No. 86-363
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
EUGENE MOORE and JEANNINE MOORE,
Plaintiffs and Respondents,
-vs-
BERNARD E. HARDY,
Defendant and Appellant.
APPEAL FROM: District Court of the Twelfth Judicial District,
In and for the County of Chouteau,
The Honorable Thomas McKittrick, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Donald A. Ranstrom, Chinook, Montana
For Respondent:
Jardine, Stephenson, Blewett & Weaver; K Dale Schwanke,
Great Falls, Montana
Submitted on Briefs: September 30, 1987
Decided : J a n u a r y 19, 1988
Filed: 9 A N 1 9 1988
Mr. Justice R. C. McDonough delivered the Opinion of the
Court.
Defendant Hardy appeals the Twelfth Judicial District
Court's ruling in favor of plaintiffs. We affirm.
On April 1, 1976, appellant Bernard E. Hardy entered
into an agreement with Jack Lang to purchase a farm, crops
and a lease known as the McKee lease. Hardy also received
the right to harvest the 1976 winterwheat crop planted by
Lang. Hardy later obtained a renewal of the McKee lease
until 1983.
In the spring of 1978 Hardy entered into two agreements
with Paul Jackson where Hardy traded his equity in the Lang
farm and some Florida property for other property in Florida.
Under this exchange, Jackson was entitled to all of Hardy's
rights, including the right to the McKee lease. The then
growing crop and its expenses were Jackson's. Hardy was to
continue to farm for Jackson.
In September 1978, Paul Jackson negotiated an exchange
of the Lang farm with Dr. Eugene and Mrs. Jeannine Moore.
The Moores understood that the McKee lease would be assigned
if they bought the farm. They were to receive a growing crop
when they bought the farm. Several agreements were executed
to facilitate the exchange of properties. One of the
agreements provided that the farm would be leased back by
Jackson under a five-year lease. Jackson was to pay a yearly
cash rental each February of $107,000. The lease provided
that Hardy was to farm and operate the farm in a good and
farmerlike manner and consistent with custom and practice
prevailing in the area. All parties understood that Hardy
was to continue farming the place. The lease was silent as
to entitlement to crops in the event of default or
termination of the lease.
Hardy and Jackson entered into an agreement and cash
lease of which the Moores were not advised. Under this
arrangement Hardy was to custom farm the Lang farm for
Jackson through December 31, 1979. Jackson was to pay Hardy
and Hardy had a lien on the 1979 crop that the Moores bought.
On February 1, 1979, Jackson paid the Lang farm payment
to Moores. After harvesting the 1979 crop Hardy made the
1980 payment directly to the escrow. Hardy again made the
1981 payment directly to the escrow after harvesting the 1980
crop. In 1981 he harvested the crop but did not make the
1982 payment to anyone. Jackson did not make the Moore
payment either and filed for bankruptcy on February 26, 1982.
The Moore's gave notice in April 1982 to both Jackson and
Hardy of default and that the lease was terminated.
The Moores then retained a person to farm the farm for
them. In August 1982 Hardy attempted to harvest the 1982
winterwheat crop planted in Fall 1981. The Moores secured an
order restraining Hardy from any further harvesting. The
restraining order was set aside and Hardy was allowed to
harvest the crop as long as he accounted for it. Hardy
delivered the grain to an elevator for storage rather than
store the grain on the farm. The crop proceeds were put into
a trust held by his attorney.
The Moore's initiated suit claiming they were entitled
to the crop proceeds, compensation for the value of the McKee
lease, storage costs and punitive damages. A bench trial was
held and the District Court found in favor of the Moores.
After judgment was entered, Hardy voluntarily paid over to
the Moores the share of the 1982 crop proceeds his attorney
held.
Hardy is now appealing the District Court's judgment and
raises these issues on appeal.
1) Whether the District Court erred in adopting plain-
tiff Moores' proposed findings and conclusions virtually
verbatim?
2) (By Respondents) Whether issues #3 and #4 are moot?
3) Whether the District Court erred in failing to
consider the doctrine of waygoing crops?
4) Whether the District Court improperly permitted
introduction of evidence as to custom and usage to determine
entitlement to crop proceeds?
5) Whether damages were properly assessed?
6) Whether punitive damages were proper?
7) Whether storage charges were properly assessed?
ISSUE I
Appellant contends that the District Court's Findings of
Fact and Conclusions of Law are an identical reproduction of
the proposed findings and conclusions submitted by respon-
dents. Appellants in particular point to findings number 13,
14 and 23 as erroneous and unsupported by evidence.
The standard by which findings of fact and conclusions
of law are measured was enunciated by this Court in In Re
Marriage of Jensen (Mont. 1981), 631 P.2d 700, 703, 38
St.Rep. 1109, 1113. "Our ultimate test for adequacy of
findings of fact is whether they are sufficiently
comprehensive and pertinent to the issues to provide a basis
for decision, and whether they are supported by the evidence
presented." The District Court's reliance on counsel's
proposed findings of fact and conclusions of law does not
automatically result in reversal. In In Re the Marriage of
Alt (Mont. 1985), 708 P.2d 258, 260, 42 St.Rep. 1621, 1623,
this Court held "where, as here, findings and conclusions are
sufficiently comprehensive and pertinent to the issues to
provide a basis for decision, and are supported by the
evidence, they will not be overturned simply because the
court relied upon proposed findings and conclusions submitted
by counsel." Quoting Kowis v. Kowis (1983), 202 Mont. 371,
379, 658 P.2d 1084, 1088. The record contains sufficient
evidence upon which the District Court could base its
findings. We uphold the District Court.
ISSUE I1
Respondent contends that appellant's issues 3 and 4 are
moot. These issues concern the ownership of the 1982 crop.
Issue 3 is whether the District Court erred in failing to
consider the doctrine of waygoing crops? Issue 4 is whether
the District Court improperly permitted introduction of
evidence as to custom and usage to determine entitlement to
crop proceeds.
After judgement Hardy voluntarily paid to the Moores the
share of the 1982 crop proceeds and interest that his
attorney was holding. This was a partial satisfaction of the
judgment. Hardy did not place any restrictions on the use of
the funds or stay execution of the lower court's judgment.
The Moores used the proceeds to pay the balance of the Lang
farm contract and pay income tax on the proceeds.
The unsuccessful party must seek to stay execution
pending appeal. In Gallatin Trust and Savings Bank v. Henke
(1969), 154 Mont. 170, 177, 461 P.2d 448, 451, this Court
held that failure to preserve rights may result in mootness
"the rule is well established that a supersedeas bond to
preserve the rights of the unsuccessful party may be required
and failure to post it makes the rights of the parties
subject to execution, subsequent satisfaction of the judgment
and possible mootness so far as appeals are concerned."
Voluntary payment of a money judgment does not
automatically render a cause moot. Montana National Bank of
Roundup v. State Department of Revenue (1975), 167 Mont. 429,
432-33, 539 P.2d 722, 724, sets the standard "A defeated
party's compliance with the judgment renders his appeal moot
only where the compliance makes the granting of effective
relief by the appellate court impossible." This is not the
case here, partial payment of the money judgment does not
render effective relief impossible. Issues 3 and 4 are not
moot and we will address them.
ISSUE 111
The District Court's conclusion of law that the 1982
crop reverted to the Moores and they became entitled to all
proceeds upon termination of the Jackson-Moore lease rests on
two pivotal facts. The Jackson-Hardy lease which was subject
to the fixed term Jackson-Moore lease was for a fixed term
and Hardy did not pay rent in 1982.
The District Court was correct in not applying the
doctrine of wayward crops. Section 70-26-206, MCA, provides
statutory guidance concerning entitlement to crops. The
statute provides ". . . a tenant at will or for an indefinite
term may cultivate and harvest the crops growing at the end
of his tenancy." Hardy was neither a tenant at will or for
an indefinite term.
Hardy's tenancy came to an end due to a default before
the lease was up. In 1982 neither Hardy nor Jackson paid
rent. Both the fact that the tenancy ended because of a
default and the fact that Hardy did not pay rent prevent
Hardy from claiming the 1982 crop. "Thus, where a tenant
before the expiration of his term surrenders to the landlord,
or through some default forfeits his lease and the landlord
re-enters, the latter is entitled to the growing crops upon
the land and no right or title therein remains in the
tenant." 51 C.J.S. Landlord and Tenant 5 349 at 886.
ISSUE IV
In determining who was entitled to crop proceeds the
District Court considered evidence of custom and usage and on
the basis of custom and usage held that the Moores were
entitled to the crop proceeds. Appellant contends this was
error because no contract existed between the Moores and
Hardy and thus evidence of custom and usage is inappropriate.
Hardy, however, did not object to the introduction of this
evidence at trial. By failing to object to admission of this
evidence at trial, Hardy has waived his right to claim error
on appeal. In re Schueren's Estate (1973), 162 Mont. 417,
512 P.2d 1283.
ISSUE V
Hardy also claims that the District Court erred in
assessing damages for the failure to assign the McKee lease
to the Moores. He asserts that findings of fact 6 and 11 are
not supported by evidence and that the court failed to apply
5 27-1-314, MCA, the proper statutory measure of damages.
Rule 52(a), M.R.Civ.P., provides "Findings of fact shall
not be set aside unless clearly erroneous, and due regard
shall be given to the opportunity of the trial court to judge
of the credibility of the witnesses." Substantial evidence
is needed to support the lower court's findings. Miller v.
Watkins (1982), 200 Mont. 455, 461, 653 P.2d 126, 129.
Testimony was presented, especially the testimony of Hardy
himself, that supports the lower court's findings that Hardy
had an obligation to assign the McKee lease to the Moores.
There certainly was enough "'relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.'" Bushnell v. Cook (Mont. 1986), 718 P.2d 665,
668, 43 St.Rep. 825, 828 (quoting State v. Plouffe (1982),
198 Mont. 379, 389, 646 P.2d 533, 539.)
Hardy's assertion that the District Court failed to
apply 5 27-1-314, MCA, the proper measure of damages is
incorrect. Section 27-1-314, MCA, provides:
Breach of agreement to convey real property.
The detriment caused by the breach of an agreement
to convey an estate in real property is considered
to be the price paid and the expenses properly
incurred in examining the title and preparing the
necessary papers, with interest thereon. If the
breach was in bad faith and the agreed price was
less than the value of the estate, the detriment is
also considered to include the difference between
the agreed price and the value of the estate at the
time of the breach and the expenses properly
incurred in preparing to enter upon the land.
The statute applies, a lease is an estate in real property
and the amount of damages arrived at by the District Court is
in accordance with 5 27-1-314, MCA. The assignments between
Hardy, Jackson and the Moores effected an assignment of the
McKee leasehold to the Moores. Hardy had an obligation to
transfer the lease to the Moores. The lease was never
transferred to the Moores. Fred Schafer testified that the
value of the McKee lease was $100 an acre. It was within the
District Court's discretion to adopt the value of the lease
as the amount of damages. The McKee lease was included in
the assignment of the Lang farm and its value equals its
portion of the total purchase price.
ISSUE VI
Hardy argues that punitive damages were improperly
assessed against him for the failure to assign the McKee
lease. There is substantial evidence in the record to
support the District Court's imposition of punitive damages.
Section 27-1-221, MCA, governs the imposition of punitive
damages. In this case the District Court found that "In
failing to make the assignment over of the McKee Lease, Hardy
breached the duty he had to do so and his actions in this
regard were motivated purely by his desire to save the lease
for himself after the Jackson bankruptcy, no matter what
damage was done to the Moores by doing so. Hardy further
attempted to avoid the duty to assign he had by interposing
in bad faith and without justifiable cause, various defenses
to the assignment of the lease." (Conclusion of Law No. 4)
The court's conclusion which is based upon its findings of
fact, is supported by evidence in the record and is in
accordance with the requirements of 5 2 7 - 1 - 2 2 1 , MCA.
ISSUE VII
Included in the damage award to the Moores was the sum
of $4,645.69 for storage costs incurred at grain elevators
because Hardy did not store the grain at the farm. Hardy
claims that he was ordered by Judge Coder to take the crops
to an elevator. Judge Coder's order does not include a
requirement to store the grain in an elevator. The storage
costs constitute an allowable item of compensatory damages.
Section 2 7 - 1 - 2 0 2 , MCA. The record reveals substantial
evidence in support of the damage award. Testimony was
presented that ample storage existed on the farm and there
was testimony on the storage charges incurred by Hardy.
Affirmed.
We Concur: ,
,
, -4