No. 12103 IN THE SUPREME COURT OF THE STATE OF MONTANA 1972

JAMES 

### H. CLAVER, Plaintiff and Respondent,

VS

# . BYRON N. ROSENQUIST and KATIE ROSENQUIST, Defendants and Appellants.

Appeal from: District Court of the Tenth Judicial District Honorable LeRoy L. McKinnon, Judge presiding. Counsel of Record: For Appellant: Robert L. Johnson argued, Lewistown, Montana. For Respondent: Peter L. Rapkoch, Lewistown, Montana. B. Miles Larson argued, Stanford, Montana.

Submitted: May 17, 1972 Decided: 

### JUL

### 2

## 11972Mr. Justice Frank I. Haswell delivered the Opinion of the Court. In a controversy involving the saleof gravel under a written contract, the district court of Fergus County, the Honorable LeRoy L. McKinnon, districtjudge, presiding without ajury, granted plaintiff a permanent injunction restraining the defendantsfrom interfering in any way with plaintiff's access, control and disposition of reject gravel stored

on defendants' land; from interferingwith plaintiff

### 'strade or business of selling this reject gravel during the term of the contract; and awarded plaintiff nominal damages of $100. Following denial of defendants

### ' motion to amend the findings of fact, conclusions of law and judgment defendants

now appeal from the final judgment. The underlying facts of 

### this matter may be summarized. In the fall of 1968, defendants Byron N. Rosenquist and his elderlymother Katie Rosenowned quist,jointlylland near Stanford, Montana containing gravel deposits. In November, 1968plaintiff James H. Claver entered into a contract with the Rosenquists as follows: "THIS AGREEMENT made this 19day of November, 1968, between Byron N. Rosenquist and Katie Rosenquist of Stanford, Montana, herein called the sellers

### ,and James H. Claver of Stanford, Montana, herein called the 

### purchaser; "For the consideration hereinafter setforth, the sellersdo hereby agree to sell to the purchaser all gravel and sand, required for any Great Northern Railway gravel bid, whether bid direct or indirectly by said purchaser, located in and on the following described land in the County of Judith Basin, State of Montana, described as foll

### ows: "From the pit of the said sellers next 

### to the seller's feed yard on the Southern edge of the Town of Stanford, in Section 16, Township 16, Range 12, "for the price of sixcents (6t)per cubic yard. The purchaser shall have full rights of ingress and egress in, on, over and across and through the above described land for the purpose of mining, 

### storing and removing the sand and gravel purchased hereunder. The sellers agree that their livestock shall 

### notrun atlarge on said premises during the mining and storing operations."The purchaser shall have the right toconstruct any and a11 roadways asmay be reasonably necessary or convenient to themining, storing and removing of the sand and gravel pur- chased hereunder. Further, the purchaser shall have the right to stockpileon any ground adjacent to said pit, all of the reject sand and gravel, and shall have access to said stockpilefora period of five (5)years. "Purchaser shall use all possible care and diligence and shall conduct his operations in such a manner as not to cause undo damage to the above described land. "Upon the termination of operations under this agreement, the surface of the ground appurtenant to the gravel pit shall be smooth and restored by the purchaser to as near the present condition as possible and any stripping material shall be placed back into the pit. "Itisfurther agreed between the parties hereto that the purchaser shall have the exclusive right tothe sand and gravel from said pit in futureyears atthe price herein agreed upon for so long as the said purchaser shall comply with the terms of this Contract. "This agreement shall be binding upon-theheirs, executors, administrators, and assigns of the parties hereto. "/s/ B. N. Rosenquist "/s/ Katie Rosenquist 

### "/s/James H. Claver" Thereafter plaintiff contracted withZook Brothers Construction Company, who had a contract to supply gravel to the Great Northern Railway, to use gravel from the Rosenquist land under the contract that plaintiff had with the Rosenquists. Plaintiff received a down payment of $2,500 from Zook under his contract with them and paid the Rosenquists $1,200 down on his contract with them, all in 1968. In March, 1969,the Zook Brothers Construction Company moved onto defendants' property and began excavating and processing gravel for the Great Northern Railway Company. By the end of May, 1969, Zook had completed hisjob of furnishing gravel to the Great Northern and had taken his crusher off of defendants' property; atthis time a11gravel had been delivered to the Great Northern. According to Zook's figures they had delivered 100,000 cubic yards of gravel to the Great Northern, but according to the Great Northern Zook had furnished them only 86,625 cubicyards; inany event whatever the volume was itwas sufficientto satisfy the Railroad's requirements. Zook Brothers remitted a total of $11,261.25 toplaintiff for86,625 cubic yards of gravel for the Great Northern. This includes the $2,500 down payment in 1968, $5,950 paid in June 1969, and $2,811.25 withno payment date specified. As payments

came into plaintiff from Zook, plaintiff made corresponding payments at6jt per cubicyard todefendants Rosenquist. There was no rejection of payments by Rosenquists on gravel furnished the Great Northern. However, a controversy arose over saleby plaintiff tothe general public of reject gravel piled on Rosenquists' land. This reject gravel was

a by-product of producing dimensional gravel tomeet the Great Northern Railway's requirements. Plaintiff began making sales tothe pub1icof 

### this reject gravel. About May 2, 1969, defendant Byron Rosenquist contacted plaintiff and demanded payment fora11amounts outstanding, contending that nothing had been paid him by plaintiff since the preceding December while nearly 300,000 cubicyards of gravel had been taken from defendants' land. On May 5, 1969, plaintiff did go to see defendant but no offer of payment

or settlementwas made atthat time. Plaintiff contended that the entire reject pile of gravel was his by virtue of the agreement heretofore set forth and that he had the right to sell the reject and remit 6$ per cubic yard to defendants. Defendant Byron Rosenquist thereafter on occasion attempted to and did personally stop further removal of reject gravel from his property by plaintiff. 

### On May 8, 1969, plaintiff tendered tothe defendants a check for $353.70 for reject gravel

### ,which check was refused by defendants. Subsequently plaintiff purchased various pieces of equipment such

as a loader, a dump truck and a pickup inorder to sell gravel tothe general public. He also began negotiating with a ready-mix firm inGreat Falls tobring water onto the defendants

### ' land to setup a washing plant but the deal never materialized. On June 4, 1969, defendant Rosenquist published a notice inthe JudithBasin Press disclaiming any agency relationship with plaintiff, and began calling some of plaintiff's customers telling them, ineffect, that plaintiff had no right to sell the gravel. Defendant Rosenquist also attempted to dissuade them from paying plaintiff for gravel previously delivered. On June 24, 1969, plaintiff instituted the instant 

### suit containing three claims: (1) a claim for a permanent injunction against interference by Rosenquist, together with reasonable attorney's fees for securing the same; (2) a claim fordamages inthe amount of $1,760.11 

### ,resulting from alleged malicious and oppressive conduct by Rosenquist which induced thirdparty purchasers 

### to refuse delivery and payment for gravel furnished by Claver to them; (3) a claim for punitive damages of $10,000 for alleged malicious and oppressive interference by defendant Byron Rosenquist with Claver's gravel business. On the basis of the verified complaint the districtcourt issued a temporary restraining order prohibiting defendants from interferingwith plaintiff's gravel business and from dealing with or disposing of the reject gravel. Subsequently defendants

### ' answer and counterclaim was fi1ed, a hearing was held, and the districtcourt granted an injunction pendente lite in favor of plaintiff and against defendants. Thereafter defendants fi1 ed their amended answer and counterclaim. Defendants answer contained fivedefenses: (1) failure to state a claim; (2) a general denial of everything other than the written contract; (3) that plaintiff was not in any event entitled 

### to attorney's fees; (4) failure of performance by plaintiff, consisting of nonpayment by him for gravel delivered to the Great Northern Railway and failure to level the pit

after completion of the gravel operation; (5) that plaintiff was not entitled to exemplary damages inany event as his claims arose out of breach of a contract obligation. In addition defendants f i1 ed three counterclaims: (1) fai1 ure ofthe plaintiff tofurnish an accounting of sales tothe public afterdemand by defendants; (2)failure of the plaintiff 

### topay defendants the balance due fordelivery of gravel to the Great Northern Railway Company in the amount of $2,100 with interest; (3) failureof plaintiff to restore the land to

### itsoriginal condition with accrued damages of $2,500. 

### The case came 

### on fortrial commencing July 30, 1970, and afterall testimony and evidence was submitted the districtcourt granted 

### the parties additional time tofilebriefs and motions resulting insubmission of the

case fordecision about February 1, 1971. The districtcourt entered 

### itsfindings of fact, conclusions of law and judgment on March 9, 1971. In substance the court construed the contractas follows: "That the plaintiff should open and develop a gravel pit on defendants' land; that the overburden be stripped off and stored; that the plaintiff should dig, process, and supply the gravel needed by the Great Northern Railway Company, and storethe reject produced on the defendants' land; that the plaintiff should restore the overburden to the pitarea, and leave itas nearly as possible as smooth as itoriginallywas; that during this time the defendants' 1

ivestock would not be permitted on the pitarea; that thereafter for a period of fiveyears the plaintiff was tohave access tothe reject pile for the purpose of selling the said reject; that the defendants were to receive .06f per cubicyard of gravel sold for both specification and reject gravel

# ". The court also found that the plaintiff was entitled toatleast nominal damages and entitled toan order restraining defendantsfrom further interferencewith his rights under the contract. Judgment was entered accordingly. Following denial of defendants' motion to amend the findings, defendants appeal from the final judgment. Defendants raise three issues forreview upon appeal which can be summarized in thismanner: 1. Isplaintiff entitled to injunctive relief against defendants? 2. Did the districtcourt errinfailing togrant defendants' judgment formoney due them under the contract?3. Did the districtcourt errindenying defendants' motion for leave 

### toamend their pleadings to conform to the evidence. On the firstissue, defendants contend that the plaintiff was not entitled to injunctive relief because plaintiff was in default on his payments under the contract and under such circumstances defendants were entitled to employ self-help to ha1

### t further removal of the gravel until a reckoning was made forthe gravel already removed. We find no error in the districtcourt's finding with respect to the terms of the contract. Plaintiff was clearly entitled to sell the reject gravel toothers atthe contract price. Otherwise the provision in the contract that the purchaser shall have access to the stockpile of reject sand and gravel for a period of 5years, and that he shall have the exclusive right to the sand and gravel from the pit in futureyears would be meaningless. Section 13-707, R.C.M. 1947 provides: "Effect tobe given to every part of contract. The whole of a contract is tobe taken together, so as to give effect toevery part, if reasonably practicable, each clause helping to interpret the other." The only possible meaning of the quoted provisions of the contract is that plaintiff ha&the right to sell the reject gravel which was a by-product of the Great Northern Railway gravel bid. A great deal of argument by counsel was directed atwhen payment was due under a contractwhich was silent as to time of payment. This isa 

### spurious issue under the facts of this case. Insofar as the dimensional gravel sold to the Great Northern Railway Company isconcerned, the record shows that atthe time of trial payment by the plaintiff to the defendants for 86,625 cubic yards of gravel had been made; that defendant atno time objected to payment by plaintiff for this dimensional gravel aswas actuallymade; that the defendants were satisfied with the payments made for the Great Northern gravel excepting for the 13,375 cubic yards about which 

### a dispute existed between the Great Northern Railway and Zook Brothers. Here there isno substantialevidence as tothe amount actually delivered, nor any resolution of whether ~ookk delivery figures of 100,000 cubic Jl&d$orthe Great Northern'sfigures of 86,625 cubic yards were correct. Under such circumstances, there is a failure of proof that anything isowed by Claver to the Rosenquists for the saleof the dimensional gravel tothe Great Northern Railway Company. Insofar as gravel salesfrom the reject pile areconcerned, the tender by plaintiff to defendants of a cashier's check for $353.70 representing payment for reject gravel sold was refused by defendants. Counsel for defendants on oral argument contended that thereason they didn't accept the tender of May 8was for fear of estoppel against theircontention that they didn't have towait for payment until plaintiff sold the gravel from the reject pile. Whatever the reason may have been, the tender of payment

was infactrejected pending determination of this controversy, excusing plaintiff from further tenders on sales of reject gravel. Section 49-124, R.C.M. 1947 provides that the law does not require idle acts. 

### As applied to tenders, see Sherlock v. Vinson, 90 Mont. 235, 1

### P.2d 71

# . For the foregoing reasons plaintiff was not indefault of payments due the Rosenquists under his contractwith them and accordingly isnot precluded from securing injunctive re1ief here. Directing 

### our attention to the second issue forreview, we hold that the district court should have entered findings of fact, conclusions of 1

aw, and judgment determining the issues raised by defendants'counterclaims. These counterclaims include: (1) a demand foran accounting; (2) a claimed balance of $2,100 and interest owing defendants fordimensional gravel delivered to the Great Northern Railway; and (3) damages of $2,500 forfailure of Claver to restore the land of defendants to its original condition after the digging and crushing of the gravel. No findings, one way or the other,

were entered by the districtcourt on these counterclaims, and no mention was made of any of the counterclaims inthe districtcourt'sjudgment. Wehold that the district court should have made findings concerning these issues and enteredjudgment accordingly

# . The third issue forreview concerns whether the districtcourt committed error innot allowing the defendants to amend their answer and counterclaim to conform 

### tothe evidence pursuant to Rule 15(b),M.R.Civ.P. Defendants' motion 

### toamend requests permission to insert a counterclaim to the effect that inaddition to the 100,000 cubicyards of dimensional gravel that was delivered to the Great Northern Railway Company from defendants' property, an additional 400,000 cubic yards of rejectwas severed from defendants

### ' lands; that inthe event the reject became the property of the plaintiff upon severance from the defendants'1 ands, defendants are entitled to the sum of 6$ per cubicyard, or a total of $24,000 with interest. Suffice itto say that there is simply no substantial, credible basis in the evidence to support such a claim. Accordingly the district court correctly denied defendants motion to amend. In summary then, we affirm thejudgment of the districtcourt heretoforeentered, but remand this cause tothe districtcourt for entry of findings of fact, conclusions of 1 aw and judgment granting defendants an accounting and disposing of the balance of defendants

### ' counterclaims.

Associate Justice



# wAssociate Justices -9-

### Mr. Justice Wesley Castles dissenting: I dissent. The districtcourt and themajority of this 

### Court have misconstrued the contract under the facts here. If as plaintiff, the purchaser, claims, he has a right to sell the reject gravel ;then he must pay for itatthe agreed rate, 

### when itwas produced--not when and if he

ever sells it. The proof isclear that the seller produced 100,000 yards of gravel for the Great Northern contract. This amount ishis own figure. Whether

a dispute between Zook Brothers and Great Northern exists as to itsdelivery should have no bearing here. Thus, no injunction should have issued as plaintiff was in default of payments due. The majority opinion does, however, grant defendants an accounting with which I agree. The accounting should allow payment tothe defendant of the amount due fordelivery of gravel to Great Northern. Itshould also allow in

### its resolution of the counterclaim a finding that plaintiff did not restore the land to 

### its original condition; and that thus there was a breach of the contract. This latter finding would make the injunction issued improper. Under the circumstances here, Claver, the purchaser,had his own attorney draw the contract. Ambiguities should be interpreted against him. Additionally, itappeared attrial that the purchaser was clearly impeached inhis testimony by prior inconsistent statements made on depositions, and his testimony should 

### nothave been accepted. Itsimplywas not credible. The purchaser removed the gravel from its natural state, produced it, and isobligated to pay for itatthe agreed pricewhether he sold itor stored it. I would reverse thejudgment and directfurther proceedings inaccounting to determine the amounts owing by plaintiff and the damages, if any, for failure to live up tothe terms of the contract.

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