14. When Mrs. Lohr and Albers signed
the May 4-5 agreement, the highest return
then was for Albers and the Bar ZF to
bring their wheat within the [farm
subsidy] program. Mrs. Lohr had an
obligation under the oral lease to
cooperate with Albers in staying in the
program, so that the highest return could
be achieved.
Mrs. Lohr 's failure and refusal to
achieve compliance and inclusion in the
wheat program, when she was able to do
so, was a breach of the oral contract.
15. The Bar ZF, through Mrs. Lohr,
prevented Albers from participating in
the wheat program, and he suffered
damages. [Additions ours.]
The Bar ZF contends that the District Court erred in finding
that it owed an obligation to Albers. We will not reverse
the order of the District Court unless we determine that the
District Court's findings were clearly erroneous and result
in an abuse of discretion. Rule 52(a), M.R.Civ.P.; Walker v.
Larson (Mont. 1986), 727 P.2d 1321, 1322-23, 43 St.Rep. 1765,
1767. We will not disturb those findings that are supported
by substantial credible evidence. In re the Matter of B.T.
(Mont. 1986), 725 P.2d 230, 232, 43 St.Rep. 1728, 1730. The
evidence will be reviewed in a light most favorable to Albers
as the prevailing party. Cameron & Jenkins v. Cameron
(1978), 179 Mont. 219, 587 P.2d 939.
The Bar ZF incorrectly construes S 27-1-105, MCA, to
characterize its obligation as arising by operation of law
rather than by contract. An obligation is defined as "a
legal duty by which a person is bound to do or not to do a
certain thing." Section 28-1-101, MCA. An obligation can
arise by either contract or operation of law. Sections
27-1-105 and 28-1-102, MCA. We find, as did the District
Court, that the oral lease in question served as a contract
through which each party acquired their respective
obligations.
In the instant case the parties agreed that, under the
terms of the oral farm lease, Albers had an obligation to the
Bar ZF to utilize the better farming practices in the
community. Albers was given wide discretion in choosing
those practices during his lease of the Bar ZF. That
discretion increased with the death of Ray Lohr. Mrs. Lohr,
on the other hand, professed little knowledge of either
specific farming practices or the farm subsidy program. She
can, however, be charged with knowledge that Albers intended
to either participate in the farm subsidy program or recrop.
Mrs. Lohr would not allow Albers to recrop so it was
reasonable for her to assume that the only other alternative
was for the Bar ZF to remain in the farm subsidy program.
The Bar ZF claims that it was Albers' obligation to
assure compliance in the farm program once he discovered that
the Bar ZF had been overseeded by Bronec. We disagree. It
was Bronec, acting at Mrs. Lohr's direction, who overseeded
and disqualified the Bar ZF from the farm program. Albers,
through his attorney, requested that the Bar ZF correct the
situation to assure compliance with the farm subsidy program
by the July 15, 1982, deadline. It was the Bar ZF's actions
that caused noncompliance and it was the Bar ZF's obligation
then to remedy the situation to assure compliance. Albers'
position in this regard is fully supported by the Restatement
(Second) of Property § 5.4 (1977), which states:
There is a breach of the landlord's
obligations if, after a tenant's entry
and without fault of the tenant, a change
in the condition of the leased property
caused by the landlord's conduct or
failure to fulfill an obligation to
repair, ... makes the leased property
unsuitable for the use contemplated by
the parties and the landlord does not
correct the situation within a reasonable
time after being requested by the tenant
to do so.
The Bar ZF also calls into question the District
Court's interpretation of numerous other facts. These
arguments are not persuasive because there is substantial
evidence to support the District Court's findings.
Though Mrs. Lohr denied that Albers told her that he
intended to participate in the farm program, it is the
function of the trial court in a nonjury trial to determine
the credibility of the witnesses and the weight to be
accorded their testimony. In re the Matter of the Estate of
Murnion (Mont. 1984), 686 P.2d 893, 896, 41 St.Rep. 1627,
1630. The District Court chose to believe Albers and we will
not disturb that decision. There is substantial credible
evidence to support the District Court's finding that the Bar
ZF owed Albers an obligation to allow him "to operate and
farm his 1982 winter wheat crop in a way which would bring
him (and the Bar ZF) the hiahest return" and an "obli-gation
under the oral lease to cooperate with Albers' staying in the
[farm subsidy] program."
The Bar ZF next questions the sufficiency of the
evidence to support an award of damages in this action. The
Bar ZF argues that there was no guarantee that Albers would
participate in the 1982 regular and reserve loan programs or
that he would place all of his grain in the programs. In
essence, the Bar ZF's argument in this regard is that Albersl
damages are too speculative to be recoverable.
Again, we ware charged with reviewing the record to
determine if there is substantial credible evidence to
support the District Court's findings in this regard. In re
the Matter of B.T., supra. Speculative damages not clearly
ascertainable are not recoverable. Cremer v. Cremer Rodeo
Land and Livestock Go. (Mont. 1981), 627 P.2d 1199, 1202, 38
St.Rep. 574, 578. The terms "speculative damages," however,
refer more to an uncertainty or speculation as to whether the
loss of profits is a result of the breach of contract in this
case than it does to an uncertainty as to the amount of the
damages. Bolz v. Meyers (1982), 200 Mont. 286, 300, 651 P.2d
606, 613.
As discussed previously, there is substantial evidence
that the Bar ZF breached the oral lease by causing
noncompliance with the farm program. There is also
substantial evidence to support the District Court's award of
damages in this case. Albers will not be denied recovery in
this case simply because he had the option to participate in
the farm subsidy program. It is evident from the record that
participation in the farm subsidy program would have been
advantageous to the Bar ZF. Albers also chose to both recrop
and participate in the farm program on other operations he
farmed. He participated in both the regular and reserve loan
programs on two other operations that were so qualified.
Albers' decision on the Bar ZF was to participate in the
program due to his inability to recrop as planned and as
previously agreed to by Mrs. Lohr.
The District Court made the following findings with
regard to Albers' damages:
24. Compliance date for the 1982 program
was July 15, 1982, meaning that the Bar
ZF had until that date to comply with the
maximum allowable wheat acreage. Bronec
testified that if he had been informed of
the problem, he was sure that "something
could have been worked out." He also
said he could have seeded barley on all
three parcels of land had he known it was
necessary, or could have cut and baled
young wheat for hay for his cattle.
Compliance could have been accomplished
by July 15, 1982.
25. Mrs. Lohr made no effort to achieve
compliance and inclusion in the wheat
program. Albers lost all the benefits
accruing from compliance.
26. Albers, up to July 15, 1982, was
eligible for participation in the farm
program, the farm storage grain reserve
program, and the Commodity Credit
Corporation loan program on the Bar ZF in
1982.
27. Albers was unable to use spring
wheat which he had cleaned at a cost of
$116.75, and he had not return
fertilizer. He received credit on the
fertilizer, but incurred 80 miles of
needless driving to return it, at a cost
of $40.00 (80 miles times $.50).
28. Deficiency payment for the 1982
program was $.50 per bushel paid in
December, 1982. The total amount of the
deficiency payment for a farm is
calculated by multiplying the $.50 per
bushel by the assigned yield for the Bar
ZF and again by the seeded acreage. The
assigned yield for the Bar ZF was 24
bushels per acre in 1982. Albers seeded
705.1 acres of wheat on the Bar ZF on Mav
5, 1982. Total deficiency payment for
the wheat program in 1982 would have been
$8,461.20. Alberst share of that
deficiency would have been $5,640.80.
29. Albers had sufficient storage
capacity on his own place in 1982 and
afterwards, and would have participated
in the storage program with his share of
the crops from the Bar ZF.
30. Annual storage payments are
calculated by multiplying the per bushel
annual storage payments by the assigned
wheat yield for the Bar ZF by the seeded
acreage.
31. The annual storage payment for the
three-year reserve program in 1982 was
$.265 per bushel, the assigned wheat
yeild for the Bar ZF was 24 bushels per
acre. Albers had seeded 705.1 acres of
wheat. The total annual storage payment
for the Bar ZF would have been $4,484.44.
Albers would have received two-thirds of
this amount, or $2,989.62. Storage
payments are made in advance on an annual
basis and participants would be eligible
to participate for a three yearst period.
Storage payments were made November 4,
1982. Albers' total loss of storage
payments was $8,968.86.
32. Albers would have also participated
in both the regular loan program and
reserve loan program. Of 700-800
Chouteau County farmers, 641 used the
loan program in 1982. Under the regular
loan program, participants could have
qualified for a loan immediately in this
amount of $3.49 per bushel. After nine
months, participants would qualify for
the reserve loan of $3.94 per bushel.
These loans are based on the assigned
wheat yield for a particular farm and the
actual seeded wheat acres. Usually
participants in the program "turnover"
their wheat to the Commodity Credit
Corporation after three years, and
effectively sell their grain for the loan
rate. If grain is turned over to the
Commodity Credit Corporation, all
interest on the loan is forgiven.
33. Albers redeemed part of the 1982
grain which he had in the reserve program
in 1983. However, he redeemed his
maximum amount allowable under the 1983
PIK program and would have left the Bar
ZF grain in storage.
34. The reserve loan V rate [sic] the
1982 farm program was $3.94. The
assigned wheat yield for the Bar ZF was
24 bushels per acre. The actual wheat
acreage was 705.1.
35. All wheat stored on the Bar ZF Ranch
was sold prior to the 1983 harvest. A
recap of the sold wheat, based on
EXHIBITS 19-A through 19-P ...
[shows
40,291.39 bushels sold for $144,388.701.
$144,388.70 divided by 40,291.39
bushels = $3.58 bushel average selling
price.
36. The per bushel sales price for wheat
for the Bar ZF was $.36 per bushel less
than it would have been under the reserve
loan V Program ($3.94 - $3.58 = .36).
The Bar ZF would have earned $6,092.06
more if it had participated in the
reserve loan V Program in 1982 (36 times
24 bushels of yield times 705.1 seeded
acres = $6,092.06). Albersl share of
those proceeds would have been $4,061.38.
37. Mrs. Lohr Lohr received two-thirds
of the proceeds of the crop which Bronec
seeded in May, 1982, or $4,817.66.
[Additions ours.]
From these findings the District Court concluded the
following:
15. The Bar ZF, through Mrs. Lohr,
prevented Albers from participating in
the farm program, and he suffered
damages.
16. Albers incurred the following losses
by being precluded from participating in
the farm program:
(a) Loss of farm program deficiency
payments, received 12/83 - $5,640.80.
(b) Loss of storage payments received,
one-third received on 11/4/82, 11/4/83,
and 11/4/84 - $8,968.86.
(c) Loss in sales price of grain,
received 9/82 - $4,061.38.