This is an appeal by defendant-husband and relates only to money and property. The parties intermarried on April 23, 1938, and separated on July 1, 1956. The wife filed suit for divorce on November 15, 1956, and on December 14, 1959, during the course of a protracted trial, was awarded an interlocutory decree of divorce on the ground of extreme cruelty. Some nine months later, on September 14, 1960, the judgment from which this appeal is taken was entered.
We will discuss the numerous points raised by appellant in the order made but, before doing so, wish to state that we have examined the record and have concluded that the trial court's findings of fact of which appellant complains are supported in each instance by substantial evidence, and we do not propose to set forth in this opinion a summary of the testimony relating thereto.
REIMBURSEMENT OF WIFE'S SEPARATE FUNDS
In response to the court's inquiry as to whether the parties had agreed or understood that respondent was to be reimbursed, appellant testified: "Not in so many words, your Honor. But I am sure that we both understood that that would be considered and done, if possible." The trial court, in announcing its decision, referred to this testimony and stated: "It is significant to me, because it shows what was in Mr. Haseltine's mind at the time Mrs. Haseltine was making these contributions to living expenses,..." Respondent testified that she and appellant "discussed my private income and that I would be making the advances to our joint account to help pay the family expenses so that he could be putting his money and what he had and as much as he could into the business to build it up. It was discussed again, probably more at length, ... that I would continue making my contributions or my advances to the community living, and that on those books there would be a credit to my account for what I had been contributing to the family living."
The use of the word "advances" is of significance in determining whether the parties made an express agreement to reimburse respondent, because such word indicates, when used in relation to money, an agreement to reimburse the one who made the advances. (Semi-Tropic Spiritualists' Assn. v. Johnson, 163 Cal. 639, 642 [126 P. 488].)
Without further discussion, it is evident that there is sufficient evidence to sustain the trial court's finding that respondent's advances to the community expenses were made under an agreement for reimbursement.
Appellant contends that the issue of reimbursement was never raised. We need do no more than call attention to the following provision in the pretrial order: "Another serious issue at the trial will be plaintiff's demand for reimbursement for her contributions to the community over the years out of her separate funds, ..." The issue was thus effectively made part of the record. (Rule 8.8, Rules for the Superior Courts.) What appellant really complains about is that his counsel thought that respondent intended to rely upon an agreement to reimburse implied in the law and not upon an express agreement as required. (See Blackburn v. Blackburn, 160 Cal.App.2d 301 [324 P.2d 971]; Thomson v. Thomson,
The decree provided that respondent was to be "reimbursed from the community estate in the amount of $123,575.95 as set forth in said Findings of Fact and Conclusions of Law." Appellant contends that an inconsistency results when reference is made to the findings and conclusions. The findings recite that respondent is to reimburse the community in the amount of $24,396.11 for money received by her from appellant which belongs to the community. Reference has already been made to the finding that respondent advanced $123,575.95 to the community from her separate funds. The conclusions provide as follows: "Plaintiff will reimburse the community in the amount of $24,396.11. Defendant will reimburse the community in the amount of $123,575.95 which the community shall in turn reimburse and pay over to plaintiff in full. In the event the community shall fail or for any reason be unable to reimburse and pay over to plaintiff said sum of $123,575.95, defendant shall pay to plaintiff from his separate property the sum of $63,023.70."
The court then, in both the conclusions and the decree, divided the "net community property" 51 per cent to respondent and 49 per cent to appellant.
It was never the intention of the trial court to require appellant to pay the $123,575.95 into the community from his separate estate. It was fully aware of the situation which would thereby result, and stated, upon submission of the case for decision: "If I order that Mrs. Haseltine be reimbursed in full she would be getting 100% for herself. There would be 100% less of that amount left to divide." What the trial court obviously intended was that the community should reimburse respondent if it was able to do so. The "net community property" would thus be reduced by $123,575.95, and would result in a reduction of respondent's share in the said property to be divided between the parties to the extent of 51 per cent of the amount of such reduction, or the sum of $63,023.70. The trial court gave appellant the alternative of reimbursing respondent either in this manner or paying her the sum of $63,023.70 from his separate funds. We do not
THE 1954 AGREEMENT
As of January 1, 1947, defendant withdrew approximately $27,000 in securities and cash from Pacific Stevedoring and Ballasting Company as representing his separate interest in the business. Thereafter, the business was considered and treated by the parties as being entirely community property. In 1954, defendant proposed to plaintiff that he purchase her community interest in the company, and in early 1955 an agreement was drawn up and executed, whereby defendant purchased such interest for $23,685.54, represented by a note. This amount, plus interest of $710.57, paid to plaintiff on the note, is the $24,396.11 which the court required plaintiff to return to the community.
The trial court found that the 1954 agreement was invalid. It found that the sum paid by defendant to plaintiff for her interest was greatly below the company's actual cash value, that plaintiff received no independent legal advice and was not represented by counsel during the drafting and execution of the agreement, that defendant did not disclose to plaintiff the true value of the company or the great pecuniary advantages which he would receive by virtue of the agreement, that defendant represented that the sum paid plaintiff was equal to one-half of the company's net worth and that this was not adequate compensation for plaintiff's interest, that defendant did not disclose to plaintiff the fact that certain items of deferred income were carried on the company's books as a charge against assets in computing net worth, and that defendant did not disclose to plaintiff that at the time of their agreement he had arranged for the sale of part of the company's assets for a sum equal to three times the amount paid plaintiff for her interest. Upon these findings the court concluded that plaintiff had not been divested of her interest in the business and accordingly rendered judgment that Pacific Stevedoring and Ballasting Company was still the community property of the parties.
Defendant contends that plaintiff's alleged cause of action for rescission was barred by the statute of limitations, that plaintiff failed to comply with Civil Code section 1691 which requires prompt notification for a rescission and an offer of restoration, that plaintiff's failure to rescind promptly operated as a ratification of the 1954 agreement and an estoppel to assert her rights, and that the cause of action for rescission was defectively pleaded.
Section 158 of the Civil Code provides: "Either husband or wife may enter into any engagement or transaction with the other, or with any other person, respecting property, which either might if unmarried; subject, in transactions between themselves, to the general rules which control the actions of persons occupying the confidential relations with each other, as defined by the title on trusts." The measure of the husband's fiduciary obligation to his wife is set forth in Civil Code sections 2228-2234, and has frequently been enunciated. (Vai v. Bank of America (1961) 56 Cal.2d 329 [15 Cal.Rptr. 71, 364 P.2d 247]; Weil v. Weil (1951) 37 Cal.2d 770 [236 P.2d 159]; Coons v. Henry (1960) 186 Cal.App.2d 512 [9 Cal.Rptr. 258].)
Defendant's final contention with respect to the evidence presented on this issue consists of an attempt to rationalize his purchase of plaintiff's one-half interest in Pacific Stevedoring and Ballasting Company for approximately $23,000 with the fact that in the following year the business had an
DID THE BUSINESS BECOME COMMUNITY PROPERTY?
The trial court found: "By virtue of the contributions by plaintiff, as described in the preceding paragraph, defendant was thereby enabled to retain moneys that permitted the Pacific Stevedoring & Ballasting Company to expand its operation. For the purpose of minimizing the tax impact on the earnings and profits of the Pacific Stevedoring & Ballasting Company, defendant began after marriage to withdraw his separate capital therefrom so that the remaining capital and the income realized therefrom would be the community property of the parties. As of January 1, 1947, defendant had withdrawn his entire separate capital from Pacific Stevedoring & Ballasting Company, and from and after that date, the entire remaining capital of said company was the community property of the parties."
Defendant argues that the trial court could not accept just those parts of the business records which favored plaintiff's position and reject the parts which supported defendant's. The trial court was not so restricted. The admissions in the books that the business was community property from and after January 1, 1947, are consistent with the other evidence on this issue which was found by the court to be true. On the other hand, the "net worth" of the business as of December 31, 1954, as shown in the books, was found to be greatly below its actual value. The 1954 agreement provided that defendant was to pay plaintiff one-half of such "net worth" for her community share in the business and this is one of the grounds upon which the trial court concluded that defendant had overreached the plaintiff.
Defendant contends that, if plaintiff insists on attacking part of the business records and adopting other parts, he should be allowed to recast such records in their entirety and compute the respective interests of the parties in the business in the light of community property law as set forth in his brief. The trial court, of course, had to rule on what had been done and not what might have been done. Defendant's contention requires no further discussion.
We hold that there is substantial evidence to support the trial court's finding and conclusion that the parties agreed that the business was to be their community property.
FAILURE TO AWARD EXPENSES OF PROVING REQUESTED ADMISSIONS
Defendant now challenges the trial court's finding of good cause for plaintiff's denial of the requested matters. Patently, the rule in question is mandatory in the absence of good cause. However, defendant's challenge here is of the trial court's discretionary power to find that good cause existed. The inquiry on appeal is, therefore, circumscribed by the limitations upon the power of appellate courts to disturb an exercise of discretion by the trial court. (See Greyhound Corp v. Superior Court (1961) 56 Cal.2d 355 [15 Cal.Rptr. 90, 364 P.2d 266], at pp. 379, 380.) An abuse of discretion must be shown.
In responding to the requests, plaintiff admitted that defendant owned and operated Pacific Stevedoring and Ballasting Company as his separate property at the date of marriage, that an attached exhibit showing the parties' income tax payment was accurate, that the 1954 agreement was executed by the parties and the signatures thereon genuine, and that certain real property was held of record by the parties as joint tenants. She denied a request to admit that funds advanced from her separate estate were voluntary contributions with no agreement for repayment. The court explicitly found in accordance with that denial. Many of the requests, defendant concedes, sought admissions as to the authenticity and truth of matters related in summaries made up from the parties' books by the accounting firm employed by defendant to establish a bookkeeping system. The trial court specifically found that a survey of prior transactions upon the basis of which
Manifestly, the trial court did not abuse its discretion in finding that plaintiff had good cause for her denials. The fact that matters denied were subsequently proved by uncontradicted evidence, if true, does not make the denial unreasonable per se, in retrospect. The difference between an admission and a denial is measured by the burden of proof involved in sustaining the affirmative of the issues as to which admissions were requested.
In the instant case, key issues were presented regarding the validity of the characterizations reflected in the parties' books, and the status of the books themselves. The issues raised were hotly contested and difficult to resolve, the record reflecting that the court repeatedly sought the argument of counsel as an aid in reaching toward an equitable result. Many of the requests and related interrogatories intruded into the midst of these controversies. Requests for admissions are not instruments of discovery. "Section 2033, like its counterpart Federal Rule 36, contains closely knit provisions calculated to compel admissions as to all things that cannot reasonably be controverted." (Emphasis added; Louisell, Discovery Today (1957) 45 Cal. L. Rev. 486, 505.) Upon our review of the record, we are unable to say that the trial court abused its discretion in determining that plaintiff's denials were made for good reasons.
POST-1954 TRANSMUTATION AGREEMENTS
The trial court found that one group of securities which were listed as defendant's separate property were purchased after 1954, with funds derived from Pacific Stevedoring and Ballasting Company or other community held bank accounts. It held that these securities were community property. Defendant concedes that certain of the securities were originally purchased with community funds but contends that they became his separate property by virtue of an agreement between the parties, a matter which defendant says the trial court failed to comprehend.
We find in the record no evidence of such an agreement, and defendant's citations to the record revealed none. There
Defendant also contends that the matter must be resolved in his favor on the basis of a stipulation entered into at the trial. From the record it appears that plaintiff at one point
THE RESTRAINING ORDER
A temporary restraining order prohibiting disposal of property was granted ex parte on November 15, 1956, and an order to show cause was issued thereon, returnable eleven days later instead of within ten days as required by section 527 of the Code of Civil Procedure. However, the matter
Various motions were thereafter made to modify the restraining order. It thus appears that both parties acted upon the assumption that the stipulation and order of December 12, 1956, supplanted the original temporary restraining order. The result was the same as though the parties had stipulated to the original restraining order, as modified, and waived the hearing provided for by section 527.
On October 19, 1959, defendant made application to eliminate such support payments. Respective counsel stipulated that whatever order was made with respect thereto could be made nunc pro tunc as of that date. No hearing was held at the time.
On December 4, 1959, during the progress of the trial, appellant's counsel proposed and respondent's counsel accepted the following stipulation: "And, Mr. Haseltine will pay the support of Arthur [younger son], and to the extent that the support of Charles is not covered by his navy earnings, will pay the support of that son as well; that it will not be necessary for this Court to make any designated amount or order which Mr. Haseltine is to pay in dollar amounts, but that he will pay directly for the support of these two children, reserving to Mrs. Haseltine, at any time, the right to come to this Court to petition for a child support allowance in the event that she feels that the children are not being adequately supported by Mr. Haseltine."
On December 14, 1959, both sides rested without a hearing being had as to defendant's application of October 19, 1959.
On April 19, 1960, pursuant to stipulation by counsel, the case was reopened for the purpose of taking respondent's testimony as to the additional expense involved in having the children at her home in Ross on weekends and vacations. The older son was stationed at Alameda and the younger son was attending the University of Nevada. The court thereupon made the following order: "The present pending order, whereby Mr. Haseltine is to pay $1,000 per month for the support and maintenance of the plaintiff and the minor children, will be modified as of October 19, 1959, so as to require Mr. Haseltine to pay $250.00 per month for the support of the minor children.... This will be the order, nunc pro tunc, as of October 19, 1959, until the further order of the Court" (emphasis ours). The court did not abuse its discretion in making such order and, apparently, appellant did not at that time contend to the contrary.
On July 26, 1960, the trial court signed its findings of fact
The conclusions provide: "Pursuant to stipulation of the parties, the care, custody and control of the minor children shall be in defendant, subject to further order of court and subject to plaintiff's right to visitation.... The present order with reference to alimony and child support is reduced so that defendant shall pay no alimony to plaintiff, but shall pay for the support of the minor children during their minority, all subject to further order of the court."
The judgment was signed on September 14, 1960. It provides as follows: "Custody of the minor children of the parties is awarded to defendant and cross-complainant, in accordance with the stipulation of the parties. Defendant and cross-complainant is ordered to pay for the support of the minor children, in accordance with the stipulation of the parties" (italics added).
It is evident that the court is referring not only to the stipulation of December 4, 1959, but also to the stipulation of April 19, 1960, whereby the case was reopened for the very purpose of determining how much defendant should pay to plaintiff to defray the additional expenses occasioned by the children's visits to her home. If this was not the intent of the parties, why did not appellant's counsel object to the hearing on April 19, 1960, on the ground that the parties had disposed of the issue by the stipulation of December 4, 1959?
We hold that the judgment did not and was not intended to modify or set aside the order of April 19, 1960, but instead incorporated it by reference in the manner above described. Defendant has never moved to modify the judgment in this respect, although his duty with relation thereto terminated as each child reached his majority. (Wilkins v. Wilkins, 95 Cal.App.2d 605, 607 [213 P.2d 748]; Hale v. Hale, 6 Cal.App.2d 661, 663 [45 P.2d 246].)
Defendant's remaining contentions on appeal may be dealt with as they are posed, summarily. The contention is made that since plaintiff failed to prove her title or the source of acquisition of her separate property the presumption must be indulged that the securities composing that estate are community property. The answer is that the record does not disclose, nor does defendant, that an issue as to the character of the property constituting plaintiff's separate estate was ever tendered by the pleadings or proof. We are pointed to nothing in the record which indicates that the court acquired jurisdiction to determine the validity of plaintiff's title to her separate property. (See Witkin, Summary of Cal. Law, Community Property, § 72, p. 2771.) To the contrary, defendant sought at the trial to prove the magnitude of her separate estate, rather than challenge its title. The contention is without merit.
The trial court found that certain of defendant's obligations, totaling $10,571.47, were chargeable against the community property. However, the court further ordered that each party should bear his or her own attorney's fees, accountants' fees and costs of suit from their respective separate estates. This is a matter of discretion and no abuse thereof has been shown. (See 16 Cal.Jur.2d, Divorce and Separation, § 192, "Object of Allowance," and § 195, "Financial Condition of Parties.") Each party had ample separate property from which to pay these expenses.
Defendant seeks to avoid this result, stating that he "contracted the debts as manager of the community property and the community estate was liable for them." However, this was but an attempt by defendant to obtain something by indirection which he could not do directly. It is significant that no legal authority is cited which supports this contention.
The judgment is affirmed.
Kaufman, P.J., and Shoemaker, J., concurred.
A petition for a rehearing was denied May 16, 1962, and appellant's petition for a hearing by the Supreme Court was denied June 27, 1962.