                                       Z o 82-203
                                        J.
                     IN THE SUPREPIE COULPT OF TIIE STATE OF I O i T P A
                                                              l'JAJ

                                           1983

IN RE THE MARRIAGE OF DELBERT HENRY WITBART,
                             Petitioner,
         -vs-
LaVERNA MAE WITBART ,
                                       Respondent and Appellant.
-----------------
ALLEN B. HOUSTON,
                                       Plaintiff and Respondent,
              -vs-
DELBERT HENRY WITBART a/k/a DCLBERT (DEI,) 13. WITBART, &
LaVERNA MAE WITBART,
                             Defendants and. Appellants.
------------------
DEL     WITBA3T, d/b/a ACADEMY ENGINEERL!.JG CONSTRUCTIOIJ,
      11.
                              Plaintiff,
          -vs-
HARLAIi3 E. BAUER & MARGARET E. BAUEX,
                              Defendants and Respondents.
------------------
CLARK BROTHERS CONTRACTORS, a Mont corp. ,  .
                             Plaintiff and Respondent,
         -vs-
EARLAND E. BAUER, MARGARET E. BAUER, & DEL           11.   SJITBART, d/b/a
ACADEMY ENGINEERING CONSTRUCTION,
                             Defendants.
---" - ----- - ----
   ----
WESTERN EQUIPMENT CO. ,
                                       Plaintiff and Respondent,

DELBERT HENRY WITEART         &   LaVERrJA MAE WITBART,
                                        Defendants and Appellants.


Appeal from:         District Court of the Fourth Judicial District,
                     In and for the County of Ravalli, The Honorable
                     James B. Wheelis, Judge presiding.
Counsel of Record:
            For Appellant:
                     Cannon & Sheehy; Edmund Sheehy, Jr. argued, Eelena,
                     Montana (LaVerna 7Vitbart)
            For Respondents:
                     Richard A. Weber argued, Hamilton, Montana (Western
                     Equipment)
                     Gail B. Goheen argued, Ranilton, Montana (Houston)
                     John D. Greef argued, Hamilton, illontana (Bowers)
                     Larry R. Meyer argued, Stevensville, Montana (Clark
                     Brothers)
                                            -                                -
                                       Submitted:   May 5, 1983
                                         Decided:   June 27, 1983

Filed:       JUN271983
     Mr. Justice Frank B. Morrison, Jr. delivered the Opinion
of the Court.
     This is an appeal of the January 14, 1982, judgment and
February 17, 1982, amended judgment of the Fourth Judicial
District Court distributing Del Witbart's award of $26,677.47
and interest from his action to foreclose a mechanic's lien
against Harland and Margaret Bauer.
     On April     10, 1979, Harland     and Margaret Bauer, and
Delbert Witbart     entered   into   a written   contract wherein

Delbert agreed to construct a road for the Bauers.        Del then
entered into a contract with Clark Brothers Construction for
heavy equipment to be used in buiiding the road.         A dispute
later arose between Bauers and Witbart.          Bauers refused to
pay Witbart for building the road.      Therefore, Witbart filed
a mechanic's lien against Bauers on June 29, 1979, Cause No.
DV 79-385.    Clark also filed a mechanic's lien against Bauers
on July 2, 1979.     Bauers subsequently posted a bond in lieu
of Clark's lien.
    On July 9, 1981, judgment was entered against Bauers and
in favor of Witbart in the amount of $26,677.47.       Witbart had
been assigning portions of his interest in the prospective

judgment to several individuals (as discussed below).          The
$26,677.47 was ordered retained by the Clerk of the Court
pending notification of the assignees.
     LaVerna and Delbert Witbart were divorced in the spring
of 1980.     The uncontested dissolution decree incorporated a
separation agreement signed by the parties on March 27, 1980.
The agreement included no provision for the maintenance or
support of LaVerna.       Rather, it stated that all        family
obligations incurred by the parties had been fully determined
and discharged.
      The agreement further provided that LaVerna would convey
to Delbert by contract for deed her one-half interest in the
parties1 home.        The home was purchased the same month the
separation agreement was entered into, March 1980.            LaVernals
interest in the home at that time was negligible.
      Finally, the agreement provided under the heading "Real
Property", that Delbert would pay LaVerna $25,000.00 and that
if Delbert received sufficient money in the Bauer mechanic's
lien foreclosure suit, he would remit to LaVerna the money

received, to the extent necessary to pay any balance of the
$25,000.00 remaining due.        At that time, Delbert anticipated
receiving at     least $75,000.00      from the Bauers.        Delbert
testified that he was otherwise insolvent at the time he
entered into the agreement.
      Allen Houston loaned Delbert approximately $10,000.00 on
August 24, 1978, to be used as down payment for the house. On
July 28, 1980, Delbert assigned $7,473.18 of his interest in
the prospective Bauer mechanic's lien judgment to Houston for
security.     On September 22, 1980, Delbert assigned a part of
his   interest   in    the    same prospective    judgment to    Clark
Construction for $9,275.82 of the $15,087.82 owed Clark by
Delbert and Bauers.          Finally, on April 27, 1982, Delbert
assigned     $5,616.35   of    his   interest    in   the   prospective
judgment to Western Equipment Company.
      On July 20, 1981, LaVerna filed a motion for payment,
out of the Witbart-Bauer judgment fund, of monies allegedly
owed by     Delbert to LaVerna pursuant to their             separation
agreement.     Delbert's creditors contested LaVernals interest
in the judgment fund, alleging that the agreement on which it
is based is fraudulent.        The District Court thereafter merged
all the claims to the judgment fund into one action.
       A hearing was held August 13, 1982, to determine the
proper distribution of the $26,677.47 actually received by
Witbart from the Bauer judgment.              An order was issued January
1-4,   1982, completely annulling, as a fraudulent conveyance
pursuant to section 31-2-311, MCA, Delbert's promise in the
Witbart      separation    agreement        to   pay     LaVerna     $25,000.00.
LaVerna's interest in the Bauer judgment fund was thereby
rendered void.
       First priority to the fund was awarded Allen Houston in
the amount of $7,473.18, plus interest at the rate of 163%
per annum from July 25, 1980, and reasonable attorney's fees.
Western Equipment Company was awarded $5,616.35, plus 10%
interest per annum from the date of judgment and costs.
Clark was awarded no interest in the judgment fund.                        Rather,
Clark was required to resort to the $15,087.82 Bauer lien
bond for payment.
       On   motion    by   Bauers,      the      trial     court    amended   the
judgment     on   February      17,    1982,      foreclosed       Clark's    lien
against Bauers and permitted Clark to collect $9,275.82 from
the judgment fund, plus interest at the rate of 10% per annum
from the date of judgment.            Clark was granted second priority
to the fund, before Western Equipment Company.
       LaVerna Witbart       now      appeals     the February        17, 1982,
amended judgment and presents this Court with at least five
issues      for our   review.         Our disposition of            this appeal
renders      consideration      of    all     but    one    of     those    issues
unnecessary.
       The trial judge considered the separation agreement to
be     a   conveyance.     He      found    no      fair   consideration      for
Delbert's obligation to pay LaVerna $25,000.00.                       Delbert's
promise was therefore annulled, pursuant to section 31-2-311,
MCA, a section of the Montana Uniform Fraudulent Conveyances
Act.         Any     interest    LaVerna     might   have     had     in     the
Witbart-Bauer judgment fund was extinguished.
       The    agreement was       not    a   conveyance.      A   separation
agreement incorporated into a divorce decree is enforceable
only as a judgment.        Lawrence v. Lawrence (1982),                    Mont.

-I
         ,
        - 642 P.2d 1043, 1049, 39 St.Rep. 548, 556.                            A
judgment can not be attacked or reopened for lack of fair
consideration.        It can be reopened if obtained through fraud.
See Rule 60(b), M.R.Civ.P.,             which lists the six reasons for
reopening a judgment.
       Section 40-4-208(3), MCA, states in pertinent part:
       "(3) The provisions as to property disposition may
       not be revoked or modified by a court, except:
       (a)   * * *
       (b) if the court finds the existence of conditions
       that justify the reopening of a judgment under the
       laws of this state." (emphasis supplied)
We   have    construed this section as giving a trial court
jurisdiction to determine whether               fraud was committed in
obtaining      a   property     distribution agreement.             Hopper v.
Hopper (1979), 183 Mont. 543, 601 P.2d 29.                 Pilati v. Pilati
(1979), 181 Mont. 182, 592 P.2d 1374.             If fraud is found, the
divorce decree may be reopened and a more equitable property
distribution made.        Pilati, 181 Mont. at p. 186, 592 P.2d at


       The    trial     judge     improperly      applied     the     Uniform
Fraudulent Conveyances Act to this case.             We therefore remand
this case to District Court for a new trial on the issue of
whether or not fraud was committed upon the court at the time
the Witbart separation agreement was approved. "[Ilt has long
been the rule in Montana that a court of equity has inherent
power, independent of statute, to grant relief from judgments
gained by fraud. "       Selway v. Burns, Estate of Burles (1967),
150 Mont. 1, 8, 429 P.2d 640, 644.                 A finding of fraud would
justify reopening the judgment granting LaVerna $25,000.00.
Otherwise, LaVerna is entitled                   to the       $25,000.00      and    is
entitled to          first priority       to the Witbart-Bauer judgment
fund, per the separation agreement.
      One       of    the   issues      raised    by    LaVerna       will     become
pertinent on remand if the trial judge finds fraud on the
court     and    denies       LaVernals claim          to    $25,000.00       of    the
Witbart-Bauer judgment fund:                 Did the District Court err by

amending        its      judgment       and      allowing          Clark     Brothers
Construction, Inc., to receive funds from the Witbart-Bauer
judgment fund?          We find no error.
      Clark          Brothers    Construction          has    continually          been
considered       a    party     to   this action.            Delbert assigned         a
portion of his interest in the Witbart-Bauer judgment fund to
Clark Brothers on September 22, 1980.                        The District Court
order of August 6, 1981, states in part:
      "2.   A hearing on the distribution of assets now
      held by the Clerk of Court in DV-79-385 [the
      Witbart-Bauer judgment fund] will be held at 1:30
      p.m. on August 13, 1981, and all parties in any of
      the above-entitled causes may and shall appear to
      present evidence at that time relating to the
      merits of their claims or tending to disprove the
      claims of other parties."

One   of    the       "above-entitled         causes"       was    Clark     Brothers
Construction v.          Harland E.       Bauer, Margaret E.               Bauer    and
Delbert     Witbart,        d/b/a    Academy     Engineering         Construction.
Clearly, the District Court considered Clark Brothers to be
one   of    the       parties    with    a     potential          interest    in    the
Witbart-Bauer          jugdment fund.         LaVerna cannot now, for the
first time on           appeal, raise the          issue of whether Clark
Brothers was entitled to claim any of the judgment fund
monies.     Green v. Green (1978), 176 Mont. 532, 536, 579 P.2d
        Furthermore,          the   District      Court      did     not     abuse    its
discretion in allowing Clark Brothers to collect from the
judgment fund rather than the Bauer bond fund.
        Section 31-2-105, MCA, states:
     "Relative rights of different creditors. Where a
     creditor is entitled to resort to each of several
     funds for the satisfaction of his claim and another
     person has an interest in or is entitled as a
     creditor to resort to some but not all of them, the
     latter may require the former to seek satisfaction
     from those funds to which the latter has no such
     claim, so far as it can be done without impairing
     the right of the former to complete satisfaction
     -
     and without doing injustice - third persons."
                                    to
     (emphasis supplied)
The District Court found that to require Clark Brothers to
resort to the Bauer bond fund for payment would do injustice
to the Bauers.            They would then be required to make double
payment for the use of Clark Brother's equipment:                            first, to
Delbert through the Witbart-Bauer judgment and second, to
Clark     Brothers    through           the    Bauer   bond     fund.         There    is
substantial credible evidence to support that finding of the
trial court.
     Contrary        to       LaVerna's        contentions,     our     decision       in
General Electric Supply Co. v. Montana Automobile Association

(19801,          Mont     .         ,   617 P.2d 136, 37 St.Rep. 1715 does
not permit a double payment in this instance.                         In that case,
General Electric Supply did not have two or more funds from
which     to   choose         for    satisfaction       of     its    claim.         It's
immediate debtor, whose position would be similar to that of
Delbert's in the instant case, was bankrupt.                               If General
Electric Supply had not been allowed to seek satisfaction
from the Montana Automobile Association, it would have gone
unpaid.        That   is       not      the    case    here.         Clark    Brothers
Construction will not go unpaid if it is not allowed to seek
satisfaction from Bauers.                     They may still receive payment
from Delbert Witbart.
     We remand this case for a new trial consistent with the




We concur:


Chief Justice




Justices




sitting in place of Mr. ~ u s t i c e
John C. Sheehy



Mr. Chief Justice Frank I. Haswell and Mr. Justice L. C.
Gulbrandson dissent and will file a written dissent later.
