Campbell v. Campbell

• Decision Date: 04 January 1957
• Docket Number: No. 6030,6030
• Citation: 1957 NMSC 1,62 N.M. 330,310 P.2d 266
• Parties: Dale CAMPBELL, Plaintiff, Appellant and Cross-Appellee, v. Imogene S. CAMPBELL, Defendant, Appellee and Cross-Appellant.
• Court: New Mexico Supreme Court

Page 266

310 P.2d 266

62 N.M. 330

Dale CAMPBELL, Plaintiff, Appellant and Cross-Appellee, v. Imogene S. CAMPBELL, Defendant, Appellee and Cross-Appellant.

No. 6030.

Supreme Court of New Mexico.

Jan. 4, 1957.

Rehearing Denied May 13, 1957.

Lynell G. Skarda, Clovis, for appellant.

E. P. Ripley, Santa Fe, Wesley Quinn, Clovis, M. E. Noble, Las Vegas, for appellee.

McGHEE, Justice.

The plaintiff, Dale Campbell, was awarded a divorce from the defendant, Imogene S. Campbell. Incident to this action the lower court made a determination of the character of ownership of property in the possession and control of the plaintiff, finding that certain of it was the community property of the parties and that the remainder was the separate property of the plaintiff. The plaintiff brought this appeal from the decision of the court below and the defendant has cross-appealed. The parties will be designated as they appeared below.

It may be stated generally that the plaintiff contends all of the community assets acquired by the parties were more than consumed by their living expenses and all remaining assets are his sole and separate property, acquired originally by way of gift from his father, G. A. Campbell, or with proceeds from property so given, no portion of which may be attributed to plaintiff's efforts, skill or labor.

In opposition, the defendant urges that substantially all of the property in controversy is community property and plaintiff's evidence was not sufficient to establish its separate character.

There is no issue here respecting the award of divorce or the custody and support of two minor children of the parties.

Plaintiff and defendant were married in 1931. At that time, and afterward, the plaintiff's father was a successful business man in Clovis, New Mexico. He was then the sole owner of the Clovis Coca-Cola Bottling Company and at the time of the marriage the plaintiff was employed by that company for a monthly salary of approximately $150, in which employment he continued for several years.

Although the Coca-Cola company until its sale in 1951 was always owned by the Campbell family, the interests of the owners varied over the years. The history of this business will be of particular concern when we come to examine defendant's contentions on the cross-appeal, but it is sufficient to note at this point that plaintiff first acquired an interest in the company in 1933 when it was incorporated and subsequently he became interested in it in partnership with his father.

The plaintiff also acquired interests in two other companies initiated by his father, a wholesale beer company and a creamery. The creamery was the first business undertaking of the father. In addition to its operation, and following repeal of prohibition, he started the beer company in 1933 or 1934. Both of these businesses were conducted under the father's sole ownership until 1937 when the plaintiff acquired an interest in the beer company which, in 1942, he exchanged for an interest in the creamery business. Again, as with the Coca-Cola company, the history of the acquisition and ownership of plaintiff's interests in these concerns must be the subject of detailed consideration under one of defendant's points on her cross-appeal.

All of the businesses were quite profitable and served as the major source of plaintiff's income. During the years of the marriage the plaintiff acquired extensive holdings described briefly as follows: The former residence of the parties in Clovis, and its furnishings; plaintiff's interest in a balance of $170,000 due on a promissory note secured by chattel mortgage executed by one G. C. Kerley in connection with his purchase of the Coca-Cola business in 1951, which purchase did not include the lots and building it occupies; an undivided one-half interest in the Campbell Building Company, its assets being the Coca-Cola building and lots; certain promissory notes other than the Kerley note already described; an interest of 26.83 per cent in the creamery business (Campbell Dairy & Ice Cream Co.); a ranch located northwest of Tucumcari, New Mexico, and cattle thereon; lots and buildings in Clovis and Tucumcari; proceeds from a federal income tax refund; 300 shares of common stock in the Squirt; Corporation; three automobiles; seven policies of insurance upon the lives of the parties and their children; and three cash and savings bank accounts.

The lower court did not make division of these properties, but expressly found the evidence failed to disclose the market value of a large part of the property and concluded no equitable division of the community property could be made without further evidence or agreement between the parties as to valuation.

The trial court found and adjudged the following to be the separate property of the plaintiff:

(1) An undivided 26.83 per cent interest in the Campbell Dairy & Ice Cream Co., a partnership.

(2) An undivided 1/6 interest in the Campbell Building Co., acquired in 1950. (Plaintiff actually owned a 1/2 interest in this company, but the court held a 1/3 interest acquired in 1940 was community property.)

(3) All plaintiff's interest in the Kerley promissory note secured by chattel mortgage, given for the sale of the Coca-Cola business.

(4) All plaintiff's interest in a promissory note executed in 1954 by Earl O. Woody and N. A. Bowman in the principal sum of $3,219.29, together with security, which note was given to plaintiff upon the sale of fixtures and equipment in the Central Bar at Tucumcari.

(5) One automobile.

The trial court held all the remaining properties were community property.

In the interests of clarity, we will first consider defendant's cross-appeal which urges error was committed by the trial court's refusal to find plaintiff's interest in the Kerley note, his interest in the Campbell Dairy & Ice Cream Co., and his 1/6 interest in the Campbell Building Co. acquired in 1950 constituted community property; for, if it be determined that defendant should prevail in these contentions, or any of them, such determination will have bearing upon the issues raised by plaintiff's appeal asserting the error of the trial court in finding that any of the property belonged to the community.

Before considering the cross-appeal, however, it seems necessary that we review to some extent the history of the general presumption of community property prevailing in this state and attempt to set at rest the nature of its force and effect, as it is argued by both parties that the presumption is of key significance in the case, each seeking a different effect to flow from it.

The plaintiff points to the trial court findings where first one piece of property and then another was found to have been acquired by purchase during the marital relation and found to be community property; then, reference is made to finding of fact No. 33 where it was declared with respect to some twelve items of property 'That the evidence adduced by the plaintiff does not rebut the presumption that said properties are community property.' He suggests the trial court must have been of the view the presumption was conclusive of the issue.

While plaintiff's first point on this appeal is framed in language seemingly posing the question whether the general presumption is 'conclusive' or 'inconclusive,' what he is really contending for is a declaration the presumption is merely an evidentiary one, as distinguished from that class of presumptions which are considered to be rules of property. In other words, he would have us state the law to be the presumption simply places upon the one asserting separate ownership the burden of producing a preponderance of evidence to establish that fact, and, further, that after the production of such evidence the presumption goes 'out the window.'

The defendant, on the other hand, argues the presumption is a rule of property; that it is a form of evidence sufficient in itself to support a finding of fact in accordance therewith--that standing alone it creates a conflict with evidence of separate ownership; and, finally, that the presumption can only be overcome by 'clear, strong and convincing evidence.'

There is no question but that the defendant relied on the presumption, for there is no evidence that she had knowledge of or was active to any degree in her husband's business and financial transactions. Therefore, aside from the books and records reflecting a substantial part of the plaintiff's business affairs, which were made available to a firm of accountants employed by the defendant and their testimony regarding these records, she had little evidence to offer, though it may be noted here that she does place reliance upon the circumstances of the presence of income tax returns for the community, the absence of gift tax returns, and certain features of the relationship between the plaintiff and his father and the latter's business policies with respect to his family. All of these matters will be the subject of further consideration in later portions of this opinion.

The presumption that all property acquired after marriage is community property was part of Spanish community property law and was recognized as an element of the community property system in this state prior to the time of its statutory pronouncement by Sec. 10, ch. 37, Laws of 1907. Neher v. Armijo, 1898, 9 N.M. 325, 54 P. 236; Strong v. Eakin, 1901, 11 N.M. 107, 66 P. 539; Brown v. Lockhart, 1903, 12 N.M. 10, 71 P. 1086.

By the Laws of 1947, ch. 191, Sec. 1, the 1907 statute was amended, but the only change in the portion of the law declaring the community property presumption was the inclusion of the words 'real and personal' therein. As amended the section reads, in pertinent part:

'All other real and personal property acquired after marriage by either husband or wife, or both, is community property; * * *' Sec. 57-4-1, N.M.S.A. 1953.

This section is preceded by sections...