In re Marriage of Preston

402 N.E.2d 332, 81 Ill. App. 3d 672, 37 Ill. Dec. 442, 1980 Ill. App. LEXIS 2428
CourtAppellate Court of Illinois
DecidedMarch 14, 1980
DocketNo. 78-435
StatusPublished
Cited by34 cases

This text of 402 N.E.2d 332 (In re Marriage of Preston) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Marriage of Preston, 402 N.E.2d 332, 81 Ill. App. 3d 672, 37 Ill. Dec. 442, 1980 Ill. App. LEXIS 2428 (Ill. Ct. App. 1980).

Opinions

Mr. JUSTICE KARNS

delivered the opinion of the court:

The petitioner, William Preston, was granted a judgment of dissolution of marriage from the respondent, Suzanne Preston, in the Circuit Court of Madison County. Both parties to this action appeal from the circuit court’s order with respect to the disposition of property, child support, maintenance and attorney’s fees. There is no issue as to the judgment of dissolution of marriage.

The parties were married in 1968 and two children were bom of that marriage. The petitioner, William Preston, owns a one-third interest in Marine Power, Inc., and is the only working shareholder. He earns approximately $21,000 a year. Petitioner also receives $4500 in October of each year from the proceeds of the sale of his father’s and uncle’s business. The respondent is now a college student majoring in accounting and anticipates receiving her degree in two years. She is not presently employed.

The first issue concerns the trial court’s disposition of the real and personal property owned by the parties. The court ordered $22,300 paid to the petitioner upon the sale of the home of the parties, finding that these funds constituted nonmarital property.

The evidence disclosed that the petitioner had inherited $10,000 from his father in 1969 and $12,000 from his uncle in 1970. The $12,000 inheritance from petitioner’s uncle initially was placed in a joint-tenancy savings account owned by the parties. It was further established that petitioner purchased a boat with $7,500 of the $10,000 inheritance and that when the boat was subsequently sold, $7,300 of the proceeds from the sale was used to purchase the lot on which a home for the parties was built. Title to the vacant lot was conveyed to the parties in joint tenancy. Petitioner contends, and the trial court found, that the down payment for the home was made up of the $12,000 inheritance from petitioner’s uncle and $3,000 from the annual payment on the sale of his father’s and uncle’s business. The total of the $7,300 from the sale of the boat, $12,000 from the joint savings account and $3,000 of the annual escrow payment represented the sum of $22,300 which the trial court set aside to the petitioner.

The respondent contends that the trial court erred in setting aside $22,300 as inherited nonmarital funds and in finding that no gift was intended when petitioner purchased joint tenancy property with nonmarital funds or from the joint saving account established from nonmarital funds.

Section 503(a)(1) and (2) of the Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1977, ch. 40, par. 503(a)(1), (2)) provides that “property acquired by gift, bequest, devise or descent” and “property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, bequest, devise or descent” shall be considered as nonmarital property. Consequently, it must be determined whether it can be said that the $22,300 invested in the home of the parties was the result of an “exchange” for the property acquired by petitioner by inheritance, and, if so, whether by purchasing the property in joint tenancy, a gift to respondent was intended by petitioner.

The petitioner testified at trial that even though title to the home was taken in joint tenancy, the creation of the joint tenancy was for inheritance and tax purposes and that he did not intend to make a gift of any portion of the $22,300 to his wife. The testimony of both petitioner and respondent demonstrated that before the inherited funds were used to purchase the property they were put into a joint bank account. Further, petitioner also testified on rebuttal that the property was purchased and title was conveyed to both parties in joint tenancy as he believed that most marriages are or should be a “fifty-fifty proposition.” At the time of the purchase of the property, petitioner stated that he believed their marriage was a “fifty-fifty proposition.”

Section 503(b) of the Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1977, ch. 40, par. 503(b)) provides that when property is acquired during the marriage it is considered marital property, regardless of how title is held. Section 503(b) further provides that this presumption may be overcome by showing that the property was acquired by one of the methods enumerated in section 503(a). The petitioner argues that since the property was acquired with funds inherited by him, one of the exceptions enumerated in section 503(a), the trial court did not err in ordering a return of the funds invested by him.

The Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1977, ch. 40, par. 101 et seq.) is a modified version of the Uniform Marriage and Divorce Act, which has been adopted by several of our sister States. Under Section 503(a)(2) of our act, if nonmarital property is exchanged after marriage for other property, the property thereby acquired also remains nonmarital property. Missouri and Colorado, which have also adopted versions of the Uniform Act, have “exchange exceptions” virtually identical to our own. (Mo. Rev. Stat. §452.330.2(2) (1978); Colo. Rev. Stat. §14 — 10—113(2)(b) (1974).) This provision does not appear in section 307 of the Uniform Act, which is the counterpart to our section 503, as promulgated by the Commissioners on Uniform Laws. See Uniform Marriage and Divorce Act §307, and Commissioners’ Comment, in 9A Uniform Laws Annotated (1979).

Courts do not agree on the interpretation of this “exchange exception.” (See Kalcheim, Intention Controls: The Theory of Transmutation — The Effect of Placing Property Which was Initially Non-Marital into Joint Tenancy; the Theory of Commingling — The Effect of Intermingling Marital and Non-Marital Funds, 68 Ill. Bar. J. 320 (1980).) As we understand it, the emerging rule in Missouri is that separate property which has been commingled or transferred into joint names is presumed to become marital property absent proof of contrary intent. (In re Marriage of Badalamenti (Mo. App. 1978), 566 S.W.2d 229; Daniels v. Daniels (Mo. App. 1977), 557 S.W.2d 702; Jaeger v. Jaeger (Mo. App. 1977), 547 S.W.2d 207; Conrad v. Bowers (Mo. App. 1975), 533 S.W.2d 614).) In Colorado also, when separate funds are used to purchase property held in joint names, a gift to the marital estate is presumed unless a contrary intention is manifest. In re Marriage of Killgore (Colo. App. 1975), 532 P.2d 386; In re Marriage of Moncrief (1975), 36 Colo. App. 140, 535 P.2d 1137.

We reach a different conclusion in interpreting the exchange exception of the Illinois Act. We believe that assets purchased with separate funds remain separate property, regardless of the manner of holding title and regardless of the number of post-marital exchanges. We base our conclusion on sections 503(a)(2), 503(a)(5), and 503(b) of the Act.

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Bluebook (online)
402 N.E.2d 332, 81 Ill. App. 3d 672, 37 Ill. Dec. 442, 1980 Ill. App. LEXIS 2428, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-marriage-of-preston-illappct-1980.