Estate of Murphy

• Decision Date: 10 November 1983
• Docket Number: No. 13102,13102
• Citation: 661 S.W.2d 657
• Parties: In the ESTATE OF Lyle MURPHY, Deceased. Louise MURPHY, Petitioner-Appellant, v. Max MURPHY, Individually and as Executor of the Estate of Lyle Murphy, Deceased, and Donna Walker, Respondents.
• Court: Missouri Court of Appeals

Page 657

661 S.W.2d 657

In the ESTATE OF Lyle MURPHY, Deceased Louise MURPHY, Petitioner-Appellant, v. Max MURPHY, Individually and as Executor of the Estate of Lyle Murphy, Deceased and Donna Walker, Respondents.

No. 13102.

Missouri Court of Appeals,

Southern District,

Division Two.

Nov. 10, 1983.

Motion for Rehearing Overruled and to

Transfer to Supreme Court Denied

Dec. 5, 1983.

Application to Transfer Denied

Jan. 17, 1984.

E.C. Curtis, Farrington, Curtis, Knauer, Hart & Garrison, Springfield, for petitioner-appellant.

James E. Curry, Ava, for the Estate of Lyle Murphy.

Daniel P. Wade, Wade & Haden, Ava, for respondents Max Murphy and Donna Walker.

PREWITT, Judge.

Appellant elected to take against the will of her deceased spouse, Lyle Murphy. See § 474.160, RSMo 1978. Respondents, his children by a prior marriage and beneficiaries of the will, contended that she had waived her right to so elect by a written agreement signed eleven days following her marriage to Lyle Murphy. See § 474.220, RSMo 1978. See also, § 451.220-.240, RSMo 1978. Following nonjury trial, the trial court determined that the postnuptial agreement was valid and that by signing it appellant waived her right to elect to take against the will. It also found that she was estopped from now claiming that the postnuptial agreement is invalid and that she ratified it by following it and using it to her advantage in dealing with her own property.

Appellant contends that the trial court erred in finding that the postnuptial agreement barred her right of election because when the agreement was entered into there was no disclosure of the nature and extent of the rights of the parties to the agreement and no disclosure of the property interests and assets of the parties and because the consideration moving to appellant was not a fair consideration under the circumstances. She also contends that the trial court erred in finding that she was estopped because the elements of estoppel are not present and the agreement is void as against public policy or void ab initio, so that the defense of ratification and estoppel is not available to respondents.

We first discuss the basic principles of law involved in appellant's first contention. The rules applied to determine the validity of a waiver of the rights of a surviving spouse are unique and distinct from the requirements for the validity of an ordinary contract. See Estate of Hosmer v. Hosmer, 611 S.W.2d 32, 35 (Mo.App.1980). See also, Maus, Missouri Practice, Probate Law and Practice, § 70, § 1241. Contracts between competent spouses which are in effect mutual waivers of the estate of the other, are governed by statute. In the Matter of Estate of Soper, 598 S.W.2d 528, 535 (Mo.App.1980). The statute relevant here is § 474.220, RSMo 1978. It states:

"The right of election of a surviving spouse hereinbefore given may be waived before or after marriage by a written contract, agreement or waiver signed by the party waiving the right of election, after full disclosure of the nature and extent of the right, if the thing or the promise given to the waiving party is a fair consideration under all the circumstances. This written contract, agreement or waiver may be filed in the same manner as hereinbefore provided for the filing of an election."

Section 474.220 exclusively applies when there is a will and § 474.120, RSMo 1978, applies to intestate estates. In re Adelman's Estate, 377 S.W.2d 549, 553 (Mo.App.1964). Under these statutes no distinction is made whether the agreement is signed before or after the marriage. Decisions under either section are helpful in construing the other as both embody similar principles developed by case law. Estate of Hosmer v. Hosmer, supra, 611 S.W.2d at 35, citing 4 Maus, Missouri Practice, Probate Law and Practice, § 1241.

The parties both rely primarily upon Estate of Youngblood v. Youngblood, 457 S.W.2d 750 (Mo. banc 1970). It appears to be the leading case applying § 474.220. It states that in general terms the statutory requisites of a valid waiver of the right to elect are: (1) that there be a full disclosure of the nature and extent of the right being waived; this requires disclosure of the nature and extent of the property interests of the prospective spouses, or knowledge equivalent to such disclosure; and (2) that there be a fair consideration under all the circumstances, which not only requires that there be such consideration as would support a simple contract, but further that the consideration moving to the spouse or prospective spouse surrendering marital rights be fair and equitable in the particular circumstances. 457 S.W.2d at 754-755.

We turn now to the facts as shown in the record before us. Appellant and Lyle Murphy were married on October 16, 1970. At that time he was 64 years old and appellant 45. Both appellant and Lyle Murphy had children from a previous marriage. They had no children during their marriage. Appellant's prior husband was a cousin of the deceased. Because of that, appellant and Lyle Murphy had known each other for several years before their marriage. Decedent's first wife died on July 16, 1970, and appellant's previous husband died on May 9, 1970.

Following their marriage appellant and decedent lived on decedent's 278-acre farm near Souder. On October 27, 1970, decedent and appellant entered into a written postnuptial agreement. There was no evidence of the circumstances surrounding the preparation or signing of the agreement. In the agreement each party relinquished all rights to the other's property, including any rights of inheritance or any claim to the estate of the other. The consideration recited was the mutual relinquishment of these rights. The agreement has no recital or other reference regarding the right of election to take against a will and it does not state whether any disclosure of their property was made by either party to the other. The agreement was subsequently recorded in Ozark County where decedent's farm was located and in Wright County where appellant owned a house that she and her previous husband had lived in.

The trial court found that at the time of the marriage decedent owned the 278-acre farm, a $12,000 certificate of deposit at the Bank of Gainesville, a $775.50 savings account at the Bank of Gainesville, a $15,000 certificate of deposit at Citizens Bank of Ava, a $5,092 checking account at Citizens Bank of Ava, and other personal property valued at $6,570. The farm was valued by the trial court at $40,000 at the time of the marriage. It also determined that at the time of the marriage that appellant's house was worth $5,000 and her household furniture $800. Appellant also owned an antique and used furniture business which had been operated by her and her previous husband from their home or adjacent to their home and an automobile. There was no evidence of the value of the business and the automobile.

On August 7, 1970, decedent held a sale on his farm, at which time he sold his dairy cattle and other personal property. Appellant was at that sale. Appellant had also previously driven by the farm prior to the marriage. During the marriage appellant and decedent maintained separate checking accounts. In February of 1977, appellant sold her home as her separate property. Decedent did not join in the conveyance. Appellant kept the proceeds from the sale separate from the assets of decedent. On August 14, 1976, she sold personal property that she apparently had previous to the marriage and kept those funds in her and her daughter's name.

Appellant was not allowed, due to respondents' objection based on the dead man's statute, to testify whether the decedent had made disclosure to her of his assets or if she was made aware by him or in his presence of her right to elect to take against a will. She was allowed to testify that at the time of the agreement she was not made aware of his assets from any other source and that she did not learn from "any source other than Mr. Murphy or anyone in his presence in October of 1970, what the legal rights of a widow were in the property of a deceased husband".

Decedent's will is not in the record before us, but the findings of the trial court state that the decedent left a will leaving all his assets to his children and that there was a codicil to it which referred to the postnuptial agreement.

The trial court determined that appellant "knew or should have known facts sufficient to charge her with knowledge of Lyle Murphy's property at the time she signed the post nuptial contract". It made no finding regarding appellant's knowledge of the rights of a widow to elect to take against the will of her deceased husband. It determined that appellant was not defrauded or overreached in the agreement by decedent and that the mutual releases contained in the agreement preserving their respective estates for their children were "fair, equitable and reasonable consideration." The trial court also determined that as appellant used the postnuptial agreement to her advantage following the marriage, she ratified it and is estopped from now claiming it as invalid.

Section 474.220 first conditions the validity of a waiver of the right to elect to take against a will upon "full disclosure of the nature and extent of the right". This requires (1) "disclosure" or knowledge of the legal right of such an election, and (2) "disclosure" or knowledge of the property interests of the prospective spouses. Estate of Youngblood v. Youngblood, supra, 457 S.W.2d at 754. The latter is apparently required to make the knowledge of the right of election meaningful when considering whether to waive that right. Id., 457 S.W.2d at 756.

Youngblood may support respondents as to knowledge of the assets. There, the court held that the record shows that the widow had sufficient knowledge of her husband's property to enter into the agreement understandingly and with knowledge of what she...