[58 NJSuper Page 253] Plaintiff seeks a judgment declaring him to be the owner of approximately 20 acres of vacant land in the Township of Caldwell, Essex County, New Jersey. He claims title by reason of certain deeds secured from persons alleged to be the owners of the equity of redemption in said property and who were not joined as parties defendant in the tax foreclosure action brought by the defendant township in 1940. The township counterclaims for the same relief, asserting that it holds title by virtue of the said tax foreclosure suit, in which the final decree was entered June 21, 1940. The problem to be resolved is whether the defendant's 1940 decree did bar and
foreclose the equity of redemption of all persons who had an interest in the land at the time the suit was started and judgment entered.
This land and a contiguous piece in the Borough of North Caldwell (which the plaintiff now owns) were formerly owned by Burt S. Morris, who died testate on December 16, 1933. He had owned it since 1926. His will, dated November 1, 1929, was probated in the Essex County Surrogate's Court on February 6, 1934. His heirs at law and next of kin, as disclosed in the petition for probate, were his wife, Mary A. Morris, and his brother, Watson D. Morris. Decedent left no children, nor issue of any deceased children. The will nominated the widow and the Montclair Trust Company as executors, and as trustees of the trust fund therein provided for. Only Mrs. Morris qualified, and she acted as sole executrix and trustee. The will directed that the entire residuary estate be held in trust, to pay a stipulated sum each month to the widow out of principal or income and, if after such payment there remained sufficient income for the purpose, a stipulated sum was to be paid each month to the testator's stepson. It was further provided that, if income still remained after these payments, it was to be set aside for the education of the children of the testator's nephew. Upon the death of Mrs. Morris, the principal of the trust fund was directed to be distributed among six persons, including the stepson, and if the latter was then dead his share was to go to his children, but the shares of any others who predeceased were to be divided among the survivors of the said six persons. There were other defeasance clauses not here important.
The records of the estate of Burt S. Morris in the Essex County Surrogate's Office were placed in evidence. These reveal that, on July 16, 1935, a "decree of insolvency" was entered which recited that the "estate of Burt S. Morris, deceased, is likely to be insolvent and the said Executrix is hereby directed to proceed as if the estate were insolvent." The "report of claims" filed in 1935 showed the estate to be
insolvent. In the course of the administration of the estate, the executrix was given authority by the County Court to sell certain lands, in an effort to raise money to pay debts, but the land involved in this suit was not among the tracts ordered to be sold. This 20-acre tract, which was listed among the estate's assets as being a 19-acre tract, was encumbered by two mortgages totalling approximately $18,000, and was appraised as having no equity. The final account of the executrix was filed on April 17, 1942 and disclosed that from the liquidation of all assets she had received the sum of $641.70, had disbursed $68.40, and had a balance on hand of $573.30. The Essex County Orphans' Court entered a judgment approving the account on May 26, 1942 and directed the distribution of the funds in the hands of the executrix to the undertaker and for commissions and counsel fees. General creditors received no dividend.
It thus clearly appears that at no time after Burt S. Morris' death were there funds or assets from which the trust created by the decedent's will could have been set up, and that the cestuis que trustent took nothing thereunder. Whatever rights they might have had were subject to the prior claims of Morris' creditors. When the tax foreclosure complaint was filed on January 29, 1940, approximately seven years after the testator's death, a decree of insolvency had been entered and the appraisal of the assets showed that there was actual insolvency.
The complaint in the tax foreclosure suit sought foreclosure of tax sale certificates held by the township for the years 1931 and 1932, and it was alleged that there were unpaid taxes due for the years 1933 through the first half of 1940. The total amount claimed was $1,620.18. Mary A. Morris, individually and as executrix and trustee of the estate of Burt S. Morris, was made a party defendant, but not the other persons who were the cestuis que trustent of the fund, named in the will. Various encumbrancers were also joined as parties defendant, including the holders of the two mortgages on the land. No defendant answered
or disputed the township's right to relief, and none appeared to redeem the property on the date set in the foreclosure proceedings.
Plaintiff's claim is that the failure to join the cestuis que trustent renders the foreclosure proceedings defective because, not having been made defendants, their equity of redemption was not cut off or barred. Plaintiff has secured and recorded deeds from all of the cestuis que trustent , purporting to convey to him their respective equities of redemption. It is by virtue of these conveyances that the plaintiff claims title to the land. He has offered to pay to the township the amount fixed by the final decree of June 21, 1940 as the amount then necessary to redeem, together with interest on this sum and such taxes as thereafter would have been assessed against the property by the township if it had not been removed from the assessment rolls by reason of the final decree in the tax foreclosure action. The testimony shows that the property now has a value greatly in excess of these amounts.
Defendant contends that its tax foreclosure proceedings were proper, and that any interests of the cestuis que trustent and their equities of redemption in the property were cut off and barred by the entry of the final decree. It points to the statute in force at the time of the foreclosure action, L. 1939, c. 151, sec. 1, effective July 1, 1939, ...