No. 85-405 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

H. WALTER ROSE and RICHARD H. 

ROSE, 

Plaintiffs and Appellants, 

LARRY E. MYERS and MICHAEL A. 

SCHAFER, Sheriff of Yellowstone 

County, Montana 

Defendants and Respondents. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Diane G. Barz, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Robert E. La Fountain argued, Billings, Montana 

For Respondent: 

Hon. Mike Greely, Attorney General, Helena, Montana 

Harold Hanser, County Attorney, Billings, Montana 

Charles A. Bradley argued, Deputy County Atty. 

Larry Myers, pro set Billings, Montana 

Filed: 

Submitted: July 24, 1986 

Decided: August 21, 1986 

e da 

Clerk 
Mr. Chief Justice J. A. Turnage delivered the Opinion of the 

Court. 

Appellants, H. Rose and R. Rose, brought an action in 

the Yellowstone County District Court seeking to declare a 

sheriff's sale of appellants' horses invalid as held under 

the agisters' lien statutes, and attempting to nullify the 

certificate of sale. The District Court found that the sale 

was valid, that the appellants were not denied their due 

process by the manner of the notice and sale, and that the 

remaining horses be returned to appellants upon their posting 

a $30,000 bond pending resolution of the underlying contract 

dispute. From this order the Roses appeal. 

We affirm the District Court in this case because the 

appellant had actual notice of the sale. 

Appellants raise the following issues on appeal: 

1. Whether the sale should have been declared invalid 

as unconstitutional for failure to provide for notice and an 

opportunity to be heard prior to deprivation of property? 

2. Whether the District Court erred in holding that 

the notice provisions were complied with in this case? 

3. Whether the court erred in failing to declare that 

the sale was void or voidable? 

4. Whether the court erred in using faulty figures in 

taking judicial notice that the parties1 contract price was 

too low to include feeding, and in applying that decision to 

justify the court's order? 

This dispute arose from an oral contract entered into 

in April 1984. Myers agreed to care for the Roses' horses at 

a cost of $12 per head per month. The parties dispute whether Myers was responsible for feeding the horses or merely 

pasturing them. On November 30, 1984, Myers sent notice to 

the Roses that an agisterls lien sale would take place in 
December. Money was paid to Myers and the sale was not held. 

Over the course of the winter, Myers found it necessary to 

feed the horses at his own expense as the pasture would not 

support the horses in the winter. Myers contends the agreement was for pasturing only, while the Roses contend it was 

for the care and feeding of the horses. 

On March 1, 1985, Myers again caused to be issued from 

the Yellowstone County sheriff's office, a notice of an 

agister's lien sale scheduled for March 11, 1985. The notice 

was postmarked March 1, 1985, and notices were posted in 

Yellowstone County. The sale was held March 11, 1985. The 

Roses contend they did not receive the notice until March 12, 

1985. Myers stated he informed the Roses of the sale by 

telephone on March 2, and 3, 1985. 

At the sale, 55 of 129 horses were sold for $6,830 

which was then applied by the sheriff to the outstanding 

bill. The Roses claim the horses' value was far in excess of 

$6,830, but that none of the horses were sold as registered 

and most were sold by lots or in gross. 

On March 20, 1985, the Roses filed their petition for 

declaratory relief, and to set aside the sale. Following a 

hearing before Judge Barz, the District Court held that the 

sale was valid and the Roses were not denied their due process. The Roses appeal that order. 

Appellants' horses were sold pursua-nt to the agisters' 

lien statutes, § 71-3-1201, MCA, et seq. Section 71-3-1201, 

MCA, states: 

(1) If there is an express or implied 

contract for keeping, feeding, herding, 

pasturing, or ranching stock, a ranchman, farmer, agister, herder, hotelkeeper, livery, or stablekeeper to whom 

any horses, mules, cattle, sheep, hogs, 

or other stock are entrusted has a lien 

upon such stock for the a.mount due for 

keeping, feeding, herding, pasturing, or 
ranching the stock and may retain possession thereof until the sum due is 

paid. 

Enforcement of the lien is found at § 71-3-1203, MCA. 

That statute says: 

If payment for such work, labor, feed, 

or services or material furnished is not 

made within 30 days after the performance or furnishing of the same, the 

person entitled to a lien under the 

provisions of this section may enforce 

said lien in the following manner: 

(1) He shall deliver to the sheriff or 

a constable of the county in which the 

property is located a statement of the 

amount of his claim against said property, a description of the property, and 

the name of the owner thereof or of the 

person at whose request the work, labor, 

or services were performed or the materials furnished. 

(2) Upon receipt of such statement, the 

sheriff or constable shall proceed to 

advertise and sell at public auction so 

much of the property covered by said 

lien as will satisfy same. 

(3) Such sale shall be advertised, 

conducted, and held in the same manner 

as provided by law for the sale of 

mortgaged personal property by sheriffs. 

Such notice shall be given for not less 

than 5 or more than 10 days prior to the 

date of sale. 

(4) The proceeds of the sale shall be 

applied by the sheriff to the discharge 

of the lien and the cost of the proceedings in selling the property and enforcing the lien, and the remainder, if any, 

or such part as is required to discharge 

the claims, shall be turned over by the 

sheriff to the holders, in the order of 

their precedence, of the chattel mortgages or other lien claimants of record 

against said property, and the balance 

of the proceeds shall be turned over to 

the owner of the property. 

(5) However, before making seizure of 

any property under the provisions of 

this section, the sheriff may require an 

indemnity bond from the lienor in [sic] 

not to exceed double the amount of the 

claim against said property, said bond 

and the surety or sureties thereon to be 

approved by said sheriff. 
Our decision in this case is arrived at on other than 

constitutional grounds. We find it unnecessary to decide 

whether § 71-3-1203, MCA, is constitutional and therefore do 

not consider appellants' first issue. 

The attention of the Montana Legislature is respectfully directed to the due process provisions of Article 11, 

Section 17, of the Montana Constitution, the Fourteenth 

Amendment of the Constitution of the United States and their 

application to the notice provisions of 5 71-3-1203, MCA. 

The agisters' lien statute was first enacted in 1895 

and is an important part of our commercial law, serving as a 

practical matter both the interest of debtors and creditors. 

If in a future case this statute was found to be unconstitutional, it would invite chaos and confusion in this area of 

law. 

Appellants' second issue is whether the District Court 

erred in holding that the notice requirements were met in 

this case. Appellants argue that the notices of the sale 

were untimely and deficient, and that the District Court 

incorrectly interpreted the statutes in regard to notice. 

The Roses claim the notice was untimely as they did not 

receive notice until one day after the sale. The District 

Court found that two notices were mailed to the Roses on 

March 1, 1985, 10 days before the sale. In addition, the 

Roses received notice in the form of two telephone calls from 

Myers on March 2, and 3, 1985. The District Court correctly 

concluded that the Roses received timely notice. 

Appellants also claim the notices were deficient in 

that the notice failed to adequately describe the location of 

the sale or the property to be sold. The notice stated that 

the sale was to be held at "10:OO o'clock a.m. 3% miles SW of 

Laurel." The notice described the property for sale as "10 
mix horse colts, 25 mix mares, 17 mix colts, 1 gray stud, 1 

sorrel stud, 1 chestnut stud." 

The description of the horses is satisfactory. The 

notice described the horses by number, sex, and color. 

Appellants' contention that the notice should have described 

what mix the horses were as well as any special breeding or 

other special characteristics of the horses is not correct. 

The notice description was sufficient to alert the public to 

the nature of the sale and the property to be sold. There is 

no need for the kind of detailed description advocated by the 

appellants. 

Further, appellants failed to raise the issue of the 

adequacy of the sale location description during the trial 

below. Since appellants failed to raise the issue below, we 

will not address the question on appeal. 

The Roses also argue that the District Court incorrectly interpreted the statutes in regard to notice. Section 

71-3-1203 (3), MCA, states: 

Such sale shall be advertised, conducted, and held in the same manner as 

provided by law for the sale of mortgaged personal property by sheriffs. 

Such notice shall be given for not less 

than 5 or more than 10 days prior to the 

date of sale. 

The District Court concluded that the notice "must be reasonably calculated to reach the owners of the livestock." We 

agree with the District Court's conclusion that the method of 

notice was reasonable, and that the Roses received notice of 

the sale. 

Appellants' third issue is whether the District Court 

erred in failing to declare the sale void or voidable. Both 

sides agree that for a sale to be valid, the seller, acting 

in good faith, must substantially comply with the notice 

requirements of the power of sale, and the resultant sale 
must be a fair one. As discussed above, the notice requirements were substantially complied with in this case. Further, we hold that the resultant sale was fair. 

The District Court applied the standard of commercial 

reasonableness to judge the sale. Appellants argue that the 

sale was not commercially reasonable because the horses were 

sold in lots for far less than their value. The District 

Court answered that: 

The Plaintiffs have not presented any 

evidence that this [sale in lots] is not 

reasonable. Deputy Sheriff Schmaing, on 

the other hand, testified that he has 

conducted thousands of sales and that he 

often sells horses in this manner. 

Further, he testified that he was willing to sell the horses individually 

should any bidder so request. This 

method was not commercially 

unreasonable. 

Although this sale is not governed by the Uniform 

Commercial Code, that Code's discussion of commercial reasonableness is helpful. Section 30-9-507(2), MCA, states: 

The fact that a better price could have 

been obtained by a sale at a different 

time or in a different method from that 

selected by the secured party is not of 

itself sufficient to establish that the 

sale was not made in a commercially 

reasonable manner. If the secured party 

either sells the collateral in the usual 

manner in any recognized market therefor 

or if he sells at the price current in 

such market at the time of his sale or 

if he has otherwise sold in conformity 

with reasonable commercial practices 

among dealers in the type of property 

sold he has sold in a commercially 

reasonable manner. . . The above authority supports the District Court's 

decision. Although the appellants claim the horses were 

worth far more than the selling price, that alone is insufficient to render the sale unreasonable. Likewise, the fact 

that the horses were sold by a method different from that 

suggested by appellants (in lots as opposed to individually) 
does not render the sale unreasonable. The District Court 

correctly decided that the sale was commercially reasonable, 

and we will not reverse the District Court's decision. 

The final issue raised by appellants is whether the 

District Court erred in using faulty figures in taking judicial notice that the parties' contract price was too low to 

include feeding, and in applying that holding to justify the 

court's order. 

In its memorandum in support of its order, the District 

Court stated: 

Before turning to the law regarding the 

sale, the Court takes notice of two 

factors. The Court takes judicial 

notice that the sum of $12 per head per 

month cannot possibly include the cost 

of providing extra feed for the horses. 

The Court further notes that the Plaintiffs have shown knowledge of this fact 

by making $7,000 payment to the Defendant prior to March, 1985. (114 head x 

$12 per month x 8 months = $1,824) 

The Court takes note of this, not to 

rule on the merits of the contract 

dispute, but rather as a factor in the 

notice Plaintiffs had regarding the 

sale. 

Appellants argue that the District Court erroneously 

substituted its judgment for that of the parties who agreed 

on a contract price knowing the horses were to remain with 

Myers for an indefinite period of time. The court calculated 

114 head x $12 per head x 8 months equals $1,824. Since the 

Roses paid Myers $7,000 between December, 1984, and ~ebruary, 

1985, the court inferred that the Roses recognized that they 

owed more than $12 per head per month, and that the excess 

would be applied to pay for feed over and above the original 

contract amount. This is wrong. 

The correct calculations are: 11.4 head x $12 per head 

x 8 months equals $10,944, not $1,824. Thus, appellamts 

argue, the $7,000 payment was a partial payment on the 
$10,944, the balance to be paid when the horses were retrieved. The court drew inferences from incorrect figures 

and erred in applying those inferences to justify its 

decision. 

Further, appellants argue the court took judicial 

notice of facts not properly subject to judicial notice. 

Appellants are correct when they say the court incorrectly calculated the bill and took judicial notice of a fact 

not appropriate for judicial notice. Rule 201, M.R.Evid. 

states: 

(b) Kinds of facts. A fact to be 

judicially noticed must be one not 

subject to reasonable dispute in that it 

is either (1) generally known within 

the territorial jurisdiction of the 

trial court or (2) capable of accurate 

and ready determination by resort to 

sources whose accuracy cannot be reasonably questioned. 

However, the error is harmless as there is ample evidence to 

support the District Court's conclusion. On cross-examination, the appellant Richard Rose, testified as follows: 

Q. Mr. Rose, I believe you stated that 

the agreement you had with Mr. Myers was 

that you were to pay him $12.00 per 

month per horse unit; is that 

correct? A. That is correct. 

Q. Now that was only for pasture; 

wasn't it? Tha.t didn ' t include 

feed? A. That is correct. 

Q. And if he had to feed them, that 

would be an additional charge; wouldn' t 

it? A. Yes. 

Q. And it doesn't include any labor on 

his part, either; does it? A. No. 

Thus, even without the court's calculations there is ample 

evidence that the appellants owed Myers more than $10,944 and 

only paid $7,000. The court took judicial notice that appellants knew they owed Myers for feed and labor costs because 

they paid Myers in excess of $12 per head per month. The 
court's calculations were wrong, but the result is the same. 

Appellants' own testimony revealed that the Roses knew they 

owed Myers for feed and labor costs in excess of the contract 

price, so although the court improperly took judicial notice 

of the fact, the result is supported by the evidence. Therefore, it is not necessary to reverse the District Court on 

this issue. 

The order of the District Court is affirmed in all 

respects. 

We concur: 

Chief Justice 

- FJustices 
Mr. Justice William E. Hunt, Sr., concurring: 

I concur in the result reached by the majority, but 

cannot agree with its analysis of the constitutional 

challenge raised by appellants. 

The majority reaches its decision without addressing 

appellant's claim that 5 71-3-1203, MCA, is unconstitutional 

as violative of due process. Appellants first raised the 

issue in their initial complaint before the District Court. 

They gave notice to this Court of the constitutional 

challenge in compliance with Rule 38 M.R.App.Civ.P.. 

Appellants have standing to challenge the statute. I cannot 

agree with the majority opinion that it is unnecessary to 

decide whether S 71-3-1203, MCA, is constitutional. The 

issue is squarely before us and cannot be ignored. 

I would hold that 71-3-1203, MCA, is clearly 

unconstitutional. The statute violates the due process 

clauses of the state and federal constitutions. However, I 

concur in the affirmance of the District Court's decision 

because the appellants have already had. their hearing. 

Following the sale, the appellants brought an action in the 

District Court which they litigated to a final judgment, and 

from which they now appeal. They received the full benefits 

of a trial in which they had an opportunity to fully present 

their case. The District Court found in favor of the 

respondents. Therefore, it is unnecessary to reverse the 

District Court and remand this case for a hearing. 

The agister's lien statute is clearly unconstitutional, 

however, because there is significant state action involved, 

and because the statute provides neither notice nor an 

opportunity to be heard prior to deprivation of property. 
First, it is clear there is significant state action 

involved. The Third Circuit Court of Appeals found state 

action from the mere enactment of a statute authorizing a 

garageman to sell a customer's vehicle for nonpayment of a 

bil.1. Parks v. Mr. Ford (3d Cir. 1977), 566 F.2d 132. he 

state action under s 71-3-1203, MCA, is far more significant. 

The sheriff is given a copy of the bill, a description of the 

property, and the name of the owner. The sheriff then must 

advertise and conduct the sale, he applies the proceeds of 

the sale to the debt, and provides the buyer with a bill of 

sale. Clearly this constitutes significant state action. 

Second, the statute does not satisfy the minimum due 

process requirements elaborated by either the Montana or the 

United States Supreme Court. As this Court stated in Nygard 

v. Hillstead and Coyle (1979), 180 Mont. 524, 528-529, 591 

P.2d 643, 645: 

It is fundamental that " [n]o person shall. be 

deprived of life, liberty, or property without due 

process of law." 1972 Mont. Const. Art. 11, § 17. 

"'It is well settled that notice and opportunity to 

be heard are essential elements of Due Process.'" 

Halldorson v. Halldorson (1977), 175 Mont. 170, 573 

P.2d 169, 171. 

The United States Supreme Court has addressed the due 

process requirement in the area of garnishment, replevin, and 

sequestration. That line of cases includes Sniadach v. 

Family Finance Corp. (1983), 395 U.S. 337, 89 S.Ct. 1820, 23 

L.Ed.2d 349; Fuentes v. Shevin (1972), 407 U.S. 67, 92 s.Ct. 

1983, 32 L.Ed.2d 556; Mitchell v. W.T. Grant Co. (19741, 416 

U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406, and North Georgia 

Finishing Co. v. Dichem, Inc. (1975), 419 U.S. 601, 95 S.Ct. 

719, 42 L.Ed.2d 751. 

In Sniadach, it was held that the Wisconsin prejudgment 

garnishment procedure whereby the defendant's wages were 
frozen in the interim between the garnishment and the 

culmination of the main suit, without the opportunity for a 

hearing, violated the Fourteenth Amendment. The Court noted 

that wages were a specialized type of property and 

prejudgment garnishment might impose tremendous hardship on 

wage earners. The Sniadach holding was expanded by Fuentes. 

In Fuentes, Florida and Pennsylvania statutes were held 

unconstitutional. Those statutes authorized the issuance of 

writs ordering state agents to seize a person's possessions 

upon the ex parte application of any other person who claimed 

a right to them and posted a security bond, without providing 

the possessor with notice or an opportunity to be heard. The 

Court held that a person whose rights are to be affected is 

entitled to be heard at a meaningful time and in a meaningful 

manner, and that the replevin statutes in question were 

constitutionally defective in failing to provide for notice 

and hearing. The Court noted that "extraordinary situations" 

may justify the lack of notice and hearing, but such a 

situation did not exist in that case. 

Fuentes was distinguished by Mitchell wherein it was 

held that a Louisiana statute which permitted the seller of 

goods under an installment contract to obtain a writ of 

sequestration to recover the goods, upon buyer's default, and 

without notice or hearing, did not violate due process. 

There were other adequate safeguards of due process because 

the writ would issue only upon a verified affidavit, and upon 

a judge's authority after the creditor had filed a sufficient 

bond. The statute entitled the debtor to immediately seek 

dissolution of the writ unless the creditor proved the 

grounds upon which the writ issued, and the debtor could 

regain possession by posting a bond to protect the seller. 
The final case is North Georgia Finishing, Inc.. That 

case relied upon Fuentes to determine that Georgia statutes 

authorizing garnishment of property other than wages in 

pending suits, but not providing for notice, hearing, or 

participation by a judicial officer, violated due process. 

The above cases dealt with something less than a sale of 

the property, i.e., sequestration, replevin, and garnishment. 

Clearly a permanent deprivation of property, such as occurs 

in a sale, warrants just as stringent a due process analysis 

as lesser forms of deprivation. As those cases indicate, due 

process requires at a minimum both notice and an opportunity 

to be heard prior to deprivation of property absent 

extraordinary circumstances, or other sufficient safeguards 

of due process. 

Section 71-3-1203, MCA, does not provide the kind of 

safeguards which salvaged the Louisiana statute in Mitchell. 

There is no requirement for a verified affidavit, no 

participation by a judge, no mandatory bond, and no procedure 

to seek an immediate halt of the sale. Further, there are no 

other legal remedies available to sufficiently guarantee due 

process. The legal procedures available to the owner, such 

as the institution of an action for conversion or for 

declaratory relief, are insufficient substitutes for a 

pre-sale hearing. There is little probability that trial of 

a contested lien claim can be held within the minimum period 

preceeding transfer to the buyer, and injunctions or other 

extraordinary remedies are discretionary with the trial court 

and thus lack the certainty necessary to insure a hearing 

prior to permanent deprivation. 

The question then becomes whether there exists any 

extraordinary circumstances which would justify the lack of a 
hearing prior to the sale. The respondent, Schafer, argues 

that because the personalty involved was live animals, this 

constitutes an extraordinary circumstance. This argument is 

not persuasive. The United States Supreme Court in Fuentes 

discussed what is meant by "extraordinary situations." As 

that Court said: 

These situations, however, must be truly 

unusual . . .. First, in each case, the seizure 

has been directly necessary to secure an important 

governmental or general public interest. Second, 

there has been a special need for very prompt 

action. Third, the State has kept strict control 

over its monopoly of legitimate force: the person 

initiating the seizure has been a governmental 

official responsible for determining, under the 

standards of a narrowly drawn statute, that it was 

necessary and justified in the particular instance. 

Fuentes, 407 U.S. at 90-91. 

Thus, the Court has allowed summary seizure to collect 

the internal revenue of the United States, to meet the needs 

of a national war effort, to protect against the economic 

disaster of a bank failure, or to protect the public from 

misbranded drugs and contaminated food. The present 

situation does not qualify as an important governmental 

interest. It is a private dispute between two parties. 

State intervention in a private dispute hardly compares to 

state action furthering a war effort or protecting the public 

health, and is of insufficient importance to override the due 

process requirements of notice and hearing. Therefore, I 

would hold that S 71-3-1203, MCA, is violative of due process 

as there is no provision for notice and hearing prior to 

deprivation of property. 

The question remains what kind of notice and hearing 

satisfy due process requirements? The Supreme Court in 

Fuentes stated that notice must be granted at a meaningful 

time and in a meaningful manner. Fuentes, 407 U.S. at 80. 
Further, the Court noted that leeway remains to develop a 

form of hearing that will minimize unnecessary cost and 

delay while preserving the fairness and effectiveness of the 

hearing in preventing seizures of goods where the party 

seeking the seizure has little probability of succeeding on 

the merits. Sniadach, 395 U.S. at 343. 

The hearing should establish the validity, or at least 

the probable validity, of the underlying claim before an 

alleged debtor can be deprived of his property. 

Consideration should be given to the interests of the parties 

including the basis of the underlying claim, the nature of 

the property involved, i.e., its value, uniqueness, etc., and 

the need for prompt action. The hearing need not be a full 

blown trial-type hearing, but must protect a property owner's 

use and possession of property from arbitrary encroachment. 

This is an especially relevant danger where the State seizes 

and sells goods merely upon the application of a private 

party. 

Because the appellants have properly challenged the 

constitutionality of 5 71-3-1203, MCA, the issue must be 

addressed. However, I concur in the result reached by the 

majority and would affirm the District Court in all respects. 

I concur.