Ratony Estate

277 A.2d 791, 443 Pa. 454, 1971 Pa. LEXIS 939

• Court: Supreme Court of Pennsylvania
• Decided: June 1, 1971
• Docket: Appeal, 28
• Status: Published

Opinions

Opinion by

Mr. Chief Justice Bell,

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.

In the Separation Agreement, which contained mutual promises and mutual releases, they (1) divided all the net proceeds of the sale of their home which they owned as tenants by the entireties, namely $620; and (2) agreed to divide all the furniture and personal articles which they owned, as well as certain leased articles; and, most important of all, (3) mutually agreed that “... this shall be a full and complete settlement of all property rights between the parties [and] from this time forward, neither party shall have any property interests in any property owned by the other.” The parties in this case were (when they made this Agreement) extremely poor. The husband gave his wife one-half of everything he had in the world. In the twenty-seven years in which they lived separate and apart, appellant never made any attempt to go back and live with the husband, or to get any support from him, or to claim any of his subsequently acquired property, or made any attempt to set aside or attack the Separation Agreement.

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,

* and

“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

“Whereas the parties have mutually agreed upon a division of the furniture, and upon the retention of all personal articles belonging to each other and have agreed to either return or take over certain leased articles.

“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 first and final account of decedent’s executrix, based on her failure to include certain assets which were transferred by decedent during his lifetime. The lower Court found the Separation Agreement to be valid and that, as of the date thereof, e‘the decedent and his wife possessed no assets other than the proceeds from the sale of their former home together with certain items of furniture and personal items referred to in the agreement of that date.” This very important finding of fact, which the minority completely ignore, was certainly and unquestionably supported by the evidence and, together with the above-quoted Agreement and the mutual promises and releases therein contained, is decisive of this case! Accordingly, the Court confirmed the account and dismissed appellant’s objections. This appeal followed.

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, §45; Jessup & Moore Paper Co. v. Bryant Paper Co., 283 Pa. 434, 129 Atl. 559; Gredler Estate, 361 Pa. 384, 65 A. 2d 404; Rosciolo Estate, 434 Pa. 461, 258 A. 2d 623; Kaplan v. Kaplan, 25 Ill. 2d 181. 8 P.L.E., Contracts, §45, states: “Mutual promises afford sufficient legal consideration for the support of each other, and the mutual promises of the parties are sufficient to create a binding contract.” In Jessup & Moore Paper Co. v. Bryant Paper Co., 283 Pa., supra, this Court said (page 441) : “ ‘Where there is no other consideration for a contract, mutual promises must be binding on both parties.’ ” In Gredler Estate, 361 Pa., supra, we pertinently said (page 387) : “These mutual promises, made by the parties in the presence of a witness, (cf. Moffitt v. Moffitt, 340 Pa. 107, 16 A. 2d 418) constituted an enforceable contract.”

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 Agreement [which contained less specific language and less clear property releases than does the Agreement in the present case] did not contain an express waiver of this right [to take against his will].” In spite of the fact that Mrs. Rosciolo (an Italian) spoke and understood very little of the English language, a unanimous Supreme Court stated (pages 466-467): “In our judgment, this Antenuptial Agreement precludes any right of either party to take against the will of the other, even though there is no express waiver”

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 hindsight — such a “hindsight” test would make a mockery of the rule and the realities of life. Hillegass Estate, 431 Pa. 144, 244 A. 2d 672; Gelb Estate, 425 Pa. 117, 228 A. 2d 367. In Hillegass Estate, we said (page 150) :

“(1) An Antenuptial Agreement is presumptively valid and binding upon the parties thereto.

“(2) The person seeking to nullify* or avoid or circumvent the Agreement has the burden of proving the invalidity of the Agreement by clear and convincing evidence that the deceased spouse at the time of the Agreement made neither (a) a reasonable provision for the intended spouse, nor (b) a full and fair disclosure of his (or her) worth. Gelb Estate, 425 Pa., supra, page 123; Kaufmann Estate, 404 Pa., supra, page 136 [per Justice Jones]; McClellan Estate, 365 Pa., supra, page 407; Emery Estate, 362 Pa., supra, pages 142, 146; Snyder Estate, 375 Pa. 185, 188, 100 A. 2d 67.

“(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.

Appellant, at least impliedly, recognized this when she attempted to prove that her husband had additional and undisclosed assets. Appellant was the only witness to offer any evidence of the additional property which she now contends was owned by decedent at the time the Separation Agreement was executed.* When ashed whether she or decedent owned any property aside from that mentioned in the Agreement, she answered in the negative. At a later hearing she recanted to the extent that she then testified that she thought the word “property” referred only to real estate and she thought that, at the time of the Agreement decedent had a bank account and stocks and bonds. Specifically, she stated that the decedent’s bank accounts were in The National Bank of Chester Valley and that the bonds were U. S. War Bonds paid for by payroll deduction at his place of employment. However, by stipulation of the parties, it was later revealed that prior to and at the time of the Separation Agreement he had no account in The National Bank of Chester Valley and no payroll deduction was in force at the decedent’s job. With regard to the stocks allegedly owned by decedent, appellant was unable to recall the names of the stocks or the companies or the name of his broker. In short, the only evidence that decedent had any additional assets at the time of the Agreement was appellant’s conflicting statements and unproved beliefs. The lower Court was fully justified in finding as a matter of fact that “... as of December 11,1941, the decedent and his wife possessed no assets other than the proceeds from the sale of their former home together with certain items of furniture and personal items referred to in the agreement of that date.”

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, or no reasonable provision. Justice Jones then advocates a new test for the determination of consideration in a postnuptial agreement. He first overlooks tbe fact that the parties mutually agreed that from this time forward each would have no rights or interest in any property of the other. These mutual promises furnish legal consideration for this agreement (see our many cases, supra) and no sound or justifiable reasons exist to induce us to invalidate or change our prior decisions and render these mutual promises meaningless. In addition to our prior decisions, we are further supported by the recent case of Kaplan v. Kaplan, 25 Ill. 2d 181, 182 N.E. 2d 706 (1962). In Kaplan, that Court, in discussing whether such mutual releases were a valid consideration for a property settlement between a husband and tvife, pertinently said (page 708) : “. . . without considering other elements of consideration flowing to the plaintiff which could be mentioned such mutual covenants were in themselves sufficient to support the agreement. Kroell v. Kroell, 219 Ill. 105, 112, 76 N.E. 63; Seuss v. Schukat, 358 Ill. 27, 34, 192 N.E. 668, 95 A.L.R. 1461.” See also, Rockwell v. Est. of Rockwell, 24 Mich. App. 593, 180 N.W. 2d 498; 24 Am. Jur. 2d, Divorce and Separation, §887. No matter how named, Justice Jones seems to hold that whether mutual promises and mutual releases are a valid consideration depends upon whether the surviving spouse or the deceased spouse “is the one who relinquished his or her intestate share in exchange for certain property.” Whether or not this is called a “hindsight” test — as we believe it is — its nomenclature is immaterial. What is important is the inescapable fact that such a waiting period or test flies directly in the teeth of the test which our prior cases have established and which, we repeat, Justice Jones himself has aided in establishing. In Kaufmann Estate, 404 Pa. 131, 137, 171 A. 2d 48, 51 (1961), the Court said: “(3) in evaluating the reasonableness of the provision for the wife, such reasonableness must be determined as of the date of the agreement and not by hindsight.”

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.

Mr. Justice Eagen and Mr. Justice Pomeroy concur in the result.

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.