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Law School Case Brief

Harper v. Harper - 294 Md. 54, 448 A.2d 916 (1982)

Rule:

Under the Maryland Property Disposition in Divorce and Annulment Act, Md. Code Ann., Cts. & Jud. Proc. § 3-6A-01 et seq., the appropriate analysis to be applied is the source of funds theory. Under that theory, when property is acquired by an expenditure of both nonmarital and marital property, the property is characterized as part nonmarital and part marital. Thus, a spouse contributing nonmarital property is entitled to an interest in the property in the ratio of the nonmarital investment to the total nonmarital and marital investment in the property. The remaining property is characterized as marital property and its value is subject to equitable distribution. Thus, the spouse who contributed nonmarital funds, and the marital unit that contributed marital funds each receive a proportionate and fair return on their investment.

Facts:

In 1950, petitioner Sylvester Harper, then unmarried, purchased an unimproved parcel of real property for a purchase price of approximately $355. Before his marriage, Sylvester made all of the payments that came due. On November 1951, Sylvester married respondent Amaryllis Harper. During the marriage, Sylvester continued to make all of the payments that came due until all of the requisite payments had been made. In 1967, Sylvester personally built a house, costing approximately $21,600, upon the real property. Sylvester and Amaryllis used the house as their marital residence. Although Amaryllis' name appeared on the mortgage and she was legally obligated under it, Sylvester made all of the mortgage payments that came due on the marital residence. Additionally, Sylvester paid for all of the expenses associated with the upkeep and repair of the marital residence. In 1980, Amaryllis filed a bill of complaint for an absolute divorce, requesting, among other things, that the court determine the ownership of all the real property, regardless of how titled, and order the sale of said real property, and divide the proceeds equitably. Subsequently, the trial court ordered a decree granting the absolute divorce, and declaring the property in question as marital property. The trial court ordered the sale of the property in lieu of partition with each party receiving one-half of the proceeds of the sale. The Court of Special appeals also found the property as marital property. Sylvester challenged the decision.

Issue:

Was the property in question marital property, which could be sold, and the proceeds thereof be subdivided equally?

Answer:

No.

Conclusion:

The Supreme Court of Maryland held that there was no legislative preference for the classification of property as marital property. The Court averred that under the Maryland Property Disposition in Divorce and Annulment Act, Md. Code Ann., Cts. & Jud. Proc. § 3-6A-01 et seq., the appropriate analysis to be applied was the source of funds theory. According to the Court, the term "acquired" in Md. Code Ann., Cts. & Jud. Proc. § 3-6A-01(e) meant the on-going process of making payment for property. The Court held that the characterization of property as non-marital or marital depended upon the source of each contribution as payments were made, rather than the time at which legal or equitable title to or possession of the property was obtained. Hence, the Court remanded the case to the trial court to determine the source of the funds contributed to the property and then the extent to which the property was non-marital.

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