Wilson v. Polacek

486 P.2d 819, 15 Ariz. App. 139, 1971 Ariz. App. LEXIS 701
Court of Appeals of Arizona·Decided July 8, 1971·No. No. 1 CA-CIV 1381·Published

Opinion

HAIRE, Judge.

The central question raised by the appellants on this appeal concerns the authority of the husband to contract community debts during the pendency of a divorce action. The litigation in the trial court seeking to impose community liability was commenced after the entry of the divorce decree which dissolved the community, and arose out of the execution and delivery of promissory notes by the husband to a third party while the husband and wife were •separated and while the divorce action was pending. The pertinent facts are as follows.

Sometime after Pauline Wilson (the appellant-wife) had filed suit for divorce, but prior to the judicial dissolution of the marriage, W. Francis Wilson, her husband, executed and delivered to Carolyn M. Polacek (the appellee creditor herein) two prdmissory notes aggregating $19,000.00. Mrs. Polacek was permitted to testify, over the appellant’s objection, that Mr. Wilson advised her that the funds were to be used in connection with a grape ranch which the Wilsons then owned as community property, situated in the Harquahala Valley. However, no evidence was introduced to prove that the borrowed funds were in fact used in connection with the grape ranch. Mrs. Wilson did not sign these notes, nor did she know of these transactions at the times they occurred, nor has she ever assented to them. At the time of these transactions, Mrs. Polacek knew that Mr. and Mrs. Wilson had separated, but there is no evidence that she knew of the then pending divorce proceedings.

In the trial court summary judgment was entered against the defendant-husband, and the question of the wife’s liability (to the extent of community assets) proceeded to a jury trial, which culminated in a verdict and judgment against the defendant-wife. She urged in the trial court, and now urges on appeal, that A.R.S. § 25-314 absolutely precludes the husband from contracting debts on account of the community during the pendency of a divorce action, and that such debts contracted during this period are his own separate debts irrespective of the benefits intended to be or actually conferred upon the community. A. R.S. § 25-314 reads as follows:

“After an action for divorce is filed, the husband shall not contract any debts on account of the community property nor dispose of such property. Any alienation made by the husband after the action is filed shall be null and void if made with a fraudulent intent to injure the rights of the wife.”

Although A.R.S. § 25-314 comes to us from Texas 1 the only cases from other jurisdictions which the Court has been able to discover directly dealing with the debt contracting provision of a statute of this nature are Louisiana cases construing a [141]*141similar statute adopted in that jurisdiction.2 The Louisiana cases we refer to have construed their statute as creating a dichotomy between the contraction of community debts on one hand and the alienation of property on the other, holding that the debts contracted by the husband after the filing of an action affecting the marriage relationship are not community obligations, although such debts would otherwise be an obligation of the community. On the other hand, alienations of property by the husband are held to be valid unless made with a fraudulent intent to injure the rights of the wife. Landreneau v. Ceasar, 153 So.2d 145, 149 (La.Ct.App.1963); Ohanna v. Ohanna, 129 So.2d 249, 253 (La.Ct.App. 1961). In Ohanna, supra, the court said:

“Defendant argues that the provisions of the above-quoted article have no application to any debts he might have incurred on account of the community because such debts were created in good faith and not with the fraudulent view of injuring his wife’s rights. A reading of the article compels a conclusion that it does not establish as a standard that the debts must be fraudulent. LSA-C.C. art. 150 [see footnote 2, supra] plainly distinguishes between contracting a debt on account of the community and the disposing of or alienating the community immovables and provides that a fraudulent alienation shall be null. No requirement is made that a contract of indebtedness to be unlawful must be made with the view of defrauding the wife. Our opinion is that under the clear terms of said codal article debts such as the ones due by the husband to Berger Bros., if contracted for the account of the community after the suit is filed, are unlawful.” 129 So.2d at 252-253.

It should be noted that in Landreneau, supra, the court conceded that Article 271 of the Code Napoleon, which was the source of La.Civ.Code, art. 150, seemed to provide that an “obligation” made by the husband pending the suit, as well as an “alienation”, may not be annulled unless there was fraud against the wife. The court concluded, however, that the Louisiana redactors must not have intended that the Louisiana law be identical to the corresponding provisions of the French Code. Landreneau, supra, 153 So.2d at 149.

While our own statute might appear susceptible to a similar construction, we are guided by the construction given thereto by our Supreme Court in Spector v. Spector, 94 Ariz. 175, 382 P.2d 659 (1963). There, the wife contended, in a suit between the parties for a divorce, that certain debts incurred by the husband in the management of the community business after the filing of the divorce should be regarded as separate debts of the husband. The court answered appellant’s contention that A.R.S. § 25-314 absolutely prohibits the husband from contracting such community debts during the pendency of a divorce suit, as follows: t y|

“A construction of the statute, which would result in a flat prohibition against the contracting of debts by the statutory manager of the business affairs of the community property during the pendency of a divorce could result in destruction of the property itself. The burden is, of course, upon the husband to justify his management of the business, and any debts incurred. If the husband has justified his management to the trial court’s satisfaction, as it appears was the case here, he has shouldered his burden.” Spector v. Spector, 94 Ariz. at 182, 382 P.2d at 663.

[142]*142It is true that Spector was a suit involving only the husband and wife, and did not directly involve the rights of a third party. However, insofar as concerns the question of whether A.R.S. § 25-314 absolutely prohibits the husband from validly contracting debts for a community purpose during the divorce pendency, the principles announced are equally applicable to a situation involving the rights of third parties.

The next contention urged by the appellant-wife is that even assuming that A.R.S. § 25-314

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Wilson v. Polacek, 486 P.2d 819, 15 Ariz. App. 139, 1971 Ariz. App. LEXIS 701 (Ark. Ct. App. 1971).

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