Marital Property
Texas community property law is the basis of the class- probate cases when the death makes property relevant and or divorce issues.
3 Marital Property Estates:
1. Community property- most property acquired during the marriage
2. Separate property- has to fall into:
a. Before or
b. Gift, devise or descent
3.
Characterization of property is very important for what you name the property-Chapter 2
This is constitutionally driven- it determines and defines what constitutes what is separate and community property and limits that characterization- this is the presumption
It is rebutable to characterize it differently but the presumption is that it is community —
BOP on the party arguing it is separate.
Clear and convincing evidence is the standard
I. CHAPTER ONE: THE TEXAS MARITAL PROPERTY SYSTEM
Problem pg. 2- everything is presumed to be community property- so all the 500K and the corvette is community property.
Texas Constitution of 1876
Defines “Separate Property”- (only applies to the wife having separate property)
What does this mean? It is an exception because everything was presumed to be the man’s anyways and men could already had separate property if he wanted to
This changed the presumption that the wife could not have separate property
If it was owned by her before, or if during if b y gift, devise or descent
What was the purpose of this legislation- to recognize women as having separate property?
Rich men have daughter that they did not want given to the son-in-law
Kept and preserved property in the biological family
Legislators had daughters and wanted to do this
DeBlane v. Hugh Lynch & Co., 1859- These cases are all about creditor-debtor obligations when the debt husband was a judgment against the husband was not done and thus execute it against the wife’s separate property. This one was on 10 bails of cotton- if the husband here has no obligation in the property then they could not get any money from it and the creditor cannot get the judgment against it.
She argues the land and slaves working it were both her separate property
Legal basis was the “increase” of land based on the statute of 1848- saying all property of wife before property and “increase” of land or by slaves was an increase and separate property
So issue is what does “increase” mean? Cotton grown on land owned by separate property was in fact not defined but whatever it means it does not include crops growing out of land
i. Why was this the rule? The property becomes income- production of the land is income from the land or offspring of animals
ii. Anything from operation or usage- breeding, rent, income, royalty, production, etc..
Note 1: dividends, interest, rent etc. comprise community property but TEXAS consistently holds…income from property is COMMUNITY property whether it comes from separate or community property
2 Exceptions: §3.005 TXFC- inter-spousal gift are different/treated as separate but this says this income is not community- any gift
Doctrine of Ownerous Title- principle that any joint effort acquired by this is community property- this is not the law in Texas though.
Stringfellow v. Sorrells, 1891- husband obligation on debt and some kind of writ onto wife’s 2 mules claimed as her separate property.
How did she overcome the presumption that the mules were community- could argue his maintenance and efforts grew up and “increased” in value from $35-75 dollars.
Was this an increase?
i. No, the creditor cannot get the increase in value after marriage- $40
Rule- property is property and if it is still the same property any increase in value has nothing to do with increase or decrease in value, it is still the thing the property itself
i. Ex. stock increases in value by 1K but still own the same stock even if you do increase/decrease in value
ii. What if there were offspring? The production is community- income conflict
“The equitable criterion , if nay were admissible, in cases like the present, should be the expenses to the husband or the community, regarded as an investment of rearing the mules”
i. Without a community input there would be no ability for production or income- it is inequitable for the community to invest in the investment only to be separate property of the wife- like unjust enrichment to the wife
ii. Reimbursement is an equitable concept- operation of law to characterize the property when this has happened
Note 3-4: Concept of Management of Powers over property is different from characterization of property. Who manages the property is a completely a different issue.
Kellet v. Trice, 1902- no longer good law but the situation where wife was attempting to give her separate estate to that of the husband as community property for both. The court said there could be no conveyance to the community estate- legally impossible to convey separate into community- it would contractually change the character of the property and public policy prohibited this.
The same reasoning as legislatures allowed wife to have property- here it could negate that- to easy that husband coerce her to sign it over to them
Spouse can sell for separate consideration to the community and it would be alright but cannot do it by contract
Constitutional Amendments Changing the Law
1999- allows this to happen- change by K the character of the property but has to be pursuant to the statutory scheme, under §2.04-.06, really overruled Kellet v. Trice
Arnold v. Leonard, 1925- another debtor husband where creditor executed on real property which was separate of the wife- it was a community debt.
DeBlane- says any income from separate property was community property
Statute 1917- defining income from wife separate property as separate property (attempting to overrule DeBlane) but court says it violated the constitution
They did this by a Doctrine of Implied Exclusion- the constitution defines and specifies something the legislature is powerless to add to or subtract from this definition. Here they could not add this way to that already set forth by the constitution
Statute 1913- discussing that neither the separate property of the wife or rents wherefrom can be subject to the debts of the husband- rents and revenues would be treated as community under the rule though-
i. This one was invalid even though it does the same thing- it does not change the characterization- rents and revenues not her separate property but the 1917 says it is still community property but
ii. Says any such community property IS NOT subject to debts contracted by the husband
iii. So just puts a provision for debts into the statute- therefore it is alright because it does not purport to change the character
Statute 1917 did indirectly what the legislature was prohibited from doing by the constitution
By allowing the wife subject to her control as separate property- isn’t that equivalent to making it separate property- one and the same
Here, though unless the debt scenario occurs, it is still community property for all other purposes
This is still good and citable law
Note 2: in Kellet the court held the parties could not contractually change the characterization and here in Arnold neither can the legislature change the characterization
i. Would the DeBlane cotton have come out differently? Probably as rents or revenues from her separate property and not subject to her husband’s debts
Northern Texas Traction v. Hill, 1927- Statute 1925 defined separate property saying all compensation for personal injuries, except those medical and other bills, etc. paid for by the husband, are separate property
This will be changed in the Franco case- all is considered separate property
Community property was completely managed by the husband and all rights in regards to it
Constitutional Amendment in 1948
Separate and Community Property of Husband and Wife- (still implied that the husband is presumed to be able to be able to have separate property not mentioned in a statute- this did not change at all) “may have community provided that unless have it divided into seperate interest of the other spouse”
Allows the contractual change of the characterization of property: only what was community into separate by
partition or
exchange
ex. Greenacre and Whiteacre was community property- it could be partitioned that both would be ½ separate property of each or exchange by trading Green for White
Note 3: How are creditors protected? All they would have to do if going into partition or exchange that they would be prejudiced- now have to prove fraud the pre-existing creditor
So at this point you cannot go from separate to community but can go other way (up until later statutes)
Williams v. McKnight, 1966- no longer applicable but here the husband and wife transferred community funds into 3 separate accounts as cotenants and ROS- Here the husband died and wife got all the property but the executor claimed ½ all wa
o show that it is separate and not community
a. § 3.001(1)- property owned before marriage is separate property
b. What about when the property is acquired when done prior to marriage but ended after marriage so it straddles the marriage date, when was it really acquired?
2. Welder v. Lambert, 1898- H/W in 1820’s-30’s when TX not part of US up until part in 1836 when property was acquired for grant to colonization under a Spanish land grant. Government enters into K for person to bring people over to settle onto land. Power was one of the guys who did this in 1828 with another guy. He started making things happen and granted the land in 1834, six years later so got the title to the land. In between he got married to wife 1 in 1832. Two children were borne to the marriage and became appellants to the case. 1836 Wife 1 dies and he marries wife 2 in 183 and there were 5 children to that marriage who were the appellees. He dies in 1852 and in 1893 wife 2 dies and case brought up.
Appellants agued land community property between wife 1 and dad- they would have inherited her ½ interest when she died. They would get all of wife 1’s interest=1/2. (7/14’s). Then when Dade dies they get part of his share (1/2) split between all 7 children so (4/14’’s). So that is a total of 9/14’s.
Appellees argue it was separate and those kids only get 4/14’s.
a. This case did not have the presumption because so old – but now there is one and should always start as such – so here the appellees have the BOP to prove separate property
b. The court focuses on K steps first: the court says the nature of his rights remain separate when were the separate attempts of his at first- if he does this stuff he gets this thing when he gets the contract…..obligation to do thing is rewarded when he completes it by getting the land—the contract has its obligations and benefits on its own.
c. So character of rights when acquired prior to marriage were still the separate property of husband only.
d. Then court moves over to the character of the land –was land acquired in 1834 when got title or when got K which gave him right to get land in 1828?
a. When title passed- community
b. When K entered into which gave him right to acquire land- separate
e. They analyzed a number of cases: including Mills v. Brown but generally the court says the approach to take under Texas law for when to treat property as being acquired?
Rule of law of when property is acquired in Texas: When you acquire rights to acquire property (like K to get land)- initial rights to acquire property then you treat it as the time when acquired the property. Treat property as when right to acquire it was taken.
Does this mean any rights are enough? Look to Mills v. Brown
Mills v. Brown- wife while single surveyed and paid for interest in land. Then married and moved into house as homestead. Homestead rights currently allow you to claim rights from your principal place of residence then it is exempt from debts being claimed on it. This case is talking about a different aspect of homestead where open land stake out claim, survey it, make a claim and move onto it- then it was your land.
What point did the court say the title to the land was the wife’s property? When she moved onto the land- at that point in time you have all rights to the land. So under this land there was no absolute right until the step of moving onto the land was completed (superior right to land which another cannot divest)- so they jointly moved and at that point was community property Now, under Welder, title incepted when signed contract—where
