in the Matter of the Marriage of John Thomas Scott and Alta Mae Scott

NO. 07-01-0200-CV

IN THE COURT OF APPEALS

FOR THE SEVENTH DISTRICT OF TEXAS

AT AMARILLO

PANEL E

OCTOBER 7, 2003
______________________________

IN THE MATTER OF THE MARRIAGE OF
ALTA MAE SCOTT AND JOHN THOMAS SCOTT
_________________________________

FROM THE 316TH DISTRICT COURT OF HUTCHINSON COUNTY;

NO. 33,458; HON. JOHN LAGRONE, PRESIDING
_______________________________

Before JOHNSON, C.J., QUINN, J., and BOYD, S.J.1

OPINION

John Thomas Scott (John) appeals from a final divorce decree which ended his 53

year marriage to Alta Mae Scott (Alta) and divided the community property. The four

issues before us fall within two general categories. The first involves the legal and factual

sufficiency of the evidence underlying the trial court’s decision to grant the divorce and

divide the marital estate. The second concerns the ability of the trial court to award title

to realty to one who is not a party to the action. We affirm in part and reverse and remand

in part.

Issue One — Sufficiency of the Evidence Underlying the Grounds for Divorce

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John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by assignment. Tex. Gov’t
Code Ann. §75.002(a)(1) (Vernon Supp. 2003).
 John initially contends that the evidence underlying the trial court’s decision to grant

the divorce was both legally and factually insufficient. We disagree.

Alta petitioned for divorce on the grounds that the marriage had become

insupportable due to discord or conflict of personalities that destroys the legitimate ends

of the marital relationship and prevents any reasonable expectation of reconciliation. See

TEX . FAM . CODE ANN . §6.001 (Vernon 1998). Though she did not personally testify at trial,

the record nonetheless contains evidence indicating that 1) the Scotts had not slept in the

same bedroom for approximately 22 years or lived under the same roof for one and one-

half years prior to the final hearing, 2) Alta had changed her lifestyle, 3) Alta had attempted

to run John off of the road with a vehicle, 4) John believed Alta was undermining his

business, and 5) John wanted to “get rid of this deal.” This is more than ample evidence

upon which the trial court could have determined that the marital relationship has been

impeded, that discord and conflict of personalities existed, and that the marital relationship

had ended without reasonable expectation of reconciliation. See Baxla v. Baxla, 522

S.W.2d 736, 739 (Tex. Civ. App.–Dallas 1975, no writ) (holding evidence that indicated

one spouse threatened to kill the other and attempts at reconciliation went for naught

evinced that the marital relationship had become insupportable).

As stated in precedent, whether the evidence is sufficient to establish

insupportability is left to the discretion of the trial court when the divorce is tried by the

court. Id. at 738-39; Cusack v. Cusack, 491 S.W.2d 714, 720 (Tex. Civ. App.–Corpus

Christi 1973, writ dism’d w.o.j.). We conclude that the trial court did not abuse its

discretion when it held that the marital relationship between the Scotts had become

insupportable.

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 Issue Two — Award to J & J Panhandle Construction, Inc.

Next, John asserts that the trial court erred when it awarded title to several parcels

of realty to J & J Panhandle Construction, Inc. (J & J) even though J & J was not a party

to the divorce proceeding. We overrule the point.

The property in question (various tracts totaling 40 acres) was transferred by an

entity known as Riata to John and Alta. At the time of the transfer, Riata owed J & J for

work that J & J had performed for it. And, to satisfy the outstanding debt due J & J, Riata

transferred the realty to Alta and John, the latter being a director and the president of the

corporation. Thereafter, John’s son, James, intervened in the divorce proceeding. He did

so alleging that he, like his father, was a shareholder of J & J and that John had “engaged

in fraudulent or dishonest conduct . . . in that he breached his fiduciary duty to the

Corporation by using corporate funds to acquire property in his personal name” and that

“he has failed to reveal to other directors and officers pertinent facts adverse to corporate

interests . . . .” Thereafter, he prayed for damages, the removal of John as a director of

J & J, interest, costs, attorney’s fees, and “such other relief which the Intervenor may be

entitled.” Though John answered the petition, he did so by general denial. No special

exceptions were included in the pleading.

James’ petition can be reasonably interpreted as being in the nature of a

shareholder’s derivative suit. That is, he, as a shareholder of J & J, initiated suit on behalf

of the corporation to recover upon claims of the corporation against its president. And,

though the petition may have omitted various pleading requirements mandated by statute,

see Edlund v. Bounds, 842 S.W.2d 719, 728-29 (Tex. App.–Dallas 1992, no writ) (holding

that the shareholder must allege in his pleading that he made demand upon the corporate

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officers to prosecute the action and they refused or explain why no such demand was

made), no one specially excepted to their absence. Thus, they were waived.

Similarly waived was any complaint about James failing to join J & J as a party to

the suit. While the corporation was a necessary or indispensable party to the proceeding,

see DeBoard v. Cicle Y Of Yoakum, Inc., 951 S.W.2d 127, 134 (Tex. App.–Corpus Christi

1997), rev’d on other grounds, 967 S.W.2d 352 (Tex. 1998) (holding it an indispensable

party to a shareholders derivative suit); Providential Inv. Corp v. Dibrell, 320 S.W.2d 415,

418 (Tex. Civ. App.–Houston 1959, no writ) (holding it a necessary party to such a suit),

no one objected to its absence below. Thus, the defect was waived. See Puryear v. Red

River Authority, 383 S.W.2d 818, 821 (Tex. Civ. App.–Amarillo 1964, writ ref’d n.r.e.)

(holding that in the absence of a plea of non-joinder of necessary parties, the appellate

court was not authorized to reverse the trial court’s judgment because of the lack of a

necessary party); Cox v. Johnson, 638 S.W.2d 867, 68 (Tex. 1982) (holding that the failure

to join an indispensable party generally is not fundamental error because seldom will the

absence of an indispensable party deprive the trial court of jurisdiction to adjudicate

between the parties already joined).

Finally, a reading of the record discloses ample evidence upon which the factfinder

could have reasonably decided that the realty actually belonged to J & J. Again, Riata

owed the corporation a debt. Thus, the receivable belonged to J & J, not John, its

president and a shareholder. Moreover, the conveyance occurred in satisfaction of the

debt owed to J & J, according to John’s own testimony. It is well settled that when one

party pays the purchase price of realty (that price being satisfaction of the debt due J & J

at bar) but title is placed in the name of another, a purchase money resulting trust will arise

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in favor of the entity providing the purchase money. Nolana Dev. Ass’n v. Corsi, 682

S.W.2d 246, 250 (Tex. 1984). There existing evidence illustrating that such a trust arose

here, the trial court did not err in vesting J & J with title to the land.

Issue Three — Sale of Horses Below Fair Market Value

Next, John attacks the legal and factual sufficiency of the evidence underlying the

trial court’s finding number VIII. In the latter, the trial court stated that on

December 7, 1999, [it] ordered the eleven horses belonging to the parties to
be sold and the proceeds paid into the registry of the Court. John . . .,
without consulting [Alta], sold the horses at a private sale for $3,100, an
amount below their fair market value, with intent to reacquire said horses
after the divorce was final.

However, John neither argues nor attempts to illustrate the effect, if any, that the court’s

finding had upon the judgment ultimately rendered. This is of import since the burden lay

with him to establish on appeal that the purported error caused the rendition of an

improper judgment. In re M.S., No. 02-0509, 2003 WL 21512654 (Tex. July 3, 2003);

Crescendo Inv., Inc. v. Brice, 61 S.W.3d 465, 477 (Tex. App.–San Antonio 2001, pet.

denied). Consequently, we may not reverse the judgment of the trial court (assuming that

the error of which he complains was indeed error). See TEX . R. APP . P. 44.1(a) (stating

that no judgment may be reversed on appeal on the ground that the trial court made an

error of law unless the court of appeals concludes that the error complained of probably

caused the rendition of an improper judgment or probably prevented the appellant from

properly presenting the case to the court of appeals); Goode v. Shoukfeh, 915 S.W.2d

666, 673 (Tex. App.–Amarillo 1996), affirmed, 943 S.W.2d 441 (Tex. 1997) (overruling the

point of error since the appellant did not claim or attempt to show that he was harmed by

the purported error).

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 Issue Four – Valuation and Division of Property

Through his last issue, John attacks the trial court’s distribution of the marital estate.

He does so by first contending that the trial court erred in valuing two separate tracts of

land. Then, he questions the sufficiency of the evidence underlying the trial court’s finding

that the personalty awarded to each litigant was substantially equal. We sustain the issue.

Statute obligates the trial court to divide the marital estate, upon the divorce of the

parties, “in a manner that the court deems just and right, having due regard for the rights

of each party and any children of the marriage.” TEX . FAM . CODE ANN . §7.001 (Vernon

1998). This provision does not obligate the court to divide the property equally. Tate v.

Tate, 55 S.W.3d 1, 10 (Tex. App.–El Paso 2000, no pet.). Indeed, it has long been held

that trial courts have great discretion in determining how to divide the estate, and we

cannot interfere with that decision unless and until it is shown that its discretion was

abused. Murff v. Murff, 615 S.W.2d 696, 698 (Tex. 1981). With this said, we turn to the

contentions before us.

As to the valuation of the two tracts of land, the first parcel consists of five acres

located in Hutchinson County. On it sits a three bedroom 1700 square foot house in

average condition, a detached two car garage, another detached garage, three storage

buildings, a metal shop, two horse stables with a pipe fence corral, one water well, a

windmill, several chicken coops, and other improvements. The trial court valued the

property at $35,610. This was the very same value placed upon it by Alta in her verified

inventory and appraisement, which document was received into evidence. See Vannerson

v. Vannerson, 857 S.W.2d 659, 671 (Tex. App.–Houston [1st Dist.] 1993, no writ) (holding

that the trial court could rely upon the contents of a sworn inventory when arriving at its

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conclusions of law); Bailey County Appraisal Dist. v. Smallwood, 848 S.W.2d 822, 824

(Tex. App.–Amarillo 1993, no writ) (stating that an owner is qualified to testify about the

market value of his property). Furthermore, she represents (through her brief and verified

inventory and appraisement) that the $35,610 figure was the valuation assigned to the

parcel by the Hutchinson County Appraisal District in 1997 (three years prior to trial).

Thus, some evidence appears of record supporting the trial court’s valuation of the

property.

Yet, also of record is other evidence concerning the value of the tract. For instance,

Alta tendered an appraisal wherein the appraiser opined that the realty had a market value

of $80,000. He based his opinion upon comparable sales in the area. Next, a local real

estate agent represented that based on his inspection of the home and improvements, “we

could list [the] home for sale at an asking price of $125,000 and could probably get an

offer somewhere in that price range.” Additionally, John valued the parcel from $125,000

to $150,000. As can be seen, this other evidence, including that of Alta’s own appraiser,

valued the parcel at a sum far greater than that assigned by the local appraisal district

three years before trial. More importantly, authority has long recognized that “values

reflected by the tax rolls do not reflect actual value.” Housing Authority v. Brown, 256

S.W.2d 656, 659 (Tex. Civ. App.–Dallas 1953, no writ). Given Brown, Alta’s apparent

reliance on the local tax rolls when valuing the tract in her inventory and appraisement, the

trial court’s obvious reliance on Alta’s opinion, and the other evidence illustrating a value

at least twice as much as the dated valuation assigned the land by local tax rolls, we

conclude that the valuation placed on the land by the trial court is so against the great

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weight and preponderance of the evidence as to make the valuation clearly wrong or

manifestly unjust.

In short, the evidence underlying the valuation is factually insufficient. Therefore,

the finding is erroneous. So too is it harmful. For instance, in addition to awarding the

tract to Alta, the trial court also entered a $12,000 judgment against John and in favor of

Alta “[f]or the purpose of a just and right division of property.” Obviously, revaluation of

the five acre parcel would materially affect the sum, if any, John is obligated to pay Alta

to gain a just and right division of their estate. So, the error probably caused the rendition

of an improper judgment. TEX . R. APP . P. 44.1(a)(1). And, because it did, we must remand

the entire community estate for a new division. Jacobs v. Jacobs, 687 S.W.2d 731, 732

(Tex. 1985) (holding that where error in part of the division of the marital estate materially

affects the trial court’s just and right division of the entire estate, the reviewing court must

remand the entire community estate for a new division); In re Taylor, 992 S.W.2d 616, 621

(Tex. App.–Texarkana 1999, no pet.) (holding the same).

Having sustained that portion of issue four involving valuation of the five acre tract,

we need not consider the other aspects of the issue. Accordingly, we reverse that part of

the trial court’s judgment that divides the community estate of John and Alta Scott and

remand the cause for further proceedings. In all other aspects, the judgment of the trial

court is affirmed.

Per Curiam

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