Summary of Scott v. First Nat’l of Baltimore, et.al., 224 Md. 462 (1961)
Facts: Scott, the husband, fell for another woman and informed his wife of his intent to leave. They entered into a separation contract. She received custody, the house, car, interest in bank trust, life insurance policy, and bank account. In a separate instrument, he transferred his expected inheritance in his father’s estate. He was to pay support for both until she remarried, then support for their daughter until she turned 21. He stopped making payments four years later. She received a $12K judgment. His father died and left his $490K estate to his two children.
Issue: Whether a separation agreement, made in contemplation of divorce, assigning the ½ expected interest in real estate within an inheritance estate for $1 and other consideration is valid under Connecticut law ?
Holding: Yes, a property settlement in contemplation of divorce is valid.
Procedure: Administrator Bank brought impleader action in Equity court, which issued a decree awarding the assignment to the assignor’s daughter. Md Ct App. Affirmed.
Rule: Where relief sought is specific performance of a contract, equity will enforce a contract only where it is fair, equitable, and supported by adequate consideration. Equity will enforce the assignment of expectancy after the death of an ancestor despite its invalidity at law.
Rationale: As the parties concede and stipulated that Connecticut law, the place the instrument was executed, is controlling. Knowledge by the ancestor of the separation agreement is not required as a necessity for enforceability. An agreement to assign an expectancy is enforceable where it is fairly made on adequate consideration, without oppression or unjust advantage being taken of the heir. Just as in any other contract the parties may acquire or surrender their legal rights as consideration. The adequacy of that consideration is material only as to an element of fraud or undue influence. There is no Conn. case law indicating this agreement should be unenforceable because it lacked an equivalent consideration. Ms. Smith assumed the burden and expense of raising their daughter, and the liability for his unpaid debts. Thus, there was adequate consideration. Furthermore, there is no claim of fraud or undue influence. The lower ct made no finding that the agreement was unfair or inequitable, and the husband had opportunity to seek advise prior to entering into the agreement.