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[218 U.S. 493, 494] Messrs. William Hepburn Russell and W. H. Robeson for plaintiffs in error.
[218 U.S. 493, 496] Mr. John Selden for defendants in error.
Mr. Justice Lurton delivered the opinion of the court:
This was an action upon a bond executed by Thomas E. [218 U.S. 493, 500] Waggaman, as principal, and Daniel B. Clarke, as his surety. The bond was in these words and figures:
In the Supreme Court of the District of Columbia. In Equity. No. 20, 225, Docket 46.
Mattie McC. Hine et al.
Robert Edward Hine et al.
Know all men by these presents, that we, Thomas E. Waggaman, principal, and Daniel B. Clarke, surety, all of the District of Columbia, acknowledge ourselves indebted to the United States of America in the penal sum of $18,000, for the payment of which we bind ourselves and every of our heirs, executors, and administrators, jointly and severally, for and in the whole. Sealed with our seals, and dated this 7th day of July, A. D. 1899
Whereas the said Thomas E. Waggaman has been duly appointed trustee to make sale of the real estate in the proceedings in this cause mentioned.
Now the condition of the above obligation is such, that if the above bounden Thomas E. Waggaman shall well and truly discharge the duties devolving upon him as such trustee, and shall in all things obey such order and decree as this court shall make in the premises, then the above obligation to be void and of no effect; else to be in full force and virtue.
The bond, as shown by its recitals, was executed in a pending equity cause in the supreme court of the District, wherein the parties for whose use this suit is brought were parties, either plaintiff or defendant.
The declaration, in substance, averred a breach of the bond, in this: That Waggaman had assumed the duty and function of trustee for the sale directed by the decree, had sold and conveyed the property as directed, but had not accounted for the proceeds, having unfaithfully vio- [218 U.S. 493, 501] lated the trust and confidence reposed in him by squandering and misappropriating such proceeds. It was further averred that on November 21, 1905, the said Waggaman had disobeyed a decree of the court, requiring him to pay into court the sum of $8,147.27, with interest from August 1, 1904, and was therefore in default.
The defenses with which we are concerned upon this writ are those made by the surety, who, by a plea which the court below sustained, challenged the obligation of the bond. The insistence is that the supreme court of the District exceeded its authority in decreeing a sale of the land which was sold by Waggaman, and his appointment to make such a sale was a nullity, and the bond executed by him with the defendant Clarke as surety mere waste paper.
The proceeding in the supreme court in which this bond was executed was a bill in equity to sell lot No. 1912 I street N. W., Washington, District of Columbia, as the property of a minor, for purpose of reinvestment under like trusts. The title was held under the will of Robert B. Hine, who died in 1895. So much of the will as concerns the title to the premises of which a sale was decreed was in these words:
The complainant in the suit was Mattie McC. Hine, the widow of the testator, who averred that she had never remarried. The defendants were the only issue of her marriage with testator, her son, Robert E. Hine, then an infant of nine years of age, and the persons who, under the will, were given contingent interests. The minor, Robert E. Hine, was duly served and answered by guardian ad litem. The other defendants were made parties by publication, as persons not to be found in the District. The bill alleged that the dwelling house was deteriorating in value, that it was often unrented, that repairs, insurance, and taxes left an inconsiderable net income, which would go on diminishing. That she believed she could obtain $8,500 for the premises, a sum much larger than the value of the property to the remaindermen when her estate should fall in, and that the proceeds could be so invested as to much improve her income and better 'enable her to provide for the remainderman during his minority.' The bill alleged that the will did not [218 U.S. 493, 503] prohibit a sale. The prayer was for a decree of sale and for a reinvestment, in pursuance of 973, D. C. Rev. Stat.
Upon the pleadings and proof the court directed a sale of the said lot, and in the same decree appointed Thomas E. Waggaman 'trustee to make the sale,' requiring him to execute a bond of surety 'conditioned for the faithful performance of the trust reposed in him by this decree, or which may be reposed in him by any future order or decree in the premises.' By the same decree he was required 'to bring into court the money arising on such sale . . . to be disposed of under the direction of the court,' etc.
The contention is that the supreme court of the District has no inherent or general power as a court of equity to decree the sale of an infant's property for the purpose of reinvestment, and that its jurisdiction was wholly dependent upon statutory power conferred by 969 et seq., D. C. Rev. Stat. taken from the act of Congress of August 18, 1856 [11 Stat. at L. 118, chap. 163]. Section 969 reads as follows:
The contention is that the only jurisdiction conferred by the statute is confined to real estate which is by deed or will 'limited to one or more lives, with a contingent limitation over to such issue of one or more of the tenants for life as shall be living at the death of either parent,' and that, under the will of Robert B. Hine, the devise to Robert Edward Hine is a vested, and not a contingent, [218 U.S. 493, 504] remainder, while the contingent remainders-contingent on the death of said Robert and the subsequent remarriage of his mother, the said Mattie-are not limitations over to issue of either Robert B. Hine or Mattie Hine. For this construction of the statute of the court below relied upon American Security & T. Co. v. Muse, 4 App. D. C. 12, 20; Thaw v. Ritchie, 5 Mackey, 200, and Clark v. Mathewson, 7 App. D. C. 384.
Clearly, under the will there was a life tenant and a remainder over at the death of the life tenant to Robert E. Hine, who was the issue of the testator and of the life tenant. The remainder was not absolute, for if the remainderman should die, and his mother, the life tenant, remarry, this lot was to be sold and the proceeds paid over to certain collaterals named. Technically the interest was a vested remainder, subject to open and let in the testator's brothers and sisters, and to be devested upon the death of Robert E. Hine and remarriage of the life tenant. The contention now is that if the court erred in the construction of the will, or in the interpretation and application of the statute, and decreed a sale for reinvestment, not strictly authorized by the statute, that its action and decree is to be regarded as a nullity, that the sale is void, and that the appointment of Waggaman as trustee and the execution of his bond are absolute nullities.
But if we assume that, upon a critical construction of the will and of the statute, the bill seeking a sale of this property for reinvestment did not state a case clearly within the statutory authority of the court, it does not necessarily follow that the decree of sale and all else that occurred are to be treated as mere nullities, subject to collateral attacks such as this is.
The supreme court of the District is one of general jurisdiction. It possesses all of the powers which by statute are conferred upon the circuit and district courts of the United States. D. C. Rev. Stat. 760 and 765. [218 U.S. 493, 505] It may be said, indeed, to have the usual powers incident to a court of equity at the date of the Revolution, not incompatible with the changed form and principles of government, or affected by subsequent legislation. Clark v. Mathewson, 7 App. D. C. 382.
The inherent power of a court of equity over the persons and estates of infants is very wide. For the purpose of maintenance, the power over real estate is undoubtedly more comprehensive than it is over the sale of real estate for purposes of reinvestment, though manifestly for the interest of the minor. The weight of authority seems to be that it does not extend to sales merely because it shall appear to be for the interest of the infant (Bispham, Eq. 549; Story, Eq. 1357; 3 Pom. Eq. Jur. 1304, 1309), though there is not lacking very respectable authority for the power to sell real estate when shown to be for the manifest interest of the minor. 2 Kent, Com. 11th ed. *230; Hedges v. Riker, 5 Johns Ch. 167; Thompson v. Mebane, 4 Heisk. 370; and Talbot v. Provine, 7 Baxt. 502. The supreme court of the District had jurisdiction over the subject-matter, the res. It had jurisdiction over the parties. It was, according to due course of equity proceeding, called upon to examine the will and the statute which gave the power to make the sale in certain circumstances. If, then, jurisdiction consists in the power to hear and determine, as has so many times been said, and the court errs in holding that a case has been made either under its inherent power or its statutory authority, can it be said that it has usurped jurisdiction and that its decrees are absolute nullities? To this we cannot consent. If the court was one of general, and not special, jurisdiction, if, under its inherent power, supplemented by statutory enlargement, it had jurisdiction under any circumstances to sell the real estate of minors for reinvestment, it had jurisdiction to examine and determine whether the particular application was within or beyond its authority. To do this [218 U.S. 493, 506] was jurisdiction. If it errs, its judgment is reversible by proper appellate procedure. But its judgment, until it be corrected, is a judgment, and cannot be regarded as a nullity.
In the leading case of Ex parte Watkins, 3 Pet. 193, 203, 206, 7 L. ed. 650, 653, 654, the opinion was by Chief Justice Marshall. The question arose upon a writ of habeas corpus. The petitioner had been indicted and convicted. He sought to be discharged from prison because the indictment upon its face charged no offense cognizable by courts of the United States. The court said, among other things:
After referring to and commenting upon Kempe v. Kennedy, 5 Cranch, 173, 3 L. ed. 70, and Skillern v. May, 6 Cranch, 267, 3 L. ed. 220, the court added:
This case was followed in Ex parte Parks, 93 U.S. 18, 23 , 23 S. L. ed. 787, 788, and in Re Coy, 127 U.S. 731, 757 , 32 S. L. ed. 274, 280, 8 Sup. Ct. Rep. 1263, 1272, where this court, speaking by Mr. Justice Miller, said of the language just cited from Ex parte Watkins, that--
The principle has been applied in many cases, notably in cases in which want of jurisdiction as a court of the [218 U.S. 493, 508] United States was apparent on the record. Des Moines Nav. & R. Co. v. Iowa Homestead Co. 123 U.S. 552, 557 , 559 S., 31 L. ed. 202, 204, 205, 8 Sup. Ct. Rep. 217; Dowell v. Applegate, 152 U.S. 327, 337 , 38 S. L. ed. 463, 467, 14 Sup. Ct. Rep. 611.
In McNitt v. Turner, 16 Wall. 352, 365, 21 L. ed. 341, 347, the court, after passing upon various jurisdictional objections to a judicial sale of a title in controversy, said:
The line between a judgment which is a plain usurpation of jurisdiction and one which is merely erroneous, and reviewable only by seasonable appeal, is a plain one. The case in hand falls, in our judgment, within those which are merely reversible upon appellate proceedings, and the judgment decreeing the sale and appointing Waggaman as trustee to make the sale was not a nullity.
In Voorhees v. Jackson, 10 Pet. 449, 474, 9 L. ed. 490, 500, this court said:
In Fauntleroy v. Lum, 210 U.S. 230, 237 , 52 S. L. ed. 1039, 1042, 28 Sup. Ct. Rep. 641, it is laid down that a judgment cannot be collaterally impeached by showing that it was based upon a mistake of law.
But aside from the view we have expressed as to the validity of the proceedings when collaterally attacked, we are of opinion that the question of the validity of the decree of sale, the order appointing Waggaman trustee to make the sale, and the validity of the bond in suit, is [218 U.S. 493, 510] not open to question by one who voluntarily became the surety upon the bond, thereby enabling his principal to obtain the proceeds of sale. Having obtained the trust and confidence of the court by aid of the security afforded by the solemn obligation to faithfully execute the order of the court, and to pay into the court the proceeds of the sale which he undertook to make, neither the trustee so appointed, nor the surety for his performance of the trust, is in a situation to deny the regularity of the transaction. The proceeds which Waggaman received are either the funds of the beneficial owners of the property, or, if the sale be in fact void so far as to confer no title, the purchaser, in equity and justice, must be protected before the money is distributed. The benefit which Waggaman expected to secure, he has been enabled to enjoy through the voluntary execution of this bond by Clarke as his surety. That bond recites his due appointment, and it would be inequitable and unjust to permit either the principal or his surety to deny the fact.
This rule of estoppel has been applied in many cases. It was applied in respect to the bond of an Indian agent. The surety upon the bond denied liability because the government did not produce the commission showing the appointment of his principal. The court said: 'The bond upon which the suit was brought recites that he was appointed agent, and, the obligors in the 442, 15 L. ed. 129, 131. it.' Bruce v. United States, 17 How. 437, 42, 15 L. ed. 129, 131.
The principle was applied to a distiller's bond, where one of the defenses was that the bond was invalid. The court said:
It was applied in respect of a stay bond executed under a void act of legislation. 'Not to apply the principle of estoppel to the bond in this case would,' said the court, 'it seems to us, involve a mockery in judicial administration, and a violation of the plainest principles of reason and justice.' Daniels v. Tearney, 102 U.S. 415, 422 , 26 S. L. ed. 187, 189.
The opinions of the highest courts of the states are full of applications of the rule of estoppel. In Plowman v. Henderson, 59 Ala. 559, the sureties upon the bond of an administrator were not permitted to show the illegality of his appointment. To the same effect is White v. Weatherbee, 126 Mass. 450.
The sureties upon the bond of a sheriff were held estopped to deny the validity of his appointment or the regularity of his bond. Jones v. Gallatin County, 78 Ky. 491.
In People v. Norton, 9 N. Y. 176, the sureties upon the bond of a trustee appointed by a chancery court were held estopped to deny the validity of the order appointing him.
In State v. Anderson, 16 Lea. 321, 335, and United States v. Maurice, 2 Brokc, 96, Fed. Cas. No. 15,747, the rule is recognized and applied.
The questions which we have considered arose upon [218 U.S. 493, 512] a plea which set out the proceedings in the case in which the bond had been taken, and averred their nullity for want of jurisdiction. Another and distinct defense relied upon in the plea was that, after the proceeds of sale had come to the possession of said Waggaman, Mattie McC. Hine, one of the beneficiaries for whose use this suit is prosecuted by the United States, had agreed with the said Waggaman that he should retain in his possession and for his own purposes the fund aforesaid, and should pay to her interest at the rate of 5 per cent per annum, quarterly. That this agreement was acted upon and the interest so paid from the date of the receipt of the proceeds, in 1899, to May 1, 1904, and that the agreement was without the knowledge or consent of the surety. There was a demurrer and joinder thereon to so much of the said plea as set out and relied upon the nullity of the proceedings under which the bond had been executed, and a replication and issue upon the plea relying upon any alleged agreement between Waggaman, the principal, and Mrs. Hine, as one of the beneficiaries in the bond. The demurrer was overruled, and complainants, electing to stand upon it, declined to further plead; whereupon the action was dismissed. From this judgment there was an appeal to the court of appeals of the District, where the judgment was affirmed.
So much of the plea as sought to defend the action in whole or in part in consequence of the alleged agreement between the principal in the bond and Mrs. Hine, without the consent of the surety, remains at issue undisposed of, and is accordingly not considered by us.
The judgment of the Court of Appeals, so far as it determined the validity of the plea aforesaid, was erroneous, and the case is reversed and remanded with direction to sustain the demurrer, and remand the case for further proceedings not inconsistent with this opinion.
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