There were two important typos in the last version, which an alert DIRTer spotted instantly. Thanks - and here's the corrected version.

Daily Development for Thursday, September 26, 2002

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

STATUTE OF FRAUDS; EXECUTION; "AMANUENSIS:" Although party may not execute instrument as agent of another without written authorization, party may execute for another as "amanuensis" - functioning as the execution instrument of another, even if execution is done outside of the presence of the party for whom the execution is performed.

Estate of Stephens v. Williams, 49 P.3d 1093 (Cal. 2002)

Prior to his wife's death, Decedent Stephens had executed joint wills with her, whereby each agreed to devise all their property at death equally to their two children. Both Stephens and his wife lingered on their deathbeds for some time, and Shirley, their daughter was their constant companion and nurse successively for almost two decades. Stephens' wife died in 1988, and Stephens survived in an invalid state, continually ministered to by Shirley. The couple's other child, however, Lawrence, left the state in 1989, and Stephens felt that Lawrence had abandoned his responsibility to assist in Stephens' care.

As a consequence of all this, in 1991, Stephens determined to make a deed his home in joint tenancy to himself and Shirley, effectively making Shirley the sole recipient of this property should he predecease her, which he fully expected to do. Blinded by glaucoma and weakened by illness, Stephens instructed Shirley to arrange for the execution and recording of the deed. Shirley affixed Stephens signature to the deed outside of his presence. (Ironically, the deed was typed by Lawrence's ex-wife, who was Shirley' close friend.) There was a great deal of evidence from third parties that Stephens indeed wished all of this to occur, knew it took place, and concurred in it,

When Stephens died in 1994, and Lawrence became aware of the will and the joint tenancy deed, Lawrence contested the deed, claiming that it was invalid as violative of the Statute of Frauds. The matter had bounced around in the courts for some time, and by the time of this appeal to the California Supreme, both Lawrence and Shirley had also passed away and their interests were argued by their respective estates.

Lawrence argued that under California law Shirley could not validly execute the deed as her father's agent because there was no written authorization for her to do so. If a transaction must be in writing to be valid, the authorization of an agent to execute the documents for the transaction must also be in writing. Although Shirley did have a durable power of attorney, this written authorization was insufficient to support her execution of the gift deed to herself. Furthermore, although Stephens had subsequently ratified her acts, California law required such ratification to be in writing, which it was not. These requirements for written authorization or written ratification are part of what the court described as the "equal dignities rule," which is part of California law by statute, but likely is present in the common law in many jurisdictions.

Notwithstanding these arguments, the trial court had determined that Shirley's execution of the will with Stephens' name was valid because Shirley had acted as her father's amenuesis - his instrument of execution. This determination, however, was reversed by the Court of Appeal because California precedent had required that the amenuesis must execute the document in the presence of the principal.. To quote from a 1921 California decision:

The only exception to the rule [requiring written authorization for an agent to sign] is where the execution by the [agent] is in the presence of the principal. The exception arises from the doctrine that what one does in the presence of and by the direction of anotehr is the act of the latter - as much so as if it were done by himself in person . . . "

That did not happen here. Shirley executed the deed outside of her father's presence.

On appeal to the California Supreme Court: Held: Reversed. Shirley was a lawful amenuesis.

The Supreme Court concluded that the essence of the amenuesis concept is that the party doing the executing is performing a purely mechanical act, without any exercise of discretion. In such cases, there is no need to require written authorization for the act to be valid as the act of the prinicpal. The court acknowledged that there was a special problem when, as here, the amenuesis is the beneficiary of the document executed. That situation had no precedent in California law. The court noted that several jurisdictions have upheld the action of an "interested amenuesis" in the execution of a will, citing cases in Oklahoma, Alabama, and Massachusetts.

Because of the problem that Shirley was an interested party, the court concluded that it would indulge in a presumption that the signature affixed by an amenuesis is not valid because not authorized by the principle, and that it would require the party alleging authorization to prove it by a preponderance of the evidence.

A strongly worded dissent by Justice Kinnard points out that the "preponderance of evidence" requirement posed by the court is scant protection against a "swindler" set upon defrauding the principal, especially in cases where the principal has deceased. Justice Kinnard acknowledged that it was unlikely that there were any "swindlers" here, but argued that preservation of this protection was important enough to justify upholding the Court of Appeals ruling.

Justice Kinnard argued that the rule concern against fraudulent conveyances was strong enough to overcome any incidental enefit to those who uses agents inappropriately. He asserted that the Restatement of Contracts, Corbin on Contracts, and "dozens" of cases support his conclusions.

Comment: In light of the fact that all of the required written authorizations can now be carried out by electronic communications, including email and recorded phone messages, it would seem that the levels of protection against fraud are already pretty low. The cat's out of the bag. Justice Kinnard's rejection of the notion that an interested amenuesis can execute a document outside of the principle's presence does not appear to add that much protection, and in the context of the case, would have deprived a worthy recipient of her father's reward.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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