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Plaintiff Appeals Decision Denying Request for Constructive Trust


In this action for a declaratory judgment, plaintiffs appeal from a judgment where, following a trial on stipulated facts, the court dismissed the complaint. Plaintiffs are the only children of the husband and wife, both now deceased. The wife died first and the husband thereafter. Defendant is the second wife and the other defendant is the executor of the last will and testament of said husband.

Upon the death of the husband, plaintiffs commenced the within action seeking a declaration of their rights with respect to the husband’s estate. The complaint consisted of four causes of action, as follows: (1) To impress a constructive trust upon certain real property located at 141 Forest Green, Staten Island; (2) To void the right of election filed by defendant second wife under section 5-1.1 of the Estates, Powers and Trusts Law as surviving widow of the husband; (3) To impress a constructive trust upon the proceeds of a pension plan of the deceased husband had with the City of New York, which were paid to Anne as designated beneficiary at the husband’s death.; (4) To impress a constructive trust upon funds which prior to the death of the first wife had been in savings and/or checking accounts in the joint or individual names of the husband and wife, and upon other personal property which had been in the joint and/or individual names of the husband and wife prior to the wife’s death, which the husband thereafter transferred to himself and the second wife as joint tenants.

On October 17, 1967 the husband and wife had executed a joint will which provides, in pertinent part, as follows: We, in consideration of the agreement of each of us to dispose of our property as hereinafter set forth, do hereby make, publish and declare this to be our joint Last Will and Testament. First: We give to the survivor of us all our property, both real and personal. Second: After the death of the survivor of either of us, all our property, both real and personal, we give devise and bequeath unto our children (plaintiffs herein). The wife died on September 27, 1971 and the joint will, insofar as her estate was concerned, was admitted to probate in Kings County. At the time of her death, the husband and wife owned as tenants by the entirety, two parcels of real estate, one at 3722 Clarendon Road and the other at Avenue D, in Kings County, and had a bank account in their joint names in a Brooklyn bank.

On November 20, 1972 the husband contracted to sell the Clarendon Road property for $32,750 all cash. On December 26, 1972 he married Anne. On March 3, 1973 Raymond and Anne contracted to buy certain real property located at 141 Forest Green, Staten Island, for $44,785, that is, $26,785 cash over a mortgage of $18,000. On June 30, 1973 the husband closed the sale of Clarendon Road and on July 3, 1973 with the proceeds from the sale of Clarendon Road, closed the purchase of Forest Green, taking title thereto in the names of the husband and his second wife as tenants by the entirety. The husband died on November 7, 1974 and the joint will insofar as his estate was concerned was admitted to probate in Richmond County. At the time of his death he owned the Forest Green property as tenants by the entirety with his second wife, the Avenue D property in his own name (as the deceased wife, with whom he had owned said property as tenants by the entirety, had pre-deceased him), two bank accounts in his name jointly with the second wife in which there was $305.50 at the East River Savings Bank (emanating from the husband and wife’s bank account in Brooklyn), and $148.32 at the Manufacturers Hanover Trust Company, the monies of which were contributed solely by the husband. It was alleged that furniture in the home of Raymond and Anne was purchased by the husband with $4,065 from the proceeds of the sale of Clarendon Road. Neither the first nor the second wife ever worked or made any contribution to the purchases of Clarendon Road, Avenue D, the bank accounts or the purchase of the furniture at the home of the husband and the second wife.

On or about February 26, 1975 plaintiffs commenced the within action. The theory of the complaint is that the joint will executed by the plaintiffs’ parents, imposed a contractual obligation upon the survivor to dispose of his or her assets, upon his or her death, to plaintiffs. Trial Term dismissed the complaint on the grounds that the joint will did not expressly impose a restriction on the disposition of property during the lifetime of the surviving spouse (EPTL § 10-6.2(a)(4)) and that the joint will may not be enforced as a contract, for want of adequate consideration.

The trial court was in error. “Two persons may validly agree to dispose of their estates in a particular way and may embody their agreement in mutual wills or a joint testament.” A will is, of course, always ambulatory and revocable until death but one so inclined may bind himself by a mutual or joint will to dispose of his estate in a specified and agreed manner. If, in violation of the agreement so made, one of the parties to the joint will executes a new one, the latter is recognized as his last testament, but the courts will require its executor and beneficiaries “to perform the contract” of their decedent. Indeed, to permit the one who survives to gain the benefits of the joint will and then to flout its provisions in violation of the promise made to the other “would be a mockery of justice”. The principle, supported by reason and equity, has been followed in this State as well as in other jurisdictions. “Each (testator) was at liberty during his lifetime to use his own (property) as he saw fit, short of making a different testamentary disposition or a gift to defeat the purpose of the agreement, which was that upon his death each was to leave the property of which he was then possessed in the manner agreed upon.”

The joint will executed by Raymond and Theresa strongly suggests an enforceable obligation upon the survivor to dispose of his property pursuant to paragraph “Second” because throughout, the plural pronouns “we” and “us” and not “I” are used, and further because the beneficiaries under the will, other than the testators themselves, are their children. As was said in another connection, “the whole writing may be ‘instinct with an obligation’ imperfectly expressed. If that is so, there is a contract.”

Recently this court, in a 1977 case decision specifically enforced contractual obligations created by a joint will whose language is virtually identical to the will executed by the parents of plaintiffs herein. The following language from that opinion is apropos: While the mere existence of a joint testament may not in and of itself serve to establish the agreement, the language used by the testators or the circumstances surrounding its making suffice to spell out a contract, particularly in the case of a joint will executed by husband and wife or by parents interested in providing for their children.

Defendants’ contention that all of the assets of the husband and wife were provided by the husband and that therefore he could dispose of his property as he saw fit is of no moment. The husband’s property during his marriage to his first wife was held in both their names and upon her death, he received and became the owner of all the property in his own name. The husband of course, was free during his lifetime to use the property so received but he could not make a testamentary disposition contrary to the agreement or a gift, as he did here, to defeat the purpose of the agreement.

Moreover, defendants’ attempt to distinguish the case on the ground that the husband did not execute a separate will after the first wife’s death is irrelevant since, as indicated above, the husband could not defeat the agreement embodied in the joint will by making a gift or gifts to his second wife. There was consideration sufficient to enforce the agreement, found in the mutual promises of the testator/testatrix to have the survivor dispose of the property to their children upon his or her death. Had he pre-deceased her, it was surely his intention that the first wife upon her death, should devise and bequeath the property to plaintiffs.

Thus, defendants’ various contentions in support of the claim that the joint will herein did not create an enforceable contract are rejected. Furthermore, reliance by the trial court on EPTL § 10-6.2(a)(4) was error as this section refers to the “Exercise of a power of appointment; conformity to directions of donor”, and is inapplicable to the case here.

We have noted that the Clarendon Road property sold by the husband was property which he and his deceased wife held as tenants by the entirety. The general rule is that “an estate by the entirety can be conveyed or encumbered only by the joint deed or consent of husband and wife, and neither can, without the consent of the other, convey or encumber any part of an estate by the entirety so as to affect the right of survivorship in the other” (N.Y.Jur., Domestic Relations § 158, see cases cited), but where either a husband or wife survives, such survivor may dispose of the property as he or she sees fit. However, in this case we recognize a restriction on the right of the survivor husband to make an unfettered disposition. By our decision we do not hold that the rule as to disposition of properties owned by tenants by the entirety is changed. We merely say that a husband and wife who are tenants by the entirety may, by joint will containing an exchange of promises, provide for the ultimate disposition of property held by them as tenants by the entirety.

As to the second wife’s right of election under section 5-1.1 of the Estates, Powers and Trusts Law, we conclude that such election is unavailable against any property, real or personal, which is subject to plaintiffs’ entitlements under the joint last will and testament of the husband and wife. While Rubenstein was decided under the Decedent Estate Law, nevertheless, the rationale of that case is applicable as well to the case at bar.

Accordingly, the judgment of the Supreme Court, New York County, entered September 7, 1976, following a trial on stipulated facts should be reversed, on the law, and the complaint reinstated, without costs, and judgment granted declaring in favor of plaintiffs as prayed for in the complaint.

If you want to contest the provisions of a will, seek the help of Stephen Bilkis and Associates. Call today for a free consultation.

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