                                       In The

                                  Court of Appeals
                    Ninth District of Texas at Beaumont
                                  _________________

                               NO. 09-16-00066-CV
                               _________________


               IN THE ESTATE OF REDA BROWN ALLISON

__________________________________________________________________

                   On Appeal from the County Court
                       Jefferson County, Texas
                       Trial Cause No. 111894
__________________________________________________________________

                          MEMORANDUM OPINION

      This appeal arises from a dispute involving the administration of an estate and

whether two tracts of property were owned by Reda Brown Allison when she died.

We conclude that the Estate’s claim that Reda owned the tracts when she died is

barred by limitations. We further conclude that the doctrine of judicial estoppel does

not prevent Reda’s son, Albert Allison III (Ray), from showing that in 1988, a

corporate entity in which he is the sole shareholder acquired the two disputed tracts

from Reda and her husband, Albert Ray Allison Jr. (Albert). We reverse the trial

court’s order of February 8, 2016, based on our conclusion that the disputed tracts

do not belong in Reda’s estate.

                                          1
                                     Background

      Reda died in October 2014. She was 81 years old at that time. In 2004, Reda

executed the will admitted in the probate proceeding in which she divided her estate

equally between her three children, Ray, Linda Lou Allison Miller, and Crystal

Corrine Allison Harrington. Reda’s will requested that her youngest daughter,

Crystal, be named as the independent executor of Reda’s estate. In January 2015, the

county judge appointed Crystal as the independent executor of Reda’s estate.

      The dispute that is the subject of this appeal arose when Crystal filed an

inventory that included two tracts of property (the disputed tracts), as properties that

Reda owned when she died.1 The parties also dispute whether Ray is entitled to retain


      1
         The smaller of the disputed tracts contains approximately 23 acres and lies
partly in Newton County and partly in Jasper County. The larger of the disputed
tracts contains approximately 132 acres and lies in Newton County. While none of
the parties have questioned our jurisdiction over the appeal, we note that because
Reda died in Jefferson County, the county judge, as the presiding officer of Jefferson
County’s constitutional county court, exercised jurisdiction over the claims of
Reda’s estate to the tracts, even though those tracts are not located in Jefferson
County. We also note that Jefferson County has no statutory probate court, and that
none of the parties asked the county judge to transfer the dispute to a county court
at law. See Tex. Est. Code Ann. § 31.002(a)(5), (b)(1) (West 2014) (including in “a
matter related to a probate proceeding” actions for “trial of title to real property that
is estate property”), § 32.001(a) (West 2014) (granting jurisdiction over probate
proceedings to the court exercising original probate jurisdiction over “all matters
related to the probate proceeding”), § 32.002(b) (West 2014) (providing that in
counties that do not have a statutory probate court, but in which they do have county
courts at law exercising probate jurisdiction, the county court and county court at
law have concurrent original jurisdiction unless otherwise provided by law), §
32.004(a) (West 2014) (requiring that a county judge in a county where a county
court at law exercises probate jurisdiction to transfer the proceeding to the county
                                           2
several payments that he collected from Billy Rawls after Reda’s death, which were

based on an agreement that Reda made with Rawls in 2008 to sell the smaller of the

disputed tracts to him.

      After the county judge approved the proposed inventory for Reda’s estate,

Crystal filed a motion requesting that the county judge order the tracts delivered to

the Estate so they could be sold. Crystal’s motion alleges that her parents, Albert and

Reda, transferred the disputed tracts to “AFCI, Inc. in order to shield [the tracts]

from IRS leavy (sic) or collection measures.”

      Ray and Linda filed a response and opposed Crystal’s motion on the basis that

the disputed tracts were not owned by Reda when she died. In their response, Ray

and Linda asserted that in 1988, Albert and Reda deeded the tracts to AFCI, that the

acronym AFCI referred to in the deeds to the disputed tracts is The Allison Financial

Corporation, Inc., that Ray “was and remains the sole shareholder of AFCI, Inc.,”

and that the disputed tracts, which were deeded to AFCI, were not properties that

belong in Reda’s estate. Additionally, Ray and Linda’s response raises a statute of

limitations defense to the Estate’s claim that the disputed tracts belonged in Reda’s

estate. As to the payments that Rawls made to Ray on the smaller tract after Reda’s

death, the response alleges that after learning of Reda’s decision to sell the smaller



court at law if a party files a motion requesting that the proceeding be transferred to
the county court at law).
                                          3
tract to Rawls, Ray agreed to honor his mother’s agreement with Rawls. Ray’s

response indicates that the proceeds that he received from Rawls after Reda’s death

rightfully belonged to him as the beneficial owner of AFCI, which owns the

properties.

      In January 2016, the county judge conducted an evidentiary hearing on the

claims of the Estate to the disputed tracts. The evidence admitted during the hearing

includes certified copies of the deeds to the disputed tracts. The deeds contain

Albert’s and Reda’s notarized signatures. Each deed reflects that it was duly

recorded in the appropriate county office where that tract is located. The parties did

not dispute the facial validity of the deeds to the disputed tracts in the hearing, nor

do they contest the facial validity of the deeds in the appeal.

      Following the hearing, the county judge reduced his findings and conclusions

to writing. The county judge found that AFCI was the intended grantee to the

disputed tracts. The Estate does not claim that Reda and Albert were tricked into

conveying the tracts to AFCI. Additionally, the Estate does not contest Ray’s claim

that he is the sole shareholder of AFCI.2 See Tex. R. App. P. 38.1(g) (allowing the


      2
        Crystal, as the executor of Reda’s estate, alleged that her parents believed
they were shareholders in the entity to which they conveyed the disputed tracts.
However, AFCI’s stock ledger was one of the exhibits admitted into evidence during
the hearing conducted to resolve whether the tracts were properties that belonged to
Reda’s estate. The ledger shows that AFCI issued only one share of stock, and that
the share was issued to Ray. Ray’s stock certificate, another exhibit admitted into
evidence during the hearing, does not show that Ray ever transferred his share in
                                           4
appeals court in a civil case to accept as true the facts stated in the “Statement of

Facts” section of the appellant’s brief unless the facts stated in that section are

contradicted by another party).

      The evidence admitted in the hearing reflects that Reda’s husband, Albert,

died in 2001. Reda was named the executor of his will. Exhibits admitted during the

hearing include Albert’s will and the inventory of the assets in his estate. The

inventory filed in Albert’s estate does not show that Albert’s estate claimed

ownership of the disputed tracts. It also does not identify any shares in AFCI as

property that belonged to Albert when he died. Ray and Linda rely on the inventory

that was filed in Albert’s estate to support their argument that Albert and Reda were

aware they conveyed the disputed tracts to AFCI before they died.

      In support of the Estate’s claim that Reda thought she owned the tracts when

she died, the Estate relies on evidence showing that in 2008, Reda sold the smaller

of the disputed tracts to Rawls. Under Reda’s agreement with Rawls, Rawls agreed

to pay Reda approximately $38,000 to purchase the smaller of the disputed tracts.

The purchase agreement, which bears Rawls’ signature, shows that he paid $5,000

toward the $38,000 purchase price in 2008, and that he agreed to pay the remaining


AFCI to anyone. The evidence in the hearing also shows that AFCI forfeited its right
to do business in 1989 after it failed to file a state franchise tax return, and nothing
in the record shows that AFCI attempted to have its right to conduct business in
Texas restored after 1989.

                                           5
balance in monthly installments starting in February 2008. Additionally, the

purchase agreement required Rawls to pay the property taxes on the tract, and

required Reda to furnish Rawls with a deed to the tract “when contract terms have

all been met.”3 Reda’s 2012 federal tax return reflects that Reda reported interest on

the sale of the smaller tract on her personal return. Reda’s return identifies the

interest that Reda received in 2011 on the transaction with Rawls as “Billy Rawls

SFM.” The tax form on the return defines “SFM” as “seller-financed mortgage.”

      During the hearing on the Estate’s motion, Crystal argued Albert and Reda

continued to treat the disputed tracts as their own after the tracts were conveyed to

AFCI. The evidence in the hearing shows that Albert and Reda continued to operate

the larger tract as a farm. Based on the way her parents treated the tracts after 2008,

Crystal claimed that Albert and Reda never intended to alienate the tracts from their

estates. Following the hearing, the county judge found that the disputed tracts

belonged to the Estate, in fee simple.4 Additionally, the county judge’s order


      3
       The records Reda kept reflect that Rawls did not make regular monthly
payments toward his purchase of the tract. Ray testified that after Reda died, he
began collecting the payments that Rawls was obligated to make under the
agreement that he made with Reda.
      4
        We note that Crystal did not file the Estate’s suit as a trespass to try title
action. However, Ray and Linda also never objected to Crystal’s failure to comply
with the rules of civil procedure that apply to trespass to try title claims. See Tex. R.
Civ. P. 783-809 (Rules applying to trespass to try title actions). Additionally, the
county judge did not require the parties to comply with section 22.001 of the Texas
Property Code to resolve whether the tracts were properties owned by Reda’s estate.
                                           6
resolving the dispute recites that the Estate’s title in the disputed tracts “is forever

quieted against any and all claims or demands of The Allison Financial Corporation,

Inc., a/k/a/ AFCI, Inc., Albert Ray Allison, III, individually and/or Linda A. Miller,

individually[.]”

      With respect to the money that Ray collected from Rawls on the smaller of

the disputed tracts, the county judge’s order required Rawls to make all future

payments on the tract he purchased to Crystal, as the executor of Reda’s estate. The

order also required Ray to reimburse Reda’s estate for the installment payments he

began collecting on the smaller tract after Reda died. Ray and Linda appeal from the

county judge’s order concluding that the disputed tracts were owned by Reda when

she died.




See Tex. Prop. Code Ann. § 22.001 (West 2014). In their appeal, Ray and Linda
have not argued that the trial court erred by failing to try the case as a trespass to try
title action. Consequently, we resolve the issues in the appeal without the benefit of
the formal pleading rules and record that would have been created had the dispute
been tried as a trespass to try title action. See Land v. Turner, 377 S.W.2d 181, 183
(Tex. 1964) (noting that “[t]o recover in trespass to try title, the plaintiff must recover
upon the strength of his own title”). Given the fact the case was not handled as a
trespass to try title action, we do not intend our opinion to imply that any of the
parties provided the court with evidence that is sufficient to allow a court to trace
title to the disputed tracts to the sovereign. Compare Tex. Prop. Code Ann. §
22.001(a) (providing that “[a] trespass to try title action is the method of determining
title to lands, tenements, or other real property”), with Tex. Civ. Prac. & Rem. Code
Ann. § 37.004(c) (West 2015) (permitting resolution of boundary disputes by
declaratory judgment actions if the sole issue is the proper boundary between
adjoining properties).
                                            7
                                      Analysis

                                       Waiver

      The county judge failed to address in his findings whether limitations barred

the claims made by Reda’s estate that Reda owned the property when she died. On

appeal, the Estate argues that Ray and Linda failed to properly raise limitations as a

defense to its claim that the disputed tracts were owned by Reda when she died. We

address the Estate’s waiver argument before we address the issues that Ray and

Linda raise in their appeal.

      Limitations is an affirmative defense that must be affirmatively pled as a

defense to another party’s claims. Tex. R. Civ. P. 94 (Affirmative Defenses). The

pleadings and brief that Ray and Linda filed in the trial court raise statute of

limitations defenses. A response they filed to the Estate’s motion asking that the

county judge order the disputed properties delivered to the Estate raises limitations

as a defense to the Estate’s request. Additionally, following the hearing, and before

the county judge decided the dispute, Ray and Linda filed a brief discussing their

statute of limitations defenses in detail. By awarding the tracts to Reda’s estate, the

county judge implicitly rejected Ray and Linda’s claim that the Estate’s claims were

barred by limitations. Tex. R. App. P. 33.1(a)(2)(A) (providing that an error is

preserved if the complaint is presented in a manner sufficient to make the trial court




                                          8
aware of the complaint and the trial court ruled on the request, either expressly or by

implication). We hold that Ray and Linda did not waive their limitations defense.

                                      Limitations

      Next, we address whether the claims of Reda’s estate to the disputed tracts are

barred by limitations. To determine whether the Estate’s claims were filed within

the period proscribed by the relevant statutes of limitation, we must determine when

Reda’s claims to the tracts accrued. The record shows that Reda and Albert executed

the deeds to the disputed tracts in April 1988. The record also shows that the Estate

never claimed that any of the signatures on the deeds were forged or that the deeds

were not duly recorded.

      Generally, the question of when a claim accrues is decided as a question of

law. Town of Dish v. Atmos Energy Corp., 519 S.W.3d 605, 609 (Tex. 2017). “A

cause of action accrues ‘when a wrongful act causes a legal injury, regardless of

when the plaintiff learns of that injury or if all resulting damages have yet to occur.’”

Id. (quoting Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex.

2003)). In this case, the county judge’s written findings state that the tracts were

deeded to AFCI “in order to shield” them “from tax levy or collection measures of

the United States Internal Revenue Service.” None of the parties have challenged

that finding in the appeal. Additionally, the Estate has not claimed that Reda was

unaware of the nature of the transaction involving the disputed tracts. In its brief, the

                                           9
Estate alleges that conveying the disputed tracts to AFCI “was a fraudulent and sham

transaction designed to shield the [two tracts] from possible IRS levy.” Under the

circumstances shown on this record, which indicates that Reda was a party to the

alleged fraud, we conclude that Reda’s claims to avoid the deeds accrued when she

executed the deeds. See Cosgrove v. Cade, 468 S.W.3d 32, 39 (Tex. 2015)

(explaining that the grantors of a deed are charged with notice of the contents of their

deed on execution).

      Had Reda filed a claim seeking to void the deeds while she was alive, her legal

and equitable claims would have been subject to four-year statutes of limitation.5 See

Tex. Civ. Prac. & Rem. Code Ann. § 16.004(a)(4) (West 2002) (providing a four-

year period in which to bring a claim for fraud), § 16.051 (West 2015) (providing

that every action for which no express period applies “must be brought not later than

four years after the day the cause of action accrues”); Ford v. Exxon Mobil Chem.

Co., 235 S.W.3d 615, 617-18 (Tex. 2007) (holding that actions seeking to set aside

voidable deeds are required to be filed no later than four years after the cause of




      5
         We assume without deciding that an alleged fraudfeasor has a right to
challenge the validity of the allegedly fraudulent instruments that she signed. In their
brief, Ray and Linda claimed that Reda did not have standing to claim that the deeds
to the tracts were voidable. Nonetheless, we need not reach the standing issue to
dispose of the appeal. See Tex. R. App. P. 47.1 (allowing an appellate court to
address only those issues needed to finally dispose of the appeal).
                                          10
action accrues).6 Fraud claims,7 whether brought pursuant to the statute for fraud in

real estate transactions or at common law, and whether characterized as legal or

equitable claims, are also governed by four-year statutes of limitation. See Tex. Bus.

& Com. Code Ann. § 27.01 (West 2015) (providing cause of action for frauds that

involve real estate transactions); Tex. Civ. Prac. & Rem. Code Ann. § 16.004(a)(4)

(providing a four-year period from the date of accrual to file a cause of action for


      6
         We note that the pleadings filed by Reda’s estate did not allege that Ray or
AFCI agreed to hold the disputed tracts in trust, nor did the Estate claim that an
enforceable trust agreement existed that governed Reda’s rights to the tracts. See
Tex. Prop. Code Ann. § 112.004 (West 2014) (providing that a trust agreement
creating a trust that holds real or personal property is enforceable only if there is
written evidence of the trust’s terms bearing the signature of the settlor or the
settlor’s authorized agent). No evidence was introduced in the hearing showing that
Albert, Reda, or Crystal believed that AFCI agreed to hold the disputed tracts in trust
for the benefit of Reda, Albert, or their children. At the beginning of the hearing, the
county judge made a comment that possibly reflects the court viewed the
circumstances related to the property as one involving a trust. Nonetheless, if the
county judge’s conclusion that Reda and Albert did not intend to permanently
alienate their ownership of the tracts implies that a trust existed governing the tracts,
such a finding and conclusion is not supported by pleadings or evidence proving the
existence of a written trust. Had the Estate attempted to introduce testimony about
an alleged oral trust in the hearing, which it did not, the statute of frauds that applies
to trusts makes oral trust agreements unenforceable in the absence of any proof that
a written trust agreement ever existed. See id.
      7
        Ray and Linda have not challenged the Estate’s fraud claims on the basis
that Reda’s claims did not survive her death. Nevertheless, we note that at common
law, fraud claims involving real estate are generally considered to have survived the
injured party’s death. See Vial v. Gas Solutions, Ltd., 187 S.W.3d 220, 225-28 (Tex.
App.—Texarkana 2006, no pet.) (concluding that the heirs of the defrauded party
had standing to file a claim seeking to recover an interest in property based on a
claim for fraud).

                                           11
fraud); Ford, 235 S.W.3d at 618 (providing that Texas law with respect to

challenging the validity of a deed “is well settled that once limitations has expired

for setting aside a deed for fraud, that bar cannot be evaded by simply asserting the

claim in equity”). Consequently, absent the application of a rule deferring limitations

beyond 1992, Reda’s claims, had she made any, seeking to avoid the validity of the

deeds she signed, would have been barred well before 2014.8 Tex. Civ. Prac. & Rem.

Code Ann. §§ 16.004(a)(4), 16.051.

      Crystal argues that limitations on Reda’s claims should be deferred because

she did not discover the allegedly fraudulent scheme concerning the disputed tracts

until after she was appointed as the executor for the Estate. However, “Texas courts

have refused to apply the discovery rule to claims arising out of probate proceedings

[] even in the face of allegations of fraud.” Little v. Smith, 943 S.W.2d 414, 420 (Tex.

1997). And, even if Reda did not know who actually owned AFCI when she executed

the 1988 deeds, “[a] record titleholder’s ignorance of what [she] owns does not affect

the running of limitations.” Nat. Gas Pipeline Co. of Am. v. Pool, 124 S.W.3d 188,

198 (Tex. 2003). We conclude that the deeds put Reda on notice that she was

conveying the tracts to a corporate entity, and there was no evidence introduced in



      8
         Given our conclusion that Reda’s claims under the facts and circumstances
in this case accrued on April 26, 1988, her last day to file claims to avoid the validity
of the deeds she signed was April 26, 1992.

                                           12
the hearing showing that Ray misled Reda about his ownership of AFCI. See

Cosgrove, 468 S.W.3d at 38-39 (explaining that without showing fraud, property

owners “may not claim a failure to understand what they were signing as grounds

for avoiding the transaction”).

      In its brief, Reda’s estate relies primarily on S.V. v. R.V., 933 S.W.2d 1 (Tex.

1996), Computer Associates International v. Altai, Inc., 918 S.W.2d 453 (Tex.

1996), and Estate of Stonecipher v. Estate of Butts, 591 S.W.2d 806 (Tex. 1979), to

support its argument that limitations should be deferred until Crystal learned of the

allegedly fraudulent scheme involving the disputed tracts. However, these cases do

not support the Estate’s argument that it had the right to pursue claims on Reda’s

behalf that would have been barred by limitations before she died.

      For example, S.V. v. R.V. offers no support for the Estate’s claim that an estate

can pursue a stale claim. 933 S.W.2d 1. In S.V., S.’s child R. relied on the discovery

rule in an effort to avoid S.’s limitations defense to his daughter’s claims that he had

negligently sexually abused her when she was a minor. Id. at 3. The opinion

addresses R.’s claim that she repressed the memories involving her father’s sexual

assaults. Id. at 8, 25. Ultimately, the Court held that because R.’s injury was not

inherently undiscoverable, the discovery rule did not apply to R.’s claims. Id. Reda’s

claims, like R.’s, were not inherently undiscoverable while Reda was alive. In our

opinion, the discussion in S.V. v. R.V. rejecting the application of the discovery rule

                                          13
supports Ray and Linda’s argument that the discovery rule does not apply to the

Estate’s claims.

      Computer Associates also provides no support for the Estate’s argument that

the discovery rule applies to its claims. 918 S.W.2d 453. In Computer Associates,

the Texas Supreme Court rejected Computer Associates’ claim that the discovery

rule applied to its claims. Id. at 458. The case did not involve claims pursued by a

testator’s estate, and the general discussion in Computer Associates concerning

when the discovery rule applies does not address whether it applies when the testator

is allegedly a knowing participant in an allegedly fraudulent scheme. Id. at 455-58.

      Stonecipher is distinguishable because the Court in that case held the

discovery rule applied where the testator was the victim of a fraudulent scheme

designed to prevent the testator from learning that a defendant the testator sued,

when the testator was alive, owned property on which the testator had the right to

execute to collect a judgment on behalf of the testator’s estate. 591 S.W.2d at 807.

In Stonecipher, no claim was made that Stonecipher had been a party to the alleged

fraud. Id. Because Stonecipher was the victim of the fraud, the Texas Supreme Court

held that the claims of his estate for the injury that occurred to him were subject to

the discovery rule, and the Court remanded the case for trial to allow Stonecipher’s

estate to prove that Stonecipher, while he was alive, exercised reasonable diligence




                                         14
to discover whether the individuals against whom he obtained a judgment had assets.

Id. at 810.

      Generally, Crystal argued in the probate hearing that her parents did not fully

realize all of the consequences attendant to conveying the disputed tracts to AFCI.

Nonetheless, given both Albert’s and Reda’s deaths, the parties cannot establish

whether Albert and Reda were aware that the tracts would no longer be part of their

estates after deeding them to AFCI. While it is possible that Albert and Reda did not

realize all of the ramifications attendant to their decision to sign the deeds, Crystal’s

effort linking suspicion on suspicion does not replace the legal requirement that a

party prove its claims. See Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 927

(Tex. 1993) (noting that “some suspicion linked to other suspicion produces only

more suspicion, which is not the same as some evidence”).

      Reda’s estate argues that the dates relevant to the accrual of Reda’s claims to

the disputed tracts revolve around when Crystal as the executor of Reda’s estate

learned that the tracts were transferred to a corporation that her parents did not own.

However, nothing in the Civil Practice and Remedies Code indicates that the

Legislature intended to allow a claim that was already barred by limitations before

the decedent’s death to be revived upon the decedent’s death. See Tex. Civ. Prac. &

Rem. Code Ann. § 16.062 (West 2015) (suspending limitations in case of an

individual’s death during a period to allow the appointment of an administrator or

                                           15
executor up to a maximum period of twelve months); see generally Russell v.

Ingersoll-Rand Co., 841 S.W.2d 343, 345 (Tex. 1992) (explaining that because

survival actions are wholly derivative of the decedent’s rights, a decedent’s action

that “would have been barred by limitations had it been asserted immediately prior

to his death” when based on the same alleged wrong “is likewise barred”). The Estate

has not shown that the Estate had the legal right to pursue claims that were time-

barred in 1992, twenty-two years before the date of Reda’s death.

      In conclusion, the circumstantial evidence surrounding the execution of the

deeds was legally insufficient to establish that Ray engaged in a pattern of conduct

designed to mislead his parents into believing that they retained legal title to the

disputed tracts after signing the deeds. We conclude that the four-year limitations

period expired on Reda’s statutory and common law fraud claims in 1992, well

before Reda died in 2014. We further conclude that the discovery rule does not apply

to the Estate’s claims because the alleged injury to Reda was not inherently

undiscoverable. Because Reda’s claims were barred by limitations before she died,

the claims Reda’s estate made to the disputed tracts were also barred.

                      Payments on tract purchased by Rawls

      Because the claim made by Reda’s estate to the smaller of the disputed tracts

was barred by limitations, the Estate’s claim that Ray was not entitled to the

payments Rawls made toward his purchase of the smaller tract after Reda died also

                                         16
has no merit. Although Reda no longer owned the smaller of the disputed tracts when

she deeded it to Rawls, Ray’s testimony in the probate hearing indicates that he

ratified Reda’s agreement by accepting the payments that Rawls made toward his

purchase of the tract after he learned that Reda signed a contract to sell the tract to

Rawls. As AFCI’s sole shareholder, and because AFCI was the owner of the smaller

tract according to the deeds that were in evidence, Ray had the right to ratify Reda’s

agreement with Rawls.9 See Land Title Co. of Dallas, Inc. v. F.M. Stigler, Inc., 609

S.W.2d 754, 756-57 (Tex. 1980) (explaining that “[r]atification may occur when a

principal, though he had no knowledge originally of the unauthorized act of his


      9
          The Estate did not challenge Ray’s standing in the probate court or in the
appeal to assert claims on behalf of AFCI. AFCI is an entity that was not a party to
the proceedings below, and is not a party to the appeal. Nevertheless, the Texas
Estates Code allows “[a]ny interested person” to file a written complaint in probate
court setting forth why an inventory to an estate is erroneous or unjust. Tex. Est.
Code Ann. § 309.103(a)(1) (West 2014). The term “interested person” is broadly
defined by the Estates Code to include, among others, those “having a property right
in or claim against an estate being administered[.]” Tex. Est. Code Ann. § 22.018(1)
(West 2014). As AFCI’s sole shareholder, Ray is the beneficial owner of AFCI’s
assets since its charter was forfeited. See Regal Constr. Co. v. Hansel, 596 S.W.2d
150, 153 (Tex. Civ. App.—Houston [1st Dist.] 1979, writ ref’d n.r.e.) (explaining
that shareholders of a corporation whose charter has been forfeited may prosecute
or defend actions involving corporate property because “legal title to the assets
remains in the corporation, but the beneficial title to the assets of the corporation is
in the stockholders”). As the beneficial owner of AFCI’s interest in the disputed
tracts, we conclude that Ray had the right to defend AFCI’s interest in the disputed
tracts. See Humble Oil & Refining Co. v. Blankenburg, 235 S.W.2d 891, 894 (1951).
Nonetheless, we further note that because the suit was not filed as a trespass to try
title claim, we express no opinion about the validity of the deeds Ray executed in
December 2014 as AFCI’s sole shareholder conveying the disputed tracts away from
AFCI.
                                          17
agent, retains the benefits of the transaction after acquiring full knowledge”). We

hold that the Estate failed to prove that it was legally entitled to receive any of the

money that Ray received from Rawls toward his purchase of the smaller tract. We

further hold that the Estate has no claim that Reda had a right to collect the balance

of the money that Rawls owes under the agreement he made to purchase the smaller

of the disputed tracts.

                                   Judicial Estoppel

      “The doctrine of judicial estoppel ‘precludes a party from adopting a position

inconsistent with one that it maintained successfully in an earlier proceeding.’”

Pleasant Glade Assembly of God v. Schubert, 264 S.W.3d 1, 6 (Tex. 2008) (quoting

2 Roy W. McDonald & Elaine G. Carlson, Texas Civil Practice § 9.51 (2d ed.

2003)). In this case, the county judge applied the doctrine to prevent Ray and Linda

from relying on the duly recorded deeds that reflect the disputed tracts were

conveyed to AFCI. On appeal, Ray and Linda challenge the trial court’s conclusion

that judicial estoppel applies to their claims.

      While the reasons the county judge concluded that judicial estoppel applied

to Ray’s and Linda’s claims are not entirely clear, it appears the judge based the

court’s conclusion largely on schedules that Ray filed in connection with his

personal bankruptcy. The evidence in the hearing shows that Ray filed for

bankruptcy in 2006. On the schedule listing his assets in bankruptcy court, Ray

                                           18
represented that his shares of AFCI had a “par value” of $0.00. The county judge

apparently viewed this representation as tantamount to a representation that AFCI

had no assets, implying that the representation of par value reflected that AFCI did

not claim to own the disputed tracts. However, the schedules do not state that AFCI

did not own the disputed tracts, and the assets and liabilities of AFCI are not listed

in the bankruptcy schedules that were filed in the probate proceeding that is the

subject of the appeal.

      A representation that a corporation has a stated par value, whether it is $0.00

or some other number, does not reflect whether it has assets. With respect to stock,

the term “par value” is the value assigned to the stock in the company’s corporate

charter. See NEW OXFORD AMERICAN DICTIONARY 1278 (3d ed. 2010) (defining the

term “par value” as “the nominal value of a bond, share of stock, or a coupon as

indicated in writing on the document or specified by charter”).Therefore, listing of

a stock’s par value does not show whether or not the company has any assets.

Moreover, none of Ray’s bankruptcy filings in evidence in the probate proceeding

represented that AFCI did not own the disputed tracts. The Estate also did not prove

that Ray was required to identify the assets held by AFCI on the schedules that he

filed of his assets, but the schedules do show that Ray owns stock in AFCI.

      The county judge also apparently concluded that judicial estoppel applied in

this case because Ray failed to list AFCI as a “single asset real estate” business on

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his bankruptcy schedules. In our opinion, the evidence presented in the hearing failed

to demonstrate that AFCI was required to be listed in Ray’s bankruptcy filings as a

“single asset real estate” business.

      The Bankruptcy Code defines the term “single asset real estate” as “a single

property or project, other than residential real property with fewer than 4 residential

units, which generates substantially all of the gross income of a debtor who is not a

family farmer and on which no substantial business is being conducted by a debtor

other than the business of operating the real property and activities incidental

thereto.” 11 U.S.C.S. § 101(51B) (LEXIS through Pub. L. No. 115-60). When Ray

filed for bankruptcy, the evidence before the county judge proved that AFCI owned

the two disputed tracts. Therefore, the evidence before the county judge showed that

AFCI owned more than a single tract of property. Additionally, the evidence did not

show that the disputed tracts were ever operated by AFCI as one project; instead, the

evidence shows that one of the tracts was operated by Ray’s parents as a farm at that

time. Moreover, the evidence presented in the hearing does not address whether

AFCI’s operation of the disputed tracts produced substantially all of Ray’s gross

income when Ray filed for bankruptcy.

      We hold the trial court erred by ruling that judicial estoppel prevented Ray

and Linda from claiming that AFCI owned the disputed tracts.




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                                         Conclusion

      The evidence does not support the county judge’s conclusion that the disputed

tracts were owned by Reda’s estate when she died. Instead, the evidence admitted in

the hearing conclusively proved that Reda did not own the tracts on the date of her

death. We reverse the trial court’s order of February 8, 2016, and we render judgment

that the disputed tracts are not part of Reda’s estate. We further hold that the Estate,

as a matter of law, has no reimbursement claim for the payments that Rawls made

to Ray toward Rawls’ agreement to purchase the smaller of the disputed tracts.

Finally, we hold that the trial court erred in ordering Rawls, who was not a party to

the proceedings, to make all of the remaining payments under his agreement to

purchase the smaller tract to Crystal, as the executor of Reda’s estate. See Tex. R.

App. P. 43.2(c).

      REVERSED AND RENDERED.

                                               ___________________________
                                                      HOLLIS HORTON
                                                           Justice

Submitted on July 5, 2017
Opinion Delivered October 19, 2017

Before Kreger, Horton and Johnson, JJ.




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