- 8 -
"four corners" of the agreement, unless it is ambiguous as to
essential terms. Rink v. Commissioner, supra.
We agree with the parties that the Securities Closing
Agreement is unambiguous. Paragraph 7 states that "Any money or
other property received by the taxpayers, directly or indirectly,
as a result of the investment in Securities * * * shall
constitute ordinary income in the year received."
Despite this clear statement, petitioners argue that:
Respondent may not require Petitioners to include
cash distributions as income in years covered by
paragraphs 3, 6 and 8 as a consequence of paragraph 7
of the Agreement. Respondent's counsel correctly
classified paragraph 7 as a 'catch-all provision' in
his opening statement of October 25. As such, it must
be regarded as a general provision which cannot be
properly read to override the specific mandates of
paragraphs 3, 6 and 8. William Higgins & Sons, Inc. v.
New York, 20 NY.2d 425, 428 (1967); See Also John
Hancock Mutual Life Ins., 717 F.2d at 669-70 n.8.
We reject petitioners' argument. There is no dispute with
respect to the proposition that when two contract provisions are
in apparent conflict, the specific provision overrides the more
general provision. As stated by the Court of Appeals for the
Second Circuit (the circuit to which an appeal of this case would
lie) in John Hancock Mut. Life v. Carolina Power & Light, 717
F.2d 664, 669 n.8 (2d Cir. 1983):
New York law recognizes that definitive,
particularized contract language takes precedence over
expressions of intent that are general, summary, or
preliminary. As one New York Court has explained,
"Thus, where the parties have particularized the terms
of a contract an apparently inconsistent general
statement to a different effect must yield."
[Citations omitted.]
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