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Estate of Schmalz

Supreme Court of Wisconsin
Apr 20, 1973
58 Wis. 2d 220 (Wis. 1973)


concluding that a prior probate proceeding which was held to determine the validity of the will which had been filed in probate did not estop later litigation of whether equity should impose a constructive trust over certain property of the decedent

Summary of this case from In re Estate of Milas v. Fischer


No. 81.

Argued February 27, 1973. —

Decided April 20, 1973.

APPEAL from a judgment of the county court of Waukesha county: DAVID L. DANCEY, Judge. Affirmed.

For the appellants Julius Schmalz, Marie Theresa Vredenbreght, Mary Ann Fellner, Robert A. Vida, Marjorie Vida and Joseph Bauernfeind, there were briefs by Petrie, Stocking, Meixner Zeisig, S.C., and Edmond F. Zeisig, all of Milwaukee, and oral argument by Edmond F. Zeisig.

For the respondents there was a brief by Harold R. Cox, attorney, and Stephen R. Miller of counsel, both of Milwaukee, and oral argument by Mr. Miller.

The residuary legatees of the will of John Schmalz seek have a constructive trust imposed upon the devise and bequest to one Margaret Mueller upon the ground of unjust enrichment.

The testator, John Schmalz, was a widower, seventy-three years old, and lived alone in his home in the town of Mukwonago, Waukesha county. The respondent, Margaret Mueller, was a widow, sixty-three years old, a second cousin of John Schmalz and lived in Milwaukee.

John Schmalz was described as a strong-willed, stubborn man who accepted advice with difficulty; Margaret was a mild-mannered and somewhat timid person. Margaret had performed some gratuitous services for John after his wife died and John was anxious to secure her services as a housekeeper and companion. She had performed some services for him in the past but no agreement nor definite arrangements were made. On March 9, 1971, upon John's suggestion, they entered into a written agreement for such services. She agreed to reside with him and cook and care for him the rest of his natural life. In return, he agreed to give her $100 per month while he lived, and that she be given his homestead located in the town of Mukwonago, Waukesha county, Wisconsin, and the sum of $10,000 from his estate. The contract concluded with the following two provisions:

The record discloses that the contract was arranged and discussed at the office of Mr. Kingston, John's attorney. Margaret was reluctant to sign the contract but did so at John's persuasion.

"This contract is expressly drawn to see that these conditions are met and to rebut any presumption of gratuity, in spite of any will provisions made.

"This contract shall be in full force and effect from the date hereof."

Within the following week Margaret went to John's home every other day. She cooked for him, did the grocery shopping and transported John by automobile to the chiropractor. She made no arrangements to move right into John's house because she had to take care of her own home first. She did not list her house for sale with a real estate broker, but she did try to sell it and had started packing and arranging her furniture and personal things preparatory to selling or moving. She asked John to live with her until everything got straightened out. Margaret testified that she was performing these services pursuant to the contract.

About March 16, 1971, a week after the contract was signed, John went into the hospital and remained there until April 11, 1971. During this period of hospitalization John called Margaret every day by phone and she came to see him every other day. She performed such services as writing out checks for John's utility bill and it appears she provided some companionship. She never discussed the contract with him and she never went to John's house during the hospital stay.

On March 23, 1971, two weeks after the written agreement was made, and while still in the hospital, John executed a new will leaving a legacy of $10,000 to Margaret and devising the homestead to her. The will left the residue of the estate to certain collateral relatives of his and of his deceased wife. Most of these relatives were nieces and nephews of both John and his wife. Several lived in Europe. Some of the appellants are among these residuary legatees. The will was drawn by his attorney, Mr. Kingston. The will made no reference to the agreement between John and Margaret. She was referred by him in the will as "my friend Margaret Mueller." The record does not indicate that John ever informed Margaret that the will was made or that she was aware that it had been made. This will was never revoked and was admitted to probate.

On or about April 2, 1971, Kingston and his wife visited John in the hospital. John told Kingston that Margaret refused to fulfill the contract and asked advice as to what he should do. Kingston told John to secure the other copy of the contract and immediately redraw his will. On Friday, April 9, 1971, two days before John left the hospital, he called Margaret and asked her to bring a copy of the agreement to him. He did not say why he wanted the agreement. The next day when she got there she said, "Here is the paper," and he told her to put it in the side drawer. She did and nothing else was said about the contract, nor did John tell her the agreement was terminated. She testified the following conversation then took place:

". . . Then I went home and he said he was going home. I said `Who's getting you home?' and he said `Somebody is taking me home,' and he didn't say that he wanted to come to my house, nothing, because we had said when he's ready to go out he should call me. I would come and pick him up and take him to my house. Then he said nothing about that and I didn't question anything. I left it go as it was."

There was testimony to the effect that she asked John to come and live with her until he got better before she moved in with him, and he agreed.

After this day she did not perform any services for John. She never asked for any payments under the contract nor did she ever receive any. When asked why, she stated:

"A. I'm not that kind of person.

"Q. You didn't think you had done enough work to deserve it, isn't that correct?

"A. No, I wouldn't say that — never."

John returned home the next day (Easter Sunday). Another woman named Mrs. Mammel was obtained through the help of Attorney Kingston. John had asked Kingston if he knew anyone who could assist him in his house so he could leave the hospital because Margaret refused to come. From approximately April 25, 1971, until May 9, 1971, Mrs. Mammel lived in John's house as a housekeeper. During the interim, on Thursday, May 6, 1971, John went to Attorney Kingston's office. He told Kingston's wife, who is his secretary, that "[s]he let me down. I want to make a new will." He tore up both contracts and threw them in the wastepaper basket. Attorney Kingston discussed the terms of the new will and asked John to wait for it to be typed so he (John) could sign it. He refused to wait and said he wanted to go home to do some work. He said he would come in that following Monday, May 10, 1971, to sign it. Kingston drafted the will that day. On Sunday, May 9th, John suffered a stroke. He was taken to the hospital where he died on May 15, 1971. He never regained consciousness. The new will was never executed and the March 23d will was never revoked. The unexecuted will made no provision for Margaret but did make provision for bequests totaling $25,000 to named charities and $10,000 to two friends. The residuary clauses were the same as the will of March 23d.

On July 19, 1971, appellants objected to probating the March 23d will, contending that Margaret breached her contract, that there was a failure of consideration, and that the devise and bequest to her was procured by fraud and undue influence. The petition for admitting the will and its objection thereto was set for trial on November 8, 1971. At the hearing appellants withdrew their objections and the will was admitted to probate. They admit that John was competent to draw the will and that Margaret did not exercise any undue influence, fraud or coercion. The approximate value of the estate before taxes was $174,000. The homestead was appraised at $29,000. On December 17, 1971, the appellants filed a petition asking that a constructive trust be imposed upon the legacy and devise to Margaret for the benefit of the residuary legatees. This petition alleged that Margaret refused, neglected and failed to perform the March 9th contract; a failure of consideration; the March 23d will was executed pursuant to this breached contract; and that Margaret would be unjustly enriched if she was to obtain the devise and bequest. A hearing was held on January 28, 1972. The court entered judgment in favor of Margaret dismissing the petition. The court stated that ". . . [it could] . . . find no theory under the instant fact situation which would justify the imposition of a constructive trust upon Margaret's devise and bequest for the benefit of the petitioners."

The collateral heirs who petitioned for the imposition the constructive trust, appeal.

We first consider the respondents' claim of estoppel by record in the proceedings for admission of the will to probate. The doctrine of estoppel by record prevents a party from litigating again what was actually litigated or might have been litigated in a former action. Gohr v. Beranek (1954), 266 Wis. 605, 64 N.W.2d 246; Kuchenreuther v. Chicago, M., St. P. P. R. Co. (1937), 225 Wis. 613, 275 N.W. 457. The constructive trust issue raised by the appellants in their objection to the admission of the will to probate could not be determined in that proceeding. The only question was whether the paper purporting to be the will off the testator represented his legally declared final wishes as to the postmortem disposition of his estate. Will of Rice (1912), 150 Wis. 401, 136 N.W. 956, 137 N.W. 778. Whether the disputed will provisions were contractual and whether Margaret Mueller had breached the contract so as to disable her from taking under them were irrelevant for the purpose of determining whether the will should be admitted to probate. Accordingly, appellants were not estopped by the record and the trial court was correct in denying respondents' motion to dismiss on that ground.

The respondents have a motion to review.

The appellants contend that Margaret Mueller would be unjustly enriched if she were permitted to take the property given to her under the provisions of the will and that to prevent this unjust enrichment equity should impose a constructive trust for the benefit of the residuary beneficiaries.

It is the appellants' claim that Margaret's failure to perform under the contract, except as to a nominal amount, constituted a breach of the contract and that by the mutual assent of both John and Margaret the contract was rescinded. They further assert that provisions in the will of March 23d for the benefit of Margaret were made only because it was contemplated that Margaret would comply with the contract and because she had done practically nothing for John she would be unjustly enriched.

The appellants concede John was competent to draw the will and that no undue influence, fraud or coercion has been exercised by Margaret upon John but insist that under the expanded test for the imposition of constructive trust of Estate of Massouras (1962), 16 Wis.2d 304, 114 N.W.2d 449, it would be unconscionable and inequitable to allow Margaret to take under the will.

In Massouras, the court stated at pages 312, 313:

"The facts in this case call for the imposition of a constructive trust. Such a trust is implied by operation of law as a remedial device for the protection of a beneficial interest against one who either by actual or constructive fraud, duress, abuse of confidence, mistake, commission of a wrong, or by any form of unconscionable conduct, has either obtained or holds the legal title to property which he ought not in equity and in good conscience beneficially enjoy. [Cases cited.]

"It was pointed out in Masino v. Sechrest (1954), 268 Wis. 101, 66 N.W.2d 740, and in Nehls v. Meyer (1959), 7 Wis.2d 37, 95 N.W.2d 780, that a constructive trust is a device in a court of equity to prevent unjust enrichment which arises fraud or abuse of confidential relationship and is implied to accomplish justice. In those cases, the grantee of property would have been unjustly enriched by a repudiation of an agreement. Similarly, here, the petitioner would be unjustly enriched by repudiation of the property settlement. Dean Pound observed, Thus constructive trust could be used in a variety of situations, . . . and sometimes to develop a new field of equitable interposition, as in what we have come to think the typical case of constructive trust, namely, specific restitution of a received benefit in order to prevent unjust enrichment.' The Progress of Law, Equity, 33 Harvard Law Review (1920), 420, 421. Restatement, Restitution, Constructive Trust, p. 640, sec. 160, states the rule as follows:

"`Where a person holding title to property is subject to an equitable duty to convey it to another' on the ground that he would be unjustly enriched if he were permitted to retain it, a constructive trust arises.'

"We consider the language in Will of Jaeger (1935), 218 Wis. 1, at page 13, 259 N.W. 842, that a constructive trust does not arise in the absence of fraud, positive or constructive, to be a too-limited statement of the basis for the imposition of a constructive trust as a `formula through which the conscience of equity finds expression.' See Beatty v. Guggenheim Exploration Co. (1919), 225 N.Y. 380, 386, 122 N.E. 378 (Cardozo)."

The least the appellants must prove under the Massouras rule is that there must have been some "form of unconscionable conduct" on the part of Margaret. The findings of the trial court make it clear that there was no unconscionable conduct on the part of Margaret. Throughout the relations between John and Margaret, John was the dominant one. It was John who asked Margaret to be his housekeeper and companion; it was he who suggested the contract and dictated its terms. He drew the will of March 23d without any prompting by Margaret, in fact without her knowledge. There is no evidence in the record to establish any wrongdoing or unconscionable conduct on the part of Margaret. Under the facts of this case as they appear in the record, and as set forth above, our holding in Massouras does not compel nor permit the imposition of a constructive trust.

We are urged, in effect, to go beyond Massouras and to impose a constructive trust upon the ground of unjust enrichment alone. We do not believe the facts of this case establish unjust enrichment on the part of Margaret. Neither at the time of the drawing of the March 23d will nor thereafter did John owe any duty to the residuary legatees. John, upon this record, had no obligation, legal or otherwise, to make provision for them in his will; nor was, Margaret guilty of any fraud, coercion, undue influence or unconscionable conduct that deprived them of anything that in equity and good conscience they were entitled to have. They have not established a greater equitable right to John's property than Margaret has.

See Kent v. Klein (1958), 352 Mich. 652, 91 N.W.2d 11.

See Richards v. Richards, post, p. 290, 206 N.W.2d 134.

This is not a case for the imposition of a constructive trust.

The will was admitted to probate. There are no facts which would permit a construction of its unambiguous terms. To do so would conflict with the sanctity the law affords to wills.

In Estate of Wilkins (1927), 192 Wis. 111, 112-115, 211 N.W. 652, this court stated:

"In the case of Nunnemacher v. State, 129 Wis. 190, 108 N.W. 627, it is said:

"`The right to take property by inheritance or by will is a natural right protected by the constitution which cannot be wholly taken away or substantially impaired by the legislature. . . .'

". . .

"In Will of Rice, 150 Wis. 401, 136 N.W. 956, 137 N.W. 778, this court held:

"`The right to make a will is more sacred than the right to make a contract. The right to make a will is incidental to the right to acquire property and so is one the inherent rights guaranteed by the constitution. It antedates common and civil law. It is sacred in all nations and under all conditions. It is guaranteed by sec. 1, art. I, of the constitution and also by sec. 13, art. XIV.'

"The language thus quoted is clear and explicit. It contains no ambiguities, and it is expressive of a constitutional guaranty relating both to personal rights and rights of property. So firmly are the foregoing doctrines, expressed in the Nunnemacher and Rice Cases and in numerous other cases decided by this court, entrenched in the jurisprudence of this state, that any attempt at this date to modify or upset them must be deemed futile. This sacred right to make a will rests entirely with the testator, who under our law can dispose of his property in accordance with his volition, excepting only as to certain rights which are extended by statute to a specified class of persons, designed for their protection as a matter of public policy. Under this exception comes the right of a widow to renounce the provisions of the will by accepting her statutory rights of dower. A testator may ignore wholly, if he desires, those in close relation to him by ties of blood, and he may bestow his devises and bequests upon persons who are ordinarily not deemed the objects of his bounty. Nor is any one permitted to make a will for him; neither can tile courts change or modify a will, or substitute in its place one which they deem more equitable and just, for to permit this would destroy the sacredness of a will and would substitute in its place the will of another.

". . .

"Under the provisions of sec. 238.14 of the Statutes `The power to make a will implies the power to revoke the same.' Edith Wilkins, therefore, not only had the sacred right to make the will in question, but she also possessed the right and power at any time during her life to revoke the same, and the power of revocation is equally as sacred as the power of making. It not infrequently happens that a testator arrives at a determination to revoke or modify his will, but before he is enabled to effectuate a change or revocation he meets with sudden death by accident or disease. Such occurrences, however, cannot affect the enforcement of the will so made, regardless of the high degree of proof that may be offered with respect to the testator's determination. In instances like these, sec. 238.14 comes into operation, for it determines how a will or any part thereof may be revoked or modified. A beneficiary under a will may be guilty of the commission of an atrocious crime upon the testator which may result in suffering and eventual death. Still, if the testator lives a reasonable time after the commission of the offense, and during such time retains his competency to make a new will or to revoke or modify the one already made, but fails or refuses to make a change, the will nevertheless becomes effective and must be enforced in accordance with its terms, and the offender will take thereunder, provided he is a beneficiary, notwithstanding his offense."

Nor do the facts of this case permit the imposition of a constructive trust, notwithstanding a breach or rescission of the contract. The will makes no reference to the contract and is not dependent upon it. There is no ambiguity upon the face of the will. There has been no fraud, duress, abuse of confidence, mistake, commission of a wrong or "any form of unconscionable conduct" on the part of Margaret. There is nothing in the record that even indicates she was aware of or knew about the March 23d will. The deceased had ample opportunity to revoke the will by any of the methods prescribed in sec. 853.11, Stats. In fact, he had almost one full month to revoke the will after April 10th, but before he was able to effectuate a change or revocation he died after suffering a stroke on May 9th. The deceased was asked to wait at the attorney's office on May 6th but he declined. Then it was too late. The deceased controlled the course of events, not Margaret. Such occurrences cannot affect the enforcement of the will so made notwithstanding the proof proffered on the testator's intentions. Estate of Wilkins, supra.

See Will of Derusseau (1921), 175 Wis. 140, 184 N.W. 705, 16 A.L.R. 1412.

By the Court. — Judgment affirmed.

Summaries of

Estate of Schmalz

Supreme Court of Wisconsin
Apr 20, 1973
58 Wis. 2d 220 (Wis. 1973)

concluding that a prior probate proceeding which was held to determine the validity of the will which had been filed in probate did not estop later litigation of whether equity should impose a constructive trust over certain property of the decedent

Summary of this case from In re Estate of Milas v. Fischer

declining to impose constructive trust where decedent added $ 10,000 bequest to defendant pursuant to a contract but defendant breached contract prior to decedent's death, because the will did not reference or depend on the contract and defendant engaged in no wrongdoing

Summary of this case from Tikalsky v. Friedman
Case details for

Estate of Schmalz

Case Details

Full title:ESTATE OF SCHMALZ: SCHMALZ and others, Appellants, v. McKENNA and others…

Court:Supreme Court of Wisconsin

Date published: Apr 20, 1973


58 Wis. 2d 220 (Wis. 1973)
206 N.W.2d 141

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