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:

ClerkMr. Justice John Conway Harrison delivered the Opinion of the Court. This is an appeal from a judgment ina damage action entered by the DistrictCourt 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 DistrictCourt entered judgment infavor of defendant, and plaintiff appeals. Respondent-defendant Neville purchased the Pine Cone Motel inWestYellowstone, Montana, inthe spring of 1978. On the premises of the Pine Cone Motel was an old log cabin approximately twenty by thirty-two feet indimensions. Respondent, inan effortto sell the property, decided that the log cabin should be removed from the property. He advertised inthe WestYellowstone area thathe had a log cabin tobe sold and removed, as soon aspossible, so that further construction could begin atthe motel. Plaintiff-appellant contacted respondent about buying the log cabin. On June 20, 1978, they entered intoan 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 tobe removed from the lotas soon aspossible. Appellant, soon afterJune 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 toanother motel whose owner was topurchase the logs from appellant. For

some reason, a period of timeelapsed after this initial

### removal inwhich no effortswere made to either remove or clean up the remaining debris on the site. Respondent, believing that appellanthad 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 agreementwas 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, sittingwithout a jury, found: (1) that a condition of the June 20, 1978,agreementwas that the log cabinbe 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) 

### respondentdid 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 appellantfrom the collateral contractwith Clark were too speculative and contingent forappellant torecover against respondent; and (6) the damages appellantallegedly suffered inhiring ~ick Kountz tohaul the logs were too speculative for appellantto recover. The firstissuepresented on this appeal iswhether there was substantialevidence to support the District Court's finding that a condition of the sale required appellant toremove the logs from the property as soon as possible. In determining whether the trialcourt's findings are supported by substantial credible evidence, this Court must view the evidence inthe lightmost favorable to the prevailing party. See Olson v. Westfork Properties, Inc. (1976), 171Mont. 154, 557 P.2d 821, 823, and Hornung v. Estate of Lagerquist (1970), 155Mont. 412, 420, 473 P.2d 541, 546. Inviewing the evidence we find thathere the negotiations were quick and informal and nothing specificwas said about the time frame inwhich the cabinwas tobe removed. Respondent testified he was inthe process of refurbishing themotel. He wanted the cabin removed as soon as possible

so that he could take advantage of the good weather inany rebuilding of themotel thatwas tobe done. The cabinwas atleast sixty-four years old and had not been used for a number of years. Ithad littlevalue to the motel asitwas being operated atthat timeand could not contribute to the value or the appearance of theproperty. We find here substantialevidence to support the istrict Court's finding that a condition of the salewas that the logs were tobe removed as soon as possible. We find no

error.

### The second issue raised by appellant is similar to the first: whether therewas substantial evidence to support the ~istrict Court's finding that appellanthad 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 appellanthad terminated these efforts. Respondent testified that as of July 20, 1978, it appeared to him that all thatwas leftof 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 conflictswith that of appellant, it is, in our opinion, sufficientto support the court's findings.Appellant next raises the issue of whether therewas 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 cabinwere 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, thenmost certainly the courtwould have awarded appellant damages for the cost of removing the logs.

### Assuming that appellantwas entitled to damages, his proof of those damages was speculative atbest. Kountz did not testify about any debt, nor did appellantproduce 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 itwas within the court's discretion, after hearing the testimony, to decide that appellant's proof was too speculative for these alleged damages. The final issuepresented by appellant iswhether 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, $6,000was lostprofits in the sale of property to Tom Clark. The DistrictCourt found that appellant could not recover these alleged lostprofits. Appellant and respondentmade 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 subcontractsare, 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 constructionCo., (Tex.Civ.App. 1975), 523 S.W-2d 771-We find no testimony attrialwhich supports appellant's contention that the saleof the cabinby appellant could have been contemplated by respondent. In fact, the only testimony concerning the intention of appellantwhen he purchased the cabinwas thathe was going tomove it to the Big Sky area. This Court, inZook Brothers Construction Company v. State (1976)r 171Mont. 64, 556 P.2d 911, 916, held that, to be recoverable, damages must be within the contemplation of theparties when they entered into the contractand be such damages asmight naturally be expected toresult from a breach of the contract. In Zook thisCourt cited Cruse v. Clawson (1960), 137Mont. 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 directresult of the act of the defendant complained of and that such amount iscertain and not speculative." As previously noted, we find no testimony to support appellant's contentions thatrespondent should have contemplated a resale of the cabin. Without such testimony, we must affirm the DistrictCourt's decision that appellant cannot recover for the loss of profits from a collateral contract. Having examined allthe issues raised by appellant, we affirm.

Justice /We concur:

Cue£Justice