No. 13395 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

BILLINGS LEASING CO., 

a Montana Corporation, 

Plaintiff and Appellant, 

-vsJEROLD PAYNE , 

Defendant and Respondent. 

Appeal from: District Court of the Thirteenth Judicial 

District 

Honorable Jack D. Shanstrom, Judge presiding. 

Counsel of Record: 

For Appellant: 

R. P. Ryan argued, Billings, Montana 

For Respondent: 

Brown Bnd Huss, Miles City, Montana 

George Huss argued, Miles City, Montana 

Brandt, Miller, Nelson & Chrisopherson, Salt Lake 

City, Utah 

Robert W. Miller argued, Salt Lake City, Utah 

Submitted: September 13, 1977 

Decided: hrF( 1: 1978 
Mr. Justice Daniel J. Shea delivered the Opinion of the Court. 

Plaintiff Eillings Leasing Co. appeals from a jury verdict 

and judgment in the Yellowstone County District Court denying its 

claim and awarding $9,194.25 to defendant Payne on his counterclaim. 

As we attempt to unscramble the issues raised on appeal, 

we find that neither party had a coherent theory of recovery which 

was presented to the jury and covered by jury instructions. For 

this reason it is extremely difficult to analyze most of the issues 

raised on appeal. However, we do agree with Billings Leasing that 

there was a complete failure to instruct the jury on damages with 

relation to Payne's counterclaims, and for this reason we must 

reverse. Because there were additional errors in the instructions, 

we will discuss a few of these matters which hopefully will give 

some guidance for the retrial of this cause. 

This case arises from a lease agreement between Billings 

Leasing and Jerald Payne whereby Payne leased for five years a 

new Renworth truck at $750.00 per month for the first 30 months 

and $550.00 per month for the second 30 months. Payne fell several 

payments behind within a year of the time he leased the truck, 

and there were several contacts between him and Billings Leasing 

in an effort to bring the payments up-to-date. These contacts 

form part of the dispute in this case because Payne alleges that 

Billings Leasing extended or waived the time within which he was 

to make the payments in dispute, although Payne did not plead 

extension or waiver as an affirmative defense. 

In any event, satisfactory arrangements were not made, 

and Billings Leasing sued Payne in a debt action for back rent on 

the truck. Later, in the same debt action, Billings Leasing 

obtained a writ of attachment and garnished Payne's wages in the 

amount of $2,433.00. This money was deposited with the p ell ow stone 

Countyclerk of court pending the outcome of litigation. 
Shortly after it filed the debt action, Billings Leasing, 

in a separate action, filed a claim and delivery action and obtained 

possession of the truck because Payne refused to voluntarily give 

up possession of the truck. Billings Leasing claimed it was 

entitled to possession under the terms of the leasing agreement. 

Without notifying Payne that it intended to sell the truck, Billings 

Leasing sold it at a private sale and realized $20,000.00 from the 

sale. 

Payne filed two counterclaims in each of the actions. In 

the debt action he alleged that Billings Leasing had wrongfully 

obtained possession of the truck in the claim and delivery action. 

He claimed that the truck was repossessed without notice to him 

which violated his rights to due process of law. He also alleged 

in the same counterclaim that he was damaged in the amount of 

$6,OOO.OO because the private sale was not conducted in a commercially reasonable manner. He did not allege that he was also 

damaged because it was conducted without notice to him. The 

second counterclaim in the debt action alleged that the writ of 

attachment garnishing Payne's wages was an unlawful abuse of process because it was issued without notice to him and therefore 

deprived him of due process of law. He sought damages in the 

amount of $2,433.00, which was the amount of the wage garnishment, 

and interest on that amount from the date his wages were seized. 

Payne's counterclaims in the claim and delivery action were essentially the same as those he filed in the debt action. The debt 

and 

actiodthe counterclaim were consolidated for trial by jury. 

It is not at all clear how Payne was proceeding during 

trial on his counterclaims for damages. The claims he now asserts 

were not clearly set out in his pleadings; there was no pretrial 

conference or order; and he offered no instructions on the damages 

that he now is claiming. In his brief, he argues that there were 
three separate claims of damages. The first damage claim is that 

Payne was damaged in the debt action by the wrongful attachment 

in the amount of $2,433.00. Payne did not ask for the return of 

the $2,433.00 in his counterclaim; rather, he asked for damages in 

that amount in addition to interest from the date of attachment. 

The second claim of damages is that he was deprived of a truck 

for four months before he could obtain another one and that he 

lost $4,000.00 net income as a result of the wrongful repossession. 

Payne testified to this without objection from Billings Leasing. 

The third claim of damage is that Payne was damaged in the amount 

of $3,500.00 by the failure of Billings Leasing to sell the truck 

in a commercially reasonable manner, in violation of section 87A9-504(3), R.C.M. 1947, which is part of the Uniform Commerical Code 

as adopted in this state. 

Payne seeks to justify the jury verdict in the amount of 

$9,194.25 on the basis that the damages testified to at trial 

amounted to more than the jury awarded and therefore the jury was 

well within the evidence in returning its verdict. However, the 

claim of Billings Leasing is not that the award was excessive. It 

is that Payne offered no instructions on the elements of damages 

he was seeking, and the trial court refused to instruct the jury 

on the elements of damages. We discuss first the misleading and 

incomplete instructions covering the issues raised by ~ayne's 

counterclaims, and then we discuss the failure to instruct the 

jury on damages. 

We note at the outset that this was clearly a case calling 

for a pretrial conference under Rule 16, M.R.Civ.P., but none was 

held. As a result, this case went to trial with neither counsel 

for the parties nor the trial judge having a grasp of the legal 

issues. 

At the close of the trial Billings Leasing moved for judgment as a matter of law on its claim for the back lease installments 
for the truck. It was denied. The trial court did rule, however, 

that Payne's allegations of unconstitutional attachment and unconstitutional repossession of the truck could not go to the jury, 

and he specifically instructed the jury not to consider those claims. 

As a result of this ruling, Billings Leasing argues that 

the only remaining counterclaim was Payne's contention that he was 

damaged in the amount of $6,000.00 because of the failure of Billings 

Leasing to conduct the sale of the truck in a commercially reasonable 

manner. Payne, on the other hand, argues that other damages are 

still in the case because of waiver. Waiver applies, he contends, 

because Billings Leasing waived the payment dates on which the installments were due and no new times were set for making the payments; 

therefore, the payments were not due at the time Billings Leasing 

attached Payne's wages and repossessed his truck. Accordingly, 

Payne argues, it was unlawful for Billings Leasing to attach his 

wages and to repossess his truck. 

Payne did not urge waiver as an affirmative defense to the 

action brought by Billings Leasing as required under Rule 8(c), 

M.R.Civ.P. Neither did he assert waiver in his counterclaim as a 

basis to claim that his wages were unlawfully attached and his 

truck unlawfully repossessed. Rather, his claims for unlawful 

attachment and unlawful repossession were based solely on denials 

of due process, and the District Court dismissed those counterclaims. 

Despite these limitations, waiver was considered throughout the trial, 

although we are not certain from the record of exactly how it was 

urged to apply. The jury was also instructed on the elements of 

waiver. Accordingly, we are reluctant to hold that Eillings Leasing 

was not aware of the allegations of damages arising from Payne's 

claims of waiver. 

Billings Leasing also argues that under section 87A-1-107, 

R.C.M. 1947, of the Uniform Commercial Code, a waiver can only exist 
if it is in writing. But that section does not exclude an oral 

waiver. It simply allows a written waiver to be enforced even 

though it is not supported by consideration. Moreover, the official 

comment to 1 Uniform Laws Annotated, Vol. 1, 51-107, states that 

" * * * this Act fully recognizes the effectiveness of waiver and 

estoppel." See also United States v. Greenwich Mill & Elevator Co., 

(D.C. Ohio, 1968), 291 F.Supp. 609, 614. Nor has this Court, in 

analogous situations to this before the enactment of the Uniform 

Commercial Code, required that a waiver be in writing. Hewitt v. 

Novak, (1945), 117 Mont. 365, 370-372, 158 P.2d 627. 

We next discuss the principle instruction stating the issues 

raised by Payne's counterclaims. It was totally inadequate as a 

statement of the law and could only have caused jury confusion. 

This instruction reads: 

"Before you may find in favor of defendant, 

JERALD PAYNE, on his counterclaim, you must find 

that one of the following propositions is true: 

"1. That Plaintiff extended the time for 

payments or waived the requirements for timely 

payments without notice to Defendant to the 

contrary. 

"2. That the Lease Agreement was an 

agreement to purchase and that: 

"(a) Plaintiff failed to send notice to 

Defendant about the sale of the tractor; 

or I 

"(b) Plaintiff did not conduct the sale 

in a commercially reasonable manner. 

"If you find that either proposition 1 or 

2 is true, you may award Defendant such damages 

as are allowed under the other instructions herein." 

This instruction permitted the jury to award damages to Payne 

if they found either proposition 1 or proposition 2 to be true. It 

allowed the jury to award "such damages as are allowed under the 

other instructions herein." However, the only other instruction 

on damages was one simply telling the jury it could award no more 

than Payne's prayer for relief in the amount of $9.194.25. There 
were no instructions defining the elements of damages for each 

claim and there were no instructions limiting the damages for the 

separate claims of unlawful attachment, unlawful repossession, and 

failure to sell in a commercially reasonable manner. Under these 

circumstances, it is not surprising that the jury's verdict was 

exactly $9.194.25. 

We consider first the matter of waiver or extension of the 

installment payments and. how it applied to Payne's separate counterclaims. A jury finding of waiver of the times for making the installment payments was not necessary for Payne to recover on his counterclaim of failure to sell the truck in a commercially reasonable 

manner. On the other hand, a finding of waiver was essential if 

the jury was to find for Payne on his claim of damages because of 

wrongful attachment and wrongful repossession of the truck. Obviously, 

if Billings Leasing did not waive the time for payment of the truck 

installments it would not have been unlawful (being that the constitutional counterclaims concerning due process were dismissed) 

for Billings Leasing to attach Payne's wages or to repossess the 

truck. 

The failure of the instruction in not tying the waiver into 

wrongful attachment and wrongful repossession allowed the jury to 

award Payne all the damages he alleged. Thus, on this basis, the 

jury could well have awarded damages to Payne for his claim of 

failure to sell in a commercially reasonable manner. For the instruction on waiver to be proper, the jury should have been told 

that it related only to Payne's claims of wrongful attachment and 

wrongful repossession. 

Likewise, the instruction is similarly deficient in paragraph 2(a) by allowing the jury to award all the damages alleged 

if it found that the agreement involved was one to purchase and 

that Billings Leasing did not send advance notice to Payne about the 

sale of the truck. Clearly, the failure of Billings Leasing to send 
notice to Payne 

/before the sale does not by itself entitle Payne to damages. ~ailure 

to send notice does not in any way establish either a wrongful attachment or wrongful repossession, both of which had already occurred. 

Those were two entirely separate counterclaims. Moreover, if there 

was a separate claim that Payne was damaged solely because Billings 

Leasing failed to give notice to Payne of its intent to sell the 

truck, it was not raised in the pleadings. Nor did the evidence at 

trial indicate that failure to give notice was a separate claim for 

damages. 

Under paragraph 2(b) of the instruction, the jury could 

award damages to Payne if it found an agreement to purchase coupled 

with a failure to sell the truck in a commercially reasonable manner. 

Even if the jury could find damages resulting from a failure to 

sell in a commercially reasonable manner, the jury could not also 

for the same reason award damages for wrongful attachment and wrongful repossession. Again, those were two separate counterclaims 

which would arise only upon a finding of waiver and also that Payne 

was damaged as a result. 

In his brief Payne seeks to justify part of the jury award 

as damages for wrongful attachment and another part of the award 

as damages for wrongful repossession. Not one instruction defined 

attachment or wrongful attachment or attempted to place them within 

the issues of the case. The same can be said for the claim of 

damages for wrongful repossession of the truck. 

As previously indicated, the record is barren of instructions defining the separate elements of damages which Payne claims 

he suffered. At the close of the case and during the settlement 

of jury instructions, counsel for Billings Leasing twice emphatically 

reminded the court and Payne's counsel that there were no instructions on damages and stated that the jury should not be allowed to 

speculate on the damages with no guidelines. Payne's counsel and 

the trial court ignored these warnings, and the case went to the 

jury with no guidelines. 
The duty of the trial court to instruct the jury has been 

generally recognized as one that is necessary and inherent in the 

court. An excellent work written for trial judges, McBride, - The 

Art of Instructing the Jury (1969, Anderson Publishing Co.) states 

at page 16: 

"Today, the law in nearly all states 

requires the judge to instruct the jury. Even 

in the absence of statute or rule, the duty to 

do so without request is not only obvious and 

necessary but it is a power inherent in the 

court. I' 

McBri.de further emphasizes the need for jury instructions by quoting 

from California Jury Instructions (Criminal, page 8) at page 17: 

" * * * 'In instructing the jurors, we must 

assume that they have no knowledge of the rules 

of law and that therefore, they must be instructed 

on all points of law which, under any reasonable 

theory, might be involved in their deliberations, 

to the end that their decision will be according 

to the law and the evidence and untinged by any 

private and possibly false opinion of the law that 

they entertain.'" 

While the necessity to instruct and to properly instruct is 

no doubt greater in a criminal case because of the fundamental constitutional protections, the above statement serves to underline 

the importance of the trial judge's function to instruct the jury 

in all cases--civil as well as criminal. That duty cannot be 

delegated to counsel. 

Jury instructions are crucial to a jury's understanding 

of the case and, unfortunately, counsel cannot always be relied 

upon to provide those instructions. In Wright & Miller, Federal 

Practice and Procedure, Civil S2556, the duty of the trial judge 

is stated: 

"It is the inescapable duty of the trial 

judge to instruct the jurors, fully and correctly, on the applicable law of the case, and 

to guide, direct, and assist them toward an 

intelligent understanding of the legal and 

factual issues involved in their search for 

truth. The court must instruct the jury 

properly on the controlling issues in the 

- case even though there has been no request for 

an instruction or - -- ~ the instruction requested is 

defective." (Emphasis added.) 
Moreover, there is a statutory duty in this state to instruct the 

jury, imposed by section 93-5101(6), R.C.M. 1947, which provides: 

"When instructions have been passed upon 

and settled by the court, and before the arguments of counsel to the jury have begun, the 

court shall charge the jury in writing, giving 

in such charge only such instructions as are 

passed upon and settled at such settlement. 

1n charging the jury, the court shall give 

1 

to them all matters of law which it thinks 

verdict. " (Emphasis added. ) 

In Zanos v. Great Northern Ry. Co., (1921), 60 Mont. 17, 22, 

198 P. 138, this Court construed Section 6746, a predecessor to 

section 93-5101, and stated there are at least minimum standards 

to which a trial judge must adhere when instructing the jury: 

" * * * It may be stated as a general rule 

that where the instruction, in appropriate 

language, calls the attention of the jury to 

the subject matter to be considered and fairly 

states and presents the questions to be determined, it is sufficient. - Section 6746, Revised 

Codes, does not require more than this of the 

court's own motion. If, in such a case, a more 

specific instruction than that given is desired 

by a party, it is his duty to tender one, or to 

tender a modification of the one given. It is 

not sufficient merely to demand that the court 

do it. * * *n (Emphasis added.) 

Nor do we believe that Rule 51, M.R.Civ.P., dilutes these 

minimum responsibilities. The rule provides in pertinent part 

that " * * * No party may assign as error the failure to instruct 

on any point of law unless he offers an instruction thereon." This 

rule was designed to place a burden on counsel to present the proper 

instructions to the trial court; it was not designed to water-down 

the minimum duties of the trial court to instruct the jury. 

There are other errors in the instructions, but we feel 

those we have mentioned are sufficient to demonstrate that there 

was a complete failure to instruct the jury on damages and a failure 

to properly instruct the jury on the issues relating to Payne's 

counterclaims. 
We vacate the judgment of the District Court and remand 

for a new trial consistent with this opinion. 

We Concur: 

Justices 

Mr. Chief Justice Frank I. Haswell, specially concurring. 

I concur in the result in this case granting a new trial. 

~*07norlte, Wddm 

chief Justice