No. 85-539 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1987 

FIRST NATIONAL BANK OF EKALAKA, 

Appellant, Intervenor, 

-vsPEGGY C. STRAIT now HEREFORD, 

Plaintiff, Respondent, 

-vsFRANCIS J. STRAIT, JR., 

~efkndant , Respondent. 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable James B. Wheelis, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Richard 0. Harkins, Ekalaka, Montana 

For Respondents: 

Rex Palmer, Missoula, Montana 

Richard Reep, Missoula, Montana 

Submitted on Briefs: Sept. 30, 1986 

Decided: February 5, 1987 

Filed: FEB 5 - 1987 

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Clerk 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

The First National Bank of Ekalaka, Montana, petitioned 

for a writ of review for the purpose of reviewing a contempt 

judgment and fine levied against it by the Fourth Judicial 

District in and for the County of Missoula. We granted the 

writ and heard oral argument. The contempt order is vacated. 

The matter began as a divorce action in March, 1958, 

wherein a child support order was entered in favor of the 

wife, (Hereford) . The husband (Strait) failed to make many 

of the payments required of him in the order. At a hearing 

in September, 1974, to determine his total arrearage, the 

court determined he owed $5,044 plus interest, and judgment 

was entered. Because the children were then adults, no 

support accrued thereafter. Hereford filed a motion in the 

Fourth Judicial District March 26, 1982, for leave to 

execute, pursuant to 5 25-13-102, MCA. The motion was 

noticed and heard. Leave to execute was granted until 

October 30, 1984. Subsequently, the court has issued several 

writs of execution which have not been satisfied. 

A writ of execution issued May 10, 1984, in the amount 

of $9,619.52 was served May 30 on the First National Bank of 

Ekalaka (Bank) where Strait was a customer, demanding all 

funds held by the Bank for Strait. There were, however, no 

funds in any of Strait's accounts. Several days later the 

sheriff, learning that the Bank had taken two of Strait's 

vehicles into possession, again served execution upon the 

Bank for release of these vehicles. A Bank officer refused 

to relinquish them until the Bank received tender of the 

amount of the Bank's security interest in the vehicles. The 

officer did not reveal the amount of its security interest. 
The Bank petitioned this Court for a writ of review of 

an order of the District Court holding it in contempt for 

refusing to release the vehicles and levying a fine of $500 

against it. We agreed to hear oral argument on the 

application. 

Although the Rank raises several issues in its brief, it 

does not have standing to do so, because it is not in this 

Court on appeal, S 27-25-102 (I), MCA, nor is it a party 

aggrieved. Rule 1, M.R.App.Civ.P. See also Montana Power 

Co. v. Montana Department of Public Service Regulation 

(Mont. 1985), 709 P.2d 995, 42 St.Rep. 1750. 

The scope of review on a writ cannot be extended further 

than to determine whether the District Court has exceeded its 

authority. Section 27-25-303, MCA. See also State ex rel. 

Porter v. First Judicial District (1950), 123 Mont. 447, 215 

P.2d 279, and State ex rel. Lay v. District Court (1948), 122 

Mont. 61, 198 P.2d 761. On the facts of this case we have 

determined the court exceeded its authority in holding the 

Bank in contempt. 

On May 30, 1984, writ of execution was served upon the 

Bank demanding payment of the balance owing to Hereford. The 

return of execution shows that there were no funds for delivery by the Bank to the sheriff and the writ was returned 

unsatisfied. At the same time service of the writ was made 

upon the Bank, the sheriff delivered to the Bank a letter 

from Hereford's attorney addressed to the Bank. The letter 

is extremely confusing and contradictory. The attorney 

explains that he represents Hereford, who is seeking to 

satisfy a judgment against Strait. He is having difficulty 

collecting the amount of the judgment, and suggests the Bank 

can help him. He mentions that he understands Strait engages 

in certain periodic banking transactions and further 

understands that Strait has accounts at the Bank, has 
borrowed money and even may have secured the money with 

vehicles or other property. He then makes the following 

request : 

You can assist me in collecting the 

Judgement [sic] by providing me with as 

much information as you have on the 

Judgement [sic] debtors [sic] financial 

status and the status of the repayment of 

any loans you have made to the Judgement 

[sic] debtor. Please provide me with a 

list of all the accounts which the 

Judgement [sic] debtor currently has with 

you, including account numbers and 

current balances. It would certainly 

help if you would tell me when deposits 

are generally made into the judgement 

[sic] debtors [sic] accounts. Please 

also provide me with copies of all 

financial statements which the Judgement 

[sic] debtor has completed when applying 

for loans at your bank. 

He asked for information about loans, including amounts 

and dates, advancements of money, security interest 

description of advances, method of payment, whether cash or 

by check, amount applied to principal and amount applied to 

interest, account number of the check by which payment was 

made, and the balance remaining due and unpaid. He asked the 

Bank to file affidavits with the Registrar's Bureau in Deer 

Lodge for each vehicle, and with the County Clerk and 

Recorder for other security. He said it was not that he did 

not trust the Bank, but this would provide an independent 

source of verification when he sent the sheriff to execute on 

the judgment. Finally, he set forth the following paragraph: 

I can tell you in all candor that I 

believe the Judgement [sic] debtor is 

trying to avoid paying the debt to my 

client. The Judgement [sic] debtor might 

object to your providing me with any 

information if you contact him before 

providing me with the information which I 
have requested in this letter, so if you 

will respond as quickly as possible, the 

Judge's Order will have the best chance 

of being enforced. 

Thank you for your assistance, your help 

will aid greatly in collecting the 

Judgement [sic]. 

In its findings of fact, the District Court concluded 

that this letter constituted notice sufficient to meet the 

requirements of S 25-13-506, MCA, which says in pertinent 

part: 

Duty of secured party. The secured party 

under any security agreement of record, 

shall, upon 15 days notice in writing 

served upon him in person . . . seeking 

to satisfy a judgment . . . be required 

to make and file . . . an affidavit 

showing the amount of the indebtedness 

then actually due and owing . . . If 

within 15 days from the service of any 

such demand . . . the secured party shall 

fail, refuse, or neglect to file the 

affidavit herein required, the security 

agreement shall be of no force or effect 

as against such creditor upon the seizure 

of any such personal property on 

execution. 

Because the Bank failed to file the affidavits as provided in 

the code section, the District Court concluded that its 

security interest ceased June 15, 1986. Thus, when a 

subsequent writ of execution was served June 28, 1986, the 

District Court determined the Bank was required to deliver 

the vehicles which were covered by its security interests. 

Because it failed to do so, the District Court found the Bank 

in contempt. 

There is no dispute as to the security interest of the 

Bank. It properly had purchase money security interests in 
the vehicles which the sheriff sought to seize by writ of 

execution. 

The Bank argues it is error for the court to hold it in 

contempt, because the order is based on the assumption the 

Bank forfeited its liens in the vehicles and therefore had no 

right to hold the vehicles under the execution order. 

We conclude that the letter to the Bank from Hereford's 

attorney was insufficient to constitute the notice to the 

secured party required in S 25-13-506, MCA. Therefore the 

Bank did not lose its security interest in the vehicles under 

the forfeiture provisions of that code section. 

We emphasize the nature of the letter. It asked for 

financial information which the Bank could not properly give. 

Clearly this is inconsistent with the notice and demand under 

§ 25-13-506, MCA. While it is true that one paragraph could 

be construed as a demand under that section, it is not characterized as a request or demand under the code section. The 

Rank easily could have failed to construe the letter to be 

that type of a notice or demand. In addition, the statements 

by Hereford's attorney that Strait might object to the Bank's 

providing information and requesting as quick a response as 

possible--apparently without notification to its customer, 

Strait--are totally inappropriate. Thus it was an abuse of 

discretion to find this notice sufficient for purposes of 

holding the Bank in contempt for failure to release the 

vehicles. 

Section 25-13-506, MCA, provides very severe 

consequences when it destroys an existing security interest 

lien and provides that the security agreement shall be of no 

further force and effect. We conclude the letter of 

Hereford's attorney is not sufficient to constitute the 

notice necessary to bring into effect these severe penalties. 
We therefore vacate the District Court's order of 

October 1, 1985, holding the Bank in contempt.