Holyoke v. Jackson

Mr. Chief Jnstice Greene

delivered the opinion of the court.

The primary question involved in this-case is,'whether, subsequent to the husband and wife act of 1879, the plaintiff in error, being a husband, could, without his wife joining, make a valid contract to sell to defendant in error community property. By the provisions of the husband and wife acts passed in 1879, and previously, the husband and wife are considered as constituting together a compound creature of the statute, called a community. This creature is sometimes, though inaccurately, denominated a species of partnership. It probably approaches more-nearly to that kind of partnership called universal than to any other business relationship known to the civil or common law.

A conventional community, in a state where statutes would permit, might be contrived which would be substantially a partnership; but an ordinary legal community is, in many important particulars, quite distinct. It is like a partnership, in that some property coming from or through one or other or both of the individuals forms for both a common stock, which bears the losses and receives the profits of its management, and which is liable for individual debts; but it is unlike, in that there is no regard paid to proportionate contribution, service,. *239 or business fidelity; that each individual, once in it, is incapable of disposing of his or her interest; and that both are powerless to escape from the relationship, to vary its terms, or to distribute its assets or its profits. In fixity of constitution, a community resembles a corporation. It is similar to a corporation in this, also, that the state originates it, and that its powers and liabilities are ordained by statute. In it, the proprietary interests of husband and wife are equal, and those interests do not seem to be united merely, but unified; not mixed or blent, but identified. It is sui generis, — a creature ,of the statute. By virtue of the statute, this husband and wife creature acquires property. That property must be procurable, manageable, convertible, and transferable in some way. In somebody must be vested a power in behalf of the community to deal with and dispose of it. To somebody it must go in case of death or divorce. Its exemptions and liabilities as to indebtedness must be defined. All this is regulated by statute. Management and disposition may be vested in either one or both of the members. If in one, then that one is not thereby made the holder of larger proprietary rights than the other, but is clothed, in addition to his or her proprietary rights, with a bare power in trust for the community. This power the statute of 1873 chose to, lay upon the husband, while the statute of 1879 thought proper to take it from the husband, and lay it upon husband and wife together. As the husband’s “like absolute power of disposition as of his own separate estate,” bestowed by the ninth section of the act of 1873, was a mere trust conferred upon him as member and head of the community in trust for the community, and not a proprietary right, it was perfectly competent for the legislature of 1879 to take it from him and assign it to himself and his wife conjointly. This was done. When, therefore, in 1880, the plaintiff in error, without his wife, entered into an agreement to sell the land in question, *240 lie agreed to do what he himself, by himself, could not do, and therefore could not agree to do. To make an actual sale or conveyance without his wife, he had no power. The law says such a thing shall not be done. An agreement proposing it is in conflict with the law, and void. As the defendant in error knew of the marriage, and that the property was community property, he was a participant in an invalid transaction wherein the law charged him with knowledge of the invalidity. He was doing what he is presumed to have known was against the law. So circumstanced, he is entitled to no redress for the failure of plaintiff in error to carry out "the void contract to sell.

A second exceedingly interesting question arose in this case, and has been ably discussed upon the argument: it is the measure of damages for a breach of contract to convey lands. Our conclusions upon the other question makes any discussion of this unnecessary to a decision of the cause. We therefore decline to enter upon it.

Let the judgment of the District Court be reversed, and the cause be remanded to that court, with directions to -vacate the order setting aside the judgment of non-suit.

Hoyt, J., concurred.

On a motion for a rehearing, the opinion of the court was delivered by Mr. Chief Justice Greene, as follows:—

Community property was created by a statute of December 2, 1869, although called “ common property ” by that statute and by the statute of 1873. By the statute •of 1879 it was first denominated “community property.” The rights referred to in the thirty-first section of the act of 1879 are proprietary rights, and not such naked power of management, control, or disposition as are devolved upon any married person to be exercised in trust *241 for the community. Therefore, all the provisions of the act of 1879 which operate to create, vary, or assign powers of that description are applicable to property previously acquired. By section 8 of the statute of 1879, the husband is clothed with a certain trust in respect to community real property. The management and control of it is vested in him, not for himself, but for the community. Besides this, he with the wife is endowed with power to dispose of it. This power, too, is in trust for the community, for we must distinguish the community called into existence by the statutes from the two individuals who composed it. By a like distinction, a corporation is conceived to differ from its stockholders. When the husband, therefore, thus situated, undertakes to dispose of the community property as his own, he stands differently from the absolute proprietor of a homestead, who has the power to shift the domicile of his family at pleasure, and who is required to have his wife join, not because she is joint trustee with him, nor because he without her is not owner, but merely as a check on his power of disposition, lest certain consequences follow, injurious to the proper policy of the state. In the matter of disposing of community real property, husband and wife are, by the law of 1879, joint trustees for their mutual benefit in the community. Within the scope of their joint trust, neither can act without the other. No contract of disposition undertaken by either husband or wife, in contravention of his or her fiduciary relation to community real property, can be enforced so as to reach any such property directly or indirectly. And if, at the time of making the supposed contract, the would-be purchaser knows it to be in breach of fiduciary duty, then it is void in every aspect, and cannot be the foundation of any liability whatever.

In the case at bar the supposed contract was made without consulting the wife, without her knowledge, against her will, notwithstanding the defendant well *242 knew that under the statute she was entitled to and hound .to exercise an equal voice and responsibility in the matter with her husband.

Note. —The publication, of this case was inadvertently omitted from volume 2 of Washington Reports. — Rep.

Let the motion for a rehearing be denied.