Hamilton v. Wead
| Decision Date | 25 March 1932 |
| Docket Number | 27889 |
| Citation | 241 N.W. 556,122 Neb. 854 |
| Parties | MAUD N. HAMILTON, APPELLANT, v. FRED D. WEAD, APPELLEE: MAUD N. HAMILTON, TRUSTEE, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Douglas county: WILLIAM G HASTINGS, JUDGE. Reversed, with directions.
REVERSED.
Syllabus by the Court.
1. Written contract set out in opinion construed.
2. In the construction of a contract, not only its express terms but what is necessarily implied from those terms should be considered.
3. Where the context of a written contract clearly implies or suggests that a certain word has been omitted, such word will be supplied by construction to fully express the intention of the parties.
Appeal from District Court, Douglas County; Hastings, Judge.
Action by Maud N. Hamilton against Fred D. Wead, impleaded with Maud N. Hamilton, trustee under the will of Charles W. Hamilton deceased, and wherein the defendant filed a cross-petition. From the judgment rendered, the plaintiff and the impleaded defendant appeal.
Reversed and cause remanded, with directions.
A. H. Murdock and Arthur C. Pancoast, for appellant.
Swarr, May & Royce, contra.
Heard before GOSS, C. J., DEAN, EBERLY and PAINE, JJ., and REDICK, District Judge.
March 13, 1906, C. Will Hamilton, party of the first part, and Fred D. Wead, party of the second part, entered into a contract, the terms of which were as follows:
The agreement, it will be noted, was originally for the term of five years, but on June 8, 1912, by mutual consent, the time was extended to May 19, 1916. Subsequent to that date, however, the contract was treated and acted upon by both parties as still subsisting up to the death of Hamilton January 14, 1928, the defendant Wead retaining possession and control of the property, collecting the rents, paying the expenses and taxes, and paying to Hamilton 6 per cent. interest on the purchase price, $ 4,900, until November, 1927.
By the will of Hamilton, after devising and bequeathing his estate to be held in trust, said Hamilton bequeathed to his widow, Maud N. Hamilton, plaintiff, "all of the annual income of said estate so held in trust to be used and enjoyed by her during the term of her natural life for her own sole and separate use."
The present action was brought by plaintiff to recover $ 588 and interest, being two years' interest claimed to be due under said contract from November, 1927, to November, 1929. Defendant Wead filed an answer and cross-petition in which he alleged that he was not obligated to guarantee or pay interest on said investment subsequent to May 19, 1916; that the transaction evidenced by said contract was a joint venture, and that defendant had paid more than half of the cost of the venture; that any interest of the plaintiff in said contract was held by her as trustee under another provision of the will, and prayed that said trustee be made a party defendant, which was done, and for an accounting of the amount due defendant under said contract, and that the same be declared a lien upon the interest of said trustee in said real estate. Replies were filed by Maud N. Hamilton as an individual and trustee, putting in issue the allegations of the answer.
It appears from the record that defendant Wead has paid out the following amounts:
$ 6,174.00
Taxes, including 1929, the sum of
6,089.17
Expenses, including 1930, the sum of
He collected rents, including 1930, in the sum of $ 6,438.21. It will therefore be noted that the taxes and expenses paid ($ 8,232.41) were in excess of the income ($ 6,438.21) in the sum of $ 1,794.20, which represents the total amount of Wead's investment in the venture, leaving out of consideration the interest paid to Hamilton ($ 6,174).
By decree of the district court it was found that the interest paid by Wead to Hamilton was a voluntary payment and that Wead was not entitled to credit therefor, nor any interest thereon. With this finding we concur. It was then found that Wead had paid out $ 7,968.20 more than he had received and treated this amount as the investment Wead had in the property. The above amount was arrived at by adding together the three items paid by Wead, viz., interest $ 6,174, taxes $ 6,089.17, and expenses $ 2,143.24, total $ 14,406.41, and deducting therefrom amount received, $ 6,438.21, remainder $ 7,968.20. Discarding the fraction, this amount was compared with $ 4,900 taken as amount of Hamilton's investment, and respective interests in the property declared to be: Wead 7968/12868, Hamilton 4900/12868, and ordered partition in those proportions. Maud N. Hamilton individually and as trustee appeals.
The principal dispute arises over the allowance of the interest paid by Wead to Hamilton to be considered as a part of Wead's investment, and in view of the finding that Wead's payment of interest was voluntary and that he is not entitled to any credit therefor, we are unable to understand why it should be included in the figure $ 7,968. On the basis of the findings the proportions should be: Wead 1794/6694 and Hamilton 4900/6694.
The property has probably decreased in value, and partition other than by sale does not seem practicable; it will be interesting, therefore, to glance at the results should the property be sold under the decree of the district court:
Under the decree if the
property sold for
$ 12,868
Wead's share
$ 7,968
Hamilton's share
4,900
This would simply give Hamilton his money back with interest, to which he is entitled before any profits or losses are divisible. Wead would make a profit of $ 7,968 less $ 1,794; in other words, Wead gets $ 6,174, interest on $ 1,794, and Hamilton the same amount on $ 4,900, and this notwithstanding Hamilton's investment of $ 4,900 has run for 24 years while Wead's $ 1,794 has accumulated during that period. Wead would therefore receive over 14 per cent. on his investment if he had put $ 1,794 into the original purchase price.
The same result in proportion is reached if the property sells for 1/2 or 1/4 of the above price, e.g.:
If property sells for 1/4
$ 3,217
Wead's share
$ 1,992
Hamilton's share
1,225
3,217
Wead's profit
$ 1,992
less
$ 1,794
198
Hamilton's loss
4,900
less
1,225
It seems to me these results demonstrate the incorrectness of the decree.
Upon the proper basis, as above
suggested, and prop
erty sells for
$ 6,694
Wead's share
$ 1,794
Hamilton's share
4,900
Hamilton receives his money back with interest and Wead is made whole on his investment, but is out the interest paid to Hamilton which he was to make good "from his own funds" in case of a deficit...
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