§ 4.07 MANAGEMENT AND DISPOSITION OF COMMUNITY REALTY

• Jurisdiction: Washington

§ 4.07 MANAGEMENT AND DISPOSITION OF COMMUNITY REALTY

Before equal managing power was granted to the wife in 1972, the applicable statute conferred the "management and control of the community real property" upon the husband. Today, "[e]ither spouse or either domestic partner, acting alone, may manage and control community property." RCW 26.16.030. Under neither form of the statute may a spouse or domestic partner "sell, convey, or encumber the community real property without the other spouse or other domestic partner joining in the execution of the deed or other instrument." RCW 26.16.030(3).

Despite the equalization of management power in both spouses, the prohibition on unilateral disposition of community realty remains intact. The conveyance of community realty by one spouse alone when the other spouse is incompetent has been held void. Rustad v. Rustad, 61 Wn.2d 176, 377 P.2d 414 (1963). Generally, the cases declare that a real property transfer by one spouse alone is voidable by the other spouse. Sander v. Wells, 71 Wn.2d 25, 426 P.2d 481 (1967); see also Harry M. Cross, The Community Property Law in Washington (Revised 1985), 61 Wash. L. Rev. (1986). The same holds true with respect to a contract to sell community realty, which is proscribed just as the conveyance is. See, e.g., Holyoke v. Jackson, 3 Wash. Terr. 235, 3 P. 841 (1882). The nonacting spouse can avoid the contract to sell, but the purchaser cannot, without first giving the nonacting spouse an opportunity to affirm the transaction. Colcord v. Leddy, 4 Wash. 791, 31 P. 320 (1892); accord Stabbert v. Atlas Imperial Diesel Engine Co., 39 Wn.2d 789, 238 P.2d 1212 (1951); see also Goddard v. Morgan, 193 Wash. 83, 74 P.2d 894 (1937).

Although the statute literally requires that each spouse sign the deed or instrument of conveyance or encumbrance of community real estate, RCW 26.16.030(3), other conduct by the nonsigning spouse may suffice to make the transaction effective. Sander, 71 Wn.2d 25 (estoppel); Whiting v. Johnson, 64 Wn.2d 135, 390 P.2d 985 (1964) (authorization); Tombari v. Griepp, 55 Wn.2d 771, 350 P.2d 452 (1960) (ratification); Campbell v. Webber, 29 Wn.2d 516, 188 P.2d 130 (1947) (estoppel); In re Horse Heaven Irr. Dist., 19 Wn.2d 89, 141 P.2d 400 (1943) (ratification); Konnerup v. Frandsen, 8 Wash. 551, 36 P. 493 (1884) (authorization). In Whiting v. Johnson, for instance, the court said:

The basic rule, long recognized and applied in this state, is that, if a husband enters into a contract to sell, lease, or list for sale community realty without his wife joining therein, and she either authorizes such or consents thereto or subsequently sanctions or ratifies his act, neither she nor the community may thereafter disaffirm it.

64 Wn.2d at 141. The reasoning of these cases, decided prior to the 1972 amendments, is applicable now as to acts by either spouse. When the spouse who has not signed the contract as vendor joins in an action to compel the purchase, that spouse also becomes bound. Tombari, 55 Wn.2d 771.

IN RE HORSE HEAVEN IRRIGATION DISTRICT, 19 Wn.2d 89, 141 P.2d 400 (1943). Chester Anderson contracted to buy real property from Rudolf and otto Piening and Otto's wife, Johanna, without her signature. The property was within the limits of the Horse Heaven Irrigation District, and a dispute arose involving the proper distribution of the dissolved district's assets. Anderson claimed a proportionate share as the contract purchaser of the real estate. The validity of the contract was challenged because it lacked the signature of Johanna Piening. The evidence indicated that Johanna was aware of Anderson's possession of the tract under a contract to purchase, that there had been receipt of payments made by Anderson, and that Johanna, her husband, and the Andersons (identified as contract purchasers) all executed the grant of an easement across the land. Held: The contract was ratified by Johanna Piening and could not be disaffirmed by either or both of the spouses.

CAMPBELL V. WEBBER, 29 Wn.2d 516, 188 P.2d 130 (1947). The Webbers held community real estate upon which they operated a gas filling station business. In 1945, Mr. Webber executed an earnest money receipt and agreement to sell the property to Campbell. Webber's wife did not sign the instrument, but the evidence showed that she participated in negotiating the sale to Campbell, had full knowledge of the terms of the contract, and in the presence of Campbell and her husband had declared her satisfaction with the arrangement. In addition, she accepted and deposited funds received from Campbell pursuant to the contract. Campbell sued when the Webbers refused to comply with the agreement. Held: The agreement was enforceable for the reason that, by her action, Mrs. Webber was estopped from denying liability based on the earnest money receipt.

For the conduct of the nonacting spouse to amount to ratification, it is essential that that spouse have full knowledge of the facts and a reasonable opportunity to repudiate the transaction. Liability of the nonacting spouse may not be based solely on his or her acceptance of benefits. Consumers Ins. Co. v. Cimoch, 69 Wn. App. 313, 848 P.2d 763 (1993); see also Wells Trust v. Grand Cent. Sauna & Hot Tub...