Powell v. Powell

822 S.W.2d 181, 1991 Tex. App. LEXIS 3004, 1991 WL 255415

• Court: Court of Appeals of Texas
• Decided: December 5, 1991
• Docket: 01-89-00341-CV
• Status: Published

Opinions

OPINION

COHEN, Justice.

Robert W. Powell (Bob) and Jo Lynn Powell (Jo) were married in 1986, separated in 1987, and divorced in 1989. Bob appeals from the divorce judgment, attacking the legal and factual sufficiency of the court’s findings pertinent to the property division. We must decide whether the trial court abused its discretion in dividing the property. Vallone v. Vallone, 644 S.W.2d 455, 460 (Tex.1982).

In his first point of error, Bob contends the evidence is legally and factually insufficient to support the court’s findings that 1000 shares of corporate stock are Jo’s separate property that she acquired by gift from Bob.

There is a presumption that all property possessed by either spouse during, or on dissolution of, marriage is community property. Tex.Fam. Code Ann. § 5.02 (Vernon Supp.1991). This presumption can be overcome by “clear and convincing evidence” that a specific asset is separate property. Id. All property acquired during marriage by gift is the separate property of that spouse. Tex.Const. art. XVI, § 15; Tex.Fam. Code Ann. § 5.01(a) (Vernon 1975).

A gift is a transfer of property made voluntarily and gratuitously. Hilley v. Hilley, 161 Tex. 569, 576, 342 S.W.2d 565, 569 (1961). A gift requires: (1) an intent to make a gift, (2) delivery of the property, and (3) acceptance of the property. See Grimsley v. Grimsley, 632 S.W.2d 174, 177 (Tex.App.-Corpus Christi 1982, no writ). The burden of proving a gift is on the party claiming the gift. See Woodworth v. Cortez, 660 S.W.2d 561, 564 (Tex.App.—San Antonio 1983, writ ref'd n.r.e.); Diaz v. Cantu, 586 S.W.2d 576, 580 (Tex.Civ.App.—Corpus Christi 1979, writ ref’d n.r.e.). A trial court has no authority to divest a spouse’s interest in separate property, even though the interest is small. Whorrall v. Whorrall, 691 S.W.2d 32, 37 (Tex.App.-Austin 1985, writ dism’d w.o.j.); Cameron v. Cameron, 641 S.W.2d 210, 213 (Tex.1982) (a divestiture of separate property is unconstitutional).

Robert W. Powell & Associates, Inc. (“the company”) was incorporated by Bob in 1979, before this marriage and before a previous marriage. The present divorce decree provides that all shares of stock in the company in Bob’s name is Bob’s separate property. The decree also states that Jo separately owned 1,000 shares of stock in the company, because Bob gave them to her during the marriage. Bob claims he merely “transferred” his stock to Jo for convenience, without conveying ownership.

There is ample evidence the stock was a gift to Jo and was thus her separate prop-

erty. Bob transferred 500 shares of stock to Jo early in 1986, shortly after the marriage. Bob’s secretary, Sallye Tucker, testified Bob intended to give these shares to Jo as a wedding present, without conditions. Bob transferred an additional 500 shares of stock to Jo in December 1986 by endorsing the shares in the presence of Sallye Tucker. Jo paid nothing for the stock. Bob contends he did not intend to give the stock to Jo on either occasion — the first 500 shares were “transferred” shortly after the wedding in order to promote the new marriage; the second 500 shares were temporarily transferred as a conditional gift to protect them from a former wife, who was a judgment creditor. However, there was no evidence that Bob tried to rescind the second gift after the disputes with his creditors were resolved. Bob did not ask Jo to return the stock until he commenced divorce proceedings. The share certificate conveying the second 500 shares is signed by Bob, and it “sells, assigns, and transfers unto Jo Lynn Powell” the shares without any conditions stated. Although Bob claims he expected Jo to return the shares after he disposed of his creditors, there was no evidence Jo agreed to that. The trial judge was not required to believe Bob’s self-serving testimony regarding his intentions, especially when such testimony was not supported by the written documentation on the share certificate. The testimony of Jo and Sallye Tucker, plus Jo’s possession of stock certificates in her name, signed and delivered to her by Bob, supports the finding. The finding of a gift is not against the great weight and preponderance of the evidence. See Vallone, 644 S.W.2d at 460.

Point of error one is overruled.

In point of error two, Bob attacks the trial court’s order that he purchase Jo’s 1000 separate property shares in the company by paying her its value, $16,000, in 11 monthly installments, due after the judgment of divorce. Bob complains that the order requires him to pay for Jo’s separate property, and thus, it divests both spouses of separate property. We agree.

A trial court enjoys broad discretion in dividing the estate of the parties. Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 141 (Tex.1977); Tex.Fam. Code Ann. § 3.63 (Vernon Supp.1991). A trial court, however, may not divest the title of a spouse’s separate real property, Eggemeyer, 554 S.W.2d at 141-42, and cannot award the separate personal property of one spouse to the other. Cameron, 641 S.W.2d at 220. Separate property interests of one spouse cannot be awarded to the other spouse, even though the interest is minimal and its retention by the spouse owning it might result in an economically impractical coten-ancy between the spouses. Whorrall, 691 S.W.2d at 36-37. Here, the court’s decree awarded Jo’s separate property (1,000 shares of company stock) to Bob and required him to pay for it after the divorce with $16,000 that would then be Bob’s separate property. This differs from Vallone, 644 S.W.2d at 460, where the court affirmed an award requiring one spouse to buy the other’s stock, based on the existence of a community interest in the corporation. Bob was harmed because this order would divest him of separate property ($16,000) after the marriage.

We sustain point of error two because the court had no power to divest Jo of her separate property or to require Bob to buy it with his separate property after the marriage. The judgment is reformed to delete the provisions divesting Jo of her stock and requiring Bob to purchase it for $16,000.

In view of our disposition, we need not consider the third and fourth points of error complaining of the court’s stock valuation.

In his fifth point of error, Bob claims that the trial court erred in awarding Jo attorney’s fees. Bob complains that the court improperly awarded Jo $6,369 in attorney’s fees because a divorce court can grant attorney’s fees only for disputes over community property. Bob argues there was no community property, but only separate property, before the court. See Chiles v. Chiles, 779 S.W.2d 127, 129 (Tex.App.-Houston [14th Dist.] 1989, writ denied).

A trial court may award attorney’s fees arising out of a “just and right” division of a community estate. Murff v. Murff, 615 S.W.2d 696, 699 (Tex.1981). We do not need to reach the issue presented in Chiles because there was community property before the court in this divorce, though it was less valuable than the separate property. Both sides claimed a right to reimbursement, which Bob treated as a $5689 community asset, and Bob’s inventory lists “nominal” household community property furnishings, plus $36,048 in community debt. Rings acquired during the marriage were appraised at $7,000, and Bob bought $3000 of furniture after the separation, but during the marriage. Both the rings and the furniture are presumed to be community property. The existence of community property provides sufficient authority for a trial court to award attorney’s fees for the division of property. Id. Thus, the court did not abuse its discretion by awarding attorney’s fees.

Point of error five is overruled.

Bob complains in point of error six that the court erroneously required him to reimburse Jo $8079 for an unspecified debt she incurred, and in point of error seven, that the court erroneously required him to pay $6000 for a debt she incurred to her parents. Bob claims there is insufficient evidence to prove the debts were community. The record does not disclose the nature of the $8079 debt. The $6000 debt was incurred by Jo during the marriage for car payments and other living expenses.

Regarding the $8079 debt, the presumption of community liability during marriage required Bob to prove that the debt was incurred by Jo separately. Wierzchula v. Wierzchula, 623 S.W.2d 730, 732 (Tex.Civ.App.-Houston [1st Dist.] 1981, no writ). He did not do so. Thus, the debt was presumptively community. Id. Regarding the $6,000 debt, Jo testified that she incurred the liability during the marriage for necessities. Such a debt is a presumed community liability. Id. Thus, there is both evidence and a legal presumption to support the court’s finding that the $6,000 debt was community.

Points of error six and seven are overruled.

Bob complains in points of error eight and nine that the court wrongfully placed judgment liens on his stock in several corporations and wrongfully enjoined him from diluting the stock issued by his corporations. Bob contends his cash super-sedeas deposit of $33,492.80 satisfied Jo’s judgment and made such relief unnecessary. We agree.

The liens were awarded “to secure the judgments herein awarded.” The injunction prohibited Bob and others from “diluting the shares of stock presently issued and outstanding in any of the (named) corporations that would have the effect of diminishing the lien interest against the same granted to Jo Lynn Powell herein-above....” The liens and the injunction are unnecessary in view of the cash super-sedeas deposit, the sufficiency of which has not been challenged by Jo. Moreover, our decision to sustain the second point of error reduces Bob’s liability secured by the deposit by almost one-half. Under these circumstances, the liens and the injunction cannot be justified. Our holding makes moot any attack on the legality of the liens at their inception.

Points of error eight and nine are sustained.

In his tenth point of error, Bob complains the trial court erred in awarding Jo a grandfather clock that was his separate property. Trial courts have wide authority in determining a division of property, and there is a presumption in favor of their discretion. Bell v. Bell, 513 S.W.2d 20, 22 (Tex.1974). Bob claims the clock was a gift from Jo and thus is his separate property. Jo admitted she gave the clock to Bob, but testified he accepted it “under false pretenses.” The only false pretense she described was that Bob “broke the commitment to the marriage” by filing for divorce. Thus, she contends the clock was a “conditional gift” and the condition, continuation of the marriage, failed. She cites no authority supporting a spouse’s right to reclaim a gift under these conditions, and she cites no evidence she told Bob of this condition and he agreed to it. We conclude the grandfather clock is Bob’s separate property as a result of the gift from Jo.

Point of error 10 is sustained.

In his eleventh point of error, Bob argues the trial court erred in releasing Jo from liability for a $10,000 loan from Robert W. Powell & Associates, Inc., to Retirement Unlimited, Inc. because the order “affects the rights of entities not made a party to this action,” was unsupported by evidence, and was an abuse of discretion. Bob cites no part of the record where this complaint was presented to the trial court and no decision holding such a provision improper as part of a division of property. We are in no position to rule on the rights of Robert W. Powell & Associates, Inc., which was not a party to this case, although Bob, as its controlling shareholder, could have caused it to intervene. Even if we assume Bob has standing to assert rights on behalf of the absent corporation, it would be mere speculation to assume its rights were affected. There is no evidence of any note signed by Jo or on her behalf. Bob’s brief cites only Bob’s vague testimony to prove any loan existed, and the judgment refers to it as “the alleged loan.” The trial court could have concluded there was no loan or no evidence that Jo was a debtor. There was no abuse of discretion.

Point of error 11 is overruled.

Bob’s final point of error is a general attack on the judgment. He argues that there was no community property to divide, that he was divested of separate property, and that the award is tantamount to alimony. We have resolved these contentions by our rulings above.

The twelfth point of error is overruled.

Bob’s second point of error is sustained; that part of the judgment divesting Jo Powell of her shares of Robert W. Powell & Associates, Inc. stock, and ordering Bob Powell to purchase these shares is reversed, and such language is deleted (item “1” under “i” on pages 8-9 of the judgment). Points eight and nine are sustained, and we order deletion of language creating the liens and the injunction, as follows: 1) item “4” on pages 9-10 of the judgment; and 2) item “B” on pages 16-17 of the judgment. Point of error ten is sustained and the judgment is reformed to show the grandfather clock is awarded to Bob as his separate property.

Jo has not urged any conditional cross-points of error or requested a remand in the event we sustain any of Bob’s points of error. Consequently, we affirm the judgment, as reformed.

DUNN, J., concurs and dissents.

Justice WARREN was a panel member when this case was argued. He died before this opinion issued. He was replaced by Justice WILSON, per order of THE CHIEF JUSTICE.