No. 12269 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1972 

OTTO CHRISTMAN, 

Plaintiff and Appellant, 

LEONA STROMSTEDT, Formerly 

LEONA CHRISTMAN, 

Defendant and Respondent. 

Appeal from: District Court of the Fourth Judicial District, 

Honorable Jack L. Green, Judge presiding. 

Counsel of Record : 

For Appellant : 

Robert J. Campbell argued, Missoula , Montana. 

For Respondent: 

Mulroney, Delaney and Dalby, Missoula, Montana, 

Dexter L. Delaney argued, Missoula, Montana. 

Submitted: November 30, 1972 

Decided : DN I 7 rgt3 

Filed: Ikh171ylj 
Mr. Chief Justice James T. Harrison delivered the Opinion of 

the Court. 

This is an appeal from a judgment of dismissal entered 

in the district court of Mineral County. Plaintiff brought 

the action to recover property held in joint tenancy with the 

defendant, his former wife, prior to the time he was adjudged 

an incompetent in 1946. The complaint contained two counts 

and the court granted a motion to dismiss the first count and 

no question is raised thereon. This appeal involves only the 

second count of the complaint, the thrust of which is an accusation by the plaintiff that the defendant defrauded him of 

certain real property while acting in the capacity of plaintiff's 

guardian. 

The order of the district court was entered on December 

22, 1971, and dismissed count 2 of the complaint on its merits 

and with prejudice for the reason that the plaintiff failed to 

offer prima facie evidence of liability of the defendant to the 

plaintiff. This appeal followed. 

From the record it appears that on November 4, 1946, plaintiff and defendant were husband and wife and purchased a home 

and 140 acres of land in Mineral County for $2,000. In December 

1946 the plaintiff husband was struck by an intoxicated motorist 

and as a result of that injury he was taken to the Oregon State 

Hospital in January 1947 and declared to be incompetent. His 

incompetency continued until January 1966 when he received his 

Certificate of Competency and was released from the hospital. 

During the period of the plaintiff's incompetency, his 

wife, the present defendant in this suit, was appointed the 

plaintiff's guardian. On March 22, 1954, the defendant petitioned 

the district court in Mineral County for an order to sell the 

plaintiff's half interest in the Mineral County land. The 
guardianship was devoid of funds, and the real property which 

the parties owned jointly was rapidly deteriorating and, therefore, incapable of producing revenue either for taxes, repairs, 

or for putting the land such condition as to allow the 

property to be rented or otherwise reasonably used. The defendant's testimony at the trial was that it was her understanding 

from the plaintiff's physicians that his situation was essentially 

hopeless and that the Ffuardianship would have gone on for years 

and years. 

We quote a portion of that Petition for Order of Sale of 

Real Property which states: 

"That it is necessary and for the advantage, 

benefit and best interests of said estate and 

those interested therein, including the said 

Incompetent, that said real estate and personal 

property be sold for the following reasons: 

"That the cost of maintaininq said property and 

payment of taxes thereon is unjustified, as said 

Incompetent only owns an undivided one-half 

interest therein, and considerable costs of 

repairs and maintenance on the buildinqs upon 

said premises are now necessary to be done, and 

there is no cash or funds belonqing to said 

estate available for said purpose. 

"WHEREFORE, your petitioner prays that an order 

be made and entered by this Court granting him [her] 

license to sell said real estate at either public 

or private sale, as petitioner may deem most 

beneficial for said estate." (Emphasis supplied.) 

On the basis of that statement, the district court on 

March 22, 1954, executed an order to show cause returnable on 

April 19, 1954, some three weeks thereafter. In addition, the 

defendant-guardian was required to publish a copy of the Order 

to Show Cause on Application of Guardian for Order of Sale of 

Real Estate once a week for two successive weeks in the Mineral 

County Independent, a newspaper of general circulation in that 

area. That order to show cause was published on April 8 and 

April 15, 1954. 
Thereafter, the court made an Order of Sale of Real 

Property which was filed on April 19, 1954, and ordered the 

clerk of the district court to post notices in three public 

places in Mineral County giving public notice of the sale of 

plaintiff-incompetent's undivided one-half interest in this 

property. On April 20, 1954, the clerk of the court certified 

that those notices were posted and thereafter defendant-guardian 

caused a notice of sale to be published in the Mineral County 

Independent on April 22 and on April 29, 1954, giving full public 

notice of the fact that plaintiff-incompetent's undivided onehalf interest would be sold on or after May 1, 1954, in the law 

office of Walter T. Murphy in Superior, Montana. 

That sale took place and there was but one bidder, one 

Edwin M. Johnson, who offered to purchase the property for $307.80, 

being 90% of the appraised value of $342. There was no evidence 

that the sale was conducted in any secretive manner, or that 

other bidders were discouraged, or that there were other bidders 

at all. 

Thereafter, a return was filed and a petition for order 

confirming sale of real and personal property was made to the 

district court by the defendant-guardian, a portion of which 

petition, the same being filed May 6, 1954, states: 

"That it is to the best interest of the estate of 

said Incompetent and of all persons interested 

therein, to sell said property for the followinq 

reasons: that there is not money, funds or credit 

in the said estate with which to pay taxes and to 

pay for the cost of maintenance and protection of 

said property; that said land is arid and a dwelling is situated thereon, but that said dwellinq 

is uninhabitable by reason of needed repairs and 

by the further reason that no water is available 

for use at said dwellinq or upon said land without 

construction and maintenance of a pipe line to a 

spring on adjacent Government owned land. That 

said building is deteriorating and requires expense 

for upkeep and care, and unless the same is repaired 

and protected, said property will deteriorate to 

such an extent that it will have no market value. 

That said property is of small vdlue. Tnat said 

property has been appraised at the sum of $342.u0 

wlthin six months prior to the date of such 

sale, and that 90% of said value is the fair 

market value of said property." (Emphasis supplied.) 
On May 17, 1954, the court,having recited the fact 

that lawful notice had been given, confirmed the sale of 

plaintiff-incompetent's interest in said property to Edwin M. 

Johnson for the sum of $307.80. On August 5, 1954, the defendant filed a final account and petition for discharge and was 

discharged from her trust on August 16, 1954. 

Ten days after the approval of the sale, the property was 

transferred again, and the defendant acquired the plaintiff's 

interest in the real property from the purchaser Johnson. The 

transfer from Johnson to the defendant was for the exact amount 

that Johnson paid for the property. 

The issue presented to this Court for review is whether 

or not a guardian of an incompetent, acting as a trustee of his 

estate, can engage in a sale of estate property to a third party 

with the intent to transfer the property to the guardian after 

the sale without violating the fiduciary relationship. 

We do not find any evidence of any intent to defraud the 

plaintiff in the connection with the sale of this property, and 

we find no bad faith was present on the part of the defendant in 

this transaction; on the contrary the evidence is all of good 

faith, full disclosure and court supervision. Plaintiff's position is that a fraud was committed because of the fact that the 

defendant acquired the plaintiff's interest in the real property 

from the purchaser Johnson. There can be no question but what 

transactions involving a guardian's acquisition of a ward's 

property should be carefully scrutinized because of the inherent 

possibilities of violations of fiduciary obligations. The district court, in its order of sale of real property, duly found 

the necessity for the sale of the fractional interest of the ward. 

Thereafter, the sale was conducted in the guardian's attorney's 

office to anyone who would care to make a bid, that is, at a public 
rather than a private sale. It is not surprising that there 

would be no person other than the other joint tenant or someone acting on her behalf who would be interested in purchasing 

the fractional interest. If the sale did not take place in 

that fashion it is difficult to see, in the absence of any other 

bidders, how the sale could have occurred at all. Accordingly, 

the defendant would then have been placed in the position of 

either financing taxes, repairs and other expenditures in connection with maintenance of the property from her own funds or allowing the same ultimately to revert to the county for taxes. Our 

position here is that the action of the guardian in connection 

with the ultimate acquisition of title to the property was, in 

fact, in the nature of a partition of the property, a11 in good 

faith, on the advice of counsel. We hold that the district 

court was justified in dismissing the plaintiff's action on the 

basis that the plaintiff had failed to make any showing of any 

kind of fraudulent motive, intent, or design on the part of the 

defendant. 

While the fiduciary has the positive duty of exercising 

all reasonable diligence in connection with the care and conservation of a beneficiary's estate, we hold that the fiduciary 

does not have the duty of individually contributing from his t!, 

own resources for indefinite periods for the repair, maintenance, 

or upkeep of his ward's estate. If the ward, as in the case 

here, had no funds with which to pay those expenses which were 

necessary in order to keep the property, it should then follow 

that the only other alternative that the guardian had was to 

dispose of the propert of the fiduciary uty existed 

in the conduct of this P 

The judgment is a 
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Mr. Justice Wesley Castles does not participate in this cause, 

deeming himself disqualified.