Israel v. Sommer

• Decision Date: 13 September 1935
• Parties: ISRAEL v. SOMMER et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

292 Mass. 113

197 N.E. 442

ISRAEL v. SOMMER et al.

Supreme Judicial Court of Massachusetts, Middlesex.

September 13, 1935

Report from Superior Court, Middlesex County; Walsh, Judge.

Suit in equity by David P. Israel against Emmeline R. Sommer and others, heard on master's report and certain motions with respect thereto. On report from the superior court.

Order in accordance with opinion.

J. M. Graham and A. S. Allen, both of Boston, for plaintiff.

F. H Stewart and L. Black, both of Boston, for defendant Emmeline R. Sommer, administratrix.

A. P Teele and E. S. Farmer, both of Boston, for defendants Hugo Stoltzenberg and another.

LUMMUS, Justice.

The facts appear in a master's report confirmed by the Superior Court. Adolph Sommer, born and educated in Germany was a druggist in California, where he first studied and then taught in the State University at Berkeley. There he discovered the formula from which he afterwards made his principal product, Viscol. About 1890 he removed to Cambridge, Massachusetts, and opened a factory. He lived alone, had no social relations, worked an unusual number of hours every day, never took a vacation nor allowed his employees to take any, permitted no conversation or co-operation among his employees, and dominated the business absolutely. He was ‘ industrious, alert, keen, strong willed and stubborn.’ Yet he was kind to his employees when they got into financial difficulties, and some of them remained many years in his employ.

In 1922, when seventy-one years old, Sommer married a widow of fifty-one, Emmeline R. Harnden, who had worked in the factory for more than twenty years. An ante nuptial agreement in Sommer's handwriting was executed and recorded. By it their property at death was to ‘ descend to their respective heirs at law or otherwise’ in accordance with their wills. When Sommer was murdered by robbers on October 20, 1933, his legal heirs, apart from his widow, were two children of a deceased sister in Germany.

As early as 1914 Sommer employed a lawyer to work at the factory and given all his time to the business, which Sommer conducted under the name of Viscol Company. Various lawyers served in that capacity for periods ranging from a few months to five or six years. In addition, he retained at times lawyers practicing in their own offices to handle special matters.

In December, 1926, Sommer bought a farm near Lowell, which he called Colab Farm. On the farm were old factory buildings. He had in mind removing his factory at some time to the farm, and also living on the farm when he should retire from business. His investment in the farm, and his losses in its operation, amounted to $200,000. Business at the factory began to be poor as early as 1931, his accumulated savings in banks had to be used to meet his obligations, and in the latter part of 1932 and 1933 some of his debts remained unpaid.

During 1928 and 1929 Sommer was anxious to find a person who in character, ability, industry and initiative was fit to assume executive responsibility and to succeed to the management of the business when Sommer should retire. About the middle of October, 1929, Sommer answered an advertisement inserted in a newspaper by the plaintiff to the effect that a ‘ law trained man seeks opening in mercantile or manufacturing house.’ Correspondence and interviews followed. Sommer told the plaintiff that he wanted a man with legal training to learn all about the business and eventually to manage it when Sommer should retire. In view of the prospects, the plaintiff accepted the position at $30 a week.

The plaintiff was born in London in 1896. When he was six, he came to this country, attended school in Salem, Massachusetts, and later went for a time to the high school. He then worked for his father in buying and selling upper leather, and in other business. In 1916, while still working, he began to attend a law school. He was admitted to the bar in 1921, and practiced at Salem until a few weeks after he went to work for Sommer, when he gave up his office at Salem and moved to Boston, in order to be near the factory.

About the time when he moved to Boston, the plaintiff told Sommer that he was working for small pay and losing his opportunities in practice, and ought to be protected by a definite arrangement. Sommer agreed, saying that he thought the plaintiff would be a satisfactory man. A partnership and a corporation were both considered, but Sommer decided that he wished a ‘ living trust’ formed, and told the plaintiff to wait, before trying to draft any instrument, until the plaintiff and Sommer could sit down and go carefully into the matter. The plaintiff objected that that might occupy months, and in the meantime he would be left unprotected. He obtained permission to draw an agreement which would give him some feeling of security. Twelve or fifteen successive drafts of such an agreement were made, and all were carefully studied and corrected by Sommer. On February 1, 1930, an agreement was executed. By it, the plaintiff agreed to devote himself to the business at a salary of $50 a week. Sommer agreed, when he should die or retire, that all his property should be conveyed to the plaintiff, the plaintiff paying to Sommer during his lifetime and to his widow after his death half the net profits of the estate and business. Liquidated damages for breach were established at $100,000 for breach by Sommer and $5,000 for breach by the plaintiff.

This agreement was deemed not the final agreement between the plaintiff and Sommer, but only a stop-gap until a deed of trust could be prepared. By oral arrangement, the plaintiff drew only $35 a week as salary, notwithstanding the written agreement. Late in 1930 the talk about the trust was resumed. Many successive drafts were prepared, studied by Sommer, and criticised by him. The final draft was agreed upon in the summer of 1931, but Sommer did not wish to sign it until after a mortgage to the East Cambridge Savings Bank should be executed and recorded on September 16, 1931. The trust instrument was signed on September 21, 1931. Sommer was reluctant to acknowledge it so that it might be recorded, for he wished it kept secret. But he did acknowledge it on November 9, 1932, before a notary public who happened to come to the factory to see the plaintiff. It was recorded on October 23, 1933, three days after Sommer's death.

The trust instrument purported to convey all Sommer's property, real and personal, to the plaintiff as trustee. Sommer ‘ shall operate, manage and control the conduct of said business, as * * * heretofore, for a period of five years from the date hereof, or until’ his death. By implication the trust property was to be used in carrying on the business. It was declared that Sommer intended ‘ to perpetuate the business of Viscol Company through the said Trustee David P. Israel by means of this Trust.’ After his retirement from active management, Sommer was to be paid by the trustee ‘ one half * * * of the net profits of said business, but not less than one hundred (100.00) dollars each week in weekly payments during my life time.’ Apparently after Sommer's death, his wife was to receive $100 each week out of the net profits of the business during her lifetime, and also $10,000 in cash within one year after Sommer's death, provided she would accept the provisions of the trust instrument within thirty days after Sommer's death. The trustee was to receive ‘ such salary and compensation for the management and operation of said business as in his judgment is fit and proper.’

The trust was to continue for twenty years after the death or retirement of Sommer. At the end of that period, the plaintiff was to have, as his own, half the trust estate, which half was to include at a nominal valuation of one dollar all the patents, trade marks, secret processes, formulas and the good will of the business. The other half was to go to Sommer's heirs at law living at the end of the period, and in default of heirs to the Reis Library of the State University at Berkeley, California. Sommer reserved the right to revoke the trust at any time before his retirement or death, but not after five years. The plaintiff or his estate was to be entitled to liquidated damages in the sum of $100,000 if he ‘ should fail to obtain the full and entire benefits of this Deed of Trust as is herein provided within the said five year period from this date, or if said Trustee should die or become totally incapacitated from doing work prior to the said expiration of said five year period.’

Before execution of the trust instrument, Sommer took it, with the approval of the plaintiff, for the purpose of obtaining independent advice concerning it, kept it several weeks, and then returned it to the plaintiff, saying that he had consulted someone about it and had found that it was just what he wanted. The master finds in substance that the plaintiff had explained honestly to Sommer the meaning of every provision of the trust instrument. There is no suggestion that the plaintiff did not work faithfully as long as Sommer lived, or that Sommer ever became dissatisfied with the transaction. Sommer never lost his mental power, but until his death remained keen, alert and continuously in control of the business.

The master finds that there was no undue influence or violation of duty on the part of the plaintiff, and that the execution and delivery of the trust instrument was the free act of Sommer, unless a violation of duty necessarily follows as matter of law from the facts stated in the report.

On October 23, 1933, the plaintiff brought this bill against Emmeline R. Sommer, who had taken possession of the property and business as administratrix, to restrain...