In re Deming's Guardianship

• Decision Date: 15 November 1937
• Docket Number: 26275.
• Citation: 73 P.2d 764,192 Wash. 190
• Court: Washington Supreme Court
• Parties: In re DEMING'S GUARDIANSHIP. v. UNITED STATES FIDELITY & GUARANTY CO. DEMING et al.

73 P.2d 764

192 Wash. 190

In re DEMING'S GUARDIANSHIP.

DEMING et al. v. UNITED STATES FIDELITY & GUARANTY CO.

No. 26275.

Supreme Court of Washington, En Banc.

November 15, 1937

Appeal from Superior Court, King County; Calvin S. Hall, Judge.

Proceedings in the matter of the guardianship of Robertson P. Deming Pierson P. Deming, and Helen P. Deming, minors, wherein Robertson P. Deming, having become of age, filed exceptions to the report of the Seattle Trust Company, as guardian, and wherein Clarence P. Deming, a former guardian, was cited into court, and Earl G. Rice was appointed guardian ad litem for Pierson P. Deming and Helen P. Deming, minors. From the decree, the United States Fidelity & Guaranty Company, the surety on Clarence P. Deming's bond, appeals.

Cause remanded, with instructions to modify decree in accordance with opinion, and decree affirmed except as modified.

Preston Thorgrimson & Turner, of Seattle, for appellant.

George B. Cole and John Wesley Dolby, both of Seattle, per se.

Roberts & Skeel, Wm. Paul Uhlmann, and Earl G. Rice, all of Seattle for respondents.

BEALS Justice.

This case involves the accounts of the guardian of three minors. Trial Before the superior court consumed over 40 days, and the statement of facts contains 5,769 pages.

Briefly stated, the facts giving rise to the litigation are as follows: Clarence P. Deming and Helen Presbrey intermarried November 12, 1912. Three children were born to them: Robertson, born July 15, 1914; Pierson, born December 25, 1917; and Helen, born December 4, 1919, Mrs. Deming died February 28, 1920, leaving only her interest in a small community estate. By her will, Mrs. Deming left all her property to her husband, but, as none of her children was mentioned in her will, as to them she died intestate. At this time, Mr. Deming was ill and was indebted in a considerable amount. The community assets included Mrs. Deming's diamond ring and an automobile, which personal property the trial court valued at $2,237.50. Mr. Deming was appointed executor of his wife's will, and notice to creditors was published, no further proceedings having been taken. Mr. Deming continued to use the automobile until 1925, when he turned it over to one of his creditors in settlement of an indebtedness of $300.

February 11, 1921, Mr. Deming was appointed guardian of the persons and estates of his three children, Messrs. Cole and Dolby representing him as his counsel. Upon his appointment, Mr. Deming furnished a bond in the sum of $500, with the Fidelity & Deposit Company of Maryland as his surety. Hon. King Dykeman, then a judge of the superior court of King county, now deceased, signed the order appointing Mr. Deming, and also approved the bond. Mr. Deming continued as guardian of his children until February 2, 1931, when he was removed by Hon. Everett Smith, now deceased, who for many years had been judge of the superior court for King county, presiding over the probate department, and acting as juvenile judge.

While acting as guardian, Mr. Deming received something over $58,000, which came to his children from the estates of their maternal grandparents and an uncle, all of whom died residents of the state of New York. He also received $11,712.36 by way of interest and profits on investments of the guardianship funds. Anticipating the receipt of these funds from his children's kinfolk, Mr. Deming was, during the year 1922, appointed ancillary guardian by the court of appropriate jurisdiction in the state of New York. In view of the receipt of this property, an order was entered in the superior court for King county requiring Mr. Deming to file an additional bond in the sum of $5,000, but Before this was filed, it having appeared that a bond in such an amount would be insufficient, another order was entered requiring a bond in the sum of $100,000 and a bond in that amount was furnished by the United States Fidelity & Guaranty Company, which was filed March 18, 1922. May 11, 1922, upon petition of the guardian, the court directed that the $500 bond be canceled, and upon the hearing Before the superior court it was evidently assumed that the $5,000 bond never became effective.

Mr. Deming never filed a formal inventory of his wards' property, but did file several petitions which showed that he had received, belonging to his wards, money in various amounts. March 1, 1922, he filed what he called his first annual report, which was approved May 4th following.

During the early years of the guardianship, Judge Dykeman was presiding over the probate department of the superior court for King county, and March 27, 1924, signed an order reducing the $100,000 bond to $1,000; the order providing that the securities belonging to the guardianship be deposited with the Union National Bank, to be withdrawn only on court order. No new bond was filed, but the surety on the $100,000 bond thereafter charged premiums only on the basis of a bond in the sum of $1,000.

Prior to his wife's death, Mr. Deming had worked as an electrical engineer and as manager of a rubber company. His wife's illness and death and his own illness left him in debt, and he never thereafter, apparently, earned more than a living for himself. The children's money was treated as one estate, their living expenses and Robertson's schooling being paid as deemed necessary. Mr. Deming employed a housekeeper to care for the two younger children and the home, he living with them except when he was absent on business. During the month of July, 1924, Mr. Deming remarried, the marriage being terminated by divorce during the year 1927.

After the resignation of Judge Dykeman as judge of the superior court, Hon. Everett Smith presided over the probate department, and guardianship proceedings were conducted Before him. March 13, 1931, Judge Smith removed Mr. Deming as guardian, and March 17th appointed the Seattle Trust Company in his place, fixing the guardian's bond in the sum of $1,000, which was furnished with the United States Fidelity & Guaranty Company as surety. Mr. Deming filed no account until September 4, 1931, when he signed one prepared by D. M. Lovgren, an accountant. No hearing was had upon this account until the trial, which resulted in the decree now Before us for review. September 18, 1931, Seattle Trust Company filed its guardian's inventory, and February 25, 1932, Judge Smith signed an order requiring Mr. Deming and his surety to pay $1,000, the amount which the court apparently believed represented the amount of the bond upon which Mr. Deming's surety was responsible. The surety promptly paid this $1,000, and an order was entered March 25, 1932, releasing the surety from further liability. Judge Dykeman died September 9, 1931, and Judge Smith died November 20, 1933; Judge Dykeman having ceased to occupy his judicial position several years prior to his death.

Robertson Deming became of age July 15, 1935, and retained counsel, who filed exceptions to the reports of Seattle Trust Company, as guardian, and Mr. Deming was cited into court, both by Robertson and the guardian. Earl G. Rice, Esquire, was appointed guardian ad litem for Pierson and Helen, and a hearing was had in an endeavor to settle the guardianship accounts. In effect, the action was an equitable accounting for the purpose of determining the rights of all parties concerned.

'Proceedings for settlement of a guardian's accounts are special proceedings in the nature of proceedings in rem. They are not actions at law, nor 'suits' in equity, although they are equitable in their nature, and the probate courts generally adopt the equitable forms of procedure, and dispose of the case on equitable principles.' 28 C.J. title, Guardian and Ward, § 372, p. 1213.

In 3 Pomeroy's Equity Jurisprudence (4th Ed.) § 1097, the rule is laid down that equity has a general jurisdiction in guardianship proceedings: '* * * to compel a performance of the trust duties, to relieve against violations of these trust obligations, to direct an accounting and final settlement of the quasitrust, and to grant other special relief made requisite by the circumstances.'

Mr. Deming's accounts were in an extremely unsatisfactory condition. The accountant, Mr. Lovgren, who worked over them, as the trial court said, 'did the best he could to make order out of confusion,' but the guardianship was in such a state, as to many items, that it was impossible to determine just what had happened. It appeared beyond question that Mr. Deming had appropriated considerable amounts of his children's money to his own use, had grossly violated his obligation as their guardian, and had been guilty of many derelictions of duty. Pleadings were regularly made up presenting several issues which will be hereinafter discussed.

The court entered a decree adopting as a correct statement of Mr. Deming's accounts as guardian a report prepared by Mr. Lovgren, assisted by Mr. Rice, the guardian ad litem of the two younger children, charging the guardian with a total amount of cash received in the sum of $71,270.83, of which the three children were owners in equal shares. The court alowed Mr. Deming credits in the total amount of $25,992.61, leaving a 'net judgment liability' against him in the amount of $45,278.22. The decree charged Mr. Deming with 6 per cent. interest in the amount of $30,087.95, and assessed against him damages in the amount of $7,127.08, being 10 per cent. of the entire corpus of the guardianship estate, rendering against Mr. Deming and his surety judgment in the sum of $82,493.25. Of this, Robertson was awarded judgment for the sum of $27,195.07, Pierson for $27,671.58, and Helen for $27,626.60.

By order dated November 23, 1922, the court had allowed the guardian, as...