Cook v. Cook, 17520-PR

• Decision Date: 31 October 1984
• Docket Number: No. 17520-PR,17520-PR
• Citation: 142 Ariz. 573,691 P.2d 664
• Parties: Rose Marie COOK, aka Elsten, Plaintiff/Appellant, v. Donald COOK, Defendant/Appellee.
• Court: Arizona Supreme Court

Page 664

691 P.2d 664

142 Ariz. 573

Rose Marie COOK, aka Elsten, Plaintiff/Appellant, v. Donald COOK, Defendant/Appellee.

No. 17520-PR.

Supreme Court of Arizona, In Banc.

Oct. 31, 1984.

Rehearing Denied Dec. 11, 1984.

Croswell & Cornelio by Carmine Cornelio, Tucson, for plaintiff/appellant

Messing & Glicksman by Elliot Glicksman, Tucson, for defendant/appellee.

FELDMAN, Justice.

Rose Marie Cook, aka Elsten, petitioned this court for review of a decision of the court of appeals affirming the trial court's judgment against her and in favor of the defendant, Donald Cook. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3) and Ariz.R.Civ.App.P. 23, 17A A.R.S. We granted review on the issues pertaining to the enforceability of agreements made by non-marital cohabitants. A detailed version of the facts is set forth in Cook v. Cook, 143 Ariz. 1, 691 P.2d 713 (App.1984). We provide a brief summary.

FACTS

Intending to marry as soon as Donald's divorce became final, Rose and Donald moved to Tucson in 1969 and lived there together until 1981. Although they did not marry, Rose used Donald's last name and they represented themselves to the community as husband and wife. Both parties worked throughout most of the relationship, pooling their income in two joint accounts and acquiring a house, two cars and a number of shares of stock, all owned as joint tenants with right of survivorship. Rose left Donald in 1981. Of their joint assets, she received only one car and a few hundred dollars; Donald retained the balance.

Rose brought an action against Donald in November, 1981 on a theory of implied partnership, seeking an accounting and alleging that Donald had breached the partnership agreement by retaining more than one-half of the assets. The trial court first granted relief to Rose on the theory that the parties "had implicitly a partnership," then vacated its original order and entered judgment for Donald because it was "persuaded that it was in error and exceeded its authority" in its original order granting relief to Rose. Rose appealed, and Division Two affirmed the amended judgment, which had granted no relief to Rose.

The substantive issues which we first address are: 1) What was the nature of the alleged agreement between Rose and Donald? 2) Is such an agreement enforceable even though Rose and Donald were cohabiting at the time it was made and performed? 3) Is such an agreement rendered unenforceable if made in contemplation of an eventual marriage which did not occur?

In resolving these issues we assume, but are by no means certain (see post at 671 - 672), that the trial court found that there was an agreement. The court of appeals concluded there was such an agreement, but held it unenforceable (143 Ariz. at 3, 691 P.2d at 715).

THE NATURE OF THE AGREEMENT

Rose stated in her deposition that she and Donald had an agreement:

When we moved up here, we moved up here together as husband and wife. And everything we did and purchased, whether it be a vacuum cleaner or a car, was together as husband and wife. It was just something that we agreed on, that is how we were going to do it, it was both of us.

Deposition of Rose Marie Elsten, 2/12/82, at 16 (emphasis supplied). Only fragments of Rose's deposition were offered in evidence at trial, and it is impossible to determine from the trial transcript precisely what those portions were. Nevertheless, the court of appeals described the evidence as follows:

[T]he circumstances of this case present a man and a woman cohabitating [sic] with an agreement to pool their earnings and share equally in their joint accumulations.

(143 Ariz. at 3, 691 P.2d at 715.) In addition, the court of appeals determined that both parties had "admitted an intention to share equally in the various joint assets" (Id. at 1, 691 P.2d at 713) and that the trial court in its original order "divided the assets in accordance with the way the parties intend This evidence of Rose and Donald's express agreement, intention and subsequent course of conduct strongly supports a finding that they did contract to pool their earnings and share equally in certain assets. The sine qua non of any contract is the exchange of promises. Restatement (Second) of Contracts § 1 (1981). From this exchange flows the obligation of one party to another. 1 Williston on Contracts § 1 at 2 (1957). Although it is most apparent that two parties have exchanged promises when their words express a spoken or written statement of promissory intention, mutual promises need not be express in order to create an enforceable contract. Restatement (Second) of Contracts § 4. Indeed, a promise "may be inferred wholly or partly from conduct," id., and "there is no distinction in the effect of the promise whether it is expressed in writing, or orally, or in acts, or partly in one of these ways and partly in others." Id. § 19, comment a. See also Arizona Board of Regents v. Arizona York Refrigeration Co., 115 Ariz. 338, 341, 565 P.2d 518, 521 (1977). Thus, two parties may by their course of conduct express their agreement, though no words are ever spoken. From their conduct alone the finder of fact can determine the existence of an agreement. Restatement (Second) of Contracts § 4; 1 A. Corbin, Contracts § 9 at 20-21 (1963). See also Malcoff v. Coyier, 14 Ariz.App. 524, 484 P.2d 1053 (1971).

                ed to hold them."  (Id. at 3, 691 P.2d at 715.)   The conduct of the parties certainly demonstrates such an agreement and intent.  Rose and Donald maintained two joint accounts, a checking account and a credit union savings account, in the names of "Rose and Don Cook" and held by them as joint tenants with right of survivorship.  Neither Rose nor Donald maintained a separate account.  Both deposited portions of their paychecks into the accounts and used the funds in the accounts to pay for household expenses and various assets they purchased.  In addition, Rose and Donald held jointly a number of shares of Southwest Gas stock purchased with funds from the credit union account.  In 1972 they purchased a house, taking the deed as husband and wife in joint tenancy with right of survivorship.  Both signed the mortgage, incurring liability for the full purchase price of the house, and payments on the mortgage were made out of the joint checking account
                

Although isolated acts of joint participation such as cohabitation or the opening of a joint account may not suffice to create a contract, the fact finder may infer an exchange of promises, and the existence of the contract, from the entire course of conduct between the parties. Here, there is ample evidence to support a finding that Rose and Donald agreed to pool their resources and share equally in certain accumulations; their course of conduct may be seen as consistently demonstrating the existence of such an agreement. Thus, the trial court would not need to find an agreement by relying on the testimony of one party to the exclusion of the other, as some courts have done. See Bridges v. Bridges, 125 Cal.App.2d 359, 270 P.2d 69 (1954); Garcia v. Venegas, 106 Cal.App.2d 364, 235 P.2d 89 (1951); Kinkenon v. Hue, 207 Neb. 698, 301 N.W.2d 77 (1981). Neither need the court look solely to the title in which joint property is held to determine ownership. See Weak v. Weak, 202 Cal.App.2d 632, 21 Cal.Rptr. 9 (1962); In re Estate of Thornton, 81 Wash.2d 72, 499 P.2d 864 (1972).

The legal effect of Rose and Donald's actions and expressions may have been the formation of a partnership in contemplation of marriage, or it may have been the creation of a contract as to joint ownership of assets in expectation of a continuing cooperative effort, irrespective of marriage. The label we attach is unimportant. See Bruch, Property Rights of De Facto Spouses Including Thoughts on the Value of Homemakers' Services, 10 Family L.Q. 101, 116 (1976); Annot., Property Rights Arising from Relationship of Couple Cohabiting Without Marriage, 3 A.L.R.4th 13 (1981). Compare Lee v. Slovak, 81 App.Div.2d 98, 440 N.Y.S.2d 358

[142 Ariz. 577] (1981) with Knauer v. Knauer, 323 Pa.Super. 206, 470 A.2d 553 (1983). Whatever the label, an agreement fairly and freely made and embodying the intent of the parties is enforceable; a court will not set it aside unless it is contrary to public policy, Galbraith v. Johnston, 92 Ariz. 77, 373 P.2d 587 (1962), or not supported by proper consideration, Malcoff v. Coyier, supra.

THE MERETRICIOUS RELATIONSHIP

We turn to a consideration of whether enforcement of the alleged agreement would contravene the public policy of Arizona. Protection of the marital relationship is the public policy of this state. Maricopa County v. Douglas, 69 Ariz. 35, 43, 208 P.2d 646, 651 (1949). That policy is furthered by the state's community property laws, A.R.S. §§ 25-211 to 217, which are "deeply rooted in the policy of this state." In re Baldwin's Estate, 50 Ariz. 265, 275, 71 P.2d 791, 795 (1937). The law will not give to non-marital cohabiting parties the benefit of community property rights, since these rights derive solely from the marital relationship. A.R.S. § 25-211; Porter v. Porter, 67 Ariz. 273, 195 P.2d 132 (1948).

Thus, plaintiff could not obtain from this court the benefits which the law grants to those in the status of husband and wife. Those rights are conferred without need of a contract, and those who wish to obtain those benefits can do so only by becoming husband and wife. But what if plaintiff seeks only to enforce an agreement for the pooling of income and the ownership of the property acquired with that income? The court of appeals held that Rose could not prevail because

Arizona is not a jurisdiction which will permit division of property acquired during a non-marital cohabitation arrangement in accordance with the intent of the parties.

(143 Ariz. at 3, 691 P.2d at 715). We granted review because we disagree with this statement. See Ariz.R.Civ.App.P. 23(c), 17A A.R.S. In ...