                                   In The
                              Court of Appeals
                     Seventh District of Texas at Amarillo
                             ________________________

                                  No. 07-13-00172-CV
                             ________________________

     IN THE MATTER OF THE MARRIAGE OF SUSAN ELIZABETH MCMAHEN
      AND JOE DYKE MCMAHEN AND IN THE INTEREST OF Z.L.M., A CHILD



                          On Appeal from the 46th District Court
                                 Wilbarger County, Texas
                Trial Court No. 26475, Honorable Dan Mike Bird, Presiding



                                      June 6, 2014

                           MEMORANDUM OPINION
                Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.


      This case is about a division of property as a consequence of divorce and

whether a gift to three people to avoid gift tax consequences was actually a gift to only

one person. The total amount of the gift was $50,000, and it was made to Joe Dyke

McMahen, his then-wife Susan, and one of their children, Jake McMahen. Susan’s

parents, Carl and Nancy Samuelson, made the gift via three checks in 2003 containing

the words “a gift” written in the memo section of each instrument. Two checks were in
the amount of $20,000 while the third was for $10,000. Joe Dyke and Susan used all of

the monies to buy a house shortly thereafter.        Furthermore, both Nancy and Carl

indicated that the gifts were made in the manner they were due to the federal gift tax

laws and to avoid excessive gift tax liability. Yet, they also informed the trial court that

they intended to make a gift only to their daughter Susan. Neither party cited us to

anything of record suggesting that the Samuelsons amended their 2003 tax return to

reflect the supposedly true nature of the $50,000 disposition. Nonetheless, the trial

court found that they intended to gift the entire sum to Susan alone and that there was

clear and convincing evidence that the three checks were “written in consideration of gift

tax consequences and do not evidence the intent to make a gift to Joe Dyke McMahen

or Jake McMahen.” The substance of this appeal attacks that finding; that is, each

issue is directly or indirectly dependent upon it. And, among other things, Joe Dyke

contends that the finding lacks legally and factually sufficient evidentiary support. We

agree, reverse in part and remand in part.

       Standard of Review and Applicable Law

       A finding withstands a legal sufficiency challenge if the record contains more than

a scintilla of evidence to support it. BMC Software Belgium, N.V. v. Marchand, 83

S.W.3d 789, 795 (Tex. 2002). A finding is factually sufficient if it is not so against the

weight and preponderance of the evidence as to be clearly wrong and unjust. In re

Marriage of Royal, 107 S.W.3d 846, 850 (Tex. App.—Amarillo 2003, no pet.). Yet, a

somewhat different standard may apply when the burden of proof at trial is one other

than a “preponderance of the evidence.” For instance, where a party is obligated to




                                             2
prove a claim by clear and convincing evidence, we utilize a higher standard of review

when assessing a finding’s legal and factual sufficiency. In re J.F.C., 96 S.W.3d 256,

266 (Tex. 2002). There, we assess whether the evidence was enough to produce in the

mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought

to be determined. TEX. FAM. CODE. ANN. § 101.007 (West 2014).

        Next, property acquired by either spouse during marriage is presumed to be

community property. Id. § 3.003(a) (West 2006); Pearson v. Fillingim, 332 S.W.3d 361,

364 (Tex. 2011).         That presumption is subject to rebuttal, though.                    The spouse

attempting to rebut it must do so via clear and convincing evidence. TEX. FAM. CODE

ANN. § 3.003(b). So, the evidence of record here must be of such quantum so as to

enable the fact finder to form a firm conviction or belief that the entire $50,000 in

question was the separate property of Susan.

        Next, statute tells us that property acquired by a spouse during marriage by gift is

the recipient’s separate property. TEX. FAM. CODE ANN. § 3.001 (West 2006).1 But to

constitute a gift, the disposition must satisfy various criteria. It requires donative intent

on the part of the donor, delivery of the property, and acceptance of that property. In re

Lang, No. 07-06-00106-CV, 2008 Tex. App. LEXIS 2067, at *5 (Tex. App.—Amarillo

March 19, 2008 no pet.); In re Royal, 107 S.W.3d at 852.                        Moreover, the window

through which we look when considering the issue is that existent at the time of the

conveyance. In re Lang, 2008 Tex. App. LEXIS 2067, at *5; accord Bush v. Bush, 336

S.W.3d 722, 744 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (stating the same).


        1
          Gifts to spouses jointly are not community property; rather, each spouse takes half of the gift as
their separate property. In re Royal, 107 S.W.3d 846, 851 (Tex. App.—Amarillo, no pet.).


                                                     3
         Finally, we consider a passage from our prior opinion in In re Royal worthy of

comment here. In that case, the husband (Jeremy) and wife (Adria) bought a home.

Part of the purchase price was paid through a loan from the Kays, who were Jeremy’s

grandparents. The latter eventually forgave $40,000 of the loan via their intention to

make a gift to both their grandson and his spouse.           Furthermore, the grandfather

structured the gift as he did to minimize his estate and gift tax liabilities. Upon the

divorce of the two gift recipients, the grandson contended that the entire gift was his

alone.     The trial court disagreed and awarded both Jeremy and Adria an equal

percentage of it. Jeremy attacked that determination. In deciding whether the evidence

was sufficient to support it, we not only noted the existence of evidence indicating that

the gift was to both Jeremy and Adria but made the following observation:

         . . . equity does not support Jeremy's argument that the trial court was
         obligated to resolve the conflicting evidence in favor of finding all of the
         Kays' gifts were to him alone. To do so would be to permit Jeremy and the
         Kays to utilize Adria's gift tax exemption at the time of the gifts, but to
         preclude her from benefitting from those gifts upon the dissolution of the
         marriage.

In re Royal, 107 S.W.3d at 852 (Emphasis added).

         We now turn to the record before us. That it contains some evidence supporting

the trial court’s finding is clear. As previously mentioned, the Samuelsons themselves

disclosed to the trial court, some nine years after the fact, that they intended the entire

$50,000 to be their daughter’s as an advancement of her inheritance. Yet, in 2003, they

did not write her a $50,000 check or hand her that sum in cash. Rather, they wrote

three different checks payable to three different people.         At the bottom of each

instrument appeared the words “a gift.” Absent was any other writing suggesting that


                                              4
the sums represented by each instrument were intended for a particular purpose or

were intended to go to Susan or that the expenditure of the proceeds was conditioned in

any respect. Nor did either donor tell Joe Dyke, at the time his check was delivered to

him, that the sum actually belonged to Susan. Rather, Carl acknowledged that the

check to Joe Dyke came without limitations. That Joe Dyke negotiated the $20,000

check made payable to him is undisputed, as well. 2 Also undisputed is the evidence

that each check was deposited into a joint account and that the proceeds were used as

partial payment for the family abode.

        More importantly, both Carl and Nancy had a particular reason for distributing the

checks in the way they did.             It is undisputed that they intended to avoid gift tax

consequences, and missing from this record is evidence that either filed amended or

corrected tax returns reflecting their purported intent to gift the entire $50,000 to their

daughter. Also missing is evidence that the purported advancement to Susan of her

inheritance was memorialized in a will or other legal document before the donors

testified at trial.

        So, what we have here is a situation quite akin to that in Royal. The donors

made unconditional gifts, took advantage of the gift tax laws in structuring those gifts,

and allowed the recipients to reap benefit from them.                     Yet, it was not until their

descendant became embroiled in a divorce that the donors opted to reveal their

supposedly true intent. “To . . . permit . . . [Susan] and the . . . [Samuelsons] to

utilize . . . [Joe Dyke’s] gift tax exemption at the time of the gifts, but to preclude . . .
        2
          Of course, Susan testified that her parents intended all the money to be a gift to her, while Joe
Dyke said that the transaction was a gift to the family. She further indicated that she may have spoken
with her husband about it before its occurrence. Yet, what these two people may have believed is of little
import compared to what the donors did and intended, for it is the donors’ intent that controls.


                                                     5
[him] from benefitting from those gifts upon the dissolution of the marriage” contradicts

equity.3 In re Royal, 107 S.W.3d at 852; see also Williams v. Williams, No. 02-08-0033-

CV, 2008 Tex. App. LEXIS 9238, at *13 (Tex. App.—Fort Worth December 11, 2008, no

pet.) (mem. op.) (considering the way in which the transaction was described on the gift

tax return as evidence of what the transaction depicted, that is, a gift). It may be that

some evidence supports the trial court’s finding. It may be that we must defer to the trial

court’s interpretation of historical fact and resolution of evidentiary contradictions. Yet,

equity coupled with the overwhelming weight of observable evidence existent in 2003

(not disclosed years later in an effort to help a daughter) render the trial court’s finding

that Susan alone was the recipient of a $50,000 gift manifestly wrong and unjust. As

the old adage goes, “actions speak louder than words.” The actions undertaken by the

Samuelsons in 2003 speak louder than words uttered in 2012, which words not only

happen to contradict their prior action but also happen to favor their daughter in a

divorce proceeding.

        Because the finding in question materially affected the manner in which the trial

court divided the marital estate of Joe Dyke and Susan, we have no choice but to

reverse that portion of the judgment dividing the marital estate and remand for further

proceedings.




        3
         Susan attempts to criticize our opinion in Royal by asserting: “ . . . to find that equity is a factor
to consider when determining the donor’s intent runs contrary to Texas gift law analysis as it has stood for
many years.” The “equity” at issue is not simply what we thought just or right. Instead, it involved the
simple notion that one should be bound by what he said, which, in this case, is the manifestation of intent
made to the federal government. The inequity comes in allowing donors to misrepresent a matter to the
government, secure a tax benefit from that misrepresentation, and later contradict that representation to
secure a different benefit for a family member. Simply put, courts should not be party to such deceit.


                                                       6
       Characterization of Guns

       One last issue needs consideration.                     It involves firearms that Joe Dyke

considered to be his separate property. He contends that the trial court erred in 1)

failing to so find and 2) including them in its evaluation of the value of the community

property. We overrule the issue.4

       According to the record, Susan testified that some of the firearms were

purchased during marriage and others were in Joe Dyke’s possession when they

married.      Yet, there was no specific testimony as to which guns fell within which

category. And, in response to being asked whether Joe Dyke claimed that some of the

guns were his separate property, Joe Dyke replied, “no, Ma’am, they were my father’s,”

he (Joe Dyke) had custody of them, some belonged to his brother, and they had yet to

divide them. An inventory of the firearms also indicates that some may belong to Joe

Dyke’s son. Given the uncertain tenor of the recorded evidence, we cannot say that the

trial court erred in not finding them to be Joe Dyke’s separate property.

       That portion of the judgment dividing the marital estate is reversed. All other

portions of the judgment are affirmed.                  And, the cause is remanded for further

proceedings on the matter of dividing the marital estate.5




                                                                             Brian Quinn
                                                                             Chief Justice


       4
        All of the guns except one were awarded to Joe Dyke by the trial court when dividing the
community estate.
       5
           Our disposition of the first point relieves us from having to address the others.


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