Hall v. Esslinger

• Decision Date: 10 March 1938
• Docket Number: 8 Div. 819
• Citation: 235 Ala. 451,179 So. 639
• Parties: HALL v. ESSLINGER.
• Court: Alabama Supreme Court

179 So. 639

235 Ala. 451

HALL v. ESSLINGER.

8 Div. 819

Supreme Court of Alabama

March 10, 1938

Appeal from Circuit Court, Madison County; Paul Speake, Judge.

Proceeding on final settlement of guardianship accounts by W.F Esslinger, as guardian of Curtis C. Crimes, non compos mentis, in which there were objections by Glenn O. Hall, as guardian of the said Crimes, and intervention by Frank T Hines, as Administrator of Veterans' Affairs. From a decree passing the account, Glenn O. Hall, as guardian appeals.

Affirmed.

Douglass Taylor, Wm. E. Davis, and J.D. Smith, all of Huntsville, for appellant.

J.B. Davis and Wm. M. Kelly, both of Tuscaloosa, amici curiae for Frank T. Hines, Administrator of Veterans' Affairs.

Thos. W. Layne and Francis Esslinger, both of Huntsville, for appellee.

GARDNER Justice.

In July, 1924, W.F. Esslinger was duly appointed and qualified as guardian for the estate of Curtis C. Crimes, a non compos mentis. The estate of the ward consisted of a payment of a lump sum of $860.68 from the Veterans' Bureau of the United States government, followed by monthly payments ranging from $20 to $80. Partial settlements were passed and allowed by decree of the probate court in October, 1925, September, 1927, August, 1928, September, 1931, and one filed in August, 1932, and allowed in April, 1934. In July, 1935, upon the guardian's application, the administration of the ward's estate was removed into the Madison circuit court, in equity, by decree duly entered, and in February, 1936, an order of reference was entered on the partial settlement filed and supplemental report presented by the guardian in August, 1936, when the register made his report stating the account of the guardian. The guardian in the same month tendered his resignation, which was accepted by the court, effective December 7, 1936, on which date the guardian filed his accounts for final settlement of the estate.

In May, 1937, upon testimony orally taken before the chancellor, a decree was entered sustaining the register's report on reference, passing and allowing the accounts for final settlement, except in one respect relating to an investment in what is known as the Randolph street lot amounting to $363, with which the guardian was charged with added interest. The guardian ad litem filed objections to the final settlement account, and counsel for the Administrator of Veterans' Affairs were permitted to intervene and also file numerous objections, and appear at the hearing. This appeal is by the newly appointed guardian, and counsel for the Administrator of Veterans' Affairs have filed brief in addition to that presented by the guardian.

The evidence, for the most part, consisted of the testimony of the guardian, Esslinger, who was very closely examined before the chancellor upon practically every investment made by him as guardian during the more than eleven years of his administration. The record indicates the usual conscientious and painstaking care the learned chancellor gave to the testimony. The record is voluminous, and has likewise been here read and studied with much care.

Brief by counsel for appellant argues certain defined assignments of error which present material matters here to be considered, which brief we have studied in connection with that presented by counsel for the Administrator of Veterans' Affairs. Elaborate discussion we deem unnecessary. At the outset, it may be observed that counsel for appellant appear to erroneously assume that the guardian in taking a mortgage on real estate, payable to himself as guardian, as security for a loan, violated the provisions of sections 8168, 8169, Code of 1923, relating to the investment of the funds of the ward in the purchase of real estate. But this question was here very recently considered, Kelly v. Wilson, 234 Ala. 455, 175 So. 551, and any such theory repudiated. The cited authority suffices for this purpose without further discussion.

Another legal principle, well understood, may also be here noted. Many, and indeed a larger portion of the objections, relate to matters embraced in partial settlements passed and allowed by decree of the probate court. Items on such accounts are presumably correct, and the burden is upon the objector to show they are improper either in fact or law. Cunningham v. Cunningham, 215 Ala. 484, 111 So. 208; Walsh v. Walsh, 231 Ala. 305, 164 So. 822.

And upon the matter of investments, the guardian in making loans should require security, and if the loan is made upon the credit of the borrower alone, he hazards the money of the ward, departs from his line of duty, and becomes an insurer against loss to the ward. Cunningham v. Cunningham, supra. And when the character of investment or loan is prescribed by statute, the guardian may lawfully invest only in such security as is prescribed, and if he departs from this course, he does so at his peril, and his good faith is no excuse for the loss sustained to the ward's estate. White v. White, 230 Ala. 641, 162 So. 368.

But acting within his authority in this respect, "the rule is well settled that a guardian making an investment for his ward is bound to act honestly and faithfully and exercise a sound discretion such as men of ordinary prudence and intelligence use in their own affairs, and if he is negligent in this respect he must answer for any resulting loss. He is not, however, an insurer of the safety of the investments, and if he acts in good faith, using due care and prudence and having regard to the best pecuniary interest of the ward, he will not be liable for any loss arising out of the transaction, although he may have committed an error of judgment in respect to the transaction out of which the loss arose." 28 Corpus Juris 1143; Brewer v. Ernest, 81 Ala. 435, 2 So. 84.

But the authorities are also to the effect that mere negligence of the guardian does not charge him with liability where no loss to the estate of the ward resulted therefrom. 28 Corpus Juris 1133 and 1141; Williams v. Harrison, 19 Ala. 277. And this rule has here been extended to the matter of compensation where the guardian not only failed to make partial settlement, but was guilty of a willful default in the matter of final settlement. The estate, however, suffered no loss, and the guardian was allowed his commission under the rule that to deprive him of his compensation he must have been "guilty of gross negligence or willful default, whereby injury has resulted to the estate." Spies v. Stikes, 112 Ala. 584, 20 So. 959, 961.

And if a guardian makes an investment for his ward, without a court order which should first have been procured, the equity court, in which the administration is pending, has the authority to sanction and confirm it, if under the circumstances the court would have decreed the investment in the first place. 28 Corpus Juris 1140; McCreary v. Billing, 176 Ala. 314, 58 So. 311, Ann.Cas.1915A, 561; Roche v. Slocumb, 206 Ala. 223, 89 So. 491, 493. Or, as said in this latter case, "Courts of chancery do not condemn such anticipatory action merely because it is a usurpation of authority, but, on the contrary, they will sanction and confirm it, if, under the circumstances, it was beneficial to the ward's estate."

The foregoing general principles of law are not of course here controverted, and should suffice for the purposes of this appeal.

Coming to the assignments of error argued by appellant, the first discussed relates to a loan to Ethel B. Finley on the Oakwood avenue property. This investment originated in a loan of $400 on a second mortgage on the property, which was accounted for and passed on partial settlement. Perhaps as a loan on a second mortgage such investments are not to be encouraged yet it is not made to appear that the investment was not justified by the value of the property. ...