Court Opinion

ID: 6887634
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:32:54.331403+00
Date Added: 2024-06-11T16:05:45.506188
License: Public Domain

HUXMAN, Circuit Judge
(dissenting).
I agree that this case is controlled by the decision of the United States Supreme Court in Poe v. Seaborn, 282 U.S. 101, 102, 51 S.Ct. 58, 75 L.Ed. 239. The Poe case passed upon- the community property law of the State of Washington. Throughout that opinion the court stressed the fact that the law of Washington gives the wife a present vested interest in the community property and income which cannot be disregarded, and which, if necessary, she can protect in a separate action in court. The court pointed out that the husband may not discharge his separate debts out of the community property, that the wife may sue alone to enjoin collection of his separate debts out of the community property, and that she may prevent his making substantial gifts out of the community property without her consent. The court stated specifically that the wife has a vested property right in the community property and the income equal to that of the husband. The court pointed out that the husband’s right of management and operation of the community estate is that of an agent of the community estate and that the broad powers vested in the husband do not negative the wife’s present interest in the community estate.
32 O.S.A. § 56, clearly creates a community estate within the decision of the Poe case as to the property covered by the section. It specifically provides that the wife shall have an undivided one-half interest in the community estate. From Section 56 alone; I would have no difficulty in concluding that a husband and wife who had elected to come under the provisions of the act would each have the right -to file separate income tax returns and each return one-half of the total community income.
But the Act must be read in its entirety, and whether a community estate is created can be determined only by a consideration of all the provisions of the Act. Section 57 provides: “That portion of the community property, record title to which is in her name or which is under the management, control and disposition of the wife, shall be subject to debts contracted by the wife arising out of tort, or otherwise, but not to debts or liabilities of the husband.” And, again: “That portion of the community property, record title to which is in his name or which is under the management, control and disposition of the husband shall be subject to debts contracted by the husband or liabilities of the husband arising out of tort or' otherwise, but not the debts or liabilities of the wife.”
From this, it follows that if the community estate stands in the name of the husband or is entirely under his control, it is all subject to his personal debts and obligations and may be consumed entirely, if necessary, in payment of such debts. Where, then, is that protection of the wife’s one-half interest in the community estate which the Supreme Court stresses so-in the Poe case? It simply does not exist. Under Section 57 the community estate may be wiped out completely in satisfaction of the separate debts of the husband.
No provision comparable to Section 57 can be found in .the community property statutes of any of the traditional community property states.
It stands admitted that the purpose of the passage of the law was to make available to citizens of Oklahoma the benefits of the community property law for income tax purposes. This Oklahoma had the right, to do. But it could not pass a community property law in form and yet for all practical purposes leave the estate or property and right of management, control or enjoyment the same as before the passage of the law. It is my conclusion that the law in question fails to create a genuine community property estate recognizable fo.r income tax purposes within the decisions of the United States Supreme Court. The hands may be the hands of Esau, but the voice is still the voice of Jacob.
I think the decision of the Tax Court-should be reversed.