No. 13180 INTHE SUSREME COUKT OF THE STATE OF MONTANA 

### 1977

ARTHUR H. SANT and EDNA SANT,Plaintiffs and Appellants, 

### v. LAURA THELMA BARIL, AsAdministratrix of the Estate of A.R. SMITH, Deceased, Defendant and Respondent. And 

### LAURA THELMA BARIL, AsAdministratrix of the Estate of A.R. Smith, Deceased, Plaintiff and Respondent,

ROBERT SANT, Defendant and Appellant.

Appeal from: District Court of the FifthJudicial District, Honorable Peter Meloy, Judge presiding. Counsel of Record: For Appellants: Landoe, Gary and Planalp, Bozeman,Montana Robert Planalp argued, Bozeman, Montana For Respondent: Chester Lloyd Jones argued, Virginia City, Montana Douglas Smith argued, Sheridan, Montana.

Filed:

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### - Clerk. Submitted: March 9, 1977 Decided: 

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### I977Mr. JusticeGene B. Daly delivered the Opinion of the Court.

This appeal arises out of two causes of actionwhich were consolidated for trialby jury in the district court, Madison County. The first cause isa suit for damages under a land lease executed between lessors, A. R. Smith and Laura Smith, and lessee Arthur H. 'Sant. This suitwas brought by Arthur H. Sant and Edna Sant (Sants), against theAdministratrix of the Estate of A. R. Smith (Administratrix). Plaintiffs appeal from the district court granting defendant's motion todismiss, afterplaintiffs presented their case and rested. The second cause 

### isa suit to recover on a promissory note held by the First National Bank of Twin Bridges, Twin Bridges, Montana, and executed by the Sants and their son, Robert Sant. The promissory note was assigned tothe Administratrix and suit

was brought by theAdministratrix against Robert Sant. The district court treated this action as a counterclaim. Robert Sant appeals from the district court's order directing thejury to return a verdict for theAdministratrix. InFirst National Bank v. Sant, 161Mont. 376, 506 P.2d 835, this Court discussed some of the legalproblems existing in the present action. Asa means of introduction and clarification, we review our holding inthat case. InFirst National Bank v. Sant, supra, the Sants appealed from a district court judgment granting foreclosure on their real and personal property. This judgment of foreclosurewas rendered in favor of the FirstNational Bank of Twin Bridges which sought to foreclose on a mortgage executed by Arthur 

### H. Sant on July 

### 9, 1970, and held by the FirstNational Bank of Twin Bridges. The

### mortgage instrumentwas entitled "(Plan of ParisRobert)". Paris Robert was the president of the First National Bank ofTwinBridges. The plan purported to relieve the Sants of ldAbility for certain creditor debts and balances due the bank on existingnotes. This releasewas to be accomplished through the bank!s disbursement of fundsmade available to the Santsby virtue of their executing three promissorynotes. The notes were in the amounts of $17,690.62; $2,788.05; and $12,968.74, and each bearing interest at the rate of tenpercent per annum. Certain real and personal property of the Santswas listed as collateral for the mortgage and $50was chargedby the bank as an expense for organizing the credit plan and overseeing the payments. Theplanwas divisible into three parts with the promissory notes for $17,690.62 and $2,788.05 to mature February 

### 5, 1971; while the note for $12,968.74 matured onApril 

### 1,1971. At the time FirstNationalBankv. Santwas heard none of the promissory had been paid by the obligors. The notes for $2,788.05 and $12,968.74

were held by thebank and no actualdisbursementswere made to Continental Oil Co. via Russell Lepp, or to A. R. Smith, both listed as corresponding creditors to these notes. It is the $12,968.74 debtwhich confronts us in the instant case in the form of the July 9,1970promissory note and the assignment of that note. Theplan indicates the $12,968.74 debtwas a consolidation of debts owed by the Sants to

### A. R. Smith. Specifically,these debts are listed as 

### an old promissory note of $8,240; $728.74 in interest on this old note; and $4,000 consideration for a 1970 lease. These items are of importance later in this opinion.We held in FirstNational Bank v. Sant that thebank was barred from foreclosing on the promissory notes inthe amount of $2,788.05 and $12,968.74 and the Santswere entitled toa credit in the amount of $1,214.32 on the promissory note for $17,690.62. The basis for the $1,214.32 credit was the finding thatwhile thebank had charged $50 as expense for settingup the plan and had charged ten percent interest on the promissory notes, Paris Robert, as agent for the bank, had secretlynegotiated with the Sants' creditors for discounts or rebates as a collection fee. We found the bank's failure to disclose such negotiations

a breach of a duty owed the principal by his agent and held the Sants entitled to the amount of the rebates, $1,214.32. The basis for denying the bank foreclosure on the $2,788.05 and $12,968.74 promissory notes was the finding that the notes

were not supported by legalconsideration. For example, the $12,968.74 promissory note was purportedly executed to evidence debts owed by the Sants toA. R. Smith. However, the promissory note was drafted and held by the FirstNational Bank of Twin Bridges and executed by the Sants and Robert Sant. Since there has never been a showing of any oralor express trust, partnership, agency, joint venture or other such relationshipbetween A. R. Smith and thebank, the promissory note 

### isvoid for the purpose of establishing the $12,968.74 debt between A. R. Smith and the Sants. The only evidence of any agency relationship 

### is the penciled words "A.R.Smith Trust" which emboss the promissory note and were allegedly writtenby Paris Robert. In First National Bank v. Sant we set forth those policy reasons which directed why such evidence should not be equated with an express or oralagreement creating a partnership, agency, or trust relationship and, though we refrain from repeating those policy reasons here, we affirm thebask for that holding

# . -3-We note that First National Bank v. Sant never discussed the legal sufficiency of the debts embodied inthe $12,968.74 promissory note: "This holding does not affect any preexisting or present debt between Sant and Smith

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# *." 161Mont. 387. That case held only that the $12,968.74 promissory note could not be sued upon because it was not supported by legal consideration. Such a holding 

### isfatal to any attempt by the Administratrix here to collect on the same promissory note assignedby the bank, apparently without consideration. Any attempt by theAdministratrixto recover a debt of $12,968.74 must be by an action independent of the promissory note and must be proven by evidence establishing anobligee/obligor relationship. A suit to recover on .thepromissory note held by the bank and executed by the Sants and Robert Sant failsto establish such a debt. Therefore, we hold the district court erred when it directed thejury to return a verdict for theAdministratrix on the counterlclaim torecover on the promissory note and that action 

### is dismissed. The remaining issue 

### iswhether the districtcourt erred when it granted theAdministratrix' motion to dismiss afterthe Santshad presented their case and rested inthe action for damages under the land lease. We initiallyrecognize that counsel for theAdministratrix incorrectly moved for dismissal in thisjury trialand the district court inadvertently granted the motion. Rule 41(b), M.R.Civ.P., iscontrolling: "(b) INVOLUNTARY DISMISSAL--EFFECT THEREOF. For failure of the plaintiff toprosecute or to comply with these rules or,any order of court, a defendant may move for dismissal of an action or of any claim against him. After the plaintiff, in an action tried by the court without a jury, has completed the presentation of his evidence, the defendant, without waiving hisright to offer evidence inthe event the motion isnot granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the factsmay then determine them and render judgment against the plaintiff ormay decline to render any judgment until the close of allthe evidence, If the court renders judgment on the merits against the plaintiff, the court shallmake findings asprovided inRule 52(a). Unless the court in

### itsorder for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction or failure to join a party under Rule 19, operates as an adjudication upon the merits." ' 

### The Advisory Committee's note to the September 29, 1967 Amendment toRule 41(b), states:

IISource: F~~.R,,C~V.P. 41(b), as amended 1963and 1966. "Explanation of change: Under the prior text of the second sentence of this subdivision [Rule 41(b)

## 1, the motion for dismissal atthe close of the plaintiff's evidence may be made ina case tried to ajury aswell as ina case triedwithout ajury. But when made in ajury-tried case, thismotion overlaps the motion for a directed verdict under Rule 50(a), which isalso available inthe same situation, This overlap has caused confusion. Accordingly it 

### is amended to provide that the motion for dismissal atthe close of the plaintiff's evidence shallapply only tononjury cases (including cases triedwith an advisoryjury). Hereafter the correct motion injury-tried cases would be a motion for a directed verdict. This amendment.involvesno change of substance. "The first sentence of Rule 41(b), providing for dismissal for failure toprosecute or to comply with the Rules or any order of court, and the general provisions of the last sentence remain applicable injury aswell asnonjury cases. "This amendment also changes the last sentence of this subdivision to accord with the amendment to Rule;19,':

. (Emphasis added.) A motion for directed verdict was not offered inthe instant

case. However, both parties recognize the error and counsel treat the motion for dismissal as a motion for directed verdict in their briefs. Thus, forpurposes of this review we willlikewise treat the motion for dismissal as a motion for directed verdict under Rule 50(a), M,R.Civ.P.; 9Wright & Miller, Federal Practice andProcedure: Civil

### 5 2371; Warren v. Hudson Pulp & Paper Corp., 477 F.2d 229,232; Haugen v. Minnesota Mining and Manufacturing Co., 15Wash.App. 379, 550 P.2d 71. The basic rule governing our analysis of the granting of

a motion for directedverdict is setout in section 93-5205, R.C.M. 1947:"Where, upon the trialof an issueby a jury, the case presents only questions of law, thejudge may direct thejury to render a verdict infavor of theparty entitled thereto

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Case authority inMontana has established threebasic rules which apply in interpreting section 93-5205. 

### 1. Upon a motion fordirectedverdict in favor of defendant, the evidence introduced by plaintiff 

### willbe considered inthe lightmost favorable toplaintiff and asproving whatever it tends toprove. 2. A cause should never be withdrawn from thejury unless the conclusion sought tobe drawn from the factsmust follow as

a matter of law and recovery cannot be had upon any view which could be reasonably drawn from the factswhich the evidence tends toprove, 3, In reviewing an order directing a verdict fordefendant, the reviewing courtwillonly consider the evidence introduced by the plaintiff and if that evidence, viewed inthe lightmost favorable to the plaintiff, tends toestablish the case made by the plaintiff's pleadings the orderwillbe reversed. See: Hannifin v. Retail Clerks, 162Mont. 170, 511P.2d 982; Mdlerv.,Svejkovsky, 153Mont. 416, 458 P.2d 265; Pickett v. Kyger, 151Mont. 87, 439 P.2d 57; McIntosh 

### v. Linder-Kind Lumber Co., 144Mont, 

### 1, 393 P,2d 782, The test commonly employed to determine ifthe evidence 

### islegally sufficient towithdraw cases and issues from the jury is whether reasonable men could draw different conclusions from the evidence. Collins v. Itoh, 160Mont. 461, 503 P.2d 36; Hoffman v. Herzog, 158Mont. 296, 491 P.2d 713; Shields v. Murray, 156Mont. 493, 481 P.2d 680; Bridges v. Moritz, 149 Mont. 273, 425 P.2d 721. If only one conclusion is reasonably proper, then the directed verdict 

### isproper. In the instant case the Sants presented evidence in the district court which tended to prove: (1) That a written lease for the years 1966 through 1968was executed between the lessors, A. R. Smith and Laura Smith, and the lessee, Arthur H. Sant; (2) that the written leasewas orally extended for a period of two years, through April 1971; (3) that the terms of the lease provided the lessee was entitled to the exclusive possession and control of the leased premises, including a house on the leased property; (4) that the Britton family was a tenant of the Sants, residing in the house on the leased property, and the Sants were legally within their rights inattempting to evict the Brittons; 

### (5) that A. R. Smith and members of his family restrained the Sants from evicting the Brittons, and thus interferedwith the 

### ants' exclusive possession of the premises; (6) that interference with the 

### ants' exclusive possession of the premises was a violation of the lease provisions; (7) that as a result of the 

### ants' inability to evict the Brittons the Santswere unable to house employees who could work in the Sants' potato fields; (8) that as a result of the Sants' inability tohouse employees their unattended potato crop for the 1970 crop season was damaged by disease, substantially affecting the sale price of the crop; 

### (9) that the Sants' incurred monetary damages resulting from thediseasedc~~n~dition 3-f:Eheir potaco crop, the spread of the disease being proximately caused by A. R. Smith and members of his family by preventing the Sants from providing housing for 2mployees. In establishing their case the Sants presented evidence in ihs 2orm of : (1) The written lease and option executed by che lessors and lessee; (2) the testimony of workers who testified they and their families were prepared towork for the Sants and aid in saving the Sants' diseased potato crop, but were compelled to find other employment when the Santswere unable to supply housing; 

### (3) the testimony of horticulture experts who testified regarding theblackleg diseasewhich infected the Sants' 1970potato crop and the potential for recovering certification of the potato crop by manual roguing of thepotato plants. The evidence, when viewed inthe light most favorable to the Sants, could persuade reasonable men toconclude the damages incurred by the Santswas attributable toA. R. smith's alleged interferencewith the Sants' exclusivepossession of the leased premises. The evidence clearlypresents questions of fact as to the proximate cause of the damages incurred by the Sants in the 1970 crop season. In any event, theAdministratrix was not entitled tojudgment as a matter of law. Therefore, the district court

## 's order and judgment granting the Administratrix' motion to dismiss 

### is reversed and the cause is remanded for trialon the issues. We note the record fails to disclose any payment by the Sants on the purported oral lease for the 1970 crop season. Absent proof of payment, any potentialrecovery by the Sants for damages would be setoff agair~sc the lease consideration. The judgment of the district court is reversed and the cause is remanded, consistent with this opinion. 4

4' Justice.

We Concur: -1 /.