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: May 1 7 , 1 9 7 2
Decided: 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 Rosen-
owned
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 pur-
chaser;
"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 Rail-
way 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 prem-
ises 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 $2,811.25 w i t h no payment date specified. As payments
came i n t o p l a i n t i f f from Zook, p l a i n t i f f made corresponding payments
a t 6jt per cubic yard t o defendants Rosenquist. There was no rejection of
payments by Rosenquists on gravel furnished the Great Northern.
However, a controversy arose over s a l e by p l a i n t i f f t o the general
public of r e j e c t gravel piled on Rosenquists' land. T h i s r e j e c t gravel was
a by-product of producing dimensional gravel t o meet the Great Northern
Railway's requirements. P l a i n t i f f began making s a l e s t o the pub1 i c of this
r e j e c t gravel. About May 2, 1969, defendant Byron Rosenquist contacted
p l a i n t i f f and demanded payment f o r a1 1 amounts outstanding, contending t h a t
nothing had been paid h i m by p l a i n t i f f since the preceding December while
nearly 300,000 cubic yards of gravel had been taken from defendants' land.
On May 5, 1969, p l a i n t i f f did go t o see defendant but no o f f e r of payment
o r settlement was made a t t h a t time. P l a i n t i f f contended t h a t the e n t i r e
r e j e c t p i l e of gravel was his by v i r t u e of the agreement heretofore s e t
f o r t h and t h a t he had the r i g h t t o s e l l the r e j e c t and remit 6$ 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 gen-
eral 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 hear-
ing 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. Judgment was entered ac-
cordingly. 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 pay-
ments 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 reck-
oning 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 prac-
ticable, 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. This i s a spur-
ious issue under the f a c t s of t h i s case. 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 de-
fendants 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 represent-
ing 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. Section 49-124,
R.C.M. 1947 provides t h a t the law does not require i d l e a c t s . A applied t o
s
tenders, see Sherl ock v. Vinson, 90 Mont. 235, 1 P .2d 71 .
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 pre-
cl 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 de-
livered t o the Great Northern Railway; and (3) damages of $2,500 f o r f a i l u r e
of Claver t o restore the land of defendants t o i t s original condition a f t e r
the digging and crushing of the gravel. N findings, one way o r the other,
o
were entered by the d i s t r i c t court on these counterclaims, and no mention
was made of any of t h e counterclaims i n the d i s t r i c t c o u r t ' s judgment. We
hold t h a t the d i s t r i c t court should have made findings concerning these
issues and entered judgment accordingly .
The t h i r d issue f o r review concerns whether the d i s t r i c t court com-
mitted e r r o r i n not allowing the defendants t o amend t h e i r answer and
counterclaim t o conform t o the evidence pursuant t o Rule 15(b), M.R.Civ.P.
Defendants' motion t o amend requests permission t o i n s e r t a counterclaim t o
the e f f e c t t h a t i n addition t o the 100,000 cubic yards of dimensional gravel
t h a t was delivered t o the Great Northern Railway Company from defendants'
property, an additional 400,000 cubic yards of r e j e c t was severed from de-
fendants ' lands; t h a t i n the event the r e j e c t became the property of the
p l a i n t i f f upon severance from the defendants' 1ands, defendants a r e e n t i t l e d
t o the sum of 6$ 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 hereto-
f 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:
I dissent. The d i s t r i c t court and the majority of this Court
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.
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Associate d t i c e