Kershman v. Kershman

FOX, P. J.

This is an appeal by defendant Philip Kershman from an interlocutory judgment of divorce. He does not complain of that segment of the judgment granting plaintiff, Sadie Kershman, the divorce, but only of that part which determines that certain real property and securities are the separate property of plaintiff.

The parties are described in both briefs as mature persons. They were married December 24, 1950, and separated October 24, 1958. At the time of the marriage, plaintiff owned a piece of improved real property in Los Angeles known as 1630 North Genessee Street, where the parties made their home. Plaintiff also owned, at the time of the marriage, shares of stock in numerous corporations. It is these assets in which defendant claims to have acquired a community property interest during the course of the marriage.

We will first consider the securities. At all times they stood in the former married name of plaintiff. From the only testimony available it appears that all purchases during marriage were made from the proceeds of the sale of other of plaintiff’s stock, from dividends thereon, or from loans for which plaintiff’s stocks were pledged as security. We are cited to no evidence demonstrating that community funds were invested in securities. It is axiomatic that the proceeds of the separate property of the wife are her separate property (Civ. Code, § 162), and the same is true with respect to the enhancement in value of separate property that takes place as a result of an enhancement of values generally. (See

McDuff

v.

McDuff,

48 Cal.App. 175 [191 P. 957];

Gump

v.

Commissioner of Internal Revenue,

124 F.2d 540.)

[21]

Defendant argues that part of the proceeds of the stock investments and a portion of their enhanced value are due to the personal skill and effort of plaintiff in choosing investments and analyzing the stock market. He asserts that much time was spent by plaintiff in this regard, and that this community effort should have been reflected in the judgment of the trial court. But the only testimony on the subject indicates that plaintiff actually spent very little time in the management of her securities. She testified that she read the Wall Street Journal for a half hour almost every day; that she did not have daily transactions; that once a year she would call her broker who would tell her what to buy; in 1953 she made no purchases; in 1954 she spent about two hours buying stocks; and in 1958 her broker told her to switch to Corn Products. Thus it is apparent, from the only evidence available, that plaintiff spent very little time in the management of her securities. To the extent that her skill and effort can be said to have contributed to the enhanced value of the securities, the amount of that contribution would be so small compared to the factors of income and natural appreciation that it is not worthy of consideration. When the community factor in commingled separate and community property is inconsiderable in amount compared with the separate property contribution, then the whole will be treated as separate property. (See