Title: VETERAN S REHAB CENTER INC v BI
Citation: N/A
Docket Number: 13183
State: Montana
Issuer: Montana Supreme Court
Date: July 7, 1976

No. 13183 I N THE SUPREME C O U R T O F THE S W E OF MONTANA 1976 VETERANS REHABILITATION CENTER, I N C . , P l a i n t i f f and Appellant, EMMETT F. BIRRER, Defendant and Respondent. Appeal from; D i s t r i c t Court of t h e Eighteenth J u d i c i a l D i s t r i c t , Hon. W. W. Lessley, Judge presiding. Counsel of Record: For Appellant: Bennett and Bennett, Bozeman, Montana Lyman Bennett I11 argued, Bozeman, Montana For Respondent: Berg, Angel, Andriolo and Morgan, Bozeman, Montana Gregory 0. Morgan argued, Bozeman, Montana Submitted: June 4, 1976 ""k - 7 l2T& 9ec ided : '" M r . J u s t i c e John C. Harrison delivered the Opinion o f . t h e Court. P l a i n t i f f appeals from the judgment of the d i s t r i c t court, Gallatin County, dismissing i t s complaint and allowing defendant t o recover costs incurred i n defense of the s u i t . P l a i n t i f f , a nonprofit Oregon corporation, and defendant Emmett Birrer, entered i n t o a contract under which defendant was t o operate a r e t a i l business f o r p l a i n t i f f corporation i n Bozeman, Montana. Under the express terms of the contract (1) p l a i n t i f f was t o receive 6% of the gross income received i n connection with the operation of the enterprise, (2) defendant was t o receive 15% of the gross income, ( 3 ) the balance was t o be applied t o the operation of the business. Birrer contributed approximately $19,500 t o begin the business operation and he received a "manager's salaryf1 of $200 per week during the period he operated the business. His t o t a l salary amounted t o "about eleven thousand dollars". B i r r e r ' s wife a l s o received "close" t o $300 i n salary during the same period. P l a i n t i f f alleges there was an agreement between the p a r t i e s involving the lease of a 1968 Chevrolet truck on a monthly basis f o r a fee of $50 per month. N o payments were re- ceived pursuant t o the alleged lease, and p l a i n t i f f claims t h a t one f u l l y e a r ' s r e n t a l is due and has never been paid. The t o t a l gross proceeds of the business operated by Birrer during the existence of the contract were $65,815.70. The inventory and business were l a t e r sold by Birrer t o one Stocker. P l a i n t i f f did not receive any percentage of the gross sales during the period of defendant's operation of the business and received no payments on the alleged lease of the truck. P l a i n t i f f contends, under the express terms of che contract, it i s e n t i t l e d t o receive 6% of the gross r e c e i p t s , plus the same percentage of the $10,000 received by Birrer upon s a l e of the business t o Stocker, which amounts t o $4,584.94, plus 6Xannual i n t e r e s t upon t h a t amount from August 27, 1972, the dace of the cancellation of the contract between the p a r t i e s . P l a i n t i f f also argues i t i s e n t i t l e d t o receive reasonable attorney fees and costs pursuant t o the terms of the contract and t h a t it should receive r e n t a l fees of $600 for the period of one year, during which Birrer was i n possession of the truck, pursuant t o the alleged lease agreement. Defendant Birrer counters t h a t performance of the contract was impossible due t o the lack of funds available a f t e r payment of business debts and expenses. He urges the only reasonable interpretation of the contract as a whole was t h a t the i n t e n t of the p a r t i e s was t o pay p l a i n t i f f and defendant pursuant t o the contract only i n the event of the existence of p r o f i t s above operating expenses. Birrer contends, and the d i s t r i c t court agreed, t h a t h i s salary was a reasonable and j u s t i f i a b l e expense of operation of the business and was r i g h t f u l l y paid. B i r r e r also contends the d i s t r i c t c o u r t ' s finding t h a t no o r a l lease existed between the p a r t i e s i s c l e a r l y supported by the t e s t i - mony and evidence presented a t t r i a l and should be allowed t o stand. Generally the term "gross revenue" means gross r e c e i p t s of a business before deduction h r any purpose except those items s p e c i f i c a l l y exempted. Public Service Co. v. City and County of Denver, 153 Colo. 396, 387 P.2d 33, 36. A t 38 C.J.S. Gross 1082, it i s said: "The phrase [gross p r o f i t s ] r e f e r s generally t o the excess of s e l l i n g price over c o s t price without deducting the expenses of r e s a l e and other costs of doing business; the gross amount of sales made, a f t e r deducting only the c o s t , import d u t i e s , and carriage * * *." Here, the contract expressly provides t h a t p l a i n t i f f s h a l l "without regard t o operating gain o r d e f i c i t , receive from the f i r s t moneys s i x percent of the gross income i n connection with t h e operation of the enterprise * * *.I1 Section 13-704, R.C.M. 1947, provides: "The language of a contract i s t o govern i t s interpretation, i f t h e language i s c l e a r and e x p l i c i t * * *." The i n t e n t of the contracting p a r t i e s i s t o be ascertained from the contract i t s e l f , i f possible. Universal Under. Ins. Co. v. S t a t e Farm Mut. A . Ins. Co., 166 Mont. 128, 531 P.2d 668, 32 S t . Rep. 102. I n Fulton v. Clark, Mont . , 538 P.2d 1371, 32 St.Rep. 808, 811, the Court stated: "The i n t e n t of the p a r t i e s * * * must be deter- mined from the written agreement alone, i f possible. Section 13-705, R.C.M. 1947. I f the language of the agreement is c l e a r and e x p l i c i t the language must govern its interpretation. Section 13-704, R.C.M. 1947." Here, the i n t e n t of the contra.cting p a r t i e s was c l e a r t h a t p l a i n t i f f was t o receive 6% of the gross income of the business. Thus p l a i n t i f f i s e n t i t l e d t o t h a t percentage of $65,815.70, o r the amount of $3,948.94. This Court i n Hein v. Fox, 126 Mont. 514, 520, 521, 254 P. 2d 1076, held: 11 Courts can give no solace where p a r t i e s t o a contract find themselves minus expected p r o f i t through f a i l u r e t o exercise care i n drawing up such contract. What t h i s court said i n Hinerman v. Baldwin, 67 Mont. 417, 433, 215 Pac. 1103, 1108, well applies here, v j z : 'There i s no l e g a l impediment shown which would prevent the p a r t i e s from entering i n t o any con- t r a c t which they saw f i t nor from expressing it i n language of t h e i r own, and under such circumstances it i s the duty of the court t o give e f f e c t t o the meaning and intention of the p a r t i e s a s expressed i n the language employed. +c * * "'Whether the p l a i n t i f f made a good o r a bad bargain i s of no concern t o the court. H e was of l e g a l age, and had a11 of the f a c t s squarely and c l e a r l y before him long p r i o r t o the execution of the lease. Merely because the terms of the contract now appear unreasonable o r burdensome affords no reason t o permit him t o avoid h i s contract. ; k 9c *"' I n Universal Under. I n s . Co. v. S t a t e Farm Mut. A . Ins. Co., 166 Mont. 128, 531 P.2d 668, 32 St.Rep. 102, 107, t h i s Court approved the language of the federal d i s t r i c t court i n t h a t c o u r t ' s decision i n Kansas City F i r e and Marine Insurance Company v. Clark, 217 F.Supp. 231, 235, wherein Judge Jameson, i n interpreting the applicable Montana law said: "'* 9~ * i f the intention of the p a r t i e s i s c l e a r , the courts have no authority t o change the contract i n any p a r t i c u l a r , o r t o disregard the express language the p a r t i e s have used."' Here, there i s no question but t h a t the contract drafted and agreed upon by the p a r t i e s e n t i t l e d p l a i n t i f f corporation t o a 6% share of the gross income of the business operated by defendant Birrer . P l a i n t i f f a l s o contends it is e n t i t l e d t o a 6% share of the proceeds of the s a l e of the business and i t s inventory t o Stocker, upon recission of the contract. However, the contract i s very c l e a r i n giving defendant the r i g h t t o a l l the proceeds of such s a l e . The contract provides: "10. Upon termination o r cancellation of t h i s contract, next a f t e r payment of a l l moneys due Center ( p l a i n t i f f ) , Birrer (defendant) s h a l l be e n t i t l e d t o a l l the stock, goods, wares, merchandise, equipment, supplies and other property used i n the operation of s a i d business." Clearly, Birrer had f u l l r i g h t t o the inventory, e t c . and would be e n t i t l e d t o r e t a i n the proceeds of the s a l e of such items, a f t e r payment of the amounts due. The d i s t r i c t court found no enforceable lease agreement existed between the p a r t i e s i n regard t o a c e r t a i n Chevrolet truck, but rather t h a t there was a t r a n s f e r t o defendant of the vehicle, and thus no r e n t a l monies were due from defendant t o p l a i n t i f f . However, testimony given a t t r i a l by Birrer and by a M r . Booth, on behalf of p l a i n t i f f corporation, indicates the p a r t i e s had arrived a t an agreement regarding t h e use of t h i s truck by B i r r e r which i n substance, i f not i n form, amounted t o a lease arrangement. This testimony indicates the existence of a agreement whereby defendant Birrer was t o receive the possession of the vehicle and l e g a l t i t l e to it f o r a consideration of $1.00, t o protect p l a i n t i f f from any l i a b i l i t y i n connection with B i r r e r ' s operation of the truck. Birrer was t o pay p l a i n t i f f a monthly r e n t a l fee of $50 and return t i t l e t o p l a i n t i f f a t termina- tion of the lease agreement. The conduct of the p a r t i e s demonstrates the existence of an agreement t o lease the vehicle. Birrer took possession of the vehicle and used it i n the operation of h i s business and returned it t o p l a i n t i f f upon demand. Section 13-603, R.C.M. "An implied contract i s one the existence and terms of which are manifested by conduct." Section 13-713, K.C.M. 1947: "A contract may be explained by reference t o the circumstances under which it was made and the matter t o which it relates." In Rentfro v. Dettwiler, 95 Mont. 391, 398, 26 P.2d 992, the Court stated: "The conduct of the p a r t i e s manifests the existence and terms of an implied contract, having a l l the e s s e n t i a l elements t o render it v a l i d and binding." In the i n s t a n t case, the evidence of the conduct of the parries supports the conclusion t h a t a lease of the vehicle was intended by the p a r t i e s and t h a t r e n t a l fees i n the amount of $600 a r e due from Birrer t o p l a i n t i f f corporation. Under t h e express terms of the contract: "20. I n case s u i t o r action i s i n s t i t u t e d by e i t h e r party hereto, the prevailing party s h a l l be e n t i t l e d t o reasonable attorneys fees and costs ' k * *." In Roseneau Foods, Inc. v. Coleman, 140 Mont. 572, 579, 374 P. 2d 87, it i s stated: "* + C * the general r u l e is t h a t attorney's fees a r e not recoverable by a successful l i t i g a n t e i t h e r i n law o r equity except when they a r e expressly provided for by contract o r s t a t u t e . I I See: S t a t e Highway Comm'n v. Heltborg, 140 Mont. 196, 369 P.2d 521; Nikles v. Barnes, 153 Mont. 113, 454 P.2d 608. I n view of the express terms of t h e agreement between the p a r t i e s hereto, the matter i s remanded t o the d i s t r i c t court t o determine reasonable attorney fees and costs. The judgment of the t r i a l court i s reversed. The cause is remanded t o t h a t court t o enter judgment for p l a i n t i f f i n compliance with t h i s opini We Concur: / r, / Justices. /#