Beach v. BeachBeach v. Beach
- Reporters:
- , ,
- Before:
- Baldwin
Thе plaintiff brought this action to the Superior Court in Hartford County on December 19, 1951, against the defendants Joseph W. Beach and George H. Day, executors under the will of Mary Batterson Beach, and the defendant Goodwin B. Beach. She claimed certain deficiencies in the payments due under a separation agreement between her and the defendant Goodwin B. Beach, the performance of which had been guaranteed by the decedent. The defendants denied that there was any deficiency. They also, in special defenses, alleged that the claim of the plaintiff was barred in part by the Statute of Limitations. The defendant executors further alleged that the plaintiff was estopped from asserting her сlaim against them because of her failure to give notice of any default to, or make any demand upon, their decedent during her lifetime. The trial court rendered judgment for the plaintiff against all the defendants and they have appealed.
A summary of the finding, with such corrections as are warranted, follows: The defendant Goodwin B. Beach and the plaintiff, husband аnd wife, resided in Hartford. Mary B. Beach and Dr. Charles C. Beach were the mother and father of Goodwin. On May 14, 1920, and August 29,1923, Goodwin and his brother, the defendant Joseph W. Beach, at the request of their mother created trusts from which the plaintiff was to receive the net income during her life. On September 15,1925, the plaintiff and Goodwin entered into a separation agreement. In connection therewith Goodwin set up a third trust, the net income from which was to be paid to the plaintiff during her life. The separation agreement provided:
The separation agreement contained a provision that “the mother and father of the party of the first part during her or his respective lives will by writing duly executed and acknowledged unconditionally guаrantee performance by the party of the first part of his obligations herein created, in consideration of a written general release to be executed and acknowledged by the party of the second part and delivered to the party of the first part for his mother and father, which release the party of the second part agreеs hereby to deliver on tender of said guarantee.” This guarantee by Mary B. and Charles C. Beach was in the following terms: “In consideration of the execution and delivery to us of a general release by the said Ethel G. C. Beach, the receipt whereof is hereby acknowledged, we do hereby unconditionally guarantee during our natural lives due performance оf the obligations herein created by the said Goodwin B. Beach. It is understood, however, that the said guarantee does not bind our estates or either of them after death.” The separation agree
Dr. Charles C. Beach died on February 11, 1948, and his estate has been settled. Mary B. Beach died on May 21, 1951. No written notice of default or demand for any deficiencies under the modified agreement was ever made upon Goodwin by the plaintiff. He was a trustee of the trusts created by him and knew or should have known of any deficiencies. On October 22,1951, the plaintiff filed with the executors under the will of Mary B. Beach a notice of claim and a demand for $14,707.85, alleged to be due on the guarantee by reason of claimed deficiencies of income which had accrued each year, save one, commencing with 1939. The executors disallowed the claim. It does not appear that any notice of default or demand for payment by reason of Goodwin’s default under the separation agreement was made upon
The parties, in an agreed statement of facts, set np a schedule showing the total income from the-three trusts, the incomе taxes paid thereon by the-trustee in behalf of the plaintiff, and the trustees5’ commissions, each year, from October 1, 1939, to-October 1,1951. The trial court reached the following conclusions: (1) The separation agreement was to be-construed so as to provide to the plaintiff an income of not less than $5000 each year, free of any income-taxes, and Goodwin was not entitled to credit for the-payment of such taxes by the trustees out of the income of the trusts. (2) The guarantee was absolute- and unambiguous, and no notice to, or demand for payment upon, Mary B. Beach during her lifetime-was required of the plaintiff. (3) The Statute of’ Limitations was no bar to the plaintiff’s cause of action because the statute does not run against payments contemplated by a continuing trust or by an. unconditional guarantee. Judgment was rendered for the plaintiff to recover from the defendants-$13,090.88 with interest and costs.
The defendants claim, first, that the plaintiff, and not Goodwin, must pay the income taxes upon the income payable to her under the trust. The answer to this claim lies in finding the intent of the parties-as expressed in their written agreement providing’ for the support of the plaintiff. Certain long established canons of construction are applicable. The-intention of the parties is to be found in the language they used when read in the light of their situation, and the circumstances connected with their agreement.
Preston
v.
Verplex Co.,
135 Conn. 187, 189, 62 A.2d 860;
Colonial Discount Co.
v.
Avon Motors, Inc.,
137 Conn. 196, 200, 75 A.2d 507. The words they
In the agreement as modified, the pertinent portion of the clause dealing directly with the payments to be made by Goodwin to the plaintiff was that he guaranteed that the income from the trusts “shall . . . net [the plaintiff] not less than [$5000] per annum for her natural life” (italiсs supplied). The word “net” is used as a verb. This use appears to have been deliberate and for a purpose. Under other provisions of the contract the plaintiff agreed to give up all her claims upon Goodwin for future support, for alimony in case of a divorce, and for dower rights, and Goodwin was relieved of all these liabilities. Further, Charles C. and Mary B. Beach were to receive from the plaintiff a general release, presumably of any claim against them whatsoever unless it was based on the agreement with Goodwin and on their guarantee. Henceforth, the plaintiff could look only to the agreement and the guarantee for her support for years to come. The trusts were a secondary consideration, from which income would be available. But the parties definitely contemplated that this income might not always be sufficient to supply the agreed amount, and therefore it was provided that any deficiency would be met by Goodwin personally.
The word “net” as a verb means “ [t] o produce or .gain as clear profit.” Webster’s New Internationаl Dictionary (2d Ed.). In
Wehrhane
v.
Peyton,
133 Conn. 478, 486, 52 A.2d 711, we said that the “ ‘net income’ of a trust estate ordinarily means the amount
Support for such an interpretation can be found in
Beach
v.
Beach,
Superior Court, Hartford County, No. 56822, in which the present plaintiff sued Goodwin and his mother and father on the separation agreement and the guarantee. In that case, which is referred to above, in the summary of the finding, judgment was rendered by
Dickenson, J.,
on April 11, 1938. The defendants’ counsel have discussed in their brief and oral argument the question whether that judgment makes res adjudieata the interpretation of the contract clauses herein discussed. It is not necessary for us to decidе the question. The plaintiff did not press the claim of res adjudícala in her brief or oral argument further than to argue that the decision in the earlier case “has a tremendous bearing” upon the decision of this one. The earlier case was brought upon the identical agreement involved here except that the amounts of the payments guaranteed by Gоodwin were stated to be $4000 annually for five years, $5000 for the next seven years, and $7500 thereafter. The plaintiff and Goodwin were involved, as well as Mary B. Beach, whose estate is a party to the present action.
The defendants’ second claim is that the estate of Mary B. Beach is exempt from liability by the terms of the guarantee which she executed. The guarantee was appended to the agreement of September 15, 1925. The terms pertinent to this discussion were
The second sentence quoted, if taken by itself, is ambiguous. It could be construed as conveying in further and different language the intent expressed in the portion of the first sentence quoted, that is, that so long as Charles C. and Mary B. Beach lived, and nоt merely so long as Goodwin lived, they unconditionally guaranteed the annual payments accruing during their lifetime. It could also mean that no liability for any default occurring before their respective deaths, could, if unenforced, be collected
The defendants’ third major claim is that the plaintiff is barred by the Statute of Limitations from recovering any sums alleged to be due for deficiencies for the fiscаl years of the trusts from the fiscal year ending September 30, 1939, through and including the fiscal year ending September 30, 1945. This suit having been instituted on December 19, 1951, any liability for these years, they assert, arose more than six years before the bringing of any action to enforce it. We shall consider this point, first, as it applies to Goodwin’s liability. This is an action at law upon a contract. Thе contract, as executed on September 15, 1925, was an instrument under seal. The subscription recites that the parties have “hereunto set their hands and seals,” and the letters “L.S.” appear after each signature. General Statutes § 7902. The very nature of the transaction recorded by the contract is such that the parties who executed it can be said tо have intended it to be
As to the defendant executors, a different situation is presented. The guarantee which the decedent executed did not purport to be, and was not, an instrument under seal. While she did guarantee the performance of Goodwin’s obligatiоns under the trusts as well as under the separation agreement, the liability against her in this ease arises, not because of Goodwin’s failure to perform his duties as
There is error in part; the judgment is affirmed as to the defendant Goodwin Beach but is set aside as to the defendant executors; and a new trial is ordered limited to the question of damages.
In this opinion the other judges concurred.