M. Rex Kirby, Cheryl A. Bryan and Joyce M. Smith v. Brenda Stephenson, Independent of the Estate of Betty Williams

• Court: Court of Appeals of Texas
• Decided: July 26, 2006
• Docket: 12-05-00227-CV
• Status: Published

Opinion

OPINION HEADING PER CUR

                NO. 12-05-00227-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

M. REX KIRBY, CHERYL A. BRYAN       §                      APPEAL FROM THE

AND JOYCE M. SMITH,    

APPELLANTS

V.

§                      COUNTY COURT AT LAW # 3

BRENDA STEPHENSON, INDEPENDENT

EXECUTRIX OF THE ESTATE OF

BETTY WILLIAMS, DECEASED,

APPELLEE   §                      SMITH COUNTY, TEXAS

MEMORANDUM OPINION

            This is a probate case.  In three issues, Mikael Rex Kirby, Cheryl Ann Bryan, and Joyce Marie Smith appeal an order denying their objection to the inclusion of real property, annuities, and two promissory notes in the inventory and appraisement filed by Brenda Stephenson, independent executrix of their mother’s estate.  We reverse and render in part and affirm in part.

Background

            On March 13, 1998, C.S. Williams (“husband”) and Betty A. Williams (“wife”) executed wills together.  In pertinent part, the wife’s will stated:

Contractual Nature of Will

2.01  Contract With Spouse.  So that no contention may arise at a later time, I declare that I make all provisions in this will as a contract between myself and my husband, C.S. WILLIAMS.  I make these contractual provisions in consideration of the Last Will and Testament executed by my husband on the same date hereof, and in consideration of the provisions made in his Will on my behalf.  I further agree that neither the terms of the contractual bequests made in this Will, nor the contract made by the terms of this Will may be changed, modified, varied, or in any way revoked except as specified in Section 2.02 below.

2.02  Revocation.  While my husband and I are both alive, the contractual bequests in this Will may be changed, modified, varied, or revoked only by an agreement in writing signed by both of us.  My husband and I reserve the right to make such an agreement without the consent of any other person.  The contractual bequests made in this Will, and the contract made by the terms of this Will may not be changed, modified, varied, or in any way revoked after my husband has died leaving the contractual bequests of his Will, executed as of the same date hereof, unrevoked and unmodified.

Her husband executed a will with the exact same language, but substituted her name for his in Article Two and throughout the remainder of the will.  Both wills stated that the wife had three children, Mikael Rex Kirby, Cheryl Ann Bryan, and Joyce Marie Smith (“wife’s children”), and that the husband had two children, Constance D. Williams Stewart and Cynthia D. Williams Reynolds (“husband’s children”).  Both wills named the other spouse as the independent executor or, alternatively, Brenda Stephenson (“independent executrix”).¹ 

            In May of 2002, the husband died.  The wife probated his will as a muniment of title in June of 2002.  In October of 2002, the wife sold what had been the couple’s homestead and received net proceeds of $195,467.53. She immediately purchased a new house for $118,128.88. She also purchased two annuities totaling $90,000.00, naming both her children and her husband’s children  as beneficiaries.

            In April of 2003, the wife changed the beneficiaries on the annuities to only her three children.  She also signed a gift deed conveying the new house to her three children.  On November 27, 2003, the wife died.  On December 1, 2003, the wife’s children filed their gift deed to the new house in the Smith County land records.

            The independent executrix filed the wife’s will for probate.  She later filed an inventory and appraisement listing the new house, the annuities, and two promissory notes from Kirby and Bryan in the respective amounts of $11,000.00 and $12,000.00 as property of the estate.  The wife’s children objected to the listing of these four items as property of their mother’s estate.  The probate court then held a hearing on their objection to the inventory and appraisement and ultimately denied their objection.  Following the entry of its order, the trial court entered findings of fact and conclusions of law.  The wife’s children timely filed their appeal to the probate court’s order.

                                                                                                            Issues

            In their first issue, the wife’s children contend that she had the authority to give the real property and annuities to them.  In their second and third issues, the wife’s children contend that the two promissory notes had been destroyed, that they were not property of the estate, and that any evidence to the contrary was hearsay.

Standard of Review

            Findings of fact in a bench trial have the same force and dignity as a jury verdict and are reviewable for legal and factual sufficiency of the evidence by the same standards as applied in reviewing the jury’s findings.  Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991).  In reviewing legal sufficiency, we consider only the evidence and reasonable inferences supporting the finding.  Minnesota Mining and Mfg. Co. v. Nishika Ltd., 953 S.W.2d 733, 738 (Tex. 1997).  Anything more than a scintilla of evidence is legally sufficient to support the finding.  Id.  More than a scintilla of evidence exists when the evidence supporting the finding, as a whole, “rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.”  Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997) (quoting Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex. 1995)).  When considering a factual sufficiency challenge, courts of appeals must consider and weigh all of the evidence, not just the evidence that supports the verdict.  Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998).  We can set aside the verdict only if it is so contrary to the great weight and preponderance of the evidence that the verdict is clearly wrong and unjust.  Id. at 407.

            The standard of review for conclusions of law is whether they are correct.  Dickerson v. DeBarbieris, 964 S.W.2d 680, 683 (Tex. App.–Houston [14th Dist.] 1998, no pet.).  We will uphold conclusions of law on appeal if the judgment can be sustained on any legal theory the evidence supports.  Material P’ships, Inc. v. Ventura, 102 S.W.3d 252, 257 (Tex. App.–Houston [14th Dist.] 2003, pet. denied).  Thus, incorrect conclusions of law do not require reversal if the controlling findings of fact support the judgment under a correct legal theory.  Id. 

Contractual Wills

Applicable Law

            Mutual wills are testamentary instruments executed pursuant to an agreement between two or more persons to dispose of their property in a particular manner, each in consideration of the other.  Reynolds v. Estate of Benefield, 995 S.W.2d 885, 887 (Tex. App.–El Paso 1999, pet. denied).  The primary characteristic of a joint and contractual will is a comprehensive plan for the disposition of all property owned by both parties.  Wiemers v. Wiemers, 683 S.W.2d 355, 356 (Tex. 1984).  There must be intent on the part of each testator to treat the balance remaining from the estate of the first to die and the estate of the last to die as a single estate and to provide for the disposition of the combined estates remaining on hand at the death of the last to die.  Pearce v. Meek, 780 S.W.2d 289, 292 (Tex. App.–Tyler 1989, no writ).  The party who asserts that the will is contractual has the burden of establishing that fact.  Estate of Osborne, 111 S.W.3d 218, 220 (Tex. App.–Texarkana 2003, pet. dism’d).  A contract to make a will or devise, or not to revoke a will or devise, if executed or entered into on or after September 1, 1979, can be established only by provisions of a written agreement that is binding and enforceable or provisions of a will stating that a contract does exist and stating the material provisions of the contract.  Tex. Prob. Code Ann. § 59A(a) (Vernon Supp. 2005). 

            The execution of a joint will or reciprocal wills does not by itself suffice as evidence of the existence of a contract.  Id.  § 59A(b).  A two pronged test governing contractual wills requires that

(1)           the gift to the survivor is not absolute and unconditional, even though it may initially appear to be so; and

(2)           the balance remaining from the estate of the first to die and the estate of the last to die is treated as a single estate and jointly disposed of by both testators in the secondary dispositive provisions of the will.

Reynolds, 995 S.W.2d at 888.

Analysis

            In reviewing the plain language of the contract in both the husband’s and the wife’s will, there is nothing to indicate that the husband and wife did not intend to make a comprehensive plan to dispose of their combined estates at the death of the last to die.  Both husband and wife describe their wills as a contract between themselves.  There is no evidence in the record that either the husband’s or the wife’s will was revoked.  Read literally, both wills provide that half of the husband and the wife’s combined estates would go to the husband’s children and half to the wife’s children.  In its findings of fact and conclusions of law, the probate court concluded that the new house and the annuities owned by Betty A. Williams at the time of her death were property of the estate of Betty A. Williams.  This conclusion is supported by both the evidence in the case and the law of this State.  The wife’s childrens’ first issue is overruled.

Two Promissory Notes

            In their second and third issues, the wife’s children contend that the two promissory notes executed by Mikael Rex Kirby and Cheryl Bryan in the respective amounts of $11,000.00 and $12,000.00 had been destroyed and could not be property of the estate.  The independent executrix did not brief these issues and stated at oral argument that she did not contest these two issues.  Further, the presumption that property listed in an inventory and appraisement exists cannot stand against unimpeached competent evidence.  Moore v. Wooten, 280 S.W. 742, 747 (Tex. Comm’n App. 1926).  In the record before us, Kirby testified that his mother had destroyed these two promissory notes in his presence in the early 1980s and that they did not exist.  No competent evidence controverted this testimony.  Accordingly, we sustain the wife’s childrens’ issues two and three.

Disposition

            Having sustained the wife’s children’s issues two and three, the order of the trial court denying the objections to the two promissory notes is reversed and judgment is rendered sustaining the objections to these two promissory notes.  The remainder of the probate court’s order is affirmed.

                                                                        JAMES T. WORTHEN   

                                                                                  Chief Justice

Opinion delivered July 26, 2006.

Panel consisted of Worthen, C.J. and Griffith, J.

(PUBLISH)

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¹ Brenda Stephenson is a niece of the husband.