Smith v. Jones

• Decision Date: 19 July 1918
• Parties: SMITH v. JONES et al.
• Court: New Jersey Supreme Court

104 A. 380

SMITH

v. JONES et al.

Prerogative Court of New Jersey.

July 19, 1918.

Appeal from Orphans Court, Warren County.

In the matter of the accounting of Clarence C. Smith, administrator of the estate of Mary P. Jones, deceased. From an order of the orphans' court, sustaining exceptions of J. Corbett Jones and another to the account, the administrator appeals. Exceptants file a cross-appeal. Appeal reversed, and the cross-bill affirmed.

George M. Shipman and Nicholas Harris, both of Belvidere, for appellant. William H. Morrow, of Belvidere, for respondents.

BACKES, Vice Ordinary. This appeal is from an order of the orphans' court surcharging the final account of the administrator with $3,000. Mary P. Jones died in July, 1916, intestate, leaving a son, daughter, and two grandsons, children of a deceased son. After a contest between them for administration, the court appointed a stranger, Clarence C. Smith, who administered, and submitted his account for confirmation. The two grandsons filed an exception, setting up that the administrator had failed to charge himself with $3,000, money of the defendant alleged to have been unlawfully obtained from her by her two surviving children shortly before her death. The exception was sustained, and this appeal was taken.

The proofs show that in December, 1915, the deceased received from the executor of her brother's estate, in part payment of her distributive share, a check, payable to her order, for $3,000, for which she executed a release. Her son, James P. Jones, carried the cheek to her and returned the release. On January 18th he presented the check, hearing the indorsement of his mother, to the cashier of the Belvidere National Bank, and directed him to credit one-half of the amount to his account and the other to that of his sister, Margaret Warne, which was done. The deceased left a note, in her handwriting, found in the box containing her securities, stating that she had given the $3,000 to her son and daughter. The administrator was the executor, who drew the check, and he was also cashier of the bank. The deceased was 86 years of age, and, although physically impaired, was, to use the language of one of her grandsons, "an exceptionally bright woman, of a splendid disposition and of fine intelligence." She lived alone with a maid, and conducted her household affairs well, and her financial transactions wisely, to the day of her death. The day before her death she went automobile riding with one of her grandsons, and was in good spirits. She had a "bad spell" in December, and her daughter, Mrs. Warne, came on from the West to attend her. In May following she had another. The illness affected her mind and memory for the time being, but when the spells had passed she became normal.

The two grandsons evidently had some intimation of the payment of the $3,000, shortly after it was made, and they wrote to the executor, who confirmed their suspicion. They communicated with their Uncle James asking what had become of the money, and, his reply being unsatisfactory, one of them asked his grandmother point-blank whether she had given any of it to his uncle and aunt, to which she answered evasively that she thought she had given them some money, but she was not quite sure, and added, "I want you boys to have your share of that, too." In this conversation she called his attention to the fact that she held a note or two of his father, amounting to about $1,000, and suggested that "maybe it would be just as will to let it apply upon that," and that she would straighten it out the next time he came up. After the funeral, the grandsons persisted in their efforts to discover the $3,000, but without success; their uncle and aunt refusing to inform them, stating that they had made a solemn promise not to tell. After the litigation over the right to administer, the administrator tried to restore peace and avert further litigation, and at the instance of Mr. Jones and Mrs. Warne offered to pay them $1,000 in the closing of the estate, as their share of the $3,000; but they refused to be reconciled. They requested the administrator to commence suit, which he failed to do, and, upon his failure to charge himself with the amount, they took exception.

There is no ulterior significance attached to the circumstances that the administrator drew the check as executor of another estate, and as cashier of the bank divided the proceeds. They were mere coincidents. Nor does it appear other than that, throughout the affairs, the administrator acted impartially and in good faith. He was selected by the court as administrator for his known probity. The orphans' court tried the exception upon the theory that the sole issue was whether there was a gift to the son and daughter, and that they were the real parties to the action. It rejected their testimony of the transaction with their mother, tending to show a gift, as incompetent under the statute, and ruled that, by reason of the enfeebled condition of the deceased and the confidential relation existing between her and her children, a presumption against the validity of the gift arose, which had not been overcome by proof that the gift was knowingly made and without undue influence on the part of the donees, following Haydock v. Haydock, 34 N. J. Eq. 570, 38 Am. Rep. 385.

The court erred in adjudging the administrator liable, based upon its finding that there had been no gift, and also in excluding the testimony offered to show that a valid gift had been made. Whether the $3,000 were assets of the estate, undisposed of, was a proper matter for investigation; but the conclusion reached by the court, upon the evidence before it, that the gift was invalid, and that the amount was collectible by the administrator, establishes but one factor towards his accountability. Before he could be condemned in damages, it was necessary to further find upon the proofs that it. had been lost to the estate through his neglect. The law exacts of an administrator or trustee in the performance of his duty only the utmost good faith, ordinary care and prudence, and reasonable diligence. When these are fairly exercised, he is not responsible, even though loss ensues. The good faith of the...