Droeger v. Friedman, Sloan & Ross

In Droeger v. Friedman, Sloan & Ross (1991) 54 Cal.3d 26, after the parties had separated, the wife encumbered two parcels of community real property. The husband did not join in the execution of the encumbrance. The Supreme Court held: "We conclude that pursuant to section 5127, both spouses must consent to the transfer of community real property. Consequently, when a nonconsenting spouse, during the marriage, timely challenges a transfer made in violation of section 5127, the transfer is voidable." (Droeger, supra, 54 Cal.3d at p. 30.) In Droeger, the Supreme Court rejected the line of cases from the Court of Appeal holding that a non-consenting spouse did not have authority to void the encumbrance as to the consenting spouse's community interest in the property. (Droeger, supra, 30 Cal.3d at pp. 35-38.) Droeger v. Friedman, Sloan & Ross was a marital dissolution action, the wife executed a deed of trust on two parcels of community real property to secure a note in favor of her attorneys for their fees and costs. (Droeger, supra, at p. 30.) The husband did not join in her execution of the note or deed of trust. (Ibid.) The court held that the husband was entitled to void the encumbrance on the community real property in its entirety, and he was not limited to voiding the encumbrance only with respect to his one-half community interest. (Id. at p. 40.) The holding was based on former section 5127 of the Civil Code. (Droeger, at p. 31.) That section stated in pertinent part: " 'Either spouse has the management and control of the community real property ... , but both spouses either personally or by duly authorized agent, must join in executing any instrument by which such community real property or any interest therein is leased for a longer period than one year, or is sold, conveyed, or encumbered ... .' " (Ibid.) The court reasoned that nothing in Civil Code former section 5127 permitted an exception to the general rule against unilateral transfers by one spouse of community realty. (Droeger, at p. 41.) It explained that any such exception would contravene the fundamental principles of equal management and shared responsibility over community property and the premise that neither spouse alone may partition community property during marriage. (Id. at pp. 46-47.) The court noted: "If Civil Code former section 5127 is to be amended to create an exception allowing a spouse to unilaterally transfer community realty to secure attorney fees in a dissolution proceeding, it is the task of the Legislature and not the courts to create that exception." (Id. at p. 41.)