Gammon v. Gammon

No. 83-417
IN THE SUPRE1.E COURT OF T-HI3 STATE OF f.IONTANA

1984

BETTY JEAN GAMMON,
Plaintiff and Respondent,
-vs-

EDWARD LUCIUS G N U I O N
Defendant,
-vs-
CHRISTIANA, INC., a Penn. Corp.,
Intervenor and Appellant.

APPEAL FROM: District Court of the Fifth Judicial District,
In and for the County of Jefferson,
The Honorable Frank Davis, Judge presiding.

COUNSEL OF RECORD:
For Appellant:
Lerner & Snyder; Alan J. Lerner?acgued, Big Fork,
!lantana

For Respondent :
John L. Peterson argued, Butte, Montana

Submitted: April 17, 1984
Decided: June 19, 1984

Filed: JUN ! ;
! ;yuq
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
Proposed intervenor Christiana, Inc. (Christiana)
appeals from the judgment entered by the Fifth Judicial
District Court, Jefferson County, enforcing the provisions of
an Oregon divorce decree awarding Betty Jean Gammon (wife)
title to Montana real property and denying Christians's
motion to intervene. We reverse and. remand for further
proceedings.
The issues are:
1. Whether the District Court erred in not allowing
Christiana to intervene in this action as a matter of right
under Rule 24 (a) ( 2 ) , M.R.Civ.P.?
2. Whether the Oregon divorce decree granting wife
title to Montana. real property is enforceable in the courts
of this state?
On November 9, 1982, the Oregon Circuit Court, Yamhill
County, entered a Judgment of Dissolution of Marriage in
favor of wife. That judgment was recorded in the Oregon
court system on November 22, 1983. As part of the judgment,
the Oregon court stated:
"The petitioner [wife] is awarded the following
real property:

"C. All real property and mining leases and claims
in the State of Montana to be awarded freely and
clear of all right, title and interest of the
respondent, . . .
more specifically described in
attached Exhibits B-1 through B-9, which by this
reference are incorporated herein, valued at
$150,000."
The exhibits attached to the Oregon decree set forth complete
legal descriptions of the properties.
This award was incorporated into the Oregon court's
conclusions of law and was affirmed in the court's decree.
Wife filed an exemplified copy of the Oregon divorce decree
in both Jefferson and Madison Counties, Montana.
After filing of the Oregon decree in Montana, but before
filing of this action, Edward Lucius Gammon (husband)
purportedly conveyed title to the Montana real property by
quitclaim deed and assignment to Christiana. Before this
action was filed, the assignment and quitclaim deed to
Christiana were recorded in both Jefferson and Madison
Counties, where the real properties and mining claims are
located.
The president and sole shareholder of Christiana is
Joseph Lakowski, a Pennsylvania attorney. At the hearing on
the motion to intervene, Lakowski testified that Christiana
was formed in November, 1982. Although husband is not a
shareholder of Christiana, he is Lakowski's client. Husband
and Lakowski knew of and discussed the legal effect of the
Oregon divorce decree. Although husband had offered to buy
wife's interest in the Montana property for $200,000,
Christiana purchased the Montana real properties from husband
for $10,000, $5,000 of which was paid in cash, $2,000 of
which was paid by check, and $3,000 of which is owing but
unpaid. At the time of this purchase, Christiana, through
Lakowski, was aware of the Oregon decree and that it had been
filed in Jefferson and Madison Counties. Lakowski stated
three reasons for Christiana's purchase of the property.
First, husband indicated he needed the money. Second, in the
opinion of Christiana's legal advisors, the Oregon decree was
void in Montana with respect to title to the real property.
Third, Christiana felt it had a very good buy for the
consideration.
 Wife brought this action on March 18, 1983, seeking to
enforce the Oregon divorce decree pursuant to section
26-3-203, MCA, which provides:
"The effect of a judicial record of a sister state
is the same in this state as in the state where it
was made, except that it can only be enforced here
by an action or special proceeding . . ."
Wife was unsuccessful in her attempts to personally serve
husband and so served husband by publication, pursuant to
Rule 4, P4.R.Civ.P. A default judgment was subsequently
entered against husband. Christiana moved to intervene in
the action pursuant to Rule 24 (a)(2), M.R.Civ.P.
A hearing on the motion to intervene was held on June 7,

1983. At the hearing, the court heard testimony from
Lakowski regarding husband's conveyance of the property to
Christiana a.nd received in evidence the quitclaim deed and
assignment. The court also heard testimony from Terrance
Hall, wife's attorney in the Oregon divorce proceedings,
concerning the effect of the Oregon decree under Oregon law.
Hall testified that although some decrees issued in Oregon
include a proviso ordering a party to convey property or put
documents on record, such a proviso is not necessary under
the Oregon statute to transfer title immediately. The court
also heard testimony from wife.
Christiana asked in its complaint in intervention that
the court declare wife to have no right, title or interest in
the real property transferred by husband to Christiana.
Christiana asked the District Court to recognize that the
Oregon decree could not affect husband's title to the Montana
real property and that husband's ownership had been
transferred to Christiana. Wife requested that the court
grant the Oregon decree full faith and credit and transfer
title to the Montana property to wife.
 On June 8, 1983, the court entered its findings,
conclusions, order and judgment. The court found that the
Oregon court had personal jurisdiction over both husband and
wife and that the judgment awarded to wife title to certain
Monta.na real property owned by the parties in common. The
court took judicial notice of section 107.105, Oregon Revised
Statutes, which provides that upon the filing of a decree in
a dissolution matter, the property division ordered "shall be
deemed effective for all purposes" and further provides that
a transfer by decree affects solely owned property as well as
that owned in common.
The court further found that consideration for the
conveyance to Christiana was at most nominal and that there
was substantial evidence to support a finding that the
purported transfer was solely for the purpose of avoiding the
effect of the Oregon judgment. The court specifically found
that Christiana was incorporated by Lakowski, who had
discussed with husband the effect of the Oregon judgment on
his Montana property. As a result, the District Court found
that husband still claims an interest in the Montana
property. The court pointed out that the Oregon judgment is
on appeal to the Oregon Court of Appeals and in that appeal
husband is contending that the Montana property should be
placed in trust for his children.
The District Court then concluded in pertinent part as
follows:
"2. That on February 24, 1983, Edward Lucius
Gammon had no interest in the Montana real property
assigned and conveyed by him to Christiana, Inc. ;
and, accordingly, Christiana, Inc., did not and
cannot bring itseLf under the intervenor right
provisions of Rule 24(a) (2), M.R.Civ.Pro., and thus
its Motion to intervene and file a Complaint in
this cause is denied without prejudice to its
rights to assert any claim or interest in the
Montana property in some other action, either in
this forum or elsewhere.
 "3. That the Judgment in Cause No. 38016 of the
Circuit Court of the State of Oregon is. . .
entitled to full faith and credit under the laws of
the Sta-teof Montana.
"4. It is further ordered that said Judgment be,
and it is hereby adopted as a Judgment of this
Court in haec verba as if fully set forth herein .
.. I
'

Christiana appeals from the findings, conclusions, order and
judgment of the District Court.

Christiana argues the District Court erred in not
allowing Christiana to intervene in this action as a matter
of right pursuant to Rule 24 (a)(2), t4.R.Civ.P. We agree.
Rule 24(a), M.R.Civ.P. states:
"Upon timely application anyone shall be permitted
to intervene in an action: (1) when a statute
confers an unconditional right to intervene; or (2)
when the applicant claims an interest relating to
the property or transaction which is the subject of
the action and he is so situated that the
disposition of the action may as a practical matter
impair or impede his ability to protect that
interest, unless the applicant's interest is
adequately represented by existing parties."
(emphasis added)
The apparent basis upon which the District Court refused
to allow intervention was that it concluded Christiana had no
interest in the property subject to the action. However,
Rule 24 (a)(2) requires only that the proposed intervenor
claim an interest in the property. Christiana made timely
application for intervention and claimed an interest relating
to the property by virtue of a quitclaim deed and assignment.
It is undisputed that Christiana is so situated that the
disposition of this action will as a practical matter impair
or impede its ability to protect its claimed interest.
Further, because husband did not appear to defend the action
and was defaulted, no party adequately represents
Christians's position. Christiana therefore met the
intervention requirements of Rule 24 (a)(2), M.R.Civ.P.
 We hold that the District Court erred in not allowing
Christiana to intervene in this action pursuant to Rule
24 (a)(2), M.R.Civ.P.
I1

Christiana argues the District Court erred in concluding
that the Oregon decree operated to divest husband of his
title to the Montana property and that the decree was
entitled to full faith and credit in the courts of this
state. Christiana argues that the Oregon court had no
extraterritorial jurisdiction over Montana real property. It
contends that the decree was void ab initio and is not
entitled to full faith and credit or enforcement as a matter
of comity. It therefore contends the Oregon decree had no
effect on husband's title and that title passed to Christiana
under the quitclaim deed and assignment executed by husband.
Wife argues that the courts of this state are required
to recognize foreign divorce decrees based upon the full
faith and credit clause of the United States Constitution and
the doctrine of comity. She argues that the Oregon decree
established the equities and rights between the parties and
is enforceable in Montana, even though the decree did not of
itself pass title. She argues it would have been useless to
order husband to convey title to her because he willfully
refused to appear in the action or otherwise comply with the
court's orders. Having sued for enforcement of the Oregon
decree in Montana, she argues she is entitled to enforcement
of the Oregon decree and a judgment awarding the Montana
property to her.
In Fall v. Eastin (1909), 215 U.S. 1, 30 S.Ct. 3, 54
L.Ed. 65, the United States Supreme Court established the
general rule that a court in one state has no
extraterritorial jurisdiction to affect title to real
property in another state. Thus, recognition of a divorce
decree provision which purported to transfer foreign real
property was not required by the full faith and credit clause
of the United States Constitution. In Fall, Mrs. Fall
obtained a divorce judgment in Washington, where she and her
husband lived.. As part of the decree, the Washington court
awarded Mrs. Fall land located in Nebraska. The judgment
ordered Mr. Fall to convey his interest in the Nebraska
property to Mrs. Fall, and when he failed to do so, the court
appointed a commissioner who executed a deed. After the
judgment, Mr. Fall deeded the land to his sister. Mrs. Fall
brought suit against Mr. Fall's grantee in Nebraska to quiet
title to the land, relying on the Washington judgment and
deed to establish her title. The Nebraska Supreme Court
reversed the trial court's judgment in favor of Mrs. Fall.
Fall v. Fall (Neb. 1907), 113 N.W. 175, 181. The court held
that the Washington court was without jurisdiction to affect
title to Nebraska property. The U.S. Supreme Court affirmed,
holding that the Nebraska court was not required under the
circumstances to give full faith and credit to the Washington
judgment. 215 U.S. at 14, 30 S.Ct. at 9, 54 L.Ed. at 71-72.
This Court has also recognized the principle that
foreign courts have no power to directly affect title to real
property located in Montana. Wilson v. Thelan (1940), 110
Mont. 305, 311, 100 P.2d 923, 926; In re Estate of Bruhns
(1920), 58 Mont. 526, 528-29, 193 P. 1115, 1116. Further,
this Court has recognized that a judgment of a foreign court
void for lack of jurisdiction is not entitled to full faith
and credit in the courts of this state. Corkill v. Cloninger
(1969), 153 Mont. 142, 146, 454 P.2d 911, 913.
Insofar as the Oregon court attempted to directly
transfer husband's Montana real property to wife, its act was
not effective in this state. Insofar as the District Court
gave effect to the Oregon decree as a direct and
self-executing transfer of title to Montana real property, it
was in error and that aspect of the District Court's judgment
is reversed.
Christiana argues that the Oregon court's attempt to
directly transfer title to Montana real property renders the
decree an absolute nullity. It argues that the decree is
ineffective even to establish the equities between the
parties and as such is entirely unenforceable in this state.
We conclude that Christiana's reading of the decree is
unreasonably restrictive. The Oregon court, having
jurisdiction of the parties and the subject matter, was
empowered to determine the equities between the parties with
respect to marital property. Reading the decree as a whole,
we find that the Oregon court intended to establish an
equitable property division based upon the evidence. The
record before the court included evidence relating to the
nature and value of the parties' assets, the financial
conditions of the parties, the needs of the parties and other
relevant matters. Based upon this evidence, the court
equitably divided all real and personal property and awarded
specific assets to the respective parties. Insofar as the
court attempted to directly transfer title to Montana real
property, its attempt was void for want of jurisdiction.
However, the decree accomplished more than a mere outright
award of specific assets; clearly, the decree also determined
on the merits the equities between the parties,
notwithstanding the specific wording of the decree. The
decree established wife's right to the Montana property as
against husband. We therefore reject Christiana's argument
that the Oregon decree is entirely void and unenforceable.
 A determination of a court of a foreign jurisdiction of
the equities between the parties in a divorce action is not
subject to collateral attack in the courts of this state
unless void on its face. Corkill, 153 Mont. at 150-51, 454
P.2d at 915. The Oregon c ~ u r thad jurisdiction to determine
the equities between the parties and did so. This aspect of
the Oregon decree is valid and entitled to full faith and
credit in our courts.
The decision in - -v. Eastin does not preclude this
Fall
result. Fall held only that an attempt to directly transfer
title to real property in a foreign jurisdiction was
ineffective and not entitled to full faith and credit. The
court recognized that a foreign decree could render
conclusive judgment on the merits of the claim or subject
matter of the suit. 215 U.S. at 12, 30 S.Ct. at 8, 54 L.Ed.
at 71. As noted by Justice Holmes in his concurring opinion,
the Nebraska court had carefully avoided saying that the
decree would not be binding between the original parties.
215 U.S. at 15, 30 S.Ct. at 9, 54 L.Ed. at 72. However, to
give such a determination the force of a judgment in the
state where the real property is located, it must be made a
judgment there, 215 U.S. at 12, 30 S.Ct. at 8, 54 L.Ed. at
71, as wife here seeks to do.
Fall does not require, as Christiana suggests, that this
Court refuse to recognize any aspect of the Oregon decree. As
wife argues, the holding in Fall is not broad enough to
resolve this case. Significantly, in Fall, Mrs. Fall had
brought a quiet title action against a third-party grantee.
She had not sued in the state where the property wa.s located
to enforce the foreign judgment, but relied in a quiet title
action upon the foreign decree and deed as alone sufficient
to establish her title. Fall is distinguishable from this
case, where wife has sued in Montana to enforce the foreign
judgment as against husband. Whether husband validly
divested himself of the property prior to wife's enforcement
action, so as to preclude a Montana judgment granting her
title, is a separate issue to he addressed on remand. The
Oregon decree's determination of the equities between the
parties is entitled to full faith and credit in the courts of
this state.
The Oregon decree is also enforceable in this state
based upon the doctrine of comity:
". . . [A]n equally compelling reason for refusing
. . . the right to collaterally attack the divorce
decree of the Nevada court is the decent regard and
respect we owe to the judgments of the courts of
sister states. Even though the full faith and
credit clause of the Federal Constitution does not
prohibit a collateral attack on the Nevada decree,
the rules of comity prevent such an attack.

"Unless the public policy of the state would
prevent the recognition of the decree or such
recognition would be injurious to the best
interests of the state we must recognize the force
and effect of the decrees of our sister states and
enforce them in the same manner that they enforce
the decrees of courts of our state." In Re
Anderson's Estate (1948), 121 Mont. 515, 524-25,
194 P.2d 621, 625-26.
In Kane v. Kane (Mont. 1982) 646 P.2d 505, 39 St.Rep. 1036,
this Court affirmed the trial court's decision declining to
exercise jurisdiction in a dispute arising out of a Wyoming
divorce decree. This Court found that although the full
faith and credit clause did not prohibit the Montana court
from exercising jurisdiction, the trial court properly
declined to exercise jurisdiction as a matter of comity,
which was characterized as a voluntary recognition of the
proceedings of a sister state. 646 P.2d at 507, 39 St.Rep.
at 1038. By invoking the doctrine of comity, this Court
recognized the prerogative of the Wyoming court to

conclusively determine the equities between the parties.

C h r i s t i a n a c o n t e n d s t h a t t h e c a s e o f Mieyr v . Federal

S u r e t y Company ( 1 9 3 4 ) , 97 Mont. 503, 34 P.2d 982, s t a n d s f o r

t h e p r o p o s i t i o n t h a t t h i s Court w i l l n o t e n f o r c e t h e judgment

of a s i s t e r s t a t e under t h e d o c t r i n e o f comity u n l e s s t h a t

state would enforce a Montana decree under the same

circumstances. Christiana further argues that the Oregon

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

and t h e r e f o r e t h i s Court s h o u l d d e c l i n e t o e n f o r c e t h e Oregon

decree.

However, Mieyr d o e s n o t s u p p o r t C h r i s t h n a ' s argument.

I n Mieyr, a r e c e i v e r was a p p o i n t e d by a n Iowa c o u r t f o r a

d e f u n c t c o r p o r a t i o n which had p r o p e r t y i n Montana. A Montana

creditor of the c o r p o r a t i o n o b t a i n e d i n a Montana court a

judgment and w r i t o f e x e c u t i o n and l e v i e d upon t h e a s s e t s of

the corporation. Later, the Iowa receiver appeared in

Montana c l a i m i n g t h a t h i s i n t e r e s t i n t h e Montana p r o p e r t y

should prevail over the interest of the local judgment

creditor. T h i s C o u r t r e j e c t e d t h e c l a i m o f t h e Iowa r e c e i v e r

because it apparently concluded that the Montana public

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

t h e p o l i c y o f comity. 97 Mont. a t 515-16, 34 P.2d a t 988.

Mieyr does not require reciprocity as a prerequisite to

enforcement o f a f o r e i g n d e c r e e based upon comity; it merely

r e q u i r e d t h e f o r e i g n r e c e i v e r t o compete on an e q u a l b a s i s

w i t h Montana c r e d i t o r s .

In any event, the cases cited by Christiana do not

d e m o n s t r a t e t h a t Oregon would r e f u s e t o r e c o g n i z e a s i m i l a r

d e c r e e e n t e r e d by the courts of Montana. I n Robinson v.

Scott (Or. 1916), 158 P. 268, the court held, i n a quiet

t i t l e a c t i o n between s u c c e s s o r s i n i n t e r e s t o f b o t h husband
and wife, that a foreign decree was insufficient in and of
itself to vest title to lands in Oregon. 158 P. at 270. In
Baird v. Baird (Or. 1920), 188 P. 699, the court held that
the Oregon trial court had no authority in a divorce action
to award title to Indiana real property. 188 P. a.t 700.

Neither Robinson nor Baird held that an Oregon court would
not as a matter of comity recognize the equities established
by a foreign divorce decree.
Finally, we find no public policy of the State of
Montana which precludes recognition of the equit2es
established by the Oregon decree. Christiana argues that to
give effect to the Oregon decree would allow the courts of
foreign jurisdictions to exercise - - jurisdiction over
in rem
Montana real property, in contravention of the public policy
of this Sta.te. However, because such a decree is ineffective
in itself to affect title, but rather depends for its
effectiveness upon obtaining an enforcement judgment in a
Montana court, recognition of the decree does not allow
foreign courts to exercise jurisdiction over Montana real
property. Moreover, the Oregon decree establishes only the
rights between the parties in that action; it does not
determine title - -
in rem. Because the effectiveness of the
foreign judgment in Montana depends upon enforcement by
Montana courts, Christians's argument in this regard is
without merit.
Further, the precise wording of the Oregon decree does
not prevent this Court from enforcing its equities as a
matter of comity.
We hold that the District Court erred in concluding that
the Oregon decree was in itself effective to transfer title
to Montana real property. However, we further hold that, in
an enforcement action in this state, the Oregon decree is an
enforceable determination of the rights and equities between
husband and wife with respect to the Montana real property in
question.
We reverse the judgment of the District Court and remand
far further proceedings consistent with this opinion,
including granting of Christians's motion to intervene,
further pleadings on the issue of title to the subject real
property, and further proceedings consistent with this
opinion as the District Court deems advisable.

We concur:
'%k.--~fi@
"
Chief ~ustice mq