122 N.Y.S. 557 | N.Y. App. Div. | 1910
The following facts aré uncontroverted: David Hiscox, the "father of the parties, died January 25, 1906, leaving a last will and testament, which was duly admitted to probate, under the ■ provisions of which letters testamentary issued among others to the defendants ; they qualified and have since served as executors. He had'for many years been engaged in the manufacture and sale of patent medicines and toilet articles, and o-wned'the trade marks used in connection with the business-, the formulas and recipes under which the medicines were manufactured, the buildings in which the busi
The day after their father’s death the defendants went to the office of an attorney and caused him to prepare the agreement which it is sought to set aside in this action. The agreement was prepared complete, as executed, with the exception of the date,- and a clause providing that it should become binding upon each of the parties of the first part, the widow and • daughters, as soon as executed by them or either of them, “ notwithstanding that the same may not be executed by any other party or parties of the first part,” which were inserted later.'- By its provisions the widow and daughters released to their brothers, the defendants, the -business which the husband and father had conducted in his lifetime, together with all patents, trade marks, copyrights and the good will of the business, and agreed to execute any further instrument necessary to carry such transfer into effect, and to execute a deed conveying to-the defendants the premises upon which the business had theretofore -been conducted, together with the buildings thereonj “and everything connected-therewith.” A- deed was later executed and delivered, and is also sought to be set aside. The consideration expressed in this instrument was, first, the payment, by the defendants to the widow of ‘$4,000 per year; to each of -the daughters $1,000 per year “ for and during.tlieir natural lives, or as long as said business shall remain profitable and in the possession and control of the parties of the second part” (the. defendants); to the incompetent $1,000. per year during his natural life; and second, the assumption and agreement to pay (by the defendants) Dauchy & Go. the balance due them, stated to be about $30,000; the indebtédness owing the estate of Bawolle, stated to be $130,000, “ and all other indebtedness of said business of Hiscox & Co.” On the day of the funeral the defendants,, accompanied by their attorneys, met the widow and daughters at the house of the deceased, and after the reading of the will the parties had a conversation with reference to the- future. As to the details of this conversation the several-witnesses differ. One of thp attorneys^ testified: “ That paper [the agreement] was read and discussed there at the meeting
It is undisputed that in the three years following their father’s death the defendants (for the services for which they .had been severally paid $2,000 per year in their father’s lifetime, and the value of which he placed at $3,000 each per year in his will), in addition to each taking from the income of the business $6,000, which they term wages, divided between themselves practically $100,000; ■ that after payment of this sum and the running expenses there remained as the net profits of the business an average of $9,000 a year, and that the yearly profits are rapidly increasing in amount. Ho payments have been made or money set aside for meeting the payments provided for by the Rawolle agreement commencing May 15,1910,-and only $20,000 has been paid bn the Dauchy claim.
That the agreement was a very unwise, disadvantageous and, if upheld, a very disastrous one to the plaintiffs, is very apparent. The amount received by the defendants from the profits of the
Wages, $2,000 each per year...........:..........■ . $12*000 00
Salary, together, $33,000 per year............99,000 00
In addition to which there was a net yearly profit of '■'• $9,000................................. 27*000 00
'A total of.......... ...:.v ................. $138,000- 00
Under the will the-defendants would have received $3,000 each per year.. $18,000 00 ■
■ Increased by increased profits: '•
In 1906, nothing — profits $27,000.. - :'.
In 1907, profits $35,000......A____V. 590 00
In 1908, profits $40,000._______'____1,520 00 -
$20,110 00 .
The incompetent son. would have • received............................. - 3,000 00. ... .
Mr. Hughes..^......,........... 6,0.00. 00
The widow until her death........... . 10,000. 00
The three daughters, $1,000 each..... 3,000 Ó0 , . . . .
_ ----- 4,2110 00
Leaving................................... $95,890 00
to apply upon the debts' of the testator, an average of practically $30,000 per year. It would thus appear, that •■this; .valuable estate might, have been distributed by June 1, 1911, for. although the $130,000 debt, payable in monthly installments commencing in May, 1910, would not then have been wholly due and payable/ the fair presumption is that the creditor would have permitted it to-be then paid in full. The plaintiffs would then each have come into possession of one-fifth of the business and plant, after deducting a sum sufficient to produce the yearly income of $1,000 for- the incompetent son. It is idle to argue that the business and plant were, at the time of the testator’s death, of littlé value. Less than six years before he had paid $180,000 for his copartner’s interest; and a business capable of producing average yearly net profits of $46,000, constantly increasing, with trade marks, .formulas and
It is difficult to conceive a state of facts more clearly bringing a case within the rule that whenever the relations between the contracting parties appear to be of such a character as to render it certain that they do not deal on terms of equality, but that either on the one side from superior knowledge of the matters derived from a fiduciary relation, or on the other from dependence or trust, justifiably reposed, unfair advantage is rendered probable, the transaction is presumed void, and it is incumbent upon the stronger-party to show affirmatively that no deception was practiced, and all was open, fair and understood. (Cowee v. Cornell, 75 N. Y. 91, 99.) This rule was .considered and applied by this court in Dolan v. Cummings (116 App. Div. 787; affd., without opinion, 193 H. T. 638), and is a controlling authority in the case at bar. This burden the defendants failed to sustain, and the presumption that the agreement and deed were void was not overcome by the evidence. The fact that the plaintiffs did not, before signing the agreement and
It is contended that the plaintiffs are estopped from attacking the agreement because of their having received and retained the property to which under its provisions they became entitled without tender or return of the same to the defendants or the. estate they represent, and the trial court found the existence of the facts involved in the proposition. In making this finding the learned trial justice must have overlooked the fact that upon the trial, and following his statement when' the question was raised, “ I will allow him to set himself right by offering now to return anything they .have received,” there Was a tender made in open court of everything the plaintiffs had received under the agreement, and the complaint was permitted to be amended accordingly, and that he refused to allow the trial to proceed at that'term until the exception taken by the respondents to the-allowance of such amendment was expressly waived. Further than this the plaintiffs owed no duty to return the money received, for the reason that they were entitled to receive and retain it under the provisions of the will, the amounts being the same. (Kley v. Healy, 127 N. Y. 555, 561.)
There is no merit in the contention that the. agreement for and division of the mining stocks and other property between the parties presents an executed agreement to set aside the terms and provisions of the Will. In Matter of Hiscox (supra) it was held that, conceding this contention, the agreement should not be extended beyond the property immediately affected thereby, and it has no bearing and constitutes no defense to the plaintiffs’ cause of action presented by the record.
The exceptions present reversible error-; the judgment must,, therefore, be reversed and a new trial granted, costs to abide the final award of costs.
Hibschbero, P. J., Woodward, Thomas and Carr, JJ., concurred.
Judgment reversed and new trial granted, costs to abide the final award of costs.