[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 533 October 27, 1927. The opinion of the Court was delivered by I do not agree to the affirmance of the decree of his Honor, Judge Dennis, in this case, as announced in the opinion of the Chief Justice, for the reasons which follow:
This action was instituted by the plaintiffs, two of the three executors of the will of Mrs. Henrietta H. Caskey, deceased, against the defendant, John Henry Hydrick, the third executor, but in his individual capacity, for the purpose of having declared void and surrendered for cancellation a certain document signed by her a short time before her death, and delivered to the defendant, her brother. The document, upon a single sheet of writing, contains a preamble of certain statements moving Mrs. Caskey, followed by a note dated February 14, 1920, due one year after date, by which Mrs. Caskey promises to pay to her sister, Mrs. Laval, and to her brother, the defendant, each $5,000, with interest from date at 8 per cent. per annum, payable annually. The document is reproduced in the Circuit Decree, to which reference is made. Let the Decree be reported. *Page 544
The executors, desirous of making a final settlement of the estate, were embarrassed by the outstanding claim of the defendant under the document in question (Mrs. Laval having brought suit to recover her interest under it, and having suffered a nonsuit), and invoked the aid of the Court to have the document, so far as it purported to create an obligation in favor of the defendant, annulled, alleging that it constituted no binding obligation upon the estate, for various reasons which will be adverted to. The main contention of the plaintiffs is:
"That it was not delivered as and for a binding obligation, and under its terms could constitute no promise to pay money until after the death of the said Henrietta H. Caskey."
The defendant disputed the right of the plaintiffs to have the document annulled, alleging that the note constituted adonatio causa mortis, a gift inter vivos, and was supported by a valuable consideration, services rendered by the defendant to Mrs. Caskey, at her special instance and request. He also interposed a counterclaim, as upon a quantum meruit, for services rendered Mrs. Caskey, valued at $5,000.
The plaintiffs interposed what may be treated as a demurrer to the answer of the defendant, upon the grounds:
(1) That the note does not constitute a binding obligation upon the estate, in that (a) it is not an unconditional promise to pay; (b) it is not a gift inter vivos, for the reason that a note is not the subject of such a gift; (c) it is not a donatio causa mortis, for the same reason.
(2) That the alleged counterclaim does not state facts sufficient to constitute a counterclaim.
Although the alleged cause of action of the plaintiffs is manifestly one of strict equitable cognizance, the case was docketed by the plaintiffs, on calendar 1, for trial by a jury, and at the March Term, 1925, it was so tried before his Honor, Judge Dennis. A verdict in favor of the defendant *Page 545 for $800 resulted, which, upon motion of the plaintiffs, consented to by the defendant, was set aside by the presiding Judge and a new trial ordered.
At the April Term, also presided over by his Honor, Judge Dennis, the case was transferred by consent, to calendar 2, for trial by the Court, without a jury. By agreement the testimony taken at the first trial, transcribed by the stenographer, was accepted as the evidence upon the second trial by the Court, certain objections thereto being reserved to be passed upon by the trial Judge.
Judge Dennis filed an "Opinion and Judgment," dated June 25, 1925, in which he sustained the positions of the plaintiffs that the note did not constitute a donatio causamortis; that it did not constitute a gift inter vivos; and that the written instrument did not constitute a valid and enforceable demand as a promissory note; but he held that the evidence, including the written instrument, showed that the defendant had rendered services to Mrs. Caskey during her lifetime, for which he expected, and she intended to make, proper compensation; that the written instrument clearly expressed the terms of an agreement between Mrs Caskey and the defendant, the statement of the consideration, and the time of payment; that it "is a contract between the parties, or rather evidence of a contract between them, and is enforceable as such."
While allowing the defendant to set up this obligation as a counterclaim, and the plaintiffs to reply to it, he apparently did not consider it necessary that it be set up as such, and based his decision upon the existence of a contract between Mrs. Caskey and the defendant that the defendant should be compensated for the services rendered, in the amount of the note. He accordingly rendered judgment in favor of the defendant against the executors for $5,000, with interest at 8 per cent. per annum, payable annually from February 14, 1920 (the date of the questioned document); the interest amounting to $2,100; a total of $7,100. *Page 546 From this decree the plaintiffs have appealed upon 34 exceptions. I shall not consider them seriatim; life is too short; but in my opinion the questions controlling the decision are within a very narrow compass, as I shall endeavor to show.
A brief review of the circumstances connected with this case of more than ordinary interest appears necessary to an understanding of the situation. Mrs. Caskey was the daughter of Dr. A.S. Hydrick, of Orangeburg, who was a brother of Hon. D.E. Hydrick, now deceased, for nearly 12 years an honored member of this Court. Mrs. Caskey was therefore a niece of Mr. Justice Hydrick. Her husband, Commander Caskey of the United States Navy, had died at sea during the World War, and in the latter part of the year 1919 she was taken to the Columbia Hospital, suffering from a malignant and lingering malady. At her request Judge Hydrick prepared a most elaborate and carefully drawn will, covering eight pages of the printed record in this case. It was executed on February 11, 1920. Aside from the evidences of most careful preparation and inclusiveness, the only portions of the will that have any special significance in the decision of the issues now involved are these: In Item 4-B it is provided:
"I give to my brother John Henry Hydrick, his indebtedness to me, whether evidenced by note or otherwise, and release him and his representatives from all liability thereon to my estate."
The will contained also a devise of a one-fourth interest in two tracts of land aggregating 820 acres, to John Henry Hydrick, for life, with remainder "to his issue per stirpes as purchasers"; and the residue of the estate, after certain devises, legacies, and trusts, was directed to be placed in truct for the education of the children of John Henry Hydrick, and a nephew, and the children of four others named, with ultimate division among the beneficiaries referred to. The estate is said to be worth some $75,000; and while it *Page 547 is difficult to estimate the value of this residue, it apparently is not insignificant, over $20,000 as estimated, from which the judgment in this case must be paid, if confirmed by this Court.
On February 14, 1920, three days after the execution of the will on the 11th, the defendant visited his sick sister in the hospital. He says in his testimony: "She was then in a dying condition and suffering intense pain." In view of the fact that the document was entirely in the handwriting of the defendant, with the exception of the signature, and of his declaration that he had only "a few moments alone with her," it may be assumed that he had prepared the document in advance of his visit. After this brief but momentous interview, the defendant left the hospital, carrying with him the signed document. For nearly 4 years thereafter not a soul was informed of its existence or purport.
After the death of Mrs. Caskey on March 12, 1920, and the qualification of the executors, John Henry Hydrick executed a receipt to the executors, dated November 22, 1920, for:
"One note in the sum of $2,800, dated January 23, 1919, payable to Henrietta H. Caskey, and which note represented all of the indebtedness referred to in Item 4-B of the will of the said Henrietta H. Caskey."
On March 7, 1922, the defendant as executor, with the other two executors, issued a call for the presentation of claims against the estate. Not a word came from him in reference to the note under which he claims over $7,000, or to his unpaid claim for services to his dead sister. He did, however, file a claim against the estate for $515.20, the same being for rent collected by her from tenants who had cultivated, as it turned out, a part of the land which belonged to him, which claim was allowed by the probate Judge and paid. *Page 548
On February 28, 1923, the three executors filed a Federal estate tax return, signed by all and sworn to, in Schedule 1 of which the debts of the decedent were set forth; following the admonition, "Itemize fully below all the valid debts of the decedent due and owing at the time of death," various debts were scheduled, including, "1915-1918, Inc., John H. Hydrick, claim for rent collected by decedent, $515.12"; the $5,000 document does not appear, nor does his alleged claim of that or any other amount for services rendered.
On October 23, 1923, for the first time, the defendant disclosed the existence of the document and its purport, in a letter written by him to his sister Mrs. Laval, although she was jointly interested with him in the note set forth therein. His excuse for this unaccountable reticence and concealment was the fear that certain expressions in the preamble might precipitate an attack upon the will which evidently, on account of the liberal provisions therein for himself and his children, he was anxious to have sustained. He continued to procrastinate the active assertion of his claim under the document, and it was only when this action was brought to bring the matter to a head that the issue was presented.
The defendant testified that, at the time the document was executed, he and Mrs. Caskey agreed upon $5,000 as the proper compensation for the services which he had rendered to her. In the Circuit Decree this occurs:
"In respect to the objections interposed by the plaintiffs to certain of the testimony given by the defendant, such objections being based upon Section 708, Code of Civil Procedure, 1922, I sustain such objections and hold that the defendantcould not testify as to any transactions or communicationswith his deceased sister Mrs. Henrietta H. Caskey: and, of course, I have not considered such testimony in the determination of this case." *Page 549
So that all of the testimony of the defendant as to the character and value of the services which he claims to have rendered his sister, and of any agreement between them fixing the value and constituting a contract to compensate him, passes out of the case.
The Circuit Decree, unappealed from by the respondent upon these points, is conclusive that the document cannot be recovered upon as a donatio causa mortis, or as a gift inter vivos, or as a promissory note. There remains the sole question whether it can be recovered upon asa contract; that is to say, whether the Circuit Judge was correct in holding:
"I have reached the conclusion that the written instrument in question is a contract between the parties, or rather evidence of a contract between them, and is enforceable as such."
He recognizes the fact that the defendant can recover only upon this construction of the written instrument; all other considerations being eliminated.
In order that the concept of a contract may be extracted from the terms of the written instrument, inclusive of the preamble and the note, there must appear the recognition, by Mrs. Caskey, of a legal obligation on her part to compensate the defendant for the alleged services, and a positive engagement, definite and certain, to respond to that obligation. I do not think that this can be deduced from the terms of the document for several reasons:
1. It is very clearly indicated that Mrs Caskey intended to make a gift of $5,000 to the defendant and Mrs Laval, and nothing more. The moving cause to the gift in favor of Mrs. Laval was her kind and loving treatment, and to the gift in favor of the defendant his help and service in her business and other ways. She distinctly says so; that in consideration of these matters "I want to give them notes." "Margaret and the nurses have been so kind *Page 550 and loving, and John Henry so much help and service in my business and other ways, I want to give them notes"; not in discharge of any obligation, but as a gift.
While the expression "give" does not necessarily imply a gift (as it is used often in the sense of "execute"), still it is a circumstance to be considered, particularly in view of the companion provision for Mrs. Laval, which is not suggested to have been otherwise than a gift, and was so decided in an action brought by her upon the identical document. It is entirely reasonable to suppose that the liberal provisions made for the defendant and his children by the will fully met any legal obligation she was under for his services. The document means that she had not by the will given Mrs. Laval and the defendant as much as she intended to give them.
2. The validity of the note is made to depend upon her failure to recover from the malady from which she was then suffering, a condition altogether inconsistent with a purpose then and there to create a definite obligation. She declares:
"John says if I get well, he will not deliver the note to Margaret, and will release me from the obligation."
If she owed the defendant $5,000 for his services, she owed it regardless of whether she recovered or not; if she intended to make a definite enforceable contract, it is passing strange that she should have so framed it that if she got well it would be no contract at all.
3. The note, by the terms of the preamble, was intended not to take effect until the death of Mrs. Caskey from her existing malady; that is if she did not "get well" of her then present illness. It is different from a paper payable at the death of the maker, for that is an event that is sure to take place sooner or later, and notes, supported by a valuable consideration, with that condition, have been sustained as notes, and even as negotiable *Page 551 notes. 8 C.J., 136. The burden is upon the payee to establish the essential element of a valuable consideration, else the paper is construed as testamentary in character and void.
In the present case the note could never be sustained as a note, for the death of Mrs. Caskey from that illness was a matter of uncertainty. I do not think, however, that this uncertainty, while destroying the obligation as a promissory note, would destroy it as a contract, provided it be made to appear that the note was intended to constitute a present obligation, and was supported by a valuable consideration.
Unquestionably an existing obligation based upon a past transaction would supply the element of a valuable consideration, but in my opinion the other element of an intention to constitute a present definite and certain obligation is utterly wanting. There must have been the creation of a vested right in the defendant, else the paper is testamentary in character and void.
As in said in Cover v. Steam, 67 Md., 449; 10 A., 231; 1 Am. St. Rep., 406:
"There must be terms employed to create a debitum inprasenti, though the solvendum may be in futuro, and even after the death of the obligor."
Consult Carter v. King, 11 Rich., 125; Godbold v. Vance,14 S.C. 459, note to 27 L.R.A. (N.S.), 308; 43 L.R.A. (N.S.), 785; 2 A.L.R., 1472.
The principle which distinguishes between a document as a will and as a contract is this: If the instrument passes a present interest, although the right to its possession and enjoyment may not accrue till some future time, it is a deed or contract; but, if the instrument does not pass any interest or right till the death of the maker, it is a will or testamentary paper. *Page 552
In Crawford v. McElvy, 2 Speers, 225, referring to the document there in question, the Court says:
"It cannot, however, in any point of view, claim any higher rank than a paper to take effect at Mrs. Phillips' death. That makes it testamentary, and having but a single witness to its execution, it is void as a will."
In Pitts v. Mangum, 2 Bailey, 588, it was held that a parol gift of a slave to take effect at the donor's death, he reserving the use during his life, was testamentary in character and void.
To the same effect is Ragsdale v. Booker, referred to inPitts v. Mangum and reported in a note to Jaggers v. Estes, 2 Strob. Eq., 343, at p. 348 (49 Am. Dec. 674), where the Court says:
"An essential distinction between a will and a deed is, that one is to take effect at the death; the other immediately."
In Jaggers v. Estes, 2 Strob. Eq., 343; 49 Am. Dec., 674, it is said:
"The distinction between a deed and a will is, that the former must convey an immediate interest at its execution, but the latter is quite the reverse; it is ambulatory, and passes no present interest or estate; it can only operate on the contingency and after the death of the testator."
To the same effect is McGinney v. Wallace, 3 Hill, 254;Welch v. Kinard, 1 Speers, Eq., 256.
This view is strengthened by two important circumstances: The preamble, written upon the same sheet, by the defendant, must of course be read as a part of the document. In it appears this statement: "John says if I get well, he will not deliver the note to Margaret andwill release me from the obligation;" that is, the obligation of the note. As already suggested, if Mrs. Caskey had intended thereby to create a definite obligation to compensate the defendant for his services, she would not have limited her obligation upon the note to the circumstance of her *Page 553 death; for if she owed him at all, the effectiveness of the obligation could not have been affected by her survival.
Again, the defendant testified that this clause was inserted by him, voluntarily, without the suggestion of Mrs. Caskey, for the reason:
"* * * She was sick and I thought that if she got wellshe might want to change it, and I voluntarily put that in there. * * * In case she did get well, I wanted her to see that I had given her an opportunity to fix it like she desired."
He has thus placed upon the provision an interpretation which absolutely concludes the question of its ambulatory character.
Both circumstances are entirely consistent with the idea of an attempted testamentary gift and inconsistent with that of a binding contract.
I do not contest the proposition that one may, upon a valuable consideration, agree in writing that a certain sum be paid to another at the death of the party so promising. As is said in the Caviness case,101 Ind., 500; 51 Am. Rep., 759:
"The only difference between this case and that of an ordinary promise to pay for services is in the stipulation as to the time and manner of making payment."
See, also, 8 C.J., 136.
So that, if it can be deduced from the document in question that Mrs. Caskey intended to create a definite and certain obligation to pay the defendant for his services, conditioned only that it should be paid at or after her death, I see no reason why the obligation should not be deemed valid and enforceable. But as I see it, it is impossible to draw this deduction from the paper. On the contrary, it shows upon its face that it was intended as a gift, and, according to the testimony of the defendant himself, intended to be ambulatory. *Page 554
As the Court holds in Youngblood v. Norton, 1 Strob. Eq., 122:
"Any act by which a decedent exercises a control in the disposition or distribution of property belonging to him at his death is, essentially, a testamentary act, and requires the formalities of a will."
Exactly what period his claim of $5,000 with interest extended over does not appear; but it does appear that in January, 1919, a little more than a year prior to the execution of the document, he borrowed from Mrs. Caskey $2,800, and gave his note for it, which under will was forgiven him. Nothing was taken into account in reference to it, in the questionable transaction of February 14, 1920, which is held by his Honor, the Circuit Judge, as a contract of settlement between the parties, and, notwithstanding the alleged crystallization of the indebtedness at that time, no change was made in the provision of the will for the surrender of that note to the defendant.
It is significant, too, that there is nothing in the document to indicate a settlement between them. If there had been, it would seem the natural thing to have provided for was that in consideration of the note the defendant should surrender his claim against her. According to his contention, she was bound, but he was not. He was free to accept the note or not as he saw fit.
Mrs. Caskey had, only three days before, executed her will. It bears every evidence of the most patient attention by Judge Hydrick to her many and complicated wishes. His character is a sufficient guaranty that she was capable of making a will. This after-written document, if allowed to stand, represents a codicil to that will, for it reduces by practically one-third the residue of her estate which constitutes the trust fund. The preamble indicates dissatisfaction with the will which Judge Hydrick had prepared, and an effort to change it by note, whereas that *Page 555 effect could be accomplished only by a codicil. To hold it invalid erects no bar to the enforcement of a claim by the defendant for services rendered to her; and I see nothing but justice in remitting him to the forum of a jury of his country to establish it.
The case of Caviness v. Rushton, 101 Ind., 500; 51 Am.Rep., 759, so strongly relied upon by the Circuit Judge and by the respondent, presents a very different situation. There, the case was decided upon a demurrer to the complaint, which after alleging that the plaintiff, at the special instance and request of the intestate, performed work and labor for him for 19 years, continued:
"That on the 13th day of October, 1882, she had a settlementwith William R. Rushton, then in life, for the services by her performed, and the amount found to be due[her] was $2,000, and the said Rushton then agreed to leave her by will the sum so found due her for services, and executed to her a written agreement, as follows: 'I promise Emily Caviness to give her two thousand dollars at my death, to take care of her children with, which she claims of my estate. She has been in my family nineteen years and a faithful servant and it is my will to her.'"
Of course, upon demurrer, these allegations were deemed to be admitted, and, thus presented, there could be no doubt but that they constituted a good cause of action. The plaintiff did not there, as here, rely solely upon the written instrument, but upon the facts as were alleged in the complaint which it is assumed she was prepared to prove. Naturally, and properly, the Court held:
"We are unable to perceive any infirmity in this paragraph [not in the written instrument] of the complaint. A promise supported by a valuable consideration is well pleaded, and the case is therefore unlike that of a voluntary promise to make a gift. The services were rendered in accordance with a precedent request, and after they were performed, a *Page 556 settlement was had and their value agreed upon. Not only were all the elements of a valid contract present, but there was a full recognition, by the settlement, of the right to compensation, and an agreement as to the amount. What the parties have thus agreed upon and adjusted, the Courts have no right to disturb."
When it is remembered that all of the testimony of the defendant as to the character and value of his services, and as to an agreement by Mrs. Caskey to compensate him therefor, has passed out of the case by the exclusion of the Circuit Judge, it will be appreciated what little application the Caviness case has to the present, in which the contract is gathered from the questioned document alone.
It is perfectly plain, from the allegations of the sixth defense of the defendant's answer, treated as a counterclaim, that the conception of extracting a contract from the questioned document is an afterthought, more a suggestion of his Honor, the Circuit Judge, than a contention of the defendant. It is as follows:
"Alleges that at the special instance and request of the testatrix, Mrs. Henrietta H. Caskey, he performed for her for a number of years useful and valuable services, both as attorney and otherwise, in the management of her large estate and business affairs, advising her, renting out her lands, collecting rents, looking generally after her landed estate, and in managing and assisting her in the management of her business affairs, taking a great deal of time, involving expense and work, and that such services were reasonably worth the sum of $5,000 up to the time of her death in 1920, so that her executors should be required to pay him therefor"; plainly a cause of action upon a quantum meruit which necessarily concedes the absence of a contract.
The truth is that the defendant and the Circuit Judge are at variance as to the ground upon which the recovery has been allowed. The counsel for the defendant say in their printed argument: *Page 557
"The answer sets up * * * (d) a claim by way of defense or by counterclaim upon quantum meruit, for services rendered and moneys expended, all evidenced by a written agreement to pay a reasonable sum or a fixed sum therefor."
The Circuit Judge bases his judgment upon the finding that the written instrument constituted a contract to pay $5,000, with interest from February 14, 1920.
These are entirely inconsistent theories; one an implied, and the other an express, contract.
As the decree is based entirely upon the theory of a contract extracted from the document in question, I do not consider it necessary to discuss the defendant's counterclaim. Clearly, his counterclaim is not available to him in an action to have an alleged contract annulled.
Another matter: The defendant claims to have been the attorney and confidential adviser of his sister. The universal rule is that, when under these circumstances he claims the benefit of a transaction between himself and his client, the burden is placed upon him to establish clearly the absolute bona fides of the transaction. I cannot conceive of circumstances which would make this rule more imperative than those in the present case; and in my opinion the defendant has signally failed in carrying the burden.
This opinion was submitted as a dissenting opinion to that of the Chief Justice, and, having been concurred in by Justices Blease and Carter (Justice Stabler not participating), it becomes the judgment of the Court.
Decree reversed.
MESSRS. JUSTICES BLEASE and CARTER concur.
MR. JUSTICE STABLER did not participate.