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District Court of Appeal, Fourth District, California.


Civ. 3629.

Decided: June 05, 1947

Clarence Harden, of San Diego, and Henry F. Walker, of Los Angeles, for appellants. Gray, Cary, Ames & Driscoll, of San Diego, for respondent.

This is an appeal from an order settling the second annual account of a guardian. Mrs. Sheedy, the guardian, and Mrs. Hatch, the objector, are daughters of the ward. About a year before this guardianship proceeding was started, Mrs. Hall purchased a ‘ranch’ near Alpine in San Diego County, giving a trust deed for part of the purchase price. Her main income came from a trust in an eastern bank, of which the was a beneficiary.

On May, 21, 1943, without notice to Mrs. Hatch, Mrs. Sheedy was appointed guardian of the person and estate of Mrs. Hall on a petition alleging that by reason of old age and physical condition she was unable to properly manage her property, and was liable to be deceived or imposed upon by artful or designing persons. On June 22, 1943, Mrs. Sheedy, as guardian, filed a ‘petition for monthly allowance.’ She alleged that her mother had been living as a member of her household for two years; that the ranch had been purchased for the benefit of her mother's health; that petitioner, her husband and children, and her mother had lived on the ranch for about a year; that her mother had been receiving an average income of $15,000 a year from a trust established by her parents; that since they had been living together her mother had contributed approximately $800 per month to the household and family expenses of herself and the petitioner and her family; that there was ample income to permit a continuance of such allowance; and that there would be further expenses in maintaining and operating the ranch. The prayer was for such a monthly allowance for this purpose and for authority to continue the maintenance and operation of the ranch ‘as in the past.’ On the same day, the court entered an ex parte order that Mrs. Sheedy, as such guardian, ‘is hereby granted an allowance of $800 per month, with which to meet household and living expenses of said petitioner, her family and her mother, to be used and expended to maintain and conduct the household of said petitioner, with whom said incompetent resides, in the same manner as said household has been conducted in the past, and that said Guardian is hereby relieved from filing a detailed account of the expenditure of said sums.’ This order further authorized the guardian ‘to continue the operation of the Alpine, California, ranch and to expend such additional sums as may be necessary for that purpose out of the income of said incompetent.’

On August 6, 1945, the guardian filed her second annual account. This account showed total receipts of $42,137.19 and total expenses of $40,964.36, with a balance on hand of $1172.83. The receipts consisted of:

The expenses listed showed only $2000 had been paid on this $3500 loan, leaving an actual deficit instead of a small surplus.

Omitting the amount on hand at the beginning of the period and disregarding the $3500 loan and the payments thereon, and using round figures, the report discloses that the actual receipts for this year were $38,000, including about $1900 income from the ranch, and that the actual expenses claimed were $39,000.

Of the $39,000 spent, payments amounting to $9639 are not questioned. They include $1075 for cost of administration, $5773 paid on the trust deed on the ranch, and $2791 for taxes including $312 taxes on the ranch home. A further $7070 was spent to rebuild the building which had burned on the ranch. While no permission to make this expenditure was obtained this item is not attacked. This leaves $22,291 which was expended in paying $9000 for the monthly allowance and $12,691 in operating the ranch and for incidentals. The guardian testified that each month she took out $800 from the ward's funds, which she deposited in her own bank account. With the approval of the court she refused to disclose what she did with this money. According to the account and her testimony, the other $12,691, used mostly in operating the ranch, was spent as follows: $3665 for labor; $2000 for animals purchased, including three blooded riding horses and a dog; $4000 for feed and equipment for animals; $800 for gasoline and repairs for four automobiles; $400 for the cost of several automobile trips taken by the ward, the guardian, her husband and one child; $300 for clothes and ordinary medical expenses for the ward; and the balance for various supplies for the ranch and home.

Objections to this account were filed by Mrs. Hatch, the sister. On the hearing, it developed that in operating the ranch the guardian had bought and expensively maintained several riding horses which were used exclusively by the members of her family other than the ward. Also, that she had bought and fattened cattle and hogs, some of which had been sold but which had largely been butchered, placed in deep freezers and used by the family, along with milk, butter, eggs and chickens. The court, in its findings and order, disallowed $300 spent on buying and feeding the dog, and ordered the guardian not to maintain thereafter, in the operation of the ranch, more than two milk cows, two work horses and a reasonable number of chickens. All other items in the account as rendered were allowed, although the future maintenance of animals was restricted. From this order Mrs. Hatch personally, and the ward through Mrs. Hatch as guardian ad litem, have appealed.

The appellants first contend that the account as filed is legally insufficient since it merely lists the amounts received and expended during the year, with no statement of the property on hand or of other facts showing the actual condition of the ward's estate. While the account was not as complete as might be desirable it cannot be held entirely insufficient, especially since no such issue was raised in the pleadings.

It is next contended that the order of June 22, 1943, for a monthly allowance was invalid and void on the grounds that no notice was given, and that the court had no authority to include therein an allowance for the living expenses of the guardian and her family; and that no accounting was made to show that this money was properly used. The respondent contends that this allowance was property made under section 1558 of the Probate Code, which provides that under certain circumstances the court may make an order disbursing surplus income of an incompetent person to that person's next of kin; and that such an order may be made ex parte under the provisions of sections 1558 and 1557. It is then argued that this monthly allowance was ordered paid to Mrs. Sheedy as next of kin and not as guardian; that her duty ended when she paid the amounts to herself; that when thus paid these amounts became her absolute property; and that she could not be required to make any account as to what she did with the same.

It is quite evident from the language used in the petition and in the order that this order for a monthly allowance was not intended as one distributing surplus income, under section 1558 of the Probate Code. Although the court had the power to make such a distribution, it clearly appears that the order here in question was made, not for that purpose, but for the purpose of properly caring for the ward, with an incidental benefit to the guardian, in order that the ward might continue to live in the same manner as in the past. It further appears that these monthly allowances were not awarded to Mrs. Sheedy personally and as her absolute property, but were granted to her as guardian for the specific purposes set out in the order: to maintain the household in which the ward was residing in the same manner as in the past, and to cover both the household and living expenses of the ward and the petitioner and her family. If it be assumed that the court could legally excuse the guardian from making a detailed account of such expenses, the order neither provides that the guardian may take these amounts as her own property, nor that she need make no account of any kind as to what she did with the money. To excuse her from making a detailed account as to how each cent was spent does not relieve her from the duty of making some account, and of showing that these amounts were expended for the purposes set forth in the order. The further provision in the order that the guardian might continue the operation of the ranch is limited by the prayer of the petition that she be authorized to continue ‘the maintenance and operation of the ranch as in the past.’ This did not authorize her to greatly extend the activities of the ranch, or to maintain and operate it in some new and unusual manner.

The gist of the appellants' complaint is that the respondent has not only improperly obtained and used a very high monthly allowance, designed to cover the living expenses both of the ward and, to some extent, of the guardian and her family, but that she has further spent nearly $13,000 of the ward's money for what amounts to living expenses for the guardian and her family and for their use and benefit, while she has retained a large part of the $9600, taken as monthly allowance, for purposes entirely personal to herself and family. The appellants' position is understandable, and it is also easy to understand the respondent's feeling that she was properly allowed to share in the benefits that would naturally come from continuing the support of the ward in the same home and in the same manner as in the past. Under the circumstances, it should not be held that the court was without power to make the order in question even though it varied somewhat from the usual order and was not confined to a proceeding under section 1558 of the Probate Code, especially where no attack was made prior to the accounting. It was a family matter, the interests of the ward were to some extent interwoven with those of the guardian and her family, and some leeway was permissible to the court. Moreover, some liberality could well be exercised in allowing the respondent some benefit from things raised on the ranch insofar as such things had been theretofore used by the common family.

However, such privileges, even liberally construed, should not be abused. The fact that more than $22,000 of the ward's money was spent this year on the living expenses of this family and the operation of this ‘ranch,’ from which there was a purely incidental income of less than $2000, would indicate either great mismanagement or something worse. The facts as disclosed by the account called for a careful investigation and full explanation at the hearing. Regardless of any permissible liberality in connection with the order and the benefits which might be derived therefrom, the guardian should have been required to show that she had complied with the terms of this liberal order, to show that the monthly allowance was expended for the purposes named in the order, to show that any further living expenses for the ward were necessary, and to show that the amounts expended for the operation of the ranch were reasonable and within the limits prescribed by the order. These things were not done, apparently because of the respondent's position, adopted by the court, that the guardian was not required to account for what she had done with the $9600 taken as monthly allowance, and that a sufficient explanation of any other expenditure was that the amount had been spent in operating the ranch. The result was that no real hearing was had on the account under the general objection that large amounts had been improperly used, that objections to specific items were considered on the wrong theory, and that evidence material to these issues was excluded as inadmissible.

The account showed that several hundred dollars was expended for clothes, dressmaker bills, beauty shop treatments and ordinary medical treatment for the ward which were charged as ranch expenses or as incidentals. These items were a part of the living expenses for which the monthly allowance was specifically made, and these additional charges should not have been allowed in the absence of a showing that such allowance, having been properly spent, had proved insufficient. The large amount spent for the purchase and maintenance of blooded saddle horses was obviously a departure from the way the ranch had previously been run, and for the personal pleasure of the guardian and her family. While the court recognized the impropriety of this by restricting such operations in the future, all amounts expended for this purpose during the year in question were approved. Other large expenses in connection with the operation of the ranch were approved without any inquiry or evidence as to whether they were in accordance with the terms of the order. Several hundred dollars in gifts to individuals, to charities and to a political organization were approved without sufficient supporting evidence. Nearly $1000 in charges for gasoline and other automobile expense, including the rental of parking space in San Diego, which were separately charged as ranch expenses, were approved when the evidence indicates that a large portion thereof should have been personally charged to the guardian or, at best, included in the household and living expenses which were covered in the order for a monthly allowance. Many items for supplies and equipment were charged as expenses of operating the ranch when the evidence indicates that some were in fact household expenses, and fails to show that others were either of a different nature or reasonably necessary to the continued operation of the ranch in the same manner.

On the record before us many of the items incorrectly allowed cannot be segregated and a proper correction here made. The account, as rendered, is obviously excessive and should be reexamined and passed upon, with the correct principles in mind, and with such evidence as is material to the accounting required of such a guardian, both generally and by the order made on June 22, 1943.

A further contention is made that the order allowing attorneys' fees is void on the ground that it runs directly in favor of the attorneys and therefore comes within the principle laid down in Garra v. Superior Court, 58 Cal.App.2d 588, 137 P.2d 31. While the court found that these attorneys had rendered services to the guardian and the estate of the ward during this year of the reasonable value of $600, the order was that the guardian was authorized and directed to pay this amount to these attorneys for these services. The case cites is not applicable and no invalidity appears in this respect.

The order appealed from is reversed and the matter remanded for a further hearing in accordance with the views herein expressed.

BARNARD, Presiding Justice.

MARKS and GRIFFIN, JJ., concur.