Court Opinion

ID: 9774819
Source: CourtListenerOpinion
Date Created: 2023-08-29 18:34:49.822856+00
Date Added: 2024-06-11T07:32:16.548134
License: Public Domain

ON MOTION FOR REHEARING
Plaintiff argues that our holding that the language on the signature card of the checking account created a presumption of a third party beneficiary contract for defendant Carnes’s benefit is immaterial. She contends that the jury finding that it would be unfair to Meador’s community property rights to give the entire proceeds of the account to Carnes is a constructive fraud on Meador. She then equates constructive fraud with actual fraud as defined in Tex.Bus. & Comm.Code Ann. § 24.02 (Vernon 1968) and concludes that since constructive fraud was found, the holding of the Supreme Court in Krueger v. Williams, 163 Tex. 545, 359 S.W.2d 48 (1962) is inapplicable. We cannot agree.
Section 24.02 requires an intent to defraud by the transferor-grantor. See Hunter v. Pitcock, 346 S.W.2d 509 (Tex.Civ. App.—Fort Worth 1961, no writ); cf. Hawes v. Central Texas Production Credit Ass’n, 492 S.W.2d 714 (Tex.Civ.App.—Austin), affirmed, 503 S.W.2d 234 (Tex.1973). Constructive fraud does not require the intent to defraud [Peiser & Co. v. Peticolas, 50 Tex. 638, 646 (1879)] required under § 24.02; instead it is an equitable doctrine employed by courts to rectify an injury resulting from the breach of a fiduciary relationship. Archer v. Griffith, 390 S.W.2d 735, 740 (Tex.1964). Thus, a finding of unfairness is not tantamount to a finding of intent to defraud under § 24.02. Since no intent to defraud was proved, § 24.02 does not apply.
Neither do we agree that a capricious, excessive or arbitrary transfer of community property is wholly void. It is only voidable at the election of the other spouse, and may be avoided only in so far as it deprives her of her community interest. It should be allowed to stand to the extent that the surviving spouse can be reimbursed out of the remaining assets of the decedent’s estate. Thus, to that extent, the loss occasioned by such reimbursement will fall on the decedent’s heir or devisee rather than on his donee, in accordance with the principle that a person has complete power to dispose of his own property during his lifetime. Consequently, we adhere to the direction in our original opinion that plaintiff should first be reimbursed from decedent’s share of the community estate for dispositions of community property found to be capricious, excessive, or arbitrary, and then if the presumption of defendant’s sur-vivorship right with respect to the bank account is not rebutted, plaintiff should be allowed further reimbursement from those funds.
Motions overruled.