holding that two mirror image wills were mutual and reciprocalSummary of this case from Stephens v. Caruthers
49610 Record No. 930788
June 10, 1994
Present: All the Justices
Since the legislature did not intend Code Sec. 20-155 to require that all contracts between spouses be in writing while permitting other persons to make such contracts orally, that section should not have been applied to disallow enforcement of a contract between spouses for the disposition of their property upon the death of their survivor, and the case is remanded for further proceedings.
Wills, Trusts and Estates — Contracts for Disposition of Estate — Reciprocal Wills — Code Sec. 20-155
A husband and wife executed reciprocal wills after advice of the drafting attorney that the instruments created a contract that the surviving spouse would leave the property to the beneficiaries as the wills were originally drawn. The wife died two months later, and two weeks thereafter the husband revoked the prior will and replaced it with an instrument altering the roster of beneficiaries. He died two months later and his replacement will was probated. Beneficiaries under the earlier wills brought this suit seeking a share of the husband's estate. After an ore tenus hearing at which the scrivener testified, the chancellor found that this evidence was not sufficient to establish a reciprocal will, and found for defendants. The plaintiffs appeal.
1. Contracts to make mutual and reciprocal wills are enforceable if established by clear and satisfactory proof, whether direct or circumstantial.
2. A decision of the trial court sitting without a jury will not be set aside on appeal unless the judgment is plainly wrong and without supporting evidence. However, conclusions based on evidence not in material conflict is not binding on appeal, and the trier of fact may not arbitrarily disregard uncontradicted evidence of unimpeached witnesses which is not inherently incredible and not inconsistent with facts in the record.
3. The attorney's testimony in the present case was not inherently incredible and was consistent with the facts of the case. It clearly and satisfactorily indicated that the spouses understood the contractual nature of the wills they executed together. Hence the trial court finding that there was insufficient evidence to establish a reciprocal will was plainly wrong.
4. Sufficient consideration for the husband's contractual agreement was supplied by the mutual agreement that the third parties named in the wills would be beneficiaries under each spouse's will.
5. The provisions of Code Sections 20-149, -150 and -155, with respect to premarital and marital agreements are not applicable to this spousal contract to benefit third persons after death of both spouses, since the agreement here did not relate to rights and obligations of the marital relationship itself. Hence the agreement here is not unenforceable simply because it was oral.
Appeal from a judgment of the Circuit Court of the City of Hampton. Hon. Walter J. Ford, judge presiding.
Reversed and remanded.
Harry J. Kostel, for appellants.
Louis J. Richman, Jr., for appellees.
This case involves the mutual and reciprocal wills of a husband and wife. The primary issue is whether, as a matter of law, the testimony of the scrivener of the wills established a contract between the spouses for the disposition of their property upon the death of the survivor.
In May or June 1991, James G. Keene and his wife, Rebecca T. Keene, asked Gerald D. Robertson, an attorney, to prepare wills for them leaving their respective properties to the survivor. The wife had no children; the husband had children by a prior marriage.
When Robertson told the Keenes that the survivor would have the power to dispose of their combined estates, the Keenes responded that they wanted the survivor's estate divided among eight persons. Thereafter, each spouse designated four relatives as beneficiaries. Robertson then explained to the Keenes that if they signed mutual and reciprocal wills, "this would be a contract between the two of them, that they would each, the ultimate survivor, would agree to leave the property as the wills were originally drawn."
Robertson testified that he had not drawn a joint will, or a separate contract reflecting such an agreement, nor had he recited the agreement in the wills because he thought the Keenes "had a clear understanding of . . . how the ultimate beneficiaries would take the property." Instead, Robertson prepared a will for each spouse under the terms of which the surviving spouse would receive the entire estate of the first decedent and the eight parties named by the Keenes in their wills would receive the estate of the survivor.
On June 27, 1991, both wills were executed. The wife died two months later, on August 31. The husband revoked his June 27 will by executing a will on September 10, 1991. That will left his property to his two sons and the same four relatives he had named in his June 27 will. The husband died on November 7, 1991, and shortly thereafter his September 10 will was probated.
The persons named by the wife as beneficiaries in her June 27 will filed this suit against the executor and beneficiaries of the husband's September 10 will. In this suit, they sought their share of the husband's estate under the June 27 will. At an ore tenus hearing, the plaintiffs presented Robertson's testimony and other evidence and the defendants presented no testimony. After argument, the court concluded that Robertson's testimony was "not sufficient to establish a reciprocal will" and found for the defendants. The plaintiffs appeal.
Dorothy Black, Lal e Bee Hicks, Larry J. Wright, Curtis J. Wright, and Charles O. Wright are named as complainants in this action. The copy of the husband's June 27 will in the record lists Dorothy W. Black, Lal a Bee Hicks, Larry J. Curtis, and Charles O. Wright as the four persons apparently named by the wife. The record contains no explanation of the insertion of the name of a fifth plaintiff or of the discrepancy between the underlined names in the will and bill of complaint.
We recognized the enforceability of contracts to make mutual and reciprocal wills in Williams v. Williams, 123 Va. 643, 648-49, 96 S.E. 749, 751 (1918). Proof of such contracts may be supplied by "competent witnesses who testify to admissions of the testators, or it may result as an implication from the circumstances and relations of the parties and what they have actually provided for by the instrument. Direct evidence is not necessary." Id. at 649-50, 96 S.E. at 751. However, such proof must be "clear and satisfactory." Id. at 649, 96 S.E. at 751.
Further, the standard of review of the evidence in this case has been established by statute and our cases construing that statute.
When a case is decided by a court sitting without a jury and, as here, parties object to the decision on the ground that it is contrary to the evidence, the judgment of the trial court will not be set aside, "unless it appears from the evidence that such judgment is plainly wrong or without evidence to support it." Code Sec. 8.01-680.
However, a trial court's conclusion based on evidence that is "not in material conflict" does not have this binding effect on appeal. The trier of fact must determine the weight of the testimony and the credibility of the witnesses, but it "may not arbitrarily disregard uncontradicted evidence of unimpeached witnesses which is not inherently incredible and not inconsistent with facts in the record."
Applying these principles, we conclude that the uncontradicted testimony of Robertson, an unimpeached witness, was "not inherently incredible" and was consistent with the facts in the case. That testimony clearly and satisfactorily indicated that both spouses understood that, upon execution of their wills, they were contracting to leave the property remaining at the survivor's death to the eight parties named in those wills. Under these circumstances, the trial court's decision that the evidence was "not sufficient to establish a reciprocal will" was plainly wrong.
Even so, defendants note that the marital residence held by the husband and wife as tenants by the entirety was the wife's only property interest established by the record. Thus, the defendants contend, there was no consideration for the husband's alleged contractual agreement. We reject this argument because sufficient consideration is supplied by the mutual agreement that the third parties named as beneficiaries in each spouse's June 27 will would ultimately receive the balance of the survivor's estate. See Williams, 123 Va. at 648-49, 96 S.E. at 751.
Finally, the defendants argue that the contract cannot be enforced because it was an oral postnuptial agreement which was not in writing, as required by Code Sections 20-155 and -149. Code Sec. 20-155 provides:
Married persons may enter into agreements with each other for the purpose of settling the rights and obligations of either or both of them, to the same extent, with the same effect, and subject to the same conditions, as provided in Sections 20-147 through 20-154 for agreements between prospective spouses, except that such marital agreements shall become effective immediately upon their execution.
(Emphasis added.) Code Sec. 20-150 provides in pertinent part that parties to a premarital agreement may contract with respect to "[t]he disposition of property upon separation, marital dissolution, death" and the "making of a will . . . to carry out the provisions of the agreement[.]" Code Sec. 20-149 requires that a "premarital agreement shall be in writing and signed by both parties."
In support of their expansive reading of "marital agreements," the defendants note that their construction of Code Sec. 20-155 is consistent with Sec. 2-701 of the Uniform Probate Code, 8 U.L.A. 155 (1983), which requires written evidence of any party's agreement not to revoke a will. However, Virginia has not adopted such a provision, and we do not think that the legislature intended Code Sec. 20-155 to require that contracts between spouses be in writing, while permitting other persons to make such contracts orally.
Rather, we are of opinion that the emphasized portion of Code Sec. 20-155 clearly limits its provisions to those contracts affecting those "rights and obligations" that arise from the marital relationship. Here, each spouse's contractual intent to benefit third parties after the death of both spouses did not affect the "rights and obligations" arising from the Keenes's marital relationship. Thus, we conclude that Code Sec. 20-155 is inapplicable.
For these reasons, we will reverse the judgment of the trial court and remand this case for further proceedings consistent with this opinion.
Reversed and remanded.