Ditmars v. Camden Trust Co.

Decision Date03 November 1952
Docket NumberNo. A--24,A--24
Citation92 A.2d 12,10 N.J. 471,35 A.L.R.2d 822
Parties, 35 A.L.R.2d 822 DITMARS et al. v. CAMDEN TRUST CO. et al.
CourtNew Jersey Supreme Court

Francis E. P. McCarter, Newark, argued the cause for the appellant John R. Ditmars (McCarter, English & Studer, Newark, attorneys).

J. Mitchell Reese, Trenton, argued the cause for the appellants Gladys L. Reed and Kathryn C. Wolford (Scammel & Reese, Trenton, attorneys).

Walter R. Carroll, Camden, argued the cause for the respondents (Carroll, Taylor & Bischoff, Camden, attorneys).

I. Herbert Levy, special master, argued the cause Pro se.

Douglas Beck Tyler, Camden, argued the cause for the estate of Joseph Beck Tyler, deceased (Tyler & Tyler, Camden, attorneys).

The opinion of the court was delivered by

BURLING, J.

This matter consists of appeals brought by the plaintiffs, John R. Ditmars, Jr., Gladys L. Reed and Kathryn C. Wolford, principally to review portions of a final judgment entered in the Superior Court, Chancery Division on September 20, 1951, 10 N.J.Super. 306, 76 A.2d 280, and incidentally to review certain correlative orders of that court, the most recent here involved having been filed February 15, 1952, concluding protracted litigation of the defendant Camden Trust Company's accounting as trustee of the estate of John R. Ditmars, deceased, and of claims of plaintiff John R. Ditmars, Jr., against the defendant Camden Trust Company in its individual corporate capacity. The appeals are resisted not only by the defendant Camden Trust Company in both its aforesaid capacities, but also by the representatives of the estate of former counsel for the defendant (in support of allowances for his own services and costs), and by the special master to whom the matter of trustee's account was referred (in support of his own fee as master). The appeals were addressed to the Superior Court, Appellate Division, but prior to hearing there certification was allowed upon our own motion.

To obtain the proper perspective for an intelligent declaration of the law of this case it is incumbent upon us first to delineate somewhat in detail the history of antecedent facts and procedural ramifications which this conflict has engendered since the demise of the plaintiffs' father, whose testamentary directions constitute the fountainhead of their strife.

The testator, John R. Ditmars, then a resident of Haddon Heights, Camden County, New Jersey, died on December 21, 1925, survived by his widow, Katharine L. Ditmars, and three children of a prior marriage, namely, John R. Ditmars, Jr. (hereinafter called Ditmars, Jr.), Gladys L. Reed and Katharine (Kathryn) C. Wolford. The decedent's last will and testament dated May 17, 1924, was admitted to probate by the Surrogate of the County of Camden, State of New Jersey, on January 4, 1926, and Katharine L. Ditmars and Camden Safe Deposit and Trust Company were appointed executors of his estate. The testator (Item Fourth of the will) devised and bequeathed his entire residuary estate to Camden Safe Deposit and Trust Company, as trustee, in trust 'To invest the same and to pay the income' to his widow, Katharine L. Ditmars, for life, and upon her death to 'pay all the rest, residue and remainder' of his estate to his three children, the present plaintiffs. Testator also provided as follows:

'Fifth: It is my will that all stocks, bonds and other securities belonging to me shall form part of the trust fund created by my will, but my trustee, with the concurrence in Writin of my wife, the said Katharine L. Ditmars, may vary or alter the aforesaid investments, whenever in its judgment it shall be deemed to be for the best interests of my estate so to do. I direct, however, that security of the investment and stability of dividend or interest return, shall be the controlling factors in the choice of any such new investments.

'Sixth: If at any time the income arising from the trust fund hereby created shall, in the judgment of my wife, be inadequate for her comfortable support and maintenance, I authorize my trustee, on the application of my wife, to transfer to her absolutely such portion of the corpus of the trust fund as shall in its judgment be wise and provident under the circumstances, bearing in mind always that my chief object and desire is to conserve the principal of the trust fund so as to secure to my wife a reasonably certain fixed and adequate income during her life.'

The executors filed the inventory and appraisement of the estate on February 17, 1926, showing a total of $107,625.70.

Testator's son, John R. Ditmars, Jr., appealed the surrogate's decree of probate on July 3, 1926 to the former Camden County Orphans' Court. Suffering an affirmance there, he appealed to the former Prerogative Court, which subsequently also affirmed the decree of probate. Thereupon he took a further appeal to the former Court of Errors and Appeals.

During this period in which John R. Ditmars, Jr. was contesting the probate of his father's will, he was also engaged in a suit against his stepmother in another forum. He had brought suit against her in the United States District Court for the District of New Jersey attacking her title to testator's residence in Haddon Heights (title to which had been held by her and the decedent as tenants by the entirety) on the ground that his stepmother's marriage to his father was not lawful. From the decree in her favor entered in that court he had appealed to the Circuit Court of Appeals for the Third Circuit. This appeal was subsequently abandoned (as hereinafter noted).

Pending the will contest, First Camden National Bank and Trust Company was administrator Pendente lite, its appointment as such by the Camden County Orphans' Court having been made December 18, 1926. Also, the executors had filed on January 10, 1927 their first account covering their actions in collection and settlement of estate interests from their appointment (almost a year before) to the time of appointment of the administrator Pendente lite. Notice to all parties in interest was given according to law, and it appears that testator's three children, the plaintiffs herein, were then of full age. The account was allowed by the Camden County Orphans' Court on February 4, 1927, apparently without any objection or exception by or on behalf of any of these plaintiffs.

On October 19, 1928 an agreement of settlement was entered into between Katharine L. Ditmars and Camden Safe Deposit and Trust Company, as executors of the last will and testament of John R. Ditmars, deceased, Katharine L. Ditmars, individually, and Ditmars, Jr. This agreement recited the pendency of the above mentioned appeals in the former Court of Errors and Appeals and the United States Circuit Court of Appeals and Ditmars, Jr.'s declared intention to bring suit to impress on the assets of the estate a trust for specific performance of an alleged contract entered into between himself and his father the object of which was to divide his father's estate into four parts, one of which was to be received outright by Ditmars, Jr., and also his asserted claim for $37,000 for the value of assets he allegedly owned but which were purportedly sold by his father during his lifetime without Ditmars, Jr.'s consent. Among other things in this agreement, Ditmars, Jr. agreed to abandon his litigation and Katharine L. Ditmars renounced all her rights under Item Sixth of the testator's will (quoted Ante); she also agreed to receive only a stated income of $3,600 per annum from the trust assigning the balance of the net income therefrom to Ditmars, Jr. (a supplemental agreement was later executed to reduce her income to $1,800 per annum). And the trustee agreed as follows:

'10. Camden Safe Deposit and Trust Company, as trustee under the will of John R. Ditmars, deceased, agreed 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.'

As a result of the agreement of October 19, 1928, the pending litigation in the will contest was terminated prior to hearing of the matter by the former Court of Errors and Appeals, and Ditmars, Jr. forebore the assertion of his other alleged claims against the estate. Also Ditmars, Jr. abandoned his appeal, pending in the Circuit Court of Appeals, in his individual suit against Katharine L. Ditmars. Thereafter the administrator Pendente lite filed its account, on notice to all parties in interest, and this account was allowed by the Camden County Orphans' Court on December 7, 1928, and, as was the case with the executors' first account (ante), there appear to have been no exceptions filed thereto.

On March 7, 1930, on due notice to all parties in interest, the second and final account of Katharine L. Ditmars and Camden Safe Deposit and Trust Company as executors of the estate of John R. Ditmars, deceased, was allowed by the Camden County Orphans' Court. The plaintiffs herein were parties to the accounting proceedings and were represented by counsel, but the record before us shows no exceptions taken by them to this according.

In June 1930 Ditmars, Jr. began to borrow successive sums of money for his own individual purposes from Camden Safe Deposit and Trust Company, in its separate corporate capacity. Each loan was evidenced by a demand promissory note. The first loan, made on June 6, 1930, was in the amount of $7,500 and carried interest at 6% Per annum. On June 6, 1930, as collateral security for this and any subsequent loans, Ditmars, Jr. executed and delivered to Camden Safe Deposit and Trust Company an assignment of his entire interest in his father's estate. This assignment agreement provided as follows:

'I, the said ...

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