                                                No.     83-99

                     I N THE SUPREME COURT OF THE STATE OF MONTANA

                                                        1983




LARRY NARUM,

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



C I T Y OF B I L L I N G S ; BARRY BERLINGER,
and RICHARD WAGNER,

                     Defendants,           Respondents & Cross-appellants.




APPEAL FROM:         D i s t r i c t C o u r t of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t ,
                     I n a n d f o r t h e C o u n t y of Y e l l o w s t o n e ,
                     T h e H o n o r a b l e D i a n e G. B a r z , Judge p r e s i d i n g .


COUNSEL OF RECORD:

         For A p p e l l a n t :

                     P a t t e n & R e n z ; J a m e s A.        P a t t e n & John K .     Addy,
                     B i l l i n g s , Montana

         For R e s p o n d e n t s & C r o s s - A p p e l l a n t s :

                     P e t e r s o n , S c h o f i e l d & L e c k i e ; D a n e C. S c h o f i e l d ,
                     B i l l i n g s , Montana
                     C r o w l e y Law F i r m ; R a n d a l l B i s h o p , B i l l i n g s ,
                     Montana
                     S t e p h e n s & C o l e ; R o b e r t L. S t e p h e n s , B i l l i n g s ,
                     Montana




                                                S u b m i t t e d on B r i e f s :   October 6,           1983

                                                                         Decided:    December 22,           1983



Filed:     DEG 2 2 1,983

                                                8
                         4?/ L k ,
                           dLm                                             -
                                                                           .
                                                Clerk
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of
the Court.
       Larry Narum    filed     a   complaint June     9, 1981 in the
Thirteenth Judicial District Court, County of Yellowstone,
naming as defendants the City of Billings, Barry Beringer and
Richard Wagner.      The complaint requested judgment against the
defendants for twice the alleged value of paint equipment
Narum lost due to defendants1 actions, or $5,600 plus costs.
Following a bench trial, it was found that:              (1) Narum lost
paint equipment valued at $1,843.70 due to the negligence of
the City of Billings; (2) Beringer was unjustly enriched in
the amount of $800 when he sold Narum's equipment to Wagner
for that sum; and (3) Wagner was a bona fide purchaser for
value   without   notice      and    entitled   to   retain     the   paint
equipment.    Judgment was entered November 19, 1982, limiting
Narumls recovery to the actual value of the lost equipment.
Beringer was ordered to pay Narum the $800 by which he was
unjustly enriched and the City was ordered to pay Narum the
remaining $1,043.70.
       A motion was subsequently filed by Narum requesting the
trial court to reconsider its judgment insofar as it failed
to award Narum double damages pursuant to section 70-5-209,
MCA (1981).    In addition, defendant Beringer filed a motion
and supporting memorandum requesting the trial court to amend
that portion of its judgment finding Beringer to have been
unjustly enriched and ordering him to pay Narum $800.                    A
hearing was held December 30, 1982, following which an order
denying both motions was issued.
       A notice of appeal from both the judgment and the order
was filed by Narum on January 26, 1983.               Beringer and the
City    of   Billings    have       filed   cross    appeals,    Beringer
requesting reconsideration of its motion to amend and the
City requesting reconsideration of the judgment against it.
      Larry Narum was hired in 1979 to paint a warming house
at   Terry   Park     in    Billings, Montana.            One   of Narum's
employees completed the paint job on Friday, November 2,
1979.   He then, per instructions from Narum, left the spray
painting equipment by the curb near the warming house to be
picked up by Narum later that evening.
      Barry Beringer noticed the equipment on his way                       to
dinner that evening.             When the equipment was still there on
his return, Beringer decided to call- the police.                    Beringer
testified at trial that he presumed the equipment belonged to
the City of Billings since it had obviously been used to
paint a public building in a city park                    and that, as a
concerned taxpayer, he notified the police of the equipment
in order to prevent its theft.                Beringer remained with the
equipment     until        the     police     arrived,   then       told   the
investigating officer that if no one claimed the property, he
would be interested in having it.              The investigating officer
told Beringer to check with the department in thirtv days and
if no one had claimed the property, it would be his.
     The     investigating        officer's    report    of   the    incident
contained the following information:
     1. Complainant reports he found several items near
     the warming house in Terry Park.
     2. Complainant also reports that someone had been
     painting the warming house and that the items
     probably belong to that person.
     3. The found items consist of:    (1) a small prop
     air compressor; (2) an eight foot ladder; (3) three
     gallons of paint; (4) five gallon mixing cans; (5)
     one five gallon can containing an unknown chemical;
     (6) an extension cord; and (7) a paint scraper.
     Reringer checked with the police department after the
thirty days had passed and was told by property Officer
Stanley Frank that he would have to wait another sixty davs
before he could claim the property.                Beringer testified at
trial that Officer Frank told him:
     "'Technically, we have to hold it for a year and
     then advertise it, and then we will give it to
     you. ' But he said, 'we don't have the budget and
     we don't have the place to store it, so we just
     wait 90 days. And then after 90 days, that allows
     people to go on vacation, extended vacation, and
     stuff.' And that's what he told me." Tr. p. 20.
     At the end of the ninety days, Beringer once again
contacted Officer Frank and was told he could claim the
property.     Beringer and Officer Frank testified in detail
concerning their conversation when Beringer picked up the
property.
     BERINGER:
     "Q. Was there any time that anyone conveyed to you
     that the idea that there had been any report filed
     that this had been lost or was missing or had been
     stolen?
     "A.    No.
     "Q. Did you have any idea that such a report had
     been filed?
     "A.    No.
     "Q. Would it be fair to say that as far as you
     could tell from the information given to you by the
     police report that the property was abandoned?
     "A.    Yeah.
    "Q. Did you       ask   whether   you    could      sell   the
    property?
    "A. I asked if it was mine, and I was told that it
    was.
    "Q. Prior to the time that property was delivered
    to you by the City, on February lst, 1980, did you
    think you had any rights whatsoever to that
    property?
     "A.    Before February?
     "Q. Before it was delivered            to   you,   did    you
     consider it yours in any way?
     "A.    No.
     "Q.    Whose do you think it was?
     "A.    The City's.   (Tr. pp. 21, 22)
    OFFICER FRANK:
    "Q. Did you tell Mr. Beringer when he came to pick
    up the property that no claims had been filed on
    it?
     "A.     I told him that I didn't receive one.
     "Q.    So you indicated to him that it was unclaimed?
     "A.    When I gave it to him.
     "Q.  It would have been wrong to give it to him if
     you had knowledge that someone else owned it?
     "A.     (Nods head affirmatively.) (Tr. p. 46)
     A witness to most of the conversation, David Webber,
confirmed Beringer's testimony.
     Relying on Officer Frank's comments, Reringer sold the
paint eqiupment to Richard Wagner for $800.            Evidence showed
the value of the equipment to be $1843.70.
     Meanwhile, Narum     had     telephoned    the   Billings Police
Department on November 6, 1979 to report the theft of his
property.     A written report was to have been filed by an
employee while Narum was on vacation.          The employee failed to
do so.     Therefore, Narum's wife filed a written report with
the police on December 21, 1979, more than thirty but less
than ninety days after Beringer reported the property to the
police.
     The property officer searched the department's computer
twice during the initial thirty day period for a written
report concerning the theft of the paint equipment.           Despite
retaining the property an additional sixty days, no other
search of the stolen property reports was ever made.            Thus,
the property officer was unaware that the equipment had been
reported as stolen when he released it to Beringer.
    At trial, Assistant Police Chief Sampson testified that
it is the duty of the investigating officer to follow-up on
stolen property reports         (tr. p.   50) and the duty of the
property    officer to check the computer for any reported
thefts of property meeting the description of that in his
possession     (tr. p.   61).      Neither   officer    fulfilled   his
responsibilities regarding this property.
     Upon learning that the paint equipment he had purchased
from Beringer was equipment previously reported stolen by
Narum,    Richard   Wagner     contacted   Beringer   and     a   meeting
between a representative of the police department, Beringer,
Narum and Wagner followed.          However, the participants were
unable to reach a mutually           satisfying solution and          this
action was commenced.
    The issues presented by Narum in this appeal of the
District Court's decision are:
     1.   Whether the District Court erred in finding that the
City of Rillings had been negligent, rather than grossly
negligent, in its handling of Narum's property?
     2.   Whether the District Court erred in holding that the
City of Billings and Barry Beringer were separately liable
rather than jointly and severally liable to Larry Narum for
the loss of his property.
     3.   Whether the District Court erred in failing to hold
the finder      (City of Billings) liable to Larry Narum for
double    the   value    of   lost property, pursuant       to     section
70-5-209, MCA (1981)     .
    The issues raised on cross appeal are:
     1.   Whether       the   District   Court   erred   in       entering
judgment against defendant Reringer          on the basis of unjust
enrichment?
     2.   Whether the District Court erred in holding that the
City of Billings is liable to Larry Narum, or to any other
party?
    The District Court erred in finding the Billings Police
Department to be the finder of the lost paint equipment,
pursuant to sections 70-5-101, et seq., MCA (1981).                 It is
difficult to ascertain the intent of the 1895 legislature
when it promulgated that chapter.            However, it is highly
unlikely that the legislative intent was for the chapter to
apply to municipal police departments.            Rather, we interpret
that   chapter to    apply    to the private           citizen who    finds
property and chooses to take charge of the property in order
to find its rightful owner.           Section 70-5-102, MCA          (1981).
       Barry Beringer became the statutory finder of the paint
equipment by discovering the property and exerting control
over it.     If control was not exercised in reporting to the
police it was exercised when Beringer ultimately obtained the
subject equipment and sold it.             Although Beringer may well
have acted in good faith he became obligated to follow the
statutory procedures       for locating the        true owner of        the
property.    Since Beringer failed to follow those procedures

and chose instead to treat the property as his own by selling
it to an innocent third party, he became liable to the true
owner of the property for its value.              In addition, section
70-5-209, MCA (1981), penalizes finders for failing to follow
the statutorily mandated procedures by holding them liable to
the true owner for double the value of the lost property.
Therefore,   since   the     value    of    the   paint    equipment    was
$1,843.70,   Barry   Beringer    is    liable     to    Larry   Narum   for
$3,687.40.
       However, the evidence presented at trial supports the
conclusions of the District Court that              (1)     "The City of
Billings knew the true owner of the property as a result of
information provided to the City by Narum on December 21st,
1979, and therefore had a duty to use reasonable diligence"
to return the property to the owner; (2) the City of Billings
negligently dealt with the property while it was in its
possession, and "such negligence was the proximate cause of
the damages sustained by Plaintiff Narum"; and (3) Beringer
justifiably relied on representations made to him by the City
of Billings indicating that the property was his.                     These
conclusions support a finding for Beringer on his cross-claim
against the City of Billings, which asserts that the City's
negligence wa.s the primary cause of Narum's loss.
     Since the District Court held the City of Billings to be
the "finder" and thus liable to Narum, Beringer's cross-claim
was not considered.    We therefore remand this case to the
District Court for judgment in Narum's favor for $3,687.40
against Beringer and in Beringer's favor on his cross-claim
against the City of Billings.   In its judgment, the District
Court shall find the City's     liability to Beringer to be
$2,887.40.   That amount represents the total damages suffered
by Beringer due to the Citv's negligence ($3,687.40), less
the $800 which Beringer received when he sold the equipment.
     Remanded for entry of judgment in accordance with this

opinion.




We concur:
           IN THE SUPREME COURT OF THE STATE OF MONTANA


                             No. 83-99

LARRY NARUM ,
     Plaintiff, Appellant
     and Cross Respondent,
            VS.

CITY OF BILLINGS, BARRY
BERINGER and RICHARD WAGNER
     Defendants, Respondents,
     and Cross Appellants.


                                                 CLERK OF SUPREME COURT
                             O R D E R             STATE OF MONTANA



     The Court has considered the petition for rehearing
filed by     Defendant, Barry Beringer, pursuant to Rule 34
M.R.App.Civ.P.     and finds that the original opinion should be
modified    by    striking   from   the   concluding paragraph        the
following language:
     "We therefore remand this case to the District
     Court for judgment in Narum's favor for $3,687.40
     a.gainst Beringer and in Beringer's favor on his
     cross-claim against the City of Billings. In its
     judgment, the District Court shall find the City's
     liability to Beringer to be $2,887.40.         That
     amount represents the total damages suffered by
     Beringer due to the City' s negligence ($3,687.40),
     less the $800 which Beringer received when he sold
     the equipment."
     We substitute therefore the following language:
     "We therefore remand this case to the District
     Court for a determination of damages in favor of
     Beringer on his cross-claim against the City of
     Billings.   The District Court may consider any
     damages legally caused by the negligence of the
     City of Billings including attorneys fees and
     costs. "
     With this modification the petition for rehearing is
denied.




                                    Justices
