NO. 88-3-77 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

MONTANA BANK OF RED LODGE, N.A., 

Plaintiff and Appellant, 

-vsAILEEN LIGHTFIELD, a/k/a MARY AILEEN 

LIGHTFIELD, 

Defendant and Respondent. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Carbon, 

The Honorable Diane G. Barz, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Bruce E. Lee, Billings, Montana 

For Respondent: 

W. Corbin Howard, Billings, Montana 

Submitted on Briefs: Nov. 17, 1988 

Decided: April 6, 1989 
Mr. Justice William E. Hunt, Sr. delivered the Opinion of the 

Court. 

The Montana Bank of Red Lodge, the plaintiff, appeals 

the decision by the District Court of the Thirteenth Judicial 

District, Carbon County, denying its two motions for judgment 

nothwithstanding the verdict, one regarding whether a partnership existed between defendant Aileen Lightfield and her 

son, Lee J. Lightfield, and the other regarding whether 

defendant Aileen Lightfield j.s liable for up to $40,000 of 

Lee J. Lightfield's debt because of her signature on a 

written guaranty form. The Bank also appeals the District 

Court's decision to order a new trial. 

The defendant cross-appeals the decision by the District 

Court, denying her motion for judgment notwithstanding the 

verdict regarding whether she is liable for up to $40,000 of 

Lee J. Lightfield's debt as a result of her signature on a 

written guaranty form. We affirm the District Court. 

The issues raised by the plaintiff on appeal are: 

(1) whether the District Court erred in denying plaintiff's motion for judgment notwithstanding the verdict upon 

plaintiff's assertion that as a matter of law a partnership 

existed between defendant Aileen Lightfield and her son, Lee 

J. Lightfield, and therefore defendant is liable for debts 

incurred bv Lee J. Lightfield, totalling $86,126.91 plus 

interest; 

(2) whether the District Court erred in denying 

plaintiff's motion for judgment notwithstanding the verdict 

upon plaintiff's assertion that as a matter of law the defendant is liable for up to $40,000 as a result of her signature 

on a written guaranty form; 
(3) whether the District Court erred in granting a new 

trial upon the motion of the defendant. 

The issue raised on cross-appeal by the defendant is: 

(1) whether the District Court erred in denying defendant's motion for judqment notwithstanding the verdict upon 

defendant's assertion that she is not liable for up to 

$40,000 as a result of her signature on a written guaranty 

form . 

On March 25, 1982, Lee J. Lightfield established a line 

of credit for $40,000 with the Montana Bank of Red Lodge 

(Bank) to finance used automobiles for the purpose of reselling the automobiles at a car lot in Billings. Before allowing Lee to establish this line of credit, the Bank required 

that Lee's parents, Aileen and Gilbert Lightfield, pledge a 

$10,000 certificate of deposit by assignment and sign a 

guaranty form for up to $40,000 plus interest. Both Aileen 

and Gilbert Liqhtfield pledged the $10,000 certificate of 

deposit and signed the guaranty form. 

On April 23, 1982, after Lee pledged a $20,000 

certificate of deposit, the Bank increased Lee's line of 

credit to $80,000. On September 28, 1982 the Bank increased 

Lee's line of credit to $130,000. In neither case did the 

Rank inform Aileen Lightfield of the increase in Lee's line 

of credit. 

Gilbert Lightfield was seriously ill throughout this 

time and subsequently died on May 9, 1983. Shortly after 

Gilbert Lightfield's death, Lee persuaded his mother, Aileen 

Lightfield, to enter the used car business. Aileen testified 

that she did not necessarily want to get into the car 

business, but she also did not want to be alone on the ranch. 

She testified that her son promised that he would get her an 

apartment near him in Billings, teach her to how to buy cars, 

and have her keep the books. Aileen consented to enter the 
car business and went with Lee to the Bank on May 16, 1983, 

to see whether the Bank would give her a line of credit for 

the purpose of buying used automobiles. The Bank 

subsequently allowed Aileen to establish a line of credit in 

the amount of $150,000 for the purpose of buying used 

automobiles. Aileen mortgaged her ranch land, located in the 

Lambert area, as collateral. 

In July, 1983, Aileen Lightfield realized that her son 

was not fulfilling his promise of teaching her about the car 

business and informed her son to sell all of her cars because 

she was getting out of the business. She informed the Bank 

of her decision on August 26, 1983. She arranged a November 

10, 1983 meeting with the Bank. Aileen testified that at 

this meeting, as well as on the phone approximately a week 

earlier, she demanded from the Bank all of the documents that 

she had ever signed. After this demand, the Bank simply gave 

her a satisfaction of her mortgage on her ranch land at the 

November 10 meeting. 

In November, 1983, the Bank became concerned when an 

inventory of the car lot in Billings showed a few cars of Lee 

Lightfield's missing. The Bank met with Lee on January 7, 

1984 and eventually discovered that Lee was defrauding the 

Bank. Lee subsequently pled guilty to eighteen counts of 

theft. 

In January, 1984, the Bank called Aileen Lightfield and 

asked her to come to the Rank to see if she could help Lee 

with his financial problems. When Aileen arrived at the Bank 

on January 16, 1984, the Bank asked her to sign a note 

promising to pay Lee's debt of $150,000. Aileen refused to 

sign the note. 

The Bank filed a complaint on April 25, 1984, naming Lee 

J. Lightfield, Lee s wife (Sandy Lightfield) , and Aileen 

Lightfield as defendants. Lee and Sandy Lightfield were 
subsequently dismissed as defendants in this action when they 

filed for bankruptcy by way of a joint petition in the United 

States Bankruptcy Court, leaving Aileen Lightfield as the 

sole defendant. The case was brought to trial on September 

21, 1987. Both the plaintiff Bank and defendant Aileen 

Lightfield filed motions for directed verdicts asking the 

court to determine if a partnership existed between defendant 

Lightfield and her son. The court granted Lightfield's 

motion, finding that as a matter of law no partnership 

existed between her and her son. 

Both the Bank and Lightfield also brought motions for 

directed verdict regarding defendant Lightfield's liability 

as a result of the written guaranty form. The District Court 

denied both of these motions and allowed the question to go 

to the jury. On September 24, 1987, the jury, by special 

verdict, found defendant Lightfield liable to the Bank by 

reason of the guaranty, but only awarded the Rank $1.00 in 

compensatory damages. The jury also found that the Bank 

breached a duty of good faith and fair dealing toward Aileen 

Lightfield, but found that the breach did not cause her 

injury or damage. The jury then found that the Rank did not 

commit actual or constructive fraud by reason of its conduct 

toward defendant Lightfield. The jury awarded Lightfield 

$1,500 in compensatory damages. The jury found that the Rank 

had not acted with fraud, malice or oppression in its 

relationship with Lightfield and therefore did not reach the 

question of whether to assess the Bank with punitive damages. 

The District Court denied the Bank's motion for judgment 

notwithstanding the verdict regarding the existence of a 

partnership and denied both the Rank's and Lightfield's 

motions for judgment notwithstanding the verdict regarding 

Lightfield's liability as a result of the written guaranty 

form. On March 25, 1988, the District Court granted 
Lightfield's motion for a new trial, finding that under 9 

25-11-102, MCA, the jury's findings were inconsistent. 

The first issue raised on appeal is whether the District 

Court erred in denying the Rank's motion for judgment notwithstanding the verdict upon the Bank's assertion that as a 

matter of law a partnership existed between Aileen Liqhtfield 

and her son, Lee J. Lightfield, and therefore Aileen 

Lightfield is liable for debts incurred by Lee J. Liqhtfield, 

totalling $86,126.91 plus interest. 

Section 35-10-201, MCA, defines a partnership as "an 

association of two or more persons to carry on as co-owners a 

business for profit." This Court has consistently held that 

in determining whether a partnership exists, it is necessar~ 

that the parties clearly manifest their intent to associate 

themselves in a partnership relationship; that each partner 

contributes something that promotes the enterprise; that each 

partner has a right of mutual control over the subject matter 

of the enterprise; and that the partners have agreed to share 

profits. Bender v. Bender (1965), 144 Mont. 470, 480, 39' 

P.2d 957, 962. When ascertaining the intent of the parties 

absent a written agreement, all the surrounding facts, 

circumstances, and conduct of the parties must be considered. 

Bender, 144 Mont. at 480, 397 P.2d at 962. Section 

35-10-202, MCA, also lists rules that are important in 

determining whether a partnership exists. 

The Rank argues that the agreement between Lee and 

Aileen was to share profits and that under 5 35-10-202 (4) , 

MCA, the sharing of business profits is prima facie evidence 

that a person is a partner in the business. However, 6 

35-10-202(4), MCA, also states that no such inference shal-l 

be drawn if such profits were received in payment as wages 

for an emplovee or as a debt by installments. Section 

35-10-202 (4) (a) and (h) , MCA. The facts in this case are 
uncontroverted. The understanding between Aileen and Lee 

provided for an unequal splitting of the profits between Lee 

and Aileen from Aileen's line of automobiles only. Neither 

profits nor losses were shared between Lee and Aileen from 

Lee's line of automobiles. The understanding also provided 

that Lee would absorb all the losses. The understanding, 

however, also included that Lee would teach Aileen the art of 

buying used automobiles, get her an apartment in Billings, 

and have her keep the books. Lee never fulfilled this part 

of the agreement and therefore after less than two months, 

Aileen made her intentions known to Lee that she was gettins 

out of the used car business. In light of all the 

surrounding facts and circumstances, this understandinq 

between Lee and Aileen is more consistent with Ail-een paying 

Lee to instruct her in the business of buying used automobiles rather than an agreement among partners to share 

profits. 

The evidence also clearly establishes that Aileen had no 

control over the subject matter of the supposed partnership. 

Lee took total control of the buying and selling of the 

automobiles financed on Aileen's line of credit. Aileen had 

no control over her automobiles nor over automobiles financed 

from Lee's line of credit. Lee also never allowed Aileen to 

keep the books. No written partnership agreement existed 

between Lee and Aileen Lightfield and neither Lee nor Aileen 

intended to be partners nor did the Rank consider them or 

treat them as partners until the deficiency arose. A1 l 

parties, including the Bank, understood Lee's and Aileen's 

lines of credit. to be separate and the lines in fact were 

kept separate. 

The record also establishes that the insurance policy 

for both Lee's and Aileen's automobiles was in the sole name 

of Lee J. Lightfield; that Lee and Aileen, as well as other 
third parties, operated under the name of a car lot, Central 

Auto, which was owned by a third partv; that both Lee and 

Aileen operated under the same business license and bond; 

and, that the two shared one bank account for all their 

business transactions. As stated previously, however, the 

entire surrounding facts, circumstances, and conduct of the 

parties must be considered when determining whether the 

requisite intent exists to create a partnership in the 

absence of an express agreement. This Court has never 

held--contrary to what the Bank argues--that intent is not 

required in the formation of a partnership. To the contrary, 

intent is a major factor. Truck Ins. Exchange v. Industrial 

Indemnity Co. (1984), 212 Mont. 297, 300, 688 P.2d 1243, 

1244; Bender, 144 Mont. at 480, 397 P.2d at 962. 

The burden of proving the existence of a partnership is 

on the party seeking to establish its existence. Bender, 144 

Mont. at 480, 397 P.2d at 962. In light of all of the 

evidence, we hold that the Bank failed to establish the 

requisite factors necesary to prove the existence of a 

partnership and therefore hold that the District Court 

properly found that no partnership existed between Aileen and 

Lee as a matter of law. 

The second issue raised on appeal and the issue raised 

on cross-appeal is whether the District Court erred in denying the Bank's and Lightfield's motions for judgment notwithstanding the verdict regarding whether Lightfield is liable 

for up to $40,000 as a result of her signature on a written 

guaranty form. 

The Bank argues that the guaranty should be enforced on 

its face and that none of the affirmative defenses set forth 

by Lightfield should have gone to the jury. Lightfield 

argues that as a matter of law she should be exonerated 

because the Bank failed to inform her of facts substantially 
increasing her risk of loss and because her obligation under 

the guaranty was procured by either fraud or constructive 

fraud. We hold that the District Court did not err by 

allowing the issues to go to the jury and in denying the 

Bank's motions for directed verdict regarding Lightfield's 

affirmative defenses. 

The Bank argues that Lightfield's allegation of fraud 

fails because an essential element--the aggrieved party's 

reliance upon the other party's representation--is not 

present. Conversely, Lightfield argues that the evidence 

indicates that all the elements constituting fraud were 

satisfied and therefore the District Court erred in not 

granting her motion for judgment notwithstanding the verdict. 

We disagree with both the Bank's and Lightfield's assertions. 

Typically, a person who fails to take the opportunity to 

examine a written form before executing it cannot claim 

fraud. Jenkins v. Hillard (1982), 199 Mont. 1, 6, 647 P.2d 

354, 357; Hjermstad v. Barkuloo (1954), 128 Mont. 88, 98, 270 

P.2d 1112, 1117. As noted by the Rank, however, a person may 

claim fraud to a document he signs "where he is prevented 

from reading it or having it read to him by some fraud, 

trick, artifice, or devise by the other party." 17 Am.Jur.2d 

Contracts S 152 (1964). 

Actual fraud is always a question of fact. Jenkins, 199 

Mont. at 5, 647 P.2d at 357. This Court is not in a position 

to weigh the facts. This Court's function is to determine 

whether the District Court erred when denying the Bank's 

motion for directed verdict. Motions for directed verdict or 

for judgments notwithstanding the verdict are proper only 

when no evidence exists to warrant submission to the jury. 

McGregor v. Momrner (Mont. 1986), 714 P.2d 536, 540, 43 

St.Rep. 206, 210; Wilkerson v. School Dist. No. 15 (Mont. 

19851, 700 P.2d 617, 622, 42 St.Rep. 745, 750-51. F7 e 
therefore hold that the District Court properly denied the 

Bank's motion for directed verdict on the basis of either 

fraud or constructive fraud. Likewise, we uphold the court's 

order denying Lightfield's motion for judgment 

notwithstanding the verdict on these issues. 

The Bank also argues that under the written guarantv 

form they were not required to give Lightfield advance notice 

that they were increasing Lee J. Lightfield's line of credit. 

In Bails v. Gar (1976), 171 Mont. 342, 558 P.2d 458, we held 

that " [f] raud vitiates every transaction and all contracts. " 

Bails, 171 Mont. at 347, 558 P.2d at 461 (quoting 37 

Am.Jur.2d Fraud and Deceit S 8 (1968)). A person who 

perpetuates fraud by inducing another to enter a contract may 

not then immunize himself by relying upon the provisions 

within the contract. Jenkins, 199 Mont. at 6, 647 P.2d at 

357. In light of the above discussion addressing fraud, we 

cannot determine as a matter of law whether Lightfield had 

notice of the specifications under the written guaranty form 

and whether the Bank needed to inform her of facts which 

substantially increased her risk of loss. These are 

questions for the jury to decide. As previously noted, 

motions for directed verdict or for judgment notwithstanding 

the verdict are proper only when no evidence exists to 

warrant submission to the jury. McGregor, 714 P.2d at 540, 

43 St.Rep. at 210; Wilkerson, 700 P.2d at 622, 42 St.Rep. at 

750-51. We therefore hold that the District Court properly 

denied the Bank's motion for directed verdict. and 

Lightfield's motion for judgment notwithstanding the verdict 

on this issue. 

The third issue raised on appeal is whether the District 

Court erred in granting a new trial upon the motion of the 

Rank. 
The District Court granted Lightfield's motion for a new 

trial on March 25, 1988. The court found that the verdict 

form was straightforward and understandable, but after 

reviewing the jury's responses, the court was left with the 

inescapable impression that the jury was "either hopelessly 

confused or disregarded the court's instructions." We agree 

that the jury was confused but further determine that the 

form itself was terribly confusing and should not be used 

again. 

The requirements for requesting and ordering a new trial 

are set forth in Rule 59, M.R.Ci7r.P. A verdict may be 

vacated and a new trial granted on the application of an 

aggrieved party if the District Court finds that insufficient 

evidence exists to justify the verdict or that it is against 

the law. Section 25-11-102(6), MCA. In ordering the new 

trial, the District Court found that the jury had determined 

that Lightfield was liable to the Bank on the guaranty she 

had signed. The court noted that the guaranty was for up to 

$40,000, yet the jury awarded the Rank compensatory damages 

of only $1.00. The court also found that the jury had 

determined that the Bank had breached its duty of good faith 

and fair dealing in its actions toward Lightfield, but then 

found that Lightfield had not been injured or damaged as a 

result. The court noted, however, that the jury nonetheless 

awarded Lightfield $1,500 in compensatory damages. The court 

also noted that despite its instructions, the jury failed to 

account for Lightfield's $10,000 certificate of deposit which 

the Bank retained. The court concluded that the jury 

findings were inconsistent and that it was too difficult to 

speculate as to how the jury arrived at its conclusions. The 

court therefore ordered a new trial pursuant to S 

25-11--102 (6), MCA. 
The District Court possesses the discretion to either 

grant or deny a motion for a new trial. This Court will not 

overturn a decision by the District Court absent a showing of 

manifest abuse of that discretion. Walter v. Evans Products 

Co. (1983), 207 Mont. 26, 30-31, 672 P.2d 613, 616. In light 

of the above, we hold that the District Court did not abuse 

its discretion by granting Lightfield's motion for a new 

trial. We therefore affirm the District Court on this issue. 

Affirmed. 

We Concur: A 

Chief Justice 

LJ- Justices 
Mr. Justice Fred J. Weber specially conc.urs as follows: 

I concur in the granting of a new trial. However, I 

dissent to the portion of the majority opinion which affirms 

the District Court's granting of a directed verdict on the 

partnership issue. 

Both parties in this action moved for a directed verdict, asking the court to determine as a matter of law whether a partnership existed. The lower court granted Ms. 

Lightfield's motion, determining as a matter of law, that no 

partnership existed. This Court has examined the facts and 

affirmed this holding. 

The standard for granting a directed verdict is 

well-settled and was recently reiterated in Britton v. Farmers Ins. Group (1986), 721 P.2d 303, 317, 43 St.Rep. 641, 

656, as follows: 

A motion for directed verdict is properly 

granted only in the complete absence of any evidence to warrant submission to the jury, and al.1 

inferences of fact must be considered in the light 

most favorable to the opposing party. Jacques v. 

Montana National Guard (1982), 199 Mont. 493, 649 

P.2d 1319; if the evidence viewed in a light most 

favorable to plaintiff indicates reasonable men 

could differ as to the conclusions drawn from the 

evidence a directed verdict is not proper. Weber 

v. Blue Cross of Montana (1982), 196 Mont. 454, 643 

P.2d 198. 

In the present case the majority opinion states facts 

sufficient to demonstrate that reasonable men might differ as 

to whether a partnership existed. This was properly a jury 

issue. The District Court analyzed and weighed the evidence. 

This is inappropriate on a, motion for a directed verdict, 

even when both parties have requested a directed verdict. 
Borgmann v. Diehl (1970), 155 Mont. 458, 462-63, 473 P.2d 

529, 531. 

The majority opinion, in affirming the directed verdict, 

has also engaged in weighing the evidence. While it is 

possible that a jury would conclude that no partnership 

existed, it is not our function to make that determination 

where reasonable men could reach a different conclusion. An 

inappropriate standard has been used both by the District 

Court, and by this Court on appeal. I would vacate the 

directed verdict and remand for a jury trial on the partnership issue also.