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In Re Marriage of Emken

OPINION FILED OCTOBER 21, 1980.

IN RE MARRIAGE OF RUTH ISABELL EMKEN, PETITIONER-APPELLANT, AND HENRY EDWARD EMKEN, RESPONDENT-APPELLEE.


APPEAL from the Circuit Court of Peoria County; the Hon. WILLIAM J. REARDON, Judge, presiding.

MR. JUSTICE STENGEL DELIVERED THE OPINION OF THE COURT:

This appeal is from a judgment of the Circuit Court of Peoria County dividing the property of the parties and denying maintenance to the wife following a dissolution of marriage.

Ruth Isabell Emken married Henry Edward Emken in 1966 when she was 44 years old and he was 45 years old. At the time of the marriage, both were widowed; both had children who were fully emancipated; the wife owned a 100-acre farm, subject to a mortgage of $13,000; and the husband had one-half fee interest in a 120-acre farm and a life estate in the other one-half interest. After nearly 12 years of marriage, the wife left the husband, and in November of 1977, she filed a petition for dissolution of the marriage. Dissolution was granted, and after a separate hearing, the court found in favor of the husband's averments as to what was marital property and what was not, and then ordered the husband to pay the wife $10,890.37 to equalize the marital property in the possession of each. The court also denied the wife's claims for maintenance and for attorney's fees, and this appeal followed.

The wife's first contention is that the husband should not have been allowed to claim as non-marital property the sum of $14,257.72 which he had transferred from his sole name into a joint checking account at the time of the marriage. During the marriage this joint account was used to pay household bills and the operating expenses of the husband's farm. Although the wife sometimes wrote the checks, all deposits to this account were from funds of the husband. The account balance fluctuated from $1,000 to $19,000 during the marriage. According to the husband's testimony, about $8,000 of the money originally deposited in the joint account was used to purchase a new combine. The wife testified that she withdrew $8,258.57 from this joint account when she left him, and she stated that the income from her farm and her investments went into separate accounts in her name alone.

The wife cites the case of Klingberg v. Klingberg (1979), 68 Ill. App.3d 513, 386 N.E.2d 517, where, both the husband and wife having contributed money to a joint account, the trial court refused to return to the wife $1,500 of premarital funds she had deposited. The reviewing court affirmed and adopted the "transmutation" theory that the failure to segregate non-marital property by commingling it with marital property indicated an intent to treat the non-marital property as part of the marital estate. The court said, "Absent evidence to the contrary, as here, treating non-marital property in this manner will result in its transmutation to marital property." (68 Ill. App.3d 513, 517, 386 N.E.2d 517, 520.) Thus, in Klingberg the court utilized the transmutation theory to preserve the presumption of gift which had been a part of Illinois law prior to the enactment of the Illinois Marriage and Dissolution of Marriage Act. (Ill. Rev. Stat. 1979, ch. 40, par. 101 et seq.) See In re Marriage of Atkinson (1980), 82 Ill. App.3d 617, 402 N.E.2d 831; In re Marriage of Amato (1980), 80 Ill. App.3d 395, 399 N.E.2d 1018.

Other districts of the appellate court have taken a different view of such situations. In the case of In re Marriage of Dietz (1979), 76 Ill. App.3d 1029, 395 N.E.2d 762, the court cited section 503(a)(2) of the new act, which provides that property acquired in exchange for non-marital property is also non-marital property, as abolishing the prior presumption of gift when one spouse's property is transferred into joint ownership. The same view was expressed in In re Marriage of Key (1979), 71 Ill. App.3d 722, 723, 389 N.E.2d 963, 964, where the court said:

"We conclude that where, as here, identifiable, non-marital assets, whether in the form of cash or tangible property, have been exchanged for jointly held property, the parties, upon dissolution of marriage are entitled to a refund of their original contribution * * *."

Additional support for this conclusion is to be found in section 503(b) of the act, which provides:

"All property acquired by either spouse after the marriage and before a judgment of dissolution of marriage or declaration of invalidity of marriage is presumed to be marital property, regardless of whether title is held individually or by the spouses in some form of co-ownership such as joint tenancy, tenancy in common, tenancy by the entirety, or community property." (Emphasis added.) (Ill. Rev. Stat. 1979, ch. 40, par. 503(b).)

If the manner of holding title is of no consequence in applying the marital property presumption to property acquired during marriage, then the manner of holding title would similarly have no bearing in determining the status of property acquired in exchange for non-marital property. "Otherwise, the presumption of marital property under section 503(b) would engulf and render largely meaningless the exception in 503(a)(2) by limiting the exchange exception to separate property which the owner retains in its original form, a patent contradiction in terms." In re Marriage of Preston (1980), 81 Ill. App.3d 672, 676, 402 N.E.2d 332, 336.

• 1 Section 503(c)(1) requires the trial court to divide the marital property in just proportions, considering as one of the relevant factors, "the contribution or dissipation of each party in the acquisition * * * of the marital and non-marital property * * *." The trial court in the case at bar did exactly that when it allowed the husband to claim $14,257.72 as non-marital property. That was the sum of two bank accounts which were his non-marital property at the time of the marriage. The evidence indicated that he used about $8,000 of that money to acquire a combine for his farm and that the wife took more than $8,250 from the joint account when they separated. The latter amount might be considered to come within the classification of "dissipation" as used in the statute. We also think it noteworthy that this account was used for the income and expenses connected with the husband's farm operation. Each party's farm business was a separate non-marital asset, which is a significant factor to consider when trying to ascertain the intention of the parties. (See Justice Barry's majority opinion, In re Marriage of Crouch (1980), 88 Ill. App.3d 426, 410 N.E.2d 580.) Consequently we hold that the trial court's ruling which allowed the husband to reclaim his original contribution to the joint checking account was not contrary to the manifest weight of the evidence.

• 2 The wife next asserts as error the trial court's allowance to the husband of $18,253.57 representing certain farm equipment and 3,000 bushels of corn valued as of the date of marriage. She argues that the husband failed to meet his burden of showing this property to be non-marital and that he failed to show that he did not dissipate the value of the equipment or the proceeds from the sale of the corn. We do not agree that the husband had the burden of establishing the non-marital character of this farm property. The statute provides that property acquired during marriage, is presumed to be marital property (section 503(b)) and that property acquired before marriage is non-marital property. Thus the presumption does not enter into the determination of whether the husband's farm equipment and grain acquired before marriage are non-marital property; they clearly are. The wife does not deny that the items in question were owned by the husband before marriage and were connected with his farm business. In the absence of any evidence that the husband intended this property to become marital property after the marriage, the trial court quite correctly found that the husband was entitled to a credit for $18,253.57 non-marital property acquired before the marriage.

• 3 The wife's third contention is that the trial court improperly valued certain investments acquired by the husband during marriage in that allowances were made for early withdrawal penalties and for income tax liability. The wife argues that such expenses are speculative since the husband has no plans to cash in these investments, but we think it clear that the present market value of these investments should be reduced by the expenses and liabilities which would be incurred when selling them. The trial court did not err in so ruling.

• 4 Finally, the wife claims that the trial court abused its discretion in refusing to award her maintenance because, among other things, she has no skills and she had helped the husband accumulate his assets for 12 years. In its opinion, the trial court denied her request for maintenance with a finding that she had sufficient means and income to support herself. The court took into consideration the length of the marriage, the fact that she has only herself to support, her present employment, the extent of her non-marital property, and her aliquot share of the marital property in making its decision. Since we should not substitute our judgment for that ...


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