author: MR. JUSTICE WORD,

text:
    MURPHY et al., Respondents, v. PATTERSON, Appellant.
    [No. 1253.]
    [Submitted October 30, 1900.
    Decided January 7, 1901.

      Partnership — Dissolution—Accounting — Referee — Findings — Conclusiveness — Reference by Stipulation of Parties — ■ Judgment Roll — Partnership Agreements — Interpretation— Review.

    a. Attorneys in an action for the dissolution of a partnership stipulated that the case should be submitted to a referee, who should have power to take testimony, and report findings thereon, and to state a complete account between the parties, and that the cause, together with such report and testimony, and the books of account of the firm, might be argued before and submitted to the court for its consideration and determination. Held, that the court was not required to enter a formal order setting aside the findings of the referee before proceeding to determine the case on the evidence, findings and reports submitted, since the referee was not authorized by the stipulation to hear and determine the issues, and his findings were advisory only, and not conclusive on the court.
    3. Code of Civil Procedure, Sec. 1141, provides that, when a reference is to report the facts, the findings reported shall have the effect of a special verdict. Held, that where the reference provided that a referee should take testimony, and state a complete account between the parties, but did not authorize him to hear and to determine the issues, his findings cannot be given the effect of a special verdict, since the force to be given to the report of a referee depends not only upon the nature of the action, but upon the terms of the order of reference.
    3. The “finding” of a referee, which Section 1196 of the Code of Civil Procedure provides shall be part of the judgment roll, is the “finding” designated in Section 1140 of the same Code, — that is one upon the whole issue.
    4. In an action for dissolution of partnership and an accounting, evidence reviewed, and held, to be sufficient to sustain the findings of the trial court.

      Appeal from District Court, Choteau County; Dudley Du Bose, Judge.

    Action by James T. Murphy and another against George D. Patterson. From a judgment in favor of plaintiffs, defendant appeals.
    Affirmed.
    Statement of the Case.
    Action for dissolution of partnership and an accounting. Under stipulation of parties, cause was referred to David G. Brown as referee to take testimony, state an account between the partners, and report to the court testimony taken with certain findings of fact thereon. Stipulation further provided that a decree of dissolution might be entered by the court, all objections to such dissolution being waived; that either party might take exceptions to the report of the referee, or to any finding of the referee, the same as if the reference had been made by the court of its own motion; and that the decree or any order of the court in the premises might be made either by the court or the judge in chambers. Thereafter testimony was taken before the referee. To the introduction of any evidence relating to the value of the property of Greenleaf & Co. in July, 1884, plaintiffs objected on the ground that under the agreement of July 1, 1879, made a part of defendant’s answer, defendant was to have for his services for the five years it was in force one-fourth of the profits, and was to purchase a one-fourth interest in the original plant, fixed in such agreement at $12,465.60; and the books of the partnership show that this agreement was carried out, that none of the profits were withdrawn, but were reinvested in partnership assets, and that defendant, not having paid for his interest in the original plant, was charged with $3,095 therefor as an original item, thus leaving the interest of each partner to be determined on the final settlement of the affairs of the partnership. Defendant’s testimony was directed solely to the values of cattle and sheep in 1884, and was admitted subject to the above objection. Defendant introduced no evidence tending in any way to prove the affirmative matters of his answer, nor as to the formation of the partnership, the terms thereof, nor as to his indebtedness to the firm. The other facts m aterial to the questions presented are stated in the opinion.

      Messrs. Walsh c& Newman, and Mr. N W. Toole, for Appellant.
    The case having been referred by stipulation of the parties to a referee of their own choice, to hear, try and determine the issues in the case, such a referee was thereby constituted a special tribunal, and his findings of fact could not be set aside or disregarded by the Court, and a judgment entered inconsistent therewith.
    This case is distinguished from the case of Bradshaw v. Morse, and cases in other Courts, which hold that the findings of a referee are only advisory to the Court. There is a distinction between a case referred by consent of the parties, and a case referred by the stipulation of the parties to refer it, which is sanctioned by the Court. In the first place it is the act of the Court, without the objection, or with the consent of the parties. In the other, it is the direct act of the parties themselves in selecting a tribunal before which the case shall be tried. The decision of that tribunal can not be disregarded by the Court. Walker v. Campbell, 26 Pac. 123; Kirriberly v. Arms, 129 U. S. 512, Shutt Inv. Co. v. City of Pueblo, 54 Pac. 644; Davis v. Schwarts, 155 U. S. 631; D. S. Trust Co. v. Mercantile Trust Co. 88 Fed. 140-152; Peabody v. Jdulps, 9 Cal. 204; Schroeter v. Schweler, 23 Iiun. 230; Farar v. Bernhen, 75 Fed. 136. If it is held that the stipulation of the parties has not any effect upon the reference, and that the reference stands the same as if made by the Court of its own motion, the proceeding of the Court was erroneous.
    Section 1140 of the Code of Civil Procedure provides that the findings of the referee must stand as the findings of the Court, and that judgment may be entered upon them in the same manner as if the action had been tried by the Court. Section 1141 provides that the finding of a referee may be excepted to and reviewed in like manner as if made by the Court, and when the reference is to report the facts, the findings reported have the effect of a special verdict. Whether it be held that the findings of the referee have the effect of the findings of the Court, or of a special verdict, they are sufficient to support a judgment, and judgment should.have been entered accordingly. If the findings of the referee may be reviewed in this case they can only be reviewed in like manner as findings made- by the Court. The Code does not prescribe any manner in which findings of the Court may be reviewed after they are filed except on a motion for a new trial.
    To review the findings of the Court it is necessary to re-examine the issues of fact in the case and that is a new trial. Code of Civil Procedure, Sec. 1170. The findings of a Court, or referee, constitute a decision upon the issues in the case. When a court has given a final decision upon any matter it has no power to set aside or change it except in the cases pointed out by statute. Hayne on New Trial and Appeal, Sec. 216. Whitbeclc v. Montana C. Ry. Co. 21 Mont. 102. The Code only provides for exceptions to findings for a defect therein, or a failure to find on a particular issue. These formal defects, errors, omissions or clerical mistakes, may be corrected, but nothing more. The Code does not give the Court authority to review and reverse its own decision, after such decision is filed. It can set it aside only on a motion for a new trial. It cannot sit as an appellate court to review its own decisions. Hidden v. Jordan, 28 Cal. 301; Ooweng v. Rogers, 31 Cal. 652; Price v. Lynch. 38 Cal. 531; Wunderlin v. Cadogan, 75 Cal. 617; Hayne New Trial & App. Seel 216-217\ Fisher v. Emerson, 50 Pac. 619 (Utah); Sharp v. Walin, 121 Ind. 107; LLamilton v.'Byram, 122 Ind. 283; Levy v. Chittenden, 120 Ind. 37.
    If the Court had tried the case, and made findings of its own, or, if the case had been tried to a jury, and'a special verdict returned, the Court could not disregard its own findings, or disregard the special verdict of the jury, and make other inconsistent findings, and enter judgment on the last findings, contrary to its own previous findings, or the special verdict of the jury. A court cannot ignore its own findings, the findings of a referee, or the special verdict of a jury. Fa-bin v. Collins, 2 Mont. 510. Admitting, for the purpose of argument, that the findings of the referee are only advisory to the Court, and the Court may change, modify or set them aside, yet the action of the Court in this case was erroneous. The findings of the referee have the force and effect of the findings of tne Court or the special verdict of a jury, and are binding and valid until changed, modified or set aside. They are a part of the record; a part of the judgment roll. Code of Civil Procedure, Section 1196. The findings of the referee are certainly valid until set aside by the Court, if the Court has authority to set them aside in this case. The findings made by the Court did not annul them. If the findings made by the Court have any effect, they must be taken in connec tion with the findings of the referee, as additional findings. Then both sets of findings will constitute the findings in this case. Taking the findings altogether, they are. so contradictory and inconsistent, that they do not support the judgment entered in this case, and the judgment is therefore erroneous and against law, and must be reversed. Johnson v. Bielenberg, 14 Mont. 506; Author v. Bryant, 38 Pac. 439; Banks. Miller, 24 Pac. 1047; Latshaio s. Moore, 36 Pac. 342; Langan v. Langan, 89 Cal. 186. In such cases the judgment will be reversed, and a new reference ordered. Smith s. Marsich, 38 N. Y. S. 932. And the findings must be construed most favorably to the appellant. Bonnets. Griswold, 89 N. Y. 122 • Schwingers. Raymond, 83 N. Y. 192; Gonselyeas. Blanchard,-103 N. Y. 222, 8 N. E. 490; Redfleld s. Redfleld, 110 N. Y. 671, 18 N. E. 373; Pappenheimers. M. E. Ry. Co., 7 N. Y. S. 679.
    The so-called “Findings of Fact” by the Court are not findings of fact, but naked legal conclusions. The Court cannot deduce from them any legal consequences, because they are themselves legal conclusions. A finding that one person is indebted to another, or is a creditor of another, or an allegation of indebtedness, is only a conclusion of law, and in a pleading would not raise any issue. Kane s. Rippy, 22 (5re. 299; Smith v. Smith, 7 N. Y. S. 194; Paulson s. Newman, 64 Cal. 290; Ilershfield s. Aiken, 3 Mont. 442; Biggins s. Germaine. 1 Mont. 230; Power s. Gum, 6 Mont. 5; Stewart s. Budd, 7 Mont. 579; Merrigan s. English, 9 Mont. 123; Ohan s. San Francisco, 92 Cal. 437.

      Mr. B. G. Mclntire and Mr. Massena Bullard, for Res- . pondents.
   MR. JUSTICE WORD,

after stating the case, delivered the opinion of the Court.

The first question we will consider is whether or not the court below erred when it disregarded the findings of the referee, and made its own findings of fact and conclusions of law.

Counsel for appellant argue that under the. stipulation entered into between the parties to the action, and by virtue of which the cause was referred, Brown, the referee, was empowered to hear, try, and determine the issues presented, and to make his findings of fact, and report the same to the court; and that under these circumstances the referee became a special tribunal, and therefore ‘ his findings of fact could not be set aside or disregarded by the court, and a judgment entered inconsistent therewith. ’ ’ If this position of appellant were supported by the terms of the stipulations before us, we would be disposed to agree with counsel, and to follow the authorities cited by them. Under the stipulation of February 23, 1894, as we view it, the referee was not empowered to hear, try, and determine the issues, but rather to take the testimony, and report the same, together with his findings of fact thereon, to the court; that he should state an account between the parties; and that, when completed, his examination and report were to be filed, and either party should have the right to bring the same on to be heard before the court or judge upon 10 days’ notice. The language of the stipulation is that the referee shall have power “to take testimony,” and “to state a complete account” between the parties. Nowhere in the stipulation is the referee authorized to ‘hear, try, and determine’ ’ the issues between the parties, as was the fact in a majority of the cases cited by counsel upon this proposition. Thus, in Kimberly v. Arms, 129 U. S. 512, 9 Sup. Ct. 355, 32 L. Ed. 764, we find the parties consented that the case should be referred to a master ‘ ‘to hear the evidence and decide all the issues” between them. So, in Davis v. Schwartz, 155 U. S. 631, 15 Sup. Ct. 237, 39 L. Ed. 289, by consent of parties, the case was referred to a master to hear the causes, and report, not the evidence merely, but his findings of facts and his conclusions of law. And in Shutt Investment Co. v. City of Pueblo, 11 Colo. App. 432, 54 Pac. 644, — an action for damages to real property, —it was agreed that the finding and report by commissioners selected by the parties of the amount of damages sustained, if any, should be final and conclusive.

Under Section 1130 of the Code of Civil Procedure “a reference may be ordered upon the agreement of the parties, filed with the clerk or entered in the minutes: (1) To try any or all of the issues in an action or proceeding, whether of fact or law, and to report a finding and judgment thereon: (2) To ascertain a fact necessary to enable the Court to determine an action or proceeding. ’ ’ If the reference was made under the authority of this Section the words of the stipulation and the interpretation given it by the parties indicate that the purpose of the reference was not to have the issues tried, and to have reported findings, and a judgment thereon, but rather to ascertain certain facts necessary to enable the Court to determine the action. But, in our opinion, the reference more properly falls under the provisions of Section 1131 of the Code of Civil Procedure, though made with the consent of the parties.

Weight is given to this construction by the stipulation of February 24, 1897, wherein the parties agreed “that this cause, together with the reports of the referee herein, and the testimony taken before the referee, and the books of account of the firm sought to be dissolved, may be argued and submitted to said court at the present term thereof for its consideration and determination, ’ ’ etc.; thus, in effect, declaring that it was not the referee, but the Court, which was to consider and determine the issues. Authority for such interpretation of these agreements of parties is found in Bradshaw v. Morse, 20 Mont. 214, 50 Pac. 53. In that case — an action for an accounting. — -the court, of its own motion, referred the cause to a referee to take the testimony of the witnesses, to state an account between the parties, and to report the same to the court, with his findings thereon. There, as here, it was ai’gued that the whole-case was given to the referee fox-determination, “and that, as the whole issue was submitted by-order of reference to the refex-ee, the findings of the referee became the findings of the court, and that the court could not modify or correct the report of the referee except on motion for a new trial; in other words, that the court was bound to enter j udgment in accordance with the findings of the referee, and could only disapprove, correct, or modify the same on a motion for new tx-ial after judgment. ” This Court held, however, that under the terms of the order the referee was given “no authority to tx-y and determine the whole issue or case. He was not clothed with the power of a tribunal to that extent by the terms of the order of reference.” “Under the terms of the order of reference, the findings which the referee was authorized to make to the court could only be advisory, ’ ’ See, also, Basey v. Gallagher, 20 Wall. 670, 22 L. Ed. 452; Quinby v. Conlon, 104 U. S. 420, 26 L. Ed. 800; Caruth-Byrnes Hardware Co. v. Wolter, 91 Mo. 484, 3 S. W. 865; Bremmerman v. Jennings, 101 Ind. 253; Best v. Pike, 93 Wis. 408, 67 N. W. 697. And so, in the case before us, under the order of reference, of which the first stipulation of the parties was a part, the referee had no power to decide any of the issues made by the pleadings. His findings were, therefore, not conclusive upon the coixrt, bixt advisox-y merely; and, being advisory, it was not necessary for the court to make a formal order setting aside the findings of the referee before it could proceed to make findings of its own; and by taking such action the court, in effect, set aside the conclusions drawn by the referee from the testimony.

All the evidence, both the original and supplemental reports of the referee, together with his findings and the objections and exceptions of the parties thereto, were before the court for consideration and determination, and, in so far as any action of the court below was concerned, it was as if the case had been argued and submitted to the court upon the pleadings and evidence in the first instance. The court was not bound by any act of the referee. With all the facts before it, and with the findings of the>referee advisory only, we are cited to no decision which, under an order of reference similar to the one before us, holds that the Court in an equity case must formally reject or adopt as its own the findings of a master or referee. On the other hand, where the purpose of the reference was — as we hold it was in this case — to have the referee report certain facts, or the facts upon certain issues for the information of the Court, so that it could intelligently act and adjudge the rights of the parties, or where the matter referred to the referee is collateral to the main issue, — as, for instance, to state an account between the parties, — then the findings of the referee are not binding, but advisory merely, and so may be disregarded by the Court in reaching its decision upon the merits. (Bradshaw v. Morse, supra; Kimberly v. Arms, supra; Caruth-Byrnes Hardware Co. v. Wolter, supra; Erisman v. Kerwin, 8 Okl. 92, 56 Pac. 858; Field v. Romero, (N. M.) 41 Pac. 517; Palmer v. Palmer, 13 How. Prac. 363; Muhlenbrinck v. Pooler, 40 Hun. 526; Harris v. San Francisco Sugar Refining Co. 41 Cal. 404.)

Counsel for appellant say that the findings of the referee, under Section 1141 of the Code of Civil Procedure,, have the force and effect of a special verdict. We are of opinion that the reference contemplated by this section is one where the referee is called upon to hear and try the issue and report the facts thereon, and not one like that in the case at bar, where the referee was not to try and determine, but to take the testimony, and report the same, with certain findings thereon, for the information of the Court. Section 1141, supra, is to be read in the light of those sections of the Code immediately preceding. And, even when the referee is to report the facts, the force to be given to such report must depend, not only upon the nature of the action, but upon the terms of the order of reference, for ‘ ‘the terms of the order of reference determine the scope of the referee’s authority. ’ ’ (Bradshaw v. Morse, supra.) Entertaining these views, we cannot give to Section 1141, supra, the broad construction placed upon it by counsel for appellant.

Appellant’s counsel next contend that the findings of the referee are, by Section 1196 of the Code of Civil Procedure, made a part of the judgment roll. The “finding” referred to in this Section of the Code is the “finding of the referee” designated in Section 1140 of the Code of Civil Procedure, that is, one upon the whole issue. (Faulkner v. Hendy, 103 Cal. 15, 36 Pac. 1021.)

Holding, as we do, that the court was not required to enter a formal order setting aside the findings of the referee before proceeding to determine the case upon the evidence, findings, and reports submitted, we have before us but one set of findings, — those of the court below,- — and .these we will now consider.

inasmuch as counsel entertain widely different views in regard to the terms of the partnership formed in July, 1884, an examination of the conditions then existing becomes material. Under the agreement of July 1, 1879, to continue in force for five years from date, Greenleaf & Co. contracted to give the appellant, Patterson, one fourth of the profits of their live stock business. In consideration thereof Patterson was to devote his entire time and attention to the care and management of this business. Out of his share of the profits he was to buy and pay for a one-fourth interest in the sheep and other property belonging to said firm, the basis of purchase being the value of the property on July 1, 1879, stated in the agreement to be §12,465.60. Patterson was to pay for said one-fourth interest as rapidly as any of the profits of the business were realized and determined. Greenleaf & Co. were to furnish Patterson a sum not exceeding §25 per month; such sum was to be an advance to him, and was to be paid back by him out of his share of the profits as they should be determined. On all sums furnished him in excess of §200 per annum Patterson was to pay the current rate of interest. Five years from the date of the agreement a final settlement of all accounts was to be had, and final profits were to be arrived at, the basis of calculation being- the value of the company property at that time. All profits arising from the business during the five years covered by the agreement were to be reinvested in live stock. The agreement further provided that a settlement of all accounts and a statement of the business of the firm should be had on the 1st day of July of each year, oías soon thereafter as practicable.

At the hearing before the referee the defendant offered no evidence in support of the allegations in his answer. His testimony, and that of the witnesses called in his behalf, was directed solely to the question of the value of the company property in 1884. John T. Murphy, one of the plaintiffs, upon matters other than the value of the property in 1884, testified, in substance, as follows: “Patterson was familiar with the books. In 1884, Patterson, being unable to pay for one-fourth of the original plant, it ($3,095) was charged to him by agreement: the other partners agreed to carry it on the books as a debit against him; it was at his request and his agreement and consent. The contract expired July 15, 1884, and was not completed in the particular that the plant was wound up, and sold out, and valued, and profits arrived at, but simply by agreement the business was continued, he taken in as a partner, and given one-fourth of the plant; he was paying for one-fourth of the original plant, he being taken in as a partner, and acquiring one-fourth of the whole plant by paying for one-quarter of the original plant. The profits remained intact; nothing was taken out by any member of the firm; and we agreed to loan him the amount on the books to buy one-fourth of the original plant. The books were written upon that basis, and the business continued under that agreement; and the further agreement was entered into that he was to have $100 per month for his personal attention to the business. The daily detail books were kept by Mr. Patterson, and they were written up at the end of the year, and copied off by my bookkeeper. Patterson had full knowledge of and participated in it. The books were written up from the original entries, all except the closing entries,- — the computation of interest, or something cf that kind, at the close of the year. He was usually present at the annual settlements. The subject of interest was discussed between us; we agreed to carry him for the amount he owed on the purchase price of the original plant at 10 per cent. Any other sums he was to pay 12 per cent. on. This was by agreement with Patterson. The books have been kept in harmony with the agreement. A settlement and adjustment of the accounts was had, and a trial balance struck with Patterson, and with his concurrence and assistance, at least once a year; I representing myself, Chipman, and Greenleaf. This testimony applies to each of the annual statements and trial balances that appear in the books. ” It further appeared on the cross-examination of the witness Murphy that no settlement was had in 1884, since this would have required the selling out of the property of Green-leaf & Co. and the winding up of the business; that Patterson never was given credit in dollars and cents for his five years’ service as a matter of bookkeeping, but that Patterson certainly understood that he became possessed of one-fourth of all the property of the concern after he was charged with one-fourth of the value of the property as of 1879. The books of the company, as kept by Patterson himself, show that yearly settlements of his account with the firm of George D. Patterson & Co. were had, and that the amount due from him to the firm, while only $6,040.19 in July, 1884, was the sum of $15, 967.93 on January 27, 1894,

The referee, after hearing the testimony and examining the books of the partnership, found that the said partnership owed George D. Patterson the sum of $8,257.70 with interest from January 27, 1894, the date the receiver of the partnership property was appointed; that no settlement was ever had between the parties of the transactions under the contract of 1879, nor was there ever any balancing of accounts under the partnership formed and existing after the termination of said contract. Upon the matter being referred back to the referee for a further report, he found, in addition to the above findings, that the co-partnership was indebted to John T. Murphy in the sum of $677.79,' and to Henry L. Chipman in the sum of $52.49; that the interests of the several partners were: Murphy one-half, Patterson one-quarter, Chipman one-quarter; that Murphy and Chipman were not entitled to have credited to them their respective shares of the net profits of the business at the end of the five years mentioned in the contract of 1879, for the reason that said contract provided that all profits shall be reinvested in live stock, and that under said contract Patterson was entitled to a credit of one-quarter of said profits at that time as his salary as superintendent; that the quarter of the profits thus appropriated became expenses, and so could not be reckoned among the profits. The court, however, refused to accept or adopt the findings of the referee either as to the indebtedness of the firm to Patterson, or as to the absence of any settlement between the partners, or as to the credit given Patterson for a one-quarter of the profits as salary; but, on the other hand, found that the partnership was formed in 1884; that Murphy bought out the interest of Green-leaf in 1888; that, in addition to his one-fourth interest in said partnership, defendant was to receive $100 per month for his personal attention to the business of the firm; that at the time said co-partnership was originally formed each partner contributed one-fourth of the assets; that defendant Patterson contributed his one-fourth in the shape of the, profits coming to him under the contract of 1879 and one-fourth of the original plant, such one-fourth being $3,116.40, for which he was debited on the books of the co-partnership, he not having paid for same; that, in addition to such debit of $3,116.40, defendant Patterson also owed the partnership at the time it was formed in 1884 the further sum of $2,941.55 for moneys theretofore advanced to him, which sum was also charged against him on the books of the firm. The court further found that each year from and after the formation of the partnership a settlement and adjustment of the business of the previous year was had between Patterson and Murphy; that at the times these yearly settlements occurred Patterson would be debited with what he had drawn out of the business, and a balance ascertained in the accounts of Patterson and the other partners with the partnership; that on the 27th day of January, 1894, Patterson was indebted to said firm in the sum of $15,967.93, together with interest on $12,872.31 thereof from said date at the rate of 12 per cent, per annum, with annual rests, and interest on the sum of $3,095.62 thereof from said date at the rate of 10 per cent, per annum, with annual rests, — the principal and interest amounting on March 13, 1897, to the sum of $22,515.63, wholly unpaid. As a legal conclusion the court found said Patterson to be indebted to said firm in the sum of $22,515.63 on March 13, 1897, and that said sum constituted a part of the assets of said firm. The other findings and conclusions of the court we need not now consider.

Counsel for appellant attack these findings and conclusions on the ground, among others, that they are unwarranted by the facts now before us. After a careful consideration of the whole record, we cannot agree with counsel, but are forced to the conclusion that the deductions drawn by the court below from the evidence are sound, and in accordance with the acts and intention of all the parties. The primary error in the calculations of the referee, and to which his mistake in finding that there was due from the firm to Patterson the sum of $8,257.70 may be attributed, was in giving Patterson credit for the sum of $8,695.76 as of the time the partnership was formed, to wit: July 15, 1884. Appellant says that under the agreement of 1879 he was to have one-quarter of the profits at the end of five years. This is true, but it is also true that he was to buy a quarter interest in the original plant at a stated price, that he was to pay for this interest out of the profits as they were realized and determined, and that at the end of the five years — the life of the contract — a final settlement of all accounts was to be made, and final profits arrived at and determined. The evidence shows that at no time during this five-year period were any of the profits of the business determined, nor did Patterson pay any part of the amount he owed for his quarter interest in the original plant, or of the moneys that bad been advanced to him. And when the contract of 1879 was at an end, although under its terms he was entitled to one-quarter of the profits which had accrued, Patterson nowhere claims he asked for the settlement of accounts provided for in the contract. Had he done so, and had the property of the firm been sold, and the moneys realized therefrom divided, he would have had a balance in his favor. But another course was adopted. A new partnership was formed; of this new partnership Patterson became a member. Of its profits he was entitled to one-fourth under the contract of 1879, and of its property he became a quarter-owner by buying such interest from the other members of the firm, who were the sole owners of the original plant. This quarter interest in the plant Patterson did not pay for in cash. With the consent of all the parties, the agreed value thereof was charged against him on the books of the company. With this charge against him, and with the debit for moneys theretofore advanced to him, Patterson became a member of the firm of George D. Patterson & Co. When the last-named firm was formed, appellant says that, in addition to the quarter interest in the original plant, he was entitled to a quarter-interest of the profits then existing and, after this interest in the profits had been set aside and credited to him, to a quarter interest in the profits then remaining. The evidence, the acts of the parties, the statements contained in the books, the annual settlements participated in by Patterson, are all against this contention. The testimony of Murphy is clear and explicit on this point,, and we refer to it without further comment. When Patterson took charge of the books of the firm, or at least when he was present at the first yearly settlement and adjustment of the accounts of the partnership, he must then have known that upon the partnership boobs he was debited with the amount of.money advanced to him, and with the value of his interest in the original plant. If, as he now claims, he should have been credited with a quarter of the profits-existing in 1884, why did he not at that time insist upon such credit? Or, if it was the understanding of the parties that out of his share in the profits he was to pay what was due from him to the firm, and be given credit for any balance in his favor, Patterson was in a position to ask that this be done. But for ten years the books, of which he had knowledgé, because kept by him, were permitted to show a charge against himself, bearing interest, increasing with each year, and yet nowhere do we find, either in his answer, or his testimony, or on the books, any credit claimed by Patterson other than that of being a quarter owner in the firm property. The fact that after the partnership of 1884 was formed Patterson was allowed and received $100 per month for his services as manager, together with provisions for himself and family, tends to bear out the testimony of the witness Murphy in effect, that the partnership of 1884 was a new agreement, and that no attempt was made to carry out all the terms and conditions of the contract of 1879. Another circumstance leading to the same conclusion is this: In 1884 it is admitted that Green-leaf & Co. owned the whole of the original plant. Under the contract of 1879 the money Patterson was to pay for his one-fourth interest therein would have gone to the members of the firm of Greenleaf & Co. It appears from the evidence, however, that it was agreed the value of this quarter interest should be charged to Patterson on the books of the new firm, instead of remaining a debt due to the members of the old firm of Greenleaf & Co., — a course manifestly to the advantage of Patterson, since, under the plan pursued, he is only called upon to pay three-quarters of the purchase price, with interest, of his quarter interest in the original plant.

Unaided by the facts before us, it would be difficult to give force and effect to all the terms of the contract of 1879, since there is a conflict between certain of its provisions, while others, as we have shown, were never acted on or carried out. In the light of events subsequent to the formation of the contract of partnership of 1884, we cannot but feel that the findings of the court below are in accord with the evidence and understanding of the parties, and so will not be disturbed on this appeal.

The other errors urged not being sufficient to warrant a reversal, the judgment and order appealed from are accordingly affirmed. Affirmed.

Mr. Justice Pigott, having been of counsel, did not hear the argument and takes no part in this decision.


source: Caselaw Access Project

author: MR. JUSTICE WORD

license: Public Domain

text:
    MURPHY et al., Respondents v. PATTERSON, Appellant.
    [No. 1298.]
    [Submitted October 30, 1900.
    Decided January 7, 1901.]

      Partnership — Receiver’s Sale— Confirmation — Appeal — Review — Supersedeas.
    1. Where a decree determining partnership accounts is rendered after the dissolution of the firm, and the receiver therefor is thereafter ordered to sell the partnership property, an appeal from an order confirming such sale does not raise any question concerning the order of sale, since such order is a special order, made after final judgment, from which an appeal is authorized by the Code of Civil Procedure.
    2. An appeal from a final decree in an accounting between partners after an order dissolving the firm does not devest the court of the power to order the receiver to sell the partnership property, and to confirm such sale, since the appeal bond, though operating as a supersedeas, only stays the action of the court as to the matters included in the judgment, which does not embrace the disposition of the partnership property.
    3. It is not the province of a court of equity through its receiver to conduct the business of a co-partnership.
    4. Under Code of Civil Procedure, Sec. 778, requiring the court to disregard any defect in the proceedings which does not affect the substantial rights of the parties, an or. der confirming a receiver’s sale of partnership property will not be set aside on an appeal therefrom, where it is not shown that the property was not sold at its full value, or that the appellant was prejudiced thereby.

      Appeal from District Court, Chouteau County/ Dudley Du Rose, Judge.

    Suit by John T. Murphy and others against George D. Patterson for the dissolution of a partnership and for an accounting. From an order confirming a receiver’s sale of partnership property, defendant appeals.
    Affirmed.

      Messrs. Walsh <& Newman, and Mr. E. W. Toole, for Appellant.

      Mr. Massena Bullard, and Mr. IE G,. Mclntire, for Respondents.
   MR. JUSTICE WORD

delivered the opinion of the Court.

Appeal from an order confirming sale of partnership property. Sale was by receiver under an order of sale made after final judgment. The order of sale and the order appealed from were made in the case of Murphy v. Patterson, (this day decided), ante p. — , 63 Pac. 375.

No appeal was taken from the order of sale, which was an appealable order, since it was a special order made after final judgment. (Code of Civil Procedure, Section 1722, subsec. 2.) In the absence of such appeal, questions properly presentable on an appeal from the order of sale cannot now be considered. (Code of Civil Procedure, Section 1720.) This holding disposes of the material questions raised on this appeal.

An examination of the principal case shows that the court, with the consent of parties, had made an order dissolving the partnership. An accounting was necessary to determine the interests of the parties in the partnership property. This property was in the hands of a receiver,- — was in the custody of the court. After the court had made its findings, and rendered judgment, an appeal was taken from such judgment to this court. Conceding that the bond on appeal in this case operated as a supersedeas, the only effect of the appeal was to stay action of the court below as to those matters included in the judgment. In all other matters wherein the rights of the parties under the judgment would not be affected the court below was left'free to act. (State ex rel. B. & M. C. C. & S. Mining Co. v. Second Judicial District Court, 22 Mont. 211, 56 Pac. 281.)

When the appeal from the judgment in the principal case was taken to this court, the partnership property was still in the hands of the court through its receiver. The object and purpose of appointing a receiver of the partnership property is to preserve the firm property until the cause can be determined. The court, through its officer, the receiver, has charge of the firm assets, not in behalf of either party, but for the common benefit of all. (Wolbert v. Harris, 7 N. J. Eq. 605.) Nor is it the province of a court of equity through its receiver to conduct the business of a co-partnership. “Its legitimate province is to adjust the rights and settle the disagreements of parties growing out of such transactions. ’ ’ (Allen v. Hawley, 6 Fla. 164; Wolbert v. Harris, supra; Jackson v. DeForest, 14 How. Prac. 81.)

The court below, having appointed a receiver to take possession of the property, was vested with the power of selling the property in the hands of the receiver when such a course became necessary to preserve the interests of all the parties. (Allen v. Hawley, supra; Jackson v. DeForest, supra] Forsaith Mach. Co. v. Hope Mills Lumber Co. 109 N. C. 580, 13 S. E. 869.)

In the matter before us we have seen that the partnership had been dissolved; that an accounting had been ordered, and under it the rights of the parties in the assets of the firm determined. No matter what the respective interests of the several partners in the partnership property should finally be adjudged to be, a sale of all the assets of the firm had to be made at some time, so that the money realized therefrom might be divided in accordance with the determined interests of the parties. From aught that appears in the record before us, the court below, acting within the powers vested in it as a court of equity, and with due regard for the best interest of all the parties, ordered the receiver to sell the partnership property, and to hold the proceeds of such sale until the rights of the partners therein should finally be adjudicated. Nowhere in the record is it intimated that the amount realized from the sale of the partnership property was not the full value thereof. Nor was it urged as an objection to the confirmation of the sale; nor does the record show that in directing the sale of the firm property and the retention of the proceeds until the interests of the parties therein should be ascertained the rights of the appellant were prejudiced in the slightest degree. Appellant does not presume to say that, if another sale of the partnership property were ordered, he would reap any benefit whatever. But, since he has not appealed from the order of sale, appellant must rely for a reversal on what he claims was a failure of the receiver in making the sale to conform in all respects to the order of the court directing the sale of the firm property. No error in this regard that we can now consider in any way affects the substantial rights of the appellant. This alone would warrant this court in affirming the order appealed from. (Code of Civil Procedure, Section 778; Cunningham v. Bostwick, 7 Colo. App. 169, 175, 43 Pac. 151.)

Holding that the order of sale cannot now be complained of, and that there was no error affecting the substantial rights of the parties in the proceedings had under such order, the order appealed from is accordingly affirmed.

Affirmed.

Mr. Justice Pigott, having been of counsel, did not hear the argument, and takes no part in this decision.


author: JUSTICE SHEEHY

text:
    In the Matter of the ESTATE OF LOUIS WARREN STINSON, a/k/a Louis W. Stinson, Deceased.
    No. 89-049.
    Submitted on Briefs Sept. 15, 1989.
    Decided Nov. 15, 1989.
    782 P.2d 78.

      William B. Sherman, Conrad, for appellant.
    Gale R. Gustafson, Conrad, for respondent.
   JUSTICE SHEEHY

delivered the Opinion of the Court.

Appellants Larry Stinson, Verna Stinson Hudson, and Echo Joy Stinson Braff, initiated suit in the District Court of the Twelfth Judicial District, Chouteau County, to contest the will of their late father, Louis Warren Stinson. Personal Representative and respondent, Grace C. Stinson, successfully moved to dismiss the action for failure to prosecute, and summary judgment was entered. Appellants moved to alter or amend the judgment pursuant to Rule 59(g), M.R.Civ.P., and the preyious order of September 22, 1988, dismissing the action was nullified and revoked. Appellants now appeal the initial order of dismissal to protect their rights, in the event the District Court order of November 21,1988 was made at a time when the Court lacked jurisdiction. We dismiss the appeal for lack of jurisdiction.

The central issue in this case is whether the District Court had jurisdiction to nullify and revoke its September 22, 1988 order dismissing the action for failure to prosecute.

Louis Warren Stinson died on April 15, 1984. Respondent Grace Stinson, his wife of 23 years, applied for and was appointed Personal Representative of the estate, pursuant to the deceased’s Will of April 18, 1970. The Will devised all of his estate to Grace Stinson, except for $100 to each of Louis Stinson’s children from a previous marriage (contestants/appellants).

Grace Stinson initiated informal probate proceedings on May 3, 1984. Contestants filed petitions for revocation of appointment of the Personal Representative and to deny probate on February 28, 1985.

Grace Stinson filed her petition for determination of testacy, determination of heirs, and for settlement and distribution of the estate on November 11, 1984. Hearing on the matter was set for March 26, 1985, but was continued indefinitely on that date. In that order, the court commanded counsel to “get together and work up a pre-pretrial agreement as to deadlines, exchange of exhibits, agreed facts, trial dates available and other matters agreeable.”

Correspondence between counsel included in the record indicates that contestants sought a settlement of $105,000, to be divided between them. Counsel for Grace Stinson indicated her refusal to such a settlement, and advised that a motion for summary judgment was forthcoming if contestants did not take some action in the matter.

Grace Stinson filed a motion for summary judgment on March 31, 1986. Contestants moved to vacate the hearing on the motion, and moved for a pretrial hearing.

The hearing on the motion for summary judgment was set and subsequently continued on three occasions. These extensions of time were granted to accommodate the production of telephone records of contestant Joy Stinson Braff. These records had been requested to substantiate claims of Joy Braff that she had, over the years, attempted to maintain contact with her father.

From the August 4, 1987 order enlarging time, until July 18, 1988, no motions were filed and no hearings on the matter were held. On July 18,1988, Grace Stinson moved to dismiss the contest for failure to prosecute. Memoranda were submitted, and on September 22, 1988, the court granted Grace Stinson’s motion to dismiss for lack of prosecution. Notice of entry of judgment of dismissal was filed on September 30, 1988.

Contestants filed their petition for reconsideration (hereinafter referred to as a Rule 59(g), M.R.Civ.P. motion to alter or amend a judgment) on October 17, 1988. Contestants stated in an accompanying memorandum that they had not been sleeping on their rights, that the motion for dismissal was filed on July 18, 1988, less than two years after the August 20, 1986 affidavit of Joy Stinson Braff.

The court concurred with the contestants and granted the motion to alter or amend the dismissal order of September 22,1988, thereby nullifying and revoking that order.

Contestants now appeal the September 22, 1988 order of dismissal “to protect the rights of contestants in the event the District Court order of November 21, 1988 denying the motion for dismissal was made at a time when the Court did not have jurisdiction.”

Rule 59(g), M.R.Civ.P., states in part:

“Motion to alter or amend a judgment. A motion to alter or amend a judgment shall be served not later than 10 days after the service of the notice of entry of the judgment . . . .”

This Court has steadfastly held the district courts to a strict interpretation of this rule and “no judge may disregard the requirement as set forth in Rule 59.” Cain v. Harrington (1973), 161 Mont. 401, 506 P.2d 13?5. Proper application of Rule 59(g) clearly prohibits the granting of requested relief when the motion is not timely served. McDonald v. McDonald (1979), 183 Mont. 312, 599 P.2d 356.

The District Court issued the order of dismissal on September 22, 1988. Notice of entry of judgment was served on September 30, 1988. Contestants did not file their Rule 59(g) motion to alter or amend judgment until October 17, 1988. Even adding an additional three days as provided by Rule 6(e), M.R.Civ.P., the motion should have been filed by October 13, 1988. Because it was filed too late, the trial court did not have jurisdiction to hear or determine the motion to amend the judgment. Accordingly, the District Court’s order of November 21, 1988 is a nullity and cannot stand. O’Connell v. Heisdorf (1982), 202 Mont. 89, 656 P.2d 199; Matter of Estate of Gordon (Mont. 1981), [_Mont__,] 628 P.2d 1117, 38 St.Rep. 887.

In addition, because the motion to amend the judgment was filed too late, the time for filing notice of appeal was not suspended. Notice of appeal was filed on November 29, 1988, two months after entry of judgment, well beyond the 30 day time limit provided in Rule 5, M.R.App.Civ.P. Absent a timely notice of appeal, this Court does not acquire jurisdiction to determine an appeal on the merits. Price v. Zunchich (1980), 188 Mont. 230, 612 P.2d 1296; O’Connell, supra. The order of September 22, 1988 dismissing for failure to prosecute therefore remains in effect and is no longer appealable.

Appeal dismissed.

JUSTICES HUNT, HARRISON, McDONOUGH and WEBER concur.


author: JUSTICE WEBER

text:
    STATE EX REL., UNITED STATES FIDELITY AND GUARANTY COMPANY, Relator, v. THE MONTANA SECOND JUDICIAL DISTRICT COURT, Silver Bow County; and the Honorable Arnold Olsen, Presiding Judge, Respondent.
    No. 89-178.
    Submitted Sept. 25, 1989.
    Decided Nov. 15, 1989.
    As Amended on Denial of Rehearing Jan. 4, 1990.
    783 P.2d 911.

      Robert J. Emmons argued, Great Falls, for relator.
    Ross P. Richardson argued, Butte, for respondent.
    Robert F. James argued, James, Gray & McCafferty, Farmers Union Mut. Ins., Nat. Ass’n of Independent Insurers, Nat. Farmers Union Property & Cas. Co., Great Falls, Montana, Randy J. Cox argued, Boone, Karlberg & Haddon, Montana Defense Trial Lawyers, Missoula, William Conklin argued, and Allen P. Lanning, State Farm Mut. Auto Ins. Co., Great Falls, for amicus curiae.
   JUSTICE WEBER

delivered the Opinion of the Court.

This petition for writ of supervisory control arises from an order by the District Court of the Second Judicial District, Silver Bow County, Montana, ordering United States Fidelity and Guaranty Company (USF&G) to produce its entire claims file, including production of letters between USF&G and its attorney. USF&G seeks the writ. We accept jurisdiction, vacate the order of the District Court, and remand for entry of an appropriate protective order.

The issues presented for our review are:

1. Is issuance of a writ of supervisory control appropriate regarding a motion to compel discovery?

2. Is correspondence between USF&G and its attorneys, which occurred after litigation was commenced, privileged from disclosure in a bad faith action filed after resolution of the underlying claim?

The facts giving rise to this case began on June 11, 1986, when a truck owned by Gray Rock Trucking, an insured of USF&G, ran off the road, down an embankment, and collided with the home of John and Sharlene Montoya. This occurred in Butte, Montana.

The house was an older home in which Mrs. Montoya had lived all her life. The Montoyas had done extensive remodeling. As a result of the impact, the house was knocked off its foundation, the foundation was cracked, and support beams were disturbed. The Montoyas had to move out of their house.

A claims adjuster, Mike McNabb, investigated the accident for USF&G. Additionally, USF&G retained the law firm of Gough, Shanahan, Johnson, and Waterman to represent1 its insured, Gray Rock Trucking, in this matter. In attempting to settle the damage claim there were disputes over inspection and appraisal of the house. The Montoyas hired an attorney, Patrick McGee. Settlement discussions between Mr. McGee and counsel for USF&G began in the fall of 1986 and the Montoyas filed the damage action on March 25, 1987. That claim was settled December 17, 1987.

On April 25, 1988 the Montoyas filed the present action based on the Unfair Trade Practices Act, § 33-18-201(2)(3) and (6), MCA, which states:

“Unfair claim settlement practices prohibited. No. person may, with such frequency as to indicate a general business practice, do any of the following:
“(2) fail to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;
“(3) fail to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;
“(6) neglect to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear;”

The complaint alleges that USF&G failed in its statutory duty to “acknowledge and act reasonably promptly” and that it failed to adopt and implement reasonable standards for prompt investigation of claims. It further alleges that USF&G acted fraudulently, oppressively, maliciously and outrageously toward the Montoyas. The damages requested include general, special, and punitive.

On April 25, 1988, the Montoyas requested that USF&G produce its entire claims file, including “all written communications or memoranda of communications between the Defendant and its attorney.” Defendants moved for a protective order asserting the attorney-client privilege and work product rule as to five letters. However, two of these letters have been produced by defendant, leaving three letters presently at issue. The three letters at issue are communications from the Gough, Shanahan, Johnson and Waterman firm to USF&G. These letters were written April 12, August 11, and December 10, of 1987, after the damage action was filed. In the motion for a protective order, USF&G offered to produce the documents for in-camera review by the District Court. However, the court did not review the documents. Following oral argument and consideration of briefs, the District Court denied USF&G’s motion for a protective order. USF&G petitions this Court for a writ of supervisory control, requesting that these letters be protected.

I

Is issuance of a writ of supervisory control appropriate regarding a motion to compel discovery?

The standard for issuance of a writ has been stated as follows:

“Supervisory control is proper to control the course of litigation when the lower court has made a mistake of law or willfully disregarded the law so that a gross injustice is done and there is no adequate remedy by appeal; also, to prevent extended and needless litigation.”

Continental Oil v. Elks Nat. Foundation (Mont. 1989), [235 Mont. 438,] 767 P.2d 1324, 1326, 46 St.Rep. 121, 123. See also Rule 17(a), M.R.App.P., stating that:

“The supreme court is an appellate court but it is empowered by the constitution of Montana to hear and determine such original and remedial writs as may be necessary or proper to the complete exercise of its jurisdiction. The institution of such original proceedings in the supreme court is sometimes justified by circumstances of an emergency nature, as when a cause of action or a right has arisen under conditions making due consideration in the trial courts and due appeal to this court an inadequate remedy, or when supervision of a trial court other than by appeal is deemed necessary or proper.”

Although interlocutory review of discovery orders is not favored, State ex rel. Guar. Ins. v. Dist. Court (Mont. 1981), [_ Mont._,] 634 P.2d 648, 38 St.Rep. 1682, the writ will issue in an appropriate case. See, e.g., State ex rel. Burlington Northern v. Dist. Ct. (Mont.1989), [239 Mont. 207,] 779 P.2d 885, 46 St.Rep. 1625 (writ issued because an order placed a party at a significant disadvantage in litigating the merits of a case); Kuiper v. Dist. Court (Mont. 1981), [_ Mont. _,] 632 P.2d 694, 38 St.Rep. 1288 (writ issued to determine whether district court properly granted a protective order); Jaap v. Dist. Court of Eighth Judicial Dist. (1981), 191 Mont. 319, 623 P.2d 1389, 38 St.Rep. 280 (writ issued where district court exceeded its jurisdiction by allowing defendant’s attorney to privately interview plaintiffs physicians). A case by case analysis must be employed in determining whether supervisory control should be accepted. State ex rel. Deere and Co. v. Dist. Court (1986), 224 Mont. 384, 730 P.2d 396.

In the present case the District Court has ordered production of communications which clearly implicate the attorney-client privilege. Whether these are discoverable in the context of bad faith insurance litigation is an issue of first impression in Montana. Defendants have exhausted their remedies in District Court. We have examined the three letters and conclude that if USF&G. is required to disclose these letters the harm would be irreparable and the remedy of appeal inadequate. We conclude that issuance of the writ is necessary in this case.

II

Is correspondence between USF&G and its attorneys, which occurred after litigation was commenced, privileged from disclosure in a bad faith action filed after resolution of the underlying claim?

The District Court ordered production of letters written by the Gough firm to the insurer, USF&G. We begin by establishing that these communications are within the context of an attorney-client relationship. It is well established that the attorney hired by the insurer to represent its insured, actually is representing both the insurer and the insured. See, e.g., American Mutual Liability Ins. Co. v. Superior Court (1974), 38 Cal.App.3d 579, 113 Cal.Rptr. 561, 571-72; Rogers v. Robson, Masters, Ryan, Brumund, Etc. (1979), 74 Ill. App. 3d 467, 392 N.E.2d 1365, 1370; Longo v. American Policyholders’ Ins. Co. (1981), 181 N.J. Super. 87, 436 A.2d 577, 579. This concept of dual or joint representation has been widely acknowledged, and sanctioned by the courts. In Jessen v. O’Daniel (D.Mont. 1962), 210 F.Supp. 317, Judge Jameson stated:

“Under an insurance contract, however, the insurer initially employs the attorney to represent the interests of both the insured and the insurer. (Emphasis in original).”

Jessen, 210 F.Supp. at 331-32.

We approved of this statement by Judge Jameson in Safeco Ins. Co. v. Ellinghouse (1986), 223 Mont. 239, 252-53, 725 P.2d 217, 226, and implicitly acknowledged this commonality of interest. Absent a conflict of interest, the attorney hired by the insurance company to defend its insured, represents both. The letters at issue, therefore, written by the Gough firm to USF&G were attorney-client communications.

Communications between an attorney and the client have traditionally been privileged from disclosure:

“The attorney-client privilege is the oldest of the privileges for confidential communications known to the common law. 8 J. Wig-more, Evidence § 2290 (McNaughton rev. 1961). Its purpose is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice. The privilege recognizes that sound legal advice or advocacy depends upon the lawyer’s being fully informed by the client. As we stated last Term in Trammel v. United States, 445 U.S. 40, 51 [100 S.Ct. 906, 913, 63 L.Ed.2d 186] (1980): ‘The lawyer-client privilege rests on the need for the advocate and counselor to know all that relates to the client’s reasons for seeking representation if the professional mission is to be carried out.’ And in Fisher v. United States, 425 U.S. 391, 403 [96 S.Ct. 1569, 1577, 48 L.Ed.2d 39] (1976), we recognized the purpose of the privilege to be ‘to encourage clients to make full disclosure to their attorneys.’ This rationale for the privilege has long been recognized by the Court, see Hunt v. Blackburn, 128 U.S. 464, 470 [9 S.Ct. 125, 127, 32 L.Ed. 488] (1888) (privilege ‘is founded upon the necessity, in the interest and administration of justice, of the aid of persons having knowledge of the law and skilled in its practice, which assistance can only be safely and readily availed of when free from the consequences or the apprehension of disclosure’).”

Upjohn Co. v. United States (1981), 449 U.S. 383, 389, 101 S.Ct. 677, 682, 66 L.Ed.2d 584, 591.

In Montana this privilege has been codified in § 26-1-803, MCA, which provides:

“(1) An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him or his advice given to the client in the course of professional employment.
“(2) A client cannot, except voluntarily, be examined as to any communication made by him to his attorney or the advice given to him by his attorney in the course of the attorney’s professional employment.”

This Court applied this statute to bar production of communications between Goodyear Tire Company and its attorney in Kuiper. In that case we followed the rule that communications to which the attorney-client privilege is applicable are not discoverable. See generally Kuiper, 632 P.2d at 699.

A recent case from the Ninth Circuit, Admiral Ins. v. U.S. Dist. Court for Dist. of Ariz. (9th Cir. 1989), 881 F.2d 1486, discussed at length the discoverability of attorney-client communications. Although the case did not involve bad faith litigation, we conclude that its stated principles apply to the present issue. It enumerated the essential elements of the privilege as follows:

“(1) Where legal advice of any kind is sought
“(2) from a professional legal advisor in his capacity as such,
“(3) the communications relating to that purpose,
“(4) made in confidence
“(5) by the client,
“(6) are at this instance permanently protected
“(7) from disclosure by himself or by the legal adviser,
“(8) unless the protection be waived.”

Admiral Ins., 881 F.2d at 1492.

Admiral Ins. involved securities fraud allegations against Admiral Ins. Co. Plaintiffs were investors. Attorneys hired by Admiral in anticipation of litigation deposed two of Admiral’s corporate officers. Plaintiffs sought production of the interview statements because the two officers asserted the Fifth Amendment and refused to cooperate when plaintiff deposed them. Plaintiffs contended they were entitled to these statements since they had no other means to obtain this information. The district court ordered the interview statements produced.

The Ninth Circuit reversed, holding that an unavailability exception is inconsistent with the nature and purpose of the privilege, and that the privilege is not to be confused with the work product rule, stating:

“While the work-product rule protects a client’s investment in his attorney’s labor to prevent unfair exploitation, the privilege protects communications between client and counsel to encourage the client to be forthcoming with his attorney so that appropriate legal advice can be offered. As Professor Saltzburg explained:
“ ‘The principal difference between the attorney-client privilege and the work product doctrine, in terms of the protections each provides, is that the privilege cannot be overcome by a showing of need, whereas a showing of need may justify discovery of an attorney’s work product.’
Saltzburg, Corporate and Related Attorney-Client Privilege: A Suggested Approach, 12 Hofstra, L.Rev. 279, 299 (1984).”

Admiral Ins., 881 F.2d at 1494-95.

* * *
“The attorney-client privilege, like all other evidentiary privileges, may obstruct a party’s access to the truth. Although it may be inequitable that information contained in privileged materials is available to only one side in a dispute, a determination that communications or materials are privileged is simply a choice to protect the communication and relationship against claims of competing interests. Any inequity in terms of access to information is the price the system pays to maintain the integrity of the privilege. An unavailability exception is, therefore, inconsistent with the nature and purpose of the privilege.”

Admiral Ins., 881 F.2d at 1494.

In summary, Admiral Ins. held that the attorney-client privilege is to be distinguished from the protection given attorney work product. Whereas a showing of need may overcome the immunity given to work product, no showing of need can be invoked to overcome the privilege. It noted the policy underlying the privilege which is to encourage the client to be open and frank with the attorney, and to enable the attorney to provide the best possible legal advice and to encourage the client to act in accordance with the law. While recognizing that the privilege denies access to these communications, the court held that the legal system’s need for the privilege outweighs an asserted need for the information. We conclude that the reasoning of the Ninth Circuit in Admiral Ins. is compelling and correct. We therefore adopt its reasoning.

Plaintiffs contend that the privilege must give way in the context of bad faith litigation because the plaintiff must be able to determine whether the insurance company had a good faith basis for its decision. They urge that the requisite information includes knowledge of reliance on advice of counsel, and that if discovery is not permitted in the present case it will render the Unfair Trade Practices Act ineffectual. Plaintiff contends that the nature of the cause of action should control discoverability. We disagree and conclude that it is the nature of the relationship which is determinative.

Plaintiffs contend that their inability to discover these communications will impede the policy behind the Unfair Trade Practices Act. We conclude that the opposite is true. The attorney-client privilege allows for an honest, careful and prompt analysis by qualified persons. This enables the insurer to evaluate and settle a claim expeditiously and in this way furthers the policy behind the Act. The free flow of information between the attorney and client equally benefits the claimant because it is this kind of communication which results in the settlement of most insurance claims.

Normally, all communications between attorney and client, including conversations and phone calls, are memorialized in writing. If these writings are all potentially discoverable, the impact on an attorney’s ability to fully advise a client would be devastating. An insurance company must have an honest and candid evaluation of a case, possibly including a “worst case scenario.” A concern by the attorney that communications would be discoverable in a bad faith suit would certainly chill open and honest communication. An attorney’s inability to communicate freely with the client would impede all communications and could diminish the attorney’s effectiveness. It could also impede settlements. We conclude that the need for the privilege outweighs any alleged need of the plaintiffs.

Plaintiffs rely on two decisions by Montana Federal District Courts, In re Bergeson (D.Mont. 1986), 112 F.R.D. 692, and Silva v. Fire Ins. Exchange (D.Mont. 1986), 112 F.R.D. 699, for their contention that the privilege must give way in bad faith insurance litigation. These decisions both involved a bad faith allegation by an insured against his own insurance company. They were thus “first-party” suits. The federal courts allowed discovery of attorney-client communications. The present case is a “third-party” suit since the plaintiff is a claimant rather than the insured. However, plaintiff contends that the same rule should apply.

We reject plaintiff’s contention for two reasons. First, whether this information would be discoverable in first party bad faith litigation has not been decided by this Court. Second, there is a valid distinction between a first party suit and a third party suit in insurance litigation. See, Baker v. CNA Ins. Co. (D.Mont. 1988) 123 F.R.D. 322.

Plaintiff urges an exception to the privilege based on other theories such as civil fraud, citing Escalante v. Sentry Ins. (1987), 49 Wash. App. 375, 743 P.2d 832, and United Services Automobile Assn. v. Werly (Alaska 1974), 526 P.2d 28. Both of these cases involved third party bad faith claims against an insurance company. The courts in these cases allowed the privilege to be defeated upon a prima facie showing of fraud after an in camera review. We reject the reasoning of those cases, which would extend the civil fraud exception to bad faith allegations. The civil fraud exception to the attorney-client privilege has traditionally been invoked where an attorney or client is involved in unlawful or criminal conduct, or future fraudulent activity. 2 J. Weinstein, Evidence § 503(d)(l)(01); Annot., 31 ALR 4th 458.

We agree with the Florida Court in Kujawa v. Manhattan Nat. Life Ins. Co. (Fla. 1989), 541 So.2d 1168, a bad faith insurance case, wherein the court stated that the “legislature in creating the bad faith cause of action did not evince an intent to abolish the attorney client privilege and work product immunity.” Kujawa, 541 So.2d at 1169.

As a final argument, plaintiffs contend that USF&G waived the right to claim the privilege by its production of other letters between itself and the Gough firm. Specifically, they note that a letter which was produced contained a reference to the August 11 letter. They urge therefore that USF&G waived its right to claim that the letter of August 11 is privileged. While it is true that the privilege may be waived (§ 26-1-803, MCA), we do not agree that by the insurer’s production of certain correspondence, it waived its right to withhold other correspondence. Nor does the reference to the August 11 letter require production of that letter. See generally 8 Wig-more, Evidence § 2327 (McNaughton Rev. 1961).

We decline to accept plaintiff’s legal theories which would sweep aside the privilege. As stated by the Admiral Ins. court, the exception urged by plaintiff would either “destroy the privilege or render it so tenuous and uncertain that it would be ‘little better than no privilege at all.’ Upjohn, 449 U.S. at 393, 101 S.Ct. at 684.” Admiral Ins., 881 F.2d at 1495. As should be apparent from our analysis, we have concluded that a balancing of the interests of all parties requires a conclusion that the attorney-client privilege must remain inviolate. We vacate the District Court’s denial of USF&G’s motion for a protective order, and remand for entry of an appropriate protective order in regard to the three letters.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, BARZ, SHEEHY, McDONOUGH and HUNT concur.


author: JUSTICE McDONOUGH

text:
    RIO LIBERTY, Plaintiff and Appellant, v. AARON JONES, Defendant and Respondent.
    No. 89-359.
    Submitted on Briefs Sept. 27, 1989.
    Decided Nov. 15, 1989.
    782 P.2d 369.

      James A. Manley, Manley Law Offices, Poison, for plaintiff and appellant.
    Daniel Decker, Confederated Salish & Kootenai Tribes, Pablo, for defendant and respondent.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from an order of dismissal of the Twentieth Judicial District, Lake County. The District Court dismissed the case on the ground that it did not have subject matter jurisdiction over the controversy. We affirm.

The sole issue on appeal is:

Whether the state courts of Montana have subject matter jurisdiction over a civil dispute brought by an Indian alleging tortious conduct by another Indian arising on the Flathead Indian Reservation when both parties are members of the Confederated Salish and Kootenai Tribe.

The facts of this case are simple. The parties are enrolled members of the Confederated Salish and Kootenai Tribes of the Flathead Indian Reservation. Both parties’ residence, business and place of employment are situated within the exterior boundaries of the Reservation.

Rio Liberty (Liberty), a self-employed truck driver, filed a complaint in state court against Aaron Jones (Jones), who is a manager of a business known as the Flathead Post and Pole Yard. This business and the land that it sits on are owned by the tribes.

In his complaint, he alleged that Jones unlawfully terminated a contract between Liberty and the Flathead Post and Pole Yard. Liberty maintains that the contract was terminated due to his failure as a member of the local school board, to hire Jones’ wife as a teacher at a local elementary school. He bases this complaint upon an alleged conversation with Jones, which occurred at the Flathead Post and Pole Yard. It is alleged that, during this conversation, Jones stated that the reason for the termination of the contract was that Liberty had not hired his wife for the teaching position.

Jones filed a motion to dismiss for lack of subject matter jurisdiction. The trial court found that it did not have jurisdiction over a dispute between two Indians that arose on the Reservation, and the motion to dismiss was granted.

In the past, the Indians gave up much of their land through the signing of treaties with the American government. These treaties were not, however, a grant of power to the tribes from the government. It has always been recognized that the treaties represented an exchange of limited aspects of tribal sovereignty for the benefits and protection of the United States of America. Worcester v. Georgia (1832), 31 U.S. (6 Pet.) 515, 8 L.Ed. 483. Consequently, because the tribes have been recognized as “distinct independent political communities,” their authority to manage the internal affairs of their populace has never been fully relinquished. Worcester, 31 U.S. at 557. The federal government has always precluded state interference with internal tribal affairs when such interference would unduly infringe upon tribal sovereignty. Williams v. Lee (1959), 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251. Normally, a state can only exercise jurisdiction over internal tribal relations when Congress has given its express assent.

Liberty maintains that authority for the State’s jurisdiction in this case, arises from the fact that the Flathead Indian Reservation is subject to the provisions of Public Law 280. See 18 U.S.C. § 1161-62, 25 U.S.C. §§ 1321-1322, 28 U.S.C. § 1360 (1986). Passed in 1953, Public Law 280 allowed the states under certain circumstances to extend their civil and criminal adjudicatory powers into Indian country.

In 1965, the State of Montana and the Confederated Salish and Kootenai Tribes entered into a voluntary agreement, pursuant to Public Law 280, that extended State criminal and enumerated areas of civil jurisdiction onto the reservation. This agreement extended the laws and jurisdiction of the State onto the Flathead Reservation in nine areas:

“a) Compulsory School Attendance.
“b) Public Welfare
“c) Domestic Relations (exception adoptions)
“d) Medical Health, Insanity, Care of the Infirm, Aged and Afflicted.
“e) Juvenile Delinquency and Youth Rehabilitation.
“f) Adoption Proceedings (With consent of the Tribal Court)
“g) Abandoned, Dependent, Neglected, Orphaned or Abused Children
“h) Operation of Motor Vehicles upon the Public Streets, Alleys, Roads and Highways.
“i) All Criminal Laws of the State of Montana; and all Criminal Ordinances of Cities and Towns within the Flathead Indian Reservation.”

Tribal Ordinance 40A (1965).

Liberty maintains that the issues here can be litigated in state court under section b of the tribal ordinance. This section allows the State to extend its jurisdiction and laws onto the reservation in the area of “public welfare.” Liberty argues that the facts of this case present a controversy which affects the welfare of the public, because it involves an act of extortion upon a public official. Such an act necessarily will affect the general happiness, well-being and welfare of the citizens of Montana. Therefore, it is argued that the State has jurisdictional authority under section b, over this tort action in order to protect these values.

We disagree with this argument. As stated by the District Court, it is clear that the term “public welfare” only applies to practical issues of economic assistance to the needy. Contrary to Liberty’s argument, it was not intended to include “lofty constitutional principles involving the welfare of the public.” In the absence of an express directive giving the State jurisdiction over disputes between tribal members, which arise on the reservation, Montana cannot extend its authority over such controversies. There is no such directive. Therefore, the District Court is affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, BARZ and WEBER concur.


author: JUSTICE McDONOUGH JUSTICE GULBRANDSON,

text:
    GRAVELEY RANCH, Plaintiff and Appellant, v. THOMAS SCHERPING and Anita Scherping, Defendants and Respondents.
    No. 89-035.
    Submitted on Briefs July 7, 1989.
    Decided Nov. 17, 1989.
    782 P.2d 371.

      Charles A. Graveley, Helena, for plaintiff and appellant.
    G. Curtis Drake and Glen L. Drake, Keller, Reynolds, Drake, Sternhagen & Johnson, Helena, for defendants and respondents.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

Plaintiff appeals from an order of the District Court of the First Judicial District, Lewis and Clark County, granting summary judgment in favor of the defendants, the Scherpings. The issue on appeal is whether summary judgment was properly granted based on the running of the statute of limitations. We reverse the District Court’s order and remand this case for trial.

On October 29, 1987, the Graveley Ranch filed a lawsuit seeking damages for the death of 27 cows, 11 calves, the expectant offspring of those cows, and other miscellaneous expenses incurred as a result of defendants’ negligence. The complaint establishes that the plaintiff holds a grazing permit for 177 head of cattle on lands adjacent to defendants’ property. On September 30, 1984, defendants’ residence burned to the ground, leaving lead batteries inside the foundation walls exposed with no means of protection from plaintiff’s cattle which were pastured in the area during the summer of 1985. During that summer, plaintiff contends that he noticed some of his cattle “were looking very bad and were losing weight.” Plaintiff traced these symptoms and resulting deaths to the exposed lead batteries, alleging that:

“. . . (plaintiff) caused some of those animals to be tested and learned that several cows had died from lead poisoning. On November 4, 1985, he received a letter from the Solid and Hazardous Waste Bureau of the Montana Department of Health and Environmental Services that the source of the lead poisoning had been pinpointed as the foundation of defendants’ destroyed home.”

Plaintiff contended that 27 cows and 11 calves died as a result of lead poisoning between September 1985 through the calendar year 1986.

In the answer, defendants’ alleged as a defense that the two-year statute of limitations period provided in § 27-2-207,. MCA, had run against the plaintiff prior to the filing of the action. Defendants moved for summary judgment, which plaintiff resisted on the ground that the limitation period did not begin to run until formal confirmation of the source of the injury was received. Plaintiff pinpointed November 4, 1985, as the date of formal confirmation when he allegedly received a letter from the Department of Health and Environmental Sciences.

The District Court refused to toll the statute of limitations because it concluded that plaintiff had knowledge of the actual cause of the injury prior to November 4, 1985, as evidenced by the following letter from plaintiffs counsel to the defendants dated September 25, 1985:

“. . . As a result of your failure to clean up the property, my brother has suffered the loss of at least six head of grown cattle and may incur substantial expense in drawing blood and testing the same on over 700 head of cattle. The lead poisoning has been confirmed by the State Department of Health, and the source has been identified as the lead batteries that were left at the uncleaned scene of the fire ...”

In its Answer to Interrogatories and Requests for Admissions on July 14, 1988, plaintiff admitted that the copy of the September 25 letter was true and correct. We agree with the District Court that plaintiff’s knowledge of the cause of injury as of September 25, 1985, precludes a tolling of the statute of limitations until November 4, 1985 when formal confirmation was allegedly received.

Plaintiff further contends that the statute of limitation period should be tolled until the damage was completed or stabilized. The District Court also rejected this argument, concluding that once plaintiff had knowledge and confirmation of the cause of the injury, no further stabilization was necessary. We conclude that the continuing nature of the injury in this case tolls the statute, and remand the case to the District Court.

In reaching this conclusion, we must first determine the type of injury sustained by the plaintiff. A nuisance is statutorily defined in Montana as:

“Anything which is injurious to health, indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property ...”

Section 27-30-101, MCA. We conclude that the presence of exposed lead batteries on defendants’ property resulting in a series of livestock deaths is potentially injurious to health and sufficiently interfered with plaintiff’s use of property for grazing so as to constitute a nuisance under § 27-30-101, MCA.

Whether or not the two-year statute of limitations can be tolled in a nuisance case depends upon whether it is a permanent, temporary, or continuous nuisance. In making such a determination, this Court has followed the general statement set forth in 39 Am.Jur., Nuisance, § 141, which is restated in 58 Am.Jur.2d, Nuisance § 132, pgs. 701-702.

“The nature of a nuisance as permanent or temporary, which, as has been seen, is a question that frequently is difficult to determine, has an important bearing on the running of the statute of limitations. Where a nuisance is permanent in character, and its construction and continuance necessarily result in an injury, all damages are recoverable in only one action, and the statute commences to run from the completion of the structure or thing which constitutes or causes the nuisance. The fact that the nuisance continues does not make the cause of action a recurring one. The running of the statute is not prevented by the fact that the plaintiff failed to discover that permanent character of the injury, or its cause, in time to bring an action for damages.

“On the other hand, when the injury is not complete, so that the damages can be measured in one action at the time of the creation of the nuisance, but depends upon its continuance and uncertain operation of the seasons or of the forces set in motion by it, the statute will not begin to run until actual damage has resulted therefrom. Each repetition of a temporary continuing nuisance gives rise to a new cause of action, and recovery may be had for damages accruing within the statutory period next preceding the commencement of the action . . .”

See Walton v. City of Bozeman (1978), 179 Mont. 351, 356, 588 P.2d 518, 521; Nelson v. CC Plywood (1970), 154 Mont. 414, 434, 465 P.2d 314, 324-25.

In Nelson, this Court held that pollution of the plaintiffs’ groundwater by defendant’s dumping of glue waste was a continuing temporary nuisance justifying a tolling of the statute of limitations. Although the dumping began in 1960 and plaintiffs did not file their complaint until 1965, this Court held that the limitation period would be tolled and that plaintiffs could recover for all damages incurred in the two years preceding the filing date.

In Walton, supra, this Court also found a continuing nuisance where the City of Bozeman relocated an irrigation ditch and constructed a storm sewer which caused annual flooding of plaintiffs’ farm crops. This Court held that:

“. . . the damages caused here were a continuing nuisance and as such were within the applicable statute of limitations, because at all times, the City could have abated the nuisance by taking curative action. Since the nuisance was so terminable, it cannot be deemed to be a permanent nuisance as of the creation date in 1967.”

588 P.2d at 521.

The instant case is similar to Nelson and Walton. In Nelson, we held that a new cause of action arose each time the defendants dumped glue waste. Here, although the plaintiff’s injury is traceable to a single nonrecurring event, the continuing presence of the exposed batteries created an ongoing hazard potentially injurious to health and interfering with plaintiff’s use of the land for grazing. This hazardous situation could have been readily abated by removing the ruptured batteries from the site and cleaning the foundation walls. Thus, following our statement in Walton, because the nuisance was terminable through cleaning of the site, it cannot he deemed to be a permanent nuisance as of the date of the fire.

Our conclusion that this nuisance is continuing and temporary is further supported by our decision in Shors v. Branch (1986), 221 Mont. 390, 720 P.2d 239. In Shors, we held that the presence of a gate blocking access to a river constituted a continuing tort in that it could have been readily abated by removal of the gate. Thus, plaintiffs had a cause of action each day the gate obstructed the free use of their easement and could recover damages for the two years preceding filing of the action.

The instant case is similar to Shors. Removal of the gate in Shors could have directly remedied the situation by affording the plaintiffs the immediate unobstructed use of their easement. Here, the contaminants from the ruptured batteries could and should have been cleaned up by the defendants. An immediate cleaning of the site could have prevented the death and illness of the plaintiff’s cattle. The nuisance in this case is temporary, because cleaning the site would have readily abated the hazard.

In contrast to a temporary, ongoing nuisance, a permanent nuisanee is one where the situation has “stabilized” and the permanent damage is “reasonably certain.” See Haugen Trust v. Warner (1983), 204 Mont. 508, 665 P.2d 1132, citing Blasdel v. Montana Power Co. (1982), 196 Mont. 417, 640 P.2d 889, U.S. v. Dickinson (1947), 331 U.S. 745, 67 S.Ct. 1382, 91 L.Ed 1789. In Haugen Trust, this Court held that damage caused by subdivision construction had not “stabilized” as of the date of the first flooding because:

“The extent of the damages to the basement varies from occurrence to occurrence, depending on the level of the water in the basement and the condition of the basement at the time of each flood
“The damage is not yet permanent. Therefore, the nuisance is of a temporary and continuous nature and gives rise to a separate cause of action each time it causes damage.”

665 P.2d at 1135. Upon remand, plaintiffs in Haugen Trust would be allowed to recover damages for injuries suffered two years prior to the date of their complaint, assuming such damages were proven at trial.

In Blasdel plaintiffs filed suit seeking damages for property destroyed by a rising groundwater table due to the raising of Flathead Lake by the construction of Kerr Dam. Plaintiffs first complained of adverse effects to their property in 1941. They did not file their complaint until 1960. The trial court found that the water table fluctuated from year to year causing intermittent damage that did not become permanent until 1959-1960 when the water table stabilized. The court held that the statute did not begin to run until that time. We affirmed.

The instant case can be distinguished from Blasdel and Haugen Trust. Here, the damage was permanent in that six cows had died before September 25, 1985, and the remaining damage was reasonably ascertainable through testing of the remainder of the herd. Thus, the statute is not tolled until the death or illness of the last cow poisoned. However, the presence of the lead batteries does constitute a nuisance which could have been abated at any time by the defendants. Thus, the nuisance is continuing until it is abated; the statute does not begin to run until the batteries are removed and the toxic residue cleaned from the site of the fire. If defendants have made no effort to remove the hazardous materials from the fire site, a new cause of action may arise each time a cow becomes ill or dies as a result of lead poisoning. Once the nuisance is removed, the statute of limitations will bar any action commenced later than two years after abatement of the nuisance, or discovery of the cause of the injury whichever occurs later.

In either case, the plaintiff’s alleged cause and possible recovery will be limited to damages for injuries to his herd, subject to any mitigating circumstances, suffered within two years prior to the date of filing its complaint. The District Court’s order granting summary judgment for defendants is reversed and the case is remanded for a trial on the merits.

Reversed and remanded for further proceedings consistent with this opinion.

JUSTICES HARRISON, HUNT, WEBER and SHEEHY concur.

JUSTICE GULBRANDSON,

dissenting:

I respectfully dissent.

In my opinion, the majority has ignored recent decisions of this Court involving statute of limitations and has enlarged the discovery exception by relying upon a theory of “nuisance” under § 27-30-101, MCA, a theory which was never argued to the District Court or to this Court.

This Court, in Holman v. Hanson (Mont. 1989), [237 Mont. 198,] 773 P.2d 1200, 1203, 46 St.Rep. 734, 738, stated:

“[W]hether there has been a ‘discovery’ of facts sufficient to start the running of the statute of limitations is a question of law.”

The majority has correctly concurred with the District Court that the plaintiff had knowledge of the cause of injury as of September 25, 1985, but then ignores this Court’s comments in Bennett v. Dow Chemical Co. (1986), 220 Mont. 117, 121, 713 P.2d 992, 995,

“[T]here is no Montana precedent for utilizing discovery doctrine to toll the statute of limitations beyond discovery of the cause of an injury.”

The appellant has, in effect, argued that the statute of limitations in this case should be tolled until his damages had stabilized and stated in his reply brief:

“Plaintiff had no idea how many more, if any, additional cattle would die as a result of the lead poisoning. His damages had, in no way, stabalized [sic] and, his cattle continued to die for the remainder of 1985 and all of 1986.”

This argument was rejected by this Court in E.W. v. D.C.H. (Mont. 1988), [231 Mont. 481,] 754 P.2d 817, 820-21, 45 St.Rep. 778, 783:

“Finally, it is argued that the running of the statutory period should be tolled because EW’s injuries were not complete until after the statute of limitations had run. However, ‘it is not necessary to know the total extent of damages that an act causes to begin the running of the statute of limitations.’. . . New are the injuries that could not someday develop additional consequences. To adopt the theory advocated by EW would again postpone the statutory period indefinitely.
“Section 27-1-203, MCA, provides that ‘damages may be awarded . . . for detriment. . . certain to result in the future.’ In Frisnegger v. Gibson (1979), 183 Mont. 57, 598 P.2d 574, we construed § 27-1-203 consistent with the Montana practice of instructing juries that damages need only be reasonably certain. 183 Mont. at 71, 598 P.2d at 582. Under the Frisnegger rationale, EW could have presented evidence of, and received damages for, future harm, if any. (Citations omitted.)” .

In my view, the appellant’s stabilization argument is without merit in view of the statement in the September 25, 1985, letter of demand that:

“As a result of your failure to clean up the property, my brother has suffered the loss of at least six head of grown cattle and may incur substantial expense in drawing blood and testing the same on over 700 head of cattle.”
and the further argument of appellant set forth above that cattle “continued to die for the remainder of 1985 and all of 1986.”

The majority has apparently agreed that the stabilization argument is without merit by stating in the majority opinion:

“Here, the damage was permanent in that six cows had died before September 25, 1985, and the remaining damage was reasonably ascertainable through testing of the remainder of the herd.”

I concur that the remaining damage was reasonably ascertainable and would, therefore, affirm the ruling of the District Court.

CHIEF JUSTICE TURNAGE concurs in the dissent of JUSTICE GULBRANDSON.