SEE v. SEE

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District Court of Appeal, Second District, Division 2, California.

Laurance A. SEE, Plaintiff, Appellant and Respondent, v. Elizabeth Lee SEE, Defendant, Respondent and Appellant.

Civ. 28119.

Decided: February 28, 1966

Crowley & Goffin, Arthur J. Crowley and Ron Swearinger, Hollywood, for plaintiff. Stanley N. Gleis, Beverly Hills, for defendant.

Both husband and wife have appealed from specified provisions of the interlocutory judgment which grants each a divorce from the other. Defendant and cross-complainant, Elizabeth See, hereinafter referred to as the wife, appeals only from that portion of the judgment which determines that there was no community property.

Plaintiff and cross-defendant, Laurance See, hereinafter referred to as the husband, filed a notice of appeal attacking the provisions of the judgment granting the wife a divorce, awarding her permanent alimony and child support, and ordering payment of fees to her attorney. Since the husband's brief argues no contentions adverse to the awards for child support and attorney's fees, we assume his intent to abandon his appeal from those provisions of the judgment.

Considering first the husband's appeal, we find no merit in any of his contentions. With respect to the sufficiency of the evidence to support the granting of a divorce to the wife, the following rules are applicable:

‘(1) The infliction of grievous mental suffering as a ground for divorce is a question of fact, to be deduced from the circumstances of the case in light of the intelligence, refinement, and delicacy of sentiment of the complaining party. [Citations.]

‘(2) The sufficiency of the corroborative testimony in a divorce action lies within the sound discretion of the trial court. [Citations.]

‘(3) When a finding of fact is attacked on the ground that there is no substantial evidence to sustain it, the power of an appellate court begins and ends with the determination of whether there is any substantial evidence, contradicted or uncontradicted, which will support the finding. [Citations.]’ (Emphasis supplied by the Supreme Court.) (Lipka v. Lipka, 60 Cal.2d 472, 475, 35 Cal.Rptr. 71, 73, 386 P.2d 671, 673.)

Appraised in conformity with these established rules, the evidence in the present record is sufficient to prove a course of cruel conduct on the part of the husband extending over many years. It chronicles repeated instances of his drunkenness, nocturnal absences from the home with refusal to explain his whereabouts, his use of coarse, profane and abusive language directed to the wife in the presence of their children and others, and resort to physical violence including such degrading actions as spitting in the wife's face in public restaurant.

No useful purpose would be served by our reciting in detail the numerous instances of offensive conduct disclosed by this sordid record. As an appellate court, we need only determine, as we do, that there was substantial evidence, which we must assume was accepted by the trier of fact as true, providing support for the judgment granting the wife a divorce.

Since the cruelty here shown by the wife's evidence consisted of successive acts of ill-treatment, the corroboration thereof was ample. (Nunes v. Nunes, 62 Cal.2d 33, 37, 41 Cal.Rptr. 5, 396 P.2d 37.) This is particularly true in cases as hotly contested as was the instant one. ‘It is true that a divorce may not be granted upon the uncorroborated testimony of the parties. [Citation.] The purpose of this provision of the law is to prevent collusion. [Citation.] Where, as in the case now before us, the action of each party is earnestly resisted by the other, and there is no suggestion of collusion only slight corroboration is required, and the sufficiency of the corroborative evidence rests largely with the trial court.’ (LeVanseler v. LeVanseler, 206 Cal.App.2d 611, 613, 24 Cal.Rptr. 206, 207.)

Having determined that a divorce should be granted to both parties, the trial court did not abuse its discretion in swarding permanent alimony to the wife. De Burgh v. De Burgh, 39 Cal.2d 858, 873, 250 P.2d 598.) It is clear from the record that the trial judge did consider the comparative guilt of the parties in reaching his decision. Despite the wife's admission of an act of adultery and the subsequent secret performance of an abortion shortly before the husband filed his action herein, we cannot hold that the trial court erred in the exercise of its discretion and judgment. (Mueller v. Mueller, 44 Cal.2d 527, 532, 282 P.2d 869.)

All too frequently, as appears to be true in this case, the destruction of a marriage is a long term process to which both parties contribute in varying degrees impossible to measure with precision. Regrettably our adversary system oftentimes induces the parties to a destroyed and lifeless marital union to belabor each other with charges and countercharges of responsibility for the infliction of the fatal wounds. Often, however, the lesions appearing on the corpse are more truly the results, rather than the causes, of the diseases that produced the death.

Turning now to financial aspects of the case, in view of the husband's wealth and annual income and the standard of living maintained by the parties throughout the 20 years of their marriage, the alimony award to the wife of $5,400 per month is not excessive as a matter of law.1 The trial court analyzed the tax consequences of its decision in the manner approved in Huntington v. Huntington, 120 Cal.App.2d 705, 713, 262 P.2d 104, and Pope v. Pope, 102 Cal.App.2d 353, 370, 227 P.2d 867, and such considerations properly played an important part in the determination reached.

Were it not for the fact that we have found it necessary to reverse that portion of the judgment relating to the non-existence of community property, we would experience no hesitancy in affirming the award of alimony made herein. However, the trial court made it clear that one of the significant factors motivating its decision to make the substantial alimony award was the complete lack of any community assets in which the wife might share. Therefore, the amount thereof may not be finalized until a proper finding has been made upon this other closely related issue.

As indicated, the sole assignment of error made by the wife relates to the finding of the trial court that there was no community property subject to a division between the parties. Both parties are agreed that this determination was the product of the legal theory adopted and applied by the trial court, namely, that the community or separate character of the property owned by the parties at the time of the dissolution of the marriage was to be determined by a 20-year retrospective accounting and balancing of community income and community living expenses.2 The basic tenet of this theory is that the existence of non-existence of community property depends upon whether the total of the community income received during the entire term was greater or less than the total of the community expenses. The determination of the property rights of the parties to this action by the application of this legal theory cannot be sustained.

Before undertaking our analysis of the cases relied upon by the husband and by the court below, it may be noted the in addition to altering the general rule regarding the presumptions in favor of community property and the burden of disproving the community character of property acquired after marriage, the theory advanced also violates the ‘inception of title’ doctrine (cf. Giacomazzi v. Rowe, 109 Cal.App.2d 498, 500, 240 P.2d 1020) and substitutes a fluctuating, and currently indeterminate, interest for the ‘present, existing and equal’ interest in community property given a wife by section 161a of the Civil Code.

To approve such a theory would amount to a declaration that although community funds may have been used to purchase a particular asset, nevertheless throughout the duration of the marriage the character of this item of property may be either that of community property owned by both husband and wife or separate property owned by the husband alone, depending upon the status or balance of the parties' total ‘account’ at any given time when a dissolution of the marriage requires an accounting. This would be completely destructive of our entire system of community property law.

The cases relied upon by the trial court in developing its accounting theory were Hicks v. Hicks, 211 Cal.App.2d 144, 27 Cal.Rptr. 307; Kenney v. Kenney, 128 Cal.App.2d 128, 274 P.2d 951; Thomasset v. Thomasset, 122 Cal.App.2d 116, 264 P.2d 626; Hill v. Hill, 82 Cal.App.2d 682, 187 P.2d 28.

Unlike the instant case, all of the above cited cases presented the courts with factual situations wherein the husband had maintained only one bank account into which both his separate income and the income of the community were deposited. In each the wife had contended that since the moneys in the account had been commingled, the account itself and any asset purchased by withdrawal therefrom were necessarily community in character. In each case also the court was at pains to point out that such contention would be valid only if it was found impossible to trace the character of the money used to purchase any particular asset, i. e., if no sufficient records had been kept of the various amounts of separate and community funds deposited in and withdrawn from the account.

The courts in these decisions therefore enunciated what might be termed a ‘layer theory’ to be applied in cases where a sufficiently accurate and complete record had been kept so that the character of with-drawals and deposits was ascertainable and a tracing process was practicable. Thus, if on the date the parties were married, the husband had $50,000 of separate funds on deposit and during the first year of marriage there was added thereto $25,000 of community funds from his salary and $25,000 of separate income derived from his separately owned stocks and bonds, then, assuming no withdrawals, the result at the end of the year would not be a commingled community account of $100,000, but rather an account in two layers consisting of $25,000 of community funds and $75,000 of separate funds.

With this concept in mind, the courts were then able to apply the general rule that ‘[u]nless the contrary is shown, it is presumed that money used in the maintenance of the family is drawn from community funds before there is an encroachment on separate property.’ (Emphasis added.) (Kenney v. Kenney, supra, 128 Cal.App.2d at p. 136, 274 P.2d at p. 957.) Or, as stated in Thomasset v. Thomasset, supra, 122 Cal.App.2d at page 126, 264 P.2d at p. 632:

‘It is presumed that expenses of the family came from community earnings. [Citations.] Where the husband, charged with the support of a family, has income derived from his separate property and income from his earnings which are community property, there is no presumption that he has supported the family out of the separate property and preserved intact the community funds. He is at perfect liberty to devote all that is necessary of the community earnings to the family support and to preserve his separate property intact. [Citation.]’ (Emphasis added.)

In other words, since there was no showing that the husband had intended to invade his separate property layer of funds on deposit in the family account at the time he paid by withdrawal therefrom an item chargeable to living expenses, it would be presumed that the payment was made from the community property layer.

In each of the cited cases the application of this rule permitted a determination that at the time a specific asset was purchased with money taken from the account, the community property layer had been expended to meet community living expenses so that the funds used to purchase the asset in question necessarily must have been the separate funds of the husband.

As a corollary of this basic rule, a second rule was applied regarding reimbursement. Thus, if the layer of community funds was exhausted and the husband therefore was required to expend his separate funds in the payment of living expenses, then, absent a showing to the contrary, the intention would be presumed that when additional community funds were deposited in the account, a sufficient amount thereof would be applied to replace the husband's separate property theretofore expended.

It will be noted that in none of these cases is there any suggestion that even in instances where only a single bank account has been maintained, an accounting taken at the end of the marriage will determine the character of any previously acquired asset. In Hill v. Hill, supra, 82 Cal.App.2d 682, at pages 687–688, 187 P.2d 28, various items of community property were awarded to the wife and the comments of the court regarding the parties' bank account merely related to the proper method of determining the respective amounts of community and separate moneys therein at the end of the marriage.

In Thomasset v. Thomasset, supra, 122 Cal.App.2d 116, 126–127, 264 P.2d 626, 633, the court applied the rules heretofore discussed and determined that a proper tracing had been made of the funds used to acquire certain assets. This conclusion, however, was in nowise based upon the fact that a deficit existed as the result of an overall accunting covering the term of the marriage. Rather, it was because, ‘An accountant testified that at the time the various items adjudged to be defendant's [husband's] separate property were purchased, there were no community funds available.’ (Emphasis added.) In point of fact, an overall deficit was found to exist in Thomasset, but several assets nevertheless were held to be the community property of the parties.

Similarly, in Kenney v. Kenney, supra, 128 Cal.App.2d 128, 135–136, 274 P.2d 951, the husband's records showed that the family expenses had exceeded the amount of his salary and other community income during every year of the marriage. Nevertheless, the trial court found certain items of property, both real and personal, to be community property of the parties, and the appellate court added thereto by determining that another item consisting of a onehalf interest in certain stock was community property. (P. 142, 274 P.2d 951.)

Further, in sustaining the determination of the trial court in connection with certain assets found to be the husband's separate property, the appellate court made clear the requirement that the accounting taken of the transactions involving a common account for tracing purposes be related to the status of the account at the specific time the asset in question was purchased rather than at the end of the marriage. Thus, in discussing the acquisition of certain oil wells, the court stated at pages 137–138, 274 P.2d at page 958:

‘The first payment of $1,500 was made at a time when, the documentary evidence in the record disclosed, community living expenses exceeded community income. The presumption being that respondent used community funds in the bank for living expenses, there were none available on October 9, 1930, from which the Torrance wells purchase could have been made. Therefore the down payment necessarily was made from the remaining, or separate, funds in the bank account. As a general rule, the character of the property as separate or community is fixed as of the time it is acquired and changes only in some manner recognized by law, as discussed hereinbefore. [Citation.] Thus the Torrance wells were separate property at the time of their purchase.

‘Without setting forth the figures in minute detail, although we have followed them carefully and laboriously, the second payment on the Torrance wells in the sum of $1,500 was made also at a time when family expenses exceeded community income, thus leaving only separate funds out of which the payment could have been made.’ (Emphasis added.)

We believe that the foregoing analysis shows that the cases relied upon by the husband and by the trial court do not support the theory adopted in the instant case. In addition, however, it should be emphasized that this case is not one involving only a single ‘commingled’ account. Therefore, the presumptions required or permitted in the ‘commingled’ account cases are not directly relevant here.

There are a number of other decisions which discuss the principles of accounting applicable in determining the character of property acquired during marriage. They present a variety of factual situations and some of them do not set forth the details of the banking or accounting systems utilized by the parties. However, in every comparable case in which the separate character of property acquired during marriage was held to have been established, it had been shown either that a deficit in the community account had existed at all times during the period of the marriage, or that no specific item of real or personal property had been purchased with money taken from an account established and maintained by deposits of community funds. Thus, as stated in Estate of Neilson, 57 Cal.2d 733, 742, 22 Cal.Rptr. 1, 6, 371 P.2d 745, 750:

‘It is presumed that the expenses of the family are paid from community rather than separate funds. (Huber v. Huber, 27 Cal.2d 784, 792, 167 P.2d 708.) Thus, in the absence of any evidence showing a different practice the community earnings are chargeable with these expenses. (Title Ins. & Trust Co. v. Ingersoll, 158 Cal. 474, 492, 111 P. 360.)

‘When a husband devotes his services to and invests his separate property in an economic enterprise, the part of the profits or increment in value attributable to the husband's services must be apportioned to the community. If the amount apportioned to the community is less than the amount expended for family purposes and if the presumption that family expenses are paid from community funds applies, all assets traceable to the investment are deemed to be the husband's separate property. (Estate of Ades, supra, 81 Cal.App.2d 334 at p. 338 [184 P.2d 1]; Estate of Arstein, supra, 56 Cal.2d 239 at p. 241 [14 Cal.Rptr. 809, 364 P.2d 33]; Logan v. Forster, 114 Cal.App.2d 587, 601–602, 250 P.2d 730; Cozzi v. Cozzi, 81 Cal.App.2d 229, 232–233, 183 P.2d 739.) Similarly, when a husband purchases property during the marriage with funds of an undisclosed or disputed source, the presumption that the property is community may be overcome by evidence that community expenses exceeded the community income. In such a case, the husband traces the source of the disputed property to his separate property by a process of elimination: since all the community income was exhausted by family expenses the property must have been purchased with his separate funds. (Kenney v. Kenney, 128 Cal.App.2d 128, 136, 274 P.2d 951; Thomasset v. Thomasset, 122 Cal.App.2d 116, 126–127, 264 P.2d 626.)’ (Emphasis added.)

In the present case, the husband maintained several accounts. Certain of these consisted solely of his separate property and there is no question but that they, and all assets purchased by funds withdrawn therefrom, are the husband's separate property. In addition, he maintained one account with his company into which he ‘deposited’ his salary3 and another separate and distinct ‘personal’ bank account into which he deposited various portions of his separate property income and occasionally small amounts of community funds.

Although the husband testified that at the inception of the marriage he had instructed his bookkeeper that he wished to pay community living expenses from the company account, it is clear that neither he nor his bookkeeper ever adhered to this plan. Checks in payment of living expenses were drawn quite indiscriminately from this ‘community account’ and from his ‘personal account.’ In his testimony the husband also attempted to give an explanation of this conduct by saying that he drew on whichever account had sufficient funds at the moment because he did not wish to be overdrawn in his company account. However, he conceded that he did not inquire as to the amount available in the community account at the time of paying any particular item of community indebtedness and it is undeniable that in many instances community funds were available at the time funds were expended from his personal account.

We, therefore, are presented with a situation quite different from those reviewed by the courts in enunciating the ‘layer theory’ of single bank accounts. When a husband voluntarily chooses to support his family be checks drawn upon an account containing only his separate property funds at a time when community property funds in another account are available for that purpose, there is neither need for, nor support for, the indulgence in a presumption that he intended to use community funds for this purpose. Further, we need not reach the question whether, in a case involving two accounts, a husband might use the one consisting of separate funds as a temporary matter of convenience but with the intention, shortly thereafter fulfilled, to reimburse himself from the community funds.

In the instant case, at least, it is clear that the husband never attempted to reimburse himself for expenditures paid from his separate account, i. e., the record fails to reveal any instances of transfers from the community account to the personal account to repay ‘advances' made nor did the husband claim that he kept a running ‘account current’ of the community income and the community expenditures.

Therefore, without adopting the ‘end of the marriage accounting theory’ used by the trial court, there is no way in which it can be determined from the record before us whether assets purchased from either account were acquired with community property funds or with the husband's separate property funds.

Since both accounts to some extent consisted of ‘commingled’ community and separate funds, and since no showing has been made as to the proportions thereof at the times when the specific items of property in issue were acquired, it is clear that the husband has not met his burden of proving their separate property status. However, by reason of the fact that the husband, in presenting his evidence, doubtless relied upon the court's expressed decision to apply an ‘end of the marriage accounting theory,’ we feel it appropriate to reverse this portion of the judgment in its entirety and remand the cause for a full retrial of the property and alimony issues.

Upon retrial, certain general suggestions on our part may prove helpful. First, it is clear that since the husband's total income was several times greater than his community income, he intended to, and did, provide his family with a standard of living more luxurious than would have been reasonable or possible had his salary constituted his total income. Therefore, when he used his separate funds rather than available community funds to support his family, there is no necessity for a finding that such action fulfilled all the requirements for a formal gift, including donative intent, in order to find that the unexpended community funds retained their community character.

Secondly, much closer scrutiny should be given to the numberous items classified as ‘living expenses' by the husband which classification appears to have served, in greater or less degree, to increase the amount claimed as his own separate property. That is to say, in circumstances such as the present, it certainly is not mandatory to find that the husband was entitled to, and did, expend solely his separate funds to acquire such expensive properties as the family residence, a house on Catalina Island, a $100,000 yacht, etc., and then to maintain and pay the taxes thereon out of the community funds as ‘living expenses,’ thereby preserving his separate funds for further purchases of permanents assets. (Cf. Estate of Turner, 35 Cal.App.2d 576, 578–580, 96 P.2d 363; Provost v. Provost, 102 Cal.App. 775, 779 et seq., 283 P. 842.)

In an instance such as the present where the husband's separate property income so greatly exceeded his community property income, expenditures such as gifts to his college and his political contributions need not necessarily be regarded as ordinary living expenses chargeable solely to the community.

The husband's vested interest in the See's Candy Shops Inc. Profit Sharing Trust in the amount of $56,370.92 unquestionably is community property. His interest therein was acquired solely by reason of his status as an employee. Inasmuch as a divorce was granted to both parties, the wife was entitled to an award of her one-half interest therein regardless of any deficit that might exist after an accounting covering the entire marriage.

As heretofore indicated, since we must reverse that portion of the judgment relating to the community property of the parties, we also are required to reverse the alimony award since it was partially based thereon, i. e., the court in its written decision stated:

‘A further circumstance in determining a ‘suitable allowance’ for the wife is that she will start with her three children upon the effective date of the order without home, furnishings or automobile, and without any accumulation of cash for down payments customarily required to acquire the same.'

Since it appears probable that upon retrial a substantially different result may be reached in the determination of property rights, the trial court should be in a position to reconsider its alimony award.

Those portions of the judgment determining that there was no community property and awarding the wife $5,400 per month alimony are reversed. The wife will recover her costs on this appeal.

FOOTNOTES

1.  In its memorandum decision, the court noted that the husband's net worth was in excess of $5,000,000 and that his gross income for the last year computed was $212,727.32.

2.  Illustrative of this theory are the following: ‘THE COURT: As I read the cases a husband advancing money from his separate estate for family expenses is entitled credit to reimbursement from the community. And further as I read the cases, the controlling situation is how does the account stand at the present time, at the time of trial? If this is true, I can't see what materiality there is as to how the account stood at the intermediate times.’ (Emphasis added.) ‘THE COURT: The obligation is on the husband because he did commingle, so the obligation rests on him. He commingles at his peril. As I read the cases there are these two ways that he can satisfy the requirement: ‘He can either literally trace and say, ‘Look, I put $25,000 in, I took $25,000 out, and I bought this piece of unimproved real estate,’ or he can at the end add up all of the family expenses and if they exceed family community income he has accounted.' (Emphasis added.)

3.  This was actually a ‘ledger account’ in which credits and debits were noted rather than deposits and withdrawals being made as in a commercial banking account.

HERNDON, Justice.

ROTH, P. J., and FLEMING, JJ., concur.