Estate of Gray, In re, 4774-P

• Decision Date: 27 January 1987
• Docket Number: No. 4774-P,4774-P
• Citation: 729 S.W.2d 668
• Parties: In re The ESTATE OF Oleta GRAY, Deceased.
• Court: Tennessee Court of Appeals

Page 668

729 S.W.2d 668

In re The ESTATE OF Oleta GRAY, Deceased.

No. 4774-P

Court of Appeals of Tennessee,

Western Section.

Jan. 27, 1987.

Application for Permission to Appeal

Denied by Supreme Court

May 11, 1987.

Harold F. Johnson, Jackson, for appellants.

Warmath and Boyte, Humboldt, for appellee.

TOMLIN, Presiding Judge, Western Section.

This litigation surrounds the estate of Oleta Gray, deceased (hereafter "deceased"). She died testate, leaving all of her estate to her children by a former marriage, naming them Executors of her estate (hereafter "Executors"). Husband filed a Petition for Elective Share in the Law and Equity Court of Gibson County. Later by oral motion, he asked for a year's support and homestead to be set aside to him. Executors filed a Petition for Partition by Sale. The chancellor held that Husband was entitled to an elective share in the deceased's one-half undivided interest in real estate owned by Husband and Deceased as tenants in common, notwithstanding the existence of a contractual agreement relied upon by Executors. Husband was also awarded a year's support in the amount of $5,200 and homestead in the amount of $5,000. The chancellor also found that certain certificates of deposit in the names of Deceased and Executors were valid gifts to her children and were not fraudulent conveyances.

Both Husband and Executors have appealed. Executors raise the following issues: (1) whether the chancellor erred in holding that Husband was an "heir-at-law" of Deceased; (2) whether the filing of a petition for elective share was equivalent to dissenting from the will so as to entitle Husband to claim a year's support allowance under T.C.A. § 30-2-102; (3) whether the award of a year's support by the chancellor was supported by the evidence; (4) whether the award of a year's support was excessive considering the limited personal assets of the estate; and (5) whether Husband's oral application to have homestead set aside was adequate in light of T.C.A. § 30-2-201, et seq. Husband's appeal challenged the action of the chancellor in failing to hold the gifts of certificates of deposit to be fraudulent conveyances. As outlined hereafter, we reverse in part, affirm in part, modify in part and remand.

Deceased died testate in March, 1984 survived by her Husband and two adult children from a previous marriage. Deceased's will, duly probated, provided that her two children, named Executors of the estate, should receive her entire estate. Husband then filed a Petition for Elective Share pursuant to T.C.A. § 31-4-102. Executors filed a Petition for Partition by Sale of four parcels of real property owned by the parties as tenants in common during Deceased's lifetime. All four parcels were subject to a written agreement entered into between Husband and Deceased at or following their purchase.

The parcels acquired by Husband and Deceased in their joint names were subject to an agreement which contained in part the following language stating that they were to hold the property as

tenants in common, whereby each are to have a one-half undivided interest in said property, the survivor not to take the whole, thereby, the heirs at law of the said Oleta Gray are to have her one-half undivided interest in the event that said property is owned by said parties at the time of her death. It being expressly agreed and understood that if the said children become the owners of said one-half undivided interest the said Allen C. Gray shall have the priority to purchase their interest in the event they elected to sell same.

At a hearing below on Executor's motion to dismiss Husband's Petition for Elective Share, Husband made an oral motion to have set aside to him a year's support allowance along with homestead in the parties' residence. No written amendment to the pleadings was ever filed by Husband. Husband also claimed that he was entitled to an elective share and a year's support out of three certificates of deposit found in the names of Deceased and her two children, contending these were fraudulent conveyances.

The chancellor treated Husband's oral motion for a year's support and homestead as an amendment to his Petition for Elective Share. He also found that Husband, as the surviving spouse, was one of the heirs-at-law of the Deceased and was thus entitled to an elective share of one-third of Deceased's one-half undivided interest in the parcels of real estate held by the parties as tenants in common during their lifetime. In holding that Husband's Petition for Elective Share was tantamount to dissenting from the will, the chancellor proceeded to award Husband a year's support in the amount of $5,200. In awarding Husband homestead, the trial court ordered the residence, owned by the Deceased, to be sold with $5,000 of the proceeds to be paid to Husband as homestead allowance and the balance ultimately divided equally between the Executors and Husband. The chancellor decreed partition by sale, directing that the proceeds of sale of the four parcels of real estate owned by Husband and Deceased as tenants in common be divided two-thirds to Husband and one-sixth to each of the two Executors. As to the certificates of deposit, the chancellor found that there was no evidence of an intent on the part of Deceased to defraud Husband; thus they were valid gifts from the Deceased to Executors.

I. HEIRS-AT-LAW.

Without question, Husband and his deceased wife acquired title to the four parcels of real estate as tenants in common. It is also uncontroverted that under the agreement entered into by them at the time or shortly after taking title to the respective parcels of property, each waived his and her right to survivorship. As previously noted, each agreement provided that "the heirs at law of the said Oleta Gray are to have her one-half undivided interest in the event that said property is owned by said parties at the time of her death." The chancellor found Husband to be an heir-at-law. Executors contend that at the time the agreement was entered into, the statute governing descent and distribution did not include a surviving spouse as an heir-at-law, and that the law as of the date the agreement was entered into rather than status of the law at the time of Deceased's death should control.

The term "heirs-at-law" refers to those persons who would stand to inherit real and personal property of a person dying intestate. See Alexander v. Wallace, 76 Tenn. 569, 572 (1881). In 1960 and 1961, the years the agreements were executed, the laws of descent and distribution governing real property provided that the sons and daughters of the deceased were to inherit real estate equally. See T.C.A. § 31-101. A surviving spouse was not included as an "heir-at-law."

By 1984, the year of Deceased's death, the laws of descent and distribution had been amended to include a surviving spouse as an heir-at-law. See T.C.A. § 31-1-101(5) and § 31-2-104(2).

In Cary v. Cary, 675 S.W.2d 491, 493 (Tenn.App.1984), Judge Franks, writing for the Eastern Section, said: "It is well settled that laws affecting construction or enforcement of a contract existing at the time of its making form a part of the contract. Robbins v. Life Ins. Co., 169 Tenn. 507, 89 S.W.2d 340 (1936)." See also Lunati v. Progressive Building & Loan Association, 167 Tenn. 161, 67 S.W.2d 148 (1934); McKissick v. McKissick, 25 Tenn. 75 (1845).

As stated in 17A C.J.S. Contracts § 330 (1963),

Generally, unless a contract provides otherwise, law applicable thereto at the time and place of its making, including constitutional and statutory provisions and judicial precedents, is as much a part of the contract as though it were expressly referred to and incorporated in its terms; and the same is true of the law of the place where it is to be performed. The reason for this rule ordinarily is that it is presumed that the parties had such law in contemplation when the contract was made. [emphasis added].

Both the case law of this state and text authority dictate that the agreements herein must be read in light of the laws of descent and distribution at the time they were executed. That being the case, Husband would not be an "heir-at-law" of the Deceased and thus would not be entitled to share in the Deceased's one-half undivided interest in the real property. Moreover, the terms of the agreement clearly indicate that Husband expressly waived any right of survivorship in Deceased's one-half undivided interest in this property. He cannot defeat this agreement by seeking an elective share. See Seat v. Seat, 172 Tenn. 618, 113 S.W.2d 751 (1938).

II. ONE YEAR'S SUPPORT.

Executors contend that Husband has not complied with the statutory requirements so as to entitle him to a year's support, contending that his oral motion asking for a year's support at a...