Opinion ID: 877999
Heading Depth: 1
Heading Rank: 1

Heading: the bank's contract to lend money

Text: The first issue we must determine is whether the District Court erred in finding that a contract existed between the bank and Stensvad to finance the feeder operation. The District Court found that as of September 21, 1971, agreements had been reached between the bank and Stensvad to the effect that Stensvad would furnish or continue to furnish the bank with security interests in all of the plaintiff's assets; that the bank would continue to furnish financing for the four to five thousand head of cattle then in the plaintiff's feed lots, without modification; feed financing sufficient to feed the cattle under the modified agreement for 30 days; interim financing for the purchase of new cattle; feed financing for newly purchased cattle prior to their sale to PCA financed owners; feed financing for rancher owned cattle, and inventory and accounts receivable financing for Agri-Services, Inc. In the absence of an express agreement as to the term of the bank's contracts, the court determined that it was in the contemplation of the parties that the term would be related to the investor-feeding contracts, the time required to fatten for sale two cycles of cattle. Presumably the consideration moving to the bank was the interest, at rates ranging from 8 1/2 percent to 10 percent per annum on the unpaid balances, that would be collected during the operation of the agreement. An extra element of prejudice, however, was the agreement of Stensvad not to engage in the formation of another bank in Roundup. Such consideration meets the statutory definition of good consideration, section 28-2-801, MCA, a benefit agreed to be conferred upon a promissor to which the promissor is not likely entitled, or a prejudice suffered or agreed to be suffered by the promisee other than what he is at the time lawfully bound to suffer. The District Court also concluded that the PCA participation in the Stensvad operation was dependent upon the agreement of the bank to furnish the necessary funds. While the exact nature of the bank's agreement is arguable, especially as to term, the findings of the court must be supported on appeal where substantial evidence supports such findings and may not be set aside by us unless clearly erroneous. Rule 52(a), M.R.Civ.P. The intention of the parties to a contract may be furnished by their conduct and declarations. Glantz v. Gabel (1923), 66 Mont. 134, 212 P. 858; section 28-2-103, MCA. We conclude the District Court did not err in finding an agreement on the part of the bank to finance the Stensvad operation.