Campbell v. Campbell

310 P.2d of its regulations pursuance to malee law, cannot we administration of Plaintiff, CAMPBELL, Appellant and Dale was not made here say regulation that the Cross-Appellee, authority grant- purview of the within the v. Defendant, Appel- CAMPBELL, Imogene S. regulation re- legislature. The

ed Cross-Appellant. lee and ownership or simple majority of quires a No. 6030. agree- more, control, a written nothing Supreme New Mexico. Court one of equal partners that ment between 4, 1957. Jan. majority control them exercise shall May Rehearing 1957. Denied say that cannot of affairs. We direction capricious arbitrary, provision is such a

or unreasonable. be could equities of the situation

If the might us, sympathies our

considered appear that It does plaintiff. lie

well drop the fit to seen since has legislature requirement from control

ownership and transfers to base now law, and business. employment

carryover not un-

Nevertheless, 7-B Regulation effect, then the statute under

reasonable His by its terms. bound im- one, we cannot a hard

position legislation. by judicial

prove district court judgment ordered. is so It affirmed.

should and COMP- SADLER J., and C.

LUJAN, concur.

TON, JJ., participating.

McGHEE, J., not Skarda,

Lynell Clovis, G. appellant. Ripley, Fe, E. P. Santa Wesíey Quinn, Clovis, Noble, M. E. Las Vegas, appel- lee. Plaintiff and defendant were

McGHEE, married Justice. time, afterward, 1931. At that Campbell, was award- plaintiff, Dale plaintiff’s father was a successful business defendant, Imogene ed a divorce Clovis, man in New Mexico. He was to this action the Campbell. Incident S. then the sole owner of the Clovis Coca- determination of the court made lower Company Bottling Cola at the time of property ownership character marriage employed plaintiff, control of possession company salary for monthly the commu- of it was finding that certain approximately $150, employment in which parties nity years. continued for several separate property remainder Although company the Coca-Cola brought until plaintiff. The its always sale in 1951 was owned the court appeal decision from the Campbell family, the cross-ap- interests of the own- has defendant below and the years. ers varied over the history designated pealed. parties will particular of this business will be of con- they appeared below. cern when we come to examine defend- may generally It be stated ant’s cross-appeal, contentions on the plaintiff contends all of sufficient point to note at this more parties were acquired by the assets plaintiff acquired first an interest expenses living by than consumed their in company 1933 when it incorporated and his sole remaining and assets are all subsequently and he became interested in by separate acquired originally property, partnership in with his father. Camp- father, A. way gift of from G. plaintiff acquired also interests in bell, property so proceeds from or with companies by two other initiated his fa- may attrib- given, portion be no of which ther, company a wholesale beer and a efforts, plaintiff’s or labor. uted to skill creamery. creamery was the first opposition, urges undertaking the defendant business of In the father. In operation, addition to its and following substantially property in contro- of the all repeal prohibition, he of started the beer versy community property and company in or 1934. 1933 Both of these tiff’s evidence was not sufficient to estab- businesses were conducted under the fa- lish its character. ownership sole' until ther’s 1937 when the respecting There is no issue here the acquired plaintiff an interest in the beer custody sup- or the and award of divorce which, company in he exchanged port parties. creamery for an interest of two minor children the business. company, court did not make division The lower

Again, with the Coca-Cola properties, expressly found but owner- of these acquisition and history the disclose the market con- the evidence failed to in these ship plaintiff’s interests large part a and con- value of subject of detailed he the cerns must equitable points no division of the concluded defendant’s sideration under one of community property could be made with- cross-appeal. on her agreement out further evidence or be- quite profit- All of the businesses parties tween the as to valuation. major source of able and served as adjudged The trial court found and years of During plaintiff’s income. separate property following acquired exten- marriage plaintiff: briefly holdings described as follows: sive parties (1) per in An undivided cent inter- residence of 26.83 The former Campbell est in plaintiff’s Dairy in- Ice Clovis, furnishings; & Cream its Co., $170,000 partnership. a due on a in terest a balance by chattel mort- promissory note secured Y& (2) An undivided interest in Kerley con- C. in one G. gage executed Campbell Co., Building acquired in 1950. Y¿ purchase the Coca- nection with (Plaintiff actually in a interest owned purchase did in which Cola business company, Yi held a court building it occu- the lots and not include interest in in interest pies; an undivided one-half property.) Company, its assets Campbell Building plaintiff’s (3) Kerley All interest in lots; building being promissory note secured chattel mort- than the promissory notes other certain gage, given for the sale of the Coca-Cola described; an interest Kerley already note business. creamery business per cent of 26.83 promis- (4) All a Co.); Dairy Ice Cream & (Campbell sory note executed Earl O. Tucumcari, northwest ranch located Woody principal and N. A. Bowman Mexico, thereon; and cattle lots and New $3,219.29, together security, sum Tucumcari; pro- buildings Clovis given note was which refund; federal income tax ceeds equipment sale of fixtures in the Cen- Squirt stock in the of common shares tral Bar at Tucumcari. automobiles; three seven Corporation; (5) One automobile. upon the lives of insurance of policies children; trial court held all the remaining their and cash three

parties properties .property. were community bank accounts. savings clarity, will first properties In the we said property.” interests of community are cross-appeal which consider defendant’s He suggests the been trial must have court by trial urges error was committed of the presumption view the conclusive was plaintiff’s court’s interest refusal to find of the issue. note, Kerley his interest plaintiff’s ap- While point first on this Co., Campbell Dairy and his & Ice Cream peal is posing in language seemingly framed Campbell Building Co. Ye question presump- whether the general community acquired in 1950 constituted tion the presumption evi- merely an is for, that property; if it be determined he is really contending is a declara- prevail in these conten- defendant should “inconclusive,” tion is what “conclusive” or them, tions, such determination any or of one, dentiary that distinguished as upon the issues raised will have bearing class of presumptions consider- which are appeal the error of asserting words, (cid:127)ed to be rules property. of In other that finding the trial court he would have us state the law to be community. property belonged to the presumption goes “out the window.” cross-appeal, considering Before asserting ownership burden necessary however, that it seems we re- preponderance a producing of evidence history extent view to some fact, further, and, to establish that that presumption prop- general production after the such evidence attempt in this state prevailing erty presumption simply places upon the one rest the nature of its force and to set at defendant, hand, on the other parties

effect, by both argued it is argues presumption prop- a rule of key significance presumption is of erty; form is a of evidence suffi- case, seeking different each effect to support finding cient itself to of fact flow from it. in accordance therewith —that standing plaintiff points to the trial court creates a conflict alone it with evidence piece property one findings where' first separate ownership; and, finally, been another found and then presumption only can overcome by purchase during the marital “clear, strong convincing evidence.” community prop- to be and found relation question but that There is no the defend- finding then, made to reference is erty; presumption, relied on with ant there where it was declared No. 33 fact that she had evidence knowledge twelve items of no some respect to any degree active her adduced evidence hus- “That and financial presumption business not rebut band’s transactions. does tiff 340 and rec- “All prop- other

Therefore, personal the books real and aside from part erty acquired of the marriage by after either reflecting a substantial ords affairs, wife, both, community which husband or or is plaintiff’s business ” * * * property; 1, accountants firm of N.M. made -available to a § 57-^1— their tes- and S.A. 1953. employed defendant by the records, 'had she these timony regarding This preceded section by is sections 8 may be it offer, though little evidence 9, 37, and 1907, pro- ch. of which Laws place reliance does here that she noted vide, respectively: presence the circumstances “All property by of the wife owned community, returns of income tax her before marriage acquired and that returns, certain tax gift the absence of afterwards bequest, gift, devise relationship between features of descent, rents, with the issues and latter’s father and his profits separate property. thereof is her family. respect to policies with business may The wife without the consent of subject bewill matters All of these her convey separate prop- husband her portions in later further consideration erty.” 57-3-4, N.M.S.A. 1953. § opinion. this “All property owned the husband marriage, before acquired and that property all presumption bequest, afterwards by gift, devise or community prop marriage after descent, rents, with the issues community prop Spanish erty part of was profits separate prop- thereof is his ele as an recognized was erty law and erty.” 57-3-5, N.M.S.A. 1953. § system property community ment of the its stat time of prior in state this presumption While the general 37, Laws 10, ch. pronouncement utory § community property certainly not con 1898, N.M. Armijo, 9 Neher 1907. v. clusive, supra, see cases cited as well 1901, 11 Eakin, 236; Strong v. 325, P. 54 125, Estate, 1930, In re Faulkner’s 35 N.M. Lockhart, 539; v. Brown 107, P. 66 N.M. 1939, 801, Katson, 290 P. and Katson v. 10, 1086. 1903, 71 P. 12 N.M. 524, 214, the textwriters N.M. 89 P.2d 1947, 191, 1, By property Laws of ch. the treat it as than a rule of rather § amended, Prop only McKay, Community was of evidence. 1907 statute Ed., 223; Funiak, erty portion declaring (2d 1925) of the law in de change § presumption Principles Property Community property (1943) 60; Clark, Presumptions Community per- “real of the words inclusion § Property, 149, 171, pp. As amended the 25- therein. section So.Cal.L.Rev. at sonal” part: reads, pertinent 172. pre The rule as thus force of the stated is some- question thing Al more than

sumption Albright v. a mere rule of evi- noticed dence; 662, 663, becomes a rule of substan- 157 P. bright, 21 N.M. tive law'—-of Ann.Cas.1918E, 542, right. held the where it was Under the rule in husband this is the form —and uncorroborated evidence of actually form which finding it is adminis- was sufficient sustain ownership tered —the everything standing court that real trial estate possession spouse of either during at her death name of his wife the time of marriage upon rests of the a basis firm community property. was Because more 10, 37, than a presumption; mere presumption ch. it is com- also contained § separate mon unless better 1907, property right con a can Laws of that title to satisfactorily be shown. This a veyed instrument is rule to a married woman law, property not of writing thereby in her as her evidence mere- is vested ly ; apparent estate, ownership prop- separate assumed of all the husband erty may by proof proof rights char be modified burden of ” in others.’ property. Of this circumstance acter of the said: Court upon It cannot be said that appellee “Because of this statute as- mere introduction of testimony to rebut proof presumption burden of in the trial presumption sumed the theory longer court the above no considered of force 37, 1, Instead, ch. Laws statute and effect. the contestant assert 1907] [§ evidence; pre- separate only ing rule of that the a character property sumption which had only theretofore exist- has not the burden of going forward property evidence, that all found the name ed with his but sep of establishing during spouse marriage ownership by preponderance arate of either a changed, common could be prima Holloman, facie evidence. Shanafelt v. 1956, will, 147, Legislature, 752, without af- 61 N.M. 296 P.2d at and cases collected there. any'vested rights. parties fecting Both rule; seemingly concur this hence Preponderance of the evidence simply required are not to decide greater we whether weight means the of the evidence; rightly upon appeal assumed the question burden. Mc- whether the Community Kay, Prop- in his book presumption has been overcome as a matter erty, discussing presumption, depends upon of law whether there is sub- support says: stantial evidence finding 342 presumption

of the trial numerous court. cases are is a rule property, and our Bailey, which hold the substantial decision in 1928, evidence rule Weeks v. 33 N.M. 193, applies case, 29, ap in such 263 does usual P. case (a involving the issue pellate indulging presumptions delivery deed, rule of all of a where it is declared judgment. Fullen, Fullen legitimate presumption, in favor of v. like cir- 1915, 212, 233, 234, 294; evidence, 21 N.M. 153 P. cumstantial ap- is sufficient on 1933, 296, peal Trigg, 37 N.M. Trigg v. 22 P. sustain finding of the trial 119; Sands, 1944, court) ; 2d Sands v. 48 N.M. we it unnecessary think to declare 399; 458, McElyea McElyea, case, 152 P.2d v. the rule in this believing that earlier 635; 1945, 322, 49 N.M. 163 P.2d Shanafelt decisions of the Court in the cases of Holloman, supra. Loveridge 1948, Loveridge, v. v. 52 N.M. 353, 444, 446, 198 P.2d and In re Faulkner’s In California a number of decisions Estate, supra, afford a sufficient basis for presumption the rule that the state of com- present deciding the issues. munity ownership is alone sufficient a conflict in the evidence In Loveridge raise and a find- case it is said: court in ing of the trial accordance with is, course, “It difficult, ofte’n some appeal. overturned on it will not be Wilson impossible, times even to determine 1946, Wilson, Cal.App. 119, P.2d v. 172 evidence whether given 568; Brewing Malting Rahr v. Koch Co. piece estate or Co., Cal.App.2d 457, P.2d community in acquired character. If 477; Estate, 1931, 114 In re Gartland’s subsequent to marriage, it is naturally 269, 757; Cal.App. McAlvay 299 P. v. presumed to be the latter. Barnett v. Co., 1931, Cal.App. 112 Consumers’ Salt Wedgewood, 312, N.M. 601; 28 211 P. 135; Martinoni, 383, Stafford v. 297 P. Abounador, Carron v. 491, 28 N.M. 724, 221 1923, P. 919. 192 Cal. Hence, P. 772. in the bar, case at en doubt, tertaining of these cases reveals ultimate An examination the trial may court resolve the by them, all, doubt cir- hold of if not other that in most ing property the to be community in case, in the or evidence while cumstances character, if after marriage. impeach to sufficient or other- perhaps not wise discredit the testimony of separate ^{[*] [*] [*]} ”

ownership, suffice to cast did the matter the Faulkner In case it was held error in doubt. trial court to rule property was community property appears where the only, it

While California tes- logically follow holding timony positive our would of rule character in the case presumption nature, community ownership testi- which of separate its as to suspi- only by need any preponderance amount to a unimpeached mony of stood ex- evidence. there The Court cious circumstances. lay rule down

pressed reluctance its While one syllabi of the Court controversies, can- but it future govern Armijo, case of Neher supra, v. states the at case stands not be gainsaid presumption may be overcome clear and may this Court proposition least for proof conclusive contrary, to the opin- community presumption declare actually employs ion the test prepon- pre- clearly property has been overcome derance evidence. separate Evidence of separate owner- ponderating evidence ownership was examined and declared to trial court ship, despite finding a constitute proof clear and conclusive contrary effect. question

property did not belong to the then, principles of Adhering, community, but the case is not authority may that when evi cases, said be these proposition for the presumption can upon the doubt case casts dence only -by be overcome clear and conclusive ownership community issue, finding a proof. supported substantial upheld as be will Holloman, supra In Shanafelt v. counterpart, evi when the N. In evidence. [61 ownership is 147, clear and Court, 756], M. 296 P.2d dence speaking presumption evidence aside no Kilter, through Mr. said of the same Justice contrary, circumstantial or exists to contention made there under the Trimble community owner otherwise, finding case: upon appeal overturned ship should “ * * * The Trimble case was by substantial evidence. supported dealing apparently attempted with an urges that evidence in The defendant transmutation of separate ownership finding of support of joint real into estate to be held in ten- must meet substantial be deemed held, ancy. The court Sadler Justice “clear, strong convincing.” being test of dissenting, in order to effect the In upon our decision placed Reliance clear, change, strong convincing 1953, 51, Estate, 57 N.M. Trimble’s re must be adduced as to evidence early case of Neher P.2d parties. The intention court supra. Armijo, v. held that the evidence also case quantum proof not meet the of did abundantly decisions Mexico New The required. proof to overcome rule the establish Company, not here dealing Bottling purpose

“We are with a sit- Cola the incorporation being uation such as that which existed in perpetua- to insure the Estate, supra. tion Re are Trimble’s We Coca-Cola franchise in the acquisition corporation dealing original (and Campbell the the family) in the testimony Campbell’s real event of of estate where G. A. death. the funds conflicting as to with which At the time incorporation plaintiff of * * * purchased. it was employed had been the business for acquisition “Where the of years, some three during period which he involved, this court has stated has been and the defendant were married. He was presumption cases that several paid salary a approximately of $150 community property may be over- Upon month. incorporation, out of a preponderance of by a evidence. come stock, total issue of 223 shares plain- [Citing numerous cases.]” tiff received one share and the office of secretary-treasurer, his father held 221 against is ruled defendant. contention The corporate shares and president, was while Cross-Appeal The the remaining share was held Mrs. G. first contends trial defendant Campbell, A. plaintiff’s mother, who finding promissory that the court erred designated vice-president. was At Kerley pur- when he G. C. given note time the book corporation value of the business, Coca-Cola the Clovis chased $22,300, was par value of each share of trial time there remained at which being stock set at $100. $170,000, payable balance unpaid an incorporation From time until annually, prop- $12,500 sale of the business in numerous the extent plaintiff to of his erty changes were made in corporate stock in the business sold. former Changes structure. were also made over father, Camp- G. A. In years way in the the business was con- engaged business of bot- bell, was ducted, being operated sometimes under Clovis, Mexico, New at drinks soft tling partnership by contract with the cor- approached to take the time which poration and at other directly times under for that area. franchise He was corporation, depending upon which acquisition, interested particularly happened method to most advantageous it, accepted paying finally nothing financially. business continued under therefor. ownership until 1933 when it was first substantial interest

his sole name, incorporated bottling company under Clovis Coca- tiff was acquired father, partner- in products distribute Cola through- and his Coca when he in 1937 corporation territory. to the the out ship, with There can be no contracted plus question cost from it at one the but that this purchase drink transaction was partnership purchase to profit, the one per case for a cent valuable con- distributions of the re-sales and sideration parol make all and no evidence is corporation competent made vary and the to drink which or alter the written corporate time agreement appears At the as it advertised. in the record. $75,000 $4,000 from reduced to Since no stock was evidence any was submitted of represented the prior latter cost of a (which sum assets by owned partnership the acquired for the any capital franchise area or of by Coca-Cola contributions either Mexico) Tucumcari, by New trans- partners, of the it must be assumed that corporation, all of the assets ferring partnership the started from scratch the Tucumcari Clovis partners exclusive of with each of the having an franchises, partnership. to the equal share in the partnership. It is were reduced corporate indisputable stock shares (plaintiff) acquired plaintiff held 223 to which the first his interest in the partnership by one, one remainder way purchase. mother held and the The consideration were held the father. services he per- contracted to form. The evidence cannot be con- matters reflected foregoing are any in way, strued other and there is reduction and a certificate of stock absolutely no any evidence of gift.” corporation contract and the between partnership corporate in minutes argument recited plaintiff To this responds May testified 1937. father that his testified that he (plaintiff) interest; did know whether or not he had nothing not paid that de- respect agreement with his written father accountant testified fendant’s there was no partnership. agreement If such paid evidence anything for existed, it was evidence. company not his share and that there nothing among listed the checks on Upon the basis this transaction the plaintiff’s bank account to show pay- defendant, argues, quote and we from her ment; partners certainly that the did not cross-appeal: brief-in-chief start from “scratch” because according to corporate records, partnership has at the “This end of 1936 corporation $22,900 corporation capital had stock, considera- assets paid-in surplus obligation surplus; their contract earned tion of purchase, corporation corporation sell after stock reduction the n capital partnership “That the of said $7,781.40; capital of

had a total $24,810.01, shall be partner- which shall stand went assets balance of the partners credit purchase as fol- money no ship; he had lows : for the assets in these a one-half through 1937 expenditures

parties’ living Campbell $16,201.65 G. A. Credit salary, but dividends only his exceeded Campbell 7,580.47 Dale Debit bottling com- well, from the profits 16,188.79 Campbell Dona Credit part- between pany; contract that the a mere corporation was nership and $24,810.01” Total matters under- and operating agreement showing There was no of the source of did not partnership by the be done taken to pay plaintiff’s the funds used debit. transfer constitute a consideration The defendant maintains that on the basis assets. corporate of account, of this statement of the absence support argument up his Plaintiff sums profits of evidence as to the original separate property finding of of the partnership and the nature and source of explained simply cannot stating that partnership, credits the second and ordinary and performing how a man during fact that plain- 1938the in a working Coca- customary duties reported tiff all income from the Coca- labor, skill and by his plant could community income, Cola Cola activities as purchase in the years, six industry, after legally was indebted to the new in that com- a one-half partnership $7,580.47; true sense in the sum of pany’s assets. it must be assumed such paid, amount was there being no contrary; evidence to the regarding the evidence Aside and that the whole transaction is incon- of the partnership formation gift. sistent awith the defendant father his tiff (2) gift No tax return covering the the trial correctness challenges transaction was introduced evidence and following basis of the on the ruling court’s upon plaintiff’s advice of counsel the father circumstances: evidence power refused to execute a attorney partnership allowing new for the the defendant to In 1938 examine govern- (1) established, gift reports the business ment records of tax operation as to father, plaintiff, his and whether had been not, filed or composed nor partnership stipulation Article IV would he enter into a as to sister. what provided: Plaintiff’s had been filed. counsel did agree agreement gift file, reports distinguished tax as equally as the reason the sister was taken from government records, might be exam- into partnership given her one-third ; ined but it is asserted and uncontradicted says interest. He further that it is im- 'destroys that the government gift federal material that his income partner- from this reports tax years. ship after five predecessor and its reported as community income for question is not as judicial notice Defendant asks us to take to the character of the income, but the plaintiff’s acquired by if interest was character of his interest in the business-and gift, gift tax return should have been its assets. argues made. She further that since the Regarding defendant’s argument under plaintiff’s father govern- refused access to paragraph above, (2) says the ment records which would show whether fact of absence gift of a tax return cover- a return had been filed or not that ing the transaction has no evidentiary value conclusion must follow none was filed. because at the acquired time he his interest (3) Defendant also seizes the cir- in the company the structure of federal report cumstance that tax cover- gift legislation tax was such that allowable ing the sale his interest in the Coca-Cola exemptions far exceeded anything he ac- company Kerley in 1951 listed stock quired. having been at a cost of In answer to paragraph (3) above the

$17,748.28. plaintiff explains report his tax covering the sale his Kerley interests to respect to defendant’s With contentions contained the statement his stock was paragraph (1) plaintiff above ac- under the quired $17,748.28 aat cost of simply that, all, presents argument as the after he owned calculating basis for long-term his capital partnership one-half of the assets before his gain figure the par included the partner a under value sister became the new —that stock and his of his then share of paid- the arrangement; only thereafter he surplus which went from the partnership one-third of the business—in other owned corporation the some back into time relinquished before words, that he to his sister a the sale. partnership; in the one-sixth interest formerly had no connection

she had disposing of Before these contentions history remaining and that neither he nor his the of the the business company briefly father, partnership, any- received the should be traced. In or 1939 the cor- partner. poration became took over the partnership her when she a thing from assets testimony points plaintiff given was plaintiff to of his and the 13 shares out his total stock he wanted to treat children re-issue of shares, 40 father at 048 security separate property is his sole and interest its basic time

which supported by In substantial 1944 a evidence. franchises. in the' Coca-Cola formed to partnership was third new and corporate It is true that the rec a sub-bottler’s under operate business the ; but, ords do not establish gift the fact of plaintiff, being the contract, partners testimony addition to the plaintiff of the ‘In father, husband. his sister’s and gift made, and his father that a was which per plaintiff owned 34 partnership the this testimony certainly admissible and must 1948 profits. In and the' assets cent of probative force, have some there are all of more plaintiff two gave the father pointed the circumstances plaintiff. to stock, which corporate shares of the money purchase He had no a one-half pur- filed. returns were gift .tax in the partnership interest for all insure gift was this pose of up funds available to that time had more if business have control would tiff expended than been purchase in the aof interest sister’s In 1950 died. father general home and living costs. At the time in ex- relinquished was corporation reduction, of the stock the balance- of cor fran- Tucumcari Coca-Cola change for the porate assets not accounted for must have payment, cash and business and chise partnership. gone into the plaintiff’s own separate her might have she order corporation having there dissolved partnership business, last been tofore one share of stock out of a corporation back everything went and of 223 was exceedingly total limited and the business until the it remained where capital operating of the partnership must sale, plaintiff the time At sold. father, have been derived from the through his father of stock shares owned corporation. Lastly, perhaps most the father owned together mother persuasive is the fact that sister per cent he received unless to sell refused partnership was taken into the equal on an price, which sale basis with the father and the agreed. there is no evidence she made contribution capital the con of either or services consideration such Giving due interest, by per guided aside from parties, and declaration in tentions principles al community property partnership articles of second as to tinent portions capital in later account of the set forth members. So far ready noted the sister is concerned such only can conclude may we statement opinion, plaintiff’s been easily as have a court declaration of trial owner of the ruling purchase, Kerley promissory gift note as ship standing in the as interest

349- hardly is- conclude the issue and It defendant evidence. other of does devoid it authority cites to that plaintiff re- no effect. that' contended nowhere relinquished to he anything when ceived explanation plaintiff of the partner- in the interest a one-sixth his sister covering tax return sale of his interest the. likely such more it far think ship. We Kerley showing acquired his stock was property made of be would relinquishment $17,748.28 aat cost is of sufficient. cooperation with plaintiff, in to the given evidence, In view of all the we think the testified, treat desire, he father’s capital statement of account the second would be the equally, than children partnership stands no more than it acquired his in fact had plaintiff if case says plaintiff’s capital account —that by purchase. interest partnership one-half by $7,580.47, was deficient and it does not purchase establish the from him. plaintiff’s income That Indeed, already reported as com a one-half enterprise was owned in- terest before the formation of than a factor to the second more is no munity income partnership. Although plaintiff other did not in connection considered explanation Porter, offer an of the reason for v. Porter in the case. evidence deficit, 132; Kenney it established that 273, 1937 the P.2d 1948, Ariz. 195 $10,720.90 drew Cal.App.2d Coca- Kenney, v. company purpose Cola for the financing certainly not conclude does It P.2d 951. the cost of his (see residence ownership discussion of question of acquisition infra), of residence and it is distinguished from income. Kat itself, as likely most this circumstance gave rise per Katson, supra. In view of son v. to the deficit. rendered to services sonal portion corporation, a

partnerships contention the defendant belonged income, necessity, to the plaintiff acquired his interest community. through complete, a series of valid, business necessary determine whether purchase It is written contracts of and that he been should have made. return parol tax offer gift cannot now evidence that such if one had been assume acquisitions by gift is reasonable were in just It fact does not fit this produced, case. original but its been would have made case, presence substantial interest was not by- like the from the absence proof agreement under the returns, simply a circumstance written made. tax income Furthermore, return authorities if a tax should relied Even proof. proposition for this by defendant made, do so could are failure to cases been 350 separate company assets is or com- sought to and its party to a contract one

where munity property depends upon whether his party another rely thereon Kerley pre- interest in the note and its written effect. to alter sought contract Lammon, 1947, company cedent in the interest Coca-Cola See, example, Bell v. 757; Camp- separate holdings. As 113, Davis v. P.2d 51 N.M. 272, we have there is substantial evidence P.2d 430. No held bell, 1948, 52 N.M. support litigation finding to deter- the trial court’s authority is cited plaintiff’s separate separate latter property is or com- interests were whether mine by parol property, is controlled and as the one-sixth interest munity nature Company Campbell Building under such circumstances. was re- rule evidence portion in exchange ceived for a of his point on the first defend- follows It business, interest in the Coca-Cola it neces- against cross-appeal must ruled ant’s sarily follows this'interest is likewise her. separate property. tiff’s point subject of defendant’s third By point her cross-appeal second on cross-appeal is the lower court erred in on challenges defendant finding of the trial undivided one-sixth interest an holding plaintiff’s court that Camp- interest in the Campbell Building plaintiff held 1950, separate Dairy Co., bell acquired in was his & Ice Company, Clovis, Cream company of this are The assets property. Mexico, separate New is his property. building housing Clovis land acquired his interest in this business, assets not included in Coca-Cola 1, January 1942, business on in exchange Iverley. the sale to capital for his account in the Clovis Beer plaintiff’s be recalled It will dispute is Co. There no as to general in the Clovis her interest surrendered sister acquisition, only facts of as to their effect exchange for the corporation in upon the character of ownership. Also, and assets Coca-Cola franchise Tucumcari disputed plaintiff’s it is not that if interest equalize payment. In order a cash company beer was his prop- her she deeded one-third exchange erty, then the interest in the creamery busi- Company Campbell Building interest in the ness received in exchange therefor, plaintiff. It is the her father and separate property. likewise his one-sixth In order state the issue in form, brief we are now concerned. thereby with which use is made of the résumé of the history of parties appears these two businesses as it agreed It in plain- cross-appeal, one-sixth interest tiff’s answer brief whether set forth Following these paragraphs. in numbered 1939. In 1938 the father inserted, capital paragraphs we withdrew numbered fixed assets or ad- material parenthetic necessary, $15,- where vanced him of the value of to or the defendant’s additions 653.38. In showing 1939 the father withdrew interpretation of facts. fixed assets $832.40; .the value of or, totaled, as more $226.00 than his father, Camp- A. Plaintiff’s G. 1. original capital $16,219.18. advance of Dairy

bell, Campbell & established (The partnership had profits total 1908, operating it Ice Cream Co. during year period three $33,- proprietorship until Harold sole 484.08, two-thirds of which was cred- partner Murphy manager became and ’ father, ited to the who withdrew from in 1938. $24,505.50. his share was started Beer Co. 2. Clovis (During years 1940,1941, part with G. A. the latter of 1933 sister was a member of the partnership Campbell being the sole owner. plaintiff with and the father.) company operated as his sole was proprietorship. 1, January 5. On 1942, plaintiff’s capital $15,822.21 account of was ex- 1937, 1, Camp- January G. A. 3. On changed for the same amount cap- plaintiff a one-third gave bell ital account in Campbell Dairy & profits from the business. Ice Cream Co. 1937, 1, plaintiff and (On January 6. Plaintiff left all of his income in partnership, into a entered his father the Campbell Dairy & Ice Co., Cream one-third share of to have a plaintiff so profits that his were credited to and partnership When the was profits. capital increased account until grew it father advanced to it started to be about of the total capital. 57% in cash or fixed $16,219.18, either Plaintiff then sold to sister, his Dona assets.) Campbell Dickinson, approximately plaintiff of his through 1941 From 1937 interest so they 4. 23% had the capital same $1,310.00 profits, account in only withdrew the Dairy. profits unwithdrawn since his

and plaintiff a. Dona’s note to paid capital account credited were by forgiveness off of two payments capital $15,822.21in the account. he had while her husband was in military plaintiff of the partnership and (The service, and she money borrowed pay operated during years, off the father balance. positive around I am not I plaintiff time of trial At b. Camp- believe it was could have it been owned his sister 26.83% Co., G. 1938. A. Dairy & Ice Cream bell 32%, Harold owns

Campbell “Q. pay you Did he anything for Murphy owns 13.94%. it? A. Not one cent. the defendant

The contention “Q. Who ran the Clovis Beer Co.? acquired his in- When clear: did, IA. I ran the Clovis Beer Co. he and defend- company, beer terest “Q. Did you any manager? therefore, wife, husband ant were times, yes. A. At community owner- presumption of general “Q. Who you did have? A. Bill records of applies. The books ship Crawford, on, and then later just articles) no formal (there being partnership about the time legalized sales $16,219.18 began business show here, closed B. P. Bozeman. part- sum loaned capital, which and withdrawn from nership by the father years during the him partnership “Q. Did (plaintiff) Dale take capital No contributions and 1939. part active management made have been either shown are Clovis No, Beer sir, Co.? just A. give The father did

partner. assistant, you an know an assistant to go except opportunity into anything me. partnership began from business. “Q. He you did whatever told him? capital “scratch”, borrowed operating A. He did him, whatever I told I if no There is evidence father. wanted the swept, said, floor sweep I opportunity the mere gift and tangible aof floor son.” profits is not participate dispute Plaintiff does not that he was a subject be the and cannot sense legal partner says business. He in his delivery. incapable of being gift, brief: participation extent cross-appellee “Of course could or- subject some is the con- partnership beer, beer, he der sell could he could testified: The father

troversy. give away interest, his or he could do you did much How “Q. else, anything because he was part- a A. One-third. him? give requires ner in the business. It no when you about know citation of authority Do for proposi- “Q. partner A. Somewhere tion to him? in a given business can ques- It is not a that I partnership. there, bind the was in Mr. but later was the extent of tion here of Bozeman manager.” what was there some as cross-appellee’s authority, rather Plaintiff also testimony relies question do is what he in fact did company father as to the value beer industry.” labor, by way skill or prior had partner- to the creation of tes- points Plaintiff to the following then ship : participation:

timony given by him as to Now, actually what value did “Q. “Q. capital in you place any Did that have at the (plaintiff) time Dale No, sir. Co.? A. Beer picture came into the at the Clovis “Q. get your interest you How did Co. Beer ? A. Oh it had considerable just It was A. Beer Co.? value. given to me. “Q. How much?. A. Five six My

“Q. you? it to A. gave Who running there. father. “Q. How much value did have? perform any la- “Q. you ever Did Oh, A. know, I would hardly several Beer Co.? bors or services for thousand dollars. No, A. sir. “Q. you Can estimate? You say he A. I was “Q. you? Why didn’t came into'it 1937. A. Yes. plant. working over in the “Q. And it had been operating you “Q. the Clovis care of took Who say or 1934? Oh, A. I would My A. father Beer business? Co. forty-five say forty or dollars, thousand and Mr. Crawford. like something that. A. “Q. Crawford? Mr. Who was “Q. Forty or forty-five thousand working had been boy That was Yes, A. dollars? sir. us some time. “Q. What was his— A. He was “Q. what consist, Of did that Mr. say. manager I or foreman would Campbell? Well, A. it consisted of a

stock of beer the trucks and the storage “Q. for the cold Did he work Clovis warehouse and coolers and its A. the beer throughout everything Beer existence? Co. else it it, with, handle No, practically takes beer all of license worked and anything all insurance else.” for it the time course he worked regulations of the taxation, 1937 ness and that under respect from With to Liquor Division reported Control he plaintiff the in- could through 1941 the in engaged to while the wholesale beer partnership belonging as do so come from in- for this reason was nec- acquired his business —that it community. he After business, essary company partnership likewise the beer creamery he terest in the reported profits argues that source The his from be dissolved. defendant only plaintiff return gift tax in community income. if interest had No in acquisition gift had been a covering the beer business of one- placed profits, in company beer was evidence. it would not have third necessary relinquish for him been to such calls our to attention defendant liq- he went interest before into retail ac- an evidence written in in letter says business. She also if uor inwas The letter countant for the father. simply portion given a beer response inquiry the Internal an company profits, then the formation of a the interest Revenue Service whether partnership was a and useless vain act. creamery business sister last matter to be noted concerns stated: therein community property. It was the interest sister beer com- your October letter of reply “In pany. The gave father testified he her fur- gone I have into matter interest she had and the tes- his son Campbell and ther with Mr. pay tified she did not anything for it. Campbell, 'daughter, Dona Dale She retained this interest until under local Dickinson, members of the who are option City of Clovis made sales of partnership. above illegal. testimony beer The father’s was: Campbell children “Although “Q. happened What to her inter- interest, obtain the were entitled to company est the beer when the obtain, by gift from they did which illegal? beer just became ItA. father, they nevertheless elected their played got out she the dollars. purchase. Thus was acquire byit “Q. you get give Did Dale to half Campbell, chil- rearing his father of his interest (The to Dona? in- business and the value of dren to learn terest referred work, inter- his ambi- achieved value creamery business.) est A. placing them business tion Yes, sir, he did. feet.” their own “Q. plaintiff testified that pay Did Dona ever him any- liquor thing engage Yes, in a retail busi- for it? A. sir. decided “Q. A. pay “Q. How did she him? Capital Capital account? A. She bor- went down the Bank and to account, yes, and how come is that money paid rowed him. it go to point. that to “Q. credit any her give Did Dale “Q. you What did do about serv- while her husband was in the Campbell? Mr. you give A. I said Yes, ice? A. sir. half your interest in that to sister or sell it to get her or rid of it.

“Q. you Do know cred- what that it amounted to? A. It like seems “Q. Why you did want Dona to was around three thousand dollars have it? A. Because I wanted her year. equal him, to be with always I tried my alike,

to treat kids I like to treat alike, each of them and she didn’t “Q. you Do remember trans- any and he had too much.” whereby action got Dona inter- an Campbell Dairy est in and Ice plaintiff’s testimony about oc- Company? Yes, Cream A. sir. substantially currence is His same. sister gave $14,916.90 him a note for “Q. you Would tell the Court purchase her interest in the cream- Well, good about that? A. I have a ery. He her way gift credited with many hap- look books to over and I $6,000 payment and received her up pened checking be things to the balance of the note. where he (plaintiff) and I saw had percent fifty-seven of the stock in the Considering matters, all of these creamery— say sep we are finding unable you Do mean “Q. interest? A. ownership arate character of plaintiff’s Interest. Campbell Dairy interest & Ice supported by

Cream Co. is substantial evi dence. Anyway, I found out he “A. had Only may one circumstance really interest which much was more be support said, pointed say and I had wait a char-

than I do, minute, you of his interest sup- company, that won’t acter beer are not question the crucial here. own that much of I That that so is posed partnership up before the on the books and I fact between found checked his drawing instead of and his father was tiff created the out beer put company he into been in had existence for dividends interest. some (cid:127)356 plaintiff’s participation estimated evidence of

time and had assets which were $45,000. respects the business $40,000 some contra- at But these assets dictory, said, only rec- think it can we be traced into books cannot they, interpretation or under most partnership, unless favorable ords of plaintiff, them, part partner was a all the portion constituted some powers partner. of a He as his fa- served capital which the father loaned the fixed oper- ther’s assistant and the business partnership. nothing There to the through manager. ated His association partnership show that clearly it was more than nominal. far as the record in them. So Finally, the manner in which partnership used as- shows, these if the acquired sister her interest in these busi- it logically seem that sets, it would nesses persuasive is not of a donor-donee property the the of did, they remained relationship family" in the as in the it was part- simply suffered the he which father business, case of the where, as nership use. to seen, we relinquished have the a fact, plaintiff does not contend In the, by substantial to her of way gift. partnership ac- did the, or he either .that It is true that when the sister was taken His such assets. any interest in quire into company the beer partnership she made a gave him father his is that contention payment no or interest, contribution her the profits from interest, the in .one-third interest was not diminished upon the pass not company. We do beer any to extent entry his sister’s into the be interest could such question whether partnership. Furthermore, the when father the circumstances under subject gift, of .the desired that he reduce his interest possible described, conceding it creamery in sister, favor of his it ar- interest, this of gift a to effect ranged that an interest be sold to her. part- a Instead happened here. not what no with began It nership was formed. point This is ruled in favor of the one from of a loan aside assets defendant. paid back thereafter loan partners —a with agree We must partnership. proceeding Before to the conten appeal, if this transaction could tions made we defendant notice right has gift to share that he renewed called a motion to dismiss cross-appeal gift right upon also ground it profits, was not might days thirty venture losses the within of the filing in filed share transcript and no extension time sustained. was re- v. Laughlin,1944, has here- The motion N.M. P.2d quested of the Court. a. 1010. of our The character of 15(8) ownership prop If Rule been tofore denied. 8, erty, (15) separate whether community, or (§ 21-2-1 Procedure is de Rules of Civil cross-appeals, termined at time of acquisition; its N.M.S.A., 1953) applies to if acquired separate property, Court as mandatory it retains rule is cross-appeal such character even though community power consider the has the may employed funds later be making N.M. (16)4, im (§ 21-2-1 16(4) Rule under provements discharging an S.A., indebtedness 1953). Appeal McElyea McElyea; thereon. Laughlin v. Laughlin; Holloman; v. Shanafelt all v. points on his seventeen Plaintiff makes supra. While the credit husband be prop- eight are devoted appeal. The first longs presumptively community, to the still law; re- community ositions may separate contract debt based upon the attacks maining nine constitute separate credit and assets community owner- findings of court’s trial that manner are his property. fact, properties ship particular as to —in McElyea McElyea, supr v. belong to properties all held Remaining legal proposi- controverted community. tions are as follows: concerning the force of point, first 1. presumption There is a that commu- community own- presumption general nity income is used for ex- forepart considered ership has been penses. If more income is used for com- too, discussed, Already opinion. munity expenses than can be attributed to cross-appeal, is connection labor, the value of industry skill and concerning effect of point, seventh tiffs husband, property acquired by then him proof of gift tax returns on income and separate with a balance of income is his ownership. other rules of Certain method property. contended for community property law of 2. employs a Where the husband man- by de- plaintiff are not controverted by the operate ager separate properties, his their except they as do or do not have fendant proceeds separate entire are his property. These are case. rules of application to this community 3. The value to of the may briefly. standing be stated long labor, husband’s skill industry should by sepa value of this case be measured not more increase in than his by causes income produced company, natural or from the Coca-Cola rate or capital by like essentially of the that received others for as a characteristic services in company. Laughlin separate property. that investment is

358 computes from 1936 to 1954 tiff may con 1 3 be

Propositions $196,319.45 for parties spent some is correct at least together. sidered life living expenses, figure includes it is which that when general contention in his ac- premiums. Accepting the equal or insurance community funds established present pur- curacy computation, for prop of his community expenditures, of fall short community husband, poses, in having it is thus to be seen by erty acquired substantially of earnings be in excess disposal, should his dependent funds at community inference, expenses. to be his held, by legitimate holding our separate property. This Wilson, 1946, The case of Wilson 76 v. Katson, In California supra. v. Katson 119, 568, Cal.App.2d with a 172 P.2d dealt validity in of the several cases declare the It was there held that similar contention. pre really ference, rested on which community earnings exceeded com- showing arrangement of an sumption that in absence munity expenses, though even the excess community contrary, agreement community slight, supports finding of community chargeable with earnings are property. 1953, Thomasset, expenses. Thomasset v. case, $75,025.01, present The excess illus Cal.App.2d 264 P.2d equals approximately one-fifth of the cost point. trative plaintiff’s acquisitions, according to his upon this plaintiff’s reliance calculations, $385,155.50. the sum Cer- “one to establish in in an endeavor principle tainly an excess of this amount demon- were, all his hold swoop,” fell inapplicability principle strates the property fails, how his are ings declared. reasons.

ever, two foregoing While the is sufficient to con- community point, First, computation of clude the because some of the his matter presented take into account the in- here defendant is earnings does also re- lied affording support interests the beer her as from either come the trial court’s creamery According to determination of businesses. communi- ty records, ownership generally, we received as income notice the mat- tax income $186,554.46. assign ter here and it as a a total of second Such reason rejection period for the during present from concerns these con- from his cumulative total This is that added sal- tention. when manner in sum which business, $84,790, figures expenses the Coca-Cola ary and in- $271,344.46, which a total should were arrived come at makes and his community earnings. accountant, Mason, Plain- be credited Mr. was not so reliable questioned acceptance to be regarding as trial court’s the significance demand the placed upon analysis plaintiff’s them. Mason’s account, bank he testified: cancelled This accountant examined ac- plaintiff’s bank checks drawn on the “Well, I agree think Mr. Mason will creamery and count, by the checks issued me that of in- determination which the Coca-Cola businesses expenditures come reference family expenses, issued for said were only to bank can statements and checks n certainly not be slips. deposit plaintiff’s bank accurate. considered Many might funds be received that he com- accountant testified Plaintiff’s go through Many never the bank. days question be- piled a few figures expenditures might be do made which devel- trial; he that the schedules fore the go through not the bank account. We oped records made available from the always, think, profession, have I audit re- an intended to be him were not always we have considered determina- days he ex- port; during these few that by analysis tion of income of bank not 7,000 checks; he did that amined about statements as the last resort in order to only slips; some deposit examine all summary make the best can we under where deposit slips indicated the circumstances.” not he could money from and that came represented give percentage of the total Heggem further he Mr. testified called at some slips; he deposit classified during progress Mr. Mason’s office upon oral living expenses part items as examination; deposit the latter’s that all furnished him the information slips not there and that some of he memory; on basis of not there did indicate the source of those checks percentage give could funds; all of the that not checks identified expenses living as expenditure. classified which were nature When asked place upon he would significance expense as what identified the checks where the compiled by in a Mr. “I am not set schedules He also testified: Mason such. prepared them, any money placed in if had (Heggem) he position state tes- any spe- specifically : used tified the bank purpose.”

cific be constrained to tell him “I would my summary, pre- if accountant, (the court) that Heg- Mr. The defendant’s absolutely pared, wasn’t based on fact. purpose for the of this ac- employed gem, part large neces- it would when That present courtroom tion, was assumption.” based sarily been testimony. gave When Mason Mr. and it could not been intended which the have In view of the matters develop- employ manager that its plaintiff’s must rely in owner accountant had to necessarily community. to avoid its loss the to ing must computation, guess- have been considerable the result of the say error work. it was We cannot appellant desired, “If the he had effect to the finding

trial court to refuse a employed manager, could have community was only that the asset proceeds which case the entire from rule salary to also Coca-Cola operation of the cafe would have by com- community exhausted income ” * * * separate property. been his munity expenditures. take it quarrel We that defendant has no that is above contention noted second with the language case, of the Katson op- managers to employed when the application she contends its is limited in entire separate properties, their erate his respects: first, two only ap that the rule by owned proceeds separately were also plies property is where it is that the found us to evi- plaintiff directs him. Here the separate property; and, second, when that by him employed managers dence that were the husband rev active use of the makes had in which operate every business enues during derived from all cov sources company. any except Coca-Cola erture, sep the profits are property arate proportion the amounts subject dis think it is not We husband’s, attributable ef personal to the property as owning if a husband pute that capital respectively. forts and to investment employs others estate separate his sole and say She would us value of the also have expend himself does manage it and “rents, separate issues profits” from it, pro industry upon labor, skill or propert}' should be the rental measured be held to must be property ceeds of the property, relying-- value of de on the 57-3-4, 57-3-5, separate property. §§ supra Laughlin Laughlin, cision in v. [49 N.M.S.A., 57-3-3, 1953. supra, and set out N.M. P.2d 155 1014]. supra Katson, N.M. Katson v. [43 In 526], said: we P.2d rule, course, of assumes separate Also, property. existence of when contemplated the statute “It was separate property participates owner of rents, issues provided which operation may in its to an that he be separate extent estates from the profits separate responsible portion prop- said to for a of should be be spouses ** * it, arising proceeds separate proceeds from the shall erty owner; separate apportioned then and com- the direction should We However, now munity Laughlin- ques- direct our attention to the property. tion up case does a rule-of-thumb not set correctness of the trial court’s participation shown owner determination once such specific prop- remaining only its erties entitled held community ownership. estate is apportion- reasonable rental value 1. The family original residence. The to be Instead, ment. of division the method cost of the construction of the residence all under depends upon used is best what (during period July, through proof. only It the actual value when 1937), including lot, $17,398.55. at arrived the owner’s efforts cannot be To acquire it the plaintiff a life in- cashed arbitrary may that resort to more be had surance policy acquired marriage before proof value, the value proof such as for which $1,234.73. he received He drew others, prevailing like rental services $10,720.90 from the company, upon values or investments. interest rates and he borrowed $7,000 from the Clovis Katson, supra. Katson v. National on Bank three promissory notes- executed in 1937. The notes were later significance The matter is of but minor paid, plaintiff but did not recall what funds case, however, in our this view of deter- were used for purpose. this plaintiff’s mination already made that in- Through 1937, creamery plaintiff’s terest business was not salary total from separate property, $20,765. Coca-Cola his and our determina- was According to his chart of totals, tion hereafter that none of the remainder cumulative living his expenses through plaintiff’s proved business period interests were that traceable his owned, checks separately to with exception $9,404.57. to amounted plaintiff company, did of the Coca-Cola where the not have his own bank account labors, he until expended says tiff his but he admits and his his accountant ex- Campbell Building Company, amined the Coca-Cola books and checks to separate to be his determine prop- money declared hereafter how much was used for erty. problem apportion- living expenses. There is no his While figure this is not respect interest, entirely doubt, ment with to the latter free from it seems that over seven-year period its consists of covered, sole income rentals collected the family expenses they entirely living belong father and to were in all probability much separate property fact, as his the more than that In plaintiff sum. if the com- expenses munity See only $3,681 extent of his one-half interest therein. had been Bar, infra, year, only not also discussion Central Nos. salary, Coca-Cola well, 4 and 6. dividends would have been con- plaintiff testified a and air furnace not until was sumed. It company conditioner placed beer were the house acquired art interest his 1947 and any of enlarged draw residence not partnership, but he did analysis think We 1952. ac- His of bank that business. profits out community count disbursements credited to “Residence” established plaintiff has $11,273.70. after 1937 acquire this total is no evi- which There funds had no dence to further identify expendi- these residence. tures. policy insurance life question, the Beyond from money drawn

proceeds and While the would sepa- plaintiff’s company were right have a to be reimbursed for com into gone must they rate munity funds expended in improving the purchase. separate property, proof point on the is not sufficient liability. to establish any bank convincing is also The evidence Laughlin v. Laughlin, supra. credit personal obtained loan was father, who plaintiff or that We note has assigned as notes, be- co-signer probably was error the refusal of the trial court rule salaries yearly Coca-Cola cause furnishings in the residence were his re- $2,375 $6,000 and for 1936 separate property. He has attempted sup- sufficient hardly seem spectively, trace what items originally acquired, $7,000. loan unsecured port an $1,729.16 although asserts of his reported income time purchase first went funds into the of furniture only company partnership, the beer in 1937. during existing community asset

other accepted Even if we his conten inwas 1938. period, expended separate tion he had his funds to extent, this there would way seg be no what to as to evidence being no There regate purchased, in the articles $7,000 for his repay the used to funds $8,257.39 chart indicates a total of dis was ex is it was presumption debtedness, the pended during for marriage. furniture the funds, at where separate least from charged proof There is no as to what items were exist, Laughlin to funds are shown separate purchased. increasingly As funds were in this where supra; as case Laughlin, v. community after and available to the dividends from Coca-Cola proceeds the only said furniture cannot the could $57,710.66,according to to amounted profits separate The purchased monies. been with summary of tax returns. the ownership suf- 4. The separate Ribbon, is not proof Palace Blue Lounge and Central ficient. Bars. The Blue Ribbon Bar in Clovis was ac- the trial court that finding of The quired by plaintiff January 1, on 1942. belonged residence furnishings All we know about acquisition of this finding community upheld, but its is property is that on said date Blue Rib- community property residence

that the bon Bar was indebted to the Clovis Beer supported by not evidence. is substantial

Company. plaintiff took over this Properties 7th Street Hull & 2. business for the beer company simulta- plain Station. The in Service Clovis neously with the exchange of his interest in prop interest this bought a tiff one-half company beer for equivalent an Rely $6,855.26. at a cost erty creamery business. All the lower upon and the his contention ing tiff argues acquisition is that was an his interest finding that court’s outgrowth of the one-third interest he held separate prop creamery was his business in the beer company, which the trial court property must have erty, he asserts this separate found was property, finding we $7,777.36 profits paid him from come have determined is supported by sub- have held the creamery. we Since by the stantial proof evidence. The is insufficient support finding insufficient to evidence separate establish ownership of this separately creamery interest was property; the trial finding court’s of com- owned, evidence to establish there is no munity ownership will not be overturned. present prop character The Central Bar in Tucumcari was ac- ruling is affirmed. court’s and the trial erty, quired by plaintiff in 1944 at a cost of $11,347. drew Building a check on the Rock Manion or

3. The Clovis Company Beer amount, for property was This in Tucumcari. says which he he borrowed from $3,500. his special master’s sale aat argument father. In his point, under argument this his plaintiff relies Here us directs testimony expenses at that time that the community living purchase price paid community income, back but in five exceeded had profits months bar, from from in creamery is not taken this we income an note indebtedness for proof other such sum no is in- consideration cluded in his exhibit purchase calculating funds amounts source loans, due his father against owner various finding of offered. which lump-sum are credited various pay- affirmed. ship 364.' fall 304.82. check for payments The father’s to Bozeman plaintiff, which by

merits $6,500 $62,- by was made an exhibit and bears indebtedness of calculated short “i/¿ notation: E This intrest 220 Main”. 682. operated by bar was also Bozeman had been bar trial this At the time of profit $35,248.28. returned plaintiff to of for a note plaintiff received sold and the is operated only property. It now as rental $3,219.29. price, purchase the balance of the to belonged the note Here testified half He we notice another circumstance be- of transactions a result his mother as some confusion. The trial found that court (a B. P. Bozeman mother and his tween community plaintiff’s was indebted to operated plaintiff who cousin father $44,084.97. in the sum of is This plain- court held Bar). trial The Central the total of being amounts listed as owed separate funds with acquired bar this tiff him by plaintiff’s to answer to defendant’s sepa- was his in the note his interest interrogatories, answers, plaintiff which chal- determination rate —a says, prepared prior to his account- cross-appeal. on by lenged defendant ant’s examination of the records. Included here, because the detailed matter obligations these is this item: profits from $14,000 of the says used tiff he ad- for repay his father to business this “3. to Note Campbell G. A. dated by $26,000 latter made vancements 12/10/49, demand, prin, on sum 6% Tejón purchase of the plaintiff’s $6,500.” court property the trial Ranch, which Grant In the accountant’s tabulation of debts community. Under belonged to held owed plaintiff, find, father we funds contends the plaintiff point, a further under the heading deposited “Loans Bar traced the Central profits from personal account”: separate funds. his are ranch into purchase Boze- “12/8/49 —Loan B. P. Tu- building in Lounge and Palace Building man of Tucumcari % Campbell Check on G. A. acquired in 1949 $6,500.” cumcari B. Bozeman. No other item of appears P. the same it from sum purchase this either confused calculation of somewhat We indebtedness. evidence assumption had think the apparently the is warranted that the acquisition, interest, charged extent has property to the been in this re- an payment be- given by plaintiff either note which $2,804.82, $6,500 money advanced his father he borrowed for the after fore out, plaintiff purchase of the for the Palace Lounge Bozeman buy Build- father $9,- ing in Tucumcari. property was cost of total says Then, “Q. you credit it on don’t such contends While particular indebtedness, you? A. do obligation indebtedness was- No, sir.” cannot community, we not that of the and father testi say proved. such fact testified:

fied: * * *- “Q. pay you How do Exhibit “Q. you Plaintiff’s I hand your you borrow Father back when 51, P. Boze- being check to B. No. a large money get or these sums these dollars hundred sixty-five man for money large What sums from him ? you 3, 1950, ask January dated procedure you pay- ? Do a back check a ? That is is for A. what that specific you or if him debt owe seven- interest a half gave I Bozeman for ty-five you pay lump thousand him a Main Dale has building that pay just lump sum, sum? A. I him a Street. like, instance, for I get will a payment ? located building “Q. is that Where sales, maybe on note or on these or I It is in Tucumcari. A. cattle, I will sell .some have made sales, sales, pretty.heavy cattle Exhibit several “Q. you Plaintiff’s I hand figure just up how Yes, I would I much A. sir. No. 60? spare and write him a could check for Camp- “Q. Being check to Dale it. dollars twenty-two thousand bell does 1951. What November dated time, “Q. Dale, you Most of the do Campbell? Mr. represent, check execute a note for these indebtednesses buy , cattle him I loaned it to A. procedure--between you or what is -the with. your No, Father? A.- we. have pretty been lax on that. Ordinarily.,, time,

“Q. you, from'time Have it,., got has a check and he he writes Campbell loan Dale occasion had that, something don’t, down or like we day almost. Oh, every money? A. < always execute notes.” . ... pay you back “Q. Does he Yes, A. sir. ? to time procedure by time Under the followed the father son, think it cannot be you we pay back Mr. concluded he “Q. How does any understanding them, there was between hap- whatever he Campbell? A. Just otherwise, oh, or' .the tacit .indebtedness of, gets, if he hold- get a pened to separates finding was to or it to me give would he thousand ten this court that- ‘property.,was trial owned get a hold of didn’t- if he five n (cid:127) , community property- . - as- : pay. didn’t is^affirmedi Company. apparent- In the sums on which the Campbell Building trial court 5. The acquired ly in- finding a one-third based its of amounts owed 1940 the being company, assets its terest father. occupied by the Coca- building and lots testimony The father’s as to the trans- company. first Cola The lots were was: action $2,000 plaintiff’s mother “Q. Now, throughout pro- these After father. given her ceedings we have been referring to erected, been building had

the Coca-Cola Campbell Company. Building Of plaintiff and a time when and at Campbell what is the Building Com- a one-third each held sister pany of, consisted Campbell? Mr. A. a con- business, they into entered Well, it consists of they whereby parents with their tract Building and the lot it is on. monthly pay- $16,376.85, in pay agreed to one-third “Q. undivided $200, an That is all ments that there is in it? executing property, each Yes, interest A. sir. (We sum. for such promissory notes their “Q. How did Dale and get Dona an plaintiff the already noted an interest in building ? A. his sis- interest one-sixth additional Well, you got there, a note haven’t portion property as ter you, that they paid it, shows how cross-ap- concerning the opinion of this they it, how got I gave it to them in the peal.) long sense the of word. finding support the defendant, in “Q. you What you do gave mean interest

plaintiff’s one-third to them ? They A. pay never did fact the point the some property, makes anything for it. parents was not to executed note he “Q. you What do they mean never urges trial below and there at produced did pay anything Well, for it? A. note was proof the ever delivered to is no they paid me on the rentals is all. payments credited thereon. with him upon “Q. passing the law generally What you Without the reason made gift manner which a a contract of such with them in place, to as first effected, Campbell? may be it must Mr. Well, be said A. just to let parties get shows con- them into business, the whole evidence they fully discharged. to note had one-third of operation, sidered I Furthermore, thought might no indebtedness for such sum I as well let them have recognized among is to he a third of any balance the building. or “Q. You, turn, on the you credits “Q. pay Did make were to a Yes, sir. they A. certain gave you? money amount of in return for note year I interest, each your me a They gave according note writ- No, ten note. A. according credited the contract? mind, what we had I wasn’t. much? A. “Q. gift how With dollars each. thousand Three “Q. you What had mind? A. We knew all the time that that is the the rent? you do “Q. What did with way the note would be retired. that, part of it to their I credited A. money. kept I note and “Q. But, you went to the trouble writing aout written contract? A. money? kept A.

“Q. You right. That’s right.” That’s “Q. Which legal created a obliga- as elucidate, note referred To your part tion on ? A. Yes. exe- apparently note present being was, Also, building by the sister. cuted “Q. Knowing you full well busi- course, occupied the Coca-Cola weren’t going pay ever it? A. operating through the which, either ness, right. That’s paid rent corporation partnership Well, “Q. Now, right. fact, all slid- Company on a Building Campbell you did receive a third the income sales. gross dependent basis ing-scale your from that share? father retained rentals These No, just A. it was credited to the sister and his credited who note. notes. their payments proportionate with them each credited addition, he In “Q. year. And also $3,000 the three thousand gift

way of per year Yes, gift? dollars A. sir.” testified: you en- you recall Well “Q. plaintiff The contends the indebt buy an interest contract into a tered created on the edness face of the contract Company? Building Campbell n separate was his indebtedness. We think Yes, sir. A. evidence is clear that it the was. Both the you get an inter- “Q. And gift his father testified a was Yes, ? rents sir. A. est very beginning, except from the meant with plaintiff’s understanding proportionate of that contract? “Q. By virtue the n Yes, rentals would have stated that several share of be retained by I A. father and credited on the note. The times. equalize holding court’s the one-third interest was gift was father’s purpose of the ownership community property. ownership property with is no company. There Coca-Cola of the The has established fact of contradiction and in evidence ownership pro- of this interest and its all gen- with the completely consistent gift is ceeds. business disposition Coca-Cola of the eral Note, 6. The Mize Mineral Reservation re In in the case of by father. As Mining (Tejon Lease Grant and Van only Estate, supra, we think Faulkner’s Ranches). Huss case testimony in positive character ignored. cannot be plaintiff purchased Grant, Tejón Taylor also known as Ranch, the Don C. upon the again relies The defendant County, Mexico, Sandoval New ad- parol rule, upon candid evidence 26,’ $38,400. March 1945 for source plaintiff and his father missions of the $11,598.61 of funds drawn was: from the they had respect to other transactions Campbell Dairy Co.; $26,000 & Cream Ice ab- liability, upon the sought to avoid tax father; $2,000 borrowed drawn in cover return to gift sence of a tax salary from the company; some finally upon account- transaction, $2,978.32 portion of cash on hand. These Service Revenue ant’s letter to the Internal sums exceed the cost of property, acquired her sister had to the effect the purchase payment indicate where the pur- by creamery business interest derived. by gift. rather than chase inapplicability parol evidence of the In view of the char no above. rule has been declared There acter of the funds drawn from the cream testimony argument transaction ery business, testimony and the noted in avoidance, less result a tax much did plaintiff’s acquisition connection with the letter, while The accountant’s evasion. tax Lounge Palace Tucumcari rele manner in which persuasive as to the procedure plain vant to the followed creamery; interest tiff and his father as to loans made tiff proof hardly said constitute can repaid latter, to the the determination of entirely plaintiff’s ownership of

manner the trial court this ranch was com only the property. This leaves different munity property unquestionably correct. tax return gift that a circumstance which, standing According alone and con- plaintiff’s to the produced, evi noted, $5,000 evidence we dence repaid the direct father’s loan was tradicted by money to bolster the trial drawn from sufficient not deem do 1946, February, (plaintiff count creamery business and his then father-in-law $13,000. paid his father composed at which time partnership the Campbell- of to estab- is sufficient think the evidence We McDonald operated which Tejón Grant $6,000 must remaining lish that Ranch), for a $40,750. total of A mortgage oper- plaintiff’s profits from from come was executed on the ranch and a note for Bar, which ation of the Central $22,000 went to the seller. sepa- plaintiff’s was trial court found not has the defendant property. As rate We think it is established that cross-appeal, her finding on this challenged $4,500 used pay the bank indebtedness of proof that the nowas $7,500 and as there was by plaintiff obtained drawing of conduct any part real had property in the Coca-Cola respon- said to be could be which business business. His testified, accountant so portion any proceeds, or for its sible such appears statement on exhib with be credited them, plaintiff should it of the report. accountant’s defend The used to separate funds $6,000 sum of ant does directly not contradict this asser community indebtedness. discharge a tion, but merely upon testimony relies already noted as to the manner in which trial incidentally, note, We the accountant had to do his work and the community indebted- finding of the court’s statement he made that he in a was not noted, father, already was ness to position say any specific money such plaintiff’s statement upon the based placed in the spe bank account went interrogatories response to written debts place. cific But testify he does that in view appears there: item This the defendant. money plaintiff hand, had on 5/1/45, Campbell, dated A. to G. “Note drawings on the company must $5,- $26,000, no prin. sum purpose. have been proof for that the source proof of is no There 000.00”. absolute, course, but that is not re $26,000 loan repay this used funds quired. Plaintiff should be credited with $13,000 in payment of the except for the payment of such sum. According to 1946. plaintiff’s accountant balance Ranch, adjoining the Huss The Van paid Campbell-McDonald note was Ranch, purchased by the was Tejón Grant funds, Ranch which under trial court’s $45,000. The May plaintiff on affirmed, finding, here prop $7,500 money was: borrowed of this source erty. Bank on National Clovis from given to mortgage the seller of this note; sums taken and two personal tiff’s $22,000 fully paid ranch Novem- Ranch ac- Campbell-McDonald $37,313.79 plaintiff de- ance remained due ber, 1951, at which time mineral purchase price. sale of note for from the $65,250 proceeds posited rights accountant reserved His the ranches were interest. his Coca-Cola trial finding are now leased. The testified: community court that these assets are schedule this you from “Q. tell Can property allow- affirmed, subject to the are that “* * * tion simply it stated: (e) County Quay The Cattle on the 9. Squirt stock in 1947 for $300.” $22,000 from Plaintiff Ranch. borrowed Reference is then transcript made to three cattle. purchase of the his father for the pages, which only reflect that plaintiff worth cattle The contention is the drew on his checking pur- account for the advancement of the father’s amount chase of year the stock in the mentioned. was the father nothing to indicate there is We directed proof are to any no sort community credit. on relying support of the assertion in the brief. record, in According to the complains that two sav Plaintiff includ outstanding and is is still debtedness ings accounts established in 1954 and 1955 court found trial sum the ed purchased two automobiles in 1954 have We father. owed money came either received on the relied he testified the. father already noted Coca-Cola sale or from the sale of the “just what repay him with to his son upon County. ranches in Sandoval The com of”; a hold happened get to ever munity having assets expended, ac running under were made payments of evidence kind fails to establish separate plaintiff drawing arrangement, count ownership. cannot amount to This sources. all $10,000 separate argues incurred ob Plaintiff plaintiff has proof tax refund his 1954 credit. The credit on upon his income tax is not ligation com- costs, support remains attorneys’ fees “oN refund because the munity property capital to be considered. only return viously relate to can on company on By plaintiff order of the lower court the pertaining note, thing the same or to paid at- the sum of for defendant’s $750 single A County Ranch.” Sandoval torneys’ fees, $4,750 for and the sum of fol- us to directs transcript reference ad- support. defendant’s court The trial testimony: lowing judged party their each should bear Dale, listing the other Now, own “Q. costs. worth, net the statement assets Upon application defendant, by the here ascer- any credit there been tax

has plaintiff was pay directed to defend- with you have then since tained ant for costs an incurred her below Depart- Treasury States United amount $3,183.94, which include costs much sir, Yes, I lost so A. ment? $2,973.34,the sum charged by firm of have year I didn’t money last employed accountants Plaintiff her. paid an esti- had and I pay taxes pay $1,000 also ordered to defendant my dollars ten thousand mate of on account of attorneys’ her pending fees carried and that estimate appeal, and the sum of for a month $750 over. support. her that credit? So, you have “Q. still The trial court did not abuse its it have drawn Yes, I would sir. A. discretion when it parties directed the got I they me the time told out bear their costs, own paying again. have to I would it out should be credited with the sum of $3,183.94 just there? have left “Q. You paid on our therefor; order he should also Yes, sir.” A. be credited $1,000 paid to defend ant attorneys’ fees under our order. possibly court could not trial testimony what was from this determined Under our order the has been overpayment, as the responsible paying the sum of a month $750 to defend- not characterized at all. are losses ant for support. her The trial court made no alimony, award of and the defendant’s findings trial court’s The judgment, affirmed here in part, substantial correct. are items these has drawing been interest since entry its May 31, payments question 1955. The made should be defendant’s lower credited with money for che court paid has for order, Upon application parties of com- support under our the defendant’s appor- munity equally property shall be party of one-half and each should bear in between them lower court tioned appeal. of this costs all a method of division suited under best opinion unusually lengthy be- This parties may stipu- the circumstances. The made on challenges the number cause of property, late as to the market value of such judgment below and their seriousness. in failing agreement, introduce evidence transcript exceeds proceedings of value. submitted, exclud- The briefs pages. part cause is in reversed and af- motion, cover than ing those on more part in and is firmed remanded to the parties for both are to be Counsel pages. proceedings District Court further and diligence for their in the anal- commended entry a new judgment for the in accord- study ysis issues and of the record. The herewith. ance trying to determine where the task of passed through plaintiff’s

money which ordered. It is so nearly quarter-century during hands dollars) million came and (over one KIKER, J., and C. C. McCULLOH and expended greatly been it was has what FEDERICI, FRED District Judges, con- J. matter by the care with which the aided cur. De- presented both below and here. however, render this, must spite we still all LUJAN, J., COMPTON, C. and J., not only with conviction opinion our participating. ability issues our best of to the made, under the record been decided SADLER, (dissenting). law Justice rules of substantive

appropriate practice conviction with the appellate majority correctly uphold —not If the the trial accomplished. justice has been abstract finding that court’s interest therefore, pointing forgiven may, We Company separate was his Cola Coca estate desirability practice of a obvious they to the my do), view it is (and difficult for how, as- reason, good understand they segregation me down for lack of can strike substantial possible, the benefits sets, such where support the evidence the prop- finding that execution of from the derived to be Campbell Dairy parties Ice arrived between erty agreements Company is likewise patient their at- Cream counsel of under the at character, namely, separate same estate. torneys. S7á wit, point cross-appeal, majority opinion second on the

Indeed, my to mind this, finding separate plain- in character presents anomaly an that some tiff’s evidence, Campbell Dairy or considera- interest in Ice items of the same it, employed Company, Cream through ruling tions lack of dictates a stressed like sus- sepa- taining arguendo support finding finding. in of a Com- rate character as to the Both the posi- father and son testified contrary pany interest, given a seem to be tively gift to a from the father son to the significance purpose overturning of the latter’s interest in Clovis Beer Com- like finding of character to pany which exchanged for his interest Campbell Dairy Ice tiff’s interest Dairy Company. Ice Cream Company. Cream each it was In instance Some of the considerations, same facts and presumption community char- the same cited majority opinion sustaining and, acter that had to be overcome as finding as to the Coca-Cola interest each, some of the same items of evidence apply equal aptness support for the supply sup- were available inferences trial court’s undoubted holding of gift porting derogation or in finding. the father to of his interest in Company In case of the Coca-Cola Company. Beer Clovis represented by plaintiff’s (now in- The conclusion annnounced my arose in Kerley note) terest inferences study of mind on a first the prevailing opin- finding derogation disregarded giving an unusual ion after amount of time inconclusive and the finding and deemed to consideration of massive record This was accord with the sustained. grew briefs filed. It extensive progres- applicable prevailing appeal. rule stronger throughout my sively work on the 47 McCullough, 13, Marchbanks v. N.M. compels It still abides. case and me to Sands, 426; v. P.2d Sands 48 N.M. opinion with the disagree submitted for the 399; Cobb, Brown v. 152 P.2d N.M. stated above. reason application An P.2d 264. of the same finding challenged majority ruling to the rule otherwise, defendant’s I dissent. notes the retired he how ance of credit as aforesaid. funds and under source represented ? seller) (the Huss 7. The Ranch. Quay County Fields or Bill Van under also paid for plaintiff acquired was Well, that The this March the note ranch on A. have $143,435.28. was assumed for this Huss To obtain Van Bill the drawings from money upon following sum of paid from he drew the been together Ranch sources: Campbell McDonald Cola from the Coca proceeds with $40,000.00 Loan from father......... ac- deposited to was stock 25,750.00 Coca-Cola Funds......... count.” Campbell-McDonald 23,577.75 ...... Campbell 10,000.00 Campbell- Dairy .......... is no evidence There 47,500.00 Bank produced anything Ranch more Loans.............. McDonald profits than the two sums which the plaintiff The asserts that cash re- $40,750. sec- totalling drew His plaintiff upon Tejón ceived the sale of the Grant $14,000 drawn in drawing was for ond Ranches, $118,999.50, and Van Huss went $40,750 October, If the total sum of 1950. ranch, purchase into the of this and that the community into is traced belonging money remainder of the came funds from ranch, $4,500 traced from Coca- this received the sale of his Coca-Cola paid and in drawings, ranch is for Cola funds, however, interest. These proof it cannot said of other be the absence segregated monies; other all we funds from the sale of portion go plain- know is that the fund did into the interest were touched. Coca-Cola account, along tiff’s bank with everything else. holding of the court trial property is af was ranch Under these circumstances plaintiff except that should be cred firmed finding trial court of community owner $4,500 personal funds sum ited is, course, ship correct. However, as it community indebtedness. pay a used is nowhere contradicted that sold in 1952 draw on his ranches were to did two interest for $25,750, At the time of trial a Mize. bal- sum and as defendant’s Chester account- ant had full the records finding access to of the trial court the cattle used, plaintiff belonged tiff’s accountant we think the to the community upheld. will be separate did extent property trace to that 10. insurance policies, depos- bank Life into credited purchase, and he should its, income Squirt tax refund, stock and be- therewith, $24,545.78, difference three automobiles. Tejón tween the cash sale of from the respect With to the Squirt shares of purchase Grant and Ranches and Van Huss stock, says in his brief: price disposition of of this one. The Squirt “The stock acquired aas extent. trial to this court modified should be appellant’s result of owning part Co., the Coca-Cola and since the trial 1320 Mitch at property 8. Rental court held the appellant’s latter to be ell in Clovis. This separate property, he should specific ap- $6,025. is no in 1947 There plied the same reasoning to Squirt prop acquired as evidence it was Stock. The two inseparable.” are community owner erty. finding ship should stand. In his statement of facts as to this acquisi-

Case Details

Case Name: Campbell v. Campbell

Court Name: New Mexico Supreme Court

Date Published: Jan 4, 1957

Citation: 310 P.2d 266

Docket Number: 6030

Court Abbreviation: N.M.