Benson v. Benson

• Citation: 239 N.W. 79,213 Iowa 492
• Decision Date: 24 November 1931
• Docket Number: 41082
• Parties: IN RE GUARDIANSHIP OF CONRAD BENSON et al
• Court: United States State Supreme Court of Iowa

239 N.W. 79

213 Iowa 492

IN RE GUARDIANSHIP OF CONRAD BENSON et al

No. 41082

Supreme Court of Iowa, Des Moines

November 24, 1931

Appeal from Buena Vista District Court.--F. C. DAVIDSON, Judge.

In the court below the objectors filed exception to the final report of their guardian, C. H. Wegerslev. After making certain corrections in the report, the district court approved the same.--Modified and affirmed.

Modified and affirmed.

Bailie & Edson, for appellees.

Whitney Whitney & Stern, for appellants.

KINDIG J. EVANS, ALBERT, MORLING, and GRIMM, JJ., concur. FAVILLE C. J., takes no part.

OPINION

KINDIG, J.

On December 22, 1910, C. H. Wegerslev, the appellee, was appointed guardian for the three minors, the objectors and appellants, whose names and ages are respectively as follows: Conrad F. Benson, 13; Edgar H. Benson, 11; and Grace C. Benson, 5.

The minors did not live in the home of the guardian, nor did he receive the benefit of their services. At the time the guardian was first appointed, the minors owned both real and personal property. This property was taken into custody by the guardian, and converted into cash. According to the reports, the principal sum of this property aggregated $ 9,838.27. From time to time the principal sum was invested by the guardian in behalf of the minors. As a result of those investments, there was a net gain for the minors in the total sum of $ 5,889.34. It is indicated by the record that the guardian procured for the minors six per cent interest on the principal. Thus it appears that the total amount of trust funds received by the guardian, including both principal and interest, was $ 15,727.61.

During the execution of his trust, it appears that the guardian filed two or three reports of his administration, before July 18, 1925. Then on said date, the guardian filed a final report and gave copies thereof to his wards, who made no objection thereto. Apparently, however, the guardian did not bring the report on for hearing, and on October 29, 1930, the wards filed written objections thereto.

Hence, on December 1, 1930, the present controversy was heard in the district court on the objections. After listening to the evidence, the trial court disallowed six items and otherwise approved the report, and the wards, the objectors, appeal therefrom.

I. The appellants complain because the district court approved the guardian's unauthorized compromise of a note executed by the Alta Hospital. This obligation arose through a loan of the appellants' money made by the guardian to the hospital. A note to evidence the indebtedness was given by several makers, including the guardian as an individual. These makers, it is claimed, were acting in behalf of the hospital.

According to the terms of the note, the money loaned was to bear six per cent interest until maturity, and eight per cent thereafter. Because of unfavorable operating conditions, the hospital became financially involved and was apparently unable to pay the entire amount of approximately $ 1,000, accruing when interest is figured on the basis of eight per cent after maturity. Appreciating the unfavorable situation, the guardian compromised the debt by accepting $ 500 in full settlement thereof. So under this compromise, it appears that the investment bore something less than six per cent interest. When figuring the interest at eight per cent, the amount due would have been the $ 1,000 aforesaid. Under those circumstances, the compromise involved only the amount of interest to be charged.

Complaint is made of this act of the guardian because the district court did not authorize the investment originally, nor did that tribunal later authorize the compromise. On the trial of this case, however, the district court in effect did ratify and approve the compromise. Did the trial court err in so doing?

Section 12581 of the Code provides:

"Guardians of the property of minors must prosecute and defend for their wards, may employ counsel therefor, lease lands, loan money, and in all other respects manage their affairs, under proper orders of the court or a judge thereof." (The italics are ours).

That section has been fully interpreted by this court.

"No loans made, or other management of the minor's estate, have validity, generally speaking, without 'the proper order of the court or a judge thereof.'"

Andrew v. Farmers' Savings Bank of Goldfield, 207 Iowa 394, 223 N.W. 249; Cronk v. American Surety Company, 208 Iowa 267, 225 N.W. 454; Kowalke v. Evernham, 210 Iowa 1270, 232 N.W. 670; In re Guardianship of Pharmer, 211 Iowa 1285, 235 N.W. 478.

Within proper limitations, however, the district court, on a sufficient showing, may approve the act of the guardian and thereby validate it, although originally there was no judicial authorization therefor. As said in Robinson v. Irwin, 204 Iowa 98, 214 N.W. 696, reading on page 101:

"It is a general rule that, unless prohibited by some statutory provision, the court may approve an act which it might have authorized or directed to be done, and with the same effect. We think no such prohibition is to be found in the statute under consideration (Section 12581, above quoted). The language of the statute is that a guardian may loan his wards' money and manage their affairs under the orders of the court or a judge thereof."

To the same effect see Cronk v. American Surety Company (208 Iowa 267, 225 N.W. 454), supra; Easton v. Somerville, 111 Iowa 164, 82 N.W. 475 (local citation, 172); Valley National Bank v. Crosby, 108 Iowa 651, 79 N.W. 383 (local citation, 655). So it appears that the district court may, by a subsequent order ratify and approve a previous un authorized act performed by the guardian in the management of his wards' estate. A guardian who proceeds with the management of his wards' estate without a previous court order authorizing the act, of course, faces the hazard that the court afterward may not ratify or approve the same. Such unauthorized proceeding on the guardian's part is entirely at his risk because the court might not later validate the action.

The remaining question to be determined, then, is whether the district court was justified, under the facts and circumstances here involved, in approving the compromise. Generally speaking, the ward is entitled to realize six per cent interest on the moneys handled by the guardian without authority. While it is claimed by the guardian that the loan was made to the hospital, for all practical purposes, however, the makers of the note are responsible therefor. Appellee, it is to be remembered, was one of those makers. In effect, then, he compromised with himself on a basis that netted the wards less than six per cent interest on the loan. According to the testimony of the appellants, the note bearing six per cent interest would have amounted to $ 666, rather than $ 500. That testimony has not been overcome by any evidence furnished by the appellee. Possibly the hospital was financially unsound, but appellee was a maker of the note and liable therefor. Nothing appears in the record, then, to indicate why the compromise of the hospital claim should be made for anything less than the entire principal and six per cent interest. Therefore the guardian is not entitled to credit for this $ 166.

At this juncture it appears that the district court was in error and to the extent signified, its judgment should be modified.

II. Furthermore, it is contended by the appellants that the guardian should not be entitled to disbursements made for items to which no vouchers are attached. When the hearing was had, it does appear that many vouchers were missing. However, some were intact.

Upon this subject the guardian testified that when he originally filed the final report, vouchers were fully attached. The district court found that many papers for some reason had been taken from the court house, including these vouchers, and that the guardian was not responsible for the loss. A careful reading of the record indicates that the guardian is in no way responsible for the fact that these vouchers are missing. Section 12597 of the Code involved, contains this provision:

"All guardians are required to render an account to the district court, at least once each year, of all moneys or other property in their possession, with all interest which may have accrued on money loaned, belonging to their wards."

There is no express requirement in that legislation for vouchers. It has been said by this court that vouchers should accompany the guardian's report. Foteaux v. Lepage, 6 Iowa 123 (local citation, 131). Under proper circumstances, however, the guardian may be excused from producing vouchers if he furnishes other evidence to show the correctness of his accounts. Foteaux v. Lepage, (6 Iowa 123), supra; 28 Corpus Juris 1213, Section 371; 24 Corpus Juris 1020 and 1021, Sec. 2475; In re Livernois' Estate, 78 Mich. 330, 44 N.W. 279 (Mich.); In re Campbell's Estate, 98 Wash. 295, 167 P. 905 (local citation, 907); Rice v. Tilton (Wyo.) 14 Wyo. 101, 82 P. 577 (local citation, 581). See also In re Estate of Eschweiler, 202 Iowa 259, 209 N.W. 273; Tudhope v. Avery, 106 Mich. 149, 63 N.W. 969 (Mich.); LaFollette v. Higgins, 28 N.E. 768 (Ind.). In cases of this kind, the burden of proof, of course, is upon the guardian. In re Estate of Eschweiler, (202 Iowa 259, 209 N.W. 273), supra; In re Guardianship of Pharmer, (211 Iowa 1285, 235 N.W. 478), supra; In re Moe's Estate, 213 Iowa 95, 237 N.W. 228.

Even though the burden of proof is thus placed upon the guardian it appears under this record that appellee has met the same in all instances except where the judgment of the district court heretofore has been and hereafter is modified. Consequently the...