Welder v. Welder

• Decision Date: 24 May 1990
• Docket Number: No. 13-89-222-CV,13-89-222-CV
• Citation: 794 S.W.2d 420
• Parties: Katie S. WELDER, Appellant, v. Patrick H. WELDER, Jr., Appellee.
• Court: Texas Court of Appeals

Page 420

794 S.W.2d 420

Katie S. WELDER, Appellant, v. Patrick H. WELDER, Jr., Appellee.

No. 13-89-222-CV.

Court of Appeals of Texas,

Corpus Christi.

May 24, 1990.

Rehearing Overruled Aug. 31, 1990.

Pat Maloney, Sr., Gary D. Howard, Charles A. Nicholson, Richard Orsinger, San Antonio, for appellant.

John U. Hemmi, Kirk Patterson, Stewart, Hemmi & Pennypacker, San Antonio, for appellee.

Before KENNEDY, UTTER and SEERDEN, JJ.

OPINION

KENNEDY, Justice.

This is an appeal from the property division in a divorce case. Patrick and Katie Welder were married on January 2, 1956. The husband brought a number of inherited properties and royalty interests into the marriage. The primary source of income for the couple's living expenses over the term of the marriage were the husband's inherited royalty interests, which continue to provide $200,000 a month on average. The couple also generated income through their farming and ranching activities on the husband's inherited lands, as well as on other lands the couple bought during the term of the marriage. In the latter half of 1987, the couple ceased living together as husband and wife and the husband filed the present action for divorce on grounds of insupportability. After a jury trial, the court entered a decree of divorce, awarded each party their separate property, and divided the community estate between the parties. The wife brings seventeen points of error, primarily complaining of the trial court's award to the husband of various lands as his separate property. The husband brings one cross-point essentially supporting the court's award and requesting additional reimbursement for his expenditures of separate funds to retire the debt on community property. We reverse and remand the judgment of the trial court in part, and affirm the remainder.

By her tenth and eleventh points of error, appellant challenges the legal and factual sufficiency of the evidence to support the jury's finding that the husband owns a 53% interest in the Welder-Dobie Ranch as his separate property. By her fourteenth point, appellant challenges the legal and factual sufficiency of the evidence to establish the husband's separate property interest in the Adami, Bridge Street, Port O'Connor and Port Aransas properties. In considering a "no evidence", "insufficient evidence" or "against the great weight and preponderance of the evidence" point of error, we will follow the well-established test set forth in Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex.1986); Dyson v. Olin Corp., 692 S.W.2d 456 (Tex.1985); Glover v. Texas General Indemnity Co., 619 S.W.2d 400 (Tex.1981); Garza v. Alviar, 395 S.W.2d 821 (Tex.1965); Allied Finance Co. v. Garza, 626 S.W.2d 120 (Tex.App.--Corpus Christi 1981, writ ref'd n.r.e.); and Calvert, No Evidence and Insufficient Evidence Points of Error, 38 Texas L.Rev. 361 (1960).

Moreover, under Tex.Fam.Code Ann. § 5.02 (Vernon Supp.1990), property possessed by either spouse during or on dissolution of marriage is presumed to be community property, and the party claiming it as separate has the burden to overcome this presumption by clear and convincing evidence. Estate of Hanau v. Hanau, 730 S.W.2d 663, 667 (Tex.1987); Tarver v. Tarver, 394 S.W.2d 780, 783 (Tex.1965); Harris v. Harris, 765 S.W.2d 798, 802 (Tex.App.--Houston [14th Dist.] 1989, writ denied). To discharge this burden a spouse must trace and clearly identify the property claimed as separate. If separate property and community property have been so commingled as to defy resegregation and identification, the statutory presumption prevails. However, when separate property has not been commingled or its identity as such can be traced, the statutory presumption is dispelled. Hanau, 730 S.W.2d at 667; Tarver, 394 S.W.2d at 783; Harris, 765 S.W.2d at 802. As long as separate property can be definitely traced and identified, it remains separate property regardless of the fact that it may undergo mutations and changes. Norris v. Vaughan, 260 S.W.2d 676, 679 (Tex.1953).

Specifically, our courts have found no difficulty in following separate funds through bank accounts. Sibley v. Sibley, 286 S.W.2d 657, 659 (Tex.Civ.App.--Dallas 1955, writ dism'd). A showing that community and separate funds were deposited in the same account does not divest the separate funds of their identity and establish the entire amount as community when the separate funds may be traced and the trial court is able to determine accurately the interest of each party. Holloway v. Holloway, 671 S.W.2d 51, 60 (Tex.App.--Dallas 1983, writ dism'd); Harris v. Ventura, 582 S.W.2d 853, 855 (Tex.Civ.App.--Beaumont 1979, no writ). One dollar has the same value as another and under the law there can be no commingling by the mixing of dollars when the number owned by each claimant is known. Trawick v. Trawick, 671 S.W.2d 105, 110 (Tex.App.--El Paso 1984, no writ); Farrow v. Farrow, 238 S.W.2d 255, 257 (Tex.Civ.App.--Austin 1951, no writ).

In addition, when separate funds can be traced through a joint account to specific property purchased with those funds, without surmise or speculation about funds withdrawn from the account in the interim, then the property purchased is also separate. See McKinley v. McKinley, 496 S.W.2d 540, 543-44 (Tex.1973); DePuy v. DePuy, 483 S.W.2d 883, 887-88 (Tex.Civ.App.--Corpus Christi 1972, no writ).

In the present case, the basis on which husband claims the majority of the properties in dispute as his separate property is his tracing of the purchase price back to royalties generated from his inherited oil and gas interests. The initial question then is whether this royalty income was his separate property. The general rule is that royalties paid for oil and gas produced from the separate property of a spouse are payment for the extraction or waste of the separate estate, and therefore, remain that spouse's separate property. Norris v. Vaughan, 260 S.W.2d 676, 679 (Tex.1953).

If one spouse believes that the other has expended an unreasonable amount of community effort in managing these separate property interests, moveover, it is that spouse's burden to prove an expenditure of community effort sufficient to impress a community character upon the separate asset and to entitle the community estate to reimbursement. See Jensen v. Jensen, 665 S.W.2d 107, 110 (Tex.1984); Vallone v. Vallone, 644 S.W.2d 455, 458-59 (Tex.1982); Norris, 260 S.W.2d at 680. In the present case, the jury found that the community estate was due no reimbursement from the husband's separate estate for time, talent or labor expended by the husband. The royalty payments, therefore, remained the separate property of the husband.

We turn now to the tracing of this separate property interest to the various properties presently in dispute. Husband testified that he purchased the Welder-Dobie Ranch, and the Adami, Bridge Street, Port O'Connor and Port Aransas properties as his separate property with royalty income funds. In addition, both husband and Zafereo testified that all income from whatever source has consistently been deposited in the couple's joint account at First Victoria National Bank, and all expenses have been paid from that account, and that the royalty income from husband's separate estate averages $200,000 a month, while the community estate spends more money on living expenses and community business expenses than the community farming and ranching businesses can support. This explains the consistent abundance of the husband's separate funds, and the lack of community funds, in the joint account.

Accountant Howard's testimony, however, provides the primary evidence tracing the oil royalty payments through the joint account and to the purchase of the assets in dispute. Howard analyzed and summarized the couple's business records as will hereafter be discussed in points five and six. He treated all oil and gas royalty payments as separate property, and he applied the community-out-first presumption to expenditures from the account. Receipts from ranching and farming operations, interest income, and any other sources of income were treated as community. Specifically, Howard testified that the Welder-Dobie Ranch, and the Adami, Bridge Street, Port O'Conner, and Port Aransas properties are husband's separate property, having been purchased with funds in the joint account which can be traced entirely to husband's separate royalty income.

Appellant's own accountant Rishebarger, though he challenged Howard's overall tracing as unreliable considering the state of the couple's financial records, testified that he used Howard's initial tracing work in the preparation of wife's case, and that based on his own analysis of the community and separate funds in the joint account at the time the various properties were purchased, the $300,000 down payment on the Welder-Dobie Ranch was made from husband's separate funds, the Adami tract was 62% his separate property, the Bridge Street tract was 51% separate, the Port O'Connor tract was 53% separate, and the Port Aransas tract was 77% separate.

Finding lower percentages even than appellant's accountant conceded, the jury calculated husband's separate interest in the Adami tract at 53% and in the Port O'Connor tract at 50%. They agreed with Rishebarger that the husband owned 77% of the Port Aransas tract, and they only exceeded his percentages on the Bridge Street tract, which they found to be entirely the husband's separate property.

Based on tracing of separate funds as testified to by the accountants for both parties, we hold that there was legally and factually sufficient evidence for the factfinder to have determined accurately, without surmise or speculation, the interests allocated to husband in the Adami, Bridge Street, Port O'Connor and Port Aransas tracts. Appellant's fourteenth point of error is overruled.

With regard to appellant's tenth and eleventh points of error, as will hereafter be...