In Re Estate Soper
196 Minn. 60, 264 N.W. 427 (1935)
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Rule of Law:
When a term in a written instrument, such as 'wife,' is unambiguous on its face but creates a latent ambiguity when applied to the extrinsic facts of the case, parol evidence is admissible to determine the drafter's intent.
Facts:
- In 1911, Ira Collins Soper married Adeline Johnson Westphal in Kentucky.
- In August 1921, Soper staged his suicide, abandoned his wife Adeline, and disappeared.
- Soper moved to Minneapolis, assumed the alias John W. Young, and established a new life.
- In 1927, Young (Soper) bigamously married Gertrude Whitby, who in good faith believed he was a widower. They lived together as husband and wife.
- Young (Soper) and his business partner, Ferdinand Karstens, created a stock purchase agreement funded by life insurance policies held in an escrow trust.
- The trust agreement stipulated that upon the death of either partner, the insurance proceeds would be paid to the 'wife of the deceased Depositor'.
- In 1932, Young (Soper) committed suicide.
- After his death, his legal wife, Adeline Soper, discovered his fate and asserted her claim to the insurance proceeds as his legal 'wife'.
Procedural Posture:
- The administrator of Ira Soper's estate and Adeline Soper, his legal wife, sued Gertrude Whitby, the putative wife, and the First Minneapolis Trust Company in a state trial court to recover insurance proceeds.
- The trial court found in favor of the defendants, Gertrude Whitby and the trustee.
- Plaintiffs filed a motion for a new trial, which the trial court denied.
- Plaintiffs appealed the trial court's order denying their motion for a new trial to the state's highest appellate court.
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Issue:
When a trust agreement designates the beneficiary as the settlor's 'wife', does that term create a latent ambiguity allowing for extrinsic evidence to prove the settlor intended his putative wife, not his legal wife, to be the beneficiary?
Opinions:
Majority - The Court
Yes, the term 'wife' creates a latent ambiguity that permits the court to consider extrinsic evidence to ascertain the settlor's intent. The escrow agreement functions as a valid non-testamentary inter vivos trust, making the dispute a matter of contract interpretation rather than inheritance law. Although Gertrude was not Soper's legal wife, the evidence is inescapable that she was the person intended by the parties to the agreement. To all of Soper's business and social contacts in Minneapolis, including his partner Karstens and the trustee, Gertrude was his wife. To interpret 'wife' as a fixed, objective term referring only to Adeline would ignore the subjective intent of the writer and thwart the clear purpose of the contract. The court rejects the 'unprofitable subtlety' of the patent/latent ambiguity distinction, holding that extrinsic evidence is necessary whenever applying a contract to its subject matter reveals an ambiguity.
Dissenting - The Dissent
No, the term 'wife' in a contract should be construed to mean the legal wife, and the court should not rewrite the contract to substitute a new beneficiary. A man can have only one wife, and in this case, that was Adeline Soper. Soper committed a great wrong against his legal wife by abandoning her and entering into a bigamous marriage. The court's decision ignores this wrong and validates Soper's fraudulent conduct. The word 'wife' has a clear legal meaning that should be enforced as written.
Analysis:
This decision significantly advances a modern, intent-focused approach to contract interpretation, moving away from rigid, formalistic readings of legal documents. By allowing extrinsic evidence to resolve a 'latent' ambiguity, the court affirmed that the primary goal is to effectuate the actual purpose of the parties, even if it means deviating from a term's strict legal definition. The case effectively blurs the distinction between patent and latent ambiguities, setting a precedent that courts can look to surrounding circumstances whenever applying a contract's text to the real world creates uncertainty. This impacts future cases by prioritizing the context and subjective intent behind an agreement over inflexible, 'four-corners' interpretation.
