Walker v. Fowler

Mitchell, C. J. Charles H. Walker and plaintiff Esther W. Walker have been husband and wife since 1903. In 1925 Thomas N. Fowler, one of the defendants in this case, obtained judgment in the superior court of King county, Washington, against Charles H. Walker. Execution was issued on the judgment and the real property involved in this action was levied *632 upon and sold by tbe sheriff, the judgment creditor Fowler becoming the purchaser at the sale. It is conceded, or at least not questioned, that the judgment against Charles H. Walker was upon a community obligation of himself and his wife, though she was not a nominal party to the action in which the judgment was obtained, and that such interest as the community had in the real property passed under the execution sale. Mrs. Walker, claiming that the property sold at the execution sale was her separate property, brought this action to quiet title. It appears, therefore, that the controlling question in the case is whether the real property involved was community property or the separate property of Mrs. Walker. Indeed that is the only question in the case. Upon this subject, the third finding made by the trial court is as follows: “On June 8, 1921, Eva S. Case and A. E. Case, her husband, then being the owners thereof, made, executed and delivered a warranty deed wherein Esther W. Walker was named as grantee, to the following described property: “Lot eight (8), block five (5), Thompson’s University Addition to the city of Seattle, King county, Washington, the consideration recited in said deed being the sum of $6,000, of which $1,500 was paid in cash, such money being the proceeds of funds which the said Esther W. Walker had inherited from her deceased mother; the balance of said purchase price, to wit, the sum of $4,500, was evidenced by five promissory notes aggregating that amount, secured by a purchase money mortgage, said notes and mortgage being signed by the plaintiff, Esther W. Walker, and her husband, Charles H. Walker.” In this connection it may be mentioned that the trial court further found that a certain specified portion of the mortgage indebtedness thus created was paid by *633 Mrs. Walker out of her separate funds. Further it may be stated that the evidence showed that Mr. and Mrs. Walker raised the money necessary to pay the balance of the purchase money mortgage, after the part payment of such mortgage out of her separate funds, by giving a mortgage to a third person. The conclusion of the trial court upon finding number three above set out was that Mrs. Walker, in her separate right, is the owner of an undivided one-fourth interest in the property and that Thomas N. Fowler is the owner of an undivided three-fourths interest in it. Judgment was entered accordingly, from which Mrs. Walker has appealed. A number of our cases and some from other states have been called to our attention. We need not go beyond our own cases, however, in deciding this one. It may be said that differences in the facts we have had to consider from time to time in different cases have led to what seem to be variant views upon this subject, but there is nothing of that kind to seriously interfere in the decision in this case. In Rawleigh Co. v. McLeod, 151 Wash. 221, 275 Pac. 700, it was said: “We have said in a long line of cases that the status of real property is fixed as of the time when it was acquired. Our previous holdings to that effect, fourteen cases in all, are cited in In re Brown’s Estate, 124 Wash. 273, 214 Pac. 10, and since that time we have continued with unbroken regularity to recognize the principle. Riverside Finance Co. v. Griffith, 140 Wash. 322, 248 Pac. 786; Norman v. Levenhagen, 142 Wash. 372, 253 Pac. 113; In re Williams’ Estate, 145 Wash. 19, 258 Pac. 851. See, also, In re Hart’s Estate, 149 Wash. 600, 271 Pac. 886. This is a wholesome rule and we cannot now depart from it.” The case of Katterhagen v. Meister, 75 Wash. 112, 134 Pac. 673, is in point. In that case the husband *634 claimed that the property which was acquired during coverture was his separate property because the cash payment and thereafter the purchase price note and mortgage were all paid out of his separate funds. The finding of the trial court in that case was: “That the said George Meister and Mary Meister, intestate, acquired after said marriage the following described property, to wit: . . . That the title to said lands were taímen in the name of and deeded to George Meister and Mary Meister, the intestate; that the purchase price of said property was six thousand six hundred fifty dollars ($6,650); that one thousand six hundred dollars ($1,600) of this was paid in cash out of the separate funds of George Meister, and that the remainder of said purchase price was paid by a promissory note and mortgage, signed by George Meister and Mary Meister, the intestate; that the said note and mortgage were paid by George Meister out of his separate funds.” The conclusion of the trial court in that case was that the property was “the sole and separate property of said George Meister.” In reversing the judgment of the trial court in that case, this court said: “Upon the merits of the controversy, we think the learned trial court reached a wrong conclusion in holding that the property was the separate property of George Meister. He paid $1,600 upon the purchase price from his separate funds. To that extent the property was separate. The remainder, or $5,050, was paid by the community. When the husband and wife united in the promissory note, the debt created was a community debt, and the money borrowed upon the note belonged to the community. It is not material whether they borrowed the money of a third party and paid it to the vendor or gave their note direct to him as a part of the purchase price. The rule would be the same in either case. Nor does the fact that the husband later paid the note out of his separate funds change *635 the situation. The status of the property was fixed at the time of the purchase. These views are supported by an unbroken current of decisions in this court. Yesler v. Hochstettler, 4 Wash. 349, 30 Pac. 398; Main v. Scholl, 20 Wash. 201, 54 Pac. 1125; Heintz v. Brown, 46 Wash. 387, 90 Pac. 211, 123 Am. St. 937; Ballard v. Slyfield, 47 Wash. 174, 91 Pac. 642; Denny v. Schwabacher, 54 Wash. 689, 104 Pac. 137, 132 Am. St. 1140; United States Fidelity & Guaranty Co. v. Lee, 58 Wash. 16, 107 Pac. 870. “In the case last cited, in considering the determinative principles in cases of this character, we said: “ ‘ Where property is acquired during marriage, the test of its separate or community character is whether it was acquired by community funds and community credit, or separate funds and the issues and profits thereof; the presumption always being that it is community property, but this presumption may be rebutted by proof’.” This court divided the property 1600-6650 as separate property, the remainder as community property, in that case. Counsel for appellant in the present case contend, as' we” understand, that the Katterhagen v. Meister case, supra, should be distinguished from the present one because in that case husband and wife were both named as grantees in the deed, indicating, as they say, an intention to make the real property community property, while here Mrs. Walker alone was named as grantee in the deed. It did not have that effect as to the portion represented by the cash payment of $1,600. It is obvious, however, upon a fair reading of the opinion, that naming both husband and wife in the deed as grantees, rather than only one of them, in no way whatever entered into the reasons given for holding that the property, other than the portion represented by the cash payment, was community property. *636 In Rawlings v. Heal, 111 Wash. 218, 190 Pac. 237, we reaffirmed the rule, saying: “It is now equally well settled in this state that the status of the property is fixed at the time of the purchase, and that, if the husband and wife unite in a promissory note secured by a mortgage, payable direct to their grantor as a part of the purchase price, or, by the same means, borrow the money to be used in payment from a third party, in either such event the money borrowed becomes community property, and to that extent the purchased property is community property. Katterhagen v. Meister, 75 Wash. 112, 134 Pac. 673, and cases there cited.” In the recent case of In re Parker’s Estate, 153 Wash. 392, 279 Pac. 599, the question was whether five certain pieces of real property were community property of Edward Parker and Julia A. Parker, his wife, or the separate property of the wife. The facts were that, at the time of the purchase of two of the tracts, called the McCoy place and the Joyce place, a part of the purchase price was paid in cash out of the separate funds of Mrs. Parker, and for the balance of the purchase price Mrs. Parker and her husband signed a promissory note which they secured by executing a mortgage on the property purchased. Then upon referring to the cases of Katterhagen v. Meister, and Rawlings v. Heal, supra, and setting out the holding in each of those cases, it was said: “As already stated, at the time of the purchase of the McCoy and Joyce places, notes and mortgages were given as a part of the purchase price signed by the husband and wife, and under the rule of those cases the property to that extent became community property. This was the holding of the superior court, and it is here approved.” The cases just referred to are decisive of the present one. *637 Counsel for appellant calls attention to a statement in Riverside Finance Co. v. Griffith, 140 Wash. 322, 248 Pac. 786, to the effect that the circumstance that, in purchasing a piece of real property acquired by the husband after the sale of his business (private business owned by him in his own separate right), a mortgage was given signed by both himself and his wife to the vendor for a portion of the purchase price, did not render the property community property. To the extent that the statement embraces that portion of the property represented by the amount of the purchase money mortgage, we are satisfied it is at variance with our earlier cases referred to herein, out of harmony with our subsequent case of In re Parker’s Estate, supra, and is hereby overruled. In our opinion the judgment in this case is correct and should be and is affirmed. Millard, Parker, Tolman, Main, and French, JJ., concur.