Stephens v. Stephens

• Decision Date: 14 December 1992
• Docket Number: No. 17622,17622
• Parties: Bobby J. STEPHENS, Petitioner-Respondent, v. Judy G. STEPHENS, Respondent-Appellant.
• Court: Missouri Court of Appeals

Page 909

842 S.W.2d 909

Bobby J. STEPHENS, Petitioner-Respondent, v. Judy G. STEPHENS, Respondent-Appellant.

No. 17622.

Missouri Court of Appeals,

Southern District,

Division Two.

Dec. 14, 1992.

Debra A. Carnahan, Stephen F. Gaunt, David L. Steelman, Steelman & Beger, Rolla, for respondent-appellant.

John A. Clayton, Thomas, Birdsong & Clayton, P.C., Rolla, for petitioner-respondent.

FLANIGAN, Judge.

This action for dissolution of marriage was instituted, in July 1989, by Bobby J. Stephens against his wife Judy G. Stephens. The parties, who will be referred to by their first names, were married on July 25, 1980, and separated on July 10, 1989. The parties have one child, Savannah, who was born in 1985.

After an evidentiary hearing, the trial court, on May 14, 1991, entered its decree which: (a) dissolved the marriage, awarded Bobby and Judy joint legal custody of Savannah, and awarded Judy primary physical custody of Savannah; (b) ordered Bobby to pay $800 per month for child support, retroactive to July 17, 1989, and to maintain health insurance on Savannah, and awarded Bobby "the IRS deduction for the minor child"; (c) classified certain property valued at $53,675 as nonmarital property and distributed it to Judy; (d) classified certain property valued at $78,855.13 as nonmarital property and distributed it to Bobby; (e) classified property valued at $489,525 as marital property and distributed it to Bobby; (f) classified property valued at $16,575 as marital property and distributed it to Judy; (g) found that "the parties have incurred a tax liability with the State and Federal Governments for back taxes and interest in the present amount of $111,059.70," ordered that Judy "shall be liable for one-half of said amount, together with one-half of any tax liability (including penalties) which may be assessed in the future as result of any tax liability arising from any state and federal taxes and sales taxes for [1984 through 1989], and Judy shall hold Bobby harmless for one-half of said indebtedness;" ordered that Bobby "shall be responsible for all other [income tax and sales tax] liabilities which may arise from taxes arising out of the years 1984 through 1991"; (h) credited Bobby with $55,529.85 as Judy's share of the tax liability mentioned in paragraph g, and credited Bobby with $14,863.59 for checks written by Judy; (i) ordered Bobby to pay Judy $158,319.06 in three installments, interest free, the last installment due on May 9, 1993. The amount of $158,319.06 was reached by awarding Judy $228,712.50 ¹ "to balance the equities of the parties" and deducting the credits mentioned in paragraph h; (j) required Judy to pay specified debts totaling $21,551 and to hold Bobby harmless therefrom; (k) required Bobby to pay all outstanding obligations incurred by Stephens Family Steak House and any loans incurred at the First National Bank of Salem and to hold Judy harmless therefrom; and (l ) denied Judy's request for an award of maintenance.

Judy appeals and challenges provisions (d), (h), and (l ). Judy contends that the trial court erred: (1) in classifying certain real estate as Bobby's nonmarital property; (2) in giving Bobby the credit of $55,529.85 mentioned in paragraph h; and (3) in failing to award Judy maintenance.

Judy's first point is that the trial court erred in classifying the land on which the Stephens Family Steak House is located as nonmarital property of Bobby because the title to the land was jointly held by Bobby and Judy and there was no evidence to rebut the presumption that the land was marital property.

In April 1984, Bobby and Judy opened a restaurant known as Stephens Family Steak House. The steak house was located on land which Bobby and his former wife Sharon purchased in 1976. Bobby divorced Sharon shortly before his marriage to Judy. At the time of Bobby's marriage to Judy, title to the land was held by Bobby and Sharon as tenants in common.

After Bobby married Judy, Judy opened a beauty shop in a building on the land and operated it until 1983, when she moved the beauty shop operation to a house at 405 Washington to which Judy held the title and where she and Bobby made their home. Using money borrowed from Judy's father, Bobby and Judy substantially remodeled the building on the land before using it for the steak house business.

On November 23, 1983, two warranty deeds were exchanged which effected a voluntary partition of the land between Bobby and Sharon. By one deed, Exhibit 47, Sharon conveyed to Bobby and Judy the portion of the land on which the steak house was located later. That portion is the land in issue. By the other deed, Bobby and Judy conveyed to Sharon the remaining portion of the land.

Bobby testified that he and Judy had an agreement about the ownership of the land in issue and the house at 405 Washington. Bobby testified:

Judy said she wanted her name put on my--put on my property. I'm talking about where the restaurant is now. It wasn't there yet. And I said, "Okay, if you'll put my name on the house." She said, "Okay." So we went down and signed some papers--This is when I and Sharon were getting--separating the property--and signed some papers. And I don't know if Judy's name got put over on actually where she actually owns or if her name has been put on the restaurant property for sure or not. She never would--She said it was down at Max Price's. She said that she had taken her deed down there, and they were supposed to be fixing up papers for me to sign so that my name would be put on the restaurant--or on the house. I don't know, maybe six, eight months passed and I asked her about it, and she said, well, Max yet had it, nothing had been done, or they had never called. And I don't know, probably I asked her four or five times over a period; and then toward the end of '88 or whatever it was, she said she was not going to put my name on it--on the house.

Judy testified that the decision to build the steak house was made in 1983, and it opened in 1984. She said: "Bobby asked me what it would take for me to go in business with him and I told him my name on the land because I wanted some security. Bobby said, 'That's fine.' The next day Bobby went down and put my name on the land."

Referring to Exhibit 47, she said she had no idea who prepared the deed and that "Bobby took care of that." She said, "Bobby put my name on all the land, that was part of my deal with him." She also testified that "the deal" did not involve Judy "putting Bobby's name" on the premises at 405 Washington.

The findings of fact made by the trial court included: Bobby owned an undivided one-half interest [in the land on which the steak house was located] at the time he was married to Judy and acquired the other one-half interest in exchange for his nonmarital property, said interest being acquired in property exchanges arising out of the dissolution of his marriage to Sharon. "[Judy and Bobby] renovated an old feed store on [the land] and opened a restaurant. Two additions have been made to the building. The value of the land, which is nonmarital property of Bobby, is $65,000. The value of the improvements to the land is marital property. The business known as Stephens Family Steak House is a busy and popular eating establishment in the city of Salem. It has value in excess of the tangible assets. The marital residence located at 405 Washington is the nonmarital property of Judy and has a value of $50,000."

Prior to the marriage of Bobby and Judy, title to the land in issue was held by Bobby and Sharon as tenants in common. After Bobby married Judy, Bobby and Sharon effected a voluntary partition of the land in issue and its other portion. At Bobby's instance, title to the land in issue was placed in Bobby and Judy as tenants by the entireties. Bobby and Judy gave differing versions on why that was done. With that background, it is necessary to examine the authorities which control the question of whether the land in issue became marital property or, as the trial court found, remained nonmarital property of Bobby.

In Cross v. Huffman, 280 Mo. 640, 217 S.W. 520, 522 (1919), the court said:

In this state it is the settled law that if the wife is a tenant in common, and there is a voluntary partition of the common estate, a deed, made to the husband and wife, as joint tenants or tenants by the entirety, conveys no estate to the husband, and invests the entire estate in the wife, even though the wife directed the deed to be made to her husband and herself jointly. This, for the reason that the wife really owned the title before the deed was made, and the only effect and purpose of the deed was to sever the possession of the property between the co-parceners. In such case, the land is the wife's by virtue of being a co-parcener, and not by virtue of the deed.

To similar effect see Powell v. Powell, 267 Mo. 117, 183 S.W. 625, 627 (1916); Shull v. Cummings, 174 Mo.App. 569, 161 S.W. 360, 361 (1913); Whitsett v. Wamack, 159 Mo. 14, 59 S.W. 961, 962-963 (1900).

In Powell, where the wife and a third person were tenants in common and effected a voluntary partition, the mere fact that the husband's name, at the direction of the wife, was included as a co-grantee with her in the deed of partition, was of no significance and the husband acquired no title. In Powell, 183 S.W. at 627 the court said:

The direction of the wife to have the deed thus made to the husband as well as to herself does not change the situation. The statute relating to married women would require such a direction to be in writing at least. But the better reason is that the deed conveys no title, and her direction to put his name therein does not change the character of deeds made in furtherance of voluntary partition. That her direction does not change the character of the deed has been expressly held in this state.

The foregoing cases ² antedate the enactment in 1973 of the Dissolution of Marriage Ac...