White v. Starr

• Decision Date: 05 November 1890
• Citation: 47 N.J.E. 244,20 A. 875
• Parties: WHITE v. STARR et al.
• Court: New Jersey Supreme Court

20 A. 875

47 N.J.E. 244

WHITE

v. STARR et al.

Prerogative Court of New Jersey.

Nov. 5, 1890.

Appeal from orphans' court, Camden county; HUGG, McDOWELL, and GAUNT, Judges.

Peter L. Voorhees and Barker Gummere, for appellant. Thomas B. Harned, D. J. Pancoast, and Samuel H. Grey, for respondents.

McGILL, Ordinary. The orphans' court of Camden county, by its decree made on the 1st of March, 1889, refused to admit to probate a paper writing, bearing date the 24th of May, 1884, purporting to be the last will of Jesse W. Starr, deceased. It is not disputed that the decedent executed the contested writing with all the formalities necessary to the proper making of a will. The insistment is that at the time of such execution he did not possess testamentary capacity, and, that failing, that his mind was so weakened by age, physical infirmity, and trouble that he became the victim of a fraud perpetrated, or the subject of a dominating and undue influence exerted, by his son-in-law, the appellant, which produced the disputed will. In their several opinions the judges of the orphans' court concluded that the decedent lacked testamentary capacity, and that the execution of the will was brought about by fraudulent contrivances. Jesse W. Starr died on the 26th day of February, A. D. 1886, when about 77 years of age. In early life, he became a mechanic of considerable skill. He was positive in character, self-reliant, intelligent, and industrious. By close application to his business, he succeeded in amassing a considerable fortune, and in establishing at Camden one of the largest and most prosperous iron-works in the country, costing, probably, a million dollars. For nearly 20 years,—to the close of 1868,—his younger brother, John F. Starr, was his partner. Then he determined to associate his son Benjamin, one of the respondents, and his son-in-law Benjamin F. Archer, the father of the respondent George F. Archer, with him in business, consequently the partnership with his brother was dissolved, and he bought his brother's interest in the iron-works. A new firm was then formed, consisting of himself, and the son and son-in-law last named. In this partnership, he supplied the entire capital. In 1874, his son Jesse W. Starr, Jr., the remaining respondent, also without capital, was taken into the firm. At the close of 1874, Benjamin Starr and Archer were dropped from the firm, and the son Jesse continued in the business with his father to the 1st of January, A. D. 1877. Then Benjamin Starr was again made a partner, and retained in the firm until the following August, and then again dropped. From August 1, A. D. 1877, to August 10, 1878, the decedent and his son Jesse carried on the works. At the last of those dates the business was bankrupt, and application was made to the United States district court to have it so adjudged. The liabilities ran through the last two or three firms so that Mr. Starr and both his sons were involved in the bankruptcy proceedings. The liabilities of the firm of which Benjamin F. Archer was a member —probably more than half as much as the amount of the liabilities at the bankruptcy—had been principally paid by subsequent firms, and the decedent, individually, so that that firm was not included in the bankruptcy. Early in 1879 a composition with the creditors was effected, by which it was agreed that upon the payment of 70 per cent. of their several debts, which amounted in the aggregate to more than $600,000, the debts should be discharged. The 70 per cent. was to be paid in four installments, one of 10 per cent., payable in one year, one of 15 per cent., payable in two years, one of 20 per cent. payable in three years, and one of 25 per cent., payable in four years. By agreement, the decedent was to give his individual notes, and, to secure their payment, his mortgage upon substantially his entire estate, and also to submit the control of the iron-works to a manager to be appointed and supervised by a committee of the creditors. The mortgage was to be given to the Camden Safe-Deposit & Trust Company, as trustee, and. as portions of the estate could be sold with the consent of the committee of creditors, the trust company was to release the portion sold from the mortgage, and the proceeds of sale were to be devoted to the payment of the installment notes. The note3 and mortgage were given in pursuance of this agreement, and the iron-works passed into the control of the creditors. During the times that the sons Benjamin and Jesse, and the son-in-law Archer, were connected with the business, they drew large sums of money from it for their private use. Archer drew upwards of $136,000, Benjamin Starr drew more than $184,000, and Jesse, Jr., drew over $80,000, and at the same time, the decedent gave his daughter, Elizabeth, wife of the appellant, about $8,000. When the works were again put in operation, John F. Starr became manager for the creditors, and so successfully conducted the business that the first payment under the composition was duly made. Then, in March, 1881, John F. Starr retired from the management, and, at the decedent's solicitation, the creditors put the respondent Jesse W. Starr, Jr., in his place. Under this new management, within eight months, some $75,000 were lost, and it became necessary to dismiss the manager. After that, the creditors' committee, through their agent, operated the works until January, A. D. 1883, when work was entirely suspended.

Upon the dismissal of the respondent Jesse W. Starr, Jr., from the management, in November, 1881, it became apparent, because of the new loss, that the iron-works could not be saved, and that the last installments to be paid to the creditors could not be met, and that the property must be entirely lost unless some new arrangement could be made with the creditors. If the last installment was not paid, or some settlement made, the creditors would be entitled to the full payment of their claims instead of the payment of the remainder of 70 per cent. of them, and, the composition agreement being broken, the personal liability of Benjamin and Jesse, Jr., would revive. At this juncture of affairs, the decedent, by writing signed by him, authorized his son-in-law, the appellant, to negotiate a sale of the iron-works for an amount sufficient to pay a first mortgage thereon of $100,000, and the unpaid composition notes, and manager's expenses, upon terms to be approved by the creditors' committee. And, at the same time, Jesse W. Starr, Jr., wrote to the appellant, offering his assistance in such negotiations, and promising that, if a sale should be effected, he would make no claim for some $26,000 that he had advanced to assist in the payment of the second series of composition notes. In the following March, (1882,) the decedent executed a formal power of attorney, by which he clothed the appellant with authority to deal for him with the creditors, and to agree for a sale of his estate, or any part of it, and to take the proceeds of sale, and apply them to the payment of the decedent's debts. Under the authority thus given, the appellant sold some of the real estate for sufficient money to pay the whole, or a large portion, of the third series of composition notes. During the year 1882, the decedent's homestead was sold under foreclosure of a mortgage, and it was thought that he would be turned out of it. He had resided there for many years, and was so much attached to the place that disastrous consequences by an eviction from it to his health were feared. Some informality in the advertisement of sale-enabled the appellant to have the sale set aside. Before a resale could be managed, he procured one Edward H. Cohn to purchase several parcels of the decedent's lands, including the homestead, for enough to pay the mortgage decree, and give the creditors $5,000 for a release from the trust company mortgage, and secure the conveyance of the homestead, subject to a mortgage of $12,000, to himself. In December of the same year, Mr. Starr's wife died. After her death, his daughter, the appellant's wife, went to live with him and resided in the homestead until March 1883, when her husband exchanged that property for a house on the corner of Fourth and Cooper streets, in Camden, which he caused to be conveyed to her. After this exchange, Mr. Starr took up his residence with his daughter and the appellant in the last-named property. The entire second floor of the house, consisting of two large rooms and a bath-room, were devoted to his use, and, so far as I can gather from the evidence, he was surrounded with every comfort, and was most affectionately and kindly treated by both the appellant and his wife. It does not appear that his son-in-law Archer, or his sons, Benjamin and Jesse, offered him a home, or did anything to contribute to his comfort. On the contrary, his checkbook shows payments to his son Jesse; and the testimony indicates that more than once his sons appealed to him for pecuniary assistance from his meager bank-account.

In May, 1883, conceiving that the committee of his creditors had mismanaged the iron-works, and used them for their individual advantage, he commenced a suit in equity against them, in the United States circuit court, for the purpose of having them account. While this suit was pending, the appellant succeeded in finding a number of gentlemen who were willing to organize a corporation and buy the iron-works. After considerable negotiation, it was arranged that the works should be sold for $225,000, and that the sum realized from the sale should be accepted in full satisfaction of the first mortgage upon the works and the balance of the creditors' claims. Pending this negotiation, the appellant sought from Mr. Starr a revocation of the power of attorney that had been given to him in March, 1882 and, upon the 27th day of September, 1883 by an instrument in writing, signed, sealed, and acknowledged by Mr. Starr, the...