Adams v. Camden Safe Deposit & Trust Co.

• Decision Date: 16 November 1938
• Docket Number: Nos. 12, 18.,s. 12, 18.
• Citation: 2 A.2d 361,121 N.J.L. 389
• Parties: ADAMS et al. v. CAMDEN SAFE DEPOSIT & TRUST CO.
• Court: New Jersey Supreme Court

2 A.2d 361

121 N.J.L. 389

ADAMS et al.

v. CAMDEN SAFE DEPOSIT & TRUST CO.

Nos. 12, 18.

Supreme Court of New Jersey.

Nov. 16, 1938.

Appeal from Court of Common Pleas, Camden County.

Suit by Alice R. Adams and others against Camden Safe Deposit & Trust Company. From a judgment for the plaintiffs, 188 A. 913, 15 N.J.Misc. 48, defendant appeals.

Reversed and remanded with directions.

Argued May term, 1938, before BROGAN, C. J., and BODINE and HEHER, JJ.

Walter R. Carroll, of Camden, for appellant.

Carl Kisselman, of Camden, for respondents.

HEHER, Justice.

The judicial rulings assigned for error are (a) the denial of defendant's motion to strike out the complaint on the ground that it does not disclose a cause of action and (b) the striking out of defendant's answer, on plaintiffs' motion, and the entry of summary judgment in favor of plaintiffs, severally.

The motion to strike out the answer was grounded in the claim that it was sham and frivolous. While the order is not specific in this regard, the memorandum filed in the court below indicates that the answer was deemed to be frivolous.

This is the case exhibited by the complaint: Elizabeth Clement died testate on March 12, 1933. Her will devised and bequeathed the residue of her estate to defendant, "upon trust to hold and invest the same and to pay the net income" to her sister, Sarah C. Githens, during her life; and certain general legacies were given to plaintiffs, severally, upon the termination of the life cestui. The life tenant died on January 22, 1935. It is alleged that on or about October 29, 1934, defendant, "as trustee, received the sum of $7691.79, * * more than sufficient to pay in full all of the legacies provided for" in the will; and the pleader proceeds upon the hypothesis that, while the "sum" in question was "received" by defendant "as trustee", it is liable to the legatees in an action at law in its separate corporate capacity, as distinguished from its fiduciary character. The theory expounded by counsel on the brief is that defendant's "duty as a trustee was a naked one", and that it had received, in its corporate capacity, moneys which in equity and good conscience it ought to turn over to plaintiffs.

The answer denies both jurisdiction and liability in defendant's corporate capacity. It alleges, inter alia, that defendant qualified as the designated executor of the will, probated on April 8, 1933; that the deceased, at the time of her death, was possessed of certain mortgage securities and choses in action, including a deposit with a closed national bank; that, after due administration of the estate, defendant filed its final account as such executor, showing the residuary estate to consist of $7,426.22 of corpus and $303.32 of income, and such proceedings were had thereon that on September 28, 1934, a decree of allowance as presented was entered in the Camden County Orphans' Court; that, with the exception of cash amounting to $256.96 and household goods and jewelry inventoried at $37.75, the residuary estate then consisted of unconverted securities and the bank deposit at the inventory value; that, following the allowance of the account, defendant, as executor, "transferred and delivered the foregoing assets and cash" to itself as testamentary trustee, and that in such latter capacity it undertook the "burden of administering the trust created and established" by the will; that defendant "has been unable to reduce said assets to cash and to find a reasonable market for the same except at a tremendous sacrifice in value"; that, "as trustee", it "is under no duty, liability or obligation to the plaintiffs * * * other than to file its account as such trustee in the Orphans' Court of Camden County and to turn over and deliver" the said unconverted trust assets "to the legatees entitled thereto * * in kind, if said legatees can agree upon a distribution * * * among themselves, or, as an alternative to such distribution in kind, to reduce said assets to cash by sale thereof in open market for the best and highest price obtainable, and to distribute the proceeds of such sale or sales among said legatees according to their respective rights and interests"; that defendant has not been cited to file its account as testamentary trustee, and that plaintiffs "have at all times, prior to the institution of this" action, "acquiesced in the retention and holding of said assets by said trustee, well knowing that said assets were being held by said trustee in the hope that a market could be found therefor which would admit of a sale reasonably fair and advantageous to said legatees"; and that, in its "separate corporate capacity," defendant "does not own, or have, or claim to own or have said assets, or any of them." These allegations were verified by affidavit.

Plaintiffs established, likewise by affidavit, that on October 29, 1934, defendant, as testamentary trustee, executed and delivered to itself, as executor of the will, "a receipt and release", wherein it acknowledged receipt as trustee of "the sum of $7691.79, being the balance of principal in the hands of said Executor of $7426.22, less the value of chattels held by said Executor, appraised at $37.75, plus the balance of income amounting to $303.32, which sums were found to be the balances in the hands of said Executor in and by an order of the Camden County Orphans Court dated September 28, 1934," and further, that there had been "paid over" to it as trustee "the sum of $7691.79, in full payment and satisfaction" of the trust estate so created by the will. But the proceedings in the Orphans' Court on defendant's final account as executor, of which plaintiffs had due notice, established that, at the time of the decree of allowance, the mortgage securities and choses in action adverted to had not been converted. In the schedule listing the investments, annexed to the account, the nature of the corpus of the estate was set out in detail.

The common pleas judge ruled that the words "the sum of $7691.79 can only refer to money or cash." Invoking the parol evidence rule, he held that defendant could not "vary the terms of the release already on file in the Surrogate's Office, by offering proof that it was not money that passed" thereunder, "but securities". On the theory that the release "was executed for the benefit of the wards," he observed that to permit the "fiduciary to come in and offer evidence" to the contrary would controvert "public policy" and subvert "the interest of the helpless wards".

First: Respondents move in limine to dismiss the appeal on the ground that appellant by bill in equity still pending, seeks to enjoin the "collection of the judgment", and has thereby released "any alleged errors in the action at law", and "has made an election of the forum, barring its right to appeal herein." We find the point to be devoid of substance.

These are the pertinent facts: The bill was filed on December 21, 1936, before the entry of the judgment herein. It prayed the reformation of the release to accord with the true situation, and an injunction against the entry of judgment in this action. An ad interim restraint was awarded. On March 15, 1937, respondents applied to the Chancellor for a modification of the restraint to permit the entry of judgment "in accordance with the verdict of the Court who heard the matter", since the term of office of the sitting judge would shortly expire, and, in any event, the effect of the ad interim restraint being "to extend the time for taking an appeal", judgment should be entered so that the time for taking an appeal would begin to run. It was the insistence of respondents' counsel that, by the course thus proposed, appellant could not "be harmed". The learned vice chancellor, over the objection of appellant, modified the restraint to permit the entry of judgment, but stayed proceedings thereon. It is indicated that the bill in equity has gone to final hearing, but that the issue is still undetermined.

The suit in equity is not rested upon a claimed invalidity or right of revision of the judgment at law. The pleaded equity is independent of the judgment. It is grounded in matter—however misconceived —that has not been, and could not be, litigated in this proceeding at law, i. e., mistake necessitating reformation of the written memorial of the transaction adverted to. In this situation, the invocation of such equitable jurisdiction does not constitute a release and waiver of errors in the judgment at law. The doctrine of election of remedies afforded by two forums of concurrent jurisdiction is not applicable. Compare Henwood v. Jarvis and Schafer, 27 N.J.Eq. 247, 256; Kelsey v. Agricultural Insurance Co., 78 N.J.Eq. 378, 79 A. 539; Parker v. Judges of Circuit Court of Maryland, 25 U.S. 561, 12 Wheat. 561, 6 L.Ed. 729; Lockwood v. Mills, 3 Ohio 21.

The essence of the doctrine of election of remedies is the conscious choice, with full knowledge of the facts, of one of two or more inconsistent remedies. Tremarco v. Tremarco, 117 N.J.Eq. 50, 174 A. 898, 95 A.L.R. 231; Titus v. Phillips, 18 N.J.Eq. 541; Blum Building Co. v. Ingersoll, 99 N.J.Eq. 563, 134 A. 176, affirmed 101 N.J.Eq. 291, 137 A. 916. It stems from the principle, rooted in reason and justice, that a party, in seeking legal redress, shall not be at liberty to take irreconcilable and repugnant positions. While the consequences are the same, it is not essential that there be an estoppel in pais, for it is not required that the adversary party act upon the election to his detriment, or that a failure to abide by it would result in disadvantage. It is rather an intentional waiver of all remedies but the one so chosen.

It is a corollary of the foregoing that, to make the election conclusive, there must in fact be two inconsistent remedies available to the party seeking enforcement of the claimed right. Neither the mistaken assertion of a right that does not exist nor the...