Anderson v. Linck (In re Horn's Estates)

• Decision Date: 10 June 1938
• Docket Number: No. 86.,86.
• Parties: In re HORN'S ESTATES. ANDERSON et al. v. LINCK et al.
• Court: Michigan Supreme Court

285 Mich. 145

280 N.W. 142

In re HORN'S ESTATES.

ANDERSON et al.

v.LINCK et al.

No. 86.

Supreme Court of Michigan.

June 10, 1938.

Proceeding in the matter of the Estates of Catherine Horn, Ruth Horn, and Patricia Horn, minors, wherein Catherine Horn Anderson and others filed objections to the second supplemental account filed by Sylvester J. Linck, guardian, and another. From the order entered, the objecting parties appeal, and the guardian cross-appeals.

Order modified, and, as so modified, affirmed.Appeal from Circuit Court, Muskegon County; Joseph F. sanford, judge.

Argued before the Entire Bench, except McALLISTER, J.

George C. Brown, of Grand Rapids, for appellants Catherine Horn Anderson and Ruth Horn.

Sigmund S. Zamierowski, of Grand Rapids, for appellant Clare J. Hall, guardian ad litem.

Leo C. Lillie, of Grand Haven, for appellee Sylvester J. Linck.

CHANDLER, Justice.

On October 30, 1924, Sylvester J. Linck, appellee and cross-appellant, was duly appointed by the Probate Court for the County of Muskegon as guardian of the estates of Catherine, Ruth and Patricia Horn, minors, aged, respectively, 10, 8 and 6 years. The estate in question was an inheritance from the mother of said minors, who had recently died.

The estate consisted of personalty in the amount of $5,098.13, and real estate appraised at $6,300. The real estate was sold under order of the probate court shortly after Mr. Linck's appointment and a real estate mortgage taken in payment, the amount of said mortgage being $6,300, and which is known in these proceedings as the Shultz mortgage. No question is raised as to the value of this security. In addition to the property inherited from the mother, the guardian received insurance from the United States Veterans' Administration upon a $10,000 government policy which was in force at the time of the death of the minors' father whose death preceded that of the mother. Monthly payments were made on this policy to the guardian in the sum of $97.48 from the time of his appointment until 1933, and thereafter in smaller amounts.

These funds, together with all others received, were deposited in the bank in the name of ‘Sylvester J. Linck, as guardian for Catherine, Ruth and Patricia Horn’, and all investments made by said guardian, such as notes and mortgages, were likewise taken in his name as guardian for the minors.The three children were duly enrolled in the Sacred Heart Academy at Grand Rapids, where they received suitable support and education consistent with the value and income of the estate. Statements were rendered the guardian periodically by the academy covering the expenses of the three children for board, room, clothes, tuition, spending money and miscellaneous expenses in one bill, and the guardian paid the bill in one check on his guardian account. The guardian never separated the items in each bill or charged them separately to a particular ward until he made a final account for Catherine in July, 1936. The accounts, however, were kept in such a way that the guardian was able to determine, by comparing his account with the itemized bills rendered to him, the amount with which each ward should be charged.

He filed his first annual account on June 1, 1926, and continued to file annual accounts up to and including April 29, 1936, filing in all eleven such accounts. On October 3, 1936, after Catherine became of age, he filed what is termed a ‘second supplemental account, 1936’.

It appears from the record that in June, 1936, prior to the filing by the guardian of his second supplemental account, the appellant, Catherine Horn Anderson, commenced proceedings in the Circuit Court for the County of Kent, in Chancery, against the guardian and Ruth and Patricia Horn, objecting to the accounts of the guardian and praying for an accounting of the affairs by him. This bill of complaint was dismissed, whereupon said appellant took an appeal to this court, which later, by stipulation of counsel for the respective parties, was dismissed.

After the dismissal of the above mentioned appeal, the appellant, Catherine Horn Anderson, filed objections in the probate court for the County of Muskegon to the second supplemental account filed by the guardian, wherein strenuous objections were made to many items in the account, only a few of which will be here noted. She claims that the guardian had not accounted for all monies received by him, and that unauthorized and unjustified disbursements had been made; that many poor investments of trust funds had been made which were wholly unauthorized and which were not made in good faith, and at the time of the hearing had but little, if any, value; that the guardian had not kept the funds of each ward separate but had treated the funds as one fund in contravention of the law; that all funds received by him had not been accounted for, and challenged the good faith and integrity of the guardian during the course of his 12 years of guardianship in which he handled upwards of $32,000 accruing to the estate.

No useful purpose will be served by going into details in connection with all the numerous objections raised by the appellant. Upon the hearing in the probate court the supplemental account of the guardian as filed was allowed. An appeal was taken to the circuit where a full hearing was had on the supplemental account of the guardian and the order of the probate court allowing said account was affirmed, except in one particular, viz.: the probate court had allowed the guardian an attorney's fee of $244 for monies paid to his attorney in conformity with an order of said court authorizing the employment of an attorney for the guardian. This item was disallowed, and it is from that portion of the order that the guardian files his cross appeal.

We will now direct our attention to the question involved pertaining to the annual accounts.

During the entire guardianship of Mr. Linck, he submitted annual accounts, notices of hearing on which were duly given, and which were regularly approved by the court. In attacking Mr. Linck's stewardship, appellant attempted to go outside the grounds stated for appeal from the probate court to the circuit court and seeks to justify such action on the theory that nothing in this case is res judicata; that the annual accounts filed were not necessary as a matter of law; that they did not furnish sufficient information; that assuming the annual accounts became res judicata, when the guardian filed supplemental accounts, in which the entire guardianship was represented and the investments broken down, appellee waived the conclusiveness of the annual accounts and opened his entire guardianship to inquiry and adjudication.

The statute, 3 Comp.Laws, 1929, Sec. 15775 (23 Mich.Stat.Ann. Sec. 27.2940), providing that every guardian shall give bond, with surety or sureties, to the Judge of Probate on condition (3) that an account be rendered within one year after his appointment, and at least once each year thereafter, first appears as Act No. 314, chap. 58, § 13, Pub.Acts 1915 (3 Comp.Laws, 1915, Sec. 13962). Hence, it can be said that the annual accounts filed were required by law during the entire period that this guardianship was in existence.

The requirement of an annual account is not deemed an idle ceremony, but an order of the probate court allowing an annual account which is not appealed from is held to be conclusive. The rule is clearly stated in Nowland v. Rice's Estate, 138 Mich. 146, 101 N.W. 214, in these words (page 215):

‘The order of the probate court allowing the first account, being unappealed from, is conclusive upon appellant. If he desired to dispute any of the findings of the court upon the items of that account, he should then have appealed. He cannot reopen it 12 years after it has been adjudicated, upon the assumption that it is erroneous. Parties interested in the estate had a right to assume that the account as allowed was correct, and to rely upon the order of the court as final.'

However, where there is fraud, or breach of trust, or concealment of assets, or failure to give proper notice of the hearing, an allowance of an annual account is not res judicata. MacKenzie v. Union Guardian Trust Co., 262 Mich. 563, 247 N.W. 914;Baxter v. Union Industrial Trust & Savings Bank, 273 Mich. 642, 263 N.W. 762;Porter v. Long, 124 Mich. 584, 83 N.W. 601.

It would therefore appear that appellant cannot challenge the first eight annual accounts at this late stage of the proceedings, particularly in view of the fact that in objecting to the annual accounts appellant referred only to the ninth, tenth and eleventh annual accounts together with the supplemental and second supplemental account as questionable in her ‘reasons and grounds for appeal from the probate court to the circuit court.'

Appellant's contention that the conclusiveness of these accounts was waived by the filing of the supplemental accounts is not tenable. The investments...