54 Misc. 79 | N.Y. Sup. Ct. | 1907
This action is brought by the above surety company, the surety upon the official bond of Michael J. Moran, administrator of the estate of John W. Moran, to compel, among other things, an accounting of the acts and deeds of said Michael J. Moran, a determination of its liability, if any, and its discharge. John W. Moran in his lifetime was in the blue stone business which, on his decease.
This motion has been made in behalf of the Hudson River Blue Stone Company, a creditor of the blue stone business conducted by Michael J. Moran, as administrator, to be made a party to this action. The indebtedness upon which the Hudson River Company bases its claim arose and was incurred since the death of John W. Moran.
In Williams v. Sharp, 113 N. Y. 586; 115 id. 396, it was held, regarding an insolvent executor, that, if he continued a business pursuant to the authority of the will, the fund invested in the business would be subject to the trade debts; but that the entire estate would be liable if the will directed in clear terms the investment and use of the general assets. Creditors of the business, however, prior to the death of the testator, could not be postponed or bound by any direction to continue and carry on the business; although, if a profit were the result of the continuance, it should first be applied to the debts incurred in the successful enterprise of the executor.
These are the general rules expressed in the above case and can readily be applied to the case of an insolvent administrator.
If, for instance, he continue a business at a Toss, the loss falls upon him individually and not upon the assets or the estate; but, if his work result in a profit, while this increase would go to the benefit, of the estate or its creditors, yet it should in equity first be used in paying -those debts incurred in carrying on the business and swelling the assets.
Again, if the business were continued by the administrator at the request and upon the consent of all parties interested, creditors and next of kin, then, certainly, the funds of the estate thus ventured in the trade or invested in the business should, in equity, be first applied to pay the debts incurred by the venture, if the administrator prove to be insolvent.
The fact that a receiver is custodian of these trade funds, or that the surety company plaintiff may not be liable to creditors like the petitioner, in no way affects the question; as, in an accounting, others may have rights in equity besides the plaintiff.
Petitioner’s motion to intervene and become a party granted.
Motion granted.