NO. 88-448 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1989 

PAUL BROKKE, 

Plaintiff and Respondent, 

-vsALBERT D . WILLIAMS d/b/a AL' S PAFJNSHOP, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable Thomas Olson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Albert D. Williams, Pro Se, Eozeman, Montana 

For Respondent: 

Paul Brokke, Pro se, Bozeman, Montana 

Filed :TI 

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Submitted on Briefs: Dec. 9, 1988 

Decid.ed: January 5, 1989 IM 

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ED SMITH 

- - Clerk 

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

Court. 

This is an appeal from judgment entered in the Eighteenth Judicial District awarding damages in the amount of 

$89.95 plus costs to plaintiff Paul Brokke. Both Brokke and 

Williams are pro se litigants. Defendant Williams appeals. 

We affirm. 

The issue on appeal is whether a merchant can disclaim 

responsibility for furnishing title to goods sold in his 

business by placing "sold as is" signs in his establishment. 

We hold that he cannot. 

Albert D. Williams operates a pawnshop in Bozeman, 

Montana. Plaintiff Paul Rrokke entered defendant's business 

on October 31, 1985, and placed a Pentax Super Program camera 

on layaway by paying a $20 down payment and agreeing to pay 

the $69.95 balance due on the purchase. The camera was 

stolen property. 

On November 4, 1985, plaintiff paid the remaining 

balance on the layaway transaction and took possession of the 

camera, serial number 1190586. Later that same month, plaintiff was notified by the Rozeman police department that the 

camera was stolen property. He was directed to surrender the 

camera to the police department which he did on November 18, 

1985. 

Plaintiff promptly returned to the pawnshop and requested a refund for his purchase of the stolen merchandise. 

That request was denied by Williams and litigation ensued. 

After justice court proceedings, hearing was held on 

January 21, 1988, which resulted in a District Court judgment 

in favor of plaintiff. Defendant appeals. 

Defendant argues that he had no knowledge that the 

merchandise was stolen property. Williams argues further 
that he disclaims any warranty of title to goods sold in his 

business by way of large fluorescent signs posted which alert 

buyers that the merchandise sold on the premises is sold "as 

is," and by writing the same on his sales receipts. We 

disagree. 

It was disputed as to whether the signs described an6 

entered into evidence at the hearing by photographs taken by 

defendant were actually in place when plaintiff entered the 

store. However, that factual dispute is not relevant to the 

legal issues involved. 

The issue is controlled by the Montana Uniform Comrnercia1 Code (UCC) . Section 30-2-312, MCA, warrants that a 

merchant selling goods passes clear title to the goods. 

Clearly, Williams breached that warranty of title required by 

the code when he sold stolen goods to Brokke because it has 

long been established that a thief cannot pass clear title to 

his stolen goods, City of Portland v. Berry (0r.App. 1987), 

739 P.2d 1041; nor can his successor. It is irrelevant that 

Williams claims he did not know the goods were stolen. 

With respect to breach of warranty, Williams, as a 

merchant, is held to a higher standard of dealing than ordinary consumers. Pace v. Sagebrush Sales Co. (Ariz. 1977) , 

560 P.2d 789. Further, Williams is held to the obligatorj. 

good faith required in the performance of every contract and 

every duty under the UCC. Section 30-1-203, MCA. Good faith 

is defined under the UCC as "honesty in fact." Section 

30-1-201 (19), MCA. 

It is undisputed that Brokke promptly notified Williams 

of his breach of warranty of title, thus defeating many 

defenses available to Williams under the code. 

The question then becomes, did Williams do anything to 

effectuate a disclaimer of the warranty of title in this 
transaction. We affirm the trial court's conclusion that he 

did not. 

Warranty of title is not subject to the disclaimers 

found in 5 30-2-316, MCA, pertaining to fitness and merchantability. Williams argues that his conduct of placing the 

signs is his notice of a specific and written disclaimer. 

However, that conduct does not meet the disclaimer of warranty of title found in 5 30-2-312(3), MCA, which states "unless 

otherwise agreed" a seller who is a merchant warrants that 

the goods shall be delivered free of the rightful claim of 

any third person. Clearly, there could have been no 

agreement to that effect between Williams and Brokke when 

Brokke denies ever seeing the signs which Williams claims 

were up in his premises on the date of the transaction. 

Brokke further testified to having no conversations with 

Williams regarding the title of the camera. That testimony 

conflicts with Williams' account of having verbally informed 

Brokke that the title could not be guaranteed. 

The trial court found that Williams had a duty to 

deliver clear title to the property, that he could not do so 

because it was stolen and that simply placing "as is" signs 

in his store does not defeat that duty nor relieve him of 

liability for defects. We agree. The trial court additionally found that it violates the public policy of this state 

to allow pawnbrokers to profit from the sale of stolen property. Montana law as written by our legislators and found in 

the UCC supports that conclusion. 

Williams fails to convince this Court that the trial 

court's judgment was an abuse of discretion and not based on 

substantial credible evidence. Davis v. Sheriff (Mont. 

1988), 762 P.2d 221, 45 St.Rep. 1783. 
Brokke is entitled to a refund of the $89.95 paid to 

Williams plus his costs in this action as awarded by the 

District Court and his costs on appeal. 

Judqmen t a f f i. rmed . 

We concur: 

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