Goodhew v. Goodhew

Citations: 174 Cal. App. 2d 75; 344 P.2d 63; 1959 Cal. App. LEXIS 1667Docket: Civ. 23212

Court: California Court of Appeal; September 28, 1959; California; State Appellate Court

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Geneva S. Goodhew, widow of James H. Goodhew, Jr., appeals a judgment regarding heirship, where the court determined certain property was the decedent's separate property. The couple married on August 2, 1952. Prior to the marriage, James H. Goodhew, Jr. co-purchased a half interest in income property on Pico Boulevard in September 1946, with an initial cash payment and an $8,600 mortgage. At his death, $880.04 remained on the mortgage, which was subsequently paid by the estate and his brother. The property was later sold for $21,000. During their marriage, Goodhew contributed $1,572 toward the mortgage reduction.

Additionally, Goodhew had taken out a $10,000 life insurance policy in May 1946, for which he paid $30.84 monthly in premiums post-marriage. At his death, he was earning a salary of $1,220 per month as president of Goodhew Ambulance Service, Inc., co-owned with his brother. A written agreement from July 14, 1950, stipulated that the corporation would pay the decedent's estate his salary for three years upon his death.

The couple also owned income property on Hoover Street acquired before their marriage. After marrying, they deposited their income into a joint checking account used for community expenses, including mortgage payments, insurance premiums, and child support.

James H. Goodhew, Jr. died testate on August 20, 1955, leaving heirs that included his widow and children from prior marriages. Following his death, the estate's executor filed a petition to determine interests under Probate Code section 1080. Geneva claimed that (1) the salary due under the corporate agreement constituted community property to which she was entitled, (2) community property funded the insurance premiums, granting her a share of the insurance proceeds, and (3) community property contributed to the mortgage on the Pico property, entitling her to a portion of the sale proceeds.

The trial court determined that payments related to the Pico encumbrance and the premiums on a $10,000 insurance policy were derived from the decedent's separate property. The court noted that a July 14 agreement was executed before the decedent's marriage to the appellant, concerning the sale and disposition of stock in Goodhew Ambulance Service, Inc. and prior services rendered by the decedent. All rights and benefits from this agreement were ruled as the decedent's separate property. The appellant contested these findings, asserting a lack of evidentiary support and objecting to the admission of parol evidence regarding the agreement's meaning. 

The appellate court's review of factual findings focuses on the presence of substantial evidence supporting the trial court's conclusions. During the period of coverture from August 2, 1952, to August 20, 1955, the decedent's income from the Pico and Hoover Street properties amounted to $9,868.13, classified as separate property under Civil Code section 163. This income remained separate despite being deposited in a joint account, as it could be traced. The decedent also paid $1,141 in insurance premiums and approximately $1,572 on the trust deed, demonstrating sufficient separate income to cover these expenses without resorting to community property. 

The court inferred that the decedent would naturally use his income from the Pico property to service its debt, supporting the finding that the payments were made from separate income. The insurance policy, being the decedent's separate property at marriage and payable to his estate without a change of beneficiary, further indicated his intent to maintain it as separate property. The court found sufficient evidence to support its findings against the appellant's claims, although the appellant also challenged a finding that community property income was fully expended on living expenses during the marriage.

The findings support the judgment concerning the Pico property and the $10,000 insurance policy, backed by substantial evidence. Other findings can be disregarded as long as one finding is sufficient to uphold the judgment, as established in case law. The July 14th agreement involved the sale of the decedent's stock in Goodhew Ambulance Service, Inc. for $50,000, with additional provisions for the decedent's salary for three years as consideration for past and future services. Since the decedent owned the stock prior to marriage, any payments related to the stock are separate property, and the appellant cannot claim these funds unless they are for personal services rendered post-marriage. The trial court found the payments to be separate property based on the circumstances surrounding the agreement.

The court admitted extrinsic evidence to clarify the true consideration of the July 14th agreement, which is permissible under the parol evidence rule. The statement of consideration was not contractual but merely a recitation, allowing for this evidence without altering substantive rights. The evidence sufficiently supports the trial court's finding that all benefits from the agreement constituted separate property, as the decedent owned the stock prior to marriage and the contract was executed before the marriage. The appellant does not dispute the separate nature of the stock or the $50,000 due to the estate upon the decedent's death.

The trial court examined the nature of monthly payments the corporation owed to the decedent's estate following his death, considering the financial status of the Ambulance Corporation and the relationship between the decedent and his brother. The corporation's net worth was $77,500 at incorporation in December 1945 and grew to $104,000 by August 31, 1952. Although the net worth on July 14, 1950, when the agreement was made, is not specified, it is inferred to be around $100,000 based on growth trends. The $50,000 payment for stock upon the death of either brother likely reflected an accurate valuation of the stock at that time, taking into account the corporation's improving financial condition.

The sale agreement did not adequately consider the potential future growth of the business. The brothers, acknowledged as experienced businessmen, sought a satisfactory method for valuing this potential growth. The trial court reasonably inferred that the payments to the decedent's estate were part of the stock sale consideration from the July 14 agreement, and the decedent did not gain additional rights post-marriage. As the stock was considered the decedent's separate property, so was the full sale price. The decedent received a salary exceeding what an outsider would earn, attributed to the lack of dividends, suggesting that part of his salary was effectively income from his stock. This circumstance did not support the appellant's position and reinforced that the payments were properly categorized. The judgment was affirmed, with concurrence from Ashburn, J. and Herndon, J.