                                No. 12269

         IN THE SUPREME COURT OF THE STATE OF MONTANA

                                      1972



OTTO CHRISTMAN,

                        P l a i n t i f f and A p p e l l a n t ,



LEONA STROMSTEDT, Formerly
LEONA CHRISTMAN,

                       Defendant and Respondent.



Appeal from:    D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t ,
                Honorable Jack L. Green, Judge p r e s i d i n g .

Counsel o f Record :

    For Appellant :

           Robert J. Campbell argued, Missoula , Montana.

    For Respondent:

           Mulroney, Delaney and Dalby, Missoula, Montana,
           Dexter L. Delaney argued, Missoula, Montana.



                                              Submitted:            November 30, 1972

                                                 Decided :
                                                                D I 7 rgt3
                                                                N
Filed:      Ikh171ylj
Mr. Chief Justice James T. Harrison delivered the Opinion of
the Court.
       This is an appeal from a judgment of dismissal entered
in the district court of Mineral County.   Plaintiff brought
the action to recover property held in joint tenancy with the
defendant, his former wife, prior to the time he was adjudged
an incompetent in 1946.   The complaint contained two counts
and the court granted a motion to dismiss the first count and
no question is raised thereon.   This appeal involves only the
second count of the complaint, the thrust of which is an accu-
sation by the plaintiff that the defendant defrauded him of
certain real property while acting in the capacity of plaintiff's
guardian.
       The order of the district court was entered on December
22, 1971, and dismissed count 2 of the complaint on its merits
and with prejudice for the reason that the plaintiff failed to
offer prima facie evidence of liability of the defendant to the
plaintiff.   This appeal followed.
      From the record it appears that on November 4, 1946, plain-
tiff and defendant were husband and wife and purchased a home
and 140 acres of land in Mineral County for $2,000.     In December
1946 the plaintiff husband was struck by an intoxicated motorist
and as a result of that injury he was taken to the Oregon State
Hospital in January 1947 and declared to be incompetent.    His
incompetency continued until January 1966 when he received his
Certificate of Competency and was released from the hospital.
       During the period of the plaintiff's incompetency, his
wife, the present defendant in this suit, was appointed the
plaintiff's guardian.   On March 22, 1954, the defendant petitioned
the district court in Mineral County for an order to sell the
plaintiff's half interest in the Mineral County land.    The
guardianship was devoid of funds, and the real property which
the parties owned jointly was rapidly deteriorating and, there-
fore, incapable of producing revenue either for taxes, repairs,
or for putting the land       such   condition as to allow the
property to be rented or otherwise reasonably used.    The defend-
ant's testimony at the trial was that it was her understanding
from the plaintiff's physicians that his situation was essentially
hopeless and that the Ffuardianship would have gone on for years
and years.
        We quote a portion of that Petition for Order of Sale of
Real Property which states:
        "That it is necessary and for the advantage,
        benefit and best interests of said estate and
        those interested therein, including the said
        Incompetent, that said real estate and personal
        property be sold for the following reasons:
        "That the cost of maintaininq said property and
        payment of taxes thereon is unjustified, as said
        Incompetent only owns an undivided one-half
        interest therein, and considerable costs of
        repairs and maintenance on the buildinqs upon
        said premises are now necessary to be done, and
        there is no cash or funds belonqing to said
        estate available for said purpose.
        "WHEREFORE, your petitioner prays that an order
        be made and entered by this Court granting him [her]
        license to sell said real estate at either public
        or private sale, as petitioner may deem most
        beneficial for said estate." (Emphasis supplied.)
        On the basis of that statement, the district court on
March 22, 1954, executed an order to show cause returnable on
April 19, 1954, some three weeks thereafter.    In addition, the
defendant-guardian was required to publish a copy of the Order
to Show Cause on Application of Guardian for Order of Sale of
Real Estate once a week for two successive weeks in the Mineral
County Independent, a newspaper of general circulation in that
area.   That order to show cause was published on April 8 and
April 15, 1954.
          Thereafter, the court made an Order of Sale of Real
Property which was filed on April 19, 1954, and ordered the
clerk of the district court to post notices in three public
places in Mineral County giving public notice of the sale of
plaintiff-incompetent's undivided one-half interest in this
property.     On April 20, 1954, the clerk of the court certified
that those notices were posted and thereafter defendant-guardian
caused a notice of sale to be published in the Mineral County
Independent on April 22 and on April 29, 1954, giving full public
notice of the fact that plaintiff-incompetent's undivided one-
half interest would be sold on or after May 1, 1954, in the law
office of Walter T. Murphy in Superior, Montana.
          That sale took place and there was but one bidder, one
Edwin M. Johnson, who offered to purchase the property for $307.80,
being 90% of the appraised value of $342.    There was no evidence
that the sale was conducted in any secretive manner, or that
other bidders were discouraged, or that there were other bidders
at all.
       Thereafter, a return was filed and a petition for order
confirming sale of real and personal property was made to the
district court by the defendant-guardian, a portion of which
petition, the same being filed May 6, 1954, states:
      "That it is to the best interest of the estate of
      said Incompetent and of all persons interested
      therein, to sell said property for the followinq
      reasons: that there is not money, funds or credit
      in the said estate with which to pay taxes and to
      pay for the cost of maintenance and protection of
      said property; that said land is arid and a dwell-
      ing is situated thereon, but that said dwellinq
      is uninhabitable by reason of needed repairs and
      by the further reason that no water is available
      for use at said dwellinq or upon said land without
      construction and maintenance of a pipe line to a
      spring on adjacent Government owned land. That
      said building is deteriorating and requires expense
      for upkeep and care, and unless the same is repaired
      and protected, said property will deteriorate to
      such an extent that it will have no market value.
      That said property is of small vdlue. Tnat said
      property has been appraised at the sum of $342.u0
      wlthin six months prior to the date of such
      sale, and that 90% of said value is the fair
      market value of said property." (Emphasis supplied.)
       On May 17, 1954, the court,having recited the fact
that lawful notice had been given, confirmed the sale of
plaintiff-incompetent's interest in said property to Edwin M.
Johnson for the sum of $307.80.   On August 5, 1954, the defend-
ant filed a final account and petition for discharge and was
discharged from her trust on August 16, 1954.
       Ten days after the approval of the sale, the property was
transferred again, and the defendant acquired the plaintiff's
interest in the real property from the purchaser Johnson.     The
transfer from Johnson to the defendant was for the exact amount
that Johnson paid for the property.
       The issue presented to this Court for review is whether
or not a guardian of an incompetent, acting as a trustee of his
estate, can engage in a sale of estate property to a third party
with the intent to transfer the property to the guardian after
the sale without violating the fiduciary relationship.
       We do not find any evidence of any intent to defraud the
plaintiff in the connection with the sale of this property, and
we find no bad faith was present on the part of the defendant in
this transaction; on the contrary the evidence is all of good
faith, full disclosure and court supervision.   Plaintiff's posi-
tion is that a fraud was committed because of the fact that the
defendant acquired the plaintiff's interest in the real property
from the purchaser Johnson.   There can be no question but what
transactions involving a guardian's acquisition of a ward's
property should be carefully scrutinized because of the inherent
possibilities of violations of fiduciary obligations.    The dis-
trict court, in its order of sale of real property, duly found
the necessity for the sale of the fractional interest of the ward.
Thereafter, the sale was conducted in the guardian's attorney's
office to anyone who would care to make a bid, that is, at a public
rather than a private sale.   It is not surprising that there
would be no person other than the other joint tenant or some-
one acting on her behalf who would be interested in purchasing
the fractional interest.   If the sale did not take place in
that fashion it is difficult to see, in the absence of any other
bidders, how the sale could have occurred at all.   Accordingly,
the defendant would then have been placed in the position of
either financing taxes, repairs and other expenditures in connec-
tion with maintenance of the property from her own funds or allow-
ing the same ultimately to revert to the county for taxes.     Our
position here is that the action of the guardian in connection
with the ultimate acquisition of title to the property was, in
fact, in the nature of a partition of the property, a11 in good
faith, on the advice of counsel.   We hold that the district
court was justified in dismissing the plaintiff's action on the
basis that the plaintiff had failed to make any showing of any
kind of fraudulent motive, intent, or design on the part of the
defendant.
       While the fiduciary has the positive duty of exercising
all reasonable diligence in connection with the care and conser-
vation of a beneficiary's estate, we hold that the fiduciary
does not have the duty of individually contributing from his         t   !   ,




own resources for indefinite periods for the repair, maintenance,
or upkeep of his ward's estate.    If the ward, as in the case
here, had no funds with which to pay those expenses which were
necessary in order to keep the property, it should then follow
that the only other alternative that the guardian had was to
dispose of the propert
in the conduct of this                              P
                                     of the fiduciary uty existed


      The judgment is a
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    ----& _ - &
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    Mr. Justice Wesley Castles does not participate in this cause,

    deeming himself disqualified.
