No. 79-38 INTHE SUIJREP.:ECOURL!' OF THE STATE OE' MONTAI\!A 1980

Plaintiff and Respondent.,



### -vsL & B LODGE PPOE TIMBER PRODUCTS, Defendants anci Appellant-s.

Appeal from: 

### District Court.of theEighteentk! Julicial District, In and fcrthe County of Gal-latin, The Honora.bleW. W. Less1ey

## , Judge presiding. Counscl of Recorl:

Bolinger, Higgins 6 Andes, Bozeman, Montana B. A. Polginger ~rgued, Bozeman, MontanE. For Respondent: Ber~, Morgan, Coil & Stckes, Bclzemar:, Montena Gregory 0. Morgan argued, Bozeman, Montana

Filed: 

### _ilk&

## ;* 

## t. I%?'J



### -- 

# -4

-- ClerkMr. Chief Justice Frank 

### I. Haswell delivered the Opinion of the Court. Pl aintiff-respondent Madison Fork Ranch (Ranch) filed a complaint against defendants alleging a breach of contract in timber cutting operations on the Ranch and seeking rescission of the contract and an injunction. The District Court found a breach of contract and issued a permanent injunction prohibiting defendants from cutting any timber on the Ranch, but its findings, conclusions and judgment were silent on the issue of rescission of the contract. Defendant L & B Lodge Pole Timber Products appeals. The Ranch isa dude ranch privatelyowned by a partnership of five nonresident individuals and is located near the town of West Yellowstone. The Ranch isoperated purely for the leisure interests of itsowners although it does accommodate some guests. It is not operated to return a profit. The partnership was formed inthe early 1970's. At that time a fictitious name certificatewas filedwhich listed the original partners. However, since that time, two original partners, Donald Dodge and John Tweedy, have purchased the interest of three of the other original partners. No other partnership ownership changes have occurred. A new fictitious name certificatewas filed prior to trial but after commencement of the action. The owners and Roland Bronder, the Ranch foreman, became concerned about Mountain Pine Beetle infestation of timber on the Ranch inearly 1978. Bronder was authorized to hire a logger at that time. He contacted L & B Lodge Pole Timber Products through Robert H. Smith. L & B Lodge Pole Timber Products is owned and operated by Robert Smith and Lucille Smith and will be referred to as "Smith." The Ranch and Smith entered into an oral contract about June 1, 1978, and executed awritten contract to log the property inAugust, 1978. Donald Dodge stated that the Ranch's purpose inentering into the oral contract was to 

### -2-reduce the fire hazard as well as preserve the aesthetic and future economic value of the property. Dodge also testified that the contract was set at $10 per thousand, well below the market price, to allow Smith to profitably selective-cut the property. The Ranch's purpose inexecuting the written contract was to accommodate Smith inacquiring financing for logging equipment. The logging operation commenced inlate May, 1978, and continued through the summer with Bronder present most of the time. Bronder, insupervising the operation, advised Smith not to cut stands of 

### fir or aspen and told himto leave other specific sections of trees and individual trees for their aesthetic value. Dodge testified that Smith was satisfactorily performing the contract by selective-cutting prior to the execution of the written contract. InJuly, 1978, Smith discussed with Bronder the purchase of a "harvester" to complete the logging operation. A harvester isa large machine which ismaneuvered through the woods felling individual trees and removing the limbs. Smith testified that Bronder thought the harvester was a good idea since he was concerned with the scars left by the caterpillar that Smith was using, and this problemwould supposedly be eliminated by using the rubber-tired harvester. Bronder agreed to present the contract to the partners 

### if Smith would have it drafted. 

### Mr. Smith had his attorney draft the contract and itwas signed by Smith and Margaret Grand, a partner inthe Ranch, on August 1, 1978. The logging operation changed considerably when Smith began using the harvester. The result was that many more trees

were removed or knocked down after the written contract was drafted and signed. This effect isattributed to the character and size of the harvester. The following contract provision isthe center of controversy inthis case: "That the party of the first part agrees to selltothe party of the second part all merchantable timber on said lands which has been or now is infected by the pine beetle, and the party of the second part agrees to cut and remove all of said merchantable timber from said lands on or before 

## , 19 

# .

# . .'I Smith testified that he understood the meaning of "infected merchantable timber" to mean a11 trees susceptible to infestation by the beetle since they would die eventually. He stated that the verbal agreement which predated the written agreement gave himthis interpretation. Pursuant to this interpretation Smith believed he could take a1

### l trees which were

seven inches indiameter or larger at chest height. Smith also testified that Bronder told him that he wanted the fire hazard removed entirely and the trees salvaged that could be salvaged. Smith said itwas agreed that he would take all trees that would be hit by the beetles, although Bronder told him on several occasions not totake certaintrees because of their aesthetic value. As a consequence, Smith testified that he was selectivecuttingdown to seven inch chest high trees and leaving stands of 

### fir and aspen. Bronder did not appear at trial. On September 

### 6, 1978, the Ranch notifiedSmith that they considered the contract terminated as a result of his failure to perform according to itsterms. A complaint was filedSeptember 

### 11, 1978, and a temporary restraining order was issued on October 

### 2, 1978. A show cause hearing was held and on October 10, 1978, the District Court "released and vacated" the temporary restraining order. Smith re-entered the property about October 19, 1978, and logged 15 to25 more acres before December 5, 1978. He was prevented from any further logging of the property inthe spring of 1979, by Roland Bronder. Smith's motions for dismissal and summary judgment based

on the Ranch's failure to file a new fictitious name certificate

were both denied. The trial was heldJune 

### 1, 1979. Several expert witnessestestified as to their interpretation of the contract and the operation conducted by Smith. One of the experts, Robert McKnight, cruised the timber on the Ranch. McKnight has a B.S. degree inscience and forestry with 131k years experience with timber and forestry companies insouthwestern Montana and 

### 25 years experience incruising timber. He determined that there

was an average of 153 trees per acre consisting of 75 merchantable trees per acre, 

### 43 were infected. He defined merchantable

as eight inches indiameter at breast height. He also testified that most of the areas logged by Smith on the Ranch were clearcut and that the market price for a clear-cut operation inthe

summer of 1978 was at least $50 per thousand. Dodge had also testified that after the execution of the written contract, the operation became a clear-cut operation. William Driver, the timber sales and disease control specialist for the Gallatin and Custer Forest, testified, as did McKnight, that the contract was a selective-cut contract on a per tree basis. The District Court entered findings of fact and conclusions of law on June 19, 1979. The court found, inpertinent part: 

### "

# . .. That the purpose for which the plaintiff entered into this agreement was to reduce the fire hazard to the plaintiff's buildings and lands, along with the personnel residing thereon, as well as preserve the aesthetic and future economic values of the property from the pine beetle; "That the defendants have failed and refused to perform certain obligations under the contract inthat they have cut trees which are not merchantable and have cut merchantable trees which are not infected or were not infected by the pine beetle; that the defendants, intheir logging operations, have wasted and destroyed many of the young, green, noninfected trees standing on the property and 

### will, unless otherwise restrained by this Court, continue to waste and destroy the young, green, uninfected trees standing on the property, which trees are of value to the plaintiff for aesthetic and economic purposes." On the basis of the preceding findings, the District Courtconcluded that Smith had breached the contract, and that since the destruction and the threatened future destruction to the standing timber could not be remedied by an action at law, an injunctionwas proper. The judgment and permanent injunctionwas entered on June 28, 1979. The injunction perpetually enjoined Smith from enteringthe Ranch for the purpose of cutting or otherwise destroying any standing timber on the Ranch. The court also granted the Ranch a lien upon all timber cut but not decked on their land. The following issues are raised on appeal: 1. Whether the defendant's acts incutting uninfected merchantable trees and destroying young, green, uninfected (unmerchantable) trees constituted a breach of contract? 2. Whether the injunction isoverbroad? 

### 3. Whether the District Court erred indenying defendant's motions for dismissal and summary judgment which were based on plaintiff's failure to file a new fictitious name certificate priorto filing itscomplaint? 

### 4. Whether the District Court erred ingranting plaintiff



### a lienon the cut, undecked logs? Inaddressing the breach of contract issue, we note that many legal distinctions have been drawn by courts as to the rights of the parties to a contract for the sale of timber. The distinctions are drawn depending on whether the instrument isa contract for sale or a conveyance of real property, whether the contract isoral or written, whether the contract isexecuted or executory, or whether a mere revocable license has been conveyed

or titleto the timber ispassed. Depending on the circumstances, courts have treated timber agreements as either a contract for sale, a lease of the land, an employment contract,



### a license to cut timber or a conveyance passing title to the grantee. 

### 54 

### C.J.S. Logs and Logging

### 99. To date, this Court has declared that an oral or simple contract for the sale oftimber isa mere license revocable at the will of the vendor. Sorensen v. Jacobson (1951), 125 Mont.148, 232 P.2d 332. In Gullicksen v. Shadoan (1950), 124 Mont. 56, 218 P.2d 714, we held that awritten, unrecorded contract for the sale of timber was ineffective to bind a subsequent purchaser of the land who did not have notice. Indicta, it was stated that the presence or absence of notice was irrelevant since the contract was executory and would not prevent a unilateral revocation of the license. Pegg v. Mid-State Development Corp. (1974), 164 Mont. 525, 529 P.2d 1399, expressly overruled this dicta inGullicksen in holding that awritten contract for the sale of timber isenforceable against a subsequent purchaser with notice of the contract. However, the case isdistinguishable from the present

case inthat the contract purported to convey titleto all merchantable timber and no breach of contract was involved. No Montana cases have addressed the issue of breach of contract by harvesting timber which is not the proper subject of the contract. Both parties treat the instrument as a contract for the sale of timber rather than a conveyance of an interest inland. We agree with this approach and proceed accordingly. 

### Attrial appellant devoted much effort to showing that the best management practiceto control the spread of the pine beetle isto remove all susceptible trees. He argues that this establishes a "usage of trade" which isto be given effect in construing the contract under the Uniform Commercia1 Code, section30-2-208, MCA. However, section 30-2-107(1), MCA, establishes that a contract for the sale of timber issubject to the provisions of the UCC only if it isto be "severed by the seller". Thus, this contract isnot subject to the provisions of the UCC and our construction of the agreement isdependent on

common law construction rules. Any language inPegg v. Mid-State Development Corp., supra, which infers that this contract is withinthe provisions of the UCC isoverruled.As we stated inDanielson v. Danielson (1977), 172 Mont. 55, 58, 560 P.2d 893, 894, "It isclear from Montana cases that where the language of a written contract isclear and unambiguous there is nothing for the court to construe; the duty of the court issimply to apply the language as writtento the facts of the case, and decide the case accordingly." The appellant contends that an ambiguity is created inthe contract by the use of the adjective "infected" since it can be construed tomodify the word "lands" or to modify the word "timber." We cannot agree. The sentence inquestion states 

### "

# . . . agrees to sell

# . .

# . all merchantable timber on said lands which has been

or now is infected by the pine beetle.

# .." Timber may be "infected by the pine beetle," however, the pine beetle does not strike and infect land. Thus, we find the language clear and unambiguous; respondent contracted to sell "all merchantable timber

# ..

# . which has been or now isinfected 

### b~ thepine 

### ----- beetle" and appellant contracted to "cut and remove all of said merchantable timber

# . .." (Emphasis added.) Since the language of the contract isclear and unambiguous, the trial court's duty was "simply to apply the language as written to the facts of the case, and decide the case accordingly." Danielson, supra. Inso doing, the District Court found that appellant breached the contract by cutting trees which

were not "merchantable" and merchantable trees which are not infected by the pine beetle. With regard to the standard of review, this Court has repeatedly stated 

### itwill not overturn findings of fact and conclusions of law if supported by substantial evidence and by the law. When reviewing evidence itwill be viewed inthe 

### 1ight most favorable to the prevailing party. Luppold v. Lewis (1977), 172 Mont. 280, 284, 563 P.2d 538, 540-541, and cases cited therein. The record inthe present case reveals that appellant freely admits that he iscutting a11 trees 7" or greater in diameter at chest height regardless of whether the individualtree has been or is infected. There is also substantial testimony and photographic exhibits which establish that the harvester has destroyed many of the small, young, green trees which are not infected nor susceptible to the pine beetle. Two witnesses, an expert and Donald Dodge, also testified that at least90 acres of the Ranch have been clear-cut. On the basis of these facts, when viewed inthe light most favorable to the prevailing party, we find substantial evidence to support the District Court's findings of fact and conclusions of law. Appellant also argues that the District Court's failure to specifically state that the defendant's cutting ofyoung green trees and uninfected merchantable trees was unreasonable supports

a conclusion of no breach of contract. In light of the evidence adduced including appellant's admissions and expert testimony that 90 acres was clear-cut, we find this contentionwithout merit. The unreasonableness of appellant's conduct is necessarily implied inthe District Court's findings and conclusion and issupported by substantial evidence. The trial court's judgment ispresumed correct and this Court will draw every legitimate inference to support that presumption. Rule 52, M.R.Civ.P.; Havre IrrigationCo. v. Majerus (1957), 132 Mont. 410, 414, 318 P.2d 1076, 1078. On the record before us there is substantial evidence to support "unreasonableness" as well as a material breach of contract. Appellant contends that the District Court erred in enjoining all cutting instead of merely enjoining the cutting of timber not included inthe contract. It isargued that the appellant should be allowed to cut the merchantable infected timber on the Ranch even if a breach of contract 

### isfound. It is contended that this case falls withinthe rule that an injunction should be limitedto enjoining the wrong and should not extend to preventing lawful activity under the contract. Kasala v. Kalispell Pee Wee Baseball League (1968), 151 Mont. 109, 

### 439 P.2d 65, iscited as authority for this proposition.We note two general principles of law related to injunctive relief. "An injunction isawrit framed according to the circumstances of the case commanding an act which the court regards as essential tojustice, or restraining an act which it esteems contrary to equity and good conscience." 43 C.J.S. Injunctions92. Ordinarily, injunctive relief isproper only 

### if

an act has been done or isthreatened which will produce irreparable injury to the party asking for such relief, and acts which result ina serious change of, or are destructive to, the property affected either physicallyor inthe character inwhich it has been held or enjoyed, do an irreparable injury. 43 C.J.S. Injunctions928. It is also well-established that the granting of an injunction isa matter of discretion resting inthe DistrictCourt and it will be sustained unless an abuse of discretion is shown. Erie and Mulvihill v. State Hwy. Comm'n (1969), 154 Mont. 150, 461 P.2d 207. The DistrictCourt concluded that an injunctionwas proper after finding that "the standing timber is part of the real property, the destruction of which or the threatened destruction ofwhich, cannot be remedied by an action at law." Inreaching this conclusion the court considered the character and use of the property as well as the conduct of the appellant. The District Court found instrumental the fact that the property's principal value over the last one hundred year period has been "recreational, aesthetic and environmental

# ." The court a1so stated that "the period necessary to mature lodge pole pine is inexcess of sixty (60) years." The threatened future harm isdemonstrated by Smith re-entering the land to cut 15 to25 additional acres after being notifiedthat the Ranch considered him inbreach and the contract terminated. Under these facts we do not find an abuse of discretion. Neither do we find the injunction overbroad. 

### On the basis of appellant's conduct inre-entering the land after a notification of termination, the District Court

was warranted inenjoining all future cuttingto prevent futureirreparable injuryto the Ranch. Appellant strenuously argues on appeal that rescission is not appropriate inthis case under section 28-2-1711, MCA. The trial court concluded that the destruction or threatened destruction to the timber cannot be "remedied by an action at law." Although courts have found rescission at law (as distinguished from rescission inequity) to be an appropriate remedy when confronted by a material breach of a timber sales contract, see Crofoot Lumber v. Thompson (1958), 163 Cal.App.Zd 324, 329 P.2d 302, the area isfar fromwell-settled and has not been addressed by this Court. However we need not address this issue inthe present appeal since the District Court will not be reversed on appeal for accepting the appealing parties legal theories at trial. Appellant next contends that the District Court erred in denying itsmotions to dismiss and for summary judgment which

were based on Montana's fictitious name statutes. Although the 1979 legislature repealed the fictitious name provisions, the following statutes, appearing insection 63-601, R.C.M. 1947 through section 63-603, 

### R.C.M., 1947, were ineffect throughout the lower court proceedings: "63-601. Fictitious name. Every partnership, other than a limited partnership, transacting business inthis state under a fictitious name, or a designation not showing the names of the persons interested as partners insuch business, must filewith the clerk of the county inwhich itsprincipal place of business issituated, a certificate, stating the names i n f u l l of all the members of such partnership and their places of residence, and publish the same once aweek, for four successive weeks, ina newspaper published inthe county, 

### ifthere be one, and 

### if there be none insuch county, then ina newspaper pub1ished inan adjoining county. "63-602. Certificate--when 

### -- tobe filed. The certificate filedwith the clerk, as provided in the preceding section, must be signed by the partners, and acknowledged before some officer authorizedto take acknowledgment of conveyances of real property. Where the partnership is hereafter formed, the certificate must be filed and the publication designated inthat section must be made within one month after the formation of the partnership, orwithin one month from the time designated inthe agreement of itsmembers for the commencement of the p a r t n e r s h i p ; where the partnership has been heretofore formed, the certificate must be filed and the publication made within six months after the passage of this code. Persons doing business partners contrary

### -- totheprovisions

### -- ofthis chapter, - or

### any assigns thereof, shall 

### -- not mai tain

### any action upon oron account of

### any -- contracts made ortransactions had

### intheir 

### ----- artnership name, inany court ofthis state, {ntil they havefirstfiledthecemicatean made thepub1ication herein required. (~mphz 

# -- added. ) "63-603. Change ofmembership--filing 

### -- new certificate. On every change of the members of a partnership, other than a limited partnership, transacting business inthis state under a fictitious name, or a designation which does not show the names of the persons interested as partners in itsbusiness, a new certificate must be filedwith the county clerk, and a new publication made, as required by this chapter, on the formation of such partnership." The Madison Fork Ranch complied with the provisions of the preceding statute in1973 when the partnership was formed. However, prior tothe commencement of this action two original partners purchased the interests of three other original partners. 

### A new certificatewas not filed prior to this suit. The appellant's motions to dismiss and for summary judgment based on noncompliance with these provisions were both denied and the respondent was granted a continuance to comply with the provisions. The new certificatewas filed approximately one month priorto trial. The critical language inthe statutes is

### "

# ... shal1 not maintain any action

# .. . until they have first filedthe certificate and made the publication herein required" insection 63-602, 

### R.C.M. 1947. The cases construing this language have distinguished between "maintain" and "commence." InReillyv. Hatheway (1912), 46 Mont. 1, 11, 125 

### P. 417, this Court construed this section's predecessor as follows: "Without deciding whether the statutory provisions heretofore referred to apply to the plaintiff, it issufficient to hold, on the authority of Carson-Rand Co. v. Stern, 129 Mo. 381, 32 L.R.A. 420, 31 S.W. 772, and Nicholson v. Auburn Gold Min. 

### & M. Co., 6 Cal.App. 547, 92 

### P. 651, that it isnot the righttobegin an 

### ----- action, but the righttomaintainit, thatis withheldx

## the statutefor failureoopfi -with itsterms; and 

### if, before the defense is interEeneplaintiff complies with the statutory provisions, the action may be maintained. The defense isan affirmative one and iswaived unless pleaded inthe answer. (Vaughan v. Kujath, 44 Mont. 484, 120 P. 1121; California S. 

### & 

### L. Society v. Harris, 

### 111 Cal. 133, 43 P. 525.) The appellant alleged that he had complied with the statute, and, while this allegation was not necessary inorder to state a cause of action, it was, nevertheless, denied, and we think the denial was sufficient to raise the issue. But so long as the statutewas complied with by the appellant before the answer was interposed, the action should not abate. The righttomaintainthe action simply sus ended until the statute

### - iscomplied with." Emphasis added.) 

# P--

InCroft v. Bain (1914), 49 Mont. 484, 489, 143 

### P. 960, we said: "The disability imposed by section 5505 for failure to comply with the requirement of section5504 cannot be of avail to the defendant except upon affirmative a1legation and proof. It is inthe nature of matter inabatement. (Reillyv. Hatheway, 46 Mont. 1, 125 

### P. 417; CaliforniaSav. & L. Soc. v. Harris, 

### 111 Cal. 133, 43 P. 525.) The inhibition does not destroy the right of action upon which recovery issought, but merely imposes a disability to maintain the actionthereon until

# - the requiremerit of section 5504 has been complied with." (EmphEis added

# .) -

# - Inconstruing the same restriction "to maintain" an action for noncompliance with the Californiafictitious name statutes, a California Court stated: "An objection to the maintenance of an action on the ground that plaintiff has not complied with the provisions of sections 2466 and 2468 of the Civil Code by filing and publishing the certificate required thereby, isa mere matter of abatement pending the trial, which has the result of suspending the trial until the statute iscomplied with. It isnot jurisdictional. Bryant v. We11 banks, 88 Cal.App. 144, 150, 263 

### P. 332; California Savings & Loan Soc. v. Harris, 

### 111 Cal. 133, 136, 43 P. 525; Ontario State Bank v. Tibbits, 80 Cal. 68, 22 

### P. 66, 

### 1 C.J.S., Abatement and Revival, 991, p. 129. In the authority last cited it issaid: "'The failure of an individual or partnership plaintiff, doing business under an assumed, fictitious, or representative name, to comply with an applicable statute requiring the filing of a prescribed affidavit or certificate, is merely a matter inabatement, until the statute iscomplied with.' "In the Bryant case, supra [88 Cal.App. 144, 150, 263 

### P. 3351, it issaid that it isa sufficient compliance with section 2468 of the Civil Code 

### ifthe certificate isfiled andpublished 'at any time before trial.' The statute inquestion does not prohibit the instituting or commencement of an action for failure tofilethe certificate. It mere1

### v forbids the maintenance of the action 'until tie certificate has been filed and the publication has been made.' Before an action isfinally dismissed on that ground, prior to the trial the plaintiff should be given an opportunity to comply with the statute 

### if it so desires." Kadota FigAss'n v. Case-Swayne Co. (1946), 73 Cal.App.2d 796, 167 P.2d 518, 523. We agree with the distinctiondrawn between "maintenance" and "commencement" inthe previously cited authority. The District Court was not inerror inallowing plaintiffto comply with the fictitious name provisions prior to trial. Appellant's final contention isthat there isno legal authority to support the granting of the lienon the cut undecked logs. The respondent contends that the liengranted isan equitable lienand isappropriate inthis case. The factual basis for the liengranted isSmith's alleged failure to dispose of slash pursuant to the contract and the economic damage caused to the property as a result of the cutting operation. As a result of appellant's allegedly not complying with the slash removal provision, the Ranch will incure expense inobtaining another to remove the slash. The slash removal clause provides that Smith agrees to pile and dispose of the slash insuch manner as to be satisfactory to the State of Montana. Evidence adduced at trial concerning slash disposal included testimony from an inspector for the StateDivisionof Forestry, CurtisTesmer. Tesmer testified that Smith was in compliance with the slash reduction agreement with a few exceptions inSeptember, 1978 (prior toSmith's re-entry to cut 15 to 25 more acres inOctober, 1978). Dodge also testified that the Ranch would incur substantial cost in removing slash not disposed of by Smith. No evidence was submitted on the amount of economic damage suffered by the Ranch as a result of Smith's breach incuttingtrees not conveyed inthe contract, inthe alleged failure to dispose of slash or inthe value of trees cut and not decked. Inaddition, the respondent's pleadings make nomention of a claimfor a lien. The respondent cites American Equitable Assurance Co. v. Newman (1957), 132 Mont. 63, 313 P.2d 1023, and Sorensen v. Jacobson, supra, as authority for the granting of this equitable lien. We find neither case relevant to the present appeal; Newman involved subrogation and Sorensen involved a purchase money lien. A lien ismerely a charge or encumbrance on property which subjects the property to the payment of a claim or debt. The issue of damages was never raised, no evidence was adduced on the amount of damages and the District Court failed to state the amount of the liengranted. Although we recognize that an equitable lienmay be granted under a great variety of circumstances, including breach of contract, there isno basis for such a lienwhere, as here, there isno ascertained debt or claim. The judgment ismodified by vacating the lienprovisions and, as modified, the judgment isaffirmed, costs to respondent.

Chief Justice

We concur:

### Mr. Justice John C. Sheehy concurs in part and dissents in part.

Iconcurwith the rest of the foregoing opinion,but I dissent from that part vacating the equitable lien created by the DistrictCourt. Themajority is in error when it determines that there isno claim or debt here towhich an equitable lienmay reach. It is inconsistent to hold on the one hand thatMadison Fork Ranch isentitled to an injunction because Smith indiscriminately cut logsby clear-cutting irrespective ofwhether the treeswere infectedby the pine beetle, and on the other hand, to deny an equitable lienwhere the felled logs are wrongfully appropriatedby Smith. The doctrine of equitable liens is not limited merely toproperty which is subject to the payment of a claim or debt. Thepower of a District Court to grant an equitable lien is as broad as the reach of equity itself,out of considerations of right and justice, toprotect for the rightful owner property unlawfully appropriated.

"Anequitable lienmay arise independentlyof any express agreement; itmay arise by implication from the conductand dealings of the parties. As the rule is frequently stated, in the absence of an express contract,an equitable lien,based on those maxims which lie at the foundationof equity jurisprudence,may ariseby implication out of general considerations of right and justice,where, as applied to the relations of the parties and the circumstances of their dealings, there is some obligation or duty to be enforced. However, the tendency is to limit rather than extend the doctrine of constructive liens, and, in order that such a lienmay be claimed,either the aid of a court of equity must be requisite to the owner so that he can be compelled to do equity or there must be some element of fraud in the matter as a 

### ground of equitable relief. Such a lienwill notbe implied and enforcedwhere the factsand circumstances present no grounds for equitable relief,and there is an adequate remedy at law, as where theparties themselves have stipulated for a purely legal liability

# . ..

# ".



# .. -- 

### If a courtof equity can tracemoney or property unlawfullyobtained orappropriatedinto any other shape, 

### it

### willintervene tosecure

### it for 

### -- -- -- theowner, by holding 

### it tobe his

# or by giving him lienon 

### it; but such a lien cannot be enforced on o property which has not been enhanced oraugmented by theunlawful appropriation

# . .." 53 C.J.S. 844, 545, 

### Liens, S4(1). 

### (Emphasis added.

### 1

As 

### tothose logs which 

### were rightfully cutby Smith, that 

### isthose 

### treeswhich 

### were infestedby themountain pine beetle, such 

### trees became theproperty of Smith under the 

### termsof thisagreement immediately upon severance thereof. As 

### tothose 

### trees which 

### were wrongfully felledby Smith, those that

### werenot soinfected, there

### was an unlawful appropriation. Those lawfully appropriated and those unlawfully appropriated now appear tobe in

### a singlemass, unidentifiable perhaps, and the situation

### isone ripe forthe equitable power of the DistrictCourt toprotect theproperty of Madison Fork Ranch. In Krusen Land & 

### Timber Co. v. Tampa Suburban Corp. (Fl. 

### 1935), 158 So. 712, where the lumber company received lumber belonging toothers and knowingly sawed and commingled 

### itwith 

### itsown inan unidentifiable

### mass, the lumber company 

### was a trustee - 

### exmaleficio and an equitable liencould be enforced againstthewhole 

### mass of lumber. The Court ingranting injunctive relief was sittingin equity. A 

### court sittinginequity has allpower requisite

torender justice between theparties, particularly ifthe intentand dispositionof one party 

### isnot toperform 

### its contractual obligations. Link v. StateBy & 

### Through Dept. of Fish & Game 

### (1979), 

### -Mont. 

## , 591P.2d 214, 36 

### St.Rep. 355. The majority has hobbled the equity court unnecessarily inpreventing 

### it from giving complete equitable relief. I 

### would affirmintoto.

Justice