Maryland Cas. Co. v. Lawing

• Decision Date: 11 April 1945
• Docket Number: 306
• Parties: MARYLAND CASUALTY CO. v. LAWING et al.
• Court: North Carolina Supreme Court

33 S.E.2d 609

225 N.C. 103

MARYLAND CASUALTY CO. v. LAWING et al.

No. 306

Supreme Court of North Carolina

April 11, 1945

This was an action by the surety on the guardian bond of defendant Mrs. Beulah Lawing for an accounting of her guardianship. It was alleged that certain disbursements shown in her accounts had been improperly charged against the estate of her wards. Plaintiff sought an adjudication thereon as affecting its contingent liability.

This case was here at Spring Term, 1943, on defendants' demurrer, and it was decided that the plaintiff had right to maintain its action on the facts alleged. 223 N.C. 8, 25 S.E.2d 183. Thereupon defendant guardian filed an amended report, and answered pleading this as a full and correct account. The guardian ad litem also answered for the infant defendants. A reference was ordered. During the hearing before the referee it was found from the evidence offered that a detailed accounting would be long and expensive and that a wholly accurate accounting was practically impossible, and that aside from certain questions of law involving the right of the guardian to charge for expenditures for upkeep of wards' properties in the state of Florida, and the right to charge for board and laundry of wards, the difference between the amended account and the report of auditors employed by plaintiff did not aggregate a large amount. Under these circumstances at the suggestion of the referee a conference was held between plaintiff's counsel, the guardian and the guardian ad litem and an agreement entered into determining the balance between guardian and each ward as of January 1, 1945, leaving open the question of guardian's liability on the controverted matters of law. Thereupon evidence was taken on the material facts upon which this agreement was based so that the court could consider said evidence on the question of approving the agreement. After considering all the evidence bearing thereon the referee and the court approved the agreement and held same binding upon the wards.

The referee found, among other things, that K. L. Lawing died intestate August 17, 1934, leaving surviving his widow Beulah Lawing and four minor children; that the property which descended to these parties consisted of certain real property in Lincolnton, North Carolina, and also certain real property in Florida; that Mrs. Lawing and her children lived a portion of the time in Florida, but retained their residence in North Carolina; that Mrs. Lawing qualified as guardian of her children in Florida March 19, 1936, and qualified as guardian of her children in North Carolina February 10, 1937, with plaintiff Casualty Company as surety on her guardian bond. Mrs. Lawing filed reports of receipts and disbursements in connection with Florida property in the Florida court having jurisdiction and had same approved by the County Judge. Mrs Lawing filed no account of her North Carolina guardianship until September 1, 1941. This action was instituted August 1942, and in September 1942 Mrs. Lawing filed an amended account correcting the former account in numerous respects referred to in the complaint. In this account she charged herself with one-third of the items for repairs and insurance on North Carolina property as well as one-third of the cost of erecting a building (she having only a dower interest therein), and credited her wards with two-thirds of the net rents received. She also charged to her wards four-fifths of the cost of repairs and up-keep of the Florida property, she having a one-fifth interest therein. Plaintiff employed expert accountants, and certain items in the account were questioned and investigated, including charges for traveling expenses between Lincolnton and Florida, and allowance to guardian for board and laundry for her wards. There were eliminated by the accountants, and consented to in the agreement above referred to, numerous items including expenditures for furniture for the home in which wards lived, and other items which were not covered by vouchers. Excluding allowance for board and laundry, the balance due each ward as of January 1, 1945, was stated. The referee found these balances were correct. The referee further found:

'9. That the referee finds as a fact that the balances are correct, and that in arriving at said balances all items have been eliminated which have been charged in any of the Florida accounts.

'10. That the referee finds that the amounts taken into consideration for improvement and repairs of Florida properties were actually spent by the guardian on said properties, that the expenditures were reasonably necessary to preserve the properties, and that the value of the properties were enhanced at least to the extent of the expenditures.

'11. That the referee finds that the amount allowed for traveling expenses, in arriving at the agreed balances, is reasonable and that the guardian spent at least said amounts in making necessary trips to attend to the properties and business of the wards in the two states.

'12. That the referee finds that the guardian allowed to the wards the amounts taken into consideration in the agreement for spending money, and that the amounts so allowed were reasonable.

'13. That the referee finds as a fact that Mrs. Lawing's own property, including that received from her husband's estate, and her income therefrom, was not sufficient in amount to enable her, from her own funds, to support herself and also to support her children in accordance with their station in life.

'14. The referee finds as a fact that the reasonable cost to Mrs Lawing of furnishing board and other living expenses not taken into consideration in the specific disbursements allowed her while the wards were in the home was at least $1.00 per day for each of them, plus 50¢ per week for laundry. * * *

'15. That the referee finds that, in view of the needs of the wards for funds for their education and the willingness of the guardian to be charged with one-third of the costs of the new building, and have only a dower interest therein, it will be beneficial to the wards to approve the agreement of the parties in that respect and the balances arrived at under the agreement have been arrived at upon said theory.

'16. That the referee finds that Mrs. Lawing's accounts have been poorly kept, but that she had not had any business experience prior to the death of her husband, and that she has acted in good faith, and has handled the estate for the best interest and advantage of her said wards. It is further found that the settlement agreed upon between the parties involves the disallowance of many items of expense claimed by Mrs. Lawing, particularly where vouchers were not available and where vouchers did not show for whose benefit the expenditures were made, and that it is for the best interest of the minor defendants that the settlement be approved and that the said settlement is more favorable to the minors than would likely result upon a full and complete accounting, and that the approval of said settlement will save expense which might fall, at least in part, upon the estates of...