Case ID: nys_6/html/0608-01.html
Source: Caselaw Access Project
Author: {"author": "Ingalls, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re Casey’s Estate.
    
      (Supreme Court, General Term, Third Department.
    
    July 6, 1889.)
    1. Executors and Administrators—Costs—Preference over Legacies.
    A judgment against executors for costs, rendered in an action brought by them on behalf of the estate, must be paid by them in preference to legacies.
    2. Same—Liabilities Incurred by Executor.
    Executors should not be allowed for liabilities created by them without proof that such liabilities were either reasonable or necessary.
    Appeal from surrogate’s court, Montgomery county.
    Petition of Cornelius Swart and Arthur Y. H. Smyth for a final settlement of their accounts as executors of Lydia Casey, deceased. John Ó. Becker, a judgment creditor, appeared and objected to the account. The surrogate disallowed a number of items in the account, and ordered that, out of the balance remaining in the hands of the executors, Becker’s judgment should be paid before the legacies. The estate was not large enough to pay all the legacies in full. The executors appeal.
    Argued before Learned, P. J., and Ingalls and Landon, JJ.
    
      Maxwell Bros., for appellants. Bobert J. Sanson, for respondent.
   Ingalls, J.

We have given to this case careful consideration, and have reached the conclusion that, considering all the facts and circumstances in-valved, the decree of the surrogate is just and defensible. The executors, from the commencement of their administration of the estate under the will of Lydia Casey, deceased, seem to have disregarded the duties which the law imposed upon them, as such executors, in the proper and orderly management of the estate, and in the distribution of the fund. In some instances legacies which were mere bounties have been paid in full, in preference to debts against the estate. In other instances liabilities have been created by the executors for professional services and otherwise, which they sought to be allowed to them in their account against the estate by the surrogate, without proof either that they were reasonable in amount or necessary for the protection of the estate. The surrogate was called upon to allow such items in the face of the fact that the executors had not even paid such claims. It appears that, after rejecting the claim of John O. Becker against the estate, the executors instituted an action against him, and prosecuted the same to a result which was adverse to the estate, and a judgment for costs was entered up in his favor for $264.34, October 25,1887. By their own showing the executors, with a full knowledge of the nature of the action against Mr. Becker, and in which they assumed the risk of a judgment against the estate for costs, proceeded to disburse the funds of the estate by satisfying in full legacies created by the will of Lydia Casey, to the prejudice of claimants, who had debts against such estate. It is a well-recognized principle of law that debts and the proper expense of administration are to be first paid, and in that particular they take precedence of legacies, and an executor who reverses the order of payment does so at his risk. Nagle v. McGinniss, 49 How. Pr. 193; In re Dorr, 4 N. Y. Supp. 754. The decree of the surrogate shows that he carefully examined the accounts of the executors, and has adjusted them in accordance with the legal rights of the parties interested in the estate. In doing so he was compelled to disapprove of the manner in which the executors had manipulated the funds of the estate, and to change the order of preference, which the executors had adopted, and to disallow many of the items contained in their account; some because the indebtedness had been created without authority, and in other instances for the reason that they were excessive in amount. In regard to some of the larger items claimed by the executors, and included in their account, they failed to furnish satisfactory evidence to the surrogate that it was necessary or proper to create such indebtedness, and in some instances the claims had not been paid by them to the parties who had rendered the services upon the retainer of the executors. The decree of the surrogate shows unmistakable evidence that he has patiently and intelligently considered the matter, and has, as far as possible, considering the manner in which the executors have conducted the administration of the estate, adjusted their account so as to conform to the requirements of the law, and, as far as possible, to protect the rights of all concerned. It would seem that the executors, with the amount of legal advice which their account indicates that they sought, would have been able to avoid the entanglement which the history of their administration exhibits. We are convinced that the decree of the surrogate is correct, and-should be affirmed, with costs. We are not satisfied that the executors have acted in bad faith, but have rather failed to understand the duties and obligations required of them, and therefore should not be charged with costs personally. All concur.