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Property acquired by purchase during a marriage is presumed to be community property, and the burden is on the spouse asserting its separate character to overcome the presumption. The community property presumption applies when a husband purchases property during the marriage with funds from an undisclosed or disputed source, such as an account or fund in which he has commingled his separate funds with community funds. One may trace the source of the property to his separate funds and overcome the community property presumption with evidence that community expenses exceeded community income at the time of acquisition. If he proves that at that time all community income was exhausted by family expenses, he establishes that the property was purchased with separate funds.
The parties were married on October 17, 1941, and they separated about May 10, 1962. Throughout the marriage they were residents of California, and Plaintiff Laurance A. See was employed by a family-controlled corporation, See's Candies, Inc. For most of that period he also served as president of its wholly-owned subsidiary, See's Candy Shops, Inc. In the twenty-one years of the marriage he received more than $ 1,000,000 in salaries from the two corporations. Laurance and cross-complainant Elizabeth Lee See appealed from an interlocutory judgment that granted each a divorce. Laurance attacked the finding that he was guilty of extreme cruelty, the granting of a divorce to Elizabeth, and the award to her of permanent alimony of $ 5,400 per month. Elizabeth attacked the finding that there was no community property at the time of the divorce. Neither party contested the provisions regarding custody and support of the three minor children.
Was the trial court correct in its determination that there was no community property at the time of the divorce?
The court found that Laurance had not met his burden of proving an excess of community expenses over community income at the times the other assets purchased during the marriage were acquired and reversed the part of the judgment finding them to be his separate property because property acquired during marriage was presumed community. The court found that Laurance’s commingling of property left him with the burden of proving property character.