No. 13364
IN THE SUPREME COURT OF THE STATE OF MONTANA
1977
WILLIAM R. MORSE,
Plaintiff and Appellant,
-vs-
BETTY J. MORSE,
Defendant and Respondent.
Appeal from: District Court of the Thirteenth Judicial
District,
Honorable M. James Sorte, Jud-qe presiding.
Counsel of Record.:
For Appellant:
Anderson, Symmes, Forbes, Peete and Brown, Billings,
Montana
Weymouth D. Symmes argued, Billings, Montana
For Respondent:
Hon. Michael Greely, Attorney General, Helena,
Montana
Allen B. Chronister, Assistant Attorney General,
appeared, Helena, Montana
Berger, Anderson, Sinclair and Murphy, Billings,
Montana
Arnold A. Berger argued, Billings, Montana
Submitted: January 25, 1977
Decided : Z\dQV 1 6 1377'
Filed:
NQV I E 1n
g
M r . J u s t i c e Daniel J . Shea d e l i v e r e d t h e Opinion of t h e Court:
The husband appeals from a judgment of t h e D i s t r i c t Court,
S t i l l w a t e r County, awarding c e r t a i n property t o the wife i n a
property d i s t r i b u t i o n decree following d i s s o l u t i o n of marriage.
The husband r a i s e s s e v e r a l i s s u e s r e l a t i n g t o t h e Uniform
Marriage and Divorce A c t and f u r t h e r claims t h e c o u r t f a i l e d t o
consider s e v e r a l f a c t o r s i n making i t s award of t h e m a r i t a l pro-
perty. One of t h e i s s u e s under t h e Uniform Marriage and Divorce
A c t i s h i s claim t h a t t h e c o u r t d i d n o t consider t h e w i f e ' s
inheritance a s a marital asset. Because t h e D i s t r i c t Court
was n o t s p e c i f i c i n i t s d i s p o s i t i o n of t h e i n h e r i t a n c e , we
a r e compelled t o reverse and remarid f o r a hearing on t h e d i s p o s i -
t i o n of t h e i n h e r i t a n c e . A s t o h i s remaining c o n t e n t i o n s , we
f i n d no e r r o r .
F i r s t , w e w i l l d i s c u s s t h e various o t h e r i s s u e s r a i s e d by
t h e husband, and d i s c u s s l a s t t h e i s s u e of t h e w i f e ' s $200,000
inheritance.
Both t h e husband and wife were granted a divorce by t h e
c o u r t on October 23, 1974. A t r i a l on property d i s p o s i t i o n
was h e l d December 9 and 10, 1975. The c o u r t issued f i n d i n g s of
f a c t , conclusions of law and order apportioning t h e m a r i t a l
property on January 19, 1976.
The husband contends t h e c o r r e c t law under which t h e c o u r t
divided t h e property was t h a t which e x i s t e d a t t h e time t h e t r i a l
was held on t h a t m a t t e r , and hence p r i o r t o t h e e f f e c t i v e d a t e
of t h e Uniform Marriage and Divorce Act i n Montana, January 1,
1976. However, s e c t i o n 48-341, R.C.M.1947, of t h a t Act, s t a t e s :
"(2) This a c t a p p l i e s t o a l l pending a c t i o n s
and proceedings commenced p r i o r t o i t s e f f e c t i v e
d a t e with r e s p e c t t o i s s u e s on which a judgment
has n o t been entered ***
"(4) I n any a c t i o n o r proceeding i n which an
appeal was pending o r a new t r i a l was ordered
p r i o r t o t h e e f f e c t i v e d a t e of t h i s a c t , t h e law
i n e f f e c t a t t h e time o f , t h e order s u s t a i n i n g
t h e appeal o r t h e new t r i a l governs t h e appeal,
t h e new t r i a l , and any subsequent t r i a l o r appeal."
Here, t h e t r i a l c o u r t d i d n o t e n t e r judgment on t h e property
d i v i s i o n u n t i l January 19, 1976, eighteen days a f t e r t h e e f f e c t i v e
d a t e of t h e Uniform Marriage and Divorce Act. Section 48-341(4)
of t h a t Act s p e c i f i e s t h e exclusive circumstances under which
an a c t i o n would f a l l under p r e - e x i s t i n g law--cases i n which a
judgment has a l r e a d y been entered o r a new t r i a l ordered. Sub-
s e c t i o n (4) p l a i n l y does not apply t o t h i s case a s a judgment
had n o t been entered when t h e Uniform Marriage and Divorce A c t
went i n t o e f f e c t . W might add, however, t h a t i n t h e a r e a of
e
property d i v i s i o n , t h e Uniform Marriage and Divorce Act provisions
a r e s i m i l a r t o case law predating t h a t Act. Biegalke v. Biegalke,
Mont . , 564 P.2d 987, 34 St.Rep. 401, 405 (1977).
Therefore t h e husband l o s t no s u b s t a n t i a l r i g h t s by coming under
t h e Uniform Marriage and Di.vorce Act.
The b a s i s f o r d i v i d i n g property upon d i s s o l u t i o n of marriage
i s set o u t i n s e c t i o n 48-321, R.C.M. 1947. I t provides i n
relevant p a r t t h a t the court:
"* * * without regard t o m a r i t a l misconduct, s h a l l
* * * f i n a l l y e q u i t a b l y apportion between t h e
p a r t i e s t h e property and a s s e t s belonging t o e i t h e r
o r both however and whenever acquired, and whether
t h e t i t l e t h e r e t o i s i n t h e name of t h e husband o r
wife o r both. ** *'' (Emphasis supplied.)
The s t a t u t e a l s o sets o u t f a c t o r s which t h e c o u r t must consider
i n t h e apportionment of t h e property, including:
"* **amount and sources of income ***
needs
of each of t h e p a r t i e s [and] whether t h e apportion-
ment i s i n l i e u of o r i n a d d i t i o n t o maintenance
** **It
Concerning property acquired by e i t h e r spouse before marriage
o r by g i f t , bequest, devise o r descent, t h e s t a t u t e provides
the court s h a l l :
'I* * * consider thos3contributions of t h e o t h e r
spouse t o t h e marriage *** t h e e x t e n t t o which
such c o n t r i b u t i o n s have f a c i l i t a t e d t h e maintenance
of t h i s property and whether o r n o t t h e property
d i s p o s i t i o n s e r v e s a s an a l t e r n a t i v e t o maintenance
arrangements. I I
The husband asks t h i s Court t o d i s r e g a r d t h e s p e c i f i c
language of t h e s t a t u t e p r o h i b i t i n g c o n s i d e r a t i o n of m a r i t a l
misconduct i n d i s t r i b u t i n g m a r i t a l property, The s t a t u t e ex-
p r e s s l y f o r b i d s a c o n s i d e r a t i o n of m a r i t a l misconduct i n appor-
tioning the marital estate. Since t h e i n t e n t i s c l e a r we take
t h e s t a t u t e a s we f i n d i t . I n the Matter of West Great F a l l s
Flood Control and Drainage D i s t r i c t , 159 Mont. 277, 287, 496
P.2d 1143 (1972). I t i s e q u a l l y c l e a r t h a t t h e husband would
f a r e no b e t t e r under t h e law p r e - e x i s t i n g t h e Uniform Marriage
and Divorce Act. Before t h a t Act, " f a u l t " was considered only
i n the context of a p a r t y ' s r i g h t t o alimony and could n o t be
t h e b a s i s f o r depriving e i t h e r p a r t y of property i n t e r e s t s upon
divorce. Johnson v. Johnson, 137 Mont, 11, 1 7 , 349 P.2d 310 (1960).
The husband a l s o contends t h a t t h e wife quitclaimed c e r t a i n
property t o him before t h e d i s s o l u t i o n of t h e marriage and
accordingly, t h e c o u r t should n o t consider t h a t property a s p a r t
of t h e m a r i t a l e s t a t e . He claims i t was t h e i n t e n t of t h e wife
t o d e l i v e r t h e property t o him and t h i s was manifested by t h e
execution, delivery, and filing of the deeds. However, section
48-321 provides that a district court may equitably divide pro-
perty "however and whenever acquired" and therefore the question
of title is not controlling. This was also the law before the
enactment of the Uniform Marriage and Divorce Act. LaPlant v.
LaPlant, Mont . , 551 P.2d 1014, 33 St.Rep. 580 (1976);
Downs v. Downs, Mont . , 551 P.2d 1025, 33 St.Rep. 576
(1976); Cook v. Cook, 159 Mont. 98, 102,103, 495 P.2d 591 (1972).
The husband contends the prospective assets and liabilities
of the parties should be considered in a property division. While
it is true that section 48-321 requires the court, among other
things, to consider "the opportunity of each for future acquisi-
tion of capital assets and income", here there was no sufficient
foundation established for the reasonable likelihood of acquiring
future assets. As to future debts or liabilities of the parties,
such evidence is normally too speculative, and in this case there
was no reliable evidence by which the court could determine future
liabilities. For the same reason, we cannot consider the possibility
the wife will receive an inheritance from her mother sometime
in the future.
Because of the ambiguity of the District Court's findings
on .thewife's inheritance of $200,000 before the dissolution of
the marriage, we are compelled to remand the cause for a hearing
and specific findings. It is clear under section 48-321,
"property and assets belonging to either or both however and
whenever acquiredl',that the $200,000 inheritance was properly
an asset of the marital estate at the time of dissolution. The
husband contends gnce the wife was awarded the entire $200,000
inheritance, that he should have received a corresponding benefit
from the remainder of the marital property.
I n h i s findings t h e t r i a l judge noted t h a t t h e wife d i d have
an i n h e r i t a n c e of $200,000. However, t h e judge f a i l e d t o dispose
of t h a t i n h e r i t a n c e i n any way which would c l e a r l y show h i s i n t e n t .
The order of d i s t r i b u t i o n l i s t e d c e r t a i n property awarded t o t h e
wife, and t h e remainder t o t h e husband. Since t h e wife was n o t
s p e c i f i c a l l y awarded t h e $200,000, i t could be argued t h e husband
was t o r e c e i v e t h e $200,000 i n h e r i t a n c e of t h e wife. But t h e r e i s
no evidence t h e husband asked f o r a l l o r any p o r t i o n of t h e w i f e ' s
inheritance. Neither i s t h e r e any i n d i c a t i o n from t h e evidence,
findings and conclusions t h a t t h e c o u r t intended t o award a l l o r
any p o r t i o n of t h e w i f e ' s i n h e r i t a n c e t o t h e husband. Moreover,
on appeal t o t h i s Court both p a r t i e s t r e a t t h e i n h e r i t a n c e a s having
been awarded t o t h e wife.
The confusion i n d i c a t e d by t h e record and t h e p o s i t i o n of t h e
p a r t i e s can only be resolved by a rehearing on t h e i s s u e of t h e
inheritance. W s t r e s s here t h a t , a s i n a l l decrees of property
e
d i s t r i b u t i o n , t h e r e i s no d e f i n i t e formula t h a t must be followed
and each c a s e must be t r e a t e d on an i n d i v i d u a l b a s i s . Biegalke v.
Biegalke , supra.
The wife contends t h e decree should be modified so t h a t
property awarded t o h e r can be taken from t h e husband's i n d i r e c t
control. This i s a matter f o r t h e D i s t r i c t Court t o consider upon
remand of t h i s c a s e , and i t need not be discussed here. The wife
a l s o contends t h e judgment should be s e t a s i d e because t h e record
d i d n o t d i s c l o s e t h e t r u e n e t worth of t h e husband. She d i d n o t
cross-appeal on t h i s i s s u e , b u t r a i s e d i t f o r t h e f i r s t time i n h e r
b r i e f on appeal. Accordingly, she i s precluded from r a i s i n g t h i s
i s s u e on appeal. Johnstone v. Svejkovsky, - ,
Mont -9 554 P.2d
1329, 33 St.Rep. 954 (1976); Spencer v. Robertson, 151Mont. 507,
511, 455 P.2d 48 (1968).
W vacate the judgment of the d i s t r i c t court and remand
e
it for further proceedings consistent with t h i s Opinion.
W Concur:
e
Justices.
M r . J u s t i c e John Conway Harrison concurring i n p a r t and d i s s e n t i n g
in part:
This Court i n Bdegalke v. Biegalke, -Mont. , 564 P. 2d
987, 34 St.Rep. 401 (1977), e s t a b l i s h e d i n Montana t h a t i n c a s e s ,
such a s t h e i n s t a n t one, t h e provisions of Chapter 3, T i t l e 48,
s e c t i o n s 48-301 through 48-341, R.C.M. 1947, Montana's Uniform
Marriage and Divorce Act, apply.
However, i n apportioning t h e property of t h e p a r t i e s h e r e ,
under t h e provisions of s e c t i o n 48-321, I d i s a g r e e with t h e
majority.
Here, under t h e f a c t s u n t i l 1964, when t h e wife moved t o
England, away from t h e m a r i t a l domicile, such a d i v i s i o n would,
i n m opinion, have been j u s t , f o r up t o t h a t time both e q u a l l y
y
c o n t r i b u t e d t o t h e a c q u i s i t i o n of t h e property. A s I view t h e
evidence, i t was t h e defendant wife who wanted t h e English exper-
i e n c e , and i t was t h e p l a i n t i f f husband who r e l u c t a n t l y went
along with h e r demands. I t was p l a i n t i f f husband who had t o
purchase t h e home i n England and maintain h i s family t h e r e . From
1964 t o 1972, with t h e exception of q u a r t e r l y v i s i t s , and because
of t h e w i f e ' s i n s i s t e n c e on l i v i n g i n England, p l a i n t i f f ' s
c h i l d r e n grew up without h i s c l o s e supervision and guidance
and he was denied t h e joy and s a t i s f a c t i o n of seeing t h e i r d a i l y
development f o r some e i g h t y e a r s . Under t h e s e f a c t s one would
assume t h e c h i l d r e n would be i n support of t h e i r mother, b u t h e r e ,
because of h e r conduct, she has l o s t t h e support of a l l f i v e
children. They have returned from England t o t h e family home i n
Absarokee and support t h e i r f a t h e r ' s p o s i t i o n i n t h e s e proceedings.
He has become both f a t h e r and mother t o them and i t i s t o him
they have looked t o f o r f i s c a l and emotional support t h e s e l a s t
s i x years. Even under t h e f i n d i n g s of t h e t r i a l c o u r t , it was
found t h a t a f t e r moving t o England t h e wife contributed l i t t l e
o r nothing t o p l a i n t i f f f a t h e r ' s earning capacity.
During t h e marriage t h e p a r t i e s accumulated t h e following
property :
1. Family dwelling i n Absarokee, with garage
(average appraised value)
2. Law o f f i c e b u i l d i n g
3. Morse apartments
4. Rumaino acreage
5. Airplane and hanger
6. Contract proceeds ( t o t a l )
7. Morse-Edmonds-Henrickson c o n t r a c t
8. Pickup and v e h i c l e s (agreed value)
9. Home f u r n i t u r e ( p l a i n t i f f ' s e s t i m a t e )
10. Notes and mortgages receivable
11. Value due on lumber
12. Accounts receivable (excluding those with
doubtful c o l l e c t i o n p o s s i b i l i t i e s )
13. Insurance (cash surrender value)
14. Savings Account - Livingston, Montana
15. Checking Account
16. Bank account - Red Lodge
17. Morse Apartments Account
18. Bonds (including $2,500 belonging t o
wife a t time of marriage)
19. Library and equipment - law o f f i c e
20. Morse Apartments - furniture, fixtures
21. P l a i n t i f f ' s apartment f u r n i t u r e
22. Wife's i n h e r i t a n c e from f a t h e r , L.B. Kratz
The l i a b i l i t i e s of t h e p a r t i e s c o n s i s t primarily of outstanding
mortgages:
1. Federal Land Bank Mortgage $25,207
2. U.S. Bank, Red Lodge 37,195
3. Estimated back t a x l i a b i l i t y - IRS (1971-1975) 54,000.
I n June 1972, defendant returned t o Montana and took up
residence with h e r parents. The divorce proceedings commenced
shortly thereafter. Within two y e a r s , b u t p r i o r t o t h e divorce,
her f a t h e r died leaving h e r approximately $200,000 and i n a d d i t i o n
she received $9,740 a s e x e c u t r i x of t h e e s t a t e . She occupies t h e
family home and has f u l l use of two family automobiles. While
s p e c u l a t i v e i n amount, she w i l l i n h e r i t a s u b s t a n t i a l e s t a t e from
her mother who i s 82 years o l d .
I n s p i t e of t h e above f a c t s , t h e t r i a l c o u r t made t h i s
d i s t r i b u t i o n of property:
"A. TO THE DEFENDANT:
(1) Family dwelling .... together with the attached
shed o r .garage ...
(2) A l l f u r n i t u r e and personal property located i n t h e
family home o t h e r than t h a t , claimed by t h e t h i r d
p a r t y i n t e r v e n o r , and p l a i n t i f f ' s business records.
(3) The Morse Apartments ...
(4) The f u r n i t u r e and f i x t u r e s i n t h e Morse Apartments.
(5) A l l of t h e money's payable and a l l r i g h t , t i t l e and
i n t e r e s t of t h e p l a i n t i f f i n and t o the property
described a s t h e Morse-Edmonds-Hendrickson Contract,
t h e sum being $15,360.83, o r , i n the a l t e r n a t i v e , a
cash payment of $15,360.83.
(6) One h a l f of t h e United S t a t e s Savings Bonds ( i f and
when found).
"B. TO THE PLAINTIFF:
(1) A l l of t h e property of t h e p a r t i e s not awarded t o
defendant a s evidenced from t h e e x h i b i t s and t h e
testimony and brought o u t during t h e course of t h e
trial.
(2) The P l a i n t i f f s h a l l pay a l l outstanding indebtedness
on t h e mortgages t h a t secure a loan on any property
t h a t was awarded t o t h e defendant herein."
Considering t h e f a c t s of t h e i n s t a n t c a s e , such a d i s t r i b u -
t i o n of property i s , i n m opinion, an i n e q u i t a b l e d i s t r i b u t i o n
y
t o t h e wife. N mention i s made by t h e t r i a l c o u r t of t h e $200,000
o
plus i n h e r i t a n c e i n t h e c o u r t ' s d i s p o s i t i o n formula contained i n
i t s conclusion of law. T o t a l i n g t h e values of t h e p r o p e r t i e s taken
by t h e r e s p e c t i v e p a r t i e s i n such c a s e , would y i e l d t h i s r e s u l t :
TO THE HUSBAND
$173,482 ( t o t a l value)
less 62,400 (Outstanding mortgage l i a b i l i t i e s )
111,082
less 24;000 (conservative estimate of predivorce t a x l i a b i l i t y )
$ 87,082.
The husband received no house o r l i v i n g arrangements o t h e r than
t h e a b i l i t y t o r e n t an apartment owned by t h e wife by v i r t u e of
t h e decree. He i s , a s i s apparent, responsible f o r a l l of t h e
l i a b i l i t i e s of t h e marriage, a f a c t o r t o be considered under t h e
express language of s e c t i o n 48-321.
TO THE WIFE
$81,621
p l u s 200,000 ( i n h e r i t a n c e funds)
plus 9,700 ( e x e c u t r i x f e e )
$291,321
I n a d d i t i o n , t h e wife received t h e family home, which she now
r e n t s t o o t h e r s , d e s p i t e t h e c o u r t having found a s a f a c t t h a t
she i s e n t i t l e d t o t h e use and occupancy of t h e Kratz home.
Section 48-321 i s a s t a t u t e of broad a p p l i c a b i l i t y . It
speaks of c o n s i d e r a t i o n of " a l l property however and whenever
acquired" and expressly r e f e r s t o i n h e r i t a n c e s . Other f a c t o r s
t o be balanced, which would f i n d a p p l i c a b i l i t y i n t h i s c a s e a r e :
amount and sources of income, needs of t h e p a r t i e s , and oppor-
t u n i t i e s f o r f u t u r e a c q u i s i t i o n s of c a p i t a l .
Other c o u r t s have held t h a t , due t o a . s h o r t term marriage
o r o t h e r l i k e circumstances, a spouse seeking apportionment
of a l a r g e sum e i t h e r brought i n t o t h e marriage o r acquired e a r l y
i n t h e marriage by t h e o t h e r spouse, whether by i n h e r i t a n c e o r
otherwise, does n o t have the same " i n t e r e s t 1 ' i n t h e sum a s i n
cases where t h e marriage i s of long d u r a t i o n . Here, t h e marriage
l a s t e d approximately 29 years. To deny t h e husband a s h a r e of
t h e w i f e ' s i n h e r i t a n c e would stand on t h e same footing a s denying
t h e wife a share of a l a r g e sum i n w i n d f a l l p r o f i t s from t h e
husband's business o r investments acquired j u s t p r i o r t o t h e
divorce.
- I1 -
To consider i n h e r i t a n c e s per s e a s being beyond t h e
language o r i n t e n t of s e c t i o n 48-321, would b e , i n a sense,
t o cause Montana t o become a de f a c t o community property s t a t e
i n t h i s regard. I n m opinion, t h i s i s n o t t h e i n t e n t of s e c t i o n
y
48-321.
Here, while t h e husband has a b e t t e r f u t u r e earning poten-
t i a l than t h e wife f o r obvious reasons a f a c t which must be
weighed i n t h e balance, t h e wife does have a s t r o n g p o t e n t i a l
f o r f u t u r e a c q u i s i t i o n of c a p i t a l . Both a r e f a c t o r s which
r e l a t e t o t h e f u t u r e needs of t h e p a r t i e s .
The t r i a l judge i n h i s f i n d i n g s of f a c t recognized t h e
wife stands t o receive l a r g e sums from h e r mother upon h e r death.
The mother i s p r e s e n t l y 82 and i n very poor h e a l t h . The f a c t s
i n d i c a t e a s t r o n g l i k e l i h o o d of such i n h e r i t a n c e , due t o t h e
f a c t M r . and Mrs. Kratz maintained a j o i n t w i l l .
I f i n d t h e holding i n Smyth v. Smyth, (Okla.1947), 179
P.2d 923, persuasive here. There t h e c o u r t s a i d :
"'Next t o t h e f o r t u n e of which he i s already
possessed, c o n s i d e r a t i o n should be given t o ***
f u t u r e prospects and probable a c q u i s i t i o n of wealth
from any source whatever.* *'I' *
See a l s o : Smith v.'Smith, (Okla.1957), 311 P.2d 229; Kessinger
v. Kessinger, 360 Mich. 528, 104 N.W.2d 192 (1960).
I n a d d i t i o n , I f i n d t h e t r i a l c o u r t ' s d e c i s i o n t o saddle
p l a i n t i f f husband with t h e o b l i g a t i o n of a l l t h e p r e - e x i s t i n g
t a x l i a b i l i t i e s t o be i n e q u i t a b l e . Both owe t h e o b l i g a t i o n ,
both have t h e a b i l i t y t o pay t h e o b l i g a t i o n , and both should
share i n payment.
Considering t h e e n t i r e record h e r e , I would reverse due
t o what, i n m opinion,
y an unconscionable property d i s t r i -
e
"
-
b u t ion. t
Justice . L
I