Rosenberg v. Lipnick

Decision Date30 March 1979
Citation377 Mass. 666,389 N.E.2d 385
PartiesCharlotte ROSENBERG v. Saul E. LIPNICK et al., Executors.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

George L. Cushing, Boston (Marc D. Greenbaum, Boston, with him), for plaintiff.

John J. Murphy, Boston, for defendants.

Before HENNESSEY, C. J., and QUIRICO, BRAUCHER and WILKINS, JJ.

HENNESSEY, Chief Justice.

Charlotte Rosenberg brought this action in the Probate Court against the executors of the estate of Perry Rosenberg, her husband (decedent), seeking invalidation of an antenuptial agreement executed by her and the decedent and a declaration that she is entitled to her statutory share of his estate and a widow's allowance. On the plaintiff's motion, the action was referred to a master. The master made findings of fact and concluded that the agreement is valid and that the plaintiff is not entitled to a statutory share of the estate or to a widow's allowance. The Probate Court judge confirmed the master's report and entered judgment for the defendants. The plaintiff duly appealed.

The plaintiff argues, and the argument finds support in the record, that both the master and the judge viewed this court's decision in Wellington v. Rugg, 243 Mass. 30, 136 N.E. 831 (1922), as controlling. In that case the court held that a husband's simple failure voluntarily to disclose the value of his property prior to executing an antenuptial agreement was not sufficient to invalidate the agreement. Rather, the party seeking invalidation must show fraud.

The plaintiff filed an application for direct appellate review, asking this court to overrule Wellington, and hold that (1) an antenuptial agreement which fails to make a full and fair provision for the wife is not enforceable if the husband failed to disclose his assets prior to execution of the agreement, and (2) the representatives of the husband have the burden of proving full and fair disclosure. We granted the plaintiff's application because of the importance of the issues involved.

Although we agree that the Wellington Principles should be abandoned, 1 we do not think it wise to act retroactively. The Wellington decision has remained undisturbed law in this Commonwealth for over a half-century, and numerous agreements have undoubtedly been fashioned in reliance on its rule. Accordingly, we have reviewed this case for error under the law as it existed in 1959. We have discerned none and thus affirm the judgment for the defendants. However, we take this opportunity to delineate new rules that shall apply to antenuptial agreements executed after the publication date of this opinion.

The plaintiff, who was fifty-eight years old, met the decedent, who was sixty-nine years old, in February of 1958. Both were gainfully employed. The plaintiff was a widow, the decedent was a widower, and each had children by previous marriages. After a courtship of approximately eighteen months, the decedent proposed marriage and told the plaintiff that he would like her to sign an antenuptial agreement. The agreement provided that the plaintiff would accept $5,000 from the decedent's estate in lieu of dower or any other rights that she might have were she to survive him.

The plaintiff took the agreement to her brother, a practicing attorney, who asked her whether she had any knowledge of her prospective husband's resources. When she stated that she did not, he told her that he thought the agreement was unfair and called for some explanation. She expressed her desire to sign it, notwithstanding her brother's observations. As he did not want to advise her against the proposed marriage, her brother recommended that she ask the decedent to sign an agreement surrendering any claim against her estate in the event that he survived her. She responded that the decedent had already told her he wanted nothing from her, whereupon her brother drafted a second agreement by which the decedent had no claim to her estate. Both agreements were executed on October 29, 1959. The plaintiff and the decedent were married on November 7, 1959.

At the time of their marriage, the decedent owned a dwelling and a block of stores in Chelsea, Massachusetts. He occupied one of the stores from which he operated his business as an electrician. The block of stores was sold in 1974 for $20,000. The dwelling was sold in 1960; however, no evidence was introduced as to its sale price.

Samuel Shapiro, one of the defendant executors and the decedent's accountant, testified that in 1960, the decedent received dividends from listed companies. Shapiro could not state the amount of such dividends. Neither could he remember whether the decedent received any interest on savings or what the decedent's income taxes were at that time.

The decedent died on July 4, 1976. His estate has an approximate total value of $119,000: $55,000 in stocks and bonds; $51,800 in mortgages, notes and cash; $12,000 in life insurance; and $200 in miscellaneous assets.

During their marriage, the decedent supported the plaintiff, although the plaintiff purchased some of her clothes with her own money. She continued to be employed at the time of the hearing and had assets totalling approximately $45,000, although her living expenses exceeded her income.

1. The plaintiff contends that the $5,000 to which she is entitled under the antenuptial agreement is grossly disproportionate to the amount to which she would have been entitled but for the antenuptial agreement. The plaintiff further contends that the agreement should have been declared void in the absence of compelling evidence that the agreement was fair when made or that the plaintiff had agreed to take the reduced share with full knowledge of the decedent's assets. The rule in Wellington v. Rugg, supra, is clearly contrary. That case holds that nothing short of proof of fraud will invalidate an antenuptial agreement, irrespective of the unfairness of the agreement's provisions. The following language is controlling: "(T)he allegation that the intestate 'concealed' the amount of his property in the absence of anything to show that he made false representations respecting it or prevented the plaintiff from obtaining whatever facts she desired concerning its character or value is immaterial. The failure on his part to inform her of what he owned falls far short of fraudulent concealment. So far as appears had she so wished, she could have made inquiry of him, and also could have made such investigation as she saw fit before making the contract. Notwithstanding the confidential relations between the parties, the simple failure voluntarily to disclose the amount of his property does not constitute actionable fraud." Id. at 35-36, 136 N.E. at 834. Cf. Anderson v. Anderson, 354 Mass. 565, 238 N.E.2d 868 (1968) (finding fraud in antenuptial agreement purporting to limit the rights of the wife in the event of divorce).

Given our view that Wellington governs the rights of the parties now before us, we need not decide whether the agreement's provisions were manifestly unfair to the plaintiff. 2 The master found that the plaintiff failed to establish that the decedent either misrepresented or fraudulently concealed the extent of his assets prior to execution of the agreement. In light of the master's finding, which the judge confirmed and which is supported by the record, the plaintiff cannot prevail under the Wellington rule. Accordingly, we affirm the judgment for the defendants.

2. Massachusetts stands alone in requiring the party seeking invalidation of an antenuptial agreement to show fraud. See 2 A. Lindey, Separation Agreements and Ante-Nuptial Contracts § 90 (rev.ed.1977); Annot., 27 A.L.R.2d 883-906 (1953 & Supp.1978). The great majority of cases in other jurisdictions hold that the parties to an antenuptial agreement generally do not deal at arm's length. Rather, they occupy a relationship of mutual trust and confidence and as such must exercise the highest degree of good faith, candor, and sincerity in all matters bearing on the proposed agreement. 2 A. Lindey, Supra at § 90-42-43. The burden is not on either party to inquire, but on each to inform, for it is only by requiring full disclosure of the amount, character, and value of the parties' respective assets that courts can ensure intelligent waiver of the statutory rights involved. See, e. g., Guhl v. Guhl, 376 Ill. 100, 33 N.E.2d 185 (1941); Megginson v. Megginson, 367 Ill. 168, 10 N.E.2d 815 (1937); Denison v. Dawes, 121 Me. 402, 117 A. 314 (1922); Hartz v. Hartz, 248 Md. 47, 234 A.2d 865 (1967); Kaufmann Estate, 404 Pa. 131, 171 A.2d 48 (1961); McClellan Estate, 365 Pa. 401, 75 A.2d 595 (1950). See generally Annot., 27 A.L.R.2d 883, §§ 3, 4 (1953 & Supp.1978).

Although the Wellington court specifically acknowledged that a confidential relationship exists between parties to an antenuptial agreement, Wellington v. Rugg, supra, 243 Mass. at 36, 136 N.E. 831, its holding treats them as though they stood at arm's length. The decision cites G. S. Bower on Actionable Non-Disclosure § 135 (1915), Potts v. Chapin, 133 Mass. 276 (1882), and Windram Mfg. Co. v. Boston Blacking Co., 239 Mass. 123, 131 N.E. 454 (1921), all of which speak to rights between parties functioning in a commercial context. Wellington, supra, 343 Mass. at 35, 136 N.E. 831. Quoting from Windram, the Wellington court, 343 Mass. at 36, 136 N.E. at 834 stated: "Mere silence on the part of the defendant is all that is charged. But failure to disclose known facts does not amount to fraud, and is not the basis of an action for deceit, unless the parties stand in such relation to one another that one is under legal or equitable obligation to communicate the facts to the other." Although the court chose to view the confidential relationship between the parties in Wellington as not giving rise to an obligation to disclose, that case has been cited in subsequent opinions which...

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