No. 87-25 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

IN THE MATTER OF THE ESTATE OF 

WILBUR EDWARD SMITH, Deceased. 

ROGER H. SMITH, 

Plaintiff and Respondent, 

-vsTHE ESTATE OF WILBUR E. SMITH, deceased, 

HARRIET E. SMITH as Personal Representative 

and against HARRIET E. SMITH as an individual; 

ROGER WILBUR SMITH and DOUGLAS LANCE SMITH, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable Thomas A. Olson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

H. A. Bolinger argued, Bozeman, Montana 

K. Robert Foster, Bozeman, Montana 

For Respondent : 

Kirwan & Barrett; Stephen M. Barrett argued, Bozeman, 

Montana 

McKinley Anderson, Bozeman, Montana 

Jim Screnar, Bozeman, Montana 

Submitted: November 10, 1987 

Decided : January 15, 1988 

*e 

Clerk 
Mr. Chief Justice J. A. Turnage delivered the Opinion of the 

Court. 

Plaintiff and respondent Roger H. Smith brought an 

action alleging partnership against the estate of Wilbur E. 

Smith (estate). Following jury trial, the trier-of-fact 

found that a partnership existed and held that one-half of 

various ranch and personal property including joint tenancy 

property belonged to plaintiff Roger H. Smith. 

We reverse. 

Nine issues are presented for our review. Because we 

are reversing, we limit our review to the following issue: 

Did the District Court err when it denied the estate's 

motion for a directed verdict on the partnership issue? 

Wilbur Smith was born in Bozeman in 1895. At the age 

of five years, Wilbur was adopted by his deceased mother's 

sister, Annie Smith, and her husband, Pierre Everich Guanus 

Smith or "Peg" Smith. Wilbur married Virginia Smith in 1926. 

In 1928, Wilbur's only child, Roger H. Smith, was born. 

Wilbur and Virginia divorced in 1936. They remarried in 1942 

after signing an antenuptial agreement. Virginia died in 

1946. 

Wilbur married Harriet Smith in 1949. Harriet had two 

sons from a previous marriage, Roy and Gordon Boe. Roy is 

now deceased. Prior to their marriage, Wilbur and Harriet 

Smith executed an antenuptial agreement. 

Wilbur inherited a life estate in the Harry Smith Ranch 

from his mother, Annie, subject to Roger's remainder interest. The Harry Smith Ranch (HSR) is a 240-acre ranch located 

within the Bozeman city limits. Wilbur operated HSR as a 

dairy until 1960. Roger farmed HSR after 1960 and received 

crops or cash rent as payment. In January 1982, Wilbur 

conveyed his life interest in HSR to Roger contingent upon 

Roger conveying half interest to Roger's wife, Rose. 

Subsequently, Roger subdivided HSR for sale as residential 

and commercial property. 
In 1931, Wilbur inherited the Peg Smith place from his 

stepfather. The Peg Smith place is a 200-acre ranch located 

one-half mile west of the Harry Smith Ranch. After his 

parents' deaths, Wilbur purchased the following properties: 

1. Elk Creek Ranch or "Madison" (1920 acres and 2000 

acres of state leases) is located approximately thirty-five 

miles west of Bozeman near the Madison River. Roger Smith 

lived on Elk Creek Ranch and farmed the property from 1954 

through 1960 and from 1973 through 1979. 

2. Madison Valley Ranch (900 acres with 1280 acres of 

state leases) is located a few miles north of Elk Creek 

Ranch. Madison Valley Ranch was farmed by Elmer Satre and 

later by Norman Bryson from 1947 until 1979. 

3. Harris Ranch (640 acres) was originally leased by 

Wilbur in 1953 and purchased by him in 1958. At the time of 

the purchase, Wilbur advised Roger that he would have 

one-half interest in this ranch. In 1965 Wilbur deeded a 

one-half interest to Roger. Wilbur devised his one-half 

interest by will to Roger's son, Roger Wilbur Smith. 

4. The Harman Ranch (240 acres) is adjacent on the 

east to the Harry Smith Ranch and on the west to the Peg 

Smith Ranch. It was purchased by Wilbur in 1946. Leo 

Freeland farmed the Harman Ranch on a crop share or cash rent 

basis. Prior to his death, Wilbur subdivided and sold 80 

acres of the Harmon ranch. 

5. Summit Valley Ranch (375 acres) was deeded by 

Wilbur to his first wife, Virginia, in 1936 upon their divorce. Virginia devised her interest by will to Wilbur for 

life with a remainder to Roger. Roger took possession on 

Wilbur's death. Howard Hedges farmed the Summit Valley Ranch 

on a crop share or a cash rent basis. 

6. The Norine Building was deeded to Wilbur by Hedley 

Norine in 1955 as a mortgage to secure a $30,000 loan. 

Norine periodically borrowed additional money from Wilbur. 
Subsequently, Norine released his interest in the building to 

Wilbur in satisfaction of a debt. 

7. The Armstead Ranch was purchased jointly by Wilbur 

and Carl Richter in 1958. The ranch was sold in 1964. 

8. The junkyard consists of about five acres located 

approximately ten miles west of Bozeman. Wilbur purchased 

the junkyard in 1963. The contract was not fully paid at 

Wilbur's death and subsequent payments have been made by the 

personal representative. 

Wilbur's inventory and appraisal listed the following 

assets: 

Real Property 

Elk Creek Ranch 

Norine Building 

Junkyard 

Beartrap 

Madison Valley Ranch 

Harris Place 

Peg Place 

Harmon Place 

Stocks & Bonds 109,842 

Mortgages, Notes & Cash 35,402 

Jointly-Owned Property (Held 

in the name of decedent 

and his spouse, Harriet E. 

Smith, as joint tenants 

with right of survivorship) 

(Taxable interest or 

one-half) 260,268 

Other Misc. Property 43,550 

Transfers during 

decedent's life none 

Powers of Appointment none 

Wilbur Smith executed his will on March 18, 1980. 

Wilbur died on March 21, 1983. Section 9 of Wilbur Smith's 

will states: 
-- I have intentionally -- left no part - of m~ 

estate or property to 9 son Roger H. 

Smith, for the reasorthat upon my death 

my life estate will terminate and-end in 

approximately 240 acres of land ad joining the city limits of Bozeman, Montana, 

and a farm in Madison County south of 

Cardwell, Montana, so that said lands 

will be owned free and clear of encumbrances and which have a value in excess 

of the requirements of he and his wife. 

[Emphasis added.] 

Plaintiff Roger H. Smith was born in 1928. Roger 

married Rose [maiden name also Smith] in 1948. In 1951 Roger 

borrowed $3,000 to begin operating as a tenant on the Peg 

Smith Ranch. Roger was hailed out in August 1951. Roger 

left Bozeman and lived and worked in Trident, Montana, and 

later at the Canyon Ferry Dam. Roger also worked as a carpenter in Billings. In 1952 Roger returned to Bozeman because he was out of work due to a union strike. The 

following year Roger moved to the Harris Ranch. In 1954 

Roger moved to the Elk Creek Ranch where he resided until 

1960. 

In 1960 Roger moved to the Harry Smith Ranch. In 1964, 

Roger leased the Wellington D. Rankin Ranch near ~ingling. 

He farmed the Rankin property for three or four years. 

During the 1960s, Roger and Wilbur formed a company 

called Northwest Merchandising, which trucked and sold grain, 

salt and meal for feeding, concentrates, fertilizer, lumber 

and other goods. Roger testified that Northwest Merchandising was later expanded to include a used automobile and truck 

dealership. Wilbur Smith financed Northwest Merchandising. 

In 1968, Roger formed a partnership with his wife's two 

brothers, Joseph and Bill Smith. The partnership, called 

Smith & Smith Construction, built houses and fences. Wilbur 

financed the company until it was dissolved in 1972. 
Roger returned to the Elk Creek Ranch in 1973. He 

continued to farm the Elk Creek property until his retirement 

in 1979. 

Roger and Wilbur also operated a cattle buying and 

trucking operation. In an intermittent fashion, Roger and 

Wilbur purchased cattle and subsequently sold the cattle for 

profit. Wilbur financed nearly all of the cattle purchases. 

Except for a brief and unsuccessful attempt at a joint 

bank account, Wilbur Smith managed all funds. Wilbur was the 

"banker," receiving and distributing or reinvesting all 

proceeds and profits. 

Roger brought this action demanding: 

(1) A determination that an oral contract to make a 

will existed between Wilbur and Roger and that all estate 

properties were to be transferred to Roger upon Wilbur's 

death; 

(2) An order determining the will a nullity due to 

fraud, mistake, undue influence, lack of testamentary capacity or forgery; 

(3) A determination that the estate property was held 

in a constructive or resulting trust; 

(4) A determination of the existence of a partnership 

on the estate properties; 

(5) An accounting of the profits and distribution of 

partnership assets; 

(6) A determination of the value of Roger's services 

to the estate; 

(7) An accounting of Wilbur's use of property and 

proceeds belonging to Roger. 

Roger also demanded appointment of a special 

adn~inistrator and that a $1,000,000 bond be posted by the 

personal representative. 

By the close of the plaintiff's case, all issues except 

partnership had been dismissed. Following presentation of 

the defense, the District Court submitted a special 
interrogatory to the jury. The special interrogatory 

contained questions pertaining to partnership and partnership 

assets. The jury reviewed nine separate properties as 

potential partnership property. The jury found that three 

parcels of real property belonged to the partnership: (1) the 

Elk Creek Ranch, (2) the Norine Building, and (3) the 

"junkyard." Additionally, the jury found that one-half of 

joint tenancy property, held in the names of decedent and his 

spouse, Harriet E. Smith, as joint tenants with right of 

survivorship, was partnership property. 

Issue 

Did the District Court err when it denied the estate's 

motion for a directed verdict on the partnership issue? 

Following presentation of Roger Smith's case, defendant 

estate moved for a directed verdict on the partnership issue. 

The District Court denied the estate's motion. The court 

did, however, grant the estate's motion for a directed verdict that Roger Smith had failed to present sufficient evidence of an oral promise to convey real or personal property. 

A partnership is defined in S 35-10-201(1), MCA, as "an 

association of two or more persons to carry on as co-owners 

as business for profit." The elements necessary to establish 

a partnership are found in Bender v. Bender (1965), 144 Mont. 

To establish . . . a partnership, it is 

necessary to determine the intent of the 

parties: such business relationships 

arise only when the parties intend to 

associate themselves as such. There 

must be some contribution by each 

co-adventurer or partner or something 

promotive of the enterprise. There must 

be joint proprietary interest and a 

right of mutual control over the subject 

matter of the enterprise or over the 

property engaged therein, and there must 

be an agreement to share the profits. 

[Citations omitted. ] The intention of 
the parties has to be clearly manifested, [citing cases] and must be ascertained from all the facts and 

circumstances and actions and conduct of 

the parties. [Citations omitted.] 

The burden of establishing a partnership is upon the 

person claiming a partnership exists. First National Bank of 

Twin Bridges v. Sant (1973), 161 Mont. 376, 386, 506 P.2d 

835, 841. No person can become a partner without the consent 

of all partners. Section 35-10-401 (7) , MCA; Pulliam v. 

Pulliam (Mont. 1987), 733 P.2d 1299, 1300, 44 St.Rep. 483, 

485. The existence of a partnership depends upon the intention of the parties. Intent must be ascertained from all the 

facts, circumstances, actions and conduct of the parties. 

Gaspar v. Buckingham (1944), 116 Mont. 236, 246, 153 P.2d 

892, 896. 

The estate contends that Roger Smith failed to provide 

sufficient evidence of (1) commencement of the partnership; 

(2) intent to form a partnership; (3) an agreement to share 

profits and losses; and (4) Roger's right to control partnership assets. 

Roger Smith contends that ample evidence was presented 

to support the District Court's denial of the estate's motion 

for a directed verdict. After careful review of the record, 

we summarize testimony of the following witnesses. Raymond 

S. White, former Gallatin County Assessor, testified that he 

felt Roger and Wilbur were partners. 

The estate objected to White's nonexpert opinion on the 

partnership issue. The District Court, over the estate's 

objection, allowed White and numerous other lay witnesses to 

give opinion testimony on the partnership issue. 

Roger Smith's next witness, W. W. Lessley, Chief Water 

Judge of the Montana Water Court, testified that Wilbur Smith 

was a long-time neighbor and resident of the Harry Smith 

Ranch. Lessley stated that Flilbur and Roger worked "interchangeably" on water issues concerning the Harry Smith Ranch. 
Wilbur owned the Harry Smith Ranch. Roger held a remainder 

interest in the ranch. Judge Lessley testified that Wilbur 

and Roger worked together; however, he did not testify that a 

partnership existed between Wilbur and Roger Smith. 

Barbara Chapman, an employee of the Department of State 

Lands, surface leasing bureau, testified that although Wilbur 

was the lessee of record, both Wilbur and Roger signed the 

seed and crop reports required by the State. C. E. 

Stephenson, an employee of Owenhouse Hardware Company, testified that Roger and Wilbur maintained a mutual charge account 

at the store. Ken Graber, an outfitter and friend of Roger, 

testified that in his opinion, Roger and Wilbur were partners. Thomas J. Kamp, owner of Kamp Implement Company in 

Belgrade, stated that he felt Wilbur and Roger were partners 

in the Elk Creek Ranch. 

R. G. Roberts, Roger's accountant from 1953 through 

1969, testified as follows. Roberts felt Roger and Wilbur 

were partners. Roberts' understanding of a partnership was 

"a partnership would be two or more people involved, making 

decisions together and handling the monies together and 

buying and selling together." However, Roger Smith did not 

mention to Roberts, Roger's accountant of sixteen years, that 

he and Wilbur were partners. Further, Roberts testified that 

no real property or personal property was held as partnership 

assets and no partnership tax returns were ever filed. 

Jack Cain, a long-time friend of Roger's, testified 

that he, Wilbur and Roger entered into a number of joint 

ventures, involving automobile parts and salvage. Cain also 

stated that he felt Wilbur and Roger were partners. 

Doug Smith, son of Roger Smith, testified that he also 

felt Wilbur and Roger were partners. Doug based his testimony on Wilbur and Roger's intermittent cattle purchases. Doug 

testified that he was very close to his grandfather. However, Doug stated that neither his father Roger nor his grandfather Wilbur ever mentioned that they were partners. 
Roger testified that he felt he and Wilbur had been 

partners since 1951. However, Roger did not present evidence 

that Wilbur intended to enter the partnership. Bender v. 

Bender, 144 Mont. at 480, 397 P.2d at 962. Neither Roger nor 

Wilbur ever mentioned "partner1' or "partnership" in over 

thirty years of alleged partnership. Further, Wilbur indicated in his will that he did not feel Roger was entitled to 

any of the alleged partnership assets. 

Roger responds by claiming that his family did not talk 

about legal relationships such as partnership and transfer of 

real property ownership. Roger further contends that partnership and transfer of real property ownership was "understood" but unspoken. However, Roger ' s testimony is not 

supported by the record and is contradicted by Wilbur's 1965 

title transfer of the Harris Place to Roger. 

Roger testified that he periodically received monies 

for working on the Elk Creek Ranch and other property owned 

by Wilbur. However, with the exception of cattle purchases, 

Roger did not present evidence that he and Wilbur divided 

partnership profits and losses. Bender, supra. A review of 

Wilbur's voluminous business records does not reveal division 

of profits and losses. Wilbur's business records and Roger's 

testimony merely show that Roger was employed by Wilbur and 

that he and Wilbur engaged in a number of joint ventures 

involving cattle, trucking, and automotive salvage. Section 

35-10-202 (4), MCA. Clearly, Roger's involvement in the 

above-mentioned joint ventures did not create a partnership. 

Wilbur held legal title to nearly all alleged partnership assets, including real property and state land leases. 

Roger did not present evidence that he had an equal right of 

control over these alleged partnership assets. See, Rae v. 

Cameron (1941), 112 Mont. 159, 169, 114 P.2d 1060, 1064. 

Additionally, Roger testified that Wilbur financed nearly 

every joint venture and all real property purchases. 
Roger also failed to present evidence of an oral or 

written partnership agreement or substantial credible evidence of an implied partnership agreement. - Rae, supra. No 

partnership name or partnership bank account was established 

or maintained. No partnership income tax returns were prepared or filed. Both Wilbur and Roger's annual income tax 

returns showed income and expenses without reference to a 

partnership. Neither Wilbur or Roger used the words "partner" or "partnership" in any conversation, transaction or 

financial record. In summary, the record is bare of 

substantial, credible evidence that would support a jury 

finding of oral, written or implied partnership. This is 

especially relevant in light of Wilbur's voluminous and 

detailed financial records. 

Clearly, the evidence presented does not support a 

finding, as a matter of law, that Roger and Wilbur Smith were 

engaged in a partnership. Sections 35-10-201 and -202, MCA. 

See, Bender v. Bender, 144 Mont. at 480, 397 P.2d at 962. 

As stated earlier, the District Court, over defendant 

estate s objection, allowed numerous nonexpert or lay 

witnesses to express their opinions as to whether they felt 

Roger and Wilbur Smith were partners or engaged in a partnership. In doing so, the court allowed nonexpert witnesses to 

state their opinions on the ultimate jury question. Generally, a witness is not permitted to state a conclusion or give 

an opinion of law. Rule 701, M.R.Evid. Bean v. Diamond 

Alkali Company (Idaho 1969), 454 P.2d 69, 71. Testimony of 

nonexpert witnesses is confined to matters of fact, as distinguished from matters of law. Olson v. Coats (Or. 1986) , 

717 P.2d 176, 178. The District Court is required to instruct on the law, while the trier of fact is required to 

determine the facts from the evidence presented and draw its 

conclusions. Sections 26-1-201 and -202, MCA. 

The court erred when it allowed, over defendant's 

objection, nonexpert opinion testimony on the partnership 
issue. Defendant was prejudiced when the above-mentioned 

testimony was repeatedly presented to the jury. Additionally, defendant was prejudiced because the improper testimony 

concerned the sole and ultimate jury question. See, Commission Comments, Rule 704, M.R.Evid. We hold the nonexpert 

partnership testimony prejudiced defendant and invaded the 

province of the jury. 

A review of the record reveals that when the improper 

testimony is excluded, the record is void of substantial 

credible evidence which might support a finding of partnership. Accordingly, we vacate the judgment and remand to the 

District Court with instructions to dismiss. 

-/A, ief Justice 

We concur: