290 N.C. 410 | N.C. | 1976
This case is a procedural morass. In the calm eye of the procedural hurricane, however, reposes the interest of the Court’s ward, Mary Augusta Lancaster, and this Court’s inescapable duty to protect it. We have, in order to exercise our supervisory powers, brought this entire matter before us for review. Our decision is to set aside both the clerk’s order striking the allegations filed by Mr. Matthews and the confirmatory decrees of the clerk and judge and to remand for further proceedings and findings in accordance with this opinion.
There is no principle more universally recognized in the law than this: Those who by reason of legal disability are unable to preserve for themselves their legal rights are deserving of having those rights assiduously protected by the courts including courts of last resort. “At common law the king, as parens patriae and fountain of justice, is the general protector of [infants and incompetents].” Sullivan v. Dunne, 198 Cal. 183, 244 P. 343, 345 (1926). In Las Siete Partidas, Part III, Title XXIII, Law XX (Spain ca. 1263 A.D., trans. Scott 1931) we read in reference to the appeals of widows and minors:
“This is the case for the reason that although the King is required to protect all the people of his country he should especially protect such as these, since that they are, as it were, unprotected, and are more destitute of advice than others.”
In England this duty of the highest legal authority to protect infants and incompetents was delegated to the Chancellor by the King. 1 W. Blackstone, Commentaries * 463. See e.g., Duke of Beaufort v. Berty, 1 Peere Williams 702 (Chancery 1721).
In this state the function of the Chancellor has been entrusted by statute to the clerk of superior court in the first instance. N. C. Gen. Stats. 33-1 et seq., 35-2 et seq.; In re Propst, 144 N.C. 562, 57 S.E. 342 (1907); Duffy v. Williams, 133 N.C. 195, 45 S.E. 548 (1903). This Court may exercise ultimate supervisory power over this function. N. C. Const., Art. IV § 12(1) ; N. C. Gen. Stat. 7A-32(b). “So careful is the law to
Ordinarily our legal system operates in an adversary mode. One incident of this mode is that only those who properly appeal from the judgment of the trial divisions can get relief in the appellate divisions. This can be a strict requirement. Henderson v. Matthews and Rogers and Newkirk and Lanier v. Henderson, 290 N.C. 87, 224 S.E. 2d 612 (1976). There are, however, exceptions. In Edwards v. Butler, 244 N.C. 205, 92 S.E. 2d 922 (1956) this Court exercised its supervisory powers to benefit a non-appealing party in an in rem action. In Elledge v. Welch, 238 N.C. 61, 76 S.E. 2d 340 (1953) there was an action brought to sell land to make assets for a decedent’s estate. One of the defendants who did not appeal was an adjudged incompetent widow. There was nothing in the record to indicate that her ostensible dower and homestead rights had been asserted by her guardian or investigated by the court. In remanding for ascertainment of whether those rights had been asserted and investigated we said that as an adjudged incompetent “her rights were committed to the care of the court .... In the exercise of our supervisory power we will assume jurisdiction on her behalf and treat errors committed against her as being before the Court and duly presented for review.” Id. at 68, 76 S.E. at 345.
Another incident of the adversary mode is that only one with a “sufficient stake in an otherwise justiciable controversy” has “standing to sue.” Sierra Club v. Morton, 405 U.S. 727, 731-732 (1972). Yet there are instances in our law where any person is given a right to proceed, e.g., in qui tarn actions for a statutory penalty, N. C. Gen. Stat. 51-7, or in making application for the writ of habeas corpus, N. C. Gen. Stat. 17-5 (“Application . . . may be made ... by any person in his behalf”). The reason for this departure from normal requirements of “standing” is that the “aggrieved party” is either too diffuse a class or is helpless to protect himself.
Ordinarily the one who acts on behalf of an incompetent is his guardian, trustee, or guardian ad litem and the incompetent, being under a disability, is not accorded “standing.” But where the complaint is that the guardian himself is acting either wickedly, incompetently or in ignorance of the facts, the
“While . . . [an incompetent] must be represented, in all judicial proceedings, by the guardian, it is entirely proper, either in his own person or through any friend, for him to call attention to any matter then pending and under the control of the Court, to the end that it may be investigated and his rights protected.” (Emphasis supplied.)
Because of the failure to heed this principle the clerk and the judge below incorrectly focused their attention on the “standing” of Mr. Matthews; and the Court of Appeals, on the question of whether an appeal had properly been perfected by one with “standing” to do so.
It was error for the clerk to strike the allegations filed by Mr. Matthews. With regard to the purported appeal to the Court of Appeals Matthews asserted that he had tendered a proper case on appeal but that the clerk refused to file it. In this circumstance the proper action, if an appeal was required, was not dismissal, but rather issuance of the writ of certiorari to the end that the trial judge settle the case. Lindsay v. Brawley, 226 N.C. 468, 38 S.E. 2d 528 (1946); Chozen Confections, Inc. v. Johnson, 220 N.C. 432, 17 S.E. 2d 505 (1941).
So far as the record shows scant attention was paid at the outset to the factual basis for the proposed sale presented in the general guardian’s petition. The original order of the clerk was entered one day after the original petition was filed and simply repeated the allegations of the petition itself. In a similar case this Court remarked that a two day interlude between petition and order indicated a “degree of haste not consistent with that investigation and consideration usual and proper to be had in such proceedings.” In re Propst, supra.
If scant attention was paid to the initial factual issues in the petition, no attention whatever so far as the record shows was given to the facially valid objections to the sale thereafter raised. Mr. Matthews, whatever his motives, succeeded in raising serious questions regarding the sale which, according to
On July 30, 1974, the guardian ad litem filed a “Request for Hearing” asking that the court “after proper notice to all parties hear evidence on the matters and things raised by the pleadings in this cause and enter such orders as will best protect the interest of the said Mary Augusta Lancaster.” Pursuant to this request the clerk served notice on the general guardian with a copy to Mr. Matthews that he would “hold a hearing and receive evidence on all issues raised by the pleadings in this cause.” At that point in the proceeding the major issues which had been raised were: (1) How will it materially promote the interest of the incompetent to sell 285 acres of land with an apparent fair market value of $158,000.00 when the land is unencumbered and producing income which when added to other income is within a few hundred dollars a year of meeting the incompetent’s regularly recurring expenses? (We note that 31.3% of the incompetent’s expenses were for administrative and legal fees. If this inordinately high sum could have been trimmed only slightly she would have had more than enough income to meet her expenses.) (2) Is the six thousand dollar debt a valid claim against the incompetent ? If so, need it be paid forthwith ? (3) Why sell land worth $158,000.00 when the sale of other smaller tracts or the negotiation of loans secured by the property may give the estate the liquidity it may need? (4) What is the federal and state income tax impact upon the proposed sale? Could this impact be lessened by a sale of a,smaller tract or perhaps a sale where the purchase price is paid in installments ?
At the hearing held on October 23, 1974, these issues according to th& record were never addressed, investigated, or answered. It was the duty of the clerk to do so. It is conceivable that answers to all of these questions will demonstrate the advisability and even the necessity for'this sale. It may be that the guardians, the clerk and the judge all have knowledge concerning these matters which impelled them to proceed with the sale. This knowledge, however, does not properly substitute for competent evidence and findings in the record. Butler v. Weisler, 23 N.C. App. 233, 208 S.E. 2d 905 (1974); cf. McLean v. Breese, 109 N.C. 564, 13 S.E. 910 (1891).
General Statute 33-31 allows a guardian to apply for a sale of any part of his ward’s estate by filing a verified petition showing that “the interest of the ward would be materially promoted by the sale . . . . ” The truth of the petition must be “ascertained by satisfactory proof.” The decree of sale must specify the “terms [of sale] as may be most advantageous to the interest of the ward.”
The “satisfactory proof” required under this statute must be some proof in addition to the guardian’s petition and must show the necessity for the proposed sale. In Harrison v. Bradley, 40 N.C. 136, 144 (1847), Chief Justice Ruffin said:
“The Court cannot forbear expressing a decided disapprobation of the loose and mischievous practice, adopted in this case, of decreeing the sale of an infant’s land, upon ex parte affidavits offered to the Court, without any reference to ascertain the necessity and propriety of the sale, and the value of the property, so as to compare the price with it. The Court ought not act on mere opinions of the guardian or witnesses, but the material facts ought to be ascertained and put upon the record, either by the report of the master or the finding of an issue . . . . ” (Emphasis supplied.)
In In re Propst, supra, the petition for sale was verified only two days before the order of sale. There were no affidavits by disinterested persons regarding the necessity of the sale. This Court said:
“This is unusual. The statute [N. C. Gen. Stat. 33-31] contemplates that, in addition to the verified petition of the guardian, the Clerk shall require other satisfactory proof of the truth of the matter alleged. The Judge, exercising the functions of a Chancellor, where sales of this character were made pursuant to proceedings in courts of equity, always referred the petition to the Clerk and Master, who*428 took evidence and reported his conclusions to the Court. It is usual, since these large and important equitable functions are conferred upon the clerks, to accompany the petition with affidavits showing the necessity for the sale. The practice is to be commended and should not, without good cause, be departed from. Id., 57 S.E. at 844. (Emphasis supplied.)
General Statute 33-33 provides for paying debts of or demands on wards. The guardian is authorized to petition the clerk for “an order to sell so much of the personal or real estate as may be sufficient to discharge such debt or demand . . . . ” (Emphasis supplied.) The order of sale must “particularly specify what property is to be sold and the terms of the sale . . . . ” Under this section the clerk must first ascertain that there is a debt due. Only that specified part of the land necessary to pay off the debt is to be ordered sold. Spruill v. Davenport, 48 N.C. 42 (1855); Leary v. Fletcher, 23 N.C. 259 (1840).
General Statute 35-10 authorizes a sale when upon report of the guardian to the clerk it appears that the “personal estate” of a “mental defective, inebriate or mentally disordered person . . . has been exhausted, or is insufficient for his support” and when such person “is likely to become chargeable on the county.” The order of sale “shall specify particularly the property thus to be disposed of . . . and shall be entered at length on the records of the court . . . . ”
General Statute 35-11 applies when “it appears to the clerk, upon the petition of the guardian of any mental defective, inebriate or mentally disordered person, that a sale or mortgage of any part of his real or personal estate is necessary for his maintenance, or for the discharge of debts unavoidably incurred for his maintenance ... or when the clerk is satisfied that the interest of . . . [such] person would be materially and essentially promoted by the sale . ...” As used in General Statutes 35-10 and 35-11 “mental disorder” is defined by General Statute 35-1.1.
Under all four statutes the procedure to be followed is that provided by General Statute 1-339.1 et seq. for judicial sales.
The proceeding before us has the flavor of all four statutes. In the general guardian’s original petition he alleges the per
On remand it should be determined which statute or statutes authorize the proceedings. Before confirming the sale, both the clerk and the judge should be satisfied the statutory requirements have been followed and that the record so reflects. Defects, if any, which may be found to exist in the initial order of sale based on failure to observe applicable statutory requirements may be cured by further proceedings prior to confirmation.
Because we, too, must assiduously protect the interest of the incompetent and because this sale may well materially promote her interest or be necessary to pay valid past, present and reasonably anticipated future claims against her, and may satisfy statutory requirements we do not set aside the order of sale. Rather we set aside the clerk’s and the judge’s confirmation of the sale.
Confirmation of a judicial sale is a matter within the discretion of the court. This Court said in Harrell v. Blythe, 140 N.C. 415, 416-17, 53 S.E. 232 (1906) :
“Where land is sold under a decree of court, the purchaser acquires no independent right. He is regarded as a mere preferred proposer until confirmation, which is the judicial sanction or the acceptance of the court, and until it is obtained, the bargain is not complete .... Sales of this character are only conditional and are not complete until they have been reported to, and confirmed by the court. The bidder cannot complain of this rule, for he*430 makes his offer to buy with the understanding that the whole matter is entirely under the control of the court and that his bid may be rejected and the sale set aside if, in the exercise of its sound discretion, the court should think proper to do so ... . Rorer, in his work on Judicial Sales, sections 122 and 124, says that while the court will have a proper regard to the interest of the parties and the stability of judicial sales, it has a broad discretion in the approval or disapproval of a sale made under its decree; and, in section 126, he further says that the court is clothed with an unlimited discretion to confirm a sale or not, as may seem wise and just. Confirmation is consent, and, the court being the vendor, it may consent or not in its discretion.”
At the time of confirmation it should appear from the record to the confirming authority that the sale will materially promote the interest of the incompetent, or be necessary to pay valid claims against her or for her regular maintenance. If from the record this determination cannot reasonably be made, confirmation should be withheld. “ [A] fter a sale it ought to appear in like manner to be for the benefit of the infant to confirm it, otherwise there is great danger of imposition on the Court and much injury to infants.” Harrison v. Bradley, supra.
When the sale came on for confirmation before the clerk and the judge this record was replete with unanswered factual issues and legal questions which we already have noted. The clerk and judge should have resolved these issues and questions before they exercised their discretion in favor of confirmation, and the record should so reflect.
We, therefore, remand the case to the Franklin County Superior Court to this end: The clerk being scrupulous to observe applicable statutory requirements shall hear such competent evidence as may be offered by the general guardian, the guardian ad litem, and special counsel for the incompetent, who shall continue to act in this capacity, on the issues which have been so far raised, shall make findings based thereon, and shall recite the kind of proof he considered in making his findings. Based upon these findings the clerk shall then determine whether to confirm the sale. The matter shall then come again before either the resident judge or a judge of superior court holding the courts of the district in order that he may determine whether on the record then before him to confirm the sale.
Remanded.