No. 13224 

IN THE 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 

Dec ided =C 3 a 

Filed : DEC 2 7 
Mr. Justice John 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, in an 

action on an account stated for veterinary 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 in granting attorney fees 

to plaintiff without supporting evidence and notice to defendant? 

(2) Did the court err in awarding 10% per annum interest 

to plaintiff? 

(3) Did plaintiff falsify evidence of account stated? 

(4) Did the court err in striking from the record and 

commenting to the jury upon defendant's proof that plaintiff 

fed poisonous hay to defendant's cattle? 

On December 17, 1973 Big Sky and Herzog entered into a 

written contract to feed cattle belonging to Herzog. These cattle 

from the north central part of Montana were purchased for Herzog 

by Ted Miller, a cattle buyer from Lewistown, Montana. The purchase, consisting of steer and heifer calves, was made in late 

December 1973, and early January 1974. During the period these 

cattle were being transported to Glasgow where the feed lot was 

located, the temperatures were extremely cold and some of the 

cattle needed medical treatment after they arrived. According 

to the terms of their contract Herzog was to pay Big Sky 366 per 

pound of gain and Herzog agreed to pay "for all drugs, veterinary 

services and supplies, and those items will be billed to owner 
[Herzog] at cost." 

The contract further stated that Big Sky agreed to "feed, 

water, provide health care, provide labor and to otherwise care 

for the herd in a good and husbandlike manner at Feeder's premisesr1 

near Glasgow and to "vaccinate and brand livestock with vaccine 

and brands required by" Herzog and Big Sky. 

From the time of arrival of the cattle Herzog received 

itemized statements showing veterinary charges, veterinary drug 

charges and vaccination charges. On March 5, 1974. he made a 

$60,000 payment to Big Sky and on April 15, 1974 he made a further 

payment of $25,000 for services rendered under the contract. 

On May 1, Herzog went to Glasgow to remove the cattle 

from the feed lot. At that time the cattle were weighed so the 

gain could be determined. He testified he was satisfied with 

I the weight the cattled had gained during the months they were 

in Big Sky's care. At that 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 there was some discussion about the amount of the drug 

charges. Herzog tried to get the charges reduced without success. 

Several days after the cattle had 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 full amount 

of the weight gain, plus interest from May 1st. Thereafter Big Sky 

filed suit for the difference in the two checks. 

The question presented is what 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 the Glasgow Veterinary Clinic and held 90% of the stock 
in the Glasgow Veterinary Supply, a Montana corporation. Dr. 

Connell testified in connection with his feeding operations at 

Big Sky, that all drugs 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 all drugs sold by it 

to Big Sky, Inc.; not only on Herzog's cattle but on all cattle 

that went through the feeding operations of Big Sky, Inc. 

Herzog was treated no better or worse than any other user 

of the facilities. Dr. Connell testified the average markup in 

the drugs and supplies used was about 25% and if discounted the 

closest figure they could get from going over the books was that 

the drug bill came to $9,846.06. There were additional costs 

for branding, sorting, dehorning and for processing that brought 

the cost up to the $13,000 figure. During the life of the contract 

Herzog received statements from Big Sky on all services rendered 

under the contract including all drug charges, and the only time 

Herzog objected to the drug charges was at the time of settling 

up on May 1st. 

Issue (1) is directed at the $3,000 attorney fee granted 

by the district court. Herzog argues this was done without notice 

to him and without his being present. He further alleged he was 

entitled to notice of proceedings on the issue of attorney fees 

under section 93-8505, R.C.M. 1947. However, Herzog in his amended 

answer claimed attorney fees in the amount of $3,000 and both 

parties stipulated to the court that upon completion of the case the 

court would determine the reasonable value of fees to be awarded. 
The court noticed such a hearing and made a minute entry after 

hearing Big Sky's evidence as to the hours 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 

until he was heard on post-trial motions. This Court in State v. 

NorLh American Car Corp., 118 Mont. 183, 164 P.2d 161 (and cases 

cited therein) held that when a case is tried and submitted on 

agreed facts, the court is bound 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 the jury 

awarding 10% per annum from May 1, 1974. We find the trial court 

erred. Big Sky in its brief, and at the 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 5 Am Jur 2d, 

Appeal and Error § 941; 65 ALR2d 1341,§4[b] ; Norum v. Ohio Oil 

Company, 83 Mont. 353, 272 P. 534. 

On Issue (3) Herzog argues there was no account created 

in this case, citing Blanck v. Pioneer Mining Co., 93 Wash.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 at variance with the 

underlying contract, the mere retention of the erroneous account by 

the debtor does not give rise to an account stated. However, that 

is not the situation here. Here, the parties dealt face-to-face 

and discussed the charges in settling up the account; agreement was 

reached and Herzog paid the final figure with his check. This Court 
held in Holmes v. Potts, 132 Mont. 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 all parties 

thereto must meet and understand that a final adjustment of each 

upon the other is being made. Nelson v. Montana Iron Mining Co., 

140 Mont. 331, 371 P.2d 874. 

These rules must be applied as of the time of the final 

transaction between the parties and without reference to any 

later change of mind. As of May 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 they were then determining, fixing and 

settling the amount due with a view of final adjustment and 

determination. There was, on the basis of these undisputed facts, 

positive evidence of an account stated clearly. One who freely 

pays an account, even though he has expressed dissatisfaction with 

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, 167 Mont. 

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 hay 
to his cattle. We find no error due to the fact Herzog failed 

to lay a proper foundation indicating any relationship in the hay 

fed to his 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 cattle were "thrifty1' 

upon leaving the feed lot. Too, his death loss in these cattle was 

considered "very good". The case was tried to the jury 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 to Herzog in an account stated case. 

In its ruling the trial court was performing its proper 

function in determining the admissibility or nonadmissibility 

of evidence. The reasons for so ruling were 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 trial court with directions to modify the judgment to 

provide interest at the rate of 6% per annum from date of such 

j udgment . 

/ pie£ Justice 

Hon. LeRoy L. McKinnon, District 

Judge, sitting for Justice Wesley 

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 will be brief and general. 

As to attorney fees, at best there was a misunderstanding 

which resulted in the plaintiffts attorney having a hearing with 

the Court out of the presence of defendantt s attorney. Inasmuch 

as a separate hearing was held, fundamental fairness would require 

that both attorneys have the opportunity to be present. 

As to an account stated, it appears that several of 

the services contracted to be performed under the thirty-six 

cents per pound of gain, were included again in the alleged 

account stated. At best this would amount to a mistake of fact 

sufficient to vitiate 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. 

sittingun piace of 

Mr. Justice Wesley Castles.