NO. 85-225
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985
DONALD MacDONALD LV, TRUSTEE IN
BANKRIJPTCY,
Petitioner,
MARK J. MERCILL and SUE A. MERCILL,
ORIGINAL PROCEEDING:
COUNSEL OF RECORD:
For Appellant:
Joan B. Newman, Missoula, Montana
For Respondent:
William R. Baldassin, Missoula, Montana
Submitted on briefs: Aug. 29, 1985
Decided-: February 1 0 , 1986
Filed:
z- s p 4 L e 8 a
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Clerk
Mr. Justice Wil-liam E. Hunt, Sr., delivered the Opinion of
the Court.
This matter is before this Court upon certification by
the United States District Court, District of Montana, Butte
Division, the Honorable W. D. Murray, that the question upon
which adjudication is sought is controlling in federal
litigation. This case originated in United States Bankruptcy
Court and was appealed to the United States District Court.
The certified question is as follows:
Is a backhoe and/or a flatbed trailer exempt from
the bankruptcy estate of a debtor under section
25-13-612(1)(b), MCA, where the debtor is a
self-employed excavation contractor and where the
debtor could not remain an excavation contractor
without the backhoe and. trailer but could seek
employment from others as a backhoe operator
without such items?
We answer in the affirmative.
The facts are not in dispute. The parties have
stipulated that the respondent, Mark Mercill, is a
self-employed excavation contractor. He would not be able to
continue his business as an excavation contractor without his
backhoe and trailer. He does have skill in the operation of
a backhoe that would permit his employment by others as an
operator.
Montana has "opted out" of the federal list of
exemptions contained in 11 U.S.C. 522(d) by enacting
section 31-2-106, MCA, which provides:
31-2-106. Exempt property--bankruptcy proceeding.
No individua.1 may exempt from the property of the
estate in any bankruptcy proceeding the property
specified in 11 U.S.C. 522(d) except property
exempt from execution from judgment as provided in
Title 25, chapter 13, part 6.
The relevant portion of Title 25, chapter 13, part 6
applying in this case is section 25-13-612(1) (b), MCA, which
provides :
25-13-61.2. Property necessary to carry on trade or
profession.
(1) In addition ...
there shall be exempt to all
iudgment debtors the following property:
fb) to a mechanic or artisan: tools or implements
necessary to carry on his trade;
The parties agree that the respondent, debtor, is a mechanic
within the meaning of this statute.
The question presented can be divided into two issues:
1) Whether a backhoe and trailer are tools or
implements within section 25-13-612 (1)(b), MCA.
2) Whether such tools or implements are necessary for
the debtor to carry on his trade within section
25-13-612 (1)(b), MCA.
Before reaching the issues we note two things. First,
the exemption statutes in Montana were originally enacted in
1895. There have been few amendments since that time. The
language contained therein is of "horse and buggy" vintage.
The intent of the statutes is the same today as it was when
they were enacted but it may be time for the legislature to
consider bringing the statute up to date. Second, the
statute applies to judgment debtors as well as bankruptcy
debtors. We believe that the policies underlying exemptions
from judgment debtors and bankruptcy debtors may differ, yet,
because the same exemptions apply to both, our construction
must be done with both in mind.
The first issue is whether a backhoe and trailer are
tools or implements within the meaning of those terms as used
in section 25-13-612 (1)(b), MCA. The Bankruptcy Court held
that a backhoe and trailer are implements. It reasoned that
"tools" and "implements" have a recognized distinction--a
"tool" is more commonly defined as an instrument of manual
operation as compared to an appliance moved by machinery,
while an "implement" is more inclusive, being an item
reasonably fitted or employed as a means of making labor more
effective.
We have reviewed the law of other jurisdictions and we
agree with the statement at 31 Am.Jur.2d Exemptions S 58:
It would serve no useful purpose to attempt an
exhaustive enumeration of the many articles of
property which the various courts have declared
exempt, or otherwise, as tools or implements . . ..
The number of such articles is very great and the
range quite wide, extending from small and simple
handtools to large, expensive, and more or Less
complicated machines.
The particular code section in issue here does not
define tool or impl-ement.. A dictionary defines tool as any
implement used by a craftsman or laborer at his work, an
instrument employed in manual labor for facilitating
mechanical operations, the cutting part on various machines
driven by power such as a drill or lathe, or the entire
machine. New Webster's Dictionary 1621 (College ed. 1975).
A tool i.s an instrument of manual operation, that is, an
instrument to be used and managed by the hand instead of
being moved or controlled by machinery. Black's Law
Dictionary 1660 (rev. 4th ed. 1968) .
A dictionary defines implement as an instrument, tool,
or utensil, or an article assisting in carrying on manua.1
labors. New Wehsterls Dictionary 755 (College ed. 1975).
Implements are such things as are used or employed for a
trade, particularly applied to tools, utensils, instruments
of labor, as the implements of trade or of farming. Black's
Law Dictionary 679 (rev. 5th ed. 1979). Section 61-1-1-21,
MCA, on definitions of motor vehicles, defines an "implement
of husband.ryl'as including every vehicle which is designed
for agricultural purposes. Therefore, in the field of
agriculture, the legislature has determined tha-tan implement
includes a vehicle. Tractors and trailers are vehicles. See
sections 61-1-109 a.nd 61-1-111, MCA. This use of the term
"implement" demonstrates that it may include a relatively
large, complicated, and expensive item--a machine or a piece
of equipment--in certain contexts.
It is true that the exemption statutes contain some
indication that the legislature did not intend to protect a
debtor's possession of a relatively large, complicated, and
expensive item such as a machine or a piece of equipment.
The value of the backhoe and trailer in this case is
estimated at about $37,000. It is possible that a simi1a.r
fact situation could present itself in a bankruptcy exemption
case where the value of "exempt" property could approach or
exceed $100,000--a bulldozer or drilling rig, for example.
We also note that backhoes, bulldozers, and similar items
need trailers for hauling and trailers need trucks and
tractors for mobility. The statutes on property exempt from
execution, sections 25-13-601 through 25-13-617, MCA, do, in
some areas, place a ceiling on the dollar value of the item
exempted, e.g., mining exempt property, $1,000, section
25-13-612 (1)(e) and truck or automobile, $1,000, section
25-13-617 (1) . No dollar limit is specified in section
25-13-612 (1)(b), MCA, the code section applicable here, and,
absent guidance by the legislature, it would be improper for
this Court to place a dollar value ceiling on the relevant
exempt property.
We said in State ex rel. Bartol v. Justice of the Peace
Court (1936), 102 Mont. 1, 55 P.2d 691, quoting from 2
Freeman on Executions 3d § 226, 121.2, that:
[A] machine may be exempt from execution as a tool
or implement . . .. The difficulty is in
formulating some test by which to determine when it
is exempt . . .. The earlier cases incline to
suggest the simplicity of construction
Perhaps the capacity of the debtor to use it by his
...
own personal strength or skill, without the aid or
assistance of other machinery or motive power, is a
better test.
Bartol, 55 P.2d at 693-694.
But times have changed and we must leave Bartol to
describe a simpler time with simpler tools and implements.
Today a tool is still a powered or unpowered item designed to
be used by mechanics or artisans to perform a task and is
manageable in size and weight so that in its normal operation
it can be maneuvered or used by the opera-tor's physical
strength alone without the aid of independent motive powers
and it is liable to be more expensive and require more skill.
The definition includes common hand tools and common powered
hand tools such as drills, wrenches, saws, but also includes
larger industrial items that may be mounted on a dolly or are
pushed around on wheels or are stationary in normal operation
such as table saws, lathes, and welders.
Implements include tools but also more. An implement is
a powered or unpowered item designed to be used by a mechanic
or artisan to perform a task. It may include an item that
cannot be in its normal operation maneuvered by the
operator's physical strength but must be used with the aid of
independent motive powers.
It is the law in this state that the exemption statutes
are to Se liberally construed but such construction may not
disregard plain legislative mandate. Rartol, 55 P.2d at 693.
Because the legislature has specified no ceil-ing on dollar
value in the exemption of "tools or implements," because the
legislature has used. the word implement to include "any
vehicle," including tractors and trailers, in "implements of
husbandry," and because a liberal construction of the
definitions of "tools and implements" set forth above
dictates, we hold that a backhoe and t.rail-erare properly
tools or implements within the meaning of section
25-13-612 (1)(b), MCA.
The second issue is whether a backhoe and trailer, as
tools or implements, are necessary for the debtor to carry on
his trade. The Bankruptcy Court held tha.t the backhoe and
trailer are necessary for the debtor to carry on his trade.
It reasoned that "necessity" turns on whether there is an
alternative means available to the debtor to perform his job
as a mechanic. It did not agree that there were alternatives
here and it also reasoned. that, in this "machine" age,
capital equipment of great value may be essential to one's
livelihood. It reasoned that the exemption statute was
intended to apply to the wage-earner as well as the
self-employed.
The parties agree that the debtor here is an excavation
contractor and the backhoe and trailer are necessary to carry
on that business. We believe that the requirement of
necessity is met and that simply because the backhoe and
trailer are not necessary to the debtors obtaining employment
is not relevant. Section 25-13-612, PICA, does not provide
for a contingency which says that a showing that the ability
to obtain work without such items should negate the
exemption. We hold that the backhoe and trailer, as tools or
implements, are necessary for the debtor to carry on his
trade as excavation contractor.
The certified question is answered in the affirmative.
Justice
We Concur:
M