Bourne v. Lord
| Decision Date | 22 February 1973 |
| Docket Number | CA-CIV,No. 2,2 |
| Citation | 19 Ariz.App. 228,506 P.2d 268 |
| Parties | Kenneth J. BOURNE, Individually and as Administrator of the Estate of Nola E. Lord, Deceased, and as her son and heir, Appellant, v. Lynn H. LORD, a widower, Appellee. 1260. |
| Court | Arizona Court of Appeals |
May & Dees by Willis R. Dees, Tucson, for appellant.
Edward Aboud, Tucson, for appellee.
The subject controversy concerns itself with the status of a promissory note and mortgage, the renewal thereof, and the proceeds therefrom. Appellant, administrator of the Estate of Nola E. Lord, deceased, claimed that it was community property of the decedent and appellee, Lynn H. Lord. Appellee's position, on the other hand, was that it was his sole and separate property. The trial court ruled in appellee's favor, hence this appeal.
Appellee and the decedent were married in 1952, at which time appellee owned a section of land in Pima County, together with certain grazing leases. In 1955, appellee entered into an agreement for the exchange of this property (designated sale price $18,455) for a trailer court (sale price $35,000). The agreement recited that the parties agreed to transfer their equities in the respective properties, one for the other, and that appellee agreed to assume and pay the existing mortgages on the trailer court property. These mortgages were therein described as approximately $8,300 each. Appropriate documents were executed by the parties to the transaction. The trailer court deed, however, named Lynn H. Lord and Nola E. Lord, husband and wife, as grantees. Appellee neither directed that the deed be prepared in this form nor did he see it at the time of closing. The escrow agent retained both deeds for recording and they were to be mailed to the respective parties after recording. According to appellee, he never asked for the deed since he took it for granted that it had come in the mail and that his wife had filed it away. Appellee and his wife took possession of the trailer court and operated it together. In addition, appellee worked evenings at the Panda Steak House. These earnings together with trailer court income, were deposited in one bank account and these funds were used for mortgage payments and the couple's living expenses.
Subsequently, in 1958, appellee arranged to borrow $25,000 to pay off the existing mortgages and other debts. A note and mortgage for the $25,000 was executed by both appellee and his wife. Appellee explained his wife's signature:
The Lords continued to operate the trailer court until 1960 when it was sold to the Golden Pin Investment Company, Inc., an Arizona corporation. The deed was executed by Lynn H. Lord and Nola E. Lord, husband and wife. Consideration for the conveyance was payment of the remaining balance on the $25,000 mortgage, approximately $2,000 in cash, and a promissory note, payable in 180 days in the principal amount of $49,875.14. The note was secured by a mortgage on the property. 1
Shortly thereafter, Mrs. Lord went to Oklahoma where she lived until her death in 1968. She and her husband corresponded and he sent her certain sums of money. (The record does not reflect the exact amount.) In November, 1960, appellee wrote to his wife and in the letter stated:
Appellee's explanation, when asked what he meant by 'my part', was:
In January, 1961, a document addressed to Golden Pin Lanes, Inc. and signed by Lynn and Nola Lord, was delivered to the Golden Pin's attorney. It stated:
'You are hereby instructed and directed to issue that portion of preferred stock of Golden Pinn Lanes, Inc., an Arizona corporation, that we, the undersigned, are entitled to receive in the following manner, to-wit:
One-half to Lynn H. Lord, as his sole and separate property;
One-half to Nola E. Lord, as her sole and separate property.'
No stock certificates were ever issued and Golden Pin's attorney testified that he advised appellee to keep his mortgage and forget about the stock because of the corporation's precarious position.
Appellee admitted knowing that his wife's name appeared on all the documents involved in the Golden Pin transaction. He explained that whenever he objected and pointed out that the property was his alone, he was told that it was necessary to have his wife's name included. His 'understanding' was that his wife's name was a mere formality.
There was testimony as to a conversation with appellee shortly after his wife left for Oklahoma. According to the witness, appellee told him that he gave his wife one-half to get rid of her. The record reflects that at the time of trial appellee had received almost $15,000 from Golden Pin. Appellant claims that one-half of the sums paid to appellee and one-half of the Golden Pin's note and mortgage belonged to the estate of Nola Lord. He predicates his claim of a one-half interest on two theories: (1) that the note and mortgage were community property, or (2) that appellee had made a gift of the one-half interest to the decedent.
Both parties agree that there is a legal presumption that all property acquired by either spouse during coverture takes on a community character. Further, that in order to overcome this presumption, the evidence must be clear, satisfactory and convincing. Appellee had the burden of establishing the separate character of the subject property. In re Harber's Estate, 104 Ariz. 79, 449 P.2d 7 (1969).
The trial court concluded that appellee had sustained his burden of overcoming the presumption that the property was community, and therefore our inquiry is limited to whether there was substantial evidence to support such finding. Campbell v. Campbell, 62 N.M. 330, 310 P.2d 266 (1957). Appellee established that the trailer court was acquired by an exchange of his separate property. Thre is no evidence whatsoever that any community funds were expended at the time of acquisition. Property acquired after marriage in exchange for property owned before marriage remains separate property. Nace v. Nace, 104 Ariz. 20, 448 P.2d 76 (1968); Flynn v. Allender, 75 Ariz. 322, 256 P.2d 560 (1953). Appellant places much reliance on the fact, however, that the conveyance of the trailer court was to both husband and wife. Appellee testified, and this is uncontroverted, that the wife's name was inserted neither at his direction nor with his knowledge. The form of the deed therefore did not alter the status of the property as separate. Porter v. Porter, 67 Ariz. 273, 195 P.2d 132 (1948). Recitals in a deed are merely prima facie evidence of ownership and did not preclude the trial court from...
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