Estate of Williams, Matter of

• Decision Date: 09 May 1984
• Docket Number: No. 14270,14270
• Citation: 348 N.W.2d 471
• Parties: In the Matter of the ESTATE OF Joe J. WILLIAMS, Deceased.
• Court: South Dakota Supreme Court

Page 471

348 N.W.2d 471

In the Matter of the ESTATE OF Joe J. WILLIAMS, Deceased.

No. 14270.

Supreme Court of South Dakota.

Argued Jan. 17, 1984.

Decided May 9, 1984.

Douglas R. Bleeker of Shandorf, Bleeker, Boldt & Koch, Mitchell, for John R. Williams, Rosemary Williams Sayers, and Linda Williams Westover, appellants; Edward M. Bubak, Tyndall, on brief.

Lawrence E. Long, Martin, for Ward J. Williams, appellee; Fredric R. Cozad, Martin, on brief.

HENDERSON, Justice.

ACTION

This is a civil appeal from an order entered by the Circuit Court for the Sixth Judicial Circuit on May 13, 1983, retaining the executor of the Joe J. Williams estate and estopping his heirs from asserting a lapse provision in his will. We affirm.

FACTS

Joe J. Williams died testate on December 12, 1981, at Hot Springs, South Dakota. His wife, Stella, predeceased him in 1978. His will was admitted to probate on February 2, 1982, and his son, Ward J. Williams (Ward), was appointed executor.

The provision of the will of Joe J. Williams pertinent to this action is as follows:

SECOND, as concerns any farm and ranch real estate that I own at the time of my death ...

... I give, devise, and bequeath such unto my son, Ward J. Williams, upon the following express conditions:

That he make settlement with my other three children an [sic] pay unto them the amount and at the times and in the manner hereinafter set forth. I direct that the number of acres of land that he is receiving hereunder be multiplied by the sum of Seventy Dollars ($70.00) per Five per cent (5%) of the principal together with five per cent (5%) interest on the unpaid balance to be paid each year for a period of four years, with the full balance being paid on the fifth year. An example of what is intended hereunder being--if I had 480 acres of land at the time of my death, this times $70.00 per acre would amount to $33,600.00, divided by four would make each child's share amount to $8,400.00. The annual payment due each child for the four year period would be $420.00, with the interest the first year being $420.00, with the full balance of the principal in the amount of $6,720.00 being due in the fifth year. The payments to be made on the anniversary date of either mine or my wife's death, whichever occurs last.

acre, and that the total amount thus arrived at be divided by four, and that such one-fourth share be the amount that he is to be required to pay to each of the other three children, such amount to be paid as follows:

As I have indicated herein, such amount to be paid each of my three children, Rosemary Sayers, John R. Williams, and Linda M. Westover.

The gift, devise, and bequest of such real estate to my son, Ward J. Williams, is made on the condition that he shall settle with the other three children as herein provided. In the event he for any reason does not make the payments to the other three children, as herein provided, I direct that the provision for him to receive said land shall lapse and become inoperative, and such land shall thereupon [pass] to my four children, that is, Rosemary Sayers, John R. Williams, Linda M. Westover, and Ward J. Williams, in equal shares, share and share alike. Ward and his boys have been staying on the place and helping us operate it, and we want him to have the opportunity of having the land, but want to be totally fair with our other children too, and this is why it is that we are making this provision.

Ward contends that as a result of a conversation with his brother John Williams, there arose a "family agreement" whereby he would pay the other heirs of the estate in lump sum, ignoring the payment provisions of the will. As his son, Steve, inclined toward ranching, Ward made arrangements for Steve to procure FHA financing, the funds to be used to settle the estate. Ward would then deed the property to Steve, giving him a start in the business. FHA approval took some time, but was finally accomplished in September 1982. Funding the loan was all that remained. Ward claims he informed his relatives of these developments in November 1982. The money became available in January 1983.

In December 1982, John and his sisters, Rosemary Sayers and Linda Westover (appellants), evidently became concerned at Ward's failure to comply with the will provisions. They deny the existence of any family arrangement and further contend they were unaware, not only of his proposed payment plans, but whether he, in fact, was considering purchasing the property at all. As the payment deadline passed, they claim the property devolved to all four heirs as tenants in common.

Appellants also raised concern over Ward's handling of the estate as executor. They contend Ward conducted the estate business in a self-serving manner. They urged he was negligent, if not willful, in failing to comply with the statutory requirements for administration. In addition, there were questions over Ward's decisions 1) to postpone sale of estate cattle for one year; 2) to place estate funds in a checking account; 3) to use proceeds from the cattle sale to pay off the Federal Land Bank and PCA mortgages, both debts of the estate; and 4) to sell a piece of machinery on time, with no interest. These decisions were without court approval.

On January 10, 1983, a petition was filed by appellants in the circuit court asking for distribution of the real estate to all four heirs. Further, appellants requested in the alternative that either Ward be required to perform his duties as executor or be removed from office. A hearing was held on April 5, 1983. Evidence was presented and

the court entered findings of fact and conclusions of law to the effect that: 1) Ward J. Williams had not engaged in a course of conduct meriting his removal; 2) Ward J. Williams must file a detailed inventory within fifteen days of all miscellaneous items; 3) the court would determine by evidence if there was detriment caused by keeping money in a checking account rather than a savings account and would take this into consideration on the executor's fee; 4) the other heirs were equitably estopped from enforcing the one-year lapse provision in the will because they desired a lump-sum payment, the heirs agreed to it, and Ward undertook efforts to secure financing to accomplish these purposes; 5) appellants were to each receive their willed share in a lump-sum payment; and 6) Ward was to receive the devised real estate only after appellants are paid their full distributive share.

ISSUES

I.

WAS THE TRIAL COURT'S FINDING CLEARLY ERRONEOUS IN REFUSING

TO REMOVE WARD J. WILLIAMS FROM HIS POSITION AS

EXECUTOR OF THE JOE J. WILLIAMS ESTATE?

WE HOLD THAT IT WAS NOT.

II.

WAS THE TRIAL COURT'S FINDING PROPER THAT THE BROTHER AND

SISTERS OF WARD J. WILLIAMS ARE EQUITABLY ESTOPPED FROM

ASSERTING A ONE-YEAR LAPSE PROVISION IN THE JOE J. WILLIAMS

WILL DUE TO WARD WILLIAMS' FAILURE TO MAKE PAYMENTS WITHIN

ONE YEAR FROM DATE OF DEATH? WE HOLD THE TRIAL COURT'S

APPLICATION OF EQUITABLE ESTOPPEL WAS FAIRLY APPLIED.

DECISION

I.

"Our standard of review ... is to uphold the trial court unless its findings are 'clearly erroneous' ... [i.e.] 'when after reviewing all of the evidence we are left with a definite and firm conviction that a mistake was made.' " Vaughn v. Eggleston, 334 N.W.2d 870, 872 (S.D.1983). In applying this standard, our function is not to decide factual issues de novo. In re Estate of Hobelsberger, 85 S.D. 282, 181 N.W.2d 455 (1970). "[W]e must give due regard to the opportunity that the trial court has to judge the credibility of the witnesses and to weigh their testimony ... [and] accept the evidence including any reasonable inferences which are favorable to the trial court's determination." Isaak v. Isaak, 278 N.W.2d 445, 446 (S.D.1979). "It is well settled that the credibility of witnesses and weight of evidence is for the trial court ...." Nicolaus v. Deming, 81 S.D. 626, 627, 139 N.W.2d 875, 875 (1966).

There is no dispute that Ward did not file an inventory, as required by SDCL 30-16-1, and he did not file an inheritance tax report immediately, as outlined in SDCL 10-41-17. There was no court authorization for paying the Federal Land Bank or PCA mortgages on the estate (SDCL 29-6-19), nor for the sale of any estate property (SDCL 30-22-7). However, in none of these circumstances do the statutes mandate automatic removal of an executor upon a failure to comply. "The removal of a fiduciary is a drastic action which should be taken only when the estate is endangered and intervention is necessary to protect the property of the estate." In re Estate of Pitone, 489 Pa. 60, 68, 413 A.2d 1012, 1016 (1980). Irregularities in management which are not harmful to the estate will be overlooked, and "[i]f the court can readily remedy a matter of complaint, no removal will be ordered." In re Hartt's Estate, 75 Wyo. 305, 356, 295 P.2d 985, 1003 (1956). A failure or delay will not warrant removal unless such has caused a loss to the estate. See In re Buchman's Estate, 123 Cal.App.2d 546, 267 P.2d 73 (1954).

The delay in filing an inventory was based on Ward's decision that it would be to the estate's tax advantage not to do so immediately. This decision was with the advice of counsel. There was testimony that an inventory was finally filed in January 1983, and a stipulation was received from the Department of Revenue stating no tax liability. Rarely is such loss considered a detriment.

Appellants claim that Ward has acted in a cavalier manner in conducting the affairs of this estate as if it were his own property and business. As further ground for removal, they claim that Ward gambled with the assets of the estate in continuing an unauthorized cow/calf ranching business, again, based solely on personal judgment. SDCL 55-5-1, however, provides that "a fiduciary shall exercise the judgment and care under the circumstances then prevailing, which men of prudence, discretion and intelligence exercise in the...