Court Opinion

ID: 878977
Source: CourtListenerOpinion
Date Created: 2013-06-04 23:04:23.49866+00
Date Added: 2024-06-11T12:05:47.701856
License: Public Domain

No.     53-547

                       I N THE SUPREME COURT OF THE STATE OF P.IONTANA

                                                          1984

MARKETING S P E C I A L I S T S ,         INC.,
a Utah Corporation,

                                      Plaintiff        and R e s p o n d e n t ,

S E R V I C E MARKETING OF MONTANA,
I N C . , and MITCHELL SUMMER
and J A R E SUMMER, husband and
wife,
                            D e f e n d a n t s and A p p e l l a n t s .

APPEAL FROM:            D i s t r i c t C o u r t of t h e E i g h t h J u d i c i a l D i s t r i c t ,
                        I n and f o r t h e C o u n t y of C a s c a d e ,
                        T h e H o n o r a b l e J o e l G . R o t h , Judge p r e s i d i n g .

COUNSEL OF PSCORD:

         For Appellants:

                       C h a r l e s M.    Cruikshank,       111, a r g u e d , G r e a t F a l l s ,
                       Montana

         F o r Respondent:

                       Alexander & Baucus;               John P a u l a r g u e d , G r e a t F a l l s ,
                       Montana

         F o r Amicus Curiae:

                       M i k e G r e e l y , A t t o r n e y G e n e r a l , H e l e n a , Montana

                                                   Submitted:           N o v e m b e r 1, 1 9 8 4

                                                       ~ e c i d e d : January 3, 1 9 8 5

Filed:     ,sW 1% .I     995

                                                   Clerk
Mr. Justice John C.         Sheehy delivered the Opinion of the
Court.

     Defendants     appeal     from    an    injunctive    order    by    the
District Court      of    the Eighth Judicial District, Cascade
County.     The court ordered defendants to post a $75,000 bond
in lieu of granting plaintiff a temporary restraining order.
We reverse the District Court and vacate the order.
     Mitchell Summer and his wife Jane Summer were employed
in Great Falls, Montana, by plaintiff-respondent, Marketing
Specialists, Inc. for approximately two and one-half years
commencing in the early part of 1981.                 Plaintiff, a Utah
corporation, was engaged in business as broker and agent for
various     food   and    non-food    manufacturers       and    producers.
Plaintiff arranged sales with retail businesses.
    Mitchell Summer was the general manager of plaintiff's
Kontana operations.         Jane Summer did clerical work and as-
sisted Mitchell.         After notice to plaintiff on August 1,
1983, Mitchell and Jane Summer terminated their employment
relationship with Marketing Specialists, Inc.
     On August 12, 1983, Marketing Specialists filed suit
against Jane and Mitchell Summer and Service Marketing of
Montana, Inc.      Plaintiff alleged breach of fiduciary duty,
unfair    and   unlawful    business    competition,       conversion      of
property, tortious interference with business arrangements
and contracts and other claims.             Plaintiff alleged that the
Summers in concert with Service Marketing of Eontana, Inc.
induced     plaintiff's     customers       to    break   contracts      with
plaintiff    and   employ    defendants.          Marketing     Specialists
alleged that defendants converted records, books, and other
confidential information and used                the same to unlawfully
interfere with     plaintiff's business.         At   the   same time
Marketing Specialists filed its complaint in Cascade County
District Court, it also filed a motion for a temporary re-
stra.ining order (TRO) prohibiting defendants from contacting
or negotiating with any manufacturers.           Plaintiff complied
with the procedure set forth in section 27-19-201, MCA, et
seq. and obtained the TRO without prior notice or hearing
pursuant to section 27-19-315, MCA.
       The District Court issued a TRO in accord with plain-
tiff's motion on August 12, 1983.          A hearing was set for
August 22, 1983 to determine if a preliminary injunction
should issue.    On August 19, 1983, defendants moved the court
to require plaintiff to post bond in accordance with section
27-19-306, MCA, to cover costs and damages to persons wrong-
fully restrained.    Defendants also moved to quash the TRO and
to declare Marketing Specialists incapable of bringing suit
in the State of Montana for failure to obtain a certificate
of authority as a foreign corporation to transact business as
required by section 35-1-1004, MCA.
       On August 24, 1983, a hearing was held.          On August 26,
1983, the District Court denied the plaintiff's motion for a
preliminary     injunction,   dissolved    the   TRO,    and   ordered
Marketing Specialists to post a $35,000 bond pursuant to
section 27-19-307, MCA.        On September 6, 1983, Marketing
Specialists moved the District Court to amend the August 26,
1983 order to relieve it of its bond requirement and impose a
$75,000 bond. on defendants.         Marketing Specialists argued
that   the   District Court    had   no   authority under      section
27-19-307, MCA, to require it to post bond. and that section
27-19-405, MCA, mandated that defendants post bond instead.
On September 7, 1983, the District Court stayed its order
requiring   Marketing    Specialists     to   post    bond    pending     a
hearing.
     On September 26, 1983, after a hearing the District
Court reversed itself and amended its August 26, 1983 order
as   follows:      (1     deleted     requirement      that       Marketing
Specialists post a $35,000 bond; (2)           ordered defendant to
post a $75,000 bond; (3)       if no bond were posted by defendant
within three days, the plaintiff's restraining order would
continue until said bond is posted.
     Prior to argument on appeal, it was brought to the
attention of this Court that the codified version of section
27-19-405, MCA, a statute central to this case, differed from
the corresponding official enrolled bill passed by the legis-
lature which is on file with the secretary of state.                   The
differences arose because section 27-19-405, MCA, was amended
in two separate bills in the 1979 legislative session.                  In
our order of July 27, 1984, we asked the parties to address
this issue in their briefs and point out what effect, if any,
the variation had upon the case.
     Accordingly, we     shall address the           following issues:
     1.    What is the power and duty of the code commissioner
to reconcile two laws passed on exactly the same subject
during the same legislative session?
     a.     What   is   the   meaning,   proper      codification      and
interpretation     of   the    different      versions       of    section
27-19-405, MCA?
     2.     Is Marketing Specialists barred from prosecuting
this suit because it allegedly did not possess a current
certificate of     authority    to   do business      as required by
sections 35-1-1001, MCA, et seq.?
       3.    May the District Court, after finding a temporary
restraining order wrongfully issued, reimpose the terms of
the order unless the defendants post bond for damages?
       We will first consider the effect of the two amendments
made   to section 27-19-405, MCA, in the         1979 Legislative
Session and the codification by the code commissioner of
these amendments in the 1983 Montana Code Annotated.
       The code commissioner holds   s,   position created within
the legislative council.     Section 1-1.1-201, MCA.   The duties
of the code commissioner are set forth in section 1-11-204,
MCA, and primarily consist of codifying and recodifying laws
passed by the Montana legislature.        "Recodify" is defined in
section 1-11-101, MCA as follows:
       " (2)  ' Recodify' means to compile, arrange, rear-
       range, and prepare for publication.     It includes
       without changing the meaning, effect or intent of
       any law:

       "e) changing and inserting 1angua.ge made necessary
       because of rearrangement;
       "f)   eliminating redundant words."
       The   legislature has given the code commissioner the
power to change the language of a law without changing its
substance or intent.
       Section 1-11-103 (6), MCA, states:
       "After enactment, the Montana Code Annotated,
       including all subsequent replacement volumes shall
       be prima facie the official laws of Montana.     In
       the case of any inconsistency - -in meaning arising
                                             -
       through ommission or otherwise between portions of
       Plonta.na Code Annotated and the corresponding por-
       tion of the official enrolled bill on file with the
       secretary of a state, effect shall be given to the
       official enrolled bill." (Emphasis added.)
       It is the duty of this Court acting under the power
conferred upon it by Article I11 of the Montana Constitution
to determine if the codification has a meaning consistent
with the official session laws.    For the reasons set forth
below, we find the commissioner acted properly in combining
Ch. 12 a.nd Ch. 399 when codifying section 27-19-405, MCA.
     The version of section 27-19-405, MCA, contained in Ch.
12, Laws of Montana (1979), was part of a bill introduced at
the request of the code commissioner to clarify the law of
remedies.    The Ch. 399, Laws of Montana (1979) version was
introduced at the request of the attorney general as part of
a bill to revise procedures for d-issolving injunctions and
temporary restraining orders.   The substance of both versions
of section 27-19-405, MCA, was the same and they were not
intended to be in conflict.
    We have held that this Court should reconcile two stat-
utes if possible and not hold that one impliedly overrules
the other.   See State ex rel. Normile v. Coonev (1935), 100
Mont. 391, 47 P.2d 637; State v. Hindson (1910), 40 Mont.

     The two original bills at issue are easily reconcilable
and for all practical purposes express the same meaning and
same legislative intent.   The version appearing in the Code
is a hybrid of the two legislative enactments.
     In the Forty-Sixth Legislative Assembly (1979), in Ch..
12, S 52, Laws of Montana (1979), section 27-19-405, MCA was
amended to read as follows:
    "Defendant's undertaking - security upon dissolu-
                              for
    tion. If the injunction order is dissolved because
    the alleged injury is not irreparable and is capa-
    ble of beins adequately compensated for in money,
    the court o judge shail require the defendant to
               ;
    execute an undertakins in such form and amount a.nd
    with such sureties as "the court or judge my direct,
    conditioned to indemnify the plaintiff against loss
    sustained by reason of the dissolution." (Emphasis
               -                                  -
    added. )
     In the same legislative session, the legislature again
amended section 27-19-405, MCA, by Ch. 399, S     16, Laws of
Montana (1979), so that in that amendment section 27-19-405,
MCA is as follows:
    "27-19-405.    Enjoined party's undertaking -   for
    security upon dissolution.       Upon the hearing
    mentioned In 27-19-403, the court or judge may
    vacate the injunction order upon the enjoined
    party's executing an undertaking in such form and
    amount and with such sureties as the court or judge
    shall direct, conditioned to indemnify the $arty
    -
    who obtained the injunction order against loss
    sustained by reason of vacating such injunction

     In the 1983 codification of Montana Codes Annotated,
section 27-19-405, MCA, appears as follows:
    "Enjoined party's undertaking for security upon
    d.issolution. If th.e injunction order is dissolved
    because the alleged injury is not irreparable and
    is capable of being adequately compensated for in
    money, the court or judge shall require the en-
    joined party to execute an undertaking in such form
    and amount and with such sureties as the court or
    judqe may direct, conditioned to indemnify the
    party who obtained the injunction order against
    loss sustained by reasons of the dissolution."
     (~mphasisadded.)
     The 1983 codification merely adopts the Ch. 12 version,
but substitutes "enjoined party" for "defendant" and "party
who obtained the injunction order" for "plaintiff."      These
terms were borrowed    from Ch.   399.   The   substitution is
reasonable; the terms are more appropriate to the subject
matter in the statute and more clearly express legislative
intent.   The use of terms "plaintiff" and "defendant" assumes
the defendant is always enjoined and the plaintiff is always
the party who obtained the injunction order.   This is usually
the case, but may not always be so.      Th.e clear intent of
section 27-19-405, MCA, is to provide the party who had
obtained an injunction because of a threatened injury an
alternate means of security when the injunction is dissolved.
     In sum, there is no practical difference between any of
the versions of section 27-19-405, MCA.            They all call for
the substitution of a bond for an injunction.          The amount of
the bond is to be equivalent to the loss sustained by the
party who had secured the injunction when the injunction is
dissolved.
     The present     codification    of   section 27-19-405, MCA,
contained in the 1983 Montana Code Annotated is a proper
statement of the law as intended by the legislature.
PLAINTIFF'S DISABILITY
     Defendants contend that plaintiff is without authority
to bring suit in Montana because it is a foreign corporation
transacting business        in Montana without a certificate of
authority.    We   agree.      Section 35-1-1004(l), MCA, states:
     "35-1-1004.       Transacting   business    without
     certificate--disabilities - liabilities. (1) No
                               and
     foreign corporation transacting business in this
     state without a certificate of authority shall be
     permitted to maintain any action, suit, or
     proceeding in any court in this state until such
     corporation shall have obtained a certificate of
     authority.     Nor shall any action, suit, or
     proceeding be maintained in any court of this state
     by any successor assignee of such corporation on
     any right, claim, or demand arising out of the
     transaction of business by such corporation in this
     state until a certificate of authority shall ha.ve
     been obtained by such corporation or by a
     corporation which has acquired all or substantia1.l~
     all of its assets."
     Uncontradicted evidence tendered at the August 24, 1983
hearing   shows    the   plaintiff   corporation    lacked   a   valid
certificate of authority.        The Secretary of State certified
that he had no record of a Utah corporation registered as
Marketing Specialists, Inc.
    At the August        24,   1983 hearing, the District Court
refused to dismiss plaintiff's complaint on the grounds of
disability.
     The District Court's ruling is erroneous.           Tt is at odds
with the plain meaning of section 35-1-1104, MCA.            Plaintiff
does not contend that Marketing Specialists, Inc. has a valid
certificate of authority to do business in Montana.                  It,
however, alleges the following facts as a basis for Marketing
Specialists, Incls. authority to bring               suit in Montana.
Marketing     Specialists,   Inc.    received    a     certificate    of
authority in 1974, but said certificate was suspended in
1978.        Another   company,     IMPAC   Marketers,      Inc.     was
incorporated in 1975 by the same principals who control-led
Marketing Specialists, Inc.         IMPAC presently holds a valid
certificate of authority in Montana.
     Apparently IMPAC used the name of Marketing Specialists
as a trade name for business purposes.          There is no evidence
in the record of a merger of Marketing Specialists into IMPAC
or other acquisition by TMPAC.          The fact that the IMPAC
interests control Market Specialists, Inc. d.oes not bestow
upon Market Specialists IMPAC1s authorized access to Montana
courts.      If IMPAC is the real party in interest in this
action, it should have brought suit in its own name.               Under
section 30-13-202, MCA, it could not use the name "Marketing
Specialists, Inc." as an assumed name because of the term
"incorporated."    Under section 30-13-216, MCA, a corporation
acting under an assumed name without registration has no
right of access to our courts.
     The complaint against defendants shall be               dismissed
unless the plaintiff amends its complaint to name the proper
party within a reasonable time as prescribed by Rule 17 (a),
M.R.Civ.P.
PROPRIETY - INJUNCTION PROCEEDINGS
          OF
        This issue must he reviewed in sequence and each ruling
of the District Court examined.            On August 12, 1983, on the
motion of plaintiff, the District Court issued a temporary
restraining order ITRO) restraining defendant from contacting
certain manufacturers.       This order was issued without notice
or hearing.       The District Court acted within the statutory
authority set forth in sections 27-19-301, MCA, et seq.
        The order was in the proper form and supported by the
proper verification.      A show cause hearing was set for August
22, 1983 to determine if the TRO should become a preliminary
injunction.
        At the show cause hearing, the District Court dissolved
the TRO and then ordered. the plaintiff to post a $35,000
bond.     The court acted within its authority in dissolving the
temporary restraining order.             Section 27-19-319, I I A
                                                             JC.          The
District Court, however, lacked. statutory authority to impose
a $35,000 bond on the plaintiff.           The court purported to act
under section 27-19-307, MCA.             A close reading of section
27-19-307,    MCA,     reveals    that    the   judge    may    require   an
undertaking to be given      5 - party
                               the              who obtained the order.
The     section   is   inapplicable because        the    District   Court
dissol-ved the TRO.      There was no injunction order in effect
when Marketing Specialists, Inc. was required to post bond.
The purpose of section 27-19-306, MCA and section 27-19-307,
MCA, requiring the party who is granted a TRO or injunction
to post bond is to cover the cost of damages that may be
suffered by a party who is wrongfully enjoined or restrained.
        Plaintiff never posted the $35,000 bond.               The District
Court stayed its order and held another hearing on plain-
tiff's motion to amend.          After that hearing on September 21,
1983, the District Court issued an order on September 23,
                                                                         h.

1983, amending its August 26, 1983 order to provide::                           (1)
delete requirement that plaintiff post a $35,000 bond; (2)
ordered defendants to post a $75,000 bond and if no bond was
posted     by     defendants within        three    days       the   phiintiff's
restraining order would continue until bond is posted.
      Plaintiff argues that the September 23, 1983, order is
proper      under    the   authority       of    section       27-19-405, MCA,
previously set forth herein.               Defendants argue that issuing
a TRO without notice or hearing violates due process and they
have been treated unfairly.
      The District Court did not follow the statutory scheme
in issuing its final amended order.                Section 27-19-405, MCA,
is not applicable.          The section applies to a case where an
injunction order has been              issued and       is presently being
dissolved.        In this case an injunction never issued, only a
TRO which was dissolved one month prior to the order.                         A TRO
and   an    injunction      are   not    equivalent.       A    TRO    generally
precedes an injunction and is intended to last only until a
hearing is held and a decision made on the injunction appli-
cation.     See section 27-19-314, MCA.            No hearing or notice is
required to dissolve a TRO.             Section 27-19-319, MCA.           Notice
and hearing are required to modify or dissolve an injunction.
Section 27-19-404, MCA.           Section 27-19-405 applies to injunc-
tions and is therefore inapplicable in this case.
      The       court's    September     23,     1983   order        called     for
plaintiff's restraining order to continue if defendants did
not post bond.        There was no restraining order in effect when
this order was issued.             The District Court is required to
follow      the     statutory     scheme    in     issuing      a    preliminary
injunction.        After considering the evidence presented at the
hearing, the court must make independent findings stating the
grounds on which the injunction is granted.             In this case the
District Court made no findinqs and stated no grounds.                Due
regard for the statutory process and adequate consideration
of   the   facts are essential to protect the parties                 from
misapplication of the extraordinary prejudgment remedy of
injunction.
      In   conclusion, we     hold    section     27-19-405, MCA,      as
codified is a correct expression of: the law.                  The code
commissioner acted within her authority in rewording the two
legislative bills because the meaning of the law was not
changed.
      Marketing Specialists, Inc. is statutorily barred from
bringing     suit   in   Montana   because   it   did    not   meet   the
requirements of section 35-1-1004, MCA.
      The District Court failed to follow proper statutory
procedure when it ordered the defendant to post a bond in
lieu of continuing a nonexistent restraining order.
      Accordingly, we reverse the District Court, vacate all
injunction orders or requirements for bonds and instruct the
court to dismiss plaintiff's          complaint unless amended to
include a real party in interest within a reasonable time to
be set by the District Court.
      Reversed.

We Concur:
Justices