Bank of America National Trust & Savings Ass'n v. Mantz ( 1935 )

THOMPSON, J., Dissenting.

I dissent. I cannot agree with the conclusion reached in this case for two reasons. First: The action being in the nature of a creditor’s bill to subject property awarded to the wife as community property prior to the time when the judgment which is the basis of the action was rendered it was incumbent upon the plaintiff to allege and prove that the obligation was incurred by the husband for the benefit of the community. (Frankel v. Boyd, 106 Cal. 608, 614 [39 Pac. 939], McKannay v. McKannay, 68 Cal. App. 701 [230 Pac. 214], and Deacon v. Deacon, 101 Cal. App. 195 [281 Pac. 533].) In other words, the former wife should not be compelled, as a matter of equity, to pay an indebtedness incurred by her former husband, if the indebtedness was not incurred for the benefit of the community. Unless this be recognized as the true' rule a wife with a righteous complaint for divorce pending will be liable for the debts created by the husband prior to the' decree, regardless of whether the effect will be to deprive her of her entire share of the community. The record in this case fails to establish that the obligation was incurred for the benefit of the community.

Second: The trial court found upon substantial evidence that the plaintiff was guilty of laches. For the sake of its own business, according to the finding, it neglected without any justification or excuse to enforce payment by Ebner or by Gorman and allowed collateral security worth $30,000 to depreciate until it had a value of only $2,000; that although it had opportunity to realize on the collateral it wilfully failed to liquidate or to cause the loan to be paid. The finding specifically says: “ ... that, the aforesaid conduct and delay on the part of said plaintiff bank and its said predecessors in interest, and each of them, in failing to liquidate or realize the value of said collateral security within a reasonable time after the due date of said promissory note, to wit, October 7, 1928, or to supervise said loan in any diligent or businesslike manner, has irreparably prejudiced this defendant and her above-described real property in that said conduct on the part of said plaintiff bank, and its said predecessors in interest, and each of them, has resulted in the claim made by said plaintiff against defendant ...” and that she “had no knowledge whatsoever at any time prior to the spring of the year 1932” that Gorman had executed the guaranty. The trial court was fully justified in considering all of the equities of the situation, and it having concluded the facts by its findings the judgment should be affirmed.

Shenk, J., concurred.

Rehearing denied. Shenk, J., Thompson, J., and Conrey, J., voted for a rehearing.