22 Misc. 494 | N.Y. Sur. Ct. | 1898
David Whiting died in March, 1872, leaving a last will and testament, which was admitted to probate by the surrogate of Greene county, April 10, 1872. Two of the executors named in the will, namely, Hiram Macy and John B. Whitbeck, qualified. The third executor, George Titus, failed to qualify. The testator left him surviving, his widow, Anna Whiting, and seven children, viz..: David T. Whiting, John F. Whiting, Addison E. Whiting, Ann Louisa. Case, Armenia Whiting, Etta Whiting and Ira C. Whiting.
The will states that certain real estate having been conveyed to Ira C. Whiting, no provision is made for him. Armenia Whiting married since the date of the will, and is known in this proceeding as Armenia Wakeman. A portion of the real estate
Hiram Macy, one of the executors, died in May, 1884, and John 13. Whitbeck has continued to act as sole surviving executor and trustee under the will.
At the time of her father’s death Etta Whiting was a minor. While she was yet a minor, the executor', John B. Whitbeck,' loaned $1,500 out of her share of her father’s estate to her brother, David T. Whiting, who gave back his note which reads as follows:
“ State of Illinois, Chicago, May 13, 1873.
“ On demand for value received I promise to pay Etta Whiting, or order, $1,500 with interest from date at eight (8) per cent, per annum.
“ David T. Whiting
On the back of the note the following words are written.
“ Chicago, May 13, 1873. Mr. J. B. Whitbeck: Please pay to the order of. Etta. Whiting, fifteen hundred dollars with interest at 8 per cent, from date at the final settlement of the estate of David Whiting, deceased, unless sooner redeemed. The above order is to secure this note.
“ David T. Wiiiting.”
Mr. Whitbeck delivered this note with the order indorsed on it to Etta, and at the same time told her that he had let David T. have $1,500 out of her interest in her father’s estate; that David T. had given his note as security and that she would be paid at the final settlement of the estate without fear of any loss. Erom what appears in the evidence the Avords “ final settlement of the estate” evidently refers to the settlement that would be made after the death of the testator’s widow. This $1,500 was charged to Etta in the accounts of the executor filed in this court in 1885.
The delivery of this note to Etta with the order on Whit-heck operated as an assignment pro tanto of David T. Whiting’s interest in his father’s estate and the knowledge and notice which Whitbeck had of this note and order made it binding on him to pay the same when due to the payee and to no one else. Brill v. Tuttle, 81 N. Y. 454; Lauer v. Dunn, 115 id. 405, 409.
A judicial settlement of the account of the executor was had in 1885. Personal service of the citation to attend this accounting was made on all the legatees, including the executor of Hiram Macy, deceased. The executor appeared by counsel and'the legatees appeared by counsel. No personal appearance was made by Etta Whiting nor was the note she held against David T. presented for payment in this proceeding. No information reached her counsel that she held such a note. At llie time of this accounting Etta was of full age. Oh the 21st day of September, 1885, a decree was entered judicially settling the..account of John B. Whitbeck and Hiram Macy, executors of and trustees under the will of David Whiting, d& ceased, and of John B. Whitbeck as survivor of said executors and trustees. In the summary of the account included in the de
“ And it appearing that on the 15th da.y of June, 1873, at Chicago, in the State of Illinois, the said John B. Whitbeck advanced to the said David T. Whiting the sum of $2,000 upon his promissory note dated on that day at Chicago aforesaid for $2,000, payable five years from the date thereof, with interest thereon at the rate of 8 per cent., payable semi-annually, secured by a transfer and pledge of his share and interest in the estate of David Whiting, deceased, and upon which there was paid May 28, 1875, the sum of $110 and July 12, 1877, the .sum of $100; and that thereafter and on the 1st day of February, 1876, the said executors and trustees, John B. Whitbeck .and ITiram Macy at Geneva, in the State of Wisconsin, out of the funds of the estate of the said David Whiting, deceased, advanced to said David T. Whiting a further sum of $1,750, upon his certain other promissory note in' -writing, dated on that day at Geneva, aforesaid, for $1,750 payable on demand, with interest at the rate of 10 per cent, per annum secured by a
There were no moneys on hand ready to be distributed at the time this decree was made, and no provision for distribution ■was made except the provision for the executor Whitbeck to retain in his hands sufficient funds of the estate and of the shares of the legatees to whom advancements had been made over and above what, had been received. In fact there is nothing attempted to be done in the decree except the settlement of the executor’s account. The widow of David Whiting died August 4, 1894, and the surviving executor now asks that his account as executor and trustee be settled and a distribution made of the funds in his hands.
In this proceeding Etta Whiting produces her note and the order indorsed thereon made by David T. Whiting and asks that it be paid as a first lien on the share of David T.
There are two adjudications made.by a surrogate in the settlement of an estate; one is an adjudication on the.settlement of the executors’ or administrator’s account; another is on the distribution of the funds of the estate. The questions arising
A decree settling an executor’s account is conclusive only in regard to the facts specified in the statute. Section 2742/ Code of Civil Procedure, provides that a judicial settlement of an executor’s account by a decree “ is conclusive evidence against all the parties who were duly cited or appeared, and all persons deriving titles from any of them at any time, of the following facts, and no others:
“ 1. That the items allowed to the accounting party, for money paid to creditors, legatees, and next of kin, for necessary expenses and for his services are correct.
“ 2. That the interest charged to the accounting party and embraced in his account is all for which he is legally accountable.
■ “ 3. That the money charged to the accounting party as collected is all that was collectible, at the time of the settlement on the debts stated in the account.
" 4. That the allowances made to the accounting party for the decrease and the charges against him for the increase in the value of property were correctly made.”
• It is evident that the decree made in 1885 is not a bar to Etta’s claim unless it is embraced within the first subdivision of the above section. No objection was raised on the former accounting and none is raised on.this to the correctness of the items allowed to the executor for the money paid to the legatees, including the advances to David T. The decree does not attempt to determine the amount of David T.’s share nor what portion, if any, of his share belongs to others. The rights of assignees of legatees can only be ascertained and determined when an executor has money in his hands ready for distribu
There is no provision in section 2742 for the distribution of any portion of the estate or for the determination of the rights, of the respective parties as individuals between each other.. Section 2743 is the only one that provides for the distribution' of the funds of the estate and for the settlement of the rights, of the parties unless we except the general power given in section 2472. By section 2743 when an account is judicially settled “ and any part, of the estate remains and is ready to b& distributed to the creditors, legatees, next of kin, husband or wife of the decedent, or their assigns, the decree must direct the payment and distribution thereof to the persons so entitled according to their respective rights.” This is the first and only accounting in which any of the funds of the estate have been'ready to be distributed. How, then, can I forbid Etta, as assignee of David T., from coming in and asking, that she be paid the share of David T., out of any portion of the estate
My attention has been called to section 2812 of the Code of Civil Procedure. It is claimed that on. an accounting by a trustee the rule is different from what it is on an accounting by an executor. But section 2811 makes section 2743 applicable to an accounting by a trustee. .Besides the account settled in 1885 principally relates to the account of the executor. All that portion of the decree, then made, which relates to the payments made to the legatees, including the advances to David 'T., is in settlement of the executor’s account, with which the trustee as such has nothing to do.
It would be misleading to reason from an ordinary judgment in a court of record to that of a decree in a Surrogate’s Court. Not all matters which could have been litigated upon an accounting and settled in a surrogate’s decree are barred from being put in issue on a subsequent accounting.
In Van Rensselaer v. Van Rensselaer, 113 N. Y. 207, the executor had had a. judicial settlement of his account. Upon that accounting, against the objection of a. legatee, the executor was allowed to exclude from his account the proceeds of farm sales and the account was settled without regard thereto. No appeal was taken from the decree. Held, that the decree of the surrogate upon such settlement was no bar to an action to recover a legacy charged upon the proceeds of the sale of a farm. The same objection was urged in that' case as is urged in this proceeding, namely, that the decree was conclusive upon the issues raised in the action. The court says (p. 214), “That decree lias no effect upon what was not involved in the settlement.” The Code of Civil Procedure' (sec. 2742) provides “ upon what facts the judicial settlóment of an executor’s account shall be conclusive and- expressly excludes all others.” Many matters which might have been included in an account
The force and effect of a surrogate’s decree made upon the j udicial settlement of the account of an executor or administrator is well considered in Bank of Poughkeepsie v. Hasbrouck, 2 Seld. 216. The facts of that case-bear a close resemblance to those of the one in hand. The above case was decided while the provisions of the Revised Statutes in relation to the settlement of executors’ and administrators’ accounts were in force. But for all the "purposes of the question arising in this proceeding there is no practical difference between the Revised Statutes and the Code of Civil Procedure. In the bank case the question was between the assignee of a creditor and the administrator, here it is between the assignee of a legatee and the executor. In both cases the executor and administrator claimed as individuals to be entitled to the fund. The bank was transferee of a note made by the testator. The administrators advertised for creditors to present claims. The payee mentioned in the note presented a claim for the note, the bank did not. The administrators had no knowledge that the bank was the •owner of the note. In the case in hand, Whitbeck, one of the executors, had knowledge of the assignment to Etta. The administrators made partial payment on the note, and finally one of the administrators became the owner of the note. In this respect this case tallies with the one in hand, except that when payments were made by Whitbeck to David T., he had knowledge of the assignment to Etta. After the expiration of eighteen months the administrators of the deceased maker of the note had a judicial settlement of their account. The bank had legal notice of this proceeding. The payee of the note appeared in the proceeding, but the bank did not. The payee stated that the note had been, mislaid so that he could not produce it. In the final account the note was credited to the defendant, who was one of the administrators, and the decree directed-that the creditors should be paid at the rate of sixty cents on the dollar.
So, here, it is claimed that Etta was negligent in not presenting her claim at the time of the former accounting;'but whether she was or not, the statute gives the surrogate the power to decide who are entitled to the fund in a decree for the distribution of the funds then on hand. It was said in the bank case that the fact that the payee did not present the note was a suspicious circumstance and should have put the administrators on inquiry. Still stronger is the present case, for Whitbeclc had actual knowledge of the assignment to Etta, and that to the extent of her interest in David T.’s share the latter had no right to assign his share. Any advancement therefor made by the executors would be at their individual risk.
In Sheldon v. Sheldon, 33 N. Y. St. Repr. 154, the plaintiff held a claim against her husband’s estate. In 1883 there was a judicial-settlement of the executor’s account, to- which proceeding the plaintiff was a party. A decree for the distribution of the funds then in hand was made. No provision for the payment of the widow’s claim was made. In an action subsequently brought by the widow for an accounting by the executor it was held that the surrogate’s decree was conclusive only so far as it went. It did not prevent the widow from sharing in any future assets when ready for distribution. This casé
The conclusion is that the decree made in 1885 is not a bar to Etta’s claim. Her right to be paid first out of David T.’s share depends upon the question whether she has a superior right to it. It is /conceded that her claim has priority in date, and the proof is that Whitbeck had knowledge of the assignment made to her, before either of the advances by him had been made to David T. The- direction is, therefore, given that she be paid first out of David T.’s share.
Decreed accordingly.