NO. 83-228
IN TIIE SUPREN.E COURT OF THE STATE OF MONTANA
1984
STATE OF MONTANA,
Plaintiff and Respondent,
-vs-
EDWARD FREDERICK,
Defendant and Appellant.
APPEAL FROM: District Court of the Third Judicial District,
In and for the County of Deer Lodge,
The Honorable Robert J. Boyd, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Michael J. McKeon, Anaconda, Montana
For Respondent :
Mike Greely, Attorney General, Helena, Montana
John N. Radonich, County Attorney, Anaconda,
Montana
Submitted on Briefs: November 17, 1983
Decided: February 2, 1984
Clerk
Mr. Chief Justice Frank I. Haswell delivered the Opinion of
the Court.
The d.efendant Edward. Frederick was convicted of theft
in the Deer Lodge County District Court on January 11, 1983.
Frederick was sentenced to eight years imprisonment: the
sentence was suspended under certain cond-itions including
restitution. From this conviction defendant appeals.
Frederick entered into a lease agreement with Town
Pump, Inc., on July 19, 1980, to operate a gas station in
Anaconda. Frederick leased the building and pumps for a
monthly rental fee and paid for gasoline sold customers by
depositing proceeds of his sales in a Town Pump bank account..
The monthly rental arrangement was detailed in a written
1-ease agreement. The arrangement for payment for gasoline
was expressly left to the mutual assent of the parties. In
their course of dealing, Frederick made daily deposits of the
gasoline sales proceeds belonging to Town Pump in its bank
account.
To insure that its lessees fully paid for a.11 gasoline
sold, Town Pump followed an accounting practice that required
the station operators to make daily totals of sales, amounts
of gasoline sold, telephone weekly summaries, and make con-
firmatory measurements of gasoline remaining in underground
storage ta.nks. On December 11, 1981, a gasoline audit of the
Anaconda. Town Pump station revealed that Frederick had failed
to deposit $6,377 of proceeds due Town Pump.
Defense counsel's primary contention at trial and in
this appeal is that the defendant had a debtor-creditor
relationship with Town Pump and criminal liability is mis-
placed. A secondary issue presented to this Court is whether
the District Court erred in allowing par01 evi.d-ence of the
procedilres Frederick followed in paying Town Pump for gaso-
line. Since the disposition of the second issue facilitates
our analysis of the relationship between Frederick and Town
Pump, the question concerning the parol evidence will be
addressed first.
I
The testimony at issue here concerned the defendant's
practice of paying Town Pump for the gasoline he sold his
customers. The District Court allowed the State's witnesses,
employees of Town Pump at the time of the events in question,
to testify that Town Pump require6 the defendant to make
daily payment for all gasoline sold. The objection to this
testimony was based on the parol evidence rule; the written
agreement signed by the two parties contained no specifica-
tions on how Frederick was to make payment for the gasoline.
Before a party to a contract can successfully claim
applicability of the parol evidence rule, there must be a
showing that the instrument is a complete and final document
intended by the parties to contain all the terms of the
contract. Carriger v. Ballenger (Mont. 1981), 628 P.2d 1106,
1109, 38 St.Rep. 864. The lease agreement is notably silent
on procedures for payment of gasoline sol6 by the lessee.
Moreover, in Paragraph 20 of the agreement, the document
states: "The lessee may elect to pay for the gasoline upon
such terms and conditions as the parties may mutually agree."
Here is an express statement that plainly allows the parties
to supplement the contract with terms outside its four cor-
ners. The testimony of the Town Pump employee Redfern that
Frederick was required to make payments daily does not alter
or contradict the written agreement, but merely provides
evidence of a supplemental agreement occurring subsequent to
the lease and expressly anticipated by the document. The
par01 evidence rule and section 28-2-905, MCA, have no appli-
cation in such a situation and there was no error by the
District Court in ruling the testimony admissible.
The second allegation of error is that the verdict is
contrary the law, the evidence and instructions the
court. The main thrust of defendant's argument is that a
debtor-creditor relationship existed between himself and Town
Pump. After being notified by Town Pump of the shortage in
deposited proceeds, it is contended that defendant's only
obligation was a contra.ctua1 duty to repay the debt and the
breach of this civil obligation cannot form the basis for
iminal liability.
The theft statute under which Frederick was charged
states:
"Theft. (1) A person commits the offense
of theft when he purposely or knowingly
obtains or exerts unauthorized control
over property of the owner and:
" (a) has the purpose of depriving the
owner of the property; ...
'Yection
45-6-301 (1)(a), MCA.
The particular property upon which the information was based.
was the money Frederick collected from the sale of the gaso-
line, not the gasoline itself.
From all the testimony and evidence in.troduced at
trial, it a.ppears clear that defendant was under a duty to
deposit the fund-sdue Town Pump in the Town Pump account. In
addition to uncontroverted testimony by Town Pump employees
that Frederick was required to make the daily deposits, daily
deposit tickets were introduced by the State that demonstrate
the defendant did in fact make deposits for the several
months preceding termination of the lease. From this course
of dealing alone, it is evident that Town Pump entrusted
Frederick with the gasoline it supplied under the acknowl--
edged understanding that the company's share of sale proceeds
would be deposited in its bank account.
Defendant requested and received a jury instruction
that provided that if the jury believed Frederick took title
to the gasoline when it was delivered to him, then his only
obligation to pay for the gasoline was contractual and breach
thereof would not constitute theft. A letter from Town Pump
to Frederick was introduced by the defendant that indicated
title to "the petroleum products you purchase" rested with
the station operator. Resolution of the factual question of
when title passed to the operator was properly left to the
jury. The resulting conviction indicates that the jury did
not conclude title passed upon delivery. In light of the
practj ce established at trial- that Frederick made daily
payments to the Town Pump account based on the gasoline sold
the same day, there is credible evidence to support the
conclusion of the jury. Where there is substantial evidence
to support resolution of factual matters, this Court must
affirm the decision of the jury. State v. Hardy (Mont.
1980), 604 P.2d 792, 37 St.Rep. 1.
Defendant characterizes his legal relationship with
Town Pump as an independent contractor who leased the gaso-
line station. Such characterization is technically correct
but does not preclude a finding that Frederick acted in a
fiduciary capacity as well. This Court has previously recog-
nized that although collecting agents are technically not
true agents, like the defendant in the present case, there
are instances where such individuals will be considered
agents in order to remedy an evil. State v. Holdren (1963),
143 Mont. 103, 112, 387 P.2d 446, 450. In Holdren an inde-
pendent contractor was found to be an agent for the purposes
of an embezzlement statute which has been subsequently re-
placed with the theft statute, section 45-6-301, MCA, under
which Frederick was convicted.
The Restatement (Second) of Agency supports this
Court's view that an independent contractor may be found to
be an agent. In the Restatement's commentary on independent
contractors as agents, it is noted:
". . . In fact, most of the persons known
as agents, that is, brokers, factors,
attorneys, collection agencies, and
selling agencies are independent contrac-
tors as the term is used in the Restate-
ment of this Subject, since they are
contractors but, although employed to
perform services, are not subject to the
control or right to control of the prin-
cipal- with respect to their physical
conduct in the performance of the servic-
es. However, they fall within -- the cate-
gory - agents.
of -
T are fiduciaries;
they - to the principal the basic
owe
obligationsof agency: loyalty and obedi-
ence. Some o them also fall within the
f
category of trustees, as in the case of a
selling agent who has been given title to
the subject matter. Colloquial use of
the terms excludes independent ccntractor
from the category of agent as a similar
use excludes trustee, but in both cases
there is an agency if in the transaction
which they undertake they act for the
benefit of another and subject to his
control. Thus, salesmen as a group are
divided into servants and non-servants,
the latter falling into the class of
independent contractors for the purpose
of distinguishing them from others for
whose physical conduct in the scope of
employment the employer is responsible."
(Emphasis added.) Restatement (Second)
of Agency, S14N Comment a (1958).
The Restatement language quoted above was also cited
with approval by the Idaho Supreme Court in affirming the
embezzlement conviction of a gasoline station manager who
failed to turn over to the oil company gasol-ine proceeds
belonging to it. State v. Compton (1969), 92 Idaho 739, 450
P.2d 79. The circumstances of the case before this Court,
like those presented in Compton, warrant the conclusion that
a fiduciary relationship existed between the defendant and
the oil company. Town Pump placed a special confidence in
its station operator that the proceeds due the company would
be placed in its account. This was one of the basic and
principal- obligations Frederick owed Town Pump. Frederick,
through his course of dealina in the months precedinq the
shortage, demonstrated his understanding of the entrustment
of the gasoline and his responsibility for making payment to
the company account. The defendant's obvious deviation from
this recognized fiduciary duty when he falsified accounting
reports to the company clearly indicated an intent to pur-
posely deprive Town Pump of its proceeds.
Defendant relies on the Colorado decision of Kellev v.
People (1965), 157 Colo. 417, 402 P.2d 934, in which a
debtor-creditor relationship was found to exist between a
gasoline station operator who failed to make gasoline pay-
ments and his oil company. However, the Colarado opinion is
distinguishable from our decision today in that it failed to
find that the operator was in any way an agent of the oil
company or that the Colorado company required receipts from
the sale of gasoline to be set aside in trust.
The defendant in the present case deliberately attempt-
ed to conceal his retention of the proceeds due Town Pump.
This action is inconsistent with an ordinary debtor-creditor
relationship. State v. Smith (1959), 135 Mont. 18, 334 P.2d
1099. Furthermore, there is nothing in the record below that
supports defendant's contention that the parties intended to
create, either expressly or impliedly through a continuing
course of conduct, a debtor-creditor relationship. Once the
shortage in deposited proceeds was discovered, there was a
demand for an accounting and Town Pump terminated the lease
agreement. The parties did not continue in their regular
course of business. The jury was left only with defense
counsel's bare assertion that the failure to deposit the
proceeds due Town Pump created a debtor-creditor relation-
ship. Without more, this Court has previously refused to
find a debtor-creditor relationship. State v. Holdren, 143
Mont. at 117, 387 P.2d at 453.
In light of the foreqoing discussion, there can be no
doubt that the jury verdict was properly supported by the
evidence and in accordance with the law and instructions of
the court. A person taking money entrusted to him cannot
avoid criminal liability by calling it a loan.
The judgment is affirmed.
f Chief Just c
We concur:
1