Court Opinion

ID: 4730322
Source: CourtListenerOpinion
Date Created: 2021-08-12 02:55:13.323577+00
Date Added: 2024-06-11T08:08:00.994947
License: Public Domain

Scott, J.
(dissenting). — I.am unable to concur in the opinion rendered in this case, logical as it reads. It must be borne in mind that we have a system of property rights peculiar to ourselves', and for that reason some of the rules generally applicable to suits on negotiable paper well settled elsewhere cannot be applied here with safety. Our laws recognize authority in the husband to create debts on the part of the community. The wife may also create debts for which the community estate is liable, at least for some purposes, although she may not have such power generally. The husband can contract with reference to his separate property and create debts in its acquisition, management and disposition' which may probably be a charge upon the community personal property because of his power to dispose of the same, but could not be made a charge upon any part of the community real estate prior to a dissolution of the community, except by the act of both of its members, unless for improvement thereon under the provision in § 1400, Gen. Stat., and it may be with the *503possible further exception of such real estate as he holds the record title to, by force of the act of the legislature approved March 9, 1891 (Laws 1891, p. 368), whei’e the wife has not given the notice prescribed by the act. The wife may also contract and create debts with reference to her separate property which could not be made a "charge upon any part of the community property prior to a dissolution of the community unless in such cases as would come under the act last mentioned.
Such being the law, it may be of vital interest to a creditor to know whether or not an obligation which he holds contracted by one of the parties is a separate debt or a community debt, and its community character can only be established in an action to which both members of the community are parties. No one will contend that the wife can be concluded upon this question, it seems to me, without an opportunity to be heard, as such a rule would be destructive of the entire community system. This question was brought to the attention of the territorial supreme court in Andrews v. Andrews, 3 Wash. T. 286, 14 Pac. Rep. 68, and, while not decided, it was said there that —
“We see no way for a creditor to get a judgment lien conclusively operative upon such real estate, except as the result of an action or proceeding to which both husband and wife were parties, and in which the community character of the debt is admitted or in issue. It may be that he could come into court in the first instance, alleging the community character of the debt, and obtain a judgment as for a community debt. ’ ’
Such an action upon an obligation executed by one of the parties only would be something of an anomaly, but the wife is in a sense a party to every community debt, even though i/n the shape of a note given by the husband, and the right to sue both merribers of the community thereon is rendered necessary by the situation. If this cannot be done, when can or should the character of such a debt be deter*504mined so as to be binding upon all the parties interested. It may be said that upon the issuance of an execution upon a judgment obtained against the husband, and a levy upon community real estate thereunder, the wife can come in and resist a sale of the property, or show that the judgment was not obtained upon a community debt. But there are serious objections against limiting the method to such a proceeding. The wife, through absence or otherwise, might have no knowledge of the levy, and in such a case must the execution creditor go ahead at his peril, and must the purchaser under such an execution sale take the chances of having to defend an action which the wife may thereafter bring, and of losing the property if the debt upon which the judgment was obtained is shown not to have been a community debt. If so it is evident that real estate under such circumstances would bring but a very small proportion of its value.
Or, will it be contended that upon the issuance of an execution, and its levy upon community real estate, the creditor should bring a suit or proceeding in aid of the execution against the community, to establish the community character of the debt? If so, he might as well bring the action originally against the community, and save the delay and expense of a second suit. Any objection that can be raised to joining the wife in the suit in the first instance, in an action upon a note given by the husband for a community debt, would apply with equal force to a subsequent proceeding against the wife to determine the community character of that same debt, in the form of a judgment against the husband.
Our laws relating to proceedings against husband and wife for the collection of debts and the enforcement of obligations are yet very much unsettled. The subject is a complicated one, with innumerable intricate bearings, and a solution thereof compatible with the business interests of *505the country, and at the same time affording protection to the husband and wife community, is of the greatest importance. It seems to me the decision rendered in this case strikes hard at the foundation of the commercial interests of the people.
There are many questions affecting community rights and obligations which will likely be presented for determination, some of which are at least indirectly involved in this action. Can a creditor in enforcing the collection of a community debt proceed against the property of the community or the separate property of either of its members indiscriminately.
In Oregon Improvement Co. v. Sagmeister, 4 Wash. 710 (30 Pac. Rep. 1058), we held that debts contracted by the husband are prima facie, community debts. But this presumption upon a negotiable note should not be allowed to grow into a conclusive one as against the wife, in whosesoever hands it may be. Although if in the hands of a holder in good faith without notice the wife would probably be concluded as to all defenses going to a misrepresentation of the consideration thex’efor by the party originally obtaixxing the xxote, as this should follow fronx the fact that the husband had the right to create the debt against the community for community purposes. But the wife must certainly have the right to be heard upon the px’opositioix as to its being a community debt ixx fact.
The rule that the consideration for a negotiable note can not be inquired ixito as against a subsequent hqlder in good faith should only conclusively opex’ate as against the individual executing the note. But the cx’editor should be permitted to show that it is a community debt, and when that fact is established, the rule should opex’ate against the community as to aixy further questions going to the consideration, for it can thexi be said that the comxxxxxnity executed it. It will not do to hold that the presumption, that a *506negotiable note executed by the husband creates a debt against the community, is an absolute one, as it would vest power in the husband to indirectly dispose of the entire community estate, both real and personal. One of the main purposes, of the law is to pi’event this. In holding that the consideration cannot be inquired into in favor of the maker against a subsequent holder in good faith, the creditor is given all the protection that the common law gave him. The rule was invoked for his benefit and to further commercial interests, and would not militate against a rule permitting him to establish the fact that .there was another party liable upon that same note not patent upon its face. This would be extending the doctrine, instead of limiting it.
The decision of all such questions affecting the community must be approached with great care, having regard for the welfare of the community, and for the commercial interests of the people, and each question as it arises must necessarily be considered with reference to its bearing upon others, or interminable confusion and hardship will result. With great deference to the straightforward, apparently simple holding in this case, it seems to me it involves much more than is at first sight visible. I think the plaintiff in this case should have the right to have the character of its claim settled in this action, and to have a judgment against all the parties liable thereon. If it is to be held that in this state a note executed by the husband is conclusively his separate debt only, most disastrous consequences will flow from .it, as the great bulk of the property held in the state is undoubtedly community property, and in many cases, as in this one, the creditor would not be in a position to sue upon the original debt. The commercial value of negotiable paper would be most seriously impaired thereby. On the other hand, if such a note is to be held conclusively a community debt, then there is an end to the supposed *507protection afforded the wife by the community laws, and a long stride backward has been taken in the relations of husband and wife.
Hoyt, J., concurs.