In re Marriage of Branco concerned the characterization of property which was purchased before marriage and refinanced during the marriage.
In 1970 the wife purchased real property. She and her husband got married in 1977. A year after she got married to her husband, they refinanced the property using a portion of the new loan to pay of the original loan which was approximately $23,483. The remaining loan was used to pay off debts. Later on during the marriage the parties obtained a second loan that was used to pay off other debts and make improvements to the home.
The family law court found that the home was the wife’s separate property and the loans were community debts. The parties were ordered to pay one half of payments on the two loans. The husband filed an appeal and argued that because the community paid off the mortgage that was obtained before the parties were married, the community stepped into the shoes of the separate property owner and became the new owner.
The appellate court agreed with the husband and said that the community is entitled to an interest if it contributed towards the property’s acquisition. Paying off the mortgage during marriage through the refinance of the property, rendered that portion of the home community property.
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