Page v. Podol

California Court of Appeal Jan 28, 1935 No. Civ. 8939Published

Before: Edmonds

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Holding. A husband who pays a tax deficiency on profits from property held in joint tenancy with his former wife is entitled to recover one-half of that payment from her under the equitable doctrine of contribution.

Issues

Whether a husband who pays a tax deficiency on joint property profits is entitled to recover half from his former wife.
Whether the husband's payment of the tax deficiency was voluntary, thereby precluding recovery.

Disposition. reversed

Quotations verified verbatim against the opinion

“A person who, not acting voluntarily, pays taxes for which another is legally or equitably bound is entitled to recover upon this principle.”

“The existence of the liability was sufficient basis for Dr. Berry to make the payment and give him the right to recover from the defendant one-half the amount paid.”

EDMONDS, J.,

pro tem.

The defendant had judgment in an action brought by her former husband, Andrew J. Berry, to recover one-half of a deficiency in income tax paid by him after dissolution of the marriage on the profits of their dealings in property held by them in joint tenancy during the marriage relation. Plaintiff died since the trial and an appeal from the judgment is prosecuted by his executrix.

In the years 1927 and 1928 Dr. Berry and the defendant, his then wife, sold certain stock which had theretofore been acquired by their joint efforts and held by them as joint tenants. The husband, while he and his wife were living together, made a joint income tax return for these transactions and paid the tax computed by him thereon.

All of the property which had been accumulated was equally divided between the parties in 1928 by a written agreement. In 1930 the defendant secured a decree of divorce from her husband in Nevada, subsequently remarrying. After the divorce the commissioner of internal revenue demanded from Dr. Berry the sum of $4,069.16 claimed to be due the government upon a redetermination of the taxes. Upon formal notices and demands from the commissioner Dr. JBerry demanded that his former wife pay one-half of the amount which she refused to do. Dr. Berry then paid the tax claimed and sued to recover one-half of the amount.

The property of the husband and wife held in joint tenancy constituted one estate in which the rights of each were identical and coextensive.

(Siberell

Siberell,

214 Cal. 767 [7 Pac. (2d) 1003].) When this property was sold both husband and wife became liable for the tax on the profits made. The return was made by the husband under the provisions of the Federal Income Tax Law allowing a single joint return for the income of a husband and wife living together.

The Revenue Act of 1928 provides in section 51: “(b) HUSBAND AND WIFE. If a husband and wife living together have an aggregate net income for the taxable year of $3,500 or over or an aggregate gross income for such year

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Page v. Podol

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EDMONDS, J.,

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