Opinion
08-21-1897
BENTLEY et al. v. BENTLEY et al.
Gilbert Collins, for complainants. Cortlandt Parker and Earle Insley, for defendant.
Bill by Emily P. Bentley and others against Emma Bentley and others to restrain waste. Heard on bill, answer, and proofs. Decree for complainants.
This is a bill by remainder-men against the tenant for life, to restrain waste. The complainants are three of the children of the late Peter Bentley (second of that name), of Jersey City, and the defendants are the widow and four infant children of Mr. Bentley. The infant defendants are in the same interest as the complainants. The widow is the sole executrix of the will of Mr. Bentley, and also, by its provisions, entitled to the use of his whole estate during her widowhood. He died in April, 1888, leaving seven children, ranging in age from 3 to 17 years, viz. Eleanor B., Emily P., Peter, Richard, John, Eugenie,and Parker. The bill was filed on the 9th of January, 1894, and upon its presentation to the chancellor he made an order that Mrs. Bentley show cause why an injunction should not issue restraining her from further dealing with the estate, and a receiver of the estate of the deceased be appointed in accordance with the prayer of the bill. Mrs. Bentley answered the bill on the 12th of February, and, after argument, the chancellor announced a decision on the 19th of February, 1894, which was embodied in an order made on the 5th of March. The injunction was granted, enjoining Mrs. Bentley from selling or incumbering the estate of her husband, and the receiver appointed, who has since had charge of it. The gravamen of the bill is: First, that Mrs. Bentley claimed, assumed, and exercised greater rights and powers under the will than the instrument warranted; and, second, that she had mismanaged and washed the estate. Both of these matters the chancellor, as the order shows, determined against her upon the case as then presented to him. The will, which was made in July, 1871, and about a year after the marriage, is in these words: "After payment of my debts, I give, devise, and bequeath to my wife, Emma, during her widowhood, the income of all my estate, both real and personal, as well that which I may be possessed of as all that which I am now possessed of. After the marriage or death of my said wife, I give, devise, and bequeath to my children my whole estate, be it real or personal, in fee simple; all after-born children to be bound by this will. I nominate and appoint my said wife, Emma, sole executrix of this, my last will and testament, and hereby empower, authorize, and direct her to sell and convey any or all of my real estate as to her shall seem meet, and authorize and empower her to execute sufficient deeds to the purchaser thereof." In March, 1882, he made a codicil as follows: "I do hereby authorize and direct that, so long as my wife remains unmarried, that she may make and continue such investments of my estate as to her shall seem best, and that she shall not be held accountable for any loss or mismanagement incurred during said widowhood, nor shall she be compelled to account for the said estate or its management by any court or officer authorized for that purpose during said widowhood." It was suggested that Mr. Bentley was prompted to make this codicil by a then recent decision of one of our courts holding executors liable for loss arising on assets which they found in an estate, and continued to hold, but which were not such as they would be justified in investing the funds of the estate in, in the first instance. His widow proved this will, and took possession of the estate, which she found in a complicated and embarrassed condition. It consisted of several pieces of real estate in Jersey City, all unincumbered except by arrearages of taxes, of some of which Mr. Bentley was the sole owner, but others he held as tenant in common with his sister, Mrs. Towar, having derived title by descent or devise from his father, Peter Bentley, the first. The personal estate consisted of a one-half interest in a railroad obligation of $100,000, which was held for life by the widow of the first Peter Bentley; of a bond against a gas company for $20,000, the validity of which was disputed; a claim for professional services against the Lehigh Valley Railroad Company, for an indefinite amount, but which was afterwards adjusted for $12,500; $2,600 of bank stock, and $550 of electric light company's stock. Besides these, there were some ordinary fees due him for professional services in a number of causes; a pleasure yacht, which had cost a large amount of money; and ordinary house furniture. He was indebted for arrears of taxes to the amount at least of $16,000, and also to the Hudson County National Bank in the sum of over $21,000, $15,000 of which being for direct loan, and $6,000 his liability on indorsements. He had assigned to the bank as collateral his reversionary interest in the $100,000 railroad obligation. In addition to the foregoing, he owed divers individuals on various accounts nearly, if not quite, $10,000. The gross annual rental value of the real estate was a little over $5,000, but, taking out taxes and repairs, would amount to between $3,000 and $4,000. His professional income had been considerable, and he had lived in rather expensive and extravagant style, but for a short time before his death had somewhat contracted his expenditures by dropping horses and carriages and coachman. After his death the widow kept the family together, continued to live in the homestead mansion, and attempted to further contract the expenses of living, but did not bring them within the income of the estate. She collected the claim against the railroad company, receiving $12,500. She collected, also, some arrears of interest upon the gas bond, to the extent of $3,700, and then compromised the bond itself at $15,000. She also sold the bank stock and electric light stock, and also divers pieces of real estate, and made some payments on account of the debt to the bank. In all this she acted upon the idea that she had, by the will, unlimited power over the body of the estate during her widowhood, and was not subject to be called to account by anybody for her dealings therewith; and she claims such right and power by her answer, and by her counsel in argument before the chancellor; and in accordance with that idea she kept substantially no account of such dealings. She, however, annexed to her answer several schedules, by which she admits receiving from the proceeds of the personal estate and rents due at the testator's death, about $38,807, omitting, however, $3,700 of interest on the gas bond, and from sales of real estate about $19, 195, making about $58,000 in all. She claims to have paid out ofthat, on account of arrears of taxes; $10,600, due at decedent's death, and about $20,500 on account of debts due by the testator at his death, and the expenses of his last illness and funeral; leaving still due, however, by the testator, about $16,000 to the bank and about $6,000 arrears of taxes. She admits receiving as income of the estate for 5 3/4 years $20,700, an average of about $3,600 a year, including $450 dividend on bank and electric light stock, but not including $3,700 interest on the gas bond. She claims that she paid for taxes accruing after the death of testator, and for the maintenance of the estate, $7,500; that she paid for interest on the bank debt about $5,200; and that the balance of what she received went to the maintenance of herself and family. By another schedule she says that she has received in 5 3/4 years from the body of the estate, over and above what she has expended for debts of the testator and ccst of maintenance, about $22,000, and that the net income has been about $13,000, making about $35,000 which she has expended for living, to which must be added the omitted item of interest on the gas bond, $3,700. For this expenditure the schedule states that she can produce receipts for household expenses amounting to $28,000, leaving by her schedule about $7,000, but, adding the item of interest just mentioned, between $10,000 and $11,000, unaccounted for, except that it went for general living expenses. By schedules handed up by counsel for defendant at the argument on final hearing the average amount of the body of the estate applied annually to family maintenance was $3,882.86, the average net income was $2,297.07, making a total annual expenditure of $6,179.93, making an average to each member of the family of $772.49. In other words, living expenses were supplied from the two sources in the ratio of three from the body of the estate and two from the income. At the hearing the matter of the management of the estate in respect to the making of sales, and so forth, was gone into extensively, as well as the application of the funds which she had received as the proceeds thereof. With regard to the latter it appears that the amount expended was substantially as stated in the answer and schedules, and that she had continued to live in the mansion house of the deceased, and that all the children had lived with and been supported by her until the filing of the bill, except that the elder child had married, and left home. With regard to the management of the estate in the matter of sales, and so forth, it did not appear that the estate had suffered any serious loss in any of the sales made. With regard to the claim of unlimited power over the estate during her widowhood, it appeared that she was so advised by a very young member of the bar of this state; that she took no other advice upon that question, except that of an experienced counselor of New York, who declined to give her advice upon the subject, and only acted as a friend in the matter of negotiating sales and settling with creditors, and so forth.
No opinion filed.
Gilbert Collins, for complainants.
Cortlandt Parker and Earle Insley, for defendant.
PITNEY, V. C. (after stating the facts). 1. The question raised upon the construction of the will has already been determined by the chancellor in this cause. The order appointing the receiver is in these words: "And the chancellor being of the opinion that the intention of the testator was to limit the defendant in expenditure to the income only of the said estate during her widowhood, and that the powers and immunities with which she is clothed by said will were designed to protect her from any annoyance and danger in the bona fide exercise of her discretion in making and continuing investments and otherwise managing the estate, and from responsibility for losses occasioned thereby, but that such powers and immunities were not intended to enlarge the estate by the will first given to her, or to authorize the appropriation by her of any portion of the corpus of the estate of her husband for her own or her children's benefit." The learned counsel for defendant claimed and was accorded the right to be further heard before me upon that part of the case, but his elaborate and ingenious argument has not manifested to me any unsoundness in that opinion, in which I fully concur.
2. With regard to the management of the estate with respect to sales and renting, etc., I think the defendant has succeeded as well as the testator had any right to expect that she would succeed. I am unable to believe that at the time he made the codicil he contemplated or expected to die leaving his estate in the embarrassed and complicated condition in which it was when death overtook him. No doubt, if his estate had been free from debt, and no arrears of taxation upon it, and had acquired such proportions that the income would support his family, his widow would have been quite competent to manage it. But he was, comparatively, still a young man when he died, and had been launching out into some hazardous operations, had been indulging in expensive habits, had appropriated some trust moneys, was largely in debt to his own sister for rents collected, and had permitted taxes to accumulate and become liens to a large amount upon his estate. To manage such an estate, extract it from its difficulties, pay the debts, and at the same time manage a large family of young children, was altogether beyond the capacity of the defendant. The facts developed at the hearing do not vary materially, and certainly not favorably to the defendant, from those which appeared before the chancellor on the application for an injunction. Upon those he concluded that the control of the estate should be taken from the defendant.
Criticism was made upon the prayer of the bill that the defendant should be removed fromher position of executrix. Of course, this court has no power to do that, and so much of the prayer of the bill was properly abandoned; but it does pray further that she may be enjoined from further management of the estate, from executing the power of sale conferred by the will, from disposing of any of the personal estate, and that some fit and proper person may be appointed as receiver of the estate, real and personal; and for other relief. The power of the court to grant this relief cannot be disputed. The serious charge against the defendant is that she had assumed an unwarranted power over the estate, and exercised it to the extent of living at a rate of expense far beyond what the situation of the estate warranted. In answer to this it was said that these very complainants had the benefit of that in part. But there can be no estoppel in this case as against infants. As soon as they came of age (and, with regard to one or two of them, before they came of age), they saw the impropriety of their mother's expenditures, and applied for this remedy, and they are entirely justified in doing so for the protection of the estate against further depreciation, although they themselves, while infants, had the benefit of the waste that had previously occurred. It appears that the defendant never sat down and calmly estimated the amount of the estate after paying debts, and the amount of the net income, in order to arrive at a just conclusion or determination as to how much money the family ought to spend, but simply went on living as nearly as she thought she could afford in the style that the family had previously lived when the husband was alive and able to provide by his own daily exertions. This failure to calmly consider the situation and deal with it accordingly shows the incapacity of the defendant to act as the conservator of this estate, and to regulate the expenditures under it. It seems to me that $700 or $800 a year for each member of the family, including small children, was altogether too great an expenditure, considering the situation and amount of the estate. But there is nothing in the evidence to indicate that the defendant was aware how much she was spending, or how much she was depleting the estate, until made so by the exigencies of this suit.
It was urged by the defendant's counsel as sound law, and in it he is probably right, that a certain amount of depletion of the corpus, to be used in supporting and educating the children during their infancy, was justifiable in this case, and that in dealing with the present instance the court ought to allow the widow so much out of the corpus as it would have allowed if application had been made to it before any such expenditure had been made. The courts have made such allowances in proper cases, the latest instance to which my attention has been called being the case of Ailing v. Ailing, 52 N. J. Eq. 92, at pages 94, 95, 109, 27 Atl. 655, at pages 655, 656, 661. But the complainants ask no accounting against the defendant. They distinctly disavow any desire to compel their mother to refund any moneys spent, and the suit is not framed in that view. All they ask is protection for the future; and the question of whether or not the expenditures were reasonable is only important as showing the judgment and capacity of the defendant in the premises. And in that view it seems to me that the expenses were altogether too extravagant. Thus it appears that every summer she spent from six to eight weeks in the country with her children, at an expense of $125 or more a week. And it is very plain that the court would not, in this case, have authorized the expenditure at a rate of three parts of the corpus to two parts of the income for the support of this family in the manner that it was supported. Much detail was gone into as to the habits of the family, and the manner in which the children were reared, which I do not consider it necessary here to comment upon, except to say that while it shows the defendant to be an affectionate mother, it also shows her to be lacking in sound sense, judgment, and discretion. The defendant's counsel did not ask that the control of the estate should be restored to the defendant until after so much of the property was sold as would suffice to pay all these debts and extricate the estate from its complications, but he urged that no decree should be made that would prevent the restoration of the estate to the wife when that end should be attained, and further asked that the costs of the litigation, including counsel fees to the defendant, should be paid out of the estate. It is unnecessary now to decide when, and under what circumstances, the court may withdraw its restraint, and restore the control of this estate to the defendant. But with regard to the question of costs and counsel fees, in view of the attitude taken by the defendant in her answer, and by her counsel in the argument before the chancellor, and even at the final hearing, I am unable to see any ground upon which I can allow costs and counsel fees to the defendant. She set up an unfounded, and I think unwarranted, claim to the complete control of this estate, and her conduct shortly before the filing of the bill was such as did, in fact, alarm her children, and I think there was enough, at least, in it to justify their alarm. The costs of the complainants, including the disbursements for writing out the evidence, etc., will be paid out of the estate. I will advise a decree accordingly.