Case brief · Trusts and Estates

UNTHANK v. RIPPSTEIN Case Brief

Supreme Court of Texas • 1964
Holding checked against the opinion
386 S.W.2d 134 Trusts and Estates Contracts
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Case Brief Summary & Legal Analysis

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tl;dr: Rippstein sought to enforce Craft’s written promise of monthly payments against his estate. The court held that the writing lacked sufficiently certain intent and property identification to create a trust and did not support a contractual obligation. It reversed the appellate judgment and affirmed summary judgment for the executors.

Legal Significance: An unenforceable promise of future gifts does not become a trust without sufficiently certain trust intent and subject matter. The decision also limits the contention that written instruments import consideration: a writing that does not purport to be a contract cannot impose contractual liability on that basis.

Case Facts & Court Holding

Key Facts & Case Background

Three days before his death, C. P. Craft wrote a personal letter to Mrs. Iva Rippstein. He discussed plans to visit the Mayo Clinic later rather than anticipating early death. A marginal notation promised $200 in cash during the first week of each month for five years. Craft did not expressly identify all his property or any specific assets as trust property. Rippstein unsuccessfully sought probate of the writing as a codicil. She then sued Craft’s executors for matured installments and a declaration requiring future payments. The trial court granted the executors summary judgment. The Court of Civil Appeals reversed and rendered judgment for Rippstein, concluding that Craft had established a voluntary trust. Rippstein argued that the notation subjected his estate to a trust and that less than ten percent of his property would satisfy the payments, leaving the balance available to him. Alternatively, she argued that the writing imported consideration and that the executors had failed to prove its absence.

Court Holding & Legal Precedent

Issue: Did Craft’s marginal notation create an enforceable trust or impose a contractual obligation on his estate because the writing purportedly imported consideration?

The court reversed the Court of Civil Appeals and affirmed summary judgment for the executors. Craft’s notation expressed only an unenforceable intention to make future gifts, with insufficient certainty of trust intent or trust property. Because the notation did not purport to be a contract or bilateral agreement, the executors’ failure to prove want of consideration did not establish contractual liability.

IRAC Legal Analysis

Legal Issue

Did Craft’s marginal notation create an enforceable trust or impose a contractual obligation on his estate because the writing purportedly imported consideration?

Conclusion

The decision requires sufficiently certain trust intent and subject matter before a promise of future gifts can be enforced as a trust. It also confines the consideration argument to writings of a contractual character.

Legal Rule

A trust requires sufficient certainty concerning the creator’s intention and the trust’s subject matter; an unenforceable promise to make future gifts cannot substitute for a trust declaration. The court identified McMurray v. Stanley, 69 Tex. 227, 6 S.W. 412 (1887), and Fleck v. Baldwin, 141 Tex. 340, 172 S.W.2d 975 (1943), as stating controlling tests. Article 27 does not make every written instrument import consideration regardless of its character; a writing that does not purport to embody a contract cannot impose contractual liability merely because the opposing party has not proved want of consideration.

Legal Analysis

The court rejected Rippstein’s proposed inference that Craft had placed his estate in trust. The notation did not sufficiently show an intention to restrict Craft’s further dominion over his property to a fiduciary capacity. Nor did it expressly designate all his property or any specific portion as trust property. Calculating the amount needed to fund the payments could not supply the missing certainty.

The precedents Rippstein invoked involved established trust intent. Monday v. Vance, 92 Tex. 428, 49 S.W. 516 (1899), concerned property expressly deeded in trust; its treatment of the remaining interest did not resolve uncertainty about whether a trust existed. Estes v. Estes, 267 S.W. 709 (Tex. Com.App.1924), applied the rule that a trustee takes only the interest required by the trust’s purposes, but the testatrix’s intention was certain. McMurray v. Stanley found trust intent in the whole will and treated property remaining at the husband’s death as ascertainable. Those decisions did not justify implying a trust from Craft’s promise.

The court also rejected Rippstein’s consideration argument. Harris v. Cato, 26 Tex. 338 (1862), explained the statutory elimination of sealing formalities for a class of contracts. Wright v. Robert & St. John Motor Co., 127 Tex. 278, 58 S.W.2d 67 (1933), recognized that Article 27 incorporated earlier statutory provisions. Nevertheless, Article 27 did not extend a presumption of consideration to every writing. Craft’s notation did not purport to reflect a contract, mutual agreement, or mutual obligations.

The Opinion

Summary

  • A written promise to make future payments from one’s estate is an unenforceable promise to make a gift, not a valid trust or contract.
  • To create an express trust, the language must show clear certainty of intent to become a trustee and must identify a specific trust res (property).
  • A writing does not import consideration as a contract unless it actually purports to be a contract with elements like mutuality of obligation.

Full text

Complete unedited opinion text as published by the court

STEAKLEY, Justice.

STEAKLEY, Justice.

Three days before his death C. P. Craft penned a lengthy personal letter to Mrs. Iva Rippstein. The letter was not written in terms of his anticipated early death; in fact, Craft spoke in the letter of his plans to go to the Mayo Clinic at a later date. The portion of the letter at issue reads as follows:

Mrs. Rippstein, Respondent here, first sought, unsuccessfully, to probate the writing as a codicil to the will of Craft. The Court of Civil Appeals1 held that the writing was not a testamentary instrument which was subject to probate. We refused the application of Mrs. Rippstein for writ of error with the notation "no reversible error." See Rule 483, Texas Rules of Civil Procedure.

The present suit was filed by Mrs. Rippstein against the executors of the estate of Craft, Petitioners here, for judgment in the amount of the monthly installments which had matured, and for declaratory judgment adjudicating the liability of the executors to pay future installments as they mature. The trial court granted the motion of the executors for summary judgment. The Court of Civil Appeals reversed and rendered judgment for Mrs. Rippstein2, holding that the writing in question established a voluntary trust under which Craft bound his property to the extent of the promised payments; and that upon his death his legal heirs held the legal title for the benefit of Mrs. Rippstein to that portion of the estate required to make the promised monthly payments.

In her reply to the application for writ of error Mrs. Rippstein states that the sole question before us is whether the marginal notation constitutes "a declaration of trust whereby [Craft] agrees to thenceforth hold his estate in trust for the explicit purpose of making the payments." She argues that Craft imposed the obligation for the payment of the monies upon all of his property as if he had said "I henceforth hold my estate in trust for [such] purpose." She recognizes that under her position Craft became subject to the Texas Trust Act in the management of his property. Collaterally, however, Mrs. Rippstein takes the position that it being determinable by mathematical computation that less than ten per cent of the property owned by Craft at the time he wrote the letter would be required to discharge the monthly payments, the "remaining ninety per cent remained in Mr. Craft to do with as he would." Her theory is that that portion of Craft's property not exhausted in meeting his declared purpose would revert to him by way of a resulting trust eo instante with the legal and equitable title to such surplus merging in him.

These arguments in behalf of Mrs. Rippstein are indeed ingenious and resourceful, but in our opinion there is not sufficient certainty in the language of the marginal notation upon the basis of which a court of equity can declare a trust to exist which is subject to enforcement in such manner. The uncertainties with respect to the intention of Craft and with respect to the subject of the trust are apparent. The language of the notation cannot be expanded to show an intention on the part of Craft to place his property in trust with the result that his exercise of further dominion thereover would be wrongful except in a fiduciary capacity as trustee, and under which Craft would be subject to suit for conversion at the hands of Mrs. Rippstein if he spent or disposed of his property in a manner which would defeat his statement in the notation that a monthly payment of $200.00 in cash would be sent her the first week of each month. It is manifest that Craft did not expressly declare that all of his property, or any specific portion of the assets which he owned at such time, would constitute the corpus or res of a trust for the benefit of Mrs. Rippstein; and inferences may not be drawn from the language used sufficient for a holding to such effect to rest in implication. The conclusion is compelled that the most that Craft did was to express an intention to make monthly gifts to Mrs. Rippstein accompanied by an ineffectual attempt to bind his estate in futuro; the writing was no more than a promise to make similar gifts in the future and as such is unenforceable. The promise to give cannot be tortured into a trust declaration under which Craft while living, and as trustee, and his estate after his death, were under a legally enforceable obligation to pay Mrs. Rippstein the sum of $200.00 monthly for the five-year period.

The controlling tests were stated by this Court in McMurray v. Stanley, 69 Tex. 227, 6 S.W. 412 (1887):

In Fleck v. Baldwin, 141 Tex. 340, 172 S.W.2d 975 (1943), it was said:

Mrs. Rippstein relies principally on three decisions in support of her theory that the ten per cent of Craft's property required to discharge the monthly payments can be carved out and made to constitute the subject of the trust: McMurray v. Stanley, supra; Estes v. Estes, 267 S.W. 709 (Tex. Com.App.1924); and Monday v. Vance, 92 Tex. 428, 49 S.W. 516 (1899). In Monday v. Vance the husband and wife deeded property in trust for the permanent support of the wife and the children, and for the education of the children. The deed did not prescribe how the property should devolve after the trust was executed, but there was no uncertainty, regarding the establishment of the trust itself. It was held that the effect of the deed was merely to carve out of the estate in the property the usufructuary interest for the support of the wife and the maintenance and education of the children, and to leave what remained unaffected by the conveyance. Estes v. Estes considered a will which created a life estate in B. T. Estes with a vested remainder in fee simple in Bennie Estes; and which also impressed the income from the property in the hands of B. T. Estes with an active trust in favor of Bennie. As relevant here, the court cited what it termed the "universal rule that, in the absence of express terms defining the estate conferred upon the trustee, the trustee takes exactly that quantity of interest which the purposes of the trust requires, and no more." But there was no uncertainty regarding the intention of the testatrix. In McMurray v. Stanley this court considered a will under which the testatrix gave all of her property to her husband with full power of disposition, but directed that "at his death, should he have any of said property still remaining in his possession not disposed of or used by him, that the same shall be given by him" to her nieces. It was held that the intention to create a trust was manifested by the whole instrument, and that the property remaining in the possession of the husband at the time of his death could be shown with as much certainty as any other fact. Here, again, the court was enforcing clear intention, and in so doing it was held that the subject to which the trust attached was sufficiently certain.

We also note that Mrs. Rippstein presented the alternative point in the Court of Civil Appeals (which that court did not reach) that the marginal notation was an instrument in writing which imports consideration; and that she was entitled to summary judgment against the estate of Craft for the monthly payments since the executors of the estate wholly failed to meet their burden of proving a want of consideration. This alternative position was also asserted by counsel for Mrs. Rippstein in oral argument before this Court.

The common law rule was stated by this Court in Jones v. Holliday, 11 Tex. 412 (1854):

In 1858 the Legislature enacted what became Article 7093 of the 1911 codification providing as follows: "Every contract in writing3 hereafter made shall be held to import a consideration in the same manner and as fully as sealed instruments have heretofore done." It was said by this Court in Harris v. Cato, 26 Tex. 338 (1862), that "The object of this law was to dispense with a mere formality in the execution of a certain class of contracts. And as by the common law these instruments when under seal imported a consideration, it was provided, by the clause of the sentence under consideration, that the same effect should be given to them when subsequently executed without a scroll or seal."

Article 7093 of the 1911 codification was omitted in the 1925 codification. Article 27 of the 1925 codification, however, read, and still reads, in part, as follows: "No private seal or scroll shall be required in this State on any written instrument except such as are made by corporations." In an opinion adopted by this Court in Wright v. Robert & St. John Motor Co., 127 Tex. 278, 58 S.W.2d 67 (1933), it was stated that Article 27 of the 1925 codification included the substance of Articles 7092 and 7093 of the 1911 codification. It was further held that:

It is apparent that Article 27 cannot be held to provide that all written instruments import a consideration, regardless of the kind or type of writing the instrument may purport to be. The marginal notation under consideration here does not purport to be a contract, or to embody a bilateral agreement between Craft and Mrs. Rippstein, or to be the result of a meeting of their minds, or to possess the element of mutuality of obligation. A contractual obligation to pay the monthly payments cannot be imposed against the estate of Craft on the theory that the executors thereof were under the burden in this proceeding, which they did not discharge, of alleging and proving a want of consideration.

The judgment of the Court of Civil Appeals is reversed and that of the trial court is affirmed.