text:
    Mary Gray et al. v. The Administratrix of Joseph S. Hawkins, deceased.
    An intestate having, at his decease, left contracts in force for building a dwelling house, and other improvements which he had commenced and was carrying on at the time of his death, designed as a residence for himself, not having for their object the improvement of real estate as an investment, and it appearing that the completion of such improvements would be a losing investment ; on petition of the heir against the widow and administratrix to enjoin the sale of materials furnished by intestate for the building, and praying a specific performance of said contracts and improvements. Held:
    1st. That the materials prepared for the building are to be regarded as personal, and not as real assets.
    2d. That, as a general rule, the personal representative may, in his discretion, perform or rescind any personal contract of his intestate imposing an obligation or duty upon him, as may be for the best interests of the estate, but subject in general to the approval of the court.
    3d. That the foregoing facts do not constitute a proper case for a decree for specific performance.
    In Chancery; Reserved in Preble county.
    Tire complainants are the heirs at law of Joseph S. Hawkins, deceased. ■

      The defendants are his late administratrix and widow,' and others.
    Erom the bill, answer, exhibits and testimony, the following facts appear, substantially:
    In April, 1852, Joseph S. Hawkins began to erect a dwelling house for himself and wife to live in, in the village of Eaton, in said county. He had made verbal contracts with several different persons for the different kinds of material and work — with one person for the stone and brick, and for laying the same, and also the pavements— with another for the lumber, all of which he had purchased, and a part of it had been delivered — with another for the carpenter work and general superintendence of the building as it progressed — with another for the plastering, materials and work — and with another for the painting, materials and work.
    The building was commenced. The cellar was dug, and the stone work nearly completed. The brick were burnt and ready for delivery. The carpenter work was in progress. As yet the painter’s services had been required only to paint the cellar window frames. The work was progressing in order until the death of Hawkins, which occurred in August, 1852.
    The widow, Cordelia M. Hawkins, was appointed administratrix of his estate, and soon thereafter notified those so engaged to furnish material and do the work, or most of them, that nothing more would be done on the building. She paid the stone and brick contractor seventy-five dollars more than he had expended for materials and labor, and became released, and released him from any further compliance with his engagement, and was endeavoring to get the other contractors, or some of them, to acquiesce in the suspension of the work; and proposed only to compensate them for materials furnished and services rendered, and for any losses which might result to them from stopping the work. The plasterer had, as yet, procured no materials for the job. Hawkins had paid some fifty dollars on brick.
    About the time the administratrix stopped the work, she had the lumber and other materials which had beep, delivered to Hawkins, appraised with the assets of the estate, and the sale advertised.
    It appears that Hawkins was building the house after a specified plan, but subject to such alteration, as the work progressed, as he might from time to time dictate.
    It is estimated that the house, when completed, would have cost between three and four thousand dollars. And it appears that its site was desirable only for a private residence, and that such a house in that village would not have been in much demand for rent; that had the house been completed it would have cost some ten or fifteen hundred dollars more than the entire property could have been sold for, and would have been a poor investment for the money.
    It appears further that the personal estate of the deceased amounted to about twelve thousand dollars, while the real estate was worth only about three thousand dollars. From an agreed statement, it appears that Cordelia M. Hawkins was the second wife of the deceased, and was married to him about two years before his death; and neither at nor after the marriage, brought any money or property to him.
    The heirs at law were dissatisfied with the discontinuance of the work on the building, and desired its completion by the estate, as it would have been completed by their brother had hp lived. They insisted that were it not so completed by the estate there would be a loss of the work actually done, and that there would be a loss also on lumber and materials, and that the contracts were greatly for the benefit of the estate; that the sole object of the widow in stopping the work on the building was to enlarge the personal estate, which goes to her on distribution.

      The heirs at law, on bill filed against the administratrix and the persons originally engaged to furnish materials and do the work required in building the house, procured a provisional injunction restraining the administratrix from abandoning the contracts, and from selling or otherwise disposing of lumber or other materials provided for the construction of the building.
    The bill prays that on final hearing, “said injunction may be made perpetual, and said administratrix may be required to go on with and complete said building according to said plan and contracts,” etc.

      Hbit, Millikin, Hubbard, and Foos, for complainants.

      King, Anderson § Herron, and Gillman § Bolens, for defendants.
   Sutliff, J.

It is difficult, from the structure of the petition, to determine upon what precise ground its merits, in the mind of the pleader, rested. It does not seem to have been regarded by the draftsman as simply a case for specific performance of a. contract, for the nonperformance of which no adequate remedy could be had at- law, and so to be regarded as a proper case for relief in chancery. Nor does the petition seem to present and rest exclusively upon a case of the wrongful appropriation of personal property, as personal assets which had, by the intestate in his lifetime, been directed to be converted into real estate. And yet this is the only ground, expressed in the petition, upon which the heirs would seem to have any right to ask the relief prayed for. The pleader seems to have attached some importance to the extraneous circumstances set forth in the petition; the facts of the intestate having left no children; that he had been but a short time married; that no part of his property was brought to him by his wife; and that his personal estate amounted to some $12,000, while his real estate did not exceed some $3,000. But we cannot regard these matters, although set forth in the petition and made to appear among the facts of the case, as at all affecting the rights of the respective parties, except as they may in some particulars tend to show the object and purposes of the contemplated improvements.

It is a well understood principle of law, that legal assets do not comprehend all that is included by the words personal property. Personal chattels and money are not unfrequently to be regarded and treated as real estate. Lord Thurlow, in remarking upon this subject, in the case of Fletcher v. Ashburner, 1 Bro. C. C. 497, observed “ that nothing was better established .than this principle, that money directed to be employed in the purchase of land, and land directed to be sold and turned into money, are to be considered that species of property into which they are directed to be converted; and this in whatever manner the direction is given, whether by will, by way of contract, marriage articles, settlement, or otherwise; and whether the money is actually deposited or only covenanted to be paid, whether the land is actually conveyed or only agreed to be conveyed, the owner of the fund, or the contracting parties, may make land money, or money land. The cases establish this rule universally.” The same principle has, ever since, been generally recognized in England and in this country.

But in the application of the rule, the cases where the intentional change of personal property into real exists, and is expressed as the evident object of the owner of the fund, must always be distinguished from an intended change of personal into real property, as merely incident to some other object. If, for instance, an intestate has concluded to invest his money in town property, as a profitable investment, and, in carrying out this clearly expressed intention, has entered into a contract with one person for the purchase of a lot, and has also made a definite contract with another person for the erection of a store-house thereon, the completion of which would be necessary to render remunerative the investment, the materials, furnished under the contract by the contractor’, and the money necessary for the completion of the house, might be as properly regarded real estate as the money invested, and still to be paid, as the agreed purchase price of the lot. The completion of the contract, for a judicious improvement of the lot in such a case, is as necessary to attain the object of the proprietor of the fund, existing in his own mind at the time of making the contracts for the purchase and the improvements, as is the payment of the purchase money to obtain a perfect title. And the object remains as evident, after the death of the contractor in such a case, as if the contract had been with only the owner of the lot of ground for its purchase, and the erection thereon of the store-house. The object, in either case, would appear very evidently to have been an investment of personal property in real estate as an investment; and this object remaining, after the decease of the intestate, ought to be respected as a change of the character of his personal property to that extent, as clearly expressed by such conti’act, as it would have been if expressed by will or testament. But if the intestate, entertaining a particular regard for some dependent friend, had even entered into a definite contract with some one to build, at a large expense, a house or studio for that friend, and also to extend a superintendence over it during the life of the beneficiary, it could not be supposed — the friend also having decased shortly after the 'intestate and before the performance of the contract — that the administrator’, after the termination of the object and purposes of the contract, ought to be required to see the same specifically performed. It could not be supposed that, under such circumstances, the intestate Would desire a completion of the contract. The purpose having failed for which the building was to be constructed, the condition would seem to have failed upon, which, the direction by the intestate for the investment, so expressed by the contract, depended.

The distinction here expressed is to be found, I think, generally recognized in the cases presenting the subject. In the case of Ripley v. Watterworth, 7 Ves. Rep. 425, Lord Chancellor Eldon, in giving his opinion, says: “ There is an obvious difference from all the cases, which establish this general principle, that where a person dealing upon his own property, only has directed a conversion for a particular special purpose, or out and out, but the produce to be applied to a particular purpose, when the purpose fails the intention fails; and this court l’egards him as not having directed the conversion.”

As a general rule, the personal representative of the testator or intestate may, in his discretion, perform or rescind any personal contract, made by the deceased, imposing any liability or duty upon himself, for the best interest of the estate, subject however to the approval of the court.

To the administrator belongs the control. of the legal assets, and the duty of collecting the claims and discharging the liabilities of the intestate. To the heir, in his representative capacity, belongs the control of the real estate, subject to the rights of the widow, whether the title to the real estate be a legal or only an equitable title. In this division of property between the personal and real representatives of the intestate, equitable interests in lands, held by contracts of purchase, are regarded in the nature of equities of redemption. The right to the lands belongs to the heir, and the debt subsisting for the purchase money, if the same was obligatory upon the intestate in his lifetime as a debt, must be paid by his administrator from the legal assets, if sufficient, although the result may greatly diminish, or entirely exhaust the personal estate of the deceased. And this necessarily results from the discharge of his duty, by the administrator, of paying the debts of the intestate.

Erom the foregoing remarks, and the statement of the facts of this case, the real question upon which the merits of this case depends, is solely as to the coversion of so much of his personal property into real by the intestate as is necessary to perfect the contemplated improvements. If the intestate, by his oWn action, and by the contracts made in his lifetime, in relation to the improvements, has left evidence of having purposed and directed to be set apart and invested a certain amount of his personal property, or such an amount of his personal property as was sufficient to perfect certain improvements of his real estate as an investment in real estate, and not merely as incident to some other purpose which no longer exists, such amount of the personal estate should, doubtless, be regarded as real assets, and would belong, not to the personal, but to the real representatives of the intestate. But if it only appears that the contemplated appropriation of his personal to the improvement of his real estate by the intestate, was merely incident to an object and purpose which no longer exists, and not as an investment in real estate, as the object and purpose of the appropriation, in such a case, the direction of the intestate for the conversion, should be regarded as having been conditional, and to have ceased upon the termination of the object and purposes.

Now, the proof in this case shows very clearly that the intestate had commenced building upon and improving a town lot as a homestead and residence for himself. The improvement was evidently designed, and was being made by the intestate, not as a judicious investment in real estate, but only for his own personal gratification and convenience, and for the purpose of constructing and^ preparing for himself a more pleasant residence. By his death, the object and purposes of those improvements, designed for his own enjoyment, have terminatedand the completion of the improvements, it appears, would be attended with much pecuniary sacrifice and loss to the estate.

The proof shows, that to construct such improvements upon the lot as the intestate would probably have constructed, or those of equal cost, would be attended with a sacrifice and pecuniary loss to the estate of probably not less than $2,000; while the entire amount paid for rescinding the contracts, so far as they have been made, will not exceed $200.

There is, then, no equity upon which the complainants can stand to ask a specific performance of the contracts.

But the proof does not in fact present such contracts for the contemplated improvements, as could be ordered to be specifically performed, even upon the application of a party to the contract.

The contracts are not in writing; they are vague and uncertain in their terms. The proof shows that the intestate had commenced building upon his lot of ground, and contemplated making extensive improvements thereon, for a convenient and pleasant residence for himself and family. He had procured certain materials, and engaged such other materials, to be delivered in future, as he might need for perfecting the improvements. He had also engaged the services of certain workmen, and had given them assurances that he should want their services for some time in future, in constructing the contemplated improvements. But it seems to have been understood by all the workmen, that the work was to be done under the direction of the intestate, and subject to such alterations and additions as he might from time to time suggest. Indeed, the work could not be properly said to be under contract. The case seems to be quite analogous to that presented by the affairs of entei’prising business men generally, who die, unexpectedly, while in full pursuit of their enterprises. The merchant, the manufacturer, or farmer, who dies suddenly while carrying on an extensive business, will each usually be found, doubtless, to have made similar arrangements for the prosecution of his business for a length of time in future. They may have employed, in a similar manner, operatives, who may have received encouragement, or an assurance of employment for a year, or even longer time, in future. But in each and all of these cases, it would be an unheard of claim on the part of the heir, or even the employees, that there should be a specific performance m such cases, by the administrator continuing to carry on to their completion the business operations of the intestate.

The general rule is, that for the breach of a contract, the appropriate remedy is, at law, in the recovery of adequate damages. Specific performance of the contract is the exception to the rule. But the facts of this case by no means constitute such exception. The proof shows very clearly that the intestate neither purposed nor directed a conversion of his personal estate into real, as an investment in real estate, and for that purpose, but only as a mere incident to the object of furnishing himself a residence; and that such object and purpose have terminated, and that, therefore, the purpose and directions of the intestate, in his lifetime, to so appropriate and convert his-personal property, should also be held to have terminated.

The bill must, therefore, be dismissed, at the costs of the complainants.

Swan, C. J., and Brinkerhoff, Scott and Peck, JJ., concurred.


source: Caselaw Access Project

author: Scott, J.

license: Public Domain

text:
    Lewis Snapp and Peter Hanger v. The Merchants and Manufacturers’ Insurance Company.
    Where, by a clause in a policy, it is provided that, “ the insurers shall not he liable for the expense of dockage, or hauling out for repairs, nor for any loss (except in case of general average) unless the necessary repairs, caused solely by the disaster, shall amount to ten per cent, on the agreed value in the policy if, by means of a peril insured against, repairs become necessary which are invariably made on a dry dock. Held:
    That a fair and reasonable charge for the use of the dock whilst such repairs are being made, forms a proper item in .the cost of repairs; and by a proper construction of said clause, is not to be excluded in a computation to determine whether it is a ten per cent. loss.
    In Error to the Superior Court of Cincinnati.
    The case is stated in the opinion of the court.

      Lincoln, Smith $ Warnock, for plaintiffs in error.

      Coffin $ Mitchell, and Bates $ Scarborough, for defendant in error.
   Scott, J.

This suit was brought under the former system of practice, by the owners of the steamboat “ Gem,” upon a policy of insurance issued by the defendant, to recover the amount of a general and also of a special average claim.

To the plaintiff’s declaration, the defendant pleaded the general issue, with notice of a set-off'.

The general average claim, and the defendant’s set-off' are severally admitted, and the amount of each is agreed upon. There is no dispute as to the items of the particular average claim, or that they are properly chargeable as such. The only question in the case depends upon the construction of the following clause in the policy: “ Provided, that the insurers shall not be liable for the expense of dockage, or hauling out for repairs, nor for any loss (except in case of general average), unless the necessary repairs, caused solely by the disaster, shall amount to ten per cent, on the agreed value in this policy.”

Among the items which constitute the particular average claim of the plaintiffs, are these two, paid by them to the Louisiana Dry Dock Company, at New Orleans, where the boat was repaired:

“For docking boat, 478 tons measurement, - $246 00 For use of dock five days, $46 per day, - - 230 00

$476 00”

The “ agreed value ” stated in the policy is $20,000; and the cost of the repairs made necessary solely by the disaster, exclusive of the two items above stated, was $1,955.69. So that, if both or either of these items are properly chargeable as a part of “the necessary repairs,” within the meaning of the foregoing clause of the policy, the loss amounts to ten per cent, on the agreed value, and the defendant is not exempted from liability therefor; but if neither of said items is so chargeable, then the loss does not amount to ten per cent., and the defendant is not liable. It is not claimed in argument that the defendant is never liable for the expense of dockage, but that no such liability can attach, under this clause of the policy, until there is, exclusive of dockage, a ten per cent. loss.

This question is presented on an agreed statement of facts, embodied in the bill of exceptions, from which it further appears, that the amount charged for the use of the dock was a fair charge as to amount, and had been paid by plaintiffs, and that injuries, such as were occasioned by the disaster in this case, are invariably repaired by the use of a dry. dock.

As a question of fact, irrespective of any special understanding of the parties, supposed to be indicated by the phraseology of the clause which we have quoted, the agreed statement of facts would seem to leave no room for doubt, that the item paid by the plaintiffs, and now claimed by them for the use of the dock whilst the repairs were being made, is justly to be regarded as a part of the cost or expense of repairs, and is therefore to be taken into the account, whenever the question arises whether the cost of such repairs amounts to a particular sum. Eor, it is admitted, that such repairs as were rendered necessary by the disaster, in this case, are invariably made by the use of a dry dock. This must, therefore, be regarded as the proper mode of making such repairs; the one most conducive to the interests of all the parties. In making repairs in this proper mode, the use of the dock cannot be said to be a mere preparation for repairs. It is, in fact, a source of expense, constantly accruing and accumulating during the whole time that the repairs áre being made; it is inseparable from the making of the repairs, and enters as truly into their cost, as does the use of the tools with which they are made. It is simply a mode of making repairs, or an instrumentality by means of which they are made, and this mode or instrumentality is conceded to be the one which the case demanded, and the amount paid for it is admitted to be fair and reasonable.

But, conceding all this, and that the defendant would properly be chargeable, by the general terms of the policy, with these two items as a part of the cost of repairs, it is claimed that the clause of exemption, here relied on, clearly expresses a different understanding between the parties, and indicates their intention to exclude those items from the computation of the amount expended for “ necessary repairs

Let us then examine whether this be so, for upon this point the decision of the case must turn.

The clause in question is of recent introduction into policies of insurance, and neither judicial decision nor uniform usage, has, so far as we are aware, established its construction. The intention of the parties, if that can be satisfactorily ascertained, should doubtless govern in giving a construction to the clause; and it is proper that that intention should be sought for by the light of the rules which wisdom and experience have established as conducive to that end, and with special reference to the general principles of the law of insurance.

One of these leading rules is, that “ as a contract of indemnity to the assured, the policy is to be liberally construed in his favor, not only because this mode of construction is most conducive to the interests of commerce, but because it is probably most consonant to the intentions of the parties. It is certain that the assured desires as ample an indemnity as he can obtain, and it is probable that the insurer means that he shall understand the indemnity given, to be as extensive as its terms, upon any fair interpretation, import.” 1 Duer on Ins. 161.

Another rule is thus stated by the same author: “ Eor the same reasons, and not in obedience to a mere technical rule, an exception from the risks of the policy is to be construed strictly against the insurer. Such an exception is a modification of the promise of indemnity, and as that promise is to be liberally construed, it is a necessary consequence that the exception cannot be permitted to abridge its operation to a greater extent than the terms used plainly require.” This rule is entirely applicable to the clause in question, which was manifestly intended to limit and qualify the general liability which, by the terms of the policy, the insurer assumed in regard to all “perils of the river, fire,” etc.

A third rule is, that “the words of the policy are to be understood in their general, ordinary, and popular sense, unless in cases where it is manifest from the context that they were used by the parties in a distinct and peculiar sense, which is necessary to be adopted to give effect to their immediate intent.” Ib. 162.

Again, it is laid down by the same authority, as a sound maxim, that “effect must be given, if possible, to every clause, and no words rejected as unmeaning or superfluous, to which a consistent meaning may be attached; and this rule is especially applicable where a new clause is introduced into a contract which, as in the case of a policy of insurance, has an established form and settled construction.” Neilson v. The Com. Mut. Ins. Co., 3 Duer 461.

These last two rules are supposed to have a bearing on this case, and would seem to be the ground on which the question was decided in favor of the defendant by the court below. (2 Hand. Rep. 252.) But with all the respect for that court, which its well known character demands, we must say that we do not perceive the conclusive bearing and force of these rules upon the question.

The insurers say, in the policy, that they “will not he liable for the expense of dockage, or hauling out for repairs, nor for any loss, unless,” etc.; and it is said that the words “ expense of dockage or hauling out for repairs,” must not be rejected as superfluous, and that effect must he given to them, if possible.

But these words, “ any loss,” certainly include any and all expenses necessarily arising from casualties insured against, and must therefore include dockage and hauling out for repairs. This phraseology is but an instance of what often occurs in formally worded contracts, where, after specifying several prominent particulars, a general term is employed, comprehending the particulars already named, with many or all others of the same class. But no ingenuity of construction can give to particulars a more comprehensive meaning than to the general term within which they are clearly embraced.

If, then, we strike out these particular specifications, “expense of dockage and hauling out for repairs,” as necessarily included in the general terms, “ any loss,” which follow, and read the whole clause thus: “The insurers shall not be liable for any loss (except in cases of general average) unless the necessary repairs caused solely by the disaster, shall amount to ten per cent.,” etc., would any one doubt but that in a case requiring the use of a dry dock for repairs, the item of dockage would properly constitute a part of such ten per cent.?

But it is said that from the special mention of “ dock-age” and “hauling out for repairs,” it may be fairly inferred that these items were intended to be distinguished from “repairs,” and must have been regarded rather as preparations for repairs. This suggestion would be forcible, and a proper case would be presented for the application of the third rule, heretofore cited, if the term “ repairs ” were used in the same connection with the words “ dock-age,” and “ hauling out for repairs.” If, for instance, the clause read thus: “The insurers shall not be liable for the expense of dockage or hauling out for repairs, nor for repairs, unless,” etc. But such is not the language of the clause, nor does it, in our view, purport to define, directly or indirectly, what is, or what is not, a part of “ the necessary repairs,” except by limiting them to such as are “ caused solely by the disaster.”

The special design of the insertion of this new clause of exemption is not very apparent. It is very important to the insurer, that it should be to the interest of the party insured to exercise care, prudence and watchfulness in guarding against the perils for which the insurance is effected. And for this reason, insurances are never taken to the full value of the property insured. This clause may have been inserted with a view to the fuller attainment of the same end. But it is at least as probable that it was intended to secure the insurer from claims for indemnity against losses resulting not from the perils insured against, but from ordinary wear and tear. The placing of the vessel on the dry dock would tend to prevent imposition and fraud by disclosing the character and cause of the injuries requiring repairs, and it is not probable that the insurers intended to discourage this mode of repairing, when the character of the injury would render it proper. Be this as it may, we think it apparent that there is nothing, in either the language or the context of the clause, which is clearly expressive of any other or further intention than to exempt the insurers from all liability for losses in cases of particular average, unless the repairs which would be rendered necessary solely by the disaster, should amount to ten per cent, on the agreed value in the policy.

"What are necessary repairs, caused solely by the disaster,” is a question which this clause leaves to be settled by extrinsic proofs. And so, we think, it would be ordinarily understood.

But, if there be room for doubt, whether more may not have been intended, the first two rules, before referred to, would require that doubt to be x-esolved in favor of the plaintiffs. It is at best a case in winch, the maxim “ verba fortius accipiuntur contra proferentem,” is of propel’ application. It is but reasonable to require that, in order to entitle a party to the benefit of an alleged exception or exemption in Ms favor, it must be so clearly stipulated for in the contract, as not to prove a trap for the unwary.

The judgment of the superior court of Cincinnati will be reversed, and judgment entered here in favor of the plaintiffs, for the sum agreed to be due under this construction of the policy.

Brinkerhoee, Sutliee and Peck, JJ., concurred.

. Swan, C. J., dissented.