Estate of Holloway, Matter of

• Decision Date: 25 November 1987
• Docket Number: No. 57027,57027
• Citation: 515 So.2d 1217
• Parties: 5 UCC Rep.Serv.2d 1016 In the Matter of the ESTATE OF Dewey D. HOLLOWAY, Deceased. Mattie K. HOLLOWAY v. Betty Jean Holloway HAWKINS and Lee T. Holloway, Individually and as Executor of the Estate of Dewey D. Holloway, Deceased.
• Court: Mississippi Supreme Court

Page 1217

515 So.2d 1217

5 UCC Rep.Serv.2d 1016

In the Matter of the ESTATE OF Dewey D. HOLLOWAY, Deceased.

Mattie K. HOLLOWAY v. Betty Jean Holloway HAWKINS and Lee T. Holloway,

Individually and as Executor of the Estate of

Dewey D. Holloway, Deceased.

No. 57027.

Supreme Court of Mississippi.

Nov. 25, 1987.

Rhett R. Russell, Soper & Russell, John R. Coleman, Tupelo, for appellants.

David R. Sparks, Sparks, Wicker & Colburn, Tupelo, for appellees.

Before ROY NOBLE LEE, C.J., DAN M. LEE, P.J., and GRIFFIN, J.

DAN M. LEE, Presiding Justice, for the Court:

I.

This appeal arises from a judgment of the chancery court of Lee County, Mississippi, entered in favor of Appellees below adjudicating that certain assets were not part of the estate of Dewey Holloway, deceased, and thus not subject to his widow's elective share.

Dewey D. Holloway died in October 1982, leaving his wife of 38 years, Mattie K., and four children: Betty Jean Holloway Hawkins, Lee Tom Holloway, Douglas D. Holloway and Guy Holloway. Guy Holloway was the only offspring of Dewey and Mattie's marriage; the other three were the offspring of Dewey Holloway's previous marriage. Apparently, Dewey Holloway kept his business affairs very private; neither his wife nor his children knew much about his financial dealings.

Mattie K. Holloway initially filed a complaint seeking a widow's allowance. She also renounced her share under decedent's will and filed a complaint contesting decedent's will and seeking an accounting, recovery of estate property, and equitable relief.

The issue as narrowed by the chancellor was whether certain instruments, a promissory note and certificates of deposit, were part of the estate and, therefore, subject to the widow's elective share. The instruments listed decedent as payee in the alternative with either one or both of the defendants. The chancellor held the notes and instruments were owned by the alternatively named individuals, appellees here, and none of the money represented by the note and the certificates of deposit was part of the estate and subject to the widow's elective share. Outside of the funds at issue, the estate assets were limited to personal property and the homestead. Thus, there were no assets from which either a widow's allowance could be paid or an elective share could be distributed.

From these adverse rulings Mattie K. Holloway appeals, assigning eight errors:

1. The lower Court erred in adjudicating that the three Certificates of Deposit titled jointly to decedent and three other individuals as of his death passed to and vested in the surviving individuals free and clear of any claim of decedent's Estate and free and clear of the claims of Appellant, decedent's widow, for computation of or funding her statutory share and her widow's allowance.

2. The lower Court erred in determining that the disposition of the three Certificates of Deposit titled to decedent as of the time of his death is governed by Section 81-5-63 MCA.

3. The lower Court erred in adjudicating that the Promissory Note secured by Deed of Trust and jointly titled to decedent and Appellee, Lee T. (Tom) Holloway, as of the time of decedent's death passed to such Appellee free and clear of any claim of decedent's Estate and free and clear of the claims of decedent's widow for computation of or funding her statutory share and her widow's allowance.

4. The lower Court erred in finding "apparent delivery" of the aforestated Promissory Note and Deed of Trust to Lee T. (Tom) Holloway in his individual capacity.

5. The lower Court erred in overruling Appellant's objection to the inventory of the Executor.

6. The lower Court erred in refusing to remove Appellee, Lee T. (Tom) Holloway, as executor and in denying Appellant's demand that a competent and disinterested person or entity be appointed as Executor de bonis non.

7. The lower Court erred in not assessing costs, including a reasonable attorney's fee, against one or more of the Appellees.

8. The lower Court erred in denying Appellant's application for a widow's allowance.

Decedent left a will which was admitted to probate by decree entered November 30, 1982. The will named as executor Lee Holloway, decedent's son. Letters testamentary were duly entered. Decedent devised to Mattie K. Holloway a life estate in the couple's homestead property only so long as she lived on it and used it solely as a residence. The remainder of his property, both real and personal, was to be sold and the proceeds distributed among Mattie and his children; however, Mattie would get her share only if she continued to live on the homestead property.

Douglas Holloway sought an accounting and inventory of the estate assets. The executor filed an inventory listing the homestead as the estate's only real property. Decedent had no other bank accounts outside a joint checking account with Mattie Holloway. Household items and furnishings were owned jointly by decedent and Mattie.

The only other items listed in the inventory were three certificates of deposit and a promissory note with accompanying deed of trust. The CDs were made payable to decedent Or Betty Holloway Hawkins Or Lee T. Holloway Or Guy Holloway. One CD was for $16,000 and the other two CDs were for $10,000 each.

To avoid confusion, it should be made clear at this juncture that $4,000 in cash was added to the $16,000 CD at renewal in order to create the two $10,000 CD's existing at decedent's death.

The only other significant item in the inventory was a promissory note. Decedent sold some real estate to Joe M. Allen and wife and Charles Lee and wife in March 1976. The four executed a promissory note for $20,200 payable to Dewey D. Holloway (decedent) or Lee T. Holloway, payable $120 per month for five years and $100 per month for the remaining 10 years.

Mattie Holloway subsequently filed her complaint, alleging undue influence by Betty Holloway Hawkins and Lee Holloway. Alternatively, she alleged that decedent was misled or was laboring under a mistake of law or fact in transferring funds into the CDs and executing the purported will. Alternatively, she alleged that before his death decedent was fraudulently induced to make the will and transfer to appellees property which he owned. She alleged that decedent intended for appellees to hold the funds primarily for her benefit.

Mattie sought a constructive trust on all funds obtained through fraud, undue influence or mistake. She also sought an adjudication that she had an equitable one-half interest in funds and other property held jointly by decedent and herself, the title, interest or possession of which were transferred to appellees.

Through Lee Holloway, executor and alternatively named payee on the certificates and the promissory note, the estate took the position that the instruments were not part of the estate but, rather, passed outside the will.

Mattie deposed Betty Holloway Hawkins, Lee Holloway and Lee's wife, Mary Nell. Appellees deposed Mattie and then moved for summary judgment on the grounds that neither the certificates nor the promissory note were part of decedent's estate.

In an effort to expedite litigation, however, this motion for summary judgment quickly escalated to a decision on the merits based on the depositions and stipulations entered into the record. The chancellor had no opportunity to observe any of the witnesses. The chancellor entered judgment that neither the certificates nor the promissory note were part of the estate.

The court in its judgment also denied Appellant's objection to the accounting and her request to have Lee Holloway removed as executor. The chancellor denied Mattie Holloway's request for widow's support because no assets existed from which to pay such support, and held that Mattie Holloway would take an unaffected share of the estate by virtue of her renunciation of the will.

From that judgment Mrs. Holloway appeals.

The dispositive question on appeal is whether the chancellor erred in finding that the certificates of deposit and promissory note passed outside the estate.

II.

The Certificates

A.

Dewey Holloway began providing money to purchase certificates of deposit several years before his death. Testimony on this point in the depositions is by no means clear, but documentation in the record reveals that at least one certificate of deposit for $10,000 was purchased September 17, 1979, and listed the payees as Betty Holloway Hawkins or Lee T. Holloway or Guy Holloway.

The certificate was renewed at six-month intervals, but the amount was increased in March 1981 to $15,000 and decedent's name was added as an alternative payee; this remained true with subsequent renewals. In September 1981, the certificate was renewed and increased to $16,000.

On March 8, 1982, Dewey Holloway cashed a $4,200 check written on his and Mattie Holloway's joint account. On March 20, 1982, the amount of the certificates was increased to $20,000 by the purchase of two certificates for $10,000 each. Thus, 12 days before the amount of money held in CD's was increased by $4,000 decedent withdrew a similar amount from his and his wife's joint checking account. Betty Holloway Hawkins stated she could not remember from where she received the money to increase the amount from $16,000 to $20,000.

These two certificates were renewed in September 1982, one month prior to Dewey Holloway's death. These certificates matured after Mattie Holloway filed her complaint asserting an interest in the funds. Betty Holloway Hawkins testified that she renewed these in favor of two more certificates, dropping the names of Dewey Holloway (the decedent) and Guy Holloway (decedent's and Mrs. Holloway's son, who apparently helped his mother in this suit). Mattie stated she did not know about the certificates until after her husband's death, and she never knew about any contributions her husband made to purchase the certificates.

It appears, then, that decedent, directly...