Haudenschilt v. Haudenschilt

• Decision Date: 11 June 1946
• Docket Number: No. 9722.,9722.
• Citation: 39 S.E.2d 328
• Parties: HAUDENSCHILT. v. HAUDENSCHILT et al.
• Court: Georgia Supreme Court

39 S.E.2d 328

HAUDENSCHILT.

v.HAUDENSCHILT et al.

No. 9722.

Supreme Court of the State of Georgia

June 11, 1946.

Dissenting Opinion Aug. 9, 1946.

Syllabus by the Court

1. Code, 44-4-20, does not deprive a court of equity of its general jurisdiction to entertain suits to surcharge and falsify the settlement of the accounts of a fiduciary where such settlement is based upon, or procured by, fraud, actual or constructive.

2. Failure of a guardian to report to a commissioner of accounts, before whom his settlement is pending, all funds received by him as guardian, for which, by law, he is required to account, constitutes fraud against his ward, and a settlement procured through such failure will be set aside by a court of equity in a suit therein, instituted to surcharge and falsify the same.

KENNA, President, and RILEY, J., dissenting.

Appeal from Circuit Court, Wetzel County.

Suit by James Paul Haudenschilt against W. Pearl Haudenschilt, executor under the last will and testament of James S. Haudenschilt, deceased, who was plaintiff's guardian, and others, to surcharge and falsify a settlement of the account of such guardian. From a decree dismissing the bill, plaintiff appeals.

Reversed and remanded.

E. H. Yost and G. W. Coffield, both of New Martinsville, for appellant.

A. E. Larrick and Walter F. Ball, both of New Martinsville, for appellees.

FOX, Judge.

This is a suit in equity, instituted in the Circuit Court of Wetzel County, in which the plaintiff seeks to surcharge and falsify a settlement of the accounts of James S. Haudenschilt, guardian for the plaintiff. In substance and effect, the settlement under attack was made in the lifetime of the guardian, who is now deceased, although, technically, only a report of a commissioner of accounts, made after the death of the guardian is involved. The devisees and legatees under the will of James S. Haudenschilt, other than plaintiff, are made defendants, as are the executor under said will and the surety on his bond as such. Lola M. Boothby is also made a party defendant by reason of an allowance to her of a claim against the estate of James S. Haudenschilt, which is sought to be reconsidered and disallowed. The circuit court, for reasons stated by it in writing, made a part of the record, dismissed the plaintiff's bill, and from the decree of dismissal, entered on July 25, 1944, we granted this appeal. The suit, being one in which the substantial issues are between the plaintiff and the executor of James S. Haudenschilt, these parties will be referred to as "plaintiff" and "defendant", the positions they occupied in the court below, and James S. Haudenschilt; will be referred to as "guardian".

The nature of the issues of law and fact presented on this record requires a summary of developments concerning three trusts and over a long period of time. These are the estate of James F. Haudenschilt, father of plaintiff; the account of the administratrix of such estate, who was the mother of plaintiff; and the estate of James S. Haudenschilt, plaintiff's grandfather, who, until plaintiff reached his majority on March 1, 1934, acted as his guardian.

On October 31, 1918, plaintiffs father, James F. Haudenschilt, died intestate, seised and possessed of certain real and personal property. The value of the personal property appears to have aggregated approximately $18,382.24; and the real estate was sold for $2,500.00. The appraisement of this estate does not appear in the record and is not available. The figures mentioned above are obtained from the settlement of the accounts of the administratrix, and from court records of the sale of the real estate made by the guardian. It should be stated here that shortly after the death of James F. Haudenschilt, his wife, Auttie Haudenschilt, now deceased, qualified as administratrix of his personal estate; and on May 24, 1919, James S. Haudenschilt, was appointed and qualified as guardian for plaintiff.

The record discloses, without serious question, the amount of money which went into the hands of the guardian. This is shown first by reference to the settlement of the accounts of Auttie Haudenschilt, administratrix, admitted to record on January 21, 1922. In that settlement, made before E. O. Keifer, commissioner of accounts, the administratrix charges herself with the sum of $18,382.24, made up of goods and fixtures sold for $6,362.00; bank account, cash and book account, $5,381.24; household goods and stock $1,071.00; war savings stamps, at face value, $1,068.00; and liberty bonds, at face value, $4,500.00. The administratrix established the payment of certain items of account, and, taking into consideration her compensation, she paid out of said estate the sum of $1,245.66, leaving to be accounted for the sum of $17,136.58. She retained $5,712.20, as her share of her husband's estate. On June 25, 1920, the guardian executed to Auttie Haudenschilt a receipt in the words and figures following: "Received from Auttie Haudenschilt, administratrix of the estate of J. F. Haudenschilt, deceased, the sum of $11512.29 in cash, liberty bonds, notes, etc. in full settlement of the amount from her to Paul Haudenschilt, as heir and only child of J. F. Haudenschilt, deceased."

On June 14, 1919, the guardian filed his petition against his ward, in the Circuit Court of Wetzel County, praying for authority to sell and convey four certain parcels of real estate, of which the father of his ward died seised, and such proceedings were had in the case that a sale of the property was made for the sum of $2,500.00, which sale was confirmed. Auttie Haudenschilt, as the widow of James F. Haudenschilt, was decreed the sum of $486.70, as her dower interest in said real estate, leaving a remainder of the purchase price, $2,- 013.30, which went into the hands of the guardian. It clearly appears, therefore, according to the receipt which the guardian gave to Auttie Haudenschilt, administratrix, and the record of the circuit court, showing the sale of the real estate aforesaid, that there passed into the hands of the guardian the sum of $13,525.59.

The first settlement by the guardian is dated August 1, 1932, and was made before A. C. Chapman, commissioner of accounts. In that settlement the guardian is charged with the sum of $10,880.29, which, it will be observed, was less than the $11,512.29 for which the guardian receipted to the administratrix. In the report of the commissioner it is stated that there is still due the guardian from Auttie Haudenschilt, administratrix, the sum of $544.09, which, it is said, the guardian had not then been able to collect. The $10,880.29, with which the guardian was charged was made up of certificates of deposits and checks, $5,312.-29; war savings stamps, $1,068.00; liberty bonds at face value, $4,500.00. Added to that were various items of interest on liberty bonds and the Pyle and Mason notes; and credit was taken for various sums paid by the guardian for the maintenance of his ward and other expenses, and a final balance was struck, as of July 1, 1932, showing the guardian as then indebted to his ward in the sum of $11,061.95. In other words, over the long period of time since he became guardian in 1919 to the date of his settlement in 1932, the estate had increased in value.

The next settlement by the guardian, which is claimed to be final settlement, being made one day after plaintiff attained his majority, charges the guardian with the sum of $11,061.95, the total found to be due on the first settlement, to which was added certain interest received on liberty bonds and certain notes, making the total chargeable to the guardian $11,476.95. Against this amount he was allowed credit for expenditures, principally for the ward's education, and including an allowance of one hundred dollars to the guardian, and costs of the commissioner's report, all aggregating $2,252.04, leaving a balance due from the guardian to plaintiff of $9,224.91. The report of the commissioner contains a statement that the estate of Auttie Haudenschilt was indebted to the guardian in the sum of $619.35, and that plaintiff, being the only heir and distributee of said estate, desired that said debt be discharged by allowing the same as a credit to James S. Haudenschilt, guardian, in his settlement, which was done, and that was included in the guardian's credit aggregating $2,252.04, aforesaid. Presumably, this is the $544.00 which the guardian mentioned as not having been paid to him by the administratrix. The report also contains this language: "Your commissioner further finds and reports that said guardian, J. S. Haudenschilt, has this 1st day of March, 1934, turned over Liberty Bonds, cash and securities, to the said James Paul Haudenschilt, amounting to the sum of $9,224.91; that the said J. S. Haudenschilt Guardian, having fully accounted and paid over all funds in his hands as such Guardian, should be discharged from all liability as such, together with the surety on his bond."

Assuming the correctness of the above report of settlement, it would appear to be a final settlement of the account between plaintiff and his guardian; but plaintiff denies that he understood it to be a final settlement; avers that it was not such settlement; and that from time to time thereafter he sought a final settlement with his guardian, but was unable to obtain it.

Nothing further developed in the matter prior to the death of James S. Haudenschilt on April 25, 1937, after which the defendant, W. Pearl Haudenschilt, qualified as executor under his last will and testament. The settlement of the estate of the said James S. Haudenschilt was referred to A. C. Chapman, the same person who had made the guardian's settlement aforesaid. Chapman later retired from the case, and the matter was referred to L. S. Hall, a commissioner of accounts, before whom plaintiff filed a claim against the estate of his guardian, in which he seeks to charge such estate with the sum of...