Amend v. Hurley

• Decision Date: 30 December 1944
• Citation: 293 N.Y. 587,59 N.E.2d 416
• Parties: AMEND et al. v. HURLEY.
• Court: New York Court of Appeals Court of Appeals

293 N.Y. 587

59 N.E.2d 416

AMEND et al.

v.HURLEY.

Court of Appeals of New York.

Dec. 30, 1944.

Appeal from Supreme Court, Appellate Division, Second Department.

Action by Anna Hoffmann Amend and another, as executors of Anna E. Hoffmann, deceased, and also as administrators with the will annexed of George J. Hoffmann, deceased, against Andrew J. Hurley. From a judgment, 267 App.Div. 612, 48 N.Y.S.2d 92, entered upon a nonunanimous order and new findings by the Appellate Division which reversed in part, modified in part, granted judgment for defendant upon his counterclaims, and affirmed in part an interlocutory judgment of the Supreme Court, after a trial by the Court (Nova, J.), without a jury for plaintiffs upon findings of fact and conclusions of law, decreeing specific performance of a contract, ordering an accounting and for damages, except as to so much of such judgment as provides that plaintiffs recover from the defendant the sum of $2,595.26, damages, and costs, plaintiffs appeal.

Judgment of Appellate Division reversed, and judgment of the Special Term affirmed. John P. McGrath, Thomas J. Kavanaugh, and Joseph A. McNamara, all of New York City, for appellants.

Lester Kissel, James B. M. McNally, Chauncey B. Garver, and Michael J. De Santis, all of New York City, for respondent.

RIPPEY, Judge.

George J. Hoffmann died June 10, 1937, then being the owner and proprietor of a sugar-weighing business in the city of New York which he had operated successfully and with large profits for more than thirty years under the trade name and style of ‘George J. Hoffmann & Company.’ For most of that time and at the time of his death, defendant was employed by Hoffmann on a yearly salary which included 37 1/2% of the profits in the conduct of that business during the latter part of his employment. By the terms of his will, which was admitted to probate, Hoffmann left his whole estate to his wife, Anna E. Hoffmann, and named her executrix thereof. She qualified as executrix and acted in that capacity until her death whch occurred on April 3, 1940. She left a will in which plaintiffs Amend and McNamara were named executors. They qualified as such upon the probate of her will and also were named administrators with the will annexed of her husband's estate and have since been acting as such.

From the time of Hoffmann's death, defendant actively sought to acquire and to operate his previous employer's business for himself alone and demonstrated no intention to continue to operate it for the estate. Matters reached a point when, on July 12, 1937, Mrs. Hoffmann had a conference with him with reference to his continuance of the business in behalf of the estate and he then notified her, definitely for the first time, that he would not act as manager of the business but was interested only in acquiring the business as his own. He then offered to pay her 50% of the profits of the business provided he should become the owner and should be allowed to run it entirely by himself, she to have no other interest. No agreement was reached at that conference between the parties and from that time on negotiations were carried forward principally between Joseph A. McNamara, attorney for Mrs. Hoffmann individually and for her husband's estate, and George W. Sheldon, a man of long practice and a member of one of the leading law firms of New York City, as attorney for Hurley.

A series of verbal conferences and written correspondence followed between the attorneys, who from time to time advanced various differing suggestions and proposals in behalf of their respective clients in an effort to reach an agreement, all without success. In that situation, it was agreed between the attorneys on July 26, 1937, that McNamara should draft a proposed agreement and submit it to Sheldon for examination. That he did in typewritten form on the same day. In this draft, the termination of the agreement was fixed for June 30, 1945. McNamara, however, tentatively provided alternatively with other provisions for his client's benefit, in article X ‘that in the event of the death of the party of the first part (Mrs. Hoffman) prior to July 1st, 1945, this agreement shall cease and terminate and all interest of the party of the first part thereunder come to an end as of the date of the death of the party of the first part. In the event, however, of the death of the party of the second party (Hurley) subsequent to July 1st, 1942, this agreement shall also cease and come to an end and all the rights of and party of the first part terminate as of the date of such death. Should the party of the second part die prior to July 1st, 1942, then and in such event there shall be due and payable and the party of the second part hereby grants a claim on his estate to the party of the first part in the sum of Twenty-five Thousand ($25,000.00) dollars.’ Clauses followed in that article authorizing defendant to elect to provide and to substitute life insurance for $25,000 on his life in place of the absolute claim in cash for that amount against his estate in the event of his death prior to July 1, 1942. The draft contained eleven separately numbered articles. After editing the draft to his satisfaction, Sheldon returned it to McNamara. Every one of the articles contained some changes, deletions, or additions in Sheldon's handwriting in ink, or, in some cases, a rider was attached, affecting not only the form but the substance of the article to which the same was applicable. When returned, it evidenced extensive and exhaustive examination by Sheldon and care on his part for the utmost of protection of his client's interests with carefully drawn provisions for his benefit which were not contained in McNamara's draft. There was no evidence that he had missed any opportunity to drive a good bargain for his client. Among other things, he draw lines through the entire part of article X quoted above and wrote opposite that part of the draft on the margin in large letters the word ‘No’ and heavily underscored it. He made changes in the clauses relating to life insurance designed to protect Mrs. Hoffmann against losses under the contract. Thereupon the draft with its changes was sent to McNamara who retyped it verbatim with all changes and additions made by Sheldon, except in three minor particulars which do not change the wording, substance or effect of article X as reprepared by Sheldon. Otherwise, neither in punctuation, words nor substance did the retyped instrument vary in any particular from the draft as edited by Sheldon. McNamara then presented the completed contract to Mrs. Hoffman who discussed it at length with her attorney. She was not satisfied with the changes regarding life insurance protection against the death of Hurley before July 1, 1945, but finally acceded to the changes made by Sheldon and executed the final draft in duplicate on July 28, 1937. The agreement so executed was then delivered to Sheldon who presented it to his client who signed it in duplicate and one of the duplicate copies was given to McNamara.

So far as important here, the final agreement as executed by and delivered between the parties on July 28, 1937, provided that Mrs. Hoffmann, individually and as executrix of her husband's estate, should pay Hurley a doubtful claim he had made against the estate for $55,000 together with 37 1/2% of the profits of the business between January 1, 1937, and the date of Hoffmann's death, and should transfer the...