                                                No.        85-109

                I N THE SUPREME COURT O F THE STATE O MONTANA
                                                     F

                                                          1985




KAY HUNT,

                 P l a i n t i f f and R e s p o n d e n t ,

         -vs-

HAROLD RALPH H U N T ,

                 Defendant and A p p e l l a n t .




APPEAL FROM:     D i s t r i c t Court of t h e T h i r t e e n 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 County o f Y e l l o w s t o n e ,
                 The H o n o r a b l e D i a n e G . B a r z , J u d g e p r e s i d i n g .


COUNSEL O RECORD:
         F


         For Appellant:

                 A.   L . C r a d d o c k , R e d Lod-gel Montana


         For Respondent:

                  James P. Murphy, B i l l i n g s , Montana




                                                          S u b m i t t e d on B r i e f s :   Aug.   22,   1985

                                                                                  Decided:     December 1 8 ,   1385



Filed:




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Mr. Justice Fred J. Weber delivered the Opinion of the Court.


        The Yellowstone County District Court held that Harold
Ralph Hunt (husband) owed Kay Hunt (wife) $24,064.03, which
arose   out    of    an   obligation under      a
                                                .    property     settlement
agreement      and   divorce    decree     entered   in   1981.     Husband
appeals.      We affirm.
        The issues are:
        1.    Did the District Court err in concluding that the
original      debt   of    $10,000   in    connection     with    the   motel
purchase was not satisfied by the transfer of the house by
the husband to the McCartys?
        2.    Did the District Court err in concluding that the

payment of $15,000 by the wife to the McCartys was reasonable
and that the payment of $15,000 was legally owed by the
husband?
        3.    Did the District Court err in concluding that the
second mortgage on the house was the husband's obligation,
and that the wife paid $11,255.63 to satisfy that obligation?
        4.    Did the District Court err in granting the wife a
credit for material and labor for remodeling the house?
        5.    Did the District Court err in awarding the wife
$24,064.03?
        Kay   and Ralph      Hunt were divorced in October              1981.
During their marriage, the parties purchased a house subject
to a purchase money trust indenture.            They also purchased by
separate contracts for deed a motel property and a rural
building lot (Fox property).              IJnder the motel contract for
deed, a payment of $10,000 was due to the McCartys, the
sellers of the motel.          Under the divorce property settlement
agreement, the wife was awarded the motel property and the
husband was awarded the house and the Fox property.                     The
parties     receiving      the    properties     were   to    assume    the
outstanding debts, with the exception that the $10,000 due to
the McCartvs on the motel property was to be paid by the
husband.      When he was unable to pay the $10,000 due, he
quitclaimed    to    the    McCartys   his     interest in the       house.
McCartys reserved the right to a deficiency judgment should
the house sell for less than the debt.             The husband testified

that he considered the obligation due McCartys to have been
satisfied in full by the transfer.
      In October       1983, the wife sold the motel property.
Prior to the sale, she was required to obtain the McCartys'
consent to the sale.          She testified the McCartys would not
give their consent to the sale of the motel property without
payment in cash.           The wife asked the husband to pay the
amount demanded by the McCartys.             He did not do so because
he claimed the original obligation was satisfied.                      As a
result, the wife negotiated an arrangement with McCartys to
pay them $15,000 in two installments from the proceeds of the

motel sale.     Their agreement specified that the payment of
$15,000     represented     the   balance    due   under     the   original
contract for deed of $10,000 plus interest and costs.
      As a part of the settlement, McCartys deeded the house
to the wife.        After completion of the motel sale, the wife
moved into the house and improved the house to make it more
marketable. In February 1984, the wife sold the house.                 Prior
to the sale, Kay Hunt paid Household Finance $563.                 From the
proceeds of the sale, she paid the second mortgage on the
house in the sum of $10,692.53.                The second mortgage was
originally made in connection with the purchase of the Fox
property.
       The    District     Court    concluded    that    the     husband   was
obligated to pay the $10,000 plus interest under the property
settlement agreement; that the debt was not satisfied by his
transfer     of   the    house to    the McCartys;       that the wife's
payment of $15,000 to the McCartys was a reasonable sum and
that that payment was         legally owed by           the husband; that
because the house was Ralph's, the second mortgage was the
obligation of the husband; and that the wife's payment of the
second mortgage was the payment of an obligation owed by the
husband.     The court concluded that the husband owed the wife
$24,064.03.       The husband appeals.


       Did   the District Court err             in concluding that the
original     debt   of    $10,000    in   connection      with    the     motel
purchase was not satisfied by the transfer of the house by
the husband to the McCartys?
       Both parties agreed that the husband originally owed
the McCartys $10,000.          When Ralph was unable to pay that
obligation, he agreed to quitclaim the house to the McCartys.
He also agreed that if a deficiency resulted from the sale,
the McCartys could proceed            against him       for a     deficiency
judgment.
       The   husband     argues     that the    transfer of        the    house
amounted to an accord and satisfaction.                  He cites Hale v.
Belgrade Co. (1925), 75 Mont. 99, 242 P. 425.                  In Hale, the
Court concluded that the conveyance of the real property was
full   consideration        for     the   antecedent      debt      and    was
unconditionally accepted as a full satisfaction of the debt
with nothing remaining to be done.                That case is clearly
distinguishable from the present case because the husba-nd
agreed with       the McCartys in writing that if there was a
deficiency after the house sale, he remained responsible for
the deficiency.           It is clear that the agreement did not
constitute an accord as defined in S 28-1-1401, MCA.
        We conclude there is substantial evidence to support
the factual determination by the court that the original debt
owing to the McCartys was not satisfied by the husband's
transfer of the house to them.
                                    I1

        Did   the District Court err          in concluding that the
payment of $15,000 by the wife to the McCartys was reasonable
a.nd that the payment of $15,000 was legally owed by the
husband?
        The husband attempts to argue that the wife's payment
of $15,000 to the McCartys was not a reasonable sum.                  There
is substantial evidence in the record to support the District
Court's conclusion that the $15,000 was a reasonable sum in
settlement of the total balance due.
        The husband attempts to reargue that the $1.5,000 was
not actually his obligation because the transfer of the house
was    in full satisfaction of his obligation owing to the
McCartys.       There is substantial evidence in the record to
support the District Court's conclusion that the $15,000 was
an obligation legally owed by the husband.
        We    affirm these conclusions of the District Court.
                                    111

        Did   the District Court err          in concluding that the
second mortgage on the house was the husband's obligation and
that    the   wife   in    fact   paid    $11,255.63   to   satisfy   that
obligation?
        Ralph argues that under the terms of the dissolution
decree, the house became his and all interest on the part of
the wife terminated.        He further argues that when he conveyed
the house to the McCartys, it then became the McCartys' house
and his interest and obligations were terminated.                    In turn,
when the wife accepted a deed from the McCartys, he no longer
had any legal interest in the house and therefore should not
be required to make any payments in connection with the
house.
         The   District    Court      found    that    the wife     asked   the
husband to pay the debt owing to the McCartys, but he did not
do   so because he considered the obligation to have been
satisfied.        The    District      Court    further     found   that    the
McCartys did not want the house and transferred it to the
wife in connection with the settlement of the amount due to
them.     The District Court correctly concluded that the house
was the husband's property under the divorce and property
settlement agreement, and that the obligation owing on the
second mortqase was the husband's obligation.
        The husband then argues that the wife did not pay the
second mortgage but only allowed it to be paid through the
sale proceeds.        Again the District Court correctly concluded
that the effect of the sale was to pay $11,255.63 to satisfy
the second mortgage, which was an obligation owed by the
husband under terms of the dissolution decree.                 We affirm the
determination of the District Court in this regard.
                                       IV

        Did the District Court err              in granting the wife a
credit for material and labor for remodeling the house?
        The record contains substantial evidence to support the
conclusion by the District Court that the wife should receive
credit    for   the     amount   of    material       and   labor which     she
expended for the remodeling of the house.                We affirm the
conclusion of the District Court.


      Did    the    District   Court    err     in   awarding   the   wife


      In arguing against the judgment, the husband restates
the   same   arguments     previously     considered.       The   record
contains substantial evidence to support the District Court.
The wife concedes there was one error in computation.                  The
District Court improperly includ.ed $328.97 in the $24,064.03
judgment.    We therefore instruct the District Court to reduce
the judgment by $328.97.
      The    case    is   remanded   to   the    District   Court     with
instructions to enter an amended judgment for the wife in the
amount of $23,735.06.




We concur:



 hie£ Justice
