Top 20 Texas Family Law Cases Case 5: COCKERHAM v. COCKERHAM.
We continue our Top 20 Texas Family Law Cases series with the COCKERHAM v. COCKERHAM case, which helped Texas divorce attorneys analyze the meaning in the definitions of joint and sole managed property.
Joint and Sole Managed Property in Texas Divorce Law
COCKERHAM v. COCKERHAM, 527 S.W.2d 162 (Tex. 1975)
COCKERHAM v. COCKERHAM Background
This case involved an appeal between E.A. Cockerham and Dorothy Cockerham, and the bankruptcy trustee involved in Dorothy’s bankruptcy. The trustee’s primary issues were the characterization of certain property as the separate property of E.A., and whether his separate property was subject to the creditors of the wife.
During the last few years of marriage, Dorothy owned a dress shop which was, apparently, unsuccessful and caused Dorothy to file for bankruptcy.
E.A. co-owned a dairy farm with his brother prior to marriage. During the marriage, E.A. bought out his brother and purchased his half of the farm with part loan and part cash (which was credited as husband’s one-half undivided interest).
In order to effect the transaction, title and deed documents were drafted that reflected a “sale” of the entire 320-acre tract of land to both E.A. and Dorothy. The trial court found that the method used to purchase the land was a “means of convenience” to complete the purchase, and testimony was sufficient to rebut the presumption of a gift.
The Court Decision
The trial court was correct in holding that E.A. had produced clear and convincing evidence that one-half of the 320-acre tract of land was his separate property. The land was, however, under the joint management of both parties, and thus both parties were liable for the debt. The Court further held that the dress shop liabilities, incurred during marriage, are joint liabilities, and thus, therefore the spouse’s separate property can be used to satisfy the joint liability of the spouses.
Significance of Case
The Cockerham Court used this cause to analyze the meaning in the definitions of joint and sole managed property. Of significance, is the following dicta regarding a distinction in the definition of earnings.
“The income from the dairy business was produced not only by the labor of the husband but also by the use of capital improvements which were community property and by the use of the land on which the business is located. Personal earnings, on the other hand, are earnings solely by physical or mental labor, unaided by capital, except insofar as may be necessary to supply the means of such labor as, for example, the ax of a woodcutter or the pen and paper of a writer.”COCKERHAM v. COCKERHAM, 527 S.W.2d 162 (Tex. 1975)
As it related to the dress shop, the Court further clarified the existence and definition of joint liability and determined that “[t]he fact of physical operation of a business, however, is not wholly determinative of the character, as sole or joint, of the debt incurred in its operation.” The Court further opined that even if a debt was characterized “community,” to determine if the debt was “joint,” the trial court would have to review the totality of the circumstances regarding the debt.
Top 20 Texas Family Law Cases: EGGEMEYER v. EGGEMEYER
The next case on our list is EGGEMEYER v. EGGEMEYER. Prior to Eggemeyer, there was some confusion as to whether a court could divest a party of their separate property upon divorce.