Summary
adopting the Colorado Supreme Court’s analysis distinguishing a claim against the estate and the rights of a claimant under a contract with the deceased
Summary of this case from In re Estate of CooneyOpinion
No. 7,686.
Submitted September 30, 1937.
Decided November 2, 1937.
Wills — Oral Agreement to Make Will in Favor of Plaintiff — Breach — Specific Performance — Court of Equity Proper Forum — Complaint — Sufficiency — Inapplicability of Statute of Nonclaim. Wills — Specific Performance to Enforce Oral Agreement to Make Will in Favor of Plaintiff — Equity — Complaint — Sufficiency. 1. Complaint in an action in the nature of one to enforce specific performance of an oral agreement entered into by a decedent with plaintiff under which the former had promised that in consideration of services of a personal nature performed and to be performed by the latter during decedent's lifetime, decedent would bequeath to plaintiff a stated sum of money, alleging inter alia that the services had been performed, that decedent did make a will so providing which was subsequently declared invalid, that the services performed were such as could not be measured in money, etc., held sufficient to state a cause of action in equity. Same — Failure to Make Will as Promised — Specific Performance — Equity. 2. One may make a valid contract to dispose of his property by will in a certain manner, and where the promisor fails to carry out his promise to make such a will, courts of equity will grant relief in the nature of specific performance by compelling the personal representative of the decedent, his heirs, devisees or legatees to hold the property as trustee for the benefit of the promisee. Same — When Statute of Nonclaim Inapplicable. 3. The statute of nonclaim (sec. 10173, Rev. Codes), providing that unless claims against estates are presented within a specified time they are forever barred, does not apply to a claim arising out of an alleged agreement of decedent to make a will bequeathing a specified sum of money to one in consideration of services rendered to decedent during her lifetime. Same — Specific Performance — Inadequacy of Legal Remedy — Case at Bar. 4. Since under the last above rule the statute of nonclaim has no application to a claim for the specific performance of a contract made by a decedent during his lifetime to make a will in favor of one for services performed, contention that the equitable remedy could not be enforced because plaintiff had an adequate remedy at law by presenting her claim against the estate and bringing action thereon if rejected, held without merit. Same — Specific Performance — Damages not Measurable by Money — Court of Equity Proper Forum. 5. In an action for damages (a law action) the injured party has the burden of proving the amount thereof, and damages are inadequate in proportion to his disability to bear such burden; hence where plaintiff in her suit to enforce an oral agreement made between her and a decedent, to make a will in her favor for services performed alleged to have been of a peculiar nature the value of which could not be measured in money, the extent of her damages could not be proven in an action at law, and a court of equity was the proper forum in which to bring the suit. Same — Specific Performance — Further Reason Why Suit in Equity Proper Remedy. 6. One asserting a claim of the above nature against the administrator and heirs of a decedent before settlement of his estate may not be classed as a creditor of the estate whose claim is payable from its gross value before distribution, but must be placed in the class of legatees to whom only the net value of the estate may go — a further reason why a suit in equity was the proper remedy.
Appeal from District Court of Beaverhead County; Lyman H. Bennett, Judge.
Mr. Howard A. Johnson and Mr. Clarence E. Wohl, for Appellant, submitted an original and a supplemental brief; Mr. Johnson argued the cause orally.
Messrs. Gilbert, Gilbert McFadden, for Respondents, submitted a brief; Mr. Theo. F. McFadden argued the cause orally.
Plaintiff is entitled to equitable relief. The relief afforded by a court of equity where there has been a breach by the promisor of a contract to make a particular will is well set forth in 1 Page on Wills, 2d ed., 1. (See, also, Burns v. Smith, 21 Mont. 251, 53 P. 742, 748, 69 Am. St. Rep. 653, Sanger v. Huguenel, 65 Mont. 236, 211 P. 349, 351, Andrews v. Aikens, 44 Idaho, 797, 260 P. 423, 424, 69 A.L.R. 8, Owens v. McNally, 113 Cal. 444, 45 P. 710, Morrison v. Land, 169 Cal. 580, 147 P. 259, 33 L.R.A. 369, and Zellner v. Wassman, 184 Cal. 80, 193 P. 84.)
In cases of this character equity, in invoking its jurisdiction, makes no distinction between real and personal property. (58 C.J., p. 1060; Bateman v. Franklin, 114 Kan. 183, 217 P. 318, 319; Ohlendiek v. Schuler, (Ohio) 299 Fed. 182, 187.) The test in Montana is the nature of the plaintiff's services and not the nature of the thing to be devised. ( Gravelin v. Porier, 77 Mont. 260, 250 P. 823, 831.)
In the case of Morrison v. Land, supra, it was held that if a promisee under a contract to make a will, has an adequate remedy at law, he is a creditor of the promisor's estate and must, as a condition precedent to filing suit, present a creditor's claim. In that respect we have found no cases contra. ( Ruble v. Richardson, 188 Cal. 150, 204 P. 572 ; 3 Bancroft's Probate Practice, sec. 776, p. 1385.)
Here plaintiff had no opportunity to present a claim. The promisor had executed a will in which she bequeathed to plaintiff the sum of $4,000. This was in accordance with the terms of the agreement. The will was admitted to probate and plaintiff thereafter began to render services for the executor of promisor's estate, in accordance with the terms of the agreement. Plaintiff first learned of the breach of the contract by the promisor on March 9, 1932, when the decree was made revoking the probate of the will. The time for presenting creditor's claims had expired some eight months prior to that time. To have filed a claim would have been inconsistent with her claim as a legatee and would have been in effect to change the terms of her contract with promisor. ( James v. Lane, 103 Kan. 540, 175 P. 387, 388.) In another respect the presentation of such a claim would have been impossible in any event. It was plaintiff's duty under her contract to give the executor her entire aid in his unquestioned duty to sustain the will. Her presentation of such a claim would have constituted an election to regard the will as invalid and would have breached her obligation to assist the executor.
There are many decisions on record where claimants have sought to establish their claim against an estate after the same was barred by failure to present the same within the time prescribed by the statutes of nonclaim. Whether relief was given or denied depended upon the particular facts of each case and also upon the provisions of the particular statute of nonclaim. In none of the cases found were the facts and relief asked for analogous to those in the present action. A compilation of many of the decisions appears in the note to 71 A.L.R. 940.
In the instant case it is not sought to establish a creditor's claim against the decedent's estate; rather plaintiff seeks in effect the specific enforcement of the contract to bequeath her the sum of $4,000, and this relief is sought not on the theory that equity will relieve against the statute of nonclaim, but upon the well-established principle that equity will give relief where there is no adequate remedy at law.
The jurisdiction of a court of equity to afford relief where a remedy at law once existed but has been lost to plaintiff is stated in 21 C.J., sec. 22, p. 47. (See, also, 10 R.C.L., sec. 32, p. 288; Ohlendiek v. Schuler, supra.)
The complaint states a cause of action in equity. It alleges an express contract to make a will. It is based on an adequate consideration, namely, the rendering of services in consideration for the legacy. The contract was fair and equitable. Plaintiff's services were rendered over a period of approximately thirteen years. The complaint expressly states the circumstances under which the contract was made and directly and expressly sets forth the reasons why plaintiff is without an adequate remedy at law and why equitable relief is necessary. As relief is prayed for against the administrator of the estate, and the heirs at law of decedent, all these parties are named parties defendant. The fact that no cases are cited where relief has been given under exactly analogous facts will not defeat equitable jurisdiction, as equity does not proceed upon precedent. ( Times-Mirror Co. v. Superior Court, 3 Cal.2d 309, 44 P.2d 547, 557.) In Merrihew v. Parrott, 168 App. Div. 704, 154 N.Y. Supp. 747, the court held that equity need not seek precedents, nor worry about the technical rules of law.
A contract to make a will means an effectual and valid will. (28 R.C.L. 65.) Where a promisor dies leaving a will which complies with his contract, but the will is for some reason invalid, it is tantamount to leaving no will at all, and constitutes a breach of the contract. (68 C.J. 577.) No breach of a contract to make a will, under circumstances such as presented in the case at bar, "can occur or be assumed so long as the promisor lives. Even so, however, the breach when it does occur, is one committed by the deceased and the liability on account thereof is his." (68 C.J. 579.) To the same effect see Morrison v. Land, 169 Cal. 580, 147 P. 259. When, therefore, Maggie Courtney died leaving a will which complied with her contract to bequeath appellant the sum of $4,000, but the will was invalid, she in fact left no will at all, she thereby and thereupon breached the contract, and the liability on account thereof was and is hers.
Appellant in her brief recognizes the rule that courts of equity will decree specific performance of breached contracts to devise or bequeath property by will, only in those cases where the injured party's remedy at law for the breach is inadequate or, in other words, where the damages recoverable in an action at law would not compensate him for the breach; and, also, that courts of equity neither grant nor deny specific performance of such contracts "upon any distinction between realty and personalty." ( Gravelin v. Porier, 77 Mont. 260, 250 P. 823; Morrison v. Land, supra; Zellner v. Wassman, 184 Cal. 80, 193 P. 84.)
The compensation recoverable by the injured party in an action at law for the breach of a contract to devise or bequeath property by will, is thus stated in 68 C.J. 601: "In an action for damages for breach of contract, the measure of damages is what the promisee has lost by the promisor's failure to keep his agreement, which is ordinarily the value of the property agreed to be bequeathed or devised, or of the provision or disposition for plaintiff's benefit agreed to be made, less whatever deduction lawfully ought to be made, and not the value of the services rendered or other consideration furnished by the promisee." In view of the foregoing measure of damages, the decided cases are unanimously to the effect that where, as in the case at bar, a contract to bequeath a definite sum of money by will has been breached, equity will decline to decree specific performance of the contract, even though the consideration therefor consisted of the rendition, by the injured party, of services of a peculiar nature whose value cannot be estimated in money, because an action at law for damages would bring the injured party the very sum of money agreed to be bequeathed, which is everything he is entitled to receive under the contract, and is all that specific performance of the contract could afford him. This rule was given full recognition and approval by this court in the frequently cited case of Burns v. Smith, 21 Mont. 251, 53 P. 742, 69 Am. St. Rep. 653. Morrison v. Land, 169 Cal. 580, 147 P. 259, is undoubtedly the outstanding American case, on somewhat similar facts. The court closed its opinion thus: "A clearer case of adequacy of remedy at law could not be made than that presented here. The situation is such as to absolutely preclude resort to equity." (See, also, Zellner v. Wassman, 184 Cal. 80, 193 P. 84.)
Appellant apparently urges, however, that when Maggie Courtney's purported will was admitted to probate, and at all times thereafter until the probate thereof was revoked, it appeared that Maggie Courtney had performed her contract, because the will bequeathed appellant the sum of $4,000; that, in consequence, appellant did not discover, and could not have discovered, that Maggie Courtney breached the contract until the probate of her purported will was revoked; and that, as the time within which appellant could have presented a creditor's claim against Maggie Courtney's estate for the breach expired long prior to the revocation of the probate, equity will excuse appellant's failure to present such claim, and specifically enforce the contract. This contention might have merit if appellant were precluded from presenting a claim against Maggie Courtney's estate at any time prior to discovery of the breach, but such was not the case. At all times between the admission of the purported will to probate and the revocation of the probate thereof, appellant was a contingent creditor of Maggie Courtney and, as such creditor, had a contingent claim against her estate arising upon contract, within the meaning of the provisions of section 10173, Revised Codes 1935, requiring that "contingent," as well as absolute claims, "arising upon contracts" must be presented to the executor or administrator of a decedent's estate within the time limited in the notice to creditors, or be "barred forever".
This is an appeal from a judgment of dismissal and for costs entered in favor of defendants after a demurrer to plaintiff's complaint was sustained. The only question before us is whether the complaint states facts sufficient to constitute a cause of action. The important facts alleged are these:
Maggie Courtney died at Dillon on August 1, 1930, leaving real [1] and personal property worth approximately $20,000. On September 2 thereafter a document purporting to be her last will and testament was admitted to probate and letters were issued to Chris Snyder, the executor named in the purported will; and as such executor he caused notice to creditors to be published, requiring presentation of claims within ten months after September 17, or on or before July 17, 1931. On April 4, 1931, a petition to revoke the probate of the will was filed, and on March 9, 1932, judgment was entered revoking the probate of the will as well as the letters testamentary. On April 30, 1932, letters of administration were issued to defendant Winnifred Emerick. Maggie Courtney left no other will, and left as her only heirs at law one sister and nephews and nieces, the children of deceased brothers and sisters, who are defendants in this action.
During the year 1918, plaintiff, at the request of Maggie Courtney, began to look after her personal and financial affairs and continued to do so until the death of Maggie Courtney. The services consisted of writing letters and other papers, looking after property, writing checks, keeping track of bank accounts and bank balances, paying taxes, making collections, advising Maggie Courtney upon personal, business, and miscellaneous matters, and, in general, performing confidential and personal offices and services, "part of which can be performed only by a close friend and associate and cannot be purchased or had on an ordinary employment basis." It is alleged that among other services plaintiff "advised and protected the said Maggie Courtney against gross abuse of confidence and improper interference with and control of her affairs on the part of certain relatives and others who had theretofore stood in confidential relationship with said Maggie Courtney and who sought improperly to use their said confidential relationship for their own ends and against the interests of said Maggie Courtney."
It is further alleged that plaintiff protected Maggie Courtney against the efforts of certain persons to have her adjudged insane and committed to the hospital for the insane; that it would be impossible to determine the money value of the services; that about June 25, 1927, plaintiff and Maggie Courtney entered into an agreement whereby it was agreed that in consideration for such services theretofore performed and to be performed during the lifetime of Maggie Courtney, she would bequeath to plaintiff a legacy in a sum to be thereafter determined; that about March 1, 1929, it was agreed and determined that the legacy was to be the sum of $4,000; that the deceased attempted to perform the agreement by providing for such a legacy in the purported will which she made; that plaintiff relied upon the bequest and in good faith believed that Maggie Courtney had fully performed her part of the contract, and did not discover until on March 9, 1932, when the judgment was entered revoking the probate of the will, that she had not done so; that the time for presenting claims against the estate expired on July 31, 1931, long before such judgment was entered; that the interest which defendants have in the estate are as next of kin, and not otherwise, and that the rights of defendants in the estate to the extent of $4,000 are only as trustees for plaintiff; and that plaintiff, in equity and good conscience, is entitled to the sum of $4,000 from the estate after the payment of all debts and expenses of administration.
The prayer is for specific performance of the contract; that defendants be declared to be trustees for plaintiff to the extent of $4,000, with interest; and that the court enter a decree establishing plaintiff's right as a legatee to the extent of $4,000, with interest, and enjoining other disposition or distribution thereof.
That a person may make a valid contract to dispose of his [2] property by will is no longer open to doubt. ( Burns v. Smith, 21 Mont. 251, 53 P. 742, 69 Am. St. Rep. 653; Sanger v. Huguenel, 65 Mont. 236, 211 P. 349.) In case the promisor fails to carry out his promise to make a valid will, courts of equity will grant relief in the nature of specific performance by compelling the personal representative, the heirs, devisees, or legatees to hold the property as trustees for the benefit of the promisee. Page in his work on Wills, 2d ed., vol. 1, section 107, page 192, has well stated the rule as follows: "If promisor has entered into a valid contract to devise or bequeath property, and dies without leaving a valid will in accordance with the terms of the contract, equity will give relief, subject to the restrictions which equity imposes in cases of this sort in general, and subject to the satisfaction of each specific case. This is often spoken of as specific performance. It is, of course, not technical specific performance, since there is no attempt to compel the promisor to make a will. It is rather relief in the nature of specific performance. The real purpose is to have the heirs, devisees, next of kin, or personal representative of the deceased promisor held as trustees of the property which the promisor had agreed to devise or bequeath, and to compel them to hold the legal title thereto for the benefit of the promisee cestui que trust." This remedy is more frequently resorted to when the subject-matter of the contract is real estate rather than personal property, but the jurisdiction extends likewise to contracts relating to personal property, the real basis for the action resting upon the ground that damages at law will not afford a complete remedy. ( Gravelin v. Porier, 77 Mont. 260, 250 P. 823; 58 C.J. 1060.)
It is at this point that the counsel for the respective [3, 4] parties take divergent views. Counsel for defendants contend that plaintiff had an adequate remedy at law by presenting her claim against the estate under section 10173, Revised Codes, and bringing action thereon if rejected. Plaintiff's counsel contend that it was unnecessary to present a claim in order to enforce the equitable remedy.
It is not necessary to present a claim for the specific performance of a contract entered into by deceased during his lifetime. ( In re Bank's Estate, 80 Mont. 159, 260 P. 128.) This is the general rule also in equitable actions to enforce specific performance of a contract to make a will by fastening a trust upon the property agreed to be willed.
The supreme court of Arkansas, in Fred v. Asbury, 105 Ark. 494, 152 S.W. 155, 157, in discussing this question said: "The statute of nonclaim is urged as a bar to the relief sought. This statute provides that all claims against estates of deceased persons shall be barred unless they are properly authenticated and presented to the executor or administrator within one year after the grant of letters; but this is not a proceeding to enforce a claim or demand against the estate of Jacob Fred, deceased, but is one to determine the rights of the parties to this suit to the property in question. The statute of nonclaim does not refer to claims of title, or for the recovery of property, for the reason that claims of such a character cannot in any just sense be said to be claims against the estate of the deceased. On the contrary, the right to recover is based upon the fact that the property claimed does not belong to the estate, but belongs to the party asserting title to it." To the same effect are McCullough v. McCullough, 153 Wn. 625, 280 P. 70; Furman v. Craine, 18 Cal.App. 41, 121 P. 1007; Brickley v. Leonard, 129 Me. 94, 149 A. 833; Oles v. Wilson, 57 Colo. 246, 141 P. 489, 491.
Defendants contend that while this is the general rule, there is an exception when the agreement is to will a specified sum of money. They contend that in such a case there is an adequate remedy at law to recover that amount of money, and rely upon the cases of Morrison v. Land, 169 Cal. 580, 147 P. 259, and Zellner v. Wassman, 184 Cal. 80, 193 P. 84. These cases support their contention, but we do not agree with the reasoning upon which they are based. We agree with and follow the Colorado supreme court on this point. The question was before that court in the case of Oles v. Wilson, supra. In that case the agreement was that the promisor would bequeath "a portion amounting in the minimum to or sum equal to not less than one-third (1/3) of the valuation of his entire estate." In a suit for the specific performance of the contract it was held that it was not necessary to present a claim. The court, after reviewing the statutes of that state, which are similar to though not identical with ours, said: "It seems clear from the different sections of the act, taken and construed together, as well as from the nature and reason of the case, that the words `all demands against the estate,' as used in the statute, do not include a claim of the nature of the one forming the basis of this suit. The contract before us contemplates that the `demands' of the statute, of all classes, should be satisfied in full out of the estate before the plaintiff herein should receive anything whatever. This is true, because that which she should receive by its terms was to be vested by the will of Macky. Such means of conveyance necessarily limits the estate, and the final investment of title, to that which is left after `all demands against the estate,' as defined in the statute, have been satisfied. Moreover, if the rights of the plaintiff under the contract fall within `demands' of the fourth class, as prescribed by the statute, and are subject to its disabilities, such rights would likewise be subject to the benefits of the statute, and would therefore prorate with other claims of the same class if the estate were insufficient to pay the whole of the demands. (Section 7216, supra.) To include the rights arising by virtue of the contract in question within the purview of the words `demands against the estate,' would destroy all distinction between creditors of the estate, on the one hand, and those entitled as distributees thereof, after the payment of its debts, on the other. In construing a statute, courts, if possible, consistent with the reasonable meaning of the words employed in their association with the language of the whole act, ascribe to it a meaning that will avoid absurd results and far-reaching evil effects in its application. The difference between a `demand against the estate,' within the meaning of the statute, and the rights of the claimant under a contract like the one at bar, is radically and sharply defined. The former is a demand against the estate which must be paid or satisfied in advance of distribution; while the latter is a right or interest in the estate, an equitable ownership therein, after the claims against the estate have been allowed and paid."
In the case of In re Peterson, 76 Neb. 652, 107 N.W. 993, [5] 111 N.W. 361, 363, the court had before it a contract wherein the promisor had agreed to bequeath "a sum equal to one-half of the value of Bauer's estate." The court, in discussing the question whether an action at law was proper, said: "This means the net value and not the gross value. The claims of creditors, if any, and the expense and costs of administration, including funeral expenses, etc., must be deducted. ( Graham v. Graham's Exrs., 34 Pa. 475.) No proof was offered to show what the net value of the estate is. The estate is still unsettled. A jury is not competent to determine such a question in this action, and the proper tribunal to take an accounting of the debts and liabilities of the estates of deceased persons and to determine the net amount of an estate for distribution is the probate court. ( Grant v. Grant, 63 Conn. 530, 29 A. 15, 38 Am. St. Rep. 379.) The conclusions of the former opinion, that such an action as this, to appropriate one-half of the net value of the estate, should be in chancery, where all persons interested may be made parties, are sound, and are adhered to." The former opinion to which the court adhered is found in In re Peterson, 76 Neb. 652, 107 N.W. 993.
Our statute provides for the payment of demands against an [6] estate in a certain order. (Sec. 10307, Rev. Codes.) If the estate is insufficient to pay all debts of any one class, payments are prorated. (Sec. 10309, Id.) Legacies are not payable until all debts are paid and may be reduced ratably in order to pay debts. (Sec. 7053, Id.)
According to the allegations of the complaint, plaintiff is not a creditor of the estate, in the sense that her claim would have to be paid ahead of bequests in case a will were left by deceased. By the very terms of the contract she was to become the beneficiary of a bequest in the sum of $4,000. Whether she would actually get that amount of money would depend upon, first, the amount of debts owing by the deceased, and, second, whether, after the debts were paid, there was sufficient property in the estate to pay all legacies in full. These issues could not be settled in an action at law for damages.
Other cases holding that specific performance of a contract to will a certain sum of money may be had are the following: Bateman v. Franklin, 114 Kan. 183, 217 P. 318; Ohlendiek v. Schuler, (C.C.A.) 299 Fed. 182.
The case of Grant v. Grant, 63 Conn. 530, 29 A. 15, 38 Am. St. Rep. 379, laid down the same rule as the Oles Case, supra, and for the same reason. It held, however, that since the contract sued upon in that case was invalid because of the statute of frauds, it could not be enforced in equity as a contract to make the claimant a legatee. It is fair to assume that, had the court found the contract valid, it would have enforced it in equity. But the court, finding it invalid, permitted the action to be maintained as one at law requiring the presentation of a claim, but did so apparently on the theory that where the services had been performed at the request of the decedent with the understanding that they would be paid for at death, a contract would be implied whereby the decedent would be held to have agreed to pay the reasonable value of the services and making the claimant a creditor and not a legatee. Here, according to the complaint, the contract to make the plaintiff a legatee was definite, certain and valid.
We are mindful of the fact that some courts draw a distinction between cases where the services are ordinary and capable of being measured by a money value, and those of an extraordinary nature not capable of a money valuation. The case of Morrison v. Land, supra, was at least partially based upon the fact that the services there involved were not of an extraordinary or peculiar nature. Here there is an allegation that at least a part of the services were of a peculiar nature and such that their value could not be measured in money. However, we think that feature of the case is immaterial. We believe there was not an adequate remedy at law regardless of the character of the services rendered, since plaintiff had no means of proving the exact amount of money to which she was entitled. In an action for damages "the injured party has the burden of proving the amount of his harm; and damages are inadequate in proportion to his inability to bear that burden." (Restatement of the Law of Contracts, sec. 361, and comments.) Here plaintiff could not prove the extent of her damages in a law action. Equity has the right to grant relief in the nature of specific performance. Plaintiff is not a creditor of the estate with a claim which must be presented, but under the agreement alleged is entitled merely to be placed in the class of a legatee. The complaint states facts sufficient to constitute a cause of action.
The judgment is reversed and the cause remanded with directions to set aside the order sustaining, and to enter an order overruling the demurrer.
MR. CHIEF JUSTICE SANDS and ASSOCIATE JUSTICES STEWART, ANDERSON and MORRIS concur.