McBain v. Pratt

BOOCHEVER, Justice

(dissenting).

I reach a different conclusion with reference to the complicated problems of construing the property settlement agreement of October 10, 1969. If we were confronted solely with an agreement whereby John Savage had the option of bequeathing to his children’s trust either his law practice or $42,000 (its agreed value as of October 10, 1969), I would join in the majority’s opinion. The majority, however, disregards the fact that contemporaneously with the signing of the agreement a will was also executed, and that the property settlement agreement specified: “A copy of said will is attached hereto and incorporated herein as Exhibit F and the same may not be changed except by permission of the Superior Court, Third Judicial District, State of Alaska.” (Emphasis added.) The will which was thus incorporated in the agreement, after providing for payment of debts, for expenses of last sickness and burial and of administration, and for a bequest of $10,000, devised and bequeathed all of John M. Savage’s estate to the children’s trust. Thus the law practice rather than its agreed value of $42,000 was devised to the trust.

The agreement specified that the will could “not be changed except by permission of the Superior Court”. Without obtaining such permission Mr. Savage changed the will by writing a new will which devised the law practice to his then wife, Susan.

That will, however, did not conform to the agreement in that neither the law practice nor its agreed value was devised to the trust. To sanction such a change in the will would constitute a fundamental modification of the property settlement agreement, not merely a change in the provisions of the will which would be in accordance with the agreement. The agreement required the written consent of Emily Savage (now Emily Kirkeby) for its modification.¹ To the extent that a modification of the will conformed to the property settlement agreement, it could be changed with “permission of the Superior Court”. But since the April 20, 1970 will does not conform to the property settlement agreement, without Emily’s consent the court could not have sanctioned it during John Savage’s life; therefore, the court below correctly concluded that it could not posthumously ratify the provision devising the law practice to Susan.

The majority focuses solely on the breach of the agreement to devise either $42,000 or the law practice to the trust. Based on the recognized rule of law whereby in the event that there is a breach of contract providing for alternatives, “the measure of damages recoverable by the promisee is the value of that alternative that is the least burdensome and expensive to the promisor,” they thus limit the amount recoverable by the trustee to $42,-000.

In my opinion, the majority has failed to give proper consideration to the additional breach of the contract provision prohibiting a change of the will without the consent of the superior court. The damages for that breach of contract must be measured in accordance with the principle that the injured party is to be placed in as good a position as he would have been in had the contract not been breached.² If there has been no breach of the agreement requiring court approval for a change of the will, the original will would have remained in effect. I thus conclude that the superi- or court did not commit error in awarding a summary judgment to the trustee decreeing him to be a creditor of the estate of John Maynard Savage to the extent of the value of any proceeds from the law practice, and impressing a trust on the proceeds therefrom.

The majority interprets the separation agreement “[to] provide for superior court review of changes in the Savage will in order to insure that Savage would make the agreed testamentary gifts.” But such approval is entirely unnecessary for that purpose as the agreement could not be modified without Emily’s written consent. Accordingly, the only purpose of requiring court approval was to consider situations involving changes in the will which would still conform to the agreement. There is no other way to interpret the provision requiring court approval of the will without conflicting with the provision requiring Emily’s written consent for a modification of the agreement.

I agree with the majority that we should not “approve an interpretation of a contract which creates conflict among its provisions. Whenever possible, repugnant portions of a contract must be harmonized. An interpretation will not be given to one part of a contract which will annul another.” I submit, however, that only by the construction outlined above may the portion of the contract requiring court approval for a change in the will be harmonized with the provision requiring Emily’s written consent for a modification of the terms of the agreement.

Admittedly this is a literal interpretation of the agreement. Yet no satisfactory reason is advanced for not giving a literal interpretation to the agreement. Such a construction gives effect to what was apparently the chief motivating consideration of the agreement on the part of both the Savages to see that ample provision was made for the children.³

Accordingly, I believe that this interpretation is the only one in accordance with the express intention of the parties. The original will, which was incorporated in the agreement, bequeathed the law practice to the trust, not the sum of $42,000.⁴ The trust was placed in a position whereby if the law practice decreased in value, it would receive a lower sum. Similarly, if the practice increased in value, the trust for the children would benefit. Even assuming an attempt to amend the will in accordance with the other provisions of the agreement, Mrs. Savage was entitled to notice and the opportunity to argue before the superior court as to why such a change would not be equitable. Particularly where the amended will did not conform to the agreement there was a substantial breach of the contract; and, as indicated above, the damages for that breach should be measured by the provisions of the original will. Accordingly, I would affirm the judgment below.

1 . Section III.H. of the Separation, Property Settlement and Custody Agreement of October 10, 1969 stated:

Modification and Waiver. A modification or waiver of any provision of this agreement shall he effective only if made in writing and executed by the same formality as this agreement after this agreement is signed.

2 . Green v. Koslosky, 384 P.2d 951, 952 (Alaska 1963).

3 . Nor can I agree with the majority that the superior court “could not properly have denied Savage permission to amend his will so long as Savage made the agreed testamentary gifts.” First, Savage’s new will did not provide for the agreed testamentary gift of the law practice or its value to the trust. Even if the modified will had sought to make a change in accordance with the basic provisions of the agreement, not only would Emily have had the right to object, but also, in my opinion, the court would have been obligated to appoint a guardian ad litem for the children. Emily and such guardian could advance substantial arguments to the effect that the children should not be deprived of the value of the law practice previously provided for them in favor of a newly acquired wife. By referring to this consideration, I in no manner intend to reflect adversely on Mrs. McBain, who, as far as can be ascertained from the pleadings, was devoted to Mr. Savage during his life, and is devoted to the children.

4 . Although the majority states that Savage made no “election” of either alternative in the 1969 will, it is not clear why the execution of the will which concededly would have had the effect of devising the law practice to the trust for the children was not an “election”.