No. 14211 

### INTHE SUPREMECOURTOF THE STATEOFMONTANA 1978

MAW;EKIS and 

### ROBFRTHAPP, PlaintiffsandAppllants,

-vsHARRYPIFER, Defendant and Respondent.

Appeal frm: District Courtof theEleventhJudicialDistrict, HonorableJamesM. Salansky,Judgepresiding. Counselof Record: ForAppellants: H. JamesOlesonargued, Kalispell, Montana ForRespondent: Warden, WalterskirchenandChristiansen,Kalispell,Montana FrederickF. Shemadargued, Kalispell,

### mntana McGarvey, LenceandHeberling,Kalispell,mntana

?Q72

> - Filed: -Mr. Justice John C. Sheehy delivered the Opinion of the Court.

The District Court, Flathead County, sitting without a jury, dissolved the parties' partnership and ordered an accounting and the assets distributed. Plaintiff,Marge Kis, appeals from the court's order denying her motion to amend the findingsof fact. In August 1973,Marge Kis, Robert Happ and Harry Pifer entered into a verbal partnership agreement for the purpose cf buying realproperty in Flathead County,Montana. The parties intended to realize aprofit by developing the property and reselling it. The agreement contemplated that each of the parties would contribute fundsperiodically and that such contributionswould be approxi~ately equal between the parties, as circumstancespermitted and the needs of the partnership dictated. It was further agreed that each of the parties would own a one-third interest in the properties purchased. The partnership purchased a tract of land in October, 1973,known forpurposes of this appeal as the "Meridian Road" property. Contributions for purchase of the Meridian Road property were made in cash in the following amounts: Marge Kis 

## -- $6,000.00; Robert Happ

## -- $4,000.00; Harry Pifer

## -- $8,000.00, of which the amount of $2,000.00was later refunded to him out of partnership funds. The total purchase price of the land was $35,000.00, soMarge Kis obtained a loan of $20,000.00 from her father to pay the remainder owing. This loan was later repaid out of the proceeds of a loan against the land, obtained from a commercial lending institution in Kalispell,Montana. Title to the property was taken in the name of Harry Pifer only, by mutual consent and for the convenienceof the parties. Consequently, Pifer signed the note and mortgage when the loan against the property was obtained.

### In 1974, the parties constructed eight storage units on the Meridian Road property. In 1975, itwas agreed that additional units were necessary aswell as two larger structures for rentalpurposes. Harry Pifer supervised the construction which was financed from the joint funds of the parties and $20,000.00 deposited by Marge Kis. During the spring of 1976,Harry Pifer assumed control of the Meridian Road property and advised plaintiffs that he considered himself its sole owner. Plaintiffs instituted this action July 14, 1976, seeking

a dissolution of the partnership and an accounting of its assets. The District Court entered its findings of fact, conclusionsof law,order and decree on October 24, 1977. Subsequently,plaintiff Marge Kis moved to amend findings of factNo. 20,which concerned the constructionof the additional storageunits and two larger structures. Finding of fact No. 20 states: "20. That such construction was financed initially from the joint funds of the parties and from $20,000 deposited by Marge Kis which represents additional consideration for the deed from DefendantHarry J. Pifer to her and which deed transferred his interest in the Lake View Arms property in Whitefish, Montana, said property not being involved in the partnership at hand.

### " The findingwas made on the basis of testimony by Harry Pifer. Plaintiff contended that the court should have believed her testimony on thematter, rather than Harry Pifer's,because his credibility had been impeached on another issue, while plaintiff's credibilityhad never been impeached. The District Court denied themotion and this appeal followed. 1. 

### Did the District Court improperly make finding of factNo. 20, since it had been agreed that the trialwould be in two phases 

## -- first, a determination of who owned the Meridian Road property, and then an accounting of partnershipproperty?2. If the finding of factwas properly made, did the District Court abuse its discretion by ruling in defendant's favor,after his credibility had been impeached on a separate matter? Plaintiff contends she understood that the trialwould be conducted in twophases. Specifically, the firstphase would be limited to deciding whether Harry Pifer or the partnership owned the Meridian Road property. In the second phase an accounting of partnershipmatters would take place. Plaintiff states shewithheld evidence relevant to the Meridian Road dispute because of this "understanding". We find that, because of developments in the course of the proceedings, plaintiff was fully aware that the District Courtwould be rriaking a finding concerning the nature of her $20,000.00 contribution. Count I1 of defendant's counterclaim, filed August 19, 1976, clearlyplaced the issue concerning the nature of plaintiff's $20,000.00 contribution before the court. Defendant'sprayer under Count I1 stated: "Thatthe plaintiff,Marge Kis, be required to accept the transfer of the defendant's equity in the Whitefish Arms property, as a full satisfaction of anymonies advanced by Marge Kis personally, and particularly, the sum of $20,000.00 for the improvement of the Meridian Road property;" Plaintiff moved to strike the count on the grounds that it

was redundant and immaterial to the dispute. Her notion was denied January 11, 1977. At this point plaintiff was on notice that the courtwould be deciding the issue. At the conclusion of the trialplaintiff offered a finding of fact on the precise issue she now contends she understood would be decided in a subsequentproceeding: 

### "XX. That such constructionwas financed initially from the joint funds of the parties and from a $20,000.00 loan made by Marge Kis to the joint operation of the parties which loan has never been repaid and is still outstanding."

(Page 6 of Proposed Findings of Fact and Conclusions of Law of Plaintiffs.)On October 25, 1977, the day after the District Court entered its findings of fact, conclusions of law, order and decree,plaintiff filed a document entitled, "Exceptions to findings of fact and motion to amend same." Specifically, plaintiff excepted to finding of factNo. 20, contending that her testimony should have been believed rather than the defendant's, and that the finding shculd have been made in her favor. She did not contend that the court shculd not have made 

### any finding on the subject, as she has in this Court, rather she contended the result of the finding was improper. Plaintiff's actions during the course of the trial demonstrate that shewas fully aware that the court would be resolving the issue concerning the nature of her $20,000.00 contribution. Alternatively,plaintiff contends the District Court abused its discretion by relying on defendant's testimony, rather than hers, to make finding of factNo. 20. The following dialogue between plaintiff Happ's counsel and defendant is offered to show that defendant's credibility

was impeached and that he should not have been believed on any point. "Q. And did anybody else put any money in at that time in connectionwith that purchase? 

### A. Yes,my father. "Q. And who and ~GW much, as you recall? A. My father lentme $20,000.00 And Marge

## -- "Q. Just a minute. Let's get to that now. You said your father lent you $20,000.00? A. That is correct. "Q. Did you give him a note for it? A. No.

### "Q. And was any note given to your father for it? A. Not tomy knowledge at that time.

"Q. Well, did you find out later that any note was given? A. Yes, Sir. "Q. Okay. And who gave that note? A. Marge did. "Q. So Marge in effect borrowed the money from your father on her note for $20,000.00? A. No. 

### Iborrowed themoney but she signed the note. 

### "Q. Were you here when your father testified last fall,when the poor man broke down and cried on the witness stand,and we had to take a recess,Mr. Pifer. When he stated that he loaned the money to Marge, he was dealing with Marge. Are you now saying that he was lying? A. No. Mr. Warden. "Q. Your own father? A. That 

### "Q. Answer yes or no. Answer the question as 

### I asked. 

### A. No, he is not lying. "Q. Then he loaned the money to Marge on Marge's note and that went into evidence at that time. It is in the Court file. A. Yes." The $20,000.00 referred to above is the contribution made in October 1973, for the purchase of the Meridian Road property, not the $20,000.00 which is the subject of finding of factNo. 20. "There is a general principle of law that where 

### awitness has testified falsely to somematerial matter in a case,his testimony in other respects may be disregarded unless it is corroborated by other proof 

# . . . In order for the principle to be operative, the false testimony must be upon a point material to the issue 

# . . . The principle or maxim above stated as to disregarding the testimony of a witness who has knowingly testified falsely on a material issue does not necessarilymean that the jury is required to reject the rest of the witness' testimony

# . . . The right and the duty of the jury to determine to what extent they believe or disbelieve the witness thus continue." 81Am.Jur.2d Witnesses 8669. To a similar effect, we stated in Batchoff v. Craney (1946),119Mont. 157, 172 P.2d 

### 308:

# ".

.. [Wlhileproof of falsity in one part of a witness' testimony, inconsistent statements at other times, contradictory evidence, and reputation may discredit the witness, such proof goes only to the credibility of the witness, of which the jury remains the sole judge, as well as the weight to be given thereto

# . . . [Allthoughthe jury may reject the false testimony and assume regarding the rest of it, an attitude of distrust, the jurorsmay render a verdict based upon the testimony of suchwitness if after examination they find it worthy of belief."

The District Court was the trier of fact in the instant

case. The dialogue offered by plaintiff was not essential to the issue which was resolved by finding of factNo. 20. Even assuming defendant was impeached on the earlier issue, the court was not bound to rule against him on every fact issue in the trial. We will not set aside findings of fact unless they are clearly erroneous and we will give due regard to the opportunity of the trial court to judge the credibility of the witnesses. Rule 52,P4ont.R.Civ.P. The decision of the District Court is affirmed. 

# ? Justice We Concur:

Mr. Justice John Conway Harrison dissenting: I

### dissent. 

# ea-. 4Q4www Justice