Fallon County v. Brindley , 212 Mont. 247 ( 1984 )

No. 83-24
IN THE SUPREPIE: COURT OF THE STATE OF MONTANA
1984
FALLON COUNTY, a political
subdivision of Montana,
Plaintiff and Respondent,
-vs-
HUGH BRINDLEY,
Defendant and Appellant.
APPEAL FROM: District Court of the Sixteenth Judicial District,
In and for the County of Fallon,
The Honorable Alfred B. Coate, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Robert L. Johnson, Lewistown, Montana
For Respondent :
Denzil R. Young, Baker, Montana
Submitted on Briefs: February 9, 1984
Decided: SepteElber 6, 1384
Filed :> 5d4
Clerk
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
This is an appeal from a judgment of the District Court
of the Sixteenth Judicial District of Fallon County, awarding
$500 per month rental from November 17, 1979 until the
County's scraper is returned. We vacate the judgment and
remand the cause for further proceedings.
The issues presented on appeal- are:
1. Did lessee's obligation to pay rent terminate when
the scraper was rendered useless?
2. Did lessee's attempt to return the scraper terminate
his rental obligation?
3. Did the District Court err in holding that the
lessee was responsible for monthly rental payments until the
scraper was returned to the County storage yard?
4. Was the lessor obligated to mitigate damages?
Hugh Brindley, an earth-moving contractor from Winnett,
Montana, rented a Caterpillar Model 435 pull-type scraper
from Fallon County on October 15, 1979. He signed a contract
presented to him by the County and paid one month's rent of
$500 in advance. The County's shop foreman watched Brindley
load the scraper onto his truck to transport it from the
County storage yard. Brindley winched the scraper's front
wheels up and safety chained the scraper to his truck. He
transported the scraper in this manner without incident to a
worksite outside of Fallon County.
Brindley testified that he attempted to transport the
scraper hack to the Fallon County storage yard in Baker at
the end of the prepaid, one-month period. He secured the
scraper to his truck in the same manner in which he had left
the storage yard. Approximately 24 miles from Raker, the
scraper separated from the truck and sustained major
structural damage. Separated parts of the scraper came to
rest in a pasture owned by Richard Reiger.
Unequipped to transport the separated scraper, Brindley
helped Reiger repair the fence, returned to Winnett, and
telephoned County Commissioner Gary Lang to report the
accident. Commissioner Lang viewed the accident scene two
days later. Neither Brindley nor the County made any effort
to tow the scraper parts to Baker after the accident.
During months of negotiation following the accident, the
County made no demand that Brindley pay additional rental or
that he return the scraper to the County storage yard. The
County refused Brindley's offer to buy and transport to Baker
a used scraper of the same age and model, which he had
discovered for sale in Idaho.
The October 15, 1979 rental agreement between Brindley
a.nd Fallon County provides in pertinent part:
"Lessee shall pick up the scraper and upon
termination of this contract, shall return it to
Fal-lon County. Lessee shall not be responsible for
major structural damage to the scraper unless it
can be shown that this damage was occasioned by his
abuse ...I1
The agreement is silent as to duty to repair, fitness for use
or destruction of the thing hired.
On October 17, 1980, approximately one year after
renting the scraper to Brindley, the County filed suit
against Brindley claiming that "the scraper was wrecked and
virtually destroyed, and has never been returned." The
complaint further alleged that "the scraper, before its
destruction, had a value in excess of $10,000. " The County
asked "for the value of the scraper and for the value of its
use at $500.00 per month from and after November 15, 1979
The case wa.s tried before the court on April 21, 1982.
The record contains no explanation as to why trial was
scheduled more than a year after the last pleading was filed
with the District Court. In the meantime, the scraper
remained in Reiger's pasture.
The District Court found that Brindley paid $500 to the
County before taking possession of the scraper on October 17,
1979; that the accident occurred in January, 1980; and that,
a.s a result of the accident, the scraper sustained serious
structural damage. The court concluded that the County had
failed to prove the scraper was being tra-nsported in a
negligent manner or that the defendant's method of
transporting the scraper caused the accident. Having failed
to prove that the damage to the scraper was "occasioned by
his [the lessee's] abuse," the County was not entitled under
its contract to recover for the damage to the scraper.
The court further concluded that defendant's obligation
to pay a monthly rental of $500 continued until defendant
returned the scraper to Fallon County's possession. The
court awarded the County $500 per month rental from November
17, 1979 until the scraper is returned. The record contains
no evidence that the scraper has ever been returned to the
Fallon County storage yard. Appellant's counsel alleges that
the County sold the scraper "as is" from Reiger's pasture
after judgment was entered against Brindley.
The record includes testimony by Commissioner Lang that
the estimated value of the scraper at the time of the
accident was $8,000. We note the amount of past due rental
awarded to the County at the time of the August 16, 1982
judgment was more than twice the estimated value of the
scraper.
Hon-. Fred J. Weber CORRECTION. In preparing this opinion for pub-
Justice, Supreme Court lication, we noted in our verification of titles and
Room 414 Justice Building citations the matters listed below. Corrections have
215 North Sanders been made on our copy of the opinion.
Helena, Montana 59620
October 4, 1984
Fallon County v. Brindley, No. 83-24, Sept. 6, 1984
Page 5, line 12 from bottom --- 150 Mont. at 261-62 should read 150
Mont. at 361-62.
-. WEST PUBLISHING COMPANY
Box 43526
St. Paul, MN 55164
While the parties have raised several issues on appeal,
we consolidate the first three issues into one question: Did
the lease terminate on the date of the accident? We find
this issue to be determinative. We need not address the
issue of mitigation at this time.
Section 70-1-607 (4), MCA provides: "When hiring
terminates. The hiring of a thing terminates . . . by the
destruction of the thing hired. " This section and its
predecessor apply to all things hired. In American Ma-chine
Company v. Johnson (1971), 157 Mont. 226, 483 P.2d 921, we
held that section 42-109, R.C.M. 1947 controlled termination
of the lease of a "skidder" machine. In Solich v. Hale
(1967), 150 Mont. 358, 435 P.2d 883, the statute controlled
termination of a lease of premises in a building.
Absent a contractual provision to the contrary, the
lease terminates by law upon the destruction of the thing
hired. Only express agreement to the contrary can preclude
operation of the sta-tute. Kosena v. Eck (1981.), 195 Mont.
12, 18, 635 P.2d 1287, 1290-91, citing Solich, 150 Mont. at
341
-2-63-62, 435 P.2d at 885. No such agreement exists in this
case.
In Solich, supra, the only factual issue presented,
other than damages, was whether a building that had been
partially gutted by fire was repairable or destroyed. Lessor
argued that the building was destroyed and plaintiff's lease
terminated by operation of law. This Court set forth two
tests for determining whether section 42-109, R.C.M. 1947
(the predecessor to section 70-1-607, MCA) applied.
The first test, which the Court labeled an
"untenability" test, is essentially a test for fitness for
use :
"Under this test the thing hired is considered
destroyed: 'When destruction of the demised
premises is of such a nature that it cannot be used
for the purposes for which it was rented and cannot
he restored to a fit condition by ordinary repairs,
made without unreasonable interruption of the
lessee's use.' Presbyterian Distribution Services
v. Chicago National Bank, 28 Ill.App.2d 147, 171
N.E.2d 86, 90." Solich, 150 Mont. at 362, 435 P.2d
at 885.
Under the second test, the Court considered the thing
destroyed "if the cost of restoration . . . as it was
immediately before the fire is more than one-half of the
value of the property at the time of the fire." Solich, 150
Mont. at 362, 435 P.2d at 885.
The Court held that under both tests the evidence lead
to the conclusion that the building was destroyed. The Court
observed that "parts of respondent's business were located in
both buildings. A destruction of even the 'so-called' north
building would be sufficient to terminate the lease under the
statute involved." Solich, 150 Mont. at 364, 435 P.2d at
886. Under both the fitness-for-use and cost-of-repairs
tests, "destruction" can mean less than complete
obliteration.
The record here indicates that the scraper's fitness for
use ceased when it separated from Brindley's truck and
"sustained serious structural d.amage." The County's
complaint alleged that the "scraper was wrecked and virtually
destroyed" by the accident. Commissioner Lang testified that
the scraper was not fit for use, but that he had not
investigated the cost of repairs. The record is silent as to
the salvage value of the scraper, the cost of repairs, or how
long it might take to return the scraper to fitness for use.
The District Court failed to issue findings of fact on
the fair market value of the scraper before the accident and
the cost, time and feasibility of repairs to restore the
scraper to fitness for use after the accident. Absent such
findings, this Court cannot rule on whether the scraper was
destroyed on the date of the accident and whether the lease
terminated by operation of law.
We vacate the judgment of the District Court and remand
for appropriate findings and such proceedings as are
necessary.
We concur:
4 . d d. @ I
Chief Justice
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