Smith v. Fid. Trust Co.

• Decision Date: 09 April 1917
• Citation: 87 N.J.Eq. 247,103 A. 697
• Parties: SMITH v. FIDELITY TRUST CO.
• Court: New Jersey Supreme Court

103 A. 697

87 N.J.Eq. 247

SMITH

v. FIDELITY TRUST CO.

Prerogative Court of New Jersey.

April 9, 1917.

(Syllabus by the Court.)

Appeal from Orphans' Court, Essex County; William P. Martin, Judge.

Proceeding by the Fidelity Trust Company, trustee of Elizabeth Haines, and others, against William E. R. Smith, executor of William Runkle, deceased. From the decree, defendant appeals. Affirmed.

The following is the opinion of Martin, J., in the court below:

William Runkle. late of the county Essex, died on the 31st day of January, 1914, leaving certain paper writings purporting to be his last will and testament and codicil thereto, which were offered for probate before the surrogate of the county of Essex. Caveats were filed against their probate, and a hearing thereon was had by this court. The validity of the paper writings as the last will and testament and codicil was sustained by this court (In re Runkle's Will, 37 N. J. Law, 325), and the decree was entered thereon the 6th day of November, 1914. and was appealed to the Prerogative Court, and there sustained by the Chancellor sitting as Ordinary (sub nom. Smith v. Runkle, 97 Atl. 296), and an order there entered on the 3d day of November, 1915. An appeal was thence taken to the Court of Errors and Appeals, and the decrees below were sustained on July, 12, 1916, except as to the executor. Sub nom. Smith v. Haines, 98 Atl. 317; Smith v. Runkle, 86 N. J. Eq. 257, 98 Atl. 1086; and Smith v. Scholfield, 98 Atl. 1087.

On July 19, 1916, the decree admitting the will to probate by this court was affirmed by the return of the decree of the Court of Errors and Appeals and letters testamentary were duly issued on that day to William E. R. Smith, the executor named in the will. The twenty-fifth paragraph of the will provides substantially: "I give and bequeath to Fidelity Trust Company, * * * its successors and assigns, the sum of thirty thousand dollars ($30,000) in trust, nevertheless, and for the following uses and purposes, to wit, that it shall invest the said sum and keep the same safely invested and pay the income, thence arising to Elizabeth Haines, wife of Lindley Haines, of Germantown, Pennsylvania, during the term of her natural life, and upon her death I direct that the principal of said trust property, together with any and all income accrued thereon and remaining unpaid shall be paid over absolutely and free of trust in equal parts to my nephew, Daniel Runkle, and my niece Mary G. Runkle, both of Plainfield, New Jersey."

The petition in this proceeding was filed on the 18th day of November, 1916, to recover the legacy, and alleges that the debts of the estate have been paid, and that the executor has ample funds to pay all legacies. The executor has answered admitting all of the allegations of the petition, and alleges that he is willing to pay the principal sum of $30,000 mentioned in such legacy, but refuses to pay the interest thereon from one year after the decedent's deatli, and waives the tendering of a refunding bond that this court may pass upon the question as to whether the Fidelity Trust Company is entitled to the interest. The executor further alleges that on the 1st day of November, 1916, he tendered to the Fidelity Trust Company the sum of $30,000. A replication was filed which did not deny the alleged tender.

The estate throughout the long litigation as to the existence and nature of the last will and testament and codicil of the decedent has been in the custody of an administrator pendente lite. The income during that period as shown by the account now on file indicates that a considerable amount has been earned, but, of course, not equal to 6 per cent. on the estate.

Upon receiving the bulk of the estate, the executor commenced liquidation with a view to an early payment of legacies. The will directs payment of trust funds which aggregate $800,000, of which this trust for the benefit of Elizabeth Haines, is one, and the decision in this proceeding will apparently be followed with regard to the disposition of the legacies to establish the other trust funds. The question to be decided is whether this legacy to petitioner establishing a trust bears legal interest, or will be entitled to only a pro rata share of income actually earned, and, if so. from what date. Counsel representing Mrs. Haines have been permitted to file a brief on her behalf.

The petitioner contends that general legacies in their nature carry interest, where no time is fixed for the payment of the legacy by the will, from one year after the testator's death (2 Wms. Ex. 1286; Welsh v. Brown, 43 N. J. Law, 37; Griggs v. Veghte, 47 N. J. Eq. 179, 19 Atl. 867; Marsh v. Taylor, 43 N. J. Eq. 1, 10 Atl. 486; Asliton v. Wilkinson, 53 N. J. Eq. 227, 30 Atl. 895, 35 Atl. 1130; and 40 Cyc. 2094), and that this is so notwithstanding that by reason of litigation the estate did not come into the executor's hands until after the year expired, and that the rule applies to pecuniary legacies where a life income or interest is carved out of the legacy for a specific sum (citing Davison v. Rake, 45 N. J. Eq. 767, 771, 18 Atl. 752; Hoagland v. Schencks' Executors, 16 N. J. Law, 370: Welsh v. Brown, supra; Green v. Green, 30. N. J. Eq. 451, 453; Van Blarcom v. Dager, 31 N. J. Eq. 783, 795).

The executor contends that no interest whatever is payable under the general rule, on a trust fund set aside under the terms of the will, as a trust fund is not a general legacy which carries interest from one year after testator's death, and that, if interest were paid on these funds, it would tend...