Poe v. Seaborn 21 930, No. 15

CourtUnited States Supreme Court
Writing for the CourtROBERTS
Citation51 S.Ct. 58,282 U.S. 101,75 L.Ed. 239
PartiesPOE, Collector of Internal Revenue, v. SEABORN. Argued Oct. 21-2, 1 930
Decision Date24 November 1930
Docket NumberNo. 15

282 U.S. 101
51 S.Ct. 58
75 L.Ed. 239
POE, Collector of Internal Revenue,

v.

SEABORN.

No. 15.
Argued Oct. 21-2, 1 930.
Decided Nov. 24, 1930.

[Syllabus from pages 101-103 intentionally omitted]

Page 103

The Attorney General and Mr. Thomas D. Thacher, Sol. Gen., of Washington, D. C., for petitioner.

[Argument of Counsel from pages 103-105 intentionally omitted]

Page 106

Messrs. George Donworth and Elmer E. Todd, both of Seattle, Wash., for respondent.

[Argument of Counsel from pages 106-108 intentionally omitted]

Page 108

Mr. Justice ROBERTS delivered the opinion of the Court.

Seaborn and his wife, citizens and residents of the State of Washington, made for the year 1927 separate income tax returns as permitted by the Revenue Act of 1926, c. 27, § 223 (USCA title 26, § 964).

During and prior to 1927 they accumulated property comprising real estate, stocks, bonds and other personal

Page 109

property. While the real estate stood in his name alone, it is undisputed that all of the property real and personal constituted community property and that neither owned any separate property or had any separate income.

The income comprised Seaborn's salary, interest on bank deposits and on bonds, dividends, and profits on sales of real and personal property. He and his wife each returned one-half the total community income as gross income and each deducted one-half of the community expenses to arrive at the net income returned.

The Commissioner of Internal Revenue determined that all of the income should have been reported in the husband's return, and made an additional assessment against him. Seaborn paid under protest, claimed a refund, and on its rejection, brought this suit.

The District Court rendered judgment for the plaintiff (32 F.(2d) 916); the Collector appealed, and the Circuit Court of Appeals certified to us the question whether the husband was bound to report for income tax the entire income, or whether the spouses were entitled each to return one-half thereof. This Court ordered the whole record to be sent up. 281 U. S. 704, 50 S. Ct. 459, 74 L. Ed. 1128.

The case requires us to construe sections 210(a) and 211(a) of the Revenue Act of 1926 (44 Stat. 21, USCA tit. 26, §§ 951 note and 952 note), and apply them, as construed, to the interests of husband and wife in community property under the law of Washington. These sections lay a tax upon the net income of every individual.1 The Act goes no farther, and furnishes no other standard or definition of what constitutes an individual's income. The use of the word 'of' denotes ownership. It would be a strained construction, which, in the absence of further definition by Congress, should impute a broader significance to the phrase.

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The Commissioner concedes that the answer to the question involved in the cause must be found in the provisions of the law of the State, as to a wife's ownership of or interest in community property. What, then, is the law of Washington as to the ownership of community property and of community income including the earnings of the husband's and wife's labor?

The answer is found in the statutes of the State,2 and the decisions interpreting them.

These statutes provide that, save for property acquired by gift, bequest, devise or inheritance, all property however, acquired after marriage, by either husband or wife, or by both, is community property. On the death of either spouse his or her interest is subject to testamentary disposition, and failing that, it passes to the issue of the decedent and not to the surviving spouse. While the husband has the management and control of community personal property and like power of disposition thereof as of his separate personal property, this power is subject to restrictions which are inconsistent with denial of the wife's interest as co-owner. The wife may borrow for community purposes and bind the community property. Fielding v. Ketler, 86 Wash. 194, 149 P. 667. Since the husband may not discharge his separate obligation out of commnit y property, she may, suing alone, enjoin collection of his separate debt out of community property. Fidelity & Deposit Co. v. Clark, 144 Wash. 520, 258 P. 35. She may prevent his making substantial gifts out of community property without her consent. Parker v. Parker, 121 Wash. 24, 207 P. 1062. The community property is not liable for the husband's torts not committed in carrying on the business of the community. Schramm v. Steele, 97 Wash. 309, 166 P. 634.

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The books are full of expressions such as 'the personal property is just as much hers as his' (Marston v. Rue, 92 Wash. 129, 159 P. 111, 112); 'her property right in it (an automobile) is as great as his' (Id., 92 Wash. 133, 159 P. 111, 113); 'the title of the spouse therein was a legal title, as well as that of the other' (Mabie v. Whittaker, 10 Wash. 663, 39 P. 172, 175).

Without further extending this opinion it must suffice to say that it is clear the wife has, in Washington, a vested property right in the community property, equal with that of her husband; and in the income of the community, including salaries or wages of either husband or wife, or both. A description of the community system of Washington and of the rights of the spouses, and of the powers of the husband as manager, will be found in Warburton v. White, 176 U. S. 484, 20 S. Ct. 404, 44 L. Ed. 555.

The taxpayer contends that if the test of taxability under Sections 210 and 211 is ownership, it is clear that income of community property is owner by the community and that husband and wife have each a present vested one-half interest therein.

The Commissioner contends, however, that we are here concerned not with mere names, nor even with mere technical legal titles; that calling the wife's interest vested is nothing to the purpose, because the husband has such broad powers of control and alienation, that while the community lasts, he is essentially the owner of the whole community property, and ought so to be considered for the purposes of sections 210 and 211. He points out that as to personal property the husband may convey it, may make contracts affecting it, may do anything with it short of committing a fraud on his wife's rights. And though the wife must join in any sale of real estate, he asserts that the same is true, by virtue of statutes, in most States which do not have the community system. He asserts that control without accountability is indistin-

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guishable from ownership, and that since the husband has this, quoad community property and income, the income is that 'of' the husband under sections 210, 211 of the income tax law.

We think in view of the law of Washington above stated this contention is unsound. The community must act through an agent. This Court has said with respect to the community property system (Warburton v. White, 176 U. S. 494, 20 S. Ct. 404, 408, 44 L. Ed. 555) that 'property acquired during marriage with community funds became an acquet of the community and not the sole property of the one in whose name the property was bought, although by the law existing at the time the husband was given the management, control, and power of sale of such property. This right being vested in him, not because he was the exclusive owner, but because by law he was created the agent of the community.'

In that case, it was held that such agency of the husband was neither a contract nor a property right vested in him, and that it was competent to the legislature which created the relation to alter it, to confer the agency on the wife alone, or to confer a joint...

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418 practice notes
  • Helvering v. Stuart, Nos. 49 and 48
    • United States
    • United States Supreme Court
    • November 16, 1942
    ...U.S. 55, 51 S.Ct. 49, 75 L.Ed. 156 (Missouri real property excluded from federal estate tax because of state rule of law): Poe v. Seaborn, 282 U.S. 101, 51 S.Ct. 58, 75 L.Ed. 239 (Community property laws); Uterhart v. United States, 240 U.S. 598, 603, 36 S.Ct. 417, 418, 60 L.Ed. 819 (Local ......
  • Estate of Heiser v. Islamic Republic of Iran, Nos. 00–cv–2329 (RCL), 01–cv–2104 (RCL).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • August 31, 2012
    ...the Supreme Court reaffirmed its longstanding precedent that “the use of the word ‘of’ denotes ownership.” Id. (quoting Poe v. Seaborn, 282 U.S. 101, 109, 51 S.Ct. 58, 75 L.Ed. 239 (1930)); see Flores–Figueroa v. United States, 556 U.S. 646, 648–49, 657, 129 S.Ct. 1886, 173 L.Ed.2d 853 (200......
  • Gallagher's Will, In re, No. 5532
    • United States
    • New Mexico Supreme Court of New Mexico
    • March 28, 1953
    ...176 U.S. 484, 20 S.Ct. 404, 44 L.Ed. 555; Bortle v. Osborne, 1930, 155 Wash. 585, 285 P. 425, 67 A.L.R. 1152; and Poe v. Seaborn, 1930, 282 U.S. 101, 51 S.Ct. 58, 75 L.Ed. Indeed, the fact of such vested interest in the wife was the substance of the argument to the court the tax should righ......
  • State ex rel. Gully v. Mutual Life Ins. Co. of New York, 33934
    • United States
    • Mississippi Supreme Court
    • November 25, 1940
    ...clearly wrong. Brewster v. Gage, 280 U.S. 327, 74 L.Ed. 457; I. C. R. R. Co. v. Middleton, 109 Miss. 199, 68 So. 146; Poe v. Seaborn, 282 U.S. 101, 75 L.Ed. 239; Old Colony R. R. Co. v. Com'r of Internal Revenue, 284 U.S. 552, 76 L.Ed. 484; Miller v. Y. & M. V. R. R. Co., 160 Miss. 603, 132......
  • Request a trial to view additional results
417 cases
  • Helvering v. Stuart, Nos. 49 and 48
    • United States
    • United States Supreme Court
    • November 16, 1942
    ...U.S. 55, 51 S.Ct. 49, 75 L.Ed. 156 (Missouri real property excluded from federal estate tax because of state rule of law): Poe v. Seaborn, 282 U.S. 101, 51 S.Ct. 58, 75 L.Ed. 239 (Community property laws); Uterhart v. United States, 240 U.S. 598, 603, 36 S.Ct. 417, 418, 60 L.Ed. 819 (Local ......
  • Estate of Heiser v. Islamic Republic of Iran, Nos. 00–cv–2329 (RCL), 01–cv–2104 (RCL).
    • United States
    • United States District Courts. United States District Court (Columbia)
    • August 31, 2012
    ...the Supreme Court reaffirmed its longstanding precedent that “the use of the word ‘of’ denotes ownership.” Id. (quoting Poe v. Seaborn, 282 U.S. 101, 109, 51 S.Ct. 58, 75 L.Ed. 239 (1930)); see Flores–Figueroa v. United States, 556 U.S. 646, 648–49, 657, 129 S.Ct. 1886, 173 L.Ed.2d 853 (200......
  • Gallagher's Will, In re, No. 5532
    • United States
    • New Mexico Supreme Court of New Mexico
    • March 28, 1953
    ...176 U.S. 484, 20 S.Ct. 404, 44 L.Ed. 555; Bortle v. Osborne, 1930, 155 Wash. 585, 285 P. 425, 67 A.L.R. 1152; and Poe v. Seaborn, 1930, 282 U.S. 101, 51 S.Ct. 58, 75 L.Ed. Indeed, the fact of such vested interest in the wife was the substance of the argument to the court the tax should righ......
  • State ex rel. Gully v. Mutual Life Ins. Co. of New York, 33934
    • United States
    • Mississippi Supreme Court
    • November 25, 1940
    ...clearly wrong. Brewster v. Gage, 280 U.S. 327, 74 L.Ed. 457; I. C. R. R. Co. v. Middleton, 109 Miss. 199, 68 So. 146; Poe v. Seaborn, 282 U.S. 101, 75 L.Ed. 239; Old Colony R. R. Co. v. Com'r of Internal Revenue, 284 U.S. 552, 76 L.Ed. 484; Miller v. Y. & M. V. R. R. Co., 160 Miss. 603, 132......
  • Request a trial to view additional results
1 books & journal articles
  • TAXATION OF UNMARRIED PARTNERS.
    • United States
    • Washington University Law Review Vol. 99 Nbr. 6, August 2022
    • August 1, 2022
    ...advised that there are no tax consequences to such payments. All of these options will be discussed in this article. (6.) Poe v. Seaborn, 282 U.S. 101 (7.) Boris I. Bittker, Federal Income Taxation and the Family, 27 STAN. L. REV. 1389 (1975). (8.) This was justified in Congress on grounds ......

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