MALONEY v. MASSACHUSETTS BONDING INS CO (1941)

Plaintiff appeals from a judgment wherein it was held that an action brought by him against defendant as surety upon two bonds given by his former guardian was barred by the statute of limitations (Probate Code, sec. 1487).

The court found that on October 3, 1929, Nellie M. Maloney was appointed guardian of the person and estate of her husband, the plaintiff herein; that defendant bonding company as surety provided two bonds in the sums of $4,000 and $500 respectively as additional security for the faithful performance by the guardian of her duties; that plaintiff was discharged as a patient from a state hospital on April 1, 1932; “That on October 20th, 1932, after notice given in accordance with the order of this Court, an order was made by this Court providing that said Bernard F. Maloney be restored to competency, that the guardianship cease, that the order appointing guardian be set aside, that Letters of Guardianship be revoked, and that the guardian file an account of her administration”; that on July 27, 1935, the guardian died without filing an accounting of her administration; that on December 27, 1935, a second order was made and entered restoring plaintiff to competency, adjudging him sane and capable of managing his person and estate and directing an accounting by the guardian; that on June 22, 1937, the former guardian was adjudged in default in the payment to plaintiff in the sum of $8,477.33. By reference to the answer the court found that following the order of 1932 the guardian as such performed no further act; that the guardianship ceased and that no further proceedings were had until after her death. The court also found that the assets of the estate of the incompetent person had been delivered to him upon the adjudication of the order of restoration to capacity in 1932. The evidence indicates support of this finding. Incidentally, the answer and the supplemental answer of the executor of the guardian's estate shows that the real property of appellant, with the exception of one parcel devised him by his guardian and wife, was lost to his estate by reason of the expenses of his care, the payment of taxes, interest on obligations, through foreclosure of existing mortgages, attorneys' fees, etc. The court further found “That more than three (3) years have elapsed since the date of restoration to competency of said Bernard F. Maloney and the date of the filing of this action.” As a conclusion of law the court found that the present action was barred by the provisions of section 1487 of the Probate Code, and that defendant was entitled to judgment. It did not specifically find, however, whether the statute of limitations began to run from the making of the first order or from the second. On the trial the defense relied primarily upon the date of the first order. On appeal petitioner stresses the finding as relating to the second, and respondent's brief accordingly is principally a reply based upon such premise.

Assuming that the time runs from the first order––that of October 20, 1932––the record does not disclose that this order restoring plaintiff to capacity, terminating the guardianship, setting aside the order appointing the guardian, revoking the letters of guardianship, directing that the guardian surrender to this plaintiff all of the estate and file an account within twenty days, has been vacated or set aside, or that it has even been directly attacked except by way of argument in the present appeal. The order recites that due proof of notice of the hearing had been regularly given “in the manner and for the time required by law”, and neither the second (1935) order of restoration, nor the order sustaining plaintiff's objections to the supplemental account filed by the executor of the estate of the guardian, nor the present judgment, purports to vacate the 1932 order of restoration. On the contrary the present judgment confirms the averment in defendant's answer “that thereafter, and on the 20th day of October, 1932, after proceedings duly and regularly had therefor before the above entitled Court, said Bernard F. Maloney was ordered restored to capacity”.

Appellant's contention is that the order of 1932 is void because the guardian was not served with a citation five days before trial on the issue of capacity. The attack on such order in the present action, however, is collateral, and unless the invalidity appears on the face of the judgment the order is binding herein. The affidavit of service of the 1932 notice of hearing on petition for restoration to capacity recites service by mail upon the guardian and her attorney five days before the time appointed for the hearing, and, as stated, the order of 1932 recites that the notice of hearing “has been regularly given in the manner and for the time required by law”. If there was an imperfection in the notice or in the manner of its service it was the fault of petitioner, a fault of which neither the guardian, nor the executor of her estate, nor respondent herein has ever complained.

Appellant deemed the 1932 order to be valid, his verified petition for citation filed in 1935 alleging that the guardian had converted $10,000 to her own use, praying that the executor of her estate account therefor, and setting forth that: “On or about the 20th day of October, 1932, your petitioner was duly restored to competency by said court.” The affidavit of the attorney which culminated in the 1935 order, in referring to the original petition for restoration, simply alleged “it is necessary that said petition be placed on the calendar for hearing” and prayed for an order that notice be given in the manner and for the time provided in section 1200 of the Probate Code. There was no new proceeding and the pleadings did not raise any issue as to the validity of the 1932 order. The second order of restoration sets forth that petitioner was restored to capacity in 1932 “by this court”. However, the order also contains the following: “* * * that a question has been raised by a title company as to the sufficiency of the notice upon which said Order restoring to capacity was made”. (The order sustaining the ward's objections to the guardian's supplemental “answer to citation for accounting” set forth that the “said incompetent was restored to competency by this court on December 27th, 1935”.) The record fails to disclose the question “raised by the title company”. As stated, there is no disaffirmance of the 1932 order, and the only information on the question raised by the title company is from statement of counsel in the present appeal.

Both the 1932 and the 1935 orders are in the same proceeding; they are successive and not in conflict. On the contrary, they agree that petitioner should be restored to competency. The recital in the order sustaining the ward's objections to the answer to the citation for an accounting, that appellant was restored to competency in 1935, is not an adjudication of the invalidity of the 1932 order; it is simply a statement of a matter that was not an issue in that proceeding.

Since decrees in probate, like other judgments, are not subject to collateral attack in subsequent probate proceedings, unless the order of 1932 is void on its face, it is good in the present appeal. The judgment roll of the incompetency proceeding was not introduced, but various instruments offered at that time were marked as single exhibits in the present proceeding. These exhibits do not contain proof of all of the necessary steps; for instance, there is no proof of posting to obtain jurisdiction for the 1932 order; the issuance of a citation to the guardian does not appear, nor does it appear that such a citation was not issued. Unless the record shows the contrary, jurisdictional facts not appearing therein, including proof of service, will be presumed. “Unless the record shows affirmatively that something necessary to the jurisdiction of the court was not done, or that something which was required was done in a manner so irregular as to make it void, the presumption is that the thing concerning which the record does not speak was properly done. Thus, where the affidavit of service is merely of service of a copy on the defendant, without showing how service was made, it will be conclusively presumed to have been in the manner required by law.” 15 Cal.Jur., p. 69. If it be assumed that the record––incomplete as in the present case––shows one form of service, and the judgment recites in effect that all that was necessary to obtain jurisdiction was done, jurisdiction will be presumed against collateral attack. Sacramento Bank v. Montgomery, 146 Cal. 745, 81 P. 138; Kaufmann v. California Mining & Dredging Syndicate, 16 Cal.2d 90, 104 P.2d 1038; City of Salinas v. Luke Kow Lee, 217 Cal. 252, 18 P.2d 335. In any event petitioner and his guardian accepted and treated the 1932 order as effective. The guardian ceased to collect the petitioner's pension and he asserted his rights in that regard. The record is silent relative to the presence of the guardian at the 1932 hearing, but circumstances indicate her acquiescence therein. If there was any well–founded claim that the guardian was continuing to act as such, or retained any of the property of the ward, petitioner did not attempt legal proceedings in that regard during the life of the guardian. The necessity for the issuance of a citation in the 1932 proceeding is not an issue raised by any of the pleadings in this case and we therefore refrain from expressing an opinion thereon. We are concerned only with the validity of the 1932 order as it appears upon its face.

Under the circumstances in this case, the order of 1932 is binding in the present proceeding, and the present action against the surety is barred under the provisions of Probate Code section 1487. Cook v. Ceas, 143 Cal. 221, 77 P. 65; Keck v. Keck, 16 Cal.App.2d 521, 61 P.2d 79. However, in view of the failure of the findings to designate the particular order barred by the statute of limitations, let us assume, but not concede, the invalidity of the first order and pass to a consideration of the second, that of 1935. The facts as they relate to the second order are similar to those of Keck v. Keck, supra, and the opinion in that case, 16 Cal.App.2d pages 523, 524, 525, 526, 61 P.2d page 80, expresses the views of this court in the present proceeding:

“Manifestly these decrees, and especially the latter, operated as a removal of the guardian, and set in motion the statute of limitations prescribed in said section 1805 [now section 1487 of the Probate Code]. The trial court properly held, therefore, that the action against the sureties was barred by the provisions of said Code section.

“The negative answer to plaintiff's contention that neither of said decrees amounted to a ‘discharge or removal of the guardian,’ within the meaning of said Code section 1805, is to be found in the case of Cook v. Ceas, 143 Cal. 221, 77 P. 65, 68, wherein, in considering the meaning of the expression ‘discharge or removal of the guardian’ as used in said section 1805, the court said, in part: ‘The guardian of an insane person may be “discharged” by order of court when it appears that the guardianship is no longer necessary. Code of Civ.Proc. § 1802. Guardians of either sort may be “removed” for incapacity or mismanagement, etc. ([Code of Civ.Proc.] § 1801), and so for the same and other causes executors and administrators may be “removed.” It will thus be seen that the words “remove” and “discharge” are used indiscriminately in the statute to designate orders of court which have the effect of simply removing guardians, executors, etc., from office, without exonerating them from liability to account. To such orders section 1805 has a just and reasonable relation, and no doubt it is to them that it refers. As to the word “removal,” there can be no doubt that the reference is to an order removing the guardian from office, and, as “discharge” is sometimes used in the statute in the sense of “removal,” it is here to be construed in that sense on the principle of noscitur a sociis.’ Furthermore, and aside from the provisions of section 1802 above referred to authorizing the ‘discharge’ of the guardian when the guardianship is no longer necessary, section 253 of the Civil Code (now section 1580 of the Probate Code) provides that: ‘A guardian may be removed by the superior court for any of the following causes: * * * 8. When it is no longer proper that the ward should be under guardianship;’ and in the present case the decree entered in the guardianship proceeding on January 18, 1927, contains two distinct findings to the effect that it was no longer proper that plaintiff should be under guardianship. The first was that by virtue of the decree in the restoration proceeding entered ‘on the 19th day of April, 1926, and recorded on said 19th day of April, 1926, in Book 244 of Judgments, page 78 thereof, said Arthur W. Keck was adjudged to be fully competent and fully restored to competency, and said order has become final’; and the second was that ‘* * * this court does hereby further order, adjudge and decree that said Arthur W. Keck is fully competent and qualified to manage and care for his person and estate.’ Clearly, therefore, in view of those findings it cannot be successfully maintained, as plaintiff argues, that the court's decree based thereon, revoking the guardianship, did not operate as a removal of the guardian within the meaning of section 1805 of the Code of Civil Procedure. * * *

“Plaintiff devotes much of his brief in furtherance of an effort to differentiate the case of Cook v. Ceas, supra, from the present one, and it may be conceded that in some respects which are not at all important here the facts are dissimilar. But he has utterly failed to demonstrate wherein the legal principles declared therein, and particularly the construction placed on said section 1805, are not controlling here.”

In the present case the second order provided that the guardianship should cease and terminate upon a proper and legal accounting. In Keck v. Keck, supra, 16 Cal.App.2d page 525, 61 P.2d page 80, the court said: “Nor did the incorporation in said decree of the provision ordering an accounting and retaining jurisdiction over the guardian until the final settlement of her accounts add anything of value thereto, because, even without said provision, such jurisdiction was retained in the probate court by virtue of section 1774 of the Code of Civil Procedure (now section 1555 of the Probate Code).”

Section 1487 of the Probate Code is explicit that unless at the time of the discharge or removal of the guardian there exists a legal disability to sue, an action against sureties on a bond given by a guardian must be commenced within three years. It must be conceded that there was no legal disability on the part of petitioner. Two orders of court had declared him to be capable of managing his property and person. The guardianship had in fact ceased in 1932. If there is any doubt on that question, it must be concluded that it ceased in 1935 upon the death of the guardian. No other guardian was appointed. It would have been a futile act to decree in the 1935 order that the dead guardian be removed. “Discharge” and “remove” are sometimes used synonymously in reference to guardians “without exonerating them from liability to account”. Cook v. Ceas, supra, 143 Cal. page 229, 77 P. page 68. In Keck v. Keck, supra, 16 Cal.App.2d page 525, 61 P.2d page 80, the court said: “It is true, of course, that an adult ward may not commence his action against the sureties on his guardian's bond until there has been a settlement of the guardian's accounts showing a balance due the ward and the time for appealing from the order of settlement has elapsed. Cook v. Ceas, supra. But evidently the Legislature deemed a period of three years after the removal of the guardian as ample time within which an adult ward might secure such final accounting and commence his action; and, as pointed out in the above case, the delay on the part of the ward, following a removal of his guardian, in procuring a settlement of the guardian's accounts, does not toll the statute of limitations governing the commencement of the action against the sureties.” In the present case there was no guardian to remove. The direction in the “order restoring an incompetent to capacity”; namely, “that the guardianship of said petitioner cease and terminate upon the proper and legal accounting and discharge of the guardian and the administration of the estate of the guardian” must be read in conjunction with section 1487, requiring that in order to hold the sureties liable, the “legal accounting” should be obtained within a period of three years. This may seem to be a severe and stringent rule, particularly if there should be delay in obtaining the settlement of an account; but reviewing courts may not stretch the mandate of the legislative body of the state to conform to judicial theory of what the statute should provide.

Appellant finally contends that under the terms of the bonds they remained in full force and effect until the guardian should account for the proceeds of sales, etc., thereby continuing liability until the settlement of the guardian's account and the exoneration by full payment to the ward. The effect of such a construction would be that the surety agreed to waive any and all statutes of limitation. We are unable to so construe the bond. State Loan, etc., Co. v. Cochran, 130 Cal. 245, 62 P. 466, 600; Woollomes v. Gomes, 26 Cal.App.2d 461, 79 P.2d 728; People v. Ventura Refining Co., 204 Cal. 286, 268 P. 347, 283 P. 60.

In the present case plaintiff waited approximately seven years from the date of the first order restoring him to capacity before filing this action against the bonding company. No action for an accounting was instituted prior to the death of the guardian, although about three years intervened between the date of appellant's first restoration to competency and her demise, and more than three years between the second order of restoration and the present claim against the surety.

The judgment is affirmed.

I dissent.

The majority opinion holds: (1) that the order of October 20, 1932, restoring Maloney to competency “is binding in the present proceeding”, and that for that reason the statute of limitations provided by section 1487 of the Probate Code started to run on that date; and (2) that in any event, the statute started to run on December 27, 1935, when the second order restoring to competency was made. I disagree with both conclusions. It is my view that a statute of limitations (but not section 1487 of the Probate Code) started to run on June 22, 1937, and that this action is not barred by any statute of limitations.

There are five pertinent dates that must be kept in mind:

(1) October 20, 1932, when the first order restoring Maloney to competency was made; (2) June 27, 1935, death of former guardian; (3) December 27, 1935, when the second order restoring Maloney to competency was made; (4) June 22, 1937, when the order fixing the default of the guardian was made; and (5) August 23, 1939, when the present action was filed against the bonding company.

The majority opinion holds that the order of October 20, 1932, is binding and conclusive in this proceeding, and that the order discharging the guardian contained in that decree started the running of the statute of limitations provided by section 1487 of the Probate Code. This conclusion, in my opinion, is unsound and is completely refuted by the record. It is of some importance that respondent on this appeal does not urge this contention. It is content to rest its case on the contention that the statute started to run on December 27, 1935.

The appellant urges that the record demonstrates that the guardian, in the proceeding culminating in the order of October 20, 1932, was not properly served as required by section 1471 of the Probate Code. The judgment roll in that proceeding shows that notice was given only in compliance with section 1200 of the Probate Code––by posting and mailing a copy to the guardian. It is urged that under sections 1206, 1207 and 1471 of that Code personal service is required, and that this failure renders the judgment void. I do not find it necessary to pass upon this contention. There are other factors which demonstrate to a certainty that the 1932 order cannot be relied upon in this proceeding.

The 1935 order refers to the 1932 order and recites that “a question has been raised by a title company as to the sufficiency of the notice upon which said Order [of 1932] restoring to capacity was made”, and it is then provided that Maloney is restored to competency as of December 27, 1935. This order has long since become final. Thus, in 1935, we have the probate court considering the question as to whether the 1932 order was void because of lack of notice, and then entering an order which it had jurisdiction to enter only if the 1932 order was void. Is that not an adjudication that the 1932 order was void? All presumptions of validity must be indulged in to support the 1935 order as well as the 1932 order. The majority opinion indulges in presumptions to support the 1932 order but refuses to indulge in any presumption to support the 1935 order. It is my opinion that the 1935 order amounted to an adjudication that the 1932 order was void. Whether that 1935 adjudication is correct or incorrect is immaterial in this proceeding. The rule is well–settled that, “A determination as to whether or not a prior adjudication is res judicata, or is valid or void, is conclusive on this issue in subsequent litigation.” 2 Freeman on Judgments, 5th Ed., p. 1498, sec. 709. In Geibel v. State Bar, 14 Cal.2d 144, 148, 93 P.2d 97, 99, the rule is stated: “A determination as to the validity of a former adjudication is res judicata in a subsequent proceeding attacking it.”

There is still another reason why the 1932 order cannot stand in this proceeding. On June 22, 1937, the probate court made its order fixing the default of the guardian. That determination has long since become final, and is binding on the surety. Smith v. Fidelity & Deposit Co., 130 Cal.App. 45, 19 P.2d 1018. That order recites that letters of guardianship were issued to the named guardian on October 10, 1929, and that, “Said incompetent was restored to competency by said Court on December 27th, 1935.” Is that not an adjudication of that fact? We are thus faced with a 1932 order which purports to have restored Maloney to competency and to have discharged the guardian, and two subsequent orders in conflict therewith. The 1935 order purports to restore Maloney to competency as of that date, and the 1937 order finds that he was restored in 1935. In such a situation involving conflicting judgments, the last one is conclusive. The rule is thus stated in 15 Cal.Jur., page 57, section 143: “Generally, in case of successive and conflicting judgments in different proceedings between the same parties upon the same issues the last one is conclusive.” See, also, cases commented on in 15 Cal.Jur., p. 104, sec. 171.

It is my view that for any one of these several reasons the conclusion contained in the majority opinion that the statute of limitations started to run from the 1932 order is wrong. That order must be disregarded in this proceeding.

It is also my opinion that the peculiar statute of limitations contained in section 1487 of the Probate Code did not start to run from the date of the 1935 order. That section provides for a three–year period starting from the date when the guardian is discharged or removed by court order. I refer to that statute of limitations as “peculiar”, because it is settled in this state that an action may not be maintained on a guardian's bond against the surety until the probate court has made an order determining the amount with which the guardian is chargeable. That was one of the points decided in Cook v. Ceas, 143 Cal. 221, 77 P. 65, referred to in the majority opinion. But under section 1487 of the Probate Code the statute of limitations starts to run from the date of the court order discharging or removing the guardian. The result is that, if the guardian's account is not filed and acted upon by the court within three years of the discharge or removal of the guardian, the action against the surety is barred before it could have been commenced. The period of limitations starts to run before the cause of action accrues.

I agree with the holding in the majority opinion that under Cook v. Ceas, supra, and Keck v. Keck, 16 Cal.App.2d 521, 61 P.2d 79, the period provided by section 1487 of the Probate Code starts to run from the date of the court order removing or discharging the guardian. The point is that in December of 1935 the court made no order removing or discharging the guardian. There was no occasion to make such an order because the guardian had died in June of that year. For that reason, under the rules laid down in Cook v. Ceas, and Keck v. Keck, supra, the statute did not start to run in December of 1935.

Let us see what these two cases actually decided. In Cook v. Ceas, supra, it was held that section 1805 of the Code of Civil Procedure, now section 1487 of the Probate Code, came into operation only when the guardian is discharged or removed by court order. The precise point decided was that the peculiar statute of limitations set forth in the above code section did not apply where the guardianship terminated by reason of the ward attaining majority, or by the death of the guardian. The court noted a contrary rule in a number of jurisdictions in which it is held that the statutory period starts to run upon any termination of the guardianship, but expressly refused to follow that rule. That case beyond question establishes the rule that before the harsh provisions of section 1487 came into operation there must be a court order discharging or removing the guardian, or terminating the guardianship.

The case of Keck v. Keck, supra, did not purport to modify that rule. In fact, the court expressly reaffirmed the doctrine of Cook v. Ceas, supra. In the Keck case the plaintiff was adjudged an incompetent and his wife appointed his guardian in 1924. In 1926 the plaintiff was restored to mental competency. That decree, in addition, provided that it is “ordered, adjudged and decreed that the guardianship of the person and estate of Arthur W. Keck, as an incompetent is hereby terminated.” 16 Cal.App.2d at page 523, 61 P.2d 79. In January of 1927 an order was made in the guardianship proceeding again purporting to terminate the guardianship, and this order expressly provided that the order appointing the guardian “be, and said order is hereby revoked”. 16 Cal.App.2d at page 523, 61 P.2d 79, at page 80. This order further provided that an accounting be had and that jurisdiction over the guardian should be retained until the accounts were settled. The guardian's accounts were settled in March of 1930, showing a shortage, and the suit against the surety was not commenced until December, 1930. This was three years and eleven months after the making of the January, 1927, order, and over four years from the date of the 1926 order. It was contended the statute started to run from March of 1930 when the guardian's accounts were settled and the shortage discovered. This court in its opinion demonstrated to a certainty that this contention was unsound. The court held that either the 1926 or the January, 1927, order started the statute running. The court stated (16 Cal.App.2d at page 523, 61 P.2d 79, at page 80): “Thus it affirmatively appears that the action was commenced more than four years after the rendition of the decree of April 19, 1926, terminating the guardianship proceedings, and more than three years after the entry of the decree of January 18, 1927, in the guardianship proceedings revoking the powers of the guardian. Manifestly these decrees, and especially the latter, operated as a removal of the guardian, and set in motion the statute of limitations prescribed in said section 1805. The trial court properly held, therefore, that the action against the sureties was barred by the provisions of said Code section.” (Italics added.)

That case stands for the rule that when by court order the guardian is removed or discharged, the statute of limitations provided by section 1487 of the Probate Code comes into operation. Everything that was said in that case must be read in view of the fact that the court was there considering a court order of 1926 expressly terminating the guardianship, and a court order of 1927 expressly revoking the powers of the guardian. Both Cook v. Ceas, and Keck v. Keck, supra, recognize the rule that before section 1487 can come into operation there must be a court order discharging or removing the guardian.

The order of 1932 involved in the present case contained an order discharging the guardian. For reasons already stated, that order cannot be considered in this proceeding. The only order that is left is the order of December, 1935. That order did not discharge or remove the guardian. There was no reason for discharging or removing her. Her powers had long since terminated by death. All that the order of December, 1935, did was to restore Maloney to competency. That did not, by court order, automatically discharge or remove the guardian. The guardian's powers had terminated by operation of law by reason of the death of the guardian. Section 1555, Probate Code. Since, under the rule of Cook v. Ceas, supra, section 1487 has no application to the termination of the guardian's powers other than by court order, it follows that the section can have no application where there is no effective court order of removal or discharge before the guardian dies or the ward attains majority.

The only reference to the guardianship in the order of December of 1935 is that the guardianship shall cease and terminate upon the guardian rendering an account. As was said in Keck v. Keck, supra, such a provision is meaningless because the court would retain jurisdiction of the guardian without such provision. But holding such a provision to be without legal effect is not the same as holding that it can be distorted into an order discharging the guardian. In the Keck case, supra, the order discharged the guardian and then retained jurisdiction over him for accounting purposes. The court properly held that the order discharging the guardian was not limited by the clause retaining jurisdiction over him. But, in the present case, there is no clause discharging or removing the guardian or terminating the guardianship. If the clause in question be deleted from the order, there is no reference therein to the guardian at all.

The question still remains as to what statute of limitations is applicable, and when did it start to run? In my opinion, section 1487 of the Probate Code has no application at all because no court order removing or discharging the guardian was ever entered. Under such circumstances, as suggested in both Cook v. Ceas, supra, and Keck v. Keck, supra, the general statute of limitations of four years on a written instrument would apply. The cause of action for the purposes of this provision arose on June 22, 1937, when the order finding the guardian in default was made. The action was brought well within the statutory period.

In my opinion the judgment should be reversed.

WARD, Justice.

I concur: KNIGHT, J.