Interstate Manufacturing Co. v. Interstate Products Co.

439 P.2d 911, 151 Mont. 163, 1968 Mont. LEXIS 299
CourtMontana Supreme Court
DecidedApril 16, 1968
DocketNo. 11325
StatusPublished
Cited by1 cases

This text of 439 P.2d 911 (Interstate Manufacturing Co. v. Interstate Products Co.) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Interstate Manufacturing Co. v. Interstate Products Co., 439 P.2d 911, 151 Mont. 163, 1968 Mont. LEXIS 299 (Mo. 1968).

Opinion

MR. JUSTICE CASTLES,

delivered the Opinion of the Court.

This is an appeal by Interstate Products Company, a corporation, hereinafter referred to as “Products” or appellant, from a judgment entered against it awarding the respondent, Interstate Manufacturing Company, a corporation, $77,695.20 as damages for loss of profits due to the alleged breach of a contract between the two companies. Interstate Manufacturing Company will hereinafter be referred to as the respondent or “Manufacturing”.

This action plus another action by the same plaintiff against the same defendant for money had and received were consolidated for trial, by the Honorable James D. Freebourn, sitting as judge in the eighteenth judicial district, Gallatin County, Montana. The trial was held without jury. The court below dismissed the action for money had and received, and that judgment is not appealed. However, in the action for breach of an alleged contract, an order finding facts and conclusions of law in favor of the respondent was entered and a judgment was rendered thereon in favor of the respondents.

On October 10, 1946, Interstate Products Company was incorporated for the purposes of mining asbestos ore. One of [165]*165the principal incorporators of this company was C. A. Lester who became a director of the corporation, and by action of the board of directors, President. Lester’s wife, Mabel, later became a director and Secretary-Treasurer of the corporation.

C. A. Lester became the owner of 21 lode mining claims and two mill sites located near Karst, approximately thirty miles south of Bozeman. In consideration for the transfer of stock in “Products” to him, C. A. Lester sold the rights in these claims to “Products”. The company’s mining operations were to take place upon these claims.

On November 24, 1950, Interstate Manufacturing Company was incorporated for the purposes of producing asbestos out of asbestos ore. The capital stock in this corporation was subscribed to by C. A. and Mabel Lester and one E. F. Bunker. These three became directors of the company and later President, Vice President, and Secretary-Treasurer of the corporation respectively.

On April 10, 1956, the two corporations entered into a contract, the alleged breach of which, and consequent loss of profits to respondent, is the subject of this suit.

The pertinent portions of the contract are as follows:

“The party of the first part further agrees to deliver to the party of the second part, asbestos ore at the average rate of at least forty tons per operating day or more as may be mutually agreed upon at the party of the second part’s manufacturing building at 204 South Wallace Avenue in Bozeman, Montana; and the party of the second part agrees to pay therefor as follows:
“The party of the first part further agrees to deliver to party of the second part, asbestos ore at the average rate of at least forty tons per operating day or more as may be mutually agreed upon at the party of the second part’s manufacturing building at 204 South Wallace Avenue in Bozeman, Montana; and the party of the second part agrees to pay therefor as follows:
[166]*166“Thirty Dollars per ton by paying Fifteen Dollars in cash and Fifteen Dollars per ton in common stock of the party of the second part until it has paid 49 percent of the share of common stock in said Interstate Manufacturing Company at the rate of Fifteen Dollars per ton and thereafter, to pay the party of the first part Thirty Dollars per ton cash for all ore delivered to them.
“The party of the first part further agrees to deliver to the party of the second part at least forty tons per day of asbestos ore from the Karst Mines, the same to be computed on the basis of annual averages and upon orders therefor by the party of the second part at the above said agreed price of Thirty Dollars per ton delivered at the second party’s present mill building plant, at and when the party of the second part shall so designate.”

Because of the fact that the business records of both companies were lost during the course of an audit, we have very little evidence as to how the two companies operated under the contract. In order to avoid repetition, we will review that evidence when we decide whether the contract was actually breached.

On May 6, 1958, C. A. Lester died. Mr. Bunker, who had become a director and vice president of both corporations, had died previously. It was at this point, when new people entered into the control of both corporations, that the trouble between the two corporations began to develop.

On May 16, 1958, Mabel Lester appointed one Glen Allman, as director of “Manufacturing”. These two directors elected Bernard Goosen as director, whereupon Mrs. Lester resigned her position in respondent corporation. Allman and Goosen then elected Oscar Huso as a director. These directors became President, Vice President and Secretary-Treasurer respectively of “Manufacturing”.

On May 31, 1958, a meeting of the Board of Directors and some stockholders in “Products” was held. Doyle Potts, who [167]*167had previously become a director of that corporation, was made acting president. Potts was later elected to this position by the stockholders of “Products” on September 9, 1958.

In May of 1958, the directors of “Manufacturing” became concerned as to the validity of the claims to the property which had been transferred by C. A. Lester to “Products.” Allman and the other officers of “Manufacturing” entered upon the claim with the intention of securing the title to the claims and then transferring this title apparently to the stockholders of “Manufacturing”.

Potts, fearing some attempt at “claim jumping,” gave orders to the guards at the mining property that no one was to be let upon the property.

On August 8, 1958, a plant foreman of “Manufacturing” ordered a truck to be sent to the mines to pick up some ore. The truck had no loading equipment, and the mine did not either.

The watchmen at the mine, acting under Potts’ previous orders to prevent claim jumping, ordered the truck off the property.

It is this refusal to load ore onto the truck which respondents contend constituted the breach of the contract in question.

The court below after hearing the evidence determined in its findings of fact and conclusions of law that there had been a valid contract between the two parties; that the contract was breached by the failure to load up the truck; and that as a result of this breach respondent suffered a loss of profits.

Appellants present to this court three arguments as to why the judgment based upon the findings of fact and conclusions of law should be reversed. These are : (1) that there was no valid agreement between the two parties; (2) that if there was a contract, there was no breach of it; and (3) even if there was a breach, the damages were not supported by evi[168]*168dence and were so remote and speculative that they could not be awarded.

Appellant is correct in pointing out that in a long line of decisions, this court has held that we will not disturb the trial court’s findings unless there is a decided preponderance of evidence against these findings. Larsen Farms v. City of Plentywood, 145 Mont. 509,

Related

Gross v. Holzworth
440 P.2d 765 (Montana Supreme Court, 1968)

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Bluebook (online)
439 P.2d 911, 151 Mont. 163, 1968 Mont. LEXIS 299, Counsel Stack Legal Research, https://law.counselstack.com/opinion/interstate-manufacturing-co-v-interstate-products-co-mont-1968.