3 Redf. 365 | N.Y. Sur. Ct. | 1878
While the surviving executor has, doubtless, intended to discharge properly the duties of his trust, there has been gross mismanagement, of the estate on the part of his co-executor. It is sought to hold the former liable for the loss occasioned thereby. His counsel seeks to shield him from
In Styles v. Guy (1 Macn. & Gord., 422), it was held that an executor would be answerable if he left the money for two years in the hands of a co-executor, where, by the terms of the trust, it ought to have been invested on proper security, and this, even where it consisted of a debt due from him to the testator. The court further held that it was the duty of the other executor to have recovered the debt from the defaulting executor, as from any other debtor to the estate, and it had been neglected to be done for a period of six years in that case. So in the case of Brice v. Stokes (11 Vesey, 319), the court held the liability of a trustee fixed, if he permit the money to remain in the hands of his co-trustee, however competent and responsible, longer than is necessary. In Egbert v. Butter (21 Beav., •560), it appeared that Warwick Hunt, Butter and Oxenham were appointed executors. Hunt was permitted by his co-executors to possess himself of the whole personal estate, without making any provision for an annuity to Egbert, the plaintiff, provided by
But here the executor seeks to escape from liability on the ground that Barker was considered an honest man, and a person of reputed wealth; that he confided in him, and believed his statement that the funds were properly invested. However these facts may tend to exonerate him from moral censure, the courts in England have held them otherwise insufficient. Sir John Romilly, Master of the Rolls, in Thompson v. Finch (22 Beav., 316), held that where money to be invested was in the hands of a co-trustee, and the defendant was told by him that the money was properly invested, when it was not, it was no justification; that it was his duty to see that the money was invested according to the trusts which he had undertaken to perform, and held him liable for the fund. Hynard, the defaulting executor, was a solicitor of great reputation, and universally respected, at the time he informed his co-executor he had the fund invested; and the Master of the Rolls says: “ Probably everybody
The cases of Sutherland v. Brush (7 Johns. Ch., 17), Manahan v. Gibbons (19 Johns., 109, 427), Brown’s Accounting (16 Abb. Pr., [N. S.], 457), and others cited by the executor’s counsel seem to me inapplicable to the facts of this case.
The interest on the Bowne mortgage and the taxes due and payable at the testator’s death were properly payable out of the estate, but after that any payments made by the executors on those accounts must be disallowed. Had the farm been devised to Alfred S. Bates for life, he, as life tenant, would have taken the. estate cum onere. It can make no difference that he was cestui que trust. The trustees, had they rented the farm, as was intended, should have first paid the interest and taxes out of the rents, issues and profits, and paid the residue to him. They had no right to pay them out of the general fund. I understand the rule to be that, when an annuity is given, the whole amount must be paid to the annuitant, free from taxes, charges and commissions; but when the use of a fund or property is given, it is subject to such charges. I assume that the Bowne mortgage was upon the homestead farm; but if it was upon the quarry farm, then the burthen of paying the interest,
From the account filed and the testimony, I find "that the executor has in his hands, irrespective of the half of the $6,000 fund and interest, $462.40, besides the $1,000 invested in the Gould mortgage, for the benefit of Mary Kellogg, with interest thereon since her death. Aside from this cash balance, in view of the authorities quoted, and not forgetting the fact that this applicant was, during most of the period since the death of Thomas Bates, a minor, I feel constrained, however reluctantly, to hold him liable for the share of the petitioner in the $3,000, with simple interest thereon, from the time of the death of Thomas Bates, and also his share of the $1,000 fund and simple interest thereon from the date of the death of Mary Kellogg, less his commissions. On the authority of Garniss v. Gardiner (1 Edw. Ch., 128), Ackerman v. Emott (4 Barb., 626), I must decline to charge the executor with compound interest. I am not unmindful of the rule adopted in King v. Talbot (40 N. Y., 76), but it was laid down in view of the facts of that case, which are very different from those existing here. The learned judge delivering the opinion declares that the rate of interest rests in a discretion that permits the consideration of all the circumstances. So, as to whether simple or compound interest shall be allowed rests, as I conceive, in a like discretion. No inflexible rule can safely be established to meet the exigences of every case.
As already stated, these executors were acting in a dual capacity. As to the homestead and the two funds
The result then is, that the executor is liable to the
A decree will be entered accordingly, without costs to either party as against the other, and without any allowance to the executor for services of attorney in this accounting, but the stenographer’s fees will be paid out of the estate.