Schramm v. Steele

• Decision Date: 21 July 1917
• Docket Number: 13521.
• Court: Washington Supreme Court
• Parties: SCHRAMM v. STEELE et al.

166 P. 634

97 Wash. 309

SCHRAMM v. STEELE et al.

No. 13521.

Supreme Court of Washington, En Banc.

July 21, 1917

Appeal from Superior Court, King County; Everett Smith, Judge.

Suit by Arthur Schramm, Jr., as trustee, against John Steele and others. Defendants' separate demurrers were sustained to the complaint, judgment of dismissal entered, and plaintiff appeals. Affirmed.

Aust &amp Terhune, of Seattle, for appellant.

Chas F. Munday, Scott Calhoun, and John A. Homer, all of Seattle for respondents.

ELLIS, C.J.

Suit in equity in the nature of a creditors' bill to set aside as fraudulent a transfer of personal property made by defendant John Steele to his wife, Florence Steele, and for other equitable relief.

Plaintiff alleges, in substance, that on January 8, 1916, a judgment for $3,000 was entered in favor of Robert H. Wilson against John Steele in the superior court of King county upon complaint of Wilson against Steele for alienating the effections of Wilson's wife; that on January 11, 1916 the judgment was assigned by Wilson to Schramm, plaintiff in this action; that the cause of action upon which the Wilson judgment was based accrued long prior to February 10, 1915, and that defendants John Steele and Florence Steele are, and at all times material were, husband and wife; that as a marital community they are the owners of described personal property worth about $6,000; that after February 9, 1915, John Steele without consideration secretly, and for the purpose of evading payment of Wilson's claim, transferred to his wife his community interest in all of their community personal property; that no bill of sale or other instrument evidencing such conveyance was ever filed for record; that on November 29, 1915, defendants Steele and wife executed to defendant E. M. Smithers a chattel mortgage for $6,000 covering all of their personal property; that they were not indebted to Smithers in excess of the sum of $1,000; that the mortgage was given pursuant to a secret agreement between defendants to so incumber the community property as to make impossible the collection of any judgment which Wilson might obtain against Steele; that the title was thus so clouded and apparently incumbered as to make the property wholly unsalable on execution; that plaintiff has no remedy at law; and that defendant John Steele has no property except his interest in the community personal property.

The prayer is that defendants be required to make disclosure of their dealings with the community property; that Florence Steele give an accounting of all property and money received by her for and on account of the community; that all transfers made by Steele to his wife be declared null and void, and all personal property of defendants Steele be decreed to be community property; that the amount owing to Smithers be ascertained, and that he be required to satisfy his mortgage upon payment of such sum; and that a receiver be appointed to conserve the community property until subjected to levy under plaintiff's execution.

Defendants separately demurred to the complaint upon the ground that the facts stated are insufficient to constitute a cause of action. The demurrers were sustained. Plaintiff electing to abide by his pleading, judgment of dismissal was entered. He appeals.

But two questions are presented: (1) Is the community property of the marital community subject to execution for the payment of a judgment against the husband alone for a tort committed by him alone, not in connection with the community business nor in furtherance of the community interest? (2) Is the complaint fatally deficient through lack of an allegation that the transfer was made after appellant's judgment was obtained?

There are three lines of our own decisions all having a direct bearing upon the first question and creating an impasse which necessitates the overruling of modification of some one of the three.

In the following cases this court has held that the community personal property can be sold on execution to satisfy a judgment against the husband for his separate debt: Powell v. Pugh, 13 Wash. 577, 43 P. 879; Gund v. Parke, 15 Wash. 393, 46 P. 408; Morse v. Estabrook, 19 Wash. 92, 52 P. 531, 67 Am. St. Rep. 723. These decisions have never been followed in any case, nor, so far as we have been able to find, have they even been cited on this point in any of our later decisions. The majority opinion in Powell v. Pugh, Judge Gordon dissenting, is based upon a decision of the territorial court ( Andrews v. Jaqua, 3 W. T. 286), in which the bare statement is made and based upon the statute defining community property (which so far as here concerned was the same then as now) without discussion. The other two decisions merely follow the Powell Case.

In the following cases this court has held that a person having a claim for damages sounding in tort is a creditor of the tort-feasor within the meaning of the statute of 13 Eliz. C. 5, which is the prototype of all statutes--touching fraudulent conveyances, and is the common law of this state; that is to say, the tort-feasor is a debtor of the injured person within the meaning of the law of fraudulent conveyances: Bates v. Drake, 28 Wash. 447, 457, 68 P. 961; Sallaske v. Fletcher, 73 Wash. 593, 132 P. 648, 47 L. R. A. (N. S.) 320, Ann. Cas. 1914D, 760; Allen v. Kane, 79 Wash. 248, 251, 140 P. 534; Henry v. Yost, 88 Wash. 93, 96, 152 P. 714. These cases involved fraudulent conveyances of real estate, but, touching the question who is a creditor and who is a debtor, that circumstance is obviously immaterial.

The third line of decisions involves torts committed by the managing member of the community. In the following cases with court has held that community real estate cannot be subjected to levy to satisfy a judgment for the husband's tort which was not committed in the management of the community business nor for the benefit of the community: Brotton v. Langert, 1 Wash. 73, 23 P. 688; Day v. Henry, 81 Wash. 61, 142 P. 439; Wilson v. Stone, 90 Wash. 365, 156 P. 12. The opinion in Day v. Henry expressly and definitely places these decisions on the ground that, when the tortious act is wholly outside the scope of the husband's authority as manager of the community property, there is no room for the application of the doctrine of respondeat superior, and not upon the fact that the community property sought to be levied upon was realty. There is no intimation that a different rule would prevail in case of personalty. The argument in the Day Case definitely precludes that view.

In the following cases this court has held that a liability for the husband's tort which is committed in the management or prosecution of the community business can be enforced against the community property, whether real or personal, but only because he is the agent acting for the community. These cases rest squarely upon the rule respondeat superior: Kangley v. Rogers, 85 Wash. 250, 147 P. 898; Woste v. Rugge, 68 Wash. 90, 122 P. 988; Milne v. Kane, 64 Wash. 254, 116 P. 659, 36 L. R. A. (N. S.) 88, Ann. Cas. 1913A, 318; McGregor v. Johnson, 58 Wash. 78, 107 P. 1049, 27 L. R. A. (N. S.) 1022.

In not a single case has this court held or intimated that community property, whether real or personal, can be subjected to levy to satisfy a judgment against the husband alone for a tort committed by him alone, and not in connection with the community business nor for the benefit of the community. On the contrary, the decisions above cited involving torts committed by the husband by necessary implication limit the liability of the community property, whether real or personal, for such torts, to cases where it can be said that the tort was committed in the management of the community property or for the benefit of the community. This court is thus definitely committed to the doctrine that in such cases the liability of the community property of whatever kind rests solely upon the statutory agency of the husband, and only exists where the rule respondeat superior can be soundly applied.

Invoking the first two of these lines of decision, appellant's argument syllogistically stated is this. Under the first line the community personalty is liable for the separate debt of the husband. Under the second line a liability for damages for the tort of the husband is a debt of the husband within the meaning of the law of fraudulent conveyances. Therefore the community personal property is subject to execution under a judgment for the husband's tort in whatever connection committed. It is plain that if there is any liability of the community personal property for the husband's acts, whether contractual or tortious, not performed in connection with the community business nor for common benefit it must be rested upon the provision of the statute (Rem. 1915 Code, § 5917), giving the husband the management, control, and disposition of the community personalty, and it must be because that provision gives the husband the absolute proprietary right in such property and the wife no present right but only a contingent expectancy. Such is in fact the sole basis of the decision in Powell v. Pugh, supra, and the two cases following it. Simple candor therefore compels the admission that, if that view be sound, the community personal property can be subjected to the payment of the husband's separate liability for tort just to the same extent that it can be subjected to payment of his separate contract debt. Either the husband has such an absolute proprietary interest in the community personalty or no act of his, whether contractual or tortious, can bind such property except through his agency for the community. To rest a distinction in this...