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Nelson v. Beverly Beach Properties

Supreme Court of Florida, Special Division A
Jul 14, 1950
47 So. 2d 310 (Fla. 1950)

Summary

stating that "when equity takes hold it should retain jurisdiction until all matters between the parties have been disposed of"

Summary of this case from Graham v. Graham

Opinion

May 12, 1950. Rehearing Denied July 14, 1950.

Appeal from the Circuit Court for Broward County, C.E. Chillingworth, J.

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.


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 Mexico, 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 the sums paid on the purchase of this property, be set aside in fee simple for the Beverly Beach Properties, Inc., and the remainder regained by the seller.

"That in the event restitution cannot be equitably affected as just outlined herein, then it shall be effected by an appropriate money decree in favor of the Beverly Beach Properties, Inc., and against the seller — or rescission shall be denied."

In view of this language it cannot be gainsaid that the chancellor was scouting for a fair and equitable basis on which to determine this most complex, difficult and vexatious litigation. Other provisions of the decree show that the chancellor retained jurisdiction to hear further evidence, determine the precise equities between Beverly Beach Properties, Inc., and other parties to the cause, including appellants. In view of such pronouncements, we have reached the conclusion that the question of restitution should not be adjudicated by us at this time because the decree appealed from shows conclusively that the chancellor is not through with it. We think he should be permitted to conclude his findings on the matter and when he had done that, he should proceed to adjudicate this and all other questions raised in the litigation.

We think the trial Court was correct in holding that Olof Zetterlund was at all times a citizen and resident of the State of Florida and that the guardian appointed by the Superior Court of California had no authority whatever to function as such in this State. While it is quite true that Olof Zetterlund spent the last four years of his life in California, New Mexico, Oregon and Colorado, he has lived in Florida over fifty years, all his property was in this State except "two suits of clothes, some shirts, socks and shoes." He claimed his home and business in this State, he had no property in California and in fact, was carried there for the sole purpose of improving his health. He was kept there for that purpose and it would not be an undue appraisal of the record to hold that he was kept there because of physical and mental inability to return home under his own power. During the entire sojourn in California he never expressed a desire to remain there and except for his health he never would have been there.

Appellants also make much ado about that part of the chancellor's decree dismissing the bill of complaint as to the Slutskys, E.L. Lockhart and Ellen W. Burdet. The answer to this contention turns largely on the interpretation of the evidence as to the part these parties played in the career of Olof Zetterlund and in the various aspects of this litigation. We have examined the evidence and we are not inclined to reverse the chancellor on this point. He had the parties before him, knew the situation and was in much better position to evaluate the rights and position of these parties than we are. Besides he retained jurisdiction to take further evidence and make findings of law and fact. He can still modify the decree as to them if circumstances warrant.

Some features of the decree appear to have been intended as final, while others the chancellor did not intend to be so. As previously stated, at least five appellate proceedings are involved. They present difficulties which may render it impossible to do equity to all concerned. Some may have to suffer a loss or it may resolve itself into the question of approaching equity as near as it is possible to do so under the circumstances. The chancellor appears to have had the view that the defendants were negligent in accepting and acting on the California guardianship proceedings and that the mortgagees negligently failed to record the mortgage securing the unpaid purchase price.

Cross appellants Rasco and Burdet contend that the chancellor's decree as to them should be reversed because: (1) The bill of complaint did not state a cause of action against them and should have been dismissed. (2) That Rasco was acting as attorney-broker for Olof Zetterlund and that Burdet was acting as agent of the administrator of his estate, that as attorney-broker, he, Rasco, produced a purchaser ready, able and willing to buy and was therefore entitled to the compensation allowed him. (3) That the executor-legatee and other interested parties have been guilty of laches and are precluded from any relief against Rasco or Burdet. (4) As to James Q. Burdet, it is contended that he and his wife were employees of Olof Zetterlund and his agent, Dora Miller, and that the decree for a money judgment against them is illegal and unenforceable.

In response to contention (4) it is enough to say that we are not clear as to why the bill of complaint was dismissed as to Ellen W. Burdet. She and her husband were employees of Zetterlund and they, with other representatives of his, were responsible for initiating the litigation that snarled this case. We find no reason to review the chancellor on this point and we think as the chancellor found, the bill of complaint was ample to state equity against them. The decree against Rasco finds support in the record and will not be disturbed at this time. One may undoubtedly qualify as both a lawyer and a real estate broker, but representing a client in both capacities at the same time about the same matter, is of doubtful propriety unless it is clearly shown that both services are justified and the line of distinction between them is clearly marked.

This brings us to a consideration of the questions raised by appellees and cross-appellants Elsie Z. Weaver and Helen Wrigley McGarry. It is not necessary to detail all the circumstances under which they became parties to this litigation. It is sufficient to say that in October, 1927, Olof Zetterlund and his wife engaged Paul D. McGarry to foreclose a mortgage executed by Atlantic Shores Corporation in favor of the Zetterlunds. This suit was concluded in March, 1929, and the mortgagors bid the property in for $200,000. At their direction the Master conveyed the lands to Elsinor Beach Corporation. Olof Zetterlund and his wife Jeanette were divorced in 1932 and she died in May 1940. Prior to her death she assigned her stock in Elsinor Beach Corporation to her daughter Elsie Z. Weaver. Jeanette Zetterlund owned 2843 shares of Elsinor Beach Corporation stock and Paul D. McGarry owned 601 shares. In January 1942 Elsie Z. Weaver and Paul D. McGarry instituted a partition suit in the Circuit Court of Broward County against Elsinor Beach Corporation, Halland Land Company and Olof Zetterlund. The bill of complaint prayed that the trust by which the legal title to the property was held by defendant be terminated and adjudicated by the Court. At this point Dora Miller applied to the Superior Court of California to be appointed guardian of the person and estate of Olof Zetterlund. Negotiations were then precipitated for settlement of the partition suit. A basis of settlement was reached and executed in July 1945. The agreement was submitted to and approved by the Chancellor but without knowledge on his part of the infirmities of Olof Zetterlund. The consideration to Elsie Z. Weaver and Paul D. McGarry was $170,000 with accrued interest. The lands involved were conveyed to Elsinor Beach Properties Inc. In August 1946 the grantee conveyed a portion of said lands to the Slutskys.

In the decree appealed from the chancellor set these transactions aside and ordered return to the status quo as of June 7, 1945, without prejudice to the rights of the parties and to the entry of any decree that may be rendered in the future. August 21, 1945 Olof Zetterlund died and January 20, 1947 Samuel Nelson was appointed executor of his estate. December 20, 1946, four months prior to the institution of the present suit, Paul D. McGarry died and on December 27, 1946, his widow Helen Wrigley McGarry was appointed executrix of his estate. The instant suit was commenced April 24, 1947, twenty-one months after the entry of the consent decree in the partition suit. One purpose of the instant suit was to set aside the consent decree in the partition suit and recover the amount paid Paul D. McGarry and Elsie Z. Weaver.

It is first contended that as to Elsie Z. Weaver and Helen Wrigley McGarry, there can be no "effective restoration of the status quo as of June 7, 1945" without a complete rescission of all transactions occurring after the latter date which affected the subject matter of the suit.

We have heretofore pointed out that it may not be possible to effectuate a return to the status quo as of June 7, 1945, but that since the chancellor held the matter in abeyance for further testimony and consideration all that could be done was to approach as near to that point as possible. It appears from the decree appealed from, that the judgment against Elsie Z. Weaver and Helen Wrigley McGarry was without prejudice to the entry of any decree that may be entered in the cause in the future. It would seem therefore that the chancellor left this aspect of his decree open subject to further consideration, and being so, it should not be disturbed at this time.

It is next contended that the chancellor erred in that part of the decree appealed from by which he required Elsie Z. Weaver and Helen Wrigley McGarry and other defendants to forego the benefits of a final and conclusive declaratory decree and to resume the prosecution of the partition suit or some other litigation to determine and enforce the rights and equities of the parties.

It is true that the bill of complaint prayed that the court assume jurisdiction of the whole controversy and settle all disputes, questions and problems relating to the numerous transactions described and declare the rights, status and legal relations between the parties. The bill of complaint was filed under Chapter 21820, Acts of 1943, being the statute authorizing declaratory decrees. The bill was held to contain equity.

The questions in this case are involved and difficult. This condition was precipitated when the California guardian started proceedings for the purpose of winding up the affairs of Elsinor Beach Corporation and Halland Land Company, Zetterlund's corporations in Florida. These proceedings initiated a chain of circumstances that have so complicated the settlement of Olof Zetterlund's estate that, as previously stated, it is now doubtful if a fair and equitable adjustment can ever be effected, because of the manner in which the properties and individuals have become involved.

This Court is committed to the doctrine that when the facts and circumstances in a cause become complicated or involved, equity should take jurisdiction, make a thorough examination and enter a decree that will not only settle the equities among the parties, but will adjudicate their rights in the subject matter of the litigation. It is also settled that this procedure is justified when more than one suit can be avoided. In other words, when equity takes hold it should retain jurisdiction until all matters between the parties have been disposed of. Winn Lovett Grocery Co. v. Saffold Bros. Produce Co., 121 Fla. 833, 164 So. 681. The difficulties and ramifications of this case are such that it justly merits the application of this rule.

In this state of the pleadings, if the chancellor should find that the consent decree in the partition suit is for any reason defective, he should proceed in this suit to determine their rights and interests in the rem and enter a final decree binding all the parties and direct the court below to enter his judgment accordingly. It would be a travesty on the administration of justice to remand the cause to the trial court for any species of new or additional litigation. With all the chancellor has before him, when he gets through with this case he should be in position to settle all the equities presented.

It follows that the Chancellor is affirmed as to all questions discussed except the last one relating to further litigation as to some of the parties. In this he is reversed. Other questions raised are not considered because a discussion of them would require a long opinion that would serve no useful purpose. In fact, it has required much labor to bring this opinion within reasonable bounds. Only such features of the case as were essential to do this have been discussed.

Affirmed in part, reversed in part.

ADAMS, C.J., and THOMAS and HOBSON, JJ., concur.


On Petition for Rehearing.


The parties to this cause have filed petitions for rehearing or clarification. As to Lockhart, Rasco and others, we affirmed the judgment of the chancellor. It is contended that since we affirmed as to these parties and dismissed the case as to others, the petitioners are not certain as to their status since the cause was reversed for further testimony and final judgment as to all the parties. It appears that the point of uncertainty is whether or not they are parties to further proceedings in the case.

We have rarely if ever been confronted with a case that ran into such involved and tedious complexities. We are convinced that the rights of all the parties should be settled in this litigation and reversed the judgment primarily for that purpose. Nothing said in our opinion was intended to prejudice the rights of any litigant, or to impede the chancellor in arriving at a proper decision. We do not think that it will be possible for the chancellor to restore all the parties to their former status. The best he can do will be to place them in such position as will approach as near to justice as it will be possible to do. It may well be that when the whole case is spread out before the chancellor, his stock of equity will be strained to the vanishing point in approaching as near as he can to justice for all concerned. It may be that in order to balance the equities he will have to take from those who precipitated the controversy and add to those who suffered though free from blame.

The trial judge stands closer to the fountainhead of justice than any other person in our judicial system. Under that system he will necessarily be confronted at times, as in this case, with difficult situations in which he will be called on to declare the law. When he exercises that high prerogative in the case at bar, it may be that the judgment appealed from should stand without further ado as to those against whom it was affirmed, but if he finds it necessary to bring any or all of them back into the case in order to rearrange the equities in the interest of justice, or if he should be impelled toward denying rescission and cancellation because he might find it impossible to place the parties in statu quo, we are not now prepared to say that we will hold him in error for doing so.

Each and every petition for rehearing is therefore denied.

ADAMS, C.J., and THOMAS and HOBSON, JJ., concur.


Summaries of

Nelson v. Beverly Beach Properties

Supreme Court of Florida, Special Division A
Jul 14, 1950
47 So. 2d 310 (Fla. 1950)

stating that "when equity takes hold it should retain jurisdiction until all matters between the parties have been disposed of"

Summary of this case from Graham v. Graham
Case details for

Nelson v. Beverly Beach Properties

Case Details

Full title:NELSON ET AL. v. BEVERLY BEACH PROPERTIES, INC., ET AL

Court:Supreme Court of Florida, Special Division A

Date published: Jul 14, 1950

Citations

47 So. 2d 310 (Fla. 1950)

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