No. 13228
I N THE SUPREME COURT O F THE STATE O MONTANA
F
1977
DONALD WHITAKER, DOUGLAS
WHITAKER, and G A E M. WHITAKER,
R C
P l a i n t i f f s and R e s p o n d e n t s ,
FARMHAND, I N C . , a c o r p o r a t i o n , and
H L W. B I C K ,
A
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 Court of t h e Seventeenth J u d i c i a l D i s t r i c t ,
Honorable Thomas Dignan, J u d g e p r e s i d i n g .
C o u n s e l o f Record:
For Appellants:
Moulton, B e l l i n g h a m , Longo and M a t h e r , B i l l i n g s , Montana
Ward Swanser a r g u e d , B i l l i n g s , Montana
L-L~
__I
I-~ly I bl
F o r Respondents :
R o b e r t H u r l y a r g u e d , Glasgow, Montana
John M. K l i n e , M i l e s C i t y , Montana
Submitted: May 4 , 1977
Decided.
Hon. P e t e r G . Meloy, D i s t r i c t Judge, s i t t i n g f o r M r . J u s t i c e
Frank I . Haswell, d e l i v e r e d t h e Opinion of t h e Court.
This i s an a p p e a l by defendants from a judgment of t h e
d i s t r i c t c o u r t , P h i l l i p s County, i n f a v o r of p l a i n t i f f s .
The l i t i g a t i o n a r i s e s from t h e s a l e of a c i r c u l a r s p r i n k l i n g
i r r i g a t i o n system t o p l a i n t i f f s by d e f e n d a n t s .
The d i s t r i c t c o u r t found f o r p l a i n t i f f s .
The i s s u e s p r e s e n t e d f o r review a r e :
A. Did t h e d i s t r i c t c o u r t e r r i n f i n d i n g l i a b i l i t y on
b e h a l f of Bick and Farmhand, I n c . i n s t r i c t l i a b i l i t y , n e g l i g e n c e
i n d e s i g n , manufacture and i n s t a l l a t i o n , b r e a c h of w a r r a n t i e s ,
and t h e implied warranty of f i t n e s s ?
B. Did t h e c o u r t e r r i n r e j e c t i n g t h e d i s c l a i m e r o f
warranty and damages p r o v i s i o n of t h e warranty and c o n t r a c t .
C. Did t h e d i s t r i c t c o u r t e r r i n n o t applying t h e p r o p e r
measure of damages t o a commercial l o s s c a s e ?
P l a i n t i f f s a r e Donald Whitaker, Douglas Whitaker and Grace
Whitaker, farm owners i n P h i l l i p s County, Montana. Defendants
a r e Farmhand, I n c . , and Hal. W. E i c k , Farmhand's e x c l u s i v e
dealer i n the area. I n May 1972 p l a i n t i f f s i n s t i g a t e d t h i s s u i t
a g a i n s t d e f e n d a n t s f o r b r e a c h of w a r r a n t i e s , n e g l i g e n c e i n d e s i g n
and i n s t a l l a t i o n , and s t r i c t l i a b i l i t y , a l l having t o do w i t h a
Farmhand i r r i g a t i o n system which p l a i n t i f f s bought through Bick.
Bick counterclaimed f o r an amount a l l e g e d due from p l a i n t i f f s and
crossclaimed f o r indemnity from Farmhand.
P r i o r t o t r i a l Bick and Farmhand s t i p u l a t e d t h a t i f l i a b i l i t y
i s found, t h e y would be l i a b l e i n t h e f o l l o w i n g manner: 25% Bick
and 75% Farmhand, w i t h a t o t a l maximum l i a b i l i t y a g a i n s t Bick of
$20,000. A nonjury t r i a l was h e l d commencing on February 1 7 ,
1975. A t t h e c l o s e of t r i a l t h e p a r t i e s submitted proposed
f i n d i n g s of f a c t and c o n c l u s i o n s of law t o t h e c o u r t . The c o u r t
adopted t h e p l a i n t i f f s ' proposed f i n d i n g s and c o n c l u s i o n s and
e n t e r e d judgment f o r p l a i n t i f f s . A motion f o r a new t r i a l made
by d e f e n d a n t s was denied. Bick and Farmhand s t i p u l a t e d t h a t
armh hand's a t t o r n e y would p e r f e c t t h i s a p p e a l f o r b o t h d e f e n d a n t s .
~ l a i n t i f f s 'ranch c o n s i s t s of 6,280 a c r e s of deeded land
and 2,000 a c r e s of l e a s e d l a n d . P r i o r t o t h e purchase o f t h e
i r r i g a t i o n system, p l a i n t i f f s farmed 1,000 a c r e s and a n o t h e r 1,000
acres was i r r i g a t e d by a f l o o d and d i k e i r r i g a t i o n system. Before
t h e purchase of t h e i r r i g a t i o n system t h e 1,000 a c r e s t h a t was
i r r i g a t e d was roughly divided---200 a c r e s i r r i g a t e d p a s t u r e ,
250 a c r e s a l f a l f a , and 600 a c r e s hay and a l f a l f a . Also p r i o r
t o t h e system p l a i n t i f f s c a r r i e d approximately 400 head of c a t t l e
and 100 head of sheep.
P l a i n t i f f s f i r s t became i n t e r e s t e d i n o b t a i n i n g a s p r i n k l e r
i r r i g a t i o n system i n about 1964. They wrote t o s e v e r a l companies
and o b t a i n e d l i t e r a t u r e about s e v e r a l b r a n d s . I n t h e s p r i n g of
1969 t h e y f i r s t c o n t a c t e d Farmhand r e q u e s t i n g i n f o r m a t i o n about
i t s systems.
Farmhand s e n t p l a i n t i f f s a brochure on i t s i r r i g a t i n g
systems and arranged f o r Bick, i t s a u t h o r i z e d d e a l e r , t o c o n t a c t
them. The brochure r e p r e s e n t e d and d e s c r i b e d t h e system a s :
(1) It h a s p o r t a b l e , ( 2 ) i t would provide f a l l p a s t u r e , ( 3 ) l i t t l e
o r no l a n d p r e p a r a t i o n was n e c e s s a r y , (4) i t was dependable, (5)
i t was s a f e , ( 6 ) i t was t r o u b l e f r e e , and (7) i t had a long l i f e .
On September 1 5 , 1969, Bick came t o p l a i n t i f f s ' ranch t o t a l k
about Farmhand's systems. A t t h i s time Bick made r e p r e s e n t a t i o n s
about t h e system, i . e . , how i t was designed t o be p o r t a b l e , e t c .
P l a i n t i f f s took Bick on a t o u r of t h e i r farm and t o l d Bick of
t h e i r p l a n s f o r two c i r c l e s of s p r i n k l e r i r r i g a t i o n . Plaintiffs
a l s o took Bick t o meet t h e i r banker t o d i s c u s s t h i s p r o j e c t . At
a l a t e r d a t e Eick took p l a i n t i f f s and t h e i r banker on a t r i p t o
s e e some Farmhand systems i n o p e r a t i o n . They saw s e v e r a l Farmhand
sys tems , b u t none had towing wheels.
P l a i n t i f f s t h e n h i r e d Bick t o do survey work n e c e s s a r y
f o r s e t t i n g up t h e two c i r c l e s - f o r i r r i g a t i o n . Bick was t o
b i l l p l a i n t i f f s $500 f o r t h e survey work i n t h e event p l a i n t i f f s
d i d n o t purchase t h e system. I f p l a i n t i f f s decided t o buy t h e
system, t h e work was t o be f r e e .
On October 1 5 , 1969, p l a i n t i f f s c o n t r a c t e d w i t h Bick t o
buy t h e Farmhand 18 tower towable i r r i g a t i o n system. There i s
some c o n f l i c t a s t o whether t h i s was an o r a l o r w r i t t e n c o n t r a c t .
P l a i n t i f f s a t t h a t time made a down payment of $11,715. The t o t a l
amount of t h e c o n t r a c t was $45,800. The Farrrrhand system i t s e l f
was $25,540. The b a l a n c e was f o r pump, e n g i n e , p i p e and i n s t a l l a -
tion. Most of t h e i n s t a l l a t i o n work was t o be done by Bick and
h i s crew b u t p l a i n t i f f s agreed t o do some of t h e work t o keep
t h e c o s t down.
E i c k o r d e r e d t h e system from Farmhand, complete w i t h towing
wheels. The system a r r i v e d a t ~ l a i n t i f f s ' farm i n November 1969,
w i t h o u t t h e towing wheels. B i c k ' s crew, under Farmhand s u p e r -
v i s i o n , f i n i s h e d t h e m a j o r i t y of t h e e r e c t i o n of t h e machine i n
November 1969. Weather prevented f i n i s h i n g . The Farmhand w a r r a n t y
was c o n t a i n e d i n t h e o p e r a t o r ' s manual which a r r i v e d a t t h e time
t h e system a r r i v e d , subsequent t o t h e i n i t i a l c o n t r a c t .
On December 1 5 , 1969, t h e o r i g i n a l c o n t r a c t was r e p l a c e d
by a formal w r i t t e n c o n t r a c t . P l a i n t i f f s p a i d $43,272.52 on
these contracts. P r i o r t o e i t h e r c o n t r a c t w i t h Farmhand,
p l a i n t i f f s c o n t r a c t e d t o s e l l t h e a l f a l f a o f f o f t h e proposed
south c i r c l e , beginning i n 1971 f o r $12 p e r ton i n 1971 and
1972, and $25 p e r ton i n 1973 and 1974.
Bick' s crew and p l a i n t i f f s completed e r e c t i o n o f t h e machine
i n t h e s p r i n g of 1970. The system, w i t h o u t t h e towing mechanism,
was f i r s t s t a r t e d i n May 1970 on t h e n o r t h c i r c l e . Immediately
i t was discovered t h e Cummin's pump engine and i m p e l l e r were too
s m a l l , a s was t h e p r o p e l l i n g engine. Bick replaced t h e p r o p e l l i n g
engine a t no c o s t t o p l a i n t i f f s and ordered a l a r g e r Cummin's
pump engine and i m p e l l e r . The i m p e l l e r was t o be f r e e t o
p l a i n t i f f s and t h e pump engine was t o be r e p l a c e d f o r $880.
A t t h i s time a d i s p u t e a r o s e between p l a i n t i f f s and Bick.
The d i s p u t e concerned t h e amount of work i n e r e c t i n g t h e system
c o n t r i b u t e d by p l a i n t i f f s and t h e amount done by Bick; it a l s o
concerned $3,267 withheld by p l a i n t i f f s from t h e c o n t r a c t p r i c e .
This was never res6lved and p l a i n t i f f s r e f u s e d t o pay t h e a d d i t i o n a l
$880 f o r t h e l a r g e r pump engine. Bick t h e n s e n t t h e new pump engine
and i m p e l l e r back and r e f u s e d any f u r t h e r s e r v i c e t o p l a i n t i f f s .
P l a i n t i f f s t h e r e a f t e r d i d b u s i n e s s d i r e c t l y w i t h Farmhand.
Throughout t h e summer of 1970, t h e system only made 5
rotations. During each of t h e s e r o t a t i o n s t h e system s t u c k i n
t h e d i t c h which Bick designed. Farmhand personnel came t o
a s s i s t p l a i n t i f f s on two occasions during t h a t summer.
The towing system a r r i v e d i n t h e s p r i n g of 1971. The
system was n o t complete and p l a i n t i f f s had t o manufacture some
p a r t s on t h e i r own. A Farmhand crew came t o p l a i n t i f f s ' farm i n
t h e s p r i n g of 1971 t o do some r e p a i r work on t h e system.
P l a i n t i f f s planted t h e south c i r c l e i n a l f a l f a t h a t spring, a
y e a r l a t e r t h a n o r i g i n a l l y planned. On t h e f i r s t a t t e m p t t o
move t h e system from t h e n o r t h c i r c l e , where i t had been, t o t h e
s o u t h c i r c l e , p l a i n t i f f s n o t i c e d s u b s t a n t i a l damage caused by
t h e move. The machine was moved twice more d u r i n g 1971, back
t o t h e n o r t h c i r c l e and back a g a i n t o t h e s o u t h c i r c l e . The
l a s t move was some time i n J u l y . During each of t h e s e moves,
t h e machine was damaged and needed s u b s t a n t i a l r e p a i r b e f o r e
it could be used.
I n l a t e J u l y 1971, p l a i n t i f f s a t t e n d e d a meeting i n B i l l i n g s
w i t h Farmhand r e p r e s e n t a t i v e s and Bick. The meeting was t o
work o u t problems w i t h t h e system and a l s o t h e problems between
Bick and p l a i n t i f f s . A t t h i s meeting Farmhand r e p r e s e n t a t i v e s
t o l d p l a i n t i f f s t h e towing mechanism was n o t working p r o p e r l y
and t h e machine should n o t be towed. To p r o v i d e f o r p l a i n t i f f s '
need f o r i r r i g a t i o n on t h e second c i r c l e Farmhand a t t h i s meeting
o f f e r e d t o s e l l p l a i n t i f f s a new Farmhand system f o r t h e reduced
c o s t o f $26,500 complete. T h i s o f f e r was r e j e c t e d by p l a i n t i f f s
a n d / o r t h e i r banker. The system was used i n t h e s o u t h c i r c l e
d u r i n g t h e y e a r s 1972 and 1973, when i t was towed o u t t o make
room f o r a new Valley system.
I n e a r l y 1972, Farmhand o f f e r e d t o s e l l p l a i n t i f f s a used
Farmhand system f o r t h e i r second c i r c l e f o r $10,000 on a 50%
recourse basis. T h i s o f f e r , t o o , was r e j e c t e d by p l a i n t i f f s
and/or t h e i r banker. From t h i s p o i n t on p l a i n t i f f s ' r e l a t i o n -
s h i p w i t h Farmhand d i s i n t e g r a t e d . They never c o n t a c t e d Farmhand
f o r a d d i t i o n a l s e r v i c e , n o r d i d Farmhand t e n d e r any s e r v i c e o r
f u r t h e r proposals.
- 6 -
l i a b i l i t y , n e g l i g e n c e i n d e s i g n , a a n u f a c t u r e and i n s t a l l a t i o l ~ ,
breach of e x p r e s s w a r r a n t i e s , and t h e implied warranty of f i t n e s s .
dc w i l l d i s c u s s t h e s e i n o r d e r .
Z. Strict liability.
T h i s t h e o r y f i r s t came i n t o being because of t h e problem
sf i:he l a c k of p r i v i t y i n warranty c a s e s . 2 Restatement of T o r t s
%d accepted t h i s t h e o r y i n $ 402A which r e a d s :
" ( 1 ) One who s e l l s any product i n a d e f e c t i v e
c o n d i t i o n unreasonably dangerous t o t h e u s e r o r
consumer o r t o h i s p r o p e r t y I s s u b j e c t t o l i a b i l i t y
f o r p h y s i c a l harm t h e r e b y caused t o t h e u l t i m a t e
~ i s e ro r consumer o r t o h i s p r o p e r t y , i f
" a ) t h e s e l l e r i s engaged i n t h e b u s i n e s s of
.jeLLi~lgsuch a p r o d u c t , and
"b) i t i s expected t o and does r e a c h t h e u s e r
. ~ zoilsumer w i t h o u t s u b s t a n t i a l change i n t h e c o n d i t i o n
r
In which i t i s s o l d .
(2) The r u l e s t a t e d i n Subsection (1) a p p l i e s
d Lthough
" a ) t h e s e l l e r has e x e r c i s e d a l l p o s s i b l e
L d i e i-n t h e p r e p a r a t i o n and s a l e of h i s p r o d u c t , and
b The u s e r o r consumer h a s n o t bought t h e
p i o d u c t from o r e n t e r e d i n t o any c o n t r a c t u a l r e l a t i o n
d t h the s e l l e r . "
vlo~ltana
adopted t h e Restatement i n Brandenburger v. Toyota
3ocor S a l e s , 162 Mont. 506, 513 P.2d 268. T h i s d e c i s i o n provided
qzh*t a l t h o u g h t h e burden t o prove t h e d e f e c t i s on t h e p l a i n t i f f ,
i h i s burden can be met by c i r c u m s t a n t i a l evidence and i n f e r e n c e s
c h e r e f rom.
W e have b r i e f l y d i s c u s s e d t h e d o c t r i n e of s t r i c t l i a b i l i t y
brcdase it was plead and c o n s i d e r e d by t h e t r i a l c o u r t . On
dppeal i t s a p p l i c a t i o n i s claimed a s e r r o r by d e f e n d a n t s .
t~ i s n o t r e v e r s i b l e e r r o r when c o n s i d e r e d i n l i g h t of t h e
!:acts of t h i s c a s e . A more p r e c i s e l e g a l a n a l y s i s of t h e
c a s e ac t h e i n c e p t i o n would more c o r r e c t l y have confined t h e
c o u r s e of t h e l i t i g a t i o n w i t h i n t h e bounds d i s c u s s e d h e r e a f t e r ,
where i t p r o p e r l y belongs and upon which t h i s Court w i l l r e s t i t s
determination.
11. Negligence i n d e s i g n , manufacture and i n s t a l l a t i o n .
The d i s t r i c t c o u r t i n i t s f i n d i n g of f a c t No. 35(1) found
t h a t t h e system "was so n e g l i g e n t l y , c a r e l e s s l y and r e c k l e s s l y
manufactured, designed and i n s t a l l e d by t h e d e f e n d a n t s t h a t i t
never o p e r a t e d f o r t h e purpose f o r which i t was sold.''
The t h e o r y of n e g l i g e n c e has been a p p l i e d a g a i n s t t h e
rernote manufacturer i n s e v e r a l c a s e s , t h e l e a d i n g one MacPherson
v . Buick Motor Co.,
87A-2-314.
SUiil dS
s
( 2
217 N.Y.
".+
382, 1 1 N . E .
1
has been accepted i n 2 Restatement of T o r t s 2d, $395.
1050.
hds followed t h i s r u l e i n Knudson v. Edgewater Automotive D i v i -
j i o n , 157 Mont. 400, 486 P.2d 596 and Duchesneau v. S i l v e r Bow
County, 158 Mont. 369, 492 P.2d 926.
The f a c t s h e r e c l e a r l y show such n e g l i g e n c e .
This doctrine
Montana
!~1. Implied w a r r a n t i e s o f m e r c h a n t a b i l i t y and f i t n e s s f o r
s u d r ~ i c u l a rpurpose.
The Uniform Commercial Code p r o v i s i o n s f o r t h e s e w a r r a n t i e s
a r e 5 e c t i o n 87A-2-314, R.C.M.
3 1 ~ - 2 - 3 1 5 , R.C.M.
1947, f o r m e r c h a n t a b i l i t y and s e c t i o n
1947, f o r f i t n e s s f o r a p a r t i c u l a r purpose.
"Unless excluded o r modified fc 9;
t h a t t h e goods s h a l l be merchantable i s implied i n a
k
Goods t o be merchantable must be a t l e a s t
*
a warranty
~ o n t r a c tf o r t h e i r s a l e i f t h e s e l l e r i s a merchant w i t h
r e s p e c t t o goods of t h a t kind. ' fc fc
" ( c ) a r e f i t f o r t h e o r d i n a r y purposes f o r which
~ 300ds a r e used +c
h *
hey
87A-2-315. "Where t h e s e l l e r a t t h e time of con-
t r a c t i n g has reason t o know any p a r t i c u l a r purpose
f o r which t h e goods a r e r e q u i r e d and t h a t t h e buyer
i s r e l y i n g on t h e s e l l e r ' s s k i l l o r judgment t o s e l e c t
o r f u r n i s h s u i t a b l e goods, t h e r e i s u n l e s s excluded
o r modified under t h e n e x t s e c t i o n an implied warranty
t h a t t h e goods s h a l l be f i t f o r such purpose."
Most c o u r t s now follow t h e r u l e s e t f o r t h i n Henningsen v.
Bloomfield Motors, I n c . , 32 N . J . 358, l G l A . 2 d 69, which h o l d s
t h e remote manufacturer l i a b l e f o r implied w a r r a n t i e s .
The evidence s u p p o r t s t h e d i s t r i c t c o u r t ' s f i n d i n g s t h a t
such implied w a r r a n t i e s d i d e x i s t and they were breached.
IV. Express Warranties.
The Uniform Commercial Code, s e c t i o n 87A-2-313, R.C.M.
1947, provides i n p e r t i n e n t p a r t :
" ( 1 ) Express w a r r a n t i e s by t h e s e l l e r a r e c r e a t e d a s
follows :
" ( a ) Any a f f i r m a t i o n of f a c t o r p r ~ m i s emade
by t h e s e l l e r t o t h e buyer which r e l a t e s t o t h e goods
and becomes p a r t of t h e b a s i s f o r t h e b a r g a i n c r e a t e s
a n e x p r e s s warranty t h a t t h e goods s h a l l conform t o
t h e a f f i r m a t i o n o r promise.
" ( b ) Any d e s c r i p t i o n of t h e goods which i s made
a p a r t of t h e b a s i s of t h e b a r g a i n c r e a t e s an e x p r e s s
warranty t h a t t h e goods s h a l l conform t o t h e d e s c r i p t i o n .
" ( c ) Any sample o r model which i s made p a r t of
t h e b a s i s of t h e b a r g a i n c r e a t e s a n e x p r e s s warranty
t h a t t h e whole of t h e goods s h a l l conform t o t h e sample
o r model.
" ( 2 ) I t i s n o t necessary t o t h e c r e a t i o n of an e x p r e s s
warranty t h a t t h e s e l l e r use formal words such a s
t warrant' o r ' g u a r a n t e e ' o r t h a t he have a s p e c i f i c
i n t e n t i o n t o make a warranty * * ;k Jc."
Such a f f i r m a t i o n s , promises o r d e s c r i p t i o n s were made by
Bick t o p l a i n t i f f s . Such a f f i r m a t i o n s , promises o r d e s c r i p -
t i o n s were a l s o s e t f o r t h i n t h e Farmhand brochure. The law
appears t o be w e l l s e t t l e d t h a t a remote manufacturer without
p r i v i t y w i t h t h e purchaser i s l i a b l e f o r breach of warranty by
a d v e r t i s i n g on r a d i o and t e l e v i s i o n , i n newspapers and magazines,
and i n brochures made a v a i l a b l e t o p r o s p e c t i v e p u r c h a s e r s ,
i f t h e purchaser r e l i e s on them t o h i s d e t r i m e n t . Rogers v.
Toni Home Permanent Co., 167 Ohio S t . 244, 147 N.E.2d 612;
Baxter v . Ford Motor Co., 168 Wash. 456, 12 P.2d 409, 88 A.L.R.
521; Randy Knitwear, I n c . , v. American Cyanamid Co., 1 N.Y.2d
1 5,
181 N.E.2d 399. The Montana c a s e c i t e d by d e f e n d a n t s , Jangula
v. United S t a t e s Rubber Co., 147 Mont. 98, 410 P.2d 462, d i d
n o t speak t o t h e p o i n t . I n a n o t h e r c a s e c i t e d by d e f e n d a n t s ,
Jacobson v . Colorado Fuel and I r o n Corp., 409 F.2d 1263, t h e
c o u r t h e l d t h a t a statement i n a brochure d i d n o t g i v e r i s e t o
an e x p r e s s warranty under every c o n d i t i o n . The c o u r t , however,
implied t h a t i t might very w e l l g i v e r i s e t o such a warranty
i n some c a s e s .
Lander v. Sheehan, 32 Mont. 25, 79 P. 406, h e l d t h a t
whether a statement i s t o be t r e a t e d a s a n e x p r e s s warranty
i s a f a c t t o be determined by t h e t r i e r of f a c t . The evidence
h e r e s u p p o r t s t h e d i s t r i c t c o u r t ' s f i n d i n g t h a t Bick and Farm-
hand made express w a r r a n t i e s t o p l a i n t i f f s , and t h a t they were
breached.
Defendants contend t h e c o u r t e r r e d i n r e j e c t i n g t h e
d i s c l a i m e r of warranty and damage p r o v i s i o n of t h e warranty
and t h e c o n t r a c t .
Defendants c l a i m t h a t even i f t h e c o u r t d i d f i n d such
implied and e x p r e s s w a r r a n t i e s , they were e f f e c t i v e l y disclaimed
by t h e Farmhand warranty contained i n t h e e r e c t i o n manual. They
r e l y on s e v e r a l Montana c a s e s which upheld such d i s c l a i m e r s .
S t a t e ex r e l . Mountain S t a t e s T e l . & T e l , Co. v. D i s t r i c t Court,
160 Mont. 443, 503 P.2d 526; Ryan v. Ald, I n c . , 146 Mont. 299,
406 P.2d 373; Spurgeon v. Jamieson Motors, 164 Mont. 296, 521
P.2d 924; R i e f f l i n v. H a r t f o r d I n s . Co., 164 Mont. 287, 521 675.
See a l s o : S e c t i o n 87A-2-719, R.C. M. 1947.
- 10 -
The q u e s t i o n b e f o r e t h i s Court i s n o t t h e v a l i d i t y and
e n f o r c e a b i l i t y of such d i s c l a i m e r s , r a t h e r i t i s t h e t i m e l i n e s s
of t h e d i s c l a i m e r . The express and implied w a r r a n t i e s were
made t o p l a i n t i f f % p r i o r t o t h e e n t e r i n g i n t o of t h e c o n t r a c t on
October 1 5 , 1969. P l a i n t i f f d i d n o t and could n o t know of t h e
d i s c l a i m e r u n t i l November 1969, v~hent h e e r e c t i o n manual came with
t h e machine. A d i s c l a i m e r o r l i m i t a t i o n of warranty contained
i n a manufacturer's manual received by t h e purchasers subsequent
t o t h e s a l e does n o t l i m i t recovery f o r implied o r e x p r e s s
w a r r a n t i e s made p r i o r t o o r a t t h e time of t h e s a l e . Marion
Power Shovel Co. v. Huntsman, 246 Ark. 152, 437 S.W.2d 784;
Cooper P a i n t i n g s & Coatings, I n c . , v . S M Corp., 62 Tenn.App.
C
1 3 , 457 S.W.2d 864; Rehurek v. Chrysler C r e d i t Corp., F l a J@G
. 2
262 So.2d 452; Dougall v. Brown Bay Boat Works and S a l e s , I n c . ,
287 Minn. 290, I78 N.W.2d 217.
Even i f t h e Farmhand d i s c l a i m e r had been made p r i o r t o t h e
s a l e , such d i s c l a i m e r would n o t have been e f f e c t i v e t o d e s t r o y
t h e e x p r e s s w a r r a n t i e s made i n t h e brochure and by Bick. In 1
Anderson Uniform Commercial Code, $ 2-316:28, p. 698, it i s
stated:
"When t h e r e i s a c o n f l i c t between a s p e c i f i c e x p r e s s
warranty and a c l a u s e which i n g e n e r a l language ex-
c l u d e s a l l w a r r a n t i e s , t h e s p e c i f i c warranty p r o v i s i o n
prevails ."
Nor w i l l a d i s c l a i m e r of warranty s t o p a purchaser from
recovering on s t r i c t l i a b i l i t y . 2 Restatement of T o r t s 2d, 5
402A, Comment m; Arrow T r a n s p o r t a t i o n Co. v. Fruehauf Corp.,
The d i s t r i c t c o u r t found t h e implied and express w a r r a n t i e s
made by Bick and Farmhand remained v a l i d and e n f o r c e a b l e . We
agree.
- I1 -
Defendants contenj. i f t h e r e i s l i a b i l i t y and daniages
a l l o s ~ e df o r l o s s of p r o d u c t i o n such a r e not proper a f t e r t h e
y e a r 1971, t h e time t h e defendants c l a i m t h e system would n o t
s e r v e t h e purpose f o r which i t was purchased.
I t i s t h e law of Montana t h a t c o n s e q u e n t i a l damages cannot
a c c r u e p a s t t h e time t h e i n j u r e d p a r t y h a s knowledge of t h e
f a i l u r e of t h e equipment and a r e a s o n a b l e time t h e r e a f t e r w i t h i n
which t o make o t h e r arrangements. Such i s t h e e f f e c t of t h e
d e c i s i o n of Bos v. Dolajak, 167 Mont. 1, 7 , 534 P.2d 1258. The
r e a s o n a b l e man r u l e of damages i s a p p l i e d i n Baden v . C u r t i s s
Breeding S e r v i c e , 380 F.Supp. 243. Spackman v. Ralph M. Parsons
Co., 147 Mont. 500, 414 P. 2d 918, p o i n t s o u t t h a t i n awarding
compensatory damages ingenious methods have been propounded and:
"a +f * while such methods s e r v e a s u s e f u l g u i d e s ,
t h e f i n a l answer r e s t s i n good s e n s e r a t h e r t h a n
mechanical a p p l i c a t i o n of formulas." 147 Mont 506. .
I n t h i s r e s p e c t t h e d i s t r i c t c o u r t made i t s f i n d i n g of
f a c t , No. 46:
"That P l a i n t i f f s made r e a s o n a b l e e f f o r t t o g e t
said Farmhand system t o i r r i g a t e b o t h t h e i r f i e l d s
and t o g e t t h e Defendants t o f i x s a i d system S O i t
would i r r i g a t e b o t h f i e l d s ; t h a t when t h e y once d e t e r -
mined t h a t t h e Defendants would n o t f i x s a i d machine
L O i r r i g a t e b o t h f i e l d s , they made r e a s o n a b l e e f f o r t s
t o a c q u i r e o t h e r means of i r r i g a t i o n ; and they d i d
a c q u i r e one o t h e r p i v o t i r r i g a t i o n system; t h a t t h e i r
f i n a n c i a l c o n d i t i o n prevented them from a c q u i r i n g
t h a t i r r i g a t i o n system any sooner; and t h e i r f i n a n -
c i a l c o n d i t i o n p r e v e n t s them from a c q u i r i n g a second
i r r i g a t i o n system up t o and i n c l u d i n g t h e d a t e of
t r i a l ; t h a t P l a i n t i f f s have done e v e r y t h i n g reasonably
r e q u i r e d of them t o cover and t o m i t i g a t e t h e i r
damages ' I .
The i n s t a n t c a s e i s n o t u n l i k e t h e f a c t u a l s i t u a t i o n of
Bos v . Doiajalc, s u p r a , where t h e Court found t h a t t h e s i l o
'was a 1 i . t e r n of p r o p e r t y w i t h s p e c i a l c h a r a c t e r i s t i c s .
1 It
c o u l d n o t b e r e p l a c e d t h e n e x t day a t t h e l o c a l hardware s t o r e
o r automobile d e a l e r s h i p .!' Here, t h e p l a i n t i f f s were engaged i n
a l a r g e a g r i c u l t u r a l b u s i n e s s and wanting t o improve produc-
t i o n c o n t r a c t e d f o r a complete new method of p r o d u c t i o n of hay.
To accomodate t h e new method defendant Bick surveyed t h e premises
and made t h e n e c e s s a r y recommendations which r e q u i r e d t h e removal
of t h e o l d d i k e and f l o o d system and d i t c h e s . I n r e l i a n c e on
t h e contemplated i n c r e a s e i n hay p r o d u c t i o n p l a i n t i f f s c o n t r a c t e d
t o s e l l t h e hay t o be produced. Concerning t h e d a t e p l a i n t i f f s
became aware t h e machine would n o t work, i t a p p e a r s t h a t u n t i l
t h e f a l l of 1973 p l a i n t i f f s w i t h t h e urging of d e f e n d a n t s attempted
t o make t h e machine s e r v e t h e purpose f o r which i t was designed
and s o l d . There was no evidence produced by d e f e n d a n t s a s
t o t h e e f f o r t s upon t h e p a r t of p l a i n t i f f s t o m i t i g a t e . The
burden of proof a s t o m i t i g a t i o n i s upon t h e d e f e n d a n t s . Klemens
& Son v . Reber Plumbing & h e a t i n g Co., 139 Mont. 115, 360 P.2d 1005.
T h i s burden i n c l u d e s e s t a b l i s h i n g t h a t p l a i n t i f f s could have
m i t i g a t e d t h e damages b u t f a i l e d t o do s o . See: LTV Aerospace
Corp. v . Bateman, Tex.Am1973, 492 S.W.2d 703.
There i s s u b s t a n t i a l evidence t h e p l a i n t i f f s d i d n o t have
the f i n a n c i a l c a p a b i l i t y t o acquire other s a t i s f a c t o r y devices
t o accomplish t h e purpose f o r which t h e y a r r a n g e d t h e i r o p e r a t i o n
a s designed by t h e d e f e n d a n t s u n t i l a f t e r t h e 1974 season. The
d i s t r i c t c o u r t so found.
T h i s Court i s a n a p p e l l a t e c o u r t and i s c o n f i n e d t o t h e
r e c o r d made b e f o r e t h e d i s t r i c t c o u r t . The f i n d i n g s of f a c t and
c o n c l u s i o n s of law of t h e d i s t r i c t judge who heard t h e w i t n e s s e s
t e s t i f y , a r e t o be s u s t a i n e d i f 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 -
dence t o s u p p o r t them. Bender v. Bender, 144 Mont. 470, 397 P.2d
957; Spencer v. Robertson, 151 Mont. 507, 445 P.2d 48; Cope
v. Cope, 158 Mont. 388, 493 P.2d 336..
The r e c o r d h e r e d i s c l o s e s s u b s t a n t i a l evidence 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 s , c o n c l u s i o n s and judgment.
The judgment i s a f f i r m e d
I . Haswell.
W Concur:
e
.
Chief J u s t i c e I \