Van Rees v. Witzenburg , 112 Iowa 30 ( 1900 )

Deemeb, J.

2 The issue tendered by the objections filed to the reports of the guardian is not presented on this appeal, and the case will be considered only in so far as it relates to the equitable issues presented by plaintiff’s pet-ition and the answer thereto. Defendant pleaded a settlement with plaintiff and his assignor, made after the wards arrived at age; that this settlement was made in the presence of plaintiff’s mother and step-father and was fair and equitable. He also pleaded that he invested a small aipount of their funds with the firm of E. R. Cassatt & Co., a reputable and solvent institution; that at the time of the settlement the said firm had become insolvent, and it was agreed between two of the wards and defendant that the firm notes should be taken by plaintiff and his assignor at a large discount, provided they could get the remainder of their funds and obligations against others at once, and that tire guardian should charge nothing beyond what he had already received as compensation for his services. The settlement is attacked by plaintiff for fraud. Borne other issues are presented that need not be noticed.

3 Before going - to the merits, it is well to note some points of practice made by the appellee. The case was tried as in equity, and is before us de novo. Appellee says that. the abstract does not purport to contain all the evidence adduced on the trial, and affirmatively shows that it does not contain all of it. With reference to the first contention, it is expressly held in McGillivray v. Case, 107 Iowa, 17, that printed abstracts will be presumed to contain the record, unless denied or corrected by a subsequent abstract. Appellee has filed an amended abstract containing some denials that are not as specific as our rules require, and these denials will be disregarded, under the rule announced in the McGillivray Case, supra. Moreover, appellant has filed an amended abstract in which he states that the original contains all the evidence offered and introduced upon the trial between plaintiff and defendant. He admits that the evidence adduced in support of the objections filed by Lena Van Rees is not included, but, as these objections tendered an issue in no manner related to- the issue involved in the equitable suit, there was no- necessity for including that evidence for the purpose of a trial da novo.

4 Defendant moved to transfer the cause to the probate docket trial. His motion was overruled, and of this complaint is made. The action is in equity, to set aside the alleged settlement, and for an accounting by the 'guardian, and was properly brought in equity. The motion was properly overruled. Thereafter, on its own motion, the court ordered the case consolidated with the objections filed in probate. To that order defendant excepted, but afterwards agreed that the two matters might be tried together. In view of this agreement, there was no error in ordering the consolidation.

5 The settlement made out of court between defendant and his wards was, as we have seen, attacked by the plaintiff, who claimed that it-was obtained through fraud and misrepresentation. The fraud alleged is that defendant, with knowledge of the worthless character of the Cassatt notes, represented that they belonged to plaintiff and his assignor, and all they could get, and insisted that they should take them in settlement of the balance due, and that he was not liable for the money represented thereby; that defendant is a relative of plaintiff, and that plaintiff and his assignor relied upon him for business counsel and advice, and were induced by his representations to accept the notes in part payment of the amount due them. As defendant had no authority from the probate court to invest the money of his wards in notes or securities of any kind, he was responsible to his wards for any loss that occurred by reason of such investments. At common law he might have been protected had he exorcised reasonable care and judgment in the investment of funds belonging' to his wrards, but under our statute he is not, unless he acts under the direction of the court. Easton v. Somerville, 111 Iowa, 164. When defendant made his settlement out of court, he knew that he was liable for the amount of the' Cassatt notes-; but he refused to settle unless plaintiff and his assignor would accept the notes as part payment of the amount due, and informed Ms wards, they being ignorant of the fact that they were entitled to the full amount, that unless they accepted they would have to resort to legal proceed • ings. Settlements by a guardian with his ward out of court are not favored, and one who relies on such a settlement must clearly show that he made full disclosure of everything, and that the ward knew and understood that he was making a full and final settlement. Settlements between guardian and ward may be impeached for fraud or mistake, like any other settlements, but, as -the guardian occupies a fiduciary relation to his ward, he must show that it was full and fair and in good faith. Every reasonable intendment is to be made in favor of the ward. Richardson v. Linney, 7 B. Mon. 571; Stark v. Gamble, 43 N. H. 465; Voltz v. Voltz, 75 Ala. 555 ; Spalding v. Brent, 3 Md. Ch. 411; Tucke v. Buchholz, 43 Iowa, 415. Tested by these cases, we think the settlement made by defendant with his wards should be set aside. With this out of the way, the correctness of the finding of the trial court as to the amount due the plaintiff is conceded. •

IT. The objections filed by Lena Van Rees were to various items found in defendants reports relating to the renting of the real estate. The issue raised by them was entirely different from the issue tendered by the petition in equity. . Just what was done with these objections does not appear from the record before us, although some of the motions' filed seem to indicate that the objections were overruled.

6 All the costs of the proceedings, including those mado on the hearing of the objections, were taxed to defendant. Thereafter defendant filed- a motion to rctax all costs, made on the hearing of the objections to his reports, to plaintiff. This motion was overruled, the court using the following language: “This matter now comes on for' further hearing, on the defendant’s motion to retax certain costs herein, and the court, being advised, overrules said motion and refuses to rctax the same, for the reason that the matter of costs was taken fully into account and consideration in determining the liability of the defendant for the rent of land in his final settlement with his wards, and concluding that, upon payment of the costs by the defendant, it would about offset the matter of rent, the defendant thereby not being charged with any rent; to all of which the defendant excepts.” "While the reason given by the court for denying the -motion may not have been good, yet if there is any good basis on which the ruling may stand, it will not he'disturbed. Plaintiff was in no manner interested in the objections filed by Lena Van Pees. He did not join therein,..and was not a party thereto-, save as the consolidation order made him a party, and there is no- reason for taxing the cost's made on these objections to him. The items referred to in the motion he was in no manner responsible for, and he should not be ordered to pay the same. The orders and judgment of the district court are correct, and they are affirmed.

Granger, O. I.., not sitting.