Court Opinion

ID: 3435536
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:08:09.618437+00
Date Added: 2024-06-11T13:48:18.919252
License: Public Domain

I respectfully dissent.
According to repeated holdings of this court, the burden was on the guardian to account for his stewardship. In re Guardianship of Morris, 228 Iowa 646, 649, 292 N.W. 836; In re Estate of Smith, 223 Iowa 172, 271 N.W. 888; In re Estate of Moe, 213 Iowa 95,100, 237 N.W. 228, 238 N.W. 718; In re Estate of Mowrey,210 Iowa 923, 929, 232 N.W. 82.
It may be conceded that ordinarily where a guardian becomes executor of the estate of a deceased ward and properly takes over the assets formerly held by him as guardian, the guardian's bondsman is not liable for subsequent misappropriations. This general rule of law has no application here because of the lack of diligence and good faith and the fraud practiced by the guardian which produced the loss.
The record shows without dispute that at the time George W. Hird was appointed guardian, and later executor without bond, of this sizable estate, he was a fiduciary of at least three other estates. Not only was he financially irresponsible, but he was then in default to two estates of which he was administrator in the total sum of at least $1,800. Hird frankly admits as a witness that he then knew he was "in a jam." While still acting as guardian and without having attempted any accounting of his stewardship, he accepted his appointment as executor without bond, by concealing from the court his financial irresponsibility, and the defaults which were staring him in the face. He admits as a witness that he knew the court would not have appointed him executor without bond if a fair disclosure of the facts had been made. Then without asking or obtaining authority of court he as guardian, under a bond of $32,000 "conditioned for the faithful discharge of his duties as such guardian according to law", turned over these assets to himself, an admitted embezzler, as executor without any bond. The reason he did not ask for authority of court to make this transfer is obvious and is frankly admitted by Hird's own testimony. As he was fully aware, no court would have approved such an act of bad faith. He well knew the assets would not be safe in his hands as executor.
The fact that the money totaling nearly $9,000 was not actually misappropriated until later is not controlling. The *Page 901 
expected happened within a comparatively short time. At least a contributing cause of the loss of these funds was not merely their actual misappropriation but the fraud of the guardian in placing them in his own hands as executor without bond where their loss was reasonably to be expected. It was the act of the guardian that made the loss of these assets not only possible but probable.
I have no quarrel with the authorities cited in the majority opinion. None of them, nor any authority cited by appellant, upholds such a breach of faith as this record plainly shows. In Taylor v. McArthur, 87 Iowa 155, 158, 54 N.W. 228, 229, the principal case mentioned in the majority opinion, this court says:
"It is undoubtedly true that he should have made a report of his proceedings as special administrator, accounting fully for the property which had come into his hands as administrator; * * * The proper method of doing that was by an official report, duly approved by the court * * *"
However, assuming that no court authorization was necessary, how can we say as a matter of law that this guardian faithfully discharged his duties? This is a question of good faith and due diligence. It is elementary that a guardian is also a trustee. In re Brubaker, 214 Iowa 413, 416, 239 N.W. 536. This court has said in Linsley v. Strang, 149 Iowa 690, 694, 126 N.W. 941, 942,128 N.W. 932, and subsequently repeated several times:
"It is a general principle that a trustee must act with the most scrupulous good faith. The one great duty arising from this fiduciary relation is to act in all matters relating to the trust wholly for the benefit of the beneficiary."
It is also elementary that guardians must exercise at least that degree of care and prudence with regard to the guardianship funds that ordinarily prudent men exercise in their own affairs. In re Estate of Enfield, 217 Iowa 273, and cases cited page 274,251 N.W. 637, 638. It has been said that this standard "is hardly sufficient." 25 Am. Jur. 55, section 83.
The trial court found that the guardian failed to exercise *Page 902 
good faith and due diligence and that loss thereby resulted to the guardianship. This finding has the force and effect of a jury verdict. I think there is sufficient evidence to support it. See In re Trusteeship of Bartholomew, 207 Iowa 109, 222 N.W. 356. The case is not triable de novo here but is reviewable only upon errors of law. In re Estate of Smith, 223 Iowa 172, 175,271 N.W. 888; In re Guardianship of Baldwin, 217 Iowa 279, 251 N.W. 696; In re Estate of Enfield, supra; In re Guardianship of Nolan,216 Iowa 903, 905, 249 N.W. 648; In re Estate of Bourne, 210 Iowa 883,886, 232 N.W. 169.
With regard to the appeal of the objectors and cross-appellants, at least some of the allegations which were stricken were proper. Strict rules of pleading are not applicable in a matter of this kind. In re Estate of Onstot, 224 Iowa 520,522, 277 N.W. 563. However, in view of the outcome of the case, there was no prejudice in this erroneous ruling.
I would affirm.
BLISS and OLIVER, JJ., concur in this dissent.