Peters v. Skalman

• Decision Date: 12 September 1980
• Docket Number: No. 3613-II,3613-II
• Citation: 27 Wn.App. 247,617 P.2d 448
• Parties: John PETERS and Nickie Peters, husband and wife, Respondents, v. Jeannine SKALMAN, Gwendolyn McFarlane, Richard W. Peters, and Marian Peters, Appellants, Gayle Peters, Defendant. Gwendolyn McFARLANE and Jeannine Skalman, as Executrices of the Estate of William Charles Peters, Appellants, v. John PETERS and Nickie Peters, husband and wife, Respondents. ESTATE of William C. PETERS, Deceased, Plaintiff, v. John PETERS and Nickie Peters, husband and wife, Respondents.
• Court: Washington Court of Appeals

Page 247

27 Wn.App. 247

617 P.2d 448

John PETERS and Nickie Peters, husband and wife, Respondents, v. Jeannine SKALMAN, Gwendolyn McFarlane, Richard W. Peters, and Marian Peters, Appellants, Gayle Peters, Defendant.

Gwendolyn McFARLANE and Jeannine Skalman, as Executrices of

the Estate of William Charles Peters, Appellants, v. John PETERS and Nickie Peters, husband and wife, Respondents. ESTATE of William C. PETERS, Deceased, Plaintiff, v. John PETERS and Nickie Peters, husband and wife, Respondents.

No. 3613-II.

Court of Appeals of Washington, Division 2.

Sept. 12, 1980.

Kenneth W. Weber, Paul L. Henderson, Vancouver, for appellants.

Duane Lansverk, Vancouver, for respondents.

PEARSON, Acting Chief Judge.

The question here concerns a property dispute among heirs of W. C. Peters and Marian Peters. Jeannine Skalman, Gwendolyn McFarlane, Richard Peters, and Marian Peters, hereinafter referred to as the Skalman group, appeal from several judgments entered in favor of John and Nickie Peters. The Skalman group has raised a number of issues, most of them involving challenges to the trial court's findings of fact. We are satisfied that the challenged findings are supported by substantial evidence and that the remaining issues do not require reversal. We therefore affirm.

W. C. Peters and Marian Peters, parents of Jeannine Skalman, Gwendolyn McFarlane, Richard Peters, Gayle Peters, and John Peters, were married in 1920. In 1935 the family moved to a 15-acre parcel of land at Mill Plain. The couple's marriage had always been stormy; they separated for the last time in 1943. From that time forward, W. C. held himself out as a single man. It was only after W. C.'s death that it was discovered that he and Marian might never have been divorced.

In 1944, W. C., as an "unmarried" man, obtained a statutory warranty deed to the Mill Plain property from H. K. Lugger, his predecessor in title. Prior to that time, from 1935 to 1944, the tax rolls indicated that tax statements were sent to H. K. Lugger in care of W. C. Peters. ¹ At all times thereafter until 1959, W. C. maintained the land and paid taxes therefor himself or with the assistance of John Peters. In 1959, W. C. made a wedding gift of the east half of the parcel to John and Nickie Peters. W. C. continued to take responsibility for the west half.

In 1971 the State of Washington commenced condemnation proceedings to obtain a strip of land lying across both the eastern and western halves of the parcel. On July 5, 1972, W. C. instructed Charles Gallup, a Vancouver attorney, to prepare a deed of gift in favor of John and Nickie Peters for the west half of the property. Mr. Gallup was to hold the deed until further instructions. At this time, W. C. was aware that he was terminally ill.

In September 1972, Mr. Gallup again spoke with W. C., who reaffirmed his intent to make a gift of the property to John and Nickie. Mr. Gallup, in accordance with W. C.'s directions, recorded the deed on September 26. That same month, W. C. gave John the condemnation proceeds on the west half of the property. Pursuant to an oral trust, John was to use the money to care for W. C., to pay the debts of his estate, and to divide the remaining proceeds equally among the five children. Although the precise amount of money placed in the trust is not readily ascertainable from the record, it appears to be somewhat in excess of $42,000.

W. C. became disillusioned with John, and on October 18, 1972, filed a complaint in Clark County Cause No. 54114 to have the deed to the west half of the parcel set aside on the bases of fraud, overreaching, and mistake. In addition, W. C. executed a second trust agreement, similar in terms to the oral agreement, but naming Jeannine Skalman and Gwendolyn McFarlane instead of John as trustees. Finally, W. C. attempted to revoke the oral trust. W. C. died in November of 1972. Marian Peters is still living.

In April 1975, John and Nickie Peters initiated an action seeking to quiet title to the west half of the Mill Plain parcel in Clark County Cause No. 60879. All of the children and Marian Peters were named as parties defendant. Gwendolyn McFarlane and Jeannine Skalman, as executrices of W. C.'s estate, filed a separate suit, No. 62062, against John and Nickie for quiet title and ejectment of both the west and east portions of the Mill Plain parcel and to recover the condemnation award. All three cases were consolidated for trial; the estate was substituted as party plaintiff in Cause No. 54114. Trial was held in February and March 1978. The trial court found for John and Nickie Peters in all three cases. The Skalman group appeals.

This appeal is a challenge to the trial court's conclusion that by 1972 W. C. had obtained title to the west half of the Mill Plain property by adversely possessing Marian's community interest. Before addressing this issue, however, we will dispose of the Skalman group's contention regarding ownership of the east half of the property.

As their first assignment of error, the Skalman group contends that the trial court erred in determining that John and Nickie had obtained title to the east half of the property by adverse possession. We disagree. The evidence shows that besides using the property to graze farm animals, John built a fence between the east and west parcels, moved a barn onto the land, and made arrangements to have water lines connected to the property. In addition, it is undisputed that he and Nickie paid taxes on the land for a period in excess of the 7 years required by statute for individuals claiming under color of title. RCW 7.28.050. Clearly, the trial court's findings and conclusions in this regard are appropriate. See Peeples v. Port of Bellingham, 93 Wash.2d 766, 613 P.2d 1128 (1980).

We will proceed to address the more difficult question: Did the trial court err in determining that W. C. had obtained title to at least the west half of the property as his separate estate by adversely possessing Marian's community interest? If W. C. had obtained title in that manner, he was free to deed the property to John and Nickie Peters in 1972; if not, Marian Peters is entitled to have the deed set aside. RCW 26.16.030 (formerly RCW 26.16.040).

An analysis of this issue requires that we review some of the well established concepts of our community property system of ownership between spouses. It is, of course, true that community property is a form of partnership, with each spouse owning an undivided one-half interest in every community asset. In Re Estate of Patton, 6 Wash.App. 464, 494 P.2d 238 (1972). However, it is a special form of partnership with the spouses not only owing each other the highest fiduciary duties, but also with the husband (and since 1972 the wife) charged with the statutory duty to manage and control community assets for the benefit of the community. Cross, The Community Property Law in Washington, 49 Wash.L.Rev. 729 (1974). Komm v. Department of Social and Health Servs., 23 Wash.App. 593, 597 P.2d 1372 (1979). This duty continues until the marriage ceases to exist-mere physical separation does not dissolve the community and terminate the obligation of the managing spouse to act for the common good. See Dizard & Getty v. Damson, 63 Wash.2d 526, 387 P.2d 964 (1964); Cohn v. Cohn, 4 Wash.2d 322, 103 P.2d 366 (1940). See generally, Cross, 1972 Community Property Amendments, 48 Wash.L.Rev. 527, 543 (1973). Losses as well as gains which result from the managing spouse's activities flow to the community, absent a showing of bad faith. Hanley v. Most, 9 Wash.2d 429, 115 P.2d 933 (1941); Oil Heat Co. v. Sweeney, 26 Wash.App. 351, 613 P.2d 169 (1980).

To hold that possession and control by a spouse charged with the duty to manage community property for the benefit of the marital unit could ever ripen into adverse possession would be to fly in the face of the above-discussed principles. We are satisfied that there exists a conclusive presumption that possession of community property by a managing spouse can never be hostile to the interests of the other spouse and that such possession and management always inures to the benefit of the community. ²

On the other hand, termination of the marriage relieves the managing spouse of his or her duty to act for the benefit of the lapsed community. This termination can result from legal action-divorce or dissolution-or when it can be determined that the marriage is defunct. Here, the trial court found that Marian and W. C. separated for the last time in 1943, and that thereafter their conduct indicated that the marriage had been renounced. The court therefore concluded that the marriage was defunct as of such date.

A defunct marriage exists where it can be determined that the spouses, by their conduct, indicate that they no longer have a will to union. In Re Estate of Osicka, 1 Wash.App. 277, 461 P.2d 585 (1969); MacKenzie v. Sellner, 58 Wash.2d 101, 361 P.2d 165 (1961); In Re Estate of Armstrong, 33 Wash.2d 118, 204 P.2d 500 (1949); Togliatti v. Robertson, 29 Wash.2d 844, 190 P.2d 575 (1948). Physical separation, by itself, does not negate the existence of the community. Kerr v. Cochran, 65 Wash.2d 211, 396 P.2d 642 (1964); Rustad v. Rustad, 61 Wash.2d 176, 377 P.2d 414 (1963). The test is whether the parties through their actions have exhibited a decision to renounce the community "with no intention of ever resuming the marital relationship." Oil Heat Co. v. Sweeney, supra 26 Wash.App. at 354, 613 P.2d at 171. Although previous cases in which a defunct marriage was found involved a long separation following entry of an interlocutory divorce decree or execution of a written separation agreement, Togliatti v. Robertson, supra; In Re Estate of Armstrong, supra; MacKenzie v. Sellner, supra; In Re Estate of Osicka, supra, we are satisfied that so long as the actions of the parties evidence an intent to renounce the marriage, no such formal action is...