Ditmars v. Camden Trust Co., 139

Citation76 A.2d 280,10 N.J.Super. 306
Decision Date04 October 1950
Docket NumberNo. 139,139
PartiesDITMARS et al. v. CAMDEN TRUST CO. et al. /62.
CourtNew Jersey Superior Court

George W. C. McCarter, Newark, for plaintiff (McCarter, English & Studer, Newark, attorneys).

Scott Scammell, Trenton, for plaintiffs, Gladys L. Reed and Kathryn C. Wolford (Scammell & Reese, Trenton, attorneys).

Walter R. Carroll, Camden, for defendant, Camden Trust Co., individually and as Trustee under the Will of John R Ditmars, deceased (Carroll, Taylor & Bischoff, Camden, attorneys).

No appearance for the defendant Jacob W. Houck, as administrator of Katharine L. Ditmars, deceased.

HANEMAN, J.S.C.

The decedent, John R. Ditmars, died on December 21, 1925. On January 4, 1926 his last will and testament was probated before the Surrogate of Camden County. The Camden Safe Deposit and Trust Company, later known as Camden Trust Company, and Katharine L. Ditmars, widow of the testator (step-mother of the exceptants), were named therein as and appointed executors.

John R. Ditmars, Jr., the son of the testator and one of the exceptants, filed an appeal to the Camden County Orphan's Court from the decree probating the will, on the ground that it was not in truth the last will and testament of his father. The Camden County Orphan's Court affirmed the decree of the Surrogate. John R. Ditmars, Jr. then appealed to the Prerogative Court, which court affirmed the lower court. An appeal was then taken by John R. Ditmars, Jr. to the Court of Errors and Appeals but the said litigation was terminated by an agreement which was dated October 19, 1928.

During the said litigation, the First Camden National Bank and Trust Company was appointed administrator Pendente lite and acted as such. While the litigation involving the probate of the will was pending the executors filed their first account covering the period from the death of the testator to the time when the administrator Pendente lite assumed its duties. The said account was approved by the Camden County Orphan's Court on February 4, 1927. This account had annexed thereto 'Schedule E--List of Investments,' which showed the investments of the estate. The investments, as shown by the said schedule, had a valuation of $106,090.80. The valuation placed upon each of the investments was the inventory valuation. The Inventory and Appraisement was filed on February 17, 1926. The total of the Inventory and Appraisement was $107,625.70. There was also annexed to the first account 'Schedule F--Changes in Investments,' which showed that the executors had sold certain securities. No exceptions were filed to the said first account.

Thereafter, the administrator Pendente lite filed its account covering the period from the time of its appointment to the date of the account, which was approved by the Camden County Orphan's Court on December 7, 1928. There was annexed to this account a detailed 'Statement of Assets,' showing the value of the assets, including the cash on hand, to be $99,864.44. The valuation of each investment as shown on the said 'Statement of Assets' was the original inventory valuation.

The executors' second and final account was approved by the Camden County Orphan's Court on March 7, 1930. There was annexed to the account 'Schedule F--List Investments,' which showed a valuation of $86,915.50. The original inventory valuation was used as the valuation of each investment shown on said Schedule F. There was also annexed a list of the changes that had been made. No exceptions were filed to the said account.

All parties in interest, including the three exceptants, were parties to the said three accounts, and according to the respective decrees allowing each of the said accounts, were duly notified, as required by law, that the said accounts were to be settled.

The Camden Trust Company (hereafter referred to as the Trust Co. or Trustee, depending upon whether reference is to individual or fiduciary capacity) was the sole trustee named in the will and assumed its duties as such after the executors' second and final account was approved on March 7, 1930.

Under the terms of the will, the residue formed the trust corpus. The income was to be given to Katharine L. Ditmars, the widow, during her lifetime, and upon her death, distribution was to be made to the testator's three children, the exceptants. The widow died on February 26, 1941. The original bill of complaint was filed in this court on April 24, 1941 and the amended bill of complaint was filed on May 26, 1941. This court took jurisdiction by a decree dated November 25, 1941, and directed the Trustee to file its account in this court and the complainants to file and serve their exceptions thereto. Reference was made to I. Herbert Levy, a Special Master of the Court of Chancery.

The first and final account of the Trust Co., as Trustee involved in this proceeding, was filed in March 1942. It showed the balance in its hands at that time to be $74,671.44 at the 'inventory or cost value.' Schedule G annexed to the said account, however, showed the 'Market Value' on February 17, 1942 to be $150,973.02.

A supplemental account of the Trustee, dated March 26, 1945, was filed, but this supplemental account was not referred to the Master to audit. It shows the estimated market value of the assets to be $198,361.07. No subsequent account has been filed to show the valuation as of the present time.

The agreement above referred to, being dated October 19, 1928, was made between Katharine L. Ditmars and Camden Safe Deposit & Trust Company, as executors; Katharine L. Ditmars, individually; Camden Safe Deposit & Trust Company, as Trustee; and John R. Ditmars, Jr. This agreement, among other things, provided (1) for a division, as set forth in the agreement, of the income on hand between Katharine L. Ditmars and John R. Ditmars, Jr.; (2) for Katharine L. Ditmars to receive from and after October 1, 1928 only $3,600 per year from the income, and for the remaining income (less the carrying charges of the property in which the widow lived) to be paid to John R. Ditmars, Jr.; (3) for a renunciation of whatever rights the widow had under paragraph Sixth of the will; and (4) for certain commissions to the executors' and allowances to counsel, which were made subject to the approval of the Camden County Orphan's Court. (5) Paragraph 10 of the agreement also provided as follows 'Camden Safe Deposit and Trust Company, as trustee under the will of John R. Ditmars, deceased, agrees with John R. Ditmars, Jr. that in addition to the written consent of Katharine L. Ditmars called for by the Fifth clause of the said will, it will not, without the order of a court of competent jurisdiction, vary or alter the investments which it may receive as such executor and trustee, without the concurrence in writing of John R. Ditmars, Jr.'

On June 6, 1930 an assignment was made by John R. Ditmars, Jr. to Camden Safe Deposit and Trust Company, in which John R. Ditmars, Jr. assigned to the said Trust Co. all his right, title and interest in the estate of his father as collateral to secure the re-payment of a loan made by the said Trust Co. to him.

On May 11, 1934, an agreement was entered into between Katharine L. Ditmars and John R. Ditmars, Jr. and Camden Safe Deposit and Trust Company, as Trustee, in which the agreement dated October 19, 1928 was changed and modified so that the widow's annual income was reduced from $3,600 to $1,800 beginning January 1, 1934, and which, in all other respects, re-affirmed the agreement dated October 19, 1928.

On September 24, 1935, an agreement was entered into between Camden Safe Deposit and Trust Company, individually, and John R. Ditmars, Jr., which provided, among other things, that (1) the Trust Co. would loan Ditmars additional money; (2) as long as the interest was paid on the same at the rate of 6% Per annum the Trust Co. would not demand that Ditmars pay any of his indebtedness to the Trust Co. prior to five years; (3) Ditmars affirmed the previous assignment dated June 6, 1930; and (4) Ditmars agreed that he would not, for a period of five years, institute any proceedings to surcharge the Trust Co. for any loss which the estate might suffer by reason of the fact that Ditmars claimed that it had invested $10,000 of the estate's money improperly in Leeds and Lippincott Company bonds, and (5) 'Except as in the next preceding paragraph hereof provided, Ditmars approves of each and all of the investments heretofore made by the Bank or held by it as trustee under the will of John R. Ditmars, deceased, and approves of the administration of the said trust estate by the Bank as disclosed by the Bank to Ditmars to date.'

The reference to the 'next preceding paragraph' relates to the investment in Leeds & Lippincott Co. bonds.

None of the foregoing agreements was signed by Gladys L. Reed or Kathryn C. Wolford. No proof was adduced to show that John R. Ditmars, Jr. was the agent of or was authorized to sign the said agreement in any manner that would be binding upon the said Gladys L. Reed and Kathryn C. Wolford.

The exceptants, John R. Ditmars, Jr., Gladys L. Reed and Kathryn C. Wolford, filed 297 specific exceptions to the account and a general exception to the entire account.

The plaintiffs filed numerous exceptions to the report of the said Master.

Counsel for the exceptants attempted to file and offer in evidence what is referred to as the 'Additional Exceptions,' the 298th exception above referred to, and stated what he hoped to prove by such additional exceptions, if such additional exceptions could be added to the original 297 exceptions and if proof could be taken in support of the same.

The Master ruled that these 'Additional Exceptions' were not within the scope of the reference. Plaintiffs then made an application directly to the court to amend the bill of complaint to include a fourth cause of action which would enable them to...

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