In Re the Estate of Callahan

| NY | Mar 23, 1897

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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The sole question on this appeal relates to the jurisdiction of the surrogate to adjudge, on the accounting of the executrix of John Callahan, the payment of the claim of Louisa Leach out of the estate. The claim was based upon his refusal to complete his purchase of the house and lot No. 681 Eleventh avenue in the city of New York, made at public auction on the 4th day of December, 1889. The direction for the payment of the claim is contained in the decree of the surrogate, made on the final settlement of the accounts of the executrix. The power and duty of a surrogate to adjudge the payment of debts of the decedent, on the settlement of the accounts of an executor or administrator, is defined in section 2743 of the Code of Civil Procedure. It was provided in that section, as it stood when the decree was rendered, as follows: "Where the validity of a debt, claim or distributive share is not disputed, or has been established, the decree must determine to whom it is payable, the sum to be paid by reason thereof, and all other questions concerning the same." It is only where a claim is not disputed, or has become established so as to preclude a denial of its validity, that the jurisdiction of a surrogate to decree its payment attaches. The statute incorporates the rule, which had been settled by numerous decisions, that the power of a Surrogate's Court did not extend to the trial or determination of disputed claims against the estate of a decedent. (McNulty v. Hurd, 72 N.Y. 520, and cases cited.) In this case the executrix, in her account, disputed the claim in question in explicit language. The surrogate, therefore, had no jurisdiction to proceed and adjudge its payment, unless the claim had become an established liability, so that it was no longer open to dispute or contest. The decree of the surrogate proceeded upon the ground that the claim had become indisputable. The only fact upon which the surrogate relied to support this conclusion was that after the claim was presented to the executrix on the 20th day of April, 1891, she made no sign, neither rejecting nor expressly admitting it, but maintained an absolute silence in respect to it for the period of nine months, and up to the time when, upon the application of the claimant, she was cited to render an account. The silence of the executrix for so long a period was regarded as an admission of the justice of the claim, which she could not afterwards dispute. Her silence was, in view of the circumstances, much more consistent with an intention to disregard the claim, than to admit it. She had defended the suit brought for its enforcement, and in her verified answer had denied its validity. That action was discontinued by the plaintiff and was followed by another brought against the auctioneers to recover the ten per cent of the purchase money paid to them by the testator on the sale, and which (as is inferable) was defended in the interest of the executrix. The claimant having failed to secure payment of her claim in these litigations, then presented her claim to the executrix and served the notice of April 20th, 1891. It is very difficult to believe that the subsequent silence of the executrix was referable to an intention on her part to abandon her resistance to the claim, which had been in active litigation for years. The decree in this case is an example of the danger to which estates of decedents may be subjected, if the silence of an executor or an administrator, after presentation of a claim and the lapse of a reasonable time, concludes the representative from contesting its validity.

As between parties acting in their own right, the delivery by a creditor to a debtor of a claim in favor of the former, followed by the silence of the latter, may, under circumstances, establish an account stated. But the admission implied from silence in that case constitutes prima facie evidence only of the correctness of the claim. The burden of proof may be changed, but it is still open to the debtor to contest its validity. (Lockwood v. Thorne, 18 N.Y. 285" court="NY" date_filed="1858-12-05" href="https://app.midpage.ai/document/lockwood-v--thorne-3603501?utm_source=webapp" opinion_id="3603501">18 N.Y. 285.) The surrogate applied as against the executrix a much more stringent rule, and held her concluded by her silence. We had occasion to consider this general subject in the case of Schutz v. Morette (146 N.Y. 137" court="NY" date_filed="1895-05-21" href="https://app.midpage.ai/document/schutz-v--morette-3601300?utm_source=webapp" opinion_id="3601300">146 N.Y. 137), and we are of opinion that mere silence on the part of an executor or administrator after the presentation of a claim under the statute, accompanied by lapse of time, will not in any case preclude the representative from thereafter contesting its validity. If the claim is not rejected, and on an accounting no objection is taken to its allowance, then the surrogate would be authorized to treat it as an admitted claim and direct its payment. But the claim does not become established from mere silence of the executor or administrator.

It is insisted that the executrix, in her answer to the petition of the claimant for a citation requiring the executrix to render an account, did not in direct terms deny the claim of the petitioner. We think there was a substantial denial in the answer that the petitioner had any valid claim against the estate. It certainly was not admitted, and the direct denial on the accounting of the existence of a claim raised in due time the jurisdictional question.

Our conclusion is that the part of the decree of the surrogate which directed the payment of the claim in question, and awarded costs to the claimant, was erroneous.

The judgment of the General Term and the decree of the surrogate should be reversed, with costs to the appellant, and the case remitted to the Surrogate's Court, with directions to suspend the entry of any decree in the accounting proceeding ordering the payment of the claim of the petitioner, until she shall have established it before a competent tribunal.

All concur, except MARTIN, J., absent.

Judgment reversed.