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Court of Appeal, First District, Division 3, California.

A. Walter BEAM, Plaintiff, Cross-Defendant and Respondent, v. Mary Kathryn BEAN, Defendant, Cross-Complainant and Appellant.

Civ. 26221.

Decided: August 31, 1970

Kerner, Colangelo & Imlay, San Francisco, for appellant. Goth, Dennis & Aaron, Redwood City, for respondent.

Defendant wife appealed from an interlocutory judgment of divorce awarded to both parties on the grounds of extreme cruelty.1 The judgment, in addition to granting a divorce to each party, also provided that the only community property was a promissory note in the sum of $38,000, which was awarded to the appellant. All other property was declared to be the separate property of the party possessing it. The custody of the two minor children was awarded to both parties, the husband to pay the wife $250 per month for the support of each child while they were within her care. The wife was awarded $1500 per month as alimony. The judgmint also provided for attorney's fees, expert fees and costs.

The wife contended that she alone was entitled to the divorce, but appellant's brief offers no argument supporting this contention, and the record contains sufficient evidence to support the trial court's finding on this issue.

The wife claims that (1) the community should have been compensated for the husband's skill, efforts and labors in the handling of his separate estate and that the community living expenses which were paid from the separate income of the husband's estate should not be a charge against those earnings; (2) the trial court erred in failing to find that the husband agreed with the wife that there was a transmutation from his separate property to community property of the projects known as the Piercy Cabana project and the Prunedale Cabana project; (3) the trial court abused its discretionary powers in the award of alimony which was grossly inadequate and less than the amount conceded by the husband to be necessary for the wife's support, and (4) the court failed to make a finding (after request) regarding the ownershiq of certain United States Bonds valued at $16,000, plus interest. It was claimed that the bonds were the separate property of the wife and were in the possession of the husband at the time of trial.

The parties were married on January 31, 1939. The divorce was granted in 1968 after 29 years of marriage. There were four children of the marriage.

Respondent, A. Walter Beam, had inherited at various times, before and during the first years of the marriage, a total of $1,629,129 in cash and securities. Except for brief intervals following their marriage, respondent was not employed. He served with the U. S. Armed Forces in World War II from 1943 to 1946, and thereafter devoted his time to handling his estate and engaging in private ventures with his own capital.

During the greater part of the marriage (1946 to 1963), the family lived in a residence located on Spencer Lane in Atherton, California. In 1963 the Spencer Lane house was sold and a smaller residence was acquired on Selby Lane, also in Atherton. The Selby Lane residence was sold in 1966 for a cash down payment which apparently was divided between the parties. The balance of the purchase price was represented by a promissory note in the sum of $38,000 payable in monthly installments of $262.56. (The court in its decree declared the note to be community property but awarded it to the wife upon the husband's stipulation.)

The ordinary living expenses of the family prior to these proceedings amounted to $2,000 per month. There were extraordinary expenses after 1960 for travel, weddings, gifts, aggregating another $22,000 per year. All household and extraordinary expenses were paid from respondent's income from his separate property.

Starting in 1946, and thereafter, respondent maintained an office for the management of his property and the supervising of his activities and investments to which he devoted a substantial amount of time and effort. The first activity had to do with concrete construction of buildings. In 1946 respondent took and completed an ICS course in concrete construction engineering. Utilizing the knowledge obtained from the course, he commenced in 1947 to construct buildings which occupied much of his time and effort over the next five years.

Another business venture related to resort motels in which respondent first became interested in 1959. These projects involved the construction of two resorts known as Cabana Holiday I, at Piercy, California, and Cabana Holiday II, at Prunedale, California. Inaddition to these business ventures commincing at the time of the marriage, respondent devoted the majority of his time to studying the stock market, and actively engaged in selling and buying stocks and bonds.

Through the 29 years of the marriage, appellant's occuption was solely that of a wife and mother. She had no business experience and was not trained for any gainful employment.

Appellant first contends that the trial court erred in not declaring that there was community property resulting from the husband's earnings.

There is no dispute that the only money received and spent by the parties was derived from respondent's separate estate. Furthermore, it is conceded that respondent's efforts in managing his investments were more than minimal.

It is the general rule that the community must be compensated when the time, efforts, and skill of the husband, being assets of the community, contribute to the enrichment of the husband's separate property. (Strohm v. Strohm, 182 Cal.App.2d 53, 62, 5 Cal.Rptr. 884; Haldeman v. Haldeman, 202 Cal.App.2d 498, 504–505, 21 Cal.Rptr. 75; Millington v. Millington, 259 Cal.App.2d 896, 907, 67 Cal. Rptr. 128, and cases cited therein; 4 Witkin, Summary Cal. Law, Community Property, § 17, pp. 2724–2726.) The above rule applies not only to the situation where the husband continues to operate and manage his separate commercial business after his marriage, but also in the case where the hunband invests his separate funds in real estate or securities. (Estate of Neilson, 57 Cal.2d 733, 740, 22 Cal.Rptr. 1, 371 P.2d 745.) In the latter case, the incremental rise in value remains the separate property of the husband only when it can be attributed to natural enhancement by market conditions or where the husband expends only minimal effort in its management. (Id.)

Once it is found that a situation exists calling for an apportionmint, one of two methods is generally employed: (1) after allowing for a normal rate of interest on the husband's separate capital, such interest is allocated as separate property of the husband, and the remaining increase of his property is treated as earnings attributable to the husband's efforts during the marriage and thus community property; (2) the alternative method is to determine the reasonable value of the husband's services expended in managing gis separate property, allocate that amount to the community, and treat the remaining increase as the husband's sepatate property.

The first of the above two formulas had its origin in the case of Pereira, v. Pereira, 156 Cal. 1, 103 P. 488, while the second was announced in Van Camp v. Van Camp, 53 Cal.App. 17, 199 P. 885. (See also Gilmore v. Gilmore, 45 Cal.2d 142, 149, 287 P.2d 769.)

The above two rules are merely accepted methods by which a court may make its apportionment of the property, and it is not mandatory that either rule be employed as the court may choose whatever method it deems appropriate to achieve substantial justice under the premises. (Haldeman v. Haldeman, supra, 202 Cal.App.2d, at 505, 21 Cal.Rptr. 75; 4 Witkin, supra, § 17, p. 2725.)

Furthermore, it is presumed that family expenses are paid from community rather than from separate property, thus to the extent living expenses during the marriage are proven, they should be deducted from the increased value of the property when applying either of the above formulas. (Haldeman v. Haldeman, supra, 202 Cal.App.2d, at 505, 21 Cal.Rptr. 75; Estate of Neilson, supra, 57 Cal.2d, at 742, 22 Cal.Rptr. 1, 371 P.2d 745.) If all that would have been community property is consumed in living expenses by the parties, the remaining increment of the husband's estate at the time of the dissolution of the community will remain his separate property. (Millington v. Millington, supra, 259 Cal.App.2d, at 909, 67 Cal.Rptr. 128.)

The trial court was of the opinion that the Pereira rule should be utilized in this case, and further found that under either method of apportioning part of the husband's separate property to the community, the husband would in fact be entitled to an amount in excess of all the property then owned by the kparties.

The appellant's own calculations disclose that the parties expended approximatily $672,000 during their marriage for ordinary living expenses, and $176,000 for extraordinary living expenses. Thus the total outlay by the community for living expenses during the marriage was approximately $848,000

As stated above, the court chose to use the Pereira formula in apportioning the property. Under this formula respondent's inheritance would be allowed an annual growth of 7% as a reasonable increase of capital independent of any aid in the form of respondent's managerial skills. Testimony was introduced at the trial that with a growth of 7% simple interest per year, respondent's separate property should have been worth approximately $4.2 million at the time of trial if nt ewpenditures were made during the marriage. Since appellant's own figures indicate that less than $4 million was in fact accumulated during the marriage, it would appear that the totality of increased valuation for the 29-year period was the result of a normal growth factor of 7% per annum.

Thus, under the Pereira rule applied by the court, none of the increased valuation of respondent's separate property could be attributable to his efforts, time, or skill expended during the marriage. Appellant concedes that the use of the Pereira formula would result in the conclusion that the present remainder of respondent's estate is his separate property, but contends that it was improper for the trial court to use that method of apportionment. Rather, appellant argues, the court should have apportioned the inerease in repondent's property according to the method announced in the Van Camp case.

Under the formula used in Van Camp, a reasonable value would be attached to efforts of the husband devothed to managing his separate property, and that value would be returned to the community as compensation for the expenditure of the husband's skills during the marriage. Evidence was introduced to the effect that a professional investment manager performing the same functions as respondent would have charged a fee of 1% per year of the corpus of the funds he was managing. Appellant contends that such a fee would amount to $17,000 per year (1% of the $1.7 million investment per year). Thus appellant community for the services expended by respondent during the course of the marriage would be $357,000 and that her estate is now entitled to one-half of that amount.

As stated above, however, living expenses are presumed to have been paid from community funds, and the parties herein expended some $848,000 for living expenses during their marriage. It would then appear that even under the Van Camp formula the parties spent an amount substantially greater than that to which the community was entitled, and the balance of respondent's estate would still remain his separate property.

The court in Estate of Neilson, supra, 57 Cal.2d 733, 742, 22 Cal.Rptr. 1, 6, 371 P.2d 745, 800 stated: ‘When a husband devotes his services to and invests his separate property in an economic enterprise, the part of the profits of 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.’

It is appellant's further contention that since respondent testified that family expenses were paid from his separate property the presumption that those expenses were paid from community funds is rebutted. It is clear that respondent's testimony was based on the assumption that all his funds were his separate property. He did not believe that any community funds were even in existence. Each month he would write a check on one of his commercial accounts (into which went all the earnings and profits of his separate investments) and have his wife, the appellant, deposit said check in their household account. If part of the increased value of respondent's separate property belonged to the community, the presumption in favor of community funds being expended for community expenses would support a finding that respondent intended the monthly checks deposited into the household account to be drawings against whatever amounts the community was entitled to. In a divorce action, the court has wide discretion to divide and apportion the property before it within detablished rules, and its decision will not be reversed on appeal absent a showing of an abuse of that discretion. (Harrold v. Harrold, 43 Cal.2d 77, 87, 271 P.2d 489.) The finding of the trial court that certain property is separate or community will be upheld on appeal if such a finding is supported by sufficient evidence in the record. (Haldeman, supra, 202 Cal.App.2d, at 502 Cal.Rptr. 75; Somps v. Somps, 250 Cal.App.2d 328, 336, 58 Cal.Rptr. 304; Millington v. Millington, supra, 259 Cal.App.2d, at 915, 67 Cal.Rptr. 128.) Such supporting evidence appears in the record of this case and we therefore find no error on this issue.

Appellant next contended that respondent transmuted business enterprises financed with his separate funds into community property.

In 1959 and 1960 respondent financed and had constructed two resorts known as Cabana Holiday I at Piercy, California, and Cabana Holiday II at Prunedale, California.

While it was conceded that both resorts were financed from respondent's separate funds, appellant contended that she was to be a partner in the project and that the two resorts should be declared as community property.

Appellant testified that respondent gathered the family together in 1959 and presented the idea of the Cabana profects. It was to be a family profect, and appellant and respondent were to be partners. Appellant stated that she assisted in the plans for its construction, and helped with the management of the project. She stated that she believed the Cabana projects to be a community project, and devoted her efforts and energies to its development.

Although appellant claims to have also contributed similar services to the second project at Prunedale, those services were not as extensive as at Piercy.

There is no doubt that a husband and wife may orally transmute separate property into community property or vice versa. (Tomaier v. Tomaier, 23 Cal.2d 754, 757–758, 146 P.2d 905; Somps v. Somps, supra, 250 Cal.App.2d 328, 334, 58 Cal.Rptr. 304; Millington v. Millington, supra, 259 Cal.App.2d 896, 913, 67 Cal.Rptr. 128; 4 Witkin, supra, § 49, p. 2752.)

While a transmutation will usually necessitate a written or oral agreement, the courts have found a transmutation on evidence of the surrounding circumstances such as one party's unilateral intent to give up his separate property interest. (Title Ins. and Trust Co. v. Ingersoll, 158 Cal. 474, 111 P. 360.)

Respondent testified that throughout the marriage appellant and respondent had conversations respecting the manner in which title was held on his property. Appellant wanted some property held in joint tenancy, while respondent wished to keep his separate property in his name alone. Other than their residences, all property, including the Cabana Holiday projects, were in respondent's name only.

Respondent does not deny the efforts of his wife or her work on the Cabana projects, nor does he seek to contradict her testimony regarding his statements that they were to be partners in the project.

Appellant's testimony regarding an alleged statement of intent on the part of respondent could warrant a finding that a transmutation did occur, but such finding is not compelled. ‘While it is the general rule that uncontradicted and unimpeached testimony of a witness tending to establish an issuable fact may not be disregarded and should be accepted to establish the fact unless it is inherently improbable [citations], there are exceptions to the rule. Thus the most positive testimony may be contradicted by circumstances in evidence which may satisfy the trial court of its fallacy and the court may reject that testimony even though the witness is not discredited by directed testimony.’ (Estate of Bernatas, 162 Cal.App.2d 693, 696–697, 328 P.2d 539, 541.)

We accept the trial court's determination that there was no transmutation and that the wife is not entitled to be compensated for either her services or for her share of the community furnishings that went into the projcets.

Appellant next contended that the award of alimony was grossly inadequate and constituted an abuse of discretion by the trial court.

The granting or refusing of alimony, and the amount thereof, if allowed, is largely in the discretion of the trial court, and its action will not be disturbed in the absence of an abuse of discretion. (Millington v. Millington, supra, 259 Cal.App.2d 896, 67 Cal.Rptr. 128, and cases therein cited.) But alimony in a proper case is a matter of right which has been earned by the wife.

Consideration in fixing the amount of alimony must be given to the needs of the wife, the ability of the husband to pay, the standard of living of the parties during marriage, the conditions of health and the ability of each to be gainfully employed. There is no doubt of the ability of respondent to pay a reasonable alimony.

Here the court ordered that the sum of $1500 per month be paid to the wife as alimony. In addition the wife would receive some $262.56 per month as payments on the promissory note. Appellant contended that after deducting income taxes the remaining amount is inadequate. However, the record does not disclose how much of the $262.56 would be subject to income taxes or what deductions appellant would be allowed. The testimony of appellant's expert witness considered the $262.56 as ‘a straight alimony payment’ and he does not state what deductions, if any, he used in determining the anet income after taxes. On these facts we cannot find that the trial court abused its discretion in setting the appellant's alimony award.

Appellant next contended that the court should have declared certain United States Savings Bonds, together with interest thereon, to be her property. However, the record fails to disclose substantial evidence which would warrant our making a finding favorable to appellant in opposition to the trial court's determination. In Jenner v. City Council, 164 Cal.App.2d 490, 501, 331 P.2d 176, 183, the court said: ‘While it is error to omit findings on a material fact placed in issue (Cal.Code Civ.Proc., § 632; San Jose Abstract & Title Co. v. Elliott, 108 Cal.App.2d 793, 240 P.2d 41), ‘the failure to find on an issue is not ground for reversal where the record discloses no evidence on which a finding favorable to the complaining party could properly have been made.’ (Maloof v. Maloof, 175 Cal. 571, 573, 166 P. 330.)'

Furthermore, the court made a finding on the issue adverse to the appellant. Though the finding did not specifically name the bonds it did state ‘That all property standing in the name of the plaintiff is his sole and separate property and all property in the name of defendant is her sole and separate property.’ The bonds in question were in the name of the plaintiff.

It is also contended that the court constantly hurried counsel, and was guilty of other acts of misconduct. We have examined the alleged instances complained of and conclude that the record discloses the trial judge was fair and just, and his judgment finds support in the evidence.

The judgment is affirmed.

I concur with the majority opinion of this court in its determination that the judgment of the trial court should be affirmed relative to the issue of wherther there was a transmutation from sepate property to community property, and as to the determination that the trial court did not err in its conclusion that certain United States bonds were not given to the wife. I would also affirm the alimony issue on the grounds that it is one that could be corrected by modification by the trial court upon a proper showing.

While agreeing with the majority opinion on each of the above issues, it is to be noted that there was substantial evidence supporting appellant wife's position.

I disagree with the majority opinion relative to its determination that there was no community property resulting from the labor, efforts and skills expended by the husband. There is but little doubt that respondent devoted a full measure of his time, labor, effort and skills to the preservation and engancement of his separate $1,629,129 estate. His investments in building enterprises, the construction and operation of the resort Cabana projects and his activities as a ‘trader’ in the stock market resulted in earnigs of in excess of $2,361,435 over the 29-year marriage. The community was thus entitled to be compensated for the time, effort and skill of respondent resulting in earnings from his separate estate and which not only preserved the original estate of $1,629,129, but also increased its value (at the time of the divorce) to approximately $1,850,000.

The court, in determining there was no residue of community property resulting from husband's services, considered two methods generally employed and having their origin in the two early cases of Periera v. Periera, 156 Cal. 1, 103 P. 488, and Van Camp v. Van Camp, 53 Cal.App. 17, 199 P. 885.

The guides announced in Periera and Van Camp have been accepted methods by which a court may make its apportionment of the property. It is not mandator that either rule be employed, as the court may choose whatever methods it deems appropriate to achieve substantial; justice. (Haldeman v. Haldeman, 202 Cal.App.2d 498, 504, 21 Cal.Rptr. 75; 4 Witkin, Summary Cal.Law, Community Property, §§ 18, 19, pp. 2726–2727.)

I have concluded, however, that the trial court erred in its application of the formulas propounded in Pereira and Van Camp.

First, to apply the Pereira formula of allowing the fictional 7% interest per year increase on the estate of $1,629,129 would be unrealistic and completely disregards two important factors: one, during the early years of the marriage, a substantial portion ($600,000) of respondent's separate estate was in municipal tax free bonds earning about 1% interest, and thus to apply the 7% rule would be giving a substantial part of his assets seven times the income that was actually realized; and, two, respondent's assets consisted of a number of enterprises which did not realize any immediate profit but did have ultimate prospects of a greater future growth value, and thus would be of a greater ultimate benefit to respondent. Respondent testified that the two Cabana resort enterprises were commenced in 1960 and at the time of trial in 1968 they were just beginning to show a profit. These properties were evaluated at in excess of $500,000. These ventures and the municipal bond investments were for growth rather than immediate income.

It must be recognized that the Pereira decision was rendered in 1909. Today, problems of income tax are of the utmost importance in considering the estate management. The tax factor now is of equal importance in the investment of stocks. The desire for immediate profit to one in a high income tax bracket necessarily is subordinated to considerations of growth and capital gains ot minimize thase taxes. Federal imcome, estate taxes, and inheritance taxes were not of any significance at the time of Pereira.

The Perira formula, when applied to the present factual situation, appears obviously objectionable, as it accepts a fictional return on the fixed assets of husband and ignores the actual greater return which will be realized y husband's skill and effort in the management of the estate after giving consideration to tax problems and growth factors.

I have also concluded that the court erred in determining that under Van Camp there was no community estate created by fixing husband's earnings at 1% per year of his separate estate, or $17,000 per year, and then charging all of the community expenses against these earnings. These community living ewpenses approximated $2,000 per month-$24,000 per year. By this reasoning the community living expenses would exceed husband's earnings by several thousand dollars per year. It is conceded that husband paid all of the community expenses from the income from his separate property.

Normally the finding of the trial court that certain property is separate or community will be upheld on appeal if such finding is supported by sufficient evidence in the record. (Haldeman v. Haldeman, supra, 202 Cal.App.2d 498, 21 Cal.Rptr. 75; Somps v. Somps, 250 Cal.App.2d 328, 336, 58 Cal.Rptr. 304; Millington v. Millington, 259 Cal.App.2d 896, 915, 67 Cal.Rptr. 128.)

A number of cases (Estate of Neilson, 57 Cal.2d 733, 22 Cal.Rptr. 1, 371 P.2d 745; Thomasset v. Thomasset, 122 Cal.App.2d 116, 264 P.2d 626; Kenney v. Kenney, 128 Cal.App.2d 128, 274 P.2d 951; Mears v. Mears, 180 Cal.App.2d 484, 4 Cal.Rptr. 618; Hill v. Hill, 82 Cal.App.2d 682, 187 P.2d 28) held that it is presumed that the family expenses are paid from the community rather than from separate property of a spouse. These cases hold, in applying this presumption, that to the extent that living expenses during the marriage are proven they may be deducted from the increased value of the separate property or the amount attributed to community earnings. (See also Millington v. Millington, supra, 259 Cal.App.2d 896, 67 Cal.Rptr. 128.)

The court in See v. See, 64 Cal.2d 778, 784–786, 51 Cal.Rptr. 888, 892, 415 P.2d 776, 788 seemingly disproved this theory and stated: ‘ the trial court also followed the theory that a husband who expends his separate property for commundity expenses is entitled to reimbursement from community assets. This theory likewise lacks support in the statutory or case law of this state. A husband is required to support his wife and family. (Civ.Code, §§ 155, 196, 242.) Indeed, husband and wife assume mutual obligations of support upon marriage. These, obligations are not conditioned on the existence of community property or income. The duty to support imposed upon husbands by Civil Code section 155 and upon wives by Civil Code section 176 requires the use of separate property of the parties when there is no community property. There is no right to reimbursement under the statutes.

‘Likewise a husband who elect to use his separate property instead of community property ot meet community expenses cannot claim reimbursement. In the absence of an agreement to the contrary, the use of his separate property by husband for community purposes is a gift to the community. The considerations that underlie the rule denying reimbursement to either the community or the husband's separate estate for funds expended to improve a wife's separate property (Dunn v. Mullan, 211 Cal. 583, 589, 296 P. 604, 77 A.L.R. 1015) apply with equal force here. The husband has both management and control of the community property (Civ.Code, §§ 172, 172a) along with the reght to select the place and mode of living. (Civ.Code, § 156.) His use of separate property to maintain a standard of living that connot be maintained with community resources alone no more entitles him to reimbursement from after-acquired community assets than it would from existing community assets.

‘* * * The basic rule is that the party who uses his separate property for community purposes is entitled to reimbursement from the community or separate property of the other only if there is an agree ment between the parties to that effect. To the extent that they conflict with this rule Mears v. Mears, supra, 180 Cal.App.2d 484, 4 Cal.rptr. 618; Kenney v. Kenney, supra, 128 Cal.App.2d 128, 274 P.2d 951; Thomasset v. Thomasset, supra, 122 Cal.App.2d 116, 264 P.2d 626; and Hill v. Hill, 82 Cal.App.2d 682, 187 P.2d 28, are disapproved.’

The issue before us is one of first impression. The majority opinion of this court has ruled in effect that if earnings are attributable to the husband's labor, efforts and skills devoted to his separate estate, those earnings wer wxhausted because they were expended for community expenses. This determination ignores the fact that the husband here at no time was on a fixed salary. He treated all income as his own and retained it in his separate accounts. He paid all bills from his separate estate. The allowance to the wife for the family bank account to defray current living expenses had its source in his separate income. The wife had no legal right to prevent the husband, who was the legal manager fo the community, from spending any amount he pleased on living expenses. The amount given the living expenses of the husband and wife and the children. She, undoubtedly over the years, was unaware that the husband's estate could be charged with a salary for his efforts in enhancing his estate or that such salary was community property. She did not consiously forego future security in favor of present consumption. While having no legal right to prevent the husband's expenditures, she could have directed her efforts to enterprises for her personal benefit if she had been made aware that there was no community reserve to which she might look in the event of her husband's death or a divorce. It is true that the wife benefitted by the high standards of living. She also had the right to alimony, but alimony is a poor substitute for an independent share of the community estate. The amount of alimony is usually a discretionary matter with the trial judge. Rarely will an appellate court substitute its opinion, even when a minimum a mount is awarded. Also, alimony is troublesome at times to collect, or to increase in the event of additional needs.

It appears reasonable to follow the established rule that the husband, as the manager of the community, may spend whatever amount he deems necessary for community expenses. But, if he intends to exhaust community earnings while working to keep his separate property intact, he should obtain the wife's acquiescence to such course, by some agreement to that effect. Absent that agreement, as here, his use of his separate estate for community expenses should be considered a gift to the community. To so rule, is not a hardship on the husband, as fewer demands would be made by wife in the event of divorce and less alimony would be decreed in view of the award to the wife of a community property interest. This conclusion seems more in keeping with the general tendency expressed by our Legislature in successive amendments to our code enlarging the rights of the wife. (See 4 Witkin, Communtity Property, § 2, p. 2706.) This conclusion is also but a moderate extension of See v. See, supra, and is in keeping with the underlying therory of our community property system to afford protection for the wife. (See also Weinberg v. Weinberg, 67 Cal.2d 557, 63 Cal.Rptr. 13, 432 P.2d 709; Bare v. Bare, 256 Cal.App.2d 684, 691, 64 Cal.Rptr. 335; Community Property: Commingled Accounts and the Family-Expense Presumption, 19 Stan.L.Rev., pp. 661–662.)

I would, therefore, adjudge that the amount fixed as husgand's compensation for his labors and efforts in preserving and enhancing his separate property be declared community property and there be no set-off for the family expenses the husband paid from his separate property. The determination by the trial court that there was no community property as a result of the husband's services is therefor reversible error.


1.  Since the filing of this appeal appellant has died and the Bank of America, as executor of her estate, has been substituted in her place. However, for clarity, the opinion will refer to the wife as the appellant.

CALDECOTT, Associate Justice.

DRAPER, P. J., concurs.

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