Mitchell v. American Reserve Ins. Co.

• Decision Date: 15 September 1980
• Citation: 110 Cal.App.3d 220,167 Cal.Rptr. 760
• Court: California Court of Appeals Court of Appeals
• Parties: Jane S. MITCHELL, Plaintiff and Respondent, v. AMERICAN RESERVE INSURANCE COMPANY, Successor of Resolute Insurance Company, and Dan Majors, Defendants and Appellants. Civ. 58273.

Page 760

167 Cal.Rptr. 760

110 Cal.App.3d 220

Jane S. MITCHELL, Plaintiff and Respondent, v. AMERICAN RESERVE INSURANCE COMPANY, Successor of Resolute Insurance Company, and Dan Majors, Defendants and Appellants.

Civ. 58273.

Court of Appeal, Second District, Division 2, California.

Sept. 15, 1980.

Hearing Denied Nov. 26, 1980.

Rehearing Denied Oct. 9, 1980.

Jonas, Donahue, Kinigstein & Hoffman by Richard N. Rust, Los Angeles, for defendants and appellants.

Albert A. Dorn, Los Angeles, for plaintiff and respondent.

ROTH, Presiding Justice.

Respondent was married to Will M. Mitchell in 1935 and they resided in California from and after 1937. In June of 1971, the couple purchased a residence in Los Angeles County, title to the property being taken in joint tenancy.

In October of 1973, Will, without the joinder or knowledge of respondent, executed a promissory note in the amount of $10,000, secured by a trust deed on the residence. His purpose in so doing was to induce appellant to issue a bail bond in favor of a third party, with the understanding liability under the note would arise if the bond were forfeited.

About two years later, respondent first became aware of this transaction, when she was attempting to sell the residence. Title at that time, and from some two or three months earlier, was held solely by respondent following Will's execution in her favor of a quit claim deed covering his interest.

In spite of the encumbrance, respondent sold the residence to one Bilofsky on August 26, 1977, and as part of that transaction instituted this action September 1, 1977, to quiet title or to have declared that appellants had no interest in the property. After trial without a jury, a judgment was entered determining, inter alia, that the bail bond note and trust deed were void.

In so deciding, the trial court relied upon its finding the residence property was the community property of the spouses and upon its perception of the effect of Civil Code section 5127 in view of that and the other facts hereinabove recited. Accepting the trial court's finding, we are nevertheless persuaded its ultimate conclusion was in error.

The statute in question provides in pertinent part that:

"Except as provided in Sections 5113.5 and 5128, either spouse has the management and control of the community real property, whether acquired prior to or on or after January 1, 1975, but both spouses either personally or by duly authorized agent, must join in executing any instrument by which such community real property or any interest therein is leased for a longer period than one year, or is sold, conveyed, or encumbered; * * *." ¹

In the context of a conveyance, the section has been understood to mean that "a deed to community real property for a valuable consideration, executed without the wife's consent, while ineffective as to her interest, is valid and binding as to the husband's half interest. * * * In such a case the conveyance of the wife's one-half interest without her consent is not void but voidable * * *." (Gantner v. Johnson (1969) 274 Cal.App.2d 869, 876-877, 79 Cal.Rptr. 381, 386.)

By analogy, where the case involves an encumbrance, the power of the consenting spouse extends in absolute terms no further than to burden his or her own interest, leaving in the nonconsenting spouse the ability to remove the encumbrance insofar as it relates to that spouse's interest. But what is removed is only the encumbrance, without any effect upon the underlying obligation...