Trousseau v. Cartwright

OPINION OF THE COURT BY JUDD, C.J. (FREAR, J., Dissenting.) At the term of this court held in September, 1895, in overruling a demurrer we decided many points of law raised and sent the case back to the Circuit Court, First Circuit, for trial. The case came on for trial in December last before Circuit Judge Magoon, jury being waived, who, on January Jth last,, filed his decision disallowing the principal sum sued for, but giving judgment for the annual payments stipulated to be in — 353 — lieu of interest. The contract sued upon is an agreement in writing, made in 1882, between the late Doctor Trousseau and the plaintiff, who was alleged to be his “separated wife,” by which Doctor Trousseau (defendants’ decedent) admitted as absolutely correct the claims and demands proved by Madame Trousseau on the 11th March, 1882, amounting to 150,865 francs and 50 centimes, of which he engaged to pay immediately 20,000 francs, and also on the 1st January of each year thereafter, beginning January 1, 1884, a sum equal to 5,000 francs to be remitted by the Drench Consul to Madame Trousseau, in Paris, and to be regarded as interest on the capital remaining of 130,865 francs and 50 centimes. Mons. Trousseau then engaged, “if his circumstances allow and as soon as they allow him to discharge the total amount of his debt to Madame Trousseau, by paying over to her the capital which will remain due to her.” There is also a provision that “as soon as this capital is reduced to 100,000 francs, the annual sum of 5,000 francs settled as above will decrease in proportion as the total debt is extinguished,” &c. Another provision is that as soon as the first installment of 20,000 francs is paid Madame Trousseau was to discontinue a case then pending in our court against Doctor Trousseau for a larger amount. (This sum was paid and the case was discontinued.) The last provision is that the articles of agreement should be performed in good faith by both parties, and in the event of non-payment of any of the sums mentioned at the date when it falls due, Madame Trousseau will be at liberty to renew proceedings upon the mere information which shall have been given to her by the Drench Consul at Honolulu that the sum of money has-not been paid at the date when it falls due. (The agreement is set out in full in Trousseau v. Trousseau, ante, p. 139. The annual payments of 5,000 francs were regularly-made until 1st January, 1894, but none was paid thereafter,, and no part of the principal was paid by Doctor Trousseau, during his lifetime. In order to sustain the conditional promise of Dr. Trousseau-. — 354 — tliat he would pay the principal sum “if his circumstances allowed him and as soon as they allowed him,” the plaintiff introduced as evidence of his ability to pay the principal sum •sued for, which reduced from francs to dollars is $26,173, his last will and testament, executed IVIarch 8, 1894, wherein he 'devised all his property to one hfakanoe, a native woman, in which he declares: “I die poor, and am only sorry for her sake, as I never had any ]ove for money and alioa/ys had enottgh.” There was also introduced in evidence the executors’ inventory of the decedent’s property, showing the liabilities (secured by mortgage and otherwise) to be $19,843.61, and the property, real and personal, estimated by the executors to be worth $35,914.01, which would leave the net assets to be $16,070.40. The cost of the decedent’s property is put by the executors at $62,317.83, but they estimate the actual value to be, as stated, $35,914.01. The trial court held that, as it was “extremely uncertain whether an estate will realize the expectation of an executor entertained several months before the assets have been turned into cash,” he could not give a decision based upon such testimony, and therefore declined to find for the plaintiff the principal sum, but allowed the arrears of the yearly installments of 5,000 francs, the sum of $1,158,16, its payment not being conditioned upon ability to pay. The plaintiff excepts to the finding of the court in disallowing the principal sum. In reviewing this case we remark that the trial court was right in holding that the promise of Dr. Trousseau to pay the principal was not absolute, but was conditioned upon his circumstances allowing him to pay it, and that ability to pay must be shown as a prerequisite to recovery. But it seems to us that the trial court proceeded upon the. theory that the test of the ability of a promissor, who has died, to pay is the amount of assets which he may happen to leave at his death. This is not the test. The plaintiff must show that the promissor’s circumstances allowed him to pay. Certainly the existence of clear assets, over all liabilities, sufficient to discharge the whole — 355 — amount, would be evidence, but the converse is not true, namely, that the amount of property left by the promissor after all Ms other debts were paid in full, if not sufficient to pay the principal sum sued for, is not evidence of his inability to pay during his lifetime. In discussing the question whether the evidence adduced shows ability to pay during the lifetime of Dr. Trousseau, we must remember that he declared in the agreement that he owed the principal sum; that he promised to perform the agreement in good faith, and that he would pay the principal as soon as his circumstances would allow him to do so. The agreement contemplates payment by Doctor Trousseau of the principal by installments, provision being made for the proportional reduction of the yearly payment of 5,000 francs, as soon as the capital sum was reduced to 100,000 francs at the rate of 5 per cent. Whenever the principal debt should be paid the interest would cease, it having been reduced proportionately as the principal was reduced. Another expression in the agreement sustains the view that partial payments by Doctor Trousseau were contemplated. It is in the latter part of the first clause of Article 4, where he engages, if his circumstances allow him, &c., “to discharge the total amount of his debt to Madame Trousseau, by paying over to her the capital lohioh mil remain d/ue to her.” These words “which will remain due to her” would be unnecessary and meaningless unless it was contemplated that the principal was to be reduced from time to time as the Doctor was able to make payments. Ho-where in the agreement do we find an expression that implies that the decedent’s circumstances must allow him to pay the principal sum in full at one time, or he be freed from the obligation to pay it at all. A person having made such a promise, if construed the other way, could easily defeat his liability by expending his money or giving it away as fast as he received it, in order never to have enough on hand to pay the debt in its entirety. How “good faith” would require that where the decedent — 356 — earned and received sums of money over and above tbe reasonable expenses of living of a man in Ms position, be should apply it to tbe discharge of this obligation. That be was in receipt of money over and above bis reasonable expenses is evidenced by tbe inventory on file, where, for instance, $10,974 were shown to have been expended by him in tbe purchase of 28 ostriches for $7,950, and tbe remainder of this sum in buildings and other equipments of an “ostrich farm.” To say tbe least, tbe investing of over $10,000 in a new and hazardous enterprise is some evidence that Dr. Trousseau’s circumstances admitted of bis paying at that time something on account of tbe debt be owed Madame Trousseau. Another item in tbe inventory is “Eoat House Property”— costing $2,075 and consisting of a steam launch, a catamaran, two other boats and a naptha whaleboat. By the will of Dr. Trousseau it appears that he was paying $25 per month for rent of boat'house and wages of boat keeper. Indulgence in the pleasures of boat sailing, while perfectly proper in a person owing no debts, was inconsistent with his obligations under the agreement, and is evidence of his ability to discharge a portion of his debt under the agreement equal to the amount expended on these amusements.- The will of Dr. Trousseau declares that he “always had enough.” An inference from his language would be that he always had enough with which to discharge his obligations and live comfortably, but from the whole context of the will we cannot find that he intended to have this inference drawn from this language. The will was drafted by himself and was apparently not carefully studied. Other expressions in the will, however, as when he directs his executors “to oppose absolutely any interference from the French Oonsulate in my affairs. I am a Hawaiian subject and I wish to dispose of my property according to Hawaiian law,” and, leaving his property to the person above stated, “after all my lawful debts in Honolulu are paid,” indicate that the comparatively small amount of assets which were left after his debts were paid is no indication — 357 — that his circumstances would not have allowed him to discharge the obligation to Madame Trousseau, but rather that he, being able, was not disposed to do so. He was not by the agreement to be the judge as to whether his circumstances allowed him to pay the obligation in question. A. S. EarUoell and W. L. Stanley, for plaintiffs. O. Broion and L. A. Dichey, for defendants. It-seems to us that the trial Judge did not give adequate weight to these circumstances. In our minds, this evidence, it not being contradicted by the defendants, is evidence that the circumstances of defendants’ decedent admitted of his paying since the matíng of the agreement, during his lifetime, of the principal sum or some part of it. How, proof of ability to pay a part of the principal sum would be a fulfillment of the condition in the agreement to pay, and this being shown to the satisfaction of the court, would warrant a judgment for the whole amount, and if the property of the decedent be insufficient to discharge it and the other debts in full, both it and they will have to be paid pro rata by the executors, treating the estate as insolvent. It seems to us that the agreement obliged the decedent to make payments on account of the principal sum from time to time as his circumstances allowed him, and that the evidence adduced by the plaintiff tended to show that he was thus able. A new trial should, therefore, be ordered, on the ground that the finding of the court was based upon a misconception of the meaning of the contract and a misapplication of the evidence to it. Hew trial ordered. OPINION OP E. P. DOLE, ESQ. The controlling principle is the. intent of the parties — - what did they say? — what did they mean? The contract is exceedingly long and very loosely drawn, but upon carefully examining it as a whole, it seems clear to me that the parties — 358 — must have understood and intended that Dr. Trousseau was to pay the debt as he could and that a neglect to pay on account as his circumstances permitted should render the whole immediately due. Dr. Trousseau explicitly stated that the justice of the claim was beyond dispute, he bound himself to pay it if his circumstances allowed and as soon as they allowed, in naming the rate of interest he provided that the amount of interest should be reduced in proportion as the total debt was extinguished, and he agreed that a failure to make the payments mentioned when due should render the whole debt due. I think it would be a forced, unreasonable and unbusinesslike construction of the language Dr. Trousseau used to hold either that he bound himself to make payments as often as he had a few dollars in excess of his immediate necessities or that he reserved the right to accumulate more than one hundred and thirty thousand francs before making a single payment. In construing a contract the language used (technical words excepted) is to have its ordinary and popular meaning unless an intention to the contrary plainly appears, and, in determining what such meaning is, a court is bound to take judicial notice of the established usages of the business world. The question what should be considered as substantial payment or ability to make one is eliminated from the case, for the evidence is undisputed that Dr. Trousseau, if not able to pay the entire debt at any one time, was able to pay many thousands of dollars. Dor the foregoing reasons I concur in the result reached by the Chief Justice.