Newbery v. Wilkinson

• Decision Date: 06 September 1911
• Docket Number: 1,441.
• Citation: 190 F. 62
• Parties: NEWBERY v. WILKINSON et al.
• Court: United States Circuit Court, District of Washington

190 F. 62

NEWBERY v. WILKINSON et al.

No. 1,441.

United States Circuit Court, D. Washington, Eastern Division.

September 6, 1911

Belden & Losey and Graves, Kizer & Graves, for complainant.

H. M Stephens, for defendants Wilkinson and Van Houten.

P. F Quinn and E. J. Cannon, for defendant Monaghan.

RUDKIN District Judge.

This is a suit on a guardian's bond. The administratrix of the estate of the deceased guardian, the heirs at law of the deceased guardian, and one of the sureties on the bond of the deceased guardian are made parties defendant. There is little or no controversy over the facts, although the materiality or relevancy of some of the facts is challenged by the complainant.

Pauline B. Newbery, a resident of Spokane county, died intestate on the 4th day of August, 1890, leaving her surviving a husband A. A. Newbery, and two minor children, William Fraser Newbery, the complainant in this suit, and Laura Isabel Newbery, who died in infancy unmarried and without issue. The deceased left an estate in Spokane county, consisting of a community interest in certain real property, a particular description of which is not material at this time.

Upon her death one half of the community property passed to the surviving husband, and the remaining half descended to the two minor children, share and share alike, under the local laws of the state. At the time of Mrs. Newbery's death a portion of the community real property was incumbered by a mortgage held by the Northwestern & Pacific Hypotheek Bank, and the surviving husband, the father of the two minor children, applied to the bank for a renewal of the mortgage and an increase in the amount of the mortgage loan. The bank agreed to renew the mortgage and to increase the amount of the loan, on condition that the father would clear or perfect his title to the mortgaged property, and the following remarkable procedure was resorted to for that purpose, under legal advice:

B. C. Van Houten, one of the father's business associates, was appointed guardian for the two minor children, and the defendant Monaghan and others became sureties on his bond in the penal sum of $40,000. The father then commenced an action in the superior court of Spokane county against the guardian and the two minor children, for the partition of three certain parcels of land owned by the community at the time of the wife's death. The complaint contained a description of the property, set forth the interest of each of the parties, alleged that partition could not be made without prejudice to the owners, and prayed that the property be sold and the proceeds divided among the respective owners as their interest might appear. The defendants appeared in the action and put in issue the allegations of the complaint. A reference was ordered by the court, and after a formal hearing the referee made a report recommending a sale of the property as prayed in the complaint. This report was confirmed, and the referee was directed to make the sale. Thereafter the referee reported that he had sold the three several parcels of land to one J. F. McEwen (who was another of the father's business associates) for sums aggregating $64,800 in cash, and that he had paid one half of the proceeds of the sale to the father and the remaining half to the guardian of the minor children. Receipts from the father and the guardian were returned and filed in court, acknowledging the receipt of the respective sums thus alleged to have been paid over. The report of sale was adopted and confirmed by the court, and the referee conveyed the property to the purchaser. Immediately thereafter McEwen, the purchaser, conveyed the property to the father, and by this means or subterfuge, his title was cleared or perfected. In truth and in fact McEwen paid nothing for the property at the partition sale, and it was never contemplated that he should. The guardian did not in fact receive the sum of $32,400, or any other sum, on account of the sale, nor was it contemplated that he should.

The entire proceeding was a mere fraudulent scheme or device, resorted to for the purpose of divesting the title of the two minor children and vesting it in the father, to the end that he might mortgage or incumber the property. I do not desire to be understood as holding or finding that the father intended to perpetrate a fraud on his infant children, for there is no evidence that he did, but such was nevertheless the legal effect of the whole proceeding.

While the guardianship was a general one, the active duties of the guardian began and ended with this single transaction some 20 years ago. The guardian thereafter died testate in King county, of this state, on the 25th day of January, 1904, and his estate passed through due course of administration. His will was admitted to probate, an administratrix with the will annexed was appointed and qualified, notice to creditors was published under date of April 30, 1904, and the administration was closed by final decree on the 13th day of July, 1905. No claim on behalf of the complainant was presented to the administratrix of the estate of the deceased guardian within the year allowed by the state statute of nonclaim, or at all. The only estate left by the deceased consisted of some worthless mining stock, for which the administratrix received the nominal sum of $5 at administration sale. No other property of the deceased, of any kind, character, or description, came into the hands of his personal representative or descended to his heirs or next of kin.

The complainant left the state of Washington at an early age and attended school at different places in the East, until he attained the age of about 15 years. He then entered the United States navy, where he remained until he attained his majority. During his term of service in the navy he was stationed the greater part of the time on the Atlantic coast. On attaining his majority he left the navy and wandered about the country from place to place for about two years, until he finally settled in Utah, of which state he is now a citizen. He had no actual notice of the partition or guardianship proceedings until shortly prior to the commencement of this suit. At that time he received a quitclaim deed from his father for his signature, and investigations made by his attorneys led to a disclosure of the proceedings in question. He did receive notice from his stepmother, however, when of the age of 19 years and about 5 years prior to the commencement of this suit, to the effect that he had a claim to certain property in the city of Spokane, derived from or through his mother, which he might establish, provided he instituted proceedings for that purpose within one year after attaining his majority. This notice admittedly referred to other property and other rights, and not to the bond in suit. The original action was commenced on the law side of this court on the 2d day of February, 1910, and within a few months after the complainant attained the age of 24 years. The case was later transferred to the equity side of the court, and the present bill was filed on the 25th day of March, 1910. The administratrix and the heirs on the one hand, and the surety, Monaghan, on the other, have appeared separately; but their defenses are in some respects the same.

Under the foregoing facts the complainant contends, in brief, that he, in his own right and as next of kin to his deceased sister, is entitled to recover the full amount for which their interest in the community property was sold, at the partition sale, with legal interest from that date. The defendants, on the other hand, contend, first, that the remedy of the complainant is at law, and not in equity; second, that the interest of the complainant and his deceased sister in the community property at the time of their mother's death was of no value, and consequently that they were not injured or defrauded by the proceedings complained of; third, that the suit is barred by the state statute of nonclaim, for failure to present the claim to the administratrix of the estate of the deceased guardian within the time limited by law; and, fourth, that the suit is barred by the statute of limitations.

If this suit were instituted in the proper forum and within the proper time, I am of opinion that the complainant is entitled to recover under the allegations of the bill and according to his theory of the case; but, in view of the conclusion I have reached as to certain of the defenses interposed, a further consideration of the merits of the complainant's claim becomes immaterial.

A few words will dispose of the case made against the administratrix and the heirs at law. The administratrix was not such at the time of the commencement of this suit, and had not been for years. Nearly five years prior to its commencement she had fully administered the estate under and in accordance with the local law. She had fully accounted for all property by her received, and had been discharged from her trust. The correctness of her accounts is not now assailed, and she cannot be called upon at this late day to further account to this or any other court.

I presume it will not be contended that heirs are liable for the debts or obligations of their deceased ancestors beyond the amount of their inheritance. 14 Cyc. 186. It is not claimed that the heirs of the deceased guardian received an inheritance of any kind or of any value from him. On the contrary, it clearly and satisfactorily appears that the guardian died utterly insolvent, that his entire estate consisted of worthless mining stock, and that no part of this descended to his heirs or next of kin. As to the administratrix and the heirs, the bill must therefore be dismissed, regardless of other...