Robinson v. Hodge, A--82

• Decision Date: 08 May 1950
• Docket Number: No. A--82,A--82
• Citation: 4 N.J. 397,73 A.2d 158
• Parties: ROBINSON v. HODGE.
• Court: New Jersey Supreme Court

Page 397

4 N.J. 397

73 A.2d 158

ROBINSON v. HODGE.

No. A--82.

Supreme Court of New Jersey.

Argued Feb. 6, 1950.

Decided May 8, 1950.

Robert S. Hartgrove, Jersey City, argued the cause for the appellant.

Edward J. Madden, Jersey City, argued the cause for the respondent (Louis E. Saunders, Jersey City, attorney).

The opinion of the court was delivered by

OLIPHANT, J.

This was an appeal to the Superior Court, Appellate Division, but was certified here on our own motion.

It is an appeal from an order of the Hudson County Court entered December 6, 1949, vacating a writ of execution and setting aside a levy made upon funds of the Estate of Agnes Grace Williams, deceased, on deposit in the Franklin National Bank of Jersey City, and quashing a rule to show cause directed to the said bank 'why the moneys levied under the said writ of execution should not be turned over to the plaintiff.'

The record before us is meager and we have examined previous litigation in this same estate but that record throws no light on one or two important questions here involved. Robinson v. Hodge, 139 N.J.Eq. 189, 50 A.2d 632 (Ch.1947), affirmed 140 N.J.Eq. 473, 55 A.2d 43 (E. & A.1947).

The respondent was appointed Administrator C.T.A. of this estate on March 3, 1943. A rule limiting creditors was taken August 16, 1943. As far as appears no decree barring creditors was ever taken and no final settlement of the estate or distribution has been made although seven years have now elapsed.

An intermediate account, likewise meager in form, was filed September 21, 1944, which was not finally approved until January 18, 1946. Ten days later a judgment in favor of the appellant was entered in the Hudson County Pleas in the sum of $1,953, together with costs of $87.28, which recovery was for services rendered the testatrix during her last illness. We have to assume that this claim was presented to the administrator and disputed and that suit was brought pursuant to R.S. 3:25--8, N.J.S.A., on which judgment was entered January 28, 1946. The intermediate account filed clearly indicates the estate was solvent. It sets forth realty valued at $15,600, personal assets of $3,027.18, estate debts amounting to $277.57 were allowed, at which time the administrator was awarded commissions of $312.14 on corpus and income and also attorney's fee of $500. From the date of the appellant's judgment down to date the respondent has resisted every effort to collect this judgment and in the meanwhile has taken few steps to administer and close out this estate.

On August 6, 1946, appellant caused a writ of execution to be issued on her judgment and a rule issued on the defendant to show cause why the judgment should not be paid. This was never decided. On September 19, 1946, the administrator presented a petition to the Orphan's Court and obtained a rule to show cause, returnable on November 22, 1946, seeking to sell the five parcels of real estate, devised by the decedent, for the payment of debts. This petition showed a deficiency of $4,627.63, $4,400 of which was to cover administration expenses, commissions and counsel fee, and included the plaintiff's judgment. On September 20, 1946, the administrator obtained a rule to show cause directed to the plaintiff, with ad interim restraint, why she should not be enjoined from further proceedings on the judgment. This application was never decided.

On November 18, 1946, the appellant filed a bill in Chancery asking that the court impress a lien upon the real property belonging to the estate but this bill was dismissed on the ground that equity's jurisdiction of executor's accounts is withheld unless it appears that the jurisdiction of the Orphan's Court is inadequate or there is some special reason calling for equity's intervention and that a judgment creditor must establish that he has used all available remedies at law against the debtor and that efforts to collect the judgment are fruitless before a court of equity will intervene. This dismissal was affirmed on appeal September 25, 1947.

In this case the respondent took a position with respect to the levy on moneys in the bank accounts directly opposite to the one now asserted and insisted that appellant should pursue her rights under the pending execution and levy. Robinson v. Hodge, supra.

On December 5, 1947, the said administrator obtained an order in the Orphan's Court permitting him to sell four parcels of land devised by the decedent to pay her debts. Since that time apparently no sale of these lands has occurred.

The levy which the order under appeal set aside on December 6, 1949, was the same levy made on August 6, 1949. The Orphan's Court Judge in setting the levy aside held that if the appellant was permitted to levy under her execution she would gain substantial and unfair preference over other creditors whose claims are valid. He held that a judgment at law after a claim has been disputed by an executor does no more than establish the claim as a valid one and that execution and levy upon such judgment is invalid. He cited South Camden Trust Co. of Camden v. Black, 110 N.J.Eq. 97, 159 A. 155 (Ch.1932) and Donahue v. Casabianca, 112 N.J.L. 158, 170 A. 45 (E. & A.1934). See also Kenny v. Trowbridge, 124 N.J.Eq. 504, 2 A.2d 655 (Ch.1938). In all of these cases an attempt was being made to secure a lien against real estate. It was held therein that our statute confers upon creditors a lien on real estate of the deceased debtor, R.S. 3:25--21, N.J.S.A., and that such lien is established if a claim has been presented to the executor or administrator and admitted to be a valid claim, or the claim has been established by a judgment at law.

Insofar as the lien on real estate is concerned claims established in these two different ways are on the same footing, but there can be no execution against real estate. This is expressly prohibited by R.S. 2:26--97.1, N.J.S.A., which provides 'but no real estate of any testator or intestate shall be sold or in anywise affected by any judgment or execution against executors or administrators.'

These cases and statutes are not controlling with respect to the goods and chattels in the hands of the administrator which is personal property. These goods and chattels and personal property are the primary fund out of which the administrator is to pay the debts of the decedent. Funeral expenses, physicians and nurses bills, administration expenses, debts due the United States and judgments entered of record in the decedent's life, are preferred claims against the personal property and are to be paid first. The balance or surplus is available for payment of general creditors.

The judgment in this case, if it is in proper form, is not a general judgment against the administrator c.t.a. but is a special judgment against the goods and chattels in his hands for the purpose of administration. Murphy's Adm'rs v. Davis, 3 N.J.L. 843 (Sup.Ct. 1811); Sindle v. Kiersted, 3 N.J.L. 926 (Sup.Ct. 1812); Woodruff's Ex'rs v. Woodruff, 4 N.J.L. 375 (Sup.Ct.1817); Montgomery's Ex'rs v. Reynolds, 14 N.J.L. 283 (Sup.Ct.1834); 2 Tidds Practice 1030, 1164. And an execution if issued must issue only against the goods and chattels in his hands for the purpose of administration. R.S. 3:13--3, N.J.S.A., provides for the manner by which executors or administrators are made parties defendants to an action and then provides: 'If, in such an action, judgment go for plaintiff He shall have judgment and execution against all the executors or administrators named in the process, To be made of the personal property of the decedent.'

No case or statute has been cited prohibiting a levy under the circumstances here presented where there has been no decree barring creditors and no final settlement or distribution.

We have carefully examined the statutes and note that R.S.3:13--5, N.J.S.A., states that no execution shall issue within six months after the probate or letters of administration have been granted. Nothing is said as to whether execution can issue after that period. R.S.3:25--61, N.J.S.A., provides that where an estate is insolvent the plaintiff may proceed to final judgment therein 'but no execution shall in any case issue after the making of said application' to have the estate declared insolvent. Where a rule limiting creditors has been taken by a personal representative and upon subsequent application such an estate has been declared insolvent a judgment against the representative between the time of taking such rule and making such application will not be...