Court Opinion

ID: 8202229
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:37:34.590567+00
Date Added: 2024-06-11T16:40:58.149890
License: Public Domain

CANE, P.J.
(dissenting) I dissent on the basis that sec. 880.19(4)(e), Stats., is not ambiguous and *140clearly prohibits the guardian from loaning guardianship funds to himself. The language is simple and straightforward. The subsection provides in its entirety:
(c) No guardian shall lend guardianship funds to himself.
The majority’s attempt to justify the guardian’s loan to himself on the theory that we must harmonize this prohibitive statute with sec. 880.21(2), Stats., is unpersuasive. Indeed, the guardian ad litem himself conceded in a letter to the trial court that the loan arrangement "runs contrary to the provisions of section 880.19(4)(c),” and that he had negligently failed to inform the court of the statute.
Nor am I convinced that Hutson v. Jenson, 110 Wis. 26, 85 N.W. 689 (1901), can be construed to allow a guardian to borrow money from the ward when it is used for maintenance and not as an investment. In Hutson, while acting as guardian for her children’s trust account, the mother loaned trust funds to herself and in return issued to each of her wards a promissory note secured by a third mortgage on her property. The supreme court disapproved the transaction, noting that guardians must not confuse their trust capacity and their personal capacity when dealing with trust funds. The court stated that the rule against borrowing guardianship funds was based on sound public policy,
which would exclude all necessity of investigation of either the honesty or the wisdom of such dealings in a dual capacity. Selfish instincts of human kind are so persistent that such dealings are fraught with peril to the fiduciary interests, and safety demands that the rule be absolute.
*141See id. at 40-41, 85 N.W. at 694.
Similarly, to construe sec. 880.19(4)(c) to be anything other than an absolute rule allows potential abuse at the expense of the children’s guardianship funds. As the makers of public policy in this area, the legislature has spoken, and I think wisely. The potential conflict between the guardian’s personal interest and the interests of the children demands that no exceptions be made to this statute. The guardian is bound to protect the interests of the wards, and the funds are entrusted to the guardian’s care solely for the children’s benefit. No exception is allowed pursuant to court order. The courts are not to be involved in approving or determining whether the guardian’s loan to himself is appropriate. The selfish instincts of human nature persist such that the temptation to loan funds to oneself, no matter how righteous the intentions, demands our most anxious care that the wards suffer no undue loss.
Contrary to the majority’s perception, these concerns for the safety of the guardianship funds are not alleviated merely because the loan’s purpose is for maintenance. The present case is illustrative. Here, the guardian petitioned to borrow $24,000 from the guardianship accounts to construct additional living space to better accommodate his own family as well as the two minor children. The guardian issued to the children a promissory note due on each child’s eighteenth birthday, ostensibly secured by a second mortgage subordinate to a first mortgage issued to a commercial lender. Categorizing the loan as maintenance provides no assurance that the security will prove adequate to realize the expectations of the children at a future date.
*142Under the guise of maintenance for the children, the guardian also made arrangements to have the $240 monthly interest on the house attributed to maintenance. This amount is in addition to the $1,280 monthly social security payments he receives for the children, despite the absence of a finding that the social security payments were inadequate for the children’s maintenance. Consequently, the interest on the loan is never paid, nor is the principal due until the children reach age eighteen.
The majority’s opinion establishes precedent for many types of possible malfeasance. One can imagine numerous ways a guardian could loan guardianship funds to himself or herself under the rationale that "it is for the children’s benefit.” In fact, it is alleged in this case that the guardian previously withdrew substantial funds from the guardianship accounts for the purchase of a new station wagon, showing it on the annual account as "trans.” Therefore, I would reverse and remand the matter to the trial court with directions that the loan, interest, and guardian ad litem fees be replaced into the guardianship funds.