## Facts

- Emile and Marcella Maden married in 1914 and acquired real property and securities during marriage with community funds; some assets were held in Marcella’s name, some jointly.
- The spouses used joint bank accounts and a joint safe-deposit box for securities.
- In 1933, marital difficulties arose; Marcella removed securities from the joint box to her own box and withdrew about $8,500 from joint accounts, leaving a note stating she was “taking charge of our possessions” to “save you from yourself.”
- After an unsuccessful reconciliation effort, the parties separated.
- During this period, Emile executed transfers placing certain stocks in Marcella’s name and executed a deed placing the family home in Marcella’s name alone; there was evidence he asked that the deed not be recorded, though it was recorded in 1937.
- Emile died in 1939; his will stated that the stocks and real property were community property.
- The estate’s executors sued Marcella to quiet title and for an accounting, alleging the property remained community property; Marcella claimed the transfers made the property her separate property.
- At trial, the court excluded plaintiffs’ proffered evidence of Emile’s oral declarations (before and after the transfers) that he did not intend gifts or a change in the property’s character.
- At the close of plaintiffs’ case, the trial court granted Marcella’s motion for nonsuit and dismissed the action.

## Issues

1. Whether plaintiffs’ evidence, viewed most favorably to them, was sufficient to defeat a motion for nonsuit.
2. Whether Emile’s oral declarations (before and after the transfers) about his intent were admissible to show whether the transfers were gifts/transmutations or merely changes in form for convenience or protection.

## Decision

- The Court of Appeal reversed the judgment of nonsuit.
- Applying the nonsuit standard, the court held plaintiffs’ evidence permitted a reasonable finding that the assets were acquired as community property and that Emile may not have intended to make gifts or change the property’s community character.
- The court held the trial court erred by excluding Emile’s declarations of intent; the declarations were admissible on the central question whether the transfers were intended as gifts/transmutations.
- The matter was remanded for further proceedings consistent with these rulings.

## Legal Principles

- On a motion for nonsuit, the court must accept as true the evidence and reasonable inferences most favorable to the plaintiff and disregard conflicts; nonsuit is improper if the evidence would support a verdict for the plaintiff.
- Property acquired during marriage is presumed community property; a spouse may convert community property to the other spouse’s separate property by gift, but the existence of a gift depends on donative intent.
- Where characterization turns on whether a transfer was a gift or only a change in the form of holding, the transferor’s declarations of intent made before or after the transfer are relevant and admissible to prove or disprove donative intent.

## Conclusion

The court reversed a nonsuit in an estate-versus-spouse title dispute because the executors presented evidence creating a triable issue on whether interspousal transfers were intended as gifts converting community property to separate property, and because the decedent’s declarations of intent were admissible and should have been considered.


Horsman v. Maden, 48 Cal. App. 2d 635 (Cal. Ct. App. 1941)