Horlock v. Horlock

• Decision Date: 25 March 1981
• Docket Number: No. A2540,A2540
• Parties: Roy M. HORLOCK, Appellant, v. Dorothy Gray HORLOCK, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 478

614 S.W.2d 478

Roy M. HORLOCK, Appellant, v. Dorothy Gray HORLOCK, Appellee.

No. A2540.

Court of Civil Appeals of Texas, Houston (14th Dist.).

March 25, 1981.

Rehearing Denied April 15, 1981.

Michael D. Stewart, Urban & Coolidge, Bryan W. Scott, Law Offices of Bryan W. Scott, Houston, for appellant.

Robert E. Ballard, Kronzer, Abraham & Watkins, John L. Russell, Ragan & Russell, Houston, for appellee.

Before MILLER, JUNELL and MURPHY, JJ.

JUNELL, Justice.

Appellant, Roy M. Horlock, defendant in the court below, seeks reversal of a judgment in favor of appellee, Dorothy Gray Horlock, plaintiff in the court below.

The Horlocks were married to each other on November 22, 1966, and were divorced by a decree dated January 6, 1975. During the marriage Mr. Horlock acquired an 11.89% interest in a limited partnership known as Brooks College, Ltd. This asset was not divided or disposed of in any manner in the divorce decree.

The instant suit was originally filed on June 11, 1976; but the plaintiff did not allege any cause of action with respect to Brooks College, Ltd. until October 3, 1978, when by her first amended original petition she sought to establish her interest in said partnership. On November 22, 1978, in deposition testimony by Mr. Horlock's accountant, it was divulged that on April 26, 1976, the limited partnership was changed to a general partnership and there was a 30% reduction in Mr. Horlock's interest therein. On March 7, 1979, in her third amended original petition Mrs. Horlock sought to recover damages for Mr. Horlock's conversion of her interest in the limited partnership.

In his answer the appellant pled that any cause of action for conversion of Mrs. Horlock's interest in Brooks College, Ltd. was barred by the statute of limitations since it was not filed within 2 years after April 26, 1976. Appellant also pled as a defense to the conversion action that Brooks College, Ltd. was his separate property.

In two of his points of error appellant claims that the trial court erred in awarding damages for conversion of Brooks College, Ltd. because such cause of action was barred by the statute of limitations and because the interest in Brooks College, Ltd. was Mr. Horlock's separate property. We overrule both of these points for the reasons set forth below.

The interest in Brooks College, Ltd. was acquired during the marriage of Mr. and Mrs. Horlock. The property was not divided or otherwise disposed of in the divorce decree. Community property consists of the property, other than separate property, acquired by either spouse during the marriage. Tex.Fam.Code Ann. § 5.01 (Vernon 1975). Property possessed by either spouse during or at the time of dissolution of marriage is presumed to be community property. Tex.Fam.Code Ann. § 5.02 (Vernon 1975). This presumption is rebuttable. 30 Tex.Jur.2nd Husband and Wife § 181 (1962) (Supp.1980), and numerous cases there cited. The burden of proof in rebutting it, of course, rests on the party who alleges that the presumption does not obtain. Kitchens v. Kitchens, 372 S.W.2d 249 (Tex.Civ.App. Waco 1963, writ dism. w. o. j.).

In our opinion the appellant failed to sustain his burden of proving that the Brooks College, Ltd. interest was his separate property. His argument is very strained and complicated; but it seems that if his evidence proves anything, it proves that the Brooks College, Ltd. interest was community property, not his separate property. He says that during the marriage he advanced $100,000.00 in community funds to Collegiate Service Corporation, a corporation in which Mr. Horlock owned over 14,000 shares as his separate property. In the appeal of the divorce suit, Horlock v. Horlock, 533 S.W.2d 52 (Tex.Civ.App. Houston (14th Dist.) 1975, writ dism'd.), this court held that said shares were Mr. Horlock's separate property, granted the community estate a right of reimbursement of $100,000.00 for advances made by the community estate and awarded Mrs. Horlock $50,000.00 of such reimbursement. In the instant suit Mr. Horlock contends that Collegiate Service Corporation gave him a promissory note for $30,000.00 to evidence a part of its indebtedness to him for the $100,000.00 in advances and that he purchased his interest in Brooks College, Ltd. with the $30,000.00 note. His argument is that since the appellate court in the divorce case ordered his separate estate to reimburse the community estate for the $100,000.00 in advances, the $30,000.00 note became his separate property and his interest in Brooks College, Ltd. became his separate property when he used the note to buy the partnership interest. We disagree with this argument. Assuming, as appellant contends, that the $30,000.00 note was given to Mr. Horlock by Collegiate Service Corporation to evidence its indebtedness to him for a part of the advances of community funds to Collegiate Service Corporation, the note, upon delivery to Mr. Horlock, would have been a community asset of the parties and the interest of Brooks College, Ltd. purchased with that note would constitute a community asset.

Under this record we hold that appellant fell far short of sustaining his burden of proving that the partnership interest in Brooks College, Ltd. was his separate property. He has completely failed to trace his separate funds into the purchase of the Brooks College, Ltd. interest; therefore, the presumption is that it was community property and any doubt as to its character must be resolved in favor of the community. Contreras v. Contreras, 590 S.W.2d 218 (Tex.Civ.App. Tyler 1979, no writ).

In view of our decision that the Brooks College, Ltd. interest was community property of the parties and because such interest was not disposed of by the divorce decree, after the divorce Mr. Horlock and his former wife each owned an undivided 1/2 interest therein as cotenants or as tenants in common. Busby v. Busby, 457 S.W.2d 551, 554 (Tex.1970).

This brings us to a consideration of appellant's first point of error, that the cause of action for conversion of the Brooks College, Ltd. interest was barred by the two year statute of limitations.

In a cotenancy situation each cotenant is entitled to possession, and possession by one cotenant is generally not adverse to the other in the absence of some repudiation, notice or ouster. Southern Pine Lumber Co. v. Hart, 161 Tex. 357, 340 S.W.2d 775, 782 (1960). To claim adversely the cotenant in possession must repudiate the other's ownership, and notice of the repudiation must be brought home to the other cotenant. Toscano v. Delgado, 506 S.W.2d 317 (Tex.Civ.App. San Antonio 1974, no writ); Yeo v. Yeo, 581 S.W.2d 734 (Tex.Civ.App. San Antonio 1979, writ ref'd n. r. e.).

The Yeo case was a suit by a former wife against her former husband for partition of military retirement benefits. Mr. Yeo had retired from the U. S. Air Force on April 23, 1964, and received military retirement benefits from and after that date. The parties were divorced on September 3, 1964. Neither the property settlement nor the divorce decree mentioned military retirement benefits. Mr. Yeo pled several defenses, including the four year statute of limitations, and moved for summary judgment, which was granted. The Court of Civil Appeals reversed and remanded, holding that there was nothing in the record to show any repudiation by Mr. Yeo of his former wife's interest in the retirement benefits. As to the limitations defense the court said Since appellee specially pleaded the statute of limitations as an affirmative defense, it was his burden to prove all essential facts necessary for a recovery thereunder. Moreover, as movant for summary judgment, it was further incumbent on him to establish limitations as a matter of law. He did not meet this burden.

Mooney v. Glasspool, 602 S.W.2d 364 (Tex.Civ.App. Beaumont 1980, no writ) is another case involving a former wife's suit to recover her share of her former husband's military retirement benefits. The parties were married in 1949 at a time when the husband had been in the army for four years. He retired in 1965 and began drawing his retirement benefits. The parties were divorced in 1971. In connection with the community property division the military retirement benefits were not mentioned. The former husband pled that the cause of action was barred by the statute of limitations. The case was tried to the court without a jury. At the conclusion of the trial the court agreed that limitations barred the action and denied the wife any recovery. On appeal the Beaumont Court reversed, holding that the limitations plea was "wholly without merit since there is no evidence on the record to show any repudiation by the husband of the wife's interest in the retirement funds." The husband contended on appeal that the trial court findings of fact and conclusions of law that the wife's cause of action was barred by the statute of limitations were binding on the appellate court. This contention was expressly overruled.

The effect of the decision in Mooney is that the burden of proof on the statute of limitations issue is on the cotenant who asserts that the rights of his cotenant are barred by the statute of limitations. This rule was recognized and followed in Manning v. Benham, 359 S.W.2d 927 (Tex.Civ.App. Houston 1962, writ ref'd n. r. e.).

In our opinion this is the correct rule, and it governs our disposition of the appellant's first point of error. There is no evidence in the record that Mr. Horlock ever gave Mrs. Horlock any notice that he had repudiated her interest in Brooks College, Ltd. Mrs. Horlock's first notice to that effect came in deposition testimony of Mr. Horlock's accountant on November 22, 1978, approximately two months after Mrs. Horlock had filed suit to establish her interest in Brooks College, Ltd. On March 7, 1979, Mrs. Horlock amended her pleadings to sue for damages for conversion of her interest in that limited...