Hand Estate
Hand Estate
Opinion of the Court
Opinion by
David Bishop Hand died in ,1923 leaving a widow, a son CrómWéll and a daughter Mrs. Dean. Dr. Hand’s widow died in 1950 and his son on March 16, 1953. A Third Partial Account of the trustee under the will of Dr. Hand was filed because of the death of testator’s son. The Court below awarded to the Éstate of testator’s son, É. Cromwell- Hand, one-half of the royalties in excess of $18,000 a year which were received tinder-decedent’s contract with Smith, Kline & French
The disputes in this family have been both unfortunate and interminable. This is the fifth time the estate has been before this Court. It will therefore be sufficient, we believe, to briefly summarize the facts.
Dr. Hand practiced medicine in Scranton for many years and invented a number of proprietary medicines. In 1889 he entered into a contract with Smith and Kline Company, now known as Smith, Kline & French Company, under the terms of which thé Company agreed to pay him certain royalties. Between 1899 and 1910 Dr. Hand and the Company made five contracts. On February 19,1920 these contracts were modified and the royalty rates payable to Dr. Hand were increased. Dr. Hand executed and delivered to his son who had been in his employ the following paper:
“Dr. D. B. Hand 520 Spruce St. Scranton, Pa.
Scranton, Pa. Jan. 27, 1920*
To compensate my son, F. Cromwell Hand for his services in which he accomplished settling the difference with Smith, Kline & French Company and amending royalty provisions of existing contract whereby royalty was increased. I hereby agree that he (F. Cromwell Hand) or in case of his death, his estate shall reeéive fifty per- cent, of any amount over $18,-000.00 .which was about the amount I receivéd under the old contract of the year 1919.
D. B. Hand
Witness
John Fitzsimmons
Nellie M. Harrison”
“. . . I hereby agree that my said son, or, in case of his death, his estate, shall receive fifty (50) per cent, of any sum paid me as royalties in excess of the sum of'fifteen hundred dollars ($1500) paid to 'me, or hiy estate, in any month, beginning with March, 1920, as royalties due under said contract with Smith, Kline and French Company; . . .”
Also, on November 10, 1920 Dr. Hand and his son Cromwell entered into a formal agreement executed by both parties in which it was recited that Cromwell had acted as Dr. Hand’s confidential agent and manager of his business affairs, and in consideration of past and future services Dr. Hand agreed to pay to Cromwell so long as Cromwell shall live and so long as his services shall be required or requested by Dr. Hand the sum of $750 per month until Dr. Hand’s death. The contract further gave Cromwell full powers as attorney-in-fact to act for Dr. Hand. There followed a provision in which Dr. Hand confirmed the agreement made between him-and Cromwell on January 21, 1920: . . by reason of all of which the said David B. Hand agreed to give the said F. Cromwell Hand fifty per cent: (50%) or one-half (%) of all net royalties payable1 under said agreement in excess of the sum of Eighteen Thousand Dollars ($18,000) per annum . . . These moneys to1 be paid in addition to the said monthly salary and for such time and as long as such royalties are paid under said Smith, Kline & French Company agreement ...”
Dr. Hand left a will which provided in substance for equal payments of net incomé' to his wife, his son (and upon the son’s death, his wife.and children) .and
On January 9, 1924, testator’s widow and his son, Cromwell, in order to end family disputes and amicably settle her rights under an inter vivos agreement with her husband, executed an agreement under which (1) the widow was given $6,000 out of the estate in full settlement of all claims she had against the estate for any alleged gifts made by decedent in his lifetime to his daughter or his son, and (2) the widow in turn agreed to all the provisions contained in the aforesaid agreement dated November 10,1920 between Dr. Hand and his son, and (3) she further agreed that the provision of the November 10, 1920 contract should continue in full force and effect as long as the agreement or any modification thereof between Dr. Hand and Smith, Kline & French Company continued.
Dr. Hand, after the aforesaid agreements between himself and his son, Cromwell, dated January 27, 1920, November 10, 1920, and another on November 10, 1920, again modified his contract with Smith, Kline & French Company on February 14,1921, and on August 29, 1922. It is important to note that Dr. Hand paid Cromwell the share of the royalties in excess of $18,-000. payable each year under these modified agreements.
After Dr. Hand’s death the contract with Smith, Kline & French Company was modified by his executor on May 20, 1924, June 8, 1928, February 25, 1929, February 26, 1929, May 20, 1929, and November 14,
Appellants’ position in the instant appeal is “that Dr. Hand provided by Agreement No. 3 [November 10, 1920] for the compensation to be paid Cromwell for negotiating the contract of February 19, 1920 and fixed such compensation at a specified share of the royalties received under ‘said agreement’ that Cromwell had negotiated; that the right to receive such compensation expired with the termination of ‘said agreement’ and was revived only by Agreement No. 4 with Charlotte [the widow], in which Mrs. Dean, but not her sons, acquiesced and which extended Cromwell’s right to receive such compensation to ‘any modifications’ of ‘said agreement’; that the effect of Agreement No. 4 ended at Charlotte’s death since Charlotte, being but a life beneficiary, could not contract in respect of income of the estate for longer than her own life . . . and thus that there is no compensation still due which Cromwell’s estate would have any right to receive.”
Notwithstanding Mrs. Dean’s contention that the agreements expired upon the widow’s death, she made no objection to the trustee’s Second Account (showing payments to Cromwell of excess royalties under the modified agreements) which was filed after the widow’s death and duly confirmed.
Appellants further contend that Mrs. Dean’s three children, one of whom was a minor, are not precluded
The agreement made by Dr. Hand’s widow and Cromwell on January 9, 1924, and acquiesced in by Mrs. Dean could not bind her children or any remaindermen. Whenever the interests of Mrs. Dean’s children or other remaindermen arise, they will not be precluded from contending that the agreements made between Dr. Hand and his son, Cromwell, expired when the contract of February 19, 1920 expired, or were intended to terminate upon the death of Mrs. Dean, or upon the termination of Dr. Hand’s trust estate, or otherwise, and were not to continue, as appellee claims, as long as Smith, Kline & French Company were compelled to pay royalties to the Estate of Dr. Hand.
Decree affirmed; costs to be paid by appellants.
Italics throughout, ours.
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