Kellett v. Trice

Certified questions from the Court of Civil Appeals for the Third District.

The certificate states that this was an action by appellee against appellant for a divorce and for the adjustment of their rights of property, and to set aside the deeds hereinafter stated. After the divorce was granted, the deeds were set aside and the questions certified arise in this branch of the case.

The circumstances under which the deeds were executed were that plaintiff and defendant had a disagreement, in which plaintiff was in fault. Defendant left home and remained away from December 9, 1896, until January, 24, 1897, when he returned and remained at home until after the suit for divorce was brought, May 21, 1898.

On the 22d day of January, 1897, plaintiff and defendant joined in the following deed to E. Rotan, trustee:

"The State of Texas, County of McLennan. — Know all men by these presents, that we, W.M. Kellett and Callie R. Kellett, husband and wife, in consideration of one dollar from each to the other paid, and for the purpose of divesting the separate estate and title of us and each of us in and to the property (hereinafter described) in which each of us shall hereafter own, hold, have and enjoy an equal undivided community interest, to the end that all of the same may stand and be as all other property now owned by us, viz., community property, regardless of in whose name the title thereto may stand, and thereby avoid any further necessity of keeping separate accounts of the increase thereof, of the income therefrom, of the expenses of improvements, repairs, insurance, and all other expenses thereon, and that all of the expenses and improvements thereon and on all other of our property may be paid and made from a common fund, and all increase, profit and income of every kind whatsoever from said property hereinafter described shall be and become after this date community property under the laws of the State of Texas, and for the further consideration and purpose of settling all questions now or which may hereafter arise between us, and avoiding any question hereafter between our respective heirs upon the death of either of us, and in consideration of five dollars to us in hand paid by E. Rotan, trustee, for the purposes herein named, have bargained, sold, assigned, transferred, and conveyed, and do by these presents bargain, sell, assign, transfer, and convey unto the said E. Rotan, trustee, the following described property situated in the city of Waco, county of McLennan and State of Texas, to wit. [The property described consists of several parcels of real estate and 238 shares of bank stock.]

"Together with all and singular the rights, members, hereditaments, and appurtenances to the same belonging or in anywise incident or appertaining. To have and to hold all and singular the premises and property above mentioned unto the said E. Rotan, his heirs and assigns forever, in trust, for the purpose of conveying the same to the said W.M. Kellett as the community property of the said W.M. Kellett and Callie R. Kellett, and we do hereby bind ourselves, our heirs, executors, and administrators to warrant and forever defend all and singular the said premises unto the said E. Rotan, trustee, his heirs and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof.

"Witness our hands this the 22d day of January, A.D. 1897.

"WM. M. KELLETT, "CALLIE R. KELLETT."

All of the real property and 130 shares of the stock described were the separate property of plaintiff. The other 108 shares of stock were community property.

This deed was freely and voluntarily executed by both parties, acting under advice of their respective attorneys, and was duly acknowledged by plaintiff as a married woman. The only purposes and considerations were those recited.

On the 23d day of January, 1897, Rotan executed and delivered the following instrument:

"The State of Texas, County of McLennan. — Know all men by these presents, that I,E. Rotan, trustee, of said county and State, for and in consideration of $10 to me in hand paid by Wm. M. Kellett, and in further consideration of and for the purpose of carrying into effect the object and purpose of the conveyance to me by said Wm. M. Kellett and his wife, Callie R. Kellett, dated January 22, 1897, of the hereinafter described property, and under and by virtue of the power to me in said conveyance given, and in obedience and compliance therewith, have bargained, sold, assigned, transferred, and conveyed, and by these presents do bargain, sell, assign, transfer, and convey unto the said Wm. M. Kellett the following described property situated in the city of Waco and county of McLennan and State of Texas, viz: [Here follows an accurate description of all the property conveyed.]

"All of which is and shall be the community property of said Wm. M. Kellett and his said wife, Callie R. Kellett, under the laws of the State of Texas, together with all and singular the rights, members, hereditaments, and appurtenances to the same belonging or in any wise incident or appertaining. To have and to hold all and singular the premises and property above mentioned unto the said Wm. M. Kellett as such community property, his heirs and assigns forever.

"Witness my hand, this January 23d 1897.

"E. ROTAN, Trustee."

The questions asked are as follows:

"1. Do the facts recited in the deed or contract executed by appellant and appellee to Rotan constitute a valuable consideration?

"2. Can the wife by conveyance in the manner indicated in the above deed, when joined by her husband in the manner required by statute, convert her separate estate into the community estate of herself and husband?

"3. Is a valuable consideration resulting to a wife necessary in order to support such a conveyance?"

On the side of the appellant it is asserted that the transaction was a lawful exercise of the wife's statutory power to convey her separate property, and that thereby her title was conveyed to her husband and made a part of the community estate. On the other side, it is urged that the instruments, although having the form of conveyances, could not legally operate as such, but disclosed merely an attempt by the agreement of husband and wife to convert that which the law made separate property of the latter into common property of the two. On a former appeal, the Court of Civil Appeals sustained the latter contention (Kellett v. Kellett, 23 Texas Civil Appeals, 571), and, after due consideration of the arguments of both parties and the authorities relied on, this court is of the opinion that the conclusion was correct.

It is settled by the decisions in this State that married women have no power, except such as is affirmatively given by statute to bind themselves personally by contracts. Wadkins v. Watson,86 Tex. 194; Kavanaugh v. Brown, 1 Tex. 481 [1 Tex. 481]. Among the powers so given is that of making conveyances of their separate property in the mode prescribed in the statute, when joined by their husbands. It is obvious, therefore, that an agreement by a married woman, attempting to convert her separate estate into community property, however executed, must be invalid, unless her act amounts to a conveyance such as is recognized by the law. While it may be true that a wife can not convey her separate property directly to her husband (Graham v. Stuve, 76 Tex. 533), it is nevertheless true that by their joint deed, properly acknowledged, the husband and wife may convey such property to a third person, and the grantee may convey it to the husband, either with or without consideration, although the sole purpose of the transaction is to cause the property to become that of the husband. Riley v. Wilson, 86 Tex. 240 [86 Tex. 240]. In virtue of her power of conveying, the wife, by pursuing the statutory mode, may mortgage her property to secure the debt of her husband or of a third party, the power to convey the absolute title being held to include the lesser power of mortgaging, and the mortgage being sustained as a species of conveyance.

It is also held that different methods of conveyance may be adopted and that husband and wife are not confined to deeds jointly signed by them. Thus, they may convey through the agency of an attorney in fact, empowered by their joint power of attorney duly executed and acknowledged (Patton v. King,26 Tex. 685); or the wife may be empowered by the husband to sign his name to the deed and the conveyance thus executed by her for both will pass title. Rogers v. Roberts, 13 Texas Civ. App. 190[13 Tex. Civ. App. 190]; 93 Tex. 649. These are but instances of different kinds of conveyances. In each of them, the separate title which the wife possesses, or an interest in it, passes to and vests in the grantee, and her act is therefore strictly within the power given to convey her property. On the other hand, the policy of the law protects the wife's property from liability for her husband's debts, and she can not make it subject to them by mere agreement not amounting to some kind of legal conveyance. Magee v. White,23 Tex. 180. Her property is protected also against alienations by her husband and she can not, by power of attorney or other mere agreement, enable him to divest her title. Cannon v. Boutwell, 53 Tex. 626.

The power to convey does not, therefore, enable her to contract generally with reference to her separate property, but only to dispose, in whole or in part, of her title; and the only operation which her conveyances have is to pass such title or some interest in it. Wadkins v. Watson, supra.

The effect of her conveyances, as well as those of others, is governed by the law applicable to the existing facts under which they are made; and the case therefore resolves itself into the inquiry, did the facts essential to make the property in question community property exist when the transaction took place; and, if not, could the husband and wife, by their mere volition, make it such in the manner attempted?

Property of husband and wife in this State gets its character, as belonging separately to one of them or in common to both, from the statutes defining their separate and community estates. Property which either of them owns before marriage and that which he or she acquires afterwards by gift, devise, or descent is his or her separate property. Property acquired by either after marriage otherwise than by gift, devise or descent is their common property. By construction, property which is acquired after marriage in exchange for separate property, or which is purchased with separate funds, is held to belong to that estate which furnished the consideration. Separate property of either spouse may be conveyed to the other in such way as to become his or her separate property, and community property may be so conveyed by the husband to the wife as to make it hers separately. This is true, not because the parties chose to name the property separate, but because the facts transpire to bring it within the statutory definition, and the law, operating upon such facts, vests title in accordance with them. The act of the parties is such as the law defines as necessary to create the separate right. Therefore, the question whether particular property is separate or community must depend upon the existence or nonexistence of the facts which, by the rules of law, give character to it, and not merely upon the stipulations of the parties that it shall belong to one class or the other. Thus, when one spouse passes to the other by gift his or her title to separate property, it could not become the community property of both, because the law declares that property so acquired shall be the separate property of the donee; and a gift by the husband to the wife of his interest in community property would become the separate property of the donee for the same reason. And so property acquired in the name of either spouse during marriage, otherwise than by gift, devise, or descent, or in exchange for separate property, would, by force of the statute, be community property. It is true that, in the acquisition or afterwards, the husband may give to the wife all his interest in the property and thus, by gift, make it hers; but at last this would be true only because the facts defined in the law exist and the separate right is derived through a gift, the husband having full power over the community estate.

If the deeds in question were without consideration and passed title to the husband, under these rules of law, they would vest in him a separate title to the land, because it is the wife's separate title that is attempted to be conveyed and the conveyance would be a gift. Yet the deeds in effect declare that they shall not have this but a different operation. The one power the wife had was to convey her title, and, by her conveyance, invest her grantee with the right conveyed. The power she tried to exercise was, by the form of a conveyance, to make a contract changing the legal character of the property. As we have seen, the power of conveying does not include the power to do any such thing. It has been held in several cases that husband and wife can not, by their mere agreements, alter the character given to property by the law acting upon the facts under which it is acquired. Cox v. Miller, 54 Tex. 27; Green v. Ferguson, 62 Tex. 529 [62 Tex. 529].

The admissions made in these cases that community property, in existence or as it comes into existence, may be made the separate property of the wife by gift from the husband, are thoroughly consistent with what we have said. The gift fulfills the requirements of the law under which the title of one is transferred to the other so as to become separate. Here the attempt of the wife is to make a gift without, at the same time, so conveying her title as to make the gift have its proper effect.

Recurring to the principles already stated, we see that, while a married woman, through the intervention of a trustee, may give or sell her property to her husband so as to make it his and, therefore, subject to his control and to his debts, and may also mortgage it to secure his debts, the power is withheld from her, while retaining, to empower him to alienate it, or to subject it to his debts. A more effectual method of defeating the last named restrictions could not be devised than that employed in this case, if it were upheld. All the mischiefs sought to be guarded against would at once flow from such a transaction, and this shows that the objections to it are not of a merely technical character. In our opinion, such transactions have no place in our laws regulating marital rights.

A statement of the effect of a real conveyance by the wife of her separate property, through the medium of a trustee, to her husband, such as has been upheld by this court, will serve to illustrate the difference between it and the transaction in question. By such a conveyance, the wife's title, or a part of it, to the whole or a part of the property would pass to and vest in the husband, and such interest as was conveyed would become his separate property. If only a part were conveyed, the remainder would continue to be her separate property, and would be protected from her husband's debts as well as from alienation by him. Here the wife, while she pretends to divest her whole separate title, does not convey it to her husband, but declares that the instrument shall only operate to make the property belong to the community estate, the effect of which would be to vest in her husband an interest and in herself an interest of a different character from that which she owned and pretended to convey, and to put the whole forever beyond her control and subject to that of the husband alone. This makes it apparent that this is not really a conveyance of her title such as she could make, but only an agreement by which a change in the character of such title is attempted, without the existence of the facts necessary, under the law, to effect the change.

The wife may hold the title to community property, legally acquired, as well as the husband. If, without consideration, she and her husband should execute such an instrument to a trustee upon the trust that he should reconvey the property to her, and should provide that it should thereby become community property, would it not be evident that the entire substance of such instruments would be the agreement to change the property from separate to community, and that in reality there would be no conveyance of her separate title? We instance a case in which there is no consideration because we do not wish to go beyond the facts of this case.

It is not necessary to hold that a married woman's separate property may not be so conveyed as to become, in law, community property. It may be that a purchase may be made of such property by the husband with community funds, so that the consideration will belong to the wife separately, and the property, taking its place, will belong to the community estate. If this is true, it is because the law and not the mere agreement, would give such effect to the transaction. No such case is presented here.

The deeds are without valuable consideration. The recitals of money paid are evidently merely formal and nominal (Lewis v. Simon, 72 Tex. 475); and, besides, according to the recitals, equal sums were paid to each party, so that the wife received no more than she paid. The other recitals merely give the reasons and purposes actuating the parties and show no benefit to the wife, or detriment, disadvantage, or inconvenience to the husband whatever. The transaction, if the instrument should have effect, would operate wholly to the benefit of the husband without pecuniary consideration received by the wife.

We conclude that the transaction did not change from separate to community the property mentioned in the deeds; and this, with what we have said, answers the questions asked.