Corbett v. Corbett, WD

• Decision Date: 10 February 1987
• Docket Number: No. WD,WD
• Parties: Weldon Wayne CORBETT, Respondent, v. Gloria Ann CORBETT, Appellant. 37722.
• Court: Missouri Court of Appeals

Page 550

728 S.W.2d 550

Weldon Wayne CORBETT, Respondent, v. Gloria Ann CORBETT, Appellant.

No. WD 37722.

Missouri Court of Appeals Western District.

Feb. 10, 1987.

Motion for Rehearing and/or Transfer to Supreme Court Denied

March 31, 1987.

Application to Transfer Denied May 19, 1987.

Bruce A. Bailey, Warrensburg, for appellant.

Kevin Schehr, Versailles, for respondent.

Before CLARK, P.J., and NUGENT and LOWENSTEIN, JJ.

NUGENT, Judge.

Gloria Ann Corbett appeals from the property disposition portion of the 1985 judgment dissolving her thirty-one year marriage to Weldon Wayne Corbett. She claims that the trial court erred when it set aside as her husband's separate property a $20,000 N.O.W. account and $15,000 in cash derived from his inheritance because those sums had been transmuted into marital property by commingling. She also says that the trial court improperly failed to require that the sum of $50,000 awarded to her in lieu of marital property bear interest, thus giving Wayne the use of her property over the term of the installment schedule without compensating her for that use.

Confining our review to the standards for court-tried cases of an equitable nature set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.1976) (en banc), we affirm the judgment of the trial court.

Gloria and Wayne Corbett were married in 1954. Mr. Corbett made his living by farming and raising cattle, but at times supplemented his income with construction work and other jobs. Until the parties separated in 1984, Mrs. Corbett had never been employed outside the home. As well as running the home and rearing the couple's four children, she assisted in the day to day operations of the farm and sometimes managed the farm by herself when Mr. Corbett took seasonal employment out of town.

According to her testimony, the marriage was stormy from the start. Mr. Corbett's extreme efforts to prevent her from visiting her parents who lived nearby and his dictatorial and sometimes violent manner of dealing with her and the children were recurrent themes of discord throughout the marriage. Some thirty years later, after the four children had become emancipated and self-supporting, Mrs. Corbett moved out.

Mrs. Corbett contends that the dissolution decree mischaracterizes $35,000 as her husband's separate property when in fact the funds had been commingled with marital property and had become marital property by transmutation.

In 1974, Mr. Corbett inherited $28,790.55 from his mother's estate and a one-eighth interest in lands that belonged to his father, valued at from $8,000 to $10,000. ¹ He invested the monies in certificates of deposit at various savings associations, from time to time transferring his money from one association to another to take advantage of the best interest rate. He voiced an intent to keep the funds separate and took certain measures to segregate his money from the family funds. He testified that his wife was not with him when he opened the accounts, and that the C.D.'s were registered either in his name alone or in his name as trustee for his children, but not in joint tenancy with her. He stated that at all times, he maintained possession and control of the certificates and passbooks of the numerous accounts; neither Mrs. Corbett nor the children had access to the accounts. On the other hand, she testified that she accompanied Mr. Corbett when he opened some accounts and at some time her name appeared on certain certificates, but that after a family argument he ordered her to sign papers that removed her name from the accounts. She also stated that her husband had a daughter's name removed from one of the accounts under similar circumstances.

Mr. Corbett testified that the interest earned by the inherited funds was sometimes left to accumulate in the accounts and sometimes spent for family purposes. About $5,000 of the interest earned was used to finance the family's vacation in Germany. Mrs. Corbett testified that her husband permitted use of the inheritance money or earned interest for family purposes upon the strict understanding that his private accounts must be reimbursed. The money used for the trip to Germany was repaid. Over the years, all of the interest on certificates of deposit was attributed to Mr. Corbett on his IRS Form 1099 and taxed on their joint income tax return.

Robert L. Palmer, vice-president and secretary of Metropolitan Savings Association, testified that Mr. Corbett opened several C.D. accounts at Metropolitan, including two accounts registered in the names of Weldon Wayne Corbett or Gloria A. Corbett as joint tenants with right of survivorship. The first joint tenancy account, in the amount of $2,039.12, was opened May 31, 1975. A second account so registered was opened June 1, 1976, in the amount of $2,032.76. Mr. Palmer's testimony and business records do not establish when the joint tenancies in the two accounts were terminated. The remaining accounts were held by Wayne Corbett either in joint tenancy with or in trust for his children. When asked whether the interest earned on the accounts was paid to the holder by check or reinvested into the accounts, Mr. Palmer consulted a ledger and replied that the interest was reinvested into the accounts. He further related that on May 30, 1981, Wayne Corbett consolidated the C.D.'s, presumably all of them, into one certificate registered solely in his name in the amount of $22,228.81. On November 28, 1981, he withdrew that certificate from the savings association.

Mr. Corbett testified that at the time of trial the remainder of the inherited sums plus the accrued interest and minus what he had spent over the years amounted to $35,000. ² Distraught after his wife left, he cashed in all of his certificates of deposit in May, 1984, and placed the entire $35,000 in cash inside a paper bag and hid it in the back bedroom of his house.

In the decree of dissolution the trial court distributed a $20,000 N.O.W. account on deposit at Third National Bank in Sedalia and $15,000 in cash to Mr. Corbett as non-marital property and gave him all the marital property in kind, including the farm, farm equipment and livestock, the lake property, a lot in Florida, cemetery plots, motor vehicles, and other items of personalty. The court specifically found $6,210.45 of the certificates of deposit claimed by Mr. Corbett to be marital property. The court also ordered Wayne Corbett to pay Gloria Corbett $100 per month for maintenance and to pay the couple's marital debts. Court costs were assessed against Mrs. Corbett.

In further division of the marital property, the court ordered Mr. Corbett to pay Mrs. Corbett $50,000 by installments as follows:

$5,000.00 on or before January 1, 1986.

$20,000.00 on or before July 1, 1986.

$20,000.00 on or before January 1, 1987.

$5,000.00 on or before January 1, 1988.

Should any installment not be paid on the date ordered, then that installment is to bear interest at the rate of ten percent from the date when due, until paid. No interest is to accumulate on an installment, until that installment is due. Petitioner wife is granted lien on Respondent Husband's realty until these installments are paid....

I.

Did the trial court err in declaring the $20,000 N.O.W. account and the $15,000 in cash, the $35,000 residue of the inherited funds, the husband's separate property? To answer this question, we turn first to the Dissolution of Marriage Act for guidance.

Section 452.330.1 ³ requires the court to set apart to each spouse his or her property and to divide the marital property in such proportions as the court deems just. "Marital property" is defined in § 452.330.2 as "all property acquired by either spouse subsequent to the marriage." Listed then are exceptions to the definition. "Property acquired by gift, bequest, devise, or descent" and "[p]roperty acquired ... in exchange for property acquired by gift, bequest, devise, or descent" are the relevant exceptions here. § 452.330.2(1) and (2). Finally, § 452.330.3 creates a statutory presumption that all property acquired by either spouse after the marriage and prior to a decree of legal separation is presumed to be marital property regardless of whether it is held individually or by the spouses in some form of coownership such as joint tenancy, tenancy in common, tenancy by the entirety, or community property.

Here the burden is on the husband to overcome the statutory presumption of marital property by a showing that the property was acquired by a method listed as an exception to the definition of marital property in § 452.330.2. The parties do not dispute that the $35,000 set aside as his separate property constitutes the remainder of money inherited from his mother and his interest in lands from his father's estate. Nevertheless, Mrs. Corbett's claim that the inherited monies were transmuted ⁴ into marital property by commingling requires a second level analysis. The decisive issue becomes whether substantial evidence was presented to show her husband's clear intent to contribute his separate property to the marital estate. Busby v. Busby, 669 S.W.2d 597, 599-600 (Mo.App.1984).

In Cartwright v. Cartwright, 707 S.W.2d 469, 472-73 (Mo.App.1986), the Eastern District of this court addressed two bases to support a finding that separate property has become marital property by transmutation. The first involves reinvesting the separate principal with earned interest to acquire new assets. The second considers the legal effect of placing separate property in joint tenancy with a spouse.

On facts closely resembling these, the Eastern District held that, by reinvesting the interest earned on a certificate of deposit purchased with funds she had inherited, the wife had commingled separate property with marital property. The earned interest was marital property because, although the product of separate property, it was income acquired after the marriage. Such commingling...