MARTEL CONSTR INC v GLEASON EQUI

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No, 12886 I N THE SUPREME COURT O THE STATE O M N A A F F OTN 1975 MARTEL CONSTRUCTION, I N C , , a Montana corpora t i o n , P l a i n t i f f and Respondent, GLEASON EQUIPMENT, INC., Illinois co~poration, an Defendant and A p p e l l a n t , Appeal from: D i s t r i c t Court o f t h e Eighteenth J u d i c i a l D i s t r i c t , Honorable W , W, Lessley, Judge p r e s i d i n g , Counsel of Record: F o r Appellant : Berg, Angel, Andriolo and Morgan, Bozeman, Montana Gregory 0, Morgan argued, Bozeman, Montana For Respondent : Drysdale, McLean and S c u l l y , Bozeman, Montana James A. McLean argued, Bozeman, Montana Submitted : A p r i l 8 , 1975 Decided: APR 2 8 7975 Mr. J u s t i c e Wesley C a s t l e s d e l i v e r e d t h e Opinion of t h e C o u r t . T h i s i s a n a p p e a l by t h e d e f e n d a n t , Gleason Equipment, Inc., h e r e i n a f t e r r e f e r r e d t o a s s e l l e r , from a judgment e n t e r e d i n t h e d i s t r i c t c o u r t , G a l l a t i n County, i n f a v o r of p l a i n t i f f , Martel Construction, Inc., h e r e i n a f t e r r e f e r r e d t o a s buyer, i n t h e amount of $2,101.39. On A p r i l 1 9 , 1973, buyer e n t e r e d i n t o n e g o t i a t i o n s f o r t h e p u r c h a s e of a P & H Model 4 4 0 TC-40 t o n t r u c k c r a n e by w r i t - i n g a l e t t e r of i n q u i r y t o t h e s e l l e r . S e l l e r r e p l i e d by l e t t e r d a t e d A p r i l 2 4 , 1973. On May 1 5 , 1973, buyer a g r e e d t o p u r c h a s e and s e l l e r a g r e e d t o s e l l t h e c r a n e a s d e s c r i b e d i n s e l l e r ' s q u o t a t i o n 7173 f o r t h e sum o f $93,328.40, p l u s t h e c o s t of f r e i g h t i n t h e amount of $3,186.48. The c o n t r a c t c o n s i s t e d of s e v e r a l i t e m s of c o r r e s p o n d e n c e which t a k e n t o g e t h e r c o n s t i t u t e d t h e s u b s t a n c e of t h e agreement between buyer and s e l l e r . Although t h e r e was no s t a t e m e n t i n t h e w r i t i n g s s p e c i f i c a l l y s t a t i n g t h a t t i m e was of t h e e s s e n c e t o t h e c o n t r a c t o r naming a d e l i v e r y d a t e , t h e r e w e r e s t a t e m e n t s t h a t s e l l e r was t o s u p p l y t h e c r a n e "promptly" and " t o s u i t your convenience". Over o b j e c t i o n , t h e d i s t r i c t c o u r t p e r m i t t e d Walter M a r t e l , s e c r e t a r y - t r e a s u r e r of t h e b u y e r , t o t e s t i f y t h a t buyer a d v i s e d s e l l e r t h e c r a n e was needed d u r i n g t h e l a t t e r p a r t o f May 1973; t h a t s e l l e r r e p r e s e n t e d t h e c r a n e d e s i r e d was a v a i l a b l e and would be s h i p p e d promptly t o s u i t b u y e r ' s c o n v e n i e n c e and needs; a n d , t h a t a m a t e r i a l p a r t of t h e c o n t r a c t i n d u c i n g buye r t o p u r c h a s e t h e c r a n e was s e l l e r ' s a s s u r a n c e s t h a t t h e c r a n e would be d e l i v e r e d t o buyer t h e l a s t week i n May o r t h e f i r s t p a r t o f J u n e 1973. The c r a n e a r r i v e d by r a i l r o a d i n Bozeman on J u n e 3 , 1973. S e l l e r ' s s e r v i c e e n g i n e e r , J o e Ashley, a r r i v e d i n Bozeman on J u n e 7 , 1973, and buyer was a b l e t o unload t h e c r a n e t h e f o l l o w i n g day. I n unloading t h e c r a n e , t h e following p a r t s w e r e d i s - c o v e r e d t o be m i s s i n g which r e n d e r e d t h e c r a n e i n o p e r a b l e : a 350 f o o t c a b l e ; hook, b l o c k and b a l l ; and two d r i v e wedges. Buyer immediately gave n o t i c e t o s e l l e r of t h e m i s s i n g p a r t s . Following j o i n t e f f o r t s by buyer and s e l l e r , t h e m i s s i n g p a r t s w e r e r e c e i v e d on J u n e 26, 1973. On September 2 6 , 1973, buyer f i l e d i t s c o m p l a i n t a l l e g i n g damages r e s u l t i n g from " f a i l u r e t o d e l i v e r t o the p l a i n t i f f t h e crane i n operable condition." The d i s t r i c t c o u r t judgment awarded t h e s e damages: $40,demurrage t o t h e r a i l w a y company; $ 6 2 . 1 8 , f r e i g h t on t h e hook and b l o c k ; $351.61 c o s t of c a b l e and f r e i g h t ; $191.87,overcharge f o r f r e i g h t o f c r a n e ; $77.50, t h e n e t sum expended by buyer f o r t h e r e n t a l of a c r a n e i n B i l l i n g s ; a n d , $1,378.23, t h e r e a s o n a b l e r e n t a l v a l u e of t h e c r a n e from June 5 , 1973, (the date the court found t h e c r a n e f i r s t c o u l d have been u n l o a d e d ) t o J u n e 26, 1973. While a number o f i s s u e s w e r e r a i s e d by t h e p a r t i e s , w e f i n d t h e r e s o l u t i o n of two t o be d e t e r m i n a t i v e of t h i s a p p e a l : (1) Whether p a r o l e v i d e n c e was a d m i s s i b l e i n s u p p o r t of a f i n d i n g t h a t t i m e was of t h e e s s e n c e i n t h i s c o n t r a c t ? ( 2 ) Whether t h e r e i s s u b s t a n t i a l c r e d i b l e evidence t o support t h e d i s t r i c t c o u r t ' s f i n d i n g of f a c t No. I V ? The f i r s t i s s u e i s whether p a r o l e v i d e n c e wa.s a d m i s s i b l e i n s u p p o r t o f a f i n d i n g t h a t t i m e o f d e l i v e r y was of t h e e s s e n c e i n t h i s contract. dence. W h o l d it was e r r o r t o admit s u c h p a r o l e v i e S e c t i o n 13-724, R.C.M. 1947, p r o v i d e s : "Time i s n e v e r c o n s i d e r e d a s o f t h e e s s e n c e of a c o n t r a c t , u n l e s s by i t s t e r m s e x p r e s s l y s o provided. " I n i n t e r p r e t i n g t h a t s e c t i o n , t h i s C o u r t s t a t e d i n C u r t i s v . Parham, 49 Mont. 1 4 0 , 1 4 4 , 1 4 0 P. 511: "Under t h i s s e c t i o n , b u t o n e s u b j e c t i s open t o d i s c u s s i o n , and t h a t i s n o t what t h e p a r t i e s may have i n t e n d e d t o s a y , b u t what t h e y d i d s a y i n t h e i r c o n t r a c t . It i s t r u e , of course, t h a t no s e t form o r arrangement of words i s necess a r y , b u t t h e c o n t r a c t must, upon i t s f a c e , convey t h e meaning t h a t t i m e s h a l l be of t h e e s s e n c e . Our s t a t u t e w i l l n o t p e r m i t an o r a l e x t r i n s i c showing t h a t s u c h was t h e i n t e n t i o n of t h e p a r t i e s t o a w r i t t e n c o n t r a c t , t h e t e r m s o f which a r e e x p r e s s e d i n c l e a r and e x p l i c i t language." Buyer r e l i e s on s t a t e m e n t s i n t h e c o r r e s p o n d e n c e between t h e p a r t i e s which, it c o n t e n d s , c r e a t e a n a m b i g u i t y a s t o whether t i m e was of t h e e s s e n c e and t h a t p a r 0 1 e v i d e n c e was a d m i s s i b l e f o r t h e r e s o l u t i o n of t h a t a m b i g u i t y . W f i n d no a m b i g u i t y . e In h i s i n i t i a l l e t t e r of i n q u i r y , Walter M a r t e l s t a t e d t h a t t h e c r a n e was "Required May 1 5 , 1973". I n i t s l e t t e r of reply, s e l l e r s t a t e d , "we c a n s h i p new from t h e f a c t o r y between now and e a r l y May, t o s u i t your c o n v e n i e n c e . " These s t a t e m e n t s were made f o u r and t h r e e weeks p r i o r t o t h e agreement e n t e r e d i n t o on May 1 5 , 1973, o v e r t h e t e l e p h o n e , and shed no l i g h t on t h a t l a t e r a g r e e ment. I n i t s l e t t e r d a t e d May 1 5 , 1973, c o n f i r m i n g t h e agreement of t h e same d a y , s e l l e r s t a t e d , "we w i l l t r y t o g e t [ i t ] s h i p p e d from t h e f a c t o r y by no l a t e r t h a n F r i d a y of t h i s week." s t a t e m e n t i s s t r a i g h t f o r w a r d , i t i s n o t ambiguous. h i n t t h a t t i m e i s of t h e e s s e n c e . The T h e r e i s no The f a c t t h a t buyer was en- t i t l e d t o a 1 2 % c a s h d i s c o u n t f o r f u l l payment upon d e l i v e r y s h e d s no l i g h t upon t h e i s s u e of when d e l i v e r y was r e q u i r e d . The above d i s c u s s i o n i s n o t a l t e r e d by s e c t i o n 87A-2-202, Uniform Commercial Code, R.C.M. 1947, which s t a t e s t h a t a w r i t t e n c o n t r a c t "may be e x p l a i n e d o r supplemented of c o n s i s t e n t a d d i t i o n a l t e r m s * * *". * * * ( b ) by e v i d e n c e The t e r m s of a s p e c i f i c s t a t u t e p r e v a i l o v e r t h o s e of a g e n e r a l s t a t u t e which o t h e r w i s e might be c o n t r o l l i n g . s i f i e d Engineers, I n c . , Sun I n s u r a n c e Co. of N e w York v . Diver2 4 0 F.Supp. 606, 609 (D.Mont. 1965). The second i s s u e i s whether t h e r e i s s u b s t a n t i a l c r e d i b l e e v i d e n c e t o s u p p o r t t h e d i s t r i c t c o u r t ' s f i n d i n g of f a c t No. I V : "That t h e m a t e r i a l a p a r t o f t h e b a s i s of t h e t r a n s a c t i o n and b a r g a i n i n d u c i n g M a r t e l t o p u r c h a s e t h e c r a n e was G l e a s o n ' s a s s u r a n c e s t h a t t h e c r a n e would be d e l i v e r e d t o M a r t e l t h e l a s t week i n May o r t h e f i r s t week i n J u n e of 1973, and f u r t h e r , t h a t Gleason would have a r e p r e s e n t a t i v e i n Bozeman, Montana, upon a r r i v a l of t h e c r a n e t o u n l o a d and e r e c t t h e c r a n e a t no e x t r a charge. " W do n o t f i n d s u b s t a n t i a l c r e d i b l e e v i d e n c e t o s u p p o r t e t h i s finding. A s p r e v i o u s l y d e t e r m i n e d , p a r 0 1 e v i d e n c e must be d i s r e g a r d e d i n making any d e t e r m i n a t i o n a s t o t i m e of d e l i v e r y . Thus we a r e l e f t w i t h t h e s t a t e m e n t s i n t h e c o r r e s p o n d e n c e which we p r e v i o u s l y d i s c u s s e d . From what we have s a i d , it i s e v i d e n t t h e r e i s no e v i d e n c e whatsoever from which t o make a d e t e r m i n a t i o n a s t o t i m e of d e l i v e r y . The second p a r t of f i n d i n g of f a c t No. IV--that seller would have a r e p r e s e n t a t i v e i n Bozeman upon a r r i v a l of t h e c r a n e , i s s i m p l y c o n t r a d i c t e d by t h e e v i d e n c e . a t t h e t r i a l was Walter M a r t e l . The o n l y p e r s o n t o t e s t i f y He s t a t e d t h a t "When t h e e q u i p - ment a r r i v e d " buyer was t o c o n t a c t s e l l e r , s o t h a t a s e r v i c e e n g i neer could f l y o u t t o a s s i s t i n t h e unloading. The s e r v i c e en- g i n e e r a r r i v e d i n Bozeman l a t e on J u n e 7 and t h e c r a n e was unloaded t h e n e x t day. There was no e v i d e n c e t h e s e r v i c e e n g i n e e r ' s a r - r i v a l was u n r e a s o n a b l y d e l a y e d . Since t h e c o u r t ' s finding t h a t t h e s e r v i c e e n g i n e e r w a s t o be i n Bozeman upon a r r i v a l of t h e c r a n e formed t h e b a s i s f o r t h e d i s t r i c t c o u r t ' s judgment awarding $40 damages f o r t h e demurrage t o t h e r a i l w a y company, t h a t p o r t i o n of t h e judgment must be r e v e r s e d . Contrary t o t h e c o u r t ' s finding No. X I V s e l l e r h a s n e v e r a d m i t t e d l i a b i l i t y f o r t h e $40 demurrage charge. S e c t i o n 87A-2-309(1), R.C.M. 1947, s t a t e s : "The t i m e f o r shipment of d e l i v e r y o r any o t h e r a c t i o n under a c o n t r a c t i f n o t p r o v i d e d i n t h i s c h a p t e r o r a g r e e d upon s h a l l be a r e a s o n a b l e time. " No c o n t e n t i o n h a s been made t h a t t h e d e l i v e r y of a c o m p l e t e c r a n e by J u n e 2 6 , 1973, was n o t w i t h i n a r e a s o n a b l e t i m e . S e l l e r a d m i t t e d i t s b r e a c h of s e c t i o n 87A-2-307, R.C.M. 1947, i n t h a t i t d i d n o t t e n d e r a c o m p l e t e c r a n e i n a s i n g l e d e l i v e r y , and a d m i t t e d i t s l i a b i l i t y f o r t h e s e damages: f r e i g h t on t h e hook and b l o c k ; $351.61, $191.87, $62.18, c o s t of c a b l e and f r e i g h t ; o v e r c h a r g e f o r f r e i g h t of c r a n e . A c c o r d i n g l y , t h e judgment i s m o d i f i e d s o a s t o award buyer judgment i n t h e amount of $605.66, p l u s i n t e r e s t from t h e r e s p e c t i v e d a t e s t h e r i g h t s t o r e c o v e r t h e damages v e s t e d i n t h e buyer ( s e c t i o n 17-204, R.C.M. 1947) t h r o u g h J u l y 2 , 1974, t h e d a t e s e l l e r o f f e r e d t o l e t judgment be r e n d e r e d a g a i n s t i t f o r t h e sum of $605.66 ( s e c t i o n 58-427, 1947). C o s t s on a p p e a l ---, ~---,L,~Cz,4,--i---i--i--i--i-A . -------------- R.C.M. a r e awarded t o s e l l e r . , ! Justice W concur: e Hon. E . Garaner Brcwnlee, d i s t r i c t judge, s i t t i n g i n p l a c e of M r . Chief J u s t i c e James T. H a r r i s o n . "

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