Scott v. First Nat'l Bank - 224 Md. 462, 168 A.2d 349 (1961)

Rule:

At common law the transfer of a mere possibility or expectancy, not coupled with an interest, is void. Under some circumstances, at least, equity will enforce the assignment of an expectancy after the death of the ancestor despite its invalidity at law. It is generally recognized that since the relief sought is in the nature of specific performance of a contract, equity will enforce the contract only where it is fair and equitable and supported by an adequate consideration. An agreement to assign an expectancy is enforceable in equity and that the rule is supported by the great weight of authority where the agreement is fairly made upon adequate consideration and without oppression or unjust advantage being taken of the heir. A gratuitous assignment is unenforceable, because there is no contract to enforce.

Facts:

The litigant, Wilmer Scott, left his first wife and daughter to be with another woman. The litigant and the wife entered into a separation agreement whereby the wife was to have custody of the daughter. The litigant signed over the couple's house to the wife and she assumed the mortgage. In a separate instrument, the litigant assigned under seal to his daughter one-half of his expectancy in his father's estate for consideration of one dollar and other valuable consideration received from the wife on behalf of the daughter. The wife sued for divorce in 1948 and the decree did not mention the assignment. Since 1936, the litigant's father had been mentally incompetent. Appellee administrator, First National Bank of Baltimore, by way of interpleader, brought a proceeding concerning the administration of appellant litigant's father's estate after the administrator had filed an inventory showing a personal estate of about $ 490,000. The Circuit Court of Baltimore City (Maryland) declared valid the assignment of a one-half expectancy from the estate of the litigant's father, in favor of the litigant's daughter. The litigant appealed, arguing that the assignment lacked the necessary consideration.

Issue:

Was the assignment of a one-half expectancy from the estate of the litigant's father, in favor of the litigant's daughter, invalid for lack of necessary consideration? 

Answer:

No.

Conclusion:

On review, the court held that where the wife assumed the burden of care and education for the daughter and assumed liability for the unpaid bills, loans, and mortgage, the wife’s actions constituted adequate consideration for the assignment of the one-half expectancy from the litigant’s father’s estate. The court held the bargain was at arm’s length and the litigant had an opportunity to seek independent advice. Accordingly, the court affirmed the judgment finding the assignment to the daughter valid.