Newcomb v. Ingram

• Decision Date: 11 April 1933
• Citation: 248 N.W. 171,211 Wis. 88
• Parties: NEWCOMB, COUNTY JUDGE, v. INGRAM ET AL.
• Court: Wisconsin Supreme Court

211 Wis. 88

248 N.W. 171

NEWCOMB, COUNTY JUDGE,

v.INGRAM ET AL.

Supreme Court of Wisconsin.

April 11, 1933.

Appeal from Circuit Court, Pepin County.

On rehearing.

Original opinion modified, and judgment of circuit court modified and, as modified, affirmed in part and reversed and remanded in part.--[By Editorial Staff.]

For former opinion, see 243 N. W. 209.Farr & MacLeod, of Eau Claire, Bundy & Bundy, of Menomonie, Bundy, Beach & Holland of Eau Claire, H. W. Rudow, of Menomonie, W. E. Thurston, of Durand, and W. G. Haddow, of Ellsworth, for appellants.

Fred Arnold, of Eau Claire, for respondent.

FOWLER, Justice.

A motion for rehearing was granted (245 N. W. 121) and reargument made upon two questions which will be particularly stated later. We will first dispose of some contentions made on the motions for rehearing upon which we did not consider reargument was necessary or would be helpful.

[1][2][3] 1. The surety on the second bond so confidently asserts that the case of Conant v. Newton, 126 Mass. 105, requires us to hold that it is entirely released because the order appointing the trustee was void and this voided the bond also, that we are moved to further discussion of the point. We need not follow the decisions of the court of a sister state except in case of a statute taken therefrom and construed by its courts before adoption, unless the reasoning on which they are based appeals to us as sound. But, as indicated in the original opinion, the case may be differentiated as it was in Dudley v. Rice, 119 Wis. 97, 95 N. W. 936, and the bond held good as a common-law bond. Soundness of the Conant Case is not questioned in the Dudley Case, but differences between the bonds involved were held to render it not in point. It is to be noted that the bond in the Dudley Case had been held good as a common-law bond without reference to its particular wording in the case of Hazelton v. Douglas, 97 Wis. 214, 72 N. W. 637, 65 Am. St. Rep. 122, for reasons there given and upon authorities there cited. The reasons there given, applied to this case, may be paraphrased as follows: “Ingram was not a testamentary trustee, although a formal order had been made appointing him. It was supposed however that he was such a trustee and Ingram gave his bond and by means thereof retained the possession of $20,000 worth of property. The bond was given voluntarily. It contravened no statute. It was not repugnant to the policy of the law. It induced the retention by Ingram of the entire fortune of the remaindermen. It was, within the rule of a vast number of authorities, a good voluntary bond. To hold otherwise would do rank injustice.” A “vast number of authorities” to this general effect are given in 1 Brandt, Suretyship (3d Ed.) §§ 31, 32, 33. This justifies the ruling that the second and third bonds are valid as common-law bonds, whether contrary to Conant v. Newton or not. The Conant Case goes upon the fact that the bond only obligated the principal to account to the court and pay over such sum as the court should adjudge due; that, for want of jurisdiction, the court could not render a valid judgment; consequently, the bond imposed no obligation. In the instant case the bond by its terms obligates the principal, not only to account to the court, but to pay over the amount due to the persons entitled thereto. If the one obligation be nugatory, for invalidity of the court's appointment, or want of jurisdiction to settle the account, the other is not. Besides the sureties had the same benefit of the expressed obligation to account to the court that they would have had had the appointment been valid. Ingram considered the appointment valid; so did the surety; so did the remaindermen. All considered the provision for accounting to the court valid and obligatory. The principal did so finally account and would have accounted to the court at any time the surety or remaindermen moved the court to require him to do so, or the court so required of its own motion. Every motive and inducement to hold the principal faithful to his trust operated that would have operated had the order appointing the trustee been valid. Moreover, as the executor's bond continued in force, Ingram was under legal obligation to account to the court for personal property precisely as required by the terms of the second bond. To release the bondsman merely because the court had no power to require the bond, especially when the bondsman was paid value for execution of the bond, would indeed “do rank injustice.”

[4][5] 2. It is also strenuously urged by the surety on the second bond that the agreement between the remaindermen and the widow, alleged in the answer of the surety, by which, in consideration of the remaindermen's not contesting the will, the widow's rights under the will were modified to the advantage of the remaindermen, was void as against public policy, and that this bars action on the bond. This point was made in the original briefs and the contention considered and rejected by the court without much mention of it in the opinion filed. It should, perhaps, be said further upon the point that, if such agreement was in fact made, it was fully carried out by the parties to it. The county court admitted the will to probate and so administered the estate as to give effect to the agreement without any party to it raising the point of illegality, and final judgment has been entered in the administration proceedings. If it be conceded that the agreement was made, and that the widow might have avoided it, the fact remains that she did not do so. As she did not choose to avoid the agreement, it is not perceived how any one else except the other parties to it can do so. It is a general proposition, supported by many decisions, that a third person cannot assert the defense of illegality, whether the illegality be based upon violation of public policy or any other ground. 13 Corpus Juris, 508, § 458. The situation is as if the agreement were that, if the remaindermen would forego contesting the will, they would transfer their interest in the estate to the widow upon payment by her to them of a specified money consideration and the agreement had been fully carried out by the parties. In such case, had the remaindermen executed warranty deeds and a title guaranty company had guaranteed the title and the title had failed, it would hardly be contended that the company could escape liability under its guaranty because of the illegality of the antecedent agreement. As said in Farmers' Bank v. Detroit & M. Ry. Co., 17 Wis. 372, 376, in holding the railway company to its contract for transportation although the goods were illegally purchased: “The contract * * * which is the subject of this action [here the bonds], in itself considered, is lawful and innocent, * * * The vice, if any, lies farther back, and relates to the source of the title, or the manner of acquiring it.” So here, the vice, if any, is farther back, and relates to the manner in which the situation arose which led to the company's execution of its bond. The company was in no wise prejudiced by the fact that the occasion for the giving of its bond arose through an illegal contract. As above stated, Ingram was subjected to precisely the same motives and inducements for keeping his trust that would have existed had the occasion arisen through circumstances entirely free from vice. Precisely the same reasons exist for holding the bondsman that existed in the cases wherein a shipment of goods was involved which was acquired in or shipped pursuant to an illegal contract. This did not affect the carrier's liability under its contract for transportation. The same reason exists for not allowing the bondsman to avoid its contract that exists for not allowing the heirs of a deceased person to rescind a contract of the decedent on the ground of fraud which the decedent did not see fit to rescind during his lifetime, Zartner v. Holzhauer, 204 Wis. 18, 234 N. W. 508, 70 A. L. R. 396; and that exists for not allowing one sued for wrongfully procuring a third person to breach his contract, to defend on the ground that the contract was void as against public policy, Northern Wisconsin Co-op. Tobacco Pool v. Bekkedal, 182 Wis. 572, 197 N. W. 936.

[6][7] 3. Some of the contentions made by the sureties on the first bond on the motion for rehearing may be disposed of by saying that they cannot be raised in this case, which is a suit on the bond given by Ingram as executor which was breached by the failure of Ingram to pay and deliver according to the judgment of the circuit court settling Ingram's account as executor entered pursuant to directions of this court in the case In re Will of Leonard, 202 Wis. 117, 230 N. W. 715. That judgment required Ingram, as executor, to pay certain sums and deliver certain property on settlement of his account as executor. That judgment finally determined Ingram's liability as executor, and the bondsmen for his conduct as executor are bound by it to the same extent as Ingram. Wallber v. Wilmanns, 116 Wis. 246, 93 N. W. 47;Meyer v. Barth, 97 Wis. 355, 72 N. W. 748, 65 Am. St. Rep. 124. They are therefore bound to pay the sum adjudged due and to deliver the property adjudged to be delivered by that judgment. They are not entitled to a new trial on the settlement of the executor's account. If items were included in that account for which the executor was not properly chargeable as executor, the contest over those items either was or should have been made in that suit and cannot be made herein. It follows that the sureties on the first bond are bound to pay according to that judgment. The statement made in paragraph 9 of the original opinion that the sureties on the executor's bond were not liable for the amount received by Ingram on the sale of real estate, while correct as an abstract proposition, cannot be taken advantage of herein, because the former judgment precludes that...