Ratony Estate
Ratony Estate
Opinion of the Court
Opinion by
This appeal involves the validity of a postnuptial Separation Agreement.
Decedent, Alexander Ratony, Jr., and appellant, Julia Ratony, were married on June 15, 1940. On June 20, the Ratonys purchased property in Coatesville, Pennsylvania, as tenants by the entireties. Sixteen months later, being then separated, they conveyed the property for a net sum of f620. On December 11, 1941, they executed a formal Separation Agreement. The Agreement was drawn by the decedent’s attorney, who also witnessed its signing. After the Agreement was entered into, the parties continued to live apart and appellant made no attempt to attack or set aside or ignore the clear language of this Agreement or the mutual promises they made therein, until after decedent’s death on August 26, 1968, twenty-seven years later.
The Separation Agreement provides as follows:
“Separation Agreement
“This agreement made this 11th day of December, 1941, by and between Alexander Ratony, Jr., and Julia, his wife, witnesseth:
“Whereas differences have arisen between the parties on account of which they are now separated and are now living separate and apart and intending to live separate and apart from each other during the remainder of their natural Uves,
“Whereas the home formerly occupied by the parties has been sold and the various debts in connection with the said real estate have been paid, and
“Whereas there has resulted a fund of six hundred and twenty dollars ($620.00), and
“Now, therefore in settlement, adjustment and compromise of all property, questions and rights, the parties hereto have mutually agreed that upon the division of the said six hundred and twenty dollars ($620.00) and upon the payment of three hundred and ten dollars ($310.00) thereof to Julia, the wife, that this shall be a full and complete settlement of all property rights between the parties. From this time forward, neither party shall have any property interests in any property owned by the other. [Could any language be clearer?]
“The said Julia hereby expressly agrees that the said division and the said payment shall be in lieu of all claims for support and she hereby expressly agrees that she will not assert any further claim for support against her said husband.
“This agreement does not prevent or in any way militate against the right of either party to ask for and obtain a divorce, nor does it admit or deny any such right.
“In witness whereof the parties do hereto set their hands and seals this 11th day of December 1941.
(s) Julia Ratony
(s) Alexander Ratony, Jr.
“(s) Walter A. Herley, Witness to both
“Received $310.00 in full. Dec. 14, 1941.
(s) Julia Ratony”
Appellant filed an election to take against decedent’s will and, pursuant to Section 11 of the Estates Act of 1947, P. L. 100, an election to take against certain of his inter vivos conveyances. Since the estate is insolvent, the only relevant election is her claim under Section 11. She therefore filed objections to the
It is appellant’s contention that the Separation Agreement, notwithstanding its crystal-clear language and its mutual promises and mutual releases of any property interests in any property then and “from this time forward” owned by the other, discloses a want or failure of consideration, and, consequently, does not bar her right to take against his will or his (so-called) inter vivos conveyances.
We find absolutely no merit in any of appellant’s contentions.
Preliminarily, we are of the opinion that the principles applicable to antenuptial agreements, even though the consideration and the circumstances may sometimes differ slightly, are equally applicable to postnuptial agreements. See Slagle’s Appeal, 294 Pa. 442, 144 Atl. 426.
It is a general principle of law which has existed for centuries that mutual promises are binding upon the parties thereto and furnish valid consideration. Section 103, Williston on Contracts (3d Ed. 1957); §75, Restatement of the Law, Contracts; 8 P.L.E., Contracts,
In Rosciolo Estate, 434 Pa., supra, the parties entered into a mutually-executed antenuptial agreement. This agreement was drawn by an attorney for the husband and, as in the present case, the wife did not have an attorney. The agreement pertinently provided: “[I]t is agreed that all the properties of any name or nature, real, personal or mixed, wherever they may be found, belonging to the party of the first part before marriage, shall be and remain forever, his personal estate. ...” There then followed a disclosure by the parties of their respective properties, but there was no provision with respect to an abandonment of the right of a wife to take against her husband’s will.
Upon her husband’s death, the wife elected to take against her husband’s will. She presented several contentions which she finally limited to one, namely, she “based her claim and her right to an election to take against his will on the fact that the Antenuptial Agree
We believe the following portion of the present Agreement, “in settlement and . . . compromise of all property, questions and rights, the parties hereto have mutally agreed that . . . this shall be a full and complete settlement of all property rights between the parties. From this time forward, neither party shall halve any property interests in any property owned by the other,” clearly and unequivocally provides that the wife gave up all rights to and all property rights and all property interests in any property of decedent then or from that time forward owned by the husband.
Because of the different and very intimate relationship of husband and wife (and of prospective spouses), one of two additional factors has been required to validate ante- and postnuptial agreements. An antenuptial or postnuptial agreement is presumed to be valid and binding upon the parties thereto and the party seeking to avoid or nullify or circumvent the agreement has, without any doubt, the burden of proving the invalidity of the agreement by clear and convincing evidence. That burden can be met by proving either one of the two following factors — (1) a reasonable provision for the claiming spouse was not made at the time of the agreement or (2) in the absence of such a provision, a full and fair disclosure of the other’s worth was not made. Moreover, the reasonableness must be determined as of the date of the agreement and not in the light of hind
“(1) An Antenuptial Agreement is presumptively valid and binding upon the parties thereto.
“(2) The person seeking to nullify
“(3) In evaluating the reasonableness of the provision for the survivor, such reasonableness must be determined as of the time of the Agreement and not by hindsight. Gelb Estate, 425 Pa., supra, page 123; Kaufmann Estate, 404 Pa., supra, page 137 [per Justice Jones]. Reasonableness will depend upon the totality of all the facts and circumstances at the time of the Agreement, including (a) the financial worth of the intended husband; (b) the financial status of the intended wife; . . .”
Even if we ignore and nullify the clear and unambiguous language of this Agreement with all its mutual promises, we cannot escape the conclusion that a gift (or proper division) by the husband to his separated (and for 27 years thoroughly satisfied) wife of one-half of everything he had in all the world was not only a reasonable provision but undoubtedly a fair one.
Mr. Justice Roberts in his dissenting Opinion states that this is only a “consensual support settlement.” This contention completely ignores, obliterates and nullifies all the express and mutual agreements and settlements “of all property questions and rights . . . from this time forward neither party shall have any property interests in any property owned by the other.” This is far, far more than an agreement of separation and support. Furthermore, Justice Roberts contends that the waiver of the wife’s right or claim for support against her husband “evinces a clear intent on the part of the parties to the agreement that the $620 to be divided between them was to serve in lieu of further support payments.” This is obviously completely devoid of merit — it gives the wife for her support only the tiny amount of $310, which would have resulted in the ridiculous amount of $13.28 a year, based on the length of time she lived after the Separation Agreement was executed. Justice Roberts further contends there was a want of consideration for the Agreement. He not only overlooks the aforesaid mutual promises and mutual property agreements and settlements, he also overlooks the facts that (1) both parties were extremely poor; and (2) the wife acquired, iix addition to the aforesaid sum of money and a division of their furnishings and other personal property, a right to a separate existence for her life (a) without any interference from her husband, and (b) without any marital duties, such as the duty to cook or keep house; and (3) she secured her absolute liberty; and (4) she secured the important right to receive and keep, without any claim thereto from her husband or any rights of her husband therein, any money she might (a) inherit, and (b) make from her work, or (c) win.
Mr. Justice Jones would reverse the Court below because he believes the wife received no consideration,
Moreover, what is the use of having antenuptial or postnuptial written agreements which contain mutual promises, mutual agreements and mutual releases of all property and property interests and property rights, if such agreements, promises and releases are treated by the Courts as worthless, meaningless nullities, and the rights of the husband and wife must (in the absence of a full and fair disclosure) be determined by and dependent upon which spouse survives?
Levine Estate, 383 Pa. 354, 118 A. 2d 741, is clearly distinguishable. There, although the parties exchanged mutual waivers of any interest in the estate of the other, this agreement was held to lack consideration because the husband by a prior written instrument had already warned all claims he might have had in his wife’s estate.
For these reasons, we find no merit in any of the contentions made by appellant or in any of the erroneous and novel interpretations enunciated in the dissenting Opinions, which realistically make a nullity of our prior decisions and of the clear and express mutual promises and agreements which the parties themselves made and kept for twenty-seven years.
Decree affirmed; appellant to pay costs.
Italics throughout ours, unless otherwise noted.
And similarly no provision for abandonment by a husband of his right to take against his wife’s will.
Italics in this qnote are in Htttegasa Bitate.
Counsel for the estate objected to appellant’s testimony on the basis of the Dead Man’s Rule, Act of 1887, P. L. 158, 28 P.S. §322. The objection was initially overruled, but sustained at a later hearing. However, counsel for the estate thereupon (unwisely) withdrew his objection.
Dissenting Opinion
Dissenting Opinion by
I am compelled to dissent for three reasons. In the first place, I am unable to accept the majority’s view that Julia and Alexander Ratony mutually intended the document signed on December 11, 1941, to be a waiver and a release of Mrs. Ratony’s statutory interest in her husband’s estate. Secondly, I think the agreement should be held void and unenforceable for reasons of public policy. Finally, the agreement is invalid for want of consideration.
The majority opinion ignores some of the most fundamental principles underlying our domestic relations law. Primarily, it ignores the distinction between marriage settlements (postnuptial and antenuptial agreements) concerning the disposition of the spouses’ respective interests in the estate of the other, and separation agreements concerning the rights of spouses to live apart and the right of a wife to support, maintenance, and the property presently owned jointly between them as tenants by the entireties. This distinction is crucial in many circumstances. For example, a separation agreement may be abrogated by a reconciliation, whereas a postnuptial property settlement will not be annulled merely by reconciliation, and it is the intention of the parties and the surrounding facts which determine what type of agreement has been created in each case. See Zlotziver v. Zlotziver, 355 Pa. 299, 49 A. 2d
I believe that the Ratony document was a separation agreement rather than a marriage settlement. In any case, no matter what it was, I do not think Mrs. Ra-tony intended to waive her statutory interest in Alexander Ratony’s estate. We have a tradition of closely scrutinizing nuptial agreements and the surrounding circumstances. E.g., Mary Ann Slagle’s Appeal, 294 Pa. 442, 144 Atl. 426 (1928). The Ratony agreement nowhere makes reference to after acquired property, nor does it by its express terms refer to a wife’s right of election to take against her husband’s will or her intestate rights. The agreement merely states that sum of three hundred and ten dollars is “. . . a full and complete settlement of all property rights between the parties” and that from then on “. . . neither party shall have any property interests in any property owned by the other.” Contrary to the majority’s rhetorical question, this language is far from clear. Compare the language of the agreement at issue in Hillegass Estate, 481 Pa. 144, 244 A. 2d 672 (1968).
There is no evidence in the record that Mrs. Ratony even knew of the existence of her intestate rights or her right to take against her husband’s will. It is well established that where a husband and wife separate be
Confronted with at best an ambiguous agreement, we should be guided by the traditional rules of construction in this area. Courts do not generally attempt to read a broad waiver of intestacy rights into unclear documents. In Estate of Dick, 102 Pa. Superior Ct. 589, 157 Atl. 349 (1931) it was stated: “Without the agreement, the law governed the relations of husband and wife, and within well understood limits, the possible disposition or devolution of the property of either. By their agreement, they prescribed for themselves certain changes in the law governing their marital status different from what the law prescribed. But there is no agreement that, on the death of either, the devolution of property prescribed by the intestate law shall not take place. So radical a change in the legal rights of the parties must be stated expressly, or at least appear by inevitable implication: Talbot v. Calvert, 24 Pa. 327; Rice v. Rice, 2 W.N.C. 672; Scott’s Estate (2), 147 Pa. 102, 23 A. 214; Kaiser’s Estate, 199 Pa. 269, 49 A. 79, 85 Am. St. Rep. 785; Mark’s Estate, 297 Pa. 290, 147 A. 54.” Id. at 592, 157 Atl. at 351. (Emphasis added.)
I cannot accept the conclusion that Julia Ratony here did what the Dick opinion requires to surrender her interest in her husband’s estate. There also is evi
Aside from the question of mutual intention, this agreement should be unforceable for reasons of public policy. While a couple remains married, a husband owes a duty of support to his wife, even where the separation is consensual. Commonwealth ex rel. Davidoff v. Davidoff, 178 Pa. Superior Ct. 549, 115 A. 2d 892 (1955); Scott v. Scott, 95 Pa. Superior Ct. 273 (1929). If the Ratonys had come into court at the time they signed the agreement, not only their present property but also Mr. Ratony’s future earning power would have been considered in fixing a support order for Mrs. Ra-tony. See Lindenfelser v. Lindenfelser, 396 Pa. 530, 153 A. 2d 901 (1959); Commonwealth ex rel. Simmler v. Simmler, 134 Pa. Superior Ct. 339, 4 A. 2d 215 (1939).
One of the most fundamental rules in this area of our domestic relations law is that deeds and postnuptial agreements for the actual and immediate separation of husband and wife are valid when based on a good consideration and are reasonable in their terms. See In re Singer’s Estate, 233 Pa. 55, 81 Atl. 898 (1911). The majority makes much of the fact that the chancellor found that $620 was all the Ratonys possessed at the time of the agreement. To view such a finding as dispositive of the reasonableness and validity of this agreement is to resist an examination of the attendant circumstances. No matter how minimal the joint property of the Ratonys owned at the time of separation, Mr. Ratony had future earning power. I cannot accept the proposition that $310 was a reasonable provision for Mrs. Ratony’s maintenance and sup
While this Commonwealth has not to date joined with those jurisdictions which will not enforce lump sum settlement and waivers of future support,
Finally, the agreement is unenforceable for want of consideration. Almost a century ago it was established that a court of equity would not enforce a postnuptial agreement if the wife has received no benefit under it, and a wife’s rights under the intestate laws would be preserved for her. Campbell and Others’ Appeal, 80 Pa. 298, 309 (1876) (report of the master, Chief Justice Thompson, adopted by the Court).
This principle was applied in a more modern context in Levine Estate, 383 Pa. 354, 118 A. 2d 741 (1955). There, husband and wife executed a postnuptial agreement that one-half of a certain checking account would belong to the wife in exchange for her release of all rights in his estate. After the husband died, she elected to take against the will on the theory that here had been
Our Court, in upholding her claim, noted the following: “. . . One-half of the bank account, was already hers; it could not therefore be regarded as consideration passing under the agreement. The fact that the account stood on the books of the bank in the name of Morris Levine alone, plus his direction to the executors to pay one-half of the fund to Mrs. Levine, would not constitute consideration for her promise to refrain from claiming any part of his estate. Acknowledgement of what clearly belongs to another by law and equity cannot be advanced as consideration. ... It is true that the agreement of 1949 was also under seal, but as to that agreement there was a failure of consideration for, as indicated, Mr. Levine specified what it was he intended to confer upon his wife in exchange for her abandoning all claims to any part of his estate. But he could not give her what he promised, for the cogent reason that it was not his to give. It was impossible for him to pass to his wife what was already hers.” Id. at 358-59, 118 A. 2d at 743. (Emphasis added.)
In the instant case, Julia and Alexander Ratony owned and sold the property in Coatesville as tenants by the entireties. Appellant was entitled to one-half of the proceeds as a matter of law. Hence, I fail to comprehend how her “agreeing” to waive her rights in his estate for one-half of those proceeds can be viewed as being supported by any meaningful consideration.
The majority urges that the “mutual” promises of Mr. and Mrs. Ratony to waive any interest they each might have in the other’s estate serves as sufficient consideration for this agreement. I have already indicated that I do not accept the proposition that the Ratonys mutually exchanged such promises. Nor do I believe
The majority’s proposition that Mrs. Eatony’s acquisition of such things as “her absolute liberty” (she was still married), and “a right to a separate existence for her life without any interference from her husband, and (b) without any marital duties, such as the duty to cook or keep house” serves as sufficient legal consideration for this ambiguous agreement is certainly novel and without decisional precedent. I, for one, am unable to accept it.
I dissent.
In Hillegass Estate, the relevant portion of the agreement read as foUows: '“Whereas it is the intention of the intended wife to waive, relinquish and bar all her inchoate intestate and other rights or interests, either as wife or widow of the First Party, in and to any property now owned or hereafter acquired by the First Party, including her right of election to take against the Will of the First Party.’” Id. at 147, 244 A. 2d at 674 (emphasis omitted).
See, e.g., Estate of Duncan, 87 Colo. 149, 285 P. 757 (1930); Trecker’s Estate, 107 Ill. App. 2d 94, 246 N.E. 2d 56 (1969); Kovler v. Vagenheim, 333 Mass. 252, 130 N.E. 2d 557 (1955); Leeds v. Leeds, 308 N.Y. 991, 127 N.E. 2d 845 (1955); see generally, Lindey. Separation Agreements and Ante-Nuptial Contracts, 15-75 (1967).
Concurring Opinion
Concurring Opinion by
I concur in the conclusion reached in the Opinion of the Court and disagree with the dissenters for two reasons. First, I believe that the separation agreement in this case encompassed all property rights between the two spouses and not just the matter of support.
There is no argument that the proceeds of the sale of the house were not also owned by the entireties. See, e.g., 41 C.J.S. Husband and Wife §§481, 485. Our Court has not allowed partition of an entireties estate except when “one spouse has been appropriating the property to his or her own use so that there has been a wrongful exclusion,” Linett v. Linett, 437 Pa. 138, 142, 262 A. 2d 849 (1970); see also Lindenfelser v. Lindenfelser, 396 Pa. 530, 153 A. 2d 901 (1959); when one of the spouses is incompetent, Interboro Bank & Trust Co. Appeal, 359 Pa. 315, 59 A. 2d 101 (1948); or when the court finds an explicit or implied agreement between the spouses to partition, Berhalter v. Berhalter, 315 Pa. 225, 173 Atl. 172 (1934). There is no indication that any of these conditions was present prior to the postnuptial agreement in this case.
Dissenting Opinion
Dissenting Opinion by
I reluctantly must dissent from the view expressed by the majority opinion.
It appears to me that the majority, by reiterating the “reasonable provision or full and fair disclosure” test, has lost sight of the necessity for consideration for this so-called postnuptial agreement. In cases turn
While realizing that many prior decisions of this Court indicated that the crucial examination date for the “reasonable provision” test is the date of execution, I, initially, articulated the statement that, “such reasonableness must be determined as of the date of the agreement and not by hindsight”. Kaufmann Estate, 404 Pa. 131, 137, 171 A. 2d 48, 51 (1961). I have never intimated any displeasure with this principle and, contrary to the majority’s assertion, I do not now advocate the adoption of any hindsight test.
Perhaps the crux of my dispute with the majority’s “reasonable provision” examination merely represents a different perspective. Nonetheless, it is no coincidence that the majority states at two places in its opinion, in slightly different words, “the husband gave his wife one-half of everything Tie had in the world.” (Emphasis added.) To my way of thinking, a more correct statement of this thought would substitute the pronoun “they”: “the husband gave his wife one-half of everything they had in the world.” Indeed, as I shall demonstrate shortly, I would state that, “the husband gave his wife everything she had in the world.”
Reviewing the agreement, Julia Ratony received: (1) one-half the proceeds of the sale of the former residence — a fund she was entitled to as a matter of law; (2) her personal effects — property which she
Returning to the “full and fair disclosure” test, it is my position that even if there had been a full and fair disclosure (a dubious assumption in my opinion), there is no consideration to support this agreement. Besides the precedents in this Commonwealth cited by Justice Roberts in his dissenting opinion, the overwhelming weight of authority recognizes that a post-nuptial or separation agreement, like any other contract, must be supported by valid consideration. 41 Am. Jur. Husband and Wife, §262 (1968); 26A C.J.S. Descent and Distribution, §58b (1956). Although the majority notes that the legal principles governing ante-nuptial and postnuptial agreements may sometimes differ due to the consideration supporting the agreement, the general equation of these two types of contracts overlooks the rule that, “[t]he marriage, since it is
Insofar as I have already demonstrated that Julia received no tangible benefits, the only arguable consideration supplied by Alexander Ratony was his corresponding release of his intestate share in Julia’s estate; so framed, the sole question is whether the mutual release by each spouse of his or her interest in the estate of the other constitutes the valid consideration necessary to support a postnuptial separation agreement. My research discloses a conflict of authority on this point. Compare, Unger v. Mellinger, 37 Ind. App. 639, 77 N.E. 814 (1906), with Edwards v. Edwards, 267 Ill. 111, 107 N.E. 847 (1915). See, also, Smith’s Adm’r v. Price, 252 Ky. 806, 68 S.W. 2d 422 (1934); Hall v. Greenwell, 231 Mo. App. 1093, 85 S.W. 2d 150 (1935). Employing the familiar principle that a spouse’s release of his or her intestate share supplies the consideration for a transaction with the other spouse, the Illinois Supreme Court in Edwards held that the widow who released her dower interest in exchange for her spouse’s relinquishment of his interest in her property was barred from sharing in his estate. Relying on the principle that the intestate share is not a present interest when the contract is entered, the Appellate Court of Indiana came to a contrary conclusion in Unger as it held a widower received no consideration from his wife for his release and hence could claim his intestate share. Analyzing these two rationales, I am persuaded by the Indiana Court. In the situation where the surviving spouse is the one who relinquished his or her intestate share in exchange for certain property, I would rely on the rule that such release is a valid consideration. However, where the
For these reasons I dissent.
Since Alexander Ratony was alive when the furniture was divided, there is no occasion to invoke the common law presumption that the husband owned the furniture contained in the marital home at the time of his death: King Estate, 387 Pa. 119, 126 A. 2d 463 (1956); Matheny Estate, 164 Pa. Superior Ct. 18, 63 A. 2d 477 (1949). Despite this Court’s approval in King Estate, I question the continuing validity of this presumption. See, Fine v. Fine, 367 Pa. 227, 77 A. 2d 436 (1951).
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