No. 79-38
I N THE SUIJREP.:E COURL!' OF THE STATE OE' MONTAI\!A
1980
P l a i n t i f f a n d Respondent.,
-vs-
L & B LODGE PPOE TIMBER PRODUCTS,
D e f e n d a n t s anci A p p e l l a n t - s .
Appeal from: D i s t r i c t Court. o f t h e E i g h t e e n t k ! J u l i c i a l D i s t r i c t ,
I n and f c r t h e County o f G a l - l a t i n ,
The Honora.ble W. W. Less1 e y , J u d g e p r e s i d i n g .
Counscl o f R e c o r l :
B o l i n g e r , H i g g i n s 6 Andes, Bozeman, Montana
B. A. P o l g i n g e r ~ r g u e d ,Bozeman, MontanE.
For Respondent :
B e r ~ ,Morgan, C o i l & S t c k e s , Bclzemar:, Montena
Gregory 0. Morgan a r g u e d , Bozeman, Montana
Filed:
_ilk& * ; t. I%?'J
-
-4
- --
Clerk
Mr. Chief J u s t i c e Frank I . Haswell d e l i v e r e d t h e Opinion o f t h e
Court.
P laintiff-respondent M a d i s o n F o r k Ranch ( R a n c h ) f i l e d a
complaint against defendants a l l e g i n g a breach o f c o n t r a c t i n
t i m b e r c u t t i n g o p e r a t i o n s on t h e R a n c h and s e e k i n g r e s c i s s i o n o f
t h e c o n t r a c t and a n i n j u n c t i o n . The D i s t r i c t C o u r t f o u n d a
b r e a c h o f c o n t r a c t and i s s u e d a permanent i n j u n c t i o n p r o h i b i t i n g
d e f e n d a n t s f r o m c u t t i n g a n y t i m b e r on t h e R a n c h , but i t s
findings, c o n c l u s i o n s and j u d g m e n t w e r e s i l e n t on t h e i s s u e o f
rescission of the contract. D e f e n d a n t L & B Lodge P o l e T i m b e r
Products appeals.
T h e R a n c h i s a d u d e r a n c h p r i v a t e l y owned b y a p a r t n e r s h i p
o f f i v e n o n r e s i d e n t i n d i v i d u a l s and i s l o c a t e d n e a r t h e t o w n o f
West Y e l l o w s t o n e . The R a n c h i s o p e r a t e d p u r e l y f o r t h e l e i s u r e
i n t e r e s t s o f i t s o w n e r s a l t h o u g h i t d o e s a c c o m m o d a t e some g u e s t s .
It i s not operated t o r e t u r n a p r o f i t . T h e p a r t n e r s h i p was
formed i n the e a r l y 1970's. A t t h a t t i m e a f i c t i t i o u s name c e r -
t i f i c a t e was f i l e d w h i c h l i s t e d t h e o r i g i n a l p a r t n e r s . However,
since t h a t time, two o r i g i n a l partners, D o n a l d Dodge and J o h n
Tweedy, have purchased t h e i n t e r e s t o f t h r e e o f t h e o t h e r o r i g i -
nal partners. No o t h e r p a r t n e r s h i p o w n e r s h i p c h a n g e s h a v e
occurred. A new f i c t i t i o u s name c e r t i f i c a t e was f i l e d p r i o r t o
t r i a l b u t a f t e r commencement o f t h e a c t i o n .
The owners and R o l a n d B r o n d e r , t h e Ranch foreman, became
c o n c e r n e d a b o u t M o u n t a i n P i n e B e e t l e i n f e s t a t i o n o f t i m b e r on t h e
Ranch i n e a r l y 1978. B r o n d e r was a u t h o r i z e d t o h i r e a l o g g e r
a t t h a t time. He c o n t a c t e d L & B L o d g e P o l e T i m b e r P r o d u c t s
t h r o u g h R o b e r t H. Smith. L & B Lodge P o l e T i m b e r P r o d u c t s i s
o w n e d a n d o p e r a t e d b y R o b e r t S m i t h and L u c i l l e S m i t h and w i l l be
r e f e r r e d t o as " S m i t h . " T h e R a n c h and S m i t h e n t e r e d i n t o a n o r a l
c o n t r a c t a b o u t J u n e 1, 1 9 7 8 , and e x e c u t e d a w r i t t e n c o n t r a c t t o
l o g the property i n August, 1978. D o n a l d Dodge s t a t e d t h a t t h e
R a n c h ' s p u r p o s e i n e n t e r i n g i n t o t h e o r a l c o n t r a c t was t o
- 2 -
r e d u c e t h e f i r e h a z a r d as w e l l as p r e s e r v e t h e a e s t h e t i c and
f u t u r e economic v a l u e o f t h e p r o p e r t y . Dodge a l s o t e s t i f i e d t h a t
t h e c o n t r a c t was s e t a t $ 1 0 p e r t h o u s a n d , w e l l below t h e market
price, t o a l l o w Smith t o p r o f i t a b l y s e l e c t i v e - c u t the property.
T h e R a n c h ' s p u r p o s e i n e x e c u t i n g t h e w r i t t e n c o n t r a c t was t o
accommodate S m i t h i n a c q u i r i n g f i n a n c i n g f o r l o g g i n g equipment.
T h e l o g g i n g o p e r a t i o n commenced i n l a t e May, 1978, and
c o n t i n u e d t h r o u g h t h e summer w i t h B r o n d e r p r e s e n t m o s t o f t h e
time. Bronder, i n supervising the operation, advised Smith
n o t t o c u t s t a n d s o f f i r o r a s p e n and t o l d h i m t o l e a v e o t h e r
s p e c i f i c s e c t i o n s o f t r e e s and i n d i v i d u a l t r e e s f o r t h e i r a e s t h e -
t i c value. Dodge t e s t i f i e d t h a t S m i t h was s a t i s f a c t o r i l y
p e r f o r m i n g t h e c o n t r a c t b y s e l e c t i v e - c u t t i ng p r i o r t o t h e e x e c u -
t i o n o f the written contract.
I n July, 1978, Smith discussed w i t h Bronder t h e purchase
o f a "harvester" t o complete t h e logging operation. A harvester
i s a l a r g e m a c h i n e w h i c h i s m a n e u v e r e d t h r o u g h t h e woods f e l l i n g
i n d i v i d u a l t r e e s and r e m o v i n g t h e l i m b s . Smith t e s t i f i e d t h a t
B r o n d e r t h o u g h t t h e h a r v e s t e r was a g o o d i d e a s i n c e he was c o n -
c e r n e d w i t h t h e s c a r s l e f t b y t h e c a t e r p i l l a r t h a t S m i t h was
using, and t h i s p r o b l e m w o u l d s u p p o s e d l y be e l i m i n a t e d b y u s i n g
the rubber-tired harvester. Bronder agreed t o present t h e
c o n t r a c t t o t h e p a r t n e r s i f S m i t h w o u l d have i t d r a f t e d . Mr.
S m i t h h a d h i s a t t o r n e y d r a f t t h e c o n t r a c t and i t was s i g n e d b y
S m i t h and M a r g a r e t Grand, a p a r t n e r i n t h e Ranch, o n A u g u s t 1,
1978.
T h e l o g g i n g o p e r a t i o n c h a n g e d c o n s i d e r a b l y when S m i t h
began u s i n g t h e h a r v e s t e r . T h e r e s u l t was t h a t many m o r e t r e e s
w e r e r e m o v e d o r k n o c k e d down a f t e r t h e w r i t t e n c o n t r a c t was
d r a f t e d and s i g n e d . This effect i s attributed to the character
and s i z e o f t h e h a r v e s t e r .
The f o l l o w i n g c o n t r a c t p r o v i s i o n i s t h e c e n t e r o f con-
t r o v e r s y i n t h i s case:
"That t h e p a r t y o f t h e f i r s t p a r t agrees t o s e l l
t o t h e p a r t y o f t h e second p a r t a l l merchantable
t i m b e r on s a i d l a n d s w h i c h h a s b e e n o r now i s
i n f e c t e d b y t h e p i n e b e e t l e , and t h e p a r t y o f
t h e s e c o n d p a r t a g r e e s t o c u t and r e m o v e a l l o f
s a i d m e r c h a n t a b l e t i m b e r f r o m s a i d l a n d s on o r
before , 1 9 .. .'I
S m i t h t e s t i f i e d t h a t he u n d e r s t o o d t h e m e a n i n g o f
" i n f e c t e d m e r c h a n t a b l e t i m b e r " t o mean a1 1 t r e e s s u s c e p t i b l e t o
i n f e s t a t i o n by t h e b e e t l e s i n c e t h e y would d i e e v e n t u a l l y . He
stated t h a t the verbal agreement which p r e d a t e d t h e w r i t t e n
agreement gave h i m t h i s i n t e r p r e t a t i o n . Pursuant t o t h i s
i n t e r p r e t a t i o n S m i t h b e l i e v e d he c o u l d t a k e a1 l t r e e s w h i c h w e r e
seven inches i n diameter o r l a r g e r a t chest height. Smith also
t e s t i f i e d t h a t B r o n d e r t o l d h i m t h a t he w a n t e d t h e f i r e h a z a r d
r e m o v e d e n t i r e l y and t h e t r e e s s a l v a g e d t h a t c o u l d be s a l v a g e d .
S m i t h s a i d i t was a g r e e d t h a t he w o u l d t a k e a l l t r e e s t h a t
w o u l d be h i t b y t h e b e e t l e s , a l t h o u g h B r o n d e r t o l d h i m on s e v e r a l
o c c a s i o n s n o t t o t a k e c e r t a i n t r e e s because o f t h e i r a e s t h e t i c
v a l ue.
As a c o n s e q u e n c e , S m i t h t e s t i f i e d t h a t he was s e l e c t i v e -
c u t t i n g down t o s e v e n i n c h c h e s t h i g h t r e e s and l e a v i n g s t a n d s o f
f i r and a s p e n . Bronder d i d not appear a t t r i a l .
On S e p t e m b e r 6 , 1978, t h e Ranch n o t i f i e d S m i t h t h a t t h e y
c o n s i d e r e d t h e c o n t r a c t t e r m i n a t e d as a r e s u l t o f h i s f a i l u r e t o
p e r f o r m according t o i t s terms. A c o m p l a i n t was f i l e d S e p t e m b e r
11, 1 9 7 8 , and a t e m p o r a r y r e s t r a i n i n g o r d e r was i s s u e d o n
O c t o b e r 2, 1978. A show c a u s e h e a r i n g was h e l d and o n O c t o b e r
10, 1978, t h e D i s t r i c t C o u r t " r e l e a s e d and v a c a t e d " t h e t e m p o r a r y
r e s t r a i n i n g order.
S m i t h r e - e n t e r e d t h e p r o p e r t y about O c t o b e r 19, 1978, and
l o g g e d 1 5 t o 25 m o r e a c r e s b e f o r e D e c e m b e r 5 , 1978. He was p r e -
v e n t e d f r o m any f u r t h e r l o g g i n g o f t h e p r o p e r t y i n t h e s p r i n g o f
1979, b y Roland Bronder.
S m i t h ' s m o t i o n s f o r d i s m i s s a l and summary j u d g m e n t b a s e d
on t h e Ranch's f a i l u r e t o f i l e a new f i c t i t i o u s name c e r t i f i c a t e
were b o t h denied.
T h e t r i a l was h e l d J u n e 1, 1 9 7 9 . Several expert witnesses
t e s t i f i e d as t o t h e i r i n t e r p r e t a t i o n o f t h e c o n t r a c t and t h e
o p e r a t i o n conducted by Smith. One o f t h e e x p e r t s , Robert
M c K n i g h t , c r u i s e d t h e t i m b e r on t h e R a n c h . M c K n i g h t h a s a B.S.
d e g r e e i n s c i e n c e and f o r e s t r y w i t h 1 3 1 k y e a r s e x p e r i e n c e w i t h
t i m b e r and f o r e s t r y c o m p a n i e s i n s o u t h w e s t e r n M o n t a n a and 2 5
years experience i n cruising timber. He d e t e r m i n e d t h a t t h e r e
was an a v e r a g e o f 1 5 3 t r e e s p e r a c r e c o n s i s t i n g o f 75 m e r c h a n -
t a b l e t r e e s p e r acre, 43 were i n f e c t e d . He d e f i n e d m e r c h a n t a b l e
as e i g h t inches i n diameter a t b r e a s t h e i g h t . He a l s o t e s t i f i e d
t h a t m o s t o f t h e a r e a s l o g g e d b y S m i t h on t h e Ranch w e r e c l e a r -
c u t and t h a t t h e m a r k e t p r i c e f o r a c l e a r - c u t operation i n the
summer o f 1 9 7 8 was a t l e a s t $ 5 0 p e r t h o u s a n d . Dodge had a l s o
t e s t i f i e d t h a t a f t e r the execution of the w r i t t e n contract, the
o p e r a t i o n became a c l e a r - c u t operation.
W i l l i a m D r i v e r , t h e t i m b e r s a l e s and d i s e a s e c o n t r o l spe-
c i a l i s t f o r t h e G a l l a t i n and C u s t e r F o r e s t , testified, as d i d
McKnight, t h a t t h e c o n t r a c t was a s e l e c t i v e - c u t c o n t r a c t on a p e r
t r e e basis.
The D i s t r i c t C o u r t e n t e r e d f i n d i n g s o f f a c t and c o n c l u -
s i o n s o f l a w on J u n e 1 9 , 1 9 7 9 . The c o u r t f o u n d , i n pertinent
part:
" ... That t h e purpose f o r which t h e p l a i n t i f f
e n t e r e d i n t o t h i s a g r e e m e n t was t o r e d u c e t h e
f i r e h a z a r d t o t h e p l a i n t i f f ' s b u i l d i n g s and
lands, along w i t h the personnel r e s i d i n g
t h e r e o n , as w e l l as p r e s e r v e t h e a e s t h e t i c and
f u t u r e economic v a l u e s o f t h e p r o p e r t y f r o m t h e
pine beetle;
" T h a t t h e d e f e n d a n t s h a v e f a i l e d and r e f u s e d t o
p e r f o r m c e r t a i n o b l i g a t i o n s under t h e c o n t r a c t
i n t h a t t h e y have c u t t r e e s w h i c h a r e n o t
m e r c h a n t a b l e and h a v e c u t m e r c h a n t a b l e t r e e s
w h i c h a r e n o t i n f e c t e d o r w e r e n o t i n f e c t e d by
t h e pine beetle; t h a t the defendants, i n t h e i r
l o g g i n g o p e r a t i o n s , h a v e w a s t e d and d e s t r o y e d
many o f t h e y o u n g , g r e e n , n o n i n f e c t e d t r e e s
s t a n d i n g on t h e p r o p e r t y and w i l l , u n l e s s o t h e r -
w i s e r e s t r a i n e d by t h i s Court, c o n t i n u e t o
w a s t e and d e s t r o y t h e y o u n g , g r e e n , u n i n f e c t e d
t r e e s s t a n d i n g on t h e p r o p e r t y , w h i c h t r e e s a r e
o f v a l u e t o t h e p l a i n t i f f f o r a e s t h e t i c and e c o -
nomic purposes."
On t h e b a s i s o f t h e p r e c e d i n g f i n d i n g s , the D i s t r i c t Court
c o n c l u d e d t h a t S m i t h had b r e a c h e d t h e c o n t r a c t , and t h a t s i n c e
t h e d e s t r u c t i o n and t h e t h r e a t e n e d f u t u r e d e s t r u c t i o n t o t h e
s t a n d i n g t i m b e r c o u l d n o t be r e m e d i e d b y a n a c t i o n a t l a w , an
i n j u n c t i o n was p r o p e r .
T h e j u d g m e n t and p e r m a n e n t i n j u n c t i o n was e n t e r e d o n J u n e
28, 1979. The i n j u n c t i o n p e r p e t u a l l y e n j o i n e d S m i t h f r o m
e n t e r i n g t h e Ranch f o r t h e p u r p o s e o f c u t t i n g o r o t h e r w i s e
d e s t r o y i n g a n y s t a n d i n g t i m b e r on t h e R a n c h . The c o u r t a l s o
g r a n t e d t h e Ranch a l i e n upon a l l t i m b e r c u t b u t n o t decked on
t h e i r land.
The f o l l o w i n g i s s u e s a r e r a i s e d on a p p e a l :
1. Whether t h e d e f e n d a n t ' s a c t s i n c u t t i n g u n i n f e c t e d
m e r c h a n t a b l e t r e e s and d e s t r o y i n g young, green, uninfected
(unmerchantable) t r e e s c o n s t i t u t e d a breach o f c o n t r a c t ?
2. Whether t h e i n j u n c t i o n i s overbroad?
3. Whether t h e D i s t r i c t C o u r t e r r e d i n denying
d e f e n d a n t ' s m o t i o n s f o r d i s m i s s a l and summary j u d g m e n t w h i c h w e r e
b a s e d o n p l a i n t i f f ' s f a i l u r e t o f i l e a new f i c t i t i o u s name c e r -
t i f i c a t e p r i o r t o f i l i n g i t s complaint?
4. Whether t h e D i s t r i c t C o u r t e r r e d i n g r a n t i n g p l a i n t i f f
a l i e n on t h e c u t , undecked l o g s ?
I n addressing t h e breach o f c o n t r a c t issue, we n o t e t h a t
many l e g a l d i s t i n c t i o n s h a v e b e e n d r a w n b y c o u r t s as t o t h e
r i g h t s o f the parties t o a contract f o r the sale of timber. The
d i s t i n c t i o n s a r e drawn d e p e n d i n g on w h e t h e r t h e i n s t r u m e n t i s a
c o n t r a c t f o r s a l e o r a conveyance o f r e a l p r o p e r t y , whether t h e
contract i s oral or written, whether t h e c o n t r a c t i s executed o r
executory, o r w h e t h e r a mere r e v o c a b l e l i c e n s e has been conveyed
o r t i t l e t o t h e t i m b e r i s passed. D e p e n d i n g on t h e
circumstances, c o u r t s h a v e t r e a t e d t i m b e r a g r e e m e n t s as e i t h e r a
contract f o r sale, a lease o f the land, an e m p l o y m e n t c o n t r a c t ,
a l i c e n s e t o c u t t i m b e r o r a conveyance passing t i t l e t o t h e
grantee. 5 4 C.J.S. Logs and L o g g i n g 99. To date, t h i s Court
h a s d e c l a r e d t h a t an o r a l o r s i m p l e c o n t r a c t f o r t h e s a l e o f
t i m b e r i s a mere l i c e n s e r e v o c a b l e a t t h e w i l l o f t h e vendor.
S o r e n s e n v. Jacobson (1951), 125 Mont.148, 2 3 2 P.2d 332. In
G u l l i c k s e n v. Shadoan ( 1 9 5 0 ) , 1 2 4 Mont. 56, 2 1 8 P.2d 714, we h e l d
that a written, u n r e c o r d e d c o n t r a c t f o r t h e s a l e o f t i m b e r was
i n e f f e c t i v e t o b i n d a s u b s e q u e n t p u r c h a s e r o f t h e l a n d who d i d
n o t have n o t i c e . I n dicta, i t was s t a t e d t h a t t h e p r e s e n c e o r
a b s e n c e o f n o t i c e was i r r e l e v a n t s i n c e t h e c o n t r a c t was e x e c u t o r y
and w o u l d n o t p r e v e n t a u n i l a t e r a l r e v o c a t i o n o f t h e l i c e n s e .
P e g g v. M i d - S t a t e D e v e l o p m e n t Corp. (1974), 164 Mont. 525, 529
P.2d 1399, expressly overruled t h i s dicta i n Gullicksen i n
holding t h a t a w r i t t e n contract f o r the sale of timber i s enfor-
ceable a g a i n s t a subsequent purchaser w i t h n o t i c e o f t h e
contract. However, t h e case i s d i s t i n g u i s h a b l e f r o m t h e p r e s e n t
case i n t h a t t h e c o n t r a c t p u r p o r t e d t o convey t i t l e t o a l l
m e r c h a n t a b l e t i m b e r and n o b r e a c h o f c o n t r a c t was i n v o l v e d . No
Montana cases have addressed t h e i s s u e o f b r e a c h o f c o n t r a c t by
h a r v e s t i n g timber which i s not the proper subject o f t h e
contract.
B o t h p a r t i e s t r e a t t h e i n s t r u m e n t as a c o n t r a c t f o r t h e
s a l e o f t i m b e r r a t h e r t h a n a conveyance o f an i n t e r e s t i n l a n d .
We a g r e e w i t h t h i s a p p r o a c h and p r o c e e d a c c o r d i n g l y .
A t trial a p p e l l a n t d e v o t e d much e f f o r t t o s h o w i n g t h a t t h e
b e s t management p r a c t i c e t o c o n t r o l t h e s p r e a d o f t h e p i n e b e e t l e
i s t o remove a l l s u s c e p t i b l e t r e e s . He a r g u e s t h a t t h i s
e s t a b l i s h e s a " u s a g e o f t r a d e " w h i c h i s t o be g i v e n e f f e c t i n
c o n s t r u i n g t h e c o n t r a c t u n d e r t h e U n i f o r m C o m m e r c i a1 C o d e , sec-
t i o n 30-2-208, MCA. However, s e c t i o n 30-2-107(1), MCA,
establishes t h a t a contract f o r the sale of timber i s subject t o
t h e p r o v i s i o n s o f t h e U C C o n l y i f i t i s t o be " s e v e r e d b y t h e
seller". Thus, t h i s contract i s not subject t o the provisions
o f t h e UCC a n d o u r c o n s t r u c t i o n o f t h e a g r e e m e n t i s d e p e n d e n t o n
common l a w c o n s t r u c t i o n r u l e s . Any l a n g u a g e i n P e g g v. Mid-State
D e v e l o p m e n t Corp., supra, which i n f e r s t h a t t h i s contract is
w i t h i n t h e p r o v i s i o n s o f t h e UCC i s o v e r r u l e d .
A s we s t a t e d i n D a n i e l s o n v. Danielson (1977), 172 Mont.
55, 58, 5 6 0 P.2d 893, 894, "It i s c l e a r from Montana cases
t h a t where t h e language o f a w r i t t e n c o n t r a c t i s c l e a r and unam-
biguous there i s nothing f o r the court t o construe; t h e duty of
t h e c o u r t i s simply t o apply t h e language as w r i t t e n t o t h e
f a c t s o f t h e case, and d e c i d e t h e c a s e accordingly." The
a p p e l l a n t c o n t e n d s t h a t an a m b i g u i t y i s created i n the contract
b y t h e use o f t h e a d j e c t i v e " i n f e c t e d " s i n c e i t c a n be c o n s t r u e d
t o m o d i f y t h e word " l a n d s " o r t o m o d i f y t h e word " t i m b e r . " We
cannot agree. The s e n t e n c e i n q u e s t i o n states " . . . agrees to
sell . . . all m e r c h a n t a b l e t i m b e r on s a i d l a n d s which has been
o r now i s i n f e c t e d b y t h e p i n e b e e t l e . . ." T i m b e r may be
"infected by the pine beetle," however, the pine b e e t l e does
n o t s t r i k e and i n f e c t l a n d . Thus, we f i n d t h e language c l e a r
and unambiguous; respondent contracted t o s e l l " a l l merchantable
timber ... w h i c h -s-e e n - -
h a b - o r now i s i n f e c t e d b~ t h e p i n e
b e e t l e " and a p p e l l a n t c o n t r a c t e d t o " c u t and r e m o v e a l l of said
merchantable timber . . ." ( E m p h a s i s added.)
S i n c e t h e l a n g u a g e o f t h e c o n t r a c t i s c l e a r and
unambiguous, t h e t r i a l c o u r t ' s d u t y was " s i m p l y t o a p p l y t h e
l a n g u a g e as w r i t t e n t o t h e f a c t s o f t h e c a s e , and d e c i d e t h e case
accordingly." D a n i e l son, supra. I n so d o i n g , the D i s t r i c t Court
found t h a t a p p e l l a n t breached t h e c o n t r a c t by c u t t i n g t r e e s which
w e r e n o t " m e r c h a n t a b l e " and m e r c h a n t a b l e t r e e s w h i c h a r e n o t
i n f e c t e d by t h e p i n e b e e t l e .
With regard t o the standard o f review, t h i s C o u r t has
r e p e a t e d l y s t a t e d i t w i l l n o t o v e r t u r n f i n d i n g s o f f a c t and
c o n c l u s i o n s o f l a w i f s u p p o r t e d b y s u b s t a n t i a l e v i d e n c e and b y
t h e law. When r e v i e w i n g e v i d e n c e i t w i l l be v i e w e d i n t h e
1 i g h t most f a v o r a b l e t o t h e p r e v a i l i n g p a r t y . L u p p o l d v. Lewis
(1977), 172 Mont. 280, 284, 5 6 3 P.2d 5 3 8 , 540-541, and c a s e s c i t e d
therein. The r e c o r d i n t h e p r e s e n t case r e v e a l s t h a t a p p e l l a n t
f r e e l y a d m i t s t h a t he i s c u t t i n g a1 1 t r e e s 7 " o r g r e a t e r i n
diameter a t chest h e i g h t regardless o f whether t h e i n d i v i d u a l
t r e e has been o r i s i n f e c t e d . There i s a l s o s u b s t a n t i a l t e s t i -
mony a n d p h o t o g r a p h i c e x h i b i t s w h i c h e s t a b l i s h t h a t t h e h a r v e s t e r
h a s d e s t r o y e d many o f t h e s m a l l , young, green t r e e s which are not
infected nor susceptible t o the pine beetle. Two w i t n e s s e s , an
e x p e r t and D o n a l d Dodge, a l s o t e s t i f i e d t h a t a t l e a s t 90 a c r e s o f
t h e Ranch have been c l e a r - c u t . On t h e b a s i s o f t h e s e f a c t s , when
viewed i n t h e l i g h t most f a v o r a b l e t o t h e p r e v a i l i n g p a r t y , we
f i n d substantial evidence t o support the D i s t r i c t Court's f i n -
d i n g s o f f a c t and c o n c l u s i o n s o f l a w .
A p p e l l a n t a l s o argues t h a t t h e D i s t r i c t C o u r t ' s f a i l u r e t o
s p e c i f i c a l l y s t a t e t h a t t h e defendant's c u t t i n g o f young green
t r e e s and u n i n f e c t e d m e r c h a n t a b l e t r e e s was u n r e a s o n a b l e s u p p o r t s
a c o n c l u s i o n o f no b r e a c h o f c o n t r a c t . I n l i g h t of the evidence
a d d u c e d i n c l u d i n g a p p e l l a n t ' s a d m i s s i o n s and e x p e r t t e s t i m o n y
t h a t 90 a c r e s was c l e a r - c u t , we f i n d t h i s c o n t e n t i o n w i t h o u t
merit. The u n r e a s o n a b l e n e s s o f a p p e l l a n t ' s c o n d u c t i s
n e c e s s a r i l y i m p l i e d i n 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 and c o n c l u -
s i o n and i s s u p p o r t e d b y s u b s t a n t i a l e v i d e n c e . The t r i a l court's
judgment i s p r e s u m e d c o r r e c t and t h i s C o u r t w i l l d r a w e v e r y l e g i -
t i m a t e i n f e r e n c e t o support t h a t presumption. R u l e 52,
M.R.Civ.P.; H a v r e I r r i g a t i o n Co. v. Majerus (1957), 1 3 2 Mont.
410, 414, 3 1 8 P.2d 1076, 1078. On t h e r e c o r d b e f o r e u s t h e r e i s
s u b s t a n t i a l evidence t o support "unreasonableness" as w e l l as a
material breach of contract.
A p p e l l a n t contends t h a t the D i s t r i c t Court erred i n
enjoining a l l c u t t i n g instead o f merely enjoining the c u t t i n g of
timber not included i n the contract. I t i s argued t h a t t h e
a p p e l l a n t s h o u l d be a l l o w e d t o c u t t h e m e r c h a n t a b l e i n f e c t e d
t i m b e r on t h e R a n c h e v e n i f a b r e a c h o f c o n t r a c t i s found. It i s
c o n t e n d e d t h a t t h i s c a s e f a l l s w i t h i n t h e r u l e t h a t an i n j u n c t i o n
s h o u l d be l i m i t e d t o e n j o i n i n g t h e w r o n g a n d s h o u l d n o t e x t e n d t o
p r e v e n t i n g l a w f u l a c t i v i t y under the c o n t r a c t . K a s a l a v.
K a l i s p e l l Pee Wee B a s e b a l l L e a g u e ( 1 9 6 8 ) , 1 5 1 Mont. 1 0 9 , 4 3 9 P.2d
65, i s c i t e d as a u t h o r i t y f o r t h i s p r o p o s i t i o n .
W note two general
e p r i n c i p l e s o f law related t o injunc-
tive relief. "An i n j u n c t i o n i s a w r i t f r a m e d a c c o r d i n g t o t h e
c i r c u m s t a n c e s o f t h e case commanding an a c t w h i c h t h e c o u r t
r e g a r d s as e s s e n t i a l t o j u s t i c e , o r r e s t r a i n i n g an a c t w h i c h i t
e s t e e m s c o n t r a r y t o e q u i t y and g o o d c o n s c i e n c e . " 4 3 C.J.S.
I n j u n c t i o n s 92. Ordinarily, i n j u n c t i v e r e l i e f i s proper only i f
an a c t has been done o r i s t h r e a t e n e d w h i c h w i l l p r o d u c e i r r e -
p a r a b l e i n j u r y t o t h e p a r t y a s k i n g f o r such r e l i e f , and a c t s
w h i c h r e s u l t i n a s e r i o u s change o f , o r are destructive to, the
p r o p e r t y a f f e c t e d e i t h e r physical l y o r i n t h e c h a r a c t e r i n which
i t has been h e l d o r e n j o y e d , d o an i r r e p a r a b l e i n j u r y . 4 3 C.J.S.
I n j u n c t i o n s 928. It i s a l s o w e l l - e s t a b l i s h e d t h a t t h e g r a n t i n g
o f an i n j u n c t i o n i s a m a t t e r o f d i s c r e t i o n r e s t i n g i n t h e
D i s t r i c t C o u r t and i t w i l l be s u s t a i n e d u n l e s s an a b u s e o f
d i s c r e t i o n i s shown. E r i e and M u l v i h i l l v. S t a t e Hwy. Comm'n
(1969), 154 Mont. 1 5 0 , 4 6 1 P.2d 207.
T h e D i s t r i c t C o u r t c o n c l u d e d t h a t an i n j u n c t i o n was p r o p e r
a f t e r finding t h a t "the standing timber i s part of the real
property, t h e d e s t r u c t i o n o f which o r t h e threatened d e s t r u c t i o n
o f which, c a n n o t be r e m e d i e d b y an a c t i o n a t l a w . " I n reaching
t h i s c o n c l u s i o n t h e c o u r t c o n s i d e r e d t h e c h a r a c t e r and u s e o f t h e
p r o p e r t y as w e l l as t h e c o n d u c t o f t h e a p p e l l a n t . The D i s t r i c t
Court found instrumental the f a c t t h a t the property's p r i n c i p a l
v a l u e o v e r t h e l a s t one h u n d r e d y e a r p e r i o d h a s b e e n " r e c r e a -
tional, a e s t h e t i c and e n v i r o n m e n t a l ." T h e c o u r t a1 s o s t a t e d t h a t
" t h e p e r i o d necessary t o mature lodge pole p i n e i s i n excess
o f s i x t y (60) years." The t h r e a t e n e d f u t u r e harm i s d e m o n s t r a t e d
b y S m i t h r e - e n t e r i n g t h e l a n d t o c u t 15 t o 25 a d d i t i o n a l a c r e s
a f t e r b e i n g n o t i f i e d t h a t t h e R a n c h c o n s i d e r e d h i m i n b r e a c h and
t h e contract terminated. U n d e r t h e s e f a c t s we do n o t f i n d a n
abuse o f d i s c r e t i o n . N e i t h e r do we f i n d t h e i n j u n c t i o n
overbroad. On t h e b a s i s o f a p p e l l a n t ' s c o n d u c t i n r e - e n t e r i n g
the land a f t e r a n o t i f i c a t i o n of termination, the D i s t r i c t Court
was w a r r a n t e d i n e n j o i n i n g a l l f u t u r e c u t t i n g t o p r e v e n t f u t u r e
i r r e p a r a b l e i n j u r y t o t h e Ranch.
A p p e l l a n t s t r e n u o u s l y a r g u e s on a p p e a l t h a t r e s c i s s i o n i s
n o t a p p r o p r i a t e i n t h i s case under s e c t i o n 28-2-1711, MCA.
The t r i a l c o u r t c o n c l u d e d t h a t t h e d e s t r u c t i o n o r t h r e a t e n e d
d e s t r u c t i o n t o t h e t i m b e r c a n n o t be " r e m e d i e d b y an a c t i o n a t
law." A l t h o u g h c o u r t s have f o u n d r e s c i s s i o n a t l a w ( a s
d i s t i n g u i s h e d f r o m r e s c i s s i o n i n e q u i t y ) t o be an a p p r o p r i a t e
r e m e d y when c o n f r o n t e d b y a m a t e r i a l breach o f a timber sales
contract, s e e C r o f o o t L u m b e r v. Thompson ( 1 9 5 8 ) , 1 6 3 C a l .App.Zd
324, 3 2 9 P.2d 302, t h e area i s f a r from w e l l - s e t t l e d and has n o t
been addressed by t h i s Court. H o w e v e r we n e e d n o t a d d r e s s t h i s
i s s u e i n t h e p r e s e n t a p p e a l s i n c e t h e D i s t r i c t C o u r t w i l l n o t be
r e v e r s e d on a p p e a l f o r a c c e p t i n g t h e a p p e a l i n g p a r t i e s l e g a l
theories at t r i a l .
A p p e l l a n t next contends t h a t t h e D i s t r i c t Court erred i n
d e n y i n g i t s m o t i o n s t o d i s m i s s and f o r summary j u d g m e n t w h i c h
w e r e b a s e d o n M o n t a n a ' s f i c t i t i o u s name s t a t u t e s . Although the
1 9 7 9 l e g i s l a t u r e r e p e a l e d t h e f i c t i t i o u s name p r o v i s i o n s , the
f o l lowing statutes, a p p e a r i n g i n s e c t i o n 63-601, R.C.M. 1947
t h r o u g h s e c t i o n 63-603, R.C.M., 1947, were i n e f f e c t t h r o u g h o u t
t h e lower court proceedings:
"63-601. F i c t i t i o u s name. Every partnership,
other than a l i m i t e d partnership, transacting
b u s i n e s s i n t h i s s t a t e u n d e r a f i c t i t i o u s name,
o r a d e s i g n a t i o n n o t s h o w i n g t h e names o f t h e
p e r s o n s i n t e r e s t e d as p a r t n e r s i n such b u s i n e s s ,
must f i l e w i t h t h e c l e r k o f t h e county i n which
i t s p r i n c i p a l place o f business i s situated, a
c e r t i f i c a t e , s t a t i n g t h e names i n f u l l o f a l l
t h e members o f s u c h p a r t n e r s h i p a n d t h e i r p l a c e s
o f r e s i d e n c e , and p u b l i s h t h e same o n c e a week,
f o r f o u r s u c c e s s i v e weeks, i n a newspaper
p u b l i s h e d i n t h e c o u n t y , i f t h e r e be o n e , and i f
t h e r e be n o n e i n s u c h c o u n t y , t h e n i n a
n e w s p a p e r p u b 1 i s h e d i n an a d j o i n i n g c o u n t y .
"63-602. Certificate--when - - filed. t o be The
c e r t i f i c a t e f i l e d w i t h t h e c l e r k , as p r o v i d e d i n
t h e p r e c e d i n g s e c t i o n , m u s t be s i g n e d b y t h e
p a r t n e r s , a n d a c k n o w l e d g e d b e f o r e some o f f i c e r
a u t h o r i z e d t o t a k e acknowledgment o f conveyances
o f real property. Where t h e p a r t n e r s h i p i s
h e r e a f t e r f o r m e d , t h e c e r t i f i c a t e m u s t be f i l e d
and t h e p u b l i c a t i o n d e s i g n a t e d i n t h a t s e c t i o n
m u s t be made w i t h i n o n e m o n t h a f t e r t h e f o r -
m a t i o n o f t h e p a r t n e r s h i p , o r w i t h i n one month
f r o m t h e t i m e designated i n t h e agreement o f i t s
members f o r t h e commencement o f t h e p a r t n e r s h i p ;
where t h e p a r t n e r s h i p has been h e r e t o f o r e
f o r m e d , t h e c e r t i f i c a t e m u s t be f i l e d and t h e
p u b l i c a t i o n made w i t h i n s i x m o n t h s a f t e r t h e
passage o f t h i s code. Persons doing business
p a r t n e r s c o n t r a r y - -e p r o v i s i o n s --i s
t o th of th
c h a p t e r , - any a s s i g n s t h e r e o f , s h a l l - -
or n o t mai
t a i n any a c t i o n u p o n - - a c c o u n t o f any
o r on
c o n t r a c t s ----- s a c t i o n s h a d i t h e i r
made o r t r a n n
a r t n e r s h i p name, i n a n y c o u r t o f t h i s s t a t e ,
{ n t i l t h e y h a v e f i r s t f i l e d t h e c e m i c a t e an
--
made t h e p u b 1 i c a t i o n h e r e i n r e q u i r e d .
added. )
( ~ m p h z
"63-603. Change o f m e m b e r s h i p - - f i l i n g - -
new c e r -
tificate. On e v e r y c h a n g e o f t h e members o f a
partnership, other than a limited partnership,
t r a n s a c t i n g business i n t h i s s t a t e under a f i c -
t i t i o u s name, o r a d e s i g n a t i o n w h i c h d o e s n o t
s h o w t h e names o f t h e p e r s o n s i n t e r e s t e d a s
p a r t n e r s i n i t s b u s i n e s s , a new c e r t i f i c a t e m u s t
b e f i l e d w i t h t h e c o u n t y c l e r k , and a new p u b l i -
c a t i o n made, as r e q u i r e d b y t h i s c h a p t e r , o n t h e
f o r m a t i o n o f such p a r t n e r s h i p . "
The M a d i s o n F o r k Ranch c o m p l i e d w i t h t h e p r o v i s i o n s o f t h e
p r e c e d i n g s t a t u t e i n 1 9 7 3 w h e n t h e p a r t n e r s h i p was f o r m e d .
However, p r i o r t o t h e commencement o f t h i s a c t i o n t w o o r i g i n a l
p a r t n e r s purchased t h e i n t e r e s t s o f t h r e e o t h e r o r i g i n a l partners.
A new c e r t i f i c a t e was n o t f i l e d p r i o r t o t h i s s u i t . The
a p p e l l a n t ' s m o t i o n s t o d i s m i s s and f o r summary j u d g m e n t b a s e d o n
n o n c o m p l i a n c e w i t h t h e s e p r o v i s i o n s w e r e b o t h d e n i e d and t h e
r e s p o n d e n t was g r a n t e d a c o n t i n u a n c e t o c o m p l y w i t h t h e
provisions. T h e new c e r t i f i c a t e was f i l e d a p p r o x i m a t e l y o n e
month p r i o r t o t r i a l .
The c r i t i c a l language i n the s t a t u t e s i s " . . . shal 1 not
m a i n t a i n any a c t i o n . . . until t h e y have f i r s t f i l e d t h e c e r -
t i f i c a t e a n d made t h e p u b l i c a t i o n h e r e i n r e q u i r e d " i n section
63-602, R.C.M. 1947. The c a s e s c o n s t r u i n g t h i s l a n g u a g e h a v e
d i s t i n g u i s h e d b e t w e e n " m a i n t a i n " and "commence." I n R e i l l y v.
Hatheway ( 1 9 1 2 ) , 46 Mont. 1, 11, 1 2 5 P. 4 1 7 , t h i s Court
c o n s t r u e d t h i s s e c t i o n ' s p r e d e c e s s o r as f o l l o w s :
"Without deciding whether the s t a t u t o r y provi-
sions heretofore referred t o apply t o the
p l a i n t i f f , i t i s s u f f i c i e n t t o h o l d , on t h e
a u t h o r i t y o f C a r s o n - R a n d Co. v. S t e r n , 1 2 9 Mo.
3 8 1 , 3 2 L.R.A. 4 2 0 , 3 1 S.W. 7 7 2 , and N i c h o l s o n
v . A u b u r n G o l d M i n . & M. Co., 6 C a l . A p p . 5 4 7 , 9 2
P . 6 5 1 , -a-i-i-n o t t h e r i g h t t o b e g i n a n
th t t s -
action, but the r i g h t t o m a i n t a i n i t , t h a t i s
w i t h h e l d x the s t a t u t e f o r f a i l u r e- o p f i
o
w i t h i t s t e r m s ; and i f , b e f o r e t h e d e f e n s e i s
i n t e r E e n e p l a i n t i f f complies w i t h the sta-
t u t o r y p r o v i s i o n s , t h e a c t i o n may be m a i n t a i n e d .
T h e d e f e n s e i s an a f f i r m a t i v e o n e and i s w a i v e d
u n l e s s p l e a d e d i n t h e answer. ( V a u g h a n v.
K u j a t h , 4 4 M o n t . 4 8 4 , 1 2 0 P. 1 1 2 1 ; C a l i f o r n i a S.
& L. S o c i e t y v. H a r r i s , 111 C a l . 1 3 3 , 4 3 P.
525.) T h e a p p e l l a n t a l l e g e d t h a t he h a d
c o m p l i e d w i t h t h e s t a t u t e , and, w h i l e t h i s a l l e -
g a t i o n was n o t n e c e s s a r y i n o r d e r t o s t a t e a
c a u s e o f a c t i o n , i t was, n e v e r t h e l e s s , d e n i e d ,
a n d we t h i n k t h e d e n i a l was s u f f i c i e n t t o r a i s e
t h e issue. B u t so l o n g as t h e s t a t u t e was
c o m p l i e d w i t h by t h e appel l a n t b e f o r e t h e answer
was i n t e r p o s e d , t h e a c t i o n s h o u l d n o t a b a t e .
The r i g h t t o m a i n t a i n t h e a c t i o n simply
sus ended u n t i l t h e s t a t u t e - c o m p l i e d w i t h . "
is
P-- E m p h a s i s added.)
I n Croft v. B a i n ( 1 9 1 4 ) , 49 Mont. 484, 489, 1 4 3 P. 960, we s a i d :
"The d i s a b i l i t y imposed by s e c t i o n 5505 f o r
f a i l u r e t o comply w i t h t h e r e q u i r e m e n t o f sec-
t i o n 5 5 0 4 c a n n o t be o f a v a i l t o t h e d e f e n d a n t
e x c e p t u p o n a f f i r m a t i v e a1 l e g a t i o n and p r o o f .
I t i s i n t h e n a t u r e o f m a t t e r i n abatement.
( R e i l l y v. H a t h e w a y , 4 6 M o n t . 1, 1 2 5 P. 4 1 7 ;
C a l i f o r n i a Sav. & L . Soc. v. H a r r i s , 111 C a l .
1 3 3 , 4 3 P. 5 2 5 . ) The i n h i b i t i o n does n o t
d e s t r o y t h e r i g h t o f a c t i o n upon w h i c h r e c o v e r y
i s sought, b u t m e r e l y imposes a d i s a b i l i t y t o
maintain the action thereon u n t i l - require- the
merit o f s e c t i o n 5 5 0 4 h a s b e e n c o m p l i e d w i t h . "
( E m p h E i s added )
. --
I n c o n s t r u i n g t h e same r e s t r i c t i o n " t o m a i n t a i n " a n a c t i o n
f o r n o n c o m p l i a n c e w i t h t h e C a l i f o r n i a f i c t i t i o u s name s t a t u t e s , a
C a l i f o r n i a Court stated:
" A n o b j e c t i o n t o t h e m a i n t e n a n c e o f an a c t i o n o n
t h e ground t h a t p l a i n t i f f has n o t c o m p l i e d w i t h
t h e p r o v i s i o n s o f s e c t i o n s 2466 and 2468 o f t h e
C i v i l Code b y f i l i n g and p u b l i s h i n g t h e c e r -
t i f i c a t e r e q u i r e d t h e r e b y , i s a mere m a t t e r o f
abatement pending t h e t r i a l , which has t h e
r e s u l t o f suspending t h e t r i a l u n t i l t h e s t a t u t e
i s complied with. It i s not j u r i s d i c t i o n a l .
B r y a n t v. We1 1 b a n k s , 8 8 C a l .App. 1 4 4 , 1 5 0 , 2 6 3
P. 332; C a l i f o r n i a S a v i n g s & Loan Soc. v.
H a r r i s , 111 C a l . 1 3 3 , 1 3 6 , 4 3 P. 5 2 5 ; O n t a r i o
S t a t e B a n k v. T i b b i t s , 8 0 C a l . 6 8 , 2 2 P. 66, 1
C.J.S., A b a t e m e n t a n d R e v i v a l , 9 9 1 , p. 1 2 9 . In
t h e authority l a s t c i t e d i t i s said:
" ' T h e f a i l u r e o f an i n d i v i d u a l o r p a r t n e r s h i p
p l a i n t i f f , d o i n g b u s i n e s s u n d e r an assumed,
f i c t i t i o u s , o r r e p r e s e n t a t i v e name, t o c o m p l y
w i t h an a p p l i c a b l e s t a t u t e r e q u i r i n g t h e f i l i n g
o f a prescribed a f f i d a v i t or c e r t i f i c a t e , i s
m e r e l y a m a t t e r i n abatement, u n t i l t h e s t a t u t e
i s complied with.'
" I n t h e B r y a n t c a s e , s u p r a [ 8 8 C a l .App. 1 4 4 ,
1 5 0 , 2 6 3 P. 3 3 5 1 , i t i s s a i d t h a t i t i s a s u f -
f i c i e n t compliance w i t h s e c t i o n 2468 o f t h e
C i v i l Code i f t h e c e r t i f i c a t e i s f i l e d and
p u b l i s h e d ' a t any t i m e b e f o r e t r i a l . ' The s t a -
t u t e i n q u e s t i o n does n o t p r o h i b i t t h e i n s t i -
t u t i n g o r commencement o f an a c t i o n f o r f a i l u r e
t o f i l e the certificate. I t mere1 v f o r b i d s t h e
maintenance o f the a c t i o n ' u n t i l t i e c e r t i f i c a t e
h a s been f i l e d and t h e p u b l i c a t i o n has been
made.' B e f o r e an a c t i o n i s f i n a l l y d i s m i s s e d o n
t h a t ground, p r i o r t o t h e t r i a l t h e p l a i n t i f f
s h o u l d be g i v e n an o p p o r t u n i t y t o c o m p l y w i t h
t h e s t a t u t e i f i t so d e s i r e s . " Kadota F i g Ass'n
v . C a s e - S w a y n e Co. ( 1 9 4 6 ) , 73 C a l .App.2d 7 9 6 ,
1 6 7 P.2d 5 1 8 , 5 2 3 .
We a g r e e w i t h t h e d i s t i n c t i o n d r a w n b e t w e e n " m a i n t e n a n c e "
and "commencement" i n the previously cited authority. The
D i s t r i c t C o u r t was n o t i n e r r o r i n a l l o w i n g p l a i n t i f f t o c o m p l y
w i t h t h e f i c t i t i o u s name p r o v i s i o n s p r i o r t o t r i a l .
A p p e l l a n t ' s f i n a l c o n t e n t i o n i s t h a t t h e r e i s no l e g a l
a u t h o r i t y t o s u p p o r t t h e g r a n t i n g o f t h e l i e n on t h e c u t undecked
logs. T h e r e s p o n d e n t c o n t e n d s t h a t t h e l i e n g r a n t e d i s an
e q u i t a b l e l i e n and i s a p p r o p r i a t e i n t h i s c a s e .
The f a c t u a l b a s i s f o r t h e l i e n g r a n t e d i s S m i t h ' s a l l e g e d
f a i l u r e t o d i s p o s e o f s l a s h p u r s u a n t t o t h e c o n t r a c t and t h e e c o -
n o m i c damage c a u s e d t o t h e p r o p e r t y a s a r e s u l t o f t h e c u t t i n g
operation. As a r e s u l t o f a p p e l l a n t ' s a l l e g e d l y n o t c o m p l y i n g
w i t h t h e s l a s h removal p r o v i s i o n , t h e Ranch w i l l i n c u r e expense
i n o b t a i n i n g a n o t h e r t o remove t h e s l a s h . The s l a s h r e m o v a l
c l a u s e p r o v i d e s t h a t S m i t h a g r e e s t o p i l e and d i s p o s e o f t h e
s l a s h i n s u c h m a n n e r as t o be s a t i s f a c t o r y t o t h e S t a t e o f
Montana. E v i d e n c e adduced a t t r i a l concerning slash d i sposal
i n c l u d e d t e s t i m o n y f r o m an i n s p e c t o r f o r t h e S t a t e D i v i s i o n o f
Forestry, C u r t i s Tesmer. T e s m e r t e s t i f i e d t h a t S m i t h was i n
c o m p l i a n c e w i t h t h e s l a s h r e d u c t i o n agreement w i t h a few excep-
t i o n s i n September, 1978 ( p r i o r t o S m i t h ' s r e - e n t r y t o c u t 15 t o
25 more a c r e s i n O c t o b e r , 1978). Dodge a l s o t e s t i f i e d t h a t
t h e Ranch would i n c u r s u b s t a n t i a l c o s t i n removing s l a s h n o t
d i s p o s e d o f by Smith. No e v i d e n c e was s u b m i t t e d on t h e a m o u n t o f
e c o n o m i c damage s u f f e r e d b y t h e R a n c h as a r e s u l t o f S m i t h ' s
breach i n c u t t i n g t r e e s n o t conveyed i n t h e c o n t r a c t , i n the
alleged f a i l u r e t o dispose o f slash o r i n the value of trees cut
and n o t decked. I n addition, t h e r e s p o n d e n t ' s p l e a d i n g s make n o
mention o f a claim f o r a lien.
T h e r e s p o n d e n t c i t e s A m e r i c a n E q u i t a b l e A s s u r a n c e Co. v.
Newman ( 1 9 5 7 ) , 132 Mont. 63, 3 1 3 P.2d 1023, and S o r e n s e n v.
Jacobson, supra, as a u t h o r i t y f o r t h e g r a n t i n g o f t h i s e q u i t a b l e
lien. We f i n d n e i t h e r c a s e r e l e v a n t t o t h e p r e s e n t a p p e a l ;
Newman i n v o l v e d s u b r o g a t i o n a n d S o r e n s e n i n v o l v e d a p u r c h a s e
money l i e n . A l i e n i s m e r e l y a c h a r g e o r encumbrance on p r o p e r t y
w h i c h s u b j e c t s t h e p r o p e r t y t o t h e payment o f a c l a i m o r d e b t .
T h e i s s u e o f damages was n e v e r r a i s e d , no e v i d e n c e was a d d u c e d o n
t h e a m o u n t o f damages a n d t h e D i s t r i c t C o u r t f a i l e d t o s t a t e
t h e amount o f t h e l i e n g r a n t e d . A l t h o u g h we r e c o g n i z e t h a t a n
e q u i t a b l e l i e n may be g r a n t e d u n d e r a g r e a t v a r i e t y o f
circumstances, i n c l u d i n g breach o f c o n t r a c t , t h e r e i s no b a s i s
f o r such a l i e n where, as h e r e , t h e r e i s no a s c e r t a i n e d d e b t o r
claim.
The j u d g m e n t i s m o d i f i e d by v a c a t i n g t h e l i e n p r o v i s i o n s
and, as m o d i f i e d , t h e judgment i s affirmed, costs t o respondent.
Chief Justice
We c o n c u r :
Mr. Justice John C. Sheehy concurs in part and dissents in
part.
I concur with the rest of the foregoing opinion, but I
dissent from that part vacating the equitable lien created by
the District Court.
The majority is in error when it determines that there
is no claim or debt here to which an equitable lien may reach.
It is inconsistent to hold on the one hand that Madison
Fork Ranch is entitled to an injunction because Smith indiscrim-
inately cut logs by clear-cutting irrespective of whether
the trees were infected by the pine beetle, and on the other
hand, to deny an equitable lien where the felled logs are
wrongfully appropriated by Smith. The doctrine of equitable
liens is not limited merely to property which is subject to
the payment of a claim or debt. The power of a District
Court to grant an equitable lien is as broad as the reach of
equity itself, out of considerations of right and justice,
to protect for the rightful owner property unlawfully appropriated.
"An equitable lien may arise independently of any
express agreement; it may arise by implication from
the conduct and dealings of the parties. As the
rule is frequently stated, in the absence of an
express contract, an equitable lien, based on those
maxims which lie at the foundation of equity juris-
prudence, may arise by implication out of general
considerations of right and justice, where, as
applied to the relations of the parties and the
circumstances of their dealings, there is some
obligation or duty to be enforced. However, the
tendency is to limit rather than extend the doctrine
of constructive liens, and, in order that such a
lien may be claimed, either the aid of a court of
equity must be requisite to the owner so that he can
be compelled to do equity or there must be some element
of fraud in the matter as a ground of equitable relief.
Such a lien will not be implied and enforced where the
facts and circumstances present no grounds for equitable
relief, and there is an adequate remedy at law, as
where the parties themselves have stipulated for a
purely legal liability ...
". . . -f -a c o u r t of e q u i t y can t r a c e money o r
I
property unlawfullyobtained o r a p p r o p r i a t e d i n t o
--e r s h a p e , - - l l i n t e r v e n e t o s e c u r e - -r
any o t h it w i it f o
t h e owner, by h o l d i n g it t o be h i s orby g i v i n g him
l i e n on it; b u t s u c h a l i e n c a n n o t be e n f o r c e d on o
p r o p e r t y which h a s n o t been enhanced o r augmented
by t h e u n l a w f u l a p p r o p r i a t i o n . . ." 53 C.J.S.
844, 545, L i e n s , S 4 (1). (Emphasis added. 1
A s t o t h o s e l o g s which w e r e r i g h t f u l l y c u t by Smith, t h a t
i s t h o s e trees which w e r e i n f e s t e d by t h e mountain p i n e
b e e t l e , s u c h trees became t h e p r o p e r t y o f Smith under t h e
t e r m s of t h i s agreement immediately upon s e v e r a n c e t h e r e o f .
A s t o t h o s e trees which were w r o n g f u l l y f e l l e d by Smith,
t h o s e t h a t w e r e n o t s o i n f e c t e d , t h e r e w a s an unlawful
appropriation. Those l a w f u l l y a p p r o p r i a t e d and t h o s e u n l a w f u l l y
a p p r o p r i a t e d now a p p e a r t o b e i n a s i n g l e mass, u n i d e n t i f i a b l e
p e r h a p s , and t h e s i t u a t i o n i s one r i p e f o r t h e e q u i t a b l e
power of t h e D i s t r i c t C o u r t t o p r o t e c t t h e p r o p e r t y o f
Madison Fork Ranch. I n Krusen Land & Timber Co. v. Tampa
Suburban Corp. (Fl. 1 9 3 5 ) , 158 So. 712, where t h e lumber company
r e c e i v e d lumber b e l o n g i n g t o o t h e r s and knowingly sawed and
commingled i t w i t h i t s own i n an u n i d e n t i f i a b l e m a s s , t h e
lumber company w a s a t r u s t e e - m a l e f i c i o and an e q u i t a b l e
ex
l i e n c o u l d be e n f o r c e d a g a i n s t t h e whole m a s s of lumber.
The C o u r t i n g r a n t i n g i n j u n c t i v e r e l i e f was s i t t i n g i n
equity. A c o u r t s i t t i n g i n e q u i t y h a s a l l power r e q u i s i t e
t o r e n d e r j u s t i c e between t h e p a r t i e s , p a r t i c u l a r l y i f t h e
i n t e n t and d i s p o s i t i o n o f one p a r t y i s n o t t o p e r f o r m i t s
contractual obligations. Link v. S t a t e By & Through Dept. of
Fish & Game (1979), - Mont. , 591 P.2d 214, 3 6 St.Rep.
355.
The m a j o r i t y h a s hobbled t h e e q u i t y c o u r t u n n e c e s s a r i l y
i n p r e v e n t i n g it from g i v i n g complete e q u i t a b l e r e l i e f .
I would a f f i r m i n t o t o .
Justice