Thaxton v. Thaxton

• Decision Date: 20 September 1965
• Docket Number: No. 7630,7630
• Citation: 1965 NMSC 106,405 P.2d 932,75 N.M. 450
• Parties: Ruby Dorothy THAXTON, Plaintiff-Appellee, v. Jack La Noue THAXTON, Defendant-Appellant.
• Court: New Mexico Supreme Court

Page 932

405 P.2d 932

75 N.M. 450

Ruby Dorothy THAXTON, Plaintiff-Appellee, v. Jack La Noue THAXTON, Defendant-Appellant.

No. 7630.

Supreme Court of New Mexico.

Sept. 20, 1965.

Ernest A. Polansky, Joseph G. Whitehouse, Keleher & McLeod, Russell Moore, Albuquerque, for appellant.

Charles E. Barnhart, Albuquerque, for appellee.

CHAVEZ, Justice.

Jack La Noue Thaxton, defendant below, appeals from the decree of the district court in a divorce suit instituted by plaintiff-appellee, Ruby Dorothy Thaxton. The appeal is from that part of the divorce decree which awarded appellee one-half of the U. S. Series 'E' bonds which appellant and his deceased father had owned as joint tenants. The bonds were purchased prior to the death of E. E. Thaxton in the name of 'E. E. Thaxton or Jack L. Thaxton, Joint Tenants.' The trial court found that appellant contributed one-half of the purchase price of the savings bonds with earnings of appellant which accrued while he and appellee were married, and concluded that one-half of the bonds were community property. The trial court also concluded that appellee owned an undivided one-fourth interest as her portion of the community contribution toward the purchase of the bonds; and that appellee should receive as alimony $500 per month for 14 months, and then, in lieu of further alimony, she should receive another one-fourth interest in said bonds.

Appellee and appellant were married May 14, 1949, and lived together until May 6, 1963, when appellee filed suit praying for a divorce, for a division of the community property, for alimony and attorney's fees.

Appellant's first point is that the trial court erred in failing to adopt appellant's requested findings of fact Nos. 4, 5, 6 and 10, and to adopt appellant's conclusions of law Nos. 1, 2 and 3. The second point is that the trial court erred in finding that a one-half interest in the U. S. Series 'E' bonds was community property. The substance of these two points and the requested findings of fact and conclusions of law is that appellant did not contribute to the purchase of the bonds, which were purchased by his father and were a gift to appellant; that, upon his father's death, they became the sole and separate property of appellant; and that appellee had no interest in the bonds. Appellant argues that there is not substantial evidence to prove that any community funds went into the purchase of the bonds in question.

It is a familiar rule in this court that, on appeal, we will consider only that testimony which supports the trial court's judgment, and will reject any conflicting testimony in determining whether that judgment is supported by substantial evidence. Perkins v. Drury, 57 N.M. 269, 258 P.2d 379; Herrera v. C & R Paving Company, 73 N.M. 237, 387 P.2d 339.

In New Mexico property acquired after marriage by the husband is presumed to be community property, and the party asserting the separate character of the property has the burden of going forward with the evidence and establishing separate ownership by a preponderance of the evidence. On appeal the question of whether the presumption has been overcome depends on whether there is substantial evidence to support the findings of the trial court. Campbell v. Campbell, 62 N.M. 330, 310 P.2d 266; Conley v. Quinn, 66 N.M. 242, 346 P.2d 1030.

In Campbell v. Campbell, supra, after discussing our precedent on the question of presumptions, we stated:

'Adhering, then, to the principles of these cases, it may be said that when evidence in the case casts doubt upon the issue, a finding of community ownership will be upheld as supported by substantial evidence. In counterpart, when the evidence of separate ownership is clear and no evidence aside from the presumption exists to the contrary, circumstantial or otherwise, a finding of community ownership should be overturned upon appeal as not supported by substantial evidence.'

Appellee testified that appellant came home several times and told her 'I bought some bonds today,' and that they were purchased in the names of Dr. E. E. Thaxton and J. L. Thaxton; that the bonds were a joint family endeavor; and that there was no indication by appellant and his father that the bonds were the sole and separate property of anyone. There was further testimony by appellant that some money could have been available to him as a result of depreciation taken in the partnership and, if such money was available to him, he did not know where it went.

The only testimony to rebut the presumption of community property was by appellant himself, who testified he used none of his own money in the purchase of the bonds, although he did testify that he might have purchased three or four bonds. Mrs. Ethel Thaxton, appellant's mother, also testified that her husband had income from dividends and social security, in addition to that received from the practice, and that this could have been the source of the money for purchasing the bonds.

In view of appellee's testimony and the presumption favoring community property, as well as the absence of evidence rebutting this presumption other than the above testimony of appellant and his mother, we hold the trial court's judgment, that community funds were used to purchase the bonds and a one-half interest in the bonds was community property, is supported by substantial evidence. See Clark, Presumption in New Mexico Community Property Law: The California Influence, 25 So. Cal.L.Rev. 149, 160. We note the argument concerning the distinction between property acquired by onerous title and that acquired by lucrative title. The finding and conclusion here being in effect that the bonds were acquired by 'onerous' title, this argument avails appellant nothing.

Appellant's third point is that the trial court erred in giving any part of said Series 'E' bonds, either by way of community property or as alimony, to appellee since such bonds were the sole and separate property of appellant.

Reserving the question raised by appellant regarding the alimony, we turn first to the contention that the bonds were the separate property of appellant. Two recent decisions of the United States Supreme Court are cited by the parties, Free v. Bland, 369 U.S. 663, 82 S.Ct. 1089, 8 L.Ed.2d 180; and Yiatchos v. Yiatchos, 376 U.S. 306, 84 S.Ct. 742, 11 L.Ed.2d 724.

In Free v. Bland, supra, Series 'E' bonds were issued to a husband and wife in Texas. The bonds were purchased with community funds and the husband and wife were designated as alternative co-owners, that is, as 'Mr. or Mrs.' After the wife's death the husband claimed exclusive ownership of the bonds by reason of Treasury Department Regulation 31 CFR Sec. 315.61, providing that the survivor will be recognized as the sole and absolute owner. However, a son of the deceased wife by a former marriage, as the principal beneficiary under the will, claimed an interest in the bonds by virtue of the community property law of Texas. The Supreme Court of the United States, in reversing the supreme court of Texas, held that the co-owner of the bonds who survives the other co-owner is the sole owner of the bonds, and that the Texas community property law, which in effect prohibited a married couple from taking advantage of the survivorship incident to the bonds, is pre-empted by the federal regulations in view of the supremacy clause of the Constitution of the United States. The court stated:

'Article I, Section 8, Clause 2 of the Constitution delegates to the Federal Government the power '[t]o borrow Money on the credit of the United States.' Pursuant to this grant of power, the Congress authorized the Secretary of the Treasury, with the approval of the President, to issue...