Marriage of Stitt, In re

• Citation: 147 Cal.App.3d 579,195 Cal.Rptr. 172
• Court: California Court of Appeals Court of Appeals
• Decision Date: 29 September 1983
• Parties: In re the MARRIAGE OF Ida Mae and Richard Jack STITT. Ida Mae STITT, Appellant, v. Richard Jack STITT, Respondent. Civ. 6779/F295.

Page 172

195 Cal.Rptr. 172

147 Cal.App.3d 579

In re the MARRIAGE OF Ida Mae and Richard Jack STITT Ida Mae STITT, Appellant, v. Richard Jack STITT, Respondent.

Civ. 6779/F295.

Court of Appeal, Fifth District, California.

Sept. 29, 1983.

[147 Cal.App.3d 582] Thomas Tutton, Deadrich, Bates & Tutton, Bakersfield, for appellant.

Stanley Simrin, Simrin & Moloughney, Bakersfield, for respondent.

OPINION

WOOLPERT, Associate Justice.

This appeal presents us something old and something new. The old issue is whether a premarital couple may make as binding an oral agreement to own all future acquired property equally, irrespective of record title as may their married counterparts. Here, where the parties have relied on their agreement, we affirm the judgment holding the family home to be community property, even though some time prior to separation the parties had deeded it to the wife as her separate property. The new issue is whether the community should be responsible for unpaid attorney fees incurred by the wife for her defense against embezzlement charges in criminal and civil litigation. We affirm the judgment holding her solely responsible.

Prior to their marriage, husband and wife entered into an express oral agreement to live together and combine their efforts and earnings. Wife testified they agreed to equally split the cost and be co-owners of unimproved property on Hageman Road, but when husband did not tender his share of the money, they amended the escrow instructions which originally were to vest title in both of them. However, husband testified, and the court so found, that he had given wife $3,600 cash towards the purchase price of $7,250.

Title to the Hageman Road property was acquired in the name of wife as an unmarried woman. Wife applied for and was granted a loan for $36,000 in her name as an unmarried woman. She then contracted to have a house built on the property. When it was completed, the couple moved into the house. With the exception of five payments made from her separate account, all the loan payments were made from the couple's joint account. Husband worked on some of the improvements to the property, such as installing an irrigation system and building fences. He also purchased plumbing supplies and a water pump for the property with his separate funds.

Husband and wife were married a few months later. Wife then deeded the Hageman Road property to husband and wife as joint tenants. At trial, wife explained that she asked for a $1,000 loan from husband as additional financing for improvements on the property; he gave her the money on the condition that she put his name on the deed. She never intended that he should be half owner of the property and maintained he signed a quit claim deed two months after she repaid the $1,000.

Two and a half years passed. Husband and wife then deeded the Hageman Road property to wife, "an unmarried woman." Husband explained he signed the deed because wife advised him it would be prudent, "in preparation for the trial that she was about to go through." Because he assumed that his right to the property would be restored when the case was over, he did not believe he was giving up his right to his share when he signed the deed. Until wife filed the petition for dissolution of marriage, husband continued to believe he was an equal co-owner of the Hageman Road property.

Payments on the loan continued to be made from the parties' joint account until they separated and wife filed the petition for dissolution of the marriage. The balance on the loan at that time was $34,504.33. After separation, wife made the payments from her separate property but continued to live on the property without paying rent to the community.

The court found the property was community in its entirety. It found husband had contributed to the purchase price and contributed labor in maintaining the property, and further found that the parties had purchased the property intending that it belong to both of them jointly. Husband allowed wife to take title to the property in her own name in reasonable reliance on her representations, and was led to believe he was an equal owner of the Hageman Road property until wife initiated dissolution proceedings.

Wife worked as a manager at Zingo's, Inc. Zingo's filed suit against her for fraud and misappropriation of funds. When that suit was settled, wife agreed to pay Zingo's, Inc., $15,000 in cash and to give up all her Zingo's stock and undistributed dividends. Wife was tried and convicted of embezzlement. As a condition of probation, she was ordered to pay $15,000 restitution in compliance with the terms of the civil settlement.

Separate law firms represented wife in the civil and criminal proceedings. Wife's separate property was sold to raise funds for payment of restitution to Zingo's. Husband issued two checks from the joint account as partial payment of attorney fees, one for $1,287.68 and the other for $3,000. Finally, after the parties separated, wife executed a second trust deed on the Hageman Road property in favor of the two law firms for $10,989.20 owed them.

The court found the obligations for attorney fees were incurred during the marriage and were attributable to wife's defense in the civil and criminal actions and the sale of her separate property. It further found the obligations to the law firms were wife's separate obligation.

Wife argues the trial court erred in determining the Hageman Road property was community in its entirety. She contends the property is partially her separate property and that the court should have made an apportionment using the formula given in In re Marriage of Moore (1980) 28 Cal.3d 366, 373, 168 Cal.Rptr. 662, 618 P.2d 208. Because the building construction loan was in her name alone, she argues the proceeds of the loan were her separate property. Although after marriage the property was transferred to husband and wife as joint tenants, she argues this did not transmute the separate property to community property and there was no evidence she intended a gift of her separate property.

At the time the property was acquired, husband and wife were living in a marriage-like arrangement pursuant to a Marvin agreement. (Marvin v. Marvin (1976) 18 Cal.3d 660, 134 Cal.Rptr. 815, 557 P.2d 106.) Unmarried cohabitants may enter into express or implied contracts respecting their property rights and earnings, and the court may enforce those contracts. (Id., at p. 674, 134 Cal.Rptr. 815, 557 P.2d 106; Estate of Fincher (1981) 119 Cal.App.3d 343, 349, 174 Cal.Rptr. 18; In re Marriage of Leib (1978) 80 Cal.App.3d 629, 642, 145 Cal.Rptr. 763.) The rights which have arisen in the premarital period remain enforceable after marriage. (Watkins v. Watkins (1983) 143 Cal.App.3d 651, 653, 192 Cal.Rptr. 54.)

Here, on substantial evidence, the court found husband and wife made an express premarital oral agreement to pool and share their resources and be equal owners of property acquired. It further found they purchased the Hageman Road property with the understanding that they both owned it, and that husband contributed almost half the purchase price, notwithstanding the form of the deed.

Wife argues the building construction loan was in her name only and that the lender's intent with respect to the credit on which the loan is made is determinative of the character of the proceeds, citing Ford v. Ford (1969) 276 Cal.App.2d 9, 12, 80 Cal.Rptr. 435. However, Ford also states that if money for the purchase of property is obtained on the credit of the community estate, the result is a community purchase. (Ibid.) The unimproved Hageman Road property was "community" in the sense that between the parties it was owned equally. Therefore it was community property for purposes of determining the basis for extending credit. (Guerin v. Guerin (1957) 152 Cal.App.2d 696, 708, 313 P.2d 902.)

When the Hageman Road property was deeded after marriage to husband and wife as joint tenants, its community character was reinforced. The presumption in Civil Code section 5110 ¹ applies: "When a single-family residence of a husband and wife is acquired by them during marriage as joint tenants, for the purpose of the division of such property upon dissolution of marriage or legal separation only, the presumption is that such single-family residence is the community property of the husband and wife...." Although wife argues there was no evidence she intended a gift of her separate property, absent evidence to rebut the presumption that the Hageman Road property was acquired by husband and wife as community property, the presumption applies.

In November 1977, husband and wife transferred the property to wife "as an unmarried woman," triggering the rebuttable presumption that the parties intended to hold the property according to its record title. (Gudelj v. Gudelj (1953) 41 Cal.2d 202, 212, 259 P.2d 656; Knego v. Grover (1962) 208 Cal.App.2d 134, 141, 25 Cal.Rptr. 158.) The form of the instrument was not conclusive of the status of the property. The presumption may be rebutted by evidence of an understanding or agreement to the contrary. (In re Marriage of Lucas (1980) 27 Cal.3d 808, 815, 166 Cal.Rptr. 853, 614 P.2d 285.) Whether the presumption was rebutted was a question of fact for the trial court and is binding on the reviewing court unless manifestly without support in the evidence. (In re Marriage of Mix (1975) 14 Cal.3d 604, 612, 122 Cal.Rptr. 79, 536 P.2d 479; Schmedding v. Schmedding (1966) 240 Cal.App.2d 312, 316, 49 Cal.Rptr. 523.)

In transferring the property to wife, the trial court found husband relied on wife's representations that the property would be conveyed back to husband and wife after resolution of the Zingo's litigation. The property remained community in nature although the form of title indicated otherwise. (Cf. Guerin v. Guerin, supra, 152 Cal.App.2d 696, 709, 313 P.2d 902.) The acts of the parties ind...