No. 13302 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1978 

HAROLD STURDEVANT, 

Plaintiff and Appellant, 

-vsGARY MILLS, 

Defendant and Respondent. 

Appeal from: District Court of the Eighteenth Judicial 

District, 

Honorable W. W. Lessley, Judge presiding. 

Counsel of Record: 

For Appellant: 

Tipp and Hoven, Missoula, Montana 

Raymond P. Tipp argued, Missoula, Montana 

For Respondent: 

Bennett and Bennett, Bozeman, Montana 

Lyman H. Bennett I11 argued, Bozeman, Montana 

Filed: 

Submitted: March 9, 1978 

Decided : 

9UN 1 9 1978 
Mr. Justice Daniel J. Shea delivered the Opinion of the Court. 

Plaintiff Harold Sturdevant, an insurance general agent, 

appeals from a judgment of the District Court, Gallatin County, 

denying recovery of advances made by him to Gary Mills, an insurance agent. 

Plaintiff is an insurance general agent residing in 

Missoula, Montana. He recruited defendant to sell life insurance 

written by Minnesota Mutual Life Insurance Company of St. Paul, 

Minnesota, a company for which plaintiff was a general agent. 

Defendant was to sell Minnesota Mutual policies out of an office 

located in Bozeman, Montana. 

By an agreement signed by plaintiff (hereinafter General 

Agent) and defendant (hereinafter Agent) on December 15, 1969, 

and approved by Minnesota Mutual two weeks later, Minnesota Mutual 

agreed to advance $1,000 per month to General Agent for Agent's 

use in financing his new operation. By the terms of this "Agent's 

Advance Agreement", the advances were to be made against firstyear commissions the Agent was expected to earn in the course of 

selling life insurance policies. The agreement provided that the 

advances may be made if the Agent had met each of three conditions: 

(1) Satisfactory performance on certain tests; (2) completion of 

all precontract training; and, (3) selling of sufficient policies 

to generate minimum monthly premium amounts set forth as "validation requirements" in the agreement. The agreement also provided: 

"The Agent and General Agent agree that: 

"A. All advances are loans to the General 

Agent and Agent repayable on demand, and 

guarantee the Company against loss on any 

indebtedness created by these advances." 

By early spring of 1970 the Agent was in financial difficulty. His insurance sales had not met the "validation requirements" 

of the Agent's Advance Agreement since his first month on the job. 
H he General Agent was aware of the Agent's predicament and discussed the continuation of the advances with him and with Minnesota Mutual. The General Agent testified the insurance company 

"took the position that it probably wasn't good business but it 

was my money so if I wanted to advance it to go ahead." The 

General Agent then continued to make $1,000 monthly advances to 

the Agent. 

The Agent's financial problems grew more acute. He met 

with a Bozeman attorney and attempted to work out an assignment 

for the benefit of creditors. The General Agent knew of the 

assignment plan and thereafter withheld certain amounts from the 

Agent's monthly advances to pay the Agent's creditors and the 

Agent's attorney. 

The assignment plan proved to be ineffective, and in 

September 1970 the Agent filed for bankruptcy. The General Agent's 

participation in the preparation of the Agent's bankruptcy petition was a matter in dispute at trial of the cause, with each 

side presenting sharply conflicting evidence. The District Court 

resolved those issues against the General Agent. 

The Agent's testimony placed the General Agent at the 

center of the bankruptcy preparations. He testified the General 

Agent knew of his plan to file bankruptcy, that both were present 

at a meeting with the Agent's attorney when bankruptcy was decided, and that the General Agent advised him regarding creditors 

to be listed on the bankruptcy petition. The Agent further testified the General Agent warned him that if either the General Agent 

or Minnesota Mutual was listed as a creditor for the advances received, the Agent would most likely lose his job. 

The General Agent denied he had anything to do with the 

bankruptcy. He denied discussing bankruptcy during the meeting 

with the Agent's attorney. He also denied advising the Agent he 
would be terminated from employment if he listed either the 

petition. General Agent or Minnesota Mutual in the bankruptcy/ He testified he knew nothing about the bankruptcy plan until after the 

bankruptcy had already occurred. 

The Agent's attorney testified all three were present at 

the meeting and bankruptcy was discussed. However, he could not 

recall anything specific about what was said at that or any other 

meeting between the three. 

When the Agent's bankruptcy petition was filed, neither 

the General Agent nor Minnesota Mutual was included in its list 

of creditors. The Agent continued to receive advances through 

October 1970, even though his sales production remained minimal. 

All commissions he had earned were retained as partial repayment 

of money previously advanced. The advances ultimately totalled 

approximately $11,000 and the retained commissions amounted to 

between $1,100 and $3,500. 

After the Agent's bankruptcy the General Agent paid Minnesota Mutual the balance owing on the amount the insurance company had advanced to the General Agent for the Agent's use. Ey 

this time, the Agent had terminated his relationship with the 

General Agent and Minnesota Mutual. The General Agent then 

demanded repayment from the former Agent. Repayment was refused, 

and three years later, on February 11, 1974, the General Agent 

brought the present action to recover the advances. 

The District Court, sitting without a jury, entered findings of fact and conclusions of law on November 24, 1975. On 

December 2, 1975, the District Court entered judgment in the 

Agent's favor. The General Agent appeals from this judgment and 

from the District Court's denial of his motions to amend the 

findings of fact and conclusions of law and to set aside and vacate or modify the judgment and for a new trial. 
 he issue the General Agent presents for review is whether 

the District Court erred in ruling that the Agent was not obligated to repay the advances he received. 

The General Agent first contends he is entitled to contribution from the Agent because both parties were jointly obligated to repay Minnesota Mutual any money received from the insurance company under the Agent's Advance Agreement. While the 

agreement was considered by the District Court, and by its terms 

it imposes joint liability upon the Agent and the General Agent 

for repayment of advances funded by the insurance company, nothing 

in the General Agent's pleadings indicates the suit was based in 

any way on a joint obligation or alleges the General Agent was 

compelled to pay what the Agent should have paid. The complaint 

was not based on a theory of contribution, but on the simple theory 

the Agent was indebted on a loan. 

Since the question of whether contribution applies on the 

facts of this case is raised for the first time on appeal, and was 

not properly presented to the District Court, we will not review 

it. Montana Association of Underwriters v. State of Montana, 

(1977) Mont . , 563 P.2d 577, 34 St.Rep. 297, 302. 

The General Agent's next contention is that the Agent must 

repay the advances he received because those advances were loans 

which he agreed to repay by signing the Agent's Advance Agreement. 

The General Agent acknowledges he and the Agent made no agreement 

between themselves regarding repayment of advances, and he also 

concedes the Agent failed to meet the validation requirements set 

forth in the Agent's Advance Agreement. Nevertheless, he argues 

those facts have no effect on the Agent's obligation to reimburse 

him for money advanced because all parties waived the validation 

requirements and the agreement therefore remained in full force 

and effect. 
However, his reliance on a waiver is misplaced. He testified Minnesota Mutual told him he was on his own with respect to 

continuing advances under the circumstances. The insurance 

company's response does not constitute a waiver of the Agent's 

nonperformance of the Agent's Advance Agreement. At most, it 

reflects the company's judgment that it had little to lose in any 

event. The risk was the General Agent's alone, not Minnesota 

Mutual ' s. 

The risk was taken due to the General Agent's desire to 

reap the benefits of continuing advances made to the Agent; benefits which would result when a sufficient amount of insurance was 

sold through the Bozeman operation. The General Agent knew he 

would have to repay Minnesota Mutual any money disbursed to the 

Agent from the advances received from the insurance companyc He 

also knew those advances were terminable at any time at the option 

of either himself or Minnesota Mutual. He continued the advances 

knowing the Agent did not meet the Agent's Advance Agreement and 

after being told by Minnesota Mutual that he was on his own. 

Under these circumstances, the advances were voluntary 

payments to the Agent. As defined at 70 C.J.S. Payment S134, a 

voluntary payment is: 

"* * * a payment made without a mistake of fact 

or fraud, duress, coercion, or extortion, on a 

demand which is not enforceable against the payor * * * and whether in a given case a payment is 

voluntary depends on the facts of the particular 

case, as indicating an intention on the part of 

the payor to waive his legal rights. * * *'I 

There was no mistake involved here, nor were the advances continued 

because( of fraud, duress, coercion or extortion. They were continued because the General Agent envisioned a benefit from their 

continuation. He did nothing to preserve his recovery rights 

against the Agent. There was no agreement between him and the 

agent requiring the Agent to repay the advances. Nor was there 
any understanding between them that the Agent was incurring individual liability as each advance was received. 

Moreover, the General Agent's conduct with regard to the 

Agent's bankruptcy is further indication of his right to demand 

repayment of the advances. The District Court found the Agent did 

not receive a discharge in bankruptcy of any indebtedness resulting 

from the advances received because of the General Agent's representation that the Agent would lose his employment if he named 

either the General Agent or Minnesota Mutual in his bankruptcy 

petition. 

The General Agent's representations induced the Agent to 

change his position for the worse. Facing a future in which his 

job would be the only thing remaining after bankruptcy, he relied 

on those representations in foregoing immediate discharge. When 

a detrimental change in position is made in reliance on the conduct of another indicating a waiver of present rights, a waiver 

of recovery rights is established. See, McDonald v. Northern 

Benefit Assn., (1942), 113 Mont. 595, 610, 131 P.2d 479. 

We hold on the facts of this case the General Agent has 

no right to recover money voluntarily paid to the Agent in the 

form of advances against sales. This is consistent with the rule 

stated by the Oregon Supreme Court in Adams v. Crater Well Drilling, 

Inc., (1976), 276 Or. 789, 556 P.2d 679, 681: 

"As a general rule money which is voluntarily 

paid with full knowledge of facts which would 

excuse payment cannot be recovered. * * *" 

It is also consistent with our conclusion that in equity 

and good conscience the Agent should not be held liable for advances voluntarily made to him and not scheduled by him in reliance 

on the General Agent's representations. The General Agent stood 

to benefit from the risk of continuing advances, and under the 
circumstances should not be able to avoid the consequences of 

his enterprise. 

The judgment of the District Court is affirmed. 

We Concur: 

Judge, Isr)tting with the Court. 

Mr. Chief Justice Frank I. Haswell concurs with the result.