Smith v. Bailey

• Decision Date: 29 October 1886
• Citation: 1 S.W. 627
• Parties: SMITH and others v. BAILEY.
• Court: Texas Supreme Court

1 S.W. 627

SMITH and others v. BAILEY.

Supreme Court of Texas.

October 29, 1886.

Appeal from Marion county.

Geo. T. Todd, for plaintiffs in error.

WILLIE, C. J.

The case before us is that of a married woman attempting to do business as a merchant, in the name of her husband, having started with a stock of goods purchased with her separate means. She replenishes her stock, as often as needed, with the proceeds of the sale of her goods, without keeping any account of how much of capital and how much of profits were used in making purchases for that purpose. Her purchases are made in her husband's name, and on credit. These things continue for two or three years after her marriage, and at the end of that time she forms a partnership with another person; she putting in the goods on hand at the time as her contribution to the capital stock of the firm. Shortly thereafter the interest claimed by her in the partnership property is levied on under an execution for a debt of her husband. The question before us is, was this interest subject to the execution?

Several principles well settled by this court come to our aid in passing upon this question. First, the profits arising from an investment of a married woman's property become the community estate of herself and husband. Braden v. Gose, 57 Tex. 41; Green v. Ferguson, 62 Tex. 529; Epperson v. Jones, 6 Tex. Law Rev. 86; Cleveland v. Cole, (Galveston term, 1886.) Hence the gross gains arising from any sales made of the stock, at a price over and above what it cost, must be held to constitute part of the community estate of the claimant and J. E. Bailey. Another principle, equally well settled, is that the wife's separate property may undergo mutations and changes, yet retain its separate character; but the proof to trace and identify it in its changed condition must be clear and satisfactory. Love v. Robertson, 7 Tex. 6; Rose v. Houston, 11 Tex. 326; Chapman v. Allen, 15 Tex. 278; Philipowski v. Spencer, 63 Tex. 604. It is also true that, to the extent that the wife's separate means enters into the purchase of other property, the latter is to be treated as her separate estate; and the same rules apply to the community property and the husband's separate estate. As it is the presumption that property found in the possession of either husband or wife during marriage is community estate, and this presumption must be overcome by satisfactory proof, it follows that, without such proof as to how much separate and how much community funds were used in the purchase of a stock of goods in the possession of the wife, it cannot be determined that she has any separate interest in them whatever. The burden of proof is upon her to show these facts in rebuttal, and not upon the creditor who seeks to subject them to the husband's debt. Epperson v. Jones, supra.

This was not done in the present case. Mr. and Mrs. Bailey were married in 1877 or 1878. The goods in her store at that time were her separate property. She did business with them from that time on, selling them in the usual course of trade, and with the proceeds of the goods replenished her stock. From the date of...