# Estep v. Estep > Supreme Court of Pennsylvania · October 1, 1984 · 326 Pa. Super. 404 URL: https://www.frixlaw.com/law-library/cases/9754632 ## Case - **Full name:** Paul G. ESTEP, Appellant, v. Thelma R. (Sharp) ESTEP - **Court:** Supreme Court of Pennsylvania - **Decided:** October 1, 1984 - **Citations:** 326 Pa. Super. 404; 474 A.2d 302 - **Precedential status:** Published - **Opinion:** Concurring in part by Hester - **Judges:** Cercone, Spaeth, Hester - **Cited by:** 17 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9754632 ## Opinion text HESTER, Judge, concurring and dissenting: Additional facts, excluded by the majority, may facilitate a more complete understanding of the matter. At the time of trial, appellant was 65 years of age and appellee was 59 years of age. They were married on July 2, 1978, following seven months of cohabitation. No children were born of the marriage, and both parties were married once before. Appellant received $342.00 per month in social security benefits and an average monthly compensation of $400.00 from his part-time employment as a carpenter. But for restrictive health problems, appellant had a much higher earning capacity as a carpenter. Appellee was receiving $323.00 per month in social security benefits and $303.57 per month as a disability pension from Equitable Life Insurance Company. Prior to suffering a heart attack in September, 1979, appellee was earning $1,000.00 per month. The master identified the following marital property subjected to equitable distribution: 1. a stock fund with Merrill, Lynch, Pierce, Fenner & Smith in the amount of $6,000.00; 2. a savings account with Franklin Federal Savings & Loan Association in the amount of $590.00; 3. a checking account with Union National Bank in the amount of $100.00; 4. a safe deposit box containing $3,800.00; 5. A Bolens riding lawn mower without an estimated value; *419 6. a second-hand refrigerator without an estimated value; 7. a living room round table purchased for $25.00; 8. a picnic table purchased for $30.00; 9. a bedroom suite without an estimated value; 10. residential real estate situate at Irwin, Pennsylvania, constructed by the parties themselves with the assistance of a bricklayer, electrician and plasterer at a cost of $33,000.00, and having a fair market value of $55,000.00. First, appellant challenges the equal interests in the marital residence assigned by the master. In 1977, appellant purchased the lot upon which the parties eventually constructed their house. The thirty-three-thousand-dollar cost for the unimproved land, materials and labor in constructing the house was provided by a nine-thousand-dollar mortgage loan from Union National Bank, $8,000.00 from appellee, $6,000.00 from appellant’s mother and $10,000.00 from appellant. Appellant emphasizes the fact that he paid $3,750.00 for the unimproved lot prior to the marriage and that his premarital earnings were the source of the entire purchase price. Secondly, he points out that he worked full-time from March, 1978 through September, 1978 constructing the house, and that the house was 80% completed on the marriage date of July 7, 1978. Appellant concludes that his contributions to the house were substantially greater than appellee’s, thereby warranting an award to him in excess of 50% of the parties’ equitable interest in the fair market value of the house. Section 401(e) of the Divorce Code defines “marital property”: (e) For purposes of this chapter only, “marital property” means all property acquired by either party during the marriage except: *420 (1) Property acquired in exchange for property acquired prior to the marriage except for the increase in value during the marriage. (2) Property excluded by valid agreement of the parties entered into before, during or after the marriage. (3) Property acquired by gift, bequest, devise or descent except for the increase in value during the marriage. (4) Property acquired after separation until the date of divorce, provided however, if the parties separate and reconcile, all property acquired subsequent to the final separation until their divorce. (5) Property which a party has sold, granted, conveyed or otherwise disposed of in good faith and for value prior to the time proceedings for the divorce are commenced. (6) Veterans’ benefits exempt from attachment, levy or seizure pursuant to the act of September 2, 1958, Public Law 85-857, 72 Statute 1229, as amended, except for those benefits received by a veteran where such veteran has waived a portion of his military retirement pay in order to receive Veteran’s Compensation. (7) Property to the extent to which such property has been mortgaged or otherwise encumbered in good faith for value, prior to the time proceedings for the divorce are commenced. 23 Pa.C.S. § 401(e). The real estate here was purchased prior to the marriage in an unimproved condition and with funds fully provided by appellant. Although the parties were not married on the date of purchase in 1977, both names were placed upon the deed as purchasers. Since the property was acquired prior to marriage, we are presented with the issue of whether its entire fair market value is subjected to equitable distribution, whether the entire value is excluded or whether only that amount reflecting the increase in value from the date of marriage is marital property. This is a novel issue for *421 our appellate courts insofar as the parties began cohabitating around the time the unimproved real estate was purchased and for seven months thereafter, until their marriage on July 7, 1978. The increase in value of separate property following the date of marriage has been widely viewed as marital property particularly where the increase resulted from the joint contributions and efforts of the parties. In Re Marriage of Johnson, 28 Wash.App. 574 , 625 P.2d 720 (1981); Mol v. Mol, 147 N.J.Super. 5 , 370 A.2d 509 (1977). I am convinced that this is at least the case before us. The parties moved into the residence immediately following their marriage even though the residence was only 80% complete. For the next two months, during which construction continued, appellant devoted his full time to construction work while appellee remained employed and solely defrayed the expenses of utilities, household sundries, real estate taxes and the mortgage loan. Appellee also performed the daily housekeeping chores without assistance from appellant. Although it is not readily determinable whether the entire value of an asset jointly purchased by both parties before marriage and retained following the marriage constitutes marital property, I am of the opinion that it does so qualify here. Section 401(e) defines marital property as “property acquired by either party during the marriage ...” I do not construe this definition as all-inclusive; therefore, it does not preclude me from finding the full value of property acquired prior to marriage to qualify, under certain circumstances, as marital property. It is particularly noteworthy that both parties’ names were placed on the deed to the real estate when it was purchased in 1977. Although appellant used $3,750.00 of his funds to purchase the lot and spent nearly four months prior to the marriage constructing a large portion of the house, appellee also made significant contributions. For seven months prior to the marriage, the parties lived together as husband and wife. During that time, appellee was employed and performed the same duties alluded to above, namely, housekeeping chores and paying *422 the expenses of maintaining their apartment. It is clear that the purchase of the lot in joint names, the cohabitation and the duties performed by both parties were done in contemplation of marriage. Under these circumstances, then, the entire value of the real estate was marital property and the Order directing an equal distribution of the equity therein was not an abuse of discretion. Bacchetta v. Bacchetta, 498 Pa. 227 , 445 A.2d 1194 (1982). It is also appellant’s contention that the six-thousand-dollar stock fund with Merrill, Lynch, Pierce, Fenner & Smith was not marital property due to the alleged fact that the full investment was from his pre-marital funds. Specifically, appellant maintains that $2,500.00 in the stock fund originated from proceeds realized by him on the sale of real estate prior to the marriage. The remaining $3,500.00 resulted from his carpentry earnings during marriage. Although $2,500.00 was accumulated by appellant prior to the marriage, it was placed in a stock fund bearing both parties’ names; therefore, it appears that appellant intended to give an undivided one-half interest in these pre-marital earnings to appellee. The creation of a joint interest in a bank account with rights of survivorship is prima facie evidence that the party funding the entire account intended an inter vivos gift. In re Estate of Gladowski, 483 Pa. 258 , 396 A.2d 631 (1979); In re Estate of Young, 480 Pa. 580 , 391 A.2d 1037 (1978). In addition to transferring an undivided one-half interest in these assets to appellee as donee, it is also apparent to me that appellant placed these funds in joint names with appellee in contemplation of marriage. Therefore, I consider the real-estate and the two-thousand-five-hundred-dollar portion of the stock fund in the same vein. I am not troubled by the fact that a portion or all of the $2,500.00 might have been earned by appellant prior to cohabitation. It is neither necessary nor reasonable to expect a spouse in appellee’s position to enforce her interest in the real estate and the $2,500.00 through partition. Where parties improve property and convey theretofore solely-owned prop *423 erty to joint names in the expectation of marriage, I conceive of no compelling reason why such property should not be considered “marital property.” As I alluded to earlier, the definition of “marital property” in § 401(e) of the Divorce Code is not all-inclusive. Furthermore, the purchase or receipt of property by one party prior to marriage, who later transfers that property into joint names with his future spouse prior to marriage, might determine how that property is to be equitably divided, but should not determine whether it is “marital property.” Afterall, divorce courts, with their equity powers, are as well-equipped to equitably divide property as equity courts in partition actions. I, too, am not persuaded that appellant’s carpentry work produced the additional $3,500.00 in the stock fund, due to the fact that he alluded to no particular jobs which generated these funds. Nevertheless, assuming such money was generated by appellant alone, his argument still fails. Once again, appellant placed the money in a jointly-owned stock fund. Moreover, he generated the $3,500.00 during the marriage while appellee was the sole wage earner, sole payor of household bills, sole provider of staples and sundries and sole housekeeper. The one-half division of the Merrill Lynch funds correctly reflects these facts. Next, appellant avers that the six-thousand-dollar payment from his mother to him and appellee was a loan and not a gift; consequently, it was not marital property subject to equitable distribution. A gift is complete where there is delivery, either actual or constructive, and intent to make a gift at the time of delivery. In re Estate of Koska, 176 Pa.Super. 519 , 108 A.2d 829 (1954). Appellant’s mother, Agnes Beach, gave $6,000.00 to the parties for the costs of constructing the house. Appellant produced no written evidence of a loan such as a promissory note or agreement. Moreover, appellant and his mother were particularly vague when asked whether the six-thousand-doilar loan was to be repaid. None of the money was repaid as of the date of the master’s hearing. Further *424 more, a transfer of cash from one relative to another is a factor heavily considered when determining donative intent. See Wagner v. Wagner, 466 Pa. 532 , 353 A.2d 819 (1976). Under the facts and circumstances, I agree with the majority that there was no error in the lower court’s determination that the six-thousand-dollar payment was a gift. According to appellant, the court erred in valuing the real estate at $55,000.00; $50,000.00 was a more realistic value. Both parties filed Inventory and Appraisement Statements. In his Statement, appellant valued the real estate within the range of $55,000.00 to $60,000.00; however, he testified before the master that the range was too high. Appellant produced no expert testimony in support of the fifty-thousand-dollar fair market value. Appellee valued the real estate in her Statement at $55,000.00 and confirmed that amount at the hearing. Accordingly, the fifty-five-thousand-dollar determination was based upon credible testimony, an assessment beyond appellate scrutiny. Finally, appellant avers that he had no life insurance while appellee had substantial life insurance. As a result, appellant wants these facts reflected in the final distribution order. On the contrary, appellant testified that he was provided some insurance through the Veterans of Foreign Wars and the National Rifle Association. On the other hand, appellee’s life was covered by a group life policy by her employer, Westinghouse. It had no cash value. She also had four life insurance policies with face values of $1,000.00, $1,000.00, $500.00 and $150.00, and respective cash surrender values of $137.53, $90.00, $74.45 and $26.08. In light of appellant’s vague and contradictory testimony on the face and cash-surrender values of his policies and the minimal cash surrender values of appellee’s policies, we find no error in the court’s decision not to offset an otherwise equal and equitable division of insurance holdings. Accordingly, I would affirm. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9754632. Public record. Not legal advice.