Court Opinion

ID: 6669760
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:08:43.43212+00
Date Added: 2024-06-11T16:00:28.198118
License: Public Domain

Hawley, C. J.,
dissenting:
I agree with the conclusions reached by the court that the court below had the power, and it was its duty, to grant a new trial of the issues relating to the property rights of the parties, if there was any error which materially affected the rights of the plaintiff; that all property owned by the defendant at the time of his marriage, and all property which has since been acquired with funds derived from the rents, issues and profits of such property, and all property acquired by an exchange of property owned by him at the time of his marriage, is his separate.property. But I am unwilling to give my assent to the proposition that the profits, if any, derived from the hotel and saloon business, in which the defendant was eugaged, would be his separate property. I am of opinion that the profits, if any, made in the hotel and saloon business would belong to thp community. There is a distinction that must be kept constantly in view between a business which does not, necessarily, derive its profits from the fact of the ownership of the property in which it is conducted, and a business which depends entirely for its profits upon the fact of the ownership of-the property. If the owner rents a house, the money collected for the rent belongs to him because of his ownership of the property. The profits from the property in such a case do not, necessarily, depend upon the efforts or skill of either spouse,' although some labor would be *396required. If, instead of renting the house, the owner thereof engages in a business which is in a great degree dependent-upoii the skill and labor of the parties, or either of them, the profits (or a portion of them, at least) realized from that business would be community property.
Several authorities are cited to sustain tli-e proposition that the fact that the property was acquired by the joint efforts of the husband and wife does not necessarily make it community property. This is true with reference to cases where the accumulations of property were derived from conducting and carrying on the farming business, and other business of like character. In such cases it is almost universally held that the crops growing upon and produced from lands which are the separate property of the wife, do not become community property by the mere fact that the husband gave his time, labor, and skill in the production thereof. Why? The reason given is that, in the absence of any agreement to-the contrary, the title to the products belongs to the owner of the land; that the ownership of a farm necessarily carries with it the right to the products grown thereon. In such a case the skill or labor of either spouse has nothing to do with the question of the ownership of the crops. It is also held in many cases, upon the same reasoning, that the increase of personal property follows the ownership. In Rush v. Vought the court of common pleas was of opinion that the fact that the labor on the farm was bestowed by the husband and his children, necessarily gave the husband an interest in the products of the soil; but the supreme court took a different view, and said that the error of the court below arose from an oversight of the true foundation of the wife’s right. “This is not the case of property purchased during coverture, where the price of it, presumptively, if not actually, came from the husband. But here the title to the products grows out of the title to the laud itself. The ownership of the farm carries with it, at law and in equity, the right to its products. No change can take place in the title to the fruits of the soil without the owner parts with his title or possession, or permits its *397cultivation for the benefit of another. But the labor of others for the owner, though mingling in the production, creates no title to the products. The owner may be a debtor for the labor which tills his soil, or that labor may be given without a required equivalent, or for an equivalent in maintenance which is consumed in its use, but this gives no usufruct or ownership in the product of the tillage. It matters not, therefore, whether the labor, when thus rendered, be that of the husband or another; without a contract for the product or cultivation by the husband for himself, it confers no title or usufruct.” (55 Pa. St. 443.)
This is the key-note of the entire .decision. It is the reasoning upon which the opinion is based, and the ground' upon which the conclusion is reached. The authorities cited are all alike. They declare that the title to the crops follows the title to the land, even if produced by the joint labor of both husband and wife, or the labor of the husband alone, if the wife owns the land ; that the care, control, and management by the husband of his wife’s property, and his labor upon it, does not change the title to the land. Thus, it is said, “A husband may devote his time and skill to the management of his wife’s property and the products will belong wholly to the wife, because they are but the accretions of her property, and he has a right to give her his labor.” (Hamilton v. Booth, 55 Miss. 62.) The fact that her husband may have done some work about raising the crops “does not affect her title to the property.” (Garvin v. Gaebe, 72 Ill. 448.) “The right to the profits and natural increase of tangible personal property is incident to and results from the ownership.” (Williams v. McGrade, 13 Minn. 52.) But the principle upon which these and kindred cases were decidéd does not apply to cases where a business is conducted, the profits of which are derived by means of the joint labor and skill of the husband and wife, or either of them, independent of the title to the property. It does not apply to a business carried on in the wife’s name with her money, where “the profits arose in part from his time and skill.” So held in relation to the business of *398buying and shipping grain and stock, (Wortman v. Price, 47 Ill. 23,) the lumber business, (Wilson v. Loomis, 55 Ill. 355,) and the foundry and machine business, (Glidden v. Taylor, 16 Ohio St. 509.)
In Wortman v. Price the court said: “We have no hesitation in saying that if she advances capital to her husband, with which he engages in trade, such capital and its fruits in the business will be subject to the husband’s debts, even though ho may claim to be acting as his wife’s agent, and doing business in her name.” Referring to a former case, where the court had said the husband might act as agent for his wife, the court said this simply meant “that he may act as her agent for a particular transaction, or, generally, for the control of her property or the investment of her funds. He may lease her property and collect the rents, or invest her money, or change the character of her investments, if authorized by her, and he may do this without subjecting her property to his debts. But we did not say * * * that she could make him her agent for the purpose of engaging in trade, to be managed by him, and to which all his time and energy might be devoted, and that the property embarked in such trade and its profits would be beyond the .reach of his creditors. Such is not the law. ’ ’
In Glidden v. Taylor the court said : “Disrobing, then, the transactions of all matters of form, and looking at the naked facts, it appears that Mr. Taylor, being skilled in the business, established a manufactory for the manufacture and repair of various kinds of machinery, which was conducted under his sole charge for several years ; that under his energetic, skillful and prudent management the business was profitable; that, after applying so much of the profits as was necessary to keep up the establishment, he applied the remainder to the purchase, in his wife’s name, of the real estate described in the petition; * * * that the entire accumulations from the business, above expenses, amounted to six or seven thousand dollars; and that in establishing and conducting the business he had used the money of Mrs. Taylor, his wife. The foregoing is the sub*399stance of the transaction; and the question is whether the title of Mrs. Taylor to the property thus acquired is, in equity, unimpeachable by the plaintiffs, who are antecedent creditors of the husband. The property in controversy cau, in no just sense, be said to be either the income, increase or profits of the money given to Mrs. Taylor.”
In New Jersey, the court, in deciding that the wife is entitled to the rents and products of her farm or other property, and the products of the labor of herself and minor children, distinguishes these from the proceeds of trade carried on by her with her separate property. (Johnson v. Vail, 14 N. J. Eq. 429; Quidort v. Pergeaux, 18 N. J. Eq. 480.)
In Quidort v. Pergeaux the court said: “The law was intended to protect the property and earnings of a married woman, and not the property or earnings of her husband, against his creditors; and when, as in this case, they mix up the earnings of the wife with those of her husband, so that they cannot be separated, the husband cannot make a cleai', distinct gift of her own earnings to the wife, and they remain, as at common law, his property.”
Numerous other eases might be cited, but the above are sufficient to show that a distinction, such as I have stated, exists. This distinction should not be lost sight of in applying the principle of law to the special facts of the case. The profits, if any, of the hotel and bar business would come in part from the fact of ownership of the property in which the business was conducted; but the success of the business would, in a greater degree, depend upon the (act, time, skill, labor, and efforts of the husband or wife, or both. In my opinion, the evidence in this case does not justify the findings of the court that no profits were realized from the hotel and saloon business conducted by the defendant and his wife. It is true that the defendant testified in general terms that the Lake House, as conducted by him, “did not pay expenses;” that “the hotel did not make anything.” Why? When the testimony is carefully reviewed, it will be ascertained that the hotel business, in the *400opinion of the defendant, was conducted for the benefit of his toll-road, and hence, in his estimation of receipts, he gives the toll-road, instead of the hotel, the credit of all the profits. With reference to the property purchased after the marriage, the defendant testified as follows: “In makiug purchases of property which I have purchased since my marriage with plaintiff, I did not borrow any' money', but used my own money.” He further testified that when they' were married he was possessed of considerable property, which afterwards became of great value, and from which he derived large sums of money, and that at the time of his marriage his wife had nothing but her clothes. The inference to be drawn from this testimony is that the property purchased after his marriage was acquired by' his separate means; but it is questionable, to say the least, whether it is, independent of the question of profits in the hotel business, of so positive, clear, and' convincing a character as to overcome the presumption of the law that all property acquired during coverture is community property.
In Schmeltz v. Garey, 49 Tex. 60, the court decided that the mere fact that at the time of the marriage the husband had considerable money and,the wife had nothing; that after the marriage the parties lost money—without explicitly tracing the purchase money or consideration to the separate property of the husband—will not rebut the statutory presumptiou that property purchased during the marriage is community' property'. Winter v. Walker, 37 Pa. St. 156, is substantially to the same effect. But, be that as it may, it is apparent that defendant’s testimony in this respect is based upon his assertion that the hotel business did not make any money', and heuce his testimony' upon this point must be considered subject to the question whether or not there were any' profits derived from the hotel business. I am of opinion that the testimony shows that there might and would have been a profit in that business if it had been credited with the business it transacted. If there were any profits legitimately arising from the hotel and saloon business, the money was mingled with the receipts from the toll road, *401and from the rents, issues and profits of defendant’s separate property, and the receipts of money were so blended together as to prevent the community property, or the amount of it, from being traced. It would, therefore, be impossible to tell what proportion of the community funds, or the funds of defendant’s separate estate, was thereafter used in the purchase of other property, and the result would be that the property so purchased should be treated as community property.
In Meyer v. Kinzer, 12 Cal. 251, the court said: “The statute proceeds upon the theory that the marriage, in respect to property acquired during its existence, is a community, of which each spouse is a member, equally contributing, by his or her industry, to its prosperity, and possessing an equal right to succeed to the property after dissolution, in case of surviving the other. To the community all acquisitions by either, whether made jointly or separately, belong. No form of transfer or mere intent of parties can overcome this positive rule of law. All property is common property, except that owned previous to marriage, or subsequently acquired in a particular way. The presumption, therefore, attending the possession of property by either, is that it belongs to the community ; exceptions to the rule must be proved. * * * This invariable presumption which attends the possession of property by either spouse during the existence of the community, can only be overcome by clear and certain proof that it was owned by the claimant before marriage, or acquired afterwards in one of the particular ways specified in the statute, or that it is property taken in exchange for, or in the investment, or as the price of, the property so originally owned or acquired. The burden of proof must rest with the claimant of the separate estate. Any other rule }vould lead t.o infinite embarrassment, confusion and fraud. In vain would creditors or purchasers attempt to show that the particular property seized or bought was not owned by the claimant before marriage, and was not acquired by gift, devise or descent, or was not such property under a new form consequent *402upon some exchange, sale or investment. In vain would they essay to trace through its various changes, the disposition of any separate estate of the wife, so as to exclude any blending of it with the particular property which might be the subject of consideration.”
I am of opinion that the judgment and order appealed from should be reversed.