                                        No. 79-52
              IN THE SUPREME COURT OF THE STATE OF MONTANA
                                             1981



SEVEN SEAS IMPORT-EXPORT       &       MERCANTILE,
INC. , a Mont. Corp. ,
                                         Plaintiff and Appellant,


HANDEE FOODS, INC., a Mont. Corp., and
FREDERICK W. KRIEGER, Individually,
                                         Defendants and Respondents.




    .1 from:     District Court of the Fourth Judicial District,
                 In and for the County of Missoula, The Honorable
                 James B. Wheelis, Judge presiding.

Counsel of Record:
     For Appellant:
                 Raymond W. Brault, Helena, Montana
         For Respondent :
                 Tipp, Hoven       &    Skjelset, Missoula, Montana




                                         Submitted on Briefs:    October 9, 1980

                                                     Decided :   JAB 1 4   ma
Filed:    JAR 1 4 TPir
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 .

         Seven S e a s Import-Export                  &    Mercantile, Inc.,        appeals a

summary judgment g r a n t e d by t h e D i s t r i c t C o u r t of t h e F o u r t h

J u d i c i a l D i s t r i c t , Missoula County, t h e Honorable James B.

Wheelis p r e s i d i n g , i n f a v o r of Handee Foods, I n c . ,                  and

F r e d e r i c k W.   Krieger.

         On August 25, 1978, a p p e l l a n t f i l e d s u i t a l l e g i n g t h r e e

claims f o r r e l i e f .         Each c l a i m was based on a c o n s t a b l e ' s

s a l e , on May 29, 1974, of goods l e f t a t a warehouse owned by

Handee Foods, I n c . ,            and r e n t e d t o Raymond B r a u l t , p r e s i d e n t

of Seven S e a s Import-Export                    &   Mercantile, Inc.

        B r a u l t r e n t e d a p o r t i o n of t h e warehouse from r e s p o n -

d e n t i n 1973.         H e a p p a r e n t l y needed t h e s p a c e t o s t o r e

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

c o n s t r u c t i o n of m e t a l b u i l d i n g s .

        A p p e l l a n t a l l e g e s t h a t i n March 1974 i t became neces-

s a r y t o t e r m i n a t e t h e r e n t a l agreement w i t h Handee Foods t o

a l l o w a p p e l l a n t ' s performance on c e r t a i n o t h e r c o n t r a c t

matters outside t h e state.                      Seven S e a s a t t h i s t i m e was i n

a r r e a r s i n r e n t a l payments amounting t o a p p r o x i m a t e l y $896.

        Appellant f u r t h e r a l l e g e s t h a t B r a u l t wrote t o respon-

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

q u a n t i t y o f t h e i n s u l a t i o n s t o r e d i n t h e warehouse e q u a l i n

w h o l e s a l e p r i c e t o t h e amount of r e n t owing.               The b a l a n c e of

t h e i n s u l a t i o n was t h e n a l l e g e d l y s o l d by a p p e l l a n t t o

v a r i o u s o t h e r b u s i n e s s c o n c e r n s which w e r e t o l d t h e y c o u l d

o b t a i n t h e i r r e s p e c t i v e q u a n t i t i e s a t r e s p o n d e n t ' s warehouse.
         Respondent was a l l e g e d l y informed o f t h e o t h e r pur-

c h a s e r s and was t o r e l e a s e t h e i n s u l a t i o n when t h e y came t o

p i c k i t up.        A p p e l l a n t c o n t e n d s , however, r e s p o n d e n t r e f u s e d

t o r e l e a s e t h e i n s u l a t i o n , l a i d c l a i m t o t h e e n t i r e t y of t h e
s t o r e d i n s u l a t i o n , and t h e n i m p r o p e r l y s o l d i t , r e t a i n i n g

t h e proceeds.

         ~ e s p o n d e n t ,by way o f answer, d e n i e d b e i n g c o n t a c t e d by

B r a u l t as t o h i s need t o t e r m i n a t e t h e r e n t a l agreement;

d e n i e d a c c e p t i n g any q u a n t i t y of i n s u l a t i o n a s payment of

a p p e l l a n t ' s r e n t ; d e n i e d b e i n g informed of t h e s a l e o f t h e

b a l a n c e of t h e i n s u l a t i o n t o o t h e r b u s i n e s s c o n c e r n s ; and

d e n i e d t h a t any p u r c h a s e r s came t o p i c k up t h e i r r e s p e c t i v e

quantities.            Respondent t h e n a d m i t s s e l l i n g t h e i n s u l a t i o n

s t o r e d i n i t s warehouse f o r nonpayment of r e n t by a p p e l l a n t .

         A f t e r t h e c o m p l a i n t was f i l e d , a p p e l l a n t s e r v e d v a r i o u s

i n t e r r o g a t o r i e s on r e s p o n d e n t .   Respondent, i n answering

them, r e v e a l e d t h a t t h e i n s u l a t i o n was s o l d on May 29, 1974,

t o Handee Foods, I n c . ,               t h e h i g h e s t b i d d e r , f o r $2,424.55.

Respondent a l s o s t a t e d t h a t t h e s a l e was conducted p u r s u a n t

t o s e c t i o n 71-3-1203,           MCA,      by a c o n s t a b l e f o r t h e J u s t i c e

C o u r t a t r e s p o n d e n t ' s warehouse.               The s a l e w a s a d v e r t i s e d by

p o s t i n g n o t i c e on May 1 6 , 1974, i n f i v e p u b l i c p l a c e s i n

Missoula County.

        Respondent a l s o s e r v e d i n t e r r o g a t o r i e s on a p p e l l a n t .

However, t h e y w e r e n e v e r answered.                     No s a n c t i o n s w e r e re-

q u e s t e d by r e s p o n d e n t , and, t h u s , t h e i n t e r r o g a t o r i e s w e r e

n o t p a r t o f t h e r e c o r d s u b m i t t e d on t h e motion f o r summary

judgmen t     .
        Respondent f i l e d i t s motion f o r summary judgment on

March 23, 1979.               A h e a r i n g on t h e m a t t e r w a s h e l d on ~ p r i l

9 , 1979, a f t e r which t h e D i s t r i c t C o u r t g r a n t e d t h e motion,
f i n d i n g t h a t a l l c l a i m s b r o u g h t by a p p e l l a n t w e r e b a r r e d by

a p p l i c a b l e s t a t u t e s of l i m i t a t i o n .     A t the t i m e the ~ i s t r i c t

C o u r t made i t s d e c i s i o n , t h e s u b m i t t e d r e c o r d i n c l u d e d t h e

c o m p l a i n t , answer, r e s p o n d e n t ' s answers t o i n t e r r o g a t o r i e s ,
and a n a f f i d a v i t , f i l e d t h e day o f t h e h e a r i n g , s t a t i n g t h a t
F. ~ i c k
         Baker had p u r c h a s e d a q u a n t i t y o f i n s u l a t i o n from

a p p e l l a n t b u t was d e n i e d a c c e s s t o t h e goods by r e s p o n d e n t .

        A p p e l l a n t moved t o v a c a t e t h e c o u r t ' s o r d e r on J u n e 8 ,

1979.       However, c o u n s e l f a i l e d t o n o t e t h e m a t t e r f o r h e a r -

ing.      A f t e r r e c e i p t of t h e motion t o v a c a t e , r e s p o n d e n t

s e r v e d on a p p e l l a n t a n o t i c e t h a t t h e motion was deemed

d e n i e d p u r s u a n t t o Rule 59, M.R.Civ.P.,               i n t h a t i t had n o t

been n o t e d o r h e a r d w i t h i n t e n d a y s of s e r v i c e a s r e q u i r e d .

        Summary judgment was e n t e r e d on December 1 6 , 1980, and

Seven S e a s a p p e a l s .

        A p p e l l a n t r a i s e s numerous c o l l a t e r a l c o n t e n t i o n s on

appeal.        The s o l e m a t t e r a t i s s u e , however, i s whether t h e

D i s t r i c t C o u r t was p r o p e r i n f i n d i n g t h a t a p p e l l a n t ' s c l a i m s

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

p r o p e r i n g r a n t i n g r e s p o n d e n t ' s motion f o r summary judgment.

        I n d e t e r m i n i n g whether t h e p e r i o d o f l i m i t a t i o n h a s

e x p i r e d i n a g i v e n c a s e , i t i s n e c e s s a r y t o examine two

p o i n t s i n time.       F i r s t , when t h e d i d t h e c a u s e of a c t i o n

which gave r i s e t o t h e s u i t a c c r u e ?            Second, when was t h e

a c t i o n commenced?          Engine R e b u i l d e r s , I n c . v . Seven S e a s

Impor t-Expor t        &   M e r c a n t i l e (198 0 )   ,        Mont.              ,   615

P.2d 871, 37 St.Rep.               1406.

        Rule 3 , M.R.Civ.P.,              provides t h a t a c i v i l a c t i o n i s

commenced upon t h e f i l i n g of t h e c o m p l a i n t .              I n t h i s in-

s t a n c e , t h e s u i t w a s i n i t i a t e d on August 26,          1978.

        A s t o when t h e c a u s e of a c t i o n a c c r u e d and t h e l i m i t a -

t i o n p e r i o d t h u s s t a r t e d t o r u n , i t i s n e c e s s a r y t o examine

t h e p a r t i c u l a r b a s i s and t h e o r i e s upon which a p p e l l a n t s e e k s

relief.
        A s a b a s i s f o r h i s c a u s e of a c t i o n , a p p e l l a n t a l l e g e s

i n i t s c o m p l a i n t t h a t r e s p o n d e n t took improper c o n t r o l o v e r

t h e i n s u l a t i o n s t o r e d i n i t s warehouse; s o l d i t w i t h o u t

a u t h o r i t y and t h e n r e t a i n e d t h e p r o c e e d s .   In asserting this

c a u s e of a c t i o n , a p p e l l a n t makes a c l a i m f o r r e c o v e r y f i r s t
on a t h e o r y t h a t a c o n s t r u c t i v e t r u s t was e s t a b l i s h e d whereby

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

t h e r e f r o m f o r t h e b e n e f i t of a p p e l l a n t .

        A p p e l l a n t t h e n a s s e r t s a second t h e o r y of r e c o v e r y ,

sounding i n t o r t ( c o n v e r s i o n ) , c o n t e n d i n g t h a t r e s p o n d e n t

s o l d t h e i n s u l a t i o n a t a n i m p r o p e r l y conducted s a l e and,

t h u s , i s l i a b l e f o r t h e v a l u e of t h e goods.

        Appellant f i n a l l y contends, a s a t h i r d claim f o r r e l i e f ,

t h a t due t o t h e w i l l f u l and wanton d i s r e g a r d of i t s r i g h t s ,

i t i s e n t i t l e d t o exemplary damages.

        Upon r e v i e w of a p p e l l a n t ' s c o m p l a i n t , i t i s a p p a r e n t

t h a t t h e a l l e g e d improper a c t i v i t y g i v i n g r i s e t o a p p e l -

l a n t ' s c l a i m of r e c o v e r y o c c u r r e d on o r p r i o r t o t h e d a t e

r e s p o n d e n t had t h e i n s u l a t i o n s o l d , May 29, 1974.            Conse-

q u e n t l y , o v e r f o u r y e a r s have p a s s e d between t h e a c c r u a l of

t h e c a u s e of a c t i o n and t h e commencing of s u i t .

        A p p e l l a n t c o n t e n d s t h a t , i n d e t e r m i n i n g when t h e c a u s e

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

t i o n w a s s o l d b u t t o t h e d a t e a p p e l l a n t made a demand f o r

t h e r e t u r n of t h o s e goods, J u l y 1 9 , 1978.               Appellant b a s i s

t h i s argument on a n a l l e g a t i o n t h a t i t w a s w i t h o u t knowledge

of t h e s a l e u n t i l i t made a demand f o r t h e r e t u r n of t h e

insulation.

        I n r e j e c t i n g a p p e l l a n t ' s argument, we n o t e t h a t when a
c o u r t i s p r e s e n t e d w i t h a motion f o r summary judgment,                    it

must r e l y on t h e s u b m i t t e d p l e a d i n g s , d e p o s i t i o n s , answers
t o i n t e r r o g a t o r i e s and a d m i s s i o n s on f i l e , t o g e t h e r w i t h any

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

motion.         Rule 56 ( c ), M.R.Civ.P.               The D i s t r i c t C o u r t w i l l n o t

be h e l d i n e r r o r on t h e b a s i s of documents n o t b e f o r e i t a t

t h e t i m e it renders i t s decision.                   Baylor v. Jacobson ( 1 9 7 6 ) ,

170 Mont. 234, 552 P.2d 55.

        I n t h i s i n s t a n c e t h e a l l e g a t i o n of l a c k of knowledge,

demand and t h e n r e f u s a l t o r e t u r n t h e goods was n o t r a i s e d

i n t h e c o m p l a i n t , t h e answer, t h e i n t e r r o g a t o r i e s o r i n any

a f f i d a v i t p r o p e r l y b e f o r e t h e c o u r t a t t h e t i m e summary

judgment was g r a n t e d .           The a l l e g a t i o n , t h e r e f o r e , w i l l n o t

be c o n s i d e r e d on a p p e a l a s a b a s i s f o r r e v e r s i n g t h e D i s -

trict Court's ruling.

        I n p a s s i n g , w e acknowledge t h a t a p p e l l a n t a t t e m p t s t o

s u p p o r t t h i s i s s u e on i t s motion t o v a c a t e w i t h a n a f f i d a v i t

and copy of a "demand" s e r v e d on r e s p o n d e n t .                   Appellant,

however, f a i l e d t o n o t e t h e motion f o r any c o n s i d e r a t i o n o r

adjudication; f u r t h e r , it has f a i l e d t o demonstrate t h a t

t h i s i n f o r m a t i o n was u n a v a i l a b l e p r i o r t o t h e D i s t r i c t

C o u r t ' s g r a n t i n g o f t h e summary judgment.

        Upon r e v i e w i n g t h e s u b m i t t e d r e c o r d p r o p e r l y b e f o r e t h e

C o u r t , even i n a l i g h t most f a v o r a b l e t o a p p e l l a n t , w e must

c o n c l u d e t h a t a p p e l l a n t ' s c a u s e of a c t i o n a c c r u e d p r i o r t o

o r on May 29, 1974, t h e d a t e of t h e a l l e g e d improper s a l e .

C o n s e q u e n t l y , f o u r y e a r s e x p i r e d between a c c r u a l and com-

mencement of t h e a c t i o n .

        S e c t i o n 27-2-207,       MCA, p r o v i d e s :

        "Tort a c t i o n s involving property. Within 2
        y e a r s i s t h e p e r i o d p r e s c r i b e d f o r t h e com-
        mencement of a n a c t i o n f o r :



        " (2)     t a k i n g , d e t a i n i n g , o r i n j u r i n g any goods
        o r chattels, including actions f o r the specific
        r e c o v e r y of p e r s o n a l p r o p e r t y ; "
C l e a r l y , a p p e l l a n t ' s c l a i m sounding i n t o r t i s b a r r e d by

t h i s two-year        s t a t u t e of l i m i t a t i o n .

         I t c o u l d b e a r g u e d t h a t s e c t i o n 27-2-204,           MCA ( s t a t u t e

of l i m i t a t i o n f o r g e n e r a l t o r t a c t i o n s ) , i s a p p l i c a b l e .

However, t h i s s e c t i o n o n l y e x t e n d s t h e l i m i t a t i o n t o t h r e e

y e a r s , and, t h u s , a p p e l l a n t ' s a c t i o n i s s t i l l p r o p e r l y

barred.

        I n r e g a r d t o a p p e l l a n t ' s c l a i m of c o n s t r u c t i v e t r u s t ,

t h e a l l e g e d o b l i g a t i o n ( t h a t respondent held the i n s u l a t i o n

o r p r o c e e d s t h e r e f r o m i n t r u s t ) i s one i m p l i e d by law and

n o t founded upon a w r i t t e n i n s t r u m e n t .            A s t o such a n i m -

p l i e d o b l i g a t i o n , s e c t i o n 27-2-202 ( 3 ) , MCA, p r o v i d e s :

        " A c t i o n s based - c o n t r a c t - o t h e r o b l i g a t i o n .
                              on                or
        ...

        " ( 3 ) The p e r i o d p r e s c r i b e d f o r t h e commencement
        of a n a c t i o n upon a n o b l i g a t i o n o r l i a b i l i t y ,
        o t h e r than a c o n t r a c t , account, o r promise, n o t
        founded upon a n i n s t r u m e n t i n w r i t i n g i s w i t h i n
        3 years.

T h e r e f o r e , a p p e l l a n t ' s c l a i m under a t h e o r y of c o n s t r u c t i v e

t r u s t i s a l s o barred.

        A s t o t h e c l a i m f o r p u n i t i v e damages, s i n c e t h e under-

l y i n g c a u s e o f a c t i o n i s b a r r e d , t h e r e c o v e r y of exemplary

damages i s b a r r e d a s w e l l .

        The d e c i s i o n of t h e D i s t r i c t C o u r t t h a t a p p e l l a n t ' s

a c t i o n i s b a r r e d by a p p l i c a b l e s t a t u t e s of l i m i t a t i o n i s

p r o p e r a s based upon t h e r e c o r d s u b m i t t e d a t t h e t i m e of i t s

ruling.       The summary judgment i s a f f i r m e d .
W e concur:




   -    Chief ~ u k t i c e




        Justices
                4      a&,           /




T h i s c a u s e was s u b m i t t e d p r i o r t o J a n u a r y 5 , 1 9 8 1 .
