Hill v. Hill
1970 Del. Ch. LEXIS 99, 262 A.2d 661 (1970)
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Rule of Law:
When a pre-nuptial agreement made in one state involves promises to transfer real property in another state, the agreement is generally considered a personal contract governed by the law of the place where it was executed (lex loci contractus), rather than the law of the situs of the real property (lex rei sitae), unless it directly acts as an instrument of conveyance.
Facts:
- On December 30, 1965, Sara Gideon Hill and Harry Murdock Hill signed a pre-nuptial agreement in Salisbury, Maryland.
- On December 31, 1965, Sara Gideon Hill and Harry Murdock Hill were married.
- The agreement stipulated that Harry Hill would convey his real property to himself and Sara as tenants by the entireties, transfer stocks/securities to them as joint tenants, and name Sara as the primary beneficiary on all his life insurance policies within 30 days of marriage.
- The agreement also stipulated that Sara Hill would convey certain real estate in Gettysburg, Pennsylvania, to herself and Harry as tenants by the entireties within 30 days of marriage, and if she inherited another property, she would similarly convey it.
- Harry Hill died domiciled in Delaware on October 20, 1967.
- Harry Hill's probated will directed his residuary estate, including real property at Hearn's Pond near Seaford, Delaware, to be divided equally among his mother, Anna Mary Hill, his sister, Ruth M. Huhn, and his brother, Thomas Wallace Hill.
- Harry Hill named his mother, Anna Mary Hill, as the beneficiary of his life insurance policies.
- Sara Hill performed all her obligations under the agreement and remained Harry Hill's wife until his death.
- Harry Hill failed to execute a deed transferring the Hearn's Pond property to himself and Sara as tenants by the entireties, and failed to make Sara a beneficiary of all his life insurance.
Procedural Posture:
- Sara Gideon Hill filed a complaint in the Court of Chancery of Delaware against Anna Mary Hill, Ruth M. Huhn, and Thomas Wallace Hill (the residuary legatees and devisees under Harry Hill’s will and the beneficiary of his insurance policies).
- The complaint sought an order requiring the defendants to hold their respective interests in Harry Hill's real property at Hearn's Pond and life insurance proceeds in trust for Sara Hill, alleging that Harry Hill failed to fulfill his obligations under a pre-nuptial agreement.
- Defendants moved to dismiss the complaint on the ground that it failed to state a claim upon which relief could be granted, arguing that the pre-nuptial agreement was a nullity under Delaware law.
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Issue:
Does Delaware's pre-nuptial agreement statute, 13 Del.C. § 301, which outlines formal requirements for contracts affecting rights in an estate, apply to and invalidate a pre-nuptial agreement executed in Maryland that contains promises to transfer Delaware real estate and assign life insurance beneficiaries, where the agreement is a personal contract and not a direct conveyance?
Opinions:
Majority - Duffy, Chancellor
No, Delaware's pre-nuptial agreement statute, 13 Del.C. § 301, does not apply to invalidate the pre-nuptial agreement executed in Maryland. The Court determined that while the law of the situs of real property generally governs actions directly affecting its ownership, a distinction must be made for contracts that, while relating to real property, do not directly affect title but are purely personal. The pre-nuptial agreement in question was not an instrument of conveyance itself but rather a "personal contract" where the parties promised to take certain specified actions regarding property, securities, and life insurance. Therefore, under Delaware's choice of law rules, the validity of such a personal contract is determined by the law of the place where the contract was made (lex loci contractus), which in this case is Maryland. The Court noted that Maryland law clearly recognizes the validity and propriety of antenuptial agreements, and defendants failed to show any reason for the agreement's invalidity under Maryland law. Furthermore, Delaware's statute 13 Del.C. § 301 is permissive in language and does not purport to state the only cognizable procedure for creating a valid pre-nuptial agreement, nor does Delaware public policy prohibit enforcement of such obligations.
Analysis:
This case provides crucial clarification on the application of conflict of laws principles to pre-nuptial agreements involving multi-state property. By distinguishing between executory promises concerning real property and direct conveyances, the court reinforces the principle that the lex loci contractus often governs the validity of contracts, even when real property in another jurisdiction is involved. This decision streamlines the enforcement of pre-nuptial agreements across state lines, particularly where they involve promises to act rather than immediate transfers of title, preventing statutory technicalities of a property's situs from unilaterally invalidating an otherwise legitimate agreement. It highlights that the intent and nature of the agreement (personal promise versus direct conveyance) dictate the applicable choice-of-law rule.
