### No. 79-52 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981

SEVEN SEAS IMPORT-EXPORT & 

### MERCANTILE, INC.

## , a Mont. Corp.

## , Plaintiff and Appellant,

HANDEE FOODS, INC., a Mont. Corp., and FREDERICK W. KRIEGER, Individually, Defendants and Respondents.

.1from: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable James B. Wheelis, Judge presiding.

Counsel of Record: For Appellant: Raymond 

### W. Brault, Helena, Montana For Respondent: 

### Tipp, Hoven & 

### Skjelset,Missoula, Montana

Submitted on Briefs: October 9, 1980 Decided: 

## JAB 14

# ma

Filed: 

# JAR1

## 4 

## TPirMr. Justice Gene B. Daly delivered the Opinion of the Court. Seven Seas Import-Export & Mercantile, Inc., appeals a summary judgment granted by the DistrictCourt of the Fourth Judicial District, Missoula County, the Honorable James B. Wheelis presiding, infavor of Handee Foods, Inc., and Frederick W. Krieger. On August 25, 1978, appellant filed suitalleging three claims for relief. Each claimwas based on a constable's sale, on May 29, 1974, of goods left

### ata warehouse owned by Handee Foods, Inc., and rented toRaymond Brault, president of Seven Seas Import-Export & Mercantile, Inc. Brault rented a portion of the warehouse from respondent in 1973. He apparently needed the space to store specified types of fiberglass insulation tobe used in the construction of metal buildings. Appellant alleges thatinMarch 1974 

### it became necessary to terminate the rental agreement with Handee Foods to allow appellant's performance on certain other contract matters outside the 

### state. Seven Seas 

### atthis 

### timewas in

arrears inrental payments amounting to approximately $896. Appellant further alleges thatBrault wrote torespondent, advising it of the situationand giving respondent 

### a quantity of the insulation stored inthe warehouse equal in wholesale price to the amount of rentowing. The balance of the insulation was then allegedly sold by appellant to various other business concerns which 

### were told they could obtain their respective quantities 

### atrespondent's warehouse. Respondent was allegedly informed of the other purchasers and was torelease the insulationwhen they came to pick 

### it up. Appellant contends, however, respondent refused torelease the insulation, laid claim to the entirety of thestored insulation, and then improperly sold it, retaining the proceeds. ~espondent, by way of answer, denied being contacted by Brault 

### as to his need to terminate the rental agreement; denied accepting any quantity of insulation aspayment of appellant's rent; denied being informed of the 

### sale of the balance of the insulation to other business concerns; and denied thatany purchasers came topick up their respective quantities. Respondent then admits selling the insulation stored in

### itswarehouse for nonpayment of rentby appellant. After the complaint was filed, appellant served various interrogatories on respondent. Respondent, inanswering them, revealed that the insulation was sold on May 29, 1974, toHandee Foods, Inc., the highest bidder, for $2,424.55. Respondent also stated that the salewas conducted pursuant to section 71-3-1203, MCA, by 

### a constable for the Justice Court 

### atrespondent's warehouse. The sale

### was advertised by posting notice on May 16, 1974, infivepublic places in Missoula County. Respondent also served interrogatories on appellant. However, they 

### were never answered. No sanctions 

### were requested by respondent, and, thus, the interrogatories

### were not part of the record submitted on the motion for summary 

### j

udgment

# . Respondent filed 

### itsmotion for summary judgment on March 23, 1979. A hearing on the matter 

### was held on ~pril 9, 1979, afterwhich the DistrictCourt granted the motion, finding that allclaims brought by appellant

### werebarred by applicable statutesof limitation. Atthe 

### time the ~istrict Courtmade 

### itsdecision, the submitted record included the complaint, answer, respondent's answers to interrogatories,and an affidavit, filed the day of the hearing, stating that F. ~ick Baker had purchased a quantity of insulation from appellant but was denied access to the goods by respondent. Appellant moved tovacate the court's order on June 8, 1979. However, counsel failed to note the matter for hearing. After receipt of the motion tovacate, respondent served on appellant a notice that the motion was deemed denied pursuant toRule 59, M.R.Civ.P., in that 

### ithad not been noted or heard within ten days of service as required. Summary judgment was entered on December 16, 1980, and Seven Seas appeals. Appellant raises numerous collateral contentions on appeal. The solematter atissue, however, 

### iswhether the DistrictCourt was proper infinding that appellant's 

### claims

arebarred by the statutes of limitation and, therefore, proper ingranting respondent's motion for summary judgment. In determining whether the period of limitation has expired ina given case, 

### it 

### isnecessary to examine two points intime. First, when the did the cause of action which gave 

### rise to the suitaccrue? Second, when was the action commenced? Engine Rebuilders, Inc. v. Seven Seas Import-Expor

### t & Mercantile (1980)

## , Mont. 

## , 615 P.2d 871, 37 St.Rep. 1406. Rule 3, M.R.Civ.P., provides that a civil action 

### is commenced upon the filing of the complaint. In this instance, the suit

### was initiated on August 26, 1978. As towhen the cause of action accrued and the limitationperiod thus started torun, it 

### is necessary to examine the particular basis and theories upon which appellant seeks relief.As a basis for his cause of action, appellant alleges in

### its complaint that respondent took improper control over the insulation stored in

### itswarehouse; sold itwithout authority and then retained the proceeds. In asserting this

cause of action, appellantmakes a 

### claimfor recovery first

on a theory that a constructive trustwas established whereby respondent, as trustee, held the insulation and the proceeds therefrom for the benefit of appellant. Appellant then asserts a second theory of recovery, sounding in tort (conversion), contending thatrespondent sold the insulation atan improperly conducted 

### sale and, thus, 

### is liable for the value of the goods. Appellant finallycontends, as a third claim for relief, that due to the willful and wanton disregard of 

### its rights, it 

### isentitled to exemplary damages. Upon review of appellant's complaint, 

### it 

### is apparent that the alleged improper activity giving 

### rise to appellant's claim of recovery occurred on or prior to the date respondent had the insulation sold, May 29, 1974. Consequently, over four years have passed between the accrual of the cause of action and the commencing of suit. Appellant contends that, in determining when the cause of action accrued, 

### we should not look to the date the insulation

### was sold but to the date appellant made a demand for the return of those goods, July 19, 1978. Appellant basis this argument on an allegation that it

### was without knowledge of the sale until itmade a demand for the return of the insulation. In rejecting appellant's argument, we note thatwhen a court

### ispresented with a motion for summary judgment, 

### it
must rely on the submitted pleadings, depositions, answersto interrogatories and admissions on file, together with any supporting affidavits, informulating 

### its ruling on the motion. Rule 56(c)

## , M.R.Civ.P. The District Court 

### willnot be held inerror on the basis of documents not before 

### it 

### at the 

### timeit renders its decision. Baylor v. Jacobson (1976), 170Mont. 234, 552 P.2d 55. In this instance the allegation of lack of knowledge, demand and then refusal toreturn the goods was not raised inthe complaint, the answer, the interrogatories or in any affidavitproperly before the court atthe 

### time summary judgment was granted. The allegation, therefore, 

### willnot be considered on appeal as

### a basis for reversing the Dis

### trict Court's ruling. Inpassing, 

### we acknowledge that appellant attempts to support this issue on 

### itsmotion tovacate with an affidavit and copy of a "demand" served on respondent. Appellant, however, failed tonote themotion for any consideration or adjudication; further, 

### it has failed todemonstrate that this information was unavailable prior to the District Court's granting of the summary judgment. Upon reviewing the submitted record properly before the Court, even ina lightmost favorable to appellant, 

### we must conclude that appellant's cause of action accrued prior to

or on May 29, 1974, the date of the alleged improper sale. Consequently, four years expired between accrual and commencement of the action. Section 27-2-207, MCA, provides: "Tort actions involving property. Within 2 years 

### is the period prescribed for the commencement of an action for:


## "(2) taking, detaining, or injuring any goods or chattels, including actions for the specific recovery of personal property;"Clearly, appellant's claim sounding intort 

### isbarred by this two-year statuteof limitation. It could be argued that section 27-2-204, MCA (statute of limitation for general tortactions), is applicable. However, this section only extends the limitation to three years, and, thus, appellant's action 

### is stillproperly barred. In regard to appellant's claim of constructive trust, the alleged obligation (thatrespondent held the insulation

orproceeds therefrom intrust) is one implied by law and not founded upon a written instrument. As to such an 

### implied obligation, section 27-2-202 (3)

## , MCA, provides: "Actions based - on contract 

### - or other obligation.



# ...
"(3)The period prescribed for the commencement of an action upon an obligation or liability, other than a contract, account, or promise, not founded upon an instrument inwriting 

### iswithin 3 years. Therefore, appellant's claim under a theory of constructive trust 

### is alsobarred. As to the claim for punitive damages, since the underlying cause of action 

### isbarred, the recovery of exemplary damages 

### isbarred aswell. The decision of the District Court that appellant's action isbarred by applicable statutes of limitation 

### is proper asbased upon the record submitted atthe time of 

### its ruling. The summary judgment 

### is affirmed.We

### concur:

Chief ~uktice 

# -

4

# a&,
/ 

### Justices

This cause was submitted prior toJanuary 5, 1981.