Case ID: mills-surr_2/html/0039-01.html
Source: Caselaw Access Project
Author: {"author": "Marcus, S.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Matter of the Estate of John C. Miles, Deceased.
    
      (Surrogate’s Court, Erie County,
    
    
      Filed November, 1900.)
    1. JURISDICTION-SUBROGATE TO DETERMINE WHETHER A CLAIM AGAINST A Decedent Has Been Disputed or Rejected.
    A surrogate cannot, except by consent, try a, disputed claim against the estate of a decedent, but he has power to determine whether the claim has been disputed or rejected by the administrators of the estate.
    
      2. Same — Effect of Recognition- of Claim by Administratrix and Sole Distributee — Waiver of Defenses.
    Where an administratrix, who is sole distributee of an estate having no creditors, recognizes a claim against her intestate by inducing and permitting a partial payment to be made upon it and subsequently shows the payment in her final account, she cannot defeat a subsequent application for full payment by insisting that the claim has never been formally presented to the administrators, nor can she then set up the Statute of Limitations as to the cause of action upon which the claim was based.
    Reversed, 61 App. Div. 562; again reversed, 170 3ST. Y. 75.
    Proceeding upon tbe petition of claimant for an order directing that tbe decree of settlement heretofore made be opened and that tbe administrators be directed to pay her claim.
    Henry L. Steiner, for claimant-petitioner, Mrs. Rose Leroy; David 0. Millar, for administrators.
   Marcus, S.

— This proceeding arises upon the petition of tbe claimant for an order directing that the decree of settlement heretofore made be opened, and that tbe administrators be directed to pay her claim.

Tbe real issue in this proceeding is to determine whether tbe petitioner’s claim has been admitted or rejected by tbe administrators.

This court has no power to inquire into the merits of a disputed claim, and is utterly devoid of jurisdiction to determine tbe validity of an alleged creditor’s disputed claim against a decedent’s estate, except as provided by section 1822. Vet, tbe mere allegation that one is a creditor of tbe estate is conclusive for tbe purpose of entitling him, under section 2728 of tbe Code, to be beard.

Tbe surrogate has power to determine whether a claim has been admitted or rejected by the- accounting executor. Bowne v. Lang, 4 Dem. 350; Matter of Von der Lieth, 25 Misc. Rep. 255.

“ Whenever any person claims to be a creditor of an estate, and as such insists upon bis right to become a party to a contest over the correctness of its executors’ accounts, that right should be accorded to him as of course. Possibly, the presentation of a demand which, upon its face, is discovered to be absurd, illegal, or, for any reason, worthless, may furnish an exception to this rule. But, as the surrogate has no authority to adjudicate finally upon the validity of an alleged creditor’s disputed claim, it seems little short of absurdity to contend that he may adjudicate preliminarily so far as to shut out such claimant from taking any part in a contested accounting, and to hold that the mere refusal of the executor to recognize one as a creditor is necessarily a bar to his participating in such contest, is absurdity itself.” Matter of Greene v. Day, 1 Dem. 51.

I think it was proper to open the decree and give the petitioner an opportunity to be heard upon the acceptance or rejection of her alleged claim, since there is no dispute as to her failure to receive notice of the settlement.

It is urged that since no written proof of claim was ever presented, no claim upon the part of this petitioner could have been accepted or rejected.

It needs no argument to make clear that the purpose of exhibiting claims against an estate to an executor or administrator is to enable him to adjust claims without the expense of compulsory proceedings in court, to relieve him of doubt and acquaint him with such facts as may lead him to accept or dispute the justice of the claim. If he is satisfied of the justice of the claim by his own knowledge, or any form of evidence, which, in good faith, he deems sufficient, he may allow the same without the intervention of proceedings in court. Indeed, beneficiaries have the opportunity through the executor or administrator of discharging just claims against a decedent without incurring a bill of costs as incident to an action. In short, the office of proof of claim is to bring to the notice of the representatives evidence, from which they may satisfy themselves of its validity.

A copy of tbe claim in writing may be waived since a literal compliance is unnecessary when tbe facts of tbe claim are all witbin tbe knowledge of tbe representative, and have been acted upon and liquidated without any demand for voucher or affidavit.

“ Tbe executor or administrator may require satisfactory vouchers in support of any claim presented, and tbe affidavit of tbe claimant that tbe claim is justly due, that no payments have been made thereon, and that there are no offsets against tbe same to tbe knowledge of tbe claimant.” § 2718, Code Civ. Pro.

Claims may be presented by letter, or in any way which deals fairly with tbe executor or administrator, and tbe estate be represents, and tbe claimant need not produce vouchers or make an affidavit unless requested. Gansevoort v. Nelson, 6 Hill, 389.

Tbe merits of tbe claim are not for my consideration. It appears that directions were given by tbe intestate to bis sister to pay to tbe petitioner tbe sum of $3,000 upon tbe settlement of bis estate. It was not a testamentary gift, a causa mortis gift, nor a gift inter vivos. It was a direction that could not be enforced in tbe law. Tbe administratrix, however, who was tbe sister of tbe intestate, and sole distributee, through her attorney, directed him to arrange with tbe petitioner to accept certain notes and accounts of her intestate and to collect tbe same for herself, as she, tbe administratrix, desired to make no enemies .amongst her neighbors in so doing, and agreed that tbe difference between tbe $3,000 and tbe amount collected from these notes and accounts, she would pay to tbe petitioner upon the settlement of tbe estate. Accordingly, tbe notes and accounts were given to tbe petitioner, and collection of same proceeded with. It resulted in securing to this petitioner tbe sum of $1,279.78.

Tbe account filed by tbe administrator upon tbe settlement of their accounts shows a payment to the petitioner in the sum named.

It, therefore, seems that this claim was recognized and accepted by the administratrix, and formal proof of claim in writing waived, even if the same was a necessary precedent on the part of this petitioner, and to the extent of the balance, namely, $1,120.22, must be treated as a liquidated and undisputed debt which this administratrix is bound to pay.

It has been urged that there is no debt against this estate upon the facts shown, and which are undisputed. That the intestate’s directions to his sister — this administratrix — created no debt against his estate. That the services rendered for which the intestate was moved to direct the payment of the $3,000 are barred by the Statute of Limitations.

It would seem that this administratrix recognized the claim of this petitioner, and admitted the same by actually paying petitioner and crediting herself in her accounts upon the settlement of this estate to the extent of $1,219.78.

It does not appear that this administratrix was confronted with a demand by the petitioner. It, however, does clearly appear that the administratrix recognized a claim or demand of some hind which she regarded as valid, and proceeded upon her own motion through the aid of her attorney to arrange for the payment of the same without demand for vouchers or affidavit from the petitioner, claimant.

If the demand was just, the administratrix was bound to pay; if unjust, to resist payment. Her course makes clear that she regarded it as a just claim and made what resulted in a considerable payment upon the same.

The mode of adjusting claims against an estate is specifically prescribed. They must be presented to the executors or administrators, and, if allowed they are established; if disputed or rejected they may be referred, and if not actions may be brought in the courts having jurisdiction.” McNulty v. Hurd, 72 N. Y. 520.

An executor or administrator duly convinced of tbe validity of a claim may allow tbe same without tbe formality of a judgment. If such admission has been made, it is as effectual for all practical purposes as if tbe debt bad been established by judgment, and if such admission has once been made, it cannot be retracted. Matter of Phyfe, 5 N. Y. Leg. Obs. 331.

And where the claim was duly recognized and allowed by the administrator, neither tbe administrator nor next of kin could require its rejection by tbe surrogate on tbe final settlement. Willcox v. Smith, 26 Barb. 316, 334.

“ The executor acts in a quasi-judicial capacity, and bis judgment of rejection becomes final after six months have expired. His admission of tbe debt, as between him and tbe claimant, is also quasi-judicial, and being a determination, in tbe propriety of which both parties acquiesce, it is immediately final between them.” Matter of Phyfe, supra.

There is no evidence whatever on the part of the respondents that the claim of tbe petitioner was ever disputed or rejected, which, in view of the position taken by the administrators in these proceedings, seems important as well as significant.

By accepting or rejecting a claim, the executor or administrator gives it the force, in effect, of a judgment, subject to tbe right of appeal from his judgment of rejection within six months by an action in a court of proper jurisdiction. The law allows this privilege to determine claims. When, therefore, the determination either way is a judgment, in effect, it is important that the evidence of such admission or rejection should be clear.

While an executor or administrator has no power to waive, as against heirs-at-law or devisees, any legal defense, either under the Statute of Limitations or the Statute of Erauds, no heirs-at-law, devisees, creditors or any third party’s interest intervene in this proceeding, and since this administratrix is sole distribu-tee and alone is interested in the determination of this pro-seeding, it would appear that sbe is estopped from now questioning the validity of the petitioner’s claim at this time.

Conceding that no executor or administrator can pay any outlawed claim corruptly or in violation of the duty be owes an estate as personal representative without becoming liable personally for devastavit, yet this rule fairly contemplates violation of a duty to a person other than himself.

By whom can this administratrix be charged with having violated her trust, she being the sole distributee, and no creditors or other parties existing who are interested in this estate ? Surely, a debt barred by the statute or a débt invalid for any reason, can be paid by an executor or an administrator upon the direction of heirs-at-law or next of kin when the rights of creditors or legatees cannot be affected and the interest in the estate diminished to those only who direct the invalid or outlawed debt to be paid. Even if it be assumed that the payment made by this administratrix was an admission of an old indebtedness, she cannot now be heard to raise the Statute of Limitations as administratrix in her own behalf as sole dis-tributee where the rights of no other persons are or in any way can be affected.

Finally, it may be said that the decedent recognized a valid claim against his estate, and directed his sister — this adminis-tratrix — and only next of kin, to pay the same, which direction of itself would be of little avail to this petitioner as a matter of law, except this administratrix afterwards admitted the claim, ratifying all the acts of her attorney by paying the petitioner the sum of $1,279.78 and further agreeing to pay the balance, and never, throughout the entire time occupied by the administrators in officially caring for this estate, rejecting or disputing in any form the claim of this petitioner. I am satisfied as a matter of fact that the administrators admitted the petitioner’s claim.

The estate was finally closed by a decree of this court upon a judicial settlement, and upon a final accounting one of tbe administrators as sole distributee taking tbe balance of tbe funds, amounting to upward of $16,000, into ber possession. Tbe fund so taken was, nevertheless, charged with tbe payment of tbe petitioner’s admitted claim, and tbe administratrix cannot now, for tbe first time, upon this settlement, which must be regarded as to this petitioner tbe original accounting, since she was not made a party and as an alleged creditor was entitled to be beard, urge tbe Statute of Limitations in her own behalf, as sole distributee, through herself as administratrix, and deny tbe validity of this claim, and ask for its rejection.

Decreed accordingly.