Court Opinion

ID: 9700848
Source: CourtListenerOpinion
Date Created: 2023-08-25 21:51:08.437554+00
Date Added: 2024-06-11T18:21:15.188412
License: Public Domain

*184Frost, J.,
dissenting.
After a consideration of the evidence in this case I am unable to agree with the majority-opinion.
On the death of her husband, who died intestate, the respondent found herself in a critical position. His personal property appears to have been insignificant in amount. At the time of his death he owned in fee simple four parcels of real estate in the city of Newport, title to which had been taken solely in his name.
The chairman of the board of tax assessors of the city testified that in his opinion the market value of the four parcels was $74,500. There were, however, mortgages and unpaid taxes. This real estate descended to the four children, subject to the widow’s right of dower. The respondent was appointed administratrix of her husband’s estate and also guardian of her two minor children, Peter, complainant herein, and Paul. The complainant will hereinafter be referred to as Peter. As guardian she at once sought permission from the probate court to sell Peter’s interest in the real estate for not less than $5,000. The reason given was for change of investment. She sold his interest for an alleged $5,000 to her children John and Frances, each of whom was of age. Three months later John and Frances conveyed to' their mother for an alleged $5,000 the interest just conveyed to' them and also their own interests. There was no change of investment but there was a change of title. Thereafter the interest which had descended to' Peter was in his mother in her individual capacity.
In 25 Am. Jur., Guardian And Ward, §210, p. 131, it is stated, “It is a rule of universal recognition that a guardian, in purchasing or otherwise acquiring the property of his ward, violates the duty imposed by the fiduciary character of his position. Such a transaction, whether made directly by the guardian or through another, is voidable at the suit of any proper party in interest.”
*185In 39 C.J.S. Guardian And Ward §93, p. 164, it is stated, “Since the guardian cannot purchase his ward’s property for his own benefit or profit, if he purchases the property of his ward directly or indirectly, the ward may have the sale set aside without a showing of actual fraud or injury.” See also United States v. Dunn, 268 U. S. 121; Hearn v. Hearn, 24 R. I. 328; Pelletier v. Phoenix Mutual Life Ins. Co., 49 R. I. 135.
Peter entered the air service while a minor. He became twenty-one years of age on July 16, 1942, at which time he was in Florida. Nineteen days after attaining his majority he received by mail a communication which he was asked to sign and return. This was a release of all claims which he might have against his mother as guardian. She never filed an account in the probate court as guardian of Peter, but instead obtained a release from her ward, a method allowed by G. L. 1956, §33-17-1. Notwithstanding that Peter had received neither real estate nor money, nor any part of his inheritance, he signed and returned the release. His signature was witnessed by a commissioned officer. The release recited that he had adjusted and settled with the guardian her accounts of said guardianship and had received from her all the balance of his estate in her hands. Testifying at the hearing Peter stated that he received no money from his mother prior to signing the discharge or release; that from his father’s death to August 1949, when the present bill was filed, he received no money whatever from his share in his father’s estate; and that his mother never told him the value of his share. There was testimony that Peter trusted his mother implicitly.
After the instant bill was filed, respondent filed an answer through her counsel wherein she incorporated two defenses, namely, a release and laches. The release upon its face is a perfect defense. The complainant is not free from criticism for signing a paper of the import of a release without any consideration of it simply upon request of his *186mother. Peter trusted his mother and he also testified at the hearing that he was under the impression that all of the real estate left by his father belonged to her. However, the fact that the son is not free from criticism does not absolve respondent from her responsibility in seeking a release knowing, as I believe the evidence shows, that her ward was ignorant of his rights in the matter of the real estate. Peter testified that his mother never informed him that he was entitled to a one-quarter undivided interest in his father’s estate.
Peter’s sister testified that on more than one occasion her mother asserted that upon the father’s death all of the real estate became hers (respondent’s) and that the children had nothing.
In my judgment the respondent’s conduct as guardian of Peter, and particularly her action in obtaining the release from him with full knowledge of her son’s ignorance of his rights in the real estate, was so fraudulent as to vitiate the release. Hearn v. Hearn, supra; Pelletier v. Phoenix Mutual Life Ins. Co., supra.
In 2 Scott, Trusts (2d ed.), §216, p. 1588, the author states, “* * * where the trustee purchases for himself trust property * * * the transaction will be set aside not only if the trustee fails to disclose all relevant facts but also where the transaction is not in all respects fair to the beneficiary.” And at 2 id. §217, p. 1601, it is stated, “If the trustee commits a breach of trust without the consent of the beneficiary previously given, he may nevertheless be relieved of liability if the beneficiary subsequently discharges him * * * by a release. * * * The discharge is effective only if the beneficiary had knowledge of all relevant facts that the trustee knew or should have known and of his legal rights and the discharge was not induced by improper conduct on the part of the trustee.”
In my judgment the complainant was not guilty of laches since the instant suit was filed less than four years after *187he was discharged from service on October 31, 1945.
Maurice L. Dannin, Gabriel D. Russo, James S. O’Brien, William C. Waring, Jr., for complainant.
Paul F. Murray, for respondent.
I would sustain the appeal and remand the cause to the superior court for an accounting either by the court or by a master in chancery as may be determined.