Riley v. McElroy

23 So. 2d 592, 247 Ala. 242, 1945 Ala. LEXIS 392
CourtSupreme Court of Alabama
DecidedJune 30, 1945
Docket6 Div. 356.
StatusPublished
Cited by18 cases

This text of 23 So. 2d 592 (Riley v. McElroy) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Riley v. McElroy, 23 So. 2d 592, 247 Ala. 242, 1945 Ala. LEXIS 392 (Ala. 1945).

Opinion

*248 STAKELY, Justice.

This proceeding is another phase of the litigation growing out of the estate of Edward Wilkinson, deceased. Two questions are here presented, for review: (1) The right vel non of certain parties interested in the estate to have an administrator ad litem appointed by the court pursuant to section 165, Title 61, Code of 1940, to represent the estate on the hearing of a petition known as the petition of February 5, 1944; (2) the right vel non of certain attorneys to file the petition of February 5, 1944.

Other branches of the litigation are Riley v. Wilkinson et al., Ala.Sup., 23 So.2d 582; 1 Wilkinson v. Wilkinson, Ala. Sup., 23 So.2d 601; 2 and Wilkinson v. McCall, Ala.Sup., 23 So.2d 577. 3 For a complete understanding of this case, reference is made to these other cases. While we shall attempt not to repeat in too great detail the facts set forth in the other cases, it is necessary for an understanding of this case that enough of the facts be stated as will give an adequate background of this branch of the litigation. ¡

Edward Wilkinson, Sr., died on November 6, 1941, leaving surviving him his widow, Grace Wilkinson, and four children, Mrs. Marguerite Mudd, wife of J. P. Mudd; Mrs. Elizabeth Lanier, wife of Sterling Lanier; Mrs. Dimmis Riley, wife of E. W. Riley; and Edward Wilkinson, Jr. The estate of the decedent consisted principally of 151 shares of common stock of the Western Grain Company. Under the will of the decedent, which was probated in the Probate Court of Jefferson County, Edward Wilkinson, Jr., and Mrs. Lanier were appointed coexecutors. During the life of Edward Wilkinson he created five separate trusts for the benefit of his wife and four children. He named himself trustee in each of the trusts and named Edward Wilkinson, Jr., and Mrs. Lanier as successor trustees. The property in each of the trusts consisted solely of shares of common stock of Western Grain Company. At the time of decedent’s death there were outstanding 500 shares of common stock and 150 shares of preferred stock in the Western Grain Company. On December 17, 1941, a meeting of the stockholders was called, at which it was proposed to elect Edward Wilkinson, Jr., as president of the company. Mr. and Mrs. Mudd objected on the grounds that he was neither capable nor fit for the office. The voting resulted in election of Edward Wilkinson, Jr.

On December 22, 1941, Mr. and Mrs. J. P. Mudd and Mrs. Grace Wilkinson, by Mr. Mudd as next friend, filed a bill in equity praying for the removal of Edward Wilkinson, Jr., as president of Western Grain Company and the' removal of Edward Wilkinson, Jr., and Elizabeth Lanier as executors and trustees. On May 25, 1942, the suit was settled by agreement. Among other things, the decree settling the litiga *249 tion enjoined Edward Wilkinson, Jr., and Mrs. Lanier from voting any stock standing in their names in a representative capacity for the benefit of any executors in the estate of Edward Wilkinson or trustees in the trusts created by him, as a salaried officer of Western Grain. The decree also provided for the resignation of Edward Wilkinson, Jr., as president of Western Grain and for the resignation of Mrs. Elizabeth Lanier as coexecutor and cotrustee and provided that the appointment of. a successor coexecutor and cotrustee would be made by the court. At the conclusion of the litigation, Bethea McCall was made president and general manager of Western Grain.

The company prospered under the new management, but this resulted in problems relating to income taxes, and the feeling between the two factions in the family, Mr. and Mrs. Mudd and Mrs. Dimmis Riley on the one hand and Edward Wilkinson, Jr., and Mrs. Elizabeth Lanier on the other hand, grew more and more bitter, and there were threats of receivership and litigation to set aside the settlement under the decree of May 25, 1942. In the meantime the court induced Bethea McCall to accept the appointment as coexecutor and cotrustee under the will of the deceased.

On December 15, 1942, an action was instituted to set aside the settlement under the decree of May 25, 1942. In the meantime the matter of the estate tax was becoming a matter of growing importance. In the early part of 1943 the estate tax return was filed and the government entered a deficiency estate tax assessment which called for the additional payment by the estate of $52,000. The estate had only $6,000 in cash.

A petition was filed on October 16, 1943, by the coexecutors asking the court for instructions as to how to meet the payment of the tax. While evidence was being taken on that petition, a deputy collector seized certificate No. 38 for 150 shares and certificate No. 41 for one share of stock of Western Grain. These certificates were issued to the decedent during his lifetime and were in the custody of Western Grain or Bethea McCall, as coexecutor, at the time they were seized. These certificates had been previously surrendered to the Western Grain Company after the death of decedent, before they were seized, in exchange for a new certificate, No. 71, for 151 shares issued to the coexecutors and cotrustees at that time. Certificate No. 71 was never seized by the collector. The collector was threatening to sell at least 150 shares of stock on January 24, 1944.

On January 20, 1944, the court entered a final decree which provided a plan for raising the money tó meet the assessment' through a sale of stock under certain conditions. The decree enjoined disposition of the stock on a basis at variance with the decree. The same day the decree was superseded by supersedeas bond and the next day Bethea McCall, as coexecutor, and Mrs. Marguerite Mudd made a contract under which, among other things, Mrs. Mudd agreed to purchase 151 shares of common stock of Western Grain on a certain basis. It is claimed that this contract violated the decree of January 20, 1944, and the petition, hereinabove referred to as the petition of February 5, 1944, was filed by Mrs. Elizabeth Lanier and Edward Wilkinson, Jr., individually and as coexecutor, to set aside the contract of sale made between. Mrs. Mudd and Bethea McCall, as coexecutor.

On February 3, 1944, the collector held his sale, selling thirty-four shares of the stock on a basis of $1,480 per share to Mrs. Lanier and the tax was paid.

Mrs. Dimmis Riley and Mrs. Marguerite Mudd separately and severally made a motion, based on the alleged adversary pecuniary interest of Edward Wilkinson, Jr., for the appointment of an administrator ad litem to represent the estate of the decedent on the hearing of the petition of. February 5, 1944, and to give such administrator ad litem authority to employ counsel not otherwise interested in the cause. (The motion will appear in the report of the case.) Mrs. Elizabeth Lanier and Edward Wilkinson, Jr., made a motion to strike the motion for the appointment of an administrator ad litem. The court, consisting of three judges, McElroy, Windham and Morrow, granted the motion to strike the motion for the appointment of an administrator ad litem.

Subsequently Mrs. Marguerite Mudd filed a plea in abatement No. 5 to the petition of February 5, 1944. (Plea in abatement No. 5 will be set out in the report of the case.) On the same day Mrs.

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Bluebook (online)
23 So. 2d 592, 247 Ala. 242, 1945 Ala. LEXIS 392, Counsel Stack Legal Research, https://law.counselstack.com/opinion/riley-v-mcelroy-ala-1945.