Fearnley v. Fearnley

• Decision Date: 11 November 1908
• Parties: FEARNLEY v. FEARNLEY.
• Court: Colorado Supreme Court

98 P. 819

44 Colo. 417

FEARNLEY v. FEARNLEY.

Supreme Court of Colorado

November 11, 1908

On Rehearing, December 15, 1908.

Appeal from District Court, City and County of Denver; Peter L Palmer, Judge.

Action by Samuel Fearnley against Otilla F. Fearnley. From a judgment for plaintiff, defendant appeals. Affirmed.

R. H. Gilmore, for appellant.

O. E Jackson and Geo. F. Dunklee, for appellee.

GABBERT J.

Robert Fearnley departed this life May 1, 1900. April 21st preceding his death, appellant, the wife of deceased, signed the following contract:

'This agreement, made this 21st day of April, A. D. 1900 by Otilla F. Fearnley, for and on behalf of the persons hereinafter mentioned, witnesseth:

'That for and in consideration of one dollar in hand paid to her by Robert Fearnley, and other good and valuable considerations receipt whereof is hereby confessed and acknowledged, she does hereby contract and agree and binds herself, her heirs, executors and administrators to pay the following sums to the persons herein named, upon the terms and conditions hereinafter specified:

'To Elizabeth Brook, sister of her husband, Robert Fearnley, or her heirs, of Bristol, near Leeds, Yorkshire, England, the sum of five hundred dollars;

'To Charlotte Atkinson, sister of her husband, Robert Fearnley, or her heirs, of Adwalton, near Bradford, Yorkshire, England, the sum of five hundred dollars;

'To Sarah Ann Yates, sister of her husband, Robert Fearnley, or her heirs, of Putsey, near Bradford, Yorkshire, England, the sum of five hundred dollars;

'To Annie Martin, sister of her husband, Robert Fearnley, or her heirs, of Bristol, near Leeds, Yorkshire, England, the sum of five hundred dollars; 'To Samuel Fearnley, of Leadville, Colorado, brother of her husband, Robert Fearnley, or his heirs, the sum of five hundred dollars.

'The said five hundred dollars to be paid to each of the above named persons, or, in case of their death, either before or after the time of the making of this contract, then to the legal heirs at law of any such deceased person, payment to be made as follows:

'One hundred dollars to be paid to each of the said persons or heirs within one year from the death of her husband, Robert Fearnley; and one hundred dollars on or before two years from his said death; and one hundred dollars on or before each year thereafter until the full sum of five hundred dollars each has been paid, as herein provided, to the said parties or their heirs; but that the said sums or any of the payments are not to bear interest.

'I also agree to give to George W. Fearnley, of Pittsburgh, Pennsylvania, the sum of five hundred dollars for his own use and benefit, to be paid in like manner as the above, one hundred dollars each year, the first to be paid within one year of the death of my husband, but in case of his death at any time, said sum or any unpaid portion thereof is to cease absolutely, and not, in any event, to be paid to his heirs.

'In witness whereof, I have hereunto set my hand and seal the day and date first above written.

'Otilla F. Fearnley. [Seal.]'

Subsequent to the death of Robert Fearnley, the plaintiff, in his own right, and as the assignee of the beneficiaries named in the contract, or their heirs, brought suit against Mrs. Fearnley upon the contract. The trial of the case resulted in a verdict and judgment in favor of plaintiff, from which the defendant appeals.

It is urged that the obligation sued upon is not a contract upon its face, for the reason that it does not appear that defendant thereby entered into contractual relations with any one. We are of the opinion that the contract in question clearly shows from the language employed that the defendant entered into the contract with her husband. It recites, in effect, that it is for the benefit of certain persons named therein, and that the consideration therefor was received from Robert Fearnley by the defendant. If, however, there is any doubt regarding this construction, it arises from the fact that the language of the contract is not sufficiently specific, but that doubt, in the circumstances of this case, is at once removed by the application of the rule, universally recognized, that in construing a contract the first point to ascertain is what the parties meant, understood, and intended, as determined by the words employed, so as to give full effect to their intention. In making this inquiry it is competent to consider the facts and circumstances surrounding the transaction at the time the contract was executed, and to take into consideration the subject-matter and situation of the parties at the time of its execution, as well as the object of the parties in making it. St. L. & D. L. & M. Co. v. Tierney, 5, Colo. 582; C. F. & I. Co. v. Pryor, 25 Colo. 540, 57 P. 51; True v. Rocky Ford C. R. & L. Co., 36 Colo. 43, 85 P. 842; San Miguel C. G. M. Co. v. Stubbs, 39 Colo. 359, 90 P. 842; Brotherhood Accident Co. v. Jennings (Colo.) 96 P. 985; C., R.I. & P. Ry. Co. v. D. & R. G. R. Co., 143 U.S. 596, 12 S.Ct. 479, 36 L.Ed. 277.

The circumstances under which the contract was signed by the defendant are substantially as follows: In 1899 the deceased executed a will, by which he bequeathed $500 each to the persons named in the contract, and the remainder of his property to his wife, the defendant. In January following, Fearnley, for reasons which it is not necessary to notice, believed that, in order to avoid disputes and litigation after his death, it was advisable for him to execute deeds conveying the property to his wife. He was advised by counsel that, in order to make such deeds effective, they must be delivered before his death. As a result of several deliberations with Mrs. Fearnley and his brother Joshua, Robert Fearnley revoked his will and executed deeds of his property to his wife, but did not deliver them, the arrangement with her being (to which she assented) that she would pay his brothers and sisters sums equal to the bequests made them by the will. Subsequent to this action he again advised with counsel, which was about April 7, 1900, informing him of the execution of the deeds, and a bill of sale of personal effects, and at this time stated that he wanted his brothers and sisters to have their bequests as fixed by the will executed in September, to which was appended a memorandum stating in substance that the will is to be of no effect and will not be probated, but will simply serve as a memorandum by which Mrs. Fernley is to pay the legacies to his brothers and sisters as therein specified. Fearnley was advised by counsel that it was necessary to deliver the deeds during his lifetime, which was accordingly done, and they were placed of record. Fearnley seemed still impressed with the idea that litigation was sure to ensue, and asked counsel if anything further could be done to avoid it. At this conversation (when the deeds were delivered) he also expressly stated that he wanted his brothers and sisters to have their bequests of $500 each, and, in order that there might be no question of the payment of such bequests, suggested that Mrs. Fearnley should execute a contract. To this suggestion Mrs. Fearnley stated that it would not be necessary, as she would carry out his wishes in this respect, as evidenced by the old will and memorandum thereto attached, but that if Mr. Fearnley wanted the contract she would execute it. Subsequently the will was prepared and signed by Mr.

Fearnley. At the time of its execution, however, he insisted that Mrs. Fearnley should sign a contract, whereby she bound herself to pay his brothers and sisters the amounts designated in the original will. Mrs. Fearnley assented to this arrangement, and a few days later the contract in question was presented to her, which she then signed.

From these facts and circumstances, which the testimony established, it is clear, if it is necessary to consider any extraneous matters for the purpose of reaching a correct understanding of the contract, that it was made by the defendant with her husband in consideration of the transfer and devise to her of all his property.

The contract is also attacked upon the ground that it was executed by the defendant without any consideration. This contention is based upon the proposition that at the time of its execution the title to the property of her husband was already vested in her. The premise is wrong. The testimony established that from the time Fearnley concluded to deed the property to his wife, in lieu of devising it by will, it was with the understanding that she would pay the devisees named in the will the respective amounts thereby bequeathed them, and the execution of the contract upon her part was but a consummation of their agreement. Prior to the execution of the contract by Mrs. Fearnley, the agreement between her husband and herself rested in parol. A promisor binds himself by merging an oral agreement into a written contract, and cannot escape liability thereon merely because the consideration had passed to him prior to its execution. Noyes v. Young, 32 Mont. 226, 79 P. 1063.

The clause in the contract which recites, 'I also agree to give to George W. Fearnley, of Pittsburgh, Pennsylvania, the sum of five hundred dollars for his own use and benefit, to be paid in like manner as the above,' is assailed upon the ground that the defendant thereby only entered into a voluntary promise to give, and hence, it is argued, such agreement, being without consideration, cannot be enforced. When interpreting any particular clause of a contract, the court is required to examine the entire contract, and may also consider the circumstances under which it was made and the purpose for which it was executed. C., R.I. & P. Ry. Co v. D. & R. G....