Case Title: Tuttle v. Webb

Citation: 

Docket Number: 111911

State: virginia

Court: Virginia Supreme Court

Date: 2012-09-14T00:00:00Z

Document:
PRESENT:  Kinser, C.J., Lemons, Goodwyn, Millette, Mims and 
Powell, JJ., and Koontz, S.J. 
 
LLOYD VERNON TUTTLE, JR. 
 
 
 
OPINION BY 
 v.  Record No. 111911 
CHIEF JUSTICE CYNTHIA D. KINSER 
 
 
 
September 14, 2012 
HENRY B. WEBB, EXECUTOR 
OF THE ESTATE OF GRACE TUTTLE 
 
FROM THE CIRCUIT COURT OF PRINCE EDWARD COUNTY 
Thomas V. Warren, Judge Designate 
 
Lloyd Vernon Tuttle, Jr. (Lloyd) appeals the circuit 
court's judgment holding that execution of a check payable to 
his wife, Grace Overton Tuttle (Grace), excluded the funds from 
Grace's augmented estate and that therefore Lloyd's written 
consent or joinder was not required when Grace, before her 
death, gifted the funds to her son.  Lloyd also appeals the 
circuit court's judgment holding him liable for more than one-
half of an indebtedness evidenced by a note executed by him and 
Grace as co-makers.  Because we conclude that Lloyd's check to 
Grace did not exclude those funds from Grace's augmented estate 
pursuant to Code § 64.1-16.1(B)(i) and that Lloyd is liable for 
only one-half of the joint indebtedness, we will reverse the 
circuit court's judgment. 
I. REVELANT FACTS AND PROCEEDINGS1 
 
In 2010, Grace died and was survived by her husband, Lloyd, 
their two adopted children, and Henry B. Webb (Henry), her son 
                     
1 The facts and proceedings are set forth in a written 
statement of facts filed pursuant to Rule 5:11(e). 
 
2 
from a previous marriage.  In her will, which was probated in 
the Prince Edward County Circuit Court Clerk's Office, Grace 
named Henry as the executor of her estate, and devised and 
bequeathed her entire estate to him.2 
Lloyd timely filed a claim for an elective share in Grace's 
augmented estate pursuant to Code § 64.1-13.  Subsequently, 
Henry filed a complaint in the circuit court, naming Lloyd as a 
defendant and seeking, among other things, a determination of 
the value of Lloyd's elective share in Grace's augmented estate.3 
The circuit court, sitting as the trier of fact, heard 
evidence regarding Grace's estate.  In 2005, Lloyd and Grace 
sold their jointly owned real property located in Chesterfield 
County and deposited the sale proceeds of $118,000 into their 
joint checking account.  After using a portion of the proceeds 
to pay jointly owed debts, Lloyd executed two checks drawn on 
the joint checking account, each in the amount of $41,750.  One 
check was payable to Lloyd, and the other check was payable to 
Grace.  Lloyd never cashed his check, and his $41,750 remained 
in the joint checking account.  Grace, however, used the 
                     
2 Grace excluded Lloyd and her adopted children from 
inheriting anything under her will. 
3 A petition to establish the amount of an elective share 
may be filed by a surviving spouse, a decedent's personal 
representative, or any party in interest.  Code § 64.1-16.2(D); 
Chappell v. Perkins, 266 Va. 413, 418, 587 S.E.2d 584, 587 
(2003). 
 
3 
proceeds from her check to obtain two cashier's checks, each 
issued in the amount of $20,875 and payable to Henry.4 
Henry testified that the cashier's checks were a gift from 
Grace and that Lloyd knew of the gift.  Lloyd, however, 
testified that Grace told him that she gave Henry the money to 
invest for her. 
The circuit court held that by executing the check to 
Grace, Lloyd "made a gift of $41,750[] from joint funds of the 
parties to his wife Grace," and that the check to Grace 
represented his consent in writing to a gift from Lloyd to 
Grace.  Thus, the court concluded that Grace's gift of those 
funds to Henry required no further "written joinder" by Lloyd as 
the funds were already excluded from Grace's augmented estate. 
In her will, Grace devised to Henry a parcel of real 
property, located in the Town of Farmville, that she previously 
had received as a gift from her mother.  That real property was 
the residence of Lloyd and Grace and was encumbered by a deed of 
trust, which Grace had executed as the sole owner of the 
property.  The deed of trust secured the payment of a note in 
the principal amount of $50,000, which both Lloyd and Grace had 
                     
4 Although there is a discrepancy in the written statement 
of facts with regard to the date Grace and Lloyd deposited the 
proceeds from the sale of their real property into their joint 
checking account and the date Grace acquired the cashier's 
checks, it does not affect the Court's analysis of the issues on 
appeal. 
 
4 
executed as co-makers.  They used $25,000 of the loan amount to 
repair the Farmville residence, but Lloyd withdrew the remaining 
$25,000 and deposited that sum into an account held solely in 
his name.  Lloyd stipulated that, as co-maker of the note, he 
was liable for one-half of the principal amount, i.e., $25,000, 
together with interest, and that such sum should be deducted 
from his elective share of Grace's augmented estate. 
The circuit court accepted an appraisal of the Farmville 
residence showing the property to be worth $170,000.  The court 
found that Grace had failed to maintain that real property as 
separate property to the extent of $120,000 because Grace and 
Lloyd used part of the loan proceeds to repair and improve the 
property.  Thus, the circuit court included the amount of 
$120,000 in Grace's augmented estate.  Of that amount, Lloyd's 
elective share, one-third of the augmented estate, was $40,000.  
The circuit court further concluded that Lloyd and Grace's 
estate each should repay one-half of the first $25,000 of the 
loan proceeds because that amount was used to repair the 
Farmville residence.  Because Lloyd withdrew the remaining 
$25,000 and deposited the funds into an account in his name 
alone, the court concluded that he must repay the second $25,000 
withdrawal.  Thus, the circuit court attributed $37,500 of the 
$50,000 indebtedness to Lloyd and ordered that amount deducted 
 
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from his $40,000 elective share, leaving Lloyd with the net sum 
of $2,500. 
The circuit court incorporated these and other findings 
regarding Grace's augmented estate in a final order.  We awarded 
Lloyd an appeal on two issues: (1) whether the circuit court 
erred by holding that the $41,750 check payable to Grace 
excluded those funds from her augmented estate and that no 
further "written joinder" by Lloyd was required when Grace gave 
the money to Henry; and (2) whether the circuit court erred by 
requiring Lloyd to repay one-half of the $25,000 loan proceeds 
used to repair the Farmville residence in addition to the other 
$25,000 of the indebtedness.  We will address the issues in that 
order. 
II. ANALYSIS 
A. Standard of Review 
The issues on appeal present mixed questions of law and 
fact.  Thus, "[w]e give deference to the trial court's factual 
findings and view the facts in the light most favorable to the 
prevailing part[y,]" but we review the trial court's application 
of the law to those facts de novo.  Caplan v. Bogard, 264 Va. 
219, 225, 563 S.E.2d 719, 722 (2002). 
 
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B. Augmented Estate 
 
 
As relevant to this appeal, the term  
augmented estate means the estate passing by 
testate or intestate succession, real and 
personal, after payment of allowances and 
exemptions . . . to which is added the sum 
of the following amounts: 
 
. . . . 
 
3. The value of property transferred to 
anyone other than a bona fide purchaser by 
the decedent at any time during the marriage 
to the surviving spouse, to or for the 
benefit of any person other than the 
surviving spouse, to the extent that the 
decedent did not receive adequate and full 
consideration in money or money's worth for 
the transfer, if the transfer is of any of 
the following types: 
 
. . . . 
 
d. Any transfer made to or for the 
benefit of a donee within the calendar year 
of the decedent's death or any of the five 
preceding calendar years to the extent that 
the aggregate value of the transfers to the 
donee exceeds $10,000 in that calendar year.  
 
Code § 64.1-16.1(A)(3)(d). 
To prevent one spouse from disinheriting the other by 
transferring property before the transferor dies, this statutory 
provision imputes to the decedent's augmented estate the value 
of property transferred by the decedent during the marriage.  
Chappell v. Perkins, 266 Va. 413, 421, 587 S.E.2d 584, 588 
(2003).  If, however, property was "transferred by the decedent 
 
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during marriage with the written consent or joinder of the 
surviving spouse," the value of the transferred property is not 
included in the transferring spouse's augmented estate.  Code 
§ 64.1-16.1(B)(i).  The exclusion in subsection (B)(i) is at 
issue in the case now before us.  The party seeking such an 
exclusion of property from a decedent's augmented estate carries 
the burden of establishing it.  Chappell, 266 Va. at 418, 587 
S.E.2d at 587. 
We addressed this particular exclusion in Chappell.  There, 
the real property at issue, known as the Elliotts Creek 
property, was purchased by a husband and wife as tenants by the 
entirety.  Id. at 417, 587 S.E.2d at 586.  Subsequently, they 
executed a deed of gift conveying the property to the wife in 
fee simple, and the wife then transferred the Elliotts Creek 
property to her revocable living trust.  Id.  The wife died and 
the husband filed a claim for his elective share of the 
decedent's augmented estate.  Id. at 416, 587 S.E.2d at 585.  
The decedent's estate asserted that the  
transfer of the property by [the wife] and [the 
husband] to [the wife] was a transfer of property 
by [the wife] made with the written consent or 
joinder of [the husband] and therefore, that the 
value of the property should be excluded from 
[the decedent's] augmented estate under Code 
§ 64.1-16.1(B)(i). 
 
Id. at 421, 587 S.E.2d at 588. 
 
8 
We concluded that the circuit court did not err by 
including the Elliotts Creek property in the decedent's 
augmented estate.  Id. at 422, 587 S.E.2d at 589.  Holding that 
"subparagraph (B)(i) of Code § 64.1-16.1 applies when a spouse 
consents to a specific conveyance that removes the property 
from, or decreases the value of, the transferring spouse's 
estate," we concluded that "the transfer of the Elliotts Creek 
property to [the wife] in fee simple did not remove the property 
from, or decrease the value of, [the decedent's] estate."  Id.  
We explained that "[i]f a transfer does not remove the property 
from the transferring spouse's estate, the consent of the non-
transferring spouse, while a consent to the transfer, is not a 
consent to any diminution in the estate by virtue of that 
transfer."  Id.  Thus, the Elliotts Creek property did not come 
within the exclusion in Code § 64.1-16.1(B)(i) because the 
husband's consent to the transfer of the property to the wife 
was not a consent to a decrease in the value of the decedent's 
estate.  Id. 
Relying on Chappell, Lloyd argues that his consent to the 
transfer of joint funds to Grace alone was not a written consent 
to or joinder in her subsequent gift to Henry.  Lloyd further 
contends the circuit court erred by concluding that he did not 
need to consent to or join in Grace's gift to Henry because the 
funds were already excluded from Grace's augmented estate.  
 
9 
Henry, however, contends that Lloyd's act of preparing, signing 
and giving the $41,750 check to Grace with the knowledge that 
she intended to give the proceeds to Henry constituted his 
written consent, or at least his joinder, in Grace's subsequent 
gift to Henry. 
Contrary to Henry's assertions, the check from Lloyd to 
Grace merely transferred $41,750 of jointly owned funds to 
Grace.  At that juncture, the funds gifted to Grace became her 
sole property.  Lloyd's execution and gift of the check to Grace 
did not remove those funds from, or decrease the value of, 
Grace's estate.  In other words, the check represented Lloyd's 
consent to the transfer of joint property to Grace alone but it 
did not signify his consent to remove the property from or 
diminish the value of Grace's estate.  And, contrary to the 
circuit court's holding, Lloyd's gift to Grace did not exclude 
those funds from her augmented estate.  Consequently, Lloyd's 
written consent to or joinder in Grace's subsequent gift to 
Henry was still required.  Thus, the circuit court erred by 
excluding the sum of $41,750 from Grace's augmented estate. 
C. Joint Indebtedness 
 
According to the written statement of facts, Grace and 
Lloyd executed the $50,000 note "as co-makers."5  Whether that 
note "was secured or unsecured[] is not material in fixing 
                     
5 The actual note is not in the record of this case.  
 
10 
liability."  Brown v. Hargraves, 198 Va. 748, 751, 96 S.E.2d 
788, 791 (1957).  "Where the obligation to pay the debt is 
personal, joint and several, as here, it is the nature of the 
obligation which controls."  Id.  The debt evidenced by a note 
is created when the note is executed.  Id. at 752, 96 S.E.2d at 
791.  Thus, as co-makers, Grace and Lloyd became primarily 
liable, jointly and severally.  See id. at 751-52, 96 S.E.2d at 
791. 
When two or more persons are jointly liable to pay a debt, 
"[t]he law implies a contract between [the co-obligors] to 
contribute ratably toward the discharge of the obligation."  Van 
Winckel v. Carter, 198 Va. 550, 555, 95 S.E.2d 148, 152 (1956). 
A party's "right to contribution does not arise out of any 
express contract or agreement between the parties to indemnify 
each other, but on the broad principles of equity which courts 
of law enforce that where two persons are subject to a common 
burden it shall be borne equally between them."  Houston v. 
Bain, 170 Va. 378, 389-90, 196 S.E. 657, 662 (1938). 
Lloyd argues that nothing under the augmented estate 
statutes makes him, as a co-maker of the $50,000 note, liable 
for more than one-half of the principal amount of that 
indebtedness.  Henry contends, however, that the circuit court 
correctly found Lloyd liable for one-half of the first $25,000 
draw from the loan proceeds because that sum was used to improve 
 
11 
the Farmville residence, thus increasing both the value of that 
property and the value of Lloyd's elective share.  Henry argues 
that because Lloyd withdrew the second $25,000 for his sole 
benefit, unlike the first $25,000 draw that benefited both Lloyd 
and Grace, the circuit court acted within its discretion by 
requiring Lloyd to pay a disproportionate amount of the 
indebtedness.  We do not agree with Henry. 
In Brown, the administrator of an estate sought guidance on 
whether a decedent's personal estate should be used to pay a 
debt evidenced by two notes jointly executed by the decedent and 
the surviving spouse.  198 Va. at 748-49, 96 S.E.2d at 789.  
While the defendant did not question the general rule that "a 
personal debt of the decedent . . . is to be paid primarily out 
of his personalty," the defendant asserted that an exception 
applied when "the entire estate is vested in the surviving joint 
tenant[] and the estate of the deceased [took] nothing in the 
property."  Id. at 750, 96 S.E.2d at 790.  We disagreed and held 
the decedent and the surviving spouse, as 
the makers of the notes . . . . made and signed 
personal obligations, whereby each of them became 
personally liable to the holders of the notes for 
the full amounts thereof, and, as between 
themselves, jointly and severally liable. Subject 
to a common burden to be borne equally, each had 
the right to look to the other for reimbursement 
for any amount expended beyond the proportionate 
amount required to be paid by each of them. Thus 
each was entitled to the right of contribution, 
an equity which arises when one of several 
 
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parties liable on a common debt discharges the 
obligation for the benefit of all.  
 
Id. at 751, 96 S.E.2d at 791. 
Here, both Grace and Lloyd, as co-makers of the $50,000 
note, became personally liable to the holder of the note for the 
full amount owed and as between themselves, jointly and 
severally liable.  Because both Grace and Lloyd became 
"[s]ubject to a common burden to be borne equally," each was 
entitled to the right of contribution from the other for one-
half of the joint indebtedness evidenced by the note.  Id.  
Thus, the circuit court erred by charging Lloyd with more than 
one-half of the total indebtedness. 
III. CONCLUSION 
In sum, the circuit court erred by failing to include the 
sum of $41,750 in Grace's augmented estate.  The court further 
erred by requiring Lloyd to pay more than one-half of the total 
indebtedness evidenced by the $50,000 note.  Therefore, we will 
reverse the judgment of the circuit court and remand this case 
for further proceedings consistent with this opinion. 
Reversed and remanded.