Tennessee

Warning: The following opinion is provided for purposes of discussion only. We have not Shepardized™ this opinion, and do not know the subsequent disposition of this case nor whether the effect of the opinion has been overruled or superceded by other law.

Martha L. Thomas v. Joseph C. Thomas and Jean Thomas Myers,
1985.TN.1128 (Tenn.App. 08/01/1985)

COURT OF APPEALS OF TENNESSEE, MIDDLE SECTION AT NASHVILLE

1985.TN.1128

August 1, 1985

MARTHA L. THOMAS, SURVIVING SPOUSE OF REID N. THOMAS, JR., DECEASED, PLAINTIFF-APPELLANT

v.

JOSEPH C. THOMAS AND JEAN THOMAS MYERS, HEIRS AND WILL BENEFICIARIES AND JOSEPH C. THOMAS, EXECUTOR, DEFENDANTS-APPELLEES IN RE: THE ESTATE OF REID N. THOMAS, JR., DECEASED.

Wilson Probate. CofA No. 85-99-II. APPEAL FROM PROBATE COURT OF WILSON COUNTY, TENNESSEE AT LEBANON. HONORABLE HAYWOOD BARRY, JUDGE.

James R. Stallings, Jr., 107 West Market Street, Lebanon, Tennessee 37087, Attorney For Plaintiff-appellant

James H. Kinnard, 225 East Market Street, Lebanon, Tennessee 37087, Attorney For Defendants-appellees

Todd, Presiding Judge, Middle Section wrote the opinion. Concur: Samuel L. Lewis, Judge, Houston M. Goddard, Judge

The opinion of the court was delivered by: Todd

HENRY F. TODD, PRESIDING JUDGE, MIDDLE SECTION

This is a proceeding in Probate Court for the administration of the estate of Reid N. Thomas, who died testate on January 12, 1984. A number of controversies were presented to and decided by the Probate Judge, but there is no evidence that the proceeding has been concluded by a final judgment as required by TRAP Rule 3(a) for the prosecution of an appeal as of right. However, in view of the advanced stage of the proceedings, this factor is waived.

This appeal relates only to an effort of the widow to invalidate certain transactions by the deceased which are alleged to be in fraud of the widow's rights in violation of T.C.A. § 31-1-105 and/or testamentary in nature without the formality required of a will. The Probate Judge rejected the claims of the widow, and she has appealed, presenting three issues for review.

A brief historical background is necessary for an understanding of the problem facing this Court.

The prior marriage of deceased was terminated by the death of his first wife in 1981. Deceased and his first wife had two children, both adults at the time. Prior to the wife's death it was informally agreed that the son, Jose, would receive and preserve the family mansion house, and that the daughter, Jean, would receive the "liquid assets" accumulated from the operation of a jewelry store during the marriage. Deceased received the mansion and other assets under the will of his wife. After her death, deceased and the son informally "swapped" houses. Deceased moved into a house owned by the son and the son moved into the mansion, but no deeds were executed. The following chronology is material to the issues on appeal:

On May 1, 1982, deceased executed a deed conveying the mansion to the son for love and affection.

On May 11, 1982, deceased and the appellant widow were married.

On May 14, 1982, deceased executed a "Release of Debt", canceling the balance due at the death of deceased upon a note executed by the son to deceased for purchase price of the jewelry store or some interest therein.

On July 12, 1982; deceased executed his will leaving his entire estate to his children without mentioning his wife.

In August and September, 1982, deceased transferred to his daughter three certificates of deposit amounting to $48,372.02.

As a result of the transfers and release, the estate of testator was reduced to about $14,000.00.

The principal defenses to the widow's attack upon the transfers are that they were carried out pursuant to a plan conceived prior to the marriage and that deceased and his second wife had expended some $88,000.00 during their brief marriage. The widow's response to the latter allegation was that the expenditures were legitimate in every respect as evidenced by bank statements and checks.

For details of relevant transactions the testimony refers to 18 exhibits, which are listed in the transcript as follows:

Exhibit #1 Affidavit and checks 80

Exhibit #2 Bill of Sale 67

Exhibit #3 '82 Income Tax Return 80

Exhibit #4 '83 Income Tax Return 80

Exhibit #5 Affidavit 89

Exhibit #6 Affidavit 89

Exhibit #7 Affidavit 89

Exhibit #8 Affidavit 89

Exhibit #9 List of checks

Exhibit #10 Answers to Interrogatories

Exhibit #11 Last Will and Testament 99

Exhibit #12 Documents 106

Exhibit #13 Release of Debt 110

Exhibit #14 Check dated October, 1983 13

Exhibit #15 List of Household Items 30

Exhibit #16 Note 31

Exhibit #17 Book 35

Collective

Exhibit #18 Bills 50

Not a single one of the listed exhibits were transmitted to this Court as part of the evidentiary record. What appear to be 3 of the listed exhibits, nos. 10, 11 and 13 occur in the technical record, but the remainder are not found in or with the record on appeal.

The judgment of the Probate Judge reads in pertinent part as follows:

3. The money market certificates given to Jean M. Thomas, the only daughter of the decedent/testator Reid N. Thomas, Jr. are clearly in the nature of true intervivos gifts without intent to defraud the widow of her share of things, and outright gifts not part of the estate of the decedent.

4. That the release or forgiveness of certain business debt of Joe C. Thomas and James E. Adams by Reid N. Thomas, Jr., to take effect as his death, are not against the statute of wills or in the class of fraudulent conveyances to defeat the widow's share.

The first two issues presented by appellant are as follows:

1. Whether certain transfers of certificates of deposit to the decedent's daughter were fraudulent and intended to defeat the surviving widow's elective share of the decedent's estate, in violation of Tennessee Code Annotated, Section 31-1-105.

2. Whether the execution of the document entitled "Release of Debt" by the decedent, excusing payment of a certain promissory note, payable by the decedent's son, was in effect a fraudulent transfer, intended to defeat the surviving widow's elective share of the decedent's estate, in violation of Tennessee Code Annotated, Section 31-1-105.

The applicable statute is as follows:

31-1-105. Fraudulent conveyance to defeat share voidable. -- Any conveyances made fraudulently to children or others, with an intent to defeat the surviving spouse of his distributive or elective share, is voidable at the election of the surviving spouse. [Acts 1976 (Adj.S.), ch. 529, § 1; 1977, ch. 25, §§ 4, 5; T.C.A., §§ 31-105, 31-616.]

There is no fixed rule for determining when a transfer is fraudulent for purposes of this section. Each case must be determined on its own facts and circumstances. Factors to be considered are presence or absence of consideration, size of the transfer in relation to total estate, relations between the spouses at the time of the transfer, the source of the property transferred and all other surrounding circumstances. Warren v. Compton, Tenn. App. 1981, 626 S.W.2d 12, and authorities cited therein.

The issue of whether or not the transfers in question were fraudulent is a mixed question of law and fact which requires a de novo review of the evidence. In respect to the factual aspect of the issue, the judgment of the Trial Judge must be presumed to be correct unless the evidence preponderates otherwise. TRAP Rule 13(d).

Without access to the information allegedly contained in the numerous and voluminous exhibits omitted from the record, this Court is not in position to hold that the evidence preponderates against the factual finding of the Probate Judge. See In Re: Indemnity Insurance Co. of North America, Tenn 1980, 594 S.W.2d 705; Hamilton v. Moyers, 24 Tenn. App. 86, 140 S.W.2d 799 (1940); Bourne v. Barlar, 17 Tenn. App. 375 (1934); and prior decisions annotated in Tennessee Digest, Vol. 2a, Appeal and Error, § 695(1).

In order to perfect a record of evidence for consideration by an appellate court, all of the evidence to be transmitted to the appellate court must be filed with the trial clerk within 90 days after notice of appeal, along with proof of service of notice of such filing. TRAP Rule 24(b)(c). This is a cumulative filing of all desired evidence at one time after notice of appeal. The transcript or statement of the evidence is to be approved by the trial Judge and the exhibits are to be authenticated by him within 30 days after the expiration of the period for filing objections (15 days from filing of evidence with the clerk). Automatic authentication is based upon timely filing and expiration of the 15 day objection period and the 30 days period for authentication by the trial Judge.

It is thus seen that valid authentication of evidence, actual or automatic, is predicated upon timely and proper filing of such evidence with the trial clerk after notice of appeal.

The problem of missing exhibits is exacerbated by the fact, shown in the transcript, that some exhibits were not actually present at the trial, but were elsewhere and were to be presented to the trial Judge later for his study.

The transcript is in two volumes. Each concludes with a certificate of the Trial Judge that:

he foregoing was all of the evidence presented to the court.

Neither volume contains an exhibit, and no exhibit was transmitted separately.

In this state of the record, this Court cannot say that the evidence preponderates against the finding of the Probate Judge in respect to the first two issues which are therefore found to be without merit.

The third issue presented by appellant is as follows:

Whether the execution of the document entitled "Release of Debt" by the decedent was an attempted testamentary instrument and ineffective as such, due to noncompliance with the wills' statutes, Tennessee Code Annotated, Section 32-1-101, et seq.

It appears that the "Release of Debt" was one of several documents listed as Exhibit 12, above, and that it was probably re-listed as exhibit 13. As stated, there is a "Release of Debt" in the technical record which is probably the same, but the record does not so show.

The document in the technical record is not attached to a pleading or other record of proceedings, but is simply bound in the technical record as page 42 thereof. It bears a notation, "Exhibit 13", but no stamp or notation of filing with the Trial Clerk or Authentication by the Trial Judge. It is not a proper part of the technical record.

Even if the document were suitable for consideration on appeal, it is not deemed to be of such testamentary character as to require execution with the same formality as that of a will. Its concluding paragraph is as follows:

NOW, THEREFORE, for and in consideration of the sum of Ten Dollars ($10) cash in hand paid, the receipt of which is hereby acknowledged, and the love and affection that I have for my son, Joe C. Thomas, and the respect and admiration that I have for James E. Adams, I hereby agree that at the time of my death that any remaining indebtedness owed to me as a result of the sales contract of my interest in COX's to Joe C. Thomas and James E. Adams is to be forgiven and the debt is to be cancelled and of no further force and effect.

The instrument is not testamentary in character because it became effective upon its execution: that is the maker of the instrument was bound by its terms and could not revoke or rescind the instrument as in the case of a will.

The document is a contract, for a release is a species of contract. 76 CJS Release § 1, p. 629. For a valid consideration ($10.00) deceased agreed that the portion of the debt if any remaining unpaid at his death should be cancelled. The fact that the cancellation was to be effective in the future and the subject matter (balance due) was to be determined by a future contingency does not affect the contractual character of the instrument. Having been executed (and presumably delivered upon execution) it was as final and conclusive of the rights of the executing party as any other valid contract. A contract to release the debtor from an obligation upon the death of the obligee is a valid enforceable contract. Moore v. Brinkley, 200 N.C. 457, 157 SE 129, (1931).

In Fawcett v. Fawcett, 191 N.C. 679, 132 SE 796 (1926), it was held that an agreement that when either party died the bank shares of the deceased should become the property of the survivor was not a testamentary Disposition requiring the formality of a will.

If the release of debt be denominated a gift, it was a gift inter vivos and not a gift causa mortis, the difference being that a gift inter vivos vests an irrevocable right, whereas a gift causa mortis is liable to revocation by the donor and does not become irrevocable until the death of the donor. 38 C.J.S., Gifts § 4 p. 782.

Authorities cited by appellant have been examined and found not to be in point factually.

For the reasons stated, the judgment of the Probate Court is affirmed. Costs of this appeal are taxed against the appellant. The cause is remanded for such further proceedings, if any, as may be necessary and proper.

Affirmed and remanded.

CONCUR: SAMUEL L. LEWIS, JUDGE, HOUSTON M. GODDARD, JUDGE

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