Flanigan v. McFeely, A--41

• Decision Date: 09 January 1956
• Docket Number: No. A--41,A--41
• Citation: 120 A.2d 102,20 N.J. 414
• Parties: John G. FLANIGAN, as substituted administrator of the Estate of Mary McFeely, deceased, Plaintiff-Appellant, v. Joseph B. McFEELY, as executor of the Estate of Bernard N. McFeely, deceased, Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 414

20 N.J. 414

120 A.2d 102

John G. FLANIGAN, as substituted administrator of the Estate of Mary McFeely, deceased, Plaintiff-Appellant, v. Joseph B. McFEELY, as executor of the Estate of Bernard N McFeely, deceased, Defendant-Respondent.

No. A--41.

Supreme Court of New Jersey.

Argued Nov. 21, 1955.

Decided Jan. 9, 1956.

Victor S. Kilkenny, West New York, argued the cause for appellant (Otis & Kilkenny, West New York, attorneys; Victor S. Kilkenny, West New York, and Isadore Glauberman, Jersey City, of counsel).

Abraham J. Slurzberg, Jersey City, argued the cause for respondent (Joseph B. McFeely, Hoboken, attorney; Abraham J. Slurzberg, Jersey City, of counsel).

The opinion of the court was delivered by

WILLIAM J. BRENNAN, Jr., J.

Plaintiff, the substituted administrator of the estate of Mary McFeely, deceased, appeals from an adverse judgment entered on a jury verdict in the Superior Court, Law Division, Hudson County. We certified the appeal of our own motion while pending in the Appellate Division.

Mary McFeely died intestate on June 4, 1942, and on June 10, 1942 her brother, Bernard N. McFeely, was appointed administrator of her estate when the other next of kin executed a renunciation in his favor. On August 8, 1949 Bernard N. McFeely died testate and the defendant, Joseph B. McFeely, qualified as executor of his will. The complaint herein charges that Bernard did not file an inventory, or account, or fully perform his duties as administrator and demands of his executor an accounting, and judgment, less lawful deductions, in the amount of $292,448.86, the value of Mary's estate as reported by Bernard in his transfer inheritance tax return. The suit was brought after Bernard's executor unsuccessfully resisted the appointment of the substituted administrator. See In re McFeely's Estate, 11 N.J.Super. 518, 78 A.2d 616 (App.Div.1951), affirmed 8 N.J. 9, 83 A.2d 524 (1951); see also 10 N.J. 133, 89 A.2d 658 (1952).

This is a statutory action authorized by N.J.S. 3A:6--46, N.J.S.A. An action of this nature has been provided for since Paterson's Laws, p. 154, section 3, passed March 2, 1795, and stems from the statute 4 and 5 William & Mary, Ch. 24; Schenck v. Schenck's Ex'rs, 3 N.J.L. 149 (Sup.Ct.1809). The statute in pertinent part now provides:

'A substituted administrator * * * 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 * * * Shall in any such litigation represent the creditors and all persons beneficially interested in the estate.' (Emphasis ours.)

The executor's answer to the demand of the substituted administrator for the turnover of Mary's estate, less lawful deductions, was that on June 10, 1942, the day of Bernard's appointment as administrator, the other next of kin of Mary, 11 in number, transferred their interests to Bernard by a writing of that date. The substituted administrator filed a reply to the answer alleging that the 'said paper * * * was the product of fraud in the Factum' in that Bernard secured the signatures of the 11 next of kin thereto by 'falsely and fraudulently representing to the signers thereof that they were executing a correctory form of renunciation, when in truth and in fact * * * the said paper purported to be a legal instrument of a different nature and character, and which said instrument purported to be a transfer of their right, title and interest in the Estate of Mary McFeely, deceased, and the said beneficiaries would not have executed this paper, if its true nature had been divulged to them, and said instrument was executed by the beneficiaries in reliance upon the representations made to them that it was a correctory renunciation.'

The executor thereupon moved for a summary judgment on the ground that the alleged wrong was not a wrong to the estate but rather to the individual beneficiaries and that they alone had standing to attack the transfers. Summary judgment was granted upon that ground, but on appeal the Appellate Division reversed the summary judgment, 26 N.J.Super. 522, 525, 98 A.2d 610, 611 (1953), certification denied 13 N.J. 295, 99 A.2d 453 (1953), the ground of reversal being that

'The statute explicitly authorizes the substituted administrator to sue in behalf of 'all persons beneficially interested in the estate.' * * *

'Defendant's suggestion that the only parties in interest are the individual beneficiaries who challenge the assignment, ignores the representative capacity which the statute confers upon the substituted administrator. He speaks for the beneficiaries and may assert in their behalf their challenge to the adequacy of the defense. That defendant may prevail as to all beneficiaries thus represented does not militate against the right of the plaintiff to speak for them. * * *'

When, following remand, the case came on for trial and the proofs were in the trial judge nevertheless effectually changed the action from one by the substituted administrator into an action in the individual right of certain of the next of kin. He refused to submit the case as one of the substituted administrator in his representative capacity as spokesman for all the beneficiaries and limited the jury to a decision whether fraud was practiced upon each of 4 of the 11 next of kin. Only 6 of the original 12 of Mary's next of kin were still living at the time of the trial. Four of the survivors testified for the substituted administrator and the remaining two were witnesses for the defendant executor--in fact had been allowed to intervene as parties defendant with him. The sole issue tried was that identified in the pretrial order, viz., 'whether there was fraud which vitiates the writing of June 10, 1942.' It is not necessary to detail the evidence. It is enough to note that it was amply sufficient to present a jury question as to that issue. The alleged fraud was said to have been practiced at a meeting at Bernard's home at which all the next of kin and Bernard's lawyer were present. The testimony of the four next of kin who testified for plaintiff as to the events of that meeting, properly appraised by the trial judge as sufficient to raise a jury question, was more corroborated than opposed by the versions of the two next of kin who testified for the defendant executor.

But the trial judge was concerned that the deceased next of kin may have had prior knowledge of the contents of the disputed paper when they came to the meeting. Yet none of the next of kin who did testify said that he or she was given such information before the meeting; and in that circumstance the jury might properly have inferred that similarly nothing was said to any of the deceased next of kin. In any event, we cannot see how the omission by the substituted administrator to offer proof negativing that possibility created an infirmity in his case as representative, under the statute, of 'all persons beneficially interested in the estate.' Nor do we perceive such infirmity from the fact that two of the next of kin sided with the defendant executor.

The substituted administrator's right to the turnover of 'the whole of the personal estate of his decedent' was pegged upon the alleged invalidity for fraud in the Factum of the...