Johnson v. Johnson

In Johnson v. Johnson, 650 So. 2d 1281, 1286 (Miss. 1994), the supreme court considered the matter of marital assets further and concluded that, upon proper proof, the chancellor could find that one spouse owning separate property not subject to equitable division had, during the course of the marriage, permitted his or her separate estate to be appropriated to family purposes to the extent that it was deemed to have been "commingled" with other marital assets and, thereby, rendered susceptible to being equitably divided at the end of the marriage. Mrs. Johnson inherited a sizable quantity of land used to grow marketable timber. During the course of the marriage, timber of significant value was harvested from the property and the sales proceeds used for family purposes. The supreme court held that "when . . . Mrs. Johnson commingled the monies received from the sale of timber, she converted these nonmarital assets to marital assets, subject to equitable distribution . . . ." Id. 1286. Mrs. Sanderson contends that this passage indicates that the land itself was converted to a marital asset. We disagree, while conceding that the quoted language of the opinion is capable of being misconstrued in this manner. Read in the context of the entire opinion, we are satisfied that this quoted phrase referred only to the proceeds derived from the earlier timber sales rather than to the timber land. The opinion observes that not all the sale money was spent but that some of it was "placed in savings accounts controlled by Wayne." It is apparent that the supreme court concluded that this was an act of commingling of these funds. Id. The opinion goes on to observe that $ 66,000 of the timber sale proceeds that had acquired the characteristic of a marital asset by virtue of its commingling had reacquired its nonmarital status because Mr. Johnson had returned that part of the funds to Mrs. Johnson's exclusive control. Id. In contrast to this discussion clearly relating to the character of funds derived from timber sales still on hand at the end of the marriage, the supreme court elsewhere states unequivocally that Mrs. Johnson's separate nonmarital property includes "inherited assets that were never commingled with funds for the family," and goes on to enumerate those assets in a listing that includes "timber land, and marketable timber . . . ." Id. The Court outlined the steps involved in the process of applying the equitable distribution factors listed in Ferguson. To begin, the chancellor is to classify the parties' assets as marital or non-marital pursuant to Hemsley v. Hemsley, 639 So. 2d 909, 914 (Miss. 1994). Next, the chancellor is to value and equitably divide the marital property using the Ferguson factors as guidelines, in light of each party's non-marital property. Johnson, 650 So. 2d at 1287. Then, if the marital assets, after equitable division and in light of the parties' non-marital assets, will adequately provide for both parties, then "no more need be done." Id. Finally, if an equitable division of marital property, considered with each party's non-marital assets, leaves a deficit for one party, then alimony should be considered. Id. In Johnson v. Johnson, a central issue was the wife's inheritance of certain assets. The wife received $ 153,000 from three timber sales during the marriage; much of these inherited funds were used for the benefit of the family or placed into accounts controlled by the husband. Id. 1286. The husband repaid the wife $ 66,000 of the original $ 153,000. Id. The wife claimed that the funds remained non-marital property by virtue of the fact that she inherited those amounts. Although the inherited funds may have begun as non-marital property, they became marital property subject to equitable distribution when the funds were commingled with other marital property or used for benefit of the family. Id. The amounts repaid by the husband regained their non-marital status. Id. It is true that the Mississippi Supreme Court ruled that commingled funds, including inheritances by only one spouse, become marital assets which are subject to equitable distribution and laws of succession. However, the facts in Johnson show that the inheritance received by the wife in that case was commingled with the family's money in that she allowed it to be used to the benefit of the entire family. Id. Some of the inheritance money received by the wife in Johnson was even placed in a savings account under the control of her husband rather than herself. Id.