COURT OF APPEALS OF VIRGINIA

Before : Judges Haley, Beales and Alston Argued at Alexandria, Virginia

ANTHONY MICHAEL SFREDDO OPINION BY v. Record No. 0282

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- 4 JUDGE JAMES W. HALEY, JR. JANUARY 24, 2012 VANESSA SFREDDO

FROM THE CIRC UIT COURT OF FAUQUIER COUNTY James H. Chamblin, Judge Allison Crouch Coppage (Walker Jones, PC, on brief s ) , for appellant. David L. Duff (The Duff Law Firm, on brief) , for appellee.

I. INTRODUCTION In this divorce appeal, Anthony Michael Sfreddo (h usband) argues the trial court erred in (1) classifying his interest in a family

- owned company as marital; (2) awarding Vanessa Sfreddo ( w ife) an inappropriately large share of the value of that company; (3) valuing a second com pany partially owned by h u sband; and (4) failing to consider interest w ife could earn from the monetary award when determining spousal support. We agree the trial court should have classified h usband’s interest in the first company as his separate property, making it unnecessary
f

or us to consider the second assignment of error. Accordingly , s ince we reverse on the first issue, we necessarily remand the fourth issue for further consideration. W e affirm the trial court on the third issue

.- 2

- II. BACKGROUND The parties married in J une 1990. They separated in February 2009. During the marriage, h usband acquired an interest in two companies: Triple S Termite and Pest Control and APS Investments. At the time the parties separated, he owned a fifty percent interest in each.
In 200 4, h usband’s mother was the sole shareholder of Triple S and h usband and his brother worked for the company. All three served as corporate directors

— the only corporate directors

. Acting in their roles as the only corporate directors, t hey decided to tran sfer ownership of the company to h usband and his brother. Thus, at a shareholder meeting o n December 29, 2004, the company “sold” h usband and his brother two hundred shares each at a par value of one dollar per share, for a nominal purported consideration of two hundred dollars from each person. The company simultaneously resolved to redeem the mother’s shares for payments over a term of fifteen years. The brothers received their shares the next day , and the mother transferred her shares to the company t he following day. At trial, h usband, his mother, and his brother all testified they understood th e transferring of the company to the brothers to constitute a gift. Husband testified he never paid his mother anything for the stock and his brother likewis e never paid anything. He later continued by stating that “my mother gave it to us.” Husband’s brother also testified that he knew of no money changing hands. The mother testified: “In 2004, I agreed to give my two sons . . . two hundred shares of my s tock.” In 2003, Triple S had redeemed the half interest of another relative of h usband for $1.5 million dollars. Husband’s half interest in Triple S at the time of the hearing had a value of $1.636 million dollars.- 3

- Husband and his brother started anot her company known as APS Investments. Under this form, they purchased a house outside of Fredericksburg , Virginia

. To fund the purchase, the brother paid five thousand dollars as an earnest money deposit and $48,689 as a down payment.
Husband contribute d no money. The brothers shared an understanding that if t hey sold the house, they would return the brother his advance contributions first and then split the remaining funds. Nothing in writing secured the brother’s advances; rather, the brothers relied on mutual trust of repayment. The house had a value at the time of the hearing of $290,000. APS also had a bank account that at the time of the hearing had a balance of around $1,100. Aside from the bank account and the house , APS Investments owns no o ther property. Regarding the disputed shares of Triple S stock, t he circuit court found as a fact that h usband’s mother intended to make a gift of Triple S stock to him

. Despite this finding, the court concluded that since technically the stock came fr om the corporation, the corporation must also have intended to make a gift. The court found the evidence of a separate corporate intent to make a gift insufficient. I t held h usband had purchased the stock for value , apparently also finding h usband had pa id for it . Regarding APS Investments, the court determined the value of the real property and the bank account constituted the value of the company. The court did not consider the advances by h usband’s brother as affecting the value of APS. Finally, w if e received a monetary award of $690,000 and permanent spousal support of five thousand dollars per month

. Husband now appeals.- 4

- III. ANALYSIS
A. Classification of Company Stock Husband argues the trial court erred in classifying his stock in Triple S as marital property. 1 He maintains he received it as a gift, making it his separate property. 2
1. Standard of Review We recognize that under our standard of review we view the evidence in the light most favorable to the prevailing party, here w ife, as to the classification of the Triple S stock. White v. White , 56 Va. App. 214, 216, 692 S.E.2d 289, 290 (2010). We further recognize that the determination of donative intent is one of fact, Utsch v. Utsch , 266 Va. 124, 128, 581 S.E.2d 507, 508

- 09 (20 03), and that “because the trial court’s classification of property is a finding of fact, that classification will not be reversed on appeal unless it is plainly wrong or without evidence to support it,” Robinson v. Robinson , 46 Va. App. 652, 661, 621 S.E. 2d 147, 151 (2005) ( en banc ); see also Code § 8.01

- 680.

1 At trial, w ife argued h usband had conceded in interrogatory answers that Triple S was marital property. Husband responded the interrogatories at issue concerned only personal property, not business prop erty. In pronouncing its ruling from the bench, the trial court decided the gift issue on the merits without reference to the disputed discovery. On brief, w ife again asserts h usband’s interrogatory answers denied separate property status

. In Smith v. Mo untjoy , 280 Va. 4 6, 55 n.6, 694 S.E.2d 598, 603 n.6 (2010), our Supreme Court stated: “Mountjoy asserts that the issue of ratification is waived because Carol did not plead such as an affirmative defense. The circuit court, however, decided the issue, an d Mountjoy does not assign cross

- error claiming that the issue was not properly before the circuit court.” Here, w ife has not assigned as cross

- error the trial court’s decision as to the effect o f the interrogatory answer and , thus , we do not consider it.

2 We do not consider any issues regarding whether the trial court may be affirmed on the basis of fraud or corporate veil piercing. These issues were not raised by the parties at trial or in this Court, nor were they considered by the trial court (excep t for the trial court’s brief musing over whe ther it would be necessary for h usband, not w ife, to pierce the corporate veil). We decline to address these issues sua sponte

. We also do not consider whether the mother and the brothers had legal authority to issue the brothers shares without adequate consideration. The issue for this case is limited to whether w ife should receive a portion of the company h usband possesses.- 5

- Code § 20

- 107.3(A)(2) “creates a rebuttable presumption that property acquired during the marriage is marital property.” Lambert v. Lambert , 6 Va. App. 94, 99, 367 S.E.2d 184, 187 (1988). “[T]he party . . . claiming property as separate has the burden to produce satisfactory evidence to rebut this presumption.” Rexrode v. Rexrode , 1 Va. App. 385, 392, 339 S.E.2d 544, 548 (1986). However, gifts from others to a party represen t separate property. Code § 20

- 107.3(A)(1). When “[i]n the case of a gift

. . . there is credible evidence presented to show that the property was intended by the donor to be the separate property . . . the presumption is overcome, and the burden shifts to the party seeking to have the property classified as marital.” Stainback v. Stainback , 11 Va. App. 13, 17

- 18, 396 S.E.2d 686, 689 (1990) ; see also Rahbaran v. Rahbaran , 26 Va. App. 195, 210, 494 S.E.2d 135, 142 (1997). In order to show a gift, a party must prove several e lements: “(1) the intention on the part of the donor to make the gift; (2) delivery or transfer of the gift; and (3) acceptance of the gift by the donee.” Robinson , 46 Va. App. at 665, 621 S.E.2d at 154 (citation omitted). The party asserting the existe nce of a gift has the burden of proof by clear and convincing evidence. Cirrito v. Cirrito , 44 Va. App. 287, 303, 605 S.E.2d 268, 275 (2004).
2

. Corporate Intent to Gift The trial court held the stock transfer did not constitute a gift because h usband fa iled to prove corporate intent to make a gift. The court found proof of corporate intent necessary since the corporation issued new stock to h usband and redeeme d the mother’s shares, meaning
h usband received his stock from the company

. We observe that th e trial court found as a fact that h usband’s mother intended to make a gift of the Triple S stock to him and that there is no evidence but that the stock was delivered to an d accepted by h usband. We further observe that there is no evidence of commingling , transmutation or joint titling of the stock. One basis of the- 6

- trial court’s classification of the stock as marital was the purported failure of h usband to show corporate donative intent, an issue we now address.
A “corporation can act only through its o fficers and agents.” Pulliam v. Coastal Emergency Servs. of Richmond, Inc. , 257 Va. 1, 24, 509 S.E.2d 307, 320 (1999); see also Greenberg v. Commonwealth ex rel. Attorney Gen. of Va. , 255 Va. 594, 600, 499 S.E.2d 266, 269 (1998). “[C]orporate intent is s hown by the actions and statements of the officers, directors, and employees who are in positions of authority or have apparent authority to make policy for the corporation.” United States v. Basic Constr. Co. , 711 F.2d 570, 573 (4th Cir. 1983)

. “[T]he

c orporation, being an artificial person created by law, can have no separate intent of its own apart from those who direct its affairs.” Loftin & Woodard, Inc. v. United States , 577 F.2d 1206, 1244 (5th Cir. 1978) (citation omitted). Code § 13.1

- 673(B) states that “[a]ll corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of, its board of directors.” A board of directors has “‘the widest powers,’” for “‘all the var ious acts and contracts which a corporation may enter into are entered into by and through the board of directors.’” Sterling v. Trust Co. of Norfolk , 149 Va. 867, 878, 141 S.E. 856, 859 (1928) (quoting Taylor v. Sutherlin

- Meade Tobacco Co. , 107 Va. 787, 791, 60 S.E. 132, 134 (1908)). “The affairs of corporate bodies are within the exclusive control of their board of directors, from whom authority to dispose of their estates must be derived.” Clement v. Adams Bros.

- Paynes Co. , 113 Va. 547, 549, 75 S.E. 2 94, 295 (1912). Thus, the intent of the board of directors is necessarily the intent of the corporation, for the corporation as a fictitious entity formulates intent through the board.- 7

- Moreover, under appropriate circumstances, a court may consider the i ntent of a sole shareholder as a factor in determining corporate intent. See In re Roco Corp. , 701 F.2d 978, 984 (1st Cir. 1983); United States v. Gallagher , 856 F. Supp. 295, 299 (E.D. Va. 1994)

. Even viewing the evidence in the light most favorable to w ife, as the prevailing party in the trial court, Gray v. Gray , 228 Va. 696, 699, 324 S.E.2d 677, 679 (1985), the trial court’s conclusion that there was not a corporate intent to gift the shares to h usband and his brother was plainly wrong and unsupported by the evidence. See Code § 8.01

- 680 (“[T]he judgment of the trial court shall not be set aside unless it appears from the evidence that such judgment is plainly wrong or without evidence to support it.”). A gift, used here in its ordinary sense, inclu des not only “something that is voluntarily transferred by one person to another without compensation,” but also “a voluntary transfer of real or personal property without any consideration or without a valuable consideration .” Webster’s Third New Int’l D ictionary 956 (1981) (emphasis added). Notwithstanding the label of a sale in the corporate minutes and the existence of token consideration, a variety of factors that are particular to this transaction indelibly mark its true nature as a gift. First, t he corporate minutes, signed by all three directors, reflect that when the corporation redeemed the stock of the mother, it sold two hundred shares to h usband and his brother not at fair market value, but at par value of one dollar per share. 3 After the r edemption of the mother’s stock, h usband’s new shares constituted half the company. Using the sale price of half the company from 2003 of $1.5 million dollars, divided by two hundred shares, results in an actual value of $7,500 per share. Using the valua tion of the business from the time of trial

3 The “par value” is the “face or stated value of a share of stock or bond.” Black’ s Law Dictionary 1123 (6th ed. 1990). “In the case of a common share, par means an arbitrary or nominal dollar amount assigned to the share by the issuing company.” Id. The record reflects the stock certificates here had a par value of one dollar each.- 8

- results in an actual value of about eight thousand dollars per share for every dollar from h usband. The vast disparity between sale price and value clearly manifests the board’s intent to gift. Second, all three directors testified they understood the transaction to represent a gift. Husband testified neither he nor his brother paid anything for their shares. Rather, he testified that “my mother gave it to us.” Husband’s brother also testified he never paid fo r his shares and had no knowledge of h usband paying for the shares. The mother testified she intended “to give my two sons” stock. Although the trial court’s factual finding that h usband paid a nominal sum for the shares receives deference under the circ umstances of this case, it has significance that all the directors understood the transaction to represent a gift. 4 Lastly, the trial court specifically found that the mother, as the sole shareholder, intended to make a gift, and the mother’s testimony sup ported this finding. The trial court determined: “I think that Mr. Sfreddo’s mother . . . really thinks that she made a gift of this stock to her two sons, including Mr. Sfreddo and his brother . . . . I really think she believes that.” The mother testi fied she regarded the transaction as a gift of her property: “I agreed to give my two sons . . . two hundred shares of my stock.” The trial court’s findings and the mother’s testimony carry special weight concerning corporate intent in light of the mothe r’s status as the sole shareholder and a director. Obviously, in this family held company, h usband and his brother would never have received any shares without their mother’s consent.

4 While h usband maintains he never actually paid the money, the trial court rejected this factual position. The trial court expressly found: “I find that Mr. Sfreddo purchased two hundred shares from the corporation for two hundred dollars.” The corpor ate minutes support this finding. M oreover, during his testimony, h usband was impeached with prior deposition testimony. In the deposition, h usband was asked: “Where did your two hundred dollars come from that you used to pay for the purchase of this st ock?” He responded: “Probably personally or a check.” This represented additional reason for the trial court to doubt the evidence that h usband never paid for the stock. The factual findings of the trial court are not plainly erroneous. See Harrison v . Harrison , 58 Va. App. 90, 98

- 99, 706 S.E.2d 905, 910 (2011). Yet regardless of whether the directors failed to remember that h usband paid a nominal sum for his stock, we think it significant they all treated the transfer as a gift.- 9

- We conclude, under the applicable standard of review, that the trial c ourt was plainly wrong in failing to conclude that Triple S had donative intent in transferring the stock. We further find that intent is proven by clear and convincing evidence.
In Holloway v. Smith , 197 Va. 334, 335, 88 S.E.2d 909, 910 (1955), Holloway sued Milton Smith, Maude Smith, and Warren Ten Brook, as partners, for payment of a note purportedly executed by Ten Brook for the partnership. The Smiths denied that they were partners with Ten Brook at the time of the execution of the note because the proceeds of the note were to be Ten Brook’s capital contribution to join the partnership and that, even if they were partners, Ten Brook was not authorized to bind the partnership. Id. at 338

- 39, 88 S.E.2d at 913. Thus, there was evidence in the record s upporting their position. The trial court concluded that Ten Brook was liable on the note, but the Smiths were not. Id. at 335, 88 S.E.2d at 911. Pursuant to then Code § 50

- 9, partners were bound if the note was executed by a partner “for apparently carrying on in the usual way the business of the partnership.” Id. at 340, 88 S.E.2d at 914. The Supreme Court reversed the trial court and entered judgment against the Smiths. The
Court wrote: When we apply the provisions of Code § 50

- 9 to the material and pertinent evidence relating to the making of the loan, and the execution of the note, we can reach but one conclusion, and that is, the acts of the partner, Ten Brook, bound the partnership. In reaching that conclusion, we are not unmindful of the res pect which attaches to the judgment of the trial court, but when a judgment is plainly wrong or without evidence to support it, it becomes our duty to set it aside

.- 10

- Id. at 342, 88 S.E.2d at 915 (emphasis added); see also Walrod v. Matthews , 210 Va. 382, 391, 171 S.E.2d 180, 187 (1969); City of Va. Beach v. Roman , 201 Va. 879, 882, 114 S.E.2d 749, 751 (1960) ; Thalhimer Bros., Inc. v. Buckner , 194 Va. 1011, 1013, 76 S.E.2d 215, 217 (1953)

. In reversing the trial court, we here accept that duty. 5
3

. Consideration The trial court further concluded h usband had paid valuable consideration for the stock and payment of consideration is inconsistent with a gift. The trial court held h usband

“ purchased two hundred shares from the corporation for two hundred dollars.” Wife , likewise , argues that h usband purchased the stock for value from Triple S. We hold any nominal sum paid by h usband did not represent valuable consideration under the circumstances of this case. The Virginia Supreme Court has state d that a “gift has been defined as a contract without a consideration.” Ott v. L&J Holdings, LLC , 275 Va. 182, 188, 654 S.E.2d 902, 905 (2008). Indeed, “by definition, a deed of gift requires no consideration.” Hill v. Brooks , 253 Va. 168, 178, 482 S.E. 2d 816, 823 (1997). Consideration represents “the price bargained for and paid for a promise.” Smith v. Mountjoy , 280 Va. 46, 53, 694 S.E.2d 598, 602 (2010) (citation omitted). It may come in “a benefit to the party promising or a detriment to the party to whom the promise is made.” GSHH

- Richmond, Inc. v. Imperial Assocs. , 253 Va. 98, 101, 480 S.E.2d 482, 484 (1997) (citation omitted)

. We have held that there was an intent that the Triple S stock be separate property, “property acquired during the marri age by . . . gift from a source other than the other party.” Code § 20

- 107.3(A)(1)(ii). We repeat: a “gift” includes “a voluntary transfer of real or personal

5 This Court has reve rsed a trial court’s classification of gifted property as separate or marital. See Watts v. Watts , 40 Va. App. 685, 702, 581 S.E.2d 224, 233 (2003); Huger v. Huger , 16 Va. App. 785, 788, 433 S.E.2d 255, 257 (1993) ; Stainback , 11 Va. App. at 18, 396 S.E.2d at 690.- 11

- property without any consideration or without a valuable consideration .” Webster’s , supra , 956 (emphasis added). We caution that while classic principles of the common law of contracts are instructive, those principles are not transmitted unaltered into the context of an equitable distribution. Thus, as here, what may constitute classic contractua l “consideration” at law may not be “consideration” for the transfer of property in equitable distribution.
In Gamble v. Gamble , 14 Va. App. 558, 569, 421 S.E.2d 635, 642 (1992) (quoting Sawyer v. Sawyer , 1 Va. App. 75, 78, 335 S.E.2d 277, 279 (1985)) , we wrote that Code § 20

- 107.3 defines a structure “for equitable distribution of the marital wealth of the parties : a distribution which will equitably ‘compensate a spouse for his or her contribution to the acquisition of [all marital] property obtained duri ng the marriage

. ’” In Roane v. Roane , 12
Va. App. 989, 995, 407 S.E.2d 698, 701 (1991), we reversed the trial court’s limitation of a wife’s interest in transmuted property “in order that the legislative intent that the parties receive a fair proportion o f the marital property be complied with, and to assure that the ends of justice be attained

. ” For example, Virginia equitable distribution law “does not establish a presumption of equal distribution of marital assets.” Watts v. Watts , 40 Va. App. 685, 70 2, 581 S.E.2d 224, 233 (2003) (citation omitted). While these cases deal with the division of marital property, the equitable principles therein enunciated are likewise applicable to the classification of property acquired during the marriage as separate or marital. We reiterate our caveat that principles of the common law of contracts may not fully apply in equitable distribution. That said, our decision is nonetheless supported by those common law principles.- 12

- Virginia has long followed the “peppercorn” theory of consideration , under which even a peppercorn suffices as consideration

. 6 See Richmond Eng’g & Mfg. Corp. v. Loth , 135 Va. 110, 156, 115 S.E. 774, 787 (1923). A peppercorn has been equated with a cent. Whitney v. Stearns , 16 Me. 394, 397 (1839)

. Under this theory, “[i]t matters not to what extent the promisor is benefited or how little the promisee may give for the promise.” Sager v. Basham , 241 Va. 227, 229, 401 S.E.2d 676, 677 (1991) (citation omitted). “A very slight advantage to the one p arty or a trifling inconvenience to the other is generally held sufficient to support the promise.” Brewer v. First Nat’l Bank of Danville , 202 Va. 807, 815, 120 S.E.2d 273, 279 (1961). “The owner of the historic estate of ‘Blackacre’ can give it away, a nd he can sell it for a peppercorn. Courts, though they have long arms, cannot relieve one of the consequences of a contract merely because it was unwise.” Planters Nat’l Bank of Fredericksburg, Va. v. E. G. Heflin Co. , 166 Va. 166, 173, 184 S.E. 216, 21 9 (1936). Nonetheless, it has been recognized that contracts containing only peppercorns as consideration may lack an authentic bargain

. Professor Corbin wrote: The gross inadequacy of the consideration, as measured by the opinions of other men; may ten d to support the conclusion that the parties did not actually agree upon an exchange, that the “peppercorn” was not in fact bargained for by the promisor. If it was not bargained for, it was not a consideration, according to the definition that makes agre ed bargain the test. Persons sometimes say that they have bargained, when their other conduct shows that they have not . . . . Courts must first determine the fact of bargain and agreed exchange before they can properly apply the rules of consideration as a bargained exchange.

6 The dictionary states that “[i]n English law, the reservation of a merely nominal rent, on a lease, was sometimes expressed by a stipulation for the payment of a peppercorn.” Black’s , supra , at 1135. In Barker v. Keete , 89 Eng. Rep. 179 (1678) , the court held that “[t]he reservation of a pepper

- corn rent on a lease for years is a sufficient consideration to transfer the possession.” The principle also dates from early American jurisprudence. See Perkins v. Parker , 1 Mass. (1 Tyng) 117, 126 (1 804).- 13

- The rule that market equivalence of consideration is not required, and that the value of the consideration is to be left solely to the free bargaining process of the parties, leads in extreme cases to seeming absurdities. When the consideration is only a “peppercorn” or a “tomtit” or a worthless piece of paper, the requirement of a consideration appeared to Holmes to be as much of a mere formality as is a seal. 1 Arthur Linton Corbin, Corbin on Contracts § 127, at 546 (1963).
Pro fessor Corbin’s emphasis on the fact of an actual bargain reflects one of the main

concerns of contracts law. The basic elements of a contract are an offer, acceptance, and consideration. Snyder

- Falkinham v. Stockburger , 249 Va. 376, 381, 457 S.E.2d 36, 39 (1995). An offer “identifies the bargained for exchange.” Chang v. First Colonial Sav. Bank , 242 Va. 388, 392, 410 S.E.2d 928, 930 (1991). Contracts typically require a bargain to exist. Restatement (Second) of Contracts § 17 (1981)

. Our Supreme Co urt has stated that “the major consideration underlying contract law is the protection of bargained for expectations.” Filak v. George , 267 Va. 612, 618, 594 S.E.2d 610, 613 (2004). The Virginia Supreme Court acknowledged in Hackett v. Emmett , 215 Va. 7 26, 214 S.E.2d 139 (1975) , that a sale for nominal consideration may lack a bargain and actually represent a gift . The primary issue there was whether there was sufficient corroborative evidence, pursuant to then Code § 8

- 286, of the delivery of an unreco rded deed, s o as to pass title upon delivery. Id. at 727, 214 S.E.2d at 140. The corroborative evidence established that the conveyance was a gift from the deceased grantor Harris to Emmett. Id. The Court noted that there was a stronger presumption of delivery when there was a gift, or “voluntary conveyance,” rather than in “an ordinary case of bargain and sale,” citing a case for that proposition. Id. at 729, 214 S.E.2d at 141 (citation omitted). Apparently, the deed recited familiar language, that o f bargain and sale, stating the deed was made in consideration of the sum of five dollars. Id. Yet the Court stated: “We observe that the evidence is clear that the transaction is one of gift and not- 14

- bargain and sale. No consideration was involved, oth er than a token payment of five dollars, and Emmett testified the property was a gift to him from Harris.” Id. As relevant to the case we here consider, we note (1) that the Hackett Court, as a condition precedent to invoking the stronger presumption of delivery arising from a gift, specifically rejected the recital in the deed that there was consideration for the transfer ; (2) that the Hackett Court concluded money was in fact paid (“other than a token payment of five dollars”); and (3) that here the mo ther testified, necessarily unlike the deceased Harris, that the transfer was a gift. The invocation of the stronger presumption of delivery, which formed part of the standard of review, necessarily was part of the ratio decidendi , “the essential rational e in the case that determines the judgment,” and so part of the holding binding upon us. See Clinchfield Coal Co. v. Reed , 40 Va. App. 69, 73

- 74, 577 S.E.2d 538, 540 (2003). The reason for our Supreme Court’s holding in Hackett is that while a gift lac ks consideration, Ott , 275 Va. at 188, 654 S.E.2d at 905, it has been recognized that where no bargain actually occurred as evidenced by nominal or sham consideration and the surrounding circumstances, the purported consideration is not in fact considerati on , see Dulany Foods, Inc. v. Ayers , 220 Va. 502, 514, 260 S.E.2d 196, 203 (1979) (Poff, J., dissenting) (“Unless bargained for, a benefit the offeree confers upon the offeror cannot constitute consideration.”). The Restatement (Second) of Contracts well illuminates this principle. The Restatement explains: “To constitute consideration, a performance or a return promise must be bargained for.” Restatement (Second) of Contracts § 71(1) (1981). In a comment, the Restatement elucidates this by stating: “[A] mere pretense of bargain does not suffice, as where there is a false recital of consideration or where the purported consideration is merely nominal. In such cases there is no consideration . . . .” Id. cmt. b. In a comment to a nother section , the Restatement again explains: “Disparity in value, with or without other circumstances, sometimes- 15

- indicates that the purported consideration was not in fact bargained for but was a mere formality or pretense. Such a sham or ‘nominal’ consideration does not satisfy the req uirement of § 71.” Id. § 79 cmt. d. Moreover, the Restatement provides an illustration highly relevant for this case: “In consideration of one cent received, A promises to pay $600 in three yearly installments of $200 each. The one cent is merely nominal and is not consideration for A’s promise.” Id. illus.
5. Both o ur Supreme Court’s decision in Hackett and the Restatement (Second) of Contracts point to a long line of cases holding transactions such as the one here represent a gift. In Salmon v. Wilson , 41 Cal. 595 , 60 4 (1871), the issue concerned whether one of a man’s children took property as separate property from a gift or marital property from a bargained for sale. T he court held it was a gift. Id. at 605. Regarding the supp osed sale price, the court found the difference “between the price named and the value of the estate . . . is so enormously large as clearly to indicate that the money consideration did not, in fact, enter into the transaction as one of its material elemen ts.” Id. at 606. See also Oliver v. Grimball , 14 S.C. 556, 567 (1881); Wilkinson v. Sherman , 45 N.J. Eq. 413, 422

- 23 (1889)

. 7 In Aldridge v. Aldridge , 101 S.W. 42 , 43 ( M o .

7 In Wilkinson , the court well explained how a document having the form of bargain and sale may actually lack a bargain and represent a gift. The court stated: I fail to perceive why he may not have made this gift to his uncle, and that by an inst rument which in form imported that the transaction was purely a matter of bargain and sale. It is true the consideration in a deed of bargain and sale may be so unconscionably small as to afford in itself evidence of fraud, and demand explanation, but at the same time it may be so merely nominal as to materially aid an explanation that, though in the form of a contract, it was really a gift. I conceive this to be the office of the deed’s nominal consideration here. One dollar for $10,000 worth of propert y is so beyond pretence of more than mere formal consideration that its effect on our minds is not merely the suggestion of fraud, but also the exclusion of the idea that bargain- 16

- 1907) , a man purported to sell all his property to his wife and son for ten dolla rs. Yet the court stated: “Under the circumstances the money consideration named must be considered as nominal only . . . the transaction was a gift, the element of an ordinary purchase for a valuable consideration is absent.” 8 Id. In In re Lynch’s Est ate , 69 A. 290 ( Pa. 1908), a woman acquired property from her mother for one dollar. The court held this constituted a gift, stating that “[t]o hold that a deed from a parent to a child naming a consideration of

. . . $1.00 impressed upon it a grant of ba rgain and sale would be contrary to the popular understanding of the effect of such a conveyance, and would in every case defeat the manifest intention.” Id. at 292

. More recently,
in Green v. Green , 542 So. 2d 466, 467 (Fla. Dist. Ct. App. 1989) , the co urt held a husband’s payment of nominal consideration did not alter the effect of a gift of an interest in a residence. Although the wife argued the nominal consideration made the asset marital property from a sale , the court disagreed and held: “[T]he p ayment of trivial or merely nominal consideration does not alter the obvious nature of the transaction. These transfers were gifts . . . .” Id. S ee also
Scott v. Scott , 161 S.W.3d 307 , 311

- 12 ( Ark. Ct. App. 2004)

. 9

and sale were really intended. The explanation of this transaction I think is apparent. 45 N.J. Eq. at 422

- 23.

8 In Geyer v. Bookwalter , 193 F. Supp. 57, 62 (W.D. Mo. 1961), the court cited Aldridge when it stated that a sale of a house by a wife for one dollar “could be intended . . . as a gift.”

9 Indeed, case law on t his subject is clear enough that one commentator, while arguing for stronger enforcement of peppercorn consideration, noted that the “view that nominal consideration can be used to support a gratuitous promise . . . simply cannot be maintained in light of the case law bearing on this subject.” Joseph Siprut, Comment, The Peppercorn Reconsidered: Why a Promise to Sell Blackacre for Nominal Consideration Is Not Binding, But Should Be , 97 Nw. U. L. Rev. 1809, 1821 (2003). Other leading treatises accord with this view. See 38 Am. Jur. 2d Gifts § 2 (2010) (“A statement that a transfer is for value received will not alter the nature of a transaction or take away the character of a gift when the consideration expressed is nominal.”); 38A C.J.S. Gifts § 8 (1996) (“A statement that a transfer is for value received will not alter the nature of the transaction or take away the character of a gift where the- 17

- We hold that where nominal considera tion and the surrounding circumstances of a

contract demonstrate a gift rather than a bargained for sale occurred, the court should find the transaction constitutes a gift. 10 The party seeking to show a gift has the burden of proof by clear and convincing evidence. Prizzia v. Prizzia , 58 Va. App. 137, 163, 707 S.E.2d 461, 473 (2011). However, we emphasize this does not protect imprudent persons from poorly made bargai ns, for even a peppercorn that is bargained for may constitute consideration. In this ca se, the evidence plainly demonstrates a gift from the company to h usband. The corporate minutes from the meeting in 2004 where the company agreed to transfer two hundred shares to h usband reflect that h usband paid one dollar per share, for a total of two hundred dollars. Since the company simultaneously agreed to redeem the mother’s shares, h usband’s

new stock represented half the company. As noted above, employing the sale price of half the company from 2003 of $1.5 million dollars, divided by two hundr ed shares, produces an actual value of $7,500 per share. If the valuation of the business from the time of trial is used, the stock had an actual value of about eight thousand dollars per share. We have already found the board of directors, including the sole shareholder mother, regarded the transaction as a gift. Obviously , no bargained for exchange occurred. The nominal price paid by h usband did not change this transaction from a gift in to a sale. Since no valuable consideration existed and the compa ny intended to make a gift to
h usband, the two hundred shares he received represented his separate property from a gift under

consideration expressed is nominal or trivial, or insignificant as compared with the value of the property trans ferred . . . .”).

10 We need not consider the extent to which this may apply in other circumstances. The facts of this case are extreme.- 18

- our equitable distribution statute

. 11 See Code § 20

- 107.3(A)(1). This decision makes it unnecessary for us to consider h usband’s second assignment of error, which addresses the trial court’s decision regarding the share of the company w ife should receive if the stock is marital

. B

. Valuation of APS Investments Husband contends the trial court erred in determining the value o f his stock in APS Investments for two reasons. First, he argues it was inappropriate to place a value on APS in the absence of business valuation evidence such as an appraisal or capitalization rates. Second,
h usband argues the trial court should have c onsidered evidence of a debt APS owed to h usband’s brother. We find no error regarding the first issue and hold the second not properly before us. “In Virginia, the courts look to the intrinsic value of the property to the parties to measure value for eq uitable distribution purposes.” Hoebelheinrich v. Hoebelheinrich , 43 Va. App. 543, 550, 600 S.E.2d 152, 155 (2004). Since “intrinsic value must depend on the facts of the case, we give great weight to the findings of the trial court.” Howell v. Howell , 31 Va. App. 332, 339, 523 S.E.2d 514, 518 (2000). This Court will “affirm if the evidence supports the findings and if the trial court finds a reasonable evaluation based on proven methodology and on the application of it to the particular facts of the ca se.” Id. “The intrinsic value principle applies to stock in a family owned company.” Owens v. Owens , 41 Va. App. 844, 854, 589 S.E.2d 488, 494 (2003). We find the trial court properly valued APS Investments. The evidence before the trial court was tha t APS owned a single piece of property and nothing else besides a bank account

. Under these circumstances, the trial court acted within its discretion in holding the value of the property and the bank account constituted the value of APS.

11 We do not consider whether any increase in value since the acquisition of the stock is marital or separate. See Code § 20

- 107.3. We hold only that h usband received stock as a gift.- 19

- The majo rity of h usband’s argument under this assignment of error relates to the failure to reduce the value of APS by the debt to h usband’s brother. Yet h usband cites no authority concerning this. In fact, the only authorit ies cited under this assignment of err or are two cases after the first sentence, which states: “Valuation cannot be based on mere guesswork.” In light of the trial court’s holding that the value of APS was simply the value of the property and the bank account, which we affirm, we do not perc eive how consideration of the debt would require guesswork. Furthermore, nothing in this citation addresses w ife’s argument that h usband failed to prove the liability of APS . Husband’s reply brief cites no authority of any kind for this assignment of err or. Rule 5A:20(e) directed that h usband’s brief contain the “standard of review and the argument (including principles of law and authorities) relating to each assignment of error.” Based on this rule, we have repeatedly stated how undeveloped argument s “do not merit appellate consideration.” Reid v. Commonwealth , 57 Va. App. 42, 48, 698 S.E.2d 269, 271 (2010) (citation omitted). In Fadness v. Fadness , 52 Va. App. 833, 851, 667 S.E.2d 857, 866 (2008), this Court held: “If the parties believed that th e circuit court erred, it was their duty to present that error to us with legal authority to support their contention.” Where a party’s failure to present authority is significant, we may treat an assignment of error as waived. Parks v. Parks , 52 Va. App . 663, 664, 666 S.E.2d 547, 548 (2008). While we may speculate as to how
h usband’s meager authority relates to his argument, the ne ed for such guesswork on our part necessarily means h usband has not complied with the rule. We hold h usband’s failure to p resent authority significant and treat this portion of his assignment of error as waived.
C

. Interest Income Husband maintains the trial court erred in failing to consider the interest income that w ife could gain from the monetary award. Husband contend s that consideration of this income should- 20

- result in a diminished spousal support award. Since we reverse the trial court’s equitable distribution finding concerning the gift of Triple S stock, we reverse and remand this issue for further consideration. Code § 20

- 107.1(E)(8) requires that in awarding spousal support, the trial court shall consider the “provisions made with regard to the marital property under § 20

- 107.3.” “Because the trial court cannot decide the issues pertaining to permanent spousal s upport until the equitable distribution issue is resolved, we reverse and remand the trial court’s award of spousal support.” Duva v. Duva , 55 Va. App. 286, 301, 685 S.E.2d 842, 849 (2009).
D

. Attorney Fees Both parties seek an award of attorney fees for costs on appeal. As both parties have partially prevailed, we deny any award of fees. See Smith v. Smith , 43 Va. App. 279, 291 n. 6, 597 S.E.2d 250, 256 n.6 (2004)

. IV. CONCLUSION The trial court erred in holding h usband’s acquisition of half the stock of Triple S was not a gift. The trial court acted properly in determining the value of APS Investments. We remand

on t he issue of whether the trial court erred in determining spousal support by not considering interest w ife may receive from the mon etary award in light of our reversal concerning the status of Triple S stock. For the foregoing reasons, the judgment of the trial court is affirmed in part and reversed and remanded in part for further proceedings consistent with this opinion

. A ffirmed in p art, r eversed and r emanded in p art

.