STRUDTHOFF v. YATES

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District Court of Appeal, Fourth District, California.

STRUDTHOFF et al. v. YATES et al.

YATES v. STRUDTHOFF et al. IN RE: STRUDTHOFF'S ESTATE.

Civ. 3402.

Decided: October 29, 1945

William L. Waters, of Fullerton, for plaintiffs, cross-defendants, and appellants. Mize, Kroese & Larsh, of Santa Ana, for defendant, respondent, cross-defendant, and appellant Sydney Yates. Stephen F. Gallagher, of Anaheim, for defendant, cross-complaint, and respondent Edith H. Yates.

This is an action by two of four heirs of deceased to require the administrator to account and to impress a trust upon real property deeded by the administrator to the holder of incumbrances on real property, who was the wife of the administrator, under authority of an order of the Probate Court to compromise such claims. Also involved in this action is a petition for revocation of letters of administration and the approval of a so-called final account of the administrator arising out of the probate proceedings in the matter of the estate of John D. Strudthoff, deceased. John D. Strudthoff died testate on August 14, 1936, leaving four adult children. Two of these, Adolph and Arthur Strudthoff, are plaintiffs herein and the other two, Evelyn A. Strudthoff and the other two, Evelyn A. cross-defendants in a cross-complaint in which respondent Edith H. Yates sought to quiet her title to the property involved. The deceased, at the time of his death, owned 40 acres of land in Orange County planted to oranges, which were divided into two parcels. He devised ten acres of parcel one to a bank in trust for his son Adolph. The other ten acres of parcel one were devised to his daughter Evelyn and 20 acres, all of parcel two, to his son Arthur. Another tract was devised to his daughter Amelia but he did not own that tract at the time of his death. By subsequent agreement of the devisees Evelyn, Arthur and Amelia, each was granted an undivided one-third interest in each of the last two mentioned parcels (30 acres) subject to one-third of the respective incumbrances. Arthur and Evelyn were appointed administrator and administratrix respectively with the will annexed on August 19, 1936. A loan was made to the estate by one W. C. Endicott for the sum of $11,000, during the course of administration. This loan was secured by an incumbrance on the north one-half of parcel two. In Cotober, 1939, that ten acres was deeded to Endicott for $250 and a satisfaction of the incumbrance, pursuant to an order of compromise. This action was brought to impress a trust on the remaining acreage devised to Arthur and Adolph. Amelia and Evelyn did not join in the charges of fraud made by the brothers but disclaimed any interest in the property. The bank named in the will as executor declined to act as such. On January 25, 1937, the administrators, by court order, borrowed for the estate $6,500, giving a crop mortgage as security. On March 30, 1937, they again petitioner to borrow $11,000 secured by a deed of trust covering parcel one and a crop mortgage. The petition recited that they did not have money enough to pay off the incumbrances then against the property. This loan was not consummated. On May 17, 1937, they borrowed from Southern County Bank, subject to first incumbrances, $12,700 and gave as security a deed of trust upon parcel two and a crop mortgage upon all 40 acres. On May 25, 1939, the Southern County Bank filed a petition to revoke the letters of administration, and asked that Evelyn and Arthur be removed on the ground that they were wasting the estate and were neglectful in the management thereof and were not keeping proper accounts. After citation issued, they resigned as such and all four heirs nominated Sydney Yates as administrator with the will annexed. The final account of the retiring administrators showed $85.75 on hand; that Evelyn had advanced from her personal funds for ranch operations $381.25, which had not been repaid to her. The indebtedness of the estate then showed a total of $42,662.29, and most of the obligations were delinquent.

Decedent had, prior to his death, filed a petition under sec. 75, sub. s of the Federal Bankruptcy Act, 11 U.S.C.A. § 203, sub. s. A composition of his creditors had been made but these terms were in default. In refinancing the estate's obligations, the Southern County Bank advanced money to it to pay off pressing claims and incumbrances against the estate. On July 17, 1939, Sydney Yates was appointed administrator with the will annexed. On July 20, 1939, Edith H. Yates, who owned, as her separate property, an adjoining grove, and who operated her own ranch equipment, signed a contract with the administrator (her husband) agreeing to cultivate, irrigate, fertilize and care for the 40 acres for one year for the sum of $4,000. This contract was fulfilled. On July 20, 1940, she signed another similar contract for $4,500 for 30 acres, conditioned that the work be done to the satisfaction of the Southern County Bank, Federal Land Bank, and the owners and mortgage holders of the groves. On July 5, 1941, she again made a similar contract on the 30 acres for $5,250. The orchards were apparently cared for to the satisfaction of the parties concerned. None of these contracts were approved by the court. The last one reads in part as follows: ‘While it may not be necessary to execute this contract, I feel it necessary for the record, as the administrator is my husband, and on this account, desire a record for my file.’ On December 22, 1939, the Federal Land Bank, incumbrancer for an amount in excess of $11,000, requested that past due payments be brought up to date. On April 29, 1940, the administrator, by court order, borrowed, for the estate, $3,000 from Edith H. Yates, his wife, and gave as security, a deed of trust on the west one-half of parcel one. On February 10, 1941, the administrator petitioned to borrow fro Edith H. Yates, his wife, $11,500, and an additional advancement not exceeding $2,500, to be repaid within one year, and to be secured by a trust deed and crop mortgage on the 30 acres, covering crops for the years 1941, 1942 and 1943, which were to be subject to incumbrances of record. The petition to borrow recites that that sum was to be used in paying off certain delinquent indebtedness of the estate, namely, on Federal Land Bank mortgage, $11,800, and interest in the sum of $2,300; Southern County Bank, $2,700; Southern County Bank $6,500 and $1,400 interest and taxes; claim of Anna Strudthoff $3,400; personal loans by Mrs. Yates or advances to the estate $1,550. On February 21, 1941, the court granted the petition. The record is not clear what indebtedness was paid by the loan, if any. Mrs. Yates's claim for three years of orchard care had then reached the sum of $13,750. On April 7, 1942, Sydney Yates, as administrator, petitioned the court for authority to compromise the indebtedness due Edith H. Yates. The petition alleged that the sum was past due; that the estate was unable to pay the debt and that she agreed to satisfy the debt in full and pay the estate $1,000 in consideration of a conveyance to her of the 30 acres subject to prior incumbrances. It is then alleged that the property, including the crops, was then worth only $30,000; that the property was incumbered by a trust deed in favor lof Mrs. Yates for $11,500 and $2,500 advances made by her and authorized by the court, secured by 2 chattel mortgages on the crops in the sums of $5,000 and $3,000 respectively; and prior incumbrances of Federal Land Bank for $11,000 and Southern County Bank for $6,500. On April 17, 1942, the court made an order authorizing the convveyances. There was some discrepancy in the description of the property in the petition and order. On June 9, 1942, the petition and order. On June 9, 1942, the court set aside that order and on the same day a similar petition to compromise was filed, set for hearing, and on September 4, 1942, the court made an order authorizing the compromise. The deed from the administrator to his wife was executed and recorded on October 2, 1942. Under the theory that the state then had no assets, no further proceedings were had until August 27, 1943, when Adolph filed a petition in the probate proceedings, No. A5250, for revocation of letters of administration of Sydney Yates alleging generally the facts set forth in the complaint herein, and sought an accounting by him. Yates answered the petition and alleged that he was not required to file an account under sec. 921 of the Probate Code; that all of the assets of the estate were exhausted; that the $1,000 paid by way of compromise to the estate had been paid to the attorneys for the estate in settlement of their fees and costs. It is then alleged in the answer that the value of the estate, without fault of the administrator, had greatly decreased; that the crops, during the administration, were taken by the holders of crop mortgages; and that at the time the estate came into his hands it was already indebted in excess of $35,000. He denied generally the allegations of the petition in reference to his removal and asked that the hearing on the citation in the probate proceedings be consolidated with the trial of the issues in the present action. The court ordered such consolidation. On November 2, 1943, Sydney Yates filed a purported final account, acknowledging receipts of $85.88 from the former administrators, and certain other items amounting in all to $1,566.28. The disbursements totaled the exact amount as hsown by the receipts. It is then alleged that there remained no property of any king belonging to the estate and subject to administration. Settlement of the account and termination of the proceedings were sought under sec. 1068 of the Probate Code. That account was settled and approved by the court in the judgment herein appealed from.

Plaintiffs brought this action, alleging, generally, some of the facts above related, and emphasized the fact that the administrator, Sydney Yates, never filed any proper report or account of his administration as required by sections 921 and 922 of the Probate Code. The complaint alleges that defendants Yates ‘entered into a conspiracy to defraud the said heirs out of their respective interests in said orange grove * * * by misrepresentations and fraudulent concealment of the facts' from the court to secure an order authorizing loans from and the subsequent conveyance of the property to Edith H. Yates under the compromise order. It is alleged generally that Sydney Yates falsely represented that he would do a better job in operating the 40 acres of oranges if the devisees would ‘get him appointed as administrator’; that he falsely promised that he would so manage said groves that the production would gradually liquidate all outstanding indebtedness and save the property from the foreclosure without cost to them; that relying upon such promises and representations they premitted him to manage said estate and made no inquiry nor investigation of the facts concerning its operation; that Sydney Yates concealed all facts and proceedings from them; that he sold each year's crop of oranges and that such proceeds were sufficient to pay costs, interest, taxes, and leave a substantial cash balance; that he purposely concealed the real facts from the court and purposely failed to render any annual account; that he, inviolation of his duty, fraudulently secured the authorization of the loan of $11,350 from his wife when said estate was not in need of the money; that such loan was made for the financial benefit of the defendants and was made to obtain for themselves the conveyance of said 30 acres; that no part of said loan was ever paid into the estate but was a pretended advance for the consummation of the fraudulent purpose; that Sydney Yates fraudulently and negligently caused the loss of the 10 acres deeded to the incumbrancer, W. C. Endicott, under the order of compromise; that on June 9, 1942, when defendant Sydney Yates filed his petition to compromise the indebtedness claimed to be due to his wife, 30 acres of oranges had fully maturedAnd approximately 11,000 field boxes of oranges were then growing on the trees and that said crops could have been sold, as defendants well knew, for the sum of $22,000, and that he did receive said amount in cash and had it on hand on October 2, 1942, when the deed to his wife was made and recorded; that defendants fraudulently concealed these facts from the court and the plaintiffs; that on June 9, 1942, the reasonable market value of the 30 acres of oranges was in excess of $45,000, which fact the defendants well knew; that defendant administrator refused to sell the ranch during 1942 at $1,500 per acre; that Edith H. Yates was the wife of the administrator but such relationship was not disclosed in the petition to compromise or otherwise; that the conveyance was secured by fraud and tht Edith H. Yates should be declared as holding such property as trustee for plaintiffs. An accounting is sought for the oranges sold.

Sydney Yates appeared by answer and denied generally all of the allegations set forth and alleged specially that the court was fully informed, at al times, of the relationship between himself and Mrs. Yates, and by way of separate defense alleged two written assignments of all rights of plaintiffs in the estate to defendant Sydney Yates and set up copies of such assignments. Mr. Yates testified that he did not consider these assignments of any value, but paid plaintiffs ten dollars for them. The trial court failed to find on the question of their validity. It is then alleged that when he was appointed administrator the assets of the estate were heavily incumbered in the sum of $35,000; that all acts and proceedings were free of fraud or concealment and were done in good faith in the interest of the estate and upon advice of competent counsel. The answer of Edith H. Yates was to the same effect.

After a protracted trial the court found in all respects in favor of defendants and cross-complainant and againat plaintiffs' allegations. It is specially found that the administrator Yates made his final account, petition for termination of further proceedings and for his discharge as such, under section 1068 of the Probate Code; that there is no property of any kind belonging to said estate subject to administration; that said account lists all receipts and disbursements of said administrator and that it is a full, true and correct accounting; that the conveyance to W. C. Endicott, under the petition to compromise, was to the best interests of the estate; that the petition of Sydney Yates, as administrator, for authority to borrow $11,350, and additional sums not to exceed $2,500, from Edith H. Yates, and to execute a deed of trust on the 30 acres of said estate property to secure its payment, was made and the order was granted in good faith and for the best interests of said estate; that no facts were concealed from the court; that the full amount of the authorized loan was advanced and was not ‘made for the financial benefit of defendant Sydney Yates and Edith H. Yates or either of them’ or as part of any conspiracy to declare said loan due or to obtain for themselves any conveyance of said 30 acres of said estate; that Edith H. Yates is the owner, as her separate property, of the 30 acres described in the deed. The court then, in the judgment, allowed and settled the purported final account of said administrator, terminated further proceedings, discharged the administrator and decreed that Edith H. Yates was the owner of the property described; that plaintiffs taken nothing by their complaint and that the petition of Adloph William Strudthoff, in the matter of the estate of John, D. Strudthoff, deceased, case No. A2520, be denied.

The two main questions presented on this appeal are, first, the validity of the deed of the 30 acres by the administrator to his wife, authorized by the court, under the compromise agreement. The trial court found, upon conflicting evidence, that there was no fraud or misrepresentation practiced by respondents upon the court or parties in interest. This finding by the court has supporting evidence and if it were the only question presented, our power to review the order would end. In this connection, it is contended that since Yates, as administrator, sold the estate property to his wife under the compromise agreement, he in effect was either directly or indirectly an interested purchaser under section 583 of the Probate Code, and that the sale was therefore voidable and should be declared void at the instance of those interested in the estate; that plaintiffs are such interested parties and that it was the plain duty of the trial court, under the undisputed facts, to so declare it, citing O'Connor v. Flynn, 57 Cal. 293; Santos v. Santos, 32 Cal.App.2d 62, 89 P.2d 164; In re Estate of Richards, 154 Cal. 478, 98 P. 528; Chastain v. Pender, 52 Okl. 133, 152 P. 833.

Respondents argue that these cited cases are not applicable by reason of the fact that the money borrowed by Mrs. Yates was on her separate property and remained such under sec. 162 of the Civil Code, that the earnings of her separate business or property was her separate property, citing Gray v. Perlis, 76 Cal.App. 511, 245 P. 221, and that under Civil Code, secs. 157, 158, 162 and 164, neither husband nor wife has any interest in the property of the other, and either husband or wife may enter into any engagement or transaction with the other, or with any other person, respecting property, which either might, if unmarried, and that all property of the wife, owned by her before marriage, and that acquired afterwards by gift, bequest, devise or descent, with the rents, issues and profits thereof, is her separate property; and that whenever any real or personal property, or any interest therein or incumbrance thereon, is acquired by a married woman by an instrument in writing, the presumption is that the same is here separate property, and that the presumptions in this section mentioned are conclusive in favor of any person dealing in good faith and for a valuable consideration with such married woman or her legal representatives or successors in interest. It is argued that section 583 of the Probate Code does not affect such a sale under compromise and that if it did the consideration involved in the transaction was the separate property of Mrs. Yates and was, under substantial evidence, so found to be her separate property by the trial court; that the question whether the administrator benefited by such conveyance was one of fact and that fact was resolved in favor of respondents.

It is an establish rule of law that trustees, strictly so-called, and executors and administrators cannot make a valid purchase of any part of the estates in respect to which they have duties to perform. No executor or administrator may directly or indirectly purchase any property of the estate he represents, nor be interested in any sale. The provision is only a declaration of the pre-existing principle of law that t trustee must not deal with himself, and is founded on public policy and should be rigidly enforced. Although he may act in perfect good faith, so far as his intentions are concerned, yet so strict is the law in respect to persons dealing with trust property and funds that it will not permit them to place theselves in a position antagonistic to the interests of their cestuis que trust. It is wholly immaterial whether or not the agreement was actually fraudulent. Likewise, the result to the estate in any particular transaction is immaterial. 11 Cal.Jur. p. 863, sec. 516; Jones v. Hanna, 81 Cal. 507, 22 P. 883.

Edith H. Yates contends she had a legal right to deal with her husband administrator, as a third party, because the funds, furnished by her in negotiating the loan to the estate, and her earnings and funds used in caring for the groves of the estate were contracted for by her husband as administrator and that the returns therefrom were and remained, under the law, her separate property. Whether the wife's earnings remained her separate property under the evidence here produced is questionable, it becomes immaterial under the well-reasoned authorities hereafter cited. That same question was presented fully and was considered, discussed and decided contrary to respondents' contention in Chastain v. Pender, supra, quoting from Burton v. Compton, 50 Okl. 365, 150 P. 1080, where the husband administrator, under order of the Probate Court, sold the real property of the estate at private sale to his wife. It was there said:

‘As to the first proposition presented, whether the husband administrator can sell the estate to his wife, we need look no further than the well-considered opinion of Burton v. Compton [50 Okl. 365], 150 P. 1080, where we find this question answered in the negative. We quote therefrom:

“The first proposition is before this court for the first time. Yet it is an old question, and has been passed upon repeatedly. And as far as we know, Indiana stands alone in upholding such deeds. In 1781, long before there was any statute upon the subject, Lord Chancellor Thurlow of England, in Fox v. Mackreth, 2 Leading Cases in Equity (White and Tudor) 722, held: ‘That trustees expose themselves to great peril in allowing their own relatives to intervene in any matter connected with the execution of the trust; for the suspicion which that circumstance is calculated to excite, where there is any other fact to confirm it, is one which it would require a very strong case to remove.’ And he says, in substance, that the rule rests upon public policy, and such a purchase will not be permitted in any case, however honest the circumstances, for the general interest of public justicce requires it to be destroyed in every instance, and that: ‘From genera policy and not from any peculiar imputation of fraud, a trustee shall remain a trustee to all intents and purposes.’ And our statute (section 6409, Revised Laws 1910 [58 Okl.St.Ann. § 496]) says: ‘No executor or administrator must directly or indirectly, purchase any property of the estate he represents, nor must he be interested in any sale.’

“But the defendant (plaintiff in error) insists that this transaction was free from fraud, and that the price paid was adequate. That might all be true in this particular case, but the law looks beyond the circumstances of any individual case; for, as said in Frazier v. Jenkins, 64 Kan. 615, 68 P. 24, 57 L.R.A. 575: ‘The opportunities which are open to an unfaithful trustee to advantage himself out of the trust estate are so many and so tempting, and the condition of the beneficiary in the trust ordinarily so helpless and confiding, that the law gives warning in advance against all transactions out of which it is possible for the former to make gain at the expense of the latter.’ And for this reason the Legislature has fixed this statutory rule which removes both the temptation and opportunity to do wrong. And the courts can make no distinction in the application of the rule between the honest and the dishonest. And whether the transaction be free from fraud or not is immaterial to the issue in the case. It is a transaction prhibited by the statute and condemned by public policy. And the fact that the common-law disabilities of the wife have been removed, and under our statutes she is a feme sole and can buy and sell in her own name, does not, by any means, divorce the mutual interest she and her husband have in each other's property. In case of the death of the one, the other would inherit not less than one-third of his or her estate. And it would be strange indeed if this alone did not lead them to do all in their power to enhance the pecuniary interests of each other. And where the wife purchases the property of her husband's cestui que trust, to say that the husband is not interested in that sale. and has not directly nor indirectly purchased the property of the estate, seems to us to be absurd. Besides, as well said in Tyler v. Sanborn, 128 Ill. 136, 21 N.E. 193, 4 L.R.A. 218, 15 Am.St.Rep. 97: ‘There is, moreover, apart from this pecuniary interest, an intimacy of relation and affection between husband and wife, and of mutual influence of the one upon the other for their common welfare and happiness, that is absolutely inconsistent with the idea that the husband can occupy a disinterested position as between his wife and a stranger in a business transaction. He may, by reason of his great integrity, be just in such a transaction, but, unless his marital relations be perverted, he cannot feel disinterested; and it is precisely because of this feeling of interest that the law forbids that he shall act for himself in a transaction with his principal. It is believed to be within general observation and experience that he who will violate a trust for his own pecuniary profit will not hesitate to do it, under like circumstances, for the pecuniary profit of his wife.’ And for that reason the law forbids a trustee to put himself in a position where either his integrity may be questioned, or his inclination to dishonesty may be indulged.”

In support of this same contention, see, also, Tyler v. Sanborn, 128 Ill. 136, 21 N.E. 193, 4 L.R.A. 218, 15 Am.St.Rep. 97; Gahanna Bank Co. v. Miesse, 41 Ohio App. 316, 181 N.E. 31; Cooper v. Burchett, 66 S. D. 162, 279 N.W. 598; Bopst v. Williams, 287 Mo. 317, 229 S.W. 796; and Crume v. Rivers, 178 Okl. 363, 61 P.2d 862.

Therefore, if the undisputed facts in reference to the transaction in the instant case can be held to be a purchase of the estate property by the administrator's wife and the administrator was interested in such purchase or sale, either directly or indirectly, the transaction was voidable at the instance of a party legally interested in the estate. U. S. Fidelity & Guaranty Co. v. Postel, 64 Cal.App.2d 567, 149 P.2d 183; Boyd v. Blankman, 29 Cal. 19, 87 Am.Dec. 146. Plaintiffs in this action were such legally interested parties. Santos v. Santos, supra.

The only remaining question, then, is whether the transaction constituted a ‘purchase’ of the property within the meaning of sec. 583 of the Probate Code. It has been held in this state, in Corporation of America v. Bank of America, 7 Cal.App.2d 470, 46 P.2d 262, that the execution of a note and mortgage by the administrator bank to itself did not constitute a ‘sale of the property’ within the meaning of former section 1576 of the Code of Civil Procedure (now sec. 583 Probate Code). Section 764 of the Probate Code provides that: ‘At any sale of real or personal property upon which there is a mortgage, deed of trust, or lien, the holder thereof may become the purchaser, even though no claim thereon has been, or could have been, presented or allowed.’ The original section of the Probate Act (Sec. 193) upon which sec. 583 of the Probate Code is based, discloses that it was enacted for the purpose of declaring not who might or who might not become a purchaser of the property of an estate, but it was to prevent the property from being sold at a prive less than its true value, which might be the case if the administrator, either directly or indirectly, prevented competition among the bidders, by entering into the market, either personally or through his agents, or if, with a view of purchasing, he was tempted to undervalue the property in his proceedings respecting the sale. Boyd v. Blankman, supra, 29 Cal. at page 36, 87 Am.Dec. 146. Former sections 1576 and 1617 of the Code of Civil Procedure were carried into section 583 of the Probate Code. The original intent and purpose of the section has not been changed. An administrator holds the property of his testator's estate as trustee and he will not, for wise reasons, be permitted to deal with himself as an individual in any transaction concerning the trust property. It has been held that it is beyond the power of the court to approve a transaction which is contrary to public policy. In re Estate of Boggs, 19 Cal.2d 324, 333, 121 P.2d 678; In re Guardianship of Carlon's Estate, 43 Cal.App.2d 204, 110 P.2d 488; 6 Cal.Jur. p. 114, sec. 73; 6 Cal.Jur. p. 95, sec. 58.

The word ‘purchase’, in a technical and broader meaning relative to land generally, means the acquisition of real estate by any means whatever except by descent. Kelly v. Southworth, 38 Wyo. 414, 267 P. 691. In a popular and confined sense, it means acquisition by way of bargain and sale or other valuable consideration, or the transmission of property from one person to another by their voluntary act and agreement founded on a valuable consideration. Cobb v. Webb, 26 Tex.Civ.App. 467, 64 S.W. 792. See, also, 35 Words and Phrases, Permanent Edition, p. 473; Robbins v. Pacific Eastern Corporation, 8 Cal.2d 241, 269, 65 P.2d 42.

In Waskey v. Hammer, 223 U.S. 85, 32 S.Ct. 187, 56 L.Ed. 359, where a governmental employee located a placer mining claim, it was held that the word ‘purchase’, as used in a statute prohibiting certain governmental employees from becoming interested in the purchase of public lands, is inclusive of the various modes of securing title to or rights in public lands. See, also, State ex rel. Board of Commissioners of Valley County V. Bruce, 106 Mont. 322, 77 P.2d 403, 406. Factually similar to the instant case is Vaughan v. Vaughan, 65 Okl. 1, 162 P. 1131. There an administrator, under an agreement with the creditors, which agreement was approved by the court, received and appropriated, under a decree of distribution, all of the property of the estate, as his individual property, and gave his note as security to the creditors. It was there held that such transaction constituted a ‘purchase’ within the meaning of their statute, which statute was similar to ours. In the instant case the administrator, as such, executed a deed of the property to his wife. The consideration for the deed, agreement or transaction was the cancellation of his wife's claimed indebtedness due her from the estate and the payment to it of the sum of $1,000 in cash.

We must conclude that the undisputed evidence shows, as a matter of law, the violation of section 583 of the Probate Code, and the trial court should have found the deed or transaction void at the instance of the legally interested parties plaintiff. The judgment and order should be reversed and the cause remanded. The court below should take an accounting between the parties upon the basis suggested in O'Connor v. Flynn, supra, and in Re Estate of Richards, supra, and decree that the respondent, Edith H. Yates, holds the legal title to the premises in trust for the parties legally interested and should make appropriate provisions for a conveyance of the property by her to the interested parties in the event the amounts found due to her are paid within a reasonable time to be fixed by the court; or, if such payment is not made, for a sale of the property at public auction, with all interested parties havbing a right to purchase thereat, and with the proceeds, after the payment of any amount found due to Mrs. Yates, to be distributed according to the terms of the will or in accordance with any approved and valid agreements or assignments of the interested parties.

Since the trial court failed to find on the validity of the two claimed assignments of interest by the heirs and devisees, this may have a bearing on the question of ultimate distribution of the estate, i such assignments are presented for approval by the court. The court may then, under section 1020.1 of the Probate Code, inquire into the consideration for such assignments and other questions raised, such as fraud, undue influence and duress, and may refuse to make distribution pursuant thereto. In re Estate of Cohen, 66 Cal.App.2d 450, 458, 152 P.2d 485; Golson v. Dunlap, 73 Cal. 157, 14 P. 576; French v. Phelps, 20 Cal.App. 101, 128 P. 772; In re Estate of Lund, 65 Cal.App.2d 151, 150 P.2d 211.

An accounting therefore must be had to determine the amount due Edith H. Yates for advancements made, services performed, etc., for the benefit of the estate.

As to the question of an accounting by the administrator under section 1068 of the Probate Code, we are firmly convinced that it was not the intention of the legislature, by the enactment of that section, to permit an administrator or executor, who is charged with the possession of estate property, in an inventory and appraisement in an amount exceeding the sum of $75,000, who operates the property, such as in this case, who realizes and pays out thousands of dollars over a period of several years, and who files no annual account, to merely come before the court and represent, by petition, that all the property that came into his possession, without specifying it, has been disposed of, and that now there remains no property subject to administration, without accounting for that property, and then summarily obtain an order terminating further proceedings and be discharged as such administrator under section 1068 of the Probate Code. In the instant case, the report of the inheritance tax appraiser, filed 9/28/37, lists all outstanding indebtedness of the estate, including administrator's and attorneys' fees, as $43,877.67, and recites that the fair market value of the property at the time of the death of the decedent, 7/14/36, was $75,000, and that the clear market value thereof as of that time was $31,635.71. The inventory and appraisement showed, as of December 30, 1936, an appraised value of parcel 1 at $35,000, and of parcel 2 at $40,000. The original administrators appointed were charged with this amount in the final account rendered by them. They also showed an income from the sale of oranges, water, oil lease rental, money borrowed, etc. in an additional sum of over $25,000. An itemized account showed expenditures totaling over $28,000, leaving a balance of $75,000, charged in the inventory and appraisement, plus $85.78 in cash. The administrator Yates receipted for this amount. From July 7, 1939, the date when Yates was appointed administrator and authorized to carry on the business of operating the groves, to September 10, 1943, when he was cited to render an account, no account was ever presented or filed showing receipts and expenditures by him as such administrator. Admittedly, several thousands of dollars came into his hands as such administrator. The only account filed by him was when he petitioned the court for disCharge as such administrator. The items shown as receipts are:

Cancelled checks from the Granada Packing House show payments jointly to Mrs. Edith H. Yates and Strudthoff Estate, in large sums. The checks were endorsed by Mrs. Yates and S. Yates, administrator.

Yates testified that he kept no record of the receipts because he did not receive any money; he ‘just turned the checks over to crop mortgagees' each time he received a check; that he contracted with his wife for the care of the grove; that he didn't have any money with which to pay her; that he kept no account of her charges other than the written contract with her, but that what money he did receive he turned over to her and she credited the Strudthoff Estate with it and that Mrs. Yates loaned the estate $13,8508 but that he did not show that sum in his account because it went to ‘pay off the present incumbrance’; that he did not know what Mrs. Yates paid out; that if she spent ‘an extra $500 or $700’ that would be added to the incumbrance. In one transaction, Mrs. Yates purchased a crop mortgage owned by one of the banks. She took the check for the proceeds of the orange crop ($3,500), paid off the crop mortgage, and claimed that there was a balance remaining which she applied to her account. Administrator Yates kept no account of the transaction. He testified that on August 14, 1941, he received a check payable to himself as administrator ‘for $1700 less advances'; that he didn't keep any record of the receipt of it but knew he turned it over to Mrs. Yates to apply on her account; that he did know what the advances were for nor did he keep any record of them, or the amount. As to the 1941 crop, a statement from the packer shows that $7,113.92 was paid to the administrator by checks. Yates testified that either he or Mrs. Yates received those checks; that he made no record of their receipt but turned them over to her; that he kept no accounting as to any balance due her from the estate; that the total proceeds from the grove in 1941 were $9,053.64; that his wife told him she would not give any extension of the one-year trust deed and note and was going to start foreclosure; that immediately after the first attempted compromise sale to his wife he picked oranges from the ranch but did not remember the net amount it brought in. The packing house statement shows 5,735 filed boxes were picked and the net return was $7,887.82, plus advance of $2,5008 totaling $10,387.82. He then testified that in June, 1942, he believed there was due his wife from the estate approximately $4,000 in excess of the amount of her loan; that he never received, as administrator, any money from any of the loans made under authority of the court and therefore was not required to account therefor; that his wife kept track of payments made to her, in her own books.

It should be here noted that had the purported compromise sale been postponed to a few months later, the amount received from the crops then on the trees would have been more than a substantial payment on her claimed incumbrance. This fact emphasizes and strengthens our belief that a strict accounting of the receipts and expenditures for the previous years should be had in accordance with sections 921 and 922 of the Probate Code. Admittedly, money was paid out for interest, taxes and many other items entailed in the handling of two orange groves over this period of years. Yates accounts for his failure to keep an account as follows: that he did keep an account book for those several items for about one year, but that his book was stolen from his automobile and therefore he kept none because he had access to his wife's books and they seemed to be accrate. No vouchers were produced supporsting any of the expenditures by the administrator, as required by section 925 of the Probate Code. Under section 571 of the Probate Code it is the duty of an administraotr to take into his possession all of the estate of the deceased, real and personal. He is charged in his accounts with the value of the whole of the estate of the deceased which may come into his possession, and with all the income, issues and profits thereof. Prob. Code sec. 920; In re Estate of Boggs, 33 Cal.App.2d 30, 90 P.2d 814. Under the facts here related and the conclusions herein reached, it cannot be rightfully said that the proceeds of the crops did not come into the possession of the administrator, or that he fully accounted for all the income of the estate. He cannot escape the necessity of filing a full and final account by negligently omitting to render an annual account, as required by section 1063 of the Probate Code. The administrator should be required to file his account and a full and complete accounting should be had of his stewardship. The reasonableness of the unapproved contract with the administrator's wife for the care of the orchard should be fully considered in the accounting. The petition for revocation of letters of administration should be reconsidered in connection with that accounting.

The judgment and the order settling and approving the alleged account and discharging the administrator are reversed.

GRIFFIN, Justice.

BARNARD, P. J., and MARKS, J., concur.