59 N.Y.S. 656 | N.Y. Sup. Ct. | 1899
'This is an application for an order confirming the report of a referee taking and stating the account of ah assignee, as modified to conform to the exceptions filed by the respective parties interested in the proceeding. The brevity of the referee’s report, and the failure to make and state consecutive specific findings of fact and conclusions of law upon many claims and items of the account objected to, render necessary a careful examination of the long record and the voluminous papers which have been filed. Perhaps the most important objection filed to the account was that contained upon pages 47, 48 and 133 of the testimony, wherein it was sought to charge the -assignee with the difference between the value of the estate as actually stated in the inventory filed by the assignor and the amount realized by him upon the auction sale of the assets. Upon this question the referee has briefly passed, by finding that the moneys received by the said assignee from the sale of the'property owned by the assignor were all that it was fairly and reasonably worth, and that the sales were made at public auction and in accordance' with the .rules and practice of this court. Whatever its legal significance,
The claim asserted by Keith and another as executrices, etc., was, despite the great doubts concerning the nature thereof in the earlier part of the record, evidently for the Use and occupation by the assignee subsequent to the assignment of the premises previously tenanted by the assignor. There is sharp controversy in the record as to the existence of an agreement between the landlord and the assignee for the use and occupation of the premises and of the nature and extent and the terms thereof. The extent of the occupation, of the premises by the assignee, - which is material because of the basis upon which the claim was finally founded, was also the subject of much controversy upon the accounting. In view of the failure of the referee to make specific, findings of fact and conclusions of law upon the specific question of - the absence or existence of the express agreement for the use and occupation of the premises enhances the difficulty of a determination of an allowance of this claim. It at least appears, however, from the record, and as stated in the report, that the assignee, subsequent to the assignment, took possession of the premises-previously occupied by the assignor, with the knowledge and consent of the landlords, who were also acquainted with the existence of the trust, and that he subsequently occupied a part of the premises to which the landlords had at all times actual access for two months, subsequent to- the assignment. The theory upon which the claim was allowed, and upon which a preference was awarded thereto, was either evidently that it. was'one of the expenses of the administration of the trust, directed to be paid by the deed of assignment,, or that the claimant thereon was subrogated to any rights which the assignee acquired by reason of his expenditures or liabilities incurred for the benefit of the estate; It was, if anything, it must be conceded, an expense incurred in the administration of the assigned estate by the assignee subsequent to the assignment, for which the assignee made no payment, and for which he asked no allowance in his -account, and which he. strenuously opposes on this motion. The conclusion of the referee seems inconsistent with the statement' of the law made in Noyes v. Blakeman, 6 N. Y. 577, and in Austin v. Munro, 47 N. Y. 360,
It is an assignee’s duty to protect, preserve and convert the assigned property, and without neglecting' his trust duties may engage help, incur liability and make proper, reasonable and necessary expenditures for that purpose, for which he will be allowed on his accounting. “ It is undoubtedly true- as a general rule, that where a trustee employs agents in the execution of his trust, they are to look to him individually, and have no lien upon the trust fund for their compensation. If he is in funds he is bound to protect the estate, in which case he has no lien, and, consequently cannot assign any, having none to assign.” Noyes v. Blakeman, 6 N. Y. 580.
To this there is an exception, “ being without funds, and a necessity arising for expenditures in order to protect the estate from spoliation, he may either make them himself, and be allowed for them in the passing of his accounts, or may engage others to do it upon the credit of The fund, reserving- to himself the samé management and direction as in any other case, and thus avoid' the objection that he delegated his trust.” Noyes v. Blakeman, supra, p. 580. See Bishop on Insolvent Debtors (2d edi), p. 872, who adds to the above language the words,. “ in which case he shall bind the trust property by his contract.” The present case does not seem to fall within this exception, because it clearly appears from the record that the premises were necessarily used really for storage purposes only, and it would have been possible for, and it was within the contemplation of, the assignee to secure premises for the storage and preservation of the property of the assigned estate at a much lower rental than is here sought to be charged, within a few doors of the premises occupied by him, and there is no direct evidence that he did not have funds, either in the shape of cash on hand, the proceeds of accounts '.collected by him," or sales made by him, to bind the estate for the expenditures necessary for its presérvation.
The case of Thomson v. Smith, 64 N. H. 412, states that, “An administrator cannot bind the estate by an executory contract, nor create a liability not founded npon the contract or obligation of his intestate. But relief may, in proper case, be given in equity, by applying funds of the estate to the discharge of an obligation entered into, in good faith, by the ad: ministrator on behalf of the estate, no other remedy being open to the plaintiff.” The claimants herein, however, have succesfully asserted their claim for the value of the use and occupation of the premises by the assignee after the assignment, against him personally, and have recovered a judgment therefor; if any equitable considerations exist for the allowance thereof against the trust fund of the estate herein, they must fairly be regarded as those arising from the condition pointed out in Noyes v. Blakeman, ■Hupra, and above stated, and which, it is shown above, do. not exist.. It seems to me, therefore, for the above reasons, and in view of the authorities already and below cited, that claimants must be referred, as they have themselves chosen, to their remedy against the assignee for the use and occupation,- by his own responsibility, of their premises subsequent to the assignment-; and that-the claim presented therefor should not be allowed-as a general or preferred claim against the estate assigned herein. See Ferrin v. Myrick, 41 N. Y. 315 (p. 322); New v. Nicoll, 73 N. Y. 127. (p. 131); Barry v. Lambert, 98 N. Y. 309; Caulkins v. Bolton, 98, N. Y. 516; Schmittler v. Simon, 101 N. Y. 558; Blood v. Kane,
Exception is also made to the allowance by the referee of the claim of the city of Eew York to personal taxes due to it from the assignor, with interest, for his defaults in payment within the statutory time. It seems to be the settled‘law of this State—- and has been, accordingly, the uniform practice of this court — to award a preference to such claims over all others in the distribution of insolvent estates, and the exception to the allowance of said claim and of a preference therefor must be overruled; and the-said claim is entitled to a preference in payment before all others presented herein, after the deduction from the balance in the hands of the assignee of the costs and expenses of this accounting. See Matter of Columbian Ins. Co., 3 Abb. Ct. App. Dec. 239; Central Trust Co. v. N. Y. C. & N. R. R. Co., 110 N. Y. 250 (p. 258); In re Welsbach Incand. Light Co., N. Y. Law Journal, January 24, 1894; People v. Man. Trust Co., N. Y. Law Journal, June 17, 1890; In re Blight, N. Y. Law Journal, September 9, 1896.
For the foregoing reasons the report of the referee, with the exception of the allowance of the claim of Keith et al., as executrices, aud of a preference therefpr, should be, and is hereby, confirmed.
Ordered accordingly.