Marriage Of Grinius

Facts

H and W were married the same day they signed an antenuptial agreement which listed their separate assets and stated, 'all property owned by either spouse at the time of the marriage and all property coming to either spouse from whatever source during the effective term of this Agreement shall be the separate property of the respective spouse.' Neither party contests the legality of the antenuptial agreement. The agreement lapsed after 6 years. If the agreement were allowed to lapse each party shall immediately have all rights and obligations with respect to each other and with respect to property which are provided by law. The rights and obligations were to be retroactive to the date of marriage.  H resigned his job to start a restaurant. The purchase money was obtained from two sources: (1) a $20,000 downpayment from an $80,000 SBA loan guaranty and (2) $40,000 loaned by Home Federal Savings and Loan. H signed the SBA guaranty, and both signed the promissory note from California First Bank. H signed the Home Federal Savings and Loan promissory note. The SBA loan was secured by both community and separate property. H placed title to the property in his name alone. The rest of the SBA loan was used to remodel and equip the restaurant and pay living expenses. There was a checking account, and both were signators. Community earnings were placed in this same account, and from time to time, H covered overdrafts with his separate property. In 1975, H also used $30,098.00 and $39,821.93 of his separate property funds to pay on the SBA and Home Federal loans, respectively. H and W also signed a $63,000 installment note to pay the balance on the Home Federal Note. They separated in 1980. H stipulated that the restaurant was community property. The property was worth $340,000 and was determined to be H’s separate property. W appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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