FTR Farms v. Rist Farm , 305 Neb. 708 ( 2020 )


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    Nebraska Supreme Court Advance Sheets
    305 Nebraska Reports
    FTR FARMS v. RIST FARM
    Cite as 
    305 Neb. 708
    FTR Farms, Inc., a Nebraska corporation,
    appellee, v. Rist Farm, Inc., a Nebraska
    corporation, appellant, and Eugene
    Wesley Dowell and Mary L.
    Dowell, husband and wife,
    et al., appellees.
    ___ N.W.2d ___
    Filed May 1, 2020.     No. S-19-438.
    1. Partition: Equity: Appeal and Error. A partition action is an action in
    equity and is reviewable by an appellate court de novo on the record.
    2. Partition. The purpose of a partition action is to divide a jointly owned
    interest in real property so that each owner may enjoy and possess in
    severalty.
    3. ____. One of several tenants in common has an absolute right to a
    partition of their real estate, in the absence of an agreement to, or other
    impediments to, the contrary.
    4. ____. As between a partition in kind or sale of land for division, the
    courts will favor a partition in kind, since this does not disturb the exist-
    ing form of inheritance or compel a person to sell his property against
    his will, which, it has been said, should not be done except in cases of
    imperious necessity.
    5. ____. A sale in partition cannot be decreed merely to advance the inter-
    ests of one of the owners, but before ordering a sale, the court must
    judicially ascertain that the interests of all will be promoted.
    6. ____. The generally accepted test of whether a partition in kind would
    result in great prejudice to the owners is whether the value of the share
    of each in case of a partition would be materially less than the share of
    the money equivalent that could probably be obtained for the whole.
    7. ____. Owelty addresses a disparity in the value of partitioned parcels
    and is the payment of money required when property is not susceptible
    of division into exactly equal shares to make the portions of property
    respectively assigned to the cotenants of equal value.
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    8. Partition: Jurisdiction. A court acquiring jurisdiction of property for
    partition acquires complete jurisdiction of the property and affords
    complete justice to all parties in that action with respect to the sub-
    ject matter.
    9. Partition: Equity. In a partition in equity, the court does not act in a
    merely ministerial character, in obedience to the call of some or all of
    the parties, but administers relief in such manner as to do equal and
    exact justice as far as possible.
    10. Partition. In a partition in kind, where the premises are incapable of a
    fair division, the court has power to award a pecuniary compensation or
    charge upon the land.
    11. ____. Owelty is predicated upon a division. There can be no owelty in
    the absence of a division of property.
    12. Partition: Equity. Owelty should be rarely utilized and only when it is
    equitably necessary.
    13. Equity: Evidence: Appeal and Error. In an appeal of an equity action,
    where credible evidence is in conflict on a material question of fact, an
    appellate court considers and may give weight to the fact that the trial
    court heard and observed the witnesses and their manner of testifying,
    and accepted one version of the facts rather than another.
    14. Partition: Presumptions. While it is generally true that there is a pre-
    sumption in favor of partition in kind, it is likewise true that the charac-
    ter and location of the property, or the amount of the interest sought to
    be assigned, or both, may be such that it will be presumed that partition
    in kind cannot be made.
    Appeal from the District Court for Richardson County:
    Julie D. Smith, Judge. Affirmed and remanded for further
    proceedings.
    John Hahn, of Wolfe, Snowden, Hurd, Ahl, Sitzmann,
    Tannehill & Hahn, L.L.P., for appellant.
    Michael R. Dunn, of Halbert, Dunn & Halbert, L.L.C., for
    appellees Eugene Wesley Dowell et al.
    Jeffery W. Davis, of Smith, Schafer, Davis & Gaertig,
    L.L.C., for appellee FTR Farms, Inc.
    Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
    Papik, and Freudenberg, JJ.
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    FTR FARMS v. RIST FARM
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    Cassel, J.
    INTRODUCTION
    In this appeal from proceedings to partition real estate, the
    principal issue is whether partition in kind can be decreed using
    “owelty”—that is, a monetary payment to equalize values.
    Because the law has long favored partition in kind, it empow-
    ers a court of equity to use that device to accomplish full and
    complete justice. But the power should be invoked sparingly.
    Here, we are not persuaded that owelty would enable division
    in kind without great prejudice to the owners. We affirm the
    judgment and remand the cause for further proceedings.
    BACKGROUND
    Property and Owners
    FTR Farms, Inc., and Rist Farm, Inc., each own an undi-
    vided one-half interest in a 311-acre tract of farmland in
    Richardson County, Nebraska. A winding river—which the
    record identifies variously as the Nemaha River, Little Nemaha
    River, or Big Nemaha River—creates a natural divide through
    roughly the middle of the property.
    The river separates the property into two tracts: north and
    south. The north tract of the property is approximately 135
    acres. The south tract is approximately 176 acres. Both tracts
    have high quality soil, but the north tract’s soil is marginally
    better. A bridge connects both tracts of the property.
    In June 2011, FTR Farms and Rist Farm purchased the
    property from Eugene Wesley Dowell and Mary L. Dowell
    for $1,750,000. The buyers executed a promissory note to the
    Dowells for $1,312,500. The difference was paid at or before
    closing. The Dowells have a purchase money security interest
    secured by a deed of trust. Prior to the partition action, FTR
    Farms and Rist Farm each paid half of the annual payment on
    the promissory note.
    Partition Ownership
    In March 2017, FTR Farms filed a complaint for partition
    of the property, seeking partition by sale. It alleged that the
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    property could not be partitioned in kind according to their
    respective interests without prejudice to their rights. In Rist
    Farm’s answer, it alleged that the property could be physically
    partitioned without great prejudice to the parties. The answer
    also asserted that partition by sale would be harmful to the par-
    ties’ farming operations.
    On FTR Farms’ motion for summary judgment regarding
    ownership, the district court determined that FTR Farms and
    Rist Farm were joint owners of the property as tenants in com-
    mon. The court ordered that partition be made and appointed
    a referee to recommend whether the property could be parti-
    tioned in kind without great prejudice to the owners.
    Partition in Kind
    The referee inspected the property. He opined that
    physical division of the [property] into two separate,
    equal tracts would not be possible and would be imprac-
    tical and detrimental to the value of [the property], and
    actual partition and division of [the property] between the
    two owners cannot be made, without great prejudice to
    the owners or one of them.
    He stated that the property should be sold, so that the sale may
    then be evenly divided between the parties.
    FTR Farms and the referee moved to confirm the referee’s
    report and requested sale of the property. At the hearing, FTR
    Farms and Rist Farm submitted appraisals of the property.
    FTR Farms’ expert appraised the property as irrigated and Rist
    Farm’s expert appraised the property as nonirrigated. This table
    summarizes the respective appraisals:
    Tract                              FTR Farms Rist Farm
    North                               $1,084,668       $860,000
    South                               $1,292,925 $1,075,000
    Combined                            $2,367,020 $1,935,000
    South - North =                       $208,257       $215,000
    Combined - (North + South) =           ($10,573)            0
    At the hearing, the referee testified that he recommended
    partition by sale because the north and south tracts were not
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    equal in size, the south tract was valued $200,000 more than
    the north side, and he could not find any other feasible way to
    divide the property into equal tracts. He explained that “[his]
    report [was] strictly limited to the notion that if the acres are
    not exactly the same, it cannot be partitioned.”
    FTR Farms’ president testified that the property was pur-
    chased as a whole and should be sold as a whole. He stated he
    was going through a bankruptcy proceeding and wanted to sell
    the property to pay off his debts. He believed that he would
    receive more equity from the sale of the whole property, rather
    than a sale of half.
    At the hearing, Rist Farm argued that the property should
    be partitioned in kind. It argued that Rist Farm should receive
    the south tract and that FTR Farms should receive the north
    tract. Rist Farm indicated that it would be willing “to make up
    a difference or a boot to equalize the valuation of the proper-
    ties.” Rist Farm’s appraiser testified that if the property were
    sold as a whole versus as a separate parcel, it would have a
    negative impact. She stated that in her experience, there are
    fewer bidders for larger parcels because of financing and cost
    restrictions, whereas the smaller parcels bring more bidders.
    She recommended that the land be sold as two parcels to get
    the best price.
    Rist Farm’s president testified that Rist Farm farmed the
    south tract and that FTR Farms farmed the north tract. Each
    party kept their own profits, and each paid half of the yearly
    payment on the promissory note. He explained that if the
    property were sold, he would lose his equity in the land, pay
    capital gains tax, lose his pride because he farmed that land
    since 1980, and lose a portion of his farming operation, as
    well as the profits from it. He stated that if partitioned in
    kind, Rist Farm would prefer the south tract and be will-
    ing to pay $215,000 to FTR Farms to equalize the value of
    the property.
    At the hearing, the Dowells stipulated that if the property
    were divided and money were to change hands as part of the
    division, the funds paid would be given to the Dowells to
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    reduce the debt on the less valuable property and new promis-
    sory notes would be put in place to protect the Dowells’ first
    lien position. Alternatively, if the property were sold by the
    referee, the Dowells would be paid in full from the proceeds.
    In the district court’s order on the motion to confirm the
    referee’s report, it explained that if it were to divide the
    property in kind, there would be a significant difference in
    size and value between the parcels. It reasoned that the north
    tract would be materially less than the money equivalent
    that could be obtained for FTR Farms’ share of the whole. It
    concluded that “[d]ividing the property in kind would greatly
    prejudice [FTR Farms.]” It declined to adopt Rist Farm’s
    proposal to award owelty to equalize the difference in value,
    because “there is a lack of established authority in Nebraska
    to do so in a situation like this, both in terms of statutes and
    case law.”
    The district court found that physical division “cannot be
    made without greatly prejudicing its owners and that this real
    estate should be sold at public auction as provided by law.” It
    authorized the referee to sell the property “as one tract, as two
    separate tracts, or in any manner which might be desirable to
    prospective buyers.”
    Partition Sale and Confirmation
    A public auction followed. The referee first solicited bids
    for the north and south tracts separately. Although the precise
    high bids for the separate tracts are not in our record, testi-
    mony at the confirmation hearing disclosed that the total of
    the highest bids for the individual tracts was $1.6 million and
    that the high bid for the south side was either $920,000 or
    $940,000. The referee then offered the whole property, which
    was bid in for $1.62 million.
    The referee moved to confirm the sale. A hearing was held,
    and the parties adduced evidence. Both FTR Farms and Rist
    Farm objected to the confirmation of the sale. They argued
    that the sale price was unreasonable and grossly inadequate.
    Nonetheless, the district court confirmed the sale.
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    At the confirmation hearing, the Dowells presented evidence
    showing that a notice of default had been given to FTR Farms
    and Rist Farm on November 15, 2018, regarding the debt owed
    to the Dowells, because FTR Farms had failed to pay its half
    of the payment due on November 1.
    Appeals
    Both FTR Farms and Rist Farm purported to appeal. The
    Nebraska Court of Appeals dismissed the appeal for lack of a
    final order. The district court then held a hearing to determine
    the remaining issues, namely referee’s fees and expenses, attor-
    ney fees, supersedeas bond, and oil and gas lease payments.
    The district court determined the fees and resolved the remain-
    ing issues.
    From this judgment, Rist Farm then filed a timely appeal.
    We moved the appeal to our docket. 1
    ASSIGNMENTS OF ERROR
    Rist Farm assigns that the district court erred (1) in deter-
    mining that it did not have authority to award owelty to make
    partition in kind equitable, (2) in ordering partition by sale
    without finding that partition in kind would greatly prejudice
    both owners, and (3) by failing to consider options for partition
    in kind other than what was proposed by Rist Farm.
    STANDARD OF REVIEW
    [1] A partition action is an action in equity and is reviewable
    by an appellate court de novo on the record. 2
    ANALYSIS
    We begin with basic, longstanding concepts governing par-
    tition actions in Nebraska. Our partition statutes have existed
    from statehood. 3
    1
    See Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2018).
    2
    Zornes v. Zornes, 
    292 Neb. 271
    , 
    872 N.W.2d 571
    (2015).
    3
    See Rev. Stat. §§ 802 to 844 (1867).
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    [2] Recently, we have explained: The purpose of a partition
    action is to divide a jointly owned interest in real property
    so that each owner may enjoy and possess in severalty. 4 This
    articulation differs little from its ancient precedent: The object
    of a partition suit is to assign property, the fee simple title to
    which is held by two or more persons as joint tenants, or ten-
    ants in common, to them in severalty. 5
    [3] One of several tenants in common has an absolute right
    to a partition of their real estate, in the absence of an agree-
    ment to, or other impediments to, the contrary. 6 This also is
    not a new concept. 7 Here, the parties agree on the necessity of
    partition. They dispute between partition in kind and partition
    by sale.
    [4] One method is favored over the other. As between a
    partition in kind or sale of land for division, the courts will
    favor a partition in kind, since this does not disturb the exist-
    ing form of inheritance or compel a person to sell his property
    against his will, which, it has been said, should not be done
    except in cases of imperious necessity. 8 We have often stated
    this principle or its equivalent. 9 But we have also acknowl-
    edged that the preference can be overcome. 10
    [5,6] Finally, we have said that a sale in partition cannot be
    decreed merely to advance the interests of one of the owners,
    but before ordering a sale, the court must judicially ascertain
    4
    Zornes v. Zornes, supra note 2.
    5
    Phillips v. Dorris, 
    56 Neb. 293
    , 
    76 N.W. 555
    (1898).
    6
    Malcom v. White, 
    210 Neb. 724
    , 
    316 N.W.2d 752
    (1982).
    7
    See Windle v. Kelly, 
    135 Neb. 143
    , 
    280 N.W. 445
    (1938).
    8
    In re Estate of McKillip, 
    284 Neb. 367
    , 
    820 N.W.2d 868
    (2012).
    9
    See, Channer v. Cumming, 
    270 Neb. 231
    , 
    699 N.W.2d 831
    (2005); Phillips
    v. Phillips, 
    170 Neb. 733
    , 
    104 N.W.2d 52
    (1960); Cary v. Armbrust, 
    160 Neb. 392
    , 
    70 N.W.2d 427
    (1955); Trowbridge v. Donner, 
    152 Neb. 206
    , 
    40 N.W.2d 655
    (1950).
    10
    See Nordhausen v. Christner, 
    215 Neb. 367
    , 
    338 N.W.2d 754
    (1983).
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    that the interests of all will be promoted. 11 Our statute requires
    a court to determine whether “partition cannot be made without
    great prejudice to the owners.” 12 The generally accepted test
    of whether a partition in kind would result in great prejudice
    to the owners is whether the value of the share of each in
    case of a partition would be materially less than the share of
    the money equivalent that could probably be obtained for the
    whole. 13 With these principles in mind, we turn to the specific
    arguments here.
    Owelty Permissible
    Rist Farm’s first assignment of error attacks the district
    court’s legal conclusion that “there is a lack of established
    authority in Nebraska to [order an award of owelty to offset
    the difference in value] in a situation like this, both in terms
    of statutes and case law.” Rist Farm argues that the district
    court “clearly did have authority to award owelty,” 14 while
    FTR Farms characterizes this as an “attempt[] to read into our
    statutes and case law a concept that simply does not exist.” 15
    Here, it is not clear whether the district court determined that
    owelty is never permitted, as FTR Farms argues, or whether
    owelty was unsuited to the circumstances here. While the court
    spoke of a “lack of established authority,” it also referred to
    “a situation like this.” We reject the notion that owelty has no
    place in our partition jurisprudence.
    [7] Although the term “owelty” appears only once in our
    reported decisions, 16 it has ancient roots. Under Roman law,
    property owners used full partitioning remedies, including
    payments between cotenants to equalize unequal divisions
    (owelty) and removing and vesting a cotenant’s interest in
    11
    In re Estate of McKillip, supra note 8.
    12
    Neb. Rev. Stat. § 25-2181 (Reissue 2016).
    13
    In re Estate of McKillip, supra note 8; Trowbridge v. Donner, supra note 9.
    14
    Brief for appellant at 15.
    15
    Brief for appellee FTR Farms at 7.
    16
    See Staats v. Wilson, 
    76 Neb. 204
    , 
    107 N.W. 230
    (1906).
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    the property from a cotenancy (allotment). 17 “Owelty thus
    addresses a disparity in the value of partitioned parcels and
    is the payment of money required when property is not sus-
    ceptible of division into exactly equal shares to make the
    portions of property respectively assigned to the cotenants of
    equal value.” 18 The modern definition of “owelty” is “[e]qual-
    ity as achieved by a compensatory sum of money given after
    an exchange of parcels of land having different values or after
    an unequal partition of real property” or “[t]he sum of money
    so paid.” 19
    Most states have recognized or, at one time, employed an
    owelty award. 20 States that employ an owelty award authorize
    its use either by common law 21 or statute. 22 Several states have
    reasoned that the use of an owelty award should be rarely
    used and only in cases when it is equitably necessary. 23 Only
    17
    See John G. Casagrande, Jr., Note, Acquiring Property Through Forced
    Partitioning Sales: Abuses and Remedies, 27 B.C. L. Rev. 755 (1986).
    18
    59A Am. Jur. 2d Partition § 154 (2015).
    19
    Black’s Law Dictionary 1279 (10th ed. 2014).
    20
    See, generally, 59A Am. Jur. 2d, supra note 18 (examining cases across
    several jurisdictions utilizing owelty award in partition action).
    21
    See, e.g., Sawin v. Osborn, 
    87 Kan. 828
    , 
    126 P. 1074
    (1912); Waller v.
    George, 
    322 Mo. 573
    , 
    16 S.W.2d 63
    (1929); Chesmore v. Chesmore, 
    484 P.2d 516
    (Okla. 1971); Updike v. Adams, 
    24 R.I. 220
    , 
    52 A. 991
    (1902).
    22
    See, e.g., Ala. Code § 35-6-25 (2014); Cal. Civ. Proc. Code § 873-250
    (2015); Idaho Code Ann. § 6-541 (2010); 735 Ill. Comp. Stat. 5/17-105
    (2018); Me. Rev. Stat. Ann. tit. 14, § 6515 (2020); Mass. Gen. Laws ch.
    241, § 14 (2004); Mich. Comp. Laws § 600.3336 (2013); Minn. Stat.
    § 558.12 (2018); Miss. Code Ann. § 11-21-33 (2019); Mont. Code Ann.
    § 70-29-209 (2019); Nev. Rev. Stat. § 39.440 (2019); N.H. Rev. Stat. Ann.
    § 547-C:22 (2019); N.Y. Real Prop. Acts. Law § 943 (2009); Or. Rev. Stat.
    § 105.250 (2019); 42 Pa. Stat. and Cons. Stat. Ann. § 1562 (West 2014);
    Tenn. Code Ann. § 29-27-117 (Supp. 2018); Va. Code Ann. § 8.01-83
    (2015); Wash. Rev. Code § 7.52.440 (2017).
    23
    See, Harris v. Johnson, 
    42 Ill. App. 3d 751
    , 
    356 N.E.2d 1107
    , 
    1 Ill. Dec. 825
    (1976); Burns v. Ambler, 
    302 Mich. 526
    , 
    5 N.W.2d 451
    (1942); Bagg
    v. Osborn, 
    169 Minn. 126
    , 
    210 N.W. 862
    (1926); Waller v. George, supra
    note 21.
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    Kentucky has expressly held that an owelty award is in opposi-
    tion to its partition statutes and, therefore, is not recognized. 24
    [8] Rist Farm concedes that a Nebraska court’s authority
    to award owelty “comes not from statute, as in some jurisdic-
    tions, but rather is inherent in its broad equitable powers.” 25
    In Nebraska, a court acquiring jurisdiction of property for
    partition acquires complete jurisdiction of the property and
    affords complete justice to all parties in that action with
    respect to the subject matter. 26
    A brief digression is necessary. For most of Nebraska’s his-
    tory, its probate courts lacked jurisdiction of partition actions,
    even where the real estate was the property of a decedent’s
    estate. 27 For that reason, all of Nebraska’s partition litigation
    originated in a district court until relatively recently. 28
    We have used the term “owelty” only one time—in Staats
    v. Wilson. 29 There, we rejected a collateral attack upon a prior
    partition judgment, stating that “[t]he conduct of the widow
    and the heirs regarding the homestead amounted to a partial
    parol partition of the land with owelty.” 30 Thus, we used the
    term consistently with the definition, but as a description and
    not as a form of relief.
    But without using the term “owelty,” we have implemented
    equalization payments in two cases involving partition of real
    estate. One case is ancient; the other quite recent.
    In Lynch v. Lynch, 31 the heirs of a 66-foot-wide platted lot
    in Omaha, Nebraska, sought partition of three undivided inter-
    ests: one-sixth, one-third, and one-half. The property was
    24
    Wrenn v. Gibson, 
    90 Ky. 189
    , 
    13 S.W. 766
    (1890).
    25
    Brief for appellant at 16.
    26
    See Fairley v. Kemper, 
    174 Neb. 565
    , 
    118 N.W.2d 754
    (1962).
    27
    See In re Estate of Kentopp. Kentopp v. Kentopp, 
    206 Neb. 776
    , 
    295 N.W.2d 275
    (1980).
    28
    See
    id. 29 Staats
    v. Wilson, supra note 16.
    30
    Id. at 210,
    107 N.W. at 232 (emphasis supplied).
    31
    Lynch v. Lynch, 
    18 Neb. 586
    , 
    26 N.W. 390
    (1886).
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    partitioned in kind: The one-half interest heir received the east
    44 feet of the property and the one-third interest heir received
    the west 22 feet. The value of the one-sixth interest and one-
    half of the property’s rents were charged as a lien upon the east
    44 feet. The sole question on appeal was whether the district
    court had the power to render the monetary judgment to equal-
    ize the division in kind.
    [9,10] In holding that it did, we articulated two principles.
    First, in a partition in equity, “the court does not act in a
    merely ministerial character, in obedience to the call of some
    or all of the parties, but administers relief in such manner as
    to do equal and exact justice as far as possible.” 32 Second, in a
    partition in kind, “where [the] premises are incapable of a fair
    division[,] the court has power to award a pecuniary compensa-
    tion or charge upon the land.” 33 Thus, without using the term,
    we recognized the concept of owelty.
    Much more recently, in In re Estate of McKillip, 34 we imple-
    mented an owelty award without using the term. Three heirs
    inherited four tracts of land and cash. Only two of the four
    tracts were contiguous. After a partition by sale, an appeal
    was taken. We reversed, holding that the property should be
    partitioned in kind by one heir receiving the two contiguous
    tracts and each of the other heirs receiving one of the remain-
    ing tracts. We granted complete relief by fashioning a remedy
    for the unequal division of land using cash from the remaining
    estate to equalize the value in the division. This met the defini-
    tion of owelty: a pecuniary sum given to a party receiving a
    smaller valuation of land to equalize the distribution.
    For the sake of completeness, we note that we have imple-
    mented a partition in kind of promissory notes. 35 In that case,
    we directed the district court upon remand to implement an
    equalization payment as necessary.
    32
    Id. at 592,
    26 N.W. at 393.
    33
    Id. 34 In
    re Estate of McKillip, supra note 8.
    35
    See Zornes v. Zornes, supra note 2.
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    [11,12] These cases teach that owelty is permitted in parti-
    tion cases. But it has been used sparingly and only in particular
    circumstances. With respect to real estate, we have employed
    the concept only twice in a century and a half. We agree with
    a Minnesota court that “[o]welty is predicated upon a divi-
    sion. There can be no owelty in the absence of a division of
    property.” 36 And we agree with the many states stating that
    owelty should be rarely utilized and only when it is equi-
    tably necessary. 37 That owelty is permitted does not answer
    the question whether it was appropriate here. We now turn to
    that question.
    Partition in Kind or by Sale
    Rist Farm next assigns that the district court erred in order-
    ing partition by sale without finding that partition in kind
    would greatly prejudice both owners. In making this argument,
    Rist Farm relies upon the use of owelty to equalize the differ-
    ence in value between the tracts on each side of the river.
    [13] In our de novo review of this question, we accord some
    deference to the district court. In an appeal of an equity action,
    where credible evidence is in conflict on a material question
    of fact, an appellate court considers and may give weight to
    the fact that the trial court heard and observed the witnesses
    and their manner of testifying, and accepted one version of the
    facts rather than another. 38
    We also note that we have the advantage of hindsight in that
    our record includes the actual sale price and some information
    regarding the bidding at the partition sale. In Trowbridge v.
    Donner, 39 where we reversed a partition by sale and mandated
    partition in kind, we considered the sale results in assess-
    ing whether partition in kind would greatly prejudice the
    36
    Bagg v. Osborn, supra note 
    23, 169 Minn. at 129
    , 210 N.W. at 863.
    37
    See, Harris v. Johnson, supra note 23; Burns v. Ambler, supra note 23;
    Bagg v. Osborn, supra note 23; Waller v. George, supra note 21.
    38
    Siedlik v. Nissen, 
    303 Neb. 784
    , 
    931 N.W.2d 439
    (2019).
    39
    Trowbridge v. Donner, supra note 9.
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    owners. We follow that precedent and take the sale results into
    consideration.
    [14] We have already set forth the governing principles
    favoring partition in kind and prohibiting partition by sale to
    advance the interests of one owner, and articulating the test for
    determining whether a partition in kind would result in great
    prejudice to the owners. We do not repeat them here. But we
    also recognize that while it is generally true that there is a pre-
    sumption in favor of partition in kind, it is likewise true that
    the character and location of the property, or the amount of the
    interest sought to be assigned, or both, may be such that it will
    be presumed that partition in kind cannot be made. 40
    Whether partition in kind will result in great prejudice to
    the parties requires comparing two amounts. 41 The first is the
    amount an owner would receive if the property were divided in
    kind and the owner then sold his portion of the property. 42 The
    second is the amount each owner would receive if the entire
    property were sold and the proceeds were divided among the
    owners. 43 If the first amount is materially less than the second
    amount, great prejudice has been shown. 44
    FTR Farms’ president testified that the sale of the whole
    would bring a greater price than the sum of the sales of the
    separate tracts. Rist Farm’s appraiser, on the other hand, opined
    that sales of the separate tracts would bring more bidders
    and “would be the best at trying to get the most for the two
    pieces.” We give weight to the district court’s observation of
    the witnesses and its implicit credibility assessment in favor
    of FTR Farms. Moreover, the sale results support FTR Farms’
    president’s opinion. The highest bids for the individual tracts
    totaled $1.6 million, but the entire tract sold for $1.62 million.
    We cannot characterize this difference as immaterial.
    40
    Nordhausen v. Christner, supra note 10.
    41
    In re Estate of McKillip, supra note 8.
    42
    Id. 43 Id.
    44
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    Owelty cannot solve the problem resulting from the whole
    property selling for a greater price than the high bids for the
    individual tracts. Bearing in mind the In re Estate of McKillip
    explanation of the calculations regarding the test to determine
    great prejudice, we illustrate the problem. 45 To determine the
    first number of the great prejudice test—the amount the owner
    of each tract would receive if divided in kind and then sold—
    we use the high bids for the individual tracts, which the record
    shows totaled $1.6 million. We use the higher number related
    by Rist Farm’s president: $940,000 for the south and, by cal-
    culating the corresponding amount, $660,000 for the north.
    To determine the second number—the amount each would
    receive from the sale of the whole and the division of pro-
    ceeds—we divide the sale price of $1.62 million equally, which
    is $810,000 apiece. Thus, Rist Farm would receive $130,000
    more by selling the south tract than its share from the sale of
    the total property. FTR Farms, on the other hand would receive
    $150,000 less from the sale of the north tract than its share of
    the sale of the total. In other words, owelty of $130,000 (Rist
    Farm’s “excess” from sale of the south tract) would greatly
    prejudice FTR Farms by $20,000—the amount by which the
    sale of the whole exceeded the sale of the tracts. Owelty of
    $140,000 would prejudice both parties equally, by $10,000.
    The great prejudice to FTR Farms can be eliminated, but only
    if the owelty is $150,000. This, however, would greatly preju-
    dice Rist Farm by $20,000—again, the amount by which the
    sale of the whole exceeded the sale of the tracts. This table
    shows the calculations:
    Whole       South     North
    Individual tract high bids   $1,600,000   $940,000 $660,000
    Equal division of whole      $1,620,000   $810,000 $810,000
    Excess or shortage               ---      $130,000 ($150,000)
    Owelty of $130,000           $1,600,000   $810,000 $790,000
    Owelty of $140,000           $1,600,000   $800,000 $800,000
    Owelty of $150,000           $1,600,000   $790,000 $810,000
    45
    See
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    If we use Rist Farm’s president’s alternative amount of
    $920,000, the prejudice remains with slightly different num-
    bers. This table shows those calculations:
    Whole          South      North
    Individual tract high bids $1,600,000 $920,000 $680,000
    Equal division of whole    $1,620,000 $810,000 $810,000
    Excess or shortage              ---        $110,000 ($130,000)
    Owelty of $110,000         $1,600,000 $810,000 $790,000
    Owelty of $120,000         $1,600,000 $800,000 $800,000
    Owelty of $130,000         $1,600,000 $790,000 $810,000
    No matter what owelty payment is used, great prejudice results
    to either one or both of the parties.
    And we cannot disregard the effect of the default by FTR
    Farms and Rist Farm regarding the 2018 payment due to the
    Dowells. The default apparently places both tracts at risk of a
    trustee’s sale, making it quite difficult to retroactively mandate
    a partition in kind. The bankruptcy proceeding, which, in some
    way not clear from the record, relates to FTR Farms, intro-
    duces more uncertainty into the partition action.
    Ultimately, we are not persuaded that this is a rare cir-
    cumstance where owelty should be utilized and is equita-
    bly required. It differs from the situation in In re Estate of
    McKillip in important ways. 46 In that case, “[t]here was no
    dispute as to the value of the real estate, and there was no
    claim that the value of the real estate as one parcel was greater
    than the value of the sum of the individual tracts.” 47 Here,
    the values were disputed and there was a claim that the value
    of the whole exceeded the sum of the parts. There, the tracts
    were not all contiguous. Here, both were. Here, the disparity
    in the sizes of the tracts made conflict over the amount of
    owelty inevitable. There, the differences in undisputed values
    could be equalized from the balance of the inherited estate.
    Here, owelty would require a payment from one owner to the
    46
    See
    id. 47 Id.
    at 
    376, 820 N.W.2d at 877
    .
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    other, placing them in irreconcilably conflicting positions,
    particularly where one owner was somehow involved with
    a bankruptcy.
    In the district court, Rist Farm did not contend that an equal
    division without owelty was possible. And the record makes it
    clear that even with owelty, partition in kind could not be made
    without great prejudice to one or both of the owners.
    Upon our de novo review, we conclude that FTR Farms sus-
    tained its burden to establish that partition in kind could not be
    had without great prejudice. It follows that a partition in kind
    was not feasible and that the district court did not err in accept-
    ing the referee’s report and ordering partition by sale.
    Partition in Kind Alternatives
    Rist Farm argues that the district court erred by failing to
    consider all reasonable options for partition in kind before
    partition by sale. It contends that the district court only consid-
    ered the options it proposed to the court and did not consider
    alternative options to partition that property into equal tracts.
    Rist Farm relies upon In re Estate of McKillip for the propo-
    sition that the court must consider all alternative methods to
    partition in kind before partition by sale can be ordered. 48 This
    argument is flawed. In In re Estate of McKillip, we reversed
    the district court’s order to partition by sale, because the party
    seeking the sale did not prove that partition in kind would
    greatly prejudice the owners. Here, FTR Farms satisfied its
    burden of proof.
    Moreover, neither party presented evidence regarding a divi-
    sion other than one based on the Nemaha River. At this point,
    an argument for an alternative division in kind rests upon pure
    speculation. This assignment also lacks merit.
    CONCLUSION
    The district court did not err in rejecting the owelty award
    and finding that partition in kind would cause great prejudice
    48
    See In re Estate of McKillip, supra note 8.
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    to the owners. Accordingly, we affirm the district court’s order
    imposing partition by sale. We recognize that the default of
    the 2018 payment to the Dowells and the effect of other pay-
    ments or defaults regarding that indebtedness not shown in our
    record may affect the ultimate distributions to the parties. Upon
    remand, the district court may make the adjustments necessary
    to achieve complete justice to the parties.
    Affirmed and remanded for
    further proceedings.