No. 13126 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

' 1976 

MASSEY-FERGUSON CREDIT CORPORATION, 

a corporation, 

Plaintiff and Respondent, 

BRUCE BROWN, 

Defendant and Appellant. 

Appeal from: District Court of the Tenth Judicial District, 

Honorable LeRoy L. McKinnon, Judge presiding. 

Counsel of Record: 

For Appellant : 

James C. Wilkins, Jr. argued, Lewistown, Montana 

For Respondent : 

Leonard H. McKinney argued, Lewistown, Montana 

Submitted: February 2, 1976 

Decided : !'!!!4;i 2 4 1976 

C ,- Filed : ,!i,;i 2 A- :-fc 
Mr. Justice John Conway Harrison delivered the Opinion of 

the Court. 

This is an appeal from a judgment for plaintiff entered 

in the district court, Fergus County. Plaintiff Massey-Ferguson 

Credit Corporation brought the action to recover the balance due 

on a retail installment contract involving the sale of farm 

machinery. Trial was held October 4, 1974, before Hon. LeRoy 

L. McKinnon, sitting without a jury. Judgment was entered on 

April 9, 1975 for plaintiff. Defendant Bruce Brown appeals from 

that judgment. 

Appellant Brown is a local farmer and rancher in the 

Lewistown, Montana,area. Respondent is the assignee of the 

former Dan Morrison & Sons, a now defunct Massey-Ferguson implement dealer in the city of Lewistown. 

In early August, 1970, appellant Brown began negotiating 

with the firm Dan Morrison & Sons for a used Model 990 New Holland 

combine farm machine. To ascertain the condition of the used 

machine, Brown inquired of Morrison concerning his dealings with 

the former owner, one Bill Seilstad. Morrison offered t o c a l l 

Seilstad and Brown was able to speak with him while Morrison 

listened on an extension telephone. Seilstad informed Brown of 

the machine's deficiencies and Morrison promised to repair them. 

On August 22, 1970, a purchase order was signed and the machine 

was delivered to Brown several days later. Brown used the machine 

to cut a few acres of barley, but a broken shaft made further use 

of the machine impossible. Several weeks later, approximately 

October 1, 1970, Brown repaired the machine and again began to 

cut, but problems with the combine forced him to stop before 

fifteen acres had been covered. 

Throughout the period between August 22, 1970 and October 1, 1970, Morrison made several visits to appellant's ranch 

in hopes of securing his signature on a retail sales agreement, 
but without success. On October 2, 1970 Brown went to town 

and told Morrison that he could not accept the machine. Appellant's reasons for this decision and his testimony concerning 

the events which thereafter occurred appear in the record: 

"A. The work that it needed done and the condition that it was in, and Don said they would 

fix all this, and I wasn't very interested in 

the deal yet, but anyway, he wrote down all the 

stuff I said that needed done, and he guaranteed 

that it would be done, and - 

"Q. Who wrote this down? A. Don did. * * * 

"Q. And he got the information from whom? A. 

As to what to do? 

"Q. Right. A. I did. I was the one that told 

him what was needed done or what I felt needed 

to be done, and he said there is no problem. 

"Q. Is this at the time you signed the contract? 

A. This was actually, probably fifteen minutes 

prior to me signing the contract. 

"Q. Did Mr. Koch [Massey-Ferguson representative 

and witness to the sales contract] take any part, 

make any comments or say or do anything? A. He 

said that he had been with Massey for so many 

years and that he knew Don, * * * and he said you 

know his word is good. If he says he's going to 

fix it, he'll fix it." 

The items to be repaired were apparently written down, but never 

made a part of the contract. There is, however, no question 

that these representations or promises to repair the machine were 

in fact made, as they were never denied by Morrison and the abovequoted testimony appears in the record without objection. Several 

days after the contract was signed, Morrison sent a mechanic out 

to repair the combine, but for some reason he did not repair 

it. The machine was never repaired. ~uring the summer 1971, 

Morrison closed his business as a farm implement dealer. On 

July 14, 1971, Morrison wrote appellant to inform him of this 

fact, and to offer the services of another implement dealer to 

repair the machine, but a satisfactory arrangement could not be 

made. 
The contract, which had been assigned to respondent 

on the day of its execution, called for an initial payment on 

November 1, 1971, and contained an acceleration clause in case 

of default. Appellant failed to make any payment on the agreement, and on December 9, 1971, wrote the respondent in an attempt 

to explain his position. The machine was repossessed nine months 

later and was finally sold to another implement dealer for $1850. 

Respondent deducted the sales price and sued for deficiency. 

Appellant counterclaimed for the price of his trade-in, the 

rental paid for use of another combine for the 1971 season, and 

for his labor and parts expended in the repair of the combine. 

Two basic issues arise on appeal: 

1) Did the seller breach and render unenforceable his 

contract with the buyer in failing to perform his promise to 

repair. 

2) May this defense be validly asserted against seller's 

assignee under section 87A-9-206(1), R.C.M. 1947? 

It is the position of respondent that the contract is 

complete on its face, that par01 evidence may not be admitted to 

vary the terms stated therein, and that no breach could have 

occurred which is provable in a court of law. Section 87A-2-202, 

R.C.M. 1947, provides: 

"Final written expression--par01 or extrinsic 

evidence. Terms with respect to which the confirmatory memoranda of the parties agree or which are 

otherwise set forth in a writing intended by the 

parties as a final expression of their agreement 

with respect to such terms as are included therein 

may not be contradicted by evidence of any prior 

agreement or of a contemporaneous oral agreement 

but may be explained or supplemented 

"(a) by course of dealing or usage of trade 

(section 87A-1-205) or by course of performance (section 87A-2-208); and 

"(b) by evidence of consistent additional terms 

unless the court finds the writing to have 

been intended also as a complete, and exclusive statement of the terms of the agreement." 
The Uniform Commercial Code as adopted in Montana, operates to 

exclude extrinsic or parol evidence only where the district 

court finds that the writing is, on its face, a full and final 

integration of the parties embracing all the terms of the agreement, or where the evidence offered is inconsistent or contradictory to the terms of the written instrument. Martel Construction Inc. v. Gleason Equipment, Inc., 166 Mont. 479, 534 P.2d 

883, 32 St.Rep. 402; 2 Williston on Sales B 13-9, p. 88 (1974); 

67 Am Jur 2d Sales, B 194. 

Under the facts and circumstances presented, the parol 

evidence rule cannot be applied to exclude evidence of the promise 

to repair. Here the district court did not find the writing was 

a full and final integration of the parties. Rather, the court 

specifically found "the sellers promised to make necessary repairs". 

In light of the testimony and exhibits, it is clear the district 

court could not reasonably find otherwise. While the parol evidence issue was raised by respondent in its trial brief, all 

testimony and exhibits which were offered to prove the existence 

of an independent agreement to repair were admitted without objection. As a result the record not only contains appellant's testimony regarding the agreement to repair, but several admissions 

by the seller, in open court, affirming the agreement: 

"Dave Morrison: 

"A. This was the day that I informed Bruce 

[appellant] that we would take care of the 

combine and we would make arrangements for 

the combine to be fixed. 

"Q. Well, was it fixed? A. No, sir, it 

wasn't fixed." 

We need not consider further the complexities of the parol 

evidence rule or its applicability to the facts of this case. Here 

the failure to object at the time the evidence was offered was 

fatal, especially where respondent was first to introduce parol 
evidence tending to establish the existence of the agreement. 

We apply the long established rule that an objection to the 

admission of par01 evidence cannot be raised for the first 

time on appeal, and that such an objection is waived when no 

effort is made to preserve it at the time it is offered. Anno: 

92 A.L.R. 810. 

Having determined that seller's breach of oral contract 

is a valid defense against the action on the retail installment 

agreement, we now consider whether this defense can be applied 

to respondent, seller's assignee. Respondent asserts the seller's 

breach is not an applicable defense against the assignee of this 

retail installment contract. Undeniably, appellant's signature 

appears on a contract which states: 

" * * * buyer(s) will not set up any claim, or 

defense which he may have against the seller as 

a defense * * * in any action * * * by the seller's 

assignee." 

The enforceability of covenants of this type is governed by 

section 87A-9-206(1), R.C.M. 1947, which provides in pertinent 

part : 

" * * * an agreement by a buyer or lessee that 

he will not assert against an assignee any 

claim or defense which he may have against the 

seller or lessor is enforceable by an assignee 

who takes his assignment for value, in good 

faith and without notice of a claim or defense * * * 1'. 

In our view, respondent Massey-Ferguson Credit Corporation 

cannot be considered among those whose protection is contemplated 

by section 8724-9-206(1). The evidence shows that respondent's 

representative participated, at least to some degree, in making 

the sale by orally affirming the seller's promises to appellant 

buyer. It is clear from the exhibits that the contract was 

executed and assigned at about the same time and upon the same 

instrument, and the blank form sales contract employed was in this 
case furnished by respondent corporation. Under these circumstances, it has been held the assignee does not take the 

assignment "without notice of a claim or defense" and is 

therefore not entitled to the enforcement protection provided by 

section 87A-9-206(1), R.C.M. 1947. New Holland Machine Company 

v. Lewis, (Tex. Civ. App. 1971),470 S.W.2d 234; Anno: 44 ALR2d 

8, 157-161. We find these rulings in strict accord with the 

purpose and policy behind this section of the Uniform Commercial 

Code, as explained in Massey-Ferguson, Inc. v. Utley, (KY. 1969) I 

"We consider it to be the policy of the Uniform 

Commercial Code to encourage the supplying of 

credit for the buying of goods by insulating the 

lender from lawsuits over the quality of the 

goods. But we conceive that the insulation 

was intended primarily for financial institutions 

rather than the manufacturer who finances his own 

sales. He needs no inducement to supply credit for 

the purchase of his goods because the whole object 

of his business is to sell his goods." 

The judgment of the district court is reversed. The cause 

is remanded for consideration of appellant's counterclaim. 

\ L. I , Justice 

- 

.' Chief Justice 

Justices