Court Opinion

ID: 3576647
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:28:36.537401+00
Date Added: 2024-06-11T09:35:44.564100
License: Public Domain

I vote to affirm. Both parties knew that, pursuant to section85 of the Domestic Relations Law and section 21 of the Personal Property Law, the guardian was exceeding her powers in purchasing speculative stocks for the estates of infants. Those statutes confer upon a guardian only those powers provided by section 111 of the Decedent Estate Law, which *Page 51 
in turn authorizes an executor to invest in the same kind of securities as those in which a savings bank may invest. The Banking Law (Cons. Laws, ch. 2, § 239) allows investments by savings banks in certain enumerated kinds of securities "and noothers." A savings bank, therefore, violates the statute when it purchases securities not authorized by this section and this guardian not only exceeded her powers in buying speculative stocks but also violated the statute. These investments were not only unauthorized but were actually prohibited. Defendant Barret was aware of this fact and aided her in her violation. He is equally liable. (National Surety Co. v. Manhattan MortgageCo., 185 App. Div. 733.) Before the guardian made her indemnity agreement with him, he wrote to her suggesting that her attorney "has no doubt told you that there is some liability connected with doing this, which you are ready to assume and which I will be also, if it would only concern us, but in the event of the death of either one of us, as you know, other factors would be brought in, and he has therefore suggested that you should write me a letter absolving me of any such liability."
The Appellate Division has unanimously decided that an agreement so intentionally violative of the purpose of the statute enacted for the protection of infants' property is void as against public policy. Courts are not eager to protect one who makes such a contract, but they will refuse to aid another who has participated with that one in the violation of a statute. Not only does the conclusion of the Appellate Division in this case appear to be firmly based on the law but it seems to be a most salutary rule. A different result tends to encourage stockbrokers, without incurring any liability, to induce guardians and other trustees to gamble in speculative stocks forbidden by the Banking Law, the Decedent Estate Law and the Domestic Relations Law.
CRANE, Ch. J., LEHMAN and LOUGHRAN, JJ., concur with HUBBS, J.; O'BRIEN, J., dissents in opinion; CROUCH and FINCH, JJ., not sitting.
Judgment accordingly. *Page 52