Bank of America National Trust & Savings Ass'n v. Mantz

49 P.2d 279, 4 Cal. 2d 322, 1935 Cal. LEXIS 546
CourtCalifornia Supreme Court
DecidedSeptember 19, 1935
DocketS. F. 15151
StatusPublished
Cited by18 cases

This text of 49 P.2d 279 (Bank of America National Trust & Savings Ass'n v. Mantz) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of America National Trust & Savings Ass'n v. Mantz, 49 P.2d 279, 4 Cal. 2d 322, 1935 Cal. LEXIS 546 (Cal. 1935).

Opinions

PRESTON, J.

This action is by plaintiff, a judgment creditor of A. W. Gorman, against defendant, who is the divorced wife of Gorman, to impress a lien upon certain valuable residence property in Atherton, San Mateo County, upon the contention that the judgment is a community debt and the property, prior to divorce, was the community property of the spouses, which as such may be subjected to payment of the judgment. While the prayer is that all of said property be declared community property, and subjected to the lien of said judgment, the briefs all proceed upon the assumption that only a one-half interest therein is involved, being the interest derived by the wife from the husband on January 3, 1931, prior to final decree of divorce. Defendant answered, denying the claim of plaintiff, and after pleading several special defenses, prayed that her title to the whole of said property be quieted as against the claims of plaintiff. The court granted her prayer in full. Plaintiff appealed from [324]*324the judgment and also appealed from an order subsequently made denying its motion to vacate the judgment and enter a different judgment.

Our conclusion is that the judgment must be affirmed as to the one-half interest in said property and reversed as to the remainder. This conclusion automatically disposes of both appeals.

The underlying facts necessary to a consideration of the case are as follows: A. W. Gorman, after making a spectacular rise financially through certain stock speculations, married respondent on March 21, 1925. The property which is the subject of this action was purchased October 26, 1926, and title thereto taken in the name of the spouses as joint tenants. Gorman had, on October 1, 1926, organized the firm of Gorman, Kayser & Co., and through it reentered the stock brokerage business. Between said date of purchase and the middle of the year 1928, he and his wife had caused a valuable residence to be erected and other improvements to be made on the said property at a cost of some $200,000. On October 6, 1926, Gorman, acting, it is claimed, for the above-named firm, consisting of twelve members, executed in writing a guaranty agreement in support of the written obligation of Charles L. Ebner, Jr., himself one of said partners, in the principal sum of $23,000, payable to the predecessor of plaintiff. Said guaranty read as follows: “For value received, I hereby guarantee payment of the within obligation and all renewals or extensions thereof, and I hereby waive presentation, demand, protest, notice of protest and notice of nonpayment, (signed) A. W. Gorman.”

The court found, and respondent concedes, that this obligation became a so-called community debt of the Gormans. Thereafter, and on December 2, 1929, the Gormans, in contemplation of separation, made a property settlement agreement, which confirmed the said above-mentioned joint tenancy of said property and each spouse acknowledged ownership by the other of a one-half interest therein. On December 3, 1929, an interlocutory decree of divorce was granted the wife on grounds of cruelty and the said property settlement agreement was therein and thereby confirmed. Thereafter, and on August 12, 1930, said Gorman reported to appellant, in a financial statement, that he owned a half interest in said property and that his former wife owned the other [325]*325half, each holding as a joint tenant. However, on December 2, 1930, respondent, the wife, filed a second and supplementary action against her former husband to impeach said above-mentioned property settlement and to have amended accordingly the interlocutory decree. Respecting the property in suit she alleged in paragraph II of her complaint as follows: “That all of the property owned or possessed by either plaintiff or defendant during the continuance of their marriage was community property, the whole thereof having been acquired by them through their joint efforts after the marriage,”

Upon the above allegation the court made a finding of fact as follows: “The court finds that each and every allegation contained in Paragraphs I and II of the complaint on file herein are true, except that a one half undivided interest in the real property hereinafter described on page 3 hereof, to wit, the Atherton property was the sole and separate property of- said plaintiff, free and clear of any lien or interest in said defendant.”

On January 3, 1931, the court awarded the half interest in said property standing in the name of the husband to the wife as a part of her share of the community property, holding that the first property settlement ‘1 did not set forth an equal and just distribution of all community property”. The interlocutory decree of divorce was modified accordingly. The husband made a deed to the wife on said day and thereafter, on January 7, 1931, the court entered a final decree of divorce.

Meanwhile financial difficulties had overtaken the firm of Gorman, Kayser & Co., and on December 16, 1930, a receiver was appointed to liquidate the company. On May 8, 1931, plaintiff began an action against Gorman and also against the individuals comprising said firm upon said above-mentioned obligation. Thereafter and on June 1, 1932, it secured judgment against Gorman, but the individual members of the firm, other than Gorman and Ebner, were exonerated by said judgment. The liability of the individual members of the firm has not yet been determined, but for the purposes of this ease, by stipulation, the judgment in their favor is to be considered as final. On June 18, 1932', execution was issued on said judgment against Gorman and returned nulla tona.

[326]*326Basing its claim upon this judgment and return of the execution thereon unsatisfied, plaintiff and appellant here beseeches a court of equity, praying that at least the half interest in said property awarded to the wife by the supplementary suit and final decree of divorce be declared available for payment of said judgment and that it be impressed with a lien and sold for that purpose.

The basis of this plea is that by the judgment and decree in said supplementary action and by the final decree of divorce, the half interest in the property became and is community property of the Gormans; that as against the debtor or his judgment creditor, she must take the property cum onere.

We see no escape from the binding efficacy of this contention. Upon no other hypothesis could respondent wife have received it under said decree. Separate property cannot be awarded in a divorce action. (Sec. 157, Civ. Code; Allen v. Allen, 159 Cal. 197 [113 Pac. 160].) This is true in spite of the findings and judgment of the trial court that said property was separate property of Gorman and is now the separate property of respondent. In other words, it is quite true that but for said adjudication, invited by respondent, the evidence would amply support the conclusion of the trial court that originally it was the husband’s separate property. But if it were his separate property, appellant would have the right to subjeet.it to payment of its judgment unless the property, prior to lien of the judgment, had been conveyed to another, and even in that event, appellant could still follow it until it reached the hands of a tona fide purchaser or encumbrancer for value.

Now when appellant was powerless to intervene, respondent procured a judgment against the debtor, her former husband, adjudicating the property to be their community property owned as husband and wife.

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Bank of America National Trust & Savings Ass'n v. Mantz
49 P.2d 279 (California Supreme Court, 1935)

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Bluebook (online)
49 P.2d 279, 4 Cal. 2d 322, 1935 Cal. LEXIS 546, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-america-national-trust-savings-assn-v-mantz-cal-1935.