Court Opinion

ID: 9829799
Source: CourtListenerOpinion
Date Created: 2023-09-01 19:38:03.592756+00
Date Added: 2024-06-11T07:43:06.590268
License: Public Domain

On Motion for Rehearing.
The bank contests our holding that Mrs. Hickman’s claim against the community estate is entitled to preference in payment out of community property partitioned to her over that of the bank.
The bank’s contentions in this regard may be thus epitomized:
Conceding that at the time of partition she was a general creditor of the community, the partition was merely a segregation of title between the spouses, and the property partitioned to her was charged with the payment of community debts, the creditors not being party to the partition nor bound thereby. It would be inconsistent to hold, as stated in our opinion, that the partition was in no sense a conveyance, and at the same time to hold that as to community creditors her claim was merged in the title she acquired in the partition. Her claim was not allowed in the partition. As between her and the principal debtor, it was waived and extinguished, and could not be asserted to the prejudice of creditors who had no part in the partition.
It is not questioned that we have fairly stated the pertinent controlling record facts in this regard. The issue is therefore one of proper analysis of those facts, and application thereto of correct legal principles.
If Mrs. Hickman had a valid claim against the community at the time of the partition, then the partition had one of two possible effects upon that claim, in so far as community creditors' were concerned: Either (1) it was altogether extinguished by the partition (as the bank asserts) ; or (2) it was merged in Mrs. Hickman’s segregated title to the property partitioned to her.
In order to hold that the claim was extinguished altogether, it is necessary to construe the partition agreement as a gift by Mrs. Hickman to the community generally, including the community creditors whose claims were assumed by Mr. Hickman, an ft from which the partition agreement expressly provided that her portion of the property should be free. The agreement does not expressly mention Mrs. Hickman’s claim, or provide what effect thereon the partition shall have, further than that in so far as Mr. Hickman personally or his portion of the property is concerned, Mrs. Hickman has no further right or claim. We must therefore determine the effect of the agreement in this regard from its other provisions and the surrounding circum*843stances, in so far as they may throw light upon the intention of the parties. From these facts and provisions, we have the following: Mrs. Hickman had a valid claim against the community estate. Mr. Hickman was unwilling to recognize this claim in a division of the estate. Mrs. Hickman was willing to accept the portion set aside to her in full both of her interest in the estate and of any other claims she might hold against Mr. Hickman or any of the property set apart to him; he, however, assuming certain community debts, including that of the bank, and the property set apart to Mrs. Hickman being free of such debts. It is quite clear that it was not in the contemplation of the parties that Mrs. Hickman’s portion should ever be resorted to to discharge any of these debts. Anything she gave up in the partition constituted a part of the consideration for what she got in the partition. She contracted to get the portion allotted to her free of these community debts; and the relinquishment of her claim entered into the consideration for that obligation. Of course, that obligation was not binding upon the creditor bank. But under what equitable principle can it assert that Mrs. Hickman’s claim was relinquished as to it, where, in order to assert its rights against her property, it must deny the effectiveness as to it of the very instrument under which it must assert, if at all, the relinquishment of her claim ?
We think clearly the entire transaction negatives any purpose or intention of the parties to the agreement to cancel Mrs. Hickman’s claim in the event creditors, whose claims were assumed by Mr. Hickman, should thereafter seek to resort to her portion of the property.
This conclusion we think inevitable regardless of the fact that no additional allowance was made to Mrs. Hickman as representing this specific claim. It follows from the fact that she relinquished all claims against Mr. Hickman and his portion of the property in consideration of receiving her portion thereof free from the claims assumed by him. As between the spouses, each took the allotted portion free of the claims of the other and of community debts assumed by the other. But the facts stated will not admit, we think, of the construction that she intended to relinquish any claim she might have against the community in favor of creditors whose claims were assumed by Mr. Hickman, as between whom and her she took the property free of such claims. We therefore think that as between her and creditors whose claims were assumed by Mr. Hickman, there was a merger of her claim1 in the segregated title she received under the partition.
If this holding is inconsistent with the expression in our original opinion that the partition was in no sense a conveyance, then that expression is inaccurate to the extent of her claim. A more exact statement would be that the partition was a conveyance to her to the extent of any valid claim she might have against the community at the time of the partition, and beyond that it was merely a partition and segregation of the title.
There is nothing in this holding inconsistent with that in Boyd v. Ghent, supra. There the community creditor obtained an abstract of judgment lien upon the community property before the divorce decree was entered which decreed a lien in favor of the wife. At the time the judgment lien attached, the wife had no claim against the property other than that of a general community creditor. It is not seriously questioned that Mr. Hickman could have discharged the community debt of his wife by conveying to her community property to the value of the debt. We think the effect of the partition agreement in so far as concerned community creditors was both a satisfaction of her interest in the community estate, and a merger of her claim in the title she acquired in the partition.
Exception is also taken to that portion of the opinion limiting the amount of-offset to Mrs. Hickman’s claim “to the value of such property partitioned to her as she may have converted to her own use.” The point, in this regard, is that Mrs. Hickman was liable to community creditors for the value of all community property which was partitioned to her, whether or not converted by her. This is correct. However, the bank was not entitled to an equitable lien upon specific partitioned property, and at the same time to recover a personal judgment for the value of that property. It had the right either to have the specific property subjected to its debt, or to hold Mrs. Hickman personally liable for its value. It could not do both.
The sentence in which this quotation occurs is therefore corrected to read: Under this holding the amount of her claim should be offset against the value of the property partitioned to her other than that upon *844which the bank is seeking to establish an equitable lien.
With this modification of the opinion, the motion is overruled.
Opinion modified; motion overruled.