San Antonio Area Foundation v. Lang

• Decision Date: 09 November 2000
• Docket Number: No. 99-1117,99-1117
• Citation: 35 S.W.3d 636
• Parties: (Tex. 2000) San Antonio Area Foundation, Petitioner v. Sylvan Stephen Lang and Jeanne Lang Mathews, Respondents
• Court: Texas Supreme Court

Page 636

35 S.W.3d 636 (Tex. 2000)

San Antonio Area Foundation, Petitioner v. Sylvan Stephen Lang and Jeanne Lang Mathews, Respondents

No. 99-1117

IN THE SUPREME COURT OF TEXAS

Argued September 13, 2000.

Decided November 9, 2000.

On Petition for Review from the Court of Appeals for the Fourth District of Texas

Justice Abbott delivered the opinion for a unanimous Court.

The central issue in this will construction case is whether extrinsic evidence is admissible to construe the term "real property." The parties filed cross-actions for declaratory judgment seeking to determine whether Ruth Lang's devise of real property to her niece and nephew (the Langs) includes Ruth's interest in certain promissory notes and other personal property assets associated with the real property. The probate court rendered final judgment for the San Antonio Area Foundation that: (1) Ruth's interest in the notes and other personal property is not included within the meaning of the term "real property" and therefore does not pass to the Langs; and (2) Ruth's interest in those assets is personal property that passes under the residuary clause to the San Antonio Area Foundation. In reaching its conclusion, the probate court excluded the Langs' extrinsic evidence. The court of appeals reversed and remanded for trial because it determined that the Langs' extrinsic evidence created a fact issue regarding Ruth's intent. 5 S.W.3d 738. We hold that extrinsic evidence is not admissible to construe an unambiguous will provision and that the devise of the real property to the Langs was partially adeemed, that is, extinguished, by sales of part of the property after Ruth executed her will. Accordingly, we reverse the court of appeals' judgment and reinstate the probate court's judgment in favor of the Foundation.

I. Background

Ruth Lang executed her will on January 17, 1991. Paragraph five of that will provides:

I devise and bequeath the real property and oil and gas real properties in my estate located in Frio County, Texas and Prue Road in San Antonio, Texas one-half (½) to my nephew, SYLVAN STEPHEN LANG, and one-half (½) to my niece JEANNE LANG MATTHEWS, if either shall survive my death by one hundred twenty (120) days. In the event only one or neither of said beneficiaries so survives me, said non-surviving beneficiary's share shall be distributed to his or her issue, by right of representation.

(Emphasis added.) After making several cash legacies, Ruth's will gives the residuary of her estate to the San Antonio Area Foundation, a charitable organization.

When Ruth died, she owned a twenty-five percent undivided interest in approximately ninety acres of real property located on Prue Road in San Antonio. The ninety acres were originally part of a 219-acre tract owned by the Lang family that, over the years, was partially developed and sold in exchange for real estate lien notes, promissory notes, cash, and net-profit agreements. When she executed her will, Ruth already owned a one-quarter interest in a real estate lien note and accompanying net-profit agreement from a January 1990 sale of part of the Prue Road property. In December 1993, the Lang family sold more acreage from the Prue Road property and Ruth acquired a twenty-five percent interest in two additional notes taken as proceeds from the sale. Until her death on July 25, 1995, Ruth kept her twenty-five percent interest in the three lien notes, an unsecured promissory note executed in December 1993, and cash in a "cash reserve" bank account set up to receive payments from the transactions involving the Prue Road property. At the time of suit, Ruth's interest in these assets was worth about $120,000. The parties dispute whether Ruth's interest in these assets is devised to the Langs in paragraph five of Ruth's will or passes to the Foundation as residuary beneficiary.

In granting summary judgment for the Foundation, the probate court ruled that the meaning of "real property" was unambiguous and excluded the Langs' extrinsic evidence as to the meaning of Prue Road. The probate court also concluded that the parts of the Prue Road property that were sold before Ruth's death were adeemed from the devise. Therefore, Ruth's interest in the proceeds received from the sales passed to the Foundation as residuary beneficiary.

The court of appeals held that a fact issue existed regarding Ruth's intent to devise her interest in the notes to the Langs, and it therefore reversed the summary judgment and remanded the case for trial. 5 S.W.3d 738. The court concluded that the term "real property" in Ruth's will could refer to the land alone, but, considering the extrinsic evidence offered by the Langs, it could also reasonably refer to "that bundle of assets that comprised a long-time, ongoing family business investment." Id. at 742.

The court also held that the probate court erred in failing to consider extrinsic evidence of Ruth's intent because "[w]hether or not the phraseology is patently or latently ambiguous, . . . it is always proper for the court to consider the circumstances surrounding the use of the[] terms when construing the meaning of the words the testatrix used in her will." Id. The court further found that regardless of whether the will was ambiguous, the evidence submitted by the Langs raised a fact issue requiring a jury determination. Id. at 742-43. Additionally, the court of appeals concluded that section 58(c) of the Probate Code did not resolve the ambiguities in the will and that ademption did not apply to the Prue Road property that was sold before Ruth's death. Id. at 743-45.

The Foundation argues that the court of appeals erred because the term "real property" is unambiguous and therefore extrinsic evidence is not necessary to construe the will. The Foundation also relies on section 58(c) of the Probate Code, which excludes from devises of real property those items of personal property located on or associated with the real property unless the testatrix specifically includes them. The Foundation argues that a proper construction of the will results in Ruth's interest in the notes, collections, and net-profit interests passing under the residuary clause because these assets are personal property distinct from the real property at Prue Road. Finally, the Foundation claims that when the Lang family sold parts of Prue Road in return for the notes, those parts of the devise were adeemed and Ruth's interest in the proceeds of sale, as personal property, does not pass to the Langs.

The Langs argue that the phrase "real property in . . . Prue Road" is ambiguous and therefore extrinsic evidence is necessary to construe Ruth's will. The Langs contend that extrinsic evidence would show that: (1) the Lang family considered Prue Road to be a real estate development project that included the land and the notes as one complete package; and (2) Ruth intended to return her interest in the land and the Prue Road notes to the Langs under the devise of real property. Consequently, the Langs claim that ademption does not apply because Ruth's interest in the notes and collections passes to the Langs as part of the Prue Road real property devise.

II. Rules of Construction and Extrinsic Evidence

In construing a will, the court's focus is on the testatrix's intent. Huffman v. Huffman, 339 S.W.2d 885, 888 (Tex. 1960). This intent must be ascertained from the language found within the four corners of the will. Shriner's Hosp. for Crippled Children of Tex. v. Stahl, 610 S.W.2d 147, 151 (Tex. 1980). The court should focus not on "what the testatrix intended to write, but the meaning of the words she actually used." Id.; Rekdahl v. Long, 417 S.W.2d 387, 389 (Tex. 1967); Kirk v. Beard, 345 S.W.2d 267, 273 (Tex. 1961). In this light, courts must not redraft wills to vary or add provisions "under the guise of construction of the language of the will" to reach a presumed intent. Stahl, 610 S.W.2d at 151; Welch v. Straach, 531 S.W.2d 319, 322 (Tex. 1975); Huffman, 339 S.W.2d at 888.

Determining a testatrix's intent from the four corners of a will requires a careful examination of the words used. If the will is unambiguous, a court should not go beyond specific terms in search of the testatrix's intent. Frost Nat'l Bank v. Newton, 554 S.W.2d 149, 154 (Tex. 1977) (noting that absent an express statement in the will, a court cannot make ad hoc assessments of what the testator believed to be "primary" versus "incidental" purposes). This Court has long held that when there is no dispute about the meaning of words used in a will, extrinsic evidence will not be received to show that the testatrix intended something outside of the words used. Lehman v. Corpus Christi Nat'l Bank, 668 S.W.2d 687, 688 (Tex. 1984); Newton, 554 S.W.2d at 153; Huffman, 339 S.W.2d at 888. This Court has also said that a "court may always receive and consider evidence concerning the situation of the testator, the circumstances existing when the will was executed, and other material facts that will enable the court to place itself in the testator's position at the time." Stewart v. Selder, 473 S.W.2d 3, 7 (Tex. 1971) (emphasis added); see also Kelley v. Marlin, 714 S.W.2d 303, 305 (Tex. 1986). But this broad approach to the admissibility of extrinsic evidence applies only when a term is open to more than one construction. See Lehman, 668 S.W.2d at 689.

III. Application

Ruth's will devises to the Langs her interest in the real property located at Prue Road. The term she chose to describe the devise "real property" does not require extrinsic evidence to understand. Despite this fact, the Langs argue that Ruth's devise of "real property" also includes her interest in the real estate lien and promissory notes, net-profit agreements, and cash in the reserve account. Neither Texas statutory nor common law supports this argument.

Real property is defined as "land, and generally whatever is erected or growing upon or affixed...