Schnell v. Schnell

• Decision Date: 21 March 1984
• Docket Number: No. 10470,10470
• Citation: 346 N.W.2d 713
• Parties: Robert SCHNELL, also known as Robert D. Schnell, Plaintiff and Appellee, v. Joan G. SCHNELL, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 713

346 N.W.2d 713

Robert SCHNELL, also known as Robert D. Schnell, Plaintiff and Appellee, v. Joan G. SCHNELL, Defendant and Appellant.

Civ. No. 10470.

Supreme Court of North Dakota.

March 21, 1984.

Mackoff, Kellogg, Kirby & Kloster, Dickinson, for plaintiff and appellee; argued by John L. Sherman, Dickinson.

Zuger & Bucklin, Bismarck, for defendant and appellant; argued by Robert V. Bolinske, Bismarck.

SAND, Justice.

Joan G. Schnell appealed from a judgment granted in favor of her former husband, Robert D. Schnell, ordering the ranch property which the two hold as tenants in common be sold rather than partitioned in kind.

Robert and Joan Schnell were married in 1955. The same year they began a ranching partnership with Robert's father on a ranch in Adams County. In 1964 Robert and Joan purchased the ranch from Robert's father at a price near market value. In 1974 they were divorced, and two years later the court ordered that the ranch properties, both real and personal, be placed in a trust. The trust "terminated" in late 1979, after which Robert and Joan operated the ranch as a partnership until Robert, in December 1981, petitioned the court to have the ranch partitioned, resulting in the judgment from which Joan appealed.

The Schnell ranch contains 4,420 acres. Schnells also lease 1,600 acres, most of it contiguous. The ranch includes about 700 head of cattle, numerous pieces of machinery, and many buildings. The buildings include a sales barn, feed building, horse barn, machine shed, several pole barns, and three homes. The first home is an expansive ranch home in which the couple lived until their divorce. After the divorce, Joan remained in the home and Robert built a second, smaller home a short distance away. The third home is for the hired man.

The trial court found from the evidence presented that the value of each cotenant's share from a partition would be substantially less than the money each would receive from a sale of the whole. The court ordered that the property be sold and that the proceeds from the sale be equally divided between the parties.

The primary issue on appeal is whether or not the court erred in concluding that the ranch should be sold rather than partitioned in kind.

Our scope of review of a case tried without a jury is basically governed by the rule that findings of fact will not be set aside unless clearly erroneous. North Dakota Rule of Civil Procedure 52(a). A finding of fact is "clearly erroneous" when, even though there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been made. United States v. United States Gypsum Co., 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746 (1948); American Mutual Life Ins. Co. v. Jordan, 315 N.W.2d 290 (N.D.1982). However, this Court is not governed by Rule 52(a) if the trial court's findings are based upon an erroneous conception of the law. Diemert v. Johnson, 299 N.W.2d 546, 548 (N.D.1980). After reviewing the findings of fact, many of which can be labeled arguments or conclusions of law, and the memorandum decision, we conclude that the trial court's decision was premised upon an erroneous conception of the law on partition. The court primarily applied the provision "without great prejudice to the owners" to the position and interest of Robert without giving equal recognition to the position and interest of Joan, a tenant in common (partnership) with Robert. Furthermore, after considering all of the evidence we are convinced a mistake has been made.

Historically, an action for partition is in the nature of a chancery action, cognizable under equity powers. Knight v. Harrison, 43 N.D. 76, 174 N.W. 633, 636 (1919); Henkel v. Henkel, 282 Mich. 473, 276 N.W. 522, 523 (1937). Current statutory law provides that a partition is a matter of right when several cotenants are in possession of real property as tenants in common. North Dakota Century Code Sec. 32-16-01; Berg v. Kremers, 181 N.W.2d 730, 732 (N.D.1970). Section 32-16-01 provides:

"When several cotenants hold and are in possession of real or personal property as partners, joint tenants, or tenants in common, in which one or more of them have an estate or inheritance, or for life or lives, or for years, an action may be brought by one or more of such persons for a partition thereof according to the respective rights of the persons interested therein and for a sale of such property or a part thereof, if it appears that a partition cannot be made without great prejudice to the owners. Real and personal property may be partitioned in the same action." [Emphasis added.]

The test for determining whether real property should be sold or partitioned in kind is statutory. NDCC Sec. 32-16-12 provides:

"If it is alleged in the complaint and established by evidence, or if it appears by the evidence without such allegation in the complaint, to the satisfaction of the court, that the property, or any part of it, is so situated that partition cannot be made without great prejudice to the owners, the court may order a sale thereof. Otherwise, upon the making of requisite proof, it must order a partition according to the respective rights of the parties as ascertained by the court and appoint three referees therefor, and must designate the portion to remain undivided for the owners whose interests remain unknown or unascertained." [Emphasis added.]

The legislative intent of Secs. 32-16-01 and 32-16-12 is clear and is consistent with case law and statutory law in a majority of jurisdictions. The law favors partition in kind where it can be made without great prejudice to the parties. 68 C.J.S. Partition Sec. 125 (1950); Berg, supra at 731, Syll. p 3; Pigeon River Lumber Co. v. McDougall, 169 Minn. 83, 210 N.W. 850, 851 (1926). The burden of proving that partition in kind cannot be made without great prejudice is on the party demanding a sale. Berg, supra, at 733; Pigeon River, supra, at 851. Unless great prejudice is shown, a presumption prevails that partition in kind should be made. Berg, supra at 735. Forced sales are strongly disfavored. Richmond v. Dofflemyer, 105 Cal.App.3d 745, 757, 164 Cal.Rptr. 727, 733 (1980).

In determining if great prejudice would result from a partition, the question is not which alternative would provide optimal economic value or maximum functional use. The resultant parcels need not be the economic, functional or aesthetic equivalent of the original parcel. Rather, great prejudice exists when "the value of the share of each in case of a partition would be materially less than his share of the money equivalent that could probably be obtained from the whole." Berg, supra at 733. Thus, sale of land in partition should not be ordered unless it is necessary to protect the parties from "serious pecuniary injury." Ibid. This applies to both Joan and Robert, not just Robert. Furthermore, owelty, NDCC Sec. 32-16-41, may be employed in certain instances to bring about an equitable partition.

The trial court's decision is based principally upon a concern that a partition would destroy the "usefulness" and "efficiency" of the ranch. In so holding, the court noted that the pastures were "grouped to efficiently accommodate year-round grazing," that the pastures were "planned and balanced," and that partition may result in decreased animal carrying capacity. The court also expressed concern that new machinery, wells, buildings, and fencing would be required if the ranch was partitioned. The court concluded that the Schnell Ranch was a "model" ranch and that "By partitioning the ranch the efficiency and balance planned and learned ... would be lost."

While efficient agricultural management is a desirable objective, it is only one factor among several in an action for partition and sale. In determining if great prejudice would result by partition in kind, emphasis must also be placed upon the situation of the parties and their respective financial abilities, including the financial ability of one of the parties to purchase the property, the location and character of the property, and the size and utility of the respective shares. Berg, supra at 731, Syll. p 6; 68 C.J.S. Partition, supra, Sec. 127(d). Sentimental reasons, particularly in the preservation of a home, may also be considered, although they are subordinate to the pecuniary interests of the parties. Fike v. Sharer, 280 Or. 577, 571 P.2d 1252, 1254 (1977); 68 C.J.S. Partition, supra.

The situation of the parties in the instant case is significant and their respective financial abilities are dissimilar. Robert, 53 has a degree in animal husbandry. In addition to his holdings on the Schnell Ranch he is a member of a partnership that leases ranch land in Montana and South Dakota that contains about 1,500 cattle. Robert is also an accomplished auctioneer and was designated "World Champion Auctioneer" in 1967. Joan testified that Robert usually spent about two-thirds of each year away from the ranch with auctioneering duties.

Joan, 50, is employed by the United States Department of Agriculture and lives in Virginia. She stated that her position is a political appointment which she believes is temporary. Although Joan has a degree in fashion merchandising, the record does not reflect that she has ever been employed in that field. She has instead spent most of her adult life raising a family of four, developing and supervising the ranch, and learning the ranching business. She has no other particular job skills. Thus, in comparing the respective situation of the parties it appears that Robert's career opportunities are more diverse than Joan's.

The respective financial ability of the parties is also significant. Joan's financial worth is based almost exclusively on her interest in the ranch. Robert, in addition to his Schnell ranch interest and his South Dakota and Montana ranching operations, receives significant income from...