In re Fulper's Estate

• Citation: 132 A. 834
• Decision Date: 03 April 1926
• Docket Number: No. 2861.,2861.
• Parties: In re FULPER'S ESTATE.
• Court: United States State Supreme Court (New Jersey)

132 A. 834

In re FULPER'S ESTATE.

No. 2861.

Prerogative Court of New Jersey.

April 3, 1926.

(Syllabus by the Court.)

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Appeal from Orphans' Court, Hunterdon County.

In the matter of the estate of William Fulper, deceased. On exceptions by certain parties to the inventory of John W. Fulper, executor, filed in the orphans' court. From a decree sustaining the exceptions and directing the executor to add to the inventory certain property, the executor appeals. Decree modified and sustained.

William C. Gebhardt & Son, of Jersey City, for appellant.

Willard C. Parker and H. L. Stout, both of Flemington, for respondents.

BUCHANAN, V. C. The present respondents excepted in the orphans' court to the inventory filed by the present appellant as the executor of William Fulper, deceased, for failure to include an item of about $4,200. The decree below sustained the exception and directed the executor to add to the inventory, and account for as executor, the sum of $4,232.08 (with interest).

The undisputed facts are that the decedent, having a bank account of $4,232.08, on January 17, 1923 (three months before his death), gave John W. Fulper a check for that amount to his (John's) order, intending to make a transfer thereof to John W. Fulper, and the latter immediately deposited it in the bank to his own credit, where it still remains. He did not include this item in his inventory as executor. He claims it as his own.

The claim of the exceptants was, not that the transfer had not been made, but that it was invalid as having been made improvidently by an aged man to one in a confidential relationship, without consideration, without independent advice, stripping himself of most of his property, and that the donor was mentally incompetent, and that the gift had been procured by undue influence.

What the exceptants actually sought, therefore, was a setting aside of the gift, upon those grounds. And clearly the operation and effect of the decree of the orphans' court involves a setting aside of that transfer, for it directs the executor to inventory and account for, not a claim of the estate against the donee, but the sum of $4,232.08 received by the executor from the decedent January 17, 1923, and obviously such a decree necessarily involves a finding that the sum in question is a part of the assets of the estate, and (under the admitted circumstances of this case) the sum could only become assets of the estate by a setting aside of the prior, completed transfer inter vivos. (The memorandum filed by the orphans' court shows that the decree was in fact made, because that court concluded that the transfer should be set aside because of lack of independent advice to the donor.)

The question occurs, therefore, as to the jurisdiction of the orphans' court to make such a decree. The first impression would be that such jurisdiction inheres only in the court of chancery.

Suppose that (instead of the donee and the executor being the same natural person) the gift had been made to John Doe instead of John W. Fulper. Could the orphans' court make a valid decree setting aside the gift?

The orphans' court has no jurisdiction (except in the case of insolvent estates) to try the validity or extent of claims of creditors against the estate (Miller v. Pettit, 16 N. J. Law, 421; Vreeland v. Schoonmaker, 16 N. J. Eq. 512; Middleton v. Middleton, 35 N. J. Eq. 115; Partridge v. Partridge, 19 A. 662, 46 N. J. Eq. 434, affirmed 22 A. 1075, 47 N. J. Eq. 601; Mullaney v. Mullaney, 54 A. 1086, 65 N. J. Eq. 384, 387); nor the claim of an alleged cestui que trust to establish a trust in his favor as against a portion of the apparent assets of the decedent in the hands of the representative (In re O'Callaghan, 51 A. 64, 64 N. J. Eq. 287); nor a claim by an alleged donee inter vivos of title to a portion of the apparent assets of the estate as against the executor (In re Campfield's Estate [N. J. Prerog.] 98 A. 381; In re Estate of James McSpirit, 68 A. 755, 73 N. J. Eq. 613).

So also in the converse instances of claims by the executor against third parties. Suits by the executor against debtors of the decedent cannot be tried by the orphans' court, but must be brought in a court of law. Cf. Wood v. Tallman, 1 N. J. Law, 153. And jurisdiction to try an equitable claim by an executor (or by legatees, in the name and right of the executor), against third parties inheres, not in the orphans' court, but in the court of chancery. Heyer v. Sullivan, 102 A. 248, 88 N. J. Eq. 165; affirmed 103 A. 1052, 88 N. J. Eq. 595; Vaiden v. Edson, 98 A. 635, 85 N. J. Eq. 65, 69; affirmed 95 A. 980, 85 N. J. Eq. 184, 189; Smith v. Jones, 104 A. 380, 89 N. J. Eq. 502, 506. Cf. also In re Dubois' Estate (N. J. Prerog.) 97 A. 728.

Where, however, the disputed question of title or indebtedness is one between the estate and the executor or administrator claiming in his or her individual capacity, a different situation is presented, and a different rule prevails. In such case the jurisdiction of the orphans' court to hear and determine such issues, whether they be legal or equitable has been asserted and upheld since the earliest times. The first reported adjudication seems to be Wood v. Tallman's Ex'rs, 1 N. J. Law, 153, where, on an issue as to the correctness of an executor's inventory and account, the orphans' court determined the question of a debt due to the testator from the executor in his individual capacity, and charged the executor with the amount found to be due as assets in his hands; and the Supreme Court affirmed this on certiorari, pointing out that, although the question was one for the jurisdiction of a common-law court, if the debtor and the executor were separate individuals, yet where they were the same person the executor could not sue himself as an individual, nor could any one else on behalf of the estate sue him in a court of law; that jurisdiction over the issue therefore lay in chancery or the orphans' court; that the orphans' court had been invested with full jurisdiction to determine such issues under such circumstances; and that the debtor had consented to that jurisdiction and the loss of his right to the jurisdiction of a law court (and jury trial) by his acceptance of the executorship.

Other instances where a similar exercise of jurisdiction by the orphans' court has heen upheld are Dilts v. Stevenson, 17 N. J. Eq. 407; Smith v. Burnet, 34 N. J. Eq. 219; affirmed 35 N. J. Eq. 314; Sherman v. Lanier, 39 N. J. Eq. 249; Tichenor v. Tichenor, 17 A. 631, 45 N. J. Eq. 303; Bayley's Case, 59 A. 215, 67 N. J. Eq. 566; Streeter v. Braman, 74 A. 659, 76 N. J. Eq. 371; Hill v. Hill, 82 A. 338, 79 N. J. Eq. 521.

It will be noted that in some of these cases the issues determined were issues ordinarily cognizable only in a court of law; in others they were issues ordinarily cognizable only in the court of chancery, as in the case sub judice. As was said in Wood v. Tallman, (supra), the law has given the orphans' court full power to compel the executors to account generally, and to decree the balance due to the legatees in their hands, without restraining them in the exercise of this power to any particular kinds of claims or subjects of controversy.

In Pyatt v. Pyatt, 18 A. 1048, 46 N. J. Eq. 285, at page 288, the Court of Errors and Appeals, in considering the orphans' court and its jurisdiction, said:

"It partakes of the powers of a chancery and prerogative jurisdiction, being instituted to remedy and supply the defects in the powers of the Prerogative Court with regard to the accountability of executors, administrators and guardians, * * * "

—and also said that the orphans' court has full power and authority to hear and determine all controversies respecting the allowance of the accounts of executors, administrators, guardians, and testamentary trustees; and, further, that upon such accountings the orphans' court may ascertain the condition of the estate in the hands of the accountant as fully as can the Court of Chancery.

These principles were reiterated and reaffirmed by the same court in Woolsey v. Woolsey, 67 A. 1047, 1048, 72 N. J. Eq. 898, at page 900; and the court in that case also said:

"In this state the orphans' court and the Court of Chancery have a concurrent jurisdiction in matters of this nature" (determining the truth and fairness of an executor's account) "and it is only where there are special reasons for going into equity that that course is justified."

Again, this court held in Dunham v. Marsh, 31 A, 619, 52 N. J. Eq. 256, 261, that the orphans' court, in the determination of issues within its jurisdiction, has the power to decide any question which must necessarily be decided in order to arrive at such determination. This was reiterated in the opinion In re Alexander, 81 A. 732, 79 N. J. Eq. 226, 228, and sanctioned by the Court of Errors and Appeals by its adoption of that opinion.

It is difficult to reconcile Mullaney v. Mullaney, supra, with the authorities which we have just been considering; but, in so far as the expressions in that case are irreconcilable, it would seem that they must be deemed reversed by the later expressions in the subsequent Woolsey and Alexander Cases. The effect to be accorded to the Mullaney opinion was assuredly deemed to be extremely circumscribed in the opinion of Chancellor Pitney sitting as ordinary in Hill v. Hill, supra.

The necessary conclusion seems to be that the orphans' court has jurisdiction to determine questions ordinarily cognizable only in a court of equity (or a court of law, as the case may be), where such questions are involved, on accountings, in the determination of conflicting claims between the decedent's estate and the individual who is also the executor or administrator accounting; and, specifically, that in the instant case the orphans' court has jurisdiction, on accounting proceedings, to...