Court Opinion

ID: 5796038
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:18:32.367436+00
Date Added: 2024-06-11T08:42:25.485568
License: Public Domain

Simons, J.
(dissenting). In my judgment the evidence in this record cannot be. strained to fit it within established equitable rules permitting plaintiff the relief granted her by this decision. In effect the majority have formulated a community property rule for this plaintiff and it is a community property rule with a vengeance, for she has received not only a half interest in her husband’s property but alimony also by virtue of a prior divorce decree. If such a rule is to be adopted, it should be done by the Legislature and not by court decision.
By this action plaintiff sought a division of jointly owned real property and to recover a "past amount of the profits, salaries and other monies due” her to compensate for her efforts in defendant’s tavern business. Neither in her pleading nor her testimony did she claim ownership of the tavern business. Notwithstanding her prayer for relief, the trial court and the majority, in addition to apportioning the value of the real estate, have created a constructive trust and awarded plaintiff one half of the value of defendant’s business.
To merit such relief plaintiff must prove that because of a confidential relationship she parted with property relying upon a promise of her husband, which promise was later breached by him and resulted in his unjust enrichment (Foreman v Foreman, 251 NY 237, 240; Sinclair v Purdy, 235 NY 245, 253; Fischer v Wirth, 38 AD2d 611; Matter of Wells, 36 AD2d 471, 474, affd 29 NY2d 931). I find none of these elements established in the record other than the confidential relationship of husband and wife.
There was no express promise between the parties in this case, and none is claimed. While a promise may be implied, the marriage alone is not sufficient to support such an inference. In this State each spouse has the right to own and control his or her property and in these days of governmental regulation and sophisticated taxation there are many legitimate reasons for married persons to do so. True enough, the husband and wife relationship is a partnership in the broadest sense of the word but if it is to be also a business partnership or a joint business venture in which each spouse equally participates both as to profits and losses, this should appear by *453something more than the flimsy evidence in this record. Many husbands volunteer business advice and heavy labor to their wives in the operation of a wife’s separately owned business, just as wives similarly situated to this plaintiff help out from time to time in their husbands’ offices or businesses. These things are done routinely in marriage and without any expectation of remuneration or an ownership interest in the spouses’ business. The law in New York has not reached the point at which a spouse may hold that there is a presumption of agreement to share equally all assets accumulated or earned during the marriage. If such consequences are to follow, there must be evidence of promise on the part of the husband, if the property is in his name only, that it is being held for the benefit of both parties (see Fischer v Wirth, supra; Matter of Wells, supra; see, also, Vassel v Vassel, 40 AD2d 713, affd 33 NY2d 533; Ehalt v Ehalt, 38 AD2d 839).
Where, then, is the evidence of a promise in this case? Certainly not when the business was conveyed to defendant and his partner Tomak in 1957 or to the husband alone two years later. During that time plaintiff was familiar with all aspects of the business and participated in it with full knowledge of the ownership and licensing arrangements. The parties accepted an arrangement by which the real property was held in joint names and the business was in the defendant’s name. To plaintiff’s knowledge all the business certificates, liquor licenses and waterway permits contained only his name. There is not the slightest evidence of any fraud, concealment or overreaching by defendant and for 12 years plaintiff made no protest or claim that she owned any part of this business. That claim came after the divorce.
The only evidence of a promise by the husband which the majority refer to is found in two statements. The first is a quotation of defendant which was nothing more than a generalized response on cross-examination. He expressed his desire as a man employed in a company which had no pension plan to retire to his personally owned business to support his family. This commonly held desire is not indicative of a promise of shared ownership. The other quote, plaintiff’s statement that the parties operated the business jointly, similarly does not support an inference of joint ownership for two reasons: first, the joint operation occurred at a time when the business was in defendant’s name alone and preceded any financial contributions by plaintiff, and second, because the *454work in the business by plaintiff was not referable to a promise by defendant that she would thereby acquire an interest in the property (see Matter of Wells, supra, p 474). The efforts which plaintiff contributed to the operation were not induced by an abuse of the husband and wife relationship (see Ahrens v Jones, 169 NY 555; Fischer v Wirth, supra). Finally, the majority rely upon the transfer of plaintiff’s $4,000 inheritance in 1967 but she did not claim any promise by her husband induced that transfer.
More importantly, however, it is not clear from the evidence that plaintiff transferred these funds to defendant’s business. Plaintiff testified that the $4,000 went into the business "one way or another” but she later particularized this by saying that of this sum $3,000 was used for a parking lot and the rest for "major things that had to be done that required more than fifty dollars.” Thus, the credible evidence is that the money was an investment in the real property for which she was fully compensated by the judgment in her first cause of action. At best, the use of $1,000 of this inheritance may be in doubt but plaintiff’s failure to explain the use of her money should not be parlayed into an award of $27,500 for the business in addition to the $15,000 in apportioned value of the real estate.
This was a marginal business, at best. In the early years it showed receipts which were so negligible that they hardly justified the effort. The business gradually improved but even during the seven years from 1966-1972 it showed a profit only in the years 1969 and 1971. In the early years both parties worked at the tavern, and before defendant’s heart attack and retirement in 1967 the debts of the business were frequently paid with funds from his outside employment. Notwithstanding the recitals in the majority opinion, plaintiff’s input of time and effort after 1964 is a matter of considerable doubt. Her husband, her daughter and her son-in-law described her efforts as something less than those of a key operator in the organization and at that time a full-time employee was hired to be responsible for the business during the day when defendant was working. As for plaintiff’s sharing of the liabilities, I am not aware that signing a form 1040 joint tax return constituted an assumption of business liability by the wife.
Throughout the operation of this tavern plaintiff used business receipts and tips for her own purposes and she periodically purchased a new car in her own name with business funds. The conclusion is inescapable that plaintiff has been *455more than repaid for whatever money and effort she put into the business or the real estate, that her work was compensated for in precisely the manner contemplated by the parties and without any unjust enrichment of defendant.
It hardly seems necessary to comment upon the issue of unclean hands. By confirming plaintiff’s claim of ownership the court establishes that she was a party to the misrepresentations to the State Liquor Authority. That fact alone should be enough to prevent equitable relief (see O’Connor v O’Con-nor, 263 App Div 820, affd 288 NY 579; and see Carmine v Murphy, 285 NY 413 and Towner v Berg, 5 AD2d 481, 487).
I would reverse the judgment insofar as appealed from and dismiss the complaint.
Card amone, J. P., and Mahoney, J., concur with Goldman, J.; Simons and Witmer, JJ., dissent and vote to reverse the judgment and dismiss complaint in an opinion by Simons, J.
Judgment modified in accordance with opinion by Goldman, J., and as modified affirmed without costs.