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IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE JUDITH TRENT DENTON v. HERBERT JACKSON DENTON, JR.
Direct Appeal from the Chancery Court for Sullivan County No. 15-246 Richard E. Ladd, Chancellor

No. E1999-02713-COA-R3-CV - Decided May 25, 2000

This is a divorce case. The parties were married in 1966; the following year, they purchased 37.6 acres of unimproved real property in Sullivan County. They acquired the property at a chancery court auction for $16,000. They subsequently constructed a log cabin with 2,294 square feet of living space, and commenced a farming operation on the premises. On April 19, 1979, the husband executed a quit claim deed to the wife ostensibly conveying to her his interest in the subject property, now improved with the residence -- property that previously had been owned by the parties as tenants by the entirety. Following a bench trial, the court below held that the value of the property at the time of the conveyance constitutes the wife's separate property1; it went on to hold that a portion of the increase in value of the property since then is separate property while the remainder is marital property. The husband appeals, contending that he did not intend to make a gift to the wife of his interest in the property. In the alternative, he argues that all of the increase in value is marital property. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed in Part; Reversed in Part; and Remanded SUSANO, J., delivered the opinion of the court, in which SWINEY , J., joined. GODDARD , P.J., not participating. John P. Chiles of Kingsport, Tennessee, and Thomas F. Bloom of Nashville, Tennessee, for the appellant, Herbert Jackson Denton, Jr. David S. Haynes of Bristol, Tennessee, for the appellee, Judith Trent Denton OPINION

The judgment of divorce declares the parties divorced and makes a number of other decrees regarding their property. Except to the limited extent indicated later in this opinion, none of these decrees are relevant to the issues on this appeal.

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The husband's issues in this case focus on (1) the classification of the parties' 37.6 acres of land improved with a log cabin residence and (2) the division of that property between the parties. Since this is a non-jury case, our review is de novo upon the record of the proceedings below. That record comes to us with a presumption of correctness as to the trial court's factual findings, a presumption that we must honor unless the evidence preponderates against those findings. Rule 13(d), Tenn. R. App. P. We review the trial court's conclusions of law de novo with no presumption of correctness. Adams v. Dean Roofing Co., 715 S.W.2d 341, 343 (Tenn. Ct. App. 1986). When addressing the property of divorcing parties, a court must first classify that property as marital or separate. Batson v. Batson, 769 S.W.2d 849, 856 (Tenn. Ct. App. 1988). Once classified, the separate property is awarded to the party to whom it is separate in nature, and the marital property is divided between the parties in an equitable fashion. Brock v. Brock, 941 S.W.2d 896, 900 (Tenn. Ct. App. 1996). In the instant case, the trial court held that the husband executed the quit claim deed for the purpose of vesting title to the property solely in the wife. The court was particularly influenced in its decision by the following language in the quit claim deed. It is expressly understood by and between the parties hereto that the purpose of this conveyance is to dissolve the tenancy by the entireties under which the parties have heretofore held title to the abovedescribed real property and to vest the full and complete title to same in the party of the second part, her heirs and assigns, subject only to the lien indebtedness hereinabove assumed by her. Commenting that it "ha[d] no choice," the court found that the subject property was "separate property when that Deed was signed." At another point in its opinion, the court opined that the deed "leaves me no alternative, other than to declare separate property on that made in April of 1979." The husband contends that the trial court erroneously decided that the execution of the quit claim deed required the court to find, as a matter of law, that the husband had made a gift to the wife of his interest in the property. The husband relies on unreported decisions2 of this Court for the proposition that the execution of a deed is not conclusive evidence of a gift. He argues that the execution of the quit claim deed in the instant case is not conclusive evidence of a gift but rather only rebuttable evidence of donative intent.

See Abney v. Abney, C/A No. 181, 1991 WL 16255 (Tenn. Ct. App. E.S., filed February 12, 1991); Robbins v. Robbins, C/A No. 01A01-9201-CV-00031, 1992 WL 187637 (Tenn. Ct. App. M.S., filed August 7, 1992).

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It is not entirely clear from the record whether the trial court found that the quit claim deed with the quoted language3 required the court to find, as a matter of law, that a gift had been made. As we have previously indicated, the trial court was obviously influenced by the deed's language; however, the record does not conclusively demonstrate that the court's use of the phrases "no choice" and "no alternative" meant that it was finding a gift solely because the law required such a finding. Another possible interpretation of the court's comments is that it felt compelled by the facts of the case, i.e., the preponderance of the evidence, to find that the husband had made a gift of his interest to the wife. It is not necessary in this case to decide exactly what motivated the trial court to find a gift from the husband to the wife. This is true because we find that the facts do not preponderate against a finding of a gift. Our focus is on the result reached by the trial court, i.e., that there was a gift. We must affirm the trial court if it reached the correct result even if we disagree with the reasoning employed by the court to arrive at that result. See Rule 36(a), Tenn. R. App. P.; see also Kelly v. Kelly, 679 S.W.2d 458, 460 (Tenn. Ct. App. 1984). The wife testified that in April, 1979, when her health was such that she had decided to take a medical leave of absence from her teaching position, her husband announced that he had quit his job "last week" and was going to devote full time to building houses. She testified that he said -apparently before she told him of her planned leave of absence -- "that's all right. We'll live off what you make and I'll be bringing in a little...too." She testified that he thereafter gave two reasons for conveying the property to her: This is what he said. He said that this would be my security. That I would never have to worry about not having a home, no matter what decisions he made, I would have a home. And the other one was he was in a small business at that time and it was a high risk of liability. And I did not request it. He actually just simply did this. According to the wife, her husband executed the deed against the advice of his attorney. Husband denied at trial that he intended to make a gift of his interest in the subject property to his wife; but his testimony regarding the conveyance is strikingly similar to that of his wife: Q. Right, you said you did not have any legal advise about signing and delivering the Deed. Had you engaged in real-estate transactions before this Quitclaim Deed, you had of course had you not? A. I bought the place that we live on.

The husband correctly points out that the language of the quit claim deed in the instant case is functionally identical to deed language in the Abney case, which, as previously indicated, is a case where we found that no gift had been made. See 1991 WL 16255 at *2.

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Q. So you knew that when you received the Deed, you owned the property, correct? A. Well, at the time I signed this, there's no discussion. I didn't get any advice on this particular matter. Q. You said that, but knew what a Deed did. It transfers title of property, real estate, doesn't it? A. Roughly. Q. Yeah, roughly. You knew you were transferring title, your half interest to this real estate to your wife. You knew that would do that, didn't you? A. That was for her security. That was the reason for it. Q. I understand that's the reason, but you knew it would transfer it, didn't you? A. Give her security, that's the reason for it. Q. And you knew it would, in fact, transfer title, didn't you? A. It would transfer title. When the parties' testimony is considered along with the language of the quit claim deed and the entire record,4 we cannot say that the evidence preponderates against a finding that the husband made a gift of his interest in the property to the wife. If he wanted his wife to feel secure, and if he executed the deed to achieve this result, it logically follows that the way he was going to make her feel secure was to put the property in her name, so that, regardless of what happened in his new business venture, she would own the property outright. Thus, while, as a general proposition, we agree with the husband that a quit claim deed is not conclusive evidence of a gift in every case, we cannot say that the trial court erred in its finding of a gift in view of the totality of the facts of this case.

There is evidence in the record that the wife, post-deed, made major decisions regarding the property without the involvement of the husband. For example, the wife, on her own, leased a portion of the property to her father and later obtained a home equity loan on the property. The making of these major decisions, without the involvement of the husband, is further proof tending to support the wife's position that the deed was executed for the purpose of transfering husband's interest as a gift.

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In Batson v. Batson, 769 S.W.2d 849 (Tenn. Ct. App. 1988), we said the following: This Court has construed [T.C.A.

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