Hackensack Trust Co. v. Barkerding, C--784

• Decision Date: 16 October 1950
• Docket Number: No. C--784,C--784
• Citation: 9 N.J.Super. 595,76 A.2d 36
• Parties: HACKENSACK TRUST CO. v. BARKERDING et al.
• Court: New Jersey Superior Court

Page 595

9 N.J.Super. 595

76 A.2d 36

HACKENSACK TRUST CO. v. BARKERDING et al.

No. C--784.

Superior Court of New Jersey

Chancery Division.

Oct. 16, 1950.

Wurts & Plympton, Hackensack, for plaintiff.

Warren Dixon, Jr., Hackensack, for defendants Charlotte J. Barkerding, Ellis Barkerding and Helen B. Neuberg.

Winne & Banta, Hackensack, for defendants Peoples Trust Co. and Sara E. Barkerding.

GRIMSHAW, J.S.C.

On July 3, 1928, Adolph H. Barkerding, of the Borough of Park Ridge, in Bergen County, executed a declaration of trust by which he transferred to the Hackensack Trust Company as trustee, 200 shares of the common stock of Mittag & Volger, Inc.:

'In Trust, Nevertheless, for the following uses and purposes, and subject to the following terms, conditions and powers hereinafter set forth, that is to say:

'First: To hold and manage the same and invest and reinvest and surplus of net income as hereinafter stipulated;

'Second: To pay the entire net income as it accrued after deducting the necessary expenses incident hereto, unto the Trustor for and during his lifetime, and upon the death of the Trustor to pay out of the net income as aforesaid the sum of Twenty-Four Hundred ($2400.00) Dollars per annum in equal monthly installments of Two Hundred ($200.00) Dollars payable on the first day of each month unto Charlotte J. Barkerding of the Borough of Montvale, County of Bergen and State of New Jersey, for and during her lifetime, and upon the decease of the said Charlotte J. Barkerding, the Trustee is to terminate the trust and pay over and deliver the corpus thereof and any accrued but undistributed net income after deducting the necessary expenses as herein stipulated, unto the legal representatives of the estate of the trustor, and the receipt of said legal representatives shall be full and sufficient discharge to the Trustee of its obligations hereunder.

'Third: As compensation for its services in the administration of this trust the Trustee shall receive five per centum (5%) of all income collected hereunder by it, and upon the termination of this trust the sum of one per centum (1%) of the fair market value of the corpus of said trust as then constituted.

'Fourth: After the death of the Trustor the Trustee shall add the net income remaining after the payment of the fees, expenses and advances set forth above to the corpus of the trust fund after which, said income so added to corpus shall be and become a part thereof and be dealt with as such.

'Fifth: After the death of the Trustor the Trustee may invest and keep invested such excess income added to the corpus, or any part thereof, in such securities as are permissible under the laws of New Jersey for the investment of trust funds, and in distinguishing between income and corpus the Trustee shall not amortize premiums paid for trust securities and shall take no account of discounts, and after the death of the Trustor all stock and/or extroardinary dividends shall be treated as principal and added to the trust fund so far as permissible by law.'

The life beneficiary is the former wife of the donor of the trust. When the Hackensack Trust Company took upon itself the administration of the trust estate, the 200 shares of stock of Mittag & Volger, Inc., had a value of $20,400 according to an appraisal made by the trustee. In 1949 the assets of Mittag & Volger, Inc., were sold and the corporation went into voluntary dissolution. With the approval of this court the trustee consented to the sale of the corporate assets and upon the retirement of the 200 shares held by it the trustee received approximately $40,000 in cash and will receive several thousand dollars more.

At no time during the life of the trust have the dividends received upon the stock been sufficient to enable the trustee to pay to the life tenant the sum of $2,400 a year, nor is it probable that the trust estate will produce hereafter that much income.

Adolph H. Barkerding died on January 1, 1929, leaving a will, which was probated in Bergen County. The Hackensack Trust Company and Thomas G. Forbes, the executors named in the will, duly qualified. In his will, the testator, after directing the payment of debts and taxes and making several specific bequests, provided as follows:

'6. I give, devise and bequeath all the rest, residue and remainder of my estate, real and personal, wherever located and of whatever character to the Peoples Trust & Guaranty Company of Hackensack, New Jersey, in trust for the purposes herein following:

'(a) To invest available cash in municipal bonds or other equally safe security, keep it invested, and to pay the net income therefrom and from all other assets of my estate with consideration to the needs of my wife and the convenience of collection as to periods of payment, to my wife, Sara E. Barkerding, for and during the term of her natural life.

'(b) For the purpose of adding to income bearing securities I empower my trustee to sell all real estate of which I may die seized and possessed and give good and sufficient deeds of conveyance therefor subject to the occupancy by my said wife of the Homestead on Ridge Avenue. I direct that the said Homestead shall be sold at such time as it may be at a fair valuation, and at that time direct that my said wife shall occupy the house on Park Avenue, or, if that shall also be sold, then my said wife shall be provided with a home suitable to her income.

'(c) Until such time as my estate shall provide sufficient income I direct and empower my trustee to pay from principal adequate cash for my wife's support, comfort, and maintenance, and, further, in its judgment and discretion, in case of the illness or disability of my said wife, if income for her use shall be found to be insufficient for her care, comfort, and maintenance, to expend such portion of principal as may be deemed necessary for such care, comfort, and maintenance, during such illness or disability.

'(d) 200 shares of stock now owned by me in Mittag & Volger, Inc., of Park Ridge, New Jersey, held by the Hackensack Trust Company of Hackensack, New Jersey, in trust, is so held to assure the payment, in the event of my death, of any dividends that may accrue thereafter on such stock to my former wife, Charlotte J. Barkerding, and which stock upon the death of the said Charlotte J. Barkerding, shall revert to my estate together with any unexpended income thereof, in which event such stock and such unexpended income shall be a part of my residuary estate and disposed of accordingly.

'Upon retaking possession of such stock and income if any I direct that all future income therefrom shall be part of the income for life of my wife Sara E. Barkerding, if living.

'If it shall be necessary for the care, comfort, and maintenance of my wife, Sara E. Barkerding, I direct and empower my said trustee upon retaking possession of said stock of Mittag & Volger, Inc. to sell the same at the highest valuation possible, and that it first be offered for sale to Mittag & Volger, Inc. aforesaid.

'(e) Upon the death of my wife Sara E. Barkerding, I give, devise, and bequeath said rest, residue and remainder of my estate to my son Ellis, to his heirs and assigns forever, and to my daughter Helen, her heirs and assigns forever in the proportions of two-thirds to my son and one-third to my daughter.

'(f) To guard against any unnecessary depreciation of my estate, I specially direct that no real estate be disposed of hastily or to interested buyers but that sufficient time be taken to obtain a fair market value, and that no litigation mar the administration of my estate, the provisions with respect to which I believe are clearly indicated herein.'

Acting upon the authorization contained in the will, the Peoples...