Chapter 1: The Texas Marital Property System
Marital Property System: governs ownership, management, liability, and disposition of all property possessed during and upon dissolution of a marriage
§3.001 Separate Property: A spouse’s separate property consists of: (a) The property owned or claimed by the spouse before marriage; (b) The property acquired by the spouse during marriage by gift, devise, or descent; (c) The recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.
§3.002 Community Property: Community Property consists of the property, other than separate property, acquired by either spouse during marriage.
§3.003 Community Property Presumption: (a) Property possessed by either spouse during or on dissolution of marriage is presumed to be community property. (b) This presumption can only be rebutted by clear and convincing proof that the property in question is separate property.
Characterize: to determine whether marital property was acquired at a time or in a manner which would deem it separate property of a spouse.
Why does it make a difference? Only community property can be divided by the judge in a divorce.
Community property presumption: always begin with this. The person claiming separate property must rebut this presumption by clear and convincing evidence.
Three characterizations of property: (1) Community property, (2) Husband’s separate property, (3) Wife’s separate property
Management of property: 5 categories (1) H separate that he manages (2) W separate that she manages (3) Community property that H solely manages (4) Community property that W solely manages, (5) Community property that is jointly management
The Constitution of 1876
1876 Constitution’s Definition of Separate Property: All property, both real and personal of the wife, owned or claimed by her before marriage, and acquired afterward by gift, devise, or descent, shall be her separate property, and laws shall be passed more clearly defining the rights of the wife, in relation as well to her separate property as that held in common with her husband. Laws shall also be passed providing for the registration of the wife’s separate property.
i. Limited to gift, inheritance, or before marriage property.
ii. You couldn’t agree that something would be separate property.
iii. You couldn’t agree to split something so half would be his and half would be hers
iv. Single most limiting aspect of the definition of separate property: gender. The constitution does not define separate of men. The man manages the property, but the woman owns it
DeBlane v. Hugh Lynch: Judgment against H alone. Judgment levied against cotton, which was produced by slaves and land that are separate property of W. Crops produced on separate property land is community property. An increase in value of land that is separate property is separate property.
i. The definition of separate property includes the increase of all lands or slaves thus acquired.
ii. “Increase” means the increase in value. So if her separate property was worth $100 at the time of marriage and upon divorce it was worth $1000, that $900 is separate property. But growing crops or collecting rent on that separate property is community property.
iii. Note: keep this case in mind. The character of the crops will not change as time goes on in the course of the law, but what will change is whether or not the crops can be used to satisfy H’s debt.
Doctrine of Ownerous Title: Whatever is acquired by the joint effort of the spouses is community property.
i. Test: Was is acquired by the labor of spouses? If yes—C/P. If no—S/P.
ii. This principle lies at the foundation of the whole system of community property.
iii. Texas courts have adhered strictly to the doctrine that dividends, interests, rent, and other income derived from separate property of a spouse comprise community property.
iv. But see §3.005 Gifts Between Spouses: If one spouse makes a gift of property to the other spouse, the gift is presumed to include all the income and property that may arise from that property.
Stringfellow v. Sorrells: Judgment against H executed against W’s separate property mules. Are the mules, which H cared for during the marriage, still separate property of W? Yes. Offspring of livestock that is separate property of the wife is community property. The livestock remains separate property, despite any increase in the weight or value of such livestock during the marriage.
i. Offspring are community property. Increase in value is separate property.
ii. Remember, at this point in time, H controlled and managed all property, even separate property of the W, but H’s creditors cannot get at W’s separate property.
iii. Under the Texas statutes, as interpreted by early decisions, the husband possessed sole management powers over all the marital property, including the separate property of the wife, except that the wife’s joinder was required in deeds conveying real estate which was homestead or which was separate property of the wife. The husband’s creditors could reach the husband’s separate property, and the communi
ii. It’s community property, the Legislature doesn’t try to change the character, they just exempt it from liability from spouse’s creditors.
1. Why can they exempt it from creditors, but not change the character? The constitution specifically said in the definition of separate property: “and laws shall be passed more clearly defining the right of the wife, in relation as well to her separate property as that held in common with her husband.”
iii. So Legislature cannot change the character of property, but they can change the rights of control and power.
Northern Texas Traction v. Hill: W was passenger in ex-H’s car, when it was hit. W was injured and sued for negligence, and amended the petition to join her new husband. She was suing D for recovery of her personal injuries. She thinks ex-H should be responsible since part of the accident was his fault. Are her damages C/P or S/P? All property or moneys received as compensation for personal injuries sustained by the wife shall be her separate property, except such actual and necessary expenses as may have accumulated against the husband for hospital fees, medical bills, and all other expenses incident to the collection of said compensation.
i. Everything a W collects for personal injury is her S/P, except for money used for hospital bills, medical bills, and other expenses incident to the collection of the damages.
ii. What’s wrong with this? It conflicts with the constitution.
iii. What’s the rule to use here? Rule of Implied Exclusion… personal injuries are not gift, devise, descent… so they must be possessed before marriage, or else the damages are community property.
iv. What effect does this being C/P have on the H? He has an interest in half the property. Also, his negligence will mean no recovery (rule was at this time was “all or nothing”). Contributory negligence would have barred her entire cause of action. If he had no interest in the recovery, his contributory negligence would not bar her cause of action.
Gorman v. Gause: Doctrine of implied exclusi