Laws v. Ross

By the Court, COLEMAN, J.:

This is an action to recover judgment in the sum of $1,012.71 against the defendants. The complaint contains two causes of action, the first being to recover the sum of $624.12 for goods, wares, and merchandise alleged to have been furnished, sold, and delivered by the plaintiff to the defendants, at their special instance and request, for which it is alleged they agreed to pay said sum. The second cause of action is to recover for labor furnished at the special instance and request of *411 the defendants, of the alleged value of $388.59, and for which, it is alleged, they promised to pay. It is also alleged that the materials and labor were for an addition to the rear of the Central Garage building in Yerington, Nevada; that said addition was constructed with the materials and labor furnished by plaintiff, and was fully completed by him and accepted by the defendants; and that no part of the indebtedness so alleged to have been contracted has been paid. An answer was filed denying all of. the allegations of the complaint.

The defendants are husband and wife, and resided for a time at Tonopah and Blair, Nevada, where they accumulated considerable money. In 1913, certain real estate in Yerington, Lyon County, Nevada, upon which there was at all times during the dealings between the parties a building known as the “Central Garage,” was conveyed to the defendant John Ross, who on January 1, 1917, deeded it to the defendant Mary Ross, in consideration of $1 and love and affection. On February 10, 1915, pursuant to negotiations theretofore conducted between plaintiff and John Ross, a lease was entered into whereby the plaintiff acquired possession of said real estate and improvements for a term of three years, in consideration of certain rentals agreed to be paid.

On the part of plaintiff it is contended, and the court found, that during the latter part of the year 1918 negotiations were entered into between the parties, whereby it was agreed that the plaintiff might erect upon said lot and at the rear end of the Central Garage, situated thereon, a shop, and that in so doing he should furnish all material and labor, with the understanding that upon his vacating the premises he was to be paid by the defendants for the actual cost of material and labor necessary in constructing such addition. At the time of the construction of the addition the plaintiff had no lease upon the premises. The addition is built of corrugated iron, and has a cement floor, with two or three pits.

*412 It is the contention of the defendants that when negotiations were opened by the plaintiff for the construction of the. addition, permission was given him to do so at his own expense; that they were never to pay for the same, but that plaintiff might remove the improvements when he vacated the premises, as'he was compelled to do about one year after the making of the improvements. He left the improvements on the premises, and now seeks to recover the amount expended in their construction. The defendant Mary Ross now claims the property as her separate estate, but this claim was put forth for the first time in presenting her evidence upon the trial.

The trial court found the allegations of the complaint to be true, that the property upon which the addition had been constructed was community property, and rendered judgment in favor of the plaintiff and against both of the defendants. An appeal has been taken by both of the defendants from the judgment and the order denying a motion for a new trial.

1. The first contention of appellants to which we will allude is that certain objections to the introduction of evidence upon the ground that the defendants were improperly joined' should have been sustained. No point was raised by a demurrer to the complaint before the answer was filed, nor is it now contended that the complaint was demurrable upon the ground of mis-joinder of parties defendant. In view of the form of the complaint, the trial court was justified in admitting evidence which, when properly connected up, might tend to establish the cause of action pleaded, and show that the defendants were properly joined. In fact, we believe that it is a well-recognized rule in this state that the husband must, in certain instances, be joined with the wife, even though there be no liability on the part of the husband; but, in any event, in view of the facts and circumstances disclosed by the record, the court was justified in allowing the widest latitude in the presentation of evidence, as the question of the liability of *413 Mrs. Ross might have.turned upon the authority of JohnRoss to bind her.

2. Error is assigned to the adverse ruling of the court upon objections made during the trial to testimony tending to show that the indebtedness in question was incurred in connection with the construction of the addition to the Central Garage building. The objections were upon the ground that the complaint does not allege ownership of the property. No error was committed by the rulings of the court. Such an allegation was not essential to the complaint. Individuals may, and frequently do, become liable for improvements upon property to which they have no title whatsoever. If they contract an indebtedness, they cannot escape liability simply because it develops that they have no title to the realty concerning which they incurred the liability. The question for determination by the court was: Did the defendants contract the liability?

3. Several errors are assigned to the ruling upon objections to the admission of evidence as to the existence of the relationship of landlord and tenant between the parties. All of these assignments are utterly devoid of merit. While it was not necessary to allege the existence of this relationship, the proof of its existence tends to corroborate the testimony of the plaintiff, and is material. We take it that it was upon this theory the court admitted the evidence; but, no matter what reason may have moved the court, the evidence was competent. Counsel for appellants was supertechnical in his objections to the testimony offered in behalf of plaintiff. In view of the relationship existing between the defendants, and their contentions, and of the case with which fraud may be perpetrated by husband and wife in dealing between themselves with property acquired as was this, and of the facts of the particular case, it was the duty of the court to allow a wide range in the presentation of plaintiff’s case and in inquiring into the true facts as to the ownership of the property. It does not appear that the court abused its discretion.

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4. It is also contended that the court erred in receiving in evidence an option from defendant John Ross to E. A. Dillon, covering the property in question, and a deed from John Ross and wife (the defendants) conveying said property to Dillon, and in refusing to strike the same from the record. These • instruments were executed about a year after the improvements had been put upon the property. We think the giving of the option by John Ross, and his receiving a consideration therefor, followed by the joint deed of the defendants, was competent evidence for the court to consider, along with all the other evidence, in arriving at the truth as to whether or not the property in question was community property or the separate property of Mary Ross, which was the point upon which the case centered; for, if it was community property, it followed that the case, so far as the plaintiff was concerned, was very much simplified, since, if it was the separate property of the wife, it would become necessary to prove either that John Ross was the agent of Mary Ross in contracting the indebtedness, or that she had ratified his act in contracting the same. Of course, in either event, it was necessary for the plaintiff to maintain his theory of the case as to the contract for the furnishing of the materials and labor.

We come now to the contention. of the defendant Mary Ross that the evidence does not justify the findings that the property is community property. The defendants testified that, while residing in Tonopah and Blair, through speculation in stocks, a considerable sum of money was made up to a certain time. It is also testified to that the tide turned and that John Ross was losing money, which moved Mrs. Ross to suggest a division of the remaining funds which had been accumulated. The testimony also shows that the money was, in 1906, “divided” between the defendants, John Ross depositing that over which he thus acquired control in a bank which failed, and Mrs. Ross keeping that over *415 which she acquired control in the “company’s officé.” They testified also that the money which went into the purchasing of the property in question in 1918 was a part of that over which Mrs. Ross had assumed control in 1906, and that the conveyance to her in 1917 was a mere transfer of that which was already a part of her separate estate.

5, 6. Assuming that the defendants were capable in 1906 of transmuting the community earnings into separate property, let us consider whether the evidence is such as to justify a reversal of the judgment, which was based upon the finding that there was no such transmutation; for, while the court made no specific finding upon this point, under our practice, no request having been made for specific findings, we must conclude that the court did in fact so find. Moore v. Rochester M. Co., 42 Nev. 179 , 174 Pac. 1017 . The evidence as to what was done by the defendants is very meager, and goes no further than to show that the accumulations were “divided” in 1906, that John Ross deposited the portion which he took in a bank which failed, and that Mrs. Ross kept the portion which she took in the “company’s office.” There is no evidence whatsoever as to the understanding which was had between the parties as to their respective rights and claims upon the money divided. It is not even contended that it was agreed at the time that the money over which the respective defendants were to exercise control was to be their separate property; nor, so far as appears, did any one ever hear of a claim made by Mrs. Ross that the property in question was her separate property during all the times that it stood in the name of John Ross, during which period he not only appeared of record to be the owner of it, but dealt with it as such. We believe that no other safe rule can be laid down than that property or money once a part of the community will be presumed, as against creditors, to remain such until shown by clear, certain, and convincing proof to have been transmuted *416 into separate property. In the case of Lake v. Bender, 18 Nev. 361 , 4 Pac. 711 , 7 Pac. 74 , this court held that, to establish a gift from one spouse to another of any interest in a community estate, so as to stamp it as a part of the donee’s separate estate, “convincing proof is required.” Chief Justice Hawley, in an opinion filed in the case mentioned, quoted approvingly as follows from Meyer v. Kinzer, 12 Cal. 252 , 73 Am. Dec. 538 :

“The presumption, therefore, attending the possession of property by either, is that it belongs to the community ; exceptions to the rule must be proved. * * * This invariable presumption which attends the possession of property by either spouse during the existence of the community can only be overcome by clear and certain proof. * * * ”

And in the Estate of Warner, 167 Cal. 688 , 140 Pac. 584 , the court said:

“It is undoubtedly true that the presumption which attends the possession of property by either spouse may only be overcome by clear and certain proof that it is really separate property.”

7. Can we say, in view of the circumstances, that there was such “clear and certain” or “convincing” proof that it was the intention of the defendants in 1906 to transmute community into separate property ? The trial court held that there was not, and we think it was justified in its conclusion.

8. The only remaining question is as to whether or not the indebtedness was contracted as alleged. The evidence is conflicting, and the case of the plaintiff as to the terms of the agreement rests upon his testimony alone and corroborating circumstances. The defendant John Ross, with whom all negotiations are alleged to have been had, flatly contradicts the testimony of the plaintiff. The court heard the testimony, observed the witnesses upon the stand, and was in a position to best determine who told the truth. Furthermore, there are several circumstances in the case tending to corroborate the testimony of the plaintiff, such as his putting *417 in a concrete floor with pits, though having no lease, which floor he could not remove. Upon the whole, we think the court was justified in its finding and judgment against defendant John Ross.

9,10. It is said that the wife is an improper party in all suits affecting the community property, or relating to rights and liabilities growing out of dealings in connection therewith. This contention is correct; but, in view of the position taken by the defendants all through the case, and now insisted upon, that the property in question is the separate property of the wife, no court could say that Mrs. Ross is not a proper party until all of the evidence is heard and the question of the character of the estate held by the respective defendants is finally determined; for, if the court should find the property to be the separate property of Mrs. Ross, she might be liable, if the agency of her husband to contract the indebtedness is shown, and, if not shown, if it be established that she ratified his action in entering into the agreement pleaded. The trial court having ultimately found that the property in question was community property, it follows that no judgment should have been entered against Mrs. Ross (Ballinger on Community Property, sec. 176); but the judgment against John Ross should not be set aside for that reason. Pursuant to section 5066 of the Revised Laws, it is our duty to disregard any error or defect which does not affect the substantial rights of the parties, or either of them. Hence it is our duty to affirm the judgment as to the defendant John Ross, and to modify it as to Mary Ross. 21 Cyc. 1553, note 47.

While we have not considered separately each of the errors assigned, what we have said disposes of all of them.

It appears that the proceeds from the sale of the property in question to Dillon were deposited in bank in the name of the defendant Mary Ross, and that the bank was garnisheed in this proceeding. We are not 'called upon to determine whether the money which was *418 so deposited is the property of John Ross and subject to the garnishment proceedings against him.

It is ordered that the judgment appealed from be modified so as to vacate and set aside the judgment against Mary Ross, and that the proceeding be dismissed as to her, and that the judgment against John Ross be affirmed; the respondent to recover against John Ross his costs on this appeal.