Carpenter v. Free, 10103

• Decision Date: 19 December 1960
• Docket Number: No. 10103,10103
• Citation: 357 P.2d 882,138 Mont. 552
• Parties: James CARPENTER, Plaintiff and Respondent, v. Edna FREE, also known as Edna Jacobson, doing business under the firm name and style of Jacobson Furniture Company, Defendant and Appellant.
• Court: Montana Supreme Court

Page 882

357 P.2d 882

138 Mont. 552

James CARPENTER, Plaintiff and Respondent, v. Edna FREE, also known as Edna Jacobson, doing business under the firm name and style of Jacobson Furniture Company, Defendant and Appellant.

No. 10103.

Supreme Court of Montana.

Submitted Nov. 3, 1960.

Decided Dec. 19, 1960.

Michael E. Ruane, John L. McKeon, Anaconda, for appellant.

Knight & Dahood, Anaconda, for respondent.

HARRISON, Chief Justice.

This is an appeal from a judgment of the district court of the third judicial district, Deer Lodge County, entered on a verdict in favor of the plaintiff, respondent herein, in a declaratory judgment action.

Respondent, James Carpenter, is the owner and operator of the Log Cabin Motel in Anaconda, Montana. This motel contains ten units. Appellant, Edna Free, is doing business in the same city under the firm name Jacobson Furniture Company. Respondent filed a complaint against appellant on November 14, 1956, alleging that his motel units were furnished by appellant pursuant to an oral agreement between respondent and appellant; that the oral contract provided for the furnishing of the motel units at a price not to exceed $6,000; that respondent has made payments pursuant to the contract in the amount of $5,300; and that a controversy has now arisen between the parties because appellant claims the balance due is to be computed on a contract price of $10,288.04 rather than $6,000. In the complaint respondent asked the district court to make a declaration of the rights and duties of the respective parties under the aforementioned oral contract.

Appellant filed a demurrer on December 7, 1956, contending respondent's complaint did not state facts sufficient to constitute a cause of action. This demurrer was overruled, and on June 5, 1958, appellant filed an answer in which she admitted respondent's motel units were furnished by her in accordance with an oral contract, but she denied the allegation that the oral agreement called for a contract price of $6,000. As an affirmative defense appellant alleged that the oral agreement called for a contract price of $10,288.04. Respondent filed a reply denying appellant's affirmative defense. Respondent made a demand for a jury trial which was granted, and the cause came on for hearing on May 20, 1959. The jury returned a verdict in favor of respondent determining the oral contract between the parties to be for the sum of $6,000, and a judgment was entered thereon.

For her first specification of error appellant asserts the district court committed error in overruling the demurrer to the complaint. This connection is based on the premise that an action for a declaratory judgment cannot be maintained to interpret an oral contract.

Montana has adopted the Uniform Declaratory Judgments Act. Sections 93-8901 to 93-8916, R.C.M.1947. The sections thereof which are pertinent to the question under consideration, i. e. whether a declaratory judgment action can be maintained to determine the rights and duties of the parties to an oral contract, are as follows:

'93-8901. [Sec. 1 of the Uniform Act] Courts of record within their respective jurisdiction shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect; and such declarations shall have the force and effect of a final judgment or decree.'

'93-8902. [Sec. 2 of the Uniform Act] Any person interested under a deed, will, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status or other legal relations thereunder.'

'93-8905 [Sec. 5 of the Uniform Act]. The enumeration in sections 93-8902, 93-8903 and 93-8904 does not limit or restrict the exercise of the general powers conferred in section 93- 8901, in any proceeding where declaratory relief is sought, in which a judgment or decree will terminate the controvery or remove an uncertainty.'

'93-8912 [Sec. 12 of the Uniform Act]. This act is declared to be remedial; its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status and other legal relations; and it is to be liberally construed and administered.'

Appellant claims the language, 'written contract or other writings constituting a contract', in section 93-8902, indicates an intent on the part of the legislature to exclude oral contracts and thereby deny courts the power to entertain declaratory judgment actions thereon. The unsoundness of this proposition, however, is manifest. Section 93-8901 is a general grant of power to courts of record to declare rights, status, and other legal relations. Nothing in this section itself shows any legislative intent to exclude oral contracts from its operation. Moreover, section 93-8905 specifically provides that the enumeration contained in section 93-8902 does not limit or restrict the exercise of the general powers conferred in section 93-8901 when a judgment or decree in a declaratory judgment action will terminate the controversy or remove an uncertainty. From this it is clear that an action for a declaratory judgment can be maintained to obtain a determination of the rights and duties of the respective parties to an oral contract. See Borchard, Declaratory Judgments, 2d ed., p. 504; Anderson, Actions for Declaratory Judgments, 2d ed., Sec. 589, p. 1323.

The question whether an action for a declaratory judgment can be maintained to declare rights, status, and other legal relations in situations where there is no written instrument creating said rights, status, or relations has been expressly considered and passed on by the highest courts in three states which have adopted the Uniform Declaratory Judgments Act. Temm v. Temm, 354 Mo. 814, 191 S.W.2d 629; In re Dahl's Estate, 196 Or. 249, 248 P.2d 700, 32 A.L.R.2d 965; Superior Dairy, Inc. v. Stark County Milk Producers' Ass'n, 89 Ohio App. 26, 100 N.E.2d 695.

The Missouri and Oregon Courts expressly held a declaratory judgment action could be maintained even though there was no written instrument involved because section 5 of the Uniform Act provides that sections 2, 3 and 4 thereof do not limit the general powers granted in section 1.

Futhermore, as pointed out by the Oregon Court, to restrict declaratory judgments to situations where a person's rights, status, or other legal relations have their source in a written instrument would be contra to the declared purpose of the act as contained in section 12 thereof. Section 93-8912, R.C.M.1947.

The Ohio Court, on the other hand, indicated that a declaratory judgment action could only be maintained to declare the rights and duties of parties to a written instrument. However, we have examined that case in detail, and the court's holding therein is not quite as broad as some of the language would indicate.

The Ohio court recognized the fact that section 5 of the Uniform Act provides that sections 2, 3 and 4 thereof do not limit or restrict the exercise of the general powers conferred in section 1 in cases where a declaratory judgment will terminate the controversy or remove an uncertainty, but they said the converse was also true. In other words, if the declaratory judgment will not terminate the controversy or eliminate an uncertainty, then sections 2, 3 and 4 are limitations on the powers granted in section 1. The Ohio Court thereupon pointed out the fact that a declaratory judgment could not eliminate the controversy or remove the uncertainty existing under the vague, uncertain, undefined, and unwritten contract set forth in the petition in the lower court. It was on this basis that the Supreme Court of Ohio held the lower court had not committed error in sustaining a demurrer to the petition asking for a declaratory judgment. The reasoning of the Ohio court is not applicable here because a declaratory judgment would terminate the controversy and eliminate the uncertainty which has developed between appellant and respondent.

In the instant case it was proper for the district court to overrule the demurrer to respondent's complaint.

Appellant also asserts the verdict of the jury is not supported by the evidence. The evidence adduced at the trial is conflicting, but there is substantial evidence which, if believed, sustains the verdict of the jury. This being so, we will not disturb that verdict, or the judgment entered thereon. Wilson v. Wininger, Mont., 345 P.2d 374.

While it appears there is no merit to the appellant's remaining specifications of error and no purpose would be served by a discussion of them, in view of the statement of the dissenting justice that there was prejudicial error in admitting testimony given in answer to leading questions and in admitting testimony giving the conclusions of the respondent when a witness, we will proceed to a discussion of each of the...