San Antonio Area Foundation v. Lang
35 S.W.3d 636, 44 Tex. Sup. Ct. J. 57, 2000 Tex. LEXIS 97 (2000)
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Rule of Law:
When a will is unambiguous, extrinsic evidence is not admissible to construe its terms, and the legal meaning of terms like 'real property' governs, meaning specific devises of real property are adeemed by prior sale, with proceeds passing through a residuary clause unless explicitly stated otherwise.
Facts:
- Ruth Lang executed her will on January 17, 1991.
- Paragraph five of Ruth's will devised "the real property and oil and gas real properties in my estate located in Frio County, Texas and Prue Road in San Antonio, Texas" one-half to her nephew, Sylvan Stephen Lang, and one-half to her niece, Jeanne Lang Matthews.
- Ruth's will included a residuary clause giving the remainder of her estate to the San Antonio Area Foundation.
- When she executed her will, Ruth already owned a 25% interest in a real estate lien note and net-profit agreement from a January 1990 sale of part of the Prue Road property.
- In July 1993, Ruth executed a codicil to her will, making additional cash bequests but not changing paragraph five regarding the Prue Road property.
- In December 1993, the Lang family sold more Prue Road acreage, and Ruth acquired a 25% interest in two additional notes from that sale, plus an unsecured promissory note.
- Until her death on July 25, 1995, Ruth kept her 25% interest in these three lien notes, the unsecured note, and cash in a "cash reserve" bank account for Prue Road transactions.
- At the time of her death, Ruth still owned a 25% undivided interest in approximately 90 acres of real property on Prue Road.
Procedural Posture:
- The San Antonio Area Foundation and the Langs (Sylvan Stephen Lang and Jeanne Lang Matthews) filed cross-actions for declaratory judgment in probate court to determine whether Ruth Lang’s devise of "real property" included her interest in certain promissory notes and other personal property assets associated with that real property.
- The probate court rendered final judgment for the San Antonio Area Foundation, ruling that Ruth’s interest in the notes and other personal property was not included in "real property" and thus passed to the Foundation under the residuary clause, and excluded the Langs’ extrinsic evidence. The probate court also concluded that parts of the Prue Road property sold before Ruth's death were adeemed.
- The Langs appealed the probate court's judgment to the court of appeals.
- The court of appeals reversed the probate court's judgment and remanded for trial, determining that the Langs’ extrinsic evidence created a fact issue regarding Ruth’s intent and that ademption did not apply.
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Issue:
Does the term 'real property' in an unambiguous will include associated personal property like promissory notes and cash, and is extrinsic evidence admissible to interpret such a term, or are portions of the devised property adeemed if sold before the testatrix's death without explicit provision for proceeds?
Opinions:
Majority - Justice Abbott
No, the term "real property" in an unambiguous will does not include associated personal property like promissory notes and cash, and extrinsic evidence is not admissible to interpret such a clear term. Portions of the devised real property sold before the testatrix's death are adeemed, with proceeds passing through the residuary clause, as the will speaks at the time of death and did not explicitly include the proceeds. The Court's primary focus in will construction is the testatrix's intent, which must be ascertained solely from the language within the four corners of the will. If the will is unambiguous, courts should not go beyond its specific terms to search for intent. "Real property" has a settled legal meaning, defined by common law and Texas Probate Code § 3(dd), which includes land and things affixed to it but excludes personal property like promissory notes, net-profit agreements, and cash (defined as personal property by Tex. Prob. Code § 3(z)). Texas Probate Code § 58(c) further mandates that a devise of real property does not include personal property associated with it unless the will specifically directs inclusion, which Ruth's will did not. The Langs' reliance on Stewart v. Selder for broad admissibility of extrinsic evidence is misplaced; Lehman v. Corpus Christi Nat’l Bank clarified that such evidence is only admissible when a term is susceptible to more than one construction. Extrinsic evidence cannot be used to create an ambiguity where none exists, nor can it contradict the clear meaning of legally defined terms. The Court also applied the doctrine of ademption, which describes the extinction of a specific bequest or devise because the subject matter is disposed of during the testator's lifetime, unless the will provides otherwise. Since Ruth sold parts of the Prue Road property before her death and did not specifically include the proceeds in the devise to the Langs, those portions were adeemed, and her interest in the personal property proceeds passes under the residuary clause to the San Antonio Area Foundation. The Court noted that Ruth's will was attorney-drafted, implying words were used in their technical sense, and her failure to amend her will or the 1993 codicil to include the notes further indicated an intent consistent with the plain meaning of the words.
Analysis:
This case reinforces the "four corners" rule in Texas will construction, severely limiting the admissibility of extrinsic evidence for unambiguous terms. It clarifies that legally defined terms like "real property" are generally interpreted according to their established legal meaning, preventing attempts to create ambiguity through external evidence. The decision underscores the importance of precise drafting in wills, particularly regarding specific bequests and the handling of assets that may change form (e.g., from real property to sale proceeds) before the testator's death, emphasizing the doctrine of ademption and the default role of residuary clauses for unprovided-for assets.
