Des Moines Savings Bank v. Krell
| Citation | 156 N.W. 858,176 Iowa 437 |
| Decision Date | 15 March 1916 |
| Docket Number | 30704 |
| Parties | DES MOINES SAVINGS BANK, Guardian, Appellee, v. ZORA M. KRELL, Appellee, BANKERS SURETY COMPANY et al., Appellants |
| Court | United States State Supreme Court of Iowa |
REHEARING DENIED WEDNESDAY, JUNE 28, 1916.
Appeal from Polk District Court.--HUGH BRENNAN, Judge.
PROCEEDINGS in probate upon the final report and discharge of Zora M Krell (formerly Zora M. Hahnen) as guardian of her two minor children. Exceptions were filed to her report by Des Moines Savings Bank, as guardian for the same wards, having been duly appointed as such upon the resignation of the mother. Upon the hearing of such exceptions, her sureties upon successive bonds appeared and made defense. Each surety company also denied liability for any dereliction, if any that might be adjudged against the guardian. The trial court overruled many of the exceptions presented by the plaintiff. It sustained plaintiff's exceptions to the extent that it found the former guardian to have been derelict as to a worthless loan of $ 1,800 at one time, and again as to another worthless loan to the same borrower to the amount of $ 237. The guardian was ordered to pay over such amounts with interest from the date of the loans, and the sureties were held liable therefor, as will be later explained more in detail. From the order overruling its exceptions, the plaintiff has appealed. From the order finding the guardian liable for the items of $ 1,800 and $ 237 and finding the surety companies liable therefor, the surety companies (three in number) have each appealed. Mrs. Krell has not appealed.--Modified and Affirmed.
Modified and Affirmed.
B. J. Cavanagh, for Bankers Surety Company; E. D. Samson, for American Surety Company of New York; Dunshee & Haines, for Lion Bonding & Surety Company, appellants.
Brammer, Lehmann & Seevers, for Des Moines Savings Bank, appellee.
A. G. Rippey, for Zora M. Krell, appellee.
The guardian whose accounts are under investigation was formerly Mrs. Zora M. Hahnen, the widow of H. F. Hahnen, who died in February, 1911, leaving surviving him such widow and their two minor children, Gretchen and Robert, aged respectively eleven and five years. $ 9,000 came into the hands of the guardian as the proceeds of a life insurance policy in favor of the children. In March, 1911, she was appointed guardian, her bond being fixed at $ 9,000. The defendant Bankers Surety Company became the surety on her bond for an agreed compensation of $ 36 per year. The conditions of the bond authorized the surety company to take joint control with the guardian of the money of the wards in her hands. At the expiration of one year, the Bankers Surety Company took steps under the statute to be relieved from the further liability of such surety. Such proceedings were consummated about April 15, 1912, and a formal order was entered, discharging such surety company from further liability on its bond. On the same date, the defendant American Surety Company became surety for the guardian upon a bond of $ 9,000, and this also was for a compensation of $ 36 per year, and upon the same conditions as to joint control as the bond of the previous surety company. At the end of one year, this company also took steps under the statute to relieve itself from further liability as surety, and instituted proceedings to that end. A formal order was entered on June 17, 1913, purporting to fully discharge such company from further liability. Prior to this time, and at the expiration of the first year of suretyship of the American Surety Company, the court had reduced the penalty of the bond to be thereafter required of the guardian to the sum of $ 2,500, and authorized her to procure a new bond in such sum. Such bond was procured from the defendant Lion Bonding & Surety Company as surety on April 23, 1913. In September, 1914, the mother resigned as guardian and the plaintiff herein was appointed in her stead, and the issue was made upon her final report, as already indicated. The mother, therefore, controlled the estate of her wards for a period of about three years and a half. She made annual reports. These reports were approved from time to time without contest. A multitude of items enter into the dispute now presented, but we shall not undertake to deal with them in detail. So far as mere expenditures were concerned, the principal of the estate had been reduced approximately $ 1,000. The estate was further impaired to the extent of about $ 2,100 in bad loans, as already indicated. On the appeal of the plaintiff, we have to consider whether the trial court properly approved the expenditures reported by the mother guardian and properly approved the diminution of the principal fund to the extent of about $ 1,000 in three years and a half. And we proceed first to a consideration of plaintiff's appeal.
I. Needless to say that the hearing upon this report was in probate and that the order of the trial court thereon will not be lightly disturbed. Not only has the finding of fact of the probate judge in such a case the force and effect of a verdict, but there is a degree of sound discretion that enters into the judgment of the probate court as to the nature and extent of expenditures which may be properly approved in a given case. The salient complaint of the plaintiff at this point is that many items of the mother's report were such as pertained to herself personally and should have been paid out of her personal estate, and that they were not expenses incurred on behalf of the children, and that they were therefore not properly chargeable to the estate of the children. For instance, there were charges for dry goods and for groceries, some of which, at least, must have been used by the mother herself. Some items of clothing are shown to have been purchased exclusively for the mother. There was one item of charge for a bed. Two beds had been bought previously. It is argued that two beds were sufficient for the children and that the third bed should not have been bought at their expense or charged to their account. This will indicate the general nature of the items complained of and the general nature of the complaint made.
The general legal propositions urged by the plaintiff at this point are quite unassailable. It is doubtless true, as a general proposition, that the estate of these children cannot properly be charged with expenditures which do not fairly operate to the benefit and best interest of the children themselves. Even then, it does not necessarily follow that the expenditures must be confined to food actually consumed or clothing actually worn by the wards. The case before us is illustrative of the exceptional circumstances which may properly call for a considerable discretion on the part of the probate judge as to the nature and scope of the expenditures which may be properly approved. The case is one where there was no bad faith on the part of the mother and no lack of effort on her part to do her utmost in behalf of her children. What have sometimes been called "fireside equities" appear as a background to those facts which more directly concern the court. The deceased husband was in his lifetime a bank clerk, receiving a salary of from $ 150 to $ 160 a month. A few years before his death, his wife, this guardian, brought to him out of her mother's estate an inheritance of $ 15,000. When he died, the only property left by him was a little household furniture and an equity in the homestead of the value of $ 125. This equity was sold for such sum and two-thirds thereof passed to the credit of the children. Insurance inured to the benefit of the children to the extent of $ 9,000, and to the benefit of the widow to the extent of $ 2,000. The $ 2,000 of the widow was all paid out within a few months in the payment of the debts of the deceased, many, if not all, of which were for family expenses and for funeral and hospital expenses and the expenses of the last sickness. Within a few months following the death of her husband, the guardian was compelled to go to the hospital and submit to a major surgical operation, which took the remnant from her purse and necessarily left her in a more or less enfeebled condition. During this period of time, she hired the care, board and lodging of the children at a hotel. She did likewise in an attempt to pursue employment for the purpose of earning a living. She was between two alternatives. One was to seek permanent employment and to hire someone else to care for her children. The other was to abandon employment and devote herself to the care of her children. Under the approval of the probate court, she adopted the latter course. It necessarily involved more or less expenditure of the estate of the children in the support of the mother while she was rearing them. She had no estate of her own. She had no means of making a living that would be consistent with her care of her children. We think it was within the sound discretion of the probate court to find that the best interests of the children required that they should be in charge of their mother and that she should make a home for them as far as she could; and, in the absence of any estate owned by the mother, that the expenditures of such an arrangement, within reasonable limits, should be paid by the estate of the children. We would not make light of the duties of parents as guardians to conserve the estates of children which may come into their hands; nor would we absolve them from the duty of bearing for themselves the ordinary burdens and expenditures of their own families where they have the ability or the means to do so. And this rule is especially applicable where the estate of the...
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