Rust v. Fitzhugh

112 N.W. 508, 132 Wis. 549, 1907 Wisc. LEXIS 141

• Court: Wisconsin Supreme Court
• Decided: September 24, 1907
• Status: Published

Opinion

The following opinion was filed June 20, 1907:

MaRshall, J.

The first question presented is: Did the court err in excluding evidence in support of the counterclaim ?

It is contended by respondents’ counsel that since all claims against the estate of a deceased person not presented to the county court, that shall have taken jurisdiction of the settlement of such estate, within the time limited by law and duly noticed to claimants are by sec. 3844, Stats. (1898), forever barred, and it is provided in sec. 3845, Stats. (1898), that a person can only sue an executor, other than for the recovery of specific real or personal property, where no time has been fixed for presenting claims to the county court for allowance, or no notice of such limitation has been ordered or given, which facts in case of' such a suit must be stated in the complaint (Lannon v. Hackett, 49 Wis. 261, 5 N. W. 474; Gager v. Paul, 111 Wis. 638, 653, 87 N. W. 875); that in case of a suit by an executor, as here, and the defendant counterclaiming, his pleading is defective, unless it states all the facts essential to a cause of action by the defendant against the executor under said sec. 3845, and that it is in effect so-held in Carpenter v. Murphey, 57 Wis. 541, 15 N. W. 798, and also there held that sec. 3847, providing that where a person is sued by an administrator he may “set off any claim; he may have against the deceased, instead of presenting it to the county court or commissioners, and all mutual claims-, may he set off in such action,” does not modify sec. 3844 so as-to allow the setting off of a claim which has been barred by-such section; that in order for defendant to have the benefit of see. 3847 he must have a live claim against the estate of the deceased at the time of the commencement of the action, and that the facts showing the existence of such an enforceable-claim must be made affirmatively to appear by the pleading.

True, when a suit is brought against an executor on a claim proper to be filed for allowance by the county courtthe facts justifying the action under sec.’ 3845 must be-pleaded and are issuable. True, also in case of a defendant,, in an action brought against him by an executor, counterclaiming under sec. 3847, he must, in order to siicceed, have-a demand not barred by sec. 3844. However, this court did' not, expressly or in principle, go so far in Carpenter v. Murphey, supra, as counsel suggest. The precise question here-was not involved. The counterclaim was pleaded as in this-case. Ry the reply the facts were alleged, as here, showing that the claim was barred by sec. 3844. As the learned counsel for appellant points out, such facts were admitted by demurrer. In that situation it was held that the defendant did not have a pleadable claim under sec. 3847. The question of' whether, in such á casej the facts showing that defendant at the time of the commencement of the action had an option to~ seek redress in the county court, his claim being enforceable there, or of pleading it against the demand of the plaintiff, is-manifestly quite different.

Eor reasons which we shall omit to state, as they do not prevail and there is not to be any dissent on the point, the writer- and some others incline to the view that tbe trial court ruled rightly in excluding evidence in support of the counterclaim because facts were not pleaded showing that appellant’s claim at the time of the commencement of the action was enforceable in the county court. Since the majority of the justices hold otherwise, and it is of much importance to have the law firmly settled on such an important matter of practice, the view of the majority is accepted by all. The opinion of the court is this: Sec. 3847 is too plain to be open to construction. It provides without ambiguity or exception that in case of an action by an administrator or executor against any person for the recovery of any debt or claim, such person may set off any claim he may have against the deceased instead of presenting it to the county court. It does not say the defendant, if he has a valid claim or a claim enforceable in the county court, may plead the same as a counterclaim in the action or proceed in such court. It is sufficient, according to the language of the section, if he has a claim which would be pleadable if the action were brought by the deceased, not g claim in the sense, necessarily, of a valid demand, but one which he asserts and wishes to have judicially passed upon. If there be a defense thereto of payment, or extinguishment by any statute of limitations, it is to be made in the circuit court as would be the case if it were presented in the county court. The facts constituting the claimed cause of action are the same in one case as in the other. In neither is it required to plead affirmatively the facts showing that the demand is not affected fatally by any statute of limitation. That is a defense under the general rule stated in South Milwaukee Co. v. Murphy, 112 Wis. 614, 88 N. W. 583.

The practice adopted in Carpenter v. Murphey, 57 Wis. 541, 15 N. W. 798, is correct. The defendant there, as we have seen, set up his claim without any showing as to the statute of nonclaim. The plaintiff replied, setting up as a defense the facts in that regard. The same course up to that point was pursued here, evidently following the Carpenter Case. The místate was in not proving such facts, if they existed, since they were not conceded by demurrer or otherwise.

The next proposition for consideration is that the contract in question is void because Eust did not therein promise anything and there was no agreement whereby he could enforce the closing up of the deal by a sale of the land and determination of the net profits for division. On that a number of eases are cited. It is sufficient to say that none of them are to the effect that an agreement to pay a sum of money ascertainable after the happening of an event which the contract contemplates will happen is not enforceable after such happening. Had appellant or his associates neglected or refused to sell the lands so as to render an accounting of net profits possible and an action had been commenced for damages on account thereof, the principle relied on might have been fatal thereto, there not being any enforceable obligation, expressed, to sell the property and no basis for an ascertainment of damages for a neglect to do so. The contract here clearly contemplated the probable happening of events which would malte the amount of money payable to Eust ascertainable to a mathematical certainty.

Next it is contended that the contract is void for want of a sufficient consideration. Generally speaking, a valuable consideration however small is sufficient to support any contract; that inadequacy of consideration alone is not a fatal defect. Wood v. Boynton, 64 Wis. 265, 25 N. W. 42; Clark v. Sigourney, 17 Conn. 511; Trustees of Troy Conf. Acad, v. Nelson, 24 Vt. 189; Blake v. Blake, 7 Iowa, 46. That rule is recognized in Wood v. Boynton, supra, in these words:

“In the absence of fraud or warranty, the value of the property sold, as compared with the price paid, is no ground for a rescission of a sale.”

The same doctrine is stated with many supporting authorities in 9 Cyc. at page 365, thus:

“So long as it is something of real value in the eye of the law, whether or not the consideration is adequate to the •promise is generally immaterial. Tbe slightest consideration is sufficient to support the most onerous obligation; the inade•quacy, as has been well said, is for the parties to consider at the time of making the agreement, and not for the court when it is sought to be enforced.”

Where the consideration to support a contract is so small as under all the circumstances to show fraud the agreement is void, but the defect consists in the element of fraud, not at all in the insignificance of the consideration. Blake v. Blake, supra; Wolford v. Powers, 85 Ind. 294. The cases cited to our attention by counsel for appellant are to that effect.

There was no element of fraud established in this case or found. The parties seem to have contracted understanding^; no undue advantage being taken of one by the other. The ■evidence shows that they were business associates and had been for many years, and that they had been accustomed to have important dealings with each other of a character explainable only upon the theory that each deemed himself thoroughly competent to protect his own interest, and that he did so to his satisfaction at the time of each transaction.

A so-called exception, upon which counsel for appellant rely, that a trifling consideration, as one cent or one dollar, will not support a promise to pay a considerable sum of money, the agreement not being characterized by any uncertainty as to time or amount, which is recognized in Schnell v. Nell, 17 Ind. 29; Shepard & Co. v. Rhodes, 7 R. I. 470, and other cases, is really not an exception at all, since under such circumstances fraud of some sort is presumed. The rule is thus recognized in Langdell’s Summary of the Law of Contracts, § 55:

“Though the smallest consideration will in most cases support the largest promise, this is only because the law shuts its eyes to the inequality between them; and hence any inequality to which the law cannot shut its eyes is fatal to the validity of the promise. _ . . But this reasoning is obviously inapplicable to a case in which the value both of the consideration and the promise is conclusively fixed by law; and a promise to pay money in consideration of a payment of money is such a case, provided the elements of time and uncertainty be wholly excluded.”

That does not apply to the case in hand. The sum of money that might in the end come out of the speculation was, when the contract was made, involved in much uncertainty. The time when there would be profits for division was involved in like uncertainty. It was liable to take many years, as proved to be the case, to work the matter out. While large profits may have seemed probable it could not have been regarded but that the result might be otherwise, especially in case of the value of the services required to market the land and collect the proceeds being charged up to the deal. There were many possible circumstances liable to materially affect the final result, making the same very profitable to the parties concerned or not so. It was not impossible that the value of the land might go down instead of up, or be largely absorbed by high taxes or other matters. The rule on this branch of the case is that, in the absence of satisfactory proof of fraud, the 'smallness of the consideration to support a contract, so long as it is large enough to be measurable, is immaterial, except in case of a contract to pay a sum of money. Applying that to the facts the contract in question is valid.

Whether the court erred in not allowing appellant as expenses under the contract the $6,000 found to be the value •of his services in selling and caring for the land and making sales and collections is the next important matter for consideration. That depends upon the meaning of the term “expenses” as used in the agreement. That it is somewhat ambiguous, as the fact is, seems to be conceded. The term may mean merely disbursements of money, or that and the use of appliances or other property, or include all outlays of labor whether by the person entitled to be reimbursed or •others, as well as outlays of money and the use of property, according to the purpose intended, which, in case of doubt, is to be determined by ordinary rules for judicial construction. That is quite manifest without authority and is confirmed thereby, as,indicated in authorities cited to our attention and others. Matthews & W. Mfg. Co. v. Trenton L. Co. 73 Eed. 212, 215; Dunwoody v. U. S. 22 Ct. Cl. 269, 278; Hall v. Vt. & M. R. Co. 28 Vt. 401. In the first case cited it is said that the word “expenses” may be defined as disbursement of money, but it is as well the employment and consumption of time and labor. In the last case cited a resolution of a corporation for the payment of the expenses of a committee was held to include cash expenses and the personal services of the members of the committee as well.

The learned circuit court restricted the meaning of the term under consideration to cash expenditures and to such as were recognized in the accounting between appellant, Williams, and Hinckley, upon the theory that net profits for division between them was identical, necessarily, with such profits for division between appellant and Bust. What the exact relations were between appellant, Williams, and Hinck-ley we do not know. Neither do we know the exact relation between appellant and Bust. The record does not satisfactorily disclose those matters, but it sufficiently appears that the former were partners' and the latter were not. So the presumption that personal service was not intended to be compensated for, which applied to the partnership relation (Drew v. Ferson, 22 Wis. 651), does not apply to the other. As between Bust and appellant, for the consideration of one dollar, the former purchased one half the net profits realized by the latter out of the land deal. It would seem that net profits as between appellant and his copartners may be very different from the profits contemplated as between him and Bust While in the former it was the receipts from land sales less the cost of acquiring the property and ordinary partnership expenses incurred in realizing thereon, in the latter it may, consistently therewith, have been intended to he the share of profits coming to appellant from the firm less his outlay in personal services necessary to obtain the same.

One of the cardinal rules for the construction of a contract is that a meaning should not be attributed to its language which will make the agreement absurd or so unreasonable that one could not be fairly thought to have so intended, if a different meaning can be found in the words which will avoid that result. When the parties made the contract they must have anticipated it might take years, as it did, to close out the lands and collect the proceeds, and it might be required to devote services of the value of thousands of dollars to the completion of the venture and that the burden of rendering such services would be, in the first place, wholly carried by appellant. It must have been anticipated that the most significant element in successfully working out the enterprise would be the devotion by appellant of his personal services thereto and that the value thereof might far exceed all money disbursements. Eust was merely a purchaser for one dollar of one half the net results to appellant, not, necessarily, one quarter of the net results to appellant and his associates. Could it have been contemplated that in arriving at the former Eust should have one half the benefits of appellant’s personal services ? It does not seem so.

The contract in any view of it is so extraordinary that it should he construed, where construction is permissible, as strongly as it reasonably can in favor of appellant. So construing it, we reach the conclusion that the parties used the term “expenses” in respect to all outlays by appellant, whether of money or labor, in realizing his portion of the pro^ ceeds of the land, and that the $6,000 found to be the value of such services should have been deducted from the net amount of $22,412.19, as between him and his copartners, in arriving at the sum to be divided between him and plaintiffs, making the latter’s share $8,206.09 instead of $11,206.09.

It is conceded, as we understand it, that if respondents were entitled to an accounting and payment of a share of net profits at the time of the commencement of the action, interest was properly allowed from such time. We so hold and that the plaintiffs were so entitled. Smith v. Putnam, 107 Wis. 155, 82 N. W. 1077, 83 N. W. 288, relied upon by counsel for appellant as showing that plaintiffs did not have a cause of action at the time of the commencement of the suit because a small amount of business was yet to be transacted in order to wholly close up the deal, does not apply. In that case there was a partnership and a contract providing that the profits should be divided only upon the completion of the transaction. The action was at law before such completion. Here it seems that whenever there were net profits received into the hands of appellant, Rust or his personal representatives were entitled to a share thereof; that the entire' expense of the speculation and the original outlay for the property had been returned long before the action was commenced, and that substantially the sum now found to be subject to division was on hand.

There are some minor matters suggested for consideration in the brief of counsel for appellant which in view of the foregoing need not be treated. They are matters which in the outcome are not prejudicial to appellant. A small sum was erroneously found not to have been paid upon the land deal, which was in fact paid after the action was commenced and included in the judgment, interest being computed thereon in favor of respondents before appellant received the money, resulting in a trifling excess charge for interest. If the trial court’s attention had been seasonably called thereto or respondents’ had been cited to the matter it would doubtless have been corrected. The excess is so small as not to be worthy of consideration under the circumstances. Morris v. Peck, 73 Wis. 482, 41 N. W. 623; Mahon v. Kennedy, 87 Wis. 50, 57 N. W. 1108.

The result of the foregoing is that the trial court erred in sustaining the objection to evidence in support of the counterclaim and in refusing to allow appellant as expenses 'the value, as found, of his personal services, but otherwise the decision below was right. The judgment must be reversed and the cause remanded for a trial only of the issue raised by the counterclaim and the reply thereto, and for judgment in accordance with the result of such trial and this opinion.

By the Court. — So ordered.

A motion for a rehearing was denied September 24, 1907.