ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

TERRY CRABTREE, JUDGE

DIVISION II

RUBIN DARDEN

APPELLANT

V.

FLOYE DARDEN

APPELLEE

CA 00-1481

SEPTEMBER 26, 2001

APPEAL FROM THE UNION COUNTY CHANCERY COURT

[NO. E 00-499-2]

HONORABLE EDWARD P. JONES,

CHANCERY JUDGE

REVERSED IN PART AND AFFIRMED IN PART

This is a domestic-relations case. The Union County Chancery Court granted a divorce to the appellee, Floye Darden, from the appellant, Rubin Darden, on September 12, 2000. In addition, the chancellor identified and distributed the parties' marital property. On appeal, appellant claims that the chancellor clearly erred in (1) finding that appellant's annuity was marital property; and (2) failing to find that the evidence overcame the presumption that certain real property was marital property. We reverse in part and affirm in part.

On September 8, 1995, the parties married. On May 30, 2000, the parties separated, and on June 1, 2000, appellee filed a complaint for divorce. The chancery court entered a decree of divorce on September 12, 2000, and in that decree the chancellor made several findings. He found that a USG Annuity and Life Company annuity policy with a surrendervalue of $10,648 was a marital asset. The court further found that two tracts of real property owned by appellant were also marital property.

For appellant's first point on appeal, he contends that the chancellor clearly erred in finding that his annuity was marital property. At trial, appellee testified that appellant sold a forty-acre tract of property to his brother and that he owned that tract prior to meeting appellee. She also stated that she took the $16,000 received from that sale to a local agent so that an annuity could be purchased. Appellee further testified that the annuity was purchased in appellant's name with appellee listed as the primary beneficiary. Appellant testified that due to his medical condition, he could not remember precisely where the funds for the purchase of the annuity came from, but that the money used to purchase the annuity came from assets acquired prior to the marriage that he received from his oil company business.

Our standard of review in chancery cases is well settled. Chancery cases are reviewed de novo on appeal. Hunt v. Hunt, 341 Ark. 173, 15 S.W.3d 334 (2000). With respect to the division of property in a divorce case, we affirm the chancellor's findings unless they are clearly erroneous. Jablonski v. Jablonski, 71 Ark. App. 33, 25 S.W.3d 433 (2000). Due deference is given to the chancellor's superior ability to determine the credibility of the witnesses and the weight to be accorded their testimony. Hunt v. Hunt, supra.

Marital property is all property acquired by either spouse subsequent to the marriage, with certain exceptions listed in Ark. Code Ann. § 9-12-315(b) (Repl. 1998). The relevant exception in this case is contained in section 9-12-315(b)(2), which provides that propertyacquired in exchange for property acquired prior to the marriage is not marital property. Whether this exception applies depends upon whether appellant actually used nonmarital property to acquire the annuity.

A review of the evidence at trial clearly reflects that the funds used to purchase the annuity were obtained through the sale of appellant's separate property. The predecessor property was either a tract of land inherited by appellant prior to his marriage to appellee, or proceeds from his business earned prior to his marriage to appellee. In any event, the evidence was uncontroverted that the proceeds from the sale of appellant's separate property were never co-mingled with marital property, and were immediately used to purchase the annuity solely in appellant's name. We believe that the chancellor's finding that the annuity constituted marital property was clearly erroneous, and accordingly, we reverse that portion of the chancellor's order.

Next, appellant claims that the chancellor erred when he found that two tracts of real property were marital property. The general rule in Arkansas is that once property is placed in both spouses' names, there is a presumption that the property is held in tenancy by the entirety. Creson v. Creson, 53 Ark. App. 41, 917 S.W.2d 553 (1996). This presumption is strong, and it can be overcome only by clear and convincing evidence, partially because the alternative is a resulting trust the establishment of which, under such circumstances, requires that degree of proof. Ramsey v. Ramsey, 259 Ark. 16, 531 S.W.2d 28 (1975).

Appellant argues that he presented evidence to overcome the presumption of marital property. In his decree, the chancellor found that a twenty-acre tract constituting the maritalresidence and a forty-acre tract that was sold to a third party during the term of the marriage, were marital assets. The chancellor based this decision on the fact that appellee produced a deed upon which she alleged was the signature of appellant. According to the deed admitted into evidence, appellant transferred ownership of the two tracts of land from himself to the parties jointly. Based upon this evidence, a presumption arose that the parties owned the property as tenants by the entirety. Creson, supra. Appellant argues that he rebutted this presumption with testimony concerning the deeds, evidence of his poor health, and the transfer of other accounts from himself to appellee.

At trial, appellee testified that shortly after September 4, 1995, appellant transferred his ownership interest in his residence to the two of them as husband and wife. She also stated that during that same month, appellant put a forty-acre tract of land that was previously in his name alone into their names as husband and wife. However, appellee testified that she felt no obligation to reciprocate and deed appellant an interest in her separate property. Appellant testified that he did not sign either deed and did not recall ever intending to give half of his real property to appellee. Further, appellant stated that he never told appellee he was giving the property to her.

Essentially, we do not agree that the evidence presented at trial clearly rebutted the presumption that the two tracts of real estate were marital property. The chancellor relied upon appellee's testimony rather than appellant's testimony in reaching his decision. We cannot find that the chancellor clearly erred on this issue.

Reversed in part, affirmed in part.

Jennings and Baker, JJ., agree.