Graef v. Kanouse

238 N.W. 377, 205 Wis. 597, 1931 Wisc. LEXIS 96
CourtWisconsin Supreme Court
DecidedOctober 13, 1931
StatusPublished
Cited by23 cases

This text of 238 N.W. 377 (Graef v. Kanouse) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Graef v. Kanouse, 238 N.W. 377, 205 Wis. 597, 1931 Wisc. LEXIS 96 (Wis. 1931).

Opinion

Rosenberry, C. J.

The principal contention of the defendant is that the contract made by the heirs and set out in the plaintiff’s complaint is void as against public policy within the rule laid down in the following cases: Will of Dardis, 135 Wis. 457, 115 N. W. 332; Will of Rice, 150 Wis. 401, 136 N. W. 956, 137 N. W. 778; Will of Reynolds, 151 Wis. 375, 138 N. W. 1019; Schoenwetter v. Schoenwetter, 164 Wis. 131, 159 N. W. 737; Estate of Staab, 166 Wis. 587, 166 N. W. 326.

Before entering upon a consideration of the doctrine of those cases as applied to the facts in this case, we shall call attention to some general propositions. Whether or not an heir, without the consent of the person through whom he claims, can assign a future interest in the estate of that person, is open to some doubt. In Michigan (Stevens v. Stevens, 181 Mich. 449, 148 N. W. 229), in Indiana (McClure v. Raben, 125 Ind. 139, 25 N. E. 179), and in Kentucky (Flatt v. Flatt, 189 Ky. 801, 22 S. W. 1067), it has been held that the assignment of such an expectancy is void if made without the ancestor’s knowledge or consent. In Iowa it is held that such an assignment will be sustained and enforced in equity if made in good faith for [601]*601an adequate consideration and without fraud, and is not otherwise unconscionable or invalid. Gannon v. Graham (Iowa) 231 N. W. 675.

Upon the question of assignability of an expectancy, see note in 56 Am. St. Rep. 343-345 and 347-348, in which will be found references to other notes and cases where the subject is dealt with. We shall not determine whether or not such contracts are valid in general, the question not necessarily being presented by the record in this case. It is quite apparent that such contracts are not favored in the law and are subject to close scrutiny by the courts called upon to enforce them even in jurisdictions where they are held valid. There are, however, essential differences between a contract by the terms of which an expectant heir assigns a possible interest in the estate of his ancestor to another upon a valuable consideration and a contract such as the one set out in the complaint, where there is no consideration except the mutual promises of the parties, the interest of each of the parties being wholly expectant. Under such circumstances there is a large speculative element involved in the transaction. The ancestor might for good reason disinherit all but one of the parties to the contract and leave the remainder of his estate away from the family entirely, in which event the provision made by the ancestor would, under the contract, be divided equally between the expectant heirs. Many other situations might arise rendering the operation of such contracts, however fairly made, burdensome and unfair, principally for the reason that such contracts must of necessity deal with uncertainties. While such contracts may not be, strictly speaking, wagering contracts, they have the highly speculative and some other vicious features of such contracts.

In Boynton v. Hubbard, 7 Mass. 112, the court, speaking of a contract in which an heir agreed to assign to the plaintiff one third of his expected estate, which was very much [602]*602larger than had been anticipated by the parties to the contract, and the plaintiff was seeking to enforce the contract according to its terms, said:

“Heirs, who ought to be under the reasonable advice and direction'of their ancestor, who has no other influence over them than what arises from a fear of his displeasure, from which fear the heirs may be induced to live industriously, virtuously, and prudently, are, with the aid of money speculators, let loose from this salutary control, and may indulge in prodigality, idleness, and vice, and, taking care, by hypocritically preserving appearances, not to alarm their ancestor, may go on trafficking with his expected bounty, making it a fund to supply the wastes of dissipation and extravagance. Certainly, the policy of the law will not sanction a transaction of this kind, from a regard to the moral habits of the citizens. . . .
“But when it is considered that a contract of this kind is a mere wager, in a case where there are no principles by which the value of the chances may be estimated, so as to ascertain whether it be unconscionable or reasonable; and, therefore, if valid in any case, it may be valid in all cases, public policy has additional inducements to discountenance it, as dangerous to good faith and fair dealing.”

.The court concluded:

“Without pursuing the nature of the contract further, it is most manifest that it must be a desperate wager on one side or the other; and, as such, ought not to be countenanced as the foundation of an action.”

In McClure v. Raben, 125 Ind. 139, 25 N. E. 179, it was held in regard to a contract of the kind set out in plaintiff’s complaint in this case, as follows:

“It is a mere gambling contract. It is wagering that the son or heir.will survive the father or ancestor, and that the latter will not dispose of the property and will die intestate, whereby the grantor will at some time in the future inherit an interest which he can then convey. It operates as a fraud' upon the ancestor and divests his bounty from the [603]*603kin to a stranger. It -encourages extravagance, prodigality, and vice on behalf of the heir.”

For- an exhaustive note on the validity of sale of an expectancy by a prospective heir, see 33 L. R. A. 266 et seq.; also 9 Ruling Case Law, p. 133 et seq., Conveyances or Releases of Expectancies.

The principal claim of the defendant is that the contract in question is contrary to public policy for, the reasons laid down in. Will of Dardis, supra, and subsequent cases. In reply to that contention it is urged that in Estate of Sipchen, 180 Wis. 504, 193 N. W. 385, it was in effect held that parties interested in an estate have a right, even before final distribution, to make such disposition of their shares, by contract or otherwise, as to them may seem proper, and that a disposition so made may. be enforced in the county court or in some other court of competent jurisdiction.

Two propositions are to be derived from Will of Dardis and subsequent cases: (1st) That any scheme entered into by the beneficiaries of a will by which the will of the testator is effectually defeated or thwarted, will be considered against public policy; and (2d) That in the probate of a will the principal question to be determined is one of status in .which the whole world has an interest, and that it is against public policy to deny or grant a will probate merely upon the stipulation of parties immediately interested, the court having no power to set aside a will upon equitable grounds.

In Will of Dardis, supra, the will had not been admitted .to probate and the stipulation was to .the effect that decedent was mentally incompetent and by the stipulation the beneficiaries disposed of the estate.

In Will of Rice, supra, the beneficiaries and those having claims against the estate agreed to have the will admitted to probate provided it should be construed in accordance [604]*604with the terms of the stipulation, and the will was accordingly admitted.

In Will of Reynolds, supra,

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Bluebook (online)
238 N.W. 377, 205 Wis. 597, 1931 Wisc. LEXIS 96, Counsel Stack Legal Research, https://law.counselstack.com/opinion/graef-v-kanouse-wis-1931.