80 F.2d 652 (9th Cir. 1935), 7889, Eustace v. Lynch

Docket Nº:7889.
Citation:80 F.2d 652
Party Name:EUSTACE et al. v. LYNCH.
Case Date:December 17, 1935
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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80 F.2d 652 (9th Cir. 1935)

EUSTACE et al.



No. 7889.

United States Court of Appeals, Ninth Circuit.

December 17, 1935

Upon Appeal from the District Court of the United States for the Southern District of California, Central Division; George Cosgrave, Judge.

Hiram E. Casey and Chas. W. Fourl, both of Los Angeles, Cal., for appellants.

Before WILBUR, DENMAN, and HANEY, Circuit Judges.

WILBUR, Circuit Judge.

This is an appeal from an order adjudging Katie M. Eustace and Charles W. Fourl guilty of contempt of court and fining each of them $1,000. In the statement of facts which follows we will not undertake for the moment to distinguish between facts which appellants offered to prove and those which otherwise appeared in the record:

John M. Eustace was engaged in the plumbing business at three separate places under the fictitious name of Eustace Plumbing Company. This name had been filed with the county clerk after due notice, as required by law, and the information therein contained was accessible to the public. He had owned a plumbing business for many years before his marriage, in all about 30 years. Katie M. Eustace is his wife and they were living together at the time of the occurrences herein stated. The California law covering the ownership of such property is well settled but difficult of application, and may be briefly stated at this juncture to clarify what follows. In so far as the business and property used therein could be traced as the rents, issues, and profits thereof, it was the separate property of the husband. Cal.Civ.Code, § 163. In so far as the property was the result of the earnings of the husband or the wife after marriage, it was the community property. Cal.Civ.Code, § 164. It was under his exclusive management and control whether his separate or community property. Cal.Civ.Code, §§ 172, 172a. Neither the separate property of the husband nor the community property was liable for the debts of the wife. Cal.Civ.Code, § 167. We again state these general principles of the California law applying to community and separate property as formulated by the authority of California Jurisprudence:

5 Cal.Jur. p. 282, § 7: 'Community Property. * * * In general, under this system, whatever is acquired by the efforts, ability or personal qualities of either spouse, constitutes a part of the community property. Thus, the earnings of the wife as well as of the husband are community property, and this includes gains from business ventures conducted by either, and from contracts for services of whatever nature; and money borrowed on personal credit.'

Supplement of 1930, p. 50, § 33, Cal. Jur. by Prof. Orrin K. McMurray: 'In General. Difficult questions occur in connection with the commingling of separate and community funds including the application of labor and skill of the spouses, and it cannot be said that the rules governing the rights of the parties have been clearly determined in such cases. The commingling of community and separate funds in such a manner that it becomes impossible to trace the funds renders the whole fund community property. It is clear that the increase in the value of the separate property due to the natural enhancement of values generally, and not attributable to the ability, activity or capacity of the spouses or either of them, is separate property.'

5 Cal.Jur. p. 297, § 16: 'Impossibility of Tracing Funds. Where the commingling of the separate property with the community property is such that it is impossible to trace the funds, the whole will be treated as community property, upon

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the principle that the burden is upon the spouse claiming property as separate property to establish its character as such.'

It follows that the plumbing store and the supplies therein were either community property and that the possession of the wife was as a member of the community, or that the supplies were the separate property of the husband, and she was in possession as his agent. Mrs. Eustace had engaged in some oil production enterprise, and as result thereof three judgments had been obtained against her in the superior court of Los Angeles county, Cal.; one for $6,284.02, another for $650, and a third by one A. M. Kupfer for $49.95.

On August 23, 1934, the three judgment creditors filed an involuntary petition in bankruptcy against Mrs. Eustance alleging as acts of bankruptcy the fact that she had permitted one of the petitioning creditors, the Oil Tool Exchange, Inc., to obtain a judgment lien on real estate belonging to her on April 24, 1934, and had failed for 30 days thereafter to vacate or discharge the lien. It is also alleged that within four months preceding August 23d Mrs. Eustace had transferred to Charles W. Fourl and I. Henry Harris an oil and gas leasehold in the Baldwin Hills, Los Angeles, and that...

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