Court of Appeals of the State of New YorkOct 6, 1908
193 N.Y. 18 (N.Y. 1908)
193 N.Y. 1885 N.E. 818

Argued June 12, 1908

Decided October 6, 1908

H.D. Luce and Charles C. Dickinson for appellant. Frederick S. Fisher and William H. Wadhams for respondent.


The complaint does not rest upon actual fraud alleged as matter of fact, but on constructive fraud alleged as a conclusion of law. The theory of the pleader was that the plaintiff, by means of the ante-nuptial contract made between her mother and the decedent, became entitled to all the property of the latter at his death, without any reduction through gifts made in his lifetime; that, in the words of her counsel, "there was no option given to the decedent as to the sum or sums which he might give away," either in his lifetime or by last will and testament and that he held his property as a quasi trustee with power to use for the support of himself and family, but with no power to make a donation of any substantial amount to any person, or for any purpose.

This construction of the contract is not required by the words used and it would lead to such absurd results as to show that it was not within the intention of the parties. It would have prevented the decedent from dropping a "ten-dollar bill" in the contribution box as it was passed to him in church on Sunday; from giving a few dollars to relieve want or assuage pain; from making a Christmas present to a friend, and, regardless of the extent of his estate, from helping to build a church or support a hospital.

What was the contract? The decedent agreed to adopt the plaintiff and make her his heir; to give her all his property by will, unless he should leave a child or children of his own, and in that event to divide his property equally between all the children, herself included.

What was the effect of the contract, construed, as it should be, in the light of the circumstances surrounding the parties when it was made, with reference to the use by the decedent of his property while he lived? The answer to this question is not to be found in his promise to "bequeath and devise all his property" to the plaintiff, read by itself, but read in connection with the context that he would adopt her and make her his heir. When thus read, the reasonable construction is that he intended to treat the plaintiff as his own child and when he died to leave his property to her, or to her and his own children if he had any. He did not intend to create a trust in her favor, or to deprive himself throughout his life of power to use his property as men with wife and children depending upon them ordinarily use their property. He intended to give the plaintiff the legal status of a child of his body and to leave her his property after he was through with it. He did not intend to so fetter his estate for all time that he could not hold up his head among men and do what others do with the property they accumulate. The lady whom he was about to marry, as in the nature of things it must be presumed, could not have intended to belittle and humiliate him in advance by depriving him of power as long as he lived to make a gift to charity or a present to a friend, even if it was reasonable in amount, when the size of his estate was taken into account. Such a debasing covenant would dishonor both parties, and is inconceivable under such circumstances as the complaint discloses.

The intention of the plaintiff is not to be sought for, as she was not a party to the agreement except by indirection, but that of the two persons on the threshold of marriage, and presumed to be deeply attached to each other. The lady had been married before. She had a child and a substantial sum of money. In lending that money to her prospective husband to use in his business she made the same provision for her child as if it were a child of the marriage about to take place. By that provision her child was to be adopted by her husband as his own, and made his heir, and he was to leave it his property when he died. It would be unreasonable to hold that either party, by such an agreement made under such circumstances and for such a purpose, intended that the head of the family, although he might live to be an old man and be worth millions, could never consider an application for charity without a blush, because by agreement with his own wife, he could not give any substantial sum even to the most noble object. The intention of the parties may be doubtful when particular words used by them are considered by themselves, but it is clear when all their words are read together in the light of their mutual promises to marry. Regard must be paid not only to their language, but also to what the law implies therefrom in view of their situation.

It is asked, however, whether the decedent could give away all his property to his own relatives, and thus defeat the ante-nuptial contract altogether. And, assuming that he could not do this because it would be unreasonable, it is further asked where the line is to be drawn between the power to give away all and to give away nothing. That line is to be drawn where the courts always draw it when they can, along the boundary of good faith. If the decedent had given away property with furtive intent, for the purpose of defeating the ante-nuptial contract and of defrauding the plaintiff, the gift would have been void. No such fact is alleged in the complaint. No case of fraudulent intent or fraud, in fact, is presented by the plaintiff. Her theory is that any gift, or at least that any substantial gift by the decedent, even if made with the best of intentions, was unauthorized and void. We do not so read the contract. Any gift made with actual intent to defraud would be void, but none made without such intent, unless so out of proportion to the rest of his estate as to attack the integrity of the contract, when it would be fraudulent as matter of law. The gift might be so large that, independent of intent or motive, fraud upon the contract would be imputed, or arise constructively by operation of law. Reasonable gifts were impliedly authorized. Unreasonable gifts were not, even if made without actual intent to defraud. In the absence of intentional fraud, the question is one of degree and depends upon the proportion that the value of the gift bears to the amount of the donor's estate. The plaintiff alleges that the decedent accumulated a large fortune and had it at the time of his death, and if so a gift of $10,000 made in his lifetime to his brothers and sisters would not be a fraud upon the contract as matter of law, for it would not be unusual or unreasonable for a man so situated to make a gift of that amount to near relatives.

The plaintiff can take nothing in this action by virtue of her judgment in the former action, for, as she expressly alleges, the decree for specific performance is confined to the "money or other property owned and left by the said George W. Kidd at the time of his death." The policy in question was property, but it was neither owned nor left by Mr. Kidd when he died, for by his lawful act it had become the property of others.

We think that the action of the courts below in sustaining the demurrer to the complaint was proper and that the judgment appealed from should be affirmed, with costs.


Judgment affirmed.