Veterans' Welfare Board v. Liebhart

DRAPEAU, J. pro tem.

A California veteran of the first World War entered into a contract of purchase and sale of real property with the Veterans’ Welfare Board, under the authority of the California Veterans’ Welfare Act. The contract was dated July 26, 1923. The down payment was $119.30, and the balance of the purchase price was to be paid in 240 monthly installments of $14.97 each.

On the date of the contract the veteran was married and living with his wife. The down payment was made from

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community funds. Subsequent monthly payments were also made from community funds until the veteran and his wife separated in 1936. In 1937 there was an interlocutory decree of divorce, which awarded all community property to the wife, thereafter confirmed by a final decree in 1938. After the separation the wife made all of the monthly payments, and there is no question of default under the terms of the contract.

This action is brought by the Veterans’ Welfare Board to quiet title to the property described in the contract of sale, and for declaratory relief.

Upon the facts stated the trial court found the defendant, the former wife of the veteran, to be the sole owner of all of the right, title and interest in the contract of purchase and sale, and quieted title in her, subject to the rights of the Veterans’ Welfare Board as provided by the contract. The veteran husband did not appeal. The case comes to this court upon the appeal from the judgment of the superior court by the plaintiff, Veterans’ Welfare Board.

On appeal the plaintiff contends, as it did before the superior court: (a) that such rights as the contract granted to the veteran were a gift to him from the State of California, because of the small down payment, the long period of time to pay the balance of the purchase price in monthly installments, and the low rate of interest (5 per cent per annum) on deferred balances of the purchase price; and (b) being a gift to the veteran, the rights under the contract were his separate property, which did not vest in the wife pursuant to the terms of the divorce decree awarding the community property to her.

It needs only to state this contention to demonstrate its impossibility under our California law. Property acquired during marriage is presumed to be community property. (Civ. Code, sec. 164;