136 Minn. 83 | Minn. | 1917
He owned two 100-year ground leases of adjoining tracts at the corner of Fourth street and Nicollet avenue in Minneapolis. The rental to be paid under the two leases was then $20,900 a year and was increasing at the rate of $300 a year. Each lease gave an option to buy, the price for the two tracts being $400,000.
The buildings on this land deceased had purchased, and on the purchase price he owed nearly one hundred thousand ($100,000) dollars, payable in monthly instalments. These aggregated over $9,000 a year, besides interest on the deferred payments. His interest in this property was further incumbered by a mortgage, called the Blatz mortgage, for $25,000, payable in instalments of $500 a month. These buildings deceased had remodelled into a single unit and had operated here the Eogers hotel and café, the hotel at a substantial profit, the café at a large loss. Portions of the ground floor he leased for business purposes.
The court found that the value of the land and buildings was not more than the amount of the purchase price named in the options to purchase the land and the amount unpaid on the purchase price of the buildings and the incumbrance thereon. These aggregated a little over $500,000. There is evidence to sustain this finding, though some witnesses placed the value higher.
Deceased also owned a saloon at 29 South Fourth street, operated in the building above mentioned in the name of his brother Walter W. Rogers. Walter had an undivided one-third interest in the profits of the business. This business netted deceased about $20,000 a year.
He owned also a two-story building on Hennepin avenue incumbered by two mortgages for more than $200,000. In this building he operated the “Hub” saloon. This netted him about $20,000 a year. In this building was also operated the Unique Theatre. Deceased had a half interest in this. This investment was profitable. In this building he also operated a delicatessen which was a small producer.
He owned a saloon business at Fourth street and Fourth avenue south, conducted in his name. This was a small producer.
He owned a half interest in 9,000 acres of land in Texas. On his share, he owed $10,500 and was obligated on account of one Adams, his co-owner, in about $27,000 more, and lawsuits were pending involving an alleged liability of $10,000 more.
He also owned merchandise worth $30,000; had $8,419.76 in the bank, about $2,500 cash on hand; had a policy of life insurance pledged as collateral to the second mortgage on the Hennepin avenue property, and had some accounts receivable of doubtful value.
In addition to the debts above mentioned, he owed to banks, $38,000, on accounts $28,000, to his brother Walter, $16,200, and $2,200 on a note. His debts in all amounted to about $420,000. His property was worth more.
Deceased was a man of much business capacity. His net income from his various operations the court found to be $50,000. It was at least this much.
The widow was dissatisfied with the appointment of two of the Rogers brothers as executors and trustees and with the provision made for her in the will. Soon after the death of deceased, negotiations were begun which were participated in by the widow, the Rogers brothers, Benz, and Frank B. Hubachek, the attorney of deceased. The result of these negotiations was that a contract was entered into by the terms of which it was stipulated that the widow is to receive an allowance of $500 a month, the use of the room she occupied in the hotel, and her meals at the hotel café
Plaintiff now seeks to set this contract aside and asks to be restored to her rights .under the law, alleging that the contract was obtained from her by fraud, by undue advantage “taken, to their own manifest benefit and profit, by persons holding a fiduciary relationship,” and that she acted without proper understanding on her part of her lawful rights, and that the contract was “grossly inadequate if not entirely lacking in consideration.”
Nor could the contract affect the rights of those not parties to it, and it may be conceded that as applied to those who would take under the will in the event of the death within ten years of all parties to the contract, the contract was of no effect.
It is very clear, however, that the parties might by contract make any disposition they pleased of the property rights acquired by them from deceased, whether acquired under the will or independent of it. This is what they in fact did do.
Even if they practiced no fraud, still if plaintiff was, through ignorance, or want of disclosure of her legal rights, or of the condition of the estate, led into an improvident contract of settlement, a court of equity will relieve her therefrom. Brown v. Brown, 108 Mass. 386; Garn v. Garn, 135 Ind. 687, 35 N. E. 394; Ludington v. Patton, 111 Wis. 208, 86 N. W. 571; State v. Probate Court of Hennepin County, 129 Minn. 442, 152 N. W. 845, L. R. A. 1915E, 815; Corey v. Corey, 120 Minn. 304, 139 N. W. 509.
(1) The court finds that Hubachek “fully, fairly and accurately stated to the plaintiff what her legal rights were,” including her right to renounce the will and claim her homestead rights, that they disclosed to her the facts and information within their knowledge in relation to the estate, and that each acted with entire fairness and good faith toward plaintiff. We have examined the record with much care, and it is clear to us that there is evidence which amply sustains this finding.
(2) The trial court found that this was not an improvident contract, but that, on the contrary, the property rights secured to plaintiff thereby afford better protection and assurance than any property, interests or
The contract gave plaintiff a decided advantage over the terms of the will. Instead of $2,500 a year, it gave her $6,000, a home and half price fare at the café, and, instead of a half interest in the estate contingent on her living until it was divided, it gave her a vested half interest in the estate on division.
We are more interested however in a comparison of her rights under the contract and her rights under the law. As compared with her rights under the law, her rights under the contract stand thus: Plaintiff had the right to repudiate the will and take her statutory portion. The provisions of the will being given expressly in lieu of her statutory portion, she could not take both. The hotel being the home of deceased and plaintiff, she was entitled to hold it as a homestead exempt from all debts not a lien thereon, to the limit of one-third of an acre. Gowan v. Fountain, 50 Minn. 264, 52 N. W. 862; In re Emerson’s Homestead, 58 Minn. 450, 60 N. W. 23. The hotel buildings covered somewhat more than one-third of an acre. She was also entitled to an allowance for maintenance during the settlement of the estate, and to one-third or perhaps one-half of all other property, subject to payment of the debts of the estate.
Had the property left by deceased been the unincumbered fee of real estate, and had he left no debts, it is quite probable that her rights under the law would have been greater than her rights under the contract. Had matters then stood as they stand now after five years effective administration, her rights under the law would doubtless have been preferable. But no such situation existed. The debts were large. The bank, doubtful of what would happen, since the personalty of deceased had been withdrawn, applied the ready cash on deposit on its indebtedness. One saloon license had been canceled. It was feared the others might be. Plaintiff was confronted by this situation. If she elected to take what the law gave heT, she could take as her homestead only part of the hotel building. Yet it was all used and operated as a unit. She would not be entitled to her share in the balance of the estate until the debts were paid. Then she would receive a share of what should be left. What that would amount io was problematical. To meet present needs it was nothing to her. She
Two things more should be mentioned. The contract is assailed because it gives to Walter the interest in the 29 South Fourth street bar and also a share with his brothers and sister in their half of the estate, whereas the will gave him only one of these in the alternative. The portion of the contract defining Walter’s interest in this property is not wholly free from ambiguity. It is not altogether clear whether the contract means that Walter continues to own the same one-third interest given him by the will, or whether it means to vest in him the whole ownership of that business, in which event it will not be an asset of the estate to be divided. Counsel for Walter in his brief sets this question at rest by conceding that the contract does not vest the whole ownership in Walter, but that he merely retained the right therein mentioned in the will, and that the reason for the peculiar language of the contract was that the parties desired to place the whole title to this saloon in Walter in order to protect the license against question by municipal authorities. So construed, this portion of the contract, while it gives Walter more than his share
The other provision of the contract calling for special mention is the one which gives to the executors power to sell “to such person, or persons, including themselves, or either of them as individuals, as to them shall seem meet and proper.” If this provision were inserted with the purpose of giving the executors power to buy of themselves for their own personal benefit, it would go far to cast suspicion upon the whole contract. By its terms, the contract gives this power, but the evidence on the part of defendants is that the purpose of this provision was to enable the executors to convey any of the liquor saloons to themselves as individuals in order to protect the business from attack on the ground of legality, because of its being conducted by executors and not by an individual. No attempt has ever been made on the part of any executor to buy. Should they attempt to do so, the courts in which the estate is administered can amply protect the rights of all parties. In view of the explanation given, we think this clause should not be held to invalidate the contract.
Order affirmed.
After reargument the following opinion was filed on May 4, 1917:
After full reargument and careful reconsideration of this case, we are of the opinion that the original decision should be adhered to.
The tri-partite agreement which is the subject' of the action was primarily an agreement between persons interested in an estate readjusting their interests therein, subject of course to the demands of creditors or other persons who might be interested in the estate. The parties of the second part, executors under the will, were merely the medium for carrying some of the provisions of this agreement into effect. Both under the will and under the contract, they were trustees as well as executors. If there were stipulations which they could not carry out as executors, we see none that they could not carry out as trustees. "We sustain the decision of the trial court that the contract is a valid disposition of the rights of the parties to it. That is the question before us.
The extent to which the contract is an executed contract and the extent to Avhich it is executory, are questions not important here. We
We do not deem it wise or proper to enter upon a construction of the will or the contract for future guidance of parties or courts in meeting questions that have not yet arisen. We had best determine only the issues now before us.. The construction of neither the will nor the contract is for this court in this case, save as construction may be necessary to determine the validity of the contract.
Some inaccuracies of statement in the original opinion should be corrected. The opinion stated that “not the slightest relation of trust or confidence existed between plaintiff and the Eogers brothers. She disliked and distrusted them heartily.” This language was used with reference to all the Eogers brothers as individuals. It was not intended to refer to the relation of the two who were executors by reason of the fact that they were such. As executors or trustees, however, their duties to plaintiff were not greater than were those of Benz and Hubachek, and the finding that those duties were fully performed we sustain.
The opinion stated that the will authorized the executors to hold and manage the estate for ten years, “with power of sale and power to earlier settle and divide the estate.” The quoted clause is incorrect. The will empowered the executors to reduce the assets to cash earlier than the end of the ten-year period but not to make a division. In fact, while the administration in the probate court might under the law be closed and the estate assigned to trustees, the will did not so provide, and the trust created by the will contemplated that there be no division of the property until the end of ten years.
The contention is made that the last paragraph of the contract authorizes a division of the estate between the parties to the contract before the expiration of ten years, and that this vitiates the whole contract. The contract taken as a whole, clearly requires that the interests of these parties be held undivided until the expiration of the ten-year period.
The procedure by which the estate will be divided is matter to be first determined by the court of first instance. In this connection we desire to make further reference to one clause in the former opinion. It states that “a probate court can only distribute the property according to a will of a testator or according to the law of descent in case of intestacy. It cannot distribute property according to the contract of the
The contention is made that the order of the probate court, annuling an assent in writing by plaintiff to the will, is a prior adjudication of the invalidity of the contract. It is not. That order was simply an order relieving plaintiff from what in terms was an assent to receive what the will gave her notwithstanding the fact that those rights had been enlarged by the contract of the parties. The same order denied to plaintiff the right to renounce the will.
See correction in third paragraph on. page 921.
See limitation in last paragraph on page 921.
See limitation in second paragraph on page 921.