No. 83-316 INTHE SUPREMECOURTOF THE STATE OF MONTANA 1984

ARDELL HULL, individuallyand d/b/a A & 

### HTRUCKINGand as P & H TRUCKING;and DELMcALPINE, Plaintiffsand Respondents,

D. IRVINTRANSPORTLTD., abody corporate;and SPENCERGROUP, an unincorporated association consisting of SPENCER CONTRACT HAULING LTD., a body corporate,TROCHUTRUCKING SERVICESLTD., a body corporate, and D. IRVIN TRANSPORTLTD., a body corporate, Defendants, and THE CLARKSON COMPANY LIMITED,and FRUEHAUFTRAILER COMPANYOF CANADALTD., IntervenorsandAppellants.

APPEAL FROM: District Courtof the Eighth Judicial District, Inand for the County of Cascade, TheHonorable JoelRoth,Judgepresiding. COUNSELOF RECORD: ForAppellants: CrowleyLawFirm;Sherry J. Matteucci argued, Billings,Montana (ClarksonCo. Ltd.) Church, Harrison, Johnson & Williams; Michael B. Anderson argued, GreatFalls,Montana (Fruehauf) For Respondent: Jardine,Stephenson,Blewett & Weaver;Jack Lewis argued, GreatFalls,Montana (Hull)

Submitted: June 1911984 Decided: October 23,1984

ClerkMr. .Justice ,John Conway Harrison delivered the Opinion of theCourt.

This case is a priority dispute between Hull 3nd McAlpine, Montana residentswho obtained judgments and then attached certain semi truck trailers and tractors of defendants, and Clarksonand Fruehauf, Canadian corporations which claimed prior security interests in the vehicles. Clarkson and Fruehauf appeal from the order of the Eighth Judicial District Court, Cascade County, granting summary judgment in favor of Hull and McAlpine. The property in question consistsof nine trailersand/or semi trucks. For the sake of simplicitythey willbe referred toasunits 1 through 9 throughout thisopinion. During 1980 and 1981, Hull and McAlpine entered into written agreementswith defendantsD. IrvinTransport, Ltd., (hereinafter Irvin) and Spencer Group (hereinafter Spencer Group). Spencer Group is a Canadian unincorporated association consisting of Spencer Contract Hauling, Ltd., a Canadian corporation, Trochu Trucking Services, Ltd., (Trochu)

## ,a Canadian corporation, D. IrvinTransport, Ltd.,

a Canadian corporation, and other corporations not involved here. Hull and McAlpine arebothMontana residentsand U.S. citizens. Asprovided intheagreements, Hull and McAlpine leased trucks owned by them to Irvin and Spencer Group for the purpose of hauling cargo in and throughout Canada and the listed states. The transportation of cargowas done in thenames of either IrvinorTrochu. Fruehauf is a corporationwhich manufactures trailers for semi trucks. It sold two trailers, units 1and 2, to Spencer Contract Hauling in August of 1981, by means of a"conditional sales contract," which retained title to the trailers in Fruehauf until the total purchase price was paid. The contract was signed and registered with the AlbertaVehicleRegistry. On February 3, 1977, Spencer Group executed a demand debenture to evidence a loan of certain sums from the Canadian Imperial Bank of Commerce (hereinafter the Bank). Under the tems of the debenture, Spencer Contract Hauling granted the Bank a security interest in all of Spencer Contract Hauling's personal property whenever acquired and wherever located. One of the remedies in case of default provided by the debenture is theappointment of a receiver, who isauthorized totakepossessionof and liquidateallof Spencer Contract Hauling's personal property among other powers. Spencer ContractHauling defaulted and on December 29, 1981, theBank appointed Clarksonasreceiver of Spencer ContractHauling inaccordancewith the terms of the demand debenture. Stan Spencer, apparently the president or head of Spencer Group accepted the appointment of Clarkson as receiver. OnDecember 21, 1981, SpencerGroup senta formletter to a11 leased operators, including Hull and McAlpine, notifying them thattheywould notbe paid the amounts owed them under thehauling contractsdue toa lack of available funds. They were also notified that the Bank would be appointing a receiver of the assets and affairsof Spencer Contract Hauling. Nevertheless, fertilizer was loaded by SpencerGroupontounits 1and 2, thePruehauf trailers, and Hull transported the fertilizer from Calgary to Butte. After doing so, Hull pulled the trailers to his home in'Teton County and parked them. McAlpine was in California pulling units 3 and 4 when he received his notice. When he returned toMontana, he parked the units athisresidence in Teton County also. They promptly contacted Spencer Group about being paid, and when told they would not be paid brought the underlying action. The complaint was filed on January 7, 1982. Hull and McAlpine contacted Fruehauf to ascertain the value of the units, and Fruehauf personnel mentioned that Spencer Group owed them money. However, they did notmention any claimed mortgages or security interests in the property. Units 1 through 4 were attached by the sheriff of Teton County on January 7. On January 8, unit5was attachedby the sheriff of Silver Bow County. Units 6, 7 and 8 were attached on January 20 by the sheriff of Cascade County, and on that

same day, unit 9 was attached by the sheriff of Missoula County. A11 nine units were attached pursuant towrits of attachment issued out of the District Court of the Eighth Judicial District for Cascade County. All are registered in Alberta, Canada, and have either a rated capacity or a load carrying axle of atleast 10,000 pounds. The Alberta registrations name Irvin as the owner of all units except unit 5, which is registered toTrochu. After filing the complaint, a copy of it and the

summons were served on Charles Irvin in Toole County as "Director of D. IrvinTransport, Ltd." and as "Associate of Spencer Group." On January 27, 1982, Clarkson filed a motion to intervene as defendant or to substitute it in place of Spencer Contract Hauling. On the same day it also filed a motion to quash the writs of attachment. Themotions were denied for failure of Clarkson toplead a claim

or defense as required by rule 24(c), nl.R.Civ.P. Having failed to appear and plead, defaults were entered against the defendants on January 29, 1982. Hull recovered a judgment in the amount of $74,811.51 and McAlpine recovered

a judgment in the amount 

### of $101,176.13. On February 

### 23, 1982, Clarkson again moved to intervene and quash the attachment. Fruehauf moved to intervene on March 4, 1982. The basis of Clarkson's motion

was that Spencer Contract Hauling had no equity in the attached vehicles, that the vehicles were in the control of Spencer Contract Hauling, not Irvin or Trochu, and as such its appointment as receiver gave it a claim to the vehicles prior in time to Hull's and McAlpinels. Clarkson also contends that fiveof thevehicles are encumbered by aprior security interest held by Commerce Leasing and Bow-llac Leasing, by virture of their having leased the vehicles to Spencer Contract Hauling. Both leasing companies have appointed Clarkson as their agent forpurposes of this case. The basis of Fruehauf's motion was that it had title to the two trailers, units 1 and 2, pursuant to the conditional sales contract. Both Clarkson and Fruehauf were allowed to intervene. Neither Fruehauf,Clarkson or the Bank has caused any lien or encumbrance on the vehicles to be filed in Montana. The Fruehauf conditional sales contractcovering units 1 and 2was registered with theAlberta Office ofVehicle Registry

on September 8, 1981. Under Alberta law, certificates of title are notgiven,provided or required onmotor vehicles. TheMotor Vehicles Division registers the owners ofvehiclesoperating out of Alberta and issues vehicle registrations. A different office,the Office of Vehicle Registry, Personal PropertyRegistration Branch,maintains the records of liens and encumbrances onmotor vehicles operating out of Alberta. Liens and encumbrances are to be filed in that office to be perfected. Hull, McAlpine, Clarkson an3 Fruehauf all moved for summary judgment, claiming that their respective encumbrances or attachments, had priority over the other parties'. After the issues were briefed and argued the District Court ruled in favor of Hull and McAlpine. An extensive memorandum was filed in support of this ruling, where the District Court advanced several grounds which it felt either individuallyor alternativelywere sufficient to require such a result. These alternative grounds include the court's reading of Montana public policy, and several Montana and federal statutory provisions. The conclusion reached was that Clarkson and Fruehauf had no right, title

or interest in the subject vehicles superior to the dttachment of Hull and McAlpine. Clarkson and Fruehauf appeal this ruling. Of the numerous issues raised by Clarkson and Fruehauf, only the following need 

### by addressed in this opinion: (1)Did the District Court acquire jurisdiction over jefendants 

### D. Irvin Transport, Ltd., the "Spencer Group," Spencer Contract Hauling,Ltd., or any other named defendant by service upon Charles Irvin as "Director of D. Irvin Transport,Ltd." and "associateof Spencer Group?" (2) Were the writs of attachment valid and properlyissued and enforced by the District Court? 

### (3) If jurisdiction was properly invoked, did the District Court arr in concluding that no genuine issues of material fact existed whichwould preclude an order granting Yull and McAlpinelsmotion for summary judgment? Appellants first attack the underlying judgment against Irvin, Trochu, Spencer Contract Hauling and Spencer Group. They contend that Hull and PlcAlpine have not proven the legal status of the above entities, and absent such proof, service on Charles Irvin as "Director of D. Irvin Transport, Ltd." and "associate of Spencer Group" is insufficient to give the District Court jurisdiction. However,Hull and McAlpine correctly argue that questions of defective service of process may be raised only by the one

01-1 whom attempted service was made. In Re Roberts' Estate (1936), 102 blont. 240, 58 P.2d 

### 495. This rule is equally applicable to parties and intervenors in a lawsuit. See 

### 72 C.J.S. Process, section 106. Therefore appellants may not attack the service on Charles Irvin and the issue is not properly before the Court. The same rule applies to appellants' objections to the issuance of the writs of attachment. Defects in the issuance of the writsmay only 

### be raised and objected to by the defendants in an attachment proceeding. Section 27-18-711, MCA and Patch v. Stewart (1927), 78 Mont. 192, 253 

### P. 254. A third party is entitled to assert its interest in the attached property as appellants were allowed to do in this case. However, not every party may attack defects in the issuance of thewrits, only the defendant in the action. Again this issue is not properly before the

### Court.Appellants next contend there were several questions of material fact which were either not addressed by the trial court or were improperly decided on respondents' motions for summary judgment. We agree. Summary judgment, "[Wlas not intended nor can it be used as a substitute for existing methods in the trial of issues of fact. 

# . . I' Kober and Kyris v. Billings Deaconess Hospital (1966), 148 Mont. 117 at 122, 417 P.2d 476 at 479. The purpose of a 

### motion for summary judgment is to determine whether any issues of material fact exist, and whether the moving party is entitled to judgment as 

### a matter of law. Rule 56(c) M.R.Civ.P., and Cereck v. Albertson's, Inc. (1981), 195 Mont. 409,637P.2d 509. 

### There are several important unanswered questions which remain in this case, especially concerning the validity of the security interests held by the Canadian creditors. Though Hull and McAlpine did not rest their case on any supposed failure of the security interests to attach, the trial court's memorandum implied such a possibility and it obviously weighed on the decision below. The trial court also decided several issues of fact,which is improper on a motion for summary judgment. The trial court found that the "Presumption that Irvin and Trochu were [the] owners of units 3 

### through 9 

### [is]not overcome by the evidence." This is obviously an issuewhich isproperly left to the trier of fact. The court also did not ever address Fruehauf's claim of 

### ownership concerning units 1and 2. 

### In short,numerous issues of fact remain whichmust be resolved and applied to the appropriate law. The above isby no means a complete list of the outstanding questions of fact. Counsel for both parties and theDistrictCourt Judge

are properly left the task of framing the issues, as the important facts are not completely before this Court, but remain tobe uncovered. Without sufficient factsbefore us, it would be unwise to risk misguiding the lower court and counsel by attempting to list all remaining material issues of fact. Lastly, we note that the parties requested clarification of Montana law applied here by the trial court. Itwould be premature for 

### us to advise the parties and the lower court on possible application of the law when the case is not completely before us. When all the pertinent facts are known, the District Court is the forum where initialapplicationof the law should be made. Reversed and remanded for further proceedings as outlined inthisopinion.

We concur: 

# V ?444 

# .aQ&Do

Chief Justice

### -

Justices

### I dissent from the remand. Inmy opinion the majority has strained to find factual issues. This case appears ripe for ruling upon the legal questions. Themajority states: "The trial court found that the 'presumption that Irvin and Trochu were [the] owners of units 3 

### through 9 

### [is]not overcomeby the evidence.' This is obviously an issuewhich isproperly left to the trier of fact." The trial court's memorandum in support of its 

### summary judgment specifically states that any factual issue existing between the presumption and other evidencewas not necessary to the summary judgment and was not a. 

### question of fact resolvedby the court. In my opinion we should decide the legal questions in this case. Since the case is being remanded for determination of factual issues I hesitate to make 

### a determination on the legal questions. The more propitious

course is reargued. reserve ruling until the case returns and is