105 Neb. 787 | Neb. | 1921
This is a suit for an accounting brought against Michael Danaher, guardian of the estate of Bernard Seward and Leo 0. Seward, minors, by their father, Richard Seward, and his niece, Kittie F. Noonan. The amount for which judgment was asked aggregates about $3,600. Removal
Immediately after the guardian had filed his inventory showing that he had $6,311.96 of his wárds’ funds in his hands, he filed in the county court a written application to be empowered to invest as. much thereof as was not required for the minors’ support. Upon this application, on January 28, 1910, the court made an order, reciting that the guardian was present in court personally and by his attorney, Arthur J. Evans, and authorizing the guardian to loan $2,000 of the funds to his brother, James Danaher, and $4,000 thereof to the guardian himself. This the guardian did, taking personal notes therefor. There after, during the 10 years, he annually reloaned the funds to his brothers and to himself, taking notes therefor, always at 5 per cent, interest.
The guardian and his brothers each owned a Butler county farm worth $200 an acre and were financially responsible. All loans were repMd with interest. Richard Seward, father of these minors, was himself under guardianship from 1912 to the time of the trial. On January 28, 1911, the guardian filed with the county judge an application to be authorized to loan $4,000 to John Danaher and $2,000 to Michael Danaher, each at 5 per cent, interest, and on February 8, 1911, the court made an order authorizing these loans on the terms stated. On February 6,1912, the guardian filed his annual report. On February 28, 1913, the guardian filed application to loan $3,486.65 to James Danaher and the remainder to himself, all at 5 per cent., interest, and the court authorized the loans upon the terms named and directed the guardian to take the personal notes of the borrowers therefor. Verified annual reports were filed by the guardian of all his acts, and setting forth to whom the several loans were made
“Section 27, ch. 34, Comp. St. 1907 (Rev.. St. 1913, sec. 1654) requires a guardian to apply to and receive from the county court an order authorizing him to loan the funds of his ward. If he loans his ward’s funds without such authority, and a loss ensues, he is liable therefor. * * * The approval by the county court, without notice to those interested, of the usual annual reports of a guardian, wherein he reports loans of his ward’s funds without an order of the court, is not equivalent to an order of the court authorizing the guardian to. make such loans.” In the body of the opinion in that case this court said: “Reference to the section of the statute above quoted will disclose that it was the intention of the legislature that there should be a hearing before the court and notice given to those interested, that an investigation as to the desirability of the proposed loans should be had before the court, that evidence might be taken upon this question of those qualified to give an opinion, and that the court, after hearing the evidence, should render a judicial act in directing or refusing the order to make the loans.”
But, though these ex parte orders of the county court do not change the extent of the guardian’s liability in this case, the filing of his applications therefor and his comprehensive annual reports show at least his good faith in the premises. He testified that he acted under the
Passing, for the xnoment, the obvious and vital fact that this defendant was not a banker, but was a farmer without facilities for ascertaining the dexxxand for or safety of such loans, we address ourselves to a consideration of the measure of a guardian’s dxxty in obtaining a rate of interest upon his ward’s fxxnds. For what rate of interest xxiust the guardian account? Is it the highest rate of interest obtainable by lenders of xnoxxey having complete facilities and large experiexxce in the making of safe loaxxs, or is it such a reasonable rate as a person of ordixxary intelligence axxd vocation could secure, with reasoxxable diligence and with scrupulous fidelity to his trust? The general rule is laid down in 39 Cyc. 425, thus: “The first general rule coverixxg the accountability of a trustee is that he shall not make a profit for himself out of the trust estate; and this rule subjects him to an account for all the interest which he actually makes and receives, but ordinarily he should not be charged with more than he actually receives, or in the proper exercise of his duties should have received.”
Section 1651, Rev. St. 1913, is as follows:
*793 “Every guardian shall manage the estate of his ward frugally and without waste, and apply the income and profit thereof, as far as may he necessary, for the comfortable and suitable maintenance and support of the ward and his family, if there be any, and if such income and profits shall be insufficient for that purpose, the guardian may sell the real estate, upon obtaining a license therefor, as provided by law, and shall apply the proceeds of such sale, as far as may be necessary, for the maintenance and support of the ward and his family, if there be any.”
Tested by either the general rule or the statutory rule above set out, is the guardian chargeable with the 2 per cent, interest above what he actually received? The evidence is that, during the period involved herein, the usual or “going rate” of interest on first mortgage loans was 5 per cent, per annum, and upon “personal unsecured loans” was 7 per cent, at the banks. But the guardian did not have either the facilities or information of a banker or other money lender, and the statute does not require that he have. If he had secured the assistance of some one having the special skill and facilities of those engaged in that. business, he probably would have had to pay enough for the service to reduce the net amount below what he himself actually received. One illustration of the cost of this service is the difference between the rate of interest paid on time deposits at a bank, which at this time was 4 per cent., and the rate of interest at which the bank loans the same money. This would probably amount to 3 per cent, at the then lending rate of 7 per cent., and could not be less than 2 per cent, as, under our statute, 5 per cent, is the maximum rate that banks are allowed to pay on time deposits. In either case, the defendant would not have realized more than 5 per cent. Nor do the loans he made fairly come within the designation of “personal unsecured loans.” The Danaher boys were sufficiently well to do so that loans to them were as safe as if they had been secured by first mortgage on real estate. Then, too, in order to realize 7
We now consider the guardian’s claim for a credit of $315 for money paid to his sister, Agnes Donohoe, on •January 11, 1916, for the support of these minors from April 1, 1914, to January 1, 1916, a period of 21 months. These children were in the custody of Agnes Donohoe from
Objection is made to the guardian’s payment of $240 to Daniel Danaher for board and care and clothing of one of these minors from November 7, 1907, to February 15, 1909, a period of about 15 months. The grounds of the objection are that this indebtedness was incurred before defendant’s appointment as guardian, and that there was an understanding that no charge would be made. But there is no evidence that Daniel Danaher himself ever represented that he would make no charge, even if that were decisive of the justness of the claim. And we perceive no reason why the date of the guardian’s appointment affects the validity of the claim. It is the income from the' ward’s estate which the statute directs shall be devoted to his support, and no distinction is made as to whether the claim for that support is incurred before or after the appointment of a guardian. The objection to this claim is untenable. The objection to the small items aggregating $8.33 is likewise without merit.
In our opinion, the judgment of the district court approving the accounting made in the county court of Butler county and dismissing the wards’ complaint and finding in favor of the defendant should be affirmed, and we so recommend.
Per Curiam. For the reasons stated in the foregoing opinion, the judgment of the district court is affirmed, and this opinion is adopted by and made the opinion of the court.
Affirmed.