                 I N THE SUPREME COURT OF THE STATE OF MONTANA



                                           No.    81-50


I N RE THE MARRIAGE OF:

   KAY J O Y PETERSON,

                               P e t i t i o n e r and A p p e l l a n t ,

           VS.

   RAYMOND P. PETERSON,

                               R e s p o n d e n t and R e s p o n d e n t .


                                             O R D E R


PER CURIAM:

           I T I S HEREBY ORDERED t h a t t h e o p i n i o n o f t h i s C o u r t d a t e d

October 22, 1981, be c o r r e c t e d i n t h e f o l l o w i n g manner.                    The

f o u r t h p a r a g r a p h o n p a g e 2 w h i c h b e g i n s " B o t h r a n c h e s were

s u b s t a n t i a l l y encumbered.      . ." s h o u l d     read as f o l l o w s :

           " B o t h r a n c h e s were s u b s t a n t i a l l y e n c u m b e r e d .
           The D i s t r i c t C o u r t f o u n d t h e home r a n c h to h a v e
           a n e g a t i v e v a l u e of $74,625 a f t e r d e d u c t i n g a l l
           l i a b i l i t i e s from its f a i r market v a l u e of
           $402,500.            The c o u r t f o u n d t h e f a i r m a r k e t v a l u e
           o f t h e A l b e e Ranch t o be $ 2 , 0 0 3 , 0 0 0 a n d t o t a l
           l i a b i l i t i e s to be $ 1 , 3 2 4 , 7 6 1 . 3 0 .  The c o u r t
           awarded t h e a p p e l l a n t t h e s t o c k sale p r o c e e d s ,
           f u r n i t u r e from t h e home r a n c h , a h o r s e , h o r s e
           t r a i l e r , j e w e l r y and o n e - h a l f o f $ 9 0 0 0 i n l e a s e
           f e e s owed t o t h e P e t e r s o n s f o r g r a z i n g r i g h t s o n
           t h e home r a n c h .        The r e s p o n d e n t was a w a r d e d t h e
           home r a n c h , c a t t l e v a l u e d a t $ 5 2 , 9 2 4 , t h r e e
           h o r s e s , farm machinery, p e r s o n a l p r o p e r t y ,
           $ 4 5 0 0 i n lease f e e s and $ 9 0 0 0 f r o m t h e sale o f
           a c a t e r p i l l a r tractor."
           DATED t h i s p d a y            o f November, 1 9 8 1 .




                                                 Justices
                                              No.    81-50

                 I N THE SUPREME C U T O THE STATE O M N A A
                                  O R   F           F OTN

                                                 1981



I N RE THE MARRIAGE OF

KAY J O Y PETERSON,

                                       P e t i t i o n e r and A p p e l l a n t ,

          and

RAYMOND P.       PETERSON,

                                       Respondent and Respondent.



Appeal from:          D i s t r i c t Court of t h e F i f t h J u d i c i a l D i s t r i c t ,
                      I n and f o r t h e c o u n t y o f Beaverhead.
                      Honorable Frank B l a i r , Judge p r e s i d i n g .

Counsel o f Record:

  For A p p e l l a n t :

         D a t s o p o u l o s , ~ M a c D o n a l d & L i n d , M i s s o u l a , Montana

  F o r Respondent:

         C o r e t t e , Smith, Pohlman & A l l e n , B u t t e , Montana



                                              Submitted on b r i e f s :             J u l y 30, 1981

                                                                  Decided:                at
Filed:
Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of
the Court.
          Kay Peterson appeals from a judgment of the Fifth
Judicial District, Beaverhead County, apportioning marital
assets, denying child support and maintenance, and awarding
custody of one child to the respondent.
          Kay and Raymond Peterson were married September 23,
1960.     They have three children:         two sons, Guy, age 18, and
Jade, age 17, and one daughter, Andrea, age 15.
          The appellant and respondent accumulated substantial
property during       their marriage.         They owned a 1400-acre
cattle ranch where they resided, livestock, farm machinery
and   other      personal property.         Prior   to   September   1980,
appellant      and   respondent each owned          ninety   shares which
represented       fifty percent of an         incorporated    12,000-acre
ranch near Wisdom, Montana, called the Albee Ranch.                    The
remaining fifty percent was owned by Mr. and Mrs. Tom Ford.
The   appellant      sold   her    ninety   shares to     the Fords    for
$230,000 before trial.            The respondent was not involved in
the sale and retained his ninety shares at the time of
trial .
          Both    ranches were      substantially     encumbered.      The
District Court found the home ranch to have a negative value
of $74,625 after deducting all liabilities from its fair
market value of $402,500.            The court found the fair market
value     of   the Albee Ranch        to be    $2,003,000 and        total
liabilities to be $1,324,761.30.             The court equally divided
the stock sale proceeds between the parties and ordered the
shares owned by the respondent sold and the proceeds equally
divided within thirty days or individually reissued in equal
amounts to the parties.            The home ranch, three horses and
farm machinery were awarded to the respondent.              Petitioner
was awarded furniture, jewelry, a horse and a horse trailer.
The remainder of the marital estate, which included cattle
valued at $52,924, was equally apportioned.
          The appellant raises the following issues in this
appeal:
          1.    Whether the District Court accurately determined
the net worth of the marital estate.
          2.    Whether the District Court abused its discretion
in apportioning the marital estate.
          3.    Whether the District Court erred in denying child
support and maintenance.
          4.    Whether the District Court erred in granting the
respondent custody of the minor daughter.
        We have carefully reviewed the record before us and
find the judgment must be reversed and the case remanded for
complete       findings   regarding   the   true   net   worth    of   the
marital estate and the awarding of child custody.                Further,
it is obvious that the District Court failed to adequately
follow the applicable statutory mandates and case law in
apportioning the marital estate and in denying child support
and maintenance.


                   Net Worth of the Marital Estate
          The appellant contends the District Court abused its
discretion first by omitting marital assets proven at trial
and   second     in its determination of the value of assets
included by the court.
          The first omission complained of arises from the sale
by respondent of 160 cattle to one Andrew Leep in December
1979.         The r e s p o n d e n t t e s t i f i e d     t h e t o t a l s a l e s p r i c e was

$ 7 6 , 0 0 0 which was a p p l i e d t o a p r o m i s s o r y n o t e t o S t a t e Bank

and     Trust      Company          of    Dillon,       Montana,          the     holder    of    the

security interest in the cattle.

            The a p p e l l a n t c o n t e n d s t h e s a l e s p r i c e was a c t u a l l y

$ 9 6 , 0 0 0 p a i d t o t h e r e s p o n d e n t i n two c h e c k s ; a downpayment

o f $ 2 0 , 0 0 0 made p a y a b l e t o t h e r e s p o n d e n t i n d i v i d u a l l y a n d a

second check of                $ 7 6 , 0 0 0 made j o i n t l y p a y a b l e t o r e s p o n d e n t

and     the      bank.          In       support      of     her        allegation        appellant

o f f e r e d t e s t i m o n y of a Department of L i v e s t o c k i n v e s t i g a t o r ,

the     canceled         $20,000          check,      copies       of    the     bank's    deposit

r e c o r d s and l o a n n o t a t i o n s , and t h e o f f i c i a l f i n d i n g s o f t h e

Montana Board of L i v e s t o c k i n v e s t i g a t i o n r e l a t i n g t o L e e p ' s

livestock d e a l e r ' s           license.          The D i s t r i c t C o u r t r e f u s e d t o

admit       the        Board     of      Livestock          findings.             Rule     803(8),

Mont . R . E v i d .

            The D i s t r i c t C o u r t d i d n o t make a f i n d i n g r e g a r d i n g

this      matter.           Appellant presented                    substantial            credible

evidence         i n support of             her     contention           that    the    respondent

received        $96,000         for      the cattle        and may h a v e a t t e m p t e d t o

conceal        the      $20,000          payment.          Respondent           first    testified

t h a t he c o u l d n o t remember t h e t o t a l s a l e s p r i c e b u t l a t e r

testified         if     he had          received      t h e second check f o r            $20,000

t h a t he d e p o s i t e d t h a t check w i t h t h e bank.                   Respondent d i d

not     present         any      documentary           evidence          in     support     of   his

contention.             Upon t h e e v i d e n c e f o u n d i n t h i s r e c o r d , we h o l d
t h e D i s t r i c t Court abused                i t s d i s c r e t i o n by    ignoring       this

contested          issue       in     its findings.             On       remand    the District

C o u r t m u s t make a f i n d i n g r e g a r d i n g t h i s c l a i m .

            Appellant          n e x t c o n t e n d s t h e D i s t r i c t C o u r t e r r e d by
failing to      include prepaid   grazing   fees   in the marital
estate.    The respondent paid a Washington landowner $18,000
in anticipation of pasturing one hundred cattle; however,
only forty-six cattle were actually pastured.         The testimony
of respondent supports the appellant's contention regarding
the unused prepaid fees.       Respondent testified the lessor
would rebate approximately $9,000 on demand.           No contrary
evidence appears in the record.       The District Court did not
include this asset in its findings and conclusions.                This
was    error.    On   remand the District Court must         add    the
prepaid fees to the valuation of the estate.
         The final omissions claimed as error are a $6,000
payment received by respondent for gravel taken from the
home rancn and a $1,400 mineral lease payment.             Receipt of
these payments was admitted by the respondent.         However, the
record does not contain the time they were received.               The
respondent testified he applied all the proceeds to expenses
of the ranch.     Appellant contends she is entitled to a full
accounting.
         In Lippert v. Lippert (1981),      -      Mont.       , 627
P.2d   1206, 1209, 38 St.Rep.     625, 629, we held, "spouses
possess mutual powers, obligations and interests which
endure until lawfully modified or terminated.         One of those
powers is the power to freely contract with others regarding
marital property.     Section 40-2-301, MCA."
         Absent modification either spouse is free to act with
marital property.      In this case the marital power to freely
contract was     lawfully modified.     On March      25,    1980, a
temporary order was granted by the District Court prohibit-
ing    the respondent from "transferring, encumbering, con-
cealing         or     otherwise          disposing             of     any       real      or    personal

p r o p e r t y of     [ s i c ] any i n t e r e s t t h e r e i n d u r i n g t h e p e n d e n c y

of t h i s proceeding."                 T h i s r e l i e f was i n a c c o r d a n c e w i t h o u r

statutes.            Section 40-4-106(2)(a),                      MCA.          A subsequent order

m o d i f y i n g t h e t e m p o r a r y o r d e r was e n t e r e d J u n e 2 , 1 9 8 0 .              The

modification               removed        the        total       prohibition              against        the

respondent but required t h e respondent                                    t o "account f o r a l l

monies      from       this      date      to    t h e d a t e of            the       hearing     on    the

P e t i t i o n for Dissolution."                     On     remand        the     respondent           must

d i s c l o s e when he r e c e i v e d          t h e d i s p u t e d payments.                  If    they

were     received          after        March        25,        1980,      or      remained        in    the

m a r i t a l e s t a t e a f t e r t h a t d a t e , t h e r e s p o n d e n t must a c c o u n t

t o the appellant f o r t h e i r disbursement.

           In    addition          to    omissions,              the    appellant claims the

D i s t r i c t C o u r t e r r e d i n i t s v a l u a t i o n o f t h e home r a n c h , t h e

A l b e e Ranch,          farm machinery,             and t h e number o f h o r s e s owned

by t h e p a r t i e s .

           At    trial       the p a r t i e s presented                   c o n f l i c t i n g evidence

regarding        t h e v a l u e of        t h e home r a n c h .                Appellant offered

the     testimony           and     appraisal               report          of     a     professional

certified            appraiser      who         concluded            the     value        of    the     home

r a n c h t o be $ 7 5 0 , 0 0 0 a s o f S e p t e m b e r 1 9 8 0 .                   The r e s p o n d e n t

offered       the      testimony          of     a    local          rancher       and     real     estate

buyer.          He     valued      the      ranch          at    $402,500.               The     District

Court,      without         stated        reasons,           accepted            the    lower     figure.

The    District           Court     is      free       to       follow       one        appraisal        and

r e j e c t another.          However, h e r e t h e r e i s a w i d e d i s p a r i t y i n

valuation,            and     we    are         unable          to     review          for      abuse     of

discretion           in    the     absence of              f i n d i n g s by      the     trial       court

supporting the valuation selected.
            Respondent           cites     Biegalke           v.     Biegalke           (1977),      172

Mont. 3 1 1 , 564 P.2d 9 8 7 , f o r t h e r u l e t h a t " t h e t r i e r o f t h e

f a c t s h a s t h e d i s c r e t i o n t o g i v e whatever w e i g h t he s e e s f i t

t o t h e t e s t i m o n y of t h e e x p e r t from 0 t o l o o % . "                 564 P.2d a t

990.       W think Bieqalke
            e                               is d i s t i n g u i s h a b l e .       In Biegalke,

the    parties        agreed       to     the    court         appointment of               a   single

appraiser,          stipulated t o his qualifications,                             and g e n e r a l l y

accepted        his     appraisal         without        objection.               On     appeal,       we

held the court properly exercised its discretion i n deter-

mining v a l u a t i o n .        In the        instant case the p a r t i e s secured

different           appraisers,           who    presented             widely          conflicting

valuations.            Upon r e v i e w of         the record,             we c a n n o t s a y t h e

District         Court          properly         exercised             its       discretion            in

selecting the value                 it did without                 some i n d i c a t i o n o f      its
reasons f o r doing s o .

           Appellant next contends t h e D i s t r i c t Court e r r e d                               in

its valuation              of    t h e Albee      Ranch.             Appellant's           appraiser

testified        that a rejected                offer     of       $2,600,000           from a pro-

s p e c t i v e b u y e r was a r e a s o n a b l e v a l u a t i o n .        The r e s p o n d e n t ' s

appraiser         testified         the     total       market         value       of     the    Albee

Ranch was $ 2 , 0 0 5 , 5 5 0 .          The D i s t r i c t C o u r t f o u n d " t h e m a r k e t

v a l u e o f t h a t r a n c h f r o m t h e t e s t i m o n y o f J a c k H i r s c h y t o be

i n t h e sum o f          $2,003,000."            It appears t h e D i s t r i c t Court

h a s made a c l e r i c a l        error       which      s h o u l d be        corrected.            In

a d d i t i o n , t h e c o u r t should s t a t e its reasons f o r determining

valuation.             A    rejected         offer       of        $2,600,000           might      well

i n d i c a t e t h e t r i a l c o u r t abused i t s d i s c r e t i o n i n a s s i g n i n g

a   value      of     only       $2,003,000.            However,          we     will      uphold        a

proper      e x e r c i s e of    d i s c r e t i o n by t h e t r i a l c o u r t and i f              a

r e a s o n a b l e e x p l a n a t i o n e x i s t s f o r a d o p t i n g t h e lower v a l u e ,
i t s h o u l d be s t a t e d .

            With r e g a r d t o a p p e l l a n t ' s          challenge t o the c o u r t ' s

f i n d i n g s of     v a l u a t i o n of      farm machinery           and t h e number            of

horses,         we    once      again      find        substantial         disparity           in    the

e v i d e n c e p r e s e n t e d by t h e p a r t i e s b u t no r e a s o n i n g g i v e n by

t h e c o u r t f o r i t s a d o p t i o n of t h e lower v a l u e s .                 On remand

t n e c o u r t s h o u l d e x p l a i n t h e r e a s o n s employed.



               A p p o r t i o n m e n t , M a i n t e n a n c e and C h i l d S u p p o r t

            True        net     worth         of      the      marital       estate        must       be

a c c u r a t e l y d e t e r m i n e d b e f o r e t h e i s s u e s of e q u i t a b l e appor-

tionment,            maintenance         and       child       support      can     be    resolved;

however, w e have i n c l u d e d a p p e l l a n t ' s c l a i m s r e g a r d i n g t h e s e

issues t o provide guidance t o the D i s t r i c t Court.

            Appellant contends the D i s t r i c t Court f a i l e d t o apply

t h e m a n d a t e s of      s e c t i o n 40-4-202,           MCA,     i n t h e d i v i s i o n of

the marital property.                      W agree.
                                            e                    The d e t e r m i n a t i o n s made

m u s t be m e a s u r e d a g a i n s t t h e s t a t u t e .          I n apportioning the

m a r i t a l e s t a t e t h e D i s t r i c t C o u r t must f o l l o w t h e r e q u i r e -

m e n t s of     s e c t i o n 40-4-202(1),             MCA,    and o u r c a s e l a w .       Smith

v . Smith ( 1 9 8 1 ) ,        - Mont.                    ,    622 P.2d      1 0 2 2 , 38 S t . R e p .

146; T e f f t v.         Tefft       (1981),         - Mont .               ,   628 P.2d       1094,

38 S t . K e p .     837.       I n deciding t h e i s s u e of maintenance,                         the

c o u r t m u s t f o l l o w t h e g u i d e l i n e s f o u n d i n s e c t i o n 40-4-203,

MCA.       Bowman v .         Bowman        (1981),                Mont.                 - P.2d
       ,   38 S t . R e p .    1515.        F i n a l l y , t h e i s s u e of c h i l d s u p p o r t

m u s t be d e t e r m i n e d i n a c c o r d a n c e w i t h s e c t i o n 40-4-204,              MCA.

The    District          Court must,             at     the    very     least,      consider         and

apply      the       enumerated         statutory             factors     which      control         the

e x e r c i s e of i t s d i s c r e t i o n .        T h i s was n o t d o n e i n t h i s c a s e .
                          Child Custody
       The final issue we can properly review at this time
is the challenge to the custody award.      In accordance with
an agreement of the parties, the District Court interviewed
the minor children to determine their custodial preferences.
In awarding custody the District Court made no specific
findings.    Appellant contends the award should be reversed
because of such failure, citing section 40-4-212, MCA; In Re
Marriage of Kaasa (1979),   - Mont .       ,   591 P.2d 1110, 36
St.Rep. 425; and In Re Marriage of Kramer (1978), 177 Mont.
61, 580 P.2d 439.     We agree and hold the custody award was
deficient for failure to make proper findings.
       In summary we hold the District Court did not find
the true net worth of the marital estate and inadequately
considered   the   statutes controlling   apportionment, main-
tenance, child support and child custody awards.      This cause
is reversed and remanded for further proceedings consistent




We concur:



d h i e f Justice
