No. 13224 INTHE SUPREME COURT OF THE STATE OF MONTANA 1976

BIG SKY LIVESTOCK, 

### INC., A Montana Corporation, Plaintiff and Respondent,

-vs

# - E. A. HERZOG, Defendant and Appellant.

Appeal from: District Court of the Seventeenth Judicial District, Honorable Thomas Dignan, Judge presiding. Counsel of Record: For Appellant: Johnson and Foster, Lewistown, Montana Robert L. Johnson argued, Lewistown, Montana For Respondent: Gallagher and Archambeault, Glasgow, Montana Francis Gallagher argued and Matthew 

### W, Knierim

argued, Glasgow, Montana

Submitted: October 12, 1976 Decided

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# a Filed:

## DEC2

## 7Mr. JusticeJohn Conway Harrison delivered the Opinion of the Court. This appeal by defendant E. A. Herzog is from a judgment

on a jury verdict in the district court, Valley County, inan action on an account stated forveterinary drugs used to treat cattle. Judgment for plaintiff Big Sky Livestock, Inc. was in the amount of $13,500. Herzog appeals. Four issues are raised: (1) Whether the court erred ingranting attorney fees toplaintiff without supporting evidence and notice todefendant? (2) Did the court err inawarding 10%per annum interest toplaintiff? (3) Did plaintiff falsify evidence of account stated? 

### (4) Did the court err in striking from the record and commenting to thejury upon defendant's proof that plaintiff fed poisonous hay todefendant's cattle? On December 17, 1973Big Sky and Herzog entered into

### a written contract to feed cattlebelonging toHerzog. These cattle from the north central part of Montana were purchased forHerzog by Ted Miller, a cattlebuyer from Lewistown, Montana. The purchase, consisting of steer and heifer calves, was made in late December 1973, and earlyJanuary 1974. During the period these cattlewere being transported toGlasgow where the feed lotwas located, the temperatures were extremely cold and some of the cattleneeded medical treatment after they arrived. According to the terms of their contract Herzog was topay Big Sky 366 per pound of gain and Herzog agreed to pay "for alldrugs, veterinary services and supplies, and those items willbe billed to owner[Herzog] atcost." The contract further stated that Big Sky agreed to "feed, water, provide health care, provide labor and to otherwise care for the herd ina good and husbandlike manner atFeeder's premisesr1

near Glasgow and to "vaccinate and brand livestockwith vaccine and brands required by" Herzog and Big Sky. From the time of arrivalof the cattleHerzog received itemized statements showing veterinary charges, veterinary drug charges and vaccination charges. On March 5, 1974. he made a $60,000 payment toBig Sky and on April 15, 1974he made a further payment of $25,000 for services rendered under the contract. On May 

### 1,Herzog went toGlasgow to remove the cattle from the feed lot. At that time the cattlewere weighed so the gain could be determined. He testified he was satisfied with

I theweight the cattledhad gained during the months they were inBig Sky's care. Atthat time Herzog gave Big Sky a check in the amount of $35,790.24, the check reciting the gain portion was for $22,789.40 and the drug portion of $13,000.84. Both parties testified therewas some discussion about the amount of the drug charges. Herzog tried toget the charges reduced without success. Several days after the cattlehad been shipped Herzog stopped payment on the check alleging something was wrong with the drug charges. He then sent Big Sky a new check for the fullamount of theweight gain, plus interest fromMay 1st. Thereafter Big Sky filed suit for the difference inthe two checks. The question presented 

### iswhat constitutes "at cost1',when applied to the drugs. Dr. Martin R. Connell was president and manager of Big Sky Livestock, Inc. In addition, he is the sole

owner of theGlasgow Veterinary Clinic and held 90%of the stockin the Glasgow Veterinary Supply, a Montana corporation. Dr. Connell testified inconnectionwith his feeding operations at Big Sky, that alldrugs were purchased by Big Sky from the Veterinary Clinic, not from Glasgow Veterinary Supply and the prices were at suggested manfacturers' retail. He further testified the Veterinary Clinic made a profit on alldrugs sold by it toBig Sky, Inc.; not only on Herzog's cattlebut on allcattle thatwent through the feeding operations of Big Sky, Inc. Herzog was treated no better orworse than any other user of the facilities. Dr. Connell testified the average markup in the drugs and supplies used was about 

### 25%and ifdiscounted the closest figure they could get from going over thebooks was that the drug bill came to $9,846.06. There were additional costs forbranding, sorting, dehorning and for processing that brought the cost up to the $13,000 figure. During the lifeof the contract Herzog received statements fromBig Sky on allservices rendered under the contract including alldrug charges, and the only time Herzog objected to the drug charges was atthe time of settling up on May 1st. Issue (1) 

### is directed atthe $3,000 attorney fee granted by the district court. Herzog argues thiswas done without notice tohim and without his being present. He further allegedhe was entitled tonotice of proceedings on the issue of attorney fees under section 93-8505, R.C.M. 1947. However, Herzog inhis amended

answer claimed attorney fees inthe amount of $3,000 and both parties stipulated to the court that upon completion of the case the courtwould determine the reasonable value of fees tobe awarded.The court noticed such a hearing and made a minute entry after hearing Big Sky's evidence as to thehours worked, Herzog did not appear although his counsel had been notified. The court noted that

no opposing evidence was heard. Herzog did not oppose this item untilhe was heard on post-trial motions. This Court inStatev. NorLh American Car Corp., 118Mont. 183, 164 P.2d 161 (and cases cited therein) held thatwhen a case istried and submitted on agreed facts, the court 

### isbound by the stipulation. Here, throughout the trial~erzog's position was consistent with the stipulation that fees would be awarded the prevailing party. We find no error in the award of attorney fees. Issue (2) concerns the court's instruction to thejury awarding 10%per annum fromMay 

### 1, 1974. We find the trialcourt erred. Big Sky in

### itsbrief, and atthe time of arguing the case, admitted the interest rate 

### is governed by statute, section 47-124, R.C.M. 1947, which provides for interest at 6%per annum on an account stated from the date ascertained. See 5Am Jur 2d, Appeal and Error § 941; 65 ALR2d 1341,§4[b]

### ;Norum v. Ohio Oil Company, 83Mont. 353, 272 P. 534. On Issue 

### (3) Herzog argues there was no account created in this case, citingBlanck v. Pioneer Mining Co., 93Wash.26, 159 P. 1077; Halverson v. Blue Mountain Prune Growers Co-op, 188 Ore. 661, 214 P.2d 986. These cases hold that if the account rendered by the creditor is specifically atvariance with the underlying contract, themere retention of the erroneous account by the debtor does not give rise to an account stated. However, that isnot the situationhere. Here, theparties dealt face-to-face and discussed the charges in settlingup the account; agreement was reached and Herzog paid the final figurewith his check. This Court

### held inHolmes v. Potts, 132Mont. 477, 319 P.2d 232, that an "account stated" is a final adjustment of demands and amounts due. In creating an account stated, the minds of allparties thereto must meet and understand that a final adjustment of each upon the other is being made. Nelson v. Montana Iron Mining Co.,

140Mont. 331, 371 P.2d 874. These rules must be applied as of the time of the final transactionbetween the parties and without reference to any later change of mind. As ofMay 

### 1,Herzog gave his check for the full amount owing,and in the absence of fraud, mistake or duress, the giving of the check without any reservations created an account stated. The record is clear the parties at the time of discussion and final settlement,culminating in the payment of $35,790.24, were aware theywere then determining, fixing and settling the amount duewith a view of final adjustment and determination. Therewas, on the basis of these undisputed facts, positive evidence of an account stated clearly. One who freely pays an account, even thoughhe has expressed dissatisfactionwith it,does so with the intent to assent to it and with awareness that it is a final determination of all accounts. All Herzog's allegations of "falsification" of the account

were presented to the jury and it found against him. On appeal the role of this Court is to limit its review to whether there is substantial credible evidence to support the verdict. 

### In so doing,we review the evidence in a light most favorable to the prevailing party in the trial court. Bos v. Dolajak, 167Mont. 1, 

### 534 P.2d 1258, 32 St.Rep. 438, 445. Issue 

### (4) is 

### directed at the trial court's striking from the record 3e9mgtbs: 

### alleged proof that Big Sky fed poisonous haytohis cattle. We find no error due to the factHerzog failed to lay a proper foundation indicating any relationship in the hay fed tohis cattle and the health problems that may have necessitated veterinary care or to the administration of drugs. In truth, the evidence given by Herzog was that the cattlewere "thrifty1' upon leaving the feed lot. Too, his death loss in these cattlewas considered "very good". The casewas tried to thejury on the theory of an account stated. None of the offered evidence dealing with the hay related to the question of fraud, mistake or any other evidence available toHerzog in an account stated case. In 

### its ruling the trialcourt was performing 

### its proper function indetermining the admissibility or nonadmissibility of evidence. The reasons for so rulingwere stated and we find

no bias toward either party. The judgment of the district court is affirmed except

as to the award of interest at 10%per annum. The cause 

### is remanded to the trialcourt with directions tomodify thejudgment to provide interest atthe rate of 

### 6%per annum from date of such judgment

# .



# / pie£ Justice

Hon. LeRoy L. McKinnon, District Judge, sitting for JusticeWesley Castles.Big Sky Livestock v. Herzog

I respectfully dissent from the foregoing opinion. By

reason of the press of other matters, and the fact that I do not have copies of the transcript on appeal available, my dissenting opinion willbe brief and general. As to attorney fees, atbest there was a misunderstanding which resulted inthe plaintiffts attorney having a hearing with the Court out of the presence of defendantts attorney. Inasmuch

as a separate hearing was held, fundamental fairness would require that both attorneys have the opportunity tobe present. As to an account stated, it appears that several of the services contracted tobe performed under the thirty-six cents per pound of gain, were included again inthe alleged account stated. Atbest this would amount to a mistake of fact sufficient tovitiate any attempted account stated. As to the issuance of poisonous hay, it appears to this 

### writer that the defendant was prevented from laying a foundation for any evidence on the issue. For the foregoing reasons, I would reverse and remand for a new trial.

sittingunpiace of Mr. JusticeWesley Castles.