Watkins v. Johnson , 139 Fla. 712 ( 1939 )

On December 6, 1927, J.D. Watkins died testate in Alachua County, Florida, and his will was probated in the County Judge's Court of Alachua County, and Lillian J. Watkins was appointed and qualified as executrix, and the Commercial Bank Trust Company was appointed as administrator, with the will annexed. The customary notice to creditors to file claims was published and the period of time allowed by law therefor expired in December, 1929, and the following claims were filed:

Phifer State Bank, two notes aggregating ......... $ 10,000.00

First National Bank of Gainesville, (liability as endorser) ................................... 4,000.00

Florida National Bank of Jacksonville (Note of J.D. Watkins for $20,000.00 on which $4,000.00 principal had been paid ........................ 16,000.00

Florida National Bank, note of J.D. Watkins for $7,500.00, balance of principal ............ 7,273.38 Carrie E. Watkins, John W. Barr ................... 377,489.72 ----------- $414,763.10

The Phifer State Bank, on December 18, 1929, instituted suit in the Circuit Court of Alachua County against the estate and a default judgment in the sum of $12,298.60, including principal, interest and attorneys fees, was entered on March 8, 1930, against the executrix and administrator of the estate. The writ of execution on the judgment was sent to Duval County, Florida, and a levy was made upon real estate at that time standing in the name of J.D. Watkins, and the same was advertised and sold, and title thereto taken in the name of the Phifer State Bank. The writ of execution was then delivered to the Sheriff of Alachua County, and a levy thereunder made against certain lands situated in Alachua County appearing in the name of J.D. Watkins, and the sale advertised to be held on the 3rd day of November, 1930.

The representatives of the Watkins Estate, on October 27, 1930, filed their bill of complaint in the Circuit Court of Alachua County, Florida, against the Phifer State Bank and the Sheriff of Alachua County, pursuant to the provisions of Section 5653, C. G. L., and suggested the insolvency of said estate and prayed that the Circuit Court of Alachua County assume jurisdiction thereof and administer upon the same as an insolvent estate. The bill of complaint recited that the lands levied upon by the Phifer State Bank, a judgment creditor, were of greater value than the amount of the judgment and that the estate had no funds, nor was it able to raise money because of the condition of the real estate market in 1930, and that if the sale was not enjoined, the lands would be sold and bought by the Phifer State Bank, a judgment creditor, at a nominal price and the assets of great value would be lost to the estate, and the Phifer State Bank unjustly enriched and unlawfully preferred over other creditors of the estate. Other allegations appeared in the bill of complaint so as to show a substantial compliance with all the requirements of Section 5653, C. G. L. All the then known creditors of the estate were made parties defendant.

Upon hearing of the application for temporary injunction against the sale of the property under execution, the Honorable A.V. Long, Circuit Judge, entered an order restraining the sale.

Pursuant to negotiations of counsel for the Watkins Estate and creditors thereof, an agreement was reached, and petition drafted and presented to the Honorable A.V. Long, Circuit Judge, on November 30, 1931, seeking an order permitting and approving a compromise settlement of the claims of the creditors against the Watkins estate. The proposed settlement as described in the petition was approved on November 30, 1931, by Honorable A.V. Long, Circuit Judge.

On the 20th day of April, 1935, the Phifer State Bank filed its motion to dismiss the proceedings to administer upon the estate and to restrain the sale of the Alachua County property under the writ of execution of the Phifer State Bank against Lillie J. Watkins, et al., on the grounds: (a) that the suit was filed on October 27, 1930; (b) Phifer State Bank filed its answer thereto on October 29, 1930; (c) petition for compromise settlement and an order approving the same was made October 28, 1931, and the compromise settlement had not been carried out; (d) the complainants had not taken any steps to bring the cause to a final hearing for more than three years past; (e) the motion to dismiss was filed under Section 14554, Laws of Florida, Acts of 1929.

It was made to appear under the compromise plan that the Phifer State Bank received the initial payment of $1,000.00 and a conveyance of real property to it situated at Micanopy, and a reconveyance by the bank to the representatives of the estate of certain real estate situated in Duval County obtained at execution sale, and that the depression had rendered it impossible to carry out the compromise settlement among creditors as approved by the Circuit Court of Alachua County.

On the 20th day of April, 1935, Honorable H.L. Sebring, Circuit Judge, made and entered an order dismissing the suit filed on October 27, 1930, under Chapter 14554, Laws of Florida, Acts of 1929, upon the theory, no doubt, that it was a chancery proceeding and controlled thereby.

On September 7, 1936, complainants filed a petition to vacate the order dated April 20, 1935, dismissing the proceedings, and it was cited in the petition to vacate said order that the compromise settlement existing between the estate and the Phifer State Bank had been in part performed and the compromise settlement, in part, had been carried out by the parties and that the agreement was legally binding on them. The petition further recited that financial conditions were improving and a negotiation was pending for the sale of six hundred acres of land at a price of $20 per acre and if the trade went through, the compromise settlement between the Watkins Estate and the Phifer State Bank could be fully performed. The petition further recited that the order of dismissal dated April 20, 1935, was predicated on Chapter 14554, supra, and controls equity and common-law suits, but the same is inapplicable to the case at bar because the same is a proceeding in the administration of the Watkins Estate pursuant to Section 5653, C. G. L., and the Circuit Court was without jurisdiction or power to enter the order of dismissal dated April 20, 1935.

On February 8, 1937, the Honorable H.L. Sebring made and entered an order denying the petition to vacate and set aside the order dated April 20, 1935.

The case at bar turns on the point of whether or not the suit filed in the Circuit Court of Alachua County, Florida, on October 27, 1930, is an equity suit and controlled by Chapter 14554, supra, or a suit filed pursuant to Section 5653 C. G. L., and brought for the purpose of administering the Watkins Estate alleged to be insolvent. The lower court held the same was an equity suit controlled by Chapter 14554 and not a suit brought pursuant to Section 5633 C. G. L., for the purpose of administering an insolvent estate.

We think the bill of complaint contained, substantially, the allegations required by Section 5653 C. G. L., and that the order restraining the sale of the property of the Watkins Estate under the writ of execution based on the judgment in behalf of the Phifer State Bank was proper and without error. While a partial administration of the estate was had in the County Judge's Court of Alachua County, Florida, and that court had full and complete jurisdiction to administer thereon until the filing of the bill in chancery by the representatives thereof containing allegations required by Section 5653 C. G. L., coupled with the petition of the representatives of the estate filed in the circuit court on November 28, 1931, and the order thereon dated November 30, 1931, had the effect in law of transferring from the County Judge's Court of Alachua County, Florida, the administration of said probable insolvent estate of the value of $500.00, or more, to the circuit court. The circuit court had jurisdiction to continue the administration thereof and not the county judge's court. The rights and remedies of creditors of the estate could not be affected by the transfer of the jurisdiction nor the practice or procedure in connection therewith be different after the transfer.

We do not think it necessary for a disposition of this case to consider at this time the legal sufficiency of claims against the estate, but the circuit court has the power under Section 5653 C. G. L., to proceed and settle the estate and order payment of claims pro rata as the assets of the estate may justify so as not to permit or allow an unlawful preference of one claim over another, but to order payment thereof as required by law.

The lower court, on April 20, 1935, when considering a motion to dismiss the bill of complaint filed pursuant to Section 5653 C. G. L., did make and enter all order sustaining the motion to dismiss upon the theory that the same was all equity suit in which no steps or proceedings therein had been had or taken by counsel for the parties for a period of three years, or more, as provided for in Chapter 14554, Laws of Florida, Acts of 1929. We have carefully considered the entire record and we are forced to the conclusion that the suit dismissed by the lower court oil April 20, 1935, was not an equity suit controlled by Chapter 14554, supra, but a suit filed for the purpose of administering upon an estate and the administration thereof was incomplete at the time of the entry of the order of dismissal. A judgment that is absolutely null and void — a mere brutum fulmen — can be set aside or stricken from the record on motion at any time and may be collaterally assailed. See Kroier, v. Kroier, 95 Fla. 865,116 So. 753. Creditors of an estate in such proceedings have their remedy for a prompt and early settlement thereof by application to the circuit court for an order or orders, as shall be in conformity with orderly procedure.

The order appealed from is dated February 8, 1937, which denied appellants' petition to vacate and set aside the order of dismissal dated April 20, 1935. This was error on the part of the lower court. The petition to vacate and set aside the order of dismissal, supra, should have been granted.

For the error pointed out, the order appealed from is hereby reversed for further proceedings in the lower court not inconsistent with this opinion.

It is so ordered.

WHITFIELD, P. J., and BROWN and CHAPMAN, J. J., concur.

BUFORD, J., concurs in opinion and judgment.

Justices TERRELL and THOMAS not participating as authorized by Section 4687, Compiled General Laws of 1927, and Rule 21-A of the. Rules of this Court.

ON PETITION FOR REHEARING