[183 NJSuper Page 513] The novel issue presented by these three cases is whether the State may be reimbursed for its costs and legal fees incurred in (1) setting up and administering conservatorships*fn1 of the assets
of an intestate decedent's estate and (2) conducting inquiries that lead to the discovery and location of next-of-kin in preliminary escheat proceedings.
The real and personal property of a person who dies intestate and without any next-of-kin escheats to the State. N.J.S.A. 2A:37-1 et seq.; Kugler v. Schaedel , 120 N.J. Super. 21, 24 (App.Div.1972). Concurrent with the Attorney General's initiation of escheat proceedings, extensive kinship inquiries are usually undertaken. In each of these three cases the State not only conducted document searches but also pursued through correspondence and personal contacts all sources of potential information about the existence and whereabouts of the intestates' presumptive heirs throughout the United States and, in one case, in Germany. In each of the cases at bar the intestate beneficiaries were located through these exhaustive efforts of the State's investigators.
The net assets of the three estates, after creditors' claims were satisfied (but prior to the payment of conservators' fees and expenses) were approximately $25,000, $82,000 and $148,000. Simultaneously with the applications for declaration of the next-of-kin as heirs-at-law and distributees of the conserved estates, the Attorney General moved for an allowance for costs and fees in the amounts of $1,000, $2,500 and $6,500, respectively.
Although no member of the Department of Law, including the Attorney General, may receive personal compensation for legal services rendered, N.J.S.A. 52:17A-10, the State itself, through the State Treasurer, is permitted to accept reimbursement for costs and fees, provided such an allowance is not otherwise prohibited. N.J.S.A. 2A:37-21 (formerly R.S. 2:53-23) has the "effect of lifting the statutory restrictions on the Attorney General or his representatives receiving an allowance
when otherwise permitted." State v. Otis Elevator Co. , 12 N.J. 1, 19 (1953).
One instance, relevant to the present cases, in which costs and fees may be awarded, is found in R. 4:42-9(a)(2) which permits payment of fees out of a "fund in court." See Sunset Beach Amusement Corp. v. Belk , 33 N.J. 162 (1960); Sarner v. Sarner , 38 N.J. 463, 468 (1962); Tabaac v. Atlantic City , 174 N.J. Super. 519 (Law Div.1980). As stated by the court in Cintas v. American Car & Foundry Co. , 133 N.J. Eq. 301 (Ch.1943), mod. and aff'd 135 N.J. Eq. 305 (E. & A.1944):
The rule which applies in the matter before me is that a court of equity will, in the exercise of sound discretion, order an allowance of counsel fees, payable out of a fund, to a complainant or directly to his counsel where he has, at his own expense, either maintained a successful suit for the preservation, protection or increase of a common fund, or brought into court a fund in which others, similarly situated, may share. [133 N.J. Eq. at 303]
Actions in escheat, by their very nature, create such a fund in court. The unclaimed estate of the intestate decedent forms the corpus of this fund when escheat proceedings are initiated. Under State v. Otis Elevator Co., supra , when escheat actions are successfully prosecuted by the State, the legal fees and expenses of a specially appointed prosecutor "may be deducted from the monies received by the State Treasurer." N.J.S.A. 2A:37-21.*fn2 In the cases at bar, the escheat proceedings were aborted by the discovery of heirs. Nonetheless, for the reasons set out below, this court finds an award to the State from the fund in court, in partial compensation of legal expenses and fees incurred, to be appropriate.
Prior to the inauguration of formal escheat proceedings pursuant to N.J.S.A. 2A:37-1 et seq. , the State, as initial presumptive taker, marshalls, controls and preserves the unclaimed intestate estate. In addition, the responsibility for making funeral ...