Damato's Estate, In re

• Decision Date: 05 January 1965
• Docket Number: No. A--887,A--887
• Citation: 206 A.2d 171,86 N.J.Super. 107
• Parties: In the Matter of the ESTATE of Joseph DAMATO, Deceased.
• Court: New Jersey Superior Court — Appellate Division

Page 107

86 N.J.Super. 107

206 A.2d 171

In the Matter of the ESTATE of Joseph DAMATO, Deceased.

No. A--887.

Superior Court of New Jersey Appellate Division.

Argued Oct. 19, 1964.

Decided Jan. 5, 1965.

Ralph W. Chandless, Hackensack, for appellant James Damato, executor (Chandless, Weller & Kramer, Hackensack, attorneys).

Samuel Saffron, Clifton, for respondent Philip Damato (Werksman, Saffron & Cohen, Clifton, attorneys).

Before Judges GOLDMANN, SULLIVAN and LABRECQUE.

The opinion of the court was delivered by

LABRECQUE, J.A.D.

This is an appeal from a judgment of the Probate Division awarding the balances in two out-of-state bank accounts to decedent's son Philip Damato.

The facts are not in dispute. Decedent died on November 6, 1960, a resident of Paterson, New Jersey. Although he had been engaged in the wastepaper business in the Paterson area for many years, he also had business interests in Florida, including the operation of a small stable of race horses. His will was admitted to probate by the Surrogate of Passaic County, his son James Damato qualifying as the executor thereof. On July 26, 1962 the executor filed a verified complaint praying, Inter alia, for instructions as to the disposition of the balances remaining in two savings accounts in the Bank of Hollywood, Hollywood, Florida, which are the subject of the present controversy.

The first account, #9503, had been opened by the decedent on February 7, 1957 in the name of Joseph Damato in trust for Philip Damato. At the time of decedent's death a balance of.$11,165.84 remained therein. On September 24, 1957 decedent opened a second account, #11141, also in his name in trust for Philip Damato. In this account, the balance at the time of his death was $5,684.26.

The first account was opened with a deposit of $7000, all but $201.66 of which had been transferred from the decedent's business account in the First National Bank of Passaic County, Paterson, New Jersey. Additional deposits totalling $3000, with interest payments, brought the balance up to $10,139.91 on September 24, 1957. The second account was started on the latter date with a $10,000 deposit transferred from decedent's 'Racing Account' in the Hollywood bank. On January 19, 1959, $5000 of this was withdrawn by the decedent and used for his own purposes. Thereafter there was no activity in either account beyond the accumulation of interest.

Both Philip and James Damato were sons of the decedent. Philip worked for his father in the Paterson business and never knew of the accounts until after the death of his father. The passbooks for both accounts remained in decedent's possession and were found among his papers in Florida.

In awarding the balance in each account to Philip, the trial judge held that the transactions were governed by the law of Florida, their Situs, and since Florida had adopted the rule of In re Totten, 179 N.Y. 112, 71 N.E. 748, 70 L.R.A. 711 (Ct.App.1904), they were effective to pass the balance in each account to Philip upon the death of the decedent.

The appellant contends that the trial judge erroneously took judicial notice of the law of Florida, notwithstanding the failure of the respondent to comply with the provisions of N.J.S. 2A:82--27, N.J.S.A., and that, having done so, he erroneously applied the substantive law of Florida rather than its conflict of laws.

N.J.S. 2A:82--27, N.J.S.A. provides that:

'Whenever the common or statute law of any other State or country is pleaded, or notice thereof given to the court and each adverse party at or before the pretrial conference, or at least 10 days before trial when there is no pretrial conference, or within such other time as the court may fix by order, in an action in any court of this State, the court shall take judicial notice thereof. In the absence of such pleading or notice, it shall be presumed that the common law of such State is the same as the common law as interpreted by the courts of this State.'

The statute in question had its origin in the Uniform Judicial Notice of Foreign Law Act and has been construed to be a remedial statute whose language is to be given a liberal interpretation. Franzen v. Equitable Life, etc., Society, 130 N.J.L. 457, 33 A.2d 599 (Sup.Ct.1943); M. N. Axinn Co. v. Gibraltar Development, Inc., 45 N.J.Super. 523, 133 A.2d 341 (App.Div.1957).

Respondent does not dispute the failure to plead or give formal notice of reliance upon the law of Florida. He urges, however, that the spirit of the statute has been complied with since appellant was on notice that the law of Florida was being relied upon to pass title to him as the beneficiary claiming to be entitled to the balance in the two accounts.

The executor's verified complaint for instructions was the only pleading filed in the cause, although the rules required the filing of an answer, an answering affidavit, or a motion, unless the action was to proceed Ex parte. R.R. 4:85--4. The trial judge proceeded to dispose of the case on the allegations of the complaint, although counsel for Philip and for his sister appeared and argued the respective claims of their clients. It could well be said that the executor should have pleaded the law of Florida and raised the question of its applicability to the transaction in issue. When he failed to do so, it would have been the better practice for the respondent to have filed an answer complying with N.J.S. 2A:82--27, N.J.S.A. However, we are satisfied that the omission worked no surprise or prejudice to the appellant. The executor was on notice, through briefs and otherwise, that Florida law was being relied upon by counsel and considered by the court. His attorneys asked for and were granted leave to submit a supplemental brief as to the law of Florida. Our attention is not called to any objection to the court's consideration or application of the law of Florida. With certain exceptions not here relevant, appellant should not be permitted to raise a point here which was not raised below. Domestic Fuel Co. v. American Petroleum Corp.,6 N.J. 538, 542--543, 79 A.2d 283 (1951); Clark v. Wichman, 72 N.J.Super. 486, 493, 179 A.2d 38 (App.Div.1962).

However, aside from procedural considerations, we are satisfied that the trial judge properly took judicial notice of the law of Florida and determined that it, rather than the common law of New Jersey, was applicable. The underlying philosophy of the Uniform Judicial Notice of Foreign Law Act is substantial justice. Colozzi v. Bevko, Inc., 17 N.J. 194, 204, 110 A.2d 545 (1955). The rules of procedure should be flexible enough to allow for correction of inadvertent omissions, and should be keyed to effect but one result--the administration of substantive justice as it would be administered in the foreign court. Id., citing Note, 37 Cornell L.Q. 748, 756 (1952). See also Leary v. Gledhill, 8 N.J. 260, 84 A.2d 725 (1951). In the context of the case, the trial judge was not precluded from ascertaining the law of florida, notwithstanding failure to plead it formally. Colozzi v. Bevko, Inc., supra, 17 N.J. at p. 203, 110 A.2d 545; N.J.S. 2A:82--28, N.J.S.A.; cf. M. N. Axinn Co. v. Gibraltar Development, Inc., supra, 45 N.J.Super. at p. 535, 133 A.2d 341; Fitzgerald v. Fitzgerald, 66 N.J.Super. 277. 281, 168 A.2d 851 (Ch.Div.1961).

The law is well settled that the creation of an Inter vivos trust in money or securities, as distinguished from a testamentary trust, is governed by the law of the Situs of the money or securities. 2 Beale, Conflict of Laws, § 294.3, p. 1019 (1935); Cutts v. Najdrowski, 123 N.J.Eq. 481, 483, 198 A. 885 (E. & A. 1937); Hutchison v. Ross, 262 N.Y. 381, 187 N.E. 65, 89 A.L.R. 1007 (Ct.App.1933); Restatement, Conflict of Laws, § 294, subsec. (1), p. 376 (1934). The validity of an Inter vivos trust of choses in action is determined by the law of the place where the transaction takes place. Cutts, supra, 123 N.J.Eq. at p. 483, 198 A. 885; Hooton v. Neeld, 12 N.J. 396, 407, 97 A.2d 153 (1953); Restatement, supra, § 294, subsec. (2).

The savings bank trust doctrine which the trial judge found to be dispositive of the issue before him was set forth in its present form in In re Totten, supra, to the effect that:

'A deposit by one person of his own money in his own name and as trustee for another, standing alone, does not establish an irrevocable trust during the lifetime of the depositor. It is a tentative trust merely, revocable at will, until the depositor dies or completes the gift in his lifetime by some unequivocal act or declaration, such as delivery of the passbook or notice to the beneficiary. In case the depositor dies before the beneficiary without recovation, or some decisive act or declaration of disaffirmance, the presumption arises that an absolute trust is created as to the balance on hand at the death of the depositor.'

See Restatement 2d, Trusts, § 58 p. 155 (1959); 1 Scott on Trusts (2d ed. 1956), § 58.3, p. 489; 1 Bogert, Trusts and Trustees, § 47, p. 306 (1951).

In Cutts v. Najdrowski, supra, the court held that where a New Jersey resident opened an account in a New York savings bank in his name in trust for another, since the transaction was effective there, it was effective here to pass title to the balance in the account at the depositor's death, to the other person named, under the Totten trust doctrine. It was so held notwithstanding that such a transaction, had it been consummated here by a New Jersey resident, would have been invalid to pass title as violative of our statute of wills or as an ineffective gift inter vivos. Nicklas v. Parker, 69 N.J.Eq. 743, 61 A. 267 (Ch.1905), affirmed 71 N.J.Eq. 777, 61 A. 267, 71 A. 1135 (E. & A. 1907); Thatcher v. Trenton Trust Co., 119 N.J.Eq. 408, 182 A. 912 (Ch.1936); Travers v. Reid, 119 N.J.Eq. 416, 182 A. 908 (Ch.1936); Bendix v. Hudson County National Bank, 142 N.J.Eq. 487, 59 A.2d 253 (E. & A. 1948). Since then, however, N.J.S.A. 17:9A--216 has...