IN RE: MARRIAGE OF David Earl and Lydie D. MOORE. (1980)

David Earl Moore filed a petition for dissolution of marriage to Lydie D. Moore. An interlocutory judgment of dissolution of marriage was entered. The appeal is from the judgment.

The facts are not in dispute. Approximately eight months prior to the marriage, wife purchased a home located at 121 Mira Way in Menlo Park. The purchase price of the home was $56,640.57. Wife made a down payment of $16,640.57 and secured a loan for the balance of the purchase price. Prior to the marriage, wife made seven monthly payments on the mortgage which reduced the principal of the loan by $245.18.

During the marriage, husband and wife lived together in the home. They made additional payments on the mortgage from community funds which further reduced the principal of the the loan by $5,986.20.¹

After separation and before trial, wife made an additional seven payments on the mortgage from her separate property which reduced the principal by $581.07.

At the time of trial, the home was valued at $160,000, which represents an increase in value of $103,359.43.

I

Appellant contends that the trial court's holding, that the subject property is the separate property of the respondent and that the rights of the parties are to be arrived at upon equitable principle, is error.

Both parties agree that, by virtue of the several community property payments made during the course of their marriage, husband has obtained an interest in the home. The trial court has designated husband's interest as an “equitable charge on/right,” however, according to California law, husband's interest should be characterized as a community property interest in the home. (See Forbes v. Forbes (1953) 118 Cal.App.2d 324, 325, 257 P.2d 721.) The thrust of the dispute arises over the computation of husband's community property interest in the home.

Husband argues that the community property interest should be based upon the full amount of the community property payments toward the home, which include interest, taxes and insurance, rather than on the amount by which the payments reduce the principal. Husband relies upon Vieux v. Vieux (1926) 80 Cal.App. 222, 251 P. 640, where the court, in determining the community property interest in the home, included payments attributable to interest and taxes. It appears, however, that the inclusion by the court of interest and taxes in its computation of the community property interest is inadvertent error. The Vieux court stated the rule as follows: “Thus property purchased by one spouse before marriage is separate property . . . and this is true though a part of the purchase price is not paid until after marriage, in the absence of a showing that any part of the balance was paid with community funds. In any event it would be community property only to the extent and in the proportion that the purchase price is contributed by the community.” (Id., at p. 229, 251 P. at p. 643. See also In re Marriage of Aufmuth (1979) 89 Cal.App.3d 446, 457, 152 Cal.Rptr. 668.) Thus, in determining the community property interest, taxes, insurance and interest payments will not be considered.

Both parties agree that because community property funds were used to make some of the payments the appellant has obtained a community property interest in the home. The problem presented is the extent of that interest. Estate of Neilson (1962) 57 Cal.2d 733, 744, 22 Cal.Rptr. 1, 371 P.2d 745, 752, states the rule for cases in which the property is purchased prior to marriage and the down payment and some of the monthly payments are made with separate funds, and then following the marriage payments are made from community funds. In Neilson, the court said: “ ‘(T)he rule developed through the decisions in California gives to the community a pro tanto community property interest in such property in the ratio that the payments on the purchase price with community funds bear to the payments made with separate funds.’ ” (Emphasis added; quoting Forbes v. Forbes, supra, 118 Cal.App.2d 324 at p. 325, 257 P.2d 721; Garten v. Garten (1956) 140 Cal.App.2d 489, 494, 295 P.2d 23.)

“If the fair market value has increased disproportionately to the increase in equity, the community is entitled to participate in that increase in a similar proportion.” (In re Marriage of Jafeman (1972) 29 Cal.App.3d 244, 256-257, 105 Cal.Rptr. 483, 491.)

Applying that rule to the present case we find that the purchase price was $56,640.57. Respondent, from her separate funds made the down payment, secured a loan for the balance of the purchase price and also made several monthly payments. Community property funds contributed the sum of $5,986.20, to the reduction of the mortgage, which in effect, is a contribution to the purchase price. The parties agree that the community property has an interest in the subject property equal to 10.57 percent² of the value of the property. The value of the property at the time of trial was $160,000. Thus the value of the community property pro tanto interest in the property is $16,911.29. Once the community property pro tanto share is determined we see no need to complicate the computations by applying the percentage to the increase in value and then adding the community property contribution. A more accurate and simple method is to apply the percentage directly to the value of the property at the time of trial. The result will be the same.

Thus, the community property interest is $16,911.29, the separate property interest is $109,901.16, and the mortgage is $33,187.55, which totals $160,000, the value of the property at time of trial. The community property interest ($16,911.29) is to be shared equally by the parties. (Civ.Code, s 4800, subd. (a).)

These calculations do not follow the method used in In re Marriage of Aufmuth, supra, 89 Cal.App.3d 446, 152 Cal.Rptr. 668, as the factual situation differs. In Aufmuth, the property was acquired by the parties during the marriage. The Aufmuth court determined the respective interests of separate property and community property from the payments made at the time of the purchase, not the total payments made on the purchase price. In the present case the property was purchased prior to marriage and all payments made at the time of the purchase were from separate funds of respondent. If the Aufmuth formula were used, the respondent would have a 100 percent interest in the property and the community would have no interest in the property, even though $5,986.20 of community funds were invested. This would be contrary to the holding in Estate of Neilson, supra, Forbes v. Forbes, supra and Garten v. Garten, supra.

II

With regard to several community property items the court found that husband deliberately misappropriated such items without valuable consideration and without written consent of wife. (See Civ.Code, s 5125, subd. (b).) Therefore, the court awarded to wife one-half the value of the community property misappropriated by husband.

An exception to the equal division of community property rule under the Family Law Act (Civ.Code, s 4000 et seq.) is provided by Civil Code section 4800, subdivision (b)(2), which allows “the court . . . (to) award, from a party's share, any sum it determines to have been deliberately misappropriated by such party to the exclusion of the community property . . . interest of the other party.”

Husband contends there was insufficient evidence to support the court's finding. We agree. “When a finding of fact is challenged upon the ground that the evidence is insufficient to sustain it, the power of an appellate court begins and ends with the determination whether there is any substantial evidence, contradicted or not, which supports the finding.” (Estate of D'India (1976) 63 Cal.App.3d 942, 950, 134 Cal.Rptr. 165, 169.)

The evidence most favorable to wife, which we must accept as true (see Estate of Teel (1944) 25 Cal.2d 520, 527, 154 P.2d 384), discloses that several community property items were missing from the home at the time of separation. Wife and husband both testified that during several years prior to separation, certain community property items would disappear from the home. Husband stated that none of the items are in his possession, nor does he know the present location of any of the items. Husband told wife that he had sold a specific item of community property in order to purchase liquor, but wife was not able to recall which item. She does not know to whom the item was sold, nor the amount husband received from the sale. Evidence was received which strongly indicates that husband has had a serious drinking problem throughout the later eight years of marriage. Wife testified that husband often blacks out and has considerable difficulty remembering things.

The evidence simply fails to establish that husband deliberately misappropriated certain items of community property. There is no evidence concerning which items were actually sold by husband, although giving wife the benefit of every reasonable inference (see In re Marriage of Mix (1975) 14 Cal.3d 604, 614, 122 Cal.Rptr. 79, 536 P.2d 479), we may presume that the items “missing” from the home at the time of separation were the same items husband sold. However, assuming the truth of that presumption, there is no evidence indicating the amount husband received for any item he may have sold. Nor is there any evidence to doubt that husband received valuable consideration for each sale, as the court specifically found that he disposed of the items in order to purchase alcoholic beverages. In order to determine misappropriation employing the standard provided by Civil Code section 5125, subdivision (b), upon which the trial court relied, there must be sufficient facts in evidence disclosing which items of community personal property were disposed of and the consideration received for each item.

Further, the fact that one party to a marriage uses community property to make purchases for his own consumption that the other party does not approve of, whether the purchases be groceries or liquor, does not constitute a deliberate misappropriation of community property.

The judgment is reversed and the cause is remanded to the trial court for further proceedings in accordance with this opinion.

FOOTNOTES

1.  Although an issue on appeal concerns whether the court should have taken into consideration the payments made by the community towards interest, taxes and insurance on the home, there was no evidence admitted at trial on the amount of community funds expended for such purposes.

2.  The actual percentage is 10.5687 plus percent.

CALDECOTT, Presiding Justice.

CHRISTIAN and POCHEE, JJ., concur.