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In Re Marriage of Komnick

OPINION FILED JANUARY 20, 1981.

IN RE MARRIAGE OF MYRA Z. KOMNICK, APPELLEE, AND LOREN J. KOMNICK, APPELLANT.


Appeal from the Appellate Court for the Fourth District; heard in that court on appeal from the Circuit Court of McLean County, the Hon. Wayne C. Townley, Jr., Judge, presiding.

MR. JUSTICE WARD DELIVERED THE OPINION OF THE COURT:

Rehearing denied March 27, 1981.

After 30 years of marriage, Myra Komnick, on October 21, 1977, filed a petition in the circuit court of McLean County for dissolution of marriage or, in the alternative, for legal separation from Loren Komnick. The court ordered dissolution of the marriage on April 6, 1978. After a hearing on the distribution of property and maintenance, the court ordered that the petitioner, with conditions not relevant here, be given use for life of the marital home, which is held in joint tenancy by the respondent and his mother. She was also given a one-half ownership interest in a life insurance policy in which the respondent was the assured. He was directed to retain her as the beneficiary and was ordered to pay $400 per month in periodic maintenance. In order to satisfy outstanding debts, the parties were also directed to sell a duplex owned by them in joint tenancy and to divide evenly whatever surplus remained.

The circuit court held that a 194-acre tract of farmland, in which the husband possessed an undivided one-half interest in fee simple subject to a life estate in his mother, was non-marital property and therefore would be his separate property after dissolution of the marriage. This land had been devised to the respondent in 1965. The petitioner did not claim that the tract itself was marital property, but she argued unsuccessfully that its appreciation in value between the date it was acquired by the respondent in 1965 and the date of dissolution in 1978 should be considered marital property and accordingly subject to equitable distribution.

The petitioner appealed to the appellate court from that portion of the court's order which held that the tract's appreciated value was non-marital property. The respondent cross-appealed from the order as to maintenance, use of the marital home, and the assignment to the petitioner of the one-half interest in the insurance policy. The appellate court reversed the judgment of the circuit court, holding that the appreciation in value of the 194 acres was to be considered marital property under section 503 of the Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1977, ch. 40, par. 503) and therefore distributable in just proportions to each party (78 Ill. App.3d 599). The court did not address the issues presented in the cross-appeal, saying that these questions might become moot when the trial court, upon remandment, altered its order of distribution of the marital property. We granted the respondent's petition for leave to appeal. 73 Ill.2d R. 315.

Between 1956 and 1965, the respondent, his father and uncle worked the 194-acre farm (which the uncle owned), equally dividing the profits. As stated, in 1965 at the death of his uncle, the respondent was devised an undivided one-half fee-simple interest in the farm, subject to a life estate in his mother. He continued to farm the land from 1966 to 1973 under an arrangement by which he received a one-third share and his mother a two-thirds share in the profits. In 1973 the respondent discontinued farming and a tenant operated the farm. The profits, less the tenant's share, were divided evenly between the respondent and his mother.

It was stipulated that in 1965, when the respondent inherited his interest, the farm was valued at $800 per acre. In May of 1979, at the property hearing following the dissolution order, it was agreed that the value per acre was $3,700, which indicated an increase of $511,373 in value for the total acreage. The parties also stipulated that this appreciation was substantially attributable to external economic factors and not to any capital improvements made upon the land. There is no contention that the petitioner contributed to the appreciation in value. The only question for us is whether this appreciation in value of property, which under our act was non-marital property though acquired during marriage, is to be considered marital property.

Non-marital and marital property are to be distributed by the court upon the dissolution of marriage under section 503 of the Illinois Marriage and Dissolution of Marriage Act. (Ill. Rev. Stat. 1977, ch. 40, par. 503.) Under this section all property acquired after marriage is presumed to be marital (Ill. Rev. Stat. 1977, ch. 40, par. 503(b)) and therefore subject to apportionment unless it is one of the six exceptions declared in section 503(a) to be non-marital property. This section provides:

"(a) For purposes of this Act, marital property means all property acquired by either spouse subsequent to the marriage, except the following, which is known as non-marital property:

(1) property acquired by gift, bequest, devise or descent;

(2) property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, bequest, devise or descent;

(3) property acquired by a spouse after a judgment of legal separation;

(4) property excluded by valid agreement of the parties;

(5) the increase in value of property acquired before ...


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