On appeal from Superior Court, Law Division, certified to this court on its own motion.
For reversal -- Chief Justice Vanderbilt, and Justices Oliphant, Wachenfeld, Jacobs and Brennan. For affirmance -- Justices Heher and Burling. The opinion of the court was delivered by William J. Brennan, Jr., J.
Plaintiff, the substituted administrator of the estate of Mary McFeely, deceased, appeals from an adverse judgment entered on a jury verdict in the Superior Court, Law Division, Hudson County. We certified the appeal of our own motion while pending in the Appellate Division.
Mary McFeely died intestate on June 4, 1942, and on June 10, 1942 her brother, Bernard N. McFeely, was appointed administrator of her estate when the other next of kin executed a renunciation in his favor. On August 8, 1949 Bernard N. McFeely died testate and the defendant, Joseph B. McFeely, qualified as executor of his will. The complaint herein charges that Bernard did not file an inventory, or account, or fully perform his duties as administrator and demands of his executor an accounting, and judgment, less lawful deductions, in the amount of $292,448.86, the value of Mary's estate as reported by Bernard in his transfer inheritance tax return. The suit was brought after Bernard's executor unsuccessfully resisted the appointment of the substituted administrator. See In re McFeely's Estate, 11 N.J. Super. 518 (App. Div. 1951), affirmed 8 N.J. 9 (1951); see also 10 N.J. 133 (1952).
This is a statutory action authorized by N.J.S. 3 A:6-46. An action of this nature has been provided for since Paterson's Laws, p. 154, section 3, passed March 2, 1795, and stems from the statute 4 and 5 William & Mary, ch. 24; Schenck v. Schenck's Ex'rs, 3 N.J.L. 149 (Sup. Ct. 1809). The statute in pertinent part now provides:
"A substituted administrator * * * shall be entitled to demand and receive the whole of the personal estate of his decedent, except such portion thereof as shall have been properly and justly paid out and distributed. He may sue for and recover all such assets, or their equivalent whether legal or equitable, from any person, his heirs or personal representatives, chargeable therewith, and * * * shall in any such litigation represent the creditors and all persons beneficially interested in the estate." (Emphasis ours)
The executor's answer to the demand of the substituted administrator for the turnover of Mary's estate, less lawful deductions, was that on June 10, 1942, the day of Bernard's appointment as administrator, the other next of kin of Mary, 11 in number, transferred their interests to Bernard by a writing of that date. The substituted administrator filed a reply to the answer alleging that the "said paper * * * was the product of fraud in the factum " in that Bernard secured the signatures of the 11 next of kin thereto by "falsely and fraudulently representing to the signers thereof that they were executing a correctory form of renunciation, when in truth and in fact * * * the said paper purported to be a legal instrument of a different nature and character, and which said instrument purported to be a transfer of their right, title and interest in the Estate of Mary McFeely, deceased, and the said beneficiaries would not have executed this paper, if its true nature had been divulged to them, and said instrument was executed by the beneficiaries in reliance upon the representations made to them that it was a correctory renunciation."
The executor thereupon moved for a summary judgment on the ground that the alleged wrong was not a wrong to the estate but rather to the individual beneficiaries and that they alone had standing to attack the transfers. Summary judgment was granted upon that ground, but on appeal the
Appellate Division reversed the summary judgment, 26 N.J. Super. 522, 525 (1953), certification denied 13 N.J. 295 (1953), the ground of reversal being that
"The statute explicitly authorizes the substituted administrator to sue in behalf of 'all persons beneficially interested in the estate.' * * *
Defendant's suggestion that the only parties in interest are the individual beneficiaries who challenge the assignment, ignores the representative capacity which the statute confers upon the substituted administrator. He speaks for the beneficiaries and may assert in their behalf their challenge to the adequacy of the defense. That defendant may prevail as to all beneficiaries ...