FALLON COUNTY v BRINDLEY
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No. 83-24 IN THE SUPREPIE: COURT OF THE STATE OF MONTANA 1984 FALLON COUNTY, a political subdivision of Montana, Plaintiff and Respondent, -vsHUGH 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 County's scraper is returned. 17, 1979 until the 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 from separated 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 accident. Commissioner Lang viewed the accident scene two days later. Commissioner Gary Lang to report the 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 renting October the 17, 1980, approximately one scraper to Brindley, the County year after filed suit against Brindley claiming that "the scraper was wrecked and virtually destroyed, and has never been complaint further alleged that returned." "the scraper, before destruction, had a value in excess of $10,000. " The its 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. failed to prove negligent manner The court concluded that the County had the scraper was being tra-nsported in a or that the defendant's transporting the scraper caused the accident. method of 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 Justice, Supreme Court Room 414 Justice Building 215 North Sanders Helena, Montana 59620 CORRECTION. In preparing this opinion for publication, we noted in our verification of titles and citations the matters listed below. Corrections have been made on our copy of the opinion. October 4, 1984 Fallon County v. Brindley, No. 83-24, Sept. 6, 1984 Page 5, line 12 from bottom Mont. at 361-62. . --- 150 Mont. at 261-62 should read 150 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: the lease terminate on the date of the accident? this issue to be determinative. Did We find We need not address the issue of mitigation at this time. Section terminates. 70-1-607 (4), MCA provides: The hiring of a thing terminates destruction of the thing hired. " "When . . . hiring by the This section and predecessor apply to all things hired. its 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 destroyed second test, the Court considered "if the cost of restoration the . . . thing 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 Solich, 150 Mont. at 364, 435 P.2d at statute involved." 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 "sustained it serious separated structural from Brindley's d.amage." The truck and County's complaint alleged that the "scraper was wrecked and virtually destroyed" by the accident. the scraper was not fit Commissioner Lang testified that for use, but investigated the cost of repairs. that he had not 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 necessary. We concur: 4 . d d. @ I Chief Justice LbPD-Q and such proceedings as are
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