No. 81-526 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1982 

SUNBIRD AVIATION, INC., 

a Mont. corp. , 

Plaintiff and Third Party DefendantRespondent, 

-VSROD ANDERSON, also known as 

RODNEY ANDERSON, 

Defendant and Third P a r t y P l a i n t i f f - 

Appellant. *%***** 

ROD ANDERSON, a/k/a RODNEY ANDERSON, 

Plaintiff-Appellant, 

SUNBIRD AVIATION, INC. , 

Defendant-Respondent . 

Appeal from: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, The Honorable 

W. La. LCssley, Judge presiding. 

Counsel of Record: 

For Appellant: 

Ralph L. Herriott, Billings, Montana 

For Respondent: 

Morrow, Sedivy, Olson & Eck, Bozeman, Montana 

Submitted on Briefs: June 10, 1982 

Decided: September 28, 1982 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

Appeal by defendant Rod Anderson from a judgment against 

him in the District Court, Eighteenth Judicial District, 

Gallatin County. He was ordered to pay plaintiff Sunbird 

Aviation, Inc. $1,297.89, plus interest, attorney fees, and 

$3,892.22 on an accounting arising from the co-ownership of 

an airplane. We affirm the District Court. 

Sunbird Aviation, Inc. is a Montana corporation which 

provides a general aviation service. Rod Anderson is a real 

estate agent and an experienced pilot. 

On December 7, 1978, the parties and one Stanley Langaker 

entered into a written agreement for co-ownership of a 1977 

Piper Seneca I1 airplane. The purchase of the plane was 

financed at the First Security Bank of Billings by a first 

mortgage of $75,000 principal, with monthly payments of 

$1,486.43. 

Under the co-ownership agreement one-half of the aircraft 

was owned by Sunbird and one-half by Rod Anderson and Stanley 

Langaker. Insurance premiums, taxes and routine maintenance 

were to be paid 70 percent by the corporate owner and 30 

percent by the individual owners. The expense of engine 

overhauls and major component expenses were to be paid 50 

percent by the corporate owner, and 50 percent by the individual 

owners. All parties to the agreement had the right to use 

the Seneca at a cost for each hour of usage of $45. Sunbird 

kept the accounts for the co-ownership, and would collect the I 

amounts due from the individual owners as the expenses or 

debts were incurred. 

On February 4, 1980, Anderson was delinquent in his 

payments to the co-ownership in the sum of $1,297.89. He 

executed a promissory note to Sunbird for that amount 
providing for semi-annual interest at 16 percent and reasonable 

attorney fees. 

On May 16, 1980, Langaker owed the co-ow!~ership a 

balance of $17,000 on his account in settlement of which he 

transferred his interest in the plane to Sunbird. After 

that date, Sunbird owned 75 percent and Anderson 25 percent 

of the aircraft. 

When it was determined that the Seneca would not meet 

FFA standards unless engine repair was carried out, on July 

29, 1980, Sunbird purchased and had installed two rebuilt 

engines at a cost of $23,166.41. 

In early 1980, the parties decided to sell the plane at 

a price sufficient to satisfy the balance owing on the first 

mortgage. At a time when the parties believed the plane would 

be sold to Dutton Aviation, Anderson executed a blank bill 

of sale and delivered it to Sunbird to be used in the sale 

to Dutton. However, the sale to Dutton did not occur. 

Anderson's blank bill of sale remained with the officers of 

Sunbird who used it in the sale of the plane on October 30, 

1980 to bne Tucker of Bremerton, Washington. Tucker's 

consideration for the Seneca consisted of $65,000 in cash to 

Sunbird, and the transfer of title to another airplane, 

which was later sold by Sunbird for $19,000. These monies 

were credited to the Anderson and Sunbird accounts after 

the security interest at First Security Bank of Billings was 

satisfied. 

During the entire period of co-ownership, Sunbird 

maintained and provided Anderson an accounting of all transactions. The record shows and the District Court found that 

Sunbird flew the Seneca 515 hours, and that Anderson and 

Langaker flew it 150.1 hours. Maintenance hours totaled 
15.1 hours. During this period, expenses for maintenance, 

insurance, mortgage payments and taxes totaled $51,298.65. 

The accounts of Anderson and Langaker were debited $15,237.27. 

In addition, Anderson's account was debited $5,791.60 for 

the rebuilt engines. As of October 30, 1980, Anderson owed 

Sunbird $11,336.49. Of the $84,000 realized in the sale of 

the Seneca, $59,414.47 was paid to satisfy the first mortgage. 

Of the remaining $24,585.53, $18,439.15 was credited to 

Sunbird and $6,146.38 to Anderson. This credit left a 

balance of $5,190.11 owing by Anderson to Sunbird, less the 

unpaid principal balance on the promissory note of $1,297.89. 

Therefore Anderson owed a further $3,892.22 under the coownership agreement. 

On April 7, 1980, Sunbird instituted an action against 

Anderson on the promissory note demanding full payment plus 

interest and attorneys fees. Anderson filed an answer 

generally denying Sunbird's complaint and included a thirdparty complaint against Langaker and Sunbird seeking partition 

of the aircraft, or a sale of the aircraft and a division of 

the proceeds. 

On December 12, 1980, Sunbird filed an answer and 

complaint demanding an additional $4,490.11 owing from 

Anderson with interest and costs. On February 4, 1981, 

Anderson filed a complaint against Sunbird, in a separate 

action, for damages alleged to have resulted from the sale 

of the plane. On May 4, 1981, the cases were consolidated. 

The consolidated cases were tried to the District Court on 

July 29, 1981, and thereafter the District Court concluded 

that Anderson owed Sunbird $3,892.22 under the co-ownership 

agreement, and $1,297.89 plus interest on the promissory 

note. After a hearing on the issue of attorneys fees, the 
District Court granted Sunbird $2,325 for the nrosecution of 

the collection action on the note. 

On September 24, 1981, the District Court entered 

judgment against Anderson and in favor of Sunbird for $3,892.22 

on the account, $1,297.89 on the note, plus 16 percent 

interest thereon, attorneys fees of $2,325, and costs of 

$45.74, together with interest on the judgment from the date 

of the judgment at 10 percent per annum. 

Anderson filed his notice of appeal on October 21, 

1981. 

The issues presented by Anderson are: 

1. Whether the District Court erred in finding Anderson 

owed Sunbird $1,297.89 on the promissory note, and $3,892.22 

on the account. 

(a) Did the District Court's consideration of the coownership as a joint venture in any way prejudice appellant 

Anderson? 

(b) Did Sunbird's written letter to Anderson that he 

had no interest in the plane received in trade constitute a 

release from further obligation? 

(c) Did the release of Longaker release Anderson from 

further obligation to Sunbird? 

There is little doubt that Anderson owed Sunbird on the 

promissory note. He delivered a promissory note to Sunbird 

in recognition of his account balance. The note provided for 

attorneys fees and interest at 16 percent. This Court 

follows the rule that a party primarily liable on a negotiable 

promissory instrument is indebted in that amount to the 

payee. John K. Etc. Renev. Corp. v. School District No. 17- 

H (1935), 99 Mont. 388, 43 P.2d 902. Therefore, Sunbird is 

entitled to collection of the debt owed by Anderson on the 
promissory note and the incidental benefits provided therein 

of interest and attorneys fees. 

We look to the other issues raised by Anderson to 

determine whether the judgment for the amount of the account, 

$3,892.22 is proper. 

First Anderson claims that the District Court's consideration of the co-ownership agreement as a joint venture 

prejudiced him. 

Sunbird answers that there were no specific findings by 

the District Court on the issue of joint venture. The court 

mentioned joint venture in its memorandum but Sunbird contends 

that this does not affect the outcome of the case. Sunbird 

notes in its brief that Anderson does not explain the claimed 

prejudice from the mention of joint venture by the District 

Court. 

A joint venture is "[Aln enterprise undertaken by 

several persons jointly, and more particularly, as an association 

of two or more persons to carry on a single business enterprise 

for profit. It has also been defined, somewhat variantly, 

as a special combination of persons undertaking jointly some 

specific adventure for profit,. . . " Rae v. Cameron (1941), 

112 Mont. 159, 167, 114 P.2d 1060, 1064. In the sense of 

that definition, the arrangement between the parties here 

was not a joint venture. It was simply an agreement for the 

co-ownership of an aircraft with provisions in the agreement 

for the costs of usage, repair and maintenance to be divided 

among the parties. The District Court's reference to a 

"joint venture" in the memorandum does not affect its interpretation, which we find to be proper, of the responsibilities 

of the parties under the co-ownership agreement. 

Anderson further contends as an issue that a letter 

from Sunbird to Anderson dated November 3, 1980, constituted 
an independent release of Anderson from further obligations 

to Sunbird. He contends the District Court made no specific 

findings of fact relating to the letter of November 3, 1980, 

and that we should review and determine whether in fact the 

letter constituted an independent release of Anderson. 

The letter of November 3, 1980, states in part: "In 

view of these facts Sunbird feels you have absolutely no 

claim to ownership of the C-206." Anderson is contending on 

appeal that this has the legal effect of terminating the coownership or that the language has the effect of releasing 

him from obligations under the co-ownership agreement. 

Sunbird answers that the issue of Anderson's release 

under the letter of November 3, 1980, concerning the aircraft 

was not raised in the lower court. 

An issue not raised in the District Court will not be 

considered by us on appeal. Chadwick v. Giberson, et al. 

(1980) Mont. - , 618 P.2d 1213, 37 St.Rep. 1723; Stout 

v. Reiter (19791, Mont. - , 595 P.2d 1167, 36 St.Rep. 

992; Kearns v. 14cIntyre Construction Co. (1977), 173 Mont. 

239, 567 P.2d 433, 440; O'Hanlon v. Ruby Gulch ~ining Co. 

(1922), 64 Mont. 318, 326, 209 P. 1062, 1064. 

Anderson further contends that the sale of the Seneca 

by Sunbird, and the release of Langaker each had the effect 

of releasing Anderson from any further obligation to Sunbird. 

There is no evidence in the record to support Anderson's 

contention that the sale of the Seneca, standing alone, 

constituted a release of obligations owing by Anderson to 

Sunbird. The parties had agreed to sell the plane and 

Anderson had delivered a blank bill of sale to be used in 

the sale of the plane. There is nothing in the record to 

support Anderson's contention that the sale of the plane was 

to terminate all of his obligations to Sunbird arising out 
of the co-ownership agreement. 

We do not find anything in the release of Langaker by 

Sunbird and the transfer of his interest in the plane to 

Sunbird sufficient to constitute a release of the obligations 

owing by Anderson. 

The common law rule is that a release of one joint 

obligor on a contract releases all other obligors. See 

Colliers v. Field (1872), 1 Mont. 612, 2 Mont. 205, 2 Mont. 

320. "The modern view is where two or more obligors are 

jointly liable for a breach of a contract, a release to one 

does not necessarily release the other, and that the question 

whether the other is released depends upon (1) the intention 

of the parties to the release instrument, and (2) whether 

the injured party has in fact received full compensation 

(satisfaction). . . " 66 Am.Jur.2d Release 9 35. 

With regard to release of joint tortfeasors, this Court 

has stated that: 

"Unless the release specifically states 

otherwise, a finder of fact may consider 

the intent of the parties in making a 

release." Kussler v. Burlington Northern, 

Inc. (1980), Mont. , 606 P.2d 520, 

524, 37 St-Rep. 240, 245. 

Here Anderson contends that the findings of fact by the 

District Court do not expressly state whether Langaker was 

indeed released, and if he was, whether his release constituted 

a release of Anderson. 

Nothing in the evidence indicates an intent on the part 

of Sunbird to release Anderson when it acquired the interest 

of Langaker to the airplane. Prom the record, it appears 

that Sunbird simply acquired Langaker's interest in the 

aircraft in exchange for assuming Langaker's obligation to 

the co-ownership arrangement. We find nothing in the termination 
of Langaker's interest in the airplane by his transfer to 

Sunbird that would constitute a release, express or implicit, 

of Anderson from his obligations for expenses under the 

co-ownership agreement. 

Since we find no error in the findings of fact and 

conclusions of law on which the judgment of the District 

Court is founded, we affirm the ~istrict Court. 

We Concur: 

Chief Justice 
Mr. Chief Justice Frank I. Haswell, special concurring: 

I concur with the majority opinion in the treatment 

of the issues raised and our rulings thereon. 

However, there is a question in my mind concerning the 

amount of attorney fees awarded in this case. It appears 

that the District Court's award covered services performed 

by the attorney in addition to collection of the note. 

Since this issue was not raised in the District Court, I 

would not consider it for the first time on appeal under 

the authorities cited in the majority opinion.