27 Haw. 343 | Haw. | 1923
This is an appeal from an order of the circuit judge, presiding over the division of domestic relations of the first circuit court, approving the account of C. F. Peterson, guardian of the persons and estates of the above named minors.
From the record sent np, it appears that prior to the appointment of the present guardian one T. P. Harris had been appointed guardian of the minors but had never qualified as such. The appointment of the present guardian, who is an attorney at law, on October 7, 1920, was upon the petition of said T. P. Harris. The guardian having filed no annual account, the father of the minors on May 12, 1922, filed with the circuit judge a motion that •the guardian be ordered to file his account. On May 18, 1922, the guardian filed his first account covering the period from October 7, 1920, to October 25, 1921. Upon the petition of the father of the minors a “next friend” of the minors was appointed who filed objections to the guardian’s account. Because of these objections the circuit judge referred the account to a master for examina
The master in Ms report recommended that the guardian be surcharged with several charges made by Mm against the minors’ estate. Upon exceptions taken by the guardian to the master’s report a hearing was had and evidence taken, after which the circuit judge disregarded the recommendation of the master and made an order approving the account of the guardian in toto, from which order the next friend of the minors has perfected this appeal.
The first item in the account objected to by the next friend, is a charge of $25 made by the guardian for his services as an attorney renderéd to one of the minors.
It appears from the evidence that Arthur Trask, one of the minors, had been arrested at the instigation of one Mokumaia and held at the police station. No formal charge against- the minor being laid, he was, after about twenty-three hours detention, released. The minor consulted his guardian upon the advisability of bringing an action for false imprisonment against Mokumaia and for that purpose went several times to the office of the guardian, on one or more of these occasions being accompanied by his father and on another by his aunt, Mrs. Sallie Trask Erickson, who is the next friend of the minors in this proceeding.
The guardian made inquiry at the police station as to the cause of the arrest. He also consulted the records of the tax department and registrar’s office with the view of ascertaining what property Mokumaia had, after which he informed the minor that, although the minor had a- good cáuse of action, there was no use of suing Mokumaia
The master, in reporting on this charge of $25, found that the services rendered were of a purely legal nature and that the guardian was therefore entitled to make a charge for the same. From the evidence we cannot say that the services performed by Mr. Peterson in this matter were such as could be expected from a guardian. It may be true that the minor believed that he had a right to consult with his guardian on such a matter as this without being required to pay an attorney’s fee, nevertheless, the question as to whether a person has or has not a right of action against another person is one that cannot usually be answered by a layman, and in this case the guardian was perhaps,' strictly speaking, authorized to make a reasonable charge for his services. It might be remarked, however, that had the guardian earlier in
The next charge objected to is a charge of $10 made by the guardian against the estate of his wards under date of June 15, 1922, for “services, adjustment old taxes 1920.” The master recommended that the guardian be surcharged with this item.
In explanation of this charge the guardian testified that certain taxes against his wards’ estate had become delinquent before he became guardian, that his predecessor had not attended to the payment thereof, and that the present guardian did not know about these delinquent taxes until the matter was called to his attention after the institution of these present proceedings. After the matter was thus called to his attention, the guardian, according to his testimony, “made a very good settlement on behalf of the minors” with the tax authorities. The guardian further testified in regard to this charge for adjusting these taxes as follows: “shortly after this matter was brought up in May I was informed by the father when I went to see him about the road deal with the government that he was very sore because I had not paid the taxes on the land. He said they were delinquent. I then looked up the records in the tax office to see if there was any taxes due and found that there were taxes due before my time, but which had nothing to do with the minors estate. * * * And were then delinquent. I found that the government had taxed these minors on the land with penalties amounting to about forty-three dollars and a half for a period which was before my time. I found also that they had taxes against the mother for the years 1918 and 1919 which, of course, I had nothing to do with.
It is contended on behalf of the guardian that for his services as above outlined in settling the delinquent taxes of his wards’ estate he is entitled to an attorney’s fee. In other words, the contention of the guardian is that the
In many jurisdictions a guardian who is a lawyer by profession is not allowed to charge attorney’s fees for services rendered to his ward. This is upon the theory that it would be a dangerous practice to allow a guardian to create work and fees for himself at the expense of his ward’s estate. There is much to be said in favor of such a rule but, be that as it may, it has long been the rule in this jurisdiction to allow to attorneys who are guardians or administrators, in proper- cases, reasonable attorney’s fees for professional services rendered for the benefit of the ward. See Guardianship R. P. Humeku, 15 Haw. 394; Estate of Kalua Kapukini, 14 Haw. 204; Magoon v. Brash, et al., 11 Haw. 204. In the Matter of the Estate of Hiram Maikai, 3 Haw. 522, this court said: “The court would alloAv professional charges for services rendered to the estate in all cases where such services are necessary; and would allow them to the administrator if he should be á lawyer, whensoever they would allow them to an administrator who is not a lawyer. With regard to such allowances every case must stand by itself and no fixed and invariable rule can be laid down.”
One of the chief duties of a guardian is to settle accounts in favor of and against the estate of his wards and in the case at bar it was clearly the duty of the guardian to pay all taxes legally assessed against the estate of his wards. It is a matter of common knowledge that by far the greater majority of persons pay and settle their taxes without seeking legal advice. It is also a matter of common knowledge that persons are entitled to certain exemptions and deductions from taxation. While
The ruling of the circuit court is reversed and the guardian is surcharged with the sum of $10.
The supplemental account of the guardian under the date of June 10, 1922, contains a charge against the minors of $50, “services to date re change of road Moanalua”. This charge is resisted by the next friend. In recommending that this charge be not allowed, the master in his report said: “In explanation thereof the Master says that the City and County of Honolulu has lately widened the junction of the Puuloa and HonoluluSchofield roads in such a manner as to leave a small strip of land just in front of a portion of the minors’ realty. This strip is worth, at a conservative estimate, $20.00. The Guardian has assessed a fee for advice given in connection with the acquisition by the wards of the strip and other legal services relating thereto of $50.00. This is properly the Guardian’s duty in any event and the Master therefore recommends a surcharge in that regard.” The circuit judge did not, however, adopt this recommendation of the master but allowed the charge without comment.
It appears from the inventory filed with the supplemental account of the guardian that the only real property owned by the minors is a piece of land at Moanalua, the area of which is 10,360 square feet, the value of which is not stated. On a portion of this land ,is a grocery store which yields a rental of $15 per month. The home of the minors adjoins this store. It is contended by the guardian that the service performed by him in regard to the widening of the road in front of this property “was of a legal nature and one that could not have been performed by a layman; that it involved examination of the title and of the statutes with reference to the right of the Government to take land for road purposes and of the rights of
In support of his contention that he was justified in making this charge of $50 the guardian testified that the matter of widening the road at Moanalua had been “hanging fire for over a year”. The government had been trying to get the road straightened and widened. The attorneys of the Damon estate which owned adjacent property discussed the matter several times with the guardian and the guardian “took the matter up” with the county attorney’s department. The government’s original plan was to move the road mauka of the minors’ land so that they would have been shut off from the new road. This woüld have taken some of the minors’ property. Then the government changed that plan and was going to put the road makai instead of mauka. This would have taken away the minors’ frontage to the road. “That was tentatively agreed- to. The attorneys were to apply to this court to purchase this land the government would need for the new road and the minors were to exchange with the Damon Trustees for another piece by which we were to give Mr: Damon an equal area in the back somewhere for the frontage that they were going to ’ get.” According to the guardian, he drew up a petition to the court to make this exchange.' This petition, however, was
It seems incredible to us that the guardian should insist that for his services in this matter he should be paid $50 or any other sum. The only work that savors of a legal nature in the whole transaction was the drawing up and filing of a petition, which on the face of it was unnecessary. This petition was filed on June 20, 1922, while the accounts of the guardian were being investigated. From the petition it appears that the government was willing to convey to the minors the abandoned strip in question containing an area of 233 square feet for the pitiful sum of $8. The guardian must have been aware that he required no leave of court to make this petty purchase and that it was his plain duty to accept from the Territory a deed for the abandoned strip. In our opinion the conduct of the guardian in attempting to charge his client with a fee of $50 for his services in this matter is most reprehensible and it is difficult to understand why the circuit judge should have ignored the master’s recommendation and sanctioned such exploitation of the minors’ estate. The guardian’s trust is one of obligation and duty and not of speculation and profit, and the courts treat with suspicion all acts and circumstances evincing a disposition on the guardian’s part to derive undue advantage from the position he occupies. Charges for services claimed to have been rendered by a guardian for his ward’s estate for .which extra compensation is claimed should always be closeiy scrutinized, for in such cases there is too much opportunity and danger for abuse
Excerpts from the following cases show how this court in times past has frowned upon conduct similar to that of the guardian in the present case.
“The practice of regarding estates coming before courts for review or settlement to be the legitimate prey of all who come in contact therewith should never for one*355 moment be tolerated in this Territory.” Notley v. Brown, 16 Haw. 575, 579.
“We are unable to escape the conclusion that the chief object of the administration proceedings in this estate has been the accumulation of attorneys’ fees.” Estate of Kamaipiialii, 19 Haw. 163, 166.
“Upon all possible occasions this court has endeavored to give notice that it will not tolerate the practice of treating estates of deceased persons as fair game for the incurring of unnecessary or excessive legal expenditures.” Ibid. p. 166.
The guardian is surcharged with this item of $50.
Another criticism of the guardian’s actions reported by the master and passed unnoticed by the circuit judge is the manner in which the guardian has invested the funds of his wards’ estate. It is the contention of the next friend that the lands on which the guardian holds a mortgage are not of sufficient value as security for the loan made by the guardian. It is furthermore contended that the guardian has mingled his wards’ funds, with funds of his own or of other clients.
According to the first annual account of the guardian, the guardian had loaned to W. K. Yuen $900 of the minors’ funds on a mortgage of a piece of land in Honolulu, also $150 to Sarah N. Kali on a mortgage of a piece of land in Kohala. This latter mortgage was never placed of record, neither has the guardian offered any satisfactory explanation as to why funds of his wards should have been invested in a mortgage that had not been recorded from the date of its execution on October 25, 1920, up to the filing of the first annual account. In the objections of the next friend to the first annual account it was also set forth that the mortgage to W. K. Yuen to secure a loan of $900 was not placed of record until five months after its execution. The guardian has given no explanation as
As to the loan to W. K. Yuen, the land upon which this loan was made consists of a parcel of land about 200 x 100 feet in area, and was used by a Chinese as a vegetable garden. It was assessed for taxation purposes at $915. According to the gnardian, this land had originally belonged to a man named Harbottle with whom Mr. Peterson had business relations. Through the activities of Mr. Peterson, this land was conveyed to W. K. Yuen with whom Mr. Peterson also appears to have had intimate relations in the matter of buying and selling real estate. At the hearing before the circuit judge both Mr. Peterson and Yuen, the grantee of the land, testified that they could not remember the'price paid by Yuen to Harbottle for the land, but, as appears by the deed as recorded, the purchase price was $600. On October 14, 1920, W. K. Yuen conveyed this land to C. F. Peterson, “Trustee”, by way of mortgage, to secure a loan of $2500. Yuen in testifying at the hearing, said that he remembered signing such a mortgage but did not remember the amount thereof, — that he left all of such matters to Mr. Peterson. The guardian’s testimony was to the effect that at the time he made this loan and took this mortgage he had in hand $900 belonging to the minors; that investments of such small sums are frequently difficult to secure, and that he therefore put this sum of $900 into the Yuen mortgage, the balance of the mortgage loan being made up from funds belonging to other clients of the guardian. As already stated, this mortgage was taken in the name of C. F. Peterson, “Trustee”. No declaration of trust concerning the interest that the minors had in this mortgage was made or placed of record by the guardian. The first annual account indicated that $900 of the minors’ money had been invested in a loan to Yuen, secured by mortgage
As to whether this land is of sufficient value to warrant a loan of $2000 it is difficult from tbe evidence to say. Although, as has been already stated, the land is
The failure of the guardian to file his account in due season. Although the guardian was appointed on Octo.ber 7, 1920, he filed no account until May 18, 1922, some seven months after the time on which by law it should have been filed, and then only because of the activities of the attorney of the next friend of the minors. It appears from the affidavit of H. T. Mills, the attorney for the next friend, that he on April 5, 1922, in writing requested the guardian to file his account and that after said date Mr. Mills several times requested the guardian to file his account. This is not denied by the guardian. The only excuse given by the guardian for his delinquency in filing his account in due season was that “the matter simply slipped me. I didn’t realize the year had gone by until Mr. Mills had called my attention to it.” The guardian further testified that after Mr. Mills called his attention to the matter he had been so busy that he had not been able to attend to it. Counsel for the guardian argues that the failure to file the account at the proper time was pure inadvertence on the part of the guardian and that inasmuch as no harm has resulted to the estate of the minors by reason of the delay in filing-the account, no penalty should be visited upon the guardian for such delay. With this contention we cannot agree. Had the guardian voluntarily filed his account when he did, albeit some seven months late, it might perhaps be said that such delay was a matter of mere inadvertence for which the
Oct. 14,1920, Loan W. K. Yuen on real estate mortgage, 8%..........$900.00
Oct. 25) 1920, Loan Sarah N. Kali on real estate mortgage, 8%......... 150.00
Guardian’s commissions:
2|% on $1056.90 (principal) at inception of trust,................... 26.42
*361 10% on $84.00 (income)............... 8.40
June 27, 1921, Cash paid for steamer fare (Arthur Trask) .................... 15.00
In other words,, the entire account consisted of six items of receipt and five items of disbursement, the making up and filing of which could have occupied but a few moments of the guardian’s time, and yet the guardian’s only excuse for his neglect to file such account when thereto rightfully requested was that he was too busy. Had these accounts been filed in proper season the unbusinesslike and unwarranted manner in which the guardian had performed his duties as guardian would have sooner been discovered and remedied. Guardians are allowed commissions for the faithful performance of their duties. In the case at bar we are of the opinion that the guardian has been so neglectful of his duties as not to be entitled to the commissions usually allowed to guardians and he is surcharged with all of the commissions charged in his account.
One of the errors assigned by the appellant is that the circuit judge erred in continuing Mr. Peterson as guardian.
In her objections to the supplemental account of the guardian the next friend said that she “upon a hearing of the matters and things now before this Honorable Court in reference to the acts and doings of said guardian, will move for the discharge of said guardian from his appointment as such.” Such motion does not, however, appear to have ever been made. In the opening brief on behalf of appellant the removal of the guardian is not urged, consequently the brief of the guardian is also silent in that respect. In her reply brief the next friend briefly urged that the conduct of the guardian as shown by the evidence and the record had been such as to call for his removal.
Eeprehensible as we feel that the conduct of the guard
A decree surcharging the guardian for the items mentioned in the foregoing opinion will be signed upon presentation.