Case ID: mills-surr_12/html/0131-01.html
Source: Caselaw Access Project
Author: {"author": "Scott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of the Estate of Albert Friedlander, Deceased. Isaac N. Spiegelberg and Marie Friedlander, as Executors, etc., of Albert Friedlander, Deceased, Appellants; Nathan Citron and Herman Citron, Respondents.
    (Appellate Division, First Department,
    January 22, 1914.)
    Executors and administrators—Action for rent—Liability of estate for costs—Expenses of administration.
    Where executors fail to recover in a suit brought by them for rent alleged to be due under a lease given by their testator, which claim did not exist at the time of the testator’s death, and the defendants are awarded costs, the judgment is entitled to priority in payment, being an expense of administration, even though the estate is insolvent.
    Appeal by Isaac N. Spiegelberg and another, as executors, etc., from an order of the Surrogate’s Court of the county of New York, entered in the office of the said surrogate on the 21st day of July, 1913, • authorizing the issuance of an execution against the executors of the last will and testament of Albert Friedlander, deceased.
    Isaac Lande, for the appellants.
    Benjamin E. Messier, for the respondents.
   Scott, J.

Albert Friedlander died on June 2, 1909, leaving a last will arid testament, which was duly admitted to probate, and letters testamentary were thereupon issued, on June 15, 1909, to Marie Friedlander and Isaac N. Spiegelman, as executors thereof.

In or about September, 1909, these executors sued Herman Citron and Nathan Citron for rent alleged to he due upon a lease made to them by said Albert Fricdlander. This action resulted in a judgment in favor of said Herman and Nathan Citron for $373.62.

The estate of said Alfred Friedlander is insolvent, but the executors have in their hands funds belonging to the estate largely exceeding the amount of the judgment referred to.

The claim did not exist at the time of the death of the decedent, and the holders are not, therefore, creditors of the estate within the meaning of section 2722 of the Code of Civil Procedure, yet section 8246 of the Code requires that the judgment be paid out of the estate exclusively, the case not being one in which the executors may be personally charged. The learned surrogate who signed the order appealed from was of the opinion that the judgment was entitled to priority of payment as an expense of administration, and made the order upon that theory. A precedent for his action is to be found in Matter of Mahoney (37 Misc. Rep. 472), in which the surrogate of Sullivan county made a similar order under like circumstances, which he supported by a well-reasoned opinion. It is interesting to note that the Appellate Division in the Third Department subsequently affirmed an order designed to compel obedience to the order above referred to (Matter of Mahoney, 88 App. Div. 140). Apart, however, from this precedent we think that the order appealed from is justified in principle by Columbian Insurance ompany v. Stevens (87 N. Y. 536). In that case an action had been begun by the insurance company before the appointment of the receivers, who, on their appointment, assumed and carried on its prosecution. The action resulted in a judgment for defendant for costs, and a motion was made to compel the receivers to pay the judgment out of the funds in their hands. The Court of Appeals held that the motion should be granted, saying: “ The receiver is pro hac vice the representative of the company, its creditors and stockholders. The action is prosecuted for the increase of a fund which is to be paid to them. ít is not according to any rule of justice or equity toward third parties that actions like the present should be prosecuted by the company or such representative, otherwise than at the expense and risk of the fund which it is sought thereby to increase.”

The court quoted with approbation a similar decision of Chancellor Walworth in Camp v. Niagara Bank (2 Paige, 283). It was also held that it was immaterial whether the estate was solvent or insolvent so long as the receivers had in their hands funds sufficient to pay the costs. Indeed in the case decided by Chancellor Walworth it affirmatively appeared that the estate was insolvent.

The principle underlying the cases last cited is applicable to the present case.

The Code requires that such a judgment be paid out of the estate, but is silent as to how it shall be paid. The reasonable and just rule is that applied by the surrogate.

The order should be affirmed, with ten dollars costs and disbursements.

Ingraham, P, J., McLaughlin, Laughlin and Clarke, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.