NO. 83--141 INTHE SUFREME COURTOF THE STATEOF MONTANA 1983

FAYEANN PrlADDOX, PlaintiffandAppellant,

FRANK

### A. NO~~IAN, JR.

## ,and GLORIAE

# . NORMANI & NORMAN RANCIJES INC.

## , Defendants and Respondents.

APPEAL FROM: DistrictCourt of the Eighteenth Judicial District, 

### Inand for theCounty of Gallatin, TheHonorableThomas Olsen, Judgepresiding.

COUNSELOF RECORD: ForAppellant: Berg, Coil,Stokes & Tollefsen;Ben Berg, Eozeman, 14ontana

ForRespondents: Moore,Rice, O'Connell & Refling;FerryJ. Moore, Bozeman,Montana

Submittedon Briefs: May 26, 1383

Decidedr 

## SEP

# -8

ClerkMr. JusticeFred J. Weber delivered the Opinion of theCourt. Plaintiff appeals from the judgment of the Eighteenth Judicial District Court, Gallatin County, ordering her to transfer to Norman Ranches, Inc. her 75 shares of stock in that corporation in return for $20,000and 20 acres of land. We affirm in part, reverse in part, and remand for further proceedings. The issuesare:

(1) Should the District Courthave appointed a receiver to liquidate the corporate assets and distribute the proceeds? (2) Did the District Court have power to compel plaintiff to sellher stock? 

### (3) Were the findings of the District Court supported 

### by substantialevidence? The Norman family ranch was incorporated in 1961. No assetswere transferred to the corporationuntil December 20, 1963,when FrankNorman, Sr. (FrankSr.) deeded approximately 1140acresof land to the corporation. The ranch belonged to and had been operated by the Norman family for nearly 100 years. Frank Sr., who died July 28, 1980, was the father of defendant Frank Norman, Jr. (Frank Jr,plaintiff Faye Maddox (Faye)

## , and T. Donald Norman (Donald)

# . Donald was originally a plaintiff in this action, but after settling with defendantswas dismissed as a party. Frank Jr.'swife, GloriaNorman (Gloria),isalsoadefendant. Originally, Frank Sr. held 997 of 1000 outstanding shares of Norman Ranches stock, and Frank Jr., Donald and Gloria each held one share. In 1970 Frank Sr. gave an additional 410 sharesto Frank Jr., 75 shares to Faye,and 74 shares to Donald. At the same time, Frank Sr. executed a contract to sell his remaining 438 shares to Frank Jr.Those shares were transferred to Frank Jr. on February 13, 1980, after the purchase price had been fully paid. At the commencement of this action, ownershipofNorman Ranches was: FrankNorman,Jr. 849 shares GloriaNorman 1 share FayeMaddox 75 shares T. Donald Norman 75 shares Faye and her husband lived and worked on the Norman ranch in 1946 and 1947, but in 1948 left the ranch and the state because they "couldn't make a living." Frank Sr.moved to Bozeman in 1968 and to Lacey,Washington in 1974. Faye testified that Frank Sr. was not involved in the ranch operation after leaving the ranch in 1968, but Frank Jr. testified that Frank Sr. continued to control the operation, returning in the summers to do light work and otherwise phoning weekly to discuss ranch decisions. Although after 1974 Frank Sr. and Faye both lived in Washington and had "very close contact," Faye was not informed until 1979 that her fatherhad givenher 75 sharesof corporate stock. Beginning 

### in 1978, the ranch affairs were handled by a new accountant and a new attorney. Frank Jr. and Gloria testified they had previously depended on the corporation accountant to prepare tax returns and the corporation attorney to prepare and mail the required notices. Faye, however, did not receive any notice regarding corporate matters. When Frank Jr. and Frank Sr. applied for a corporation loan in 1970,Fayewas listed on the application

as a shareholder. In November, 1979 Faye received her first annual shareholders' meeting notice. In 1979 and each successive year, she attended annual corporation meetings. No separate corporate records were kept by defendants prior to 1978. No separate journals, ledgers,balance sheetsor bank accounts were prepared or maintained. On advice of the new accountant in 1978, a separate corporate checking account was established and separate corporate accounting mechanismswere adopted. The newaccountanttestified that a very thorough ledger had been kept inwhich all transactions

were posted, but this ledger did not distinguish corporate from personal transactions. This ledger was not introduced at trial by either party. The accountant did testify there had been no apparent attempt to conceal any financial matters. However, no records were introduced at trial to account forcorporate transactionsfrom 1970 to 1978. In 1970 the Federal Land Bank loaned Norman Ranches $80,000 to pay for cattle, land and operating expenses. Proceeds of the loan were in part applied to repay the balance of a loan used to purchase the "Gervais" section. Title to this parcel of land passed to Frank Jr. rather than to the corporation. FrankJr. testified that the corporation had merely loaned him that amount,but no evidence of such a loanwas presented. Corporate lands originallywere subject to a mortgage on the $80,000 loan, although they were later released from the mortgage. Loan payments were not in default, but it was not shown if payments were made with Frank Jr.'s personal funds or with corporate funds. Most of the balance of the $80,000 was used to purchase yearling heifers in Frank Jr.'sname. From 1971 to 1979 calveswere sold and proceedswere deposited in the account of Frank Jr. and Gloria, or Frank Sr. No showing was made of reimbursement to the corporation for the money used to purchase theyearlingheifers. Beginning in 1966, corporate landswere farmed by Frank Jr. under a 1/3

## - 2/3 crop share agreement. From its 1/3 share of the crop, the corporation was responsible for

### payment of real estate taxes on corporate land, 1/3 of the seed grain planted, 1/3 of the fertilizer, 1/3 of the weed control, and all material for repair or construction of fences. In addition to providing the balance of seed, fertilizerandweed control, FrankJr. as lessee provided all machinery for cultivationand harvesting. Hewas required to deliver all grain to the elevator. No showingwasmade that the corporation received its share of hay or grain. Frank Jr. kept no separate records of corporate shares of grain or hay. Proceeds from the sale of cropswere deposited to the personal account of Frank Jr. and Gloria,or Frank Sr. From 1966 to 1977 nomoney wasdeposited in any corporateaccount. No amounts were entered in any separate ledger for grain or hay production under the crop shareagreement. A summary of net lease income, based upon estimates prepared by the corporation's accountant in 1979, showed the corporate net lease income for thatperiod as $76,744or $48,257, depending

on tax treatment. Further, two houses on a portion of the ranch known as the "Gray place" were rented beginning about 1977. Rent incomewas deposited in Frank Jr.

### 's account. No showingwas made that the corporation received any of the rent income. Faye attended the December 6, 1979 annual shareholders' meeting for Norman Ranches. At themeeting, Fayedemanded

an accounting for the income and expenses of the corporation from its beginning todate. At the February 1, 1980 meeting, Fayeand Donald each received certificates representingtheir shares. The summary of net lease income was presented for examination and Frank Jr. briefly described the nature and cost of various corporation improvements. Faye's attorney requested that a detailed written statementbe submitted and thatdefendants provide adetailedwritten accounting for the$80,000 loan proceeds. No accounting was made. At the next annual meeting on April 2, 1981, Faye requested and it was agreed that an appraisal be made of the corporate ranch property, the Gervais section and items of equipment and machinery belonging to Frank Jr. The appraisal valued the ranch property and improvements at $640,000, the Gervais section at $l6O,OOO, and items belonging to Frank Jr. at $46,008. The appraisal detailed the character and use of ranch lands. Based expressly upon present agricultural use and inclusion in the ranch unit, the appraiser setper-acre values foreach type of ranch land. Theappraisalwas not of the corporation as a whole,but included primarily the ranch. None of the corporate liabilities or other assets were mentioned. In fact, the overall financial position of the corporationhas notbeen established. The parties met on September 30, 1981 to discuss settlement of the dispute and possible purchase of plaintiffs' shares by the corporation. An agreement was reached by which defendants agreed to pay $175,000 for the 150 shares owned by Faye and Donald. The payment was contingent upon defendants obtaining financing within 30 days. They could not,and the agreement lapsed. Plaintiffs filed suit on November 2, 1981. Plaintiffs alleged misapplication and waste of corporate funds in that Frank Jr. and Gloria had used corporate assets for "personal benefit and gain." Plaintiffs asked the Court to appoint a receiver to liquidate the corporate assetsand distribute the proceeds. On November 24, 1981,a hearing was held to allow defendants to show cause why a receiver should not be appointed. The Court issued findings and conclusions on December 30, 1981, finding that defendants' conduct "in the past disposition of the corporate share of hay and graincrops and the proceeds 

### of calves and cattle constitutes a possible misapplication and waste of corporate assets." The Court conditionally accepted ("unless evidence indicates otherwise") the $175,000 settlement figure as fair value of plaintiffs' 150 shares. The Court allowed the parties until July 12, 1982 to reach a purchase agreement, otherwise a receiver would be appointed. At a secondhearing onAugust 2, 1982 theparties sought court approval of a new settlement agreement between defendants and plaintiff Donald. Faye was not involved in the agreement. The Court had ordered that any transaction involving corporate assets must have prior court approval. The settlement agreementprovided that Donald would transfer his 75 shares to the corporation in return for $20,000 and 20 acres of land. The agreement was negotiated for Donald by his son Ted Norman, to whom Donald had given power of attorney. 

### A prior offer of $30,000had been rejected. After hearing testimony that the agreement was fair, reasonable, and voluntarily and knowingly entered into, the Court approved the agreementand dismissedDonald as aparty. At a third and final hearing on December 7, 1982, the Court heard defendants' motion to amend the findings and conclusions of December 30, 1981. Defendants presented evidence that the $175,000 settlement agreement had been contingent upon defendants obtaining financing. Defendants alsopresented evidence of specific 20-acre tracts comparable in value and aesthetics to the tract conveyed to Donald. Fayepresented evidenceof tractsvalued around $87,500,half the $175,000 settlement agreement. In findings and conclusionsdated December 30, 1982,the Court found that the $175,000 agreement had been contingent upon financing and "was nullified" by unavailability of financing; thatdefendants had settled with Donald,but Fayehad refused the

same settlement offer; that Faye's stock, being "closely held, seldom sold, [and] unlisted," was difficult to value, but that the settlementwit11Donaldwas a "strong indication" of the fair market value of the stock. The Court found two specific tracts comparable in value and aesthetics to Donald's tract, and found that a settlement similar to Donald'swas an equitable resolution for Faye. Finally, the Court found that although defendants' conduct was not 

### per forma as to corporate law or the corporation'sby-laws, "its informalitywas not oppressive toward the plaintiff,nor was she defrauded." Furthermore, the Court did not "find the misapplication of this personal-ranch corporation's assets

nor waste of them." The Court refused to liquidate, reasoning that the "prodigal in this instance must defer to the one who stayed at home,built the ranch,worked with the father and struggled to a successful ranch unit.

### " The Court ordered that Faye transfer her 75 shares of stock to Norman Ranches in exchange for $20,000 and a 20-acre tract of land comparable to that received by Donald Norman. Plaintiff appeals.

Plaintiff in substance argues that upon a bare showing of misapplication or waste of corporate assets, the District Court is required by section 35-1-921, MCA to appoint a receiver to liquidate the corporate assetsand distribute the proceeds. Plaintiff maintains that because such a showing was made, the District Court erred in refusing to appoint a receiver. 

### We do not agree. The Montana Business Corporation Act provides that "[tlhedistrict courts shallhave fullpower to liquidate the assets and business of a corporation 

# . . . when 

# . . . thecorporate assets are being misapplied or wasted." Section 35-1-921(1)(a)(iv)

## ,MCA. The commentson the statute suggest that this section was intended to clarify the dissolution powers of the district courts: "Casesdiffer as to whether a court has power on petition of a sFarxoldertodism ax l-ate for deadlock, fraud or mismanagement, in the absence of a statute giving the court such apower. "When there is a statutory grant of such a power there are still two factors with which one seeking dissolution must contend: 

### (1)Courtshave tended to construe the statutes as discretionary rather than mandatory, even though the language of the particular statutemay appear tomake itmandatory.

(2)Courts have tended to look beyond the language of the statute and into the equities of the situation.

"This section provides discretionary authority to the district court to liquidate the assets and

- business of a corporation upon the petition of a shareholder. 

# . . ." Official Comment, Annot. to section 35-1-921,MCA (emphasisadded). These comments indicate the drafters of the statute intended to remove existing uncertainty aboutwhether the courts have 

### anydissolutionpowers and to allowdiscretionary exercise of those powers. The statute is clearly couched in permissive language. To require dissolution on a showing of bare statutory grounds would be manifestly unjust, because it would dictate the harsh remedy of dissolution regardless of the factsof the case or the consequences. Liquidation is an extraordinary remedy and the power of the court to appoint a receiver must be exercised with extreme caution. Thisted v. Tower Management Corp. (1966), 147 Mont. 1, 14, 409 P.2d 813, 821. Traditionally, liquidationhasbeen viewed as a remedy of lastresort. This view was restated in State ex rel. Iversonv. District Court

(1965),146Mont. 362, 406 P.2d 828: "The demand of any party for appointment of a receiver is generally very carefully considered bythe courts, for this is a 'drastic' remedy which deprives the lawful owner of property the right to manage and control his own interests. As a result,



## . 

# . . power to appoint a receiver is to be exercised sparinglyand not as of course. A strong showing should be made and even then the authority must be exercised with conservation and caution

# . . . [citations omitted] The general rule isalso stated that if thedesired outcomemay be achieved in any other way, rather than through the appointment of a receiver, then this course should be followed." Iverson, 146 Mont. at 371, 406 P.2d at 832-33, quoting Brown v. Erb-Harper-Rigney Co. (1913), 48 Mont. 17, 27, 133 P. 691,694. See also OINeal,Close Corporations S9.27 (Supp. 1982); 19 C.J.S. Corporations §I454 (Supp. 1979). We hold that section 35-1-921, MCA is permissive rather than mandatory, and that district courts are empowered, but not required, to liquidate when corporate assets have been rr~isappliedor wasted. As noted in the Official Comment to section 35-1-921, MCA, courts look beyond the statutory criteria and "into the equities of the situation." This Court has held that "in addition to the bare statutory requirements, there is a further burden ofproving equitable grounds fordissolution." FOX v. 7L Bar Ranch Co. (1982), Mont

# . , 645 P.2d 929, 935,39 St.Rep. 862, 871. We reaffirm thatholding. In Fox, we affirmed the dissolution of a close corporation, - finding that deadlock and oppression, two of the statutory grounds, were present and that the equities clearly favored dissolution. We emphasized that the dissolution issue is to be decided on a case-by-case basis. In affirming dissolution,

### - Foxheld therewasno adequatealternate remedy: "As we have stated, technical satisfaction of the deadlock requirements is not enough to warrant dissolution. Therefore, regardless of

[plaintiff's] motives for seeking a dissolution, dissolution could not be ordered absent 

## the underlying equitableFounds. "On the other hand, to disallow a division would greatly harm [plaintiff]by making him the victimof corporate formalities. There 

### -- is no alternative adequate remedy. 

### - Fox, 645 P.2d at 936,39 St.Rep. at 871-72 (emphasisadded)

# . The equitable factors found persuasive in Fox were (1) demonstrated inability of the parties to get along, (2) reasonable expectations of the shareholders, (3) lack of disruption of a going business, (4) lack of injury to the public, (5) harm to shareholders from refusal to liquidate, and (6)lack of adequate alternative remedies. This list is not exhaustive, nor is each of these factors necessarily required in every case. Dissolution actionsmust be resolved

on a case-by-case basis, balancing the underlying equities and eschewing rigid, predetermined rules. This approach is consistent with ourprior decisions. Aswehave noted before in the corporate dissolution context, "[c] ourts of equity

are not bound by cast-iron rules. The rules by which they

are governed are flexible and adapt themselves to the exigencies of the particular case." Thisted, 147 Mont. at

We employed essentially the same flexible approach in Skierka v. Skierka Bros., Inc. (1981)

## , Mont

# . , 629 P.2d 214, 38 St.Rep. 754. There we affirmed the District Court's conditional liquidation order, holding that the Court's finding of oppression was clearly supported by the evidence and that fraud and mistake were also present. Applying Thisted,we deferred to the equitable discretion of the District Court. The equities in Skierka clearly supported liquidation. There, due to actions of the controlling shareholder,plaintiff's reasonable expectations were frustrated, plaintiff was effectively excluded from corporate management,and the shareholders were unable to get along. Even though the equities supported the liquidation remedy, the District Court ordered that liquidation occuronly if the parties failed to agree on a division of the corporate assets. Skierka,629 P.2d at 215-17, 38 St.Rep. at 755-58. The equities in this case do not support plaintiff's contention that liquidation of Norman Ranches is the proper remedy. Plaintiff claims to have established statutory grounds for dissolution,but has not demonstrated underlying equities which demand the harsh liquidation remedy. Even assuming misapplication or waste, the record contains substantialevidence in support of the trial court's refusal to liquidate. Norman Ranches appears to be a solvent and going business. Frank Jr. and Gloria would be unjustly harmed by liquidation of assets they have worked long and hard to improve. Together they own over 90%of the corporate shares. Moreover, liquidation would notbe likely tobenefit Faye in a manner consonant with her apparent expectation to get her money out of the corporation quickly. She clearly does not wish to remain in Montana and participate in the ranch operation. The parties are clearly unable to work together. Liquidation of ranch propertymight takeyearsand might yield a much less satisfactory result than other available remedies. Alternative remedies exist which would resolve the dispute without the adverse consequences liquidation promises to all concerned. Finally, Faye requested in open court a remedy other than dissolution. We will not disturb the trial court's determination of the dissolution issue unless it is "clearly erroneous." Skierka, 629 P.2d at 222, 38 St.Rep. at 764. We affirm the District Court's refusal to liquidate the assets of Norman Ranches, Inc.Plaintiff challenges the power of the District Court to compelher to sellher stock. She argues that the sole issue before the District Court was whether to dissolve the corporation, but that the Court, in an effort to compromise, imposed an unwanted agreement upon the parties. We reject this argument. Our prior decisions have recognized the general equitable powers of district courts over disputes arising among shareholdersof close corporations. Thisted, 147Mont. at 14-15, 409 P.2d at 820-21;Skierka, 629P.2d at 221-22, 38 St.Rep. at 764; 

### - Fox, 645 P.2d at 936, 39 St.Rep. at 871-72. In Thisted, we recognized that power to choose from a broad range of equitable remedies is necessary to resolve disputes of this nature: "[bly [their] very nature, intracorporate problems arising in a close corporation demand the unusual and extraordinary remedies available only in a court of equity." 147Mont. at 14, 409 P.2d at 820. Accordingly, a court sitting in equity is empowered to determine the questions involved in a case and "do complete justice." Sawyer-Adecor International, Inc. v. Anglin (1982) Mont. 

## , 646 P.2d 1194, 1202, 39 St.Rep. 1118, 1127; Link v. State (1979), 180 Mont. 469, 483, 591 P.2d 214, 222. This includes the power to fashion an equitable result. Rase v. Castle Mountain Ranch, Inc.

(1981), Mont. 

### , 631 P.2d 680, 687, 38 St.Rep. 992, 1000.Plaintiff argues that the District Court converted this action todissolve and liquidate a corporation into something akin to specific performance of a contract contrived by the Court. We do not agree. Although the District Court may have improperly relied upon the settlement figure reached bydefendants and Donald, as determinative of the value of plaintiff's 75 shares, the District Court did not make a contract for the parties. Plaintiff cites Horst v. Staley

(1936),101 Mont. 543, 54 P.2d 876, for the rule that courts may not make contracts for the litigants. But in Horst the disputewaswhether the parties hadmade a certainagreement. Plaintiff claimed they had; defendant denied that any agreementhad been reached. In attempting to compromise the positions of the parties, the trial court disregarded the allegations and the parties' proof and created an agreement with termsmidway between theparties' positions. Horst, 101 Mont. at 548-49, 54 P.2d at 878. Here, plaintiff asked the District Court to order the stock sale. The Court simply assigned avalue to the shares thatwasunsatisfactory to the plaintiff. Although plaintiff's argument begins with the assertion that the DistrictCourt ispowerless to compel the stock sale, her argument does not address that issue. Instead, it is aimed at undermining the District Court's valuation of her stock. The District Court did not impose a "contrived"contract upon theplaintiff. Although this Court has never ruled directly upon the question, the decisions of other jurisdictions have recognized and approved the fashioning of equitable remedies less drastic than dissolution, including but not limited to ordered sales of stock at a fairprice. Fixv. FixMaterial Co., Inc. (Mo. 1976), 538 S.W.2d 351, 357; Baker 

### v. Commercial Body Builders, Inc. (Or. 1973), 507 P.2d 387, 395-96; Alaska Plastics, Inc. 

### v. Coppock (Alaska 1980), 621 P.2d 270, 274-75. In Coppock, the plaintiff sought dissolution but the trial court ordered defendants to purchase plaintiff's shares. The Alaska Supreme Court summarized the case law on this issue and restated therationale supporting the fashioning of equitable remedies lessdrastic than liquidation: "Liquidation is an extreme remedy. In a sense, forced dissolution allows minority shareholders to exercise retaliatory oppression against the majority. Absent compelling circumstances, courts often are reluctant to order involuntarv 1 dissolution. [citations omitted] As a result, courts have recognized alternative remedyes based upon their inherent equitable powers. Thus in Baker, interpretinga statute substantially similar to AS 10.05.540, the court authorized numerous alternative remedies for oppressive or fraudulent conduct by the majority. Among those would be: 'An order requiring the corporation or a majority of its stockholders to purchase the stock of theminority shareholders at a price to be determined according to a specified formula or at a price determined by the court to be a fair and reasonable price.' (footnote omitted). Baker, 507 P.2d at 396. The same court applied that remedy in Delaney v. Georgia-Pacific Corp., 278 Or. 305, 564 P.23 277, 288-89 (1977)

# ." Coppock, 621P.2d at 274-75 (emphasisadded). The Court found however that the stock purchase remedy was not appropriate under the factsof that case. The stock purchase remedy was applied in Delaney,where the Oregon court found that remedy appropriate in light of 

### "'the facts of the case and the nature of the problem involved. 

# .

# .'" Delaney, 564P.2d at 288, quotingBaker, 507 P.2d at 395. The case was remanded for a proper determination of value. These cases clearly support the power of theDistrictCourton appropriate facts to order the purchase or saleofminority shares. We arepersuaded by the rationaleand holdings of these decisions. Plaintiff has not cited, nor does our independent research disclose, any authority to the contrary. Indeed, the cases cited do not seriously question that courts have such power, onlywhether its exercise is appropriate in the particular case. We hold that the District Court had power to order the purchase and sale of Faye's stock.

### Plaintiff and defendantsare clearly unable to cooperate in themanagement of NormanRanches. Itdoesnotappear from the record that Faye desires any participation in the ranch operation. Faye asked the District Court to award her money and land in exchange for her shares. She has not expressed any desire to remain a shareholder or participate in the ranch operation, except insofar as necessary towithdraw her share from the corporation. Norman Ranches appears to be a successful family ranch and, barring dissolution, is likely to remain so. The stock purchase by defendants allows Faye her rightful share of the corporation. It also allows the ranch to continue operating without unfair interruption. It allows defendants to enjoy the rightful fruits of their labors on the ranch while still allowing a full accounting for corporate funds. In short,the stock sale remedy answers the equitiesand demandsof the case. We affirm theDistrict Court's use of the stock sale remedy in this case.

The final issue is whether there was substantial evidence to support the findings of the DistrictCourt upon which judgment was entered ordering Faye to transfer her 75 

### shares of stock in return for $20,000 and 20 acres of land. The record does not show all assets and liabilities of the corporation. While the District Corut found that corporate assets were appraised at $640,000,the record shows that this value is limited to the corporate realproperty. The record does not disclose the netvalue of the corporation. Section 35-1-812(6)(c)

### , MCA, in providing a method for dissenting shareholders to force a purchase of shares, requires as a part of the value determination that the corporation provide

a balance sheet showing assets and liabilities. Such information is no less crucial in the present case.Determination of the assets of the corporation also requiresan accountingby Frank,Jr. for corporate funds from 1970 to the date of valuation. No accounting is shown of corporate rental income, lease proceeds or loan proceeds. Liabilitiesof the corporation,if any, must alsobe shownby appropriate evidence. It may be that defendants have some claim in that regard for labor and improvements. Next, we note that the District Court relied upon defendant's settlement with Donald as determinative of the value of Faye's shares, rejecting the earlier $175,000 valuation by agreement. While the $175,000 agreement lapsed for lack of financing, it does not eliminate that agreed value as a factor to be considered in determining share value. Defendantsargue that reliance on Donald's settlement to determine value was proper, relying on cases treating arms-length transactions in the normal course of business as the basic criterion of market value. The record raises a question as to whether or not the settlement with Donaldwas

an arms-length transaction, since it involves a participant in the court action. It appears that the agreed value of $175,000 for all the shares or $87,500 for Faye's shareswas evidence which should have been considered by the District Court. Finally, the record fails to show the value of the 20

acres of land ordered to be exchanged. The initialappraisal

was based upon a value per acre for an operating 1,140-acre ranch. That appraisal expressly stated that the valueswere applicable only under the existing program of farm use and

were invalid for use in connection with any other appraisal. As a result, the record fails to show the value of the 20 acres which the defendant proposed to transfer along with $20,000 to Faye and also fails to showthe value of the landswhich Faye proposed to be transferred to her at a value of $87,500. On further consideration, theDistrict Court should require appropriate evidence to establish the value of any landwhich is ordered tobe exchanged. The case is remanded for further proceedings consistent with this opinion.

We concur: S'\