### 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 

### JudicialDistrict, Honorable LeRoy 

### L. McKinnon, Judge presiding. Counsel of Record: ForAppellant: 

### James C. 

### Wilkins, 

### Jr. argued, Lewistown, Montana ForRespondent

### : Leonard H. 

### McKinney argued, Lewistown, Montana

Submitted: February 

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

## 24

# 1976

C,- 

### Filed:,!i,;i 

## 2 A- 

### :-fcMr. Justice John Conway Harrison delivered the Opinion of the Court. This is an appeal from a judgment for plaintiff entered inthe districtcourt, Fergus County. Plaintiff Massey-Ferguson Credit Corporation brought the action torecover the balance due

on a retail installment contract involving the saleof farm machinery. Trial was held October 

### 4, 1974, before Hon. LeRoy L. McKinnon, sittingwithout a jury. Judgment was entered on April 9, 1975 for plaintiff. Defendant Bruce Brown appeals from thatjudgment. Appellant Brown isa local farmer and rancher inthe Lewistown, Montana,area. Respondent is the assignee of the former Dan Morrison & Sons, a now defunctMassey-Ferguson 

### implement dealer inthe cityof Lewistown. In earlyAugust, 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 hisdealings with the former owner, one BillSeilstad. 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 themachine's deficiencies and Morrison promised torepair them. On August 22, 1970, a purchase order was signed and themachine

was delivered toBrown several days later. Brown used themachine to cut a few acres of barley, but a broken shaftmade further use of themachine impossible. Several weeks 

### later, approximately October 1, 1970, Brown repaired themachine and again began to cut, but problems with the combine forced him to stopbefore fifteen acres had been covered. Throughout the period between August 22, 1970 and October 1, 1970, Morrison made severalvisits toappellant's ranch inhopes of securing his signature on a retail sales agreement,

### but without success. On October 2, 

### 1970 Brown went totown and told Morrison that he could not accept themachine. Appellant's reasons for thisdecision and his testimony concerning the eventswhich thereafter occurred appear in therecord: "A. The work that it 

### needed done and the condition that it 

### was in, and Don said they would fixallthis, and I 

### wasn't very interested in the deal yet, but anyway, he wrote down allthe stuff I 

### said that needed done, and he guaranteed that it 

### would be done, and 

## - "Q. 

### Who wrote thisdown? A. 

### Don did. 

## * * 

# * "Q. 

### And he got the information from whom? A. As 

### towhat todo? "Q. 

### Right. A. I 

### did. I 

### was the one that told him what was needed done orwhat I 

### feltneeded tobe done, and he said there is

### no problem. "Q. 

### Is 

### this atthe time you signed the contract? A. 

### This was actually, probably fifteenminutes prior tome signing the contract. "Q. 

### Did Mr. 

### Koch [Massey-Ferguson representative and witness tothe sales contract] take any part, make any comments or say or do anything? A. He 

### said that he had been with Massey for somany years and that he knew Don, 

## * * * and he said you know hisword isgood. If he says he's going to fixit,

### he'll fix 

### it." The items tobe repaired were apparentlywritten down, but never made a part of the contract. There is, 

### however, no question that these representations or promises torepair themachine were in factmade, as they were never denied by Morrison and the abovequoted testimony appears in therecord without objection. Several days after the contract was signed, Morrison sent 

### a mechanic out torepair the combine, but for some reason he did not repair it. 

### The machine was never repaired. ~uring the summer 1971, Morrison closed hisbusiness asa farm implement dealer. On July 14, 

### 1971, Morrison wrote appellant toinform him of this fact, and tooffer the services of another implement dealer to repair themachine, but a satisfactoryarrangement could not be made.The contract, which had been assigned torespondent

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 tomake any payment on the agreement, and on December 9, 1971, wrote the respondent inan attempt to explain hisposition. 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 inthe repair of the combine. Two basic issues ariseon appeal: 1) Did the seller breach and render unenforceable his contract with the buyer in failingtoperform his promise to repair. 2) May this defense be validly asserted against seller's assigneeunder 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 isprovable in a court of 

### law. Section 87A-2-202, R.C.M. 1947, provides: "Final written expression--par01 or extrinsic evidence. Terms with respect towhich the confirmatorymemoranda of the parties agree or which are otherwise 

### set forth ina writing intended by the parties as a final expression of their agreement with respect to such 

### terms asare 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 thewriting to have been intended also as a complete, and exclusive statement of the terms of the agreement."

### The Uniform Commercial Code asadopted inMontana, operates to exclude extrinsic or parol evidence only where the district court finds that the writing 

### is, on its face, a fulland final integration of the parties embracing allthe terms of the agreement, orwhere the evidence offered 

### is inconsistent or contradictory tothe 

### termsof the written instrument. Martel Construction Inc. v. Gleason Equipment, Inc., 166Mont. 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 toexclude evidence of the promise torepair. Here

### the districtcourt did not find the writing 

### was
a full and final integration of the parties. Rather, the court specifically found "the sellerspromised tomake necessary repairs". In lightof the testimony and exhibits, it 

### isclear the district court could not reasonably findotherwise. While the parol evidence issuewas raised by respondent in 

### its trialbrief, 

### all testimony and exhibitswhich 

### were offered toprove the existence of an independent agreement torepair 

### were admitted without objection. As 

### a result the record not only contains appellant's testimony regarding the agreement torepair, but several admissions by the 

### seller, inopen court, affirming the agreement: "Dave Morrison: "A. 

### This was the day that I 

### informed Bruce [appellant] that

### wewould take careof the combine and we would make arrangements for the combine tobe 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 

### applicabilitytothe facts of thiscase. Here the failure toobject atthe time the evidence was offered was fatal, especiallywhere respondent was firsttointroduce parolevidence 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 ismade topreserve it atthe 

### time it 

### isoffered. 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 thisdefense can be applied torespondent, 

### 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) 

### willnot 

### set up any claim, or defensewhich he may have against the 

### seller as a defense 

## * * * inany action

## * * * by the seller's assignee." The enforceability of covenants of thistype 

### isgoverned by section 87A-9-206(1), R.C.M. 1947, which provides inpertinent part: 

### " 

## * * 

## * an agreement by a buyer or lessee that he willnot 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, ingood faithand 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, atleast to some degree, inmaking the sale by orally affirming the 

### seller's promises to appellant buyer. It isclear from the exhibits that the contract 

### was executed and assigned atabout the same time and upon the same instrument, and the blank form sales contract employed 

### was inthiscase 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),470S.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 inMassey-Ferguson, Inc. v. Utley, (KY. 1969)I

"We consider 

### it tobe the policy of the Uniform Commercial Code toencourage the supplying of credit for the buying of goods by insulating the lender from lawsuits over the qualityof 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 creditfor thepurchase of his goods because the whole object of his business 

### is to sell his goods." The judgment of the districtcourt 

### isreversed. The cause isremanded for consideration of appellant's counterclaim.

\ L. I , Justice



### - .'Chief Justice

Justices