author: MR. JUSTICE SHEEHY

text:
    JAMES W. BALL and Doris E. Ball, Plaintiffs and Respondents, v. DONALD GEE a/k/a Norman Jimmy Nanalook, Defendant and Appellant.
    No. 87-408.
    Submitted on Briefs July 21, 1988.
    Decided Sept. 27, 1988.
    761 P.2d 830.
    Neil Haight, Montana Legal Services, Helena, for defendant and appellant.
    Clary & Clary, R.F. Clary, Jr., Great Falls, for plaintiffs and respondents.
    Margaret M. Joyce Johnson and Robert P. Goff, Church, Harris, Johnson & Williams, Great Falls, for amicus curiae.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

James W. Ball and Doris E. Ball brought an action pursuant to 1985 MCA in the District Court, Eighth Judicial District, Cascade County, to quiet title on real property based on a tax deed they had procured from the County. In the course of the proceedings, the District Court on May 18, 1987 entered an order that Donald Gee, as the true owner [the statute (Section 15-18-401(l)(b)(1985), MCA)] describes the record owner of the real property when the taxes become delinquent as the “true owner” to deposit in court the amount of $11,041.43 on or before June 10, 1987. No deposit was made by Gee. On August 6, 1987, the District Court entered its decree quieting title to the real property in James W. Ball and Doris E. Ball (purchasers).

The decree is fixed solely upon the court’s finding, under Section 15-18-402(1)(1985), MCA, that since Gee had not deposited the amount stated, he is “deemed to have waived any defects in the tax proceedings and any right of redemption, and therefore, irrespective of any irregularities, defects, omissions or total failure to observe any of the provisions of the statute of Montana regarding the assessment, levying of taxes or sale of property for taxes” the purchasers were entitled to a decree quieting their title as against Gee.

Gee has appealed to this Court on the grounds that the purchasers improperly claimed items of costs to preserve the property or to make improvements thereon while in their possession. We agree and reverse and remand for further proceedings.

At all times important here, Gee has been a federal prisoner, incarcerated in a prison outside the state of Montana. He filed by mail on May 18, 1987, his handwritten “Answer to Order to Show Cause” in the District Court. He further filed a written affidavit in support of his answer. In his affidavit he stated that he had a tenant on the property who was supposed to pay the property taxes in place of rent; that the purchasers were aware that he was a prisoner at the U.S. Penitentiary in Marion, Illinois; and that he received no notification of the application for tax deed. He also denied the sum the purchasers claimed for preserving or improving the property.

The answer and affidavit were not accompanied by a filing fee. Gee did not appear in person, nor was he represented by counsel at the May 18, 1987 hearing.

In the course of the May 18 hearing, the District Judge noted that since the filing fee was not paid, there was nothing filed from Gee as of that date, but since Gee was acting pro se, the court would give him the benefit of the doubt. However, the court then stated because the filing fee was not paid the answer would not be considered as filed.

The order to show cause and make a deposit was issued to Gee upon the application of the purchasers, supported by an affidavit of James W. Ball, dated April 29, 1987, that the total of sums reasonably paid by purchasers after the date of the tax deed in preserving the property or making improvements was $4,919.18. However at the show cause hearing of May 18, purchasers claimed $8,158.54 as the amount they had expended in preserving the property or making improvements. The claimed amount was supported by exhibit 1, which Mrs. Ball candidly on testimony at the hearing stated included “a refrigerator and a range for the kitchen, cabinets for the kitchen, carpeting and shower cabinets, toilet, the whole works.” The exhibit itself includes items for advertising for an application for tax deed, mailing costs, grass mowing costs, and the cost of a title search for the purposes of the quiet title action. While some of these items might have been recoverable as court costs in the event of an eventual judgment in their favor, they are demonstrably not sums “reasonably paid by the purchaser . . . after three years from the date at the tax sale to preserve the property or to make improvements thereon while in the purchasers’ possession.” (Section 15-18-401(1)(a)(ii) (1985), MCA.

The provision of Section 15-18-401, MCA, that the true owner must deposit sums paid by purchasers to preserve the property or to make improvements thereon after three years from the date of the tax sale, was first enacted in this state as Chapter 85, Law of 1927. The provision was construed in Shull v. Lewis and Clark County (1933), 93 Mont. 408, 19 P.2d 901. There it appeared that the tax purchaser claimed an amount for deposit, a part of which really belonged to the county, and not to the purchaser. The court found that the only amount that the purchaser might lawfully demand to be deposited in court was that amount which he would be entitled to receive in the event the tax deed was set aside. It said:

“. . . whereas here, the order requiring a deposit embraced items which the party demanding the deposit had no right to receive in the event the tax proceedings be set aside, plaintiff may decline to make the deposit and raise the question on an appeal from the judgment entered for default in so doing.”

93 Mont. at 418, 19 P.2d at 903.

Moreover, under Section 15-18-402(4)(1985), MCA, errors may be reviewed on appeal from a final judgment in a quiet title action based on a tax deed.

On that basis, we reverse the decree of the District Court and remand the cause for further proceedings.

Gee filed in the District Court his affidavit to proceed in forma pauperis, which was never acted upon. The District Court felt compelled, because of the mandatory provisions of Section 15-18-402, MCA, to enter a decree in the purchasers’ favor. When the cause arrived in this Court on appeal, because of the problem created by the pro se appearance of Gee, Montana Legal Services Association procured the services of Margaret M. Joyce Johnson, and Robert P. Goff, of the law firm of Church, Harris, Johnson and Williams in Great Falls to appear and file briefs as amicus for the appellant Gee. The amicus brief raises the question whether the statutory deposit requirement is unconstitutional as applied since it prohibits a defense by an indigent person simply because he or she is unable to meet the deposit requirement and because it extinguishes the indigent person’s redemption rights as well as any objections of the true owner to the procedures used to obtain the tax deed. We do not address that problem at this point, because on remand a proper deposit may be made. If the deposit is not made because of indigency, the question of constitutionality of course could be raised in the first instance before the District Court. Moreover, nothing in Section 15-18-402 (1985), MCA, forecloses the true owner from cross-claiming against the purchasers for usurpation of possession prior to the expiration of the time of redemption, if such occurred. A purchaser at a tax sale without more has no right of possession to the real property until three years following the date of the sale of the property at the tax sale. Section 15-18-403 (1985), MCA.

Accordingly, the decree quieting title in the purchasers is reversed, and the cause is remanded to the District Court for further proceedings.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES GULBRANDSON, McDONOUGH and HUNT concur.


source: Caselaw Access Project

author: MR. JUSTICE HARRISON

license: Public Domain

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. JOHN RONALD PRICE, Defendant and Appellant.
    No. 87-474.
    Submitted on Briefs Aug. 18, 1988.
    Decided Sept. 27, 1988.
    762 P.2d 232.

      William Frazier, Big Timber, Jon M. Hesse, Livingston, for defendant and appellant.
    Mike Greely, Atty. Gen., George Schunk, Asst. Atty. Gen., Helena, William Neis Swandal, Co. Atty., Livingston, Dan McGregor, Deputy Co. Atty., for plaintiff and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

Defendant John Ronald Price appeals from judgment of conviction on two counts of burglary entered by the District Court of the Sixth Judicial District, Park County, Montana. We affirm.

On April 10, 1987, Livingston Police responded to a report of a break-in at the Grace Methodist Church. The rear door of the church had been forcibly entered and the kitchen ransacked, but no perpetrator was discovered. Later that evening, a police officer noticed lights on inside the church. On closer investigation, the officer sighted two men and one women in the basement of the church. The officer recognized one of the men as the defendant John Price, whom he had met previously. He also believed the woman was Maryann Burroughs, the stepdaughter of the defendant. The third individual, Cliff Miller, was arrested as he exited the rear door of the building. The other two accomplices ran back through the church and made their escape.

After Miller was taken into custody, an investigation revealed Price’s automobile parked across the street from the church with its passenger door open and a purse located on the front seat. A bank account book in the names of Maryann Burroughs and Cliff Miller was found inside the purse.

At approximately 3:00 o’clock that morning, officers went to the home of the defendant. Though they were unable to locate him, officers sighted through a window of the defendant’s house a glass punch bowl partially covered by purple cloth. The officers next secured an arrest warrant for the defendant. Price was located and arrested later that morning at the residence of Cliff Miller and Maryann Burroughs. Price was charged with burglary of the Grace Methodist Church. Maryann Burroughs was also later arrested and charged with burglary of the Grace Methodist Church. Both Miller and Burroughs pled guilty to burglary charges.

Price later gave his consent to a search of his residence. Although the search of the house revealed nothing incriminating, the officers found in the back yard next to the defendant’s house a broken glass punch bowl, two purple choir robes and numerous pre-stamped, preaddressed envelopes belonging to the First Baptist Church. Additionally, a gold and white choir collar was found in the street across from the defendant’s home. Shortly after this investigation, the First Baptist Church reported a burglary which they believed occurred on the previous evening. Missing were two purple choir robes, a choir collar, two or three hundred of the church’s pre-stamped, pre-addressed envelopes and other items which were never recovered. Price was then charged with the burglary of the First Baptist Church.

At trial, Miller testified that he had seen a collar and a box of white envelopes inside the defendant’s home on the night the three entered the Grace Methodist Church. Both Miller and Burroughs testified that Price was with them in the Grace Methodist Church. Price denied ever being in either church. The jury found Price guilty of burglarizing both churches.

The appellant raises four issues for review:

1. Did the State present substantial credible evidence to support the verdict with respect to the burglary of the First Baptist Church?

2. Did the District Court err in not giving appellant’s proposed instruction regarding the credibility of witness identification testimony?

3. Was the testimony of the accomplices that they had previously pled guilty to charges arising out of the incident with which appellant was charged unduly prejudicial?

4. Were the comments by the prosecuting attorney relating to appellant’s post-arrest silence unduly prejudicial and violative of his Fifth Amendment rights?

Issue No. 1.

Did the State present substantial credible evidence to support the verdict with respect to the burglary of the First Baptist Church?

Section 45-6-204(1), MCA, provides:

“A person commits the offense of burglary if he knowingly enters or remains unlawfully in an occupied structure with the purpose to commit an offense therein.”

In reviewing the jury’s verdict in a criminal matter when it is alleged the evidence is insufficient to support the verdict, our function is to determine if the verdict is supported by substantial evidence. We will not disturb a verdict which is based upon substantial evidence. State v. Pepperling (1974), 166 Mont. 293, 300, 533 P.2d 283, 287; State v. Bouldin (1969), 153 Mont. 276, 284, 456 P.2d 830, 834-35.

As we recognized in State v. Wilson (Mont. 1981), [_ Mont._,] 631 P.2d 1273, 1278-79, 38 St.Rep. 1040,1047, the proper test upon review is that articulated in Jackson v. Virginia (1979), 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560, 573:

“[T]he relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. (Emphasis in original.)”

We added further that “substantial evidence” is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, citing State v. Graves (Mont. 1981), [191 Mont. 81,] 622 P.2d 203, 208, 38 St.Rep. 9, 14; and State v. Merseal (1975), 167 Mont. 412, 416, 538 P.2d 1366, 1368.

Appellant argues the evidence is insufficient because the State only presented accomplice testimony linking the appellant with the collars and the envelopes. In support of this argument he cites Section 46-16-213, MCA, which mandates that accomplice testimony be corroborated by independent evidence which tends to connect the appellant with the crime charged.

Appellant correctly argues that, to be sufficient, the corroboration must do more than show the crime was committed or the circumstances of its commission. It must raise more than a suspicion of the defendant’s involvement in, or opportunity to commit the crime charged. However, this Court will not dissect the facts in order to weigh them for review. Corroborative evidence need not be sufficient, by itself, to support a defendant’s conviction or even make out a prima facie case against him. In addition, the independent evidence need not extend to every fact to which the accomplice testifies. State v. Manthie (1982), 197 Mont. 56, 61-62, 641 P.2d 454, 457, citing State v. Rose(1980), 187 Mont. 74, 80, 608 P.2d 1074, 1077-78; State v. Owens (1979), 182 Mont. 338, 344, 597 P.2d 72, 75-76; State v. Williams (1979), 185 Mont. 140, 151, 604 P.2d 1224, 1230.

The evidence presented at trial, examined and judged by the jury for its credibility, was sufficient to connect the appellant with the burglary of the First Baptist Church. In addition to the testimony of Miller that the collar and envelopes were in the appellant’s home on the evening of the burglaries, the police officers saw a punch bowl covered by purple cloth in the appellant’s home. Discovered in the yard adjacent to the appellant’s home were the stolen envelopes and choir robes, and a punch bowl. Across the street from the appellant’s home the police discovered the stolen choir collar.

The resolution of factual matters is for the jury, and if there is substantial evidence to support the judgment, this Court must affirm the decision. State v. Gladue (1984), 209 Mont. 235, 239, 679 P.2d 1256, 1258; State v. Graham (1983), 206 Mont. 49, 54, 669 P.2d 691, 694. Viewing the evidence in its totality, we find there is substantial evidence upon which a rational jury could have found appellant guilty.

Issue No. 2.

Did the District Court err in not giving appellant’s proposed instruction regarding the credibility of witness identification testimony.

Appellant argues it was error for the District Court to refuse to give his proposed jury instruction regarding the credibility of witness identification testimony. The proposed instruction reads in part as follows:

“Identification testimony is an expression of belief or impression by the witness. Its value depends on the opportunity the witness had to observe the offender at the time of the offense and to make a reliable identification later.”

It advised the jury to consider the capacity, opportunity, recollection and credibility of the witness. Additionally, it emphasized the burden of proof on the state to prove every element of the crime, which “specifically includes the burden of providing beyond a reasonable doubt the identity of the defendant ...”

Appellant relies on State v. Hart (Mont. 1981), [191 Mont. 375,] 625 P.2d 21, 31, 38 St.Rep. 133, 144, where we noted:

“Such an instruction may be proper, if not mandatory, in certain cases. The necessity of this type of instruction is especially clear when there is only a single eyewitness’s unsubstantiated testimony which identifies the offender. (Citation omitted.)”

Although the eyewitness identification by Officer Walls was buttressed by the circumstantial evidence and the testimony of Miller and Burroughs, appellant suggests the nature of this corroborating evidence rendered the eyewitness testimony “essentially unsubstantiated,” thus necessitating the proposed instruction. We disagree. Neither Section 46-16-213, MCA, nor our statement in Hart requires evidence be severed and weighed independently. Contrary to appellant’s suggestion, corroborating evidence need not be corroborated.

Although we question the sufficiency of the defense counsel’s objection at the time of the instruction’s refusal, we believe the judge properly held the jury was adequately instructed. The State’s proposed instruction, given as Instruction #2, adequately advised the jury regarding the credibility of the witnesses, with specific instructions that they may consider a witness’s appearance, candor, intelligence, knowledge of the subject, relation to the state or defendant, the support or contradiction of other evidence, the witness’s capacity to perceive, recall or communicate, and the witness’s character for truthfulness. Additionally, Instruction #5 advised the jury of the elements of the crime charged and required them to find the defendant not guilty if any of the elements were not proven beyond a reasonable doubt. Counsel for appellant made no objection to either of these instructions. It is not error to refuse a proposed instruction which is repetitive. State v. Milhoan (Mont. 1986), [224 Mont. 505,] 730 P.2d 1170, 1176, 43 St.Rep. 2371, 2379.

Issue No. 3.

Was the testimony of the accomplices that they had previously pled guilty to charges arising out of the incident with which appellant was charged unduly prejudicial?

We hold under the facts of this case, the appellant was not unduly prejudiced. Although appellant failed to raise the issue at trial and is procedurally barred for failing to do so, at issue is his misplaced reliance on United States v. Griffin (11th Cir. 1985), 778 F.2d 707. In Griffin, the trial judge read a codefendant’s indictment to the jury in a conspiracy trial, and told the jury that this codefendant had been adjudicated guilty. The reviewing court reversed the conviction, noting such testimony was prejudicial. In this case, there is an important distinction to be made with Griffin. Here, appellant’s accomplices took the stand and testified, thereby putting their credibility at issue. Such testimony comes as an exception to the general principle that evidence of a codefendant’s guilty plea is inadmissible. As noted in Griffin, “where a codefendant takes the witness stand, evidence of a guilty plea may be introduced to aid the jury in assessing the codefendant’s credibility.” Griffin, 778 F.2d at 710, n. 5. See also, U.S. v. Baez (10th Cir. 1983), 703 F.2d 453, 455; and U.S. v. Wiesle (8th Cir. 1976), 542 F.2d 61, 62. This reasoning was also adroitly developed in U.S. v. Halbert (9th Cir. 1981), 640 F.2d 1000, 1005, where the court held:

“As a result of plea bargaining, it is often the prosecution which produces a codefendant and elicits testimony tending to show the substantive guilt of the defendant. This is, of course, admissible. As a part of that testimony, the trier of fact should know the witness’ total connection to the defendant or to the event; . . .
“[A] question about the guilty plea is legitimate as the purpose is to support the reasonableness of the witness’ claim to firsthand knowledge because of admitted participation in the very conduct which is relevant.”

The Halbert court also noted the use of such testimony by the defense:

“[T]he defense may, and often does, bring this fact out on cross examination . . . [and] may suggest that the witness, like Judas, is a perfidious erstwhile associate bent upon delivering the defendant into the hands of the prosecution. Or perhaps the defense may dwell on the benefits the witness expects to receive by favorable testimony and upon the motive and need for the witness to make good on his bargain with the prosecution.”

Halbert, 640 F.2d at 1004-05. While it is not clear why the prosecution brought this information out, we note that the defense attorney fully used the statements for exactly these purposes. In view of this, we find no error.

Issue No. 4.

Were the comments by the prosecuting attorney relating to appellant’s post-arrest silence unduly prejudicial and violative of his Fifth Amendment rights?

The final issue is directed to the prosecutor’s statements relating to appellant’s post-arrest silence. The deputy county attorney in his closing argument made the following comments on the post-arrest and pretrial position of appellant:

“What’s more, we have got no statement. Since April this innocent man, according to his own words, has made no statement to the police to try and establish that he is innocent and avoid the necessity of a court action.
“Once again, no statement about this burglary either. Now, we can’t force people to come in, but what’s the natural thing? You go, I didn’t do it, and here is why. Well, we didn’t get that from the defendant.

Were it not for the overwhelming evidence of the appellant’s guilt, this case might well have been reversed. This Court has noted in a number of recent cases the impropriety of such comments, the latest being State v. Johnson (Mont. 1988), [233 Mont. 473,] 760 P.2d 760, 45 St.Rep. 1653. Therein, Mr. Justice Weber carefully set forth the views of this Court concerning comments by prosecutors in view of the United States Supreme Court’s holding in Griffin v. California (1965), 380 U.S. 609, 85 S.Ct. 1229, 14 L.Ed.2d 106; and Chapman v. California (1967), 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705. In addition, he noted a number of recent opinions of this Court following the dictates of Griffin. Prosecutors should carefully note this Court’s abhorrence of such trial tactics. The evidence in every case is not so overwhelming that the comments will be harmless beyond a reasonable doubt. Given the strength of the State’s case, there was no need for these comments.

We affirm the conviction.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, SHEEHY and HUNT concur.


author: MR. JUSTICE GULBRANDSON

text:
    In re the MARRIAGE OF ROBERT J. TURBES, Petitioner and Respondent, and EDITH YVONNE TURBES, Respondent and Appellant.
    No. 88-118.
    Submitted on Briefs Aug. 11, 1988.
    Decided Sept. 27, 1988.
    762 P.2d 237.

      Larry D. Herman, Laurel, for respondent and appellant.
    George W. Huss, Brown & Huss, Miles City, for petitioner and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Edith Turbes appeals from the February 3, 1988 judgment of the Custer County District Court dissolving her marriage to Robert Turbes and dividing their property. We affirm the judgment of the District Court but remand the case for payment of the temporary maintenance as previously ordered by the District Court.

Robert J. Turbes and Edith Yvonne Turbes were married on May 12, 1984. Their marriage lasted 34 months to the date of separation and three and one-half years to the date of trial. There were no children born of the marriage, though Robert’s two children of a previous marriage lived with the parties in Cody, Wyoming, during the first year of the marriage. Both parties had been married previously.

Five years prior to their marriage, Robert Turbes was injured in an industrial accident, for which he received a net settlement of approximately $110,000. Mr. Turbes used portions of this settlement to construct a house which he owned free and clear at the time of the marriage ($58,000); to secure a loan to start a True Value lumber business (Turbes Lumber) ($40,000); and to purchase a Ford Bronco. Respondent held these assets, his personal belongings, and approximately $14,000 in cash at the time of the marriage.

Testimony of the husband placed his net worth at approximately $250,000 at the time the parties married. The wife’s testimony established a net worth of approximately $4,000 at the time of the marriage. This consisted of a 1979 Fiat automobile, a savings account containing approximately $2,500 and her personal belongings. Evidence conflicted on the amount owing on these assets.

Approximately one year after the parties married, they sold the home Robert had built prior to marriage and proceeded to use the proceeds to construct a new home. Conflicting evidence was introduced as to the cost of materials and services which went into the house. At trial Robert produced a record showing the cost was approximately $95,000, while Edith testified she believed the cost was closer to $75,000 to $80,000. The parties obtained an $80,000 mortgage on the property placing the money obtained from the mortgage back into their account in anticipation of expanding Turbes Lumber. Both Robert and Edith contributed substantial amounts of their time to finishing the house, though Edith admitted Robert put in more time.

During the first two years of their marriage, Edith worked for Turbes Lumber. For her time, she was paid between $900 and $1,000 per month. She produced evidence at the hearing that she used a portion of her income to pay off the debts she brought to the marriage and some of their living expenses. Edith acknowledged that Robert contributed from his earnings at Turbes Lumber toward their living expenses.

In approximately June of 1986, the lumber company began experiencing financial problems and Edith went to work for Marathon Oil in Cody, Wyoming. Edith quit working for Marathon Oil in early August, 1986, and returned to Turbes Lumber where she worked without pay until Turbes Lumber was liquidated on August 16, 1986.

After liquidation of Turbes Lumber, approximately $20,000 remained owing on the loan Robert had taken out to finance the business. To secure payment of this obligation the parties executed a second mortgage on the marital home.

Prior to this time the parties had transferred their bank account of approximately $110,000 to Minnesota and placed it in Robert’s brother’s name. This was done in anticipation of pending legal problems involving Turbes Lumber. The couple then moved to Minnesota, and borrowed $35,000 to start a business from a trust created by Edith’s parents. This business opportunity fell through, and they returned the money borrowed from the trust. They moved to Portland, Oregon and then back to Cody, Wyoming. In January of 1987, the parties reached an accord and satisfaction where they deeded their house in Cody to the bank in lieu of foreclosure of the mortgages on the property. Robert then obtained work in Miles City, Montana, where the parties were living at the time of their separation on March 15, 1987.

Prior to the separation, Robert transferred approximately $104,000 from the joint bank account to a separate account in his name. When the parties separated, Edith removed most of their personal property and took both her Fiat automobile and the Ford LTD purchased during their marriage. Robert subsequently filed for dissolution of the marriage. Edith later received a check for stock which Robert had earned through Turbes Lumber’s membership in True Value. She cashed the check in the amount of $1,389.77, but did not spend the money.

Pursuant to the District Court’s temporary order of May 27, 1987, Robert was given possession of the Ford LTD with its accompanying debt, and Edith was given possession of the Ford Bronco. Edith was also ordered to return those personal property items of Robert’s which she had taken.

The court heard the parties’ dissolution action on December 18, 1987, and issued its decree of dissolution on February 3, 1988. The court awarded to Robert the following: the remaining monies in his bank account (approximately $98,000); the Ford LTD (along with its accompanying debt); the Ford Bronco; insurance proceeds from claims upon the vehicles; and that personal property which he brought to the marriage. Edith received the proceeds from the sale of her Fiat and her personal possessions, but she was directed to return the proceeds of the check issued from True Value to Robert.

The following issues are presented for our consideration:

1. Did the District Court abuse its discretion in adopting the husband’s proposed findings of fact and conclusions of law?

2. Did the District Court abuse its discretion in not considering the nonmonetary contributions of the appellant to the marriage and to the preservation of the marital assets?

3. Did the District Court abuse its discretion in not adjusting the property rights reasonably and equitably?

4. Did the District Court abuse its discretion by not considering the income tax consequences attendant to the accord and satisfaction of the mortgages?

In reviewing the issues presented on appeal of a property distribution, this Court’s function is “extremely limited.” In re Marriage of Hundtoft (Mont. 1987), [225 Mont. 242,] 732 P.2d 401, 402, 44 St.Rep. 204, 205. “[T]his Court will reverse a district court only upon a showing that the district court has acted arbitrarily or has committed a clear abuse of discretion, resulting in either instance in substantial injustice.” In re Marriage of Hall (Mont. 1987), [228 Mont. 36,] 740 P.2d 684, 686, 44 St.Rep. 1321, 1323. If the District Court’s findings of fact and conclusions of law properly address the considerations in Section 40-4-202, MCA, this Court will not reverse the determination made by the District Court.

Issue #1.

Did the District Court abuse its discretion in adopting the husband’s proposed findings of fact and conclusions of law?

This Court will uphold the district court if its decision is supported by the law and the evidence. In re Marriage of Sessions (Mont. 1988), [231 Mont. 437,] 753 P.2d 1306, 1307, 45 St.Rep. 744, 746. In the case at hand, the District Court prefaced its adoption of the husband’s findings by stating:

“It is not the usual practice of this court to adopt the proposed findings of fact or conclusions of law of counsel, but after hearing testimony, examining exhibits, and considering briefs of counsel, the Court adopts petitioner’s proposed findings of fact and conclusions of law as follows:”

This statement by the District Court shows the District Court did not adopt the petitioner’s proposed findings haphazardly. The question for this Court is whether the adopted findings are supported by the law and the evidence.

Section 40-4-202, MCA, is the controlling statute for division of property in a dissolution action. This statute directs the court to divide the property equitably between the parties without regard to marital misconduct. The court must consider all assets owned jointly or individually, however or whenever acquired, regardless of the manner in which title is held. The court shall then consider the duration of the marriage, previous marriages, the earning potential of each party, their liabilities and their opportunities for future acquisition of capital assets and income. The court shall consider contributions to and dissipation of the parties’ individual estates. When a court considers property acquired prior to marriage, as in this case, the court shall consider contributions of the other spouse to the marriage, including:

“(a) the nonmonetary contribution of a homemaker;
“(b) the extent to which such contributions have facilitated the maintenance of this property; and
“(c) whether or not the property division serves as an alternative to maintenance arrangements.”

Section 40-4-202(1), MCA.

The following findings by the District Court illustrate due consideration of Section 40-4-202(1), MCA: The court found that the marriage was of a short duration (34 months), that no children resulted from their union, both parties had marketable job skills, that neither had health problems affecting their employability, and that no antenuptial agreement existed. Further the court found that a bank account containing approximately $98,000 was the major existing asset at the time of dissolution. Substantial credible evidence was presented at trial which supports these findings and we hold that the District Court did not err in adopting these findings.

Appellant contends the District Court erred in awarding all the monies in the existing bank account to the husband and less than $2,000, representing temporary maintenance to the wife. Appellant first contends that the respondent did not bring cash into the marriage in the amount of $14,000. However, our review of the evidence and transcript shows the respondent did not spend the entire amount of his settlement. $40,000 was set aside to cover operating expenses of their business, however this money was not entirely spent. This is further evidenced by the fact that after sale of the premarital home one year into the marriage (netting $97,000) the parties’ bank account showed a balance in excess of $115,000. Respondent testified this amount represented proceeds from his personal injury settlement. Appellant’s evidence does not disprove this claim.

Appellant next claims that she should have received $2,000 under the court’s order for temporary maintenance, but actually only received $1,000. Appellant is correct in her claim and respondent admits Edith only received $1,000. However, this Court finds the error is correctible and does not arise to the level of reversible error.

The third error claimed by the appellant is that the bank account did not represent respondent’s premarital personal injury settlement, but rather proceeds from the home the parties built. Here the court was presented with conflicting evidence on the cost of building the marital home, but both parties acknowledge that all the financing for the construction came from the proceeds of the husband’s personal injury settlement and the proceeds of the sale of the premarital home. Both parties contributed their labor to the building of the home and the appellant admitted the husband spent more time in its construction. After examining the conflicting evidence on the cost of the marital home, the court adopted the husband’s figures which approximated the amount of the loans on the home at the time it was deeded back to the bank in satisfaction of the mortgages. It is granted that $20,000 of this amount secured debts of the business after liquidation. Appellant has acknowledged, however, that the business provided her with a job, and that the parties used profits from the business, both before and after its liquidation, to live on. It is not unreasonable for the court to find she received a benefit from the business justifying her obligation. As the asset did not generate income or property for the parties, the court did not abuse its discretion in finding the appellant failed to generate a claim against the husband’s premarital assets.

The final error claimed in the proposed findings is that the appellant had an irrevocable interest in a trust fund which provided her with the opportunity to generate future capital assets and income. While direct reference is not made to the existence of appellant’s interest in the trust, evidence was introduced of its existence, the fact she could borrow against the trust and that the trust had been created by appellant’s parents. Therefore, we do not find reversible error.

Having examined the record and the court’s findings we do not find that the District Court abused its discretion.

Issue #2.

Did the District Court abuse its discretion in not considering the nonmonetary contributions of the appellant to the marriage and to the preservation of the marital assets?

Appellant maintains the court should consider the nonmonetary contributions of a spouse when dividing the marital assets. This assertion is correct. See Section 40-4-202(1), MCA; and Eschenberg v. Eschenberg (1976), 171 Mont. 247, 251, 557 P.2d 1014, 1016; In re Marriage of Dow (Mont. 1988), [230 Mont. 416,] 750 P.2d 1064, 45 St.Rep. 317. In this case however, the court did consider the contribution of the appellant toward maintaining the marital assets. Unfortunately the court determined her contribution toward the marital assets were lost when the parties deeded back the marital home to the bank in satisfaction of the mortgages on the property. The husband’s contribution of his time and effort was also lost at that time. Further, while the parties experienced a reduction in their net worth over the length of the marriage, the court appears to have attempted to return appellant to her maximum net worth at the time of the marriage. In light of the short duration of the marriage and the reduction of the husband’s premarital net worth this does not appear to be an inequitable division.

Issue #3.

Did the District Court abuse its discretion in not adjusting the property rights reasonably and equitably?

In her third issue, appellant maintains the court’s division of the marital property is unfair in light of her contributions toward the marital assets. In essence this issue is a rehashing of the first two issues. In the case of In re Marriage of Keepers (Mont. 1984), [213 Mont. 350,] 691 P.2d 810, 41 St.Rep. 2163, this Court stated:

“Reasonable minds could differ on what would be the most equitable distribution of the parties’ property. That the case may be decided differently is not the inquiry on appeal, the question is whether the fact determination of the court below is clearly erroneous. Rule 52(a), M.R.Civ.P.”

Keepers, 691 P.2d at 813, 41 St.Rep. at 2167.

In Keepers, as in this case, review of the record showed the District Court’s findings contained an error. There this Court found the error did not result in a finding that the District Court clearly abused its discretion. The error we find in this case, the fact that Edith only received $1,000 of temporary maintenance, is correctible and does not constitute an abuse of discretion by the District Court.

Issue #4.

As its final issue, appellant raises the question of whether or not the District Court abused its discretion by failing to consider the tax consequences of the marital property distribution. The findings of fact and conclusions of law adopted by the lower court do not address the issue directly.

Appellant contends the lower court’s distribution of the marital assets constitutes a “triggering” event, making her liable for state and federal income taxes on the accord and satisfaction of the marital home. This contention is without merit. The triggering event in this instance was the accord and satisfaction itself, which created any resulting tax liability at that time. “[W]here a property distribution ordered by a court includes a taxable event precipitating a concrete and immediate tax liability, such tax liability should be considered by the court before entering its final judgment.” In re Marriage of Beck (Mont. 1981), [_Mont._,] 631 P.2d 282, 285, 38 St.Rep. 1054. But, “a District Court does not abuse its discretion by refusing to consider theoretical tax consequences when the court-ordered property distribution does not contemplate any taxable event which triggers present tax liability.” Beck, 631 P.2d at 285, 38 St.Rep. at 1058. See In re Marriage of Gilbert (Mont. 1981), [_Mont__,] 628 P.2d 1088, 38 St.Rep. 743.

Finally, appellant failed to produce adequate evidence at the hearing upon which the court could make a determination of the existence of the tax consequences. The only evidence was testimony by the appellant that she would experience a taxable gain on the accord and satisfaction for the marital home. Appellant relied on her unsubstantiated belief on the cost of building the house, which conflicts with evidence presented by the husband. Because of the theoretical nature of the contention, we hold the court did not abuse its discretion by refusing to consider the tax consequences.

In light of our determination that the District Court was in error in finding appellant had received the $2,000 which had been ordered, but only received $1,000, we remand to the District Court to compel payment of the sum of $1,000 by respondent husband to the wife as previously ordered. Judgment affirmed, subject to the above procedure.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, HUNT and McDONOUGH concur.


author: MR. JUSTICE WEBER

text:
    LOWELL JEAN WILLIAMS, Plaintiff and Appellant, v. RONALD RIGLER, Kari Rigler, and Thelma Gray, Defendants and Respondents.
    No. 88-125.
    Submitted on Briefs Aug. 18, 1988.
    Decided Sept. 27, 1988.
    761 P.2d 833.

      K. Robert Foster, Bozeman, for plaintiff and appellant.
    Gene I. Brown, Landoe, Brown, Planalp & Kommers, Bozeman, Arnold Huppert, Huppert & Swindlehurst, Livingston, for defendants and respondents.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Mr. Williams brought an action for libel and slander against Park County and the Park County Sheriff, Robert Oakland. He also brought an action for libel and slander against Ronald Rigler, Kari Rigler, and Thelma Gray. Since both actions sought damages arising out of related incidents, they were consolidated for trial. The jury returned a verdict in favor of all defendants in the District Court for the Sixth Judicial District, Park County. Mr. Williams appeals the judgment entered in favor of the Riglers and Thelma Gray only. We affirm.

The issues are:

1. Should this appeal be dismissed based on the lack of a full transcript submitted by plaintiff for our review?

2. Did the District Court abuse its discretion in refusing challenges to the jury for cause?

3. Did the District Court err in allowing the defendants eight peremptory challenges?

4. Were statements made during defense counsel’s closing argument an improper appeal to local prejudice?

Plaintiff submitted only a partial transcript essentially covering the pretrial rulings, voir dire, and opening and closing arguments. The transcript does not include any of the testimony submitted in the course of the jury trial. In his brief plaintiff refers to various interrogatories and admissions, apparently contending these establish the facts of the case. The record does not warrant that conclusion. As a result, we actually have no record from which we may summarize the pertinent facts. For the assistance of parties reading the case, we will briefly summarize the contentions on the part of the plaintiff as set forth in his brief.

Plaintiff contends that Mr. and Mrs. Rigler filed criminal trespass charges against him after he was discovered on their ranch, owned by Thelma Gray, near Emigrant, Montana. Plaintiff also contends that various anonymous threatening phone calls were made to the Riglers. Plaintiff further contends that the Livingston Enterprise printed various statements connecting the anonymous calls and the criminal trespass charges, with reference being made to “horn hunters” in the area. From his brief it does not appear that plaintiff contends his name even appeared in the newspaper articles. Plaintiff contends that it subsequently appeared that the Riglers had staged the various anonymous phone calls. Plaintiff then filed libel and slander actions against the Riglers, Thelma Gray, Park County and the Park County Sheriff, as well as the Livingston Enterprise. The Livingston Enterprise was granted summary judgment. Plaintiff appeals the jury verdict in favor of the Riglers and Thelma Gray.

I

Should this appeal be dismissed based on the lack of a full transcript submitted by plaintiff for our review?

Before proceeding to the substantive issues raised by plaintiff, we address the defendants’ motion to dismiss this appeal based on a failure to comply with the Montana Rules of Appellate Procedure. Rule 9(b), M.R.App.P., allows a party to submit a partial transcript for appeal, but requires a description of the included parts and a statement of the prospective issues to be served on the respondent. The plaintiff submitted a partial transcript to this Court but failed to comply with the above requirements to allow the respondent to reply to the adequacy of the transcript prior to this appeal. It would be appropriate to dismiss the appeal as a result of plaintiff’s disregarding the rules.

However, this Court has concluded that an appeal need not be automatically dismissed in every instance where the Rules of Appellate Procedure have not strictly been followed. Garza v. Peppard (Mont. 1984), [213 Mont. 25,] 689 P.2d 279, 280, 41 St.Rep. 1922, 1923. Because the record does contain sufficient information to consider the significant issues on challenges to the jury, we will consider those aspects of the appeal.

II

Did the District Court abuse its discretion in refusing challenges to the jury for cause?

The plaintiff argues that two jurors who considered themselves to be defense counsel’s current clients should have been excused when challenged for cause. Montana’s statute listing the grounds for challenges to jurors for cause does not address past or present business relations between a juror and an attorney involved in the case. Section 25-7-223, MCA. In absence of specific statutory authority rendering a juror client incompetent, we will defer to the discretion of the District Court, whose judgment will not be set aside unless a clear abuse of discretion is shown. Abernathy v. Eline Oil Field Services (1982), 200 Mont. 205, 214, 650 P.2d 772, 777.

The transcript reveals that although both jurors considered defense counsel to be their attorney, neither had any business pending with him at the time of trial. When asked by the judge, one of the jurors answered that her past relationship with counsel would not reflect on her ability to act as a juror. Because the District Court confirmed that no present business was pending between either of the jurors and defense counsel, we find no abuse of discretion by the District Court in refusing Williams’ challenges for cause.

Ill

Did the District Court err in allowing the defendants eight peremptory challenges?

The plaintiff claims that the District Court should not have allowed a total of eight peremptory challenges to the defense. Four were awarded to Park County and the Park County Sheriff, and four to the Riglers and Thelma Gray.

Each party is entitled to four peremptory challenges under Section 25-7-224(1), MCA. “Each party” has been interpreted to mean “each side,” unless the position of the codefendants is shown to be “hostile.” Hunsaker v. Bozeman Deaconess Foundation (1978), 179 Mont. 305, 313, 588 P.2d 493, 499. For this Court to uphold an uneven grant of peremptory challenges, we must be convinced that the District Court concluded from the pleadings, representations, or evidence that hostility existed and that the court set forth the reasons for its ruling. Hunsaker, 588 P.2d at 501.

The issue of peremptory challenges was first raised in this case at the pretrial level. The court heard argument from all parties and invited briefs on the matter prior to its ruling that each defendant would be allowed four peremptory challenges. The District Court reasoned that because the suits against the defendants were consolidated involuntarily, hostility was present. The defendants in the present action contend that they did not make any statements to the media so that if they had been found responsible in any manner to the plaintiff, they would have sought indemnity from the Park County Sheriff who actually made the statements to the newspaper. The District Court concluded that the interests of the parties were adverse on the claim of indemnity theory. We affirm the holding of the District Court in granting four peremptory challenges to each set of defendants.

IV

Were statements made during defense counsel’s closing argument an improper appeal to local prejudice?

In the absence of a transcript of the evidence submitted to the jury, we are not able to consider plaintiff’s contention that defense counsel made improper appeal to local prejudice. We note this was a libel and slander action which in itself apparently raised questions with regard to the plaintiff’s reputation. In the absence of a transcript we are not able to evaluate the accuracy or necessity of closing argument.

We decline to address the plaintiff’s closing argument issue. We affirm.

MR. JUSTICES McDONOUGH, GULBRANSON, SHEEHY and HUNT concur.


author: MR. JUSTICE McDONOUGH

text:
    ROBERT SHIPLET and Jacqueline Shiplet, Plaintiffs and Appellants, v. FIRST SECURITY BANK OF LIVINGSTON, INC., a Montana corporation, Defendant and Respondent.
    No. 88-141.
    Submitted on Briefs Aug. 11, 1988.
    Decided Sept. 27, 1988.
    762 P.2d 242.

      Terry Schaplow, Morrow, Sedivy & Bennett, Bozeman, for plaintiffs and appellants.
    Joe Swindlehurst, Huppert & Swindlehurst, Livingston, Sid Thomas, Moulton Law Firm, Billings, for defendant and respondent.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

Robert and Jacqueline Shiplet (Shiplets) appeal from the order of the District Court of the Sixth Judicial District, Park County, granting summary judgment in favor of First Security Bank of Livingston (Bank). We affirm.

The Shiplets present one issue for review:

Did the District Court err in granting the Bank summary judgment on all counts of the complaint?

A complete statement of the facts would be very lengthy. However, an outline of relevant events will provide sufficient background and more detail will be given where required. The Shiplets operate a ranch south of Livingston. They have done business with the Bank for a number of years, entering into various loan agreements in the course of their ranching operations. In 1978, the Shiplets sought further financing for their ranch from the Bank in the form of a $350,000 loan.

The Bank indicated that it could not make the loan unless a guaranty could be arranged through the Farmers Home Administration (FmHA). The Bank then submitted a Request for Guarantee [sic] to FmHA, which listed a “Line of Credit Ceiling” of $350,000, an interest rate of 10%, and a term of five years. The Contract of Guarantee [sic] issued by FmHA upon its approval of the application listed no terms particular to the Shiplets’ loan other than the $350,000 credit ceiling.

Once the guaranty was obtained, the Bank and the Shiplets executed a one-year promissory note for $350,000 at an interest rate of 10%. The Shiplets were not able to repay the total principal and interest due after one year, and in 1979 they executed a new one-year note. This began a cycle of notes, most of which were issued for six-month terms. The principal and interest still outstanding as each note came due were carried over to the new note.

When the 1978 note came due and it appeared that another note would be necessary, the Bank contacted FmHA and asked whether the terms of the guaranty would prohibit the Bank from raising the rate of interest on the loan to reflect the overall rise in interest rates taking place at that time. The FmHA replied that according to its attorneys, such a rate increase was permissible. The 1979 note carried an interest rate of 11.75%. The interest rate on subsequent notes fluctuated as the prime lending rate rose and fell, reaching a peak of 21 Vi % in 1981.

The FmHA guaranty expired in 1984, at which time payments from the Shiplets on their loan were in arrears. The FmHA decided that the Bank would have to continue the Shiplets’ loan without a guaranty or present a plan of liquidation. In February of that year, the Shiplets and their attorney began meeting with Bank officials to determine what could be done to resolve the situation. Negotiations resulted in execution of a $400,000 note and a new, seven-year FmHA guaranty. The conditions attached to the new guaranty included complete repayment of interest and operating credit at the end of each year, and liquidation of some Shiplet real estate holdings in order to repay $338,000 of the loan. When this final note reached maturity on September 28, 1985, approximately $348,000 remained outstanding.

In October of 1985, the Shiplets filed suit against the Bank based on the increased interest charged on the post-1978 notes. They alleged breach of contract, breach of third-party-beneficiary contract, bad faith, fraud, negligent infliction of emotional distress, breach of fiduciary duty and economic duress. On January 21, 1988, the District Court issued an order granting the Bank’s motion for summary judgment as to all thirteen counts enumerated in the Shiplets’ complaint. This appeal followed.

In order for summary judgment to issue, the moving party must show there is no genuine issue as to facts that are material in light of the substantive principles entitling that party to judgment as a matter of law. If the moving party meets this burden, the non-moving party then has the burden of showing a genuine issue of material fact. These standards also apply to this Court when reviewing the grant or denial of summary judgment. Frigon v. Morrison-Maierle, Inc. (Mont. 1988) [233 Mont. 113,] 760 P.2d 57, 45 St.Rep. 1344, and cases cited therein.

I.

The first count of the Shiplets’ complaint alleged breach of contract. They argued the Bank represented to them that the application form for the guaranty was a contract between the Bank and the Shiplets for a five-year loan at an annual interest rate of 10%. Shiplets alleged the Bank breached this contract by raising the rate of interest charged on the loan above 10%.

The District Court held this count failed for a number of reasons, including the application was not a contract between the Bank and the Shiplets. The court ruled the contract between the two parties was evidenced by the 1978 promissory note for a term of one year at 10%, and any oral representations made by the Bank prior to the signing of that note merged with the note’s terms.

On appeal, the Shiplets direct two arguments at the District Court’s holding. First, they argue Weinberg v. Farmers State Bank of Worden (Mont. 1988), [231 Mont. 10,] 752 P.2d 719, 45 St.Rep. 391, is controlling in this case. According to the Shiplets, this Court held in Weinberg such a contract existed in a fact situation very similar to this case. In Weinberg, the farm operators alleged a seven-year loan agreement at an interest rate of 9V2%. However, in that case both parties had signed a promissory note which on its face listed a seven-year term and a 9lA % interest rate.

The only writing in this case containing the terms alleged by the Shiplets is the application for guaranty. That document was-signed only by the Bank’s agent, and was directed to the FmHA. The FmHA and the Bank later executed a separate contract of guaranty once the application had been approved. The application was not a contract between the Bank and the Shiplets.

As to any oral representations by the Bank that the application was in fact a contract, the District Court quoted language from our decision in First National Montana Bank of Missoula v. McGuiness (Mont. 1985), [217 Mont. 409,] 705 P.2d 579, 42 St.Rep. 1288:

“[E]vidence of prior oral agreements is not admissible for the purpose of altering subsequent written agreements dealing with the same subject, and that the prior oral agreements and the written agreement will merge into the subsequent written agreement unless they are distinct and can stand independently of one another.”

705 P.2d at 584. Under the doctrine of merger as enunciated in McGuiness, any oral representations made by the Bank merged with the terms of the note, which then represented the contract reached between these two parties.

The Shiplets second argument is that an exception to the doctrine of merger exists for evidence of an oral agreement introduced in order to establish fraud. As will be discussed more fully below,- any such evidence would be barred by the two-year statute of limitations for fraud-related torts found at Section 27-2-203, MCA. The District Court was correct in granting summary judgment on this count.

II.

The Shiplets’ second count alleged breach of a third-party-beneficiary contract. They argued they are third-party beneficiaries of the guaranty contract between the Bank and the FmHA. On appeal, the Shiplets argue Weinberg is controlling on this issue as well. They assert this Court found a third-party-beneficiary contract in Weinberg, rejecting the argument that the guaranty contract was strictly between the bank and the FmHA. Again, the distinguishing factor of the promissory note in Weinberg is overlooked in the Shiplets’ argument.

In Weinberg, the guaranty contract was not held to be a third-party-beneficiary contract as such. The bank in that case argued under the parol evidence rule found at Section 28-2-905, MCA, the note was evidence only of the initial advances made to the Weinbergs, which had been repaid. The Weinbergs alleged the note was evidence of an agreement for a line of credit lasting seven years. We held the parol evidence rule did not apply, because the Weinbergs were not attempting to vary the terms of the note. They were instead basing their argument on terms found on the note’s face. We therefore applied Section 28-3-402, MCA, which allows evidence of the circumstances under which an agreement is made in order to explain, but not modify, its terms.

The guaranty contract in Weinberg was one piece of evidence showing the circumstances surrounding the execution of the note. The documents used in procuring the guaranty and the bank’s subsequent actions in reliance on the guaranty contract all pertained to what the bank and the Weinbergs had in mind when they executed the note.

Unlike Weinberg, the Shiplets are not seeking to enforce the terms of their note with the Bank. Instead, they seek to enforce the guaranty contract itself. The District Court’s citation to the South Dakota Supreme Court decision in Swier v. Norwest Bank (S.D. 1987), 409 N.W.2d 121, is persuasive. The loan in that case was an FmHA emergency livestock loan, the same kind of loan involved in this case. Such loans are governed by regulations found at 7 CFR Sections 1980.201 et seq, which do not prohibit a bank from raising the interest rate charged on a loan during the life of the guaranty. Before raising the rate it charged the Shiplets, the Bank contacted the FmHA to find out if this would violate the guaranty contract, and was told correctly that it would not. The District Court was correct in granting summary judgment on this count.

III.

The third count of the Shiplets’ complaint alleged breach of the statutory obligation of good faith found in the Uniform Commercial Code as adopted in Montana. Section 30-1-203, MCA, states, “[e]very contract or duty within this code imposes an obligation of good faith,” and Section 30-1-202(19), MCA, states that “good faith” means honesty in fact. The Shiplets’ argument on appeal states basically that there is ample evidence of dishonesty in a number of representations made to them by the Bank’s agent. While it appears from our review of the record that the Shiplets experienced difficulties in dealing with the Bank, the evidence before us does not support a violation of statutory good faith.

Montana case law on this subject is scarce. However, because the statutory provisions cited above are part of the Uniform Commercial Code, we are afforded the opportunity to look to decisions in other states interpreting virtually identical provisions. From our reading of cases such as Third National Bank in Nashville v. Hardi-Gardens Supply of Illinois, Inc. (M.D. Tenn. 1974), 380 F.Supp. 930; and First Bank of Savannah v. Kilpatrick-Smith Construction Co., Inc. (1980), 163 Ga.App. 112, 264 S.E.2d 576, it appears the gravamen of the statutory good faith requirement is whether the terms of the agreement were carried out faithfully.

Our review of the record before us shows the various notes evidencing agreement between the Bank and the Shiplets were in fact carried out by the Bank. The monies agreed upon were advanced at the rates agreed upon in writing by both parties. Statements made by the Bank’s agent, while not always strictly forthright, did not deprive Shiplets of the benefit of the bargains they struck with the Bank. The District Court was correct in granting summary judgment on this count.

IV.

The Shiplets’ fourth count alleged breach of the implied covenant of good faith and fair dealing. The District Court’s ruling cited authority from this Court requiring that a breach of contract must be the result of some “impermissible activity” before the breaching party can be held to have also breached the implied covenant of good faith and fair dealing. See, Noonan v. First Bank Butte (Mont. 1987), [227 Mont. 329,] 740 P.2d 631, 44 St.Rep. 1124; Nordlund v. School District No. 14 (Mont. 1987), [227 Mont. 402,] 738 P.2d 1299, 44 St.Rep. 1183; Nicholson v. United Pacific Insurance Co. (Mont. 1985), [219 Mont. 32,] 710 P.2d 1342, 42 St.Rep. 1822.

The Shiplets seek to distinguish this authority by noting in Nicholson we held a breach of contract was not a prerequisite to breach of the covenant, because the implied covenant of good faith is not an obligation arising from the contract itself. Nicholson, 710 P.2d at 1348. While this is true, we also stated the obligation imposed by the covenant is to act reasonably. Under this standard, we have held the “minimal requirement” for breach of the covenant is action by the defendant that is “arbitrary, capricious or unreasonable, and exceeded plaintiffs’ justifiable expectation [that the defendant act reasonably].” Noonan, 740 P.2d at 635.

In this case, the Shiplets had a justifiable expectation that the Bank would act reasonably by loaning them money on the terms agreed upon in the notes. As we found above, this was done. The evidence adduced by the Shiplets fails to show arbitrary or unreasonable conduct by the Bank. The District Court was correct in granting summary judgment.

V.

Counts five through nine of the complaint alleged various forms of fraud and fraud-related torts. The District Court ruled these claims were barred by Montana’s two-year statute of limitations for actions based on fraud or mistake found at Section 27-2-203, MCA. On appeal, the Shiplets contend they had developed a confidential relationship with the Bank similar to that found by this Court in Weinberg, which tolled the statute of limitations.

The existence of a confidential relationship, however, is not an issue here. The authority cited by Shiplets for the proposition that the statute was tolled in this case is 37 Am. Jur. 2d Fraud and Deceit Section 409:

“Where a confidential relationship exists between the parties, failure to discover facts constituting fraud may be excused.”

The basis of the Shiplets’ complaint is that the Bank represented to them it would loan them money at a rate of 10% over a period of five years, and then did not do so. In January of 1978, the Shiplets signed a note that did not contain the alleged five-year term. In January of 1979, they signed a note that contained neither the alleged term, nor the alleged interest rate. They had at that point certainly discovered facts sufficient to constitute fraud. There was no failure to discover facts, and therefore no need for a confidential relationship argument. The District Court’s ruling was correct.

VI.

The Shiplets’ tenth count alleged negligent infliction of emotional distress. Negligent infliction of emotional distress is a narrowly-defined tort in Montana. We set out the test for this tort in Versland v. Caron Transport (1983), 206 Mont. 313, 671 P.2d 583, by requiring an emotional impact resulting from direct observance of the death or serious injury of a close relative. That situation clearly is not present here, and the count is therefore at least mislabeled.

The body of this count, and the Shiplets’ subsequent arguments to the District Court and this Court, use language adopted from our decision in Johnson v. Supersave Markets, Inc. (Mont. 1984), 211 Mont. 465, 686 P.2d 209, 41 St.Rep. 1495, concerning emotional distress as an element of damages resulting from a tort. We are here affirming the District Court’s grant of summary judgment in favor of the Bank on all counts listed in the Shiplets’ complaint. Therefore we need not reach the issue of damages.

VII.

The eleventh count of the complaint alleged promissory note breach of contract. The Shiplets and the Bank allegedly agreed interest would be due at maturity, with all interim payments applied to principal. The Shiplets allege the Bank partially misapplied some interim payments to interest.

Both parties agree the District Court correctly stated the general rule that interim payments on a debt are normally applied first to accrued interest. Shiplets argue, however, the testimony of the Bank’s expert witness created a genuine issue of material fact as to a possible exception to the rule. The Bank’s expert testified the provision that interest would be due at maturity meant, in his opinion, interim payments would be applied to principal. The Shiplets also point out that two of the notes state early payments would be applied to principal.

A recent statement of the general rule on application of interim payments is found at 45 Am. Jur. 2d Interest and Usury Section 99. Known as the “United States Rule,” it provides interim payments are first applied to accrued interest unless there is a statute or an agreement to the contrary. See, e.g., Shutts v. Phillips Petroleum Co. (1987), 240 Kan. 764, 732 P.2d 1286. Neither exception is present in this case.

Lack of an agreement as to application of interim payments is evidenced by the Shiplets’ own brief to this Court. They contend they have always asked that payments be applied first to principal, but the Bank’s reply has been “they’d do whatever they want to with it.” There is likewise no statute in Montana dictating application of interim payments to principal. Furthermore, the note language cited by the Shiplets stating early payments would be applied to principal was preceded by the caveat that such early payments would not relieve the debtor of the duty to continue making payments under the agreed payment schedule. This language therefore deals with payments made outside the normal course of the loan, not regular interim payments. The District Court was correct in granting summary judgment on this count.

VIII.

Count twelve of the complaint alleged breach of fiduciary duty arising from the confidential relationship between the Shiplets and the Bank. On appeal, the Shiplets again argue the situation here is analogous to that in Weinberg, where a confidential relationship was found. Shiplets also cite our decision in Deist v. Wachholz (1984) 208 Mont. 207, 678 P.2d 188, 41 St.Rep. 286, for the proposition that a confidential relationship can exist between a bank and its customer in certain situations.

In Deist, we began with the general rule that a bank-customer relationship does not ordinarily give rise to fiduciary responsibilities. However, we found an exception to this general rule when special circumstances are present. In Deist, the plaintiff and her deceased husband had banked with the defendant for over 20 years. After the husband’s death, the bank had taken an active advisory role in the plaintiff’s finances, and she had relied on that advice. Deist, 678 P.2d at 193-94. Likewise in Weinberg, we found a confidential relationship where the bank “participated in and encouraged the changes to be made regarding the Weinbergs’ farming operation.” Weinberg, 752 P.2d at 731.

One telling factor distinguishes this case from Deist and Weinberg. The Shiplets did not place such great reliance on the Bank’s advice. The Shiplets felt they knew more about ranching than did the Bank’s agent. While the Bank advised the Shiplets on the operation of their ranch, that advice was not always heeded. For example, they refused to withdraw from the FmHA guaranty program when advised to do so in 1979, and even refused to sell land when required to do so by the conditions of the seven-year FmHA guaranty issued in 1984. Furthermore, they were represented by counsel during the 1984 negotiations.

No special circumstances are present in this case to create an exception to the general rule that a bank’s relationship with its customer is not a confidential one. The District Court was correct in granting summary judgment on this count.

IX.

The Shiplets final count alleged Economic Duress, in that the Bank’s agent threatened foreclosure when he had no legal right to do so. Shiplets advance this argument again on appeal, stating the Bank’s unwarranted foreclosure threats destroyed their free agency and left them with no choice but to sign the notes. The Shiplets’ argument on this count fails for much the same reason as their argument concerning breach of fiduciary duty. Economic duress, also known as “business compulsion,” concerns the making of contracts under circumstances showing a lack of free will on the part of one of the contracting parties. However,

“[economic duress] is not established merely by proof that consent was secured by the pressure of financial circumstances, or by the fact that one party insisted upon a legal right and the other party yielded to such insistence.”

25 Am Jur 2d Duress and Undue Influence Section 7.

The record before us shows the notes at issue represented an indebtedness incurred at the request of the Shiplets. They were unable to repay even the first note completely, and with each new note, the indebtedness compounded. The Shiplets’ claims that they had no choice but to sign these notes stem not from some unlawful threat by the Bank, but from the pressure of their mounting debt. True, had they not signed the notes, the Bank could have “put them out of business,” but this would have been through foreclosure, the Bank’s lawful remedy for failure of repayment. The District Court was correct in granting summary judgment on this count.

We affirm the order of the District Court.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER, GULBRANDSON, HUNT and SHEEHY concur.


text:
    In re the MARRIAGE OF LINDA KATHLEEN SYLJUBERGET, Petitioner and Respondent, and GARY WARREN SYLJUBERGET, Respondent and Appellant.
    No. 88-233.
    Submitted on Briefs Aug. 26, 1988.
    Decided Sept. 27, 1988.
    Rehearing Denied Nov. 15, 1988.
    763 P.2d 323.

      K. Dale Schwanke, Jardine, Stephenson, Blewett & Weaver, Great Falls, David Cybulski, Plentywood, Ken Hoversland, Scobey, for respondent and appellant.
    Loren J. O’Toole, Plentywood, for petitioner and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal brought by the appellant, Gary Warren Syljuberget, from a marital dissolution order of the Fifteenth Judicial District, Sheridan County, awarding Wife custody of the parties’ only child, child support of $200 per month, maintenance of $200 per month for one year, one-half the sale proceeds of the marital home, and one-half her attorney’s fees. We affirm the District Court on all issues.

Husband raises five issues for our review:

1. Whether the District Court erred in awarding sole custody to Wife.

2. Whether the District Court erred in awarding Wife $200 per month child support.

3. Whether the District Court erred in distributing the marital estate.

4. Whether the District Court erred in awarding Wife maintenance.

5. Whether the District Court erred in awarding Wife one-half her attorney’s fees.

Linda Kathleen Syljuberget and Gary Warren Syljuberget were married June 10, 1983. On July 21, 1983, the parties only child, Amanda Valeta Syljuberget, was born. The parties’ resided in the family home located at 421 East 1st Avenue, Plentywood, Montana. Husband owned the property prior to their marriage.

The parties separated on August 8, 1985. Wife was given temporary custody of Amanda until trial. On September 16, 1985, the parties stipulated to $175 per month as a reasonable amount of child support. Wife remained in the family residence in Plentywood pending dissolution. Husband now lives in Livingston, Montana.

On January 23,1987, Wife moved to hold Husband in contempt for failing to pay child support; Husband was in arrears approximately $2,525. On March 2, 1987, the District Court ordered Husband to pay $200 per month child support. In addition, the court enjoined Husband from entering the family residence until completion of the action.

Husband and Wife were involved in a number of business ventures, beginning in 1976 and continuing until their separation. At various times during this period, the parties jointly operated stores in Billings, Montana, Crosby, North Dakota and Plentywood, Montana. Wife managed the day-to-day operations of the business, while Husband oversaw the financial matters. Each party financially invested in the stores. Husband had significant resources and extensive financial experience and Wife contributed cash savings and amounts received from the sale of two trailer homes. In addition, the parties obtained a number of business loans, including one secured by a mineral interest inherited by Wife which was satisfied prior to dissolution.

Neither party drew a regular salary from their work. Instead, money was occasionally withdrawn from profits to reinvest or make loan payments and improvements to the family home.

As the stores gradually became unprofitable, the parties were forced to liquidate other assets, including taking additional mortgages on the family home. Finally, the Plentywood store was sold at a loss.

After separation Husband moved to Livingston, Montana, where he acquired two Town Pump Convenience Stores. In addition to his two stores, Husband owns a one-third interest in BOS Enterprises, certificates of deposit worth $2,225, various recreational vehicles and boats, and a note receivable worth $10,000. Husband nets approximately $8,000 per year through his part-time accounting practice. At trial, financial statements were introduced evidencing Husband’s net worth to be between $105,000 and $211,000.

Wife works as an advertising salesperson for a local radio station. She earns a net salary of $694 per month, plus commissions of $150 per month.

On February 22, 1988, the District Court issued its final decree awarding sole custody of Amanda to Wife, plus $200 per month child support, $200 per month maintenance for one year, one-half the proceeds from the sale of the family residence and one-half Wife’s attorney’s fees.

I.

The first issue raised by Husband is whether the court was correct in awarding sole custody to Wife. Husband argues the District Court failed to properly state in its decision the reasons considered in making the custody award, in accordance with Section 40-4-212, MCA. Instead, Husband argues the evidence supported an award of joint custody.

The standard of review on custody issues was discussed in Bier v. Sherrad (Mont. 1981), [191 Mont. 215,] 623 P.2d 550, 551, 38 St.Rep. 158, 159:

“In order to prevail, [the appellant] must show an abuse of discretion by the judge, must demonstrate that there is a clear preponderance of evidence against the findings, and must overcome the presumption thát the judgment of the trial court is correct. In reviewing the District Court’s custody order, this Court need only look to the record to see if the factors set forth in Section 40-4-212, MCA, were considered, and then must determine whether the trial court made appropriate findings with respect to these criteria. (Citations omitted.)”

In all cases, the primary importance is placed on determining the best interest of the child. Section 40-4-212, MCA (1985). The court shall consider all relevant factors including:

(1) the wishes of the child’s parent or parents as to his custody;
(2) the wishes of the child as to his custodian;
(3) the interaction and interrelationship of the child with his parent or parents, his siblings, and any other person who may significantly affect the child’s best interest;
(4) the child’s adjustment to his home, school, and community; and
(5) the mental and physical health of all individuals involved.

Husband correctly asserts the District Court must presume joint custody is in the best interest of the child. However, the District Court may, under the factors set forth above, decline to order joint custody. Section 40-4-224(1), MCA (1985). In such cases, the judge must enter in his decision the reasons for a denial. While we recognize the District Court’s findings were not exemplary, we nonetheless find no error.

This Court will not substitute its judgment for that of the trier of fact. “The responsibility for deciding custody is a delicate one which is lodged with the district court.” In re Marriage of Manus (Mont. 1987), [225 Mont. 457,] 733 P.2d 1275, 1277, 44 St.Rep. 398, 401, quoting Gilmore v. Gilmore (1975), 166 Mont. 47, 51, 530 P.2d 480, 482. “[T]he trial court is in the best position to observe the witnesses and acquire a feel for their credibility and character.” In re Marriage of J.J.C. (Mont. 1987), [227 Mont. 264,] 739 P.2d 465, 467, 44 St.Rep. 1068, 1071. The record indicates that Amanda was well adjusted to her home in Plentywood, where she had many friends and relatives. Amanda has spent the great majority of her life with her mother, and they enjoy a good and continuous relationship. On the other hand, Mr. Syljuberget was often separated from his daughter, having moved to Livingston. During sporadic visits to Plentywood, Mr. Syljuberget admitted to taking Amanda into bars, for lack of any other place to visit. Testimony also alluded to possible alcohol related problems. The District Court found sole custody to be in Amanda’s best interest.

Additionally, parental cooperation is a key factor in an award of joint custody. In re Marriage of Jacobson (Mont. 1987), [228 Mont. 458,] 743 P.2d 1025, 1027, 44 St.Rep. 1678, 1680. The District Court saw no such cooperation. Indeed, the record reveals numerous instances of hostility, meddling and harassment, culminating in the temporary relief order of March, 1987. Viewing the record as a whole, strong evidence exists to support the District Court’s award of sole custody to the wife. On this basis, we find no abuse of discretion.

II.

The second issue raised by Husband is the award of child support. Neither party disputes the appropriateness of child support. Husband’s only complaint surrounds the amount awarded by the District Court.

“In reviewing child support issues, our standard is that the ‘award made by the District Court will not be disturbed on appeal unless there has been a clear abuse of discretion resulting in substantial injustice.’ ”

In re Marriage of Tonne (Mont. 1987), [226 Mont. 1,] 733 P.2d 1280, 1284, 44 St.Rep. 411, 416, quoting Grenfell v. Grenfell (1979), 182 Mont. 229, 232, 596 P.2d 205, 207.

The District Court was well aware of the parties’ original stipulation of $175 per month child support. However, evidence on the record nonetheless supports the trial judge’s award of $200 per month. Most illustrative is the temporary relief order, entered March 2, 1987, ordering Husband to pay an additional $25 per month for past due child support amounts. Additionally, Husband is financially able to pay the amount awarded. No abuse of discretion appears in the District Court’s award of child support.

III.

Third, Husband argues the District Court improperly distributed the marital estate. Again, this Court recognizes the District Court has far-reaching discretion in resolving property divisions in dissolution proceedings and its judgment will not be altered unless a clear abuse of discretion is shown. In re Marriage of Watson (Mont. 1987), [227 Mont. 383,] 739 P.2d 951, 954, 44 St.Rep. 1167, 1170.

Section 40-4-202, MCA (1985), governed the division of property in a marital dissolution. The trial court need not articulate each factor separately as long as the findings are sufficient to allow non-speculative review by this Court. In re Marriage of Reid (Mont. 1987), [226 Mont. 116,] 733 P.2d 1302, 1304, 44 St.Rep. 500, 503. These factors give the lower court ample latitude to equitably divide the property.

Husband disputes two aspects in the property division: the inclusion of the home in the marital estate, and the exclusion of Wife’s mineral interest.

First, Husband disputes the award of one-half the proceeds from the sale of the marital home. Because Husband owned the home prior to the marriage, he asserts it should not have been included in the marital estate. While the source of marital property is a factor to be considered by the District Court, Watson, 739 P.2d at 954, it is not absolutely determinative. The court is not bound to restore the parties to their premarital status. In re Marriage of Keepers (Mont. 1984), [213 Mont. 350,] 691 P.2d 810, 813, 41 St.Rep. 2163, 2167. Section 40-4-202(1], MCA (1985), provided in pertinent part:

“[I]n dividing property acquired prior to the marriage . . . the court shall consider those contributions of the other spouse to the marriage, including: (a) the non-monetary contribution of a homemaker; (b) the extent to which such contributions have facilitated the maintenance of this property; and (c) whether or not the property division serves as an alternative to maintenance arrangements.”

Under this standard, prior acquired property may properly be included as part of the marital assets where contributions of the other spouse have, for example, facilitated maintenance of the property. In re Marriage of Snyder (Mont. 1986), [220 Mont. 262,] 714 P.2d 556, 557, 43 St.Rep. 346, 348; In re Marriage of Jorgensen (1979), 180 Mont. 294, 299, 590 P.2d 606, 610. In the present case, the house in Plentywood was undisputably the property of the Husband prior to the marriage. In evaluating the facts, we note the District Court found the parties had accumulated several debts during their marriage, including debts on the family home. The record further indicates these debts to be directly related to the parties’ joint business operations. Indeed, Husband admits money was borrowed against the home for the express purpose of investing in the businesses. Certainly, a division of the equity in the home, upon sale, is a fair means to compensate Wife for her contributions. We cannot say the District Court abused its discretion in including the home as part of the marital property.

Second, Husband disputes the lower court’s exclusion of Wife’s mineral interest as a marital asset. Husband alleges the mineral interest was fraudulently placed outside of the marital estate through a “sham” transfer. We find these allegations to be without basis. The record illustrates Wife transferred the mineral interest to her aunt and uncle in return for payment of various bills and expenses totaling over $1,500. A mineral deed transferring ownership was also presented to the court. No evidence, apart from Husband’s own testimony, shows the transaction to be in bad faith. Accordingly, no abuse of discretion is evident.

IV.

Husband’s fourth allegation of error focuses on the award of maintenance. The District Court awarded Wife $200 per month for one year. Husband argues under Section 40-4-203, MCA (1985), the court may only grant maintenance if two conditions are present: (1) the spouse seeking maintenance lacks sufficient property to provide for her needs; and (2) the spouse is unable to support herself through appropriate employment. Husband contends Wife’s mineral interest would provide her with sufficient funds. Yet as we have already discussed, the District Court found the mineral interests to be outside the marital estate.

In determining whether maintenance should be awarded Section 40-4-203(2), MCA (1985), requires the District Court look to a number of factors, including financial resources, marital standard of living, duration of marriage, and the ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance.

This Court will not substitute its judgment for that of the District Court. Instead, we must determine whether there is substantial evidence to support the findings and conclusions of the District Court. In re Marriage of Schenck (Mont. 1984), [213 Mont. 310,] 692 P.2d 6, 8, 41 St.Rep. 2137, 2139. We find several factors in the record which support the District Court’s award. Affidavits indicated Mrs. Syljuberget was spending virtually every penny to support herself and her child. These expenses do not include rent, an inevitable expense once the marital home is sold. Equity in the home is minimal. Further, Wife was not awarded significant property, only her personal property. Mr. Syljuberget, on the other hand, was awarded all income-producing property. Given the facts as they are presented on the record, we ourselves may find the maintenance award slight. However, under the statutory factors discussed above, the award is just. We find no abuse of discretion.

V.

Finally, Husband contests the District Court’s award of one-half her attorney’s fees. Husband claims he is without resources, even to pay his own attorneys.

Our standard of review on the payment of attorney’s fees is whether the court abused its discretion. In re Marriage of Gallinger (Mont. 1986), [221 Mont. 463,] 719 P.2d 777, 783, 43 St.Rep. 976, 984. Under Section 40-4-110, MCA (1985), the trial court may order a party to pay the other party’s fees after considering their respective financial resources. As discussed above, and encompassed in the court’s findings, Wife is without funds to pay her attorney. Yet, the District Court found Husband to have sufficient resources.

Most supportive of the award is not the Husband’s financial resources as is his conduct throughout the dissolution proceedings. The record is replete with evidence indicating a majority of fees were due solely to Husband’s lack of cooperation. Indications include demands for discovery, contempt proceedings for failure to pay child support, and an injunction from entering the family home. The lower court’s discretion will not be disturbed if substantial evidence is found in the record to support the award. In re Marriage of Carr (1983), 205 Mont. 269, 667 P.2d 425. We find more than substantial evidence.

Affirmed on all issues.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HUNT, McDONOUGH and SHEEHY concur.


author: MR. JUSTICE HUNT

text:
    STUART W. SWENSON, Jacqueline J. Swenson, Jack Cox, Joyce Cox, John Reely, William E.S. Reely, and Delbert Ashmore, Plaintiffs and Appellants, v. JOHN RAMAGE, Robert J. Polish, and Libby Development, Inc., Defendants and Respondents.
    No. 88-238.
    Submitted on Briefs Aug. 18, 1988.
    Decided Sept. 27, 1988.
    Rehearing Denied Oct. 31, 1988.
    762 P.2d 851.
    Lawrence Sverdrup, Libby, for plaintiffs and appellants.
    Kenneth E. O’Brien, Kalispell, for defendants and respondents.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Plaintiffs, Stuart W. Swenson, Jacqueline J. Swenson, Jack Cox, Joyce Cox, John Reely, William E.S. Reely, and Delbert Ashmore, appeal the decision of the District Court of the Nineteenth Judicial District, Lincoln County, finding that the mortgage executed in favor of plaintiffs was a purchase money mortgage and therefore, by reasons of Section 71-1-232, MCA, denied plaintiffs the right to a deficiency judgment. We affirm.

The sole issue raised on appeal is whether the mortgage, which is the subject of this action, is a purchase money mortgage under Section 71-1-232, MCA, so as to deny plaintiffs a right to a deficiency judgment.

The essential transactions that lead to this dispute are that on April 30, 1985, plaintiffs sold to defendant, John Ramage, 2.812 acres located in Libby, Lincoln County for $150,000. Ramage paid $25,000 cash and executed a promissory note, due and payable on August 15, 1985, for the remaining $125,000. Ramage executed an accompanying trust indenture to secure the note. This trust indenture was not recorded, the reason being to assist Ramage in obtaining financing for the purpose of building a motel. Ramage was able to obtain financing and, as planned, built a motel. The note executed by Ramage was not paid on August 15, 1985 as agreed.

The 2.812 acres was surveyed and divided into two parcels during the fall of 1985. The purpose of the survey was to create Parcel “D,” containing 1.248 acres, so as to provide security for a construction mortgage, lien or trust indenture. The newly constructed motel is located on Parcel “D” and encumbering this parcel are two deeds of trusts, one in favor of Seattle First National Bank and the other in favor of United Bank.

On December 31, 1985, Ramage conveyed the entire 2.812 acres of land to Libby Development, a Montana general partnership, consisting of John Ramage, Lois Ramage, Robert J. Polish, David A. Ramage, Kevin C. Ramage and Mark H. Jennings. This partnership then conveyed the 2.812 acres to Libby Development, Inc., a Montana corporation. On the same day, December 31, 1985, Ramage and Robert J. Polish, president and secretary/treasurer respectively for the Libby Development, Inc., executed a promissory note for $35,000 in favor of plaintiffs and secured by a mortgage on the unimproved 1.564 acres. Defendants failed to pay the principal and interest due on this note. Plaintiffs filed a complaint on April 17, 1987 and on June 1, 1987 the District Court ordered the mortgage foreclosed and the property sold, according to law, with the proceeds going to plaintiffs for the amount due them by defendants. The District Court also ordered a hearing, if necessary, for the purpose of establishing the amount of a deficiency judgment, if any, against defendants.

On July 7, 1987, the property was sold by the Sheriff of Lincoln County to the plaintiffs, as the highest bidders, for $18,286.73. A deficiency of $18,950.28 remained. Plaintiffs therefore filed the deficiency amount with the Clerk of Court of Lincoln County and had the Clerk issue a writ of execution. Plaintiffs then executed upon personal property belonging to John Ramage. Defendants moved to set aside the default judgment and entry of default and also moved to quash the writ of execution. The District Court granted defendants’ motions and ordered that any and all execution sales occurring in this action were null and void and that any sums received from such void sales be returned to the purchaser or purchasers.

The Libby Development, Inc. deposited funds in a trust account to satisfy the deficiency judgment, but reserved the right to raise the issue of whether the mortgage was a purchase money mortgage within the meaning of Section 71-1-232, MCA, so as to preclude plaintiffs from a deficiency judgment. The District Court, after holding a hearing, found that “[t]he $35,000 due the plaintiffs is, without question, a balance due on the original purchase price. The mortgage was to secure that payment and was not given for any new indebtedness and therefore is a ‘Purchase Money Mortgage.’ ”

Plaintiffs argue that they were entitled to a deficiency judgment because the mortgage executed on December 31, 1985 in favor of plaintiffs was not a purchase money mortgage. Plaintiffs first rely upon Pulse v. North American Land Title Co. (Mont. 1985), [218 Mont. 275,] 707 P.2d 1105, 42 St. Rep. 1578, for a definition of a purchase money mortgage. In Pulse we defined purchase money mortgage as “a mortgage on land executed to secure the purchase money by a purchaser of the land contemporaneously with the acquisition of the legal title thereto or afterward, but as a part of the same transaction.” Pulse, 707 P.2d at 1107-08, 42 St. Rep. at 1580.

Plaintiffs then argue that the December 31, 1985 mortgage is not a purchase money mortgage primarily because (1) the trust indenture, due August 15, 1985, which originally secured the purchase price of the land covered 2.812 acres and the mortgage executed December 31,1985 covered only 1.564 acres of the original 2.812 acres; (2) John Ramage executed the original trust indenture and the December 31, 1985 mortgage was executed by Libby Development, Inc., a Montana corporation with John Ramage as president and Robert Polish as secretary/treasurer; and (3) the December 31, 1985 mortgage was executed eight months after the conveyance of the land. In summary, plaintiffs argue that the December 31, 1985 mortgage did not cover the exact tract of land as that which was originally purchased, it was not given with or near the time of the conveyance, and it was not given by the original vendee, and therefore it was not a purchase money mortgage.

Plaintiffs properly cite Pulse for a definition of a purchase money mortgage, but then apparently urges this Court to adopt a narrow construction of the definition, in which the only time a purchase money mortgage would exist is when all transactions regarding the purchase of the land occur simultaneously. We decline to accept such a narrow definition of a purchase money mortgage.

In Pulse we stated that a purchase money mortgage is a mortgage on land which secures the money yet owed on the land by the purchaser of the land. Part of the same transaction must include the purchaser acquiring legal title to the land, either simultaneously or afterwards. Pulse, 707 P.2d at 1107-08, 42 St. Rep. at 1580. The definition in Pulse does not limit the existence of a purchase money mortgage to those instances when all transactions comprising the execution of a purchase money mortgage occur simultaneously, and we do not so limit it now. The essence of a purchase money mortgage is to provide security for the payment of a tract of land. In the present case, the District Court found that “[t]he $35,000 due the plaintiffs is, without question, a balance due on the original purchase price. The mortgage was to secure that payment and was not given for any new indebtedness . . . .” No evidence is offered by plaintiffs to refute this finding by the District Court. Plaintiffs’ offering of evidence that the mortgage was executed eight months after the land was conveyed and that the mortgagors and the number of acres being mortgaged differs in the December 31, 1985 mortgage than at the time the land was conveyed does not establish that the December 31, 1985 mortgage was executed to secure any new indebtedness incurred by defendants. Instead, the evidence supports the court’s finding that the mortgage was executed to secure payment for 2.812 acres originally purchased by John Ramage and therefore it was a purchase money mortgage.

Plaintiffs also attempt to argue that in light of the nature of the transactions (construction of the motel), and the mortgages and liens filed, the parties’ intent was that this mortgage would not be given the type of priority granted under Section 71-3-114, MCA. Section 71-3-114, MCA, establishes a priority for purchase money mortgages “over all other liens created against the purchaser . . . .” We fail to see the applicability of Section 71-3-114, MCA, in this case and plaintiffs’ argument that the above transactions, in light of this statute, would indicate the parties’ intent.

We affirm the District Court’s finding that the mortgage, which is the subject of this action, is a purchase money mortgage. Section 71-1-232, MCA, provides:

“Upon the foreclosure of any mortgage, executed to any vendor of real estate or to his heirs, executors, administrators, or assigns, for the balance of the purchase price of such real property, the mortgagee shall not be entitled to a deficiency judgment on account of such mortgage or note or obligation secured by the same.”

Therefore, in light of Section 71-1-232, MCA, and our holding in this case, we affirm the District Court’s decision denying plaintiffs the right to a deficiency judgment.

Affirmed.

MR. JUSTICES HARRISON, GULBRANDSON, WEBER and SHEEHY concur.