Oswald v. Seidler.

• Decision Date: 20 May 1946
• Docket Number: Nos. 224, 225.,s. 224, 225.
• Citation: 47 A.2d 437
• Parties: OSWALD v. SEIDLER.
• Court: New Jersey Supreme Court

47 A.2d 437

OSWALD

v.SEIDLER.

Nos. 224, 225.

Court of Errors and Appeals of New Jersey.

May 20, 1946.

Appeal from Court of Chancery.

Suit by Louise G. Oswald, by Charles C. Trelease, her next friend, against F. Arnault Seidler to set aside an inter vivos trust. A decree was advised in favor of defendant by the Court of Chancery, 135 N.J.Eq. 490, 39 A.2d 396, and the complainant appealed to the Court of Errors and Appeals. The Court of Errors and Appeals, 136 N.J.Eq. 443, 42 A.2d 216, reversed the decree and remanded the cause to the Court of Chancery with directions. From a final decree of the Court of Chancery denying complainant the remedies and restitution and accounting by F. Arnault Seidler, and from an order discharging an order to show cause which, in effect, constituted a denial of plaintiff's petition for a turnover and accounting by Meyer E. Ruback, who, during the pendency of the suit, came into possession of the subject matter of the litigation by virtue of his appointment in another suit as trustee of complainant's assets and property covered by the trust indenture, complainant appeals.

Decree and order reversed, and cause remanded for further proceedings in conformity with opinion.

PARKER and BODINE, Justices, and WELLS, Judge, dissenting.

Charles C. Trelease, of Newark, for appellant.

Bilder, Bilder & Kaufman, of Newark (Samuel Kaufman and Bernard Hellring, both of Newark, of counsel), for respondent F. Arnault Seidler.

Ruback & Alback, of Newark (John E. Toolan, of Perth Amboy, of counsel), for respondent Meyer E. Ruback, trustee.

HEHER, Justice.

Complainant appeals from a final decree in chancery entered on the reversal of a prior decree dismissing her bill of complaint (135 N.J.Eq. 490, 39 A.2d 396; 136 N.J.Eq. 443, 42 A.2d 216), in so far as it denies to her the remedies of restitution and accounting by the respondent Seidler, and also from an order discharging an order to show cause which, in effect, constituted a denial of complainant's petition for a turnover and accounting by the respondent Ruback, who, during the pendency of this suit, came into possession of the subject matter of the litigation by virtue of his appointment by the Chancellor as trustee of complainant's ‘assets and property covered by the trust indenture’ executed by her.

The indenture was sustained in chancery. The learned Vice Chancellor determined that the donor was mentally competent at the time of the execution and delivery of the deed. 135 N.J.Eq. 490, 39 A.2d 396. This court concluded that the evidence demonstrated mental incompetence at that time, and also that the deed was made without the benefit of adequate independent advice. 136 N.J.Eq. 443, 42 A.2d 216. The remittitur reversed the decree and directed chancery to ‘enter a decree declaring invalid and setting aside the deed of trust * * *, with such further relief as may be appropriate’; and the record was remanded for further proceedings thereon, according to law and the practice of that court.

While the instant suit was pending in chancery (the bill was filed on August 24, 1942), the respondent Seidler (on December 7, 1942) interposed an independent bill of complaint alleging the execution of the indenture of trust, a copy of which was annexed thereto, and his desire to renounce the trusteeship and to ‘submit the trust to’ chancery, and praying that chancery ‘may take over the administration of the trust and appoint a trustee to administer it under’ its supervision, and that his account as trustee, submitted therewith, be approved and confirmed. Immediately upon the filing of the bill, the Vice Chancellor appointed Ruback ‘as trustee of the assets and property of Louise G. Oswald covered by the trust indenture made and executed on August 15, 1941’; and he also appointed Milton Schoenholtz as her guardian ad litem in that proceeding. The order directed that Mrs. Oswald, by her guardian ad litem thereby appointed, and Charles C. Trelease, her next friend theretofore designated, show cause why the appointment of Ruback as trustee should not be ratified and confirmed. The account thus submitted was referred to a master for audit. Complainant was then confined in a hospital for mental diseases. Neither she nor her next friend entered an appearance in this proceeding. The guardian ad litem did so, but he interposed no objection to the confirmation of Ruback's appointment as trustee. After the service of the rule to show cause, Trelease moved that he be discharged as a party defendant, and the motion was granted. Thereupon complainant, by her next friend, presented a petition in the instant suit praying that all proceedings in the second suit be stayed until the final determination of this suit, and that a receiver be appointed to conserve complainant's property meanwhile. The application was resisted by Seidler, and was denied. Ruback's appointment as trustee was confirmed by an order entered on December 15, 1942. It was therein provided that ‘the administration of the trust described in the bill of complaint be * * * taken over under the supervision of the court.’ And Seidler was thereby directed to transfer and convey to Ruback title to all the assets and property comprising the subject matter of the trust deed. The instant suit will be referred to as Suit No. 1; and the suit in which Ruback was appointed trustee as Suit No. 2.

The Vice Chancellor seems to have entertained the view that a decree vacating the indenture of trust would constitute full compliance with the mandate of this court, and that he would not be justified in directing a turn-over of the property to complainant until there was proof of her mental competence. He found ‘nothing in the remittitur which deals with a transfer of assets from the defendant to complainant,’ and ‘nothing * * * which provides for an accounting by the defendant to the complainant.’ Moreover, he was of the opinion that no such order could be directed to Seidler, for he had already turned over the assets in their entirety to Ruback, his successor as trustee, and his final account had been approved in Suit No. 2. In a word, the Vice Chancellor concluded that, if the remittitur be read as directing the ‘transfer of assets by the defendant or accounting by the defendant,’ it would require a ‘repetition of acts which had already been done and would have ignored entirely the fact that the court had already taken over the administration and supervision of the assets' of complainant.

We do not concur in the Vice Chancellor's interpretation of the remittitur. The nullification of the indenture of trust calls for all the relief to which complainant would have been entitled had chancery so decreed in the first instance, and the principal part of this relief is the reconveyance of all the subject property to complainant, with a full accounting.

It does not matter that there was no evidence before the Vice Chancellor that complainant had ‘regained her mental competency’; and the Vice Chancellor fell into error in holding that, until evidence is laid before him demonstrating that complainant ‘is competent to receive, hold and manage these assets, they should not be turned over to her,’ and that the trusteeship should continue meanwhile. There is no intimation from either counsel that complainant's mental competency is now seriously in doubt. Indeed, the presently acting trustee suggests the Vice Chancellor's ‘hesitancy’ in this regard ‘may be due to an over-abundance of caution.’ It is said that her mental aberration, of a degree necessitating her confinement for a considerable period of time, was due to the death of her husband under unusually distressing circumstances, and that she has now been restored to sanity. On October 8, 1943, she was discharged by the hospital ‘as recovered.’ But however all this may be, the Court of Chancery is under a peremptory duty to execute the remittitur of this court precisely as it is written, and that calls for a restoration of the subject matter of the litigation to complainant. This is the obligation of the lower court even though the remittitur be erroneous on its face. The remedy for such rests exclusively in the appellate tribunal. Wemple v. B. F. Goodrich Co., 127 N.J.Eq. 333, 12 A.2d 716; Kurth v. Maier, 134 N.J.Eq. 511, 36 A.2d 202. If complainant is still mentally incompetent, appropriate measures will be required to safeguard her property, but doubt on this score is not a reason for denying restitution and retaining the assets in the hands of the trustee, whose function was limited to the execution of the trust which who purported to be created by the deed adjudged to be invalid for want of mental capacity in the donor. The title to the property should be revested in complainant, and if she is incompetent, there is an available remedy.

Such was the nature of the equitable power exercised in Suit No. 2. The bill therein was predicated upon the validity of the indenture of trust. It was filed by Seidler ‘as trustee’ for complainant. Complainant asserts that Ruback was a mere successor to Seidler in the execution of the trust created by the indenture, while Seidler and Ruback maintain that the appointment was made in the exercise of general equitable jurisdiction to protect the assets of an incompetent. This suit did not proceed to final hearing, and the basis for the action now asserted by respondents to have been taken was not established by a decree. The proceeding was of a summary nature. We are...