No. 80-116 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1980 

DONALD L. JEFFERY, 

Plaintiff and Appellant, 

VS . 

NORRIS M. NEVILLE, 

Defendant and Respondent. 

Appeal from: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin. 

Honorable W. W. Lessley, Judge presiding. 

Counsel of Record: 

For Appellant: 

Steven D. Nelson, Bozeman, Montana 

For Respondent : 

Landoe, Brown Law Firm, Bozeman, Montana 

Submitted on briefs: November 19, 1980 

Filed: 

Clerk 
Mr. Justice John Conway Harrison delivered the Opinion of 

the Court. 

This is an appeal from a judgment in a damage action 

entered by the District Court of the Eighteenth Judicial 

District, Gallatin County, the Honorable W. W. Lessley 

presiding. Plaintiff alleged he suffered damages by defendant's breach of an agreement to sell a log cabin. The 

District Court entered judgment in favor of defendant, and 

plaintiff appeals. 

Respondent-defendant Neville purchased the Pine Cone 

Motel in West Yellowstone, Montana, in the spring of 1978. 

On the premises of the Pine Cone Motel was an old log cabin 

approximately twenty by thirty-two feet in dimensions. 

Respondent, in an effort to sell the property, decided that 

the log cabin should be removed from the property. He 

advertised in the West Yellowstone area that he had a log 

cabin to be sold and removed, as soon as possible, so that 

further construction could begin at the motel. 

Plaintiff-appellant contacted respondent about buying 

the log cabin. On June 20, 1978, they entered into an oral 

agreement for the sale and purchase of the log cabin. 

Appellant paid respondent $500 for the cabin. Respondent 

told appellant that the log cabin was to be removed from the 

lot as soon as possible. Appellant, soon after June 20, 

began to tear down the log cabin and remove parts of it from 

the property . 

Appellant and several employees removed an estimated 40 

to 50 percent of the logs from the property along with other 

parts of the cabin and transported them to another motel 

whose owner was to purchase the logs from appellant. For 

some reason, a period of time elapsed after this initial 
removal in which no efforts were made to either remove or 

clean up the remaining debris on the site. Respondent, 

believing that appellant had removed the portions of the log 

cabin for which he had use, thought that the rest of the 

debris was to be destroyed. 

Approximately a month after the agreement was made, 

respondent sold the Pine Cone Motel to Boyd Williams of 

Blackfoot, Idaho. At that time the debris and the remaining 

portion of the log cabin were removed from the lot. 

Approximately a week after respondent and appellant 

entered into their agreement to sell the cabin, appellant 

entered into an agreement with Tom Clark for the sale of the 

log cabin for approximately $7,900. Appellant expected a 

profit of at least $6,000 from this sale. 

Appellant alleges that he suffered damages from the 

loss of profits; from having to hire the logs hauled from 

the cabin; and for the work of employees that he used to 

tear down the cabin. There was no showing that respondent, 

at the time he sold the cabin to appellant, had any knowledge that appellant intended to resell the cabin; nor did 

appellant notify respondent that he had entered into an 

agreement to sell the cabin. 

The District Court, sitting without a jury, found: (1) 

that a condition of the June 20, 1978, agreement was that 

the log cabin be removed by appellant as soon as possible; 

(2) appellant breached the agreement of June 20, 1978; (3) 

respondent had no knowledge of the agreement between appellant and Tom Clark for the resale of the log cabin; (4) 

respondent did not contemplate that if a breach occurred in 

the June 20, 1978 agreement, a nondefaulting party would be 

awarded a loss of profits; (5) the lost profits of appellant 
from the collateral contract with Clark were too speculative 

and contingent for appellant to recover against respondent; 

and (6) the damages appellant allegedly suffered in hiring 

~ick Kountz to haul the logs were too speculative for appellant to recover. 

The first issue presented on this appeal is whether 

there was substantial evidence to support the District 

Court's finding that a condition of the sale required 

appellant to remove the logs from the property as soon as 

possible. 

In determining whether the trial court's findings are 

supported by substantial credible evidence, this Court must 

view the evidence in the light most favorable to the prevailing party. See Olson v. Westfork Properties, Inc. 

(1976), 171 Mont. 154, 557 P.2d 821, 823, and Hornung v. 

Estate of Lagerquist (1970), 155 Mont. 412, 420, 473 P.2d 

541, 546. 

In viewing the evidence we find that here the negotiations were quick and informal and nothing specific was said 

about the time frame in which the cabin was to be removed. 

Respondent testified he was in the process of refurbishing 

the motel. He wanted the cabin removed as soon as possible 

so that he could take advantage of the good weather in any 

rebuilding of the motel that was to be done. The cabin was 

at least sixty-four years old and had not been used for a 

number of years. It had little value to the motel as it was 

being operated at that time and could not contribute to the 

value or the appearance of the property. 

We find here substantial evidence to support the istrict Court's finding that a condition of the sale was that 

the logs were to be removed as soon as possible. We find no 

error. 
The second issue raised by appellant is similar to the 

first: whether there was substantial evidence to support 

the ~istrict Court's finding that appellant had terminated 

his efforts in removing the logs from the Pine Cone Motel 

property. 

While there was conflicting testimony at the trial as 

to whether appellant terminated his efforts to remove the 

portion of the cabin he wanted, respondent's testimony 

supported the court's findings that appellant had terminated 

these efforts. Respondent testified that as of July 20, 

1978, it appeared to him that all that was left of the cabin 

was debris. Further, he testified that no remaining logs 

were of any quality. The debris remaining was broken lumber 

and old shingles. In addition, he testified that he had not 

seen anyone working on the removal for several days prior to 

July 20, nor did he see any long logs remaining on the site. 

While this testimony conflicts with that of appellant, it 

is, in our opinion, sufficient to support the court's findings. 

Appellant next raises the issue of whether there was 

substantial evidence to support the District Court's finding 

that the damages incurred by appellant in hiring Dick Kountz 

to haul the logs from the cabin were too speculative for 

appellant to recover. 

Appellant's contention that he should be awarded damages for the alleged debt to Kountz is inconsistent with his 

allegation of a breach. Had the court found that he did not 

breach the agreement and, in fact, had moved soon enough to 

remove the cabin, then most certainly the court would have 

awarded appellant damages for the cost of removing the logs. 
Assuming that appellant was entitled to damages, his 

proof of those damages was speculative at best. Kountz did 

not testify about any debt, nor did appellant produce any 

bill or demand for payment. Over a year had lapsed since 

the time the work was done for appellant. At the time of 

trial, appellant had not received a bill nor had he made any 

effort to pay the bill. We find it was within the court's 

discretion, af ter hearing the testimony, to decide that 

appellant's proof was too speculative for these alleged 

damages. 

The final issue presented by appellant is whether he 

can recover for lost profits from the sale of the cabin to a 

third party. 

Appellant sued for $7,900, of which, according to his 

testimony, $6,000 was lost profits in the sale of property 

to Tom Clark. The District Court found that appellant could 

not recover these alleged lost profits. Appellant and 

respondent made an informal, oral agreement for the sale of 

the cabin. They did not discuss the resale of the cabin by 

appellant at the time of the sale. Appellant did not, at 

that time, have an agreement to sell the cabin, nor did he 

indicate to respondent that he wanted to resell the cabin or 

was actually going to sell it. 

The general rule set out in 25 C.J.S. Damages, S43 at 

751, states that ". . . gains or profits of collateral 

enterprises or subcontracts are, as a rule, too speculative 

and contingent to afford an element of recovery in the case 

of a breach of the primary contract." See Longview Construction & Development, Inc. v. ~oggins construction Co., 

(Tex.Civ.App. 1975), 523 S.W-2d 771- 
We find no testimony at trial which supports appellant's contention that the sale of the cabin by appellant 

could have been contemplated by respondent. In fact, the 

only testimony concerning the intention of appellant when he 

purchased the cabin was that he was going to move it to the 

Big Sky area. 

This Court, in Zook Brothers Construction Company v. 

State (1976)r 171 Mont. 64, 556 P.2d 911, 916, held that, to 

be recoverable, damages must be within the contemplation of 

the parties when they entered into the contract and be such 

damages as might naturally be expected to result from a 

breach of the contract. In Zook this Court cited Cruse v. 

Clawson (1960), 137 Mont. 439, 448, 352 P.2d 989, 994, 

holding that a party "may recover for loss of profits where 

it is shown that such loss is the natural and direct result 

of the act of the defendant complained of and that such 

amount is certain and not speculative." 

As previously noted, we find no testimony to support 

appellant's contentions that respondent should have contemplated a resale of the cabin. Without such testimony, we 

must affirm the District Court's decision that appellant 

cannot recover for the loss of profits from a collateral 

contract. 

Having examined all the issues raised by appellant, we 

affirm. 

Justice / 
We concur: 

Cue£ Justice