon toward the southeast into the valley, and thence into Deer Lodge river. Blind lake is situated on the public domain, in a depression high up on the eastern slope of the same range, some distance to the southwest. To the north of the lake is a high ridge or backbone, extending several hundred feet to the east beyond the eastern rim of the lake, terminating in a point from which there is a sharp descent to the east, northeast, and south. To the south is another ridge which extends further to the east. Between these, and toward the east and north, extends a canyon, the natural surface of which slopes from the eastern rim of the lake for a distance of 2,725 feet at an average angle or grade of twelve feet to the hundred, and thence, at an angle of about sixteen feet to the hundred, 2,400 feet to the level of Dempsey creek. To the west the country is mountainous. The lake is fed by streams flowing into it from this direction and by flood water from melting snow. Over its eastern rim there is a small flow of water, estimated at from fifteen to forty inches, which follows a well-defined natural channel in the general direction of Dempsey creek. As it descends the slope, the flow gradually decreases in volume until it disappears entirely at or near a point 1,500 feet from the lake, or 3,625 feet from the channel of the creek. From this point to the channel of the creek there is no surface channel. The underlying area consists of granite boulders, intermixed with sand and gravel. The record does not disclose the character of formation in the surrounding elevations nor of the walls of the canyon. The plaintiff and defendants all own agricultural land situate along Dempsey creek some miles below the lake, and claim, under separate appropriations, rights in various amounts to the use of the water flowing therein. On December 27, 1902, an action, theretofore brought in the district court of Powell county to have adjudicated the extent and relative priorities of these rights, in which all the defendants herein or their predecessors were plaintiffs and the plaintiff herein was the defendant, resulted in a decree which definitely fixed the extent of each right and the date at which it was initiated, and by injunction prescribed the order of use accordingly. By that decree the right of plaintiff was declared to be inferior to those of all the other parties, so that during the dry season he was not thereafter able to have the use of any water. At that time few, if any, of the parties knew of the existence of the lake, except by hearsay, and the question whether it is a tributary of Dempsey creek was not brought directly into the controversy. During the pend-ency of the action, the plaintiff, having learned of the existence of the lake, concluded from its situation and surroundings that it had no connection with Dempsey creek, and that he could obtain from it an additional supply of water. He thereupon posted at the outlet of the lake his notice of appropriation and made the record required by the statute. He cleaned out the natural channel, and dug a ditch from the point at which the flow of water disappears, a distance of 1,225 feet. From the end of the ditch to the creek he constructed a flume. In order to store a supply of water, he also built a dam along the lower rim of the lake and put in a headgate. By this means he raised the level of the water in the lake to the extent of about four feet. The normal area of the water surface was about four acres. Plaintiff’s dam increased it to about five acres. This work having been accomplished during the following two years-, plaintiff, having use for the water, permitted a flow of the amount required through the ditch and flume into Dempsey creek, and, when it reached his ditches below, after allowing ten per cent for loss by evaporation, diverted it and used it. Upon complaint by the defendants, in 1905, and again in 1906, he was fined by the district court for contempt for violation of the decree of 1902, by interfering .with the natural flow of water to the use of which the defendants claimed they were entitled. He thereupon brought this action to quiet title to the use of the water flowing from the lake and also that stored therein by means of his dam. He alleges that the flow does not reach, and is not tributary to, Dempsey creek, and that by virtue of his appropriation and the creation of a storage supply by the interception of flood water by means of his dam he has a superior right to the use of 100 inches.
Defendants’ answer puts in issue the material allegations of the complaint, and alleges that plaintiff’s right was adjudicated by the decree of 1902, and that he is estopped by it to set up the claim now made. The court found in favor of defendants: (1) That the decree of 1902 finally adjudicated the rights of all the parties to the use of the water flowing in Dempsey creek; (2) that the right of plaintiff therein was thereby adjudicated to be inferior to that of all the defendants; (3) that plaintiff’s appropriation made in 1902 was of water which is tributary to Dempsey creek; (4) that the normal flow from the lake, when not obstructed by the works and dam erected by plaintiff, reaches the creek and becomes a part of it “by means of open, underground seepage and percolation”; and (5) that after the water leaves the lake it flows “over and down a steep and precipitous route in the direction of and on the watershed of said Dempsey creek” until it enters it and becomes a part of the water therein.
The contention is that the evidence is insufficient to justify the findings. It will be noted that the term “open,” used in connection with the phrase “underground seepage and percolation,” renders finding 4 unintelligible. To this term as used here must be assigned the meaning “plain, in sight, exposed to view.” Water seeping or percolating underground cannot, in the very nature of things, be in plain sight or exposed to view. Doubtless the term crept into the finding by inadvertence of the trial judge or by mistake of the clerk in preparing the record for the printer. Eliminating this term, the fact found is that the overflow, when not obstructed, finds its way into the creek by seeping or percolating through the earth in the canyon. It will be noted, also, that finding 5 is inconsistent with this finding. But notwithstanding this inconsistency, the court found the ultimate fact that the overflow naturally finds its way into the creek and adds to the volume of its flow. Hence the conclusion that the plaintiff is estopped by the decree of 1902 to assert the claim which he now seeks to establish. We gather from the conclusions of law stated by the trial judge that he was of the opinion, also, that the judgments in the contempt proceedings were of binding import, in that they necessarily implied a construction of the decree as adjudicating plaintiff’s rights.
As heretofore stated, the question as to whether the lake is tributary to the creek was not directly involved in the action. The parties were not aware of its existence except by hearsay. Whether, therefore, the plaintiff is estopped by the decree to assert his present claim, depends upon the facts as they actually exist, and not upon a mere construction of it implied by the judgments in the contempt proceedings. Furthermore, so far as the record shows, the violation complained of by the defendants in each instance was an interference with the natural flow of the water in the creek, by which they suffered deprivation. It does not appear that the right of plaintiff to appropriate the overflow of the lake or to use the lake as a reservoir for storage purposes was considered or determined. The judgments are not pleaded. For these reasons they are not to be looked to as aiding the decree or as determinative to any extent of plaintiff’s rights. If in fact the lake is not tributary to the creek, the existence of the decree does not make it so, and, though it be conceded that in the contempt proceedings the court undertook to determine the rights now asserted by plaintiff, such determination cannot be given any conclusive effect. Substantive property rights cannot be adjudicated in this summary way. For this purpose the right asserted must be put in issue by formal pleadings, in tbe appropriate form of action at law or in equity, and determined after due notice and a hearing according to the mode usual in such cases. (State ex rel. Boston & Mont. etc. Co. v. District Court, 30 Mont. 96, 75 Pac. 956.) Of course, if the lake is tributary to the creek, the decree of 1902 concludes plaintiff from asserting a right to appropriate the overflow.
The contention of plaintiff, therefore, presents the question: Does the evidence sustain the ultimate finding that the lake is tributary to the creek? The burden was necessarily upon the plaintiff to establish his right to intercept and appropriate the natural overflow from the lake, for if this overflow, however small in volume, reaches the creek by reasonably ascertainable channels, it is one of its sources of supply.
The evidence introduced by plaintiff tended to show that there is a complete disappearance of it at a point 1,500 feet distant from the lake, and that beyond that point there is no surface channel, nor any indication upon the surface of an underground way or channel in the direction of the creek. Prima facie, therefore, it was thus made to appear that the overflow does not find its way into the creek. The lake being upon the public domain, the plaintiff was prima facie entitled to make use of it and to intercept the overflow as he did, provided that in doing so he did not interfere with the use by defendants of the natural flow in the creek. The burden was then cast upon the defendants to show that, if uninterrupted, the flow finds its way into the creek by a defined channel either upon the surface or underground, and that plaintiff’s appropriation of it diminishes the volume of water flowing in the creek. This they undertook to establish by showing the character of the debris filling the canyon, and the configuration of the adjacent country. It does not appear, however, from the statement of any witness, that there is any natural surface channel beyond the point of disappearance. While it does appear that the debris in the canyon is perhaps pervious to water, there wqs not any attempt to show that this is the fact, nor that the vegetation on the surface prior to plaintiff’s diversion indicated a defined watercourse beneath, nor that there is any sound of running water, nor that there are springs bursting out in the channel below at the .mouth of the canyon, nor that the flow of the creek is increased in volume by accession from the lake where it passes the canyon. Nor was it shown whether the creek is upon bedrock, or whether it runs over an impervious-filling of the canyon upon which its bed lies. Neither was it made to appear that the formation of the surrounding elevations is impervious to water so that the.overflow from the lake must of necessity seek an outlet through the canyon. Indeed, the evidence introduced by the defendants has not sufficient probative force to present a substantial conflict upon the prima facie case made by the plaintiff. It is remarkable for what it fails to show, rather than what it does show. The court ivas evidently of the opinion that since the direction of the flow, so far as it is visible to the eye, is toward the creek, and since the slopes of the surrounding elevations all converge toward the creek, it was impelled to the conclusion stated in the findings. A moment’s reflection, however, is sufficient to satisfy a reasonable mind that the evidence furnishes no substantial ground for the inference. When water seeps into the earth, it mingles with the soil and remains suspended therein, or moves through it either by percolation, thus losing its identity as a flowing stream, or passes away by one or more defined channels.
It has been settled by a long line of decisions that percolating water is not governed by the same rules that are applied to running streams. “The secret, changeable, and uncontrollable character of underground water in its operations is so diverse and uncertain that we cannot well subject it to the regulations of law, nor build upon it a system of rules, as is done in the case of surface streams. Their nature is defined, and their progress over the surface may be seen and known and is uniform. They are not in the earth and a part of it, and no secret influences move them; but they assume a distinct character from that of the earth, and become subject to a certain law — the great law of gravitation. There is, then, no difficulty in recognizing a right to the use of water flowing in a stream as private property, and regulating that use by settled principles of law. We think the practical uncertainties which must ever attend subterranean waters is reason enough why it should not be attempted to subject them to certain and fixed rules of law, and that it is better to leave them to be enjoyed absolutely by the owner of the land as one of its natural advantages, and in the eye of the law a part of it; and we think we are warranted in this view by well-considered cases.” (Chatfield v. Wilson, 28 Vt. 49.) The rule, though variously stated, is recognized by the courts both of England and in this country. (Acton v. Blundell, 12 Mees. & W. 324; Dickinson v. Grand Junction Canal Co., 7 Ex. 282; Chasemore v. Richards, 7 H. L. Cas. 349; Gould v. Eaton, 111 Cal. 639, 52 Am. St. Rep. 201, 44 Pac. 319; Wheelock v. Jacobs, 70 Vt. 162, 67 Am. St. Rep. 659, 43 L. R. A. 105, 40 Atl. 41; Bliss v. Greeley, 45 N. Y. 671, 6 Am. Rep. 157; Wheatley v. Baugh, 25 Pa. 528, 64 Am. Dec. 721; Mosier v. Caldwell, 7 Nev. 363; Strait v. Brown, 16 Nev. 317, 40 Am. Rep. 497; Forbell v. City of New York, 164 N. Y. 522, 79 Am. St. Rep. 666, 51 L. R. A. 695, 58 N. E. 644; Taylor v. Welch, 6 Or. 198; Davis v. Spaulding, 157 Mass. 431, 19 L. R. A. 102, 32 N. E. 650; City of Los Angeles v. Pomeroy, 124 Cal. 597, 57 Pac. 585; Metcalf v. Nelson, 8 S. D. 87, 59 Am. St. Rep. 746, 65 N. W. 911; Katz v. Walkinshaw, 141 Cal. 116, 99 Am. St. Rep. 35, 64 L. R. A. 236, 70 Pac. 663.) See, also, note to Wheelock v. Jacobs, reported in 67 Am. St. Rep. at page 659, where the rule is fully discussed and the cases distinguished. The result of it is that the proprietor of the soil, where such water is found, has the right to control and use it as he pleases for the purpose of improving his own land, though his use or control may incidentally injure an adjoining proprietor. The general rule thus stated is subject, however, to the same limitation as the use of the land itself, viz., that embodied in the maxim, “Sic utere tuo ut alienum non Icedas,” or, as is said in some of the cases, the use must be without malice or negligence. This seems to be in accord with the current of decisions in the United States.
Subsurface water flowing in defined channels reasonably ascertainable is subject to the same rules as water flowing in surface streams; but there is no presumption that any sub surface water, in whatever form it may be found, is tributary to any stream. (City of Los Angeles v. Pomeroy, and Metcalf v. Nelson, supra.) The burden is upon him who asserts this to be a fact. We think that it may be established.by circumstantial evidence, as was done in Strait v. Brown and Forbell v. City of New York, supra; but the evidence must have so much of substance and probative value as will reasonably exclude the contrary hypothesis. This court recognized this rule in Leonard v. Shatzer, 11 Mont. 422, 28 Pac. 457, and in Hilger v. Sieben, 38 Mont. 93, 98 Pac. 881.
The condition in which this case has reached this court, however, does not require the announcement of any definite rule. It does not appear that the lake water reaches the creek by any means. As we have said, the conclusion reached by the trial court that it does was based upon speculation rather than upon substantive evidence; hence the findings may not be allowed to stand. It is apparent from the disclosures in the record that there are many additional facts readily obtainable, the production of which would enable the trial court to reach a conclusion upon a full disclosure of the facts as they may be made to appear. For this reason, and because of the importance of the legal questions which may require determination, we think it proper to direct a new trial, at which the parties may produce such additional evidence if they desire to do so. We observe, too, that, though the plaintiff may be defeated in his claim of right to appropriate the natural overflow from the lake, it may be possible for him so to present the facts touching the use of the stored water that the court may decree him a substantial right in that behalf. This feature of the case seems to have been lost sight of by the court when it made its findings..
The decree and order are reversed, and the cause is remanded for a new trial.
Reversed and remanded.
Mb. Justice Smith and Mb. Justice Holloway concur. | [
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MR. JUSTICE GALEN
delivered tbe opinion of- the court.
This action was brought to recover tbe sum of $72.18, alleged to have been paid by reason of certain false and fraudulent representations, upon wbicb tbe plaintiff acted with resultant damages. Issue was joined by tbe defendant’s answer and reply made thereto by tbe plaintiff. Tbe cause was tried before a jury, and, at tbe conclusion of all of tbe evidence submitted by both parties, tbe defendant moved tbe court to direct tbe jury to return a verdict in bis favor, which motion was granted, tbe jury discharged from further consideration of tbe case, and judgment ordered in favor of tbe defendant, together with bis costs, and for tbe dismissal of tbe plaintiff’s complaint. Judgment was entered accordingly. Defendant filed a cost bill in tbe action for tbe total sum of $53.90. Motion was made by plaintiff to retax tbe costs, directed specifically to an allowance made to Francis McLeod as a witness for tbe defendant for seven days’ attendance upon tbe court, from May 15 to May 22, 1925, excluding Sunday, for tbe sum of $21 wbicb was by tbe court denied. Tbe appeal is from tbe judgment.
But two questions are involved necessary for determination by this court in disposition of tbe appeal, viz.: (1) Did tbe court err in taking tbe case from tbe jury; and (2) Did tbe court err in refusing to retax tbe costs ?
1. It appears that on or about tbe fourteenth day of Oc tober, 1924, tbe plaintiff commenced an action in tbe district court of Lewis and Clark county against one G. E. Stillwell to recover tbe sum of $615.13., together with an attorney’s fee of $75 and tbe costs of suit. A writ of attachment was issued in that action, wbicb was delivered to tbe sheriff of Lewis and Clark county, who, in pursuance thereof, levied upon certain household furniture and effects belonging to Stillwell in the possession of R. H. Claflin. Thereafter, about the 4th of December, 1924, a judgment was regularly entered in that case in favor of the plaintiff in the sum of $757.17, together with costs. On the date last mentioned an execution was regularly issued on the judgment and placed in the hands of the sheriff of Lewis and Clark county, and levy was by him made upon the attached property in the possession of Claflin to satisfy the judgment. Prior to the time that the property was levied upon by the sheriff under the execution, one I. R. Eidell, president and manager of the Helena Adjustment Company, interviewed R. H. Claflin, who held the goods of Stillwell in storage, and was informed by Claflin that there were certain charges due on the property amounting to the sum of $108.18, for which Claflin stated he had a lien, and demanded the payment thereof before the property should be turned over to the sheriff under the execution. The plaintiff asserts that, in pursuance of Claflin’s demand, and in reliance upon his statements, and in belief that the same were true, I. R. Eidell, its managing agent, paid to Claflin, on December 6, 1924, the amount claimed to be due on the property for storage; that had it not been for such representations the money would not have been paid to Claflin. In the complaint it is alleged that the representations so made to I. R. Eidell respecting the amount of money due for storage were false, that Claflin knew them to be false, and that they were made with the intent and purpose of defrauding the Helena Adjustment Company, as there was not in fact any greater amount due Claflin for storage than the sum of $36, in consequence whereof the plaintiff herein was defrauded and damaged in the sum of $72.18.
I. R. Eidell, as a witness for the plaintiff, testified that at the time that action was institued and the writ of attachment issued he had a conversation with Mr. Claflin respecting the storage of the property of Stillwell, the character of such property, and the amount due thereon for storage. Claflin showed him the ledger sheet, and said there was $100 and some odd cents dne, and that if such amount were paid to him there would be no objection to the plaintiff taking the property. The ledger sheet exhibited by Claflin showed the account of G-. E. Stillwell with Claflin, wherein appears at the top of the statement “Rate $1.50 per mo.,” under which itemized charges appear as follows: “1923 Forward, $72.70.” Then a separate charge for every month’s storage is shown at the rate of $1.50 per month during 1923, beginning with. March 20 and ending with January 20, 1924. The account is then carried on the same sheet, and shows “1924 Jan. 1. Brought down $87.70,” storage January 20 to April 20, at the rate of $1.50 per month, each month being separately shown. “Interest to April 7, $13.98”; then the storage charges are shown for each month at $1.50 per month, April 20 to December 20. Total $118.18. A credit of $10 cash is shown, leaving a balance due of $108.18. After further negotiations and just before the property was delivered on the execution, Eidell, acting on behalf of the Helena Adjustment Company, paid to Claflin the amount so claimed by him, and received a receipt therefor, dated December 6, 1924, from which the following appears:
“Storage on goods in lot No. 1308. Charges balance.
Bill rendered..............................$106.68
Nov. 20, storage to Dec. 20.................. 1.50
$108.18
“Paid Dec. 6, F. M. Claflin Van & Storage, Helena, Montana.”
He further testified that at the time he made payment of the amount of Claflin’s claim against the .property he had never seen or examined it, due to the fact that Mr. Claflin had told him that the property was stored in a distant warehouse, and that it was covered up with other goods and was difficult to get at. Although he asked to see an inventory of it, It was not shown to him; Claflin indicating that it had been mislaid. In' making the payment to Claflin, however, Eidell says that he went upon the assumption that a person living in apartments such as are to be found in the “Blackstone Apartments, are supposed to be very wealthy,” and “are not supposed to have very poor furniture”; that he was told that “it was pretty nice stuff.” He testified: “I thought I was getting a big lot of furniture — three or four — probably eight or nine hundred dollars worth of furniture”; that his client told him “the Stillwell stuff was pretty nice stuff.” That he knew from Mr. Claflin that Stillwell “bought good goods,” and that he had knowledge that at least a portion of the furniture had been bought from Claflin. And further, he stated that he thought there must be “a big lot of furniture” in storage in consequence of the amount of Claflin’s bill. After Eidell had paid the amount of Claflin’s claim against the goods and they were delivered to the sheriff under the execution, Eidell found for the first time that the goods were not so extensive or valuable as he had anticipated. He then made protest to Mr. Claflin that the goods delivered were not in quantity such as he expected. He testified that: “When Mr. Claflin tried to deliver the goods at Curtin’s I was there to receive it; I expected a big dray load full of goods; when I found only a small dab of goods, I immediately went to the telephone and telephoned Mr. Claflin and wanted to know what all this meant. ‘Why,’ he said, ‘you got all the goods that was there of Stillwell’s.’ ‘Well,’ I said, ‘you can’t charge that much storage on it.’ ‘Well,’ he said, ‘I had another bill against this in there.’ Q. Did you say anything further to him about this? A. Yes, I said a few things. Q. What did you say to him; what.did he say to you? A. Well, he said: ‘Well, I have got the money.’ ” Subsequent to this telephone conversation Eidell saw Claflin and talked to him concerning the matter in an endeavor to bring about an adjustment, and Claflin did not take very kindly to it. The witness insists the charges shown him against Stillwell were for storage, and states that after he found the goods were not so extensive or valuable as he had expected he protested to Clafiin the amount of the storage charges which had been paid thereon, saying: “You told me this whole bill was for storage on the goods, and the goods have only been in storage for two years; you could not have the figure of $108 for 24 months at $1.50 a month; I am going to sue you for the balance.” To which Clafiin replied that he had another bill against the property; that he had delivered all of Stillwell’s goods, and so far as threatened suit was concerned to “shoot.” The storage charges in fact only amounted to about $38, but the sum of $108.18 was paid to Clafiin, Eidell says, upon the assumption and belief that that was the correct amount due for storage, and he states that he would not have made payment of such an amount had he not understood it was all for storage charges. Clafiin having refused to make refund of any part of the money so paid to him by the plaintiff, this action was instituted.
This is substantially all of the evidence upon which the plaintiff relies in support of his case and contention made that the court was in error in taking the cause from the jury. From the evidence introduced by the defendant it appears that Stillwell had purchased a considerable amount of the goods in storage from Clafiin, on which there was a balance remaining unpaid, and that at the time they were delivered to Clafiin for storage Stillwell agreed that they might he held by Clafiin as security for the amount of Stillwell’s indebted-' ness thereon, amounting to the sum of $72.70. He denies any fraud or fraudulent representations made to the plaintiff in the transaction, and asserts that the plaintiff paid the amount of the Clafiin bill as shown by the books with full knowledge of all of the facts respecting the conditions under which they were held, Eidell asserting that he had information from his client that they were of value far in excess of Clafiin’s bill.
Is the evidence sufficient in law to warrant the submission of the question of fact to a jury? We think not. Apparently, the plaintiff paid its money “for a pig in a poke.” Its manager thought he was making a splendid investment from information before him, so he paid his money for the release of the property “sight unseen,” and he afterwards simply found that he had made a bad bargain. The alleged fraud was not sufficiently established, and there was nothing to be passed on by the jury.
As defined by our statute, section 7480, Eevised Codes of 1921: “Actual fraud, within the meaning of this chapter, consists in any of the following acts, committed by a party to the contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract: (1) The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;' (2) The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; (3) The suppression of that which is true, by one having knowledge or belief of the fact: (4) A promise made without any intention of performing it; or (5) Any other act fitted to deceive.”
“In order to go to the jury the plaintiff must make out a prima facie ease embracing the elements of actual fraud, viz.-. (1) A representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity, or ignorance of its truth; (5) his intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) his reliance upon its truth; (8) his right to rely thereon; (9) and his consequent and proximate injury. 26 C. J. 1062.” {Lee v. Stockmen’s Nat. Bank, 63 Mont. 262, 207 Pac. 623.)
“When it appears that a party, who claims to have been deceived to his prejudice, has investigated for himself, or that the means were at hand to ascertain the truth * * * of any representation made to him, his reliance upon such representations made to him, however false they may have been, affords no ground of complaint.” (Grindrod v. Anglo-American Bond Co., 34 Mont. 169, 85 Pac. 891; Power & Bro. v. Turner, 37 Mont. 521, 97 Pac. 950; 26 C. J. 1149.) ‘ ‘ One cannot secure redress for fraud where he acted in reliance upon his own knowledge or judgment based upon independent investigation.” (26 C. J. 1162.) So that where, as in this case, there is no substantial evidence in support of the alleged fraud, a question of law is presented for the court’s decision, and the cause was properly taken away from consideration by the jury. (Lee v. Stockmen’s Nat. Bank, supra; Escallier v. Great Northern R. Co., 46 Mont. 238, Ann. Cas. 1914B, 468, 127. Pac. 458; Brophy v. Idaho Produce & Provision Co., 31 Mont. 279, 78 Pac. 493.)
2. As stated, the motion to retax costs is based upon plain- tiff’s contention that a witness who attends court voluntarily, without subpoena, is not entitled to mileage nor per diem allowance of more than for the days in attendance when actually engaged in giving testimony as a witness. It appears that the cause was set for trial for May 15, 1925, and that Claflin induced the witness Francis McLeod to come voluntarily to Helena on that date, without subpoena, from her home at Norris, in Madison county, to give testimony in the action as one of his witnesses. Because of congestion of the court calendar the ease was not called for hearing until May 22, and it was on that date that the witness gave her testimony. Was the item of costs included in defendant’s cost bill for the attendance of this witness, amounting to $21, properly allowable? She was paid by Claflin, for her attendance upon the court, her actual traveling expenses incurred and at the rate of $3 per day from May 15 to May 22, inclusive. Her actual expenses amounted to $20.04 and her per diem to $24, the total cost to Claflin for the witness’ attendance amounting to $44.04. Judicially it is known that Norris is more than thirty miles away from Helena.
Process by which a witness is required to attend upon court in an action is by subpoena (sec. 10618, Rev. Codes 1921), and a witness is not required to appear out of the county in which he resides unless the distance from his place of residence to the place of trial be less than thirty miles. (Id. 10622.) A person present in court may be compelled to testify in the same manner as if he were in attendance upon a subpoena issued by the court. (Id. 10623.) A witness in a civil or criminal action before a court of record is entitled to a per diem of $3 for every day he is in attendance upon court as a witness, and for mileage, in traveling to the place of trial and returning to the place from whence he was called, at ten cents for each mile. (Id. 4936.) And witness fees and mileage are proper items of cost to be allowed the prevailing party in a civil action. (Id. 9787, 9804). The party to .whom costs are awarded is entitled to include in his bill of costs his necessary disbursements including the “legal fees of witnesses, including mileage.” (Id. 9802.) As to state cases, the statute provides, without reference to the reason for the attendance of the witness: ‘ ‘ The clerk of any court before which any witness shall have attended on behalf of the state or county, in any civil action, must give to such witness a certificate, under seal, of travel and attendance, which shall entitle him to receive the amount therein stated from the state or county treasurer.” (Sec. 4903, Rev. Codes 1921.) We have no similar or other statute applicable to civil cases generally; and, in the absence of specific legislation on the subject, we are called upon to determine whether a witness who voluntarily attends the trial of a case as a witness, at the request of one of the parties, is entitled to per diem'iov the days in actual attendance and to mileage. We are of opinion that it is a subject proper for determination by the court in each instance arising, based upon tbe facts made to appear respecting tbe necessity of the witness’ attendance and the circumstances under which he is called, and remains in attendance upon the court. Justice requires the attendance of material witnesses, cognizant of material facts; hence encouragement should be given them to voluntarily attend upon a trial and give oral testimony concerning facts within their knowledge. No obstacle or hindrance should be placed in their way. As such testimony may be essential in the due administration of justice, a witness ought to be protected in coming voluntarily into our courts to aid in the ascertainment of truth in the accomplishment of right results. (State ex rel. Coe v. District Court, 73 Mont. 265, 235 Pac. 766.) The only office of a subpoena is to compel the attendance of a witness, and it seems to us a matter wholly immaterial to the plaintiff whether the witness was subpoenaed or not. Good faith on the part of litigants is required in procuring the attendance of witnesses at a trial by means of compulsory process as well as where they are induced to appear voluntarily. (Burrow v. Kansas City Co. (C. C.), 54 Fed. 275.)
In the case before us, had the witness been required to attend per force of a subpoena, the result would have been the imposition of additional costs upon the plaintiff; so that where the witness was a material one, as in this instance, plaintiff should not be heard to complain.
The conclusion thus reached is supported by the weight of authority and by former decisions of this court. (40 Cyc. 2182; Vence v. Speir, 18 How. Pr. (N. Y.) 168; Burrow v. Kansas City Co., supra; Great Falls Meat Co. v. Jenkins, 33 Mont. 417, 84 Pac. 74; In re Gallatin Irr. Dist., 48 Mont. 605, 140 Pac. 92; Spaulding v. Maillet, 57 Mont. 318, 188 Pac. 377.) In our opinion, the service of a subpoena upon a witness is not a prerequisite to the allowance of per diem, for at tendance and mileage. (Burrow v. Kansas City Co., supra; 40 Cyc. 2182.) And in the absence of a clear showing of bad faith on the part of the prevailing party in calling a witness, the trial court’s action in allowing him mileage and per diem will not be interfered with on appeal. (Spaulding v. Maillet, supra.)
The judgment is affirmed.
'Affirmed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Stark and Matthews concur. | [
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] |
ME. JUSTICE HOLLOWAY
delivered the opinion of the court.
In this action, upon an account stated, plaintiff recovered judgment, and defendants appealed.
The record discloses that on April 2, 1921, Gordon Campbell, Helen Campbell, his wife, and L. C. Stevenson executed, acknowledged and caused to be recorded a declaration of trust, in which the declarants recited that their purposes were to acquire certain real property, hold the same in trust, and explore it for oil and gas, and to conduct other operations enumerated; that the beneficial interests acquired should be represented by 10,000 units or shares evidenced by certificates; that the units or shares should be sold; that the trust should be known as the Gordon Campbell-Eevin Syndicate; that the business of the syndicate should be managed by a board of trustees consisting of three members, the first board to be composed of the declarants; that Stevenson should hold office until the first Monday in January, 1923, Mrs. Campbell, until the first Monday in January, 1924, and Gordon Campbell, until the first Monday in January, 1925; that, at the annual shareholders’ meeting on the first Monday of January of each year beginning in 1923, one trustee should be elected for the term of three years. Provision was made for regular monthly meetings of the board and for called meetings. The other terms of the declaration are not material here.
It appears that the 10,000 units or shares were sold; that at the annual meeting in January, 1923, E. M. Harvey was elected trustee to succeed Stevenson; that on February 10,1923; Helen M. Campbell resigned as a trustee; that on February 19, an attempt was made to appoint W. ~W: Rhea to fill the unexpired term; that later Rhea resigned, and on August 6, 1923, an attempt was made to appoint C. A. Springmyer to succeed him.
On March 4,1924, there was what purported to be a meeting of ^the trustees of the syndicate, at which meeting Gordon Campbell and Springmyer were the only persons present. Gordon Campbell presented an account for $40,903.94 in behalf of the plaintiff and against the syndicate. This account had been prepared by Springmyer at Campbell’s direction, and the purported action thereon, as disclosed by the minutes of the meeting, follows:
“Statement of account in detail between the Syndicate and the Gordon Campbell Petroleum Company as of March 1, showing amount of $40,903.94 owing by the Syndicate to the Gordon Campbell Petroleum Company was presented. The same was examined and discussed, and having been found correct, was duly approved and accepted as correct.”
We deem it unnecessary to consider at length Springmyer’s title to the office of trustee. For the purposes of this appeal, he may be treated as a de facto trustee.
An account stated is a new contract arising out of an ac count existing between the parties — an agreement that the items of the account and the balance struck are correct, with an agreement, express or implied, for the payment of such, balance. The consideration for the new contract is the original account (Martin v. Heinze, 31 Mont. 68, 77 Pac. 427), or speaking with greater exactness, the consideration is the settlement of the original account (Johnson v. Gallatin Valley Milling Co., 38 Mont. 83, 98 Pac. 883).
This action is upon the new contract, which it is alleged was entered into on March 3, 1924, and plaintiff must recover upon that contract or fail. (Noyes v. Young, 32 Mont. 226, 79 Pac. 1063.)
While plaintiff is in form a corporation, it is in fact but an alias under which Gordon Campbell was conducting his private business at the times mentioned herein. (Hanson Sheep Co. v. Bank, 53 Mont. 324, 163 Pac. 1151.) This is apparent from Campbell’s own testimony, and it is admitted to be the fact in the brief of plaintiff’s counsel.
If, then, the new contract pleaded was entered into at any time, it must have been made by Gordon Campbell as one party thereto and the syndicate represented by someone competent to act for it, as the other party.
The record discloses that the original account was presented by Gordon Campbell, and this constituted a sufficient offer. If it were agreed to and acknowledged to be correct by the syndicate, then there was an acceptance of the offer/ with the result that the account was stated and defendants cannot complain of the judgment. But it is axiomatic that a person cannot contract with himself. There must be the meeting of two separate and independent minds, at least two parties to a contract, and each must be competent. (See. 7468, Rev. Codes 1921.)
It is the contention of the defendants that the plaintiff’s own case discloses a want of competent parties to make the new contract pleaded and relied upon.
The defendant syndicate is not a legal entity. It is merely a voluntary association of individuals- — a business trust. The title to the property in which the individuals, as unit holders, are interested, is held by a board of trustees consisting of three persons, at least two of whom must concur in order to render valid any act done by or on behalf of the syndicate. The declaration of trust so provides, and its provisions measure the powers of the trustees so far as we are concerned now. ,(Sec. 7914, Rev. Codes 1921.) The representatives of the individuals are trustees of an express trust (sec. 7902, Rev. Codes), and the individuals as unit holders are the beneficiaries (sec. 7881, Rev. Codes).
But the trustees are not merely agents who act independently one of another. They constitute a board and they can act only as a unit (sec. 6789, Rev. Codes) in the disposition of any business of the trust which requires the exercise of judgment or discretion (Coleman v. Connolly, 242 Ill. 574, 134 Am. St. Rep. 347, 90 N. E. 278; Hosch Lumber Co. v. Weeks, 123 Ga. 336, 51 S. E. 439; Sears’ Trust Estates as Business Companies, see. 132; Dunn on Business Trusts, sees. 97, 98).
The relationship existing between the trustees and the beneficiaries is somewhat analogous to, but is of a more confidential character than, that existing between the directors of a corporation and the corporation itself (Tatem v. Fglanol Min. Co., 42 Mont. 475, 113 Pac. 295), and it is elementary that a corporation acts through its board of directors as an entity and not through the individuals who may happen to compose the board (Farrell v. Gold Flint Min. Co., 32 Mont. 416, 80 Pac. 1027).
If the contract, the account stated, was ever made at all, it was made on March 4 or April 12, 1924, and on each of those dates Gordon Campbell was one of the three trustees of the syndicate. The claim presented on March 4 was owned by Gordon Campbell, and the action taken on that day was adverse to the syndicate, in that it assumed to fix definitely a liability upon the syndicate of more than $40,000.
So much of section 7890, Revised Codes of 1921, as is material here, reads as follows:
“Neither a trustee nor any of his agents may take part in any transaction concerning the trust in which he or any one for whom he acts as agent has an interest, present or contingent, adverse to that of his beneficiary, except as follows:
“1. "When the beneficiary, having capacity to contract, with full knowledge of the motives of the trustee, and of all other facts concerning the transaction which might affect his own decision, and without the use of any influence on the part of the trustee, permits him to do so.”
Since Campbell was a trustee of the syndicate and was presenting his individual claim against it, he could not vote as a trustee upon the approval of his claim, if his vote were necessary to secure favorable action. (Curtin v. Salmon River etc. Co., 130 Cal. 345, 90 Am. St. Rep. 132, 62 Pac. 552; 4 Fletcher’s Ency. Corp., secs. 2340-2342), or, stated in different terms, before he could participate, the other two trustees must have been present and consenting.
The record discloses that Campbell and Springmyer were the only persons present at the meeting on March 4, when Campbell presented his account; hence Campbell’s presence was necessary to constitute a quorum, and his vote was necessary to the allowance or approval of his account. Under these circumstances it is impossible that a contract allowing his claim could have been made, for Campbell was disqualified to act upon the matter as a trustee. (Jones v. Morrison, 31 Minn. 140, 16 N. W. 854; North Confidence M. & D. Co. v. Fitch, 58 Cal. App. 329, 208 Pac. 328.) This would be the rule if the syndicate were a corporation and Campbell and Springmyer its directors. In McConnell v. Combination M. & M. Co., 31 Mont. 563, 79 Pac. 248, this court said: “The directors had power to adopt a Code of by-laws (Comp. Stats.-1887, Div. 5, sec. 454); but they could not, even under a by-law, vote a salary to one of their number, when the vote of such director was necessary to make up a quorum. Under the application, of this principle it makes no difference whether the trustees intended to defraud the company and the stockholders of the amount of money appropriated for the purpose of paying their salaries, or whether they acted in the utmost good faith.” Because of the more intimate relationship exist ing between a trustee and the beneficiary, this rule is applied most rigorously.
Campbell was incompetent to act upon his own claim, as a trustee of the syndicate, hence the pretended approval of his claim — the pretended statement of the account — was void for want of competent representatives of the syndicate. The transaction amounted to nothing more than the approval of the account 'by Springmyer alone.
But it is insisted by counsel for plaintiff that the pretended statement of the account by Campbell and Springmyer was ratified at the meeting of the trustees on April 12, when Harvey, Campbell and Springmyer were all present, and when Campbell’s vote was not necessary to favorable action. It is a sufficient answer to say that, even if the pretended contract of March 4 might have been ratified and made binding by the board by appropriate action taken on April 12, such action was not taken.
It is not material to inquire whether the trustees should have kept a record of the proceedings of their board meetings. They did keep such a record, and the minutes of the meeting of April 12 assume to disclose just what action was taken, and those minutes were approved and signed by Campbell as president of the board and by Springmyer as secretary. Springmyer testified that at that meeting “this identical account stated was considered and discussed.” He does not say that it was approved or that the action of Campbell and himself in assuming to state the account, was ratified. Concerning the meeting of April 12, Campbell testified: “All of the trustees were present, including Harvey. I personally attended that meeting, and I signed those minutes, and those minutes correctly state what business was transacted at that meeting or what was done at that meeting.”
Since Campbell is, in fact, the plaintiff herein, and was testifying in his own behalf under examination by his own counsel, we may assume that his statement above is true, and is as favorable to Mm as the facts would warrant. The minutes to which he refers read as follows: “The affairs of the syndicate were discussed. The indebtedness of the syndicate to the Gordon Campbell Petroleum Company was also discussed, and, upon motion made by Trustee Harvey, seconded by Trustee Springmyer, it was moved and carried that the trustees be empowered, authorized, and directed to execute a note to Gordon Campbell Petroleum Company for the indebtedness of the syndicate to the said Gordon Campbell Petroleum Company, or any part of such indebtedness, on behalf of the syndicate.”
It will be observed that the amount of the indebtedness is not mentioned, that nothing whatever is said concerning an account stated, no mention made of the pretended meeting of March 4. If it had been intended to ratify the action of Campbell and Springmyer, it is all but inconceivable that something would not appear to indicate that intention. The minutes negative the existence of such intention, for, not only do they not purport to approve the statement of the account, they l’eeite that the board ordered that a note be given for the amount of the indebtedness, without indicating the amount.
It is easily conceivable that Trustees Harvey and Springmyer, after due consideration of the matter, might have been quite willing to execute a note which would postpone action for a definite time and altogether unwilling to state an account which might be sued upon at once, without the necessity of proving the items upon which such statement was based.
But whatever the facts may be, this record fails to show that the action of Campbell and Springmyer, in assuming to state the account on March 4, was ever ratified by the board, either on April 12 or at any other time. The evidence not only fails to sustain the allegations of the complaint; it discloses affirmatively that the contract relied upon was not made.
Rehearing denied February 15, 1926.
The judgment is reversed and the cause is remanded, with directions to enter judgment for defendants for their costs.
Reversed.
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 plaintiff, as guardian of one Ted Champion, an incompetent person, commenced this action against the defendant bank and one Bodine, its receiver, to compel the allowance of the amount he had on deposit at the time the bank closed its doors, as a preferred claim. Issue was joined, and the evidence submitted to a referee, who made findings thereon and submitted them to the court. The court adopted certain of the findings, and rejected others, and, from the findings finally made, concluded as a matter of law that the claim of plaintiff should be allowed, but merely as that of a general creditor. Judgment was entered accordingly, and from this judgment plaintiff has appealed. There is no conflict in the evidence and no dispute as to the facts.
On June 23, 1917, plaintiff opened a “savings account” with the defendant bank, with the privilege of checking against it. No certificate of deposit was issued to him, and the account differed from the usual checking account only in that the bank agreed to pay interest on balances, and carried the account under the title “William Pethybridge, Guardian of Ted Champion.” The money deposited was commingled with other funds of the bank. Thereafter the account was from time to time increased or diminished by deposits and withdrawals, until, in the latter part of the year 1921, the bank became insolvent and closed its doors, at which time plaintiff’s balance amounted to $626.66.
In January, 1922, the bank reorganized by securing a creditors’ agreement, which was signed by this plaintiff, and under the terms of which the plaintiff agreed to accept a certificate of deposit for the amount of his balance, payable in one year, with the privilege, at the option of the board of directors of the bank, of renewing the same for a second year. Such a certificate was thereafter issued by the bank, but was never delivered, as plaintiff never surrendered his original deposit book or evidence of indebtedness. Plaintiff signed the “creditors’ agreement” without first obtaining authority of the court having control over the guardianship matter.
The reorganization of the bank was unsuccessful, and, on June 23, 1923, it again closed its doors, and defendant Bodine was duly appointed receiver. The only cash coming into the hands of the receiver was the sum of $1,752.51.
Plaintiff makes thirty assignments of error, based upon the rejection and adoption of the several findings of the referee, upon the conclusions of law drawn therefrom and upon the entry of judgment in favor of defendant and against plaintiff, which it is not necessary to set forth in this opinion, as they raise but the question of the nature of the deposit and the right of the plaintiff to preference. His contentions are:
(1) That, as plaintiff was a guardian dealing with his ward’s money, which fact was known to the bank, tbe deposit was special and not general.
(2) That, as the deposit was by agreement to draw interest, it constituted a special deposit.
(3)- That the deposit on time, in 1923, under the creditors’ agreement, was a loan to the bank, without security, of trust funds, and without authority of court, of which facts the bank was chargeable with notice, and therefore that the guardian acted illegally with the connivance of the bank, and under such circumstances the bank is an involuntary trustee of the trust funds.
1. The trust relation, which will impress upon a deposit the character of a special deposit, is not the relation existing between the depositor of a trust fund and his cestui que trust, but that existing between the bank and the depositor. There are but two kinds of deposits — those where the bank becomes a trustee for the depositor, by special agreement or through circumstances sufficient to create a trust, and general deposits, where the bank merely becomes a debtor of the depositor, and, in the absence of such contract or circumstances, a deposit will be deemed a general deposit. (Carlson v. Kies, 75 Wash. 171, 47 L. R. A. (n. s.) 317, 134 Pac. 808; Kies v. Wilkinson, 101 Wash. 340, 172 Pac. 351; Bank of Blackwell v. Dean, 9 Okl. 626, 60 Pac. 226; Schofield Mfg. Co. v. Cochran, 119 Ga. 901, 47 S. E. 208.)
The position of guardian is one of trust and not of agency. (12 R. C. L. 1123.) “The relation of a guardian and ward is confidential, and. is subject to the provisions of this code relative to trusts” (sec. 5882, Rev. Codes 1921), and the funds coming into the hands of the guardian are therefore, as between the guardian and the ward, trust funds which the guardian is by law required to “keep safely” (sec. 5881). There is no provision in our Code for the deposit of funds coming into the hands of the guardian, but the guardian is chargeable with the care and maintenance of his ward, and the payment of just debts contracted, out of the ward’s personal estate and the income from real property, if sufficient (secs. 10414 and 10417, Rev. Codes 1921), and for this purpose it is necessary to retain under the control of the guardian a sufficient sum to discharge these obligations as they arise, and common custom and usage, and the exercise of that degree of care required in the handling of trust funds, would dictate that money kept on hand for this purpose should be deposited in a reliable bank, and, where a trustee has exercised due care in the selection of the depository, it cannot be said that he has either violated the law or his trust. Thus, in the Matter of the Estate of William Law, a Minor, 114 Pa. 499, 14 L. R. A. 103, 22 Atl. 831, it is said: “Banks of deposit are a recognized necessity in the commercial world. A trustee who would continuously keep, for any considerable length of time, a large sum of money about his person or in his house, rather than deposit it for safe-keeping in a solvent and reputable bank or trust company, where all the precautions may be exercised for its safety, might justly be regarded as derelict in duty. No one would be accredited with the exercise of common prudence who would keep his own money in this way.”
In a note to the above case (14 L. E. A. 103) it is stated that “some right to deposit trust funds in bank with the accompanying freedom from liability for its loss is universally recognized.” Among the cases cited in support of the above statement is that of Churchill v. Hobson, 1 P. Wins. 243, holding that, if the deposit is made from necessity or in conformity to the common usage of mankind, the trustee will not be liable for the loss upon the failure of the bank. This rule is recognized in the care of City of Livingston v. Wood, 20 Mont. 91, 49 Pac. 437.
From the amount involved here, coupled with the fact that withdrawals were made from time to time, it is apparent that these funds were not such as should have been invested, but were merely necessary funds for the care and maintenance of the ward, and, as to such, the guardian was acting in the performance of his duty in depositing them. (There is no contention that at the time of the deposit the bank was not a solvent and reputable institution, or that knowledge was brought home, in any manner, to the guardian of the impending failure of the bank.
2. In order, however, to escape personal liability, the trustee must not deposit the funds in his own name but in the name of his cestui que trust, or by so distinguishing it on the books of the bank as to indicate that the funds are those of the latter and not his own. (Re Stafford, 11 Barb. (N. Y.) 353; Williams v. Williams, 55 Wis. 300, 42 Am. Rep. 708, 12 N. W. 465, 13 N. W. 274; Naltner v. Dolan, 108 Ind. 500, 58 Am. Rep. 61, 8 N. E. 289; Summers v. Reynolds, 95 N. C. 404.)
3. Where the foregoing conditions are complied with, the mere fact that the funds deposited were trust funds does not constitute a special deposit; the deposit is general, and the relation of debtor and creditor exists between the trustee and the bank (Murphy v. Nett, 51 Mont. 82, L. R. A. 1915E, 797, 149 Pac. 713; Paul v. Draper, 158 Mo. 197, 81 Am. St. Rep. 296, 59 S. W. 77; Ringo v. Fields, 6 Ark. 43; Fletcher v. Sharpe, 108 Ind. 276, 9 N. E. 142; Jones v. Chesebrough, 105 Iowa, 303, 75 N. W. 97; McAfee v. Bland, 11 Ky. Law Rep. 1, 11 S. W. 439; Shaw v. Bauman, 34 Ohio St. 25; Swartout v. Mechanics’ Bank, 5 Denio (N. Y.), 555), and the addition of words showing a fiduciary capacity, while it may render the depository chargeable with notice as to whence the depositor derived the funds, in the absence of some special agreement for the return of the identical money, or other special circumstances, cannot create a special deposit (3 R. C. L. 518; Officer v. Officer, 120 Iowa, 389, 98 Am. St. Rep. 365, 94 N. W. 947; Alston v. State, 92 Ala. 124, 13 L. R. A. 659, 9 South. 732; 2 Michie on Banks & Banking, sec. 153).
4. Nor does the fact that the deposit by agreement draws interest change its nature. (3 B. C. L. 519.) The situation here is similar to that of a deposit of county funds, under our Depository Act' (Laws 1913, Chap. 88), wherein it is provided that the funds shall draw interest but nevertheless be subject to withdrawal at any time. Such deposit is held to be a general and not a special deposit. (State ex rel. School District v. McGraw, 74 Mont. 152, 240 Pac. 812.)
5. The final contention of plaintiff is that, by entering into the “creditors’ agreement” without obtaining an order of court, the guardian violated his trust, and that he did so with the co-operation of the bank, which was chargeable with notice of his.powers in this regard, and therefore an involuntary trust must be declared.
It is true that one to whom property is transferred in violation of a trust holds the same as an involuntary trustee under such trust, unless he purchased it in good faith and for a valuable consideration (sec. 7900, Eev. Codes 1921), and this principle is applied specifically where a deposit of trust funds is wrongfully and unlawfully made, with the active participation of the bank, in Yellowstone County v. First Trust & Savings Bank, 46 Mont. 439, 128 Pac. 596, and Kelly v. Farmers’ State Bank, 54 Mont. 515, 172 Pac. 130. But the facts before us do not warrant the application of this rule.
Had the agreement been that the guardian would deposit a sum of money in his hands as guardian, on time deposit for one year, in aid of the reorganization of the bank, an entirely different question would be presented, but where no actual funds were, at that time, deposited, and the funds in the bank could not have been withdrawn for redeposit, admitting that plaintiff had no authority to enter into the creditors’ agreement without first obtaining an order of court, and that one dealing with such a trustee must take notice of the court’s authority to control such dealings as are within its jurisdiction, and, if the trustee’s acts are not authorized, he must be prepared to immediately place the estate in statu quo. (In re Connolly’s Estate, 73 Mont. 35, 235 Pac. 408), what, under the facts before ns, constitutes “statu quo” of this estate?
Before entering into the creditors’ agreement, the plaintiff was a general creditor of the insolvent bank, entitled to a pro rata share of the assets thereof. It does not appear from the record that those assets differed materially after the second closing of the bank from what they were at the time the bank first closed. Certainly, by his unauthorized act, plaintiff could not acquire, as against other creditors of the bank, any greater advantage than he would have had but for such act. To now advance him to the position of the holder of a preferred claim would be neither equitable nor just.
By its decree declaring plaintiff a general creditor of the bank, entitled to a pro rata share of its assets, the court placed the estate vn statu quo, and, as between the plaintiff and defendants, nothing further could be done.
The judgment is affirmed.
Affirmed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Stark concur. | [
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MR. CHIEF JUSTICE CALLAWAY
delivered the opinion of the court.
Application for a writ of supervisory control.
The facts set forth in relator’s petition will appear sufficiently from the following statement.
For some time prior to March 24, 1924, pursuant to the laws of Mlontana, Christian Yegen and Peter Yegen, copartners, were conducting private banks in Butte, Billings and Gardiner, under the firm name and style of Yegen Bros., Bankers.
Upon the date above mentioned, the attorney general commenced three actions in which he asked for the appointment of a receiver for each of the three banks; an action in each county in which the respective banks were located. In each of the complaints it was alleged that about February 28, 1924, the superintendent of banks had examined into the business affairs and financial condition of the three banks owned and operated by the said copartnership, and from such examination he had ascertained and determined that' the assets of each of the banks were impaired and he so reported to the governor; and that thereupon the governor, about March 6, 1924, directed the attorney general to commence the suits. (Sec. 6103, Rev. Codes 1921.)
Such proceedings were taken in the three actions that each court appointed a receiver for the bank within its particular district. The respective receivers qualified and entered into the discharge of their duties. Pursuant to his delegated powers each took charge of his particular bank and proceeded to collect its assets and ascertain its liabilities; and each took the steps usually employed in winding up the affairs of an insolvent bank. So far as we are informed, at the time this proceeding was commenced each receiver was treating the bank of which he was in charge as an entity, and, apparently, as separate and apart from the other business operations of Christian and Peter Yegen as copartners, if they had any further business. The record does not disclose whether they as copartners, or otherwise, were engaged in any other business than that of conducting the three banks. The relator alleges that on the 24th of March, 1924, it was, and for a long time prior thereto had been, a creditor of Yegen Bros. Bankers, and of Yegen Bros., a copartnership, having on deposit in the Butte bank funds and moneys belonging to it amounting to the sum of $2,543.44. It avers that the assets of the Butte bank ultimately available for distribution among those thereunto entitled will not be to exceed twenty per cent, that the assets of the Billings bank will not pay the creditors in excess of fifty per cent but will pay a final dividend substantially in excess of all the dividends the Butte bank will pay, and that the assets of the Gardiner bank will not pay to exceed seventy-five per cent but will pay a final dividend substantially in excess of all the dividends the Butte bank will pay. That the receiver of the Butte bank has been authorized to declare and pay a partial dividend of five per cent to the creditors of the Butte bank, and the receiver of the Billings bank has been authorized to pay a partial dividend of ten per cent to the creditors of the Billings bank.
It is further alleged that the receivers of the Billings and Gardiner banks will declare additional dividends and pay the same to the creditors of those banks, but no order will be made by either the district court of Yellowstone county or the district court of Park county for the payment of any dividends to the creditors of the Butte bank, to the irreparable injury and damage of relator. He therefore asks this court to issue a writ of supervisory control designed to bring about a marshaling of all of the assets of Yegen Bros., a copartnership, and directing that all the creditors of Yegen Bros., a co-partnership, be paid pro rata from the total assets. Upon the application an order to show cause was issued. The courts and judges made parties defendant answered severally. Each admits the facts alleged in the petition and avers that such facts are insufficient to warrant granting the relief prayed.
At the hearing certain creditors of the Gardiner bank, by reason of having deposited money therein prior to the appointment of the receiver, and the receiver, were permitted to file a complaint in intervention, to which the relator has demurred on the ground that the complaint does not state facts sufficient to warrant the relief sought by the interveners. The interveners, after alleging that they are creditors whose claims'have been allowed and approved, say that if the relief prayed for by the relator be granted, then the assets which the interveners will share in the payment of their claims against the Gardiner bank will be reduced so that they will receive not to exceed fifty per cent instead of seventy-five per cent of their claims. They allege that the receiver, by authority of the court, appears for and on behalf of the creditors of the Gardiner bank. They then allege that the Gardiner bank complied in all respects with the banking laws of the state of Montana, and that pursuant to those laws statements showing the financial condition of the bank were duly published in a newspaper published in Park county, Montana, copies of which publications are attached to the complaint in intervention; that in connection therewith they became creditors of the Gardiner bank by depositing money therein, and all of their deposits were made solely and exclusively in reliance upon the published statements of the financial condition of the bank, which showed only the assets and liabilities of the Gardiner bank and did not include the assets and liabilities of the Billings or Butte banks; that the interveners never would have deposited money in the Gardiner bank if they had known that the assets of that bank were to be charged with the liabilities of the banks at Butte and Billings; that the interveners relied upon and believed the financial statements and by reason thereof became creditors of the Gardiner bank. They allege that as creditors of the Gardiner bank they are entitled to a preference over the creditors of the Butte and Billings banks and over the general creditors of Peter Yegen and Christian Yegen, the individual partners composing the said copartnership, in the payment of debts out of the assets of the Gardiner bank, and allege that it is incumbent upon the relator to first exhaust all the assets and property owned by the Butte bank before attempting to share any of the other assets of the copartnership; that from the date of the opening of the bank at Gardiner until its closing it was operated as a distinct and separate banking institution which had no securities, collaterals or other property belonging to any other bank than the Gardiner bank; that it was operated by separate officers, which was likewise the condition with reference to the Butte and Billings banks.
An inspection of the exhibits referred to show three reports by the Gardiner bank which were published under dates of April 3, September 14 and December 31, 1923. Neither of these statements indicates that the Gardiner bank could not have paid its creditors in full in the ordinary course of business. The one filed December 31 not only indicates a solvent condition but shows that the bank then had not only an unimpaired capital stock but undivided profits.
The foregoing presents the facts sufficiently to demonstrate that the question presented is as stated by relator’s counsel : Are the assets of each bank to. be distributed to the depositors and creditors of such bank, or shall the assets of the three banks be marshaled as a common fund for the joint benefit of all creditors?
At the threshold it is apparent that a solution of the question requires an examination of our state banking law with some reference to its historical background. Banking ‘ was carried on in the placer mining districts of what is now Montana even before the creation of the territory. In the beginning the business was conducted wholly by individuals and copartnerships. While a national bank was chartered as early as 1866 and other charters were granted in the ’60’s and ’70’s, the first statutes designed to regulate the business of banking in the territory were passed in 1887 (Comp. Stats., 5th Div., Chaps. 27, 28), and these of course related only to Montana corporations; but these statutes did not provide for any special supervision over the business.
Section 5 of Article YII of the Constitution authorized the legislative assembly to provide for a state examiner. “His duty shall be to examine the accounts of state treasurers, supreme court clerks, district court clerks and all county treasurers and treasurers of such other public institutions as may be prescribed by law, and shall perform such other duties as the legislative assembly may prescribe.” The legislative assembly obeyed this mandate in 1895. Sections 350 and 497 of the Political Code provided for the appointment of a state examiner and fixed Ms term of office. Section 498 prescribed his duties, among1 which were that he should “visit each year without previous notice each of the banks, banking corporations and savings banks, investment and loan compaMes, incorporated under the laws of this state, or doing business under any law of the state concerning corporations, and to examine into their affairs and ascertain their financial condition ® * * .”
In 1899 the duties of the state examiner with respect to banking corporations were extended; provisions were made as to his duties as well as of those of the governor and attorney general in case an impairment of the capital, or the insolvency, of a bank were found to exist; provision was made also for the appointment of a receiver to wind up the affairs of the corporation, and pending the application for the receiver the governor was empowered to direct the state examiner to take charge of the business of the corporation until the appointment of the receiver. (Substitute for Senate Bill No. 87, sec. 2, 1899 Session Laws, p. 103, wMch became section 4004 of the Revised Codes of 1907.)
In 1905 all banking institutions under the control of the state examiner were required to make, at his call, not less than four reports during each year, not less than two calendar months to intervene between each call, according to the form prescribed by him. The statement was required to contain a full abstract of the general accounts of the bank so as to exhibit in detail under appropriate heads the resources and liabilities of the bank so the amount and kind thereof might be plainly disclosed. It was also required that a statement of the bank’s condition in such condensed form as might be required by the state examiner should be published once a week in a newspaper of general circulation in the place where the bank was located. The state examiner also was given power to call for special reports from any particular bank whenever in his judgment he desired full and complete knowledge of its condition. (1905 Session Laws, Chap. 19, p. 44.)
In 1909 section 4004 of the Revised Codes of 1907 was amplified considerably. (Session Laws 1909, Chap. 141, p. 218.)
Still no attempt was made to control or regulate private banks or bankers. But in 1911 the Twelfth Legislative Assembly determined to place them, so far as was deemed practicable, under the superintendeney of the state examiner, consistently with the policy then employed with respect to banking corporations. For that purpose Chapter 111 of the 1911 Session Laws (pp. 200-204) was enacted. That the state has the right to so regulate the business of banking by whomsoever conducted (national banks excluded) is beyond question. (State v. Richcreek, 167 Ind. 217, 119 Am. St. Rep. 491, 5 L. R. A. (n. s.) 874, 77 N. E. 1085; Blaker v. Hood, 53 Kan. 499, 24 L. R. A. 864, 36 Pac. 1115; Michie on Banks & Banking, sec. 3; Magee on Banks j& Banking, secs. 1, 2.)
By Chapter 111, supra, it was made unlawful for any person or persons “to conduct a commercial banking business, or a banking business of discount and deposit within the state of Montana in the capacity of an individual or of a copartnership, or of an unincorporated association, unless the name under which the bank is known or conducted shall contain the name of such individual, or the name of at least one responsible member of such copartnership or association * * *
Section 2 provided that every individual, copartnership or association intending to conduct a bank or banking business within this state shall, before the receipt of any money whatsoever on deposit, actually own and possess within the state approved property or assets not exempt from execution of not less than $20,000, in cities and towns having a population of 2.000 or less; in cities and towns having a population of over 2.000 and less than 5,000 the sum of $30,000; in cities having a population of 5,000 and less than 10,000 the sum of $50,000; in cities having a population of 10,000 and less than 25,000 the sum of $75,000; and in all cities having a population of 25,000 or over, the sum of $100,000, “which financial condition must appear and be earned on tbe books of any suck bank or banks. Suck requirement sháll extend to each and every private bank conducted by any person, copartnership or association, and no asset or assets shall appear on the books of more than one bank.” This last provision evidently contemplated that the same individual, copartnership or association might conduct more than one bank in Montana.
Section 3 provided for the examination of such bank or banks by the state examiner once a year and oftener when deemed necessary by him, and he was given full power and authority to investigate and examine all the books, papers and effects of any such bank or banking house for the purpose, of ascertaining the financial condition of the same.
Section 5 provided that the cashier of any such bank, when so directed by the state bank examiner, should make a report to the bank examiner at his call. Four reports each year, and special reports, if called for by the state bank examiner, were required. It is clear that section 5 was based upon the language of section 1 of the 1905 Act, supra. Sections 6, 7, 8 and 9 of the Act followed substantially section 4004 of the Revised Codes of 1907, as amended by Chapter 141 of the Laws of 1909.
Section 12 provided if the state examiner, or his deputy, shall fail to perform any duty imposed upon him under the provisions of the Act, or if any person or member of any co-partnership or association, shall violate any of the provisions, he shall bes guilty of a felony.
Chapter 111 has been carried forward without substantial change, sections 1, 2, 3, 5, 9, 12 and 13 now being, respectively, 6095, 6096, 6097, 6099, 6103 and 6106, Revised Codes of 1921. That Chapter 111 was enacted for the purpose of extending the power of the state examiner over private banks, copartnerships and associations in a manner consistent with his supervision over incorporated banking institutions is clear. Further confirmation of this purpose was evinced in 1915, when the legislative assembly enacted the Bank Act. (Chap. 89, Laws 1915, p. 118.) By that Act the state examiner was given the title of superintendent of banks. Section 24 thereof, now 6043, Revised Codes of 1921, provides in part that “no person, firm, company, copartnership or corporation, either domestic or foreign, not subject to the supervision of the superintendent of banks and not required by the provisions of this Act to report to him, and which has not received a certificate to do a banking business from the superintendent of banks,” shall do certain prohibited things, which, without reciting them, particularly relate to the transaction of a banking business.
Section 25, now 6044, Revised Codes of 1921, provides in part that every person, firm, company, copartnership or corporation, domestic or foreign, advertising that he or it is receiving or accepting money or savings and issuing notes or certificates of deposit therefor, or advertising that he or it is transacting the business of a bank, savings bank or trust company, or making use of any office sign at the place where such business is transacted, having thereon any artificial or corporate name or other words indicating that such place or office is the place or office of a bank, savings bank or trust company * * * must have received from the superintendent of banks a certificate to do a banking business. Penalties are provided for a violation of the provisions of the section.
By the provisions of section 50, now 6069, Revised Codes of 1921, every bank except a reserve bank, shall “maintain at all times a reserve of at least ten percentum of its deposit liabilities. # * * Whenever the reserve of any bank shall fall below the amount required herein to be kept, such bank shall not increase its loans or discounts otherwise than by discount-ing or purchasing bills of exchange, payable at sight or on demand, and the superintendent of banks shall notify any bank whose reserve may be below the amount herein required, to make good such reserve, and in case the bank fails, for thirty days thereafter, to make good such reserve, the superintendent of banks may notify the attorney general, and he shall institute proceedings for the appointment of a receiver and to wind up the business of the bank. ’ ’ And section 2 of the Act, now 6015, Revised Codes of 1921, specifically provides that “any person, firm or association now doing a private banking business” shall come under all of the provisions of section 50 (6069), supra.
At this point Chapter 90 of the 1923 Session Laws (page 240) seems of especial importance. It emphasizes the manifest purpose of the law-making body to extend the control of the state over all banking institutions (except federal), incorporated or unincorporated, in harmony with the general supervisory scheme. Subdivision 1 of section 6014a defines “capital” in case of a private bank as “that fund set aside and dedicated for capital purposes.” Subdivision 8 says the term “unincorporated bank” shall comprehend “private banks” and shall include every unincorporated person, firm or association transacting banking business in this state, and the term “board of directors” shall include .the owner or owners of such bank, while subdivision 10 declares'that “a bank is insolvent within the meaning of this Chapter when all of its capital, surplus, and undivided profits are absorbed in losses and the remaining assets will not be sufficient to pay and discharge its contracts, debts and engagements.”
From the foregoing it would seem clear that it was the intention of the legislative assembly in enacting the 1911 statute to treat and regulate a private bank as a business entity. More than that, as a quasi-public institution, and that intention has been emphasized by every succeeding enactment on the subject. In proof of which we observe that a bank operated by an individual, a copartnership, or an association is required to have a certain amount of capital; those conducting such bank are required to publish statements at certain times advising the public of the assets and liabilities of the bank, — the statement required is with reference to the financial condition of the bank, not of its owner or owners. It is the duty of the superintendent of banks to investigate the condition of these banks for the protection of the public; he is required to examine the financial condition of the banks, not of the owners of the banks. The bank is required to show a certain amount of capital and if upon investigation by the superintendent of banks it be found that the capital has become impaired the individual or copartnership or association is required to make good the impairment. If the individual or copartnership or association be conducting two or more banks it was contemplated that such bank should conduct its business without reference to the other; it was provided that the assets of one bank should not be reckoned as the assets of another. It was contemplated that one bank might be solvent and another insolvent, that the capital stock of one bank might be impaired and the other unimpaired. Again, note the significant language of the last pronouncement of the legislature on the subject that a certain fund is set aside and, dedicated for capital purposes. In a nutshell it may be declared that, if the law is to be regarded with a common-sense aspect of its purpose, it was intended clearly that each bank should be considered and treated as a separate entity, regardless of its ownership.
The circuit court of appeals for this circuit came to the same conclusion in In re Yegen, 1 Fed. (2d) 841. That was a case in which, as here, it was alleged that Christian Yegen and Peter Yegen owned and conducted as partners private banks in the cities of Butte, Billings and Gardiner. Depositors in the Butte bank filed a petition in the bankruptcy court for an adjudication of the partnership of Yegen Bros., and each of them individually, on the ground that the appointment of a receiver for the Butte bank by the state court was an act of bankruptcy within the meaning of the Bankruptcy Act. Judge B our quin dismissed the petition, and the depositors appealed. The circuit court of appeals observed that under the Montana banking laws each private bank is deemed and treated as having an identity separate and apart from the owners thereof, and from other banks owned by them. “It is the bank as an institution which the state thus undertakes to supervise and regulate, and not the owner thereof. A bank may be insolvent, as defined by the state law, because of the impairment of its capital and assets, and the owner be solvent. So, too, the same person or association may own two or more banks, and one of them be insolvent and the other solvent, within the meaning of such law.” The court went on to say that the receiver of the Butte bank was appointed because of the insolvency of the bank, not of its owners. “It was, in a sense, the particular business or enterprise in which the alleged bankrupts were engaged which was found to be insolvent, and for which the receiver was appointed, and not the parties owning the business.”
The supreme court of Missouri, in State ex rel. Barker v. Sage, 267 Mo. 493, 184 S. W. 984, after a careful consideration of the statutes of that state, which bear a general similarity to our own, and a constitutional provision almost identical with our own (Const., Art. XY, sec. 18), declared that the private bank in question was an entity and a separate institution from all other business of its owner, an individual. In an action arising upon the same matter (the property of Sage, a bankrupt) in which the case turned on the point whether the federal or state court first obtained jurisdiction over the bankrupt’s property, the circuit court of appeals for the eighth circuit, while saying there was no occasion to differ -from the supreme court of Missouri as to its theory of the banking laws of that state, did differ in some particulars, notably as to whether the legislative Act of Missouri had created a 1‘ new legal entity.” (State of Missouri v. Angle, 236 Fed. 644, 149 C. C. A. 640.)
We need not take the time to discuss the conflict between those decisions. Nothing said in the Angle Case seems to us persuasive against the conclusion to which we have come in the instant case.
But, it is urged, the firm of Yegen Bros. Bankers, consisting of Christian Yegen and Peter Yegen, is a general partnership. It could not be a special partnership, for in this state a special partnership may not be formed for the transaction of a banking business. (Sec. 8025, Rev. Codes 1921.) And every general partner is liable to third persons for all obligations of the partnership, jointly with his copartners. (Sec. 8004, Rev. Codes 1921.) The situation is not free from difficulty. Christian Yegen and Peter Yegen, copartners as Yegen Bros., Bankers, were and are the owners of the banks. Suit by or against the banks before the insolvency thereof must have been brought by or against the owners. Each depositor in the bank is a creditor not only of the bank but of Yegen Bros., a copartnership, and the individuals composing that partnership. But, as we have seen, each bank is an entity, a gwsi-public institution, a banking concern over which the state has extended its superintending authority.
If the assets of either bank be insufficient to pay the creditors, Yegen Bros., copartners, and the Yegens individually are liable until the creditors are paid. But this does not affect the question whether the creditors of the several banks have a preference to the assets of the banks of which they severally were depositors.
Are the depositors of the Gardiner Bank entitled to treat the assets of that bank as impressed with a trust in their favor?
We think, upon the plainest principles of justice, that they are. Regarding the Gardiner bank as an entity, as we must, we observe that the interveners deposited their money in a bank which they were justified in believing was a solvent concern, able to repay on demand. They were justified in believing that the affairs of the bank were being conducted prop erly. The fact that the bank was permitted to run, impliedly bore the stamp of approval of the superintendent of banks. The statements published in accordance with law, not only did not warn the interveners of insecurity but lulled them to believe the bank as sound as the statements indicated. They were not called upon to investigate the condition of the Tegens. Nor was the superintendent of banks. How could the superintendent of banks have investigated the condition of the two Tegens? The law does not give him any such authority. (See discussion in State ex rel. Barker v. Sage, supra.)
In view of our statutes the idea (if it be entertained by anyone) that because an individual owns a banking institution he may do as he pleases with its capital, and other assets, regardless of the rights of the creditors, is as fanciful as it is fallacious. The fund which is “set aside and dedicated for capital purposes” is a trust fund for the benefit of the bank’s creditors. It is like unto the capital stock of the banking corporation. This is in harmony with the settled doctrine of the American courts, which is, that the capital stock, and other property of a private corporation, is deemed a trust fund for the payment of its creditors. (Story’s Equity Jurisprudence, see. 1660; Thompson, Commentaries on the Law of Corporations, sees. 1569, 6492.)
It is a universally recognized principle in equity jurisprudence that the assets of an insolvent corporation, or association, comprise a trust fund for the benefit of its creditors. (Merchants National Bank of Richmond v. National Bank of Lillington, 231 Fed. 556; Bank of Springfield v. Williams (S. D.), 205 N. W. 221; State ex rel. Barker v. Sage, supra; Pomeroy’s Equity Jurisprudence, sec. 1046.)
It follows that the assets of the Gardiner bank are impressed with a trust in favor of the creditors of that bank, and likewise the assets of the Billings and Butte banks are impressed with a trust in favor of their respective creditors. Such being the case the application of the relator seeking to have the assets of the three banks marshaled to the end that it may share in the total assets is without merit and the relief sought must be denied.
The order to show cause is discharged and the proceeding dismissed.
Dismissed.
Associate Justices Holloway, Galen, Stark and Matthews concur. | [
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PER CURIAM.
Pursuant to stipulation of counsel, the appeal herein is dismissed. | [
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MR. JUSTICE’ HOLLOWAY
delivered the opinion of the court.
This is an apeal by the state from a judgment for the defendant on a demurrer to an information, the charging part of which reads as follows:
“The said R. P. Flagg, on the 15th day of July, A. D. 1925, at the county of Flathead, in the state of Montana, with force and arms, did willfully and unlawfully and without first having obtained a certificate or license from the Railroad Commission of Montana, transport for compensation, by means of a motor vehicle, one Ernest H. Richards, on the public highways of Flathead county, Montana, between the corporate limits of the city of Ealispell and the post office of Crestón within said county and state.”
The prosecution was instituted under Chapter 154, Laws of 1923. The title of the Act follows: “An Act providing* for the supervision and regulation of the transportation of persons and property for compensation over any public highway in the state of Montana by motor vehicles, motor trucks, motor busses, bus trailer, semi-trailers and other motor vehicles; defining what constitutes transportation for compensation, defining transportation companies, and providing for the supervision and regulation thereof by the Railroad Commission of Montana; providing for the enforcement of this Act and the punishment for violation thereof and declaring an emergency.”
Section 1 defines certain terms employed in the Act, irneluding the terms “motor vehicles” and “transportation company.”
Section 2 declares that no corporation or person shall operate any motor vehicle for the transportation of persons or property for compensation on any public highway in this state except in accordance with this Act.
Section 3 confers upon the Railroad Commission authority “to supervise every transportation company.”
Section 4 provides that no transportation company shall operate any motor vehicle for the purpose of transporting persons or property for compensation on any public highway of this state without first having obtained from the Railroad Commission a certificate or license to do so.
Section 5 confers upon the commission the authority to revoke a certificate or license once issued.
Section 6 requires of every transportation company a bond, as a condition precedent to operating under a certificate or license, and section 8 authorizes the commission to exact a license fee not exceeding $10 per vehicle.
As defined in section 1, the term “transportation company” includes a corporation, joint-stock company, firm, copartnership, an association, or individual, owning, controlling, operating or managing any motor vehicle used in the business of transporting persons or property for hire over a public high way of this state, but not operating exclusively within the limits of an incorporated city or town.
The present appeal presents but one question: Does this statute apply to the owner of an automobile who is not engaged in the business of transporting persons or property for hire, but who, on a single, isolated occasion, does transport a person for hire over a public highway of the state, by means of his motor vehicle? 3
But for the language employed in section 2, it would be perfectly apparent from the title and body of the Act that the purpose in enacting the statute was to regulate the business of transportation companies only, that is, such corporations, associations and individuals as make a business of using motor vehicles on the public highway for direct, pecuniary gain. It is not charged that the defendant was engaged in such business, or that he ever transported a person by motor vehicle for hire, except upon the one occasion mentioned in the information, so that, if he can be held at all, it is in virtue of the provisions of section 2 of the statute, which, upon the first reading, appear sufficiently comprehensive to include such a single, isolated act as is described in the information, but that this was not the intention of lawmakers is reasonably certain.
Subdivision (e) of section 1 declares that the Railroad Commission may exempt from the operations of the statute the transportation of freight and passengers by motor vehicle in rural communities, when not done on a commercial basis.
In State v. Johnson, ante, p. 241, 243 Pac. 1073, this court held that the word “may” above is to be held to mean “must”; in other words, that transportation of persons or property by motor vehicle in rural communities, when not done on a commercial basis, is not subject to the provisions of the statute, and that the phrase “on a commercial basis” differentiates the carrier who is engaged in the business of carriage for hire from the person who in a rural community occasionally carries persons or property either for or without compensation.
If the term “operate,” used in section 2 of the statute, be given a narrow meaning, then it is impossible to reconcile the provisions of section 2 with the exemption provision in subdivision (e) of section 1; but we think the legislature employed the term “operate” as the equivalent of the expression “conduct as a business.” This construction harmonizes the language of section 2 with the other provisions of the statute.
The information does not do more than charge that on a single isolated occasion the defendant transported a person for hire, over the public highway in a rural community, by means of a motor vehicle, and under the decision in State v. Johnson, above, that act is not comprehended by the statute, and does not constitute a public offense.
The judgment is affirmed.
Affirmed.
Mr. Chief Justice Callaway and Associate Justices Galen, Stark and Matthews concur. | [
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MR. CHIEF JUSTICE CALLAWAY
delivered the opinion of the court.
This is an appeal from a judgment against plaintiff after its motion for a new trial was denied.
The waters of Dempsey creek in Powell county frequently have been the subject of litigation. It is conceded to be an adjudicated stream within the meaning of the statute. (Sec. 7119, Rev. Codes 1921.)
The principal stream, or south fork, rises near the foot of Mount Powell and thence takes its course for several miles through a mountainous countiy. Here and there its channel widens out and, extending over a considerable area, forms lakes. So came into being the particular subject of this lawsuit, a body of water called by some Carothers Lake, by others Dempsey Lake No. 1. This lake is in the course of and is part of the stream comprising the south fork of Dempsey creek; it is á mere enlargement of the channel. Upon plaintiff’s lands this stream joins another called the north fork.
In prior water suits it has been decreed that there are twenty-two separate rights to the use of the waters of Demp7 sey creek. Plaintiff’s right is No. 20, consisting of 100 inches of water, being diverted from the north fork. Right No. 3, 100 inches, and a portion of right No. 11, probably 40 inches, the property of defendants, also divert from the north fork. The pleadings do not challenge the right of . any of these parties to divert the three rights above mentioned to the extent thereof from the north fork. The other rights, aggregating about 2,500 inches, with the exception of one from the south fork, receive their waters from the stream below the confluence of the north and south forks. When the water is low in Dempsey creek there is barely enough to supply the first five rights.
Desiring to secure an adequate supply for plaintiff’s lands which lie mainly upon the left bank of the north fork, and which can be irrigated only by water taken from that fork, Carothers, a predecessor of the plaintiff, conceived the idea of impounding flood and other waters which otherwise would go to waste, in the lake above mentioned; apparently it was his purpose originally to convey the waters so impounded to his lands by a ditch. This is indicated by a notice of appropriation which he filed October 1, 1917, and which is the main basis of plaintiff’s cause of action. He gave notice that on the 1st day of October, 1917, he did appropriate and claim 250 cubic feet of the waters of Carothers Lake and “did, on the above named date, mark the point of intended diversion by posting thereat a copy of this notice in a conspicuous place. The said waters are claimed for irrigation and other useful and beneficial purposes and the place of intended use is on the land of the appropriator, commonly known as the Bell farm on Dempsey creek. Said water is to be diverted and conveyed to said place by means of a dam and a ditch, said ditch to be two feet wide on the bottom, four feet wide on top and three feet deep. That the stream from which the diversion is to be made is more particularly described as follows, to-wit: all of that water that can be reservoired in the said lake by a dam approximately seven feet high and nine feet wide,’’ following which Is a general description of the location of the lake and the point of diversion.
In the complaint it is alleged that on or about the 1st day of October, 1917, a predecessor in interest of plaintiff appropriated of the waters of Carothers Lake an amount equivalent to a continuous flow of 250 inches during the entire irrigating season of each year for the purpose of storing, reservoiring, conserving and impounding certain flood waters arising from melting snows, spring freshets and heavy rains, for the purpose of using such waters upon the lands then owned by plaintiff’s predecessor in interest, and now owned by. the plaintiff. It is then alleged that by means of certain dams and headgates, works and improvements, plaintiff and its predecessor in interest so prepared the lake that there could be stored therein water to the average depth of six feet over the entire surface of the lake above the natural level of the waters thereof. And later it is alleged, inferentially at least, that after the completion of the lake as a reservoir in the fall of 1917, the plaintiff and its predecessors in interest conserved and impounded therein such flood and surplus waters to the full extent of the storage capacity of the lake. Later on it is alleged that after such waters were so impounded and conserved, during each year from and after the fall of the year 1917, the waters have been used for irrigation of certain lands belonging to the plaintiff and its predecessors in interest. In the complaint the plaintiff disclaimed any right to the use of the normal flow of Dempsey creek as against prior appropriates or users of the waters of the stream when the normal flow of the creek is needed by such appropriates and users; averred that the plaintiff has used and now uses only such waters as have been so impounded and conserved, except during such times of the year as the normal flow of the stream is not needed by prior appropriators or others. The foregoing allegations, except as to the plaintiff’s disclaimer mentioned above, were put in issue by answer.
The court found against the plaintiff upon all its essential allegations and found specifically that “neither the plaintiff nor its predecessors in interest ever, at any time, appropriated the waters of Carothers Lake, sometimes called Dempsey Lake No. 1, for the purpose of storing, reservoiring, or conserving or impounding”' any water; that neither the plaintiff nor its predecessors in interest by means of dams, headgates or works or improvements, or otherwise, prepared the lake so that there should be stored therein any water; that neither the plaintiff nor its predecessors in interest ever used upon its lands, or for any useful or beneficial purpose, any of the waters of Carothers Lake, impounded or otherwise.
It is admitted that the plaintiff, or its predecessors in interest, did not attempt to comply with the statutes which were in force on October 1, 1917, respecting the appropriation of water from adjudicated streams, nor of the provisions of section 7119 and subsequent sections of the Revised Codes of 1921.
Neither the plaintiff nor its predecessors in interest ever dug a ditch leading from the lake or the south fork of Dempsey creek to plaintiff’s lands. By reason of a mountainous ridge between the north and south forks it is doubtful whether a ditch can be constructed within the limits of reasonable expenditure which will convey waters impounded in the lake to the head of plaintiff’s north fork ditch. Plaintiff’s predecessors seem to have given up that part of the project. Instead they adopted a different course. They assumed the right to take water sufficient for their needs from the north fork and to turn into the south fork from the lake an equivalent amount of water, plus an amount added to make up for seepage and evaporation, upon the theory that by taking the waters of the north fork no one could be injured except those diverting water from Dempsey creek below the confluence of the forks. If the foregoing premises were correct and the plaintiff had rightfully impounded water in the lake there could not be any valid objection to plaintiff’s course. Indeed, a practice of that character, under restrictions insuring that the rights of others should be fully protected might well be encouraged. It is to the interest of the public that water be conserved for use rather than be permitted to . go to waste, to the end that the arid lands of the state may be put under irrigation and thus be made productive.
But the premise is found wanting in substance. The court’s finding that neither the plaintiff nor its predecessors in interest made an appropriation must be sustained. On this feature of the case the facts are that persons whom the defendants claim were their predecessors in interest built a dam at the lower end of the lake in 1901 for the purpose of impounding the flood waters of the stream. Whether the defendants can trace title to the dam from its builders is not now important. There is evidence showing that the defendants, or some of them, at various times from 1903 to 1921, repaired the dam and the headgate therein to some extent for the purpose of retaining water in the lake at its natural level during the irrigating season, thus “augmenting the supply of water in said Dempsey creek for the benefit of all the decreed rights using water out of said creek”; this for the purpose of keeping “as much water up at the headwaters of Dempsey creek as possible and that the Dempsey creek users might have the benefit of all the additional seepage, surplus and drainage water made possible by such use of said lake,” in the language of the trial court. This is important to the instant question only to show that a dam existed there when Carothers posted his notice.
Assuming now that Carothers had the right to appropriate the flood and surplus waters of the south fork of Dempsey creek by the method he chose (and here it is presumed that his notice of appropriation was filed pursuant to the provisions of section 4847, R. C. 1907) and that it was not incumbent upon him to follow the requirements of Chapter 185 of the Laws enacted by the Tenth Legislative Assembly (Session Laws of 1907, p. 489, secs. 4871 to 4880, Rev. Codes 1907), “An Act to regulate the appropriation of water in streams in which- the rights therein have been adjudicated,” it is clear that he did not prosecute the construction of the work with reasonable diligence to completion, as required by section 4848, Rev. Codes 1907. Practically the same requirement is made in section 4871, R. C. 1907, wherein it is provided that after posting his notice “the work in the construction and completion of the means of diverting and converting the water to the place of use shall be prosecuted with reasonable diligence, otherwise no rights shall be acquired by such appropriator. ” Carothers during the year 1918 did no more than to repair to a small extent the dam then existing. No work of any substantial character was done upon the dam until September, 1921. Prior to that not by any stretch of the facts can it be said that he carried on the work of constructing a dam; and certainly he did not do anything with respect to constructing the ditch mentioned in his notice of appropriation. Whether the work done in September, 1921, may be considered as amounting to the construction of a dam need not be determined.
The fact that the lake, beginning with some time in 1905, was within a National Forest and that Carothers had obtained a permit from the forest supervisor, “subject to all valid claims,” to impound water in this lake, and that it was provided in the permit that construction work should begin within twelve months and be completed within two years from the date of the permit, even though the time was extended by the supervisor, does not alter the instant situation. As a matter of fact no improvements had been made on October 13, 1920, and the forest supervisor gave Carothers until the following spring to commence his improvements. On August 16, 1921, the supervisor wrote Carothers that a report received in his office showed that as yet no work had been done on the project, and gave him until September 30, 1921, to complete his improvements. Whether the method provided by Chapter 185 of the Laws of 1907 for the appropriation of water from an adjudicated stream was intended to be exclusive is not necessary to this decision, and the question is reserved. It is clear that Carothers had not made an appropriation of any of the waters of the south fork of Dempsey creek when the Seventeenth Legislative Assembly enacted Chapter 228, approved March 15, 1921 (Session Laws of 1921, p. 487, secs. 7119 to 7127, Rev. Codes 1921) which will be referred to later.
Carothers then did not have any valid subsisting right to impound water in the lake. He did not possess a completed appropriation. We may go further and say he then did not have even an inchoate appropriation. He had set out to make an appropriation based upon the notice filed by him October 1, 1917, but had not complied with the provisions of the statute, and upon the facts his notice at that time, 1921, was as ineffectual as if it had never been. As he did not proceed with his construction with reasonable diligence he lost the right of relation back. That right being lost, if he had then completed his work and made a beneficial use of the water his right would be held to bear the date of the completed appropriation. (Bailey v. Tintinger, 45 Mont. 154, 122 Pac. 575; Allen v. Petrich, 69 Mont. 373, 222 Pac. 451.)
Section 4 of the 1921 Act (7119, R. C. 1921) provides that any person thereafter desiring to appropriate the waters of a river or stream, ravine, coulee, spring, lake or other natural source of supply, concerning which there has been an adjudication of rights between appropriators or claimants as contemplated in section 7128, R. C. 1921, shall pursue a course which the statute designates. Carothers had not done anything to keep alive the appropriation which he attempted to initiate on October 1, 1917, and he had not acquired any rights thereunder. As the appropriation he was attempting to make had to do with the waters of an adjudicated stream, after the passage of the 1921 law it was incumbent upon him" to comply with its provisions if he would acquire a right to the waters of Dempsey creek. The statutes of 1907 and 1921 relating to the appropriation of water from adjudicated streams were designed to compel those who sought to appropriate water from such streams to become bound, as are parties and privies thereto, by all of the provisions of the decree or decrees by which the rights of the parties thereto had been determined. Experience had shown that after the rights of all of the parties taking water from a stream had been adjudicated, a subsequent appropriator would appear upon the scene, tap the stream and ruthlessly take the water, disregarding the decreed rights and flaunting the orders of tho commissioner appointed by the court to distribute the water according to the terms of the decree. The only remedy the prior appropriators had was to commence a suit against the new appropriator, tbe result being that all of tbe rights of the stream had again to be adjudicated; and after that decree was entered if another subsequent appropriator took the water the same process had to be gone over again. Unquestionably the legislature of 1921 intended that an appropriation of the waters of an adjudicated stream should not be made thereafter without a substantial compliance with the requirements of the statute then enacted. The method prescribed must be held to be exclusive.
One ground for the court’s decision against the right claimed by plaintiff was that there had not been a compliance with the 1921 law. The court found that there had not been a completed appropriation. These rulings were correct. The court found also that neither the plaintiff nor its predecessors in interest had made a beneficial use of the water which actually was impounded. There is substantial evidence in the record to sustain this finding and we shall not disturb it. (Warren v. Senecal, 71 Mont. 210, 228 Pac. 71.)
The court held that the plaintiff should not prevail for another reason. It was contended that the plaintiff did not injure anyone by taking the waters of the north fork on the ground that the only water users who could be injured were those diverting water from the main stream below the forks. The court, however, found as a fact and there is ample evidence to support the finding, that when plaintiff’s predecessors took water from the north fork they frequently took away from the owners of rights 3 and 11 water which the latter were entitled to use through those ditches, and it is conceded that none of the waters of the lake ever were supplied to the north fork. The court therefore decided that plaintiff’s conduct in taking the waters of the north fork was injurious to prior appropriators who were entitled to the use of the .same.
In view of what has been said we do not find it necessary to discuss any of the other propositions advanced by plaintiff’s counsel. We deem them without merit upon the record.
Rehearing denied March 12, 1926.
The judgment is affirmed.
Affirmed.
'Associate Justices Holloway, Galen, Stark and Matthews concur. | [
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] |
JUSTICE WEBER
delivered the Opinion of the Court.
This is an appeal and cross-appeal from an order of the District Court of the Eleventh Judicial District, Flathead County. Plaintiff appeals the District Court’s summary judgment order dismissing claims of negligent misrepresentation, fraud, and intentional infliction of emotional distress. Defendants’ cross-appeal challenges the District Court’s failure to dismiss a claim for breach of fiduciary duty and denial of their request to include the defense of charitable immunity. Both plaintiff and defendants appeal the District Court’s ruling on motions in limine. We affirm in part and reverse in part.
The issues for our review are:
1. Did the District Court err in granting summary judgment in favor of the defendants on the claims of fraud and misrepresentation?
2. Did the District Court err in granting summary judgment in favor of the defendants on the claim of intentional infliction of emotional distress?
3. Did the District Court err in failing to dismiss the breach of fiduciary duty claim?
4. Did the District Court err in its rulings on motions in limine relative to exclusion of evidence based on the doctrine of separation of church and state?
5. Did the District court err when it denied the defendants’ motion in limine to exclude physical and mental pain and suffering as elements of damage relative to the remaining counts alleged by Davis?
6. Did the District Court err in refusing to allow defendants to amend their answer to include the defense of charitable immunity?
On July 20, 1987, Jonnie Musgrove Davis (Davis) sued the defendants, herein collectively referred to as the Church, to recover for injuries suffered as a result of a fall on February 25, 1985, on the premises of the Kalispell Stake Center of the Church of Jesus Christ of Latter Day Saints. In addition to the claims of negligent misrepresentation, fraud and intentional infliction of emotional distress which are covered by this appeal, Davis also filed negligence claims.
At the request of the Church, the District Court bifurcated the negligence claims from the claims involved in this action. Evidence in the negligence trial showed that Davis had undergone six separate surgeries to her cervical spine and one surgery to repair her vocal cord as a result of the injuries sustained in the February 25,1985 fall. She received a judgment in excess of $400,000 which was affirmed by this Court on appeal. See Davis v. Church of Jesus Christ of Latter Day Saints (1990), 244 Mont. 61, 796 P.2d 181.
The facts encompassed by this appeal relate to the time period from Davis’ accident in 1985 until 1990, with Davis contending that the Church improperly attempted to dissuade her from pursuing her claims against it, committed fraud and misrepresentation, threatened Davis with excommunication, refused to give her Temple Recommend (an awarded status indicating a member is in good standing in the Church) and denied her Church callings.
Initially, the Church paid Davis’ medical bills. However, on November 6,1985, the Church gave Davis its last payment, after she signed a document stating that she was expecting to have no more hospitalization or major doctor bills. Davis testified that she was in severe pain at the time this document was presented to her as a condition for payment of her bills, that she was not in complete control of her faculties, and that she was compelled to sign under duress.
Davis further testified that on two separate occasions during the summer of 1986, the Church contacted Davis to sign documents releasing it from any further liability for her injuries. Davis testified that the Church promised to pay her then-existing medical bills in return for signing the documents. She testified that she refused to sign the documents because she had ongoing physical problems. The Church then ceased payment of medical expenses.
In September 1986, after her unsuccessful attempts to obtain payment of her mounting medical bills, Davis retained legal counsel. The parties then attempted to reach an agreement for payment of medical expenses. In February 1987, David McKonkie, attorney for the Church, sent a letter on behalf of the Church to Davis’ attorney, indicating that the Church was willing to pay medical bills immediately if Davis agreed to travel to Salt Lake City, Utah for a medical examination. Davis’ physician advised against travel at that time; however, in May 1987, Davis agreed to this proposal and requested payment of the bills as promised in McKonkie’s letter.
Davis then traveled to Salt Lake City on May 19, 1987 for examinations by Dr. Louis Schricker, a neurosurgeon hired by the Church, and another neurosurgeon contacted by her own physician. The Church’s physician concluded in his medical report that 75-80% of Davis’ condition was related to the accident. Despite further requests by Davis, the Church did not pay her medical bills at that point. The Church claims it did not pay at that time because Davis wanted it to pay future medical bills as well and a settlement had not been reached between the parties.
Davis testified that Church officials pressured her to tithe part of her expected settlement to the Church. Davis further testified that her Temple Recommend was denied because she would not agree to tithe 10% of her judgment and because she refused to dismiss her lawsuit against the Church. She further testified she was denied a Church calling for the same reasons. In her deposition she stated that one of the Church bishops told her she was “unworthy and dishonest,” that male church members subjected her to unannounced, private meetings at unusual hours of the day to discuss the status of her lawsuit, and that Church officials denied her much-needed church welfare by instructing the Relief Society to discontinue delivery of meals.
After these occurrences, Davis amended her complaint in October 1989, raising the issues of intentional and negligent infliction of emotional distress. The District Court dismissed these claims in its order ruling on defendants’ motion for summary judgment. It also ruled that evidence relating to denial of Temple Recommend and Church callings could be excluded, but that evidence relating to threats of excommunication was admissible.
Davis testified that at the time of her injury she was single with limited financial means. She further testified that since becoming a member of the Church in 1975, she had been active in church activities and had tithed or contributed approximately $75,000 to the Church during the period from 1975 through 1985. She also testified that during the school year preceding her accident, she taught two one-hour seminary classes to church youth each weekday morning, with one class at 6:00 a.m. and the other at 7:00 a.m. She testified that she had previously taught one seminary class on weekday mornings at 7:00 a.m. for the preceding five years. Davis also testified that according to the tenets of the Mormon Church, the Church would take care of her if she gave of her time. Davis testified that since her injury in 1985 the continuing nature of her injury has prevented her from returning to normal employment.
Standard of Review
Summary judgment is proper if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter oflaw. Rule 56(c), M.R.Civ.R The moving party is entitled to judgment on the law applicable to established facts. Musselman v. Mountain West Farm Bureau Mut. Ins. Co. (1991), 251 Mont. 262, 824 P.2d 271. This Court’s standard of review for summary judgment decisions is the same as that used by the trial court. Higham v. City of Red Lodge (1991), 247 Mont. 400, 807 P.2d 195. When reviewing conclusions of law, we determine whether the district court’s interpretation of the law is correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 803 P.2d 601.
I.
Did the District Court err in granting summary judgment in favor of the Church on the claims of fraud and misrepresentation?
Davis’ claims of fraud and misrepresentation are based upon the February 1987 letter from David McKonkie on behalf of the Church, in which the Church promised to pay medical bills if Davis agreed to travel to Salt Lake City, Utah for an examination by the Church’s doctor. Davis contends that the Church fraudulently induced her to travel to Salt Lake City for a medical examination by the Church’s physician by promising to pay her medical bills imme diately. The Church did not pay Davis’ medical bills after her examination in Salt Lake City.
A prima facie case of actual fraud must include proof of the following nine elements: a representation; its falsity; its materiality; the speaker’s knowledge of its falsity or ignorance of its truth; the speaker’s intent that it should be acted upon by the person and in the manner reasonably contemplated; the hearer’s ignorance of its falsity; the hearer’s reliance upon its truth; the right of the hearer to rely upon it; and the hearer’s consequent and proximate injury or damage. Lee v. Armstrong (1990), 244 Mont. 289, 293, 798 P.2d 84, 87. A claim of misrepresentation or constructive fraud requires similar proof with the exception that plaintiff need not prove intent to deceive or dishonesty of purpose. Lee, 798 P.2d at 88.
In order to prove either actual fraud or misrepresentation, Davis was required to prove there was a representation. The Church contends there was no “representation of an existing fact” — that the promise to pay was a promise to do something in the future which did not meet the requirements of a representation for this purpose. We agree. The District Court pointed out that McKonkie’s letter constituted a promise to pay in the future. Neither the making of a promise to pay money in the future nor the failure to pay constitutes actionable fraud. See Roberts v. Mission Valley Concrete Indus., Inc. (1986), 222 Mont. 268, 721 P.2d 355. We conclude that the first essential element for the proof of either fraud or misrepresentation, the making of a representation, was not present here.
We hold the District Court properly granted summary judgment in favor of the Church on the issues of fraud and misrepresentation.
II.
Did the District Court err in granting summary judgment in favor of the Church on the claim of intentional infliction of emotional distress?
The District Court entered summary judgment for the Church on Davis’ claim for intentional infliction of emotional distress. On appeal Davis urges that the facts of this case require recognition by this Court of intentional infliction of emotional distress as a cause of action. The controlling Montana case is Frigon v. Morrison-Maierle, Inc. (1988), 233 Mont. 113, 760 P.2d 57.
In Frigon, the appellant contended that she had set forth facts sufficient to establish a cause of action for intentional infliction of emotional distress. Frigon carefully distinguished between claims of negligent infliction of emotional distress and intentional infliction of emotional distress. Frigon, 760 P.2d at 63. It is essential that we maintain that distinction. We are not discussing here any of the elements of negligent infliction of emotional distress. The appeal is limited to a claimed intentional infliction of emotional distress. In discussing intentional infliction of emotional distress, we stated in Frigon:
Emotional distress under Montana law has been and remains primarily an element of damages rather than a distinct cause of action.
Frigon, 760 P.2d at 63. The appellant in Frigon sought to have this Court adopt Restatement (Second) of Torts § 46 (1965). The Court concluded that the appellant did not present a case that merited recognition by this Court of intentional infliction of emotional distress. Frigon, 760 P.2d at 63. Frigon then referred to comment (d) of the Restatement with regard to the conduct necessary to impose liability as a separate cause of action, stating:
... Comment “d” to Section 46 of the Restatement explains the nature of the conduct necessary to impose liability:
“Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.”
Frigon, 760 P.2d at 63-64 (citing Restatement (Second) of Torts, § 46, comment d (1965)).
Frigon pointed out that the conduct of the defendant was not of a type that goes beyond all possible bounds of decency, and concluded there was insufficient evidence to support a claim for intentional infliction of emotional distress as a separate cause of action. Frigon, 760 P.2d at 64.
Davis contends that the conduct by the Church which reached the standard required for intentional infliction of emotional distress includes the following: denial of Temple Recommend, denial of a Church calling, pressure to sign releases, threats of excommunication, statements that Davis was “unworthy and dishonest,” and efforts attempting to dissuade Davis from pressing her claim through the courts. The District Court concluded that the Church’s actions clearly did not satisfy the standard for outrageous conduct required in a tort action for the intentional infliction of emotional distress. As hereafter held in this opinion, the evidence of Temple Recommend, Church calling and excommunication is not admissible as evidence in this case. We have carefully considered the remaining evidence presented in support and opposition to summary judgment. Applying the standard enunciated in Frigon, we conclude that the conduct on the part of the Church does not constitute conduct which goes beyond all possible bounds of decency, nor can it be regarded as so atrocious as to be intolerable in a civilized community. The foregoing conclusions are consistent with the holdings in decisions from other states which have addressed the level of conduct which is found to be sufficiently outrageous for actionable intentional infliction of emotional distress. See, e.g. Madsen v. Erwin (Mass. 1985), 481 N.E.2d 1160; and Meroni v. Holy Spirit Ass’n for the Unification of World Christianity (N.Y. Sup. Ct. 1986), 506 N.Y.S.2d 174.
We conclude that the District Court correctly determined that the conduct exhibited by the Church here was not sufficiently outrageous to support a separate tort claim for intentional infliction of emotional distress.
We hold the District Court properly granted summary judgment in favor of the Church on the claim of intentional infliction of emotional distress.
III.
Did the District Court err when it failed to dismiss the breach of fiduciary duty claim?
The Church contends that the District Court erred in not entering summary judgment for the Church on Davis’ claim that the Church breached its fiduciary duty to her. The Church contends that the relationship was adversarial rather than fiduciary because it had no duty to act primarily for Davis’ benefit in the pursuit of her claim for injuries and damages against the Church. We note that Davis was not represented by an attorney until approximately nineteen months after her injury — from February 25, 1985 to September 1986.
While Davis acknowledges that the relationship between a member and her church may not create a fiduciary duty in all cases, she contends that there are facts demonstrating the existence of a fiduciary relationship, including the major role the Church plays in all aspects of its members lives, Davis’ tithing of $75,000 to the Church over a ten year span, and Davis’ other contributions to the Church as a devoted and faithful member. She further contends that the deposition evidence establishes that the principles and practices of the Mormon Church are unique in that it provides a member with an extended family and a vast network of support for all problems, including emotional and financial difficulties, and as such, the Church is aware of all aspects of a member’s personal and financial life. Davis contends that her relationship with the Church constituted a fiduciary relationship because it involved such a strong degree of trust and confidence.
It is true that when a fiduciary duty exists, the party in the stronger position owes an obligation by virtue of the trust relationship to act in the best interests of the beneficiary. See Deist v. Wachholz (1984), 208 Mont. 207, 678 P.2d 188. We also point out that the interaction between a church and its members may give rise to a confidential relationship which is subject to scrutiny by the courts for undue influence. See 25 Am.Jur.2d Duress and Undue Influence § 44 (1966). However, we do not find it necessary to construe the legal principles involved in the fiduciary relationship issue.
Here the District Court first noted that a fiduciary duty existed from the Church to Davis as a matter of law. We do not affirm that determination. The existence of a fiduciary duty depends upon satisfactory proof of a special relationship. Deist, 678 P.2d at 193. We conclude that such a determination is not appropriate on summary judgment.
At the same time, the District Court concluded that the questions of whether a fiduciary relationship existed, whether Davis’ reliance on the relationship was reasonable, and whether her reliance on the relationship could no longer be justified at a particular point in time, all constitute questions of fact which cannot be resolved by summary judgment. We affirm the conclusion of the District Court that these constitute issues of material fact which preclude summary judgment.
We hold that the District Court properly refused to enter summary judgment for the Church on the claim of breach of fiduciary relationship.
IV.
Did the District Court err in its rulings on motions in limine relative to exclusion of evidence based on the doctrine of separation of church and state?
Davis contends that the Church used its position of trust and confidence to manipulate and mislead her and to deter her from asserting her legal rights. She claims the Church was motivated by a desire to benefit the Church financially by inducing her to settle her claims and sign a release.
The First Amendment to the United States Constitution and Article II, Section 5, of the Montana Constitution preserve freedom of religion under the establishment clause and the free exercise clause. The Church contends that the conduct described by Davis is privileged by the free exercise of religion guarantees. Davis in turn contends that her claims relate solely to violations of secular laws which do not involve inquiry into protected First Amendment areas, and as a result, the Church’s conduct is not protected from tort liability.
Although freedom of religious belief is absolute, freedom of religious conduct may be subject to regulation for the protection of society. Cantwell v. Connecticut (1940), 310 U.S. 296, 303-04, 60 S.Ct. 900, 903, 84 L.Ed. 1213, 1218. Freedom of religious beliefs is not an issue here. The primary questions here are whether denial of Davis’ Temple Recommend, denial of her Church callings, and threats of excommunication are examples of religious conduct which may be subject to secular regulation. On occasion a constitutionally compelling governmental interest may outweigh a free exercise of religion defense and subject the religious conduct to judicial scrutiny. See, e.g., Molko v. Holy Spirit Ass’n for the Unification of World Christianity (Cal. 1988), 762 P.2d 46 (the state had a legitimate secular goal in preventing fraud, which was properly advanced by the court’s decision and did not discriminate between religious or other types of organizations in its application).
In Baumgartner v. First Church of Christ, Scientist (Ill. App. 1986), 490 N.E.2d 1309, cert. denied, 479 U.S. 915, 107 S.Ct. 317, 93 L.Ed.2d 290, the Illinois court considered evidence that a nurse had deviated from the standard of care of an ordinary Christian Science practitioner. The Illinois court concluded that a searching inquiry into Christian Science beliefs and the validity of those beliefs was barred by the First Amendment because the only authority to determine whether there was a deviation from “true” Christian Science practice was the Church itself. Baumgartner, 490 N.E.2d at 1323. The court concluded that the First Amendment barred the judiciary from considering whether certain religious conduct conformed to the standards of a particular religious group. Baumgartner, 490 N.E.2d at 1323. We agree with the Baumgartner court, which held that inquiries into the standard of care of a Christian Science practitioner and whether those standards were met involved an unpermitted intrusion because the court would be required to investigate and evaluate religious tenets and doctrines.
Thus, our initial inquiry requires that we determine whether this Court is required to investigate and evaluate the beliefs of the Mormon Church. Davis contends that the Church conduct included a concerted effort among the Church membership and hierarchy to pressure her into settling her claim to the Church’s benefit. Davis emphasizes the interest of the state in allowing litigation of tort claims and prohibiting interference with such litigation, particularly where that interest is not otherwise protected.
On this issue the District Court granted the Church’s motion in limine to exclude evidence relating to Temple Recommend and Church callings. The District Court refused to grant the motion as to threats of excommunication because that conduct occurred prior to Davis’ retention of legal counsel.
Our primary question is whether denial or granting of Temple Recommend and Church callings can properly be regarded as conduct relating to matters of Church discipline or teachings rooted in religious belief. We conclude that the answer to this inquiry is clear — it is impossible to evaluate the matter of Temple Recommend or Church callings for Davis without an inquiry into and evaluation of the Mormon religion.
Davis’ deposition testimony established that Temple Recommend was awarded to members in good standing with the Mormon Church, and the presence or absence of Temple Recommend had a direct bearing on the particular “level of glory in Heaven” which Davis would be able to attain. Such a determination in this case is directly comparable to the determination required in Baumgartner. In order to determine if a denial of Temple Recommend to Davis was appropriate, a court would have to determine whether there had been a deviation from “true” Mormon doctrine. Such a determination by a court is prohibited under the First Amendment.
Davis’ testimony established that prior to her accident, her Church calling was that of a seminary teacher, a position which she had held for approximately six years prior to the accident. Clearly, the determination of persons qualified to teach seminary would require a determination of religious beliefs and practices. To determine whether denial of a Church calling was rooted in religious belief, this Court would be required to determine the religious basis for an ecclesiastical decision. We conclude that such a determination is directly comparable to the Temple Recommend, and would constitute a prohibited intrusion because it would require evaluation of evidence about the internal functioning of the Church and its doctrines in order to determine if the Church’s actions were proper under the practices and beliefs of the Mormon Church.
The First Amendment severely circumscribes the role that civil courts may play, since there is substantial danger that the state will become entangled in essentially religious controversies. 16A Am.Jur.2d, Constitutional Law § 470 (1979). The United States Supreme Court has addressed the review of church disciplinary matters in a hierarchical church and clearly adopted a hands-off policy when courts are asked to review such matters. Serbian Eastern Orthodox Diocese for the United States of America and Canada v. Milivojevich (1976), 426 U.S. 696, 96 S.Ct 2372, 49 L.Ed.2d 151. In Serbian Orthodox, the Court concluded:
[WJhether or not there is room for “marginal civil court review” under the narrow rubrics of “fraud” or “collusion” when church tribunals act in bad faith for secular purposes, no “arbitrariness” exception — in the sense of an inquiry whether the decisions of the highest ecclesiastical tribunal of a hierarchical church complied with church laws and regulations — is consistent with the constitutional mandate that civil courts are bound to accept the decisions of the highest judicatories of a religious organization of hierarchical polity on matters of discipline, faith, internal organization, or ecclesiastical rule, custom, or law.
Serbian Orthodox, 426 U.S. at 713, 96 S.Ct. at 2382, 49 L.Ed.2d at 165, (footnote omitted).
In Miller v. Catholic Diocese of Great Falls (1986), 224 Mont. 113, 728 P.2d 794, we considered whether the free exercise of religion clauses of the United States and Montana Constitutions bar consideration of the tort of breach of the covenants of good faith and fair dealing in the discharge of the plaintiff Miller for her failure to maintain discipline in the classroom. In Miller, we quoted from Wisconsin v. Yoder (1972), 406 U.S. 205, 215, 92 S.Ct. 1526, 1533, 32 L.Ed.2d 15, 25, with the following general statement on claims to the free exercise of religion:
The essence of all that has been said and written on the subject is that only those interests of the highest order and those not otherwise served can overbalance legitimate claims to the free exercise of religion.
Miller, 728 P.2d at 796.
In Miller, Father Wagner testified as to matters of discipline involving plaintiff Miller. We stated:
A judicial determination of the presence or absence of good faith on the part of Father Wagner would require the court to examine the school’s discipline policy as applied to classroom instruction covering both religious and nonreligious subjects, and to evaluate Father Wagner’s interpretation and application of that discipline policy. Such an examination of necessity would impinge upon elements of the teaching of religion, or the free exercise of religion. We conclude that discipline in the classroom is so intertwined with teaching which in turn is intertwined with religious principles that a court cannot properly make the determination requested here without interfering with a legitimate claim to the free exercise of religion.
Miller, 728 P.2d at 797. In Miller, we concluded that the tort action for the discharge of plaintiff Miller was barred by the free exercise of religion clauses of the United States and Montana Constitutions. Miller, 728 P.2d at 797.
Miller was also referred to at length in St. John’s Lutheran Church v. State Comp. Ins. Fund (1992), 252 Mont. 516, 524, 830 P.2d 1271, 1276-77, in which we concluded that there was no internal impact or infringement on the relationship between the church and its pastor in considering the pastor as an employee for workers’ compensation coverage purposes. We distinguished St. John’s from Miller by pointing out that the designation of the pastor as an employee did not involve the State in an internal matter of the church which would result in a prohibited interference. St. John’s, 830 P.2d at 1277-78.
In Rasmussen v. Bennett (1987), 228 Mont. 106, 741 P.2d 755, Rasmussen filed a defamation suit alleging that the defendants had wrongfully disfellowshipped him from the Jehovah’s Witnesses. This Court concluded that Rasmussen’s claim was barred by the free exercise of religion clause in both the United States Constitution and the Montana Constitution, pointing out that this Court would be violating defendant’s right to free exercise of religion if we were to find defendant’s statements actionable. Rasmussen, 741 P.2d at 759. The record was clear that the hierarchical church, the Watchtower Society, determined that Ray Rasmussen was not scripturally free to remarry. Therefore, it was not within this Court’s power to question the Watchtower Society’s determination. Rasmussen, 741 P.2d at 759.
Applying the standard used in Miller, we conclude that Davis’ tort claim is not a right of the highest order not otherwise served so as to overbalance the Church’s claim to the free exercise of religion. We hold that evidence of Temple Recommend and Church callings is barred by the free exercise of religion clauses of the United States and Montana Constitutions.
In a similar manner, even though the threats of excommunication were made prior to Davis’ seeming counsel, we do not find that fact to be controlling. Admission of evidence of threats of excommunication would directly involve the Court in an analysis of religious beliefs and practices. Excommunication is an exercise of fundamental religious beliefs which requires a decision as to whether or not a party must be dismissed or thrown out as a church member. Clearly such a determination requires an investigation and interpretation of religious practices and beliefs of the Mormon Church, which could be allowed only in the presence of a constitutionally compelling state interest. On this aspect, as in Miller, we again conclude that Davis’ tort claim is not a right of the highest order not otherwise served so as to overbalance the Church’s claim to the free exercise of religion in its determination of the rules of excommunication.
We hold that evidence relating to denial of Temple Recommend, denial of Church callings, and threats of excommunication, are not admissible because such evidence is barred under the free exercise clauses of the United States and Montana Constitutions.
V.
Did the District court err when it denied the Church’s motion in limine to exclude physical and mental pain and suffering as elements of damage relative to the remaining counts alleged by Davis?
Davis’ claim for breach of fiduciary relationship remains to be adjudicated. A person who stands in a fiduciary relationship is subject to liability to the other for harm resulting from a breach of the duly imposed by the relationship. Restatement (Second) of Torts § 874 (1979).
The Church contends that Davis cannot recover for mental and physical pain arising in the context of any remaining issues because she is barred under the doctrine of res judicata. Davis recovered for physical and mental pain and suffering for the injury in the previously adjudicated negligence action. The Church contends that this is res judicata as it is the very same pain she has previously recovered for under the negligence claim.
To bar a claim on the basis of the doctrine of res judicata, the following elements must be present: (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 must relate to the same subject matter; and (4) the capacities of the persons must be the same in reference to the subject and to the issues between them. Turtainen v. Poulsen (1990), 243 Mont. 355, 360, 792 P.2d 1089, 1092. The District Court found that the second and third elements of the doctrine were not met here, stating:
... The issue of emotional distress damages from allegations of fraudulent misrepresentation and breach of fiduciary duty is not the same as damages arising from negligently caused personal injuries. Neither the issue or the subject matter is the same and res judicata would not bar recovery of emotional distress damages in this portion of the litigation.
Recovery for emotional distress on a claim for breach of fiduciary duty must be supported by tortious conduct which results in a substantial invasion of a legally protected interest and causes a significant impact upon the person of the plaintiff. Johnson v. Supersave Markets, Inc. (1984), 211 Mont. 465, 472-73, 686 P.2d 209, 213.
The physical and mental pain and suffering for which Davis seeks recovery are alleged to have arisen from the defendants’ conduct after the injury and are not related to the pain and suffering resulting from the injury itself. Such claimed damages arising from the defendants’ conduct after the injury were not considered in the negligence case.
We conclude that damages relating to pain and suffering arising from the Church’s alleged substantial invasion of Davis’ legally protected interest are not barred under the doctrine of res judicata.
We hold that the District Court properly denied the Church’s motion in limine to exclude physical and mental pain and suffering as elements of damage relative to the remaining counts alleged by Davis.
VL
Did the District Court err when it refused the Church’s request to amend its answer to include the defense of charitable immunity?
The Church moved on July 29,1991 for an order allowing the defendants to amend their answer to include the defense of charitable immunity. This was not requested prior to or during the trial on the negligence action and was not mentioned in the first appeal. The District Court denied the motion, stating: “The court finds no basis for the defense and that in fact it is contrary to modem thinking. See Howard v. Sisters of Charity, 193 F. Supp. 191 (1961).”
The doctrine of charitable immunity is an exception to the general principle of liability for tortious conduct. Albritton v. Neighborhood Centers Ass’n for Child Development (Ohio 1984), 466 N.E.2d 867, 869. Where it exists, it has been devoured by exceptions. Albritton, 466 N.E.2d at 869.
For example, after Ohio initially adopted the rule in 1911, exceptions were carved out for hospitals, for beneficiaries of the charity, for negligence in hiring or retaining an employee, for a business operated by the charity for profit not relating to the charity’s organizational purpose, and for circumstances where the plaintiff pays for services rendered by the charity. Albritton, 466 N.E.2d at 869-70.
Some courts which adopted the doctrine based it on a public policy theory. See, e.g., Fitzer v. Greater Greenville S. C. YMCA (S.C. 1981), 282 S.E.2d 230; and Albritton, 466 N.E.2d 867. In Fitzer, the court quoted President and Directors of Georgetown College v. Hughes (D.C. Cir. 1942), 130 F.2d 810, 827:
The rule of immunity is out of step with the general trend of legislation and judicial policy in distributing losses incurred by individuals through the operation of an enterprise among all who benefit by it rather than in leaving them wholly to be borne by those who sustain them. ...
Fitzer, 282 S.E.2d at 231. In Geiger v. Simpson Methodist-Episcopal Church of Minneapolis (Minn. 1928), 219 N.W. 463, 466, the court said, “It is almost contradictory to hold that an institution organized to disperse charity shall be charitable and extend aid to others, but shall not compensate or aid those injured by it in carrying on its activities.” In abolishing the doctrine in South Carolina, that state’s high court stated: “The doctrine of charitable immunity has no place in today’s society.” Fitzer, 230 S.E.2d at 231.
The public policy justification resulted in widely differing opinions, which varied as times changed. Some courts have based their acceptance of the charitable immunity rule on other rationales aside from or in addition to the public policy rationale.
One of these is the tmst fund theory, a theory that a charity’s funds are held in tmst and cannot be diverted to tort claimants because the charity’s ability to exist would be substantially impaired or destroyed, the donor’s intent would be thwarted and future donors would be discouraged from giving to that or other charities. Annotation, Tort Immunity of Nongovernmental Charities — Modem Status 25 A.L.R. 4th 517, 522 (1983). This theory has been rejected by courts for numerous reasons, including the modern reality where charity or philanthropy is big business with liability insurance widely and inexpensively available. Id.
The theory of respondeat superior, once relied on to support charitable immunity, has been rejected because it results in immunity where negligence is that of employees or servants, but not where negligence is the result of corporate or administrative acts such as negligence in hiring. Id.
The final theory is implied waiver of assumption of risk, a theory based on the rationale that by accepting benefits from the charity, the beneficiary has waived liability or assumed the risk of negligence. This theory has been criticized as a mere fiction with unjust results because a paying patient or beneficiary avoids waiver or assumption of risk. 25 A.L.R. 4th at 523.
Several states have partially retained charitable immunity for a charity’s agent’s or employee’s negligence, a nonpaying beneficiary in a charitable hospital, for trust fund property, for charitable activities only, or have statutorily limited recoverable dollar amounts. 25 A.L.R. 4th at 540-46. In New Jersey, charitable immunity has been partially reinstated by statute for causes of action arising only from charitable activities. 25 A.L.R. 4th at 542-43, 560.
Charitable immunity has been totally abolished as to hospitals in over thirty states, and retained partially in only a few states. For institutions other than hospitals, it has similarly been abrogated either totally (in at least 21 states) or partially. 25 A.L.R. 4th at 547.
The general doctrine of charitable immunity was established in American courts based on an English decision of 1846. Restatement (Second) of Torts § 895E comment b (1979), (citing Feoffees of Heriot’s Hospital v. Ross, 12 C. & F. 507, 8 Eng.Rep. 1508). Although the English case was soon repudiated there, American courts continued to apply it for the reasons discussed above. Prosser and Keaton, The Law of Torts, § 133 (1984).
... [Virtually all states with decisions on the subject at all have rejected the complete immunity of charities .... Only two or three states in recent years have insisted on retaining the full immunity in the absence of legislation to the contrary. Even in some of these states, however, the immunity is only formally complete, since statutes provide a method for reaching any liability insurance funds covering the charity.
Id. The Restatement (Second) of Torts, § 895E (1979), reflects this trend away from allowing immunity to charities and provides that charitable institutions should not be immune merely because of their charitable makeup.
Montana has never adopted the doctrine of charitable immunity. The District Court in this case rejected the defense as being contrary to modern thinking, citing Howard v. Sisters of Charity of Leavenworth (D.C. Mont. 1961), 193 F. Supp. 191, a federal district court opinion applying Montana law. In Howard, the court discussed the modern trend to eliminate the defense in jurisdictions which had previously adopted it, discussed the change in the American Law Institutes’s position between the publications of the first and second editions of the Restatement of Trusts, and rejected the doctrine of charitable immunity because prior reasoning no longer supported its adoption or retention. Howard, 193 F.Supp. at 192-194.
The Church contends that the need and basis for the doctrine of charitable immunity for religious institutions is as plausible today as when it was originally established. Considering the realities of modern charitable organizations and the great weight of authority abandoning the doctrine, it would seem odd for this or any court to adopt the doctrine now. We agree with the opinion set forth in Howard and approved by the District Court in this case and decline to adopt the doctrine of charitable immunity.
We hold the defense of charitable immunity is not an allowable defense and the District Court properly refused to allow the Church to amend its answer to include such defense.
Conclusion
In summary, we affirm the District Court on the following issues: Summary judgment was properly granted to the defendants on the issues of fraud, misrepresentation and intentional infliction of emotional distress. Summary judgment was properly denied on the issue of breach of fiduciary duty. Damages for emotional pain and suffering are not res judicata. The defense of charitable immunity was properly rejected.
We also affirm the District Court’s ruling on motions in limine excluding evidence relating to denial of Temple Recommend and Church callings based on the free exercise clause of the First Amendment to the United States Constitution and Article II, Section 5 of the Montana Constitution. We reverse the District Court’s ruling on the Church’s motion in limine which would allow admission of evidence relating to the threats of excommunication for the reasons explained herein.
Affirmed in part, reversed in part and remanded.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY and McDonough concur. | [
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JUSTICE WEBER
delivered the Opinion of the Court.
This is an appeal from the Twenty-First (formerly Fourth) Judicial District Court, Ravalli County, denying defendant’s motion for change of venue. We affirm.
We consider the following issue on appeal:
Did the District Court err in denying defendant’s motion for change of venue from Ravalli County to Butte-Silver Bow County?
Brett and Janet Depee (Depees) are residents of Stevensville in Ravalli County. In October of 1990, the Depees entered into an agreement with Better Homes of Montana (Better Homes) to purchase a 1983 Venture mobile home. The contract called for Better Homes to deliver, set up, block and level the mobile home at the Depees’ residence in Stevensville.
The contract for sale of the mobile home was conditioned on the approval of financing by Bitterroot Valley Bank (Bitterroot Bank). Bitterroot Bank is located in Lolo, Missoula County. First Citizen’s Bank of Butte (First Bank) held a lien upon the mobile home in question. Upon agreement with Depees, Bitterroot Bank Vice President Rich Zins (Zins) contacted First Bank and asked if the First Bank would release its lien and, if so, where payment for the mobile home should be delivered. First Bank stated that the check from Bitterroot Bank should go directly to Better Homes and that the lien would be released in the normal course of business. Bitterroot Bank contends that it would not have loaned the money to the Depees unless the Bank had agreed to release the lien.
On or about October 19,1990, Bitterroot Bank sent Better Homes a check for the purchase price of the mobile home. The mobile home was subsequently delivered to the Depees and they moved into it in November of 1990. Subsequently, Better Homes went out of business. Following the mobile home’s delivery, First Bank attempted to have title issued to the mobile home based upon repossession. An affidavit of repossession was issued on June 4, 1991, stating that First Bank had actual possession of the mobile home. According to First Bank, Better Homes had been required to deliver a negotiable certificate of title on the mobile home to First Bank. When Better Homes paid the debt owed on the mobile home, First Bank would release the certificate of title.
Depees and Bitterroot Bank subsequently filed suit against First Bank regarding the encumbered title to the mobile home. The suit was filed in Ravalli County and contains charges of wrongful conversion, breach of agreement, breach of statutory duty to file a satisfaction of a chattel mortgage, wrongful repossession of the mobile home, breach of an obligation of good faith and fraud.
The Bank then filed a motion for change of venue to Butte-Silver Bow County where it maintains its principal place of business. A hearing was held on May 20, 1992, and on July 20, 1992, the court issued an order denying the Bank’s request for change of venue.
Did the District Court err in denying defendant’s motion for change of venue from Ravalli County to Butte-Silver Bow County?
First Bank argues that the general rule of law governing venue is that venue is proper in the county where the defendant resides. According to First Bank, none of the statutory exceptions to this general rule apply under the facts of this case: the tort claims and contract claims are not appropriate in Ravalli County. First Bank contends that the action is only proper in Butte-Silver Bow County, where First Bank has its principal place of business.
The Depees argue that if Ravalli County is a proper county, the court cannot change venue to another proper county. According to the Depees, Ravalli County is appropriate because the underlying contract was to be performed in Ravalli County. Further, all torts alleged by the Depees spring from this contract and are so interrelated with it that Ravalli County is appropriate.
The record on appeal of venue is limited and contains only the complaint, an affidavit and the transcript of the venue hearing. The action revolves around two agreements, one of which is a written purchase agreement made between the Depees and Better Homes. The purchase agreement for the mobile home had a condition precedent. A condition precedent is a condition which must be met before the agreement becomes effective. Westmont Tractor Co. v. Viking Exploration, Inc. (D.C. Mont. 1982), 543 F.Supp. 1314. The purchase agreement states expressly that the sale is conditioned on the approval of financing by Bitterroot Valley Bank.
A second agreement exists within the facts of this case and that is the oral agreement between First Bank and Bitterroot Bank. In that agreement, First Bank agreed to release its lien on the Depees mobile home, which had been floor financed to Better Homes, when Better Homes paid the amount owed on the home. First Bank agreed in a telephone conversation that the lien would be released so that Bitter-root Bank could maintain the security interest on the mobile home. Bitterroot Bank officer, Zins, testified that he would not have loaned the $12,500 to the Depees unless First Bank agreed to release its lien.
Montana’s venue statute governing contract actions is § 25-2-121, MCA. This section of the code provides that venue for contract actions is proper in either the county in which the defendant resides or the county in which the contract is to be performed. Section 25-2-121(1), MCA. See also, Missouri-Stone v. Barber Seed (1992), [256 Mont. 66] 844 P.2d 112, 49 St. Rep. 1139. According to this statute, the county where the contract is to be performed, if no place is named, is the county in which, by necessary implication from the terms of the contract, considering all of the obligations of all parties at the time of its execution, the principal activity was to take place. Section 25-2-121(1)(b)(ii), MCA. [Emphasis added.] The particular county must be clear from the express terms of the contract or by necessary implication from the contract terms. Berlin v. Boedecker (1989), 235 Mont. 443, 767 Mont. 349.
The first contract, the purchase agreement, does not specify where the goods are to be delivered. It states that the mobile home is to be delivered, set up, blocked and leveled by Better Homes personnel. The purchase agreement lists the Depees’ address in Ravalli County. By “necessary implication” the county of principal activity is where the mobile home was to be set up, and in fact was set up.
The second agreement between First Bank and Bitterroot Bank would have Ravalli County as its place of principal activity also. Although First Bank officer Beck testified that had First Bank been paid for the mobile home, it would have released the title to the dealer, Better Homes, that title would have eventually been sent to Bitter-root Bank. That is particularly so since Better Homes went out of business shortly after the Depees bought the mobile home.
In addition, subsection (2)(a) of § 25-2-121, MCA, lists specifically that the proper county for contracts for the sale of property or goods is to be where the goods are to be delivered. The “goods” under the purchase contract were delivered, set up, blocked and leveled in Ravalli County. Ravalli County was obviously the county where the principal activity of both contracts, and the place where the “goods” from the first contract were delivered.
First Bank claims that it was not a party to the purchase agreement. Such argument is irrelevant. First Bank was a party to the second agreement and the principal place of activity on that agreement would have been Ravalli County.
The Depees do not have a cause of action outside of the purchase agreement. Every claim, every activity at issue by all four parties, stems from this purchase agreement. Even the tort claims, which the Bank argues were not founded in this initial contract, are directly tied to the initial purchase agreement or the agreement between First Bank and Bitterroot Bank. Our statutes provide that where tort claims are so interrelated with the contract action, the site of venue which is appropriate for the contract action is appropriate for the tort claims also. Section 25-2-122, MCA.
We conclude that under both contracts at issue in this case, Ravalli County is proper venue. Therefore, a change of venue is not proper under Montana’s venue statutes because the plaintiffs filed in a proper county. We hold that the District Court did not err in concluding that Ravalli County was a proper county for venue and in denying the Bank’s motion for change of venue.
Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES HUNT and HARRISON concur. | [
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JUSTICE HARRISON
delivered the Opinion of the Court.
Appellant D. Michael Curran (Curran) appeals an order of the First Judicial District Court, Lewis and Clark County, denying his request for an injunction and dismissing his complaint against the Montana Department of Highways (Department). The Department cross-appeals. We affirm.
Montana Highway 200 crosses Flat Creek on Curran’s property in Lewis and Clark County northeast of Bowmans Corner. In 1985 the Department reconstructed the highway across Curran’s property, removing a large wooden bridge over Flat Creek and replacing it with twin culverts. Construction of the new stream crossing required a United States Army Corps of Engineers permit, which in turn required the concurrence of the United States Environmental Protection Agency, the United States Fish and Wildlife Service, and the Montana Department of Fish, Wildlife and Parks. To obtain the approval of these agencies, the Department revised its original plans and built the twin-culvert structure to conform to their standards.
In February 1986, during a flood caused by melting snow, the new culverts were blocked by ice and debris. The creek overflowed, covering approximately seventeen acres of Curran’s grazing land. The overflow caused erosion and left debris and gravel on the land after the flood subsided. Curran had to move cattle and feed from the affected area and thus was unable to use the land for its ordinary purposes.
In his complaint, filed in April 1987, Curran alleged that the Department had a duty to use ordinary care and skill in replacing the existing bridge and that it breached its duty by ignoring stream flow and engineering standards when it installed twin culverts that were too small to handle the flood waters. Causing the resulting flood, Curran charged, was a trespass by the Department. Further, Curran alleged, the new installation created a situation that was likely to recur unpredictably in the future, creating a continuing nuisance and future damages that could not be redressed by a legal remedy.
Curran’s original complaint prayed for past and future damages and for a mandatory injunction requiring the Department to replace the stream crossing with a crossing of adequate size and design that would prevent future flooding of his property, prevent future trespasses, and abate the nuisance.
In November 1990, however, Curran amended his complaint, deleting the request for damages and leaving only the request for a mandatory injunction. The Department moved in July 1991 to deny the injunction, and in June 1992 the District Court granted the Department’s motion and dismissed Curran’s complaint with prejudice. Curran appealed.
We have restated the issues on appeal as follows:
1. Whether a mandatory injunction is an appropriate remedy in this case.
2. Whether the twin-culvert stream crossing created a nuisance under § 27-30-101, MCA.
As our holding on the first issue is dispositive, we do not address the second issue.
A district court may issue an injunction when it appears that the commission or continuance of an act will produce “irreparable injury” to the party seeking such relief. The granting of an injunction is discretionary, and we will sustain it unless an abuse of discretion is shown. Madison Fork Ranch v. L & B Lodge Pole Timber Products (1980), 189 Mont. 292, 302, 615 P.2d 900, 906. The same standard of review applies to a District Court’s denial of an injunction. Smith v. Ravalli County Board of Health (1984), 209 Mont. 292, 679 P.2d 1249. Here, we conclude that the District Court did not abuse its discretion in denying Curran’s request for an injunction.
The Department argues that an injunction is not an appropriate remedy when “a plain, adequate, and speedy remedy at law” is available, and that such a remedy is available in the form of inverse condemnation. The Department relies chiefly on our decision in Riddock v. City of Helena (1984), 212 Mont. 390, 687 P.2d 1386. In Riddock we held that:
The landowner’s only remedy for the City’s construction of a pipeline on his land without obtaining an easement is an inverse condemnation action for just compensation for the value of the easement on the date of the taking.
687 P.2d at 1388. Riddock had asked for compensation for an alleged taking of land without compensation, or in the alternative for an injunction requiring the city to remove its pipeline. The court granted summary judgment for the city on the grounds that Riddock, as the successor in interest to the person who had owned the land when the city built the pipeline, had no right to compensation. The former landowner had a right to compensation through inverse condemnation, though he did not pursue it; therefore, an injunction was not an available remedy for Riddock.
Our rule in Riddock is based on the theory that to allow a landowner injunctive relief would permit that landowner to defeat a public entity’s power of eminent domain. 687 P.2d at 1388. We believe that as a matter of public policy the better alternative is to ensure compensation for a damaged landowner, like Curran, by requiring the state to purchase any property it takes for a public purpose. See Hurley v. Kincaid (1932), 285 U.S. 95, 104, 52 S.Ct. 267, 269, 76 L.Ed. 637, 643 (where a federally-sponsored flood control project threatened to flood the plaintiff’s land, failure to compensate him for taking his property “affords no basis for an injunction if such compensation may be procured in an action at law”).
Curran points out that in Riddock the plaintiff did not allege nuisance or trespass and argues that the case should be distinguished. Further, Curran argues, he is not asking for damages in any form, but for an abatement of the nuisance caused by the Department’s stream crossing. He cites a 1909 opinion in which we left open the possibility that an injunction ordering a power company to remove its dam might be warranted. Wilhite v. Billings & Eastern Montana Power Co. (1909), 39 Mont. 1, 101 P. 168.
In Wilhite the defendant’s dam flooded the plaintiff’s land, and the plaintiff requested an order compelling the defendant to lower, remove, or alter its dam in such a way as to avoid further damage to his property. The trial court ordered the power company to rebuild and repair its dam, but we remanded the case for a modified order that merely required the power company to abate the nuisance, commenting that the trial court’s injunction was “entirely too broad and drastic,” and that “there is no evidence that it is necessary to rebuild, repair, or remove the dam.” We concluded:
This Court will, in proper cases, order the entry of interlocutory restraining orders, either mandatory or prohibitory, as the case may require; but we find in this record no warrant for making such an order in this case.
101 P. at 171.
Here, too, we find no warrant for an order compelling the Department to reconstruct its stream crossing. If Curran can show, however, that the Department’s stream crossing caused Flat Creek to inundate his land, then he may be entitled to compensation for a physical taking of his property. We held in Knight v. City of Missoula (1992), 252 Mont. 232, 243, 827 P.2d 1270, 1276, that “a property owner may recover in an inverse condemnation action where actual physical damage is proximately caused to his property by a public improvement.”
If Curran’s loss can be compensated, of course, it is not an irreparable injury. He voluntarily waived damages by amending his complaint so as to limit his remedy to a mandatory injunction, but his waiver does not create an irreparable injury. Without a showing of an irreparable injury, Curran is not entitled to a mandatory injunction.
As Curran has not shown that his property was irreparably damaged, or that inverse condemnation would not be an adequate remedy, the District Court concluded correctly that his only remedy is an action for condemnation or damages.
The Department filed a cross-appeal, raising an issue not addressed by the District Court: whether the District Court has jurisdiction to order the Department to replace the stream crossing.
The Department argues that even if the District Court had ordered the Department to rebuild the stream crossing, the Department could not have done so without a permit from the United States Army Corps of Engineers, pursuant to 33 U.S.C. § 404 (the Clean Water Act). Further, the Department argues, because the District Court has no authority to order the Corps of Engineers to issue such a permit, the Department could find itself enjoined to rebuild a bridge that is prohibited by the federal government.
Because we affirm the District Court’s decision to deny the injunction, we need not address this issue. Federal permit requirements would be a consideration only if the District Court had decided to grant the injunction.
Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES HUNT, McDONOUGH and WEBER concur. | [
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JUSTICE WEBER
delivered the Opinion of the Court.
Plaintiffs appeal the summary judgment order of the District Court of the Fourth Judicial District, Missoula County, which ruled in favor of defendant David Ballou based on the “accepted work” doctrine of contractor nonliability. We reverse and remand to the District Court for reconsideration.
The sole issue for review is whether the District Court erred in granting summary judgment to defendant Ballou.
Appellants Edward Nichols, Jr., Julia A. Brummel and Nichole A. Brummel, by Julia A. Brummel as her Mother and Natural Guardian (plaintiffs) filed complaints alleging that they suffered carbon monoxide poisoning while residing in a rental property located in Missoula, Montana. The amended complaint alleged numerous claims against several defendants. Plaintiffs have settled their claims with and stipulated to dismiss defendants John Schubert, Cole MacPherson, Don Beaver Heating and Air Conditioning and Thomas Plumbing and Heating. Claims against two defendants remain. Plaintiffs’ claim against defendant David Corntassel is rooted in the Montana Residential Landlord and Tenant Act and is not a part of this appeal. This appeal relates solely to the District Court’s summary judgment dismissal of plaintiffs’ claim against defendant David Ballou (Ballou), a Missoula heating and air conditioning contractor and owner of Ballou Heating and Air Conditioning.
In their Second Amended Complaint, plaintiffs alleged the following: In 1988, plaintiffs rented a residence located at 2120 South 14th Street in Missoula owned by David Corntassel. Corntassel had purchased the residence in 1986 from John Schubert. To meet FHA financing requirements, Schubert raised the foundation of the house approximately two feet. When this was done, the vent pipes from the furnace had to be modified accordingly. Schubert contracted with Ballou to perform the modifications to the furnace exhaust system. Ballou performed the work in July or August of 1986. In April 1988, shortly after plaintiffs moved into the house, the exhaust vent pipe leading from the furnace to the chimney separated because the vent had never been securely fastened by Ballou.
Plaintiffs alleged that when the vent pipe separated, carbon monoxide gas escaped, causing them to suffer carbon monoxide poisoning. They further alleged that Ballou negligently reconnected the furnace exhaust vent in the residence.
In his Answer, Ballou denied plaintiffs’ allegations except as follows: He admitted that Schubert was the owner of the premises at the time that Ballou Heating and Air Conditioning performed the work. He admitted that he was in the business of installing and repairing heating and air conditioning systems. He also admitted that there are city and county codes relating to the installation of furnaces.
Did the District Court err in granting summary judgment in favor of Ballou?
The District Court determined that sufficient facts were presented to grant summary judgment to Ballou on the basis of the “accepted work” doctrine as an affirmative defense. The “accepted work” doctrine is a rule of contractor nonliability most recently approved by this Court in Harrington v. LaBelle’s of Colo. Inc. (1988), 235 Mont. 80, 765 P.2d 732. See also Olson v. Kayser (1973), 161 Mont. 241, 505 P.2d 394; Hannifin v. Cahill-Mooney Constr. Co. (1972), 159 Mont. 413,498 P.2d 1214; and Ulmen v. Schwieger (1932), 92 Mont. 331, 12 P.2d 856.
Under the “accepted work” doctrine, the contractor owes no duty to a third party who is subsequently injured on the premises. The property owner (contractee) is substituted for the contractor as the responsible party when the work is accepted. Harrington, 765 P.2d at 734. The primary rationale is that the injured person is not in privity of contract with the contractor. Under the doctrine, Schubert, as the owner who employed Ballou, would become the responsible party after he accepted the work done by Ballou to reconnect the exhaust vent, if all five elements of the “accepted work” doctrine were met.
Contractor nonliability principles initially parallelled those of product liability. Product liability law, unlike its counterpart, has changed significantly over the years as exemplified by the landmark case MacPherson v. Buick Motor Co. (N.Y. App. 1916), 111 N.E. 1050. MacPherson initiated a shift in product liability law subjecting manufacturers or suppliers to liability for negligence. Annotation, Negligence ofbuilding or construction contractor as ground of liability upon his part for injury or damage to third person occurring after completion and acceptance of the work. 58 A.L.R.2d 865, 869-70. The general rule of nonliability for contractors did not experience a similar metamorphosis. However, a gradual trend away from nonliability for negligence developed around a group of exceptions to the general rule instead of an outright repudiation of the “accepted work” doctrine in those jurisdictions which had previously adopted the doctrine. Strakos v. Gehring (Tex. 1962), 360 S.W.2d 787, 790. One of the numerous exceptions which evolved is the “latent defect” exception which plaintiffs urge this Court to adopt.
Authors of the Restatement (Second) of Torts at § 385 recommended that contractors should be placed on the same footing as manufacturers for negligence liability. 58 A.L.R.2d at 871. In Strakos, the court completely overruled its prior ruling which had approved the “accepted work” doctrine, noting that the effect of the decision was to bring the defendant within general rules of tort litigation, restoring logic and simplicity to the law. Strakos, 360 S.W.2d at 790-91.
A number of courts have expressed dissatisfaction with the rule, favoring a more direct approach such as that of the Texas court in Strakos. 13 Am. Jur. 2d Building and Construction Contracts § 140 (1964). Instead of applying the nonliability rule, these courts have established a rule that a contractor is liable for injuries to or death of third persons after acceptance by the contractee where the work is reasonably certain to endanger third persons if negligently completed. Id. This view adopts a rationale that there are no sufficient grounds to differentiate between liability of a manufacturer of goods and that of a building or construction contractor. Id. The building contractor’s liability under this reasoning is not absolute, but predicated upon negligence. Thus, a contractor following plans or specifications given to him will not be liable if a reasonable person would have followed them. Id. See, e.g., Menendez v. Paddock Pool Constr. Co. (Ariz. App. 1991), 836 P.2d 968 (nonliability rule applies only when contractor has no discretion and is merely following plans and specifications provided by the employer); and Hanna v. Fletcher (D.C.Cir. 1956), 231 F.2d 469 (the leading case rejecting the “accepted work” doctrine).
In this appeal, plaintiffs have asked this Court to review the “accepted work” doctrine and consider whether it is appropriate to continue to blindly exempt contractors from liability when the elements of the doctrine are present. They do not argue that this Court should follow the example of the many jurisdictions which have completely abandoned the doctrine as this Court has already done for products liability actions against manufacturers and others pre viously exempt from liability. See Brandenburger v. Toyota Motor Sales, U. S. A., Inc. (1973), 162 Mont. 506, 513 P.2d 268. Instead, they urge us to adopt the “latent defect” exception to the doctrine and argue that the facts of this case clearly demonstrate that a latent defect existed when Ballou performed the work and turned it over to Schubert some twenty months prior to their injury.
Based on the arguments presented in the briefs, the court concluded that it was appropriate to consider the “accepted work” doctrine and the possible application of the “latent defect” exception to that doctrine. Both parties’ briefs before this Court indicated there were no genuine issues of fact relating to the five elements of the “accepted work” doctrine. Argument was presented on that theory.
This Court has now made a careful review of the entire record before the District Court. The record, as submitted to this Court, contains no affidavits of any kind, no depositions, no interrogatories, and no separate admissions which could be considered. The Clerk of the District Court verified that its entire record had been submitted to this Court for the appeal. As previously pointed out, the defendant Ballou has denied, generally and specifically, all of the allegations on the part of the plaintiff in the amended complaint with the exception only of an admission that Schubert owned the premises at the time when Ballou performed work, that Ballou was in the business of repairing heating and air conditioning systems and that there are city and county codes. As a result, the pleadings themselves fail to establish any facts pertinent to the issues before this Court.
As the party moving for summary judgment, Ballou was required to comply with the provisions of Rule 56(c), M.R.Civ.R, which in pertinent part provides:
Motion and proceedings thereon.... The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. ...
Rule 56(c) has been the subj ect of many cases decided by this Court. In the great majority of cases, the question raised is whether or not the party opposing summary judgment has properly submitted facts to demonstrate an issue of material fact. Parties continue to argue that facts alleged in the pleadings must be accepted as correct. In such cases, we have held as follows:
... Drug Fair argues that the facts alleged in its complaint must be accepted as correct. That is not correct. As pointed out in Mayer Brothers v. Daniel Richard Jewelers, Inc. (1986), [223 Mont. 397], 726 P.2d 815, a party opposing a motion for summary judgment may not rest upon the mere allegations of pleadings, and has an affirmative duty to respond by affidavits or sworn testimony with specific facts that show there is genuine issue of fact for trial. ...
Drug Fair Northwest v. Hooper Enters., Inc. (1987), 226 Mont. 31, 733 P.2d 1285, 1287.
The essential question here, however, is whether or not defendant Ballou has submitted sufficient facts to trigger the court’s consideration under Rule 56(c), M.R.Civ.P. In describing the cases where a summary judgment is proper, this Court stated in Gamble Robinson Co. v. Carousel Properties (1984), 212 Mont. 305, 688 P.2d 283, 286-87, as follows:
Summary judgment is not a substitute for trial. ... Rule 56(c), Mont.R.Civ.P. permits summary judgment to issue only when there is no genuine issue of material fact, and the moving party is entitled to the judgment as a matter of law. ... In Cereck v. Albertson’s, Inc. (1981), 195 Mont. 409, 637 P.2d 509, we stated the test for granting summary judgment:
“It is well established that a party moving for summary judgment has the burden of showing a complete absence of any genuine issue as to all facts deemed material in light of the substantive principles that entitle that party to a judgment as a matter of law. [Citations omitted.] All reasonable inferences that may be drawn from the offered proof are to be drawn in favor of the party opposing summary judgment.” [Citations omitted.]
The moving party’s initial burden is two-fold. First, it must show the absence of any genuine issue as to material fact. Second, that party must also show that this set of facts entitles it to the judgment as a matter of law. This necessarily implies the articulation of cogent legal grounds to which the facts apply. (Emphasis supplied.) (Citations omitted.)
The foregoing is the test which must be applied in the present case.
As pointed out above in Gamble Robinson, it was the burden of defendant Ballou here to first show the absence of any genuine issue of material fact, and second, to show that this set of facts entitled Ballou to judgment as a matter of law. Both defendant Ballou and plaintiffs have failed to establish facts which entitled any of them to judgment as a matter of law. As noted, the pleadings fail to establish as matters of fact the key facts regarding the furnace, furnace pipe, separation of the pipe, and resultant injury. The parties do make reference in their briefs to various depositions, but none of those depositions are a part of the record before us. We conclude that defendant Ballou has completely failed to set forth a set of facts which entitle him to judgment as a matter of law. We also emphasize that plaintiffs in turn have failed to set forth facts which entitle them to judgment as a matter of law. As a result, we hold that defendant Ballou as the moving party has failed to establish a set of facts which entitled him to judgment as a matter of law under Rule 56(c), M.R.Civ.P.
We, therefore, hold that the District Court erred in granting summary judgment to defendant Ballou. We remand this case for further consideration in a manner consistent with this opinion.
Reversed and remanded.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, HARRISON and McDonough concur. | [
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MR. JUSTICE HARRISON,
delivered the opinion of the Court.
This is the second appeal taken from a petition for a dissolution of marriage and the equitable apportionment of assets of a marital estate. The petition was originally filed in the District Court of the Eleventh Judicial District, in and for the County of Flathead, the Honorable Robert Sykes presiding.
The facts of the case are fully developed in the first appeal, In re Marriage of Schultz (1979), 184 Mont. 245, 597 P.2d 1174, and need only be briefly discussed here. Appellant husband and respondent wife were first married in June 1967, divorced a year and a half later, and remarried in December 1969. A petition for the dissolution of the second marriage was filed on July 28, 1977. At that time husband was 46 years old and employed as a railroad brakeman-conductor with net earnings of approximately $1,350 per month. Wife was 37 years old and unemployed, but had worked during the marriage as a bartender and waitress. The primary asset of the marital estate was a twenty-acre tract of land, known as the Haskill Creek property, located east of Whitefish, Montana, in Flathead County. A small log house was located on the property which served as the marital home of the parties during the marriages. Husband originally purchased the land for $11,000 prior to his marriages to wife, and approximately $5,000 of the purchase price was paid by husband during the marriages.
On March 23, 1978, the District Court distributed the marital estate. The personal property was divided equally between the parties, and husband received the Haskill Creek property but was ordered to pay wife $6,000 as her interest therein. Husband was also ordered to assume all marital obligations and was given credit for his contributions toward the support of wife’s children. The following chart indicates the court’s apportionment:
Wife contested the above apportionment in the first appeal on the basis of issues unrelated to those raised here. We remanded the case to the District Court to enter certain findings with respect to the personal property of the parties and to distribute the marital estate without considering husband’s contributions toward the support of wife’s children. Following our instructions, the District Court re-apportioned the marital estate, this time dividing the estate equally between the parties with respect to both real and personal property. Husband again was ordered to assume all marital obligations, and the property was divided in the following manner:
An objection to this second apportionment is now raised by husband in the form of a second appeal. Husband argues that the District Court committed reversible error and abused its discretion by dividing the marital estate equally between the parties without considering the relative contributions of the parties. In particular, husband objects to the District Court’s award to wife of a greater interest in the Haskill Creek property simply by reason of her living on the property during the marriage.
In considering husband’s arguments, we note, first of all, that a District Court has far-reaching discretion in revolving property division disputes in dissolution proceedings and that the District Court’s judgment will not be disturbed unless a clear abuse of discretion is demonstrated. Zell v. Zell (1977), 174 Mont. 216, 570 P.2d 33, 35; In re Marriage of Aanenson (1979), 183 Mont. 229, 598 P.2d 1120, 1123; Cook v. Cook (1972), 159 Mont. 98, 103, 495 P.2d 591, 593-594; Schwartz v. Schwartz (1979), 184 Mont. 178, 602 P.2d 175, 176. To prevail in this case, husband must show, therefore, that the District Court clearly abused its discretion.
The primary focus of husband’s arguments concerns the District Court’s apportionment of the Haskill Creek property, which was acquired by husband prior to his marriages to wife. That property consisted of a twenty-acre tract of partially cleared and partially uncleared land. At the time of purchase, a small log house was located upon the property, and there was second growth timber of only marginal merchantable quality. Husband and his friends made several substantial improvements to the house while the parties lived there during the marriages.
In disposing of property acquired prior to a marriage, a District Court is required by statute to consider:
“. . . those contributions of the other spouse to the marriage, including: (a) the nonmonetary contribution of a homemaker; (b) the extent to which such contributions have facilitated the maintenance of this property, and (c) whether or not the property disposition serves as an alternative to maintenance arrangements.” Section 40-4-202, MCA.
Husband here refers to certain conclusions made by the District Court for his argument that wife was not entitled to a greater interest in the property because of her lack of contributions. The District Court concluded in its conclusions of law that wife made no substantial improvements to the Haskill Creek property and that she dissipated the marital estate. The court found, however, that by reason of wife’s living on the property during the marriage and the period in which improvements were made, she was entitled to equal interest in the property.
In understanding the conclusion and the discretion of the District Court, it is important to consider the findings of fact entered by the court. These findings provide, in part, a basis for the court’s conclusions. Husband would have us believe, from a rather selective examination of the court’s conclusions, that wife made no contributions to the Haskill Creek property but simply lived on it, and further that wife was the sole cause and reason for the dissipation of the marital estate. The findings of fact indicate otherwise. The court found factually that both parties were responsible to some extent for the dissipation of the marital estate and that wife made considerable sacrifices while living upon the property. Finding of Fact No. 19 stated:
“Considerable strife, turmoil and controversy occurred throughout the two marriages of the parties. Drinking on the part of both parties has contributed to the problem. The respondent [wife] left the family home on several occasions; and the separation of the parties dissipated the assets and monies accumulated during the course of the marriage on the part of both parties.” (Emphasis added.)
Finding of Fact No. 21 stated:
“Substantial improvements were made on the house during the marriages. The resulting living conditions were a problem in attempting to maintain reasonable conditions. The respondent [wife] contributed little physical effort in improving the house; but both parties neither expected nor required such effort on her part. The parties living on said property, where substantial improvements were being made, required considerable sacrifice of personal comfort.”
We find substantial evidence in the record to support such findings. Testimony was given at the apportionment hearing regarding the parties’ several conflicts and their drinking problems. It is impossible to conclude from such testimony that the separation of the parties and the subsequent dissipation of the marital estate was caused entirely by the actions of one party. The transcript also indicates that, while husband and his friends engaged in most of the physical work with regard to the improvements made upon the property, wife nevertheless did such things as buy bedroom lights, bathroom lights and a hot water tank for the house, stain doors and casings, clean up messes during the construction, make trips into Whitefish for materials, ride the Caterpillar with husband in working the property and drive the truck during haying operations.
With respect to the living conditions that both parties lived with during the construction, there is testimony to the effect that there were considerable sacrifices made. An entire bedroom and bathroom were added, and there were no kitchen cupboards or carpeting in the house. One friend of husband’s, who provided considerable help during the construction, testified that the condition of the property before the start of the work was “pretty bad” — “there wasn’t any water, sewer, no liveable conditions — it was really rough.” Because of these contributions and sacrifices, we find that the District Court did not err or abuse its discretion in awarding wife a greater interest on the second apportionment.
In affirming the discretion and decision of the District Court, we wish to reiterate that, in dissolution proceedings, each case must be considered by District Courts individually with an eye to its unique circumstances. Cook v. Cook, 159 Mont. at 104, 495 P.2d at 59. There is no fixed formula or rationale to be applied in each case, except that the court’s exercise of discretion must be reasonable under the particular circumstances. Biegalke v. Biegalke (1977), 172 Mont. 311, 315, 564 P.2d 987, 989. Here, both parties contributed to the maintenance of the Haskill Creek property, and both were responsible fpr the separation, which caused a dissipation of the marital estate.
Therefore, we find no abuse of discretion, and 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 HARRISON
delivered the opinion of the Court.
This is an appeal from a judgment of the District Court of the Fourth Judicial District, County of Lake, the Honorable Jack L. Green presiding without a jury, entered in favor of defendant, Betty L. Mann. Appellant brought this action in the District Court (1) to rescind the contract dated April 30, 1976, that he had entered into with respondent for the purchase of certain property, and (2) to enforce the option to purchase the same property at a lower price under a contract previously entered into by respondent and Gordon M. Williams and his wife dated February 18, 1975, for which appellant gave $2200 to obtain an assignment dated February 4, 1977. The District Court found that appellant was not entitled to a rescission of his April 30, 1976 contract with respondent, nor was he entitled to exercise the Williamses’ option contract.
Respondent Betty L. Mann is the owner of a combination restaurant-motel business known as the “Alpine Cafe & Motel” located at Swan Lake, in Lake County, Montana. On February 18, 1975, she entered into an option contract with Gordon M. and Darlene L. Williams for the sale of the business, and at the same time, executed a separate lease of the business to the Williamses for a period of three years beginning May 1, 1975, at a rental of $6000 per year. The option contract was assignable and provided that the Williamses could exercise the option to purchase at a purchase price of $68,000 by paying $12,000 down on or before May 1, 1978, and by paying the balance in monthly payments of $500 which included interest commencing on June 1, 1978. In consideration for this option, the option contract recited that the Williamses had paid $6000, which represented one-third of the amount due under the three-year lease, and which would be credited towards payment of the option price if the option was exercised.
The accompanying lease provided that the $6000 annual rental would be paid by a $500 downpayment made on the date of execution, February 18, 1975; $2700 due on March 1, 1975; and the balance of $2800 due in monthly payments of $100 beginning on March 1, 1975, which would rise to $433.30 per month on May 1, 1975, until the full $6000 sum was paid.
The Williamses failed to pay the balance of the consideration recited in the option contract, stopped making lease payments, and closed the business and vacated the property on September 1, 1975. Subsequently, on April 30, 1976, Mann entered into an agreement with Berry for the sale of the same property for a purchase price of $75,000 with a downpayment of $20,000 and the balance to be paid in monthly payments of $500, including interest on the unpaid principal balance at the rate of 8V2 percent annually. Berry had no actual notice of the Mann-Williams option agreement at this time. Mann considered the agreement and the lease to have been terminated by mutual agreement and to be void by reason of the Williamses’ default and failure of consideration.
Berry learned of the previous agreement only when a title insurance policy showed merchantable title was not forthcoming, as required under his contract with Mann. Berry employed an attorney and a title insurance policy was received December 20, 1976, which showed the Williamses’ option and lease as exceptions to merchantable title.
Berry, acting on advice of counsel, paid the Williamses $2200 and received an assignment of the Williamses’ interest under the option contract on February 4, 1977. On April 25, 1977, Berry brought this suit for a cancellation and rescission of his April 30, 1976 agreement with Mann and for specific enforcement of the Williamses’ option agreement in his (Berry’s) name as assignee. In her answer dated September 14, 1977, Mann alleged that the Williamses’ option and lease were cancelled and invalid prior to her entering the contract with Berry. She also asserted a cross-complaint against the Williamses because of their default in the lease payments after March 1, 1975, and the failure of consideration for the option contract. The District Court struck this cross-complaint from her answer on Berry’s motion.
Mann then filed a separate action against Williams and his wife on August 31, 1978, for cancellation and termination of the Williamses’ option and lease which option had been assigned to Berry on February 4, 1977. The Williamses were served on September 20, 1978, and their default was entered in an October 11, 1978 judgment declaring the lease and option to be void. The option was found to be void and cancelled as of March 1, 1975, for failure of consideration, and the lease was found to be void and cancelled as of August 15, 1975, for default in making payments thereunder. On the basis of this default judgment, the District Court found that the assignment of the option to Berry was of no effect.
The District Court found further that the contract of April 30, 1976, between Berry and Mann remains in full force and effect, and that Mann has provided a title insurance report dated October 17, 1978, showing good and merchantable title in property free and clear of all liens and encumbrances, as required under their contract.
The sole issue on appeal is: Did the District Court err in finding, based on the default judgment against the Williamses and in favor of Mann (to which Berry was not party), that the option contract between the Williamses and Mann was void at the time of its assignment by the Williamses to Berry.
This Court in a long series of opinions, many of which are cited in Harrison v. City of Missoula (1965), 146 Mont. 420, 407 P.2d 703, has held that there is a presumption that the trial court’s findings of fact, conclusions of law, judgment and decree are correct, and that the burden is upon the appellant to show reversible error.
In addition, the evidence is to be viewed in a light most favorable to the prevailing party, and this Court will not interfere with the findings of the trier of fact if they are supported by substantial evidence. Wyant v. Dunn (1962), 140 Mont. 181, 368 P.2d 917.
We note that appellant’s position and sole issue is that the finding that the Williamses’ option contract was void at the time of its assignment to Berry is contrary to the law and not supported by the evidence. However, the brief presented and the authority contained therein is void of any support for that contention. The trial court took judicial notice of the District Court judgment in Civil Action No. 10443 and determined that based on this judgment, the option contract of February 18, 1975 between the Williamses and Mann became void on March 1, 1975. It was, therefore, void at the time of the assignment from the Williamses to Berry on February 4, 1977. Appellant does not claim that the judgment in Cause No. 10443 is invalid but merely states in his issues and statements of case that Berry was not a party to that action. This is certainly not sufficient argument to overturn the District Court’s finding that the Williamses’ contract was void.
Respondent Mann in her counterclaim tried to bring the Williamses into this lawsuit. However, the counterclaim was dismissed in this suit on motion by Berry. The evidence shows that the separate lawsuit filed by respondent against the Williamses, that appellant now complains he was not a party to, contains the same allegations that were in the counterclaim against the Williamses in the instant case and were dismissed on appellant’s motion.
Independent of the judgment in the Civil Action No. 10443, which found that the option and lease were void, there was substantial evidence presented before Judge Green in the instant case to support the conclusion that the option was void. The uncontradicted testimony of the respondent is that the Williamses did not pay the full $6000 consideration referred to in the option contract and that the Williamses still owed respondent $2800 that was to have been paid on or before March 1, 1975, but was never paid.
Respondent also testified that the Williamses left the property on or about August 15, 1975, and made no further payments on the lease. She further testified that she received a letter along with the keys to the property sometime in early September. Respondent operated the property after that time and was operating the property at the time she entered into the contract with appellant.
Appellant has failed in his burden of proving that the trial court’s finding that the option contract was void at the time it was assigned to Berry was in error. The record contains substantial evidence to support the finding both in the trial court’s having taken judicial notice of the judgment in Civil Action No. 10443 and in the uncontradicted testimony of respondent as to the failure of consideration and default in the payment in the option and lease which occurred prior to the assignment to appellant.
In support of his position appellant cites Miller v. Meredith, Hill and Whitfield (1967), 149 Mont. 125, 423 P.2d 595, as authority that the terms and conditions of a lease are not the terms and conditions of an option. That case held that a tenant holding over after expiration of lease was not entitled to exercise his option to purchase. Applying that authority to the facts in the instant case, neither Williamses nor their assignee, the appellant, would be entitled to exercise the option because of the failure of consideration of payment upon the option and because of the default in the lease payment. We find no basis to rely upon this case in support of appellant’s position that the lease was not in default.
Next appellant cites Ogg v. Herman (1924), 71 Mont. 10, 227 P. 467, and Connor v. Helvik (1937), 105 Mont. 437, 73 P.2d 541, as authority concerning merchantable title being given appellant by respondent at the time of the agreement entered into between appellant and respondent. The facts in this case do not support the appellant’s position on the delivery of merchantable title. The facts indicate that once the matter was brought to respondent’s attention, she immediately did everything that was necessary to clear the title and present a good and merchantable title to appellant, free and clear of all liens and encumbrances. The trial court so found in Finding of Fact No. 4, and this finding was not even raised as an issue by appellant on appeal.
For the foregoing reasons 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 HARRISON,
delivered the opinion of the Court.
This appeal is taken by the plaintiffs from the District Court’s denial of plaintiffs’ motion for a new trial following a jury verdict for defendant. The plaintiffs are the owners and operators of the Mint Bar in Poison, Montana. Plaintiffs purchased the bar in February 1969 and managed it as a partnership until it was destroyed by fire on December 5, 1974. The fire originated in a small storage room where cleaning materials were kept and in which a time clock device was located. The time clock served to regulate the flow of electricity to the beer cooler to periodically defrost it.
Defendant owns and operates a refrigeration sales and service business in Poison. Defendant’s employee replaced the time clock mechanism in plaintiffs’ bar on August 11, 1973. This replacement required no electrical wiring and consisted solely of attaching four wires already in place to terminals provided in the time clock mechanism. At the time of the original installation, the wires from the circuit breaker box to the time clock were not placed in conduit pipe. Defendant contends that at the time of replacement he pointed out the dangers of the unencased wiring to plaintiffs, but plaintiffs deny that this occurred. The absence of conduit eventually allowed the insulation on the wires to be worn away as a result of either vibration caused by a compressor unit or by cleaning materials, such as mops and brooms, rubbing against the wires. With no protective covering on the wires, the current arced which, in turn, caused the fire.
Plaintiffs entered into a contract for fire insurance with Transamerica Insurance in February 1974. As a condition for maintaining plaintiffs as its insureds, Transamerica conducted a fire inspection of the premises on March 1, 1974. The inspection report described the electrical system as “romex with circuit breakers and it appears to be in good condition.”
Plaintiffs brought an action for negligence against defendant to recover damages caused by the fire. Defendant sought to prove that plaintiffs were contributorily negligent by failing to remedy the dangerous condition of the wiring. At the close of trial, the District Court read several instructions to the jury. Among the instructions given were Instruction Nos. 17 and 23 to which plaintiffs objected. Instruction No. 17 stated:
“Failure on the part of either Plaintiff to locate or recognize a dangerous condition on the premises of the Mint Bar is in law a form of contributory negligence on the part of the Plaintiffs if such failure is a proximate cause of the damages complained of.” Instruction No. 23 stated:
“If you find from the evidence that Transamerica Insurance Company, in undertaking to inspect the premises and to locate and eliminate any fire hazards present, acted on behalf of its insureds, Robert Wolfe and Frances Wolfe, such acts of Transamerica are imputed to its insureds, Robert Wolfe and Frances Wolfe.”
The jury returned a verdict for defendant. Plaintiffs filed a motion for a new trial after the verdict was rendered, contending that the trial court committed reversible error in instructing the jury. The trial court denied the motion for a new trial and plaintiffs appealed. In particular, plaintiffs challenge jury instructions on the issues of contributory negligence and agency as being erroneous statements of the law.
Two issues are presented to this Court on appeal:
1. Did the District Court commit reversible error in giving a jury instruction which stated that failure on the part of plaintiffs, to locate or recognize a dangerous condition on their premises was contributory negligence if such failure was a proximate cause of the damages?
2. Did the District Court commit reversible error in giving a jury instruction which stated that the acts of a party were imputed to the plaintiffs if the party acted on behalf of the plaintiffs where there was insufficient evidence introduced at the trial regarding the elements of agency?
This Court has had several occasions to consider the subject of alleged error in jury instructions. We have previously held that a party has the duty of raising his objection to the instruction at the time of trial or the opportunity is lost. Roberts Realty Corp. v. City of Great Falls (1972), 160 Mont. 144, 154, 500 P.2d 956, 962. Objections to instructions not raised in the trial court cannot be raised for the first time on appeal. Seder v. Kiewit Sons’ Co. (1971), 156 Mont. 322, 330, 479 P.2d 448, 452. We have also required a party to state his ground for an objection with specificity. Pickett v. Kyger (1968), 151 Mont. 87, 96, 439 P.2d 57, 62; Kearns v. McIntyre Const. Co. (1977), 173 Mont. 239, 567 P.2d 433, 440.
Rule 51, M.R.Civ.P., provides in pertinent part:
“Objections made shall specify and state the particular grounds on which the instruction is objected to and it shall not be sufficient in stating the ground of such objection to state generally the instruction does not state, the law or is against the law, but such ground of objection shall specify particularly where the instruction is insufficient or does not state the law, or what particular clause therein is objected to.”
Finally, we have determined that, where error is alleged in a particular instruction, a reviewing court shall consider the instructions in their entirety. In Brothers v. Town of Virginia City (1976), 171 Mont. 352, 359, 558 P.2d 464, 468, we stated:
“When determining whether jury instructions were properly given or refused the reviewing court considers the instructions in their entirety. Furthermore, the instructions are read in connection with other instructions given and they are considered in light of the evidence adduced. (Citation omitted.) Where the instructions to the jury in their entirety state the law applicable to the case, a party cannot claim reversible error as to the giving or denying of certain instructions. (Citation omitted.)”
In this case plaintiffs contend that the giving of Instruction No. 17 constituted reversible error. Plaintiffs maintain that the instruction was an overbroad statement of the law in that it imposed a duty on the part of plaintiffs to locate or recognize all dangerous conditions on their premises. Plaintiffs contend that the instruction failed to mention that the law required no more than that of an ordinarily prudent person under the same circumstances, Plaintiffs argue that the error prejudiced their substantial rights and was not cured by the context of other instructions given.
Defendant contends that Instruction No. 17 was a proper and accurate statement of the law. If the instruction was erroneous, defendant argues that the error was cured by the context of other instructions and did not seriously affect or prejudice the substantial rights of plaintiffs.
In analyzing these arguments, our attention is first drawn to the grounds upon which plaintiffs objected to the instruction at trial. There, plaintiffs stated:
“Plaintiffs object ... on the basis that it implies that plaintiffs are able to locate and recognize the dangerous condition. The evidence uncontroverted before the Court in the case is that neither plaintiff was informed of the dangerous condition, or that they recognized the dangerous condition, and it is not subject to claim of contributory negligence and not a proper instruction. . . also ob ject on the basis that it places a burden upon plaintiffs Wolfes which is a burden which, under the facts of this case, the law does not require them to assume.”
In essence, plaintiffs’ objection was that Instruction No. 17 placed a higher duty on plaintiffs than that fixed by law. This Court has previously questioned the sufficiency of the specificity of this objection in a similar case. In LeCompete v. Wardell (1959), 134 Mont. 490, 498, 333 P.2d 1028, 1033, we stated:
“Defendants contend that the court erred in giving Instructions No. 26 and 28 over their objection. These instructions in effect made defendants liable for a want of care toward plaintiff if they knew or in the exercise of reasonable care should have known that plaintiff was present on defendants’ property. The only objection to these instructions was that they placed a higher duty upon defendants than that fixed by law. Whether this objection was sufficiently specific ... is doubtful.”
Assuming for the purposes of argument that the objection was sufficiently specific, we think that the instruction was in fact erroneous. Where the law of contributory negligence requires that a party act as an ordinarily prudent person under the circumstances, Stenberg v. Beatrice Foods (1978), 176 Mont. 123, 576 P.2d 725, 727, the instruction does not temper the duty owed with the qualification that the law expects no more of a person than is reasonable.
While erroneous, however, the instruction was cured by the context of other instructions given by the trial court. The omission of the reasonable man test in Instruction No. 17 is cured by Instruction Nos. 10 and 12. See Peek v. Forbes (Colo.App.1970), 470 P.2d 85, 88. Instruction No. 12 defines contributory negligence in terms of negligence and Instruction No. 10 defines negligence as the want of care or skill of a reasonable and prudent person under the same circumstances. The reasonable man test is therefore provided.
Instruction No. 12 stated:
“Contributory negligence is negligence on the part of a claimant which contributed as a proximate cause to his damages. A person who is contributorily negligent cannot recover for any damages sustained by him.”
Instruction No. 10 stated in pertinent part:
“. . . negligence means want of such ordinary care or skill. Such want of ordinary care or skill exists when there is a failure to do that which a reasonable and prudent person would ordinarily have done under the circumstances of the situation, or doing what such person under the existing circumstances would not have done.”
We hold, therefore, that the trial court’s giving of Instruction No. 17 did not constitute reversible error.
Plaintiffs’ second issue concerns whether the giving of Instruction No. 23 was reversible error. Plaintiffs argue on appeal that the instruction was erroneous because it failed to require the jury to first establish an agency relationship before applying the instruction and because it failed to define what constitutes an agency relationship. In essence, plaintiffs’ argument is that the instruction is incomplete.
Instruction No. 23 essentially asked the jury by employing the principles of agency, to impute the acts of Transamerica to plaintiffs Wolfe. In this way, contributory negligence could be inputed to the Wolfes because Transamerica had ordered an inspection of the Mint Bar premises which revealed that the wiring was in good condition. Agency, of course, is the fiduciary relation which results in the manifestation of consent by one person that the other shall act on his behalf and adhere to his control and consent by the other so to act. Butler Mfg. Co. v. J & L Implement Co. (1975), 167 Mont. 519, 523, 540 P.2d 962, 965.
In reviewing the instruction, our first concern is whether there was sufficient evidence to warrant the trial court giving the instruction. Integral to any agency relationship are the elements of consent and control. With respect to the element of control, defendant introduced at the trial a report of the inspection which indicated that the fieldman, who conducted the inspection, had contacted the Wolfes before making the inspection. However, during the trial, the fieldman could not specifically remember contacting the Wolfes but testified that it was his usual business practice to do so. Concerning the element of consent, the branch manager for plaintiff Transamerica testified that, in ordering inspections, Transamerica attempts to protect three people: the company, the agent, and the insured. In this sense, he testified that Transamerica acted on behalf of the plaintiffs Wolfe. However, during redirect examination, the branch manager also admitted that the fieldman was never employed or hired by the Wolfes.
We believe that the evidence is clearly insufficient as a matter of law to warrant the giving of instruction No. 23 and that the instruction was erroneous on this ground. Merely contacting an owner and obtaining permission to inspect his premises is not sufficient control to establish an agency relationship. Nor can one act on behalf of another where, as in this case, a fieldman is not hired by the Wolfes to conduct an inspection and the inspection is ordered primarily for the benefit of an insurance company.
However, we believe that there are several factors which, when taken together, necessitate the affirmance of the judgment of the District Court.
First, we note that plaintiffs’ grounds for objection to Instruction No. 23 appear to be different on appeal than they were at trial. Plaintiffs argue on appeal that the instruction is incomplete; it fails to require the jury to first establish an agency relationship before applying the instruction and it fails to define what constitutes an agency relationship. Plaintiffs’ objection at trial, however, was that the instruction was unsupported by the evidence. At the trial plaintiffs stated:
“Plaintiffs object ... on behalf of Transamerica particularly. Again, it’s an assumption that the evidence does not support, because it implies that Transamerica has a duty to somebody when they make an inspection which creates a legal obligation on the part of Transamerica, which the law does not recognize, and, as such, it is not a correct statement of the law and very prejudicial to Plaintiff Transamerica in this case.”
The objection that the instruction “is not a correct statement of the law” is not a sufficiently specific and sustainable objection. Rule 51, M.R.Civ.P. Where the ground of the objection is different, objections cannot be raised for the first time on appeal. Seder v. Kiewit Sons’ Co., supra; Pickett v. Kyger, supra; Kearns v. McIntyre Const. Co., supra.
Secondly, we note that plaintiffs Wolfe failed to specifically object to Instruction No. 23 at the trial level. Rather, the record discloses that counsel for plaintiff Transamerica made the only formal objection. Although the record is not entirely clear whether the trial court permitted plaintiffs to make their objections jointly or independently, we believe that a party has some responsibility to assert his objection at the trial level is he wishes to raise it on appeal.
Third, we also believe that, where a party considers an instruction incomplete, as is the case here, it has some responsibility to request and provide the trial court with an instruction that properly covers the situation. Patania v. Silverstone (1966), 3 Ariz. App. 424, 415 P.2d 139. Here, plaintiffs wish to assert error on the basis of an instruction being incomplete, yet no attempt or request was made to provide an instruction which covered the issue in question.
Finally, we believe that the verdict was supported by the evidence and that, if the case were tried again, the same verdict would be rendered. If the judgment is one which could be properly rendered consistent with the evidence and law of the case, error in instructions is not reversible.
“One test that has been frequently held determinative of the prejudicial character of error in instructions is the correctness of the result. If that is correct, the error is not reversible.” Westinghouse Electric Elevator Co. v. LaSalle Monroe Bldg. Corporation (1945), 326 Ill.App. 598, 63 N.E.2d 411, 416.
We hold, therefore, that there is no reversible error in the record and affirm the judgment of the District Court.
MR. JUSTICES DALY and SHEEHY, concur.
MR. JUSTICES SHEA, dissents and will file a written dissent later. | [
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MR. JUSTICE DALY
delivered the opinion of the court.
Petitioner filed a petition for writ of habeas corpus in this Court on February 14, 1979. This Court ordered the writ heard by the District court of the Fourth Judical District, County of Missoula, and the Honorable Robert M. Holter assumed jurisdiction for an evidentiary hearing. A hearing was held on June 6, 1979, and July 17, 1979. Findings of fact and conclusions of law denying the writ were filed October 30, 1979. These findings and conclusions have been appealed to this Court, and the matter has been accepted for decision on briefs.
Petitioner and a companion, one Leonard Doney, were arrested on January 18, 1972, eight years ago, and charged with four counts of robbery, all of which were allegedly committed during the early morning hours of January 18, 1972. After a high-speed chase, petitioner was arrested and, while in custody and sitting in the rear seat of a police car, was identified by one of the victims.
After trial and conviction, the conviction was appealed to this Court and submitted November 30, 1972, after oral argument. On February 20, 1973, a unanimous Court affirmed the judgment and conviction. State v. Spurlock (1973), 161 Mont. 388, 506 P.2d 842. Following are some excerpts of pretrial facts from the prior opinion of this Court:
“The record indicates that on January 28, 1972, an Information was filed in the district court charging each defendant with four counts of robbery upon four Missoula filling stations committed on January 18, 1972. D. R. Matthews, Esq., Missoula Public Defender, was appointed by the court as counsel and he represented both defendants in all stages of pretrial proceedings. Both defendants entered pleas of not guilty and trial was set for May 4, 1972. Bail was fixed in the amount of $15,000 (later reduced to $12,500) for defendant Spurlock and in the amount of $12,500 for defendant Doney. Neither defendant was able to post bail. “Defendant Doney requested a psychiatric examination and was admitted to the state hospital at Warm Springs on February 2, 1972, remaining there about thirty days. An examination was per formed and a report submitted to the court. “On March 13, 1972, defendant Spurlock filed an affidavit of disqualification of trial judge Hon. Emmet Glore, which was granted. The cause was transferred to the court of Hon. E. Gardner Brownlee. “On April 5, 1972, defendant Spurlock submitted motions for a psychiatric examination by a local psychiatrist and for separate counsel. Both motions were denied. Subsequent testimony by Spurlock’s wife indicated that he had been to Warm Springs for treatment and/or examination on some previous occasion and that he did not wish to return there. “On April 6, 1972, defendant Doney petitioned the court pro se for a writ of habeas corpus based on violation of his rights at a preliminary examination for probable cause, Judge Jack L. Green, sitting for Judge E. Gardner Brownlee, heard the petition on April 6, 1972, with petitioner present in court and represented by public defender D. R. Matthews, his attorney. After argument the writ was denied.
“On May 3, 1972, one day preceding the trial date, the defendants through their appointed counsel, D. R. Matthews, entered four motions requesting:
“1. Withdrawal of court appointed counsel.
“2. Separate trials.
“3. Separate counsel.
“4. A Continuance.
“The requested continuance was for the claimed purpose of allowing their counsel time to prepare their defense, and to obtain a psychiatric evaluation for defendant Spurlock. [Emphasis supplied.]
“The court denied all four motions. However, prior to trial on May 4, 1972, the motion for withdrawal of counsel was granted and Robert J. Campbell, Esq. was entered as counsel. In granting this motion, the court specifically questioned both defendants after making them aware that their other motions (including the motion for a continuance) would not be granted, as to whether they would still prefer to have Robert J. Campbell substituted as counsel replacing D. R. Matthews, both defendants stated they so pre ferred. The court then suggested that Matthews remain to participate in the defense and requested both defendants’ permission before Mr. Matthews was permitted to leave. Both defendants gave that permission.
“At the time the court was considering the request for substitution of counsel, Mr. Matthews stated: ‘They have told me absolutely nothing. They will not confide in me, there has been no communication at all.’
“In their appeal brief, defendants stated ‘Prior to trial the defendants remained in the Missoula County jail and sought private counsel as best they could.’ The record does not support this statement. It does not disclose that defendants or anyone acting in their behalf, contacted or were refused by any attorney prior to their contacting Mr. Campbell, who did take their case. It does not disclose that defendants were refused permission to contact any attorney while they were in jail. It does disclose that Mr. Campbell was contacted for the first time by Mrs. Spurlock at 4:15 p.m. on May 3, 1972, over three months after the arraignment of defendants and on the afternoon before the trial date.” State v. Spurlock, supra, 161 Mont. at 389-391, 506 P.2d at 842-843.
The following issues have been presented to this Court for review:
1. Whether the requirement of joint representation of petitioner and a codefendant over timely objection necessitates a reversal of petitioner’s conviction.
2. Whether petitioner was denied effective assistance of counsel prior to trial and, if so, whether such denial affected petitioner’s due process rights so as to necessitate a reversal of his conviction.
3. Whether petitioner was subjected to an impermissible showup subsequent to his arrest.
4. Whether petitioner was given inadequate notice of trial, was improperly required to go to trial jointly with his codefendant, and was improperly denied a continuance in his trial so as to necessitate a reversal of his conviction.
5. Whether the failure to provide petitioner with a transcript of proceedings and failure of the court reporter to file his notes with the clerk of court violate petitioner’s right of his conviction.
6. Whether the failure to provide petitioner with an opportunity to examine the presentence report and cross-examine any witnesses with respect thereto necessitates the vacation of petitioner’s sentence and removal for resentencing.
Issues 1, 2 and 4 were previously litigated in this Court on the argued appeal, State v. Spurlock, supra, and will not be reviewed a second time on appeal.
Issue 3 concerns the identification in the police vehicle on the night of the crime. Courts have universally held that a showup is not unlawfully suggestive where the confrontation was conducted shortly after the commission of the crime. In Stovall v. Denno (1967), 388 U.S. 293, 87 S.Ct. 1967, 18 L.Ed.2d 1199, the United States Supreme Court approved an identification showup where the defendant was brought to the victim’s hospital room shortly after the crime was committed. Similarly, where the defendant was immediately returned to the vicinity of the crime and placed in a patrol wagon and while he was inside the vehicle he was viewed by the complaining witnesses, one of whom specifically identified him as her attacker, the court held in Bates v. United States (1968), 132 App.D.C. 36, 405 F.2d 1104, that the defendant’s identification, which was introduced at the trial, was not the result of an unnecessarily suggestive confrontation and did not, therefore, deny him due process. See also 39 A.L.R.3d 791.
In regard to Issue 5, the matter of a free transcript, petitioner’s argument on this point seems to be that he was denied a trial transcript and hence, due process, since the court reporter’s notes were kept with the court reporter rather than the clerk of court. In fact, the reason he was denied a transcript is set out in the District Court’s Finding of Fact No. II as follows:
“. . . Until the filing of this petition, the petitioner had acted in concert with his codefendant, Leonard E. Doney, in attempting to get a free transcript, but until the present petition, neither the peti tioner nor Doney had alleged anything to warrant moving any court’s discretion to order a free transcript prepared, as evidence by an order of Judge Brownlee dated October 11, 1973, and filed in this cause and an order by Judge Russell Smith dated January 17, 1979, and entered in Federal District Court for the District of Montana, cause no. 2392.”
Whatever the legality or wisdom of court reporters keeping their notes, that practice did not deny petitioner a transcript, nor does the matter constitute any constitutional issue mandating any relief for petitioner.
Issue 6 claims error due to irregularities with respect to petitioner’s presentence report. Petitioner was convicted of four counts of robbery and was sentenced under the provisions of former section 95-1506, R.C.M.1947, providing for increased punishment based on prior convictions. He received a sentence of fifty years in the Montana State Prison. Petitioner now states he was prejudiced because he claims he did not have an opportunity to examine the presentence report prior to sentencing nor to cross-examine witnesses with respect to the report.
The principal point in connection with this issue is the fact that petitioner has not pointed to a single error or ambiguity in his presentence report. This Court has previously held that a convicted defendant has a due process guarantee against a sentence predicated on misinformation, but he cannot complain if the information in a presentence report is true. State v. Osborn (1976), 170 Mont. 480, 555 P.2d 509. That is clearly the case here. Unless petitioner can show something erroneous in the presentence report, he will not be granted a resentencing.
The findings of fact and conclusions of law of the District Court are affirmed and accepted; the writ of habeas corpus is dismissed.
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.
Defendant, Edmond Wilson Davison, was charged with the offenses of aggravated burglary and sexual intercourse without consent in the District Court of Flathead County. A verdict of guilty of each offense was returned by the jury. Defendant was sentenced to 15 years on each count plus an additional five years for use of a knife to be served consecutively for a total of 35 years. From the conviction and sentence, defendant appeals.
During the early morning hours of March 2, 1979, two men forced their way into a mobile home located near the city limits of Kalispell, Montana. Christine Decker and her three year old daughter were asleep in separate bedrooms of the mobile home at that time. Christine was awakened as the two men entered her bedroom. The room was dark and her head was immediately covered so that she could not see. She testified that a sharp instrument was held against her back and side, but no wounds were inflicted. She was then raped by her attacker and then by the accomplice. Her head was covered during the entire attack. After the attack the men asked her where she kept her money. She was then told to keep quiet and forced to lie under her bed as the two men retreated from the home. The daughter slept through the attack.
After the two men left Ms. Decker summoned the Kalispell City Police and law enforcement personnel arrived shortly thereafter. The victim was taken to a Kalispell hospital. The examining physician found evidence of recent sexual intercourse, but no prominent physical wounds.
Ms. Decker was never able to identify her attackers. She testified that she locked the doors before retiring the night of March 2, 1979. Sheriff’s deputies found evidence of forced entry into Ms. Decker’s home and evidence that her purse had been rifled, but no positive evidence indication who had been involved.
Law enforcement investigation ultimately led officers to Victor Gardner. Gardner confessed to the crimes and implicated defendant. On March 5, 1979, the defendant and his wife were arrested in Kalispell on an outstanding warrant that related to a bad check charge. Defendant was taken to the county jail for questioning.
Defendant was interrogated by deputies Christian and Lamb. The questioning concerned defendant’s involvement in the above-described rape. During the interrogation, which lasted two to three hours, defendant denied any involvement with the rape or the burglary. At one point during the questioning, defendant was told that if he attempted to leave, he would be knocked back in his chair. During the interrogation, Christian removed his jacket and briefly placed it over the defendant’s head for the stated reason of demonstrating to defendant how the victim had been assaulted. Defendant stated that Christian banged defendant’s head into the wall during this demonstration. Christian denied this. Later, during the questioning, Christian removed his service revolver from its holster, unloaded it in front of the defendant, and returned the revolver to its holster. According to Christian this was done to protect defendant, himself and Deputy Lamb, because Christian was concerned that defendant might attempt to take the revolver. Defendant testified that Christian threatened to strike him with the empty revolver. Christian denied making this, or any other threat.
According to Christian’s testimony at the suppression hearing, the defendant had been in a highly emotional state during the interrogation and the interrogation room was very warm. Defendant would not make a statement to Christian or Lamb. Defendant testified that he was told during the interrogation that if he did not cooperate with the officers they would do their best to get a 60-year sentence for defendant. Christian testified that he did not remember mentioning a possible 60-year sentence to the defendant, but Christian did remember that he did not make any threats.
Near the end of the interrogation, a tape recording of the confession of the codefendant, Victor Gardner, was played to defendant. At the conclusion of the interview, the defendant was led from the interrogation room. Defendant testified that Christian and Lamb had been “mad” at him and generally belligerent during the interrogation.
Before being taken to his cell, the defendant was confronted by Officer Hawk, and defendant asked Hawk if Gardner had in fact confessed. Hawk assured the defendant that Gardner had. Hawk suggested to the defendant that if he had a problem with Lamb and Christian that he (defendant) might prefer talking with Hawk. Defendant agreed to talk with Hawk, and at this time the defendant made a tape-recorded confession. The defendant was again given his “Miranda” rights prior to the confession.
Defendant’s confession matched Gardner’s version and the victim’s version of the crime. Gardner testified that the two men had broken into the mobile home armed with a knife, had raped the victim and rifled her purse. At the trial the defendant stated that he did not break into the victim’s home and that he had given his confession after hearing Gardner’s because he was afraid that “they were going to send me to prison for 60 years.”
The jury found defendant guilty as charged and the trial court judge sentenced him to 35 years at the Montana State Prison. Victor Gardner, the codefendant, was sentenced to a total of 8 years under a plea bargain arrangement.
Defendant advances three specifications of error:
1. Error in ruling that defendant’s confession was admissible.
2. Whether defendant’s right to trial was adversely affected by the imposition of a lesser sentence upon his codefendant?
3. Whether the enhancement of defendant’s sentence pursuant to section 46-18-221, MCA, constitutes a violation of due process or the proscription against double jeopardy?
Defendant contends that his confession was involuntary, and, as a consequence, inadmissible at his trial. Both the United States Supreme Court and this Court have considered the issue of involuntary confessions in a large number of cases. These cases make it clear that an involuntary confession may not be used against a defendant in a criminal trial. This rule is true whether the defendant was physically or mentally coerced into making the confession. Leyra v. Denno (1954), 347 U.S. 556, 74 S.Ct. 716, 98 L.Ed. 948.
An extensive rationale for this rule is presented in State v. Allies (1979), 186 Mont. 99, 606 P.2d 1043 at 1048-49. The purpose for excluding such evidence is partially because a coerced confession may be untrustworthy, but more importantly, such confessions violate the guarantee against self-incrimination as well as the right to due process of law. As the United States Supreme Court said: “The use of coerced confessions, whether true or false, is forbidden because the method used to extract them offends constitutional principles.” Lego v. Twomey (1972), 404 U.S. 477, 485, 92 S.Ct. 619, 624, 30 L.Ed.2d 618, 625. The courts will not condone the action taken by law enforcement authorities in securing a coerced confession. Spano v. New York (1959), 360 U.S. 315m 79 S.Ct. 1202, 3 L.Ed.2d 1265. In reviewing the voluntariness of confessions the emphasis is on whether the statement is a product of free choice or compulsion. This emphasis protects the individual’s right not to incriminate himself. Miranda v. Arizona (1966), 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694.
In Schneckloth v. Bustamonte (1973), 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed2d 854, the Supreme Court said:
“Rather, ‘voluntariness’ has reflected an accommodation of the complex of values implicated in police questioning of a suspect. At one end of the spectrum is the ackowledged need for police questioning as a tool for the effective enforcement of criminal laws. See Culombe v. Connecticut, supra, [367 U.S. 568] at 578-580, [81 S.Ct. 1860, 1865-1866, 6 L.Ed.2d 1037], Without such investigation, those who were innocent might be falsely accused, those who were guilty might wholly escape prosecution, and many crimes would go unsolved. In short, the security of all would be diminished. Haynes v. Washington, 373 U.S. 503, 515, 83 S.Ct. 1336, 1344, 10 L.Ed.2d 513]. At the other end of the spectrum is the set of values reflecting society’s deeply felt belief that the criminal law cannot be used as an instrument of unfairness, and that the possibility of unfair and even brutal police tactics poses a real serious threat to civilized notions of justice. ‘[I]n cases involving involuntary confessions, this court enforces the strongly felt attitude of our society that important human values are sacrificed where an agency of the government, in the course of securing a conviction wrings a confession out of an accused against his will.’ Blackburn v. Alabama, 361 U.S. 199, 206-207, [80 S.Ct. 274, 279-280, 4 L.Ed.2d 242]. See also Culombe v. Connecticut, supra, [367 U.S.] at 581-584, [81 S.Ct. 1860, 1867-1868], Chambers v. Florida, 309 U.S. 227, 235-238, [60 S.Ct. 472, 476-477, 84 L.Ed. 716].” 412 U.S. at 224-225, 93 S.Ct. at 2046.
The United States Supreme Court has said that the test to be applied in determining whether a particular confession is voluntary or involuntary, is as follows:
“Is the confession the product of an essentially free and unconstrained choice by its maker? If it is, if he has willed to confess, it may be used against him. If it is not, if his will had been overborne and his capacity for self-determination critically impaired, the use of his confession offends due process.” Culombe v. Connecticut (1961), 367 U.S. 568, 602, 81 S.Ct. 1860, 1879, 6 L.Ed.2d 1037.
If the defendant should contend that his confession was the product of coercion, then the burden is placed on the State to show that the defendant knowingly and intelligently waived his privilege against self-incrimination and his right to counsel. The State must prove voluntariness by a preponderance of the evidence. State v. Smith (1974), 164 Mont. 334, 338, 523 P.2d 1395, 1397.
The issue of voluntariness and admissibility is addressed in the first instance to the trial court’s discretion and depends upon the totality of the circumstances. Jackson v. Denno (1964), 378 U.S. 368, 84 S.Ct. 1774, 12 L.Ed.2d 908; State v. Lenon (1977), 174 Mont. 264, 570 P.2d 901; State v. White (1965), 146 Mont. 226, 405 P.2d 761. If there is substantial evidence to support the trial court’s finding, it must be affirmed. State v. Grimestad (1979), 183 Mont. 29, 598 P.2d 198.
In the present case the defendant points to several instances of police conduct which allegedly rendered the confession a product of coercion. The first of these is Christian’s action of briefly placing a coat over defendant’s head. According to the testimony, the coat was only left on the defendant’s head for a few seconds and then removed. Christian testified that this action was taken to demonstrate to the defendant an aspect of the rape that had been committed. Christian also unloaded his service revolver while the-defendant was being questioned. The explanation given for this action was “. . . that I thought it was best for my safety and his [defendant’s].” Despite defendant’s testimony to the contrary, Christian denied threatening to strike defendant with the revolver.
Defendant also contends that he was threatened with a sentence of 60 years if he did not cooperate. He did state that no promises were made to defendant. Deputy Hawk, who was just outside the room where the questioning took place and overheard portions of the interrogation, also testified that no threats or promises were made regarding a possible sentence in exchange for cooperation. Hawk and Christian did testify that “self-help” was discussed with the defendant. Hawk testified as follows:
“A. Well, it is on his conscience, if he wants to get it cleared up, if he needs some help with alcohol, if he needs some help with drugs, if he has a drug problem. These are things that he can only do for himself. But the place to start is to get this taken care of and get it out of the way so he can start fresh. He is not going to be able to help himself very well with this hanging over him. And so the emphasis is on self-help. ‘Maybe we can get you some.’ And then there is the thing as far as there were no threats made or promises made, ‘However, if you help us then it will go in the reports that you were cooperative, and if there is a question of “was this individual cooperating with the police, was he trying to help himself,” the answer would have to be yes.’ He was in my case. He was not in the other two detectives’ case. And I think they told him that.
“Q. That would be all the help you would give him was indicate whether he was cooperative or not? A. That is correct. If there is a question of attitude or that sort of thing, we can indicate that. There was no other promises or threats made, to my knowledge,”
Defendant also contends that the police used a ‘good cop-bad cop” technique during questioning, and that this technique is another indication of coercion. The defendant testified at the suppression hearing that Lamb and Christian appeared to be angry with the defendant when they could not get a confession, while Hawk “was real nice.” Hawk and Christian denied that the use of the “good cop-bad cop” technique was prearranged.
It must be noted that the defendant was advised of his “Miranda” rights on four occasions before he gave his confession. He was advised of his rights at his arrest, again when deputies Lamb and Christian began questioning him, again before his confession was taken, and again as his confession was being recorded. According to the testimony at the suppression hearing, the defendant never asked for an attorney and he never asserted his right to remain silent. At the time the confession was given the defendant was 20 years old, had a tenth grade education, had received a G.E.D. and had previous service with the United States Marine Corps.
The trial judge concluded that there was no coercion, physical brutality, or intimidation involved in securing the confession. He also concluded that, under the totality of the circumstances, the confession was voluntarily given.
The State has emphasized the fact that Lamb and Christian did not intend for their actions to be coercive. Also, Hawk and Christian deny that the “good cop-bad cop” technique was intentionally used.
The intention of the law enforcement officers is irrelevant to our inquiry. We are only concerned with whether the confession was coerced under the totality of the circumstances. In Miranda, supra, the United States Supreme Court acknowledged that certain techniques used by police questioners, such as the “good cop-bad cop”, can take “. . . a heavy toll on liberty and trade on the weakness of individuals.” 384 U.S. at 455, 86 S.Ct. at 1618. On the other hand, this technique, by itself, does not render a confession involuntary. State v. Allies, 186 Mont. 99, 606 P.2d at 1050. In the present case, the interrogation was not overly long. The trial court found that the interrogation lasted approximately three hours. The “nice cop” did not play on the defendant’s sympathies or subject him to long, continuous questioning such as occurred in Spano v. New York, supra.
The timing of the defendant’s confession is particularly pertinent to this inquiry. At the end of the questioning by Christian and Lamb the confession of Victor Gardner was played for the defendant. Shortly thereafter, the defendant asked Hawk whether Gardner had indeed confessed. When Hawk assured the defendant that Gardner had confessed the defendant gave his own confession. In other words, it appears that the knowledge of Gardner’s confession triggered the defendant’s confession. In addition, the defendant was twice given his “Miranda” warning by Hawk shortly before the confession was made. This chain of events would severely blunt or nullify the charge that the confession was the product of coercive tactics employed prior to the playing of Gardner’s confession.
The defendant also alleges the coercive effect of the threat that he could receive up to sixty years in prison if he failed to cooperate. The District Court found that the defendant was advised of' the maximum penalty and that it could be imposed if he did not cooperate. This finding is supported by substantial, credible evidence and must be accepted as true. In Territory v. Underwood (1888), 8 Mont. 131, 135, 19 P. 398, 400, this Court reversed a conviction where a confession was obtained by a promise of favor and influence. In Underwood, however, it is apparent that the confession was directly prompted by promises that the charges would be dropped or the punishment reduced. The contrary appears in the present case. At the suppression hearing the defendant was questioned by the Court concerning the “Miranda” warnings, as follows:
“Q. You understood what they meant, didn’t you? A. Yes sir.
“Q. But you chose not to ask for a lawyer? A. No sir.
“Q. You chose not to remain silent either? A. Yes sir.
“Q. You decided to spill it, right? A. I decided to cooperate with them, yes sir.
“Q. What made you decide finally to cooperate? A. After thinking it all over, sir, after what they told me and after what Deputy Hawk told me and after listening to what Vic said, I just thought I better — They said they already had me guilty.”
Given all of the factors: the defendant’s age and education, the length of the interrogation, the number of times the “Miranda” warning was given, the defendant’s acknowledgment that he understood these warnings, and most important, the triggering effect of Gardner’s confession, it cannot be said that the trial court abused its discretion in finding the confession voluntary. We hold that the totality of the circumstances supports the District Court’s finding that the confession was freely given. As a consequence, it was not error for the confession to be allowed into evidence.
The defendant next contends that his 35-year sentence, in contrast to Victor Gardner’s sentence of eight years under a plea bargain agreement, constitutes a deprivation of defendant’s right to trial under Art.II, § 26, 1972 Montana Constitution, and the Sixth Amendment of the United States Constitution. Victor Gardner confessed to the charges of aggravated burglary and sexual intercourse without consent. Pursuant to a plea bargain Gardner pleaded guilty to the rape charge and received an eight-year sentence. After trial and a jury verdict of guilty, the defendant received a 35-year sentence.
According to the defendant the disparity in the sentences indicates that he is being punished for insisting upon a trial. Defend ant states in his brief: “. . . the Defendant and all future criminal defendants will be put on notice that the penalty for the exercise of the fundamental right to a trial by jury is harsh.”
The defendant received less than the maximum 70-year sentence that could have been imposed as a result of being convicted of sexual intercourse without consent (20 years) and aggravated burglary (40 years). Sections 45-5-503(2) and 45-6-204(3), MCA. Section 46-18-221, MCA, allows a maximum, additional 10-year sentence for offenses committed with a dangerous weapon. There is no rule that a disparity of sentences given to codefendants similarly situated is improper. As was said in People v. Bruebaker (1975), 189 Colo. 219, 539 P.2d 1277, 1279:
“Due to the individualized nature of sentencing, there is no rule that confederates in crime must receive equal sentences, nor that failure to impose equal sentences violates equal protection of the law . . .”
See also State v. Butler (1966), 148 Mont. 46, 417 P.2d 100.
It is defendant’s contention that he was punished for going to trial. This Court has said that a sentence may not be augmented because a defendant has insisted on his privilege against self-incrimination. Matter of Jones (1978), 176 Mont. 412, 578 P.2d 1150, 1154. The same rationale applies to the constitutional right to a trial. The correct analysis of this problem is stated in United States v. Peskin (7th Cir. 1975), 527 F.2d 71, at 87:
“A sentence which reflects punishment for a defendant’s availing himself of his right to trial will be set aside, United States v. Wiley, 278 f.2d 500 (7th Cir. 1960), but a disparity between a sentence imposed on a defendant who pleads guilty and on another who is convicted after trial is not, standing alone, enough to establish that the latter has been punished for exercising a constitutional right. United States v. Wilson, 506 F.2d 1252, 1259-60 (7th Cir. 1974).
“The trial judge commented at the time of sentencing on factors which he felt spelled out greater culpability for Mr. Peskin than his codefendants. We have no reason to find an abuse of discretion.”
In other words, it is not to be presumed that a disparity in sentences imposed indicates increased punishment for exercising the right to a trial. A defendant must show abuse of discretion. In the present case, the sentencing court enumerated several factors upon which it based the sentence. These factors include the nature of the crime committed, the fact that defendant’s past behavior had been characterized by violent episodes, and the fact that society needed to be protected from the defendant. This Court has said that a sentence within the maximum authorized by statute is generally not cruel and unusual punishment. State v. Karathanos (1972), 158 Mont. 461, 468, 493 P.2d 326. This Court has also said that the extent of punishment is vested in the sound discretion of the trial court. Petition of Amor (1963), 143 Mont.305, 389 P.2d 54. We note that the equitability of a sentence, as oppposed to its legality, is a matter for the Sentence Review Board. State v. Metz (1979), 184 Mont. 533, 604 P.2d 102.
In the present case, the sentence was well within the statutory maximum. The judge outlined his reasons for the sentence and these reasons do not include the defendant’s decision to go to trial. The reasons given support the severity of the sentence given. There was no showing of abuse of discretion, consequently, the defendant was not denied his right to a trial.
Pursuant to section 46-18-221, MCA, the defendant was sentenced to five additional years for the commission of rape with a dangerous weapon. Because this statutory section was not recited in the charging document, defendant claims that he was sentenced for a crime with which he was not charged.
The Sixth Amendment of the United States Constitution states: “In all criminal prosecutions, the accused shall enjoy the right... to be informed of the nature and cause of the accusation.” It is well accepted that a defendant must be fairly apprised of the crime he is being charged with and given a chance to be heard. Cole v. Arkansas (1948), 333 U.S. 196, 201, 68 S.Ct. 514, 92 L.Ed. 644; State v. Holt (1948), 121 Mont. 459, 194 P.2d 651. As a consequence, the charging document must charge the crime with cer tainty and precision. State v. Hem (1923), 69 Mont. 57, 60, 220 P.80. Section 46-11-401, MCA, is a statutory implementation of these general principles and this statute outlines the necessary elements to be included in a charging document.
Section 46-18-221, MCA, imposes an additional mandatory sentence upon a defendant found guilty of an offense while knowingly using a dangerous weapon. (In this case, the defendant used a knife.) The language of the statute clearly indicates that it is only intended to provide for an enhanced penalty once the defendant has been found guilty of an underlying offense. In addition, this statute is found in the chapter of the Criminal Procedure Code which deals with the sentencing of Criminal defendants. We hold that the statute does not provide for a separate, substantive offense. For cases from other jurisdictions which have construed similar statutes as being sentencing rather than criminal statutes see: State v. Petrich (1978), 21 Wash. App. 100, 583 P.2d 674; Brown v. District Court (Colo.1977), 569 P.2d 1390, 1391; and In re Culbreth (1976), 17 Cal.3d 330, 130 Cal.Rptr. 719, 721, 551 P.2d 23, 25. The instant case does not present a situation where it is uncertain whether the legislature intended to create distinct offenses such as in Whitton v. State (Alaska 1970), 479 P.2d 302, 305. Section 46-18-221, MCA, only applies once a defendant has been found guilty of the underlying offense.
The Utah Supreme Court addressed a similar problem in State v. Angus (Utah 1978), 581 P.2d 992. The Utah Court said:
“We have no disagreement with the proposition that fairness and due process of law require that the information against him be sufficient to clearly state the charge and bring him within the operation of the statutory penalty therefor. But his argument that the information must specifically set forth that the enhancement of penalty would be imposed if he was convicted is without merit. The punishment for a crime is not and has never been considered a part of the pleading charging a crime. The information is sufficient if it alleges either (1) that the defendant is being charged under the enhancement statute, or (2) that a firearm was used in the commis sion of the offense charged in the information. The trial by the jury is to determine the guilt or innocence of the defendant. After conviction, the penalty to be imposed is an entirely separate proposition to be determined by the court as a matter of law on the basis of the penalty prescribed by the statutes.” 581 P.2d at 995.
In Angus the information specifically alleged that the offense was committed by use of a firearm and the Court found no denial of due process.
In the present case the charging document mentions that the defendant was armed with a knife while committing the crimes with which he was charged. The jury found the defendant guilty of aggravated burglary, which is defined, in part, as committing burglary while being armed with a weapon. Section 45-6-20(2)(a), MCA. The jury was instructed as to this statute. As a result, the defendant was not denied due process for lack of notice or lack of hearing.
The defendant next contends that the additional five years imposed pursuant to section 46-18-221, MCA, subjected him to multiple punishments in violation of the double jeopardy clauses of the federal and state constitutions. In North Carolina v. Pearce (1969), 395 U.S. 711, 717, 89 S.Ct. 2072, 2076, 23 L.Ed.2d 656, the Supreme Court said that the double jeopardy clause “. . . Protects against multiple punishments for the same offense.” It must be noted, however, that Pearce was concerned with whether the proscription against double jeopardy was violated when punishment already exacted for an offense was not fully credited in imposing sentence upon a new conviction for the same offense. Pearce did not deal with whether double jeopardy applies when an enhancing statute is used to increase the punishment for an underlying offense. In Simpson v. United States (1978), 435 U.S. 6, 98 S.Ct. 909, 55 L.Ed.2d 70, the Supreme Court was presented with this constitutional issue, but the case was decided on other grounds. The Supreme Court looked to legislative intent and found that Congress did not intend for the enhancement statute to be used in sentencing defendants convicted of certain crimes. 435 U.S. at 12-13, 98 S.Ct. at 913. We find that there is no such intent expressed by section 46-18-221, MCA, which applies to “any offense.”
In State v. Foster (1979), 91 Wash.2d 466, 589 P.2d 789, the Court considered a double jeopardy claim under a similar enhancement statute and said:
“. . . appellant contends that application of the firearm enhancement statute is violative of his rights under the double jeopardy clause of the fifth amendment to the United States Constitution. To support this contention, appellant cites North Carolina v. Pearce, 395 U.S. 711, 717, 89 S.Ct. 2072, 2076, 23-L.Ed.2d 656 (1969), in which the United States Supreme Court stated that the Fifth Amendment ‘protects against multiple punishments for the same offense.’ Neither Pearce nor the cases cited within it to support this cited proposition are apposite to the challenged statutory scheme which provides for enhanced penalty based on the existence of an additional factor — the use of a firearm. In a recent case which presented a double jeopardy challenge to a federal statute imposing an additional penalty for the use of a firearm while committing a felony, the United States Supreme Court expressly declined to reach the constitutional issue. See Simpson v. United States, 435 U.S. 6, 98 S.Ct. 909, 55 L.Ed.2d 70 (1978). We are aware of no authority which supports appellant’s claim of double jeopardy for this type of enhanced penalty scheme.” 589 P.2d at 797.
We apply the same reasoning to the present case. The statute involved is merely an enhancing statute. It does not create or penalize the defendant for a separate offense.
The defendant places a great deal of reliance on Whitton v. State, supra. In Whitton the Alaska court felt that the legislature may have intended for the enhancement statute to be a separate distinct offense. They went on to hold “... that Alaska’s constitutional prohibition against double jeopardy prevents one from receiving multiple prison sentences for the same offense.” 479 P.2d at 310.
This Court need not reach the question posed in Whitton, i.e., may a state impose multiple prison sentences for the same offense. In Whitton, the court first decided that the enhancement statute might have been intended as a distinct, separate offense, with an attendant punishment. In the present case, the enhancement statute does not define a separate, distinct offense. Consequently, there is not, under section 46-18-221, MCA, the imposition of a multiple prison sentence arising from a single criminal offense. Rather, this statute mandates an increased prison sentence for a single, specific crime if a dangerous weapon is used by the defendant. Therefore, no double jeopardy violation is involved.
Affirmed.
MR. JUSTICES DALY, HARRISON and SHEEHY., concur.
MR. JUSTICE SHEA, will file a concurring opinion at a later date. | [
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JUSTICE RICE
delivered the Opinion of the Court.
¶1 Plaintiffs Lyle LeRoy Tvedt and L. L. Tvedt Insurance, Inc. (Tvedt), appeal the May 23, 2002, opinion and order of the Fourth Judicial District Court, Missoula County, wherein the court granted summary judgment in favor of Farmers Group of Companies (Farmers) on his claims for breach of contract, wrongful discharge, and indemnification of employment expenses. We affirm in part and reverse in part.
¶2 Tvedt presents the following issues on appeal:
¶3 1. Did the District Court err in granting summary judgment to Farmers on Tvedt’s two breach of contract claims: (a) the implied covenant of good faith and fair dealing; and (b) waiver of the “at will” termination clause?
¶4 2. Did the District Court err in granting summary judgment to Farmers on Tvedt’s wrongful termination claim?
¶5 3. Did the District Court err in dismissing Tvedt’s claims for business expense indemnification?
FACTUAL AND PROCEDURAL BACKGROUND
¶6 Tvedt commenced working as an insurance agent for Farmers in 1978. Eight years later, on December 1, 1986, when Farmers offered Tvedt the position of District Manager in Missoula, Tvedt entered into a contract with Farmers called the District Manager’s Appointment Agreement (Manager’s Agreement). The Manager’s Agreement appointed Tvedt as “District Manager.”
¶7 On February 10, 2000, after serving thirteen years as District Manager, Tvedt formed a corporation called L. L. Tvedt Insurance, Inc., which, according to his affidavit, was for the purpose of facilitating operation of an incorporated insurance agency for tax purposes.
¶8 On January 8,2001, a second agreement, called Corporate District Manager Appointment Agreement (Corporate Agreement), was entered into, this time between L. L. Tvedt Insurance, Inc., and Farmers. The Corporate Agreement appointed L. L. Tvedt Insurance Agency, Inc., as “District Manager,” and Tvedt, individually, as “Supervising District Manager.”
¶9 The Manager’s Agreement and the Corporate Agreement (collectively, Agreements) contained several mutual clauses applicable to this appeal. Both agreements contained an “at will” termination clause which permitted cancellation of the agreement by either party without cause on thirty days’ written notice. Further, both agreements contained a “contract value” clause which established a liquidated value of the contract based upon years of service with the company. The Corporate Agreement provided that, in the event Farmers terminated the agreement, Farmers would pay the liquidated sum to the terminated party. The Manager’s Agreement also required a compensation payment by Farmers upon termination, but provided that an amount less than the “contract value” could be negotiated by the parties. Both agreements contained an “independent contractor” clause which stated that nothing in the agreement was intended to create an employer-employee relationship, but, rather, that district managers worked in the capacity of an independent contractor.
¶10 In 1996, Farmers published District Manager Performance Standards and Expectations (Standards) which set forth standards for district managers, including Tvedt. In 1998, Farmers published a second edition of the Standards which included, inter alia: (1) a clause indicating the Standards would be applied to determine renewability of district managers’ contracts, and (2) a clause indicating the Standards in no way modified Farmers’ right to terminate on thirty days’ notice.
¶11 Tvedt has maintained throughout the dispute with Farmers that, as District Manager, he met and often exceeded the criteria delineated in the Standards. Tvedt asserted that in the year 2000, his production of insurance sales exceeded the production quotas, as follows: 163 percent of life insurance, 128.4 percent of automobile insurance, 104.4 percent of commercial insurance, and 109.1 percent of fire insurance. In the first three months of 2001, Tvedt alleged similarly high percentages.
¶ 12 Nonetheless, on March 6,2001, Tvedt received the first of a series of letters from Bruce H. Gordon, Division Marketing Manager for Farmers, criticizing his performance as District Manager. Shortly thereafter, on May 16, 2001, Tvedt received a termination letter from David Dela Torre, State Executive Director for Farmers, giving him thirty days’ written notice of termination of employment, without cause, effective June 15, 2001. Enclosed with the termination letter was a Notice of Termination of Appointment Agreement(s) and Agencies which stated:
Please be advised that any and all appointment agreements and any and all agencies existing between you and the undersigned, and any and all appointments, whether as District Manager or as District Agency of and for the undersigned, are hereby terminated pursuant to the terms of said agreement(s); said termination to be effective as of the termination date shown above [June 15, 2001] without further notice.
On June 28, 2001, Farmers issued, at Tvedt’s request, another termination letter along with another Notice of Termination of Appointment Agreement(s) and Agencies, which extended the effective termination date to June 30, 2001.
¶13 Pursuant to their agreements, Farmers calculated Tvedt’s “contract value” to be $313,225.00 on the basis that Tvedt, at the time of termination, had worked fourteen years, seven months for Farmers. On August 13, 2001, Farmers issued Tvedt a check representing the first of four equal “contract value” installment payments. Although the record makes reference to further payments, the total amount which has been paid to Tvedt is not specified therein.
¶14 On December 12, 2001, Tvedt brought a three-count complaint against Farmers for breach of contract, wrongful termination, and indemnification of expenses. Tvedt alleged Farmers had breached the covenant of good faith and fair dealing, had waived the “at will” clauses in the Agreements by its actions, and had erroneously characterized him as an “independent contractor” rather than an “employee.” Claiming employee status, Tvedt sought relief under Montana’s Wrongful Discharge from Employment Act (WDEA), set forth in § 39-2-901, et seq., MCA.
¶15 On F ebruary 13,2002, Farmers moved for summary judgment. On May 8,2002, while its motion for summary judgment was still pending, Farmers filed an answer and contingent counterclaim whereby the counterclaim would not be pursued if the District Corut dismissed Tvedt’s complaint pursuant to Farmer’s outstanding motion for summary judgment. Farmers’ counterclaim stated that, in the event the District Corut found that Tvedt was an “employee” of Farmers, then Farmers’ obligations to pay Tvedt his “contract value” should cease, and all payments to Tvedt should be returned.
¶16 On May 23,2002, the District Corut entered its opinion and order granting Farmers’ motion for summary judgment on all claims. Tvedt appeals.
STANDARD OF REVIEW
¶17 This Court’s standard of review in appeals from summary judgment rulings is de novo. Meyer v. Creative Nail Design, Inc., 1999 MT 74, ¶ 13, 294 Mont. 46, ¶ 13, 975 P.2d 1264, ¶ 13. See also Treichel v. State Farm Mut. Auto. Ins. Co. (1997), 280 Mont. 443, 446, 930 P.2d 661, 663 (citing Motarie v. Northern Mont. Joint Refuse Disposal Dist. (1995), 274 Mont. 239, 242, 907 P.2d 154, 156). This Court reviews a summary judgment order entered pursuant to Rule 56, M.R.Civ.P., based on the same criteria applied by the district court. Meyer, ¶ 13; Treichel, 280 Mont. at 446, 930 P.2d at 663.
¶18 In proving that summary judgment is appropriate:
[t]he movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove, by more than mere denial and speculation, that a genuine issue does exist. Having determined 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. [This Court] review[s] the legal determinations made by a district court as to whether the court erred.
Bruner v. Yellowstone County (1995), 272 Mont. 261, 264-65, 900 P.2d 901, 903 (citations omitted). In order to be granted summary judgment, the “moving party has the burden of showing a complete absence of any genuine issue as to all facts considered material in light of the substantive principles that entitle the moving party to judgment as a matter of law and all reasonable inferences are to be drawn in favor of the party opposing summary judgment.” Meyer, ¶ 15 (citing Kolar v. Bergo (1996), 280 Mont. 262, 266, 929 P.2d 867, 869).
DISCUSSION
Issue 1
¶19 Did the District Court err in granting summary judgment to Farmers on Tvedt’s two breach of contract claims: (a) the implied covenant of good faith and fair dealing, and (b) waiver of the “at will” termination clause?
¶20 Tvedt alleges that Farmers breached both Agreements by terminating the contracts without good cause and with inadequate notice, constituting a breach of the covenant of good faith and fair dealing implicit in both Agreements. We first address Tvedt’s assertion that Farmers breached the Agreements on grounds of inadequate notice. Tvedt asserts that he received the first notice of termination on May 16,2001, with an effective date of June 15,2001, but Farmers did not follow through on that termination. By June 28, 2001, Tvedt contends he was still district manager. On June 28, 2001, Farmers sent Tvedt another letter and notice of termination with an effective date of June 30,2001. This, according to Tvedt, amounted to a two-day notice of termination which was contrary to the thirty-day notice provision, thus constituting a breach of contract. Farmers asserts that it voluntarily extended the termination notice for fifteen days from June 15th to June 30th at Tvedt’s request. In a letter from Farmers to Tvedt dated June 28, 2001, Farmers wrote:
Mr. Tvedt: Please be advised on May 16, 2001, we gave you a notice of termination to be effective June 15, 2001. This termination date has been extended 15 days after further discussion with you for personal reasons effective June 30, 2001
¶21 The record reflects that the District Court made specific inquiry at the summary judgment hearing regarding the reason the termination date was extended from June 15, 2001, to June 30, 2001:
Court: And ... this was at his request the additional 15 days be given?
Counsel: Yes ... that’s when he wanted to be terminated. I mean he says let’s make it effective that day. Instead of two weeks ago, let’s make it effective the end of the month.
Court: And Mr. Tvedt’s affidavit doesn’t dispute that.
Counsel: No.
Thus, the District Court did not err in concluding no breach occurred based on notice. The fact Tvedt was granted an additional fifteen days before his position would terminate did not constitute inadequate notice under the terms of the Agreements.
Implied Covenant of Good Faith and Fair Dealing
¶22 Tvedt asserts the District Court erred in concluding the “at will” termination clauses precluded a finding that Farmers breached the implied covenant of good faith and fair dealing. Tvedt further asserts the District Court erred in disregarding substantial evidence that Farmers used discretion conferred on it by the Agreements in an unreasonable manner to act dishonestly or outside accepted commercial practices, contrary to the mandates of the implied covenant of good faith and fair dealing, which deprived him of the benefit of the contracts.
¶23 Farmers counters that it did not exercise discretion in terminating Tvedt, but rather a a right. Therefore, Farmers contends it did not breach the covenant of good faith and fair dealing. Farmers alleges that, according to the “at will” termination provisions, it was at liberty to terminate Tvedt on thirty days’ notice, with or without cause. Furthermore, Farmers argues that according to the language of the Agreements, it did not need a reason to terminate Tvedt, and, by signing the Agreements, Tvedt conceded as much.
¶24 In its order granting Farmers’ motion for summary judgment, the District Court found no breach of the implied covenant of good faith and fair dealing with respect to either agreement, setting forth several relevant standards recognized by this Court for contract interpretation:
We must interpret the intent of parties to a contract from only the contract when the terms are unambiguous. See Habets v. Swanson, 2000 MT 367, ¶ 13, 303 Mont. 410, ¶ 13, 16 P.3d 1035, ¶ 13. “An ambiguity exists when the contract taken as a whole in its wording or phraseology is reasonably subject to two different interpretations.” Wray v. State Compensation Ins. Fund (1994), 266 Mont. 219, 223, 879 P.2d 725, 121 (quoting Morning Star Enterprises v. R. H. Grover, Inc. (1991), 274 Mont. 105, 111, 805 P.2d 553, 557). Whether a contract is ambiguous is a question of law that a court must decide. See Carelli v. Hall (1996), 279 Mont. 202, 209, 926 P.2d 756, 761.
¶25 With these provisions in mind, the District Court then examined the “at will” provisions of both the Manager’s and the Corporate Agreements. The District Court found no ambiguity in the “at will” provision of the Manager’s Agreement, which stated “[t]his Agreement ... may be cancelled without cause by either the District Manager or the Companies on 30 days written notice ...,” or the Corporate Agreement, which stated, “[t]his Agreement may be canceled with or without cause by either the District Manager Agency or the Companies on thirty 30 days written notice.”
¶26 Tvedt argues, however, that even though the Agreements contained this language, the covenant of good faith and fair dealing is not negated by the “at will” termination provisions. He contends that where, as alleged here, an employer uses discretion conferred by contract to act dishonestly or outside accepted commercial practices to deprive an employee of the benefit of the contract, the covenant of good faith and fair dealing is breached despite the existence of an “at will” provision.
¶27 This argument relies on the fifth prong of the framework for breach of implied covenant claims as set forth in Weldon v. Montana Bank (1994), 268 Mont. 88, 885 P.2d 511:
(1) every contract contains an implied covenant of good faith and fair dealing; (2) a breach of the covenant is a breach of the contract; (3) a breach of an express term of the contract is not a prerequisite to a breach of the implied covenant; (4) the conduct required by the implied covenant is honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade; and (5) when one party uses discretion conferred by the contract to act dishonestly or to act outside of accepted commercial practices to deprive the other party of the benefit of the contract, the contract is breached.
Weldon, 268 Mont. at 94, 885 P.2d at 515 (emphasis added). In support of their respective positions, both parties cite Weldon for the proposition that, in the absence of contract-conferred discretion, it is questionable whether a breach of the covenant occurs:
Without some attempt by one party to “[use] discretion conferred by the contract to act dishonestly or to act outside the accepted commercial practices to deprive the other party of the benefit of the contract,” it is questionable whether any breach of the covenant occurred, even if the conduct amounts to breaches of other common law obligations.
Weldon, 268 Mont. at 95, 885 P.2d at 515 (quoting Shupak v. New York Life Ins. Co. (D. Mont. 1991), 780 F. Supp. 1328, 1342 (alteration in original)(citing Story v. City of Bozeman (1990), 242 Mont. 436, 450, 791 P.2d 767, 775)). Tvedt contends Farmers’ general discretion to terminate the Agreements was subject to the implied covenant of good faith and fair dealing. Farmers, however, contends the Agreements conferred no discretion, and that, according to express language contained therein, it could terminate on a thirty days’ notice, with or without cause.
¶28 The holdings in several decisions of this Court support Farmers’ position. In Farris v. Hutchinson (1992), 254 Mont. 334, 838 P.2d 374, where an employer did not renew an employee’s one-year employment contract pursuant to a non-renewal provision of the contract, we held that an implied covenant claim could not be sustained because the employer had terminated the employee, without cause, under an express provision of the contract. Farris, 254 Mont. at 338, 838 P.2d at 376. Similarly, in Prout v. Sears, Roebuck & Co. (1989), 236 Mont. 152, 772 P.2d 288, and Stark v. Circle K Corp. (1988), 230 Mont. 468, 751 P.2d 162, where at-will employees had signed written agreements permitting termination with or without cause, we gave effect to the written agreements by permitting the employer to terminate without cause thereunder. Prout, 236 Mont. at 158, 772 P.2d at 292; Stark, 230 Mont. at 476, 751 P.2d at 167.
¶29 Prout and Stark addressed terminations which were purportedly “with cause,” in contrast to the “without cause” termination at issue here. Nonetheless, “[i]n Prout we gave effect to the written agreements and said the employer could fire without cause under the agreements, but that if it asserted the termination was for cause, the employee must have an opportunity to prove that the cause stated was false.” Farris, 254 Mont. at 339, 838 P.2d at 377. Likewise, in Stark, we allowed the jury to decide, given the employer’s termination based upon cause, “whether or not the employer had cause and had followed its own policies.” Farris, 254 Mont. at 339, 838 P.2d at 377. However, “[t]he eventual determination of these factual issues in Stark and Prout did not and would not contradict the express wording of the respective agreements,” which would have allowed termination without cause, and we limited the application of the implied covenant to “the interpretation of the words ‘with cause’ and the discretion of the employer thereunder.” Farris, 254 Mont. at 339, 838 P.2d at 377. Thus, in both cases, the implied covenant addressed the interpretation of the words “with cause” only, and not a factual situation where, as here, the employer gave no stated cause for the termination pursuant to an express contractual provision.
¶30 Like the employers in Farris, Prout, and Stark, Farmers not only had included an express “at will” termination clause in both Agreements, but also had further stated in the Standai'ds that “[t]his program in no way modifies the Companies’ right to terminate on 30 days’ notice, with or without cause, anytime during the measurement cycle.” Tvedt, like the employees in each of these cases, was aware that the potential existed for termination upon thirty days’ notice.
¶31 As we have stated, “[a]n agreement made in writing cannot be altered except in writing or by an executed oral agreement, and not otherwise.” Farris, 254 Mont. at 338, 838 P.2d at 376. In Farris, we quoted with approval the Supreme Court of the State of California in its determination of how the implied covenant of good faith and fair dealing should be applied:
We are aware of no reported case in which a court has held the covenant of good faith may be read to prohibit a party from doing that which is expressly permitted by an agreement. On the contrary, as a general matter, implied terms should never be read to vary express terms. “The general rule [regarding the covenant of good faith] is plainly subject to the exception that the parties may, by express provisions of the contract, grant the right to engage in the very acts and conduct which would otherwise have been forbidden by an implied covenant of good faith and fair dealing.... [¶] This is in accord with the general principle that, in interpreting a contract ‘an implication ... should not be made when the contrary is indicated in clear and express words.’ Corbin, Contracts, § 564, p. 298 (1960) .... [¶] As to acts and conduct authorized by the express provisions of the contract, no covenant of good faith and fair dealing can be implied which forbids such acts and conduct. And if defendants were given the right to do what they did by the express provisions of the contract there can be no breach.”
Farris, 254 Mont. at 338-39, 838 P.2d at 376-77 (citing Carma Developers Inc. v. Marathon Development California, Inc. (1992), 6 Cal.Rptr.2d 467, 485, 826 P.2d 710, 728 (internal citations omitted). Thus, under Montana law, implied contractual provisions will not be applied where, as here, express provisions govern. We therefore conclude that the District Court did not err in granting Farmers’ motion for summary judgment on the basis Farmers did not breach the covenant of good faith and fair dealing.
Waiver of “At Will” Termination Clause
¶32 Tvedt’s next breach of contract claim asserts that Farmers’ conduct waived any “at will” provisions in the Agreements. Specifically, Tvedt argues that, despite the “at will” termination language in the appointment agreements and a reference to the “at will” termination in the Standards, Farmers’ express declarations and conduct reasonably induced a belief that it was waiving its discretion to terminate at will. In support of his argument, Tvedt cites the following language from the Standards:
[individual District Managers must have a clear understanding of what is expected of them .... To determine whether the District Manager’s contract is to be maintained or not, current year’s ... results will be evaluated using the following General Component Criteria ... [and] These are the standards which all District Managers are expected to meet as a condition of continuing their District Managers’ Appointment Agreement.
Tvedt also states that language contained in correspondence from Bruce Gordon, Division Marketing Manager, also induced the belief that Farmers had waived its discretion to terminate “at will”:
In 2001, you must achieve your net gain requirement of 19 full time agents by yearend. Failure to achieve this performance standard may result in the termination of your District Manager Appointment Agreement.
¶33 “[W]aiver is a voluntary and intentional relinquishment of a known right, claim or privilege which may be proved by express declarations or by a course of acts and conduct so as to induce the belief that the intention and purpose was to waive.” Idaho Asphalt Supply v. DOT, 1999 MT 291, ¶ 19, 297 Mont. 66, ¶ 19, 991 P.2d 434, ¶ 19 (citing Kelly v. Lovejoy (1977), 172 Mont. 516, 520, 565 P.2d 321, 324). Waiver must be “manifested in some unequivocal manner.” Idaho Asphalt Supply, ¶ 23. “Whether there has been such acquiescence as to defeat the enforcement of a valid restriction depends upon the circumstances of each case and the character and materiality of the permitted breach.” Idaho Asphalt Supply, ¶ 23 (citing Kelly, 172 Mont. at 520, 565 P.2d at 324).
¶ 34 The District Court found that, while the Standards stated they would be used “to determine whether the District Manager’s contract is to be maintained or not” and correspondence from Farmers to Tvedt urged him to meet them, the Standards also contained a clause stating: “This program in no way modifies the Companies’ right to terminate on 30-days notice, with or without cause, anytime during the measurement cycle.”
¶35 Thus, in moving for summary judgment, Farmers established that it had reaffirmed its right to exercise the “at will” termination provision by reiterating the provision in the Standards. At that point, the burden shifted to Tvedt to demonstrate that Farmers unequivocally, intentionally, and voluntarily relinquished the right to enforce the “at will” provisions in the Agreements. However, Tvedt did not rebut Farmers’ evidence, and thus failed to meet his burden. Farmers’ effort to underscore its right, rather than relinquish it, is “antithetical to a waiver.” Idaho Asphalt Supply, ¶ 28. Thus, summary judgment in favor of Farmers on the issue of waiver is appropriate as a matter of law.
Issue 2
¶36 Did the District Court err in granting summary judgment to Farmers on Tvedt’s wrongful termination claim?
¶37 Tvedt asserts the District Court erred in granting summary judgment against his wrongful discharge claim because genuine issues of material fact exist regarding his employment status and his right to seek damages pursuant to the WDEA. The Manager’s Agreement contained the following clause indicating Farmers’ intention that district managers hold “independent contractor” status:
The time to be expended by the District Manager is solely within his/her discretion, and the persons to be solicited and the area within the district involved wherein solicitation shall be conducted is at the election of the District Manager. No control is to be exercised by the Companies over the time when, the place where, or the manner in which the District Manager shall operate in carrying out the objectives of this Agreement....
The Corporate Agreement contained essentially the same clause, the only difference being substitution of the words “District Manager Agency” for “District Manager.” The existence of this “independent contractor” clause notwithstanding, Tvedt asserts that at the time of his termination he was nonetheless an “employee” of Farmers, thus entitling him to seek relief for wrongful termination under the WDEA.
¶38 Tvedt offers two arguments in support of his assertion that he qualifies as an “employee”: (1) he did not meet the statutory criteria for an “independent contractor,” and (2) he was governed by, and Farmers recognized, both the Manager’s Agreement and the Corporate Agreement at the time of his termination.
¶39 Tvedt bases his first argument on § 39-51-201(15), MCA, which sets forth the statutory definition of “independent contractor”:
39-51-201. General definitions.
(15) “Independent contractor” means an individual who renders service in the course of an occupation and:
(a) has been and will continue to be free from control or direction over the performance of the services, both under a contract and in fact; and
(b) is engaged in an independently established trade, occupation, profession, or business.
(Emphasis added.) Tvedt asserts that from 1986 to 2001, the time period during which he served as District Manager, he was neither “free from control and direction over the performance of [his] services” either under the contracts, or in fact, nor was he “engaged in an independently established ... business.” Instead, he asserts he continued the activities and business of his predecessor district manager and was compelled to follow the mandates of the company. Tvedt argues he meets neither part (a) nor part (b) of the statutory requirements, thus precluding designation as an “independent contractor,” despite the inclusion of the “independent contractor” clause in the Agreements. A review of the record reveals that the District Court did not make specific findings addressing the question as to whether Tvedt properly fell under the definition of “employee” or “independent contractor.”
¶40 Tvedt bases his second argument, i.e. that the Manager’s Agreement was still in effect concurrently with the Corporate Agreement at the time of his termination, on evidence presented to the District Court indicating that Farmers was still dealing with him as an individual under the Manager’s Agreement. Tvedt presented evidence that the Manager’s Agreement appointed him individually as “District Manager,” and the subsequent Corporate Agreement, while appointing Tvedt’s corporation as “District Manager Agency,” still specifically appointed Tvedt as “Supervising District Manager.” Additionally, the record substantiates that Tvedt presented evidence that Farmers was still interacting with him individually, in addition to his corporation, in the form of correspondence, notices of termination, and checks from Farmers addressed specifically to “L. Lee Tvedt,” “L. LeRoy Tvedt,” or “Lee Tvedt.” These documents, according to Tvedt, constitute evidence sufficient to raise the inference for summary judgment purposes that he, not L. L. Tvedt Insurance, Inc., was Farmers’ “employee.” We agree.
¶41 Further, Tvedt asserts his individual capacity with Farmers continued after the formation of the Corporate Agreement because the Manager’s Agreement was never formally terminated. He first notes that the Corporate Agreement contains no language specifically terminating the Manager’s Agreement. Second, the Manager’s Agreement, although it contains a provision specifying termination events, does not reference formation of the Corporate Agreement. Third, although the procedure specified in the Manager’s Agreement provides for notice of termination of that agreement, no notice was given at the time of the formation of the Corporate Agreement that the prior agreement was being terminated or superseded.
¶42 Farmers simply responds that “[t]he new Agreement is presumed to be the only Agreement” on the basis of novation. Section 28-1-1502, MCA, defines three ways in which a novation can occur:
28-1-1502. Kinds of Novation. Novation is made by the substitution of:
(1) a new obligation between the same parties with intent to extinguish the old obligation;
(2) a new debtor in place of the old one with intent to release the latter; or
(3) a new creditor in place of the old one with intent to transfer the rights of the latter to the former.
Farmers states that Tvedt and Farmers, at the time L. L. Tvedt Insurance, Inc., and Farmers signed the Corporate Agreement, entered into a new contract through operation of novation. In support of its argument, Farmers cites Kenison v. Anderson (1928), 83 Mont. 430, 272 P.2d 679, in which one debtor in a land purchase transaction was substituted for another, with the former being released. However, as Tvedt correctly notes, Kenison represents a novation under subpart (2) of the statute, involving a “new debtor in place of the old one with intent to release the latter.” Tvedt states that the facts in the case sub judice do not involve a debtor, as in Kenison, but rather fall under subpart (1) which requires substitution of “a new obligation between the same parties with intent to extinguish the old obligation.” (Emphasis added.) According to Tvedt, the two Agreements were not between the same parties since the Manager’s Agreement was between Tvedt and Farmers, and the Corporate Agreement was between L. L. Tvedt Insurance, Inc., and Farmers.
¶43 This Court has stated that novation can never be presumed:
In order to effect a novation there must be a clear and definite intention on the part of all concerned that such is the purpose of the agreement, for it is a well-settled principle that novation is never to be presumed ...; the point in every case, then, is, did the parties intend by their arrangement to extinguish the old debt or obligation and rely entirely on the new, or did they intend to keep the old alive and merely accept the new as further security, and this question of intention must be decided from all of the circumstances.
Waite v. Andreassi (1991), 249 Mont. 149, 149, 813 P.2d 987, 988 (emphasis added) (citing Harrison v. Fregger (1930), 88 Mont. 448, 454, 294 P. 372, 373). Thus, Farmers’ assertion that a novation may be presumed from this record must be rejected. As noted above, because Tvedt has presented evidence indicating that at certain times Farmers interacted with Tvedt as an individual and other times as a corporation, this comprises facts in conflict which must be resolved at trial. Upon remand, both Farmers and Tvedt would have the opportunity to offer evidence of the presence or absence of novation.
¶44 Despite these and other indicia that Farmers recognized the continuation of Tvedt’s individual capacity following the appointment of his corporation as a district manager agency, the District Court concluded only that the two agreements revealed a “clear intention” by the parties to substitute the corporation for the plaintiff personally. The court’s rationale in support of this conclusion was: (1) the only way Tvedt could be compensated under the Corporate Agreement, aside from medical insurance, was to be paid by L. L. Tvedt Insurance, Inc., and (2) in their second amended complaint, Tvedt and his corporation chose to refer to themselves collectively as “Tvedt,” therefore, “Plaintiff see themselves as one entity.” However, we conclude that, despite these observations, unresolved genuine issues of material fact existed on the questions of whether Tvedt was an “employee” or an “independent contractor,” and whether the Manager’s Agreement, which recognized Tvedt individually, was still in effect at the time of termination, thus precluding summary judgment.
¶45 Because it concluded that summary judgment was appropriate based upon Farmers’ novation theory, the District Court concluded that Tvedt was not an employee, and, consequently, did not consider the issue of whether Tvedt was otherwise entitled, as a matter of law, to seek relief under the WDEA. Further, the parties’ briefing on appeal did not focus on this issue. Therefore, we decline to address the issue, which may be considered upon remand.
Issue 3
¶46 Did the District Court err in dismissing Tvedt’s claims for business expense indemnification?
¶47 Finally, Tvedt asserts the District Court erred in dismissing his claims for reimbursement of business expenses which he lost, together with prejudgment interest, as a direct consequence of his duties to comply with Farmers’ directives. The District Court summarily dismissed this claim noting: “The [district court] has already found that the parties were operating as two contracting businesses, thus, there was no employer-employee relationship.”
¶48 Tvedt’s argument that his right to recover is not limited to Tvedt’s individual employment status on the basis of § 39-2-101, MCA, is without merit. This section provides “[t]he contract of employment is a contract by which one, who is called the employer, engages another, who is called the employee, to do something for the benefit of the employer____” Although Tvedt attempts to define the word another as “a corporation,” we find neither legal precedent nor legislative intent for doing so. We agree with the District Court that “[i]t is simply axiomatic that one corporation cannot be an employee of another.” Consequently, this issue is contingent upon the District Court’s finding, upon remand, regarding Tvedt’s employment status. If Tvedt would be found to be an “employee,” this would also revive his claim for reimbursement of business expenses paid by an “employee.”
¶49 We reverse and remand for further proceedings on Issue 2 and Issue 3.
CHIEF JUSTICE GRAY, JUSTICES COTTER, NELSON and REGNIER concur.
An "employee” is “a person who works for another for hire [excluding independent contractors].” Section 39-2-903(3), MCA. | [
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MR. JUSTICE HARRISON,
delivered the opinion of the Court.
Appellant, Glacier Part, Inc. (herein Glacier), is a corporation that owns and operates hotels and concessions throughout Glacier National Park. It also owns and operates the water system that delivers water to Glacier Park Lodge and the community of East Glacier.
Flooding in the early summer of 1975 washed-out a portion of the waterline owned by Glacier. The washout cut off the water supply to East Glacier and Glacier Park Lodge. Shortly after the washout, Mr. Herb Sammons began trying to obtain a pump capable of bringing water from a creek into the water system at a point below the waterline washout. Mr. Sammons was the Search and Rescue Coordinator for Glacier County and had supervised the placing of an emergency pump on the water system in a similar washout in 1964.
After placing a pump on the waterline that could not properly handle the water supply problem, Mr. Sammons contacted respondent Don Keil by telephone. The telephone conversation between Mr. Keil and Mr. Sammons took place on either June 20 or 21, 1975. The content of the telephone conversation is one point of controversy in this case. The parties agree that Mr. Sammons asked Mr. Keil if he could provide a pump for the East Glacier water system. The parties further agreed that Mr. Keil said he did have a pump that could handle the problem. The parties then discussed the payment that Mr. Keil would receive for the use of the pump. The parties disagree, however, as to the content of the conversation concerning payment. Glacier contends Mr. Sammons told Mr. Keil that the Federal Flood Disaster Program would pay a rental rate of $5.00 per operation hour up to $100.00 per day for the use of the pump. The Keils contend Mr. Sammons only said that federal disaster money was usually available for these kinds of occurrences and that in 1964 the Federal Disaster Administration paid $ 100.00 per day for rental of a pump. They contend Mr. Sammons indicated they would be paid the prevailing rate for the rental of the pump but that he was not sure who would make the payment. The Keils assert Mr. Sammons told Mr. Keil to contact Mr. Don Hummel, Glacier’s president and general manager, for further information about payment for the use of the pump.
Don Keil subsequently asked his brother, Dale Keil, to contact Mr. Hummel to determine if Mr. Hummel was the person who had authority to make arrangements for the pump. Dale Keil called Mr. Hummel, and Mr. Hummel indicated he was making arrangements for the pump.
On June 22, 1975, the Keils delivered the pump to the pumping site at East Glacier. They then went to the Glacier Park Lodge and met with Mr. Hummel. They told Mr. Hummel that the pump had been delivered and would be hooked up the next morning. Once again there is disagreement as to the content of the conversation between the Keils and Mr. Hummel. Glacier contends Mr. Hummel and the Keils discussed and agreed upon a rental rate for the use of the pump. Glacier contends the parties agreed to the $5.00 per hour, $100.00 per day maximum discussed earlier by Mr. Sammons and Mr. Keil over the telephone. The Keils contend there was no discussion of the rental rate during the conversation.
The next morning Mr. Keil put the pump into operation. The pump operated until June 29, 1975, without further contact between Mr. Keil and Mr. Hummel. Sometime prior to June 29, Mr. Keil called Weissman and Sons in Great Falls to determine the prevailing rental rate for equipment and services similar to those he was providing for Glacier.
On June 29, Mr. Keil and Stan Hould, a business associate of Mr. Keil, met with Mr. Hummel at Glacier Park Lodge. Mr. Keil presented Mr. Hummel with a proposed agreement for the use of the pump. The agreement called for a rental rate of $15.00 per hour and payment for 50 hours of moving time. Mr. Hummel objected to the terms of the contract and refused to sign the agreement.
The parties disagree as to what happened next. Glacier contends Mr. Keil threatened to remove the pump if Mr. Hummel did not sign the agreement. Glacier contends that because of this threat and the town’s dependence on the pump, Mr. Hummel finally agreed to sign an amended agreement. In doing so, according to Glacier, Mr. Hummel expressed his objections to the tactics used in obtaining his signature and pointed out the existence of what he considered to be a previous valid agreement providing for a rental payment of $100.00 per day. The Keils deny that Mr. Keil ever threatened to remove the pump. They assert the parties negotiated the rental payment schedule and came to an agreement as to the rental rate, maintenance of the pump while in service and the term of the rental period.
Mr. Keil and Mr. Hummel signed a written agreement on June 29. The agreement called for a $ 10.00 per hour rental payment for the time the pump was operating, provided for payment for 48 hours moving time, provided that the Keils would service the pump and purchase the fuel for the pump and set the term of the rental at 30 days. A clause added to the agreement for clarification of the 30-day term of the lease stated Glacier agreed to pay for the use of the pump for 30 days unless the Keils removed the pump from service before that time. The clause required the Keils to give Glacier one week notice before removing the pump. The agreement was signed and dated by both parties below the initial terms of the agreement and signed again below the clarifying clause.
On July 2, 1975, Federal Flood Disaster Program personnel installed another pump on the East Glacier waterline and disconneted the Keils’ pump. Mr. Hummel notified Mr. Keil of the action by letter dated July 2, 1975. The letter also indicated Glacier had no further use for the pump and that Mr. Keil could pick the pump up.
Mr. Keil responded to Mr. Hummel’s letter in a letter dated-July 7, 1975. Mr. Keil stated that he considered the June 29 contract to be in full force and effect and would have the pump available for use by Glacier for the remainder of the contract period. The letter indicated the pump would be moved to a storage yard as a security measure. Mr. Keil did remove the pump to a storage yard, and it remained there for the duration of the 30-day contract period.
The Keils demanded payment under the terms of the June 29 contract. Glacier refused to pay, asserting the contract was void.
Donald and Jacqueline Keil then filed this action in District Court, Glacier County. The Keils sought to recover damages from Glacier for breach of contract. A trial was held before the Honorable Nat Allen, sitting without a jury. Following the trial, Judge Allen awarded judgment to the Keils in the amount of $6,380.00 plus interest in the amount of $831.91. Judge Allen also awarded the Keils costs and disbursements. Glacier filed a motion for either a new trial or a reconsideration of the court’s findings and conclusions. The District Court denied the motion. This appeal followed.
Glacier raises the following issues on appeal:
1. Was there a valid oral contract entered into between Mr. Keil and Glacier prior to the execution of the June 29 written contract?
2. Was there consideration for the June 29 written contract signed by Mr. Keil and Mr. Hummel?
3. Was the June 29 written contract signed by Mr. Keil and Mr. Hummel invalid due to duress, menace or undue influence?
Looking to Glacier’s first issue, the essential elements of a contract are: parties capable of contracting; consent; a lawful objective; and, consideration. Section 28-2-102, MCA. A contract may be oral unless specially required to be in writing by statute. Section 28-2-901, MCA. Glacier contends that all the elements of a valid oral contract are present here and that a contract for the use of the pump existed between it and the Keils before the execution of the June 29 written contract.
Where the existence of an oral contract is contested and the evidence is conflicting, the existence of the contract is a question for the trier of fact. Coble v. Scherer (1979), 3 Kan.App.2d 572, 598 P.2d 561, 564; Curran v. Hastreiter (Alaska 1978), 579 P.2d 524, 526. Here the finder of fact was the District Court since the case was tried without a jury. The District Court found that Mr. Sammons and Mr. Keil did not agree as to the capacity of the pump needed by Glacier, the pump accessories to be provided by the Keils, who was to provide fuel for the pump, who was to maintain the pump, or the rental rate of the pump other than a reasonable rate. The District Court also found there was no mention of the rate Mr. Keil would be paid for the use of the pump when Mr. Keil and Mr. Hummel first met in the Glacier Park Lodge on June 22 prior to the installation of the pump. Based on these findings, the District Court concluded Mr. Keil delivered the pump to East Glacier, “. . . on only the assurance that he would be paid the prevailing rate therefor.”
This Court will not disturb a judgment on appeal where substantial evidence to support the judgment appears on the record. Knight and Co. v. Manaras (1979), 184 Mont. 448, 603 P.2d 675, 676-677; McGuire v. American Honda Co. (1977), 173 Mont. 171, 177, 566 P.2d 1124, 1127. This is especially true when the District Court has upheld the sufficiency of the evidence on a motion for a new trial. McGuire, supra, 173 Mont, at 177-178, 566 P.2d at 1127. Further, on appeal the evidence must be viewed in the light most favorable to the prevailing party at the trial level. Knight, supra, 603 P.2d at 676, 36 St.Rep. at 2150. See also Cur-ran, supra, 579 P.2d at 527.
Applying this standard to the case at bar, there appears to be substantial evidence on the record to support the findings and conclusions of the District Court. A valid oral contract could arguably have been formed between Glacier and the Keils as a result of either the telephone conversation between Mr. Keil and Mr. Sammons or the June 22 conversation between Mr. Keil and Mr. Hummel at the Glacier Park Lodge.
Concerning the telephone conversation, Mr. Keil testified that Mr. Sammons asked him to bring the pump to East Glacier and told him he would be paid the prevailing rate for the rental of the pump. Although Mr. Sammons disagreed that he told Mr. Keil he would be paid the prevailing rental rate, Mr. Sammons did state he and Mr. Keil did not discuss the specifics of any contract they might be entering into such as who would furnish fuel for the pump. This testimony indicates substantial evidence on the record to support the conclusion that Mr. Keil and Mr. Sammons did not enter into a contract.
As for the conversation between Mr. Keil and Mr. Hummel on June 22, Don Keil, his former wife Kay Keil, his brother Dale Keil, and his sister-in-law Sherri Keil, all testified there was no mention of the rental rate for the pump during that conversation. This testimony, although disputed by Mr. Hummel, indicates the record contains substantial evidence to support the conclusion that no oral contract resulted from the June 22 conversation between Mr. Keil and Mr. Hummel. Therefore, we will not disturb the findings and conclusions of the District Court on this issue.
Glacier also contends this Court should find the existence of a valid contract before the execution of the June 29 written contract based on Section 90 of the Restatement of Contracts. That section reads:
“A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.” Rest. Contracts (1932), § 90 at 110.
Although this section of the Restatement is not so entitled, it is commonly referred to as the doctrine of promissory estoppel. Bixby v. Wilson & Company (D.Iowa 1961), 196 F.Supp. 889, 903.
The doctrine of promissory estoppel has been previously recognized by this Court. Fiers v. Jacobson (1949), 123 Mont. 242, 249-251, 211 P.2d 968, 972-973. The elements of promissory estoppel are: (1) a promise clear and unambiguous in its terms; (2) reliance on the promise by the party to whom the promise is made; (3) reasonableness and foreseeability of the reliance; (4) the party asserting the reliance must be injured by the reliance. Laks v. Coast Federal Savings & Loan Association (1976), 60 Cal.App.3d 885, 131 Cal.Rptr. 836, 839; Thomson v. International Alliance of Theatrical Stage Employees (1965), 232 Cal. App.2d 446, 42 Cal.Rptr. 785, 790.
The first element that must be established to prove a contract by the doctrine of the promissory estoppel is the existence of a clear and unambiguous promise. The terms of the promise must be certain, as there can be no promissory estoppel without a real promise. Metropolitan Convoy Corp. v. Chrysler Corp. (1965), 58 Del. 286, 208 A.2d 519, 521; National Dollar Stores v. Wagnon (1950), 97 Cal.App.2d 915, 219 P.2d 49, 52. Promissory estoppel cannot be based on preliminary negotiations and discussions or an agreement to negotiate the terms of a contract. Wagnon, supra, 219 P.2d at 52. See also, Anderson v. KFBB Broadcasting Corp. (1964), 143 Mont. 423, 430-431, 391 P.2d 2, 6.
Laks presents a good discussion of the first element of promissory estoppel. Laks involved a contract to provide interim and long-term financing for the construction of a motel. Mr. Laks and an associate had contacted the Coast Federal Savings & Loan about providing financing to build a Sheraton Motor Inn. After a series of discussions on the matter, Coast sent Mr. Laks’ agent a letter outlining the financing the bank would be willing to provide. The letter included the amount of the long-term financing, the interest rate on the long-term financing and the term of the long-term financing. The letter also included a general discussion of interim financing, the method of ownership of the motel and the management of the motel on completion. The letter did not include an amount for the interim financing, provisions for securing the loan, remedies of the lender on default or prepayment conditions.
After receiving the letter, Mr. Laks proceeded to procure the permits and contracts necessary to build the motel and stopped looking for other financing. Coast subsequently decided not to loan Mr. Laks the money to build the project. At the time Coast made the decision, Mr. Laks had only 45 days within which to break ground on the motel to maintain his building permit. He did, however, succeed in building the project with other financing although the financing was substantially more expensive.
Mr. Laks and his associate brought a claim for breach of a contract to provide financing for the project against Coast based on a theory or promissory estoppel. The California court pointed out that the letter sent by Coast to Laks left the final terms of a loan far from complete and that this should put the offeree on notice that the parties were still in the negotiation process and that finalization of the terms would require further negotiations. 131 Cal.Rptr. at 839. The court stated the evidence indicated the parties had simply agreed to agree upon terms in the future. 131 Cal.Rptr. at 840. With the uncertainty of the terms of the alleged contract and the mere existence of an agreement to agree on final terms at a later date, the court concluded the essential element of a clear and unambiguous promise was missing from a promissory estoppel claim and affirmed the lower court’s dismissal of the action. 131 Cal.Rptr. at 841.
Here, the District Court found that while the parties had agreed that Mr. Keil would provide the pump for Glacier’s use, there was no agreement as to the pump accessories to be provided by the Keils, who was to provide fuel for the pump or who was to maintain the pump. Further, the parties had only agreed that the Keils would be paid a reasonable rate for the use of the pump; no specific amount was agreed upon. The District Court also found that Mr. Sammons told Mr. Keil to contact Mr. Hummel for further information about the Keils providing the pump to Glacier.
Thus, this is a classic case of a promise not sufficiently clear or unambiguous to satisfy the first element of a promissory estoppel claim. Only one of the terms of the promise, that the Keils would provide the pump, was clearly stated. All other material terms of a rental contract were absent, including the specific rental rate and who was to provide fuel for the pump. This should have put Glacier on notice that the parties needed to negotiate further before finalizing an agreement. It also appears that the parties actually did contemplate further negotiations. Mr. Sammons told Mr. Keil to contact Mr. Hummel for further information about the rental of the pump.
The parties here had nothing more than an agreement to agree that was in the initial stages of the negotiation process. This does not constitute the clear and unambiguous promise necessary to satisfy the first element of a promissory estoppel claim. Therefore, Glacier’s contention that this Court should find the existence of a valid contract before execution of the June 29 written contract based on Section 90 of the Restatement of Contracts is rejected, and the District Court’s holding of no contract is affirmed.
The second issue raised by Glacier concerns the existence of consideration for the June 29 written contract. It is well settled that a promise to perform an existing legal obligation cannot constitute consideration for a contract. Rickett v. Doze (1979), 184 Mont. 456, 603 P.2d 679, 680. Glacier asserts this rule applies here. It contends that the Keils were obligated to provide the pump for Glacier’s use under an oral contract formed before the execution of the June 29 written contract. Glacier contends that agreeing to provide the pump cannot, therefore, be consideration for the written contract. Glacier argues that since the written contract was based solely on the Keils duty to provide the pump, the contract fails for lack of consideration.
The problem with Glacier’s argument on this issue is obvious given the resolution of the first issue raised here. The District Court properly found that no oral agreement existed between the Keils and Glacier before the execution of the June 29 written contract. Without such an agreement, the Keils had no legal duty to provide the pump to Glacier. Agreeing to provide the pump, therefore, could and did constitute consideration for the written contract. The contract is not void for lack of consideration. We will not overturn the District Court’s judgment based on Glacier’s contentions on this issue.
The final issue Glacier raises involves the invalidation of the June 29 agreement because of duress or undue influence. The formation of a contract requires the free and mutual consent of the parties to the contract. Section 28-2-301, MCA. Consent is not free when obtained through duress or undue influence. Section 28-2-40l(l)(a), (d), MCA. Glacier contends the facts here show that Mr. Hummel did not freely consent to the terms of the June 29 written contract. It asserts Mr. Keil forced Mr. Hummel to sign the contract under the threat of removal of the pump and the resulting loss of the water supply to the community of East Glacier. Without Mr. Hummel’s free and mutual consent, Glacier argues, the contract is invalid and should not be enforced.
The District Court found that at the time the parties executed the June 29 written agreement Mr. Keil did not threaten to remove the pump. Based on that finding, the District Court concluded that Mr. Hummel executed the contract freely and voluntarily and not under any duress.
As stated above, this Court will not disturb the decision of the District Court on appeal where substantial evidence to support the judgment appears on the record. McGuire v. American Honda Co., supra, 173 Mont. at 177, 566 P.2d at 1127. Further, the Court should view the evidence in a light most favorable to the prevailing party at the trial level. Knight and Co. v. Manaras, supra, 603 P.2d at 676, 36 St.Rep. at 2150.
Under this standard, there appears to be substantial evidence on the record to support the finding that Mr. Keil did not threaten to remove the pump and the conclusion that Mr. Hummel freely signed the contract. Mr. Keil testified that he did not threaten to remove the pump unless the June 29 agreement was signed. Mr. Stanley Hould, a business associate of Mr. Keil, who was present during the June 29 meeting, also stated Mr. Keil did not threaten to remove the pump during the meeting. The testimony of Mr. Hummel and his secretary, Emily Moke, conflicts with that of Mr. Keil and Mr. Hould. However, the District Court’s findings show the court found the Keil and Hould testimony more credible than that of Hummel and Moke. On appeal we must rely on the judgment of the trial court as to the credibility of witnesses. Rule 52(a), M.R.Civ.P.; Knight, supra, 603 P.2 at 677, 36 St.Rep. at 2150-2151.
The testimony of Keil and Hould represents substantial evidence on the record to support the findings and conclusions of the District Court that Mr. Hummel was not threatened and freely signed the June 29 contract. Accordingly, we will not disturb the District Court’s findings on this issue.
Affirmed.
MR. CHIEF JUSTICE HASWELL, and JUSTICES SHEA and SHEEHY, concur. | [
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MR. JUSTICE HARRISON
delivered the opinion of the Court.
Appellant Gary Cissel initiated this action by filing a complaint in the Sixth Judicial District, Park County, before the Honorable Jack D. Shanstrom. The complaint alleged the respondent, Western Plumbing and Heating, Inc. (herein Western), negligently installed a water closet valve in a home being constructed by him resulting in damage to the home which rendered it worthless. Western answered the complaint by asserting the damages complained of by Mr. Cissel were caused by negligence on his part.
The parties presented the case to a jury on the complaint and answer. The jury returned special interrogatories finding negligence on the part of both parties but finding only Mr. Cissel’s negligence caused damages to the house. The jury returned a general verdict for defendant. The District Court entered judgment accordingly and this appeal followed.
Mr. Cissel and William Patenaude entered into a joint venture agreement to construct and sell a house in Livingston, Montana. Under the terms of the agreement Mr. Cissel was to provide the financing for the project and do the electrical work. Patenaude was to act as the general contractor. Construction of the house began in November 1976 and continued at a slow pace until March 1977. At that time Mr. Cissel terminated his agreement with Patenaude and hired John Sexton to complete construction of the home.
When Mr. Sexton began working on the house he discovered that one corner of the structure had settled approximately five-eighths of an inch. Sexton also ascertained that the house was moving in a side-to-side fashion. Sexton installed a cement “deadman” below the foundation of the house to correct these problems. Sexton stated that no further slippage or settling occurred in the foundation for about the next eight months while he completed construction of the structure.
Mr. Cissel contracted with Western to do the plumbing in the house. As of February 4, 1978, all the plumbing had been completed except for the installation of a toilet in a bathroom on the first floor of the house. Western had installed the pipe that supplied water to the toilet and sealed it off with a water closet valve.
On February 4, 1978, Mr. Cissel conducted a routine inspection of the house. He found that the water closet valve installed on the toilet pipe had blown off and that water was flowing through the inside of the house. Mr. Cissel presented evidence at trial that the water flow from the pipe washed away a large portion of the fill dirt around the foundation of the house. He also presented testimony that the erosion of the fill dirt caused the house to settle approximately five inches which in turn caused cracks in the footings and foundation of the house, cracks in the stone veneer installed on the outside of the house, separation of the house’s interior walls, buckling of sheet rock inside the house, and eventually the buckling of the floor in the house. These damages rendered the house unsaleable and worthless according to Mr. Cissel.
Western presented evidence along two lines to refute Cissel’s theory that the leaking pipe caused the damage to the house. First, Western introduced testimony that both the fill and foundation systems used by Cissel in constructing the house were inadequate to support the structure. Second, Western introduced evidence that water run-off from a snow melt, rather than water leaking from the toilet pipe, caused a substantial amount of the erosion of the fill dirt.
Mr. Cissel’s attorney put William Patenaude on the stand at trial. On direct examination Mr. Patenaude testified as to the procedure followed in setting the foundation of the house and placing the fill dirt around the house. On cross-examination Patenaude was allowed to testify as to an incident that occurred after the filing of this lawsuit. He related an incident before trial in which Mr. Cissel allegedly grabbed him, threw him to the ground and threatened “to blow his brains out” if he did not testify favorably to Cissel’s case at trial.
Mr. Cissel raises the following issues on appeal:
1. Was there substantial evidence before the jury to support the finding of no causal connection between Western’s negligent installation of the water closet valve and the damages sustained by Mr. Cissel?
2. Did the District Court err in admitting the testimony of William Patenaude concerning the assault Mr. Cissel made on him and the threats Cissel made to him?
Mr. Cissel frames the first issue raised on appeal in terms of substantial evidence to support the jury verdict. The standard for review of an issue presented in this fashion is well settled. The Court will not disturb the jury’s verdict if the record contains substantial evidence to support the verdict. Dodds v. Gibson Products Company (1979), 181 Mont. 373, 593 P.2d 1022, 1026; McGuire v. American Honda Co. (1977), 173 Mont. 171, 177, 566 P.2d 1124, 1127; Big Sky Livestock Inc. v. Herzog (1976), 171 Mont. 409, 414, 558 P.2d 1107, 1109-1110. Further the evidence must be viewed in the light most favorable to the prevailing party in the trial court on review. Herzog, 171 Mont. at 414, 558 P.2d at 1110.
Several witnesses presented testimony that there was no causal connection between Western’s negligence and the damage to the house. The evidence indicated two causes of the settling of the house and resulting damages other than the leaking pipe. First, Western introduced evidence that improper design of the house and improper compaction of the fill dirt placed under the house caused the settling. Two expert witnesses testified to that effect. Kent Brewer, a structural engineer, testified that the foundation system of the house was inadequate; that the pylons that supported the front of the house were not set in bedrock; and that the fill under the house was improper. Brewer did state that water flow would accelerate settling in a loose fill situation, but that the settling would occur eventually even without the water flow. On cross-examination Brewer said the house would have settled in zero to five years without any water flow.
Walter Jones also testified. Jones is a civil engineer with a specialty in soil mechanics. He stated that the back of the house has been placed on bedrock and had not settled. He further observed that the front of the house had not been placed on bedrock and had settled. Jones explained that his company had taken soil samples and run tests to determine the compaction of the fill dirt under the house. Jones stated the tests showed the fill dirt was not compacted very well and that the house could be expected to settle about six inches under the existing fill conditions. Based on this data, Jones concluded the main reason for the settling of the house was improper compaction of the fill dirt under the house. Jones further stated that he observed settling over the entire front of the house. He said the amount of the settling correlated to the depth of fill under a particular part of the house and that there was not an unusual difference in the settling where the erosion of the fill dirt had occurred.
In addition to the expert testimony, Mr. Cissel himself testified he was concerned with the amount of fill used in constructing the house. He stated he had the cement pillars installed in the front of the house to add support because of his concern. Mr. Cissel also stated he was generally concerned with the quality of the work Mr. Patenaude had done in the first phases of construction of the house, that the tamper used to compact the fill dirt placed under the house was a small one generally used for ditch or trench projects rather than a large fill area like the house project, and that no tests were done on the soil compaction during the construction of the house.
Bill Patenaude also testified concerning the fill conditions at the house. Patenaude did state that the fill dirt placed under the house was compacted with a tamper. He testified, however, that he had no expertise in preparing fill or constructing a foundation. Patenaude further said that no testing of the fill was done during the construction of the house and that he was concerned about the condition of the fill and the foundation. Patenaude stated his concern stemmed from the amount of fill used and the fact that the front of the house was placed on fill dirt while the back of the house was sitting on a rock ledge.
The second theory advanced by Western as a cause for the house’s settling was erosion of the fill dirt due to run-off from snow melt. Myron DesChene testified concerning this theory. Mr. DesChene is an insurance man whom Cissel called to the house on the day he discovered the leaking pipe. DesChene testified the day Mr. Cissel called him to inspect the damage to the house was a very warm one for February as it was chinooking. He stated the snow from the top of the hill behind the house was melting. DesChene said water from the snow melt was running down the hillside behind the house, disappearing under the house, and that an amount of water about equal to the amount disappearing behind the house was coming out from under the house in the front corner of the house where the fill dirt eroded. Although DesChene recognized that he was not an expert in the area of water flow, he gave the following testimony on cross-examination:
“Q. [Mr. Bennett] All right. I want to know if you know if the source of the water which caused the blow hole was from melting snow?
“A. [Mr. DesChene] I can’t say it wasn’t.
“Q. Can you say it was?
“A. It certainly appeared to be. It had to come from someplace, and that is the only water that was laying around since when I arrived the water was turned off within the house and it was sitting in puddles.”
Engineers Brewer and Jones also gave testimony supporting the theory that snow melt run-off caused the erosion of the fill dirt. Brewer testified that it was possible that the water from the leaking pipe went down a drain in the bathroom floor rather than down under the house. Both Brewer and Jones stated they observed more receding of the fill dirt between their first inspection of the site and the time of trial.
Faced with this type of evidence on causation, Mr. Cissel devotes a large part of his argument on this issue to pointing out evidence contradicting the above testimony and tending to show the leaking pipe caused the house to settle. This Court has rejected this kind of argument on substantial evidence questions on numerous occasions. For example, we have stated:
“ ‘It is well settled in this jurisdiction that wherever there is a conflict in the evidence this Court may only review the testimony for the purpose of determining whether there is any substantial evidence in the record to support the verdict. . Where the evidence is conflicting, but substantial evidence appears in the record to support the judgment, the judgment will not be disturbed on appeal . . .’ ” McGuire, 173 Mont, at 177, 566 P.2d at 1127, quoting from Strong v. Williams, 154 Mont. 65, 68, 460 P.2d 90, 92.
Further, in Stamatis v. Industrial Indemnity Co. (1979), 184 Mont. 64, 601 P.2d 403, we said:
“Thus, where the findings are based on conflicting evidence, our function of review is confined to determining whether there is substantial evidence supporting such findings . . . Conversely, our function is not to determine whether there is sufficient evidence to support contrary findings.” 601 P.2d at 406, 36 St.Rep. at 1869.
Thus it is clearly not the function of this Court to determine that there is evidence on the record that conflicts with a jury’s verdict or that there is evidence on the record that supports a verdict other than the one reached by the jury. The Court must only determine if there is substantial evidence on the record to support the conclusion the jury ultimately reached.
Here it appears that evidence exists. The parties presented evidence postulating three possible causes for the damage to the house. Mr. Cissel’s evidence tended to show the damage was caused by the leaking pipe. Western presented evidence theorizing the damage occurred either because of improper construction of the house or erosion of the fill under the house caused by snow melt run-off. The jury found the evidence presented by Western more credible and found the theories advanced by Western represented the cause of the damage to the house. The finding is based on the above summarized testimony by Brewer, Jones, DesChene, Patenaude and even Cissel himself. The testimony of these witnesses represents substantial evidence on which the jury could base its verdict. Therefore, we will not overturn the verdict on appeal on the basis of the first issue raised by Mr. Cissel.
The second issue presented here involves the admission of testimony concerning the assault Mr. Cissel made on Bill Patenaude and the threats Cissel made to Patenaude. Mr. Cissel contends it was reversible error to admit this testimony. He offers two reasons for the exclusion of the evidence. Cissel first contends the evidence is irrelevant. Second, he argues that even if the evidence is relevant, the evidence should be excluded because its prejudicial effect substantially outweighs its probative value.
Both these arguments have been rejected in other jurisdictions. Addressing the relevancy issue, the court in Grain Dealers Mutual Insurance Company v. Farmers Union Cooperative Elevator and Shipping Association, Kirwin, Kansas (10th Cir. 1967), 377 F.2d 672, stated, “The fact that evidence on cross-examination is immaterial and irrelevant to the issue of negligence does not make it inadmissible if otherwise relevant and material on the credibility of the witness.” 377 F.2d at 679. See also Stroud v. Dorr-Oliver, Inc. (1976), 112 Ariz. 574, 544 P.2d 1089, 1090. Concerning prejudice, it has been held that evidence is admissible that shows a witness feared a defendant in a criminal case because of threats made to the witness by the defendant or an assault on the witness by the defendant despite the fact such evidence also shows the defendant may be guilty of another crime. Commonwealth v. Williams (1979),--Mass.--, 393 N.E.2d 937, 942; Commonwealth v. Douglas (1968), 354 Mass. 212, 236 N.E.2d 865, 874.
The relevancy of the testimony appears to be equally well established under Montana law. Rule 611(b)(1), Mont.R.Evid., expressly allows a witness to be impeached on cross-examination. Allowable methods of impeachment include showing a motive to testify falsely. Clarke, Montana Rules of Evidence, 39 Mont.L.Rev. 79, 119 (1978). An appropriate area of inquiry to demonstrate a motive to testify falsely previously recognized by this Court is fear of prosecution for a crime on the part of a witness for the state in a criminal case. State v. Ponthier (1959), 136 Mont. 198, 208, 346 P.2d 974, 979-980. Thus, fear of the consequences of giving testimony is a legitimate subject for cross-examination to show a witness has a motive to falsify testimony. That is what Western attempted to do in this case. Mr. Cissel had threatened to kill Patenaude if he did not testify in a manner favorable to Cissel. Fear of Cissel carrying out that threat definitely could provide a motive for Patenaude to give false testimony at trial. The testimony was therefore relevant to show a motive to testify falsely and properly admitted by the District Court over Cissel’s relevancy objection.
It should be noted that Mr. Cissel was entitled to an instruction limiting the scope of the jury’s consideration of the evidence to the specific purpose for which it was relevant. Rule 105, Mont.R.Evid. On his request, the court should have instructed the jury that the evidence of the assault and threat should only be considered as it pertained to Mr. Patenaude’s credibility. However, a trial judge has no duty to give a limiting instruction absent a request at trial from the party wishing to limit the scope of the consideration of the testimony. Polster v. Griff's of America, Inc. (1974), 184 Colo. 418, 520 P.2d 745, 747; Rader v. Gibbons and Reed Company (1972), 261 Ore. 354, 494 P.2d 412, 416; Dagget v. Atchison, Topeka and Santa Fe Ry. Co. (1957), 48 Cal.2d 655, 313 P.2d 557, 564, 64 A.L.R.2d 1283. Mr. Cissel did not request a limiting instruction here. Therefore, we will not disturb the judgment of the lower court on the basis of the failure to give the limiting instruction.
Although properly admitted over the relevance objection, the evidence of the assault and threats should not have been admitted if the prejudicial effect of the evidence substantially outweighed its probative value. Rule 403, Mont.R.Evid. It cannot be denied that the evidence prejudiced Mr. Cissel’s case. On the other hand, the evidence was relevant to Mr. Patenaude’s credibility. Patenaude testified as to the strength of the house’s foundation and the condition of the fill dirt placed under the house. Both of these facts were crucial to the determination of the cause of the damage to the house. Thus, Mr. Patenaude’s credibility was important and evidence concerning his credibility had significant probative value as to the crucial issue in the case.
This Court faced a similar situation in State v. London (1957), 131 Mont. 410, 310 P.2d 571. There we admitted testimony that a criminal defendant’s wife had offered to pay a witness $500 to testify favorable to the defendant at trial. Further, a heavy reliance must be placed on the District Court’s discretion in determining if the prejudicial effect of evidence substantially outweighs its probative value. Montana Rules of Evidence, supra, 39 Mont.L.Rev. at 101. it should also be noted the trial court allowed Mr. Cissel to present evidence in his rebuttal testimony explaining the circumstances under which he allegedly assaulted Mr. Patenaude and refuting some of the statements Patenaude made about the incident. This mitigated the prejudicial effect of the evidence.
Considering the probative value of the evidence, the fact that evidence has been admitted under similar circumstances in a prior Montana case, the heavy reliance placed on the discretion of the District Court in making this determination and the fact that Mr. Cissel had an opportunity to mitigate the prejudicial effect of the evidence, it cannot be said the prejudicial effect of the evidence substantially outweighed its probative value. The admission of the evidence does not, therefore, constitute ground for reversing the judgment of the District Court.
MR. CHIEF JUSTICE HASWELL and JUSTICES SHEEHY and DALY concur.
MR. JUSTICE SHEA concurs in the result reached by the majority but not in all that is stated. | [
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Application for writ of hateas corpus and writ of certiorari in support thereof. After filing of return and answer, the matter was argued to the court by counsel for relator and cause submitted for judgment and decision. Subsequently counsel for the respective parties having entered into a stipulation to dismiss proceedings, it is hereby ordered that they be dismissed in accordance therewith. | [
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
This action was brought for the purpose of having it adjudged that the Manhattan Malting Company, a corporation organized under the laws of Montana (hereafter referred to as “the corporation”), is legally dead, by reason of the expiration of the time limit fixed by its charter, and to have a receiver appointed to wind up its affairs.
The following narrative of facts, gathered from the complaint, is sufficient to present the questions involved: The corporation was organized on December 26, 1890, the recorded certificate designating the plaintiff, defendants Henry Altenbrand, John G. Gillig, and two others as trustees for the first three months. Its capital stock consists of 10,000 shares of a par value of $100 each. The object of the incorporation named in the certificate is the manufacture and sale of malt at Moreland (now Manhattan), in Gallatin county. At different times there had been issued, and on December 26, 1910, there were outstanding, 5,821 shares of stock. At the time of the organization plaintiff purchased at par 200 shares and is now the owner of them. The defendants are the owners of 4,620 shares, more than two-thirds of all shares now outstanding, and on December 26, 1910, were the acting trustees. On that date a meeting of the stockholders was held pursuant to notice as provided by law for the purpose of determining the question whether the existence of the corporation should be extended twenty years from that date. The result was the adoption of a resolution in favor of the extension, more than two-thirds of the holders of all the outstanding stock voting in the affirmative, the plaintiff, however, voting in the negative. On December 28, 1910, the chairman and secretary of the meeting caused to be filed with the clerk and recorder of Gallatin county a properly authenticated certificate of the proceedings had, and a certified copy of this certificate to be filed with the secretary of state on December 31. No other meeting was held and no other record of the proceedings made. Subsequently, and prior to the commencement of this action, the plaintiff demanded that the defendants proceed to wind up the affairs of the corporation by the payment of its debts out of the proceeds of its property and the distribution of the remainder among the stockholders. The property of the corporation is of great value. The defendants are in possession of it and are proceeding to use it in the conduct of the business, assuming that the corporation is still in existence. It is alleged that the corporation never elected to continue its existence under the Codes of 1895, nor under the Revised Codes of 1907, nor any other laws than those in force at the date of its organization; that, when it was organized, the term of its existence was limited to twenty years, and there was no provision of law authorizing an extension of it; that the provisions now in force permitting such extension, having been enacted subsequent to the organization of the corporation, have no application to it, but that, if they have, they are void because they impair the obligation of the contract existing between the corporation and the stockholders and between the stockholders themselves, and deprive the plaintiff of his property without due process of law. The court sustained a general demurrer to the complaint and rendered judgment dismissing the action. Plaintiff has appealed.
In order to understand the contentions made by counsel, a brief reference to some of the provisions of our corporation law and their history is necessary. Under the law as it existed in 1890, the life of a corporation was limited to twenty years. (Comp. Stats. 1887, Fifth Div., sec. 446.) There was then no provision authorizing an extension of this limit. By an Act adopted by the legislature of 1893 (Sess. Laws 1893, p. Ill), the provisions of the Compiled Statutes relating to corporations were amended in several particulars. The limitation fixed by section 446, supra, was extended from twenty to forty years. Section 467 was amended so as to include a provision authorizing any corporation or company theretofore formed, either by special Act or under the general laws then existing or any formed thereafter, to extend the term of its existence, subject to the provisions and liabilities of the chapter of which section 467 was a part; provided the extension should in no case make the term of existence'longer than forty years from the date of the original incorporation. Sections 468 and 469 were so amended as to provide a method by which the extension could be effected. Section 468 declared that it must be authorized by a vote of at least two-thirds of all the shares of stock at a meeting of stockholders to be called as therein directed. Section 469 provided for the organization and conduct of the meeting, and, if the vote was in favor of the extension, for the making and filing of a certificate of the result with the clerk and recorder of the proper county, and a certified copy thereof with the secretary of state. These sections, as amended, were continued in force by section 5186 of the Political Code of 1895 (Rev. Codes, sec. 3566), to be construed as amendments to the provisions on the same subject as found in the Civil Code (Pol. Code 1895, sec. 5184 [Rev. Codes, sec. 3564]), wherein they appear as sections 411-414. Section 446, as further amended (Laws 1905, Chap. 102, p. 224; Laws 1907, Chap. 163), is found in the Revised Codes, as section 3825. Amended sections 467, 468, and 469 now appear therein as sections 3826, 3827, and 3828, respectively. Sections 3825 and 3826 were again amended by the Act of 1909 (Laws 1909, pp. 148, 149), but not in any particular affecting this controversy.
1. We notice, first, the contention that the foregoing provisions do not apply to the corporation because it never elected to continue its existence under the provisions of the Codes of 1895 or subsequent legislation, and therefore could not avail itself of the privilege granted by section 3826, supra, as amended. This contention cannot be sustained, for tbe reason that, wben the Codes of 1895 were adopted, the sections of the Compiled Statutes, supra,, as amended by the Act of 1893, were in full force and effect. By the express terms of amended section 467 (Rev. Codes, see. 3826; Sess. Laws 1909, p. 149), it included any company or corporation theretofore formed “either by special Act or under general law and now existing.’’ As already pointed out, the provisions of the Act of 1893 were continued in force as amendments to the provisions of the Code of 1895 on the same subject, and supplanted them so far as they were inconsistent with them. (Pol. Code 1895, secs. 5184, 5186; Rev: Codes, secs. 3564, 3566.) Therefore, after the adoption of the Codes of 1895, and later of the Revised Codes of 1907, the provisions of the Act of 1893, and all subsequent amendments to them, still applied to the corporation, though it did not elect to continue its existence under the Codes authorizing it to do so. (Civ. Code 1895, sec. 401; Rev. Codes, secs. 3815, 3816.) This being so, it could avail itself of the privilege granted by section 3826 as amended.
2. Four steps are requisite to enable a corporation to avail itself of the privilege granted by the statute. These are: (1) A meeting of the stockholders, called as provided in section 3827, and a favorable vote by the requisite majority; (2) the preparation and execution of the required certificate evidencing the proceedings had; (3) the filing of the certificate with the clerk and recorder of the proper county; and (4) the filing of a certified copy thereof with the secretary of state. Counsel for plaintiff contend that all of these steps must be taken during the life of the corporation, or else the effort to extend its life is not effective for any purpose. They rely upon the rule, which is not the subject of question, that if the law under which a corporation is organized, or the special Act creating it, fixes a definite time during which its life shall continue, when the limit expires the corporation is ipso facto dissolved, and cannot thereafter exercise any power, except such as the law confers in order to enable it to wind up its affairs. (Clark v. American Cannel C. Co., 165 Ind. 213, 112 Am. St. Rep. 217, 73 N. E. 1083; People v. Anderson etc. R. Co., 76 Cal. 190, 18 Pac. 308; La Grange R. Co. v. Rainey, 7 Cold. (Tenn.) 420; 10 Cyc. 1271; 1 Thompson on Corporations, sec. 243.) Our statute declares that a corporation is dissolved by the expiration of the time limited by its charter. (Rev. Codes, sec. 3905.)
The general rule is that a corporation comes into existence at the time when the conditions precedent imposed by law have all been substantially complied with. (1 Thompson on Corporations, secs. 171, 243, 265.) It is an artificial person, and necessarily can have no legal being until it has been fully created. The conditions necessary to be observed in this state in the formation of industrial and commercial corporations are found in the provisions of the Codes and amendatory legislation. (Rev. Codes, secs. 3808, 3825, amended by Sess. Laws 1909, p. 149, sec. 3817.) Among these are the filing of the articles of incorporation and a certified copy thereof with the proper officers, viz., the county clerk and the secretary of state. When the copy has been filed with the secretary of state, he must issue his certificate to the corporation that it has been filed. “Thereupon the persons signing the articles and their associates and successors, shall be a body politic and corporate.” (Section 3825.) While it may be true that the certificate, when issued, will relate back to the date of the execution of the articles so as to validate an act of the incorporators done in the name of the corporation in the meantime, yet, in legal theory until all the required steps, including the issuance of the certificate, have been performed in substantial compliance with the statute, the proposed corporation has no legal existence. The term “thereupon,” as used in section 3825, whether taken to signify “in consequence of which,” or “immediately after,” or “in sequence,” clearly imports into it the meaning that all these steps, taken together, are the causa sine qua non. The exercise of the privilege to extend the term of existence must be governed by the same rule. The extension is effectuated, not by the favorable vote at the stockholders’ meeting, nor by the preparation of tbe certificate, nor by tbe filing of it with tbe clerk of tbe county, but by filing the copy with tbe secretary of state after all the prerequisite steps have been taken; for, under section 3828, the term of existence is extended “when” — that is, “immediately after” or “just after” — the requirements of section 3825 have been complied with. The privilege is statutory and granted upon conditions precedent. It is analogous to a statutory lien, such as that of a mechanic, which is lost unless the claim is filed with the proper officer within the time fixed by law (Rev. Codes, see. 7292; Western Iron Works v. Montana P. & P. Co., 30 Mont. 550, 77 Pac. 413), or to the right to sue for the recovery of taxes paid under protest, which is granted only on condition that action be brought within a specified time. (Rev. Codes, sec. 2743; Dolenty v. Broadwater County, ante,. p. 261, 122 Pac. 919.)
While it is not declared, in terms, in any of the provisions supra, that all the steps looking to the extension must be taken during the life of the corporation, all the analogies point to the conclusion that this must be the case. Plence we conclude that the life of the corporation ended at midnight on December 26, 1910, and that what was thereafter done did not effectuate the purpose of the meeting of the stockholders.
It is argued by counsel for defendants that the statute does not require the corporation, or its directors, to file and record the certificate, but that, since this must be done by the clerk or secretary of state, when.it is done, it relates back to the date of the passage of the resolution of the stockholders, thus saving the life of the corporation. They insist that this view is supported by the case of St. Phillips Church v. Zion Presbyterian Church, 23 S. C. 297, and State ex rel. Cascade Bank v. Yoder, 39 Mont. 203, 103 Pac. 499. Neither of them is in point. Under a statute of South Carolina, the clerk of one of the courts was clothed with the power to grant charters to corporations. Though proper application had been made to him to renew the charter of the Zion Presbyterian Church, which had theretofore been incorporated under the same statute, through neglect on his part the new charter was not granted until after the old one. had expired. The South Carolina court held that the new charter, when granted, related back to the date of application so as to prevent the dissolution of the corporation, and hence a reverter of its property to the original grantor. In the case of State ex rel. Cascade Bank v. Yoder, the question was whether, under the circumstances as they were made to appear, it was the duty of the defendant secretary of state to file a certificate extending the life of relator corporation. This court held that it was, it appearing that the authorities of the relator had fully complied with the law on their part. In such cases as these the doctrine of relation should be made to apply; otherwise a careless officer, or one who has a wrong notion of his legal duty, might do an irreparable injury to a citizen who has fully complied with the law, and needs only the ministerial act of the officer to preserve or acquire the right at stake. In the case at bar there is not involved the question of duty by either the clerk or secretary of state.
At the hearing, it was stated by counsel that they had not been able to find any authority directly in point upon the question involved. We have not been able to find any, though we have sought diligently. Nevertheless, we do not think that the soundness of the conclusion we have reached can be successfully questioned. It is sometimes the case that a corporation continues its business after the time fixed by its charter has expired. It has been held, and properly so, we think, that for some purposes such a corporation should be held to have a de facto existence. When it is sought to hold it liable for a tort committed by those who have acted as its agents, or upon a contract entered into in its corporate name, the persons acting as its officers ought not to be heard to say that it is not what it purported to be at the time the liability was incurred. The case of Miller v. Coal Co., 31 W. Va. 836, 13 Am. St. Rep. 903, 8 S. E. 600, and the citations therein, are sufficiently illustrative. The principle underlying them, however, has no application to the facts of this case.
Section 3906, Revised Coles, provides: “Unless other persons are appointed by the court, the directors of such corporation at the time of its dissolution are trustees of the creditors and stockholders or members of the corporation dissolved, and have full power to settle the affairs of the corporation, and as such tru.S' tees are authorized to execute all grants of real estate owned by such corporation.” Upon the facts stated in the complaint, we do not think the plaintiff entitled to have a receiver appointed by the court. It is not alleged that the defendants are incompetent or improvident, or that they have been guilty of wrongdoing in connection with the property of the corporation, other than that they are acting upon the erroneous assumption that the corporation is still in existence. This alone is not sufficient to justify an order taking the property from their possession. Their conduct, though unauthorized, does not appear to have resulted in substantial injury to the plaintiff. In the absence of some definite showing in this regard, they should not be discredited by removal from the position of trustees, conferred upon them by the statute. (Ferrell v. Evans. 25 Mont. 444, 65 Pac. 714.) Otherwise plaintiff is entitled to the relief he demands,- that is, to have the affairs of the corporation adjusted. The court therefore erred in sustaining the demurrer.
The disposition of the two questions so far considered renders it unnecessary to inquire whether the sections of the statute, supra, are in any respect repugnant to the provisions of the state or federal Constitution.
The judgment is reversed and the cause is remanded, with directions to the district court to overrule the demurrer.
Reversed and remanded.
Mr. Justice Holloway concurs.
Mr. Justice Smith not having heard the argument, takes no part in the foregoing decision. | [
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
Action in ejectment. The plaintiffs base their claim of title and right of possession to the ground in controversy upon an alleged location thereof as the Grotto quartz lode mining claim. It is alleged that a discovery was made thereon on January 16, 1909, and that the various steps required to completé the location were thereafter taken and the proper record made. Stripped of immaterial matters, the complaint alleges title, possession and right of possession in plaintiffs, an unlawful entry and ouster by the defendants on December 10, 1909, and the withhold in g of possession by them since that date, to the damage of plaintiffs in the sum of $1,000. In their answer the defendants put in issue the material allegations of the complaint, and allege title in themselves. At the trial it was disclosed that they base their claim upon a location of 'the ground as the Silver Star quartz lode, made on November 6, 1909. The jury found a general verdict for the defendants. They also made two special findings, viz.: (1) That the cubical contents of the discovery cut on the Grotto were less than 150 feet; and (2)- that no vein or deposit was disclosed therein. Judgment was entered accordingly. The plaintiffs have appealed from an order denying them a new trial. They have also attempted to appeal from an order overruling their motion to tax the costs included in the judgment.
1. It has been repeatedly held by this court that an appeal does not lie from an order taxing or refusing to tax costs. Such an order, though it follows the judgment in point of time, is in theory an intermediate order reviewable only on appeal from the judgment. (State ex rel. Pierson v. Millis, 19 Mont. 444, 48 Pac. 773; Murray v. Northern Pac. Ry. Co., 26 Mont. 268, 67 Pac. 625.) This being so, and there being no appeal from the judgment, the questions presented in connection with this feature of the case may not be examined. The attempted appeal from this order is therefore dismissed.
2. From the evidence it appears that the defendants entered upon the premises in controversy on November 6, 1909. At that time no one was in actual possession. Such possession as plaintiffs had was constructive. Therefore their right to recover depends upon the validity of the Grotto location through which they claim title; for though actual possession of mineral land upon the public domain without a location is valid, and will be protected against a mere intruder (1 Lindley on Mines, 216-219; Sparks v. Pierce, 115 U. S. 408, 29 L. Ed. 428, 6 Sup. Ct. Rep. 102), it will not avail as against one who peaceably enters for exploration or makes a valid location. Exclusive right of possession can be acquired only by a compliance with the mineral laws of tbe United States and the local laws, not inconsistent therewith, requiring discovery and location. (Belk v. Meagher, 104 U. S. 279, 26 L. Ed. 735; Deffeback v. Hawke, 115 U. S. 392, 29 L. Ed. 423, 6 Sup. Ct. Rep. 95; Davis’ Admr. v. Wiebbold, 139 U. S. 507, 35 L. Ed. 238, 11 Sup. Ct. Rep. 628; Belk v. Meagher, 3 Mont. 65; Russell v. Hoyt, 4 Mont. 412, 2 Pac. 25; Hamilton v. Huson, 21 Mont. 9, 53 Pac. 101; 27 Cyc. 55.) Mere naked possession must yield to the higher right acquired by one who has connected himself with the government.
It follows that one who, not having the actual possession, seeks to recover it from another, must show a superior right in himself, namely a valid location. The mineral lands of the United States being free and open to exploration to all alike, one citizen has an equal right with every other to go upon and occupy them for that purpose. He will be protected in this right, and, after his discovery and the posting of his notice, the rights of others are subordinated to his, whether he continues in actual possession or not for the time allowed by the local laws of the state or territory to complete his location. (Sanders v. Noble, 22 Mont. 110, 55 Pac. 1037; Helena Gold & Iron Co. v. Baggaley, 34 Mont. 464, 87 Pac. 455; Erhardt v. Boaro, 113 U. S. 527, 28 L. Ed. 1113, 5 Sup. Ct. Rep. 560; 27 Cyc. 560.)
The controversy at the trial, so far as plaintiffs are concerned, turned upon two questions of fact, viz.: (1) Whether they had made a discovery of mineral-bearing rock in place; and (2) whether they had done the amount of exploration work required by the statute to make their location valid. The evidence was in irreconcilable conflict upon both of these questions. While there was direct and positive testimony tending to show that in the open cut designated by plaintiffs as their discovery cut there was disclosed a vein several inches in thickness, bearing gold in paying quantities, and several pieces of mineralized rock, alleged to have been taken from the cut, were exhibited to the jury, the testimony of defendants’ witnesses tended as strongly to show that there was no disclosure of rock in place, or otherwise, of a mineral-bearing character. The same hopeless conflict is found in the testimony touching the cubical contents of the discovery cut. The statute (Rev. Codes, see. 2283) requires the locator to do his exploration work within sixty days after posting his notice. This may consist of a shaft sunk vertically at the point of discovery to the depth of at least ten feet from its lowest rim at the surface, or deeper if necessary to disclose the vein or deposit located, the cubical contents of which shall be not less than 150 feet, provided that it may consist of an open cut or tunnel which discloses the vein or deposit at a depth of at least ten feet below the natural surface of the earth, representing an excavation of at least 150 cubic feet; “provided, also, that where the vein, lode or deposit is disclosed at a less vertical depth than ten feet, any deficiency in the depth of the discovery shaft, cut or tunnel may be compensated for by any horizontal extension of such working, or by an excavation done elsewhere upon the claim, equaling in cubical contents the cubical extent of such deficiency; but in every case at least seventy-five cubic feet of excavation shall be made at the point of discovery.”
It is not necessary to cite authorities to the point that without a discovery there cannot be a valid location, nor to the point that a compliance with the requirements of the state statute is a necessary prerequisite. These, however, are in point: U. S. Rev. Stats., see. 2320 (U. S. Comp. Stats 1901, p. 1424); Sanders V. Noble, supra; Upton v. Larkin, 7 Mont. 449, 17 Pac. 728; Mares v. Dillon, 30 Mont. 117, 75 Pac. 963; Baker v. Butte City Water W. Co., 28 Mont. 222, 104 Am. St. Rep. 683, 72 Pac. 617; Butte City Water W. Co. v. Baker, 196 U. S. 119, 49 L. Ed. 409, 25 Sup. Ct. Rep. 211; Chrisman v. Miller, 197 U. S. 313, 49 L. Ed. 770, 25 Sup. Ct. Rep. 468.
The testimony of the defendants’ witnesses tended to show that at the time the location of the Silver Star was made the cut was in the same condition as it was when the Grotto location was completed, that by actual measurement its cubical contents did not exceed eighty feet, and that no work in any substantial amount had been done elsewhere upon the claim. We shall not undertake to state and examine the evidence in detail. This would serve no purpose other than to extend this opinion and demonstrate to counsel for plaintiffs that we have been as industrious in the examination of this ease as they were in their preparation for its presentation to this court. We are content to leave them to.presume that we have fully discharged our duty in this behalf. It is sufficient to say that it was the exclusive province of the jury to find the facts. Besides, having heard and observed the witnesses during the course of the trial, they subsequently, in charge of the sheriff accompanied by the presiding judge, visited the premises in controversy. They thus had an opportunity to verify the statements of the witnesses as to any discovery made by plaintiffs, as well as to judge for themselves of the cubical contents of the excavation there made. Their conclusion cannot be reviewed by this court. Hence the principal contention made by counsel for the plaintiffs, viz., that the evidence is insufficient to justify the verdict, must be overruled.
3. Counsel contend that the court erred in refusing to direct a verdict for the plaintiffs. This contention proceeds upon the assumption that, although the Grotto location was not shown by uneontradicted evidence to be completed and therefore valid, nevertheless the plaintiffs had an equal right with the defendants to occupy the ground covered by it, in order to complete their location pending the exploration being made by the latter, looking to the final location of the Silver Star claim. Until a discovery had been made by the defendants and notice of location posted, the right of the parties to go upon the ground was equal; for, upon the assumption that the plaintiffs had not made a discovery or complied with the statute by doing the necessary excavation work prior to the record of their location, the ground was, at the time of defendants’ entry, still a part of the public domain and open to location. By discovery and the posting of notice of claim the discoverer acquires a right to make a location to the exclusion of one who thereafter enters and makes a location pending the time allowed by the statute (Rev. Codes, sec. 2283) to complete the marking of the boundaries and the required excavation work. Under this condition, the rights of tbe second locator are so far subordinated to those of the first that, to the extent the two locations are in conflict, the second is invalid. (Sanders v. Noble, supra; Helena Gold, & Iron Co. v. Baggaley, supra; Street v. Delta Min. Co., 42 Mont. 371, 112 Pac. 701.) Subject to this limitation, the rights of all persons to enter upon and make explorations of the public mineral lands with the purpose of making locations upon them are equal, and the one who first makes a discovery has the exclusive right to make the first location. (Hanson v. Craig, 170 Fed. 62, 95 C. C. A. 338.) It must, therefore, follow, as counsel contend, that, if during the continuance of the common occupancy one person ousts another from his possessio pedis, the law will restore such other to his possession.
The evidence shows that the defendants posted their notice on November 6, 1909. They thereafter continued work until, as they claim, they finally completed their location. During the latter part of November or the early part of December, plaintiffs employed a miner to do excavation work in the Grotto discovery cut. At the suggestion of defendant McNally that there would probably be litigation over the respective rights of plaintiffs and defendants because of their conflicting locations, and it would be best to leave the excavation as it then was, the work was discontinued. About the same time the plaintiffs employed another miner to do the work at the same place. While so engaged, he shoveled out from an old excavation near by about 250 pounds of material which had been shoveled into it during the process of excavation of the discovery cut. At the instance of defendant McNally this miner also stopped work. So far as the record shows, there was neither threat of violence nor coercion. On the contrary, the evidence tends to show rather that plaintiffs acquiesced in the stopping of the work at this point, and that, instead of suffering an unlawful ouster at the hands of defendants, the plaintiffs were content to rest their claims exclusively upon the Grotto location and abide the consequences, being entirely willing at the suggestion of McNally to allow the physical conditions as they were to stand undisturbed as the evidence of their rights. “An ouster is a wrongful dispossession or exclusion of a party from real property who is entitled to the possession.” (Anderson’s Law Dictionary.) The evidence referred to falls far short of showing any wrong on the part of the defendants, except upon the assumption that the Grotto location was valid, whereas its validity was the vital issue in the case. There is no evidence tending to show that the plaintiffs were excluded from working at any other point within the boundaries of the Grotto location, or that they were even requested to abstain from work. Furthermore, the plaintiffs were not upon the ground asserting the right to complete their exploration work, but were asserting an exclusive right to possession under the Grotto location.
4. Complaint is made that the court erred in refusing plaintiffs’ requested instructions 7 and 8, and in giving instructions 1 and 3, as follows:
“No. 7. You are instructed that the defendants would have no right as against the plaintiffs in this case until they had first made a valuable discovery of mineral upon the ground in controversy, and that they must establish the fact of such discovery by a preponderance of the evidence.” (Refused.)
“No. 8. You are further instructed that, if you find that the plaintiffs fully complied with the law in locating the Grotto lode before any discovery was made of valuable mineral thereon by the defendants, then such discovery by said defendants, even if you believe it to have been made by them, would give them no rights as against the plaintiffs, and you must find for the plaintiffs.” (Refused.)
“No. 1. In this case a controversy exists between the plaintiffs and defendants for the ground which was located by the plaintiffs as the Grotto and located by the defendants as the Silver Star, and the only questions material for you to consider in connection with this controversy, aside from damages in case you find for plaintiffs, are whether the plaintiffs in connection with their location of the ground performed such discovery work as the law requires, and whether they discovered a vein, lode or deposit so as to authorize its location by them as mineral.” (Given.)
“No. 3. In this ease there is no evidence that work was done elsewhere than at the point of discovery before the attempted location by the defendants, and, unless the plaintiffs have established by a preponderance of the evidence that the cubical contents of the cut or excavation made by them was 150 feet or more, then your verdict should be for the defendants.” (Given.)
Plaintiffs’ request numbered 7 was properly refused. It involves the assumption that the plaintiffs’ location was valid, whereas, as already said, this was the vital issue to be determined by the jury.
It assumes, also, that plaintiffs were entitled to a verdict solely upon the ground that they had attempted to make the Grotto location, unless the defendants had shown by a preponderance of the evidence that they had made a discovery at the time they posted their notice. The plaintiffs, not being in possession at the time of defendants’ entry, could not recover except upon a showing of title in themselves by a preponderance of the evidence, without regard to what the defendants had done in the way of exploration and discovery. Plaintiffs could re- . cover only upon the strength of their own title, and not upon the weakness of that of defendants.
Nor was there error in the refusal of plaintiffs’ request numbered 8. As an abstract proposition of law we think it is correct, the word “valuable” appearing therein, which is the subject of criticism by counsel for defendants, not being misleading in view of the definition of the terms “vein,” “lode,” and “deposit” as given by the court in another instruction. The issues upon which the jury were required to find, apart from that of damages, were whether the plaintiffs had made a discovery, and had done the necessary work to complete the Grotto location. In other instructions they were told that, if they found both these issues for plaintiffs, their verdict should be returned accordingly, and that it should include such amount of damages as they thought the plaintiffs entitled to under the evidence. It seems impossible that under this condition of the instructions the plaintiffs were prejudiced by the refusal of this request.
The criticism of instruction No. 1, as given, is that it withdrew from the jury the question of damages. This complaint is without merit. The instruction speaks for itself. Inasmuch as the jury found against the plaintiffs on the main issue, it was not necessary for them to consider the question of damages. Even so, at the proper place in the charge the court told the jury that, if they found the main issue for the plaintiffs, they should also include in their verdict damages in such amount as the evidence justified.
It is said of instruction No. 3 that the court erred in telling the jury that there was no evidence that excavation work had been done at any other place than at the point of discovery before the “attempted location by the defendants.” A careful reading of the evidence shows this statement to be substantially true. The only evidence tending to show that plaintiffs had done any work other than that done in the discovery cut was that referred to above, which consisted in the shoveling out of the old excavation 250 pounds of material. The evidence elsewhere showed that most of the débris taken from' the cut had been thrown into.this excavation. At best, the work was not new, but was confined merely to moving a second time the debris originally taken out. But aside from this, there was no statement by any witness as to the cubical contents of the resulting excavation. The evidence was therefore not of such a character as to aid the jury in making up their conclusion. Hence the court did not err in excluding it, as it impliedly did in the instruction complained of. But, aside from these considerations the work in question was done after the date at which the defendants testified they had made their discovery and posted their notice. Assuming that these acts had been done by them, the plaintiffs, not having theretofore made a valid location, could not tack work then done to that theretofore performed, and thus render nugatory the discovery made by defendants.
5. The trial was concluded on March 9, 1910. At the close of the evidence the judge with the jury in charge of an officer went to view the discovery cut upon the Grotto claim. The plaintiff Ferris was present, as was also defendant McNally. The latter had one Gleason to shovel out of the cut such debris as had fallen into it during the previous winter. Whether this work was ordered by the judge does not appear. After the work was done, one of the jurors requested Ferris to point out the vein or lead about which he had testified. Ferris thereupon got into the cut, but, after moving some loose material therefrom with a shovel, stopped woi’k, and did nothing further, being unable or unwilling to respond to the juror’s request. Contention is made that the plaintiffs suffered prejudice in that the jury received evidence out of court. The statute (Eev. Codes, sec. 6747) permits the jurj to have a view of the property which is the subject of litigation, or of the place at which any material fact occurred. The purpose of the provision is to enable the jury to apply the testimony of the witnesses to the observed conditions about which they have spoken, and also to determine the truth of statements made by them with reference to these conditions. (Ormund v. Granite Mt. Min. Co., 11 Mont. 303, 28 Pac. 289.) Otherwise the inspection would be a mere idle ceremony without any useful purpose. The incident complained of, though perhaps irregular in view of the provision of the statute that the persons appointed by the court to attend the jury on behalf of the parties, may not communicate with them further than to point out the property or the place at which any material fact occurred, and that no other person shall speak to them on any subject connected with the trial, yet, under the circumstances, the plaintiff Ferris was so far at fault by taking part in it that he cannot allege prejudice. As appears from the affidavit of plaintiff’s counsel, Ferris had been given explicit instructions not to communicate with the jury or make any statement in their presence. He was not under any obligation to respond to the request of the juror. In view of the advice of his counsel, he must have known this. So, therefore, whether he was unable to respond or ehanged his mind and for that reason refused to do so, he cannot complain that the jury, perhaps, interpreted his silence against him.
With reference to the work done by Gleason in shoveling the loose material out of the discovery cut, it may be said that this could not possibly have prejudiced the plaintiffs, for the reason that it disclosed to the jury exactly the condition in which the cut was at the time it was completed by the plaintiffs.
We have disposed of this case as one at law. Counsel for plaintiffs insist in their briefs that it is equitable in character in the nature of an action to quiet title. If we accept this as the proper theory and apply to it the liberal mode of review applicable to eases in equity, the questions arising upon the instructions as well as the incident attending the inspection made by the jury become wholly immaterial. The findings of the jury are, in equity cases, to be viewed as the findings of the judge and as emanating from him. Therefore errors in the instructions, as well as irregularities which may have occurred in the presence of the jury, are not to be taken into consideration in determining the propriety of the findings. The office of the jury in such eases is merely advisory. (Lawlor v. Kemper., 20 Mont. 13, 49 Pac. 398; Power v. Lenoir, 22 Mont. 169, 56 Pac. 106; Wetzstein v. Largey, 27 Mont. 212, 70 Pac. 717.) Any error committed by the court in submitting the case to them is deemed to have been corrected by the judge when he came to consider the adoption of their findings.
The order is affirmed.
•Affirmed.
Mr. Justice Smith and Mr. Justice Holloway concur.
Rehearing denied March 4, 1912. | [
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MR. JUSTICE SMITH
delivered, the opinion of the court.
This is the second time this case has been before the court. (See Knuckey v. Butte Electric Ry. Co., 41 Mont. 314, 109 Pac. 979.) After remittitur filed in the district court, the plaintiff amended his complaint so as to charge as follows: “That while plaintiff was such passenger, and before the said car reached his aforesaid destination, plaintiff notified the defendants that he wished to get off the car at the crossing of the aforesaid streets, Warren and West Galena; that the defendants, in compliance with this direction from the plaintiff, slowed up said car to a very slow pace, to-wit, to about a walking pace; that plaintiff, believing that the car would come to an immediate stop, went upon the front steps and platform of said car preparatory to alighting from said car when it came to a stop; that the defendants did not stop the said car at said crossing, but ran it a short distance, to-wit, about a hundred feet, past said crossing at said slow rate of speed, and then, while plaintiff was still standing upon the front platform and steps of said car, with the knowledge and consent of the defendants, find waiting for and still thinking that the car would come to an immediate stop, the defendants in disregard of their duty to the plaintiff, so carelessly and negligently managed, operated, and ran said car, and so carelessly and negligently, suddenly and violently accelerated the speed thereof, and so negligently caused the car to lurch forward violently, that plaintiff was violently thrown from said car to the ground, and by reason .thereof” received Ms injuries. The defendants answered. A trial was had before a jury, which returned a .verdict for the plaintiff in the sum of $10,000. From a judgment on the verdict and an order denying a new trial, defendants have appealed.
1. It is contended that the court erred in • allowing the amended complaint to be filed, for the reason that it states a different cause of action from that set forth in the original complaint. The original pleading charged negligence in carelessly starting the car and putting the same in motion “by a sudden and violent start without allowing plaintiff sufficient time to get off” at Warren street, “and in consequence thereof plaintiff was suddenly and violently thrown to the ground.” We find no reversible error in the ruling of the court. In both complaints the defendants were charged with so negligently operating the car that plaintiff was violently thrown therefrom to the ground. This is the gravamen of the charge. No variance is to be deemed material unless it has actually misled the adverse party to his prejudice. The defendants could not have been surprised or misled by the testimony offered in support of the amended complaint, because substantially the same evidence was produced at the first trial; and it was on the ground of a material and fatal variance between the allegations of the original complaint and plaintiff’s testimony that such new trial was ordered. (See, also, Flaherty v. Butte Electric Ry. Co., 43 Mont. 141, 115 Pac. 40.)
2. Plaintiff testified that when he stepped from the car to the platform he said, “Warren,” referring to Warren street, in an ordinary and natural tone of voice. He was then asked to speak the word as he did on the night of his injury. His answer was: “Well, I stepped out, and I said the word ‘Warren.’ ” Defendants moved that the answer be stricken out on the ground that plaintiff had already testified concerning the tone of his voice, and it was for the jury to determine what his ordinary tone of voice was, after listening to his testimony. The motion was denied. We find no prejudicial error in the ruling. Plaintiff also testified: “When I said ‘natural tone of voice,’ I meant the tone of voice one would use when he stepped out on the platform to notify the motorman.”
3. Plaintiff was allowed to testify over objection that on other occasions, desiring to have the car stopped, he had used the word “Warren” to indicate his wish to alight at that street. We take judicial notice that this is the common practice." Whether the motorman heard the word as pronounced by the plaintiff on the night in question was a matter for the jury to determine, by inference or otherwise, from all of the facts and circumstances of the case as detailed by the various witnesses.
4. While the plaintiff was under cross-examination, he said, “I had ridden there before many times.” He was then asked by defendants’ counsel: “And were the conditions there the same as they had always been prior to that time when yoxi were on the car? Mr. Maury: We object; we were not allowed to go into the -conditions; I don’t think it is fair on the part of the other side to go into the conditions. The Court: The objection is sustained; it is not proper cross-examination.” It is now insisted that the court should have allowed the witness to answer, and an elaborate argument is advanced wherein many suggestions are made concerning the competency, relevancy, and materiality of the inquiry. We think the court unduly restricted the cross-examination, and again suggest the propriety of allowing the fullest scope for such examinations, to the end that the jury may be advised of all facts having a legitimate bearing upon the issues presented. We have no doubt, however, that had the same argument concerning the relevancy and competency of the testimony been presented to the court below, in substance, as has been made here, the objection would have been overruled. It is the duty of counsel to make the record show prejudieal error, and, even upon cross-examination, a reasonable effort should be made to advise the court of the object with which a question is asked. (State v. Byrd, 41 Mont. 585, 111 Pac. 407.) We cannot say that the action of the court affected the result Of the case. In fact, we are satisfied that it could not have done so.
5. Plaintiff’s witness Boulter was asked on redirect examination whether he had any expectation of getting a reward for his testimony. Before objection could be interposed, he answered, “None whatever.” Defendants’ counsel moved to strike the answer. The motion was denied, and the ruling is assigned as error. The point advanced is that the plaintiff was thus allowed to bolster up the testimony of his witness. We think the error, if any, was immaterial in any view. The record discloses that the witness had already testified: “Nobody has ever promised me anything in this case, neither the plaintiff nor the plaintiff’s attorney; I have got no promise whatever.”
6. Defendants interposed a motion for a nonsuit and also a motion for a directed verdict, both of which were overruled. These motions were based, primarily, upon an assumption that the testimony failed to disclose knowledge on the part of the motorman that plaintiff wished to alight; that he did not hear the word “Warren” pronounced by the latter, and had no knowledge that he was on the platform of the car preparatory to getting off. The second contention is that plaintiff was guilty of contributory negligence as a matter of law. Plaintiff testified: “When I got on the platform, I says the word ‘Warren’ to the motorman, Mr. Bundblad. When I said this, I might have been a distance of about two feet from him, but it is close on the platform; you would naturally run against him in coming out of the car. I spoke this word in my natural tone of voice. Just after I said this word ‘Warren,’ the car slowed down as it neared the east crossing. It slowed down to about four or five miles an hour, an ordinary walking pace, at the last crossing of Warren and East Galena. At the time I was standing on the platform; I was standing there ready to step down when the car stopped, and when it got down to this very slow speed, I stepped down on to the top step. I was then facing east, with my hand on the front handrail, my right hand. From the last crossing of Warren the ear proceeded at that” rate of speed about a hundred or a hundred and fifty feet. Then it started ahead violently with a terrible jerk and threw loose my hand and threw me to the ground. After I went out on the front platform, the motorman slowed up the car when I mentioned the word ‘Warren’ to him. He shut the power off to slow it up. I didn’t see him do anything. • I heard the controller click around that shuts the power off.” Whether the motorman heard the word “Warren” as spoken by the plaintiff, and whether he decreased the speed of the ear in response thereto, were, we think, questions for the jury to decide. It was their province to draw such reasonable inferences from all of the facts and circumstances as they deemed warranted by the evidence. We cannot say, from the record, that it was an unreasonable inference that Rundblad heard the word “Warren” and accordingly “slowed up.” (See Jenkins v. Northern Pac. Ry. Co., 44 Mont. 29b, 119 Pac. 794; State v. Truskett, 85 Kan. 804, 118 Pac. 1047-1051, a very interesting and novel case.)
We are also of opinion that the question of contributory negligence was properly submitted to the jury. It is doubtless true that the plaintiff’s testimony was open to serious doubts as to its credibility, and that the jury might well have determined that he jumped from the car while it was in motion, not with an idea that it was about to stop, but rather because he was near his home and had purposely ridden beyond Warren street to avoir! walking the distance traversed by the car after that street was passed. But all of these matters have been laid at rest by the verdict. We are in the same state of mind in this case as we were in Flavin v. Chicago, B.& Q. R. Co., 43 Mont. 220, 115 Pac. 667.
7. Defendants’ counsel requested the court to charge the jury that the plaintiff could only recover by proving the specific allegations of his complaint relating to negligence. The court struck out the word “specific” on motion of counsel for the plaintiff. There was no error in so doing. The instruction was correct in either form. The word “specific ’’ added nothing to it. The court clearly defined the issues to be determined by the jury and instructed them that the material allegations of the complaint must be proven by a preponderance of the evidence. This was all that was necessary in the present case.
8. There is a suggestion in the brief that the complaint upon which the plaintiff went to trial does not state facts sufficient to constitute a cause of action. We think the complaint is sufficient.
9. In- our judgment the damages awarded are excessive, but not sufficiently so to evidence passion or prejudice in the minds of the jurors. Plaintiff has lost all of the toes from one of his feet. Dr. McCarthy testified that he had recently examined tbe foot and found an amputation “taken right back of the articulation of the joints.” The foot is still tender and there is a ‘ ‘ callous over the end of the amputated surface. ’ ’ In the opinion of the surgeon the foot “is not as strong as the other foot. It is impaired. He can’t use it as well. It is smaller than the other foot, smaller than the other leg. He can’t walk as well. The ball of the foot is gone. There is no spring to it, no action on the muscles like a normal foot, and consequently atrophy from inactivity. It will remain just about the way it is now. An injury of that kind impairs a man’s usefulness for the remainder of his life. It will cause recurring pains all his life, once in a while. The callous should be removed once every week or ten days. Whenever that is done it will cause pain. There is, I think, a permanent cure for the callous. By operating I think that could be permanently removed and the painful condition would not continue. That would be a painful operation. ” Plaintiff was twenty years of age at the time of the injury, and is now twenty-four years old. It was necessary to operate three times before the foot healed and finally to graft skin thereon from his leg. He suffered intense pain during the operations and still suffers when the callous portion is removed. He lost six months’ time on account of the injury. He is a miner by occupation and before his injury received $4 per day in wages. He has resumed work at substantially the same wages; has never lost any time because of the injury, other than when the mine was shut down and all of the men were idle. He walks with the other men to and from the mine where he is employed, a distance of three-quarters of a mile or more, but occasionally rides home with the shift boss. He gets' the same amount of time as every other miner in the mine. He has “worked as steadily as the Mountain View mine has, since he returned to work and also got married in the meantime.” He has been out duck hunting once since his injury. He uses an artificial appliance on his injured foot to prevent the sensitive part from touching anything. His shift boss testified that he was a good, steady worker; that he had never observed anything to disqualify him from performing his work as a miner; that he had known and observed him for over two years and did not discover that he had an injured foot until about two weeks before the trial; that he was doing the same work as other miners, receiving the same wages.
The cause is remanded to the district court of Silver Bow county, with directions to grant a new trial unless, within thirty days after remittitur filed, the respondent shall consent in writing that the judgment for damages be reduced to $6,000. If such consent is given, the judgment shall be modified accordingly as of the date of its original entry, and, together with the order denying a new trial, will stand affirmed. That part of the judgment relating to costs in the court below is not to be disturbed. Respondent to recover costs on appeal.
Remanded.
Mb. Cheep Justice Brantly and Mb. Justice Holloway concur. | [
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MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
Some time prior to the commencement of this action, the city council of Ealispell, by ordinances duly passed and approved, created three special improvement districts, the first for constructing sewers, and the other two for building sidewalks. These districts included property belonging to and used by School District No. 5 of Flathead county for public school purposes-exclusively. The school district resisted the efforts of the city to collect any portion of the expense incurred for the improvements, and this action resulted. The cause was tried upon an agreed statement of facts. The district court found in favor of the school district and rendered judgment, from which the city appealed. There is but a single question presented, viz.: Is the property of the school district which is used exclusively for public school purposes exempt from paying assessments for special improvements?
Under constitutional and statutory provisions similar 'to our own, like questions have been before the courts for many years, and it seems somewhat strange that at this late day the statutes should be found in the same chaotic condition as they were thirty years ago, when the extreme difficulty of properly solving the question propounded above was first called to public attention. These special assessments, though a species of taxation, are not taxes; and it is held unif ormly that constitutional and statutory provisions exempting property from taxation have no application to special assessments for improvements which, presumptively, add to the value of the property involved an amount equal to the assessment levied. However, the courts are about evenly divided numerically upon the question whether property devoted exclusively to public use is liable for these special assessments. Many respectable authorities hold such property exempt. Any attempt to explain or reconcile the conflicting decisions is useless. The leading eases most frequently cited in support of the exemption are: Board of Improvement v. Little Rock School Dist., 56 Ark. 354, 35 Am. St. Rep. 108, 16 L. R. A. 418, 19 S. W. 969; Pittsburg v. Sterrett Subdistrict School, 204 Pa. 635, 61 L. R. A. 183, 54 Atl. 463; Worcester Co. v. Worcester, 116 Mass. 193, 17 Am. Rep. 159; Atlanta v. First Presbyterian Church, 86 Ga. 730, 12 L. R. A. 852, 13 S. E. 252; City of St. Louis v. Brown, 155 Mo. 545, 56 S. W. 298 ; Big Rapids v. Supervisors, 99 Mich. 351, 58 N. W. 358; City of Toledo v. Board of Education, 48 Ohio St. 83, 26 N. E. 403; Witter v. Mission School District, 121 Cal. 350, 66 Am. St. Rep. 33, 53 Pac. 905. Neither the California nor Ohio court gives any reason for its conclusion. The decision from Arkansas was rendered by a divided court, the .Chief Justice delivering a forceful dissenting opinion. The Georgia case is not directly in point. The other courts above proceed generally upon the theory that property devoted to public use is presumptively exempt from any sort of tax or assessment; that, though the state may consent to have such property charged, it does not do so, unless, by express legislative authority or by clear implication, it has manifested such intention; that there is an implied exemption in favor of such property; that even a statute in general terms, such as our own section 3396, Revised Codes, which apparently charges all property within the improvement district with its ratable proportion of the expense of the betterment, does not apply to property devoted to public use, particularly so in cases where the legislature has provided that the assessment becomes a lien upon the property affected. But these courts have encountered difficulty in suggesting any valid reason for the conclusion reached. The supreme court of Georgia, in Atlanta v. First Presbyterian Church, above, apparently appreciating this difficulty, has with perfect frankness explained its position—which we think is fairly characteristic of the other courts named —as follows: “That the public property of the United States, the state, the county, or the city was intended to be dealt with thus is so improbable that we can have no hesitation in holding that an implied exception as to all public property can and should be ingrafted upon the Act by construction.” Even these courts which thus imply an exception in favor of property devoted strictly to public use hold that property, such as churches, hospitals, cemeteries, and the like, though exempt from taxation, are nevertheless subject to special assessments for improvements.
Some of the leading eases holding that property devoted exclusively to public use is liable for special assessments are: Franklin Co. v. Ottawa, 49 Kan. 747, 33 Am. St. Rep. 396, 31 Pac. 788; Adams Co. v. Quincy, 130 Ill. 566, 6 L. R. A. 155, 22 N. E. 624; Edwards v. Jasper Co., 117 Iowa, 365, 94 Am. St. Rep. 301, 90 N. W. 1006; In re Howard Avenue, 44 Wash. 62, 120 Am. St. Rep. 973, 12 Arm. Cas. 417, 86 Pac. 1117; Hassan v. Rochester, 67 N. Y. 528; Board of Education v. People, 219 Ill. 83, 76 N. E. 75; Roosevelt Hospital v. New York, 84 N. Y. 108; New Orleans v. Warner, 175 U. S. 120, 44 L. Ed. 96, 20 Sup. Ct. Rep. 44. These courts proceed upon the theory that liability for taxes, of whatever character, is the rule, and exemption the exception, and therefore the general language of a statute, such as our own, includes all property, public as well as private, and that the burden is upon the party claiming an exemption to show an exception in his favor written in the law in express terms, or clearly implied from the language employed; that these improvements are specially beneficial to the property (in this instance to the property of School District No. 5); that this benefit inures to all the property owners in the school district; and that the school district should pay for the benefit, and not impose the burden upon the few other property owners who happen to be within these particular improvement districts. In Cooley on Taxation, second edition, 653, the author says: “Even public property is often subjected to these special assessments; there being no more reason to excuse the public from payment for such benefits than there would be to excuse from paying when property is taken under eminent domain.” With the theory announced by the courts last mentioned, and with the conclusion of the author just quoted, we agree. If there is an implied exemption from taxation, strictly speaking, in favor of public property, in the absence of constitutional or statutory declaration upon the subject, then the provisions of section 2, Article XII, of our Constitution, and section 2499 of the Revised Codes, so far as that section relates to public property, are meaningless and their enactment a work of supererogation; but such is not the case. It was not the intention of the framers of our Constitution to write into our fundamental law any useless or meaningless phrases; and the very fact that they declared'an exemption from taxation in favor of public property is, to say the least, a recognition of the principle that without such express exemption that property would.be subject to taxation, along with the property of the private individuals, corporations, and others. If, then, there was necessity for making an express exemption in favor of public property from taxation, strictly speaking, for the stronger reason is it necessary that there should be an express exemption if such property is to be freed from paying for improvements to such property.
It is insisted that the authority of the trustees of the school district is limited; that the law does not authorize the expenditure of the school moneys for such purposes, except upon a vote of the qualified electors; but with this we do not agree. There' are many expressions to be found in the school law, notably in section 881, Revised Codes, giving the school board ample authority to meet an expense of this character. Furthermore, section 1482, Revised Codes, gives to the state board of health supervision over the sanitation of school property, and section 1488 gives the same board power to condemn school property, if found in such unsanitary condition as to endanger the health of those who may frequent the same. If, then, the state board of health should find that in a thickly settled community like Kalispell, the school buildings are not provided with toilets connected with sewers, but that the several hundred school children are compelled to use vault outhouses, thereby endangering the health of the entire community, and should order the school board to provide sanitary means by installing proper toilets and connecting the same with public sewers, or with a private sewer system, the authority of the board of health to enforce such regulation could not be questioned; and ample authority is to be found under which the school board could provide the necessary funds to meet such expenses.
The mere fact that the statute under which these special assessments are made provides that the assessment shall be a lien upon the property is not a valid objection to the assessment. The state may, if it so elects, permit a lien to be imposed upon property devoted exclusively to public use; but the validity of the assessment does not depend upon the means by which the payment is to be enforced, and if the assessment is valid, and the proceeding by foreclosure of the lien is not available, because of the character of the property, the right will not fail because of failure of a specific remedy, but the courts will invoke any appropriate remedy to meet the exigencies of the particular case.
Our statute authorizing these special assessments provides in general terms that they shall be paid by the entire improvement district; each lot or parcel of land within the district to be assessed for that part of the whole cost which its area bears to the area of the entire improvement district, exclusive of streets, alleys, and public places. (Sec. 3396, above.) This language is general. It includes all the property within the improvement district; and we are not at liberty to ingraft upon the statute exceptions which are not there. But it is suggested that the concluding clause in section 3396, “exclusive of streets, alleys and public places,” is broad enough to include property devoted exclusively to public use, such as school property. But that construction violates the elementary rules of statutory construction; and certainly, if the legislature intended to exempt property devoted to public purposes, it could have found apt terms by which to express its meaning. The rule exemplified by the expression “ejusdem generis” requires that the words “public places” be read to mean public places, such as streets or alleys. After all, the question before us is largely one of public policy.
We hold that these improvements are specially beneficial to the school property — in fact, considering the surrounding circumstances, they might well be held to be absolute necessities; that good faith, fair dealing, and justice require that the school district should pay for the benefits which its property receives, and not impose its burdens upon the other property owners who happen to be within these particular improvement districts.
The judgment is reversed, and the cause is remanded, with directions to the district court to enter judgment in favor of plaintiff.
Reversed and remanded.
Mr. Chief Justice Brantly and Mr. Chief Justice Smith concur. | [
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MR. JUSTICE SMITH
delivered the opinion of the court.
The complaint in this action charges that on the third day of June, 1908, and for a long time prior thereto, the defendants were engaged in the construction of a railroad grade and roadbed through the county of Granite, and through and adjacent to the premises of the plaintiff; that they constructed said roadbed and grade close to the Hellgate river, and in so constructing the same at and near the premises of the plaintiff they “negligently made and caused to be made an excavation and cut [hereafter called a ‘borrow pit’] close to said river, and to a depth below the natural bed of said river, and negligently removed and caused to be removed from said cut and excavation material for their roadbed without permitting an embankment of sufficient size or strength to remain, so that said river would stay in its natural channel, by reason whereof, on or about the third day of June, 1908, the said river left its natural channel, and by reason of the insufficiency of said embankment the same was washed away by said river so leaving its natural channel, and the water of said river flowed through the aforesaid cut to and upon the premises of plaintiff, flooding said premises and depositing thereon large quantities of gravel and sand,” destroying her crops and filling up her ditches, etc., to her damage in the sum of $8,800. The defendants answered separately, to the effect (1) that they were not guilty of the alleged acts of negligence complained of; (2) that plaintiff was guilty of contributory negligence in failure to use due care in the construction of her ditches; and (3) that the alleged damages were the result of “an unusual, excessive, and unprecedented rainfall and flood which no care, caution, or human foresight could have prevented,” to-wit, of what is commonly termed an- “act of God.” These affirmative allegations were put in issue by a reply. The cause was tried to the district court of Granite county sitting with a jury. A verdict for the plaintiff in tbe sum of $2,000 was returned. From a judgment on tbe verdict, and also from an order denying a new trial, tbe defendants bave appealed.
Tbe record contains over 800 printed pages of evidence. After patiently reading tbe same, we conclude as follows:
1. "Whether tbe embankment (called in tbe testimony a “berme”) was negligently allowed to remain in tbe condition in which it existed during tbe first three to five days of tbe month of June, 1908, was a question of fact for tbe jury to decide.
2. It was proven beyond controversy that a great flood and high water occurred at about tbe time in question, and was of extraordinary height and violence on either tbe third, fourth or fifth day of tbe month.
3. "Whether tbe berme went out, or was washed away, on tbe 3d of June, before tbe period of extraordinary high wkter and on account of tbe negligent manner of its construction, or on a later date, by reason of tbe force of tbe unprecedented flood, was likewise a question of fact for tbe jury to determine.
1. The court, by instruction No. 3, advised tbe jury as follows: “Tbe only burden tbe law imposed upon the railway company when it made said borrow pit was to leave sufficient space between it and tbe river to prevent tbe ordinary flood waters of tbe river, and such floods as could bave been reasonably anticipated by tbe exercise of ordinary foresight and prudence, from breaking through tbe said space or berme so left; and if tbe railway company did so leave sueb space or berme at tbe place in question, tben no liability attached to it on that account. Therefore,, before you can return a verdict for the plaintiff in this action because of the making of the said borrow pit or excavation at the place in question, you must find from a preponderance of the evidence that the space between the'borrow pit and the river was unskillfully, carelessly, and negligently left so narrow and weak as that it would not resist or sustain the weight of the waters of the said river at ordinary floodtime, and at such floods as could have been reasonably anticipated by the exercise of ordinary foresight and prudence, and that such negligent and unskillful construction of its road was the direct cause of the damage to the plaintiff’s land, and, unless you so find, then said defendant did all that it was in law required to do, and your verdict must be for the defendants on this issue.”
The court also gave instruction No. 5, as follows: “The court instructs the jury that it was not the duty of the defendant railway company to foresee and prepare against unprecedented floods as such floods are herein defined; in other words, it was not its duty to prepare against the act of God. Its duty was to prepare against only ordinary flood waters, and such floods as could be reasonably anticipated by the exercise of ordinary foresight and prudence. If, therefore, you find by a preponderance of the evidence the defendant railway company exercised ordinary prudence and care in the construction of its railway, considering the character and nature of the stream, the lay of the territory which it drained, and the ordinary floods which occur in that vicinity, and such floods as could be reasonably anticipated by the exercise of ordinary foresight and prudence, then said defendant was not guilty of negligence in the construction of its railroad at the place in controversy.”
The court’s instruction No. 6 reads as follows: “Before the plaintiff can recover against the defendants, the plaintiff must show that the proximate cause of the injury or damage to plaintiff’s land and property was the negligence of said defendants; it must appear from the evidence that the injury or damage was the natural and probable consequence, of the negligence of the defendants, and that said injury or damage ought to have been foreseen by defendants in the light of the attending circumstances. The first requisite of the proximate cause is the doing or omitting to do an act which a man of ordinary prudence could foresee might naturally and probably produce the injury complained of; and the second requisite is that such act or omission did actually cause the injury. If, therefore, you find from a preponderance of the evidence that in making said borrow pit, as the evidence shows it was made, a person of ordinary prudence would not have foreseen the flood of June, 1908, or if you find that said lands of said plaintiff would have been injured» had said borrow pit and berme never existed or been made, then the making of said borrow pit and berme, as the evidence shows the same was made, was not the proximate cause of the injury .or damage to plaintiff’s land and property, and defendants are not liable in law.”
No. 7 reads thus: ‘‘The court instructs the jury that if you believe from the evidence in this case that the defendant railway company constructed its railroad in a manner approved by competent civil engineers, and so as to resist the ordinary recurring floods or rises in the Hellgate river, and such floods as could be reasonably anticipated by the exercise of ordinary foresight and prudence, and that the same did withstand and resist.the flood of 1908 until after it had passed all previously known high-water records, and that when the rise in the river or flood had passed such known high-water marks the waters washed away the property of the plaintiff, then said defendants were not guilty of negligence; but the accident was the result of the unusual flood and high water, and what is commonly called the act of God, and your verdict should be for said defendants.”
We think these instructions fully covered the main issue in the case and rendered further directions unnecessary. However, the court also gave this instruction: ‘‘No. 10. You are further instructed that by the act of God is meant those events and accidents which proceed from natural causes and cannot be reasonably anticipated or guarded against, such as unprecedented freshets, floods, earthquakes, cyclones, lightning, and such like. For injuries occurring by any of these means, there is no liability, provided reasonable and ordinary care is exercised to guard against such occurrences.” In our judgment, this instruction does not correctly state the law. It, in effect, declared the defendants responsible for failure to anticipate and guard against an act of God. We quote with approval the following language taken from the opinion of the court in Kansas City P. & G. R. Co. v. Williams, 3 Ind. Ter. 352, 58 S. W. 570: “The rule of law in such cases is that the defendant is only required to take precautions against ordinary storms which occur in the vicinity; and if the damage would have occurred by the act of God, notwithstanding the obstruction, even if there were negligence on the part of the defendant, damages cannot be recovered. * * # In this ease, unlike most eases in which the act of God is invoked as a defense, the act of negligence did not occur during the storm, or after it was over. Therefore the act is only made a negligent act by comparison with the duty which defendant owed before the storm. It was not defendant’s duty to foresee and prepare against an unprecedented storm; in other words, it was not defendant’s duty to prepare against ‘the act of God.’ Its duty was only to prepare against ordinary storms.” (See, also, Coleman v. Kansas City, St. J. & C. B. R. Co., 36 Mo. App. 476; Polack v. Pioche, 35 Cal. 416, 95 Am. Dec. 115; Baltimore & O. R. Co. v. Sulphur Spring Ind. School Dist., 96 Pa. 65, 42 Am. Rep. 529; American Locomotive Co. v. Hoffman, 105 Va. 343, 8 Ann. Cas. 773, 6 L. R. A., n. s., 252, 54 S. E. 25; Eagan v. Central Vermont Ry. Co., 81 Vt. 141, 69 Atl. 732; Emery v. Raleigh & G. R. Co., 102 N. C. 209, 11 Am. St. Rep. 727, 9 S. E. 139; Missouri K. & T. Ry. Co. v. Bell (Tex. Civ. App.), 93 S. W. 198.)
The court also gave, instruction No. 11, as follows: “You are further instructed that, even if you should find that the flood in question was unprecedented, still if you find that the embankment was defective, due to its insufficiency as to height or thickness, or as to the material constituting it, and the defendants knew that, or in the exercise of reasonable care could have known it, and failed to make the embankment or berme reasonably safe, and the washing of it away was due to its insufficient and defective condition, the defendants would then be responsible for the damages occasioned by the washing away of the berme, even though you should find that the flood in question was unprecedented in character, so as to constitute what is known as the act of God.” This instruction is complained of, as are also others of the same tenor. We think the criticism is merited.
It is unnecessary to further analyze the instructions. The whole controversy on this branch of the ease simply resolves itself into a question of proximate cause. The law is that if the berme was washed away by the ordinary flood waters of the stream by reason of its negligent construction, then the defendants are liable. If, on the other hand, it withstood the ordinary flood waters and was washed out by an extraordinary flood or act of God, which would have washed it away and would have caused the same injury to plaintiff’s lands, whether it was properly constructed or otherwise, then the defendants are not liable. If an.act of God alone would not produce injury, but, assuming that there was an act of God, a plaintiff’s loss is made possible by reason of a prior, coincident, or subsequent negligent act of a defendant, the latter is liable, because his act is causa sine qua non. (Meisner v. City of Dillon, 29 Mont. 116, 74 Pac. 130; Mulrone v. Marshall, 35 Mont. 238, 88 Pac. 797; Frederick v. Hale, 42 Mont. 153, 112 Pac. 70.) In the instant case, a sharp conflict was presented whether the berme went out during ordinary high water by reason of its negligent construction or whether it withstood such ordinary pressure, and was only carried away when the flood assumed extraordinary proportions. It is paradoxical to say that the berme, although of negligent construction, withstood the ordinary pressure of the waters, but that the defendant is liable on account of the fact that it was carried away by reason of infirmities in its construction when the flood assumed the proportions of an act of God. Such a situation is not to be considered. As has heretofore been said, the issue was well defined, and upon a retrial it may be simply stated to the jury.
2. Regarding the degree of care required in adopting methods for carrying forward construction work, this court said, in Kinsel v. North Butte Min. Co., 44 Mont. 445, 120 Pac. 797: “It is not the common custom in itself which exonerates; but proof of the custom, coupled with proof that it is the usage of ordinarily prudent and careful men under like circumstances, will absolve (a person) adopting the same * * * method from a charge of negligence, because the degree of care exercised by ordinarily prudent men in the same circumstances is the standard by which a jury must be guided.”
3. This instruction was given concerning the measure of damages: “(19) Nou are instructed that the true measure of damage to the land permanently injured, if the evidence shows any part of the same is permanently injured, is the fair market value of the land on the date of said injury. By market value of the land is meant the value which would be placed thereon if it were offered for sale by one who desired, but was under no necessity, to sell, and bought by one who desired to purchase, but was under no necessity to purchase. Tou will not, therefore, take into consideration any peculiar value which the land might have to the owner, apart from what would be paid by the general public; nor will you consider the owner’s unwillingness, if any appears, to sell the land. Furthermore, the value of the property cannot be measured by its value to the party owning it — that is to say, to the plaintiff in this ease; nor can it be measured solely by the plaintiff’s income or net proceeds derived from the particular property, but you may take into consideration the increase or net proceeds of said land, if any, in determining the market value thereof. In fixing the market value of the property, you will consider it simply as a case of a willing seller and a willing buyer; that is, What would the general public pay for said land on the market at its fair cash value ?” This instruction was not objected to and, assuming that it merely lays down a rule for determining the value of land, appears to be unobjectionable. But complaint is made that incompetent testimony was received concerning the value of the injured lands. There was competent testimony on the subject, aside from that to which objection was made. Upon a retrial, the court will have an opportunity to scrutinize the evidence offered on this branch of the case, so as to confine it within the rule of the instruction.
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 Holloway concur.
Rehearing denied March 1, 1912. | [
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MR. JUSTICE GALEN
delivered the opinion of the court.
This action was instituted to recover on a promissory note the sum of $10,000, with interest and a reasonable attorney’s fee for bringing the action, less a credit allowance of $500 paid on the note. It appears from the complaint that the note was executed on March 28, 1918, for the principal sum of $10,304.85, payable six months after date to the Empire Bank & Trust Company, at Lewistown, Montana, with interest at the rate of ten per cent per annum “and reasonable attorney’s fees.” It is shown to have been signed by “Fergus County Co-op. Ass’n., F. G. Hughes, Sec.,” and then follow the names of “L. F. Border, James A. Hansen, B. E'.. Blackman, J. B. Holmes, L. O. Battey, H. P. Gramley, and J. F. Arnold, Pres., Equity Co-op. Ass’n., Forest Grove, Montana.” Whether the individuals named executed the note as makers or indorsers is not clear from the allegations of the complaint. Indorsements of payments made show that the note was fully paid on January 2, 1919. The complaint alleges: “II. That the above-named defendants in order to secure an extension of- time for the payment of said note, secured the plaintiff to sign said note as a surety and as a guarantor for the said extension of time. III. That on or about the second day of January 1919, the above-named plaintiff paid the Empire Bank & Trust Company, the owner of said note, the sum of $10,000, and the said Empire Bank & Trust Company thereupon indorsed, delivered, and transferred the said note to the plaintiff, who is now the owner and holder thereof.”
The defendants in their answer acknowledge the execution and delivery of the note, but aver that they executed it as indorsers only; that at the time of the execution of the note the plaintiff was an officer of the Fergus County Co-operative Association, and as such officer knew of the making and delivery thereof on 'behalf of the Fergus County Co-operative Association. It is denied that the plaintiff signed the note as a surety or guarantor. And, by way of affirmative defense, it is alleged that at the time and place of the making and delivery of the note it was mutually agreed between the plaintiff and the defendants, and each of them, that the defendants so indorsing the note were doing so in a representative capacity, and that they were not to be held individually responsible, it being averred that each of the defendants so indorsing the note did so as a representative of a particular co-operative association, affiliated with the Fergus County Co-operative Association, and not in his individual capacity, the various co-operative associations for whom the individuals were acting being branch organizations of the principal maker of the note which was the parent company; and it is further alleged that, if the plaintiff purchased the note from the bank, he did so with full knowledge on his part that the defendants indorsed the note in their representative capacity and not as individuals, and that, having purchased the note with full knowledge of all of the facts surrounding its execution and indorsement, the plaintiff is now estopped from collecting thereon against the defendants individually.
The reply denies the affirmative allegations of the answer and that the plaintiff was an officer of the Fergus County Cooperative Association at the time of the execution of the note, and avers that he had no knowledge concerning the execution and delivery of the note until some time in the month of September, 1918, when he was requested to guarantee its payment or to purchase the same, at which time he indorsed it.
The case was brought on for trial before the court, sitting with a jury, and, after the jury had been impaneled, and the plaintiff’s first witness called and sworn to testify, the defendants objected to the introduction of any evidence on behalf of the plaintiff on the ground that the complaint fails to state facts sufficient to constitute a cause of action, which objection was overruled. The plaintiff thereupon introduced the note in evidence, and testified that he paid $10,000 for it on January 2, 1919; and that he has since been the holder and owner of it, and that there remains due and unpaid thereon the amount for which judgment is sought, with interest and attorney’s fees. He admitted that his signature appears on the note as an indorser, and stated that he signed the note at the Empire Bank on or about September 15, 1918, at the request of Mir. Gramley, whose name also appears on the note as an indorser. No further explanation is made by him as to why he signed it, nor the reason he paid it, save that it appears from his testimony that during the year 1919 he was the president of the Fergus County Co-operative Association and was winding up its affairs. Plaintiff then rested, and the defendants moved for a nonsuit, which was denied.
Each of the appellants was called and testified as a witness in defense. They severally testified that they acted as the representatives of certain branch co-operative associations, and represented such associations upon the board of directors of the parent organization, the Fergus County Co-operative Association, by which the note in suit was executed as principal. Each stated that he was present at a meeting of the boai’d of directors of the maker of the note, held in Lewistown, at the time of its signing by the principal and defendants herein; that the plaintiff was also present; and that prior to its execution considerable discussion was had with respect thereto. The defendants offered to prove by appellants as witnesses that they each individually indorsed the note with the distinct understanding and agreement in advance that each was indorsing it as a representative of the elevator company, or cooperative association, which he individually represented, not in his individual capacity, and that he should not thereby incur any individual responsibility. Such testimony was corroborated by J. F. Arnold, who also indorsed the note at the time of its execution and delivery, and like offer of proof was made as respects the evidence he was prepared to give detailing the conditions under which the note was indorsed. This offered evidence was excluded by the court.
In addition, the defendants offered the minute-books of the Fergus County Co-operative Association, showing the minutes of certain meetings of that company held after the plaintiff had paid the note, the correctness of which is attested by plaintiff’s signature, from which it appears that the several elevator companies, having representatives on the board of directors of the Fergus County Co-operative Association, are held responsible for the payment of their proportion of the notes executed by the parent company, and that each of such subsidiary organizations would be expected to pay its proportion of the indebtedness. Objection to the introduction of such minute entries was sustained by the court.
The action was dismissed as against J. F. Arnold and L. F. Border on account of their alleged bankruptcy. At the close of all the testimony, both parties moved for a directed verdict and the motion of the plaintiff was sustained, and judgment entered against the appellants Blackman, Holmes and Hawley in the sum of $15,125, together with an attorney’s fee fixed in the sum of $750, and costs of suit. A motion for a new trial was regularly made and denied. The appeal is from the judgment.
The appellants have specified fourteen alleged errors, but in our opinion but three questions so presented need be considered in disposition of the appeal, viz.: (1 Does the complaint state a cause of action? (2) Is the evidence sufficient to sustain the judgment? (3) Did the court err in the exclusion of evidence ?
1. Simply stated, the complaint shows the execution of the note by the appellants, with others, its subsequent assignment by transfer to the plaintiff for value, and the amount remaining due and unpaid thereon. The note as set out in the complaint does not show the presence of the plaintiff’s-signature thereon as an indorser, guarantor, or otherwise, although, as above shown, it is alleged in paragraph II that, in order to secure an extension of time of payment, the defendants secured the plaintiff’s signature thereto “as a surety and as a guarantor.” The plaintiff’s cause of action is predicated alone upon the alleged fact that he paid the amount due on the note to the 'bank in purchase thereof, and that it was “thereupon indorsed, delivered, and transferred” to him, and that he “is now the owner and holder thereof.” The allegation that he signed the note as “a surety and as a guarantor” in order to secure an extension of the time of payment may be treated as surplusage, as it is not made the basis of his right of recovery. Manifestly, a cause of action is stated on the theory that the plaintiff, having paid the full amount due upon the note, thus became the owner thereof by transfer and became substituted to all the rights of the original payee against the makers and indorsers. It is to be noticed that the action is on the note, and, from the allegations of the complaint, the plaintiff as the purchaser and holder thereof is prima facie entitled to recover. Matters of defense or proof are of no concern in determining whether a cause of action is stated. The plaintiff’s remedy and the liability of the defendants should not be confused. A complaint is sufficient where a cause of action is stated, on any theory. (Stiemke v. Jankovich, 68 Mont. 60, 217 Pac. 650; Hicks v. Rupp, 49 Mont. 40, 140 Pac. 97; State ex rel. Rankin v. Martin, 68 Mont. 392, 219 Pac. 632; Griffin v. Chicago, M. & St. P. Ry. Co., 67 Mont. 386, 216 Pac. 765; Adams v. Durfee, 67 Mont. 315, 215 Pac. 664; Saint v. Beal, 66 Mont. 292, 213 Pac. 248; Grover v. Hines, 66 Mont. 230, 213 Pac. 250; Awbery v. Schmidt, 65 Mont. 265, 211 Pac. 346; O’Neill v. Montana Elev. Co., 65 Mont. 259, 211 Pac. 222; Grant v. Nihill, 64 Mont. 420, 210 Pac. 914; Simonsen v. Barth, 64 Mont. 95, 208 Pac. 938; Hurley v. Great Fails Baseball Assn., 59 Mont. 21, 195 Pac. 559; Wheeler & Hotter Merc. Co. v. Moon, 49 Mont. 307, 141 Pac. 665.)
The complaint before ns meets the requirements. Whether the plaintiff is able to sustain his theory of the cause of action is wholly a different question. In determining whether the complaint states a cause of action, irrelevant and redundant allegations will be disregarded, and determination made from the allegations of the complaint alone as to whether’the plaintiff from any viewpoint is entitled to relief. (Stiemke v. Janhovich, supra; State ex rel. Bankin v. Martin, supra.)
2. The note was introduced in evidence. It appears therefrom that the defendants signed the note as indorsers on the back thereof, and that the plaintiff signed it on the back following the names of the other indorsers. He testified that he first became familiar with the note and its contents when he made purchase of it from the Empire Bank & Trust Company on January 2, 1919; that on that date he paid $10,000 for it; and that since then he has been the owner and holder of it. It will be noticed that he did not pay the note until long after its maturity, although he indorsed it a short time prior thereto. In explanation of his signature as indorser of the note, he testified that on or about September 15, 1918, he signed the note at the Empire Bank at the request of Mr. Gramley, who was one of the previous indorsers of the note; no other explanation being made by him. He failed to state the circumstances under which he paid the note and secured an assignment thereof, or his reason for having paid it. After the note was paid, as shown by the indorsement on the back thereof, it was indorsed “without recourse.” The facts above recited comprise all of the undisputed evidence before the court, from which it was called upon to make a determination of the respective rights of the parties.
Ordinarily since both parties moved the court for a directed verdict, error alleged in the exclusion of offered testimony would be considered on appeal as unimportant, as such submission to the court in effect amounts to an agreed statement of facts. (Fifty Associates Co. v. Quigley, 56 Mont. 348, 185 Pac. 155; Buckhouse v. Parsons, 60 Mont. 156, 198 Pac. 444; Stoltze Land Co. v. Westberg, 63 Mont. 38, 206 Pac. 407; Barkemeyer Crain do Seed Co. v. Hannant, 66 Mont. 120, 213 Pac. 208.) Those motions constituted demurrers to the sufficiency of the evidence, raising for determination only the question as to its legal sufficiency upon which to base a judgment. (Long v. Davis, 68 Mont. 85, 217 Pac. 667.)
The character of the liability is a question of law for decision by the court. (Farmers’ Bank v. Davies, 144 La. 532, 80 South. 713; Jones County Bank v. Kurt, 192 Iowa, 965, 182 N. W. 409.) However, in the case before us, it is impossible to determine from the pleadings and the proof just what the plaintiff’s position is in consequence of his signature having been placed on the back of the note after its delivery, and the subsequent payment thereof by him. As a general rule, the statute with reference to the liability of irregular or accommodation indorsers (sec. 8471, Rev. Codes 1921) has no application in instances where a party places his indorsement on a note after its delivery to the payee (Brannan’s Neg. Inst. Law, section 65). An exception to the rule is recognized in instances where the indorsement is made after delivery pursuant to an agreement and understanding had prior to delivery to the payee that the indorsement should relate back and be considered as having been made before delivery. (8 C. J. 83.) In the absence of such an agreement, it is generally held that, where the indorsement is made after delivery of the note, it constitutes a contract of guaranty rather than an original obligation. (8 C. J. 83.). A contract of guaranty “is a promise to answer for the debt, default or miscarriage of another person.” (Sec. 8171, Rev. Codes 1921.) But it is distinguishable from one of surety, in that the former is a separate contract whereby the promisor is bound independently of the person for whose benefit it is made, while the latter is a contract whereby the promisor is bound jointly with the principal on the same contract. (Emerson-Brandingham Imp. Co. v. Raugstad, 65 Mont. 297, 211 Pac. 305.) If the plaintiff paid the note as the president of its maker, the obligation was discharged (see. 8526, Rev. Codes 1921), and he is now without right of action.
At the trial the plaintiff stated that the note was in the same condition as when he indorsed it, which fact, coupled with the testimony respecting the original execution thereof, and that it remained in the possession of the payee named therein, until long after its maturity, would tend to indicate that it was signed by the defendants at the time of its execution and delivery as accommodation indorsers. None of the indorsements other than that of the bank to the plaintiff constituted a part of the chain of title, and it seems clear that the indorsers never had any interest in the note itself. In the absence of showing to the contrary, it will be presumed that the note was indorsed at the time it was executed. (Subd. ,22, sec. 10606, Rev. Codes 1921.) Independent of this presumption, the proof fairly establishes the fact that the defendants signed their names' as indorsers to the note before its delivery, and, since the note remained in the hands of the original payee with the indorsements of the defendants thereon until it was paid by the plaintiff, it would appear that the defendants were indorsers for accommodation only.
A person who places his signature upon an instrument, otherwise than as maker, drawer or acceptor, is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity. (Sec. 8470, Rev. Codes 1921.) The Negotiable Instruments Act deals with negotiable instruments only so long as they are in the hands of holders in due course. If in other hands, they are subject to the same defenses as if non-negotiable. (United States Nat. Bank v. Shupak, 54 Mont. 542, 172 Pac. 324; Merchants’ Nat. Bank v. Smith, 59 Mont. 280, 15 A. L. R. 430, 196 Pac. 523.) As to one another, all the indorsers are liable in the order of their indorsement; but evidence is admissible as between themselves that they have otherwise agreed, and joint indorsers are deemed to have indorsed jointly and severally. (Sec. 8475, Rev. Codes 1921.)
The Act declares that “the person ‘primarily’ liable on an instrument is the person who, by the terms of the instrument, is absolutely required to pay the same. All other parties are ‘secondarily’ liable.” (Sec. 8403, Rev. Codes 1921.) The liability of the maker is absolute, while that of the indorser is contingent. (Hough v. State Bank, 61 Fla. 290, Ann. Cas. 1912D, 1200, 55 South. 462; Farmers’ Bank v. Davies, 144 La. 532, 80 South. 713.) The indorser’s liability to pay is contingent upon the default of the maker. (5 Uniform Laws Ann., p. 319, and long list of cases cited.)
An accommodation indorser is one who indorses an instru ment without receiving value therefor, and for the purpose of lending his name to some other person as a means of securing credit. (Sec. 8436, Rev. Codes 1921.) While it is the general rule that, where a number of persons successively sign a note, they are prima facie liable in the order in which their names appear, even though they are in fact accommodation indorsers (3 R. C. L., p. 1133; Dan. Neg. Inst., sec. 703), yet the intention of the indorsers that there should be a joint, rather than a successive, liability may be inferred from the circumstances incident to the indorsements (Trego v. Cunningham, 267 Ill. 367, 108 N. E. 350; Weeks v. Parsons, 176 Mass. 570, 58 N. E. 157; George v. Bacon, 138 App. Div. 208, 123 N. Y. Supp. 103; Strasburger v. Myer Strasburger & Co., 167 App. Div. 198, 152 N. Y. Supp. 757; Plumley v. First Nat. Bank, 76 W. Va. 635, 87 S. E. 95; and note to Lee v. Boykin, 114 S. C. 480, 11 A. L. R. 1332, 103 S. E. 777). To make them jointly, rather than severally, liable, it is sufficient that the surrounding circumstances indicate that the indorsers should participate in general liability for the payment of the note. Parol evidence is admissible to show the agreement between the parties as to their liability, and an agreement between them to be equally liable, instead of being liable to each other in succession as theiiy names appear on the note, may be proved by parol. (Noble v. Beeman-Spaulding-Woodward Co., 65 Or. 93, 46 L. R. A. (n. s.) 192, 131 Pac. 1006.) In an action by an indorser against a prior indorser, it is competent for the defendant to prove by parol an agreement between all of the indorsers that they were, as between themselves, cosureties, where they are accommodation indorsers. (Hunter v. Harris, 63 Or. 505, 127 Pac. 786.) The liability of indorsers upon promissory notes generally lies upon the theory that the paper is transferred from one to the other by indorsement, and that the position of their signatures regulates responsibility. However, this rule can have no application to accommodation indorsers, where neither of them has owned the paper, and no such transfer has been made. (Easterly v. Barber, 66 N. Y. 433; Thompson v. Taylor, 12 R. I. 109.) Whether the plaintiff’s right of action against his coindorsers is on the note, or one for contribution under the provisions of section 7399, Revised Codes of 1921, we are unable to determine from the record facts. If he was an accommodation indorser, then his remedy is not upon the instrument itself, but rather upon the assumpsit which the law implies where a surety is compelled to advance money for his principal. If he was a guarantor, as by him alleged in his complaint, then he may recover the full amount of the note in consequence of having been required to perform his contract as a guarantor.
In the present state of the pleadings and the proof, the rights of the parties áre not susceptible of a determination by a court in application of the law. As noted, the plaintiff in his complaint alleges that he signed the note “in order to secure an extension of time for the payment” thereof, “as a surety and as a guarantor.” This is denied by the answer, and the plaintiff offered no proof whatsoever in support of the allegation. Again, the answer first alleges that the defendants signed the note as indorsers, and then it is affirmatively alleged that they did not indorse the note at all, as individuals, but rather as representatives of certain named subsidiary companies of the maker of the note. The evidence shows that the plaintiff indorsed the note after its delivery, and just before its maturity, at the request of one of the defendants, who was a previous indorser thereon. Nothing more is shown, so that from the facts thus presented we are unable to come to a conclusion as to the respective rights and obligations of the parties. In such condition of the pleadings and the proof, we conclude that the proof is not legally sufficient to support the judgment, and a retrial must be ordered.
3. Since the case must be remanded in order that it may be once fairly tried and evidence introduced of character sufficient to support a judgment, we shall now proceed to consider and determine whether error was committed by the court in the exclusion of the offered evidence.
As noted above, the statute provides that the indorsers of a promissory note “are liable pmma faci& in the order in which they indorse; but evidence is admissible to show that * * * they have agreed otherwise.” (Sec. 8475, Rev. Codes 1921.) Under this statute, parol evidence is admissible to show that the obligation of those indorsing a note before its delivery, pursuant to agreement, was to be a joint, rather than a successive, liability. (Brannan on the Negotiable Instruments Law, sec. 68, and 5 Uniform Laws Ann., Negotiable Instruments, sec. 68.) It is clear that this section has no application to the evidence which was excluded. If admissible at all, it must be upon some other theory.
The general statute applicable to written instruments provides that, when “the terms of an agreement have been reduced to writing by the parties, it is to be considered as containing all those terms, and therefore there can be between the parties and their representatives, or successors in interest, no evidence of the terms of the agreement other than the contents of the writing,” with certain exceptions not here applicable. (Sec. 10517.) However, under that section, as well as sections.10521 and 7538, parol evidence is admissible as to the circumstances under which the instrument was made, including the situation of the parties to it, “so that the judge be placed in the position of those whose language he is to interpret.”
This section permits proof of the execution and existence of an oral agreement between the parties, collateral to, and executed contemporaneously with, a written instrument, covering and controlling a material matter agreed to by the parties, distinct from, but closely related to, the express subject matter of the written instrument, and not embodied therein. This exception applies to a written instrument which prima, facie purports to embody the complete obligations of the parties, only where the circumstances attending its execution warrant the inference that the parties did not intend that it should be a complete and final statement of the whole transaction. Evidence of a contemporaneous oral agreement as to any matter upon which the written instrument is silent, and which is not inconsistent with its terms, cannot be said to contradict or vary the terms of the written instrument. Under such conditions oral testimony which does not tend to vary or contradict the terms of the writing itself, but rather serves to make plain the intention of the parties, is admissible. (United States Nat. Bank v. Chappell, 71 Mont. 553, 230 Pac. 1084.)
At the time the plaintiff paid the note and secured indorsement thereof from the payee it had never been previously negotiated and was overdue, so that he was not a holder in due course. (Sec. 8459. Such being the case, it was subject to the same defenses as though non-negotiable. Whether he paid it ■with full knowledge of the conditions under which it is said to have been indorsed by the defendants is a question of fact proper to be determined. If he did so, then the proof of the conditions known to the plaintiff, upon which the defendants indorsed it, is admissible. Was he a party to the original contract ?
In an action on a note indorsed by two persons, with intention not to incur any liability to the payee, who was to indorse the note, which was then to be delivered to a third person, it has been held that all of the indorsements, including that of the payee, were irregular indorsements, and parol evidence was admissible to determine the nature of their contract. (Barger v. Farnham, 130 Mich. 487, 90 N. W. 281.)
The indorsement by a third person of a note payable to the maker has been held to belong to that class known as irregular or anomalous indorsements, and the obligation of the indorser is held to depend upon the agreement of the parties, and, being ambiguous in that respect, parol evidence is admissible to show the terms of the agreement actually made by the parties, or other facts showing their intention at the time. (Ewan v. Brooks-Waterfield Co., 55 Ohio St. 596, 60 Am. St. Rep. 719, 35 L. R. A. 786, 45 N. E. 1094.)
Professor Wigmore says that the extrinsic agreement made by an anomalous indorser should be given effect, and “that the parol evidence rule, in the present aspect, is binding upon only those persons who are parties to the document. This form of statement suffices in most instances to reach correct results.” (5 Wigmore on Evidence, p. 342.)
In the case of Baroch v. Greater Montana Oil Co., 70 Mont. 93, 225 Pac. 800, this court held that evidence of a contemporaneous oral agreement is admissible against a party notoa holder in due course to show that the instrument was not to become effectual until the performance of a condition. We can see no good reason why the same rule should not apply to the conditions under which the indorsers signed the note, as to one who is not a holder in due course, if he were in fact thoroughly conversant with the circumstances and conditions under which it was indorsed.
The court was in error in the exclusion of the offered testimony.
Rehearing denied March 26, 1926.
The corporate minutes of a meeting of the board of directors of the Fergus County Co-operative Association, held on February 17, 1920, attested as correct by the plaintiff’s signature, which were offered in evidence, and by the court excluded, disclose that, whereas that company is bankrupt, the several elevator companies having representatives on its board of directors be notified “that said representatives have signed notes of the Fergus Co. Co-op. Ass’n, which are past due, and that said Fergus Co. Co-op. Ass’n is bankrupt and that the elevator companies are held responsible for their portion of the payment of said notes.”
We are of the opinion that these minutes were improperly excluded by the court, as they afford evidence over the plain tiff’s signature, certifying to their authenticity, that he in fact had full knowledge of the circumstances and conditions under which the note was originally indorsed by the defendants. And it will be noted that this directors’ meeting was held a month and a half after the plaintiff paid the note, and more than twenty months before the commencement of this action. Furthermore, they afforded proof of the relationship of the plaintiff to the note, the indorsers and its payment, for he was then the president of the Fergus County Co-operative Association, and busy in winding up its affairs. They also were admissible in support of the defense pleaded by the defendants in their answer.
For the reasons stated, the cause is reversed and remanded to the district court of Fergus county, with directions to grant the appellants a new trial.
Reversed and remanded.
Mr. Chief Justice Callaway and Associate Justices Holloway, Stark and Matthews, concur. | [
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MR. JUSTICE MATTHEWS
delivered the opinion of the court.
The defendant has appealed from a judgment rendered against him and in favor of the plaintiff. Plaintiff’s complaint alleged: (1) That on November 13, 1922, defendant made and delivered'to plaintiff his certain promissory note, a copy of which is set out, and which copy shows that the note was payable on or before March 1, 1923, for the sum of $800, with interest at the rate of four per cent per annum, and with the usual provision for attorney’s fees, and it does not appear therefrom that payment thereof was secured; (2) that the defendant has not paid the note nor any part thereof; and (3) that the plaintiff is the owner and holder of the note. Paragraph 5 of the complaint then alleged that, at the time of the delivery of the note, defendant executed and delivered to plaintiff a certain chattel mortgage as security for the payment of the note, and by paragraph 6 it was alleged that, without the knowledge or consent of plaintiff, defendant sold and disposed of all the property mentioned in the chattel mortgage.
On September 26, 1924, defendant filed and served upon plaintiff notice that on the first day of October, 1924, he would move the court to strike paragraphs 5 and 6 from the complaint, on the ground that the allegations thereof were “irrelevant, redundant, and surplusage.” Thereafter defendant answered, admitting the execution and delivery of the note, “which by its terms was made payable to” plaintiff, and denying all other allegations of the complaint. Defendant then set up two special defenses: (1) That the note was given without consideration; and (2) that plaintiff’s husband, Alphonse Yande Yeegaete, was in fact the owner of the note, which was made 'payable to Mary Yande Yeegaete at the request of her said husband and to protect him from other creditors; that three Yande Yeegaete brothers had for years been engaged in a joint venture, and that, as a result of their operations, the said Alphonse Yande Yeegaete had become indebted to defendant in a sum in excess of the amount due on the note, but that this fact was not ascertained by defendant until after the making and delivery of the note, and that, had be known the condition of their account in March, 1922, he would not have given the note. These affirmative allegations of the answer were denied by reply thereto.
Over defendant’s objection, the plaintiff was permitted, in her case in chief, to introduce evidence in support of the allegations of her complaint respecting the mortgage.
The plaintiff was not present at the time of the execution and delivery of the note and mortgage, but, according to her contention, was there represented by her husband, Alphonse Yande Yeegaete, who testified that such was the fact and that such fact was then known to defendant; whereas the defendant testified that the transaction was with the husband personally and that, at the request of Alphonse, the note and mortgage were drawn in the name of plaintiff to protect him from his creditors. The defendant further testified in substantiation of the allegations of his special defenses, which testimony was contradicted by Alphonse Yande Yeegaete, and, in part, by other witnesses for plaintiff.
The testimony of the two principal opposing witnesses — the defendant and Alphonse Yande Yeegaete — was sharply con flicting in every material particular; so much so, in fact, that the jury could but find that one or the other had deliberately testified falsely. While the testimony of Alphonse Yande Yeegaete was corroborated in many particulars, principally by the plaintiff, his wife, that of the defendant was practically uncorroborated.
The jury returned a verdict in favor of plaintiff, and judgment was entered thereon.
Defendant specifies error on the rulings of the court in (1) refusing to strike paragraphs 5 and 6 of the complaint; (2) admitting evidence in support of those allegations as a part of plaintiff’s case in chief; and (3) in refusing to give defendant’s offered instruction No. 3, and in giving in lieu thereof the court’s instruction No. 8.
1. The record contains the notice of intention to move to strike heretofore referred to and nothing more. It does not appear from the record that any motion was ever presented to or ruled upon by the court; from all that appears in the record, defendant’s intention to move to strike was abandoned. “This matter, therefore, is not before us for review.” (Hefferlin v. Karlman, 30 Mont. 348, 76 Pac. 757.)
2. Counsel for defendant has argued his assignments num bered 1 and 2 jointly; he contends that the allegations of paragraphs 5 and 6 should have been stricken as surplusage, and that the evidence introduced in their support was “incompetent, irrelevant, and immaterial,” and in support of his contentions cites 8 Corpus Juris, 865; Brophy v. Downey, 26 Mont. 252, 67 Pac. 312; State Savings Bank v. Albertson, 39 Mont. 414, 102 Pac. 692; Bank v. Blackburn, 2 Cal. App. 146, 83 Pac. 262; Clark v. Eltinge, 34 Wash. 323, 75 Pac. 866 — all to the effect that, under the circumstances of the particular case, it was not necessary to so plead or to introduce evidence, except in rebuttal.
The text of the Corpus Juris citation is but the statement of a general rule which prevails in the absence of statutory provisions to the contrary.
In the case of Brophy v. Downey, the plaintiff sued on a promissory note which did not disclose upon its face that it was secured by mortgage; the defendants answered setting up the fact that it was so secured; the plaintiff did not reply. On the trial plaintiff proved the allegations of his complaint, but on cross-examination admitted that the note was originally secured by mortgage, and was then not permitted to show that the security had, without fault of the plaintiff, become valueless, whereupon judgment of nonsuit was entered against him. The question before the court .on appeal was as to whether this latter proof was admissible in the absence of a reply. The court held that no obligation rested upon the plaintiff to state whether or not there was a mortgage ; that the allegation thereof in the answer was an affirmative defense and not a counterclaim; and that consequently no reply was required; that the defendants should have proved this new matter in making out their case and not by cross-examination; and that the plaintiff should have been permitted to prove, if he could, that the security had so become valueless, declaring that such' evidence was “both relevant and material. ’ ’
For reasons hereinafter stated, neither the case of State Savings Bank v. Albertson nor Clark v. Eltinge has any application to the question before us. In the California case the court merely held that, in a suit on a promissory note, it was not necessary for the plaintiff to allege the execution of a mortgage and its extinction by agreement of the parties, stating: “The facts referred to constituted no part of the plaintiff’s cause of action, and come clearly within the definition of ‘new matter.’ * * * And, were it otherwise, the error would be immaterial.”
In this state “there is but one action for the recovery of debt, or the enforcement- of any right secured by mortgage upon real estate or personal property, which action must be in accordance with the provisions of this chapter” (sec. 9467, Rev. Codes 1921); and “several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together” (sec. 7533, Rev. Codes 1921). Under these provisions, the stipulations embodied in the mortgage become a part of the note as though the two instruments were united in one, even though the note contains no mention of the mortgage. (Union Bank & Trust Co. v. Himmelbauer, 56 Mont. 82, 181 Pac. 332; Id., 57 Mont. 438, 188 Pac. 940; Id., 68 Mont. 42, 216 Pac. 791.)
In the case of Clark v. Eltinge, above, the supreme court of Washington held that allegations such as are found in plaintiff’s paragraphs 5 and 6 were surplusage and might be entirely disregarded; but in that state they have no provision such as is found in our section 9167, above; on the contrary, their statute provides that: A “mortgagee or holder of the lien may proceed upon his mortgage or lien, or if there be a separate obligation in writing to pay the same, secured by said mortgage or lien, he may bring suit upon such separate promise.” (Sec. 1111, Rem. Comp. Stat. 1922.) This section is held to give the holder of a note and mortgage, or lien securing the same, an election of remedies (Frank v. Pickle, 2 Wash. Ter. 55, 3 Pac. 581) and is akin to our section 8233, Revised Codes of 1921, which applies only to liens other than mortgages; while section 9167, above, is controlling only in cases where the note is secured by mortgage (State Savings Bank v. Albertson, above). In the Albertson Case it was held that, as the answer alleged the existence of a “lien” and not a mortgage, the case did not comé under the provisions of section 9167.
It seems clear from the statutory provisions quoted, and from the authorities, that in this state, while, if no mention of the mortgage is contained in the note, it is not necessary to allege the fact that a mortgage was given and then avoid its effect, and, further, that, if the existence of the mortgage is not set up as a defense, the plaintiff may secure judgment as though no mortgage had ever been given, such procedure is possible only by reason of the forbearance of the defendant, for if the defendant sees fit to plead the fact that a mortgage was given to secure the payment of the note, such pleading constitutes a complete bar to the plaintiff’s action, unless the plaintiff can thereafter show that the security, through no fault of his, has become valueless.
The cases cited, with the exception of the Washington case, which we have shown has no application, go no further than to hold that it is not necessary to plead the mortgage; the question of the propriety of pleading as did the plaintiff is not before us and is expressly reserved.
The plaintiff by pleading as she did but anticipated a valid defense to her action on the note and brought her suit within the provisions of section 9467, which is declared to be the only action maintainable for the recovery of her debt; the defendant, by answer, joined issue thereon, so that, at the commencement of the trial, it clearly appeared that the note was originally secured by a chattel mortgage.
A like situation arose in California, in the case of Hibernia Sav. etc. Soc. v. Thornton, 127 Cal. 575, 60 Pac. 37. There the plaintiff commenced an action as on an unsecured note, and in its complaint set up its note in haec verba, in which appeared the recital: ‘ ‘ This note is secured by mortgage of even date herewith.” On the trial the plaintiff proved its note and nonpayment and rested; whereupon, on motion of defendant, a judgment of nonsuit was entered. The court, in sustaining the judgment, held in effect that the plaintiff had pleaded that the note was secured by mortgage, that the recital was prima facie evidence of the fact, and that therefore, under statutory provisions similar to ours, an action would not lie on the note alone.
In the ease at bar, having pleaded the fact that the note was secured by mortgage, the plaintiff was in the same position, and could not safely rest her case without first proving that the security had, through no fault on her part, become valueless. The testimony objected to was, therefore, under the pleadings in this case, both relevant and material, and its admission did not constitute error.
3. Defendant’s offered instruction No. 3 follows the lan guage of section 10672, Revised Codes of 1921, and reads as follows: “You are instructed that a witness, false in part of his testimony, is to be distrusted in others.” Plaintiff’s counsel objected to the.giving of this instruction, for the reason that it did not contain the element of willfulness, and omitted the phrase, “except in so far as it is corroborated by other credible witnesses who have testified in the case.” The objection to the offered instruction, that it did not contain the element of willfulness, is justified by the declaration of this court in State v. Penna, 35 Mont. 535, 90 Pac. 787. The court refused the - instruction offered, and stated that the following instruction would be given as the court’s instruction No. 8: “You are instructed that you are the sole judges of the credibility of the witnesses who have testified in this case and the weight to be given to their testimony. If you believe that any witness who has testified in this case has willfully and intentionally testified falsely as to any material matter in the case, the jury has the right to disregard any or all of the testimony of such witness, except in so far as it is corroborated by other credible evidence.”
Defendant’s counsel objected to the giving of such instruction, pointing out specifically wherein it was erroneous, and calling the court’s attention to the case of State v. Belland, 59 Mont. 540, 197 Pac. 841, wherein Mr. Justice Holloway, speaking for the court, said, of an instruction embodying the latter portion of that just quoted: “It is essentially erroneous, and a like instruction has been condemned by this court so often that it seems inconceivable that the error could be repeated at this late day.” He cited four cases in which this court had theretofore declared the instruction erroneous. Yet, in spite of the fact that the presiding judge had this case before him, the objection was overruled, and the court fell into the same error, even “at this late day.”
Counsel for plaintiff contends that the civil case of Cameron v. Wentworth, 23 Mont. 70, 57 Pac. 648, containing an instruction similar to that found in State v. De Wolfe, 29 Mont. 415, 74 Pac. 1084, was not overruled by the decision in State v. Penna, above, in which latter ease the rule in the De Wolfe Case was expressly overruled. The provisions of section 10672 apply with equal force to civil and criminal cases, and, while the Cameron Case was not expressly overruled by the Penna Case, the rule announced was said to be “technically wrong” and was thus tacitly overruled.
Whereas the statute merely authorizes the jurors to look with distrust upon the testimony of any witness whom they have fpund testified falsely as to any material matter, this erroneous instruction advised them that, in the case of a witness who is uncorroborated and is shown to have willfully and intentionally testified falsely as to any one material matter, they had the right to disregard all of his testimony, whereas, although another witness may also have testified falsely as to a material matter, if corroborated by other credible evidence, they might regard and consider his testimony as though he had not falsified.
As the defendant was not corroborated by other witnesses, and Alphonse Yande Yeegaete was corroborated in many particulars, if it was found that either or both had testified falsely as to any material matter, the instruction became a two-edged sword against the defendant.
Although in the first part of the instruction the court advised the jurors that they were the sole 'judges of the credibility of the witnesses who testified and of the weight to be given to their testimony, we cannot say, in the light of the circumstances of this ease, that, as in the Penna Case, the jurors “doubtless * * * understood this to be so, notwithstanding the unauthorized restriction contained in the latter part of the instruction” (State v. Penna, above), but are constrained to hold that the giving of this instruction, which has been so often condemned by this court, was prejudicial error.
The judgment is reversed and the cause remanded for a new trial.
Reversed and remanded.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Stark concur. | [
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] |
MR. JUSTICE MATTHEWS
delivered the opinion of the court.
On March 6, 1920, plaintiff, Caroline Doering, filed herein her complaint seeking the foreclosure of a certain chattel mortgage and for judgment against the defendants A. Clark Selby and Prances W. Selby, his wife, for the amount due on the note secured by such mortgage, and for judgment against the defendant Leavitt for damages for the conversion of certain property described in said mortgage. Personal service of summons was had on Leavitt and substituted service thereof upon the Selbys. The Selbys defaulted, and their default was duly entered. Leavitt filed an answer which is in effect a general denial of the allegations of the complaint.
The cause came on regularly for trial on the nineteenth day of December, 1924, when a jury was duly impaneled and sworn, and thereupon both parties introduced evidence and rested. At the close of all the evidence counsel for plaintiff orally moved the court to take the ease from the jury, to make findings in favor of plaintiff on all issues in the ease, and enter judgment for plaintiff accordingly. Thereupon counsel for defendant Leavitt moved the court for a directed verdict in favor of his client. By agreement of counsel the court then discharged the jury, and granted to plaintiff’s counsel ten days from and after December 20, 1924, in which to file memorandum of authorities and to defendant’s counsel a like period after receipt of plaintiff’s brief in which to file his memorandum of authorities.
On January 13, 1925, plaintiff filed in said cause her requested findings of fact and conclusions of law. No such request was filed by defendant’s counsel. On January 28, 1925, without reference to plaintiff’s proposed findings, and without making findings of fact or conclusions of law, the court rendered and ordered entered its judgment which recites: “It is ordered that the plaintiff have judgment against the defendants A. Clark Selby and Frances W. Selby for the full amount demanded in the complaint, to wit, $469.16 and costs. It is further ordered that the plaintiff take nothing as against the defendant Fred Leavitt and that as to said defendant the action is dismissed.” From this judgment plaintiff has appealed, but attacks only that portion of the judgment dismissing the action as to Leavitt. Questions of law alone are presented.
The facts, briefly stated, are as follows: On May 19, 1919, Leavitt sold and delivered to A. Clark Selby a span of mules, together with a wagon and set of harness. Selby paid $50 in cash and gave to Leavitt his note for $350, payable in monthly installments, and as a part thereof agreed that title to the property should remain in the vendor until the purchase price was fully paid, and that, on default in the payment of any installment, the vendor could retake possession, and any and all payments theretofore made should be retained as rental of the property. The contract was not filed with the clerk and recorder of any county in the state.
On May 5, 1919, defendant Selby applied to plaintiff for a loan of $300, and offered the mules, with certain other chattels, as security. Plaintiff caused the records to be searched, and, finding nothing of record against the property, made the loan, taking the note of Selby and wife payable November 1, 1919, and a chattel mortgage on the property. Selby failed to surrender to the plaintiff a receipt for a correct copy of the mortgage, and the mortgage was presented to the clerk and recorder of Missoula county without such receipt attached but nevertheless accepted and filed by the clerk.
Selby thereafter defaulted in each monthly payment to Leavitt, and in July or August Leavitt took possession of the mules. Selby relinquished all claim on the mules, and returned the harness, with a promise to return the wagon. Later Leavitt sold the mules for $350. Selby also defaulted on his note to plaintiff, and, after the maturity of the note, plaintiff, through her agents, armed with a certified copy of the mortgage, made demand upon Leavitt for the possession of the mules. The demand was refused by Leavitt, who stated that he claimed the mules as his own, and had already sold them as such,. and this action resulted.
Plaintiff’s assignments present the following contentions made by her counsel: That the court erred (1) in admitting the conditional sale contract in evidence; (2) in ignoring plaintiff’s requested findings; and (3) in dismissing the action as to Leavitt.
1. As a witness in his own behalf, Leavitt testified, without objection, that he sold Selby “a team, wagon and harness. * * He [Selby] paid $50, and he said he would pay the balance monthly as it came due. At that time I took an instrument as evidence of his obligation.” Counsel then offered the note containing a conditional sale contract, to which offer plaintiff objected on the ground that the contract was void as to her. The objection was overruled, and the contract admitted.
It is clear from the record that plaintiff was a bona fide mortgagee subsequent to the sale and prior to the filing of the instrument, and that, if her mortgage was entitled to filing, and was regularly filed, the contract was void as to her, and should have been excluded. (Sec. 7594, Rev. Codes 1921; Cuerth v. Arbogast, 48 Mont. 209, 136 Pac. 383.) But even in that event the contract was valid as between Leavitt and Selby. (Hennessy Co. v. Wagner, 69 Mont. 46, 220 Pac. 101; Hodson v. O’Keeffe, 71 Mont. 322, 229 Pac. 722.)
In determining the admissibility of the contract, it must be remembered that, at the time it was offered in evidence, the plaintiff had already made her case, and as a part of her proof she had introduced her mortgage in evidence. She was proceeding against the mortgagors as well as Leavitt, and, as between her and the mortgagors, the mortgage was valid and admissible, even though it was not filed in the office of the clerk and recorder. (Laubenheimer v. McDermott, 5 Mont. 512, 6 Pac. 344; Chester State Bank v. Minneapolis T. M. Co., 58 Mont. 44, 190 Pac. 136; Degenhart v. Cartier, 58 Mont. 245, 192 Pac. 259.) However, as against defendant Leavitt, the plaintiff’s proof must have established her right to recover as against him, before he was required to introduce any proof at all (see. 10616, Rev. Codes 1921), and, if her mortgage had not been filed prior to the time when Leavitt took the mules into his possession, his right to do so would not have been affected by the mortgage.
While the mortgage was physically filed with the clerk and recorder, it was lacking in one essential requisite to entitle it to be filed, in that there was not attached to it the mortgagors’ receipt for a copy thereof. This requisite was added to the then existing requirements by an amendment to section 2 of Chapter 86, Laws of 1913, on March 10, 1919, now a part of section 8276, Revised Codes of 1921, and which reads as follows: “Every mortgagee must surrender without cost to the mortgagor, at the time of the execution of the mortgage, a correct copy of the original mortgage so signed, with acknowledgments shown thereon. And the mortgagor must surrender to the mortgagee a receipt, which shall be attached to the original mortgage, showing that the mortgagee has surrendered to him a copy of such mortgage, and said receipt must accompany the mortgage when presented to the clerk and recorded and filed therewith. Otherwise said mortgage shall not be filed as a chattel mortgage by the clerk and recorder.” •
This provision is mandatory, and its final clause leaves no room for doubt as to the intention of the legislature in adding it to the then existing requirements for the validity of a chattel mortgage. In decisions involving the interpretation of chattel mortgages “one principle is adhered to, and that is that the statutory requirements intended to protect the lien of the mortgagee on the mortgaged property against attaching creditors must be strictly followed.” (First Nat. Bank of Butte v. Beley, 32 Mont. 291, 80 Pac. 256.)
A note to People v. Burns, (161 Mich. 169, 125 N. W. 740), at page 472 of 137 Am. St. Rep., expresses our views on the technical construction of such statutory requirements, to-wit: “We have been, and hope to continue to be, among the first to deprecate the use of a bundle of red tape when an elastic band will serve the purpose, and in the consideration of rights inter partes, he who seeks to take advantage of some trifling departure from legal order should be properly viewed with a just suspicion of the merits of his cause. A different light, however, is cast upon these so-called technicalities, when the rights of others are involved, and chattel mortgages, nowadays the creatures of statute, are surrounded with certain and by no means improper formalities, the neglect of which serves as a veritable pitfall for the unwary and careless mortgagee. So many vital considerations turn upon the mortgaging of chattels left in the possession of the mortgagor that legislation for the distinguishing marks of a valid mortgage is as necessary as that particular form of negotiation is' convenient.” At page 486: “As a rule, there is no necessity for delivering a copy of the chattel mortgage to the mortgagor, but, where it is required by statute, it must be strictly complied with, and more especially where the statute directs that the fact of the copy being so delivered shall be written on the instrument filed above the mortgagor’s signature”— citing Commercial State Bank v. Interstate Elevator Co., 14 S. D. 276, 86 Am. St. Rep. 760, 85 N. W. 219; Park v. Robinson, 15 S. D. 551, 91 N. W. 344.
Plaintiff’s mortgage was not entitled to record, and this fact appeared from the face thereof, and was a part of the plaintiff’s case prior to the offer of Leavitt’s conditional sale contract in evidence.
Plaintiff’s counsel suggests that this oversight should be condoned by reason of the short time which had elapsed between the passage of the Act and the execution of the mortgage; but the legislature did not see fit to provide that the Act. should take effect at some future time, but declared: “This Act shall take effect and be in full force from and after its passage and approval,” and the courts are powerless to relieve a litigant from Ms failure to do that wMeh the legislature has declared he shall do at a time certain.
An instrument not entitled to record, though actually recorded, is of the same effect as to tMrd persons as one unrecorded. (23 R. C. L. 204, and cases cited; notes, 9 Am. Dec. 254; 96 Am. Dec. 255; 5 Ann. Cas. 340.) It imparts no constructive notice whatever. (Lee v. Laughery, 55 Mont. 238, 175 Pac. 873.)
The rights of the plaintiff and defendant Leavitt were, then, in equipoise. Each held an instrument good as against defendant Selby, but void as to the other. It then became a question as to which party should first assert those rights as against Selby. The record discloses that defendant Leavitt acquired this advantage by securing possession of the property and the cancellation of the conditional sale contract by mutual agreement between himself and Selby, as well as by invoMng the forfeiture clause therein, before the rights of the plaintiff attached, and therefore Leavitt showed a good defense to the plaintiff’s action for conversion, and for this purpose the contract was properly admitted in evidence. This disposes of plaintiff’s first and third contentions.
2. The record discloses that the evidence was closed on December 20, 1924, and at that time the parties were granted up to and including January 10, 1925, for the filing of memoranda of authorities; but nothing was then said as to the filing of requested findings. Aside from the fact that the requested findings were contrary to the law as determined by the court, and that consequently the most the court could have done was to have rejected the proposed findings, section 9369, Revised Codes of 1921, provides that no “judgment shall be reversed on appeal for want of findings at the instance of any party who, at the close of the evidence and argument in the cause, shall not have requested findings in writing, and had such request entered in the minutes of the court.” Plaintiff failed to bring herself within the requirements of the above section, even though we should consider the order grant ing time in which to file memoranda of authorities an extension of time for the closing of the argument. Nothing to the contrary appearing in the record, it must be presumed that the memoranda of authorities were duly filed on or before January 10, 1925, and the requested findings in writing were, therefore, filed three days after the close of the argument. No error was committed in failing to make findings.
Rehearing denied .March 4, 1926.
For the reasons stated, the judgment is affirmed.
Affirmed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Stark concur. | [
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MR. JUSTICE STARK
delivered the opinion of the court.
It appears from the record that plaintiff is the receiver of the Bank of Commerce, a banking corporation organized under the laws of this state, with its principal place of business at Forsyth, which is insolvent. Before the commencement of this suit proceedings had been duly taken for the levy of an assessment of 100 per cent upon the stock held by stockholders in the bank, under the authority of section 6036, Revised Codes of 1921, as amended by Chapter 9 of the Session Laws of 1923, which provides: “The stockholders of every bank shall he severally and individually liable, equally and ratably, and not one for the other, for all contracts, debts and engagements of such corporation, to the extent of the amount of their stock therein, at the par value thereof, in addition to the. amount invested in such shares. * * * In cases where a bank is liquidated by a court through a re ceiver, the receiver may by order of the court institute and maintain appropriate suits or actions in the courts of this state on behalf of the creditors of the bank against stockholders for the recovery and collection of stockholders’ liability,” etc. The receiver had been duly authorized by order of the court to collect the assessment on behalf of the creditors of the bank by suit or otherwise, pursuant to the provisions of the above section. The defendant was the owner of ten shares of the capital stock of the bank of the par value of $100 each. She failed to pay the amount of the assessment levied upon her stock, and the plaintiff brought this action to recover the same.
Upon the issuance of summons, plaintiff filed an affidavit and undertaking on attachment sufficient in form, whereupon a writ of attachment was duly issued by the clerk of the court and placed in the hands of the sheriff of the county, who executed it by levying upon the property of the defendant. In due time defendant moved the court to vacate and discharge the attachment on the ground that the complaint “does not state facts sufficient upon which to base the issuance of an attachment.” This motion was sustained by order of the court, and from this order the plaintiff has appealed.
Both parties agree that there is but a single question involved in this appeal, viz.: Is an action by a receiver for the enforcement of the stockholder’s liability of a state bank of such a character as gives the right of attachment under the provisions of section 9256, Bevised Codes of 1921, which provides: “The plaintiff at the time of the issuance of the summons * * * may have the property of the defendant attached as security for the satisfaction of any judgment that may be recovered * * * , as follows: In an action upon a contract, express or implied, for the direct payment of money,” etc.
Section 890 of the Code of Civil Procedure of 1895 is identical with section 9256, supra. In the case of Ancient Order of Hibernians v. Sparrow, 29 Mont. 132, 101 Am. St. Rep. 563, 1 Ann. Cas. 144, 64 L. R. A. 128, 74 Pac. 197, the facts were that one White had agreed to furnish the material and construct a building. To secure the fulfillment of his contract he gave the owner an indemnity bond, executed by himself as principal, and the defendants as sureties, the condition of which was that if he should fully comply with the terms of the contract the obligation should be void, but otherwise to remain in full force. White defaulted and abandoned the contract. The' owner was compelled to complete the building at a cost of #4,500, and for this breach of the contract had obtained judgment against White. Being unable to collect this judgment, the owner brought suit against the sureties on the bond and .caused an attachment to be levied upon their property, which was, on motion of the defendants, discharged by order of the court. From this order the plaintiff appealed. This court, after a complete and thorough examination and analysis of the authorities, held that although the action was upon an express contract, since the defendants became liable only for the default of their principal, it was not such a contract as would sustain an attachment under that section of the Code. The rule announced in that case has been uniformly followed in subsequent decisions of this court. (Bear Tooth Stock Co. v. Grosscup, 57 Mont. 595, 189 Pac. 773; Carter v. Bankers’ Ins. Co., 58 Mont. 319, 192 Pac. 827; Heffron v. Thomas, 61 Mont. 10, 201 Pac. 572; Square Butte State Bank v. Ballard, 64 Mont. 554, 210 Pac. 889.) In the case last cited the contract sued upon was one of guaranty, and it was held that such a contract, whether absolute or conditional, was “not a contract for the direct payment of money within the meaning of our attachment statute.”
It is generally held, under statutes like ours, that the double liability of a stockholder in a corporation imposed by statute is a secondary one to be enforced only when the corporation has become insolvent and unable to pay its debts. (Assets Realization Co. v. Howard, 211 N. Y. 430, 105 N. E. 680; Hirschfield v. Bopp, 145 N. Y. 84, 39 N. E. 817; Flynn v. American Bank & Trust Co., 104 Me. 141, 129 Am. St. Rep. 378, 19 L. R. A. (n. s.) 428, 69 Atl. 771; Lynch v. Jacobson, 55 Utah, 129, 184 Pac. 929; Pyles v. Carney, 85 W. Va. 159, 101 S. E. 174.) It is noteworthy that under the statute the stockholder is not made liable “on” the contracts, debts and engagements of the corporation," but “for” them.
Section 6036, supra, is almost identical with section 5151 of the Revised Statutes of the United States, which was in effect until amended by the Act of December 23, 1913. (Chap. YI, 36 Stats, at Large, 273.) Speaking of the nature of the liability imposed by this section, the supreme court of the United States in McClaine v. Rankin, 197 U. S. 154, 3 Ann. Cas. 500, 49 L. Ed. 702, 25 Sup. Ct. Rep. 410 [see, also, Rose’s U. S. Notes], said: “The words of sec. 5151 do not mean that the stockholder promises the creditor, as surety for the debts of the corporation, but merely impose a liability on him secondary to those debts, which debts remain distinct, and to which the stockholder is not a party.” Such is the rule in this state.
Section 4012, Revised Codes of 1907, was in effect the, same as section 6036, supra. In the case of Barth v. Pock, 51 Mont. 418, 155 Pac. 282, in which section 4012 was under consideration, this court, speaking through Mr. Justice Holloway, said: “The creditor of a"' trading corporation must look to the corporation’s assets for the discharge of his claim, but, in a sense, the creditor of a banking corporation has double security. He may look to all the assets of the bank in the first instance, and, if they are not sufficient, he may then call upon the stockholders to contribute a fund which may equal the par value of the entire authorized capital. It is a reserve trust fund created for the benefit of creditors, and under our statute must be distributed ratably to all of them.”
Applying these established rules to the facts in the instant case, we have this result: When defendant purchased her shares of stock she in effect said, with relation to the liability imposed upon her by law: “If the bank becomes insolvent and it be ascertained that it is necessary for me to do so in order to protect its creditors, I will, equally and ratably with the other stockholders, pay into a special fund for their benefit an amount of money, not exceeding the par value of my shares of stock, in addition to the amount I have already invested therein; in other words, if the bank does not and cannot pay its debts, I will do so to the limit of the par value of my shares of its stock.”
The liability thus imposed upon and assumed by the de fendant is in the nature of a guaranty as defined by section 8171, Devised Codes of 1921, which declares: “Aguaranty is a promise to answer for debt, default or miscarriage of another person.” This liability being one imposed by law, is not within the provisions of section 8174, Devised Codes of 1921, which requires a contract of guaranty to be in writing. (27 C. J., p. 317, sec. 403; Rayl v. Rayl, 58 Kan. 585, 50 Pac. 501; Higgins v. Evans, 188 Mo. 627, 87 S. W. 973; Goodwin V. Gilbert, 9 Mass. 510; Fisher v. Wilson, 18 Ind. 133.)
The liability which is made the basis of the plaintiff’s cause of action falls directly within the rule heretofore laid down by this court in Ancient Order of Hibernians v. Sparrow, and Square Butte State Bank v. Ballard, cited above, and referred to with approval in State ex rel. Barnett v. Reynolds, 68 Mont. 572, 220 Pac. 525, to the effect that a contract of guaranty is not one for the direct payment of money within the meaning of section 9256, supra, and so will not support an attachment.
This conclusion is not at all in conflict with the decision in Home State Bank v. Swartz, 72 Mont. 425, 234 Pac. 281. The liability imposed by section 6109d, which was then under consideration differs from that involved in this case, in that the former imposes upon the stockholder a primary obligation running directly from him to the corporation and has none of the elements of a guaranty. The third paragraph of our syllabus of the decision in that case is misleading, as the double liability imposed by section 6036 was not there under consideration.
The order appealed from is affirmed.
'Affirmed.
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.
Upon a former appeal of this cause, the judgment of the lower court was reversed, and a new trial ordered. (Mannix v. Powell County, 60 Mont. 510, 199 Pac. 914.) The second trial resulted in a judgment in favor of the county, and plaintiff has appealed.
Without substantial controversy, the record discloses that in 1898 Joseph Sturgeon received from the state a lease upon school section 36, township 13 north, range 11 west, in Powell county, and thereafter caused a survey to be made of the route of a proposed irrigating ditch from the school section to a point on the south bank of Nevada Creek, near the northeast corner of section 9, township 12 north, range 10 west, the place of intended diversion, and did some work upon the construction of the ditch, which is hereafter called the Sturgeon ditch. The record does not disclose that Sturgeon had, or could have, procured, a water right, or that he could have made use of the ditch if it had been completed.
In January, 1899, Sturgeon sold his interest in the lease and ditch to G. G. Welch, who procured a right of way for the ditch over certain lands and a license to construct it over one parcel at least. Some of the other lands over which the survey extended were public lands of the United States. During 1899 and the early part of 1900 Welch proceeded with the construction work, but the ditch was never completed. The head of the ditch was not connected with the creek, and upon certain sections of the proposed ditch, varying in extent from 150 feet to half a mile, no work whatever was done at any time. The last work that was done upon the ditch was done not later than May, 1900.
In 1903 Welch secured a lease upon the school section, and in 1908 a renewal of the lease, but, before the last term expired, and in 1911, he died, and his estate was duly administered and distributed. The decree of distribution, which assumed to dispose' of all of the property, did not mention the' Sturgeon ditch or the right of way for it. The real property belonging to the estate, which was distributed to the widow and two sons of the deceased, is described in the decree of distribution as the north half and the southeast quarter of section 30, township 13 north, range 10 west. By mesne conveyances this property passed to C. N. Mannix, but the evidence discloses that these lands could not be irrigated from the Sturgeon ditch if it had been completed. The improvements upon the school section were disposed of to third persons, and the section itself was sold by the state and ultimately became the property of Gus and Mary Hoeffner. The route of the ditch as surveyed followed generally the course of the public road through sections 4, 5, and 6, township 12 north, range 10 west, but crossed and recrossed the road wherever necessary to maintain a constant grade.
In 1915 the county made some alterations in and improvements upon the road which interfered with the right of way of the Sturgeon ditch, and also with a ditch owned by C. N. Mannix, and designated the lower ditch. After the road work had been completed, Mannix secured from the Welch heirs á quitclaim deed for the “Sturgeon ditch,” and then instituted this action to quiet title.
Before the second trial, the parties themselves eliminated from the controversy all questions affecting the lower ditch and all of the’ claimed right of way of the Sturgeon ditch, except 1,745 feet thereof in the southwest quarter of section 4, township 12 north, range 10 west, and it is with this piece of ground only that we are now concerned.
The trial court did not make any specific findings, but, from the recitals in the judgment, it is apparent that the cause was disposed of upon the theory that plaintiff had failed to show that he or his predecessors in interest had ever acquired a right'of way for the ditch over the particular strip of ground mentioned.
Although plaintiff refers in his complaint to his interest in the ditch and the right of way, he claims only an easement in the land and not the land itself. (Mannix v. Powell County, above.) It is elementary that an easement can be created, granted or transferred only by operation of law, or •by an instrument in writing, or by prescription (sec. 6859, Rev. Codes 1921; Great Falls Water Works Co. v. Great Northern Ry. Co., 21 Mont. 487, 54 Pac. 963; Smith v. Denniff, 24 Mont. 20, 81 Am. St. Rep. 408, 60 Pac. 398), and since there is not any contention made that the easement claimed was acquired by prescription, or that it was conveyed by the grantee of the government to plaintiff or to any of his predecessors in interest by an instrument in writing, the right, if any, which plaintiff has, must have been secured by operation of law.
Plaintiff offered testimony tending to prove, and for the purpose of this appeal we assume that it did prove, that this particular piece of land was a part of the open, public lands of the United States at the time the route of the ditch was surveyed and the construction work was done.
Sections 2339 and 2340, United States Eevised Statutes (Comp. Stats., secs. 4647, 4648), provide:
“2339. Whenever, by priority of possession, rights to the use of water for mining, agricultural, manufacturing, or other purposes, have vested and accrued, and the same are recognized and acknowledged by the local customs, laws, and the decisions of courts, the possessors and owners of such vested rights shall be maintained and protected in the same; and the right of way for the construction of ditches and canals for the purposes herein specified is acknowledged and confirmed. * * *
“2340. All patents granted, or pre-emptions or homesteads allowed, shall be subject to any vested or accrued water rights, or rights to ditches and reservoirs used in connection with such water rights as may have been acquired under or recognized by the preceding section.”
By the very language of these sections, a vested interest in the public lands to a right of way for an irrigating ditch is not secured until the ditch is completed, and this is the holding of the courts generally, including the supreme court of the United States and this court. (Bear Lake & R. W. & I. Co. v. Garland, 164 U. S. 1, 18, 41 L. Ed. 327, 17 Sup. Ct. Rep. 7; Cottonwood Ditch Co. v. Thom, 39 Mont. 115, 101 Pac. 825, 104 Pac. 281; United States v. Rickey L. etc. Co. (C. C.), 164 Fed. 496; Verde Water & Power Co. v. Salt River etc. Assn., 22 Ariz. 305, 197 Pac. 227; Crane Falls P. & I. Co. v. Snake River Irr. Co., 24 Idaho, 63, 133 Pac. 655.)
As the ditch has never been completed, it follows that, when the land passed from the government into private ownership, it was not subject to a right of way for this ditch. In other words, the right of way was not secured from the United States, and, since neither plaintiff nor his predecessors in interest ever acquired it from the original grantee from the government or his successors in interest, if any, plaintiff failed to establish any interest in himself to the land in controversy. Since neither Welch nor his heirs ever acquired a right of way for the ditch over this particular piece of land, the plaintiff did not acquire anything by the quitclaim deed from the Welch heirs.
As this disposes of the cause, it is unnecessary to consider the alleged errors in admitting testimony on behalf of the defendant; for, if plaintiff does not have any interest in the right of way, it is altogether immaterial to him what interest the county has or whether it has any interest at all.
The judgment is affirmed.
Affirmed.
Mr. Chief Justice Callaway and Associate Justices Galen, Stark and Matthews concur. | [
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] |
ME. CHIEF JUSTICE CALLAWAY
delivered the opinion of the court.
By.the provisions of an Act of the Eighteenth Legislative Assembly it is unlawful for any person to sell, furnish or give away or offer to sell, furnish or give away, or to- have in his possession, peyote (pellote), botanically known as Lophophora Williamsii. A person who violates the Act is guilty of a misdemeanor and upon conviction is subject to a fine of not exceeding $500 or imprisonment in the county jail for a period, of, not to exceed six months, or to both such fine and imprisonment. (Chap. 22, Sess. Laws 1923, p. 40.)
By complaint filed in the justice’s court of Hardin township in Big Horn county, the defendant Big Sheep was charged with the crime of unlawfully having in his possession peyote on or about the ninth day of November, 1924, in the county of Big Horn, state of Montana. The sufficiency of the complaint is not in question. Evidently the case was appealed, because on March 4, 1925, it came on for trial in the district court.
Objection was made seasonably to the jurisdiction of the court on the ground that the defendant, at the time and place mentioned in the complaint, was an Indian, a member of the Crow Tribe, and that the acts alleged to constitute the offense were done upon land within the Crow Indian Reservation, the title to which still remained in the United States.
Want of jurisdiction in the court, if want there was, did not appear upon the face of the complaint. The justice’s court had jurisdiction of the misdemeanor charged if committed within Big Horn county, unless upon land within the exclusive jurisdiction of the United States. It was not necessary to negative the exception, as it was not a constituent part of the offense; that was a matter to be taken advantage of at the trial. Upon the conditions above stated the rule announced in State v. Spotted Hawk, 22 Mont. 33, 55 Pac. 1026, and State v. Tully, 31 Mont. 365, 3 Ann. Cas. 824, 78 Pac. 760, applies. (And see State v. Buckaroo Jack, 30 Nev. 325, 96 Pac. 497.)
However, this objection was lodged at different times during the trial and always overruled. The defendant offered to prove that he was at the time alleged, and for many years theretofore had been, a member in good standing of the Native American Church, and that peyote is used by the members of that church “for sacramental purposes only in the worship of God according to their belief and interpretation of tbe Holy Bible, and according to tbe dictates of their conscience; and that peyote is never used by members of that church except in the worship of God.” They ground their faith upon the Fourteenth Chapter of Romans, the Fifty-third Chapter of Isaiah, second verse, and the Second Chapter of Revelations, seventeenth verse, King James’ Version. The offer was denied.
At the conclusion of the trial the defendant was found guilty as charged and sentenced to pay a fine of $100. His motion for a new trial was denied, whereupon he appealed from the order denying that motion and from the judgment.
1. That the defendant was in the possession of peyote at the home of Austin Stray Calf, which is seven miles south of Hardin within the Crow Indian Reservation, and that defendant is a member of the Crow Tribe is conceded.
The state did not offer any proof to show that title to the land possessed by Austin Stray Calf had passed from the United States. Defendant offered to prove that it had not. The offer was denied. It is evident that the trial court deemed evidence upon the point immaterial.
The question presented is of first impression in this court: May the state in the enforcement of its penal statutes punish an’Indian for an act committed by him upon the reservation ?
At the outset it is important to note that the offense charged was not committed by defendant against another Indian, nor against the laws of the United States. If committed at all it was against the laws of the state of Montana.
It may prove useful to trace briefly the history of the policy of the government with respect to the numerous and once powerful tribes which occupied this soil before the advent of the white man. The framers of the federal Constitution were sensible of problems ahead with respect to the Indians. How they regarded the status of the tribes is not clear, in view of the clause which gave Congress power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” (United States Constitution, Art. I, see. 8, cl. 3.)
The status of the tribes came before the United States supreme court in the great case of Cherokee Nations v. Georgia, 5 Pet. 1, 8 L. Ed. 25, in which Chief Justice Marshall said they might be denominated domestic dependent nations. “Their relation to the United States resembles that of a ward to his guardian.” This became an established doctrine, which is still, to some extent at least, in full force and vigor. (United States v. Kagama, 118 U. S. 375, 30 L. Ed. 228, 6 Sup. Ct. Rep. 1109 [see, also, Rose’s U. S. Notes Supp.]; United States v. Nice, 241 U. S. 591, 60 L. Ed. 1192, 36 Sup. Ct. Rep. 696; Cramer v. United States, 261 U. S. 219, 67 L. Ed. 622, 43 Sup. Ct. Rep. 342.)
The United States has always maintained its primary sovereignty over the soil. And while asserting sovereignty over the Indians themselves, the government for nearly 100 years entered into treaties with the various. tribes. In 1871 this time-honored policy was changed by Congress which then asserted the right to legislate for and concerning the Indians directly.
“No Indian nation or tribe within the Territory of the United States shall be acknowledged or recognized as an independent nation, tribe, or power with whom the United States may contract by treaty; but no obligation of any treaty lawfully made and ratified with any such Indian nation or tribe prior to March third, eighteen hundred and seventy-one, shall be hereby invalidated or impaired.” (16 Stats, at Large, 566; 5 Comp. Stats, sec. 4034.)
As early as 1862, if not before, Congress initiated the policy of allotting lands in severalty to certain Indians who were qualified and desired to receive such, with the promise that patent and citizenship eventually should follow. (13 Stat. 623; XIX Opinions of Attorneys General, 255.) This policy was afterwards described by Mr. Justice Brewer as one “which looks to the breaking up of tribal relations, the establishing of the separate Indians into individual homes, free from national guardianship, and charged with all the rights and obligations of citizens of the United States.” (In the Matter of Heff, 197 U. S. 488, 49 L. Ed. 848, 25 Sup. Ct. Rep. 506.)
The territory of Montana was organized by Act of Congress approved May 26, 1864 (13 Stat. 85). In 1868 the Crow Indian Reservation, based upon a treaty with that tribe, was created, composed of land constituted wholly within the geographic boundaries of Montana. (15 Stat. 649.) In the treaty the allotment policy was recognized to a limited extent, but citizenship was not mentioned. An alteration of this treaty was effected by an agreement which was ratified by Act of Congress April 11, 1882 (22 Stat. 42), by the terms of which the Crows relinquished to the United States large portions of the territory comprehended within the treaty of 1868. The Crow Tribe still lives upon its reservation, receives bounty from the government, and is under the superintendency of a governmental agent who resides at Crow Agency.
In the agreement of 1882 specific provisions were made respecting allotments, but as before nothing was said respecting citizenship. So far as the Crows are concerned that-privilege came to them under the Dawes Act: “An Act to provide for the allotment ■ of lands in severalty to Indians on the various reservations, and to extend the protection of the laws of the United States and the Territories over the Indians, and for other purposes.” (24 Stat. 388.) Section 6 of the Act provided in part that, upon the completion of the allotments and the patenting of the lands to the allottees, “each and every member of the respective bands or tribes of Indians to whom allotments have been made shall have the benefit of and be subject to the laws, both civil and criminal, of the state or territory in which they may reside; * * and every Indian born within the territorial limits of the United States to whom allotments shall have been made under the provisions of this Act, or under any law or treaty, and every Indian born within the territorial limits of the United States who has voluntarily taken up, within said limits, his residence separate and apart from any tribe of Indians therein, and has adopted the habits of civilized life, is hereby declared to be a citizen of the United States, and is entitled to all the rights, privileges, and immunities of such citizens, whether said Indian has been or not, by birth or otherwise, a member of any tribe of Indians within the territorial limits of the United States without in any manner impairing or otherwise affecting the right of any such Indian to tribal or other property.”
There was controversy for a time over the limitation of the trust period fixed in the Act and as to when the allottee became a citizen, but this w;as set at rest by the Act of May 8, 1906, which amended the law so as distinctly to postpone to the expiration of the trust period the subjection of allottees under that Act to state laws. The first part of this section as amended is: “That at the expiration of the trust period and when the lands have been conveyed to the Indians by patent in fee, as provided in section five of this Act, then each and every allottee shall have the benefit of and be subject to the laws, both civil and criminal, of the state or territory in which they may reside.” And at the same time there was added the explicit proviso: “That until the issuance of fee-simple patents all allottees to whom trust patents shall hereafter be issued shall be subject to the exclusive jurisdiction of the United States.” (24 Stat. 390, 34 Stat. 182, now sec. 4203, U. S. Comp. Stats.) Commenting upon these laws the United States supreme court, speaking through Mr. Justice Hughes, in United States v. Pelican, said: “We deem it to be clear that Congress had the power thus to continue the guardianship of the government.” (232 U. S. 442, 58 L. Ed. 676, 34 Sup. Ct. Rep. 396 [see, also, Rose’s U. S. Notes].)
By Act approved June 2, 1924 (U. S. Comp. Stats. Supp. 1925, see. 3951aa), Congress declared: “That all noncitizen Indians bom within the territorial limits of the United States be, and they are hereby, declared to be citizens of the United States: Provided, that the granting of such citizenship shall not. in any manner impair or otherwise affect the right of any Indian to tribal or other property.” What, if any, effect has this enactment upon the problem before us?
In United States v. Waller, 243 U. S. 452, 61 L. Ed. 843, 37 Sup. Ct. Rep. 430 [see, also, Rose’s U. S. Notes Supp.] the court said: “The tribal Indians are wards of the government, and as such under its guardianship. It rests with Congress to determine the time and extent of emancipation. Conferring citizenship is not inconsistent with the continuation of such guardianship, for it has been held that even after the Indians have been made citizens the relation of guardian and ward for some purposes may continue. On the other hand, Congress may relieve the Indians from such guardianship and control, in whole or in part, and may, if it sees fit, clothe them with full rights and responsibilities concerning their property or give to them a partial emancipation if it thinks that course better for their protection. (United States v. Nice, 241 U. S. 591, 598, 60 L. Ed. 1192, 36 Sup. Ct. Rep. 696 [see, also, Rose’s U. S. Notes Supp.], and cases cited.)”
This doctrine the federal courts have maintained consistently. (See Cramer v. United States, supra; Brown v. United States (C. C. A.), 8 Fed. (2d) 433.)
On the other hand it is clear that an Indian who has obtained patent in fee to his allotment not only is a citizen of the United States, but has all the rights, privileges and immunities of citizens of the United States, and is subject to the civil and criminal laws of the state of Montana. He is no longer a ward of the government. His allotment is free from governmental restraint and control.
But has this state any criminal jurisdiction over an Indian, though a citizen, who still retains tribal relations within the Crow Reservation and who commits an act within the reservation, which, if done within the jurisdiction of this state, would be criminal under its laws ?
As they were required to do by the Enabling Act, the people of Montana annexed an ordinance to our Constitution (Ordinance No. 1, division 2d), in which it was declared: “That the people inhabiting the said proposed state of Montana do agree and declare that they forever disclaim all right and title to the unappropriated public lands lying within the boundaries thereof, and to all lands lying within said limits owned or held by any Indian or Indian tribes, and that until the title thereto shall have been extinguished by the United States, the same shall be and remain subject to the disposition of the United States, and said Indian lands shall remain under the absolute jurisdiction and control of the Congress of the United States. * * * ” So it is plain that Congress always had and still has absolute jurisdiction and control over all lands within the Crow Reservation to which title has not been extinguished by the United States.
By reason of its guardianship over Indians maintaining tribal relations — -its “dependent people” (United States v. Kagama, supra; Hallowell v. United States, 221 U. S. 317, 55 L. Ed. 750, 31 Sup. Ct. Rep. 587 [see, also, Rose’s U. S. Notes]), the United States has always asserted its own, and has denied the power of the states, over them. Quickly following the decision in Cherokee Nations v. Georgia, the supreme court in Worcester v. Georgia, 6 Pet. 515, 8 L. Ed. 483, declared that “Though the Indians had by treaty sold their land within that state, and agreed to remove away, which they had failed to do, the state could not, while they re mained on those lands, extend its laws, criminal and civil, over the tribes; that the duty and power to compel their removal was in the United States, and the tribe was. under their protection, and could not be subjected to the laws of the state and the process of its courts. The same thing was decided in the case of Fellows v. Blacksmith & Others, 19 How. 366, 15 L. Ed. 684 [see, also, Bose’s U. S. Notes].”
The foregoing quotation is taken from the opinion of Mr. Justice Miller, in United States v. Kagama, supra, in which the foregoing doctrine is emphasized. In that case the court was considering the effect of an Act of Congress giving jurisdiction to the courts of the territories of the crimes of murder, manslaughter, rape, assault with intent to kill, arson, burglary and larceny, committed by Indians within the territories, and in like cases to courts of the United States for the same crimes committed by an Indian against the person or property of another Indian or other person within the limits of a state, but on an Indian reservation. (23 Stat. 362, sec. 9, now U. S. Comp. Stats., sec. 10502.)
Prior to that enactment the United States had not undertaken to punish Indians for crimes committed between themselves (note the abortive attempt in Ex parte Crow Dog, 109 U. S. 556, 27 L. Ed. 1030, 3 Sup. Ct. Rep. 396 [see, also, Rose’s U. S. Notes], which gave rise to the Act above mentioned); the Indians living under their tribal laws were permitted to regulate their own affairs. The Act did not interfere with the process of the state courts within the reservation, nor with the operation of state laws upon white people or others than Indians found there. Its effect was “confined to the acts of an Indian of some tribe, of a criminal character, committed within the limits of the reservation.” (United States v. Kagama, supra; Draper v. United States, 164 U. S. 240, 41 L. Ed. 419, 17 Sup. Ct. Rep. 107.) Furthermore, by that Act Congress enumerated all crimes committed by Indians against Indians which in its judgment should be cognizable by the territorial and United States courts. (State v. Campbell, 53 Minn. 354, 21 L. R. A. 169,, 55 N. W. 553.)
The United States did not attempt, nor has it ever attempted, to punish its wards for crimes committed within the limits of a state but outside a reservation. Even before he became a citizen, if an Indian committed a crime within this state, and without his reservation, he was held amenable to our laws, and subject to the jurisdiction of our courts. (State v. Spotted Hawk, supra; State v. Little Whirlwind, 22 Mont. 425, 56 Pac. 820; and see Pablo v. People, 23 Colo. 134, 37 L. R. A. 636, 46 Pac. 636; Ex parte Moore, 28 S. D. 339, Ann. Cas. 1914B, 648, 133 N. W. 817; State v. Buckaroo Jack; supra.)
We then arrive at the precise question at bar: Has the state jurisdiction to punish the defendant for committing a misdemeanor which the United States has never assumed to embrace within its jurisdiction? The answer may be treated under four heads:
(1) If the defendant obtained his citizenship through being an allottee who has obtained a patent in fee, the inquiry must be answered in the affirmative. In such case he is subject to the laws, both civil and criminal, of this state. (U. S. Comp Stats., sec. 4203; Smith v. Northern Pac. Ry. Co., 57 Mont. 14, 186 Pac. 684; Kitto v. State, 98 Neb. 164, L. R. A. 1915F, 587, 152 N. W. 380.)
(2) If he is an allottee who has not obtained patent in fee, he is still a ward of the government, although a citizen, and under the provisions of section 4203, unquestionably is “subject to the exclusive jurisdiction of the United States.” Here a negative answer follows. So far as acts committed by him within the reservation may be brought in question, it will be noted that the latter part of that section does not confine jurisdiction to property rights. It was evidently enacted pursuant to the government’s guardian and ward policy with respect to tbe Indians who had not yet been fully emancipated.
(3) If defendant is not an allottee but is a member of the Crow Tribe who has not adopted the habits of civilized life but is still maintaining his tribal relations under the supervision of the Crow Indian agent, he must be deemed a ward of the government, and subject to federal jurisdiction for acts committed by him within the reservation. Here, too, the answer is in the negative.
(4) If defendant is a ward of the government and the act was committed by him upon land to which the United States has relinquished title the state has jurisdiction, and the answer must be in the affirmative.
Lands to which the United States has parted with title and over which it no longer exercises control, even if within the exterior boundaries of the reservation, are not deemed a part of the reservation. All other lands within the reservation boundaries are. What jurisdiction, if any, the United States may assert over lands within the boundaries of a reservation to which it has relinquished title completely — by reason of the fact that such lands lie within the reservation boundaries — is a matter into which we need not now inquire. Some general observations relevant to the subject are appropriate.
The United States courts have always asserted jurisdiction over Indians living on and maintaining tribal relations within their reservations, and whenever the question has been presented have denied the jurisdiction of the state courts over them (United States v. Kagama, supra; Donnelly v. United States, 228 U. S. 243, Ann. Cas. 1913E, 710, 57 L. Ed. 820, 33 Sup. Ct. Rep. 449 [see, also, Rose’s U. S. Notes]; In re Blackbird (D. C.), 109 Fed. 139; In re Lincoln (D. C.), 129 Fed. 247; Yohyowan v. Luce (D. C.) 291 Fed. 425; Quagon v. Biddle (C. C. A.) 5 Fed. (2d) 608.)
Congress has the power, which to some extent it has exercised, to prohibit and punish acts denominated misdemeanors within the reservations. A notable instance is the Act of January 30, 1897 (29 Stat. 506 [U. S. Comp. Stats., sec. 4137]), prohibiting the introduction of liquor into the Indian country. (See Hallowell v. United States, supra; United States v. Sandoval, 231 U. S. 28, 58 L. Ed. 107, 34 Sup. Ct. Rep. 1.) And it has been held that the power extends to regulating and prohibiting traffic in intoxicating liquor with tribal Indians within a state, whether upon or off an Indian reservation. (United States v. Nice, supra.) But this was upon the hypothesis that “these Indians are yet wards of the nation, in a condition of privilege or dependency, and have not been discharged from that condition.” We have not overlooked sections 4148 and 4149 United States Compiled Statutes, but they have not any application to the present inquiry.
Let it be admitted that the United States still retains jurisdiction over the lands within the boundaries of the Crow Reservation to which it has not relinquished title, and over those Indians who have not been fully emancipated. But the United States does not assert exclusive jurisdiction for all purposes over such lands, as we have seen (United States v. Kagama, supra), nor does it ordinarily assert jurisdiction over tribal Indians without the reservation. Probably it would be more exact to say that the United States courts have always asserted federal jurisdiction, and denied state jurisdiction, over Indians who are wards of the government residing within Indian reservations.
It has been stated that it is generally held “that as to Indians on reservations set apart by the United States government, the civil and criminal laws of the states within whose boundaries the reservations are located do not apply, but the Indians are subject only to the laws of the United States government; and that, although an Indian becomes a full-fledged citizen of the United States, if he continues to live on a reservation he is nevertheless subject to the exclusive juris diction of the United States.” (Note to Ex parte Moore, supra, Ann. Cas. 1914B, 652.)
But we think upon an analysis of the decisions cited (United States v. Celestine, 215 U. S. 278 54 L. Ed. 195, 30 Sup. Ct. Rep. 93 [see, also, Rose’s U. S. Notes]; United States v. Sutton, 215 U. S. 291, 54 L. Ed. 200, 30 Sup. Ct. Rep. 116; Donnelly v. United States, supra)—and to these might be added United States v. Pelican, supra, United States v. Nice, supra, and United States v. Sandoval, supra — it is clear that the supreme court has not intended to imply that the government has any special jurisdiction over an Indian who has been fully emancipated. These decisions are grounded wholly upon the duty which the government owes to its dependent peoples — its wards. The fully emancipated Indian is given the same consideration only as is accorded to any other citizen. (United States v. Waller, supra.)
The state courts generally have been in accord with the federal courts respecting these jurisdictional questions. (State v. Campbell, supra; State v. Condon, 79 Wash. 97, 139 Pac. 871; State v. Columbia George, 39 Or. 127, 65 Pac. 604; People ex rel. Cusick v. Daly, 212 N. Y. 183, 38 Ann. Cas. 367, 105 N. E. 1048.)
In State v. Campbell, supra, the court said: “By the Act of 1885, presumably, Congress has enumerated all the acts which in their judgment ought to be made crimes when committed by Indians, in view of their imperfect civilization. For the state to be allowed to supplement this by making every act a crime on their part which would be such if committed by a member of our more highly civilized society would be not only inappropriate, but also practically to arrogate the guardianship over these Indians which is exclusively vested in the general government. Moreover, it is very evident that the state never intended to attempt to extend its criminal laws over tribal Indians for acts committed within a reservation.”
Incidentally, we do not find any pronouncement by tbe legislature indicating an attempt to extend the criminal laws of Montana over tribal Indians for acts committed within a reservation.
The supreme court of Oregon, speaking through Mr. Justice Wolverton, in State v. Columbia George, supra, observed: “That the government, while it has bestowed citizenship, has not thereby relinquished the guardianship of the tribes, indulging them yet a little while, but with greatly restricted authority, in their primitive government; and until the general government has taken its hands off, and relinquished supervision over its Indians, the state court cannot assume jurisdiction touching the criminal acts of one against the other.”
A strange situation is thus created. The Indians upon the Crow Reservation were deemed worthy of citizenship and have been made citizens by Act of Congress. They enjoy all the rights, privileges and immunities of citizens of this state. Through their representatives they join in enacting laws for the government of this state and may jointly with other citizens initiate laws directly, and yet while still maintaining their tribal relations upon their reservation and under the supervision of their governmental agent, they may break with impunity the laws they make; but this is but one evidence of “the natural outgrowth of the anomalous attitude that the general government has maintained toward the Indian from the beginning.” (State v. Columbia George, supra.)
Nothing said in the Matter of Neff, supra, militates against the foregoing. That case, however, in so far as it has to do with national guardianship over the Indians, was overruled in United States v. Nice, supra.
The decisions of state courts which appear to differ in some particulars from the holdings of the federal courts upon these questions either arise under circumstances different from those here presented, or, as in Re Now-ge-zhuck, 69 Kan. 410, 76 Pac. 877, Kitto v. State, supra, and in State v. Doxtater, 47 Wis. 278, 2 N. W. 439, fail to give due weight to the fact that the federal government has exercised, and has the right to exercise, sovereignty over its wards upon Indian reservations within a state.
We conclude, therefore, that if the defendant at the time he committed the act charged was a citizen of the United States, and not under federal restriction, as of guardiansip or if he committed the offense upon land to which the United States has relinquished title, he is subject to the jurisdiction of the courts of this state for the offense committed; otherwise he is not. (See (1), (2), (3), (4), supra.)
If he is an emancipated Indian, clothed in the full panoply of citizenship, who has broken a state law, he may not defend against the power of the state by claiming as a sanctuary the house of Austin Stray Calf, although the title to that place is still in the United States. A white man could not commit the act with impunity there, and neither can Big Sheep simply because he is of Indian blood.
A question of fact is thus presented which makes it necessary to remand this cause for a new trial. If upon the new trial it shall appear that the court has jurisdiction to proceed, it will then be called upon to decide whether the fact that defendant had peyote in his possession for religious purposes in conformity with his religious belief justified his act. Although considerable effort was spent upon this point in the trial of the case, it is not insisted upon with much seriousness in this court.
Section 4 of Article III of the Constitution provides: “The free exercise and enjoyment of religious profession and worship, without discrimination, shall forever hereafter be guaranteed, and no person shall be denied any civil or political right or privilege on account of his opinions concerning religion, but the liberty of conscience hereby secured shall not be construed to dispense with oaths or affirmations, excuse acts of licentiousness, by bigamous or polygamous marriage, or otherwise, or justify practices inconsistent with the good order, peace, or safety of the state, or opposed to the civil authority thereof, or of the United States. No person shall be required to attend any place of worship or support any ministry, religious sect, or denomination, against his consent; nor shall any preference be given by law to any religious denomination or mode of worship.” It is idle to urge that the foregoing provision is in conflict with any provision of the federal Constitution.
It was clearly within the power of the legislature to determine whether the practice of using peyote is inconsistent with the good order, peace and safety of the state. We do not find peyote or any like herb mentioned by Isaiah, or by Saint Paul in his Epistle to the Romans, nor does it seem from the language employed that Saint John the Divine had any such in mind. It is true that Isaiah speaks of a root out of a dry ground. There is a slight resemblance here, as peyote is said to be a product of the cactus plant. The. Fourteenth Chapter of Romans is a lesson concerning brotherly charity. It teaches that men should not condemn one the other, but take heed that they give no offense. Second verse: “For one believeth that he may eat all things; another, who is weak, eateth herbs.” Third verse: “Let not him that eateth despise him that eateth not; and let not him which eateth not judge him that eateth.” These excellent precepts are worthy of much greater observation than they receive; but if carried to the length defendant insists upon, the use of opium, cocaine and even “moonshine” might be justified under the guise of religious observance.
The supreme court of the United States, in Davis v. Beason, 133 U. S. 333, 33 L. Ed. 637, 10 Sup. Ct. Rep. 299 [see, also, Rose’s U. S. Notes], declared that it was never intended or supposed that the first amendment to the Constitution, that “Congress shall make no law respecting the establishment of religion, or prohibiting the free exercise thereof,” should be invoked as a protection against legislation for the punishment of acts in imical to the peace, good order and morals of society. . Ruling Case Law says that while laws cannot interfere with mere religious belief and opinions, they may inhibit acts or practices which tend toward the subversion of the civil government, or which are made criminal by the law of the land. (6 R. C. L. 251.) To the same effect, see State v. Neitzel, 69 Wash. 567, Ann. Cas. 1914A, 899, 43 L. R. A. (n. s.) 203, 125 Pac. 939.
For thé reasons foregoing the judgment and order are reversed and the cause is remanded to the' district court of Big Horn county with direction to grant the defendant a new trial.
Reversed and remanded.
Associate Justices Holloway, Matthews, Galen ' and Stark concur. | [
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JUSTICE HARRISON
delivered the Opinion of the Court.
This is an appeal from an order of the Eighteenth Judicial District Court, Gallatin County, Montana. The order modified a decree of dissolution of marriage. We reverse.
The former husband, respondent Robert Kukes (Robert) commenced this action in 1989 by filing a petition for modification of the 1986 decree, seeking to reduce his child support obligation, share the child’s uncovered medical expenses equally with his former wife, and clarify his visitation rights. Thereafter the former wife, appellant Janet Kukes (Janet) filed a combination petition for contempt and modification or clarification of the decree. These petitions were heard by the District Court, which filed findings of fact and conclusions of law and entered judgment thereon. The decision granted Robert the relief prayed for, and more than he prayed for, including additional relief as determined by the court. This appeal followed.
Janet and Robert were married in Billings, Montana, in November 1981. Their only child, Brittany, was born on August 17, 1984. She has a partial hearing loss and must wear two hearing aids. The marriage was dissolved in Bozeman, Montana, on May 5, 1986. At the time of the dissolution, Robert was enrolled as an undergraduate in the School of Engineering at Montana State University (M.S.U.), while Janet was a graduate student in the School of Education at M.S.U., seeking elementary teacher certification. Janet received certification in December 1986 and moved to Great Falls, Montana, where she taught elementary school and eventually became a case manager for Quality Life Concepts, Inc. Robert received an engineering degree in June, 1990 and moved to Las Vegas, Nevada, where he was employed as an engineer at the time of this appeal.
The parties entered a “marital and property settlement agreement” in April 1986. This agreement was incorporated in the decree of dissolution. It gave Janet sole custody of Brittany, with Robert to have liberal visitation rights. Robert was to pay child support at the rate of $300 per month, adjusted annually based on the Consumer Price Index. He also agreed to maintain major medical and hospital insurance for Brittany’s benefit and to pay all of her uncovered medical, dental, and optical expenses until she reached the age of 21; to establish a trust fund for Brittany at the First Security Bank in Bozeman and to contribute $50 a month to that fund initially and $75 a month after he graduated from college, until Brittany either used the fund for college education or reached the age of 21; and to maintain an $80,000 life insurance policy naming Brittany as the beneficiary.
As support and maintenance, Robert agreed to pay Janet’s expenses for four quarters as a full-time student, including tuition, books, and living expenses. The total sum, $9,800, was to be deferred until six months after Robert had finished college, at which time Robert was to begin making monthly payments, including interest at the annual rate of 10 per cent.
On April 19,1989, Robert filed a petition for modification alleging that he was a full time student without sufficient money to pay child support as provided in the decree, and that he had been denied liberal visitation rights. Janet moved to dismiss this petition, on the grounds that Robert had not shown changed circumstances “so substantial and continuing as to make the terms of the decree unconscionable,” as § 40-4-208(2)(b), MCA, requires. Robert had been a full time student in 1986 when the decree was entered, and he was still a full time student when he filed his petition for modification. The District Court denied Janet’s motion on June 20,1989, noting that the motion was “sound in many respects, particularly on the change of the amount of child support,” but concluding that it should hear Robert’s allegations regarding denial of visitation and establish his visitation rights.
A hearing was set for April 30,1990, but it was continued without a date after Janet requested that the child support issue not be decided until after Robert had completed his education. Robert graduated in June 1990 and in July 1990 he moved to Las Vegas.
On October 29, 1990, Janet filed a petition for contempt and modification or clarification of the decree, alleging that she had not received evidence of health insurance coverage for Brittany; that Robert had not reimbursed her for medical expenses incurred on Brittany’s behalf; that Robert had borrowed $2,197.91 against his life insurance policy and the insurance company had told her the policy might be canceled; and that she had been unable to determine whether Robert had been contributing to Brittany’s trust fund as provided in the decree of dissolution. The District Court heard argument on this petition and on Robert’s petition as well, on February 11, 1991.
Janet presents seven issues referring to decisions not supported by the evidence and constituting an abuse of discretion by the District Court. We have restated them as follows:
1. Whether this Court’s adoption of child support guidelines constituted, in itself, a change of circumstances so substantial and continuing as to make the terms of the decree of dissolution unconscionable, as contemplated by § 40-4-208(2), MCA.
2. Whether the District Court’s findings of fact were sufficient to demonstrate a change of circumstances so substantial and continuing as to make the decree unconscionable, absent a finding that the adoption of the guidelines satisfied the requirement.
3. Whether the District Court erred in failing to consider all of the relevant factors set forth in the applicable statutes and child support guidelines.
4. Whether the District Court should have granted Robert relief that he had not sought, when Janet had no opportunity for contrary argument.
5. Whether the District Court erred in modifying Robert’s child support obligation retroactively.
6. Whether the District Court erred in failing to consider Janet’s prayer for attorney’s fees.
7. Whether the District Court erred in failing to adhere to the statutory requirements for income withholding and in failing to advise the parties of the jurisdiction of the Department of Social and Rehabilitation Services to review and modify child support in the future.
As the first two issues both address the statutory standard for modification of child support, we consider them together. The question common to both is whether the District Court’s modification of child support was justified by a change of circumstances so substantial and continuing as to make the terms of the original decree unconscionable, as § 40-4-208(2)(b), MCA, requires, absent written consent of the parties.
We conclude that child support modification was not justified in this case; therefore we do not address the remaining issues.
In its Finding of Fact No. 16 the District Court stated that this Court’s adoption of the guidelines was “an event constituting substantial change of circumstances for [Robert].” This was the court’s only finding concerning changes in Robert’s circumstances. Thus, even taken in a light most favorable to Robert, the court’s findings of fact fail to show any change in Robert’s circumstances that would justify a reduction in the amount of child support below the amount established in the original decree. Indeed, the record suggests that Robert’s circumstances improved substantially between the time of the original decree, whén he was a student, and the time of the hearing on his petition for modification, when he was employed as a civil engineer.
Our standard of review for an award of child support is that a presumption exists in favor of the district court’s determination. We will reverse a district court’s determination only for an abuse of discretion. In re Marriage of Clingingsmith (1992), 254 Mont. 399, 406, 838 P.2d 417, 421-22. With regard to the district court’s findings of fact, however, we have held that “[ejrror occurs when the court accepts one party’s proposed findings of fact without proper consideration of the facts and where there is a lack of independent judgment by the court.” In re Marriage of Callahan (1988), 233 Mont. 465, 472, 762 P.2d 205, 209. Here, the District Court clearly erred in failing to make findings of fact that support its modification of child support.
In Gall v. Gall (1980), 187 Mont. 17, 20, 608 P.2d 496, 498 we stated that:
the essential requirement is that there be an evidentiary basis to determine that it would be unconscionable to continue the child support payments presently in effect.
Accord, In re Marriage of Forsman (1987), 229 Mont. 411, 747 P.2d 861; In re Marriage of Bliss (1980), 187 Mont. 331, 609 P.2d 1209. We conclude that adoption of the guidelines was not in itself a sufficient change of circumstances to justify modification of child support under § 40-4-208, MCA.
We reverse and remand for entry of an order consistent with this opinion.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, TRIEWEILER, HUNT and WEBER concur. | [
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JUSTICE McDONOUGH
delivered the Opinion of the Court.
Montana Bank of Billings appeals from a judgment entered against it in the District Court for the Thirteenth Judicial District, Yellowstone County. The court awarded Betty L. Tonack $111,270 in damages on her claims of wrongful discharge and age discrimination. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
We restate the dispositive issues as:
1. Are certain findings of fact concerning the claim of violation of the Age Discrimination in Employment Act clearly erroneous?
2. Did the District Court incorrectly interpret or misapply the provisions of the Age Discrimination in Employment Act?
3. Did the District Court incorrectly interpret or misapply the provisions of the Wrongful Discharge Act?
Betty Tonack began working for the Montana Bank of Sidney in 1981. When she began working there, Tonack held a teller position. She was promoted to teller supervisor. In October 1988, she took a job with the Montana Bank of Billings, with which the bank in Sidney was affiliated. When she moved to Billings, she became the bank’s Financial Services Representative (FSR).
■ In January of 1990, Tonack’s performance as an FSR was evaluated as fully satisfactory; “more toward the excellent side.” She was given additional duties and responsibilities as a teller supervisor in addition to her duties as the FSR.
In May 1990, Lynette Kiedrowski became Tonack’s new supervisor. In August 1990, after irregularities were discovered in a bank audit, Kiedrowski placed Tonack on a 30-day probation. The irregularities included a theft that had occurred in the travelers check area of the bank. The area in which the theft occurred was not under Tonack’s supervision and the theft occurred while Tonack was away on vaca tion. When she placed Tonack on probation, Kiedrowski also relieved her of all duties other than her FSR duties.
While she was still on probation, Tonack became aware that the bank had ordered calling cards prepared for a newly-hired bank employee, Rhonda Kreamer, which showed Kreamer’s job title as FSR. The bank had only one FSR position. Also, Kiedrowski instructed Tonack to cross-train Kreamer to serve as backup FSR.
During the week the training was to occur, Kiedrowski was out of town. The person who had been expected to cover for Kreamer during training failed to report to work. Tonack therefore decided to postpone the training. Kreamer resigned. When Kiedrowski returned, she immediately met with Tonack and terminated Tonack’s employment. Tonack was 49 years old at that time.
The parties waived jury trial and the case was tried to the court. After hearing the evidence, the court concluded that Tonack was terminated from her employment in violation of both the Montana Wrongful Discharge From Employment Act (Wrongful Discharge Act), §§ 39-2-901 to 914, MCA, and the federal Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634. It awarded Tonack damages under the Wrongful Discharge Act for four years of future lost wages and benefits. In addition, the court awarded damages under the ADEA, calculating those damages from the last date of damages awarded under the Wrongful Discharge Act to Tonack’s expected date of retirement.
I
Are certain findings of fact concerning the claim of violation of the Age Discrimination in Employment Act clearly erroneous?
The bank challenges eighteen of the District Court’s findings of fact. Here, we address only those findings relating to the ADEA claim.
This Court will affirm findings of fact if they are not clearly erroneous; that is, if they are supported by substantial evidence, the trial court has not misapprehended the effect of the evidence, and this Court is not left with a definite and firm conviction that a mistake has been made. Interstate Production Credit v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287. The credibility and weight given evidence and witnesses by the trial court must be granted great weight on appeal. Morning Star Enterprises v. R.H. Grover (1991), 247 Mont. 105, 113, 805 P.2d 553, 558. It is the duty of the trial court, not this Court, to resolve conflicts in the evidence. Wood v. Ulmer’s Car and Truck (1989), 236 Mont. 353, 359, 769 P.2d 1264, 1268.
The bank challenges the findings that there were no reviews of Tonack’s performance as FSR during her 30 days of probation and that her performance in that position was satisfactory. The record contains Kiedrowski’s notes made following the meeting in which she placed Tonack on probation, but we do not consider those informal notes as a performance review. Tonack’s last written performance evaluation of record was done by Kiedrowski in May 1990. That evaluation indicated that Tonack was performing “at standard” as FSR/CSR Supervisor. Tonack’s exhibits establish that she received the bank’s “MVP” award for outstanding sales efforts for the month of September 1990, supporting the finding that her performance as FSR was in fact above average.
The Bank claims there is no evidence to support the findings that Tonack was replaced by a substantially younger employee. A portion of Kiedrowski’s deposition appended to a brief filed in District Court established that Rhonda Kreamer withdrew her resignation and assumed some of Tonack’s duties after Tonack’s employment was terminated. Tonack testified at trial that Kreamer “was a much younger person than I.”
The bank challenges several findings concerning statements of George Balback, the president of Montana Bancsystem, the holding company for the bank. Gary Nichols, vice-president of the bank until August of 1990, testified about conversations he had with Balback between January and August of 1990. In those conversations, Balback expressed that he did not believe Tonack was right for her position because of her age and background. Although the bank contends that there was no testimony that Balback said Tonack should be fired because of her age, Nichols’ testimony is clearly to that effect. Nichols testified that Balback stated that he had encouraged those responsible to make a change because he did not want Tonack in the FSR position and that he felt Kiedrowski would “get it handled.”
The bank challenges the finding that Balback could influence hiring and firing. That finding is supported by Nichols’ testimony that Balback had the authority to prevent him from making Tonack teller supervisor.
We hold that substantial evidence supports the above findings and that the court did not misapprehend the effect of the evidence. The findings do not leave us with the impression that a mistake has been made.
II
Did the District Court incorrectly interpret or misapply the provisions of the ADEA?
The bank claims that Tonack’s ADEA case was fatally flawed in that Tonack did not establish the necessary element of pretext. It alleges that the court incorrectly characterized certain evidence as “direct evidence” and challenges certain findings made by the District Court.
To establish a prima facie case of age discrimination under the ADEA, a plaintiff must either provide direct evidence of discrimination or produce evidence that 1) she was in the protected age group; 2) she was performing her job satisfactorily; 3) she was discharged; and 4) she was replaced by a substantially younger person. Rose v. Wells Fargo & Co. (9th Cir. 1990), 902 F.2d 1417, 1421. The burden then shifts to the defendant to articulate a nondiscriminatory reason for the discharge. Texas Dept, of Community Affairs v. Burdine (1981), 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207, 215. The burden then shifts back to the plaintiff to prove by a preponderance of the evidence that the reasons articulated by the employer for termination are merely a pretext for discrimination. Burdine, 450 U.S. at 253, 101 S.Ct. at 1093.
Tonack uncontrovertedly established that she was in the protected age group and that she was discharged. Under Issue I, we have approved findings which establish that she was performing her job satisfactorily and that she was replaced by a substantially younger person. We conclude that Tonack presented a prima facie case that the bank violated the ADEA in terminating her employment.
The bank rebutted the presumption of discrimination through its evidence that Tonack was discharged for a legitimate reason, failure to correct deficiencies in the teller supervisor area and her inability to work with others.
Tonack provided evidence to disprove the legitimate explanation offered by the bank. Contrary to the bank’s assertions, a court may rely on all evidence, including evidence used to establish a prima facie case, to establish pretext. Burdine, 450 U.S. at 256, n. 10, 101 S.Ct at 1095, n.10. Also contrary to the bank’s assertions, a finder of fact may infer that age discrimination took place. Merrick v. Northern Natural Gas Co. (10th Cir. 1990), 911 F.2d 426, 429. Taken together, the evidence of Tonack’s satisfactory performance reviews, the testimony about Balback’s statements that Tonack should go and that Kiedrowski would “get the job done,” the erroneous basis for placing Tonack on probation, the ordering of business cards showing Kreamer’s position as FSR, and the circumstances of Tonack’s termination indicate that the articulated reason for discharge was a pretext.
We hold that the District Court did not incorrectly interpret or misapply the provisions of the ADEA and that it did not err in ruling that Tonack established that the bank violated the ADEA in terminating her employment.
Ill
Did the District Court incorrectly interpret or misapply the provisions of the Wrongful Discharge Act?
The Wrongful Discharge Act provides, at § 39-2-902, MCA:
Except as provided in 39-2-912, this part provides the exclusive remedy for a wrongful discharge from employment.
Section 39-2-912, MCA, states:
This part does not apply to a discharge:
(1) that is subject to any other state or federal statute that provides a procedure or remedy for contesting the dispute. Such statutes include those... that prohibit unlawful discrimination based on... age.
The bank claims these statutes prohibit Tonack from recovering under both the ADEA and the Wrongful Discharge Act.
Tonack cites two Montana federal district court decisions in which it has been held that concurrent actions under the Wrongful Discharge Act and the ADEA are not prohibited when there are separate and distinct factual predicates to support each claim. Vance v. ANR Freight Systems, Inc. (D.Mont. 1991), 9 Mont. Fed. Rpts. 36, 39-40; Higgins v. Food Services of America, Inc. (D.Mont. 1991), 9 Mont. Fed. Rpts. 529, 530. We decline to completely follow those decisions, exercising our prerogative as the ultimate authority on the interpretation of Montana statutes.
Section 39-2-912, MCA, provides that the Wrongful Discharge Act does not apply to “a discharge” subject to other statutes. It does not provide that the Act applies to all factual claims not covered by other statutes. Tonack’s claims under both the ADEA and the Wrongful Discharge Act relate to one discharge from employment at the bank. We conclude that Tonack may not recover under both the ADEA and the Wrongful Discharge Act.
In Deeds v. Decker Coal Co. (1990), 246 Mont. 220, 805 P.2d 1270, this Court held that the above statutory provisions did not prohibit a wrongful discharge action by union employees because the National Labor Relations Board had not yet filed a complaint against the discharged employees. If the NLRB filed such an action, the Court stated, a “procedure or remedy for contesting the dispute” would be set in motion and the statutory exemption of § 39-2-912, MCA, would apply. Deeds, 805 P.2d at 1271.
Whether a discharge will ultimately be “subject to any other state or federal statute that provides a procedure or remedy for contesting the dispute” is not immediately known when a claim is filed. This must be determined before it is known whether the Wrongful Discharge Act may be applied. It is established only when a finder of fact has made that determination or when judgment on the claim has otherwise been entered. Therefore, we conclude that claims may be filed concurrently under the Wrongful Discharge Act and other state or federal statutes described in § 39-2-912, MCA, but if an affirmative determination of the claim is obtained under such other statutes, the Wrongful Discharge Act may no longer be applied. To the extent that this conclusion modifies our holding in Deeds, that opinion is so modified.
In this case, the Wrongful Discharge Act was no longer applicable following the District Court’s factual determination that the ADEA applied to Tonack’s discharge from employment. We therefore hold that Tonack is not entitled to recover damages under the Wrongful Discharge Act, and we reverse the District Court’s conclusion on that issue.
Because of the above conclusions and holdings, we do not address the bank’s issues concerning computation of damages or the findings of fact relevant to Tonack’s claim under the Wrongful Discharge Act. We remand this case to the District Court for recalculation of damages consistent with this Opinion.
JUSTICES GRAY, HUNT and HARRISON concur. | [
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MR. JUSTICE SHEEHY
delivered the opinion of the court.
This is an appeal by Milon L. Dickerson from the property distribution in the parties’ decree of dissolution of marriage granted by the Hon. Joseph B. Gary in the Eighteenth Judicial District Court, Gallatin County.
Milon L. Dickerson and Ann S. Dickerson were married at Bozeman, Montana on April 6, 1957. They have three children: two daughters, Merianne Dickerson and Carrie Dickerson, and one son, Bruce Dickerson. All of the Dickerson children are over eighteen years of age.
Before the dissolution of their marriage, the Dickersons were a typical Montana ranch family, sharing in the duties of maintaining a hay/cattle operation and a dairy ranch fifteen miles southwest of Bozeman, Montana. Milon Dickerson handled most of the farm work. Ann Dickerson did farm chores and supplemented the family’s income by working as a bookkeeper. The Dickersons began their ranch in 1961 by leasing ranch property from the parents of Ann Dickerson. In 1971, Ann Dickerson’s mother, Jean Stimson, transferred the ranch property to Ann, half by gift and half at the value of $200 per acre, secured by a mortgage upon which Ann and Milon Dickerson were liable. This mortgage was paid by the Dickersons after it was partially forgiven by gifts by Stimson to the Dickersons. The Dickerson ranch property presently includes approximately 200 acres of land held partially in joint tenancy and the remainder by Ann Dickerson alone.
In addition to the ranch property, the Dickersons own livestock valued at $14,880.00, equipment valued at $13,314.55, a truck and automobile valued at $1,800.00 each and miscellaneous personal property. Each of the Dickersons separately own personal property. Milon Dickerson owns his own tack, shop tools, bank accounts, A. I. inventory and livestock feed. Ann Dickerson owns her own bank accounts and is the sole beneficiary of a trust established by her mother. The Dickersons owe $69,861.76 in debts.
Milon and Ann Dickerson were unable to agree on a property division. After a trial without jury, judgement was entered on Oc tober 9, 1979, dissolving the Dickerson marriage and incorporating the findings of fact and conclusions of laws previously made by the court. The District Court ordered that Milon and Ann Dickerson be individually awarded the property separately owned by each of them. Milon Dickerson was awarded the parties’ truck and Ann Dickerson was awarded the automobile. Except for a $40,000.00 gift of property to Ann Dickerson, the District Court held the remaining Dickerson property was marital property and should be divided equally.
The District Court received conflicting testimony as to the value of the Dickerson ranch land. Ann Dickerson testified the land was worth $1,000.00 per acre. Norman C. Wheeler of Belgrade, Montana, a local real estate appraiser and consultant, testified in behalf of Milon Dickerson, estimating that a portion of the Dickerson ranch was worth $3,000.00 per acre and the rest of the ranch was worth $2,000.00 per acre. Wheeler testified that there is a high demand in the Gallatin Valley for gentlemen-type farms and ranches and that this demand establishes the area real estate market.
The District Court adopted the $1,000.00 per acre value for the ranch property and in finding of fact no. 11, the court divided the marital property as follows:
ANN DICKERSON
In a memorandum to the finding of fact and conclusions of law, the District Court explained its selection of a $1,000.00 per acre value for the ranch property. The District Court provided:
“In arriving at the appraisal of $1,000 per acre, the Court adopted the appraisal of the respondent as the major owner of the real estate. I will grant that the petitioner’s appraiser appraised the property considerably in excess of this, ranging from $2,000 to $3,000 per acre, but this was subject to an assumption that it would be sold for subdivision purposes. . . .”
“. . . At the post-trial conference, counsel for the petitioner indicated a displeasure with the concept that the Court was adopting and felt that adopting the appraisal of the property utilized by the respondent was improper. However, if you examine the income tax records, it is obvious that the property does not have an earning capacity based on any $2,000 to $3,000 per acre valuation.
One issue is presented by appellant on appeal: Did the District Court err in its valuation of the ranch property, resulting in a substantially inequitable division of the marital assets?
The disposition of property owned by a husband and wife in a dissolution of their marriage is governed by section 40-4-202, MCA.
“In a proceeding for dissolution of a marriage . . . the court . . . shall . . . finally equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title thereto is in the name of the husband or wife or both. . .”
This Court’s scope of review of a District Court dissolution of marriage property division was recently restated as follows:
“A District Court has far-reaching discretion in resolving proper-, ty divisions, and its judgment will be altered unless a clear abuse of discretion is shown. (Citation omitted.) The test 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?” (Citation omitted.) In re Marriage of Jacobson (1979), 183 Mont. 517, 600 P.2d 1183, 1186.
This Court has ordered the District Court to reconsider its property division if the District Court was clearly unadvised of the current value of the parties’ assets, or if the District Court ordered a substantially inequitable division of the parties’ assets. In re Marriage of Brown (1978), 179 Mont. 417, 587 P.2d 361; Kruse v. Kruse (1978), 179 Mont. 79, 586 P.2d 294.
In Downs v. Downs (1976), 170 Mont. 150, 551 P.2d 1025, we directed the District Court to hold a new trial because the evidentiary record contained no reliable estimate of the husband’s net worth. In Martinez v. Martinez (1978), 175 Mont. 280, 573 P.2d 667, we vacated the disposition of property ordered by the District Court and remanded the case for a new hearing because the District Court had failed to ascertain the present values of property owned by the parties.
Substantially inequitable property divisions were reversed by this Court in In re Marriage of Berthiaume (1977), 173 Mont. 421, 567 P.2d 1388; and In re Marriage of Brown, supra. In Brown, the District Court awarded the wife $25,000.00 for her interest in a $350,000.00 ranch, the major marital asset. In Berthiaume, the District Court found that the parties’ marital property should be equally divided, but the court awarded the husband over $17,000.00 of the marital property and awarded the wife less than $1,000.00 of the property. In both cases, one spouse was awarded over 90 percent of the marital property. Both property decrees were held to be substantially inequitable and were reversed.
The case now before the Court is different from Downs, Martinez, Brown or Berthiaume. In this case, evidence was presented to the District Court regarding the present net worth of the parties’ property. Extensive evidence was received by the court including the testimony of the parties, copies of the parties’ tax returns, a listing of the parties’ property, and an appraisal of the parties’ real property. No substantially inequitable division of property was ordered by the District Court. The court, after ascertaining the parties’ net worth, awarded the wife assets worth approximately $165,000.00 and awarded the husband assets worth approximately $195,000.00 while ordering him to pay the debts. Except for the $40,000.00 gift to Ann Dickerson, the Dickerson marital property was divided equally. This property division is not substantially inequitable.
The property valuation issue presented in this case is similar to the property valuation issue presented in Biegalke v. Biegalke (1977), 172 Mont. 311, 564 P.2d 987. In Biegalke, the appellant contended that an inaccurate property appraisal was used by the District Court to divide the parties’ property. In the case now before us, the record indicates that the District Court was presented with conflicting evidence of the value per acre of the Dickerson ranch. Testimony regarding the per acre value of the ranch was given by the respondent and by an appraiser, an expert witness testifying in behalf of the petitioner. The District Court, as the trier of fact in this trial without a jury, accepted the value of the respondent and rejected the expert’s valuation. This is not reversible error. As we explained in Biegalke, “. .. the trier of the facts has the discretion to give whatever weight he sees fit to the testimony of the expert from 0 to 100%.” Biegalke, 172 Mont, at 317, 564 P.2d at 990. Unless a finding of fact is clearly erroneous, it cannot be set aside by this Court. See, Rule 52(a), M.R.Civ.P.
The judgement 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.
Defendant was convicted by a jury of criminal possession of dangerous drugs in the Third Judicial District, County of Powell, on February 13, 1979, and received a deferred sentence.
On September 28, 1978, three officers responded to a complaint by John Wilson, an apartment building manager, that there was a loud party taking place in an apartment rented by one Annie Smith. The officer proceeded to Ms. Smith’s apartment but the noise and music was under control when they arrived. However, they did smell the strong odor of burning marijuana, though they could not determine exactly the apartment from which it emanated, as there were two apartment doors approximately four feet apart. The officers knew that the defendant was a frequent visitor at Ms. Smith’s apartment. One deputy approached the door to the apartment beside Ms. Smith’s and was met by a tenant who informed the officer that the apartment Ms. Smith rented was across the hall.
The officers then approached Ms. Smith’s apartment and one of the officers knocked at the door which, they testified, swung open at the force of the knock. When the door opened the officers smelled a strong odor of burning marijuana. The officers walked in without express permission. One of the officers noticed some marijuana and drug paraphernalia on a coffee table.
They then arrested the people in the apartment and advised them of their Miranda rights. After the arrests were made, the officers asked Ms. Smith if they could search her apartment. They did not have either a search or arrest warrant. Ms. Smith initially refused to consent to the search, but after some coaxing by the officers plus their informing her that they would get permission from the landlord to search, she finally agreed to the search. Defendant, after arguing with the officers, eventually assisted them in their search, giving them some marijuana which had been located under a coffee table and was not in plain view and some stems and seeds from the kitchen. Defendant had no marijuana on his person.
Ms. Smith rented the apartment and was not dependent on her parents for support although she was only sixteen years old. Defendant alleged he was permanently residing in the apartment with Ms. Smith and that he paid rent for the apartment but had no contractual relationship with the landlord.
After his arrest, defendant moved to suppress the items seized in the search and dismiss the information on the grounds that the officers’ entry was unlawful and that the search was in violation of his constitutional rights. A suppression hearing was held on December 14, 1978, and briefs were filed. The motion to suppress was denied. At the trial, the jury found defendant guilty, and he was sentenced by the District Court. From this judgment and the denial of the motion to suppress, defendant brings this appeal.
Defendant-appellant presents the following issues for review by this Court:
1. Does a person permanently living in an apartment have standing to suppress evidence for an unlawful entry and search when he was present on the premises?
2. Does the smell of marijuana constitute sufficient probable cause to make a warrantless entry into and search of a home?
3. Assuming probable cause, can the police enter a private residence without a warrant, exigent circumstances, or an invitation?
4. Did Annie Smith’s consent to search defeat any right of defendant to object?
Defendant initially contests the officers’ entry into the apartment where he was residing. He insists probable cause here was based solely upon the smell of marijuana and that this is insufficient for a search warrant, let alone a warrantless entry. Defendant submits he was permanently residing at his fiancee’s apartment and that under recent Supreme Court authority the test for Fourth Amendment violations is whether the defendant had a legitimate expectation of privacy in the place searched. Defendant argues he had a legitimate expectation of privacy because the place searched was his residence. Finally, defendant asserts that Montana’s constitutional right to privacy protects against the type of warrantless entry which took place here.
The State contends that Fourth Amendment rights are personal rights which may not be asserted vicariously and argues that defendant does not have standing to object to the search of Annie Smith’s apartment. The State further contends that the defendant did not have a legitimate expectation of privacy under the circumstances that existed in this case. The State argues that Annie Smith’s consent was valid and sufficient to override defendant’s objection to the search. Defendant, it is asserted, also waived any objection he had to the search when he aided the officers in the search of the apartment. The State insists that the officers had sufficient probable cause to enter the apartment and to make the arrests, and that once the arrest was complete, the officers had the right to make a search incident to an arrest.
Initially we face the question of whether defendant had standing to suppress the evidence seized. Defendant contends that under the United States Supreme Court holdings in Jones v. United States (1960), 362 U.S. 257, 80 S.Ct. 725, 4 L.Ed.2d 697, and Rakas v. Illinois (1978), 439 U.S. 128, 99 S.Ct. 421, 58 L.Ed.2d 387, he had standing to contest an unlawful entry and search of the apartment.
In Jones the defendant was present at the time of the search of an apartment which was owned by a friend. The friend had given Jones permission to use the apartment and a key to it, with which Jones had admitted himself on the day of the search. He had a suit and shirt at the apartment and had slept there for a night; however, his home was elsewhere. At the time of the search, Jones was the only occupant of the apartment, the lessee having gone away for several days. Based on the above facts the United States Supreme Court held that while one wrongfully on the premises could not move to suppress evidence obtained as a result of searching them, “anyone legitimately on premises where a search occurs may challenge its legality.” 362 U.S. at 267, 80 S.Ct. at 734.
Despite the urging by the defendant in Rakas to relax the rule in Jones, the Court declined to extend the rule of standing in Fourth Amendment cases and limited the broad language of Jones. It stated:
“We do not question the conclusion in Jones that the defendant in that case suffered a violation of his personal Fourth Amendment rights if the search in question were unlawful. Nonetheless, we believe that the phrase ‘legitimately on premises’ coined in Jones creates too broad a gauge Jor measurement of Fourth Amendment rights. For example, applied literally, this statement would permit a casual visitor who has never seen, or been permitted to visit the basement of another’s house to object to a search of the basement if the visitor happened to be in kitchen of the house at the time of the search. Likewise, a casual visitor who walks into a house commences and leaves one minute after the search ends would be able to contest the legality of the search. The first visitor would have absolutely no interest or legitimate expectation of privacy in the base ment, the second would have none in the house, and it advances no purpose served by the Fourth Amendment to permit either of them to object to the lawfulness of the search.
“We think that Jones on its facts merely stands for the unremarkable proposition that a person can have a legally sufficient interest in a place other than his own home so that the Fourth Amendment protects him from unreasonable governmental intrusion into that place. [Citation omitted.] In defining the scope of that interest, we adhere to the view expressed in Jones and echoed in later cases that arcane distinctions developed in property and tort law between guests, licensees, invitees, and the like, ought not to control. [Citations omitted.] But the Jones statement that a person need only be ‘legitimately on premises’ in order to challenge the validity of the search of a dwelling place cannot be taken in its full sweep beyond the facts of that case.
“Katz v. United States, 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967), provides guidance in defining the scope of the interest protected by the Fourth Amendment. In the course of repudiating the doctrine derived from Olmstead v. United States, 277 U.S. 438, 48 S.Ct. 564, 72 L.Ed. 944 (1928), and Goldman v. United States, 316 U.S. 129, 62 S.Ct. 993, 86 L.Ed. 1322 (1942), that if police officers had not been guilty of a common-law trespass they were not prohibited by the Fourth Amendment from eavesdropping, the Court in Katz held that capacity to claim the protection of the Fourth Amendment depends not upon a property right in the invaded place but upon whether the person who claims the protection of the Amendment has a legitimate expectation of privacy in the invaded place. [Citations omitted.] Viewed in this manner, the holding in Jones can best be explained by the fact that Jones had a legitimate expectation of privacy in the premises he was using and therefore could claim the protection of the Fourth Amendment with respect to a governmental invasion of those premises, even though his ‘interest’ in those premises might not have been a recognized property interest at common law. [Citation omitted.]” Rakas v. Illinois, 439 U.S. at 141-43, 99 S.Ct. at 429-430.
The Court went on to factually distinguish Rakas from Jones and stated:
“. . . Jones not only had permission to use the apartment of his friend, but had a key to the apartment with which he admitted himself on the day of the search and kept possessions in the apartment. Except with respect to his friend, Jones had complete dominion and control over the apartment and would exclude others from it. Likewise in Katz, the defendant occupied the telephone booth, shut the door behind him to exclude all others and paid the toll, which ‘entitled [him] to assume that the words he utter[ed] into the mouthpiece [would] not be broadcast to the world.’ [Citation omitted.] Katz and Jones could legitimately expect privacy in the areas which were the subject of the search and seizure they sought to contest. . .” 439 U.S. at 149, 99 S.Ct. at 433.
Similarly, in this case, defendant had a legitimate expectation of privacy in the apartment searched. He shared it with his girlfriend and except with respect to her had complete dominion and control over the apartment and could exclude others from it. Here, as in Jones and Katz, the defendant had a legitimate expectation of privacy in the areas subject to the search and seizure. Defendant was, therefore, entitled to contest the legality of the search and seizure.
Once it has been determined that defendant was entitled to contest the legality of the search and seizure, our analysis must shift to the question of whether the challenged search and seizure violated defendant’s Fourth Amendment rights. “That inquiry . . . requires a determination of whether the disputed search and seizure has infringed an interest of the defendant which the Fourth Amendment was designed to protect.” Rakas v. Illinois, 439 U.S. at 140, 99 S.Ct. at 429.
Defendant contends that the police lacked sufficient probable cause to make a warrantless entry into the apartment. He concludes, therefore, that the entry was unlawful and any evidence seized should be suppressed. The State, on the other hand, contends that under the facts and circumstances of this case the police of ficers had probable cause to believe an offense had been or was being committed before they ever entered the apartment, and therefore, they had the right to enter the apartment and make the arrest.
As the arrest, search and seizure were made without warrants, the outcome of this case rests on a determination of whether or not the search and seizure were made incident to a lawful arrest. The controlling issue, then, is whether defendant’s arrest was lawful at the outset, thereby justifying the subsequent search and seizure of the contraband which led to defendant’s conviction.
For purposes of this decision it is necessary to place the discussion of the plan view seizure of the marijuana on the coffee table and the subsequent search of the rest of the house on different planes. Our reasons for doing so will soon become obvious.
The lawfulness of defendant’s arrest must be measured by the standards prescribed in section 46-6-401, MCA. State v. Hull (1971), 158 Mont. 6, 487 P.2d 1314, 1319. This section provides in part:
“A peace officer may arrest a person when:
“(4) he believes on reasonable grounds that the person is committing an offense or that the person has committed an offense and the existing circumstances require his immediate arrest.”
Section 46-6-106, MCA, provides:
“Manner of arrest without warrant. A peace officer or person making an arrest without a warrant must inform the person to be arrested of his authority, if any, of the intention to arrest him, and the cause of the arrest, except when the person to be arrested is actually engaged in the commission of or in an attempt to commit an offense or is pursued immediately after its commission or after an escape or when the giving of such information will imperil the arrest.”
This Court has on previous occasions and under similar factual situations had cause to decide the issues presented here. In State v. Hull, supra, we determined defendant’s arrest was based on reasonable grounds where, prior to their entry, arresting officers had received information from an informer that a “pot party” was in progress. When the officers arrived at the scene it was obvious from the music and noise that a party was in progress. They also smelled the aroma of burning or burnt marijuana emanating from the residence. After being told by the informer, who had just left the party, that there was hashish being smoked in the house, the officers entered the residence and arrested several persons, including defendant. A search of defendant yielded an amphetamine tablet. This Court held the entry into the residence without a warrant for purposes of effecting the arrest and searching defendant incident to that arrest was constitutionally and statutorily permissible, because there was sufficient probable cause to do so. Hull, 487 P.2d at 1320.
In State v. Bennett(1972), 158 Mont. 496, 493 P.2d 1077, police officers received information indicating drug activity was taking place at defendant’s apartment. They were also informed that one of the defendants was a drug dealer. Additionally, the landlady informed one of the officers that drugs possibly were being used in defendant’s apartment. Based on the landlady’s complaint and information received, the officers went to defendant’s apartment to investigate. When they arrived, they observed one of the defendants, a suspected drug dealer, enter the apartment. Upon approaching the apartment they noticed the odor of burning marijuana coming from the open door of the apartment. The officers entered the apartment, walked up a short stairway and observed the three defendants sitting around a table on which there was a marijuana roach and a clear plastic bag containing what they believed to be marijuana. The defendants were immediatley arrested and the marijuana seized. Even though the entry and search were conducted without a warrant, this Court held the entry into the apartment to arrest and the search incident thereto constitutionally permissible. State v. Bennett, 493 P.2d at 1082.
In our discussion in Bennett, we concluded that the facts therein came within the exigent circumstances exceptions to the warrant requirement of the Fourth Amendment and Johnson v. United States (1948), 333 U.S. 10, 68 S.Ct. 367, 92 L.Ed. 436. We also indicated that, while there is no “knock and announce” rule in Montana, where an officer is attempting to make an arrest without a warrant, he has the duty to inform the person to be arrested of his authority in so acting and the cause for so acting unless the arrested party is taken in the actual commission of the offense or has escaped and is immediately pursued. 493 P.2d at 1081.
Both Hull and Bennett were recently ratified by this Court in State v. Means (1978), 177 Mont. 193, 581 P.2d 406.
While we would be remiss if we did not voice our concern here that arrest and search warrants should be used as the rule and not the exception, sufficient exigent circumstances existed here, especially due to the involvement of juveniles, to justify the warrantless entry and arrest. Therefore, under this Court’s holding in Hull and Bennett, and based on the above facts, we find the District Court properly concluded that the officers had sufficient probable cause to make the warrantless entry and arrest.
The seizure of the marijuana on the table was also proper under either a “plain view” theory or a seizure incident to a lawful arrest theory. Coolidge v. New Hampshire (1971), 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564; State v. Hull, supra; State v. Bennett, supra; section 46-5-102(3) and (4), MCA.
While the officers’ initial entry into the apartment and the subsequent arrest and seizure of the marijuana on the table was valid, the so-called “consent” search of the rest of the apartment was unlawful. There is no doubt that the officers did not have authority to search the entire house. Section 46-5-102, MCA; Chimel v. California (1969), 395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685. The inital break in the officers’ lawful conduct came when they secured Ms. Smith’s “consent” to search the house by fraudulently telling her that if she failed to consent they could gain consent to search the apartment from the landlord.
When a law enforcement officer claims authority to search a home under a warrant, Bumper v. North Carolina (1968), 391 U.S. 543, 88 S.Ct. 1788, 20 L.Ed.2d 797, or threatens to obtain a search warrant, United States v. Boukater (5th Cir. 1969), 409 F.2d 537, or makes a flat assertion that he has come to search, Amos v. United States (1921), 255 U.S. 313, 41 S.Ct. 266, 65 L.Ed. 654, “. . . he announces in effect that the occupant has no right to resist the search. The situation is instinct with coercion — albeit colorably lawful coercion. Where there is coercion there cannot be consent.” Bumper v. North Carolina, 391 U.S. at 550, 88 S.Ct. at 1792.
The officers in the instant case informed Ms. Smith that if she did not consent to the search they could secure consent from her landlord. Ms. Smith’s consent was bsaed on this fraudulent show of authority, and, as such, the consent was coerced and therefore invalid.
One other factor makes Ms. Smith’s consent invalid. Section 41-5-303, MCA, of the Montana Youth Court Act, provides:
“When a youth is detained for investigation or questioning upon a matter which could result in a petition alleging that the youth being detained is either delinquent or in need of supervision, the following requirements must be met:
“(1) The youth shall be immediately and effectively advised of his constitutional rights and his rights under this chapter.
“(2) The youth may waive such rights under the following situations:
“(a) when the youth is under the age of 12 years, the parents of the youth may make an effective waiver;
“(b) when the youth is over the age of 12 years and the youth and his parents agree, they may make an effective waiver; and
“(c) when the youth is over the age of 12 years and the youth and his parents do not agree, the youth may make an effective waiver only with advice of counsel.”
The record reveals that the officers failed to read Ms. Smith or the other juveniles involved here their youth court act rights. Further, in order to effectively waive her constitutional or statutory rights the waiver must take place with the agreement of the youth and her parents or on advice of counsel. Ms. Smith’s parents were not informed nor was counsel obtained before the “waiver” of the rights and “consent” to search took place. There is no question that consent to search the premises required Ms. Smith to waive her Fourth Amendment right to be free of unreasonable searches under the United States Constitution. Schneckloth v. Bustamonte (1973), 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854. Ms. Smith lacked the capacity to give this consent, and her consent to search was therefore invalid.
The State contends that defendant waived his right to object to the search when he helped the officers find the contraband, citing State v. Peters (1965), 146 Mont. 188, 405 P.2d 642. The facts of the instant case and those in Peters are distinguishable. In Peters the defendant volunatrily consented to the investigation and inspection of the calves on his ranch; here, the record reveals the defendant vehemently protested the search and informed Ms. Smith that she did not have to consent. It was only after the officers indicated they were going to search anyway that defendant helped them. These actions do not constitute a waiver by defendant of his right to object to the search. As the marijuana and seeds seized during the subsequent search of the house were “fruits” of an unlawful search, the District Court should have suppressed them. Wong Sun v. United States (1963), 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441.
The District Court could properly conclude that probable cause and sufficient exigent circumstances existed to justify the warrantless entry, arrest, and seizure of the marijuana on the table. The subsequent “consent” search of the apartment, however, was unlawful, therefore the contraband seized in that “search” should have been suppressed.
The judgment of the District Court is affirmed insofar as the entry and initial search and seizure of the contraband on the coffee table. The remainder of the judgment is vacated and set aside. The cause is remanded to the District Court with instructions to dismiss with prejudice.
MR. JUSTICES SHEA and SHEEHY concur. | [
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MR. CHIEF JUSTICE HASWELL
delivered the opinion of the court.
This is an appeal from an award of attorney fees by a property owner who successfully defended against an attempted mechanic’s lien foreclosure.
Plaintiff Carkeek, the lienholder, sued defendant Ayer, the lienee, to foreclose a lien for $6,200 for labor and materials furnished in constructing two barns on the latter’s property. The lienee resisted the attempted foreclosure and counterclaimed for approximately $6,000 damages for defective workmanship, ruined hay and other expenses.
Following a bench trial, the District Court entered judgment for the lienee on the attempted foreclosure, awarded him $3,311.50 damages on his counterclaim and granted him attorney fees and costs to be determined at an appropriate hearing. Following this hearing in which the lienee sought attorney fees of $5,773.20, the District Judge awarded him $3,000 attorney fees and $605.92 costs. The District Judge filed this memorandum accompanying his order:
“This Court is convinced that the attorney, Michael C. Coil, is entitled to Fifty Dollars ($50.00) per hour for attorney’s fees; that he has spent a total of One Hundred Forty-four and thirty- three (144.33) hours in this cause, and his deduction of Ten Dollars ($10.00) per hour resulting in a fee of Forty Dollars ($40.00) per hour is most fair; that Five Thousand Seven Hundred Seventy-three and 20/100 Dollars ($5,773.20) is a reasonable fee; however, the defendant (sic) in this cause has been almost helpless in this litigation through the continued delays and at least two attorneys. His first attorney, Mr. Tom Sabo, was not prompt or professional in his preparation of the case nor in his representation of plaintiff; this delay and confusion was almost beyond belief. The plaintiff is now faced with loss of his law suit.
“To now insist on the payment of attorney’s fees of Five Thousand Seven Hundred Seventy-three and 20/100 Dollars ($5,773.20) and his own attorney’s fees would be most unreasonable.”
The lienee appeals from the award of only $3,000 attorney fees, contending that he is entitled to $5,773.20, the amount the District Court found to be a reasonable fee.
A party who successfully defends against a foreclosure action must be allowed a reasonable attorney fee in both the District Court and the Supreme Court. Section 71-3-124, MCA. In determining what constitutes a “reasonable fee” in a given case, we have set down the following guidelines:
“ ‘. . . The circumstances to be considered in determining the compensation to be recovered are the amount and character of the services rendered, the labor, time and trouble involved, the character and importance of the litigation in which the services were rendered, the amount of money or the value of property to be affected, the professional skill and experience called for, the character and standing in their profession of the attorneys . . . The result secured by the services of the attorneys may be considered as an important element in determining their value.’ ” First Security Bank v. Tholkes (1976), 169 Mont. 422, 429-30, 547 P.2d 1328, 1332.
Within these guidelines, the amount fixed as attorney fees is largely discretionary with the District Court. We will not disturb its judgement in the absence of an abuse of that discretion. We have previously stated the applicable principles in this language:
“This Court is well aware of its role when asked to look into matters of abuse of discretion of the trial court and we have noted the number of cases and other citations given us by the parties. We feel an approved composite position simply stated would be: a reviewing court is never justified in substituting its discretion for that of the trial court. In determining whether the trial court abused its discretion, the question is not whether the reviewing court agrees with the trial court, but rather did the trial court in the exercise of its discretion act arbitrarily without the employment of conscientious judgment or exceed the bounds of reason, in view of all the circumstances, ignoring recognized principles resulting in substantial injustice.” Porter v. Porter (1970), 155 Mont. 451, 457, 473 P.2d 538, 541.
We note that a reasonable attorney fee must be awarded for the successful defense of the foreclosure action by virtue of section 71-3-124, MCA. There is no statutory provision for an award of attorney fees in successfully prosecuting the counterclaim for damages. .Costs are recoverable on the counterclaim, sections 25-10-101(3), 25-10-102, and 25-10-201, MCA; but attorney fees are not recoverable costs in the absence of statute or contractual agreement of the parties. Winer v. Jonal Corp. (1976), 169 Mont. 247, 545 P.2d 1094, and cases therein cited.
Applying the foregoing principles to this case, we cannot say that the District Court abused its discretion in reducing the lienee’s claim for attorney fees from $5,773.20 to $3,000. A reasonable attorney fee in a given case does not necessarily result from simple multiplication of the hours spent times a fixed hourly rate. To award an attorneys fee of $5,773.20 in defending against a $6,200 claim would appear most unreasonable regardless of the time spent, the skill involved in the work, the experience of the attorney and similar considerations. The defense simply is not worth a fee approaching 100% of the amount of the lien.
We interpret the District Court’s memorandum as saying that while a fee of $5,773.20 is fair and reasonable, it would be unreasonable to assess this entire amount against the lienholder under the circumstances of this case. We agree. We find no abuse of discretion by the District Court.
Affirmed.
MR. JUSTICES DALY, HARRISON and SHEA concur. | [
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MR. CHIEF JUSTICE HASWELL
delivered the opinion of the Court.
Relator Hugh V. Anderson was found in contempt of court in the Cascade County District Court and fined $50.00. He now applies for a writ of certiorari or supervisory control to review the judgment of contempt.
Relator, a urological surgeon, while on “substitute duty” in the emergency room of Columbus Hospital in Great Falls, Montana, had treated one Robert L. Renville, who was at the time under arrest. Thereafter, relator was served with a subpoena to attend a trial regarding Renville. Subsequently, during a telephone conversation relator told a deputy county attorney that he had little independent recollection of the incident, but would be willing to testify to what recollection he had and the hospital records. The deputy county attorney said he would contact relator later. Sometime after that, relator received a message that the trial would not be held as scheduled.
On or about December 4, 1979, a deputy sheriff delivered a subpoena and a letter concerning Renville’s January 14, 1980, trial to relator’s secretary. In an affidavit the deputy sheriff stated that he believed the secretary to be more than 18 years of age. On about December 5, the secretary showed the subpoena and letter to the relator. The letter was from the deputy county attorney stating that relator would be contacted regarding his testimony “. . . at a time closer to the trial.”
The deputy county attorney was not able to contact relator despite three attempts. On January 14, 1980, trial was commenced in the case of State v. Robert Renville. When relator was called the bailiff informed the judge that the relator was not present. The judge ordered the prosecuting attorney to file an affidavit and have relator brought before the District Court.
On January 15, 1980, the District Court judge held the hearing on the contempt charge concerning relator. Following a hearing, the relator was found in contempt for not being present at the January 14 trial. He was fined $50.00.
This case presents three issues:
(1) Whether this Court may consider this matter on either a writ of certiorari or a writ of supervisory control?
(2) Whether the finding of contempt by the District Court was in excess of jurisdiction because the subpoena was improperly served?
(3) Whether there was substantial evidence to support the finding of contempt?
Section 3-1-523, MCA, provides that there is no appeal from a judgment and order of contempt, however, such actions may be reviewed on a writ of certiorari.
Section 27-25-202, MCA, states:
“The writ of review must command the party to whom it is directed to certify fully to the court issuing the writ, at a specified time and place, a transcript of the record and proceedings (describing or referring to them with convenient certainty), that the same may be reviewed by the court, and require the party, in the meantime, to desist from further proceedings in the matter to be reviewed.”
In the present case we do not have a fully certified transcript of the record and proceedings. Consequently, the writ of certiorari is not a proper remedy. Our inquiry into the case, however, does not stop at this point. Art. VII, § 2(2), 1972 Montana Constitution, provides that this Court has general supervisory control over all other courts. In previous cases we have said that this Court’s supervisory power may be granted in contempt cases when the relator is barred from using a writ of certiorari. See State ex rel. Porter v. District Court (1950), 123 Mont. 447, 215 P.2d 279; State ex rel. Sutton v. District Court (1902), 27 Mont. 128, 69 P. 988. In the present case we grant the writ of supervisory control.
The relator contends that the District Court lacked jurisdiction to find relator in contempt because the subpoena was not properly served. Section 46-15-102, MCA, provides that a subpoena “. . . may be served ... by any person who is not a party and who is not less than 18 years of age.” In addition, “Service of a sub poena shall be made by delivering a copy thereof to the person named . . .’’In the present case the subpoena was delivered by the deputy sheriff to the relator’s secretary. The relator admitted that the secretary showed him a copy of the subpoena and the letter from the deputy county attorney. There is no dispute that the secretary was over 18 years of age and was not a party to the action. This amounts to a fulfillment of the requirement set out in section 46-15-102, MCA. Additionally, the relator knew of the trial and was aware of the subpoena. During the contempt hearing the relator testified that he “. . . totally forgot about it.” This amounts to disobedience of a subpoena duly served and the District Court judge was well within his jurisdiction when he found the relator in contempt. Section 3-l-501(l)(j), MCA.
The relator next contends that the letter attached to the subpoena modified and qualified the effect of the subpoena. The letter accompanying the subpoena stated that a deputy county attorney would contact the relator “. . . at a time closer to trial.” The subpoena commanded relator to appear in court on January 14, 1980, at 9:30 a. m. The letter in no way modifies or qualifies the express command of the subpoena. The letter does not make the relator’s appearance in court contingent upon being contacted by the deputy county attorney.
Finally, relator contends that there is no evidence to support the finding that he was aware of the fact that he was to appear in court at the time set for trial. The relator admitted at the hearing that he had seen a copy of the subpoena and the letter from the deputy county attorney. Both of these state the time and place of the trial. This constitutes sufficient evidence to support the finding of contempt.
Affirmed.
MR. JUSTICES DALY, HARRISON, SHEA and SHEEHY, concur. | [
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MR. CHIEF JUSTICE HASWELL,
delivered the opinion of the Court.
Defendant Department of Highways appeals from an interlocutory decision of the Beaverhead County District Court, sitting without a jury, that plaintiffs were entitled to compensation for the loss of reasonable access to their property. We dismiss the appeal without prejudice on the grounds that a final judgment has not yet been entered in this case and the interlocutory order is not appealable.
Plaintiffs are the owners of a warehouse located on East Helena and Washington Streets in Dillon, Montana. The warehouse serves the plaintiffs’ own trucking needs and provides rental space for various transportation and moving lines. Trucking firms which use the warehouse unload their storage through a freight door facing East Helena Street. Approaching truckers either back their trucks to the freight door or parallel park on the sidewalk between East Helena Street and the door.
In 1979 defendant Department of Highways placed signal poles on the sidewalk and traffic island near the door. These poles prevent approaching trucks from parking parallel to the warehouse. Since the installation of these poles, virtually all of plaintiffs’ customers have sought storage space elsewhere.
On January 25, 1978, plaintiffs filed a complaint seeking damages of $100,000 for the Department of Highway’s denial of access to their warehouse. The Department filed an answer which admitted that the signal poles were erected on East Helena Street but denied that a taking of plaintiffs’ property had occurred.
At trial plaintiff Gerald Bostwick testified that the warehouse would be worth $100,000 if it could be used to rent storage space. He stated that he averaged $600 per month from rentals prior to 1965 and $1,000 per month between 1965 and 1970. Since 1977 all but one of plaintiffs’ customers have stopped using the warehouse and, according to plaintiffs, the value of the warehouse now is only $20,000.
Plaintiff Bostwick on cross-examination testified that he maintained a regular set of books which would support his testimony as to business loss. He did not, however, produce the books. Counsel for the Department moved the trial court to strike Bostwick’s testimony because the written records were the best evidence of business profits and losses. The trial court denied the motion.
The case was tried on the issue of whether plaintiffs were entitled to compensation, and if so, how much. Both parties submitted proposed findings of fact and conclusions of law at the end of the trial, and the trial court adopted verbatim the findings and conclusions submitted by plaintiffs. These findings and conclusions admitted that testimony concerning damages was general and somewhat speculative. They also contained a provision, however, that the trial court reserved the right to conduct a special hearing on damages, if after ninety days the parties were unable to reach agreement on this amount. The last paragraph of the findings and conclusions stated, “let judgment be entered accordingly.” The trial court later denied the Department’s motion to amend the findings and conclusions.
Judgment was never entered. The Department has appealed from the so-called findings and conclusions entered by the trial court. The essential issues raised by the Department are its contentions that plaintiffs failed to establish either a compensable taking or damages. In the absence of a final judgment, we will not reach either of these issues.
The trial court’s order determined compensability but reserved the question of damages for a later hearing. As such, the order was interlocutory and not appealable. See State ex rel. Great Falls Nat. Bank v. District Court (1969), 154 Mont. 336, 463 P.2d 326; Rule 1, M.R.App.Civ.P.
The appeal is dismissed without prejudice.
MR. JUSTICES DALY, HARRISON and SHEEHY concur. | [
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MR. JUSTICE SHEEHY
delivered the opinion of the Court.
Petitioners Charles Graveley and Richard Hammerbacker filed a petition with this Court seeking a writ of review of a judgment of contempt found against them in the District Court, First Judicial District, Lewis and Clark County, before presiding Judge Joseph B. Gary.
At first petitioners attempted to appeal the judgment of contempt of this Court. Upon discovering that a judgment of contempt was not appealable, State v. District Court (1919), 56 Mont. 578, 185 P. 1112, petitioners dismissed the appeal and filed this petition for review.
The facts, in the light most favorable to the decision of the District Court, are these:
Ricky Worden and Criss Allen Case were two of four defendants to be arraigned in Lewis and Clark County District Court in December 1978 in connection with a robbery that had occurred in a bar in Wolf Creek, Montana. The arraignment was to take place before District Judge Peter G. Meloy. David Hull, of Helena, had been appointed to represent Ricky Worden, and Jeffrey Sherlock, also of Helena, had been appointed to represent Criss Case.
On December 13, 1978, Ricky Worden and Criss Allen Case were brought to the Lewis and Clark County District Court courtroom for arraignment. They had previously been jailed in Malta, Montana.
The arraignment of Ricky Worden commenced sometime between 9:00 and 9:30 a.m. on December 13, 1978. At the time of the arraignment, Worden’s attorney filed his written notice of intent to rely on the defense of mental disease or defect. Upon the filing of that notice, Judge Meloy entered a verbal order that the sheriff of Lewis and Clark County transport the defendant to Warm Springs State Hospital for an evaluation examination.
The next defendant, Criss Allen Case, was also arraigned on the same charge, and his attorney, Jeffrey Sherlock filed a like notice of intent to rely on the defense of mental disease or defect. Again at. this arraignment, Judge Meloy entered a verbal order that the sheriff of Lewis and Clark County immediately trasnsport this defendant to Warm Springs State Hospital for an examination.
Charles Graveley was the county attorney acting for the state in connection with the arraignments, and Deputy Sheriff Richard Hammerbacker was the officer in charge of the two defendants at the time.
A written order for the transporting of Worden to Warm Springs was presented to Judge Meloy at the time of the Worden arraignment; however, he did not agree with the language of the proposed order and asked that it be redrafted.
Immediately following the arraignments, at approximately 9:30, Deputy Sheriff Hammerbacker took the defendants Worden and Case from the District Court Courtroom, across the street to the sheriff’s office, where they were “booked out”. They were then taken by Deputy Sheriff Hammerbacker to the Helena Airport, where an airplane was already warmed and gassed for the transportation of Worden and Case back to Malta. The airplane used was a four passenger craft. The pilot, Hammerbacker, and the two prisoners constituted the passenger complement on the flight.
In the meantime, two other defendants involved in the same charge were also arraigned, and similar notices of intent to rely on the defense of mental disease or defect were filed in those cases. They were represented by other attorneys. The court also orally ordered their examinations at Warm Springs. Immediately following their arraignments, they were taken to the sheriff’s office, booked out and placed in an automobile. Two members of the sheriff’s staff drove these two defendants to Big Sandy, Montana, where they met the airplane in which Deputy Hammerbacker was a passenger. There the two remaining defendants were transferred to the airplane and taken to Glasgow, Montana, where they were incarcerated. Deputy Hammerbacker then returned in the airplane to Helena, Montana, arriving there at about 6:00 p.m.
When attorneys Sherlock and Hull learned that their clients h.ad been transported out of Helena, in the morning of December 13, 1978, they immediately met with Judge Peter G. Meloy, who called in County Attorney Charles Graveley. There, certain conversations occurred to which we will advert later.
On December 28, 1978, both Sherlock and Hull filed affidavits in the criminal cause involving Worden, alleging that the County Attorney had purposely defied the court’s order and instead of transporting the defendants to Warm Springs for evaluation, had caused their transportation to Malta. Both Lewis and Clark District Court judges disqualified themselves in connection with the criminal contempt proceedings and Judge Gary was called in to preside.
Judge Gary met with the parties on January 15, 1979. It was then agreed that the criminal contempt proceedings would be dismissed and that the attorneys Sherlock and Hull would file petitions to find Graveley and Hammerbacker guilty of civil contempt. Such petitions were filed. The matter came on for hearing before Judge Gary on February 28, 1979. After hearing, and after having recieved briefs and proposed findings, Judge Gary on April 24, 1979 issued his order finding both County Attorney Graveley and Deputy Sheriff Hammerbacker guilty of civil contempt of court. The District Court ordered the parties could purge themselves of contempt by each paying a fine to the Clerk of the Court. This petition for writ of review ensued.
In the February 28, 1979 hearing before Judge Gary, County Attorney Charles Graveley was first called as a witness. His counsel requested the District Court to inform him that while this was a civil contempt, it had criminal implications and that Graveley could refuse to answer any questions upon the ground that it might incriminate him. The Court so advised him. Subsequently, Graveley refused to answer questions on the grounds that the answers might incriminate him as to whether he was in the courtroom at the arraignment of Ricky Worden and Criss Case and others; as to what he heard Judge Meloy say to the various people in the courtroom with respect to the defendants referred to; as to whether he had conversations with any other person about where the defendants were to be transported; as to whether he knew where the defendants were on the date of the hearing; as to whether he knew who took the various defendants from Lewis and Clark County to where they were at that time; as to whether he had been in Judge Meloy’s chambers after the arraignment was held; and as to whether Judge Meloy at that time asked him if he had ordered the defendants to be taken back to Glasgow, Malta, and Wolf Point.
The next witness called was Deputy Sheriff Hammerbacker. He took the same tack, refusing to testify as to any questions with respect to the four defendants, upon the grounds that his answers might incriminate him.
Attorney Hull was then called to the stand. He testified that he had been appointed to represent Ricky Worden. At the arraignment proceedings on December 13, 1978, he had filed a notice of intent to rely upon the defense of mental defect, or disease, and had prepared an order for the court to have his client placed in Warm Springs State Hospital. Hull testified that the judge ordered the defendants sent to Warm Springs State Hospital and asked Hull to rewrite the order to include a specific date. The oral order was made in open court on that day. At the time the oral order was made, Hull testified that the county attorney and Hammerbacker were both present. Hull testified that Graveley told the court that he wanted to send the prisoners back to Malta and the judge replied he had made the order and that these men were to be sent to Warm Springs. After the arraignment, Hull proceeded to the doorway of the courtroom where he met Hammerbacker. Hammerbacker told him, “I’m just informing you that your client is returning to Malta within the hour.” Hull said to him, “You heard, the judge ordered he was going to Warm Springs today." Hammerbacker replied, “I don’t care about that. I am merely informing you that your client is returning to Malta within the hour." Hull was also present in the courtroom during the arraignments of the other three defendants, and in each case, Hull testified the same verbal order was entered by the district judge to the effect that the men were to be sent to Warm Springs for evaluation.
On cross-examination, Hull testified positively that Hammer-backer was in the courtroom when the oral order was made, and the statements attributed to Hammerbacker were made in the doorway of the courtroom on the way out.
Attorney Sherlock also testified. He had been appointed to represent Criss Allen Case. On December 13, 1978, Sherlock testified that the four defendants were present in court and that Graveley was there throughout. Hammerbacker was in the courtroom off and on and other members of the Lewis and Clark County Sheriff’s Office were there, including one of the fulltime jailers. Sherlock testified to the oral order of Judge Meloy in each case that the defendants be transferred to Warm Springs for evaluation, the objections made by the county attorney and the overruling of those objections by the District Court, continuing in effect his order for the transport to Warm Springs.
Attorney Sherlock testified that later in Judge Meloy’s chambers, before noon but following the arraignments, he was present when Graveley had a discussion with Judge Meloy about the fact that the prisoners had already been taken to Malta instead of Warm Springs. He stated that Graveley had told the District Court on that day that it was at Graveley’s direction that the prisoners were taken to places outside Lewis and Clark County, and not to Warm Springs.
Attorney Larry Murphy, who represented one of the other two defendants involved, testified that he was also present in the court at the time of the arraignments and heard the oral orders of Judge Meloy. He was also present in Judge Meloy’s courtroom at the meeting before noon. He testified that Graveley stated emphatically that he had an agreement with the county attorney in Malta that the prisoners would be transported there immediately and that even though Judge Meloy ordered that the prisoners be transported to Warm Springs immediately, Graveley was going to have them transported to Malta.
Sheriff Charles M. O’Reilly, who took office December 15, and was not involved in the incidents of December 13, testified from the records of the sheriff’s office that defendant Worden was “booked out” of the sheriff’s office at 9:40 a.m. December 13, 1978; that defendant Case was “booked out” at 9:55 a.m. on that day; and that the sheriff’s office was served with a written order regarding Worden at 10:15 a.m. on December 13, 1978. He had no written orders for the other defendants until later.
After attorneys Hull and Sherlock had rested, the respondents Graveley and Hammerbacker put on their case. They called the weatherman. Max Baumgartner, who indicated that weather was closing in on December 13 and that it would have been impractical to fly a small airplane on the date; also that he had informed the pilot of the airplane of the adverse weather conditions and that if any flights were to be made they were to be made on December 13, 1978.
Deputy Sheriff Hammerbacker then took the stand. This time he did not refuse to answer under the Fifth Amendment of the United States Constitution. He testified that he understood that the defendants were to be transported back to Malta; that he had made the arrangements through the instructions of the county attorney in the week before the December 13 arraignments; and that he understood the defendants would have to be back in Malta no later than December 15, 1978. Hammerbacker testified that he was not in the courtroom when Judge Meloy issued his orders respecting the defendants. He stated that he had gone over to the sheriff’s office at the request of the county attorney to research the “rap sheet” on defendant Worden. He said he was first made aware of the alleged oral order by Hull in the doorway of the courtroom. At first he testified that they had not returned to the courtroom before he met Hull. Later in his cross-examination, he stated that he had in fact come into the courtroom and talked to County Attorney Graveley before coming out again to the doorway where he met Hull. He stated that he does not take the word of defense counsel because he has been lied to so often by defense counsel. He further described how the prisoners were taken from Lewis and Clark County and transported to their various destinations.
After the pilot of the airplane testified substantially to what we have stated foregoing, Graveley took the stand. This time he did not refuse to answer under the Fifth Amendment. He testified that arrangements had been made before the defendants had been brought to Lewis and Clark County, that they would be immediately returned to Malta. That he had made these arrangements for the four defense counsel in Malta and with the county attorney there. He stated the arrangement was that they would all be returned before December 15, 1978. (It should be stated that all four defendants were under homicide charges pending in the District Court of Phillips County.)
He testified that the first two defendants were arraigned by 9:25 a.m. on the morning of December 13; that he had asked Hammer-backer to check on the rap sheet of Ricky Worden; and that he had no other conversation with Hammerbacker. He knew that the plans had been arranged for flying the defendants out of Lewis and Clark County. He had been advised that the sheriff’s office would fly the defendants from Helena as soon as possible. On his direct examination, Graveley testified he never told the sheriff’s officers that under Judge Meloy’s order, they were not supposed to transport the prisoners. He felt that any notice to the sheriff was the defendant’s obligation or the defendant’s attorney’s obligation to serve the sheriff’s office.
On cross-examination County Attorney Graveley testified that he had no court order to return the defendants to Malta or Glasgow. He further testified that it was not his obligation to enforce any orders obtained by defense counsel. He testified that he made no attempt to inform the sheriff’s office of the oral orders of Judge Meloy.
When Graveley was asked whether he had any conversation with the sheriff’s office after the arraignment concerning the transport of the defendants to Malta, in spite of the courts orders, Graveley answered he could not recall. He was then faced with a transcript from an earlier hearing in which he was asked the following questions:
“Q” And then Judge Meloy asked you, ‘Did you direct them to take them despite the order made by this court’?
“And your answer was, ‘We had some conversation about it. Yes. I fail to see how an oral order can be directed. .’
“Does that refresh your recollection for you as to the fact that you directed them after the order was made to transport the prisoners out of the county. A. Yes.
“Q. Did you make it a formal explanation why to Judge Meloy? Why did you direct them to take them despite the order made by that court. A. I did not direct them to take anybody out of the county after the order was made by that court.
“Q. You answered yes. A. I’m answering I did not direct anybody to take them out of the county.
“Q. Do you want to change the answer you made? A. No I don’t.”
So much for the record. In this cause, Attorneys Hull and Sherlock have moved this Court to dismiss the petition for writ of review on the ground that such a writ may not issue where the District Court has not acted in excess of its jurisdiction. It is true that a writ of review or certiorari may be granted only when a trial court has exceeded its jurisdiction. State v. District Court of Second Judicial District (1900), 24 Mont. 494, 62 P. 820. However, we will follow the procedure of State v. District Court (1929), 85 Mont. 215, 278 P. 122 and treat the petition here as one for an alternative writ, in this case one for supervisory control. On that basis, we do not dismiss these proceedings on the ground that a writ of review is improvidently sought by the petitioners.
On the other hand, petitioners Graveley and Hammer-backer seek to have the judgment of the District Court vacated on the ground that their contempt is not proven beyond a reasonable doubt. However, substantial evidence is all that is required to support a judgment for contempt. In Re Burns (1928), 83 Mont. 200, 208, 271 P. 439. It is the rule that on review of contempt proceedings, the Supreme Court determines only whether the District Court acted within jurisdiction, and whether or not the evidence supports the finding and order. State v. District Court of Twelfth Judicial Dist. (1968), 151 Mont. 41, 43, 438 P.2d 563; State v. Second Judicial Dist. Court (1935), 99 Mont. 209, 41 P.2d 1113.
Petitioners also contend that the contempt proceedings should be dismissed because this is a case of criminal contempt, and the procedures for instituting a civil contempt case were not followed.
Section 3-1-501, MCA defines what acts or omissions are con- tempts. Section 45-7-309, MCA, defines what offenses constitute criminal contempt. In general, the definitions include the same kinds of acts or omissions which tend to interrupt the orderly flow of trials or proceedings before courts or to abuse their authority. The punishment for a contempt under section 3-1-501, must not exceed five days in jail, or a fine of $500 or both. The punishment for criminal contempt is not to exceed a six month sentence or $500 or both.
Section 3-1-511, MCA, provides for the procedure to be followed when contempt is committed in the presence of the court. In that situation, the contempt may be punished summarily but an order must be made by the court reciting the facts which occurred. Section 3-1-512, MCA, sets out the procedures to be followed when a contempt is made outside the presence of the court. This section calls for the submission of affidavits of the facts constituting contempt, after which a warrant is to be issued. In this case, instead of arresting Graveley and Hammerbacker by warrant of attachment, the District Court issued an order to show cause.
The United States District Court of Montana in 1957 held that contempts are neither wholly civil nor altogether criminal. See United States v. Montgomery (D.Mont. 1957), 155 F.Supp. 633.
It appears in this case that the petitioners were charged with an indirect or constructive contempt. That is, the contempt occurred outside the presence of the court. In a constructive contempt, the essence of whether the party accused had knowledge of the order. Hand v. Hand (1957), 131 Mont. 571, 312 P.2d 990.
We do not find a jurisdictional defect in the contempt proceedings against the petitioners because an order to show cause was issued instead of a warrant. The court took judicial notice of the affidavits that had been filed in the criminal contempt charges against the petitioners, and the jurisdiction of the District Court to hear the matter was affirmed when the petitioners appeared in response to the order to show cause.
The question of the knowledge of the petitioners of the District Court’s oral order was one for determination in the con tempt proceedings before the District Court. It is certain that County Attorney Graveley had knowledge of the order because he was in court when the order was made. The testimony of Hull and Sherlock, which the District Court apparently accepted, also reflected that Hammerbacker was in fact present when the order was made. Substantial evidence supports the findings and order of the District Court. State v. District Court of twelfth fudicial Dist., supra. The motion of Graveley and Hammerbacker in the District Court to dismiss the contempt proceedings is the same as contending that the evidence is insufficient to sustain the findings of the court. As we have already stated there is substantial evidence supporting the judgment.
The petitioners also claim that the court erred in refusing an offer of proof respecting deceptions by other attorneys involving Deputy Sheriff Hammerbacker. The District Court refused to hear such evidence unless it involved the attorneys in this case, which was not the situation. The court did not commit error in refusing that offer of proof.
The court also refused evidence of statements made to Hammerbacker by pilot Donald Thelan. Thelan testified fully as to the weather situation and the necessity of making both flights on December 13, 1978. The proffered evidence had no probative value as to whether both Graveley and Hammerbacker were acting in spite of the court’s oral order and so was properly refused by the court as irrelevant.
In the civil contempt proceedings, the type, character and extent of punishment rests on the trial court’s discretion as measured by the showing made. United States v. Montgomery, supra. In light of the findings made by the court and the evidence supporting them in this case, the District Court was justified in assessing a sum of $200 against each of the petitioners in order to purge the contempts.
The petition for writ is denied in any form. These proceedings are dismissed.
MR. CHIEF JUSTICE HASWELL, and JUSTICES HARRISON, SHEA and DALY, concur. | [
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MR. JUSTICE SHEEHY
delivered the opinion of the court.
Appeal is by the plaintiff from a judgment entered in the District Court, Nineteenth Judicial District, Lincoln County. For the reasons hereafter stated we reverse and remand for a new trial.
On March 24, 1976 at about 9:00 p.m., a Burlington Northern freight train and a jeep pickup driven by David Runkle collided at the Third Street crossing in Troy, Montana. Third Street is an asphalt roadway running generally in a north-south direction which crosses the Burlington Northern tracks running in an east- west direction. Runkle was driving south to north and the train was proceeding west to east.
The Third Street crossing bisects the town of Troy and is the only way for vehicular traffic to proceed from one side of the town to the other.
At or about the time of the collision, it had been raining in Troy and the plaintiff contends that under the weather conditions the visibility was poor, and because of the placement of buildings, structures, and lights, the crossing was more than ordinarily dangerous. There is a dispute in the evidence as to whether Runkle stopped his vehicle before crossing the railroad tracks, the railroad crew testifying that he did not stop, but others testifying that the railroad crew had stated following the incident that Runkle did in fact stop his vehicle. The crossing was protected by a stop sign and crossbucks; there were no electric gates or warning signals placed there at the time. The train approached the crossing at a “track speed” of 40 miles per hour.
David E. Runkle died as a result of the collision. He is survived by his wife, Donna K. Runkle, and six minor children. Donna K. Runkle sued Burlington Northern and one of its employees for damages claimed to have arisen out of his death. The case was tried before a jury which returned answers in its verdict on special interrogatories. The jury found the defendant 31 % negligent, and the decedent 69% negligent. The court entered judgment in favor of the defendants and this appeal followed.
We reverse this case principally on the grounds of instructional error and error in refusing certain evidence. In support of the District Court, we point out it was presented with over 150 instructions in this cause, counting amendments; the correlative rights and duties of railroads and automobile drivers passing over railroad crossings has not been clearly enunciated in our statutes or in prior decisions of this Court; and the admissibility of post-accident remedial actions under the new Montana Rules of Evidence has only lately been defined by this Court.
We will expand the recital of facts when necessary to explain the issues.
On the admission of evidence:
Of the 19 issues raised by plaintiff on appeal, 9 relate to refusal of testimonial or documentary evidence. The court excluded evidence of prior accidents at the same crossing. Appellants sought to introduce such evidence to show that the railroad had notice and knowledge of the hazardous condition of the crossing. Evidence of prior accidents, while inadmissible for the purpose of proving negligence, is nevertheless admissible for the purpose of showing the existence of a danger or defect and notice thereof. Robinson v. F. W. Woolworth, Co. (1927), 80 Mont. 431, 261 P.253; O’Flynn v. City of Butte (1908), 36 Mont. 493, 93 P. 643. Such evidence of prior accidents, however, must show situations substantially similar to or not too remote from the accident in question, although absolute identity of circumstances is not necessary. 70 A.L.R.2d 167, 201.
“One of the principal qualifications of the rule rendering evidence of prior similar accidents admissible for certain purposes is that it must appear, or at least the preliminary proof must tend to show, that the former accidents happened under circumstances substantially the same or similar to those existing at the time of the injury for which suit is brought, and that the instrument or agency which caused the injury was in substantially the same condition at the time such other accidents occurred as it was at the time of the accident in question.” 29 Am. Jur.2d Evidence, § 305, at 351.
The difficulty here is that from our review of the record, we do not find an offer of proof as to what the prior accidents would have shown. We are unable to determine the question of their admissibility. If the accidents were indeed not similar, the trial court was well within its discretion to exclude such evidence. When the reviewing court cannot ascertain the evidence which is excluded by the granting of a motion in limine, the law is clear there is no reversible error. Hermann v. Merrill Lynch, etc. (1977), 17 Wash.App. 626, 564 P.2d 817.
Likewise, appellants sought to prove the existence of automatic warning signals on other crossings on the railroad in northwestern Montana. This evidence was offered so that appellants could show, by the introduction of such evidence, that crossings which were less dangerous and with less vehicular traffic count were nevertheless equipped with automatic warning devices, while the Troy crossing was not so equipped. The trial court excluded this evidence on the basis of relevance. Here again the discretion of the District Court controls. In Jensen v. Southern Pacific Company (1954), 129 Cal.App.2d 67, 276 P.2d 703, 708, similar evidence was refused in the District Court and the appellate court upheld, stating that the “[Determination of relevancy, including similarity of conditions in such a case, is primarily the function of the trial judge.”
However, the District Court denied all evidence of automatic signals that were installed at the Troy crossing after this accident. Appellant sought to introduce such evidence for several purposes, one of which was to impeach witnesses for Burlington Northern who had testified that the crossing was not extra-hazardous.
With respect to subsequent remedial measures, Rule 407, Mont.R.Evid. provides:
“When, after an event, measures are taken which, if taken previously, would have made the event less likely to occur, evidence of the subsequent measures is not admissible to prove negligence or culpable conduct in connection with the event. This rule does not require the exclusion of evidence of subsequent measures when offered for another purpose, such as proving ownership, control, or feasibility of precautionary measures, if controverted, or impeachment.”
In two recent cases, this Court has held that evidence of subsequent remedial measures offered for impeachment is admissible. Cech v. State of Montana (1979), 184 Mont. 522, 604 P.2d 97, 102; and Lawlor v. County of Flathead (1978), 177 Mont. 508, 582 P.2d 751. See also, State v. District Ct. of Fourteenth fud. Dist. (1977), 175 Mont. 63, 572 P.2d 201. In Cech, the installation of an additional portion of guardrail after an accident was admitted to counter the state’s testimony that a recovery area was preferable to the guardrail and that the absence of the guardrail conformed in every way with acceptable standards. In Lawlor, the repair of a chuckhole by the county two days after the accident was admitted to establish feasibility of repair and to impeach testimony given by a county road foreman.
In this case, experts testified for the railroad that the crossing was not extrahazardous. The fact that automatic signals were installed on the crossing after the accident would have been relevant for the purpose of impeachment as well as to show feasibility. It was prejudicial error to exclude this evidence.
A further issue with respect to the admission of evidence revolves around the refusal by the District Court of minutes of the town council of Troy and of letters between the town council and various railroad officials concerning the hazards of the crossing.
Appellants contend that these letters were evidence of the amount and kind of notice that the railroad had respecting the hazardous conditions of the crossing, the need for flashing signals, flagmen, or other safety devices, and were further important in connection with claimed punitive damages to show that the railroad wantonly placed its economic advantage ahead of safety considerations at the crossing.
The railroad, on the other hand, contends that the testimonial evidence otherwise admitted fully showed the jury that the citizens of the town of Troy were concerned about the hazardous condition, that the town council had passed a resolution relating to a speed limit to be imposed on the trains passing through Troy and that appellants’ contention that the railroad stopped the imposition of a town speed limit on trains by threatening to take the town to court is an unfair contention.
The District Court had granted a motion in limine to exclude the minutes of the town council as well as the letters because the town had not adopted an ordinance, as distinguished from a resolution, that would have the force and effect of law in imposing a speed limit on trains.
The record shows that as early as October 1974, the town council had received citizen requests relating to slowing the speed of the train through the town of Troy and the need for other safety devices. Correspondence ensued with the railroad about these matters. The town council passed a resolution, as distinguished from an ordinance, to impose a 25 mile per hour speed limit on the trains. In response, railroad officials met with the town council and offered objections to the speed limits, including the railroad’s need to be competitive. The appellant contends that the speed limit was never enforced, nor an ordinance adopted, because of the threat of the railroad to take the matter to court if necessary.
The documentary evidence was relevant to these issues. As such, “[a]ll relevant evidence is admissible . . .” Rule 402, Mont.R.Evid. The minutes of the town council which set forth its “regularly conducted and regularly recorded activities,” Rule 803(8), Mont.R.Evid., are admissible as public records and are excepted from the hearsay rule. Letters between the town council and the railroad, and intercorporate memoranda between railroad officials on the subject matter of the crossing were likewise admissible and relevant to show notice of the claimed hazardous conditions, and the intent of the railroad with respect to the same. Of course, letters from the town council or town officials to persons other than railroad personnel (for example, to senators or other elected public officials) would not be admissible unless the railroad personnel participated in the correspondence. The intercorporate memoranda are relevant as possible admissions by a party opponent within the meaning of Rule 801(d)(2), Mont.R.Evid., and the letters are within the business records exception to the hearsay rule, Rule 803(6), Mont.R.Evid.
The fact that an ordinance was not passed, which would have a binding effect on the railroad, does not prevent the admission of documentary evidence which would establish the resolution of the town council, and how that brought to the notice of the railroad officials the claimed hazardous conditions. These documents go to the issue of ordinary care to be exercised by the railroad and may indeed go to the issue of punitive damages, as an indication of wantonness or oppressiveness.
Whether the railroad had notice of the hazardous condition to the extent that in the exercise of ordinary care it should have moved to reduce or eliminate the hazards, and whether it acted wantonly or oppressively in not so moving, were fact issues which existed independently of the minutes and the council letters. Accordingly, we are not called upon to apply the best evidence rule (See 29 Am.Jur.2d Evidence § 449, at 510.) Nonetheless, the documentary evidence here was superior to the testimonial evidence, particularly of those witnesses who would admit only that there was “some concern” or “some discussion” as to the hazardous conditions being brought to the railroad’s attention, and the need for a slowdown of the train or additional warning devices.
Duty of a railroad regarding grade crossings:
Before we proceed to the next issues, it is necessary to provide some additional details from the record.
As may be gleaned from the foregoing discussion respecting the town minutes and the intercorporate memoranda, ongoing issues during the trial of this cause related to the duty of the railroad to recognize the Third Street crossing as one requiring more than a crossbuck warning sign; its duty in regard to the speed of the trains through the crossing, and particularly its duty in the light of the provisions of the Federal-Aid Highway Act of 1973, Pub.L.No. 93-87, 87 Stat. 250; and section 61-8-203, MCA.
Throughout the trial, it was the position of the railroad, that “as a part of United States law” under the Federal-Aid Highway Act of 1973, railroad grade crossing signals are for the benefit of the public and the railroad was not to bear the cost of the installation of such signals. Yet the Federal-Aid Highway Act of 1973, Pub.L.No. 93-87, has no language in it that specifically states that a railroad does not benefit from a grade crossing installation. That Act is an increment to 23 U.S.C. 130, a section which does in fact provide for a determination to be made as to the net benefit to a railroad in connection with railroad crossings. However, the 1973 Act was adopted by Congress for the purpose of entering upon a three year program for the betterment and upgrading of railway grade crossings to improve safety. Monies were supplied to that program, one-third of which were to be used in “off-system crossings” (an off-system crossing was one such as Third Street which was not a part of the federal highway aid system). A subsequent manual published by the federal government indicated that no cost for grade crossing installations was to be recovered from the railroad under the 1973 Act. The impression left in this case by the questioning of the railroad on the effect of the Act required the court to give as an instruction the statement that the Act did not abolish any responsibilities on the part of the railroad concerning its duties to the public at a railroad crossing.
The railroad further contended, however, that under sections 61-8-203, 61-8-706(1), and 61-8-712, MCA, installation of crossing signals by the railroad, as a “private corporation,” was a misdemeanor and could be declared a public nuisance. That contention arose in this way: Under section 61-8-202, MCA, the State Highway Department was required to adopt a manual and specifications for a uniform system of traffic control devices throughout the state. The manual was prepared by the Department, and it is referred to as the Manual for Uniform Traffic Control Devices (MUTCD). Both sides were contending, erroneously as we shall show, that the manual bespoke the state law on the subject of traffic control devices. The railroad contended on its part that the manual was “the law of the state of Montana” and the guides therein set forth the only legal requirements facing a railroad in this situation. Thus when Douglas Morgan, an employee of the State Highway Department, was under cross-examination, he stated that the responsibility for the installation of traffic signals on railroad crossings rested on local jurisdictions and that local jurisdiction could act only after engineering studies had been carried out. Morgan testified that if the railroad wanted to volunteer to install such traffic control signals, the state government (the Highway Department) would allow it, but that there was no “responsibility or no right placed on the railroad to do it, absent the responsibility of the State of Montana.”
For example:
“Q. And now could the railroad do anything more than merely assist the town of Troy in obtaining any federal funds that may have become available? A. In my mind they could.
“Q. Well did they have the legal obligation under the MUTCD to do anything more than that?
“MR. HOYT: Objection. This is asking this witness for a legal conclusion. That the MUTCD speaks for itself.
“THE COURT: Overruled.
“THE WITNESS: Repeat the question please.
“Q. Do they have a legal obligation pursuant to the MUTCD to do anything more than assist? A. I don’t believe so. Not under the MUTCD.
“Q. That is the State law of Montana? A. That has been adopted.”
And again later in his cross-examination:
“Q. You have previously testified, have you not, that the responsibility to put signals in rests with either the local authority or with the Montana State Highway Department?
“MR. HOYT: Objection, exceeding the scope of redirect examination.
“THE COURT: It is repetitious. Sustained.
“Q. Mr. Morgan — and you felt this was a crossing — well — if you made the determination that this crossing is a hazardous one and needs signalization, then I would take it you would agree that it would be the state’s responsibility to replace signal.
“MR. HOYT: Same objection.
“THE COURT: Overruled.
“WITNESS: It would be the responsibility of the State to attempt to work with the railroad to get signals installed there, right.”
Thus the jury was given the impression that it was partly the duty of the State of Montana or the town of Troy to make the Third Street crossing safer by installation of safety devices.
It also developed in the evidence that on July 22, 1975, employees of the State Highway Department met with representatives of the railroad and local authorities, and had then determined that the Third Street crossing was indeed hazardous, and that it required flashing signals and the installation of short-arm gates which would be actuated by any approaching train. The installation of these safety devices may have been awaiting the red tape procedure that inheres in any federal funding project when the fatal accident in this case occurred.
Section 69-14-602, MCA, makes it the duty of every railroad to construct and maintain “a good and safe crossing” outside of incorporated towns. No similar statute fixes such a duty on the railroad regarding grade crossings within incorporated towns, but most certainly a railroad has a common law duty in the exercise of ordinary care to operate its railroad and to provide such warning devices as reasonable and prudent persons in the same circumstances would operate or provide.
The Federal-Aid Highway Act of 1973 represents an effort by the federal government to improve the safety of grade crossings, and to provide funding for the same. That act does not lessen in any degree the duty, statutory or common law, of a railroad to maintain a good and safe crossing. The Manual on Uniform Traffic Control Devices (MUTCD), promulgated by the Montana Highway Department, may be considered as a standard or norm to be used for traffic control devices. It does not have the force and effect of law in determining the duties and responsibilities of a railroad with respect to the safety of grade crossings. Thus the fact that the Montana Highway Department or the town of Troy had not officially acted to require the railroad to provide traffic control devices other than the crossbucks is not in itself sufficient to absolve the railroad of its common law duty, if it existed, to provide a good and safe crossing. In addition, it was a jury question whether, under the cir cumstances known to the railroad at and before this accident, the railroad itself should have reduced the speed of its trains over the Third Street crossing. This Court stated these principles in Jarvella v. Northern Pac. Ry. Co., (1935), 101 Mont. 102, 113, 53 P.2d 446, 450, when it said:
“It is noteworthy, in passing, that the mere fact that no statute exists, or that no order by an authorized person has been made requiring gates or other safety devices at crossings, will not ipso facto relieve the railway company from the duty of providing safety devices at crossings sufficiently dangerous to require them.”
We considered the status of the Manual on Uniform Traffic Control Devices in Williams v. Maley (1967), 150 Mont. 261, 267-69, 434 P.2d 398, 401-02. There this Court said that the manual did not have a status equal to statute. We also made reference to the fact that it was unlawful for anyone other than the State Highway Commission to erect signs on highways. However, neither that case, nor section 61-8-203, MCA, should be read to mean that a railroad in the exercise of ordinary care may not itself place warning devices and signs upon its own property or volunteer to place the same on state roadways upon notification to the State Highway Department. It would not thereby either commit a misdemeanor or create a public nuisance.
Thus it may not be enough for the railroad to protect its crossing with a standard crossbuck, to operate a train within a speed limit or to blow the whistle and ring the bell. The jury is still permitted to determine whether the railroad exercised reasonable care and caution under the circumstances and conditions existing at the time of the accident. Whether a railroad is negligent in a particular manner, such as in failing to provide automatic crossing gates, oscillating headlights, flasher lights, or in failing to reduce its speed is a question of fact for the jury. DeElena v. Southern Pac. Co. (1979), 121 Ariz. 563, 592 P.2d 759, 762; Seaboard Coast Line R. Co. v. Buchman (Fla.App. 1978), 358 So.2d 836, 839-40.
Further Testimonial Evidence:
We turn now to the contentions respecting three items of testimony to which objections were sustained by the District Court.
Dennis Welch was called. He had been a town councilman at Troy the year before this accident, and as a councilman made a motion at one of the council’s meetings to have the Burlington Northern reduce the speed of its trains to 25 miles per hour through town. Welch was also an employee of the Burlington Northern. The plaintiff offered to prove that while Welch was at work following that council meeting he was called on the telephone by an official of the Burlington Northern who stated, according to Welch:
“... I am not sure of his exact words. I do recall he told me ‘yes, I see here by your records or by the file that you worked with the railroad since June 4th, 1966 and you have worked for the railroad long enough to know better than to suggest reducing the speed of trains because of the fact that he went on to explain that I believe economic stability of it is costly and so forth.’
After the conversation with this official, Welch resigned from the town council because, “90% of the reason” was he felt a conflict of interest.
The District Court excluded this evidence. Plaintiffs had raised the issue of wantonness or oppressiveness as the basis for establishing punitive damages. Clearly, if the railroad in fact had utilized its position as employer to exert a form of duress upon its employee, acting in an official capacity, such evidence might have a bearing in the mind of the jury to demonstrate wantonness or oppressiveness sufficient to establish a basis for punitive damages. Section 27-1-221, MCA. This testimony was admissible on the question of the railroad’s negligence and on the issue of punitive damages.
Plaintiff also called Bert Winslow, the Troy city judge, who testified that he attended a council meeting in January and February of 1975 with other citizens of the town of Troy when Burlington Northern representatives were present including a man named Mr. Mitchell. Plaintiffs offered to prove that Winslow personally requested Mitchell to have the Burlington Northern slow its trains to 25 miles per hour; that Mitchell refused to do so and that his attitude “was very callous” and evidenced a total disregard for the welfare of the people of Troy. The court denied the offer of proof.
The District Court was correct in denying the offer of proof with respect to Winslow for two reasons: Winslow was not acting as an official of the town of Troy at the time he made the request, and Mitchell’s attitude may have been personal and not the attitude or reflection of the position of the railroad with respect to the crossing.
A third witness, whose testimony was denied, was Harry Wasserman, police chief of the town of Troy. If allowed to testify, he would have stated he crossed the Third Street crossing several times daily, that he had been in close proximity to hear any bell sounded on the numerous freight trains as they passed through the crossing during a day; that he had never heard a bell sounded by any freight train as it passed through the crossing. The evidence was offered under Rule 406(b), Mont.R. Evid., on the basis of custom and habit, but refused by the District Court.
We find the court to be correct in this ruling. So many variables enter into the proposed testimony of Wasserman that its probative value as to whether the bell was sounded on the night of the accident is to be doubted. The makes and types of freight engines, the different kinds of bells that might be installed in the various freight engines, the degree of attention with which the listener may have focused on the sounding of bells as the trains passed the intersection, the different engineers who would have been involved, all make it doubtful that such evidence of habit or custom would indeed reflect that the crew in this case did not sound the bell when their own positive testimony had indicated that they had performed that duty. See 59 A.L.R.2d 1379.
The foregoing relates to items of evidence and testimony that were refused by the District Court. Two other items ruled upon by the District Court are raised as issues and require discussion by us.
The plaintiff presented the testimony of Gerald R. Cysewski, as an expert witness on the subject of design at grade-railway highway crossings. Defense counsel cross-examined the ex pert through the use of a “Report 50” promulgated by the American Association of State Highway Officials. A caveat in the report indicated that the opinions and conclusions were those of the researcher and not necessarily those of the highway officials. Cysewski testified Report 50 was not authoritative because of errors and contradictions. A witness, Ken Cottingham, who appeared as an expert on defendants’ behalf, testified that the report was used extensively in his work and that he personally verified its accuracy.
Plaintiff objected to the use of Report 50 in cross-examination of Cysewski since it was not verified by him as accurate. Defendant contends that under Rule 803(18), Mont.R.Evid., such treatises are permissible for use in cross-examination of an expert, where a treatise is “established as a reliable authority by the testimony or admission of the witness or by other expert testimony or by judicial notice.” Under the rule, the reliability of the treatise, if not admitted by the person being cross-examined, may be established by the testimony of another expert, or by judicial notice. This being the case, no error occurred through the court permitting the use of Report 50 for cross-examination of Cysewski.
Plaintiffs called Martin Flom, a visual expert, and offered to prove through him that certain forms of lighting on trains were available to the railroad industry and to Burlington Northern in particular. In that connection, plaintiff endeavored to use through Flom, a treatise entitled, “The Visibility and Audibility of Trains Approaching Highway Grade Crossings”, dated May 1971, and promulgated by the Department of Transportation. Again a caveat appeared in this treatise that the contents of the report reflected the opinions of the researchers and that the report did not constitute a standard, specification or regulation. The intent of the plaintiff in the use of the treatise was to establish negligence on the part of the railroad by showing the kinds of lighting equipment available to railroads in the operation of their trains. However this was advisory material only and as such is inadmissible as we held in Hackley v. Waldorf-Hoerner Paper Products Co. (1967), 149 Mont. 286, 294-295, 425 P.2d 712, 716.
We do not by citing Hackley v. Waldorf-Hoerner Paper Products Co., supra, endorse all that is said in that case about codes or standards of safety issued by governmental agencies. Later decisions seem to be moving toward acceptance in evidence of such advisory material with certain qualifications. Such treatises may be admitted upon foundation that they (1) show what is feasible to the jury, or (2) show what the defendant knew or should have known about safety precautions. Charleston Nat. Bank v. International Harvester Co. (1974), 22 Ill.App.3d 999, 317 N.E.2d 585. Unless the codes or standards are adopted by a governmental agency so as to have the force of law, they are not to be admitted as conclusively determining the standard of care imposed upon the defendant, Charleston National Bank, supra, nor as substantive evidence of negligence, unless coupled with a showing of general acceptance in the industry concerned. See Lemery v. O'Shea Dennis, Inc. (1972), 112 N.H. 199, 291 A.2d 616. In this case the holding in Hackley v. Waldorf-Hoerner Paper Products Co., supra, applies to Flom’s treatise because the necessary preliminary proof is lacking.
We point out that we are not inconsistent in upholding the use of Report 50 and the denial of the Flom treatise. Report 50 was verified as accurate, was being used as authoritative by an expert witness, and was used at trial to test the knowledge of another expert witness in cross-examination. The preliminary proof for its use came within the general rule we have set forth above.
INSTRUCTIONAL ERROR
We find prejudicial error in the giving of the following instructions:
Instruction no. 24:
“. . . The court has taken judicial notice that the manual on Uniform Traffic Control Devices is the law in the State of Montana
Instruction no. 26:
“You are instructed that: section 1A-3 of the Manual on Uniform Traffic Control Devices provides: “The decision to use a particular device - at a particular location should be made on the basis of an engineering study of the location ...”
Instruction no. 29:
“You are instructed that: The laws of this State provide as follows:
“ ‘The Department of Highways and local authorities may designate particularly dangerous highway-grade crossings of railroads and erect stop signs at these crossings . . .’ ”
Instruction no. 35:
“. . . The responsibility for traffic control devices rests on a multitude of governmental jurisdictions.”
Instruction no. 36:
“. . . It is for you to determine whether the Third Street crossing in Troy, Montana on March 24, 1976, was a rural or an urban crossing.”
Instruction no. 37:
“. . . If you find from the evidence that a party to this action having a duty to comply with the Manual on Uniform Traffic Control Devices conducted himself in violation of the Manual on Uniform Traffic Control Devices, such conduct was negligent as a matter of law.”
Instruction no. 47:
In general, this instruction informed the jury that the members of the crew operating the railroad train had the right to assume the exercise of due care by the other party.
Instruction Nos. 24 and 26: The excerpts from the Manual on Uniform Traffic Control Devices (MUTCD) should not have been submitted to the jury in the form of instructions. They do not have the force of law, are merely advisory, and until the State Highway Commission acts with respect to them, they do not place a duty on any party. See Williams v. Maley, supra. Instead, the jury should have been instructed on the statutory duties of the railroad with respect to operating trains over its crossings, its common law duties with respect to safety in the exercise of ordinary care, and as a correlative matter, the duties of a motorist, both statutory and common law at a railroad crossing. Billings Leasing Co. v. Payne (1978), 176 Mont. 217, 577 P.2d 386. Instruction No. 24 was incorrect as a statement of law, and Instruction No. 26 was useless and confusing.
In the same say, Instruction No. 29 did not relate either to the duty of the railroad or to the motorist and should not have been given.
Instruction No. 36 was meaningless because the jury was not told what different legal results would depend on whether the crossing was rural or urban. Instruction No. 37, on the duty to comply with the Manual on Uniform Traffic Control Devices, was improper because no formal action was taken to impose a duty under that Manual upon the railroad.
Instruction No. 47, concerning the right of the railroad to assume the ordinary care of a motorist is not applicable unless the party having the right to assume is also exercising ordinary care. The right to assume due care of another springs from the rule that every person who is exercising ordinary care has a right to presume that every other person will perform his duty and obey the law. Tucker v. Lombardo (1956), 47 Cal. 2d 457, 303 P.2d 1041, 1047-1048.
THE PUNITIVE DAMAGES ISSUE
The court withdrew the issue of punitive or exemplary damages from the jury. Under the state of evidence in this case, the District Court was not in error, but such may not be the case in a retrial of this cause. We have already adverted to the minutes of the Troy town council, and the intercorporate memoranda, as well as the testimony of Dennis Welch which should have been admitted. The resulting record in a retrial may well present an issue of punitive damages for determination by the jury. Poeppel v. Fisher (1977), 178 Mont. 136, 572 P.2d 912.
If the evidence on retrial should show that the railroad had either a statutory or common law duty to ameliorate the alleged dangerous circumstance of the Third Street crossing, and failed to do so, it would, of course, be acting negligently. Jarvella v. Northern Pac. Ry. Co., supra. If in addition, the railroad took action on its own to avoid such amelioration, with knowledge of the danger, its conduct would be unjustifiable, which amounts to malice in law. Fauver v. Wilkoske (1949), 123 Mont. 228, 211 P.2d 420. In that situation, a jury may award punitive damages in addition to actual damages for sake of example and by way of punishing defendant. Section 27-1-221, MCA; Ferguson v. Town Pump, Inc. (1978), 177 Mont. 122, 580 P.2d 915.
AUDIBILITY OF THE WHISTLE AND BELL
Appellants contended throughout the trial that the whistle and bell were not sounded in advance of the collision, and that the bell was not audibly effective. The railroad employees testified that the whistle was blown from the whistle post one-quarter mile from the crossing, and the bell on the locomotive was rung.
We find no case discussing particularly whether the bell must be audible for the statutory distance. Section 69-14-562(7), MCA, requires a whistle to be blown and the bell to be rung within a distance from between 80 rods (1,320 feet) to 50 rods (825 feet) until the crossing has been reached.
It seems obvious that the legislative intent is that such signals be audibly effective to persons on foot or in vehicles approaching or crossing over the intersection with the railroad. We find the legislative purpose to be satisfied if either the whistle or the bell, both being sounded for the statutory distance, gives an audible warning to others using the grade crossing sufficiently effective that a collision with the train can be avoided in the exercise of reasonable care.
WHETHER THIS JURY SHOULD HAVE FIXED DAMAGES
Appellant contends the jury should have fixed the amount of damages, even though it found the appellant 69% negligent, and the railroad 31% negligent. No error occurred in this case, however. The jury simply followed the instructions given and the form of the special interrogatories. Appellant had approved the form of the special interrogatories.
For the foregoing reasons, the judgment is reversed and the cause remanded for a new trial.
MR. CHIEF JUSTICE HASWELL, JUSTICES DALY and HARRISON, and GORDON BENNETT,. District Judge, sitting for MR. JUSTICE SHEA, concur. | [
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] |
MR. CHIEF JUSTICE HASWELL,
delivered the opinion of the court.
This is an appeal by defendant from a judgment requiring plaintiff to surrender possession of a mare to defendant, requiring defendant to pay plaintiff $ 1,250, to execute transfer documents for a foal born to the mare, and for various other relief.
In 1978 plaintiff Carl D. Scott learned that defendant Floral Hjelm had registered quarter horses for sale. The parties had several telephone conversations concerning these horses and Scott went to the Hjelm residence and inspected several mares on a Saturday in November, 1978.
According to Scott, he advised Hjelm that he was not interested in the purchase of any horse other than a mare named Satin Beaver. Hjelm contends that a sale of five mares was negotiated for the sum of approximately $5,600. The negotiations were never reduced to writing.
On the following Monday Scott returned with a horse trailer and took the mare named Satin Beaver. Scott contends that he gave Hjelm a check for $ 1,000 for Satin Beaver which was the total purchase price. Hjelm contends that the $1,000 was merely a down-payment on the five mares and Scott was to pay the balance when he collected the remaining mares.
Hjelm did not give the registration papers and transfer documents for Satin Beaver to Scott at the time the check was written and has refused to do so thereafter.
A foal was born to Satin Beaver while the mare was in Scott’s possession.
On February 16, 1979, Scott filed a complaint against Hjelm in the justice court of Ravalli County seeking judgment for$l,108for Hjelm’s alleged failure to produce registration documents on Satin Beaver, plus $1.50 per day mare care.
Defendant answered and filed a counterclaim for $4,600 representing the balance of the purchase price. The case was transferred from justice court to District Court because the counterclaim exceeded the jurisdictional limit of the justice court.
On July 20, 1979, the case was tried before the District Court sitting without a jury. The District Court issued findings of fact, conclusions of law and judgment one week thereafter in which plaintiff was required to surrender possession of Satin Beaver to defendant, defendant was required to pay plaintiff $1,250 and surrender all documents necessary to transfer title of Satin Beaver’s foal to plaintiff, and at plaintiff’s option he could retain possession of the foal, return the foal with Satin Beaver until it is weaned and then retake possession of the foal not later than October 15, 1979, and that if plaintiff did not retake possession by that time, title to the foal would revert to the defendant.
Appellant presents the following issues:
1. Whether the facts of the case support the court’s conclusion that the parties were “merchants” within the meaning of Section 30-2-104, MCA?
2. Whether the facts of the case support the conclusion of law that the oral contract was unenforceable for lack of writing in confirmation of the oral contract?
3. Whether the division of the property constitutes a rescission of the contract to purchase?
4. Whether the judgment is supported by the facts as found by the trial court?
Appellant contends that the District Court erred in its conclusion that the parties were “merchants” in horses and that this was a transaction “between merchants” within the meaning of section 30-2-104, MCA.
The District Court also concluded that there was a lack of writing in confirmation of the oral contract as required by section 30-2-201(1) and (2), MCA, and, as a consequence, the oral contract for the sale of the five mares was unenforceable. Section 30-2-201, MCA, reads as follows:
“Formal requirements — statute of frauds.
(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.
“(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sendor is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within 10 days after it is received.
“(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable:
“(a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or
“(b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or
“(c) with respect to goods for which payment has been made and accepted or which have been received and accepted (30-2-606).”
Under this statute, whether the parties have been classified as merchants is not relevant unless there is a writing in confirmation of the contract. In the present case there was not writing. Thus, the District Court’s finding that the parties were merchants is irrelevant to our determination of this appeal.
The appellant next contends that the contract for the purchase and sale of the five horses is enforceable despite the lack of a writing. In support of this contention the appellant directs the Court to section 30-2-102, MCA, which outlines the scope of the statute of frauds section which is quoted above. Sections 30-2-102, MCA, provides:
“Scope — certain security and other transactions excluded from this chapter. Unless the context otherwise requires, this chapter applies to transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does this chapter impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.”
This statute does not support appellant’s contention that the transaction in question falls outside the scope of section 30-2-201, MCA. The transaction does not involve a security transaction. The appellant has not directed the Court to any statute which would prevent the statute of frauds section from applying to this transaction and research has not revealed any such statute. We determine that the transaction falls within the provisions of section 30-2-201, MCA.
The appellant next contends that the manner in which the property was divided did not constitute a rescission of the contract. In essence, appellant is contending that a rescission of a contract must result in the parties being placed in status quo, and that the parties in the present case were not placed in status quo because Carl Scott was allowed to keep the first foal.
Section 28-2-1716, MCA, states: “On adjudging the rescission of a contract, the court may require the party to whom such relief is granted to make any compensation or restoration to the other which justice may require.”
The Court has had occasion to consider this statute in O ’Keefe v. Routledge (1940), 110 Mont. 138, 103 P.2d 307, and made the following observation:
“In this connection the question suggests itself as to what is the object of the requirement of restoration. Theoretically, it is to place the parties in statu quo. In this aspect, ‘statu quo means to place such party in the same position as he was situated in at the time of the execution of the contract, but absolute and literal restoration of the parties to their former position is not required, and such restoration as is reasonably possible and demanded by the equities of the case is sufficient.’ (17 C.J.S. Contracts, § 438, p. 920.) “The rule ... is founded obviously on the principle that he who seeks equity must do equity. Conversely, wherever under the circumstances of the particular case restitution by plaintiff is not essential to the complete administration of justice between the parties, it will not be required . . . The rule in regard to the matter is equitable, not technical.’ (9 C.J., § 95, p. 1209.) “ ‘An absolute and literal restoration of the parties to their former condition is not required; it is sufficient if such restoration be made as is reasonably possible and such as the merits of the case demand.’ ” (Black Motor Co. v. Green, 258 Ky. 72, 79 S.W.2d 409, 411)” 110 Mont. at 146-147, 103 P.2d at 310.
In the present case, complete rescission was not possible, because the circumstances had changed. The District Court was faced with the task of properly allocating two horses and an unborn foal, where there had only been one horse and an unborn foal at the time of transaction. In such circumstances, the trial judge must use his discretion in doing equity, and this Court will not reverse that decision short of a showing of abuse of that discretion. One foal was sired while the mare was in Hjelm’s possession and the other was sired while the mare was in Scott’s possession. On the basis of the facts presented in the record and the District Court’s findings, we cannot say that Hjelm is in a worse position now than prior to the transaction. She has Satin Beaver and an unborn foal. Under these circumstances, the trial court did not abuse its discretion.
Finally, the appellant contends that the judge is not supported by the facts as found by the trial court. This contention is based on the arguments put forward above, i.e., rescission was not proper and if proper, then restoration was not properly accomplished. As these two contentions have been answered above, they need not be addressed again.
Affirmed.
MR. JUSTICES DALY, HARRISON and SHEA, concur. | [
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JUSTICE RICE
delivered the Opinion of the Court.
¶1 Petitioner John Roger Davis (Davis) appeals the August 20,2002, order and memorandum of the Fourth Judicial District Court, Missoula County, wherein the court denied both of Davis’s petitions for postconviction relief. We affirm.
¶2 Davis presents the following issues on appeal:
¶3 1. Did the District Court err in dismissing Davis’s first petition for postconviction relief on grounds it was time-barred?
¶4 2. Did the District Court err in dismissing Davis’s second petition for postconviction relief on grounds of ineffective assistance of counsel?
FACTUAL AND PROCEDURAL BACKGROUND
¶5 On February 5, 2000, in Lolo, Montana, Davis, then one month away from his eighteenth birthday, and two older teenaged boys, Wayne Hartung and Brett Sharbono, were on their way from a party to pick up more orange juice. As they were stopped in Davis’s truck at a traffic light, one of three younger boys on foot walking across the street in front of Davis’s truck gave the older boys the finger. The older boys chased the younger boys down and an altercation ensued. Davis, Hartung and Sharbono forced the younger boys to sit on the ties of a railroad track “so like if they tried to run they’d be easier to grab.” Davis, Hartung, and Sharbono then stole what few possessions the younger boys had and proceeded to hit, punch, and knee them in the face until they bled and rolled down the railroad embankment. Hartung stated, “[w]e intimidated 'em pretty bad. Just to be tough, I guess.” Responding deputies took photographs of the boys’ faces which had split lips, broken noses, and extensive bruising.
¶6 On February 25, 2000, Davis was charged in District Court by Information with aggravated kidnapping, a felony, in violation of § 45-5-303, MCA, punishable by ten years in the Montana State Prison (MSP) and/or $50,000.00 fine. In a hearing on March 13,2000, counsel for the State argued that the case should remain in District Court; Davis’s counsel argued it should be transferred to Youth Court. The District Court found that, since Davis had turned eighteen on March 3,2000, and aggravated kidnapping was a serious offense if convicted, the case would remain in District Court and would not be transferred to Youth Court. Davis entered a plea of not guilty to the charge alleged in the Information.
¶7 On July 5, 2000, Davis made a motion to withdraw his plea of not guilty and, after extensive inquiry, the court and the State accepted Davis’s guilty plea to the charge of aggravated kidnapping.
¶8 The District Court pronounced oral judgment on Davis on November 13, 2000. After reviewing his Pre-Sentence Investigation Report (PSI), the District Court ordered that imposition of sentence be deferred for a period of three years, upon standard and special terms and conditions including, inter alia, neither using nor possessing alcohol, successfully completing an anger management program, and remaining law abiding in all respects. The November 13, 2000, oral judgment was reduced to writing and filed on January 12, 2001.
¶9 Approximately three months after entry of Davis’s deferred imposition of sentence, the State, on April 27, 2001, filed a petition to revoke Davis’s deferred sentence, followed by a supplemental petition to revoke on July 20, 2001. These petitions alleged Davis had violated several conditions of his deferred sentence, namely, drinking intoxicants, possessing alcoholic beverages, failing to complete anger management counseling, and, on June 4, 2001, pleading guilty in Mineral County to negligent endangerment in violation of § 45-5-208, MCA.
¶10 On July 31, 2001, Davis, accompanied by defense counsel, appeared in District Court and admitted to the allegations set forth in the petitions to revoke. At the same time, the District Court granted a motion by Davis to be screened for the Treasure State Correctional Training Program (boot camp). On September 20, 2001, the District Court issued an order revoking Davis’s deferred sentence and imposing a new sentence which committed Davis to the Department of Corrections for a term of five years for “suitable placement,” including an appropriate community-based program, facility, or a State correctional institution. The District Court further recommended placement in boot camp, after Davis served the amount of time required by MSP. The court stated Davis could petition for an early release upon successful completion of the boot camp. Davis attended boot camp for a time, but did not successfully complete the program because of a back injury he sustained in 1998. Thereafter, he was placed in the Crossroads Correctional Center in Shelby, Montana.
¶11 On May 28, 2002, Davis filed his first petition seeking postconviction relief from the oral judgment entered November 13, 2000. Then, on July 5, 2002, Davis filed his second petition seeking postconviction relief from the revocation judgment entered August 28, 2001. On August 20, 2002, in consolidated proceedings, the District Court denied both petitions for postconviction relief.
ISSUE 1
¶12 Did the District Court err in dismissing Davis’s first petition for postconviction relief on grounds it was time-barred?
STANDARD OF REVIEW
¶13 This Court reviews a district court’s denial of a petition for postconviction relief to determine whether the district court’s findings of fact are clearly erroneous and whether its conclusions of law are correct. State v. Root, 2003 MT 28, ¶ 7, 314 Mont. 186, ¶ 7, 64 P.3d 1035, ¶ 7. We will affirm a district court’s ruling, even if the court reached the correct result for the wrong reason. Raugust v. State, 2003 MT 367, ¶ 9, 319 Mont. 97, ¶ 9, 82 P.3d 890, ¶ 9.
DISCUSSION
¶14 Davis asserts the District Court erred in dismissing his first petition for postconviction relief on the basis it was time-barred. The statute of limitations for postconviction relief is set forth in § 46-21-102(1), MCA, as follows:
46-21-102. When petition may be filed. (1) Except as provided in subsection (2), a petition for the relief referred to in 46-21-101 may be filed at anytime within 1 year of the date that the conviction becomes final. A conviction becomes final for purposes of this chapter when:
(a) the time for appeal to the Montana supreme court expires;
(b) if an appeal is taken to the Montana supreme court, the time for petitioning the United States supreme court for review expires; or
(c) if review is sought in the United States supreme court, on the date that that court issues its final order in the case.
This Court has previously explained the correct procedure for applying § 46-21-102(1), MCA, to the question of whether a petition for postconviction relief is timely filed. Root, ¶ 9; State v. Abe, 2001 MT 260, ¶ 7, 307 Mont. 233, ¶ 7, 37 P.3d 77, ¶ 7. First, under subpart (l)(a), pursuant to Rule 5, M.R.App.P., in criminal cases, an appeal from a judgment must be taken within sixty days after entry of judgment appealed from. Then, under subpart (l)(b), pursuant to the Rules of the United States Supreme Court, a petitioner has 90 days from the entry of the decision in his appeal to the Montana Supreme Court in which to petition for writ of certiorari in the United States Supreme Court. See Rule 13, Rules of the Supreme Court of the United States; Abe, ¶ 7. Then, under subpart (l)(c), convictions are deemed final when the time expires for petitioning the United States Supreme Court. Finally, under subsection (1), the petitioner has a one-year limitation period thereafter to file the petition.
¶15 In the instant case, the judgment was filed on January 12, 2001. Davis did not appeal that judgment to the Montana Supreme Court. Therefore, under § 46-21-102(l)(a), MCA, the conviction became final sixty days after January 12, 2001, or March 13, 2001. Davis then had one year from March 13, 2001, to March 13, 2002, to file his petition for postconviction relief. Davis filed his petition on May 28, 2002, which was seventy-six days beyond the deadline. Although the District Court erred by calculating the one-year limitation period from January 13, 2001, to January 13, 2002, it nonetheless reached the correct conclusion. Because Davis’s petition was filed after March 13, 2002, it was untimely.
¶16 It must be noted that Davis’s assertion that his deferred sentence does not constitute a conviction, and therefore, the time bar in § 46-21-102, MCA, does not apply, is without merit. The District Court properly rejected this assertion, stating that under this Court’s decision in State v. Rice (1996), 275 Mont. 81, 84, 910 P.2d 245, 246, a “sentence” is a judicial disposition of a criminal proceeding by plea, verdict, or finding of guilty. See § 46-1-202(24), MCA. Thus, a deferred imposition of sentence, as in Davis’s case, is final for purposes of appeal and postconviction relief.
¶17 Davis also asserts that the District Court lacked subject matter jurisdiction over his original criminal proceeding. The issue of a court’s subject matter jurisdiction may be presented at any time and is never waived or consented to where there is no basis for the court to exercise jurisdiction. See State v. Boucher, 2002 MT 114, ¶ 12, 309 Mont. 514, ¶ 12, 48 P.3d 21, ¶ 12. Davis alleges that the District Court lacked subject matter jurisdiction because the case was not properly transferred from Youth Court to District Court under § 41-5-206 and § 41-5-208, MCA. A review of the record, however, reveals that the filing of the Information in District Court was proper.
¶18 The county attorney properly filed the Information in District Court pursuant to § 41-5-206(2), MCA, which provides: “The county attorney shall file with the district court a petition for leave to file an information in the district court if the youth was 17 years of age at the time the youth committed an offense listed under subsection (l).” And, § 41-5-206(4), MCA, further states, “[t]he filing of an information in district court terminates the jurisdiction of the youth court over the youth with respect to the acts alleged in the information.” Since Davis was seventeen years of age at the time of the offense, and since the act of filing the Information in District Court terminated the jurisdiction of Youth Court, no error was committed with respect to the District Court’s application of § 41-5-206 and § 41-5-208, MCA.
Issue 2
¶19 Did the District Court err in dismissing Davis’s second petition for postconviction relief on grounds of ineffective assistance of counsel?
STANDARD OF REVIEW
¶20 In considering ineffective assistance of counsel claims in postconviction proceedings, we apply the two-pronged test set forth by the United States Supreme Court in Strickland v. Washington (1984), 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674; Dawson v. State, 2000 MT 219, ¶ 20, 301 Mont. 135, ¶ 20, 10 P.3d 49, ¶ 20; State v. St. John, 2001 MT 1, ¶ 37, 304 Mont. 47, ¶ 37, 15 P.3d 970, ¶ 37 (overruled on other grounds). Under the first prong, the defendant bears the burden of showing that counsel’s performance was deficient or fell below an objective standard of reasonableness. St. John, ¶ 37. In so doing, the defendant must overcome a strong presumption that counsel’s defense strategies and trial tactics fall within a wide range of reasonable and sound professional decisions. Strickland, 466 U.S. at 688-89, 104 S.Ct. at 2064-65, 80 L.Ed.2d at 693; State v. Harris, 2001 MT 231, ¶ 18, 306 Mont. 525, ¶ 18, 36 P.3d 372, ¶ 18. The second prong requires the defendant to establish prejudice by demonstrating that there was a reasonable probability that, but for counsel’s errors, the result of the proceeding would have been different. Harris, ¶ 19. A defendant claiming ineffective assistance of counsel must ground his or her proof on facts within the record and not on conclusory allegations. St. John, ¶ 38.
DISCUSSION
¶21 In his second petition for postconviction relief, Davis asserts ineffective assistance of counsel because his attorney allegedly told him “not to tell the [cjourt about a compression fracture that he had in his back which would preclude him from doing any sit-ups or push-ups, as required in the boot camp,” and would, therefore, disqualify him for boot camp. The District Court, however, noted significant discrepancies in Davis’s allegations and the affidavit of Davis’s counsel who denied advising Davis to withhold any medical information in anticipation of his screening for boot camp at his sentencing or any other time.
¶22 The District Court, in its August 20, 2002, order denying Davis’s petition, noted that the court file reflected information in the PSI i’eport that was inconsistent with Davis’s allegations that he withheld medical information based upon the advice of counsel. Specifically, in a telephone interview with Davis conducted by a State Probation and Parole Officer, Davis completed a general health screening wherein the following question was asked and answered:
Q: Is there any physical or emotional condition, which you believe requires accommodation, e.g. lifting restrictions, activity restrictions, and assistance in ambulating, etc.? Has reasonable accommodation been made in the past? If it has, please explain. Is there anything that would limit your ability to participate fully in any correctional setting, i.e. Pre-release, boot camp, MSP, etc. A: No - crushed vertebrae, February 1998. Always pain.
Thus, Davis, himself, disclosed that, as of February 1998, he had a crushed vertebra which resulted in constant pain, but that the condition would not limit his ability to participate fully in any correctional setting, including boot camp. The court stated that, even assuming, arguendo, that Davis’s counsel did advise him to remain silent about his back problem, Davis had already revealed the information of his own accord. The information was available to the court, and the court was, in fact, aware of Davis’s back problem when it pronounced sentence on the revocation of the prior deferred sentence. The court concluded, therefore, that Davis could not show that the alleged deficient performance of his counsel prejudiced him.
¶23 We agree that Davis has not carried his burden of proving his claim for ineffective assistance of counsel. First, Davis has not grounded his proof on facts within the record rather than on conclusory allegations. Davis baldly stated in his petition that his inability to complete the boot camp program “has led to numerous detrimental consequences. He has been denied for every possible DOC placement he is eligible for. He has been denied parole because this has been a condition adopted by the parole board.” As the State correctly notes, Davis has failed to provide any evidence in support of these assertions, as required under St. John.
¶24 Furthermore, Davis has not met the second prong of the Strickland test which requires a reasonable probability that, but for counsel’s deficient performance, Davis would not have pled guilty and would have insisted on going to trial. Harris, ¶ 19. Davis has failed to establish that he would not have pled guilty to the violation of his deferred sentence, and would have insisted on going to trial, but for his counsel’s alleged advice not to disclose his back injury.
¶25 Thus, we conclude the District Court properly denied both of Davis’s petitions for postconviction relief. Affirmed.
CHIEF JUSTICE GRAY, JUSTICES NELSON, COTTER and REGNIER concur.
Section 41-5-206(l)(b)(vii), MCA, states: “aggravated kidnapping as defined in 45-5-303.” | [
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JUSTICE LEAPHART
delivered the Opinion of the Court.
¶1 Raymond Staples (Staples), Kenneth J. Huntsinger, Arlene L. Huntsinger, and Kenneth J. Huntsinger, as Natural Parent and Guardian of Kaitlyn Marie Huntsinger (collectively the Huntsingers) appeal the District Court’s ruling. Farmers Union Mutual Insurance Company (FUMIC) cross-appeals. We reverse in part, affirm in part, and remand.
¶2 The issues on appeal are as follows:
¶3 1. Whether the District Court correctly determined that FUMIC had a duty to defend Staples?
¶4 2. Whether the District Court erred in holding that as a matter of law Staples was not an additional insured under Matt Corcoran’s (Corcoran) insurance policy?
¶5 3. Whether the District Court erred in failing to conclude that the judgment in the underlying action was invalid under the principle of judicial estoppel?
Factual and Procedural Background
¶6 On August 9,1998, Kenneth J. Huntsinger (Kenneth) was driving a vehicle on a road near Havre and struck a horse named Frenchy. It appeared that Frenchy may have come from Staples’ property just prior to the accident, although testimony regarding the precise location of Frenchy just before the accident is conflicting. Resolution of the issues in this case hinges upon a determination as to whether an insurer, in deciding to tender or reject a defense, should purport to resolve disputed issues of fact.
¶7 The record indicates that Corcoran and Don Christopherson (Christopherson) purchased Frenchy from Tom Leonard in 1993, as half-owners. Corcoran claims that in 1995 or 1996 he sold his half-interest in Frenchy to Christopherson. Staples, Corcoran, and Christopherson were all friends. Frenchy was pastured at both Corcoran’s ranch and Staples’ ranch at varying times prior to the accident. Frenchy bore Corcoran’s brand before and at the time of the accident. Members of the surrounding community believed Corcoran owned Frenchy.
¶8 Corcoran had a ranch liability policy in place at the time of the accident with FUMIC. In addition to providing coverage for Corcoran (the named insured), the insurance policy provided that any person would be an additional insured if the person was: “(1) legally responsible for animals... owned by [the named] Insured... but insofar as: (a) The insurance under this policy applies to Occurrences involving animals ...(b) The person’s or organization’s custody or use of the animals ... does not involve Business; (c) That person or organization has the custody or use of the animals ... with the owner’s permission.” An Occurrence was defined as including an accident which was neither expected or intended from the standpoint of the Insured (Corcoran).
¶9 Kenneth, Kenneth’s mother Arlene L. Huntsinger (Arlene), and Kenneth’s daughter Kaitlyn Marie Huntsinger (Kaitlyn) instituted a claim against Staples. Kenneth suffered injuries including mental and physical pain and suffering, complete physical disability, economic loss, disruption of his normal life, lost wages, medical and other expenses, loss of consortium, and other general and special damages. Arlene’s claims were derivative claims for loss of consortium, lost earnings, expenses, and emotional distress. Kaitlyn’s claims were also derivative claims for economic loss, emotional distress, and loss of consortium.
¶10 After approximately one year of pre-trial litigation (and approximately one month after the Huntsingers filed their claim against Staples), Staples filed a third-party complaint against Corcoran and Christopherson. Staples alleged that Corcoran and Christopherson together owned Frenchy. This would mean that Staples, serving as Frenchy’s custodian, was an additional insured under Corcoran’s policy. As such, he demanded a defense because, based on the terms of Corcoran’s policy, FUMIC would owe a third party with permissive custody of the insured’s horse all the duties owed to the insured. The Huntsingers subsequently filed an Amended Complaint which named Christopherson and Corcoran as defendants. The Amended Complaint alleged that Frenchy was owned individually or jointly by Corcoran and Christopherson. The complaint stated Frenchy was on either Staples’ or Corcoran’s land, under the control of Staples, Corcoran, or Christopherson when he left the pasture (of either Staples or Corcoran), and eventually was situated on the highway where Kenneth’s vehicle collided with him.
¶11 FUMIC admitted that Corcoran’s policy would cover the accident with the Huntsingers if Corcoran owned Frenchy at the time of the accident and Frenchy was being pastured at Staples’ ranch. However, FUMIC refused to defend Staples in the underlying action because it determined that Corcoran did not own Frenchy at the time of the accident and thus Staples was not an additional insured under Corcoran’s policy.
¶12 In December of 2001, Staples confessed judgments in favor of the Huntsingers, acknowledging that evidence existed from which a jury could find that he was liable for their damages. Staples assigned his rights under the FUMIC policy to the Huntsingers in exchange for covenants not to execute. After Staples confessed judgments, FUMIC filed a declaratory judgment action against Staples and the Huntsingers. FUMIC sought a declaration that it had no duty to defend or indemnify Staples, that the Huntsingers’judgments against Staples were not valid, and that FUMIC was justified in denying coverage to Staples.
¶13 The parties filed cross-motions for summary judgment. Staples and the Huntsingers asked the court to rule that FUMIC had a duty to defend Staples in the underlying action. FUMIC sought a ruling that it had no duty to defend Staples and that the judgments against Staples were not valid and enforceable. The court concluded that, based on the allegations in the amended complaint, FUMIC had a duty to defend Staples. The court then proceeded to go beyond the allegations in the amended complaint and analyze the facts developed during the course of the ensuing litigation. The court noted that both Corcoran and Christopherson swore under o ath that although Frenchy had, at one time, been partly owned by Corcoran, Corcoran had sold his interest in Frenchy to Christopherson some months prior to the accident. Accordingly, the court concluded:
While FUMIC, from the face of the complaint and amended complaint, clearly had a duty to defend when it appeared that Staples might be an insured under Corcoran’s policy, the facts, as they have developed, clearly show that Corcoran did not own the horse, that because Corcoran did not own the horse he could not have given permission for the horse to be on Staples’ property and, therefore, Staples was not a third-party insured of Corcoran.
114 The Huntsingers appeal from this determination.
Discussion
¶15 We combine our discussion of Issues 1 and 2 as follows:
¶16 Issue 1: Whether the District Court correctly determined that FUMIC had a duty to defend Staples but then concluded that Staples was not a third-party insured?
117 Issue 2: Whether the District Court erred in holding that as a matter of law Staples was not an additional insured under Corcoran’s insurance policy?
118 A district court’s decision to grant summary judgment is reviewed by this Court de novo. Farmers Union Mutual Ins. Co. v. Horton, 2003 MT 79, ¶ 10, 315 Mont. 43, ¶ 10, 67 P.3d 285, ¶ 10. Our evaluation is the same as that of the trial court. We apply the criteria contained in Rule 56, M.R.Civ.P. According to this rule, “[t]he moving party must establish both the absence of a genuine issue of material fact and entitlement to judgment as a matter of law.” Farmers Union Mutual Ins. Co., ¶ 10. If this is accomplished, “the burden then shifts to the non-moving party to prove, by more than mere denial and speculation, that a genuine issue does exist.” Old Elk v. Healthy Mothers, Healthy Babies, 2003 MT 167, ¶ 11, 316 Mont. 320, ¶ 11, 73 P.3d 795, ¶ 11 (citation omitted). If the court determines that no genuine issues of fact exist, “the court must then determine whether the moving party is entitled to judgment as a matter of law.” Old Elk, ¶ 11 (citation omitted). We review legal determinations made by a district court to determine whether the conclusions are correct. Farmers Union Mutual Ins. Co., ¶ 10.
¶19 This case presents an issue as to whether an insurer, in determining whether it has a duty to defend an insured, most look only to the provisions of the insurance policy and the allegations in the complaint or whether it may also look at facts developed outside the pleadings and the policy.
¶20 Montana law is well-settled that an insurer’s duty to defend its insured arises when an insured sets forth facts which represent a risk covered by the terms of an insurance policy. Lindsay Drill. & Cont. v. U.S. Fid. & Guar. Co. (1984), 208 Mont. 91, 94, 676 P.2d 203, 205; Graber v. State Farm (1990), 244 Mont. 265, 270, 797 P.2d 214, 217 C‘[t]he general rule is that the insurer has a duty to defend when a complaint filed against its insured sets forth facts which bring the event within the policy provisions”); Grindheim v. Safeco Ins. Co. (D. Mont. 1995), 908 F.Supp. 794, 798 (“an insurer’s duty to defend its insured arises when the insurer, through reference to pleadings, discovery, or final issues declared ready for trial, has received notice of facts representing a risk covered by the terms of the policy”). The insurance company must look to the allegations of a complaint to determine if coverage exists under an insurance policy, thus giving rise to the insurer’s duty to defend. Graber, 244 Mont. at 270, 797 P.2d at 217. Montana “case law clearly provides that where the insurer refuses to defend a claim and does so unjustifiably, that insurer becomes liable for defense costs and judgments.” Lee v. USAA Cas. Ins. Co., 2004 MT 54, ¶ 19, 320 Mont. 174, ¶ 19, 86 P.3d 562, ¶ 19; Independent Milk & Cream Co. v. Aetna Life Ins. Co. (1923), 68 Mont. 152, 158-59, 216 P. 1109, 1111 (in interpreting agreements of indemnity, the court relied on § 8169, RCM (1921) which is now codified in § 28-11-316, MCA); Grindheim, 908 F.Supp at 798.
¶21 The duty to defend is independent from and broader than the duty to indemnify created by the same insurance contract. St. Paul Fire & Marine Ins. Co. v. Thompson (1967), 150 Mont. 182, 188, 433 P.2d 795, 799; Grindheim, 908 F.Supp. at 800. The duty to defend arises when a complaint against an insured alleges facts, which if proven, would result in coverage. St. Paul Fire & Marine Ins. Co., 150 Mont. at 188, 433 P.2d at 799; Grindheim, 908 F.Supp. at 800. “Where a complaint alleges facts which represent a risk outside the coverage of the policy but also avers facts which, if proved, represent a risk covered, the insurer is under a duty to defend.” Atcheson v. Safeco Insurance Co. (1974), 165 Mont. 239, 245-46, 527 P.2d 549, 552 (citations omitted).
¶22 The fundamental protective purpose of an insurance policy and the obligation of the insurer to provide a defense require that coverage exclusions be narrowly construed. Farmers Union Mut. Ins. Co. v. Oakland (1992), 251 Mont. 352, 356, 825 P.2d 554, 556; Grindheim, 908 F.Supp. at 801. The insurer is under a duty to construe the factual assertions from the perspective of the insured rather than solely from the insurer’s own perspective. Portal Pipe v. Stonewall (1993), 256 Mont. 211, 216, 845 P.2d 746, 749; Grindheim, 908 F.Supp. at 801. When a court compares allegations of liability advanced in a complaint with policy language to determine whether the insurer’s obligation to defend was “triggered,” a court must liberally construe allegations in a complaint so that all doubts about the meaning of the allegations are resolved in favor of finding that the obligation to defend was activated. See Portal Pipe, 256 Mont. at 216, 845 P.2d at 749; Grindheim, 908 F.Supp. at 805. Unless there exists an unequivocal demonstration that the claim against an insured does not fall within the insurance policy’s coverage, an insurer has a duty to defend. Insured Titles, Inc. v. McDonald (1996), 275 Mont. 111, 116, 911 P.2d 209, 212.
¶23 In the present case, FUMIC’s vice president of claims, Gary Bidder, conceded that Corcoran’s policy would cover the accident if Corcoran owned Frenchy at the time of the accident and if Frenchy came from Staples’ ranch. However, rather than accepting the allegation in the amended complaint that Corcoran owned the horse as true, Bidder looked at evidence outside the amended complaint and, although he conceded the evidence was conflicting, he made a unilateral determination that Corcoran did not own Frenchy at the time of the accident. He thus concluded that FUMIC did not owe Staples a duty to defend. The District Court concluded:
It is possible, upon a review of the evidence presented, that the insurer could show that Frenchy did not belong to it’s [sic] insured and that they, indeed had no duty to Staples or the plaintiffs in the underlying action, but that is not a question for the insurer to answer unilaterally upon receipt of only the complaint and/or answer. That question is reserved for the Court or the jury. At the time FUMIC received the complaint and answer, FUMIC had a duty to defend.
¶24 We agree with the District Court’s analysis on this point. Although the insurer is free to look at facts beyond the allegations in the complaint, it does so at its own risk. See Lee, ¶¶ 19-22; Independent Milk & Cream Co., 68 Mont. at 158-59, 216 P. at 1111; Grindheim, 908 F.Supp at 800. Unless there exists an unequivocal demonstration that the claim against the insured does not fall within the policy coverage, the insurer has a duty to defend. Insured Titles, Inc., 275 Mont. at 116, 911 P.2d at 212. In other words, if there is any dispute as to the facts relevant to coverage, those factual disputes must be resolved in favor of coverage.
¶25 Here, the issue of ownership was heavily disputed. Although Corcoran testified that both he and Christopherson had initially purchased Frenchy, the bill of sale only named Corcoran as a purchaser. Although Corcoran testified that he had sold the horse, he continued to pasture and water the horse for no compensation. Frenchy had Corcoran’s brand at the time of the accident and there was no evidence of a bill of sale from Corcoran to Christopherson. Clearly there were genuine disputes as to material facts.
¶26 Given the allegations in the complaint and the dispute as to ownership of Frenchy, FUMIC had a duty to defend Staples. If FUMIC believed that there was a legitimate basis for contesting coverage, it could have tendered the defense under a reservation of rights and filed a declaratory judgment action. However, despite conflicting testimony, FUMIC unilaterally decided the issue of ownership against Staples and refused to defend him. In taking this course of action, the insurer proceeds at its own risk. Here, there were clearly genuine disputes as to facts material to the issue of Frenchy’s ownership. It cannot be said that there was an unequivocal demonstration that the claim was not within the FUMIC policy’s coverage. Insured Titles, Inc., 275 Mont. at 116, 911 P.2d at 212.
¶27 The District Court correctly concluded that at the time FUMIC received the amended complaint and answer, it had a duty to defend; that Bickler erred in purporting to unilaterally decide the disputed issue of ownership, which was properly a jury question. The District Court, however, then proceeded to fall into the same trap when, upon motions for summary judgment, it resolved the clearly disputed question of Frenchy’s ownership. The law in Montana “clearly provides that where the insurer refuses to defend a claim and does so unjustifiably, that insurer becomes liable for defense costs and judgments.” Lee, ¶ 19; Independent Milk & Cream Co., 68 Mont. at 158, 216 P. at 1111. Section 28-11-316, MCA, codifies the principle that
[t]he person indemnifying is bound, on request of the person indemnified, to defend actions or proceedings brought against the latter in respect to the matters embraced by the indemnity, but the person indemnified has the right to conduct such defenses if he chooses to do so. If after request the person indemnifying neglects to defend the person indemnified, a recovery against the latter suffered by him in good faith is conclusive in his favor against the former.
¶28 If FUMIC wished to dispute coverage, it could have defended Staples under a reservation of rights and later sought judicial determination through a declaratory judgment action to determine whether coverage existed. See e.g. Montana West Farm Bureau v. Brewer, 2003 MT 98, ¶ 30, 315 Mont. 231, ¶ 30, 69 P.3d 652, ¶ 30. However, because FUMIC unjustifiably refused to defend, it is estopped from denying coverage. Independent Milk & Cream Co., 68 Mont. at 158, 216 P. at 1111; Lee, ¶ 19.
¶29 Having correctly determined that FUMIC had a duty to defend, the court should have ended the analysis and concluded that since FUMIC breached that duty, it was estopped from denying coverage and Staples was entitled to summary judgment. The court erred when it proceeded to resolve disputed issues of fact in ruling on a motion for summary judgment in favor of FUMIC.
¶30 Issue 3: Whether the District Court erred in failing to conclude that the judgment in the underlying action was invalid under the principle of judicial estoppel?
¶31 On cross-appeal, FUMIC contends that the Huntsingers’judgment against Staples was obtained through fraud in that Staples was offered money in the form of payment of his attorney fees and was relieved from liability in exchange for changing his testimony. In his original answer to the complaint, Staples took the position that Frenchy was not on his property, that the horse was not in his possession, and that he refused to care for the horse. FUMIC contends that in confessing judgment, Staples contradicted his previous position by admitting the allegations of the amended complaint-i.e., that the horse was on his property and that he was taking care of Frenchy for Corcoran. FUMIC contends that Staples should be judicially estopped from entering into a confession of judgment based upon this change in position.
¶32 The Huntsingers and Staples counter that it is not fraudulent for a defendant to agree to a judgment in order to avoid the risks and expenses of proceeding to trial. They point out that Staples merely acknowledged in writing that there was evidence upon which a jury could find facts contrary to his positions and testimony. The exact language in the confessions of judgment was that “[i]n light of the severe injuries sustained and in recognition of the substantial risk that a jury would determine that [the Huntsingers are] entitled to recover damages in this matter against Raymond Staples, Raymond Staples consents to entry of judgment as above-stated in this matter.” The covenants not to execute and assignment of claims contain similar language that the parties entered into these agreements “because of the substantial risk of a large judgment being entered in favor of plaintiff Kenneth J. Huntsinger and against Raymond Staples, which would be financially ruinous to Raymond Staples and likely result in bankruptcy.” We conclude that Staples did not perpetrate a fraud upon the court. He did nothing more than concede that, given the disputed facts, there was a risk that a jury could find him at fault, even if he continued to deny liability.
¶33 Finally, FUMIC contends that the confessions of judgment do not conform with § 27-9-102(3), MCA, which requires that “[a] statement in writing must be made, signed by the defendant, and verified by his oath to the following effect:... (3) If it be for the purpose of securing the plaintiff against contingent liability, it must state concisely the fact constituting the liability and show that the sum confessed therefor does not exceed the same.” The Huntsingers and Staples respond that: (1) § 27-9-102(3), MCA, does not apply to the judgments in question, (2) since FUMIC was not a party to the underlying lawsuit, it lacks standing to attack the judgments, and (3) there is no basis for a collateral attack since the judgments are not void on their face and the court did not lack jurisdiction. See Glickman v. Whitefish Credit Union Assoc., 1998 MT 8, ¶ 13, 287 Mont. 161, ¶ 13, 951 P.2d 1388, ¶ 13. We agree that § 27-9-102(3), MCA, does not apply to the confessions of judgment at issue. The statute applies to a situation where a party-plaintiff takes a confession of judgment as security against a future contingent liability. In the present case, the confessions of judgment were not taken as security against a contingent liability. Rather, pursuant to § 27-9-102(1), MCA, the confessions of judgment were for a “specified sum” based upon the Huntsingers’ claims in the underlying suit.
¶34 In conclusion, we affirm the District Court’s conclusion that FUMIC owed Staples a duty to defend. We hold that since FUMIC unjustifiably refused to honor that duty, it is estopped from denying coverage, and Staples is entitled to summary judgment. We reverse the District Court’s conclusion that Staples was not an additional insured under the FUMIC policy. We affirm the issues raised on the cross-appeal and remand for further proceedings consistent with this opinion.
JUSTICES NELSON, COTTER, REGNIER and RICE concur. | [
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JUSTICE RICE
delivered the Opinion of the Court.
¶ 1 Hidden Hollow Ranch (Hidden Hollow) brought this action in the Montana First Judicial District, Broadwater County, requesting an order holding Gregory W. Field (Field) in contempt of court for violating the provisions of the Confederate Creek Water Cases, Consolidated Decrees of 1918 and 1931 (Confederate Creek Decree), and requiring Field to install measuring devices to ensure proper distribution of water in the future. Following a bench trial, the District Court entered findings of fact and conclusions of law dismissing Hidden Hollow’s petition and enjoining Hidden Hollow from interfering with Field’s diversion works and water conveyance system. The District Court further ordered the Water Commissioner, Tom O’Donnell (O’Donnell), to take all acts necessary to ensure that Hidden Hollow not manipulate or modify Field’s diversion system and to see that Field allow 0.83 miner’s inches of water to be distributed through the diversion system to Hidden Hollow. From these findings of fact and conclusions of law, Hidden Hollow appeals. We affirm.
¶2 Hidden Hollow raises numerous issues on appeal, which we restate as follows:
¶3 1. Did the District Court exceed its jurisdiction under § 85-2-406, MCA, and re-adjudicate either party’s underlying water rights as previously decreed in the Confederate Creek Decree?
¶4 2. Did the District Court err in denying Hidden Hollow’s motion to certify the issue involving the controversy as to the source of the parties’ respective water rights to the Chief Water Judge?
¶5 3. Did the District Court erroneously shift the burden of proof to Hidden Hollow, in contravention to § 85-2-411, MCA, to prove how much water Hidden Hollow contributed to the natural drainage from its independent source?
¶6 4. Did the District Court’s order regarding Hidden Hollow’s water right deprive Hidden Hollow of due process of law by ruling on issues not raised by the pleadings?
BACKGROUND
¶7 The current dispute, concerning the appropriate distribution of the water of Confederate Creek and its tributaries, relates back to the Confederate Creek Decree entered by the First Judicial District Court, Broadwater County, in consolidated Cause Numbers 1918 and 1931, on September 24,1940. In that decree, the District Court decreed the water rights of Confederate Creek and its tributaries to the predecessors in interest to Hidden Hollow and Field.
¶8 Hidden Hollow’s right is found in findings of fact numbers 13 and 18 in the decree. Finding of fact number 13, setting a priority date of June 1, 1867, decreed the interest of Howard Matthews, Hidden Hollow’s predecessor in interest, and provides:
That Howard Matthews is the owner of, and entitled to the beneficial use and enjoyment of, and the right to use, [t]wenty-five (25) miner’s inches of the waters of Clear Creek, a tributary of Confederate Creek, which said right was initiated and perfected as of June 1, 1867, for the beneficial use upon the:
N% Sec. 22;
EV&NEV4 Sec. 21, T. 9, N.R. 2 E.
Said water is to be diverted through ten (10) ditches coming out of the creek, some on the south side of the creek and some on the north side of the creek, all of said diversion points being in the:
NV2 Sections 21 and 22;
WV2 Section 23, T. 9, N.R. 2 E.
¶9 Finding of fact number 18, setting a priority date of June 1,1869, provides:
That Howard Matthews is the owner of, and entitled to the beneficial use and enjoyment of, and the right to use, [t]wenty-five (25) miner’s inches of the water of Clear Creek, a tributary of Confederate Creek, which said right was initiated and perfected as of June 1, 1869, for beneficial use upon the:
N½ Sec. 22;
W/2 NE% Sec. 21, T. 9, N.R. 2 E.
Said water is to be diverted through ten (10) ditches coming out of the creek, some on the south side of the creek and some on the north side of the creek, all of said diversion points being in the:
NV2 Sections 21 and 22;
WV2 Sec. 23, T. 9, N.R. 2 E.
¶10 Field’s water right is found in finding of fact number 12 in the Confederate Creek Decree. Finding of fact number 12 decreed the interest of Howard Doggett, Field’s predecessor in interest, and provides as follows:
That Howard Doggett is the owner of, and entitled to the beneficial use and enjoyment of, and the right to use, the entire flow of that certain stream designated in the pleadings of said Howard Doggett as Willow Creek, or Willow Canyon Creek, and also known as the headwaters of Clear Creek, and also as Lone
Tree Creek, to be diverted from said stream as a point in the:
NEViNEU Sec. 13, T. 9, N.R. 2 E„
at the mouth of the canyon where said stream leaves the upper reaches of the mountain range to the east and south of Confederate Creek, and at the point where the present ditch of said Doggett taps said stream at the date of this decree, and by means of the same diversion now employed by him, and said Howard Doggett is entitled to the beneficial use and enjoyment of the entire flow of said stream, to be diverted by him as aforesaid, prior to the right of any other party to this action, at any time when said Howard Doggett shall have need of such water for beneficial uses, and shall be able to employ and use the same for a beneficial purpose.
Said waters have been appropriated for, and beneficially used upon, and are appurtenant to the:
S /^ Sec. 22;
Sections 23-26-27-33-34, T. 9, N.R. 2 E.,
WÁ Sec. 4, T. 8, N.R. 2 E.
¶11 Around 1905, Howard Doggett, acting pursuant to the Confederate Creek Decree, diverted the Willow Creek water in a southwesterly direction through a ditch known as the Upper Doggett Ditch. At the lower end of the Upper Doggett Ditch is a confluence where the ditch turns into a natural drainage area that, for the purpose of the current controversy, was referred to by some witnesses as the South Fork of Clear Creek, but was referred to by Field and his expert simply as an unnamed drainage or a tributary of Clear Creek . ¶12 The Willow Creek water, after flowing through Upper Doggett Ditch, reaches and follows this natural drainage in a westerly direction until it arrives at Field’s lower diversion, known as the Lower Doggett Ditch. The water is then diverted from the natural drainage in a southerly direction through Lower Doggett Ditch until it reaches Horse Creek, after which, it eventually arrives at Field’s ranch and is used for irrigation purposes. Thus, very little water is allowed to bypass Field’s lower diversion and travel the remainder of the natural drainage area toward Hidden Hollow’s points of diversion located on that drainage. Much of Hidden Hollow’s water is therefore supplied by other tributaries of Clear Creek further north and northwest of Lower Doggett Ditch.
¶13 At the beginning of the irrigation season in the summer of 1999, Field began experiencing a shortage of water from his Willow Creek water source. Upon inspection of his diversion structure at the head of Lower Doggett Ditch, consisting at that time of a primitive earth and rock structure, Field noticed that the structure had been altered to prevent water from passing through Lower Doggett Ditch. At trial Kelly Flynn (Flynn), a shareholder and then vice-president of Hidden Hollow Ranch, testified to having altered the diversion structure to allow water to remain within the natural drainage area and thereby travel down to Hidden Hollow’s points of diversion. According to Flynn, the Confederate Creek Decree decreed his right to use up to 50 miner’s inches of the flow from this natural drainage.
¶14 Due to the extent of the alteration, Field had a difficult time repairing the structure in a way that allowed the water in the natural drainage to pass through the Lower Doggett Ditch. According to Field’s testimony, the diversion structure required almost daily repair throughout the summer of 1999 and into the summer of 2000 because the structure continued to be altered in a manner that diverted water to Hidden Hollow.
¶15 After fixing the diversion structure numerous times in the summer of 2000, Field obtained legal counsel, who sent a letter to Hidden Hollow outlining Field’s concerns and requesting that Flynn “cease activities” at Field’s lower diversion. The alteration activity at the diversion structure ceased for a short period of time thereafter, but later resumed. As a result of the interference with Field’s diversion structure, Field contacted the Department of Natural Resources and Conservation, Trust Land Management Division (the Department), to inquire about appropriate action to cure the problem .
¶16 In June 2000, Tom Hughes (Hughes), a hydrologist for the Department, met with Field to discuss the allegations of trespass and improper diversion of water. Hughes photographed the diversion from Field’s conveyance system and suggested that Field replace the earth and rock diversion structure with one constructed from specialized concrete blocks. Based upon Hughes’s suggestion and upon the Department’s design and direction, Field installed a concrete block diversion structure at his lower point of diversion that effectively diverted all of the water down the channel towards Field’s ranch.
¶17 When Flynn discovered the newly installed diversion structure, he contacted Hughes at the Department. Hughes, along with the Water Commissioner, Tom O’Donnell, accompanied Flynn to Field’s lower point of diversion to inspect the concrete structure. Following their inspection, O’Donnell instructed Field to install a bypass tube in order to allow approximately 13.2 miner’s inches of water to remain in the natural drainage and thereby flow down to Hidden Hollow. Field complied with the order and installed a bypass tube designed to allow the prescribed amount of water to bypass the concrete diversion structure and flow to Hidden Hollow.
¶18 To control the prescribed flow of water to Hidden Hollow, the bypass tube was equipped with an adjustable valve. Flynn testified that he manipulated the valve on several occasions to allow a greater amount of water to pass through the tube and be diverted to Hidden Hollow because he believed that the Confederate Creek Decree authorized more water than the 13.2 miner’s inches prescribed by O’Donnell.
¶19 In response to Flynn’s repeated manipulation, Field installed a padlock on the bypass valve. Shortly thereafter, Flynn initiated the proceedings in this matter, requesting the District Court enjoin Field from further interference with Hidden Hollow’s water rights and requesting the court to order Field to install a measuring device at the lower diversion to properly measure the water being diverted to Hidden Hollow.
¶20 Following a bench trial, the District Court entered findings of fact and conclusions of law, dismissing Hidden Hollow’s petition and enjoining it from further interference with Field’s diversion works and water conveyance system. It additionally ordered O’Donnell to take all necessary steps to ensure that Hidden Hollow not manipulate or modify Field’s diversion system, except that Hidden Hollow was entitled to receive 0.83 miner’s inches of water-the amount which the court determined represented the water coming from an independent spring in Clear Creek and arriving at Field’s lower point of diversion. From these findings of fact and conclusions of law, Hidden Hollow appeals.
STANDARD OF REVIEW
¶21 We review a district court’s findings of fact to ascertain whether they are clearly erroneous. Habel v. James, 2003 MT 99, ¶ 12, 315 Mont. 249, ¶ 12, 68 P.3d 743, ¶ 12 . A finding is clearly erroneous if it is not supported by substantial evidence, if the trial court misapprehended the effect of the evidence, or if our review of the record convinces us that a mistake has been committed. Habel, ¶ 12. Our standard of review of a district court’s conclusion of law is whether the court’s interpretation of the law is correct. Habel, ¶ 12.
DISCUSSION
¶22 Did the District Court exceed its jurisdiction under § 85-2-406, MCA, and re-adjudicate either party’s underlying water rights as previously decreed in the Confederate Creek Decree?
¶23 After extensive fact gathering, the District Court determined that the water diverted from Field’s upper diversion system and imported to the natural drainage area constituted “developed” water. The court concluded that, because Field had imported the water from his Willow Creek water source, he was entitled to use this water before all other water appropriators. However, the court also noted the existence of a southern side spring, located along the natural drainage, just above the point at which the waters flowing through the Upper Doggett Ditch turned into the natural drainage. Expert testimony indicated that the spring produced a seasonal flow of 0.83 miner’s inches, which, although not likely to reach Hidden Hollow without the benefit of Field’s imported water, could be characterized as water naturally occurring in the drainage. The District Court therefore concluded that Field was entitled to all the water available at his lower diversion, less the 0.83 miner’s inches coming from the southern side spring.
¶24 On appeal, Hidden Hollow raises several points of error. To begin, Hidden Hollow argues that the District Court exceeded its jurisdiction under § 85-2-406, MCA, in determining that the southern side spring constituted an independent source of water, which produced a seasonal flow of 0.83 miner’s inches. It maintains that, under § 85-2-406(2)(b), MCA, controversies over the source of water fall squarely within the jurisdiction of the water court. Second, Hidden Hollow contends that the District Court erroneously classified Field’s imported water as “developed water,” and improperly applied the law in that regard. Hidden Hollow further argues that the District Court erred in changing the name of its water source to “unnamed drainage,” rather than referring to it as the South Fork of Clear Creek. Pervading each point is the contention that the District Court exceeded its jurisdiction under § 85-2-406, MCA, by adjudicating matters within the sole province of the water court. We address each sub-argument of this issue in turn.
¶25 A. Did the District Court exceed its jurisdiction in noting the existence of the southern side spring and determining its flow rate?
¶26 Hidden Hollow maintains that the District Court exceeded its jurisdiction by recognizing the existence of an independent source of water, otherwise known as the southern side spring, and determining its flow rate. It emphasizes that, pursuant to § 85-2-406(2)(b), MCA, “when a water distribution controversy arises upon a source of water in which not all existing rights have been conclusively determined ... any party to the controversy may petition the district court to certify the matter to the chief water judge.” (Emphasis added.) From this language, Hidden Hollow asserts the District Court erred in concluding that Hidden Hollow was entitled to only 0.83 miner’s inches of water flowing at Field’s lower point of diversion, particularly in light of the fact that the Confederate Creek Decree awarded Hidden Hollow up to 50 miner’s inches of water flowing in Clear Creek.
¶27 It is true that the jurisdiction to adjudicate water rights rests exclusively with the water courts. See Mildenberger v. Galbraith (1991), 249 Mont. 161, 166, 815 P.2d 130, 134, and State ex rel. Jones v. District Court (1997), 283 Mont. 1, 7, 938 P.2d 1312, 1316; see also § 85-2-102(10), MCA. However, pursuant to § 85-2-406(3), MCA, and cases decided by this Court, a district court has the authority to supervise the distribution of previously adjudicated water or to enforce an existing water decree, and may in certain cases fill in a pre-1973 decree with further delineations, such as time or season of use and acreage of application. In re Deadman’s Basin Water Users Ass’n, 2002 MT 15, ¶ 15, 308 Mont. 168, ¶ 15, 40 P.3d 387, ¶ 15.
¶28 In this case, we conclude that the District Court was merely enforcing the distribution of water as ordered by the 1940 decree, and thus did not exceed its jurisdiction in determining the source and flow of the water coming from the southern side spring. Section 85-2-406(3), MCA, provides that controversies between appropriators from a source that has been the subject of a final decree must be settled by the district court. Here, the controversy stems from water flowing from the previously adjudicated tributaries of Confederate Creek, and concerns the amount of water Field is entitled to withdraw from the natural drainage by virtue of his superior water rights in Willow Creek, a tributary of Confederate Creek. However, in order to accurately distribute decreed water between Field and Hidden Hollow, it was necessary for the District Court to identify water that was naturally present in the drainage, as distinguished from the water produced by Field’s diversion works. Upon weighing the evidence presented, the court determined that the water flowing from the southern side spring was independent from Field’s developed water and was water which could be characterized as naturally occurring in the drainage above Field’s lower diversion. The court further noted that the drainage would be dry but for Field’s developed water and the water flowing from the independent spring, and therefore concluded that Field was entitled to all of the water present at his lower diversion with the exception of 0.83 miner’s inches, the amount flowing from the southern side spring. Recognition that the 0.83 miner’s inches flowed from the southern side spring, and was not imported by Field, was therefore a necessary part of enforcing and administering the water rights previously adjudicated in the 1940 decree.
¶29 Furthermore, contrary to Hidden Hollow’s assertions, the District Court did not set or decree a permanent “flow rate” of 0.83 miner’s inches to Hidden Hollow. Rather, consistent with the Confederate Creek Decree, Hidden Hollow remains entitled to any water flowing through the natural drainage in excess of the amount that Field actually imports, up to 50 miner’s inches. This notwithstanding, at the time of the present controversy, the only water present at Field’s lower diversion not imported by Field from his Willow Creek water source was the 0.83 miner’s inches from the southern side spring. By making this simple determination, the District Court did not “re-adjudicate” previously existing water rights or otherwise modify the 1940 decree in excess of its authority under § 85-2-406, MCA.
¶30 B. Did the District Court err in classifying Field’s imported water as “developed water,”or otherwise err in referring to the natural water carrier as an unnamed drainage?
¶31 Generally speaking, the idea behind developed waters connotes obtaining water not previously available. Smith v. Duff (1909), 39 Mont. 382, 391, 102 P. 984, 986. Hidden Hollow argues that the determination of whether the water forming the water right constitutes developed water rests exclusively within the jurisdiction of the water court and, in support of its argument, cites Mungas v. District Court (1936), 102 Mont. 533, 539, 59 P.2d 71, 73. At issue in Mungas was whether the doctrine of developed waters entitled a prior appropriator to reclaim and use waters in a stream which had been increased by virtue of percolating and seepage waters which had returned to the natural flow of a stream after being used for irrigation purposes. In concluding that such waters were available for another appropriator’s use, this Court relied on its earlier holdings in Popham v. Holloron (1929), 84 Mont. 442, 275 P. 1099, and Rock Creek Ditch & Flume Co. v. Miller (1933), 93 Mont. 248, 17 P.2d 1074. In Popham we stated,
Where ... vagrant, fugitive waters have finally collected and reached a natural channel, and thus lose their original character as seepage, percolating, surface, or waste waters, and flow with such regularity... whether from rains raising the surface of a lake until it overflows ... seepage and percolation forming springs ... surface water collecting in a canyon... artificial water over which the creator has lost control ... water from artesian wells accidentally developed while drilling for oil... or water of a slough fed by seepage from irrigation, the waters flowing in such natural channel constitute a watercourse within the meaning of the law of water rights.
Popham, 84 Mont. at 451, 275 P. at 1102-03 (citations omitted). The Court in Popham accordingly held that waters flowing in such a watercourse, regardless of the original source of the water or the fact that the flow was not continuous throughout the year, was properly subject to appropriation by another user. Popham, 84 Mont. at 453, 275 P. at 1103. In Rock Creek Ditch, we refined this rule and held that the owner of a water right may collect and recapture water which he is entitled to use so long as the water remains within his or her possession and control. However, once the water gets beyond his control, it becomes waste and is subject to appropriation by another user. Rock Creek Ditch, 93 Mont. at 268, 17 P.2d at 1080. Such was the case in Mungas where the plaintiff sought to take the increase in the flow of a stream caused solely by percolation resulting from irrigation upon adjacent lands. While this Court recognized that an owner of a water right may employ a natural channel for conveyance of water which one is entitled to use, the waters at issue in Mungas were no longer under the possession or control of the original owners, and therefore were subject to appropriation by another user. Mungas, 102 Mont. at 538-39, 59 P.2d at 73.
¶32 We agree that a claim for appropriation of water rights where the original character of the water has been lost, or which is no longer under the possession or control of the original owner, should be adjudicated before the water court because, by its nature, it involves a determination of the “source” of the water right. See § 85-2-406(2)(b), MCA. In this case, however, the parties do not seek to adjudicate water which has lost its character as seepage, percolating, surface, or waste waters, or which has left the control of the original appropriator. Rather, Field merely seeks to use the water which he has brought into the natural drainage from his Willow Creek water source. The District Court referred to this imported water as “developed water,” and in this regard, Hidden Hollow claims the court erred. While we recognize the District Court may have incorrectly described Field’s imported water as developed water, we conclude any such error was harmless. This Court has long since held that where water is intentionally emptied into a natural watercourse for conduction to another point, an equivalent amount may be recaptured or diverted at a later point, so long as it does not diminish the rights of prior appropriators. Mungas, 102 Mont. at 538-39, 59 P.2d at 73 (citing Rock Creek Ditch, 93 Mont. at 262, 17 P.2d at 1078). Furthermore, § 85-2-411, MCA, expressly provides that “water appropriated under an existing right.. . may be turned into the natural channel of another stream ... for beneficial use....” Accordingly, we conclude the District Court did not exceed its jurisdiction under § 85-2-406, MCA, by referring to the water at issue as developed water. Rather, it appears the court was merely applying nomenclature to an otherwise confusing process.
¶33 Nor are we persuaded by Hidden Hollow’s contention that the District Court erred by referring to the natural water carrier as an “unnamed drainage.” Although unclear, Hidden Hollow apparently argues that, because Field’s upper diversion was not established until 1905, and Hidden Hollow’s water rights in Clear Creek have priority dates of 1867 and 1869, Hidden Hollow has priority over all the water flowing in the drainage. However, Hidden Hollow misapprehends the effect of the 1940 decree, which made Field’s water rights in Willow Creek superior to all others. Once again, Montana law specifically allows “water appropriated under an existing right ... [to] be turned into the natural channel of another stream ... for beneficial use.” See § 85-2-411, MCA. Because Field retained possession and control over his Willow Creek waters, he did not lose his order of priority merely by channeling this water through the natural drainage.
¶34 Finally, Hidden Hollow appears to argue that, by classifying Field’s imported water as “developed water,” the District Court erroneously created a new groundwater right in favor of Field. However, the District Court merely recognized that some of the water imported from Willow Creek would inevitably be lost to underground seepage. This actually occurred to the benefit of Hidden Hollow, since it would likely recapture some of this water at its later points of diversion. Nonetheless, Field was entitled to all the water present at his lower diversion, less the water from the independent spring, because the water had been imported by Field from his Willow Creek water source. Accordingly, we conclude and hold that the District Court did not exceed its jurisdiction under § 85-2-406, MCA, nor re-adjudicate any existing water rights under the Confederate Creek Decree.
¶35 Did the District Court err in denying Hidden Hollow’s motion to certify the issue involving the controversy as to the source of the respective parties’ water rights to the Chief Water Judge?
¶36 Given our resolution of the foregoing issue-that the District Court did not exceed its jurisdiction in recognizing the existence and flow of the southern side spring, but simply administered existing water rights pursuant to the Confederate Creek Decree-we hold the District Court did not err in denying Hidden Hollow’s motion to certify the instant controversy to the Chief Water Judge.
¶37 Did the District Court erroneously shift the burden of proof to Hidden Hollow, in contravention to § 85-2-411, MCA, to prove how much water Hidden Hollow contributed to the natural drainage from its independent source?
¶38 Hidden Hollow contends that, pursuant to § 85-2-411, MCA, the individual asserting that he is entitled to use waters from a natural carrier because of his contributions from another water source bears the burden of proving the amount of water purportedly contributed. Hidden Hollow argues that the District Court erroneously shifted the burden of proof by requiring it to show the amount of water flowing from the southern side spring, while failing to require Field to prove the amount of subsurface water actually arriving in the natural drainage from his Willow Creek water source. Hidden Hollow further argues that the District Court erred in failing to credit it for the subsurface waters which it contributed from the independent spring. Section 85-2-411, MCA, provides in part:
Water turned into natural channels. Water appropriated under an existing right or pursuant to this chapter may be turned into the natural channel of another stream or from a reservoir into the natural channel and withdrawn or diverted at a point downstream for beneficial use, but the waters of that stream may not thereby be diminished in quantity or deteriorated in quality to the detriment of a prior appropriator.
¶39 We agree that the burden of proof correctly rests on the party asserting he or she is entitled to use waters which have been released into a natural carrier from another water source. See Smith, 39 Mont. at 391, 102 P. at 987 (one who asserts that he is entitled to the exclusive use of water by reason of its development by him must assure the court by satisfactory proof that he is not intercepting the supply to which his neighbor is rightly entitled). However, we disagree that the District Court erroneously shifted the burden of proof to Hidden Hollow in this regard. To the contrary, the court weighed the evidence presented at trial and concluded that Field had indeed proved that more water was being imported from his Willow Creek water source than was being diverted at his lower point of diversion.
¶40 At trial, both parties presented expert testimony concerning the source and flow of the water traveling in the drainage area. According to Field’s expert, Daniel March, the southern side spring contributed just 0.83 miner’s inches of water to the natural drainage and only during seasonal periods. Hidden Hollow’s expert, Dave Schmidt, testified that the water flowing in the natural drainage was from several springs located along the drainage area. As the District Court noted, however, Schmidt’s measurements failed to account for the influence of the water being imported to the natural drainage by Field. March, on the other hand, had taken measurements at various points throughout the seasons and both at times when water was, and was not, being diverted from Willow Creek. Ultimately, the court was persuaded by March’s testimony and concluded that more water was being imported into the natural drainage than was being diverted at Field’s lower point of diversion.
¶41 We have stated that, in a non-jury trial, credibility of witnesses and weight of their testimony are matters for the district court to determine. Frank L. Pirtz Const., Inc. v. Hardin Town Pump, Inc. (1984), 214 Mont. 131, 135, 692 P.2d 460, 462. In this case, there is no indication that the District Court impermissibly shifted the burden of proof to Hidden Hollow to show the amount of water being contributed to the natural drainage. Rather, Field established the amount of water being diverted into the natural drainage by showing that all but 0.83 miner’s inches came from his Willow Creek water source.
¶42 Hidden Hollow’s contention that the District Court failed to account for its subsurface contributions to the water flowing in the natural drainage is equally without merit. Field testified that, in his observations of the area during all seasons since approximately 1970, the only independent source of water in the drainage area was the southern side spring. In the absence of Field’s imported water, the confluence area was dry. Field’s observations were confirmed by the water commissioner during a visit to the area in the spring of 2000, and supported by March’s measurements and observations. Furthermore, the evidence produced at trial revealed that the small amount of water flowing from the spring would not likely reach Hidden Hollow’s later points of diversion without the benefit of Field’s imported water. Thus, very little, if any, subsurface water flowing in the drainage was a product of the southern side spring. In light of this evidence, which the District Court found credible, we cannot fault the court for failing to credit Hidden Hollow for its contribution of subsurface water to the drainage area.
¶43 Did the District Court’s order regarding Hidden Hollow’s water right deprive Hidden Hollow of due process of law by ruling on issues not raised by the pleadings?
¶44 Hidden Hollow maintains that the District Court permanently modified the Confederate Creek Decree by declaring that Field is entitled to all but 0.83 miner’s inches of water at his lower point of diversion, and argues that such a modification in what is essentially an action for contempt and injunctive relief deprives it of due process of law. Because we conclude the District Court did not permanently modify the Confederate Creek Decree, we disagree that Hidden Hollow was deprived of the procedural and substantive protections embodied by the due process clauses of the Fourteenth Amendment of the United States Constitution and Article II, Section 17 of the Montana Constitution. Accordingly, the decision of the District Court is affirmed.
JUSTICES REGNIER, COTTER, WARNER and LEAPHART concur.
For purposes of this opinion, this Court will use the terms “South Fork of Clear Creek” and “natural drainage” interchangeably as the District Court used both terms in referring to the same channel.
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CHIEF JUSTICE GRAY
delivered the Opinion of the Court.
¶1 Benjamin Ruiz (Ruiz) appeals from the judgment entered by the Fourth Judicial District Court, Missoula County, on his convictions and sentences for the misdemeanor offenses of outfitting without a license and assisting an unqualified applicant in obtaining a resident license. We affirm in part, reverse in part and remand with instructions.
¶2 The issue on appeal is whether the District Court abused its discretion in denying Ruiz’s motion for directed verdicts on both charges at the close of the prosecution’s case-in-chief.
BACKGROUND
¶3 In June of 2001, the Montana Department of Fish, Wildlife and Parks (FWP) began investigating Ruiz based on information it received that he was acting as an outfitter without a license. During the investigation, FWP game wardens Randolph Arnold (Arnold) and Michael Martin (Martin) went undercover in an attempt to obtain outfitting services from Ruiz. Arnold posed as a Montana resident who worked as a consultant. Martin posed as one of Arnold’s clients who resided in Iowa, but liked to hunt and fish in Montana. Between June and December of 2001, the two FWP wardens contacted Ruiz on various occasions to plan a waterfowl hunting trip. The hunting trip eventually took place on December 11, 2001, when Ruiz met the wardens at a motel in Missoula, Montana, escorted them to Flathead Lake, and provided equipment and advice for their hunting. In turn, Arnold paid Ruiz $275.
¶4 At the end of the December of 2001 waterfowl hunting trip, Ruiz and the wardens discussed the possibility of big game hunting the following fall. Martin informed Ruiz that he would like to obtain a Montana resident hunting license, but would not be able to establish residency in Montana in time for hunting season. Ruiz informed Martin that he could use Ruiz’s home address in Stevensville, Montana, to obtain a Montana driver’s license and also that Ruiz knew someone who would sell him a resident conservation and fishing license without a Montana driver’s license. Once Martin obtained the resident conservation and fishing license, as well as a Montana driver’s license, he could purchase a resident big game hunting license.
¶5 In May of 2002, Ruiz and the FWP wardens met for dinner in Missoula, during which they discussed the arrangements for purchasing a Montana resident conservation and fishing license for Martin. Following dinner, the three went to a Missoula sporting goods store where a friend of Ruiz’s worked and Martin purchased a conservation and fishing license by using Ruiz’s Stevensville address. Later that evening, Ruiz provided Martin with a fake rental agreement stating Martin was living at Ruiz’s Stevensville address, which Martin could use to obtain a Montana driver’s license.
¶6 Based on the activities outlined above, the FWP issued two tickets to Ruiz charging him with outfitting without a license and assisting an unqualified applicant to obtain a resident license. Ruiz was convicted of both offenses following a trial in the Missoula County Justice Court, and he appealed to the District Court. The District Court held a jury trial in June of 2003. After the State of Montana (State) presented its case-in-chief, Ruiz moved the District Court for directed verdicts on both counts, asserting the State had failed to establish the requisite elements of the offenses. The court denied the motion and the jury found Ruiz guilty of both offenses. The District Court sentenced Ruiz and entered judgment on the convictions and sentences. Ruiz appeals.
STANDARD OF REVIEW
¶7 We review a district court’s denial of a motion for a directed verdict to determine whether the court abused its discretion. State v. Maloney, 2003 MT 288, ¶ 13, 318 Mont. 66, ¶ 13, 78 P.3d 1214, ¶ 13. In doing so, we determine whether, viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the elements of the offense beyond a reasonable doubt. Maloney, ¶ 13.
DISCUSSION
¶8 Did the District Court abuse its discretion in denying Ruiz’s motion for directed verdicts on both charges?
¶9 At the close of the State’s case-in-chief, Ruiz moved the District Court for directed verdicts on both charges against him, arguing that the State had failed to prove the elements of the offenses. The court denied the motion and Ruiz asserts the court abused its discretion in doing so. We address each charge in turn,
a. Outfitting without a license
¶10 Ruiz contends that the District Court abused its discretion in denying his motion for a directed verdict on this count because the State failed to prove beyond a reasonable doubt that any of his alleged outfitting activities occurred in Missoula County. Essentially, Ruiz argues that Missoula County was not the proper venue in which to bring this charge.
¶11 Generally, a criminal charge must be brought in the county where the offense was committed. Section 46-3-110(1), MCA. However, where an act requisite to the commission of an offense occurs or continues in more than one county, or where two or more acts requisite to the commission of the offense are committed, the charge may be filed in any county in which any of the acts occurred. Sections 46-3-112(1) and -112(2), MCA. Additionally, while venue is not an element of a charged offense, it is a jurisdictional fact which must be established by the prosecution at trial beyond a reasonable doubt. State v. Galpin, 2003 MT 324, ¶ 23, 318 Mont. 318, ¶ 23, 80 P.3d 1207, ¶ 23 (citations omitted).
¶12 Ruiz was charged with violating § 37-47-301, MCA, based on his activities in taking Arnold and Martin on a waterfowl hunting trip in December of 2001. That statute provides that
[a] person may not act as an outfitter, guide, or professional guide or advertise or otherwise represent to the public that the person is an outfitter, guide, or professional guide without first securing a license ....
Section 37-47-301(1), MCA. An “outfitter” is defined as
any person, except a person providing services on real property that the person owns for the primary pursuit of bona fide agricultural interests, who for consideration provides any saddle or pack animal; facilities; camping equipment; vehicle, watercraft, or other conveyance; or personal service for any person to hunt, trap, capture, take, kill, or pursue any game, including fish, and who accompanies that person, either part or all of the way, on an expedition for any of these purposes or supervises a licensed guide or professional guide in accompanying that person.
Section 37-47-101(11), MCA.
¶13 Arnold testified at trial that, on the morning of the waterfowl hunting trip, Ruiz met the two wardens at a motel in Missoula and escorted them-albeit in separate vehicles-through Missoula County on their way to Flathead Lake. Thus, Ruiz’s acts of providing services and accompanying the wardens on their hunting expedition occurred, in part, within Missoula County. Consequently, pursuant to § 46-3-112, MCA, it was appropriate for the State to bring the outfitting without a license charge in Missoula County. We hold, therefore, that the District Court did not abuse its discretion in denying Ruiz’s motion for a directed verdict on the outfitting without a license charge.
b. Assisting an unqualified applicant to obtain a resident license
¶14 The State also charged Ruiz with purposely or knowingly assisting an unqualified applicant in obtaining a resident license, in violation of § 87-2-106(8), MCA (2001), based on his actions in helping Martin-whom Ruiz believed to be a resident of Iowa, rather than Montana-obtain a resident conservation and fishing license. Ruiz moved the District Court for a directed verdict on this count, arguing that the State did not prove the elements of the offense because Martin was a Montana resident. The District Court denied the motion and Ruiz asserts error.
¶15 A person applying for a resident license is required to present identification establishing that the person is a resident of Montana. Section 87-2-106(1), MCA (2001). It is a misdemeanor offense for a person who does not meet the statutory residency criteria-in other words, a person who is an unqualified applicant-to make a false statement in order to obtain a resident license. Section 87-2-106(7)(a), MCA (2001). Ruiz was charged with violating § 87-2-106(8), MCA (2001), which provides that “[i]t is unlawful and a misdemeanor for a person to purposely or knowingly assist an unqualified applicant in obtaining a resident license in violation of this section.”
¶16 It is undisputed that Martin was a Montana resident at the time he applied for a Montana resident conservation and fishing license and, consequently, was qualified to obtain such a license. Therefore, notwithstanding Martin’s undercover persona as an Iowa resident, Ruiz did not assist an unqualified applicant to obtain a resident license because Martin actually was a Montana resident.
¶17 The State contends that, in proving Ruiz violated the statute, it is sufficient that Ruiz believed he was assisting a nonresident in obtaining a Montana resident license, regardless of whether Martin was a resident or not. As stated above, however, § 87-2-106(8), MCA (2001), provides that it is unlawful to “assist an unqualified applicant ...” to obtain a resident license. To interpret the statute in the manner urged by the State would require us to insert language into § 87-2-106(8), MCA (2001), stating it is unlawful to assist an applicant one believes to be unqualified to obtain a resident license. We may not do so. In interpreting statutes, our role is “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.” Section 1-2-101, MCA.
¶18 In order to prove a violation of § 87-2-106(8), MCA (2001), the State must prove that the applicant for the license was unqualified. As a result, the State was required to prove that Martin was not a resident of Montana. The State failed to do so. Consequently, we hold that the District Court abused its discretion in denying Ruiz’s motion for a directed verdict on the charge that he assisted an unqualified applicant to obtain a resident license.
¶19 Affirmed in part, reversed in part and remanded for the entry of an amended judgment dismissing the assisting an unqualified applicant to obtain a resident license conviction and deleting the related sentence.
JUSTICES NELSON, WARNER and RICE concur. | [
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] |
MR. JUSTICE MATTHEWS
delivered the opinion of the court.
The defendant, Gladys Belle Oil Company, a foreign corporation, has appealed from a judgment by default in favor of plaintiff for the sum of $18,400, with interest and costs, after timely motion to set aside defendant’s default had been by the court overruled.
The only question presented is: Did the court manifestly abuse its sound, legal discretion in refusing to open the default and permit the defendant to answer to the merits?
The action resulting in the entry of the judgment appealed from was commenced in the district court of Cascade county on July 6, 1925, whereupon summons was issued, as was also a writ of attachment. The writ was served by the sheriff of Liberty county by levying upon certain personal property of the defendant, and was duly returned and filed on July 15, 1925. The summons was also placed in the hands of the sheriff of Liberty county on the seventh day of July,, and a return thereon made to the effect that he, the sheriff, was unable to find the defendant within his said county, but the' summons with the return thereon was not filed with the clerk of the court of Cascade county until August 21, 1925, at which time counsel for plaintiff filed therein a demand for the issuance of an alias summons and his affidavit for publication thereof, in which he declared: “That the defendant is a foreign corporation having no managing or business agent, cashier, secretary, or other officer within the state; that the defendant is an Oklahoma corporation, and that the principal place of business and post office address of said defendant is Tulsa, Oklahoma.” The clerk forthwith issued the alias summons, and made and entered an order for the publication of the summons in the “ ‘Great Falls Leader,’ a newspaper published at Great Falls, Montana. * * * ” The alias summons was never published, for, in lieu thereof, counsel for plaintiff secured personal service upon the corporation of a copy of the summons and a copy of the complaint by the sheriff of Tulsa county, Oklahoma, who made return of his service by delivering and leaving such copies with the secretary of defendant company at Tulsa on the twenty-fifth day of August, 1925. The sheriff did not return the alias summons to the clerk of the court for filing, but evidently returned it to counsel for plaintiff, for, on the eighth day of September, 1925, the sheriff of Yellowstone county, Montana, made return upon this same alias summons that he duly served the same upon the defendant company on that date by delivering and leaving a copy of the alias summons and copy of the complaint with one Sterling M. Wood, of Billings, as the designated agent of the company for the acceptance of process in the state of Montana. This sheriff also failed to return the summons to the clerk of the court for filing, and also evidently returned it to counsel for plaintiff, for the summons was not filed in the office of the clerk of the court until the twenty-ninth day of September, 1925, when counsel for plaintiff immediately caused the default of the defendant for nonappearanee to be entered, and the summons, as filed that day, has attached to it the two certificates of service described.
Thereafter the law firm of Ayers & Toole, of Great Falls, appeared for defendant, and filed its motion to set aside the default entered, and to permit the defendant to answer to the merits. This motion separately stated the ground therefor, to-wit, that the default was taken against the defendant through its (1) mistake, (2) inadvertence, (3) surprise, and (4) excusable neglect. It was accompanied by a tendered answer and affidavit of merits, and was supported by the affidavits of Harrison S. Green, president of the company, Sterling M. Wood, the designated agent, and Warren Toole, of the firm of Ayers & Toole. The motion came on regularly for hearing, and on the third day of November, 1925, at which time plaintiff filed ten counter affidavits, and after some interrogation of counsel by the court, the motion was promptly denied. The judgment appealed from was thereupon entered.
The affidavit of Sterling M. Wood, who is an attorney at law, shows to the court that he represented the defendant in no other capacity than as the designated agent on whom service of process might be made in the state; that he had not been served with any other process for more than eleven months prior to September, 1925, and that theretofore he had always sent papers served upon him to one Peek, of Tulsa, Oklahoma, whom he knew to be the general counsel of the company, and that, on this occasion, as soon as the copies were served upon him, he followed this custom by mailing these papers to Peek, in care of the defendant company at Tulsa. It further appears from the affidavit of Green that Peek had been dischargedo as counsel for defendant, and that the papers mailed to Peek did not come into the hands of Green, as president, until September 28, 1925.
From the remarks of the court, while interrogating counsel, it would seem that the motion was denied upon the sole ground that Wood was negligent in presuming that Peek was still counsel for defendant and in mailing the papers to Peek rather than direct to defendant company. Aside from this phase of the ease, however, it appears from uneontradicted statements in the supporting affidavits and the counter-affidavits that Green was, during all of the time with which we are concerned, the president of the defendant company, an attorney at law, and had the exclusive management and control of all litigation in which the defendant was interested; that he was in Cascade and Liberty counties for some time during the latter part of August or early párt of September, 1925, and there met and talked with the plaintiff about the case and the nature of plaintiff’s asserted claim against the company, and promised to look into the matter and report his conclusions to plaintiff. He also talked with one L. C. Stevenson concerning some sort of settlement with plaintiff. He knew that the action had been commenced, for he saw the notice of attachment, and knew that a keeper was in charge, but was not advised that service of the summons had been made on the company, if it had then been made, nor was any attempt made to get service upon him as president while he was in the state.
In his affidavit, Green states that he returned to Tulsa on September 13 in response to a telegram advising him of the institution of receivership proceedings at that place, and that it became absolutely necessary for him, from the time he reached Tulsa, up to and including the twenty-sixth day of September, to devote all of his time, both night and day, to the preparation and trial of such case or eases, and, in addition thereto, it was necessary for all of the employees of the office to devote all of their time to such matters.
In refutation of this latter assertion, the counter-affidavits contain two letters written by Green on September 24, 1925, from Tulsa; one to plaintiff, the other to L. C. Stevenson. In the letter to plaintiff, he states: “I want to tell you that, since my return, I have gone into the matter as fully as possible of your employment and claim, and I am compelled to come to the conclusion that you are mistaken in making any claim against our company.” He advised Stevenson: “Ihave gone into the matter very carefully, and do not see how it is possible for him [the plaintiff] to maintain any kind of a claim against the Gladys Belle Oil Company.” In each of the letters, he stated that, since his return, he had been “hopelessly swamped” with more or less serious litigation, and had found it absolutely impossible to keep up with his work.
In addition to the showing made by Green that the press of business caused him to forget the matter of plaintiff’s attachment until the twenty-fourth day of September, when he wrote -Toole concerning the sufficiency of the sureties on the undertaking on attachment, it appears from the affidavits of Green and Toole that, prior to leaving Montana, Green wrote Toole to look after the Beynolds case, but that this letter never reached Toole, and that he, Toole, or his firm, had not any knowledge or information of the pendency of the action until the receipt of the letter, concerning the sureties, on the 28th of September, which was the last day for appearance under the service on Wood, and in which no mention of service was made. Thereupon Toole immediately went to the courthouse, secured the files in the action, and ascertained the status of the case as revealed by the record. He then went to the office of the “Leader,” and there learned that no publication had been made, and was satisfied in his own mind, from the showing made by plaintiff’s counsel in the record, that no service had been attempted within the state, but realized that personal service in Oklahoma might have been made or was being attempted. With this thought in mind, Toole immediately wired Green for information as to when, if at all, defendant was served with summons, and advised him that exception to the sureties must be taken within five days after such service. The reply to this message was received the following morning, but after the default had been entered.
Counsel for plaintiff contends that this showing discloses neglect on the part of Green, Wood and Toole, and insists that such neglect was inexcusable.
1. It is true that there is here a showing of neglect, but that is the very purpose of the affidavits filed. The relief which the court is authorized to grant is predicated upon the neglect of the movant, coupled with a showing of facts and circumstances which will reasonably excuse his negligent act or omission. (Sec. 9187, Rev. Codes 1921; Greene v. Montana Brewing Co., 32 Mont. 102, 79 Pac. 693.) The sufficiency of this showing in any case must depend upon the particular facts and circumstances of such case, as “no two cases will be found which present the same circumstances for consideration.” (Brothers V. Brothers, 71 Mont. 378, 230 Pac., 60, and cases cited.) The determination of the question rests within the sound legal discretion of the trial court (Eder v. Bereolos, 63 Mont. 363, 207 Pac. 471; Robinson v. Petersen, 63 Mont. 247, 206 Pac. 1092; Delaney v. Cook, 59 Mont. 92, 195 Pac. 833), and its action will only be reversed on appeal on a showing of manifest abuse of that discretion (Bowen v. Webb, 34 Mont. 61, 85 Pac. 739; Swilling v. Cottonwood Land Co., 44 Mont. 339, 119 Pac. 1102).
However, since “it is the policy of the law to have every litigated ease tried on its merits,” judgments by default are not favored. (Lovejoy v. Stutsman, 46 Okl. 122, 148 Pac. 175; Berri v. Rogero, 168 Cal. 736, 145 Pac. 95; McGinnis v. Beatty, 28 Wyo. 328, 204 Pac. 340; Greene v. Montana Brewing Co., supra; Brothers V. Brothers, supra.) In furtherance of justice, trial courts should, in applying the above statute to a given case, maintain and exercise that liberal spirit which prompted the legislature to grant them this discretionary power, and, while this court will disturb the action of a trial court in opening default only in exceptional cases, “no great abuse of discretion by the trial court in refusing to set aside a default need be shown to warrant a reversal.” (Brothers v. Brothers, supra; Eder v. Bereolos, supra; Nash v. Treat, 45 Mont. 250, Ann. Cas. 1913E, 751, 122 Pac. 745.) It is therefore apparent that an abuse of discretion may be made “manifest” in a case where the court has refused to open a default, by a showing which would not be so considered in a case wherein the court has granted such a motion.
2. With these rules in mind, we will take up the alleged acts of neglect attributable to the defendant. These are so interwoven one with the other that, while one certain act might, if standing alone, be inexcusable, they must be considered as a chain of circumstances and a conclusion reached by a consideration of the entire chain.
(a) Neglect is attributed to the designated agent, Wood, in failing to mail the papers served upon him direct to the defendant rather than to the attorney he had theretofore known as the general counsel of the company. In this Wood followed a well-established custom among lawyers everywhere, and a practice he had invariably followed theretofore. He had no reason to believe that, in this instance, the matter would not receive attention, at least as expeditiously, by this manner of transmission as though mailed direct, and his act of neglect would not have resulted in a default, had it not been for other circumstances shown.
(b) The officers of the defendant company were negligent in failing to advise Wood of the change in the personnel of its legal department, and it was their negligence which induced Wood to mail the papers to Peek; but this failure was but a link in the chain of circumstances which finally caused the entry of default, and there is nothing in the record to cause those officers nor anyone else to believe that a reputable attorney who had theretofore been acting for the corporation would, if papers from a distant state came into his hands, fail to promptly turn them over to his successor. or some competent officer of the company.
(c) This brings us to Green’s neglect and its connection with the foregoing.
It is contended by plaintiff’s counsel that, as it required but four days for the transmission of a letter from Billings, Montana, to Tulsa, Oklahoma, the papers transmitted by Wood were in the hands of,Peek on the 12th of September, and that the showing made that they did not come, into the hands of Green until the 28th does not negative a delivery by Peek to some authorized agent of the defendant company, and that, as no affidavit was secured from Peek, it must be presumed that, if obtained, Peek’s affidavit would be adverse to defendant or would contradict Green’s statement; that it must therefore be presumed that these papers were in the possession of defendant on or about September 12 or 13; and that defendant’s position would be the same then as though personal service had been made on Green before he left the state. It is further contended that Green’s affidavit of neglect by reason of pressing business which absorbed all of his time and gave him no opportunity to consider this case is impeached by his letters contained in the counter-affidavits, and that, under these circumstances, Green’s delay to take action until the 28th constitutes inexcusable neglect.
Conceding that this position is unassailable, in the absence of any further showing, there are three additional matters appearing in the showing made which should have been given consideration by the trial court:
(d) The summons was served upon the defendant at Tulsa on August 25. Such service is authorized, after securing an order of publication (see. 9118, Rev. Codes 1921) in lieu of publication; but, unlike personal service within the state, this service is not complete until the day on which the fourth publication would have been made, had the plaintiff proceeded under the order for publication, and the date of personal service is considered the date of the first publication for the purpose of computing the time of service. (Bowen v. Harper, 6 Idaho, 654, 59 Pac. 179.)
Section 9118 was carried forward from the Revised Codes of 1907, where it appeared as section 6521, and was construed as it is here construed, in the case of McLean v. Moran, 38 Mont. 298, 99 Pac. 836, but in conclusion it was there stated that “whether that service is made by publication and mailing or by delivering a copy of the summons, together with a copy of the complaint to the defendant personally, the person so served shall have the full period of four weeks and twenty days within which to make his appearance.” While it is clear from this statement that, after’ such personal service, the computation shall be made as though there had been a publication and mailing, the statement is not technically correct; in neither case would the defendant be entitled to “the full period of four weeks and twenty days.” The statute declares that “the service is complete on the day of the fourth publication,” which would be at the end of the third week, and the defendant would, therefore, have but three weeks and twenty days, or forty-one days, after the date of the first publication, or such personal service, in wbicb to make his appearance.
This service would entitle the defendant company to appear at any time up to and including the fifth day of October, 1925. Knowledge of this service must be imputed to Green, the president of the company. Knowing of this service, Green would be lulled into fancied security, and would have no reason to inquire as to whether any further service had been either made or attempted, and, when he wrote the letter which reached Toole on September 28, he would know that, under this service, Toole would have at least one week after its receipt in which to make appearance for the defendant; but even these facts would not justify the defendant’s position, had Green done nothing under this service, because of the subsequent service upon the company, commented upon under subdivision (e) above, and under which the attempted excuse fails; but
(e) On leaving the state in September at a time which brought him to Tulsa on the 13th, Green wrote to Toole to look after the Reynolds case. He is said to have done so, “out of an abundance of caution.” He may well be said to have done so because of the personal service on the defendant theretofore made, knowledge of which is imputed to him at that time. Had this letter reached Toole, he would have taken care of the case, and no default would have resulted. Toole’s subsequent actions demonstrate that he was ready to act promptly whenever the matter was brought to his attention. This letter, however, miscarried.
Assuming that Green made the mail the agent of the defendant for the delivery of this notice, negligence may be attributable to the defendant; but this showing of neglect is akin to that in the case of Loeb v. Schmith, 1 Mont. 87, wherein a default was held to have been, properly set aside when it was made to appear that a demurrer, sent by express within time, was delayed until after the time for appearance had expired and default had been entered. Had Green, at that time, had full knowledge of both the service on the company and of that on Wood, its agent, and on his hurried departure from the state, and, being unable for want of time to see Toole personally, had notified Toole of such service by mail and directed him to attend to the matter, and such letter had miscarried, such a showing would be one of excusable neglect; we see little distinction between this supposititious case and what did actually occur.
(f) Finally, the following set of circumstances, it seems to us, should have appealed strongly to the spirit of justice and fair dealing which should actuate trial courts in ruling upon a motion such as this:
On receipt of Green’s letter on September 28, Toole had what he terms “the last clear chance.” He had all of that day in which to appear for defendant, and his actions, as set out in his affidavit, show that he would have done so, had he had any intimation that the case was in that condition. Had the plaintiff and his agents not also been guilty of neglect, Toole would have. had full information of the nature and time of service on the morning of the 28th, when he searched the records and visited the “Leader” office. It is true he might have secured such information by appealing to counsel for plaintiff who also resided in Great Falls, but an attorney is justified in relying upon the official records for a determination of the condition of a case pending in the courts of this state, and should not be misled by an erroneous showing made in such records, either by insertion or omission, and, when it is made to appear that an attorney has been so misled, our courts should be prompt in relieving his client from the effect of such a condition of the records.
As heretofore stated, the alias summons, to which are attached the returns of both the Oklahoma sheriff and the sheriff of Yellowstone county, was withheld from the record until the morning of September 29. Section 9124, Revised Codes of 1921, provides that “it shall be the duty of the sheriff, or other person serving a summons or other process or order required by any of the provisions of this Code, issued out of any of the district courts of this state, to make due and legal return of such service, and file the same with the clerk of the court in which such action or proceeding is pending, not more than ten days after the making of such service, where the same was made in the county in which such action or proceeding is pending, and not more than fifteen days after the making of such service, when the same was made outside of the county in which such action or proceeding is pending. Any failure to make and file such return as required may be punished as a contempt of court.” The purpose of the statute is plain. It requires' the making of a record in the case which will disclose, prior to the expiration of the time for appearance, the time and manner of service to anyone examining the record, as did Toole, independent of the copies required to be left with the person on whom service is made. To insure compliance with this statute, the legislature has declared that failure to obey its mandatory provisions may be punished as‘contempt of court.
In this state it is presumed “that official duty has been regularly performed.” (See. 10606', subd. 15, Rev. Codes 1921.) Toole was justified in presuming that, as the summons, with the return thereon, was not on file, no service thereof had been made prior to the fifteen-day period preceding September 28, and it is apparent that, regardless of the neglect of defendant prior to that daté, it would not have been in default had it not been for the action of those representing the plaintiff in failing to file the summons on or before September 23, as required by the statute.
Aside from the statutory ground of excusable fault on the part of the movant, it is held that a party should be relieved from a default “where there is a legal and sufficient excuse for the delay, as where the delay was due to the action of the court, or is attributable to the plaintiff’s own fault, or irregular action in the case.” (34 C. J. 164; Sweeney v. O’Dwyer, 45 Misc. Rep. 43, 90 N. Y. Supp. 806; Royce v. Mott, 1 How. Pr. (N. Y.) 50.) This rule seems to be recognized in this state in the following cases: Whiteside v. Logan, 7 Mont. 373, 17 Pac. 34, In re Davis’ Estate, 15 Mont. 347, 39 Pac. 292, Anaconda Min. Co. v. Saile, 16 Mont. 8, 50 Am. St. Rep. 472, 39 Pac. 909, Greene v. Rowan, 29 Mont. 263, 74 Pac. 456, Hauser v. Newman, 39 Mont. 252, 102 Pac. 334, and Brown v. Weinstein, 40 Mont. 202, 105 Pac. 730, in each of which cases there appears the element of fault on the part of the plaintiff, misleading the defendant into a position where default was taken against him, and in each case this court unhesitatingly-upheld the right of the defendant to relief from the default so caused.
Under all of the circumstances detailed above, and particularly those last appearing herein, the court should have set aside the default and permitted the defendant to answer to the merits, and its failure to do so constituted a manifest abuse of its legal discretion.
3. The question as to whether defendant showed that it had a meritorious defense was not presented to the trial court, and was not taken into consideration in denying the motion.
The tendered answer is but a general denial, and is not suf fieient to entitle the defendant to relief under the statute on a showing of excusable neglect. (Schaeffer v. Gold Cord Min. Co., 36 Mont. 410, 93 Pac. 344; Donlan v. Thompson Falls C. & M. Co., 42 Mont. 257, 112 Pac. 445.) The purpose of requiring the movant to set out, either in an answer or affidavit of merits, the facts on which he relies is to enable the court to determine whether, if permitted to appear, he might prevail in a trial; if not, it would be a useless waste of time and expense to open the default, and no such determination could be made from the ordinary general denial, under which a variety of defenses may be interposed.
In addition to the tendered answer, defendant filed with its motion an affidavit of merits, which contains the following statement: “Deponent further says that the plaintiff John J. Beynolds did not commence to work for the defendant on June 1, 1922, and continue in said employment until December 31, 1924, for the sum of $500 per month and expenses ; and deponent further says that the said plaintiff * * * was never, at any time, in the employment of the defendant * * * during the times mentioned in said complaint, and that the defendant is not indebted to the plaintiff in the sum of eighteen thousand, four hundred dollars * * * or in any other sum.”
Counsel for plaintiff asserts that this is but a statement of conclusions, and no more than a general denial, not entitling defendant to relief, citing Bowen V. Webb, above, and Crawford v. Pierse, 56 Mont. 371, 185 Pac. 315, and that the statement is pregnant with the admission that plaintiff was employed by defendant at some time. In the cases cited, the court condemned the setting out of the bald conclusion that defendant had a meritorious defense, without stating the facts from which the court could draw its own conclusions on the subject. Here, while the statements made are, of necessity, denials, they are not the general denials found in a pleading, but succinct statements of fact, denying the facts set out in the complaint, and, were it not for the phrase “during the times mentioned in the complaint,” are sufficient to enable the court to determine whether defendant has a meritorious defense on the merits. The facts thus alleged might, or might not, be established on the trial, but that is a question with which neither the trial court nor this court is concerned. The affidavit alleges such to be the facts which would be established just as an answer would.
If A., without foundation in fact, should allege in a complaint that on a day certain he agreed to perform certain labor for B., and that B. agreed to pay him a certain wage therefor, and that pursuant to the contract he performed such labor, for which B. refused to pay, and that there is due him from B. a certain sum of money, what more could B. allege in an answer, or set forth in an affidavit of merits, than that he never entered into such a contract with A., that A. never performed any labor for him, and that he is not indebted to A. in the sum alleged or in any other sum? True, all of his statements would be denials, but those denials would constitute a complete answer, and therefrom the court could readily determine just what defense B. would make, and whether he had a meritorious defense to the action.
The affidavit is faulty, in that it contains the phrase above quoted. Why that phrase was incorporated in the affidavit is not apparent, as it appears from other parts of the record that the defendant would defend, if permitted to do so, on the ground that plaintiff was never employed by the defendant company, but, if employed at all, such employment was by one Stebbins, former president of the company, personally, in matters not connected with the defendant. The first phase of the above statement is pregnant with the admission that plaintiff may have worked for defendant at some time other than that stated in the complaint, but the denial of indebtedness based upon service is positive and complete, and negatives the idea that plaintiff was employed by defendant at any time at an agreed compensation or otherwise. The showing made is sufficient.
The judgment is reversed and the cause remanded to the district court of Cascade county, with direction to set aside the default entered and to permit the defendant to answer to the merits.
Reversed and remanded.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Stark concur. | [
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] |
MR. JUSTICE MATTHEWS
delivered the opinion of tbe court.
M. H. Lashorn, as treasurer of tbe Co-ordinate Bodies of tbe Ancient and Accepted Scottish Rite of Freemasonry, of Livingston, Orient of Montana, sought to compel tbe allowance of bis claim for tbe amount tbe lodge bad on deposit at the time tbe defendant bank became insolvent, as a preferred claim. Issue was joined, and a trial thereon bad, resulting in a judgment in favor of tbe defendants, from which judgment plaintiff has appealed.
Tbe facts adduced on tbe trial are identical with those in tbe the case of W. H. Pethybridge, as guardian, against these defendants (ante, p. 173, 243 Pac. 569), except as to tbe capacity of plaintiff, and that the original deposits were on time, and for which certificates of deposit were issued, and that in this case there is no intimation that plaintiff did not have authority from tbe lodge for all that be did, or that any one of bis acts was in violation of rule or regulation of tbe lodge or of any law of tbe state of Montana.
It affirmatively appears from tbe record that, at tbe time tbe deposits were made, there was no agreement or understanding between plaintiff and tbe bank that tbe deposits should constitute special deposits.
1. Deposits of funds for a specified time, and for which certificates of' deposit are issued, constitute general deposits, and, “tbe bank becoming insolvent, tbe depositor must be remitted to tbe position of a general creditor.” (2 Micbie on Banks & Banking, sec. 152.)
2. Counsel for plaintiff contends that, as tbe funds de posited by plaintiff were trust funds in bis bands, their deposit in a bank having notice of this fact constituted a special deposit, and whether tbe deposit was rightfully or wrongfully made, the funds may be followed into the hands of the defendant receiver. As pointed out in the Pethybridge Case above, this contention is untenable, and, on the authority of that case, the judgment herein must be affirmed.
Judgment affirmed.
Affirmed.
Mb. Chief Justice Callaway and Associate Justices Hol. loway, Galen and Stark concur. | [
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JUSTICE HARRISON
delivered the Opinion of the Court.
This is an appeal from the Eleventh Judicial District, Flathead County, the Honorable Michael H. Keedy presiding. Appellant Lester Norman (Norman) appeals from a judgment of the District Court denying his claim for police disability retirement benefits. We affirm.
The issue on appeal is whether the District Court erred in affirming the Whitefish City Council’s denial of Norman’s claim for police disability retirement benefits. We note that this appears to be a case of first impression regarding the applicable statutes.
Norman served as a reserve police officer with the Whitefish Police Department from 1969 until 1973, at which time he entered a full-time position with the department. He left the department in 1975, but returned again in 1979 as a reserve officer. He became a full-time officer again in 1984 and worked as a full-time officer until March 16, 1988, when he quit the department.
During the course of his employment, Norman was involved in two automobile accidents. The first occurred on November 16,1980, while he and a fellow officer pursued another vehicle. The car Norman was driving slid off an embankment, and Norman hit his head on the ceiling of the car. He filed a workers’ compensation claim that was accepted by the City of Whitefish, which was self-insured. The second accident occurred February 12, 1987, when the car he was driving slid on the ice and struck a snow bank as he turned the corner on a city street. Norman hit his head and shoulder against the door frame and window of the car. The city also accepted a workers’ compensation claim for this accident and paid his medical expenses. Norman suffered no wage loss from either accident and continued to work after the 1987 accident -until March 16,1988, when he quit the department due to stress and anxiety problems.
In an affidavit submitted into evidence, Norman stated that he “became very nauseous and jittery feeling” while patrolling that day. He stated that he became ill and told the city manager that he was very sick and had to leave because of his nerves. He told the city manager that he could not take any more of the treatment he had received on the force. It appears, though, that Norman had decided to leave the police department before his shift started. According to a voluntary statement given by the officer whom Norman relieved of duty that day, Norman informed him at the beginning of the shift that he was leaving the department. The officer made this statement to the chief of police on the day Norman quit.
The “treatment” Norman referred to in his affidavit related to a history of tension between him and other officers and the police chief. He had been denied promotion twice in the eight months before he quit. Also, Norman had complained of abuses occurring in the department such as mistreatment of prisoners and excessive use of force by other officers. He claims his relationship with the chief and other officers, the incidents of abuse he witnessed, and the fact that he did not believe anyone was acting on his complaints elevated his pre-existing anxiety problems to a disabling level.
He then petitioned the Whitefish City Council for police disability retirement benefits on the basis of anxiety-stress syndrome. The city council held a meeting on June 27,1988, and on July 18,1988, voted unanimously to deny the request. In November 1988, Norman filed the present action in District Court seeking benefits and claiming that the stress and pressure he experienced at work caused the anxiety problems that led him to quit working.
On or about December 5, 1989, Norman filed a petition in Workers’ Compensation Court seeking temporary total disability benefits, claiming that a cervical disk injury was related to the automobile accident of February 12,1987. In August 1990, the Workers’ Compensation Court denied that claim, concluding that Norman had not met his burden of showing “that his current ‘... ability to engage in gainftd employment is diminished ...’ by his February 12, 1987 accident.” The Workers’ Compensation Court added, “If anything, the evidence is overwhelming that claimant’s anxiety disorder is his predominant disabling condition.” This Court affirmed the [Workers’ Compensation Court in] Norman v. City of Whitefish (1991), 248 Mont. 490, 812 P.2d 1259.
In December 1989, Norman filed another petition with the Whitefish City Council seeking police retirement disability benefits. This petition included the anxiety-stress claim and a claim for benefits due to herniated discs in his cervical spine. The city council denied this petition also. On May 4, 1990, Norman filed an amended complaint in District Court adding the herniated disk claim.
The District Court held a hearing on May 24,1991. After reviewing numerous depositions and Norman’s extensive medical records, the court issued its findings of fact, conclusions of law, and judgment on May 18, 1992. The court made extensive findings as to both the cervical disk injury and the anxiety-stress problem. The District Court concluded that the findings and conclusions of the Workers’ Compensation Court regarding the cervical disk injury were res judicata. As to the anxiety disorder, the court concluded that it was “not caused by injuries or disabilities in the active discharge of his duties as a police officer, but [was a] pre-existing condition for which Plaintiff had been treated many times....” The District Court, therefore, affirmed the city council’s denial of benefits.
As for the cervical disk injury, Norman claims the court erred in concluding that the Workers’ Compensation Court’s decision had res judicata effect on the proceeding in the District Court. He argues that the elements of res judicata have not been satisfied and that in considering the matter res judicata, the District Court ignored relevant medical evidence developed after the workers’ compensation case had been heard. He also claims that the District Court’s determination that he was not entitled to benefits is clearly erroneous because it is not supported by substantial evidence.
In reviewing the decision in a civil case tried to a court sitting without a jury, this Court will uphold a trial court’s findings unless the findings are clearly erroneous. Rule 52(a), M.R.Civ.R; Interstate Prod. Credit Ass’n v. Desaye (1991), 250 Mont. 320, 322, 820 P.2d 1285, 1287. Findings are clearly erroneous if not supported by substantial evidence. Desaye, 820 P.2d at 1287. This Court will uphold the result reached in the district court, regardless of the reasoning used by the district court, if the decision is correct. District No. 55 v. Musselshell County (1990), 245 Mont. 525, 527, 802 P.2d 1252, 1253; Jerome v. Pardis (1989), 240 Mont. 187, 192, 783 P.2d 919, 922.
Section 19-10-402, MCA, governs an award of police disability retirement benefits. It provides as follows:
Eligibility for disability retirement. When a police officer receives injuries or disabilities in the active discharge of his duties as a police officer, which injuries or disabilities 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, he shall be placed on the retired list of the city or town.
The officer is then entitled to disability benefits under § 19-10-502, MCA, which reads in part:
Disability retirement allowance. When a police officer is transferred from the active list to the retired list of a city, he shall thereafter receive monthly payments from the city’s police retirement fund, as follows:
(1) A police officer who is eligible under 19-10-402 before completing 20 years of service shall receive a sum equal to one-half the base salary, excluding overtime and payments in lieu of sick leave and annual leave, he was receiving as an active officer computed on the highest salary received in any one month during his last year of active service.
The Cervical Disk Injury Claim
The District Court made extensive findings regarding Norman’s cervical disk injury and its effect on his ability to work, ultimately finding that “the evidence submitted to the Whitefish City Council (as Police Pension Fund Commission) was not so persuasive as to require a determination of entitlement under the applicable code section.” Norman raises issue with the District Court’s findings because he claims they are nothing more than an adoption of those submitted by the City and the Workers’ Compensation Court. He cites In re Marriage of Johnson (1989), 238 Mont. 153, 157, 777 P.2d 305, 308, where this Court said that the district court “errs in adopting a party’s proposed findings only if the court does so ‘without proper consideration of the facts’ and with a lack of independent judgment.” (Citation omitted.) In those cases we look to whether the “ ‘findings and conclusions are sufficiently comprehensive and pertinent to the issues to provide a basis for decision, and are supported by the evidence.’ ” Marriage of Johnson, 777 P.2d at 308 (citation omitted). Because the parties’ proposed findings and conclusions are not contained within the record and subject to review, we are unable to address this point. See Glaspey v. Workman (1988), 230 Mont. 307, 749 P.2d 1083; First Nat’l Bank of Cut Bank v. Springs (1987), 225 Mont. 62, 731 P.2d 332. However, even if this matter were before us, our decision renders the point moot as we do not find error in the District Court’s findings and conclusions.
The District Court made over thirty findings related to the cervical disk injury. A sample of those findings indicates that Norman clearly did not quit his job because of any difficulties related to the cervical disk injury, and that the court did not err in determining that any injuries he received did not entitle him to disability benefits.
10. Prior to March 16,1988, Plaintiff voiced no concern to his fellow police officers that he was suffering any discomfort or disability relating to his cervical spine.
11. Plaintiff did not leave the employment of the City of Whitefish Police Department by reason of the injury to his cervical spine.
15. The history related to Dr. Mahnke was that Plaintiff left the force in the “context of political and personnel problems in the force.”
18. Dr. Mahnke in his notes states that Plaintiff was “fighting for disability for anxiety, for anxiety-stress disorder, Whitefish Police Department, 1979-1988.”
19. Even in October, 1989, Plaintiff still felt his disability was related to his nervous disorder, not to the herniate discs in his cervical spine.
21. Dr. Mahnke, neurosurgeon, indicates that Plaintiff’s spondylosis may be simply a degenerative process, although it could be caused by trauma; in fact, intellectually, he would have trouble discriminating them completely.
22. Were it not for the history related by Plaintiff, Dr. Mahnke could not relate the condition to any accidents or injuries.
25. A delay of approximately nine years, from the 1980 automobile accident until the 1989 MRI study, and considering that the condition complained of by Plaintiff may be the result of natural degeneration, traumatically-induced, the likelihood that Plaintiff’s condition is related to his automobile accident is highly questionable.
29. Although acting as Plaintiff’s consulting psychiatrist, Dr. Gray did not know of claimant’s neck complaints until the morning of his deposition, March 21,1990. Dr. Gray had previously prescribed time away from work for Plaintiff due to his anxiety or stress.
31. The findings of the Workers’ Compensation Court were that at no time did Dr. Wenzel (chiropractor) advise claimant to quit work due to his physical problems. After seeing the claimant in February, 1987, Dr. Wenzel does not reference cervical complaints, but rather “trapezius fibrocytis,” which refers to the upper shoulder muscles.
33. Judge Reardon found that, “during the entirety of the claimant’s pursuit of retirement disability benefits in calendar year 1988, his claim for disability was for stress. No mention was made of any disability related to the February 12, 1987 automobile accident. In fact, until the denial of his disability retirement benefits, claimant did not pursue any Workers’ Compensation benefits.”
While pursuing promotions in August 1987 and January 1988, Norman did not mention any problems related to the cervical disk injury. As specifically found by the District Court, Norman’s chiro praetor, Dr. Wenzel, never advised him to be off work or to quit work because of any physical problems. At the time Norman quit, his physician, Dr. Miller, clearly indicated that it was for stress and anxiety, not a physical problem. In fact, Dr. Miller had not heard of the 1987 accident until he spoke with Norman’s attorney on the date of his deposition for the workers’ compensation claim — March 22, 1990. Dr. Miller actually had no opinion as to whether the cervical disk problems were related to the 1987 accident. Dr. Mahnke, a neurosurgeon who examined Norman once, could not tell from reading the MRI, or from the examination, whether the 1987 accident changed the underlying anatomical condition of Norman’s neck.
The parties stipulated to the introduction of numerous depositions and medical records. This Court is in as good a position as the district court to review evidence of this nature, Spadaro v. Midland Claims Serv., Inc. (1987), 227 Mont. 445, 449, 740 P.2d 1105, 1107-1108, and has done so freely. Having done so, we conclude that substantial evidence supports the District Court’s finding that the evidence “was not so persuasive as to require a determination of entitlement under the applicable code section.” As we conclude that the District Court correctly determined that Norman was not entitled to benefits based on the cervical disk injury, we need not address whether the Workers’ Compensation Court’s decision had res judicata effect here.
Stress and Anxiety Related Claim
Dr. Gray, Norman’s psychiatrist, diagnosed Norman as suffering from “generalized anxiety disorder and psychological factors influencing physical condition.” In his April 8, 1991, deposition, Dr. Miller testified that Norman had a predisposition toward anxiety and that he had less ability to handle stress factors than the average person.
The District Court also made extensive findings recounting Norman’s anxiety and stress problems before he became a full-time officer in 1984. Those findings cite numerous diagnoses of anxiety, anxiety reactions, and chronic anxiety. Based on this history, the court concluded:
The anxiety disorder and panic attacks which Plaintiff complains of are not caused by injuries or disabilities in the active discharge of his duties as a police officer, but were pre-existing conditions for which Plaintiff had been treated many times by the doctors at Family Physicians Clinic in Whitefish.
Dr. Kuffel, a Whitefish physician who reviewed Norman’s medical records in 1990 at the city’s request, reached much the same conclusion.
Norman claims the District Court misinterpreted the statute by requiring a separate work-related injury or disability aside from the anxiety disorder. He argues that his anxiety disorder is his work-related disability and that an aggravation of a pre-existing condition should be compensable as it is for workers’ compensation injuries and occupational diseases. We note, however, that both the Workers’ Compensation Act and the Occupational Disease Act exclude coverage for physical or mental conditions arising from emotional or mental stress. See § 39-71-119(3) and § 39-72-102(10), MCA. Therefore, we do not find his argument persuasive.
Although Norman’s employment with the Whitefish Police Department may have been stressful and he may have experienced anxiety problems while serving on the force, substantial evidence supports the District Court’s finding that his problems did not result from the active discharge of his duties. We conclude that the District Court did not err in determining that Norman’s history of problems precluded him from receiving police disability retirement benefits.
Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, WEBER and HUNT concur. | [
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JUSTICE HUNT
delivered the Opinion of the Court.
Following a bench trial in the Eighteenth Judicial District Court, Gallatin County, appellant Wendell O. Gray was found guilty of the crime of robbery, a felony, in violation of § 45-5-401, MCA. Gray appeals the court’s final conviction and sentence entered on July 23, 1992. He also appeals the court’s denial of motions for evaluation at the Montana State Hospital at Warm Springs entered on May 1,1992.
We affirm.
Appellant presents two issues for this Court’s consideration.
1. Did the District Court err in denying appellant’s motion to obtain a complete psychological evaluation under § 46-14-202, MCA?
2. Did the District Court err at sentencing by not determining whether appellant suffered from a mental disease or defect at the time of the offense?
On January 19, 1992, a store clerk noticed Gray looking into the shoe store where she worked. Shortly thereafter, Gray entered the store, browsed for a minute, and then approached the cash register. Gray concealed his right hand in his coat pocket and handed the clerk a note which told her to give him the money and no one would get hurt. The store clerk believed that Gray was concealing a gun or a knife in his coat. She gave him all the money in the cash register. The store clerk testified that she smelled alcohol on Gray during the robbery. Gray placed the money in his coat and left the store. Based upon Gray’s physical description given by the store clerk, the police located Gray at a local bar. After the store clerk identified Gray at the police station, he was arrested and charged with robbery.
Because of a long history of mental health problems, Gray filed a motion requesting an evaluation at the Montana State Hospital at Warm Springs pursuant to § 46-14-202, MCA. The State requested that a local psychiatrist perform the evaluation to save time. The court ordered Dr. Noel Haukebo, a local psychiatrist, to perform the evaluation.
After Dr. Haukebo’s first evaluation, Gray made a second motion for a more complete evaluation at Montana State Hospital because Dr. Haukebo met with Gray for only one afternoon. Gray contended that this was inadequate, considering Gray’s history of mental illness. The District Court held a hearing and took the matter under advisement, but subsequently denied the motion.
A bench trial was held on June 23,1992. After presentation of the evidence, the District Court found that Gray did not suffer from a serious mental disease or defect. The court recognized that Gray had mental disorders, but concluded that the disorders did not deprive him of the capacity to understand the nature and meaning of the proceedings against him, or of his conduct on the day of the robbery, and that Gray acted purposely and knowingly when he committed the robbery. The court found Gray guilty and sentenced him to 15 years in the Montana State Prison without eligibility for parole. Gray appeals the denial of the motions for evaluation and the final conviction and sentence.
I.
Did the District Court err in denying appellant’s motion to obtain a complete psychological evaluation under § 46-14-202, MCA?
Section 46-14-202(1), MCA, provides that upon a written motion by the defense requesting an examination:
[T]he district court shall appoint at least one qualified psychiatrist or licensed clinical psychologist or shall request the superintendent of the Montana state hospital to designate at least one qualified psychiatrist or licensed clinical psychologist... to examine and report upon the defendant’s mental condition.
The statute gives the district court the discretion to appoint either a qualified professional or order the Montana State Hospital to evaluate the defendant. Absent an abuse of discretion we will not disturb the order of the district court.
In State v. Campbell (1985), 219 Mont. 194, 202, 711 P.2d 1357, 1362, cert. denied (1986), 475 U.S. 1127, 106 S.Ct. 1654, 90 L.Ed.2d 197, we held that the district court did not err in denying appellant’s motion for a second psychiatric evaluation simply because appellant thought that the results of the first evaluation were unfair. We stated that the statute does not provide for a second evaluation. Campbell, 711 P.2d at 1362. Gray seeks a second evaluation because he claims that the psychological evaluation was insufficient because of his long history of mental illness.
Section 46-14-202(3), MCA, provides that for the examination, “any method may be employed that is accepted by the medical or psychological profession for the examination of those alleged to be suffering from mental disease or defect.” The record shows that Dr. Haukebo is a qualified psychiatrist who testified at trial that the examination he performed was a standard evaluation for those asserting a mental disease or defect. In his first report, Dr. Haukebo stated that a person with such mental disorders should be given a period of inpatient care to reduce the severity of his illness.
Contrary to Gray’s allegation that he was seen only once, Dr. Haukebo testified that he examined Gray on a second occasion the day before trial. In the second report, Dr. Haukebo stated that Gray retained the capacity to understand the nature and meaning of the proceedings against him and the possible outcome. Dr. Haukebo further opined that Gray was not seriously mentally ill as defined by Montana law and that Gray understood the criminality of his behavior. As we have stated previously:
The spirit of the statute is to have a qualified professional examine a defendant for the purpose of evaluation. Where that spirit is substantially fulfilled, as here, we can find no substantial interference with a defendant’s rights and, thus, no reversible error.
State v. Buckman (1981), 193 Mont. 145, 150-51, 630 P.2d 743, 746.
In this instance, the spirit of the statute was upheld. We hold that the District Court did not err in denying Gray’s second motion for a psychiatric evaluation at the Montana State Hospital.
II.
Did the District Court err at sentencing by not determining whether appellant suffered from a mental disease or defect at the time of the offense?
Gray contends that the District Court erred when it did not consider his mental disease or defect at sentencing. Specifically, Gray asserts that pursuant to our holding in State v. Raty (1984), 214 Mont. 114, 692 P.2d 17, and § 46-14-311, MCA, the District Court did not determine at sentencing whether Gray suffered from a mental disease or defect at the time of the offense.
At the close of the evidence, the District Court specifically found that Gray did not suffer from a serious mental disease or defect. The court did not further discuss Gray’s mental condition during the sentencing hearing, or in its written sentence and judgment. The only additional evidence regarding Gray’s mental condition presented during the sentencing hearing was Gray’s own testimony.
Section 46-14-312(1), MCA, provides:
If the court finds that the defendant at the time of the commission of the offense of which the defendant was convicted did not suffer from a mental disease or defect as described in 46-14-311, the court shall sentence the defendant as provided in Title 46, chapter 18.
In this instance, the District Court was the trier of fact making both legal and factual determinations. All the evidence regarding Gray’s mental condition was presented during the bench trial. The court made a specific finding that Gray did not suffer from a mental disease or defect.
Based upon the presentence investigative report, the District Court sentenced Gray to 15 years at the Montana State Prison without possibility of parole. Attached to the presentence investigative report were the psychiatric reports of Dr. Haukebo. We hold that the District Court did not err in its consideration of Gray’s mental disease or defect at the time of the commission of the offense.
We affirm.
CHIEF JUSTICE TURNAGE, JUSTICE HARRISON, TRIEWEILER and GRAY concur. | [
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MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
On September 30, 1910, Frank J. Edwards, then mayor of the city of Helena, presented to the Examining and Trial Board of the Police Department of that city a complaint in writing charging Leonard Bailey, a captain of police, with delinquency of official duty. Bailey had been appointed, had qualified, and was serving under the Metropolitan Police Law of this state. The Trial Board gave due notice to the accused, who appeared personally and by counsel and participated in the trial which followed. On October 10, 1910, the Trial Board rendered- its decision finding the accused guilty as charged in counts 1 and 2 of the complaint. Acting upon this decision, the mayor, on October 11, 1910, made an order discharging Bailey from the police force. This action was thereupon instituted by Bailey to have the decision of the Trial Board set aside upon the ground that the essential requirements of the law had not been observed by the board in this: (1) That each of the counts upon which plaintiff was found guilty is without substance, is fictitious, trivial, and insufficient to show incompeteney, neglect of duty, misconduct in office, or conduct unbecoming an officer; and (2) that the evidence introduced before the Trial Board fails to sustain either count. Attached to the complaint is a copy of each of the following papers: The complaint made by Edwards, the notice of the hearing, certain objections interposed by the accused, a motion to strike out certain portions of the complaint, the evidence taken before the Trial Board, the findings or decision of the board, and the order discharging the accused officer. An answer was presented by defendants, but it did not raise any material issue, and for all practical purposes the cause was tried as upon an agreed statement of facts. The district court found for the plaintiff and rendered and had entered a judgment annulling the findings of the Trial Board. From that judgment this appeal is prosecuted.
1. Of the two counts upon which plaintiff was convicted, the first, which relates to alleged misconduct at the time of a fire at Lenox, need not receive further consideration than to say that the record of the testimony taken before the Trial Board fails to disclose any substantial evidence to support it.
2. If the facts in the second count constitute a triable offense, within the meaning of section 3309, Revised Codes, then the conclusion of the Trial Board should stand, for there is substantial evidence to support it. The charging part of that count reads: ‘ ‘ Complaint was made by Mr. Bollinger, a Rodney street merchant, who was by this officer told that nothing could be done for him unless he would swear out a warrant. This complaint was made because of an obstruction, in the shape of a stone step on the sidewalk in front of the residence of Eugene Meyer on Fifth avenue.”
The triable offenses mentioned in section 3309, above, are: (1) Incompetency; (2) neglect of duty; (3) misconduct in office; (4) conduct unbecoming an officer. If the sufficiency of the complaint above should be determined by the rules of pleading which control in courts of justice, it is obvious that it is fatally defective; but such rules cannot have application to the proceedings before the Police Trial Board. The only requirement of the statute is that the charge shall be reduced to writing (sec. 3309, above); and if in substance it makes out any one of the triable offenses mentioned, it is sufficient. And even in determining this question the courts will apply the most liberal rules of construction, and necessarily so. The members of the Police Trial Board are not required to be learned in the law of pleading and practice; in fact, many board members are laymen entirely unfamiliar with court procedure. Neither is it demanded nor contemplated that the person preferring charges against a police man shall specify tbe details of the charge, give a particular designation to the offense, or employ an attorney to draft the complaint. To insist upon strictness in construing a written charge of this character would defeat the purpose of the law and render members of the police force immune from discipline. The following authorities bear out the view we have expressed: People ex rel. Cagney v. MacLean, 10 N. Y. Supp. 851, 57 Hun, 587; Oesterreich v. Fowle, 132 Mich. 9, 92 N. W. 497; People ex rel. Flanagan v. New York Police Commrs., 93 N. Y. 97; People ex rel. Garvey v. Partridge, 180 N. Y. 237, 73 N. E. 4; Yoe v. Hoffman, 61 Kan. 265, 59 Pac. 351; 28 Cyc. 508.
As will be observed by reference to the statute above, the triable offenses are stated in such broad terms as to defy accurate definition. In Falloon v. Clark, 61 Kan. 121, 58 Pac. 990, the court said: “The only grounds of removal by impeachment are ‘misdemeanor in office,’ and these terms we think are used in a parliamentary sense and mean misconduct in office. It is something which amounts to a breach of the conditions tacitly annexed to the office and includes any wrongful official act or omission to perform an official act. ’ ’
In State ex rel. Tilley v. Slover, 113 Mo. 202, 20 S. W. 788, the court was called upon to review an order removing an official stenographer. In the course of the opinion the court said: ‘ ‘ The phrase ‘misconduct in office’ is broad enough to embrace any willful malfeasance, misfeasance, or nonfeasance in office, and it cannot be doubted that an official stenographer who willfully sets at naught this constitutional prohibition by refusing to personally devote his time to the performance of his official duties, whatever his reason therefor may be, is guilty of misconduct in office, within the meaning of the statute, and may be removed from office by the judge of the court of which he is such an officer.” This language is quoted with approval in Coffey v. Superior Court, 147 Cal. 525, 82 Pac. 75.
In Meehem on Public Offices and Officers, section 457, the author says: “Misconduct, willful maladministration, or breach of good behavior, in office, do not necessarily imply corruption or criminal intention. Tbe official doing of a wrongful act, or the official neglect to do an act which ought to have been done, will constitute the offense, although there was no corrupt or malicious motive. ’’ (See, also, Leggatt v. Prideaux, 16 Mont. 205, 50 Am. St. Rep. 498, 40 Pac. 377; State ex rel. Wynne v. Board, 43 Mont. 389, 117 Pac. 77; State ex rel. Ryan v. Board, ante, p. 188, 122 Pac. 569.)
“Misconduct” is defined as “wrong conduct; bad behavior; mismanagement.” The synonyms are: “Misbehavior; misdemeanor; mismanagement; misdeed; delinquency; offense.” The verb “misconduct” is defined: “To conduct amiss; to mismanage.” (Webster’s International Dictionary.)
In effect, this second count charges that, when complaint was made to Bailey by Bollinger that there was an obstruction on a public sidewalk in the city, the officer refused and neglected to do anything in the matter unless Bollinger would procure a warrant for the arrest of the person responsible for the obstruction. The evidence discloses that on Saturday night, September 24, 1910, Fred Bollinger and his brother Adolph were traveling on the sidewalk along Fifth avenue in Helena; that, when in front of the home of Eugene Meyer, Adolph Bollinger fell over a horse block which was placed on the sidewalk, and was greatly injured. The block was of stone, sixteen inches wide, twelve inches high, and thirty-six inches long. Both of these men then went to police headquarters, where they found police captain Bailey and night jailer Brooks. Fred Bollinger made complaint to Bailey, explaining the circumstances of his brother’s fall, and .asked to have the obstruction removed. To this Bailey replied that he could not do anything for Bollinger unless Bollinger would procure a warrant for Meyer’s arrest. It also appears from the testimony that there was in force a police regulation which required that an officer to whom a complaint was made should either remedy the matter to which the complaint related, or, if he could not do so at once, to make a memorandum in the police headquarters in order to inform other officers of the complaint so that it might receive proper attention. Bailey neither gave any attention' to the complaint himself, nor did he make any memorandum or otherwise inform the other officers of the city. It appears that the obstruction remained on the sidewalk until the following Tuesday afternoon, when Bollinger made complaint to the mayor of the city, who had it removed at once. If the testimony of Bollinger and Brooks is to be believed, Bailey treated the complaint with the utmost indifference, if not contempt; and, viewed in the light of this evidence, the accused officer was guilty of misconduct in office or neglect of duty, or both; and we think the count above is sufficient to state either or both of these offenses. It is true that the count does not give in detail the particulars of Bailey’s offense; but he went to trial before the board without asking that it be made more specific, and he will not be heard now to say that it is indefinite or uncertain. (State ex rel. Niggle v. Kirkwood, 15 Wash. 298. 46 Pac. 331.)
It is beside the question to urge that the Trial Board ought not to have found Bailey guilty upon the evidence produced. The board is a tribunal constituted especially to hear and determine complaints against members of the police force. The statute declares: “The decision of the board shall be final and conclusive, and shall not be subject to review by any court, on question of fact.” In State ex rel. Bailey v. Examining & Trial Board, 42 Mont. 216, 112 Pac. 69, this court, after reviewing the statute above, said: “The effect of this provision is that a decision of the Examining and Trial Board on questions of fact is final and conclusive on all courts if there is any substantial evidence to support it. Whether there is or not is a question in the first instance for a district court to decide. A charge without substance is no charge, and a finding without substantial evidence as its basis is no finding. One of the essential requirements of law is that a charge shall be brought against the officer and that such charge shall embody facts sufficient to constitute a cause of action within the meaning of the Act. Another is that, before the charge can be sustained, some substantial evidence must be given in support of it.”
If left to tbe members of tbis eonrt to determine, we might reach a different conclusion upon the evidence; or, if we found the evidence sufficient to sustain the charge, we might be inclined to say that the penalty imposed in this instance was altogether too severe. But the statute has clothed the board with the power to determine the credibility of the witnesses and the weight to be given to the testimony; and likewise it has lodged the power to impose punishment in the mayor (section 3308)', and we cannot substitute our judgment for his.
In People ex rel. Lawson v. Martin, 9 App. Div. 531, 41 N. Y. Supp. 578, a policeman was discharged for leaving his beat and stepping into a saloon. The court expressed the opinion that the penalty imposed was extremely severe, but approved the action of the board in discharging the accused.
In People ex rel. Taylor v. York, 58 App. Div. 621, 68 N. Y. Supp. 1077, a policeman was discharged for being absent from duty three days without permission, and this action was approved by the court. (169 N. Y. 578, 61 N. E. 1133.)
In State ex rel. Hart v. Common Council, 53 Minn. 238, 39 Am. St. Rep. 595, 55 N. W. 118, the court said: “We recognize the prime importance of each department of government avoiding anything like improper interference with the others in the discharge of their functions; also, that while eity councils and other municipal bodies may not have the power to remove from office except for cause, yet, this power being designed to insure efficiency and! fidelity in the discharge of official duty, the degree of ineompetency or inefficiency which amounts to sufficient cause for removal must of necessity, within certain established limits, rest somewhat in the sound discretion of the officer or body in whom the power of removal is vested. We also recognize the fact that while in the exercise of this power their proceedings are quasi judicial, and hence reviewable by the courts, yet they are not courts, but essentially legislative and administrative bodies; and that their action shall be considered in view of their' nature and the purposes for which they were organized, and not tested by the strict legal rules which prevail in trials in courts of law. Hence if such a body bas kept within its jurisdiction, and the evidence furnished any legal and substantial basis for their action, it ought not to be disturbed for any mere informalities or irregularities which might have amounted to reversible error in the proceedings of a eourt. To apply any other rule to the proceedings of such bodies would be impracticable, and disastrous in the extreme to public interests.”
We are unable to agree with counsel for plaintiff that the offense of which he was convicted was trivial in its nature. The character of his conduct is not to be measured by the consequences which actually flowed from it, but as well by the consequences which might reasonably have resulted. The evidence discloses that the obstruction on the sidewalk was a dangerous one; that another party had fallen over it before Bollinger was injured; that though Bailey was notified on Saturday night he gave the matter no attention whatever, and the obstruction was not removed until Tuesday afternoon following, and then not until complaint had been made to another officer, of the city. It is not difficult to imagine that, if in the meantime someone had been seriously injured because of this obstruction, the consequences to the injured individual and possible litigation against the city might fairly have been charged against Bailey’s neglect of duty.
The burden was upon the plaintiff to show that in the proceedings had before the Examining and Trial Board the essential requirements of the law were not complied with, and in this, we think, he failed.
The judgment of the district court is reversed, and the cause is remanded, with direction to dismiss the proceeding.
Reversed and remanded.
MR. Chief Justice Brantly concurs. | [
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PER CURIAM.
Respondent’s motion to dismiss the appeal herein having been heretofore argued and submitted, it is ordered after due consideration that the appeal from the judgment be, and the same is hereby, dismissed at the cost of the appellant. | [
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MR. JUSTICE SMITH
delivered the opinion of the court.
This action was brought to quiet the title to a certain piece of real estate in Butte. On September 2, 1908, Patrick Reid conveyed the property to his wife, Winifred, and on June 22, 1909, Winifred Reid conveyed it to the plaintiff, James Reid, who is her son. On the latter date Winifred Reid was indebted to the defendant in the sum of $1,021.90. On July 22, 1909, an action was commenced on this account and a writ of attachment issued. On August 24, 1909, judgment was entered, and the real estate in controversy was sold to the defendant in partial satisfaction thereof, by the sheriff, upon execution. As a defense to the action, the defendant alleged that the transfer from Winifred Reid to the plaintiff was made “with intent to hinder, delay, and defraud her creditors, including defendant; that said grantee had knowledge of the grantor’s circumstances and knew of her indebtedness to the defendant and of her fraudulent intent and participated in the scheme to hinder, delay, and defraud her creditors; that said transfer was made without consideration, was fraudulent and void, and was made for the purpose of preventing the defendant from collecting its indebtedness against Winifred Reid.” This allegation was put in issue by a reply. Said reply also set forth affirmatively that for many years prior to September 2, 1908, plaintiff earned considerable sums of money, which he gave to his parents, Patrick Reid and Winifred Reid, ‘ ‘ and during all of said times they promised and told this plaintiff that the property described in the complaint belonged to and should become the property of this plaintiff; that during the year 1908 Patrick Reid, father of this plaintiff, died; that prior to the death of said Patrick Reid, to-wit, ’on the second day of September, 1908, the said Patrick Reid, for the purpose of fulfilling the said promise and agreement to this plaintiff, executed and delivered a deed to the said property to Winifred Reid, with the understanding and agreement that the said Winifred Reid was to hold the said property in trust, and to hold the same as trustee of and for this plaintiff; and that Winifred Reid, in pursuance of said agreement and in ful fillment of tbe wish and desire of said Patrick Reid, did on the twenty-second day of June, 1909, make, execute, and deliver to this plaintiff a deed to the said property, and at all times mentioned in the answer plaintiff was and now is the owner, in possession and entitled to the possession of the property.” The cause was tried to the district court, Hon. John B. McClernan, judge presiding, without a jury. Plaintiff appeals from a judgment in favor of the defendant and from an order denying a new trial.
C. J. Kelly, manager of the Hennessy Mercantile Company, called as a witness by the defendant, which assumed the burden of proof, testified in part as follows: “Along in May, 1909, we called Mrs. Reid to the office and told her that the account was entirely too large; that she would have to either secure the account or pay it; her failure to do either would mean that we would bring suit. She said it would be paid; that she had lots of money; that she owned the property and we were not taking any chances. My knowledge then was that she owned this property. She said she would make a large payment on account immediately after the June pay days. That, of course, she failed to do, and later in the month we had to close the account entirely. The June pay days came, about the 15th. For many years prior to that time she also, as payment on the account, turned in the checks of her son, James Reid, and they were always applied on the account.”
Mrs. Reid testified: “I got the title to this property, No. 833 North Montana street, a couple of days before Mr. Reid died. Him and I was talking to each other. Of course, we knew he was going to die, and he didn’t want to let it go through the court. He said, ‘You can fix that with the boy,’ because if it went through the court it would cost more money. He just told me to deed that over to Jimmie when he would demand it. He said he would give it to me and I could do as I liked with it. He says when the boy would demand the house, to give it to him, because he promised him the house since he was twelve years old if he would be a good boy, and he was a good boy; every dollar be earned be brought in to belp raise tbe family. He was twenty-one in April, 1908, and his father died in September, 1908. Jimmie was seventeen when Mr. Reid bought the property. No one was present when I had this conversation I spoke of. I got No. 833 and also No. 835 North Montana street by a deed made by Mr. Canning. I kept this property in controversy in my name until June, 1909, because he never demanded it. Mr. Kelly knew I had the property. I guess that’s why they carried me so much, but I hadn’t it. Jimmie had the property, and his father, too. I guess Jimmie knew I had an open account at Hennessy’s. Some time in July, 1909,1 homesteaded the other place I was living in, the 24th of July. My husband transferred everything to me to give it to James when he demanded it. James was of age when my husband died. I don’t know why he didn’t transfer it to James. I was present when my husband said to James, ‘Now, if you will be a good boy and help me raise those little girls, this will be your house.’ He said that the house would be his when he would be twenty-one, so he could go and sit on the jury. Jimmie said, ‘Yes, I’ll bring you every dollar I earn.’ So he did; every dollar he earned went to Hennessy’s. He gave over $4,700, every dollar by virtue of this agreement. I testified once before that I guessed it was $2,700. I didn’t know how much he gave. The house was worth $1,500. James didn’t demand the house in April, when he was twenty-one. I testified once before: ‘My husband deeded everything over to me to do what was right with the children, so I did; I done what he requested me. ’ I paid $42 taxes on the property in November, 1909, but it was my son’s payment. I guess James paid seven years’ work for the house. No, I don’t think he paid seven. I might make a mistake; I don’t know. He paid me about seven; from the time he was seventeen until he was twenty-one he paid me. I rented the house in June, 1909, to Thomas Brunsdon, for James, who was at work.”
James Reid, sworn for the defendant: “I was between fifteen and sixteen when this agreement with my father was made, in January, 1903. He simply said that if I would turn over my check and help him raise the family, why, that the house would be mine when I was twenty-one. I says, ‘All right.’ It was a little after 6 o’clock in the evening — broad daylight. I was never allowed to control my own earnings. Father never said I could keep the money I earned myself. I paid about $4,900 under that agreement.”
It appears from the foregoing and other testimony in the record — construing the same as favorably as possible for the appellant — that on a day in January, 1903, a little after 6 o’clock in the evening, when it was broad daylight, Patrick Reid informed his son James, in the hearing of Winifred Reid, his wife, that if the son would turn over his pay checks and thus assist in raising the other children, the house and lot would be his when he arrived at the age of twenty-one years. No one else was present. James fully performed his part of the agreement and paid in about $4,900 for property of the value of from $1,500 to $1,800. Although James became of age in April, 1908, he did not demand title to the property' at that time or at any time prior to the death of his father,- on the contrary, he paid into the family exchequer the sum of $710 in the year 1908 after he became twenty-one years old, and between $400 and $500 in the year 1909, prior to June 22. He attempted to explain the payment of $710 by saying that he agreed with his father to make certain repairs on the house. These repairs cost about $450. He also declared that he voluntarily made payments to his mother after the death of his father for the purpose of assisting her and sending his sister to school. On or about September 2, 1908, Patrick Reid, who was about to die, transferred the property and one other house and lot to his wife. Immediately prior to the transfer he had told her to “fix it up with the boy,” to deed the house over to Jimmie “when he would demand it.” He said he would give it to her, and she could do what she liked with it; that he had promised Jimmie the house “since he was twelve years old.” It appears from the testimony of the appellant, however, that he was almost sixteen years old when the alleged agreement was made. No third person was present at the time of the conversation between husband and wife. On September 3, 1908, Patrick Reid died, and Mrs. Reid continued' to hold the title to both pieces of property until some time in May or June, 1909, when Mr. Kelly demanded payment of her account with the Hennessy Mercantile Company, and informed her that, if she did not pay or secure it, suit would be instituted against her. She agreed to make a large payment on or about June 15. Instead of doing so, however, she transferred the house and lot No. 833 to her son, on June 22. On July 22 suit was begun, and two days later she filed a declaration of homestead on house and lot No. 835.
Bearing in mind that this is an equity case and the burden of proving fraud in the transfer from Winifred Reid to James Reid was assumed by the respondent, the only question for de- cisión is, Does the record show a decided preponderance in the evidence against the decision of-the trial court? This court said, in Watkins v. Watkins, 39 Mont. 367, 102 Pac. 860: “In reviewing the evidence the court will start oat with the presumption * * * that the findings are supported by the evidence. It will then endeavor by a fair, unprejudiced, and dispassionate examination of the evidence, to determine whether there is any substantial support for the findings, always bearing in mind that it is not assisted by the presence of the witnesses, and that a witness’ manner and demeanor on the stand might justify a conclusion not at all warranted by a review of the evidence reduced to cold print. If, acting under the guidance of the rule here laid down, we determine that the testimony furnishes reasonable grounds for different conclusions, then we will hold that there is no decided preponderance against the findings and decline to disturb them. ’ ’
In Merchants’ Nat. Bank v. Greenhood, 16 Mont. 395, 41 Pac. 250, Mr. Justice De Witt, speaking for the court, said: “Fraud cannot often be proven by direct evidence. Fraud con ceals itself. It does not move upon the surface in direct lines. It goes in devious ways. We may with difficulty know ‘whence it cometh and whither it goeth.’ It ‘loves darkness rather than light because its deeds are evil.’ It is rarely that we can lay our hands upon it in its going. We are more likely to discover it at its destination, before we know that it has started upon its sinuous course. ’ ’
Mr. Moore, in his treatise on Fraudulent Conveyances and Creditors’ Remedies (volume 2, page 964), says: “The mere fact of relationship between the parties to a transaction which is prejudicial to the interests of creditors does not establish fraud. * * * It is held by the weight of authority, however, that the fact of relationship may cast suspicion on the transaction and lend credence to the claim that it was the result of a conspiracy by or collusion between the parties thereto to defraud creditors, since relations may be presumed to be on terms of intimacy, and to have a natural and strong motive to protect each other at the expense of creditors, and more likely than other persons to lend aid to each other in case of pecuniary difficulty.”
A trial court is not bound to believe all the testimony that it hears. The appearance and demeanor of the witnesses, their manner of testifying, and the probability or improbability of the truth of their statements are all to be considered in connection with the other facts and circumstances in the ease. When the statements of witnesses, although positive, and not directly contradicted by other witnesses, are improbable, contradictory, and inconsistent in themselves, when they relate to alleged transactions with persons who by death or absence are unable to dispute them, when the witnesses are directly and pecuniarily interested in the result of the controversy, and their testimony may furnish the basis for a recovery in their favor, and the attendant circumstances are such as to cast suspicion upon the entire transaction as narrated by them, the court may disbelieve such witness and disregard their testimony. (See Poor v. Madison River P. Co., 38 Mont. 341, 99 Pac. 947.)
Judge McClernan was evidently of opinion that no such agreement with Patrick Reid as that narrated by his wife and son was ever had, that the transfer from Winifred Reid to the appellant was fraudulent and without consideration, and that the latter knowingly participated in the fraud. We find no decided preponderance in the evidence against his decision. The judgment and order are therefore affirmed.
Affirmed.
Mr. Chief Justice Brantly and Mr. Justice Holloway concur. | [
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] |
MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
Plaintiff brought this action to recover damages for a personal injury sustained by him on the night of March 8, 1900, during the course of his employment by the defendant in its coal mine in Carbon county. On a former appeal (31 Mont. 359, 78 Pac. 595) defendant was awarded a new trial because the jury had disregarded certain instructions submitted by the trial court. The present appeal is by the plaintiff, from a judgment entered upon an order sustaining defendant’s motion for a nonsuit.
It appears that at the time of the accident the plaintiff was operating a shearing machine. This machine consists of an electrical motor, with a steel or iron frame about three feet in height projecting horizontally forward sis or seven feet, armed with a cutting device in the form of an endless chain in which are set small picks at short intervals. The chain is so adjusted to a system of wheels that it is carried by the motor along a” bar at the top of the frame, over the front end, and returned along another bar on the lower side. The whole is set on trucks and is moved on a track constructed of iron rails. When it is put in operation, it is moved along the track until the picks are brought in contact with the face of the stratum or vein of coal. Power is then applied by means of the motor. The machine is prevented from “bucking” backward, by a jack set against the rear end and stayed against the roof of the mine. To prevent the machine from “climbing” as the picks dig into the coal, the forward end of the frame is held by clamps secured to iron posts extending from the floor of the mine to the roof on both sides of the frame.. The machine makes a vertical cut into the body of coal, about four inches wide, three feet in height, and to a depth of the length of the frame. Frequently three such cuts are made from the floor, upward; the number depending upon the thickness of the stratum. To make the third cut it is necessary to raise the forward end of the machine and to support it in that position. Its weight is about 1,800 pounds. It is lifted by the operator as circumstances require, by means of a pump-jack, which is supplied with the machine for that purpose. In place of the hardwood handle, about two and one-half feet in length, with which a pump-jack is usually operated, it was the custom of the employees in defendant’s mine to use a sprag — a piece of hardwood about seventeen inches long, turned to a point at each end and intended to be used for blocking the wheels of cars. For want of a handle, the plaintiff was using a sprag at the time he was injured. The teeth or cogs upon the upright bar and upon the sprocket of the pump-jack used by the plaintiff were so worn that, when he raised the shearing machine, they slipped by each other, with the result that the weight of the machine coming suddenly down upon the upright bar threw the sprag upward so that the outer end of it struck the plaintiff in the right eye, destroying it.
Though the allegations of the complaint are broad enough to include in it the charge of negligence by reason of the defective condition of the clamps and posts, and some evidence was introduced with reference to it, it is admitted by counsel for the plaintiff that this condition contributed in no wray to the injury. The same may be said of the sprag. It is not claimed that the failure of the defendant to supply a handle for the pump-jack contributed to the injury. These features of the case may therefore be excluded from consideration. The plaintiff relies upon the charge that the defendant was negligent in furnishing him a pump-jack which was defective, by reason of its worn-out condition. The defendant denies that it was guilty of any negligence, and alleges contributory negligence and assumption of risk by the plaintiff.
Among other assignments of error, we find two based upon rulings of the court in excluding certain items of evidence. These are not referred to in the argument; hence we conclude that counsel for the plaintiff abandoned them as being without merit.
Observing the rule that, in determining a motion for nonsuit, the plaintiff is entitled to have his evidence considered in the light most favorable to him and as establishing every ma- teria.1 fact which it tends to prove (Johnson v. Butte & Superior C. Co., 41 Mont. 158, 108 Pac. 1057), we may summarize the inferences which the evidence tends to justify as follows: (a) That the pump-jack was defective by reason of its worn condition; (b) that its condition was such that, when subjected to the use to which it was intended to be applied by plaintiff, it was likely to cause such an'injury as that suffered by him; (c) that the defendant knew of its condition and that it was likely to cause injury to an employee who attempted to use it, yet that it wholly failed to advise plaintiff of the danger; (d) that the plaintiff did not know its condition and could not know it from such an examination as he was able to give it before he attempted to use it. While conceding that the evidence tends to justify inferences “a” -and “b,” counsel for defendant deny that it justifies inferences “a” and “d.” Calling attention to the fact that the injury complained of occurred during the year 1900, and prior to the enactment of sections 5246 and 5248, Revised Codes, which declare every person operating a mine to be liable for damages sustained by an employee, without fault on his part, when caused by the negligence of a superintendent, foreman, shift boss, etc., they insist that this case must be determined by the rules of the common law governing the relation of master and servant, and that, since it appears that the plaintiff’s injury, if caused by the negligence of anyone, was caused by that of the foreman in charge of the machinemen at the time the accident occurred, the defendant is not liable because, though it appears that the foreman had knowledge of the conditions, he was a fellow-servant, and for this reason his knowledge was not imputable to the defendant. In support of their contention that a foreman in a mine is a fellow-servant, they cite Goodwell v. Montana C. Ry. Co., 18 Mont. 293, 45 Pac. 210; Hastings v. Montana U. Ry. Co., 18 Mont. 493, 46 Pac. 264; Allen v. Bell, 32 Mont. 69, 79 Pac. 582; Thurman v. Pittsburg & Mont. C. Co., 41 Mont. 141, 108 Pac. 588; and Gregory v. Chicago, M. & St. P. Ry. Co., 42 Mont. 551, 113 Pac. 1123. It must be conceded that, in the absence of such legislation as the provisions referred to, the boss of a section gang on a railroad, or a shift boss in a mine, or the foreman of a gang of carpenters engaged in construction work, is a fellow-servant of the men with whom he is employed. Yet, as was pointed out in Gregory v. Chicago, M. & St. P. Ry. Co., supra, whether an employee is a viee- principal or a fellow-servant depends, not upon the grade or rank he occupies among his associates, but upon the character of service he is required to perform. The name or designation given him is not conclusive. If for the time being he is the agent upon whom the employer has cast responsibility for the performance of nondelegable duties, he is, for the time and with reference to such duties, a vice-principal. "Within the sphere of these duties he occupies the position of the employer; and if, for the time being, he is the controlling authority, he is charged with the performance of all the duties of the employer. He must exercise ordinary care to provide a reasonably safe place, reasonably safe and suitable appliances and materials, and reasonably competent fellow-servants. (Monson v. La France C. Co., 39 Mont. 50, 133 Am. St. Rep. 549, 101 Pac. 243.) Incidentally there exists, also, the implied duty of inspection when necessary (Longpre v. Big Blackfoot Milling Co., 38 Mont. 99, 99 Pac. 131); and when the conditions are such that the employer is presumed to have knowledge of them, the same presumption attaches to the vice-principal. So, also, notice to the latter is notice to the employer.
A brief reference to the evidence .will serve to demonstrate that the contention of counsel is not maintainable. The witness Feeley had been in the employ of the defendant continuously from the year 1895. He testified: “In the month of March, 1900, I was night foreman for the maehinemen. Franklin was the superintendent. In the night-time he was seldom around. I had full charge and control of the operations that were carried on in the night-time. There was no one else. I had charge of the machinery. I had charge of assigning men to work and assigning machines to the men for use. I also had authority to hire and discharge men. * * * I knew the pump-jack that was used by the plaintiff the night he was injured. I knew it probably a month before the night he was injured, and I knew that it was in a defective condition. I knew the cogs were worn on the upright bar and the sprocket, and sometimes when it got under a strain — that is, under a lift— that it would slip down. In connection with its slipping in that way, there was danger connected with its operation. When it would slip down, it would catch again and throw the handle that would be in the socket. It would throw the handle up, and there was danger that the handle thus thrown would hit a man in the face or in the body. * * * I made a complaint about it, or rather reported about it to Mr. Franklin, the superintendent, and he said — he told me to send it out and have it repaired. It was not repaired.” This witness also testified that without a careful examination of the pump-jack, by manipulation of it, which would consume considerable time and would require a better light than, was available in the mine, where only miners’ lamps were in use, its defective condition would not be observed. At the request of counsel for the defendant he made an examination, in the presence of the jury, of a pump-jack which was shown to be in the same condition as the one in use by the plaintiff, and made it apparent that the statement that an inspection of it, even in the light of day, unaided by manipulation, would sot disclose its condition. He was corroborated, generally, in his statement by the witness Muldoon, who was in the employ of the defendant as a machine operator until about March 1, 1900. He stated that one could not determine the condition of a pump-jack without testing it, that is, “by lifting a machine with it or lifting a weight.” He knew of the condition of the pump-jack used by plaintiff, had complained of it t-o the shift boss, and had discarded it, being directed by the shift boss to obtain another. The plaintiff was an experienced miner. He testified that, though he had never before operated a shearing machine, he had seen such machines operated; that he had been operating this one about four hours when he was injured; that he did not know of the condition of the pump-jack, not having been informed by anyone with refer- enee to it; and' that he undertook to use it without making examination of it because it was the only one there for him to use. He explained that he attempted to raise the machine because, as it progressed in making the cut, it encountered a hard ‘‘bunch” or deposit of sulphur which caused it to “climb.” Having placed the jack under the machine, he was manipulating it, when the upright bar suddenly slipped back causing the machine to drop, with the result that the sprag was jerked upward from his hand and struck him in the eye.
This partial synopsis of the evidence furnishes ample justification, prima fade, for inferences “c” and “d,” and makes out á case which the court should have submitted to the jury, for if Feeley was for the time being a vice-principal, his knowledge was that of the defendant; or, if it be assumed that he was a fellow-servant, it appears that he had communicated knowledge of the condition of the pump-jack to the superintendent, and it is not disputed that the latter was the representative of the defendant. So that, upon either theory as to the responsibility of Feeley’s position, the defendant was at fault. The plaintiff had a right to assume that the defendant had discharged its full duty with reference to his safety, and it was incumbent upon him, when ordered to his task, to jdeld instant obedience and not consume the time in making tests, examinations, and experiments in order to ascertain whether the appliances furnished him were suitable and safe. (Schroder v. Montana Iron Works, 38 Mont. 474, 100 Pac. 619; Texas & Pac. Ry. Co. v. Archibald, 170 U. S. 665, 42 L. Ed. 1188, 18 Sup. Ct. Rep. 777.) He was not bound to go further than to make such observation as the circumstances permitted in order Jo discover patent, obvious defects. (Stewart v. Pittsburg & Mont. C. Co., 42 Mont. 200, 111 Pac. 723; Rietman v. Stolte, 120 Ind. 314, 22 N. E. 304.)
Counsel for defendant contend, however, that a pump-jack is an ordinary, simple'tool, and that it must be presumed that the plaintiff was as well qualified to judge of its condition as was the defendant. They rely on the rule that if an appli- anee is a simple one, in whieb a defect is apparent or is readily ascertainable by ordinary observation by a person of the age and experience of the particular employee, in the exercise of ordinary care, his means of observation being equal to those of his employer, such employee assumes the risk and cannot recover for an injury resulting from its use. There can be no question as to the soundness of this rule; nor can it be questioned that when an instrumentality furnished to an employee becomes obviously defective because of and during its use, its retention and use thereafter by the servant is at his own risk. (Rietman v. Stolte, supra; Longpre v. Big Blackfoot Milling Co., supra.) But these principles have no application to the facts in this case. As the evidence shows, the defendant had actual knowledge of the defect in the pump-jack. It did not inform the plaintiff of its condition. The defect was not obvious, but could be discovered only by manipulations or tests. The plaintiff’s opportunity for observation, working as he was in the scanty light furnished by an ordinary miner’s lamp, was not equal to that of the defendant. He had a right to assume that the defendant had done its full duty, and hence that it would have informed him of the danger attending the use, if it had knowledge of it. In view of all these considerations, we do not think it ought to be said as a matter of law that the plaintiff is not entitled to recover, even if it be assumed that a pump-jack is a simple appliance. In Stork v. Charles Stolper Cooperage Co., 127 Wis. 318, 7 Ann. Cas. 339, 106 N. W. 841, the ^plaintiff had sued for damages for an injury to an employee, occasioned by using a monkey-wrench which was defective. The defect was not such that it was obvious to one attempting to use the wrench without special examination. After recognizing the rule contended for by counsel for defendant, and also the rule that the employer is exempt from the duty to inspect simple tools, the court said: “While these rules result practically in a relaxation of the master’s duty and liability in the ease of such simple tools, they are not at all in denial of the general underlying principle of the law of negligence that one who neg ligently exposes another to a likelihood of injury is liable therefor, in the absence of consent by such other or of contributory negligence. As stated above, the relaxation of the master’s duty and liability rests on the assumed equality of knowledge and ability to discover the defect complained of. It can have no application to a defect of which the master is actually cognizant, and which, as a reasonable man, he should appreciate is likely to result in injury to one using the implement as it is likely to be used, and which is neither known to* the employee nor of such a character as to be obvious to that observation which may be expected to accompany its use. In such case the general rule of negligence as above stated is fully effective, and the master who knowingly and negligently exposes his employee to a peril unknown to the latter must respond for the damage which results. ’ ’ This statement, we think, embodies the rule applicable here. We have not assumed to determine whether a pump-jack is a simple appliance, because the case presented by the evidence renders this unnecessary.
We are further of the opinion that the evidence does not justify, prima facie, a conclusion either that the plaintiff assumed the risk or that he was guilty of contributory negligence. In either case the proper inference was for the jury to draw under appropriate instructions.
The judgment is reversed, and the cause is remanded, at the cost of the defendant.
Reversed and remanded.
Mr. Justice Smith and Mr. Justice Holloway concur. | [
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] |
ME. JUSTICE SMITH
delivered the opinion of the court.
This is an appeal by plaintiff from an order granting a new trial. She brought her action to recover damages for personal injuries alleged to have been sustained by reason of the negligence of the defendants in running a passenger train upon and against her at a public highway railroad crossing in Yellowstone county. The cause was tried to a jury which rendered a verdict against the defendants. On their motion a new trial was granted.
The facts of the ease as shown by plaintiff’s evidence are substantially these: On December 23, 1909, when sixteen years of age, accompanied by her brother Joseph, who was fifteen years old, she started from her home about twelve miles away, to drive to the city of Billings. They drove a gentle team attached to a top buggy with the curtains down. Joseph did the driving. He was an experienced driver, well able to control the team. Plaintiff wore a coat with a fur collar and a scarf over her ears; a blanket was wrapped around them. It was a cold day. Joseph had his ears muffled by the flaps of his cap. They approached the railroad track from the west at an angle of about forty-five degrees. They could see the track east of the crossing for a long distance without difficulty, but in order to see to the west it was necessary to look around or over the side curtain. When within 240 yards of the track they stopped to adjust the blanket and at the same time Joseph looked around the curtain and saw no indication of an approaching train. Just after they had passed the railroad right of way fence they stopped again for about five minutes within 200 feet of the track. When they first stopped Joseph looked around the curtain for a train and saw none; he said he “took a good look.” As he was about to start again plaintiff said she thought she heard a train and he thereupon pulled the curtain down and looked again but saw no train; or it may be that the second stop was made because plaintiff thought she heard an approaching train. He then started the horses on a jog trot toward the track. They did not stop or look again. The horses slowed up at the track and just as they were upon it plaintiff said, ‘ ‘ There is the train!” Joseph whipped up his team but the locomotive struck the rear wheels of the buggy and plaintiff was thrown out and injured. The train was running at a rate of speed estimated at from forty to seventy miles per hour and no signals of its approach were given. It was a bright day, about 10 o’clock in the morning. From the place where the buggy was stopped the second time Joseph could see at least half a mile to the west, without obstruction to his range of vision. About half a mile from the crossing there was a sugar beet dump, and near the dump were some railroad cars, behind which the train may have been when he looked out the last time. Their father had always warned them to be careful in crossing the track at the place in question. Plaintiff did not look out at all. If the train had been east of the beet dump they could have seen it if they had stopped anywhere from twenty to sixty feet from the track and looked for it.
The court gave the following instruction to the jury: “You are instructed that a child is bound to exercise only the care of those of his own age and understanding, and if you find that the plaintiff and her brother, who was driving the carriage in which she was riding, were children at the time of the alleged injury, and that they exercised such care as a reasonable person of their respective ages would exercise under the circumstances of this case, then neither of them was guilty of contributory negligence wbieb would defeat plaintiff’s right to recover in this action.” We think this instruction correctly stated the law. White’s Supplement to Thompson on Negligence, section 309, thus states the rule: ‘ ‘ The measure of responsibility of a person of immature years for contributory negligence is regarded as the average capacity of others of the same age, intelligence and experience, and this is to be considered with reference to the character of the danger to which he is exposed.”
In view of the immaturity of the plaintiff, we cannot say, considering the precautions which were actually taken to discover whether or not a train was approaching, and all the other facts and circumstances of the case, that she was guilty of contributory negligence as a matter of law, and we think the learned district judge erred in so holding. Whether or not she was guilty of contributory negligence was a question of fact to be determined by the jury; they decided the question in the negative, and that decision should stand so far as that feature of the appeal is concerned.
But it is said that the motion for a new trial was properly granted because the verdict is against law in that the jury manifestly disregarded the following instructions, viz.: “If the injured plaintiff or her brother did look or listen at so great a distance from the crossing as to permit a train then not in sight to reach the crossing at the same time they did, or if they looked or listened at a point where any obstruction prevented a good view of the track, and they had a reasonable opportunity to look at another point before going on the track, from which point they could have seen train No. 2 approaching, in time to avoid being struck by it, then plaintiff cannot recover.” “The duty of the plaintiff to look and listen for an approaching train before passing over the crossing in question was not fulfilled if she looked for the train at such a distance from the track that a train then out of sight might reach the crossing as soon as she did, or at a point where her view was wholly or partially obstructed, if she could have looked from a nearer and unobstructed place.”
Neither of these instructions correctly states the law. They imposed too great a burden upon the plaintiff. If such were the law, a person approaching a railroad track would either be obliged to keep a constant lookout in both directions, or it would be incumbent upon him, in order to avoid the imputation of contributory negligence, to stop, if necessary, and look for a train at the last available point, and at the last moment of time, before crossing the track. The law is that one desiring to cross a railroad track must exercise reasonable care for his own safety. No other burden rests upon him. It is manifest that the jury disregarded these instructions, because the evidence discloses, beyond a doubt, that the plaintiff could have stopped and looked and listened at any point within 200 feet of the track. This she did not do and was not obliged to do; but the court told the jury, in effect, that if she did not do so she could not recover. If the jury had heeded the instruction just quoted, they must necessarily have found for the defendants under the uncontra-dicted testimony. Because, therefore, the verdict is against law, the order appealed from must be affirmed.
The court in its instruction No. 3 directed the attention of the jury to the question whether plaintiff’s brother had reason to believe “that he could reach and cross the track before the arrival of the train.” Upon a retrial this instruction should not be given. There is not any evidence to justify it.
The order is affirmed.
Mr. Chief Justice Brantly and Mr. Justice Holloway concur.
Affirmed. | [
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] |
MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
The Monidah Trust is a corporation organized under the laws of Delaware and transacting business in Montana, Idaho, Washington, California, and elsewhere. James A. Murray is president, and E. L. Chapman, secretary and treasurer. These two individuals, with James E. Murray and W. W. Knox, constitute the stockholders and directors. Of the 10,000 shares of the capital stock, James A. Murray owns 9,988, and each of the other stockholders owns four shares. The corporation was organized about 1904. James A. Murray, James E. Murray, and Chapman are residents of Montana, while Knox is a resident of Delaware. The company maintains offices in Delaware, Montana, and California. On July 29,1908, the plaintiff loaned to the State Savings Bank Realty Company $300,000, and took therefor three promissory notes of $100,000 each, secured by mortgage. While it does not appear affirmatively that the property subject to the mortgages is located in Silver Bow county, apparently it is. The loan was made in Butte. In 1911 the assessor of Silver Bow county apparently took from the records of that county the list of the mortgages and assessed to the plaintiff company solvent credits for the full face value of the notes secured by the mortgages, and the tax for that year was levied upon the amount and returned to the county treasurer for collection. Plaintiff applied to the board of equalization for relief, but was refused. It then tendered to the county treasurer tbe amount of taxes due upon its property in Silver Bow county, exclusive of tbe mortgages; but the tender was refused. The taxes became delinquent, and certain real estate belonging to tbe plaintiff in that county was advertised for sale to satisfy the county’s claim. Upon a verified complaint setting forth the fact that the notes secured by the mortgages, and the mortgages, are owned by the plaintiff, which has its domicile in the state of Delaware, and that the notes and mortgages were never held or kept within the state of Montana during the year 1911, the district court issued an order to show cause and upon a hearing granted an injunction pendente lite. From that order the coúnty and the county treasurer, who are made defendants, appealed.
Counsel for appellants contend that any foreign corporation doing business in this state is liable to taxation upon its solvent credits, so far as the same arise out of business transacted in this state. “Mobilia personam, sequuntur” is a maxim of law as old as the law itself, and while it cannot be invoked merely to shield one from the payment of taxes, the presumption nevertheless attaches that personal property, and particularly intangible personal property, such as credits, has its situs, for the purposes of taxation, only at the domicile of the owner. In Holland v. Commissioners, 15 Mont. 460, 27 L. R. A. 797, 39 Pac. 575, this court said: “But, as said before, the case at bar is not excepted from the general rule that ‘securities, such as mortgages and the like, are deemed to have no situs except that of the domicile of the owner,’ hence are not subject to taxation in this state if the domicile of the owner is without the state.”
It may be conceded, for the purposes of this appeal, that it is within the power of this state to divorce property of this character from the person of its owner and give to it a situs of its own for the purposes of taxation; but the state has not undertaken to do so. The provision of section 7, Article XII, of our Constitution: “The power to tax corporations or corporate property shall never be relinquished or suspended, and all corporations in this state, or doing business therein, shall be subject to taxation for state, county, school, municipal and other purposes, on real and personal property owned or.used by them and not by this Constitution exempted from taxation” — does not do more than announce a general rule applicable to property which is ordinarily the subject of taxation; while section 11 of the same Article indicates clearly that the state was not attempting to do more. That section reads: “Taxes shall be levied and collected by general laws and for public purposes only. They shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax.” Section 2521, Revised Codes, provides: “The property of every firm and corporation must be assessed in the county where the property is situate, and must be assessed in the name of the firm or corporation.”
In Gallatin County v. Beattie, 3 Mont. 173, this court had under consideration the same question now before us, in a somewhat different aspect. In that case the taxpayer was a resident of Lewis and Clark county and held mortgages upon real property situate in Gallatin county. The taxing authorities of Gallatin county sought to subject the credits to taxes in that county, and to this end made the assessment from the records there, just as the assessor of Silver Bow county undertook to do in this instance. But in that case this court held that the mortgages were mere chattels, subject to taxation in the county where actually found; that the records of mortgages were not' the mortgages, but only copies, and since the mortgages themselves were not in Gallatin county, the assessment of them there was void.
Assuming that the domicile of this plaintiff is in the state of Delaware, these credits presumptively have their situs in that state. There is not any evidence in the record that the mortgages were in this state at any time during the year 1911; while the testimony, though not very direct or certain, tends to show that they were not. The' presumption is in favor of their situs in the state of Delaware, and this presumption was not overcome.
But it is insisted that the plaintiff is what is frequently termed a “tramp corporation”; that is, “a corporation which is chartered in one state — usually by the citizens of another state —without any intention of doing business in the former state, but solely to operate in other states.” (Thompson on Corporations, sec. 6632.) And therefore, as respects business transacted in Montana, it should be regarded as a resident of this state and as domiciled here for the purposes of taxation. The evidence, however, fails altogether to support this view. It does not appear who organized the corporation or for what purposes it was created. The mere fact that residents of this state now own the controlling interest in the stock is not sufficient to impeach the good faith of the incorporators or to change the domicile of the corporation to this state. Neither the by-laws of the corporation nor the laws of Delaware were before the lower court, and neither are they before us. The effort to give the corporation a domicile in this state therefore fails, and it cannot be said that the acts of the officers or directors were not fully authorized.
The granting of injunctions pendente lite is so largely a matter of discretion that this court will not interfere unless there is a manifest abuse of that discretion. (Consolidated G. & S. Min. Co. v. Struthers, 41 Mont. 551, 111 Pac. 150; Parrot S. & C. Co. v. Heinze, 25 Mont. 139, 87 Am. St. Rep. 386, 64 Pac. 326, 53 L. R. A. 491; Heinze v. Boston & Mont. C. C. & S. Min. Co., 30 Mont. 484, 77 Pac. 421.)
No error appearing in the record, the order is affirmed.
Affirmed.
Mr. Chief Justice Brantly and Mr. Justice Smith concur. | [
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] |
Opinion:
PER CURIAM.
Upon motion of respective counsel, this cause was advanced and argument heard this day. Upon the hearing the attorney general confessed error. He informed the court that after having examined the record with care, together with the authorities submitted by counsel for defendant, and after consultation with his assistants and the county attorney, he was compelled to arrive at the conclusion that the conviction of the defendant cannot be sustained.
The defendant was informed against, tried and convicted for the crime of uttering a fraudulent check, under the provisions of section 11369, Revised Codes of 1921. He moved for a new trial, which was denied, whereupon he appealed from the judgment and from the order denying him a new trial. Specifically, the defendant was accused of obtaining from another personal property of the value of $655 by the aid of a check drawn upon a bank with the intent fraudulently and feloniously to defraud the other of the personal property; the defendant then and there knowing that he was not entitled to draw the check on the bank for the sum specified. The sufficiency of the information is not questioned.
The check was given in payment for horses purchased of one John Hurni on July 6, 1925. Hurni gave defendant a bill of sale of the horses at the time he received the check. The check was dated July 10, 1925. Hurni knew that the horses were to be shipped east for sale. It is not contended that any facts were concealed from the complaining witness. Hurni knew that the cheek was postdated and that the defendant did not, on July 6, have sufficient money in the bank to meet it; and he testified that defendant said he had written a letter to the bank and by the time the cheek got there it would be all right. There was no misrepresentation of an existing fact. (State v. Bratton, 56 Mont. 563, 186 Pac. 327.) The representation was rather in the nature of a future promise.
The state’s case rested mainly upon the testimony of the complaining witness,, and, viewed in the light most favorable to the state, we are constrained to agree with the attorney general that the conviction for the offense charged cannot be sustained. The gist of the action is the intent to defraud. The defendant’s contention that there is a lack of evidence to show an intent to defraud on his part at the time the check was given is sustained by the authorities. (People v. Wilkins, 67 Cal. App. 758, 228 Pac. 367, and cases cited; Brown v. State, 66 Ind. 85, 8 Ann. Cas. 1068, 76 N. E. 881.)
It is conceded that the state has no further evidence to offer, and, such being the case, a new trial would be useless.
The judgment and order are reversed, and the cause is remanded to the district court of Lewis and Clark county, with directions to dismiss the action. . Remittitur forthwith.
Reversed. | [
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] |
MR. JUSTICE GALEN
delivered the, opinion of the court.
In the year 1910 Joseph R. Silver, Jr., as contractor, constructed certain concrete sidewalks in accordance with plans and specifications within the confines of special improvement district No. 81 of the city of Butte. His work was approved, and he was paid therefor and accepted improvement district bonds, payable on or before ten years after January 1, 1910, with interest coupons attached. In this action the plaintiff, as the assignee of the contractor, seeks recovery from the city of Butte on certain of such improvement district bonds.
In the complaint it is alleged that special improvement district No. 81 was duly and regularly created; that the special improvements to be provided consisted of the construction of concrete sidewalks in front .of the real property embraced within the district; that a contract for the making of such improvements in accordance with the specifications was regularly awarded to Joseph E. Silver, Jr., and by him accepted; that the contractor duly performed the work to be done in accordance with his contract, which was accepted by the city, and thereupon delivery was made to him of special improvement bonds of the district in payment for the work; that “the defendant duly levied an assessment against all the real property within the district for the redemption of the bonds in the year 1911 and subsequent years; that the bonds have not been paid; that the first of the special assessments levied against the property became due in 1911; that the unpaid installments of interest due upon the bonds provided for the payment of interest thereon, and that a large amount of interest became delinquent, and still remains unpaid; that the delinquent assessments are a lien against the real property against which they were levied; that the defendant has failed and° neglected to collect the delinquent assessments against the real estate embraced within the district; and that the plaintiff cannot enforce payment thereof; and, further, that the defendant has failed, neglected, and refused to take up the bonds in full, or pay any interest accrued thereon since January 1, 1920. The bonds of the series involved herein are dated August 3, 1910, and, as shown by the plaintiff’s complaint, recite: “The city of Butte, a municipal corporation, of the state of Montana, hereby promises to pay to J. A. Silver, Jr., or bearer, f>100,. lawful money of the United States, with interest thereon from and after the first day of January, 1910, at the rate of six (6%) per cent per annum, payable annually, principal and interest payable out of special improvement district No. 81 fund, provided for by Ordinances No. 809 and No. 931 of said city, and not otherwise, at the office of the city treasurer of said city. This bond is payable on or before ten (10) years after tbe first day of January, 1910, and is subject to call by the city treasurer of said city whenever there shall be sufficient money in said fund to pay the same, together with all unpaid bonds of the same series of which this bond is one, which are prior to this bond in numerical order, over and above sufficient funds for the payment of interest on all unpaid bonds of said series.”
The bonds in suit are ten in number, aggregating the principal sum of $1,077.63, with interest thereon at the rate of six per cent per annum from January 1, 1920. In the prayer of plaintiff’s complaint, he asks judgment against the city for the amount of the bonds sued upon, together with interest. Issue was joined by the defendant’s answer containing certain admissions and denials of the allegations of plaintiff’s complaint, and affirmatively alleging as reason for the nonpayment of the bonds that “there is not money within special improvement district No. 81 fund with which to pay the same.” The cause was tried before the court without a jury. At the conclusion of the trial the court made its findings in favor of the defendant and against the plaintiff, pursuant to which judgment was regularly entered for the defendant. The appeal is from the judgment.
By testimony introduced upon the trial the plaintiff sustained the allegations of his complaint. It also appears therefrom, without dispute, that the city treasurer now holds to the credit of the improvement district fund the sum of $45.88 available for the payment of the sum due on the plaintiff’s bonds.
Neither from the allegations of the complaint nor from the proof does it appear that the plaintiff has ever resorted to mandamus or other appropriate legal proceedings to compel the city authorities to make collection of the delinquent assessments.
The court found: “That all matters stated in plaintiff’s complaint are true as matters of fact, save and except that defendant failed to make a reasonable effort to collect the assessment and conld have collected the same, and that plaintiff cannot enforce his lien; and the court further finds that the only reason the bonds were not paid is because there is no money in the fund to pay the same, and therefore the court concludes as a matter of law that the plaintiff-is not entitled to the relief prayed for in the complaint; that the plaintiff is entitled to take nothing.; and that the defendant is entitled to have judgment entered in its favor.”
The assignments of error require the determination of but one question, viz., the general liability of the city for the payment of these bonds.
It is apparent that special improvement district No. 81 was created pursuant to the provisions of Chapter III of Article X, sections 3367 to 3429, inclusive, of the Revised Codes of 1907, whereby it is provided, so far as pertinent to this inquiry, as follows:
“3387. Assessments for Curbs, Gutters and Sidewalks. — To defray the cost of curbing, guttering and constructing sidewalks, and keeping the same in repair, the city or town council shall assess the entire cost thereof to the property in front of which said improvement is made. The property occupying a street corner to be assessed for that part of said improvement which is within the street intersection.”
“3399. Levy of Tax. — To defray the cost of making improvements in any special improvement district, the council, shall by resolution, levy and assess a tax upon all property in such district as provided in section 3396 (30) hereof. Such resolution shall contain a description of each lot or parcel of land, with the name of the owner, if known, and the amount of each partial payment, and the date when the same becomes delinquent.”
“3402. Delinquent Assessment. — When one payment becomes delinquent, the whole tax shall become so, and the property shall be sold the same as other property sold for taxes.”
“3411. Tax, When Payable. — The tax, as provided in the preceding sections of this article, must, unless otherwise distinctly specified, be paid within thirty days after its levy, to the city treasurer, who must give a receipt therefor, and in ease of nonpayment the treasurer must proceed to collect the same in the same manner as delinquent taxes are collected on other property. If such tax is not paid within said sixty days a penalty of ten per eent shall be added thereto and collected as a part of the tax.”
“3425. Collection of Delinquent Assessments. Actions by Bondholder. — :If the owner of any parcel, lot or lots of land, liable for the payment of any bond issued under the provisions of this Act, shall fail to pay any assessment or assessments levied in accordance herewith, when due, the owner of any such unpaid bond or bonds may proceed in his own name to collect such assessments, and foreclose the lien thereof in any court of competent jurisdiction, and shall recover, in addition to the amount of such bonds and interest thereon, five per centum, together with the cost of such suit. Any number of holders of such bonds for any single improvement may join as plaintiffs, and any number of owners of property on which said delinquent assessments are a lien may be joined as defendants in such suit.”
“3427. Extent of Lien. — Neither the holder nor owner of any bond issued under the authority of this Act shall have any claim therefor against the city by which the same is issued, except from the special assessments made for the improvement for which said bond was issued.”
The several sections above set forth, excepting the last two, were enacted in 1897 as a part of House Bill No. 204, Laws of 1897, page 212. Sections 3425 and 3427 were adopted by Chapter 75 of the Laws of 1907.
The plaintiff predicates the city’s liability to pay the bonds upon the failure to collect the assessments levied from the property owners for the benefit of the bondholders, and this, notwithstanding the contractual and statutory provisions expressly requiring the holders of the bonds to look for payment from the special improvement district fund alone, relieving the city from any general liability for their payment.
It is argued that it was the city’s duty to collect the assessments under adequate power conferred upon it, and, having failed so to do, it has become liable; and, further, that, if the plaintiff ever did have a right to enforce the lien of the bonds under the provisions of section 3425 of the Revised Codes of 1907, set forth above, it was taken away by Chapter 89 of the Laws of 1913;'it being urged that, although some of the assessments became delinquent prior to the enactment of the last-mentioned statute, yet the plaintiff’s right of action, if any existed, could not accrue until the year 1920, or ten years from the date of the bonds.
Section 27 of Chapter 89, Laws of 1913 (sec. 5251, Rev. Codes 1921), provides in part as follows: “In every city which shall provide by ordinance for the collection of its taxes for general, municipal and administrative purposes by its city treasurer, such city treasurer shall collect all special assessments and taxes levied and assessed in accordance with any of the provisions of this Act, in the same manner and at the same time as said taxes for general, municipal and administrative purposes are collected by him; and all of the provisions of section 3357 of the Revised Codes of Montana of 1907 [5215, Rev. Codes, 1921] shall apply to the collection of such special taxes and assessments in the same manner as such provisions apply to the collection of other city taxes. When one payment becomes delinquent all payments shall, at the option of the city council, by appropriate resolutions duly adopted, become delinquent, and the whole property shall be sold the same as other property is sold for taxes.”
Section 5215, Revised Codes of 1921, referred to in the section last quoted, was enacted as a part of House Bill No. 213 of the Laws of 1897, and has since been carried forward without amendment. It provides that, where city treasurers are required to collect city taxes, they shall possess the same power as county treasurers to seize and sell property for delinquent taxes, give deeds to purchasers, and do everything that a county treasurer might do in the premises. The Act of 1913 above alluded to makes specific repeal of all of the sections of the Revised Codes of 1907 above set forth, including section 3425. The plaintiff insists that the later enactment is applicable, it being within the power of the state to adopt new remedies for the collection of the taxes even while they are in process of collection, and, consequently, that the city is required to make collection of the taxes as required by the statute, and, having failed to do so, is primarily liable. Many decisions of the courts of other states are cited by the able counsel for the plaintiff in an elaborate brief filed by them, but we cannot agree with their contention that the city may be held responsible for the payment of the bonds under the conditions stated. The plaintiff was not deprived of remedy by the later enactment.
It is settled in this state beyond question that a city may exercise only such limited authority as has been expressly delegated to it by statute or is necessarily implied therefrom. (State ex rel. City of Billings v. Billings Gas Co., 55 Mont. 102, 173 Pac. 799; Shapard v. City of Missoula, 49 Mont. 269, 141 Pac. 544; Helena L. & Ry. Co. v. City of Helena, 47 Mont. 18, 130 Pac. 446.)
There appears to be much conflict in the authorities, but, whatever may be the views expressed by other courts under like circumstances, we are of the opinion that the bondholder is bound by the law existing when the bonds were issued and as well by the terms of the contract as respects the method of payment. In language clear and unambiguous it is provided by the statute that “neither the holder nor
owner of any bond issued under the authority of this Act, shall h<we any claim therefor against the city by which the same is issued”; and pursuant thereto the bonds recite that they are payable “out of special improvement district No. 81 fund, * * ® and not otherwise * * =s whenever there shall be sufficient money in said fund to pay the same.” The enactment of the statute in 1913 in no manner affected the general liability of the city for the payment of the bonds, and the provisions thereof are without application in the decision of the question before us. The primary liability of the city in this proceeding is dependent alone upon the statute authorizing the bonds as it existed at the time they were issued ánd the language employed in the bonds. The Code provisions of 1907, above set forth, were in force when the bonds were authorized and issued, and the subsequent change in the law did not affect the city’s general liability to pay the bonds (Merriam v. People, 160 Ill. 555, 43 N. E. 705), although the extent of the bondholders’ remedies was reduced.
In 6 Ruling Case Law, 325', 326, the author says: “Conformable to the well established rule that the laws which subsist at the time and place of making a contract, enter into and form a part of it, as if they were expressly referred to or incorporated in its terms, the obligation of a contract is measured by the standard of the laws in force at the time it was entered into, and its performance is to be regulated by the terms and rules which they prescribe.” To the same effect, see, also, City of Cincinnati v. Public Utilities Com., 98 Ohio St. 320, 3 A. L. R. 705, 121 N. E. 688.
“The levying and collection of assessments for local improvements is a purely statutory proceeding and in derogation of the common law. It is a general rule that, where a statute creates a new right and prescribes a remedy therefor, the remedy is exclusive. This principle applies to statutes which give the power to municipal or other public corporations to levy assessments for local improvements and which provide for their collection. Hence it follows that no other liability can exist in respect to an assessment than that prescribed by the statute.” (25 R. C. L. 172.)
“When the charter or statute authorizing the improvement, or an express stipulation in the contract, provides that the contractor shall be remunerated from the proceeds of an assessment on the property benefited and shall look only to the assessment as the source of payment, or when the city charter .provides no other means to pay the contractor than the proceeds of the assessment as it is collected, there is no liability in the city to the contractor other than to make and collect the assessment and pay it over, unless the city fails in some duty it owes to the contractor connected with the levy and collection of the assessment. Upon the receipt of the assessment the city becomes liable to the contractor as for money received to his use.” (2 Dillon on Municipal Corporations, 5th ed., sec. 827.)
A very valuable and comprehensive note reviewing many of the authorities with respect to the general liability of a city in instances arising under circumstances similar to the case under consideration will be found appended to the case of Ward v. Lincoln, 32 L. R. A. (n. s.) 163 (87 Neb. 661, 128 N. W. 24). Enlightening cases dealing with the question are Banaz v. Smith, 133 Cal. 102, 65 Pac. 309; Davies v. Los Angeles, 86 Cal. 37, 24 Pac. 771; Rhode Island Mtg. Co. v. Spokane, 19 Wash. 616, 53 Pac. 1104; Northwestern Lumber Co. v. Aberdeen, 20 Wash. 102, 54 Pac. 935; German-American Sav. Bank v. Spokane, 17 Wash. 315, 38 L. R. A. 259, 49 Pac. 542; Thomas v. Olympia, 12 Wash. 465, 41 Pac. 191 (holding that after an agreement that warrants should be paid from a special fund the contractor could not recover from the city for the negligence of its officers in failing to raise the fund); Wilson v. City of Aberdeen, 19 Wash 89, 52 Pac. 524; State ex rel. National Bank of Tacoma v. City of Tacoma, 97 Wash. 190, 166 Pac. 68; Hoyt v. Fass, 64 Wis. 273, 25 N. W. 45; Pontiac v. Talbot Paving Co., 96 Fed. 679, 37 C. C. A. 556; White River Savings Bank v. City of Superior, 148 Fed. 1, 78 C. C. A. 169.
Primarily, the city of Butte incurred no personal liability to the contractor who did the work. It was merely constituted an instrumentality of the law in initiating and carrying out the improvements and in collecting the money due upon assessments made by it against the property benefited in order to pay the obligations incurred in execution of the work. (Town of Windfall City v. First Nat. Bank, 172 Ind. 679, 87 N. E. 985, 89 N. E. 311.)
The plaintiff, because of his. interest in having the obliga tions paid, was required to know that which was being done or left undone in the premises by the city treasurer, and was afforded ample remedy under the law to compel the city treasurer to follow the mandates of the statute in the subjection of property embraced within the improvement district to the payment of the assessments levied. Consequent to the nature of the bonds and the law authorizing their issuance he had a special interest in seeing that the city treasurer made collection of all delinquent assessments within the improvement district or subjected the property benefited to sale where the owners thereof had failed to pay the tax, whereas the general taxpayers would, in most instances, be entirely oblivious of the failure of the city treasurer to perform his simple duty in this respect and of possible consequences. Being in possession of all the facts, and directly affected by the inaction of the city treasurer, the plaintiff could have instituted proceedings at any time to compel the city treasurer to perform his duty after the assessments became delinquent; whereas ordinarily the general taxpayers would be in entire ignorance of the conditions existing. The property embraced within the special improvement district being liable for the payment of the assessments levied, and the bondholder being possessed of full knowledge of such fact by reason of the language clearly expressed in the statute and by the terms of the bond, there rested upon him a duty greater than upon the general taxpayer to compel the city treasurer to act. The plaintiff was chargeable with knowledge of the nature and terms of the city’s obligation with respect to the bonds, and to now permit him to hold the general taxpayers responsible because of the neglect of duty on the part of the city treasurer would be manifestly unjust. (Wilson v. City of Aberdeen, supra.)
Season in support of our conclusion is well stated by Mr. Chief Justice Scott, speaking for the supreme court of Washington in German-American Savings Bank, v. Spokane, supra, which we take the liberty of adopting: “The question goes much beyond the interests at stake here, and hardships are bound to result however the principles are settled. On the one hand, we have the rights of the general city taxpayer to consider; he may have paid like assessments with reference to his own property, and it is certainly a hardship to call upon him to make good a failure on the part of some other property1 holder to pay such an assessment, especially where the threatened burden is so excessive, in view of the high rule of property valuations prevailing in assessing for tax levies, and the liberal public debt limits allowed. In some instances it would come near the confiscation of his property. It is not a satisfactory answer to such a man to say that he must be bound by the negligence of men elected to act in a governmental capacity over a town wherein he may be residing, for it leaves him small chance of escape. * * * On the other hand the warrant holders have parted with value for these obligations, either in performing the work, where the warrants are held by the original parties, or in the amount paid for purchasing them, in the case of subsequent holders. As a matter of justice they are entitled to payment, and we have their interests to consider. * * * After all that can be said and done, however, as a matter of right and law, where one of two parties must suffer, the loss should fall upon the one who has had the best opportunity to protect himself and is the most at fault. * * s While perhaps such general taxpayer might have compelled the city officers to act after the work was done, and the danger of loss to him imminent, the contractor or warrant holder had this same right, and the courts have all the time been open to him. By force of the contract such officers should be held to be more directly his agents or representatives than the agents of the general taxpayers for the purposes of the assessment, if they were such taxpayers’ agents at all in the premises. By the contract the contractor has in effect adopted the machinery provided for raising his money through the acts of such officers.” (See, also, Broad v. City of Moscow, 15 Idaho, 606, 99 Pac. 101.)
Rehearing denied February 23, 1926.
Since the plaintiff seeks to hold the city primarily liable — ■ wholly independent of moneys held by the' city treasurer to the credit of the special improvement district fund — he cannot in this action recover the sum of $15.88 shown to be now available for the payment of the bonds.
The judgment is affirmed.
'Affirmed.
Me. Chief 'Justice Callaway and Associate Justices Holloway, Stark and Matthews concur. | [
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] |
MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
On September 5, 1925, Charles E. Manning made affidavit that he had reason to believe, and did believe, that intoxicating liquors were unlawfully possessed and kept for sale by Howard Baracker at a certain barn (particularly described) in Poplar, Roosevelt county, Montana, and that the reason for his belief was that on the night of September 4, 1925, he “personally saw a keg containing intoxicating beverages in said barn,” etc. Upon this affidavit the justice of the peace before whom it was made issued a search-warrant, which was duly executed. The sheriff in his return recited that he searched the designated premises and seized therein “one five-gallon keg nearly full of moonshine, 12 whisky glasses, 1 jug, 1 glass bottle, 1 tin cup.” On September 10 an information was filed charging Baracker with the unlawful possession and sale of intoxicating liquor. Timely application was made to suppress the evidence secured by the search and, when the application was denied, this proceeding was instituted to prohibit the use of the evidence.
The only questions presented are: (1) Does the record disclose that the county attorney consented to the issuance of the search-warrant, and (2) does the affidavit state facts sufficient to show probable cause?
1. Section 11071, Revised Codes of 1921, as amended by Chapter 116, Laws of 1923, provides that upon a proper showing a justice of the peace “may, with the approval of the county attorney, issue a search-warrant,” etc. This is the only reference to the subject to be found in the law; but since a justice of the peace court is one of limited jurisdiction, the fact that such approval was given must appear affirmatively from the record. (State ex rel. Skrukrud v. District Court, 71 Mont. 570, 230 Pac. 1089.)
It will be observed that although the statute- requires that the approval be obtained before the warrant is issued, it is altogether silent as to the manner or form in which the fact of approval must be made to appear. Under these circumstances the courts are not authorized to say that it must be made to appear in a particular form or manner, if it appears from the record at all. In this instance the justice of the peace recited in the warrant that the county attorney had given his approval, and in the absence of any statutory requirement that the fact should be evidenced in a different form or manner, it must be held that the recital is sufficient, prima facie, to establish the fact.
2. The statute above requires that the affidavit for a search-warrant must state the facts upon which the affiant’s belief is based; however, the statute does not add anything to the law as it existed theretofore. Without it, the same rule would be invoked in virtue of the provisions of the Constitution. (Art. Ill, see. 7.)
It is elementary that probable cause for issuing a search- warrant must be made to appear to the magistrate who is called upon to issue the warrant; that the affidavit must state facts sufficient to justify the issuance of the warrant, and that an affidavit which states only conclusions, however positively stated, is not sufficient. This is the rule in this state, now too firmly established to be open to further controversy. (State ex rel. Samlin v. District Court, 59 Mont. 600, 198 Pac. 362; State ex rel. Thibodeau v. District Court, 70 Mont. 202, 224 Pac. 866; see, also, Thorpe on Prohibition and Industrial Liquor, sec. 776; Cornelius on Search and Seizure, sec. 90.) But it is • frequently .a difficult matter to distinguish between a statement of an ultimate fact and a statement of a conclusion, or to determine in any given instance whether a particular statement belongs to one class or the other. The test usually employed is this: C'ould the affiant be prosecuted for perjury if the statement is false?
Speaking generally, perjury can be predicated only upon a false statement of a material fact made under oath (sec. 10878, Rev. Codes). If, then, a charge of perjury could be maintained against Manning-if his statement, “I personally saw a keg containing intoxicating beverages in said barn,” is untrue, it is because the statement is one of fact, as distinguished from a mere conclusion. It could not be disputed that if the statement is one of fact, the fact is material. (21 R. C. L., p. 259.) The statement does not disclose the means employed by Manning to ascertain that the keg contained intoxicating beverages; in other words, the affiant does not tell whether he smelled or tasted the contents of the keg, but he does swear positively that on the night of September 4, 1925, he personally saw a keg containing intoxicating beverages in the barn occupied by the accused. If this statement is untrue, we are of the opinion that a charge of perjury could be predicated upon it, — that is, that it is a statement of an ultimate fact, as distinguished from a mere conclusion.
In Neal v. Commonwealth, 203 Ky. 353, 262 S. W. 287, the affidavit was in the following form: “The affiant states that he- knows that intoxicating liquors ai’e sold and possessed at said soft drink stand. ’ ’ It was held that -this is a statement of an ultimate fact which meets the test referred to above.
In State v. Quartier, 114 Or. 657, 236 Pac. 746,. the affidavit was to the effect that there is in the possession of Albert and Nettie Quartier at a designated place in Portland, a still worm, mash and intoxicating liquors. In disposing of the same contention as that made in the case before us, the supreme court of Oregon said: “The affidavit in question contains a concrete statement of facts, and does not consist of conclusions of law.” These cases are in harmony with the decision of this court in State v. English, 71 Mont. 343, 229 Pac. 727.
From the recital in the Manning affidavit the justice of the peace found that there was probable cause for issuing a search-warrant and the warrant was issued accordingly.
The test for determining what is probable cause has been announced repeatedly. In Carroll v. United States, 267 U. S. 132, 39 A. L. R. 790, 69 L. Ed. 543, 45 Sup. Ct. Rep. 280, the supreme court said: “If the facts and circumstances before the officer are such as to warrant a man of prudence and caution in believing that the offense has been committed, it is sufficient.”
In Dumbra v. United Slates, 268 U. S. 435, 69 L. Ed. 1032, 45 Sup. Ct. Rep. 546, the same court said: “In determining what is probable cause, we are not called upon to determine whether the offense charged has in fact been committed. We are concerned only with the question whether the affiant had reasonable grounds at the time of his affidavit and the issuance of the warrant for the belief that the law was being violated on the premises to be searched; and if the apparent facts set out in the affidavit are such that a reasonably discreet and prudent man would be led to believe that there was a commission of the offense charged, there is probable cause justifying the issuance of a warrant.”
The question now arises: Does the ease before us meet the test prescribed above? In the very nature of things there cannot be any hard-and-fast rule by which to determine what facts or circumstances ought or ought not to warrant a man of prudence and caution in believing that an offense has been committed. [Every case must be decided upon its own facts and circumstances, and facts deemed sufficient by one court may not satisfy another tribunal of equal dignity and authority. Indeed, the decided cases disclose the conflicting views entertained by different courts upon this subject. (Cornelius on Search and Seizure, sec. 83, note.)
In each of the following eases we omit the formal parts of the affidavit and as well the description of the premises:
In United States v. Friedman, 267 Fed. 856, the affidavit stated that at a certain time the affiant purchased from the accused intoxicating liquor containing one-half of one per centum or more of alcohol and that he paid therefor a named price. Concerning these recitals the court said: “These are facts, and upon such facts the commissioner could find probable cause to believe that an offense against the National Prohibition Act had been committed.”
In Boehm v. United States, 6 Fed. (2d) 497, the affidavit contained these recitals: “In certain premises in possession of Louisa Boehm and Joe Boehm * * ® there is located certain illicit stills or distilling apparatus designed and intended to be used * * * for distilling intoxicating liquor; coils, unions, condensers, mash intended to be used or fit for distilling intoxicating liquor and certain vessels and utensils in which intoxicating liquor is kept and stored.” In disposing of the question of the sufficiency of the affidavit the court remarked: “These are positive statements .which we deem sufficiently definite and circumstantial to authorize the commissioner to issue the warrant.”
In Walters v. Commomvealth, 199 Ky. 182, 250 S. W. 839, the affidavit stated that “affiant personally saw John Walters carry a basket of bottles of whisky from same, to-night, and knows that intoxicating liquor is possessed and sold at residence and premises No. 926 South Limestone Street, being the premises of Collis Walters,” etc. This affidavit was held to be sufficient.
In Alvey v. Commonwealth, 199 Ky. 655, 251 S. W. 856, the affidavit stated that affiant “has been in and on said premises and has seen said Chas. F. Alvey in possession of intoxicating liquors on said premises and has seen him make sales of said intoxicating liquors.” These recitals were held to be sufficient to show probable cause.
In Neal v. Commonwealth, the affidavit copied above was held to be sufficient.
In State v. Smith (Okl. Cr.), 235 Pac. 273, the affiant stated that at the time the affidavit was made, certain intoxicating liquors were being manufactured, sold, bargained, given away and otherwise furnished and kept for the purpose of being sold, bargained and given away in violation of the law; then followed a description of the liquors, a description of the premises and the statement that the true name of the offender was unknown to the affiant. The court held this affidavit sufficient.
In State v. Quartier above, the affidavit there considered was held to state facts sufficient to show probable cause.
In Steele v. United States, 267 U. S. 498, 69 L. Ed. 757, 45 Sup. Ct. Rep. 414, the affidavit stated: “I saw a small truck driven into the entrance of the garage, and I saw the driver unload from the end of the truck a number of cases of stenciled whisky; they were the size and appearance of whisky cases, and I believe that they contained whisky,” etc. This affidavit was held to be sufficient to justify the issuance of a search-warrant.
In State v. English above, this court held sufficient an affidavit which stated that “on the seventh day of March, A. D. 1924, he [affiant] purchased intoxicating liquors from Jay English. ’ ’
In State v. Gardner, 74 Mont. 377, 240 Pac. 984, the affidavit by Mrs. Dermid recited: “That on or about the third day of January, 1925, she saw intoxicating liquor in the possession of one Prank Gardner and Mrs. Prank Gardner in the following described premises [particularly describing them], and which said intoxicating liquor was then and there unlawfully manufactured and sold by the said Prank Gardner and Mrs. Prank Gardner, and that affiant at the same time and place saw intoxicating liquor sold by the said Frank Gardner and Mrs. Frank Gardner in the dwelling-house hereinbefore described. Affiant saw then and there jugs and bottles containing intoxicating liquors delivered by said Gardners to other persons and money as consideration therefor given to the Gardners.” This court held that the facts disclosed were “sufficient to convince the judge * * * that probable cause existed to believe that Gardner had violated the liquor laws on January 3,” but that those facts alone did not disclose probable cause for believing that a like offense was committed on January 28, the time the affidavit was made. (See, also, State v. Rice, 73 Mont. 272, 235 Pac. 716.)
Upon principle, we are unable to distinguish any of those cases from the ease now before us. The same reasoning which justified the conclusion reached in each one of them justifies our conclusion that the affidavit before us is sufficient. Accordingly the proceeding is dismissed.
Dismissed.
Mr. Chief Justice Callaway and Associate Justices Stark and Matthews concur. | [
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] |
MR. JUSTICE MATTHEWS'
delivered the opinion of the court.
Application of the state, on relation of Francis D. Jones, a taxpayer, to have this court, in the exercise of its original jurisdiction, declare that the proceeds of the state tax levy provided for in section 2148, Revised Codes of 1921, to the extent of one and one-half mills thereof, shall be used exclusively for the support, maintenance and improvement of the four teaching units of the University of Montana, and to perpetually enjoin and restrain the defendants, as members of the state board of examiners, from using any part of the same for any other purpose, and from paying certain claims, by the board approved and ordered paid, from the proceeds of such portion of the state levy for the fiscal year beginning July 1, 1925, and ending June 30, 1926.
From this application it appears: That, prior to the enactment of the above section, the state tax levy was fixed by the provisions of section 9' of Article XII of the state Constitution, as follows: “The rate of taxation on real and personal property for state purposes, except as hereinafter provided, shall never exceed two and one-half mills on each dollar of valuation; and whenever the taxable property of the state shall amount to six hundred million dollars ($600,-000,000.00) the rate shall never exceed two (2) mills on each dollar of valuation, unless the proposition to increase such rate, specifying the rate proposed and the time during which the rate shall be levied shall have been submitted to the people at the general election and shall have received a majority of all votes cast for and against it at such election. * ® * ”
That in the year 1920 the value of the taxable property of the state had passed the $600,000,000 mark. That certain persons or groups of persons connected with and interested in higher education in the state conceived the idea of increasing the tax levy authorized to three and one-half mills, of which one and one-half mills should be devoted to the purposes named in a measure to be submitted. All necessary steps were taken for the initiation of such measure under the provisions of section 1 of Article Y of the Constitution, and the measure was duly submitted to the people at the November general election in 1920. The measure received a majority of all votes cast for and against it in said election and became effective December 6, 1920. It now appears as section 2148, Revised Codes of 1921, above referred to, and reads as follows: “The rate of taxation on real and personal property for state purposes for each year for a period of ten years, beginning with the year 1921, shall be increased one and one-half mills on each dollar of valuation, and the legislative assembly is authorized and empowered to levy a tax for state purposes for each of said years of not exceeding three and one-half mills on each dollar of valuation for state purposes, and all money derived from one and one-half mills of. such levy for each of such years shall be appropriated by the legislative assembly for the support, maintenance and improve ment of the State University at Missoula, the State College of Agriculture and Mechanic Arts at Bozeman, the Montana State School of Mines at Butte, and the Montana State Normal College at Dillon, now comprised in the University of Montana.”
The title of the bill resulting in this section reads as follows: “A bill to enact by the initiative a law to increase the rate of taxation on real and personal property for state purposes one and one-half (1%) mills on each dollar of valuation for a period of ten years, beginning with the year 1921, and to authorize and empower the legislative assembly to levy a tax for each year during such period of not exceeding three and one-half (3^) mills on each dollar of valuation, and to appropriate the money derived from one and one-half (1%) mills of such levy for each year during such period for the support, maintenance and improvement of the institutions now comprised in the University of Montana.” (See Laws 1921, p. 700.)
For the fiscal year mentioned above the Nineteenth Legislative Assembly levied a tax of three and one-half mills, and in making its appropriations for said year, appropriated approximately the estimated receipts from one and one-half mills thereof to the four institutions named in the section, and in addition thereto appropriated substantial sums from the general fund of the state for the maintenance of the state agricultural experiment station and substations and for the agricultural extension service.
It further appears that in 1925 the state board of examiners declared that, in the judgment of the board, the agricultural experiment station and the agricultural extension service are parts of the agricultural college, and entitled to share in the one and one-half mill portion of the state levy, and declared that the expenditures of the combined units of the University of Montana, as the same was, in their judgment, constituted, would be confined to the receipts from such one and one-half mills on each dollar of valuation. Pursuant to this resolution, in December, 1925, the board audited and allowed one claim against the experiment station and one against the extension service, and ordered the state auditor to draw warrants therefor, payable out of the said receipts from the one and one-half mill levy, which was kept in a separate account by the state treasurer. This application resulted. Further pertinent facts will sufficiently appear from the discussion of the questions raised.
On the filing of the application an order to show cause was issued out of this court. In response to the order the defendants filed herein a motion to quash the same upon the grounds and for the reason stated that the complaint does not state facts sufficient to. constitute a cause of action or to entitle the plaintiff to the relief demanded. On January 18, 1926, the matter was fully presented to this court and submitted for its decision.
The attorney general, appearing for all of the defendants, contends in support of the motion to quash:
(1) That section 2148 constitutes an amendment to section 9, Article XII, above, and is therefore void as a violation of section 9 of Article XIX of the Constitution.
(2) That the title to the Act contains two subjects and therefore violates section 23 of Article Y of the Constitution.
(3) That the Act appropriates money in violation of the constitutional inhibition contained in section 12 of Article XII of the Constitution.
(4) That the agricultural experiment station and the agricultural extension service are parts of the agricultural college, and that all of the institutions named comprise the University of Montana.
(5) That appropriations for the University of Montana are limited to the receipts from the one and one-half mill levy, and, as the total appropriations mentioned are in excess of those receipts, the appropriation measures are void as contravening section 12 of Article XII of the Constitution.
(6) That the board of examiners had the power and authority to scale the appropriations and thus limit the expendí tures of the University of Montana to the funds available for its support and maintenance.
1. Section 9, Article XIX of the Constitution, invoked by defendants, reads in part: “Amendments to this Constitution may be proposed in either house of the legislative assembly, and if the same shall be voted for by twu-thirds of the members elected to each house, # * * shall be submitted to the qualified electors of the state for their approval or rejection,” etc.
In reserving to themselves power to propose laws, the people expressly excepted “laws for the submission of constitutional amendments” (sec. 1, Art. V, Const.), and, had they not done so, the above mandatory direction as to how such amendments shall be proposed and made would be sufficient to prevent the people from amending any section of the Constitution without the same being first proposed in one or the other house of the legislative assembly and receiving a two-thirds majority vote in each • of said houses before its submission to the people. As this was not done in the instant case and the initiative measure changed the rate of taxation, the attorney general contends that the Act did amend the Constitution, or attempted to do so, and is therefore void.
Had section 9 of Article XII merely provided that the rate , of taxation “shall never exceed two and one-half mills; and whenever the taxable property of the state shall amount to * * * $600,000,000.00 * * * the rate shall never exceed two mills,” or, in other words, had the Constitution thus fixed a flat rate of taxation, section 9, Article XIX, above, would apply, and any attempt on the part of the people to change such rate without invoking the machinery provided for amending the Constitution would have been futile.
No direction as to how an amendment to this provision of the Constitution could be effected was necessary, as section 9 of Article XIX above amply provided for all amendments, and had the framers of the Constitution intended to declare that an amendment was necessary in order to change the rate of taxation, they would have merely left the matter silent on the subject, as they did in each instance where an amendment is required. Instead of doing so, a proviso was affixed to the section requiring a submission of the intended increase to the people. While the phrase, “submitted to the people,” is the same as that contained in section 9 of Article XIX, section 9 of Article XII is silent as to any action to be taken by the legislature in so submitting the matter, other than the denial to the legislature of the right to increase the rate without submitting the proposition to the people.
Section 1 of Article Y of the Constitution provides: “The legislative authority of the state shall be vested in a legislative assembly, * * * but the people reserve to themselves power to propose laws, and to enact or reject the same at the polls, except as to laws relating to appropriations of money, and except as to laws for the submission of constitutional amendments, and except as to local or special laws *„ * * independent of the legislative assembly.”
Statutes enacted by the people directly under the initiative are of equal dignity with those passed by the legislative assembly (State ex rel. Evans v. Stewart, 53 Mont. 18, 161 Pac. 309); the power to legislate, exercised in either manner, is plenary (In re Pomeroy, 51 Mont. 119, 151 Pac. 333), and no distinction in this regard is made between the two methods of enacting laws in this state. (State ex rel. Goodman v. Stewart, 57 Mont. 144, 187 Pac. 641.)
It was therefore immaterial whether the “submission to the people” of the proposed increase in the rate of taxation was effected by authority of prior legislative direction, resolution, or enactment, or by the initiation of the Act by the people under their reserved constitutional power to legislate independent of the legislature; if it, in all respects, complies with the constitutional requirements of a valid enactment, it became the law of the state.
2. The title to the initiative measure under consideration declares the purpose of the bill to be to “increase the rate of taxation * * # for state purposes one and one-half mills for a period of ten years * * * and to authorize the legislative assembly to levy a tax for each year of said period of not to exceed three and one-half mills and to appropriate the money derived from one and one-half mills of such levy for each year of said period” to the purpose designated.
Under the second and third contentions of defendants, the attorney general insists that the title advised the people that it was intended thereby to do three things: First, to increase the rate of taxation; second, to authorize the legislative assembly to levy annually not to exceed three and one-half mills on the dollar of valuation; third, to appropriate by the Act itself the proceeds of the one and one-half mills of said levy, or the total increase in the rate, to the purposes designated. So reading the title, the attorney general contends that it violates the unity of title provision of the Constitution (see. 23, Art. Y), and the constitutional exception contained in the reservation of legislative power in the people (sec. 1, Art. Y), and that portion of section 12 of Article XII which declares that “no appropriation of public moneys shall be made for a longer term than two years.”
In construing this Act we must bear in mind the well-known canons of statutory construction, which apply with equal force to initiative measures as to legislative enactments. (State ex rel. Evans v. Stewart, supra.) 'The constitutionality of such an enactment is prima facie presumed, and every intendment is in favor of upholding it unless it appears unconstitutional beyond a reasonable doubt. (State ex rel. Bonner v. Dixon, 59 Mont. 58, 195 Pac. 841; State ex rel. Pierce v. Gowdy, 62 Mont. 119, 203 Pac. 1115; Martien v. Porter, 68 Mont. 450, 219 Pac. 817.)
Where two constructions are possible one of which will result in declaring an Act constitutional and the other unconstitutional, this court will prefer the former. (State ex rel. Northern Pac. Ry. Co. v. Duncan, 68 Mont. 420, 219 Pac. 638.) While legislative construction is not binding on the courts, it is entitled to respectful consideration. (State ex rel. Judith Basin County v. Poland, 61 Mont. 600, 203 Pac. 352.)
Where two or more propositions are contained in a title, if, in the light of common sense, the propositions have to do with different subjects so essentially unrelated that their association is artificial, they are not one, but if they may be logically viewed as parts or aspects of a single plan, the constitutional requirement of unity of subject is met. (State ex rel. Hay v. Alderson, 49 Mont. 387, Ann. Cas. 1916B, 39, 142 Pac. 210.)
The unity of title required by section 23, Article V of the Constitution is served, notwithstanding the existence of many provisions in an Act, where such provisions are germane to the general subject expressed; this rule has been consistently adhered to since the decision in Hotchkiss v. Marion, 12 Mont. 218, 29 Pac. 821.
It is true that the three clauses in the title to this Act are conjoined by the particle “and,” and that after the first and second there appears in the title a comma, but the measure, was designed to carry out the constitutional permission to submit to the people “the proposition to increase the rate, specifying the rate proposed and the term during which' the rate shall be levied” and the purpose to be served.
In construing a statute the court must elicit the purpose and intent of the statute from the terms and expressions employed, if this is possible, calling to its aid the ordinary rules of grammar (Jay v. School District, 24 Mont. 219, 61 Pac. 250), and great weight should not be given to the position of a comma (State v. Pilgrim, 17 Mont. 311, 42 Pac. 856). Under the ordinary rules of grammar, while the particle “and” is used to conjoin two co-ordinate phrases, the chief thought in the sentence may be contained in one phrase thereof, while the thought in the second phrase is subordinate thereto, and in such a sentence it is permissible, in order to give proper em phasis to the chief thought, to change the phrase containing the subordinate thought to a participial phrase; but in reading this sentence, “in the light of common sense,” all that is necessary in order to bring out the true meaning and intention of the people in enacting the measure is to eliminate the comma after the word “valuation”; it would then clearly appear that the chief thought contained in the sentence is that of increasing the rate of taxation one and one-half mills, which is the object of the enactment and the subject matter thereof, and, as a detail, and germane to this subject, the people then authorized the legislative assembly to do two things: First, to' levy annually, during the period named, three and one-half mills; and, second, to appropriate annually during such period the proceeds from one and one-half mills of such levy to the purposes named in the Act.
The legislature has, ever since the Act became operative, given to it this construction, for that body has each year made such levy, and then proceeded to make appropriations for the institutions named, up to the approximate amount of the receipts from one and one-half mills on each dollar of valuation of the property within the state. Under this construction of the measure, which we believe to be, not only the fair and reasonable construction of the language used, but the only construction which can be given that language under the rules above announced, the unity of title is maintained, and no violation of section 23 of Article V of the Constitution occurred.
3. As above construed, the language used in both the title and the body of the Act cannot be said to violate that portion of section 12 of Article XII of the Constitution quoted, for there was no attempt made by the people to “appropriate money” for a period of ten years, or at all; they merely directed the successive legislative assemblies as to how they shall each year during that period appropriate the proceeds of one and one-half mills of the levy made, authorizing that body to make the appropriations for the succeeding two years. Whether this direction to the successive legislative assemblies for the term specified is binding upon those bodies is a question which we need not now decide. The Act by its terms assumes that it will be necessary for such appropriations to be made at each successive session of the legislature, thus leaving all legislative action for that purpose in their hands, and, up to the time of the commencement of this action, each legislative assembly has followed the direction contained in the Act in making appropriations, as will more fully appear hereinafter.
4. The determination of the fourth question presented will require a review of the history of the institutions under consideration.
What is termed “The Greater University” in this state, was created by the enactment of Chapter 92 of the Laws of 1913, now appearing as section 852 of the Revised Codes of 1921, which provided that “from and after the first day of July, 1913, the State University at Missoula, the College of Agriculture and Mechanic Arts at Bozeman, the School of Mines at Butte, and the Normal College at Dillon, and such departments of said institutions as may hereafter be organized, shall constitute the University of Montana.”
It will be noticed that each institution described is referred to as a “university,” “college,” or “school,” and that any further addition to the university shall be but “departments” of these institutions which may be thereafter “organized.” The terms “school,” “college,” and “university” convey the same idea, differing only in grade. Each indicates an institution of learning, consisting of “trustees, teachers and scholars, making up the membership of the institution and representing its active work” — an institution engaged in imparting knowledge to resident students and possessing the right to confer degrees (Northampton County v. Lafayette College, 128 Pa. 132, 18 Atl. 516; Commonwealth v. Banks, 198 Pa. 397, 48 Atl. 277; Yale University v. Town of New Haven, 71 Conn. 316, 42 Atl. 87); a place where a collection of students is contemplated (Stanwood v. Pierce, 7 Mass. 458).
This Act, then, included within the University of Montana those institutions which are now termed “teaching units”; it does not mention any “departments” of these schools, colleges, universities, though such then existed, and, if the agricultural experiment station be a department of the agricultural college, it then existed as such,- for it was created prior to the passage of the above Act, as will be hereafter seen, but the Act does provide for the inclusion of departments “thereafter organized.”
Prior to 1913, the “State University at Missoula,” the “College .of Agriculture and Mechanic Arts at Bozeman,” the “School of Mines at Butte,” and the “Normal College at Dillon,” existed as separate and distinct institutions duly created by law, and each had been placed under the supervision and control of the state board of education. For the purpose of this opinion it will be necessary to go further into the history of the agricultural college only, as, if the action of the state board of examiners can be upheld, it is upon a finding that the “agricultural extension service” and the “agricultural experiment station” constitute integral parts of this institution.
The inception of agricultural colleges, agricultural experiment stations, and agricultural extension service is found in the Acts of Congress next noted. In the Compiled Statutes of the United States (1916) the authorization for the creation of these three aids to the industries named is treated under “Title 56-H” with the caption “Agricultural Colleges and Experiment Stations.” The title is then divided into Chapters A and B. Chapter A is entitled “Agricultural Colleges,” but there is included in this chapter those enactments providing for the “co-operation by agricultural colleges, in extension work, with the [U. S.] department of agriculture”; in other words, the extension “service” as we know it. However, in so doing, the chapter first takes up and exhausts the sub ject of the colleges, and then devotes several sections to the extension service. Chapter B deals exclusively with, and is entitled, “Agricultural Experiment Stations.”
Under Chapter A we find that, by an Act of Congress approved July 2, 1862, and subsequent Acts supplemental thereto, the United States granted certain public lands to the several states and territories which might thereafter “establish colleges for the benefit of agriculture and the mechanic arts.” (See see. 8870, Comp. Stats. 1916, and notes thereto.) The beneficiaries of these provisions are declared by Congress to be those colleges “ * * * where the leading object shall be without excluding other scientific and classical studies, and including military tactics, to teach such branches of learning as are related to agriculture and the mechanic arts, in such manner as the legislatures of the states may respectively prescribe, in order to promote the liberal and practical education of the industrial classes in the several pursuits and professions.” On accepting the grant by the establishment of a college or colleges with the above “leading object” in teaching, the state in which such college or colleges shall be established takes the property so granted charged with the duty to devote it to the purposes named in the Acts. (Wyoming ex rel. Agricultural College v. Irvine, 206 U. S. 278, 51 L. Ed. 1063, 27 Sup. Ct. Rep. 613 [see, also, Rose’s U. S. Notes], affirming judgment in 14 Wyo. 318, 84 Pac. 90.)
By an Act approved May 8, 1914 (now sec. 8877a, Comp. Stats. 1916), Congress declared that “in order to aid in diffusing among the people of the United States useful and practical information on subjects relating to agriculture and home economics, and to encourage the application of the same, there may be inaugurated in connection with the college or colleges in each state now receiving, or which-may hereafter receive, the benefits of [the Act of July 2, 1862, and Acts supplemental thereto] agricultural extension work which shall be carried on in co-operation with the United States Department of Agriculture.”
The object ot this “extension work,” in contradistinction to the agricultural colleges (which is to teach certain subjects to pupils or students in attendance), is declared by section 2 of the Act (see sec. 8877b, Comp. Stats. 1916), as follows: “Co-operative agricultural extension work shall consist of the giving of instruction and practical demonstrations in agriculture and home economics to persons not attending or resident in said colleges in the several communities and imparting to such persons information on said subjects through field demonstrations, publications, and otherwise; and this work shall be carried on in such manner as may be mutually agreed upon by the Secretary of Agriculture and the state agricultural college or colleges receiving the benefits of this Act.” The Act then provides for annual appropriations by Congress for this work and the manner in which and by whom such appropriations shall be received and used. The Act is known as the “Smith-Lever Act.”
Chapter B. The establishment and maintenance of agricultural experiment stations was provided for by the Acts of Congress approved March 2, 1887, and March 16, 1906. (See secs. 8878 to 8897, both inclusive, Comp. Stats. 1916.) Section 1 of the Act of 1887 provides that “in order to aid in acquiring and diffusing among the people of the United States useful and practical information on subjects connected with agriculture, and to promote scientific investigation and experiment respecting the principles and applications of agricultural science, there shall be established, under direction of the college or colleges or agricultural department of colleges in each state [established under the Act of July 2, 1862] * ‘ * * ‘a department to be known and designated as an agricultural experiment station.’” The scope of the work of this “department,” differing in nature from that of the “extension service,” but like it disseminated to persons not attending or resident in the colleges, is set forth in sections 8879 and 8880, Compiled Statutes of 1916, and consists in research work and scientific experiments for the purpose of discovering the cause of, and remedy for, diseases in plants and animals, the food values of different products, the composition of soils, etc., and the diffusion of the information thus secured by means of bulletins and publications (see. 8882, Comp. Stats. 1916); the supervision of all such stations is vested in the United States Secretary of Agriculture (sec. 8881, Comp. Stats. 1916). The Morrell Act of 1890 (26 Stats, at Large, 417), amended in 1907 (34 Stats, at Large, 1281 [U. S. Comp. Stats. 1916, sec. 8877]), authorized Congress to make annual cash appropriations in aid of these activities.
In 1893, long prior to the provision made for “agricultural extension service,” our legislature, in order to secure to this state the benefits of the foregoing enactments of Congress, passed an Act entitled: “An Act providing for the location and establishment of the Agricultural College of the State of Montana, and an agricultural experimental station in connection therewith.” (Laws of 1893, p. 171.) Section 1 of this Act established the State College of Agriculture and Mechanic Arts at Bozeman as an institution where resident students should be instructed in those branches of learning set forth in the congressional Act as the “leading object” of such colleges, in the language of the Act of July 2, 1862. By succeeding sections of this Act of 1893, down to section 7 thereof, the legislature then provided for the selection of the site and location of the “college,” its management, organization and equipment, and vested the supervision and control of the college in “the state board of education,” with the immediate direction and control in an executive board of the college, and authorized the state board to accept, in the name of the state, the gifts of land and money provided for in the Acts of Congress mentioned, which “shall be taken and held for the sole use and benefit of said agricultural college and agricultural experiment station.” After fully providing for the “college,” the legislature then, and not until then, provided for the establishment of the “experiment station” by the enactment of sections 7 and 8 of the Act of 1893,
Section 7 reads, in part, as follows: “There is also located and established on the lands so to be selected * * * [as the location of the ‘college’] in connection with said agricultural college, and under its direction an agricultural experimental station.” The purpose of this institution is declared to be as in the Act of Congress directed, and emphasizes the fact that the knowledge and information acquired by research and experiment is to be diffused to the people of the state of Montana in the manner designated, and not to students attending and residing at the college.
Section 8 provides, as does the section referred to the “college” (sec. 3), that this activity “is hereby placed under the supervision and control of the state board of education,” but with the addition, “and the executive or subordinate board or authority who may be by the governor, by and with the consent and advice of said state board of education, appointed.”
It will be noted, however, that Congress has, at least to a certain extent, placed the supervision and control of this institution in the hands of the Secretary of Agriculture of the federal government; we say “to a certain extent,” for, while the title to section 8881, Compiled Statutes of 1916, is “Supervision of Stations by Secretary of Agriculture,” the wording of the section is: “It shall be the duty of the [Secretary] to furnish forms, as far as practicable, for the tabulation of results of investigation or experiments; to indicate, from time to time, such lines of inquiry as to him shall seem most important; and, in general, to furnish such advice and assistance as will best promote the purpose of this Act.” Thus, while the federal government does not seek any part in the control and management of the “colleges” authorized tó be established under the Act of 1862, it does reserve at least an advisory control over the operation of the “experiment stations,” and, with reference to the agricultural extension service, it goes further by placing that activity directly under the supervision and’ control of the Secretary of Agriculture, and declares that its work shall be carried on in such manner as shall be.agreed upon between tbe Secretary of Agriculture and tbe colleges receiving the benefit of the Act, without reference to the state board of education in either instance.
By Chapter 76, Laws of 1913, the legislature designated the treasurer of the executive board of the agricultural college as the person to receive appropriations from the government, and authorized such board to expend the proceeds, but only for those purposes for which the appropriations are made.
In 1915 our legislature provided for the acceptance of the benefits of the Smith-Lever Act (Chap. 19, Laws of 1915), which Act constitutes all that has been done by the state with reference to the “extension service.”
Since the establishment of the experiment station in connection with the agricultural college, certain substations have been established at other points in the state, and the work outlined in the Acts creating such institutions has been carried on under the direction and supervision of the “college” and of the United States Secretary of Agriculture, in the main through experts not connected in any manner with the imparting of knowledge through teaching in the college, but a part of this work is done by teachers employed on the regular college staff, but where such is the case, these teachers receive a salary for the work so performed separate and apart from their salary for teaching, and the lands of the college used by the experiment station are separated from the college proper, and a rental therefor is charged to and paid by the experiment station as part of its maintenance expenses.
In codifying our laws in 1895, 1907 and 1921, those in charge of the work, like the compilers of the statutes of the United States, considered these institutions as separate and distinct, or, at least determined that, for some sufficient reason, the provisions creating them should be separated. Section 1 of the Act of 1893 now appears as section 889, section 7 of the Act as section 891, and the acceptance of the Smith-Lever Act as section 895 of the Revised Codes of 1921.
At each session of the legislature since the creation of these institutions within the state, there has been appropriated a certain sum for the maintenance of each of these institutions established for the purpose of instructing students attending therein, both before and after the creation of “The Greater University,” which appropriations have been made uniformly as parts of one bill, and by separate appropriation bills money has also been appropriated for the support, in part, of those other institutions whose purpose is research and experiment and the diffusion of the knowledge obtained thereby through bulletins, publications, and the like, but not engaged in teaching.
Since the enactment of the initiative measure under consideration, each legislative assembly has likewise made separate and distinct appropriations, after making the levy authorized first, in one appropriation bill to the extent of the estimated receipts from the one and one-half mills of the levy, for the operation and maintenance of the “teaching units of The Greater University”; and second, by a separate appropriation bill for the support of the experiment station and substations and the extension service. Thus the Nineteenth Legislative Assembly first made a three and one-half mill levy for each of the years 1925 and 1926 (Chap. 48, Laws 1925, p. 62), and then proceeded to enact House Bill No. 453 (p. 446, Laws of 1925), entitled, “an Act appropriating money for the operation and maintenance of the teaching units of the Greater University * * * for the period beginning July 1, 1925 and ending June 30, 1927”; the Act designated the four institutions named in .the initiative measure and in the Act creating “The Greater University,” and appropriated to these institutions an aggregate of $688,000 for each of the fiscal years embraced within the above-described period, and upon estimated receipts from one and one-half mills of the levy of approximately $700,000, so that the appropriations thus made fall within the estimated receipts from that portion of the annual levy directed by the measure to be appropriated for the purpose named therein, with barely a safe margin for shrinkage. The legislature then, by a separate appropriation bill (House Bill No. 451, p. 440, Laws 1925), appropriated, for each of said years, $112,323 for the operation and support of the agricultural experiment station, and the sum of $80,560 “for the farmers’ extension work in co-operation with the federal government.” These appropriation bills were both approved by the governor on March 16, 1925.
While no separation of the one and one-half mills from the remaining two mills was made in the levy by the legislature, this separation was made by the appropriations made from the receipts, and we are informed by the record that the state auditor made separate annotation of the receipts, and the state treasurer kept a separate account of the receipts therefrom in the books of his office. It further appears that the state board of examiners have, up to the action resulting in this proceeding, recognized the distinction and separation in passing upon claims against the several institutions and ordering warrants drawn and paid from the separated funds; in fact, their last action referred to recognized this separation but directs the payment of the warrants to be drawn in favor of the experiment station and extension service out of the funds received from the one and one-half mill levy.
It is therefore apparent that a distinction between the “teaching units” and the research and experiment and general dissemination units has always been recognized by the legislative and executive departments of both the federal and state governments in construing the several acts authorizing and establishing the several institutions, and, while such construction so placed on the Acts in question is not binding upon the courts, it is an aid to the determination of the intention of the people in enacting the laws under consideration and is “entitled to respectful consideration.” (State ex rel. Judith Basin County v. Poland, supra.)
The diligence of eminent counsel for the respective parties to this proceeding has disclosed but one case in the United States wherein this question lias been touched upon by a court of last resort, and we, by independent research, have been no more successful than were they. In -that case (Indiana State Board of Finance v. State, 188 Ind. 36, 121 N. E. 649), it appears that Purdue University is the agricultural college of Indiana; that that state has also taken advantage of the Acts of Congress providing for an agricultural station in connection with that institution, and has also accepted the benefits of those Acts creating the agricultural extension service. Certain annual appropriations had been made prior to 1913 for the support and maintenance of the experiment station and extension service, supplementing the appropriations of Congress. In 1913 the legislature of Indiana provided for a fixed levy for the support of the educational institutions of the state, and apportioned the tax to the Indiana University, Purdue University and the state normal school, and provided that when the funds should become available they should constitute the total amounts to be paid out of the state treasury to said institutions, and, with certain exceptions, repealed all Acts in conflict. The plaintiff contended that the Act repealed certain Acts providing for the appropriation for the experiment station and extension work, and that these institutions should thereafter have only such portions of the funds of the educational institutions as the management thereof should apportion to them. After calling attention to the manner in which funds for these institutions had been theretofore provided by the general government and the state legislatures, and that they had always been kept separate and apart from the educational institutions, the supreme court .of Indiana said: “If this theory is adopted, we find a complete abandonment by the state of a long continued purpose that this bureau [the extension service] shall be independent as to funds, and as to the extent of its work, and for that purpose the expenditure of its funds shall be subject to the judgment of others than said trustees. In .our opinion the trustees, or the treasurer of the University, are only designated as agents for the specific purpose of holding such special funds, and are not acting in their general capacity as officers of the University. A prohibition of payment' to the University of other than the tax, for any purpose, does not prevent a payment to the trustees as such special agents. * # * ” And again: “This appropriation of $30,000 -in controversy cannot, in view of the foregoing provisions, be found to be to the University for university purposes, * ® * the workers, lecturers, and so forth, to whom it is paid out are not employees of the University. The county funds appropriated for local expenses do not concern the accounts of Purdue University, and yet they are in aid of the work to be done by the extension bureau.” And with reference to an appropriation to the experiment station, the court said: “It is not an appropriation to the University as a university, but as a trustee for such station, and the Tax Act of 1913, * * * neither repeals this provision for the station, nor changes the organization of its management. That neither the extension bureau nor the experiment station is deemed such part of the University that the mill tax is intended therefor to the exclusion of earlier appropriations is emphasized by the fact that the state at the same session, 1913, at which it passed the Mill Tax Act in question created other such departments, or bureaus, and made certain annual appropriations therefor to operate in the future.”
It is contended by the attorney general that, by the Act of 1887, Congress created the experiment station a “department” of the agricultural college; he draws that conclusion from the phrase found in the Act, as quoted above: “There shall be established, under the direction of the college or colleges in each state or territory * * # a department to be known and designated as ‘ an agricultural experiment station. ’ ’ ’
But in spite of the phraseology used, the experiment station in this state was not created by the Act of Congress; it ivas but authorized, and would never have come into being but for the Act of our legislature above quoted, creating that institution. Had Congress intended, by that Act, to create within the agricultural colleges of the several states a department to be known as “an agricultural experiment station,” it would have found fitting words and phrases for saying so; what it does say is that “there shall be established, under the direction” of such colleges, a “department” to be so known and designated.
But again, when our legislature passed the Act of 1893 above, taking advantage of the Act of Congress, supra, it clearly indicated its intention that the experiment station should not be a part of, or a department in, the agricultural college, for it provided for the creation of the two in a single Act, but kept them separate and apart, declaring first the establishment of the college, and then deliberately, and after it had concluded its provisions for that institution, its purpose declared to be that of teaching the subjects enumerated, provided that: “There is also located and established on the land * * * in connection with said agricultural college, and under its direction an agricultural experiment station.”
As to the agricultural extension service, that would seem to be almost entirely a federal project; we but assented to its creation within our midst and agreed to “accept” its benefits and donate to its support.
The word “also” means “in addition to,” and denotes that something is added to what preceded it. (Panton v. Tefft, 22 Ill. (12 Peck) 367; Reynolds v. Washington Real Estate Co., 23 R. I. 197, 49 Atl. 707; Dalton v. Bowker, 8 Nev. 190; State v. Camp Sing, 18 Mont. 128, 56 Am. St. Rep. 551, 32 L. R. A. 635, 44 Pac. 516.) In the above Montana case this court said that this word in section 1, Article XII of the Constitution, providing that the legislative assembly shall levy a uniform rate of assessment and taxation for the raising of necessary revenue of the state, and that it may also impose a license tax, is used in the sense of a conjunctive, and will not to be held to carry over into the sentence the idea of the sentence which precedes it, and therefore the second sentence, connecting up the power of the legislature contained in the first by tbe word “also,” does not mean that a license tax is restricted to the purposes mentioned and for which a uniform tax may be levied. So here, the use of tbe word effects a differentiation in tbe two purposes declared in tbe Ant, and does not mean that the experiment station is established for tbe purposes for which tbe college is established, “tbe idea” contained in tbe first sentence is not carried over to tbe second, and tbe separation of tbe two must be held to have been done by that body with a definite purpose and intent not to make tbe two parts of tbe whole, but separate and distinct entities, tbe second merely established upon tbe grounds and “in connection with” tbe first, which is tbe phrase used in both tbe federal and tbe state Acts.
Reverting to tbe Act under consideration (Initiative Measure No. 18, Laws of 1921, p. 700) tbe phraseology used is significant. Tbe closing phrase of tbe title is “ # * * for tbe support, maintenance and improvement of the institutions now comprised in tbe University of Montana”; tbe body of the measure then declares that tbe money derived from one and one-half mills of tbe levy “shall be appropriated * ® * for tbe support, maintenance and improvement of tbe State University at Missoula, tbe State College of Agriculture and Mechanic Arts at Bozeman, tbe Montana State School of Mines at Butte, and tbe Montana State Normal College at Dillon, now comprised in tbe University of Montana.”
"While tbe title to tbe measure might be said to be more com- prebensive than tbe body thereof, it is tbe wording of the body and not that of tbe title which controls, as it is not necessary that tbe title shall contain or embody tbe exact limitations or qualifications contained in tbe bill itself wbieb are germane to its purposes, if tbe general subject of tbe measure is clearly expressed in the title. (State v. Anaconda Copper Min. Co., 23 Mont. 498, 59 Pac. 854.) We will consider, therefore, only the measure itself as it appears as section 2148 of tbe Revised Codes of 1921; tbe title has served its purpose and has-been heretofore disposed of.
In wording the. measure as they did, the people either considered that those federal aid projects, operated “in connection with the agricultural college,” were not a part of the college or, by the peculiar wording of- the measure, intentionally left them out of participation in the receipts to be derived from the one and one-half mills of the levy authorized. Had it been the intention of those drafting the measure that all institutions in any manner connected with, or a part of, the “Greater University,” should share in the proceeds of the levy there would have been no necessity for an enumeration of those institutions within the University which were to have appropriated to them a part of such levy; the measure would have merely followed the wording of the title thereto, or have been even more comprehensive as “for the support, maintenance and improvements of” the University of Montana, or, as the foregoing analysis of the Acts of Congress and of our legislature relating to these nonteaching units discloses that their supervision and control is, to a great extent, divergent from that of the teaching units, and the funds provided for their support and maintenance are derived from the two sources, i. e., the federal government and state appropriations; the federal aid being paid to the treasurer of the agricultural college in trust for the purposes designated — and this aid is given only on the implied condition that the state will appropriate for the same purpose sufficient additional funds to carry out those purposes — it would seem that, had the people intended that these nonteaching units should participate in the benefits of the funds provided by the Act under consideration, they would have enumerated those units in the measure. That they did not so enumerate those units is apparent, and, if they considered those units a part of the University, it cannot be said that the people intended to include within the benefits of the Act all units of the University; those units enumerated are declared to be “comprised in the University of Montana”; this language is significant. “Comprise” is synonymous with “include.” (Webster’s Dictionary; Farmers’ National Bank v. Cook, 32 N. J. L. 347.) Reading the phrase, then, as “included in the University,” the phraseology leads to the irresistible conclusion that, by the inclusion of those units enumerated, any and all other units which may be a part of the University are excluded. “Expressio unius est exclusio alterius.” (State v. State Board of Equalization, 56 Mont. 413, 441, 185 Pac. 708.)
We are therefore forced to the conclusion, as was the supreme court of Indiana in Indiana State Board of Finance v. State, above, that appropriations made to the experiment station and extension service are not made to the University as such, but, with the federal appropriations, are’ held in trust by the officers or boards in charge for the use of these two institutions or activities, and can only be expended for those purposes specified, and that, while these institutions are closely associated with and conducted “in connection with” the agricultural college, they are not, in a legal sense, component parts or departments of the college.
It therefore follows that the appropriations made by House Bill 451 cannot be charged to the receipts from the one and one-half mills of the levy for 1925 and 1926, which are entirely appropriated, or nearly so, by the appropriations made by House Bill 453 for the support and maintenance of the teaching units designated in section 2148.
5. In making the appropriations mentioned, the legislature recognized and followed the direction of the people contained in the measure. Without determining that such direction is binding upon that body, it is apparent that, if the one and one-half-mills of the levy is the “total tax then provided by law and applicable to such appropriations and expenditures” of the four teaching units of the University, those appropriations and authorized expenditures do not exceed such total tax, and therefore those appropriations and authorized expenditures do not violate the provisions of section 12 of Article XII of the Constitution, and the governing boards and officers having authority to do so are entitled to expend the moneys so provided for the purposes mentioned in the appropriation bill; unless some restriction upon their expenditures is found in the Constitution or statutes of the state.
There is no showing made in the record of the total appropriations against the state levy for the fiscal years of 1925 and 1926; the only appropriations referred to therein are those mentioned above. We have, however, the record of the total levy made, and from this it appears that, in addition to the estimated $700,000 to be received froni the one and one-half mills of the levy, the state would receive for each of those years an additional $933,333.33, from which the legislature appropriated approximately $200,000 for the support and maintenance of the experiment stations and extension work, leaving a balance for general state purposes of approximately $733,300. It does not therefore appear from the record that any portion of the appropriation for these purposes is in any manner illegal or unconstitutional; and again, unless we find in the Constitution or statutes some restriction upon their expenditures, this amount must be set apart for the accomplishment of the purposes for which those institutions were created and are maintained.
6. Lastly, the attorney general does not contend that the state board of examiners has power to scale appropriations which have been made in accordance with all of the constitutional restrictions and regulations, or to curtail the expenditure .of the amount so legally appropriated by the legislature for the support and maintenance of the several institutions mentioned, but asserts that, under section 269, Eevised Codes of 1921 “it is proper for the board of examiners to announce its policy to hold different officers, institutions, and departments to the amount appropriated to such officers, institutions and departments.” Explaining that the board concluded that the legislature undertook to appropriate, to the institutions named in section 2148 above, the amount to be derived from the levy of one and one-half mills, and that the extension service and the experiment station were parts of those institu tions, lie contends that, on this conclusion, the board was justified in treating the excess of the appropriations above the proceeds of the one and one-half mills as a nullity, and holding the entire University expenditures down to the total amount of such receipts.
Had we arrived at the conclusion on which the board based its action in prorating the amounts available to the several institutions in order to include the total available fund within the receipts from the one and one-half mills of the levy, the question might be presented whether the action of the board was within its authority as a constitutional board vested with “power to examine all claims against the state, except salaries or compensation of officers fixed by law, and to perform such other duties as may be prescribed by law” (section 20, Art. VII, Const.), for the legislature has, “by law” prescribed the duties of the board with considerable particularity, especially with reference to the very institutions with which the board was attempting to deal, and which provisions are as follows:
Section 850, Revised Codes of 1921: “The state board of examiners * * * shall have supervision and control of all expenditures of all moneys, appropriated or received for the use of said [educational] institutions from any and all sources, other than that received under and by virtue of the Acts of Congress * * * shall let all contracts * * * and shall audit all claims to be paid from any moneys, * * * but * * * shall have authority to confer upon the executive boards of such institutions such power and authority in contracting current expenses, and in auditing, paying, and reporting bills for salaries or other expenses incurred in connection with such institutions, as may be deemed by said state board of examiners to be to the best interest of said institution.”
Section 250: “Whenever the board has reason to believe that the state auditor has drawn or is about to draw his warrant without authority of law, or for a larger amount than the state actually owes, the board must notify the state treasurer not to pay the warrant so drawn; * * * and thereupon the treasurer is prohibited from paying the warrant, whether already drawn or not, until he is otherwise directed by the legislative assembly or the board.”
Section 269: “No state officer, state board of trustees, or managers or commissioners shall have any authority to, or shall contract any liability or indebtedness whether in excess of the amount appropriated to such officer, board of trustees, or managers or commissioners, or for the office, institution, commission, or organization under his or their management or control, without previous authorization from the state board of examiners, and if any liability or indebtedness be incurred or expenditure be made, in violation of this Act, no claim therefor shall be allowed by the state board of examiners.”
These sections show the extent of the authority of the board of examiners concerning the expenditure of public funds. "When the board of examiners has exercised the powers conferred upon it by the Constitution and legislative enactments of the state, its functions are ended. (State ex rel. Schneider v. Cunningham, 39 Mont. 165, 101 Pac. 962; Porter v. Hartley, 67 Mont. 244, 216 Pac. 344.) While this board is given supervision and control over the expenditures of moneys appropriated or received for the use of the educational institutions of the state, this power does not authorize an arbitrary reduction by the board of valid appropriations and authorized expenditures from available funds applicable to such appropriations and expenditures which have been duly made and authorized by the legislative assembly and have received the approval of the governor. Such attempted substitution of the judgment of executive officers for that of the legislative body constitutes a usurpation of legislative functions which cannot be permitted under our constitutional division of state government into its three co-ordinate departments; the authority to do so was denied the governor in the exercise of his veto power in Mills v. Porter, 69 Mont. 325, 35 A. L. R. 592, 222 Pac. 428, and there is much less reason for sustaining the exercise of such power by an executive board. When the legislative assembly has expressed its solemn judgment as to the amount necessary for the support and maintenance of an institution for the fiscal year, and in doing so has kept within the restrictions imposed by the Constitution both as to such general appropriation and its appropriations generally for such year, the executive and judicial departments of the state must bow to that judgment..
However no question is here presented as to the power of the board of examiners to refuse to approve claims for expenditures, made or to be made, in excess of available or anticipated revenues, nor as to its authority to prorate appropriations, where it is apparent that the legislature has exceeded its constitutional power in making appropriations beyond the amount of funds available in the state treasury, or anticipated revenues subject to appropriation and applicable to such appropriations or expenditures. As to this and other kindred questions, we expressly reserve opinion.
7. As the reasons stated by the board for its action in ordering the payment of the two claims allowed out of the proceeds of the one and one-half mills of the state levy, so appropriated for the support and maintenance of the four institutions mentioned, are not justified by the analysis of the provisions governing the matters under consideration, the action of the board in this respect must fall with its conclusions on the subject.
It is apparent from the foregoing discussion that the complaint states a cause of action, and that the plaintiff is entitled to the relief he seeks; the motion to quash is therefore overruled. It is accordingly ordered that the defendants be perpetually enjoined and restrained from paying or directing the payment of the claims herein referred to out of the proceeds of the said one and one-half mills of the state levy so appropriated for the period mentioned for the support and maintenance of the “teaching units of The Greater University,” and from drawing any warrant or warrants against such proceeds for the payment thereof.
,Wnf granted.
Mr. Chief Justice Callaway- and Associate Justices Holloway, Galen and Stark concur. | [
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MR. JUSTICE GALEN
delivered the opinion of the court.
This is an action in equity brought by the plaintiff against the Sheridan County State Bank, John W. Shelby and T. L. Beiseker as defendants, for an accounting and in an endeavor to have a resulting trust declared as to certain real estate, title to which is vested in the Sheridan County State Bank. The defendant answered the plaintiff’s complaint, admitting and denying certain allegations thereof and alleging new matter by way of affirmative defense. In response to demand, a bill of particulars was filed in the action by the plaintiff, setting forth several thousands of dollars for which credit was claimed on her behalf. The land sought to have impressed with a trust is located in Sheridan county and comprises 640 acres. It was mortgaged to the Minneapolis Trust Company and in plaintiff’s complaint it is alleged that although ample money was deposited with the bank by her with direction and agreement that it should be used by the bank in satisfaction of the mortgages upon the land, the bank wholly failed and neglected so to do and permitted the land to be sold at foreclosure sale and before the expiration of the time allowed for redemption obtained an assignment to itself of the sheriff’s certificates of sale and subsequently, after the redemption period had passed, secured deeds to the property from the sheriff, in fraud of the plaintiff. Issue was joined by replication' and the cause was tried to the court without a jury. During the trial the action was dismissed as to the defendants John W. Shelby and T. L. Beiseker, and Oscar S. Gullickson as receiver of the Sheridan County State Bank was substituted for the bank, thus the receiver becoming the only party defendant. Findings of fact and conclusions of law were made by the court in favor of the defendant, upon which judgment was duly entered. The appeal is from the judgment.
The plaintiff is the wife of D. W. Kelly, and endeavor was made to establish -a case in her favor predicated alone upon his testimony. Mrs. Kelly was not called as a witness. In support of the plaintiff’s cause of action D. W. Kelly testified in chief respecting the -several transactions as his own, using most prominently the pronouns “I” and “my.” On cross-examination he stated that he “was just doing business in his wife’s name.” After giving such testimony, upon being called again to the stand following an adjournment of the court over night, he testified on redirect examination, over objection of defendant’s counsel, that the business was his wife’s. Defendant’s counsel made objection to such testimony as follows: “By Mr. Hurd: To that we object on the ground and for the reasons that the witness in his testimony stated the money that went into that account was his money and that he was merely transacting this business under the name of his wife, who had no interest in it, and I think that is not susceptible of any explanation.” Plaintiff’s counsel, Mr. Le Seuer, replied: “I am asking him to explain that, because the statement stands two ways; if his last testimony is correct and the first is incorrect, and counsel’s interpretation of it is right,- we have nothing to do only to save everybody time, but I think he has a perfect right to explain what were the facts as between those two answers he has given.” Upon being directed by the court to answer, the following testimony was elicited: “I am doing business for my wife and this is her business.” By the Court: What is her business, what do you mean? A. This banking deal, this banking business. By Mr. Le Seuer. Q. Is that true of all of the -business that was done with the bank? A.. Yes, sir. Q. That is concerning all these loans and matters that are in issue? A. Yes, sir.”
On recross-examination he said that if he had before testified that he was merely transacting the business and carrying the deposited moneys in the bank in his wife’s name, he was in error. He said: “Well, if I did [so testify] I made a mistake, that is all there is to that, because I was talking pretty fast yesterday, you rushed me hard, it was hard to answer. Q. No, we didn’t rush you, the Court, on the other hand admonished you to be very slow in talking. Now will you explain to His Honor these contradictions in your testimony, if you have any explanations to make? A. If I was handling this bank business for myself as my own business it is a mistake. I am not and it is T. C. Kelly’s business and that involves the litigation here in T. C. Kelly’s name, and not in my name any way, shape or form. Q. Is that all the explanation you care to make concerning this conflict in your testimony? A. I think so. Q. All right. Now, Mr. Kelly, how long have you been doing business in your wife’s name? A. I don’t know, I should think maybe seven years. Q. I am speaking about the time of T. C. Kelly’s account, from August 8, 1916, to September 27, 1917, you didn’t have any cheeking account there of your own at that time? A. No.”
Later he testified: “Q. After you left the stand yesterday, your attention was directed by your counsel to the fact that you were doing your own business under Mrs. Kelly’s name? A. Well, if I did testify to that I made a mistake. Q. After you left the witness-stand yesterday afternoon some of your attorneys directed your attention to the fact on your testimony to the effect you were doing business under the name of Mrs. Kelly would cause this action to be dismissed? A. No. Q. They talked it over with you before you came back on the witness-stand this morning? A. No. Q. Nobody spoke to you and you didn’t discuss the matter with any one of them? A. No.”
' T. L. Beiseker, who was the cashier of the Sheridan County State Bank from 1913 to 1920, and who conducted all of the dealings complained of, testified that all of the deposits for T. C. Kelly were made by her husband, D. W. Kelly; that the plaintiff never gave the business any personal concern; and that D. W. Kelly, at the time of opening the account with the bank, stated to the witness that the business was his own (D. W. Kelly’s) “carried in his wife’s name.” Further the witness said that his only acquaintance with Mrs. Kelly was merely to know her when he saw her; and that he never had any dealings with her; that the business was conducted alone with D. W. Kelly.
The court made nineteen special findings of fact, only one of which need be considered determinative of this appeal; namely, “that D. W. Kelly is the real party in interest in this cause and T. C. Kelly, the plaintiff herein, is not now, and never was, the real party in interest in said cause.”
The pleadings admit that D. W. Kelly was acting as the agent of his wife in the several transactions involved, but during the course of the trial deviation was made from this admission in the pleadings by the proof introduced without objection, thus raising a determinative question of fact. Had objection been made to such testimony, it must have been excluded. However, having been admitted without objection, and treated by the parties as an issue upon which the court made its most important finding of fact, the pleadings must be held to have been amended conformable to the proof.
The general rule is by numerous decisions well settled in this state. In the case of Lackman v. Simpson, 46 Mont. 518, 129 Pac. 325, it is stated by Mr. Justice Holloway as follows: “Where evidence, which might have been excluded as not tending to reflect upon any issue made by the pleadings, has been admitted without objection, it will be given the same consideration as though fully warranted by the pleading of the party offering the evidence, or, in other words, the pleading will be treated as if it had been amended to admit the introduction of the evidence.” A few other cases to the same effect are Moss v, Goodhart, 47 Mont. 257, 131 Pac. 1071; Ellinghouse v. Ajax Livestock Co., 51 Mont. 275, L. R. A. 1916D, 836, 152 Pac. 481; State ex rel. Dansie v. Nolan, 58 Mont. 167, 191 Pac. 150; Capital Lumber Co. v. Barth, 33 Mont. 94, 81 Pac. 994; O’Brien v. Corra-Rock Island Min. Co., 40 Mont. 212, 105 Pac. 725 ; Archer v. Chicago, M. & St. P. Ry. Co., 41 Mont. 56, 137 Am. St. Rep. 692, 108 Pac. 571.
And this doctrine has often been stated and repeated in this state where omissions or defects existing in the complaint are supplied and cured by the answer filed. (In re Miller’s Estate, 71 Mont. 330, 229 Pac. 851, and see large number of cases there collected.) We can see no good reason to make distinction in application of the rule to cases where admissions in the pleadings are upon the trial wholly disregarded. In the language of Mr. Chief Justice Brantly, stated in manner applicable to the facts in the case before us, when a trial has been had upon evidence which has been introduced without objection, a judgment will not be reversed ‘ because of defects in the pleadings; rather they will be treated as having been amended in the trial court, so far as is required to sustain 'the judgment. (Ellinghouse v. Ajax Livestock Co., supra.) Proof introduced at the trial without objection may raise an issue of fact which had theretofore been conceded by the pleadings.
So far as applicable, our statute expressly provides that “every action must be prosecuted in the name of the real party in interest,” with certain exceptions not applicable here. (Sec. 9067, Rev. Codes 1921.) And, since such an action as this must be prosecuted in the name of the real party in interest, failure so to do necessarily leaves her without right of recovery in such proceeding, where it appears from the evidence that the right of action is not in the party suing but rather in another. This conclusion is paraphrased from the language embodied by Mr. Justice Holloway in the case of Lefebure v. Baker, 69 Mont. 193, 220 Pac. 1111, in dealing with the necessary affirmative allegations of a complaint.
Under the oft-repeated rule of this court, applicable here, where there is conflict in the evidence, the findings as made will not be set aside, save when the evidence is wholly preponderating against them. This rule has been so often restated that reference is made only to a few recent cases: Harri v. Farmers’ Co-operative Co., 69 Mont. 149, 223 Pac. 109; Scott v. Prescott, 69 Mont. 540, 223 Pac. 490; Bischoff v. Bischoff, 70 Mont. 503, 226 Pac. 508. Manifestly the evidence does not preponderate against the court’s finding.
The judgment is affirmed.
Affirmed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Stark and Matthews concur. | [
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68
] |
ME. JUSTICE HOLLOWAY
delivered the opinion of the court.
At the times mentioned herein, the First State Bank of Coffee Creek (called the Coffee Creek bank) was a state bank which was not affiliated with the Federal Eeserve System in any manner, so far as disclosed by the record. The Empire & State Bank of Lewistown (called the Lewistown bank) was also a state bank, but it was a component part of the Federal Eeserve System ■ — a member bank of the Federal Eeserve Bank of Minneapolis (herein called the defendant). About December 1, 1923, certain persons who were indebted to Fergus county delivered to the county treasurer checks drawn on the Coffee Creek bank. These checks, for sums aggregating $999.64, were indorsed by the treasurer and were delivered to the Lewistown bank for collection. The Lewistown bank indorsed and delivered them to the defendant’s Helena branch bank for collection, and the Helena branch bank transmitted the cheeks to the Coffee Creek bank for payment. The Coffee Creek bank charged the checks to the respective drawers and remitted its drafts for the amount of the checks. These drafts, drawn upon the Coffee Creek bank’s correspondents, were received by the defendant, but before they could be collected the Coffee Creek bank failed in business, and tbe drafts were dishonored. This action -was then instituted by the county to recover the amount of the cheeks, together with the interest which the county would have received on that amount if the checks had been collected. It is the plaintiff’s theory that the defendant rendered itself liable for the resulting loss by accepting drafts for the checks instead of demanding and collecting the money.
Every material allegation of the complaint was admitted, and the defendant then undertook to justify its act in accepting the drafts. It alleged that about October 6, 1920, the Federal Reserve Board adopted and promulgated certain rules designated in the entirety, “Regulation J, Series of 1920”; that about September 1, 1922, this defendant, with the consent and approval of the Federal Reserve Board, adopted certain other rules and promulgated them in their entirety as “Circular No. 286”; that the Lewistown bank had full notice and knowledge of the contents of these documents at and for a long period prior to the time the checks in question were delivered to the defendant, and that defendant accepted the checks for collection under the terms and conditions imposed by Regulation J and Circular 286, and not otherwise. Each of these documents is attached to and made a part of the answer. The portions of Regulation J material here read as follows:
“Each federal reserve bank shall exercise the functions of a clearing-house under the following general terms and conditions :
“ (1) Each federal reserve bank will receive at par from its member banks and from nonmember clearing banks in its district, checks drawn on all member and nonmember clearing banks and on all other nonmember banks which agree to remit at par through the federal reserve bank of their district. * * *
“(8) In handling items for member and nonmember clearing banks, a federal reserve bank will act as agent only. * * * Any further requirements that the board may deem necessary will be set forth by the federal reserve banks in their letters of instruction to their member and nonmember clearing banks. Each federal reserve bank will also promulgate rules and regulations governing the details of its operations as a clearing-house, such rules and regulations to be binding upon all member and nonmember banks which are clearing through the federal reserve bank.”
The only provision of Circular No. 286 with which we are concerned at present reads as follows:
“Every bank sending checks to this [defendant] bank * # * w[i[ ]3e understood to have agreed to the terms and conditions of this circular, and to have agreed that in receiving such items this bank will act only as the collecting agent of the sending bank, and as such, authorized to send such items for payment in cash or bank draft direct to the bank on which they are drawn.”
A general demurrer to the answer was sustained, and the defendant, declining to plead further, suffered judgment to be rendered and entered against it and appealed.
The ultimate question for solution is, Does the answer state a defense to plaintiff’s cause of action? or, stating the same proposition in different terms: Do the provisions of Regulation J and Circular 286 bind the plaintiff and relieve the defendant of liability for the loss which resulted from its act in accepting the drafts of the Coffee Creek bank in payment for the checks it undertook to collect? If they do, the trial court erred in sustaining the demurrer; if they do not, then this case is controlled by the decision in Federal Reserve Bank of Richmond v. Malloy, 264 U. S. 160, 68 L. Ed. 617, 31 A. L. R. 1261, 44 Sup. Ct. Rep. 296, and the decision in Jensen v. Laurel Meat Co., 71 Mont. 582, 230 Pac. 1081.
The Federal Reserve Act (38 Stat. 251 [secs. 9785-9805, U. S. Comp. Stats. 1916]), and the Acts amendatory thereof and supplementary thereto, constitute the charter of the Federal Reserve System. The general supervision and control of the system is lodged in the federal reserve board, consisting of sis members appointed by the President of the United States, by and with the advice and consent of the Senate and the Secretary of the Treasury and the Comptroller of the Currency, members ex officio. (Amendment of June 3, 1922, 42 Stats. 620; sec. 9793, U. S. Comp. Stats. 1923 Supplement.) It was this board which promulgated Regulation J and authorized the defendant to issue Circular No. 286.
The opening paragraph of Regulation J, quoted above, is an order of the federal reserve board constituting each federal reserve bank a clearing-house for its member banks and nonmember clearing banks. By the provisions of that Regulation, member banks were informed that, in handling checks and drafts for collection, each federal reserve bank would act as agent only, and would exercise the functions of a clearinghouse under such rules and regulations as it might adopt. Regulation J assumed to confer upon this defendant the authority to adopt and promulgate the rules and regulations contained in Circular 286. However, it is alleged in the answer, and admitted to be true for the purposes of this appeal, that Circular 286 was issued with the consent and approval of the federal reserve board, so that in effect it emanated from that board, and its validity depends upon the power of that board to prescribe the conditions contained in the circular. If the federal reserve board had authority to impose those conditions, then this defendant had authority to say that it would act as a clearing-house and collect checks for member banks on the terms and conditions prescribed in the circular and not otherwise.
Circular 286 constituted a continuing offer by this defend- ant to perform the services of a collecting agent for the Lewistown bank upon the conditions therein expressed, (1) that defendant might send the items for collection directly to the bank upon which they were drawn, and (2) that it might receive “payment in cash or bank draft.”
When the county deposited the checks with the Lewistown bank for collection, it thereby authorized that bank to employ a subagent to perform the actual service of making the collec tion (Jensen v. Laurel Meat Co., above), and to that end to enter into the necessary contract with the subagent for the service to be performed.
When the Lewistown bank, with full knowledge of the conditions imposed by Circular 286, delivered the checks to this defendant for collection, it thereby expressed its acceptance of the offer as made, and the result was a contract by the terms of which the defendant was authorized to send the checks directly to the Coffee Creek bank and to accept in payment “cash or bank draft”; and, when that contract was entered into, defendant became the subagent for the county, and the county became bound by the contract to the same extent that the Lewistown bank was bound.
It is conceded that the first condition mentioned above is not objectionable, and necessarily so, for it is authorized expressly by section 6108, Revised Codes of 1921. But it is contended that neither this defendant, nor the federal reserve board, had power lawfully to require that defendant would accept checks for collection only on condition that it might receive either drafts or cash in payment therefor. In other words, plaintiff’s counsel argue that the Federal Reserve Act imposed upon this defendant the absolute duty to receive these checks for collection and to collect them, and therefore it was beyond the power of the defendant or the federal reserve board.to say that defendant would perform its public duty only upon condition that it be relieved from the liability which would otherwise attach to its act in accepting drafts in payment of the checks. In support of this argument attention is directed to sections 13 and 16 of the Federal Reserve Act (secs. 9796 and 9799, U. S. Comp. Stats. 1918, as amended, TJ. S. Comp. Stats. 1925 Supp).
Section 13, as amended, provides: “Any federal reserve bank may receive from any of its member banks, and from the United States, deposits of current funds in lawful money, national bank notes, federal reserve notes or checks, and drafts payable upon presentation, and also, for collection, maturing notes and bills.” (40 Stat. 232, 234, 235 (U. S. Comp. Stats. 1918, U. S. Comp. Stats. Supp. 1925, sec. 9796.) This section so far as it is involved here, merely authorizes a federal reserve bank to receive from its member banks checks and drafts for collection. (American Bank & Trust Co. v. Federal Reserve Bank of Atlanta, 262 U. S. 643, 67 L. Ed. 1153, 43 Sup. Ct. Rep. 649.)
Section 16 provides: “Every federal reserve bank shall receive on deposit at par from member banks or from federal reserve banks checks and drafts drawn upon any of its depositors. ’ ’
That these provisions did not compel the defendant to receive the checks or to collect them is reasonably clear from the language employed. But all discussion of the subject has been set at rest by the supreme court of the United States in Farmers & Merchants’ Bank v. Federal Reserve Bank of Richmond, 262 U. S. 649, 30 A. L. R. 635, 67 L. Ed. 1157, 43 Sup. Ct. Rep. 651. With reference to the duty of a federal reserve bank to collect checks for member banks,the court said: “But neither section 13, nor any other provision of the Federal Eeserve Act, imposes upon reserve banks any obligation to receive checks for collection. The Act merely confers authority to do so.” In passing upon the language employed in the opening paragraph of section 16, quoted above, the court observed: “The depositors in a federal reserve bank are the United States, other federal reserve banks, and member banks. It is checks on these depositors which are to be received by the federal reserve banks. These checks from these depositors the federal reserve banks must receive. And when received they must be taken at par. There is no mention of nonmember banks in this section. When, in 1916, section 13 was amended to permit federal reserve banks to receive from member banks solely for collection other checks payable upon presentation within the district, and when, in 1917, section 13 was again amended to permit such receipt solely for collection also from certain nonmember banks, section 16 was left in this re spect unchanged. In other respects section. 16 was amended both by the Act of 1916 and by the Act of 1917. The natural explanation of the omission to amend the provision in section 16 concerning clearance is that the section has no application to nonmember banks, even if affiliated.”
The checks here in question' were drawn upon the Coffee Creek bank, which was not a member bank nor affiliated with the Federal Reserve System in any manner; therefore, under the provisions of section 16 quoted above, the defendant was not compelled to receive them even for deposit.
But it is insisted that defendant was compelled to act as a clearing-house for its member banks, including the Lewistown bank. The only provision of the Federal Reserve Act relating to this subject, so far as we have observed, is to be found in the concluding paragraph of section 16, as follows“The federal reserve board shall make and promulgate from time to time regulations governing the transfer of funds and charges therefor among federal reserve banks and their branches, and may at its discretion exercise the functions of a clearing-house for such federal reserve banks, or may designate a federal reserve bank to exercise such functions, and may also require each such bank to exercise the functions of a clearing-house for its member banks.”
This language appears to be explicit. It provides that the federal reserve board may require each federal reserve bank “to exercise the functions of a clearing-house for its member banks.” If the language of section 13 above is merely permissive, and not mandatory, as held by the supreme court, this language of the concluding paragraph of section 16 is likewise permissive, and not mandatory. In other words, while the federal reserve board may require a federal reserve bank to act as a clearing-house for its member banks, it is not compelled to make such requirement. It might have refused altogether to constitute this defendant a clearing-house, and, in the absence of an order from the federal reserve board directing it to function as a clearing-house, this defendant might have refused to undertake any service with respect to these checks. It was compelled to function as a clearing-house only in virtue of the order of the federal reserve board directing it to do so upon the terms and conditions mentioned in Regulation J and Circular 286.
Since the federal reserve board was permitted, but was not compelled, to require this defendant to function as a clearinghouse, it could prescribe the terms upon which the service should be rendered when undertaken.
Section 11 of the Federal Reserve Act defines generally the powers and duties of the federal reserve board. Section 11 (i) provides: “Said board shall perform the duties, functions, or services specified in this Act, and make all rules and regulations necessary to enable said board effectively to perform the same.” Section 11 (j) provides that the federal reserve board shall “exercise general supervision over said federal reserve banks.” These provisions furnish ample authority to the federal reserve board to make any lawful rules and regulations for the conduct of the business carried on by a federal reserve bank in its capacity as a clearing-house or collecting agent; and, since the rules prescribed in Regulation J and Circular 286 are not unlawful, this plaintiff is bound by them so far as they affect the instant case.
The contention made, that it is against public policy to per- mit this defendant to contract against liability for accepting drafts in payment of cheeks received by it for collection, cannot be sustained. In this jurisdiction even a public service corporation may contract against liability for its own negligence, under certain 'circumstances. (Nelson v. Great Northern Ry. Co., 28 Mont. 297, 321, 72 Pac. 642; John v. Northern Pacific Ry. Co., 42 Mont. 18, 35, 32 L. R. A. (n. s.) 85, 111 Pac. 632.)
In their brief, counsel for plaintiff say: “Only in cases where a person or corporation can refuse to perform a service can it dictate the terms under which it will perform the service.” For the purposes of this appeal, that statement may be accepted as substantially correct, but it does not aid the plaintiff, and no useful purpose would be served by discussing the public character of the service rendered by the Federal Reserve System. It is settled by the decision in Farmers & Merchants’ Bank v. Federal Reserve Bank of Richmond, above, that this defendant ,was not compelled by the Federal Reserve Act to collect the cheeks in question. “It is a fundamental rule of law, however, that what one may refuse to do entirely he may agree to do on such terms as he pleases. Hence, one person, being under no legal duty to perform certain services for another, may, upon agreeing to perform such services, exempt himself from liability for his own negligence, providing # * # there is no attempt to exempt himself from responsibility from any fraud or willful injury to the other person or his property, or to exempt himself from responsibility from any violation of the law, either willful or negligent.” (6 Cal. Jur. 117; see, also, see. 7554, Rev. Codes 1921.)
It is argued by counsel for plaintiff, though it is not pleaded in the complaint, that the Lewistown bank was compelled to send the checks in question to the defendant for collection, and therefore the contract lacks the essential element— consent given freely. If it be a fact, as suggested in argument, that the Lewistown bank was not free to collect the checks directly from the Coffee Creek bank or through any agency other than the defendant, and that it was coerced into accepting the offer, such fact is not one of which this court can take judicial notice. (See. 10532, Rev. Codes 1921.) It is true that every member bank is required by section 19 of the Federal Reserve Act to maintain with the federal reserve bank of the district a certain designated minimum reserve, and is subject to severe penalties for any impairment of that reserve; but this court cannot say that those requirements furnish the means by which this defendant could or did coerce the Lewistown bank to make all collections through the Helena branch bank. This is not such a case as was presented in American B. & T. Co. v. Federal Reserve Bank, 256 U. S. 350, 65 L. Ed. 983, 41 Sup. Ct. Rep. 499, or in Brookings State Bank v. Federal Reserve Bank (D. C,), 281 Fed. 222.
Again, it is suggested that, assuming the validity of Circu lar 286, the provision therein that a federal reserve bank receiving checks for collection may accept bank drafts in payment should be construed to mean “that a bank draft is to be received only in those cases where such course could safely be pursued.” We are unable to appreciate the force of this suggestion. It may be true that, if a federal reserve bank, undertaking to collect checks drawn upon a nonmember and non-clearing bank, accepted drafts on such bank when the bank was known to be insolvent, such federal reserve bank might be liable, notwithstanding the provisions of Regulation J and Circular 286; but that is not this case. There is not a suggestion in the pleading that the Coffee Creek bank was insolvent at the time it transmitted its drafts to the defendant, or, if it were insolvent in fact, that such fact was known or should have been known to the defendant. The mere fact that it suspended business before the drafts were collected does not argue that it was insolvent when the drafts were issued. It does not appear upon what banks the drafts were drawn or what time elapsed after the drafts were received by the defendant before the Coffee Creek bank failed.
It is our conclusion that the contract entered into between the Lewistown bank and this defendant is valid so far as it appears from this record, that that contract is binding upon Fergus county, for whose benefit it was made, and that, in virtue of its provisions, defendant was relieved of liability for accepting the drafts of tbe Coffee Creek bank. It follows that the answer states a defense, and that the trial court erred in sustaining the demurrer.
Under this view of the case, it is not necessary to consider the second defense pleaded.
We have treated this defendant as subagent for Fergus county in handling these checks for collection and we think correctly so. It is certain that plaintiff cannot maintain an action against defendant upon this canse of action, upon any other theory, and this is the theory upon which the case of Federal Reserve Bank of Richmond v. Malloy, above, was predicated, and it is immaterial here that the theory may have been adopted merely to avoid circuity of action.
In the answer, an attempt was made to deny that the checks were delivered to the Lewistown bank for collection, but the pleader ignored the plain provisions of section 9137, Revised Codes of 1921, and the attempted denial is not effective for any purpose.
The judgment is reversed and the cause is remanded'for further proceedings.
Reversed and remanded.
Mr. Chief Justice Callaway and Associate Justices Galen, Stark and Matthews concur. | [
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] |
MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
This action was instituted on September 18, 1924, by Sarah Griffith against the Montana Wheat Growers’ Association, Montgomery Warden & Co. and L. E'. Montgomery. On December 17 plaintiff procured the default of the defendant Montana Wheat Growers’ Association to be entered. On December 19, the Security State Bank of Outlook filed in the action its application to intervene, its affidavit in support thereof, and its complaint in intervention. On December 22 plaintiff moved to strike these papers from the files, and on the same day the default of the other defendants was entered. On December 31 the bank applied to the court for permission to file an amended complaint in intervention, and on January 3, 1925, the application was granted, and the amended complaint was 'filed on January 5. On September 8, 1925, plaintiff tendered her evidence, and on September 9 the court rendered judgment in her favor and against all of the defendants. From that judgment defendant Montana Wheat Growers’ Association and the intervener bank have appealed.
Plaintiff has moved to dismiss the appeal of the intervener on the ground that it is not interested in the controversy and is not aggrieved by the judgment.
The right of a party to appeal is not absolute. Section 9730, Revised Codes of 1921, provides: “A party aggrieved may appeal in the cases prescribed in sections 9729 to 9761 of this Code.” The converse is equally true: A party who is not aggrieved by a judgment or order may not appeal from it. (In re Barker’s Estate, 26 Mont. 279, 67 Pac. 941; Chicago, M. & St. P. Ry. Co. v. White, 36 Mont. 437, 93 Pac. 350.) It is a general rule, of universal application, that to enable a party to appeal from a judgment or order he must have an interest in the subject matter of the litigation which is injuriously affected by the judgment or- order. The numerous cases supporting the rule will be found cited in 3 C. J. 629, 2 R. O. L. 52, and 'in the notes to 119 Am. St. Rep. 740-750.
The question then arises: Is the intervener aggrieved by the judgment which was entered in this action?
The action was brought by plaintiff to recover from the defendants damages for the alleged conversion of personal property. Plaintiff alleged that on April 29,. 1922, Montgomery Warden & Co. and L. E. Montgomery executed and delivered to her their promissory note for $600, due September 1, 1922, with interest, etc.; that, to secure the payment thereof, the makers executed and delivered to her a chattel mortgage upon certain growing crops, and that by the terms of the mortgage the failure to pay the indebtedness when due, or the sale or removal of the mortgaged property by the mortgagors, should give to plaintiff the right to immediate possession of the property, with the right to dispose of it and apply the proceeds to the payment of the indebtedness. It is then alleged that the mortgaged crops were matured and harvested, and about October 1, 1922, were sold and delivered by the mortgagors to the Montana Wheat Growers’ Association, which association sold and converted the same and the proceeds thereof to its own use— all while plaintiff’s mortgage was in full force and effect, and all without the knowledge or consent of the plaintiff. It is alleged that no part of the indebtedness represented by the note has been paid, and that the value of the grain so converted exceeded the amount due to plaintiff. It is alleged that although the mortgage was not filed for record until October 9, 1922, each of the defendants had actual knowledge of the existence of the mortgage at the time the grain was sold and delivered to the association, and thereafter.
The amended complaint in intervention alleges that during the season of 1922 Montgomery Warden & Co. and L. E. Montgomery grew and harvested 3,500 bushels of wheat, the grain described in plaintiff’s complaint, of the value of about $2,800; that the grain was sold and delivered to the Montana Wheat Growers’ Association; that about September 13, 1922, Montgomery Warden & Co. and L. E. Montgomery, for a valuable consideration, made, executed, and delivered to the intervener an order on the Montana Wheat Growers’ Association for $1,200, which order was duly accepted, and pursuant thereto the Montana Wheat Growers’ Association paid to the intervener $81.15 on June 19, 1923, and $647.03 on July 27, 1923, and that no other or further payments have been made on the order. It is alleged that, at the time the order was executed, delivered and accepted, the intervener did not have any knowledge or notice of the existence of the chattel mortgage lien claimed by the plaintiff. The prayer of the intervener is that plaintiff take nothing as against any of the defendants; that the claim of intervener to the payment made to it be adjudged superior to the claim of any other person; that the intervener have judgment against the defendants for the balance due on the order, and for its costs. The other allegations of the pleadings are not material now.
Assuming, for the purpose of this motion, that all of the foregoing allegations are true, it follows that plaintiff has a cause of action against the defendants for damages for the conversion of personal property in which she had an interest — a cause of action sounding in tort; also that the intervener has a cause of action against the Montana Wheat Growers’ Association upon a contract for the payment of money — an accepted order — and, possibly, has a cause of action against the other defendants as makers of the order.
There is not any specific property involved. The mortgaged grain had been paid for and had been sold and shipped out of the state long before this action was commenced, so that there is not any fund in the hands of the' Montana Wheat Growers’ Association to which there are conflicting claims. It was necessary for plaintiff to disclose the character and extent of her interest in the grain at the time it was converted, since she does not claim to have been the absolute owner of it (Harrington v. Stromberg-Mullins Co., 29 Mont. 157; 74 Pac. 413; Moore v. Crittenden, 62 Mont. 309, 204 Pac. 1035); but the allegations respecting the chattel mortgage merely establish her right to sue and measure the extent of her recovery. She does not demand a return of the property, but seeks only damages for the wrongful acts of the defendants in depriving her of her security. She does not make any claim to the money paid to the intervener by the defendants on account of the order, and she does not assert any right which conflicts with the right claimed by the intervener. The judgment conforms strictly to the claim made by the plaintiff. It merely awards her damages for the conversion of the property in which she had an interest to the extent of the amount due her on her note which was secured by the chattel mortgage. The judgment does not mention the intervener, and does not assume to determine its rights. A satisfaction of this ' judgment cannot impair the right of the intervener to prosecute its claim to judgment and satisfaction. So far as disclosed by the record, the defendants may be amply able to satisfy the plaintiff’s judgment, and also any judgment that the intervener may. recover. Whatever claim the intervener has is against the defendants, not against the plaintiff.
There is not, and could not be made, any contention that plaintiff is responsible to the intervener for the balance due upon its order; in other words, plaintiff does not claim anything in which the intervener is interested and the intervener does not claim anything in which the plaintiff is interested. The mere denials in the complaint in intervention are not effective for any purpose (20 R. C. L. 691), and the intervener cannot make for the defendants a defense which they do not see fit to make for themselves. Since the judgment does not affect the intervener, it is not aggrieved, and its appeal should be dismissed.
The Mlontana Wheat Growers’ Association contends that it was not in default at the time its default was entered, or at the time the judgment was rendered. The record discloses that the original complaint in this action was filed on September 18, 1924, that on October 4, and within the time allowed by law for making appearance, the Montana Wheat Growers’ Association filed a general demurrer to the complaint, and that, before that demurrer was passed upon, and on October 20, 1924, plaintiff filed an amended complaint as a matter of right, under section 9186, Revised Codes of 1921. That section declares: “Any pleading may be amended once by the party of course, and without costs, at any time before answer or demurrer filed, or twenty days after demurrer and before the trial of the issue of law thereon, by filing the same as amended and serving a copy on the adverse party, who may have twenty days thereafter in which to answer, reply, or demur to the amended pleading.” In other words, this statute requires that the amended pleading be filed and served before the amendment becomes effective for any purpose. (Hotter Hardware Co. v. Ontario Min. Co., 24 Mont. 184, 61 Pac. 3.) The service of an amended complaint performs the same function as the service of summons in the first instance. It is in effect the process by which the defendant is brought into court to answer to the amended pleading; hence, until an amended complaint is served and the statutory time for pleading thereto has expired, the defendant cannot be in default. (Ben Kress Nursery Co. v. Oregon Nursery Co., 45 Mont. 494, 124 Pac. 475.),
The judgment herein purports to be a judgment by default and it is therefore necessary that the judgment-roll disclose that the amended complaint was served or that service thereof was waived. (See. 9409, Rev. Codes 1921.) The rule is too well settled in this state to be open to further controversy that, upon a direct attack by appeal, the presumption that the court rendering a judgment by default had jurisdiction of the person of the defendant does not obtain. Unless the record in some way discloses the acquisition of jurisdiction over the defendant, the judgment will be reversed by the appellate court. (Burke v. Inter-State Sav. & Loan Assn., 25 Mont. 315, 87 Am. St. Rep. 416, 64 Pac. 879; Haupt v. Simington, 27 Mont. 480, 94 Am. St. Rep. 839, 71 Pac. 672; English v. Jenks, 54 Mont. 295, 169 Pac. 727.)
The record in this ease fails to disclose that the amended complaint was ever served upon the Montana Wheat Growers’ Association. But counsel for plaintiff argues, in effect, that, even if it were not served, service was waived, and in support of this contention reference is made to the following stipulation entered into on November 10, 1924, and filed on November 13: “It is hereby stipulated and agreed by and between Geo. Cudhie, attorney for the plaintiff herein, and Bruce B. Johnson, attorney for the defendant Montana Wheat Growers’ Association herein, that the said named defendant shall have, and is hereby given to and until the 1st day of December, A. D. 1924, in which to prepare and file its further pleading in this action.”
From the fact that this stipulation was made after the amended complaint was filed, it is contended that it must refer to that pleading, rather than to the original complaint. It is impossible to determine from the stipulation itself to what -it does refer. A waiver is the relinquishment of a known right, and implies knowledge of the existing facts and' an intention to forego a right which might have been asserted. (Murray v. Heinze, 17 Mont. 353, 42 Pac. 1057, 43 Pac. 714; State ex rel. Driffill v. City of Anaconda, 41 Mont. 577, 111 Pac. 345; Enterprise Sheet Metal Works v. Schendel, 55 Mont. 42, 173 Pac. 1059; Swords v. Occident Elevator Co., 72 Mont. 189, 232 Pac. 189.) The record fails to disclose that the defendant Montana Wheat Growers’ Association had any knowledge of the fact that the amended complaint had been filed; hence the doctrine of waiver cannot be invoked in this instance.
(Decided March 12, 1926.)
■So far as disclosed by this record, the cause as between the plaintiff and the Montana Wheat Growers’ Association is still pending, with the demurrer to the original complaint undisposed of. The record fails to show that the defendant Montana Wheat Growers’ Association was in default at the time the judgment was rendered.
The appeal of the intervener is dismissed. The judgment against the defendant Montana Wheat Growers’ Association is reversed, and the cause is remanded to the district court, with direction to proceed in conformity with the views herein expressed.
Reversed and remanded.
Mr. Chief Justice Callaway and Associate Justices Galen, Stark and Matthews concur. | [
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] |
MR. CHIEF JUSTICE CALLAWAY
delivered the opinion of the court.
Wong Fong, found guilty of selling cocaine, was sentenced to imprisonment in the state prison at hard labor for an indeterminate term of not less than five nor more than ten years and to pay a fine of $1,000. He moved for a new trial, which by order the court denied. He has appealed from the judgment and the order.
1. The information charges that at a time and place the defendant “committed the crime of selling and disposing of narcotics,” in that he “did then and there willfully, wrongfully, unlawfully, and feloniously sell and dispose of, at retail, certain narcotics, to-wit, one-fourth dr. of cocaine, a derivative of coca leaves, to another person,” and so forth.
In this court the defendant’s case has been presented with great sincerity and ingenuity. It is argued that the judgment is void for the reason that it is impossible to tell under what section of the Codes the information was drawn. It is pointed out that the same subject matter is covered in some measure by sections 3186, 3189, and 11239 of the Revised Codes of 1921, and that different penalties are prescribed for infractions of these several statutes.
Section 3189 was enacted as section 1 of Chapter 202 of the Session Laws of 1921, page 400. The court, having this section (3189) in mind, and without objection, instructed the jury that the statute upon which this information is based, “or so much thereof as is applicable to this particular case, reads as follows: ‘It shall be unlawful for any person to sell, barter, exchange, distribute, give away, or in any manner dispose of, at retail, or to a consumer, opium or coca leaves, or any compound, manufacture, salt, derivative, or preparation thereof, within this state, except upon the original written prescription of a duly licensed physician, duly licensed to practice medicine in Montana.’ ” Penalties for the violation of this section are provided for in section 3202, Revised Codes of 1921, as amended by the Nineteenth Legislative Assembly. (Sess. Laws 1925, p. 39.) It will be noted that the word “cocaine” does not appear in section 3189, which is a part of the Political Code; bnt it is one of the drugs specified in section 11239, enacted in 1895 as a part of the Penal Code, which provides that every person who sells, or in any way disposes of, to another person, any morphine, opium, cocaine, chloral hydrate or any of their compounds, except to licensed physicians, or on the authority of a certificate of such licensed physician, is punishable by a fine not exceeding $200.
In section 3186, enacted in 1911, reference is made to opium, morphine, alkaloid cocaine and other drugs. Here the penalty is not less than $50 nor more than $500, or by imprisonment in the county jail for a period of not less than sixty days nor more than 100 days, or by both such fine and imprisonment. (Sec. 3188, Rev. Codes 1921.)
An examination of the statutes convinces us that the legislative assembly, in enacting Chapter 202 of the Laws of 1921, intended thereby to supersede the provisions of sections 11239 and 3186 in so far as they relate to opium or coca leaves, or any compound, manufacture, salt, derivative or preparation thereof. The legislative purpose undoubtedly was to curb the illicit traffic in the drugs comprehended which, as everybody knows, then was becoming a serious menace to the body politic. The last section of Chapter 202 provided heavy penalties for an infraction of the Act. An attempt to increase these penalties in 1923 failed (State v. Mark, 69 Mont. 18, 220 Pac. 94), but in 1925 the legislative assembly again took,up the subject and by amending section 3202 (formerly Chapter 202, 'sec. 15) provided the heavy penalties which now obtain (Sess. Laws of 1925, p. 39), and under the weight of which the defendant suffers.
To the extent, then, that section 3189 comprehends, or conflicts with, the subject matter of sections 3186 and 11239, it supersedes those sections and is controlling. (State v. Miller, 69 Mont. 1, 220 Pac. 97; In re Naegele, 70 Mont. 129, 224 Pac. 269.) The court’s assumption that the information rests upon section 3189 was correct.
The main argument for defendant, however, proceeds upon the hypothesis that the state failed to prove the essential allegation that the substance which the defendant sold was derivative of coca leaves. There was ample proof that the defendant sold a package of cocaine to Davis, the state’s witness. But is cocaine a derivative of coca leaves? The only evidence upon the point was given by one Williamsen, a chemist, who testified that he found the contents of the package which the defendant sold “to be cocaine; cocaine is an active alkaloid of the coca leaf or leaves.” It is insisted that, as the witness did not tell the jury that cocaine is a derivative of coca leaves, there is a total failure of proof on this essential allegation. Many definitions of the words “alkaloid,” “derivative,” and “cocaine” are presented in the brief. After a comparison of these and an analysis of the proof we think defendant’s point, though ingenious, is not substantial.
The witness said: “Cocaine is an active alkaloid of the coca leaf or coca leaves.” The key to the interpretation of this sentence is “of.” This preposition as here employed means “from” (Webster’s New International Dictionary); it denotes origin, source, or that from which something issues, proceeds, or is derived. “Do men gather grapes of thorns, or figs of thistles?” (Matthew, vii: 16. Century Dictionary.) A derivative is that which is derived; anything obtained or deduced from another. (Same authorities.) The use of the word “alkaloid” by the witness was not important. He might as well have nsed the comprehensive words “substance.” Had he said “substance,” probably no question would have been raised. An alkaloid from coca leaves necessarily is a derivative of coca leaves.
2. It is insisted that the court erred in overruling the ob- jeetion of defendant to the admission in evidence of the package alleged to have been sold to Davis.
Peter Lauritsen and Henry Davis, at the time the offense is alleged to have been committed were federal narcotic agents Davis testified that he went to the door of Wong Fong’s office or drugstore, but the door was closed. He knocked, the defendant opened the door and Davis went in. Being asked what he wanted, Davis replied, “Five dollars’ worth of cocaine.” Defendant said, “Give me the $5.” And then, said Davis: “I gave him the $5, and he says, ‘Step outside,’ and I stepped outside. In a few minutes he proceeded to open the door and stepped out in the hallway and handed me the bindle of cocaine.” Lauritsen saw Davis receive the package from the defendant; this Davis retained in his hand until he gave it to Lauritsen, his superior. The two then went to the Columbia Apartments where they placed their initials and the date upon the package. Thereafter Lauritsen gave it to Under-sheriff Stone. It was then in the same condition in which it was when received by Davis, except' that Lauritsen “took a very small speck of it on a knife blade to test it,” as he said. At the trial both men identified the package. Stone testified that Lauritsen gave him the package which he, Stone, retained in his possession at all times until he gave it to the county attorney on the morning of the trial, and said: “It is in the same condition as when I received it from Mr. Lauritsen except that Mr. Harry Williamsen opened it in my office and took a small particle out and examined it. * * * This is the package I received from Mr. Lauritsen.”
On cross-examination the witness testified that when he received the package from Lauritsen he put it in an envelope, which he referred to as “this envelope,” sealed it and placed it in a lock box “in the vault.” While the vault is open during the day the place where the package was kept was not. The only time the witness had occasion to see the package after he put it in the lock box was when the witness Williamsen “undertook to analyze it.” These questions and answers followed: “Q. That is the only time you had it in your possession, and when Mr. Williamsen analyzed it? A. Yes, sir. Q. Then you don’t know whether any one else handled it or not during that time of course, do you? A. No, I do not.” Upon this state of the record it is urged that it was not shown that the package was in the same condition as when delivered to Stone. Counsel say there was opportunity for tampering with it and changing or substituting its contents.
We do not see merit in this position. All the positive testimony indicates that the package, when offered in evidence, was substantially in the same condition as when received from the defendant. It was not incumbent upon the state to prove that it could not have been tampered with. It was not necessary that all possibility of its having been tampered with should be excluded by affirmative testimony. (State v. Cook, 17 Kan. 392.) It was only necessary to identify the package and to make a prima facie showing that there had been no substantial change in it to warrant its introduction in evidence. “Articles which are shown by the evidence to be connected with the crime, or which serve to unfold or explain it, may be accepted in evidence, provided they are properly identified,” and provided there has been “no substantial change” in them. (State v. Byrne, 60 Mont. 317, 199 Pac. 262; 16 C. J. 618.) If the prima facie showing made by the state were incorrect, the way was open to defendant to show the contrary; but this he did not attempt to do. The court ruled correctly.
3. Counsel for defendant objected, unsuccessfully, to three questions on the ground that they were leading. None of these was of any special importance; they were explanatory in character and under the circumstances were not harmful to the defendant. Speaking upon this very question in State v. Kanakaris, 54 Mont. 180, 169 Pac. 42, it was as serted that: “This court does not reverse a judgment of conviction for mere technical irregularities, which could not affect injuriously any substantial rights of the accused.” It is the duty of this court, after hearing an appeal in a criminal case, to give judgment without regard to technical errors or defects which do not affect the substantial rights of the parties. (Sec. 12125, Rev. Codes 1921; State v. McConville, 64 Mont. 302, 209 Pac. 987; State v. Russell, 73 Mont. 240; 235 Pac. 712.)
The judgment and order are affirmed.
'Affirmed,.
Associate Justices Holloway, Galen, Stark and Matthews concur. | [
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JUSTICE WEBER
delivered the Opinion of the Court.
Defendants, James and William Cereck, appeal the decision of the District Court of the Eighth Judicial District, Cascade County, which awarded damages for breach of a contract to sell grain to plaintiff, Columbia Grain International. We affirm.
The issues for review are restated as follows:
1. Did the District Court err in finding that an oral contract existed for the sale of grain between the parties?
2. Did the District Court err in determining that the statute of frauds did not apply as a defense to enforcing the contract?
3. Did the District Court err in calculating damages?
James and William Cereck (the Cerecks) formed a partnership in 1972 to raise and market grain. Columbia Grain International (Columbia Grain) operates a grain elevator in Great Falls, Montana and regularly deals in buying and selling grain. This appeal concerns an alleged oral agreement between Columbia Grain and the Cerecks to buy and sell 6,500 bushels of No. 1 dark northern spring wheat to be delivered to Columbia Grain’s Great Falls elevator in June of 1988.
Marcus Raba (Raba), a grain buyer for Columbia Grain, testified that he initially contacted James Cereck on May 2, 1988 concerning the purchase of the grain at issue here. At that time, James Cereck did not agree to sell. Raba further testified that he had a total of six conversations with James Cereck throughout May, and that each time, Cereck did not commit to a sale. Raba was away on vacation for two weeks in early June. Raba testified that on June 14, 1988, after he had returned from his vacation, he again spoke with James Cereck over the telephone and Cereck agreed to sell 6,500 bushels of No. 1 dark northern spring wheat at $4.05 per bushel, for a total contract price of $26,325.00.
Raba prepared a "workup" copy of the contract terms while he spoke with James Cereck. He testified that he read the terms back to James Cereck to make certain the terms were clear. He further testified that he considered the grain sold to Columbia Grain on June 14, 1988, when James Cereck told him over the telephone that he would sell 6,500 bushels of grain to Columbia Grain. Raba delivered a copy of the workup to a Columbia Grain merchandiser who in turn sold the grain to a third party.
Columbia Grain’s office staff prepared a written Contract of Purchase from the workup copy, dated June 14, 1988. Raba then signed the Contract of Purchase and mailed two copies to the Cerecks at James Cereck’s address. James Cereck testified that he received the copies within a day or two of their conversation and then left on a vacation of a week to ten days.
Neither of the Cerecks signed or returned the contract copies to Columbia Grain. However, Columbia Grain sold the grain in the open market in reliance on the sale.
The price of grain rose significantly after June 14, 1988. The Cerecks did not deliver the grain to Columbia Grain. On July 12, 1988, Raba contacted James Cereck about delivery of the grain. James Cereck advised him that the Cerecks would not deliver the grain and did not feel obligated to deliver because neither of them had signed the contract. Raba asked James Cereck to reconsider. The next day, Raba again contacted James Cereck and Cereck again refused to deliver the grain. The Cerecks later sold their grain to another elevator for $4.45 per bushel. On July 14, 1988, Columbia Grain purchased 10,000 bushels of grain from another seller for $4.68 per bushel.
Columbia Grain brought this action against the Cerecks to recover contract damages. The Cerecks raised the statute of frauds defense in a motion to dismiss which the District Court denied. The Cerecks later filed an answer generally denying the existence of a contract. The Cerecks did not affirmatively plead the statute of frauds as a defense, nor did they move to amend the pleadings to add the statute of frauds as a defense. After trial, the District Court found that an oral contract existed between the parties and concluded that the contract was enforceable because the Cerecks had waived their right to rely on the statute of frauds defense by not affirmatively pleading it in their answer. The Court further found that damages equaled the difference between the contract price of $4.05 per bushel and the $4.68 per bushel that Columbia Grain paid to replace the grain on July 14, 1988.
I.
Did the District Court err in finding that an oral contract existed between Columbia Grain and the Cerecks for the sale of 6,500 bushels of grain?
The District Court found that the Cerecks and Columbia Grain entered into an oral contract. Under its terms, Columbia Grain agreed to buy and the defendants agreed to sell 6,500 bushels of No. 1 dark northern spring wheat for $4.05 per bushel. The grain was to be delivered to Columbia Grain’s Great Falls elevator in June 1988. The court further found that the contract terms were as alleged by Columbia Grain and that the Cerecks had breached this express oral contract.
The Cerecks conténd that there is no contract here because there was no mutual consent of the parties as required by § 28-2-102, MCA. They argue that they consented only to discuss the price offered by Columbia Grain, but did not consent to sell the grain on June 14,1988 at the price of $4.05 per bushel. They contend that James Cereck communicated his lack of consent by telling Raba that he would have to discuss the proposed price with his brother, William Cereck, and that he expressed a desire not to enter into a contract until after he had discussed Columbia Grain’s proposal with his brother.
Columbia Grain contends that § 30-2-204, MCA, provides that a contract for the sale of grain can be made in any manner sufficient to show agreement. Section 30-2-204, MCA, provides in pertinent part:
Formation in general. (1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract. ...
The District Court’s finding that an oral contract existed was based on the prior course of dealing between the parties and the general practices in the industry.
The standard of review for a district court’s findings of fact is whether they are clearly erroneous. Interstate Production Credit Ass’n v. DeSaye (1991), 250 Mont. 320, 322, 820 P.2d 1285, 1287. To determine whether a finding is clearly erroneous, this Court uses the following three-part test: (1) the Court will review the record to see if the findings are supported by substantial evidence; (2) if they are supported by substantial evidence, we determine if the trial court has misapprehended the effect of the evidence; and (3) if the findings are supported by substantial evidence and the trial court has not misapprehended the effect of the evidence, the Court may still find that a finding is clearly erroneous although there is evidence to support it, if a review of the record leaves the Court with the definite and firm conviction that a mistake has been made. DeSaye, 820 P.2d at 1287.
The District Court’s finding is supported by substantial evidence. The evidence established that the Cerecks were experienced in farming and the sale of crops. Both were raised on a farm and, at the time of this contract, had been partners in their grain operation for eighteen years. Both Cerecks testified they were familiar with the methods farmers use to market their grain.
The evidence presented at trial also established that during the period from September 26, 1980, through February 12, 1988, the Cerecks entered into eighteen separate grain sales transactions with Columbia Grain. Each time, Columbia Grain prepared a contract on its standard form and mailed the first two copies to the Cerecks at James Cereck’s address. The Cerecks never returned signed copies of any of the former contracts.
Testimony established that it is not unusual for farmers not to return signed contracts to the buyer. Other testimony established that Columbia Grain buys most of its grain over the telephone and mails contracts to the selling farmer. Rada testified that this is standard industry practice and that it is impracticable to buy grain in other ways because of the distance involved and daily grain price fluctuations.
When a farmer has agreed to sell grain over the telephone, it is Columbia Grain’s business practice to repeat the terms back to the farmer to make sure the farmer has agreed to them. A workup copy is not submitted to accounting department staff unless a sale is agreed to. When a sale is agreed to, the information is then transcribed by the accounting department onto a printed “Contract of Purchase” form which is signed by the grain buyer. Two copies of the Contract of Purchase are then mailed to the seller.
Typically, James Cereck handled grain sales transactions for the partnership. He had dealt with Raba on several occasions in the previous one and one-half years. At the time of trial, Raba had been a grain buyer for twelve years. Raba also testified that he keeps a daily record of his conversations with farmers. He testified that there were times he and James Cereck would communicate frequently and James Cereck would not agree to sell. No contract was mailed to the Cerecks in those instances. Raba and representatives of other grain companies which had also dealt with the Cerecks testified that James Cereck always sold the grain for the partnership and that he had never told them he would have to discuss an offer with his brother before a sale could be final. Raba had spoken with James Cereck on six separate days in May of 1988 regarding the sale of the grain involved in this action. Raba was gone for a two-week vacation in early June. When he returned, he and James Cereck had the conversation at issue here.
Clearly, James Cereck was experienced in selling grain. From prior dealings with Columbia Grain, he was also familiar with Columbia Grain’s procedures. There is substantial evidence in the record to support the findings made by the District Court. We conclude that the conduct of both parties is sufficient to show consent to the contract here. We further conclude that the District Court has not misapprehended the effect of the evidence and our review of the record does not leave us with a firm and definite conviction that a mistake has been made.
We hold the District Court correctly determined that an oral contract existed between Columbia Grain and the Cereck’s to buy and sell 6,500 bushels of grain.
II.
Did the District Court err in determining that the statute of frauds did not apply as a defense to enforcing the contract?
The statute of frauds provision in the Montana Uniform Commercial Code states that a contract for the sale of goods for $500.00 or more is not enforceable unless in writing and signed by the party against whom enforcement is sought. Section 30-2-201(1), MCA. The contract here involved the sale of goods for over $500.00. However, the District Court concluded that the Cerecks had failed to affirmatively plead the statute of frauds as a defense, had thereby waived their right to rely on the statute of frauds as a defense and were barred from using the defense.
The Cerecks argue that they should be allowed to use the statute of frauds defense because they raised it in a motion to dismiss, because both parties had argued it before the District Court during the pleadings stage of the proceedings, and because Columbia Grain was aware the Cerecks were relying on the defense. They further contend that Columbia Grain was precluded from objecting to the use of the defense because it raised the objection in its case in chief, was prepared to argue it and did not show any prejudice by allowing evidence concerning the defense.
We review a district court’s interpretations of the law to determine whether they are correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 803 P.2d 601.
The Cerecks’ motion to dismiss and subsequent motion for summary judgment were both based on the statute of frauds defense. However, they made no motion to amend their answer at any time to include the affirmative defense of the statute of frauds. Rule 8(c), M.R.Civ.P., provides:
Affirmative defenses. In pleading to a preceding pleading, a party shall set forth affirmatively accord and satisfaction, arbitration and award, assumption of risk, contributory negligence, discharge in bankruptcy, duress, estoppel, failure of consideration, fraud, illegality, injury by fellow servant, laches, license, payment, release, res judicata, statute of frauds, statute of limitations, waiver, and any other matter constituting an avoidance or affirmative defense. ... (Emphasis supplied.)
Rule 8(c) precludes a defendant from using the statute of frauds as a defense when it has not been raised in the pleadings.
The Cerecks first alluded to the statute of frauds defense in their motion to dismiss. They again argued the defense in their summary judgment motion. The Cerecks contend that Rule 15(b), M.R.Civ.P., allows them to rely on the defense because Columbia Grain impliedly consented to the defense. Rule 15(b), M.R.Civ.P., provides:
Amendments to conform to the evidence. When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. ...
This Court has previously addressed this same issue with regard to waiver as an affirmative defense. Waiver was not raised in either the defendant’s answer or in a subsequent motion for summary judgment in Butte Teachers’ Union Local No. 332 v. Board of Trustees (1982), 201 Mont. 482, 655 P.2d 146. In that case, the defense was first presented in a memorandum and supporting affidavit in opposition to the plaintiff’s motion for summary judgment. Because the plaintiff continued to maintain its objection to the defendant’s allegations of waiver, this Court stated:
Therefore, it cannot be said that an issue not raised by the pleadings was tried by the express or implied consent of the parties, as Rule 15(b), M.R.Civ.R would permit. Cf. Reilly v. Maw (1965), 146 Mont. 145, 405 P.2d 440, wherein implied consent was found on the basis that evidence extrinsic to the claim plead, was admitted at trial without objection. (Emphasis in original.)
Butte Teachers’ Union, 655 P.2d at 148. Although the motion to dismiss may have put Columbia Grain on notice that the Cerecks intended to rely on the statute of frauds as a defense, Butte Teachers’ Union requires that the opposite party raise no objection in order for implied consent to operate under Rule 15(b), M.R.Civ.P.
The Cerecks claim that Columbia Grain did not object to the use of the statute of frauds in any of its documents or at the hearing on the summary judgment motion and, further, that Columbia Grain argued the merits of the defense. The Cerecks claim, therefore, that Columbia Grain impliedly consented and the pleadings should be treated as amended to include the defense. The Cerecks also claim that Columbia Grain impliedly consented by its actions at trial in eliciting testimony from witnesses and by arguing the defense. Specifically, they cite the following from the transcript, where Columbia Grain’s counsel responded to the Cerecks’ objection to the introduction of a loan form signed by James Cereck as being irrelevant: “[A]gain I think it goes to the practice of farmers, the business of farmers, and I think it relates again back to what I anticipate is going to be the defense here with respect to the statute of frauds.”
Columbia Grain contends that it has maintained its objection to the Cerecks’ use of the defense throughout the proceedings. The Cerecks admit that Columbia Grain did object at the trial to the use of the statute of frauds as a defense for failure to plead it. We conclude that by objecting at trial to the use of the statute of frauds for failure to plead it and by resisting the defense at pre-trial proceedings, Columbia Grain did not impliedly consent under Rule 15(b), M.R.Civ.P., to the Cerecks’ use of the statute of frauds defense.
We hold the District Court correctly determined the statute of frauds did not apply as a defense to enforcing the contract.
III.
Did the District Court err in calculating damages?
The District Court determined that Columbia Grain bought other grain on July 14, 1988 to replace the grain the Cerecks did not deliver. Columbia Grain purchased the replacement grain for $4.68 per bushel, which turned out to be the high price of the season. The court awarded damages of $4,095.00 based on the difference between $4.68 and the $4.05 contract price.
The Cerecks contend that Columbia Grain failed to show any damages resulting from the contract breach. Alternatively, they contend that the only damages proven are $.07 per bushel, the margin of profit for this transaction as testified by Raba. They also argue that no evidence was offered to show when the grain was purchased or for what price and, therefore, the damages are speculative and Columbia Grain has not met its burden of proving damages as required under § 27-1-311, MCA.
The Cerecks’ arguments have no merit. Damages for breach of a contract for the sale of goods are governed by § 30-2-711(1), MCA, which provides in pertinent part:
Buyer’s remedies in general .... (1) Where the seller fails to make delivery or repudiates ... then with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (30-2-612), the buyer may cancel and whether or not he has done so may in addition to recovering so much of the price as has been paid:
(a) “cover” and have damages under the next section as to all the goods affected whether or not they have been identified to the contract ...
Section 30-2-712, MCA, provides:
“Cover” — buyer’s procurement of substitute goods. (1) After a breach within the preceding section the buyer my “cover” by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.
(2) The buyer may recover from the seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages as hereinafter defined (30-2-715), but less expenses saved in consequence of the seller’s breach... (Emphasis supplied.)
In addition to the provisions outlined above, § 30-2-713, MCA, provides that the measure of damages for nondelivery or repudiation is the difference between the market price and the contract price at the time the buyer learns of the breach.
Columbia Grain covered the undelivered grain without unreasonable delay. They had no way to know that $4.68 would be the high price that season for No. 1 dark northern spring wheat. Columbia Grain testified that to meet its obligations to the buyer, it could not wait longer for delivery from the Cerecks after James Cereck refused to deliver on July 13, 1988. We conclude the Montana Uniform Commercial Code provision for damages based on cost to cover as used by the District Court was the correct measure of damages here.
We hold the District Court correctly calculated damages. Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, TRIEWEILER and HUNT concur. | [
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JUSTICE HARRISON
delivered the Opinion of the Court.
This is an appeal from the Eighth Judicial District, Cascade County, the Honorable Thomas M. McKittrick presiding. Appellant Gordon Sullivan (Gordon) appeals from an order holding him in contempt, determining child support, allocating tax exemptions and medical costs, and refusing to modify child support retroactively. He also appeals from an order awarding attorney’s fees to respondent Annette Sullivan (Annette). We affirm in part, reverse in part, and remand for further proceedings.
Gordon raises the following issues on appeal:
1. Did the District Court err in determining the amount of child support?
2. Did the District Court err in allocating the tax exemptions and medical costs?
3. Did the District Court err in refusing to modify child support retroactive to the time Gordon filed his first motion for modification?
4. Did the District Court err in holding Gordon in contempt and awarding Annette her attorney’s fees and costs?
Gordon and Annette were married on July 18,1970. They dissolved their marriage under the terms of a Decree of Dissolution entered by the District Court on September 19, 1985. Three children — Riley, Amanda, and Ryan, all minors at the time of the dissolution — were born of the marriage. The decree incorporated the provisions of a Property Settlement Agreement dated September 17,1985 (the 1985 agreement). The agreement provided that: 1) the parties would have joint custody of the children with Annette given exclusive discretion to determine the primary residence; 2) Gordon would pay Annette child support of $150 per child per month through the clerk of the district court; 3) child support would increase to $175 a month per child in one year, and $200 a month per child two years from the date of the agreement; 4) Gordon could claim Amanda and Ryan for income tax exemptions if his child support and maintenance obligations were current; 5) Gordon would provide medical and dental insurance and be responsible for the deductibles for the children during their minority, while both parties would be responsible for expenses not covered by insurance; and 6) the successful party would be awarded reasonable attorney’s fees in any action commenced to enforce, modify, or interpret any provision of the agreement.
At the time of the dissolution Gordon worked as the Director of Marketing and Special Projects at Columbus Hospital, earning approximately $36,000 a year from all sources. Annette worked as a secretary earning approximately $10,000 a year from all sources.
In 1985 or 1986, Gordon suffered a work-related back injury which he exacerbated a few years later. He received $568 bi-weekly workers’ compensation benefits through December 1989, at which time he received a $14,900 lump sum impairment award. The hospital ehminated Gordon’s position on April 4,1988, before he could return to work.
In August 1988, Annette moved for an order requiring Gordon to show cause why he should not be held in contempt for failing to pay over $3,000 in past due child support payments, letting the health insurance coverage lapse, failing to pay maintenance, and failing to pay necessary dental bills for his children. Gordon responded to that motion with a counter-motion, based on his reduced income, asking the court to reduce the amount of child support and require Annette to obtain insurance.
On December 19, 1989, the parties finally entered into a stipulation (the 1989 stipulation) regarding enforcement of the 1985 agreement. The District Court entered an order 1) requiring the parties to abide by the stipulation; 2) modifying the 1985 agreement where inconsistent with the stipulation; 3) entering judgment against Gordon pursuant to the stipulation; and 4) modifying child support to $200 a month for each of two children, eliminating child support for Riley who was living with Gordon at that time.
In the 1989 stipulation, the parties agreed:
1. Gordon owed Annette $3,600 in past due maintenance but was to have a credit of $2,992.98 as an offset against that amount;
2. Gordon owed Annette $4,920 in past due child support that was to be offset by $1,500 for the amount Annette owed Gordon because Riley lived with Gordon for ten months in 1989;
3. Gordon owed Annette $1,300 in attorney’s fees she incurred in bringing her motion to enforce the dissolution decree.
Gordon further stipulated that any child support or maintenance arrearages, or any obligations agreed to under the stipulation would become an attachment on any lump sum payment he received for his workers’ compensation claim. Gordon received a $50,000 lump sum settlement of his claim in November 1990.
On November 13, 1990, Gordon renewed his original motion to modify child support, which he had made in 1988, and asked that the modification be retroactive to his first motion. He also asked that he be allowed to claim as tax exemptions the two children who were then living with him.
Annette responded by asking the court to hold Gordon in contempt for failing to comply with the court order enforcing the 1989 stipulation. She also asked the court to determine the new amount of child support effective October 23,1990 — the date the parties entered into a stipulation modifying residential custody and allowing for re-examination and reduction of child support.
After a hearing on the renewed motion to modify child support, the court entered its findings of fact, conclusions of law and order on February 28, 1991:
1. Holding Gordon in contempt for failing to pay from his lump sum workers’ compensation settlement, all sums due and owing;
2. Holding Gordon responsible for Annette’s attorney’s fees;
3. Setting Gordon’s child support obligation at $72 per month for the one child still living with Annette;
4. Ordering Gordon to pay Annette $9,324.13 and to immediately release to Annette as partial payment the $6,520 held in escrow by the clerk of the district court;
5. Requiring Annette’s attorney to submit an affidavit of attorney’s fees;
6. Allowing Annette tax exemptions for Amanda and Ryan and allowing Gordon an exemption for Riley for the year 1990.
Gordon moved to alter or amend this judgment. The court denied this motion except for a correction to give Gordon credit for $1,000 Annette had previously received.
The court held a hearing on attorney’s fees on March 25,1991, after which it ordered Gordon to pay Annette $3,357.25 as her reasonable attorney’s fees.
Gordon appeals from the order dated February 28, 1991, from the order awarding attorney’s fees, and from an order denying his motion to alter or amend the judgment.
I
Did the District err in determining the amount of child support?
At the hearing on Gordon’s renewed motion, Annette presented testimony from John Koch, a staff attorney for the Montana Department of Social and Rehabilitation Services, Child Support Enforcement Division. Mr. Koch explained how he determined on Worksheet #2 that Gordon owed Annette $72 per month in child support. He based his calculation on a gross income of $32,450 for Gordon. This was a two-year average of the $14,900 Gordon received in 1989 and the $50,000 he received in 1990. Gordon assigns error to the court’s use of these figures to determine gross income because they are, according to Gordon, a replacement of a stream of income. He argues the $50,000 is meant to be a replacement of income at arate of $149.50 per week over nine and one-half years under § 39-71-701, MCA.
Workers’ compensation benefits are one of the factors to be considered in determining child support under § 40-4-204(2), MCA. See In re Marriage of Durbin (1991), 251 Mont. 51, 823 P.2d 243. They are also specifically included as an item of gross income under the regulations promulgated by the Department of Social and Rehabilitation Services. 46.30.1508(1)(a), ARM.
Mr. Koch testified that there was no specific rule on how a lump sum award of workers’ compensation benefits should be treated. Mr. Koch agreed that it would be reasonable to spread the benefits over the nine and one-half years they were intended to replace, but said that “[w]e essentially want to leave that up to a trier of fact to determine.” In its findings of fact the District Court found that: 1) Gordon had received $598 bi-weekly payments for most of 1989; 2) Gordon received a $14,900 lump sum (impairment award) in 1989; 3) Gordon received a $50,000 lump sum settlement of his workers’ compensation claim in 1990; 4) after receiving the settlement in 1990 he bought ski equipment for each of his children, himself, and his current wife, and he bought ski passes for each of these people except for Ryan, who was living with Annette; 5) Gordon purchased two vehicles in late 1990; 6) Gordon spent over $26,000 of his settlement between November 1990 and January 21,1991; 7) Gordon presented no authority supporting his claim that the Child Support Guidelines provide for spreading the income over nine and one-half years.
Based on the foregoing findings, the District Court concluded that the worksheet prepared by Mr. Koch was a “reasonable method for determining the child support due and owing under this fact situation.” Specifically the court relied on the fact that Gordon had not treated the lump sum as if it would last for nine and one-half years and that it would be spent by June 1991.
A presumption exists in favor of the district court’s determination of child support, and that determination will only be overturned where the court abused its discretion. In re Marriage ofSacry (1992), 253 Mont. 378, 382, 833 P.2d 1035, 1038.
Here, the District Court properly found that Gordon would have spent the entire $50,000 lump settlement by June of 1991. However, it did not find, nor was there any evidence to suggest, that Gordon would receive further workers’ compensation benefits. Therefore, there was no basis for presuming that Gordon’s income would be $32,450 after 1990. Athough we sympathize with the District Court in its dilemma, we conclude that it abused its discretion in attributing that amount of income to Gordon after 1990.
In the 1989 stipulation, the parties agreed on the amount of support Gordon owed as of December of that year. We will not disturb the amounts agreed to in that stipulation. (See our discussion of Issue I.) For 1990, we believe that the child support in this case should be determined based on the income Gordon actually received that year. Therefore, the $50,000 lump sum settlement should be used to determine his obligation for 1990. A second calculation will then be necessary to determine the amount of child support due beginning in 1991.
Under the unique facts of this case, we believe this method accurately reflects the manner in which Gordon treated his income and at the same time reflects the fact that Gordon -will apparently not receive future workers’ compensation benefits. We therefore remand for a redetermination of child support.
II
Did the District Court err in determining the allocation of tax exemptions and medical costs?
We will first address the allocation of tax exemptions. The dissolution decree and the 1985 agreement provided that Annette would be entitled to claim Riley for the taxable year 1985 and any other year thereafter and that Gordon would be entitled to claim Amanda and Ryan for 1985 and thereafter provided that he was current on his child support obligation. At that time Annette was the primary residential custodian of all three children. In December 1989, the parties agreed and the court entered an order recognizing Gordon as the primary residential custodian of Riley. On October 23, 1990, the parties stipulated that Gordon would be the residential custodian of Amanda as she had been living with him since August of that year.
The order of February 28, 1991, allowed Annette to claim tax exemptions for Ryan and Amanda for 1990 and allowed Gordon to claim Riley as an exemption. Amanda had lived with Annette until August of 1990. This order does not comport with the tax exemption arrangement in the 1985 agreement, rather it comports with the tax code. See I.R.C. §§ 151, 152. The court then ordered that future tax exemptions would be determined by the tax code and by the 1985 agreement. Gordon takes issue with this order because he claims the tax regulations and the 1985 agreement are in conflict with each other and with the current custody arrangement. It appears that the tax exemption provision of the agreement no longer applies as the parties have stipulated to a change in custody and they do not challenge the 1990 arrangement, which is in line with the tax code. This appears to leave the parties to follow only the tax regulations in the future, and does not warrant a remand on this issue.
Gordon also claims error because the court awarded a combined principal and interest payment of $373.16 to Annette based on a principal of $336.47 which he claims he does not owe. Gordon’s claim arises only because he has not looked closely at the pertinent exhibit. That exhibit clearly identifies the payment as one for “medical + premium.” This combines two amounts stipulated in the 1989 stipulation. Gordon claims there is no figure of $336.47 contained in that agreement. True. But the amount is the sum of an $80 insurance premium and $256.47 in medical bills. We hold there was no error.
III
Did the District Court err in failing to make the modification of child support retroactive to the time Gordon filed his first motion for modification?
Gordon claims the District Court should have made the modification retroactive to his October 20,1988, counter-motion to modify child support. The 1989 stipulation governs here. In the stipulation, Gordon agreed to the amount he owed in past due child support. He also agreed to the entry of an order based on that stipulation. Annette gave up any other claims which were past due and owing, other than those included in the stipulation. Gordon now argues that the court should reopen that order and modify what the parties agreed. However, the District Court was bound by the terms of the stipulation as they were not contrary to law, court rule, or public policy. School Dist. No. 4 v. Colburg (1976), 169 Mont. 368, 372, 547 P.2d 84, 86-87. See also Morris v. McCarthy (1972), 159 Mont. 236, 497 P.2d 102 (district court properly dismissed complaint where plaintiff had stipulated in a prior action that he would be bound in a later action by the property damage award in the first action).
The District Court did not err in refusing to make the modification retroactive, especially where Annette gave up some claims in order to reach the stipulation.
rv
Did the District Court err in holding Gordon in contempt and awarding attorney’s fees and costs?
In the 1989 stipulation, Gordon agreed that the arrearages and other obligations would become an attachment on any lump sum payment he received from his workers’ compensation claim. When Gordon received that settlement in November 1990, rather than directly giving Annette the money he agreed he owed her, he placed $7,520 — the amount of principal he determined he owed Annette — in escrow with the clerk of the district court pending the outcome of the hearing on his renewed motion. He dissipated most of the remaining money. The District Court held Gordon in contempt for failing to pay Annette the agreed sum in a timely fashion. Generally, contempt orders are final, conclusive, and not appealable except by writ of certiorari. Section 3-1-523, MCA. However, an exception is made for dissolution proceedings, although we must limit our standard of review to whether the district court acted within-its jurisdiction and whether the evidence supports the findings. In re Marriage of Sessions (1988), 231 Mont. 437, 441, 753 P.2d 1306, 1308. Here, the stipulation provided that Annette was to have an attachment against Gordon’s workers’ compensation settlement in an agreed amount. When Gordon received that settlement, he failed to release the money he agreed he owed to Annette in a timely fashion. Therefore, the evidence supports the court’s finding.
Lastly, Gordon argues that the District Court erred by awarding Annette her attorney’s fees and costs. In its findings in its Order Awarding Attorney’s Fees, the District Court found that: 1) Annette was seeking attorney’s fees to pay for expenses incurred to enforce a previous court order for child support; 2) she had negotiated a lien on Gordon’s workers’ compensation settlement that was not honored by Gordon’s attorneys; 3) she had to take extraordinary measures to discover his income; 4) he did not timely release funds that he knew were owing for past due child support; 5) Gordon had over $80,000 income for a two-year period that was not subject to state or federal deductions; 6) Gordon’s actions unreasonably increased Annette’s attorney’s fees; and 7) the amount submitted by Annette was a reasonable amount for attorney’s fees.
The property settlement agreement provided for an award of attorney’s fees to the prevailing party. Section 40-4-110, MCA, also provides authority for awarding attorney’s fees. Under the statute, an award of attorney’s fees is discretionary and will not be disturbed absent an abuse of that discretion. In re Marriage of Swanson (1986), 220 Mont. 490,496,716 P.2d 219,223. We look to whether substantial credible evidence supports the findings. In re Marriage of Hall (1990), 244 Mont. 428,436, 798 P.2d 117,122. Substantial evidence supports the District Court’s findings. It did not abuse its discretion by awarding Annette her reasonable attorney’s fees.
Affirmed in part, reversed in part, and remanded for further proceedings in conformity with our holding.
JUSTICES GRAY, HUNT, TRIEWEILER, McDONOUGH and WEBER concur. | [
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CHIEF JUSTICE TURNAGE
delivered the Opinion of the Court.
Gary Ernest Henning (Henning) appeals an order denying his Motion in Limine to suppress the results of a blood alcohol test. The order was entered on December 30, 1992, in the Fourth Judicial District, Ravalli County. This appeal followed the entry of the Amended Judgment on February 2, 1993, in Ravalli County, which county was then in the newly-created Twenty-first Judicial District. We affirm the District Court.
We consolidate and restate the issues raised by Henning as:
Did the District Court err in failing to suppress the results of Henning’s voluntary blood alcohol test?
On April 16,1992, Henning was arrested and charged with driving under the influence of alcohol (DUI), a misdemeanor in violation of § 61-8-401, MCA. After the arrest, the arresting officer asked Henning to submit to a breath intoxilyzer test. Henning refused. However, he asked the arresting officer to take him to Marcus Daly Memorial Hospital in order that a blood alcohol test could be administered at his expense. The arresting officer complied with this request, and a blood sample was taken by a registered nurse at the hospital.
Following a bench trial in Justice Court, Henning was convicted of DUI. Henning appealed his conviction to the District Court. Prior to trial, Henning filed a Motion in Limine in which he asked the court to suppress the results of the blood alcohol test received after he was arrested. Henning alleged the results of the blood alcohol test were inadmissible. After considering the briefs and argument of Henning and the State, the District Court denied the motion. The District Court ruled the blood alcohol test was relevant and admissible, and that the State had demonstrated a compelling interest outweighing Henning’s privacy interest.
After his Motion in Limine was denied, Henning entered into a plea bargain with the State. He agreed to plead guilty and be sentenced for the DUI offense upon the condition that should this Court hold that the results of the blood alcohol test were inadmissible, he will be allowed to withdraw his plea. In addition, Henning asked the District Court to stay any execution of sentence pending this appeal. With the consent of the State, the District Court approved the plea bargain, accepted Henning’s guilty plea, and imposed sentence. The District Court stayed the execution of Henning’s sentence pending appeal.
Did the District Court err in failing to suppress the results of Henning’s voluntary blood alcohol test?
In denying Henning’s Motion in Limine, the District Court ruled that the State had demonstrated a compelling interest which outweighed Henning’s privacy interests. Therefore, the blood alcohol test was admissible under § 50-16-535(1)(i), MCA. In addition, the District Court ruled the blood alcohol test was relevant and admissible in light of State v. Kirkaldie (1978), 179 Mont. 283, 587 P.2d 1298.
Henning argues that under § 50-16-535, MCA, the results of the blood alcohol test are part of his private medical records and privileged information. Therefore, under § 50-16-535(l)(i), MCA, the State must show a compelling interest which outweighs the privacy interests of the patient in order for the results to be admissible. Henning contends the State failed to meet this burden.
While we agree with the District Court’s reliance on Kirkaldie, we do not agree with the court, and Henning, that § 50-16-535, MCA, determines whether the blood alcohol test is admissible into evidence. Section 50-16-535(1)(i), MCA, provides:
(1) Health care information may not be disclosed by a health care provider pursuant to compulsory legal process or discovery in any judicial, legislative, or administrative proceeding unless:
(i) a court has determined that particular health care information is subject to compulsory legal process or discovery because the party seeking the information has demonstrated that there is a compelling state interest that outweighs the patient’s privacy interest^]
When this Court reviews the District Court’s conclusions of law regarding the application of a statute, our standard of review is “whether the tribunal’s interpretation of the law is correct.” Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601, 603.
The exceptions listed in § 50-16-535, MCA, apply to the discovery of health care information. As provided in § 50-16-536(6), MCA:
(6) Production of health care information under 50-16-535 ... does not in itself constitute a waiver of any privilege, objection, or defense existing under other law or rule of evidence or procedure.
The Official Comments to § 50-16-535, MCA, provide:
It is important to note that this section in no way supersedes or modifies the state’s rules of evidence. ... [0]nce health-care information has been discovered under this section, the normal rules of evidence govern its use at trial.
Henning does not contend that the blood alcohol test was not subject to discovery. Therefore, we limit our discussion to whether the District Court erred in failing to suppress the blood alcohol test results.
Although § 50-16-535, MCA, is inapplicable to the main issue in this appeal, we hold, pursuant to Kirkaldie and § 61-8-404(1)(a), MCA, that the result reached by the District Court was correct. Where the result reached by the District Court is correct, it will be upheld on appeal regardless of the reasons given for the conclusion. Jerome v. Pardis (1989), 240 Mont. 187, 192, 783 P.2d 919, 922.
Section 61-8-404(l)(a), MCA, provides:
(1) Upon the trial of any criminal action or other proceeding arising out of acts alleged to have been committed by any person in violation of 61-8-401 or 61-8-406:
(a) evidence of any measured amount or detected presence of alcohol in the person at the time of the act alleged, as shown by an analysis of his blood, breath, or urine, is admissible[.]
We note however, that when a blood alcohol test is based upon the implied consent law, § 61-8-402, MCA, the admissibility into evidence of blood alcohol content is also subject to the procedural safeguards of § 61-8-404(1)(b)(i) and (ii), MCA, and the Administrative Rules of Montana. See e.g., State v. McDonald (1985), 215 Mont. 340, 697 P.2d 1328.
In this case, the withdrawal of Henning’s blood was not based upon the implied consent law. It was the result of his own request after he refused to take the breath test offered to him. Therefore, Henning consented to the taking of a blood sample. “In this state, evidence concerning the taking, analysis and result of a blood sample taken from [a] defendant with his consent is admissible in evidence.” Kirkaldie, 587 P.2d at 1302.
We hold that the District Court did not err in failing to suppress the results of Henning’s voluntary blood alcohol test. Once the evidence was discovered, it was no longer privileged information and the State was entitled to move for its admission at trial. The District Court is affirmed.
JUSTICES HARRISON, HUNT and WEBER concur. | [
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JUSTICE HARRISON
delivered the Opinion of the Court.
This is an appeal from the Fourth Judicial District, Ravalli County, the Honorable Douglas G. Harkin presiding. Appellant Dave Potter (Potter) appeals an order affirming a Board of Labor Appeals decision that in 1987 he was an independent contractor, not an employee, and therefore was not eligible for unemployment insurance benefits. We affirm.
On May 23, 1988, the Department of Labor and Industry (the Department) determined that Potter, a carpenter and mason, had been an independent contractor in 1987. Potter appealed this determination. The Board of Labor Appeals (the Board) adopted the Department’s determination after a telephone hearing on August 30, 1988. Potter petitioned for review in district court, but after discovery the Department agreed to vacate its earlier decision and conduct a second, in-person hearing.
Participants in the second hearing, held on January 28, 1991, included the Department and four of the other respondents in this appeal: John Bruton, Ed Kopfman, Beneke Construction, and Mort Arkava. All of the respondents had hired Potter in 1987 for specific carpentry or masonry projects. The sixth respondent, John Lohden Construction, was not present but did provide documents describing the association between Potter and John Lohden Construction as an independent contractor relationship. The hearing officer sustained the Department’s May 23, 1988 determination that in 1987 Potter was an independent contractor in his association with the respondents. Potter appealed to the Board, which adopted the hearing officer’s findings on June 6, 1991.
Potter again petitioned for judicial review in district court. The court reviewed the parties’ briefs and on June 30, 1992 entered judgment upholding the determination that Potter was an inde pendent contractor when he performed services for the respondent employers.
STANDARD OF REVIEW
Under Section 39-51-2410(5), MCA, the findings of the Board as to the facts are conclusive, if supported by evidence and in the absence of fraud, and the jurisdiction of a reviewing court is confined to questions of law. “Supported by the evidence” means supported by substantial evidence, which is “something more than a scintilla of evidence but may be less than a preponderance of the evidence.” Gypsy Highview Gathering System, Inc. v. Stokes (1986), 221 Mont. 11, 14, 716 P.2d 620, 623. Thus, the District Court must limit its review of the Board’s findings to a consideration of whether they are supported by substantial evidence, and the same standard applies to this Court. Gypsy Highview Gathering System, 716 P.2d at 623. See also Thornton v. Commissioner of Dep’t of Labor & Industry (1980), 190 Mont. 442, 446, 621 P.2d 1062, 1065 (“This Court may not substitute its judgment for that of the trial court or agency as to the weight of the evidence on questions of fact.”). With regard to questions of law, however, our task is to determine whether the agency’s interpretation of the law is correct. Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 803 P.2d 601.
Here, the threshold issue is whether Potter’s status as independent contractor or employee is a question of law or a question of fact. When the facts surrounding a person’s arrangement with employers are relatively undisputed, the question is one of law, and this Court is not bound by the conclusions of the District Court or the Board, as it would be regarding a question of fact. Solheim v. Tom Davis Ranch (1984), 208 Mont. 265, 272, 677 P.2d 1034, 1038. See also Carlson v. Cain (1983), 204 Mont. 311, 317, 664 P.2d 913, 916 (“[W]here there is no dispute as to what the arrangement is, the question of employee or independent contractor status is one of law for the court.”).
When the facts are disputed, as here, the “substantial evidence” test is appropriate. In Hammerquistv. Employment Security Division (1988), 230 Mont. 347, 350, 749 P.2d 535, 537, for example, we held that a hearing officer had applied the proper “legal standard” in determining that a construction worker was an employee and not a partner of a building contractor, but we also held that “substantial evidence supports the hearing officer’s finding and conclusion that no partnership or joint venture exists.” See also Connolly v. Board of Labor Appeals (1987), 226 Mont. 201, 734 P.2d 1211 (substantial evidence test applied to a Board determination of employee misconduct).
Here, the District Court reviewed the hearing officer’s findings of fact, which were adopted by the Board, and found that they were supported in the hearing transcript and were therefore conclusive. This Court also is bound by those findings, to the extent that they are supported by substantial evidence. Larry’s Post Co. v. Unemployment Insurance Div. (1989), 238 Mont. 190, 193, 777 P.2d 325, 327. If the factual findings are supported by substantial evidence, we must then determine whether the Board’s legal conclusion as to Potter’s status was correct. Steer, Inc., 803 P.2d at 603.
THE INDEPENDENT CONTRACTOR ISSUE
Potter was hired by the respondent employers in 1987 for the following projects:
John Bruton: Build shelves and a check-out counter for Bruton’s pharmacy
Ed Kopfman: Lay a cabin foundation slab and remodel the cabin
Beneke Construction: Form and pour concrete walls
John Lohden Construction: Roof a building
Mort Arkava: Lay blocks for a house, grout a wall, and pour concrete for a garage floor
Potter states that he was paid by the hour for his work on all of these projects; that the employers provided most of the tools and all of the materials needed for each job; and that Beneke Construction and Lohden Construction hired him as one of several employees for their respective projects.
The test for determining whether an individual is an independent contractor is stated in § 39-51-201(14), MCA:
“Independent contractor” means an individual who renders service in the course of an occupation and:
(a) has been and will continue to be free from control or direction over the performance of the services, both under his contract and in fact; and
(b) is engaged in an independently established trade, occupation, profession, or business.
Potter clearly meets the second of these criteria. He admits that until 1987 he operated his own business, and most of the respondent employers testified that they had hired him before 1987 as an inde pendent contractor. The hearing officer found that Potter was “independently established in a business” in 1987 because he performed similar work for several persons and “offered his carpentry/masonry services to any person or groups needing help with work he was able to perform.”
Potter claims that in 1987 he “chose to give up his own independent business” and work only as an “hourly employee.” He explains that in 1986 he hired a helper, Steve Anderson, whom he believed to be an independent contractor. The Department, however, determined that Anderson was an employee and that Potter was required to make unemployment insurance contributions. Potter decided then to become an employee himself. In practice, this meant that he asked employers to pay him by the hour instead of by the job. He did not specifically tell them that he was no longer operating his own business, nor did he ask any employer to withhold payroll taxes or to make employer contributions.
We hold that substantial evidence supports the hearing officer’s finding that Potter had an independently established business in 1987.
As to the first criterion, freedom from control, we recognize four factors to be considered:
(1) direct evidence of the right or exercise of control;
(2) method of payment;
(3) furnishing of equipment; and
(4) right to fire.
Johnson v. Dept. of Labor and Industry (1989), 240 Mont. 288, 292, 783 P.2d 1355, 1358, citing Sharp v. Hoerner Waldorf Corp. (1978), 178 Mont. 419, 425, 584 P.2d 1298, 1301-1302. Independent contractor status is usually established only by “a convincing accumulation of these and other tests,” while a finding of employee status can often be “solidly proved on the strength of one of the four items.” Sharp, 584 P.2d at 1302; Walling v. Hardy Construction (1991), 247 Mont. 441, 807 P.2d 1335. We have consistently held, however, that statutes used as guides in determining a worker’s status “must not be distorted to allow persons who are truly independent in their operation to be held employees merely for tax purposes and resulting benefits derived from an employer-employee relationship.” St. Regis Paper Company v. Unemployment Compensation Comm’n (1971), 157 Mont. 548, 552, 487 P.2d 524, 526, quoted in Johnson, 783 P.2d at 1358.
The hearing officer concluded that three of the four factors indicated that Potter was an independent contractor in 1987. First, he found direct evidence of Potter’s right of control in the following facts: each of the employers was interested only in the completed project; most of them were not capable of directing Potter’s day-to-day work activities; and Potter usually performed the work on his own time schedule.
Potter argues that each of the respondent employers possessed and exercised the right to control his work because each one hired him for a specific job, and most of them were at the job site daily, supervising his work and giving directions.
The traditional test of employee status is whether the employer controls only the end result of the work, which indicates that the worker is an independent contractor, or whether the employer controls the means by which the work is accomplished, which indicates that the worker is an employee. Johnson, 783 P.2d at 1358. An employer of an independent contractor, however, “is entitled to as much control of the details of the work as is necessary to ensure that he gets the end result that he bargained for.” Walling, 807 P.2d at 1339.
Here, the record shows that none of the respondent employers controlled the days or hours of Potter’s work, and that all of them except John Lohden Construction relied on Potter’s expertise to complete the job. For example, Lisa Beneke testified that Beneke Construction had no experience with full-wall foundation forms and therefore hired Potter for his expertise in using his own forms to pour a full-wall foundation. The hearing officer found that Potter usually was free to determine the individual means of accomplishing the work he had agreed to do for these employers.
Second, the hearing officer found that Potter provided almost all of the necessary tools, forms, and equipment for the respondent employers’ projects, and that his use of rental equipment owned by Kopfman was not inconsistent with independent contractor status.
Potter claims that the only tools he provided were “small hand tools” and that each of the respondents furnished all the equipment necessary for his particular project. In particular, he claims that the two construction companies, Lohden and Beneke, provided “all” or “90 percent” of the tools he used on their projects. On the other hand, Potter admits that when he worked for Bruton, the pharmacist, he used “a table saw that [Bruton] was considering purchasing from [Potter],” and he testified at the Department hearing that he had supplied a cement mixer and a generator for the Kopfman job.
The respondent employers testified that they had purchased materials ordered by Potter and that Potter was free to hire assistants or obtain needed equipment independently.
When an employer furnishes valuable equipment, an employment relationship almost invariably exists. Solheim, 677 P.2d at 1038. Here, however, the record indicates that among the respondent employers, only Kopfman can be said to have furnished valuable equipment.
Third, the hearing officer found that the respondent employers did not have an absolute right to fire Potter, since either party could terminate the relationship without liability only if the end result were not accomplished as agreed. In Solheim, 677 P.2d at 1039 (quoting Larson, Workmen’s Compensation Law, Vol. 1C, § 44.35), we described the right to fire as the power to control, noting that:
The absolute right to terminate the relationship without liability is not consistent with the concept of independent contract, under which the contractor should have the legal right to complete the project contracted for and to treat any attempt to prevent completion as a breach of contract.
Here, Potter asserts that he could have quit without incurring liability; he also points out that Kopfman laid him off without incurring liability. The respondent employers testified that they believed they could terminate the relationship but were not sure of the consequences. None of them had executed a written contract, and damages for failure to perform had not been discussed.
The fact that neither Potter nor the employers were certain of their rights indicates that the employers did not have an absolute right to fire Potter. As we held in Solheim, 677 P.2d at 1039, the absence of an absolute right to terminate the relationship without liability supports the finding of an independent contractor relationship. Also see Johnson, 783 P.2d at 1359 (testimony indicating that neither party was certain of his rights as to the ability to terminate supported a finding of an independent contractor relationship).
With regard to the fourth factor, method of payment, the hearing officer found that Potter “was free to bid or it appears did bid the work performed based on his normal hourly rate.” He concluded that the fact that the respondent employers paid Potter on an hourly basis was not conclusive evidence of an employer-employee relationship.
Potter insists that he was paid by the hour and not for the job, and that when he was an independent contractor he bid and was paid by the job. All of the respondent employers except Beneke Construction paid Potter weekly, for the number of hours worked. Beneke Construction paid him hourly wages at the end of each job.
While payment on a time basis is strong evidence of employment status, Solheim, 677 P.2d at 1038, we have observed before that in the construction industry carpenters often work on an hourly basis. Johnson, 783 P.2d at 1359. Hourly pay therefore is not conclusive evidence of either an independent contractor or an employment status.
In short, substantial evidence supports the hearing officer’s findings of fact with regard to the four factors we recognized in Sharp, Solheim, and Johnson. Because three of the factors indicated that Potter was not an employee, and the fourth was not conclusive, the District Court concluded correctly that Potter was an independent contractor and therefore not entitled to unemployment insurance benefits for 1987.
AFFIRMED.
CHIEF JUSTICE TURNAGE, JUSTICES McDONOUGH and GRAY concur. | [
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JUSTICE HARRISON
delivered the Opinion of the Court.
Connie Lynn Krautter (Krautter) was convicted of criminal trespass, a misdemeanor, in Helena Municipal Court. She appeals an order of the First Judicial District Court, Lewis and Clark County, affirming the Municipal Court conviction and denying her motion to dismiss. We affirm.
Krautter was arrested at the Intermountain Planned Parenthood Clinic in Helena, Montana, on December 6, 1991, for violating § 45-6-203, MCA. This statute makes it a crime to enter or remain unlawfully on the premises of another. The primary issue on appeal is whether Krautter had a constitutional right of access to private property for the purpose of exercising her right of free speech.
At the time of her arrest, Krautter was sitting on a concrete step at the west door of the clinic. She was part of an anti-abortion demonstration that included approximately forty people. With Krautter at the west door was a group of three people who had locked themselves together with bicycle locks. Krautter had not locked herself to this group.
"No trespassing" signs were posted around the perimeter of the clinic property. Like most of the other people at the demonstration, Krautter had stationed herself within the area defined by those signs. Shortly after the demonstration began, and before any patients had arrived at the clinic, the clinic manager and a police officer asked everyone to leave. About twenty-five people moved from the clinic property to the sidewalk or street. The remaining demonstrators, including Krautter, were arrested and charged with trespass and disorderly conduct.
The Helena Municipal Court found that Krautter was not guilty of disorderly conduct but guilty of criminal trespass, for which she was fined $240. Krautter appealed to the District Court, which heard the case on August 3, 1992. Shortly after the hearing, Krautter moved to dismiss the charge against her on the grounds that she was on the clinic property to exercise her constitutional right of free speech by discussing “physical, emotional, and psychological injuries that have occurred to other women at women’s health clinics” with any interested women entering the clinic that day, and that she had no other reasonable opportunity to convey her message to her intended audience.
On August 21, 1992, the District Court issued its decision, denying Krautter’s motion and finding her guilty of trespass. Krautter appealed.
The trespass charge and conviction clearly are correct. Under § 45-6-203, MCA, a person “commits the offense of criminal trespass to property if he knowingly enters or remains unlawfully in or upon the premises of another.” “Enter or remain unlawfully,” as defined in § 45-6-201, MCA, means to enter or remain without the permission of the landowner or other authorized person. Here, Krautter entered an area marked by “no trespassing” signs and remained there after an “authorized person” — the clinic manager — had asked her to leave.
Krautter admits that she trespassed but contends that the fine was improper because she entered and remained on the clinic property to exercise the right of freedom of speech guaranteed by the First Amendment and by the Montana Constitution, Art. II, § 7. She argues that § 45-6-203, MCA, is unconstitutional because it does not allow for protected speech on private property.
The City of Helena, represented here by the Montana Attorney General’s office, argues that we should not address the state constitutional issue because it was not raised in the District Court. See State v. Blalock (1988), 232 Mont. 223,756 P.2d 454 (defendantbarred from raising issue of trespass statute’s constitutionality because he did not raise it at trial).
It is true that at the District Court hearing Krautter, representing herself, relied solely on United States Supreme Court cases that balance First Amendment rights against private property rights. Although no Montana case addresses the relation between property rights and freedom of speech, we concluded in City of Billings v. Laedeke (1991), 247 Mont. 151, 158, 805 P.2d 1348, 1352, that Art. II, § 7 provides no greater protection for free expression than does the United States Constitution. Thus, if the trespass statute is constitu tional under the First Amendment, it is also constitutional under Art. II, § 7, Mont.Const., which provides in pertinent part that:
No law shall be passed impairing the freedom of speech or expression. Every person shall be free to speak or publish whatever he will on any subject, being responsible for all abuse of that liberty.
The constitutionality of a statute is presumed; the party challenging it must prove beyond a reasonable doubt that it is unconstitutional. Laedeke, 805 P.2d at 1349, citing Fallon County v. State (1988), 231 Mont. 443, 445, 753 P.2d 338, 339. The United States Supreme Court has held that “[i]t would be an unwarranted infringement of property rights to require them to yield to the exercise of First Amendment rights ... where adequate alternative avenues of communication exist." Lloyd Corp., Ltd. v. Tanner (1972), 407 U.S. 551, 567, 92 S.Ct. 2219, 2228, 33 L.Ed.2d 131, 141. Here, the District Court found that Krautter did have alternative avenues of communication. We conclude that Krautter has not proved that she had no alternative avenue of communication and that the Montana trespass statute does not violate the First Amendment.
The question remains as to whether Krautter has a constitutional right of access to private property for the purpose of exercising her right of free speech.
Krautter relies on United States Supreme Court cases, particularly Amalgamated Food Employees Union Local 590 v. Logan Valley Plaza, Inc. (1968), 391 U.S. 308, 88 S.Ct. 1601, 20 L.Ed.2d 603; and Lloyd. In both cases the Supreme Court recognized that a privately-owned shopping center has many of the attributes of a public forum. In Logan Valley, it held that “the State may not delegate the power, through the use of its trespass laws, wholly to exclude those members of the public wishing to exercise their First Amendment rights on the premises in a manner and for a purpose generally consonant with the use to which the property is actually put.” 391 U.S. at 319-320, 88 S.Ct. at 1608-09. But in Lloyd the Court effectively overruled Logan Valley.
Lloyd held that shopping center management could enforce a policy prohibiting the distribution of handbills in the shopping center, where the handbills “had no relation to any purpose for which the center was built and being used,” and people had ample opportunity to distribute handbills in public areas. 407 U.S. at 564-567, 92 S.Ct. at 2226-28. The Supreme Court concluded in Lloyd, and reiterated in Hudgens v. National Labor Relations Board (1976), 424 U.S. 507, 519, 96 S.Ct. 1029, 1036, 47 L.Ed.2d 196, 206, that
the First and Fourteenth Amendments safeguard the rights of free speech and assembly by limitations on state action, not on action by the owner of private property used nondiscriminatorily for private purposes only.
Unless a shopping center has assumed “all of the attributes of a state-created municipality, ... performing the full spectrum of municipal powers,” the Court held, members of the public do not have the same right of free speech in the streets and sidewalks of a shopping center as they would have in similar public facilities in the streets of a city or town. Lloyd, 407 U.S. at 569, 92 S.Ct at 2229 (distinguishing Marsh v. Alabama (1945), 326 U.S. 501, 66 S.Ct. 276, 90 L.Ed. 265, which held that a state could not enforce a prohibition of expressive activity in a shopping center or “company town” with attributes of a municipality).
Here, Krautter has not shown or even argued that the Intermountain Planned Parenthood Center is a public facility. It is not even the type of quasi-public facility that figured in Logan Valley and Lloyd. Even if it were, Krautter still would have to show that no reasonable alternative to convey her message existed. She asserts that “the only way for her to communicate her information to the target audience who could most benefit from her information was to be on the property of the Planned Parenthood clinic.” As the District Court pointed out, however, “nothing ... has been shown to this court that persons driving up to the clinic could not see her picketing in the street and would not have been able to stop and talk with her if they so desired.”
Since 1976, when Hudgens was decided, courts have protected speech on private property under very limited circumstances. The United States Supreme Court held, in Pruneyard Shopping Center v. Robins (1980), 447 U.S. 74, 81, 100 S.Ct. 2035, 2040, 64 L.Ed.2d 741, 752, that a state could adopt in its own constitution “individual liberties more expansive than those conferred by the Federal Constitution,” and affirmed a California Supreme Court decision holding that a privately owned shopping center could not prevent speech and petitioning, reasonably exercised, within the shopping center. The Court clearly distinguished Lloyd, where the state constitution did not create “rights to the use of private property by strangers, comparable to those found to exist by the California Supreme Court.” 447 U.S. at 81, 100 S.Ct at 2041.
We do not find in Art. II, § 7 of the Montana Constitution any right to “the use of private property by strangers” that would entitle Krautter to access to clinic property for purposes of conveying a message to the clinic’s invitees.
Many other state courts have been asked to reverse trespass convictions based on facts similar to those in the case before us; none have found that anti-abortion demonstrators have a right to trespass on private property to express their views. See, e.g., Fardig v. Municipality of Anchorage (Alaska App. 1990), 785 P.2d 911, modified, 803 P.2d 879 (1990) (affirming a trespass conviction; the defendant’s free speech claims failed because a small, privately owned and operated health service commercial enterprise for profit is “not even remotely similar to the company town in Marsh”); Brown v. Davis (N.J. Super.Ch. 1984), 495 A.2d 900, aff’d sub nom. State v. Brown (N. J. Super. A.D. 1986), 513 A.2d 974 (trespass conviction of a woman who refused a request to leave while placing handbills on cars in an abortion-clinic parking lot was sustained even though the court found that “the New Jersey State Constitution has been interpreted more broadly than the Federal Constitution to permit the exercise of expressional rights on private property”); Planned Parenthood League of Mass., Inc. v. Operation Rescue (Mass. 1990), 550 N.E.2d 1361 (preliminary injunction enjoining Operation Rescue members from engaging in trespass and other illegal activities was not over-broad and did not prohibit exercise of First Amendment rights); People v. Yutt (Ill. App. 1992), 597 N.E.2d 208, cert. denied, 606 N.Ed.2d 1234 (1992) (criminal trespass conviction did not violate the defendants’ free speech rights because the clinic, which leased a portion of a shopping center including the adjoining sidewalk and parking lot, had not opened its property as a public forum and had excluded all demonstrators regardless of their beliefs); and City of Sunnyside v. Lopez (Wash. App. 1988), 751 P.2d 313 (criminal trespass conviction upheld because the complex of professional offices in which the defendant was arrested was not sufficiently open to the public to lose its character as private property).
We hold that neither the First Amendment nor Art. II, § 7 of the Montana Constitution entitles Krautter to have access to Planned Parenthood’s property in order to exercise her right of free speech.
Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, WEBER, and HUNT concur. | [
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JUSTICE TRIEWEILER
delivered the Opinion of the Court.
Plaintiff brought this action on behalf of her eight-year-old son, Bernie Okland, for injuries sustained when the bicycle he was operating collided with the vehicle being driven by defendant Keith David Wolf. The jury returned a verdict, finding that both Wolf and Okland were negligent and that each was 50 percent responsible for the collision. The jury found that the reasonable amount of Okland’s damages was $40,000. Pursuant to the jury’s finding of comparative fault, the District Court entered judgment for plaintiff in the amount of $20,000, plus costs and statutory interest from the date of judgment. From this judgment, defendant appeals. We affirm the District Court.
The issues raised by defendant on appeal are:
1. Was there substantial evidence to support the jury’s verdict?
2. Was defendant entitled to judgment as a matter of law based on our decision in Olson v. Parchen (1991), 249 Mont. 342, 816 P.2d 423?
3. Was defendant entitled to a new trial because of an erroneous instruction given to the jury by the District Court?
4. Was defendant entitled to a new trial based upon improper closing argument by plaintiff’s attorney?
FACTUAL BACKGROUND
On July 3, 1990, eight-year-old Bernie Okland was operating his bicycle in a westerly direction in the alley between 13th Avenue and 12th Avenue in Poison. As he approached the alley’s intersection with 7th Street, he intended to make a right-hand turn and proceed in a northerly direction. However, he was traveling too fast, could not control his bicycle, and swerved into the southbound lane, where he collided with defendant Keith David Wolf’s vehicle.
Defendant was 15 years old at the time of his collision with Okland. He had received his driver’s license 30 days prior to the accident. Immediately before the collision, he was proceeding in a southerly direction on 7th Street and conversing with his friend, who was a passenger in the vehicle. According to all witnesses, he was operating his vehicle at a speed of between 20 and 25 miles an hour, which was within the legal speed limit. He testified that he did not observe Okland until an instant before the collision. There was no evidence that defendant applied his brakes or swerved to take evasive action prior to the collision.
As a result of Okland’s collision with defendant, he sustained physical injuries and incurred medical expenses.
On January 10,1991, plaintiff filed an amended complaint alleging that the collision in which her son was injured was caused by defendant’s negligence. In his answer, defendant admitted that the collision occurred, but denied that it was his fault and alleged that it was caused entirely by the negligence of Okland.
The principals involved in the collision were deposed, as were the investigating officer and an off-duty officer who witnessed the collision. Based on the testimony of these witnesses, defendant moved the District Court prior to trial to enter summary judgment holding that as a matter of law the collision in which Okland was injured was caused solely by his own negligence. That motion was denied by the District Court, and this case proceeded to trial before a jury of 12 people on December 18,1991. On December 19, the jury returned its verdict, finding both parties negligent and apportioning responsibility for the collision equally between them. The jury found that the total amount of damage sustained by Okland as a result of his collision with defendant was $40,000.
Further facts will be discussed as necessary in the discussion of the issues raised by defendant.
I
Was there substantial evidence to support the jury’s verdict?
Defendant contends that the District Court erred when it denied his motions for summary judgment, a directed verdict, and judgment notwithstanding the verdict.
In reviewing a denial of a motion for summary judgment, our scope of review is basically the same as when reviewing denial of defendant’s motion for a directed verdict. Doll v. Major Muffler Centers, Inc. (1984), 208 Mont. 401, 416, 687 P.2d 48, 56.
Our scope of review from denial of a motion for a directed verdict is the same as from denial of a motion for judgment notwithstanding the verdict. Nelson v. Flathead Valley Transit (1992), 251 Mont. 269, 274, 824 P.2d 263, 267.
In Nelson, we explained the scope of review from an order denying a motion for judgment notwithstanding the verdict as follows:
In considering a motion for judgment notwithstanding the verdict, the court must view all of the evidence in a light most favorable to the non-moving party. Nicholson v. United Pacific Insurance Company (1985), 219 Mont. 32, 710 P.2d 1342. The motion may only be granted if it appears that the non-moving party cannot recover upon any view of the evidence, including legitimate inferences to be drawn from it. Larson v. K-Mart Corporation (1990), 241 Mont. 428, 787 P.2d 361.
Nelson, 824 P.2d at 265.
In Simchuk v. Angel Island Community Association (1992), 253 Mont. 221, 228-29, 833 P.2d 158, 162-63, we stated:
We recently discussed our function in reviewing jury verdicts. See Silvis v. Hobbs (Mont. 1992), [251 Mont. 407,] 824 P.2d 1013, 49 St. Rep. 62. It is not the function of this Court to agree or disagree with the jury’s verdict. Our function is to determine whether substantial evidence existed to support the verdict. In our examination, we review the facts in the light most favorable to the prevailing parties. If conflicting evidence exists, the credibility and weight given to the evidence is in the jury’s province and we will not disturb the jury’s findings unless they are inherently impossible to believe. Silvis, [251 Mont. at 410-12] 824 P.2d at 1015-16, 49 St. Rep. at 63-64. Our job is complete once we find substantial evidence in the record to support the jury’s conclusion.
With that scope of review in mind, we conclude that the following substantial evidence supports the jury’s verdict:
The street on which this accident occurred was the main artery from downtown Poison to the location of defendant’s residence. Prior to the date on which the accident occurred, defendant had passed the intersection of the alley with 7th Street hundreds or thousands of times. The intersection is located in a residential area with homes on both sides of the street. Defendant was aware that it was common for children to be playing and biking in the area. He was also aware that because of the presence of children in the area, it was important to keep a lookout on both sides of the road. He acknowledged that he knew from the driver’s education course he had just completed that drivers need to be especially alert for children because they are unpredictable and you never know what they are going to do.
Defendant admitted that as he proceeded south on 7th Street he would have been able to see a substantial part of the alley where Okland was operating his bicycle, but testified that he and the passenger in his vehicle were chatting and that he did not see the bicycle until it was too late to take evasive action. He admitted that if he had looked in the direction of the alley and seen Okland coming, he could have either slowed down, braked, or swerved.
Rick Hunter testified that he is employed as a detective by the Poison Police Department. He was off duty at the time of the accident. However, he witnessed the accident as a passenger in a third vehicle.
The vehicle in which Hunter was traveling was proceeding in an easterly direction on 12th Avenue. His position was about one-half block north of the intersection of the alley and 7th Street. He was significantly further away from the alley than defendant. However, from that vantage point he was able to observe Okland operating his bicycle in a westerly direction in the alley. He noticed that Okland did not have control of his bicycle. The bike was wobbling as if its rider was trying to make a turn, but was unable to do so. He was able to make these observations and conclude that a collision was going to occur from one-half block away. He testified that about two to three seconds passed from the point when he first saw Okland until the impact occurred. He had time to yell to the driver of his vehicle that there was going to be an accident. During that time, he did not see defendant make any effort to swerve. He did not see any brake lights applied, and he did not see any indication that defendant had observed the bicycle.
Hunter also testified that he was familiar with the area where the accident occurred and that it is a thickly populated area where, on a summer evening, it was common to see children on bikes and pedestrians out walking. He testified that a driver in that area should certainly plan on children being present and take appropriate precautions. He stated that when he drives in that area, he scans both sides of the road as a precaution.
Denman Lee, Ph.D., is a physics professor at Montana State University and an accident reconstruction expert. He testified, without objection by defendant, regarding his qualifications. Lee investigated the accident to determine defendant’s sight distances as he proceeded in a southerly direction on 7th Street, and he determined how long Okland’s bicycle should have been visible to defendant prior to the point where the collision occurred. He testified that, based upon the speed at which he concluded the bicycle was traveling, defendant would have been able to observe the bicycle for at least 4 seconds prior to the collision if he had been driving at a speed of 20 miles per hour, and 3.6 seconds prior to the collision if he had been driving at a speed of 25 miles per hour. Lee also testified that including reaction time, it would have taken defendant approximately 2.3 seconds to bring his vehicle to a complete stop from a speed of 20 miles per hour, and 2.6 seconds to bring his vehicle to a complete stop from a speed of 25 miles per hour. In summary, he concluded that if defendant had seen what was there to be seen, he could have brought his vehicle to a complete stop prior to colliding with Okland’s bicycle.
The District Court properly instructed the jury that:
Negligence is the failure to use reasonable care. Negligence may consist of action or inaction. A person is negligent if he fails to act as an ordinarily prudent person would act under the circumstances.
In Payne v. Sorenson (1979), 183 Mont. 323, 599 P.2d 362, we held that:
Under Montana law, a motorist has a duty to look not only straight ahead but laterally ahead as well and to see that which is in plain sight. Furthermore, a motorist is presumed to see that which he could see by looking, and he will not be permitted to escape the penalty of his negligence by saying that he did not see that which was in plain view. Nissen v. Johnson (1959), 135 Mont. 329, 333, 339 P.2d 651, 653; Sorrells v. Ryan (1955), 129 Mont. 29, 281 P.2d 1028; Koppang v. Sevier (1938), 106 Mont. 79, 75 P.2d 790. If a motorist does not keep a proper lookout, a jury may find him negligent.
Payne, 599 P.2d at 364.
We conclude that under these circumstances there was sufficient evidence, when construed most favorably for the prevailing party, to support the jury’s finding that defendant was negligent by failing to keep a proper lookout and have his vehicle under sufficient control to avoid his collision with plaintiff’s son.
Defendant also contends that even if there was evidence to support a finding that defendant was negligent, the District Court should have concluded that Okland’s negligence was greater than defendant’s as a matter of law. In support of this contention, defendant cites numerous statutes which he contends Okland violated by the manner in which he operated his bicycle. However, we find the circumstances in this case similar to those in Dillard v. Doe (1992), 251 Mont. 379, 824 P.2d 1016, where we recently held that when there is evidence of negligence by both parties, the respective degree of each party’s negligence is not normally susceptible to apportionment as a matter of law.
In Dillard, the plaintiff was walking along the highway in darkness, wind, and snow when he was struck by a snowplow. He sued the State of Montana based on the alleged negligence of the snowplow operator. The district court granted summary judgment to the State based on its conclusion that the plaintiff was negligent as a matter of law and that even if the snowplow operator was negligent, reasonable minds could not differ on whether the plaintiff’s negligence exceeded that of the defendant. In reversing the judgment of the district court, we pointed out that:
Ordinarily, issues of negligence are questions of fact not susceptible to summary adjudication. Brohman v. State (1988), 230 Mont. 198, 201, 749 P.2d 67, 69. Liability should not be adjudicated upon a motion for summary judgment where factual issues concerning negligence and causation are presented. Duchesneau v. Silver Bow County (1971), 158 Mont. 369, 377, 492 P.2d 926, 931.
Dillard, 824 P.2d at 1018-19.
We also relied on Reed v. Little (1984), 209 Mont. 199, 206-07, 680 P.2d 937, 940-41, where we held that where there is evidence that one party to a lawsuit violated highway traffic statutes, and also evidence of negligence on the part of the other party, it is up to the jury to weigh and compare the negligence of both parties in reaching its verdict. Likewise, in this case, we hold that where there was evidence of negligence on the part of both parties, it was for the fact finder to determine the comparative degree of negligence. The District Court did not err by submitting the issue of comparative negligence to the jury.
II
Was defendant entitled to judgment as a matter of law based on our decision in Olson v. Parchen (1991), 249 Mont. 342, 816 P.2d 423?
Defendant contends that since he was operating his vehicle in his own lane of travel at a lawful speed, his only act or omission which contributed to the collision was his failure to anticipate that plaintiff would violate the law. His argument continues that since we held in Olson that it is not negligent to fail to anticipate the negligence of another, defendant was not negligent in this case. However, the facts in Olson are distinguishable from the facts in this case and we conclude that plaintiff’s recovery is not barred by Olson.
In Olson, the plaintiff, who was the favored driver, collided with the defendant in a Great Falls intersection when the defendant failed to yield the right-of-way. We held that the plaintiff was not negligent for failing to anticipate that the defendant would not yield to him. The difference in that case was that the plaintiff actually observed the defendant shortly prior to the collision and saw nothing that would indicate that defendant would not stop. There was no suggestion that the defendant’s vehicle was out of control. The plaintiff then did the responsible thing, which was to look for traffic coming from the opposite direction. When he looked back in the defendant’s direction, the collision was unavoidable. We noted that:
Olson said that he saw Parchen’s pickup truck, but thought Parchen was going to stop and looked away momentarily. A driver of a vehicle traveling on a street protected by a “yield” sign has a right to rely upon the compliance of the driver of a vehicle which must yield with the yield right-of-way statutes. Olson cannot be contributorily negligent because his alleged failure to see Parchen’s vehicle entering the intersection was not the proximate cause of the collision.
Olson, 816 P.2d at 427.
In this case, defendant did not see Okland because he did not keep the lookout which we have held is required by law. If he had observed Okland prior to the collision, he would have noted, as did Officer Hunter, that Okland’s bicycle was out of control and that there was no way he would be able to bring it to a stop at the intersection, or keep it in his own lane of travel. Under those circumstances, it would not have been reasonable for defendant to presume that Okland would comply with the rules of the road.
In Olson, the plaintiff observed the defendant at the appropriate time and had no reason to believe he would not comply with the law. In this case, defendant failed to observe Okland at any time; if he had, he would have been aware that he was not in sufficient control to comply with the law. For these reasons, we conclude that Olson is not applicable to the facts in this case and does not bar judgment for plaintiff.
Ill
Was defendant entitled to a new trial because of an erroneous instruction given to the jury by the District Court?
Included among the original jury instructions proposed by plaintiff was Plaintiff’s Proposed Instruction No. 28. It read as follows:
It does not follow, merely because a party to this action has violated some statutory provision that you must find him to have been negligent. This is only evidence to be considered in determining whether there was negligence.
During the settlement of instructions, that instruction was withdrawn by plaintiff. Defendant contends on appeal that he objected to the instruction. However, there is no record of any objection in the transcript provided to this Court.
Somehow, the withdrawn instruction was included with the court’s instructions which were read to the jury. After the court concluded reading those instructions, counsel for defendant asked to approach the bench where a discussion off the record was conducted. Following that discussion, the District Court Judge reported to the jury that he had inadvertently included Instruction No. 28 and that the attorneys had stipulated that it should be removed from the instructions. Both attorneys so stipulated.
There is no further record of any objection to the procedure followed by the court, nor is there any indication in the record that defendant requested any relief, such as a mistrial or further clarification, based upon the District Court’s inadvertent reading of the objectionable instruction.
The District Court did give correct instructions to the jury regarding the effect of a statutory violation. Furthermore, counsel for defendant clarified the error during closing argument when he stated that:
A violation of a law in the State of Montana isn’t evidence of negligence. It is negligence. The instruction the judge read, if you find from the evidence that the defendant or the plaintiff violated the law just read to you, you’re instructed that such conduct was negligence as a matter of law. It is negligence. [Emphasis added.]
The objectionable instruction was removed from those instructions which were submitted to the jury and was not sent to the jury room.
However, on appeal defendant contends that since the inadvertent instruction was a misstatement of the law, defendant was prejudiced when it was read and on that basis the verdict for plaintiff should be reversed.
While it does appear that the defense objected to the inadvertent reading of the incorrect instruction, it does not appear from the record that defendant had any objection to the solution that was arrived at by the District Court for dealing with the mistake. These circumstances are similar to those presented in Rasmussen v. Sibert (1969), 153 Mont. 286, 456 P.2d 835, where we held that the defendant waived any prejudice resulting from the mention of insurance by failing to request the appropriate relief prior to entry of the jury verdict. In that case, there was discussion outside the presence of the jury regarding the remark and no specific relief was requested by the defendant until after trial. The district court then granted a new trial based upon the prejudicial remark. We reversed the district court for the following reason:
Here there was no objection or motion to strike the testimony, no request for admonition by the court, no motion for mistrial, and no request for a corrective jury instruction. Briefly stated, defendant did nothing. In so doing defendant took a calculated risk. He knew the words had been uttered. He knew that no issue had been raised thereon. He knew that the jury had not been admonished or instructed to disregard this testimony; and he knew that his case was being submitted to the jury on this basis. Under these circumstances, defendant’s failure to object or request corrective action constituted a waiver of objection on this issue. It cannot be urged for this first time upon motion for a new trial following an adverse jury verdict. To hold otherwise would not only put the trial court in error on an issue which had not been presented to it for ruling, but would permit a litigant to submit his case to the jury for a possible verdict in his favor, and in the event he was unsuccessful, would permit him another determination by another jury. [Citations omitted.]
Rasmussen, 456 P.2d at 840.
Likewise, in this case, defendant did not move for a mistrial or other corrective action. He chose to submit his case to the jury based on the posture that it was in. He is, therefore, precluded from requesting relief in the nature of a mistrial for the first time on appeal after receiving a verdict from the jury that he considers adverse.
We conclude that the District Court did not err when it denied defendant’s motion for judgment notwithstanding the verdict based upon the inadvertent instruction which was read to the jury.
IV
Was defendant entitled to a new trial based upon improper closing argument by plaintiff’s attorney?
On appeal, defendant contends that by discussing Okland’s age during closing argument, plaintiff’s attorney invited the jury to ignore the law and base its decision on sympathy, rather than the appropriate standard of care. However, there is no indication in the record that defendant ever objected to any remarks made by plaintiff’s attorney, nor is there any indication in the record that defendant ever requested other relief or corrective action from the District Court as a result of those remarks. For the same reasons discussed in the previous issue of this opinion, defendant is not permitted to raise this issue for the first time on appeal.
For the above reasons, the judgment of the District Court is affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES HUNT and McDonough concur. | [
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JUSTICE McDONOUGH
delivered the Opinion of the Court.
Schrammeck appeals two summary judgment orders of the Twentieth Judicial District Court, Lake County, certified as final pursuant to Rule 54(b), M.R.Civ.P. Reversed and remanded.
This case originated with a partnership dispute concerning the ownership of Woods Bay Marina on Flathead Lake and loans made using the property as collateral. Alton and Lee Ann Bowers (the Bowers) and Clark and Roxann Post (the Posts) were the record title owners of property consisting of Woods Bay Marina. In the original cause, filed in June of 1982, Schrammeck contended that he was a partner with Alton W. Bowers (Bowers) and Clark G. Post (Post), that the Marina was partnership property, and that his former partners excluded him from the partnership. A prior judgment by Judge Henson in the Fourth Judicial District Court, described below, settled this controversy among the partners. The dispute now centers on a loan transaction that the Bowers and the Posts made using Woods Bay Marina as collateral.
The pertinent issues on appeal are:
1. Whether the District Court erred by concluding that the Woods Bay Marina property did not belong to a partnership consisting of Schrammeck, Bowers and Post.
2. Whether the District Court erred by concluding that the Bowers and the Posts could encumber any portion of Woods Bay Marina without Schrammeck’s consent.
3. Whether the District Court abused its discretion by denying Schrammeck leave to file a second amended complaint and supplemental pleading.
4. Whether the District Court erred by declining to award attorney fees to Schrammeck for successfully defending against the foreclosure of the trust indenture.
In Schrammeck’s June 1982 complaint, he alleged that he entered an oral agreement with Bowers and Post in July 1980 to purchase, restore, and operate Woods Bay Marina as a partnership. Schrammeck further alleged that he worked at and managed the Marina from July 1980 until he was excluded from the partnership in late October 1980. Schrammeck filed and recorded a lis pendens in connection with that suit on June 17, 1982.
About a year after Schrammeck recorded the lis pendens, Bowers approached the Montana Savings & Loan Association of Kalispell (the S & L) for a loan, using the Woods Bay Marina as collateral. Representatives of the S & L knew about the lis pendens, and loan officer John Prather recommended disapproval of the loan because ownership of the property was in dispute.
Prather informed Bowers that the loan request had not been approved because of the lis pendens. Bowers then told Prather that Schrammeck was not a partner or owner of Woods Bay Marina. Bowers insisted that Schrammeck’s suit was a nuisance suit, and that Bowers and his wife owned the property along with the Posts. Prather replied that the S & L still would not make the loan because of the Us pendens.
Bowers then went to Fidelity National Title Insurance Company (Fidelity) and convinced it to insure the loan on the condition that the Bowers and the Posts hold Fidelity harmless and indemnify it for any losses it might incur due to Schrammeck’s claim underlying the Us pendens.
Based on Fidelity’s insurance policy, the S & L agreed to loan the Bowers and the Posts $295,000 with the Marina as collateral. On June 15, 1983, the Bowers and the Posts executed a financing statement, evidencing S & L’s security interest in the personal property of Woods Bay Marina. They signed a promissory note for $295,000 at the same time. They also executed and recorded a “deed of trust” purporting to assign the Woods Bay Marina real property to the S & L as security for the loan.
We have examined this “deed of trust” and determined that it is a trust indenture as defined in § 71-1-303(4), MCA; therefore, this opinion will refer to it as a trust indenture. This opinion will refer to the financing statement, the note, and the trust indenture collectively as the loan documents.
On November 21, 1983, Judge Henson, in the Fourth Judicial District, entered an order and judgment (hereafter Judge Henson’s order) on the merits of Schrammeck’s cause against Bowers and Post. Judge Henson’s order declared Schrammeck the owner of an undivided one-third interest in the business, personal property and real property known as Woods Bay Marina.
Judge Henson’s order also gave Bowers and Post the right to discharge and void Schrammeck’s interest by making payments before specified dates. If the payments were not made, the order judicially recognized Schrammeck’s one-third partnership interest in the property and business. Schrammeck did not receive any payments and Judge Henson’s order is not on appeal.
On June 14, 1984, Schrammeck filed suit against Bowers, Post, and the S & L. Among other things, Schrammeck alleged several torts and sought to dissolve and wind-up the partnership.
The Bowers and the Posts quitclaimed their interests in the Woods Bay Marina real property to Schrammeck on July 25, 1984, and also signed all of the Marina’s personal property over to Schrammeck. Two days later, pursuant to a motion by Schrammeck, the court dismissed Bowers and Post from the suit.
In October 1984, Schrammeck filed an amended complaint against Fidelity and the S & L, seeking a court order declaring the trust indenture and the S & L’s security interest in the personal property invalid. The complaint also alleged that the S & L and Fidelity committed several torts against him.
In August of 1985, the Federal Home Loan Bank Board declared the S & L insolvent and appointed Federal Savings & Loan Insurance Corporation (FSLIC) as receiver. The defendants in this case are, therefore, FSLIC and Fidelity.
FSLIC and Fidelity filed third-party complaints and counterclaimed against Schrammeck, the Woods Bay Marina Partnership, and its individual partners, Schrammeck, Bowers and Post to foreclose on the trust indenture.
The parties filed several motions for summary judgment and the District Court entered two separate orders on the motions. The court certified these orders as final and they are before this Court on appeal.
In the summary judgment order dated August 30, 1991, the District Court acknowledged that Bowers, Post, and Schrammeck were partners in Woods Bay Marina. The court determined that each of the partners had the authority to bind the Woods Bay Marina Partnership in the usual course of business. The court ruled that the Bowers and the Posts did not exercise their authority as partners, and thus did not bind the partnership to the promissory note. The court also ruled that neither Schrammeck nor the partnership were debtors under the security agreement or grantors under the trust indenture.
In the summary judgment order dated January 7, 1992, the District Court ruled that Woods Bay Marina was not partnership property, but rather, Bowers, Post, and Schrammeck had individual interests in the property. The court also acknowledged its previous determination that the Bowers and the Posts had authority to bind the Woods Bay Marina Partnership, but determined they had not exercised their authority.
This opinion will refer to more detailed facts as they are pertinent to the discussion.
Our review of the District Court’s conclusions of law is plenary; we determine whether the court’s conclusions are correct. Steer Inc. v. Dept. of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603.
I.
Did the District Court err by concluding that the Woods Bay Marina property did not belong to a partnership consisting of Schrammeck, Bowers and Post?
Judge Henson’s order disposes of this issue. In November of 1983, Judge Henson ruled that:
2. The Plaintiff [Schrammeck] is the owner of an undivided one-third interest in the business and property known as Woods Bay Marina, Woods Bay, Lake County, Montana.
3. Defendants [Bowers and Post] may discharge and void Plaintiff’s ownership interest and claims ... by paying to the Plaintiff [certain sums by certain dates].
In the event the Defendants fail to perform in the above-described fashion in a timely manner ... paragraph 4 of this Order and Judgment shall become effective and controlling.
4. In the event the Defendants fail to make payment as stated in paragraph 3 in a timely fashion, in addition to his one-third ownership interest as stated in paragraph 2 of this Order and Judgment, the Plaintiff shall be deemed a one-third partner in the property and business described in paragraph 2. The partnership shall be deemed dissolved as of November 21, 1983; the Plaintiff shall be deemed to have been excluded from the partnership and enjoyment of the partnership property ... and, the Defendants and parties acting in privity with them shall be deemed to have had exclusive control, enjoyment and possession of the entire partnership property and have continued the business without winding the same up or liquidating the same, to the exclusion of the Plaintiff since October 16, 1980. In the event this paragraph becomes effective, the Plaintiff shall have all rights, causes of action and remedies regarding dissolution, accounting, liquidation and duties owed him as a partner pursuant to the laws of the State of Montana. In the event this paragraph comes into effect, the Plaintiff’s one-third partnership interest in the property and business identified herein is hereby judicially declared, (emphasis added).
Bowers and Post did not make the required payments to Schrammeck, therefore paragraph 4 of Judge Henson’s order and judgment became effective. The effect of the order was to judicially declare Schrammeck’s partnership interest in the Woods Bay Marina, including both the realty and personalty. The order also declared that he had been excluded from the partnership since October 16, 1980 and alluded to his right to wind up the partnership after the dissolution. See § 35-10-601, MCA, et seq. (explaining the rights and duties associated with dissolution and winding up of a partnership). Thus, according to Judge Henson’s order, the Woods Bay Marina real and personal property belonged to a partnership consisting of Bowers, Post, and Schrammeck. Judge Henson’s order was not appealed; therefore, we conclude that the District Court erred by determining that the Woods Bay Marina was not partnership property.
II.
Did the District Court err by concluding that the Bowers and the Posts could encumber any portion of the Woods Bay Marina property without Schrammeck’s consent?
As stated above, the Bowers and the Posts were the record owners of the Woods Bay Marina which was partnership property. They executed a trust indenture purporting to assign the property to the S & L as security for a loan. The District Court ruled that the Bowers and the Posts had authority to bind the partnership, but they did not exercise it when encumbering the Woods Bay Marina property. The court determined that the Bowers and the Posts, respectively, encumbered their individual one-third interests in the property.
Because the Woods Bay Marina was partnership property, however, the Bowers and the Posts could not assign any individual interests in the property. “A partner is co-owner with the other partners of specific partnership property holding as a tenant in partnership.” Section 35-10-502(1), MCA. “The incidents of tenancy in partnership are such that a partner’s right in specific partnership property is not assignable except in connection with the assignment of rights of all the partners in the same property.” Section 35-10-502(2)(b), MCA. This rule applies regardless of the formal legal manner in which the property is held. See Matter of Estate of Palmer (1985), 218 Mont. 285, 290-93, 708 P.2d 242, 245-47.
Woods Bay Marina, including both the realty and the personalty, was partnership property. Therefore, even though the Bowers and the Posts were the record title holders, they could not assign their individual interests in it, except in connection with the assignment of all of the partners’ rights in the property. Thus, the District Court erred in determining that the Bowers and the Posts had authority to bind the partnership but encumbered only their individual one-third interests.
FSLIC and Fidelity argue that even if the Bowers and the Posts did not encumber their individual interests, they encumbered the partnership’s interest in the property. Schrammeck argues that the Bowers and the Posts did not have authority to encumber the partnership’s property without consent of all the partners, and therefore, the purported encumbrances had no effect. The District Court ruled in its August 1991 summary judgment order that the loan documents did not bind either Schrammeck or the Woods Bay Marina Partnership consisting of Bowers, Post, and Schrammeck.
The first step in analyzing whether the loan documents bound the partnership is to determine whether on their face they purport to bind the partnership. FSLIC argues that the language of the loan documents is ambiguous and gives rise to a reasonable inference that the obligation was a partnership debt. FSLIC contends that the ambiguities should have been clarified by parol evidence. We conclude that parol evidence was unnecessary for that purpose, however, because the loan documents are not ambiguous and on their face purport to finance the Woods Bay Marina project and bind the Woods Bay Marina Partnership.
The trust indenture incorporates by reference the note and the financing statement. The note names the debtors as follows: “Alton W. Bowers, Lee Ann Bowers, husband and wife (50%); and Clark G. Post, Roxann Post, husband and wife (50%); Partners hereinafter referred to as obligors.” The financing statement identifies the debtors as “Alton W. Bowers and Lee Ann Bowers, his wife and Clark G. Post and Roxann Post, his wife, dba: Woods Bay Marina.”
The trust indenture identifies the grantors as follows: “Alton W. Bowers & Lee Ann Bowers, husband and wife, and Clark G. Post & Roxann Post, husband and wife, jointly and individually, of Woods Bay Marina, Bigfork, Montana.” The trust indenture also states: “The indebtedness evidenced by the Note is intended to finance the project known as Woods Bay Marina.” Thus the loan documents, read as a whole, purport to bind the Woods Bay Marina Partnership, which Bowers represented to the Bank as consisting of only the Bowers and the Posts.
We note that the Bowers executed the promissory note, the financing statement, and the trust indenture granting the Woods Bay Marina real property to the S & L. Alton Bowers signed these loan documents as attorney in fact for Clark and Roxann Post.
The next step in analyzing whether the loan documents bound the partnership is to determine whether Bowers had authority under § 35-10-301(1), MCA, to enter the loan transactions.
Although the Bowers and the Posts were the record title holders of the Woods Bay Marina, it was partnership property of the Woods Bay Marina Partnership, which consisted of the three partners — Bowers, Post, and Schrammeck.
Where title to real property is in the name of one or more or all the partners ... a conveyance executed by a partner in the partnership name or in his own name passes the equitable interest of the partnership, provided the act is one within the authority of the partner under the provisions of35-10-301(1).
Section 35-10-302(4), MCA. Therefore, the trust indenture is a valid assignment of the partnership’s interest in the property only if it was executed within Bowers’ authority under the provisions of § 35-10-301(1), MCA. That statute states:
Every partner is an agent of the partnership for the purposes of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership unless the partner so acting has in fact no authority to act for the partnership in the particular matter and the person with whom he is dealing has knowledge of the fact that he has no such authority.
Section 35-10-301(1), MCA (emphasis added).
The first step in analyzing whether Bowers acted within the authority of that statute is to determine whether he was apparently carrying on partnership business in the usual way when he executed the loan documents to obtain a loan to pay partnership debts. We need not determine whether using partnership property as collateral without the permission of all of the alleged owners of the property is appropriate when the ownership of the property is in dispute and a notice of lis pendens has been recorded. Because, as discussed below, Bowers had no authority to enter the loan transactions on the partnership’s behalf and the S & L knew it.
The second step is to determine whether Bowers in fact had no authority to execute the loan documents on behalf of the partnership. Bowers signed as attorney in fact for the Posts. However, he did not have Schrammeck’s permission to execute the loan documents.
Indeed, Bowers represented to the S & L that Schrammeck was not a partner and Schrammeck therefore, was not included as a party to the loan transaction documents. Schrammeck by then had filed suit alleging that Bowers and Post had excluded him from the partnership and disputing the ownership of Woods Bay Marina. Schrammeck had also recorded a lis pendens providing notice of the pending suit. Under these circumstances, Bowers had no authority to execute documents to obtain a loan, for a partnership including Schrammeck, using the disputed property as collateral. Thus, the execution of the loan documents was unauthorized.
A partner can still bind the partnership to an unauthorized transaction if all of the other partners ratified the loan either explicitly or by knowingly receiving or retaining the benefits of the unauthorized loan transaction. See Restatement of Agency (Second) §§ 98-99. However, the respondents did not argue that Schrammeck ratified the loan transaction. Furthermore, although the record shows the purposes for which the S & L disbursed the loan, it does not indicate what actually became of the money, and there is insufficient evidence in the record to determine whether Schrammeck knowingly retained the benefits of the loan.
The third step is to determine whether the S & L knew that Bowers did not have authority to enter the loan transactions when it issued the loan. See § 35-10-301(1), MCA. As the following discussion reveals, the S & L did know that Bowers acted without authority when it executed the loan documents and issued the loan.
Schrammeck’s lis pendens gave notice that he had filed an action against Bowers and Post to dissolve and wind up a partnership dealing with the Woods Bay Marina real property, to enforce certain contract rights, and to secure a judgment on the dissolution and contract. Schrammeck prevailed in the suit underlying the lis pen-dens', therefore, the parties are bound by Judge Henson’s order declaring Schrammeck’s partnership rights. See Fox v. Clarys (1987), 227 Mont. 194, 196, 738 P.2d 104, 105.
In Fox we stated: “The doctrine of lis pendens was created to hold the subject matter of litigation within the jurisdiction and control of the court during the pendency of an action so that any final relief granted by the court would be at once binding and effective, [citation omitted] This doctrine generally renders third persons who subsequently purchase or encumber an interest in the subject property bound by the final disposition of the action.” Fox, 738 P.2d at 105. Thus FSLIC, as the S & L’s successor in interest, is bound by Judge Henson’s declaration that Woods Bay Marina was partnership property and that Schrammeck was a partner who was excluded from the partnership in October of 1980.
In addition, the S & L’s loan officer who handled the loan in question, John Prather, acknowledged that the S & L actually knew Bowers did not have authority to execute the loan documents. Prather stated that “[i]f D. Barry Schrammeck was a partner, his express consent to this particular transaction would have been required and his signature would have been required on the loan papers, trust deed and, note.” After Prather denied Bower’s loan request, Bowers represented that Schrammeck had filed a nuisance suit. Prather responded that the S & L “still would not make the loan because of the lis pendens.” Thus, the S & L knew that Bowers did not have authority to execute the loan documents on behalf of the partnership.
Because the S & L knew that Bowers did not have authority to execute the loan documents, the trust indenture did not pass any interest in the Woods Bay Marina realty to the S & L. See § 35-10-302(4), MCA. In addition, neither the financing statement nor the note bound the partnership, because Bowers did not have authority to act for the partnership in executing them and the S & L knew that he lacked such authority. See § 35-10-301(1), MCA. The trust indenture, financing statement, and note were invalid as to the Woods Bay Marina Partnership and the District Court erred in concluding that these loan documents had any effect.
Schrammeck alleged that Fidelity and FSLIC committed several tortious acts against him. He alleged slander of title, negligence, conspiracy, and constructive fraud. The District Court dismissed these counts on summary judgment partly based on its erroneous conclusion that the loan documents bound the Bowers’ and the Posts’ individual interests. We conclude that the court should reconsider these issues if Schrammeck presents them on remand.
III.
Did the District Court abuse its discretion by denying Schrammeck leave to file a second amended complaint and supplemental pleading?
The District Court certified two specific partial summary judgment orders for appeal as allowed by Rule 54(b), M.R.Civ.P. Neither these orders nor Schrammeck’s notice of appeal mentions the District Court’s order denying Schrammeck’s motion for leave to file supplemental pleadings or a second amended complaint. Therefore, the issue is not properly before this Court and we decline to rule on it.
IV.
Did the District Court err by declining to award attorney fees to Schrammeck for successfully defending against the foreclosure on the trust indenture?
The District Court denied Schrammeck’s motion for summary judgment on the issue of attorney fees, reasoning that Schrammeck was “not a party to any of the written instruments which contain provisions for the payment of attorney fees, and there exists no statutory authority for the payment of attorney fees to either party.” We note that in the answer to Schrammeck’s October 1984 amended complaint, the S & L and Fidelity counterclaimed against the Bowers, the Posts, and Schrammeck as a partnership to judicially foreclose on the trust indenture. We direct the court on remand to follow § 71-1-233, MCA, which requires the court to allow attorney fees in an action to foreclose a mortgage of real property, and to the case law interpreting that statute as reciprocal. See Bermes v. Sylling (1978), 179 Mont. 448, 464, 587 P.2d 377, 387.
In summary, the loan transaction documents were invalid. We reverse and remand for further proceedings.
CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, GRAY, TRIEWEILER and HUNT concur. | [
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JUSTICE REGNIER
delivered the Opinion of the Court.
¶1 Ronald T. Swanson (Ronald) petitioned for dissolution of his marriage to Rennee A. Swanson (Rennee) in the Thirteenth Judicial District Court, Yellowstone County. Following a non-jury trial, the District Court entered Findings of Fact, Conclusions of Law, and Decree of Dissolution and Memorandum, dissolving the parties’ marriage, distributing the couple’s property and setting up a temporary maintenance award from Ronald to Rennee. Ronald appeals, and Rennee cross-appeals from the District Court’s property distribution. Ronald additionally appeals from the District Court’s maintenance award. Rennee additionally cross-appeals from the court’s failure to award attorney fees. We affirm in part, reverse in part, and remand.
BACKGROUND
¶2 Ronald and Rennee married on July 16,1993. They separated on August 27,2001, and Ronald filed a petition for dissolution of marriage in the Thirteenth Judicial District Court, Yellowstone County, on October 19, 2001. The court held a hearing without a jury on November 15, 2002.
¶3 At the time of their marriage, Ronald was employed as a boilermaker and welder. He also raised cattle. At the time of trial, his annual income was approximately $37,856. The court found that Ronald’s living expenses consisted of $1638 per month, determining that his net monthly income exceeded his expenses by $1517.
¶4 At the time of their marriage, Rennee was a waitress. At the time of trial, she was a clerk in a retail store earning approximately $10 per hour. However, she planned to move to Las Vegas, Nevada, where she estimated that her income would be approximately $7 per hour. The court found that Rennee’s living expenses consisted of $1423 per month, determining that her expenses exceeded her estimated income by approximately $574.
¶5 Through his union and employment, Ronald had two retirement plans: Boilermakers National Annuity Trust (annuity) and Boilermaker-Blacksmith National Pension Trust (pension). Both plans were “defined contribution” plans as opposed to “defined benefit” plans. When calculating the marital value of these plans, the District Court used the “present value” method and assigned percentages to both parties as to the amounts to which they were entitled when the plans paid out. Specifically, the court found that 87.04% of the annuity plan was earned during the marriage, therefore, it calculated that Rennee was entitled to receive 43.5% of the annuity. The court found that 52.68% of the pension plan was earned during the marriage, therefore, it calculated that Rennee was entitled to receive 26.95% of the pension. Notably, the court determined that Rennee would receive the above percentages at the time Ronald started receiving his retirement benefits.
¶6 As part of the marital estate, the District Court included $10,880 of debt on a BankOne Visa allocated to Rennee and $1000 from the sale of Pete the Horse allocated to Ronald. However, the court excluded seven cows from the marital estate, identifying them as Ronald’s premarital property.
¶7 As a result of the property distribution, the court found that Rennee lacked sufficient property to provide for her reasonable needs, and after considering the factors contained in § 40-4-203, MCA, it awarded her maintenance of $500 per month for a three year period. It also deemed each party responsible for their own attorney fees.
¶8 We restate the issues on appeal:
¶9 1. Whether the District Court erred when it determined the value and distribution of the marital estate.
¶10 2. Whether the District Court erred when it determined the maintenance award from Ronald to Rennee.
¶11 3. Whether the District Court erred when it did not award attorney fees to Rennee.
STANDARD OF REVIEW
¶12 Section 40-4-202, MCA, governs the distribution of the marital estate vesting a district court with broad discretion to apportion the marital estate in a manner which is equitable to each party under the circumstances. In re Marriage of Bee, 2002 MT 49, ¶ 34, 309 Mont. 34, ¶ 34, 43 P.3d 903, ¶ 34. We initially review a district court’s division of marital property and maintenance awards to determine whether the findings of fact upon which the division is based are clearly erroneous. See In re Marriage of Gerhart, 2003 MT 292, ¶ 15, 318 Mont. 94, ¶ 15, 78 P.3d 1219, ¶ 15; In re Marriage of Haines, 2002 MT 182, ¶ 15, 311 Mont. 70, ¶ 15, 53 P.3d 378, ¶ 15. “A finding is clearly erroneous if it is not supported by substantial evidence, if the district court misapprehended the effect of the evidence, or if our review of the record convinces us that the district court made a mistake.” In re Marriage of Steinbeisser, 2002 MT 309, ¶ 17, 313 Mont. 74, ¶ 17, 60 P.3d 441, ¶ 17. Absent clearly erroneous findings, this Court will affirm a district court’s division of property unless we identify an abuse of discretion. Gerhart, ¶ 16.
¶13 We review a district court’s award of attorney fees in a dissolution action to determine whether the court abused its discretion, whereby a district court’s determination regarding such fees will not be disturbed absent an abuse of discretion. In re Marriage of Fishbaugh, 2002 MT 175, ¶ 30, 310 Mont. 519, ¶ 30, 52 P.3d 395, ¶ 30.
DISCUSSION ISSUE ONE
¶14 Whether the District Court erred when it determined the value and distribution of the marital estate.
¶15 A district court has broad discretion to adopt any reasonable valuation of property supported by the record, Bee, ¶ 34, and this Court will not substitute its judgment for that of a trial court on such matters. In re Marriage of Oehlke, 2002 MT 79, ¶ 21, 309 Mont. 254, ¶ 21, 46 P.3d 49, ¶ 21.
¶16 On appeal and cross-appeal, both parties argue that the District Court eri'ed in determining distribution of the marital estate. Specifically, Ronald challenges the court’s calculation of the valuation and distribution of his two retirement funds to Rennee and the inclusion of a BankOne Visa debt as marital debt. Rennee objects to distribution to Ronald of the $1000 proceeds from the sale of Pete the Horse and the exclusion of seven cows from the marital estate. She also claims that the court incorrectly found that the parties’ 1989 Ford Ranger belonged to Ronald’s son.
¶17 As a preliminary matter, in his answer to Rennee’s cross-appeal, Ronald conceded that the District Court omitted awarding the 1989 Ford Ranger to either party and agreed that it should be sold and the proceeds divided on an equal basis. Further, Ronald directs our attention to the property settlement in regards to Pete the Horse and points out that the court did include the proceeds of the sale on his side of the ledger and thus it was properly included in the marital estate. In her reply brief, Rennee concedes that proceeds from the sale of Pete the Horse were properly included in the marital estate. We therefore choose not to address these issues, and remand to the District Court with instructions to distribute the proceeds of the sale of the 1989 F ord Ranger on an equal basis.
¶18 We now turn to the contested issues in the Swanson’s marital property distribution. First, we consider the District Court’s distribution calculation of Ronald’s two pension plans. In determining the percentage of the plan awarded to each party at payout, the court employed the “present value” method, as opposed to the “time rule” method, based on the fact that Ronald’s plans were “defined contribution plans” and the parties presented evidence showing the value of the accounts both at time of marriage and time of divorce. As such, for the annuity account, it subtracted the value of the account on June 30,1993, from the balance of the account on December 31, 2001, to ascertain the marital portion of the asset. It determined that the marital asset was approximately 87% of the total annuity, therefore, at payout Rennee was entitled to 43.5% of each payment. For the pension plan, the court added the yearly contributions during the marriage to determine the marital portion of the account. As a result, it determined that the marital amount was approximately 53.9% of the contributions, therefore, at payout Rennee was entitled to 26.95% of each payment.
¶19 Ronald claims that there is insufficient evidence in the record to support the District Court’s determination of distribution of his two retirement fimds. He asserts that the court should have employed the time rule method to calculate the distribution because it was impossible to reduce the plan to its present value and pay Rennee a fair share of cash representing her interest in the fimds. He bases this argument on the assertion that it is impossible to tell what percentage of each plan was earned during the marriage due to the fact that he is still working and contributing to each plan. Consequently, at the time he would draw on each plan, the percentage of the respective plans earned during the marriage would be far less than the date of divorce.
¶20 In response, Rennee asserts that the District Court correctly determined the percentage of the accounts entitled to her at payout. She contends the time rule method has been applied by this Court when the value of the accounts are unknown either at the time of marriage or the time of divorce. Under these circumstances, relying upon In re Marriage of Truax (1995), 271 Mont. 122, 125-26, 894 P.2d 936, 938, she asserts that due to the evidence presented providing the value of the accounts at both times, the present value method is appropriate. Furthermore, she argues that the time rule method is not appropriate when plans are “defined contribution plans” as are Ronald’s plans. Therefore, she maintains that the present value method, as utilized by the District Court, is the appropriate method to determine her distribution of Ronald’s pension plans. We disagree.
¶21 This Court has long held that pension plans are part of the marital estate, therefore, the question is how to equitably divide such plans. See Truax, 271 Mont. at 125, 894 P.2d at 938. We have considered two methods for establishing values of pension plans: (1) the present value method (lump sum distribution); and (2) the time rule method (deferred distribution). See In re Marriage of Robinson (1994), 269 Mont. 293, 298-99, 888 P.2d 895, 898-99. We have said that “[generally, the proper test for determining the value of a pension is the present value.” Rolfe v. Rolfe (1988), 234 Mont. 294, 296, 766 P.2d 223, 225. Yet, we have held that a district court has not abused its discretion when applying the time rule method. See Truax, 271 Mont. at 126, 894 P.2d at 938; Robinson, 269 Mont. at 299, 888 P.2d at 899.
¶22 The present value method enables parties to determine and distribute the value of the pension at the time of divorce in a lump sum. “This method is preferred when the pension can be adequately valued and sufficient assets (either cash or property) exist in the marital estate to offset the present value of the non-employee spouse’s portion of the pension.” Susan J. Prather, Comments, Characterization, Valuation, and Distribution of Pensions at Divorce, 15 J. Am. Acad. Matrim. Law. 443, 455 (1998). Courts frequently value defined contribution plans via the present value method because such values are readily ascertainable at the time of dissolution and sufficient other marital assets exist to compensate the non-employee spouse for her share at that time. Prather, supra, at 455. Thus, at the time of dissolution, courts assign a value to the plans and offset the property settlement including such values.
¶23 Conversely, due to various contingencies such as unreliable evidence, future contributions and other speculative factors, determining the present value of pension plans is difficult, thus courts apply the time rale method when the district court defers distribution of the marital portion of the pension until payout of the benefit. See Truax, 271 Mont. at 125, 894 P.2d at 938 (“[the husband] testified that he did not know the actual value at the time of the couple’s marriage, and neither party was able to provide independent confirmation of that value. Under [those] circumstances, it was not unreasonable for the District Court to ... apportion benefits based upon the time rule ....”); Robinson, 269 Mont. at 299, 888 P.2d at 898 (holding that the district court did not err when it applied the time rule because “[a] spouse ... is entitled to increases or accruals on his or her interest in the retirement plan because of the delay in receiving that interest.”); Rolfe, 234 Mont. at 299, 766 P.2d at 226 (“if the court concludes that because of uncertainties affecting the vesting or maturation of the pension that it should not attempt to divide the present value of pension rights, it can instead award each spouse an appropriate portion of each pension payment as it is paid.”) (quoting In re Marriage of Brown (Cal. 1976), 544 P.2d 561, 567). We described the time rule method in Rolfe, whereby:
the marital interest is represented by a fraction, the numerator of which is the length of the employee’s service during the marriage, and the denominator is the employee’s total length of service. This fraction is then applied to each benefit payment, lump or periodic, to determine the portion earned during the marriage. Although the extent of the marital interest is determined as of the date of the dissolution, the benefit factors to be applied to the pension credits earned during the marriage are those in effect at retirement.
Rolfe, 234 Mont. at 298, 766 P.2d at 226.
¶24 We concur with Ronald that the time rule method of valuation is appropriate in this case, however, we come to our conclusion for different reasons. After reviewing the District Court’s valuation determination, we have determined that the findings of fact upon which the valuation is based are clearly erroneous. This Court is convinced that the District Court mistakenly combined both the present value and time rule methods in determining the distribution of Ronald’s pension and annuity plans, thereby creating a hybrid approach clearly not supported by any Montana or other jurisdiction’s case law.
¶25 As we said in Rolfe, a district court is granted substantial discretion to devise a method to accomplish an equitable distribution. Rolfe, 234 Mont. at 300, 766 P.2d at 227. Here the District Court chose to defer distribution of Ronald’s pension plans until he retired and payments commenced. From the record, we attribute this decision to either the lack of marital assets to offset the present value of the accounts, or the difficulty in ascertaining the present value of the accounts due to the fact that Ronald continues to contribute to the plans. Here, the District Court proceeded to use the present value method to determine the marital property value of the plans and converted the value into a percentage that Rennee would be entitled to at payout. Therein lies the District Court’s error, whereby the court assigned a present value of the account and then combined it with the percentage and deferred distribution concept from the time rule method.
¶26 In any event, the court mistakenly combined these valuation methods. We conclude that substantial credible evidence does not support the District Court’s apportionment of Ronald’s pension and annuity plans, therefore, it abused its discretion. The District Court has broad discretion to apply whichever method it deems appropriate in valuing the pension plan, however, it may not combine these methods. If the court determines that the present value method is appropriate under these circumstances, then the property settlement must reflect a present offset or payment for such valuation. If the court determines that the time rule is more appropriate under these circumstances, then it must use the formula this Court has adopted in Rolfe to establish the marital value of the pension plans and assign a percentage of payout that Rennee is entitled to at the time of payout. We remand this issue to the District Court for determination consistent with this Opinion.
¶27 Second, we consider the BankOne Visa debt. Ronald argues that the District Court erred when it treated the BankOne Visa debt in the amount of $10,880 as a marital debt. He asserts that Rennee incurred the debt prior to marriage by remodeling her kitchen in her mobile home that she subsequently sold for $3200, and she could not substantiate the exact amount charged on the credit card for the remodel. Thus, he contends that the debt should be offset by the $3200 realized on the sale of the mobile home. Rennee asserts that there is substantial evidence to support her claim that the $10,880 debt was incurred during the marriage and enjoyed by both parties, therefore, such reduction would be improper.
¶28 The District Court had the opportunity to review the evidence presented and observe the testimony of the parties. Accordingly, we conclude that there is sufficient evidence to support the court’s distribution of debt. We further determine that the evidence has not been misapprehended and we do not have any conviction that a mistake has been made. We, therefore, hold the District Court did not abuse its discretion in treating the BankOne Visa debt as a marital debt.
¶29 Third, in her cross-appeal, Rennee argues that the District Court erred when it found that the seven cows were Ronald’s separate property, consequently not including the value in the marital estate. Section 40-4-202, MCA, provides for equitable distribution of preacquired property, requiring a district court to take into consideration the contributions of the non-acquiring spouse to its preservation or appreciation. Stoneman v. Drollinger, 2000 MT 274, ¶ 18, 302 Mont. 107, ¶ 18, 14 P.3d 12, ¶ 18. The non-acquiring spouse is entitled to an equitable share of only the appreciated or preserved value which is attributable to his or her efforts. In re Marriage of Rolf, 2000 MT 361, ¶ 46, 303 Mont. 349, ¶ 46, 16 P.3d 345, ¶ 46.
¶30 While recognizing that he bought cows prior to the marriage, Rennee contends that her direct and indirect contributions to the marriage helped maintain the small original and replacement herd and her income helped maintain the family home. Thus, she contributed to the maintenance and increase in value of the herd and the cows should have been included in the marital estate.
¶31 Ronald rebuts Rennee’s argument of contribution by stating that the court correctly concluded that the cattle can be traced to the sale of his premarital property, treating them as his premarital property. He asserts that the court made an implicit finding that Rennee’s contributions to the upkeep of the cattle were minimal, as supported by the evidence, thus its finding that the cattle could be traced to his premarital monies was not in error. See Interstate Brands Corp. v. Cannon (1985), 218 Mont. 380, 708 P.2d 573.
¶32 We conclude that the District Court did, in fact, consider Rennee’s contributions to the maintenance of the cattle in reference to its preservation and appreciation. Both parties presented testimony and evidence addressing Rennee’s contributions. While required to consider such contributions, district courts are vested with broad discretion to consider such evidence, determine fair distributions and exclude assets or property from the marital estate. See Harper v. Harper, 1999 MT 321, ¶ 36, 297 Mont. 290, ¶ 36, 994 P.2d 1, ¶ 36. Accordingly, there is sufficient evidence to support the court’s finding that the cattle could be traced to pre-marital land proceeds and that evidence has not been misapprehended nor do we have any conviction that a mistake has been made. We, therefore, conclude the District Court did not abuse its discretion in treating the cattle as Ronald’s premarital property, thus outside the marital estate.
¶33 In summary, we affirm the District Court as to the disposition of the BankOne Visa debt, the proceeds from the sale of Pete the Horse and the designation of the cattle as pre-marital property. We reverse the District Court regarding the 1989 Ford Ranger and direct it to distribute the proceeds of the sale of the truck equally. We also reverse the District Court regarding its determination of valuation for Ronald’s two pension plans and remand for determination not inconsistent with this Opinion.
ISSUE TWO
¶34 Whether the District Court erred when it determined the maintenance award from Ronald to Rennee.
¶35 In considering the factors contained in § 40-4-203, MCA, the District Court concluded that Rennee lacked sufficient property to provide for her needs and was unable to support herself through appropriate employment. Therefore, it awarded her maintenance of $500 per month for a three year period. Ronald argues that the District Court misapprehended the evidence and thus erred in awarding maintenance to Rennee. Furthermore, he asserts that the court erred in determining Rennee’s needs and suggests that this issue should be remanded for redetermination. Rennee counters stating that the evidence supports the District Court’s conclusions and she meets the threshold requirements for awarding maintenance pursuant to the statute.
¶36 An award of maintenance is dependent upon a court’s finding that a spouse lacks sufficient property to provide for her reasonable needs and is unable to support herself through appropriate employment. Section 40-4-203(1), MCA; Bee, ¶ 28. The court must consider Rennee’s financial resources, her ability to meet her needs independently, the time necessary to acquire sufficient education or training to become employable and the standard of living established during the marriage. Section 40-4-203(2), MCA; Bee, ¶ 28.
¶37 Here, the District Court considered Rennee’s past work experience and current and future wage earning capabilities. The court found that Rennee planned to move to Las Vegas to live with her brother and sister-in-law where her estimated earnings would be less than in Montana. It also contemplated her living expenses and the nominal property awarded through the division of the marital estate to assist her in her support. It determined from the evidence presented that after the parties separated, Rennee was living at a standard lower than during their marriage. After considering all the factors contained in § 40-4-203, MCA, the court concluded that Rennee should be awarded maintenance of $500 per month for a three year period.
¶38 After reviewing the record and the findings of fact and conclusions of law issued by the District Court, we conclude that the District Court did not abuse its discretion when awarded Rennee temporary maintenance payments pursuant to § 40-4-203, MCA. We affirm the District Court’s determination of this issue.
ISSUE THREE
¶39 Whether the District Court erred when it did not award attorney fees to Rennee.
¶40 In her cross-appeal, Rennee contends that the District Court erred when it failed to award her attorney fees. She states that this Court considers three factors when determining whether to award attorney fees: necessity, reasonableness, and production of competent evidence. See Schmiedling v. Schmiedling, 2000 MT 237, ¶ 25, 301 Mont. 336, ¶ 25, 9 P.3d 52, ¶ 25. In arguing that she satisfied these requirements, Rennee asserts that it is apparent from the evidence that she could not pay her attorney fees from her own resources, that Ronald has the resources to pay her attorney fees and he is in a much more favorable financial situation than she is in.
¶41 Ronald counters stating that according to Plath v. Schonrock, 2003 MT 21, 314 Mont. 101, 64 P.3d 984, there are seven factors a court must consider when determining reasonable attorney fees and a district court cannot award reasonable attorney fees without evidence supporting the award and reasonableness of such award. He claims that Rennee submitted no such evidence, and therefore, the court did not err.
¶42 In her answer brief, Rennee responds to Ronald’s counterargument by stating that she requested reasonable attorney fees in all of her pleadings. Furthermore, she stated that providing all the evidence at trial to meet the seven factors would unnecessarily prolong every trial in which fees were requested. She relied upon In re Marriage of Davies (1994), 266 Mont. 466, 880 P.2d 1368, to assert that it would be an error to award attorney fees without holding a separate hearing after the trial. Rennee suggested that this appeal should be remanded for a hearing to make such determination of attorney fees awarded to her.
¶43 We are unpersuaded by Rennee’s arguments and affirm the District Court’s determination to require each party to pay their respective attorney fees. Section 40-4-110(1), MCA, provides in pertinent part:
The court from time to time, 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 chapters 1 and 4 and for professional fees, including sums for legal and professional services rendered and costs incurred prior to the commencement of the proceeding or after entry of judgment. The court may order that the amount be paid directly to the professional, who may enforce the order in the professional’s name.
¶44 It is within the discretion of a district court to award attorney fees pursuant to § 40-4-110, MCA. Marriage of Harper, 1999 MT 321, ¶ 47, 297 Mont. 290, ¶ 47, 994 P.2d 1, ¶ 47. Absent an abuse of such discretion, this Court will not reverse a district court’s determination regarding attorney fees. Harper, ¶ 47. After a review of the record, we conclude the District Court did not abuse its discretion when it abstained from awarding attorney fees. We affirm the District Court on this matter.
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
The defendant was convicted of the crime of grand larceny and sentenced to imprisonment in the state prison for a term of fourteen years. He has appealed from the judgment and an order denying his motion for a new trial.
The information charges that the defendant “did then and there willfully, unlawfully, and feloniously take, steal, drive, lead, and entice away one steer branded [indicating the form of brand] on the left thigh, # * * the property of J. E. Pipal, and not the property of the defendant, of the value of $25, with the felonious intent then and there on the part of him, the said defendant, to deprive and defraud the true owner of his property, and to steal the same.” There is also included a charge of two prior convictions of felonies.
1. The first contention is that the information does not charge a public offense under the statute. (Rev. Codes, see. 8642.) Apart from the allegations as to the prior convictions, the information is substantially the same in form as the first count of the one examined in State v. Van, 44 Mont. 374, 120 Pac. 479. It was there held that, while the pleading might be entirely inadequate to meet the requirements of section 8642, it was amply sufficient to bring it within the requirements of section 8645, which defines the species of grand larceny charged by it. This contention is accordingly overruled.
2. At the commencement of the trial, R. R. Purcell, Esq., a member of the bar of Montana, was upon his own motion, over the objection of counsel for defendant and the county attorney, permitted to appear as associate counsel for the state. It is alleged that this was prejudicial error. Counsel did not reserve any exception to the court’s action; therefore he must be deemed to have acquiesced in it. Furthermore, it does not appear that Mr. Purcell took any active part in the trial. Even so, it was within the discretion of the trial judge to permit him to appear and take part, whether he was employed by persons interested in the prosecution or appeared as a volunteer; and since it is not shown that he was guilty of any conduct which prevented the defendant from having a fair trial, the defendant cannot be heard to complain. (State v. O’Brien, 35 Mont. 482, 10 Ann. Cas. 1006, 90 Pac. 514.) The record does not disclose by whom Mr. Purcell was employed. It may be presumed that he represented the board of stock commissioners. If this was so, he had the right to appear in aid of the prosecution. (Rev. Codes, sec. 1787.)
3. Error is alleged upon the action of the court in permitting the county attorney at the commencement of the trial to indorse upon the information the name of one See, a witness for the state. It appears, from a colloquy which occurred at the time between counsel and the trial judge, that the name of the witness was not known to the county attorney when the information was filed. Under these circumstances the ruling was proper. (State v. Sloan, 22 Mont. 293, 56 Pac. 364; State v. Calder, 23 Mont. 504, 59 Pac. 903; State v. Schnepel, 23 Mont. 523, 59 Pac. 927; State v. Newman, 34 Mont. 434, 87 Pac. 462.)
4. Contention is made that the court erred in restricting the cross-examination of the witness Dunn. The witness had testified that he had seen the animal in controversy in the pasture of the defendant after the time at which it was alleged to have been stolen, and that subsequently he had bought its hide from the defendant. He also identified a head, which he said had been found by him and others on the premises of the defendant at the time of the arrest, as that of the stolen animal. During his cross-examination.he was asked a number of questions for the purpose of bringing out the fact that he had taken an active part in obtaining evidence for the state and was, therefore, a partisan witness, and others for the ostensible purpose of testing his recollection of conversations had by him with the defendant. Some of them had been asked and answered more than once. When counsel put them again, the county attorney ob jected, and the witness was thereupon not allowed to answer. The right of cross-examination is a substantial one and may not be unduly restricted. It may extend not only to facts stated by the witness in his original examination, but to all other facts connected with them which tend to enlighten the jury upon the question in controversy. (Kipp v. Silverman, 25 Mont. 296, 64 Pac. 884; Hefferlin v. Karlman, 30 Mont. 348, 76 Pac. 757; State v. Howard, 30 Mont. 518, 77 Pac. 50; Rev. Codes, sec. 8021.) The rule necessarily includes questions, the purpose of which is to bring out facts illustrative of the motives, bias, and interest of the witness, or as reflecting upon his capacity and memory. The right would be of little value if inquiry into these matters were not permitted. (3 Jones on Evidence, 829; State v. Howard, supra.) But the trial court has a wide discretion in controlling the examination of witnesses during every stage of the case, and, if no abuse is made to appear, the appellate. court will not interfere. (3 Jones, on Evidence, 821; State v. Howard, supra; State v. Barrett, 43 Mont. 502, 117 Pac. 895.) For, though it be assumed that in a proper case a repeti-' tion of questions should be permitted, we are satisfied that the defendant was not prejudiced by the ruling complained of.
5. The witness Markle, having testified that he was in the employment of a cattle company as stock inspector at the time the arrest was made, was asked by counsel for defendant if he had not been employed “for the purpose of putting up a job on Biggs.” He was not permitted to answer. There is no merit in the contention that this ruling was restrictive of the right of cross-examination. There was no evidence tending to show that the witness was engaged in a criminal conspiracy to convict the defendant. He could not be expected to have answered otherwise than in the negative. The only purpose the question’could serve was to insult and degrade the witness. The court properly protected him by refusing to require him to answer. (State v. Rogers, 31 Mont. 1, 77 Pac. 293; State v. Trueman, 34 Mont. 249, 85 Pac. 1024; Rev. Codes, sec. 8031.) Moreover, no exception was reserved to the ruling. Even bad it- been prejudicially erroneous, defendant could not now make complaint.
6. Evidence was introduced to sbow that one Biggs bad previously been convicted of burglary in Ravalli county and bad served a term in the state prison. The witness See bad attended the trial. He was called to identify the defendant as the same person. Among other questions be was asked what Biggs had been tried for. Over objection of defendant he was permitted to answer, and said “for burglary.” It is argued that the fact of Biggs’ conviction and the nature of the crime could be proved only by the record. This is true. The record of conviction was introduced. The question propounded to See was nevertheless proper as tending to establish the identity of the defendant.
7. Counsel for the state was permitted, over objection, to introduce in evidence and exhibit to the jury the hide obtained by Dunn from the defendant and the head found upon his premises. It is contended that the evidence did not tend to show that both were parts of the same animal and that the hide had not been identified as that of the animal in question. The evidence tending to show that the head was that of the stolen animal was clear and convincing. That as to the identity of the hide was very much less so; but taken all together it was sufficient to justify the court in permitting it to be inspected by the jury. It was of the same general color as the head; it had upon it the brand of the prosecuting witness, was still fresh at the time it was bought by Dunn, and the circumstances otherwise tended to show that the stolen animal had been slaughtered by the defendant only a few days prior to the arrest.
8. Error is predicated upon the refusal of the court to give defendant’s requested instructions Nos. 3, 6, and 8. The first of these requests was fully covered by paragraph 22 of the charge as given, and the others by paragraphs 19 and 20, respectively, As a whole, the charge was carefully formulated. It covered every phase of the case, including the principles of law embodied in the special requests by defendant. We find no error in it.
9. Finally, it is contended that the evidence is insufficient to justify the verdict. This contention is wholly without merit. It is true that the testimony of the witness Daniels, who apparently aided in the theft and was therefore an accomplice, furnished the state material assistance in making out its ease against the defendant. But after a careful review of the evidence as a whole, we are of the opinion that there is enough of probative value in it to warrant a submission of it to the jury for a finding as to the guilt of the defendant, independently of the testimony of the accomplice. This more than satisfies the requirements of the statute. (Rev. Codes, sec. 9290; State v. Stevenson, 26 Mont. 332, 67 Pac. 1001.)
The judgment and order are affirmed.
'Affirmed.
Me. Justice Smith and Mb. Justice Holloway concur. | [
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MR. JUSTICE SMITH
delivered the opinion of the court.
On September 27, 1907, the defendant at Plains, Montana, ordered of the plaintiff, at Beloit, Wisconsin, in writing, one No. 108 open side molder with directions to ship “in good order f. o. b. Beloit, Wisconsin, at once,” at an agreed price of $900, payable within sixty days after date of shipment. The order also contained this stipulation: “In ease of rejection of the property or failure to pay as stated herein, consignee shall at once return and deliver the property in good order to consignor, f. o. b. Beloit, Wis.” The machine was not shipped until October 28, 1907, and was not received until December 7; but defendant made no objection on that score. On January 18, 1908, it notified the plaintiff that the machine was defective, and from that time on until May 12, 1908, many letters passed between the parties; the defendant constantly claiming that the molder was defective, and the plaintiff demanding payment therefor. On March 24 defendant notified the plaintiff by letter that, unless it sent a man to put the machine in condition, “We will take it out of the mill and await your further order.” On April 4 it wrote a letter to the plaintiff, in part as follows: “If we find the machine in the condition that our man reported and that your man has stated that the machine could not be fixed with out new bed-plates, we shall remove the machine at once from our mill and it will be at your disposal. In ease we replace the machine we will hold same for the advance charges of freight, some $86.” The response was a demand for payment. On May 5 it again wrote to plaintiff, as follows: “We have to-day ordered our manager at Plains to take the machine out and put back the old one, and while we should charge you $100 for trouble in making the change, we only ask you to pay the advance freight charges that we have been to with your machine. We will keep the machine covered up until you can order us where to ship it to. It is absolutely no good to us and not as represented by your salesman.” On May 9 it again wrote, as follows: “We received the machine in due time after a shipment and are ready to pay for the same if it were not defective. You probably could sell the same in Spokane. We have no use for it. The machine is at your disposal if you will send us a check to cover the freight, $85.” This action was brought on February 4, 1909, to recover the purchase price of the machine. The answer admits that the defendant still has the machine in its possession, and that it has not paid for the same, but alleges affirmatively that it was defective, and that defendant “promptly notified plaintiff of the defective and improper construction of the machine and its unfitness for the purpose for which it was designed, and of defendant’s refusal to accept the machine or to pay therefor.” The cause was tried to the district court of Custer county, with the aid of a jury, which returned a verdict, by direction of the court, in favor of the plaintiff. Judgment was entered accordingly. Defendant appeals from the judgment, and from an order denying a new trial.
It is of little consequence whether we regard the defendant as having refused to accept the machine on account of alleged defects therein, or as having rejected the same for that reason. The result is the same. In either event, it was its duty under the contract to return it to the plaintiff f. o. b. Beloit; that is to say, with freight prepaid. This it expressly agreed to do. Its letters show that it received the machine without objection as to any delays or miscarriage of shipment, set it up, used it, declared it to be. unfit for the work and defective, and then, instead of returning it to the plaintiff at Beloit, in accordance with the terms of the contract, it first demanded a refund of $86, freight paid from Beloit to Plains, and subsequently agreed to reship it, provided plaintiff would designate the place of destination and forward a check to pay the freight, and still retains it. In other words, the defendant refuses to either pay for the machine, or return it, as it agreed to do. Even if it be admitted that the machine was not in good order when it arrived at Plains, and that it was defective, it was the duty of the defendant, under the express terms of its contract, to either pay for it, or reject it and return it to Beloit, freight prepaid. It has refused and neglected to do either. (See King V. Townsley, 64 Iowa, 75, 19 N. W. 859; Keynes v. Plano Mfg. Co., 36 Tex. Civ. App. 567, 82 S. W. 532; Heagney v. J. I. Case Threshing M. Co., 4 Neb. (Unof.) 745, 96 N. W. 175.)
The appellant insists that respondent’s attitude, as disclosed by certain letters, copies of which are in the record, absolved it from returning the machine, for the reason that the letters show respondent would have refused to receive it, if returned to Beloit. The contention is that the law does not require an idle act. Numerpus cases are cited to support the contention. The record shows, however, that as early as February 12 defendant notified the plaintiff that, if the machine did not operate satisfactorily, it would “throw it out and use the old machine.” On March 24 it caused to be written: “We will take the machine out of the mill and await your further orders.” And on April 10: “We will remove the machine and it will be at your disposition. We will hold same for advance charges of freight, some $86.00.” And on May '5: “We ask you to pay the advance freight charges that we have been to with your machine. We will keep the machine covered up until you can order us where to ship it to.” And finally on May 9: “ The machine is at your disposal if you will send us a check to cover the freight, $85.” In the light of these letters, we do not see how it can be contended that the plaintiff is estopped to claim that the defendant should have carried ont its contract by returning the machine to Beloit f. o. b., or that plaintiff waived that provision of the contract. The defendant assumed the attitude very early in the correspondence of refusing to return the machine, unless plaintiff advanced certain moneys; and the latter was therefore justified in demanding payment therefor in accordance with the terms of the contract, as it did. But it is idle to further discuss this point. The plaintiff, in a letter written on May 7, quoted to the defendant that portion of the contract relating to its duty in case of rejection of the property or failure to pay therefor, and then continued: “Tour rejection of the machine carries with it the obligation to deliver it to us in good order, free of all freight and all other charges. We suggest that you consider fully your responsibility under this instrument. ’ ’ The reply to this was the letter, heretofore quoted, in which the defendant stated: “The machine is'at your disposal if you will send us a check to cover the freight, $85.” The correspondence is searched in vain for an unconditional offer by defendant to return the machine; and plaintiff never assumed the attitude of refusing to receive it. Under these circumstances, we are of opinion that it had the right to insist upon the strict letter of its contract.
The judgment and order are affirmed.
Affirmed.
Mr. Chief Justice Brantly and Mr. Justice Holloway concur. | [
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] |
MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
This action was brought to recover money due for work and labor performed. The complaint alleges that during October, November and December, 1909, plaintiff worked for the defendant Anaconda Copper Mining Company and earned in such employment $290; that in order to secure credit for merchandise which he needed, he assigned his claim to the defendant Hen-, nessy Mercantile Company, with the understanding that when the money was collected, the mercantile company should deduct the amount of credit extended and pay over to plaintiff the balance; that plaintiff received but three dollars on account of credit extended'to him, but that defendant Anaconda Copper Mining Company and defendant Hennessy Mercantile Company each refuses to pay to him any sum whatever. It is further alleged, upon information and belief, that the defendant Anaconda Copper Mining Company has paid the money over to defendant Hennessy Company, and that the Hennessy Company refuses to pay the same or any part thereof to plaintiff. Each of the defendants appeared separately by demurrer. The demurrers are in all respects similar. Bach demurrer is general and special, and, in addition to challenging the sufficiency of the complaint, attempts to attack it upon the ground of misjoinder of parties and misjoinder of causes of action. The district court sustained the demurrer by the defendant Hennessy Mercantile Company and the demurrer of the defendant Anaconda Copper Mining Company, and overruled the demurrer interposed by defendant Hennessy Company. Plaintiff, refusing to amend or plead' further, suffered judgment to be entered in favor of defendants Hennessy Mercantile Company and Anaconda Copper Mining Company, and has appealed. The defendant Hennessy Company answered and the cause came on for trial, but upon objection the court refused to permit plaintiff to introduce any evidence as against the defendant Hennessy Company, upon the ground that the complaint does not state a cause of action as against that defendant. Thereupon judgment was entered in favor of defendant Hennessy Company also, and the plaintiff has appealed. The only questions presented arise upon the complaint itself.
1. That the complaint states a cause of action in favor of plaintiff and against the defendant Anaconda Copper Mining Company for wages due is not open to dispute. The mere fact that plaintiff assigned his claim to the defendant Hennessy Mercantile Company, as security for merchandise purchased or to be purchased, did not deprive the plaintiff of his title to the money due him or disqualify him from prosecuting an action therefor in his own name. The complaint alleges facts sufficient to show that the Hennessy Mercantile Company has an equitable interest in the claim, to the extent of credit furnished to plaintiff, and therefore that company was properly made a party defendant, to the end that a complete determination of the controversy be had in one action. (Kev. Codes, sec. 6488.) The complaint does not state a cause of action against the defendant Hennessy Company, and the trial court ruled properly upon the objection to the introduction of evidence. There is not any privity whatever shown between plaintiff and the Hennessy Company. The fact that the Anaconda Copper Mining Company wrongfully paid the money to the Hennessy Company does not discharge the former defendant or give to plaintiff a cause of action against the latter. The question was set at rest in this state by the decision in Whipps v. Lowney, 42 Mont. 546, 113 Pac. 750.
There is not any attempt made to state a cause of action as against the Hennessy Mercantile Company; but, as said above, that company was properly made a party defendant; and so far as the general demurrer of the Anaconda Copper Mining Company or the general demurrer of the Hennessy Mercantile Company is concerned, it should have been overruled.
2. The so-called special demurrers are not available to any of the defendants. The demurrer of the Hennessy Mercantile Company attacks the complaint, not upon the ground that it was improperly joined, but upon the ground that the Hennessy Company and the Anaconda Copper Mining Company are not properly united with it in the action as between it and the plaintiff. Likewise the demurrer by the Anaconda Copper Mining Company proceeds only upon the ground that as between the plaintiff and it, neither the Hennessy Mercantile Company nor the Hennessy Company is a necessary or proper party; and the demurrer of the Hennessy Company is subject to the same criticism. It is elementary that one defendant cannot raise an objection of this character in favor of another defendant. It is only the party himself who is improperly joined who can raise the question of misjoinder. (Cummings v. Reins Copper Co., 40 Mont. 599, 107 Pac. 904; Bliss on Code Pleading, see. 411; 30 Cyc. 140.) The several demurrers for misjoinder of parties should have been overruled.
3. It is earnestly insisted by counsel for respondents that the complaint does not state a cause of action in favor of plaintiff and against the defendant Hennessy Company, and with this we agree. But they also insist, with equal earnestness, that there is a misjoinder of causes of action. As said before, there is not any attempt to state a cause of action against the Hennessy Mercantile Company; so that, if there is a misjoinder of causes of action, it arises from the fact that a cause of action against the Anaconda Copper Mining Company, for wages due, is joined with some cause of action against the Hennessy Company. But the complaint fails to state a cause of action against the Hennessy Company, and it follows, as of course, that there cannot be a misjoinder. A statement of one cause of action, united with allegations which do not amount to a statement of a different cause of action, cannot constitute a misjoinder. From the very nature of things, to constitute a misjoinder there must be two or more causes of action stated. In 28 Cyc. 389, the rule is announced as follows : ‘ ‘ The pleading must contain a complete statement of two or more good causes of action to present a question of joinder. The use of ambiguous expressions which point to a cause of action other than that well stated, or which may be rejected as surplusage, is not sufficient. Hence where but one cause of action is alleged against one of defendants, and no cause of action is alleged against the remaining defendants, there is no misjoinder.” Upon principle the same rule is announced by this court in Cohen v. Clark, 44 Mont. 151, 119 Pac. 775.
The judgment in favor of defendant Hennessy Company is affirmed. The judgment in favor of defendants Hennessy Mercantile Company and Anaconda Copper Mining Company is reversed, and the cause is remanded with directions to overrule the demurrer interposed by each of those defendants. Each party prevailing in this court will recover his costs.
Mb. Chief Justice Beantly concurs. | [
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MR. JUSTICE HOLLOWAY
delivered the opinion of the court.
This action was commenced on July 19, 1911, against Christian Yegen and Peter Yegen. Summons was served upon Peter Yegen on August 17. On September 11 his default was en tered for want of an appearance. The action was dismissed- as to Christian Yegen, and on September 15 plaintiff made proof and judgment was regularly rendered and entered against Peter Yegen, who thereafter, on September 27, moved the court to set aside the judgment, open the default, and permit him to answer. The motion was supported by an affidavit accompanied by a proposed answer. The motion was denied, and defendant Peter Yegen has appealed from the judgment and from the order refusing to set aside the default.
1. The first ground of the motion to set aside the default is a mistake on the part of defendant Peter Yegen; but the affidavit discloses that the mistake was one of law, not of fact, and the trial court properly refused the motion on that ground. (Mantle v. Casey, 31 Mont. 408, 78 Pac. 591.)
2. The second ground of the motion presents the same question as the appeal from the judgment, viz.: Does the complaint state facts sufficient to constitute a cause of action ?
3. The complaint alleges that on November 26, 1902, G. W. Conniek was in possession of a section of land and one hundred and twenty-eight shares of the capital stock of the Big Ditch Company, a corporation, under a contract to purchase the same from Edward G. Bailey; that there was then due on the purchase price of such property installments aggregating $5,580, with interest at seven per cent per annum, the last of the installments to become due April 1, 1907. It is alleged that on December 26, 1902, an agreement was entered into between Conniek and defendant Christian Yegen, by the terms of which Conniek transferred his interest in the land and certificates and also transferred other personal property consisting of horses, farm machinery, etc., to Christian Yegen upon an understanding and agreement that Christian Yegen should pay the balance due on the Bailey contract as the installments became due; that Christian Yegen should be allowed interest on the sums so paid out by him at the rate of one per cent per month. The complaint in paragraph 3 then proceeds: “That it was further provided that said Christian Yegen should hold said property in trust until such time as the proceeds derived from the rents and profits of the same, or a sale thereof or any part thereof as the said G. W. Connick might direct, would pay out all indebtedness on said land and contract, and that thereupon the said Christian Yegen would reconvey to the said G. W. Connick, his heirs, executors, administrators or assigns any and all such property as might remain in his possession after such indebtedness might be paid.” It is further alleged that by direction of Connick, Christian Yegen sold and transferred to Fratt and O’Donnell a portion of the land mentioned, fifty-eight shares of the capital stock of the Big Ditch Company, and one hundred shares of the capital stock of the High Line Ditch Company; to Robert Connick a portion of the land, twenty-two shares of the stock of the Big Ditch Company, and forty-six shares of the stock of the High Line Ditch Company; and to this plaintiff a portion of the land, thirty shares of the stock of the Big Ditch Company, and forty-six -shares of the stock of the High Line Ditch Company. Paragraph 7 of the complaint reads as follows: “That for a long time prior to the twenty-ninth day of September, 1908, the rents and profits of said lands and the proceeds derived from the sale of portions of said lands greatly exceeded the total amount expended by the defendant Christian Yegen in the carrying out of said trust, and on that day there was in the hands of the said Christian Yegen a large amount of money due this plaintiff. That on or about the twenty-ninth day of September, 19.08, the said Christian Yegen paid to the plaintiff the sum of $4,000. ’ ’
It is alleged that about December 4, 1907, Christian Yegen wrongfully, unlawfully, and fraudulently transferred and delivered to the defendant Peter Yegen twenty [18] shares of the capital stock of the Big Ditch Company, and that Peter Yegen now holds the same in his own name, and that he took such stock with full knowledge that the same was a part of the trust estate. It is alleged that about December 1, 1907, G. W. Connick, for value, sold, assigned, and transferred to this plaintiff, a corporation, all his right, title, and interest in the property transferred to Christian Yegen together with all-rights of action which he then had against the defendants or either of them. A demand npon and refusal by defendants is pleaded, and the complaint concludes with a prayer that plaintiff be adjudged to be the owner of the twenty [18] shares of capital stock of the Big Ditch Company; that each of the defendants be decreed to be a trustee of the stock for the plaintiff; that defendants be required to transfer the stock to plaintiff; and that plaintiff recover his costs.
The theory upon which the complaint proceeds is that the trust was terminated prior to the commencement of this action, and therefore plaintiff, as the owner of the residue of the estate, can sue in its own right for the property which under the terms of the trust agreement was to be turned back upon the entire fulfillment of the object of the trust; but the complaint is fatally defective in failing to allege facts which show that the trust has been terminated. There is such brief reference to the terms of the trust agreement contained in the complaint that it is difficult to determine just who was intended as beneficiary, within the meaning of section 5367, Revised Codes. If the trust was created for the purpose of securing to Bailey the unpaid balance due him, as seems most probable, then Bailey could take advantage of it at any time prior, to its rescission. (Sec. 5389.) The complaint fails to show that the purpose for which the trust was created has been fulfilled. It is only by inference that it can be said to allege that Christian Yegen has paid out any money whatever. His duty was to pay Bailey the amount of- unpaid installments with interest; but it is uncertain from the complaint whether such payments were to be made from money received from rents, profits, and sales of the trust property, or whether Christian Yegen was to make the payments out of his own private funds. At most, it may be inferred that, if the proceeds from rents, profits, and sales of trust property did not produce funds sufficient to meet the installments as they became due, then Christian Yegen was to advance money sufficient to make up the deficit. Under the terms of the trust agreement as disclosed in paragraph 3 of the complaint quoted above, the object of the trust would not be aeeomplisbed in any event until the proceeds from rents, profits, and sales of trust property would pay the indebtedness against the property. If one object of the trust was to secure to Christian Yegen his compensation as trustee by way of interest on moneys advanced by him, then the object of the trust would not be accomplished until this had been done. If the purpose of the trust was to secure Bailey for the unpaid balance due him, then the trust would not be terminated until he was paid.'
It is alleged in paragraph 7 of the complaint quoted above that the proceeds from rents, profits, and sales exceeded the amount expended by Yegen; but it fails to allege that the amount received by him was sufficient to pay the installments due to Bailey or to reimburse himself, as provided in the trust agreement, or that Bailey has been paid. It is alleged in that paragraph that on September 29, 1908, Christian Yegen had in his possession a large amount of money belonging to plaintiff, and on that day paid over to plaintiff $4,000; but it is not alleged that this money was derived from trust property. If such was its source, the complaint fails to make the fact apparent.
The complaint is fatally defective in failing to disclose that the trust had been terminated before this action was commenced, and for this reason the judgment and order are reversed, and the cause is remanded for further proceedings.
Reversed and remanded.
Mr. Chief Justice Brantdy and Mr. Justice Smith concur. | [
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] |
MR. JUSTICE MATTHEWS
delivered the opinion of the court.
On April 4, 1925, an election for the issuance of $20,000 school district bonds was held in defendant District No. 44 of Fergus county, and a majority of the electors voted in favor of the issue; thereupon the defendant trustees of said district took the appropriate steps for the issuance and» sale of such bonds. Before the date of sale, however, plaintiffs, as resident taxpayers in said district, commenced an action to enjoin the sale. Issue was joined and the cause submitted to the trial court on an agreed statement of facts, and resulted in a judgment of dismissal and for costs in favor of the defendants. From this judgment plaintiffs have appealed.
From the agreed statement of facts it appears that School District No. 44 of Fergus county had been in existence as a legal entity for years prior to February, 1919; adjoining it there existed a small district with but nineteen children of school age, then known as School District No. 42. In February, 1919, the people residing in District No. 42, conceiving that their children would be better served in District No. 44, petitioned the county superintendent to annex their district to District No. 44. After a hearing duly noticed, the county superintendent made an order of annexation, which order was filed with the county clerk of Fergus county. From this order no appeal was taken, and its validity was never questioned until this action was commenced in May, 1925.
Upon the annexation, District No. 44 assumed jurisdiction over the territory included within the boundaries of District No. 42, and accepted the children therein into its schools as residents of the district; the board of county commissioners recognized, the annexation as valid, and levied school taxesi for District No. 44 upon all property within the enlarged district. School District No. 42 ceased to function as a district, and all of the residents within that territory, including the plaintiffs, acquiesced in the annexation, took part in school elections held in District No. 44, sent their children to its schools, and paid the taxes levied upon their property for its support and maintenance. In 1923 District No. 44 issued and sold refunding bonds of the district, which are still outstanding.
The question presented by the appeal is: Does the present status of School District No. 44,- as shown by the agreed statement of facts, warrant the judgment of dismissal?
Section 1034, Revised Codes of 1921, existed at the time of the attempted annexation as section 407, Chapter 76, Laws of 1913. It authorized the consolidation of school districts or the annexation of one district to another, which latter thereafter continues under its old name and organization, but in order to effect either consolidation or annexation under this section, a petition therefor must be presented to the county superintendent of schools of the county from each of the districts to be affected, and on these petitions an election must be called and the question voted upon in each district. No attempt was .made to comply with these provisions other than the presentation of a petition for annexation signed by residents of District No. 42, and the order of annexation was-clearly the result of following the provisions of section 1033, Revised Codes of 1921, then section 406, Chapter 76, above, providing for the extension of the boundaries of a school district on petition of a majority of the resident freeholders of territory which is a part of an organized district, to be made a part of such first district, on which petition the county superintendent of schools is authorized, after a hearing, to make the order of inclusion.
1. A school district, organized by compliance with the laws of this state, is a public corporation. (See. 1022, Rev. Codes 1921; Finley v. School District, 51 Mont. 411, 153 Pac. 1010; State ex rel. School District v. McGraw, 74 Mont. 152, 240 Pac. 812.)
2. Public or municipal corporations have been classified, with reference to the regularity or legality of their organization, as (a) corporations de ¡jure; (b) corporations de facto; and (c) void corporations. (28 Cyc. 171.)
(a) A corporation de' jure exists by reason of full eompli anee by tbe incorporators with the requirements of an existing law permitting the organization of such a corporation, and is impregnable to assault in the courts from any source. (Jameson y. People, 16 Ill. 257, 63 Am. Dec. 304; State v. Young, 3 Kan. 445; Smith v. Crutcher, 92 Ky. 586, 18 S. W. 521.)
(b) Under certain conditions, where an attempt has been made to create a corporation, which attempt falls short of the creation of a corporation de jure, the entity will, nevertheless, be recognized as a corporation de facto, and, if such is the case, the legality of the organization or existence can be questioned only by tbe state in a direct proceeding. (Dillon on Municipal Corporations, 5th ed., sec. 67; 25 Cyc. 174; Morgan v. Independent School District, 36 Idaho, 372, 211 Pac. 529; Nelson v. Consolidated School District, 181 Iowa, 424, 164 N. W. 874; Daily v. Marshall, 47 Mont. 377, 133 Pac. 681; Barnes v. Smith, 48 Mont. 309, 137 Pac. 541.) The general rule is that, in order to create a corporation de facto, there must exist a charter or general law under which such a corporation might lawfully be organized, an attempt in good faith to organize thereunder, and actual user of the corporate franchise. (1 McQuillin on Municipal Corporations, sec. 1511; 28 Cyc. 172; Coe v. City of Los Angeles, 42 Cal. App. 479, 183 Pac. 822; City of Carthage v. Burton, 51 Tex. Civ. App. 195, 111 S. W. 440; City of Salem v. Young, 142 Mo. App. 160, 125 S. W. 857; Lang v. Bayonne City, 73 N. J. L. 455, 122 Am. St. Rep. 391, 12 Ann. Cas. 961, 15 L. R. A. (n. s.) 93, 68 Atl. 90.)
(c) Where there is no law under which a corporation such as that attempted to be created can exist, or where there has been no attempt in good faith to organize under an existing law, it is generally held that the purported corporation is void, and the attempted exercise of corporate powers may be attacked, by a private individual who will be affected thereby, in an appropriate proceeding. (Green Mt. Stock Ranching Co. v. Savage, 15 Mont. 189, 38 Pac. 940; Cleveland v. School District, 51 Okl. 69, 151 Pac. 577; Dartmouth Sav. Bank v. School District, 6 Dak. 332, 43 N. W. 822; 28 Cyc. 174, and cases cited.)
Here we have a general law under which the annexation could legally have been accomplished; an attempt, apparently in good faith, to annex District No. 42 to District No. 44, not,, however, undbr the law providing for annexation, but under an existing law permitting the extension of the boundaries of one district to take in a part of another organized district, but followed, nevertheless, by user, acquiesced in by the public officials, District No. 42, and all freeholders residing therein, including the plaintiffs, for more than five years.
Manifestly the action taken was irregular and was not sufficient to create a corporation de jure, nor, under the general rule stated above, was it sufficient to create a corporation de facto, and, had timely action been taken, undoubtedly residents of District No. 42 could have prevented District No. 44 from exercising dominion and control over the territory of the former. (Van Wagener v. MacFarland, 58 Cal. App. 115, 208 Pac. 345.)
The case of Green Mt. Stock Ranch Co. v. Savage, above, is relied upon by plaintiffs as supporting their contention that a resident freeholder may attack the organization of such a corporation as the one under consideration at any time, if the second requisite given in the above definition of a de facto corporation, to-wit, an attempt in good faith to organize under the particular law providing for such organization, is lacking. There this court had under consideration the sufficiency of a complaint which alleged: “That nothing whatever was ever done by the county superintendent of schools, or the board of county commissioners, or any other person, which section 1875 of the Compiled Statutes of 1877 required to be done in order to organize a school district.” There appears to have been no showing as to whether the alleged school district had ever acted as such prior to the attempted levy and collection of taxes which were opposed by the plaintiff, or that any attempt under any law in existence was made to organize a school district. The court said: “If the facts stated in the complaint in relation to the organization of this district are true, then it never had any legal existence. It is a nullity. The organization of this district is not attacked on account of irregularities. But the facts alleged show that there never was in fact any such corporate entity. * * * In order to give a school district existence, at least something ought to be done which the law requires to be done in order that it may claim organization and assume to exercise the privileges and franchises of a corporation.” In the absence of any showing other than that of the complaint in that case, and under the rules heretofore announced, plaintiff’s contention would be unassailable.
But in the case at bar there was an attempt, apparently i\ in good faith, to organize under an existing law, resulting' in an order of annexation and followed for more than five years by user, acquiesced in by the public officials, District No. 42 and all of the resident freeholders thereof, including these plaintiffs.
In the recent case of Shore v. Board of Education, 97 Okl. 273, 223 Pac. 867, wherein the facts stated are quite similar to those in the case at 'bar, and it was contended, as here, that the corporation was void by reason of failure to proceed under the proper statute, the court said: “The rule announced by the decisions of our own court and of other states on this question may be said to be that if there is no law authorizing de jure corporations, a de facto corporation cannot exist, but if corporations of the nature attempted to be organized are recognized by the general system of law of the state, or if there is a law under which such corporation might be organized, even though the specific Act under which the organization proceeded is not strictly applicable, such corporation would exist as a de facto corporation, and its existence or the validity of its organization cannot be collaterally attacked.”, (See, also, Griffin v. Thomas, 86 Okl. 70, 206 Pac. 604.)
In Graham v. City of Greenville, 67 Tex. 62, 2 S. W. 742, it was held that, notwithstanding an election was held in a manner not sanctioned by the law, a corporation de facto existed, as the action constituted but an irregularity, quoting: “When the question arises collaterally,” says Mr. Cooley, “the courts will not permit its corporate character to be questioned, if it appears to be acting under color of law, and recognized by the state as such. And this though the manner of incorporation prescribed by the Constitution had not been followed.” Mr. Dillon, in his work on Municipal Corporations, says: “In public affairs, where the people have organized themselves, under color of law, into the ordinary municipal bodies, and have gone on year after year, raising taxes, making improvements, and exercising their 'usual franchises, their rights are properly regarded as dependent quite as much on acquiescence as on the regularity of their origin.” (Dillon on Municipal Corporations, 5th ed., see. 67.)
In People ex rel. Gridley v. Farnham, 35 Ill. 562, it is declared that, after long-continued use of corporate powers, and the acquiescence of the public in them, the law will indulge the presumption that the corporation was legally created.
Under these authorities we would be justified in holding that School District No. 44 had, at the time this action wa^f* commenced, become a corporation de facto, and that there-l fore it was not open to the collateral attack made upon it, but we need not go so far as that. . S
3. The defendant district had pleaded an estoppel as against the plaintiffs, and under the agreed facts, it is urged that this is a sufficient plea.
After a community has for years, as in the case at bar, exercised the functions of a public corporation, its legal existence cannot be questioned without causing disturbance more or less serious, and if the question of the regularity of its organization can be kept open to collateral inquiry indefinitely, no one can ever 'be secure in dealing with such entities, or be sure that taxes levied, bonds floated, or contracts necessarily entered into for the transaction of its business will be valid and enforceable. The transaction of public business might be blocked at any time at the will or whim of a private individual and the credit of the corporation impaired or destroyed. For these and other cogent reasons it is held that: “An individual may be estopped by his conduct to attack the validity of the incorporation of a municipality, even though, but for such estoppel, he might do so.” (28 Cyc. 175.) Thus acquiescence in the exercise of corporate functions, and dealing with the corporation as such over a period of years will estop all persons dealing with the corporation from assailing its legality. (In re Flemington Borough, 168 Pa. 628, 32 Atl. 86; St. Louis v. Shields, 62 Mo. 247; Cowell v. Colorado Springs Co., 3 Colo. 82; People v. Maynard, 15 Mich. 463; People v. Curley, 5 Colo. 412; State v. Westport, 116 Mo. 582, 22 S. W. 888; State v. Leatherman, 38 Ark. 81; State v. Pell City, 157 Ala. 380, 47 South. 246; Board v. Crittenden, 94 Fed. 613, 36 C. C. A. 418.)
Counsel for plaintiffs contends that, in order to create an estoppel by acceptance of benefits, it is essential that the party against whom the estoppel is claimed must have acted with knowledge of the fact and of his rights, and that the record discloses that these plaintiffs had no knowledge of the creation of the district until April, 1925. He cites, in support of his contention, 21 C. J. 1207, 10 R. C. L. 694, and Peterson v. School Board, 73 Mont. 442, 236 Pac. 670. Here the plaintiffs did more than accept benefits; they dealt with the district and accepted liability as well; they paid the taxes levied against their property for a number of years, thus recognizing the district and acquiescing in its assumption of corporate capacity, and the estoppel here invoked is not, therefore, strictly an estoppel by acceptance of benefits, but rather it is an estoppel based upon public policy, because of the confusion into which a judgment, at this late date, that the organization was void, would throw public and private rights and interests acquired through years of operation with the acquiescence of the inhabitants, and is therefore not dependent upon knowledge of the facts.
A similar contention was made in the case of Hamilton v. San Diego County, 108 Cal. 273, 41 Pac. 305, and under like fact conditions, and was disposed of by the following statement: “The plaintiff here and hi's numerous assignors, owners of property included within the district recognized its corporate existence by paying taxes for its use in discharging the debts incurred. True they did this, as the court finds, under a mistake as to the legal creation of the district, but that is immaterial, ’ ’ etc.
Under the facts disclosed in the record before us, we are of the opinion that the plaintiffs were in no position to question the existence of the enlarged District No. 44, and that, therefore, the facts warranted the judgment of dismissal entered.
The judgment is affirmed.
Affirmed.
Mr. Chief Justice Callaway and Associate Justices Holloway, Galen and Stark concur. | [
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] |
PER CURIAM.
Pursuant to praecipe of counsel it is ordered that the appeal in this cause be dismissed. | [
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JUSTICE TRIEWEILER
delivered the Opinion of the Court.
Defendant Robert Duane Anderson was convicted in the Nineteenth Judicial District, Lincoln County, of Criminal Possession of Dangerous Drugs with Intent to Sell in violation of § 45-9-103, MCA. Anderson appeals from the District Court’s denial of his motion to suppress evidence obtained in the warrantless search of his vehicle. We reverse and remand.
The dispositive issue on appeal is:
Did the Lincoln County Sheriff’s Department have a particularized suspicion to justify an investigative stop of the defendant’s vehicle?
In the early afternoon on Tuesday, October 8, 1991, the Lincoln County Sheriff’s Department received a tip that Robert Duane Anderson and another individual were leaving Libby, Montana, and driving to Washington to retrieve a large quantity of marijuana. The informant told Officer Don Bemall that Anderson and his fellow passenger would be traveling in Anderson’s blue Toyota pickup and that they would be returning to Montana in the late night on October 8,1991.
Officer Bernall discussed the tip with County Attorney Scott B. Spencer and they decided the tip should be confirmed before applying for a search warrant. They devised a stakeout strategy to verify the tip and to conduct further investigation. By approximately 6:00 p.m. on October 8, 1991, the plan was implemented.
The dispatcher at the Lincoln County Sheriff’s Office directed Officers Doug Johnson and Klint Gassett to drive in two separate patrol cars to the Idaho-Montana border on U.S. Highway 2. Two other officers were directed to the Idaho-Montana state line on Highway 56. The officers were instructed to wait in their positions until they received a message from Officer Bernall that he had sighted Anderson’s blue pickup, and once the pickup crossed the Idaho border into Montana, the officers were to stop it for further investigation.
Night fell, and in the early morning hours of October 9, 1991, Officer Bernall traveled west into Idaho on U.S. Highway 2, in an effort to locate Anderson’s pickup. At about 1:20 a.m., Officer Bernall sighted a blue pickup traveling eastbound toward Montana. Officer Bernall alerted Officers Johnson and Gassett by radio that he had sighted what he believed to be Anderson’s pickup. Officer Bernall instructed the two officers to verify the pickup’s license plate by following it. Anderson passed the two patrol cars on Highway 2, just inside the Montana border. By following the pickup, the officers confirmed that the license plate was Anderson’s.
Officer Gassett instructed Officer Johnson to conduct a traffic stop on Anderson’s pickup. Officer Gassett testified at trial that although Anderson had not violated any traffic laws to initiate a traffic stop, the officers conducted such a stop nonetheless. Officer Johnson activated his red top lights and signalled to Anderson to pull to the side of the road. Anderson stopped his pickup.
Officer Johnson shined his spotlight on the pickup. Neither of the officers approached the stopped vehicle to ask the driver or passenger for a driver’s license, proof of identification, or proof of insurance, despite not knowing Anderson or the passenger. The officers yelled to the men to get out of the pickup. Officer Gassett called the passenger Michael Hathaway. Michael Romine stepped out of the passenger’s side of the pickup and walked into the ditch beside the highway. Officer Gassett pulled his gun and yelled at Romine to “get his hands up,” and to come over to his patrol car. Romine complied and proceeded toward the officer as instructed.
When Romine reached the patrol car, Officer Gassett directed him to lay spread eagle against the car with his hands on the hood. The officer conducted a pat-down search on Romine (which the officer later testified was for the purpose of looking for weapons that could harm the officers). During the pat-down, the officer felt and removed a small, hard object in Romine’s right shirt pocket. The object was approximately three inches long and three-quarters inch in diameter. It was a single hit marijuana pipe. Officer Gassett also removed Romine’s wallet from his pocket, told Romine he was under arrest, handcuffed him, and placed him in the back seat of the patrol car.
Officer Johnson conducted a pat-down search on Anderson, but did not arrest him. The officers detained Anderson in the area of the patrol cars. Officer Bernall arrived a short time later.
Subsequent to the stop, the removal of both Anderson and Romine from the pickup, and the initial body pat-down searches, Officers Bernall and Gassett conducted a search of Anderson’s pickup. On the floorboards of the pickup on the driver’s side, Officer Bernall discovered a brown paper grocery bag. The top of the bag was rolled shut. Officer Bernall opened the bag and observed what he believed to be marijuana. The officers arrested Anderson for possession of dangerous drugs.
Officer Bernall drove the pickup to Libby and impounded the vehicle. The officers then obtained a search warrant for the pickup. At approximately 3:40 a.m., on October 9,1991, the officers searched the pickup and found 11 pounds of marijuana behind the pickup seat.
On October 9, 1991, the State formally charged Anderson by complaint with the offense of Criminal Possession of Dangerous Drugs with Intent to Sell in violation of § 45-9-103, MCA. At a scheduled suppression hearing, Anderson made a motion to suppress physical evidence obtained in the search of his pickup, based on the alleged illegality of the search. The District Court denied Anderson’s motion. Anderson then entered an Alford plea, preserving his right to appeal the refusal to suppress the evidence seized from the vehicle. The District Court accepted Anderson’s plea and sentenced him to 13 years in prison. Anderson appeals the court’s denial of his motion to suppress the evidence obtained in the search.
The issue on appeal is whether the Lincoln County Sheriff’s Department had a particularized suspicion to justify an investigative stop of the defendant’s vehicle.
Anderson contends the State’s evidence was obtained from an illegal search of his pickup, and therefore, the District Court erred when it denied his motion to suppress. We agree with Anderson that the warrantless search of his pickup and subsequent seizure of the contraband were unlawful. We conclude that the Lincoln County Sheriff’s officers conducted an unjustified investigatory stop of Anderson’s pickup and that, therefore, the search of that vehicle was illegal.
In 1968, the United States Supreme Court recognized that a police officer may stop an individual to investigate possible criminal behavior even though there is no probable cause to make an arrest. Terry v. Ohio (1968), 392 U.S. 1, 22, 88 S.Ct. 1868, 1880, 20 L.Ed.2d 889, 906-07. The Supreme Court also recognized, however, that the Fourth Amendment applies to seizures of the person, Terry, 392 U.S. at 9, 88 S.Ct. at 1873, and investigatory stops such as the stop of Anderson’s pickup. United States v. Cortez (1981), 449 U.S. 411, 417, 101 S.Ct. 690, 694-95, 66 L.Ed.2d 621, 628. In Terry, the Supreme Court held that an unparticularized suspicion or “hunch” is not sufficient cause to stop and frisk a person, and that an investigatory stop and frisk will be justified only when it is based on specific, articulable facts from which the officer could reasonably infer that the individual is engaged in criminal activity and is armed and dangerous. Terry, 392 U.S. 1, 88 S.Ct. 1868.
In Cortez, a post-Terry decision regarding investigative stops, the United States Supreme Court recognized that terms like “articulable reasons” and “founded suspicions,” referred to by courts in cases such as Terry, are not self-defining, and that further guidance was necessary to know when an officer has sufficient cause to make an investigatory stop. Cortez, 449 U.S. at 417, 101 S.Ct. at 694-95.
In Cortez, the Supreme Court held that to justify an investigative stop of a vehicle, detaining officers must have a particularized suspicion comprised of (1) objective data and circumstantial evidence from which an experienced officer can make inferences, and (2) a resulting suspicion that the occupant of a certain vehicle is or has been engaged in wrongdoing. Cortez, 449 U.S. at 418, 101 S.Ct. at 695.
In State v. Gopher (1981), 193 Mont. 189, 631 P.2d 293, we adopted the Cortez standard required to justify a valid investigatory stop of an individual or vehicle. We held that probable cause was no longer necessary in Montana to make a limited and reasonable investigatory stop of an individual or vehicle; and that the lower particularized suspicion standard, as set forth in Cortez, was sufficient justification for a permissible stop.
In 1991, the Montana Legislature amended the investigative stop statute to reflect the particularized suspicion standard set forth in Gopher. Section 46-5-401, MCA, provides:
Investigative Stop. In order to obtain or verify an account of the person’s presence or conduct or to determine whether to arrest the person, 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.
Both Cortez and Gopher are clear that objective data must form the basis of the officer’s particularized suspicion before a stop is valid. 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.” Cortez, 449 U.S. at 418, 101 S.Ct. at 695. From objective data, a trained officer draws inferences and makes deductions that lead the officer to a resulting suspicion that the individual is involved in criminal activity. Gopher, 193 Mont. at 192, 631 P.2d at 295 (citing Cortez, 449 U.S. at 418, 101 S.Ct. at 695). Based on the evidence before this Court, we hold that the Lincoln County Sheriff’s Office did not have objective data, as required by Cortez and Gopher, upon which to form a resulting suspicion that Anderson was involved in a crime.
The State asserts, on appeal, that the informant’s tip served as a sufficient basis to justify the stop of Anderson’s vehicle. The State relies on the precedent set forth in Adams v. Williams (1972), 407 U.S. 143, 92 S.Ct. 1921, 32 L.Ed.2d 612, and State v. Sharp (1985), 217 Mont. 40, 702 P.2d 959 — two cases in which an informant’s tip served as the initial basis for an investigative stop. We conclude that the facts of both Adams and Sharp are distinguishable from the facts in the present case and that the informant’s tip in the present case did not give rise to a particularized suspicion of criminal activity.
In Adams, the police officer was acting on a tip supplied moments earlier by an informant, and the United States Supreme Court held that the informant’s tip had sufficient indicia of reliability to justify the officer’s stop. Adams, 407 U.S. at 147, 92 S.Ct. at 1924. By contrast, the officer in the present case relied on an informant’s tip which included no factual basis to indicate its reliability. The State concedes that it had no information regarding the basis of the informant’s knowledge.
In Sharp, a citizen informer had just called the police to report a possible DUI offense and the informant provided the police with information to find the vehicle. The police officer corroborated the informant’s tip with his own observations at the scene. He noticed the defendant’s vehicle stopped halfway in the road, saw attendant skid marks near the car, and observed the vehicle pulling away from him when he arrived. We held that based on the informant’s tip and the officer’s observations at the scene which corroborated the tip, the officer had a particularized suspicion sufficient to stop the vehicle to investigate a possible crime. Sharp, 217 Mont. at 45-46, 702 P.2d at 962.
In contrast to Sharp, none of the observations made in this case prior to the stop of Anderson’s vehicle suggested illegal activity. The only investigation made by the officers prior to the stop involved observation of Anderson as he lawfully drove across the Idaho border into Montana. In State v. Valley (1992), 252 Mont. 489, 494, 830 P.2d 1255, 1258, we held a simple drive-by of a house was not probative of the probability of illegal activity within the house. Similarly, a simple observation of a motor vehicle lawfully crossing a state line was not probative of the probability that Anderson was transporting drugs in his vehicle.
Instead of conducting independent investigation to corroborate the tip, the officers relied on the tip to stop the pickup and gather information to justify the stop in the first place. Officer Bernall testified that the very purpose of stopping and searching Anderson’s pickup was to investigate whether Anderson was transporting drugs and to confirm that the tip was reliable so that a search warrant could be obtained. To condone a search of the defendant under these circumstances would render the right to be free from unreasonable searches and seizures meaningless.
A tip that has not been shown to be reliable or trustworthy for purposes of establishing probable cause to procure a search warrant is also unreliable for purposes of providing an officer with a particularized suspicion. An uncorroborated, unreliable tip is not objective data as contemplated by Cortez and Gopher.
We conclude that when the officers in this case stopped Anderson’s pickup to investigate and confirm the reliability of their informant’s tip, the officers did not have objective data and did not meet the particularized suspicion standard required by Gopher. Therefore, the stop was illegal.
The Fourth Amendment protection against unreasonable searches and seizures applies to the seizures of the person, including brief investigatory stops such as the stop of a vehicle. Cortez, 449 U.S. at 417, 101 S.Ct. at 694-95. When the Lincoln County Sheriff’s officers stopped Anderson in his pickup, they violated Anderson’s right to be free from unreasonable searches and seizures as guaranteed by the Fourth Amendment of the United States Constitution and Article II, Section 11, of the Montana Constitution.
We hold that because the initial stop was unlawful, all of the evidence obtained by the officers in this case is inadmissible at trial. Mapp v. Ohio (1961), 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081.
We reverse and remand this case to the District Court and direct the lower court to suppress and exclude from evidence all items seized as a result of the unlawful stop and search of Anderson’s pickup.
JUSTICES HARRISON, GRAY, HUNT and McDONOUGH concur. | [
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JUSTICE TRIEWEILER
delivered the Opinion of the Court.
Lindsey Scoffield appeals from a supplemental decree of dissolution entered in the Fifth Judicial District Court, State of Montana, on March 20,1992. Lindsey contends that the District Court abused its discretion when it ordered him to assume all marital debts, including debts incurred by his spouse on behalf of her children from a prior marriage. Additionally, Lindsey asserts that the court erred when it denied his request to modify the allocation of proceeds from the sale of the parties’ cattle. We affirm.
The issues on appeal are:
1. Did the District Court abuse its discretion when it required appellant to assume all marital debts, including debts incurred by respondent on behalf of her children from a prior marriage?
2. Did the District Court err when it denied appellant’s request to modify the allocation of proceeds from the sale of the parties’ cattle?
Anna Ruth Scoffield, age 32, and Lindsey Dennis Scoffield, age 31, were married in Abilene, Texas, on March 2, 1985. There were no children born of this marriage, although Anna has two children from a previous marriage.
On March 13, 1991, Anna filed a petition to have the parties’ marriage dissolved. A dissolution proceeding was held on May 16, 1991. At the proceeding, Lindsey expressly agreed to assume all marital debts in exchange for the court’s denial of maintenance and attorney fees to Anna.
On July 1, 1991, the District Court entered its Findings of Fact, Conclusions of Law, and Decree of Dissolution. The court ordered the parties to equally divide their marital property. Additionally, the court ordered Lindsey to assume and pay all existing marital debts, and denied Anna’s request for maintenance and attorney fees. Finally, the court directed the parties to sell the cattle they owned and to divide the proceeds equally.
In August 1991, the parties entered into an arrangement concerning the cattle that differed from the July 1, 1991, dissolution decree. Rather than sell the cattle and divide the proceeds equally, as required by the decree, the parties agreed that Lindsey would pay Anna $4600 for her interest in the cattle. Lindsey paid Anna $3000 in cash, and delivered a $1600 promissory note, due on April 1, 1992. On January 10, 1992, Lindsey sold the cattle to a third party; however, he did not recover the amount per head that he anticipated.
During the year following the July 1,1991, decree, Lindsey refused to pay the majority of the parties’ existing marital debts. Anna responded by moving that the District Court find Lindsey in contempt. On March 6, 1992, the court held a hearing on the contempt motion. During the hearing, Lindsey made two arguments to the District Court concerning the marital property division.
First, Lindsey acknowledged that he agreed to assume the marital debts; however, he asserted that he should not have to pay the debts incurred by Anna on behalf of her children from her previous marriage because they were not marital debts.
Second, Lindsey requested the court to modify the allocation of the cattle proceeds in light of the actual sale price of the cattle. He reminded the court that the dissolution decree required an equal division of cattle proceeds; and he explained to the court that as a result of a contract concerning the cattle that he made with Anna subsequent to the decree, he received less than 50 percent of the cattle proceeds.
On March 20, 1992, the District Court amended and supplemented the July 1, 1991, dissolution decree. In the supplemental decree, the court entered a judgment against Lindsey for $1019.16, which represented the amount of marital debts. The court specifically listed the accounts Lindsey was obligated to assume and limited those accounts to debts incurred as of May 16,1991, the date of the parties’ dissolution proceeding. These accounts included debts incurred by Anna on behalf of her children from a prior marriage. The court stayed the execution of the judgment upon the condition that Lindsey pay to Anna monthly installments until the judgment of $1019.16 is paid in full.
In the March 20, 1992, order, the court also denied Lindsey’s request to modify the allocation of proceeds from the sale of the cattle. The court concluded that the parties were bound by their own agreement regarding the value of the cattle. Lindsey appeals from the March 20,1992, order.
On appeal, Lindsey contends that (1) the court abused its discretion when it required Lindsey to assume responsibility for debts incurred by Arma on behalf of her children from a prior marriage; and (2) the court erred when it refused to modify the allocation of proceeds, in light of the actual sales price of the cattle.
I
Did the District Court abuse its discretion when it required appellant to assume all marital debts, including debts incurred by respondent on behalf of her children from a prior marriage?
Lindsey acknowledges on appeal that he expressly agreed to assume all marital debts; however, he contends that the District Court abused its discretion when it required him to assume the debts incurred by Anna on behalf of her children from a prior marriage. Lindsey asserts that debts incurred on behalf of a spouse’s children from a previous marriage are not marital debts.
Because Lindsey expressly agreed to assume “all of the marital debts” in exchange for the court’s denial of maintenance and attorney fees to Anna, our analysis need not focus on whether Lindsey is statutorily and/or legally obligated to assume the debts incurred by his spouse on behalf of her children from a prior marriage. Nor is it necessary to ascertain for whose benefit those debts were incurred. For purposes of this appeal, we limit our analysis to whether the debts at issue are “marital debts.” If they are, then Lindsey is obligated by his own agreement to pay for them.
The Montana Marriage and Divorce Act, §§ 40-1-101 to 40-4-225, MCA, neither defines nor refers to the term “marital debt.” Moreover, few Montana cases, if any, specifically define “marital debt.” Yet a definition of “marital debt” is essential in a dissolution proceeding because in order for trial courts to “equitably apportion between the parties the property and assets,” as courts are statutorily required to do by § 40-4-202, MCA, courts must first ascertain the parties’ assets and liabilities prior to apportionment. In re Marriage of Dirnberger (1989), 237 Mont 398, 401, 773 P.2d 330, 332. Courts must know the definitional parameters of the term “marital debt” so that courts can make fair marital property divisions. Only by knowing what to include as “marital debt,” before balancing a parties’ assets and liabilities, can a court make a fair marital property apportionment.
Montana is not alone in its lack of a definition for “marital debt.” Other states have acknowledged that the term “marital debt” is not defined in their state code or in court opinions, although the word appears regularly in dissolution documents. The Missouri Court of Appeals explains in the case In re Marriage of Welch (Mo. App. 1990), 795 S.W.2d 640, 642:
In the debt oriented society now prevailing, the term “marital debts” is found in nearly every dissolution case filed. The term is found in the pleadings, separation agreements, court orders and judgments, and in the appellate court decisions. Yet, the term “marital debt” never appears in the “Dissolution of Marriage Act,” § 452.300, et seq., and certainly is never defined.
Although the Missouri Revised Statutes do not define the term “marital debt,” they do define its converse, “marital property.” In Welch, the Missouri Court of Appeals relied on the statutory definition of “marital property” as a helpful starting point for defining “marital debt.” According to the Court of Appeals, “ ‘[mjarital property1 is ‘all property acquired by either spouse subsequent to the marriage ....’” Welch, 795 S.W.2d at 643 (interpreting Missouri Revised Statutes, § 452.330.2). The Court of Appeals held that “it follows, therefore, that ‘marital debt’ is ordinarily ‘debt incurred subsequent to the marriage.’ ” Welch, 795 S.W.2d at 643.
Although Montana’s statutory definition of marital property is broader than Missouri’s, it also includes property acquired by either party during the marriage. See § 40-4-202, MCA. Since the definition for marital property in Montana includes all property acquired by either party during the marriage, it follows, therefore, that “marital debt” may be defined as all debt incurred by either party during the marriage.
The disputed debts in this case were medical debts incurred on behalf of Anna’s children. They were incurred while Lindsey and Anna were married. Specifically, they were incurred during 1990 and in the spring of 1991, which was subsequent to the date of Anna and Lindseys marriage on March 2,1985, and prior to May 16,1991, the date of the parties’ marriage dissolution. Pursuant to our definition that marital debt is all debt incurred by either party during the marriage, we conclude that the medical debts incurred by Anna on behalf of her children during the course of the parties’ marriage are marital debts.
Because Lindsey expressly agreed to assume all marital debts, and the court accepted Lindseys promise in exchange for the denial of maintenance and attorney fees to Anna, Lindsey is obligated to pay for all marital debts, including the debts incurred by Anna on behalf of her children from a prior marriage.
When reviewing a division of marital property case, the standard of review employed by this Court is whether the lower court abused its discretion when it fashioned the marital property distribution. In re Marriage of Danelson (1992), 253 Mont. 310, 317, 833 P.2d 215, 220. The lower court is obligated to seek a fair marital property division using reasonable judgment and common sense. Danelson, 833 P.2d at 220. When a District Court judgment is based upon substantial credible evidence, this Court will not alter that judgment unless there is a clear abuse of discretion. Dirnberger (1989), 773 P.2d at 332.
We conclude that the lower court exercised reasonable judgment when it balanced the economic consequences of Lindseys assumption of all marital debts against the economic burden of maintenance and attorney fees. Therefore, we conclude that the court did not abuse its discretion when it ordered Lindsey to assume all marital debts.
II
Did the District Court err when it denied appellant’s request to modify the allocation of proceeds from the sale of the parties’ cattle?
Lindsey asserts that as a result of the actual sales price of the cattle, he received less than 50 percent of the cattle proceeds; and that this result was in contravention of the court’s order to equally divide the proceeds. On appeal, Lindsey contends that the District Court erred when it denied his request to modify the allocation of cattle proceeds. Contrary to Lindsey’s assertion, we find no abuse of court discretion.
Lindsey relies on In re Marriage of Berthiaume (1977), 173 Mont. 421, 567 P.2d 1388. In Berthiaume, we held that a trial court abuses its discretion when it makes a finding that property should be divided equally and then subsequently makes a disparate award. However, unlike the situation in Berthiaume, where the court acted in contravention of its findings, the District Court in the present case did not act contrary to its finding that the parties should divide the cattle proceeds equally. The court ordered the parties to sell the cattle and equally divide the proceeds. It was Lindsey and Anna who devised their own means for accomplishing their obligation to sell and equally divide the cattle proceeds.
Parties are free to contract with one another, and Lindsey and Anna entered into a valid contract regarding the cattle. When Lindsey requested the lower court to modify the allocation of cattle proceeds in light of the actual sales price of the cattle, he was, in effect, asking the court to invalidate the parties’ contract. This Court has held that a party to an agreement which has been performed for some length of time is estopped to deny its validity. In re Marriage of Jensen (1986), 223 Mont. 434, 727 P.2d 512. Therefore, we conclude that the lower court did not err when it bound the parties to their own agreement and refused to modify the allocation of proceeds.
Lindsey and Arma satisfied their obligation under the decree to sell the cattle and equally divide the proceeds when they agreed to have Lindsey buy out Anna’s interest before selling the cattle to a third party. The fact that Lindsey paid Anna for more than 50 percent of the actual value of the cattle was a result of his own agreement with his wife, not the court’s decree. Therefore, we conclude that the District Court did not abuse its discretion when it refused to amend the allocation of cattle proceeds. We affirm the District Court decision.
CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, HUNT and GRAY concur. | [
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CHIEF JUSTICE TURNAGE
delivered the Opinion of the Court.
The State of Montana (State) appeals an order entered by the District Court for the Tenth Judicial District, Fergus County, dismissing four misdemeanor charges filed against Jack Strong (Strong) for lack of speedy trial. We reverse and remand.
We consider the following issue:
Did the District Court err in dismissing the misdemeanor charges against Strong because it concluded that § 46-13-401, MCA, had been violated?
Strong was charged by complaint on November 11,1990, and again on December 13, 1990, with two counts of misdemeanor assault, misdemeanor disorderly conduct, and violating the privacy in communications statute, a misdemeanor. After pleading not guilty, Strong’s first trial resulted in a mistrial on March 26,1991. After the mistrial, the State filed a consolidated complaint on April 9, 1991, charging Strong with the same offenses.
Strong pled not guilty to the charges on May 1,1991, and trial was scheduled for June 20, 1991. Prior to commencement of the second trial, Strong moved to continue the trial in order to file a motion to dismiss for lack of speedy trial. On November 22, 1991, the Justice Court dismissed the charges against Strong.
On December 2,1991, the State appealed the order of dismissal to the District Court. After trial had been scheduled, and continued at the request of Strong, and in one instance, upon the District Court’s own motion, Strong moved to dismiss the charges for lack of a speedy trial. On September 21, 1992, the District Court dismissed the charges.
The District Court found the time elapsing between November 13, 1990 (the date Strong entered his plea to the initial complaint), and June 20, 1991 (the date trial was scheduled following the mistrial), was 197 days. The District Court concluded a delay of this length was violative of Strong’s right to a speedy trial as set forth in § 46-13-401(2), MCA. From that order of dismissal, the State appeals.
Did the District Court err in dismissing the misdemeanor charges against Strong because it concluded that § 46-13-401, MCA, had been violated?
When reviewing a District Court’s conclusions of law, our standard of review is whether the District Court’s interpretation of the law is correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603. In this case, the District Court dismissed this action on the sole basis that Strong was not brought to trial within six months of the date of the entry of his first plea. We hold this interpretation of the law is incorrect.
Section 46-13-401(2), MCA, provides:
After the entry of a plea upon a misdemeanor charge, the court, unless good cause to the contrary is shown, shall order the prosecution to be dismissed with prejudice, if a defendant whose trial has not been postponed upon the defendant’s motion is not brought to trial within 6 months.
Apparently, the District Court interpreted the statute on its face without considering the fact that a mistrial had been declared in the first trial. In its appeal to this Court, the State argues that once a mistrial is declared, the speedy trial clock is reset and begins to run anew from the date of mistrial. The State is correct.
In State v. Sanders (1973), 163 Mont. 209, 516 P.2d 372, we adopted, in part, the position of the American Bar Association in its Project on Minimum Standards for Criminal Justice. For purposes of a speedy trial analysis, Section 2.2 of that report addresses when time begins to run following a mistrial.
The time for trial should commence running...
(c) if the defendant is to be tried again following a mistrial,..., from the date of the mistrial, ....
Sanders, 516 P.2d at 375. Therefore, when a mistrial is declared, the speedy trial clock is reset and begins to run from the date the mistrial was declared.
In this case, a mistrial was declared on March 26, 1991. None of the time elapsing prior to this date should have been considered by the District Court. After the State refiled the charges and Strong entered a plea to those charges, a second trial was scheduled for June 20, 1991. The time elapsing between March 26, 1991 and June 20, 1991, was a little less than three months. This time frame is clearly within the six month requirement of § 46-13-401(2), MCA.
We hold the District Court erred by including the period of time prior to the mistrial in its calculation of total elapsed time. The order of dismissal is reversed.
JUSTICES GRAY, TRIEWEILER, HUNT, HARRISON, McDONOUGH and WEBER concur. | [
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JUSTICE HUNT
delivered the Opinion of the Court.
Appellant Lee McDonald appeals from an order of the Fourth Judicial District Court, Missoula County, granting summary judgment and finding a certain warranty deed from respondent Irene H. Jones (now Irene Peterson but referred to as Jones) to Ownership of America void, and a certain tax deed issued to McDonald by Missoula County void. McDonald also appeals a subsequent order denying his motion to reconsider.
We affirm.
McDonald raises three issues on appeal. We find the following issue to be dispositive:
Did the District Court err in finding that the grantor did not comply with the Montana Subdivision and Platting Act, thereby invalidating the warranty deed?
Irene H. Jones owned 12.63 acres of land in the Seeley Swan valley. The land contained various improvements, including a house built by Jones. Ownership of America approached Jones and requested that she convey two undeveloped acres from the 12 acre tract for a promotional scheme in exchange for some of Ownership’s stock. There was no agreement specifying which two acres were to be conveyed. A friend of Jones, Vernon H. Peterson, prepared a warranty deed conveying title. On April 13, 1981, Jones executed a warranty deed to Ownership. The deed contained the following land description:
That portion of Lot numbered Seven (7) of Section Six (6) in Township Twenty (20) North of Range Sixteen (16) West of Montana Principal Meridian, Montana, lying West of Federal Aid Secondary 209 right-of-way and containing two acres more or less and further accurately described by plat on file with the party of the first part and party of the second part. Party of the first part herein reserves all minerals under the above description.
Jones and Ownership agree that the deed intended to convey two undeveloped acres out of the larger 12.63 acres owned by Jones. However, the deed did not specify which two undeveloped acres were to be conveyed. No plat was ever filed with the Missoula County Clerk and Recorder. The Missoula County Clerk and Recorder’s office, following internal office procedures, erroneously treated the conveyance as a transfer of 12.63 acres, and not as two acres, as intended by Jones and Ownership. The Missoula County Treasurer changed the tax records upon recordation of the deed and sent all further tax notices for the entire 12.63 acre parcel to Ownership, who failed to pay any of the real property taxes. On July 20,1983, Missoula County took a tax sale certificate on the entire 12.63 acre parcel due to nonpayment of taxes. Jones never received any notice regarding the pending tax sale.
On August 13, 1985, prior to taking a tax deed to the 12.63 acres, Missoula County assigned its interest in the tax certificate to Lee McDonald for $738.92, which represented unpaid taxes, interest, and penalties. On April 28,1986, and on May 5,1986, McDonald published a notice of application for tax deed in the local newspaper. The notice contained the following legal description: “All of Gov’t Lot 7 lying West of Federal Aid Secondary #209 R/W in SW4 (Plat E) of 6-20N-16W, M.P.M.” On July 11, 1986, McDonald filed an affidavit stating that the property was unoccupied at the time of his application for tax deed on the property but acknowledged that the property may be occupied occasionally during the summer.
On August 27, 1986, the Missoula County Treasurer executed a tax deed to McDonald as grantee, which contained the following legal description:
Book 163 Page 228 SUID #1078409
Pt of Lot T W of R/W in SWV4 Plat E Section 6 Township 20 Range 16 12.63 Acres
That portion of lot numbered Seven (7) of Section Six (6) in Township Twenty (20) North of Range Sixteen (16) West of Montana Principal Meridian, Montana, lying West of Federal Aid Secondary 209 Right-of-Way and containing two acres more or less and further accurately described by Plat on file with the party of the first part and party of the second part. Party of the first part herein reserves all minerals under the above description. McDonald then published a Notice of Claim of Tax Title in the
Missoula newspaper on August 25,1986, and again on September 1, 1986. The legal description used in the publication is identical to the legal description used in the original notice of application for tax deed.
McDonald never visually inspected the premises to determine if the property was unoccupied before acquiring the tax deed; he did not attempt to notify personally any persons who may have been occupying the property during the summer of 1986; he did not attempt to contact anyone other than a local handyman to determine who was in possession of the property and who was allowing guests to enter the property.
Ownership contacted McDonald and agreed to give him a quit claim deed to the property. The quit claim deed was prepared by McDonald and contained a different legal description than that used in the warranty deed from Jones to Ownership. The deed deleted all reference to the two acre limitation contained in the warranty deed. In addition, the word “all” was inserted at the beginning of the legal description. McDonald had actual knowledge of the two acre limitation contained in the Jones-to-Ownership warranty deed, but he chose to ignore the limitation. McDonald did not pay any consideration to Ownership for the quit claim deed. McDonald then conveyed a separate piece of property to Ownership for $2000.
In a series of deeds that were executed after the deed to Ownership, Jones, now married to Vernon Peterson, conveyed her entire interest in the 12.63 acre parcel to Irene H. Peterson Limited Partnership, a North Dakota limited partnership. Jones has paid all of the real estate taxes on the entire 12.63 acre parcel from 1986 through 1990 and has been in possession of the property at all times throughout the litigation.
On September 13, 1988, McDonald filed a quiet title action in District Court. On January 22, 1992, Jones filed her motion for summary judgment. On April 27, 1992, the District Court issued its findings of fact, conclusions of law, and order granting Jones’motion for summary judgment. On May 14, 1992, McDonald filed a motion for reconsideration, which was denied by the District Court on June 15,1992. McDonald appeals both orders to this Court.
Did the District Court err in finding that the grantor did not comply with the Montana Subdivision and Platting Act, thereby invalidating the warranty deed?
The granting of summary judgment is proper only if it is shown that there is no genuine issue of any material fact and that the moving party is entitled to summary judgment as a matter of law. Rule 56(c), M.R.Civ.P. Summary judgment may be granted where the party opposing the motion fails to prove the existence of any genuine issue of material fact. Bills v. Hannah, Inc. (1988), 230 Mont. 250, 253-54, 749 P.2d 1076, 1079.
Section 76-3-104, MCA (1979), states that a subdivision shall be comprised of parcels less than 20 acres which have been segregated from the original tract. Jones’ warranty deed to Ownership was an attempt to subdivide a parcel of land by segregating a two-acre parcel from the original 12.63 acre tract. The attempted subdivision violated the Montana Subdivision and Platting Act because the Act requires that a plat be filed of record before title to subdivided ground can be sold or transferred in any manner. Section 76-3-301(1), MCA (1979). In addition, the Act requires that the clerk and recorder reject any instrument that purports to transfer title to a parcel that is required to be surveyed. Section 76-3-302, MCA (1979).
The record shows that the parties intended to transfer only two acres of undeveloped land out of the 12.63 acres of land. No plat was recorded describing the two acres, even though the deed did make a reference to such a plat. The deed should have been rejected. Section 76-3-302, MCA.
When interpreting the validity of deeds, the general rule is that a deed will be liberally construed to give it effect, rather than to render it a nullity. Peterson v. Taylor (1987), 226 Mont. 400, 404, 735 P.2d 1120, 1123. A deed will be considered void for uncertainty if the identity of the property can not be ascertained by reference to extrinsic evidence. Peterson, 735 P.2d at 1123. We consider the property description contained in a deed adequate if it contains sufficient information to permit the identification of the property to the exclusion of all others. Peterson, 735 P.2d at 1123.
In this instance, the parties failed to come to a meeting of the minds regarding which two acres of land Jones was to convey to Ownership. No extrinsic evidence was available for the District Court to identify which two acres the parties contemplated to be conveyed. Therefore, we hold that the deed was void for uncertainty. Because the warranty deed was ineffective at conveying any portion of the 12.63 acres, the subsequent deed from Ownership to McDonald conveyed no interest in the property. Erickson v. First National Bank of Minneapolis (1985), 215 Mont. 350, 358, 697 P.2d 1332, 1337. We hold that the District Court was correct as a court sitting in equity in holding that the original conveyance between Jones and Ownership was void for failure to comply with the Montana Subdivision and Platting Act.
As a result of our holding, we need not address the additional issues raised by McDonald.
Because there is no genuine issue of material fact, we affirm the decision of the District Court in granting summary judgment as a matter of law in favor of Jones.
JUSTICES GRAY, TRIEWEILER, HARRISON and WEBER concur. | [
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] |
MR. JUSTICE SMITH
delivered the opinion of the court.
Plaintiff brought this action to recover compensatory and also punitive damages alleged to have been sustained by reason of a trespass upon property of which she was the tenant. It appears that the defendant' Reiehle owned the property, and desired her to vacate the same, and thus enable him to remove the house occupied by her and erect another structure in its place. On August 31, 1909, Reiehle sold the house to one Firpo, stipulating in the bill of sale, “said house.to be removed as soon as vacated by present tenants,” referring to the plaintiff. Defendant Palmer.was employed by Firpo to do tbe actual work of moving the house. Plaintiff’s rent had been paid up to and including September 7, 1909, and either on that date, or a day or two later, and while she was still occupying the premises under a sort of tacit arrangement or understanding with Reichle that she might remain there until she found another house, but that she should do so as soon as possible, Palmer began to raise the house, and thereby caused some of her furniture and household utensils to be broken and damaged. It further appears that Reichle was quite anxious to get possession of the property so as to enable him to proceed with his plans, and on August 20, for the purpose, perhaps, of frightening her so that she would move promptly, he served her with notice that after September 7 her rent would be greatly increased. After the service of this notice, Reichle and his agent, Came,- continually importuned her to vacate the house, sometimes requesting and again demanding that she do so, and frequently intimated to her that, if she did not vacate, they would “force her out,” and “have her on jack-screws and out on the street.” She testified: “They would be abusive to me. They would be insulting.” And,, although there is not any testimony to justify the conclusion that she was actually abused or insulted, the jurors might well have believed, if they credited her testimony, that every possible means was employed to frighten her into giving up possession. She also testified that they “bothered her so she would frequently break down and cry,” protesting that she was “doing her best to find another house,” but was encountering considerable difficulty in that regard by reason of the fact that she had no money. The foregoing narrative is, of course, founded on the testimony of the respondent herself, and is, we think a fair statement of the grievance of which she complains, omitting a detailed account of the alleged damages sustained. In addition to the evidence of which a summary has been given, W. H. Goodland, a deputy county assessor of Silver Bow county, produced from his office a so-called “Present Ownership Boob,” and testified therefrom that in the year 1911 (the trial was had on the eleventh day of April, 1911) Reicble was assessed for taxation purposes on property valued at $25,000, and a firm of which he was a member was assessed on $30,000 worth of property. This testimony was objected to as incompetent, and for the further reason “that present ownership books are not the best evidence of the property possessed by any person.” The court charged the jury that they were at liberty to assess punitive damages against both Reichle and Palmer, and in so doing might take into consideration “the financial condition of the defendants.” There was no evidence of Palmer’s pecuniary circumstances. The instruction just referred to was objected to by counsel for Reichle, on the sole ground that there was not any evidence to justify a finding that he was guilty of oppression or malice, or that his actions caused plaintiff to suffer any ‘ ‘ grief, shame, or fear. ’ ’ The jury, in order to extricate themselves from the • dilemma thus presented, returned two verdicts, one against Palmer for $200 damages, and another against Reichle for $700 damages. Judgment was entered upon the verdict against Reichle, and he appeals therefrom, and also from an order denying a new trial. In his notice of intention to move for a new trial he specifies “excessive damages” as one of the grounds to be relied on. We discover in the record prepared by appellant a specification of error that “the judgment is contrary to law,” but the contention is not again referred to.
1. It is contended (a) that there is not any evidence to support the conclusion that Reichle committed any of the acts charged in the complaint; and (b) that there is no evidence to justify a verdict for damages by way of punishment. We think the plaintiff established a prima facie case of trespass against the appellant. If the jury had believed his testimony, and that of his witnesses, they must have returned a different verdict, but they chose to find for the plaintiff. As to the second contention, we are frank to say that there is very little evidence of such oppression or malice as will warrant a verdict for exemplary damages under the provisions of section 6047 of the Revised Codes. But there was some evidence. Plaintiff testi- tied: “Mr. Reichle said he didn’t intend to stand any fooling; that he was going to sell the place, and wanted the house moved. He would come to the door and say: ‘Well, you better be moving.’ Mr. Came would say: ‘Mr. Reichle has sent me down to say he wants the place. He has got to have it’ — and Mr. Reichle would come the next day and repeat the same thing, that I would have to get out, that he didn’t want to be bothered about it, that he wanted to have the surveyors there so that he could get started at once. Mr. Reichle told me that Came was his agent. Mr. Came would say to me: ‘We want you to move. We want to know if you are going to get out, and, if you don’t get out, we will force you. We will have you up on the jack-screws, and have you out on the street.’ They pulled up the walks, and put the jack-screws under the corner of the house, and they had to fix planks for me to come and go out of the kitchen. I went out and asked if they could do that. They said, ‘Yes,’ they could. I said: ‘All my furniture is in there.’ They said that didn’t make any difference, that they were ordered to come and go ahead, and I would be moved in' a little while. I said to Mr. Palmer, ‘Aren’t you going to give me a chance to get out?’ and he said, ‘I was up to see them, and they told me to go right ahead with the work.’ Mr. Reichle came down there on the morning the house was on jack-screws, and Mr. Came also. Mr. Reichle was around there quite a little time that morning, part of the time on my lot. On the day the house was raised he offered me $5 to pay my rent some place else. He abused me that morning. I considered that — I didn’t think any gentleman would speak that way to a woman.” If the jury believed from this testimony that Mr. Reichle was cognizant of the fact that Palmer was about to move the house and consented thereto, and that their actions, as detailed by the plaintiff, evidence some degree of oppression, we cannot say as a matter of law that this conclusion was erroneous. The complaint contains three counts: (1) for “wanton, malicious, oppressive and unjustifiable acts of the defendants,” for which damages in the the sum of $2,000 are claimed; (2) for damage to furniture in the sum of $100; (3) for loss on fumi- ture disposed of at forced sale for $100 less than its real value. The two verdicts for $200 and $700, respectively, when read in connection with the complaint, clearly disclose the-fact that the jury assessed punitive damages in the sum of $500 against the appellant.
2. Did the court err in receiving evidence of the pecuniary circumstances of the appellant? Messrs. Grattan & Jennings in their article on Damages, 13 Cyc. 211, lay down the rule thus: “Evidence of the pecuniary condition .and financial circumstances of defendant is usually held to be relevant and admissible as bearing upon the amount of punitive or exemplary damages which may be awarded, * * '* but where there are several defendants sued jointly in trespass, inasmuch as the same amount of damages must be assessed against all, it is error to instruct the jury that they may take into consideration the pecuniary ability of each individual defendant to pay punitive or exemplary damages.” The rule thus laid down seems to be borne out by the following decisions: Toledo etc. Ry. Co. v. Smith, 57 Ill. 517; Chicago City Ry. Co. v. Henry, 62 Ill. 142; Smith v. Wunderlich, 70 Ill. 426. The rule disposes of the contention that evidence of financial worth is incompetent in actions of this nature; and the exception noted cannot avail the defendant, for the reason that he did not raise the point therein indicated in the court below, and has not attempted to do so here.
3. The contention that the contents of the so-called “present ownership book” were incompetent and not the best evidence is not argued in the briefs, and in the circumstances we do not feel called upon to make an investigation of the question.
4. Incidentally it is claimed that the verdict is excessive. We agree.
The cause is remanded to the district court, with directions to grant a new trial unless within thirty days after remittitur filed the respondent shall consent in writing that the judgment for damages be reduced to $250. If such consent is given, the judgment shall be modified accordingly as of the date of its original entry, and, together with the order denying a new trial, will stand affirmed. The judgment for costs in tlie court below is not to be disturbed. Respondent to recover costs on appeal.
Reversed, with directions.
Me. Chief Justice Beantlt and Me. Justice Holloway concur. | [
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MB. JUSTICE SMITH
delivered the opinion of the court.
This is an action for damages alleged to have been occasioned by the negligent misconduct of the defendant in suffering a defect to exist in one of its streets, whereby plaintiff was injured. The subject matter of the controversy was once before in this court. (See Pullen v. City of Butte, 38 Mont. 194, 21 L. R. A., n. s., 42, 99 Pac. 290.) After that case was remanded, it was retried, and a verdict rendered in favor of the defendant. Counsel for the latter failed for more than six months to demand that judgment be entered or to have judgment entered upon the verdict, whereupon counsel for the plaintiff procured the following judgment to be entered by the court: “This cause came on regularly for trial on the eighteenth day of March, 1909. A jury of twelve persons was regularly impaneled and sworn to try the said action. Witnesses on the part of plaintiff and defendant were sworn and examined. After hearing the evidence, the arguments of counsel, and instructions of the court, the jury retired to consider of their verdict, and subsequently returned into court, and, being called, answered to their names, and say, ‘We, the jury in this cause, find a verdict for the defendant and against the plaintiff,’ which verdict was returned and filed on the twentieth day of May, 1909. It appearing to the court herein that more than six months has elapsed since the rendition and filing of said verdict, and that the defendant has neglected to demand and have judgment entered for more than six months, and no judgment having been entered herein and more than six months having elapsed since the rendition and filing of said verdict, the said action was, on motion of counsel for the plaintiff, by the court herein dismissed on the thirteenth day of December, 1909. Wherefore, - by virtue of the law and by reason of the premises aforesaid, it is ordered, adjudged, and decreed that the said action be and the same is dismissed.” This action was subsequently begun by filing a complaint in which it is alleged inter alia that the negligence of the defendant consisted in allowing a certain sidewalk “to be in an unsafe, dangerous, and defective condition, which condition consisted of a dangerous uprise of about six inches, from an old plank sidewalk, to a new cement sidewalk, at which junction of the sidewalks at the said upraise the defendant had carelessly, negligently, and in a manner dangerous to pedestrians placed and fastened an old plank across the entire width of said plank sidewalk, which plank sidewalk was at this place warped, sagged, and uneven, and the said old plank extended up from the plank sidewalk and formed a part of the said upraise at the junction of the plank and cement sidewalk as aforesaid; that, by reason of the carelessness and negligence of the defendant as aforesaid, the plaintiff while walking along said public sidewalk was tripped and thrown violently to the sidewalk,” etc. Plaintiff had judgment for $5,000, and defendant appeals from tbe judgment and an order denying its motion for a new trial.
1. The first error of which complaint is made is predicated upon the action of the court in allowing the witness Saltry to answer the following question: “ I will ask you if you know whether or not the old sidewalk was ever, after September 1, 1907, raised up so .that it came level with the cement sidewalk?” The question was objected to as immaterial. The Court: “The objection is overruled. The court doesn’t admit it for the purpose of showing negligence, but for the purpose of showing the condition of affairs at the time, on September 1.” “A. "Why, a few days after some men came over and fixed it; that is, they raised it and made it even with the cement sidewalk, went back about three inches and gave it a little raise, a little pitch, to make it even. I don’t know how long after, some time, a few days after, I think.” It is a general rule that the negligence which renders a person responsible for an accident depends upon what he did and knew before the accident, and such negligence must be established by facts and circumstances which preceded it, and not by acts done after its occurrence. The only objection urged against the question was that it was immaterial. The court was of opinion that it tended to throw some light upon the physical conditions existing at the time of the accident and expressly limited the testimony to that point, stating distinctly that it was not admitted for the purpose of showing negligence. Under the circumstances, we find no reversible error in the ruling. (Dow v. Sunset T. & F. Co., 157 Cal. 182, 106 Pac. 587.) Great care should be exercised, however, in admitting this sort of testimony and in guarding against its effect, lest the jury get the notion that evidence of subsequent changes or repairs is evidence or confession of prior negligence.
2. The witness Griffith was asked whether McCormick, who was an employee of the streets department in Butte, visited the place after September 1. The question was objected to as immaterial, but, as the witness answered in effect that he did not know, the matter is not of any importance.
3. Over the objection of the defendant, the plaintiff was permitted to show that other persons had stumbled at the point where she was alleged to have received her injuries. There is a conflict of authority as to whether such testimony is admissible; but this court has, in effect, held that it is proper evidence, not only of the dangerous character of the place, but as bearing upon the question of constructive notice to the city. (See Leonard v. City of Butte, 25 Mont. 410, 65 Pac. 425; O’Flynn v. City of Butte, 36 Mont. 493, 93 Pac. 643.) Mr. Justice Field, speaking for the supreme court of the United States, in District of Columbia v. Armes, 107 U. S. 519, 27 L. Ed. 618, 2 Sup. Ct. Rep. 840, said: “The frequency of accidents at a particular place would seem to be good evidence of its dangerous character — at least, it is some evidence to that effect. Persons are not wont to seek such places, and do not willingly fall into them.”
4. Objection is made that some leading questions propounded by plaintiff’s counsel were allowed to be answered; but we find no abuse of the court’s discretion in this regard.
5. The witness Saltry was asked by counsel for the defendant in cross-examination: “I will ask you if in your testimony before you said one word about a ragged or jagged plank being down there?” An objection was sustained to the question, but we find on further examination of his testimony that he subsequently answered substantially the same interrogatory.
6. Over the objection of the defendant, plaintiff’s counsel introduced in evidence a certain ordinance 'of the city of Butte defining the duties of the stréet commissioner, city marshal, and all policemen. It is now claimed that, before such ordinance could be introduced, it must have been specially pleaded. The testimony was competent as bearing up on the question of constructive notice to the city (see O’Flynn v. City of Butte, supra); but the particular objection urged here was not made in the trial court.
7. It is claimed that the complaint does not state facts sufficient to constitute a cause of action, for the reason that “the admitted inequality of from four to six inches in the abut ting ends of the cement and plank walks does not constitute such a defect in itself dangerous as would subject the city to liability.” The following cases are cited in support of counsel’s position, viz.: Weisse v. City of Detroit, 105 Mich. 482, 63 N. W. 423; Yotter v. City of Detroit, 107 Mich. 4, 64 N. W. 743; Morgan v. City of Lewiston, 91 Me. 566, 40 Atl. 545; Raymond v. City of Lowell, 6 Cush. (Mass.) 524, 53 Am. Dec. 57. In these cases the courts held as a matter of law that the walks in question were “reasonably safe,” although in each ease the plaintiff was injured by falling over a rise in the walk. We have not followed this line of authorities in Montana. The case of Leonard v. City of Butte, supra, is, in principle, analogous to the one at bar. There the court held that whether there is in fact a defect in the walk is a question for the jury—citing City of Centralia v. Baker, 36 Ill. App. 46; Cromarty v. City of Boston, 127 Mass. 329, 34 Am. Rep. 381; Sullivan v. City of Oshkosh, 55 Wis. 508, 13 N. W. 468; McClosky v. Moies, 19 R. I. 297, 33 Atl. 225; Sams v. Inhabitants of Great Barrington, 169 Mass. 271, 47 N. E. 881; Todd v. City of Troy, 61 N. Y. 506. In the case of Metz v. City of Butte, 27 Mont. 506, 71 Pac. 761, this court, by Mr. Justice Holloway, said: “All the facts and circumstances being before them, it was a question for the jury to determine whether or not the step or offset in the sidewalk constituted such a defect as the city, in the exercise of ordinary care and prudence, should have remedied.”
8. During the course of the trial, plaintiff offered in evidence a certain notice of injury theretofore given to the city. It was objected to for the reason “that it does not advise the city council of the time when and the place where the accident occurred. ’ ’ The notice is not open to this objection; but it is now urged that there was not any evidence “to prove who signed the notice and no evidence that it was signed in behalf of Mrs. Pul-len.” The notice is signed, “Lewis A. Smith, Attorney for Mrs. Henrietta Pullen.” The statute provides that “the person so alleged to be injured, or some one in his behalf, shall give notice to the city.” (Rev. Codes, sec. 3289.) We think this notice is sufficient, as having been given in behalf of the plaintiff by her attorney. We take judicial notice that Mr. Smith is an attorney and officer of the court in good standing and the presumption attaches that his acts are regular and by authority, especially in the absence of an objection specifically calling attention to the point sought to be raised.
9. It is contended that there is a fatal variance between the allegations of the complaint and the plaintiff’s testimony touching the manner of the accident. To illustrate the point, we have heretofore quoted that portion of the complaint in which plaintiff alleged that “while walking along said sidewalk she was tripped and thrown violently down. ” It is now argued that her testimony shows that she was not tripped by the upraise, but that her foot was caught in a hole, and thereby held fast. We do not so construe her testimony. She said: “I came down the old plank walk to the cement walk. That’s where I fell, when I came to that. The cement walk was higher. Walking fast, I ran my foot under that board. I couldn’t see whether the board was lying on the ground. It had. my foot fast and throwed me right on my right side. My foot caught under the plank. ” We think this testimony substantiates the allegation that she was tripped. It does not show, as counsel suggest, that she stepped into a hole. If she had done so, that, perhaps, would disclose a different ground of negligence from the one pleaded. We think it may fairly be said that she was tripped and thrown to the ground by reason of getting her foot caught under the plank alleged in the complaint to have been negligently placed at the junction of the two sidewalks. The old plank or board under which she caught her foot and by which she was tripped, formed a part of the upraise.
10. Another contention of the appellant is that the first action commenced by the plaintiff was decided against her on the merits, and therefore she cannot prosecute this cause, for the reason that the matter is res adjudicata between the parties. The statute by virtue of which the first action was dismissed provides that “an action may be dismissed; * * * by the court, wben after verdict * * * the party entitled to judgment neglects to demand and have the same entered for more than six months.” (Rev. Codes, sec. 6714.) Because this statute applies to both plaintiffs and defendants, its entire purpose is not plain. It is not difficult to see why an action should be dismissed when the plaintiff neglects for more than six months to have judgment entered on a verdict in his favor. The reason is that it is the policy of the law to put a speedy end to litigation, and, under such circumstances, a plaintiff may fairly be deemed to have abandoned the fruits of his victory. But why should an action be dismissed on account of the fact that a defendant neglects to enter judgment on a verdict 1 The only legitimate reason which occurs to us is that the legislature intended to punish the defendant for sleeping on his rights by making it possible for the plaintiff to begin a new action. In either case the action of the court is in the nature of a penalty. Judgment of dismissal so entered is in no sense a judgment upon the merits. The judgment pleaded in the answer shows on its face that it is not a judgment on the verdict, as such, and the fact that the plaintiff caused the same to be entered, as she had a right to do under the statute, is no evidence that she intended thereby to voluntarily abandon her claim against the city. On the contrary, her course in that regard manifests an intention to take advantage of her statutory right to begin a new action. The court could not enlarge her rights by inserting in the judgment a notation that the cause was dismissed without prejudice. (See Glass v. Basin & Bay State Min. Co., 34 Mont. 88, 85 Pac. 746.)
11. We think the verdict is excessive. Plaintiff is now sixty-three years of age. As a result of her fall, her arm was broken, and she was considerably hurt and bruised. For eight or ten months she was unable to use her hand. During this time she suffered pain, and still suffers occasionally. When her "arm gets tired, she is unable to use it. It gets numb, and she is obliged to bathe it with hot water. Dr. Moore testified: “The injury is permanent. She will never entirely regain the use of her arm. In old people an injury of that kind would be likely to cause pain and suffering for a period of four or five years, and it is very likely that pain would continue as the result of such an injury as this to a person of Mrs. Pullen’s age. The suffering might be the result of both rheumatism and the broken bones. The result of the setting of the bones was very satisfactory. The bones knit slowly but véry satisfactorily — perfect union. There is an atrophy of the muscles. While the bones knit perfectly, the muscles have not returned to their former condition,- otherwise the hand is in perfect condition. It is very common in elderly people to suffer from rheumatism in broken bone joints.”
The cause is remanded to the district court of Silver Bow county, with directions to grant a new trial unless within thirty days after the remittitur is filed with the clerk of that court the respondent shall file her written consent that the judgment for damages may be reduced to $3,000. If such consent is given, the judgment shall be modified accordingly as of the date of its original entry, and, together with the order denying a new trial, will stand affirmed. That part of the judgment relating to costs in the court below is not to be disturbed. Despondent to recover costs on appeal.
MR. Chief Justice Brantly and Mr. Justice Holloway concur. | [
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
Certiorari to the district court of Custer county. Samuel Gilmore died intestate in Custer county on August 18, 1904. His entire estate, as appraised, was of the value of $43,664.72. Of this $20,302.22 consisted of personal property. After the payment of the debts of the decedent and expenses of administration there remained personalty consisting of cash and property of the clear value of $10,772.27, distributable among the four surviving brothers and sisters of the decedent. On May 29, 1911, the estate being ready for distribution, upon application by the administrator for an order fixing the amount of the inheritance tax, if any, to- be paid by him, the district court held that the real estate was not subject to any tax, but that the personal property was subject to a fax at the rate of $1 per hundred, and ordered the administrator to pay to the treasurer of Custer county $107.72, the amount so found to be due upon the balance to be distributed, with interest thereon from the date of the death of the decedent until the date of payment. The-administrator being advised that since the law imposes the tax upon the distributive shares, and not upon the gross amount of the personal estate, and since each of the shares is less in amount than $7,500, the tax was improperly imposed, and instituted this proceeding to have the order annulled.
There is thus presented the single question whether the payment exacted by the statute is to be computed upon the clear value of the estate to be distributed, or upon the distributive shares or legacies, as the case may be. In other words, the question is, whether the exemption of $7/500 is to be construed as referring to the distributive shares instead of the clear value of the estate. If the contention of counsel for relator is maintainable, the tax in question was improperly imposed, and the order must be set aside. To determine this question, it becomes necessary to examine the portion of the statute making the imposition and to ascertain the purpose which the legislature intended to accomplish by its enactment. The portion of it which it is necessary to construe is the following:
“Sec. 1. After the passage of this Act, all property which shall pass by will or by the intestate laws of this state, from any person who may die, seised or possessed of the same, while a resident of this state, or if such decedent was not a resident of this state, at the time of his death, which property, or any part thereof, shall be within this state, or any interest therein or income therefrom, which shall be transferred by deed, grant, sale or gift made in contemplation of the death of the grantor or bargainor, or intended to take effect in possession or enjoyment after such death to any person or persons, or to any body politic, corporate, in trust or otherwise, or any property, which shall be in this state or the proceeds of all property outside of this state, which may come into this state, and which may be or should be distributed in this state to any such heirs, devisees or legatees, by reason whereof any person or corporation shall become beneficially entitled in possession or expectancy, to any such property, or to the income thereof, other than to or for the use of his or her father, mother, husband, wife, lawful issue, brother, sister, the wife or widow of the son or the husband of a daughter, or any child or children adopted as such in conformity with the laws of the state of Montana, and any lineal descendant of such decedent born in lawful wedlock, shall be and is subject to a tax of five dollars on every hundred dollars of the market value of such property, and at a proportionate rate for any less amount, to be paid to the treasurer of the proper county hereinafter defined for the use of said county and state in the proportions hereafter stated; and all administrators, executors and trustees shall be liable for any and all such taxes until the same have been paid as hereinafter directed. When the beneficial interests to any personal property or income therefrom shall pass to or for the use of any father, mother, husband, wife, child, brother, sister, wife or widow of the son, or the husband of a daughter, or any child or children adopted as such in conformity with the laws of the state of Montana, or to any person to whom the deceased, for not less than ten years prior to death, stood in mutually acknowledged relation of a parent, or to any lineal descendant born in lawful wedlock; in every such case the rate of tax shall be one dollar on every hundred dollars of the clear market value of such property, and at and after the same rate for every less amount, provided that an estate which may be valued at a less sum than seventy-five hundred dollars shall not be subject to any such tax or duty. In all other eáses the rate shall be five dollars on each and every hundred dollars of the clear market value of all property and at the same rate for any amount, provided that an estate which may be valued at a less sum than five hundred dollars shall not be subject to any such duties or tax; provided, further, that said tax shall be levied and collected upon the increase of all property arising between the date of death and the date of the decree of distribution, and upon all estates which have been probated before, and shall be distributed after the passage and taking effect of this Act.” (Sess. Laws 18-97, p. 83; Rev. Codes, sec. 7724.)
Although this provision has several times been examined upon questions touching its validity on constitutional grounds and to ascertain its meaning in other particulars, the question now before us is entirely new. The nature of the imposition was considered in Gelsthorpe v. Furnell, 20 Mont. 299, 39 L. R. A. 170, 51 Pac. 267. The conclusion was reached that it is not a tax upon property, but a duty imposed by the state upon the right to receive property by testamentary disposition or succession, or by any deed or instrument to take effect at or after the death of the testator. That such is the nature of the imposition has been assumed or affirmed by later decisions. (Hinds v. Wilcox, 22 Mont. 4, 55 Pac. 355; In re Tuohy’s Estate, 35 Mont. 431, 90 Pac. 170; State ex rel. Floyd v. District Court, 41 Mont. 357, 109 Pac. 438.) The last ease is supposed by some of the district judges to be in conflict with the earlier decisions, in that it seems to hold that the imposition is upon the right to make disposition rather than upon the right to receive or take; but that this notion is erroneous is apparent when attention is given to the questions which were considered and decided. It was conceded by counsel for relator that the tax in question in that case was properly imposed if the statute applies to estates of nonresidents. The questions involved were: (1) In ancillary administration proceedings in this state must distribution be made by the state court, or must the ancillary administrator or executor deliver the whole of the estate to the foreign executor? And (2) whether the statute provides a means by which the tax may be ascertained and collected. It is true that remarks made during the discussion of the first question indicate an opinion that the imposition is upon the interest of the testator, intestate, or grantor, and not upon the legacies or distributive shares; but there is nothing said indicating a change of the court’s views as to the nature of the imposition as stated in previous decisions, or the basis upon which the tax must be computed. In none of the previous decisions was the question now under consideration involved.
The statute is ambiguous in many of its expressions. It is difficult to ascertain what the legislature intended to designate as the basis of computation. That it was intended to be a revenue measure is clear, not only from the fact that it was enacted at a time when there was need for additional public revenue, but also from the fact that the collections made under it are devoted generally to the support of the state and county gov ernments. Such a construction must, 'therefore, be given it as will render it, so far as may be, effective for this purpose; and since all property, with the exceptions mentioned, is made subject to the tax, the rule is to be observed that all estates received by testamentary disposition or under the law of succession are subject to the imposition, except so far as they are specifically exempted.
In the construction of such statutes the question has generally been, as here, whether the exemptions made refer to the estate of the decedent or to the share of the legatee or dis- tributee. Our statute is modeled after the law of New York enacted in 1885 (Laws 1885, Chap. 483). (State ex rel. Floyd v. District Court, supra.) The court of last resort of that state, in considering the words “estate” and “property,” used in the same connection as they are used in our own Act, construed them as. referring to specific legacies or distributive shares, and not the whole estate, unless the whole descended to collaterals. (In re Cager, 111 N. Y. 343, 18 N. E. 866; In the Matter of Howe, 112 N. Y. 100, 2 L. R. A. 825, 19 N. E. 513.) In the latter case it was said with reference to a limitation of $500, where our statute fixes it at $7,500: “We think that applies to the portion of the property passing to the legatee or devisee, and not to the whole estate left by the testatrix. The tax is not imposed upon the estate of which she was seised or possessed, but only upon so much of it as passes to certain persons, not all persons or any person; and, although the executor is required to pay the tax, he is to deduct it from the particular legacy, and cannot ‘deliver or be compelled to deliver any specific legacy or property subject to tax to any person until he shall have collected the tax thereon.’ ” In a revision of this Act and later amendatory provisions in 1892, by what is known as the “Transfer Tax Act” (Laws 1892, Chap. 399), the legislature added a section declaring that the words “estate” and “property,” as used in the revision, should be taken to mean the “property or interest of the testator, intestate, grantor, bar-gainor or vendor passing or transferred, * * * and not as the property or interest therein passing or transferred to individual legatees, devisees, heirs, next of kin, grantees, donees or vendees” — thus showing a purpose to obviate the interpretation given to these terms by the court in the cases cited. This indicates, persuasively at least, that it was the purpose of the legislature when it formulated the Act that these terms should be given the meaning assigned to them in the later Act. In any event, the appellate court in construing the new enactment held that, while the theory of the tax theretofore defined as an imposition upon the right to take or receive by testamentary disposition or succession remained unchanged by the later legislation, the whole estate disposed of must be made the basis of computation, instead of the share of the legatee or distrib-utee. (Matter of Hoffman, 143 N. Y. 327, 38 N. E. 311.)
The statute of 1887 (P. L. 79) of Pennsylvania is very similar to the New York statute of 1885, and hence to our own. In the general designation of the subjects to which the Act applies, it employs the expression “all estates of every kind passing from any person by will,” etc., whereas our Act uses the expression, “all property which shall pass by will,” etc. The clause providing for the exemption except in the amount named is the same as that employed in our own statute. In the case of Howell’s Estate, 147 Pa. 164, 23 Atl. 403, it was contended that the expression “all estates” referred to legacies and distributive shares, and not to the clear value of the estate of the decedent. The court refused to sustain the contention and held that the liability for the tax was to be ascertained, not by the amount of the legacy or distributive share, but by the clear value of the estate passing to the persons or bodies corporate not exempt from taxation. The term “estate” is not in popular parlance more comprehensive in meaning than the term, “property.” As used in our statute, the two seem to be synonymous, and so the Pennsylvania court held in the case cited.
There are many ambiguities found in the different sections of the Act. Some of the expressions employed sustain the earlier view of the court of New York, and others the con trary view. For illustration: In section 1 an exemption is made of estates which may be valued at a less sum than $500. So, also, the increase in the value of all property is made subject to the tax. So are made subject to it all estates which have been probated before, and shall be distributed after, the passage and taking effect of the Act. In section 3, when a bequest or devise is made to the executor or trustee, in lieu of commissions and allowances, or he is made residuary legatee, the bequest or devise is subject to the tax if it exceeds a reasonable compensation. By section 4 the tax is due and payable at the date of the death of the decedent. Section 6 requires the executor, administrator, or trustee having in charge a legacy or trust to deduct the tax from it or collect it from the legatee or person entitled. Under section 7 the executor, administrator, or trustee has power to sell property of the decedent to obtain funds to pay the tax. These provisions are sufficient for illustrative purposes.
In view of the manifest purpose of the legislation, we think the terms “property” and “estate,” as used in the section, supra, should be assigned the meaning given them by the legislature of New York and by the Pennsylvania court, and that the uncertainties and ambiguities found in the sections of the Act providing the means of administration should be so resolved as to harmonize them with this purpose. Otherwise, as a revenue measure, the legislation would fail in effective accomplishment because the tax could in almost all cases be entirely averted.
We are aware that other courts have reached a different conclusion upon similar statutes (People v. Koenig, 37 Colo. 283, 11 Ann. Cas. 140, 85 Pac. 1129; Knowlton v. Moore, 178 U. S. 41, 44 L. Ed. 969, 20 Sup. Ct. Rep. 747); but the view which we have adopted seems to be more in harmony with the policy of the enactments. We apprehend that no difficulty will be encountered in computing the tax. It was said in State ex rel. Floyd v. District Court, supra: “It may be that, when the time comes to fix the amount to be paid, a part of it will have to be' fixed at one rate and a part at another, according as the relationship of the legatees to the testator is made to appear. Such a proportion of the amount as will go to the favored class, if any of the legatees fall within that class, will be subject to the tax at the lower rate and the rest at the higher rate; but these proportions will be easily ascertainable when the facts appear.” This view leaves the tax still a duty upon the privilege of taking or receiving, but at the same time it renders the legislation effective for the purpose for which it was enacted.
The order of the district court is affirmed.
'Affirmed.
Mr. Justice Smith and Mr. 'Justice Holloway concur. | [
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MR. CHIEF JUSTICE BRANTLY
delivered the opinion of the court.
Action for damages for the publication of a libel. In the court, below, the plaintiff had verdict and judgment. The defendant has appealed from the judgment and an order denying its motion for a new trial. The cause of action alleged is the publication by defendant, in the “Helena Daily Independent,” on the morning of February 21, 1907, of and concerning the plaintiff the following article:
“Mother Accused by Her Children.
“Mrs. F. E. Miller, of Butte, is arrested on charge of assault, at the instance of Otto Schoenfeld, executive officer of the state bureau of child and animal protection, who was hurriedly summoned to Butte Tuesday night by W. H. Orr, of the Silver Bow County Humane Society. Mrs. F. E. Miller was arrested and placed in the county jail this afternoon on the charge of assault upon her fifteen year old daughter. The charge is but nominal and behind is a story of horrible brutality and a peculiar condition of domestic affairs, according to the three children of the woman. It is alleged by the older daughter who goes by the name of Ruth Harris, the latter the name of the woman’s second husband, that the younger daughter, Helen, eleven years of age, has been compelled, at the command of the mother, to submit to unspeakable indignities forced upon her by men who have been repeatedly invited to their home at 1121 South Wyoming street, where the most indecent orgies are alleged to have been continued through the night.
“Threatened Their Lives.
“The mother, Mrs. Miller, is said to be a confirmed drunkard. It is alleged that on several occasions she has thrown a huge butcher knife at the children and has threatened to kill them if they were taken from her. The two girls were taken from school this afternoon by Mr. Schoenfeld, and they have been placed temporarily in the Paul Clark Home. The matter will be taken up before Judge Donlam to-morrow morning and the girls will probably be sent to the Orphans’ Home in Helena. There is also a boy twelve years of age, and what disposition will be made of him has not yet been decided.’’
Among other defenses, the defendant pleaded the statute of limitations. Plaintiff interposed a denial. At the commencement of the trial, the defendant objected to the introduction of evidence, on the ground that, it appearing from the complaint that the publication was made on February 21, 1907, and that the complaint was not filed until February 23, 1909, the action was barred by the provision of the statute. The objection was overruled. At the close of the evidence, the defendant requested the court to direct a verdict in its favor. The request was denied. The contentions made in this court are based upon these two rulings. Some technical questions arising upon the form of the plea of the statute and the reply thereto are argued in the brief. We shall not notice these, because they do not affect the merits of these appeals.
It was admitted in the district court, and also at the argument in this court, that the article in question was published on the morning of February 21, 1907, and that this action was commenced on February 23, 1909. February 21, 1909, fell on Sunday, a holiday. The following day was also a holiday. The position of counsel for defendant is that in computing the two year period of limitation prescribed by the statute for actions for libel (Eev. Codes, sec. 6448) the day of publication must be included, because the right of action accrues on that day. Hence that the district court should have sustained the objection and held the action barred. • If counsel’s assumption is correct, their conclusion is also; for if the two year period be computed, either in calendar years or in years of 365 days each, excluding the added day of the year 1908, a leap year (Rev; Codes, see. 2029), by the rule relied on by counsel, the limitation expired at midnight on February 20, 1909. From this point of view, of course, the two holidays following are entirely outside of the limitation period and need not be considered. The question, therefore, is, first, whether in computing the limitation period the first day is to be excluded; and, if so, second, whether the two holidays are to be excluded also.
For most purposes, the law regards the day as an indivisible unit. It is only when it becomes necessary to inquire into the order of sequence of two or more events occurring on the same day, for the purpose of determining a question of priority of right, or when the computation includes only one day or less, that departure from this rule is permitted. (Harmon v. Comstock Horse Cattle Co., 9 Mont. 243, 23 Pac. 470; Rev. Codes, see. 8071.) In Lester v. Garland, 15 Ves. Jr. 248, it was said: “Our law rejects fractions of a day more generally than the civil, law does. The effect is to render the day a sort of indivisible point, so that an act done in the compass of it is no more referable to any one than to any other portion of it; but the act and day are coextensive, and therefore the act cannot be passed until the day is passed.”
There is some confusion in the decisions of the courts upon the subject. In the case cited the conclusion was reached that no general rule can be laid down, because cases would occur the reason of which would require exceptions to be made. The result of this decision, however, was that earlier oases (Norris v. Gawtry, Hob. 139; Bellasis v. Hester, 1 Ld. Raym. 280; Rex v. Adderley, 2 Doug. 463; Castle v. Burditt, 3 T. E. 623, 100 Eng. Reprint, 768), which held that the computation was to be made from the act done and that the day on which the act was done should be included, were overruled. The rule applied in the oases last mentioned has been adopted by some of the courts in this country, as is shown by the following eases: Geneva Coop erage Co. v. Brown, 134 Ky. 16, 124 Am. St. Rep. 388, 30 Ky. Law Rep. 272, 98 S. W. 279; Aultman & Taylor Co. v. Syme, 163 N. Y. 54, 79 Am. St. Rep. 565, 57 N. E. 168; Peterson v. Georgia R. R. & Banking Co., 97 Ga. 798, 25 S. E. 370; Shinn v. Tucker, 33 Ark. 421. TMs was formerly the rale in Massachusetts; the court basing its decision on Norris v. Gawtry, supra (Presbrey v. Williams, 15 Mass. 193) ; but in the case of Seward v. Hayden, 150 Mass. 158, 15 Am. St. Rep. 183, 5 L. R. A. 844, 22 N. E. 629, Presbrey y. Williams was overruled. The court said: “But in computing time under statutes and contracts the law disregards fractions of a day, unless, on account of the subject matter, or for other important reasons, justice requires that they should be regarded. This rule is universally held applicable to computations under the statute of limitations.” The current of authority supports the rule thus stated. (Owen v. Slatter, 26 Ala. 547, 62 Am. Dec. 745; Blackman v. Nearing, 43 Conn. 56, 21 Am. Rep. 634; McCulloch v. Hopper, 47 N. J. L. 189, 54 Am. Rep. 146; Perkins v. Jennings, 27 Wash. 145, 67 Pac. 590; Warren v. Slade, 23 Mich. 1, 9 Am. Rep. 70; Grant v. Paddock. 30 Or. 312, 47 Pac. 712; Menges v. Frick, 73 Pa. 137, 13 Am. Rep. 731; Pugh v. Reat, 107 Ill. 440; Cowan v. Donaldson, 95 Tenn. 322, 32 S. W. 457; Spencer v. Haug, 45 Minn. 231, 47 N. W. 794; Nebola v. Minnesota Iron Co., 102 Minn. 89, 112 N. W. 880.) A collection of oases will be found in a note appended to the last ease cited in 12 Ann. Cas. 56.
Most of the foregoing cases are founded upon contract. But, if the day is to be regarded as a unit, there is no reason why the rule, as applied to actions ex contractu, should not apply to actions ex delicto also; otherwise there is a lack of uniformity in its application, and the result is that in the latter class of eases the period of limitation is shortened by the portion of the day which has expired before the doing of the wrong out of whi.ch the cause of action arises. There is no sound reason why the distinction should be made. The statute provides: “The time in which any act provided by law is to be done is computed by excluding the first day and including the last, unless the last day is a holiday, and then it is also excluded. ” (Rev. Codes, sec. 8067.) It was pointed out in Perkins v. Jennings and Grant v. Paddock, supra, that the purpose of this provision was to establish a general rule for the computation of time, in order that confusion may be avoided and harmony prevail. We think this is the correct view, because it furnishes a certain guide for the computation of time as applied to the statute of limitations in all cases, and also as applied to matters of procedure in the courts. The words “any act provided by.law,” as used in the statute, do not refer to acts which the law provides shall be done, but to acts which may be done within a specified time. The section has always been held by this court to apply to the time within which an appeal may be taken, to the time within which a notice of intention to move for a new trial may be given, or to the time within which any other motion or proceeding may be had in the course of litigation in courts (Jackway v. Hymer, 42 Mont. 168, 111 Pac. 720, and cases cited); and yet the doing of any of these things is not compulsory, because required by law to be done. They are to be done at the option of the parties. If the provision has no application to the time within which an action must be brought, then, by the same rule, it has no application to matters of procedure, and must be applied only to acts enjoined by law.
The rule of exclusion of the last day of the limitation when it falls on a holiday was recognized in this jurisdiction prior to the enactment of any legislation on the subject. (Schnepel v. Mellen, 3 Mont. 118.) We think the purpose of the legislation was also to settle the rule in this behalf, so that a person having a right to bring an action, or to do any other act in the course of legal proceedings, might have the whole of a legal day at the end of the prescribed period in which to exercise his option. In any event, it settles the rule of computation in both respects. The district court properly applied it to the exclusion of the day of publication, and also the two holidays appearing in succession on the 21st and 22d of February, 1909.
The s-eeond contention of counsel is that the court erred in refusing to direct a verdict for defendant, because the evidence disclosed that the publication of the article was privileged. Section 3604, Revised Codes, declares: “A privileged publication is one made: * * * 4. By a fair and true report, without malice, of a judicial, legislative, or other public official proceeding, or of anything said in the course thereof.” The argument is that the article is an account of the arrest of the plaintiff, together with a statement of someone relative to the proof in support of the charge upon which the arrest was made; that there is nowhere in it a distinct assertion that she was guilty of the charge; that it leads only to the conclusion that such charge was made against her in judicial proceedings; that it is neither alleged nor proved that it was published maliciously, and hence that it falls within the protection of the provision of the statute quoted.
The evidence tends to show that the plaintiff has been a resident of Butte for many years, occupying her own home; that at the time of the publication her three children — two girls, Ruth and Helen, of the ages of fourteen and eleven years, respectively, and a boy, Thomas, of the age of thirteen years — were attending the public school; that she had been divorced from a former husband, the father of the children, and was living with one Miller as his wife, but whether married to him or not does not appear; that Miller did not stay at the family home, but went from place to place as he could find work at his trade, being a painter and decorator; that the plaintiff earned the principal part of the family support by renting rooms, receiving help from Miller in the way of money, from time to time, as he was able to earn it; that the day before the publication of the article Mr. Schoenfeld, a state humane officer, in company with the divorced husband, having taken the children from school, held them in custody until the next day, when, upon a charge of vagrancy and incorrigibility, he procured their commitment as follows: Ruth to the state reform school, Thomas to the state orphans’ 'home, and Helen to the custody of the humane officers;, that plaintiff, hav ing learned that the children had been taken from school, went to the sheriff’s office, where they were being detained for the time being, to secure their release; that at the instance of Mr. Sehoen-feld, but without charge preferred by him or anyone else, and without a warrant, she was put in jail, where she was detained for two days and then released; that no charge was ever made against her, either by one of the children or anyone else; that she was not permitted to appear as a witness, or otherwise, at the hearing, which resulted in the commitment of the children; and that subsequently she secured their release and had them at home at the time of the trial. The evidence tended further to show that at no time prior to the action taken by the humane officer was there anything immoral or indecent in the life of plaintiff, except what might be inferred as to her relations with Miller (though what they were does not appear), or that she ever at any time ■subjected any of the children to any abuse or indignities of any kind, or permitted them to be subjected to wrong, or that they suffered any wrong, at the hands of others. On the contrary, it appears that she was kind and considerate in her conduct toward them and took such care of them as she could. The elder daughter testified that men did not visit her mother or frequent the house, except those who had rooms there, either alone, or with their families. She stated that she and her brother and sister ¡had always been treated kindly by her mother; that she had never been assaulted by her mother; that she had never so stated to anyone; that she was not allowed to have boy friends; that she was not permitted to go uptown to places of entertainment in the evening, but was required to be at home; and that she never told any person that her sister had been compelled by her mother to submit to unspeakable indignities, or to any indignities, at the hands of any person. Some of the roomers testified that the plaintiff treated the children kindly, and that, so far as they had observed, she had never used any violence toward any of them.
The reporter who prepared the article testified that the story contained in it was based upon information obtained at the sher iff’s office; that it was intended to be and was a fair statement of the facts as they were detailed to him, and that he at the time believed them to be as stated by him. There was no testimony offered to confirm any of the statements contained in the article, except the entry in the minutes of the district court, showing the order of commitment of the children, and the jail register, which purported to show that plaintiff was committed to jail for vagrancy upon the authority of Mr. Schoenfeld. There was no evidence tending to show that in gathering material for the story the reporter had any conversation with the children, or with anyone who had conversed with them. No witness testified that plaintiff was guilty of any misconduct at the jail. There is no evidence as to what occurred, other than that detailed above.
Whatever may be said as to the extent of the privilege extended to publishers of newspapers in reporting judicial or other public official proceedings, the article in question is not, and does not purport to be, such a report. In fact, it was written prior to the institution of any proceeding in court for any purpose. The information against the children was filed on February 21, after publication was made. There was nothing to justify the statement even as to an arrest of plaintiff, other than the high-handed action in the sheriff’s office, which resulted in her being thrown in jail on the preceding day. The story is no more nor less than what it purports to be — a sensational detail of charges of the inhuman and unspeakable crimes by the mother against the children, the material for which was gathered by the reporter, not from any proceeding witnessed by him, but at second-hand from the gossip heard at the sheriff’s office. It is not a fair, true story. If the evidence of the different witnesses is to be accepted as true — and for the purposes of this case it must be so accepted— the least investigation by the reporter would have disclosed to him, not only that the plaintiff was not under arrest upon a nominal charge of assault upon one of her own children, but also that the story behind it, of her horrible brutality .and unspeakable indignities to which' the other daughter had been compelled by her mother to submit at the hands of men during night-long orgies, was wholly untrue. To say nothing of the other features of the story, its reference to unspeakable indignities to which the mother subjected her daughter of tender years, impliedly to administer to the pleasure of her male companions, is in itself sufficient to expose the mother to the hatred and contempt of every right-thinking person. Under the statute (Rev. Codes, see. 3602), the statement is libelous per se, and. the plaintiff was not required to allege and prove special damages. (Paxton v. Woodward, 31 Mont. 195, 107 Am. St. Rep. 416, 3 Ann. Cas. 546, 78 Pac. 215; Odgers on Libel and Slander, p. 53; Newell on Slander and Libel, see. 17.) If the writer had merely stated the facts as they actually were, the result would have been an account of the doings of the officers, involving no charge against plaintiff whatever. Instead of verifying the statements of the officers as made to him by prosecuting an inquiry to ascertain the truth of them, intent upon making a good story, he accepted them without question, thus holding up the plaintiff to the obloquy of every reader as a person to be shunned and avoided by every decent man and woman in the community. The fact that he believed it to be fair and true, or that the defendant, accepting it as true, published it as a fair and true statement, is no excuse or justification. It was said by the supreme court of California, in Gilman v. McClatchy, 111 Cal. 606, 44 Pac. 241, a case similar in its facts to this case: “If A says B is a thief, and C publishes the statement that A said B was a thief, in a certain sense this would be the truth, but not in the sense that the law means. It would constitute no defense to C; for it would but be a repetition by him of a slanderous charge. His defense must consist in showing that in fact B was a thief.”
The right of free speech is guaranteed by the Constitution. (Art. Ill, sec. 10.) It is there declared that no law shall be enacted impairing it, and that every person shall be free to speak, write, or publish whatever he will on any subject. At the same time, it leaves the way open by which everyone who abuses his privilege may be brought to account. The court, in Gilman v. McClatchy, supra, after discussing at some length the purpose of this provision, concludes: “As the law stands, pecuniary compensation is all that can be recovered for libel, however damaging it may be. But no one pretends that this compensation reestablishes the injured man or rehabilitates his reputation. The damage done may be, and frequently is, irreparable. In this case, appellants ask for such an extension of the law as would give immunity to publishers of libels, provided express malice in the publication be absent. In other words, their contention resolves itself into this: That a newspaper is a purveyor of news. The people have the right to read the news. Any story gleaned by a reporter as this was gleaned, and published in the ordinary course of newspaper business, without personal malevolence against the victim of the tale, should be held privileged. In support of this contention, there is neither authority, law nor justice. No point of similarity can be found between this case and those which protect a publisher who, in good faith, discusses the habits, qualifications, and official conduct of a person holding a public office, or presenting himself as a candidate therefor. Even in the latter cases, a ‘line must be drawn between hostile criticism upon public conduct and the imputation of bad motives or criminal offenses, where such motives or offenses cannot be justly and reasonably inferred from the conduct.’ (Neeb v. Hope, 111 Pa. 145, 2 Atl. 568.) But to extend this doctrine and to seek to apply it, as here, to a charge, infamous in its nature and false in its facts, against a private individual would be to put upon the people a greater evil than that which the Constitution sought to prevent. ’ ’ Speaking on the same subject, the supreme court of Michigan, in McAllister v. Detroit Free Press Co., 76 Mich. 338, 15 Am. St. Rep. 318, 43 N. W. 431, said: “No newspaper has any right to trifle with the reputation of any citizen, or, by carelessness or recklessness, to injure his good name and fame or business. And the reporter of a newspaper has no more right to collect the stories on the street, or even to gather information from policemen or magistrates, out of court, about a citizen, and to his detriment, and publish such stories and information as facts in a newspaper, than has a person, not connected with a newspaper, to whisper from ear to ear the gossip and scandal of the street. If true, such publication or such speaking may be privileged; but, if false, the newspaper, as well as the citizen, must be responsible to anyone who is wronged and damaged thereby. It is indignity enough for an honest man to be arrested and put in prison for an offense of which he is innocent, and for which indignity ofttimes he has no redress, without being further subjected to the wrong and outrage of a false publication of the circumstances of such an arrest and imprisonment, looking toward his guilt, without remedy. And no sophistry of reasoning and no excuse of the demand of the public for news, or of the peculiarity and magnitude of newspaper work, can avail to alter the law, except, perhaps, by positive statute, which is doubtful, so as to leave a party thus injured without any recompense for a wrong which can even now, as the law stands, never be adequately compensated to one who loves his reputation better than money.” Within the limits defined by these cases, the publisher is within his rights. He cannot go beyond them without subjecting hims.elf to the penalties of the law.
Counsel argue that the fact that the district court, after the publication, adjudged that the children were dependent and neglected, under the provisions of the statute applicable (Rev. Codes, secs. 7829 — 7835), is a conclusive, reason why the publication was at least a quasi-privileged one, and that the burden was upon the plaintiff, not only to show the falsity of some of the statements contained in it, but also, that they were known to be false, or, by the exercise of ordinary care, their falsity could have been ascertained by the defendant. As we have already said, the story in its essential particulars was not true. It was libelous per se. In such case, the law presumes malice, in the absence of lawful excuse, even though no spite or ill-will is shown. (Rev. Codes, see. 8327.) On what particular ground the court committed the children does not appear; but at most the fact of their commitment does not, under the circumstances, justify any inference, other than that they were dependent or incorrigible. It furnishes no ground for the conclusion that any of the published charges against the plaintiff were true; and it was oniy by proof of their truth that the defendant could justify them.
The judgment and order are affirmed.
Affirmed.
Mr. Justice Holloway concurs.
Mr. Justice Smith:
I agree with all that is said by the Chief Justice in the foregoing decision concerning the second question involved; but I am of opinion that the case of Geneva Cooperage Co. v. Brown, 124 Ky. 16, 124 Am. St. Rep. 388, 98 S. W. 279, was decided on correct principles of law, and that the plaintiff’s cause of action in the instant case was barred by the statute of limitations.
Rehearing denied April 1, 1912. | [
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MR. JUSTICE SMITH
delivered tbe opinion of the court.
Plaintiffs’ complaint originally contained two causes of action — one for damages alleged to have been sustained by reason of the acts of the defendant in breaking their fence and entering upon their lands, and another for an injunction to prevent a repetition of such trespass. The parties own adjoining acre property in Deer Lodge county, with a line fence between, which fence was constructed by the plaintiffs. In their second cause of action they allege “that on the fourteenth day of January, 1911, the defendant forcibly broke and entered upon the plaintiffs’ land and took down and injured and destroyed a portion of said line fence owned by plaintiffs, and repeatedly trespassed upon and crossed over the lands owned by plaintiffs; * * * that plaintiffs repaired said fence so taken down and removed and injured by defendant, and thereafter at different times, the defendant again broke down and took down said fence belonging to plaintiffs, against plaintiffs’ protest, and defendant frequently repeated said action and threatens to continue to repeat said action in trespassing upon plaintiffs’land; * * * that such repeated trespasses of defendant would require a multiplicity of suits to restrain defendant from committing the same.” The answer of defendant to the second cause of action admits the ownership of plaintiffs’ lands; admits that they constructed and are the owners of the division line fence; admits that on January 14, 1911, defendant broke down, injured and destroyed the same; “admits that defendant willfully and forcibly broke down and took down said fence belonging to the plaintiffs, against the protest of plaintiffs, and admits that defendant frequently repeated said action and threatens to continue the said action”; but denies that he thereby trespassed or threatened to trespass upon plaintiffs’ land. As an affirmative defense he set forth that for ten years last past there has been a public road running through plaintiffs’ lands from east to west; that on or abont the first day of January, 1911, plaintiffs built a fence across said public highway on the division line between the lands of the parties hereto, which fence obstructed the highway and prevented the defendant from going upon the same without removing the fence; that defendant was entitled to the free use and benefit of the highway, and “he did then and there on the fourteenth day of January, 1911, break down a portion of the division fence which crossed over and was an obstruction to said public highway.” He further alleged, in effect, that there was no other way for him to get to and from his land. The affirmative allegations of the answer were put in issue by reply. "When the cause came on for trial a jury was first impaneled but upon plaintiffs dismissing their first cause of action, the jurors were discharged, against the protest of the defendant, and the court, over the objection of the defendant, directed the trial to proceed upon the second cause of action before the court sitting without a jury. Thereupon witnesses were sworn on the part of the plaintiffs, documentary evidence was introduced, and their case was closed. Defendant interposed a motion for a nonsuit, which motion was overruled. He then submitted the case to the court “as it now stands” without introducing any evidence. The court made findings of fact and drew certain conclusions of law therefrom, all in favor of the plaintiffs, and a decree of injunction was entered as prayed for. Defendant appeals. The appeal is supported by the judgment-roll alone, no part of the evidence being in the record.
1. It is contended that the second count of the complaint does not state facts sufficient to constitute a cause of action. The claim is advanced that the facts alleged show a simple trespass, and, it is said, “the action which defendant frequently repeated and which he threatens to continue, refers to his act of breaking down the fence. To say that this complaint seeks relief by injunction against defendant’s acts of crossing over plaintiffs’ lands would be to go outside of the ordinary uses of the English language.” It is a sufficient answer to this contention to say that the complaint alleges that the defendant repeatedly trespassed upon and crossed over tbe lands of tbe plaintiffs and “at different times maliciously, willfully and forcibly broke and took down tbe fence belonging to plaintiffs and frequently repeated said action and threatens to repeat said action in trespassing upon plaintiffs’ land * * * and said trespasses so continued and threatened to be continued by defendant were willfully and maliciously done to injure tbe plaintiffs- * * * and such repeated trespasses would require a multiplicity of suits on tbe part of plaintiffs to restrain the defendant from committing the same.” It is quite clear that tbe trespasses complained of are tbe acts of tbe defendant in going upon and crossing over plaintiffs’ lands, as well as his acts of repeatedly breaking the fence; and that be threatens to continue all of said acts. When the complaint is read in tbe light of the affirmative allegations of the answer it is apparent that the defendant was asserting a continuing right to follow an alleged public highway across the lands of plaintiffs. He had an opportunity to try the cause on its merits and refused to avail himself of it. Under these circumstances we shall not scan the complaint too closely, but shall give it the most liberal tonstruction in order to sustain the judgment.
2. The court found, inter alia, that on the fourteenth day ?f January, 1911, defendant “forcibly broke and entered upon plaintiffs’ land and broke down, injured and destroyed a portion of the fence owned by plaintiffs and went over and drove over plaintiffs’ land, without plaintiffs’ consent and without right, and thereafter’ the defendant again broke and destroyed a portion of the fence and went over and drove over plaintiffs’ lands without plaintiffs’ consent and without right, and defendant frequently went over and drove over plaintiffs’ land, and continuously did so to the damage of the plaintiffs * * *, and the injury so sustained by plaintiffs is irreparable, because the same is not susceptible of complete pecuniary compensation and cannot be estimated in money, and the said repeated trespasses would require a multiplicity of suits on the part of plaintiffs to recover damages from the defendants therefor,” etc.
It is now contended that whether or not a trespass was committed depended wholly npon the question of the existence of a public highway at the place in controversy, and, it is said, it has been the uniform holding of the courts that the existence of a public highway, when put in issue in an action of trespass, is always a question of fact for a jury. Numerous cases are cited to support the contention, but we find no necessity for examining them. There is no question of public highway in this case as it comes to this court. So far as the record presented to us discloses, the defendant had no defense to the action. He could not refuse to offer proof of the affirmative allegations of his answer and then claim a purely abstract right to a trial by jury after having admitted all of the allegations of the complaint. It was his duty .to make the record disclose prejudicial error. Such is the rule in this state, whatever it may be in other jurisdictions. (State v. Byrd, 41 Mont. 585, 111 Pac. 407; Knuckey v. Butte El. Ry. Co., ante, p. 106, 122 Pac. 280.) So far as we know he has suffered no prejudice whatsoever. The record discloses nothing for a jury to determine. The only issue presented by the pleadings was as to the existence of a public highway across the lands of the plaintiffs. While it is true that the court received evidence to substantiate the allegations of plaintiffs’ complaint, there was no necessity for so doing. They were all admitted. The defendant, by his answer, assumed the burden of proving the existence of a public highway. In the absence of evidence to substantiate his affirmative allegations, the court might well have entered a judgment for the plaintiffs on the pleadings rather than on their evidence. Defendant raised an issue of justification, and having failed to offer evidence in support of it, he has no cause of complaint. The issue was abandoned at the trial.
The judgment is affirmed.
'Affirmed.
MR. Chief Justioe Brantlt and Mr. 'Justice Holloway concur.
Rehearing denied May 10, 1912. | [
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