Wilson's Estate, In re

• Decision Date: 16 December 1959
• Docket Number: No. 1271,1271
• Citation: 116 So.2d 440
• Parties: In re ESTATE of Q. M. WILSON, Deceased. John F. KIRK, Appellant, v. Joan WILSON, Appellee.
• Court: Florida District Court of Appeals

Page 440

116 So.2d 440

In re ESTATE of Q. M. WILSON, Deceased.

John F. KIRK, Appellant, v. Joan WILSON, Appellee.

No. 1271.

District Court of Appeal of Florida, Second District.

Dec. 16, 1959.

John E. Born, West Palm Beach, for appellant.

James Nemec, West Palm Beach, for appellee.

ALLEN, Chief Judge.

The appellant, as petitioner in the lower court, filed a claim against the Estate of Q. M. Wilson on January 13, 1956, in the amount of $16,500. Thereafter on April 25, 1958, the petitioner moved for a compulsory settlement of his claim which was denied by an order of the lower court entered on March 4, 1959, after testimony and arguments of counsel were presented to the court.

Q. M. Wilson died on May 15, 1955, leaving an estate appraised at approximately $100,000. Prior to his death the deceased was the sole stockholder and operator of the Wilson Motor Company, which was engaged in the business of selling household appliances at retail and also rented and repaired automobiles. The appraised valuation of the 50 shares of the Wilson Motor Company was $88,000. The company's principal asset other than the business itself was a mortgage which returns 5% and is valued at approximately $22,000.

Joan Wilson, the wife of decedent, was issued letters testamentary on May 31, 1955, and a notice to creditors was published commencing on June 3, 1955. Appraisers were appointed and the forementioned appraisal of $100,000 was subsequently filed, $88,000 of which was represented by the 50 shares of stock. The executrix, in reliance upon the appraisal, and after creditors' claims of approximately $50,000 had been filed, decided to continue operation of the business in an attempt to pay off some of the claims.

From the time the letters testamentary were issued on May 31, 1955, the executrix filed no annual returns until November 4, 1957, at which time also the executrix filed her first petition to operate the business of decedent. On the same date the executrix filed annual reports for June, 1955 to May, 1956, and for June, 1956, through May, 1957. Also at this time the executrix filed a petition for leave to vote the stock of the corporation alleging that she had been operating the business and had reduced the indebtedness of the company. The court then entered an order granting the executrix the right to vote the stock, and continue operating the business.

The appellant's claim had been pending against the estate since January 13, 1956 and on April 25, 1958, he moved for a compulsory settlement of his claim alleging mismanagement and misappropriation of assets; and also sought to vacate the order granting the executrix leave to vote the stock. The lower court conducted hearings on June 19, 1958, and on October 8, 1958, and thereafter entered an order on March 4, 1959, denying the appellant's petition. The probate judge made certain findings absolving the executrix from personal liability and then stated in his final order:

'Therefore, this Court is of the opinion that although the Executrix should have earlier obtained an Order for the continuation of the business that such Order would not have changed the situation whatsoever and further, that Petitioners are guilty of laches. The Court finding that no fraud or willful mismanagement or misappropriation of funds has been practiced by the Executrix, it is therefore,

'Ordered, Adjudged and Decreed that the Petition of John F. Kirk and the Palm Beach Clinic be and the same are hereby denied.'

The issue which we consider determinative of this appeal is stated by appellee as follows:

'Is the personal representative of an estate, which is the sole owner of the outstanding stock of a corporation, personally liable to the creditors of the estate, where the business of the corporation is continued without objection by the creditors or a showing of fraud, waste, misappropriation or negligence by such personal representative, even though such corporate business is continued without (an) order of the Probate Court?'

After a careful study of the transcript of testimony adduced in this case, we have found no evidence of mismanagement of the estate and are compelled to abide by the findings of the lower court. Without reciting all the details of the numerous transactions conducted by executrix, the germane facts for the purpose of this opinion are as follows:

Although the appraisal of $100,000 was never formally objected to by the executrix, certain testimony in the record reflects that this figure was in fact an inflated value which was precipitated by the $88,000 valuation placed on the stock of decedent's corporation. The appraisers testified that they took the book value of the stock as reported to them by the corporation's accountant as being the true value of the stock. Lee Shepard, Jr., a C.P.A. who had performed the accounting for the company for eight years prior to the death of the decedent, testified that the actual value of the stock was less than the appraised book value of $88,445.51; that the accounts receivable appraised at $25,000 were actually worth only a small fraction of that amount due to the collectibility of the accounts; that the lease on the corporation's premises which was appraised at $18,000 was actually expired and should be charged off entirely; and that at the time of decedent's death, the business could not meet its obligations and was showing a definite loss. Thus the business, according to Shepard, had little or no sale value and liquidation would have returned a very low price at the time the executrix took it over.

One of the co-founders of the business with deceased remained with the business as the first manager thereof after deceased's death. He assured the executrix that the business was...