Court Opinion

ID: 6480355
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:02:27.380379+00
Date Added: 2024-06-11T15:54:07.912041
License: Public Domain

MOLLOY, Judge
(dissenting).
I regret that I cannot agree with my colleagues as to the proper disposition of this appeal.
Certain additional facts should be stated in order to understand this dissent. Both brothers-litigants testified that the idea of purchasing the four mining claims in question, which the parties referred to as the “Goat Ranch,” emanated from the plaintiff Arthur. Though Edward testified that he did not know that the property had been purchased in the name of Arthur until the death of the brothers’ father in about 1950, there were introduced in evidence tax records which indicated that during part of the time the property was in Arthur’s name, Edward had paid the taxes thereon and received tax receipts showing the title of the property to be in the name of Arthur.
The trust agreement of 1954 is a formal document, signed and acknowledged before a notary public. This agreement is clear and unequivocal. In the recitals it traces the history of the property through its purchase from the state in January of 1946, its being held in trust by Arthur for both brothers, an undivided one-half interest to each, for the period of time from 1946 to 1951, and its transfer to Jacobs in 1951 under an agreement that Edward would hold the property in trust for both brothers, one-half interest in each. The trust agreement provides for the continuance of this trust, with the proviso that when the property is sold, Edward shall first receive out of the sale $1,700 invested by him in the property and the balance to be divided one-half to each brother.
The recitals of the trust agreement are in accordance with the oral testimony given by Arthur at the time of trial. The majority opinion recites that Arthur admitted owing Edward $300 for a loan. Additionally, Arthur admitted owing Edward the $500, also claimed as an indebtedness in the counterclaim. Arthur, however, contended that there was an oral agreement between himself and Edward that these loans would be repaid out of his share of the Goat Ranch, when it was sold. This latter was denied by Edward, who contended that Arthur agreed to pay the loans back as soon as possible after they were made.
Ordinarily, questions of fact are for the judge or jury and not for an appellate court. In the absence of findings of fact, we should assume that all disputed questions of fact were resolved in favor of the judgment reached.
However, in this case we have clear indication of the trial judge’s view of the disputes in the evidence. Shortly before the conclusion of the taking of testimony, the court said this:
“If it wasn’t for this judgment there wouldn’t be anything difficult to decide here. I could say that we—well, kind of traded a mutual property, and this agreement substantiates that and it’s a trust property, but here you have got a deed and a judgment divesting this plaintiff of any interest in the property. Now, then, the only question then is of the fact of this Exhibit 1, [the trust agreement of 1954 between the brothers] the agreement.”
At the conclusion of all of the evidence, the trial court said:
“Well, the only difficulty I can see about this case the way I look at it right *443now, and I am not going to make a final decision now, is if it wasn’t for the 1953 judgment, I think the way the parties have dealt with each other plus this * * * this agreement, Exhibit 1, I think perhaps the plaintiff should prevail. But because of the judgment of 1953, which completely quieted the title to this property in the * * * in the defendant, Eddie Jacobs, and the presumption is it’s community property. Some question in my mind whether the agreement, Exhibit 1, could be binding if his wife wasn’t a party to it. I wish you maybe could write a memorandum or something on that, if you like. That seems to be the entire case, this community property question which Mr. Dolph raised in his motion. Now, because of the prior dealings and this agreement, Exhibit 1, I could probably hold that it was a trust and therefore wasn’t community property and the wife’s signature wasn’t necessary, but with this judgment staring me right in the face, which I cannot go behind, where he sued Arthur Jacobs and his wife and quieted title against him, I think this is property * * * now, at least, the presumption that it was community property, and therefore to make Exhibit 1 binding it would require Eddie Jacobs’ wife’s signature, and that’s the way I am looking at the case at this point.” (Emphasis added.)
Additional indication of the court’s view ■of the credibility of the witnesses appears in the written minute order directing preparation of formal judgment:
“The Court having taken this matter under advisement, Court feels that there was no consideration for the agreement of August 9th, 1954 and that as title to the property had previously been quieted in the name of the defendant in this action (in action No. 36425) and that the property now in question is the community property of defendant and his wife, it is hereby
“ORDERED that judgment be entered in favor of the defendants and against the plaintiffs, and it is further
"ORDERED that the defendants take nothing on their Counterclaim and that they not be allowed any attorney’s fees in connection with this action.
"Counsel for defendants is directed to prepare a formal written judgment.
“IT IS ORDERED that a photocopy of Judgment in Cause No. 36425 Edward C. Jacobs -vs- Rose Jacobs and Arthur W. Jacobs, etc., Pima County Superior Court be FILED IN COURT at this time.” (Emphasis added.)
If any further indication is needed of the state of mind of the trial judge on this issue of credibility, we have it in the judgment finding against the defendant on the counterclaim for the two debts of $500 and $300 each. The only logical explanation for finding against Edward as to these in-debtednesses is that the court- believed Arthur when he testified that Edward and he had agreed that these indebtednesses would be paid out of Arthur’s share of Goat Ranch when it was sold.
It thus seems clear that the trial court resolved the conflict in the evidence as to whether there was an oral trust agreement between the parties in favor of the plaintiff. The justness of the majority decision thus rests upon the law of res judicata: Did the quiet title judgment of 1953 effectively preclude the written trust agreement of 1954 from any efficacy?
To the writer of this dissenting opinion, there are cogent reasons why the judgment does not preclude the clear proof of a trust agreement, such as was presented in the case we are considering. These reasons require an understanding of the law of community property as it affects these transactions. A key statutory provision per*444taining to community real property is A.R. S. section 33-452 reading as follows:
“§ 33-452. Conveyance of community property
“A conveyance or incumbrance of community property is not valid unless executed and acknowledged by both husband and zvife, * * (Emphasis added.)
On several occasions our Supreme Court has construed this statute and indicated that a conveyance of real property in which both spouses do not “join” is “void.” Run-dle v. Winters, 38 Ariz. 239, 250, 298 P. 929, 933 (1931); Cook v. Stevens, 51 Ariz. 467, 472, 77 P.2d 1100, 1102 (1938); Mun-ger v. Boardman, 53 Ariz. 271, 277, 88 P.2d 536, 538 (1939). Our Supreme Court has held that either spouse may convey community property to the other spouse, without a joinder in the conveyance. Scho-field v. Gold, 26 Ariz. 296, 304, 225 P. 71, 74, 37 A.L.R. 275 (1924). But this result came about in a rehearing decision, after the contrary had been held in Schofield v. Gold, 25 Ariz. 213, 215 P. 169 (1923).
Our Supreme Court has never .held that either spouse alone could convey to a stranger any interest in community property and, by reason of the above, it is apparent that the question is not without inherent uncertainty. From this, it is clear that when Edward obtained a quitclaim deed from his brother in 1951, without the joinder of Arthur’s wife, Rose, title was not clear in any titleholder, and the property was, in effect, unmerchantable. When Rose refused to execute the quitclaim deed requested of her by both Arthur and Edward, and if there was an oral trust agreement between Arthur and Edward, then the quiet title action of 1953 was a necessity in order to carry out this trust agreement. The failure of Arthur to respond to the quiet title action in effect forwarded the purposes of the alleged oral trust agreement, and rendered the title merchantable.
The quitclaim deed that was sought from Arthur and Rose in 1951 did not provide for a conveyance to Edward C. Jacobs and Caroline Jacobs, husband and wife, but the named grantee in this unsigned deed was: “Edward C. Jacobs, a married man.” Most significant, the quiet title action of 1953 did not quiet title in Edward and wife, but rather in: “Edward C. Jacobs, Plaintiff.”
We thus arrive at the principal reason why this quiet title action should not be conclusive of the issues of this case. In Cosper v. Valley Bank, 28 Ariz. 373, 237 P. 175 (1925), our Supreme Court held that a judgment against “ * * * Parks individually * * *” (28 Ariz. at 374, 237 P. 175) was not necessarily a judgment against Parks, individually, but would be presumed to be a judgment against both Parks and his wife and that in the absence of proof to the contrary the contention of the plaintiff in this quiet title action that it was an individual judgment should fail. The court expressed this in the following language:
“It clearly appears from the pleadings and the evidence that the debt, on which the judgment set up is based, was incurred during coverture, and there is not a scintilla of evidence it.was anything but a community debt.' For the reason that the evidence does not sustain the allegations of the reply, the judgment is affirmed.” 28 Ariz. 373, 382, 237 P. 175, 178. (1925).
It is most clear from this decision that, 'while a judgment against a named male spouse is presumed to be a judgment against the community, it is not conclusively so, but the matter is open to inquiry and proof in proper proceedings. The ambivalence in judgments permitted by Cosper v. Valley Bank continues to the present. Nelson v. Nelson, 91 Ariz. 215, 370 P.2d 952 (1962). Merely on the face of the judgment against a man, it is not possible to ascertain conclusively whether the judgment is against an individual or against a community. The writer knows of no reason why the same ambiguity does not apply to a judgment in favor of a man, as in this case. If one can go aliunde the record to *445determine whether a judgment against a named male individual is in actuality a judgment against him as an individual or one against the community, then one should be permitted to go aliunde the record to establish that a judgment for a named male plaintiff is not a judgment in favor of the community but is rather one in favor of the individual.
In Rundle v. Winters, 38 Ariz. 239, 250, 298 P. 929, 933 (1931), our Supreme Court held that a wife was an “ * * * absolutely necessary * * * ” party plaintiff to a quiet title action brought by her husband as to community real estate. This is well-established law in the State of Washington. Lownsdale v. Gray’s Harbor Boom Co., 21 Wash. 542, 58 P. 663 (1899) and Parke v. City of Seattle, 8 Wash. 78, 35 P. 594 (1894). The rationale of this law from our sister community property state is that the husband alone should not be able to bring such an action because he would not have authority to compromise it and thus do indirectly what the law does not permit him to do directly, that is, to divest his wife of an interest in community property.
This Washington law appears to be the minority rule among community property states. 42 C.J.S. Husband and Wife § 541, p. 18. The Rundle v. Winters pronouncement, supra, was too much in the nature of dicta to be considered a holding on this interesting question for this state. But the instant case should not cause us to commit ourselves to either the majority or minority view. For, even if the wife is not an indispensable party to a quiet title action as to community realty in this state, fundamental principles of judgment law preclude a judgment in favor of the husband alone from being a binding judgment that the property is community property. The wife not being a party, it is inconceivable that the judgment could be a binding determination that the realty was the separate property of the husband. Conversely, it seems equally clear that the judgment could not
be binding as to the community nature of the property. 49 C.J.S. Judgments § 28, p. 68. From this fundamental law, it seems clear to the writer that whatever efficacy the quiet title judgment of 1953 may have had, it did not foreclose the possibility that as of the date of the judgment Edward C. Jacobs had an interest in the subject realty other than as head of the community of himself and wife.
It appears to be the law of this state that either spouse may take property in trust as an individual trustee and that such a trustee may convey back to the cestui without the spouse joining in the conveyance. Parker v. Gentry, 66 Ariz. 189, 195, 185 P.2d 767, 771 (1947). In Parker v. Gentry there was no written trust agreement, but the court held that the oral trust agreement was fully executed when the trustee-wife conveyed back the property to the trustors and that therefore the trust agreement was valid as a fully executed agreement.
In this case, the trust agreement has not been fully executed, but we do have a formal written trust agreement. This eliminates the problem of the statute of frauds, which was encountered in the Parker v. Gentry case. If it be granted that the 1953 quiet title judgment was res judicata that Arthur had no interest in this property, either legally or equitably, as of the time of that judgment, still this does not dispose of this case, because Arthur’s rights in this property arise out of a written trust agreement executed after the judgment. Even if this were a gratuitous declaration of trust, it would be valid, Restatement (Second), Trusts § 28, to the extent of Edward’s interest in the property other than as a member of the community of himself and wife. Clear proof, accepted by the trial court as having verity, shows that the property was held by Edward in his individual capacity as trustee. A peculiarity of community property law is relied upon by appellees to protect what in law amounts to a constructive fraud, MacRae v. MacRae, 37 Ariz. 307, 312, 294 P. 280, 282 *446(1930). However, as' noted above, our community property law has another peculiarity which brings into the law of judgments an ambiguity which under the peculiar facts of this case permits exposition of the inequitable conduct under discussion.
I concur in the principle that litigation should not be protracted and that judgments are entitled to pervasive finality, but I believe the peculiarities of this case permit a showing that the judgment taken was for the purpose of carrying out the trust agreement.
For the reasons stated, it is my opinion that this case should he remanded for a new trial, with the trier of fact not being strait jacketed with the concept that the 1953 judgment requires a finding that the 1954 trust agreement is void.