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 HonorableJack L. Green, Judgepresiding.

COUNSEL OF RECORD: ForAppellant: Dennis E. Lind, Datsoupoulos, MacDonald & Lind, Missoula, Montana For Respondent: Raymond P. Tipp, Tipp, Frizzell & Buley, Missoula, Montana

Filed: Submitted on Briefs: January 21, 1993 Decided: April 5, 1993Justice 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 fromrespondentNormanJosephRock (Joe)to Sharon isnull 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 wereborn during themarriage. Joeand Sharonhad both been married previously. At the date of dissolution Joe was 62 years old and Sharonwas 50 years old. I. Did the District Court err indetermining that thepromissory 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. Schaubv. Vita Rich Dairy (1989),236 Mont. 389, 391, 770 P.2d 522, 523.~t issue is apromissory note for $59,000 fromJoe 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 loanwas to refinance existing debts, suchas a loanat theMcKenzie Bank inNorth 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 werehis. Martin Olsson, loanofficerat Ronan State Bank, stated that the bank had several previous loans of Joe's that were outstanding. These loanswere 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 collateralwas theprimary 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. Joenow claims that thepromissorynote between Sharonandhim isunenforceableas a negotiable instrument. He argues that itwas signed in blank with no attached exhibit, and therefore, was incomplete, that therewas no "sum certain,"and that therewas no consideration. Wehold the lower court's interpretation of the law as to the validity of the promissory note was incorrect. Even though the note is not avalid negotiable instrument, it shouldbe 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 3subsequent 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 thatwhen 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 thepromissory note at issue is enforceableasan 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 thepast, 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 propertywill 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 conclusionsand remain free to reach our own." Schaub, 770 P.2d at 523. The courts are obligated to fashion a distribution which is equitable toeachparty under the circumstances. InreMarriage of Jones (1987), 229 Mont. 128, 745 P.2d 350; 5 40-4-202, MCA. Working in equity, the courtsmust 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 findingof 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'smain contention on appeal is that the District Court

was clearly erroneous in finding that her home was amarital asset which shouldbe sold with the balance of theproceeds tobe divided equallywithJoe. Sharon contends that itwas inequitableto 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:[Elquitablyapportion between the parties the property and assets belonging to either or both, however and whenever acquiredandwhether thetitle thereto is inthe name of the husband or wife or both. While the home may be considered part of the marital estate, the DistrictCourt's equal divisionof thehome inthis instance is inequitable. Section40-4-202,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 eachparty at the time of marriage. In

reMarriage 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 spousewith 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. Joemay be entitled to a portion of the appreciation invalue 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-yearperiod to the maintenance of the household. On appeal Joe refers to this $99,000 as "extra money" he gave to Sharon Isbeyondthe family's expenses and repairs 

# . . . . However, a careful review of the record indicates that this was Joe's totalfinancial 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 contributionsofbothparties to themaintenance and improvementof thehome. The court shall consider towhat extent thismaintenance 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 themarital asset in the amount of $10,606. The loan obligation at the Ronan StateBankwas a joint obligation,and anyamount ofdissipationof the marital asset must be attributed equally to both parties. Many of the findingsof fact inthismatter 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: