Suchan v. Suchan

• Decision Date: 15 May 1984
• Docket Number: No. 14890,14890
• Parties: Carmen Estelle SUCHAN, Plaintiff-Respondent, v. George A. SUCHAN, Defendant-Appellant.
• Court: Idaho Supreme Court

Page 607

682 P.2d 607

106 Idaho 654

Carmen Estelle SUCHAN, Plaintiff-Respondent, v. George A. SUCHAN, Defendant-Appellant.

No. 14890.

Supreme Court of Idaho.

May 15, 1984.

Roger D. Ling, of Ling, Nielsen & Robinson, Rupert, for defendant-appellant.

Richard K. Smith, of Parsons, Smith, Stone & Fletcher, Burley, for plaintiff-respondent.

DONALDSON, Chief Justice.

This case presents to us questions regarding the character of various property incident to a property division in a divorce proceeding. In particular, we will deal with the issue of transmutation and will examine an agreement entered into by the parties on June 30, 1972.

The salient facts are undisputed by the parties. Carmen and George Suchan were married on June 10, 1954. Throughout the marriage, George was engaged in the business of farming. In 1950, four years prior to the parties' marriage, George's parents purchased on contract both the West Half and the East Half of Section 16, Township 8 South, Range 22 East of the Boise Meridian. The contract for the West Half was in George's name. The contract for the East Half was in the name of George's father. George's parents made the down payment on each half and made the annual payments on each contract through 1958. Beginning in 1959, George and Carmen made the annual payments on both pieces of property out of community funds.

George and Carmen made the balance of the payments on the West Half, except for the 1969 annual payment. George and Carmen completed paying off the West Half in 1972, and a deed was issued in the name of George Suchan. The West Half was then mortgaged, and the funds were used to purchase and install a well and irrigation system on the parcel. As a result, the land was converted from desert land into productive farm land.

From 1959 through 1978, George and Carmen also made all the annual payments on the East Half, except for the 1972 annual payment. In 1971, George's parents assigned the East Half contract to George. Subsequently, in 1978, a deed was issued in the name of George Suchan to the East Half. The well and irrigation system installed on the West Half was also used to convert the East Half from unimproved desert land to productive farm land.

For several years prior to the divorce, the parties lived in a home located on three acres of property which was owned by George's parents. The parties remodeled the home and, in addition, purchased and installed two grain bins, a shop building, and a hog feeding facility on the property. In 1977, George inherited a one-half undivided interest in this property from his father. In 1980, George's mother quit-claimed her one-half interest in this property to George.

On October 28, 1980, Carmen Suchan filed for divorce. After a trial on the matter, the magistrate issued his Findings of Fact and Conclusions of Law, and concluded that the parties were entitled to a divorce on the grounds of irreconcilable differences. In addition, the magistrate concluded that the three acres together with the parties' home was George's separate property, but was subject to the community's right of reimbursement in the sum of $60,000 for improvements made on the property by the community, and that the remainder of the real property, including the West and East Halves of Section 16, was community property. Finally, the magistrate disregarded two obligations which George contended were community debts.

George appealed the magistrate's decision to the district court. The district court filed both a Memorandum Opinion and a Supplemental Memorandum Opinion, and affirmed the magistrate's decision. This appeal followed.

We will first address the characterization of the West and East Halves of Section 16. We will then address the community's right to reimbursement for expenditures made on the three-acre parcel.

I.

The trial court based its conclusion that the West and East Halves of Section 16 were community property on two separate theories: (1) that the West and East Halves have been community property from the time that they were acquired; (2) that even if the West and East Halves were separate property at the time they were acquired, they were transmuted to community property by agreement of the parties on June 30, 1972. On appeal, the district court was hesitant to adopt the trial court's first theory, and therefore, expressed no opinion on it. However, the district court affirmed the trial court on the second theory.

In determining the character of the West and East Halves of Section 16, we are guided by two fundamental principles of our community property law. First, it is axiomatic that all property acquired by either spouse during the marriage is rebuttably presumed to be community property. Stanger v. Stanger, 98 Idaho 725, 571 P.2d 1126 (1977); Guy v. Guy, 98 Idaho 205, 560 P.2d 876 (1977). Second, I.C. § 32-903 provides that all property acquired by either spouse prior to the marriage, or thereafter acquired by gift, bequest, devise or descent, constitutes separate property.

Applying these two rules of law to the facts in this case, we conclude that both the West and East Halves of Section 16 were George's separate property from the time they were acquired. In particular, in characterizing the West Half, we are presented with a factual situation almost identical to the one presented to us in Fisher v. Fisher, 86 Idaho 131, 383 P.2d 840 (1963). In Fisher, we quoted approvingly a portion of American Jurisprudence which states that "property to which one spouse has acquired an equitable right before marriage is separate property, though such right is not perfected until after marriage." Fisher, supra at 136, 383 P.2d at 842 (quoting 11 Am.Jur. Community Property § 20, p. 187). Since the contract on the West Half was in George's name and was entered into four years prior to the parties' marriage, George acquired an equitable interest in this property prior to marriage. Therefore, in accordance with our holding in Fisher, the West Half was George's separate property from the time it was acquired.

As to the East Half of Section 16, the trial court found that the contract was in the name of George's father. Furthermore, the trial court found that this contract was assigned to George in December of 1971. The only evidence introduced regarding this assignment was the testimony of George's mother wherein she stated that the assignment was a "gift to George." Thus, according to the evidence, the contract for the East Half was received by George during the marriage by gift. Applying I.C. § 32-903, the contract on the East Half would be George's separate property. Therefore, we hold that the East Half of Section 16 was George's separate property at the time it was acquired.

Having determined that the West and East Halves of Section 16 were George's separate property, we will now examine what effect, if any, the June 30, 1972 agreement had on the character of the property. The agreement entered into by the parties reads as follows:

"AGREEMENT AS TO STATUS OF COMMUNITY PROPERTY

"After Death Of One Of The Spouses

"This Agreement, made and entered into this 30th day of June, 1972, by and between George A. Suchan and Carmen Suchan, husband and wife, of Rupert, Minidoka County, State of Idaho.

"WITNESSETH: That whereas the said parties hereto are owners of certain community real property below described and are desirous that said real property together with the following described community personal property, now owned, and all other community personal property that may hereafter be acquired, shall pass without delay and expense, upon the death of either, to the survivor.

"REAL PROPERTY

"Said Real property is situated in the county of Minidoka State of Idaho, and is described as follows:

"The West Half and the East Half of Section Sixteen (16), also the Southeast 1/4 of Section Seventeen, both in Township Eight (8) South, Range Twenty-two (22) East Boise Meridian, Minidoka County, Idaho.

"PERSONAL PROPERTY

"Checking Accounts, Savings Accounts, Stocks and Bonds, Automobiles, Household goods and any and all other miscellaneous goods of whatsoever kind or description.

"NOW THEREFORE, for and in consideration of the sum of One ($1.00) Dollar in hand paid, and other valuable consideration, the receipt of which is hereby acknowledged by each party hereto, and also, in consideration of the love and affection that each of said parties bears for the other, and the mutual benefits to be derived by the parties hereto, it is hereby agreed, covenanted, and promised:

"I.

"That the said described real property with all appurtenances and fixtures thereto, and the said described personal property, now owned, and all community personal property that may hereafter be acquired, shall be considered and is hereby declared to be community property and to the extent necessary we do hereby transfer, grant and convey the described property to each other as community property.

"II.

"That on the event of the death of either of the aforementioned parties, while the other party survives, the whole of said community property as herein defined and described shall immediately vest in the surviving party in fee simple.

" /s/ George A. Suchan

" /s/ Carmen Suchan"

After the parties executed the agreement, it was recorded in Minidoka County on June 30, 1972.

George Suchan admits the execution and recording of the agreement, but argues that the parties entered into the agreement pursuant to I.C. § 32-921 repealed by 1971 Idaho Sess.Laws ch. 11, p. 233 (repeal effective July 1, 1972), and that the parties intended the agreement to take effect only upon the death of one of the spouses. Carmen Suchan, on the other hand, argues that only the portion of the agreement dealing with disposition of the community property upon death of one of the spouses was to take effect upon death, and that the paragraph identified as "I" of the agreement was to take effect immediately.

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