Lindsay v. Gibson

1981 OK 102, 635 P.2d 331, 1981 Okla. LEXIS 271

• Court: Supreme Court of Oklahoma
• Decided: July 28, 1981
• Docket: 52893
• Status: Published

Opinions

DOOLIN, Justice:

We deal with questions of conservator-ship under 58 O.S.1971 §§ 890.1-890.11 (the Act).

E. Dalrymple, being seized of interests in real property and subsequent to the issuance of letters of conservatorship over his affairs, conveyed his interest in the real property to his conservator and other siblings. The conservator and his sisters brought suit to quiet title to the real premises concerned against the executor of his estate and his sole and only heir at law, devisee and legatee Joyce Dalrymple Gibson. At the trial the district court quieted title in the conservator and sisters.

May the ward, conservatee (E. Dalrym-ple), make a gift conveyance (deed) to his conservator and others of property constituting a portion of the res?

We answer in the negative.

We have no hesitation in holding that the conservator occupies a fiduciary or confidential relationship with reference to his ward’s property. The relationship¹ exists under common law and by virtue of statutory enactments. We have held a fiduciary relationship has broad meaning and is subject to broad interpretation.² We have likewise stated confidential and fiduciary relationships are synonymous.³ Such a relationship is based upon confidence and trust and exists when one acts in the management and investment of property not his own, for the use and benefit of another.⁴

The confidence alluded to by this Court has been described as a peculiar one when in Wells v. Shriver, 197 P. 460, 484, 81 Okl. 108 (1921) we approved 2 Bouvier’s Law Dictionary’s definition, page 1217:

“What constitutes a fiduciary relation is often a subject of controversy. It has been held to apply to all persons who occupy a position of peculiar confidence towards others, such as a trustee, executor or administrator, director of a corporation or society. (Citations omitted). (Emphasis supplied).

Our research has produced as a part of the syllabus of this Court in Daniel v. Tolon, 157 P. 756, 53 Okl. 666, 4 A.L.R. 704 (1916), the following:

“GUARDIAN AND WARD — Dealings Between — Presumption of Fraud — Proof to Overcome.... Any conveyance, purchase, sale, contract and especially, gift, by which the guardian derives a benefit at the expense of the ... ward . . . while the influence lasts,5 is presumed to be invalid and voidable. The burden rests heavily upon the guardian to prove all the circumstances of knowledge, free consent, good faith, absence of influence, which alone can overcome the presumption.” (Emphasis supplied).

We are asked to uphold the trial court when it found that the Act allowed a gift to a conservator but not a contract to conservator or other third party.⁶ We feel disinclined to hold that the failure of the Legislature to prohibit a gift has the effect of approving a gift to the conservatee when the Act specifically prohibits his contract, 58 O.S.1971 § 890.10. Such syllogistic reasoning we will not follow.

The Act specifically provides at § 890.5:

“Powers and duties — Jurisdiction of court: A conservator shall have the same powers and duties except as to the custody of the person as a guardian of a mentally ill or incompetent person ; and all laws relative to the jurisdiction of the county court over the estate of a person under guardianship as a mentally ill or incompetent person, including the investment, management, sale or mortgage of his property and the payment of his debts, shall be applicable to the estate of a person under conservatorship.” (Emphasis supplied).

At least one state has stated its conserva-torship statutes constitute among other things an alternative to guardianship proceedings and a means of avoiding “the stigma of the label of incompetency.”⁷ Adopting the reasoning of the conservator would overlook and hold meaningless the specific provisions of this Act, more particularly §§ 890.2, 890.4, 890.5 and 890.10.⁸

REVERSED WITH DIRECTIONS TO QUIET TITLE IN THE DECEDENT’S ESTATE.

BARNES, V. C. J., and WILLIAMS, HODGES, HARGRAVE and OPALA, JJ., concur. LAVENDER and SIMMS, JJ., dissent.

1 . A fiduciary is defined among other definitions, in Black’s Law Dictionary, 5th Edition, page 563, as:

“A person or institution who manages money or property for another and who must exercise a standard of care in such management activity imposed by law or contract; e. g. executor of estate; receiver in bankruptcy; trustee.” (Emphasis supplied).

2 . Reeves v. Crum, 225 P. 177, 97 Okl. 293 (1924). See also Ewing v. Ewing, 126 P. 811, 33 Okl. 414 (1912).

3 . Fipps v. Stidham, 50 P.2d 680, 174 Okl. 473 (1935).

4 . 58 O.S.1971 § 890.4. Management of estate —Bond.

“Every conservator appointed as provided in the preceding sections shall have the care, custody and management of the estate of his ward until he is legally discharged; and he must give bond to the State of Oklahoma, in like manner and with like conditions as provided for guardians of minors, omitting the conditions relative to the care, custody, and education of .the ward.” (Emphasis supplied).

5 .We are not unmindful of a slightly different fact situation in Daniel v. Tolon, supra, wherein the deed was given subsequent (one week) to the termination of the guardian-ward relationship. We interpret the case as holding any such transaction during the wardship, to be absolutely void, but only voidable after the wardship. “(Courts of equity) will not permit transactions between guardians and wards to stand, even when they have occurred after the minority has ceased and the relationship become thereby actually ended, if the intermediate period be short, unless the circumstances demonstrate, in the highest sense of the term, the fullest deliberation on the part of the ward, and the most abundant good faith (uberimma fides) on the part of the guardian.” Daniel v. Tolon, supra, 157 P. at 759.

6 . We find no authority in our Guardianship (58 O.S.1971, § 761 et seq.) or Conservatorship (58 O.S.1971 § 890.1 et seq.) statutes for permitting the guardian or conservator to benefit personally from transactions involving his ward’s property. “A guardian will not be permitted to profit directly or indirectly from the sale of his ward’s estate. And a sale conducted in which the guardian has a direct or indirect interest antagonistic in effect of the interest of his ward is conducive to fraud, against the interest of the ward and public policy, and should never be completed when the facts are discovered.”— Chrisman v. Parks, 139 Okl. 152, 281 P. 559 (1929). Although there is authority to allow the guardian to sell the ward’s property (58 O.S.1971 §§ 831, 890.10), we find no provision approving outright gifts.

7 . Board of Regents of State University of Wisconsin v. Davis, 553 P.2d 1047, 1050, 120 Cal.Rptr. 407, 14 Cal.3d 33 (Cal.1975); Place v. Trent, 103 Cal.Rptr. 841, 845, 27 Cal.App.3rd 526, 532 (1972).

8 .In Place v. Trent, supra, 103 Cal.Rptr. at page 844, the Court reasoned the effect of allowing a gift conveyance by the conservatee would render meaningless other sections of the California Code, exactly as we do today. We are not unmindful of the later action by the Supreme Court of California in the Board of Regents case, supra, when it disapproved of the California Court of Appeals prohibition of all contracts by a conservatee. That Supreme Court pointed out that the California conservatorship statutes dictated another result. We believe the Supreme Court of California would have reached the result we do, and as did the Court of Appeals, were the Code provisions of California the same as in Oklahoma.