Cohrs v. Scott, A-7279

• Decision Date: 22 June 1960
• Docket Number: No. A-7279,A-7279
• Citation: 161 Tex. 111,338 S.W.2d 127
• Parties: Herman B. COHRS, Petitioner v. Frances Beatrice SCOTT, Respondent.
• Court: Texas Supreme Court

Page 127

338 S.W.2d 127

161 Tex. 111

Herman B. COHRS, Petitioner v. Frances Beatrice SCOTT, Respondent.

No. A-7279.

Supreme Court of Texas.

June 22, 1960.

Rehearing Denied Oct. 5, 1960.

Chas. A. Keilin, Houston, for petitioner.

Edwin I. McKellar, Jr., Houston, of Bracewell, Reynolds & Patterson, Houston, for respondent.

GREENHILL, Justice.

Mrs. Scott sued W. H. Scott for divorce. In the accompanying dispute over their property, Mrs. Scott made Herman Cohrs a party. After Mrs. Scott had concluded the presentation of her evidence against Scott and Cohrs jointly, the court announced that he would instruct the jury to find for Cohrs. By agreement, Mrs. Scott's cause of action against Cohrs was severed from that asserted against Mr. Scott, and separate judgments were subsequently entered. Mrs. Scott alone appealed from the judgment entered for Cohrs on the instructed verdict. At the conclusion of the evidence against Mr. Scott, it was announced that Mr. and Mrs. Scott had reached an agreement on a division of their property, subject to Mrs. Scott's claim against Cohrs. The jury was dismissed, and the court rendered judgment awarding the divorce to Mrs. Scott and dividing the property pursuant to the agreement. No appeal was taken from the judgment against Mr. Scott.

In this appeal of the judgment for Cohrs, Mrs. Scott contends that her husband secretly and fraudulently (as to her) invested community funds of the marriage of herself and Mr. Scott in an apartment building acquired in Cohrs' name. Her main point is that a resulting trust should be imposed in favor of the community in such apartment, and that she is entitled to her half interest in the benefits of such trust. She contends also that she has a cause of action against Cohrs for his participation in the allegedly fraudulent use of community funds of herself and W. H. Scott in the purchase of two automobiles for the use of a woman companion of Scott. The judgment of the trial court in instructing a verdict for Cohrs was reversed by the Court of Civil Appeals. It held that an issue of fact was raised on both of the points. 321 S.W.2d 643. We here reverse the judgment of the Court of Civil Appeals and affirm that of the trial court.

(1) The building in question was known as the Montrose Apartments in Houston. It was purchased by Cohrs on February 1, 1946. The date is important because a resulting trust for purchase money must arise at the time of the passage of title. Morrison v. Farmer, 147 Tex. 122, 213 S.W.2d 813; Solether v. Trinity Fire Ins. Co., 124 Tex. 363, 78 S.W.2d 180.

The Scotts were married in 1923. Mrs. Scott testified that the early years of her married life were pleasant and satisfactory. This period included the year 1946 when Cohrs purchased the apartment. She said that the relations between her and her husband, Scott, were always good until 1952; that he was a devoted husband until 1952. She began to notice a change in the latter part of 1951. She then began to suspect that he was involved with another woman but did not know it was a Mrs. Lou Ayers until November of 1953.

Mr. Scott began campaigning vigorously in 1952 and was elected District Attorney of Harris County that year. He was away from home a great deal after that. Mrs. Scott went to Europe in 1953, at Scott's request, she said. Their daughter who was with her husband then stationed in Italy, was having a baby.

Mrs. Scott relies on three circumstances, mainly, to raise an issue of fact on the resulting trust:

1. Recitals in the divorce pleadings of Cohrs in 1944 that he and his wife had accumulated no community property and his testimony that the wife got only $5,000 in settlement. This is to show that Cohrs did not have the money to make an $11,250 down-payment in 1946 on the apartment. She would then further infer that the money, or a part of it, came from Scott.

2. Statements in an application to the city for water service for the apartment listing Scott as the subscriber. Cohrs signed the application as agent for Scott.

3. Testimony of the witness Ehman that Cohrs had told him in 1953 and again in 1955 or 1956 that he (Cohrs) and Scott owned the apartment together. We will discuss each of these contentions:

(1) The 'admission' in Cohrs' divorce pleadings.

Cohrs first met Scott in 1935. Scott represented him in a few matters as did Mr. K. C. Barclay. Cohrs had acquired the Belmont Hotel, across the street from the Montrose Apartments, before his marriage in 1935 (which would make it his separate property). Shortly after the outbreak of World War II, Cohrs went into the service and to the South Pacific. He left funds, not involved here, with Scott to be sent to his (Cohrs') mother each month.

In 1944, while Cohrs was still in the Pacific, he employed Scott to file a divorce for him in Harris County. The pleadings, which were more or less formal, alleged that the parties had accumulated no community property during the marriage. The pleadings were not sworn to and were abandoned. The suit in Harris County was dismissed at Cohrs' request, and the Cohrses were divorced in Tennessee later in 1944. Cohrs testified that his wife had full knowledge of their properties, that they made an out-of-court settlement in which Mrs. Cohrs got about $5,000, and that his wife signed a quitclaim to his properties. His testimony in this regard was not disputed. The 'no community property' statement in the abandoned pleading and the $5,000 settlement to the wife in 1944 are the items relied upon to prove Cohrs' inability to pay $11,250 on the Montrose Apartments in February, 1946.

At the time of the purchase by Cohrs, Scott was getting along well with Mrs. Scott. During this period (1946) and up until the latter part of 1951 she testified that their relations were good; that he was a devoted husband.

The apartment, as stated, was purchased by Cohrs on February 1, 1946, from Mrs. Saulsbury of Temple for $45,000. Cohrs paid $11,250 down and executed notes for the balance. The seller was represented by Mr. Byron Skelton, also of Temple, and the contract of sale was closed in his office. Cohrs was represented by Scott. There is no evidence that Scott made any of the down payment or obligated himself or the community of himself and Mrs. Scott to pay the notes. Scott swore that he had no interest in the property at any time and that he had none at the time of trial. Cohrs swore that he, and he alone, made the down payment and paid each note from his own funds as they came due. Cohrs and Scott both denied that they had ever been partners or joint-adventurers in any business or venture.

(2) The 'admissions' in the city water application.

On February 2, 1946, the day following the closing of the sale of the apartment, application was made to the City of Houston for water service. The application form called for certain statements. Among those were these, with the answer given being underscored:

Name: W. H. Scott

Address to be served: 1217-19 Clay Class RM-12

Occupied as: RM-12 owned. Owned by _____

Occupation: Attorney

Mail bill to: c/o Belmont Hotel, 1308 Clay (owned by Cohrs)

Last address where water was used: 2417 Riverside Dr. 159A-824 (Scott's residence)

Is Private Water Supply on Property: No since 1936 not moving

The application is signed 'W. H. Scott, subscriber, by H. B. Cohrs, authorized agent.' The words 'subscriber' and 'authorized agent' are printed on the form. At the top of the application is printed by hand, 'Letter from Mr. Scott for authority for Mr. Cohrs to sign in file.' The letter was not introduced.

The city's employee who produced the application had no knowledge of its execution. He testified that the purpose of the application is to establish credit. Otherwise a deposit is required. No deposit was required of former subscribers, and Scott was a subscriber at his residence. But, as Mrs. Scott points out, so was Cohrs. He owned the Belmont Hotel across the street. And the deposit would not have been a substantial one. Mrs. Scott contends that the application is a statement by Scott of ownership and a recognition by Cohrs of Scott's ownership. Scott testified that it was an application for water service and nothing more; that his name is affixed as 'subscriber' (not owner); and that the blank 'Owned by,' inquiring as to the status of the subscriber, was left blank.

(3) The oral declarations of Cohrs to Ehman.

Carl Ehman, called as a witness by Mrs. Scott, was 76 years of age at the time of trial. Following the filing of the divorce proceedings between the Scotts, he visited Mrs. Scott from time to time. He occasionally took her to dinner and a show. He was a real estate man and appraiser. He offered to help Mrs. Scott in this suit. After this suit was filed, he suggested to Mrs. Scott that she had an interest in the Montrose Apartments.

This suit for divorce and accounting was filed in 1955. Thereafter, around the first of January, 1956, when she and Ehman were driving home from a show, he told her about his conversations with Cohrs. Before that, she had no information or reason to believe she or the community had any interest in the Montrose Apartments.

Ehman's testimony is set out at length in the opinion of the Court of Civil Appeals. In summary, he testified that in 1953, some seven years after the purchase of the apartment by Cohrs, he had a conversation with Cohrs in front of the elevator in the Bankers Mortgage Building. Ehman said that Cohrs told him that he (Cohrs) and Scott owned some properties together and mentioned the Montrose Apartment. Ehman could not recall any other property allegedly owned by Cohrs and Scott. In 1956, Cohrs and Ehman again met on an occasion which had nothing to do with this case except that Ehman said Cohrs then inquired whether he, Ehman, knew where Cohrs could borrow $80,000 to fix up the Montrose Apartments. Ehman said, 'That is the place you and Bill Scott own together, and he said 'yes'.' 'I asked him if Bi...