No. 14347 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

19 79 

IN THE MATTER OF THE ESTATE OF 

MAURICE D. MURPHY, Deceased. 

Appeal from: District Court of the Fifteenth Judicial District, 

Honorable M. James Sorte, Judge presiding. 

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Counsel of Record: 

For Appellant: 

Traynor and Hoversland, Scobey, Montana 

Kenneth W. Hoversland argued, Scobey, Montana 

Robert L. Stephens, Jr., Billings, Montana 

David B. Kinnard argued, Billings, Montana 

For Respondents: 

James Gardner argued, Dept. Labor, Helena, Montana 

James McCann argued, Wolf Point, Montana 

Earl C. Gross, Hardin, Montana 

James A. Torske, Hardin, Montana 

Kronmiller and Seykora, Hardin, Montana 

John M. Dietrich, Billings, Montana 

Douglas Freeman, Hardin, Montana 

Loren J. O'Toole, Plentywood, Montana 

Submitted: February 5, 1979 

Decided: m6 - 9 1979 

Filed: AuG - 3 1379 
Mr. Justice Daniel J. Shea delivered the Opinion of the 

Court. 

This is an appeal from a probate proceeding in the 

District Court, Daniels County. A number of Maurice D. 

Murphy's creditors have appealed from a June 1, 1978 order, 

which authorized the personal representative of Maurice 

Murphy's estate to take all cash and personal property in 

the personal representative's possession and deliver the 

same to respondent, Northeast Montana Production Credit 

Association of Wolf Point (hereafter PCA). 

Technically, this appeal only involves an order entered 

June 1, 1978; however, to understand why we must remand 

without a decision on the merits, it is necessary to briefly 

review the convoluted history of Maurice D. Murphy's estate. 

Maurice D. Murphy died testate on December 7, 1973. 

At the time of his death, Murphy was heavily in debt; his 

principal creditors were: (1) W. 3 D. Graham, et a1.-- 

$464,392.28--this balance was due under a contract for deed 

executed by the decedent prior to his death; (2) PCA-- 

$305,687.24--this was a secured debt incurred by decedent 

to finance his ranching operations; and (3) Citizenti State 

Bank of Scobey, Montana (hereafter Bank)--$72,667.75--this 

is an unsecured debt owed by decedent on a personal note 

to the Bank. Decedent also owed approximately $100,000 to 

other unsecured creditors. 

On December 20, 1973, Ralph Shiell was appointed 

personal representative of Maurice D. Murphy's estate. 

Shiell's first act was to apply for authorization to 

continue the decedents ranching business; at the same time, 

Shiell applied for authority to borrow $91,077 from PCA 

for the estate and to be allowed to secure such a loan by 

executing mortgages on the estate's livestock, equipment 
and feed. The District Court routinely granted all of 

Shiell's requests and specifically found that such action 

"is in the best interests of the estate." 

On February 26, 1974, after all of the money from the 

first loan had been expended, Ralph Shiell petitioned the 

District Court for authorization to borrow an additional 

$138,500 from PCA to enable Shiell to continue operating 

the Murphy ranch and to allow him to pay off certain creditors 

of the estate. This request was also routinely granted. 

Thus, during the first three months after his death, Maurice 

Murphy's estate became indebted to PCA for an additional 

$229,577 with all loans purportedly secured by mortgages on 

the estate's livestock, machinery and feed. 

On March 29, 1974, Ralph Shiell filed his notice of 

resignation with the District Court and requested that his 

accounts be approved and his responsibility to the estate 

terminated. A hearing on this matter was set for August 9, 

1974, and at that time Shiell's resignation was accepted, 

his accounts approved, and Gary Murphy, decedents son, 

was appointed to succeed Shiell as administrator. 

Gary Murphy administered the estate from August 9, 

1974 until September 20, 1976, the date he filed his 

resignation with the District Court. During his term as 

administrator, Murphy was authorized by the District Court 

to borrow the following sums from PCA: 

AMOUNT DATE SECURITY GIVEN 

September 26, 1974 Mortgage on livestock, 

machinery and feed 

March 13, 1975 Mortgages on livestock, 

machinery, feed - and 

real estate 

August 22, 1975 Mortgage on livestock, 

machinery and feed 
$ 18,000 October 30, 1975 Mortgage on livestock, 

machinery and feed 

$ 85,000 December 10, 1975 Mortgage on livestock, 

machinery and feed 

$ 25,000 March 10, 1976 Mortgage on livestock, 

- machinery and feed 

$336,767 TOTAL 

On March 29, 1976, Loren O'Toole, one of the attorneys 

for the estate, petitioned the District Court for authority 

to sell 1,017 head of estate cattle (all of the cattle were 

pledged as security for the various PCA loans). The authorization to sell was granted by the District Court and OIToole 

was able to sell the cattle to John Wycoff, James Wycoff, 

and Richard Redland for a consideration of $263,120. 

Thereafter, OIToole filed a second petition (August 9, 

1976b This petition asked the District Court to determine 

which creditors should receive payment from the funds held 

for the estate. OIToole's petition stated that the estate 

currently had $286,545 on hand, and that "with the exception 

of $22,500.00 all of the sums above came from the sale of 

cattle, which were mortgaged to the Production Credit 

Association of Wolf Point, Montana." 

The District Court set O'Toole's petition for hearing 

on September 3, 1976; however, because of various delays, 

the court did not hold the hearing until September 20, 1976. 

At that time, the court held an informal, unrecorded conference in the judge's chambers. Apparently, the parties 

attending the informal conference agreed to submit written 

briefs detailing their theories on how the $286,545 should 

be distributed. 

On November 22, 1976, after receiving a number of 

written briefs and after entertaining further arguments 
(also not recorded) the District Court entered the following 

order : 

"Payments from the estate of the above named 

decedent are ORDERED as follows and in this 

order of priority: 

"1. The contract for deed entered into on the 

10th day of July, 1973 by and between W. J. D. 

Graham and Ruth M. Graham, husband and wife; 

William S. Graham and Lavere C. Graham, husband 

and wife, as sellers, and Lalon Fladager and 

Daryl Fladager, and the assignment made thereunder; 

"2. Secured and unsecured obligations owing to 

the Production Credit Association, Wolf Point, 

Montana that existed as of the date of death 

and any advances made upon petition and approved 

by specific court order after the date of death; 

"3. Statutory Attorneys fees, and fees of the 

Personal Representatives, and Accountants' fees 

as determined by the Court; (Public policy compells 

that attorneys fees must receive a priority in 

estates of questionable solvency or insolvent 

estates would not be properly administered with 

the advice of counsel. If there are insufficient 

funds for full payment of Paragraphs 1, 2 and 3, 

then the payment as provided in Paragraphs 2 and 

3 will be pro-rata). 

"4. Extraordinary fees of the attorneys, accountants, 

and the personal representatives as determined by 

the Court; 

"5. Creditors as of the date of death; 

"6. Any claim of the second personal representative, Gary Murphy, for monies expended, and determined 

to be necessary and reasonable, for the preservation 

of the estate assets; 

"7. Beneficiaries under the terms of the Will or 

otherwise; and 

"8. Any other funds advanced by the Production 

Credit Association after this date, for purposes 

necessary for the preservation of the estate 

assets, and approved by an Order of Court, will 

be paid in accordance with Paragraph 2 of this 

Order, and subject only to the Graham contract 

referred to in Paragraph 1 and, if necessary, 

pro-rated as provided in Paragraph 3." 

Gary Murphy, a party designated to receive payment in 

no. 6 of the November 22, 1976 order, filed a petition for 

writ of supervisory control with this Court. This Court 

heard oral arguments on October 6, 1977, and later declined 

jurisdiction for the following reasons: 
"(1) This is a fragmented appeal without 

the necessary record to support a review. 

" (2) This matter comes to this Court on 

brief only. There is no evidence of a proper 

hearing in the District Court due to the 

absence of a transcript record. 

" (3) If a hearing was had, we cannot be 

sure that all interested parties were 

represented. 

"(4) We find no evidence in the court record 

of a determination of validity of the claims 

involved. 

"For these reasons the application of Petitioner 

Relator is dismissed without prejudice." Murphy 

v. District Court (1977) , Mont . , 571 

P.2d 803, 804, 34 St.Rep. 1365, 1366. 

From the time this Court issued its November 17, 1977 

decision until February 1, 1978, the District Court file 

reflects little activity the part of the Murphy estate 

administrators. The most activity we can discern occurred 

on February 1, 1978, when PCA filed a petition seeking an 

order directing the personal representative to pay over the 

estate assets in partial satisfaction of the PCA claim. A 

hearing on the PCA petition was held on March 1, 1978, in 

Wolf Point, Montana. A transcript of that proceeding was 

kept, and it indicates that the PCA, the Bank, Gary Murphy 

and the attorneys for the estate were present, and presented 

oral argument to the court. It also indicates that Douglas 

Freeman, attorney for the administrator, Erle C. Gross, had 

notice of the hearing, but was unable to attend due to bad 

weather. 

After hearing oral arguments, the District Court entered 

the following one page order on June 1, 1978: 

"Northeast Montana Production Credit Association 

having on the 31st day of January, 1978, filed 

its petition herein directing payment to it 

of $499,686.37 together with interest; and 

following hearing on said petition on March 1, 

1978; 
"IT IS HEREBY ORDERED, ADJUDGED AND DECREED 

that the personal representative is authorized 

and directed to take all cash and personal 

property now in his hands as belonging to 

decedent's estate and to deliver the same to 

Northeast Montana Production Credit Association 

to payment of its claim. Items of personal 

property may be sold and converted to cash 

prior to such delivery at the discretion of 

personal representative." 

Citizens State Bank of Scobey, a creditor with an 

ante mortem debt, filed a notice of appeal from the June 

1 order on June 8, 1978. The Bank claims it has first 

priority over all other estate claims, and therefore the 

District Court erred in awarding PCA first priority. 

The notices of appeal filed by Gary Murphy and the 

State Department of Labor do not appear in the record 

transmitted to this Court; however, the District Court Clerk 

has informed this Court that timely notices were filed on 

behalf of the Department and Murphy. Accordingly, we 

shall assume that Murphy and the Department have complied 

with Rule 4, M0nt.R.App.Civ.P. 

The Department and Murphy claim to be entitled to 

a pro rata share of the funds and personal property in the 

personal representative's possession. They allege their 

claims are costs of administration and are in the same class 

as PCA's claim. 

The June 1, 1978 order is an appealable order under 

Rule 1, M0nt.R.App.Civ.P. That rule specifically provides 

that "an order directing the delivery, transfer, or surrender 

of property" may be appealed by an aggrieved party. Thus, 

the parties are properly before this Court. 

Unfortunately, this Court is still not in a position 

to finally dispose of the matter on the merits. The order 

entered by the District Court states simply "that the 

personal representative is authorized and directed to take 
his 

all cash and personal property now in/hands . . . and 

to deliver the same to Northeast Montana Production Credit 

Association to (sic) payment to its claim." There is no 

memorandum opinion or other explanation of the basis for 

entry of the order. The parties and this Court are left 

to speculate as to why the District Court found PCA entitled 

to the proceeds in the possession of the personal representative. 

Briefs and oral arguments before this Court clearly assert 

that the parties are not certain which law the District Court 

judge applied (the old probate provisions or the provisions 

of the Uniform Probate Code), which claims are valid, and 

which classification was given to the various claims. As 

a result, this Court is not in a position to enter a binding 

decision on the merits. 

Although Rule 52, M0nt.R.Civ.P. is seldom used in 

probate proceedings, we feel that it must be applied to 

the present fact situation so that this Court will know 

precisely the questions presented for appellate review. 

We recently defined the underlying reasons for findings of 

fact and conclusions of law: 

"The purpose of requiring findings of fact 

is three-fold: 1) as an aid in the trial 

judge's process of adjudication; 2) for 

purposes of res judicata and estoppel by 

judgment; and 3) as an aid to the appellate 

court on review. 5A Moore's Federal Practice 

Yl52.06 [I] ." Marriage of Barron (1978), 

Mont . , 580 P.2d 936, 938, 35 St.Rep. 

891, 894. 

For purposes of this opinion, reason no. 3 is most 

important. As the record now stands, we can only speculate 

on the factors which went into the District Court's decision. 

The facts of this case require a remand to the District Court 

so that a proper order can be entered. The District Court 

is directed to enter findings and conclusions or a memorandum 

clarifying the order it entered June 1, 1978. 
This cause is remanded for action consistent with 

this opinion. 9+g-A 

We Concur: 

Chief Justice