
    Charlotte Suire DAVIS v. Edson L. DAVIS.
    No. 82-C-0268.
    Supreme Court of Louisiana.
    Sept. 13, 1982.
    
      Garland R. Rolling, Michael Baham, Me-tairie, for relator.
    Floyd J. Reed, Reed & Reed, New Orleans, for respondents.
   WATSON, Justice.

The community regime formerly existing between the parties was dissolved by a legal separation. LSA-C.C. art. 155. The issue is whether the plaintiff wife may maintain pre-separation injunctions or obtain a writ of sequestration to protect her undivided interest in the community property.

Plaintiff, Charlotte Suire Davis, obtained injunctive relief on November 17, 1981. Her husband, Edson L. Davis, the Whitney National Bank, E. F. Hutton & Company, Inc., and Hibernia National Bank were ordered to refrain:

“From disposing of, alienating or encumbering any of the property owned by the community of acquets and gains existing between plaintiff and defendant, or belonging to the minors; and further, from withdrawing, converting or disposing of any of the funds on deposit in certificates of deposit, money market funds, or contents of safety deposit boxes, (but not including checking accounts in the names of Davis Industries, Inc., or Davis Ready Mix Inc.) in the names of Charlotte S. Davis, Edson L. Davis, or of the minors Courtney Davis, Yvette Davis, Edson L. Davis, Jr., and Christopher Davis as well as the aforementioned businesses, namely; Davis Industries, Inc., Davis Ready Mix, Inc., Ultra-Mortar of Louisiana, Inc., Con-AGG Leasing Corporation and D & S Aggregate Transporters, Inc.”

The injunction issued to prevent the husband from abusing his control of the corporations which own the community assets, to-wit: Davis Industries, Inc.; Davis Ready Mix, Inc.; Con-AGG Equipment Leasings, Inc.; D & S Aggregate Transportation, Inc.; Ready Mix, Inc.; Ultra Mortar, Inc.; and, Ultra Mortar of Louisiana, Inc. Because these corporations were deemed alter egos of Mr. Davis, the trial court restrained alienation or encumbrance of the corporate assets except as allowed by court order. The preliminary injunctions did not prevent Davis and the corporations from engaging in the ordinary course of business.

On December 8,1981, a judgment of separation was rendered based on the mutual fault of the parties. The judgment allowed for alimony, child support and other incidental matters. Since the judgment of separation did not nullify the prior injunctions, Whitney National Bank refused to continue doing business with Mr. Davis without a court order. Mr. Davis moved to have the injunctions decreed null. Mrs. Davis petitioned for partition of the community asking that the property be sequestered without bond during the pendency of the suit.

The trial court declined to decree the injunctions null and also refused to issue a writ of sequestration. The Court of Appeal granted a writ of mandamus and decreed that the judgment of separation automatically terminated the previous injunctions. Davis v. Davis, 410 So.2d 272 (La.App. 4 Cir. 1982). The Court of Appeal indicated in a footnote that the wife was not entitled to a sequestration of the assets of the former community. A writ was granted to consider whether the judgment of separation automatically terminated the injunctions against alienation of the community property and whether the wife is entitled to a writ of sequestration. 411 So.2d 47 (La., 1982).

At the pre-separation hearing on the injunction, Edson Davis testified that his children own stock in Davis Industries and he has a voting trust of the 6,882 shares held by his four children and 1,400 shares owned by him personally. The only other stock consists of 122 shares owned by his father. Davis is the sole director of this corporation and the president. Davis admitted that he has sole control. Davis Industries and Davis Ready Mix, Inc. are both in the ready mix concrete business but serve different areas. Edson Davis is the sole stockholder, sole director and president of Davis Ready Mix, Inc. Davis is also the sole stockholder, director and president of Con-AGG Equipment Leasing Corporation. The only assets of this corporation are three Mercedes automobiles. D & S Aggregate Transportation, Inc., Ultra Mortar of Louisiana and Ultra Mortar, Inc. are other companies where Davis is the sole stockholder and sole director. Ready Mix, Inc., is a new corporation formed to handle concrete business for the Louisiana Exposition or World’s Fair.

Although Davis draws a salary from Davis Industries, he testified frankly that furniture which he purchased for his apartment was paid for by D & S and the rent and utilities by Davis Industries. These monies were reflected on the corporate books as loans to Davis. There are various judgments against Davis personally, which are being paid by the corporations. According to his testimony, a $100,000 certificate of deposit in the names of his children, plus an additional $20,000 in interest, was transferred to Davis Industries’ general account. Davis testified that this was necessary because of slow payment of his receivables. The money for the C.D. had come from the children’s pay checks “and so forth”. (Tr. 53) Davis also purchased property in the name of Davis Industries for $67,000 and had an agreement to purchase a square of ground for Ready Mix, Inc., but was unable to close the agreement. To obtain the deposit for Ready Mix, Inc., Davis was “just taking all the funds that I could get; my payroll checks, my children’s payroll checks and these interest checks.” (Tr. 59-60) The funds were returned because the deposit was not made timely.

A certificate of deposit in the name of Courtney Davis at the Hibernia Bank was reinvested at E. F. Hutton in the names of Davis Industries and Davis Ready Mix. According to Davis, the initial investment at Hibernia had come from checks on those two companies.

Davis Industries has been profitable and had a profit of $130,000 in 1980. According to Davis, the concrete business requires personal owner attention and an injunction which would require a court order for each substantial decision would result in a situation where he might as well quit operating.

As the trial court stated, Davis is the biggest asset of the corporations but they function as his alter egos and he obviously believes they belong solely to him. To protect the wife, the trial court enjoined alienating or encumbering any of the assets of the corporations, except for that necessary in the normal and ordinary course of business.

During a suit for separation, a spouse may require an inventory and appraisal of the community property and an injunction restraining the disposition of the community property. LSA-C.C. art. 149 provides:

“During the suit for separation, a spouse may, for the preservation of his rights, require an inventory and appraisement to be made of the community property and obtain an injunction restraining the disposition of the whole of the community or of specified things of the community property.”

Neither Article 149 nor any other codal article or statute provides for the automatic termination of such an injunction. An inventory of the property belonging to this community has been ordered, but apparently not completed.

LSA-C.C.P. art. 3944 provides:

“Either party to an action for separation from bed and board or divorce may obtain injunctive relief without bond prohibiting the other party from disposing of or encumbering community property.”

No change of ownership in community property occurs with the entry of a separation judgment; prior to the judgment, the spouses own an undivided half interest; subsequent to the judgment, the spouses own an undivided half interest. Here, the judgment of separation made a de jure division of the community, but a de facto partition has yet to take place. Therefore, the necessity for injunctive protection contemplated by Article 149 remains the same.

A party to a divorce or separation is entitled to injunctive relief to protect his or her share of the community property until the property is inventoried and/or partitioned. See In Re F. H. Koretke Brass & Mfg. Co., 195 La. 415, 196 So. 917 (1940) where the suit for injunction was brought after the divorce was final. An injunction obtained by a party to a suit for separation or divorce continues until: (1) there is a court order; or (2) the necessity abates because the community property has been inventoried and/or partitioned. See Fuori v. Fuori, 334 So.2d 488 (La.App. 1 Cir. 1976).

Since the injunctions against alienation of the community property protect the wife’s undivided interest in the community, she is not entitled to a writ of sequestration. LSA-C.C.P. art. 3571.

For the foregoing reasons, the judgment of the Court of Appeal is reversed insofar as it ordered that the injunctions against alienation of the former community property automatically terminated with the judgment of separation. The judgment of the Court of Appeal is affirmed as to denial of a writ of sequestration.

REVERSED IN PART; AFFIRMED IN PART; AND REMANDED.

CALOGERO, J., concurs.

LEMMON, J., concurs and assigns reasons.

DENNIS, J., concurs for reasons assigned by LEMMON, J.

MARCUS and BLANCHE, JJ., dissent and assign reasons.

LEMMON, Justice,

concurring.

C.C. Art. 149 clearly contemplates the issuance of an injunction for the purpose of preserving community property rights when dissolution of the community is imminent. While the article also clearly provides the time at which the injunction may be issued or obtained (that is, during the suit for separation), it does not expressly provide the duration of the injunction or the time when the injunction terminates, and it is therefore up to the court to determine this issue.

In deciding this issue, the court is essentially faced with a policy decision. Considerations of logic and of accomplishment of purpose weigh heavily in favor of a decision that an Article 149 injunction does not terminate until its purpose has been accomplished or the need no longer exists.

Logically, the time when an injunction terminates should bear some relationship to the purpose for which the injunction was issued. Since an Article 149 injunction is a conservatory measure, it is reasonable to conclude that the injunction should terminate when the necessity for this protection no longer exists. Moreover, since Article 149 authorizes both the obtaining of an injunction and the requiring of an inventory and appraisal as steps in the preservation of community property rights, one might reason that the contemplated duration of the injunction is related more to the inventory and appraisal (and the ultimate partition or settlement) of the community property than to the judgment of separation.

In the present case, the wife at a full-day hearing made a showing that injunctive relief was necessary to protect her community property rights. The trial judge granted injunctive relief under the authority of C.C. Art. 149 (and dispensed with security under the authority of C.C.P. Art. 3944). When the judgment of separation was rendered three weeks later, there was no suggestion that injunctive relief was not still necessary to protect the wife’s community property rights (the purpose for which the injunction was originally issued). Significantly, the wife filed for a partition two days after the judgment, and that action was still pending (although the suit for separation had been completed) when the husband sought dissolution of the injunction.

The court of appeal reasoned that the injunction terminated automatically at the rendition of judgment because the spouses then became simple co-owners of the formerly community property. The court accordingly relegated the wife to seek relief under C.C.P. Art. 3601 and following, which requires the showing of irreparable injury and the furnishing of security. However, there is no clear-cut reason why an injunction, issued during the pendency of the separation suit because of the demonstrated need to protect community property rights, should terminate concurrently with the termination of community, if the proven need for the injunction still exists and the purpose of the injunction will be disserved by the automatic termination. Moreover, the mere fact that the former spouses are now simple co-owners of the formerly community property is not a compelling reason in favor of automatic termination. On the contrary, the fact that the settlement of the community property does not generally occur until some time after the judgment of separation suggests that the need for in-junctive relief usually continues beyond the date of the judgment.

Inasmuch as the purpose of the preliminary injunction in this case had not been accomplished when the judgment of separation was rendered, I agree with the holding in this case that the injunction did not automatically terminate with the judgment of separation.

MARCUS, Justice

(dissenting).

The community was dissolved by the legal separation. Article 149 of the Civil Code permits an injunction only “[djuring the suit for separation.” Article 3944 does not apply because the wife is no longer a party to an action for separation and she is not a party to an action for divorce. Hence, I consider that the pre-separation injunctions were terminated by the judgment of separation. I consider that the wife is relegated to the provisions on injunction in the Code of Civil Procedure, art. 3601, et seq. Accordingly, I respectfully dissent.

BLANCHE, Justice

(dissenting).

Injunction is an extraordinary remedy and as a general rule should only be granted where the party seeking it is threatened with irreparable injury and is without adequate remedy at law. Civil Code Article 149 and Code of Civil Procedure Article 3944 provide for injunctions between spouses, without bond, and without the necessity of alleging irreparable injury. These articles represent limited exceptions to the general injunction rule (La.C.C.P. Art. 3601) and as such should be interpreted narrowly.

The language of C.C. Article 149 and C.C.P. Article 3944 clearly indicates that the injunctive relief provided by these articles is not available after a suit for separation or divorce is terminated by a judgment awarding the requested relief. C.C. Art. 149 contemplates an injunction “During the suit for separation,” and C.C.P. Art. 3944 allows one for “Either party to an action for separation from bed and board or divorce.” This language is consonant with the underlying purpose of the C.C. Art. 149 injunction: to preserve the status quo during the pendency of the separation proceedings.

I agree with the concurring opinions statement that “considerations of logic and of accomplishment of purpose weigh heavily in favor of a decision that an Article 149 injunction does not terminate until its purpose has been accomplished or the need no longer exists.” However, I submit that the purpose of the C.C. Art. 149 injunction is accomplished upon rendition of a judgment of separation and that thereafter the necessity for such injunction no longer exists. The reason for the issuance of the C.C. Art. 149 injunction is simple. Prior to a judgment of separation from bed and board, either spouse, acting alone, may alienate or encumber community assets unless otherwise provided by law. La.C.C. Art. 2346. Upon rendition of the separation judgment, the community is dissolved retroactively and neither spouse can continue to alienate former community property with impunity as they are, as of that moment, co-owners. In the event that community rights are threatened, the spouses have adequate means of enforcing and preserving their respective property rights by invoking a judicial partition. That remedy is simply not available prior to a judicial separation (C.C. Art. 2336). The C.C. Art. 149 injunction specifically addresses the situation in which dissolution of the community is imminent, but not yet accomplished, and either spouse during the pendency of the separation proceedings could dispose of the community assets to the serious detriment of the other. Following the judgment of separation, the spouses become co-owners of the property and as such neither party can alienate or encumber the interest of the other. The demonstrated need for injunc-tive relief ceases with the rendition of the separation judgment. Following the separation judgment, there is neither necessity nor authority for continuing injunctive sanctions unless something more — the possibility of irreparable injury — can be shown.

This position is supported by the decisions in Leblanc v. Lyons, 401 So.2d 626 (La.App. 3rd Cir., 1981) and Fuori v. Fuori, 334 So.2d 488 (La.App. 1st Cir., 1976) and represents the proper application of the injunction statutes.

Injunction sanctions are proper after a judgment of separation only upon a showing of irreparable injury pursuant to La. C.C.P. Art. 3601. The injunction obtained by Mrs. Davis under C.C. Art. 149 and C.C.P. Art. 3944 terminated by operation of law when the judgment of separation was granted.

I respectfully dissent. 
      
      . C.C. Art. 149 does not expressly require a showing that irreparable injury may otherwise result, but does require a showing that an injunction is necessary for protection of the spouse’s community property rights (which arguably is a showing of irreparable injury). While most Article 149 injunctions are issued upon simple request (because the enjoined party does not oppose the request), necessity must be proved if the injunction is contested, as in this case. See also Fuori v. Fuori, 334 So.2d 488 (La.App. 1st Cir. 1976), in which the court held that the evidence at the hearing supported the finding of irreparable injury and the issuance of an injunction under C.C.P. Art. 3601, even if C.C. Art. 149 did not authorize the continuance of the injunction after the judgment of separation.
      In the present case, the injunction was issued, not as a matter of form on simple request, but as a substantive determination after an extensive hearing.
     
      
      . Arguably, there is little difference in result between (1) a ruling by this court that the injunction issued pursuant to C.C. Art. 149 continues beyond the judgment of separation unless the enjoined spouse obtains a modification or dissolution by showing that the injunction is no longer necessary and (2) a ruling that the Article 149 injunction automatically terminates and the spouse must seek further injunctive relief by re-proving the need for the injunction pursuant to C.C.P. Art. 3601 (and by furnishing minimum security). The principal problem involves the determination of which party should be saddled with the burden of moving forward. Since need must be proved prior to the issuance of an injunction during the pendency of a separation action, and since the redactors of the Codes saw fit to dispense with security when a spouse has proved the need to protect community property rights, it is reasonable simply to construe C.C. Art. 149 and C.C.P. Art. 3944 as authorizing injunctive relief, without security, which continues in existence until the property is partitioned or until the enjoined party shows that the injunction is no longer needed or that a partition action is not pending and not contemplated.
     