Guardianship of Laufert, In re

• Decision Date: 13 November 1956
• Docket Number: No. 48950,48950
• Citation: 79 N.W.2d 187,247 Iowa 1352
• Parties: Matter of the GUARDIANSHIP of William LAUFERT. Clara M. WEGNER, Guardian, Appellee, v. William LAUFERT, Appellant.
• Court: Iowa Supreme Court

Page 187

79 N.W.2d 187

247 Iowa 1352

Matter of the GUARDIANSHIP of William LAUFERT Clara M. WEGNER, Guardian, Appellee, v. William LAUFERT, Appellant.

No. 48950.

Supreme Court of Iowa.

Nov. 13, 1956.

Mote, Wilson & Welp, and Haupert & Robertson, Marshalltown, for appellant.

Boardman, Cartwright & Druker, Marshalltown, D. B. Kliebenstein, Gladbrook, and Willard F. Russell, Toledo, for appellee.

GARFIELD, Justice.

Trial of objections by the ward to the final report of his guardian resulted in approval of the report except in a few minor respects. The ward has appealed. We affirm the decision.

May 8, 1951, Clara Wegner was appointed guardian of the property of her uncle William Laufert upon a petition filed by him under section 670.5, Codes 1950, 1954, I.C.A. The petition stated 'he is ill and desirous of being relieved for the time being of personal care of his property.' February 27, 1952, the ward filed his petition to terminate the guardianship which alleged he 'is mentally competent and alert and * * * capable of the management of his own business affairs. A guardianship * * * is no longer necessary.' July 2, 1952, Laufert was discharged from guardianship and the guardian was ordered to file her final report. To this report the ward filed 35 objections.

This case involves the same William Laufert and Clara Wegner who were parties to Laufert v. Wegner, 245 Iowa 472, 62 N.W.2d 758. The cited decision upholds conveyances of valuable real estate from Mr. Laufert to Clara Wegner and his other nieces, a nephew, a grandniece and a grandnephew. A reading of the cited opinion will help to better understand the present controversy. Four of the objections (10 to 13) to the final report allege no satisfactory accounting is made for the real estate conveyed to Laufert's relatives as aforesaid. Parts of two other objections (34 and 35) are based on claimed invalidity of these conveyances. Laufert v. Wegner, supra, amounts to an adjudication against these objections and parts thereof.

I. This probate action is not reviewable de novo here but only upon the errors assigned. The trial court's findings have the force and effect of a jury verdict and, if supported by substantial evidence, will not be disturbed. In re Lenders' Estate, 247 Iowa ----, 78 N.W.2d 536, 540, and citations. The record does not support appellant's suggestion the case was tried as an equitable proceeding. However, even if our review were de novo we would still affirm the trial court.

II. We have held four times the powers and duties of a guardian appointed upon the ward's own application under Code section 670.5, I.C.A., are the same as those of a guardian appointed upon the petition of a third party under section 670.2. In re Anderson's Guardianship, Iowa, 78 N.W.2d 788, 790, 791, and citations.

In some respects the Anderson case resembles the present controversy. There as here the guardianship was handled in the main as the wards desired. The cited opinion says, 'And the fact that a ward is alert mentally and has a guardian appointed because of physical inability to manage his own problems creates a situation differing from the more common one where the ward is mentally incompetent.' We also point out that a guardian's failure to secure prior authority and to file reports will not defeat his right to recover for services and expenditures in the absence of a showing of bad faith or loss to the estate. See also In re Guardianship of Husmann, 245 Iowa 830, 839, 64 N.W.2d 252, 257, which says that in a matter of this kind the court should endeavor to follow principles of fairness and justice.

It appears that when William Laufert asked Mrs. Wegner to act as guardian she was doubtful she could handle it, Mr. Laufert told her she wouldn't have much to do other than take orders back and forth, her husband was to do the work on the farms at Laufert's order and Mr. Kliebenstein, Laufert's attorney for 20 years, was to do the legal work. In the main the ward, who was confined to a hospital, directed what was to be done by the guardian and her husband. Mr. Kliebenstein served as the guardian's attorney.

III. We consider now the more important objections to the guardian's final report.

The guardian did not list, or account for interest on, a promissory note of $11,000 signed by Mr. and Mrs. Wegner payable to Mr. Laufert. Existence of this note until February 28, 1951, is conceded. Interest was paid on it to February 27. The note was given for sums advanced to the Wegners without their request by Mr. Laufert, apparently as part of his plan to divide a large part of his estate among his relatives. He was without wife or issue. He also advanced large sums to other relatives. There is substantial evidence these advancements were intended as gifts rather than loans to be repaid.

In any event Mr. Laufert sent for the Wegners on February 28, 1951, brought out the $11,000 note, directed Clara to put it in the stove and burn it, lifted the stove lid for that purpose and she did as directed. Mr. Laufert then said, 'Now you don't owe me anything any more.' This was further in pursuance of his plan to divide much of his wealth about equally among his relatives and occurred more than two months before the guardianship was instituted.

The ward's version of what occurred is somewhat different. He admits he handed the note to Mrs. Wegner but says he told her to hide it so if he died it would not be found and would not be a charge against the Wegners, that Clara thereafter burned the note because she said she had no safe place to keep it.

In June, 1951, Mr. Laufert asked Mr. Wegner to make a new note to him to replace the former one but the request was not complied with. On another occasion the ward asked for the return of a gift made by him about two months previously--a sewing machine he had given the guardian's little daughter.

There is ample evidence to support the conclusion that the debt, if it was such, represented by the $11,000 note was extinguished by gift from Laufert to the makers of the note. Consequently the guardian was under no duty to list the note or account for interest thereon. That a debt may be extinguished in this manner see Percival-Porter Co. v. Oaks, 130 Iowa 212, 216, 106 N.W. 626; Annotations 37 A.L.R. 1144, 1146, 84 A.L.R. 383, 384-385; 38 C.J.S., Gifts, § 47; 24 Am.Jur., Gifts, sections 72, 74. See also Cherniss v. Thompson, 209 Iowa 309, 228 N.W. 66; Darland v. Taylor, 52 Iowa 503, 3 N.W. 510, 35 Am.Rep. 285. Haldeman v. Martin, 205 Iowa 302, 217 N.W. 851, cited by appellant, is not in point.

IV. Appellant assigns error in the finding, contrary to his objections, that $34,900 reported to the court for sale of real estate was not properly guardianship money to be accounted for and that payment of $18,495 as gift tax was a proper expenditure of guardianship funds.

When appellant informed his attorney Mr. Kliebenstein he wanted to convey the real estate involved in Laufert v. Wegner, supra, 245 Iowa 472, 62 N.W.2d 758, he prescribed the condition the grantees must pay the gift tax and expenses connected with the transaction. As the cited opinion indicates, Mr. Kliebenstein engaged the law firm of Dickinson & Dickinson of Des Moines to work out the details of seeing that this condition was met. They prepared an agreement, signed by Laufert, the grantees of the deeds and Kliebenstein, providing the grantees should pay Kliebenstein as escrow agent sums totaling $34,900, upon so doing he would deliver the deeds to them and would pay the expenses incident to conveyance of the properties.

The grantees complied with this agreement and Mr. Kliebenstein paid expenses totaling $5,293.50. The main expense item was the fee of $4,900 to Dickinson & Dickinson. Kliebenstein turned over to the guardian $29,606.50, the rest of the $34,900 he collected from the grantees of the deeds. From this sum the guardian paid the gift tax of $18,495. There is no claim the gift tax was less than the amount paid.

One item of expense incurred at the request of Dickinson & Dickinson was $500 for appraising the lands Mr. Laufert conveyed to his relatives. This appraisal was evidently deemed essential preparation for making the gift tax return. The guardian paid this $500 four months before she received the $29,606.50 from Kliebenstein. The court therefore charged the guardian personally with interest at 5 per cent for four months ($8.33) on this disbursement.

We approve the trial court's refusal to compel the guardian to account for the full sum of $34,900 collected by the escrow agent from the grantees of the deeds. The effect of so doing would be to require the guardian to pay from her own funds the expenses incident to the conveyances, mainly the fee of the Des Moines tax attorneys for which she was in no way responsible. As previously explained these expenses were disbursed pursuant to the agreement to which the guardian was not a party. They were no part of the guardianship funds.

The guardian properly accounted for the amount the escrow agent paid her. It will be noticed this amount exceeds the $18,495 paid as gift tax plus the $500 appraisal fee by $10,611.50. This surplus was evidently collected from the grantees as a cushion to protect against loss to Mr. Laufert if additional gift tax were later assessed.

Appellant says there is no provision of federal law authorizing a guardian to make a gift tax return under the circumstances we have here. We think this is unimportant if true. Concededly a gift tax was due in a sum not less than the guardian paid. The ward suffered no loss by the guardian's making the return and the tax was paid with money paid by grantees of the deeds to the escrow agent. If the escrow agent had paid the gift tax from the fund in his hands before paying over the rest of it to the guardian the net result would have been the same.

V. The guardian is criticized for not including in the gift tax return the $11,000 note...