Fox' Estate, In re

• Decision Date: 29 May 1950
• Docket Number: No. A--122,A--122
• Citation: 73 A.2d 575,4 N.J. 587
• Parties: In re FOX' ESTATE.
• Court: New Jersey Supreme Court

Page 587

4 N.J. 587

73 A.2d 575

In re FOX' ESTATE.

No. A--122.

Supreme Court of New Jersey.

Argued April 17, 1950.

Decided May 29, 1950.

Arthur C. Mullen, Jersey City, argued the cause for appellant Anna Ryan Fox, individually and as coexecutrix of the will of Peter J. Fox, deceased (Armstrong & Mullen, Jersey City, attorneys).

Walter E. Cooper, Newark, argued the cause for respondents Georgina Fox, Cecelia Fox, and Frances A. Fox, individually and as coexecutrix of the will of Peter J. Fox, deceased (Irving C. Picker, Bayonne, attorney).

The opinion of the court was delivered by

HEHER, J.

The issue here is one of testamentary construction.

The testator, Peter J. Fox, died December 26, 1938. His will was made October 16, 1931. He devised the residue of his estate, real and personal, remaining after payment of his debts and certain general and specific legacies, to his wife, Anna Ryan Fox, and his three sisters, Georgina Fox, Cecelia Fox and Frances A. Fox, in equal shares, the survivor or survivors to take the share of such of these legatees as should predecease the testator. The residuary bequest was made the subject of paragraph 6 of the will.

Paragraph 7 is in these words: 'I hereby direct, authorize and empower my said executrices, in their absolute and uncontrolled discretion and as they shall think fit to continue for the benefit of my estate, and for such periods or respective periods as they shall think expedient, any business enterprise in which I may be engaged or interested in at the time of my death, whether alone or in partnership or otherwise, with any person, persons, or corporations.'

And paragraph 8 makes the following provision: 'I direct that during and until my estate shall have been sold or converted into cash, my said executrices shall pay to my said wife, Anna Ryan Fox, the sum of $15.00 each week.'

There were no payments to the widow under paragraph 8; and the subject matter of the litigation is the widow's claimed right to priority of payment of the accumulated arrearages out of both corpus and income.

At the time of his death, the testator owned 90% Of the capital stock of the Phox Bus Company, the corporate operator of a single-bus franchise on Bergen Avenue in Jersey City. The assets of the corporation consisted principally of the franchise and the bus devoted to this use; there was little else. This was the only 'business enterprise' in which the testator was 'engaged or interested' at the time of his death. It was likewise his only business and his only source of income at the time the will was made. The testator and his wife were cohabiting together at the time of the making of the will and at the time of his death; and her welfare after his death was undoubtedly his primary concern.

The will was probated March 24, 1939. On April 6th following, a decree of insolvency was entered against the Bus Company in the Court of Chancery of New Jersey, and a receiver was appointed. Taylor v. Phox Bus Company, 127 N.J.Eq. 255, 12 A.2d 674 (E. & A.1940). The receiver continued the operation of the business until the bus was sold in December, 1944, pursuant to an order of the Court of Chancery. Taylor v. Phox Bus Company, 136 N.J.Eq. 35, 39 A.2d 873 (E. & A.1944). Respondents' insistence on the brief that the testator was the owner of but 70% Of the corporate capital stock, and that his widow, his sister Frances A., and his nephew L. Arthur Frame each owned 10% Of the capital stock is resolved adversely to that contention by the statement of the evidence prepared under Rule 1:2--23 of this Court, and settled and approved by an order entered in the County Court on February 7, 1950. The statement certified that the estate of Peter J. Fix consisted of 90% Of the capital stock of the corporation. Frame owned one share, or 10% Of the outstanding shares. Fox v. Frame, 137 N.J.Eq. 177, 44 A.2d 38 (E. & A.1945). The remainder of the stock was the testator's, according to the record.

The receiver made his accounting. Of the sum turned over by him to the executrices as the owners of 90% Of the stock of the Bus Company, there now remains $15,988.97, after payment of the debts of the estate, the general and specific bequests, and the costs of the several litigations. The statement of evidence made pursuant to the cited rule recites a 'net operating income earned by the corporation' during the receiver's incumbency from April, 1939 to December, 1944, after the payment of income taxes, of $8,827.43.

The County Judge read paragraphs 7 and 8 of the will as one. He held that while paragraph 8 'is a device for securing to the widow of weekly contributions pending the cash liquidation of assets, it is one that testator explicitly conditioned * * * upon (a) the continuation of the business for the benefit of his estate; (b) its continuation for that benefit by His executrices; (c) its continuation for that benefit During the period or periods decmed expedient by the executrices; (d) the 'absolute and uncontrolled discretion' of the executrices In terminating any period of such continuance.' All this, the Judge said, 'has essential bearing upon the prudence and discretion of the order for the weekly payments, since the making of the payments and the accumulations resulting from their non-payment might well have become a factor in the exercise of the discretion given;' and 'the continuance of the business and the occasion of required payments are so interrelated that the same testamentary discretion pervades them both.' This conditioning, he observed, 'was at the heart of the idea with which the paragraph was written;' also that paragraph 8 is 'no more than provisional and subordinate to the larger purpose, the 'predominant idea', of sharing the residium equally among the four, supplemented by power and discretion, which was totally abortive, for the continuance of the business for their benefit as the parties in interest.' The Judge continued: 'It would certainly be bold to assume that the will indicates any intent that the demanded accumulation should be paid to the widow at...