Williamson v. First National Bank of Williamson

In view of the vigorous dissent of Judge Hatcher, who wrote the opinion, the position of the court should be more fully stated.

As the Court of Appeals of Kentucky said, in Daniels v.Banister, 146 Ky. 48, 141 S.W. 393, "This is not a case where the husband took advantage of the youth and inexperience of a woman whom he intended to marry, concealed the character and kind of his property, and persuaded her to enter into a contract whereby she relinquished all claims to his property in consideration of an insignificant settlement upon her." In the language of the learned court below, "A review of the cases pertaining to antenuptial contracts, which have reached the highest courts of the land, leads the court to the conclusion that the decision in each case was based upon the particular facts of that case."

The rule thus stated is firmly established by a general concurrence of authority. "A court of equity, when called upon to consider an antenuptial contract, should examine and construe the instrument in the light of the circumstances surroundingthe particular case, and enforce or annul the agreement according to the facts disclosed in the case before it. No arbitrary rule can be laid down which would apply to all antenuptial arrangements." In re Magg's Estate, 119 Neb. 237,228 N.W. 537; Rieger v. Schaible, 81 Neb. 33, 115 N.W. 560.

"As a general rule, * * * if the provision made for the wife is unreasonably small in proportion to the estate of the husband, this fact alone raises the presumption of a fraudulent concealment by the husband, and casts the burden upon him or those claiming in his right to prove that the wife had full knowledge of all that materially affected the contract. But themere fact that the provision made for the wife is greatlydisproportionate to the extent of the husband's estate will notrender the contract invalid where it appears from all theevidence that the contract was reasonable under thecircumstances and that no actual fraud or deceit was practicedupon the wife." 19 A. E. Ency. Law 1228.

In Yarde v. Yarde, 187 Ill. 632, 636, 58 N.E. 600-601, in which a marriage settlement was sustained, the court said: "It may be conceded that, if the provision made for appellee in the contract and the extent and value of Mr. Yarde's property were alone considered, there was such a disproportion between the two as to call for affirmative proof on the part of appellants to overcome the presumption of concealment and unfairness; but from a consideration of all of the competent evidence in the record we are of the opinion that the contract was not really unfair to appellee, and that, before entering into the contract sought to be set aside, appellee had knowledge of the character and extent of, substantially, all of Mr. Yarde's property, or, at all events, that the circumstances proved were such as tocharge her with such knowledge."

Hence, in this case, whether the provision for the plaintiff in the contract is so disproportionate to the interest she would otherwise receive in the estate of Wallace J. Williamson as to create a presumption of concealment and unfairness, on his part, depends upon the admitted and proven facts and circumstances.

Williamson, a native of Pike County, Kentucky, although unlettered, possessed sound business judgment. He was also thoroughly honest and imbued with exemplary business integrity. After his first marriage, he settled in the city of Catlettsburg, Kentucky, where his four children, Ben M., (late U.S. Senator from Kentucky), Rush F., Fannie, and Tillie, were reared. In 1884, after the death of his first wife, he engaged in the timber business on Pigeon Creek in Logan (now Mingo) County, West Virginia, where he soon became acquainted with Ellen Blair who was then about fifteen years of age. In 1885, he married his second wife who cared for the children in the home at Catlettsburg where she lived until her death in 1912. About 1890, Ellen Blair came with her brother to live in the logging camp maintained by Williamson at the mouth of Pigeon Creek, fifteen miles west of the present site of the city of Williamson. The timber business kept him a great part of the time at Pigeon Creek, then practically a wilderness. Hence, the continuation of an illicit relation between him and Ellen Blair, which, according to the evidence, began about the time she took up her residence at his logging camp.

While engaged in timbering at Pigeon Creek, Williamson purchased a large tract of land in the county and laid out thereon the city bearing his name, which he later promoted and developed through Williamson Mining Manufacturing Company, a corporation. He assisted in the promotion of the first bank in the municipality, known as the Bank of Williamson, and later, organized the First National Bank of Williamson, of which he was president from its organization in 1903 until 1928. He later organized and managed the South Williamson Land Company through which he promoted and developed South Williamson, Kentucky, connecting it with Williamson, West Virginia, by a bridge, across Tug River, owned and operated by Kentucky West Virginia Bridge Company, which he also organized and managed. He dedicated sites for the courthouse, jail, hospitals, schools, water plants and churches in the city of Williamson.

His personal property at the time of his marriage to Ellen Blair consisted of 680 of 1,000 outstanding, shares of First National Bank of Williamson, 1264 of 1690 outstanding shares of Williamson Mining Manufacturing Company, 455 of 500 outstanding shares of South Williamson Land Company, and 238 of 250 outstanding shares of Kentucky West Virginia Bridge Company. His real estate was situate on Pigeon Creek and in and around the city of Williamson. Plaintiff realized his predominant ownership in the several corporations. When asked whether she had been informed that he was a rich man, she said:"I knew he had a little more than anyone else, or I thought hehad * * *. I knew he owned some land and had a bank and thingslike that." One of her witnesses (N. G. Rosenfeld), who settled in Williamson some years after the marriage, testified that immediately upon his arrival in the city he was informed that Wallace J. Williamson was the only millionaire in the community. Williamson had made his fortune in and around the city of Williamson while living with Ellen Blair. She says he always informed her of his losses or reverses in business; and, according to her testimony, she at least partially supervised the logging business in his absence. She also takes credit for aiding in the purchase of the site for the city of Williamson by advising him, through a special messenger, that the property was for sale. Notwithstanding her want of education, she, nevertheless, possessed ample intelligence and business acumen. She not only conducted her own business affairs intelligently, but served as administratrix of her father's estate; and, according to her testimony, decided to bring this suit and engaged three prominent attorneys for the purpose, without consulting any of her friends or relatives. Some years after her marriage, she advised the compromise of a personal injury claim asserted by one of her brothers against the Norfolk Western Railway Company, and applied the proceeds from the settlement to the construction of a residence for him. The record discloses a number of conveyances of real estate to and from her, including a conveyance by her of right of way to Norfolk Western Railway Company in 1903 for a consideration of $3,600.00. These are some of her business transactions incidentally appearing in the record.

January 18, 1915, three years after the death of his second wife, Wallace J. Williamson conveyed to Ellen Blair real estate in the town of Naugatuck which (with a few small lots previously owned by her) she proved by one Huff Waldron (who lived near the property) to have been worth at that time from $30,000.00 to $35,000.00. At the same time, she executed a writing releasing him of all claims that she might have against him, except a note of $3,500.00 for borrowed money. In May, 1916, during a serious attack of pneumonia, he was attended by Miss Clara G. French, a trained nurse. Upon recovering sufficiently to travel, he went to Ashland, Kentucky, to the home of one of his daughters, and then, accompanied by a daughter, son, and Miss French, to Denver, Colorado, for treatment. On or about October 1, 1916, soon after his return to Williamson, he took with him Dr. Tunis Nunemaker and Alex Bishop (a former sheriff and member of the county court of Mingo county) to the home of Edna May Williamson, sister of Ellen Blair, to witness a conference between himself and Ellen to decide whether he should make further provision for her and end their relations or come to some agreement with her with a view to marriage. Immediately after this conference, lasting several hours, in the absence, for the most part, of Nunemaker and Bishop, Williamson and Ellen Blair, in the presence of each other, announced to Nunemaker and Bishop that they had settled their differences, she stating further: "I am not to have or interfere with any of his property and he is not going to interfere with any of mine; we will both control our property separately." From this and other evidence, it is obvious that Wallace J. Williamson and Ellen Blair came to an agreement at that conference to marry upon condition of a marriagesettlement. Thereafter, Williamson employed S.D. Stokes, a local attorney, to draft a formal contract (evidently) in conformity with and pursuant to the informal oral agreement. Later, the contract, as drawn by Stokes, was redrafted by Judge John F. Hager of Ashland, Kentucky, and mailed by him as redrafted from Ashland to Mr. Williamson, at Williamson, December 23, 1928.

The plaintiff proved by A. C. Pinson, a subscribing witness to the contract, that on the day before it was executed, Williamson called the witness to his office to discuss with him the advisability of the marriage, at the time requesting Pinson to appear, when called, to witness the execution of the contract, which Williamson then explained to Pinson,stating that it had been agreed to by him and Ellen. This same witness, at the instance of plaintiff, also testified that immediately before the agreement was signed by the parties, in response to the proposal of the notary to read the instrument aloud, Williamson stated in the presence of Miss Blair and with her apparent acquiescence and approval, "That they had goneover these papers (the contract and deed of exchange) carefullytogether and they both knew the contents and it was notnecessary to read them." G. R. C. Wiles, a prominent attorney, who endorsed his name to the contract as a subscribing witness, and a notary, taking the acknowledgment of the parties thereto, testified that it seemed to him everybody in the city of Williamson knew before the marriage that Mr. Williamson and Ellen Blair "were about to get married; that they had made an antenuptial agreement and she was to get $20,000.00 when he died." The existence of such report and understanding among the people in the city of Williamson, immediately before the marriage, is in no way denied or controverted on behalf of plaintiff. The interest thus created was so pronounced that some of the officers of Williamson's bank feared that the marriage would injure its business. Wiles testified further that the substance of the contract was discussed in the presence of Ellen Blair immediately before its execution, and that she seemed pleased and to understand its provisions. Dr. Nunemaker, the other subscribing witness, testified that immediately before the contract was executed, Williamson, in response to an inquiry by Wiles as to whether the parties desired the contract read, said that it need not be read asboth parties had gone over the instrument, were familiar withits terms and perfectly willing to sign it. He testified further that Wiles briefly stated the terms of the agreement and plaintiff seemed to thoroughly understand the transaction. The one thousand dollars cash payment provided for in the contract was paid by check which she cashed the following day. The contract was recorded in Mingo county, West Virginia, August 19, 1918, and in Pike county, Kentucky, September 11, 1918. According to the testimony of a number of witnesses, plaintiff kept a carbon copy of the agreement and often referred to it as her "marriage contract."

After the marriage, Williamson built, without charge, a residence costing $4,000.00 or $5,000.00, on property belonging to her in South Williamson, which he had exchanged with her for the Naugatuck property.

The marriage was one "of convenience only." Nancy Jane Evans, as a witness for plaintiff, testified that Williamson told her some weeks before the marriage "he could have made" Ellen his second wife, "but she was uneducated and he didn't think she was a proper companion for his daughters." William Damron, deputy clerk of the county court who issued the marriage license, at the instance of plaintiff, testified that Williamson at the time requested him to keep the matter a secret, stating that he was going to marry Ellen, notwithstanding the vigorous protest on the part of his family, because "he thought he owed it to her." The marriage was deferred until the marriage settlement could be executed. The minister who performed the ceremony came from his home in the country several days before, awaiting the pleasure of the parties. The marriage resulted from his choice of one of the two alternatives (disclosed by him to Alex Bishop and Dr. Nunemaker): (1) of making further provision for her and terminating their relations, or (2) of marrying her upon condition of a marriage settlement.

Wallace J. Williamson at the time of the marriage was practically an invalid and remained so during the rest of his life. Miss French, who had been temporarily discharged, returned a month after the marriage, and remained with him until his death. She says that plaintiff assisted her very little in caring for Mr. Williamson. He had four children and five grandchildren at the time of the marriage. In view of this fact, the condition of his health, his advanced age and his previous transfers of valuable properties to her, he was naturally unwilling to enter into a marriage engagement with Ellen Blair except upon condition of the marriage settlement. The property he was giving her with that she already possessed would provide her a comfortable support. She was, under the circumstances, entitled to no more.

Plaintiff denies the execution of the release of January 18, 1915, and the marriage settlement of January 2, 1917, and knowledge of either transaction; says that nothing of importance was discussed between her and Mr. Williamson at the conference attended by Bishop and Dr. Nunemaker; and goes so far in feigning ignorance as to claim that she never heard of the contract until after Williamson's death, although it had been spread upon the public records of Mingo county, West Virginia, and Pike county, Kentucky, about 18 months after its execution, and was a topic of general discussion in the community before and after the marriage. Her testimony, in so far as it deals with alleged conversations between herself and her deceased husband is inadmissible; and in view of the admitted and proven facts and circumstances and the numerous contradictions of her statements on material issues by many disinterested witnesses, the remainder of her self-serving testimony is worthy of little, if any, credence.

Those advocating her cause mistakenly ignore the cardinal rule governing marriage settlements, already pointed out, by overlooking the admitted facts and circumstances in the case, clearly establishing the fairness and reasonableness of the contract, and the proven fact that Wallace J. Williamson entered into the marriage engagement solely upon condition of the marriage settlement. Hence, in selecting the vital issue in the case, they would consider merely the pecuniary difference between the contractual provision and her reasonable expectancy under the statute. They say this difference is so great as to create the presumption that she was induced to enter into the contract as the result of fraud practiced upon her by her deceased husband, which can be overcome only by proof that she knew, at the time of executing the agreement, the character, extent and value of his property and the nature and value of her reasonable expectancy in his estate under the statute; that defendants have not sustained the burden of proof thus imposed upon them; and that a decision in her favor necessarily results.

Whether the provision in an antenuptial contract for the benefit of the prospective wife is grossly disproportionate to her reasonable expectancy in the estate of the intended husband depends upon the fact and circumstances of the particular case. In Suhor v. Gooch, 244 F. 361, an antenuptial contract, giving the woman, during Widowhood, "the interest" on fifty thousand dollars of the man's estate, valued at two hundred and forty thousand dollars, was upheld as a reasonable settlement, in view of the facts and circumstances of the case. In an able opinion, written by the late Judge Charles A. Woods of the Fourth Judicial Circuit, it is said: "What is gross disproportion (between the marriage settlement and the statutory expectancy) depends upon all the circumstancesappearing at the time of the making of the contract. It is notto be inferred from the mere fact that the settlement isconsiderably less than it turned out the wife would have gotbut for the settlement, any more than gross excess is to be inferred from the fact that the settlement gave considerably more than it turned out the wife would have got but for the settlement. If that were the test, settlements would be of little, if any, value."

In Smith's Appeal, 115 Pa. 319, 8 A. 582, a marriage settlement giving the prospective wife, during widowhood, the income from $12,500.00 was upheld, although the husband was worth $179,000.00 at the date of the contract, and $391,000.00 at his death. At the time of the marriage, the woman was a widow, forty-three years old, and the man a widower, fifty-two years of age, with a family of six children. In the opinion of the court it is stated: "We cannot say that the provisions made for her (the wife) was so disproportionate to his means as to create a presumption of fraud and concealment. She was a second wife, past middle age, and her husband had a large family of children living. She was not the mother of his children, nor had she aided him in the accumulation of his fortune. Situated as the appellant was at that time, she probably thought that a provision of about $1200.00 a year after her husband's death was reasonable. At any rate, she agreed to it, and having enjoyed the benefits of the contract, she cannot now repudiate it for no better reason than that she would like to have more."

In Neely's Appeal, 124 Pa. 406, 16 A. 883, 10 A.S.R. 594, a marriage settlement giving the wife $600.00 annually for life out of an estate of more than $30,000.00, was upheld. The woman was a spinster, aged fifty years, owning property of the value of $12,000.00. In the opinion, the court said: "When weconsider the question of the adequacy of the provision, we mustregard all the circumstances surrounding the case. This was a marriage between persons well advanced in years. The appellant was not the mother of his children, nor was she likely ever to bear him any. She had not in any way aided him to accumulate his fortune. She had $12,000.00 of her own, all of which he relinquished. In addition, he gave her $600.00 per year during her life. What claim had this old woman, marrying this old man,to come in and take one-third of his estate away from hischildren, and yet retain the whole of her own? She would, of course, have had a legal claim had he married her without an antenuptial contract; but she had no claim which made it inequitable or unjust in him to insist upon the execution of the contract before the marriage. It would have been a wrong tohis own blood had he not made some such arrangement. It was nota liberal provision, but it was adequate. She retains all of her own estate, and has now, in addition, $600.00 per year, besides a comfortably furnished home. Surely her last condition is better than her first. There is a marked distinction between this case and that of a young couple just entering upon the voyage of life. In the latter instance they grow up together; the wife is the mother of his children; she shares his burdens in his early struggles, and often by her thrift and economy materially aids him in the accumulation of his fortune. To cut off such a wife with a mere support during life would be as unjust as it would be ungenerous. But when a man in the decline of life, who has been twice a widower, for the third time leads a woman to the altar, and an elderly woman at that, it is very different. In this case the wife reaps where she has not sown, and if she is provided with a comfortable support after her husband's death she has no just cause of complaint. In any event, if she is dissatisfied, she ought to refuse to sign the contract, and not accept its benefits during her husband's life, and then seek to repudiate it after his death."

In Wellington v. Rugg, (Mass.) 136 N.E. 831, where the marriage settlement gave the woman $5,000.00 out of an estate of $400,000.00, the court said that notwithstanding the confidential relation between the parties to an antenuptial contract (by reason of a prior marriage engagement), the simple failure of the husband voluntarily to disclose the value of his property is not actionable fraud where, so far as appears, the wife could have made inquiry or such investigation as she saw fit.

In Stevens v. Stevens, (Ky.) 205 S.W. 573, the court sustained a marriage settlement between a man, eighty, and a woman from thirty to forty, giving her $1,000.00 out of his estate, at the time estimated to be worth from $30,000.00 to $40,000.00, saying, "If decedent's purpose in securing thecontract was to satisfy his children, it was not in any wayunworthy, nor did it in any way affect the validity of thecontract. Contracts of this kind are usually made for some such purpose. So long as fraud or undue influence are not used uponthe wife, the contract is valid and binding."

In Gaines v. Gaines, 163 Ky. 260, 173 S.W. 774, the court upheld a marriage settlement between a man 73 and a woman 47, giving her $5,000.00 of his estate valued at $150,000.00. In the opinion it is said: "The age, position in life, and the circumstances surrounding these parties all tend to show that each of them was capable of protecting his interest. * * * It was not, we may assume, a love affair between this couple, in the ordinary meaning of these words, but was rather a marriage of convenience. Mrs. Gaines was doubtless glad to exchange the drudgery and confinement of keeping a small postoffice for the position of wife of the richest man in the community, and Mr.Gaines no doubt thought that, upon entering into a marriagerelation at so late a period in his life, it would not be fairto his children, unless some property arrangements were madesuch as would give to his wife a fair income, and yet not take from his wealth, in the creation ofwhich she had no part, the large sum the law would give her inthe absence of a contract."

Most, if not all, of the cases cited involved prior marriage engagements. The rigorous rule governing in such cases, and stressed in behalf of plaintiff, presupposes a prior marriage engagement between the parties, and certainly should not operate with the same degree of strictness in a case like this where the marriage engagement arises out of, and serves as the consideration for, the marriage settlement. The unwillingness of a man to enter into a marriage engagement without a marriage settlement should prompt the woman to independent judgment. She is thus put upon inquiry, and cannot, as in the case of a prior marriage engagement, remain passive under the assumption that the marriage settlement is being made for her benefit. "The reason for the rule is that while parties are engaged to bemarried the relation is confidential, and the intended wife is supposed to place confidence in her husband." 1 Schouler, Domestic Relations, (6th Ed.), p. 521. But conceding that the rule applies to a marriage settlement which is a part of the marriage agreement as here and that there was a confidential relation between plaintiff and Wallace J. Williamson at the time of the antenuptial contract, she is not, under the facts and circumstances, entitled to relief. As already stated, a reputable Witness testified at her instance that Williamson advised him before the execution of the formal contract that the settlement had been agreed to; and that she signed and acknowledged the writing with apparent satisfaction after Williamson stated in her presence that he and she had gone over the paper carefully together and understood its contents. Defendants show further, without denial, that the general public were given advance information of the arrangement between the parties. Her several brothers and sisters, as well as friends, living in the community (including her brother Frank, who says he "helped her trade"), doubtless would have voluntarily advised her against the undertaking had they thought it an unwise bargain. She, as an intimate of Williamson, could not have overlooked the growth of his fortune in the vicinity, and is, therefore, charged with such knowledge. She admits she thought he had more property than any one else.

Slingerland v. Slingerland, 132 N.W. 326-328, (involving an antenuptial contract between a man of mature years and a young woman who was pregnant by him), so firmly relied on in the dissent, differs from this case as follows: (1) The suit in that case was brought in the lifetime of the husband after he had failed for twenty years to comply with his promise to pay consideration for the contract "within a reasonable time after the marriage." (2) The woman there was practically penniless and had borne the man four living children. In this connection, the court said: "By this contract, if valid, defendant had it within his power to leave his wife practically penniless at his death, and without the means to support the children she might bear him. She has been his wife for 20 years, and four children of the marriage are living. The power to cast her and them from him, without a share of his great wealth, is abhorrent to every sense of justice, and equity should not be powerless to grant relief." Here, there are no children and none could reasonably have been anticipated at the time of the marriage. The woman in this case has an estate, including the twenty thousand dollars to be paid under the contract, of an estimated value of fifty to eighty thousand dollars. She has told others that she is worth $75,000.00. M. Z. White, a prominent business man of Williamson, who is familiar with her property, says it is worth from $70,000.00 to $80,000.00. She owns the home in which she lives and receives monthly $325.00 rental from her other real estate. The man she married maintained her in comfort during their unmarried and married relations, and bequeathed her at his death, the furnishings of a well equipped home, a Lincoln automobile, and other personal property which she still retains. (3) The contract in that case followed a marriage engagement; the contract here was a condition of the engagement. (4) The woman there was under great mental stress in a desire to conceal her shame and legitimatize her unborn child. The woman in this case does not seem to have experienced any moral qualms because of her previous improper relations with the man who was consenting to marry her upon condition of a marriage settlement, and the only reason she gives for preferring the marriage to a continuance of those relations was her fear, in the latter alternative, of personal violence at the hands of one of his sons. (5) The woman there was young and inexperienced and "had no person of business judgment and experience with whom to advise in reference to such contract." The woman in this case was of mature age and seasoned business judgment, and had relatives and friends to advise her. (6) The contract in that case was known only to the parties and the attorney, representing the man, who prepared the writing. In this case, the agreement reached between the parties was generally known in the community before its execution. (7) In that case, the woman knew only in a general way that the man was wealthy. Here, the woman lived with the man while he was acquiring his fortune in the same community. She could not, under the circumstances have failed to realize the extent of his wealth, and does not even claim that she thought it was less than its actual value. She knew, or at least thought, he was worth more than anyone else. She does not claim he was richer than she thought. On the contrary, her evidence indicates, as is usual in such case, that she had overestimated his wealth. Expert accountants, testifying for plaintiff, fixed a theoretic valuation of Williamson's personal property, at the date of the contract, of $1,036,000.00. The valuation of his real estate as of that time was also, at best, a mere estimate. His estate, which had greatly increased during the intervening years, upon his death, was appraised at $824,911.96. (8) In that case, the man did not agree to the marriage simply to make "reparation for the wrong done" the woman. "He was making her his wife, the companion of his declining years, the mother of his child." Here, the man, an invalid in old age, was marrying the woman because "he thought he owed it to her."

It is said that the agreement announced by the parties at the termination of the conference attended by Bishop and Dr. Nunemaker is not sufficiently definite as an antenuptial contract and is further ineffectual because of the statute of frauds. This is all very true; but it is equally true that the facts and circumstances show the written contract (reciting that it was made "upon negotiations for" marriage) to have been prepared and executed pursuant to and in conformity with the informal agreement.

Marriage settlements are formed as promoting providence and domestic happiness especially where the husband has other claims on his bounty. "Public policy does not inhibit settlements between persons contemplating marriage. Such agreements are ordinarily regarded with favor, as tending to adjust family disputes, and as making for the welfare of the parties. Therefore, the courts will seek to uphold them, and, in order to do so, will, if necessary, strain to the uttermost the interpretation of equivocal words and conduct." 1 Schouler, Domestic Relations (6th Ed.), p. 491. "Antenuptial contracts have long been regarded as within the policy of the law, both at Westminister and in the United States. They are in favor of marriage and tend to promote domestic happiness, by removing one of the frequent causes of family disputes, contentions about property, and especially allowances to the wife. Indeed we think it may be considered as well settled, at this day, that almost any bona fide and reasonable agreement, made before marriage, to secure the wife in the enjoyment either of her own separate property, or a portion of that of her husband whether during the coverture or after his death, will be carried into execution in a Court of Chancery." Stilley v. Folger,10 Ohio 610, 649.

In view of all the facts and circumstances, I am clearly of opinion that the contract is fair and reasonable and should be enforced.

Judges Lively and Woods concur in this note.