## Facts

- Plaintiffs bought Nevada real property (Granrud Garden Apartments) from John Granrud, financing part of the price with a second deed of trust payable to Granrud.
- In 1954, Granrud met plaintiffs in Nevada and orally promised that if plaintiffs refinanced and made a substantial payment, he would provide by will that any remaining purchase-money debt at his death would be cancelled.
- Plaintiffs relied on the promise, obtained a new loan secured by a new first deed of trust, paid off the prior first deed of trust, and paid Granrud $13,114.20, leaving a remaining balance secured by a new second deed of trust.
- Granrud used the funds (deposited in California) to purchase a trailer park; plaintiffs also incurred refinancing costs.
- Granrud died domiciled in California in 1956; his California-probated will did not cancel the remaining debt.
- Plaintiffs continued payments to the executrix under protest and sued in California for cancellation of the note and related relief.

## Issues

1. Whether California’s statute of frauds for contracts “to make a will” or “to devise or bequeath” property bars enforcement of an oral promise made and performed in Nevada in connection with a Nevada land transaction.
2. Whether the agreement should be characterized as a testamentary contract governed by California probate-related policy, or as a commercial contract concerning debt/land governed by Nevada law.

## Decision

- The California Supreme Court reversed the judgment for the executrix and remanded.
- The court held that Nevada law governed the enforceability of the oral agreement because it was made and intended to be performed in Nevada as part of a Nevada land transaction.
- California’s special statute-of-frauds provision for contracts to make wills did not apply to invalidate the agreement in these circumstances.
- Under Nevada law, as construed by the court, the agreement was not barred by the statute of frauds, permitting plaintiffs to pursue relief consistent with the contract.

## Legal Principles

- In multistate contract disputes, the forum may decline to apply its statute of frauds to defeat a contract valid under the law of the state where the contract was made and performed, especially when doing so would frustrate the parties’ justified expectations.
- A promise to provide testamentary cancellation of a debt, when made as part of a bargained-for exchange in a commercial transaction, may be treated as a contract connected to the underlying transaction rather than as a gratuitous testamentary undertaking subject to specialized local probate rules.
- A later change in domicile and forum of probate does not, by itself, justify retroactive application of the forum’s special statute-of-frauds rule to invalidate an agreement centered in another state.

## Conclusion

Because the oral promise was made and relied upon in a Nevada land refinancing transaction, Nevada law governed its validity, and California’s statute of frauds for contracts to make a will did not bar enforcement; the case was remanded for further proceedings consistent with that choice-of-law ruling.


Bernkrant v. Fowler, 55 Cal. 2d 588 (Cal. 1961)