Workman v. Workman

95 N.W.2d 186, 167 Neb. 857, 1959 Neb. LEXIS 109
CourtNebraska Supreme Court
DecidedFebruary 20, 1959
Docket34500
StatusPublished
Cited by20 cases

This text of 95 N.W.2d 186 (Workman v. Workman) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Workman v. Workman, 95 N.W.2d 186, 167 Neb. 857, 1959 Neb. LEXIS 109 (Neb. 1959).

Opinion

Boslaugh, J.

This appeal is a challenge of the correctness of a summary judgment in favor of Frank M. Workman; a summary judgment in favor of Clara D. Workman, executrix of the estate of Lewis M. Workman, deceased; a judgment on the pleadings in favor of Clara D. Workman, Apartment Supply House, Apartments, Inc., Capitol Enterprises, Inc., Capitol Investment Co., and Capitol Land & Investment Co.; and a judgment of dismissal of the action as to the named parties in favor of whom the judgments were rendered. The motions for summary judgment and the motion for judgment on the pleadings were each submitted and decided without evidence offered in support of any of them and there is no bill of exceptions in the record of this appeal that contains anything material or important to any of the motions or any of the judgments rendered as above described. The correctness of the action of the court in rendering the judgments must be determined from a consideration only of the pleadings of the parties affected as they were on the date the motions were sustained and the judgments were rendered.

The third amended and supplemental petition of appellants contains these allegations: Dolores Lucille Workman is the duly appointed and qualified guardian of Joseph, Robert, and Francine Workman, minor children of Dolores Lucille Workman and Frank M. Workman. Dellouise Workman Carroll is a sister of the minors. Frank M. Workman, hereafter referred to by his name or as Workman, is a son of Lewis M. Workman and Clara D. Workman. Apartment Supply House was a partnership with Lewis M. Workman and Clara D. Workman as its members. The latter is the surviving partner and is operating under the trade name of Apartment Supply House. Capitol Enterprises, Inc., Apart *859 ments, Inc., Capitol Investment Co., and Capitol Land & Investment Co. are corporations and each of them is used by Workman for the purpose of receiving property and proceeds of property pursuant to a scheme and device adopted by Workman to defraud appellants and Dellouise Workman Carroll by which Workman is attempting to reduce his marital estate and place it in the name of his parents or corporate entities apparently owned by his parents but actually owned by Workman. The last two corporations have each received the apparent title to property to further the scheme and device and are operated to defraud appellants for the benefit of Workman.

All issues between Dolores Lucille Workman, hereafter designated Mrs. Workman or by complete name, and her former husband, Workman, have been finally determined and settled except as to the cause of action alleged in the third amended and supplemental petition herein by which the gift made by Workman and Mrs. Workman to their children is attempted to be made effective and such cause of action is reserved in Mrs. Workman as a donor entitled to assert that the gift in which she joined of assets to the Workman trust be rendered and adjudicated fully effective. The scheme and device of Workman to defraud Mrs. Workman of her interest in the property of the marital estate which she owned or in which she had an interest consisted in part in Workman making leases of corporate real estate to his parents or to Clara D. Workman individually for improvident rentals to enable the income from real estate to be diverted and appropriated before it reached the corporations or trusts, and the retention of actual control, use, and ownership of the property by Workman whether the nominal title appears in his parents or in corporate entities. The frauds, devices, and schemes were planned, adopted, and practiced for the purpose of preventing the gift of Mrs. Workman and Workman *860 to their children hereinbefore named from being effective.

In the time between October and December 1949, Workman fraudulently represented to Mrs. Workman that it was desirable and to their interest that conveyances of real estate owned jointly by them as husband and wife and operated as a business partnership should be made to corporations to save income and federal estate taxes and to plan the disposition of their estates; that notwithstanding the conveyances the real estate would remain their property for all practical purposes; that the income and rentals from it would be available to them during their lifetime; and that the children would be benefited by the transfer to the extent the income was not needed by the grantors. Mrs. Workman relied upon the trust relationship existing between her and her husband because of their marital status, their partnership relationship, and the specific representations made to her as aforesaid, and because thereof she joined Workman in deeds of real property in the city of Lincoln, as described in detail in exhibit C, made a part of the pleadings of appellants herein, to Capitol Investment Co., and as described in detail in exhibit D, attached to and made a part of the pleading of appellants herein, to Capitol Land & Investment Co.

The capital stock of the grantees last described is deposited in the Workman trust of which Continental National Bank of Lincoln is trustee and Frederick J. Patz is cotrustee. Workman, in fraud of appellants and with apparent acquiescence of the trustees, has managed the real estate composing the assets of the corporations and the corporations so that little or no profit has accrued to them and no dividends have been declared or if any have, they have been inadequate and disproportionate to the actual earnings and net worth of the corporations, all of which is a purposeful carrying out by Workman and others participating with him in *861 said conspiracy, scheme, and fraud. The continuation of said operation is not to the best interest of the trust and is a direct contradiction of the instrument drafted and purportedly executed establishing the trust. Appellants have no adequate remedy at law and a decree of the court should be rendered directing the trustees, or someone in their stead selected and empowered by the court, to exercise their rights and duties as holders of the corporate stock of the corporations; removing the management thereof from Workman; cancelling the fraudulent lease or leases of the real estate to Lewis M. Workman, Clara D. Workman, and Apartment Supply House; and directing the declaration of dividends upon the corporate stock for the preservation and improvement of the property and the trust estate.

In furtherance of the conspiracy and fraudulent scheme the parents of Workman as individuals and as Apartment Supply House and Workman as the alleged president of Capitol Investment Co. made a lease to the premises described in exhibit C as item No. 1, known as 1111 to 1119 H Street, for an inadequate, unreasonable, and fraudulent rental for a period of 10 years commencing July 1, 1950. The parents of Workman are named as lessees and by virtue thereof accruing rentals from the real estate described in the lease in excess of $17,000 per year were transferred or apparently transferred to the parents of Workman for a consideration of less than $3,300 per year. The lease is fraudulent and should be annulled and Lewis M. Workman and Clara D. Workman, the named lessees, should be required to account for the proceeds received by them from said fraudulent lease. A part of the proceeds accruing to the lessees on account of the lease has been invested in property in the name of the lessees or in corporations organized by lessees which are Apartments, Inc., and Capitol Enterprises, Inc.

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Cite This Page — Counsel Stack

Bluebook (online)
95 N.W.2d 186, 167 Neb. 857, 1959 Neb. LEXIS 109, Counsel Stack Legal Research, https://law.counselstack.com/opinion/workman-v-workman-neb-1959.