### No. 80-429 IN THE SUPREME COURT OF THE STATE OF 

### MONTANA 1981

WALTER F. DUSSAULT and ARLENE S. DUSSAULT, Plaintiffs and Respondents,

VS

# . F. HJELM, Defendant and Appellant.

Appeal from: District Court of the Fourth Judicial District, 

### In and for the County of Ravalli Honorable James 

### B. Wheelis, Judge presiding. Counsel of Record: ForAppellant: John M. McRae argued, Hamilton,Montana For Respondents: Recht and Greef, Hamilton,Montana John D. Greef argued, Hamilton,Montana

- 

### Submitted: April 21, 1981 Decided: May 13, 1981 

### Filed:

# -Mm13198f 

# -p*ry

ClerkMr. Justice Frank B. Morrison, Jr., delivered the Opinion of the Court. Defendant, Flo Hjelm, appeals from a judgment of the Fourth Judicial District, Ravalli County, entered infavor of plaintiffs, Walter F. and Arlene S. Dussault. 

### his judgment terminated a lease of real property, granted possession of the property toplaintiffs, held that the Landlord and Tenant Act did not apply thereby entitling plaintiffs to treble damages under the unlawful detainer statutes, and awarded attorney fees and costs toplaintiffs. Flo Hjelm owned property outside the City of Hamilton, Ravalli County, Montana. On February 27, 1979, Hjelm sold thisproperty toWalter and Arlene Dussault. The instrument formalizing the 

### terms of the sale contained a lease-back provision by which Hjelm was given an option torent the buildings on the conveyed property along with six acres of land. This lease-back provision stated: "The Seller herein may, ather option, rent from the Buyers the buildings conveyed by her to the Buyers, together with approximately six 

### (6) acres of land for the annual rental of $3,000.00 for one year, commencing from the date of this agreement and said rent shallbe payable on or before December 1, 1979, and it 

### is further provided that the agreement shallbe automatically renewed from year to year unless one party gives written notice of at leastninety (90) days before the expiration of the current year of their intent to cancel or amend the terms. " Hjelm exercised the option torent and continued inpossession of the property. Atthe 

### timeof the sale and continuing throughout the possession of the property, Hjelm maintained 15 to 20 horses

on the property. Hjelm alsokept, on an intermittant basis,

some cows, chickens, a goat and other domesticated animals. On November 9, 1979, Dussaults served notice upon Hjelm that the rental agreement would terminate on February 27,1980. Subsequently, a dispute between the parties arose 

### regarding whether the firstlease-year ended on December 1, 1979 orFebruary 27, 1980. As a resultof the dispute, 

### ~jelm paid only $2,000 rent and refused to vacate the premises

on February 27, 1979. On March 7, 1980, Dussaults commenced an action under theMontana unlawful detainer statutes. Section 70-27-206, MCA, provides for an award of treble damages. Hjelm moved todismiss, claiming her occupancy of the premises was governed solelyby Montana Residential Landlord and Tenant Actof 1977. (Hereinafter referred to

### as the Landlord and TenantAct.) Under this Act treble damages can only be awarded upon a showing of purposefulness and bad faith. Section 70-24-429 (I),MCA. The DistrictCourt granted Dussaults 

### time toamend their complaint to allege sufficient facts excepting the tenancy from the province of the Landlord and Tenant Act. Dussaults amended the complaint, alleging thatHjelm's occupancy 

### was exempt from the Actby virtue of the "agricultural" exclusion contained in section 70-24-104 (8)

## , MCA. Hearing on thematter was held May 30, 1980. On August 15, 1980, the District Court held that the lease agreement was excluded from the Landlord and TenantAct. The 

### ~istrict Court rendered judgment infavor of the Dussaults inaccordance with Montana unlawful detainer provisions. The dispositive issue on appeal 

### is: 1. Whether the DistrictCourt erred inconcluding that the action on the subject lease agreement was properly brought under unlawful detainer statutes, precluding application of the Landlord and Tenant Act

### by virtue of the exclusionary provision, section 70-24-104(8), MCA? ~esolu-tionof this issue determines the question of whether treble damages 

### were an appropriate award. Section 70-24-104, MCA, 

### sets forthrental arrangements which areexcluded from the province of the Landlord and Tenant Act. Pertinent to thisappeal, thisprovision states: "Unless created toavoid the application of this chapter, the following arrangements arenot governed by this chapter: 

### "(8) occupancy outside a municipality under a rental agreement which includes hunting, fishing, or agricultural privileges alongwith the use of the dwelling unit." Section 70-24-104(8), MCA. In construing this statute, 

### we aregoverned by the rule of construction that

# ".

. 

# . a relative clausemust be construed torelate to the nearest antecedent that

### willmake sense.

### " Statev. DistrictCourt of theFirstJudicial Distr. (1936), 103Mont. 487, 501, 63 P.2d 

### 141, 144; State

### v. Centennial Brewing Co. (1919), 55 Mont. 500, 513, 179 P. 296, 298. Therefore, the relative clause "which includes hunting, fishing, or agriculturalprivileges" necessarilymodifies the noun phrase "rental agreement", not themore remote noun "occupancy". Thus, before a rental agreement can be excluded from application of the Landlord and Tenant Actby virtue of section 70-24-104 (8),MCA, hunting, fishing or agricultural privilegesmust be granted by the 

### terms of the lease agreement. The granting 

### terms of therental agreement between appellant and respondents state: "The Seller herein may, ather option, rent from theBuyers the buildings conveyed by her to the Buyers, together with approximately 

### --- six (6)

### acres of land 

# . .

# ." (Emphasis added.) 

## -- The difficultyin the case atbar arises as a result of the noted language. The buildings mentioned arenot delineatedanywhere inthe agreement. Without description of the buildings 

### it is impossible, without resort to parol evidence, todetermine whether the lease intends commercial, agricultural or strictlyresidential purposes. Couple thiswith the grant of sixacres of land and the parties' intent becomes even less clear. Thus, a close examination of the lease reveals an ambiguity which necessitates parol evidence. Section 28-3-303, MCA, provides that 

### "[w]hen a contract 

### isreduced to writing, the intention of the parties 

### is tobe ascertained from the writing alone 

## - if possible, subject, however, to the other provisions of this chapter." (Emphasis added.) As discussed, ascertaining the intentions of the parties to this action 

### isnot possiblemerely by examining the lease. Section 28-3-402, MCA, states 

### "[a] contractmay be explained by reference to the circumstances under which 

### itwas made and the matter towhich 

### it relates." This statute 

### is inaccord with section 

### 1-4-102, MCA, regarding the interpretation of instruments, which provides "[£]or the proper construction of an instrument, the circumstances under which 

### itwas made, including the situation of the subject of the instrument and of the parties to it,may also be shown so that the judge be placed inthe position of those whose language he 

### is to interpret." Furthermore, section 28-2-905 (2)

## , MCA, specifically permits consideration of extrinsic evidence regarding a written agreement to explain an extrinsic ambiguity. Under this statutory authority, the DistrictCourt properly accepted parol evidence regarding the lease agreement inorder to explain the circumstances surrounding the agreement, thus resolving the ambiguity which existed in the instrument. The parol evidence presented attrial consisted of photographs and testimony from the parties. The photographsestablished that the buildings, which 

### were the subject of the lease, consisted of 

### a small house, largebarn and extensive corrals, several storage and chicken sheds and garages. Respondent testified thatduring negotiation of the 

### terms, appellant stated to him that she needed the property tomaintain her animals until she could locate a larger farm. Appellant testified thatprior to entering into the lease and continuing throughout her possession, she maintained horses on the property, plus several cows, goats and other domestic animals on an intermittant basis. From this evidence, the District Court could determine the parties' intentions inleasing the property. Clearly, appellant needed the property inorder to care for and raise the livestock which she owned. The only question remaining 

### iswhether maintenance of livestock inan operation of this scale 

### is agricultural within the meaning of that 

### termin section 70-24-104 (8),MCA? Appellant argues that the term "agricultural" asused insection 70-24-104, MCA, encompasses only occupancies where farming or ranching operations, whether primary or secondary, are engaged in for profit. Examination of section 70-24-104, MCA, discloses that legislative intent forecloses such an interpretation. The term "agricultural" appears twice in section 70-24-104, MCA. Under subsection (6), "occupancy under a rental agreement covering premises used by the occupant primarily for commercial or agricultural purposes" 

### is excluded from the Landlord and Tenant Act. Under subsection (8)

## , "occupancy outside a municipality under a rental agreement which includes hunting, fishing, or agriculturalprivileges along with the use of the dwelling unit" 

### isexcluded from the Act.Reading these sections together, 

### it is clear the legislature intended a comprehensive coverage of allagricultural operations, whether they arelarge scale operations for profit, or 

### small scale operations secondary to the use of 

### a residence. The term "agriculture" has a very broad definition inthe law. Black's Law Dictionary, Revised Fourth Edition, defines agriculture as: "The artor science of cultivating the ground, including the harvesting of crops, and ina broad sense, the science or artof production of plants and animals useful toman, including in a variable degree, the preparation of these products forman's use 

# . . ."Page 91. In lightof this definition and the format of section 70-24- 104, MCA, the DistrictCourt properly determined that agricultural privileges, within themeaning of section 70-24- 104(8)

## , MCA, were granted by the lease agreement. Such a finding forecloses applicationof the Landlord and Tenant Act, and provisions of the unlawful detainer statutes govern. Plaintiffswere entitled to treble damages for the 

### time defendant "held over" following termination of the tenancy. Each party shallbe responsible for his or her own attorney fees relating to thisappeal. The judgment of the District Court 

### isaffirmed.

We concur:



### h Chief Justice