IN RE: the ESTATE of James H. GOODHEW (1959)

This is an appeal by Geneva S. Goodhew, widow of James H. Goodhew, Jr., from a judgment in a proceeding to determine heirship (Prob.Code, § 1080) in which the court found certain property held by the decedent at the time of his death was his separate property.

The appellant and the decedent were married on August 2, 1952. In September of 1946, decedent and his brother each purchased an undivided one-half interest in a piece of income property on Pico Boulevard for a total purchase price of $25,000. This was paid for in cash except for an $8,600 first deed of trust. The indebtedness was reduced at the rate of about $85 a month and, at the time of the decedent's death, $880.04 remained unpaid. This balance was paid off by decedent's estate and his brother, 50 per cent each. Thereafter, the property was sold for $21,000. During the existence of their marriage, decedent paid a total of $1,572 toward reduction of the above encumbrance.

In May of 1946, decedent purchased an insurance policy on his life in the face amount of $10,000. During the marriage, decedent paid $30.84 a month as premiums on the above policy.

At the time of his death, James H. Goodhew, Jr., was president of the Goodhew Ambulance Service, Inc., and was receiving a salary of $1,220 per month. Decedent and his brother owned all of the stock of the corporation. On July 14, 1950, the decedent, his brother, and the Goodhew Ambulance Service, entered into a written agreement, paragraph 9 of which provides as follows:

‘9. Upon the death of either James Henry Goodhew, Jr., or William I. Goodhew, the Corporation agrees to pay to his estate the annual salary paid to such decedent at the time of his death, said payments to be made monthly and to continue for a period of three years from the date of death, in consideration of the services which said decedent has heretofore rendered to the Corporation, and in consideration of the services to be rendered to the Corporation by each of them.’

The decedent and his brother also owned income property on Hoover Street which was acquired prior to the subject marriage.

After the appellant and the decedent were married, he deposited his salary from the Goodhew Ambulance Service, as well as the rentals from the real property, into a joint checking account in the name of appellant and himself. Either could draw checks on this account. All expenditures paid by check after marriage were from this account; these included, inter alia, community living expenses, payments on the deed of trust on the Pico property, life insurance premiums, child support payments for a minor child of a previous marriage, and payments to an ex-wife pursuant to a property settlement agreement.

On August 20, 1955, James H. Goodhew, Jr., died testate, leaving as his sole heirs and beneficiaries under his last will and testament the appellant, his widow, and his children by previous marriages, James H. Goodhew, III, Marcia Goodhew Wilson and D. Nicholas Goodhew, a minor child.

Pursuant to section 1080, Probate Code, the executor of the decedent's estate filed a petition for a decree determining interests therein. The appellant filed a claim of interest in the estate and claimed, inter alia, that (1) the money due under the agreement of July 14, 1950, is community property and she is entitled to one half thereof; (2) community property contributed to the payment of premiums on the $10,000 insurance policy and therefore she is entitled to a portion of the proceeds of such insurance, and (3) community property was used to reduce the indebtedness on the Pico property and therefore she is entitled to an interest in the proceeds from the sale of the property.

The trial court found that all payments on the Pico encumbrance and for premiums on the $10,000 insurance policy were made from decedent's separate property. With respect to rights under the July 14 agreement, the court found that the agreement ‘was executed prior to his [decedent's] marriage to [the appellant] * * * and was executed among other things in consideration of certain agreements therein contained between the parties thereto respecting the sale or disposition of the stock of Goodhew Ambulance Service, Inc., owned by them and past services rendered to Goodhew Ambulance Service, Inc., by said decedent prior to his marriage to [appellant] * * * and all right, title and interest thereto, all benefits to be derived therefrom and all payments to be made by said Goodhew Ambulance Service, Inc. to said decedent's Estate pursuant to the terms and provisions thereof were at all times material hereto and now are the separate property of said decedent and said decedent's Estate.’

As grounds for reversal, appellant argues in effect that the above findings are not supported by the evidence and that the court erred in receiving parol evidence with respect to the meaning of the July 14 agreement.

The appellant specifically attacks those findings which state that payments made on the Pico property and premiums paid on the $10,000 insurance policy after marriage were from the decedent's separate property. It is well settled that ‘[w]hen a finding of fact is attacked on the ground that there is not any substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the finding of fact. (Citation).’ Grainger v. Antoyan, 48 Cal.2d 805, 807, 313 P.2d 848, 850; Hunter v. Croysdill, 169 Cal.App.2d 307, 337 P.2d 174.

In the instant case, from August 2, 1952, through August 20, 1955, the period of coverture, decedent's share of the income from the Pico and Hoover Street properties was in the gross amount of $9,868.13. This money was clearly his separate property (Civ.Code, § 163) and was not converted into cummunity property upon being deposited in the same bank account with community funds for the obvious reason that the amount of separate funds so deposited can be ascertained and therefore can be traced. Thomasset v. Thomasset, 122 Cal.App.2d 116, 124, 264 P.2d 626. During this same period, decedent paid some $1,141 in premiums on the insurance policy in question, and his share of the payments on the trust deed amounted to approximately $1,572. It is clear, therefore, that decedent had available more than sufficient separate income with which to make the above payments and it would not have been necessary for him to resort to community property. The trial court found that these payments were in fact made from his separate income.

It was, of course, for the trial court to draw reasonable inferences from the testimony. Such as, for example, that it would be natural for the decedent to use a portion of the income received from the Pico property to reduce the indebtedness on that very property. Thus the Pico property would be taking care of itself, in accordance with a plan that is frequently followed. It must also be remembered that the insurance policy in question was decedent's separate property at the time of his marriage to appellant; was payable to his estate; and that thereafter he did not change the beneficiary. Thus the court could infer that he intended to retain the same as separate property in his estate. To accomplish this the court could properly conclude that he intended to and did make the premium payments out of separate property.

Based on the evidence referred to and the inferences reasonably to be drawn therefrom, it cannot be said as a matter of law that the challenged findings do not have adequate evidentiary support.

Appellant argues, however, that a further finding made by the trial court that all community property income was expended during the marriage in payment of living expenses is not supported by the evidence. The findings previously discussed amply support the judgment with respect to the Pico property and the $10,000 insurance policy. As noted above, these findings are supported by substantial evidence. This being the case, other findings may be disregarded. American National Bank of San Francisco v. Donnellan, 170 Cal. 9, 15, 148 P. 188; Harkins v. Fielder, 150 Cal.App.2d 528, 533, 310 P.2d 423; Logan v. Forster, 114 Cal.App.2d 587, 602, 250 P.2d 730, 739. As stated in Logan v. Forster, supra: ‘If one finding, sustained by sufficient evidence, will support the trial court's judgment * * * an appellate court will presume that the judgment was predicated on such finding, and questions relative to other findings become immaterial upon appeal and may be disregarded.’

With respect to the July 14 agreement, the trial court, after receiving parol evidence, found that payments provided for pursuant to paragraph 9 were the separate property of the decedent and the decedent's estate. If all or part of this agreement were ambiguous or uncertain, parol evidence would clearly be admissible as an aid in its interpretation. Chastain v. Belmont, 43 Cal.2d 45, 51, 271 P.2d 498. Such evidence, however, where otherwise admissible, may not be considered to vary or modify the terms of the agreement, but only to show the true intent of the parties. Beneficial Fire & Casualty Ins. Co. v. Kurt Hitke & Co., 46 Cal.2d 517, 524, 297 P.2d 428. As stated in Barnhart Aircraft, Inc. v. Preston, 212 Cal. 19, 22–23, 297 P. 20, 21: ‘This rule of evidence is invoked and employed only in cases where upon the face of the contract itself there is doubt and the evidence is used to dispel that doubt, not by showing that the parties meant something other than what they said, but by showing what they meant by what they said.’ See also Barham v. Barham, 33 Cal.2d 416, 423, 202 P.2d 289.

Paragraph 9 in certain respects is uncertain. For instance, was decedent's estate to be paid $1,220 a month, his gross salary, or $1,025.34, his net salary? Parol evidence would properly be received on this question. However, there was no doubt, uncertainty, or ambiguity with respect to the consideration or reason why the corporation was to make these payments. The agreement provides ‘* * * in consideration of the services which said decedent has heretofore rendered to the Corporation, and in consideration of the services to be rendered to the Corporation. * * *’ It should also be noted that paragraph 1 of this agreement contained a promise by the decedent that he would ‘continue to furnish * * * [his] services to the Corporation in the same manner * * * [he is] currently doing as long as the interests of the Corporation require * * * [his] services, and as long as * * * [he is] able to perform the same.’ It is clear, therefore, that the trial court was not justified, on the grounds of ambiguity or uncertainty, in receiving parol evidence to the effect that the real consideration for the agreement to make the payments to the decedent's estate was other than that specifically stated in the agreement itself. The agreement was entirely free from doubt in this regard.

Respondents argue, however, that parol evidence is admissible to show what the real consideration for a contract actually is despite the fact that this may contradict the expressed consideration recited in the agreement. An exception to the parol evidence rule does permit the introduction of such evidence for the purpose of showing that the true consideration is other and different from that expressed in the written agreement. See Code Civ.Proc. § 1962 (2); Hendrick v. Crowley, 32 Cal. 471, 472, 476; Blonder v. Gentile, 149 Cal.App.2d 869, 874, 309 P.2d 147.

This exception to the general rule does not apply in all cases. As stated in Hendrick v. Crowley, supra, 31 Cal. at page 477: ‘But this is not a rule but an exception to the rule that the legal effect of a written instrument cannot be varied or defeated in whole or in part by parol evidence. The exception should never be allowed to override the rule, for that would be to dispense with the rule entirely and preserve only the exception.’ The true nature of the consideration may not be shown by parol evidence where, ‘* * * in doing so the legal effect or operation of the instrument for the purposes therein designated would be defeated, or, in other words, where the statement of consideration is of a contractual nature and more than a mere statement of fact or receipt of payment.’ (18 Cal.Jur.2d, pp. 755–756.) In Harding v. Robinson, 175 Cal. 534, 542, 166 P. 808, 811, our Supreme Court discussed the question as follows: ‘The well recognized limitation upon the right of a party to vary by parol evidence the terms of a contract and prove the true consideration is well declared as follows: ‘Where the statement in a written instrument as to the consideration is more than a mere statement of fact or acknowledgment of payment of a money consideration, and is of a contractual nature, as where the consideration consists of a specific and direct promise by one of the parties to do certain things, this part of the contract can no more be changed or modified by parol or extrinsic evidence than any other part, for the party has the right to make the consideration of his agreement of the essence of the contract, and when this is done the provision as to the consideration for the contract must stand upon the same plane as the other provisions of the contract with reference to conclusiveness and immunity from attack by parol or extrinsic evidence.’ (Citation.)' See also Arnold v. Arnold, 137 Cal. 291, 296–297, 70 P. 23; Koeberle v. Hotchkiss, 4 Cal.App.2d 252, 254–256, 40 P.2d 911.

The expression of consideration in the instant agreement amounted to more than a mere statement of fact or acknowledgment of a money payment and was of a contractual nature in that there was in the written agreement a direct and specific promise by the decedent to continue in the employment of the corporation (paragraph 1) and a return promise that such continued service would be compensated for in a designated manner after his death (paragraph 9). To admit parol evidence on this issue would be to alter the legal effect and operation of the written instrument and to make a new contract for the parties which would differ materially from that which was expressed in the July 14 agreement.

Therefore, giving effect to the agreement as written, without considering parol evidence, it is clear that a portion of the consideration given for the payments now in dispute consisted of the personal services of the decedent rendered after his marriage to the appellant. These services were a community asset (see, e.g., Pereita v. Pereira, 156 Cal. 1, 7, 103 P. 488, 23 L.R.A., N.S., 880) and, as a consequence thereof, appellant is entitled to a portion of the money payable under the July 14 agreement. Upon a retrial of this aspect of the case, it will be necessary for the trial court to determine the precise amount.

That portion of the judgment pertaining to the Pico property and the $10,000 insurance policy is affirmed; the judgment with respect to the July 14, 1950, contract is reversed.

FOX, Presiding Justice.

ASHBURN and HERNDON, JJ., concur.