United State of America v. Dwyer

GRIFFIN, P. J.

Decedent, Martin F. Dwyer, a painting contractor, died June 5, 1955. His wife, Berta L. Dwyer, was duly appointed administratrix of his estate on June 24, 1955, and was then authorized and directed by the court to continue the operation of his painting business and to complete the performance of existing contracts. Respondent Fidelity and Deposit Company of Maryland became her surety under the usual bond (Prob. Code, § 541). She continued to operate the business and employed a considerable number of employees in this work. In June, 1956, the administratrix filed United States Treasury Form Number 941 (Employees’ Quarterly Federal Tax Return) without payment of the amount indicated. She listed the particular quarter included, covering the number of employees, wages paid, amount withheld, and the F.I.C.A. taxes withheld. Early in 1956 the administratrix became ill and was in a sanitarium. About April 16, 1957, she was removed as administratrix of the estate, she never having filed an inventory and appraisement. She was ordered to file her account. The United States of America filed a statement of claim for taxes due and entered written objections to her first account and petition for discharge which she filed on June 4, 1957. In summary, the account showed total debits of $133,730.19, and total credits of $134,669.72, resulting in a loss of $939.53 to the estate. There were no other assets indicated. It is conceded that the administratrix commingled all the funds she received, including the withholding and F.I.C.A. taxes she withheld from the wages of her employees and that such funds were “put back” to help pay the wages, creditors, and for the general operation of the business which resulted in the loss indicated.

The court found generally in accord with these facts but specifically found that certain creditors had been paid; that the former administratrix conducted herself fairly and honestly in reference to the administration of said estate and was not guilty of fraud, dishonesty or gross negligence; that no state or federal statute creates any preference in favor of the United States of America as to payment of withholding taxes under the conditions described; that the monies withheld were held by her as “trustee” in trust for the United States of

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America, distinct and separate from her capacity as administratrix and were never held by her in her capacity as administratrix. Accordingly, the objections of the United States of America were overruled, her account was approved and allowed, and she was discharged as such former administratrix and her surety was exonerated. Appellant appealed from these orders. Previously, the court, on January 20, 1958, made a skeleton minute order to the same effect, omitting certain essential portions of a valid minute order from which appellant also, by way of precaution, attempts to appeal. It does not appear that an appeal lies from such a minute order as is here involved.