Summary
holding a present-tense clause in a will indicated a present intention
Summary of this case from United States ex rel. O'Donnell v. Countrywide Home Loans, Inc.Opinion
Submitted January 12, 1967
Decided March 2, 1967
Appeal from the Appellate Division of the Supreme Court in the Second Judicial Department, JAMES A. ROE, JR., J.
Benjamin Katz for Martha L. Mueller, appellant. Carlton A. Walls, executor of Conrad Mueller, deceased, appellant pro se. Harry J. Stein for respondent.
On October 23, 1961, Bertha and Conrad Mueller, after nearly a half century of marriage, executed a joint will providing that the estate of the first to die should go to the survivor, and on the survivor's death their property should go to certain named beneficiaries. Nine months later in July of 1962, Bertha died and Conrad, pursuant to the joint will, received her entire net estate. The following month Mueller's cousin, Martha Louise Mueller, the defendant herein, came to live with him, keeping house for him and, after he became ill, nursing him until his death in June, 1964. Conrad and Martha were married on March 12, 1963, and a week later on March 20 Conrad executed a new will naming his second wife sole beneficiary. This latter will has been admitted to probate.
On this appeal we are asked to determine the respective rights of the widow and the beneficiaries under the joint will to Mueller's property, consisting of a house and lot acquired by Bertha and Conrad as tenants by the entirety in 1919, and a joint bank account in Conrad and Martha's names, but funded with money received by Conrad as the surviving owner of joint bank accounts in the names of Bertha and himself. There is unanimity of opinion in this court that Conrad's final will was ineffective to alter the testamentary arrangement provided for in the joint will, but we are divided over the question of whether this decedent's earlier covenant with his first wife respecting the disposition to be made of their collective property on the death of the survivor should take precedence over the claim of the widow to a right of election to take against the earlier joint will.
The widow does not actually assert a right of election, as provided in section 18 of the Decedent Estate Law, since under the later will, properly admitted to probate as the last will and testament of her husband, she takes all, though subject to the claims of the beneficiaries named in the joint will. Her argument is, rather, that the public policy finding expression in section 18, seeking to guarantee the widow a distributive share in her husband's estate, constitutes a limitation upon the right of a party to a joint will to bind himself to a testamentary arrangement which would not provide a surviving spouse with such a share in his estate. Consequently, equity should decline to specifically enforce an otherwise binding obligation of the survivor under a joint will where such specific enforcement will frustrate this legislatively declared public policy.
On the first issue raised herein, the revocability of the joint will, the language in the instrument clearly indicates the Muellers' intention that its provisions should be binding upon the survivor. It "imports the joint disposition of the collective property of both, not the independent disposition by each of his own." ( Rastetter v. Hoenninger, 214 N.Y. 66, 72; see, also, Rich v. Mottek, 11 N.Y.2d 90, 94; Tutunjian v. Vetzigian, 299 N.Y. 315, 320.) The recently decided case of Matter of Zeh ( 24 A.D.2d 983, affd. 18 N.Y.2d 900), wherein we held that the joint will in question was not binding upon the survivor, is distinguishable from the present case. In Zeh the survivor was given all the property, "meaning thereby that the survivor of us shall be the absolute owner, to him or to her to have and to hold, his or her heirs and assigns absolutely and forever, of all that both of us possess." (Emphasis added.) Under the rule that before the right to alter or revoke a will may be curtailed prior to the testator's death his intention to so bind himself must be manifested clearly and unambiguously (see Oursler v. Armstrong, 10 N.Y.2d 385, 389), the use of language such as "absolutely" barred our finding that the survivor was bound to the testamentary plan found in that joint will. In the instant case, on the other hand, the Muellers' intention is clear and unambiguous. The phrasing used in paragraph "THIRD", providing that "[u]pon the death of the second one of us to die, or in the event of our simultaneous deaths or deaths resulting from a common disaster, then the estate of the second decedent, or of both of us as the case may be, is hereby bequeathed, devised and disposed of as follows", is in the present tense, and thus implies a present joint intention to make a gift of the collective property to the named beneficiaries, effective upon the survivor's death, but binding as of the signing of the joint will. The entire context of the will is plural, the pronoun "we" is used instead of "I", "our" instead of "my" and "us" instead of "me". (See Rich v. Mottek, supra, p. 94; Tutunjian v. Vetzigian, supra, p. 320.) Moreover, this will contains an express revocation of a prior joint will and it omits the provision in that prior will describing the survivor's right to alter the disposition made of the signatories' property. The omission of this provision in the later joint will is persuasive evidence that the second joint will was intended to be irrevocable. (Compare the analysis employed by this court in Tutunjian, supra, p. 320, where we took note of the fact that the joint will there in question "preserved and repeated the same dispositions without substantial change" that were contained in an earlier will.)
On the other issue raised here, the effect of section 18 of the Decedent Estate Law on the right of the beneficiaries under the joint will to obtain specific enforcement of the covenant by Mueller contained in that will, we are of the opinion that the named beneficiaries under the joint will are entitled to prevail and a constructive trust in their favor was properly impressed upon the property received by the widow under the later will.
As to property received by Mueller under the joint will there can be no question but that upon his acceptance of such benefits under that instrument a trust was impressed in favor of the beneficiaries to the extent expressed in Tutunjian. As to such property Mueller really took but an interest during his life with a power to use or otherwise dispose of principal, and the named beneficiaries took the interest which remained. Under such circumstances he had no property interest in these assets against which his widow's right of election could operate.
The bulk of the property involved did not come to Mueller under the joint will. His interest in the real property, for example, commenced as a tenant by the entirety, ripening into sole ownership through his surviving his first wife. Similarly, his formal title to most of the personalty, consisting of savings accounts, derived from his surviving Bertha, with whom he had these joint accounts. In addition, it is not clear from the stipulated facts whether any of this jointly held property represented the independent estate of Bertha Mueller or whether, as is typical, it represented the jointly held fruits of Conrad's labors outside the home aided by Bertha's efforts within the home for their lifetime together. In any event we do not attempt a segregation of assets of husband and wife after a marriage of this duration. For all practical purposes, equity may content itself with considering the assets as their collective property, as if their estates had merged.
As to this collective property we feel that, on the death of one party to the joint will, the survivor was bound by the mutual agreement that the named beneficiaries should receive the property remaining when the survivor died. (See Hermann v. Ludwig, 186 App. Div. 287, 297, affd. 229 N.Y. 544.) As we pointed out above, the agreement embodied in the joint will provides that "Upon the death of the second * * * the estate of the second * * * is hereby bequeathed, devised and disposed of as follows". The survivor's right to full ownership of the collective property is transformed and modified by this joint agreement, effective upon the other's death as stated above, into but an interest during the life of the survivor with power to use the principal. "While neither a husband nor a wife can dispose of property owned by them as tenants by the entirety so as to affect the right of survivorship, they may do so by acting in concert, as by a joint will, or by a contract." ( Azzara v. Azzara, 1 A.D.2d 1012, 1013; see, also, Swerdfeger v. Swerdfeger, 4 A.D.2d 535. ) After Bertha's death, then, the property received by Conrad was his but subject to an interest enforcible specifically as to so much of it as he did not consume during his lifetime.
Contrary to the result which we here reach, the defendant urges that the widow's right of election constitutes a limitation on the freedom of an individual to so incumber his estate. In support of this contention she directs our attention to a number of lower court cases involving marital separation agreements under which husbands covenanted to make a will leaving all or a portion of their property to the estranged wife or to their children and later remarried, leaving widows. In these cases the learned Surrogates correctly held that the former wife's right to specific enforcement of the agreement must give way to the widow's statutory right to a share in her husband's estate. ( Matter of Lewis, 4 Misc.2d 937; Matter of Erstein, 205 Misc. 924; Matter of Hoyt, 174 Misc. 512.) These cases are, however, distinguishable from the instant case and they present different equitable considerations. Separation agreements are usually attended by a present division of any jointly held property, and any provision for a future legacy is usually but an incident to the over-all settlement to be made with respect to the husband's individual property and his obligation of support. In the case of the joint will, however, this instrument typically represents the sole attempt by the signatories to effect a distribution of their collective property in a fashion agreeable to both. Most importantly, in those separation agreements there was no irrevocable obligation concerning the collective property. The husband did not, as Mueller did here, become sole owner of jointly owned property by virtue of surviving the former wife. As the divorced husband's property after the agreement remains his own individual property, to which he holds beneficial as well as legal title, his widow's right of election may be asserted against such assets.
Accordingly, the order of the Appellate Division affirming the judgment of Special Term should be affirmed, without costs.
In this action by a testamentary beneficiary for specific performance of an agreement between spouses for disposition of property by a joint will, the second and surviving wife pleads as an affirmative defense that she "is entitled to a right of election pursuant to Section 18th of the Decedent Estate Law".
The judgment at Special Term and the order at the Appellate Division accorded no recognition to this asserted right of election; and the question is squarely presented by defendants-appellants on this appeal.
The "personal right of election" of a surviving spouse to take his share of the estate "as in intestacy" is a right which cannot be impaired by any testamentary disposition effected by the other spouse.
The Commission to Investigate Defects in the Laws of Estates proposed the creation of a right of election in its report to the Legislature in 1928 (N.Y. Legis. Doc., 1930, No. 69) as a substitute for dower.
It reported that in line "with the progressive policy of modern legislation, and in place of dower, the Commission recommends that there be substituted the right of the widow to take her intestate share against the provisions of the will" (p. 87). The right of election was intended to end "a glaring inconsistency in our law" (p. 86). The recommendation resulted in the enactment of the predecessor of present section 18 in 1929 (L. 1929, ch. 229).
It is rather clear that if the property concerning which the election of a surviving spouse is made is property in the estate of the decedent, and an attempt is made to pass it by will, the election is valid against such a will; and the surviving spouse takes to the extent of the statutory formula as in intestacy.
A different result cannot be made to occur because the will is executed in accordance with a good contract; or is executed before the marriage of the surviving spouse; or because of the accident of where or how the property transferred originated. The election is a "personal right" in a surviving spouse against all wills whenever and however executed.
The husband, after the death of the first wife in the present case, had complete title to the real property that had been held by the entirety and he had title to the proceeds of the joint bank accounts. He had a contractual obligation with his deceased wife to continue the joint will in effect; but there was certainly no resulting trust.
He could have given the property away or consumed it without any fiduciary accountability whatever to this plaintiff and plaintiff had no interest of any kind enforcible against such property during his lifetime and at his death she had the benefit of a contract to make a will which is enforcible subject to the right of election of the surviving wife.
The basic legal effect of the execution of the superseding will is to be seen in Tutunjian v. Vetzigian ( 299 N.Y. 315). There it was held that when there is a breach by one of the parties of an agreement expressed in a joint will not to revoke it, the court will recognize the legal power of the testator to do this, but equity will compel his executor and beneficiaries "to perform the contract" of their decedent ( 299 N.Y. 315, 319, per FULD, J.).
This means in legal theory that the property is deemed in the estate and subject to testamentary disposition, but the court will control the disposition posthumously. It follows that the surviving spouse's right of election to an intestate share is assertable against the estate and against any will which would cut her off.
Such an interpretation, indeed, was addressed by Surrogate FOLEY to section 18 in Matter of Hoyt ( 174 Misc. 512). Surrogate FOLEY had been chairman of the Commission on Estates which had proposed the enactment of the "personal right of election" in substitution for dower.
In Hoyt, the husband had made a binding contract in a separation agreement to create a trust for his first wife with the remainder to her children. The second wife, a surviving spouse, exercised her right of election against the will executed in accordance with this valid agreement. The court held the rights of the first wife and her children were "not superior to those of the surviving widow" (p. 514).
There was in that case, accordingly, a binding contract to make a will, and a will was made in pursuance of it. Yet the agreement and the will were compelled to yield to the right of the second wife as surviving spouse to elect to take as in intestacy. The superficial factual differences between that case and this one do not affect the common principle which unifies them. Matter of Erstein ( 205 Misc. 924) and Matter of Lewis ( 4 Misc.2d 937) are consistent and based on Hoyt.
When it comes to a matter of the equities involved in this equitable action, the surviving spouse who seeks to make the election which the statute gives her is possessed of superior equitable rights. She married decedent on March 12, 1963. In August, within six months of this marriage, decedent became ill of cancer from which he died 10 months later, on June 28, 1964.
It is expressly stipulated that the surviving spouse "took care of him and nursed him until he died". As far as the record shows, the plaintiff, a niece of the first wife, did nothing for the testator, and it seems not unreasonable that the surviving widow's share, at least, of the property which decedent had accumulated and which is not shown to have been derived individually from the first wife, go to the surviving spouse on her election. No one would suggest that, had dower been continued in New York, this joint will could have defeated the surviving wife's dower and the right of election, as a statutory substitute for dower, is much the same thing.
The order should be modified to allow the appropriate scope to be given to the right of election of the surviving spouse.
Judges VAN VOORHIS, SCILEPPI, KEATING and BREITEL concur with Judge BURKE; Judge BERGAN dissents in an opinion in which Chief Judge FULD concurs.
Order affirmed.