Hopkins died during the pende ncy of this case . She was re place d as a pla intiff in this sui t by 1 two of her

three children, Russell Hopkins and Mavia Dichoche a. For convenie nce, w e re fer

to J oy ce L ovelady

and H. Gle nn L ovelady

as Joy ce a

nd Glenn. 2 

### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 5 -00 109 -CV

Jo yc e Lov e lad y, Indi vid ual ly a nd as Sur viv ing Spous e of H. G le nn Lo ve lad y, De c e as e d , App e lla nt
v. F anni e Lovelady Sp ain an d Artis Lovelady Hop kin s , Appellees

F ROM THE DISTRICT CO URT OF LEE COUNTY , 335TH JUDICIAL DISTRICT NO. 12,0 83 , HO NORAB LE JO HN L. P LACKE , JUDGE PRESIDI NG

M E M O R

A N D U M O P I N I O N
F ann ie L ov e la dy

Spa in a nd Ar tis L ov e la dy

Ho pk ins su e d th e e state of the ir la te brother H . Glenn L ovelady and his widow, J oy ce L ovelady , individually and as administrator of the
e state , s e e kin g a

c on str uc tiv e tr us t on tw o tr a c ts o f l and
. Th e tr ia l c ourt imp os e d a c on str uc tiv e tr us t in f a vo r o f S pa in a

nd Ho pk ins ’s he ir s, g ra

nti ngthe m c oll e c tiv e ly an un div ide d o ne -h a lf int e re st i n 1
eac h trac t. The trial cour

t also decla

red a distribution of t he remaining one-ha lf of ea ch tra ct. J oy ce 2 appea ls, arg uing that the trial court e rre d by imposing the c onstructive trust and by failing to awar d
e qu ita ble re imb ur se me nt t o the c omm un ity e state c re a te d duri ng he r marr ia g e to Gl e nn . We r e ve rs eGlenn’s mother lived on the fifty -ac re trac t a nd his sisters lived on the nine-a cre trac t. Glenn 3 and Joy ce lived in San Antonio. 2 the ju dgmen t of the tr ia l c ourt and re nd e r j ud g me nt t

hat Sp a in a

nd Ho pk ins take no thi ngon the ir
c la im f or c on str uc tiv e tr us t.
Bac kgr ound Spa in a lle g e s th a t Gle nn a pp ro a c he d Spa in an d H op kin s in la te Se pte mbe r o r e a rl y October 1995, asking his sist ers to help pa y for a nine-a cre trac t of land and a fifty -ac re tract of la

nd, b o t h o f w h i c h w e r e b e i n g o c c u

p i e d b y m e mb e r s o f t h e L o v e l a dy f a m i l y. Acc ording to Spain’s

3 testimony , Glenn re prese nted t o Spain and Hopkins that if they paid half of the purc hase pr ice f or
e a c h tr a c t of

land , the y “ wo uld have a pla c e to liv e on the fa rm .” Spa in a

nd Ho pk ins un de rs too d th is statement to me an that they would become co-ow ners of the prope rties with Glenn. Spain testified that sh e and

Ho pk ins ma de pa

y me nts to t he NB C B ank

of Roc kd a le fo r w hat the y

we re tol d w a s h a lf of the purc ha se pr ic e of

the tw o tr a c ts. The e vidence prese nted at trial shows that at the time this allege d ag ree ment was
ma de , b oth

tr a c ts we re fu lly pa id fo r a nd fr e e of a ll e nc umb ra

nc e s. Th e de e d to the fi ft y -a c re tr a c t, executed on September

13, 1995, n ames H. G lenn L ovelady as the g rante e. Glenn pur chase d the fifty -ac re tra ct from the V eter ans L and B oard, with w hom he signe d a contra ct of sale in 1972. The deed to the nine -ac re tra ct, executed on Ja n u ar y 1 7 , 1995, names H. G lenn L ovelady and Joy ce L ov e la dy a s g ra

nte e s. Gl e nn and Joy c e , wh o we re marr ie d in 19 93 , e nte re d int o the c on tr a c t of sa le for the nine -ac re tra ct in Dec ember 1994.We a ssume that the a dmi nis tr a tio n wa s sti ll p e nd inga t th e tim e su it w a s f ile d b e c a us e Spa in 4 and Hopkins name d the estate as a de fenda nt and bec ause the trial court made the following finding of fa c t: “ H. Gl e nn L ov e la dy die d int e state and his e state wa s a dmi nis te re d in B e xar County , T e xas. His wife, Joy ce L ovelady , was a ppointed independe nt administrator of his estate.”

3 Hop ki n s andS pai n argue d at tr ial th at G len n l ik ely to ok ou t a l oan fro m t he N BC Ba nk of Rockdale to pa

y off the outstanding balanc e he owed on the two trac ts of l an d and convince d his sist ers to pay down that loan by repr esenting to the m that the y wer e paying ha lf of the purcha se price of the two tra cts. Howe ver , n o n e o f the e vidence prese nted at trial c onnects the pay ments made by

Spain and Hopkins to the two trac ts of land or shows the amount of the NB C loan or its re lationship to t he purc hase pr ice of the two trac ts. Other than Spain’s testimony , scant evidenc e of the amount paid by the sisters towar d the debt wa s introduced. Gl e nn die d in te stat e in June 20 01 . Sp a in a nd Ho pk ins so ug ht t o e nf

or c e the ir
a g r e e m e n t
. A l t h o u g h an a d m i n i s t r a t i o n o f G l e n n ’ s e s t a t e w a s p e n d i n g i nB e x ar C o u n t y, Spain and

4 Hopki n s fi l ed their petition for c onstructive trust in L ee County , wher e the two tra cts of land a re located. See Tex. Ci v. Prac. & Rem. Code Ann. § 15.011 (West 2002) (pr oviding that a n action for
rec overy of an inter est in rea l property must be broug ht in the county wher e the pr operty

is located). The trial c ourt imposed a construc tive trust in favor of Spain and Hopkins’s heirs, a nd decla red how the two trac ts of land should be distributed by the estate . This appea l followed.4 Discussion Cons truc tiv eTr ust

I n h er f irst and sec ond points of error , J oy ce a rg ues that the trial c ourt err ed by imposing t h e co n s t ructive trust be cause any ag ree ment betwee n her husba nd and his sisters was made a fter both tra cts had be en ac quired. We ag ree .

A construc tive trust is an equitable re medy
. Burrow v. Arce , 997 S.W .2d 229, 241 (Tex. 1999). We review

a trial c ourt’s dec ision when sitting as a court of e quity

under a n abuse- ofdiscretion standa

rd. Gerde s v. Kenname r , 155 S.W .3d 541, 545 (Tex. App.—Corpus Christi 2004, no pet.). A tria l court abuse s its dis cre tion if it acts without refer ence to any g uiding r

ules and principles. Downer v. Aquam arine Operators, Inc

. , 701 S.W .2d 238, 241–42 (Tex. 1985).

A construc tive trust cannot be c reated on land alre ady owned. Sto v all

v . P oo le , 38 2 S. W.2 d 7 83 , 7 85 (T e x. Civ . App .— Wac o 196 4, wr it r e f’ d n .r .e .) ; see Lotus Oil Co. v. Spires , 240 S.W .2d 357, 359 (Tex. Civ. App.—El Paso 1950, writ ref ’d n.r.e.) (“A construc tive trust arises when one acquires property with the funds of another under such circ umstances that equity and g ood conscie nce r equire that restitution be made by the one so wrong fully acquir ing the proper ty with the funds of a nother he nce he i s considere d to hold the l eg al t itle for the one whose property has bee n so wrongful ly used in its acquisition .”) ( emphasis adde d). Appe llees have not cited and we have not found any case in which the wrong ful act trig g ering the impositi on of a c onstructive trust occ urre d after the construc tive trustee ha d acquir ed title to the proper ty
. A c on str uc tiv e tr us t i s an e qu ita

ble re me dy

de sig ne d to pr e ve nt u

nju st e nr ic hme nt. Arce , 997 S.W .2d at 241. Her e, Glenn’ s estate a nd h i s h ei rs wo u ld not be unjustly enric hed byHoweve r, counse l for Spain and Hopkins c lear ly stated i n his opening statement t hat Spain and 5 Hopkins “re ally

want land. The y

consider this to b e fa m ily land in L ee County

and it’s ver

y important to them. The money is a seconda

ry situation.”
5 ke e pin g the tw o tra c ts of

pr op e rt y be c a us e Gl e nn , in div idu a lly

and joi ntl y wi th h is w if

e Joy c e , p a id the full purcha se price for both tra cts befor e the a lleg ed ag ree ment occur red in 1995. Fur ther, a party seekingto impose a construc tive trust must t rac e the f unds at issue into the specific pr operty soug ht to be rec overe d. Fl ou rn oy v . W ilz , No. 10-05-00089- CV, 2006 Te x. Ap p. L EX I S 61 97 , * 4 ( Te x. Ap p. —Wa co J ul y 19 , 2 00 6, pe t. f ile d) ; Graham v. Turner , 4 7 2 S
. W
. 2 d 8 3 1 , 8 4 0 (T ex . C i v . Ap p . —W ac o 1 9 7 1 , n o w r i t ) (c i t i n g Sp e nc e r v . P e tti t , 34 S.W .2d 798, 800 (Tex. 1931)). The sisters did not trace their m oney into this specific proper ty
. I nstead, they paid some amount on some debt in exchang e for their brother ’s promise that they would have a

place to live o n the fa

rm. They may or may not be entitled to reimburse ment of the sum of money they pa id, bu t e qu ity

wi ll n ot g ra

nt t he m ti tle to t

he tw o tr a c ts und e r t

he se c ir c ums ta

nc e s. 5 Be cause both tracts of land wer e paid for, free and cle ar of all encumbr ance s, at the time of the alleg ed ag ree ment betwee n Glenn and his two sisters, we hold that the tria l court abuse d it s d is c r e ti o nb y

im p o s in g a c o n s tr u c ti v e tr u s t i nf av o r o f Sp a in

an d H o p k in s o nth e tw o tr a c ts
. We sustain J oy ce’ s first and sec ond points of error
. Di stribu tio n of

the Est ate J oy ce ha s reque sted that this Court correc t the district court’s improper decla ration of how the two tra cts should be distributed from the pr obate e state. Indeed, the district court lac ked jurisdiction to declare a distribution of the t rac ts beca use the indepe ndent administration of Glenn’ sThe district cour t inco rr ec t l y at t em p t ed t o limit the distribution of the tracts of la nd to the 6 p a r t i e s t h a tw e r e b e f

o r e i t
. T h e p r o b a t e c o d e , w h i c h g o v e r n s t h e d i s t r i b u t i o no f

s u c h p r o p e rt y, contains no such limitation. Tex . Prob. Code Ann. § 38 (West 2003). 6 estate was s till pending in Be x ar County
. Ba ile y v . Ch e ro k

e e Cou nty Ap prais al D ist
. , 862 S.W .2d 581, 585–86 (Tex. 1993)
. The probate court is the proper forum for adjudicatingthe distribution of estate a ssets beca

use, unlike this Court, the probate court has all the information nec essar y to make a distribution, inc l u d ing the identities of Glenn’s he irs, the exist ence and extent of cre ditor’s
c la ims , a nd the e xiste nc e of

any ho me stea d c la ims . Su

bje c t to the se and

oth e r c on sid e ratio ns , Glenn’s inter est in the nine-a cre trac t held as community pro p er t y woul d pass to his widow, see Te x. Pr ob . Co de Ann. § 45 (We st 20 03 ), and the fi ft y -a c re tr a c t he ld a s G le nn ’s se pa rate pr op e rt

y would pass one-ha lf to Joy ce and one- half to Glenn’ s heirs as tena nts in common. See id. § 38(b)( 2) (West 2003). The pr obate court must de termine the corr ect distribution to Glenn’s heirs in light of thi s Co ur t’ s r uli ngre ve rs ingthe imp os iti on of a c on str uc tiv e tr us t. 6 Equi tab le Re imburs e ment I n her third point of e rror , J oy ce a rg ues t h at t h e t ri al cour

t erre d by not ordering Hopkins and Spain to reimburse the community estate of Glenn and Joy ce f

or the e x penditure of community

funds on the fifty -ac re tract held as Glenn’s separ ate property
. I n the eve nt that J oy ce has a c og nizable claim for equitable reimbursement, the claim lies ag ainst Glenn’s probate estate , not ag ainst Spain and Hopkins individually
. See, e .g. , Penick v. Pe nick , 783 S
. W
. 2d 194, 196 (T e x. 19 88 ) ( ho ldi ngtha

t “ the pa y me nt b y on e mari ta l e state of

the de bt of ano the r cr e a te s a pr ima fac ie rig ht of reimburse ment”). Any such claim must be brought in the probate court. The district7

court lacked jurisdi ction to consider this cla im. See B ailey , 8 62 S.W. 2d a t 58 5– 86 (h old ingthat if there is an ong oing a dminist ration of a n estate in proba

te cour t, that court alone has jurisdiction over matters incident to the e state). We over rule Joy ce’ s third point of error
. Conclusion We reve rse the trial court’s imposit ion of a construc tive trust on the two trac ts of land and re nder judg ment that Spain and Hopkins take nothing on their cla im. W e fur ther hold that the district court l ac k edj u ri s d i ct i o nt o co mp el an y d i s t ri b u t i o no r r ei mb u rs em en tfr o m t h e p ro b at e esta te.

W. Kenneth L aw, Chief Justice Be fore Chief J ustice L aw, Justi ces B . A. Smith and Pemberton Reverse d and Rende red Filed: De cembe r 1, 2006