Goldmann, Freund and Conford. The opinion of the court was delivered by Freund, J.A.D.
Four separate actions were consolidated for trial in the Chancery Division of the Superior Court, resulting in a single final judgment which is the subject of this appeal.
June Ireland, daughter of Samuel W. Ireland and Beatrice F. Ireland, married Leo H. Flasch on March 25, 1944. She died on November 22, 1950, intestate, survived by her husband and two children, James Michael, referred to as Jimmy, born May 7, 1945, and Samuel Warren, referred to as Sammy, born December 15, 1946. Prior to and at the time of her death, June and her family lived together in their home at 1 North Somerset Avenue, in Ventnor,
New Jersey, title to which was in her name. The house and its furnishings were a gift to June from her parents, the plaintiffs. Leo Flasch was employed by Mr. Ireland. After the death of June, her husband and children continued to live there, and her maternal grandmother, Mrs. Linda R. Fort, joined them and took care of the household. On June 5, 1953 Leo married Norma Jean Johnson, and after a brief honeymoon she moved into the house and Mrs. Fort moved out, although they wished her to remain.
On June 12, 1953, presumably as a result of an understanding during their courtship, a petition for the adoption of the children by Norma Jean, acknowledged on June 10, 1953, was filed in the Atlantic County Court, Probate Division. The plaintiffs in the adoption proceeding were Norma Jean Flasch and Leo H. Flasch, and he attached his written consent, as father of the children. The County Court judge made an order fixing July 30, 1953 as the date for hearing, and directed an investigation by the Department of Institutions and Agencies. Their report was received, the hearing was held, and on July 30, 1953 a judgment was entered for adoption of the children by Norma Jean Flasch.
Leo had been appointed administrator of the estate of June Ireland Flasch on January 1, 1951 and guardian of the estates of his two minor children on April 24, 1953 by the surrogate of Atlantic County.
He made application for the sale of the infants' lands at 1 North Somerset Avenue, Ventnor, and a judgment directing sale was entered on June 26, 1953, pursuant to which he sold the property for $30,000, subject to a mortgage. The sale was duly confirmed and deed was delivered on September 11, 1953. At the same time he also sold the household furniture belonging to his wife's estate for $4,500.
On September 14, 1953 Leo, Norma Jean and their children moved from New Jersey to Whittier, California. There Leo bought a house, using money from a fund substantially constituted by moneys belonging to the children and taking title to it in the names of himself and Norma Jean. On March 24, 1956 Leo died in California, survived by his
wife, Norma Jean, the two children of his prior marriage, and a third, Leo Henry Flasch III (Buddy), born to him and Norma on May 19, 1954.
On March 7, 1956, shortly before Leo's death, the Whittier house was sold at a profit and the net proceeds of sale were deposited in joint bank accounts of Leo and Norma Jean.
Soon after Leo's death, Norma Jean and the children returned to New Jersey, where they have since continuously resided. Leo's will, which made Norma Jean sole beneficiary, was probated before the surrogate in Atlantic County, New Jersey, and letters testamentary were duly issued to Norma Jean on May 24, 1956. On the same day she applied for and was appointed substituted guardian of the property of the minor children, Jimmy and Sammy, and substituted administratrix of the estate of June Ireland Flasch, in the place of her husband, Leo. Both applications were based on her claim of right as the adoptive parent of the children by virtue of the judgment of adoption.
On their return from California, Jimmy and Sammy Flasch resided at first with Norma Jean in a hotel apartment in Atlantic City owned by a corporation, the stock of which is owned by her and her mother, but they now reside in Ocean City. From the time of their return to Atlantic City in 1956 and during the summer of 1956 these children visited with their maternal grandparents, the plaintiffs herein, and also with their maternal great-grandmother and other maternal relatives. Unfortunate differences arose between these plaintiffs and Norma Jean which seem cumulatively to have created a very unhappy situation, and consequently the visits between the grandparents and their grandchildren lessened.
Plaintiffs filed a complaint in the Superior Court, Chancery Division, seeking custody of their grandchildren on the ground that the judgment of adoption was invalid, having been obtained in violation of the adoption statute, R.S. 9:3-1 et seq. The court denied their application and dismissed the complaint. This is the first issue dealt with in this opinion.
Leo had made no application for assignment or admeasurement of curtesy in the lands of which his wife June died seized, and he asserted no claim therefor in the sale of infants' land proceedings nor at any time during his life.
On May 22, 1953 Leo applied to the Superior Court for sale of the infants' lands. Pursuant to an order, he sold the property for a net sales price of $15,589.65, and the sale was duly confirmed by the court. On May 24, 1956, two months after his death, five and one-half years after the death of his wife when his curtesy interest became consummate, and almost three years after the sale of the property, an ex parte application was made in the original sale of infants' land proceeding and a judgment was entered on the same day (May 24, 1956), awarding Leo H. Flasch the sum of $4,772.19 out of the proceeds of sale, as the gross sum in lieu of curtesy. The evaluation was made on the basis of Leo's age at the time of his wife's death and upon the net sale price of the property three years later. The judgment was entered on application of the attorney in the original proceeding, and without suggestion upon the record of the curtesy tenant's death.
The plaintiff, Samuel W. Ireland, was appointed guardian ad litem for the minors in order to conserve and protect their interests by reason of their conflict of interests with their guardian Norma Jean, and on his application the aforesaid judgment was opened and set aside in order that the matter might be re-evaluated and re-appraised. At the conclusion of the trial and in the judgment under review, an award for curtesy in the same amount and upon the same basis was made. The propriety of this award is the second issue to be considered.
In the same judgment of the Chancery Division, Superior Court, an allowance was made to Leo in the sum of $7,125.06 for advances made by him for repairs, mortgage interest and installment payments, taxes and insurance, while he was in occupancy of the property with his family. The validity of this allowance is the third question.
As guardian of his minor children, Leo received the moneys belonging to them from the sale of the infants' land, and he retained their distributive share of their mother's personal estate. He did not file any account as guardian or administrator. He had admittedly commingled the funds belonging to the children with his own and used them for his own purposes. He purchased the residential property in Whittier, California, title being taken in his and Norma Jean's names, which resulted in a profit at the sale. The defendant, Norma Jean, as substituted administratrix of the estate of June Ireland Flasch, and as substituted guardian of the children, filed accounts in the respective estates.
After the trial of the consolidated action, the court entered a judgment which, besides dismissing plaintiff's suit for custody of the two minor children, entered a judgment which (a) awarded Norma Jean, as executrix of the estate of Leo, the sum of $4,772.19 for the curtesy interest of Leo as aforesaid; (b) awarded her in the same capacity the sum of $5,428.98 in reimbursement for payments made by Leo for mortgage principal, interest, taxes and insurance in the maintenance of the Ventnor property; and (c) surcharged his estate with the amount of the funds belonging to the children retained by Leo, with interest at 4% per annum, but denied the claim made on their behalf to the profit realized from the investment of these funds in the California property. The fourth question is whether the infants were entitled only to interest or whether they were entitled to the profits resulting from the sale by reason of the use of the cestui's funds.
The last point urged is that the court should appoint a corporate trustee over the infants' estates in the place of Norma Jean.
Plaintiffs challenge the validity of the judgment of adoption on the ground that the Atlantic County Court, Probate
Division, lacked the jurisdiction or power to enter the judgment, and because it was obtained by fraud and collusion. They seek custody of the minors, as their maternal grandparents, because it would be to the best interests of the children.
The basis for plaintiffs' attack upon the judgment is that at the time of its entry the minor children had not been living with the petitioner, Norma Jean, for the minimum period of six months as required by the provisions of the adoption statute, R.S. 9:3-5, which provides that:
"A decree of adoption shall not be granted unless the child has been living continuously in the home of the petitioner or petitioners for not less than one year previous to the hearing of the petition; provided, however, that the court, if it finds that the best interests of the child so require, may in its discretion grant a decree of adoption after the child has so lived in the home for a minimum period of six months."
Plaintiffs' charge of fraud and collusion in obtaining the judgment is premised upon the fact that neither in the complaint for adoption nor in the testimony at the hearing did Norma Jean make reference to the fact that the children had been living with her for a period less than the minimum statutory period of six months.
The complaint for adoption was filed jointly by Norma Jean Flasch and Leo H. Flasch, pursuant to R.S. 9:3-1, which provides as follows:
"Any unmarried person of full age, a husband with his wife's consent, a wife with her husband's consent or husband and wife jointly, may petition the orphans' court of the county wherein the petitioner or any minor child may reside for permission to adopt such child and change the name of such child."
The complaint recites that the minors were children of Leo H. and June Ireland Flasch; the date of her death; that they have ever since resided with him; his marriage to Norma Jean on June 5, 1953; that she now resides with them; and Leo's consent, as the natural father of the children, to the adoption by Norma Jean.
The report of the Department of Institutions and Agencies to the court directed attention in three places to the fact that the children had "been in the home of the female plaintiff less than six months and not in the manner approved by Section 9:3-5 of the New Jersey Revised Statutes." ...