No. 84-231

INTHE SUPREME COURT OF THE STATE OF MONTANA

1984

DELBERT S. BOWMAN and PATRICIA BOWMAN, Plaintiffsand Defendants,

JOHN R. PRATER,GERI PRATER,ELMER G. SPIDEL & AVIS SPIDEL, Defendantsand Appellants.

APPEAL FROPI: TheDistrict Court of the Sixteenth JudicialDistrict In and for the County 

### of Prairie, TheHonorableA. B. Martin, Judgepresiding.

COUNSEL

### OF RECORD:

ForAppellant: Wright, Tolliver & Guthals; JoelE. Guthals, Billings, Montana ForRespondent: IraD. Eakin, Baker,Montana

Submitted on Briefs: Aug. 

### 30, 1984 Decided: December 

### 4, 1984

Filed: 

### iji11

.

### '2

## 1984

ClerkMr. JusticeJohn Conway Harrison delivered theOpinion of the Court

The defendants appeal from an injunctionpendente lite order of the District Court of the Sixteenth Judicial District, Prairie County, enjoining defendants from transferring orencumbering assets owned by the corporation. The plaintiffs are bee keepers residing in Terry, Montana. The parties formed several corporations with the desire of marketing bee pollen. Three corporations were formed: Bowman Apiaries, Inc., Prairie County Land Developers, Inc.

## , (P.C.L.D. ) and Bee Made Products Laboratories, Inc. In return for capital stock in the corporation, the plaintiffs contributed land with a service stationon it, as well as their labor in running the pollen production business. Additionally, the plaintiffs contributed 28,000 pounds of pollen, 31 honey drums, and a 250 pound propane bottle. The plaintiffs alsoco-signed an $89,000 promissory note. The proceeds of the loan were used to acquire a tabletingmachine, grinder and press and other equipment for the production and marketing of pollen. The defendants contributed a rental house and office buil.ding in exchange forcapital stock intheventure. On May 8, 1982, thedefendants transferredtitleof the rental property from P.C.L.D. Inc

# . to defendants individually. The defendants also mortgaged the office build-ingand.rentalproperty tosecure a personal loan inthe amount of $1.09,000 without the knowledge or consent of plaintiffs. The plaintiff, Mrs. Bowman, testified that the defendant used corporate funds without consent or authorization topay for his son's personal livingexpenses.The testimony further established that the defendant took the tableting and grinding machines to Colorado without the knowledge or consent of the plaintiffs. The plaintiffs repeatedly requested to examine the financial records of the corporation,but were refused. No payments have beenmade on the $89,000 loan, as a result, the plaintiffs credit rating hasbeen ruined. On July 22, 1983, plaintiffs filed an action against defendants claiming corporate mismanagement and breach 

### of fiduciary duty as corporate officers. Defendants counter-claimed for breach of settlement agreement, interference with contractual relations, breach of fiduciary duties,and defamationof character. On March 26, 1984, the plaintiffs petitioned for a preliminary injunctionto enjoin defendants from transferring corporatemoney and property. An order to showcausehearing

was held onApril 20, 1984. The injunctionwas granted. It is from the injunction pendente lite order of the District Court which the defendantsappeal. Two issues are before thisCourt:



### (1) Whether the District Court erred in issuing plaintiff's preliminary injunction without defendants presenting evidence at the show causehearing. (2)Whether the findings of fact and conclusions of law in support of the preliminary injunction are clearly

erroneous. Injunction proceedings are prescribed and regulated by Chapter 19, Title 27, of the Montana Code Annotated. Section 27-19-301, MCA and section 27-19-303, MCA correspondinglyprovide:"27-19-301. Notice of application 

### - hearing. (1) No preliminary in junction may be issued without reasonable notice to the adverse party of the time and place of the making of the application therefor. "(2) Before granting an injunctionorder, the court or judge shall make an order requiring cause to be shown, as a specified time a.nd place, why the injunction should notbe granted,and the adverse party may in the meantime be restrained as provided in 27-19-314. "27-19-303. Time of granting injunction, evidence required. 

### (1) The injunction ordermay be granted after the hearing at any timebefore judgment. "(2) Upon the hearing each party may present affidavits or oral testimony. An injunction order may not be granted on affidavitsunless: 

### "(a)they are dulyverified; and "(b) the material allegations of the affidavits setting forth the grounds for the order are made positively and not upon informationand belief. 

### "(3) Upon the hearing of a contested application for an injunction order, a verified answerhas the effect only of an affidavit.

### " In the instant case,notice of the hearing on the preliminary injunction was given to defendants. An order to show cause hearing was had. The counsel of both parties were present. The defendants submit that the court granted the injunction after hearing only the plaintiffs' side of the case. The defendants claim they were not given any opportunity to present evidence as to why thepreliminary injunction should notbe issued as provided by section 27-19-303(2), MCA. The District Court record indicates otherwise. Followingapresentation of evidence the court asked if there

was "anything further?" The plaintiffs sumrna.rized their position to the court. The defendants remained silent. Itis at this point the court ruled and requested plaintiffs counsel to submit proposed findings of fact and conclusions of law. Moreover, the District Court record indicates that defendants did not raise an objection or request toprovide

an offer of proof at the close of the hearing. The defendants simply failed toraise this issue inthe District Court. We hold thisissuecannot be ra.ised forthe firsttime

on appeal. We have repeatedly stated that this Court will not consider questions of claimed error not raised or presented to the trial court. Northern Plains Resource Council v. Board of Natural Resources and Conservation (1979), 181Mont. 500, 594 P.2d 297; Hayes v. J. M. S. Const. (1978), 176 Mont. 513, 579 P.2d 1225; Kearnes v. McIntyre Const. Co. (1977), 173Mont. 239, 567 P.2d 433. The defendants argue on appeal that theDistrict Court failed to exercise independent judgment by adopting the plaintiffs1proposed findings. Specifically, the defendants claim the District Court erred in making the following findings: (1)The plaintiffs and defendantswereincorporators of the corporation inquestion; (2) The plaintiffs were directors of the corporation; (3) The defendants transferred ownership of the rental owned by P.L.C.D., Inc. to John R. Prater and Geraldine Prater; (4) The tableting machine and grinder were removed to Coloradoby John Prater; (5)The defendants surrenderedpossession of the office building; (6) The defendants failed to show the plaintiffs the corporation's financialrecord; and

### (7)No payments have been made to the plaintiffs on a promissory note, as a result their credit rating has been ruined. The plaintiffs claim the District Court's findings are supportedby the record. We agree. The standard for review of findings made by a district court is the same whether the district court has prepared them or has adopted a party's proposed findings and conclusions. Goodmundson v. Goodmundson (1982), 655 P.2d 509, 39 St.Rep. 2295; In re the Marriage of LeProuse (Mont. 1982), 642 P.2d 526, 39 St.Rep. 1053; City of Billings 

### v. Public Service Commission (Mont. 1981), 631 P.2d 1295, 38 St.Rep. 1162. "Although the practice is disapproved, the fact that the District Court substantially adopted the findings proposed by respondent's counseldoes not change the standard of review by this Court." In re the Marriage of Hunter (Mont. 1982), 639 P.2d 489, 39 St. Rep. 59. We must ascertain whether the "clearly erroneous standard of Rule 52(a) supports the findings on appeal." Speer v. Speer (Mont. 1982), 654 P.2d 1001, 39 St.Rep. 2204; In re the Marriage of Jensen (Mont. 1981), 631 P.2d 700, 38 St.Rep. 1109. Rule 52(a) M.R.Civ.P. provides, in part, that "findings of fact shall not 

### be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses." This rule reiterates our function as an appellate court. In GeneralMills Inc. v. ZerbeBros., Inc.

(Mont. 1983), 672 P.2d 1109, 40 St. Rep. 1830,we defined this function: "We cannot deviate from our function as an appellate court and reverse the District Court's decision. Our functionsdo not include a retrialof the case. We will not substituteour judgment for that of the trial court. We are 'confined to determining whether there is substantial credible evidence to support the findings of fact and conclusions of law' Cameron 

### v. Cameron (1978), 179Mont. 219, 227 587 P.2d 939, 344; In the Matter of the Estate of LaTray (1979), 183 Mont. 141, 598 P.2d G19; Olson v. Westfork Properties, Inc. (1976), 171 Mont. 154, 557 P.2d 821; Hornung v. Estate of Lagerquist (1970), 155 Mont. 412, 473 P.2d 541.'' We disagree with defendants

### ' contention that the findings and conclusions adopted by the District Court as a result of the hearing are clearly erroneous. Specifical-ly, the record supports the District Court's findings that the defendants as well as the plaintiffs were incorporators a.nd served as directors of the corporation. Theplaintiff,Mrs. Bowman testified that her husband and herself were incorporators of all three corporations. She also claimed shewas a director. The Bowmans' testimony likewise supports the remaining findingsmade by the trial court. The findings

are further substantiated by plaintiffs' warranty deed and quit claim deed exhibit evincing the transfer of the rental house from 

### P.L.C.D.

## , Inc.

## , to the defendants. The evidence will he viewed in the lightmost favorable to the prevailing party. Cameron 

### v. Cameron (1978), 179 Mont. 219, 587 p.26 939. We hold substantial, credible evidence supports the District Court's findings. The issuance of the injunction

was proper. The order of the District Court is affirmed.We concur: