116 N.Y.S. 767 | N.Y. App. Div. | 1909
The question presented for decision on this appeal is whether the learned .surrogate Was right in surcharging" the account of thei temporary administrator'with $18,000 and interest thereon from the 11th day of May, 1895, as the amount received, or that should have been received, by him on the transfer to Charles F. Grant of. a seat in the Mew York Stock Exchange, which stood'in the name of the decedent. One of the contentions of the appellants is that the seat did not belong to the decedent, but was owned by a firm of. which lie was a member,, and that, therefore, the temporary-administrator is under no obligation to account' therefor. The decedendied on the 22d day of April, 1895, leaving a last will and tes tat ment. The probate of the will was contested, which delayed the issue of letters, testamentary until the 30th-day of Movember, 1895, when they were issued to Frederic Grant, a brother of-the testator, to whom the temporary letters had been issued. The decedent was a member of the firm of Grant Brothers,, composed of himself and' Frederic, his brother, and Frederic’s son, Charles F. Grant.', They conducted the business of stockbrokers, and were represented on the floor of the exchange by the decedent, and had- been- since ‘the formation of the firm ih 1891. Prior to that time the firm* had been composed of the two brothers only. Since 1877 the decedent was also the representative of the former firm on the floor of' the exchange, lr appears from the evidence that the Stock Exchange was organized in 1869 by the consolidation of the government (or gold) board of stockbrokers and the open board of stockbrokers
The evidence upon which the question as to whether this seat was a partnership asset or the individual property of the decedent depends is quite unsatisfactory, owing to the fact that the partnership agreement evidently was not in writing and to the disqualification of the surviving partners to testify ; but it would seem that further evidence might have been given. It does appear, however, that the profits of the firm consisted of charges or commissions on the purchases and sales of stock made on the Stock Exchange for the firm by" the decedent, and interest on loans to customers ; that the commissions were not received by the decedent, but by the firm, and the firm paid the assessments levied by the Stock Exchange against the members upon the death of a fellow-member, and such assessments were charged to the expense account of the firm. It appears that dues were paid to the New York Stock Exchange on account of this seat from the 1st day of January, 1877, to the 1st day of May, 1895, aggregating $3,000. It does not clearly appear whether there were dues in addition to the assessments upon the death of members, nor does it clearly appear whether the $3,000 paid to the New York Stock Exchange, said to have -been paid for dues, embraced the assessments levied on account of the death of members. If there were dues, as distinguished from assessments in this regard, it does not appear that the firm paid them. If the evidence be sufficient to warrant an inference one way or the other, I should say that it is to be inferred that the firm paid all charges made on account of this seat during its existence. There is other evidence tending to show that the seat was regarded
The Stock Exchange recognizes the survivorship of the- right to a seat therein after the death of a member to the extent that it is provided by rules that the seat may be sold by the committee on admissions and the proceeds of the sale shall be applied in the first-instance to the payment of obligations, if any, owing by tlie decedent to fellow-members of the exchange, and tl'ie surplus, if any, shall be paid! to the personal representatives of the -decedent, and evidently in tlie sale of the seat it reserves -the right to pass upon the membership of tlie purchaser. The decedent owed no- obligations to his fellow-members of the exchange,, and the Stock Exchange, therefore, did -not proceed to sell the seat. The surviving members of the firm, claiming the seat as a firm asset, were desirous of having one of their members elected, and of having the seat transferred to his name by the Stock Exchange. It Was evident, however, that, under the rules of the Stock Exchange, this .could not be done without a receipt by the administrator of the decedent, showing a sale and transfer of the seat -by him and the receipt of the full consideration, the object of which was to have no liens -upon dr claim against the seat in the name of the new member: The issuance of letters testamentary having been delayed as. stated,. Frederic Grant, on the advice of counsel, presented a. petition to the Surrogate’s Court for his appointment as temporary administrator for the purpose of executing a receipt that would enable the firm to have the seat transferred upon- the books of the exchange to the name of li-is sou, who was the other member -of -the firm; In his. petition, these facts were set forth, and it was stated that the- seat
“New York, May 11th, 1895.
“I, Frederic Grant, as temporary administrator of the- estate of ■ James- Grant, deceased, hereby acknowledge the receipt 'from Charles F. Grant of the sum of Eighteen thousand dollars, being the amount in full payment for the transfer of the membership in the Mew York Stock Exchange of said Grant, deceased, to said Charles F. Grant, in consideration of which I hereby relinquish all the right, title and interest of said James Grant as a member of the Mew York Stock Exchange. '
“(Seal). $18,000. (Signed) FREDERIC GRANT,
“ as Temporary administrator of the estate of James Grant, deceased.
“ Witness J. C. Burns—Correct—William L. Bull, Chairman.”
Mo part of the $18,000 ivas received by the temporary administrator. It appears, however, that the firm, acting under the advice of counsel — the significance of which it is difficult to appreciate — drew a check to the order of Charles F. Grant upon its own bank account for $18,000, which, according to the testimony of Frederic Grant, he indorsed, but, according to his own testimony, he did not, and it ivas then stamped for deposit by the firm and delivered to the bank, a more bookkeeping entry being made concerning the same,
I am, therefore, of opinion that the decree should be modified, with one bill of costs to appellants, by striking out the provision thereof surcharging the account of the temporary administrator on account of the sale of the seat in the Stock Exchange and remitting the matter to the Surrogate’s Court for a further hearing, and that further proceedings on the accounting be stayed until the final determination of the action pending between the trustee and the temporary administrator and executor, with leave to either party to bring on the accounting after such final determination of the issues in said action.
Patterson, P. J., Ingraham, McLaughlin and Clarke, JJ.,. concurred.
Decree modified as stated in opinion, with one bill of costs to the appellants. Settle order on notice.
Upon a motion for reargument an opinion was handed down June 4, 1909, with appearances as follows:
Charles Edward Souther, Clarence Edwards and Richard O’Gorman, for the appellants.
Arthur L. Marvin, for the respondent Annie Grant and others.
William Lloyd Kitchel, for the respondent Irey and others.
Laughlin, J.:
The appeals herein were submitted on the 22d day of April, 1909, and an opinion of the court deciding the same was handed down on
We were of opinion that there should be a. rehearing on the: facts with respect to, the ownership: of the. seat or membership in the Stock Exchange, and we assigned as an additional ground the pendency of the action shown by the record to have been brought to determine the ownership of the fund' in court which was the proceeds of the sale of the Stock Exchange membership or seat in question. On the point made1 on the motion for reargument, to tlie-effect that the court overlooked the principie by which it is the duty of an administrator to state in his accounts any and all property which-comes to his knowledge, and the O.ode provisions.and decisions of the courts to. that effect, and that “ This principle, if applied, to the facts of this case, would have required the administrator to list in liis accounts the interest of James .Grant and the partnership of Grant Brothers, which interest, upon the testimony "of the appellants, was twenty-five per cent,” it .is sufficient to observe that on the hearing on the first reference the counsel who now makes this claim expressly withdrew the objection which he had filed to the-account of the temporary administrator for his failure to account for the-interest of." the. decedent, in the -copartnership, and expressly confined Ms objection, arid stated that he-was acting in this -regard fox all óf the
The direction in the original opinion for a stay of proceedings until a final determination of that action cannot prejudice the respondents if, as they claim, the action has already been finally determined, for they will be at liberty to move the court to proceed with the rehearing without delay.
It follows, therefore, .that the motion for reargument should be denied, with ten dollars costs.
Patterson, P. J., Ingraham, McLaughlin and Clarke, JJ., concurred.
Motion denied, with ten dollars costs.