Summary
In Juhasz, for example, this court held that an agreement to marry gives rise to a confidential relationship between the parties, and that an antenuptial agreement that creates a disproportionate allocation of property upon death shifts the burden of proving full disclosure onto the party claiming the validity of the contract.
Summary of this case from Fletcher v. FletcherOpinion
No. 26867
Decided July 27, 1938.
Antenuptial contracts — Confidential relation between parties — Contract valid where provision for wife fair and reasonable — Burden on those claiming contract valid — To show prospective husband fully disclosed property — Intended wife bound by contract containing wholly disproportionate provisions, when — Agreement valid six months after executor or administrator appointed, when — Section 10512-3, General Code — Election to take under law or filing exceptions to inventory — Not an attack within purview of statute.
1. An agreement to marry gives rise to a confidential relation between the contracting parties.
2. An antenuptial contract voluntarily entered into during the period of engagement is valid when the provision for the wife is fair and reasonable under all the surrounding facts and circumstances.
3. When the amount provided for the wife in an antenuptial contract entered into during the existence of the confidential relation arising from an engagement is wholly disproportionate to the property of the prospective husband in the light of all surrounding circumstances and to the amount she would take under the law, the burden is on those claiming the validity of the contract to show that before it was entered into he made full disclosure to her of the nature, extent and value of his property or that she then had full knowledge thereof without such disclosure.
4. Although the provision made for the intended wife in an antenuptial contract is wholly disproportionate, she will be bound by voluntarily entering into the contract after full disclosure or with full knowledge.
5. Under Section 10512-3, General Code, an antenuptial agreement is deemed valid unless an action to set it aside is brought within six months after the appointment of the executor or administrator or unless the validity of the agreement is otherwise attacked within that period, and neither the filing of a written election to take under the law, in which is incorporated a statement that the widow repudiates "the prenuptial agreement, which was procured by fraud," nor the filing of exceptions to the inventory and appraisement on the ground that the appraisers failed to allow the statutory set off and a year's support to the widow, constitutes an attack within the purview of the statute.
APPEAL from the Court of Appeals of Lake county.
Joseph B. Juhasz, appellant, brought an action in the Court of Common Pleas of Lake county, Ohio, against William A. Juhasz, Mary E. Stine, Charles A. Juhasz and Anna J. Ternansky, appellants, and Mary Kenyo Juhasz, appellee, seeking to partition certain real estate of which Joseph S. Juhasz, deceased, died seized. The defendant, Mary Kenyo Juhasz, is the widow of the decedent and the remaining parties are his sons and daughters.
The petition sets out that the children of the decedent are each entitled to an undivided one-fifth of the property located in Lake county and to an undivided one-sixth of the property located in Cuyahoga county.
The defendant, Mary Kenyo Juhasz, was the third wife of the decedent, by whom he had no children, and plaintiff and the remaining defendants were decedent's children by his first wife. During the period of their engagement to marry, he and his prospective bride, then Mary Kenyo, entered into an antenuptial agreement of which the following is a copy:
"This agreement, made and entered into this 18th day of October, 1933, by and between Joseph S. Juhasz of Mentor, Ohio, hereinafter referred to as the first party, and Marie [ sic] Kenyo of Cleveland, Ohio, hereinafter referred to as the second party, witnesseth:
"Whereas, the parties hereto contemplate marriage with each other and the first party is the owner of real and personal property, and
"Whereas, the parties have mutually agreed that the second party shall receive upon the death of the first party certain property in lieu of dower in his real property and in place of any year's allowance, homestead or other share in or distribution of his personal estate and of any and all other rights or claims of said second party as widow, heir, distributee, survivor or next of kin of said first party,
"Now, therefore, in consideration of said marriage and of the covenants of the first party herein contained, the said first party hereby promises and agrees to give, devise and bequeath by last will and testament to the second party one-sixth (1/6th) of all of the real property situated in Cuyahoga county, owned by the first party at the time of his decease, or to give and bequeath to the second party money or stocks or other securities having an aggregate fair market value at the time of his death equal to the value of one-sixth (1/6th) of his real property situated in Cuyahoga county.
"In consideration of the provision to her in said last will and testament, the said second party hereby covenants and agrees that she will accept and receive the same in lieu of any and all rights or claims of dower, inheritance, descent in and to the real property of the first party now owned or hereafter acquired and in lieu of any and all rights or claims to a distributive share of his personal estate now owned or hereafter acquired, and of all claims for an allowance for a year's support, and in lieu of any and all rights or claims which the said second party may have or acquire by virtue of said marriage as widow, heir, distributee, survivor or next of kin in, or against the estate of said first party, which may in any manner arise or accrue by virtue of said marriage.
"And the said second party for the consideration aforesaid agrees that the first party shall have the full liberty to dispose of all his property, real and personal, whether now owned or hereafter acquired during his life (or the land or its equivalent in cash to which she is entitled hereunder) by last will and testament, and that upon his death the said property, both real and personal, which then remains undisposed of (whether during his life or by last will and testament) shall descend to, vest in and be distributed to such person or persons as is designated by the first party in his last will and testament.
"And the said second party for the consideration aforesaid, does hereby release, remise and relinquish unto the said first party and unto his heirs, personal representatives and assigns forever, all of the interest, rights and claims hereinbefore mentioned and set forth.
"And the said second party further agrees to execute and acknowledge upon the request of the first party, any and all instruments of release or conveyance to enable the said first party to dispose of any and all real property now owned or hereafter acquired, free and clear from any apparent right of contingent dower therein, and such further instruments upon the death of the said first party, which may be reasonably requested by his heirs, executors, administrators or assigns, to evidence and carry into effect the release and waiver of all her interest, right, claim or demand as aforesaid.
"This agreement shall become effective only upon the consummation of the proposed marriage between the parties hereto and if such marriage does not take place this agreement shall be null and void."
As a part of the same transaction, Joseph S. Juhasz executed a last will and testament. The next day, October 19, 1933, he executed a new will which contains in addition to the formal clauses the following:
"Second: I have this day entered into an antenuptial agreement with Marie Kenyo. A copy of said agreement is hereto attached and marked Exhibit 'A.'
"In conformity with the provisions contained in said agreement and only on condition that said agreement becomes effective by my marriage to Marie Kenyo, I give, devise and bequeath to the said Marie Kenyo one-sixth (1/6th) of all the real property situated in Cuyahoga county, state of Ohio, of which I die seized, to be hers absolutely in fee simple and forever.
"Third: All of the rest of my property, real, personal and mixed, wheresoever situated, of which I may die seized, or to which I may be entitled at the time of my decease, I give, devise and bequeath to my children, Joseph B. Juhasz, Marie E. Stine, William A. Juhasz, Charles A. Juhasz and Anna J. Termansky [ sic], share and share alike, to be theirs absolutely in fee simple and forever.
"My son, Joseph B. Juhasz, is at the time of the execution of this will, indebted to me in the sum of three thousand dollars ($3,000), and unless said sum is paid by the time of my decease, said sum shall be charged to the share which my said son is to receive.
"On December 15, 1930, I gave to my daughter, Mary E. Stine and her husband, the sum of four thousand dollars ($4,000), on condition that they should pay to my then wife and me or our survivor, the sum of two hundred dollars ($200) per year. It is my will that said four thousand dollars ($4,000) plus interest at the rate of 5% per annum, less any amounts paid by Paul and Mary E. Stine to me, shall be considered an advancement and shall be deducted from the share which Mary E. Stine is to receive hereunder.
"It is my will that if any of my devisees desire to sell either the Woodland avenue property or the East 89th street property, both of these properties be sold together."
The defendant, Mary Kenyo Juhasz, filed an answer and cross-petition attacking the validity of the prenuptial agreement, setting out an election to take under the law and not under the will and averring that as a widow she is entitled to an undivided one-third of the real estate sought to be partitioned, in addition to her certain other rights.
The Court of Common Pleas found from the evidence that Mary Kenyo Juhasz, prior to her signing the antenuptial agreement, was fully apprised by the decedent and had full knowledge of all facts and circumstances affecting her rights, including knowledge of the nature, character and extent of said decedent's property and assets, the nature and extent of her rights as a widow under the laws of Ohio if no antenuptial agreement were made, the contents and provisions of the antenuptial agreement, and all other facts and circumstances bearing upon the validity of that agreement; and the trial court found the antenuptial agreement to be valid and binding as against Mary Kenyo Juhasz. The trial court further found that Mary Kenyo Juhasz failed to attack the antenuptial agreement within the period required by law and is now barred from questioning or attacking the agreement. As a result of these findings the trial court decreed partition in accordance with the terms of the antenuptial agreement and the will.
No motion for a new trial was filed by the defendant, Mary Kenyo Juhasz, but an appeal was taken by her to the Court of Appeals on questions of law. The cause was heard in the Court of Appeals by three judges but before the decision was handed down and judgment entered, Judge Roberts having died, the two remaining judges made disposition of the case. To this course no objection was raised.
The Court of Appeals affirmed the judgment of partition except as to respective interests of the parties in the premises. The court also found that the antenuptial agreement was attacked within time, reversed the judgment of the trial court holding that the antenuptial contract was valid, and entered judgment as to the interest of the parties upon the assumption that the defendant, Mary Kenyo Juhasz, was entitled to take under the law in accordance with her election and not under the will.
This court allowed a certification of the record.
Messrs. Giblin Giblin, for appellant, Joseph B. Juhasz.
Mr. A.B. Cook and Mr. S.S. Kates, for appellants, William A. Juhasz, Mary E. Stine, Charles A. Juhasz and Anna J. Ternansky.
Messrs. Deibel, Elbrecht Roberts, Messrs. Alvord, Blakely Ostrander and Mr. Martin M. Sipser, for appellee, Mary Kenyo Juhasz.
The appellants insist that the Court of Appeals committed prejudicial error in finding the antenuptial agreement invalid as a matter of law and entering final judgment for the widow, Mary Kenyo Juhasz. In their behalf appellants make two contentions: First, they insist that under the evidence the antenuptial contract was entered into under such circumstances that its validity in view of its formation was a question of fact for the determination of the trial court; and, second, that even if the first contention is unsound, nevertheless the agreement is valid, subsisting and binding because it was not attacked within the six-month period provided by statute. These contentions will be discussed in order.
As to the first contention it is necessary to consider what are the requirements for the valid formation of an agreement of this character.
There are five reported cases of this court which pass upon or discuss the validity of antenuptial contracts as equitable jointures. Stilley v. Folger, 14 Ohio, 610; Murphy v. Murphy, 12 Ohio St. 407; Phillips' Exrs. v. Phillips, 14 Ohio St. 308; Grogan v. Garrison, 27 Ohio St. 50; Mintier v. Mintier, 28 Ohio St. 307.
The latest of these, cases was decided at the December term, 1876, and it does not appear that there is any subsequent reported case of this court covering questions arising out of antenuptial marriage settlements. Those cases are authority for the principle that an antenuptial contract will be upheld if it is fair and reasonable, is not invalidated by fraud or otherwise, and is fully executed on the part of the husband. There have been, however, many adjudications in other jurisdictions during the last half century. The rule supported by the weight of authority may be stated thus: An engagement to marry creates a confidential relation between the contracting parties and an antenuptial contract entered into after the engagement and during its pendency must be attended by the utmost good faith; if the provision for the prospective wife is, in the light of surrounding circumstances, wholly disproportionate to the means of her future husband and to what she would receive under the law, the burden rests on those claiming the validity of the contract to show that there was a full disclosure of the nature, extent and value of the intended husband's property, or that she had full knowledge thereof without such disclosure, and that she, with this knowledge, voluntarily entered into the antenuptial settlement. Debolt v. Blackburn, 328 Ill. 420, 159 N.E. 790; Watson v. Watson, 104 Kan. 578, 180 P. 242; In re Waller's Estate, 116 Neb. 352, 217 N.W. 588; Harlin v. Harlin, 261 Ky. 414, 87 S.W.2d 937; Pattison v. Pattison, 129 Kan. 558, 283 P. 483; In re Waller's Estate, 315 Pa. 576, 173 A. 303; Denison v. Dawes, 121 Me. 402, 117 A. 314; Megginson v. Megginson, 367 Ill. 168, 10 N.E.2d 815; In re Enyart's Estate, 100 Neb. 337, 160 N.W. 120; In re Maag's Estate, 119 Neb. 237, 228 N.W. 537. This court is aware that the burden of proof does not shift in Ohio ( Ginn, Admr., v. Dolan, 81 Ohio St. 121, 90 N.E. 141, 135 Am. St. Rep., 761); but is of the opinion that disclosure as a justification or excuse for the disproportionateness is an affirmative defense.
Under the rule, the contract is not invalidated merely because the portion fixed for the bride is small or disproportionate. After being fully informed and advised, the intended wife may be entirely satisfied with the provision made for her, and, if she then voluntarily enters into the contract, she is bound by its terms.
Regarding the nature and extent of the husband's property, counsel for appellee in their brief state: "At the time of the execution of the contract, Mr. Juhasz was worth about the same as at his death; the inventory of his estate is $40,376.67. By the terms of the agreement, Mrs. Kenyo is given, at his death, an undivided one-sixth interest in his Cuyahoga county real estate, and nothing else; she is expressly barred of all other rights and benefits of every kind. The Cuyahoga county real estate was inventoried at $13,500. The contract, therefore, gave to Mrs. Kenyo an undivided interest in real property of the value of $2,250, out of an estate of more than $40,000, or approximately 5 1/2%. In contrast with this small provision in the contract, she would be entitled under the law (deducting debts and charges, amounting to $2,400) to approximately in excess of $15,500, or 40% of the estate, consisting of her statutory set-off of $2,500, her year's support estimated at $2,500, the right to live in the mansion house for one year estimated at $600, and one-third of the net residue of the estate."
Joseph S. Juhasz and Mary Kenyo became engaged to be married in September, 1933, and their marriage was solemnized October 21, 1933; at that time they were sixty-four and fifty-one years of age, respectively. He died April 25, 1936, after two and a half years of wedded life.
There are, however, other facts to be considered on the subject of disproportionateness. Juhasz had five children, all by his first marriage, and in marrying a third wife he would in the ordinary course of human affairs give consideration to the natural objects of his bounty. Under the new Probate Code, effective January 1, 1932 (Section 10502-1, General Code, amended September 2, 1935, 116 Ohio Laws, 385), inchoate dower still exists but, save in certain specified instances, the dower interest does not become choate upon the death of the consort but terminates and is barred thereby, and in lieu of dower, when so barred and terminated, the surviving spouse is entitled to the distributive share provided for by the statute of descent and distribution. If Mrs. Juhasz made a valid election to take under the law and the antenuptial contract was unenforceable she would get an undivided one-third of all his property and each of his children would get an undivided two-fifteenths thereof (less advancements). Section 10503-4, General Code. On this basis his third wife would receive two and a half times as much as each of his own children. The fact that the contracting parties were of advanced age and the man had children by a former marriage are elements to be considered. Appeal of Neely, 124 Pa. 406, 16 A. 883. The court can hardly say that an antenuptial agreement giving the third wife somewhat less than each of the children by a former marriage would receive is necessarily unfair and unreasonable as to the prospective wife; but in the instant case the widow would receive only about one-third as much as each child (not considering advancements) under the provisions of the will and antenuptial contract. By and large the provision was so meager as to warrant a holding that the amount fixed was wholly disproportionate as a matter of law.
The trial court, however, made no express finding as to disproportionateness, but did expressly find that the contract was entered into after full disclosure to and knowledge by Mary Kenyo. It is therefore essential to inquire into the nature of the disclosure as shown by the evidence.
A.B. Cook, an attorney, was employed by Juhasz to draw the antenuptial agreement and a will, and, having prepared them, brought them to the Mentor farm on October 18, 1933, on the occasion of a Hungarian dinner there to which Mary Kenyo had been invited to meet those present and to make "Streudel," a Hungarian dish. The attorney took Mrs. Kenyo, who didn't speak English well but had a good knowledge of the Hungarian language, into a room in the farmhouse and with the aid of an interpreter read and explained the antenuptial contract and will to her and undertook to inform her as to what property his client, Mr. Juhasz, owned. Thereupon the contract and will were executed. Next morning Mr. Juhasz and Mary Kenyo came to the attorney's office and Mr. Juhasz stated he had given his daughter, Mrs. Mary E. Stine, and her husband the sum of $4,000 under certain conditions and that he wanted it to be considered as an advancement and have it deducted from the share his daughter would receive. A new will was drawn up in form like the previous except for that addition and was then executed.
Although the disclosure as to the nature and amount of property of the prospective husband was fairly full and complete, an examination of the evidence shows no mention of the value of the real estate was ever made to her by him or his attorney. Under the rule laid down and sustained by the weight of authority, good faith requires full disclosure not only as to the nature and amount of the intended husband's property but also of its value. See cases cited supra.
Mrs. Kenyo with her limited knowledge of property values and of business could hardly be expected to know of her own accord the value of the undivided one-sixth of the real estate in Cuyahoga county in comparison with the value of all Mr. Juhasz's property. She was, therefore, unaware of what the interest which she would receive was fairly and reasonably worth. Mr. Juhasz had knowledge of these values and the exercise of the utmost good faith on his part required that he should impart it to her. The evidence justified a holding that, as a matter of law, full disclosure was not made.
It follows that the first contention of counsel for appellant is unsound and that the contract must be considered invalid, provided the attack thereon was made within time.
The second contention of counsel as above indicated is that there was no attack on the agreement within the six-month period.
Section 10512-3, General Code, provides: "Any antenuptial or separation agreement to which the decedent was a party shall be deemed valid unless action to set it aside is begun within six months after the appointment of the executor or administrator of the estate of such decedent, or unless within such period of time the validity of such agreement is otherwise attacked."
Mary Kenyo Juhasz filed an election as surviving spouse of decedent in which she stated: "I * * * hereby elect to take under the law and repudiate the prenuptial contract attached to said will, which was procured by fraud."
She also filed in the Probate Court exceptions to the inventory of the executrix in which she excepted to the refusal of the appraisers to set off her year's allowance and statutory set-off but made no reference to the antenuptial agreement. The court overruled the exceptions and no appeal was taken by the appellee.
It is conceded that six months had elapsed between the appointment of the executrix and the action in partition in which the answer and cross-petition was filed by Mary Kenyo Juhasz attacking the antenuptial agreement. Both the election and exceptions to the account were filed within the six-month period. The attack contemplated by Section 10512-3, General Code, is either by direct action to set aside the antenuptial agreement or by raising the question of the validity or invalidity of the agreement in some other way so that there could be a determination of the issue by a court of competent jurisdiction. Merely to file a legal paper in a court under such circumstances that the jurisdiction of the tribunal to determine the rights of the parties under an antenuptial agreement is not invoked does not amount to an attack within the meaning of the statute. Any challenge of the contract in a court proceeding which could result in an adjudication would be an attack within the purview of the statute; a challenge in a court of justice which could result only in futility would not.
Obviously no determination as to the contract could be made on an election filed in the Probate Court for convincing reasons. An election by a surviving spouse is regulated by Section 10504-55 et seq., General Code. Under these statutory provisions a citation may be issued to compel an election; but whether the citation is issued, the election of the surviving spouse may be made either in person in the Probate Court or by written instrument signed by the spouse and duly acknowledged and filed in the Probate Court within the time allowed for making an election. If the election is made in person the court is required to explain the provisions of the will and what the rights axe under it as well as what the rights are by law. In case of refusal to take under the will, the statutes do not contemplate a determination of contested rights upon an election whether it is made in person or by written instrument. The filing of the written election by the widow, which election had incorporated in it a statement to the effect that the antenuptial agreement was procured by fraud and was repudiated, did not present an issue on the validity of the agreement for determination by the court. No hearing was had on that issue and the matter is not now pending in that court for hearing thereon.
On hearing the exceptions to the account the Probate Court entered this finding and judgment: "The court finds that the prenuptial agreement referred to and incorporated in the will as probated bars the widow from all allowances unless and until such prenuptial agreement is set aside; the court therefore overrules Exception No. 4 of said exceptor asking that the appraisers be ordered to set off the statutory 20% exemptions and a year's allowance."
No appeal was taken and the action of the court in effect amounts to an adjudication that that court had no jurisdiction to pass on the validity of the antenuptial contract. In our judgment the position taken by the court was sound.
Since no attack, which invoked the jurisdiction of a court to hear and determine the validity of the contract, was made within the six-month period, the contract must be deemed valid.
The finding of the trial court that there had been full disclosure was not prejudicially erroneous since the decision turns upon the interpretation of Section 10512-3, General Code.
The judgment of the Court of Appeals will be reversed and the judgment of the Court of Common Pleas affirmed.
Judgment reversed.
WEYGANDT, C.J., MATTHIAS, DAY, ZIMMERMAN and GORMAN, JJ., concur.
MYERS, J., concurs in paragraphs 1, 2, 3 and 4 of the syllabus.