Haseltine v. Haseltine

• Decision Date: 30 April 1962
• Citation: 21 Cal.Rptr. 238,203 Cal.App.2d 48
• Court: California Court of Appeals Court of Appeals
• Parties: June Shaw HASELTINE, Plaintiff, Cross-Defendant and Respondent, v. Charles deB. HASELTINE, Defendant, Cross-Complainant and Appellant. Civ. 19865.

Page 238

21 Cal.Rptr. 238

203 Cal.App.2d 48

June Shaw HASELTINE, Plaintiff, Cross-Defendant and Respondent, v. Charles deB. HASELTINE, Defendant, Cross-Complainant and Appellant.

Civ. 19865.

District Court of Appeal, First District, Division 2, California.

April 30, 1962.

Rehearing Denied May 16, 1962.

Hearing Denied June 27, 1962.

Robert E. Zang, David C. Bull, Severson, Zang, Werson, Berke & Larson, San Francisco, for appellant.

Sullivan, Roche, Johnson & Farraher, Vincent J. Mullins, Daniel H. Dibert, San Francisco, for respondent.

AGEE, Justice.

This is an appeal by defendant-husband and relates only to money and property. The parties intermarried on April 23, 1938 and separated on July 1, 1956. The wife filed suit for divorce on November 15, 1956, and on December 14, 1959, during the course of a protracted trial, was awarded an interlocutory decree of divorce on the ground of extreme cruelty. Some nine months later, on September 14, 1960, the judgment from which this appeal is taken was entered.

We will discuss the numerous points raised by appellant in the order made but, before doing so, wish to state that we have examined the record and have concluded that the trial court's findings of fact of which appellant complains are supported in each instance by substantial evidence, and we do not propose to set forth in this opinion a summary of the testimony relating thereto.

REIMBURSEMENT OF WIFE'S SEPARATE FUNDS

Appellant was the sole owner of Pacific Stevedoring & Ballasting Company at the time of his marriage. With the exception of personal effects, certain life insurance policies, certain fully depreciated equipment and good will, his net worth at that time was $20,035.07. Respondent had substantial means. Appellant informed respondent that his business required additional capital in order to build it up. Accordingly, the parties agreed that respondent would contribute money from her separate funds to pay the community living expenses and thus allow the business to maintain a larger working capital. It was agreed that respondent was to be credited on the books with such advances and be reimbursed therefor when it was possible to do so. Respondent's advances from January 1, 1947, until July 1, 1956, amounted to $123,575.95. This was stipulated to.

In response to the court's inquiry as to whether the parties had agreed or understood that respondent was to be reimbursed, appellant testified: 'Not in so many words, your Honor. But I am sure that we both understood that that would be considered and done, if possible.' The trial court, in announcing its decision, referred to this testimony and stated: 'It is significant to me, because it shows what was in Mr. Haseltine's mind at the time Mrs. Heseltine was making these contributions to living expenses, * * *.' Respondent testified that she and appellant 'discussed my private income and that I would be making the advances to our joint account to help pay the family expenses so that he could be putting his money and what he had and as much as he could into the business to build it up. It was discussed again, probably more at length, * * * that I would continue making my contributions or my advances to the community living, and that on those books there would be a credit to my account for what I had been contributing to the family living.'

The use of the word 'advances' is of significance in determining whether the parties made an express agreement to reimburse respondent, because such word indicates, when used in relation to money, an agreement to reimburse the one who made the advances. (Semi-Tropic Spiritualists Ass'n v. Johnson, 163 Cal. 639, 642, 126 P. 488).

Without further discussion, it is evident that there is sufficient evidence to sustain the trial court's finding that respondent's advances to the community expenses were made under an agreement for reimbursement.

Appellant contends that the issue of reimbursement was never raised. We need do no more than call attention to the following provision in the pre-trial order: 'Another serious issue at the trial will be plaintiff's demand for reimbursement for her contributions to the community over the years out of her separate funds, * * *.' The issue was thus effectively made part of the record. (Rule 8.8, Rules for Superior Courts) What appellant really complains about is that his counsel thought that respondent intended to rely upon an agreement to reimburse implied in the law and not upon an express agreement as required. (See Blackburn v. Blackburn, 160 Cal.App.2d 301, 324 P.2d 971; Thomson v. Thomson, 81 Cal.App. 678, 254 P. 644) However, a party is not entitled to rely upon his pretrial expectation that a properly raised issue will be pursued upon an erroneous legal theory. The issue was fully developed by both sides during the lengthy trial and, if appellant's counsel was surprised initially, it was not for long.

The decree provided that respondent was to be 'reimbursed from the community estate in the amount of $123,575.95 as set forth in said Findings of Fact and Conclusions of Law.' Appellant contends that an inconsistency results when reference is made to the findings and conclusions. The findings recite that respondent is to reimburse the community in the amount of $24,369.11 for money received by her from appellant which belongs to the community. Reference has already been made to the finding that respondent advanced $123,575.95 to the community from her separate funds. The conclusions provide as follows: 'Plaintiff will reimburse the community in the amount of $24,369.11. Defendant will reimburse the community in the amount of $123,575.95 which the community shall in turn reimburse and pay over to plaintiff in full. In the event the community shall fail or for any reason be unable to reimburse and pay over to plaintiff said sum of $123,575.95, defendant shall pay to plaintiff from his separate property the sum of $63,023.70.'

The court then, in both the conclusions and the decree, divided the 'net community property' 51% to respondent and 49% to appellant.

It was never the intention of the trial court to require appellant to pay the $123,575.95 into the community from his separate estate. It was fully aware of the situation which would thereby result, and stated, upon submission of the case for decision: 'If I order that Mrs. Haseltine be reimbursed in full she would be getting 100% for herself. There would be 100% less of that amount left to divide.' What the trial court obviously intended was that the community should reimburse respondent if it was to do so. The 'net community property' would thus be reduced by $123,575.95, and would result in a reduction of respondent's share in the said property to be divided between the parties to the extent of 51% of the amount of such reduction, or the sum of $63,023.70. The trial court gave appellant the alternative of reimbursing respondent either in this manner or paying her the sum of $63,023.70 from his separate funds. We do not find any inconsistency but if appellant does, he may choose either alternative.

THE 1954 AGREEMENT

As of January 1, 1947, defendant withdrew approximately $27,000 in securities and cash from Pacific Stevedoring & Ballasting Company as representing his separate interest in the business. Thereafter, the business was considered and treated by the parties as being entirely community property. In 1954, defendant proposed to plaintiff that he purchase her community interest in the company, and in early 1955 an agreement was drawn up and executed, whereby defendant purchased such interest for $23,685.54, represented by note. This amount, plus interest of $710.57, paid to plaintiff on the note, is the $24,369.11 which the court required plaintiff to return to the community.

The trial court found that the 1954 agreement was invalid. It found that the sum paid by defendant to plaintiff for her interest was greatly below the company's actual cash value, that plaintiff received no independent legal advice and was not represented by counsel during the drafting and execution of the agreement, that defendant did not disclose to plaintiff the true value of the company or the great pecuniary advantages which he would receive by virtue of the agreement, that defendant represented that the sum paid plaintiff was equal to one-half of the company's net worth and that this was not adequate compensation for plaintiff's interest, that defendant did not disclose to plaintiff the fact that certain items of deferred income were carried on the company's books as a charge against assets in computing net worth, and that defendant did not disclose to plaintiff that at the time of their agreement he had arranged for the sale of part of the company's assets for a sum equal to three times the amount paid plaintiff for her interest. Upon these findings the court concluded that plaintiff had not been divested of her interest in the business and accordingly rendered judgment that Pacific Stevedoring & Ballasting Company was still the community property of the parties.

Defendant first contends that the validity of the 1954 agreement was never made an issue at the trial. His attack is levied against a trial amendment of plaintiff's complaint, which specifically sought relief from the agreement. Before reaching this contention, we note that over a year prior to her trial amendment, shortly after the pretrial conference order was filed, plaintiff alleged by amendment to her complaint that Pacific Stevedoring & Ballasting Company was community property. Prior to that, defendant had by cross-complaint sought to restrain plaintiff's alleged attempt to repudiate 'certain valid agreements' made by the parties during the marriage. Such allegations were sufficient, we think, to raise an issue as to the status of Pacific Stevedoring & Ballasting Company and as to the validity of any agreements respecting its status. Were this not so,...