Mullin v. Mullin

96 A. 996, 85 N.J. Eq. 531, 15 Buchanan 531, 1916 N.J. LEXIS 407

• Court: Supreme Court of New Jersey
• Decided: March 6, 1916
• Status: Published

Opinion

The opinion of the court was delivered by

Swayze, J.

The complainant sought as administrator with the will annexed of Peter M. Mullin, deceased, to account in tire court of chancery. An account was had before a master and he appeals from the decree confirming the master’s report. The fundamental question is whether he is chargeable with the profits of the business of an undertaker, which was conducted by the decedent, complainant’s father, in his lifetime and by the complainant since his death. The facts are as follows:

Peter M. Mullin died November 4th, 1891. By his will he directed that his business be continued for tire benefit of his wife and children under tire direction of his wife and his brother Joseph J. Mullin, who were appointed executors and guardian of his children. He left eight children then living, of whom one has died, and a posthumous son, born April 24th,, 1892. The complainant, the oldest child, was about eighteen.. The widow, Annie E. Mullin, alone qualified as executrix. Upon her death, in 1900, the brother Joseph J. renounced and the. complainant became administrator b& bonis non. He had assisted his father in the business and continued the business after his father’s death alone, or in connection with his brother Joseph L. Mullin. On September 24th, 1895, after the complainant had attained his majority, a formal written agreement was made between the executrix, William E. and Joseph L., for the continuance of the business by William E. and Joseph L., in the name of the estate of Peter M. Mullin, for one year from October 1st, 1895, subject to the right of the executrix to terminate the agreement on one month’s notice. The family of Peter were to be maintained and educated from the net proceeds of the business. The profits, after maintaining and educating the family, were to be divided—three-sixths to William, two-sixths to Joseph, and one-sixth to the executrix. This arrangement did not prove satisfactory. Before the end of the year Joseph left and went into business for himself elsewhere. A new agreement was then made between the complainant and the executrix. This was verbal, and is said by the complainant, in his bill to have been an agreement that the balance of the profits of the business remaining after the support and maintenance of the complainant’s mother and the infant children, should belong to the complainant in payment for his services. In his testimony the complainant said that the agreement was that he was to support the children out of the business, educate, clothe and feed them until they became of age, the profits arising from the business were to be his, and the business was to be his after the children had arrived at their majority. The learned vice-chancellor accepted the version given in the bill. We think, as will appear, that the practical result is not different Avhichever version is correct. The difference is only a natural difference in the recollection or state- ’ ment of the effect of a verbal agreement made many years ago, in a point which at the time was not considered of importance and probably was not definitely in the mind of either party. The agreement was made after due deliberation and consultation of the executrix with counsel and with a brother of the decedent, and we see no reason to doubt the complainant’s statement that he entered into the agreement reluctantly and only at the earnest solicitation of his mother and the priest'of the church he attended. The complainant was a young man, a year past his majority, who had proved his ability to conduct the business sueeessfully for four years, who in that time had built up' a good will for himself, who had another career of promise open to him, who had an interest in his father’s estate, paid to him about the same time, large enough to furnish him with tire small capital needed to carry on the undertaking business. He was giving up such prospects as he might have and was binding himself to a contract which would last until his youngest brother came of age, seventeen years later, when tire complainant would be forty years old. The contract was, obviously, very much for the benefit of the widow and minor children, since they secured an assurance of support and education until each child came of age. The right of the executrix to malee the agreement is challenged by the defendants because it is said it was not for the equal benefit of all the children, but gave the younger children more than their elder brothers and sisters. This is true, but even if that fact would otherwise invalidate,the agreement as to tire complainant, we think it was in the power conferred by the will upon the executrix to continue the business for the benefit of the widow and children under tire direction of the executrix; and that direction was meant to apply not only to the conduct of the business, but to the conduct of the family and the determination of what was for tire benefit of the wife and children. It seems to us that the testator meant to keep' this young family together until each could make his or her own way in the world. It suits the present purpose of the defendants to regard this agreement as merely an agreement for the management of the decedent’s business, and their claim is that the profits of that business, after the death of the executrix when the complainant was appointed administrator, are the property of the estate with which the administrator is chargeable. This view prevailed in the court below. We regret that we cannot reach the same result as the vice-chancellor whose views usually command our assent. The error lies in overlooking the fact that the agreement made between the executrix and the complainant, in 1896, necessarily ran and bound both parties until the posthumous child, born in 1892, attained his majority, in 1913, two years after the present bill uyas filed. The complainant could not, and did not, repudiate or evade his obligation to support the infant children, and now acknowledges it. It is not questioned that lie has performed on his part. This obligation arose out of an agreement which gave him all the profits, and he cannot be held to the performance of the contract on his part and compelled to give up- his own rights thereunder. He was not acting in a fiduciary capacity when he made the contract, and the contract did not terminate when he became administrator. Both he and his father’s estate remained bound. The case is not altered by the fact that his obligation became less as his brothers and sisters one by one attained their majority. The business of the decedent, as distinguished from the tangible assets of the estate to be mentioned hereafter, consisted only of such good will as might attach to the name “Estate of Peter M. Mullin.” We think it doubtful whether in a business of that character, consisting of personal services and evidently dependent largely, if not entirely, upon the personal characteristics of the individual, there could be any good will as late even as four or five years after a man’s death. Assuming that there was, as the filial partiality of the complainant seems to have thought there was when he made the agreement, such good will is, at best, a wasting asset, and must become less valuable with each year-. The value of the business, so far as that value belonged to the estate, must have decreased as rapidly as the burden of the obligation to support the'children. No provision may have been made in express words that the business should be the complainant’s when the youngest child attained his majority, in 1913. Such an express provision was hardly necessary. The successful conduct of a business of that character for more than twenty-one years would, in effect, malee it his, whether the parties so agreed or not, in tire absence of an express covenant on his part not to engage in the business for himself; and there was no such covenant. He would be free to conduct the business in his own name, and we can hardly imagine a business competitor who 'would be willing to pay for the mere privilege to use tire name of a man who had been dead more than twenty-one years. No doubt, the executrix and the complainant looked at the matter practically, and both foresaw that the business would be the complainant’s before the contract terminated, in 1913, if, in fact, it was not already his in 1896.

Moreover, seven years before the agreement expired, the good will of the estate of Peter M. Mullin was ended by legislation. In 1906, an act was passed regulating the business of undertaking, and prohibiting under a penalty any unlicensed person from conducting the business. Comp. Stai. p. 5700. From that time forward, the estate could not legally carry on the business. At that time three of the children were still under age, and their support and education thereafter was entirely due to the earnings of tire complainant.

We have thus far dealt only with the profits of the business as distinguished from the tangible assets that came to the hands of the compMnant as administrator. These assets were subject to the same contract giving the profits to the complainant after supporting the minor children until the youngest attained his majority. The complainant raises no question as to his accountability therefor. In the absence of clearer proof, we may assume that the value when the youngest child attained his majority, in 1913, was the same as at the testator’s death, i. e., $500. On this amount the complainant is chargeable, with interest, from April 24th, 1913, with annual rests.

As to the effect of the releases, we agree with the vice-chancellor.

The decree, so far as it confirms the master’s report and adjudges that the proceeds of the conduct of the undertaking business are a part of the assets of the estate of Peter M. Mullin, and that the legatees are entitled to share therein, must be reversed and the record remitted to the court of chancery for further proceedings in accordance with our opinion.

For affirmance—Black—1. For reversal—The Chief-Justice, Garrison, Swayze, Trenci-iabd, Parker, Bergen, Kalisch, Terhune, Heppeni-ieimer, Williams, Taylor—11.