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., an
Illinois co~poration,
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 con-
venience". 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 buy-
e 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. 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
dence. 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 neces-
s 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." The
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. T h e r e i s no
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 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 * * * ( b ) by e v i d e n c e
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 * * *". 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 . Sun I n s u r a n c e Co. of N e w York v . Diver-
s i f i e d Engineers, I n c . , 2 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 . The o n l y p e r s o n t o t e s t i f y
a t t h e t r i a l was Walter M a r t e l . 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: $62.18,
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, 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, R.C.M. 1947). C o s t s on a p p e a l
a r e awarded t o s e l l e r .
---,
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!
.
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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 .