Marriage of Thurmond, Matter of

Decision Date29 November 1994
Docket NumberNo. 07-93-0311-CV,07-93-0311-CV
PartiesIn the Matter of the MARRIAGE OF Roger Chaney THURMOND and Edith S. Thurmond and in the Interest of Roger Chaney Thurmond II, A Minor Child.
CourtTexas Court of Appeals

Fred M. Sullivan, Richardson, for appellant.

Stephen W. Shoultz, Dallas, for appellee.

Before REYNOLDS, C.J., and DODSON and BOYD, JJ.

BOYD, Justice.

In six points of asserted error, appellant Roger Chaney Thurmond challenges the portion of the trial court judgment making a property division and setting child support. For the reasons stated herein, we sever that portion of the judgment and reverse it. The remainder of the judgment, being unchallenged by appellant, is affirmed.

The parties were married in Arkansas in 1969. Subsequent to their marriage, appellant formed two corporations in Arkansas and one in Texas. One of the two Arkansas corporations, Universal Properties, managed several rental properties owned by other entities. The second, Thurmond Development Corporation (TDC), developed and sold air purification systems. Some time before 1990, substantial judgments were taken against TDC rendering it essentially insolvent.

In late 1989, the parties moved to Texas and purchased a home in the City of Plano for $198,809. Of that amount, $53,809, or 27.07 percent of the purchase price, came from a testamentary trust created by appellant's father and, thus, constituted appellant's separate property. The remaining 72.93 percent of the cost was paid by incurring community debt. Payments on this community debt have been paid exclusively out of the separate property income of the trust. Soon after moving to Texas, appellant also formed a third corporation, Thurmond Air Quality Systems (TAQS).

On April 16, 1991, a little over a year after the parties moved to Texas, appellee filed a petition for divorce in which she sought, inter alia, a division of community property, sole managing conservatorship of the parties' minor child, and an award of child support.

In its judgment, the trial court awarded exclusive possession of the parties' residence to appellee until the emancipation of the minor child. At such time, the house was to be sold and the proceeds of the sale divided forty percent to appellant and sixty percent to appellee. In its findings of fact and conclusions of law, the trial court stated that appellant failed to prove, by clear and convincing evidence, any "separate property reimbursement" due on the residence or any separate property interest in the house.

In his first point, appellant contends that the trial court erred in finding that he had no separate property interest in the parties' home. When both separate and community resources are used to acquire property during marriage, Texas courts have fairly consistently referred to the relationship between the separate estates and community estates as "a type of tenancy in common." See Gleich v. Bongio, 128 Tex. 606, 99 S.W.2d 881, 883-84 (1937); Cook v. Cook, 679 S.W.2d 581, 583 (Tex.App.--San Antonio 1984, no writ); Carter v. Grabeel, 341 S.W.2d 458, 462 (Tex.Civ.App.--Amarillo 1960, no writ). However, because a tenancy in common is not an estate in property but, rather, a description of the relationship between estates, 16 Tex.Jur.3d Cotenancy and Joint Ownership § 9 (1981), the cases have failed to clearly articulate the property interests of each of the estates.

Our courts have variously referred to the rights of a spouse's separate estate in this situation as "pro tanto ownership," Broussard v. Tian, 156 Tex. 371, 295 S.W.2d 405, 406 (1956); "a part interest," Gleich, 99 S.W.2d at 883; "equitable title," Goddard v. Reagan, 28 S.W. 352, 353 (Tex.Civ.App.--San Antonio 1894, no writ); "separate interest," Cook, 679 S.W.2d at 583; and "constructive trust," Maxie v. Maxie, 635 S.W.2d 175, 177 (Tex.App.--Houston [1st Dist.] 1982, no writ). We believe the most viable characterization of the interest of a spouse's separate estate is that of "equitable title."

In addition to Goddard, several decisions have applied the principles of resulting trusts and equitable title in resolving these issues. See Cohrs v. Scott, 161 Tex. 111, 338 S.W.2d 127, 130 (1960); Blum v. Rogers, 71 Tex. 668, 9 S.W. 595, 597 (1888); Parker v. Coop, 60 Tex. 111, 116 (1883); Ford v. Simpson, 568 S.W.2d 468, 470 (Tex.Civ.App.--Waco 1978, no writ); Robbins v. Robbins, 519 S.W.2d 507, 509 (Tex.Civ.App.--Fort Worth 1975, no writ); Penman v. Blount, 264 S.W. 169, 170 (Tex.Civ.App.--Beaumont 1924, no writ). These cases provide a single analysis for characterizing property not only at the dissolution of marriage, but also in resolving the claims of third party creditors.

Equitable title is a property right greater than a right of reimbursement. It has been held that equitable title is a sufficient interest to permit execution by a creditor. See, 34 Tex.Jur.3d Enforcement of Judgments § 29 (1984). As a property right, it may not be divested from a spouse at divorce without violating our state constitution. Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 142 (Tex.1977).

It is a well established rule that when a spouse uses separate property to acquire property during marriage and takes title to that property in the names of both spouses, a presumption arises that the purchasing spouse intended to make a gift of one half of the separate funds to the other spouse. 1 Cockerham v. Cockerham, 527 S.W.2d 162, 168 (Tex.1975); Graham v. Graham, 836 S.W.2d 308, 310 (Tex.App.--Texarkana 1992, no writ). This rule is consistent with the principles of trust law concerning purchase money resulting trusts. See George T. Bogert, Trusts § 74, at 271 (6th ed. 1987). The presumption, however, can be rebutted by evidence of the absence of an intent to make a gift. See Cockerham, 527 S.W.2d at 168. That is, there is no requirement that an affirmative intent not to make a gift be shown.

In addition to, and apart from, the ownership interest that is acquired by a separate estate which pays part of the purchase price of property acquired during marriage, payments made out of a separate estate for the benefit of the community estate, including the reduction of community debt, give rise to a claim for reimbursement. Penick v. Penick, 783 S.W.2d 194, 196 (Tex.1988); Burton v. Bell, 380 S.W.2d 561, 565 (Tex.1964); Graham, 836 S.W.2d at 310. However, as appellant's point of error only challenges the trial court's failure to find a separate property interest in the parties' home and does not raise the issue of reimbursement, we need not consider that issue.

Both appellant and the co-trustee of his father's testamentary trust testified that $53,809 from the separate property trust was used to pay part of the purchase price on the parties' home. This evidence was uncontradicted. Based on the uncontested testimony that the purchase price of the house was $198,809, appellant's separate property interest would be 27.07 percent (or 13.53 percent to each party's separate estate if the presumed gift of one half to appellee was not rebutted).

Before addressing appellee's other challenges to this point, we will address her single cross-point challenging the trial court's admission of the co-trustee's testimony. Appellee argues that the co-trustee's testimony should have been excluded under Rule 215(5) of the Texas Rules of Civil Procedure due to appellant's failure to supplement his answer to her discovery request concerning the identity of persons having knowledge of facts relevant to the case until some thirteen days before trial. In response, appellant argues that the record reveals that good cause existed to justify the admission of the testimony.

The record does support appellant's claim that the question of his separate property interest in the house was not at issue until shortly before trial. Appellee's argument at trial that appellant had "always had claims of separate property in his response" is not supported by the record. Appellant's original answer was a general denial. In his cross-action filed June 17, 1991, he made no mention of separate property. In his first amended original answer, appellant sought only reimbursement for separate property payments made on the house. It was not until appellant's second amended original answer, filed April 16, 1992, that he raised his separate property claim.

As required by Rule 215(5), the record supports a finding of good cause. Also relevant to the trial court's decision to allow the co-trustee's testimony is the fact that such testimony was merely cumulative of appellant's testimony. Appellant's effort to supplement his responses after discovering that the co-trustee's testimony would be relevant was also a factor. The absence of a verification on the supplementation was not significant. Jones v. Kinder, 807 S.W.2d 868, 872 (Tex.App.--Amarillo 1991, no writ). 2

Appellee's other responses to this first point are that (1) appellant failed to overcome the presumption of community property, (2) the trial court did not abuse its discretion "in making a division of the parties' property," (3) a claim for reimbursement is an equitable one within the discretion of the trial court, and (4) the evidence of the trust balance contradicts the dispersement of $53,809 for the house. Each of these contentions must be dismissed.

By her first contention, appellee argues that appellant's evidence of a separate property interest in the home was insufficient to overcome the presumption of community property created by section 5.02 of the Texas Family Code. This section provides that a party seeking to overcome the community property presumption must do so by clear and convincing evidence. Each of the cases cited by appellee were decided before the 1987 amendment to section 5.02 which set out the clear and convincing evidence standard. Tex.Fam.Code Ann. § 5.02 historical and statutory notes (Vernon 1993) [Act...

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