Babcock v. Tam

• Decision Date: 07 June 1946
• Docket Number: No. 10835.,10835.
• Citation: 156 F.2d 116
• Parties: BABCOCK v. TAM et ux.
• Court: U.S. Court of Appeals — Ninth Circuit

156 F.2d 116 (1946)

BABCOCK v. TAM et ux.

No. 10835.

Circuit Court of Appeals, Ninth Circuit.

June 7, 1946.

Stockton & Karam, of Phoenix, Ariz., for appellant.

George D. Locke and J. B. Sumter, both of Phoenix, Ariz., for appellees.

Before GARRECHT, STEPHENS, and BONE, Circuit Judges.

STEPHENS, Circuit Judge.

On September 23, 1938, Alice E. Babcock, the appellant herein, commenced an action in the District Court of the United States, Southern District of California, against Edwin Tam for damages allegedly received by her in an automobile collision, and on July 26, 1939, a verdict was returned in her favor for $5,701, with interest and costs. Judgment was regularly entered thereon on October 29, 1939. This judgment will hereinafter be referred to as the California judgment.

On February 16, 1942, the said Alice E. Babcock brought an action in the District Court of the United States, for the District of Arizona, against the said Edwin Tam on the above mentioned judgment, and was awarded a judgment thereon on May 26, 1942. This judgment will hereinafter be referred to as the Arizona judgment.

The instant action was brought by the said Alice E. Babcock against the said Edwin Tam and Nita Tam, his wife, by which it is sought to have declared (a) that the Arizona judgment is a community obligation of the Tams, (b) that a recorded conveyance of the lots 7, 8, 9 and 10, block 9, Yuma Heights Subdivision, Yuma County, Arizona from Edwin Tam to Edwin Tam and Nita Tam as their community property be set aside upon the ground of fraud, (c) that the mentioned lots be ordered sold, the proceeds resulting therefrom to be applied upon the Arizona judgment, which would, of course, also satisfy the California judgment in a like degree.

In the instant case the court found that Edwin Tam was engaged in business involving his separate property when the tort basis for the California judgment occurred, and that it was in no manner connected with business or other benefit or advantage of the community, that the transfer or the agreement to transfer the Yuma lots from Edwin Tam's separate estate to the community estate was not made with the intent to defraud, hinder or delay existing or future creditors of Edwin Tam or Nita Tam, his wife, but was made in good faith, that the conveyance was made and received three years before filing of the complaint herein on August 15, 1942. The court concluded that the Arizona judgment based upon the California judgment against Edwin Tam was his separate obligation, that the property in question was community property by reason of a valid transfer from Edwin Tam to the community estate of Edwin Tam and Nita Tam, his wife and not subject to levy for the satisfaction of the judgment against Edwin Tam, and that the action for fraud was barred by the statute of limitations. It was thereby adjudged by the court that "the plaintiff appellant herein take nothing by her action against defendants and that her complaint be, and the same is, hereby dismissed," and that the title to the real property in question be quieted in the defendants (the appellees herein) as against any claim of the plaintiff arising out of her claims against Edwin Tam.

Alice E. Babcock appeals from the judgment, claiming error in the findings of fact on the ground that they are not sustained by the evidence.

Our first question is whether the court's finding, that the negligent act of the appellee, Edwin Tam, took place while he was engaged on a mission which was wholly connected with his separate business and not in any way a benefit to the community, is supported by the evidence.

The record discloses the following: In the summer of 1938, Edwin Tam made an automobile trip from his home in Arizona. The evidence is without contradiction that, at the time, he had information to the effect that persons in Los Angeles, California, might be interested in purchasing certain of his separate real estate. He drove to San Diego, California, where his wife was convalescing after illness, and in a few days drove on to Los Angeles. There he was unable to contact the persons with whom he had intended to confer about his property and for information drove to the home of Mrs. Belle Sparks, an acquaintance in Huntington Park, California, who had possessed real property in Arizona in the vicinity of his ownings. Mrs. Sparks desired to go to Venice, California, and Tam, with her in his automobile started on his return trip, routing himself through Venice and via the coast route to San Diego. Before he reached Venice he suffered an automobile collision in which the appellant (Alice E. Babcock) sustained injuries, from which the related litigation flowed.

It is the contention of appellant that Edwin Tam left Arizona primarily for personal recreation and to visit his convalescent wife in San Diego, and that the evidence does not support the finding that the trip was for business purposes concerning Edwin Tam alone. It is further contended that even though the trip was originally in the interest of Edwin Tam, individually, the drive toward Venice concerning Mrs. Sparks was one of pleasure for Mr. Tam and comes within the cases holding that trips of this nature are for the benefit of the community.

It is undisputed that he set out on the trip from Arizona driving his own automobile, and he testified that he provided for his expenses by his own separate funds. His testimony, to the effect that the motivating factor and purpose of the trip was to see people in Los Angeles in regard to his separate property, was corroborated by the testimony of Mrs. Sparks. She testified as follows:

"Q. Did you have a conversation with Mr. Tam in your home? A. Yes, Mr. Tam came to see me about the Casa Grande property. * * *

"Q. What was the conversation you had with him at that time and place with reference to the property? A. Well, I had sold my property and he came to make inquiries about whom I sold it to, and who was the agent, and how much I got for it, and most of the details with regard to that."

Ray C. Bennet, an attorney, was a witness and when asked: "Did he Edwin Tam state to you why he was going to be away from Yuma a day or two?" he answered, "Yes, he was excited at the prospect of the sale of some Casa Grande property." That the Casa Grande property was the separate property of Edwin Tam is not contested.

It is correctly claimed by appellant that the Arizona state community law relating to the issues of the instant case is similar in some respects to the Washington state law. Selaster v. Simmons, 1932, 39 Ariz. 432, 7 P.2d 258. See Tway v. Payne, 1940, 55 Ariz. 343, 101 P.2d 435. In the case of McFadden v. Watson, 1938, 51 Ariz. 110, 74 P.2d 1181, 1182, the court announced the governing Washington rule, as stated in Floding v. Denholm, 1905, 40 Wash. 463, 82 P. 738, 739: "The rule now is that community property is liable for a debt created by the husband for the benefit of the community. But such property is not liable for a debt created by a tort of either spouse, or one which is not for the benefit of the community." In Werker v. Knox, 1938, 197 Wash. 453, 85 P.2d 1041, 1043, the court says: "It is in those cases where the husband has caused a negligent injury through the use of an automobile that the tendency of the courts to go to an extreme limit to fix liability upon the community has been most clearly exhibited * * *." This statement, however, is preceded by the sentence, "But * * * there can be no recovery against the community unless the husband was engaged in doing something which could be said to be beneficial to his principal, the marital community." In Cosper v. Valley Bank, 1925, 28 Ariz. 373, 237 P. 175, it was held that where a judgment arises out of a transaction wholly regarding separate property and in no way affecting community interests, the person against whom the judgment was made is individually liable out of his separate property rather than the community as community property is liable only for community debts.

It seems to us that the evidence amply supports the findings that the trip, in its entirety, was an individual enterprise of Edwin Tam's in the interest of his own separate property. So far as the conveyance of Mrs. Sparks is concerned, it would seem that compliance with her request to be taken to Venice was a personal courtesy to one who had assisted him in his dealings with his separate property. Tam was still well within the zone of his separate business at the time...