                                       NO. 83-78

                       IN THE SUPREME: COURT OF THE STATE OF MONTANA

                                         1983



SURVCO, a Montana Corporation,

                                       Plaintiff and Appellant,



KENYON NOBLE READY-MIX, a Montana
Corporation,

                                       Defendant and Respondent.



Appeal from:      District Court of the Eighteenth Judicial District,
                  In and for the County of Gallatin
                  Honorable W. W. Lessley, Judge presiding.

Counsel of Record:

           For Appellant:

                 Ron Burgess, Pro Se, Bozeman, Montana

           For Respondent:

                 Kirwan and Barrett, Bozeman, Montana



                                        Submitted.on briefs:   May 5, 1983

                                                    Decided:   June 16, 1983

Filed :
          .''   1 1 5 1983
Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d                t h e O p i n i o n of       the
Court.

       Survco        brought           this     action      in     the      District           Court     of    the
Eighteenth J u d i c i a l              D i s t r i c t , G a l l a t i n County,       seeking          payment

f o r photographic services.                        The D i s t r i c t C o u r t found S u r v c o d i d

n o t s u b s t a n t i a t e i t s c l a i m a g a i n s t Kenyon Noble and judgment was
e n t e r e d i n f a v o r of Kenyon N o b l e .             Survco appeals.

       I n May 1 9 8 0 , W i l l i a m O g l e ,           owner of Kenyon Noble                      contacted
Ron     Burgess         of        Survco      to    discuss       the       availability          of      aerial
p h o t o g r a p h s of Kenyon N o b l e ' s           gravel p i t located near Belgrade,

Montana.           Burgess             informed Ogle         aerial         photographs          of     the p i t
c o u l d be o b t a i n e d t h r o u g h P r o f e s s i o n a l C o n s u l t a n t ' s ,    Inc.,     (PCI),

an    aerial       photographing                service      located         in    Missoula,           Montana.

B u r g e s s a d v i s e d O g l e s i n c e PC1 would h a v e t o f l y t o Bozeman from
Missoula,          the       cost       would      be   reduced        if    PC1 had           other      aerial
mapping p r o j e c t s on t h e                same    flight.          Ogle      then discussed              the

p o s s i b i l i t y of o b t a i n i n g a e r i a l p h o t o g r a p h s of O g l e ' s l u m b e r y a r d
l o c a t e d on N o r t h Rouse i n Bozeman.

      Burgess estimated PCI's                       cost to        f l y t o Bozeman t o be $ 3 0 0 .

B u r g e s s e x p l a i n e d O g l e would a l s o have t o pay f o r t h e f i e l d work
necessary         to     place         control      points       for     the      aerial        photography ,
film,      and f i l m r e p r o d u c t i o n c o s t s .         Burgess t e s t i f i e d           he e s t i -

mated      t h e t o t a l c o s t f o r t h e B e l g r a d e and N o r t h Rouse s i t e s a t
$1,000.         A t that           time Ogle a l s o ordered four c o l o r enlargements
o f e x i s t i n g a e r i a l p h o t o g r a p h s of c o m m e r c i a l p r o p e r t y l o c a t e d i n
Livingston.            B u r g e s s t e s t i f i e d he c a l l e d PC1 and o b t a i n e d a q u o t e
o f a b o u t $270 f o r t h e f o u r p r i n t s .             Ogle t e s t i f i e d he u n d e r s t o o d
the     prints         were       to    cost       about    $30     apiece.            In      addition,        he
t e s t i f i e d he a g r e e d t o h a v e B u r g e s s p e r f o r m t h e work and a s k e d t o
b e a d v i s e d of any c o s t i n c r e a s e s o v e r t h e e s t i m a t e s .

      From May           t o October            1980,      Ogle made         numerous           unsuccessful

a t t e m p t s t o c o n t a c t B u r g e s s r e g a r d i n g t h e p r o g r e s s of t h e a e r i a l
photography.                 In    October         1980,    Ogle       met     with      an     employee        of
Survco,        Mike F o l e y ,         regarding       additional           a e r i a l photography            of
Kenyon N o b l e ' s        Sourdough g r a v e l p i t l o c a t e d            i n Bozeman and           its
Logan g r a v e l p i t l o c a t e d i n Logan, Montana.                        Ogle d i d n o t o b t a i n
a n e s t i m a t e of      t h e c o s t of t h e S o u r d o u g h and Logan p h o t o g r a p h s .

Foley      testified          he     expressed            his     concern      to   Burgess        that    the
s c o p e of O g l e ' s work had i n c r e a s e d c o n s i d e r a b l y b u t B u r g e s s t o l d

him t o p r o c e e d w i t h t h e work.
       I n J a n u a r y 1 9 8 1 , PC1 c o n d u c t e d t h e a e r i a l p h o t o g r a p h y of t h e

B e l g r a d e , S o u r d o u g h , and N o r t h Rouse l u m b e r y a r d .          The PC1 f l i g h t
was made s p e c i f i c a l l y f o r O g l e ' s work and n o t i n c o n j u n c t i o n w i t h

any other p r o j e c t s .          A f t e r PC1 t o o k t h e a e r i a l p h o t o g r a p h s , F o l e y
received        contact        prints       from PCI.               Ogle     then    selected        several
p r i n t s and o r d e r e d e n l a r g e m e n t s .

       On March 5 , 1 9 8 1 ,            S u r v c o s e n t Ogle two b i l l i n g            statements.
The f i r s t is e n t i t l e d " G r a v e l P i t - B e l g r a d e " and shows a t o t a l
amount d u e of $887.                 The s e c o n d d e s c r i b e d " P h o t o E n l a r g e m e n t s @

Livingston,          MT."      and     shows a t o t a l            amount due of          $270.       These
b i l l s were p a i d by O g l e i n f u l l .
       I n May 1 9 8 1 , Ogle o r d e r e d more p h o t o e n l a r g e m e n t s of t h e f o u r

aerial projects.                 Ogle t e s t i f i e d         he u n d e r s t o o d t h e c o s t of    the

a d d i t i o n a l p r i n t s was n o t       included           i n t h e March b i l l i n g      state-
m e n t s which were a l r e a d y p a i d .                S u b s e q u e n t l y , Ogle r e c e i v e d t h e

additional prints.                 On A u g u s t 2 8 , 1 9 8 1 , S u r v c o s e n t O g l e a t h i r d

b i l l s e e k i n g payment of $ 2 , 0 5 5 f o r work d o n e on t h e f o u r p h o t o
projects.           S u r v c o c l a i m e d $ 2 , 0 5 5 had b e e n p a i d t o PC1 b y S u r v c o

f o r t h e Ogle p r o j e c t s .          Ogle r e f u s e d        t o pay.       S u r v c o t h e n com-
menced       t h i s a c t i o n s e e k i n g payment             from O g l e     i n t h e amount of
$2,055.         A    t r i a l was h e l d on November 8 , 1 9 8 2 , and on November
23,    1982,        the D i s t r i c t Court entered                  i t s f i n d i n g s of    f a c t and
c o n c l u s i o n s of    law.        The D i s t r i c t        Court     found      Survco did         not
s u b s t a n t i a t e i t s c l a i m by a p r e p o n d e r a n c e of t h e e v i d e n c e .          The

District        Court       entered        judgment             on December         6, 1 9 8 2 .      Survco

appeals     .
      Survco's          first        claim      of        error      stems       from    the       following

c o n c l u s i o n of t h e D i s t r i c t C o u r t :
                " P l a i n t i f f p l e a d a n a c t i o n b a s e d upon a n
                e x p r e s s c o n t r a c t b u t attempted t o prove a
                c a u s e of a c t i o n i n quantum m e r u i t ; i t i s f a t a l
                t o p l a i n t i f f ' s c a u s e t o a l l e g e and p r o v e a n
                e x p r e s s c o n t r a c t and t o a t t e m p t t o r e c o v e r
                judgment b a s e d upon a t h e o r y of quantum m e r u i t
                b e c a u s e t h e t e r m s of t h e c o n t r a c t l i m i t s u c h
                recovery t o t h e agreed p r i c e f o r t h e s e r v i c e s
                rendered."
       Survco argues              this     i s a m i s s t a t e m e n t of    Montana         law.     The

District          Court,        in    a    memorandum,          explained         its     position        as
follows:

                " T h i s is b a s i c a l l y a c a s e c e n t e r i n g a r o u n d t h e
                f a c t s t o d e t e r m i n e t h e i n t e n t of t h e p a r t i e s
                and t h e t e r m s of t h e a g r e e m e n t a l l e g e d t o have
                occurred.

                " T h e r e is no d i s p u t e t h a t t h e y e n t e r e d i n t o a
                c o n t r a c t f o r a e r i a l survey photography.               The
                r e a l c r u x of t h e d i f f e r e n c e i s t h e p r i c e f o r
                such s e r v i c e s . P l a i n t i f f apparently takes the
                p o s i t i o n of an e x p r e s s c o n t r a c t and t h e n moves
                i n t o a n a r e a of quantum m e r u i t . T h i s is where
                it g e t s its d i f f i c u l t y .      K e n e a l l y v. O r g a i n ,
                37 S t . R p t r . 1 5 4 , 606 P.2d 127 ( 1 9 8 0 ) .
                I1 I
                       . . .    ( T ) h e r e c a n be no e x p r e s s o r i m p l i e d
                c o n t r a c t f o r t h e same t h i n g e x i s t i n g a t t h e
                same time.'                 Weston v. Montana S t a t e Hwy.
                Com'n, 37 S t . R p t r . 236, 2 3 8 , 606 P.2d 1 5 0 , 1 5 2
                (1980).
                "Even a l l o w i n g quantum m e r u i t , t o go f u r t h e r
                and a l l o w a d d i t i o n a l c o s t s when t h o s e a d d i -
                t i o n a l e x p e n s e s s h o u l d have b e e n f o r e s e e n , w e
                run into r e a l d i f f i c u l t y i n contract for-
                mation.          Modern B u i l d e r s , I n c . of Tacoma v.
                Manke, 27 Wash.App. 8 6 , 615 P.2d 1 3 3 2 ( 1 9 8 0 ) .
                "The p l a i n t i f f h e r e is by i t s a c t s bound                 by
                i t s own s t a k e s and e v e n i f we s h o u l d go t o             the
                f u r t h e r s t e p and i g n o r e t h e c o n t r a c t law         the
                p l a i n t i f f f a i l e d t o p r o v e t h e c o s t of            the
                e x t r a expenses."
      Contracts are either                   express or         implied,       a n e x p r e s s is one

the    t e r m s of       which a r e s t a t e d      i n words,       an implied         is one t h e
e x i s t e n c e and t e r m s of which a r e m a n i f e s t e d by c o n d u c t .            Section
28-2-103,         MCA.       H e r e , t h e r e i s no q u e s t i o n B u r g e s s and O g l e made

a n e x p r e s s c o n t r a c t t o o b t a i n a e r i a l p h o t o g r a p h s of t h e B e l g r a d e
gravel p i t ,          t h e N o r t h Rouse l u m b e r y a r d ,   and t h e c o m m e r c i a l p r o -
perty      in     Livingston.              In    October       1980,      Ogle     contracted         with

S u r v c o t o o b t a i n a e r i a l p h o t o g r a p h s of      t h e Sourdough and Logan

gravel pits.              I n May 1 9 8 1 , Ogle o r d e r e d a d d i t i o n a l p h o t o e n l a r g e -
m e n t s of     the four a e r i a l projects.                 In these projects the cost
was     not      expressly        stated          but     the       District           Court       found      Ogle
assumed t h a t t h i s s e r v i c e would be s i m i l a r t o t h e a e r i a l p h o t o -
graphy ordered previously.                         Thus,       t h e D i s t r i c t Court appears t o

h a v e f o u n d t h e a d d i t i o n a l work          requested           after        the    initial       was
g o v e r n e d by a n i m p l i e d c o n t r a c t , t h e t e r m s b e i n g s i m i l a r t o t h a t

of the express c o n t r a c t .
       The D i s t r i c t C o u r t l i m i t e d S u r v c o ' s r e c o v e r y t o t h e March 5 ,
1981,      billing        statement           because,         "it       is    fatal        to    plaintiff's
c a u s e t o a l l e g e and p r o v e an e x p r e s s c o n t r a c t and t o a t t e m p t t o

r e c o v e r judgment b a s e d on a t h e o r y of q u a n t u m m e r u i t b e c a u s e t h e
t e r m s of t h e c o n t r a c t l i m i t s u c h r e c o v e r y t o t h e a g r e e d p r i c e f o r

t h e s e r v i c e s rendered."             W i n t e r p r e t t h i s s t a t e m e n t t o mean t h e
                                              e
District        Court     o n l y allowed            recovery           for    what        it    found     to    be
payment        under     the express contract.                          It    is f a t a l t o a l l e g e a n
implied        contract        and      prove       an     express           contract,           however,       one

having      an e x p r e s s    contract           which       he       has performed             may    sue     in
quantum m e r u i t       and u s e t h e c o n t r a c t a s p r o o f               of    the reasonable

v a l u e of     his services.               K e n e a l l y v.     Orgain (1980),                         Mont.

---- , 606         P.2d     1 2 7 , 1 2 9 , 37 S t . R e p .         154.          T h i s is what S u r v c o
attempted.          S u r v c o a r g u e s t h e l i m i t a t i o n of i t s r e c o v e r y b a s e d on
the D i s t r i c t Court's            i n t e r p r e t a t i o n of    c o n t r a c t law c o n s t i t u t e s

reversible error.              W agree.
                                e
       Ogle      testified        he      did     not     think         the    March        5,     1981,      bill

i n c l u d e d a l l t h e a m o u n t s owing on t h e a e r i a l p h o t o g r a p h s , he j u s t
did not        b e l i e v e S u r v c o was e n t i t l e d t o a n e x t r a $ 2 , 0 5 5 .                  Ogle
d o e s n o t a p p e a r t o d i s p u t e t h e e x i s t e n c e of a n i m p l i e d c o n t r a c t
for    the additional            work.           He has a c c e p t e d            t h e b e n e f i t s of     the
c o n t r a c t by o b t a i n i n g p r i n t s of        a l l t h e a e r i a l p h o t o g r a p h pro-
jects.         W f i n d O g l e m u s t be r e q u i r e d
                e                                                       t o pay f o r t h a t which he
h a s r e c e i v e d and t h a t t h e D i s t r i c t C o u r t ' s l i m i t a t i o n of S u r v c o ' s
r e c o v e r y was i n e r r o r .
       Survco has a l s o a l l e g e d a s e r r o r t h e District C o u r t ' s r e f u s a l

t o a d m i t p l a i n t i f f ' s e x h i b i t number 5 w h i c h i s an i t e m i z e d s t a t e -

ment     prepared         by   Survco          showing        costs          and     disbursements            con-
cerning t h e a e r i a l photography.                  Ogle o b j e c t e d t o t h e a d m i s si o n
of    this    exhibit        claiming        it    contains       hearsay        statements         con-

cerning      PCI's      total      and     itemized        charges.           Ogle     contends         an
employee of PC1 m u s t be c a l l e d a s a w i t n e s s t o t e s t i f y a s t o t h e
amounts it b i l l e d Su rv c o f o r t h e a e r i a l photography,                   prints,       and

enlargements.           W f i n d no e r r o r i n a l l o w i n g S u r v c o ' s r e c o r d k e e p e r
                         e

t o t e s t i f y a s t o t h e amounts S u r v c o c l a i m s i t h a s p a i d t o PC1 f o r
t h e photography.           T h e s e r e c o r d s were k e p t i n S u r v c o ' s r e g u l a r l y -

conducted       business        activity          and   admissible         under      R u l e 8 0 3 (6),
M.R.Evid.        S u r v c o c o u l d p r o v i d e s t r o n g e r f o u n d a t i o n by c a l l i n g a
w i t n e s s from PC1 t o e s t a b l i s h c r e d i b i l i t y f o r t h e c h a r g e s .         We

f i n d no need f o r f u r t h e r comment upon t h i s i s s u e f o r p u r p o s e s of
retrial.
      R e v e r s e d and remanded f o r a new t r i a l .




W e concur:


     ~AJw&&
  Chief J u s t i c e
