88 A.D. 52 | N.Y. App. Div. | 1903
William L. Hunt died in October, 1890, leaving a last will and testament, with a codicil, which was duly proved in Queens county, and letters testamentary were granted to his nominees as executors, his widow, Elizabeth P. Hunt, and two sons, Joseph G. Hunt and Richard L. Hunt. These executors duly qualified, and subsequently caused an inventory and appraisal of the personal estate, which consisted of three items, to be made. These were- a bond and mortgage of Wright Gillies and Henry Seggermann to William L. Hunt, dated March, 31, 1869, made to secure payment of $20,000; a note of Elbert D. Smith and George G. Smith for $200, and a bank account in the Metropolitan Savings Bank, bank book No. 56,869, of $1,652.12. The will directed the payment of certain specific legacies, aggregating $9,000, and the residue was directed to be invested for the use of testator’s widow, Elizabeth P. Hunt, during her life and after her death this fund was bequeathed to the testator’s children and grandchildren, the objector; Franklin B. Hunt, being given one-sixth. It appears that immediately after- the filing of the inventory and appraisal, Joseph G. Hunt, one of the executors, with the knowledge and consent of his coexecutors, took possession of the personal property mentioned in the same, and entered upon the duties of acting executor of the estate, transacting all of the business in relation thereto. It is not disputed that the said Joseph G. Hunt, while so in possession of the securities and property of the estate, collected $15,800 of the bond and mortgage, using a considerable portion of the same for his own purposes, and for the payment of principal and interest upon a certain mortgage upon real estate owned by himself, the present sole surviving executor and others as tenants in common, as well as in the construction of a certain barn upon such premises, and in other ways disposed of the trust estate. It is also admitted that the fund in the savings bank had been withdrawn and disposed of by the said Joseph G. Hunt, and upon the death of the latter in 1895 it was found that
The appellant urges that the fact that the surviving executor knew that Joseph Gr. Hunt was “ hard up,” and that while in that condition he purchased a new house, was sufficient to put the coexecutor upon inquiry, and that a failure to look into the affairs of the estate constituted such a degree of negligence as to charge him with responsibility for the misappropriation of the trust fund. The learned surrogate finds' the facts to the contrary, and were this the only difficulty' in the case we should have no hesitation in affirming the decree. As we view the matter, however, the appellant’s rights in the matter now before us rest upon another ground. The learned surrogate finds as a fact, not only that Joseph Gr. Hunt, Elizabeth P. Hunt and Richard L. Hunt were appointed executors and qualified, but that they caused an inventory and appraisal of the personal property in their possession to be made, and that the investments mentioned in said inventory were made by the testator in his lifetime and continued by his executors after his death, and that “Joseph Gr. Hunt, one of said. executors, took possession of the bond and mortgage, note and bank book above mentioned, and retained exclusive possession of them until his death on November 23, 1895, with the knowledge and consent of his co-executors.” This brings the surviving executor under the rule of law that where the property, the funds, the assets of the estate have once come into the joint control or the joint possession of the trustees, it is the duty of each trustee to see to it that the fund does not go out from under his control or possession; excepting as it is applied to the fulfillment of the trust. (Bruen v. Gillet, 115 N. Y. 10, 14, and authorities cited.) This is not the case of a mere passive executor or trustee, who permits his coexecutor to collect the debts due to the estate. In such a case the rule is undoubted that in the absence of evidence tending to show that the executor or trustee has been guilty of negligence in not taking notice of matters which should arouse his suspicions, he is not liable for the waste or misappropriation of the funds by his coexecutor; but where the funds or property is actually within the control or possession of the executors or trustees jointly, the trustees. assume the responsibility for its proper appropriation, and this duty cannot be avoided by turning
This being the law of the case now before us, it follows that it was not necessary that the learned surrogate should find that the. surviving executor knew or that he ought to have known of the misappropriationit was his. duty to see that the funds over which, he had acquired dominion were used to carry out the purposes of the trust. As was said by the court in Matter of Myers (131 N. Y., 409, 420): “ Thé executors.- were all properly charged with liability to account for and pay over the. income of the trust estate, under the proofs in this. case. They all qualified; they all united in causing the inventory to be made; they must all have known of the-condition of the estate as disclosed by the inventory; two of them certainly , had actual knowledge of the use which was made of the property; if the others did not know, they could have known by the exercise of ordinary care and vigilance that the funds had been-diverted from the usual. course of trust investments and were employed in the business of the new firm.” This was practically the, situation in the matter now before us, and, in so far as the appellant is concerned, there can be-no doubt of his right to. the full amount which would have been due to him had the respondent discharged his duty and refused to allow the trust fund to pass from his control, except in.discharge of the duties imposed by the trust.
The decree should be reversed and sent back to the Surrogate’s Court for readjustment in accord with this opinion.
Goodrich, P. J., Jerks and Hooker, JJ., concurred ; Bartlett,. J., dissented on the ground that there is no, evidence that the property ever actually came into the possession of the executors sought to be charged in this proceeding.
Decree of the Surrogate’s Court of Queens county reversed and-the matter remitted to said court for disposition in accordance with' the opinion of Woodward, J.