Phalen v. United States Trust Co.

We think the complaint sets forth a good cause of action in equity. To hold otherwise we would have to overturn principles of law and equity that have been recognized and established for centuries.

Ante-nuptial contracts, whereby the parents of the parties about to marry have agreed to settle property upon one or both of the spouses, either upon the performance of the marriage ceremony or by testamentary devise or bequest, are of such frequent occurrence, especially in England, that they form a distinct class in the body of our law. For the purposes of this discussion we may assume that this action could not be maintained at law, although there is very respectable authority to the contrary in England, where actions at law have been maintained even upon informal agreements of this nature. (Shadwell v. Shadwell, 30 L. J. [C. P.] 145 ; 9 C. B. [N. S.]159; Douglas v. Vincent, 2 Vernon, 201.) One of the very purposes of equity is to aid where the law fails. In the determination of this appeal it should be borne in mind that a court of equity will take into consideration the facts and circumstances appearing when the case is tried. If it should then appear that the plaintiff’s habits are such as to endanger the safety of the fund which he claims, and that its transmission to him might deprive his wife and children of proper means of support; or if for any other good reason a court of equity might deem it unfair, inequitable or unjust that specific performance of the contract in suit should be decreed, a wise

It is suggested that if we should give effect to the ante-nuptial contract formally drawn up and signed by the plaintiff and all other parties in interest, we would be treating it as a testamentary instrument which the plaintiff is, in some unexplained way, precluded from enforcing because he interposed no objections to the probate of his father’s will. We think there is no force in this contention. Such agreements have been upheld for hundreds of years, although their ultimate-effect is usually to change the current of attempted testamentary disposition of estates. The direct, and, indeed, the only, purpose of this agreement, plainly expressed, was to secure to the plaintiff an equal share with his sisters in the distribution of his father’s- estate. That was the end in view, and equity, if no good reason intervenes, will give effect to the expressed intention. The principle upon which such agreements are sustained was stated by Lord Camden as early as the year 1769, in Durfour v. Ferraro (Hargrave’s Jurid. Arg. 304), and it was not then new. That was a case of mutual wills, in which the learned jurist said (p. 309): “ Though a will is always revocable, and the last must always be the testator’s will, yet a man may so bind his assets by agreement that his will shall be a trustee for performance of

We deem it unnecessary to discuss the intermediate cases which have fully and firmly established the principle that a man’s representatives shall be trustees of a resulting trust for the benefit of those to whom he has bound his estate by such a contract as is here involved, for we consider the comparatively modern case of Johnston v. Spicer ( 107 N. Y. 185 ) decisive of this whole controversy. In that case the husband by an ante-nuptial contract had provided that in case of his death without issue all his property should belong to the lady whom he was about to marry. The parties intermarried and the husband predeceased the wife intestate and without issue. This court held that by virtue of the contract the husband’s estate went to the heirs of the wife, and speaking through Huger, Oh. J., said : “ It has been the constant practice of the courts of this country, as well as of England, to enforce ante-nuptial agreements according to their terms, whether they relate to existing or after-acquired property, and to decree a specific or substituted performance of them according to the nature of the case (citing authorities). * * * The suggestion that such contracts may be invalid,

Neither do we subscribe to the proposition that this complaint does not state a good cause of action, because the contract which it sets forth may be one which would not support an action at law. There are many contracts upon which an action at law cannot be maintained that are enforceable in equity. “ There .are agreements which the common law, hy virtue of its own doctrines, irrespective of statutory regulation, treats as invalid, as not contracts, and for which it furnishes no remedy ; but which equity, in the application of its conscientious principles, considers as binding, and enforces by awarding its relief of a specific performance.” (Pomeroy on Specific Performance, § 31.) In Sprague v. Cochran ( 144 N. Y. 104 ) this principle was applied to take a case out of the operation of the Statute of Frauds, and to the same effect is Smith v. Smith ( 125 N. Y. 224 ). IVIany more cases might be cited to illustrate the rule that equity decrees performance of just contracts which are not enforceable at law, but this axiomatic fact needs no. further demonstration.

We now pass to that phase of the discussion in which it is argued that there was no consideration as between father and son which enables the latter to maintain an action to enforce

It may be conceded that when the elder Phalen made his will he complied with the terms of the contract, in so far as it related to a testamentary provision for the wife and children of the plaintiff, but he did not perform his agreement to give to the plaintiff the same share as his two sisters, and the facts thus far disclosed suggest no reason why a court of equity should not compel complete performance at the suit of the son. He was a party to the agreement and performed on his part by the marriage with his wife. He had a legal interest in the complete execution of the contract and, under principles now well settled, he can compel performance unless some good reason is made to appear why he should not be permitted to do so.

The question as to what persons are within the consideration of the agreement in this class of cases has frequently arisen, but it has never been doubted that the parties whose marriage forms the occasion of the agreement are within the consideration and entitled to enforce the contract. Even the issue of such marriage may enforce such an agreement, although they may not be born at the time it is made. (Gale v. Gale, L. R. [6 Ch. D.] 144, 148.) “ The promise of a third party may be for the wife’s benefit, or it may be for the mutual benefit of the married parties, and enforceable accord-' ingly.” (Schouler’s Domestic Relations, § 178.) Actions at law have even been sustained upon mere letters to the party about to marry and at his suit, although the only consideration was the marriage. In Shadwell v. Shadwell (30 L. J. [C. P. 1860] 145; 9 C. B. [N. S.] 159) the defendant’s testator wrote to his nephew, the plaintiff, as follows : “ My dear Lancey.— 1 am glad to hear of your intended marriage with Ellen INicholl, and, as I promised to assist you at starting, I am happy to tell you that I will pay to you one hundred and fifty pounds yearly during my life, and until your annual income derived from your profession of a Chancery barrister shall amount to six hundred guineas, of which your own admission will be the only evidence that I shall receive or require.” In an action by the .nephew to recover, after his marriage with the lady named, the arrears of the annuity promised he was permitted to recover at law. In the case of Coverdale v. Eastwood (L. R. [15 Eq.] 121), after proposals of marriage had been accepted, the lady’s father wrote to the intended husband as follows: “ Y. being my only child, of course she will come into possession of what belongs to me at my decease.” In other letters he made statements evidencing the same intention. The father, being then a widower, subsequently remarried. Upon his death he left a will bequeathing part of his estate to his widow and creating certain annuities. Upon a bill filed by the daughter for the enforcement

The foregoing principles and authorities seem to completely dispose of this case, and the discussion might well close at this point, but there are a few authorities which need only to be cited to show that covenants in marriage settlements, such as the one here in question, binding the parent to leave to a child all or an aliquot part of his property at death, are most usual in such settlements, and have always been sustained. Laver v. Fielder (32 Beav. 1) presented the same general features as those in the case at bar, except that the agreement was informal and the plaintiff was not a party thereto. It was contained in a letter by the father to the prospective son-in law in which he promised that “ at my decease she (the daughter) shall be entitled to her share of whatever property I may die seized.” The father, in making his will, failed to comply with this agreement, and after a suit by the widow and a son to settle the estate, the daughter was permitted to maintain an action for the enforcement of the agreement and judgment was decreed in her favor. In Jones v. Martin (3 Anstr. 822 ; more fully reported in 5 Ves. 266, note) the father covenanted on his daughter’s marriage to leave her at his death an equal share of personalty with his son. The father in his lifetime transferred certain property to his son which was more than the latter’s proportion as fixed by the marriage settlement. In an action brought after the parent’s death by the daughter and her husband for an accounting and an enforcement of the agreement, judgment was rendered for the relief asked. It was held in the House of Lords that “ The contract was stated by counsel for the respondent to be vague, and idle, unmeaning and insecure. It is not, however, an unusual covenant in settlements; many marriages are entered into on such covenants ; and they are not inexpedient. They are entitled to

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Since the demurrer was not taken on the ground, that, the plaintiff’s wife was a necessary party, that' question is not now before us. It may be that if the case should come to trial, she ought to be brought in as a party so that the rights of all persons in interest may be properly presented and disposed of. Specific performance ought not to be decreed unless all proper parties are before the court. (Miller v. Bear, 3 Paige Ch. 466 .)

The order of the Appellate Division sustaining the demurrer should be reversed, and the interlocutory judgment of the Special Term overruling the demurrer affirmed, with costs in all courts, with leave to defendant to withdraw demurrer and serve answer within twenty days upon payment of costs.

(dissenting). This is an action for specific performance of an alleged contract claimed to have been- made • between the plaintiff and his father. The father was a citizen of New York, but for many years prior to his. death he resided with his family in Paris. He died in that city on the 20th of Jamiary, 1887, leaving a will executed there, to which was attached seven codicils, the last or seventh of the codicils having been executed on the 17tli of January, 1887, a few days prior to his death. By this will and the codicils attached the testa-tor disposed of a large estate, both real and personal,

The estate was distributed by the executors in conformity with the provisions of- this testamentary instrument. An intermediate accounting was had and a final judicial accounting and settlement subsequently, in which full distribution was made according to the terms of the will, and the executors were discharged from their trust. The controversy in this case does not arise from any defect in the will, but from the transactions which took place many years prior to its execution and to the death of the testator. On the 11th of August, 1873, the plaintiff became engaged to be married to a lady who resided and was domiciled at Baden-Baden. The mar-' riage was preceded by the execution of an ante-nuptial contract or settlement made by the plaintiff and his father and mother of the first part, and the intended wife, with her father and mother, of the second part. By this instrument the testator made some gifts of property to the plaintiff, including a house in Paris, but the main provisions of the instrument were obviously intended for the benefit of the wife. The only provision of the instrument that is of any importance in the present controversy is the following:

“ And the said James Phalen and Catherine S., his wife, do

The theory of this action is that inasmuch as the .testator left the plaintiff’s equal share, not absolutely to him, but in trust as before stated, that the provision of the marriage settlement was violated, and hence conferred upon the plaintiff a right of action for specific performance. The complaint sets out the will and codicil and the other writing referred to, and demands judgment for the following relief: (1) That the trust under the seventh codicil in the fund held for the plaintiff be declared to be created in violation of plaintiff’s rights under his contract, and the plaintiff is entitled to the principal of his said fund held by the United States Trust Company. (2) That the trust under the seventh codicil be abrogated, and that the remainders in said fund given by the seventh codicil to the heirs of the plaintiff be extinguished, and .that the plaintiff’s two sisters, Florence and Catherine, and all other persons who may ever be his heirs at law be barred therefrom, and that it be declared that the United States Trust Company holds that fund under the will as modified by the first six codicils, and (3) that the trust company be directed to turn over all of said fund with the increment thereto and the accumulation thereof to the plaintiff. There are some other statements and exceptions in the prayer, but they have no bearing upon the case. The trust company was the only defendant that appeared in the action and it demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action. The trial court overruled the demurrer, but that judgment was reversed by the Appellate Division and the plaintiff has appealed to this court.

The leading case cited and relied upon by the learned counsel for the plaintiff is' that of Parsell v. Stryker ( 41 N. Y. 480 ). In that case a person let a farm to his grandson for the life of the former. The tenant was bound to occupy the place and do all the work and was to have two-thirds of the produce and the farm was to belong to the grandson on the death of the grandfather. It was subsequently agreed that the grandfather should make a will devising the farm to the grandson. It was held that an action for specific performance would lie for the performance of this agreement. Here, the grandson went into possession and occupancy of the farm under a promise that it should belong to him at the death of the grandfather. The court decreed' specific performance and the conveyance to the grandson by the defendants in the action, to whom it had been subsequently conveyed by the grandfather in violation of the agreement. That case has little, if any, bearing upon the case at bar. The fact that the grandson, on the faith of the promise, went into possession and occupancy of the farm and worked it, yielding a portion of the products to the lessor, was sufficient to confer upon a court of equity jurisdiction to decree specific performance. The promise to leave the farm to the grandson by will was of no consequence. A verbal agreement to give it upon the death of the owner would be sufficient when accompanied by possession. In fact, that is just what was decided in the case of Freeman v. Freeman ( 43 N. Y. 34 ). In a court of equity the grandson’s case was just as strong without any promise to make a will as it was with a promise.

Edison, v. Parsons ( 155 N. Y. 555 ), cited in behalf of the plaintiff, was a controversy arising out of an alleged agreement between sisters to make mutual wills. On the trial the complaint was dismissed and the judgment was affirmed in this court. The case decides nothing that bears upon the nature or legal effect of the promise, which is the foundation of this action.

In Winne v. Winne ( 166 N. Y. 263 ) there was an agreement between the mother of a boy and the deceased. The deceased was to have, and the mother of the plaintiff was to surrender to her the custody and control of the plaintiff. The deceased was to maintain him as her own child, and at her death give him all her property and make him her sole heir, and his mother was to have nothing more to do with him. This agreement was completely carried out and executed, but the deceased died intestate, and the boy, or his representatives, claimed the property owned by the deceased at her death. The latter left no father, mother, child nor descendant, and no child was born to her after such contract was made. The court decreed specific performance so far as to declare that the property belonged to the plaintiff. This court, however, was careful to add at the end of the opinion this paragraph : “ While we are of the opinion that specific performance of this contract was properly awarded, this decision is based solely upon the findings of the trial court and the particular facts and circumstances of this case. Yet, it must not be regarded as an authority for maintaining such an action under different circumstances or upon other proof, as the granting or denial of such relief always rests in the sound discretion of the court, and should be denied unless the agreement is fair and just, and its enforcement equitable.” It is

Shakespeare v. Markham ( 10 Hun, 311 ) assumed the form of an accounting before the surrogate to recover from the estate of a deceased person a large sum of money claimed to be due the contestant for services rendered and for taking care and for supporting the testator in his old age under an expectation of receiving a legacy from him. The testator died without having made any testamentary provision in favor of the contestant. In the Surrogate’s Court the claim was allowed, but the determination was subsequently reversed upon appeal and the reversal was affirmed in this court. ( 72 N. Y. 400 .) Just why that case is supposed to be an authority in favor of the plaintiff in the case at bar it is quite difficult to see.

Colby v. Colby ( 81 Hun, 221 ) was a case where there was a mutual promise of marriage between the parties, and the learned trial judge held that it was an authority in support of this action. It is stated in the case that the deceased made a proposition of marriage, which she accepted, and that thereupon an agreement in writing was made and subscribed by the parties, by the terms of which it was mutually agreed that the two should be presently married, and that the plaintiff should live with the defendant at his residence and be a faithful and loving wife to him as long as he should live, and if the plaintiff should survive him she should have the said premises as her qwn in fee simple absolute; and that in pursuance of the terms of said contract and in part performance of said agreement the said Colby executed and published his will in due form of law by which he devised to the plaintiff, her heirs and assigns forever, the whole of said premises, and he agreed that he would not revoke or alter the will. The marriage took place according to this agreement and the parties lived together

On the other hand there are three or four quite recent cases in this court that seem to me to be squarely against the plaintiff’s contention. In Gall v. Gall ( 64 Hun, 600 ) a deceased person had promised that if the plaintiff, then residing in California, would go to live with him in Hew York he would make a will in his favor. The deceased did make the will, but afterwards he married again and had issue. The action in that case, as in this, was for specific performance, and it was held that it could not be maintained, and that judgment was affirmed in this court. ( 138 N. Y. 675 .)

Mahaney v. Carr ( 175 N. Y. 454 ) was a case that in its main features cannot be distinguished from the one at bar. It was an action by a grandchild against the representatives of her grandfather to compel the specific performance of an agreement that if the girl would make her grandfather’s home her home and assume the duties of a daughter the deceased would give to her a child’s share of his property upon his death, to wit, a one-fourth interest. The courts below sustained the action, but it was reversed in this court upon an opinion which seems to me to answer the argument of the learned counsel for the plaintiff in this case.

Ide v. Brown ( 178 N. Y. 26 ) is to the same effect. In that case the plaintiff, a young girl, whose father and mother had died, brought an action to enforce specific performance of an agreement on the part of the deceased to make a will in her favor vesting her with the title to a large amount of real and personal property. It was held that the action could not be maintained. Thus, it will be seen that instead of judicial authority to support this action the decisions of the courts are against it. It can, I think, be safely asserted that there is no

But perhaps the most conclusive argument and authority against the plaintiff’s contention is to be found in the history of this very case. It seems that after the probate of the will and codicil the plaintiff filed a petition with the surrogate of Hew York to revoke the last codicil on the ground of fraud and undue influence.

The question of the validity of this codicil was tried at great length before the surrogate, and he held that the codicil was valid and dismissed the petition. On appeal to the Supreme Court the question was again fully argued and heard and that court unanimously affirmed the decree of the surrogate. An appeal was taken to this court and the decision of the courts below was unanimously affirmed on the opinion below. (Matter of Phalen, 47 N. Y. S. R. 44; affd., 140 N. Y. 659 .) The court found, as will be seen from the opinion, that the plaintiff had separated from his wife and was incompetent to manage property by reason of bad habits. All this took place nearly fifteen years ago, and several years after the father’s death. How, if it be true, as asserted upon this appeal, that the father had bound himself by a valid contract between himself and the plaintiff not to make the codicil in question, and it was made in violation of the rights of the son, it was, as between the son and the estate, simply invalid and void and should have been canceled and revoked. The legal effect of the decision is that the testator had the right and the power to make the codicil which constitutes the sole complaint of the plaintiff, and the testamentary power and capacity of the father was in no wise restricted in law by anything contained in the so-called contract upon which the present action was based. It cannot be supposed that this court and the court below would declare valid a testamentary instrument made in violation of a binding contract. The question then before the court is the same question now presented, namely, the right of the father to alter his will and make such.

Passing from the question of the nature and validity of the promise in question, there are two other points that should be stated. If the promise set out in the complaint is a contract or binding obligation, it certainly must be supported by a sufficient consideration. It was a promise, in substance, that if the deceased made a will at all, it should be in a particular form, based upon the principle of equality between his children. How, what consideration was there for. the promise moving from the son to the father ? It is said that marriage is a good consideration ; and so it is between the parties, but it does not follow that it is a consideration for the promise of third parties. What did the son give the father that would constitute a consideration for the promise? Hotliing whatever. It is true that he afterwards married, but his father never requested him to marry and he never promised his father that he would. That was the plaintiff’s own voluntary act. Did the plaintiff suffer any detriment in consequence of his father’s promise ? Certainly not, unless we are prepared to hold that it is a detriment to a young man to marry, sufficient in the eye of the law to form a consideration for a promise on the part of another. I assume that that proposition will meet with no favor from any direction. The deceased secured no benefit, pecuniary or otherwise, from the promise on his part, and the question returns again, what was the consideration

This is an action in equity. The character of the action is stamped by the relief demanded, and that has already been stated. Unless the complaint states facts sufficient to invoke the jurisdiction of equity, then it does not contain a good cause of action. The rule in such cases is this, “ in case a plaintiff has the right to maintain an action at law, or a suit in equity, and he elects to bring a suit in equity, demanding only equitable relief, but fails to state sufficient facts in his complaint to constitute an equitable cause of action, and the defendant demurs on the ground that the complaint does not state facts sufficient to constitute a cause of action, the demurrer will be sustained, though the facts alleged are sufficient to constitute a legal cause of action; and so, in case he elects to bring an action at law, demanding only legal relief,

This must be the true rule in such cases, since by section 1207 of the Code, where the defendant does not answer, the plaintiff can have no judgment except that demanded in the complaint. The facts stated in the complaint in this case relate exclusively to the breach of an alleged contract between the plaintiff and his father. If, therefore, the plaintiff has any cause of action whatever, it is an action at law to recover damages for the breach. There are no facts stated that bring the case within the jurisdiction of any recognized department of equity. So that, in whatever aspect the case is considered, it must be held that the demurrer was well taken, and that the judgment should be affirmed, with costs.

Cullen, Ch. J., Willard Bartlett and Hiscook, JJ., concur with Werner, J.; O'Brien, J., reads dissenting opinion, and Haight and Vann, JJ., concur in result thereof.

Ordered accordingly.