CLAVER v ROSENQUIST

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No. 12103 IN THE SUPREME COURT OF THE STATE OF MONTANA 1972 JAMES H. CLAVER, P l a i n t i f f and Respondent, . VS BYRON N. ROSENQUIST a n d KATIE ROSENQUIST, Defendants and A p p e l l a n t s . Appeal from: District Court o f t h e Tenth J u d i c i a l District H o n o r a b l e LeRoy L . M c K i n n o n , J u d g e p r e s i d i n g . Counsel o f Record: For Appell a n t : Robert L. Johnson a r g u e d , Lewistown, Montana. For Respondent: P e t e r L. Rapkoch, Lewistown, Montana. B . Miles L a r s o n a r g u e d , S t a n f o r d , M o n t a n a . Submitted: Decided: May 1 7 , 1 9 7 2 JUL 2 11972 Mr. Justice Frank I . Haswell delivered the Opinion of the Court. In a controversy involving the s a l e of gravel under a written contract, the d i s t r i c t court of Fergus County, the Honorable LeRoy L . McKinnon, d i s t r i c t judge, presiding without a jury, granted p l a i n t i f f a permanent injunction restraining the defendants from interfering in any way with p l a i n t i f f ' s access, control and disposition of r e j e c t gravel stored on defendants' land; from interfering with plaintiff ' s trade or business of selling t h i s reject gravel during the term of the contract; and awarded plaintiff nominal damages of $100. Following denial of defendants ' motion t o amend the findings of f a c t , conclusions of law and judgment defendants now appeal from the final judgment. The underlying f a c t s of this matter may be summarized. In the f a l l of 1968, defendants Byron N. Rosenquist and his elderly mother Katie Rosenowned quist, jointlylland near Stanford, Montana containing gravel deposits. In November, 1968 p l a i n t i f f James H. Claver entered into a contract with the Rosenquists as f o l l ows: "THIS AGREEMENT made this 19 day of November, 1968, between Byron N. Rosenquist and Katie Rosenquist of Stanford, Montana, herein call ed the s e l l e r s , and James H. Claver of Stanford, Montana, herein called the purchaser; "For the consideration hereinafter s e t forth, the s e l l e r s do hereby agree t o s e l l t o the purchaser a l l gravel and sand, required f o r any Great Northern Railway gravel bid, whether bid direct or indirectly by said purchaser, located in and on the following described land in the County of Judith Basin, State of Montana, described as f o l l ows : "From the p i t of the said s e l l e r s next t o the s e l l e r ' s feed yard on the Southern edge of the Town of Stanford, in Section 16, Township 16, Range 12, "for the price of s i x cents ( 6 t ) per cubic yard. The purchaser shall have f u l l rights of ingress and egress i n , on, over and across and through the above described land for the purpose of mining, storing and removing the sand and gravel purchased hereunder. The s e l l e r s agree that their livestock shall n o t run a t large on said premises during the mining and storing operations. "The purchaser shall have the r i g h t t o construct any and a1 1 roadways as may be reasonably necessary or convenient t o the mining, storing and removing of the sand and gravel p u r chased hereunder. Further, the purchaser shall have the r i g h t t o stockpile on any ground adjacent t o said p i t , a l l of the r e j e c t sand and gravel, and shall have access t o said stockpile f o r a period of f i v e (5) years. "Purchaser shall use a l l possible care and diligence and shall conduct h i s operations in such a manner as not t o cause undo damage t o the above described land. "Upon the termination of operations under t h i s agreement, the surface of the ground appurtenant t o the gravel p i t shall be smooth and restored by the purchaser t o as near the present condition as possible and any stripping material shall be placed back i n t o the p i t . " I t i s f u r t h e r agreed between the p a r t i e s hereto t h a t the purchaser shall have the exclusive r i g h t t o the sand and gravel from said p i t in f u t u r e years a t the price herein agreed upon f o r so long a s the said purchaser shall comply with the terms of t h i s Contract. "This agreement shall be binding upon-the h e i r s , executors, administrators, and assigns of the p a r t i e s hereto. "/s/ B. N . Rosenquist "/s/ Katie Rosenqui s t "/s/ James H. Claver" Thereafter p l a i n t i f f contracted w i t h Zook Brothers Construction Company, who had a contract t o supply gravel t o the Great Northern Railway, t o use gravel from the Rosenquist land under the contract t h a t p l a i n t i f f had with the Rosenquists. P l a i n t i f f received a down payment of $2,500 from Zook under his contract w i t h them and paid the Rosenquists $1,200 down on h i s contract with them, a l l in 1968. In March, 1969,the Zook Brothers Con- s t r u c t i o n Company moved onto defendants' property and began excavating and processing gravel f o r the Great Northern Railway Company. By the end of May, 1969, Zook had completed h i s job of furnishing gravel t o the Great Northern and had taken his crusher off of defendants' property; a t t h i s time a1 1 gravel had been delivered t o the Great Northern. According t o Zook's figures they had delivered 100,000 cubic yards of gravel t o the Great Northern, b u t according t o the Great Northern Zook had furnished them only 86,625 cubic yards; i n any event whatever the volume was i t was s u f f i c i e n t t o s a t i s f y the Rail road's requirements. Zook Brothers remitted a t o t a l of $1 1,261.25 t o p l a i n t i f f f o r 86,625 cubic yards of gravel f o r the Great Northern. T h i s includes the $2,500 down payment i n 1968, $5,950 paid i n June 1969, and $2,811.25 w i t h no payment date specified. As payments came i n t o p l a i n t i f f from Zook, p l a i n t i f f made corresponding payments a t 6jt per cubic yard t o defendants Rosenquist. There was no rejection of payments by Rosenquists on gravel furnished the Great Northern. However, a controversy arose over s a l e by p l a i n t i f f t o the general public of r e j e c t gravel piled on Rosenquists' land. T h i s r e j e c t gravel was a by-product of producing dimensional gravel t o meet the Great Northern Railway's requirements. r e j e c t gravel. P l a i n t i f f began making s a l e s t o the pub1 i c of this About May 2, 1969, defendant Byron Rosenquist contacted p l a i n t i f f and demanded payment f o r a1 1 amounts outstanding, contending t h a t nothing had been paid h i m by p l a i n t i f f since the preceding December while nearly 300,000 cubic yards of gravel had been taken from defendants' land. On May 5, 1969, p l a i n t i f f did go t o see defendant but no o f f e r of payment o r settlement was made a t t h a t time. P l a i n t i f f contended t h a t the e n t i r e r e j e c t p i l e of gravel was his by v i r t u e of the agreement heretofore s e t f o r t h and t h a t he had the r i g h t t o s e l l the r e j e c t and remit 6$ per cubic yard t o defendants. Defendant Byron Rosenquist t h e r e a f t e r on occasion a t tempted t o and did personally stop f u r t h e r removal of r e j e c t gravel from his property by p l a i n t i f f . On May 8 , 1969, p l a i n t i f f tendered t o the defendants a check f o r $353.70 f o r r e j e c t gravel , which check was refused by defendants. Subsequently p l a i n t i f f purchased various pieces of equipment such as a loader, a dump truck and a pickup i n order t o s e l l gravel t o the general public. H also began negotiating w i t h a ready-mix firm i n Great F a l l s e t o bring water onto the defendants ' land t o s e t up a washing plant but the deal never material ized. On June 4 , 1969, defendant Rosenquist published a notice i n the Judith Basin Press disclaiming any agency relationship with p l a i n t i f f , and began calling some of p l a i n t i f f ' s customers t e l l i n g them, i n e f f e c t , t h a t p l a i n t i f f had no r i g h t t o s e l l the gravel. Defendant Rosenquist also attempted t o dissuade them from paying p l a i n t i f f f o r gravel previously del ivered. On June 24, 1969, p l a i n t i f f i n s t i t u t e d the i n s t a n t suit containing three claims: (1) a claim f o r a permanent injunction against interference by Rosenquist, together w i t h reasonable a t t o r n e y ' s f e e s f o r securing the same; (2) a claim f o r damages i n the amount of $1,760.11 , resulting from alleged malicious and oppressive conduct by Rosenquist which induced t h i r d party purchasers t o refuse del ivery and payment f o r gravel furnished by Claver t o them; (3) a claim f o r punitive damages of $10,000 f o r alleged malicious and oppressive interference by defendant Byron Rosenquist w i t h Claver's gravel business. On the basis of the verified complaint the d i s - t r i c t court issued a temporary restraining order prohibiting defendants from i n t e r f e r i n g with p l a i n t i f f ' s gravel business and from dealing with o r disposing of the r e j e c t gravel. Subsequently defendants ' answer and countercl aim was f i 1ed, a hearing was held, and the d i s t r i c t court granted an injunction pendente l i t e i n favor of pl a i n t i f f and against defendants. Thereafter defendants f i 1ed t h e i r amended answer and counterclaim. Defendants answer contained f i v e defenses: (1) f a i l u r e t o s t a t e a claim; ( 2 ) a general denial of everything other than the written contract; ( 3 ) t h a t p l a i n t i f f was not i n any event e n t i t l e d t o a t t o r n e y ' s f e e s ; (4) f a i l u r e of performance by p l a i n t i f f , consisting of nonpayment by h i m f o r gravel delivered t o the Great Northern Railway and f a i l u r e t o level the p i t a f t e r completion of the gravel operation; ( 5 ) t h a t p l a i n t i f f was not e n t i t l e d t o exemplary damages i n any event as h i s claims arose out of breach of a contract obl igation. In addition defendants f i 1ed three counterclaims: (1 ) f a i 1ure of the p l a i n t i f f t o furnish an accounting of s a l e s t o the public a f t e r demand by defendants; (2) f a i l u r e of the p l a i n t i f f t o pay defendants the balance due f o r delivery of gravel t o t h e Great Northern Railway Company in the amount of $2,100 with i n t e r e s t ; (3) f a i l u r e of p l a i n t i f f t o r e s t o r e t h e land t o i t s original condition w i t h accrued damages of $2,500. The case came on f o r t r i a l commencing July 30, 1970, and a f t e r a l l testimony and evidence was submitted the d i s t r i c t court granted the p a r t i e s additional time t o f i l e b r i e f s and motions resulting i n submission of the case f o r decision about February 1 , 1971. The d i s t r i c t court entered i t s findings of f a c t , conclusions of law and judgment on March 9, 1971. In substance the court construed the con- t r a c t as follows: "That the p l a i n t i f f should open and develop a gravel p i t on defendants' land; t h a t the overburden be stripped off and stored; t h a t the p l a i n t i f f should dig, process, and supply the gravel needed by the Great Northern Railway Company, and s t o r e the r e j e c t produced on the defendants' land; t h a t the p l a i n t i f f should r e s t o r e t h e overburden t o the p i t area, and leave i t as nearly as possible as smooth a s i t o r i g i n a l l y was; t h a t during this time the defendants' 1ivestock would not be permitted on the p i t area; t h a t t h e r e a f t e r f o r a period of f i v e years the p l a i n t i f f was t o have access t o the r e j e c t p i l e f o r the purpose of s e l l ing the said r e j e c t ; t h a t the defendants were t o receive .06f per cubic yard of gravel sold f o r both specification and r e j e c t gravel ". The court also found t h a t the p l a i n t i f f was e n t i t l e d t o a t l e a s t nominal damages and e n t i t l e d t o an order restraining defendantsfrom f u r t h e r interference w i t h h i s r i g h t s under the contract. cordingly. Judgment was entered ac- Following denial of defendants' motion t o amend the f i n d i n g s , defendants appeal from the f i n a l judgment. Defendants r a i s e three issues f o r review upon appeal which can be summarized in t h i s manner: 1. I s p l a i n t i f f e n t i t l e d t o injunctive r e l i e f against defendants? 2. Did the d i s t r i c t court e r r i n f a i l i n g t o grant defendants' judg- ment f o r money due them under the contract? 3. Did the d i s t r i c t court e r r i n denying defendants' motion f o r leave t o amend t h e i r pleadings t o conform to the evidence. On the f i r s t issue, defendants contend that the p l a i n t i f f was not e n t i t l e d to injunctive r e l i e f because p l a i n t i f f was in default on his payments under the contract and under such circumstances defendants were e n t i t l e d to employ self-help t o ha1 t further removal of the gravel until a reckoning was made f o r the gravel already removed. W find no error in the d i s t r i c t c o u r t ' s finding with respect t o the e terms of the contract. P l a i n t i f f was clearly e n t i t l e d t o s e l l the r e j e c t gravel t o others a t the contract price. Otherwise the provision in the con- t r a c t t h a t the purchaser shall have access t o the stockpile of r e j e c t sand and gravel f o r a period of 5 years, and t h a t he shall have the exclusive right t o the sand and gravel from the p i t in future years would be meaningless. Section 13-707, R.C.M. 1947 provides: "Effect t o be given t o every part of contract. The whole of a contract is t o be taken together, so as t o give e f f e c t t o every part, i f reasonably practicable, each clause helping to interpret the other." The only possible meaning of the quoted provisions of the contract i s t h a t p l a i n t i f f ha& the right to s e l l the r e j e c t gravel which was a by-product of the Great Northern Railway gravel bid. A great deal of argument by counsel was directed a t when payment was due under a contract which was s i l e n t as t o time of payment. ious issue under the f a c t s of t h i s case. This i s a spur- Insofar as the dimensional gravel sold t o the Great Northern Railway Company i s concerned, the record shows that a t the time of t r i a l payment by the p l a i n t i f f t o the defendants f o r 86,625 cubic yards of gravel had been made; t h a t defendant a t no time objected t o payment by p l a i n t i f f f o r t h i s dimensional gravel as was actually made; t h a t the defendants were s a t i s f i e d with the payments made f o r the Great Northern gravel excepting f o r the 13,375 cubic yards about which a dispute existed between the Great Northern Railway and Zook Brothers. Here there i s no substantial evidence as t o the amount actually delivered, nor any resolution of whether ~ o o k kdel ivery figures of 100,000 cubic Jl&d$ o r t h e Great Northern ' s figures of 86,625 cubic yards were correct. Under such circumstances, there is a f a i l u r e of proof t h a t anything i s owed by Claver t o t h e Rosenquists f o r the s a l e of the dimensional gravel t o the Great Northern Railway Company. Insofar as gravel s a l e s from the r e j e c t p i l e a r e concerned, the tender by p l a i n t i f f t o defendants of a c a s h i e r ' s check f o r $353.70 representing payment f o r r e j e c t gravel sold was refused by defendants. Counsel f o r defendants on oral argument contended t h a t the reason they d i d n ' t accept t h e tender of May 8 was f o r f e a r of estoppel against t h e i r contention t h a t they d i d n ' t have t o wait f o r payment until p l a i n t i f f sold the gravel from the r e j e c t p i l e . Whatever the reason may have been, the tender of payment was i n f a c t rejected pending determination of this controversy, excusing p l a i n t i f f from f u r t h e r tenders on s a l e s of r e j e c t gravel. R.C.M. Section 49-124, 1947 provides t h a t the law does not require i d l e a c t s . tenders, see Sherl ock v. Vinson, 90 Mont. 235, 1 P .2d 71 A applied t o s . For t h e foregoing reasons p l a i n t i f f was not i n default of payments due the Rosenquists under h i s contract w i t h them and accordingly i s not precl uded from securing injunctive re1 i e f here. Directing our a t t e n t i o n t o the second issue f o r review, we hold t h a t the d i s t r i c t court should have entered findings of f a c t , conclusions of 1aw, and judgment determining the issues raised by defendants'countercl aims. These counterclaims include: (1) a demand f o r an accounting; (2) a claimed balance of $2,100 and i n t e r e s t owing defendants f o r dimensional gravel delivered t o the Great Northern Railway; and (3) damages of $2,500 f o r f a i l u r e of Claver t o restore the land of defendants t o i t s original condition a f t e r the digging and crushing of the gravel. N findings, one way o r the other, o were entered by the d i s t r i c t court on these counterclaims, and no mention was made of any of t h e counterclaims i n the d i s t r i c t c o u r t ' s judgment. W e hold t h a t the d i s t r i c t court should have made findings concerning these issues and entered judgment accordingly . The t h i r d issue f o r review concerns whether the d i s t r i c t court committed e r r o r i n not allowing the defendants t o amend t h e i r answer and counterclaim t o conform t o the evidence pursuant t o Rule 15(b), M.R.Civ.P. Defendants' motion t o amend requests permission t o i n s e r t a counterclaim t o the e f f e c t t h a t i n addition t o the 100,000 cubic yards of dimensional gravel t h a t was delivered t o the Great Northern Railway Company from defendants' property, an additional 400,000 cubic yards of r e j e c t was severed from defendants ' lands; t h a t i n the event the r e j e c t became the property of the p l a i n t i f f upon severance from the defendants' 1ands, defendants a r e e n t i t l e d t o the sum of 6$ per cubic yard, o r a t o t a l of $24,000 with i n t e r e s t . Suffice i t t o say t h a t there i s simply no s u b s t a n t i a l , credible basis in the evidence t o support such a claim. Accordingly the d i s t r i c t court correctly denied defendants motion t o amend. In summary then, we affirm the judgment of the d i s t r i c t court heretof o r e entered, b u t remand this cause t o the d i s t r i c t court f o r entry of findings of f a c t , concl usions of 1aw and judgment granting defendants an accounting and disposing of the bal ance of defendants ' counterclaims. Associate J u s t i c e w Associate Justices - 9 - Mr. J u s t i c e Wesley Castles dissenting: The d i s t r i c t court and the majority of this Court I dissent. have misconstrued the contract under the f a c t s here. I f as p l a i n t i f f , t h e purchaser, claims, he has a r i g h t t o s e l l the r e j e c t gravel ; then he must pay f o r i t a t the agreed r a t e , when i t was produced--not when and i f he ever s e l l s i t . The proof i s c l e a r t h a t the s e l l e r produced 100,000 yards of gravel f o r the Great Northern contract. This amount i s his own figure. Whether a dispute between Zook Brothers and Great Northern e x i s t s as t o i t s delivery should have no bearing here. T h u s , no injunction should have issued as p l a i n t i f f was in d e f a u l t of payments due. The majority opinion does, however, grant defendants an accounting w i t h which I agree. The accounting should allow payment t o the defendant of t h e amount due f o r delivery of gravel to Great Northern. I t should a l s o allow i n i t s resolution of the counterclaim a finding t h a t p l a i n t i f f did not r e s t o r e the land t o i t s original condition; and t h a t thus there was a breach of the contract. This l a t t e r finding would make the injunction issued improper. Under the circumstances here, Claver, the purchaser,had his own attorney draw the contract. Ambiguities should be interpreted against him. Additionally, i t appeared a t t r i a l t h a t the purchaser was c l e a r l y impeached i n his testimony by prior inconsistent statements made on depositions, and his testimony should n o t have been accepted. I t simply was not credible. The purchaser removed t h e gravel from i t s natural s t a t e , produced i t , and i s obligated t o pay f o r i t a t t h e agreed price whether he sold i t or stored it. I would reverse the judgment and d i r e c t f u r t h e r proceedings i n account- ing t o determine the amounts owing by p l a i n t i f f and the damages, i f any, f o r f a i l u r e t o l i v e up t o the terms of the contract. ,,,,,,, ,,,,,,,, & , -, d& &&& A-Associate d t i c e , ,,,,,, -,,,,,,

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