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First Department, November, 1911.
[Vol. 146. of the administrator for failure to file an inventory. (Matter of Moulton's Estate, 10 N. Y. Supp. 718.) He cannot compel an accounting in the Surrogate's Court (Matter of Whitehead, 38 App. Div. 319), and, therefore, of course, cannot proceed against an executor or administrator for failure to file an account. He may be cited to attend upon an accounting (Code Civ. Proc. § 2728), and the decree of distribution would apparently be conclusive upon him (§ 2743), but he could gain nothing by such appearance. The surrogate would have no jurisdiction to pass upon the validity of the claim without the consent of the executor or administrator ($$ 1822, 2743); the decree cannot provide that he be paid because the surrogate is required to direct distribution among the creditors whose claims are admitted or established and the next of kin (§ 2743); nor can the surrogate require a fund to be set aside to meet the claim because his power in that regard is limited to an admitted debt of the decedent not yet due, or one upon which an action is pending, between the claimant and the executor or administrator. ($ 2745.) Unless, therefore, the holder of an unmatured, disputed claim may maintain an action similar to the present he may be obliged to stand idly by and see the estate squandered, wasted or distributed without the power to do one single thing for his own protection, relying only upon the possibility that when his debt does mature the executor or administrator may be personally capable of paying it. It is common knowledge, fortified by many cases in the books, that such reliance often proves to be unsatisfactory. We think that under the circumstances a proper case is made out for the interposition of equity. The jurisdiction of courts of equity over executors and administrators has long been recognized, and while such courts are indisposed to assume jurisdiction unnecessarily, as where full relief can be obtained in the Surrogate's Court, the right to intervene still exists and will be exercised in cases like the present wherein the statutory limitations upon the power of the Surrogate's Court are inadequate to protect a claimant. In such cases the statutory remedies are not deemed exclusive. A sufficient precedent for the present action is to be found in Ludington v. Thompson (153 N. Y. 499). In that case a creditor of an
First Department, November, 1911.
insolvent corporation held eight promissory notes of the corporation maturing at future dates. His claim was rejected by the receiver, and he sued, as does the present plaintiff, for the purpose of establishing his status as a creditor and his interest in the assets of the corporation. The court, in sustaining his right to sue, said: "It is important to notice the real nature of the action. It is in form an action upon the notes, and judgment has been rendered thereon against the defendant in his representative character. In fact it is an action to ascertain and establish the status of the plaintiff as a creditor of the corporation, and as such entitled to share in the distribution of its assets in the hands of the receiver. * * *The action, we repeat, is not in a proper sense an action brought on obligations evidenced by the notes, but to ascertain whether the plaintiff was a creditor by reason thereof, entitled to share in the distribution of the estate of the corporation." After pointing out that the assets of an insolvent corporation are a trust fund in the hands of the receiver for the benefit of the creditors and stockholders, the court further said: "It was not a trust for the then ascertained creditors, but for all who should establish their status as creditors in the due course of the administration of the trust." The Special Term was of opinion, as the respondents now argue, that the case above cited is not analogous to the present, because the estate of a decedent in the hands of his executor or administrator is not a trust fund for the benefit of his creditors. This view is erroneous. It has often been held that an executor or administrator is a trustee, and is in that capacity subject to the jurisdiction of a court of equity. In Wager v. Wager (89 N. Y. 161) it is said: "An executor is always a trustee of the personal property of the testator and can be called upon to account therefor as such in a court of equity, even though no express trust be created by the will." In Babcock v. Booth (2 Hill, 181) it was held that an administrator could sue to set aside fraudulent transfers, which his, intestate could not himself have avoided, the reason being that the administrator stood in the position of a trustee for the creditors. Upon this point the court said (at p. 186): "In Dox v. Backenstose (12 Wend. 543) it was remarked by SAVAGE, Ch. J., that under our present statute 'executors and administrators have a
First Department, November, 1911. [Vol. 146, App. Div.] new character, and stand in a different relation from what they formerly did to the creditors of the deceased persons with whose estates they are entrusted. They are not now the mere representatives of their testator or intestate-they are constituted trustees and the property in their hands is a fund to be disposed of in the best manner for the benefit of the creditors."" To the same effect is City of New York v. U. S. Trust Co. (35 Misc. Rep. 639; affd., 78 App. Div. 366; 178 N. Y. 551), wherein the court upheld an action in equity to reach a decedent's property, although no precise provision of the Code could be found under which the action could be maintained. The deci sion was placed upon the express ground that the assets of the estate constituted a trust fund upon which, in equity, the creditor had a lien. We are, therefore, of the opinion that the complaint states a sufficient cause of action, and that the motion for judgment upon the pleadings should have been granted. The order appealed from is, therefore, reversed, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs, with leave to defendant, however, to withdraw his demurrer and to serve an answer within twenty days on payment of costs in this court and in the court below.
INGRAHAM, P. J., LAUGHLIN, CLARKE and MILLER, JJ., concurred.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs, with leave to defendant to withdraw demurrer and answer on payment of costs.
CASES REPORTED WITH BRIEF SYLLABI
DECISIONS HANDED DOWN WITHOUT
FIRST DEPARTMENT, JULY, 1911.
NATALE DE ROSA, Respondent, v. JACOB FURMAN and Others, Appellants.
Appeal from a judgment entered in the New York county clerk's office on the 6th day of January, 1911, upon the verdict of a jury, and from an order entered the same day denying a motion for a new trial.
PER CURIAM: The judgment and order appealed from should be reversed and a new trial ordered, with costs to appellants to abide the event, upon the ground that there is no evidence to sustain the finding of the jury that the defendants were in possession of the premises at the time of the accident. Present Ingraham, P. J., McLaughlin, Clarke, Scott and Dowling, JJ. Judgment and order reversed, new trial ordered, costs to appellants to abide event.
NICHOLAS GRUNZFELDER, Respondent, v. INTERBOROUGH RAPID TRANSIT COMPANY and MANHATTAN RAILWAY COMPANY, Appellants. Appeal from a judgment entered in the New York county clerk's office on the 11th day of May, 1910, awarding an injunction and damages.
PER CURIAM: On an examination of the facts of this case we are satisfied that the rental damage should be restricted to a period subsequent to the opening to the public of the subway, viz., June 10, 1905. The judgment is, therefore, modified by striking out the allowance for rental damage prior to that date and as modified affirmed, without costs. PresentIngraham, P. J., McLaughlin, Clarke, Scott and Dowling, JJ. Judgment modified as directed in opinion and as modified affirmed, without costs. Order to be settled on notice.
MARY MULDOON, Respondent, v. HENRY M. DAY, Defendant, Impleaded with JAMES W. BELL, JR., Sued Herein as JAMES BELL, Appellant.
Appeal from an order of the Special Term, entered in the New York county clerk's office on the 7th day of June, 1911.
PER CURIAM: Appeal from an order opening plaintiff's default in serving case on appeal and extending the time for such service. In our opinion it was an injudicious exercise of discretion to grant the order appealed from. The plaintiff was guilty of gross laches, which is entirely unex
First Department, July, 1911.
[Vol. 146. plained and unexcused. For this reason the motion should have been denied. (Gamble v. Lennon, 9 App. Div. 407; Martin v. McCurdy, 120 id. 665.) The respondent contents herself upon this appeal by advancing the untenable proposition that as the order appealed from is a discretionary one no appeal lies to this court. Counsel forgets that this court is a branch of the Supreme Court, and vested with the jurisdiction vested in the Supreme Court, and that in its appellate capacity it possesses, and not infrequently exercises, jurisdiction to review the discretion of the Special Term. This seems to us to be a case in which we ought to exercise that discretion. The order should be reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs. Present — Ingraham, P. J., McLaughlin, Clarke, Scott and Dowling, JJ. Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.
THE PEOPLE OF THE STATE OF NEW YORK ex rel. EUGENE T. LENAHAN, Relator, v. MAX S. GRIFENHAGEN, as Register of the County of New York, Respondent.
Certiorari — dismissal of county employee — charges — evidence. Certiorari issued out of the Supreme Court and attested on the 21st day of June, 1910, to review the dismissal of the relator.
PER CURIAM: The relator swears positively that he talked to respondent over the telephone, giving an excuse for his absences which, if truthful, would seem to have been sufficient. He also swears positively that on the day set for the hearing he again talked with respondent over the telephone, explaining why he could not appear at the hour fixed, and that he received a reply which justified him in believing that strict attendance on the hour fixed would not be required. The attempted denial of these allegations by the defendant is not effective. (Dahlstrom v. Gemunder, 198 N. Y. 453.) The allegations must, therefore, be taken as admitted. If the relator's explanation of the cause of his absence is true it is, at least, questionable whether or not he could lawfully have been removed therefor. (People ex rel. Mitchell v. Martin, 143 N. Y. 407.) Furthermore, the return shows that no evidence was taken by the respondent tending to sustain the charge. On the whole case, it does not appear that relator was afforded that opportunity to defend himself which the law requires, and for that reason his removal must be set aside. If there was in fact sufficient reason for his removal, he can be again put on trial and properly removed. It follows that the writ must be sustained and the relator reinstated, with ten dollars costs and disbursements. Present - Ingraham, P. J., McLaughlin, Clarke, Scott and Dowling, JJ. Writ sustained and relator reinstated, with ten dollars costs and disbursements. Order to be settled on notice.