Opinion ID: 890183
Heading Depth: 3
Heading Rank: 2

Heading: Satisfaction of Judgment vis-à-vis Effective Relief

Text: ¶ 32 The next case, In re Black's Estate, 32 Mont. 51, 79 P. 554 (1905), has been cited in subsequent cases on the question of mootness, but a careful reading reveals that the decision is grounded on principles of waivera distinction that is important to make for reasons discussed below. The deceased's son and daughter appealed from the district court's decree of distribution. Yet, prior to the appeal, the son and daughter received the shares allotted to them by the decree and gave the estate administrator receipts in full therefor. As a result, the administrator moved to dismiss the appeal on the ground that the son and daughter had accepted the provisions of the decree and voluntarily satisfied the same. This Court granted the motion, observing that [t]he right to accept the fruits of a judgment, and at the same time to prosecute an appeal from it, are not concurrent. On the contrary, they are wholly inconsistent rights. The election of one necessarily excludes the enjoyment of the other. Black's Estate, 32 Mont. at 53, 79 P. at 555. The Court recognized that there are exceptions to this general rule, but determined that none of them applied here. The appeal had been taken generally, and the purpose sought was a reversal of the district court's judgment as a wholesomething the son and daughter could not do, having already accepted the fruits of that judgment. Black's Estate, 32 Mont. at 54-55, 79 P. at 555-56. The Court also noted that the receipts executed by the son and daughter reflected an intention to acknowledge receipt in full of all the distributive shares to which they were entitled in the estate and to release the administrator of liability. Black's Estate, 32 Mont. at 56, 79 P. at 556. Essentially, the son and daughter had agreed that the decree was to be final. Lastly, one other facet of Black's Estate must be mentioned. In the course of its analysis, the Court posited that [w]hen a judgment has been paid, it has passed beyond review; the satisfaction of it being the end of the proceeding. Black's Estate, 32 Mont. at 53, 79 P. at 555. This categorical rule was repeated in several subsequent cases. However, as will be seen, this Court ultimately repudiated the rule as an incorrect statement of the law. ¶ 33 The next two cases are significant in that the Court reached opposite conclusions on the question of mootness despite the similar procedural postures of the casesthe distinction being the involvement of third-party interests in the moot case. First, in State ex rel. Kurth v. Grinde, 96 Mont. 608, 32 P.2d 15 (1934), the district court issued a writ of mandate commanding that Kurth be reinstated as Great Falls water registrar. The existing water registrar (Pierse) complied with the writ, but still maintained an appeal to this Court. We allowed the appeal. We noted that, as a general rule, once a party has complied with the commands of a writ of mandate, the question whether the writ should have been granted will not be reviewed. Kurth, 96 Mont. at 611, 32 P.2d at 16. But here, we reasoned, the underlying question is who has the title to the office in question, and if that person is Pierse, then this Court may compel Kurth to surrender to Pierse all of the books, papers, and insignia belonging or appertaining to that office. Kurth, 96 Mont. at 612-13, 32 P.2d at 16. We may exercise the right of compelling restitution by our own mandate or direct the lower court to do so; hence, the fact that the order or judgment of the district court has been complied with does not warrant us in dismissing the appeal. Kurth, 96 Mont. at 613, 32 P.2d at 16. ¶ 34 In the second case, State ex rel. Hagerty v. Rafn, 130 Mont. 554, 304 P.2d 918 (1956), the district court issued a writ of mandamus compelling the Montana Liquor Control Board to issue beer and liquor licenses to parties who had tribal permits to engage in the liquor business on the Blackfeet Indian Reservation. An application was made to this Court for a stay pending the outcome of an appeal, but this Court was in summer recess at the time. The Board, therefore, issued the licenses under protest, while still maintaining an appeal to this Court. In contrast to Kurth, however, we dismissed the appeal as moot. We acknowledged that the Board's compliance with the writ had been involuntary. We also rejected the notion that when a judgment has been paid it has passed beyond review, the satisfaction of it being the end of the proceeding. Besides the fact that this statement was dictum in Black's Estate, we pointed out that the statement is not always true in every case even of a judgment for money damages when payment is voluntarily made and generally speaking is clearly an incorrect statement of the law when payment or performance otherwise is involuntary. Hagerty, 130 Mont. at 557, 304 P.2d at 919-20. Nevertheless, whether the Board obeyed the writ voluntarily or involuntarily, we concluded that our review of the issues would be to no purpose and that a reversal would be without effecti.e., the appeal was mootbecause the persons named in the issued licenses had since acted upon the permission given them thereby to dispense liquors and beer at Browning. Presumably each has a tavern, has invested capital in his respective enterprise as he was lawfully entitled to do, and has acquired patrons and customers, and has what is commonly known as an established and going business, all of which is of some value. If the appellants were to prevail in this action and upon a reversal we were to order the board and court below to cancel out the licenses now outstanding, the status quo of the parties to this litigation could not be restored as it was when the judgment of the lower court was entered. Hagerty, 130 Mont. at 557-58, 304 P.2d at 920. We distinguished Kurth on the ground that, unlike there, we could not here effect restitution upon a reversal of the district court's writ. Hagerty, 130 Mont. at 558, 304 P.2d at 920; see also Gill v. Rafn, 133 Mont. 505, 509-10, 326 P.2d 974, 976 (1958) (discussing this facet of Hagerty). ¶ 35 This brings us to the most problematic case in this line of authority: Gallatin Trust & Sav. Bank v. Henke, 154 Mont. 170, 461 P.2d 448 (1969). The case has since been overruled, but certain aspects of the decision are pertinent to the instant discussion and, thus, should be noted here. As an initial matter, the Henke Court consumed several pages addressing the merits of Henke's appeal, 154 Mont. at 172-76, 461 P.2d at 449-51, only then to observe that [w]hile we have heretofore discussed the merits of this case, we choose to discuss the motion to dismiss the appeal, 154 Mont. at 176, 461 P.2d at 451. This approach, of course, puts the proverbial cart before the horse because, as stated above, mootness is a threshold issue which must be resolved before we may address the substantive merits of a dispute. See ¶ 17, supra. The Henke Court then proceeded to dismiss the appeal as moot, 154 Mont. at 177, 461 P.2d at 452, thereby rendering the entire preceding discussion of the merits of the appeal dictum. ¶ 36 In concluding the appeal was moot, the Henke Court cited the facts that Henke had not posted a supersedeas bond, that this Court had denied her application for a stay of execution, and that the judgments against Henke had thereafter been satisfied. 154 Mont. at 177, 461 P.2d at 452. The Court purported to resurrect the rule that [w]hen the judgment is paid it passes beyond review; its satisfaction ends the proceeding. Henke, 154 Mont. at 177, 461 P.2d at 451-52 (citing Black's Estate, 32 Mont. 51, 79 P. 554). Doing so was concededly in conflict with Hagerty 's criticisms of Black's Estate, a point that ultimately had to be resolved in later cases. First, in Mont. Natl. Bank of Roundup v. Dept. of Revenue, 167 Mont. 429, 539 P.2d 722 (1975), we rejected the Department of Revenue's reliance on Henke in support of the contention that the Bank's appeal was moot. We reaffirmed the well recognized rule that payment of a money judgment by the judgment debtor does not, by itself, render the cause moot for purposes of appeal. State ex rel. Hagerty v. Rafn, 130 Mont. 554, 304 P.2d 918, and cases cited therein. A defeated party's compliance with the judgment renders his appeal moot only where the compliance makes the granting of effective relief by the appellate court impossible. State ex rel. Begeman v. Napton, 10 Mont. 369, 25 P. 1045; Anno. 39 A.L.R.2d 153, 179. Bank of Roundup, 167 Mont. at 432-33, 539 P.2d at 724. We did not expressly overrule Henke in Bank of Roundup, but later did so in an Opinion and Order Denying Motion to Dismiss in First Natl. Bank in Eureka v. Giles, No. 86-195, 1986 Mont. LEXIS 979 (July 24, 1986). There, after discussing Henke, Bank of Roundup, and Hagerty, we adopted the rule that if a judgment is satisfied by an involuntary payment or performance, the appeal from the judgment is not thereby rendered moot. [2] Bank in Eureka, 1986 Mont. LEXIS 979 at ; accord Le Clair v. Reiter, 233 Mont. 332, 335, 760 P.2d 740, 742 (1988). As will be seen, we later rejected the voluntary/involuntary distinction as an element of mootness analysis. But the critical point to be taken from these post-Henke decisions is that this Court returned to the fundamental principle that a defeated party's compliance with the judgment renders the appeal moot only where the compliance makes the granting of effective relief by the appellate court impossible. Bank of Roundup, 167 Mont. at 432-33, 539 P.2d at 724 (citing Begeman, 10 Mont. 369, 25 P. 1045). ¶ 37 Lastly, one other aspect of Henke must be noted. In its brief discussion of Black's Estate and Hagerty, the Court opined that we appeared to have set up [in Hagerty ] a new rule to the effect that where rights of third persons are involved and the parties cannot be restored to their original position the appeal becomes moot. Henke, 154 Mont. at 177, 461 P.2d at 451-52. This dictum in Henke which has worked its way into subsequent casesis not entirely accurate. First, the question is not merely whether the parties can be restored to their original positions, but whether it is possible for this Court to grant effective relief. In some situations, the only effective relief would be to restore the parties to their original positions, and if that is no longer possible, then the appeal is moot. See e.g. Hauswirth, 90 Mont. at 26-27, 300 P. at 198 (since the Butte city council and mayor had already enacted the ordinance permitting Montana Power Company to supply natural gas, the appeal was moot); Povsha v. City of Billings, 2007 MT 353, ¶¶ 22-24, 340 Mont. 346, 174 P.3d 515 (because the City had long ago granted the zoning change at issue, and Big Sky Auto Auction had already been built adjacent to Povsha's property, the appeal was moot). As explained above, however, relief may also take the form of restitution as necessary to avoid unjust enrichmentrather than a literal return of the parties to their starting positionsin which case it would be possible to grant effective relief. Second, as Hagerty reflects, third-party interests may bear on this issue. In Hagerty, the beer and liquor licenses had been issued to parties who then acted upon them to create going businesses, and it was not possible for this Court to effect restitution upon a reversal of the district court's writ. 130 Mont. at 557-58, 304 P.2d at 920. Yet, while third parties (as bona fide payees and purchasers) may be free from restitution claims, the appellant who obtains a reversal of the lower court's judgment may have a claim in restitution against the appellee. See ¶ 23, supra. In those situations, as noted, this Court may grant effective relief. Thus, it was wrong to suggest in Henke that the involvement of third-party interests and the inability to restore the parties to their original positions necessarily moots an appeal. Again, the question, more accurately stated, is whether it is possible to grant some form of effective relief to the appellant.