Shipman v. Shipman
| Decision Date | 06 December 1934 |
| Docket Number | No. 14679.,14679. |
| Citation | 192 N.E. 849,99 Ind.App. 445 |
| Parties | SHIPMAN v. SHIPMAN. |
| Court | Indiana Appellate Court |
OPINION TEXT STARTS HERE
Appeal from Benton Circuit Court; Chas. M. Snyder, Judge.
Suit by Lemuel Shipman, executor of Andrew Gick, deceased, against Lemuel Shipman, guardian of Andrew Gick. From a judgment for defendant, plaintiff appeals.
Affirmed.
Robinson, Symmes & Melson, of Indianapolis, Kelly & Ryan, of Valparaiso, and Oliver M. Loomis, of South Bend, for appellant.
Stuart & Stuart, of Lafayette, and Fraser & Isham, of Fowler, for appellee.
Lemuel Shipman was appointed guardian of one Andrew Gick of Benton county, Ind., November 8, 1915. On October 23, 1919, he as such guardian, upon presenting his proper verified petition to the Benton circuit court, was authorized to and did sell real estate belonging to his ward, for the sum of $68,000. On April 19, 1922, he filed his first current report as such guardian with the court. In that report he set out the fact that he had, without first obtaining an order of court authorizing him to do so, loaned the sum of $15,600 of his ward's funds to one John Bower. This report was approved by the court. The court at the same time entered an order authorizing the guardian to reinvest the funds of his ward with good freehold makers or sureties at current rates of interest, and “keep the funds of said trust revolving and invested in good notes of farmers, in good standing and repute financially.” On July 3, 1924, Shipman filed his second current report as guardian with the court, in which report he set out the fact that he had loaned $36,000 of his ward's funds to John Bower, which loan was evidenced by two promissory notes, secured by a second mortgage upon certain real estate. This report was approved by the court.
On July 1, 1926, Shipman filed his third current report as guardian with the court. May 4, 1927, Andrew Gick died testate. In his will he appointed Lemuel Shipman as executor thereof. July 1, 1927, Shipman filed his final report as guardian with the court. In this report he set out the fact that he had loaned the sum of $42,000 of his ward's funds to John Bower, taking his note therefor, which was secured by a second mortgage on 1,040 acres of land in Benton county. This final report was approved, and he was discharged as guardian upon surrendering to himself as executor of the last will and testament of Andrew Gick all the funds and assets of said trust held by him as guardian.
On February 25, 1931, at the instance of the heirs of Andrew Gick, the appellant, Lemuel Shipman, executor of the estate of Andrew Gick, deceased, filed his complaint against Lemuel Shipman, guardian of Andrew Gick, to set aside all the current reports, and the final report filed by Shipman as guardian, and the approval thereof by the court. September 19, 1931, an amended complaint was filed. In addition to the facts above set out, the complaint alleged in substance that, when said Shipman as guardian presented his current and final reports to the court for approval, he acted in a fraudulent manner and in bad faith, in that he did not make a full, complete, and honest disclosure to the court of all the facts pertaining to his administration of said guardianship; that, at the time of making the loans to John Bower, he (Shipman) knew that Bower was insolvent and unable to repay said loans, when and as they became due and payable, which facts he fraudulently and dishonestly withheld from the court for the purpose of misleading and deceiving it; that all of said guardian reports were made to and approved by the court, in the absence and without the knowledge of any of the heirs of Andrew Gick; that said guardian had at all times purposely concealed and withheld from them all notice and knowledge that he had made the ill-advised, unlawful, and improper investment of the funds of his ward while acting as guardian, and that they had no notice thereof; that on September 29, 1928, said heirs made inquiry of said Shipman regarding the status of said estate when he again purposely and deliberately concealed from them the true condition thereof; that in the month of July, 1929, they first learned that said guardian had fraudulently, wrongfully, and illegally made the loans to Bower; that, because of the conduct of said guardian, these heirs had a right of action upon his bond as such guardian; and that his current reports and final report and the approval thereof should be vacated and set aside by the court and held for naught.
To this complaint the appellee filed a demurrer for insufficiency of facts, alleging in support thereof: (1) That proceedings to set aside the current reports and final report of a guardian are governed by section 3257, Burns' Ann. St. 1926 (Burns' Ann. St. 1933, § 6-1424), which statute provides the exclusive remedy for setting aside guardian's final reports, and the statute requires such a proceeding to be commenced within three years from the date of such settlement; that the facts alleged in the complaint disclosed that the action was not commenced within three years from the date of final settlement. (2) The final settlement of a guardianship is res judicata, except in so far as it may be set aside under section 3257, Burns' Ann. St. 1926 (Burns' Ann. St. 1933, § 6-1424), for illegality, fraud, or mistake, but allegations of such facts are not sufficient where it appears upon the face of the petition that the action was not brought within three years from the date of final settlement. (3) A guardian's final settlement is conclusive and not subject to direct attack as is attempted in the instant case after the expiration of the three years. (4) Allegations of concealment from the court and the Gick heirs did not affect or extend the three-year limitation, since this is a special statutory proceeding containing its own periodof limitation, and the provisions of the general statute of limitations respecting concealment do not apply to or effect section 3257, Burns' Ann. St. 1926 (Burns' Ann. St. 1933, § 6-1424).
The court sustained appellee's demurrer to the amended complaint. Appellant refused to plead further. Judgment was accordingly entered that he take nothing by his complaint and against him for costs. He appeals, assigning as error for reversal the sustaining of appellee's demurrer to his amended complaint.
It is apparent from the record that the appellant is the nominal and not the real party in interest in the complaint filed in this cause; that the real parties in interest are the children or heirs of Andrew Gick, now deceased. From the allegations contained in the complaint and the various statements made by counsel for both appellant and appellee, in their several briefs, and in oral argument, it is clear that this is a statutory proceeding to set aside the final report of Lemuel Shipman as guardian of Andrew Gick, predicated upon the rights conferred by section 6-1424, Burns' Ann. St. 1933, - Baldwin's Ind. St. 1934, which reads as follows:
It follows therefore that, in determining the sufficiency of the complaint to state a cause of action, we must be guided by former decisions of our Supreme and this court in the interpretation and application of the above section of the statute; in other words, has the appellant alleged such facts as entitle him to relief under said statute?
[1] Both parties agree that the appellant was the proper party plaintiff to maintain the action.
In the case of Briscoe v. Johnson (1881) 73 Ind. 573, in announcing the purpose, effect, and application of the above section of our statute, which was enacted in its present form by the special session of the Legislature of 1881, Acts 1881, c. 45, § 177, p. 423, our Supreme Court said:
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