220 Wis. 45 | Wis. | 1936
The ultimate question on this appeal is whether Walter M. Gaudynski, in settling his account as guardian for
Sec. 231.32, Stats., which relates to the investment of trust funds in certain kinds of bonds and securities, provides (so far as here material) :
“(1)' (a) Every executor, guardian, or trustee, except where it is otherwise expressly directed by the will or instrument of trust, if any, may invest trust funds in bonds or . . .
“(g) In obligations secured, whether alone, or in combination with other obligations on a parity therewith, by first real-estate mortgages, or trust deeds, on improved farm property or improved urban property (other than public utility or street railway property except as herein provided) in this state and adjoining states, the amount of which mortgages, or trust deeds, does not exceed one half of the actual value of the property covered thereby. . . .”
The provision in that statute;, that a fiduciary, except where otherwise expressly directed by the will or instrument of trust, “may invest” trust funds in -any of the classes of bondsbor-securities (described in-pars, (a) to (i) thereof, may be permissive, in so far as it leaves it optional with him to- determine in which of those classes he will invest. However, if he concludes to invest in obligations secured by first real-estate mortgage, then no choice or discretion is left to him as to the extent to which the actual value of the property covered by the mortgage must exceed- the value of the obli
“Trustees receiving money to invest should be required on final accounting to turn over to the beneficiary the amount of the money received, with its increment, unless they have either secured authority from the court to make a specific investment before making it, or invested the cash in securities such as sec. 231.32, Stats., designates. . 4 . But to invest in securities other than those prescribed by the statute, at least in absence of express authority from the court administering the trust, is in itself a want of due care as matter of law, and a trustee so careless must respond by turning over to the beneficiary the money he carelessly invested.”
See also Estate of Dreier, 204 Wis. 221, 235 N. W. 439; Estate of Allen, 218 Wis. 349, 259 N. W. 848; Will of Leonard, 202 Wis. 117, 230 N. W. 715; Estate of Allis, 191 Wis. 23, 209 N. W. 945, 210 N. W. 418. Consequently, the court’s findings in respect to good faith and the exercise of sound discretion on the part of Gaudynski afford no ba'sis for the conclusion that the challenged investment compliéd with the requirements of sec. 231.32 (1) (g), Stats.
There is nothing in sec. 231.32 (1) (g), Stats., because of which the word “actual,” as used therein in defining the word “value,” should not be “construed and understood according to the common and approved usage of the language” (sec. 370.01 (1), Stats.), and, therefore, held to mean “real, genuine, positive, certain” as opposed to “speculative, potential, possible, virtual, or theoretical.” Webster’s International Dictionary; Bouvier’s Law Dictionary, Rawle’s Third Rev. In Lynch v. Union Trust Co. 90 C. C. A. 147, 164 Fed. 161, 167, the court, in considering the terms “actual value” and “clear value” in a tax statute, said:
“In using those terms congress must be deemed to have meant something more definite and certain than would be attached to the bald term ‘value,’ without qualifying adjectives. . . . So that, when congress employed the expressions ‘actual value’ and ‘clear value,’ it very evidently intended to convey the idea of definite or certain value — something in no sense speculative.”
See also City of Los Angeles v. Pomeroy, 124 Cal. 597, 57 Pac. 585, 602; Tyson Creek R. Co. v. Empire Mill Co. 31 Idaho, 580, 174 Pac. 1004, 1006; Maxon v. Gates, 136 Wis. 270, 289, 290, 116 N. W. 758. With that meaning of the term “actual value” in .mind, we find, upon reviewing the record, that the court’s finding that the actual value of the mortgaged property was at least $12,000 on January 30, 1930, is clearly contrary to the great weight and clear preponderance of the credible evidence. No useful purpose will be served by a detailed discussion thereof. It suffices to note the following: It was established without dispute that the property consists of a one and a half story house and a garage on a lot which is 30x120 feet, and is located in a
Anthony B. Bonin, who had succeeded Gaudynski as guardian' and was called as his witness, had been engaged in the real-éstate business in that locality since 1922. He testified that the actual value in January, 1930, was $3,000 for the lot, $6,000 for the house, and $1,500 for the garage, making the total $10,500.
On the other hand, Gaudynski, who testified that he had been in the real-estate business for fifteen years and known values in that locality for thirty years, said that the actual
Two additional witnesses were called on Gaudynski’s behalf. They had been engaged in the real-estate business but not in that particular locality. One of them placed the value of the lot at $2,500 and the garage at $2,000. Those amounts were, respectively, $500 and $1,000 lower than Gaudynski’s valuation for those items. But that witness valued the house at $7,500, which exceeded by $1,500 even Gaudynski’s valuation thereof, and thus made that witness’ total valuation also $12,000. - The second of those witnesses valued the garage at $1,850. That was $1,150 less than Gaudynski’s valuation of $3,000, but that witness, by valuing the house at $7,200 (which was $1,200 in excess of even Gaudynski’s valuation), and by likewise valuing the lot at $3,000, brought up his total valuation to $12,500, which was even $50 in excess of Gaudynski’s total.
In as much as the actual cost to Stepke for constructing the garage in 1922 was $1,580, and up to January, 1930, there had been the usual depreciation due to seven or eight
By the Court. — Order reversed, and cause remanded with directions to enter an order in accordance with this opinion.