Estate of Hanau v. Hanau
| Decision Date | 20 May 1987 |
| Docket Number | No. C-6133,C-6133 |
| Citation | 730 S.W.2d 663 |
| Parties | In the Matter of the ESTATE OF Robert C. HANAU, Deceased, Petitioner, v. Dorris Dunn HANAU, Respondent. |
| Court | Texas Supreme Court |
Richard D. Davis, Sr., Johnson & Davis, Harlingen, and Michael J. Cenatiempo and Sharon E. Gardner, Michael J. Cenatiempo & Associates, P.C., Houston, for petitioner.
Randell W. Friebele, Friebele & Mardis, Harlingen, for respondent.
This case involves the question of whether the rule announced in Cameron v. Cameron, 641 S.W.2d 210 (Tex.1982) applies to probate as well as divorce matters.
Robert and Dorris Hanau were married in Illinois in 1974 and five years later moved to Texas. After moving here, Robert prepared a will leaving his separate property to his children by a prior marriage, and his community property to Dorris. Robert and Dorris each had substantial amounts of separate property before the marriage, and at all times kept such property under their own names. While married and in Illinois, Robert accumulated numerous shares of stock through the use of his separate property. Under Illinois common law, this would have remained his separate property. Robert died in Texas in 1982 and Dorris was granted letters testamentary on May 10, 1982. In February 1983, Dorris transferred large amounts of the estate's stock to the son, Steven, and the daughter, Leslie Ann. In May 1983, however, Steven brought an original petition seeking to have Dorris removed as exectutrix, claiming that she was intentionally mismanaging and embezzling from the estate. Dorris soon thereafter filed an inventory and appraisal listing all of the property owned by Robert, claiming that all stocks obtained by Robert during their marriage were community property, even though they were originally acquired in a common law state. Thus, Dorris sought the return of some of the stock she had already delivered to the children. The parties stipulated that the stocks acquired before marriage were Robert's separate property and that stocks acquired while married in Texas were community property. The only question presented to the trial court was the status of those stocks bought during the marriage in Illinois using Robert's separate property.
The trial court severed the question of proper distribution of the assets and granted a partial summary judgment to Dorris on the characterization issue. The trial judge ruled that all the amounts that accrued during the marriage would be considered as community property in Texas, despite their characterization as separate property outside the state. He concluded that "the Texas Supreme Court in Cameron v. Cameron could not have intended to limit its new characterization of common law marital property to divorce proceedings, but rather intended that said characterization to be applied to any situation where the issue arose, including probate proceedings."
The court of appeals affirmed in part and reversed in part. 721 S.W.2d 515. The court determined that Cameron was not applicable to probate situations, rather it should be limited only to divorce matters. Therefore, the court held that most of the stocks should have been classified as separate property, and rendered judgment that they go to the son and daughter. The court did, however, affirm as to one specific stock (TransWorld) where it held that a proper tracing could not be shown so as to classify it as separate property. Both parties appeal here; Dorris as to the former holding, Steven as to the latter. We affirm in part and reverse and render in part.
In her application, Dorris relies exclusively on § 3.63 of the Family Code and Cameron v. Cameron, 641 S.W.2d 210 (Tex.1982). Dorris admits that Cameron dealt with divorce rather than probate, but argues that this court intended to make "a fundamental change in its characterization of common law marital property." She argues that a broad interpretation of the result in Cameron should be applied because no distinction can be made between dissolution of the marriage by death or divorce. We disagree.
The long-standing general rule is that property which is separate property in the state of the matrimonial domicile at the time of its acquisition will not be treated for probate purposes as though acquired in Texas. Oliver v. Robertson, 41 Tex. 422, 425 (1874); McClain v. Holder, 279 S.W.2d 105, 107 (Tex.Civ.App.--Galveston 1955, writ ref'd n.r.e.). In Cameron, we held, however, that separate property acquired in common law jurisdictions merits different treatment in the limited context of divorce or annulment. While there were solid reasons for creating the Cameron rule in those situations, the same rationales are not applicable to probate procedures.
In Cameron, this court used three bases for its holding. First, the court examined the laws of some of the other community property states, and agreed that a difference exists between common law marital property and the separate property of community property jurisdictions. This court cited to several cases, including Rau v. Rau, 6 Ariz.App. 362, 432 P.2d 910 (Ct.App.1967), in support of its holding. In examining Rau, however, it is clear that the court there refused to apply the rule to probate cases because "the statutory regulation of rights of succession has been regarded as something apart from the determination of property rights between living persons." Id., at 914. Furthermore, nothing in the other cases used for support in Cameron reveals an intent to extend the rule to probate cases in those jurisdictions. See Hughes v. Hughes, 91 N.M. 339, 573 P.2d 1194 (1978); Berle v. Berle, 97 Idaho 452, 546 P.2d 407 (1976). In fact, it appears that the only community property states which have extended the rule reach such a result based completely upon statutory authority. See California Prob.Code § 66 (West 1985); Idaho Code § 15-2-201 (1971). Thus, there is no case law or trend which supports change of the rule here.
The second basis used in Cameron was the Texas legislature's action in adopting § 3.63 of the Family Code. Section 3.63 provides that a trial judge shall make a "just and right" division of property, which may include: "Property that was acquired by either spouse while domiciled elsewhere and that would have been community property if the spouse who acquired the property had been domiciled in the state at the time of the acquisition." Therefore, this court merely judicially adopted § 3.63 into the substantive law of this State. Dorris suggests that we apply § 3.63 to the probate situation, but by its own terms the Family Code provision applies only "in a decree of divorce or annulment." In addition, there is no provision similar to § 3.63 in the Probate Code, nor in any other statute of this state, which would logically require us to follow her suggestion. Therefore, there is also a lack of statutory authority which mitigates against extending Cameron.
The final foundation in Cameron dealt with the necessity of giving the trial court the power to effect an equitable distribution of property. Without such power, unfair results could occur because one spouse's equitable share of the other spouse's separate property under common law might not be considered under our community property definition of separate property. The Cameron holding merely made such an interest in common law separate property one which is susceptible to a Texas trial court's equitable division. The key is that there is no similar right in a probate proceeding, nor is there any need for any. If...
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