                              No. 79-83
                 IN THE SUPREME COURT OF THE STATE OF MONTANA
                                  1980


NEWTON MARVIN,
                     Plaintiff and Respondent,
      VS   .
C. LEO HARGRAVE,
                     Defendant and Appellant.


Appeal from:    District Court of the Eleventh Judicial District,
                In and for the County of Flathead.
                Honorable Robert Sykes, Judge presiding.
Counsel of Record:
     For Appellant:
           Murphy, Robinson, Heckathorn and Phillips, Kalispell,
            Montana
           Daniel Johns argued, Kalispell, Montana
    For Respondent:
           Hash, Jellison, O'Brien and Bartlett, Kalispell, Montana
           Kenneth O'Brien argued, Kalispell, Montana


                               Submitted:   September 12, 1980
                                 ~ecided: @ T2 2 1980
                                        @
Mr.   J u s t i c e Gene B. Daly d e l i v e r e d t h e Opinion of t h e C o u r t .

        T h i s i s a n a p p e a l from a judgment e n t e r e d by t h e

Honorable R o b e r t C . Sykes, F l a t h e a d County D i s t r i c t C o u r t ,

f o l l o w i n g a n o n j u r y t r i a l , awarding p l a i n t i f f Newton Marvin

t h e sum of $3,736.24 p u r s u a n t t o a l a n d c l e a r a n c e c o n t r a c t .

        Defendant C . Leo Hargrave and h i s w i f e e n t e r e d i n t o a

w r i t t e n l a n d c l e a r i n g agreement w i t h Bruce K i s e r on August

1 6 , 1974, f o r t h e p u r p o s e of c o n v e r t i n g a p p r o x i m a t e l y 100

acres of t i m b e r l a n d i n t o a d d i t i o n a l f a r m l a n d .   According t o

t h e agreement, K i s e r was t o c u t "- t i m b e r , e x c e p t a s p e n ,
                                          all

and c l e a r stumps and b r u s h and p i l e same i n a s c l e a r a

manner a s p o s s i b l e i n r e t u r n f o r a l l t i m b e r r i g h t s . "     The

c o n t r a c t continued:

        "Large stumps w i l l b e t r i e d , and i f t h e y
        c a n ' t b e moved t h e y may be l e f t .           Timber w i l l
        b e c u t t o t h e brow of t h e s l o p e s f o r s h e l t e r
        b e l t , a l s o s h e l t e r from A.M.C. Road. A l l
        s l a s h d i s p o s a l money w i l l go t o Bruce f o r
        c l e a r i n g H a r r d i n g l o g g i n g job--also s l a s h
        from t h i s job."

        K i s e r began c l e a r i n g t h e l a n d , b u t had c l e a r e d o n l y a

s m a l l p o r t i o n o f t h e 100 a c r e s when, w i t h t h e c o n s e n t of Leo

Hargrave on November 2, 1974, he a s s i g n e d h i s i n t e r e s t i n

t h e c o n t r a c t t o Newton Marvin.            A t t h e t i m e of t h e a s s i g n -

ment, Hargrave e x p l a i n e d t o Marvin t h a t t h e l a n d w a s b e i n g

c l e a r e d s o t h a t i t would be s u i t a b l e f o r f a r m i n g .       For ap-

p r o x i m a t e l y two y e a r s , Marvin performed t h e c o n t r a c t a s re-

q u i r e d , removing t h e t i m b e r and r e c e i v i n g t h e money from i t s

sale.

        Marvin c e a s e d work i n November 1977.                     By t h i s t i m e

Marvin had c l e a r e d t h e p r o p e r t y s o a s t o comply w i t h t h e

t e r m s of a S t a t e F i r e Hazard Reduction Agreement which had

been e x e c u t e d f o r t h e a c r e a g e by Hargrave w i t h t h e Montana

S t a t e Department of N a t u r a l Resources and C o n s e r v a t i o n
 (DNRC) i n a c c o r d a n c e w i t h t h e s e c t i o n 76-13-408,         MCA.      The

r e q u i r e m e n t s of t h i s agreement h a v i n g been m e t , DNRC i n -

formed Hargrave t h a t t h e remaining s l a s h d i s p o s a l d e p o s i t

b e i n g h e l d under t h e agreement was no l o n g e r n e c e s s a r y and

could be r e t r i e v e d .

        I n accordance with t h e assigned c o n t r a c t , an i n i t i a l

s l a s h d e p o s i t , r e l e a s e d e a r l i e r by DNRC, was p a i d t o Marvin

by Hargrave.          The payment was made d u r i n g t h e two-year

p e r i o d Marvin worked on t h e l a n d . The l a s t s l a s h d e p o s i t of

$3,616.24 was r e t u r n e d i n March 1978.                  However, i n s t e a d of

p a y i n g t h i s sum t o Marvin, Hargrave r e t a i n e d t h e money s i n c e

h e b e l i e v e d t h a t Marvin had n o t f u l l y performed under t h e

contract.

        I n a n a t t e m p t t o s e c u r e t h e monies c o n t a i n e d i n t h e

s l a s h d e p o s i t , Marvin f i l e d a c l a i m and n o t i c e of a m e c h a n i c ' s

l i e n on March 1 0 , 1978.            Marvin t h e n f i l e d s u i t on J u n e 2 2 ,

1978, a l l e g i n g t h a t Hargrave had f a i l e d t o pay him t h e s l a s h

d i s p o s a l d e p o s i t i n c o n s i d e r a t i o n f o r s e r v i c e s performed i n

c l e a r i n g t h e land.     Marvin asked f o r $3,840.04                i n damages,

p l u s a t t o r n e y f e e s , and t h a t t h e p r o p e r t y i n v o l v e d be s o l d

and t h e p r o c e e d s a p p l i e d t o t h e judgment i n a c c o r d a n c e w i t h

the lien.        Hargrave c o u n t e r c l a i m e d a l l e g i n g t h a t b e c a u s e o f

M a r v i n ' s f a i l u r e t o p r o p e r l y perform t h e c o n t r a c t h e l o s t

t h e u s e of t h e 100 a c r e s a s farmland f o r a p e r i o d of t h r e e

y z a r s and u n l e s s Marvin p r o c e e d s t o p r o p e r l y complete t h e

performance due, h e w i l l l o s e f u t u r e u s e of t h e l a n d .

Hargrave s t a t e d h i s damages were a s y e t undetermined.

        During t r i a l Hargrave s o u g h t t o i n t r o d u c e e v i d e n c e

showing c e r t a i n e x p e n d i t u r e s h e had made i n c o m p l e t i n g t h e
work a l l e g e d l y l e f t undone by ~ a r v i n . Marvin o b j e c t e d on

t h e ground t h a t t h e e v i d e n c e was i n c o m p e t e n t , i r r e l e v a n t and
i m m a t e r i a l t o any i s s u e i n t h e c a u s e and t h a t i t was beyond

t h e s c o p e of any c o n t e n t i o n t h a t Hargrave had s e t f o r t h i n

t h e case.       The t r i a l c o u r t p r o v i s i o n a l l y a l l o w e d t h e e v i -

dence t o be i n t r o d u c e d s u b j e c t t o M a r v i n ' s r i g h t t o renew

h i s o b j e c t i o n a t t h e c o m p l e t i o n of a l l t e s t i m o n y .

        A t t h e c o n c l u s i o n of t h e t r i a l , Marvin by w r i t t e n

motion renewed h i s o b j e c t i o n t o t h e e v i d e n c e .              The t r i a l

c o u r t g r a n t e d t h e motion on t h e ground t h a t t h e c l a i m e d

e x p e n s e s w e r e o u t s i d e t h e scope of t h e p l e a d i n g s and t h e

p r e t r i a l o r d e r and t h a t d e f e n d a n t f a i l e d t o p r e s e n t t e s t i -

mony a t t r i a l t h a t a c l a i m o r b i l l f o r s a i d e x p e n s e s was

e v e r p r e s e n t e d t o Marvin.

        Judgment i n f a v o r of Marvin f o r $3,736.24 was e n t e r e d

on September 1 7 , 1979.                The judgment was based on t h e

c o u r t ' s f i n d i n g s t h a t Hargrave had w r o n g f u l l y c o n v e r t e d t h e

s l a s h d i s p o s a l monies.

        Following e n t r y o f judgment, Hargrave moved t h e c o u r t ,

i n t h e a l t e r n a t i v e , t o amend t h e f i n d i n g s ; f o r judgment f o r

t h e d e f e n d a n t ; f o r a new t r i a l ; and f o r l e a v e t o amend t h e

c o u n t e r c l a i m s o a s t o conform w i t h t h e o f f e r e d e v i d e n c e p e r -

t a i n i n g t o t h e e x p e n d i t u r e s made i n c o m p l e t i n g t h e c l e a r i n g

of h i s land.         D e f e n d a n t ' s motions w e r e d e n i e d , and amended

f i n d i n g s w e r e f i l e d on October 9, 1979, a g a i n f i n d i n g t h a t
Hargrave's a c t i o n s c o n s t i t u t e d conversion.                 The c o u r t t h e n

o r d e r e d t h a t e a c h p a r t y have o f f s e t t i n g judgments a g a i n s t

t h e o t h e r f o r $1,000 i n a t t o r n e y f e e s .          Hargrave was a l l o w e d

a t t o r n e y f e e s p u r s u a n t t o s e c t i o n 71-3-124,        MCA, b e c a u s e

Marvin had f a i l e d t o e s t a b l i s h h i s m e c h a n i c ' s l i e n .             Har-

grave appeals.

        On a p p e a l d e f e n d a n t r a i s e s t h e f o l l o w i n g i s s u e s :
         1.      id t h e ~ i s t r i c C o u r t e r r i n s t r i k i n g a l l e v i d e n c e
                                        t

p e r t a i n i n g t o monies expended o r a b o u t t o b e expended by de-

fendant f o r c l e a r i n g h i s land?

         2.    Did t h e D i s t r i c t C o u r t e r r by n o t p e r m i t t i n g amend-

ment of t h e c o u n t e r c l a i m s o a s t o m e e t t h e o b j e c t i o n t h a t

t h e e v i d e n c e p e r t a i n i n g t o t h e e x p e n d i t u r e s was beyond t h e

s c o p e of t h e p l e a d i n g s ?

        3.     Did t h e D i s t r i c t C o u r t err by awarding a t t o r n e y

fees to plaintiff?

        A s t o t h e f i r s t i s s u e , w e note t h a t p l a i n t i f f brought

t h i s s u i t a l l e g i n g t h a t , a l t h o u g h he had performed i n ac-

cordance with t h e land c l e a r i n g c o n t r a c t , defendant refused

t o r e l e a s e t o p l a i n t i f f c e r t a i n s l a s h d i s p o s a l monies due

and owing a s c o n s i d e r a t i o n .       Defendant i n r e s p o n s e d e n i e d

t h a t p l a i n t i f f had f u l l y performed under t h e c o n t r a c t and

a l l e g e d , by way of a c o u n t e r c l a i m , t h a t b e c a u s e of t h i s

f a i l u r e , d e f e n d a n t l o s t t h e u s e of h i s l a n d a s f a r m l a n d f o r

a p e r i o d of a t l e a s t t h r e e y e a r s .

        The g e n e r a l r u l e i s t h a t where a p e r s o n by h i s c o n t r a c t

c h a r g e s h i m s e l f w i t h a n o b l i g a t i o n , p o s s i b l e and l a w f u l , t o

b e performed, h e must perform i n a c c o r d a n c e w i t h t h e con-

tract t e r m s .      Smith v . Zepp ( 1 9 7 7 ) , 173 Mont. 358, 567 P.2d

923; Brown v . F i r s t F e d e r a l S a v i n g s and Loan A s s o c i a t i o n of

G r e a t F a l l s ( 1 9 6 9 ) , 154 Mont. 79, 460 P.2d 97; 17A C.J.S.

C o n t r a c t s , 8459 a t 594. I t h a s a l s o been s t a t e d t h a t a v a l i d

d e f e n s e t o a n a c t i o n on a c o n t r a c t arises when t h e o b l i g a -

t i o n t o perform t h e a c t a l l e g e d l y r e q u i r e d was d e p e n d e n t on
some o t h e r a c t i v i t y which t h e o t h e r p a r t y w a s t o d o , b u t

f a i l e d t o s o perform ( i . e . , performance of a c o n d i t i o n i s

p r e c e d e n t t o t h e r i g h t of payment)        .    See White v. H u l l s , e t

al.    ( 1 9 2 1 ) , 59 Mont. 98, 195 P. 850; 17A C.J.S.                        Contracts,

5452 a t 566.
         I n t h i s i n s t a n c e d e f e n d a n t , i n h i s answer t o t h e com-

p l a i n t , d e n i e d t h a t p l a i n t i f f f u l l y performed under t h e i r

contract.          Defendant t h e n a l l e g e d a t t r i a l t h a t b e c a u s e of

p l a i n t i f f ' s f a i l u r e he was r e l i e v e d o f any c o n t r a c t u a l d u t y

t o r e l e a s e t h e s l a s h d i s p o s a l money t o p l a i n t i f f as payment

for services.            With t h i s b e i n g t h e c a s e , d e f e n d a n t was

e n t i t l e d t o p r e s e n t e v i d e n c e i n s u p p o r t of h i s p o s i t i o n .

        The i s s u e now becomes whether t h e r e j e c t e d e v i d e n c e

s u p p o r t s d e f e n d a n t ' s p o s i t i o n a s s t a t e d above.

        The o f f e r e d e v i d e n c e d e a l s w i t h e x p e n d i t u r e s made by

d e f e n d a n t i n h i r i n g o t h e r s t o complete t h e work a l l e g e d l y

l e f t undone by p l a i n t i f f .         C e r t a i n l y , when a d e f e n d a n t i s

r e q u i r e d t o expend money t o h i r e o t h e r s t o work i n c l e a r i n g

l a n d , which a p l a i n t i f f under c o n t r a c t was t o clear as

"clear a s possible," t h i s gives r i s e t o an inference t h a t

p l a i n t i f f f a i l e d t o f u l l y perform under h i s c o n t r a c t .            Such

i s t h e c a s e h e r e , and t h u s , t h e t r i a l c o u r t s h o u l d have

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

t i f f ) f u l l y performed and w a s e n t i t l e d t o t h e s l a s h d i s p o s a l

money.

        I t s h o u l d be n o t e d t h a t t h i s C o u r t d o e s n o t f i n d t h a t

d e f e n d a n t ' s p o s i t i o n a s t o nonperformance under t h e g i v e n

c o n t r a c t i s determinative i n t h i s case.                  W e merely c o n c l u d e

t h a t d e f e n d a n t s h o u l d have been p e r m i t t e d t o i n t r o d u c e t h e

o f f e r e d e v i d e n c e i n s u p p o r t of t h a t d e f e n s e . Nor do w e f i n d
t h a t t h e c o u r t ' s f a i l u r e t o admit t h e evidence c o n s t i t u t e s

reversible error.               Defendant a t t r i a l was a b l e t o i n t r o d u c e

e v i d e n c e showing t h e c o n d i t i o n of t h e l a n d a f t e r p l a i n t i f f
f i n i s h e d h i s work, a s w e l l a s e v i d e n c e t h a t h e h i r e d o t h e r s

t o f i n i s h work a l l e g e d l y l e f t undone by p l a i n t i f f .            Defen-
d a n t was o n l y d e n i e d t h e i n t r o d u c t i o n of e v i d e n c e i n d i c a t i n g

t h e e x p e n s e s he i n c u r r e d i n h i r i n g t h e o u t s i d e p a r t i e s .
Consequently, i n l i g h t of t h e evidence presented i n support

o f d e f e n d a n t ' s p o s i t i o n , t h e f a c t t h a t he w a s u n a b l e t o

i n t r o d u c e e v i d e n c e a s t o h i s expenses d i d n o t s o p r e j u d i c e

d e f e n d a n t ' s c a s e t h a t a d i f f e r e n t r e s u l t would have been

r e a c h e d had t h e e v i d e n c e been allowed i n .

        I n regard t o defendant's contention t h a t the D i s t r i c t
C o u r t e r r e d i n n o t p e r m i t t i n g h i m t o amend h i s c o u n t e r c l a i m ,
w e acknowledge t h a t even a b s e n t t h e amendment t h e o f f e r e d
e v i d e n c e a r g u a b l y s h o u l d have been a l l o w e d t o show damages

a s t o d e f e n d a n t ' s c l a i m t h a t he l o s t t h e u s e of h i s l a n d as
farmland.         However, b e c a u s e t h i s e v i d e n c e i s n o t o f t h e

n a t u r e t h a t t o e x c l u d e i t r e s u l t s i n a d i f f e r e n t outcome and
b e c a u s e t h e t r i a l c o u r t found f o r p l a i n t i f f , t h e r e b y r e j e c t -

i n g d e f e n d a n t ' s a l l e g a t i o n o f nonperformance a s w e l l a s h i s

c o u n t e r c l a i m , w e need n o t c o n s i d e r t h i s i s s u e f u r t h e r t h a n

t o f i n d t h e r e was no r e v e r s i b l e e r r o r by t h e D i s t r i c t C o u r t .

        A s t o t h e f i n a l i s s u e on a p p e a l , d e f e n d a n t m e r e l y

a s s e r t s t h a t b e c a u s e p l a i n t i f f d i d n o t f u l l y perform p u r s u -

a n t t o t h e i r c o n t r a c t , h e was n o t e n t i t l e d t o p r e v a i l i n

t h i s a c t i o n , and t h u s , i s n o t e n t i t l e d t o a t t o r n e y f e e s .       As

a l r e a d y s t a t e d , d e f e n d a n t was a b l e t o p r e s e n t e v i d e n c e i n

s u p p o r t of h i s d e f e n s e of nonperformance and w a s n o t p r e j u -
diced a t the t r i a l c o u r t l e v e l i n t h i s regard.                 Having t h e n

concluded t h e r e w a s no r e v e r s i b l e e r r o r a t t r i a l , and p l a i n -
t i f f having p r e v a i l e d on a c o n v e r s i o n c l a i m , w e c a n n o t f i n d
t h e D i s t r i c t C o u r t e r r e d i n awarding him a t t o r n e y f e e s .
        The judgment of t h e D i s t r i c t C o u r t i s ' e r e b y a f f i r m e d .
                                                            h
                                                           ,-
W e concur:



    %.A4
      J
     Chief J u s t i c e
                           % 4



            Q'
a     US      e .h
           tices
