270 A.D. 418 | N.Y. App. Div. | 1946
George Bausch, a resident of Onondaga County, died there January 3, 1929. He left a will dated August 10, 1928, with a codicil of September 9, 1928. The codicil named First Trust and Deposit Company of Syracuse (herein called Trust Company) executor and trustee. Decedent’s distributees were his widow and four adult children.
On January 9, 1929, the Trust Company filed a petition in the Surrogate’s Court of Onondaga County, seeking to probate the will and codicil. Three of the children filed objections to
By the terms of the compromise the Trust Company was directed to secure to the widow the use and occupancy of decedent’s residence in the city of Syracuse, for her life, with the right to use the income from the proceeds of its sale, if the house were sold, with her consent, before her death; to pay decedent’s debts, including the expenses of administration; to pay to one of his daughters $1,500; to pay to the widow during her life the income from decedent’s personal property; and, at the death of the widow, to sell the real estate, if it had not been previously sold, and then to divide among decedent’s four cMldren, in equal shares, all that remained of his estate, real and personal. To a considerable extent the compromise agreement followed the pattern of the will and codicil.
Subsequently the special guardian filed his report approving the compromise and the surrogate’s proposed order of approval subsequently made. On July 15, 1929, the surrogate made an order authorizing and directing the Trust Company, named as executor and trustee in decedent’s codicil to his will, to adjust, by compromise, the controversies of the different claimants to decedent’s estate, in the manner provided by the compromise agreement of April 29, 1929. He also directed the special guardian to adjust by compromise in similar manner. He approved the compromise agreement, and made it binding upon all those interested in decedent’s estate, whether known or unknown. He consolidated the proceeding for the probate of the will and codicil with the proceeding for the compromise, and decreed that in the event all the parties, including the Trust Company, stipulated that decedent was incompetent to make the will and codicil, a decree could be entered denying their probate, and directing the issuance of letters of administration
In 1930, with the consent of the-widow, the home which she and decedent had occupied, and of which she had the life use under the will, codicil and compromise agreement, was sold by the Trust Company. The latter filed an intermediate account of its proceedings as administrator and trustee in the Surrogate’s Court-of Onondaga County in 1931. This account was duly judicially settled by the Surrogate’s decree of March 3, 1931. Another intermediate account was similarly settled by the Surrogate’s decree of November 15, 1937.
In March, 1944, the widow died, leaving a will, which was admitted to probate and letters testamentary issued to her two executors. Thereafter, since, by the terms of the compromise agreement, the Trust Company was required, on her death, to distribute decedent’s property among her children, it began a proceeding in the Surrogate’s Court of Onondaga County, in which it-sought, finally, to account as administrator and trustee, to distribute in accordance with the agreement, and to be discharged. The four children and the executors of the widow appeared specially, raising the objection that the Surrogate’s Court of Onondaga County was without power to settle the account presented to it because the account was one of a trustee of a trust inter vivos.
Thereafter, by petition, the Trust Company began the instant proceeding in the Supreme Court of Onondaga County, by which
At the outset of any further discussion it is important to note that the Special Term did not refuse to remand the matter to the Surrogate’s Court of Onondaga County, on the theory that both that court and the Supreme Court had jurisdiction of the accounting, but solely because the Special Term reached the conclusion that the Surrogate’s Court of Onondaga County was without jurisdiction to make a final settlement of the Trust Company’s account.
Again, it is essential to keep in mind that the respondents herein do not question the jurisdiction of the Surrogate’s Court of Onondaga County when that court, in 1929, after a petition for the probate of decedent’s will and codicil had been filed with it, and objections had been made, and were to be made, in the probate proceedings, made the orders approving the compromise agreement, directing the Trust Company as executor named in tbe codicil, and the special guardian appointed by the surrogate, to make themselves parties to the compromise agreement, the decree denying the probate of the will and codicil, adjudging that Bausch died intestate, and appointing the Trust Company administrator of his estate, with directions to administer and settle the estate in accordance with the terms of the compromise agreement.
But that is not what this family did. The record which they made must be taken as it is found. They did not remove the decedent’s estate from the jurisdiction of the surrogate. On the contrary they left it under his jurisdiction to be administered, settled and distributed by the administrator, an officer of that court. Implicit in the very compromise agreement approved by the Surrogate was the impossibility of this fiduciary, so appointed by the surrogate, being finally discharged from the obligations imposed upon it by the order of the surrogate, until the death of the widow made possible a final distribution of decedent’s estate. Bearing in mind that the agreement approved by the surrogate contemplated the disposition of decedent’s property in accordance with the terms of that agreement,
From all that has already been stated it seems clear that the authorities upon which the respondents herein rest their case — Matter of Lyon (266 N. Y. 219); Matter of Miller (257 N. Y. 349); Tracy v. Danzinger (249 App. Div. 46; Matter of Kraetser (147 Misc. 609); Matter of Ihmsen (161 Misc. 789); Matter of Schroder (176 Misc. 1024) and Matter of Baruch (176 Misc. 344) are readily distinguishable. Of these authorities, Matter of Lyon (supra) is typical. There, a trust was created by a mother, of her own property, with her daughter as trustee. The mother died first. The daughter died some years later, without finally accounting for her stewardship. The sole question involved was whether the mother’s trust estate became a part of the daughter’s estate, to be administered by the daughter’s legal representatives. It was there held that section 40 of the Surrogate’s Court Act gave no jurisdiction to the Surrogate’s Court of the county in which the daughter’s will was probated to entertain an application made by two distributees of the mother’s estate to compel the executors of the daughter’s estate to account for the daughter’s conduct as trustee under the agreement made by the mother with the daughter. The basic reason for the decision was that the mother’s property was never held by the daughter in any capacity other than as trustee, so that, on the daughter’s death, the trust estate did not become any part of the daughter’s estate. The transactions involved were considered solely the affairs concerning a trustee and cestui que trust, and not in any sense the affairs of a decedent within the meaning of section 40 of the Surrogate’s Court Act. The essence of the decision is found in the last paragraph of the opinion which statesthat the allegations of the petition negative the idea of the existence of any affairs of a decedent in respect to this trust which the petitioners expressly set forth.” Hot so with the compromise here involved, which, from beginning to end, and indeed until the final distribution of the trust estate, relates solely to the affairs of a decedent.
Taking the foregoing view of the present situation, the conclusion seems proper that, both by section 40 and subdivision 13 of section 20 of the Surrogate’s Court Act, the surrogate
Passing, next, to the disposition of this appeal, attention has already been called to the fact that jurisdiction of this accounting was taken by the Supreme Court, not on the theory that both it and the Surrogate’s Court of Onondaga County had concurrent jurisdiction, but solely because the Special Term determined that the Surrogate’s Court did not have jurisdiction because it was an accounting by a trustee of an inter vivos trust. The conclusion having been reached, on the consideration of this appeal as herein indicated, that no matter what was the character of the trust created by the compromise approved by the surrogate, his jurisdiction continued until decedent’s estate was entirely distributed, the thought seems inescapable that jurisdiction was erroneously assumed, in this accounting proceeding, by the Supreme Court. That is so, whether the Supreme Court and the Surrogate’s Court of Onondaga County both have jurisdiction. The usual rule applicable to situations where two courts have concurrent jurisdiction, namely, that the first one assuming jurisdiction should retain it to the exclusion
The order, should be reversed on the law and as a matter of discretion, with $10 costs and disbursements payable out of the estate, and the motion should be granted, with $10 costs payable out of the estate, declining jurisdiction and remitting the proceeding to the Surrogate’s Court of Onondaga County to proceed with the accounting.
All concur. Present — Taylor, P. J., Harris, Larkin and Love, JJ.
Order reversed on the law and as a matter of discretion, with $10 costs and disbursements payable out of the estate, and motion granted, with $10 costs payable out of the estate, declining jurisdiction and remitting the matter to the Surrogate’s Court of Onondaga County to proceed with the accounting.