PEARSON v. STATE SOCIAL WELFARE BOARD (1959)

The State Social Welfare Board has appealed from a judgment of the superior court based upon a review of the proceedings of the board initiated by the petition of Tyson A. Pearson and Ida C. Pearson under the provisions of section 104.2 of the Welfare and Institutions Code.¹

Pursuant to section 104.3 of the Welfare and Institutions Code, the State Department of Social Welfare caused to be filed with the clerk of the superior court the record of the proceedings in the case. That record shows the following pertinent facts. Mr. and Mrs. Pearson had been receiving aid under the Old Age Security Law. Welf. & Inst.Code, § 2000 et seq. On August 26, 1957, the County of Los Angeles undertook to discontinue such payments as of August 31, 1957. The basis for such action was that the Pearsons had failed to pursue a plan for the utilization of real property owned by them. Such property consisted of desert land in the County of San Bernardino and was in three parcels having a total area of one thousand acres. The land was unimproved and there had been no development of water thereon. The property had been owned by the Pearsons for about thirty years. As of the time of the hearing before the referee for the State Social Welfare Board, the assessed value as determined by the county assessor was $2,470. While the actual market value was not established, real estate brokers, upon request of the Bureau of Public Assistance of the County of Los Angeles, had expressed opinions of such value ranging from $65 to $150 per acre. There was no evidence that the property could be leased or otherwise used by the owners for agricultural or related purposes. The appeal of the Pearsons from such termination of aid was denied by the State Social Welfare Board because the Pearsons had failed to make proper efforts to ‘utilize’ their property by selling it or a portion thereof.

The review of such action of the State Social Welfare Board by the superior court was limited to an examination of questions of law involved in the case. Welf. & Inst.Code, § 104.2. That court was, accordingly, faced with the question as to whether the Pearsons could be required to sell their property by virtue of section 2164 of the Welfare and Institutions Code which provides as follows: ‘No aid under this chapter shall be granted or paid to any person who owns real property the assessed value of which as assessed by the county assessor, less all encumbrances thereon of record, exceeds five thousand dollars ($5,000).² Real property owned but not occupied as a home by an applicant or recipient shall be utilized to provide for the needs of the applicant or recipient.’ The court held that under the applicable law the Pearsons could not be required to sell their real property. It reached the conclusion that such a sale would be inconsistent with the meaning of utilization and determined that the Pearsons were entitled to have their aid restored as of the first day of September, 1957.

The State Social Welfare Board here, as it did in the court below, relies on certain regulations promulgated by it pursuant to its statutory authority ‘to adopt rules, regulations, orders, or standards of general application which are adopted to implement, interpret, or make specific the law enforced by the department’ (Welf. & Inst.Code, § 103.1). Regulation A–133.10 defines utilization as follows:

‘Real property is utilized when it is making a reasonable contribution toward current needs, when a plan for its use supports a conclusion that it will so contribute in the immediate future, or when it is sold for an amount consistent with its current market value and the plan and terms of sale are consistent with the requirement of reasonable contribution toward current needs.

‘Sale is not a reasonable plan of utilization if:

‘1. The property is a multiple dwelling, one unit of which is used as the recipient's home, or

‘2. The net proceeds the recipient could reasonably expect to realize from the sale, together with other personal property, would not exceed $1200 (or the combined holdings of the couple so determined would not exceed $2000 if the owner is living with a spouse who is also a recipient).’

Regulation A–133.40 provides, in part, that ‘the recipient is given a reasonable period in which to initiate a plan for utilization of property not already being utilized in some acceptable way’ and that ‘an applicant or recipient who refuses to consider development of a plan for utilization becomes ineligible immediately.’

In effect, the State Social Welfare Board by its regulations has taken the position that if property not occupied as a home by the recipient of aid cannot be made to produce reasonable income, it must be sold regardless of its assessed value. But, as succinctly stated in County of Los Angeles v. State Dept. of Public Health, 158 Cal.App.2d 425, at page 437, 322 P.2d 968, at page 975 (where the pertinent authorities are carefully collected): ‘The administrative agency must confine itself to reasonable interpretation in adopting regulations for administration of its governing statute; if it goes beyond that, the legislative area has been invaded and the regulation counts for nought.’ Hence the determinative question is whether the concept of sale is embraced within the statutory requirement of section 2164 of the Welfare and Institutions Code that ‘Real property owned but not occupied as a home * * * shall be utilized to provide for the needs of the applicant or recipient.’

As stated in County of San Bernardino v. Simmons, 46 Cal.2d 394, at page 400, 296 P.2d 329, at page 332: ‘The sections which set out the amount of aid allowed and the resources which an aged person may own without being disqualified from receiving aid, delineate the financial situation of one who is considered ‘in need.” ‘An administrative officer may not make a rule or regulation that alters or enlarges the terms of a legislative enactment’ (Whitcomb Hotel, Inc. v. California Emp. Comm., 24 Cal.2d 753, 757, 151 P.2d 233, 236, 155 A.L.R. 405).

Clearly, the assessed value of the property owned by the Pearsons was within the permissible limit set forth in the first sentence of section 2164. As suggested in the opening brief filed by the Attorney General on behalf of the board: ‘It is apparent that assessed valuation is being used as the criterion because of the administrative impracticability of establishing an evaluation and a periodical re-evaluation of the market value in regard to every applicant or recipient of aid.’ If a different test of eligibility is to be devised to meet the exceptional case where market value, because of change in prospective use of land, apparently far outruns assessed value, it must come from the legislature and not from the board under the guise of regulations. Furthermore, since the first sentence of section 2164 permits an aged person to own real property of an assessed value not exceeding $5,000 without being disqualified from receiving aid, to interpret the second sentence thereof as requiring the recipient to sell the very same property, if it is not used as a home or cannot produce reasonable income, would result in an inconsistency which is to be avoided in statutory interpretation. Wemyss v. Superior Court, 38 Cal.2d 616, 241 P.2d 525; see H. S. Mann Corp. v. Moody, 144 Cal.App.2d 310, 320, 301 P.2d 28.

Moreover, as used in section 2164, the word ‘utilize’ should be given its usual and ordinary meaning. ‘Excepting when clearly otherwise intended or indicated, words in a statute should be given their ordinary meaning and receive a sensible construction in accord with the commonly understood meaning thereof’ (County of Los Angeles v. Frisbie, 19 Cal.2d 634, 642, 122 P.2d 526, 530). ‘Utilize’ is defined in Webster's New Twentieth Century Dictionary (2d ed., 1956) as follows: ‘to put to profitable account or use; to make useful; as, to utilize natural resources.’ The sale of property is not commonly considered to be the utilization of it. In fact, when one sells his property, he can no longer use it.

In the case at bar, there is no evidence in the record of any profitable use to which the barren desert land could have been put. Hence there was no feasible plan of utilization which the recipients of aid could have submitted.

In the court below, the Pearsons were awarded attorney's fees pursuant to the provision therefor in section 104.3 of the Welfare and Institutions Code. They seek reasonable attorney's fees with respect to this appeal. However, the language of the section that ‘If the decision of the court is in favor of the applicant for or recipient of aid, * * * the applicant or recipient shall be entitled to reasonable attorney's fees' is clearly limited to attorney's fees as to services in the superior court (see Burr v. Pacific Indemnity Co., 56 Cal.App.2d 352, 362, 133 P.2d 24; Lewis & Queen v. S. Edmondson & Sons, 113 Cal.App.2d 705, 709, 248 P.2d 973). Attorney's fees cannot be awarded for services on this appeal.

The judgment is affirmed.

FOOTNOTES

1.  Said section provides as follows: ‘If an applicant or recipient of aid under Chapter 1 of Part 2 of Division 2, or Division 3, or Division 5 of this code feels himself aggrieved by any decision of the State Social Welfare Board, he may within one year of the date the decision is adopted by the board file with the superior court of the county in which he resides, a petition, praying for a review of the entire proceedings in the matter, upon questions of law involved in the case. Such review, if granted, is a distinct and cumulative remedy. The State Social Welfare Board shall be the sole respondent in such proceedings.’

2.  Prior to February 4, 1957, the limitation was three thousand five hundred dollars ($3,500). Section 2165 of the same code provides: ‘No aid under this chapter shall be granted or paid to any married person, if the necessed value of the combined real property of the husband and wife, as assessed by the county assessor, less all encumbrances thereon of record, exceeds five thousand dollars ($5,000).’ This limitation was also three thousand five hundred dollars ($3,500) prior to February 4, 1957.

FORD, Justice.

SHINN, P. J., and VALLEÉ, J., concur.