Court Opinion

ID: 3393658
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:57:37.425741+00
Date Added: 2024-06-11T14:02:53.220465
License: Public Domain

J.N. Hollingsworth and Juanita T. Hollingsworth were married in July, 1913. Mr. Hollingsworth was addicted to intemperate use of intoxicating liquors, which habit he began to form about June, 1919. He died in February, 1926. From the time he began the intemperate use of intoxicating liquors until the time of his death Mr. Hollingsworth at irregular intervals became drunk and for periods of time of varying duration passed through phases of intoxication from slight dethronement of his reason to unconsciousness and incapacity to control himself. When in such latter state he many times suffered accidents in some of which he received serious injuries and narrowly escaped being killed. In one such experience he received injuries from which he died.
When not under the influence of intoxicants Mr. Hollingsworth was a capable business man and by industry and frugality built up an estate of comparatively large value. His domestic relations were pleasant. His wife, helpful and frugal, contributed, in his estimation, greatly to the accumulation of his estate. In recognition of which and his duties to her, Mr. Hollingsworth contemplated providing for his wife's future, in the event of a fatal accident to himself and consequent untimely death by transferring to her a portion of his property.
In June, 1920, J.N. Hollingsworth sold to his brothers, A.F., J.L., and B.W. Hollingsworth, the former's interest in a herd of cattle. The three brothers to whom he sold the cattle constituted a partnership known as Hollingsworth Brothers. In payment for the cattle, the Hollingsworth *Page 97 
Brothers executed promissory notes aggregating in amount more than thirty thousand dollars. Those notes were secured by a mortgage executed to B.N. Welles, W.H. Seward and T.B. King, as Trustees. The notes and mortgage were dated October 25, 1923.
The Arcadia Citrus Growers Association, a Florida Corporation, in April, 1929, exhibited its bill of complaint against Juanita T. Hollingsworth, who had been appointed administratrix of her husband's estate, in both her representative and individual capacity, and against B.F. Welles, R.O. Turner and Elmer Garner, as Trustees. The bill alleges that the Hollingsworth Brothers' mortgage was foreclosed and the mortgaged property was bought by Welles, Turner and Garner, as Trustees for the creditors. The creditors authorized the Trustees to dispose of the property, which they did, and have on hand a large sum of money belonging to "said creditors," a large portion of which it is alleged belongs to the estate of J.N. Hollingsworth, deceased.
It is alleged that the trustees "are soon to pay out to the creditors one of whom is the estate of James N. Hollingsworth, fifteen per cent. on its claim against the said estate of James N. Hollingsworth," and from time to time the Trustees will make other collections from the sale of the property, and will pay out to Juanita T. Hollingsworth the moneys belonging to the estate of James N. Hollingsworth.
It is alleged that on February 25, 1926, J.N. Hollingsworth owed the complainant Arcadia Citrus Growers Association a large sum of money which was evidenced by promissory notes given by Hollingsworth. That the complainant's claim was reduced to judgment in March, 1928. That the judgment is for the sum of four thousand, five hundred and forty-nine dollars and seventeen cents and costs. It is *Page 98 
alleged that Hollingsworth died leaving a large estate, part of which consisted of an interest in the mortgage given by Hollingsworth Brothers to Welles, Seward and King, as Trustee; that such interest amounted to thirty thousand dollars.
The bill alleges that Juanita T. Hollingsworth claims that the money in the hands of Welles, Turner and Garner, as Trustees, belongs to her and not to the estate of her husband, and that she does not intend to use it for the payment of the "debts of the said estate." The complainant alleges that if Mrs. Hollingsworth receives the money from the Trustees and uses it for her personal needs the complainant will not be able to realize upon its judgment against the estate.
The bill alleges that Mrs. Hollingsworth has no interest in the funds in the hands of the Trustees and that she has never owned the notes which were given to James N. Hollingsworth and secured by the mortgage.
The bill alleges that the estate of James N. Hollingsworth is insolvent. That the Trustees intend to pay over the money in their hands to Mrs. Hollingsworth.
The bill prays that the money in the hands of the Trustees and now claimed by Juanita T. Hollingsworth be decreed to be the property of the estate of her husband and is subject to the payment of the complainant's judgment, that Mrs. Hollingsworth be enjoined from claiming the fund in the hands of the Trustees and that they be enjoined from paying it over to Mrs. Hollingsworth.
A demurrer to the bill by Mrs. Hollingsworth was overruled.
In July, 1929, Mrs. Hollingsworth answered the bill. The answer admits that she is administratrix of her husband's estate; that she has never been ordered to take charge of *Page 99 
the real estate of which her husband died seized and possessed; and her custody and management of the assets of the estate is confined to such possession as she has of the personal property of the estate, which is of a small amount and does not exceed $2870.00, in value. The complainant's judgment against her as Administratrix is admitted. The substance of the answer as to the fund alleged to be in the hands of the Trustees is that J.N. Hollingsworth had no interest in the Hollingsworth Brothers' mortgage at the time of his death nor in the notes which had been issued to him and secured by that mortgage because soon after the date of the notes and mortgage, which was in October, 1923, J.N. Hollingsworth endorsed and turned the notes over to the defendant to have and to hold in her own right as her individual property for her individual use and benefit.
It is averred that at that time Mr. Hollingsworth was not insolvent but was seized and possessed of ample means to meet all of his debts and obligations then existing.
The answer avers that when the Hollingsworth Brothers' mortgage was foreclosed for the use and benefit of the creditors, that Mrs. Hollingsworth as one of the beneficiaries of the trust individually and in her own right claimed the "fund arising from the foreclosure to the extent of said notes so endorsed, owned and held by her, and exhibited said notes and proved said claim in her own behalf and the same was allowed unto her" as the owner of the notes in her individual capacity and not as Administratrix, and that "under and by virtue of said decree in said foreclosure proceeding made and entered, she has been awarded, given and decreed and found entitled to the use and benefit of said funds as the holder and owner of said notes and now has full right, title and claim thereof and thereto individually and in her own right and for her own use and benefit." *Page 100 
In June, 1930, the Florida Trust and Banking Company intervened and answered the bill averring that J.N. Hollingsworth became indebted to the bank for money loaned and executed a mortgage upon property in Arcadia to secure the payment of the debt. That Hollingsworth was unable to pay the debt. That after the death of Hollingsworth the bank foreclosed its mortgage. The bank purchased the property which was the home place of the mortgagor and obtained a deficiency decree against the estate in the sum of twenty-eight hundred and fifty dollars.
A motion to strike portions of the bank's answer was overruled.
Mrs. Hollingsworth answered the bank's pleading which was in the nature of a bill for affirmative relief in which it also sought to participate in the funds held by the Trustees. The answer averred that there had been paid by Mrs. Hollingsworth to the bank one thousand dollars from her own funds, and separate estate; that more than two thousand dollars in improvement had been made on the property, all of which the bank had received the benefits of in acquiring the property at the sale. That it was agreed between her and the bank that the suit to foreclose would be of a "friendly nature" and principally to cure certain defects in the title to the property of which they both knew and that no deficiency decree would be taken against the estate, but that the deficiency decree was entered by "oversight and inadvertence." It is also averred that Mrs. Hollingsworth expressly and unmistakably stated that the notes held by her were her property and owned by her in her own right.
The answer sets out at length the details of the transaction with the Hollingsworth Brothers, and the endorsement of the notes to her by her husband, and at such time her *Page 101 
husband was not insolvent, and in the effort to collect the debts due by the Hollingsworth Brothers the bank participated with Mrs. Hollingsworth and knew that she claimed the notes as her individual and separate property.
It is averred that in the foreclosure proceedings of the Hollingsworth Brothers' mortgage to the Trustees, all of the creditors of Hollingsworth Brothers including Mrs. Hollingsworth and the bank were parties complainant, and Mrs. Hollingsworth asserted her claim as owner of "said five notes" as her individual property and it was decreed that the "said notes and the amount due thereon principal and interest was due unto her" in her own right and as her property.
The answer sets up fully the facts relating to the financial condition of J.N. Hollingsworth at the time of the foreclosure of the Hollingsworth Brothers' mortgage, showing his solvency and that the debt of the Banking Company accrued subsequently to the transfer to her of the Hollingsworth Brothers' notes. That the indebtedness to the Arcadia Citrus Growers Association consisted also of a merger of some small sum at a prior date with an indebtedness which occurred and accrued for money advanced to J.N. Hollingsworth long after the transfer of the notes by him to Mrs. Hollingsworth. And the claims of the creditors of J.N. Hollingsworth existing at the time of his death consisted of debts accruing against him subsequently to and not existing at the time of the transfer of the notes to her. That no execution ever existed on the decree in favor of the bank nor on the judgment obtained by the Arcadia Citrus Growers Association.
The answer contained a demurrer to the bill or answer of the bank.
On motion certain portions of the answer of Mrs. Hollingsworth *Page 102 
to the bank's claim was stricken. But the manner in which the record is made up and the unclear references to the parts stricken render it exceedingly difficult to identify them.
We have read the answer carefully, however, and are of the opinion that no part of it would be subject to the rather drastic procedure of striking it from the files. While the answer is unnecessarily prolix and contains much of the evidence by which the essential and ultimate facts averred would be established it cannot be said that the matter stricken served no purpose and had no bearing upon the merits of the controversy, and was wholly insufficient and had no bearing on the equities of the case. See: Pickard v. Brinkley, 89 Fla. 116, 103 So.2d 417; Holgate v. Jones,94 Fla. 198, 113 So.2d 714; Busch v. Baker, 79 Fla. 113,83 So.2d 704.
The method adopted by those following a certain school of practice requires a lengthy and detailed account of the transactions constituting the evidence of the matter which produces the controversy and oftentimes a construction upon the particular and several matters forming part of the whole controversy. In such case an answer which attempts to assert a different and less favorable construction to that asserted by the bill may not be said to be the subject of a motion to strike. The matter should be left by the chancellor to be considered in the making of an appropriate decree on the merits in accordance with equitable principles. See: Falsten Realty Co. v. Kirksey,103 Fla. 225, 137 So.2d 267.
On September 11, 1931, the bank amended its affirmative answer by averring that it did on April 21, 1928, have issued out of the Circuit Court an execution upon the deficiency decree obtained by it and the Sheriff of DeSoto *Page 103 
County in December, 1930, returned the execution "unsatisfied." Which of course is not the equivalent of a "nulla bona" return.
A great deal of testimony was taken in the cause and on June 1, 1932, the Court found that the controversy in the case was over the ownership of five promissory notes of the Hollingsworth Brothers to J.N. Hollingsworth. That they were never given to Mrs. Hollingsworth. He also found that the judgment obtained by the Arcadia Citrus Growers Association was based upon a note dated in July, 1924, and that of the bank on a note dated in September, 1924, that both were renewal notes and had been due or running prior to the year 1923 and were unpaid at the time of the alleged gift, and the credit to Hollingsworth was extended on the faith of the interest which he had in the firm of Hollingsworth Brothers.
The Chancellor held that those notes constituted the principal part of the estate of J.N. Hollingsworth from 1923 to the date of his death. That he was heavily indebted to many persons including the complainant and the bank, and that much of Hollingsworth's property was during that time not subject to execution as the same was heavily encumbered and that he was insolvent in 1923 and subsequently thereto continuously to the date of his death. The Court then holds that the "said gift was null and void as the said J.N. Hollingsworth, Jr., was not in position at the time to make a gift of the corpus of his estate." The gift referred to the notes of Hollingsworth Brothers to J.N. Hollingsworth as to which in the first part of the decree the Court expressed the "opinion that the said notes were never given to the defendant."
The Court ordered and decreed that the funds in the hands of the Trustees should be utilized first to pay the *Page 104 
costs and then pay to the complainant and the bank, and that Mrs. Hollingsworth individually be enjoined from claiming the fund in the hands of the Trustees.
From that decree an appeal was taken and this Court on June 7, 1934, affirmed the decree. See foregoing opinion, page 90,165 So.2d 369.
On application of solicitors for Mrs. Hollingsworth a rehearing and reargument was granted. The case was reargued on October 10, 1934, before the Court sitting in a body.
The bill in this case was not framed upon the theory that at the time of the alleged transfer of the notes from J.N. Hollingsworth to his wife he was indebted and insolvent and therefore such transfer of the notes was a fraud upon his creditors, but it was framed upon the theory that the estate being insolvent when the suit was brought those notes constituted at the time of his death a part of his estate which was alleged to be a "large estate." That Mrs. Hollingsworth who was administratrix asserted a claim to the ownership of the Hollingsworth Brothers notes and that if the money in the hands of the Trustees should be paid over to her on account of the Hollingsworth Brothers indebtedness as represented by their notes she would not use it to pay the debt due by the estate to the Arcadia Citrus Growers Association, the Complainant, but would use the money for her individual purposes and that by so doing she intends to "defraud and defeat" the complainant in the collection of its judgment.
In the opinion of this Court as rendered and filed June 7, 1934, supra, the view was expressed that the question raised by the demurrer upon this phase of the case was one of equitable cognizance notwithstanding Section 5647, et seq., Compiled General Laws, 1927. *Page 105 
It is the view of the writer of this opinion that Section 5647,et seq., C.G.L. 1927, affords in such cases as described by the bill an adequate statutory remedy where the Administrator files a written suggestion on oath, in the office of the County Judge, of the estate's insolvency. The statute makes it the duty of the Administrator to file such suggestion when he believes the estate to be indebted to an amount greater than the value of the estate.
In Holliday v. McKinne, 22 Fla. 153, it was held that the method prescribed for ascertaining the insolvency is exclusive.
I do not regard the case of Benedict v. Wilmarth, 46 Fla. 535,35 So.2d 84, as authority for the theory on which the bill in this case was framed. In that case a widow as one of the executors of the will of her deceased husband filed a bill to establish her right to dissent from the provisions of the will and to elect to take a child's part in the estate. There was no controversy between her and the creditors as to whether property claimed by her as her own individual and separate property belonged in fact to the estate.
The bill in this case does not allege that Mrs. Hollingsworth as Administratrix of the estate has refused to file the suggestion of insolvency. From any allegation in the bill to the contrary, the Administratrix may believe the estate to be of greater value, than the amount of the debts alleged by the bill to be due the complainant and other creditors.
At common law the creditors of a person who has died may resort to equity against the Administrator of his estate to compel an account of the assets of the estate, to discover and set them forth and show the application the Administrator has made of them. Courts of equity exercise jurisdiction over executors and administrators in the administration *Page 106 
of assets of an estate to compel them in the due execution of their trusts to apply the property to the payment of creditors and legatees. More especially is this true when the Administrator claims a portion of this property alleged by creditors to belong to the estate and the claim of the Administrator is adverse to the interest of the creditors. See: 7 American and English Encyclopedia of Law 400; 18 Cyc 910; 23 C.J. 1183, Smith's Equitable Remedies of Creditors 154.
In such case the suit must be for the benefit of all creditors or parties in interest, because the purpose is to reach a fund primarily liable for the payment of the debts of intestate. See: Smith's Equitable Remedies of Creditors 107; McFarlan v. McFarlan, 155 Mich. 652, 119 N.W. 1108.
The Statute Section 5647, et seq., C.G.L., supra, was designed to supplement the rule above stated, but it does not supersede it but leaves the rule available in cases like the one at bar where the claim of the Administrator to the property in question is adverse to the creditors and the Administrator declines to make the suggestion of insolvency contemplated by the statute.
The bill should have alleged that Mrs. Hollingsworth as Administratrix knew that the estate was insolvent but refused to file the suggestion required by the statute. It would seem that the Administrator should be given an opportunity to contest that point and to show that the estate was not less in value than the amount of its indebtedness.
Our statutes upon the subject of administrators and executors from the qualification and appointment of legal representatives to the provisions applicable to settlement by the court sections 5521 to 5659 C.G.L. 1927, are very full and complete. A bond is required of the Administrator, respect being paid to the value of the estate, Section 5534 C.G.L. *Page 107 
Annual settlements are required, Section 5546, C.G.L.; provision for the removal of the Administrator is made, Section 5560 C.G.L.; provisions for appraisement and inventory, Section 5592 C.G.L.; notice to creditors, Section 5597, C.G.L.; presentation of claims by creditors; Section 5599 C.G.L.; order in which the debts shall be paid Section 5610 C.G.L.; presentation of claims and effect of non-claim are provided for, Section 5611 C.G.L.; sales of personal and real property are regulated, Sections 5624 to 5643 C.G.L.; and it is expressly provided that where a creditor obtains a judgment or decree for his claim when the same is denied or contested by the Administrator the decree or judgment shall be filed with the judge for pro rata payment as other claims are required to be filed, Section 5654, C.G.L.
In all the above provisions the creditors are protected and provision made for them to be heard.
So when a creditor decides to apply to a court of equity for an accounting by an Administrator and listing of property claimed by him as his own which the creditor claims belongs in fact to the estate and the Administrator's claim is alleged to be antagonistic or injurious to the interests of the creditor, the latter should allege in his bill not only that he has complied with the law in the matter of filing his claim to show that it is not affected by this statute of non-claim but should by appropriate allegations show the failure of the Administrator to comply with his duty in the matter of the correct listing of the properties of the estate, the proper valuation thereof by the appraisers, the insolvency of the estate, the knowledge thereof by the administrator and his refusal to comply with the statute requiring the suggestion of insolvency.
On these questions the Administrator is entitled to a hearing. *Page 108 
In many of these particulars the bill of complaint is deficient. It is in its last analysis only an attempt to garnish the Trustees and subject money in their hands to the payment of claims which they assert constitute valid debts against the estate.
The bill seeks no relief from a fraudulent transfer of property by an insolvent debtor nor from the effect of a voluntary transfer of property with intent to hinder or delay creditors in the collection of their just demands. There are wanting in the bill some of the necessary elements of a general creditor's bill. The decree of the Chancellor rests upon the proposition that the transfer of the notes by Hollingsworth to his wife was a voluntary transfer made by Hollingsworth at a time when he was insolvent, that it was therefore a fraud upon his creditors whose demands were made in the faith and upon the credit of Hollingsworth's ownership of the notes so fraudulently transferred and therefore the transaction was a fraud upon his creditors and the proceeds from the collection of such notes are subject to the payment of the complainant's demand.
After duly considering the argument of counsel upon a rehearing of the decision rendered in this case on June 7, 1934, three members of the court are of the opinion that said decision and opinion should be receded from, that the Chancellor's final decree be reversed and that the order overruling the demurrer to the bill should be reversed, with leave to the complainant to amend its bill of complaint.
BUFORD, J., concurs.
BROWN, J., concurs in the conclusion.
               ON PETITION FOR A FURTHER REHEARING