Court Opinion

ID: 4480824
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:33.103073+00
Date Added: 2024-06-11T14:53:37.566635
License: Public Domain

Black, </., dissenting: The separate property from which the royalties in question were derived is referred to in the Louisiana Civil Code as the wife’s “paraphernal” property. See articles 2335 and 2383 of the code. “The wife has the right to administer personally her paraphernal property, without the assistance of her husband.” Art. 2384, Dart’s La. Civ. Code. “The paraphernal property, which is not administered by the wife separately and alone, i:i considered to be under the management of the husband.” Art. 2385, Dart’s La. Civ. Code. Paraphernal property is presumed to be under husband’s management unless administered by wife separately. Johns v. Race, 18 La. Ann. 105; Radial v. Le Roux, 18 La. Ann. 588. It will be presumed that the husband administered the paraphernal property unless the contrary is shown. Gillet v. Deranco, 6 La. Ann. 590; Le Blanc v. Le Blanc, 20 La. Ann. 206; Bank of Goushatta v. Coats, 170 La. 163; 127 So. 587. In the Bank of Goushatta case, the Supreme Court of Louisiana said: “Another unquestioned principle of law is that unless the wife reserves to herself the administration, or actually administers separately and alone, her paraphernal property, it is presumed to be under the administration of the husband for the benefit of the community.” I do not think the facts which are stipulated rebut the Louisiana presumption that the husband administered the property in question for the benefit of the community. Cf. Howard v. United States, 125 Fed. (2d) 986. In the Hoioard case there were two questions. The first one need not be stated. It was decided in favor of the United States and we are not concerned with it here. The second question was stated by the court to be: “Whether certain policies of insurance on the life of Howard, purchased during wedlock, were community property or were the separate property of decedent.” The collector of internal revenue had hold the policies were the separate property of decedent and had collected an estate tax accordingly. The estate of Howard was contending that the policies were the community property of Howard and his wife. The court in its opinion stated the facts which were in the record bearing upon this issue as follows: Howard was married in 1914 to the wife who survived him. The policies were taken out in 1917, and the annual premiums thereon were paid by checks drawn by Howard upon a hank account standing in his name. He was a man of considerable wealth and income before his marriage, and thereafter his wealth steadily increased, and his income each year substantially exceeded his expenditures. These facts were stipulated, and no further proof was submitted on the issue of the ownership of the policies. [Italics supplied.] The court, in dealing with the issue which had thus been raised, pointed out that the collector of internal revenue, in collecting the taxes in question, had presumably acted within the law; that this was not a statutory presumption. The court further pointed out that under Louisiana law the funds on deposit in the bank to Howard’s credit were presumed to be community property and, therefore, when the premiums were paid from these funds on deposit, they were paid with community funds, and that no evidence liad been offered by the United States to rebut these facts or the inference therefrom. Among other things, the court said: State rules of property must he applied and enforced in proceedings under the revenue statutes in the absence of a conflicting federal law, treaty, or constitutional provision on the subject. Differences in state laws so as to be applied do not disparage the geographic uniformity of taxation requisite to constitutionality. Therefore, since the ultimate tax question here depends upon the ownership of the funds on deposit, and since the law of Louisiana is controlling, the disputable presumptions above mentioned are so bound together with local property rights that the failure to apply them would result in serious interference with the local substantive law. The court thereupon decided the particular issue there involved in favor of the taxpayer, namely, that the policies of insurance were community property, thus giving effect to the Louisiana presumption in spite of the presumed correctness of the Commissioner’s determination. The facts in the instant case as to who was administering the wife’s interest in the oil property are meager, but it has been stipulated that these are all the facts. If it were not for this stipulation, I think I would conclude that petitioner should lose her case for failure to gNe us more facts. But where all the facts are given and these fall short of showing that the property interest was being administered separately and alone by the wife, then the Louisiana presumption comes into play and the finding should be that it was being administered by the husband or by him and his wife indifferently. There were no affirmative acts of management on the part of the wife that I can see. The lease which gave rise to the income had not been made by the petitioner. She had acquired the property subject to the lease. No act on her part was required as lessor. Her position was passive; she merely received checks, endorsed them, and turned them over to her husband to be used indifferently for family expenses. So far, therefore, from breaking down the statutory presumption, the stipulation of facts makes it clear, I think, that the wife did not manage the property “separately and alone.” The wife’s interest in the oil lease property as it was put to use was but the instrumentality for income for family support. If it be said that the petitioner’s endorsement of the checks was management, that could not have been administration by her “separately and alone,” since the same stipulation is to the effect that, upon endorsement, she turned the checks over to her husband to be used for community expenses. The two acts, it seems to me, can not be separated, but musí be considered together. Therefore, applying the rationale of Howard v. United States, supra, to the facts which have been stipulated, I think the decision should bo for petitioner. If to apply the rationale of the Howard case to the facts in the instant case be said to be in conflict with our decision in Herbert L. Damner, 3 T. C. 638, and Shea v. Commissioner, 81 Fed. (2d) 937, then I think the rule of the Howard case is the sounder one and should be followed. Because I think the decision should be for the petitioner, I respectfully dissent. Tyson, */., agrees with this dissent.