No. 92-087
IN THE SUPREME COURT OF THE STATE OF MONTANA
1993
IN RE THE MARRIAGE OF
,- a
NORMAN JOSEPH ROCK,
Petitioner and Respondent,
and
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable Jack L. Green, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Dennis E. Lind, Datsoupoulos, MacDonald
& Lind, Missoula, Montana
For Respondent:
Raymond P. Tipp, Tipp, Frizzell & Buley,
Missoula, Montana
Submitted on Briefs: January 21, 1993
Decided: A p r i l 5, 1 9 9 3
Filed:
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Appellant Sharon D. Rock appeals from the findings of fact,
conclusions of law, and decree of dissolution entered by the
District Court of the Fourth Judicial District, Missoula County.
At issue is the District Court's determination that a promissory
note from respondent Norman Joseph Rock (Joe) to Sharon is null and
unenforceable. Sharon also appeals from the District Court's
division of the marital estate. We reverse.
We phrase the issues to be considered as follows:
1. Did the District Court err in determining that the
promissory note was a nullity?
2. Was the District Court's division of the marital estate
clearly erroneous?
The parties were married on December 26, 1980, in Missoula.
No children were born during the marriage. Joe and Sharon had both
been married previously. At the date of dissolution Joe was 62
years old and Sharon was 50 years old.
I.
Did the District Court err in determining that the promissory
note was a nullity?
Upon reviewing a lower court's conclusions of law this Court
will simply determine whether the lower court's interpretation of
the law was correct. We are not bound by the trial court's
conclusion and remain free to reach our own. Schaub v. Vita Rich
Dairy (1989), 236 Mont. 389, 391, 770 P.2d 522, 523.
~t issue is a promissory note for $59,000 from Joe to Sharon
acknowledging that he owed her for the loan she obtained for him
from the Ronan State Bank. The loan from the bank was secured by
Sharon's home. The purpose of the loan was to refinance existing
debts, such as a loan at the McKenzie Bank in North Dakota, and the
lien on Joe's tractor and trailer at the Lewiston, Idaho bank.
According to Joe's statements in the District Court transcript,
both of these debts were his. Martin Olsson, loan officer at Ronan
State Bank, stated that the bank had several previous loans of
Joe's that were outstanding. These loans were for Joe's trucking
company. The bank declined to give Joe another loan because of
poor prior payment performance and inadequate collateral. Olsson
stated that the use of Sharon's house as collateral was the primary
reason for the bank approving the $59,000 loan.
Joe admitted in court that he signed the promissory note to
Sharon upon her request. He acknowledged that both Sharon and he
were responsible for the bank loan.
Joe now claims that the promissory note between Sharon and him
is unenforceable as a negotiable instrument. He argues that it was
signed in blank with no attached exhibit, and therefore, was
incomplete, that there was no "sum certain," and that there was no
consideration. We hold the lower court's interpretation of the law
as to the validity of the promissory note was incorrect. Even
though the note is not a valid negotiable instrument, it should be
enforced by implying a contract at law to prevent Joe from being
"unjustly enriched" as a result of his use of the $59,000 loan and
3
subsequent refusal to acknowledge the debt. Ragland v. Sheehan
(Mont. 1993), 50 St. Rep. 83.
Joe would not have had access to the $59,000 loan if Sharon
had not pledged her house as collateral. Sharon would not have
done so without the understanding that Joe would continue to be
obligated to the bank for the loan.
Joe claims that when he signed the promissory note he did not
intend to consent to any obligation, but lack of consent is
irrelevant to an implied contract: "An implied contract does not
arise from the consent of the parties--it springs from the
principle of natural justice and equity, based on the doctrine of
unjust enrichment. Rasland, 50 St. Rep. 83 (citing St. James
Community Hospital v. Dept. of Social and Rehabilitation Services
(1979), 182 Mont. 80, 595 P.2d 379).
We hold that the promissory note at issue is enforceable as an
implied contract at law. The District Court erred in determining
that the promissory note was a nullity.
We reverse on this issue.
11.
Was the District Court's division of the marital estate
clearly erroneous?
In the past, district court decisions concerning the division
of the marital estate have been reviewed by this Court under an
abuse of discretion standard. This Court's standard of review in
these cases has been recently clarified. The factual findings of
the district court relating to the division of marital property
will be reviewed using the clearly erroneous standard. In re
Marriage of Sacry (1992), 253 Mont. 378, 833 P.2d 1035; Rule 52(a),
M.R.Civ.P. Concerning this Court's review of conclusions of law
made by a lower court "[wle are not bound by the lower court's
conclusions and remain free to reach our own." Schaub, 770 P.2d at
523.
The courts are obligated to fashion a distribution which is
equitable to each party under the circumstances. In re Marriage of
Jones (1987), 229 Mont. 128, 745 P.2d 350; 5 40-4-202, MCA.
Working in equity, the courts must seek a fair distribution of the
marital property using reasonable judgment and relying on common
sense. Reaching this equitable distribution will at times require
the court to engage in discretionary action which cannot be
accurately categorized as either a finding of fact or a conclusion
of law. These discretionary judgments made by the trial court are
presumed to be correct and will not be disturbed on appeal absent
an abuse of discretion by the lower court. Meridian Minerals Co.
v. Nicor Minerals, Inc. (1987), 228 Mont. 274, 742 P.2d 456.
Sharon's main contention on appeal is that the District Court
was clearly erroneous in finding that her home was a marital asset
which should be sold with the balance of the proceeds to be divided
equally with Joe. Sharon contends that it was inequitable to award
Joe one-half the balance of the proceeds from the sale when she
owned the home free and clear early in the marriage. We agree.
Section 40-4-202, MCA, provides that a district court shall:
[Elquitably apportion between the parties the property
and assets belonging to either or both, however and
whenever acquired and whether the title thereto is in the
name of the husband or wife or both.
While the home may be considered part of the marital estate,
the District Court's equal division of the home in this instance is
inequitable. Section 40-4-202, MCA, requires equity, not equality.
In re Marriage of Fitzmorris (1987), 229 Mont. 96, 745 P.2d 353.
This equitable division of property must take into consideration
the financial condition of each party at the time of marriage. In
re Marriage of Summerfelt (1984), 212 Mont. 332, 688 P.2d 8. This
Court recently stated that it was error for a district court to
fail to credit a spouse with the value of a marital asset brought
into the marriage. The District Court found that Sharon had
$23,000 in equity in the home and had purchased her former
husband's one-half interest in the home for $23,000. Joe did not
contribute in any way to the value of the home at the time of the
marriage.
Joe may be entitled to a portion of the appreciation in value
of the home pursuant to § 40-4-202, MCA, provided that his
contributions during the marriage contributed to the appreciation
in value of the home.
The testimony at trial was that Joe contributed $99,000 over
a six-year period to the maintenance of the household. On appeal
Joe refers to this $99,000 as "extra money" he gave to Sharon
Isbeyond the family's expenses and repairs . . . . However, a
careful review of the record indicates that this was Joe's total
financial contribution during the time period and was not in
addition to other funds contributed to maintain the household.
Upon remand, the District Court shall consider the
contributions of both parties to the maintenance and improvement of
the home. The court shall consider to what extent this maintenance
and any improvements may have contributed to the appreciation of
value of the home.
The District Court also found that the failure to make
payments on the mortgage debt caused a dissipation of the marital
asset in the amount of $10,606. The loan obligation at the Ronan
State Bank was a joint obligation, and any amount of dissipation of
the marital asset must be attributed equally to both parties.
Many of the findings of fact in this matter are contradictory,
are not supported by the evidence, and are not relevant to issues
of this case. We will not address those.
Reversed and remanded to the District Court for further
proceedings consistent with this opinion.
We concur: