Hansford v. Lassar

• Decision Date: 01 December 1975
• Citation: 53 Cal.App.3d 364,125 Cal.Rptr. 804
• Parties: Opal M. HANSFORD, Plaintiff, Cross-Defendant and Appellant, v. Ben LASSAR, Defendant, Cross-Complainant and Respondent. Lawrence W. Hansford, Cross-Defendant and Appellant. Civ. 46108.
• Court: California Court of Appeals Court of Appeals

Page 804

125 Cal.Rptr. 804

53 Cal.App.3d 364

Opal M. HANSFORD, Plaintiff, Cross-Defendant and Appellant, v. Ben LASSAR, Defendant, Cross-Complainant and Respondent Lawrence W. Hansford, Cross-Defendant and Appellant.

Civ. 46108.

Court of Appeal, Second District, Division 4, California.

Dec. 1, 1975.

Hearing Denied Jan. 28, 1976.

Floyd H. Norris, Los Angeles, for plaintiff and appellant Opal M. hansford.

Wilbur E. Quint, Los Angeles, for defendant and respondent Ben Lassar.

JEFFERSON, Associate Justice.

Plaintiff Opal M. Hansford filed this action to quiet title to real property. She also sought injunctive relief to prevent the sale of said real property which consisted of a house and lot; she alleged slander of title and sought $25,000 damages for emotional distress. Named as defendants were Ben Lassar, a judgment creditor of plaintiff's husband, who had levied on the property, John W. Carpenter, Sheriff of Santa Barbara County ¹ and various Does. Prior to trial, plaintiff was granted a preliminary injunction.

Defendant Lassar cross-complained against plaintiff and her husband, Lawrence W. Hansford, seeking declaratory relief as to the ownership of the property in question; he also asked that a conveyance by Lawrence of his interest in the property to his wife, Opal, alleged to be fraudulent, be set aside and he requested $25,000 damages for fraud.

Trial was by the court. Defendant Lassar received judgment against plaintiff on plaintiff's complaint, and against plaintiff and her husband, Lawrence, on the cross-complaint. The trial court set aside the conveyance and dissolved the preliminary injunction, but did not award damages. Plaintiff appeals.

From affidavits filed with the trial court, as well as evidence presented to the trial court at the trial, we summarize the factual background of this dispute. In 1956, plaintiff and her husband purchased a residence at 234 No. 'B' Street in Lompoc, California, for $13,000, taking title as joint tenants. The value of this property at time of trial was not made clear, but the indebtedness outstanding against it was approximately $3,000.

At some point during the marriage of the cross-defendants it had been agreed that the wife would operate the family business, the Hansford Vending Company, due to the husband's habit of making bad investments. Earnings from this business supported the family which included three children, and was the source from which payments on the family home had been made.

In 1967 husband invested in a restaurant in Los Angeles, and executed a promissory note (as co-maker with Robert E. Harvey) in favor of defendant Lassar for $20,000. The restaurant venture soon became a financial disaster. Some payments were made on the note, but ultimately Lassar obtained a judgment, on March 13, 1973, against husband in Los Angeles Superior Court for $17,268.61. An abstract of this judgment was duly recorded in Santa Barbara County on April 9, 1973.

On August 14, 1973, plaintiff recorded, in Santa Barbara County, a quitclaim deed by which husband conveyed his interest in the Lompoc property to her. The deed was dated September 4, 1968, and the husband's signature was acknowledged by a notary in Yuma, Arizona. Husband testified at the trial that he had been in Arizona on business and happened to have the deed with him, and that he decided while there to execute it. When he returned to California within a few days, he gave the deed to plaintiff. Plaintiff kept possession of it for nearly five years before recording it. Both husband and wife offered various accounts of the motivation for this transaction in early September 1968. It seems clear, however, that by September 4, 1968, they knew that the husband's most recent investment had gone sour. In connection with the preliminary-injunction hearing, plaintiff wife filed an affidavit with the court in which she stated: 'We were financially embarrassed at the time and did not have sufficient funds to pay Mr. Lassar and other creditors and I stated I was not going to lose our home so Mr. Hansford agreed to convey it, his one-half of the home to me, if I did not sue for a divorce.' When the deed was recorded, the consideration for the conveyance was described as less than $100.

After the recording of the conveyance, defendant Lassar secured in Los Angeles County, in October 1973, a writ of execution and levied on husband's interest in the Lompoc property on November 2, 1973. The public sale scheduled for December 1973, was restrained by temporary order and then by the preliminary injunction.

Wife contended at the trial that the property was her sole and separate property and, hence, in accordance with Civil Code section 5121, could not be reached by Lassar, her husband's judgment creditor. Defendant and cross-complainant Lassar claimed that he was either entitled to reach one-half of the property if held in joint tenancy, or all of it if it was found to be community, and that the quitclaim deed was a fraudulent conveyance, intended to defeat husband's creditors.

The findings of fact and conclusions of law made by the trial court are before us on this appeal. They show that the trial court determined that the Lompoc property was the community property of plaintiff and her husband. It was found that the quitclaim deed was a conveyance made with actual intent to defraud creditors and specifically defendant Lassar and, also, that it was made without a fair consideration and rendered husband insolvent. Judgment was therefore entered in favor of Lassar, the judgment creditor, both as defendant and as cross-complainant.

Plaintiff first contends on this appeal that there existed in her favor a presumption that she and her husband owned the Lompoc residential property as joint tenants, and that the evidence was insufficient to overcome this presumption; that the trial court erred, therefore, in determining that the property was community property rather than joint-tenancy property. She claims that the decisional law is to the effect that there must be convincing evidence to rebut this presumption and justify a finding that a husband and wife own residential property as community property contrary to the record title as joint tenants.

We turn first to a consideration of the statutory law. Section 5104 of the Family Law Act ² provides that '(a) husband and wife may hold property as joint tenants, tenants in common, or as community property.' Section 5110 of the Act provides, Inter alia, that as between the husband and wife, 'upon dissolution of marriage or legal separation only' and for purposes of division of such property, there is a presumption that a single family residence acquired by them during marriage as joint tenants is their community property.

In view of the express language of section 5110, this community-property presumption has no application to the instant case as it involves a dispute with a third party, rather than one between husband and wife in a dissolution of marriage or legal separation proceeding. The presumption that is applicable in this case at bench is that of a joint-tenancy ownership that is the presumed fact which flows from the basic fact of a deed that is joint tenancy in form.

The California Supreme Court stated this presumption in Machado v. Machado (1962) 58 Cal.2d 501, 506, 25 Cal.Rptr. 87, 90, 375 P.2d 55, 58 as follows:

'Although a joint tenancy deed is not conclusive as to the character of real property, it creates a rebuttable presumption that it is held in joint tenancy. The presumption created by the deed cannot be overcome by testimony of the hidden intentions of one of the parties, but only by evidence tending to prove a common understanding or an agreement that the character of the property was to be other than joint tenancy. . . . (Citations.)'

Although Machado does not specifically characterize the joint-tenancy rebuttable presumption as a presumption that affects the burden of proof rather than a presumption that affects the burden of producing evidence, the intent of the court is clear. The joint-tenancy presumption falls within the definition of a presumption that affects the burden of proof as set forth in Evidence Code section 605, as it is established to implement a public policy Other than to facilitate the determination of the particular action in which the presumption is to be applied. The public policy involved is that of favoring the stability of titles to property. (See Baron v. Baron (1970) 9 Cal.App.3d 933, 88 Cal.Rptr. 404 (community property presumption classified as a presumption affecting the burden of proof).)

As a presumption that affects the burden of proof, the joint-tenancy presumption requires the opponent of the presumption to Rebut the presumption by proving the nonexistence of the presumed fact that the interest in the property are owned as joint tenancy interests. The opponent thus has the burden of establishing that the ownership interests in the property are held in some other capacity such as single ownership, tenancy in common, or as community property.

Two questions are involved in rebutting the presumed fact of the joint-tenancy presumption. One relates to the burden-of-proof standard. Is the standard that of proof by a preponderance of the evidence or a higher standard such as the clear-and-convincing-proof standard? The second question concerns the kinds of facts that must be shown to rebut or prove the nonexistence of the presumed fact.

Evidence Code section 115 provides that, in the proof of any issue, unless a different standard of proof of set forth by constitutional, statutory or decisional law, the burden of proof shall be proof by a preponderance of the evidence. There appears to be no compelling policy reason to require more than a preponderance of the evidence to sustain the burden of rebutting or proving the nonexistence of the presumed fact in the joint-tenancy presumption. With no contrary...