On April 14, 1967, defendant Russell Waite, a retired California Superior Court judge, in an action for an ex parte divorce in Nevada obtained a judgment awarding him all benefits accruing under the Judges' Retirement Law (Gov. Code, §§ 75000-75109). Plaintiff, Jean Waite, defendant's former wife, brought the present action in the Riverside County Superior Court against defendant
We affirm the determination of the Los Angeles County Superior Court holding that the portion of the Nevada judgment that awards defendant the whole of the retirement benefits is not entitled to full faith and credit; Nevada had neither personal jurisdiction over plaintiff nor in rem jurisdiction over the asset. We further hold that the retirement benefits attributable to defendant's service as a judge during the marriage constitute community property subject to division and award upon divorce. In so dividing this asset, the superior court awarded a one-half interest not only to plaintiff but also to her heirs and devisee. Since the purpose of the Judges' Retirement Law is to ensure sustenance for the retired judge and
1. Statement of Facts.
The following recital rests upon the superior court's findings of fact, which are not challenged on appeal. The parties married in 1934, and separated on January 20, 1967. During the marriage defendant served as a judge of the Superior Court of Riverside County. Over these years of service he contributed $13,090.18 to the Judges' Retirement Fund, all of which was community property. He retired on October 31, 1966, without withdrawing his contributions (Gov. Code, § 75033) or electing any optional settlement (Gov. Code, §§ 75070-75071), and became entitled to a monthly pension in an amount equal to 75 percent of the salary of the judge holding defendant's former office (Gov. Code, § 75076). At all relevant times this yielded a monthly payment of $1,562.50, but since defendant will obtain the benefits of any future increase in salary of that office, the trial court did not find the actuarial value of defendant's pension.
Plaintiff was eligible to retire from her teaching position on January 20, 1967, and did retire on June 16, 1967; she receives monthly benefits from the Teachers' Retirement Fund of $111.67. Her pension rights equal an actuarial value of $14,457, of which $13,879 is attributable to her services and contributions during the marriage.
Upon separating on January 20, 1967, the parties equitably divided the community property at hand, which included cash, notes, automobiles, clothing, and furniture. Apparently the only assets not included in the agreement were the parties' respective pension rights.
On February 2, 1967, defendant became a permanent resident of Nevada. He then sued for divorce in the Eighth Judicial District Court of Nevada. On March 22, 1967, plaintiff was personally served in California with the Nevada summons. Since plaintiff was not served in Nevada, and did not appear there, defendant concedes that Nevada did not acquire personal jurisdiction over her. Granting defendant an ex parte divorce on April 14, 1967, the Nevada court awarded defendant the "contributions to Judges' Retirement Fund, together with all rights and benefits accruing thereunder," likewise gave plaintiff equivalent title to her teachers' pension, and finally distributed the rest of the community property in accord with the separation agreement.
As to amounts payable under the Judges' Retirement Law, the court ordered that "Flournoy or his successor in office pay directly to plaintiff herein or her devisee or heirs one half of all benefits which may be payable under the Judge's Retirement Act by reason of the services of defendant Waite." (Italics added.) Finally, the court awarded plaintiff alimony of $1 a month, but provided that "During any period of time that said payment be suspended pursuant to the provisions of Government Code [suspending payments whenever a retired judge accepts temporary judicial assignment and receives a salary] or for other cause within the control of defendant Waite, defendant Waite is ordered to pay as alimony to plaintiff a sum equal to 37 1/2% of the then salary of a judge of the Superior Court...."
Defendant's appeal attacks only the award to plaintiff, her devisee or heirs, of one-half of all benefits payable under the Judges' Retirement Law. He raises three contentions: (1) that the Nevada judgment awarding him all the benefits should receive full faith and credit in California; (2) that the benefits do not constitute community property, but his separate property; and (3) if plaintiff should predecease him, payments thereafter should go to defendant instead of to plaintiff's heirs or devisee.
2. The Nevada court lacked jurisdiction to divide and award the benefits accruing under the Judges' Retirement Law.
The concept of divisible divorce in California found expression in the classic decision of Hudson v. Hudson (1959) 52 Cal.2d 735 [344 P.2d 295], in which we stated that "`In a divorce action in a foreign state upon constructive service the court there has authority to adjudicate status (in rem) of a person residing in that state but has not jurisdiction to adjudicate away (in personam) any of the then vested property rights of the absent spouse who does not reside in such state, who is not personally
Acknowledging that Nevada lacked in personam jurisdiction over plaintiff, defendant nevertheless contends that his right to pension benefits is a species of intangible personal property, and that Nevada, as the state of his domicile, could exercise jurisdiction in rem to adjudicate and award title to that property. In support of this contention he cites numerous cases which fix the "situs" of a debt or chose in action in the state of the creditor's domicile. (See, e.g., Texas v. New Jersey (1965) 379 U.S. 674 [13 L.Ed.2d 596, 85 S.Ct. 626]; McCulloch v. Franchise Tax Bd. (1964) 61 Cal.2d 186 [37 Cal.Rptr. 636, 390 P.2d 412]; Chambers v. Mumford (1921) 187 Cal. 228, 233 [201 P. 588, 42 A.L.R. 342]; Fenton v. Edwards & Johnson (1899) 126 Cal. 43, 46 [58 P. 320].) Plaintiff responds with an equal array of cases holding that the situs of a debt can only repose where the debtor is subject to an in personam action. (E.g., McElroy v. McElroy (1948) 32 Cal.2d 828, 831 [198 P.2d 683]; see Harris v. Balk (1905) 198 U.S. 215 [49 L.Ed. 1023, 25 S.Ct. 625]; Estate of Waits (1944) 23 Cal.2d 676, 680 [146 P.2d 5].)
Hanson v. Denckla (1958) 357 U.S. 235 [2 L.Ed.2d 1283, 78 S.Ct. 1228], is particularly in point. Florida residents filed suit in Florida to establish their right to certain intangible property held by a trust established and administered in Delaware. Other claimants to that property, who were not residents of Florida, denied Florida's jurisdiction to adjudicate the matter. When the Delaware courts refused full faith and credit to Florida's decree favoring the claim of its residents, the issue reached the United States Supreme Court. Before that court, the Florida claimants argued that Florida could exercise in rem jurisdiction over the trust on the theory that the situs of intangible property follows the domicile of the owner — exactly the contention advanced by defendant in this case. The Supreme Court rejected the argument, stating that "[f]or the purpose of jurisdiction in rem the maxim that personalty has its situs at the domicile of its owner is a fiction of limited utility.... The fact that the owner is or was domiciled within the forum State is not a sufficient affiliation with the property upon which to base jurisdiction in rem." (357 U.S. at p. 249 [2 L.Ed.2d at p. 1295].)
We believe, moreover, that assignment of the "situs" of the pension benefits to California will promote the more efficient judicial administration (see Texas v. New Jersey (1965) 379 U.S. 674, 683 [13 L.Ed.2d 596, 602, 85 S.Ct. 626]) and will be the more likely to aid in achieving a satisfactory division of the community property. When the foreign court lacks personal jurisdiction over the California spouse and in rem jurisdiction over the real and personal property which remains in California, the grant of jurisdiction over intangible assets to the foreign court may result in a piecemeal, inefficient, and sometimes inequitable disposition of the community property. In such a case the California court, as the only court that can exercise jurisdiction over all the parties and all community assets, constitutes the better equipped tribunal to adjudicate an equitable division of the community property.
(5) 3. The benefits payable under the Judges' Retirement Law are community property.
In Phillipson v. Board of Administration (1970) 3 Cal.3d 32 [89 Cal.Rptr. 61, 473 P.2d 765], we held that the accumulated contributions of a retired employee to the Public Employees' Retirement System were community property, subject to the jurisdiction of the divorce court; we upheld that court's award of those funds to the wife of the former employee. Although defendant seeks to distinguish Phillipson, most of his arguments run squarely into conflict with the express and considered language of that opinion.
Recognizing that Phillipson held that contributions to a pension fund that are accumulated during the marriage compose community property, defendant first contends that pension benefits should be classed as separate property. Phillipson, however, stated clearly that "Monies contributed to the Public Employees' Retirement System, and benefits payable, are community property." (3 Cal.3d at p. 39.) (Italics added.) Surely pension benefits do not represent the beneficient gratuities of the employer; they are, rather, part of the consideration earned by the employee. (Sweesy v.
Secondly, defendant quotes our statement in Benson v. City of Los Angeles (1963) 60 Cal.2d 355, 362 [33 Cal.Rptr. 257, 384 P.2d 649], that "a wife of a public employee acquires no vested interest in a pension until it becomes payable to her." He then argues that no benefits would become payable to plaintiff directly under the Judges' Retirement Law until defendant died, and then only if plaintiff qualified as surviving spouse. (Gov. Code, § 75077.) Consequently, defendant argues, the wife acquired "no vested interest." Yet Phillipson rejected the identical argument; we there pointed out that the sentence that defendant quotes from Benson refers only to the wife's contingent right to a widow's benefit; both Benson and Phillipson clearly distinguish the spouse's vested community interest in the employee's lifetime pension.
Finally, defendant contends that Phillipson is limited to pensions under the Public Employees' Retirement System, and that pensions paid pursuant
Yet, as we shall explain, defendant's points of alleged difference between judicial and non-judicial pensions cannot realistically affect our determination as to whether the judicial pension constitutes community or separate property.
The plan of payment of the pension — whether fixed, or reflective of subsequent salary increases in the relevant position — does not change the nature of the right to the pension. The right flows from the services rendered by the employee during marriage; the manner of the expression of the right does not distort it or alter its community characteristic.
Legislative enactment may change the amount of pensions payable in the future (Sweesy v. L.A. etc. Retirement Board (1941) 17 Cal.2d 356, 361 [110 P.2d 37] [Los Angeles City firemen]; Jorgensen v. Cranston (1962) 211 Cal.App.2d 292, 297 [27 Cal.Rptr. 297] [superior court judge]); often such increases become necessary to avoid an inflationary-caused dimunition in the real dollar value of the pension. The only difference in this respect between pensions of judges and those of other public employees is that under the present statute retired judges' pensions automatically increase whenever the Legislature raises the salaries of active judges, while other retired employees obtain increases only if the Legislature initiates such an increase. But all public employees, including judges, may obtain increased pensions through Legislative enactment, and none, including judges, receive such increases without some kind of prior or coincident legislative action.
Defendant would, in essence, invite us to declare that the matured pension rights of all public employees except judges are community property; that those of judges somehow are separate property. As we have seen, however, the differences between the Public Employees' Retirement Act and the Judges' Retirement Law, either do not exist at all or are relatively minor, and from a realistic view do not render judicial pensions less certain and secure than pensions of other employees. We conclude that judicial pensions must also be classed as community property.
4. The superior court exceeded its discretion in awarding benefits to plaintiff's heirs and devisees.
The superior court ordered the Controller to "pay directly to plaintiff herein or her devisee or heirs one half of all benefits which may be payable under the Judge's Retirement Act by reason of the services of defendant Waite." (Italics added.)
The wife complains that this reasoning deprives her of an "equal" portion of the pension; if the judge enjoys a right to payments for his lifetime but her right is limited to the period of the judge's life or her life (whichever is shorter), her interest would be unequal in length to his, and actuarially of lesser value.
We conclude that the statutory design for judges' pensions negates the spouse's contention that her legatees should inherit pension payments payable for the balance of the judge's life. Whatever community interest the wife may claim, it cannot transcend the legislation upon which the pension itself rests.
Since the Nevada judgment was not binding as to the division of community property, the superior court in the instant case had jurisdiction to divide the community assets. That court correctly determined that pension payments under the Judges' Retirement Law are community property, but in dividing that community asset, it erred in awarding benefits to the devisee or heirs of the plaintiff.
The judgment is therefore reversed.
Wright, C.J., McComb, J., Peters, J., Mosk, J., Burke, J., and Sullivan, J., concurred. Pages 475 - 483