Connett v. Church

78 P.2d 760, 26 Cal. App. 2d 83, 1938 Cal. App. LEXIS 997

• Court: California Court of Appeal
• Decided: April 20, 1938
• Docket: Civ. 2125
• Status: Published

Opinions

BARNARD, P. J.

This is an appeal from an order appointing the respondent administrator of the estate of Richard E. Frary, deceased. After the appeal was taken the respondent died and D. L. Severn was appointed administrator of this estate and has been, substituted as respondent herein.

Richard E. Frary died intestate, leaving no issue. The original respondent, as the nominee of a sister of the deceased, applied for letters of administration. The appellant, who is a daughter of decedent’s predeceased wife, filed a contest and also a petition that letters be issued to her. Her petition was denied, letters were issued to the original respondent and she has appealed.

The main property in this estate consists of a parcel of real property in this state which was taken in the name of Richard E. Frary and Emma C. Frary, his wife, as joint tenants with the right of survivorship. It is conceded that this property was acquired with the proceeds of the earnings of these parties after marriage and while residing in Oklahoma. They came to California some ten years before Mr. Frary died, which event occurred about a year after the death of Mrs. Frary.

The appellant contends that the respondent is not entitled to letters in this estate because all of this property goes to the children of the predeceased wife under section 229 of the Probate Code. It is argued that the funds brought to California by this husband and wife, having been earned by them in Oklahoma, were not community property; that the creation of the joint tenancy in the real property purchased with these funds created a separate estate in each spouse; that the estate of each spouse was created at the time of the grant to them in joint tenancy; that since the estate of the surviving husband dates back to the creation of the joint tenancy he acquired the entire property as a gift from his wife, the gift to take place in futuro; and that section 229 of the Probate Code is therefore controlling.

The court found “that the property was the community property of Emma C. Frary and Richard E. Frary prior to the date when the said property was acquired” by them as joint tenants. While this finding is erroneous (see Estate of Thornton, 1 Cal. (2d) 1 [33 Pac. (2d) 1, 92 A. L. R. 1343]), this error is immaterial here.

This wife had some interest in the funds thus earned during this marriage and the husband also had an interest therein. Whatever these interests were at the time these funds were brought to California, they were the separate property of the spouses, respectively, and the interest of each spouse was his or her separate property after the creation of this joint tenancy. (Siberell v. Siberell, 214 Cal. 767 [7 Pac. (2d) 1003]; Estate of Putnam, 219 Cal. 608 [28 Pac. (2d) 27].) It would seem that the separate property held by each of these parties after the creation of the joint tenancy, being the interest of each as a joint tenant, was acquired by each not as a gift from the other but as a direct result of a contractual relationship. By a mutual binding agreement each spouse contributed his or her interest in funds earned after marriage toward the purchase of property which was taken in both their names as joint tenants. Had these funds been earned in this state they would have been community property and the survivor of these joint tenants would have taken the entire property by right of survivor-ship and upon his death his heirs alone would be entitled to share therein. (In re Kessler, 217 Cal. 32 [17 Pac. (2d) 117].)

No good reason appears why a similar result should not obtain here even though the respective interests of the spouses in the funds brought to this state must be regarded as their separate property. While the transfer of separate property into a joint tenancy status may often constitute a gift inter vivos (see Bell v. Moloney, 175 Cal. 366 [165 Pac. 917]; George v. Daly, 83 Cal. App. 684 [257 Pac. 171]; Tilden v. Tilden, 81 Cal. App. 535 [254 Pac. 310]), this is not necessarily the case where a husband and wife use that form of contract to transfer or change their respective interests in property earned during the marriage into a joint tenancy. In a very real sense the parties in such a case are not making a gift to each other but each is retaining an interest which is separate property and which may ripen into the absolute ownership of all of the property if he survive the other. We think that such a situation should not be held to constitute a gift within the meaning of section 229 of the Probate Code, but it is rather a contractual change in the status of the property and in the rights of the parties. Not only is this change brought about by contract, each of the parties contributing an interest in property theretofore held by him, but the resulting condition permits both parties to retain the equal enjoyment of the entire property during their joint lives, and then leaves the property to whichever one may survive the other. In Estate of Harris, 9 Cal. (2d) 649 [72 Pac. (2d) 873], the court said: “It cannot be said, we think, that if a husband and wife enter into a mutual binding agreement whereby each contributes his or her separate property to a joint tenancy account, that the converting of said separate property of each of the spouses into a joint tenancy ownership constituted a gift by each to the other of his or her separate property.” We are unable to see why a different situation should result where a husband and wife used their joint earnings to purchase real property which was taken by them in joint tenancy.

A further consideration here is that even if it could be said that a part of the property in question came to the deceased husband as a gift from his wife through the creation of the joint tenancy it would still be true that another part of that property came to him as a result of what he himself had put into the joint tenancy, which part at least would not be a gift to him from his wife. (See Estate of Harris, supra.) In any event, the relatives of the decedent are entitled to succeed to some portion of this property and under sections 422 and 423 of the Probate Code the order appealed from was correctly entered.

The order is affirmed.

Jennings, J., concurred.