Opinion ID: 1966617
Heading Depth: 1
Heading Rank: 9

Heading: Substituted trustee.

Text: The executors-defendants in the removal suit appeal from those portions of the judgment of the court below which appoint a substituted trustee, direct the executors to assign and deliver to said substituted trustee all the stock owned by the decedent in the Bright Star Battery Company and the Bright Star Warehouse Company, vest voting rights in connection with such stock in the said substituted trustee, enjoin the executors from interfering with the operations and management of said corporations, direct the executors to resign as directors and officers of said corporations, and vest the management and operations of the said corporations exclusively in the substituted trustee. As has been stated, we are of the opinion that the executors should be removed. This necessitates a modification of the judgment of the court below for conformity to our opinion and removes the necessity of detailed consideration of these portions of the judgment. However, it was error to vest the management and operations of the Battery and Warehouse corporations exclusively in the substituted trustee. The corporations were not made parties defendant. The business of a corporation is operated by its board of directors, and ownership by the estate of the controlling interest of the outstanding stock confers no power upon the fiduciaries of the estate (whether they be executors or trustees) to bind the corporation. Blauvelt v. Citizens Trust Co., supra, at pp. 551, 552. However, this does not mean that the exercise of the right and duty to vote the stock for election of proper directors is to be denied the fiduciary. See D'Arcangelo v. D'Arcangelo, 137 N.J. Eq. 63, 67 ( Ch. 1945). In view of the fact that there remains to be performed a considerable amount of labor in the settlement of the estate of Israel Koretzky, deceased, (principally in connection with debts and estate taxes) it is advisable that a substituted administrator with the will annexed be appointed. This is within the jurisdiction of the Chancery Division of the Superior Court in this case. In re McFeely, 8 N.J. 9 (1951). The judgment should be modified accordingly; it appears judicious to place all the assets of the estate in the hands of the substituted administrator with the will annexed until such time as the estate may be settled, and to that end the same individual appointed as substituted trustee should in this case be appointed as such substituted administrator.