SMITH, J.
The facts, stripped of nonessentials, are these: Robert C.J. Traub and William Traub had been in business together. After William died, dissension arose between his widow, Mary, and the surviving brother, Robert. Mary felt that the management of the store was at fault; that there should be more dividends, and that the business and some of the real estate should be sold. A compromise of differences was sought. Agreement (the one before us) was finally reached: Robert received certain assets, bonds and real estate. He gave up certain assets, including his interest in William's estate, worth approximately $86,000. Mary likewise received certain properties. The agreement also provided that "In consideration of the foregoing transfers and of the matters contained in this agreement" Mary would "forthwith" leave to Robert in her will all of her Traub company stock. He died without receiving the stock, having predeceased her. Robert's daughter, his sole heir, seeks it, or its value (it was sold before Mary's death) from Mary's estate. Recovery is opposed. The grounds will appear in due course.
We can see nothing here but a simple contract. Payment is resisted upon this ground: The agreement says merely that the stock is to go to Robert upon Mary's death. It does not say it is to go to his heirs or, indeed, to anyone else. It is argued, therefore, that the true intent is that it not go to Robert's heir-at-law but that the right thereto is personal to him and dies with him. Appellant asserts the intent was otherwise.
Was the omission in the agreement of apt reference to some other person to take in Robert's place, should he predecease Mary, an oversight, indeed, a blunder? We have difficulty with this assumption. It clashes with the careful thought evidenced within the four corners of the instrument, particularly since we find that the words "heirs, personal representatives and assigns" are used in the paragraph concerning indemnification against claims by creditors of William Traub's estate with respect to certain properties conveyed to Robert. The frequency with which the courts repeat that an indemnity contract is to be "strictly construed against him who claims to be an indemnitee" well justifies the precision in description employed in this paragraph. Here such words were meaningful and they were thus utilized. But it is of the essence of the matter before us that the mere addition of the word "heirs" to a dispositive clause would have solved nothing with respect to our problem even had they been added. The words "to Robert and his heirs" are normally construed as words of limitation, not of purchase, In re Martz's Estate, 318 Mich. 293. Their addition would have added nothing to the will clause under consideration. They merely delimit the estate given and do not designate those who take by remainder.
See, also, as to real property CL 1948, § 565.153 (Stat Ann 1953 Rev § 26.573).
There was a period in our law, all must agree, when "the word was the talisman." The law itself would imply nothing. Let individuals guard their own interests, was the philosophy, both as to contract and tort, and not come snivelling to the courts if they weren't sharp enough to look out for themselves. Thus it was not until Slade's Case that the law itself would imply a promise to pay the debt defined in the action of debt, and similar in philosophy was Persay's argument in the time of Edward III (1327-1377) that "I never heard that one should have a writ of covenant against executors, nor against other person but the very one who made the covenant, for a man cannot oblige another person to a covenant by his deed except him who was party to the covenant."
4 Coke Rep 92b (76 Eng Rep 1074) (1602).
YB 48 Ed III 2, pl 4, quoted in Holmes, The Common Law, p 345.
In modern times we read these cases with a curious eye, until such a case as the one before us arises. For here the argument is made that the omission by the draftsman of some word or words, exactly what words we are not told, means that Robert's rights to the stock for which he surrendered, among other things, an interest worth $86,000 in his brother's estate, runs only to "the very one who made the covenant" and he (Robert) being dead, his right to the return promised him, the consideration or its equivalent, goes to the grave with him. Of course it is theoretically possible for parties to make such a self-defeating agreement (and we will examine in due course the reasons advanced in support of such an agreement) but all presumptions of both reason and law are against such construction. As Cardozo put it, quoting an earlier case, "It is a presumption of law, in the absence of express words, that the parties to a contract intend to bind not only themselves, but their personal representatives," Matter of Buccini v. Paterno Construction Co., 253 N.Y. 256, 259 ( 170 N.E. 910), and this presumption extends not only to the obligation of contractual performance but the corresponding right to receive the consideration therefor, where not personal in nature.
Thus, if a lawyer sells his library for $5,000 to be paid to him within the year, we take it to be clear that his widow, 6 months hence, as sole heir-at-law, may collect the money even though the contract said not one word about payment to her. Nor do we regard the case as vastly different if the payment was to be by a "bequest" or a "legacy" in the purchaser's will, if it be clear only that the "bequest" or the "legacy" is the payment of the debt agreed upon in consideration of the library. It has been many years since courts have allowed the garb of words to cloak the substance beneath, either converting the crafty to the cloth or investing the good with the attributes of evil. Actually what we have here is simply the payment of a debt.
Such a bequest or legacy, if made, will not lapse in event the legatee predeceases the testator. See 4 Page, Wills (3d ed), § 1417, p 167: "A legacy which is given upon a valuable consideration, as in payment of a debt of testator's, does not lapse at common law." See CL 1948, § 617.65 (Stat Ann § 27.914). — REPORTER.
The essence of this agreement with respect to the stock is thus clear on its face. Mary is to have a life interest therein, with the dividend advantages (in which she was primarily interested and which, in fact, was in large part responsible for the family dissension), and Robert is to receive the stock upon her death. But we are not without enlightenment in addition to the agreement itself. By way of preface we should say that in event of ambiguity in an instrument we make use of all possible aids in construction, the parol evidence rule to the contrary notwithstanding. 3 Corbin, Contracts, § 579, p 250, states the principle with clarity:
"As long as the court is aware that there may be doubt and ambiguity and uncertainty in the meaning and application of agreed language, it will welcome testimony as to antecedent agreements, communications, and other factors that may help to decide the issue."
In the contract before us we must conclude from the positions taken by the litigants that a real, and not a strained or fanciful, ambiguity existed. The understanding of the promisor, then, Mary Clark Traub, becomes significant. The agreement was hers, it had been executed by her, it had adjusted her differences with her brother-in-law Robert, and she had lived with it down through the years. What was her understanding of its content? How did she construe its requirements? The record on this is clear and will speak for itself. The incident narrated took place in the year 1945, some 12 years after the execution of the agreement:
"Q. Now, did you on any occasion overhear any statement by Mary Clark Traub as to the dividend policy of the company? Answer yes or no?
"A. Yes.
"Q. Will you tell us where and when you heard those statements made?
"A. On many occasions, and one which stands out in my mind with special vividness, was at the home of Robert Traub in Bloomfield Hills in the summer of 1945. Mrs. Traub took exception to the dividend policy of the company.
"Q. What people were present on that occasion?
"A. On this occasion Mr. and Mrs. Robert C.J. Traub were present; they were the hosts. Mrs. William H. Traub was there. I was there. I believe the daughter Barbara was there, but I am not sure.
"Q. Was this an evening occasion?
"A. This was a social occasion. We had stopped there to have a drink before going to the Bloomfield Hills Country Club for dinner. We withheld discussing jewelry business.
"Q. Will you relate what statements were made by Mrs. Mary Clark Traub on that occasion concerning the jewelry business?
"A. She complained vigorously that the company's dividend policy was niggardly, and she said that she was getting along in years, the stock wasn't doing her a great deal of good, and they should pay more dividends. She accused Robert Traub of building up the company by withholding dividends so that the stock would be more valuable when it came back to the Traubs.
"The Court: What was the date of this again?
"A. 1945. It was the summer of Hiroshima and the end of the war with Japan.
"Q. Anything else said by her on that occasion with respect to the dividend policy?
"A. When it was pointed out to her that dividends had to be paid out of earnings, that they might impair capital, she suggested that they get a bank loan in order to pay dividends; that she wasn't getting any younger and she resented the policy of building up, as she put it, building up the value of the stock so that it would be more valuable to the Traubs when it came back to them."
The identity of "the Traubs" referred to also is abundantly clear from the record, meaning Robert, and his daughter Barbara, whom the William Traubs, childless as they were, had regarded as the natural object of their affections. "I can't recall the exact words," the court was told, "but it was understood that she [Barbara] was to have their estate when they got through with it, because they had no children of their own."
Testimony similar to Mary's, offered both as to the understanding of the scrivener, Peter J. Monaghan, Sr., and of the promisee, Robert C.J. Traub, of the meaning of the agreement, was excluded on the ground of hearsay. We will not let the exclusion pass without comment. Where the belief, understanding, or intent of an actor is material, it is not objectionable to the hearsay rule that such mental state be established by either deed or word. In the latter event, the words are not received for their own testimonial trustworthiness but as proof of a state of mind. See McCormick, Evidence, § 268, p 567; 6 Wigmore, Evidence (3d ed), §§ 1729, 1790, pp 90, 237; Reed, What Is This Thing Called Hearsay? 36 MSBJ, No 3, March, 1957, p 20. We will not vex the issue further since the Monaghan and Robert Traub evidence, even if admissible, as to their belief, intent, and state of mind respecting the agreement, would be cumulative, only, to that of the promisor herself, Mary Traub, whose quoted testimony is clear and was received without objection.
As opposed, then, to the presumption of modern law that we have described in Cardozo's words, and to the understanding of the promisor herself, what do we find per contra? It is asserted that the intent of the parties was that only Robert, personally, was to be paid. So expressed we have a mere conclusion. Where do appellees find this asserted intent, so at variance with a man's natural instincts for the welfare of the natural objects of his bounty, so diametrically opposed to the presumption of law, so contradictory of the promisor's belief that her stock was to go "back to the Traubs"? First, after reciting the controverted clause (Mary "agrees to forthwith make a will bequeathing to Robert C.J. Traub all of the shares of stock"), the appellees say "What could be a more clear expression of an intent to commit Mary Clark Traub to make only a simple bequest to Robert C.J. Traub." Also, "No possible intent can be found in the clearly expressed agreement that would commit Mary Clark Traub to name a substituted beneficiary in the event Robert C.J. Traub predeceased her." These are exclamations and expostulations, not reasons. Next, the presence of words concerning "heirs" in the indemnity clause is contrasted with their absence elsewhere in the agreement. This we have already commented upon. Finally, it is said, that since Robert was to have "possession" of the stock at Mary's death, under the terms of the contract, it meant that the stock was intended only to go to him personally. This is a complete non sequitur. Contracts for the sale of chattels frequently provide that the purchaser may take possession on a fixed date. This has never (in modern times) formed, and cannot today form, the basis for decision that a promisee's contract rights die with him, upon the theory that after his death he cannot "possess" anything, since we all know that shrouds have no pockets. The above constitutes the sum total of all that appellees can bring to bear on the matter of the asserted "intent" that Robert's rights should go to the grave with his remains, much like a cause of action for personal injuries under ancient tort law. We must, therefore, reject the appellees' distinction of such cases as Trower v. Young, 40 Cal.App.2d 539 ( 105 P.2d 160), as differing from the case before us as to intent.
It is clear, of course, that where the contract involves the rendition of some service of a highly personal nature, such as the painting of a portrait, a different rule prevails. If the artist dies the promisee need not accept the work of another. But, even in such case, the death of the artist after he has furnished the portrait does not relieve the subject of the duty to pay his heirs. This, indeed, is the situation before us. Robert's consideration, including his relinquishment of his $86,000 interest in William's estate, had been furnished in full.
So much for the asserted "intent" that the stock would go only to Robert himself. But appellees have another string to their bow. A will was to be the "vehicle of transfer" of the stock and this, it is asserted, somehow changes Mary's obligations and Robert's rights. But the fact that a will was to be the means, the machinery, so to speak, for getting the stock to Robert should not be allowed to defeat the basic agreement, if the will should fail in its purpose, or, indeed, never be executed. We might as well say that the death of a messenger relieves the obligor of the obligation the messenger was conveying to the obligee at the time of the messenger's death. Here the bargain made was for stock, not merely for a clause in a will. And, moreover, will Mary's obligation be deemed unenforceable by heirs-at-law if we call it a "bequest," though fully enforceable had we called it a "debt"? If so, we must deny its contractual origin and obligatory nature, deny the persistence of an unpaid debt, and thus glorify form at the expense of substance, reverting to medieval principles when the word was the law and the law was the word, when the only benefit came to the "very one" who made the covenant, when the obligation itself was destroyed if the writing were destroyed, when a debtor could not be sued in debt unless he uttered the magic words of promise, for none would the law imply.
See Sparks, Legal Effect of Contracts to Devise or Bequeath Prior to the Death of the Promisor, 53 Mich L Rev 1, 33; also, Sparks, Contracts to Make Wills, 1956, pp 92, 93.
This is word-worship. To say that Mary's "sole commitment was to make a bequest to Robert C.J. Traub," as appellees do, is to obscure the issue before us. It relates to an obligation, not to a gift, not to a mere form of words. It can be discharged only by stock, not by words of bequest. To say, as appellees do, that Mary Traub was committed "to make only a simple bequest" is to say that a bequest clause per se was of the essence of the agreement. Since we all know that simple "bequest" clauses can be changed at will and that such bequests will lapse if the legatee predeceases the testator, Mary's obligation, under this theory, was slight indeed. The agreement made, that the bequest clause itself is of the essence of the agreement, is reminiscent of a suggested theory of consideration in the making of bilateral contracts, namely, that the mere making of the promise was what the promisee was after and once he got it he had received his consideration. We have long since agreed, however, that the words of promise are not his consideration. They are merely a means of expression. The true consideration lies in the thing promised. This is the substance, not the empty verbiage mouthed by the promisor. Nor, here, is it the clause in the will. Until Robert or his heirs receive the stock or its equivalent, whether by will or by Western Union messenger, the debt remains unpaid.
See Ames, Two Theories of Consideration, 13 Harv L Rev 29 (1899).
"Moving of the lips to speak or of the fingers to write is not what the promisor offers or the promisee accepts." Pollock, Principles of Contract (9th Eng ed, 1921), p 194.
The essence of all of this is that consideration passed to Mary Clark Traub and it is too late in the law to maintain that she need not either return her bargained-for consideration or, if not available, its value. While it seems clear to us that under the terms of the contract itself the consideration in stock or its value must be paid in return to Robert, or his successors in right and interest, let us assume that through the operation of some rule of law the contract itself became unenforceable. Is the promisor now freed of the burden? Clearly not. There is merely a change in masters. The conscience now controls, and this is as true at law as in chancery. In such circumstances the contract is not the measure of the obligation but, rather, the obligation is the measure of the contract. Even under the English law of wills, relied upon by appellees (1 Jarman, Wills [8th ed, 1951], p 28), there will be no lapse if the "bequest" is in discharge of a moral obligation. 1 Jarman, supra, pp 438, 439.
The distinction to be drawn is that between a mere gift, a legacy or bequest in the gratuitous sense, and the payment of a debt for value received, used, and kept. The latter remains collectible despite its form, so long as unpaid. Here, then, we see the distinction between the case before us and many cases such as Keasey v. Engles, 259 Mich. 178, thought to be controlling by appellees. The Keasey Case turned upon the determination by the Court that a gift was involved. The contract there under consideration (between husband, Leverett, and wife. Amanda) was that a gift should be made to a third person, named Emma. She was to receive it, however, as the Court is careful to explain (p 182), not "in praesenti at death of Leverett, with merely the right of enjoyment postponed, * * * but the gift itself was deferred until the death of Amanda." Since, however, Emma herself predeceased Amanda the Court held that "her legacy lapsed." If the essence of the contract, as the Court held, was to make a defeasible gift, the donee Emma could not complain too persuasively to us that her gift was not broader in scope, vested with a greater longevity. Her donors had dealt her a bob-tailed flush and she could not fill her hand through the operation of law. But the essence of our case is not a narrowly-circumscribed gift. It is a debt. The instrument is replete with the concept of consideration, of exchange, of the quid pro quo. We have no remote donee suing her benefactor, but a promisee himself (in legal effect) suing his promisor. It is the difference between looking a gift horse in the mouth and demanding the payment of an honest debt. As a matter of fact if in the Keasey Case the promisor had been suing the promisee, the Court's answer would have been clear. The contract between promisor and promisee, says the Court (p 181), "is irrevocable." And so, we hold, is it here. In return for Mary's promise to convey the stock to him at her death so that (in her own words) it might go back to the Traub family. Robert stripped himself, and his estate, of substantial assets. It is both illegal and immoral that he, or his estate, should not receive the bargained-for return. Supporting Robert's claim we have not only the terms of the agreement itself (and appellees have not yet disclosed to us the magic words required in addition to those there placed by astute counsel) but a presumption of law, unrebutted. Appellees, indeed, offered no testimony whatever. In addition to all of this we have the wholly consistent understanding of the promisor herself. And opposed thereto what? A chimerical "intent," supported only by exclamation and expostulation. More is required, in this Court, to support a conclusion so clearly opposed to the bargain made, a result so obviously at variance with the most fundamental considerations of justice.
We will not, it is to be hoped, emulate what Justice Holmes described as "the inability of the seventeenth century common law to understand or accept a pleading that did not exclude every misinterpretation capable of occurring to intelligence fired with a desire to pervert."
Paraiso v. United States, 207 U.S. 368, 372 ( 28 S Ct 127, 52 L ed 249).
The judgment of the circuit court is reversed. The cause is remanded for the entry of judgment on the claim for $58,179, with interest and costs as by statute made and provided. We will not substitute our discretion for that of the probate court imposing the burden of the referee's fee upon the tardy claimant, appellant here.
See CL 1948, § 708.4 (Stat Ann 1943 Rev § 27.3178 [414]). — REPORTER.
See CL 1948, § 708.18 (Stat Ann 1943 Rev § 27.3178 [428]). — REPORTER.
BLACK, EDWARDS, VOELKER, and KAVANAGH, JJ., concurred with SMITH, J.