George T. Wilson and H. Verlan Anderson, of Phoenix, for appellant.
Lewis, Roca & Scoville, of Phoenix, for appellee.
De Concini, Justice. Udall, C. J., and Stanford, Phelps and La Prade, JJ., concur.
De Concini, Justice.
[73 Ariz. 424] Appellant wife, hereinafter referred to as defendant and plaintiff husband, appellee herein, were married on September 2, 1942 in Phoenix, Arizona. They lived as husband and wife until September 1945, when plaintiff left his wife. Plaintiff was granted a divorce from defendant in 1948. There were no children born of this marriage. The lower court made a division of the community property, granted the defendant alimony, and ordered plaintiff to pay defendant's attorneys' fees and other debts incurred by the defendant to the date of the decree.
Defendant appeals from that portion of the judgment which divides the community property and also that the alimony and attorney fees granted her were insufficient.
Plaintiff prior to the marriage was engaged in a partnership with his father in the Guthrie Mattress Company, in which he owned a one-third interest. Defendant was before her marriage a beautician and maintained her business establishment in her home. Subsequent to their marriage she discontinued work and has since lived as a housewife.
The trial court found that from the date of their marriage to the trial of the case, the plaintiff had withdrawn $ 36,197.50 as his share of the income and profits of the [73 Ariz. 425] business, and that $ 20,863.98 of that amount had been withdrawn by him since the separation of the parties in September 1945. In making a division of the community property, the court found that the only community property of the parties consisted of withdrawals made by the plaintiff from the business after separation of the parties in September 1945. The court found the sum of those withdrawals to be $ 20,863.98 and allocated one-half of that sum to the defendant in settlement of her property interests and then deducted from that amount $ 5,299 which was support money that the plaintiff had given defendant during that period. The court also deducted one-half of the community debts existing at the date of trial but ordered plaintiff to pay those debts in full. The court did not consider any increased value of the partnership assets as community property.
The defendant assigns nine errors, seven of which can best be expressed by one proposition of law, to wit: "Where either spouse is engaged in a business whose capital is the separate property of such spouse, the profits and income of the business are either community or separate in accordance with whether they are the result of individual toil and application of the spouse or the inherent quality of the business."
This problem has come before the court on numerous occasions and we have a body of case law on this point. Porter v. Porter, 67 Ariz. 273, 195 P.2d 132; Rundle v. Winters, 38 Ariz. 239, 298 P. 929; In re Torrey's Estate, 54 Ariz. 369, 95 P.2d 990; Lawson v. Ridgeway, 72 Ariz. 253, 233 P.2d 459.
The defendant asks this court to declare as community property the net capital increase of plaintiff's one-third interest in the Guthrie Mattress Company based on decisions of the above cited cases. If defendant's contention is correct, then the net capital increase of the one-third interest is community property and defendant is entitled to one-half ...