REID VS. REID (DIVORCE PROPERTY & ALIMONY)

Key holdings

Practitioner summary

The court affirmed, finding no abuse of discretion in the trial court's treatment of a $5,000 debt, the property division, or the child support award. Substantial evidence supported the finding that the husband's promissory note to the wife's father was a separate and distinct obligation still owed to the father's estate, unaffected by the father's own credit-union loan (which was discharged by life insurance upon his death). Noble v. Noble, 86 Nev. 459, 470 P.2d 430 (1970). The court reiterated that, absent fraud, mistake, or a lack or failure of consideration, a prior or contemporaneous oral agreement that a note is not to be payable according to its terms is no defense to an action on the note (Oakland Medical Bldg. Corp. v. Aureguy, 41 Cal. 2d 521, 261 P.2d 249 (1953)), and that an obligation may be discharged by payment to the lender or to a third person authorized to receive it. Evidence of the wife's alleged adultery eight years earlier was properly excluded as too remote where the divorce was granted on well-established grounds of extreme cruelty (cf. Gabler v. Gabler, 72 Nev. 325, 304 P.2d 404 (1956); Sisson v. Sisson, 77 Nev. 478, 367 P.2d 98 (1961)). The distribution of community property (Shane v. Shane, 84 Nev. 20, 435 P.2d 753 (1968)) and the $250 per month child support for two children (Rosenbaum v. Rosenbaum, 86 Nev. 550, 471 P.2d 254 (1970); Goodman v. Goodman, 68 Nev. 484, 236 P.2d 305 (1951)) were within the trial court's sound discretion. The court awarded appellate attorney fees and costs to the wife. Affirmed.

In plain language

In this divorce, the main dispute concerned a $5,000 debt. To help buy into a business, the couple borrowed $5,000 from the wife's father, Mr. Hess, and the husband signed a promissory note to Hess. Hess, in turn, borrowed $5,000 from his credit union (securing it with a life insurance policy) and gave that money to the couple. When Hess died, the insurance paid off Hess's loan to the credit union. The husband argued that because the same $5,000 was involved - and because he had paid $150 toward Hess's credit-union loan - his own debt to Hess was extinguished. The trial court disagreed, finding that the husband's note to Hess was a separate and distinct obligation the couple still owed to Hess's estate, and ordering that, in the property division, the wife would hold the husband harmless on it. The Nevada Supreme Court affirmed. The husband's note obligation was distinct from Hess's separate loan from the credit union; absent fraud, mistake, or failure of consideration, a prior or contemporaneous oral understanding that a note will not be paid according to its terms is generally no defense. The Court also rejected the husband's other arguments: excluding evidence of the wife's alleged adultery from eight years earlier was proper as too remote in time (the divorce rested on well-established grounds of extreme cruelty); and the division of community property and the $250 per month child support for two children were within the trial court's discretion, with no abuse shown. The Court awarded the wife attorney fees and costs for the appeal.