In re the Guardianship of Crowell

— 440 — OPINION OF THE COURT BY PETERS, C. J. (Perry, J., dissenting in part.) This is an appeal by the former guardian of Maud K. Crowell, while a minor, from the decree of the judge of the division of domestic relations of the first judicial circuit settling the final accounts of the guardian and ordering him to forthwith pay to his former ward the sum of $1266.24, the amount found by the court to be in his hands and payable and distributable to her. This amount is made up of surcharges against the guardian, a review of the propriety of which requires first a brief statement of the history of the guardianship proceedings and certain ancillary proceedings taken by the guardian in connection therewith. The appellant was appointed the guardian of the estate of the minor upon his own application on October 2, 1911. The petition for appointment bears an indorsement in the handwriting of the applicant over what purports to be the signature of the ward, and subscribed and sworn to by her before the clerk of the supreme court, to the effect that the ward was of the age of sixteen years, six months and twenty-six days and agreed and consented to and approved the said petition. According to the peti — 441 — tion the only property of which the minor was seized and/or possessed was an undivided “one-third interest in a piece of land on the Waikiki side of Adams Lane, and more particularly described in L. C. Award Number 56 to Eliab Crimes: subject nevertheless to a deed given by said minor to Annie Mattos and C. Lai Young, dated December 9th, 1909, and recorded in Liber 326 Pages 118-319.” In the order appointing the guardian there is a finding of fact that the minor was of the age of sixteen years, six months and twenty-six days. On the day of the guardian’s appointment it appeared of record in the office of the registrar of conveyances of the Territory of Hawaii at Honolulu, that the ward had theretofore and on to wit December 9, 1909, executed a deed to Annie Mattos and 0. Lai Young (her husband joining therein in token of his consent thereto) of her undivided one-third interest in the Adams Lane property for the alleged consideration of $300 and that on May 10, 1911, C. Lai Young, one of the grantees named in said deed, by way of further security of a subsisting mortgage from himself to one Mendonca and in consideration of forbearance by the mortgagee conveyed an undivided one-sixth interest in and to the said premises subject to said deed to one Lyle A. Dickey, Esq. On the day after his appointment, to be exact, on October 3, 1911, the guardian instituted in the circuit court of the first circuit against the said O. Lai Young and the said Annie Mattos a suit in equity to cancel the said deed to them of December 9,. 1909, and for a reconveyance by them of the premises subject thereto to his ward, alleging in his bill that the said O. Lai Young and said Annie Mattos had obtained the said deed from said ward by force and by false and fraudulent representations and by undue influence for the inadequate sum of $300. In connection with the formal allegation of the represent — 442 — ative capacity of the complainant the guardian alleged that the ward was at the time of his appointment as guardian about sixteen years of age. On October 13, 1911, the respondent C. Lai Young filed his sworn answer ■ wherein he denied the allegations of fraud; alleged “That at the time of said conveyance this defendant believed that although Maud K. Crowell was a minor, being under age, the fact that she was a married woman not only put an end to the guardianship of her adopted mother but gave her power with the consent of her husband, to make a valid deed, and this conveyance was accepted in good faith. That since a recent decision of the supreme court on the effect of marriage on an infant woman, this defendant admits that said deed is voidable and that said Maud K. Crowell has a right to a reconveyance of said property;” and consented to make the conveyance prayed for, urging, however, that in equity he should be reimbursed in the sum of $167.60 expended by him in the year 1908 for the benefit of the minor in defending a lawsuit brought against her in which her title to the said land subject to said deed of December 9, 1909, had been put in question. The lawsuit referred to was the case of Gustave Rose and Helen Kruger v. Rosina Rose, Bertha Rumbel and Maud Kaikilani Chapman, a minor, an áction to quiet title, Law No. 6684, lately pending in the circuit court of the first circuit. Chapman was the ward’s maiden name. Annie Mattos made no answer to the bill of complaint. On October 14, 1911, the respondents Annie Mattos and C. Lai Young, by their deed in writing, released, quit-claimed and conveyed unto the ward for the alleged consideration of $150 all their right, title and interest in and to the premises so theretofore conveyed to them by said deed of December 9, 1909. This deed was drafted by the guardian. The accounts contain no charge against the ward for this alleged consideration. On December 28, — 443 — 1911, Lyle A. Dickey, the mortgagee in said mortgage to him of May 10, 1911, for the alleged consideration of $167.60 released and quitclaimed unto , the ward all the right, title, interest and estate acquired by him in and to said premises by said mortgage. The similarity in the consideration in this release of mortgage and the amount claimed by C. Lai Young by his answer in the equity proceedings would seem to indicate that they refer to the same subject-matter. On October 17, 1911, plaintiff discontinued the equity suit. On October 19, 1911, the guardian presented to the circuit judge in probate in the matter of the estate of said ward a petition for leave to sell the said one-third interest of his ward in the said Adams Lane premises, alleging as reasons and grounds therefor “that there is no income so far as the minor is concerned from said property in order to maintain said minor,” and “that in order to protect the interest of the minor in the above entitled described property the guardian is liable to pay to Lyle A. Dickey or C. Lai Young who had advanced money to pay such expenses amounting to about One Hundred and Sixty-seven and 60/100 ($167.60) Dollars, and that it is necessary that the above mentioned property be sold for the benefit of said minor.” Upon proceedings had before the probate judge the interest of the minor in said property was sold for $2950 from which the guardian was directed in the order confirming the sale “to pay and discharge out of said proceeds of sale the delinquent and unpaid taxes on the one-third interest of said minor in said premises, and the sum of $167.60 to L. A. Dickey in discharge of his lien thereon.” The order confirming sale was filed December 23, 1911, and the release of mortgage would indicate that the order to reimburse Lyle A. Dickey was complied with thereby. After the interest of the minor in the Adams Lane premises was revested in her — 444 — the guardian collected from former occupants of the premises as rent therefor the sum of $157.15 paid partly in cash and partly by giving credit for the amount paid by such occupants to the government on account of commutation due it from the minor upon said property. No accounts were filed by the guardian other than his final account which bears the file mark of January 4, 1922. This was filed only upon the previous demand of the attorney general acting on behalf of the minor who was then a ward of the government as a leper at Molokai. Previously, in the year 1917, at the instance of W. T. Rawlins, Esq., an attorney of this court, an accounting was privately rendered by the guardian and the balance then due the ward as claimed by him was paid over to her but this account was never accepted either by the ward or her attorney as correct. On the contrary, exception was taken thereto and further accounting demanded culminating on June 6, 1919, in a written demand of the guardian that he forthwith file his final accounts in court, in default of which action would be taken to compel compliance thereto. This demand, however, was entirely ignored and no accounts were filed until the attorney general acted as previously stated. In justice to Mr. Rawlins, it might be noted that he had in the meantime gone abroad and had also been in Washington upon territorial business and being unable to further pursue the matter had withdrawn as the ward’s attorney. For his services in the equity suit against Mattos and Lai Young the guardian charged the ward in his account with the sum of $776.15. He also charged the ward the sum of $10 for drafting the deed of reconveyance to her by Mattos and Lai Yonng. The ward was also charged with the sum of $167.60, the consideration for the release of the Dickey mortgage. For the collection of the rents he charged the ward ten per cent, of the amount collected — 445 — and for services rendered in filing his final account lie charged the ward $50. All these items were disallowed by the court and the guardian surcharged therewith. Further, due to the actions of the guardian and his dereliction in his duties as such, the court refused to allow him any commissions and charged him with the amounts thereof, credit for which he had prayed in his accounts. It is of these surcharges and the refusal of the court to allow the guardian any commissions that the guardian complains and to the review of which this appeal is directed. Why the guardian brought an action to set aside the deed to Mattos and Lai Young on the ground of fraud aud undue influence instead of taking the necessary steps to avoid the deed on the ground of infancy is not disclosed further than by the explanation of the guardian that his ward was a large girl, was married at the time and had had a child and that he feared he would be unable to prove minority. We are not impressed with this explanation. The ward’s mother was alive at the time. In an action to set aside a deed on the ground of fraud innocent subsequent grantees and mortgagees for value are protected. Not so upon avoidance by a minor of a deed executed by him during infancy. This situation would naturally influence a guardian in determining what course to pursue. The suit as filed was ill-advised. Moreover, it appears from the evidence of Mr. Eawlins that the guardian could probably have procured a reconveyance of the premises by Mattos and Lai Young upon notice of avoidance and request therefor and that legal proceedings were unnecessary. The guardian admitted that he secured his appointment primarily to recover the property for his ward for which in the event of success, by arrangement with the ward and her mother, he was to receive one-third of the value of the land. The guardian is an attor — 446 — ney at law of this court. He knew that his ward was incompetent to enter into a contract of employment of this character. He knew that his remuneration for services rendered was subject to the supervisory control of the courts. Personal interest and not the interests of his ward apparently actuated the institution of the equity suit. If Mr. Rawlins is correct, and the record certainly confirms his opinion, the guardian could have accomplished all that he did accomplish upon mere demand. Nor do we believe that the charge is made in good faith. When the guardian privately accounted to Mr. Rawlins he made a charge for this service of $295. Neither the ward nor her mother was called as a witness to corroborate his claim that a previous arrangement had been made as to the remuneration that he should receive. He denied the keeping of any books of account either personally or for his ward. He admitted that the receipt which he executed to himself for the sum of $776.15 for services rendered in this matter was made out by him shortly before filing his final accounts. The facts speak for themselves. No evidence was adduced by the guardian as to the value of his services. Mr. Rawlins testified that they were not worth anything. Had Mattos and Lai Young upon demand therefor refused to reconvey the desirability of offering the property for sale without any legal entanglements might constitute some justification for the suit. But without any prior demand for reconveyance, which, from the answer of Lai Young it must appear the latter was willing and ready to execute, the guardian precipitated this litigation actuated without question by the unconscionable contract for services which he had previously exacted from his ward and not by the interests of his ward. While a- guardian may bring suits on behalf of his ward and when suing in good faith and upon reasonable grounds is .entitled to his legal — 447 — expenses incident thereto, including a reasonable attor-. ney’s fee, it must appear that the institution of the suit and the incurment of such expenses were reasonably necessary. Where it does not appear that suit was necessary and it is apparent that the relief sought might have been obtained upon mere demand, and no demand was made, an attorney’s fee should not be allowed the guardian out of the estate of the ward. The attorney general filed written objections to the guardian’s account assigning to this particular item the objection “that it does not appear that this minor is liable for the whole of said sum.” In his written answer to the objection of the attorney general the guardian asserted: “4. Item No. 12. Dec. 22, 1911. To Bill of L. A. Lindsay (Dickey) Voucher No. 12, $162.50. The guardian had examined the claim of L. A. Dickey and was satisfied that that amount was a reasonable charge on account of the share of the minor in a land suit before.” The master to whom the accounts were referred made the following report on this item: “Item No. 12. December 22, 1911. This is for the sum of One Hundred Sixty-seven Dollars and Sixty Cents ($167.60) representing a sum of money paid by the guardian to Lyle A. Dickie” (Dickey). “One Hundred Dollars ($100.00) of this sum is represented as advances for fees, and the Sixty-seven Dollars and Sixty Cents ($67.60) is represented as costs paid on behalf of the ward by C. Lai Young and Lyle A. Dickie” (Dickey). “There is nothing in the record which shows the necessity of paying this sum, and the master recommends that until such time as it can he shown that the expenditure was necessary for the benefit of the ward ” (the italics are ours) “that the item he disallowed.” Upon the hearing this item was in issue. Evidence was adduced by the guardian in support thereof. The trial court in its discretion refused to he hound — 448 — by the decretal order of the probate judge, in the matter of the proceedings for the sale of the ward’s estate, ordering payment of this amount to Mr. Dickey and investigated the propriety of the payment anew. This it had a right to do. The decretal order of the probate judge was .not final.' The guardian was the only party before the court at that time. The minor in that proceeding was represented by the guardian. The order of payment was subject to modification or annulment by the judge of the division of domestic relations sitting as a judge in probate upon hearing of the guardian’s final accounts. Estate of D. H. Davis, 22 Haw. 436. Neither party to the proceedings below objected to the court going into the propriety of this charge and no point is made here that the trial judge abused his discretion in so doing. Upon this state of the case the question presented to this court is simply whether the record supports the decision of the trial court surcharging the guardian with the amount of this payment to Mr. Dickey. From an examination of the record in Law No. 6684 it appears that the plaintiffs claimed the entirety in fee; that Mr. Dickey appeared in behalf of the ward by her adopted mother, Annie Mattos, and filed an answer on behalf of the ward claiming an undivided one-half interest in the premises subject thereto and upon trial had, the ward prevailed and judgment was rendered in her behalf adjudging her to be the owner in fee simple of an undivided one-third interest in the premises. Plaintiffs’ costs were taxed in the sum of $67.60 and in the judgment these costs were not charged against the minor but against the other defendants. Mr. Dickey’s voucher is for $167.70 and recites that it is “for fees and costs advanced re suit Mrs. Kruger et al. vs. Maud K. Crowell et al.” Obviously the receipt affords no means of determining what part — 449 — thereof was charged by Mr. Dickey for. counsel fees and what part for costs advanced. No attempt was made by the guardian or any witness on his behalf to segregate the total amount of $167.70 and the record is entirely silent upon the question of what amount thereof should be applied to “fees” and what to “costs.” Fortunately the record in Law No. 6684 may be resorted to to determine the value of Mr. Dickey’s services as attorney for the ward therein. An examination-of that record satisfies ns that Mr. Dickey’s services were reasonably worth the sum of $100. But neither the record in the action to quiet title nor the record in the instant case furnishes any clue of the purposes of the alleged advance for costs or the reasonableness thereof unless it be in satisfaction in part of plaintiffs’ costs taxed in the law action. This leaves the sum of $67.70 unexplained. From all that appears in the record it is impossible to say that the costs were chargeable against the ward or her estate or were reasonable. It should affirmatively appear that the expenditure for costs was for the benefit of the ward or her estate. Where as here the propriety of the charge is put directly in issue and its allowance is denied “until such time as it can be shown that the expenditure was necessary for the benefit of the ward” the mere production of a receipt is not sufficient. Nor was the mere assertion of the guardian that were Mr. Dickey present he could explain the matter a substitute for competent evidence in support thereof. Moreover, the duty devolved upon the guardian to show affirmatively that the amount of these expenses was reasonable. “The guardian may employ counsel and pay counsel fees and expenses of litigation in prosecuting or defending a suit in behalf of the ward; and, while he becomes personally liable for such fees and expenses, if they are reasonable in amount and such as would have been incurred by one of ordinary prudence in — 450 — the management of his own affairs, the guardian will be entitled to an allowance therefor in his account 28 C. J., title “Guardian and Ward,” Sec. 259, p. 1151. See also Van Gieson v. Magoon, 20 Haw. 146. It is significant, however, that the amount described in the petition of the guardian for leave to sell real estate “as due Lyle A. Dickey or C. Lai Young,” the amount ordered to be paid Mr. Dickey by the order confirming the sale, the consideration on the release of the mortgage by Mr. Dickey and the amount for which the guardian prayed allowance in his accounts is in each instance the sum of $167.60 while the receipt from Mr. Dickey is but ten cents in excess thereof. Whether Mr. Dickey’s receipt refers to the same amount and the additional ten cents is a mistake we cannot say. If this amount were intended to cover the whole or any part of the costs taxed in favor of plaintiffs in the action to quiet title the ward certainly could not be charged thereAvith. Under the circumstances the surcharge of $167.60 to the extent of $67.60 thereof, on the theory that it is referable to costs, is affirmed; to the extent of $100, which we find is referable to counsel fees for services rendered by Mr. Dickey in the law action referred to, it is reversed. The charge of $10 for drafting the deed from Mattos and O. Lai Young to the ward is another instance of the unnecessary incurment of counsel fees. O. Lai Young in his answer in the equity proceeding expressed his willingness to and offered to convey. The respondent Mattos had defaulted. If the guardian were acting bona fidedly when he verified the bill in equity charging the respondents with fraud and undue influence he knew that he was entitled to a decree for reconveyance which the respondents would have been obligated to make without cost to the ward. In the face of the facts and the pleadings the ward was entitled to a reconveyance without any cost — 451 — whatever. The guardian even failed to secure from the respondents the costs accrued against the ward up to discontinuance. This matter, however, does not come within the purview of this appeal and we make no comment thereon further than to say that it is an additional reason for our feeling that under all the circumstances the dis-allowance of this item by the lower court was proper. The guardian charged the ward $200 for his services in securing the sale of the property. The court below allowed him $50 and surcharged him with the balance. No abuse of discretion appears and the action of the trial court in that regard is approved. Services for the collection of rents due the ward are under ordinary circumstances covered by the statutory commissions allowed by law. No suit was filed therefor. No complications arose necessitating the services of an attorney and in the absence of any showing of such necessity an attorney’s fee for such services was properly disallowed. Nor does the record disclose any reason why the guardian should be paid an attorney’s fee for the preparation of his final accounts. The action of the trial court is sustained without comment. The trial court also disallowed the guardian’s statutory commissions. The judge in his decision found: “The 'conduct of the guardian in this matter is deserving of censure by this court. The guardian was not only negligent in that he failed to file an accounting upon the ward attaining her majority, but he was also negligent in the performance of his duties. The interests of his ward were of secondary importance to his own interest. He profited from the assets out of all proportion to his services. Where he should have attempted to conserve and invest the assets, he on the other hand proceeded to squander and dissipate his ward’s property. This court is con — 452 — strained to condemn the guardian in the management of the property entrusted to his keeping.” These findings are amply sustained by the evidence. Commissions to the guardian were properly disallowed. W. O. Achi, Guardian (also on the brief), in person. H. R. Hewitt, Deputy Attorney General (also on the brief), for the ward. The decree appealed from is affirmed, except as to the surcharge of $167.60 which is reduced by $100. The cause is remanded to the judge of the division of domestic relations with instructions to modify the decree appealed from by substituting the sum of $1166.24 for the sum of $1266.24 wherever the latter amount appears therein.