different ways to trace separate property

DIFFERENT WAYS TOTRACE SEPARATE PROPERTY

Richard R. [email protected]

http://www.orsinger.com

Orsinger, Nelson, Downing & Anderson, LLP

San Antonio Office:1717 Tower Life BuildingSan Antonio, Texas 78205

(210) 225-5567http://www.orsinger.com

and

Dallas Office:5950 Sherry Lane, Suite 800

Dallas, Texas 75225(214) 273-2400

http://www.ondafamilylaw.com

State Bar of Texas40th Annual

Advanced Family Law CourseAugust 4-7, 2014

San Antonio, Texas

Chapter 25

2014Richard R. OrsingerAll Rights Reserved

TABLE OF CONTENTS

I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-

II. TRACING; MUTATIONS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-

III. PRESUMPTIONS AND BURDEN OF PROOF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-A. THE COMMUNITY PRESUMPTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-B. THE BURDEN OF PERSUASION... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-C. THE PRESUMPTION CAN VANISH.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-D. COUNTER-PRESUMPTIONS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-E. INSTRUCTING THE JURY.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-F. ALTERING THE BURDEN OF PROOF BY AGREEMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . -6-

IV. THE WEIGHT/SUFFICIENCY OF THE EVIDENCE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-A. THE TRIAL COURTS PERSPECTIVE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-

1. No Evidence and Conclusive Evidence.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-a. Obtaining a No Evidence Ruling.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-b. Obtaining a Conclusive Evidence Ruling.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-

2. Where A Fact Issue Is Presented.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-3. Post-Verdict and Post-Trial Motions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-

B. THE APPELLATE COURTS PERSPECTIVE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-1. Evidence At The Extremes... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-2. Evidence Between the Two Extremes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-3. Disposition of the Case on Appeal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-

C. THE CHART.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-

V. MANAGEMENT RIGHTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-

VI. THE MUTATION PRINCIPLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-A. ASSET EXCHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-B. ENTITY CHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-

VI. SEPARATE CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-

VII. COMMINGLING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-

VIII. METHODS OF PROOF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-A. TESTIMONY OF A SPOUSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-B. SWORN INVENTORIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-

1. The Inventory as a Judicial Admission... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-2. The Inventory as Evidence.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-

C. ACCOUNT RECORDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-D. TAX RETURNS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-E. CORRESPONDENCE; MEMO-RANDA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-F. PUBLIC INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-

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IX. LINE-ITEM-TRACING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -26-A. COMMUNITY-OUT-FIRST APPROACH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -26-B. SEPARATE MONEY PAYS SEPARATE OBLIGATIONS.. . . . . . . . . . . . . . . . . . . . . . . . . -28-C. MATCHING TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -30-D. SUPREME COURT TRACING.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -32-

1. McKinley v. McKinley.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -32-2. Estate of Hanau v. Hanau.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -32-3. Pearson v. Fillingim... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -33-

E. OVERDRAFTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -33-F. LINES-OF-CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -33-G. MARGIN ACCOUNTS... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -34-

X. MINIMUM BALANCE METHOD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -34-

XI. EXHAUSTION OF COMMUNITY APPROACH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -35-A. COMMUNITY LIVING EXPENSE PRESUMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -35-B. DISTRIBUTIONS FROM BUSINESSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -37-

XII. INTENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -37-

XIII. MAXIMUM COMMUNITY AVAILABLE APPROACH.. . . . . . . . . . . . . . . . . . . . . . . . . . . -37-

XIV. PRO RATA APPROACH.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -38-

XV. ITS IN THERE SOMEWHERE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -39-

XVI. ROBINSON/GAMMILL RELIABILITY STANDARDS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40-

XVII. ESTIMATING GROWTH OF CAPITAL.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-

XVIII. THE 10,000 FOOT VIEW.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-

XIX. HYPOTHETICALS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41-1. Renewing CDs... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-2. Schedule B.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-3. Schedule D.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-4. Sale of Partial Block 1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-5. Sale of Partial Block 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-6. Sale of Partial Block 3.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-7. Promissory Note 1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-8. Promissory Note 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-9. Revolving Line of Credit 1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -42-10. Revolving Line of Credit 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-11. Revolving Line of Credit 3.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-12. Investment 1... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-13. Investment 2... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-14. Reimbursement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-15. Overdraft 1... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-

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16. Overdraft 2... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-17. Gift 1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-18. Gift 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43-19. Gift 3.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-20. Deed Recital.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-21. Line-Item-Tracing 1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-22. Line-Item-Tracing 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-23. Line-Item-Tracing 3.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-24. Distribution of Profits 1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-25. Distribution of Profits 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-26. Living Expenses... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44-27. Maximum Community Available for Investment.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-28. Possession of the Records.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-29. Daubert/Robinson.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-30. Contractually-Modified Burden of Proof.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -45-

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Different Ways to Trace Separate Property Chapter 32

DIFFERENT WAYS TOTRACE SEPARATE PROPERTY

by

Richard R. OrsingerBoard Certified in Family Law& Civil Appellate Law by the

Texas Board of Legal Specialization

I. INTRODUCTION. Texas courts haveentertained a variety of approaches to provingseparate property. Other states, as well, havepublished appellate cases about how to tracingcommingled property, not only for marital propertypurposes but also to sort out proceeds from the saleof exempt assets that were mixed with non-exemptcash, or to allocate funds in which the monies ofdifferent people have been mixed. This articlediscusses the popular line-item-approach totracing, as well as other alternatives to provingseparate property claims.

II. TRACING; MUTATIONS. [T]he questionwhether particular property is separate orcommunity must depend upon the existence ornonexistence of the facts, which, by the rules oflaw, give character to it . . . . Hilley v. Hilley, 161Tex. 569, 342 S.W.2d 565, 568 (Tex. 1961)."Tracing involves establishing the separate originof the property through evidence showing the timeand means by which the spouse originally obtainedpossession of the property." Boyd v. Boyd, 131S.W.3d 605, 612 (Tex. App.--Fort Worth 2004, nopet.). As noted in Pace v. Pace, 160 S.W.3d 706,711 (Tex. App.--Dallas 2005, pet. denied): Wherean asset is purchased during marriage with moniestraceable to a spouse's separate estate, the assetmay appropriately be characterized as separateproperty.

The Supreme Court said, in Rose v. Houston, 11Tex. 324, 1854 WL 4287, *2 (Tex. 1854):

It has been decided, not only that propertyreceived in exchange for the separate

property of one of the parties to the nuptialcontract remains separate property, but thatproperty purchased with money which wasobtained upon the sale of the separateproperty of either husband or wife, alsoremains separate property. (Love v. Robinson,7 Tex. R., 6; McIntyre v. Chappell, 4 Id.) Theconsequence is, that to maintain the characterof separate property, it is not necessary thatthe property of either husband or wife shouldbe preserved in specie, or in kind. It mayundergo mutations and changes, and stillremain separate property; and so long as itcan be clearly and indisputably traced andidentified, its distinctive character willremain.

In Smith v. Bailey, 66 Tex. 553, 1 S.W. 627, 628(Tex. 1886), the Supreme Court said: Anotherprinciple, equally well settled, is that the wife'sseparate property may undergo mutations andchanges, yet retain its separate character; but theproof to trace and identify it in its changedcondition must be clear and satisfactory. Again inNorris v. Vaughan, 152 Tex. 491, 496-97, 260S.W.2d 676, 679 (1953), the Supreme Court said:so long as separate property can be definitelytraced and identified it remains separate propertyregardless of the fact that the separate propertymay undergo mutations and changes.'

In Celso v. Celso, 864 S.W.2d 652, 654 (Tex.App.--Tyler 1993, no writ), the court said:"Separate property will retain its character througha series of exchanges so long as the party assertingseparate ownership can overcome the presumption

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of community property by tracing the assets onhand during the marriage back to property that,because of its time and manner of acquisition, isseparate in character."

The court in Faram v. Gervitz-Faram, 895 S.W.2d839, 842 (Tex. App.--Fort Worth 1995, no writ),described tracing in the following way:

[T]he party claiming separate property musttrace and identify the property claimed asseparate property by clear and convincingevidence. Tracing involves establishing theseparate origin of the property throughevidence showing the time and means bywhich the spouse originally obtainedpossession of the property. Hilliard v.Hilliard, 725 S.W.2d 722, 723 (Tex.App.--Dallas 1985, no writ). Separateproperty will retain its character through aseries of exchanges so long as the partyasserting separate ownership can overcomethe presumption of community property bytracing the assets on hand during themarriage back to property that, because of itstime and manner of acquisition, is separate incharacter. Cockerham v. Cockerham, 527S.W.2d 162, 167 (Tex. 1975).

In Legrand-Brock v. Brock, 246 S.W.3d 318,321(Tex. App.--Beaumont 2008, pet. denied), thecourt said:

Generally, when a spouse ownsseparate-property stock in a dissolvingcorporation and receives distributions ofliquidated assets, the distributions remain thestockholder's separate property. . . . Thecharacter of property is not altered by thesale, substitution, or exchange of theproperty; separate property that merelyundergoes mutations or changes in formremains separate property.

Thus, a liquidation of an interest in a business is aform of mutation.

Despite the current popularity of tracing separateproperty using line-item-tracing based on thecommunity-out-first rule, there is no case sayingthat this is the only way to trace separate property.As noted in Gibson v. Gibson, 614 S.W.2d 487,489 (Tex. Civ. App.--Tyler 1981, no writ):

Courts dealing with the tracing of separateproperty commingled with community fundshave required varying degrees of particularityin identifying separate property. See 6 St.Mary's L. J. 234 (1974). Many Texas caseshave been strict in demanding a "dollar fordollar" accounting of separate funds used topurchase an asset, the ownership of which isin dispute. e.g., Schmeltz v. Gary, 49 Tex. 49(1878); Latham v. Allison, supra; West v.Austin National Bank, 427 S.W.2d 906 (Tex.Civ. App.-San Antonio 1968, writ ref'dn.r.e.); Stanley v. Stanley, 294 S.W.2d 132(Tex. Civ. App.-Amarillo 1956, writ ref'd n.r. e., cert. den'd, 354 U.S. 910, 77 S.Ct. 1296,1 L.Ed.2d 1428).

Certain other courts have been more lenientin their treatment of the tracing problem. Thephilosophy prompting these decisions wasexpressed in Farrow v. Farrow, 238 S.W.2d255, 257 (Tex. Civ. App.-Austin 1951, nowrit): "One dollar has the same value asanother and under the law there can be nocommingling by the mixing of dollars whenthe number owned by the claimant isknown." In Sibley v. Sibley, 286 S.W.2d 657(Tex. Civ. App.-Dallas 1955, writ dism'd),the court allowed appellee to trace herseparate property through a series oftransactions, including the deposit of theproceeds from a sale of her separate realtyinto a joint account containing a substantialamount of community funds and separatefunds belonging to the other spouse.According to Sibley, community funds willbe presumed to have been drawn out beforeseparate funds from a joint bank account.

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In still other cases, spouses have beenpermitted to distinguish their separate fundscommingled in a bank account withcommunity money by proving thatcommunity withdrawals, e. g. for livingexpenses, equaled or exceeded communitydeposits. For example, in Coggin v. Coggin,204 S.W.2d 47, 52 (Tex. Civ. App.--Amarillo1947, no writ), evidence was presented toshow that income from the wife's propertytotaled approximately $1,000 per year, whilefamily living expenses were $200-$500monthly. The court found that suchcommunity funds could not have been usedto pay for the property in question since theyhad already been depleted in paying for theliving expenses. See DePuy v. DePuy, 483S.W.2d 883, 888 (Tex. Civ. App.--CorpusChristi 1972, no writ).

A close analysis of Texas case law demonstratesthat Texas courts have recognized a variety ofapproaches to proving a claim of separate property.

The court in Coggin v. Coggin, 204 S.W.2d 47, 55(Tex. Civ. App.--Amarillo 1947, no writ),commented:

[W]here the terms community property andseparate property have been adequatelydefined, it is not necessary to point outspecifically in special requested charges thevarious fact situations whereby separateproperty may become community property.

Coggin supports an argument that it is not the roleof the court to detail to the fact-finder specifictracing methods that can and cannot be used. Thissuggests that whether a tracing approach is clearand convincing is a question for the fact-finder todecide.

In keeping with general rules of litigation, unlessseparate property identity is proven conclusively(i.e., as a matter of law), or unless there is not morethan a scintilla of evidence to support a separateproperty claim (i.e., legally insufficient evidence),

the character of property is a fact issue to bedetermined by the finder of fact based upon a clearand convincing evidence standard.

In a divorce case, determining the character ofproperty involves not only investigating the facts,but also selecting the law to apply to the facts.Thus, a tracing case can involve disputes over boththe facts and what law should be applied to thosefacts. However, some aspects of tracingmethodologies are not mentioned in case law, andtheir use is a matter of accounting practices tracingconventions, or logic, or opinion, not law.

III. PRESUMPTIONS AND BURDEN OFPROOF. In many tracing cases, the fight over thelaw has to do with the use of presumptionsproposed by a party to support his/her position.The role of presumptions in trying and appealingcases is a complicated area of the law. An excerptdealing with presumptions, from ProfessorMcCormicks treatise on evidence law, is attachedto the back of this article.

A. THE COMMUNITY PRESUMPTION.The starting point law to apply to a tracing case inTexas is the presumption of community property.In Tarver v. Tarver, 394 S.W.2d 780, 783 (Tex.1965):

The plain wording of the statute [Art. 4619]creates a rebuttable presumption that allproperty possessed by a husband and wifewhen their marriage is dissolved is theircommunity property and imposes the burdenupon one asserting otherwise to prove thecontrary by satisfactory evidence. . . . Thegeneral rule is that to discharge the burdenimposed by the statute, a spouse, or oneclaiming through a spouse, must trace andclearly identify property claimed as separateproperty . . . .

Thus, in a divorce the spouse claiming aseparate property interest must trace andclearly identify the property in question.

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All property possessed by a spouse during and ondissolution of marriage is presumed to becommunity property. TEX. FAM. CODE 3.003(a).However, this presumption is rebuttable, and canbe overcome by evidence that establishes thatproperty is separate property.

B. THE BURDEN OF PERSUASION. Theburden of proof (also called the burden ofpersuasion) to be applied by the fact finder indetermining separate property is clear andconvincing evidence. TEX. FAM. CODE 2.002(b).Courts in marital property cases sometimes borrowthe definition of clear and convincing evidenceset out in Title 5 of the Family Code relating toparent-child suits: Clear and convincingevidence means the measure or degree of proofthat will produce in the mind of the trier of fact afirm belief or conviction as to the truth of theallegations sought to be established. TEX. FAM.CODE 101.007. See Huval v. Huval, 2007 WL1793771 (Tex. App.Beaumont 2007, no pet.)(memorandum opinion) (citing Section 101.007 ina tracing case).

C. THE PRESUMPTION CAN VANISH.Some courts say that the community presumptionis nullified when contrary evidence is introduced.The court of appeals in Harris v. Harris, 765S.W.2d 798, 802 (Tex. App.Houston [14th Dist.]1989, writ denied), made the following statementregarding the community presumption:

Property possessed by either spouse during oron dissolution of marriage is presumed to becommunity property. Section 5.02, Tex. Fam.Code. The party claiming property asseparate has the burden to overcome thispresumption by clear and convincingevidence. Id.; Horlock v. Horlock, 614S.W.2d 478, 480 (Tex. Civ. App.Houston[14th Dist.] 1981, writ ref'd n.r.e.). Todischarge this burden a spouse must trace andclearly identify the property claimed asseparate. Cockerham v. Cockerham, 527S.W.2d 162, 167 (Tex. 1975); McKinley v.McKinley, 496 S.W.2d 540, 543 (Tex. 1973).

If separate property and community propertyhave been so commingled as to defyresegregation and identification, the statutorypresumption prevails. Tarver v. Tarver, 394S.W.2d 780 (Tex. 1965). However, whenseparate property has not been commingledor its identity as such can be traced, thestatutory presumption is dispelled.Peaslee-Gaulbert Corp. v. Hill, 311 S.W.2d461, 463 (Tex.Civ.App.--Dallas 1958, nowrit). The presumption, which is notevidence, ceases to exist upon introductionof positive evidence to the contrary and isnot then to be weighed or treated asevidence. Empire Gas and Fuel Co. v.Muegge, 135 Tex. 520, 143 S.W.2d 763, 767(1940); Roach v. Roach, 672 S.W.2d 524,530 (Tex. App.--Amarillo 1984, no writ); Inre: Estate of Glover, 744 S.W.2d 197, 200(Tex. App.--Amarillo 1987, writ denied).Once determined, the character of theproperty is not altered by the sale, exchangeor substitution of the property. Norris v.Vaughn, 152 Tex. 491, 260 S.W.2d 676, 679(1953); Horlock v. Horlock, 533 S.W.2d 52,60 (Tex.Civ.App.--Houston [14th Dist.]1975, writ dism.). Property established to beseparate remains separate property regardlessof the fact that it may undergo any number ofmutations and changes in form. [Emphasisadded.]

Accord, Patterson v. Patterson, 1992 WL 163305,* 2 (Tex. App.--Houston [1st Dist.] 1992, no pet.)(unpublished) ([t]he presumption of communityproperty is not evidence and is nullified whenevidence is introduced contrary to thepresumption).

Given that the burden of proof (i.e., burden ofpersuasion) in a divorce ordinarily remains on theparty asserting separate property all the waythrough verdict, in what sense can it be said thatthe community presumption is nullified bycontrary evidence? The cases are not negating therole of the presumption of community as a way to

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assign the burden of proof. These cases are insteadsuggesting that the presumption of communitycarries no evidentiary weight in the face ofcontrary evidence, when the appellate court isconsidering the sufficiency of the evidence on thecharacter of property. Thus, when considering thefactual sufficiency of the evidence to support afinding of separate property, the appellate courtshould weigh evidence supporting separateproperty against evidence supporting communityproperty, and the presumption of community is notadded to the scales in making this comparison.

D. COUNTER-PRESUMPTIONS. Even theroll of assigning the burden of persuasion can betaken from the community presumption in somesituations. The introduction into evidence ofcertain facts can give rise to a presumption thatreplaces the presumption of community property,with regard to a particular issue. For example,Kahn v. Kahn, 94 Tex. 114, 58 S.W. 825, 826(1900), indicated that a deed from a third party toa spouse, which recites separate property, createsa presumption that the property is the separateproperty of that spouse. In Henry S. Miller Co. v.Evans, 452 S.W.2d 426, 431 (Tex. 1970), theSupreme Court said:

Before Miller offered evidence to show thatthe property was acquired during coverture,which would give rise to the presumption thatthis was community property, the Sheriffintroduced into evidence the deed to NancyShoaf containing the recitals to the effect thatthe land was conveyed to her as her sole andseparate estate, and that the considerationwas paid and to be paid out of her separateestate. As a result of the recitals in the deed,no presumption of community propertyexisted. By the introduction of the deedcontaining these recitals into evidence, theSheriff established a prima facie defense thatthe Amanda Street property was the separateproperty of the wife, Nancy Shoaf, and Notsubject to execution; Article 4616.

Another example is the presumption that a transferfrom a parent to a child is a gift. Blair v. Blair,1999 WL 649082, at *4 (Tex. App.--Houston [14Dist.] 1999, no pet.) (When property is deededfrom a parent to a child it is presumed that a giftwas intended). In Somer v. Bogert, 762 S.W.2d577 (Tex.1988) (per curiam), the Supreme Courtsaid:

[T]he court of appeals . . . held that apresumption of gift exists when a father- andmother-in-law place property in theirson-in-law's name, and the party seeking todisprove the presumption must prove lack ofdonative intent by clear and convincingevidence. . . . We approve the holding of thecourt of appeals that the burden of proof inrefuting the presumption of gift is by clearand convincing evidence.

Other countervailing presumptions were set out inDessommes v. Dessommes, 505 S.W.2d 673, 679(Tex. App.--Dallas 1973, writ ref'd n.r.e.):

The burden of proof is not necessarilydetermined by which party happens to be inthe position of plaintiff. It may rest on broadconsiderations of fairness, convenience andpolicy, 9 J. Wigmore, Evidence 2486 at275 (3d ed. 1940); 1 C. McCormick & R.Ray, Texas Law of Evidence 43 at 40 (2ded. 1956). One of the recognized principles indetermining the burden is to place it on theparty having peculiar knowledge of the factsto be proved. W. A. Ryan & Co. v. M.K. & T.Ry., 65 Tex. 13 (1885); Beaumont, S.L. & W.R y . v . M y r i c k , 2 0 8 S . W .935(Tex.Civ.App.-Beaumont 1919, writdism'd); Rowe v. Colorado & S.R., 205 S.W.731 (Tex.Civ.App.-Amarillo 1918, writref'd); 9 J. Wigmore, Supra at 275; 1 C.McCormick & R. Ray, Supra at 39. Thisprinciple is consistent with authoritiesholding that one who has innocentlycommingled another's goods or funds withhis own does not gain anything by thecommingling, but has the burden of

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establishing what portion is his. Wright v.Ellwood Ivins Tube Co., 128 F. 462 (C.C.E.D.Pa.1904); Claflin v. Continental JerseyWorks, 85 Ga. 27, 11 S.E. 721 (1890); In reThompson, 164 Iowa 20, 145 N.W. 76(1914). A fair general rule deducible from theabove authorities is that if the parties areshown to have been the equal owners of afund at a certain time, and one of them isshown to have made additions to that fund inan undetermined amount, the party who madethe additions should have the burden to showthe amount of the additions.

Another countervailing presumption was set out inGiesler v. Giesler, 309 S.W.2d 949, 950 (Tex. Civ.App.San Antonio 1958, no writ):

We think, in view of the fact that appellantmanaged the community estate and in thatcapacity personally was guilty ofcommingling said community funds into hiswife's separate bank account, that it would beinequitable to permit him to profit by suchaction by applying the strict doctrine ofcommingling.

The Texas Family Law Practice Manual formpremarital agreement (Form 48-3) undertakes toreplace the community presumption in someinstances. See Section III.E below.

E. INSTRUCTING THE JURY. A jury shouldnot be instructed on the existence of apresumption. Glover v. Henry, 749 S.W.2d 502,504 (Tex. App.--Eastland 1988, no writ) (Thesole effect of a presumption is to fix the burden ofproducing evidence. . . . An instruction on apresumption is improper.). Instead, thepresumption of community should be used toallocate the burden of proof. The Pattern JuryCharges (Family) are constructed in this way. ThePJC says that [n]o instruction should be given onthe presumption, contained in Tex. Fam. Code 3.003, that property possessed by either spouseduring or on dissolution of marriage is presumed tobe community property. The sole purpose of a

presumption is to fix the burden of producingevidence. PJC 202.1 Comment. The PJC does nottell the jury about the presumption of community.Instead it tells the jury that a finding of separateproperty must be based on clear and convincingevidence, and then asks whether the jury findscertain property to be separate property. PJC202.11. This reflects the role of the communitypresumption as a way to assign the burden ofproof, and not as evidence to be weighed by thetrier of fact.

A counter-presumption would operate the sameway. For example, in the event of a transfer froma parent to a child, the jury would be askedsomething like this: Was a gift of property Xintended? Answer It was intended unless youfind from clear and convincing evidence that it wasnot intended as a gift. (The requirement of provinga negative makes the wording tricky.)

F. ALTERING THE BURDEN OF PROOFBY AGREEMENT. Premarital and post-maritalagreements can change the rules of characterizingseparate and community property. The parties canmake community property separate, separateproperty community, and at least in premaritalagreements can waive reimbursement andeconomic contribution claims.

The Texas Family Law Practice Manual premaritalagreement form (Form 63-3) attempts to alterpresumptions and methods of proving separateproperty.

Paragraph 17.3 says that property held in aspouse's individual name is presumed to be thatspouse's separate property:

17.3 Presumption of Separate Property

Any property held in [name of party A]sindividual name is presumed to be theseparate property of [name of party A]. Anyproperty held in [name of party B]sindividual name is presumed to be the

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separate property of [name of party B]. Anyproperty or liability inadvertently omittedfrom the schedules attached to this agreementis the separate property or liability of theparty to whom it belongs or by whom it wasincurred.

Paragraph 3.4 negates any presumptive ownershipresulting from commingling:

3.4 No Commingling Intended

Neither party intends to commingle his orher separate property with the separateproperty of the other party, except whenintentionally done in a joint financialaccount, and neither party may claim aninterest in any separate property of the otherparty as a result of such commingling, exceptas provided in this agreement.

Paragraph 3.9 lists facts that cannot be consideredevidence of intent to create community (why notpreclude the items as "evidence of communityproperty"?):

3.9 Certain Events Not Evidence ofCommunity Property

The following events may not, under anycircumstances, be considered evidence of anyintention to create community property:

1. the filing of joint tax returns;2. the taking of title to property,

whether real or personal, in joint tenancyor in any other joint or common form;

3. the designation of one party by theother party as a beneficiary of his or herestate or as trustee or any other form offiduciary;

4. the combining or mixing by oneparty of his or her separate funds orproperty with the separate funds orproperty of the other party, including thepledging of joint or separate credit for thebenefit of the other partys separate estate;

5. any oral statement by either party;6. any written statement by eitherparty, other than a written agreementsigned by both parties to convertseparate property to communityproperty pursuant to the Texas FamilyCode;7. the payment from the funds ofeither party for any obligations,including but not limited to thepayment of mortgages, interest, realproper ty taxes , r epa i r s , orimprovements on a separately or jointlyheld residence; and8. the joint occupation of aseparately owned residence, eventhough designated as a homestead.

The provisions of this section 3.9 are notcomprehensive.

Paragraph 7.1 says that jointly-held property "maynot be deemed to be community property," and thatabsent records of each party's contribution (that is,oral testimony has no probative weight), ownershipis conclusively presumed to be 50-50.

The form premarital agreement, para. 12.1,provides terms on how you can and cannot provea gift.

12.1 Gifts* * *To remove any uncertainty about the issue ofinterspousal gifts, the parties agree that:

1. Gifts of wearing apparel, jewelry, andathletic equipment may be established byparol testimony if the item or property iscustomarily used and enjoyed exclusively bythe party claiming it as a gift to him or her;

2. Gifts of other items of personalproperty not covered by item 1. above, suchas furnishings, artwork, cash, and collections,must be established by clear and convincingevidence; and

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3. Any property that is held by title, as ina deed, in a certificate, or by account name,may not be effectively transferred to the partyclaiming it as a gift unless, in fact, the deed,certificate, or account is transferred by nameto the party claiming the gift.

The author could find no case where an appellatecourt ruled on a contractually-altered burden ofproof. The few law review articles on point supportthe right to contract.

IV. THE WEIGHT/SUFFICIENCY OF THEEVIDENCE. The weight of the evidence shouldbe viewed from two perspectives: the perspectiveof the trial court and the perspective of theappellate court.

A. THE TRIAL COURTS PERSPECTIVE.In the trial court, the weight of the evidence isviewed with respect to the burden of proof and theburden of persuasion. The burden of proof is theduty of a party to produce evidence in support of aclaim or defense, failing which the claim ordefense is unsuccessful. The burden of persuasionis the degree of proof necessary to persuade thefact finder to find in favor of a claim or defense. Inmarital property cases, the initial burden of proofis established by Texas Family Code Section3.003(a), which says that property possessed byeither spouse during or on dissolution of marriageis presumed to be community property. The burdenof persuasion is set by Texas Family Code Section3.003(b), which says that the degree of proofnecessary to prove separate property is clear andconvincing evidence.

1. No Evidence and Conclusive Evidence.There are two extremes of the weight of theevidence on separate property: (i) when there isno evidence to support a claim of separateproperty, and (ii) when the evidence of separateproperty is conclusive. In either situation, thereis no fact issue to submit to the fact finder and thetrial court should decide the question as a matter oflaw.

a. Obtaining a No Evidence Ruling. A noevidence ruling is appropriate when reasonableminds could not differ on the question of separateproperty. This occurs when the party with theburden of proof on separate property fails topresent evidence in support of that claim, or whenthe evidence presented is so weak that it does notamount to more than a scintilla. A no evidenceruling can be obtained in advance of trial bymotion for summary judgment, either a traditionalmotion (supported by evidence) or a no evidencemotion (which casts the burden on the respondentto produce some evidence of separate property). Ano evidence ruling can be obtained during trialby motion for judgment (in a non-jury case) or bya motion for directed verdict or objection to thejury question on separate property (in a jury case).A no evidence ruling can be obtained after a jurytrial by a motion for judgment non obstanteverdicto. A no evidence ruling can also beobtained after judgment by motion for new trial,but this is not advisable because the only remedyin that instance is a new trial on the separateproperty question, whereas the movant is actuallyentitled to rendition of judgment against theseparate property claim.

b. Obtaining a Conclusive EvidenceRuling. A conclusive evidence ruling isappropriate when the evidence supporting aseparate property claim is so strong that it cannotreasonably be disregarded. This also occurs whenthe evidence gives rise to a counter-presumption ofseparate property, and there is no evidence tosupport a finding of community property. Aconclusive evidence ruling can be obtained inadvance of trial by motion for summary judgment.A conclusive evidence ruling can be obtainedduring trial by motion for judgment (in a non-jurycase) or by a motion for directed verdict orobjection to the jury question on the character ofthe property (in a jury case). A conclusiveevidence ruling can be obtained after a jury trialby a motion for judgment non obstante verdicto. Aconclusive evidence ruling can also be obtainedafter judgment by motion for new trial, but this isnot advisable because the only remedy ion that

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instance is a new trial on the separate propertyquestion, whereas the movant is actually entitled torendition of judgment in favor of separateproperty.

2. Where A Fact Issue Is Presented. When theevidence supporting a separate property claim fitsneither extreme (i.e., it is more than no evidencebut less than conclusive evidence), a fact issue ispresented for the fact finder to resolve at theconclusion of the trial. A summary judgment is notappropriate; a directed verdict is not appropriate; amotion for JNOV is not appropriate. When a factissue is presented as to a separate property claim,the fact finder should find for community propertyunless the separate property character is proven byclear and convincing evidence. An exception existswhere the evidence gives rise to a counter-presumption of separate property. In that situation,the fact finder should find in favor of separateproperty unless community property character isestablished by a preponderance of the evidence.

3. Post-Verdict and Post-Trial Motions.Where the trial court is the fact finder, it isgenerally assumed that the trial courts decision onthe characterization question does not need to bereexamined by the trial judge after trial. However,where the fact finder was a jury, the party losingthe jurys verdict can ask the trial court to revisitthe weight of the evidence. If there is noevidence or conclusive evidence to support theseparate property claim, the losing party can askthe court to disregard the jurys verdict and rendera judgment notwithstanding the jurys verdict. Ifthe evidence is factually insufficient to supportthe jurys verdict of separate property, or if thejury found community property and the finding isagainst the great weight and preponderance ofthe evidence, the trial court can grant a new trial,and make the parties retry the characterizationquestion all over again. These concepts offactually insufficient evidence and against thegreat weight and preponderance of the evidenceare discussed in the next subsection of this Article.

B. T H E A P P E L L A T E CO U R T SPERSPECTIVE. The appellate court does notretry the character of marital property. It evaluatesthe decision made by the trial court or fact finder,to be sure that the decision falls within acceptableparameters. If the decision falls within acceptableparameters, it must be affirmed by the appellatecourt. If the decision falls outside of acceptableparameters, then the appellate court must eitherrender the correct fact finding or it must remandthe case for a new trial on the character of theproperty, depending on the strength (or weakness)of the evidence.

1. Evidence At The Extremes. Where there isno evidence to support a fact finding, theevidence is said to be legally insufficient. In thecase of a separate property claim, where theevidence is legally insufficient, the trial courtshould have ruled as a matter of law that theproperty was community property. Where the trialcourt submitted the question to the fact finderwhich returned a finding of separate property, theappellate court should reverse the finding andrender judgment that the asset is communityproperty. Where the evidence is so strong that theseparate property character cannot reasonable bydisputed, the evidence is said to be conclusiveand the trial court should have ruled as a matter oflaw that the property was separate property. If itdid not, the appellate court should reverse thefinding of community property and renderjudgment that the asset is separate property.

2. Evidence Between the Two Extremes. If theevidence is neither legally insufficient norconclusive, then the issue is considered to be aquestion of fact. There are two additionalparameters that apply. If the evidence of separateproperty is so weak that it is factuallyinsufficient to support the finding, the findingmust be reversed by the appellate court and theissue remanded for a new trial. If the evidence is sostrong that the failure to find separate property isagainst the great weight and preponderance of theevidence, then the finding must be reversed and

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the issue remanded for a new trial. This is the sameanalysis to be used by the trial court in decidingwhether to grant a new trial.

3. Disposition of the Case on Appeal. A claimof no evidence or conclusive evidence isconsidered on appeal to be a claim of the legalsufficiency of the evidence. A claim of factuallyinsufficient evidence or against the great weightand preponderance of the evidence is consideredon appeal to be a claim of factual sufficiency ofthe evidence. The approach an appellate courtshould take to evaluating a legal sufficiency claimis different from the approach to evaluating afactual sufficiency claim. Consult an article onappeals for further discussion of this point. For thepresent purposes, it is sufficient to: (i) correlateno evidence and conclusive evidence in thetrial court with legal sufficiency on appeal, andto associate legal sufficiency with the appellatedisposition of reversal and rendition; and (ii)correlate factually insufficient evidence and thegreat weight and preponderance of the evidencein the trial court with factual sufficiency onappeal, and associate factual sufficiency with theappellate disposition of reversal and remand.

C. THE CHART. The Author has constructeda chart showing the coorelations between variousdegrees of evidence in the trial court and onappeal. See page 46 below.

V. MANAGEMENT RIGHTS. An issue thathas not been adequately explored in the context ofmarital property tracing cases is a spousesmanagement rights.

TEX. FAM. CODE 3.101 provides:

Each spouse has the sole management,control, and disposition of that spouse'sseparate property.

TEX. FAM. CODE 3.102(a) provides:

(a) During marriage, each spouse has the solemanagement, control, and disposition of the

community property that the spouse wouldhave owned if single, including:

(1) personal earnings;(2) revenue from separateproperty;(3) recoveries for personalinjuries; and(4) the increase and mutations of, andthe revenue from, all property subjectto the spouse's sole management,control, and disposition.

Does a spouse have the right, in the exercise ofhis/her management powers, to decide to expendseparate property for some purposes andcommunity property for other purposes? Or dotracing rules, mechanically applied after the fact,negate that right? To be effective, does themanagement intent need to exist at the time of thetransaction, as opposed to the time of divorce?

VI. THE MUTATION PRINCIPLE. The coreprinciple for tracing is the concept of mutation, andthe tenet that separate property does not lose itscharacter because it changes in form. Most of theissues regarding tracing techniques have to do withthe way you follow the wealth as it changes form.Some advocate that you must precisely follow theflow of wealth as it mutates in form, and if youlose track of that precise flow then the separatewealth become community property. Texas courtshave, in cases stretching over many years, reflecteda different view: if they know the separate propertyis in there somewhere, they have alloweddifferent methods of showing where that wealth is,or how much that wealth is.

A. ASSET EXCHANGE. In a sense, nearly allacquisitions (other than gift or inheritance) areasset exchange transactions, where one thing isswapped for another, or something is paid topurchase another thing, or where someonepromises to pay something in the future inconnection with buying something. The sameapplies when your perspective is the asset sold.Trading in an automobile in connection with

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buying a new one is an asset exchange. But then sois a corporation transferring some or all of itsassets to another entity in exchange for anownership interest in the other entity. Adistribution in redemption or liquidation ofcorporate stock is likewise a mutation.

B. ENTITY CHANGE. Texas law now permitscorporations to convert into partnerships, andpartnerships to convert into corporations, anddifferent entities to convert into limited liabilitycompanies, etc. This procedure replaced a morecumbersome process where a corporation wasconverted into a partnership by creating a newentity and merging the two, or by creating the newentity and then conveying all assets of thecorporation to the partnership, with shareholdersbecoming partners in the partnership. It is valid toask whether the character of a new businessformed from an old business should depend uponthe exact manner of converting the business fromone form to another, or whether the concept ofmutation should apply, regardless of the details.

In Horlock v. Horlock, 533 S.W.2d 52, 59 (Tex.Civ. App.Houston [14th Dist.] 1975, writ dism'd),the husband owned stock in a corporation prior tomarriage. During marriage, that corporationmerged with two other corporations to create yetanother corporation. The court found that the newstock was the husband's separate property, despitethe fact that he and the other owners of the oldcorporation put $200,000 into the merger.

One case affirmed a trial courts finding that, in abusiness reorganization, the transfer of an assetfrom a partnership to a corporation was aconstructive distribution to the married partner. SeeLifshutz v. Lifshutz, 199 S.W.2d 9, 27 (Tex.App.San Antonio 2006, no pet.) ("Lifshutz II").The trial court found this to be a "non-liquidatingcommunity distribution" from the partnership, andheld the stock of the subsidiary to be communityproperty distributed to the husband. Id. at 24. Afteran extensive analysis of the facts and citation toMarshall v. Marshall, 735 S.W. 2d 587, 594 (Tex.

App.Dallas 1987, writ ref'd n.r.e.), a 2-to-1majority of the court of appeals wrote:

Accordingly, since partnership property doesnot retain a separate character, distributionsfrom the partnership are consideredcommunity property, regardless of whetherthe distribution is of income or of an asset.

The court recognized that a Louisiana appellatecourt had "drawn a distinction betweendistributions of income and distributions of acapital asset," but commented the Louisiana courtdid not analyze the effect of the entity theory ofpartnerships and further noted that in the presentcase, "the accumulated profits of [the partnership]exceeded the aggregate distributions, whichincluded the [subsidiary] stock distribution." Id. at27 n. 4.

VI. SEPARATE CREDIT. Under Texas law,"debts contracted during marriage are presumed tobe on the credit of the community and thus arejoint community obligations, unless it is shown thecreditor agreed to look solely to the separate estateof the contracting spouse for satisfaction."Cockerham v. Cockerham, 527 S.W.2d 162, 171(Tex. 1975) (footnote omitted). The mere intent ofthe spouses does not control whether the credit iscommunity or separate. Gleich v. Bongio, 128 Tex.606, 99 S.W.2d 881 (1937). Some courts ofappeals have taken a liberal view of whatconstitutes proof of an agreement by the creditor tolook solely to the borrowing spouse's separateestate for repayment. For example, in Brazosport:Bank of Texas v. Robertson, 616 S.W.2d 363, 366(Tex. Civ. App.--Houston [14th Dist.] 1981, nowrit), the court held that the bank's loaning moneyto the wife over the husband's objection, where thenote was signed by the wife alone and the title tothe automobile was taken in the wife's name alone,constituted an agreement by the lender to look tothe wife alone for satisfaction of the debt. InHolloway v. Holloway, 671 S.W.2d 51, 57 (Tex.App.--Dallas 1983, writ dism'd), an impliedagreement on the part of a creditor to look solely tothe husband's separate estate was inferred from the

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fact that the loan proceeds were deposited into anaccount designated as the husband's separateproperty account, and the fact that the husbandalone signed the loan papers "Pat S. Holloway,Separate Property," and the fact that only thehusband's separate property was used a collateral.

The case of Edsall v. Edsall, 240 S.W.2d 424, 428(Tex. Civ. App.--Eastland 1951, no writ), involvedan acquisition where part of the purchase price waspaid in two installments, separated over time. Onespouse claimed that separate property was used forboth installments. The other spouse claimed thatthe second installment was a instance ofcommunity credit. The appellate court said:

It is to be noted that such 80 acre tract wasacquired by appellee about one year after hismarriage. It is undisputed that at the time itwas acquired he delivered to his son the 11head of cattle valued at $660.00 and thatthese cows were his separate property. It islikewise undisputed that the 8 cows deliveredtwo months after the date of the deed werealso appellee's separate property. Thisconstituted a total of $1,100.00 of theconsideration for such tract which came fromappellee's separate estate. This evidence, inour opinion, raised a question of fact as towhether the parties intended at the time of theconveyance that such portion of the totalconsideration as was later satisfied by the 8cows should be paid from appellee's separateestate. If such was the intention, the sameproportion of the tract purchased therebybecome separate property. It is undisputedthat such portion was so paid from theseparate estate. In our opinion the court wasjustified under these facts in holding thatsuch 80 acre tract was 11/16ths appellee'sseparate property and 5/16ths communityproperty.

VII. COMMINGLING. Commingling is themixing of separate and community property assets,often money. In Smith v. Bailey, 66 Tex. 553, 554-

55, 1 S.W. 627, 628 (Tex. 1886), the SupremeCourt said:

Mr. and Mrs. Bailey were married in 1877 or1878. The goods in her store at that timewere her separate property. She did businesswith them from that time on, selling them inthe usual course of trade, and with theproceeds of the goods replenished her stock.From the date of her marriage down to thetime when the witness Meeks took charge ofthe store, a period of about three years, wehave not one particle of testimony to showhow much of the profits of the businessentered into the purchase of goods to keep upthe stock. The stock must have gone throughmany mutations before passing into Meeks'charge. Separate property and profits hadbeen mingled at various times and in variedproportions in the purchase of this andpreceding stocks. The presumed communitycharacter of this stock was not disproved,and, under the evidence, was subject to thehusband's debts.

The Supreme Court of Texas said this aboutcommingling, in Tarver v. Tarver, 394 S.W.2d780, 783 (Tex. 1965):

The plain wording of the statute [Art. 4619]creates a rebuttable presumption that allproperty possessed by a husband and wifewhen their marriage is dissolved is theircommunity property and imposes the burdenupon one asserting otherwise to prove thecontrary by satisfactory evidence. . . . Thegeneral rule is that to discharge the burdenimposed by the statute, a spouse, or oneclaiming through a spouse, must trace andclearly identify property claimed as separateproperty, Schmeltz v. Garey, 49 Tex. 49, 61(1878); Chapman v. Allen, 15 Tex. 278, 283(1855); . . . and that when the evidence showsthat separate and community property havebeen so commingled as to defy resegregationand identification, the burden is notdischarged and the statutory presumption that

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the entire mass is community controls itsdisposition. Hodge v. Ellis, 154 Tex. 341,277 S.W.2d 900, 907 (1955). . . .

The Supreme Court reiterated in McKinley v.McKinley, 496 S.W.2d 540, 543 (Tex. 1973), thatwhen the evidence shows that separate andcommunity property have been so commingled asto defy resegregation and identification, the burdenis not discharged and the statutory presumptionprevails.

In Martin v. Martin, 759 S.W.2d 463, 466 (Tex.App.--Houston [1st Dist.] 1988, no writ), three lotswere sold, two that were separate property and onethat was community property. The lots were soldfor a combined price. The appellate court held that,absent proof of the sales price for each lot, allproceeds were deemed to be community property.

In Munoz v. Munoz, 2003 WL 22977487, *5 (Tex.App.--El Paso 2003, no pet.) (unpublished), theappellate court considered a commingledpersonal injury recovery. The court said:

[A]fter reviewing the record, we find a lackof clear and convincing evidence to rebut thepresumption that some portion of thesettlement funds were attributable toAppellee's lost earnings and lost earningcapacity which are community estate assets.Since Appellee did not prove what amount ofthe settlement proceeds were separate orcommunity property, a reasonable trier offact could not have formed a firm belief orconviction that the net recovery from thesettlement was entirely Appellee's separateproperty. . . . When some portion of asettlement may be for lost wages or lostearning capacity, the spouse receiving thesettlement has the burden to show that noneof the funds constitute payment for lostwages or lost earning capacity duringmarriage. . . . In the absence of suchevidence, the entire settlement proceeds areproperly characterized as communityproperty. . . . Therefore, the trial court erred

in its characterization of the settlement fundas Appellee's separate property. [Citationsomitted]

Schneider v. Schneider, 2004 WL 254247, *2(Tex. App.--Fort Worth 2004, pet. struck)(unpublished), is an odd case where spouses werefighting over a dog (Lucky) purchased prior tomarriage. The court said:

Neither party presented any evidence toclarify the source of funds used to purchaseLucky. However, it is undisputed thatappellee purchased Lucky prior to themarriage. Under the family code, a spouse'sseparate property consists of the propertyowned or claimed by the spouse beforemarriage. . . . However, in this case theparties lived together prior to marriage, andcommingled their funds in a joint bankaccount. Both appellant and appellee testifiedthat the funds used to purchase Lucky werethe commingled funds from the joint bankaccount. Therefore, because neither of theparties established by clear and convincingevidence that Lucky was purchased with theseparate property funds of either appellant orappellee, the most the evidence shows is thatthey own Lucky as tenants in common. . . . Thus, the trial court erred in confirmingLucky as appellee's separate property.[Citations and footnote omitted]

VIII. METHODS OF PROOF.

A. TESTIMONY OF A SPOUSE. Differentappellate courts have said different things aboutthe importance of a spouses testimony of separateproperty. The cases as a whole usually (but notalways) support the view that the uncorroboratedtestimony of a spouse (i) is more than a scintilla ofevidence to support a finding of separate property,but (ii) is not so overwhelming as to cause theappellate court to overturn a negative finding onseparate property.

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Some of the tracing cases commenting on theweight to be given to a spouses testimony involvepurely conclusory statements by a spouseregarding character of property. Some of the casesinvolve the spouses testimony alone withoutcorroborating evidence. Some of the cases involvetestimony by a spouse that is corroborated by otherinformation. This makes it hard to discern auniform principle regarding a spouses testimonyregarding separate property. It does appear thatsome of the appellate cases that reverse trial courtfindings of separate property have not scrupulouslyobserved the dictates of appellate review of thesufficiency of the evidence. And some may havebeen inattentive to the proper disposition of theappeal (i.e. reverse and remand) when sustaining afactual sufficiency point.

The Supreme Court has said that the testimony ofan interested witness can establish a fact as amatter of law (a higher standard than by clear andconvincing evidence):

It is the general rule that the testimony of aninterested witness, such as a party to the suit,though not contradicted, does no more thanraise a fact issue to be determined by thejury. But there is an exception to this rule,which is that where the testimony of aninterested witness is not contradicted by anyother witness, or attendant circumstances,and the same is clear, direct and positive, andfree from contradiction, inaccuracies, andcircumstances tending to cast suspicionthereon, it is taken as true, as a matter of law.

Ragsdale v. Progressive Voters League, 801S.W.2d 880, 882 (Tex. 1990). The court went on tosay:

[W]e do not mean to imply that in every casewhen uncontradicted testimony is offered itmandates an award of the amount claimed.For example, even though the evidence mightbe uncontradicted, if it is unreasonable,incredible, or its belief is questionable, then

such evidence would only raise a fact issue tobe determined by the trier of fact.

Id. at 882.

The standard set out by the Supreme Court fortestimony of an interested witness in civil casesgenerally precludes a rule that the uncorroboratedtestimony of a spouse is legally insufficient tosupport a finding of separate property. See Sheikhv. Sheikh, 2007 WL 3227683, *7 (Tex. App.--Houston [1st Dist.] 2007, no pet.) (Wasim'sposition--that an interested witness'suncorroborated and contradicted testimony is noevidence, rather than its being just some evidencethat raises a fact issue--runs afoul of decades ofcase law that is consistently to the contrary);Kirtley v. Kirtley, 417 S.W.2d 847, 853 (Tex. Civ.App.--Texarkana 1967, writ dism'd w.o.j.) (adivorce property division case, where the courtsaid: "[g]enerally the testimony of an interestedparty, when not corroborated, does notconclusively establish a fact even whenuncontradicted, but only raises an issue of fact fora jury").

The following cases upheld tracing of separateproperty assets through various accounts eventhough, in some instances some account statementswere missing, and in other instances no accountstatements at all were offered into evidence: Estateof Hanau v. Hanau, 730 S.W.2d 664, 666-67 (Tex.1987); Carter v. Carter, 736 S.W.2d 775, 777-80(Tex. App.Houston [14th Dist.] 1987, no writ);Holloway v. Holloway, 671 S.W.2d 51 (Tex.App.Dallas 1983, writ dismd); Huval v. Huval,2007 WL 1793771 (Tex. App.Beaumont 2007, nopet.); Newland v. Newland, 529 S.W.2d 105,107-08 (Tex. Civ. App.--Fort Worth 1975, nowrit); Peterson v. Peterson, 595 S.W.2d 889, 892(Tex. Civ. App.--Austin 1980, writ ref'd n.r.e.);Welder v. Welder, 794 S.W.2d 420, 424-25 (Tex.App.--Corpus Christi 1990, no writ); and Zagorskiv. Zagorski, 116 S.W.3d 309, 316-17 (Tex.App.--Houston [14 Dist.] 2003, pet. denied). InHolloway, the court said: "We know of noauthority holding that a witness is incompetent to

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testify concerning the source of funds in a bankaccount without producing bank records of thedeposits.

In Celso v. Celso, 864 S.W.2d 652, 654-55 (Tex.App.--Tyler 1993, no writ), the appellate courtreversed a trial courts refusal to find separateproperty, as follows:

The relatively short record shows that Briantestified to the following facts. Before themarriage, Brian purchased from his fatherCelso's Dry Cleaners. After Brian andKimberly were married, the business wassold for $16,000. The couple then moved toSpringfield, Missouri, where they purchaseda house with the proceeds from the sale of thedry cleaner business and approximately$13,000 from a CD purchased by Bryan priorto the marriage from a New York bank. Thecouple then sold their house and moved toTyler, Texas, where the proceeds of the salewere placed into a CD with First NationalBank of Winnsboro. The Tyler CD wasworth approximately $25,000, half of whichwas withdrawn by Kimberly immediatelyprior to Brian's filing for divorce. TheSpringfield house was deeded to Brian andKimberly Celso and the proceeds from thesale were paid via check to Brian andKimberly.

Kimberly did not dispute any of Brian'stestimony. She added, however, that theTyler CD was purchased in both their namesand both spouses had the authority towithdraw funds from the CD.

The court concluded that the house purchasedby the parties in Springfield, Missouri duringtheir marriage was the community propertyof the parties. Brian testified that the housewas purchased with the funds acquired beforethe marriage: the proceeds from the sale ofthe dry cleaners and from the New York CD.Kimberly testified that the purchase price ofthe house was approximately $24,000.

Significantly, Kimberly affirmed that onlyBrian's separate property assets were used tobuy the Springfield house, as evidenced bythe following exchange:

Q: Do you know approximately how muchmoney he paid for the house?

A: About twenty-four thousand, I think.

Q: Did any of that money come from anyproperty that you owned?

A: No.

Q: In regards to the house, all the money wasobtained from Brian?

A: Mm-hmm.

The evidence is uncontroverted that the solesource of purchase money to buy theSpringfield house was from Brian's separateproperty assets. Had Brian intended a gift toKimberly of the house, then her interestwould have been her separate property, notcommunity property as the court found. . . . Nevertheless, we note that there was noevidence that Brian intended a gift of hisseparate property assets to Kimberly whenthe house was purchased or sold.Furthermore, when separate property isconveyed and both spouses join in theinstrument granting the property, theconveyance, without more, is insufficient tochange the character of the property or theproceeds. . . . The evidence was clear andconvincing that the funds used to purchasethe Springfield house were traced to Brian'sseparate assets. The trial court, therefore,erred in concluding that the Springfield,Missouri house was the couple's communityproperty. The evidence does not support thecourt's conclusion that the Springfield housewas the couple's community property.

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The evidence is likewise uncontroverted thatthe proceeds of the sale of the Springfieldhouse were deposited into a Tyler certificateof deposit in the names of Brian andKimberly Celso. Kimberly's testimonyaffirms that the proceeds, in the form of acheck payable to Brian and Kimberly Celso,were directly deposited into the FirstNational Bank of Winnsboro without anycommingling with community funds. Again,there was no evidence that Brian made a giftto Kimberly of his separate assets. The merefact that the proceeds of the sale were placedin a joint account does not change thecharacterization of the separate propertyassets. The spouse that makes a deposit to ajoint bank account of his or her separateproperty does not make a gift to the otherspouse. . . . We conclude that the Appellantproved by clear and convincing evidence thatthe funds in the First National Bank ofWinnsboro certificate of deposit were tracedto his separate property. Consequently, thetrial court abused its discretion incharacterizing the CD as communityproperty, subject to the court's just and rightequitable division. [Citations omitted.]

In Rojas v. Rojas, 2004 WL 43227, *3 (Tex.App.--Corpus Christi 2004, no pet.), the appellatecourt affirmed a finding of separate property evenwhere the spouses testimony that he used separateproperty cash was not corroborated by records.The court said:

The trial court found that appellee purchasedthe home before the marriage and he did sowith monies owned by him before marriage.Evidence supporting these findings beginswith the earnest money contract which wasentered into in August 1989, some weeksbefore the couple's September 2, 1989wedding. Although appellant is correct thatthe earnest contract is undated, the receipt forthe same five hundred dollar earnest money,introduced into evidence without objection,is dated August 18, 1989. The title policy

was issued in appellee's name alone.Appellee testified that the ten thousanddollars used to pay off the house in January1990 came from his savings. Appellee furthertestified he worked forty-three years andsaved the money he earned. I had money inthe bank that I had saved up. I made goodmoney. A cashier's check from MBank inthe same amount bore appellee's name andthat of the seller. The only tax recordsintroduced into the record showed theproperty taxed to appellee.

In Pace v. Pace, 160 S.W.3d 706 (Tex. App.--Dallas 2005, pet. denied), the appellate courtaffirmed a trial courts finding of separateproperty, as follows:

Thomas testified at trial that the earnestmoney check was paid from her separatefunds and Pace offered no evidence to thecontrary. Evidence in the trial court includedan excerpt of Pace's deposition in which headmitted the Harvest Hill house waspurchased completely with Thomas's separateproperty. This is some evidence that theearnest money check was drawn on Thomas'sseparate property account. Because theevidence is uncontroverted, it is also clearand convincing evidence that the funds usedto purchase the Harvest Hill house weretraced to Thomas's separate assets. . . . [FN2]

FN2. In fact, although not evidence, Pace'sattorney even admitted during trial that theHarvest Hill house was purchased solely withThomas's separate property.

We conclude the evidence was sufficient tosupport the trial court's finding that theHarvest Hill house was Thomas's separateproperty.

In Hilliard v. Hilliard, 725 S.W.2d 722 (Tex.App.--Dallas 1985, no writ), the appellate courtupheld a trial courts implied finding that a houseacquired by the husband during marriage was

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community property. The husband claimed that thehouse was distributed out of a separate propertycorporation during marriage and that, under theprinciple of mutation, it was his separate property. The appellate court said:

It is evident that the corporate stock wasseparate property, since it was acquiredbefore coverture. However, we do not knowif there are any community charges againstthis asset. Furthermore, we know thatdividends are community income asdistinguished from a mutation resulting froman exchange of corporate stock for cash orother assets. Because husband did notprovide the trial court with sufficientevidence that the house was a mutation,through the introduction of corporateminutes, a deed, or other evidence, the trialcourt could readily have found that thepresumption of community property was notrebutted and the house was communityproperty.

Id. at 723. The appellate court also said that"Husband's uncorroborated testimony . . . is notconclusive as to whether the house was separate orcommunity." Id.

In Hinton v. Burns, 2014 WL 2134555 *7 (Tex.App.--Dallas 2014, n.p.h.), the husband had copiesof checks representing an inheritance but no bankstatements showing the deposit of those funds in aparticular account. The checks, coupled with thehusbands testimony, was sufficient to support areimbursement claim for contributing the separateproperty inheritance to the community estate.

In Miller v. Miller, 2002 WL 31410965 (Tex.App.--Dallas 2002, pet. denied), the appellate courtoverturned a trial courts finding of separateproperty saying:

A witness may testify concerning the sourceof funds in a bank account without producingbank records of the deposits. Holloway v.Holloway, 671 S.W.2d 51, 56 (Tex. App.--

Dallas 1983, writ dism'd). Mere testimonythat property was purchased with separateproperty funds, without any tracing of thefunds, is generally insufficient to rebut thepresumption. Bahr, 980 S.W.2d at 728;McElwee v. McElwee, 911 S.W.2d 182,188(Tex. App.--Houston [1st Dist.] 1995, writdenied).

In Miller, despite rejecting the trial courts findingof separate property, due to the magic finding(that even if the asset was community property thecourt would still award it to the husband as part ofa just and right division) the appellate court foundthat the error did not cause the overall propertydivision to be an abuse of discretion, so that thecharacterization error was deemed to be harmless.

In Faram v. Gervits-Faram, 895 S.W.2d 839, 843(Tex. App.--Fort Worth 1995, no writ), thetestimony of wife, that investment accounts and T-bills were either gifts from her father or proceedsfrom sale of separate real estate was, standinguncontradicted, sufficient evidence to support afinding of separate property.

In Peterson v. Peterson, 595 S.W.2d 889, 892(Tex. Civ. App.--Austin 1980, writ ref'd n.r.e.), thehusband's testimony that realty was purchased withhis separate property cash supported a finding ofseparate property, even without evidence ofactivity in the account, where the transactionoccurred less than one month after marriage.

In Gana v. Gana, 2007 WL 1191904, *5 (Tex.App.--Houston [14th Dist.] 2007, no pet.)(memorandum opinion), the appellate courtreversed the trial courts failure to find separateproperty, saying:

[A]t the divorce hearing, Bradley submitteda proposed property division reflecting theRampart Street property as his separateproperty. He also testified that he purchasedthe property before he married Susan. Weconclude that this evidence, coupled withSusan's admission that Bradley owned the

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property before they were married, issufficient to overcome the communityproperty presumption and to demonstrateBradley's separate ownership by clear andconvincing evidence.

In Klein v. Klein, 370 S.W.2d 769 (Tex. Civ.App.--Eastland 1963, no writ), the wife testifiedthat she made a $3,000.00 separate property cashpayment for a house acquired during marriage. Shesaid that she got the money from a safety depositbox in an unnamed bank. The trial court found thatthe house was community property. The appellatecourt affirmed, saying that the wife's testimonywas not binding on the trial court. Id. at 773.

In Bahr v. Kohr, 980 S.W.2d 723, 728-29 (Tex.App.--San Antonio 1998, no pet.) a creditor'srights case, the appellate court reversed the trialcourt's finding of separate property, saying thatwife's testimony was factually insufficient toestablish certain property as her separate propertybecause the documentary evidence offered tosupport claim that property was purchased withmonies from a separate property account did notshow the date the account was opened, the runningbalance of the account, or identify the partyreceiving the wire transfer for the alleged purchaseof property at issue. The case was remanded for anew trial.

In Boyd v. Boyd, 131 S.W.3d 605 (Tex. App.FortWorth 2004, no pet.), the appellate court held theevidence factually insufficient to support the trialcourt's finding of separate property. The appellatecourt said:

When tracing separate property, it is notenough to show that separate funds couldhave been the source of a subsequent depositof funds. . . . Moreover, as a general rule,mere testimony that property was purchasedwith separate funds, without any tracing ofthe funds, is insufficient to rebut thecommunity presumption. . . . . Any doubt asto the character of property should be

resolved in favor of the community estate.[Citations omitted.]

Id. at 612. (Some might argue that the courtmisstated the standard of appellate review of thesufficiency of the evidence. On appeal, thestandard of review of the evidence favors the trialcourts findings, not the community estate. Even atthe trial court level, the fact finder is not requiredto resolve any doubt in favor of the communityestate. That would be tantamount to proof beyonda reasonable doubt.) The court went on to say:

David did not present specific tracingtestimony or corroborating testimony orevidence, similar to evidence presented incases where courts have determined that theseparate nature of the property wasestablished by clear and convincing evidence.. . . As a result, the trial court was left tosurmise or speculate, based on David'stestimony alone, that the proceeds from thesale of David's separate property were thesource of funds that created his claim foreconomic contribution.

Id. at 616. The court remanded the case for a newproperty division. Id. at 618. (The court shouldhave made it clear that it was remanding for a newtrial on the characterization issue, not just a newdivision based upon a finding of communityproperty, since it sustained a factual sufficiencypoint).

In Brehm v. Brehm, 2000 WL 330076 *3 (Tex.App.--Houston [14th Dist.] 2000, no pet.)(unpublished), the appellate court affirmed the trialcourt's finding of community property, saying:

Here, the only testimony presented by Ralfthat this CD was his separate property washis own testimony that it was purchased withproceeds from the sale of property heinherited from his uncle. Ralf testified that heinherited the property, sold it, deposited theproceeds into the joint account he shared withAngela, and purchased the CD four months

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later. Ralf introduced no bank records whichwould clearly trace the money used to buythe CD to the proceeds from his inheritance,nor did he introduce any other evidencewhich would show deposits and withdrawalsfrom the account over the four month period.. . . Because Ralf failed to provide clear andconvincing evidence that the CD was hisseparate property, we find the trial court didnot abuse its discretion in dividing it with thecommunity estate.

In Ganesan v. Vallabhaneni, 96 S.W.3d 345, 354(Tex. App.--Austin 2002, pet. denied), theappellate court affirmed the trial court's denial of aseparate property claim, holding that husband'stestimony failed to establish that certain brokerageaccounts were separate property because neitherhis testimony nor the exhibits offered "provid[ed]account numbers, statements of accounts, dates oftransfers, amounts transferred in or out, sources offunds or any semblance of asset tracing."

In Garza v. Garza, 217 S.W.3d 538, 548 (Tex.App.--San Antonio 2006, no pet.), the appellatecourt reversed the trial court because the evidencewas factually insufficient to support the trial court'sfinding of separate property. The appellate courtsaid: "As a general rule, testimony that funds areseparate property without any tracing of the fundsis insufficient to rebut the communitypresumption." The court remanded the case for anew property division based upon the correctcharacterization of the property. Id. at 551. It isnot clear whether a new trial on character wascontemplated, or just a new property division. Theformer would be the correct disposition.

In Granger v. Granger, 236 S.W.3d 852, 856 (Tex.App.--Tyler 2007, pet. denied), the court said: Asa general rule, mere testimony that property waspurchased with separate funds, without any tracingof the funds, is insufficient to rebut the communityproperty presumption. (The appellate courtactually articulated the burden of persuasion in thetrial court. The test on appeal was whether the trialcourts failure to find separate property was against

the great weight and preponderance of theevidence.)

In Holcemback v. Holcemback, 580 S.W.2d 877,879 (Tex.Civ.App.--Eastland 1979, no writ), theappellate court affirmed the trial courts finding ofcommunity property, saying:

[T]here is evidence that community fundscame into the possession of the husband priorto the conveyance. This is some evidence tosupport the finding of the trial court that thethirty acre tract was purchased withcommunity funds. The testimony of thehusband, an interested witness, that hepurchased the property with cash, kept in adresser drawer, that he owned prior to themarriage was not conclusive.

In Klein v. Klein, 370 S.W.2d 769 (Tex. Civ.App.--Eastland 1963, no writ), the appellate courtaffirmed the trial court's finding of communityproperty, where the wife testified that she made a$3,000.00 separate property cash payment for ahouse acquired during marriage. She said that shegot the money from a safety deposit box in anunnamed bank. The appellate court said that thewife's testimony was not binding. Id. at 773.

In Levesque v. Levesque, 2006 WL 47044, *1(Tex. App.--San Antonio 2006, no pet.)(memorandum opinion), the court affirmed a trialcourts finding of community property, saying: Mere testimony that property was purchased withseparate property funds, without any tracing of thefunds, is generally insufficient to rebut thepresumption.

In In re Malekzadeh, 2007 WL 1892233 (Tex.App.--Houston [14th Dist.] 2006, pet. denied), theappellate court upheld a trial courts determinationthat furniture was community property despitehusbands claim that the furniture was his separateproperty. The court said that [m]ere testimonythat property was purchased with separate propertyfunds, without any tracing of funds, is generallyinsufficient to rebut the community presumption.

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In Micklethwait v. Micklethwait, 2007 WL1852609, *6 (Tex. App.--Austin 2007, pet. denied)(memo. opinion), the court said:

Jonathan testified that he was employed as anassistant manager at a Mr. Gatti's Restaurant.At the time of trial, he had been working atthe restaurant for four years and had a 401(K)plan with $10,800 in it. From April 2002,when he started working at Mr. Gatti's, untilMarch 2004, when he married, anycontribution would be considered separateproperty. But when asked when he begancontributing to the retirement plan, heresponded, I would say maybe four or fivemonths after starting with them. Our reviewof the record does not show any otherevidence concerning the retirement plan, andJonathan does not cite us to any relevantrecord references.* * *Based upon the evidence before it, the trialcourt concluded that Jonathan failed to carryhis burden to establish that any portion of theretirement account was separate property.Given the paucity of testimony andJonathan's failure to present clear andconvincing evidence showing any portion ofthe retirement account to be his separateproperty, the trial court's allocation issupported by the evidence.

In Mock v. Mock, 216 S.W.3d 370, 373 (Tex.App.--Eastland 2006, pet. denied), the appellatecourt affirmed the trial court's finding ofcommunity property, saying:

Appellant did not produce any recordstracing the deposits to the account or thewithdrawals from the account. As a generalrule, testimony that funds are separateproperty without any tracing of the funds isinsufficient to rebut the communitypresumption. Boyd, 131 S.W.3d at 612.Appellant failed to trace the assets in theaccount with any documentary evidence. Inthe absence of such evidence, appellant did

not meet her burden of establishing by clearand convincing evidence that the balance inthe savings account was her separateproperty.

In Osorno v. Osorno, 76 S.W.3d 509, 512 (Tex.App.--Houston [14th Dist.] 2002, no pet.), theappellate court affirmed the trial court's finding ofcommunity property, saying:

Henry argues that accounts listed in thedecree totaling almost $100,000 weredesignated his separate property in theparties' premarital agreement. But the onlyevidence as to the source of funds placed inthose accounts was Henry's testimony; nodeposit slips or bank records were offeredtracing the money to support Henry's claim.Without tracing, Henry's testimony cannotovercome the community propertypresumption.

In Prevallet v. Prevallet 2014 WL 92793 (Tex.App.Fort Worth 2014, no pet.), the appellatecourt affirmed a finding of community propertywhen the only evidence of separate property wasthe testimony of the husband and his father,uncorroborated by bank records.

In Robles v. Robles, 965 S.W.2d 605, 616 (Tex.App.--Houston [1st Dist.] 1998, pet. denied), thecourt said:

Gus testified he purchased the lot at 2319Freeman for $27,000 with money he receivedas a gift from Thomas while she was alive.Irene again stated she listed the 2319Freeman property as community propertybecause Gus told her it was communityproperty. Richard Sedgeley stated that, in hisopinion, the 2319 Freeman lot was Gus'sseparate property because Gus purchased theproperty with money he inherited fromThomas's estate. The deed for this propertydoes not appear to be included in the recordbefore this Court. No documentary evidence

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was presented to trace the money used topurchase this property.

Generally, the testimony of an interestedparty, when not corroborated, does notconclusively establish a fact even whenuncontradicted. . . . Uncorroborated evidencecoming from one party is not conclusive. . . .

The trial court found Gus did not presentclear and convincing evidence to rebut thepresumption that the 2319 Freeman propertywas community property. The evidencepresented concerning the nature of thisproperty was, at best, conflicting.Accordingly, we conclude Gus did notpresent sufficient evidence to rebut thecommunity property presumption, and thetrial court did not abuse its discretion incharacterizing the 2319 Freeman lot ascommunity property.

In In re Marriage of Santopadre, 2008 WL3844517 (Tex. App.--Dallas 2008, no pet.)(memorandum opinion), the court said:

Wife contends there is no evidence orinsufficient evidence to prove the followingassets are the separate property of Husband:Texas Instrument employee pension plan,Texas Instruments retirement benefits, TexasInstruments stock, certain real property inRuidoso, New Mexico, certain real propertyin Nashua, New Hampshire, Charles Schwabaccount PJ7785-9979, USAA IRA #001277495, USAA Account # 65118968,E-Trade Account # 4575-0831, E-TradeAccount # 4842-3269.

After reviewing the record in this case, weagree with Wife's contentions.

Because Husband claimed these assets to behis separate property, he bore the burden attrial of establishing by clear and convincingevidence the separate origin of each asset. Todo so, he was required to show the time and

means by which he originally obtainedpossession of each asset. Although Husbandtestified at trial these assets were his separateproperty, he presented no documentaryevidence to establish that any asset was hisseparate property. Specifically, he did notproduce deeds, closing statements, propertytax statements, financial records, or otherevidence to establish when any of theseassets was acquired or set up on hisbehalf.FN1 Rather, he relied on his testimonyat trial that he owned each property or assetbefore his September 1996 marriage to Wife.This is insufficient to constitute clear andconvincing evidence rebutting thecommunity presumption and establishingcharacterization of property as separate.

In In re Marriage of Smith, 2003 WL 22715581,*3-4 (Tex. App.--Amarillo 2003, pet. denied)(memorandum opinion):

Considering that Matthew maintainedcomplete control of the separate andcommunity property of the parties, that hehad duties as a fiduciary, that separatecharacter cannot be established by histestimony without tracing and documentarysupport, and the absence or inadequacy of thedocuments to demonstrate the date andsource of the acquisition of the funds whichwere commingled into the two accounts, weconclude the evidence was factuallyinsufficient to establish that $15,111 and$26,623 of the two accounts were thesepa

different ways to trace separate property

Documents