### No. 14728 IN THE SUPREME COURT OF THE STATE OF MONTANA 1979

IN RE THE MARRIAGE OF VERNA B. JACOBSON, Petitioner and Respondent,

-vsTHEODORE F. 

### JACOBSON, d~i);c~nNi

### Respondent and Resptxderrt.

Appeal from: District Court of the Third Judicial District, Honorable Robert J. Boyd, Judge presiding. Counsel of Record: For

## -~etibi&&

, I

### Poore,Roth, Robischon & 

### Robinson, Butte,Montana For Respondent: Corette, Smith, Dean, Pohlman & 

### Allen, Butte,Montana James J. Masar, Deer Lodge,Montana

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### Submitted on briefs: August 2, 1979 Decided:

## iJCI

- 

## 5

# fgj

ClerkMr. Justice Gene B. Daly delivered the Opinion of the Court.



### his 

### is an appeal from a judgment of the District Court of the Third Judicial Districtdissolving the marriage of Theodore and Verna Jacobson and distributing the marital property of the parties. The husband appeals from that portion of the decree affecting the property distribution. The parties were married inButte, Montana, on March 16, 1952. Atthe 

### timeof trial, Verna Jacobson was 47 years of age and Theodore Jacobson was 49. The parties have two children, a son aged 22 residing inAlaska, and another son aged 18who graduated from high school in 1978 and resides

on the family ranch near Deer Lodge, Montana, inPowell County. Ted Jacobson was raised on the ranch and his sole occupation has been ranching. Hisformal education ended in the ninth grade. Verna Jacobson 

### is 

### a high school graduate who worked 

### as a secretaryprior toher marriage toTed. In 1948 Ted and hisbrother formed a partnership to operate the ranch. In that year they leased a portion of the ranch from their father for the purpose of raising potatoes. In 1953the brothers and their wives leased the entire home ranch and bought some cattle from their father, and in 1959, they purchased the ranch on a contract for deed. The partnership continued until 1969. Thus, when the parties

### were married in 1952, Ted and his brother were already inthe process of taking over the operation of the ranch. The DistrictCourt found that "Ted Jacobson 

### was and is a hard-working and able rancher." Through his efforts and knowledge of the business, the value of the Jacobson ranch increased substantiallyboth during the 

### timeit was operated inpartnership with his brother and after the

### partnership terminated in 1969. Throughout the marriage of the parties, Ted did the outside work on the ranch. In addition to the usual ranch work he made substantial improvements to an existing house located on the ranch, and he and his brother later assisted in building a new house in which the parties resided. A significantpart of the increased value of the ranch can be attributed to the installation of

a lateral irrigation system by Ted and his brother in 1966 and the installation of a sprinkler irrigation system by Ted in 1975. For her part, Verna performed the duties of a ranch wife and homemaker for over 25 years. Although she did not participate in the outside work, she spent great amounts of time caring for her two sons, the elder of whom had heart problems discovered at an early age, and the younger,who

was found at an early age to have a seriousphysical ailment. She spent a considerable amount of time working with the younger son to assist him in completing school. Until 1969Verna boarded the hired hands, generally feeding them three meals a day in the family home. In addition to these contributions, she did the bookkeeping for the ranch after the partnership between Ted and his brother terminated in 1969,maintaining the ranch record books and accounts, keeping track of ranch income and expenses,paying the bills, paying the ranch help, keeping the records necessary for ranch income withholding, social security, and workers' compensation,and delivering this information to their accountant each year for the purposes of preparing income tax returns. She also occasionally drove to town to pick up ranch supplies.The DistrictCourt, after reciting the contributions to the marriage made by each of the parties, concluded that theparties had made equal contributions to the marital estate and that the wife had acquired a vested one-half interest inallproperty acquired by the parties during their marriage. "None of the property now owned by the parties was acquired directly or indirectly through inheritance or giftand the Court finds that the wife's contribution as

### a homemaker and mother, along with the husband's contribution indoing work on the ranch, 

### isentitled to equal weight and the Court finds thatMrs. Jacobson acquired a vested one-half (1/2) interest in the property accumulated by the parties during the marriage." (Emphasis supplied.) Pursuant tothis finding the 

### District Court's judgment entered on January 25, 1979, gives the husband the option to purchase the wife's interest in the marital property. The totalmarital property, consisting primarily of the family ranch, 

### was found tohave a value of $1,147,786. Within three months of the decree, the husband has the option to either pay tothe wife one-half of the total sum or topay 20 percent down with the balance payable inthirty equal annual installments with interest atthe 

### rate of 7 percent per annum. These installments are tobe secured by 

### a mortgage on allrealproperty. If the husband fails to exercise his option topurchase the wife's interest, the property 

### is tobe sold on themarket for cash at

### a price agreeable to the parties. If no buyers are secured, the property 

### is to be sold ata public sale within a further threemonths from the date of the decree. The appellant husband raises two issues on appeal: 1. Did the District Court abuse itsdiscretion and failtoequitably apportion the marital assetsby neglecting toconsider the more substantial contributions of the husbandtothe development and maintenance of the marital property? 

### 2. Did the 

### District Court abuse 

### its discretion in providing asan alternative

### a purchase by the husband of one-half of the parties' marital assets

### atan interestrate of 7percent per annum? Section 40-4-202, MCA, statesinrelevant part: "In a proceeding for dissolution of a marriage



# . .

# . the court

# .

# . . shall 

# .

# .. finally equitably apportion between the parties the property and assets belonging toeither orboth, however and whenever acquired and whether 

### title thereto 

### is inthe name of the husband orwife orboth. Inmaking apportionment the court shall consider the duration of themarriaqe and [other factors] 

### -



# . . . The court shall alsoconsider. 

# . 

# . - the contribution of a spouse asa homemaker or to 

### -- -- 

### -- the family unit." (Emphasis supplied.) 

### - - The standard for review of a DistrictCourt's disposition of marital assetsupon 

### a dissolution of marriage 

### is well settled: "A DistrictCourt has far-reaching discretion in resolving property divisions, and 

### itsjudgment 

### willnot be altered unless a clear abuse of discretion 

### is shown. Kaasa v. Kaasa (1979), Mont. 

## , 591P.2d 1110, 1113, 36 St.Rep. 425, 428; 

### Kramer v. Kramer (1978), Mont. I 580 P.2d 439, 35 St.Rep. 700; Eschenburg v. Eschenburg (1976), 171Mont. 247, 557 P.2d 1014. The 

### test for reviewing the 

### District Court's discretion 

### is: Did the DistrictCourt in the exer

### cise of itsdiscretion 

### act arbitrarilywithout employment of conscientious judgment, or exceed the bounds of reason inview of allthe 

### circumstances? Kuntz, 593 P.2d at43; Jorgensen, supra; 

### Kramer, supra; Zellv. Zell (1977), Mont. 

## , 570 P.2d 33, 34 St.Rep. 1070; Berthiaume v. Berthiaume (1977)

## , Mont. I 567 P.2d 1388, 34 St.Rep. 921." Aanenson v. Aanenson (1979), Mont. I P.2d


## , 36 St.Rep. 1525, 1528. The duty of the DistrictCourt 

### is toconsider the statutory 

### criteria and equitably apportion themarital assets. Each case must be looked atindividually with an eye to

### itsunique circumstances. Aanenson, supra; Jorgenson Jorgenson Mont.36 St.Rep. 233, 237; Cook v. Cook (1972), 159 Mont. 98, 104, 495 P.2d 591. "An equal division under normal conditions of property accumulated through joint efforts 

### is not regarded

asunreasonable." Cook, 159 Mont. at103, 495 P.2d at594, quoting Johnson v. Johnson (1960), 137 Mont. 

### 11, 17, 349 P.2d 310. See also Zellv. Zell (1977), Mont. 570 P.2d 33, 34 St.Rep. 1070; Roe v. Roe (1976), 171Mont. 79, 83, 556 P.2d 1246, 1248. In the present case the District Court detailed the respective contributions of the parties in

### its findings of fact. There 

### is substantial evidence inthe record to support the DistrictCourt's equal distribution asan equitable apportionment of the marital property. There was no abuse of discretionby the lower court, which followed the statutory mandate of section 40-4-202, MCA, to "consider 

# .

# . . the contribution of a spouse asa homemaker or to the family unit." Appellant's second contention 

### ismore troublesome. Appellant states that 

### it has always been the policy of the courts of this state that a farm or ranch should be kept intact and operated 

### as 

### a unit. Appellant argues that the option afforded tohim by the District Court topurchase his former wife's interest inthe family ranch by paying 20 percent down and thirtyannual installments at7percent interest 

### isnot an economically realistic alternative. He contends that the ranch does not generate sufficientincome to support such payments, that it 

### willhave tobe sold to satisfy the DistrictCourt decree, and thus, that it 

### willbe lost to the sons of the parties who 

### are opposed to its sale, particularly the younger son, who 

### isnow working on the ranch. It is alleged, therefore, that the 

### District Court abused 

### its discretion.It 

### isclear that a District Court may make an equitable distribution of the marital property and yet abuse 

### its discretion incarrying out the award. In Kruse v. Kruse (1978)

### , 

### -Mont. 

## , 586 P.2d 294, 298, 35 St.Rep. 1502, 1507, the trialcourt properly made an equal apportionment of the marital assets, but abused 

### its discretion in failing toconsider the assets attheir currentmarket value which resulted inthe wife receiving 

### less than her equal share. Montana cases have accepted the premise that 

### a ranch or farm should be kept intact and operated 

### as a unit. A policy tothat effect isreflected indecisions involving the disposition of farming and ranching property: 

### Kaasa 

### v. Kaasa (1979)

## , Mont. 

## , 591 P.2d 1110, 1113, 36 St.Rep. 425, 428; In 

### re Marriage of Brown (1978), Mont.



## , 587 P.2d 361, 35 St.Rep. 1733; Biegalke v. Biegalke (1977), 172Mont. 311, 564 P.2d 987; Hunnewell v. Hunnewell (1972), 160Mont. 125, 500 P.2d 1198, 1202. Biegalke involved facts 

### similar tothose inthe present

case. In referring to the District Court's property distribution whereby the husband was given the opportunity to purchase his former wife's marital interest inthe family farm by making a down payment and paying the remaining balance inannual installments, this Court stated, "[tlhe division 

### was based on the premise that the ranch be kept intact and operated." Biegalke, 172 Mont. at314. Likewise inHunnewell, where the couple moved onto the ranch which had been owned by the husband's father and where the husband had been a rancher allhis life, the court gave the husband the option to

### meetallbids topurchase his former wife's interest inthe marital estateby making a down payment and paying the remaining balance inannual installments, stating

### "[tlhe purpose of this provision is to permit [thehusband] to continue to ranch and farm the premises without being met with a sudden emergency to raise money, the Court being

aware that all the property ispresently mortgaged and such

an emergency demand might cause hardship." Hunnewell, 500 P.2d 1202. The District Court valued the marital estate, consisting primarily of the family ranch, at $1,147,786 and found thatVerna Jacobsonwas entitled to one-half of that property
as her marital share. Pursuant to this finding, the District Court's judgment gives Ted Jacobson the option to purchase Verna's interest in the marital property. Within three months of the decree, the husband must purchase her share by paying her one-half of the total 

### sum in cash, or exercise his option to pay her 20 percent down with the balance payable annually in 30 equal installmentswith interest at 

### 7 percent, the installments secured by a mortgage on the real property. Otherwise, the ranchwill be sold on the market

or at a public sale to generate cash to satisfyVerna's marital share. Translated to dollar amounts, the installmentoption entails annual installments of approximately $34,000. Appellant contends that this amount ispractically equivalent to the total annual cash income of the ranch before purchases of equipment are taken into consideration. He argues that after the purchase of necessary replacement equipment, annual cash income for the ranch has averaged about $16,000per year. Therefore, according to 

### appellant, the ranch does not generate sufficient income to support the installmentpayments thatwould be required under the purchase option given him by the District Court, and so the District Court allegedly abused its discretion.The DistrictCourt, while 

### it didmake extensive findings of fact concerning themarital assets and each party's contribution thereto, did notmake 

### a finding to the effect that 

### it would be financiallypossible for appellant to satisfy the judgment shortof selling the ranch. It 

### is, however, implicit inthe District Court's judgment that the court considered the alternatives in the decree tobe economically realistic considering the ranch's income-producing capacity and 

### its borrowing capacity. There 

### is sufficient evidence inthe record to support such a conclusion; therefore, there was no abuse of discretion. The evidence inthe record supporting the conclusion that the installment purchase option 

### is an economically realistic alternative 

### is as follows: 

### (1)the ranch 

### isunencumbered save for the DistrictCourt decree, from which the courtmay have inferred that 

### itsborrowing capacity 

### ishigh; (2) the husband's brother and former partner inthe ranch 

### is



### a rancher and 

### a banker who might be able toprocure a loan

or lend money for the purchase of the wife's interest; (3) there is

### a cash assetheld in trust by one of the attorneys for the wife in the amount of $33,792 

### less certain expenses, representing the balance of the saleof cattle inthe previous year; (4) the cash income of the ranch has averaged approximately $35,000 a year before equipment purchases, and $16,000 afterpurchases of equipment; and 

### (5) the parties' accountant testified that the maximum annual payment that an operator of the ranch could reasonably be expected topay outof ranch income topurchase an equity inthe ranch would be the total cash flow income of the ranch. 

### ~tmust be remembered that the primary right tobe considered indisposing of marital property is the right ofeach party toan equitable apportionment of the marital 

### assets. While 

### it 

### is the policy of the courts of this state toavoid splittingup a ranch or forcing 

### its salewhere there 

### isany reasonable alternative, thatpolicy, however commendable, cannot be used tooverride the wife's right to

an equitable share of the marital property. In the present case, the DistrictCourt gave the husband the option to purchase his former wife's share by paying 20 percent down and paying the remaining balance in annual installments over thirty years at7 percent interest. The wife 

### is 47 years of age. A payment schedule of more than thirty years would not allow her toreceive the equal

### marital share towhich she 

### is entitled within her lifeexpectancy. The 7 percent interest rate 

### isbelow thatcharged by commercial and governmental lending institutions, The case of In 

### re Marriage of Brown (1978) Mont. 

## , 587 P.2d 361, 367, 35 St.Rep. 1733, merely suggested that the DistrictCourt could order the remaining balance paid without interest. It did not say that the trialcourt could not allow interest, and the allowance of interest 

### lieswithin the court's sound discretion.The judgment of the DistrictCourt 

### s affirmed. 

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We concur: