88 PACIFIC REPORTER, VOL. 22. civil action, as in any other case of fraud, belonged to the estate, and not to himself. | acts ultra vires, he is guilty of a fraud, for It being a business which he was neither which he may be proceeded against in a required nor authorized by law to conduct on behalf of the estate, if he did do it with the property and funds of the estate, and there was loss, the loss was his. Whenever an administrator undertakes to go beyond the strict line of his duty, he acts upon his own responsibility. He can derive no profit from the success of his venture, but must bear the loss of a failure. Estate Applying these principles, we proceed to of Knight, 12 Cal. 200. If he uses the real estate of the estate, he must account for a further examination of the record. It the rental value thereof, and, if he makes a further appears that on the 9th of Decemprofit, account to the estate for that also. ber, 1881,-less than 14 months after his apWalls v. Walker, 37 Cal. 424. To the same pointment,-the administrator filed his effect is Tompkins v. Weeks, 26 Cal. 51. If, first, and what was intended to be his final, as in this case, the administrator elects to account, showing that he had received in assume the peril, and is permitted by the cash $10,942.43, and paid out $9,145.92, leavcourt and parties interested, without ob- ing a balance in his hands of $1,796.51. jection, to so conduct and manage the From this account, and the report of sales business, the liabilities growing out of the of personal property filed 20 days later, it management are not claims which could appears that of the receipts $5,807.08 was be enforced against the estate by the hold-derived from the sale of personal property; ers thereof. They are his liabilities. He the balance, $5,135.35, being the gross inhas a right to pay them out of the increase come derived from the business as carried of the business; but if by so doing a loss is on by him. His account of expenditure insustained to the estate, he must make the cluded the payment in full of all the claims loss good. Protected from loss and from which had been presented and allowed liability at all times, the estate is interest- against the estate, ($4,805.77,) the payment ed in the business only to the extent of its of all the charges and expenses of adminisprofits; and in them, not because it is the tration, and of taxes; and the balance, combusiness of the estate, but because the ad- prising the majority in number of the sevministrator is using the property of the es-eral items, although placed regularly in tate in a way he is not authorized to do, and, consequently, is required to account for all the profit made by its use. It follows from this that the expenses incurred in carrying on such business are not debts of or claims against the estate, nor are they "charges or expenses of administration," within the meaning of the probate law. The items of increase and items of expense of such business are not matters which come within the purview of the itemized account of an administrator, as such, subject to the rules of audit and allowance prescribed in sections 1631 and 1632, Code Civil Proc. He is bound to report to the court, as money or property coming into his hands as administrator, the true net gains or profits derived from the business, in money or kind; but the detailed account of the management or conduct of the business is no part of his accounts as administrator. If he reports them to the court at all it should be done in a separate paper, perhaps as an exhibit attached to his official report or account; and, when so done, it simply serves the purpose of showing his good faith in the premises, and is not a matter for audit by the court. The probate jurisdiction of the court is separate and distinct from its jurisdiction in ordinary civil actions. In re Allgier, 65 Cal. 228, 3 Pac. Rep. 849; Richard v. Wetmore, 66 Cal. 365, 5 Pac. Rep. 620. To the extent that the court, in the exercise of its probate jurisdiction, undertakes to audit the accounts and control the conduct of that business, to that extent, it, also, as well as the administrator, assumes to make a speculative and hazardous use of the property of the estates of deceased persons, not authorized by law. If the administrator fails to honestly account to the estate for the profits, or to make good the loss of his the account of expenditures of administration, show upon their face that they were expenses of carrying on the business, from which the increase of $5,135.35 was derived. We have taken some pains to segregate these items from the other, and find that they amount to $3,174.63, showing that he gives the estate the benefit of a net gain growing out of the business up to that time of $1,960.72. The record also shows that on the 23d of December, 1881, the attorney of the minor heirs filed objections to this account, contesting it on the ground, among others, "that no sufficient vouchers for the expenses and charges of said estate have been filed by the administrator of above estate." We do not find that the present record shows the next succeeding history of this account, but counsel for respondent says in his brief that it was settled and allowed as filed by the superior court of Kern county on the 29th of December, 1881, from which order an appeal was taken to this court, the decision upon which will be found in 63 Cal. 349. Turning to the case as there reported, we find that the mass of items of which we have above spoken as constituting payments of expenses of the business conducted by the administrator were treated by both sides as expenses and charges of administration, and the distinction was not in any manner called to the attention of the court. As many of those items were unaccompanied by the kind of vouchers required for pay. ments made on account of "charges and expenses of administration," the order settling and allowing the account was re versed, and the cause remanded for further proceedings. On the 17th of September, 1883, the account came on again for settle ment in the superior court of Kern county, when the present contestant filed objec after the document was recorded, this appeal was taken. tions to the same. The court refused to hear the contestant on the ground that he had no standing in court. Contestant ap- The case has been here in different forins pealed. The decision on that appeal will many times, and the close of administrabe found in 66 Cal. 242, 5 Pac. Rep. 220. It tion delayed beyond all precedent, considerwill be seen that there the court does not ing the small estate to be disposed of, and discuss or pass upon the merits of the ac- it is desirable that it should be closed at count at all, but holds that the court the earliest possible moment. For this erred in refusing to give the contestant a reason we have reviewed it at greater hearing, and reversed the case. After the length than we otherwise would have remittitur went down, the case was trans- done. Looking at the case upon the issues ferred to Tulare county, as above stated. presented by the account and the objecThere the same account and objection tions thereto, and as disclosed by the bill came up for hearing April 20-23, 1885. of exceptions, we find that in settling the On that hearing the court, in a written account the court has finally rejected and decision, filed August 22, 1885, held, as we disallowed items amounting to $154.06, hold here, that "it is no part of the duty and retired for further consideration upon of an administrator to carry on any bus- the coming in of another account, two iness for the benefit of an estate. If he items amounting to $357,-all of that class does so he is liable for any loss that may which are expenses, of carrying on the busibe incurred, and can reap no benefit from ness as distinguished from charges and the profits, if any." "That where an ad- expenses of administration." As the apministrator elects to carry on a business pellant claims to have debited himself, for an estate, the person who is employed and the court debits him, with the gross by him in such business is the employé of gains of that business, we think that such administrator, and not the employé under the evidence and the principles here of such estate. Such employé must look to adopted he should be credited with those the administrator, and not to the estate, items, and the court below is directed acfor his pay. The amount due such employé cordingly. The court also rejected an item is not a charge,' 'debt,' or 'claim' on his of $15, paid to Noble as appraiser. The recbehalf against said estate." But, on the ord shows that Noble was duly appointed other hand,-and, it seems to us, incon- one of the appraisers, served as such three sistently with this,-the court holds that if days, and claimed the fee. The administhe business pay a revenue to the estate, trator swears that he paid it, and we find then the expenses of the business are items no contradiction of that evidence. The of expense under section 1631, Code Civil amount is under $20, and we think should Proc., for which formal vouchers must be be allowed. The court also rejects an item filed under section 1632. If it is not the bus- of $75, expense of administrator to San iness of the estate, why is the expense of it Francisco. It does not very clearly appear expense of the estate? Why either more from the record for what this expense was or less expense of the estate if it results in incurred; but the administrator is entitled revenue than if it results in loss? Acting to necessary traveling expenses when on upon the principles thus announced by the business of the estate. If this expense is court, it takes up the account item by item, claimed to have been of that class, the bill and disallows or retires from the expense should not be rejected in toto, but be placed account, for want of proper vouchers, with in the list of those items retired, with leave to bring them forward again in any leave to bring it forward with the proper further account, items aggregating about proofs in a future account. The court al$850, and surcharges the administrator lows $756, and rejects $540 paid by the adwith about $150, making a difference ministrator to his counsel for fees and proagainst the administrator of about $1,000. fessional services, and also rejects $251 travOf this the appellant does not seem to have eling expenses of his counsel. This rejection complained; but on the 8th of September is based on the proposition that much of following, the court, "upon the sugges- the service rendered was unnecessary, not tion" of the respondent, made an order re- in the interest of the estate, to delay settlequiring the administrator within 30 days ment, and was with a view to establish an to restate his account in full from the com- account in which the administrator had mencement of his administration to date. knowingly not charged himself with all In pursuance of that order, on the 19th of moneys and property of the estate which October, 1885, the restated account was came into his hands. The findings do not filed. On the 24th of November, 1885, excep- show to what particular service the rejected tions to the account, covering 46 folios of items apply, and we cannot, therefore, say the record, were filed, contesting the ac- whether the rejection was correct or not. count not only for want of proper vouchers But if any part of it applies to the defense for many of the items thereof, but also upon of the two appeals decided in 63 Cal. 346, many other grounds, and notably upon the 349, to that extent we think the rejection ground that the administrator had not was error. An administrator is entitled to truly or correctly reported all the moneys credit for payments made for the services received by him, and never reported or filed and traveling expenses of his attorney, not an inventory of all the property of the exceeding a reasonable compensation for estate which had come into his hands. Up- the labor actually performed, when the on the same and the next succeeding day same were necessary to enable him to prop(November 24, 25, 1885) a hearing was had erly perform the duties of his trust. Esupon the restated account, and the issue tate of Moore, 72 Cal. 336, 13 Pac. Rep. 880. raised or assumed to be raised by these ex- He was not at that time charged with hav. ceptions, and on March 12, 1887, the "find-ing failed to account for all the property, ings and decree" were filed, from which, and was simply in the one case insisting upon the allowance of his account for car-funds received, of failure to file an invenrying on the business, and in the other he tory of all the personal property of the eshad acted under order of the court below, tate, of careless loss of books, and generaland was defending an appeal from such or-ly the findings not herein specifically noder. He acted under the advice of counsel, ticed, seem to be justified by the evidence, and we see nothing to show that such ad- and will not be disturbed. The order ap vice was not in good faith. He was not repealed from is reversed, with instructions sponsible for the mistakes of either counsel to the court below to allow in the account or court; and for the reasonable expenses of the administrator the claim of $15 paid incurred in that behalf, as well as for serv-Noble for appraisers' fees, and all the items ices in other proceedings in the settlement which the evidence shows to have been exof the estate, we think he should be al- penses of carrying on the business, as delowed. If any portion of these rejected | fined in the foregoing opinion, except such items was for services in either this court as are duplicated or withdrawn; also that or the court below in the matter of procur- the administrator be allowed to introduce ing the removal of the guardian of the mi- any additional evidence he may have in nor heirs, for that portion he is clearly not support of any of the remaining items entitled to be allowed. It was a matter which have been rejected or retired from with which he, as administrator, had his account, and thereupon that the acnothing to do, and no part of the expense count be restated in accordance with this of it should be charged to this estate. opinion. Several items of clerk's fees, printing bills, and of moneys paid to the attorneys for the minor heirs, were rejected. All the items of expenditures made in the matter of the estate and guardianship of these minors are properly rejected from this account. These expenses have no place in this account. If upon settlement between the two estates and distribution of this estate it be found that the administrator has made advances to the other estate, by paying, at the request of its representative, proper and necessary expenses therein, he may properly be allowed credit therefor as So much advanced to the minors on account of their distributive share, but he is not entitled to charge such advancement as expenses of this administration. The retiring of the item for administrator's commissions was proper, as he is not entitled to these commissions until the settle Weconcur; SHARPSTEIN, J.; MCFARLAND, J.; THORNTON, J. WORKS, J., concurs in the judgment of reversal. (80 Cal. 52) PEOPLE V. DE LAY. (No. 20,519.) (Supreme Court of California. Aug. 1, 1889.) EMBEZZLEMENT. 1. On trial of an information for embezzlement, it appeared that defendant was the assignee of an insolvent debtor, and that the assignment Damed the order in which creditors should be paid. A firm of which defendant was a member was secdebt of his own firm first, leaving little for payment ond in the list of creditors, but defendant paid the of other debts. He also received $737 from sales of milk, and only accounted for $427. Held, that the evidence justified the verdict of guilty, as it was for the jury to say whether defendant intended fraudulently to appropriate the property. 2. In such case, under Pen. Code Cal. § 513, pro embezzlement, the accused restore, or offer to restore, the property alleged to have been embezzled, such fact is not ground of defense, but goes only towards mitigation of the punishment, it ment of his final account. We are not dis-viding that if, prior to information laid charging posed, under the evidence, to interfere with the action of the court in rejecting or retiring other items of this account, considered in findings 38 to 62 inclusive. could not avail that defendant offered to return the balance due from him as assignee. 3. Nor is it a defense that defendant has given an indemnity bond for the amount of property coming into his hands as assignee. In bank. Appeal from superior court. city and county of San Francisco; D. J. MURPHY, Judge. Adair Welcker, for appellant. Goo. A. Johnson, Atty. Gen., for the People. Turning to the other side of the account, appellant claims that there is absolutely no proof to sustain the findings of the court. In this, we think, he is mistaken. It is not a question whether this court would have found the same way on the same evidence, but (there being no conflict) whether there is any evidence to justify the findings. If there is, under the well-established rule of this court the findings cannot be disturbed. It is not necessary that the PATERSON, J. The defendant was charged evidence should be introduced by the con- with embezzlement, and convicted. The testant if it is clearly found in the testi- chief contention of the counsel for appellant mony of those called to support the ac- is that the evidence is insufficient to justify count. It seems to us that there is in that the verdict. He obtained possession of the testimony some evidence to support every personal property of Mary Furlong under finding and order of the court surcharging an assignment thereof to him for the benethe administrator with amounts omitted fit of her creditors. By the terms of the asfrom the debit side of that account, and assignment defendant was required to apply to many of the charges it is conclusive evi- the proceeds of all sales of property and dence. The findings and conclusions, 19 to 36, inclusive, will not be disturbed. The finding that no order was ever made by any court or judge thereof authorizing the sale of personal property belonging to said estate, made by said administrator in the year 1881, is in conflict with the record as produced in this court, and is erroneous. The findings of misappropriation or misuse of funds, of failure to report all the the revenue received from the dairy and to the said firm of De Lay Bros. whatever | pay such judgment as may be recovered in amount may be now due to them from me, the above entitled action, as well as to pav or that may hereafter become due to them off other indebtedness," and in which he during the running of this agreement. (3) promises to hold so much of the property To pay to R. B. Mitchell such moneys as assigned to him "by Mrs. Furlong, or the may be now due to the late firm of Mitchell proceeds thereof, as may be necessary to & Ricketts, for fees and costs," etc. "(4) satisfy any judgment that may be recovTo pay all other unsecured debts that I may ered by said Reis in said action, including now owe, or which may become due from all costs and interest." There is other evime during the running of this agreement; dence in the record tending to show that so much of said book-accounts as the defendant fully understood the obligamay remain uncollected; and whatever per- tion imposed upon him by the contract to sonal property or book-accounts, notes, pay the Reis judgment first out of the funds demands, * * shall be turned over to received from the sales and collections. the said Furlong at the termination there- The explanation given by the defendant as of; the attachment heretofore is- to the difference between the amount actusued in the case of Reis v. Furlong to be re-ally received from sales of milk and that released, the said De Lay indemnifying Matthew Nunan and Jeremiah Lowney, securities on the undertaking, for release of attachment this day executed against any loss by reason of their signing said undertaking as sureties." 66 The question of the guilt or innocence of defendant does not depend upon the construction of the contract as to the order of payments to creditors. If it be conceded that he might lawfully have appropriated the proceeds to the payment of his own and other claims before any payment was made upon the judgment referred to, the fact still remains that, when called upon for an account, he reported that he had received only $427.15, when, in fact, he had received at least $737.40. The balance ($310.25) is the amount which he is charged to have bound to appropriate all the proceeds of sales and collections to the payment of Mrs. Furlong's debts, and return the balance, if any, to her. It was for the jury to say whether or not he intended fraudulently to appropriate the $310.25 retained by him. The fact that he afterwards offered to return or pay over this amount is no defense herein. Section 513, Pen. Code. ported is not very satisfactory. The court fully and fairly instructed the jury upon the law of embezzlement. They were told that a person may receive property belonging to another, and appropriate it, and divert it from its true channel, and from the purThe contract of assignment was executed pose for which he received it, but still he by both parties on July 21, 1886. The de- might not be guilty of embezzlement, and fendant thereupon accepted the trust, took would not be, unless such diversion or such possession of all the property that could appropriation or conversion by him was be found, and began to collect the book- of a fraudulent character and nature; that accounts, sell the cows and other stock, it is the fraudulent misappropriation of and wind up the business. On November the property that constitutes the gist of 15, 1886, nothing remained to be sold except the offense." a few heifers and calves and a grain wagon. At that time defendant had received about $3,000, and paid out about $2,900. Instead of applying the proceeds of the sales and of the business to the payment of the Reis judgment, which had been entered in the mean time against Mrs. Furlong for $1,600 and costs, he appropriated the whole thereof, except about $85, which he offered to pay over, to the payment of the debt due himself and partner and a few small claims. In a statement rendered November 15th he gave as the total amount received from sales of milk the sum of $427.15. At the embezzled. Under the contract he was trial it was admitted by his counsel that he had received up to November 5th, from sales of milk, at least $737.40. The balance, ($310.25,) not accounted for by him, is the amount charged in the indictment as having been embezzled. The driver of the milk wagon testified that there had been collected $120 for which no receipts could be found, in addition to the above-named sum of $737.40. Defendant testified that he did The error of the court in admitting the not understand from the agreement that testimony of the witness Nunan was not he was to pay the Reis judgment first, and prejudicial. The testimony elicited was that he acted on the advice of his attorney simply a repetition of what had already in appropriating the proceeds to the pay- been given. It was not contrary to the ment of his own and other claims. But written instrument, nor did it in any manthere is evidence that he knew the terms of ner add to its terms, but was in entire acthe contract required him to pay the judg-cord with the provisions thereof. The fact ment first. If he acted on the advice of his that Nunan and Lowney took a written attorney, Mr. Wood, it is a singular fact indemnity from the defendant in no way that he did not call the latter to testify in affects the guilt or innocence of the defendhis behalf; although, of course, if the jury ant, who is charged with embezzling the believed the testimony of the defendant, his property intrusted to him for certain purevidence on that subject was sufficient to poses by Mrs. Furlong. Defendant claims establish the fact in his favor. Evidently, that Mrs. Furlong did not turn over to him however, the jury did not believe that he all the property called for by the assignso understood the contract. At the time ment. Upon this question there is a conthe contract of assignment was made de- flict of testimony. Defendant, however, fendant gave Nunan and Lowney a writ- was not called upon to account for anyten indemnity, in which he recites that thing he did not receive. Mrs. Furlong tes“whereas, said Mary Furlong has this day tified that she gave him all the property made an assignment to me of all her per- that could be found, and that he might sonal property, for the purpose of selling so have had the heifers and calves if he had much of the same as may be necessary to called for them. The defendant is not charged with embezzling money collected supplemental legislation the grant was so by Mrs. Furlong, or property retained by extended as to comprise a belt of 40 miles, her. If he was dissatisfied with his agree- or 20 miles on each side of the road. It is ment on the ground that she had retained agreed by counsel, as per statement of a portion of the property, or had collected agreed facts on file, that whatever title the some of the book-accounts, he should have Union Pacific Railroad Company had in declined to proceed further with his trust and to the aforesaid odd-numbered sections until the whole of the property was turned was regularly transmitted to the Union Paover to him. So long as he retained any cific Railway Company, and by the latter property under the contract, he was bound transmitted to the Wyoming Land & Imto use it as required by the provisions there-provement Company, and by the lastof. Judgment and order affirmed. We concur: BEATTY, C. J.; SHARPSTEIN, J.; WORKS, J.; MCFARLAND, J. (3 Wyo. 287) named company to the defendant corporation. The chief point of contention between the plaintiff and the defendant in error arises out of the asserted right of defendant to build and maintain upon its own land a UNITED STATES V. DOUGLAS-WILLAN SAR- fence which will operate as an inclosure of TORIS CO. (Supreme Court of Wyoming. June 6, 1889.) PUBLIC LANDS-POLICE POWER. 1. Defendant, owning a number of sections of land designated by odd numbers, the title to the alternate or even-numbered sections being still in the government, undertook to inclose a part of its lands by a series of fences erected wholly within the limits of its own property, the practical effect of which, however, was to inclose with it many of the even-numbered sections of public land. In a proceeding by the United States for injunction, under act Cong. Feb. 25, 1885, (23 U. S. St. 1853 85,) declaring unlawful the inclosure of public lands made by any person without claim or color of title to any portion of the lands so inclosed, held, (per SAUFLEY, J.,) that the statute, so far as it forbids, as a nuisance, the erection by defendant of a fence wholly within the limits of its own land, is not a legitimate exercise of the police power, but an unwarranted invasion of private property, and is unconstitutional and void. 2. Per CORN, J. Notwithstanding the apparent meaning of the language used, the act of February 25, 1855, was not intended to forbid the erection by a land-owner of a fence wholly within the limits of his own land. MCGINNIS, C. J., dissenting Error to district court, Albany county. This was a proceeding in equity by the United States to restrain defendant corporation from unlawfully inclosing public lands. The district court dissolved the temporary injunction, and dismissed the petition. The plaintiff brings error. the public land. In other words, the complaint of the government is, substantially, that the Douglas-Willan Sartoris Company, with the sole and unlawful design of inclosing the lands of the government, has planned, already built, and proposes to build, a continuous line of barbed-wire fence, which, when completed, will have the effect to sever from the public domain over 200 even-numbered sections in 12 townships, situate in a compact body, and of the form of a quadrilateral. By those familiar with the frame-work of the rectangular system of surveying it is well understood that, after the initial point for the survey within a given surveying district is agreed upon, a principal base line is run east and west therefrom, on a true parallel of latitude. Beginning thereafter at the same initial point, a principal meridian is extended north and south therefrom. Lines, called "standard parallels," are then run every four townships, or 24 miles, north of the base line, and every five townships, or 30 miles, south of the base line. This being done, lines called "guide meridians" are surveyed at intervals of eight ranges, or 48 miles. The parallelograms thus formed are divided into townships, sections, and parts of sections. Each section of every township is numbered, beginning with the numeral 1, and ending with the number 36. For the purpose of this case, the section may be regarded as the unit of the rectangular system. From the pleadings and exhibits it sufficiently appears that the inclosure, as already built and threatened to be built, may be generally described as beginning in section 35, township 17, range 76, and utilizing in its course certain linear On the 1st day of July, 1862, the congress fragments of pre-built fence of other parties, of the United States passed an act entitled as well as the shores of certain lakes; run"An act to aid in the construction of a rail- ning thence in a north-westerly course; road and telegraph line from the Mississip- thence deflecting eastwardly; thence northpi river to the Pacific ocean, and to secure westerly, until it reaches the northern secto the government the use of the same for tion line of section 3, township 19, range 76; postul, military, and other purposes." By thence, on a comparatively right line, until the first section of this act the Union Pacific it reaches the east line of section 3, townRailroad Company was created, erected in- ship 19, range 75; and thence southerly, to a body corporate, and given the cus-ranging south-westerly, until it reaches a tomary powers of a corporation. By the point a few sections only from the beginthird section there was, in express terms, ning. The description is inexact, but may granted to the corporation, for the purpose serve to illustrate, in the absence of a diaof aiding in the construction of its line of gram, the principles of this opinion. By railway, and for other avowed purposes, stipulation between the parties the followevery alternate section of public land, des- ing facts are agreed: That the fence alignated by odd numbers, to the amount of ready built is wholly on odd-numbered secfive alternate sections per mile, on each side tions; that the fence proposed to be built of the line of railway, and within the lim- will be, if completed, wholly on odd-numits of 10 miles on each side of the road. Bybered sections; that the entire line, if com A. C. Campbell, U. S. Atty., and Wm. W. Peck, for plaintiff in error. Brown, Blake & Arnold and Corlett, Lacey & River, for de fendant in error. SAUFLEY, J., delivered the following sep arate opinion: |