United States v. Elfer

• Decision Date: 08 July 1957
• Docket Number: No. 15360.,15360.
• Citation: 246 F.2d 941
• Parties: UNITED STATES of America, Appellant, v. Maud L. ELFER, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

246 F.2d 941 (1957)

UNITED STATES of America, Appellant, v. Maud L. ELFER, Appellee.

No. 15360.

United States Court of Appeals Ninth Circuit.

July 8, 1957.

Charles P. Moriarty, U. S. Atty., Edward J. McCormick, Jr., Richard F. Broz, Asst. U. S. Attys., Seattle, Wash., for appellant.

Richard F. Schacht, Mount Vernon, Wash., for appellee.

Before HEALY, BONE and FEE, Circuit Judges.

BONE, Circuit Judge.

From the month of July, 1943, through May, 1945, appellee, as the wife of Kenneth Schlafer, on active duty with the United States Navy, received allowance in the sum of $50 per month by the provisions of the Servicemen's Dependents Allowance Act of 1942. 56 Stat. 381, 37 U.S.C.A. § 201 et seq. (now repealed).^* In July, 1943, Schlafer was promoted to the grade of Boatswain Mate 2nd Class in the United States Navy. For men in this non-commissioned grade the law provided for quarters allowance, but also provided that at the option of the enlisted man he could elect not to receive quarters allowance and to have his dependents become entitled to receive dependents allowance. During the months involved here, July, 1943, through May, 1945, Schlafer drew his full pay and quarters allowance; he apparently did not exercise his option to waive quarters allowance pertaining to his grade and to have his wife draw dependent allowance. However, the Government paid the dependent allowance during this period also.

Appellee and Schlafer were divorced by decree of the Superior Court of Skagit County, Washington, on May 5, 1947, the decree becoming effective on that date.

The United States (hereafter Government) commenced this action in June, 1955, to recover $1,150.00, the sum of the alleged erroneous payments made from July, 1943, to and including May, 1945, plus interest from August 4, 1954, the date demand was made upon appellee for repayment of $1,150.00. Appellee refused to make repayment as demanded.

Appellee answered (by a second defense) that during the period of payments she and husband Kenneth Schlafer constituted a marital community under the laws of the State of Washington, and that the Government's claim, if it be an indebtedness, is a claim against the then marital community composed of appellee and Schlafer, and was not a personal debt of, or claim against, the appellee. Appellee (by her third defense) further pleaded that if appellee is indebted to the Government as claimed, she is indebted to the Government jointly with Schlafer. Appellee also pleaded that Schlafer was a citizen and resident of the State of Washington subject to the jurisdiction of the District Court both as to service of process and venue; that he could be made a party without depriving the court of jurisdiction of the present parties, and that Schlafer had not been made a party. Her answer prayed that the complaint be dismissed and that Government take nothing. Government moved to strike the defenses pertaining to the debt as being a community obligation and not a personal one, and the defense that the debt, if any, is a joint one and that Schlafer should have been made a party. This motion was denied.¹

The District Court, in findings and conclusions, found the payments to have been made, that appellee and Schlafer were divorced, and that Schlafer resided within the Northern Division of the Western District of Washington. The Court concluded the payments were made to the marital community of appellee and Schlafer "* * * and were made as compensation in part for the military services of the said Kenneth Schlafer in the United States Navy and as such constituted community income," that the payments from July, 1943, to and including May, 1945, were in violation of law as Schlafer was then in a non-commissioned grade to which no family allowance was granted, and that "* * * Plaintiff has failed to join in this action as a party defendant the said Kenneth Schlafer, and that for nonjoinder of party defendants this action should be dismissed." Judgment dismissing the action without costs to either party was entered.

Government asserts error by the District Court in holding that payments in violation of law were made as compensation in part for military services of the male member of the marital community and as such constituted community income; in holding the erroneous payments were made to the marital community of Maude and Kenneth Schlafer, and in holding that Schlafer was a necessary and indispensable party to the action, and in dismissing the action for failure to join said Kenneth Schlafer.

Government concedes that it has found no authority² to support its contention that the erroneous allowance payments were made to appellee and not to the marital community, so that a separate judgment could be entered against the appellee, but argues that the dependent allowance was a gift or gratuity, and that under Washington law a gift is the separate property of the donee,³ that an implied contract to repay arose if overpayment was made, that any obligation of the wife to repay is her separate obligation, and that even if the wife received such payments on behalf of the community, she has a separate obligation to repay as an agent.⁴

We do not agree with Government that the payments were a gift.⁵ We believe the family allowance payments were made as compensation for military service and constituted community income, and that the District Court was correct in so concluding. Cases support this conclusion. In Hokenson v. Hokenson, 1945, 23 Wash.2d 908, 915, 162 P.2d 592, 595, the Court said:

"Appellant Wife * * * has received $50 a month as the result of respondent\'s being in the navy, * * * all of which she has undoubtedly used for her personal use. This money was undoubtedly community property." (Emphasis supplied.)

In Sterrett v. Sterrett, Tex.Civ.App. 1950, 228 S.W.2d 341, 344, the wife purchased realty with dependent allowance payments. The wife argued the Government allotment sent her was a gift and therefore her separate property. The court said:

"We find also the amount of money in question was a part of appellee\'s compensation for services rendered to his Government in time of war and therefore same is community property under our state laws."⁶

Additional discussion of the character of dependent allowance is contained in Kipping v. Kipping, 1948, 186 Tenn. 247, 209 S.W.2d 27, 29.⁷ Cf. Sherburne's Adm'r v. United States, 1880, 16 Ct.Cl. 491, 496.

The dependent allowance was partial compensation for the naval service of Schlafer. The payments from July, 1943, to and including May, 1945, were made because of Schlafer's naval service. Income from personal service is community property. Coles v. McNamara, 1924, 131 Wash. 691, 231 P. 28; Small v. Bartyzel, 1947, 27 Wash.2d 176, 177 P.2d 391.⁸ The fact of overpayment would not alter the community nature of the allowance. The income being community income, the obligation, if any, to repay the mistaken dependent allowance is a community obligation, and not the personal obligation of the wife merely because the payments may have been made by the Government directly to her.

Assuming without deciding that the community is obligated to repay the amount of overpayment mistakenly made by the Government, the problem of recovery is made difficult because the community composed of Maude and Kenneth Schlafer is no longer in existence, having been dissolved by divorce. When a community is dissolved by divorce, the property not brought before the divorce court and not divided between the parties is held by the divorced parties thereafter as tenants in common. Ambrose v. Moore, 1907, 46 Wash. 463, 90 P. 588, 11 L.R.A.,N.S., 103; Barkley v. American Savings Bank and Trust Co., 1911, 61 Wash. 415, 112 P. 495; Olsen v. Roberts, 1953, 42 Wash.2d 862, 259 P.2d 418; Metropolitan Life Insurance Co. v. Skov, 1943, D.C.Or., 51 F.Supp. 470, 475.

Parties do not owe obligations as tenants in common. Obligations usually are owed jointly, jointly and severally, or severally. No Washington cases have been cited, and we have found none, which discuss or decide whether a community obligation, following dissolution of the community by divorce, is owed by the divorced parties jointly, jointly and severally or severally.

We believe that here the community obligation, following dissolution of the community, is owed jointly by the former spouses. Since community assets not divided by the divorce court are owned in common by the divorced spouses, it seems logical that the former spouses would owe an obligation jointly, but not each severally.⁹ It seems especially so as to the wife (appellee) as the wife has no management authority over community property in the absence of authorization by the husband in fact, or by conduct.¹⁰ We conclude that any obligation to repay the overpayment of dependent allowance to the community of Maude and Kenneth Schlafer is owed jointly by them.

As the obligation to repay the dependent allowance overpayment is a joint obligation of appellee and Kenneth Schlafer, we believe the District Court correctly dismissed the action brought against appellee only because of nonjoinder of Kenneth Schlafer as a party defendant. Rule 19(a), Fed.Rules Civ. Proc., 28 U.S.C., reads:

"Subject to the provisions of Rule 23 and of subdivision (b) of this rule, persons having a joint interest shall be made parties and be joined on the same side as plaintiffs or defendants. When a person who should join as a plaintiff refuses to do so, he may be made a defendant or, in proper cases, an involuntary plaintiff."

This rule clearly provides that persons with joint interests shall be joined. Joint obligors are indispensable parties. McRanie v. Palmer, D.C.Mass.1942, 2 F.R.D. 479, 482; 2 Barron & Holtzoff, Federal Practice and Procedure, § 512, p. 62; Pacific Southwest Trust & Savings Bank v. Mayer, 1926, 138 Wash. 85, 244 P. 248.¹¹

Government argues that the District Court should have called in the absent defendant,...