Court Opinion

ID: 8804664
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:44:26.521092+00
Date Added: 2024-06-11T17:04:03.029408
License: Public Domain

Mr. Justice Adams delivered the opinion of the court. The special cause of demurrer to the bill is that suit was not commenced by complainant within one year from November 1, 1904, the date of the trust agreement mentioned in the preceding statement, and counsel for the parties, respectively, apparently agree that the court sustained the demurrer and dismissed the bill on the ground that the present suit, which was commenced March 16, 1906, is barred by the following provision in section 6 of the trust agreement, to which the complainant was a party: “Nothing in these presents shall be deemed or taken to prejudice or affect the right of said Charles H. Baker, at any time within one year after the date of these presents, to commence, and thereupon to prosecute to final judgment or decree such action at law, or suit in equity, as he may elect, for the purpose of establishing the validity of his claim of the existence of a partnership between himself and said William T. Baker, deceased, in his lifetime, and for the recovery only out of so much of said property as is not and shall not be required to be applied hereunder by the trustee, or his successor, in his, her or its discretion, to the uses and purposes expressed in the foregoing clauses a, b and c of paragraph 1 of these presents, of such alleged partnership interest or share of said Charles H. Baker, and out of no other property; and the said Charles H. Baker does, hereby, further covenant and agree, that it shall be and is a condition precedent to the maintenance of such suit or action, that the same shall be commenced within one year after the date hereof, or thereafter be forever barred.” Appellant’s counsel contend that the trust agreement is void for 'want of contracting parties, want of mutuality and want of consideration. Waiving for the present the question, whether appellant is in a position to question the validity of the trust agreement, we will consider this objection. The agreement commences thus: “This indenture, made and entered into this 7th day of November, A. D. 1904, by and between Henry D. Baker, party of the first part, Howard W. Baker, party of the second part (hereinafter also called the ‘Trustee’), and Charles H. Baker, Bertha C. B. Ailing, Henry D. Baker and Howard W. Baker, in his own right, and as conservator and guardian of Anna F. Baker and Annie M. Baker, duly appointed by the Probate Court of the County of Cook, in the State of Illinois, and the Superior Court of the County of King, in the State of Washington, parties of the third part (hereinafter also called the ‘Distributors’, Witnesseth:” The conclusion of the agreement, and the signatures thereto, are as follows: “14. The distributees do hereby jointly and severally agree to and with the parties of the first and second parts to be bound by, all and singular, the terms and provisions of these presents, the said Howard W. Baker as conservator and guardian of the said Anna F. Baker and Annie II. Baker, pursuant to authority conferred upon him by orders duly entered by the Probate Court aforesaid in the matters of their respective estates. “15. The party of the second part does hereby accept the trusts created and in him reposed by these presents, and does, for himself, his successors, heirs, executors and administrators, hereby covenant and agree to and with the party of the first part and the parties of the third part, their and each of their successors, heirs, executors, administrators and assigns, that he, the party of the second part, will well, truly and faithfully execute the same according to the best of his skill, knowledge and ability. “In witness whereof, the parties to these presents have hereunto, and to five other instruments of like tenor, set their hands and seals, the day and year first above written. Henry D. Baker, [Seal] Howard W. Baker, [Seal] Chas. H. Baker, [Seal] By James Hamilton Lewis, His Agent and Attorney in fact. Howard W. Baker, Henry D. Baker, Bertha C. B. Albino, Howard W. Baker, As Conservator and Anna F. Baker. Howard W. Baker, As Conservator and Annie M. Baker.” [Seal] [Seal] [Seal] [Seal] Guardian of [Seal] Guardian of Distributees. The argument in respect to want of parties is, that Howard W. Baker, by paragraph 14 sufra, purports to contract with the parties of the second part, he being one of said second parties, and as one cannot contract with himself, the agreement is void. We think that counsel, unmindful of the maxim qui haeret in litera haeret in cortice, take too short a view. The parties to the agreement well knew, at the time of its execution, that one cannot contract with himself. This is shown by paragraph 6 of the agreement, in which the appellant contracts as follows: “Charles H. Baker does hereby covenant and agree to and with the party of the first part, the party of the second part, and the parties of the third part (other than Charles H. Baker), and each of them,” etc. The parties must be presumed to have intended that every part of the agreement should be effective and operative, and could not have understood or intended paragraph 14 as requiring Howard W. Baker to perform 1he impossible feat of contracting with himself. They must have understood by the paragraph that he was-contracting with parties other than himself. It is a fundamental rule that a contract must, if possible, bo so construed as to effectuate the intention of the parties and to sustain the contract, ut res magis valeat qmm pereat. It is also a rule of construction that if by one possible construction the contract would be illegal, and if by another possible construction it would be legal, the latter construction will be adopted. Chitty on Contracts, 11th Am. ed., 977; 2 Parsons on Contracts, 6th ed., star p. 500. A fortiori, if construing paragraph 14 one way involves an impossibility, and if construing it another way, of which it is susceptible, it is in accordance with common sense and the general intention of the instrument, the latter construction must prevail. In respect to the objection that the agreement is void for want of mutuality, counsel say, citing cases, that Howard W. Baker, who, as distributee, signed the agreement, as conservator and guardian of Anna F. Baker and Annie M. Baker, insane persons, cannot bind the persons or estates of his wards. Counsel fail to point out anything in the agreement by which it is sought to bind the person or estate of either of the wards, and, on examination of the agreement, we cannot find anything. The only provision in the agreement specifically referring to the wards, is one providing that the trustee shall pay to them such proportion or shares of the estate as they will, by law, be entitled to take. There is nothing in the agreement imposing any obligation on them, or requiring them to do anything*. Therefore, there is nothing to be enforced against them. The argument of complainant’s counsel must proceed on the ground that Anna F. Baker and Annie M. Baker are necessary parties to the agreement. If this be true, the sole way in which they could become parties is by their conservator and guardian, who, by section 5, chapter 85 of the statutes, has the care and management of their estates, signing on their behalf, and we know of no decision holding that the conservator of an insane person cannot consent, on behalf of his ward, to an agreement for the benefit of the ward, and which binds neither the person nor the estate of the ward. If the wards are unnecessary parties, and Howard W. Baker was without authority to sign the agreement on their behalf, his so signing did not make them parties, and the agreement can be enforced against the other parties to it. ' Lancaster v. Roberts, 144 Ill., 213. We find no want of mutuality in the agreement. The agreement was made for the mutual benefit of the heirs, including the complainant, and ample consideration for it is shown in the agreement itself. It is recited in the agreement as follows: “Whereas, it is the desire of the party of the first part, and for the benefit of each and all of the distributees, that the party of the first part should assign and deliver the property next hereinafter described, to the Trustee, to be held, managed, controlled, disposed of, applied and distributed in the manner herein provided.” The complainant then proceeds to assign and transfer certain properties to the trustee. We do not think complainant is in a position to attack the trust agreement. He does not, in his bill, claim that the agreement is void; but, on the contrary, pleads it and claims rights under and by virtue of it. It is contended by complainant’s counsel that the present suit is not barred by the limitation in paragraph 6 of the trust agreement, above quoted; that such was not the intention of the parties, and, also, that the commencement of the suit in the Hnited States Circuit Court was a compliance with the limitation. The date of the agreement is November 7, 1904. It is averred in the bill that the suit in the United States Court was commenced November 6, 1905, the last day but one of the time limited. "The present suit was commenced March 15, 1906. The intention of the parties is to be ascertained from the words of the instrument. In and by paragraph 6 of the trust agreement appellant covenants as follows: “And the said Charles H. Baker does hereby further covenant and agree that it shall be, and is, a condition precedent to the maintenance of such suit or action, that the same shall he commenced within one year after the date hereof, or thereafter he barred,” etc. This language excludes, as we think, all doubt of the intention of the parties. It will be observed that the “condition precedent” is not merely to the commencement of suit within a year, but is a condition precedent to the maintenance of such suit or action, that the same shall be “commenced within one year after the date hereof.” The bill does not inform us of the nature or contents of the bill filed in the United States court, but merely that it was against the defendants, and that complainant, on learning that, by reason of complainant being a- resident of the State of Washington and the legal residence of the Commercial Trust Company being in Hew Jersey, no relief could be granted against the Few Jersey company, for want of jurisdiction of the court, dismissed the bill. In other words, complainant dismissed that bill because it could not be maintained in that court against a necessary party. Riddlesbarger v. Hartford Insurance Company, 1 Wall., 386, was a suit against the insurance company on a policy, which contained this clause: “That no suit or' action of any kind against said company for the recovery of any claim upon, under, or by virtue of the said policy shall be sustainable in any court of law or chancery, unless such suit or action shall be commenced within the term of twelve months next after the loss or damage shall occur, and in case any suit or action shall be commenced against said company after the expiration of twelve months next after such loss or damage shall have occurred, the lapse of time shall be taken and deemed as conclusive evidence against the validity of such claim thereby so attempted to be enforced.” The policy was dated June 1, 1861, and was for one year. The loss occurred in March, 1862, and in June, 1862, the plaintiff commenced suit in the Kansas City Court of Common Pleas. The suit was dismissed by the plaintiff in June, 1864, and, within one year thereafter the plaintiff commenced suit in the Court of Common Pleas in St. Louis county, Missouri, and the suit was transferred from that court to the United States Court for the District of Missouri. The defendant pleaded the limitation above quoted, and the plaintiff replied the commencement of the suit in the Kansas City Court of Common Pleas. The defendant demurred to the replication, and the court, Mr. Justice Fields delivering the opinion, say: “The action mentioned, which must be commenced within the twelve months, is the one which is prosecuted to judgment. The failure of a previous action from any cause cannot alter the case. The contract declares that an action shall not be sustained, unless such action, not some previous action, shall be commenced -within the period designated. It makes no ■provision for any exception in the event of the failure of an action commenced, and the court cannot insert one without changing’ the contract.” The court concludes its opinion in these words: “The commencement, therefore, of the present action within the period designated, was a condition essential to the plaintiff’s recovery, and this condition was not affected by the fact that the action, which was dismissed, had been commenced within that period.” In Arthur v. Homestead Fire Ins. Co., 78 N. Y., 462, the policy contained this condition: “No suit or action against this company, for the recovery of any claim under or by virtue of this policy, shall be sustained in any court of law or equity, unless commenced within the term of one year next after any claim shall accrue,” etc. The loss occurred March 8, 1876, and, by the terms of the policy, the plaintiff’s claim accrued July 8, 1876. The plaintiff commenced a suit in August, 1876, but was non-suited on motion of the defendant, and the suit, from judgment in which the appeal was taken, was commenced October 12, 1877, more than a year after the plaintiff’s claim accrued. The court say: “That the plaintiff’s counsel failed to proceed in that action, and paying costs thereof abandoned it, cannot tend to the advantage of the plaintiff or confer a new right against his adversary. As the.commencement of that action does not bring the present within the limitation, neither does its failure extend the time. (Riddlesbarger v. Hartford Ins. Co., 7 Wall., 386.) The cases cited by the learned counsel for the respondent are abundant to show that waiver may be implied from slight circumstances, but none afford any support to the position that a successful defense of one action estops a party from insisting that a second cannot be maintained because commenced too late.” We are of opinion that the limitation in paragraph 6 of the trust agreement constitutes a bar to the present suit, and that the commencement of the suit in- the United States Court, which was subsequently dismissed by the complainant, was not a compliance with the limitation. This is said without reference to the question whether complainant was, or not, induced by the appellees to refrain from bringing suit within the period limited. AVhile it is averred in the bill that there were negotiations between complainant and some of the defendants, looking to a settlement of his claim, and that, trusting -to the same, he refrained from bringing suit till November 6, 1905, it is not averred that he was induced to so refrain by any acts or words of the defendants or any of them. On the contrary, the averments of the bill indicate that complainant was as anxious for a settlement as were the defendants. The bill avers that complainant made propositions which the defendants regarded inequitable, and they made propositions which he regarded inequitable, and that no satisfactory conclusion could be reached. When the court sustained the demurrer to the bill the complainant moved for leave to amend the bill, which motion the court denied. The bill is not verified by affidavit. The motion to amend was in writing, and is called a petition, and is signed by the solicitors for the complainant. It is averred in the written motion or petition that the matters set forth in the proposed amendments were unavoidably and unintentionally omitted from the bill, because of the sickness of Mr. E. N. Zoline, one of the counsel in the cause, who was charged with the duty of drafting the bill and had full charge of the pleadings. The petition is verified by the affidavit of the complainant, who deposes that it is true in substance and in fact. Then follow the proposed amendments, of which we do not deem it necessary to here consider any except such as are intended to account for delay in bringing this suit, which are, in substance, as follows: The defendants, except N. W. Harris & Co. and the Commercial Trust Co., and particularly Howard W. Baker, Henry D. Baker and Bertha Baker Ailing, separately and jointly, made various propositions of settlement to complainant during January, February, March, April and May, 1905, and continuously thereafter, and asked him not to bring this suit, and held out to him, as a reason therefor, that his bringing suit would injure the estate and embarrass the heirs and hurt their financial interests and injure the prospects of obtaining money in Chicago and conducting financial arrangements with IT. W. Harris & Co., etc. And said defendants, except those non compos mentis, frequently and repeatedly offered reasons to complainant why suit by him to establish his copartnership interest should not be brought, and that the income of the estate would be materially depreciated 'if he brought suit, and promised complainant that terms of adjustment satisfactory to him would be arrived at, and prevailed on him to defer bringing suit, and induced him to continue further negotiation. Other averments to the same effect are contained in the proposed amendments, including requests of some of the defendants to complainant, not to bring suit. Affidavits of Elijah N. Zoline and Francis S. Wilson were read in support of the motion, to the effect that the drafting of the pleadings was, by agreement of complainant’s counsel, left to Mr. Zoline, and that he had sole.charge thereof after his employment in the cause, and that Zoline, June 16, 1906, became suddenly ill of typhoid fever, and June 21, 1906, was taken to the Presbyterian Hospital, where he remained till July 8, 1906, and that he had in his possession certain papers necessary to prepare the second amended bill, which is the bill in question, and that, for the reasons stated, the amendments proposed were omitted from the bill. Mr. Custer, solicitor for the defendants, made an affidavit in opposition to the motion, to the effect that all necessary information1 for the purpose of inserting the proposed amendments in the bill, was in the possession of Mr. Lewis, solicitor for complainant, in ample time to have inserted the same in the bill. By section 37 of the Chancery Act, it is provided that the court “may permit the parties to amend their bills * * * on such terms as the court may deem proper, so that neither party be surprised nor unreasonably delayed thereby.” In the affidavit in opposition to the motion it is not stated that the defendants were surprised, or would be delayed, by allowance of the amendments, and, in the present state of the proceedings, it is not apparent that they would be unreasonably delayed. In Droullard v. Baxter, 1 Scam., 191, the court held “that a complainant has a right, considered unquestionable, to amend his bill before answer filed.” In Craig v. The People ex rel., 47 Ill., 487, an amendment, before answer, was allowed to a bill for an injunction, and this was assigned as error, in respect to which the court say: “As to the propriety of allowing the amendment, nothing can be clearer, and it is the constant practice of courts of chancery to allow amendments, certainly before answer filed, and in many cases after and before replication is filed.” Ib., 492. In Thomas v. Coultas, 76 Ill., 493, 496, it is said that sworn bills are always allowed to be amended, to prevent a failure of justice, when a proper case is shown. Bauer Grocer Co. v. Zellc, 172 Ill., 407, 412, is to the same effect. In Nelson v. Randolph, 222 Ill., 531, the lower court refused leave to file certain proposed amendments to a sworn bill. The court held that a proper showing’ had been made for the allowance of the amendment, and used this language: “If the allowance of the amendments would have made the bill one under which the appellants could have obtained the relief sought, or any equitable relief, the court should have allowed the amendments in furtherance of justice, and its refusal to do so is an abuse of discretion, which, may be reviewed on appeal.” The bill in this case is not sworn to, and the allowance of amendments to an unsworn bill is, as a general rule, a matter of course. It is averred in the bill that complainant and William T. Baker, deceased, were equal partners in the business described in the bill, and that the assets of the partnership are large and very valuable, and we think justice requires that the amendments shall be allowed, so as to enable the complainant to prove, if he can, that he was induced by the defendants to delay bringing the present suit within the time limited by the trust agreement. Whether he was so delayed will, of course, be for the chancellor to decide from the evidence. The decree will be reversed and the cause remanded with direction to permit the proposed amendments to be made, the appellant not to recover his costs of this court. Reversed and remanded with direction.