In re Slater's Estate

• Decision Date: 26 October 1917
• Citation: 102 A. 384,88 N.J.Eq. 296
• Parties: In re SLATER'S ESTATE.
• Court: New Jersey Supreme Court

102 A. 384

88 N.J.Eq. 296

In re SLATER'S ESTATE.

Prerogative Court of New Jersey.

Oct. 26, 1917.

Appeal from Orphans' Court, Atlantic County.

Proceedings in the matter of the estate of Sarah E. Slater, deceased. From a decree of the orphans' court as to his accounts, the executor appeals. Decree modified.

Garrison & Voorhees and U. G. Styron, all of Atlantic City, for appellant.

Albert S. Woodruff and Byron M. Seabrook, both of Camden, for respondents.

LEAMING, Vice Ordinary. This is an appeal by an executor from a decree of the orphans' court of Atlantic county touching two certain accounts filed by him as executor of the estate of Sarah E. Slater, deceased. The first account is what is known as an intermediate account, as distinguished from a final account, and was filed by the executor November 6, 1915, and duly noticed for settlement before the court on December 29, 1915; on the latter date, no exceptions having been filed, the account was allowed by the court as reported and the court's decree to that effect signed and entered. The second account was a final account, and was filed July 29, 1916, and duly reported for settlement before the court on August 30, 1916. On the last-named date consideration of the final account was continued to September 27, 1916, by order of the court, and on that date exceptions were filed by residuary legatees. These exceptions included objections to both the intermediate and final accounts. At the hearing the court entertained the exceptions which were directed to the intermediate ac- count as well as those directed to the final account, and the decree of the court, based upon the testimony then heard, from which decree this appeal is taken, adjudges that in certain matters the executor has been allowed credits in the intermediate account to which he is not entitled and that in certain other matters he should be charged with obligations with which he is not charged in the intermediate account, and also makes adjudications of like nature touching the final account, and decrees that the intermediate account be vacated, set aside, and for nothing holden as to the matters referred to, and directs that the intermediate and final accounts be restated in conformity with the specific adjudications touching the several matters of charges and credits. The decree further directs that in certain particulars the restated accounts be made more specific, and also directs that the costs on the exceptions be paid by the executor personally, including a specified counsel fee allowed to exceptants.

It is first contended by appellant that the prior decree of the orphans' court allowing the intermediate account is conclusive to the same extent as a decree allowing a final account and, in consequence, the orphans' court was without power to open such intermediate account at a hearing which had been designated pursuant to the statute for the sole purpose of inquiring into the accuracy of the final account. No objections are made by appellant to the orphans' court having entertained the exceptions which were filed to the final account; the contention is that at the statutory hearing for the allowance of the final account the orphans' court could not entertain exceptions then filed to the intermediate account which had been theretofore allowed by decree of that court.

Prior to the amendments of the Orphans' Court Act which were made by the act of 1905 (P. L. 1905, p. 299), the proceedings of that court touching intermediate accounts of an executor, were defined by section 124 of the Orphans' Court Act of 1898 (P. L. 1898, p. 760). No decree allowing the account as stated was authorized; the statute merely directing that the account, in circumstances stated by the statute, should be entered of record and be given prima facie force as against exceptions subsequently filed, unless notice should be given at the time the accounts were passed that they would be excepted to and a memorandum of such notice entered. That section was amended by the 1905 act by excluding from its operation all intermediate accounts except those of guardians. Section 125 of the act of 1898 related to the final accounts of executors, administrators, guardians, and trustees and provided for a decree for their allowance as stated. The 1905 amendment to that section made no change in it except to eliminate the word "flnal" as to the accounts of executors, administrators, and trustees, and retain that word as to the accounts of guardians. This amended section clearly authorized and contemplated a decree of the orphans' court allowing an intermediate account of an executor as stated, in the absence of exceptions filed thereto. Section 126 of the act of 1898 related to the hearing and allowance of "final accounts" of executors, administrators, guardians, and trustees when exceptions were filed to such accounts; the amendment to that section by the act of 1905 merely omitted the word "final" before the word "accounts."

It seems impossible to escape the conclusion that these amendments of the 1905 act were operative to place intermediate accounts of executors upon precisely the same plane as final accounts and contemplated a like decree touching their allowance in lieu of a mere authorization that they be entered of record. This effect of the amendments embodied in the act of 1905 is clearly stated by Judge Ten Eyck in Re Porter Estate, 34 N. J. Law J. 314, and is stated in like manner in 1 Kocher's N. J. Probate Law, 650 et seq.

Section 127 of the act of 1898 relates to the conclusiveness of decrees of the orphans' court on the final settlement and allowance of accounts of executors, administrators, guardians, and trustees. This section is as old as the court. Pat. L. p. 59, § 17. With intermediate accounts of executors given the same status as final accounts touching their examination by the court, and controversies as to their correctness and the decree to be entered by the court touching their allowance, it seems to necessarily follow that the provisions of section 127 must be understood to be applicable to such intermediate accounts after they shall have been allowed by decree of the court. This view is adopted by Kocher, at page 652. By section 127 the decree of allowance is declared conclusive upon all parties and operative to exonerate and forever discharge an executor from all demands of creditors, legatees, or others beyond the amount of such settlement, except for assets or moneys which may come to hand after settlement, and "excepting also in cases where a party applying for a resettlement shall prove some fraud or mistake therein, to the satisfaction of the said orphans' court." That section appears to do little if any more than declare the effect of the decree to be substantially the same as it would be without such declaration. A general statement of the rule is that the judgment of a court of competent jurisdiction is conclusive upon all persons over whom it has acquired jurisdiction. But that conclusiveness does not prevent such judgment or decree being opened in proper circumstances, and the section of the orphans' court act last referred to clearly contemplates that this may be done as to a decree of the nature here in question by an application to the orphans' court for that purpose based upon fraud or mistake to the end that a re-settlement may be had. The procedure which appears to have been almost, if not quite, uniformly adopted for that purpose is a petition to the orphans' court to open the decree for fraud or mistake therein, and on the presentation of that petition a rule to show cause is issued requiring the executor to show cause why the decree should not be opened and the account resettled. See section 179 of Orphans' Court Act. By rule 22 of the orphans' court, promulgated by the Ordinary pursuant to section 194 of the Orphans' Court Act, in proceedings for the resettlements of accounts at least five days' notice of the intended application shall be given to the executor. An examination of the numerous cases appearing in our reports in which a resettlement of accounts of executors has been sought will disclose that this procedure by petition and rule to show cause has been practically uniform from an early date. The following cases may be advantageously consulted both as to procedure and the inherent nature of the proceedings. Runkle v. Gale, 7 N. J. Eq. 101; Culver v. Brown, 16 N. J. Eq. 538; Stevenson's Adm. v. Phillips, Ex'r, 21 N. J. Law, 70; Johnson v. Eicke, 12 N. J. Law, 316, 320; Hyer, Adm'r, v. Morehouse, 20 N. J. Law, 125; Morris' Case, 65 N. J. Eq. 699, 56 Atl. 161. In Kocher's N. J. Probate Law, 657 et seq., that practice is adopted. It is operative to bring the executor before the court to answer the charges of fraud or mistake which are made the basis of the application to open the decree.

As has been stated herein no such proceeding was taken in the case now under consideration. The final account of appellant executor was noticed for settlement pursuant to the statute. On the day noted, or at an adjourned day, residuary legatees filed exceptions to the final account, and included therein exceptions to the intermediate account which had been theretofore allowed. On those exceptions the orphans' court proceeded to a hearing touching the intermediate account and entered a decree directing that that account "be vacated, set aside, and for nothing holden" as to certain items and ordered the account restated so as to include those items in a manner to surcharge the executor. It thus appears that with the executor in court solely for the purpose of proving his final account pursuant to the requirements of the statute and without having been brought in to answer an application to open the decree allowing his intermediate account, or an application for the restatement of his intermediate account, the consideration of that account was taken up by the court on exceptions then filed...