Case ID: barb-ch_1/html/0485-01.html
Source: Caselaw Access Project
Author: {"author": "The Chancellor.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Gratacap and others vs. Phyfe, adm’r, &c.
    An order may be granted by a surrogate, after the expiration of eighteen months from the time letters of administration are issued, that the executor or administrator render an account of his proceedings; upon the application of a creditor, legatee, or next of kin of the decedent. Or such an order may be made by the surrogate ex officio, without any application by a party interested in the estate.
    But where the order is made by the surrogate ex officio, the proceedings are different from what they are when it is made upon the application of some person interested. In the first case, it may sometimes be proper for the surrogate to make an absolute order in the first instance; as it is a matter resting in his discretion whether he will require an account of the administration of the estate, although no person interested thinks proper to institute a suit for that purpose. It is a proper exercise of such discretion for the surrogate ex officio, to require an account from the executor or administrator, whenever, in his opinion, the rights of minors, who are interested in the estate as legatees or next of kin, render such an account advisable.
    
      On <fhe rendering of .such an account, if it Appears that the executor or administrator has money in his hands belonging to minors, the surrogate should notify tho guardians or relatives of the minors .of the fact; so that the fund may be received and properly invested for the benefit of those to whom it belongs.
    But in the case ofan.application by or on behalf of a-person claiming to be •interested-in' the estate, as a creditor, legatee, of next of kin,' an absolute order to account should not be made in the first instance, and without notice of the application, to the executor or administrator.
    The surrogate, upon the presenting of the petition for an account, in sutih a case, should direct the executor or administrator to be cited to appear and show cause, at a specified time, why-an order that he render an account of Ms proceedings should not he granted; so as to give >him an opportunity to object that the affidavit, as to the debt claimed to he due to the applicant, is insufficient, or that he is not interested in the estate as a legatee, or as next of kin, &c. And the party cited may show, in answer ’to such application, that the right of the applicant to an* -account is barred 'by a release, or otherwise.
    As a general rule, however, if a creditor swears positively to a debt due to him from the decedent, he will he entitled to an order for an inventory, and an account of the estate. And the surrogate will not proceed to try the validity of the debitor inquire as to the amount thereof, upon a mere application for an account; where 'the petitioner docs not pray for the payment of the debt.
    Even a contingent interest in the estate is sufficient to entitle the party, having such interest, to an order that the executor or administrator render an account.
    This was an appeal from a decretal order of the surrogate of the city and county of New-York. The appellants, G. P. and J. L. Gratacap, presented a petition to the surrogate, stating that the respondent’s intestate was indebted to them at the time of his death, in the sum of $4800, upon three promissory notes which were then due; that administration upon the estate was granted to the respondent in 1842; and that he had not rendered an account,, although more than eighteen months had expired since the letters of administration were granted to him. They therefore prayed that he might be ordered to render an account-of his proceedings as administrator. The surrogate, instead of citing the administrator to show cause why an account should not be -rendered by him, made an absolute order, ex parte,-directing that he should appear and render an account of his proceedings on a day specified in the order, or that an attachment issue against him. On the day designated the administrator appeared, and made an affidavit that the petitioners were not creditors of the decedent, and that the notes mentioned in their petition were void for usury; that the intestate was sued thereon in his lifetime and set up the defence of usury, whereupon the petitioners discontinued their suit. The surrogate, however, required the respondent to render an account of his administration, pursuant to the directions of the previous ex parte order; and an account was rendered accordingly. In the account of his proceedings, the administrator stated that in May, 1843, and more than six months after the granting of letters of administration, he obtained an order from the surrogate directing a notice to the creditors of the intestate, to exhibit their claims, as authorized by the statute, and that the notice was accordingly published; that previous to such order the petitioners had left a statement of their claim upon these notes at the place of business of the administrator, in his absence therefrom; that he rejected the claim, on the ground that it was invalid and usurious; and that no suit had since been commenced for the recovery thereof. He therefore insisted that the claim was barred. No proof of any kind was taken before the surrogate in relation to the existence or validity of the notes mentioned in the petition, nor as to the matters stated by the administrator in the account rendered by him. But the surrogate made an order, which, after reciting that the administrator had rendered an account pursuant to the previous order made on the application of the petitioners, by which it appeared that the claim of the petitioners was disputed and denied, and that such claim had never been presented to the administrator according to law, ordered and decreed that the applicants had not substantiated their claim, and that the proceedings be dismissed, and that the administrator pay the costs out of the estate,
    
      M. T. Reynolds & O. L. Barbour, for the appellants.
    
      E. Sandford, for the respondent.
   The Chancellor.

The statute authorizes the surrogate to make an order, after the expiration of eighteen months from the time of the appointment of the administrator, that he render an account of his proceedings. And such an order may be granted upon the application of a person having a demand against the personal estate of the decedent, as creditor, legatee or next of kin, or in behalf of a minor having such claim; or it may be made by the surrogate, ex officio, without any such application. The proceedings, however, are entirely different where the order is made by the surrogate ex officio, from what they are when it is made upon an application in «behalf of a person interested as a creditor, or as a legatee, or as the next of kin of the decedent. In the first case, it may perhaps sometimes be proper for the surrogate to make an absolute order in the first instance; as it is a matter resting in the discretion of the surrogate, whether he will or will not require an account of the administration of the estate; although no person interested thinks proper to institute a suit for that purpose. And it undoubtedly is a proper exercise of such discretion for the surrogate to require such an account, ex officio, whenever in his opinion the rights of minors, who are interested in the estate as legatees or next of kin, render such an account proper. (Roberts v. Roberts, 2 Lee's Eccl. Rep. 399.) On the rendering of such an account, if it appears that the administrator has in his hands money belonging to infants, the surrogate should notify the guardians or relatives of such infants of the fact; so that the fund may be received and properly invested for the benefit of those to whom it belongs.

But in the case of an application by, or in behalf of a person, claiming to be interested in the estate as a creditor, legatee, or as the next of kin of the decedent, an absolute order to account should not be made in the first instance, and without notice of the application to the administrator. For in such cases the right of the applicant to call for an account may be questioned. The surrogate, therefore, upon the presentation of the petition for an account should direct the administrator to be cited to appear, at a specified time, and to show cause why an order that he render an account of hid proceedings should not be granted; so as to give him an opportunity to object that the affidavit of the debt of the applicant is insufficient, or that such applicant is not interested in the estate, as a legatee or as next of kin, &c. And the party cited may show, in answer to the application, that the right of the applicant to an account is barred by a release, or otherwise. (See Millington v. Sorsby, 1 Lee’s Eccl. Rep. 525.) As a general rule, however, if a creditor swears positively to a debt due to him from the decedent, he will be entitled to an order for an inventory and an account of the estate. And the surrogate will not proceed to try the validity of the debt, or to inquire as to the amount thereof, upon a mere application for an account, where .he petitioner does not pray for the payment of the debt. (See Smith v. Pryce, Idem, 569.) Even a contingent interest in .he estate is sufficient to entitle the party, having such interest, o an order that the administrator render an account.

In the present case, the account had been rendered; so that the Whole object of the petitioners had been obtained previous to the making of the order appealed from. The order dismissing the proceedings, therefore, did not deprive the appellants of any right or benefit which they could properly claim under this petition. And being altogether extrajudicial, and not founded upon any issue joined in the cause upon a matter of fact which was in a situation to be tried in this proceeding, this order will not prevent the petitioners from bringing a suit and recovering the amount of the notes, if they are not in fact usurious and void; provided such suit is brought within the time limited by law after the petitioners had notice that their claim was denied and rejected. Whether their claim is in fact barred, upon the state of facts set forth and sworn to by the respondent in his account, is a question which was not properly before the surrogate after the account of the administrator had been rendered. It ought not, therefore, to be passed upon here.

This appeal must be dismissed without costs; and without prejudice to the right of the appellants to institute such suit for the recovery of the debts claimed by them as they may be advised to bring.