McMillan v. United States Fire Ins. Co.

• Decision Date: 30 July 1929
• Docket Number: 5298
• Citation: 48 Idaho 163,280 P. 220
• Parties: LILLIE MCMILLAN, Respondent, v. UNITED STATES FIRE INSURANCE COMPANY, a Corporation, Defendant, and E. N. MCMILLAN, Intervenor and Appellant
• Court: Idaho Supreme Court

280 P. 220

48 Idaho 163

LILLIE MCMILLAN, Respondent, v. UNITED STATES FIRE INSURANCE COMPANY, a Corporation, Defendant, and E. N. MCMILLAN, Intervenor and Appellant

No. 5298

Supreme Court of Idaho

July 30, 1929

COMMUNITY PROPERTY-WIFE'S EARNINGS-SEPARATE PROPERTY-BURDEN OF PROOF-EXEMPTIONS-STATUTES-CONSTRUCTION OF.

1. Money earned by wife for her personal services, as laborer in orchards and packing-houses and in caring for pasture of stepfather, under C. S., secs. 4656, 4660, was community property, of which she had management and control by virtue of section 4667.

2. In wife's action on fire policies covering property claimed by her to be her separate property acquired by her earnings during marriage, but claimed by husband's judgment creditor to be community property subject to levy, burden was on wife, presumption being that property was that of the community.

3. While exemptions, being creatures of statutes, will be liberally construed, such construction should be reasonable.

4. In an action by intervenor to obtain insurance money due upon policies taken out by wife on property purchased with proceeds of gift money and earnings for personal services after marriage, in settlement of judgment against husband earnings of wife, paid or converted into other property, do not come within exemptions granted by C. S., sec. 6919.

5. "Pictures and albums," referring to family photographs and their containers, are exempt under C. S sec. 6920, subd. 2, as "family portraits and their necessary frames."

6. Instruction that all compensation "received" by wife for personal services was exempt, although erroneous, in view of C. S., sec. 6919, was harmless, as wife had no earnings collected in form of money.

APPEAL from the District Court of the Seventh Judicial District for Washington County. Hon. Ed. L. Bryan, Judge.

Action on insurance policies. A judgment creditor intervened. From a judgment for plaintiff and motion denying a new trial intervenor appeals. Affirmed in part and reversed in part.

Cause remanded, with directions. Petition for rehearing denied.

Ed. R Coulter, for Appellant.

The earnings of a married woman, after same have been collected, and all property bought with the proceeds thereof, are community property subject to be seized under attachment against the husband and the community of the husband and wife. (C. S., secs. 4656, 4659, 4660, 6919.)

The verdict of the jury and the judgment of the court based thereon are contrary to the law and evidence, and the court erred in denying appellant's motion for a new trial. (Giffen v. City of Lewiston, 6 Idaho 231, 55 P. 545; Gooding Milling & Elevator Co. v. Lincoln County State Bank, 22 Idaho 468, 126 P. 772; Ahlstrom v. Tage, 31 Idaho 459, 174 P. 605; McKay on Community Property, sec. 172; 31 C. J., sec. 1107, p. 27; Scott v. Scott, (Tex. Civ. App.) 170 S.W. 273; Albright v. Albright, 21 N.M. 606, Ann. Cas. 1918E, 542, 157 P. 662.)

George Donart and J. W. Galloway, for Respondent.

All real and personal property belonging to a married woman, or purchased with the earnings of the wife, are exempt from sale on execution. (C. S., secs. 4666, 6919.)

Property purchased with the proceeds of exempt property is exempt from execution. (Evans v. Kroutinger, 9 Idaho 153, 2 Ann. Cas. 691, 72 P. 882; Humbird Lumber Co. v. Doran, 24 Idaho 507, 135 P. 66.)

The exemption laws of the state of Idaho are liberally construed in favor of the judgment debtor. (Coughanour v. Hoffman Estate, 2 Idaho 290, 13 P. 231; Nelson v. Fightmaster, 4 Okla. 38, 44 P. 213.)

VARIAN, J. Budge, C. J., and Givens, T. Bailey Lee and Wm. E. Lee, JJ., concur.

OPINION

VARIAN, J.

Respondent, a married woman living with her husband, took out two policies of fire insurance in her own name, one covering certain real property and the other for $ 1,000 covering the personal property contained in the dwelling-house insured. The said dwelling and contents were totally destroyed by fire. Afterwards, the defendant insurance company was garnished by appellant upon a deficiency judgment obtained against the husband, after mortgage foreclosure, and being a community indebtedness. Respondent commenced this action against the defendant insurance company to recover the loss sustained under each policy of insurance and, on stipulation, the court permitted the judgment creditor to intervene. Before trial, all parties stipulated that defendant might deposit the adjusted amount of loss, i. e., $ 1,400, with the clerk of the trial court, and releasing defendant from further liability in the premises. Later, it was stipulated that the $ 400 loss, on account of the dwelling-house, might be paid to respondent, which was done. Subsequently, before trial, by agreement of counsel, the $ 400 accruing by reason of the damage to the real property was paid to respondent, by order of court, leaving $ 1,000 in the hands of the clerk as the proceeds of the loss of the personal property, which was the amount of the face value of the policy covering the same. The cause was tried to a jury, resulting in a verdict for respondent for the full amount ($ 1,000). Intervenor moved for a new trial, which was denied, and appeals from the judgment and order denying a new trial.

The controversy here is as to the character of the personal property destroyed, whether the separate property of respondent or the community property of herself and husband, appellant contending that it was all community property and subject to execution on his deficiency judgment. Respondent contends that the fund is her separate property, and in addition sets up claims of exemption under the statutes. Her undisputed testimony is that all of the articles enumerated on the settlement sheets used in the adjustment of loss with defendant insurance company were purchased, after marriage, with the proceeds of money given her by her father, or her own earnings while working "in the fruit," or moneys derived from rentals for pasturage given to her by her stepfather in consideration of her caring for a pasture for him and renting it during the year 1925. All these earnings were earned and received by her when she was living with her husband, who was temporarily absent from home for a portion of each year while engaged in logging operations in another state.

C. S., sec. 4656, is as follows: "All property of the wife owned by her before marriage, and that acquired afterward by gift, bequest, devise or descent, or that which she shall acquire with the proceeds of her separate property, shall remain her sole and separate property, to the same extent and with the same effect, as the property of a husband similarly acquired."

All other property acquired by the wife, after marriage, including the rents and profits of her separate property, is community property. (C. S., sec. 4660.) In the absence of any agreement to the contrary, or gift by the husband, these sections make the wife's earnings, while living with her husband, community property. (Ahlstrom v. Tage, 31 Idaho 459, 174 P. 605. See, also, Giffen v. City of Lewiston, 6 Idaho 231, 55 P. 545.)

C. S., sec. 4667: "The wife has the management and control of the earnings for her personal services, and the rents and profits of her separate estate."

And the husband has the management and control of the community property except "the earnings of the wife for her personal services and the rents and profits of her separate estate." (C. S., sec. 4666.)

Under the provisions of these sections, it is clear that money earned by respondent for her personal services, whether as laborer in the orchards and packing-houses or in caring for the pasture of her stepfather, all while living with her husband, is community property, of which she had the management and control. It is equally clear that property acquired by her after marriage, by gift, bequest, devise or descent, is her separate property.

This court has said: "The separate property of either spouse may undergo mutations and changes during the marriage relation and still retain its separate character, yet the proof to trace and identify it in its changed condition must be clear and satisfactory." (Clifford v. Lake, 33 Idaho 77, 190 P. 714; Ahlstrom v. Tage, supra.)

The personal property destroyed by fire was all acquired after the marriage of respondent with her husband, and the burden was upon her to show that it was her separate property, since the presumption is that it is community property. (Humbird...