Court Opinion

ID: 9846891
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:50:08.698486+00
Date Added: 2024-06-11T09:16:56.736574
License: Public Domain

BERNSTEIN, Justice
(dissenting).
I must disagree with the majority’s disposition of the instant case.
At the outset it is necessary to set forth a short description of the posture of this, case. In his complaint, the plaintiff, Ellis, alleged that King had conveyed land toUhlmann in consideration of the payment of $20,000, and the oral promise that Uhlmann would reconvey an undivided one-half interest in the property to Ellis; that Uhlmann refused to reconvey the property to-Ellis, and therefore Ellis asked that a constructive trust be imposed on the one-half interest in which he claimed an equitable-interest. Uhlmann’s answer denied that Ellis had any interest in the property. Although the deed from King named both Ernest Uhlmann and his wife, Billie, as-grantees, nevertheless Ellis failed to join Billie Uhlmann as a party defendant. The trial court, sitting without a jury, found for Ellis and imposed a constructive trust on a one-half interest in the property.
The majority of this court holds in part that Billie Uhlmann *153^Furthermore, the majority holds that since ■the imposition of a constructive trust on the one-half interest in the property held for •the benefit of Ellis precludes any com-munity property interest from vesting in the Uhlmanns, it was therefore unnecessary ■to join Billie Uhlmann as a defendant.
*152“ * * * never acquired a community interest in the one-half held in trust for Ellis, for this was held in trust from the date of its acquisition and therefore it never became community property (Emphasis added.)
*153I do not agree. In my opinion Billie 'Uhlmann was an indispensible party, and ■consequently failure to join her was fatal. Bolin v. Superior Court, 85 Ariz. 131, 333 P.2d 295; Howard v. Luke, 18 Ariz. 563, 164 P. 439. Let us examine the defect in the majority’s reasoning.
Crucial to their decision is the statement ■that a constructive trust fixes the title to the property at the time of its acquisition. Yet the majority fails to recognize that this is merely a legal fiction. See Healy v. Commissioner of Internal Revenue, 345 U.S. 278, 73 S.Ct. 671, 97 L.Ed. 1007. The majority, in the name of equity and justice, ■employs this legal fiction as a means to an inequitable and reprehensible end. It is •their premise that property acquired subject to a trust never becomes community property, citing Dreher v. Rohrmoser, 134 Cal.App.2d 196, 285 P.2d 285 (purchase money resulting trust); Mell v. Shrader, 33 N.M. 55, 263 P. 758 (express trust); Pappas v. Taylor, 138 Wash. 22, 244 P. 390 (constructive trust based on actual fraud) ; Mapel v. Starriett, 28 N.M. 1, 205 P. 726 (purchase ■money resulting trust). These cases relied on by the majority have one factor in common; they either deal with express trusts ■or purchase money resulting trusts in which the trustee clearly has knowledge at the time of acquisition that he is a trustee. Using the premise that the status of property becomes fixed as of the date of its -acquisition the majority reaches the erroneous conclusion that Billie Uhlmann need not be joined as a party defendant. The basis for the result in the cases cited by the majority can be found in the language of the California court in the case of In re Raphael’s Estate, 115 Cal.App.2d 525, 252 P.2d 979 (purchase money resulting trust).
“Since the referee was entitled to conclude that Raymond held only the naked legal title * * * as trustee for Harry there was no substantial property interest in Raymond which could become the community property of Raymond and Bertha under their transmutation agreement.” 252 P.2d at 984. (Emphasis added.)
Obviously the California court holds that ownership in the form of mere legal title in property is insufficient to render that property part of the community. Rather the community must acquire equitable or beneficial ownership of the property in order to obtain an interest.
However, we have often stated that our community property law is most similar to that of the state of Washington, and for that reason we have consistently followed the Washington cases. Donn v. Kunz, 52 Ariz. 219, 79 P.2d 965; Cosper v. Valley Bank, 28 Ariz. 373, 237 P. 175. Indeed, in Conley v. Moe, 7 Wash.2d 355, 110 P.2d 172, 174, 133 A.L.R. 1089, the Washington court stated what I believe to be the better rule.
“It is * * * well settled in this jurisdiction that the status of property, whether real or personal, becomes fixed as of the date of its purchase or acquisition, and remains so fixed unless changed by deed, by due process of law, or by the working of some form of estoppel. In Re Deschamps’ Estate, 77 Wash. 514, 137 P. 1009; In re Woodburn’s Estate, 190 Wash. 141, 66 P.2d 1138; In re Finch’s Estate, 198 Wash. 567, 89 P.2d 218; and Binge v. Mumm, Wash., [5 Wash.2d 446,] 105 P.2d 689.
“The foregoing specific rule enunciated in the cases cited and followed in other cases from this court particularly refers to the legal title to the property, and not directly to such interests or rights as are founded upon equitable considerations. In quite a number of our cases, which announce and follow the rules stated above, the rule is conceded that the legal title may be subject to certain *154equities, according to the fact's and circumstances of the particular case.” (Emphasis added.)
The Washington court looks to whether the community acquires the legal title, and if it does, the property is presumed to be community property.
In the instant case the deed specifically named Ernest Uhlmann and his wife Billie as grantees and, since all property acquired during coverture is presumed community property, the wife must be joined as a party. The record is clear that Uhlmann paid the $20,000 purchase price for the property and therefore, was certainly not a strawman. In addition, it may be noted that the trial court expressly found that the agreement between the parties was made in good faith.
At this point it is necessary to pose a hypothetical case in order to analyze the majority’s conclusion that property acquired subject to a contractive trust vests no interest in the community. This can best be illustrated by what I believe to be an analogous situation when dealing with a suit to compel conveyance of the property. Let us assume that the evidence of the promise to convey the one-half interest in the property to Eillis was clear and convincing. Further let us assume that this real property had always been the community property of the Uhlmanns. Would Billie Uhlmann have to be joined as an indispensible party to enforce Ellis’ claim to the one-half interest in the property ?
A.R.S. § 33-452 has a direct bearing on the resolution of this issue. It provides in part:
“A conveyance or incumbrance of community [real] property is not valid unless executed and acknowledged by both husband and wife * * * ” (Emphasis added.)
A suit in equity to compel delivery of a deed has as its objective the compulsion of those parties who are required to convey. Since A.R.S. § 33-452 invalidates a conveyance of community real property unless both spouses execute and acknowledge the instrument of conveyance, it is obvious that both marital partners must be joined in a suit to compel the conveyance of the property. Because the majority of this court relies on the conclusion that the community only has an interest in property in which it has acquired equitable rather than legal title the result may well lead to an emasculation of A.R.S. § 33-452.
The basis of the majority’s rationale is the splitting of the concept of title into-two compartments; one equitable, the other legal. Unfortunately, such an analysis leads to an unwise result. For example, once a. purchase contract for realty is executed the doctrine of equitable conversion operates so that the seller merely retains legal title and the buyer acquires equitable title. See Smith v. Tang, 100 Ariz. 196, 412 P.2d 697; Lebrecht v. Beckett, 96 Ariz. 389, 396 P.2d 13; Strahan v. Haynes, 33 Ariz. 128, 262 P. 995; Shreeve v. Greer, 65 Ariz. 35, 173 P.2d 641. Certainly the wife’s indispensibility cannot depend on whether the-property is being acquired or conveyed. To follow the majority opinion to its logical conclusion would mean that where partners in the marital community decide-to sell a parcel of real property the wife-need only execute and acknowledge the purchase and sale contract. For once the contract is signed equitable title would no-longer be in the community, and in a subsequent suit to compel conveyance of the deed joinder of both spouses would be unnecessary. Such a result, however, is clearly unwarranted in light of the mandate of A.R.S. § 33-452, which requires the wife to execute and acknowledge the conveyance. A conveyance is manifested by a deed.
The purpose of A.R.S. § 33-452 is not merely, as the majority states, to prevent the husband from defrauding the wife, but also to recognize the equality of the wife’s rights in the disposition of the community real property. As we said in Shaw v. Greer, 67 Ariz. 223, 228, 194 P.2d 430, 433.
*155“Our married woman statutes and community property laws were adopted for the purpose of establishing equality between husband and wife. Our community property law was conceived in honesty; its policy is to give to the wife in the marital community an equal dignity with the husband and to make her an equal factor in the matrimonial gains.” (Emphasis added.)
The wife’s rights in the marital community would be reduced to a nullity if a suit to compel conveyance of a deed to real property could foreclose her rights in the property without an opportunity to defend her rights. If the wife has a valid defense to the enforcement of the contract to convey, and she need not be joined in the suit, she certainly will not be able to bring her defense to the attention of the court.
In addition to the defect of the majority’s distinction between legal and equitable title, is their failure to recognize a basic legal concept. In the instant case the deed from King to Uhlmann expressly named Uhlmann’s wife, Billie, as a grantee. Where the wife is a named grantee she must be joined as a party before any of her rights in the property can be affected. Oliver v. Oliver, 216 Ga. 757, 119 S.E.2d 348; Lunsford v. Witt, 309 S.W.2d 348 (Ky.); Dane v. Daniel, 23 Wash. 379, 63 P. 268. To deprive Billie Uhlmann of her day in court amounts to a taking of her property without due process of law.1 For without Billie Uhlmann’s presence the trial court was without jurisdiction to proceed to judgment in this case.
The majority relies on Munger v. Boardman, 53 Ariz. 271, 88 P.2d 536, to conclude that Ernest Uhlmann was the agent for the community in purchasing the property, and consequently Billie Uhlmann was bound by his acts. However, Munger v. Boardman, supra, is completely distinguishable from the case before us. In that case the evidence clearly established that Mrs. Munger was in the real estate business, operated the business independent of her husband in the manner of a feme sole, and received an extension of time for foreclosing a mortgage on property which she had purchased subject to the mortgage. The record in that case revealed sufficient facts to warrant the conclusion that the wife was the husband’s agent for the community. Yet in the instant case the record is completely devoid of a scintilla of evidence indicating that Ernest Uhlmann had any authorization to act as Billie Uhlmann’s agent in dealing with the community property. In any event, Munger v. Boardman, supra, cannot support the majority’s conclusion that Billie Uhlmann need not be joined as a party, for in the Munger case both spouses were joined as parties defendant.
Finally, the majority concludes that the trial court had jurisdiction to enter judgment ordering Ernest and Billie Uhlmann to convey the one-half interest to Ellis. They hold that no error was committed because the judgment was not used to refer to Billie Uhlmann individually, but merely to identify the community. How the trial court can enter judgment against the community when the majority states that the property never became community property completely escapes my comprehension.
For these reasons I would reverse the judgment of the trial court for failure to join Billie Uhlmann as an indispensible party.

. See Justice Struckmeyer’s dissent.