Levy v. Sherman

Grason, J., delivered the opinion of the Court. This appeal brings up for review the action of the Circuit Court of Baltimore City in decreeing that the bill of complaint of the appellant be dismissed, with costs to the appellees. ⁶⁵ The principal object of the bill was to have the Court declare null and void and of no effect an antenuptial agreement entered into by the appellant and her deceased husband, Joseph Levy. The agreement may be summarized as follows: It states it was made in contemplation of marriage; states that Levy had fully informed appellant of his financial standing, amount of his assets, liabilities and income, and that Levy desired to make a fair and reasonable provision for the appellant in lieu of her rights after marriage. It provides, in case appellant survive Levy, that she receive all household furniture and one thousand dollars.

In it appellant waives all rights as widow in the property he then possessed or would acquire in the future, and it provides that she would join in any instrument with Levy to divest her of dower in any property he wished to convey. It is dated December 17, 1925, signed and sealed by both parties and acknowledged on the same day before a notary public, and duly recorded among the Land Records of Baltimore City on December 19, 1925. The parties were married on December 20, 1925, and the bill avers that they had been engaged to be married for some two weeks prior to the marriage. At the time of the execution of the antenuptial agreement, Levy was possessed of leasehold properties which the real estate experts testified were worth $23,800, subject to mortgages aggregating $16,487.68.

Levy’s equity in these properties at that time was worth $7,312.32. The cash which Levy had on deposit in bank at the time together with his equity in these properties, establishes his net worth at the date of the agreement to be around $10,000. Since his death his administrators, his two daughters, who are the sole appellees in this action, sold, through the Orphans’ Court, his leasehold properties, and the net aggregate amount from these sales was $14,500. The cash on deposit to Levy’s accounts in banks at the time of his death was trivial, amounting to something less than $200.

The bill charges that Levy was guilty of fraud in procuring the appellant to sign the antenuptial agreement. ⁶⁶ It recites that he had an appointment to take appellant to see a moving picture, but that instead, he took her to the office of one Wolpert, whom she did not know before that time, nor has seen since; that almost immediately upon entering Wolpert’s office, he produced the ante-nuptial agreement and she was asked to sign it. Upon inquiring what it was, Levy stated that it was a paper necessary for him to have in order to carry on his business after they were married; and, having full faith and confidence in her fiance, she signed and acknowledged the agreement. Their acknowledgments of the instruments were taken by Wolpert as notary public. The whole matter only took a very few minutes, and they left the office to go to the theatre.

Appellant avers that at the time she executed the agreement she did not know its contents and relied implicitly upon the statement of her fiance of what it was, and that she did not know its contents until after the death of Levy. She avers that she owned no property at all at' that time and that the allowance provided for her in the instrument is so disproportionate to the worth of Levy at the time, that it implies bad faith on the part of Levy and that the instrument was intended to deprive her of her future marital rights. She lived with Levy, after the marriage, until his death, a period of about eighteen years. The answer admits the marriage, the death of Levy, the execution of the antenuptial agreement, but denies all of the other material allegations of the bill and charges appellant with laches.

Testimony was taken in open court, solicitors heard, and thereafter the decree was filed. At the outset of this opinion it may be said that ante-nuptial agreements, in contemplation of marriage, are lawful. Naill v. Maurer, 25 Md. 532 ; Busey Ex. v. McCurley, 61 Md. 436 , 48 Am. Rep. 117 ; Schnepfe v. Schnepfe, 124 Md. 330 , 92 A. 891 , Ann. Cas. 1916 D, 988; Wlodarek v. Wlodarek, 167 Md. 556 , 175 A. 455 ; 26 Am.

Jur., Husband and Wife, Section 275, page 882. ⁶⁷ “An antenuptial settlement or agreement to the extent that it is executory must be supported by consideration, but marriage itself is consideration for such a settlement or agreement, and indeed, it is said to be perhaps the most valuable and highly respected consideration of the law in this as well as other cases.” 26 Am. Jur., Sec. 277, page 884 (see note 2 for cases) ; Braecklein v. McNamara, 147 Md. 17 , at page 21, 127 A. 497 ; Michael v. Morey, 26 Md. 239 , 90 Am. Dec. 106 . An important question in this case is whether, at the time of the execution of the antenuptial agreement, a confidential relationship existed.

That is, whether the law, under the relations existing between the parties, and the circumstances surrounding the transaction at the time of the execution of the antenuptial contract, would impute to Levy an influence over the appellant that would cast upon him, and those holding by or through him, the burden of showing that the contract was fair and reasonable. Some cases hold that unless the parties to such an instrument were engaged to be married at the time of its execution, a confidential relationship does not arise, and even though the man and the woman contemplate marriage they deal with each other at arm’s length, like two astute business men, each endeavoring to gain an advantage over the other in the matter. All the cases hold that where the parties, at the time of the execution of the antenuptial contract, were engaged, a confidential relationship exists, and it is held that after the instrument is signed by the parties they become engaged, even though such was not the case a minute or two before the execution of the contract. In 41 C. J. S., Husband and Wife, Sec. 97, under the heading “Presumptions and Burden of Proof” at page 571, it is said: “The rule under which inadequacy or disproportion of the provision for the wife raises a presumption against the husband and throws the burden on him or on those claiming under him of proving fairness or knowledge ⁶⁸ applies where the parties were engaged to be married at the time of the agreement and a confidential relationship existed between them.” All of the cases cited to support this text are Illinois cases, With the exception of Baker v. Baker, 24 Tenn.

App. 220 , 142 S. W. 2d 737 . In that case the agreement was entered into after their engagement to marry. Yockey v. Marion, 269 Ill. 342 , 110 N. E. 34 ; Mann v. Mann, 270 Ill. 83 , 110 N. E. 345 ; Kuhnen v. Kuhnen, 351 Ill. 591 , 184 N. E. 874 . In Williamson v. First National Bank, 111 W. Va. 720 , 164 S. E. 777, 779 , it is said: “The contract recites that the parties ‘are about to enter into a contract of marriage.’ So far as appears from that document, no marriage agreement had been entered into before it was signed, and for aught that appears from that instrument its execution was a preliminary step to the engagement to marry.

Whatever may be the usual custom as to the time antenuptial agreements are made, it is not universally true that they are made after betrothal. It may well be, and undoubtedly is true, that a man and a woman may contemplate marriage but one or both of them have reasons why it is desirable, not only before entering into the marriage relation but before there is any. agreement to marry, to settle the rights of each in the estate and property of the other by an antenuptial agreement, and this step precedes and is preliminary to the contract of marriage. In cases of that character there will be no confidential relation existing until after the contemplated contract is made, and the law governing the rights of the parties under such contracts would be the same as is applicable to contracts entered into by persons between whom there exists no confidential or fiduciary relation.” In re Malchow’s Estate, 143 Minn. 53 , 172 N. W. 915, 917 , it is said: ⁶⁹ intermarry are presumed to stand in a confidential relation to each other. They are not in the same category as buyers and sellers who deal at arm’s length.

Kline v. Kline; 57 Pa. 120, 98 Am. Dec. 206 ; Graham v. Graham, 143 N. Y. 573 , 38 N. E. 722 ; Barker v. Barker, 126 Ala. 503 , 28 So. 587 ; 1 Page on Contracts, 190. But the presumption is not conclusive that a man obtains the confidence of or gains a controlling influence over the woman he is pledged to marry merely because they have agreed to intermarry. Marriages of convenience take place in which the impulses of sentiment play no part.

They are of a purely business character. The woman may have no greater confidence in her intended husband than she has in other acquaintances, and he may have no greater influence over her actions than they have. Such seems to have been the case here.” ⁶⁸ “In addition to inadequacy of consideration, there must be a confidential relationship between .the parties before fraud will be inferred. Persons under contract to ⁶⁹ In Pierce v. Pierce, 71 N. Y. 154, 158 , 27 Am.

Rep. 22 , the contract v/as made in contemplation of marriage. The Court said: “The relationship of parties who are about to enter into the married state, is one of mutual confidence, and far different from that of those who are dealing with each other at arms length. This is especially the case on the part of the woman; and it is the duty of each to be frank and unreserved when about to enter into an antenuptial contract, by a full disclosure of all facts and circumstances which may in any way affect the agreement. Kline v. Kline, 57 Pa. 120 .” Although it does not appear from the opinion the parties were engaged prior to the execution of the instrument, the Court said: “That the deceased, taking advantage of the confidential relationship existing between him and the respondent, who was the intended wife of the deceased, he Was chargeable with fraud and misrepresentation in procuring her signature to the same.” In re Flannery’s Estate, 315 Pa. 576 , 173 A. 303 , 305, the Court said: ⁷⁰ “In Clark’s Estate, 308 Pa. 538 , 154 A. 919 , we reiterated what .had been said in earlier cases that, if the provision made by a man for his intended wife, in an antenuptial agreement, is unreasonably disproportionate to his means, it raises a presumption of designed concealment, and throws the burden -upon those who claim that the agreement was fair and conscionable.

Unless this burden is carried equity will treat the transaction as one of constructive fraud and set' it aside.” It was further held in that case that antenuptial contracts depend for their validity upon the reasonable provision for the wife, or full and fair disclosure to the wife of tlie husband’s worth, and it was incumbent upon the husband to disclose to the wife the value of his property before asking her to waive all right therein. In re Waller’s Estate, 116 Neb. 352 , 217 N. W. 588, 590 , it does not appear that the parties were engaged at ■ the time of the execution of the antenuptial contract. The Court said: “That good faith is the cardinal principle in an ante-nuptial contract is the apt observation of a writer on this subject. He goes on to say that, if the provision made in the contract for the prospective wife is unreasonably disproportionate to the husband’s financial worth, the presumption of designed concealment is raised, and the burden of disproving the charge rests upon the husband. 21 Cyc. 1251; Warner’s Estate, 207 Pa. 580 , 57 A. 35 , 99 Am.

St. Rep. 804 ; Russell v. Russell, 60 N. J. Eq. 282, 47 A. 37 .” ” ■ In Potter’s Ex’r v. Potter, 234 Ky. 769, 771 , 29 S. W. 2d 15, 16 , it does not appear from the opinion that the parties were engaged to be married before the contract was entered into. It is there said: “With respect to the burden of proof, the rule puts it on the party relying on the contract to show that it was fairly entered into, and, where it is apparently inequitable and unjust, the party assailing it is not usually required to produce the volume or degree of proof demanded for the overthrow of the ordinary written instru ⁷¹ ment. * * * It is the rule also that in such instances the prospective wife must have been apprised of the nature and extent of her prospective husband’s estate and the value of her marital rights therein that she was surrendering by the instrument.” In re Warner’s Estate, 210 Pa. 431 , 59 A. 1113 , the contract was made in contemplation of marriage and it does not appear that the parties were engaged at the time. The Court said: “The cases which have sprung out of antenuptial contracts may be appropriately divided into two classes: (1) Those in which, notwithstanding the prospective wife’s ignorance of the extent and value of the husband’s estate, the contract was sustained because the court found that, in the circumstances, her provision was reasonable; and (2) those in which the contract was set aside because the husband’s representative failed to show that a disproportionate provision was made with the wife’s knowledge of the extent and value of his estate.” And after quoting several cases, continued: “The reason which underlies the second class, with which we are concerned here, is that the parties deal with each other, not like strangers, at arm’s length, but with the openness and fairness which the confidential relation existing between them necessarily implies, and whose absence constitutes a fraud which vitiates the transaction.” In Russell v. Russell, 129 F. 434, 441 , the antenuptial agreement was executed a few days before the marriage. It does not appear from the opinion that the parties were engaged at the time of the execution of the contract.

The Court stated: “The law which governs in such cases is universal and well defined.” And quotes a number of cases, some of which have been referred to in this opinion. It continues: “The parties who enter into an antenuptial agreement stand in such a relation of confidence to each other as to call for the exercise of the highest fairness and good faith. It cannot be expected that either will pry into the money affairs of the other, except possibly ⁷² in the most general way; or conduct an independent investigation with regard to them. The amenities of the situation forbid it, if nothing else.

It is too suggestive of a mercenary motive in the marriage, which should be prompted by mutual affection, to be sanctioned. Each must therefore, of necessity, derive knowledge