Johnson v. Johnson, 471PA85

Citation317 N.C. 437, 346 S.E.2d 430
Case DateAugust 12, 1986
CourtUnited States State Supreme Court of North Carolina

Wray, Layton, Cannon & Parker, P.A. by John J. Parker, III and Patricia B. Edmundson, Charlotte, for plaintiff-appellee.

Hamel, Helms, Cannon, Hamel & Pearce, P.A. by Nicki Levine, Thomas R. Cannon and A. Elizabeth Green, Charlotte, for defendant-appellant.

MEYER, Justice.

By this case, we are confronted with an important question of first impression in this jurisdiction: whether proceeds representing a settlement recovered by a spouse upon a claim for his or her personal injuries sustained during the marriage of the parties constitute marital property subject to distribution upon dissolution of the marriage or whether they are the separate property of the injured spouse.

The panel below, affirming the order of the district court, held that such proceeds are the separate property of the spouse who sustained the personal injuries. The "majority" opinion below, authored by Phillips, J., is grounded on the premise that N.C.G.S. § 52-4 "established beyond dispute that the personal injury recoveries of all married women in this state are their 'sole and separate property'; as, of course, the personal injury recoveries of married men had been since time immemorial." Johnson v. Johnson, 75 N.C.App. 659, 660, 331 S.E.2d 211, 212. Judge Arnold wrote a concurring opinion in which he was joined by Judge Cozort, stating a different basis for the result. The concurring judges found a conflict between N.C.G.S. §§ 52-4 and 50-20. Applying the canon of construction that, where two statutes necessarily are repugnant, the last one enacted shall prevail, the concurring judges opined that N.C.G.S. § 50-20 governs the case and, since settlement of the personal injury claim was entered and the proceeds were received after the parties had separated, the recovery was not "marital property" within the meaning of N.C.G.S. § 50-20(b)(1).

We reverse and remand.

The plaintiff-husband and the defendant-wife were married in 1957. On 28 February 1981, the husband was involved in a serious motorcycle accident which resulted in a fifty percent permanent disability of his right foot. The parties separated on 5 August 1981. One year later, on 13 August 1982, the husband filed a complaint for divorce based on the one-year separation. At approximately the same time, he received a "net settlement" of his personal injury claim in the amount of $95,000. The wife filed a motion for equitable distribution on 8 September 1982. Each party filed affidavits in support of his or her contentions as to the marital property subject to division. The wife listed the assets resulting from her husband's personal injury settlement as marital property; the husband claimed these assets as his separate property.

The trial court specifically found in its 13 March 1984 order that the $95,000 settlement, its proceeds, and property purchased therewith are plaintiff-husband's separate property as defined by N.C.G.S. § 50-20(b)(1) and (2) and are therefore not subject to distribution. The trial court then found that because the plaintiff-husband had a larger amount of separate property than did the defendant-wife, she should be awarded a larger share of the marital assets. The only marital assets distributed to the husband were a 1971 Ford automobile and an eighteen-foot fishing boat.

Defendant-wife assigns as error the trial court's finding, conclusion, and order that "the personal injury settlement received by the Plaintiff as the result of a motorcycle accident in 1981, its proceeds and property purchased therewith are his separate property as the same is defined in NCGS 50-20(b)(2) free of all claims of the Defendant."


We must first eliminate any confusion engendered by the Court of Appeals' misinterpretation of N.C.G.S. § 52-4 vis-a-vis § 50-20 upon which each member of the panel below based his opinion. Section 52-4 neither is dispositive of the issue at bar nor is it inconsistent with or repugnant to § 50-20. The two provisions govern entirely different situations and were enacted for entirely different purposes.

Chapter 52 of our General Statutes is entitled "Powers and Liabilities of Married Persons." (Emphasis added.) The predecessor of N.C.G.S. § 52-4, C.S. 2513, was enacted in 1913. 1913 N.C.Sess.Laws ch. 13, § 1. It was amended in 1965 to apply equally to husbands and wives. 1965 N.S.Sess.Laws ch. 878, § 1. As originally enacted, the predecessor to § 52-4 provided:

The earnings of a married woman by virtue of any contract for her personal service, and any damages for personal injuries, or other tort sustained by her, can be recovered by her suing alone, and such earnings or recovery shall be her sole and separate property as fully as if she had remained unmarried.

C.S. 2513 (1919).

As pointed out in Patterson v. Franklin, 168 N.C. 75, 79, 84 S.E. 18, 21 (1915) (Clark, C.J., concurring), this provision was apparently enacted in response to Price v. Charlotte Electric Ry. Co., 160 N.C. 450, 76 S.E. 502 (1912). The majority opinion in Price intimated that the Martin Act of 1911 ("which practically constitutes married women free traders as to all their ordinary dealings," id. at 452, 76 S.E. at 503) did not abrogate the ancient rule that the right of action for a married woman's earnings and for damages resulting from her tortiously inflicted personal injuries belongs to her husband who is a necessary party in a suit to recover those damages or earnings. See N.C. Code of Civil Procedure, Title V, § 56 (1868) (when married woman is a party, her husband must be joined unless the action concerns her separate property); Syme v. Riddle, 88 N.C. 463 (1883) (husband entitled jure mariti to the proceeds of his wife's services (her wages); he alone could sue for and recover these proceeds. He is vested with this right in exchange for his obligation to support his wife and children.). Cf. Baker v. Jordan, 73 N.C. 145 (1875) (woman who sold her real property the day before her marriage to plaintiff without his knowledge or consent defrauded him). See generally Comment, Domestic Relations--Loss of Consortium from Injury to Spouse, 29 N.C.L.Rev. 178 (1951).

These antiquated rules were grounded on the theory that a married woman's legal existence merged into that of her husband; she lost all of her property and her legal capacity. 1 By definition, these rules did not apply to single or divorced women. The eventual statutory abrogation of the common law rules finally resulted in married women having personal and individual rights, during coverture, to their own wages and claims for their personal injuries, and the right to sue for these individually.

In his foresighted opinion recognizing a wife's cause of action for loss of consortium, Chief Justice Clark, an early champion of women's rights, explained the need for, and the result of, the enactment of C.S. 2513, now N.C.G.S. § 52-4:

At common law the husband could maintain an action for the injuries sustained by his wife for the same reason that he could maintain an action for injuries to his horse ... or any other property; that is to say by reason of the fact that the wife was his chattel....


By the married women's provision in the Constitution of 1868, Art. X, sec. 6, this conception of ownership by the husband whereby upon marriage all the personal property of the wife became the property of the husband and he became the owner of her realty during his lifetime, was abolished. The courts in this State continued for a long while, notwithstanding, to hold that the husband could recover his wife's earnings and the damages for injuries done her; but by the act of 1913, now C.S. 2513, it was provided that her earnings and damages for torts inflicted upon her were her sole and separate property for which she could sue alone.

Hipp v. Dupont, 182 N.C. 9, 12, 108 S.E. 318, 319 (1921). See also Mims v. Mims, 305 N.C. 41, 48-49, 286 S.E.2d 779, 785 (1982); Nicholson v. Chatham Memorial Hosp., 300 N.C. 295, 297-98, 266 S.E.2d 818, 820 (1980).

Chapter 52 has no application to single or divorced men and women.

On the other hand, N.C.G.S. § 50-20, entitled "Distribution by court of marital property upon divorce" (enacted in 1981), which is part of Chapter 50, entitled "Divorce and Alimony," has no application to married people. Equitable distribution of marital property under Chapter 50 takes place between divorced spouses. N.C.G.S. § 50-21(a) (1984) ("an equitable distribution of property shall follow a decree of absolute divorce.... The equitable distribution may not precede a decree of absolute divorce.") (Emphasis added.)

The North Carolina equitable distribution scheme has been characterized as falling "into what has aptly been characterized as a 'deferred community property law' system." Sharp, Equitable Distribution in North Carolina: A Preliminary Analysis, 61 N.C.L.Rev. 247, 249 (1983) (footnote omitted). Pursuant to the "deferred community property" equitable distribution scheme in North Carolina, community property principles do not apply during marriage. "If, however, the marriage ends in divorce, the property is distributed according to community property principles." Comment, The Development of Sharing Principles in Common Law Marital Property States, 28 U.C.L.A.L.Rev. 1269, 1282 (1981). See also Unif.Marital Prop.Act § 4, 9A U.L.A. 21, 30 comment (1983) ("Those family-law interests set forth in marital property definitions in equitable distribution statutes are delayed-action in nature and come to maturity only during the dissolution process."). Cf. Mims v. Mims, 305 N.C. 41, 54, 286 S.E.2d 779, 788 ("The primary focus of our common law rules is to determine beneficial ownership of property acquired during marriage by giving effect to what was intended at the time the property was acquired.... The Equitable Distribution Act is...

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