No. 85-109 INTHE SUPREME COURT OF THE STATE OF MONTANA 1985

KAY HUNT, Plaintiff and Respondent,

-vsHAROLD RALPH HUNT, Defendant and Appellant.

APPEAL FROM: DistrictCourt of theThirteenth JudicialDistrict, Inand for theCounty of Yellowstone, The Honorable Diane G. Barz, Judge presiding.

COUNSEL OF RECORD:

For Appellant: A. L. Craddock, RedLod-gelMontana

For Respondent: James P. Murphy, Billings, Montana

Filed: Submitted on Briefs: Aug. 22, 1985 Decided: December 18, 1385

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### ..,.. ' A Clerk /@Mr. Justice Fred J. Weber delivered the Opinion of the Court.

The Yellowstone County District Court held that Harold Ralph Hunt (husband) owed Kay Hunt (wife) $24,064.03, which

arose out of an obligation under a. property settlement agreement and divorce decree entered in 1981. Husband appeals. We affirm. The issues are: 1. Did the District Court err in concluding that the original debt of $10,000 in connection with the motel purchase was not satisfied by the transfer of the house by the husband to theMcCartys? 2. Did the District Court err in concluding that the payment of $15,000by the wife to theMcCartyswas reasonable and that the payment of $15,000 was legally owed by the husband? 3. Did the District Court err in concluding that the second mortgage on the house was the husband's obligation, and that thewifepaid $11,255.63 to satisfy that obligation? 4. Did the District Court err in granting the wife a credit formaterial and labor for remodeling thehouse? 5. Did the District Court err in awarding the wife $24,064.03? Kay and Ralph Hunt were divorced in October 1981. During their marriage, the parties purchased a house subject to a purchasemoney trust indenture. They alsopurchased by separate contracts for deed a motel property and a rural building lot (Fox property). IJnder the motel contract for deed, a payment of $10,000 was due to the McCartys, the sellers of the motel. Under the divorce property settlement agreement, the wife was awarded the motel property and thehusband was awarded the house and the Fox property. The parties receiving the properties were to assume the outstandingdebts,with the exceptionthat the $10,000 due to the McCartvs on the motel property was to be paid by the husband. When he was unable to pay the $10,000 due, he quitclaimed to the McCartys his interest in the house. McCartys reserved the right to a deficiency judgment should the house sell for less than the debt. Thehusband testified that he considered the obligation due McCartys to have been satisfied in fullby the transfer. In October 1983, the wife sold the motel property. Prior to the sale, shewas required to obtain the McCartys' consent to the sale. She testified the McCartys would not give their consent to the sale of the motel property without payment in cash. The wife asked the husband to 

### pay the amount demanded by the McCartys. He did not do so because he claimed the original obligation was satisfied. As a result, the wife negotiated an arrangement with McCartys to pay them $15,000 in two installments fromtheproceeds of the motel sale. Their agreement specified that the payment of $15,000 represented the balance due under the original contract fordeed of $10,000 plus interestand costs. As a part of the settlement,McCartys deeded the house to the wife. After completion of the motel sale, the wife moved into the house and improved the house to make itmore marketable. InFebruary 1984,thewife sold thehouse. Prior to the sale,Kay Huntpaid Household Finance $563. From the proceeds of the sale, she paid the second mortgage on the house in the sum of $10,692.53. The second mortgage was originally made in connection with the purchase of the Fox property.The District Court concluded that the husband was obligated topay the $10,000 plus interest under theproperty settlement agreement; that the debtwas not satisfied by his transfer of the house to the McCartys; that the wife's payment of $15,000 to the McCartys was a reasonable sum and that that payment was legally owed by the husband; that because the house was Ralph's, the second mortgage was the obligationofthehusband;and that thewife's payment of the secondmortgage was the payment of an obligation owed by the husband. The court concluded that the husband owed thewife $24,064.03. Thehusband appeals.

Did the District Court err in concluding that the original debt of $10,000 in connection with the motel purchase was not satisfied by the transfer of the house by the husband to the McCartys? Both parties agreed that the husband originally owed the McCartys $10,000. When Ralph was unable to pay that obligation,he agreed toquitclaim the house to theMcCartys. He also agreed that if a deficiency resulted from the sale, the McCartys could proceed against him for a deficiency judgment. The husband argues that the transfer of the house amounted to an accord and satisfaction. He cites Hale 

### v. Belgrade Co. (1925), 75 Mont. 99, 242 

### P. 425. 

### In Hale, the Court concluded that the conveyanceof the realproperty was full consideration for the antecedent debt and was unconditionally accepted as a full satisfactionof the debt with nothing remaining to be done. That case is clearly distinguishable from the present case because the husba-nd agreed with the McCartys in writing that if there was adeficiency after the house sale,he remained responsible for the deficiency. It is clear that the agreement did not constitute an accord as defined in S 28-1-1401,MCA. We conclude there is substantial evidence to support the factual determinationby the court that the originaldebt owing to the McCartys was not satisfied by the husband's transfer of the house to them. I1 Did the District Court err in concluding that the payment of $15,000by the wife to the McCartys was reasonable a.nd that the payment of $15,000 was legally owed by the husband? The husband attempts to argue that the wife's payment of $15,000 to the McCartys was not a reasonable sum. There is substantialevidence in the record to support the District Court's conclusion that the $15,000 was a reasonable sum in settlement of the total balancedue. The husband attempts to reargue that the $1.5,000was not actually his obligationbecause the transferof thehouse was in full satisfaction of his obligation owing to the McCartys. There is substantial evidence in the record to support the District Court's conclusion that the $15,000was an obligation legally owed by the husband. We affirm these conclusions of the District Court. 111 Did the District Court err in concluding that the secondmortgage on the housewas thehusband's obligationand that the wife in fact paid $11,255.63 to satisfy that obligation? Ralph argues that under the terms of the dissolution decree, the house became his and all interest on the part ofthewife terminated. He furtherargues that when he conveyed the house to the McCartys, it thenbecame theMcCartys' house and his interest and obligations were terminated. In turn, when thewife accepted adeed from the McCartys,he no longer had any legal interest in the house and therefore should not be required to make any payments in connection with the house.The District Court found that the wife asked the husband topay the debt owing to theMcCartys,but he did not do so because he considered the obligation to have been satisfied. The District Court further found that the McCartys did not want the house and transferred it to the wife in connection with the settlement of the amount due to them. The District Court correctly concluded that the house was the husband's property under the divorce and property settlement agreement, and that the obligation owing on the secondmortqasewas the husband'sobligation. The husband then argues that the wife did not pay the second mortgage but only allowed it to be paid through the sale proceeds. Again the District Court correctly concluded that the effect of the salewas to pay $11,255.63 to satisfy the second mortgage, which was an obligation owed by the husband under terms of the dissolutiondecree. We affirm the determination of the District Court in this regard. IV Did the District Court err in granting the wife a credit formaterial and labor for remodeling the house? The record contains substantial evidence to support the conclusionby the District Court that the wife should receive credit for the amount of material and labor which sheexpended for the remodeling of the house. 

### We affirm the conclusionof the DistrictCourt.

Did the District Court err in awarding the wife

In arguing against the judgment, the husband restates the same arguments previously considered. The record contains substantial evidence to support the District Court. The wife concedes there was one error in computation. The District Court improperly includ.ed$328.97 in the $24,064.03 judgment. We therefore instruct theDistrictCourt to reduce the judgmentby $328.97. The case is remanded to the District Court with instructionsto enter an amended judgment for thewife in the amountof $23,735.06.

We concur:

hie£Justice