## Facts

- Bertha C. Ellsworth, age 71+, applied for admission to a charitable home for the aged operated by the Methodist Home for the Aged.
- Upon admission, Ellsworth signed the Home’s standard-form agreement and paid $10,779.60 described as given “without reservation” for the Home’s charitable work.
- The agreement provided a two-month probation period for both parties to determine suitability.
- The agreement stated that if it was “advisable to discontinue her stay” during probation, her “gift,” less $80 per month, would be refunded.
- Ellsworth died one month after admission, during the probation period.
- The estate’s administrator demanded a refund under the probation/refund clause, less the $80 monthly amount and funeral expenses advanced by the Home; the Home refused, asserting the payment was an irrevocable, vested gift.

## Issues

1. Whether the admission agreement created an immediately vested, irrevocable gift to the Home upon admission.
2. Whether the probationary refund clause applied when the resident’s stay ended by death during the probation period.
3. How ambiguity in the agreement should be resolved given the Home drafted the standard-form contract.

## Decision

- The Kansas Supreme Court affirmed judgment for the estate.
- The court held Ellsworth did not attain permanent “life membership” because she died before completing the two-month probation period.
- The court construed “discontinue her stay” to include termination by death during probation, triggering the contractual refund obligation.
- The Home was required to refund the payment less $80 for one month and $235 advanced for funeral expenses.

## Legal Principles

- Ambiguous contract language is construed most strongly against the party that prepared the instrument (contra proferentem).
- If a contract is susceptible of more than one construction, it should be construed to effect the parties’ intent at the time of execution.
- Where ambiguity exists, intent is measured by what a reasonable person in the position of the non-drafting party would have understood under the circumstances.
- A contract must be construed as a whole; isolated phrases cannot control when other provisions qualify or condition the apparent meaning.
- “Gift” terminology does not negate express contractual conditions requiring refund upon specified events, including failure to complete a probationary period.

## Conclusion

The court treated the transaction as a conditional life-care admission contract rather than an irrevocable gift, and held that death during the two-month probation discontinued the stay and required a refund under the agreement, with stated deductions.


First Nat'l Bank of Lawrence v. Methodist Home for the Aged, 181 Kan. 100, 309 P.2d 389 (1957)