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Matter of Estate of John Url

Decided: February 14, 1950.

IN THE MATTER OF THE ESTATE OF JOHN URL, DECEASED


Smith, Arthur B., J.c.c.

Smith

On December 24, 1948, the first and final account of Alfred C. B. McNevin, executor under the last will and testament of John Url, deceased, was brought on for settlement and allowance before this Court. The matter was continued to January 14, 1949, at the request and with the consent of the attorney for the executor and the attorney for the Acting Consul General of the Hungarian Republic in New York City, who was acting pursuant to a power of attorney executed and filed on behalf of Arva Haz of Szekesfehervar, Szekesfehervar, Hungary, designated as the residuary legatee under the will of the decedent. On the latter date, it appeared that there was no dispute with respect to the accuracy of the executor's account and no exceptions thereto were filed. The only matter then appearing to be in dispute was the question of the counsel fee to be allowed to the attorney for the executor and the amount of commissions to be allowed to the executor. The Court indicated that the account would be allowed as filed; that the executor would be allowed commissions at the rate of five per cent, but reserved decision on the question of counsel fees to be allowed to the attorney for the executor until a memorandum with respect thereto should be filed with the Court. Subsequently, on January 28, 1949, there was presented to the Court a form of judgment allowing the executor's account, the executor's commissions and allowing to the attorney for the executor a counsel fee of $7,000. The making and entry of the judgment and the allowance of the executor's commissions and counsel fees to the executor's attorney were consented to by the attorney appearing for the residuary legatee and the judgment was thereupon signed and entered.

The judgment allowing the account, among other things, "Ordered that the residue of said estate, after the payment of the commissions and fees above set forth, is to be held by said executor and to be distributed by him in accordance with the last will and testament of the decedent, John Url." The executor thereafter apparently chose to wait until the expiration of the time for appeal from the judgment of this Court before attempting to make distribution of the residue of the estate in accordance with the provisions of the testator's [7 NJSuper Page 458] will and, while so waiting, became concerned as to whether or not, under existing conditions, he would be justified, and be properly discharging his duty, by paying over the residue of the estate remaining in his hands to the Acting Consul General of the Hungarian Republic at New York City by virtue of the power of attorney above mentioned. On April 5, 1949, the attorney for the Hungarian Acting Consul General at New York acknowledged service of a notice from the attorney for the executor to the effect that the executor would, on April 22, 1949, make application to this Court for a judgment upon the executor's request for directions as to the distribution of the estate. This notice and the executor's complaint were both filed with the Surrogate on April 6, 1949. In his complaint the executor, among other things, alleged that there remained in his hands for final distribution the sum of $52,297.47, all in cash deposited to his credit in the Empire Trust Company, New York City, N.Y. He further alleged "that there is grave doubt in his mind as to the existence of said Arva Haz of Szekesfehervar, the beneficiary entitled to the residue of the estate of said John Url, deceased, and * * * that there is a question as to the propriety of paying the said residuary estate in view of existing political and economical conditions in Hungary." He respectfully demanded that a judgment be entered "determining the existence of said Arva Haz of Szekesfehervar, beneficiary under the last will and testament of said John Url, deceased, and that said Judgment further direct the plaintiff as to whether or not payment of the net estate should at this time be made to said beneficiary, its agent, attorney or representatives." On behalf of the Hungarian Acting Consul General at New York, there was filed an answer to the executor's complaint denying that there were "any grounds in law or otherwise which should give to the Executor any doubts as to the existence of said Arva Haz of Szekesfehervar * * * because the said Executor has been shown an official certificate under the signature and seal of the Mayor of Szekesfehervar and under the signature and seal of the Bishop of Szekesfehervar, both charged with the duty of the conduct and management of said orphanage, certifying [7 NJSuper Page 459] that the said orphanage exists and functions unchanged and that nothing will hinder the appropriate use of the funds left for the benefit of the said orphanage." The answer further alleged that "the said Bishop and the said Mayor have declared under oath that the funds so received by them will be used exclusively for the maintenance and education of the orphans of said orphanage and that the said bequest will remain the property of the orphanage and will not be confiscated by the State." Hearing and consideration of the executor's application for instructions was continued from the date for which notice was originally given to May 6, 1949. On this date there appeared in Court not only the executor and his attorney and the attorney for the Hungarian Acting Consul General at New York, but also Francis F. Welsh, Esquire, of the firm of Brunetto & Welsh, members of the Bar of this State, who at that time claimed to be appearing for certain next of kin of the testator, whose names he did not then wish to divulge for fear of possible retaliation against them for daring to urge a claim in opposition to that contended for on behalf of the present Hungarian governmental officials. It will be recalled that this was shortly after the much publicized arrest and alleged trial of Cardinal Mindszenty and other religious leaders, and the efforts to subordinate the will and teachings of the religious leaders to the will of those then in positions of governmental authority, in territory occupied or under the domination of the forces of the Union of Soviet Socialist Republics. By virtue of what had become matters of public knowledge through information released to the press through the State Department of our own Government, this Court was at that time unwilling to assume, without adequate proof independently obtained, that the orphanage which was the object of the testator's bounty as expressed in the residuary clause of his will was in fact still in existence, or, if it was, that the monies which it was entitled to receive from the executor of the above named estate would, if paid over by the executor to the Hungarian Acting Consul General at New York, reach the orphanage without confiscation or substantial diminution, or that it would be permitted to be used by the orphanage for its customary

purposes as when it was known by the testator and as the testator undoubtedly assumed when making his will. It might be well to here quote the residuary clause of the will:

"FOURTEENTH: All the rest residue and remainder of my estate, both real, personal and mixed, wheresoever situate, including all lapsed legacies, I hereby give devise and bequeath for the benefit of ARVA HAZ OF SZEKESFEHERVAR in the CITY OF SZEKESFEHERVAR, HUNGARY, under the joint control of the city administration and the Roman Catholic Bishop of SZEKESFEHERVAR, no portion of either principal or interest to be used for any other than the designated purpose. This bequest is made in remembrance of the good deeds done in the past for the orphan boys and girls by the CITY OF SZEKESFEHERVAR."

After hearing the arguments of counsel, this Court announced that the matter would be taken under advisement and that an effort would be made by the Court to obtain the cooperation and assistance of the Department of State of our Federal Government in an effort to ascertain whether the orphanage continued to exist at this time and, if so, whether the funds, if paid over by the executor to the Hungarian Acting Consul General at New York, would not be confiscated; would reach the orphanage without substantial diminution, and be permitted to be used by the orphanage for the accomplishment of the purposes apparently intended by the testator. The matter was, therefore, continued without specific date. The assistance of the Department of State of the United States was promptly sought by the Court and, at the Court's request, the matter was referred to the American Legation at Budapest, Hungary, with the request that discreet inquiries be made concerning the existence of the orphanage. Under date of June 7, 1949, the Department of State forwarded to this Court a report of the investigation made through the American Legation at Budapest to ascertain the present status of the orphanage. This report was based upon interviews at Szekesfehervar and a visit at the orphanage by a member of the Legation staff. The report stated among other things:

The institution (orphanage) has been nationalized for the past four months and a woman by the name of Mrs. Stephen

Gyimoti was appointed head of the orphanage. The institution was previously managed by twelve Catholic nuns who, according to Mrs. Gyimoti, were "misusing funds" and were forced to resign, under the nationalization law. Mrs. Gyimoti stated that "horrible social conditions" in Hungary in the past made her become an ardent Communist. She claimed that she and her two assistants could work better than the twelve nuns in the past and stated that funds for the orphanage are obtained from the town; that she gets the funds from the Mayor's office, keeps an account in a book, and after the end of each month, reports on expenditures at the offices of the City Hall. Mrs. Gyimoti claimed the nuns resigned voluntarily. There were the same number of children at the orphanage as before nationalization took place. Qualifications for admission are the same as before. Orphans get religious instructions only at the schools 2-3 times weekly from priests and nuns, various religions being represented. The present director claimed the orphans were completely neglected under the nuns, stating they "ate-up" the food from the orphans and this was one of the reasons why they were forced to resign; that they occupied the entire first floor of the building, jamming the orphans in the basement rooms; that "thanks to the nationalization" another bathroom had been added, and that some relief goods the institution received were completely useless and she intended to donate them to other institutions where they could be of better use. When asked who would get the fund and how it would be used, in case the transfer from the United States came through, the director answered that the funds would be appropriated to her and that she would keep an account of every expense and report on it to the City Hall of Szekesfehervar. The report further indicated that the original site of the orphanage was destroyed during the war and that at present it was operating in a building which was formerly a public school. Before nationalization took place the orphanage was a society under the Church directed by a chief nun who had eleven nuns under her. The report concluded as follows:

"On account of the changes which have occurred in the physical buildings and equipment of the orphanage, and especially on account

of the transfer of the direction and administration of the institution from the Catholic religious order to the Communist local authorities, it is thought probable that the testator's intended purposes would not be accomplished by the delivery of the funds at the present time to the Hungarian Consul General in New York and the Hungarian Government. Furthermore, the present dollar exchange rate arbitrarily fixed by the Hungarian Government (which is from one-fourth to one-sixth of the real purchasing value of the dollar) and existing Hungarian foreign exchange regulations, would cause from three-fourths to five-sixths of the total amount of these funds to be diverted from the orphanage to other uses of the Hungarian Government, if that Government presently receives these funds.

"With regard to the charges said to have been made against the nuns, leading to their forced or 'voluntary' removal from the orphanage, it may be said that this action on the part of the Hungarian local authorities would appear to have been of the same general nature as other cases which have been the subject of recent condemnatory statements by the Secretary of State and others speaking for this government."

Enclosed with the report and as a part thereof were copies of Department of State Press Releases No. 77 dated February 9, 1949, and No. 212 dated April 1, 1949, together with United States United Nations Delegation Press Release No. 602 dated April 18, 1949.

The contents of the above mentioned report from the Department of State were withheld by the Court until after the receipt of a communication from the Department dated June 12, 1949, advising that the Department had no objection to filing the report and making copies thereof available to the parties concerned. Promptly thereafter copies of the report were made and, under date of June 23, 1949, forwarded to each of the attorneys concerned, and the original was then filed with the Surrogate.

On July 29, 1949, the various parties, by their attorneys, again appeared before the Court to further argue the matter in the light of the report received from the Department of State. It was then contended by the attorney for the Hungarian Acting Consul General at New York, among other things, that the attorney appearing for the alleged next of kin of the decedent had no right to appear or be heard in the matter because the next of kin had no interest in the fund under consideration and, further, because the parties [7 NJSuper Page 463] for whom he claimed the right to appear and act had previously given a power of attorney to the Hungarian Acting Consul General of New York authorizing him to represent them "with full powers in the estate matter of John Url," which power of attorney was on file with the Surrogate. He, therefore, claimed the right to represent these parties through his representation of the Hungarian Acting Consul General notwithstanding the fact that it now appeared that the interests of these alleged next of kin might be in substantial conflict with the interests of the orphanage, for which he also claimed to act. Subsequently, Mr. Welsh, on behalf of the alleged next of kin, filed an answer and counterclaim alleging that the orphanage mentioned in the residuary clause of the will had ceased to exist; that, therefore, the legacy had lapsed, and that the next of kin were now entitled to the residue of the estate. He also gave notice, returnable on September 9, 1949, of an application for an order admitting the alleged next of kin as parties defendant. This matter was adjourned to September 16, 1949, at which time all of the parties were again before the Court and argued this and related matters. Counsel for the Hungarian Acting Consul General again strenuously opposed admitting the next of kin as parties to these proceedings, as well as Mr. Welsh's right to represent them. Thereafter, in support of his motion, Mr. Welsh submitted an affidavit, in which, among other things, he asserted that the firm of Brunetto & Welsh were "attorneys for the defendants, Julia Url Tordai, Sandor Url, Maria Url and Gyorgy Url," and indicated in a general way what his firm had done in behalf of their clients after having been retained. Attached to the said affidavit were copies of two letters, each dated April 5, 1949, and each purportedly signed by Julia Tordai, one of which was directed to his associate, Mr. Brunetto, but the other of which does not appear to be addressed to any particular person, although obviously, from its context, intended for Mr. Brunetto. The letter directed to Mr. Brunetto specifically authorized him, or his partner, Mr. Welsh, or any other counsel to be appointed by him, to represent her before any judicial or other [7 NJSuper Page 464] authority in the procedure to be had in the matter of the estate of her uncle, John Url, indicating that she wanted "to have only a decision of court of inheritance" and that she wished to be represented "only in case of having chance of the mentioned decision of court." In the other letter of the same date, Mrs. Tordai expressed sorrow that she could only give authorization in her name and that her relatives "would give an authorization only in case of without suit." The letter seems also to suggest that if the other relatives can, without suit, obtain a share in the estate they would be willing to sign an authorization. Mr. Welsh further stated in his affidavit that his firm had written their clients numerous letters advising them with respect to these proceedings and that, with one exception, their letters were unanswered. "The exception was the letter sent to us via the Hungarian Consul in New York, and this letter, strangely enough, was able to be delivered to us by the Consul." Thereafter Mr. Biro submitted a "Memorandum addressed to Affidavit of Mr. Welsh." Attached to his memorandum are photostatic copies, with English translations thereof, of two letters, each dated June 1, 1949, and each signed by Mrs. Tordai, one addressed to Brunetto & Welsh and the other addressed to Hungarian Consulate General, New York, enclosing, for forwarding, the letter to Brunetto & Welsh. This letter addressed to Brunetto & Welsh appears to be the "one exception" referred to in Mr. Welsh's affidavit. This letter of June 1, 1949, refers to Mrs. Tordai's previous letter of April 5, 1949, and to a communication received from Brunetto & Welsh on May 17, 1949, and then purports to withdraw the right of representation previously given. It is most interesting to observe that on or about June 21, 1949, the Surrogate received a letter, dated June 10, 1949, purportedly signed by Julia Tordai, expressing her understanding "that in the affair of the legacy left by my uncle, John Url * * * there will be held new proceedings, which will settle the question, if the remaining part of the legacy should go to the institute or the nearest relations of the deceased." She therein indicated that she was a niece of the deceased; that the deceased

still had a brother and two sisters living in Hungary who "did not authorize me to give their names, but I think it right." She concluded her letter by saying: "I believe that their authorization given to the Hungarian Consulate in the beginning of 1948 is still valid for this case. Should it not be, then beg the kind arrangements of the Court."

It seems quite apparent from the language of Mrs. Tordai's letters of June 1, 1949, that they were prepared for her by someone having more definite knowledge with respect to the status of the proceedings and being more trained in the preparation of letters of this character than she. She apparently had previously written and forwarded her own letters of April 5, 1949, to Mr. Brunetto and her subsequent letter of June 10, 1949, intended for the Clerk of this Court (Surrogate). Why then was it necessary that the letter of June 1, 1949, be written for her by someone else and forwarded only through the Hungarian Acting Consul General rather than directly to Brunetto & Welsh? This circumstance leaves in the mind of this Court serious doubt as to whether the letter of June 1, 1949, was the voluntary act of Julia Tordai.

It is difficult for this Court to understand how Mr. Biro, or any attorney, could, in good conscience, seriously contend for a right to represent conflicting interests in the same proceeding. Of course, he attempted to justify this right by his assertion that the orphanage took the entire residue; that the next of kin had no interest, and that, therefore, there was no conflict. This, of course, was the exact matter which gave rise to the conflict. Mr. Welsh, appearing on behalf of the next of kin, contended that the orphanage which was the object of the testator's bounty in fact no longer existed, as indicated by the State Department report, and that, therefore, there was an intestacy as to the residue of the estate, entitling the next of kin to the distribution thereof. Mr. Biro, of course, placed great reliance upon the certificate of the Mayor and Bishop of Szekesfehervar mentioned and referred to in his answer to the executor's complaint filed herein. This Court regards the statements contained in that certificate as purely self-serving declarations, which should

not and cannot be the basis for the ultimate determination of this matter. The next of kin have a right to be represented in this matter by independent counsel who are concerned with no interest other than theirs. The attorney acting herein for the Hungarian Acting Consul General could not properly and should not, under the circumstances here prevailing, attempt to represent them. Were they in a position to freely express their wishes in this matter (and as to this the Court entertains doubt) it can be fairly assumed that they would retain counsel able to advance their cause unhampered by any other conflicting interests. If necessary to serve the ends of complete justice, the Court might well appoint counsel to represent the interests of those in such position as to cast doubt upon their ability to make a free choice of counsel. It is entirely appropriate that the interests of the next of kin should be represented by independent counsel in the proceedings leading to the determination of the primary issue hereinafter to be discussed and determined. Were next of kin to be precluded from being heard in a proceeding of this character, it is possible that a determination could be made which would result in their never having their day in Court and possibly in a miscarriage of justice. For the reasons herein expressed, the next of kin will be admitted as parties to this proceeding and the Court will recognize the firm of Brunetto & Welsh as attorneys for the next of kin of John Url, deceased, in these proceedings. The motions made on behalf of the Hungarian Acting Consul General to strike from the record all pleadings and other documents filed in behalf of the next of kin are, therefore, denied. This action is not to be interpreted as indicating any opinion on the part of the Court as to whether the next of kin have, or may hereafter have, a valid claim to the residuary estate, but only that they have such an interest in the matter as to require that they be admitted as parties and be permitted to be heard in this proceeding.

The same principles which preclude the attorney for the Hungarian Acting Consul General from also acting as attorney for the next of kin of John Url, deceased, in these proceedings

apply with equal force to preclude the Hungarian Acting Consul General from acting for the next of kin in these proceedings under or by virtue of the power of attorney heretofore filed in this Court.

While having the matter still under consideration, the Court received a further communication, bearing date November 28, 1949, from the Department of State, enclosing a copy "of an unclassified report No. 220, dated October 21, 1949, from the American Legation at Budapest, which contains the text of Hungarian Decrees extending government control over all kinds of foundations." The report referred to "enclosed translations of decree of legal force No. 2/1949 of the Presidium of the Hungarian People's Republic promulgated in the Official Gazette No. 181 of August 30 regulating certain questions in connection with foundations, and of decree No. 4, 245/1949 (195) M.T. of the Cabinet Council promulgated in Official Gazette No. 195 of September 20, 1949, enforcing the above decree of legal force." The report states: "The above decrees are supposed to extend a more effective control upon all kinds of foundations existing at present and upon foundations to be established in the future." The letter from the Department of State, together with the enclosed report therein referred to, has been filed by the Court with the Surrogate. The term "foundation" as used in the text of the decree would appear to include charitable organizations, such as the orphanage mentioned in the residuary clause of the testator's will. The decree, in the opinion of this Court, indicates such a substantial tightening of restrictions on such "foundations" as might conceivably lead to their ultimate dissolution.

Several issues have been raised during the progress of these proceedings which, in the light of the ultimate disposition to be herein expressed, appear to be premature and not to require determination by the Court at this time. Included in such issues are (1) the interpretation of the residuary clause of the testator's will; (2) whether the orphanage which was the object of the ...


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