De La Torre v. National City Bank of New York

• Decision Date: 29 March 1940
• Docket Number: No. 3516.,3516.
• Citation: De La Torre v. National City Bank of New York, 110 F.2d 976 (1st Cir. 1940)
• Parties: DE LA TORRE v. NATIONAL CITY BANK OF NEW YORK.
• Writing for the Court: MAGRUDER and MAHONEY, Circuit , and PETERS
• Court: U.S. Court of Appeals — First Circuit

110 F.2d 976 (1940)

DE LA TORRE v. NATIONAL CITY BANK OF NEW YORK.

No. 3516.

Circuit Court of Appeals, First Circuit.

March 29, 1940.

Henry G. Molina, of San Juan, P. R. (Luis Llorens Torres and Luis Munoz Morales, both of San Juan, P. R., on the brief), for appellant.

E. T. Fiddler, of San Juan, P. R., for appellee.

Before MAGRUDER and MAHONEY, Circuit Judges, and PETERS, District Judge.

MAGRUDER, Circuit Judge.

The question on this appeal is whether the Supreme Court of Puerto Rico should be sustained in holding that real estate forming part of the community property of de la Torre and his wife is subject to attachment as security for a judgment against de la Torre on a promissory note which he executed as comaker for the accommodation of his sister in obtaining a loan. As stated in the opinion below, "This accommodation on the part of de la Torre was given without compensation or without any valuable consideration or promise of gain"; nor was the obligation assumed with the knowledge of, or ratification by, his wife. Relevant portions of the Civil Code of Puerto Rico (Ed. 1930) are copied in the footnote.¹

Our opinion on a previously considered motion to dismiss was rendered December 15, 1939, 110 F.2d 381. Since then an affidavit has been filed by the appellant making clear that the jurisdictional amount of $5,000 is presently involved.

It is curious that the point now raised as to the law of community property has not previously been adjudicated in Puerto Rico, nor, so far as appears, in the courts of Spain. In its original opinion the court below said that "the husband is an administrator with such wide and absolute powers that it is rightly asserted that as regards third parties the partnership and the husband constitute a single entity, a distinction existing only in the relations of the spouses inter se"; that "the interest of the wife in the conjugal partnership during its life is a mere expectancy or hope to receive one moiety of the liquid assets that might be left after the liquidation of the partnership." There is no doubt that this concept of the nature of the wife's interest has been in vogue among civil law commentators. See the review by White, C. J., in Garrozi v. Dastas, 204 U.S. 64, 78-83, 27 S.Ct. 224, 51 L.Ed. 369; McKay, Community Property, 2d Ed., §§ 1096-1108. General expressions, cited by the court below, from the texts of the Spanish commentators Manresa and Scaevola look the same way. 9 Manresa, Comentarios al Código Civil Español (4th Ed. 1930) pp. 571, 579. 22 Scaevola, Código Civil, page 236. The appellant, however, refers to other passages from these writers which have more specific reference to obligations gratuitously assumed by the husband for accommodation of a third person, with no benefit accruing to the marital partnership, and which seem to indicate that the community property would not be subject to attachment or execution on account of debts of that character.²

In Warburton v. White, 176 U.S. 484, at page 497, 20 S.Ct. 404, at page 409, 44 L.Ed. 555, in commenting on the system of community property instituted by the statutes of the State of Washington, the court said: "It is a misconception of that system to suppose that because power was vested in the husband to dispose of the community acquired during marriage, as if it were his own, therefore by law the community property belonged solely to the husband. The conferring on the husband the legal agency to administer and dispose of the property involved no negation of the community, since the common ownership would attach to the result of the sale of the property." Again, in Arnett v. Reade, 220 U.S. 311, 31 S.Ct. 425, 426, 55 L.Ed. 477, 36 L.R.A.,N.S., 1040, it was held that a New Mexico statute providing that both husband and wife must join in the conveyance of community real estate, did not, as applied to property acquired prior to the passage of the statute, impair the husband's vested property rights. The Supreme Court of the state had held the contrary, on the ground that the wife's interest in the community property had theretofore been "a mere expectancy". In the opinion of the court Mr. Justice Holmes said (220 U.S. at pages 319, 320, 31 S.Ct. at page 426, 55 L.Ed. 477, 36 L.R.A.,N.S., 1040):

"The statement also directly contradicts the conception of the community system expressed in Warburton v. White, 176 U.S. 484, 494, 20 S.Ct. 404, 44 L.Ed. 555, 559, that the control was given to the husband, `not because he was the exclusive owner, but because by law he was created the agent of community.' And notwithstanding the citation in Garrozi v. Dastas, 204 U.S. 64, 27 S.Ct. 224, 51 L.Ed. 369, of some of the passages and dicta from authors and cases most relied upon by the court below, we think it plain that there was no intent in that decision to deny or qualify the expression quoted from Warburton v. White. See Garrozi v. Dastas 204 U.S. 78 27 S. Ct. 224, 51 L.Ed. 369. Los bienes que han marido y mujer que son de ambos por medio. Novisima Recopilación, Bk. 10, title 4, Law 4.

"It is not necessary to go very deeply into the precise nature of the wife's interest during marriage. The discussion has fed the flame of juridical controversy for many years. The notion that the husband is the true owner is said to represent the tendency of the French customs. 2 Brissaud, Hist. du Droit Franç. 1699, n. 1. The notion may have been helped by the subjection of the woman to marital power; 6 Laferrière, Hist. du Droit Franç. 365; Schmidt, Civil Law of Spain and Mexico, arts. 40, 51; and in this country by confusion between the practical effect of the husband's power and its legal ground, if not by mistranslation of ambiguous words like dominio. See United States v. Castillero, 2 Black, 1, 17, 227, 17 L.Ed. 360, 400. However this may be, it is very plain that the wife has a greater interest than the mere possibility of an expectant heir. For it is conceded by the court below and everywhere, we believe, that in one way or another she has a remedy for an alienation made in fraud of her by her husband. Novisima Recopilación, Bk. 10, title 4, Law 5; Schmidt, Civil Law of Spain and Mexico, art. 51; Garrozi v. Dastas, 204 U.S. 64, 78, 27 S.Ct. 224, 51 L.Ed. 369, 378."

More recently the Supreme Court has had occasion to consider the nature of the wife's interest in community property under the statutes and decisions in a majority of the states of this country having the community property system, and has concluded in each instance that the wife's interest is such that for the purpose of the federal income tax the income from community property may be reported one-half by the husband and one-half by the wife. Washington, Poe v. Seaborn, 282 U.S. 101, 51 S.Ct. 58, 75 L.Ed. 239; Arizona, Goodell v. Koch, 282 U.S. 118, 51 S.Ct. 62, 75 L.Ed. 247; Texas, Hopkins v. Bacon, 282 U.S. 122, 51 S.Ct. 62, 75 L.Ed. 249; Louisiana, Bender v. Pfaff, 282 U.S. 127, 51 S.Ct. 64, 75 L.Ed. 252; California, United States v. Malcolm, 282 U.S. 792, 51 S.Ct. 184, 75 L. Ed. 714, based on amendments of the California statutes made since the contrary result was reached in United States v. Robbins, 269 U.S. 315, 46 S.Ct. 148, 70 L.Ed. 285.

The liability of community property for debts of the husband has been litigated in many of these states. In III Vernier, American Family Laws (1935), pages 223, 224, it is stated:

"Except in Arizona and Washington, the general rule seems to be that the husband's creditors may look to the community property for the satisfaction of liabilities incurred by the husband, whether before or after marriage, in tort or in contract, as manager of the community or in his individual separate capacity. This follows naturally from the California conception that the husband owns the community property, and perhaps in the other jurisdictions as a practical scheme to make the system function fairly. But the result is not always strictly logical. Though the joinder of both spouses may be required in a conveyance of community real property, the husband may indirectly dispose of the same by charging it with his separate obligations. Though the wife may be conceded to have a present vested interest in community property, such interest may be seized and sold to satisfy obligations from which neither she nor the community derived any benefit. The Louisiana statute * * * seems to forbid the husband's premarital creditors attacking the community fund. An early decision, however, holds that the community property is liable for the husband's antenuptial debts, and that this provision applies only to a division of the property upon dissolution of the community, at which time the wife is entitled to reimbursement. * * *

"The Washington court, consistent with its entity theory of the community, holds that the community property is liable for `community' obligations only. These are, roughly, obligations incurred (ordinarily, of course, by the husband) in tort or contract for the benefit of the community or while managing the community * * * Arizona now appears to have adopted in full the Washington view * * * The result in Arizona is largely based upon the wording of the local statute under which community property is liable for `community debts' contracted by the husband. In these two jurisdictions, debts incurred by the husband during marriage are presumed to be community obligations. The Arizona and Washington rule goes a long way in the direction of equal rights, and is more consistent with the recognition that the wife has a present vested interest in community property. But it enables the husband without separate property to develop extensive community assets, yet to escape during marriage just contractual and tortious obligations."

In Washington it has long been settled that community property cannot be taken in satisfaction of the separate tort or contract obligations of the husband. Brotton v. Langert, 1 Wash. 73, 23 P. 688; ...