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Matter of Estate of Ellen Jane Ackerman

Decided: December 4, 1952.

IN THE MATTER OF THE ESTATE OF ELLEN JANE ACKERMAN, DECEASED. FREDERICK G. POETER, SUBSTITUTED ADMINISTRATOR OF THE ESTATE OF ELLEN JANE ACKERMAN, DECEASED, PLAINTIFF CROSS-APPELLANT AND RESPONDENT,
v.
JAMES D. MOORE, DEFENDANT CROSS-RESPONDENT AND APPELLANT, AND MASSACHUSETTS BONDING AND INSURANCE COMPANY, DEFENDANT-RESPONDENT



McGeehan, Bigelow and Smalley. The opinion of the court was delivered by McGeehan, S.j.a.d.

Mcgeehan

In February 1951 Frederick G. Poeter, substituted administrator of the estate of Ellen Jane Ackerman, deceased, brought a proceeding in which he sought a surcharge against James D. Moore, the original administrator, for overpayments made in Moore's distribution to distributees; and on November 30, 1951 judgment was entered in the Bergen County Court, Probate Division, surcharging James D. Moore in the sum of $3,038.56, together with interest at the rate of 4% per annum from August 5, 1936, in the sum of $1,853.52, making a total of $4,892.08. James D. Moore appeals on the ground that the court erred in making any surcharge against him, and the substituted administrator cross-appeals on the ground that the surcharge should be larger in amount.

Ellen Jane Ackerman died intestate on November 20, 1935. The persons entitled to share in the estate fall into 14 groups, with each group entitled to share equally. James D. Moore was appointed administrator pendente lite of the estate on December 2, 1935, and on June 23, 1936 he qualified as general administrator. Without any order of the court Moore distributed $61,500 among the distributees between August 5, 1936 and December 31, 1936, and in this distribution, while he made some payment to each of the 14 groups, he paid in all to Group 9 a total of $9,681.48, to Group 13 a total of $8,322.89, and to Group 14 a total of $12,873.92; but he paid to no other group a total in excess of $6,500. Again without an order of the court Moore, in February 1938, distributed $15,333.97; but in an apparent effort to rectify the overpayments already made to certain groups, this money was distributed entirely to the eight

groups which had each received less than $4,000 in the first distribution. Later, in August 1938, Moore made a further payment in distribution to Group 12 pursuant to an order of the Bergen County Orphans' Court dated August 4, 1938, which directed him to pay to Audrey Rembe (the only member of Group 12) "the sum of $4,835.36 out of the funds in his hands as such Administrator, which said payment is payment in full of the balance of the share of the said Audrey Rembe of the said Estate of Ellen Jane Ackerman, deceased, free of all payments of inheritance taxes." The payments thus made by Moore to Group 12 (the last payment being made pursuant to the order of the aforesaid court) totaled $9,783.52. Although the order of August 4, 1938, ordered Moore to continue as administrator until the further order of the court and to file a supplemental account on August 16, 1938 for all moneys received and disbursed by him from the date of his account (July 14, 1938) to and including August 15, 1938, no such supplemental account was put in evidence and the record does not show what amount Moore turned over to the substituted administrator, Frederick G. Poeter, who was appointed on August 16, 1938. On August 16, 1938 an order was entered discharging James D. Moore "from all further duties of his said office except accounting for and paying over the monies or assets received and undistributed by him by virtue of his said office" and the present substituted administrator, Frederick G. Poeter, was appointed.

Pursuant to an order of the court, all further payments in distribution made by the substituted administrator were made wholly to the groups which had not been overpaid, and thus no further payments were ever made to Groups 9, 12, 13 and 14. On November 10, 1950 the court ordered distribution of the balance remaining in the hands of the substituted administrator, above necessary expenses, to be distributed wholly to the ten groups which had theretofore not been overpaid. Including the payments under this last order of distribution, each of these ten groups received total

payments of $7,885.92. The result is that Group 9 received $1,795.56 more, Group 12 received $1,797.50 more, Group 13 received $436.97 more, and Group 14 received $4,988 more than the other groups received.

In the proceeding brought by the substituted administrator to surcharge Moore, the original administrator, for the overpayments made by him, the substituted administrator sought to have the court fix $7,885.92, the total amount of payments received by each of the ten groups not overpaid, as the base figure for determining the amount of overpayments made by Moore to the four groups, namely, Groups 9, 12, 13 and 14. Thereafter the substituted administrator withdrew any claim for surcharge for overpayments made to Group 12, because the overpayment, if any, to that group was made pursuant to an order of the court; the withdrawal being made because of the concession by the substituted administrator that a representative cannot be held liable for an overpayment if the overpayment is made under an order of the court. Cf. 34 C.J.S., Executors and Administrators , ยง 504. The trial court, in determining whether overpayments had been made to Groups 9, 13 and 14, and if so the amount of such overpayments, used $9,835.36 which, by the court's computation, was the total amount paid to Group 12 pursuant to the order of August 4, 1938 (actually $9,783.52), as the base figure upon which overpayments should be figured, and thus found that the only group which was overpaid was Group 14. Based on this finding, the trial court entered the judgment under appeal, in which it surcharged Moore for the difference between the base figure used of $9,835.36 and the total amount received by Group 14 of $12,873.92, and also surcharged the original administrator with interest from August 5, 1936, at 4% per annum on this overpayment.

Moore argues first that no overpayment was proven. From the evidence adduced it is clear that Moore made substantial overpayments to certain groups in his first distribution; that knowing this to be so, he made his second distribution

entirely to the eight groups which had received the least in the prior distribution; and that Moore knew the remaining assets of the estate, as shown by his account of July 21, 1938 (only one month before his discharge as administrator), even if liquidated at full value shown, would be insufficient to correct the overpayments already made by him to Groups 9, 13 and 14.

In the first intermediate account filed by Moore as administrator, which was dated January 10, 1938 and allowed on February 2, 1938, he included a schedule headed: "Showing Payments made on Account of Partial Distribution, as well as Inheritance Taxes Paid, as Assessed against the Respective Distributees," followed by a list of more than 50 names, with varying amounts set forth alongside these names. This schedule does show that $61,500 was distributed by Moore to the named persons, and in the amounts set forth therein, during the period between August 5, 1936 and December 31, 1936. Moore argues that, by virtue of the provisions of R.S. 3:10-18, the decree of February 2, 1938 allowing this account, and the decrees allowing his later accounts, are a bar to this proceeding to surcharge him for overpayments. We agree with the trial court that such decrees do not bar the proceeding. R.S. 3:10-18 specifically makes an exception in a case such as this of mistake in the account proven to the satisfaction of the court. In Ely v. Norton , 6 N.J.L. 187 (Sup. Ct. 1822), an overpayment to a distributee by an executor was specifically referred to as a "mistake." Voluntary payments to distributees, without an order of court authorizing them, are made by the representative at his own peril, and this is so even though the representative acts in good faith in ...


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