Cross v. Cross

• Citation: 27 A.2d 877,20 N.J.Misc. 359
• Parties: CROSS et al. v. CROSS et al.
• Decision Date: 12 August 1942
• Court: United States State Supreme Court (New Jersey)

27 A.2d 877

20 N.J.Misc. 359

CROSS et al.

v. CROSS et al.

Supreme Court of New Jersey, Somerset County.

Aug. 12, 1942.

Action by Julia Appleton Cross and another, as executors of the last will and testament of W. Redmond Cross, deceased, against Richard J. Cross and others to determine title to 300 shares of capital stock of the New Jersey Zinc Company.

Judgment in accordance with opinion.

O. Blake Willcox, of Englewood, for plaintiffs.

James I. Bowers, of Somerville, for defendant Richard J. Cross and others.

Louis Auerbacher, Jr., of Newark, for defendant Robert Struthers et al.

Horace E. Bunker, of Plainfield, for defendant Central Hanover Bank & Trust Co., and another.

T. Girard Wharton, of Somerville, pro se as guardian ad litem.

William Byrd, of New York City, for defendant Bank of New York.

SMITH, Circuit Court Judge.

The facts are found to be as stated in the record and are made a part hereof as if fully set forth herein.

This is an action brought under the Declaratory Judgment Act, R.S. 2:26-68 et seq., N.J.S.A. 2:26-68 et seq., to determine the title to 300 shares of capital stock of the New Jersey Zinc Co., in the possession of the defendants, Wood, Struthers & Co., brokers of the deceased, W. Redmond Cross.

The facts are not in dispute and the parties have accordingly joined in an application for determination of their respective rights arising out of the facts hereinafter set forth, and in the record.

The controversy arises from the attempt of the deceased, immediately prior to his death, to make gifts of the stock in question, to his several children.

There are three groups of parties in the case, namely: the executors and trustees of the estate of the deceased, who deny the completion of the gift; they are joined by remaindermen under the will, who would benefit by the failure of the gift. The second group consists of the children of the deceased, who maintain that there was an effectual gift and seek to benefit thereby. Then there is the firm of Wood, Struthers & Co., also defendants, who, as the decedent's brokers, acted as agents in the contemplated transaction, and now hold the shares in question and are indifferent as to the results of this application, merely abiding the ruling of the court to be guided accordingly.

The decedent, W. Redmond Cross, a resident of Bernardsville, New Jersey, was for many years in the habit of making gifts to his children, and in connection with such donations, sought the advice of his brokers relative to gift taxes; pursuant to one of these consultations, on October 2nd, 1940, Milton S. Harrison, of the said firm of Wood, Struthers & Co., of New York City submitted a plan of gifts to be made, limiting individual gifts to $4,000 and making suggestions accordingly. Two of the decedent's children, William R, Junior, and Mary N, also had accounts with the firm of Wood, Struthers & Co. Two other children, Richard J. and Thomas N, had accounts at the Central Hanover Bank and Trust Co.; and as to the fifth child, Emily, the decedent himself, together with the Central Hanover Bank and Trust Company, were trustees of a trust created by the said child, Emily, for the benefit of herself and remaindermen.

On November 8th, 1940, eight days before his death, the decedent delivered three hundred shares of stock of New Jersey Zink Company, consisting of three certificates, each for one hundred shares, to Wood, Struthers & Co. in New York City, to be held for further instructions. These shares were unassigned and unendorsed.

On November 7th, 1940, the previous day, writing to Central Hanover Bank and Trust Co., the decedent stated that he had sent "some New Jersey Zink stock to Wood, Struthers & Co., for splitting up and have instructed them to send a certificate for sixty shares to you to be held in trust above mentioned," (the mentioned trust being that for Emily.)

In the same letter is a post-script, saying: "The New Jersey Zinc stock is a present from me."

Subsequently, on Friday, November 15th, 1940, Wood, Struthers & Co. were instructed to split up the three certificates of one hundred shares each, of New Jersey Zinc Co., into five certificates of sixty shares each, the said five certificates to be in decedent's name, to place two of the said certificates in the accounts of William R., Junior, and Mary N, respectively; to deliver the other three certificates to the Central Hanover Bank & Trust Co., two for the accounts of Richard J. and Thomas N, and a third for the account of a trust created for Emily. Stock powers, that is, assignments separate from the certificates, were to be delivered accordingly for the respective accounts of the intended donees.

With respect to the original three hundred shares represented by the three certificates of one hundred shares each, no stock powers were included or delivered by the decedent. On the same day the decedent also delivered to Wood, Struthers & Co., two stock powers for the intended new sixty share certificates to be deposited in the accounts of Wood, Struthers & Co., to William R., Junior and Mary N. On the same day decedent wrote to Central Hanover Bank & Trust Co., advising them that he had instructed Wood, Struthers & Co., to send to them two certificates of sixty shares each for the accounts of Richard J. and Thomas N. Cross, and the postscript stated: "The New Jersey Zinc stock is a present from me."

He delivered three stock powers to the Central Hanover Bank and Trust Co., on the same day, for the three certificates of sixty shares each, intended for Thomas N, Richard J. and Emily. Then he wrote letters to the individual donees, informing them of his instructions to Wood, Struthers & Co. In these letters he makes statements such as "these shares are gifts from us." (Meaning himself and his wife.)

November 15th, as stated, was a Friday. Wood, Struthers & Co. received their letters late in the afternoon, and Saturday being a short day, no steps were taken by Wood, Struthers & Co. to carry out the instructions. On Saturday, November 16th, 1940, W. Redmond Cross died, after attending the Princeton-Yale football game at Princeton. Being informed of this, Wood, Struthers & Co. took no further steps in connection with the intended transfer and the splitting up of the three one-hundred share certificates.

The executors maintain that the gift was incomplete and therefore ineffective; that is refuted by the intended donees, and the position of the brokers, Wood, Struthers & Co., is of course a neutral one.

Although the question has not been raised by the parties all having joined in the application for declaratory judgment, it is proper to inquire whether or not this court has jurisdiction over the subject matter. R.S. 2:26-68, N.J.S.A. 2:26-68, provides:

"All courts of record in this state shall, within their respective jurisdictions, have power to declare rights, status and other legal relations, whether or not further relief is or could be claimed; and no action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for."

It appears from the wording of the statute that the power of the courts to declare rights is confined to matters within their respective jurisdiction; the Declaratory Judgment Act does not confer jurisdiction on any court over any subject matter which did not theretofore fall within its jurisdiction. Springdale Corp. v. Fidelity Union Trust Co., 121 N.J.L. 536, 3 A.2d 565; Moresh v. O'Regan, 122 N.J.Eq. 388, 192 A. 831, 194 A. 156.

Do the facts, as above recited, present a matter for determination by a Court of Law or of Equity? Had this action been brought originally by the present defendants, as plaintiffs, seeking an order to direct the proper transfer of the shares to their names upon the books of the corporation, the entry of...