Facts
- In 1948, while domiciled in Connecticut, Wilmer Scott and Grace Scott executed a written separation agreement anticipating divorce that settled property and support obligations.
- As part of that agreement, Wilmer executed a sealed assignment transferring one-half of his expectancy in his living father Thomas A. Scott’s estate to his minor daughter, Virginia Scott.
- The assignment recited $1 consideration; Grace also undertook significant financial responsibilities for Virginia’s support under the separation agreement.
- A Nevada divorce decree later issued; it incorporated some separation-agreement provisions but did not expressly incorporate or mention the expectancy assignment.
- Thomas A. Scott, then living but mentally incompetent at the time of the assignment, died in Maryland in 1958, leaving an estate of about $490,000.
- The estate administrator, First National Bank of Baltimore, faced competing claims by Wilmer (seeking his share outright) and Virginia (seeking enforcement of the assignment).
- Wilmer challenged the assignment as invalid because it involved a mere expectancy, allegedly lacked adequate consideration, and allegedly merged into the divorce decree.
Issues
- Whether the validity and enforceability of the expectancy assignment were governed by Connecticut law.
- Whether an assignment of a mere expectancy in a living ancestor’s estate is enforceable in equity after the ancestor’s death when supported by fair and adequate consideration.
- Whether the assignment failed for lack of consideration or unfairness.
- Whether the separation agreement and assignment were extinguished by “merger” into the Nevada divorce decree, barring independent enforcement.
Decision
- The Court of Appeals of Maryland affirmed the trial court’s decree directing distribution consistent with the assignment.
- Connecticut law governed because the separation agreement and assignment were executed by Connecticut domiciliaries in Connecticut.
- Under Connecticut law, although a mere expectancy is not assignable at law, equity will enforce a fair, supported assignment once the expectancy ripens into a vested interest at the ancestor’s death.
- The consideration was not limited to the $1 recital; the separation agreement’s mutual obligations, including Grace’s substantial support undertakings, supplied adequate consideration and showed fairness.
- The merger argument did not defeat enforcement; it was not properly preserved and, in any event, did not eliminate the assignment’s enforceability.
- The ancestor’s knowledge or consent to the assignment was not required for equitable enforcement.
Legal Principles
- Choice of law for a separation-agreement assignment is determined by the place and parties’ domicile at execution when those contacts predominate.
- A mere expectancy in a living ancestor’s estate is generally not assignable at law, but equity may enforce an assignment after vesting if the transaction was fair and supported by valuable consideration.
- Consideration and fairness may be assessed from the entire separation agreement, not solely from nominal consideration stated in the assignment instrument.
- A divorce decree’s incorporation of some agreement terms does not necessarily extinguish independent contractual or equitable enforcement of other bargained-for provisions.
- Equitable enforcement of an expectancy assignment does not require the ancestor’s knowledge or consent.
Conclusion
The court held that Connecticut law controlled and required equitable enforcement of Wilmer Scott’s separation-agreement assignment of half his inheritance expectancy to his daughter once the ancestor died and the interest vested, because the assignment was part of a fair, supported marital settlement and was not defeated by the later divorce decree.