Abraham v. Abraham

• Decision Date: 07 May 1956
• Docket Number: No. 42422,42422
• Citation: 230 La. 78,87 So.2d 735
• Parties: William ABRAHAM v. Elvira Monnerjahn ABRAHAM.
• Court: Louisiana Supreme Court

Page 735

87 So.2d 735

230 La. 78

William ABRAHAM v. Elvira Monnerjahn ABRAHAM.

No. 42422.

Supreme Court of Louisiana.

May 7, 1956.

Clarence Dowling, New Orleans, for appellant.

Hammett & Bertel, New Orleans, for appellee.

McCALEB, Justice.

This is a suit by a husband against his wife for an accounting and settlement of the community of acquets and gains which was dissolved by a decree of separation from bed and board on May 15, 1953. The trial court, after hearing evidence in support of the respective claims of the parties, awarded judgment in favor of plaintiff for $1,011.46 and dismissed defendant's reconventional demand. Plaintiff is appealing from the judgment and defendant has answered, reiterating the claims urged by her below.

Plaintiff is the second husband of defendant. She was first married to John W. Schroeder, who died on July 17, 1945, being survived by defendant and a son, Curtis J. Schroeder, issue of the marriage and of age. Mr. Schroeder's succession, consisting entirely of community property, was opened in the Civil District Court and defendant, as surviving spouse in community, was placed in possession of an undivided one-half interest of all of the property and was recognized as usufructuary of the remaining one-half. The son, Curtis J. Schroeder, was recognized as the sole heir of his father and was placed in possession of an undivided one-half interest, subject to his mother's usufruct. Included in the assets of the succession was a going concern, known as 'Helshro Furniture and Appliance Company' (hereinafter referred to as Helshro), an unincorporated mercantile business conducted by defendant and her late husband. Following his death, defendant continued to operate the business in the same manner as formerly, she being the general manager, credit manager, cashier and chief saleswoman of the enterprise. Her son was attending college during most of this period and has since become a professor at Louisiana State University.

Plaintiff and defendant were married on March 16, 1946 and lived together about seven years. On May 15, 1953, a judgment of separation from bed and board was rendered in favor of plaintiff which reserved the rights of both parties to all claims for community and separate property. During the existence of the community, defendant continued to operate Helshro for herself and her son. ¹ The business prospered in these years. At the time of her marriage to plaintiff, defendant's share of the capital and undivided profits was valued at $15,954.53, while, at the dissolution of the community, the figure had increased to $46,824.47.

The principal issue in the case involves the increase or amelioration of defendant's share in the Helshro business during the marriage, plaintiff's claim being that this increase, amounting to $30,869.94, inured to the community and that he is entitled to one-half of it, or $15,434.97. This contention is predicated to some extent on Article 2386 of the Civil Code but largely on Article 2408.

We have no difficulty whatever in resolving that Article 2386 of the Code, ² as amended by Act 286 of 1944, is without pertinence to this phase of the case. The increase of the value of defendant's interest in Helshro is not a fruit of her paraphernal property within the meaning of the law. See Daigre v. Daigre, 228 La. 682, 83 So.2d 900 and authorities there cited.

We therefore pass on to a consideration of the applicability of Article 2408 of the Civil Code to the case. It provides:

'When the separate property of either the husband or the wife has been increased or improved during the marriage, the other spouse, or his or her heirs, shall be entitled to the reward of one half of the value of the increase or ameliorations, if it be proved that the icnrease or ameliorations be the result of the common labor, expenses or industry; but there shall be no reward due, if it be proved that the increase is due only to the ordinary course of things, to the rise in the value of property, or to the chances of trade.' (Italics ours.)

Counsel for defendant proclaim that this Article is irrelevant to the increase in the value of defendant's interest in Helshro for three reasons: first, because plaintiff had nothing whatever to do with the increase; second, because the increase resulted from the ordinary course of things, from the rise in value of the property or from the chances of trade, and third, that, inasmuch as Helshro is a commercial partnership, the increase in its value cannot be claimed for the community.

Considerable evidence was adduced below on the first proposition as to whether plaintiff rendered services having causal relation to the increase in capital and undivided profits of the enterprise. Plaintiff testified at length respecting his employment at the store as a salesman of appliances, a solicitor and a buyer (all without salary). His statement is corroborated by some witnesses but denied by others. The judge resolved this conflict against plaintiff, holding that plaintiff's connection with the business was 'very vague and indefinite, and not very consequential'. By giving due weight to this finding, we will assume that plaintiff made no positive contribution to the enhancement in value of Helshro during the existence of the community. But this circumstance alone does not render Article 2408 inappropriate to the case for the reason that 'the common labor, * * * or industry' referred to in the Article does not necessarily mean that the reward for the increase will not be given to a spouse who does not individually contribute his labor or industry. The phrase 'common labor, * * * or industry' simply connotes community labor or industry as the word 'common', as used in the Civil Code, is synonymous with 'community'. See Article 2334, defining separate and common property. Accordingly, it suffices, under Article 2408, that it be shown that the increase in the separte property has resulted from community labor or industry, that is, the labor of either spouse during the existence of the marriage. It was so decided in Succession of Ferguson, 146 La. 1010, 84 So. 338, where the increase in value of the deceased husband's interest in a commercial partnership (a drug store) was held to fall to the community despite the fact that the wife contributed no direct part in effectuating the increased value. ³

In Beals v. Fontenot, 5 Cir., 111 F.2d 956, 960, the question was whether the community was entitled to the increase in value of certain corporate stock brought into the marriage by the husband, it being contended that, since the husband had served as a director and active officer of the corporation until his death, the increase was attributable to his labor and, therefore, became community property under Article 2408 of the Civil Code. The court denied this claim, holding, in accord with the view of the district judge, that, since the community had been adequately compensated by salary and dividends for the husband's services to the corporation, the increase in the value of the stock could not be attributed to "the common labor, expenses or industry' of the community.' Thus, the ruling rested on a determination of fact. Implicit in the decision is the assumption that, had it been shown that the husband's efforts contributed to the increase in value of his stock, one-half of such increase would have been due the wife under Article 2408.

Hence, it is perceived that, if either husband or wife substantially contribute to the amelioration of the separate property of one of them during the marriage by his or her labor or industry, the spouse who does not own the separate property is entitled to the reward of one-half the value of the increase and it is immaterial whether the enhancement is attributable to his or her personal effort. The important circumstance is that the contribution must result from community labor, industry or expense. ⁴

Defendant's contention that the increase of the capital and undivided profits of Helshro is 'due only to the ordinary course of things, to the rise in the value of property, or to the chances of trade' is not substantial. It is clear that the growth and success of the business is chiefly due to the efforts of defendant, who has been in sole control of its management over the years, although there can be little doubt that general prosperity and inflationary values have played a prominent part in the accretion. However, this fact does not render Article 2408 of the Code less appropriate for, when it is shown that community labor, expenses or industry has provided an increase to the separate property, the burden shifts to the owner of the separate property to rebut this proof and affirmatively establish that the increase is due only to the ordinary course of things, rise in values or chances of trade. ⁵

Finally, assuming that Helshro is a commercial partnership between defendant and her son (although we have some doubts on this score), there is no merit in defendant's contention that such circumstance precludes the application of Article 2408 of the Code. The legal status of the business has no relevancy whatever; the only inquiry is whether the value of the separate property of a spouse, whether it be in the form of stock or otherwise, has been enhanced by the labor or industry of the community. Succession of Ferguson and Beals v. Fontenot, supra.

We accordingly conclude that plaintiff is entitled to recover from defendant the sum of $15,434.97, or one-half of the amount of the increase in value of defendant's share of Helshro during the existence of the community.

The inventory taken at the dissolution of the community exhibits cash balances in various bank and homestead accounts in a total amount of $34,250.20. Some of the accounts were joint accounts between defendant and her son, some were in her name alone and one was in defendant's name for her son. Plaintiff contends that, of this total,...