Kidd v. Chapman & Daniels

| New York Court of Chancery | Dec 31, 1847

The Chancellor.

There is no foundation for the objection that the claim was barred, by the neglect of the respondents to bring a suit on their judgment within six months after it was presented to the executor for payment. The statute, (2 R. S. 89, § 38,) provides that if a claim against the estate of the decedent is exhibited to the executor or administrator and the same is disputed or rejected, and shall not "be referred, the claimant shall bring his suit within "six months, for the recovery thereof, or shall be barred from ever recovering the same. But it would be a gross perversion of the meaning of the statute to hold that what took place when the judgment was presented to the executor for payment, was either a rejection or a disputing of the demand, within the fair intent and meaning of the statute on that subject. The mere neglect to pay an honest debt, by an executor, when he is called on for payment, or even a refusal to pay, upon any other ground than that the debt or some part of it is not legally or equitably due, is not a disputing or a rejection of the debt, so as to require the creditor to sue for its recovery within six months or be barred. For the executor may have many reasons for declining to pay a debt immediately, although he does not intend to question its existence and legality, or the propriety of its being paid out of the estate of the decedent. In the case of Elliot v. Cronk’s administrator, (13 Wend. Rep. 35,) the administrator, upon the claim being presented to him, told the agent who presented it that he did not know whether the demand was correct or not; that he had not yet investigated the affairs of the estate, and that he would consult counsel and let the agent know his determination; but he did not afterwards make any communication on the subject. The court there held that the statute must be construed strictly, and that this was not a disputing of the demand, within the meaning of the statute; and that it would not have been, even if the administrator had not promised to let the agent know his final determination. A similar decision was made by the supreme court in the case of Reynolds v. Collins, (3 Hill’s Rep. 36.) It is the duty of the executor or administrator, when a claim is presented against the estate of the decedent, to inform the claimant, explicitly, whether he means to reject or dispute such claim, or any part thereof, upon the ground that it is not justly due. Or if he wishes further time to investigate the justice or legality of the claim, he should apprise the claimant of such wish; and should be prepared to admit or reject the claim, or to refer it, within a reasonable time. Then the claimant will understand his rights; and if the claim is rejected, or is not admitted within a reasonable time, he will be authorized to bring a suit to establish such claim. He will then also be in a situation to ask for costs, if he succeeds in such suit. Here, as the judgmeat was recovered but a few days before the death of the testator, it is wholly improbable that the executor wished or intended to dispute the validity of the claim; but he might, very reasonably, have wished to consult the attorney in the suit, in relation to the recovery of the judgment, and to ascertain whether the matter was to be further contested. The only question, therefore, is whether the surrogate had jurisdiction to decree the payment of this debt; without subjecting the judgment creditors to the useless expense of bringing another suit, at law, against the executrix and executor, upon the judgment, and recovering a new judgment thereon against them.

The only objection that can reasonably be made to the exercise of such a power by the surrogate, is that it might, in some cases, deprive the personal representatives of the decedent of the right to have the debt claimed established by the verdict of a jury, before it is decreed to be paid. That, however, is a matter resting altogether in the discretion of the legislature; especially where the executor or administrator, upon the presentment of the claim to him, does not think proper to deny its justice or legal validity; so as to make it the duty of the claimant to bring a suit at law to establish his claim, at the expense of such executor or administrator, or of the estate of the testator or intestate. It is not only in the power of the legislature to establish a summary remedy for the settlement of the estates of deceased persons, but it has unquestionably authorized the surrogate to examine and decide as to the validity of all claims, against the personal estate of the decedent, upon an application for the final settlement of the accounts of an executor or administrator. The 71st section of the article of the revised statutes relative to the duties of executors and administrators, in rendering an account, and in making distribution to the next of kin, declares that upon the final settlement of the account, if it shall appear that any part of the estate remains to be paid or distributed, the surrogate may make a decree for the payment and distribution thereof among the creditors, legatees. widow, and next of kin, according to their respective rights; and in such decree shall settle and determine all questions concerning-any debt, claim, legacy, bequest, or distributive share; to whom the-same shall-be payable, and the sum to be paid to-each person. (2 R. S. 95.) The only-exception to this imperative direction, to the surrogate, to determine all questions as to-debts. or claims against the-estate of -the decedent, upon a final settlement of the accounts of Hbe personal representatives, appears .to -be in the seventy-fourth section df the same.article. 'That section provides, that if it -appears to the surrogate that.any.claim exists.against the-estate, which is not then -due,i or upon which a. suit is then pending, he shall.allow a sum sufficient -to -satisfy-such «claim, or -the .proportion :to which it may be entitled, to -be retained for -the -purpose of satisfying such óláim when -due,-or when -recovered; or-of «being distributed according to law. (2 R. S. 96.)

'The-provisions.-of the revised statutes,-authorizing the surrogate to decree the payment of a debt, where the executors or administrators do not think proper to ask for a final settlement of their accounts, are not imperative; -and therefore where the claim of the creditor is intended to be contested ;in good faith, and where -the same has in fact been rejected or-disputed by the-executors or administrators,-at the time it was presented to them-for payment, and-the-claimant -has neglected -to proceed at law to establish the validity of his claim, the surrogate, in the-exercise-of a sound discretion, may perhaps refuse to permit the claim -to be litigated before him in ‘the first -instance, upon a-direct application of the-claimant for the payment-of his debt. But .the 18th section-of the title of the .-revised statutes relative to the rights and liabilities of-executors and administrators, (2 R. S. 116,) expressly declares that the surrogate shall have power to decree the payment oí debts, legacies, and distributive shares,-upon the application-of a creditor-at any time after six months, and upon.the-application of a legatee or -distributee at any time after one year, from the time of granting of the letters testamentary or of-administration. And in the case under consideration, 1 think the surrogate had power to decree payment-of the respondent's judgment ; although the executor and executrix did not ask for a final settlement of their accounts.

It is true that although the judgment recovered against the testator, in his lifetime, was conclusive evidence of his indebtedness at the time of the recovery of such judgment, so long as it remained unreversed, it was only prima facie evidence of indebtedness against his personal representatives; as it might have been paid by the testator -in his lifetime. And even if the judgment had been recovered against such representatives they might still dispute the existence of the debt, before the surrogate, by contending that it had been subsequently paid. But in neither case would it be a proper exercise of discretion on the part of the surrogate to refuse to proceed further upon the petition of the judgment creditor for the payment of such a debt, where the creditor in the petition had sworn that the debt was still due, merely because the counsel of the personal representatives of the decedent thought proper to say his clients disputed the debt. Even if it was proper to receive an oral answer by counsel, to a sworn petition which stated the recovering of the judgment, and that it was still due, and that the personal estate was more than sufficient to pay all the debts of the decedent, it was no answer to such a petition to say that the debt was disputed. But the answer should either have denied the recovery of the judgment, or should have stated that it had been reversed, or had been paid, either wholly or in part, by the testator in his lifetime, or by his personal representatives after his death; and if paid in part, stating the amount of such payment. And if the executrix and executor expected to satisfy the surrogate that it was a proper case for him to suspend the proceedings until the petitioner had established the debt against them, in an action at law, they should have verified their answer by oath, at least as to their belief.

Under the circumstances of this case, I have no doubt that it was the duty of the surrogate to proceed upon this petition, and to decree the payment of the judgment therein mentioned, with interest and costs, out of the estate of the testator in the hands of the appellants; without subjecting the petitioners to the delay and expense of an action at law upon the judgment.' The production of the record of such judgment was prima facie evidence of the debt claimed. And the inventory of personal estate, amounting to more than $20,000, was prima facie evidence that the funds in the hands of the personal representatives of the testator were sufficient to pay the amount proved to be due to the petitioners; in the absence of proof that any older judgments existed against the testator, at the time of his death, or that the fund in the hands of his executor and executrix was insufficient.

The decree appealed from must be affirmed with costs. And the appellants must pay to the respondents, interest upon the amount decreed, from the date of the surrogate’s decree ; as damages for the delay and vexation caused by this appeal. The decree is to be entered with the clerk of the county of Rensselaer; and may be enrolled and docketed in the supreme court, organized under the provisions of the new constitution, so that an execution upon the decree may issue out of that court; instead of having the proceedings remitted to the surrogate.