Murphy v. Redland

• Decision Date: 20 September 1978
• Docket Number: No. 13941,13941
• Citation: 583 P.2d 1049,35 St.Rep. 1267,178 Mont. 296
• Parties: Gary M. MURPHY, Plaintiff and Appellant, v. Richard REDLAND, Jr., E. M. Berthelson and Sidney Livestock Market Center, Defendants and Respondents.
• Court: Montana Supreme Court

Page 1049

583 P.2d 1049

178 Mont. 296

Gary M. MURPHY, Plaintiff and Appellant, v. Richard REDLAND, Jr., E. M. Berthelson and Sidney Livestock Market Center, Defendants and Respondents.

No. 13941.

Supreme Court of Montana.

Submitted on Briefs March 31, 1978.

Decided Aug. 22, 1978.

Rehearing Denied Sept. 20, 1978.

Jerome J. Cate, Billings, for plaintiff and appellant.

Habedan, Cumming & Best, Sidney, submitted on briefs without oral argument, for defendants and respondents.

SHEEHY, Justice.

Appeal by appellant, Gary M. Murphy is from a judgment in the District Court of the Seventh Judicial District, Dawson County, awarding judgment against Gary M. Murphy and in favor of Richard Redland, Jr. and E. M. Berthelson, in a cause tried to the District Court without a jury.

The matter comes on regularly for decision in this Court, as one classified under the Internal Operating Rules of this Court (November 17, 1977) for submission without oral argument.

The case is a welter of confusing contentions and countercontentions. Stated as simply as possible the parties entered into a written agreement dated April 10, 1976 whereby they established between them, a joint venture for the purchase of cattle, to be grazed on lands to be supplied by Murphy. Each of the parties was required to bear one-third of purchase price, one-third of expenses of grazing and running the cattle, and receive one-third of the net profit after the cattle had been sold.

These are the facts as we glean them from the record:

In early 1976, Murphy had possession of lands in Dawson County, Montana, by ownership or by lease, known as the "Richey Place" together with state and private leases and Taylor grazing rights. On March 24, 1976, Murphy entered into a pasture agreement with Redland by virtue of which Redland was to pay $5 per animal unit per month in three payments to graze 1,000 animal units on the Murphy land for a period of 5 months during the 1976 grazing season. The pasture lands apparently included 8 sections of land which Murphy held under lease from one Homer Johnstone which Murphy had leased from Johnstone for a promised cash consideration of.$19,000. Murphy had paid $3,000 to Johnstone and the balance of $16,000 he sought to obtain from the Wolf Point PCA by borrowing. The loan from the Wolf Point PCA was to be based upon the strength of the pasture agreement between Murphy and Redland for the lands. Redland had apparently determined to buy cattle in Texas to stock the lands covered by the pasture agreement.

Before PCA made the proceeds of this loan available, Murphy called Redland to inquiry if Murphy could come in on one-third interest of the Texas cows if Murphy could produce a banker who would bankroll the venture for them. He was proposing to Redland that Berthelson would be the financier involved. Redland agreed, and Murphy negotiated with Berthelson.

Berthelson agreed to provide the money to purchase the cattle. He reserved the right to approve the cattle purchase, on which Redland had already negotiated a purchase price, and for which Redland had made a down payment of $10,000. Berthelson further stipulated he would receive one-third of the net profits when the cattle were sold, and in addition, would receive 10 percent interest per annum from the other two parties on any monies which Berthelson advanced on the purchase price of the cattle or the operating expenses of grazing and running the cattle, over and above his one-third share, from the party or parties who contributed less than a one-third share.

Berthelson went to New Mexico in early April 1976, approved the cattle, and provided $158,884.32 towards their purchase, the other $10,000 of the purchase price having come from Redland.

Before shipping the cattle to Montana, however, Redland and Berthelson sold certain of the cattle in Roswell, New Mexico, with the agreement of Murphy, which netted the joint venture the sum of $11,018.76. The remaining cattle were shipped to Montana by truck, Redland paying the trucking expenses.

When the cattle arrived in Montana, it was found that Homer Johnstone had not been paid the balance of the lease monies due him, and refused to allow the cattle to be unloaded on the leased lands until he was paid. As a result, the cattle were unloaded on Murphy's Bluff Creek property. Eventually Johnstone agreed to permit the cattle on his land after receiving a personal guaranty of payment from Redland and Berthelson. In June 1976, the PCA paid Johnstone the $16,000 balance, as proceeds of a loan from PCA to Murphy.

Before Berthelson had paid the balance of the purchase price for the cattle in New Mexico, a conference long-distance telephone call between Murphy, Redland and Berthelson occurred, whereby orally the essential details of their agreement were worked out. This agreement was reduced to writing, and on June 6, 1976, the parties met in Richey, Montana, where the written agreement was signed. At the same time, they added and approved three handwritten paragraphs to the agreement which were to the effect that Redland would have full charge of the operation of the cattle and all employees and management of all leases; Murphy would furnish Berthelson and Redland with a letter from the PCA office as to any interest PCA might have in the Johnstone lease and what PCA expected of Murphy with regard to the joint venture agreement; and further, Murphy on that date was in violation of their agreement and had been given 10 days to correct the violation.

PCA requested it be given a lien on the cattle as security for its loan to Murphy of $16,000. However the cattle had been branded with the Berthelson brand and he refused to allow the cattle to be mortgaged.

At the June 6 meeting, Berthelson insisted Murphy provide an additional $25,000 toward the venture. Murphy claims the requirement for an additional $25,000 from him was one of the "violations" of the joint venture agreement claimed by Berthelson and Redland, which he was to remedy within ten days. Murphy never produced the $25,000 although oral extensions were given to him by Berthelson. Murphy claims that on July 16, 1976, Berthelson terminated the arrangement as far as Murphy was concerned.

How much Murphy would receive for the grazing of joint venture cattle upon his lands then became a matter of dispute between the parties. Berthelson had advised Murphy he would receive only $3,000 credit, as the remaining $16,000 had come from the PCA. About September 8, 1976, Murphy learned from Redland that Redland intended to remove the cattle and sell the same though the parties had not arrived at an agreement as to grazing costs to be allowed to Murphy. Murphy filed and served on September 30, 1976, an agister's lien on the cattle under section 45-1106, R.C.M.1947, claiming the reasonable value of the grazing furnished by him to be $42,730. Murphy claims the calves were removed by Redland from the Johnstone place without Murphy's knowledge or consent to the Valley Vu Feed Lot, Fairview, Montana. Upon learning this, Murphy trailed the remaining cattle from the Johnstone place to his Bluff Creek property. There, Redland came in and removed the remaining cattle, intending to sell them at the Sidney Livestock Auction Company, Sidney, Montana. Murphy filed his complaint in the District Court on October 20, 1976, requesting and obtaining from the District Court a temporary restraining order against the sale of the cattle and praying for $42,730, the amount of his grazing claim against the defendants as damages. However, Redland and Berthelson sold 518 cows, 13 bulls and 47 calves at the Sidney Livestock Market Center on October 20, 1976, for the net sum of $94,969.88. These funds were impounded by the State Brand Inspector because of the agister's lien and the temporary restraining order of the court. An additional 520 calves were held in the Valley Vu Feed Lot.

On October 29, 1976, the parties stipulated if Murphy posted a surety bond in the sum of $20,000 and the defendants, Berthelson and Redland deposited a total sum of $42,730 in a special savings account, subject to the order of the Court, the temporary restraining order could be quashed, the funds from the sale released to E. M. Berthelson and the remaining calves could be sold. Murphy posted a surety bond in that amount provided by Aetna Casualty and Surety Company. Berthelson deposited the $42,730 in the savings account in the First National bank of Glendive, Montana. The remaining cattle were sold, resulting in net proceeds on November 10, 1976 from C & L Cattle Company of $40,168.81 and on November 16, 1976 from Sidney Livestock Market Center the sum of $44,286.15. With these sales, all of the cattle held by the joint venture had been sold.

Also on October 29, 1976, defendants, Redland and Berthelson, filed an answer and crossclaim, denying in essence the allegations of the plaintiff's complaint and inserting a crossclaim against Murphy claiming the wrongful filing of the agister's lien by Murphy and the procuring of the restraining order issued by the Court resulted in an inability to sell the cattle to such an extent that losses were sustained when the cattle were eventually sold.

The case came on for trial before the District Court beginning February 3, 1977. The trial took on the nature of an accounting between the members of the joint venture and an action for damages against Murphy. The District Court entered its findings of fact and conclusions of law on April 29, 1977. In essence, the Court found the joint venture had sustained an operating loss of $31,912.04; it further found the filing of the lien by Murphy had prevented the ordinary sale of calves by reason of which the joint venture sustained a loss of $16,721.04. It also found that Murphy had prevented the ordinary sale of the remaining calves, cows and bulls resulting in a loss to the joint venture of $25,482.04. The total loss the Court found came to...