Sue Akers CAMERON, Petitioner, v. Paul Archibald CAMERON, Respondent.
No. C-8.
Supreme Court of Texas.
Oct. 13, 1982.
Rehearing Denied Nov. 17, 1982.
641 S.W.2d 210
Contrary to the Co-op‘s first three points of error,6 there is no reversible error in the appellate court‘s holding that the Co-op‘s failure to make a threshold pleading of its defenses to the charge of usury barred any subsequent assertion of the defenses to avoid Art. 5069-1.06(2) penalties. Though the statute is written in a disjunctive paragraph form, it is to be viewed as stating only one cause of action for usury. This unitary construction of Art. 5069-1.06 is consistent with our prior interpretations of the statute for purposes of determining the general application of the “accidental and bona fide error” defense to also rebut liability for the penalty provisions of subsеction (2) even though the defense is stated only in subsection (1). See Tyra v. Bob Carroll Construction Company, 639 S.W.2d 690 (Tex. 1982); compare Windhorst v. Adcock Pipe and Supply, 547 S.W.2d 260, 261 (Tex. 1977).
There is a logical corollary implicit in these holdings that the accidental and bona fide error defense, as well as any other defense to the charge of usury, must be generally pleaded to the issue of usury. This is a threshold requirement to escape any of the penalty sanctions contained in the statute. The fact that Art. 5069-1.06 contains varying degrees of penalty provisions staircased in subsections (1) and (2) does not create two separate causes of action for which independent defenses are to be had. The imposition of the penalties is occasioned by the finding that there was a usurious practice. The degree of penalization as explained supra at n. 6 is solely a matter of the severity of the violation. If the trial court finds that there was usury in excess of double the allowable interest rate, it must impose subsection (2) penalties as well as subsection (1) penalties. The Court of Appeals’ award of principal to Bendele and its negation of the debt of principal duе in the instant case was a correct application of Art. 5069-1.06.
Point Five of Co-op‘s application argues that the Court of Appeals erred by awarding Bendele the dollar amount of his debt ($7,308.06) due the Co-op as a penalty in addition to the cancellation of the debt. As Bendele concedes, this was in effect a double forfeiture award not contemplated by the statute. We agree.
Petitioner Co-op‘s application for writ of error is granted and summarily disposed of without oral argument pursuant to
Charles R. Cunningham, Corpus Christi, for respondent.
POPE, Justice.
The questions presented concern the trial court‘s division of military retirement pay and United States Savings Bonds between divorcing spouses in Texas. The property wаs acquired in states that do not have a community property system. The trial court awarded the wife thirty-five percent of the gross military retirement funds received in the future by the divorced husband and fifty percent of the United States Savings Bonds. Considerable other property was divided about which there is no dispute. The court of civil appeals reversed the judgment in part and held that the retirement pay and savings bonds, acquired by the spouses in a common law property state, were the husband‘s separate property and, thus, not subject to division. 608 S.W.2d 748. We reverse the judgment of the court of civil appeals with respect to the military retirement pay; we reverse the judgment of the court of civil appeals and affirm the trial court‘s judgment dividing the savings bonds.
Paul Cameron joined the United States Air Force on June 22, 1954. While in the military, Paul married Sue Akers in Midland, Texas, on September 29, 1957, and the couple immediately moved to California. The Camerons remained in California, a community property state, for only three months. During the balance of Mr. Cameron‘s military service, the two lived in Arkansas, Indiana, Maryland, Nеbraska, Ohio and Oklahoma, all of which observe the common law property system. The Camerons’ move to Texas in August 1977 coincided with Paul‘s retirement from the Air Force. At the time the divorce suit was filed in 1978, both spouses lived in Texas.
I. THE MILITARY RETIREMENT PAY
In awarding a fraction of Paul Cameron‘s military retirement pay to his wife, the trial court followed a number of Texas decisions approving such a division upon divorce. Taggart v. Taggart, 552 S.W.2d 422 (Tex. 1977); Cearley v. Cearley, 544 S.W.2d 661 (Tex. 1976); Busby v. Busby, 457 S.W.2d 551 (Tex. 1970); Herring v. Blakeley, 385 S.W.2d 843 (Tex. 1965). While this cause was on appeal, the United States Supreme Court held that the supremacy clause of the United States Constitution, article VI, precludes a state court from dividing military nondisability retirement pay on divorce. McCarty v. McCarty, 453 U.S. 210 (1981). In the wake of McCarty, we held that the supremacy clause effectively foreclosed the division of military retirement benefits under Texas community property laws. Trahan v. Trahan, 626 S.W.2d 485, 487 (Tex. 1981); see also In re Marriage of Jacanin, 124 Cal.App.3d 67, 177 Cal.Rptr. 86, 87-88 (Ct.App. 1981); Dedon v. Dedon, 404 So.2d 904, 905 (La. 1981); Hill v. Hill, 291 Md. 615, 436 A.2d 67, 70 (1981).
Mrs. Cameron urged that we should remand the cause to afford the trial court an opportunity to increase her award from the community property as a means of offsetting her loss of thirty-five percent of the future retirement pay. The United States Supreme Court had also closed the door to that remedy. McCarty, 453 U.S. at 228-29 n. 22; see also Hisquierdo v. Hisquierdo, 439 U.S. 572, 588 (1979).
On September 9, 1982, the Prеsident signed into law the Uniformed Services Former Spouses’ Protection Act, Pub.L. No. 97-252, 96 Stat. 730 (1982). The purpose of the act was to reverse the effect of the McCarty decision. Under the act, a divorce
Paul Cameron served in the military for more than nineteen years of his twenty-one and a half year marriage to Sue Cameron. Under the act, Sue Cameron is entitled to receive a portion of Paul Cameron‘s retirement pay. The divorce decree, dated March 29, 1979, awards Sue Cameron “thirty-five percent (35%) of the gross present and future Military Retirement presently being received.” Sue Cameron is entitled to recover that thirty-five percent, but not for the period from March 29, 1979 to June 25, 1981. Therefore, we affirm that part of the trial court judgment awarding Sue Cameron thirty-five percent of the military retirement pay, but only for the period beginning after June 25, 1981.
II. THE U.S. SAVINGS BONDS
The court of civil appeals characterized the funds earned by Mr. Cameron in common law jurisdictions as his separate property and, through tracing principles, decided the bonds acquired with the common law funds belonged in his separate, Texas estate. As a part of Mr. Cameron‘s separate estate, the bonds, according to the court of civil appeals, could not be divested by the trial court. Sue Cameron seeks to uphold the trial court‘s disposition of the bonds by arguing that we should overrule our decision in Eggemeyer v. Eggemeyer, 554 S.W.2d 137 (Tex. 1977), or, alternatively, treat separate personalty differently than separate realty. Although we view the nature of the savings bonds acquired in common law jurisdictions in a different light than the court of civil appeals, we first address these arguments advanced by Mrs. Cameron.
A. Eggemeyer Correctly States the Law
Since the early days of the Republic of Texas, Texas has carefully drawn a line between the separate and community property of spouses in an attempt to preserve the distinctions between and the integrity of the two classes of property. Any judicial divestiture of separate property would essentially disregard the constitutionally mandated distinction. At timеs pertinent to this action, the Texas Constitution has provided:
All property, both real and personal, of the wife, owned or claimed by her before marriage, and that acquired afterward by gift, devise or descent, shall be the separate property of the wife . . . .
In addition to this constitutional reason for disallowing the divestiture of separate property on divorce, the statutory construction of section 3.63,
The phrase “estate of the parties” has been carried forward in Texas divorce laws and now appears in
Section 3.63(a), moreover, authorizes a “division” of the parties’ estate, but provides no authority for a court to “divest” a divorcing spouse‘s separate property. Castleberry, Constitutional Limitations on the Division of Property Upon Divorce, 10 St. Mary‘s L.J. 37, 48-55 (1978). As early as in the 1841 divorce statute discussed above, the Texas Congress drew a distinction between allowing courts to “order a division of the estate of the parties” while at the same time forbidding them “to compel either party to divest him or herself of the title to real estate or slaves.” 1841 Laws of the Republic of Texas, An Act Concerning Divorce and Alimony § 4, at 20, 2 H. Gammel, Laws of Texas 484 (1898) (emphasis added). The 1981 amendment to
Under our laws, permanent alimony is not recognized, nor is a Texas court authorized to divest either spouse of his or her title to separate property, Hailey v. Hailey, Tex.Sup., 331 S.W.2d 299, but the wife, in the main, must look to the community property for her share of the material gains incident to an ill-starred marriage.
Id. at 193, 345 S.W.2d at 724 (emphasis added). Thus, the terminology utilized first by the Texas Congress and carried forward to the present day by the Texas Legislature reinforces our decision that separate property is not subject to divestiture by courts on divorce.
It is also suggested that separate property may be divested and granted to the non-owning spouse as an exercise of the police power. The Texas Legislature, however, has not seen fit to еxercise this power in favor of divestiture of spouses’ separate property on divorce. Presently, section 3.63(a) of the Family Code is silent on the courts’ power to take one spouse‘s property and give it to the other on divorce. In comparison, the California statute concerning the disposition of property on divorce,
The jurisdiction of the court with respect to property in a divorce action is found in section 137 et seq. of the Civil Code. As a general rule and subject to certain exceptions not material here, the power of the court is limited to a disposition of the community property and a court is without power to pass upon a dispute as to separate property or the disposition of the same.
Roy v. Roy, 29 Cal.App.2d 596, 85 P.2d 223 (Dist.Ct.App. 1938); accord, Machado v. Machado, 58 Cal.2d 501, 375 P.2d 55, 58 (1962); Fox v. Fox, 18 Cal.2d 645, 117 P.2d 325, 326 (1941); Simpson v. Simpson, 80 Cal. 237, 22 P. 167, 168 (1889). As recently as 1981 whеn the Texas Legislature considered and substantially amended
Texas property law contains a rich tradition of respect for the constitutional,
As we look beyond the boundaries of Texas, we find our holding in Eggemeyer that separate property may not be divested puts Texas in conformity with the law in six of the seven other community property states. In Arizona, “The court in pronouncing the decree of divorce had no authority to compel either party to divest himself or herself of the title to separate property.” Wiltbank v. Wiltbank, 18 Ariz. 435, 162 P. 60, 61 (1917); see also Collier v. Collier, 73 Ariz. 405, 242 P.2d 537 (1952); Armstrong v. Armstrong, 71 Ariz. 275, 226 P.2d 168 (1951); Schwartz v. Schwartz, 52 Ariz. 105, 79 P.2d 501 (1938); Brown v. Brown, 38 Ariz. 459, 300 P. 1007 (1931); Warren v. Warren, 2 Ariz.App. 206, 407 P.2d 395 (1966).
In California, the court may not assign the separate property of one spouse to the other, nor require one to pay the other any amount in lieu of an assignment or divestiture. Fox v. Fox, 18 Cal.2d 645, 117 P.2d 325 (1941). “[T]he power of the court to dispose of the property of the parties to a divorce action is limited to their community property. It is the general rule that the court has no jurisdiction to assign separate property of one spouse to the other . . . .” Mitchell v. Marklund, 238 Cal.App.2d 398, 47 Cal.Rptr. 756 (Ct.App. 1965); accord Reid v. Reid, 112 Cal. 274, 44 P. 564 (1896); Davis v. Davis, 222 Cal.App.2d 691, 35 Cal.Rptr. 281 (Ct.App. 1963); Thomasset v. Thomasset, 122 Cal.App.2d 116, 264 P.2d 626 (Dist.Ct. App. 1954); Barba v. Barba, 103 Cal.App.2d 395, 229 P.2d 465 (Dist.Ct.App. 1951); Robinson v. Robinson, 65 Cal.App.2d 118, 150 P.2d 7 (Dist.Ct.App. 1944). The California rule may be summed up: “As a general rule and subject to certain exceptions not material here, the power of the court is limited to a disposition of the community property and a court is without power to pass on a dispute as to separate property or the disposition of the same.” Roy v. Roy, 29 Cal.App.2d 596, 85 P.2d 223 (Dist.Ct.App. 1938); see also Machado v. Machado, 58 Cal.2d 501, 375 P.2d 55 (1962); McKannay v. McKannay, 68 Cal.App. 701, 230 P. 214 (Dist.Ct. App. 1924). In California, even the community property must be divided in equal parts rather than, as in Texas, fairly and equitably.
The Idaho Supreme Court, interpreting that state‘s divorce laws, stated, “The court has the power to divide the community property between the parties, but has no power or authority to award the wife‘s separate property, or any of it, to the husband.” Radermacher v. Radermacher, 61 Idaho 261, 100 P.2d 955 (1940); see also Simplot v. Simplot, 95 Idaho 239, 526 P.2d 844 (1974).
Nevada courts cannot divest separate property and award it to a spouse in fulfillment of the statutory power to make an equitable disposition of the marital property. Stojanovich v. Stojanovich, 86 Nev. 789, 476 P.2d 950 (1970); Jacobs v. Jacobs, 83 Nev. 73, 422 P.2d 1005 (1967); Thorne v. Thorne, 74 Nev. 211, 326 P.2d 729 (1958).
The New Mexico law regarding divestiture of title parallels that of Nevada. Ridgway v. Ridgway, 94 N.M. 345, 610 P.2d 749 (1980). Louisiana also maintains a distinction on divorce between a couple‘s community and separate estates. See generally Curtis v. Curtis, 403 So.2d 56 (La. 1981); Lane v. Lane, 375 So.2d 660 (La.Ct.App. 1978), writ denied, 381 So.2d 1222 (La. 1980);
The State of Washington is the only community property jurisdiction that holds contrary to Eggemeyer and the rule in all other community property states. Even so, Washington permits divestiture only in exceptional circumstances. Morris v. Morris, 69 Wash.2d 506, 419 P.2d 129 (1966); Browning v. Browning, 46 Wash.2d 538, 283 P.2d 125 (1955).
The National Conference of Commissioners on Uniform State Laws in the Uniform Marriage and Divorce Act has accepted the principle that separate property in community property states should not be subjected to divestiture by a trial court on divorce. The recommended draft for community property jurisdictions affirmatively states that “the court shall assign each spouse‘s separate property to that spouse.”5 The
In a broader context, Professor Marsh in his treatise, Marital Property In Conflict Of Laws 182 (1952), writes that “in none of the United States at the present time does either spouse acquire a marital-property interest in the property of the other owned at the time of marriage, whether movable or immovable.” Accord, K. Gray, Reallocation Of Property On Divorce 127, 132 (1977). Section 257 of the Restatement Of Conflict Of Laws (Second) and its comment affirms the principle that a spouse gains no marital property interest in the pre-marital acquisitions of the other spouse by virtue of the marriage.6
The undercurrent of arguments to this court in support of the divestiture of separate property is that Texas does not allow permanent alimony.7 Section 3.59,
One reason that Tеxas denies permanent alimony is that more than a century and a half ago, the state, along with Louisiana, took the lead to give wives equality with their husbands in the ownership of property they acquired during coverture. The common law recognized the wife‘s existence only through the husband, who upon marriage became the owner of the wife‘s property. Castleberry, supra, at 55. In addition, spouses share the gains of their marriage equally under our community property legacy from Spain. Common law jurisdictions are yielding to this equal system of marital property ownership. See K. Gray, supra, at 63-67, 132-133.
It is urged that we, by indirection, should resolve the problem of the state‘s lack of alimony laws by allowing our courts to divest a spouse of separate property and award it to the other spouse. In so doing, it is argued that we would be insuring the state that a worthy spouse8 would receive
Whatever may be the reasons for the strong Texas legislative policy against permanent alimony, this court will respect it. To do otherwise requires this court to disregard the rules of statutory construction, the history of the law prohibiting divestiture of separate property, the developed law of the other community property states; it would wipe out the legal distinctions between property, generate unnecessary constitutional problems about the classification and taking of property, create a new cycle of problems in construing amended article 3.63(b) of the Family Code, and would be contrary to the directions the law is taking in both common and community property law states as well as in the provisions of the Uniform Marriage and Divorce Act. The rules stated in this cause and in Eggemeyer harmonize these problems and keep the Texas community law consistent with the law of the other community property states. If there is a need for permanent alimony, it must come from the legislature where the policy arguments can be fully addressed by the whole public.
B. Separate Personalty, Like Separate Real Property, May Not Be Divested
The court in Eggemeyer was unanimous in its decision, as stated by the dissent, that the “estate of the parties” includes both real and personal property. In 1969, article 4638, later to become section 3.63 of the Family Code, was amended to eliminate the statutory prohibition concerning divestment of realty. As previously written, there was a question whether article 4638 meant that separate personalty could be divested. The Texas Legislature by its 1969 amendment of section 3.63 removed this provision, and as now written, the statute avoids the charge that it violates the due course of law,
Sue Cameron argues that Eggemeyer stands only for the narrow rule that separate realty may not be divested; separate personalty, she argues, may be divested. Only realty was involvеd in Eggemeyer, but, on the issue concerning an unconstitutional classification between realty and personalty, the entire court agreed that realty and personalty must be treated alike.9 To hold that the owner of separate realty may not be divested of his property, but that the owner of vendor‘s lien notes secured by the same realty or that the owner of stock in a corporation owning the realty could be divested would be an unreasonable classification of property. Railroad Commission v. Miller, 434 S.W.2d 670 (Tex. 1968); see San Antonio Retail Grocers, Inc. v. Lafferty, 156 Tex. 574, 297 S.W.2d 813 (1957); Ground Water Conservation Dist. No. 2 v. Hawley, 304 S.W.2d 764 (Tex.Civ.App.—Amarillo), writ ref‘d n.r.e. per curiam, 157 Tex. 643, 306 S.W.2d 352 (1957). Landholders cannot be so favored over holders of other kinds of property. Reed v. Reed, 404 U.S. 71, 75, 92 S.Ct. 251, 253, 30 L.Ed.2d 225 (1971); State v. Standard Oil Co., 130 Tex. 313, 107 S.W.2d 550, 557 (1937). The term “property” includes every species of property. Gulf, C. & S.F. Ry. v. Fuller, 63 Tex. 467, 469 (1885); Renault, Inc. v. City of Houston, 415 S.W.2d 948 (Tex.Civ.App.—Waco), rev‘d on other grounds, 431 S.W.2d 322 (Tex. 1968); see Castleberry, supra, at 46.
Our construction of the statute corresponds with the law that prevails in community property states. Arizona holds that there may be no divestiture of either separate realty, Porter v. Porter, 67 Ariz. 273, 195 P.2d 132 (1948), or of separate personalty, Warren v. Warren, 2 Ariz.App. 206, 407 P.2d 395 (Ct.App. 1966). California denies a divestiture of separate realty, Reid v. Reid, 112 Cal. 274, 44 P. 564 (1896), and treats separate personalty in the same manner, Donovan v. Donovan, 223 Cal.App.2d 691, 36 Cal.Rptr. 225 (Dist.Ct.App. 1963). Idaho held the same in Simplot v. Simplot, 96 Idaho 239, 526 P.2d 844 (1974). In Nevada, neither the separate realty, Thorne v. Thorne, 74 Nev. 211, 326 P.2d 729 (1958), nor the separate personalty, Zahringer v. Zahringer, 76 Nev. 21, 348 P.2d 161 (1960), may be divested in settling marital property rights. We can find no justifiable reason for treating separate personalty in a different manner than separate realty in divorce proceedings. As a result, we reject Sue Cameron‘s argument to allow the divestiture of separate personalty upon divorce.
C. “Separate” Proрerty Under Common Law and Community Property Regimes
Mr. Cameron acquired most of the U.S. Savings Bonds here at issue during his marriage to Sue Cameron while the couple was domiciled in common law states. Reviewing the action of the trial court, which had awarded Mrs. Cameron one-half of the bonds, the court of civil appeals characterized the bonds earned by Mr. Cameron in the common law jurisdictions as his separate property and held that the trial court could not divest a spouse‘s separate personalty. 608 S.W.2d at 751. We recognize that property acquired in common law jurisdictions has historically been termed “separate” property, but we hold that the property spouses acquire during marriage, except by gift, devise or descent should be divided upon divorce in Texas in the same manner as community property, irrespective of the domicile of the spouses when they acquire the property.
Characterization of the common law marital estate as separate property comes from the common law concept that the wife pоssessed no legal identity apart from her husband in whom legal title to the couple‘s property vested. See Oldham, Property Division in a Texas Divorce of a Migrant Spouse: Heads He Wins, Tails She Loses?, 19 Hous.L.Rev. 1, 3-15 (1981); see generally Dickson v. Strickland, 114 Tex. 176, 201-02, 265 S.W. 1012, 1021-22 (1924). Beginning with the enactment of the various Married Women‘s Property Laws throughout the nation during the nineteenth and early twentieth centuries, common law jurisdictions began to modify statutorily their archaic treatment of wives’ rights in marital property. See Glendon, Matrimonial Property: A Comparative Study of Law and Social Change, 49 Tul.L.Rev. 21, 28-35 (1974). As a result of the statutes, courts in thirty-nine of the forty-two common law property states10 now possess power to fashion upon divorce an equitable distribution of property acquired during marriage. See Freed & Foster, Divorce in the Fifty States: An Overview, 14 Fam.L.Q. 229, 249-52 (1981). A husband in a common law state may now have full paper title to property, but the non-acquiring wife holds valid and substantial rights to an equitable share of the “separate” marital property on divorce. See H. Marsh, Jr., Marital Property in Conflicts of Law 22-67 (1952).11
In Hughes v. Hughes, 91 N.M. 339, 573 P.2d 1194 (1978), the New Mexico Supreme Court considered the disparate natures of separate property in common law and community property states. The court held that New Mexico courts should not treat separate property as recognized in common law jurisdictions the same as separate property under community property laws. Id. at 1201-02. The court further held the bare legal principle that а wife has no legal title in her husband‘s separate common law marital property could not be accepted in light of the benefits, incidents, and immunities recognized as attaching to marital property in a wife‘s favor by courts in common law property states. Id. at 1197-99.
The Idaho Supreme Court in Berle v. Berle, 97 Idaho 452, 546 P.2d 407 (1976), also viewed the separate property concept in the common law state of New Jersey as significantly different from the concept of separate property under Idaho‘s community property laws. The trial court in Berle had characterized the husband‘s common law marital property as separate property and had concluded that Idaho‘s prohibition against divesting separate property entitled the husband to all the common law property. In reversing the judgment of the trial court, the Idaho Supreme Court maintained that Idaho‘s prohibition of divestiture was restricted to “separate” property within the context of the community property laws and did not prevent that state‘s courts from acknowledging the rights of spouses to an equitable division of common law separate property on divorce. Id. at 409.
In Rau v. Rau, 6 Ariz.App. 362, 432 P.2d 910 (1967), the court of appeals in Arizona confronted a judgment in which an Arizona trial court had equally divided personalty (savings bonds) and realty (a farm) that the Raus bought with funds they acquired during their marriage in Illinois, a common law state. The court determined that a spouse in Illinois holds an equitable interest upon divorce to a fair and just division of jointly earned marital property even though title to such property rests in the name of only one spouse. Comparing the definition of separate property under Arizona statutory law12 with the nature of separate property as found in Illinois, the court maintained that Arizona‘s prohibition against divestiture of spouses’ “separate” property would not preclude a division of the Illinois common law separate property. See also Braddock v. Braddock, 91 Nev. 735, 542 P.2d 1060 (1975). We agree with the New Mexico, Idaho, Arizona, and Nevada courts that substantively distinguish common law marital property from the separate property of community property jurisdictions.
The 67th Texas Legislature last year adopted this sensible approach when it authorized a division, on divorce, of common law property acquired during marriage in a
(b) In a decree of divorce or annulment the court shall also order a division of the following real and personal property, wherever situated, in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage:
(1) property that was acquired by either spouse while domiciled elsewhere and that would have been community property if the spouse who acquired the property had been domiciled in the state at the time of the acquisition; or
(2) property that was acquired by either spouse in exchange for real or personal property, and that would have been community property if the spouse who acquired the property so exchanged had been domiciled in this state at the time of its acquisition.
The bill analysis accompanying the subsequently adopted statute correctly explained:
Two separate systems of marital рroperty regimes exist in the various states: common law and community property. Each regime provides for the welfare and estate of both spouses upon dissolution of marriage. The end result is similar while the nomenclature is different. In community property states, like Texas, each spouse has legal title in property accumulated during the marriage. In common law states, the same property may belong to one spouse, but the other spouse is found to have acquired an equitable interest that can be vested upon dissolution of the marriage.
House Comm. On The Judiciary, 67th Legislature Of Texas, Bill Analysis To H.B. 753, p. 1 (1981). In enacting subsection (b) of
It has been suggested that section 3.63(b) may run afoul of this court‘s decision in Eggemeyer, because the statute may unconstitutionally authorize trial courts to interfere with the rights of a spouse holding legal title to common law marital property. See Oldham, supra, at 37-46; Stewart & Orsinger, Fitting a Round Peg into a Square Hole: Section 3.63, Texas Family Code, and the Marriage that Crosses State Lines, 13 St. Mary‘s L.J. 477, 486-91 (1982).
As stated above, divorce courts in all but three of the common law jurisdictions may effect an equitable distribution of the marital assets upon divorce. The New Mexico Supreme Court explained in Hughes:
[T]he wife, in many common law states . . . , has inchoate equitable rights to her husband‘s separate property where she has made contributions to preserving and bettering that property, whereas in a typical community property state she has no such rights since she has community property rights instead.
Hughes, supra, at 1199. A Texas court that makes a distribution on divorce of the common law marital estate equivalent to what would occur in the common law jurisdiction where the couple was domiciled when they acquired the property, does not impair the
III. CONCLUSION
The framework for the Spanish community property system of marital property builds upon a distinction between spouses’ community and separate estates. This distinction springs from a reality that property acquired during marriage other than by gift, devise or descent is the product of a unique, joint endeavor undertaken by spouses. That is the concept of matrimony. Community property owes its existence to the legal fact of marriage, and when the parties to that compact determine their relationship should end, property acquired during marriage is and should be divided among them in a just and right manner. By way of contrast separate property, in the community property setting, owes its existence to wholly extramarital factors, things unrelated to the marriage. In relation to that property, the parties are, in essence, strangers; they are separate. Any property that arises independently of marriage as a means of “equitably” balancing the spouses’ positions on divorce cannot be justified. Such a view rejects the viability of the community property system and ignores the carefully hewn jurisprudence that attempts to preserve the integrity of the two estates. The vast majority of common law property states have demonstrated that they too recognize the special nature of property acquired through the corroborative efforts of spouses. In adopting
We reverse that part of the judgment of the court of civil appeals that denied Sue Cameron fifty percent of the savings bonds and affirm the judgment of the trial court ordering the equal division.
We reverse that part of the judgment of the court of civil appeals that reversed the trial court‘s judgment that Sue Cameron receive thirty-five percent of the military retirement pay, and we render judgment awarding Sue Cameron her share of the military retirement pay but only from June 25, 1981.
Costs are adjudged against the respondent.
McGEE, Justice, concurring.
I agree with the judgment of the Court. I also concur in that portion of the majority opinion which holds that marital property acquired in a common law state is subject to division by a Texas court upon the parties’ divorce. I cannot, however, accept the majority‘s unnecessary discussion of Eggemeyer v. Eggemeyer, 554 S.W.2d 137 (Tex. 1977). Since the entire Court agrees that the savings bonds at issue in this case are not separate property, the majority‘s discussion of separate personalty is obitur dictum. As in Eggemeyer, a majority of this Court has reached conclusions grounded on statutory and сonstitutional considerations not essential to the disposition of the case. Because I do not believe Eggemeyer correctly states the law in all respects, I respectfully disagree with the majority‘s statement to the contrary.
In Eggemeyer, the issue before the Court was whether the trial court, in its divorce decree, could “divest one spouse of his separate realty and transfer title to the other spouse.” 554 S.W.2d at 138 (emphasis added). Virginia Eggemeyer‘s principal contention was that section 3.63, unlike former article 4638, did not restrict the power of the trial court to divide the separate realty of one spouse and award the other spouse a fee interest therein. The Court rejected this contention, holding that the legislature had intended to recodify the law as it existed before the enactment of the Family Code.
- the phrase “estate of the parties,” as employed in section 3.63 of the Family Code refers only to the community property of the partiеs and prohibits the division of separate property;
- a division of the separate property of one spouse would create a form of separate property not provided for in
article XVI, section 15 of the Texas Constitution ; - a division of the separate property of one spouse is a taking of property not justified by any public benefit, and deprives that spouse of his property without due process in violation of
article I, section 19 of the Texas Constitution .
In this case, the majority states that these supposed limitations on the power of the trial court are equally applicable to an attempted division of separate personalty. For the following reasons, I disagree.
A. Eggemeyer Is Not Stare Decisis on the Divisibility of Separate Personalty under the Family Code.
The first statutory ground advanced in Eggemeyer was that the legislature intended to enact the Family Code as a codification of existing law. 554 S.W.2d at 139. Article 4638, the forerunner of section 3.63, expressly prohibited divestiture of realty by a trial court when making a fair and just division of property in divorce proceedings. For over a hundred years, however, Texas courts divided separate personalty when equity demanded such a division. Hedtke v. Hedtke, 112 Tex. 404, 409, 248 S.W. 21, 22-23 (1923); Fitts v. Fitts, 14 Tex. 443, 450, 453 (1855); Trader v. Trader, 531 S.W.2d 189, 190 (Tex.Civ.App.—San Antonio 1975, writ dism‘d); Tullis v. Tullis, 456 S.W.2d 172, 173 (Tex.Civ.App.—El Paso 1970, writ dism‘d); Dillingham v. Dillingham, 434 S.W.2d 459, 461 (Tex.Civ.App.—Fort Worth 1968, writ dism‘d); Grant v. Grant, 351 S.W.2d 897, 898 (Tex.Civ.App.—Waco 1961, writ dism‘d); McCart v. McCart, 275 S.W.2d 155, 157 (Tex.Civ.App.—Fort Worth 1955, no writ); Grisham v. Grisham, 255 S.W.2d 891, 893 (Tex.Civ.App.—Waco 1953, no writ); Hamm v. Hamm, 159 S.W.2d 183, 185-86 (Tex.Civ.App.—Fort Worth 1942, no writ); Dale v. Dale, 141 S.W.2d 718, 719 (Tex.Civ.App.—Beaumont 1940, no writ).
The statutory prohibition of divestiture of realty was not carried forward in section 3.63 of the Family Code. Despite the obvious omission of that prohibition, the Court determined the legislative intent behind section 3.63 was to codify the law as it existed at that time. Eggemeyer, 554 S.W.2d at 139. Thus, section 3.63 did not authorize divestiture of separate realty upon divorce. Id.
This holding alone would have been sufficient to sustain the Court‘s judgment in Eggemeyer. Nevertheless, the Court advanced a second statutory ground as a basis for its decision. Upon examining section 3.63, the Court held that the “estate of the parties” was limited to community property. In so doing, the Court redefined the statutory language in a manner wholly different from that which existed previously. Consequently, the Court‘s construction of section 3.63 was inconsistent with its simultaneous determination that the Family Code codified the existing law.
In Hedtke v. Hedtke, 112 Tex. 404, 248 S.W. 21 (1923), this Court construed the phrase “estate of the parties” as follows:
The estate subject to division, under the statute, includes all property of the parties whethеr community property or separate property. The meaning of the statute is not different from what it would have been had the word ‘property’ been substituted in its phraseology for the word ‘estate.’
Id. at 408, 248 S.W. at 22 (emphasis added). Notwithstanding continued judicial and legislative acceptance of this construction, the majority in Eggemeyer examined several relatively recent cases and determined “estate of the parties” referred only to community property. See Reardon v. Reardon, 163 Tex. 605, 359 S.W.2d 329 (Tex. 1962); Hailey v. Hailey, 160 Tex. 372, 331 S.W.2d 299 (1960); Mansfield v. Mansfield, 308 S.W.2d 80 (Tex.Civ.App.—El Paso 1957, writ dism‘d). Upon closer examination, it is clear those cases dealt solely with the question of whether title to community real estate could be divested. None of these cases purported to construe “estate of the parties.”1
The courts of this State historically have interpreted “estate of the parties” to mean all property of the parties, whether community or separate. E.g., Hedtke v. Hedtke, 112 Tex. at 408, 248 S.W. at 22; Fitts v. Fitts, 14 Tex. at 450; Trader v. Trader, 531 S.W.2d 189, 190 (Tex.Civ.App.—San Antonio 1975, writ dism‘d). Any doubt as to the correct construction of a statute must be considered removed by consistent interpretation by the appellate courts. Marmon v. Mustang Aviation, Inc., 430 S.W.2d 182, 193 (Tex. 1968); see also Cunningham v. Cunningham, 120 Tex. 491, 40 S.W.2d 46 (1931). As Justice Norvell cautioned in Marmon, the doctrine of stare decisis is espeсially weighty in statutory construction:
“It is one thing for the judicial branch to amend a statute and quite another thing to modify a rule of common law. And, to overrule a court‘s uniform interpretation of a statute which has persisted over a long period of years as evidenced by numerous decisions, is very like amending a statute. That is why the rule of stare decisis is highly binding in this field.”
430 S.W.2d at 193. Because the definition of “estate of the parties” was not essential to the holding in Eggemeyer, and because it represented a departure from established construction, I do not regard the Eggemeyer definition as a correct statement of the law.2
B. Eggemeyer Is An Incorrect Construction of the Texas Constitution.
The Court‘s judgment in Eggemeyer, as noted above, was fully supported by the holding that section 3.63 was merely a recodification of existing law. Thus, it is not surprising that the subsequent discussion of the constitutional limitations on the division of separate property in general has been treated as dicta, Muns v. Muns, 567 S.W.2d 563, 565 (Tex.Civ.App.—Dallas 1978, no writ), and has not been viewed as prohibiting an award of one spouse‘s separate personalty to the other. York v. York, 579 S.W.2d 24, 25 (Tex.Civ.App.—Beaumont 1979, no writ); Eichelberger v. Eichelberger, 557 S.W.2d 587, 589 (Tex.Civ.App.—Waco 1977), rev‘d on other grounds, 582 S.W.2d 395 (Tex. 1979). The constitutional bases of Eggemeyer should not be regarded as authoritative since this Court will not decide a case on constitutional grounds if the casе can otherwise be disposed of. See, e.g., Wood v. Wood, 159 Tex. 350, 359, 320 S.W.2d 807, 813 (1959); San Antonio General Drivers, Helpers Local No. 657 v. Thornton, 156 Tex. 641, 647, 299 S.W.2d 911, 915 (1957); Waller v. State, 68 S.W.2d 601, 603 (Tex.Civ.App.—Amarillo 1934, writ ref‘d).
Prior to its amendment in 1980, article XVI, section 15 of the constitution provided as follows:
All property, both real and personal, of the wife, owned prior to marriage or claimed by her before marriage by gift, devise or descent, shall be the separate property of the wife; 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 . . . .
Citing Arnold v. Leonard, 114 Tex. 535, 273 S.W. 799 (1925), the majority in Eggemeyer stated that the constitutional definition of separate property was exclusive and could not be altered or enlarged by the legislature. Thus, even if section 3.63 could be construed as permitting a divestiture of one spouse‘s separate realty, the trial court was still powerless to make an award of one spouse‘s separate property to the other in its divorce decree.
What the Court overlooked in Eggemeyer is that the division of property upon divorce does not occur during the marriage, but at the moment of divorce; the division of property and the divorce decree are a single, integrated action. Application of those rules which characterize property before and during marriage is inappropriate. An analogous situation involves community property that is not divided upon divorce. We have consistently held such property is owned by the ex-spouses separately as tenants in common. Busby v. Busby, 457 S.W.2d 551, 554 (Tex. 1970); Taylor v. Catalon, 140 Tex. 38, 41-42, 166 S.W.2d 102, 104, (1942); Kirkwood v. Domnan, 80 Tex. 645, 647-48, 16 S.W. 428, 429 (1891). In both instances, this “separate property” is not within the constitutional definition, but is created by the fact of divorce.
There are, moreover, at least two additional situations in which property that is neither “owned prior to marriage” nor acquired thereafter by “gift, devise or descent” is treated as separate property. The first is a mutation of separate property. The second, personal injury awards, is particularly instructive for the purposes of this case. In Graham v. Franco, 488 S.W.2d 390 (Tex. 1972), we unanimously held that such awards were the separate property of the injured spouse despite their exclusion from the constitutional definition. More importantly, we limited Arnold v. Leonard to its facts. Thus, the most that can be gleaned from Arnold v. Leonard is that the legislature is powerless to enact a law classifying the rents and revenues of the wife‘s separate realty as her separate property.
There is, however, a more basic flaw in the “implied exclusion” reasoning of Arnold v. Leonard. Logically extended, it denies the existence of the husband‘s separate property since the constitution, until the 1980 amendment of article XVI, section 15, provided only for the separate property of the wife. Under a strict reading of Arnold v. Leonard, all property owned by the husband before marriage and acquired thereafter during marriage is necessarily community.
The fact that property is community or separate is pertinent to its division upon divorce. The courts of appeals have evolved several equitable rules which, quite properly, limit the trial court‘s discretion to award the separate property of one spouse to the other spouse to extraordinary circumstances. Muns v. Muns, 567 S.W.2d 563, 567 (Tex.Civ.App.—Dallas 1978, no writ); Cooper v. Cooper, 513 S.W.2d 229, 233 (Tex.Civ.Apр.—Houston [1st Dist.] 1974, no writ); Bryant v. Bryant, 478 S.W.2d 602, 605 (Tex.Civ.App.—Waco 1972, no writ); Dorfman v. Dorfman, 457 S.W.2d 91, 95 (Tex.Civ.App.—Waco 1970, no writ); Keene v. Keene, 445 S.W.2d 624, 626 (Tex.Civ.App.—Dallas 1969, writ dism‘d). Equity and the theory of community property argue for such rules. For over a century, Texas courts awarded separate personalty upon divorce. Prior to Eggemeyer, this was not considered a constitutional problem. It was the statutory provision, not the constitution which prohibited the award of separate realty upon di-
The second constitutional basis for the Court‘s decision in Eggemeyer was the due process clause of the Texas Constitution.
I disagree with this holding. As stated in the dissent in Eggemeyer, “[t]he special relationship between the State and the institution of marriage has often been recognized.” 554 S.W.2d at 147. The state‘s interest in the marital relationship provides a sufficient and justifiable public purpose for divestiture of one spouse‘s separate property. Maynard v. Hill, 125 U.S. 190, 205 (1887).
By ordering periodic child support payments, Texas courts are empowered to divest a parent of his separate personalty.
Section 3.63 of the Family Code and previous Texas divorce statutes have required the division of marital property according to equitable principles. In many circumstances, equity may require an unequal division of community property. Bell v. Bell, 513 S.W.2d 20, 22 (Tex. 1974). Likewise, in еxtreme cases, equity may require the trial court to award a portion of one spouse‘s separate personalty to the other. I would hold that article I, section 19 of the Texas Constitution is no impediment to an award of one spouse‘s separate property to the other.
The majority opinion suggests that allowing a divestiture of separate personalty under section 3.63, in light of the holding in Eggemeyer that separate realty cannot be divested, is a violation of equal protection under the Fourteenth Amendment of the United States Constitution and article I, section 3 of the Texas Constitution. The argument is that a classification based on land ownership arbitrarily discriminates against those persons owning separate personalty rather than separate realty. I do not find this contention persuasive.
The equal protection clauses of both the federal and state constitutions protect individuals against arbitrary discrimination by the state. The state, however, may classify its citizens into reasonable classes, and treat these different classes of persons in differеnt ways. Reed v. Reed, 404 U.S. 71, 75 (1971); Railroad Commission v. Miller, 434 S.W.2d 670, 673 (Tex. 1968); Bjorgo v. Bjorgo, 402 S.W.2d 143, 148 (Tex. 1966).
The test under both the state and federal constitutions is whether the classification is reasonable and not arbitrary. Reed v. Reed, 404 U.S. at 76; Railroad Commission v. Miller, 434 S.W.2d at 673; San Antonio Retail Grocers, Inc. v. Lafferty, 156 Tex. 574, 577, 297 S.W.2d 813, 815 (1957). There must be some ground of difference which has a fair and substantial relationship to the purpose of the legislation, so that all persons similarly situated are similarly treated. New Orleans v. Dukes, 427 U.S. 297, 303-04 (1976); Railroad Commission v. Miller, 434 S.W.2d at 673.
C. A Divestiture of Separate Property Is Not an Award of Alimony.
The majority opinion asserts that a divestiture of separate property “is nothing less than alimony.” Thus, the majority concludes that a division of one spouse‘s separate property is not only prohibited by section 3.63 and the Texas Constitution, but is also contrary to public policy. I disagree.
A divestiture of separate property and аn award of alimony are totally different. Unlike a divestiture of separate property, alimony is a personal obligation of one spouse to support the other which continues after a final decree of divorce. Francis v. Francis, 412 S.W.2d 29, 32-33 (Tex. 1967). By contrast, a divestiture of separate property, like a division of community property, is an isolated event which occurs at the moment of divorce. Alimony and an award of separate property are two distinct means of achieving a single end: the financial support of the ex-spouse. Because Texas does not permit alimony, our courts, with the implicit approval of the legislature, have permitted divestiture of one spouse‘s separate personalty to ensure that the other spouse does not become a destitute ward of the state.
The majority also stresses that its opinion conforms with the law of other community property jurisdictions. While it is true that no state other than Washington permits a divestiture of separate property, it is equally true that the courts of these states are empowerеd to award permanent alimony. This is a critical distinction which the majority relegates to a footnote.
D. Conclusion.
Neither Eggemeyer nor the majority opinion in this case should be viewed as anything but dicta regarding the power of the trial court to divide separate personalty upon divorce. In my opinion, section 3.63 of the Family Code allows the trial court to divest a spouse of his or her separate personalty. Furthermore, I do not believe the Texas Constitution prohibits such a division.
BARROW and SONDOCK, JJ., join in this concurring opinion.
GREENHILL, Chief Justice, concurring.
I agree with the substance of the concurring opinion of Mr. Justice McGee.
I also agree with the holding of the Court that marital property acquired in a common-law jurisdiction is not separate property within the framework of the Texas community property laws.
The majority opinion gives several grounds for its holdings with which I obviously do not agree. Since there are many reasons given, it is not necessary to reach constitutional grounds, particularly the “due process” argument. A wise rule of opinion writing and appellate judgments is that constitutional grounds are not decided unless it is absolutely necessary.
A redeeming feаture of the majority opinion, as I understand it, is that it does not reach the “due process” point. If it even suggests such a holding, it is unnecessary to the opinion.
The Court‘s opinion does not disavow the dictum of the earlier opinion in Eggemeyer. Separate personal property was not before the Court in Eggemeyer; and any observation about “due process” was, in my opinion, clearly dictum. With this state of the law, we also have the undisturbed language of Hedtke that it was permissible to deal differently with separate realty and separate personalty.
It is my hope, therefore, that the Court‘s power to deal with separate property, particularly separate personal property, may be addressed by the Legislature. After all, the Legislature is the policy making body of this state. In this context, the Legislature