Schoenfeld v. Norberg

• Decision Date: 30 September 1970
• Citation: 90 Cal.Rptr. 47,11 Cal.App.3d 755
• Court: California Court of Appeals Court of Appeals
• Parties: Bruce SCHOENFELD and Lucille E. Schoenfeld, Plaintiffs and Appellants, v. J. R. NORBERG, Defendant and Respondent. Civ. 27388.

Page 47

90 Cal.Rptr. 47

11 Cal.App.3d 755

Bruce SCHOENFELD and Lucille E. Schoenfeld, Plaintiffs and Appellants, v. J. R. NORBERG, Defendant and Respondent.

Civ. 27388.

Court of Appeal, First District, Division 4, California.

Sept. 30, 1970.

Gross, Gross, Rose & Schwartz, by Harry M. Gross, Oakland, for appellants.

Warwick, Devane & Warwick, by Benjamin Warwick, Oakland, for respondent.

CHRISTIAN, Associate Justice.

Respondent Norberg took a money judgment in the San Francisco Superior Court against Bruce Schoenfeld, one of the appellants. A writ of execution, issued for enforcement of that judgment, was levied upon appellant's residence in Marin County. Thereupon appellants commenced an action in the Marin Superior Court, alleging that their property was a protected homestead and seeking an injunction against the sale thereof. The Marin court gave judgment for appellants; the appellante court reversed (Schoenfeld v. Norberg (1968) 267 Cal.App.2d 496, 72 Cal.Rptr. 924), holding that although the homestead was valid the sale should not have been restrained where there had been no determination of the value of the property and 'Norberg, when restrained, still had six days left in which to retrace his steps and follow the statutory outline for the satisfaction of his judgment.' (267 Cal.App.2d at p. 499, 72 Cal.Rptr. at p. 927.)

The 'statutory outline' referred to by the Court of Appeal appears in Civil Code sections 1245 to 1259. According to section 1245, the judgment creditor may 'apply to the superior court of the county in which the homestead is situated' for an appraisal which may result in a sale after partition (§ 1253) or otherwise (§ 1254) if the property is found to have value exceeding the exempted amount.

Respondent thereupon petitioned the Marin court ¹ for appraisal and sale of the homestead. By stipulation a single appraiser was appointed; he reported the fair market value of the property to be $35,000. On respondent's motion, the court ordered sale of the homestead property. The order recited that 'said premises have an appraised value of THIRTY FIVE THOUSAND DOLLARS ($35,000.00), an amount that exceeds the aggregate amount of all liens and encumbrances on the property by more than the applicable homestead exemption of TWELVE THOUSAND FIVE HUNDRED DOLLARS ($12.500.00).' ² Liens and encumbrances on the premises were found to total $9,099.00 and the property was found not to be subject to division without material injury. The order provided for a minimum bid of $21,599.00 (the amount of the homestead exemption plus the aggregate amount of all liens and encumbrances on the property). The community property or joint tenancy character of the property was disputed. Nevertheless the court expressly withheld determining 'at this time what portion of (the property) is subject to the sale.'

The record shows that respondent's petition for appointment of an appraiser was filed before the remittitur was issued in the former appeal. Appellants therefore contend that the court was without jurisdiction to entertain the petition. But the trial court took no action prior to the issuance of the remittitur. Thus, the question is not of an act in excess of jurisdiction, but of possible premature filing. Filing of the petition before the issuance of the remittitur did not prejudice any of appellants' substantial rights; the question will in any event not be considered on appeal where it was not raised in the court below. (Kelley v. Upshaw (1952) 39 Cal.2d 179, 188, 246 P.2d 23; Mears v. Jeffry (1947) 80 Cal.App.2d 610, 616, 182 P.2d 294.)

Appellants assert that the petition for the appointment of appraisers was not served as required by Civil Code section 1248. But appellants appeared and resisted the petition on the merits, while claiming that proper notice had not been given. The notice point was waived by making a general appearance. (1 Witkin, Cal. Procedure, Jurisdiction, § 66, p. 337.)

Appellants' main contention is that it was error for the court to order a sale without determining whether the property is community or joint tenancy. Civil Code sections 1245 to 1259 make no mention of the procedure to be followed in executing upon homesteaded property held in cotenancy between the judgment debtor and another. Nevertheless, we have concluded that appellants' contention must be sustained. If the levy is upon community property, the entirety is subject to execution for the husband's debt. (Grolemund v. Cafferata (1941) 17 Cal.2d 679, 689, 111 P.2d 641; In re Rauer's Collection Co. (1948) 87 Cal.App.2d 248, 256, 196 P.2d 803.) But if the property is held in joint tenancy, the wife's interest, being her separate property, is not liable for the husband's debt; in that event, only the husband's interest may be sold. (Strangman v. Duke (1956) 140 Cal.App.2d 185, 188, 295 P.2d 12; In re Rauer's Collection Co., Supra.) In the latter situation the sale would effect a severance of the joint tenancy, and the purchaser would become a tenant in common with the wife. (Strangman v. Duke, Supra.) Partition could then be obtained. (Code Civ.Proc., § 752.)

The order made by the court in the present case is self-contradictory; it authorized the sale of the entire property, but at the same time specified that 'it is not determined at this time whether the property is a true joint tenancy or whether it is community property and it is not determined at this time what portion of it is subject to the sale.' Without determining that the property was community, the court could not effectively order the entirety sold to satisfy a judgment against the husband. Even though appellants assertedly took title by means of an instrument in form of a joint tenancy deed, that from would not be conclusive evidence that the property was held in joint tenancy; if it could be shown that the parties intended to hold the property as community, that intent would prevail. (In re Estate of Baglione (1966) 65 Cal.2d 192, 195, 53 Cal.Rptr. 139, 417 P.2d 683; Tomaier v. Tomaier (1944) 23 Cal.2d 754, 146 P.2d 905.) Until the nature of the judgment debtor's interest is determined, any execution sale would be hampered by the inability of any prospective bidder to ascertain what he was to bid on.

It is true that two decisions (Blue v. Superior Court (1956) 147 Cal.App.2d 278, 283--284, 305 P.2d 209, and Strangman v. Duke, Supra, 140 Cal.App.2d 185, 192--193, 295 P.2d 12) indicate that the court should not, in a proceeding for appointment of and appraiser and sale of homestead property under execution, determine the extent of the debtor's interest in the property; it is broadly suggested in the two decisions that the court should merely order the undetermined interest sold, leaving the purchaser to bring a subsequent action in order to find out what he had bought. But both cases dealt with fraudulent conveyances, and Civil Code section 3439.09 specifically gives a creditor the choice of attacking a fraudulent conveyance either by having the conveyance set aside, or by disregarding the conveyance and levying execution upon the property conveyed; it was held that if the issue of the effectiveness of the claimed fraudulent conveyance could be decided in an execution proceeding, section 3439.09 would become meaningless. (Blue v. Superior Court, Supra, 147 Cal.App.2d at p. 284, 305 P.2d 209.) Moreover, it would create a 'practical limitation upon the bidding' if the purchaser were required, in a subsequent action, to establish that the order of sale was not res judicata as to the fact of fraud. (Strangman v. Duke, Supra, 140 Cal.App.2d at p. 192, 295 P.2d 12.)

In the present case, there is no issue of a fraudulent conveyance; hence, the rationable of Blue and Strangman is inapplicable. Moreover, failure to define the interest being sold would itself, in the present circumstances, create a 'practical limitation upon the bidding'; any purchaser would be buying an undetermine interest and would be forced to pursue a subsequent action against the cotenant to ascertain what he bought. Therefore, where the issue is whether property held by husband and wife is joint tenancy or community, the trial court may make that determination and specify in the order the interest being sold. (See In re Rauer's Collection Co., Supra, 87 Cal.App.2d 248, 196 P.2d 803.) Of course, the cotenant would not be bound by the determination unless he had been made a party to the proceeding. We note that Civil Code section 1248 makes no provision for serving the contenant in order to bring his rights before the court for determination, but joinder of the cotenant may be compelled by the court where necessary to a complete determination of the controversy. (Code Civ.Proc. § 389.) In the present case the cotenant wife is already a party.

We conclude, therefore, that the court erred in not determining whether the property was community or joint tenancy before ordering a sale; the judgment must be reversed for this determination.

If the property is determined to be joint tenancy, there is a further question of whether it can be sold under Civil Code sections 1254, 1255 and 1256. These sections provides as follows:

'If, from the (appraiser's) report, it appears to the judge that the land claimed exceeds in value, over and above all liens and encumbrances thereon, the amount of the homestead exemption, and that it can not be divided, he must make an order directing its sale under the execution.' (Civ.Code, § 1254.)

'At such sale no bid shall be received, unless it exceeds the amount of the homestead exemption plus the aggregate amount of all liens and encumbrances on the property.' (Civ.Code, § 1255.)

'If the sale is made, the proceeds thereof must be applied in the following order of priority, first, to the discharge of all liens and encumbrances, if any, on the property, second to the homestead claimant to the amount of the homestead exemption, third, to the satisfaction of...