No. 84-440
I N THE SUPREME COURT OF THE STATE OF MONTANA
1985
POWERS MANUFACTURING COMPANY,
an I o w a corp. ,
P l a i n t i f f and R e s p o n d e n t ,
LEON JACOBS E N T E R P R I S E S ,
a M o n t a n a corp.,
D e f e n d a n t and A p p e l l a n t .
APPEAL FROM: D i s t r i c t C o u r t of t h e T e n 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 F e r g u s ,
T h e H o n o r a b l e R. D. M c P h i l l i p s , Judge p r e s i d i n g .
COUNSEL OF RECORD:
For Appellant:
T i m o t h y J. O ' H a r e , Lewistown, Montana
For Respondent:
L a w O f f i c e of John R. Christensen; Ma.rk S t e r m i t z ,
Stanford, M o n t a n a
S u b m i t t e d on B r i e f s : A p r i l 4, 1985
Decided: June 2 5 , 1 9 8 5
Filed:
Clerk
Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.
A jury returned a verdict holding the appellant, Leon
Jacobs Enterprises, liable for a debt owed by Snick Sports to
the respondent, Powers Manufacturing Company. The appellant
appeals from that verdict. The respondent appeals from the
District Court's denial of certain expenditures as costs.
We affirm.
The appellant operates a trophy sales business in
Lewistown, Montana. Its principal shareholder is Leon
Jacobs, who has been in the sporting goods business since
1947. The respondent is an Iowa business engaged in manufac-
turing custom athletic uniforms. It began doing business
with Leon Jacobs in 1 9 6 6 .
Prior to 1 9 7 3 Leon Jacobs operated with several others
as E-Jay-S. In 1 9 7 3 Leon Jacobs began operating as Leon
Jacobs Enterprises and the uniform sales portion of the prior
business was sold. The buyers operated as K & M Sports.
They sold to another who defaulted in late 1 9 7 7 . Leon Jacobs
Enterprises as secured party repossessed the inventory and
sold it for cash in late 1 9 7 8 to buyers who began to operate
as Snick Sports.
Harriet Dirkson began working for K & M Sports in 1 9 7 4
as a bookkeeper. She also did some purchasing. There is
disagreement as to whether she worked for Leon Jacobs Enter-
prises during the time it was liquidating the repossessed
inventory. However, she worked for Snick Sports after it
purchased the inventory.
The respondent, Powers Manufacturing, would not sell to
Snick Sports on credit. The record shows that Harriet
Dirkson notified. the respondent that the appellant, Leon
Jacobs Enterprises, would guarantee payment. There is dis-
agreement as t.o whether the appellant and respondent ever
discussed this arrangement directly. The first written
evidence of any such communication is early in 1981 when Leon
Jacobs denied any "guaranty."
For several years after Harriet Dirkson notified Powers
Manufacturing Company of the "guaranty," the respondent
billed to the appellant's name, and Snick Sports paid the
bills. Leon Jacobs Enterprises received the statements,
invoices and shipments and forwarded them to Snick Sports.
Eventually, in 1981, several bills had not been paid and the
respondent sought payment from the appellant. The appellant
refused to pay. This trial resulted.
A jury returned a general verdict favorable to Powers
Manufacturing Company and awarded $6,590.49 plus interest as
damages. This was the exact amount prayed for in the com-
plaint. The respondent submitted a memorandum of costs that
included witness air fares. The District Court disallowed
these air fares as costs. Both parties appeal.
The issues on appeal are:
1. Whether the evidence supports the existence of an
agency relationship between Leon Jacobs Enterprises and
Harriet Dirkson and, if so, whether she exceeded her authori-
ty so as to relieve it from liability.
2. Whether the evidence supports the existence of a
valid guaranty between Leon Jacobs Enterprises and Powers
Manufacturing Company.
3. Whether the District Court's order denying air
fares for witnesses is a nullity, or, in the alternative,
whether air fares for witnesses should have been allowed as
costs.
As to the issues relative to the jury verdict, this
Court is governed by the substantial evidence standard of
review. If substantia.1 evidence supports the case of the
prevailing party, the verdict will stand. The evidence will
be viewed in a light most favorable to the prevailing party
and, if the evidence conflicts, the credibility and weight
given to the evidence is the province of the jury and not
this Court. Mountain West Farm Bureau Mutual Insurance
Company v. Girton (Mont. 1985), 697 P.2d 1352, 3.363, 42
St.Rep. 500, 501.
The first issue is whether there was an agency rela-
tionship and whether the purported agent acted within her
authority. Substantial evidence supports the jury verdict.
Both the agency and the agent's authority may be osten-
sible. Sections 28-10-103 and 28-10-401, MCA. An ostensible
agency exists when the principal intentionally or by want of
ordinary care causes a third person to believe another to be
his a-gent who is not really employed by him. Section
28-10-103, MCA. Ostensible authority is such as a principal,
intentionally or by want of ordinary care, causes or allows a
third person to believe the agent to possess. Section
28-10-403, MCA.
Here, the respondent, for a period of two years, mailed
statements, invoices, and merchandise to the appellant's name
and address. The appellant transferred or forwarded these to
Snick Sports. This activity in and of itself is sufficient
to put a reasonable person on notice that something was
amiss. Leon Jacobs should have investigated the matter and
taken appropriate action to inform the respondent to correct
the billing arrangement. This activity demonstrates a want
of ordinary care that caused or allowed a third person to
believe that an agency and authority existed. We hold that
substantial evidence supports an ostensible agency and osten-
sible authority in this case.
The second issue is whether the evidence supports the
existence of a guaranty between the appellant and respondent.
Substantial evidence supports the jury verdict.
A guaranty is a promise to answer for the debt of
another. Section 28-11-101, MCA. With a few statutory
exceptions, none applicable here, a guaranty must be in
writing. Section 28-11-104, MCA. Here, the record contains
several writings that satisfy this requirement. However,
these writings are signed by Harriet Dirkson as an agent. An
authority to enter into a contract required by law to be in
writing can only be given by an instrument in writing.
Section 28-10-203, MCA.
However, the appellant, for the same reasons supporting
our determination that an ostensible authorized agent exist-
ed, is estopped from denying valid. authority on statute of
frauds grounds. An estoppel arises when one, by acts or
acquiescence, causes another in good faith to change his
position for the worse. Bagnell v. Lemery (Mont. 1983) , 657
P.2d 608, 611, 40 St.Rep. 58, 61-62. We hold that the appel-
lant is estopped from defending on statute of frauds grounds
and a valid guaranty exists in this case because, for several
years, it allowed or caused the respondent to believe the
authority existed.
The final issue, the sole issue on cross-appeal, is
whether the District Court's order denying air fares for
witnesses is a nullity, or, in the alternative, whether air
fares for witnesses should have been allowed as costs. The
order is not a nullity, and the District Court did not err in
disallowing air fares as costs.
Powers Manufacturing sent three persons from Iowa to
the trial in Montana. All testified. Powers Ma-nu£
acturing
claimed air fares for these witnesses in its bill of costs.
T4eon Jacobs Enterprises objected, a hearing was held, but no
ruling was immediately issued. About one month later the
appellant filed a notice of appeal. Then, about one month
after the notice of appeal was filed, the District Court
ruled on the bill of costs and denied the air fares. The
respondent then also filed a notice of appeal.
The respondent first argues that the District Court
lost jurisdiction when the notice of appeal was filed and,
therefore, the order denying air fares was a nullity. We
disagree. When a notice of appeal has been filed, jurisdic-
tion passes from the District Court and vests in the Supreme
Court. Julian v. Buckley (Mont. 1981), 625 P.2d 526, 528, 38
St.Rep. 128, 131. However, the District Court retains juris-
diction to correct clerical errors, Northern Plains Resource
Council v. Board of Health and Environmental Sciences (19791,
184 Mont. 466, 472, 603 P.2d 684, 688; the District Court
retains jurisdiction over ancillary matters, Churchhill v.
Holly Sugar Corp. (Mont. 1981), 629 P.2d 758, 760, 38 St-Rep.
860, 862; and the District Court retains some jurisdiction
over some matters involving appeal such as undertaking of
costs, Rule 6, M.R.App.Civ.P.; stay of judgment and order
Rule 7, M.R.App.Civ.P.; and matters involving the transcript
on appeal, Rule 9, M.R.App.Cil7.P.
Costs may be taxed after the entry of judgment. Rule
58, M.R.Civ.P. Entry of judgment begins the time period in
which appeal may be made. No provision in law mandates that
costs must he finally taxed before appeal may be had. Be-
cause of this and because costs are not substantially linked
to the merits of and procedure leading to judgment, there is
no meaningful reason why the filing of notice of appeal
should strip the jurisdiction of the District Court to issue
an order on a pending bill of costs. We hold that the order
denying air fares was not a nullity.
The respondent next argues that air fares for witnesses
should have been allowed as costs. We disagree. Air fares
are not contained in S 25-10-201, MCA, the allowable costs
provisions. We hold that air fares are not properly allow-
able as costs.
The jury verdict shall stand. The District Court's
order on the bill of costs shall stand.
Affirmed .
We concur: