Paletz v. Camden Safe Deposit & Trust Co.

• Decision Date: 11 December 1931
• Citation: 157 A. 456
• Parties: PALETZ v. CAMDEN SAFE DEPOSIT & TRUST CO.
• Court: New Jersey Court of Chancery

157 A. 456

PALETZ

v. CAMDEN SAFE DEPOSIT & TRUST CO.

Court of Chancery of New Jersey.

Dec. 11, 1931.

Syllabus by the Court.

A gift of rents and profits of land, in the absence of any expression of a different intention, is tantamount to a devise of the land itself.

At common law, rents were regarded as an incident to the land, and, at the death of an intestate or testator, go with the land to the heir or devisee as its incident, except rents accrued and payable in the lifetime of the deceased; those go to the executor or administrator as a part of the personal property.

Section 81 of our Orphans' Court Act (3 Comp. St. 1910, pp. 3809, 3838), providing that lands of a deceased person shall remain liable for the payment of his debts, and the subsequent sections providing for the enforcement of that provision, are not operative to deny to an heir or devisee the right to receive the rents of the land up to the time of sale under the orphans' court order.

Suit by Olga Paletz against the Camden Safe Deposit & Trust Company. On final hearing.

Order in accordance with opinion.

Francis J. Smith, of Camden (Isidor Ostroff, of Philadelphia, Pa., on the brief), for complainant.

Frank F. Neutze, of Camden, for defendant.

LEAMING, Vice Chancellor.

The primary issue here involved is whether, in the settlement of the estate of a testator in which the personal assets are found insufficient to discharge testator's debts, the executors are entitled to the rents of the real estate owned by testator at the time of his decease. This inquiry must be answered in the negative.

By his will testator bequeathed to his wife the income of his real and personal property for her life or widowhood, and at her death or remarriage the residue of his estate was given to his children. He then appointed defendant trust company his executor. No power of sale was given to the executors, and no provision in the will directs the payment of the debts of testator or creates any charge on the real estate or its income. The executors have collected rents which have accrued since testator's death under leases of his real estate made by testator in his lifetime. Testator's personalty proving inadequate to pay his debts, the orphans' court has regularly made an order for the sale of the real estate to pay debts. Complainant, the widow, seeks an accounting from the executors of the rents collected by the executors prior to and since the order of the orphans' court. The gift to the widow is as follows: "I give, and bequeath unto my wife, Olga Paletz, all the income from my property of any and every kind, as long as she may live, or as long as she shall remain my widow."

This gift to the wife must be regarded as a gift of the land for her life or widowhood. The established rule is that a gift of rents and profits of land* in the absence of any expression of a different intention, is tantamount to a devise of the land itself. Diament v. Lore, 31 N. J. Law, 220, at page 222; Passman v. Guarantee Trust Co., 57 N. J. Eq. 273, at page 276, 41 A. 953. Accordingly, complainant must be here recognized as enjoying an estate for life or widowhood in the lands here in question.

At common law, rents were regarded as an incident to the land, and at the death of an intestate or a testator go with the land to the heir or devisee as its incident, except rents accrued and payable in the lifetime of the deceased; those go to the executor or administrator as a part of the personal property. 3 Bacon's Abridgment (title "Executors & Administrators"), at page 63. That may also be regarded as the settled law of this state, except in so far as it may be found modified by our statutes. Demars v. Koehler, 60 N. J. Law, 314, at page 316, 38 A. 808; Condit v. Neighbor, 13 N. J. Law, 83, at page 91. Even accruing rents, which become payable at a day subsequent to the death of the lessor, must be sued for by the heir or devisee, and not by the administrator or executor of the lessor. Allen v. Van Houton Adm'r, 19 N. J. Law, 47.

The only statute which can in any way be said to confer upon executors or administrators powers or duties touching real estate is our Orphans' Court Act, P. L. 1898, p. 715 (3 Comp. St. 1910, p. 3809 et seq.). Section 81 of that act (3 Comp. St. 1910, p. 3838) provides that: "The lands, tenements, hereditaments and real estate of any person who shall die seized thereof, or entitled to the same, * * * shall be and remain liable for the payment of his or her debts, for one year after his or her decease, and may be sold by virtue of an order of the orphans' court." The supplemental act of 1920 (P. L. 1920, p. 577 [Cum. Supp. Comp. St. p. 2616, § 146—81a]), in no material way changes the section quoted, except to specifically limit the period of time beyond which the liability should not extend. Since the section above quoted and the succeeding sections touching the method of its enforcement clearly provide that, in the event of inadequate personal assets, the real estate may be sold to raise the necessary fund to pay the debts, it is urged that the rentals of the real estate up to the time of sale should be received by the executor and applied in like manner. The act does not so provide, and the provisions of the act throughout specifically relate to the sale of the land, and nowhere suggest an administration of the rentals. The sale is of the real estate, and the proceeds of the sale are to be reported to the court by the executor...