Court Opinion

ID: 9674568
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:30:43.474536+00
Date Added: 2024-06-11T18:16:28.186995
License: Public Domain

DIES, Chief Justice.
This is an appeal from a divorce suit wherein Jacqueline Bell (wife) obtained a divorce from Norman L. Bell (husband) and a division of the community property. The wife’s first point is “The Court made error in not granting to Plaintiff her community one-half of the properties acquired during marriage in the name of the two Corporations, Bell Oil Company and Bell Oil Company of Louisiana.”
The parties were married in November 1964; at the time of the marriage both *611corporations were in existence. At the time of the trial (April 1973) the husband owned all of the stock in both corporations as his separate property. The evidence shows that each corporation acquired real estate and other properties during the marriage and that the stockholders’ equity in both corporations had substantially appreciated (some $360,579) during the same period.
In his findings of fact, the trial court found:
“That regardless of the legal status of such corporations and the nature of the property acquired by such corporations during the marriage of the parties, the Court finds that considering the circumstances of the parties all of the stock or other interest in such corporations should be and is set aside to Norman L. Bell.”
The court in its Conclusions of Law declares :
“The Court concludes that the property acquired by Bell Oil Company and Bell Oil Company of Louisiana during the marriage of the parties does not constitute a part of the community estate of the parties inasmuch as said corporations were neither organized nor operated in fraud of any of the rights of Jacqueline Bell, nor are such corporations the alter ego of Norman L. Bell.”
Section 3.63, Family Code, V.T. C.A., provides for the trial court to order a division of the estate of the parties in a manner that the court deems just and fair. We are well aware that the appellate courts have held that such division does not have to be equal, that it must be presumed that the trial court exercised its discretion properly, and that a case should be reversed only where there is a clear abuse of discretion. See In re Marriage of McCurdy, 489 S.W.2d 712, 719 (Tex.Civ. App., Amarillo, 1973, error dismissed).
We also recognize and adhere to the rule that the increase in value of stock is deemed to be the separate property of the spouse owning the stock. However, we here hold that such rule has no application to the case before us.
Norman L. Bell actively managed and operated these companies as fully as he would have if they weren’t incorporated. He testified they were incorporated to limit liability and for tax advantages. If these two oil companies were not incorporated and were individually owned by the husband, the profits derived therefrom would have been community property, even though the companies were his separate property. Hardee v. Vincent, 136 Tex. 99, 147 S.W.2d 1072 (1941); Moss v. Gibbs, 370 S.W.2d 452 (Tex.1963). To us it would be unreasonable to apply one rule to an individually owned situation and another to a corporately owned situation. See 36 Tex.Law Rev. 187 (1957).
We are not disposed to “make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning.” (Judge Learned Hand in Cabell v. Markham, 148 F.2d 737 (2d. Cir. 1945), reversed; 326 U.S. 404, 66 S.Ct. 193, 90 L.Ed. 165 (1945).
We sustain the wife’s first point of error, but with these comments. In remanding this case for a new trial we do not direct the trial judge how to divide the property. However, by the finding and conclusion set out above, the trial court has shown that it did not take the two corporations into consideration in making its division. The law of this case stated simply is, if one spouse is the owner of property through the vehicle of incorporation, and transacts business through such corporation, upon a divorce and division of their estate, the trial court shall take into consideration the increase in value of the cor*612porate assets by reason of the business transacted through such corporation during the term of the marriage. This rule is not-founded upon fraud, but rather upon the broad principles of equity.
The rule set forth above would have no application to division of property in a divorce suit in which one party owns as separate property, stock in I.B.M., Xerox, or any other corporation in which such party is merely a stockholder. This is true regardless of stock splits, stock dividends, retained earnings, or increase in value. It has limited application to a case similar to the one pending before us. We have not been cited nor have we found an appellate court in this state passing upon the specific question before us. The abuse of discretion in this case is the refusal by the trial court to take these two corporations into consideration in making a division between the parties. This being a case of first impression in this state makes such refusal understandable, but we feel that such a rule must be established so that a trial court may carry out the meaning of Section 3.63, Family Code, V.T.C.A., and divide the estate in a manner that is “just and fair.” The record shows that the husband’s stock in these two corporations is pledged to secure the payment of a note given by him to a former wife. The import of this opinion is not that the trial court is directed to award the wife either a legal or equitable interest in such corporate stock, but only that the court consider the stock as set forth above in making a division between the parties.
Reversed and remanded.