Nelson v. Beverly Beach Properties

• Decision Date: 12 May 1950
• Citation: 47 So.2d 310
• Parties: NELSON et al. v. BEVERLY BEACH PROPERTIES, Inc., et al.
• Court: Florida Supreme Court

Page 310

47 So.2d 310

NELSON et al. v. BEVERLY BEACH PROPERTIES, Inc., et al.

Supreme Court of Florida, Special Division A.

May 12, 1950.

Rehearing Denied July 14, 1950.

McCune, Hiaasen, Fleming & Kelley and Carl A. Hiaasen, Fort Lauderdale, for appellants.

Myers, Heiman & Kaplan and Ward & Ward, Miami, for Beverly Beach Properties, Inc., and Samuel Friedland.

Hall & Hedrick, Miami, for James Q. Burdet and Glynn O. Rasco, cross-appellants, and Ellen W. Burdet.

Evans, Mershon, Sawyer, Johnston & Simmons and Herbert S. Sawyer, Miami, for E. L. Lockhart.

Vincent C. Giblin, Miami, for cross-appellants Elsie Z. Weaver and Helen Wrigley McGarry, as domiciliary executrix of estate of Paul D. McGarry, deceased.

TERRELL, Justice.

Olof Zetterlund, a citizen of Dade County, died in California August 21, 1945. On May 23, 1945, Dora Miller, his housekeeper, was appointed guardian of his person and property by the Superior Court of California. This case grew out of an abortive attempt on the part of Dora Miller to administer or dispose of certain portions of Olof Zetterlund's property under the laws of California. Zetterlund had accumulated a considerable acreage of valuable lands in Florida and conducted his business through several Florida corporations about which more will be said later. In Miller v. Nelson, 160 Fla. 410, 35 So.2d 288, we affirmed a judgment of the Circuit Court of Dade County adjudicating Olof Zetterlund to be a citizen and resident of Florida at the time of his death. He had been a citizen of Dade County over fifty years but had spent the last four years of his life in California, New Mixico, Colorado and Oregon in the hope that the change would improve his health. All of this time he was under the care of Dora Miller and much of it he was unable to make decisions for himself.

On January 27, 1947, Samuel Nelson was appointed executor of his estate by the Probate Court of Dade County. This suit was instituted by bill for declaratory decree April 24, 1947. An amended bill was filed January 3, 1948. The amended bill prayed (1) That the Court assume jurisdiction of the cause and construe the documents described therein, declare the rights of the parties thereto and enter such decree as equity and good conscience may require. (2) That an accounting be had covering the period, May 23, 1945 to January 27, 1947. This was the period between the appointment of Dora Miller as guardian of the person and property of Olof Zetterlund and the appointment of Samuel Nelson as executor of his estate. The purpose of the accounting was to ascertain what use was made of the funds and assets of Elsinor Beach Corporation and Halland Land Company during that period. (3) That the court take jurisdiction of the controversy and determine all disputes, questions and problems and enjoin the further prosecution of the several actions brought in the Circuit Court of Broward County by defendants, affecting the properties and rights of Olof Zetterlund and his corporations. Answers were filed and on final hearing February 18, 1949, the chancellor rendered his decree containing detailed findings of law and fact.

The chancellor found that the bill for declaratory decree presented four primary questions. (1) The validity and effect of the guardianship proceedings in California. (2) The acquisition of the stock in Elsinor Beach Corporation held by Weaver and McGarry. (3) The contract of sale by the California guardian to Beverly Beach Properties, Inc. and later to Friedland. (4) The basis for rescission and the relief if any that should be granted. The decree appealed from was based on this finding.

The plaintiffs appealed and contended that the decree should be reversed in the following respects. (1) In so far as it dismissed the cause as to defendant Ellen W. Burdet. (2) In so far as it dismissed the cause as to defendant E. L. Lockhart. (3) In so far as it dismissed the cause as to defendants Ben J. Slutsky, Marian Slutsky, Julius Slutsky and Alice Slutsky. (4) In so far as it required restitution to the defendant Beverly Beach Properties, Inc. as a condition precedent to the rescission of the contracts and deeds described in the decree.

The defendants Elsie Weaver and Helen Wrigley McGarry cross-appealed from the Chancellor's decree. Beverly Beach Properties, Inc. and Samuel Friedland the purchaser from the latter, filed cross assignments of error and fortified them with an appeal by certiorari. The defendants Rasco and Burdet filed cross assignments of error, including an appeal by certiorari. It follows that we are now confronted by five separate appellate proceedings which were by stipulation of counsel consolidated for the purpose of considering the decree appealed from as it affects each and every party thereto.

It is first contended that the provision of the decree requiring restitution by the plaintiffs to the defendant Beverly Beach Properties, Inc. as a condition precedent to rescission of the contracts and deeds described in the bill of complaint was erroneous.

The contracts and deeds referred to in this question have reference to those made between Elsinor Beach Corporation and Halland Land Company on the one hand and Beverly Beach Properties, Inc., on the other. Elsinor Beach Corporation and Halland Land Company were both owned and controlled by Olof Zetterlund. Zetterlund's California guardian made a contract by proxy to sell the lands in question to Beverly Beach Properties, Inc. who in turn sold them to Samuel Friedland. The contract of sale was entered into June 9, 1945, after Zetterland was adjudicated an incompetent. When he actually became incompetent is not shown but he was so adjudged May 23, 1945. The evidence would indicate that he was in a critical condition physically and mentally long before this.

Appellant contends that the chancellor committed error in making restitution a condition for cancelling the sale to Beverly Beach Properties, Inc., because (1) It was made at the instigation of the California guardian of Zetterlund minus the approval of the proper Florida court, said California guardianship proceedings having been adjudged by the chancellor to be void. (2) That when the grantee Samuel Friedland purchased said lands from Beverly Beach Properties Inc. he was on knowledge of the fact that Olof Zetterlund was an incompetent. (3) At the time Beverly Beach Properties, Inc. and Samuel Friedland purchased the lands in question they were on notice that the California guardian had no legal status and could not function in Florida. (4) The price paid for the lands was grossly inadequate and was so adjudicated by the chancellor. (5) All disbursements of the purchase price and expenditures for improvements were made by the grantee after actual notice that the transaction was nothing more than executory, that it was a nullity and could never be completed. (6) The improvements for which restitution was decreed were for dredging, filling and bulkheading the low lands embraced in the purchase, all of which were left in such an incomplete state that they will require further expenditure of large sums to complete them and may never be of value to appellants.

Beverly Beach Properties Inc., and Samuel Friedland assert on the other hand that the contention of appellants is neutralized by the showing that the appointment of Dora Miller as guardian of the person and assets of Olof Zetterlund by the California Court and their transactions with her, being regular on their face, the orders and decrees designating her as such guardian are entitled to full faith and credit in Florida under the Federal Constitution, Section 1 of Article IV, and being so, the guardian appointed in California was authorized to subscribe to the contract in Florida by proxy and thereby bind Olof Zetterlund and those claiming under him. To rebut appellants' contention as to restitution, appellees rely on Perper v. Edell, 160 Fla. 477, 35 So.2d 387, where this court approved the doctrine that complete insanity of a party is not a sufficient reason for setting his contract aside when shown to have been entered into in good faith, without fraud or imposition on the part of the second party who was without notice of the grantor's infirmity and paid a fair consideration for the rem. This is all the more true if the contract was made before the adjudication of insanity, has been executed in whole or in part and in the absence of any showing that the parties can be restored to their original position.

The evidence as to when Olof Zetterlund became mentally incompetent is in conflict but the chancellor found him incompetent to handle his estate 'at least by May 23, 1945, and so continued until death.' He also found that Dora Miller's appointment as his guardian by the Superior Court of California gave her no authority to function as such in Florida and that it gave her no authority to give a proxy to her attorney to bind Zetterlund in Florida. The chancellor further found that the purchasers, Beverly Beach Properties, Inc., and Samuel Friedland had no 'actual constructive notice of any intention on the part of the plaintiffs to seek a rescission of the sale until March 1948, and that Friedland made improvements on the property and sold a portion of it prior to that date. The fact that a foreign guardian has no authority to function in Florida without taking ancillary guardianship proceedings is too academic to require supporting authority.

On that part of his decree affecting rescission and restitution, the chancellor imposed the following qualification:

'That upon rescission the purchaser, Beverly Beach Properties, Inc., on an accounting, be entitled to a restitution of moneys expended by it on the purchase price and maintenance of the property, and improvements thereon; that if practicable and entirely equitable as between the parties, some portion of the property, on which improvements have been placed, commensurate in value to...