Drewen v. Bank of Manhattan Co. of City of New York

• Decision Date: 10 November 1959
• Docket Number: No. A--18,A--18
• Citation: 76 A.L.R.2d 221,155 A.2d 529,31 N.J. 110
• Parties: , 76 A.L.R.2d 221 John DREWEN, Administrator cum testamento annexo of the Estate of Doris Ryer Nixon, deceased, Plaintiff-Appellant, v. BANK OF MANHATTAN COMPANY OF CITY OF NEW YORK, Executor and Trustee of the last will and testament of Stanhope Wood Nixon, Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 110

31 N.J. 110

155 A.2d 529, 76 A.L.R.2d 221

John DREWEN, Administrator cum testamento annexo of the Estate of Doris Ryer Nixon, deceased, Plaintiff-Appellant, v. BANK OF MANHATTAN COMPANY OF CITY OF NEW YORK, Executor and Trustee of the last will and testament of Stanhope

Wood Nixon, Defendant-Respondent.

No. A--18.

Supreme Court of New Jersey.

Argued Sept. 29, 1959.

Decided Nov. 10, 1959.

John R. Kelly, Tenafly, for plaintiff-appellant.

Douglas M. Hicks, New Brunswick, for defendant-respondent (Hicks, Kuhlthau, Molineux & Nagle, New Brunswick, attorneys; Joseph M. Kraft, New Brunswick, on the brief).

The opinion of the court was delivered by

PROCTOR, J.

This suit was brought in the Superior Court, Chancery Division, by John Drewen, administrator C.t.a. of the estate of Doris Ryer Nixon, to enforce a contract executed by the plaintiff's decedent and her husband, Stanhope Wood Nixon, the defendant's decedent. On motion addressed to the complaint, the Chancery Division dismissed the administrator's suit, and the dismissal was affirmed by the Appellate Division. 55 N.J.Super. 331, 150 A.2d 779 (1959). Certification was granted. 30 N.J. 154, 152 A.2d 171 (1959).

The complaint sets forth the following allegations: Doris Ryer Nixon and Stanhope Wood Nixon were married in 1917. They had two children, Lewis and Blanche. On July 27, 1945, the husband and wife executed an agreement settling the rights of each in the other's property in contemplation of a divorce which was granted some months later. As part of that agreement, Stanhope Wood Nixon promised never to reduce the quantity or quality of the children's interests in his estate, as set forth in a will executed on the same day as the agreement. By that will, each child was to receive about 30% Of Nixon's estate in fee. If one child were to predecease the testator without leaving issue, the surviving child would take the other's share.

In 1948 Doris Ryer Nixon died testate in California. An executor was appointed there and undertook the administration of her estate. In 1951 Stanhope Wood Nixon executed a new will, which revoked his 1945 will, changed the outright gifts to his children to life estates, with life estates over to surviving issue and, finally, remainders to charities. The will also contained an In terrorem clause which would void the bequests made to any one who should 'directly or indirectly * * * call in question before any tribunal the provisions of any legacy, devise or provision herein, * * *.' The daughter, Blanche, died in 1955 without issue, and the son, Lewis, survived and succeeded to her share under either of the father's wills. Stanhope Wood Nixon died in 1958, and his 1951 will was admitted to probate by the Surrogate of Middlesex County. The defendant is the executor and trustee under that will.

In 1958 the California executor of Doris Ryer Nixon's estate renounced in favor of the plaintiff, who obtained letters of administration C.t.a. from the Surrogate of Hudson County for the sole purpose of prosecuting this suit. Lewis Nixon was aware of the appointment of the plaintiff as administrator C.t.a., and of the institution of this suit. He has offered no objection, doubtless because of the In terrorem clause.

Plaintiff in this action seeks judgment declaring that the 1945 agreement is binding on the estate of Stanhope Wood Nixon; that his executor be directed to administer the estate and make distribution thereof in conformity with that agreement, and that the 1951 will be reformed accordingly. In essence, the plaintiff seeks specific performance of the 1945 agreement.

The Chancery Division dismissed the complaint on the ground that the administrator C.t.a. had no standing to prosecute the suit, since no benefit could accrue from it to the estate. The Appellate Division affirmed, holding that '(a)s administrator with the will annexed, he has shown no right, power or duty to maintain this action.' 55 N.J.Super. at page 336, 150 A.2d at page 781.

On this appeal plaintiff contends that his decedent, Doris Ryer Nixon, had in her lifetime a sufficient interest as promisee of the contract to enforce it, and that upon her death her right passed to her California executor and in turn to the plaintiff. On the other hand, the defendant contends that the only rights passing to her personal representatives are those whose enforcement would result in the realization of assets for distribution to the creditors and beneficiaries of her estate. It urges that the rights of Lewis Nixon belong to him as third party beneficiary of the 1945 contract, and not as beneficiary of the estate of Doris Ryer Nixon, and that under N.J.S. 2A:15--2, N.J.S.A., he has the right to enforce the contract, and is capable of instituting the necessary suit himself. Furthermore, it argues that if Stanhope Wood Nixon breached the contract, he did so at his death, which was after the death of plaintiff's decedent; no cause of action accrued to plaintiff's decedent during her lifetime and therefore none passed to the plaintiff.

It is beyond question that a person may bind himself by contract to make a particular will. Epstein v. Fleck, 141 N.J.Eq. 486, 57 A.2d 395 (E. & A.1948). It is equally clear that Lewis Nixon, the third party beneficiary of the 1945 contract, could have maintained a suit for specific performance. Di Girolamo v. Di Matteo, 108 N.J.Eq. 592, 156 A. 24 (Ch.1931); Hendershot v. Hendershot, 135 N.J.Eq. 232, 37 A.2d 770 (Ch.1944); Hufnagel v. Scholp, 138 N.J.Eq. 16, 46 A.2d 394 (Ch.1946). Our courts have long recognized the right of a third party beneficiary to enforce a simple contract. Joslin v. New Jersey Car Spring Co., 36 N.J.L. 141 (Sup.Ct.1873). N.J.S. 2A:15--2, N.J.S.A., is declaratory of that rule and extends it to cover contracts under seal. Borough of Brooklawn v. Brooklawn Housing Corp., 124 N.J.L. 73, at pages 75--76, 11 A.2d 83 (E. & A.1940) . However, the statute is merely permissive and does not exclude the rights of other parties to the contract. See Holt v. United Security Life Ins. Co.,76 N.J.L. 585, at page 590, 72 A. 301, 21 L.R.A.,N.S., 691 (E. & A.1909).

A promisee of a contract for the benefit of a third party donee has a sufficient interest in the enforcement of the promise to entitle him to sue for damages. Restatement, Contracts, § 135(b) (1932); see also O'Neill v. Supreme Council, Am. L. of Honor, 70 N.J.L. 410, 57 A. 463 (Sup.Ct.1904). He may also invoke the aid of a court of equity, for the general reason that his remedy at law is inadequate, and he should not be denied an effective means of compelling fulfillment of a promise that he bought and paid for. Croker v. New York Trust Co., 245 N.Y. 17, 156 N.E. 81 (Ct.App.1927); In re Book's Estate, 297 Pa. 543, 147 A. 608 (Sup.Ct.1929); Restatement, Contracts, § 138; 5 Corbin, Contracts, § 1154, p. 672 (1951); Note, 41 Harv.L.Rev. 97 (1927). In the case of a suit on a contract to make a will, there is the additional reason that breach of such a contract is deemed to be a fraud against which equity will afford relief. See Hendershot v. Hendershot, supra; Minogue v. Lipman, 25 N.J.Super. 376, at page 392, 96 A.2d 426 (Ch.Div.1953), affirmed 28 N.J.Super. 330, 100 A.2d 684 (App.Div.1953).

It is apparent from the above that had the 1945 contract been breached during the lifetime of Doris Ryer Nixon she would have had the right to equitable relief. The question for our determination is whether this right passed to the plaintiff as administrator C.t.a. of her estate. The regularity of the appointment of the plaintiff as such administrator is not questioned, and the parties and both courts below are in agreement that his powers are set forth in N.J.S. 3A:6--46, N.J.S.A., which provides:

'A substituted administrator with or without the will annexed shall be entitled to demand and receive the whole of the personal estate of his decedent, except such portion thereof as shall have been properly and justly paid out and distributed. He may sue for and recover all such assets, or their equivalent whether legal or equitable from any person, his heirs or personal representatives, chargeable therewith, and in like manner charge his predecessor in office for any breach of trust or maladministration and shall in any such litigation represent the creditors and all persons beneficially interested in the estate.

'Such substituted administrator shall have generally all the rights and powers and be subject to the same duties and liabilities as the original executor or administrator, but no substituted administrator with the will annexed shall exercise any powers of sale as to real estate conferred by the will upon the executor as such or upon the executor as trustee except as authorized by section 3A:16--10 of this title.'

This statute does not confine the administrator C.t.a. to the recovery of assets to be distributed through his decedent's estate. It also confers upon him all the rights and powers, and subjects him to the same duties and liabilities as are generally given and imposed upon an original executor or administrator, with limitations not here pertinent.

The general rule is that a right of action founded upon a contract survives the person entitled in his lifetime to sue, so that the right passes upon his death to his personal representative. Schouler, Executors, § 277 (3d ed. 1901). As early as 1646 it was held that the personal representative of a promisee of a contract made exclusively for the benefit of a third party donee could sue for the breach of that contract even though the donee beneficiary could also sue. The case was reported by William Style as (Anon.) Style 6, 82 Eng.Rep. 487 (K.B.1646):

'I. Assumes and promiseth to B. that if B. will pay 50 . to C. his son, who was maried to D. the daughter of I. at such a time, that he will pay 100 . to D. his daughter at such a time; B. pays the 50 . to C. at the time appointed, I. fails in payment of the 100 ....