McCLENNY v. Leslie D. Vaughn, Receiver. (1964)

James R. McClenny, defendant in a divorce action, petitions this court for writs of prohibition and mandate. Petitioner's contention is that the death of his wife during the pendency of the divorce action terminated the action, leaving the divorce court without jurisdiction to determine the community property interests of the parties and title to certain parcels of real property. Because of the complexity of the case and the seriousness of the issue involved, we granted the alternative writs.¹

A chronological resume of the history of this complex and protracted litigation may be summarized as follows: On October 5, 1961, Dora S. McClenny filed an action for divorce on the grounds of extreme cruelty in the County of Los Angeles. In her complaint Mrs. McClenny alleged certain property of the parties to be community property and described property which she alleged might be community property or in which Mrs. McClenny claimed to have a community property interest, and prayed that the court award to her all of the community property. Petitioner, in his answer, admitted to some community property interest in the properties of the parties, admitted that some property was community property, but denied that other property was community or that Mrs. McClenny had any community interest therein. Subsequently, orders were made requiring petitioner to make payments for the support of a minor child in Mrs. McClenny's custody, and for the payment of Mrs. McClenny's medical, hospital and other required expenses. Upon petitioner's failure to comply with these orders, the court, on March 5, 1962, appointed a receiver to take possession, custody and control of all of the assets and properties of both parties, in order to provide said care, support and maintenance. On August 2, 1962, the court expanded this order and vested in the receiver title to all assets and properties of the parties.

On December 17, 1962, an interlocutory decree of divorce was entered in favor of Mrs. McClenny. The court, at this time, did not determine the community rights of the parties, but reserved power to make further orders as are necessary and proper concerning the division of the community properties of the parties.

Matters became involved when, on August 7, 1963, prior to any hearing or adjudication relative to rights of the parties in the property herein involved, Mrs. McClenny died. Thereafter, on August 13, 1963, Farmers and Merchants Trust Company of Long Beach, as Special Administrator of the Estate of Dora S. McClenny, filed a complaint in intervention in the divorce action. In this complaint it is alleged that title to all the property of the parties is in the receiver, pursuant to order of the divorce court; that Mrs. McClenny left a will whereby she provided for the disposition of her entire property and estate, both real and personal, to Farmers and Merchants Trust Company, in trust, for the benefit of the three minor children of the parties; that defendant husband ‘as purported debtor in possession is the petitioner (filed 3/14/63) in a certain Federal Bankruptcy Arrangement proceeding now pending in the United States District Court, * * *'²

In Paragraph X of the Petition in Intervention it is alleged: ‘That in order to administer the estate of said decedent Dora S. McClenny, it is the duty of plaintiff in intervention to obtain the control and possession of all of the property and assets belonging to the estate of the said Dora S. McClenny. That in order to obtain such possession and control by plaintiff in intervention, it is a prerequisite that this Court make a determination of the community property of said plaintiff and defendant, followed by an award of said community property in such manner as the Court deems appropriate.’ Paragraph XIII states:

‘That a bona fide and genuine dispute exists between plaintiff in intervention as the successor in interest of plaintiff Dora S. McClenny and defendant James R. McClenny, individually and as purported debtor in possession, and defendant Leslie D. Vaughn, as Receiver. That it is necessary for this Court to make a determination and declaration of the community property of the parties in order to complete disposition of the within litigation and in order to allow plaintiff in intervention to properly administer the estate of decedent Dora S. McClenny.’ Paragraph XIV follows: ‘The Receiver, Leslie D. Vaughn, upon such determination, should be ordered and compelled to transfer and convey to plaintiff in intervention all such property to which the Court determines plaintiff in intervention, as special administrator (or other representative) of the estate of said Dora S. McClenny, to be entitled.’ Plaintiff in intervention prayed that the court adjudicate, declare and determine the respective rights and obligations of the parties; determine the community property and the community interest in all of the assets now held and possessed by the receiver; that all property and interests determined to be community property be awarded to plaintiff in intervention as successor in interest to the deceased, and that defendants in intervention be ordered to convey, transfer and deliver all such community property to plaintiff.

On August 14, 1963, petitioner filed a demurrer thereto and a motion to strike; and on August 17, 1963, petitioner filed a motion to dismiss alleging that once a party to a divorce action dies, the action abates; that jurisdiction of the court is limited to winding up the pending action; and that the court has no jurisdiction to make any orders other than those designed to terminate the action. On August 19, 1963, the receiver filed a cross-complaint in intervention. Petitioner made the same objections to this cross-complaint as were raised by the demurrer to the complaint in intervention. On August 20, 1963, the receiver and his attorney filed a response to petitioner's motion requesting that the Estate of Dora S. McClenny be substituted in place of Dora S. McClenny;³ that the court determine the status of the property belonging to the parties and what property be community property; that Farmers and Merchants Trust Company be permitted to intervene as the Special Administrator to protect the interest of the decedent Dora S. McClenny. On August 23, 1963, the court refused petitioner's request for dismissal of the action and termination of the receivership, and the motion for permission to file the complaint in intervention by Farmers and Merchants Trust Company along with petitioner's demurrer and motion to strike were continued to October 28, 1963.⁴

On September 4, 1963, petitioner filed in this court a petition for writs of mandate and prohibition (No. 27707) seeking an order requiring the trial court to dismiss the action because of the death of Mrs. McClenny, to terminate the receivership, and to prohibit the court from permitting the substitution of the Special Administrator as party plaintiff, and from making any decision or ruling concerning the property rights of the parties. An alternative writ issued, but after hearing was discharged and the peremptory writ was denied. (McClenny v. Superior Court, 221 Cal.App.2d 125, 34 Cal.Rptr. 287,^* decided October 11, 1963.) At oral argument upon the petition, petitioner took position that he was not suggesting that the case be ‘terminated forthwith’ but ‘that the receiver's duties are limited to the preparation of his final account and anything else that may be required, in order that his duties be terminated and all his activities be directed toward that one single purpose, with the exception that the Court does not have jurisdiction to go beyond any orders which may be required for the purpose of termination.’ He further stated that ‘we have not maintained that the receiver give up title to his property and turn anything over until the community interest is determined, and I think I announced at the very outset we are asking for very limited relief here, and the relief that we are asking for is that the court in the divorce action not determine the community interest, if any, of the estate. Now it is perfectly agreeable to us that the receiver retain possession until the community interest be determined, and in the proper forum.⁵ We never objected to that.’ These statements of petitioner were made immediately after counsel for the receiver advised the court that the trial judge had said “that he was going to see that the receivership was would up, dissolved and terminated and wasn't considering trying any title, doing anything other than was necessary to settle the accounts of the receiver and get the action terminated, and I suppose that would include under the Darter v. Magnussen decision [172 Cal.App.2d 714, 342 P.2d 528] enforcing such judgments as had been made prior to her death.” The District Court of Appeal held that in view of the stated positions of the parties, the trial court did ‘not act in excess of its jurisdiction in refusing to grant petitioner's motions seeking the immediate entry of a judgment of dismissal, with costs, and a discharge of the receiver.’

In the present proceedings, petitioner alleges that, since August 1963, nothing has been done to terminate the action and wind up the receivership. Rather, he alleges that the representation made to the District Court of Appeal by counsel for the receiver was not a true representation of the attorney making the same, nor was it the position of the trial court, as evidenced by subsequent proceedings. Petitioner points out that, subsequent to oral argument in the District Court of Appeal, the attorney for the receiver wrote a letter to his attorney, dated November 15, 1963, stating ‘You have misconstrued the Opinion of the District Court of Appeal and Mr. Miller's statement quoted in the Opinion. * * * It has always been our opinion, and Mr. Miller argued it to the trial court and argued it to the Appellate Court in our brief, that the Los Angeles County Superior Court action is the logical place to try title to property of the parties vested in the receiver and subject to the jurisdiction of that Court.’

Petitioner further alleges that, in order to settle the question of title to the property, he filed a quiet title action in Kern County, where, it is alleged, he is and at all times has been a resident, and which is the location of the real property. Farmers and Merchants Trust Company, as Special Administrator, filed a demurrer thereto, and argued successfully, that the divorce court in Los Angeles had exclusive jurisdiction, pointing out that a complaint in intervention was on file therein for the purpose of trying title. Then, on February 4, 1964, Farmers and Merchants Trust Company, as plaintiff in intervention, filed a memorandum to set for trial their contested action, referred to as ‘Intervention: Declaratory relief re rights, obligations and duties concerning property, etc. in divorce action (after Interlocutory).’

With the foregoing facts in mind and the status of the litigation at this point, petitioner complains that, since the appointment of the receiver, he has been unable to operate his business; that his home is in foreclosure, but he has been able to postpone the foreclosure sale until June 15, 1964; that unless the receivership is promptly terminated, he faces complete economic ruin and the deprivation of his property without due process of law. He aptly summarizes his dilemma as follows:

‘The result of the events of the last ten months has been to place the Petitioner in a complete legal box which, if not opened by an appropriate writ of this Court, will result in economic ruin to the Petitioner and his three children.

‘The trial court in Los Angeles County is refusing to wind up and terminate the divorce case in Long Beach. The Receiver is contending he does not know whom he should turn title over to and the case cannot be terminated until title is tried. The court in Kern County, before whom a quiet title action is pending, is being told that title is being tried in Los Angeles, and Kern County cannot try title. The District Court of Appeals [sic] is being told that no Writ of Prohibition is necessary because the trial court in Los Angeles does not intend to try title, but only intends to do what is necessary to wind up. During all this the Petitioner and his children are losing the life earnings of the Petitioner. * * * Surely, Petitioner is entitled to an Order from this Court delineating the area of jurisdiction remaining in the Los Angeles County Superior Court so that the Kern County quiet title action can proceed.’

Petitioner, therefore, asks this court to issue (1) a writ of mandate requiring respondent court, in the divorce case, to order the receiver to account and take what further steps are required to terminate the receivership; (2) a writ of prohibition prohibiting respondent court from trying title to the property of the parties; (3) a writ of mandate requiring respondent court to strike the pending complaint in intervention and cross-complaint in intervention, and to permit the trial of title in Kern County; and (4) a writ of mandate and prohibition which delineates the jurisdiction remaining in the respondent court and prohibits said court from taking any action not so allowed by this court.

I

While a court in a divorce action may not assign the separate property of one of the spouses to the other (Fox v. Fox (1941) 18 Cal.2d 645, 117 P.2d 325), it does have jurisdiction, when the issue has been presented, to determine whether the property is separate or community and to quiet title in the rightful owner. (Huber v. Huber (1946) 27 Cal.2d 784, 167 P.2d 708.) In the instant case, while the issue as to what property was the community property of the parties had been put in issue, the court made no determination or award in the interlocutory decree, or any such determination or award prior to the death of Mrs. McClenny. Because of this fact, the trial court, in the divorce action, lacks all jurisdiction to make such a determination at this date. The rule has been aptly put in Darter v. Magnussen (1959) 172 Cal.App.2d 714, 718, 342 P.2d 528, 531: ‘The death of one of the parties to a suit for divorce abates the action and terminates the jurisdiction of the court to proceed with the action or to make any further determination of property rights, alimony, costs or attorney's fees. [Citations.]⁶ However, the death of a party does not affect the court's power to take such action as may still have to be taken to enforce the property rights adjudicated by the interlocutory decree.’ (See also: Hamilton v. Hamilton (1948) 83 Cal.App.2d 771, 189 P.2d 722; Bevelle v. Bank of America (1947), 80 Cal.App.2d 333, 181 P.2d 730.)⁷

II

We now turn to the status of the receivership. Although the death of one of the parties to the divorce action abates the action except for orders already made prior to the death of one of the spouses (Darter v. Magnussen, supra, (1959) 172 Cal.App.2d 714, 342 P.2d 528), such does not have the effect of ipso facto terminating the court's jurisdiction of the receivership. The court still retains jurisdiction to settle the accounts of the receiver, to direct the disposition of assets in his hands, and to provide for the payment of the receivership costs and expenses. (Hanno v. Superior Court (1939) 30 Cal.App.2d 639, 87 P.2d 50, 75 C.J.S. Receivers § 96, pp. 741–742.) However, while the receivership was not terminated by the abatement of the divorce action, a receivership will not be permitted to continue indefinitely (Fairbank v. Superior Court (1917) 34 Cal.App. 66, 166 P. 864); and should be closed and terminated at the earliest practical moment and without unnecessary delay. (Mitchell v. Lay (C.C.A.Cal.), 60 F.2d 941.)

We find no merit in the receiver's contention that the receivership cannot be terminated until title to the property in his hands is determined by a quiet title action because he does not know, at this time, to whom to deliver the property. The law is well settled that, on the winding up of the receivership, the court has jurisdiction to make disposition of the property which has come into the receiver's possession by virtue of his appointment (Hanno v. Superior Court, supra, (1939) 30 Cal.App.2d 639, 87 P.2d 50; Coley v. Superior Court (1928) 89 Cal.App. 330, 264 P. 1110), and such should be transferred to the owners or the persons entitled to its possession. (Andrade v. Andrade (1932) 216 Cal. 108, 13 P.2d 676.) It seems patently clear that the husband is entitled to a return of his separate property. Furthermore, even assuming without deciding that the property to which Mrs. McClenny claimed to be community property is in fact such, and that she has a community interest in the property claimed by her in her complaint for divorce, petitioner is still entitled to have this property returned to him. The death of the wife does not divest the husband of his management and control of the community property pending the administration of the wife's estate. (Prob.Code, §§ 202 and 203.) And the income from community property is impressed with the same character of ownership as the property itself. (Boyd v. Oser (1944) 23 Cal.2d 613, 145 P.2d 312.) By the same token, the administrator or executor of the wife's estate is entitled to possession of any separate property of the wife, pending the probate of the estate. Any interest claimed by the administrator or executory of the wife's estate in the property held by the petitioner must be settled in a plenary quiet title action, in the same manner, and in the same forum or forums, as though the now terminated divorce proceeding had never been instituted. (Wilson v. Superior Court (1951) 101 Cal.App.2d 592, 593, 225 P.2d 1002.)

The alternative writs of mandate and prohibition are discharged. Let a peremptory writ of mandate and prohibition issue (a) directing respondent court, promptly, (1) to wind up the affairs of the receivership, including payment by the receiver out of the appropriate funds in his hands of the amounts due and payable under orders entered prior to the death of Dora S. McClenny, payable prior to her death, and not heretofore paid; (2) to settle the accounts of the receiver; (3) to fix the compensation payable to the receiver and to his counsel; (4) to determine what, if any, of the property in the hands of the receiver was the separate property of Dora S. McClenny; (5) to direct the receiver to distribute all of the separate property, if any, of Dora S. McClenny remaining in his hands to the personal representative of her estate and to distribute all other property remaining in his hands to petitioner James R. McClenny; and (b) prohibiting respondent court from taking any further action in connection with the divorce action or the receivership proceeding except as may be necessary to carry out the mandatory provisions of the writ, or except as may be necessary in connection with contempt proceedings looking toward enforcement of its orders, or as may be involved in the entry of a final order discharging the receiver and dismissing the divorce action.

No costs shall be recoverable by any party in this court in the present proceeding.

FOOTNOTES

1.  Appearances have been made by the personal representative of Mrs. McClenny and by the receiver appointed by the court in the divorce action. Inasmuch as we regard this proceeding as one involving the future conduct of the receivership proceedings, we regard the receiver as being sufficiently interested in the result to render his appearance proper.

2.  The Federal Bankruptcy proceeding was dismissed on March 3, 1964, and no longer presents an obstacle to the issues hereinafter to be determined.

3.  On August 20, 1963, upon an ex parte motion, Farmers and Merchants Trust Company, as Special Administrator of the Estate of Dora S. McClenny, was substituted as plaintiff in the divorce action.

4.  Petitioner's demurrer and motion to strike the cross-complaint were overruled and he was instructed to answer. Likewise, petitioner's demurrer to the cross-complaint in intervention was overruled. Petitioner states that ‘[i]n ruling on the demurrer to the cross-complaint in intervention the trial court held that the cross-complaint was really a request for instructions and not a complaint at all. Hence no answer was required.’

FOOTNOTE.  221 A.C.A. 161, 162–163.

5.  Petitioner urged that the probate court was the proper forum for this determination. However, where the husband is not the representative of the estate, and does not claim as a legatee or heir, he is a stranger to the estate, claiming adversely to it, and in these circumstances the probate court is without power to determine title to property. (Estate of Stone (1959) 170 Cal.App.2d 533, 536–537, 339 P.2d 220; Wilson v. Superior Court (1951) 101 Cal.App.2d 592, 225 P.2d 1002.)

6.  The receiver has argued that the divorce action has not abated on the death of Mrs. McClenny by reason of section 132 of the Civil Code which gives the court power to enter a final judgment of divorce, and therefore the court now has jurisdiction in the divorce action to determine which property is separate and which is community and quiet title in the rightful owner. Section 132 reads in part: ‘When one year has expired after the entry of such interlocutory judgment, the court on motion of either party, or upon its own motion, may enter the final judgment granting the divorce * * * and such other and further relief as may be necessary to complete disposition of the action, * * *. The death of either party after the entry of the interlocutory judgment does not impair the power of the court to enter final judgment as hereinbefore provided; * * *.’ This contention is answered by Estate of Seiler (1912) 164 Cal. 181, 182–183, 128 P. 334: ‘Section 132 of the Civil Code contains a provision to the effect that the death of either party to a divorce action after the entry of the interlocutory judgment does not impair the power of the court to enter final judgment. The purpose of this provision is not entirely clear. Possibly it was designed to enable the court to establish, by final decree rendered after the death of a party, property rights which had been passed upon, provisionally or otherwise (Pereira v. Pereira, 156 Cal. 1, 103 Pac. 488, 23 L.R.A.(N.S.) 880, 134 Am.St.Rep. 107) in the interlocutory decree.’ (Emphasis added.) (To same effect see Darter v. Magnussen, supra (1959) 172 Cal.App.2d 714, 342 P.2d 528.) In the case at bar, Mrs. McClenny died before any determination to property rights had been made. By the same token, we do not find the receiver's purported contention that the right to determine interest in the property in the divorce action survived Mrs. McClenny's death by reason of section 573 of the Probate Code. In 1961, Civil Code, section 956 (Survival of Tort Actions) was repealed, and Probate Code, section 573, was enacted. This latter section is a general survivability statute, which provides: ‘Except as provided in this section no cause of action shall be lost by reason of the death of any person but may be maintained by or against his executor or administrator. * * * Nothing in this section shall be construed as making assignable things in action which are of such a nature as not to have been assignable prior to the enactment of the 1961 amendment to this section.’ Although the California Law Revision Commission has stated that ‘the proposed legislation provides for the survival of all causes of action’ and is intended to be ‘a comprehensive survival statute’ with unlimited scope (‘Recommendation and Study Relating to Survival of Actions.’ October 1960), this section is not applicable to divorce actions. (Kellett v. Marvel (1935), 9 Cal.App.2d 629, 630, 51 P.2d 185; Estate of Seiler, supra. (1912) 164 Cal. 181, 128 P. 334) and, although an action involving rights in property is survivable, the division of community property in a divorce case is not a ‘cause of action’ but is an incident of the divorce. As stated in Kirschner v. Dietrich (1895), 110 Cal. 502, 505, 42 P. 1064, 1065: ‘The primary and substantive subject of litigation in a suit for divorce is the personal relation of the parties, and their rights to community property is but incidental thereto.’

7.  The interlocutory decree determined that petitioner pay Mrs. McClenny the sum of $400.00 per month for her support and maintenance; the sum of $200.00 per month for the support and maintenance of the parties' minor child Robin Lyn McClenny; all bills and obligations incurred by Mrs. McClenny and by the minor child then in her custody, for medicine, hospitalization, doctor bills, dental bills and nursing care; the fees to Mrs. McClenny's attorney in the sum of $1,500.00. Since these rights had been determined by the interlocutory, all sums in arrears up to the date of Mrs. McClenny's death are due and payable now. Enforcement thereof is, of course, a proper part of the settlement of the receiver's accounts as well as is enforcement by the contempt proceedings involved in McClenny v. Superior Court (1964) 60 Cal.2d 677, 36 Cal.Rptr. 459, 388 P.2d 691.

KINGSLEY, Justice.

BURKE, P. J., and JEFFERSON, J., concur.