Opinion
June Term, 1900.
Abram Kling, for the appellants.
Michael H. Cardozo, for the respondent.
The parties to this action, being interested in the estate of one Francis W. Lasak, whose will was in dispute, entered into an agreement with others interested in the estate by which a scheme of settlement, advised by Calvin Frost, was to be carried out. Annexed to this proposed scheme was an agreement, to be signed by all those interested in the estate, and which appears to have been agreed to by all, the plaintiffs, however, making their consent subject to the following condition: "We agree to above on condition that we receive $180,000 net, and that Mrs. Ives receive surplus, if any, under the will, and make up deficiency." Mrs. Ives accepted the condition as follows: "I agree to modify the above agreement by accepting the conditions contained in above, signed by Mrs. Chauvet and Albert Chauvet."
To carry this understanding into effect, a formal instrument was executed by the parties, by which, after providing that all of the property of the estate should be conveyed and transferred to Mr. Frost, it was agreed that out of the proceeds of the sale thereof the sum of $50,000 should be paid to the plaintiff Albert L. Chauvet; that various other payments should be made to the persons named, and that out of one-third of the remainder there should be paid to the plaintiff Cordelia D. Chauvet the sum of $130,000; and that "if the said last-mentioned one-third share shall be insufficient to pay the said sum of one hundred and thirty thousand dollars to Mrs. Cordelia D. Chauvet, any deficiency therein shall be made up by Mrs. Margaret Seaman Ives, to whom it is agreed shall belong and be paid and delivered any and all payments, property and moneys which, excepting for this agreement might belong, be paid or delivered to Mrs. Cordelia D. Chauvet and Albert L. Chauvet, or either of them, directly or contingently, out or from the estate left by said Francis W. Lasak, deceased;" and this instrument was signed by the parties to this action. The parties interested in the estate, including the parties to this action, then united in conveying to Mr. Frost all of the estate, real and personal, of the testator. There seem to have been several subsequent agreements made between Mrs. Chauvet and the defendant, by one of which the plaintiffs released, sold and conveyed to the defendant all the rights, claims and demands which they or either of them had to the estate, real and personal, of Francis W. Lasak, deceased, or any part thereof and the proceeds thereof, upon the condition expressed in the said agreements that there was to be paid out of the proceeds of said estate $50,000 to Mr. Chauvet and $130,000 to Mrs. Chauvet. There was another instrument signed by the defendant dated May 6, 1893, addressed to Mrs. Chauvet, one of the plaintiffs, as follows: "In consideration of your signing the agreement with me, dated the 4th day of March, 1893, I agree that you (with Albert) will be paid and receive the sum of one hundred and eighty thousand dollars, upon the distribution of the estate under the arrangement between the parties together with the amount of counsel fees agreed on." Another agreement was made between Mrs. Chauvet and the defendant, which, after reciting the agreements and certain legacies to be paid to others, provides: "In other words, that said sum of $82,000 be a prior lien upon such third share and first paid, and the undersigned, Margaret S. Ives, hereby guarantees the payment of the same, and of the amount coming to Mrs. Chauvet, $180,000." It further appeared that Mr. Calvin Frost, to whom the property was conveyed, proceeded with the execution of his trust, the defendant alleging in her answer "that said Calvin Frost, upon receipt of the same, divided such proceeds so received by him in accordance with said agreement."
The court below dismissed the complaint upon the ground that the action was prematurely brought, the learned judge in his opinion saying that the meaning and intention of the parties "was that the sale and distribution of the estate should be proceeded with as proposed by Mr. Frost; that out of the proceeds of that sale the plaintiffs should receive, with the amounts realized by them or for their use out of the personal property, the sum of $180,000, and that if the estate should not realize enough to make the amount coming to them, according to Mr. Frost's scheme of distribution, equal to $180,000, then the defendant was to pay and make up to them the deficiency. If this be the true construction of the agreement between the parties, it is evident that no liability arises on the part of the defendant until the distribution of the proceeds of the sale has been completed, for not until then will it be possible to ascertain the amount of the deficiency which she has agreed to pay. It appears from the evidence that the distribution has not yet been completed. Frost's executors have in their hands upwards of $10,000, and they are also entitled, under a judgment of this court, to receive a considerable sum from the New York Life Insurance and Trust Company, * * * but the time has not arrived when the amount can be determined or its payment enforced." Upon the trial it was proved that the attorney for the plaintiffs called upon Mr. Calvin Frost in relation to the plaintiffs' claim; that Mr. Frost said that he had received the money as the proceeds of the sale of the property conveyed to him in pursuance of the agreement. Payment on behalf of the plaintiffs was then demanded, to which Mr. Frost replied that he would not pay unless Mrs. Ives directed him to do so, and that Mrs. Ives directed him not to pay. The plaintiffs having subsequently received from Mr. Frost $88,787.05, another demand on Mr. Frost was made for the balance due, which was refused. There was also evidence of a subsequent demand upon Mr. Frost who said that he had no other money in his hands with which to pay.
The substantial question is whether, under these agreements, the obligation of the defendant was a mere collateral undertaking that the plaintiffs would receive upon the final settlement of Frost's accounts the sum of $180,000, or an original and absolute promise to pay that sum to Mr. and Mrs. Chauvet in case they were unable to collect it from Mr. Frost. I am inclined to think that there was here an original promise, and that the plaintiffs were entitled to maintain the action. The original scheme proposed by Mr. Frost contemplated the conveyance of the interest of those becoming parties to it in the estate and a distribution of the proceeds thereof, of which the plaintiffs would have a definite share. The plaintiffs agreed to become parties upon condition that they were to receive from such proceeds $180,000 net, and consented that Mrs. Ives should receive any surplus which, under the agreement, would come to them upon the agreement that she should make up any deficiency, and that was agreed to by the defendant. The plaintiffs thus transferred to the defendant all their interest in the estate, or the right to receive from Frost the proceeds of the estate, except the sum of $180,000, and it was the intention of the parties, as evidenced by the instruments to which attention has been called, that upon the distribution of the estate by Frost the plaintiffs should receive the sum of $180,000. If the share of the plaintiffs under the original scheme had exceeded $180,000 the defendant would have been entitled to the excess, but a deficiency would have to be made good by the defendant. Frost actually received the proceeds of the property that had been conveyed to him, and the amount of such proceeds that the plaintiffs have received is less than the amount they were entitled to receive under the agreement. All that seems to have been paid by Frost to the plaintiffs is $88,787.05, and the demand upon Frost for the balance of the money was refused upon the ground that he had no money to pay the plaintiffs and that the balance which he had in his hands was claimed by the defendant. As between the plaintiffs and the defendant the plaintiffs were entitled to be paid this sum of $180,000 before the defendant was entitled to receive anything. Frost had received money sufficient to pay to the plaintiffs the amount coming to them. That money had been demanded from Frost and he had refused to pay. An accounting by Frost was not, under these instruments, a condition of the plaintiffs' being entitled to receive the $180,000. When Frost received that money applicable to the payment of this sum due to the plaintiffs, they were entitled to receive it from him. It is not disputed that Frost received sufficient to pay the plaintiffs, and the admission in the answer of the defendant, to which attention has been called, that the proceeds of the property were received by Frost and that he had distributed the same, with proof that the plaintiffs had demanded the money from Frost and had received from him all that he would pay them, was, I think, sufficient to justify the plaintiffs in maintaining an action to recover the balance, which, under the agreement between the parties, the defendant agreed that the plaintiffs should receive. The fact that a small sum of money remains in Frost's hands for which he has not finally accounted is not material, as Frost has refused to make any further payment to the plaintiffs on account of the moneys that were coming to them.
I think, therefore, that the judgment should be reversed and a new trial ordered, with costs to the appellants to abide the event.
PATTERSON, RUMSEY and McLAUGHLIN, JJ., concurred.
Judgment reversed, new trial ordered, costs to appellants to abide event.