                                         No. 13180

             I N THE SUSREME COUKT O THE STATE OF MONTANA
                                    F

                                             1977




ARTHUR H. S N and EDNA SANT,
           AT

                                                    P l a i n t i f f s and A p p e l l a n t s ,
             v.

LAURA THELMA BARIL, A s A d m i n i s t r a t r i x
of t h e E s t a t e of A.R. SMITH, Deceased,

                                                    Defendant and Respondent.

             And

LAURA THELMA BARIL, A s A d m i n i s t r a t r i x
of t h e E s t a t e of A.R.        Smith, Deceased,

                                                    P l a i n t i f f and Respondent,



ROBERT SANT,

                                                    Defendant and A p p e l l a n t .



Appeal from:           D i s t r i c t Court of t h e F i f t h J u d i c i a l D i s t r i c t ,
                       Honorable P e t e r Meloy, Judge p r e s i d i n g .

Counsel of Record:

      For A p p e l l a n t s :

              Landoe, Gary and P l a n a l p , Bozeman,Montana
              Robert P l a n a l p argued, Bozeman, Montana

      For Respondent :

             C h e s t e r Lloyd Jones argued, V i r g i n i a C i t y , Montana
             Douglas Smith argued, S h e r i d a n , Montana.



                                                                            Submitted:              March 9 , 1977

                                                                               Decided :
                                                                                                J       - 9 I977
Filed:   .I@       i    gfi
                        aamw       2   t"iGa".,L<
                                                     -7"            -
                                            Clerk.
M r . J u s t i c e Gene B . Daly delivered t h e Opinion of t h e Court.


       This appeal a r i s e s out of two causes of a c t i o n which were

consolidated f o r t r i a l by jury i n t h e d i s t r i c t c o u r t , Madison

County.      The f i r s t cause i s a s u i t f o r damages under a land l e a s e

executed between l e s s o r s , A . R. Smith and Laura Smith, and l e s s e e

Arthur H. Sant.
             '           This s u i t was brought by Arthur H. Sant and

Edna Sant (Sants), a g a i n s t t h e Administratrix of t h e E s t a t e of

A . R. Smith (Administratrix).               P l a i n t i f f s appeal from t h e d i s t r i c t

c o u r t g r a n t i n g defendant's motion t o dismiss, a f t e r p l a i n t i f f s

presented t h e i r case and r e s t e d .

       The second cause i s a s u i t t o recover on a promissory n o t e

held by t h e F i r s t National Bank of Twin Bridges, Twin Bridges,

Montana, and executed by t h e Sants and t h e i r son, Robert Sant.

The promissory note was assigned t o t h e Administratrix and s u i t

was brought by t h e Administratrix a g a i n s t Robert Sant.                     The d i s -

t r i c t c o u r t t r e a t e d t h i s a c t i o n a s a counterclaim.    Robert Sant

appeals from t h e d i s t r i c t c o u r t ' s order d i r e c t i n g t h e j u r y t o

r e t u r n a v e r d i c t f o r t h e Administratrix.

       I n F i r s t National Bank v. Sant, 161 Mont. 376, 506 P.2d 835,

t h i s Court discussed some of t h e l e g a l problems e x i s t i n g i n t h e

present a c t i o n .   A s a means of i n t r o d u c t i o n and c l a r i f i c a t i o n , we

review our holding i n t h a t case.

       I n F i r s t National Bank v. Sant, supra, t h e Sants appealed

from a d i s t r i c t c o u r t judgment granting f o r e c l o s u r e on t h e i r r e a l

and personal property.             This judgment of f o r e c l o s u r e was rendered

i n favor of t h e F i r s t National Bank of Twin Bridges which sought

t o f o r e c l o s e on a mortgage executed by Arthur H. Sant on J u l y 9 ,

1970, and held by t h e F i r s t National Bank of Twin Bridges.                         The
mortgage instrument was entitled "(Plan of Paris Robert)".     Paris

Robert was the president of the First National Bank of Twin Bridges.

The plan purported to relieve the Sants of ldAbility for certain

creditor debts and balances due the bank on existing notes.      This

release was to be accomplished through the bank!s disbursement

of funds made available to the Sants by virtue of their executing

three promissory notes.   The notes were in the amounts of $17,690.62;

$2,788.05; and $12,968.74, and each bearing interest at the rate

of ten percent per annum.   Certain real and personal property of

the Sants was listed as collateral for the mortgage and $50 was
charged by the bank as an expense for organizing the credit plan

and overseeing the payments.
     The plan was divisible into three parts with the promissory
notes for $17,690.62 and $2,788.05 to mature February 5, 1971;

while the note for $12,968.74 matured on April 1, 1971. At the
time First National Bank v. Sant was heard none of the promissory

had been paid by the obligors. The notes for $2,788.05 and $12,968.74
were held by the bank and no actual disbursements were made to
Continental Oil Co. via Russell Lepp, or to A. R. Smith, both

listed as corresponding creditors to these notes.    It is the

$12,968.74 debt which confronts us in the instant case in the form

of the July 9, 1970 promissory note and the assignment of that

note.    The plan indicates the $12,968.74 debt was a consolidation
of debts owed by the Sants to A. R. Smith.    Specifically, these
debts are listed as an old promissory note of $8,240; $728.74 in
interest on this old note; and $4,000 consideration for a 1970
lease.    These items are of importance   later in this opinion.
       W held i n F i r s t National Bank v. Sant t h a t t h e bank was
        e

barred from foreclosing on t h e promissory n o t e s i n t h e amount

of $2,788.05 and $12,968.74 and t h e Sants were e n t i t l e d t o a

c r e d i t i n t h e amount of $1,214.32 on t h e promissory n o t e f o r

$17,690.62.         The b a s i s f o r t h e $1,214.32 c r e d i t was t h e f i n d i n g

t h a t while t h e bank had charged $50 a s expense f o r s e t t i n g up

t h e plan and had charged t e n percent i n t e r e s t on t h e promissory

n o t e s , P a r i s Robert, a s agent f o r t h e bank, had s e c r e t l y negotiated

with t h e Sants' c r e d i t o r s f o r discounts o r r e b a t e s a s a c o l l e c t i o n

fee.    W found t h e bank's f a i l u r e t o d i s c l o s e such n e g o t i a t i o n s
         e

a breach of a duty owed t h e p r i n c i p a l by h i s agent and held t h e

Sants e n t i t l e d t o t h e amount of t h e r e b a t e s , $1,214.32.

       The b a s i s f o r denying t h e bank f o r e c l o s u r e on t h e $2,788.05

and $12,968.74 promissory n o t e s was t h e f i n d i n g t h a t t h e n o t e s

were n o t supported by l e g a l consideration.                For example, t h e

$12,968.74 promissory note was purportedly executed t o evidence

debts owed by t h e Sants t o A . R. Smith.                However, t h e promissory

n o t e was d r a f t e d and held by t h e F i r s t National Bank of Twin

Bridges and executed by t h e Sants and Robert Sant.                       Since t h e r e

has never been a showing of any o r a l o r express t r u s t , p a r t n e r s h i p ,

agency, j o i n t venture o r o t h e r such r e l a t i o n s h i p between A . R.

Smith and t h e bank, t h e promissory note i s void f o r t h e purpose of

e s t a b l i s h i n g t h e $12,968.74 debt between A . R. Smith and t h e Sants.

The only evidence of any agency r e l a t i o n s h i p i s t h e penciled words

"A.R.Smith Trust" which emboss t h e promissory note and were a l l e g e d l y

w r i t t e n by P a r i s Robert.    I n F i r s t National Bank v. Sant we s e t

f o r t h those policy reasons which d i r e c t e d why such evidence should

not be equated with an express o r o r a l agreement c r e a t i n g a p a r t n e r -

s h i p , agency,     o r t r u s t r e l a t i o n s h i p and, though we r e f r a i n from

repeating those policy reasons h e r e , we a f f i r m t h e b a s k f o r t h a t

holding   .
                                       - 3 -
        W note t h a t F i r s t National Bank v. Sant never discussed
         e

t h e l e g a l s u f f i c i e n c y of t h e debts embodied i n t h e $12,968.74

promissory note:

        "This holding does not a f f e c t any p r e e x i s t i n g o r
        present debt between Sant and Smith                   * * *."
        161 Mont. 387.

That case held only t h a t t h e $12,968.74 promissory n o t e could

not be sued upon because i t was not supported by l e g a l considera-

tion.      Such a holding i s f a t a l t o any attempt by t h e Administratrix

here t o c o l l e c t on t h e same promissory note assigned by t h e bank,

apparently without consideration.                   Any attempt by t h e Administra-

t r i x t o recover a debt of $12,968.74 must be by an a c t i o n indepen-

dent of t h e promissory note and must be proven by evidence e s t a b -

lishing anobligee/obligor relationship.                        A s u i t t o recover on

. t h e promissory note held by t h e bank and executed by t h e Sants

and Robert Sant f a i l s t o e s t a b l i s h such a debt.

        Therefore, we hold t h e d i s t r i c t c o u r t e r r e d when i t d i r e c t e d

t h e jury t o r e t u r n a v e r d i c t f o r t h e Administratrix on t h e

counterlclaim t o recover on t h e promissory n o t e and t h a t a c t i o n

i s dismissed.

        The remaining i s s u e i s whether t h e d i s t r i c t c o u r t e r r e d

when i t granted t h e Administratrix' motion t o dismiss a f t e r t h e

Sants had presented t h e i r case and r e s t e d i n t h e a c t i o n f o r damages

under t h e land l e a s e .      W i n i t i a l l y recognize t h a t counsel f o r
                                   e

t h e Administratrix i n c o r r e c t l y moved f o r d i s m i s s a l i n t h i s j u r y

t r i a l and t h e d i s t r i c t c o u r t i n a d v e r t e n t l y granted t h e motion.

Rule 41(b), M.R.Civ.P.,           i s controlling:

        "(b) INVOLUNTARY DISMISSAL--EFFECT THEREOF. For
        f a i l u r e of t h e p l a i n t i f f t o prosecute o r t o comply
        with t h e s e r u l e s or, any order of c o u r t , a defendant
        may move f o r d i s m i s s a l of an a c t i o n o r of any claim
        a g a i n s t him. A f t e r t h e p l a i n t i f f , i n an a c t i o n t r i e d
        by t h e c o u r t without a j u r y , has completed t h e presenta-
        t i o n of h i s evidence, t h e defendant, without waiving h i s
        r i g h t t o o f f e r evidence i n the event t h e motion
        i s not granted, may move f o r a d i s m i s s a l on t h e
        ground t h a t upon t h e f a c t s and t h e law t h e
        p l a i n t i f f has shown no r i g h t t o r e l i e f . The
        c o u r t a s t r i e r of t h e f a c t s may then determine
        them and render judgment a g a i n s t t h e p l a i n t i f f
        o r may d e c l i n e t o render any judgment u n t i l t h e
        c l o s e of a l l t h e evidence, I f t h e c o u r t renders
        judgment on t h e m e r i t s a g a i n s t t h e p l a i n t i f f , t h e
        c o u r t s h a l l make f i n d i n g s a s provided i n Rule 52(a).
        Unless t h e c o u r t i n i t s order f o r d i s m i s s a l otherwise
        s p e c i f i e s , a d i s m i s s a l under t h i s subdivision and any
        d i s m i s s a l not provided f o r i n t h i s r u l e , o t h e r than
        a d i s m i s s a l f o r lack of j u r i s d i c t i o n o r f a i l u r e t o
        j o i n a p a r t y under Rule 19, operates a s an a d j u d i c a t i o n
        upon t h e merits."         '




        The Advisory Committee's note t o t h e September 29, 1967

Amendment t o Rule 41(b), s t a t e s :
        II   Source: F ~ ~ . R , , C ~ V . P .
                                            41(b), a s amended 1963 and 1966.

        "Explanation of change: Under t h e p r i o r t e x t of t h e
        second sentence of t h i s subdivision [Rule 41(b) 1,
        t h e motion f o r d i s m i s s a l a t t h e c l o s e of t h e p l a i n t i f f ' s
        evidence may be made i n a case t r i e d t o a jury a s w e l l
        a s i n a case t r i e d without a jury. But when made i n
        a j u r y - t r i e d c a s e , t h i s motion overlaps t h e motion f o r
        a d i r e c t e d v e r d i c t under Rule 5 0 ( a ) , which i s a l s o
        a v a i l a b l e i n t h e same s i t u a t i o n , This overlap has caused
        confusion. Accordingly it i s amended t o provide t h a t t h e
        motion f o r d i s m i s s a l a t t h e c l o s e of t h e p l a i n t i f f ' s e v i -
        dence s h a l l apply only t o nonjury cases (including cases
        t r i e d with an advisory j u r y ) . Hereafter t h e c o r r e c t motion
        i n j u r y - t r i e d cases would be a motion f o r a d i r e c t e d v e r d i c t .
        This amendment .involves no change of substance.

        "The f i r s t sentence of Rule 41(b), providing f o r d i s m i s s a l
        f o r f a i l u r e t o prosecute o r t o comply with t h e Rules o r
        any o r d e r of c o u r t , and t h e general provisions of t h e l a s t
        sentence remain a p p l i c a b l e i n j u r y a s w e l l a s nonjury cases.

        "This amendment a l s o changes t h e l a s t sentence of t h i s
        subdivision t o accord with t h e amendment t o Rule; 19,':                         .
        (Emphasis added.)

        A motion f o r d i r e c t e d v e r d i c t was n o t o f f e r e d i n t h e i n s t a n t

case.         However, both p a r t i e s recognize t h e e r r o r and counsel t r e a t

t h e motion f o r d i s m i s s a l a s a motion f o r d i r e c t e d v e r d i c t i n t h e i r

briefs.         Thus, f o r purposes of t h i s review we w i l l likewise t r e a t

t h e motion f o r d i s m i s s a l a s a motion f o r d i r e c t e d v e r d i c t under

Rule 5 0 ( a ) , M,R.Civ.P.;            9 Wright & M i l l e r , Federal P r a c t i c e and
Procedure: C i v i l 5 2371; Warren v. Hudson Pulp & Paper Corp.,

477 F.2d 229,232; Haugen v. Minnesota Mining and Manufacturing

Co., 15 Wash.App. 379, 550 P.2d 71.

        The b a s i c r u l e governing our a n a l y s i s of t h e g r a n t i n g of

a motion f o r d i r e c t e d v e r d i c t i s s e t o u t i n s e c t i o n 93-5205, R.C.M.

1947:

        "Where, upon t h e t r i a l o f an i s s u e by a j u r y , t h e c a s e
        p r e s e n t s only q u e s t i o n s of law, t h e judge may d i r e c t
        t h e j u r y t o render a v e r d i c t i n f a v o r of t h e p a r t y en-
        t i t l e d thereto   ."
Case a u t h o r i t y i n Montana h a s e s t a b l i s h e d t h r e e b a s i c r u l e s which

apply i n i n t e r p r e t i n g s e c t i o n 93-5205.

        1. Upon a motion f o r d i r e c t e d v e r d i c t i n favor o f defendant,

t h e evidence introduced by p l a i n t i f f w i l l be considered i n t h e

l i g h t most f a v o r a b l e t o p l a i n t i f f and a s proving whatever it t e n d s

t o prove.

        2.    A cause should never be withdrawn from t h e j u r y u n l e s s

t h e conclusion sought t o be drawn from t h e f a c t s must follow a s

a m a t t e r of law and recovery cannot be had upon any view which

could be reasonably drawn from t h e f a c t s which t h e evidence t e n d s

t o prove,

        3,    I n reviewing an o r d e r d i r e c t i n g a v e r d i c t f o r d e f e n d a n t ,

t h e reviewing c o u r t w i l l only c o n s i d e r t h e evidence introduced

by t h e p l a i n t i f f and i f t h a t evidence, viewed i n t h e l i g h t most

f a v o r a b l e t o t h e p l a i n t i f f , t e n d s t o e s t a b l i s h t h e c a s e made by

t h e p l a i n t i f f ' s p l e a d i n g s t h e o r d e r w i l l be reversed.

See: Hannifin v. R e t a i l C l e r k s , 162 Mont. 170, 511 P.2d 982;

M d l e r v.,Svejkovsky, 153 Mont. 416, 458 P.2d 265; P i c k e t t v.

Kyger, 151 Mont. 87, 439 P.2d 57; McIntosh v . Linder-Kind Lumber

Co., 144 Mont, 1, 393 P,2d 782,

        The t e s t commonly employed t o determine i f t h e evidence i s
l e g a l l y s u f f i c i e n t t o withdraw c a s e s and i s s u e s from t h e jury

i s whether r e a s o n a b l e men could draw d i f f e r e n t c o n c l u s i o n s from

t h e evidence.         C o l l i n s v . I t o h , 160 Mont. 461, 503 P.2d 36;

Hoffman v. Herzog, 158 Mont. 296, 491 P.2d 713; S h i e l d s v.

Murray, 156 Mont. 493, 481 P.2d 680; B r i d g e s v. Moritz, 149

Mont. 273, 425 P.2d 721.                  I f only one c o n c l u s i o n        i s reasonably

proper, then t h e d i r e c t e d v e r d i c t i s proper.

        I n t h e i n s t a n t c a s e t h e S a n t s p r e s e n t e d evidence i n t h e

d i s t r i c t c o u r t which tended t o prove: (1) That a w r i t t e n l e a s e

f o r t h e y e a r s 1966 through 1968 was executed between t h e l e s s o r s ,

A.   R. Smith and Laura Smith, and t h e l e s s e e , Arthur H. S a n t ;

( 2 ) t h a t t h e w r i t t e n l e a s e was o r a l l y extended f o r a p e r i o d of

two y e a r s , through A p r i l 1971; (3) t h a t t h e terms of t h e l e a s e

provided t h e l e s s e e was e n t i t l e d t o t h e e x c l u s i v e p o s s e s s i o n and

c o n t r o l of t h e l e a s e d premises, i n c l u d i n g a house on t h e l e a s e d

p r o p e r t y ; (4) t h a t t h e B r i t t o n family was a t e n a n t of t h e S a n t s ,

r e s i d i n g i n t h e house on t h e l e a s e d p r o p e r t y , and t h e S a n t s were

legally within t h e i r r i g h t s i n attempting t o e v i c t the B r i t t o n s ;

(5) t h a t A . R. Smith and members of h i s family r e s t r a i n e d t h e

S a n t s from e v i c t i n g t h e B r i t t o n s , and t h u s i n t e r f e r e d w i t h t h e

 ants' e x c l u s i v e p o s s e s s i o n of t h e premises; (6) t h a t i n t e r f e r -
ence w i t h t h e      ants' e x c l u s i v e p o s s e s s i o n of t h e premises was a
v i o l a t i o n of t h e l e a s e p r o v i s i o n s ; (7) t h a t a s a r e s u l t of t h e

 ants' i n a b i l i t y t o e v i c t t h e B r i t t o n s t h e S a n t s were unable t o
house employees who could work i n t h e S a n t s ' p o t a t o f i e l d s ; (8)

t h a t a s a r e s u l t of t h e S a n t s ' i n a b i l i t y t o house employees t h e i r

unattended p o t a t o c r o p f o r t h e 1970 c r o p season was damaged by

d i s e a s e , s u b s t a n t i a l l y a f f e c t i n g t h e s a l e p r i c e of t h e c r o p ; (9)

t h a t t h e S a n t s ' i n c u r r e d monetary damages r e s u l t i n g from t h e
d i s e a s e d c ~ ~ n ~ d i t i ofnE h e i r potaco c r o p , the spread of t h e
                                3- :


d i s e a s e b e i n g proximately caused by A. R. Smith and members of

h i s family by p r e v e n t i n g t h e S a n t s from p r o v i d i n g housing f o r

2mployees.

        I n e s t a b l i s h i n g t h e i r c a s e t h e S a n t s p r e s e n t e d evidence

i n i h s 2orm of : ( 1 ) The w r i t t e n l e a s e and o p t i o n executed by

che l e s s o r s and l e s s e e ; ( 2 ) t h e testimony o f workers who t e s t i -

f i e d t h e y and t h e i r f a m i l i e s were prepared t o work f o r t h e S a n t s

and a i d i n s a v i n g t h e S a n t s ' d i s e a s e d p o t a t o c r o p , b u t were com-

p e l l e d t o f i n d o t h e r employment when t h e S a n t s were unable t o

supply housing; ( 3 ) t h e testimony of h o r t i c u l t u r e e x p e r t s who

t e s t i f i e d r e g a r d i n g t h e b l a c k l e g d i s e a s e which i n f e c t e d t h e

S a n t s ' 1970 p o t a t o c r o p and t h e p o t e n t i a l f o r r e c o v e r i n g c e r t i f i -

c a t i o n of t h e p o t a t o c r o p by manual roguing of t h e p o t a t o p l a n t s .

        The e v i d e n c e , when viewed i n t h e l i g h t most f a v o r a b l e t o

t h e S a n t s , c o u l d persuade r e a s o n a b l e men t o conclude t h e damages

i n c u r r e d by t h e S a n t s was a t t r i b u t a b l e t o A . R. s m i t h ' s a l l e g e d

i n t e r f e r e n c e w i t h t h e S a n t s ' e x c l u s i v e p o s s e s s i o n of t h e l e a s e d

premises.         The evidence c l e a r l y p r e s e n t s q u e s t i o n s of f a c t a s

t o t h e proximate cause of t h e damages i n c u r r e d by t h e S a n t s i n

t h e 1970 c r o p season.             I n any e v e n t , t h e A d m i n i s t r a t r i x was n o t

e n t i t l e d t o judgment a s a m a t t e r of law.

        T h e r e f o r e , t h e d i s t r i c t c o u r t ' s o r d e r and judgment g r a n t i n g

t h e A d m i n i s t r a t r i x ' motion t o d i s m i s s i s r e v e r s e d and t h e c a u s e

i s remanded f o r t r i a l on t h e i s s u e s .             W note t h e record f a i l s
                                                                 e

t o d i s c l o s e any payment by t h e S a n t s on t h e p u r p o r t e d o r a l l e a s e

f o r t h e 1970 c r o p season.              Absent proof o f payment, any p o t e n t i a l
recovery by t h e S a n t s f o r damages would b e s e t o f f a g a i r ~ s ct h e

lease consideration.

       The judgment of t h e d i s t r i c t c o u r t i s r e v e r s e d and t h e cause
                                                                         4


i s remanded, c o n s i s t e n t w i t h t h i s o p i n i o n .


                                                                    4'




                                                           Justice.



We    Concur:

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