Laughlin v. Laughlin , 49 N.M. 20 ( 1944 )

On Motion for Rehearing. All issues decided by the district court were sufficiently supported by facts and authority except those involving the question of whether an equitable lien in favor of appellant should have been impressed upon the appellee's farm called "Fair Oaks", to secure his part of funds admittedly expended by the community to discharge appellee's separate mortgage debts.

We refused to order a new trial because there was no evidence in the record from which the trial court could determine either the rental value of the farm in question or the value of the labor, skill and industry of the spouses in farming the land; and no finding of fact made would support a decree impressing such lien.

Appellant asserts that if the trial court had not erroneously excluded from the evidence an audit prepared from the books, checks and other documents kept and made, reflecting such operations, the evidence would have disclosed these necessary facts. We have carefully examined the audit, and find that it discloses the amount obtained from the proceeds of crops for the years 1921 to 1939, inclusive, but does not (and probably could not) disclose the amount thereof belonging to the appellee as rental value of the farm and the amount earned by the labor, skill and industry of the spouses. The audit should have been admitted as evidence. It tended to prove the income derived from the farming operations; but with it, the appellant failed to make a case. If the equities in favor of appellant would justify the disposition of the case proposed by Mr. Justice Bickley in his separate opinion we would follow that disposition of the case. But upon examination of the whole record, it seems evident that a new trial would not change the result.

A proceeding to impress such lien is purely equitable and equitable principles apply. Now the evidence of both appellant and appellee, together with the tendered audit, show that the community received all of the proceeds of the farming operations from 1921 to 1939 (except the sum of $10,040.58 paid to settle appellee's mortgage notes), amounting to many thousands of dollars. This included appellee's separate funds, to be measured by the rental value of the farm. If the community is entitled to receive any remuneration for the payment of the mortgage debts, the community must do equity and give appellee credit for her funds which appellant commingled with the community funds for eighteen years. If the amount of the rental value of this property can be ascertained for the years in which the proceeds of the crops were applied to the payment of the mortgage debt, it no doubt could be ascertained for the subsequent years in which appellee's farm was rented to a third person, and during which she was entitled to all the proceeds. This rental value could be set off against any claim appellant might have for his part of the community funds paid to settle appellee's separate mortgage debts. We were so well satisfied that the community has been much overpaid and that the trial court would so hold, that we were of the opinion originally that it would be futile to send this case back for a new trial on this question, and the appellant's brief on rehearing has not convinced us that our original conclusion was not correct. According to the testimony of appellant, he had complete control of the proceeds of the farming operations during all these years and deposited all to the community. He should have kept appellee's funds separate from the community funds. The fact that such commingling constituted the whole fund community property does not affect the case. The community, we are satisfied, was enriched by many thousands of dollars of appellee's separate funds, of which appellant claimed half interest.

Under these facts the appellant should be required to do equity. Appellee would at least be entitled to set off against any claim appellant has for community funds used in paying the mortgage debts an equal amount of her separate funds turned over by appellant (who had control of them) to the community. White v. White, 26 Cal. App. 2d 524, 79 P.2d 759.

In an exceptional case we reluctantly exercised our inherent powers to protect fundamental rights, and to that end departed from the rules of practice binding on the parties, Gonzales v. Rivera, 37 N.M. 562, 25 P.2d 802; but this case calls for no such exercise of power.

The motion for a rehearing should be overruled. It is so ordered.

SADLER, C.J., and MABRY, J., concur.

LUJAN, J., did not participate.