Case ID: ny-st-rep_14/html/0615-01.html
Source: Caselaw Access Project
Author: {"author": "Barnard, P. J. Pratt, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of the Final Judicial Settlement of the Account of James Thomson, Executor of the Last Will and Testament of William Anderson, deceased. In the Matter of the Application of James Thomson, Executor, Etc., for the Revocation of his Letter his Resignation as Trustee and Settlement of his Account as Executor and Trustee.
    
      (Supreme Court, General Term, Second Department,
    
    
      Filed February 13, 1888.)
    
    Executors and administrators—Accountings—Failure to collect NOT ALONE SUFFICIENT TO CHARGE EXECUTOR WITH NEGLECT OF DUTY.
    On accounting of the executor, it appeared that the Noble mortgage, with which he was sought to be charged, was a second mortgage, and was given to the testator in his life-time. The first mortgage was foreclosed and the property did not bring enough to pay this. The executor pushed the mortgagor and did get some money from him on account of interest hut the security was bad and could not be forced. Judgment was obtained on the bond, and that failed to realize anything upon inquiry in supplementary proceedings. _ Feld, that these facts should mitigate the rule that a failure to collect is a devastavit. A failure to collect is not alone sufficient to charge an executor with neglect of duty.
    Appeal from a decree of the surrogate’s court, at Kings county, made and entered herein on the 24th day of October, 1887, removing the said James Thomson, as executor and trustee under said will, and settling his accounts as such executor and trustee. By this decree it- was determined that there still remained in the hands of the said executor and trustee the sum of $14,641.60 of principal and $7,275.01 of income to be accounted for. The executor and trustee appeals from said decree.
    
      Benj F. Kissam, for appl’t; Jackson & Burr, for Mrs. Anderson, et al. Geo. L. Fox. special guardian.
   Barnard, P. J.

There was no evidence to justify charging the executor with the Roble mortgage. It was a second mortgage, and was given to the testator in his life-time. The first mortgage was foreclosed, and the property did not bring enough to pay this. The executor pushed the mortgagor, and did get some money from him, on account of interest, but the security was bad and could not be forced, and the executor did wisely in refraining from attempting it by foreclosure. Judging from the result of the foreclosure of the first mortgage, these acts should mitigate the rule that a failure to collect is a devastavit. The evidence is still more unsatisfactory in respect to the Clinton B & M. There was only a small balance due on this security. This property was sold under a first mortgage, and did not bring sufficient to pay it.

Judgment was obtained on the Roble bond, and that failed to realize anything upon full inquiry in supplementary proceedings. Ro evidence whatever was given to impeach, contradict or vary this evidence, A failure to collect is not alone sufficient to charge an executor with neglect of duty. Woolley v Baldwin, 101 N. Y., 688

The evidence is fully sufficient to justify the expenditure for repairs in the Knit street property. It was out of repair. “ It was barely inhabitable “nobody could live in them.” The land, and the money put on it, belonged to the same person, and it is plain that the value of the realty was increased to a greater extent than the money put on it. Even assuming that an order to make the repairs before they were made would have been proper, a judicious expenditure should not be cast upon the executor for a mere form. f the act was done in good faith, and for the benefit of the estate, as well approve of it as if the approval was given beforehand. There are other questions in the 'case which are or may be raised upon a new trial. The finding of neglect being unsupported by evidence, the question of commissions need not be passed upon further than to say that double commissions were not proper. The case seems to be the same as Johnson v. Lawrence, 95 N.,Y., 154.

The decree should be reversed, and a new trial granted with cost to executor out of estate.

Dykman, J., concurs.

Pratt, J.

(dissenting).—The decree appealed from presents features of such apparent hardship that more than usual care has been given to the consideration of the argument presented for the appellant; but we are brought to the conclusion that the decree must be affirmed.

• The largest item which has been charged against the executor arises from his failure to collect the Noble mortgage, which with interest, amounts to about $11,000.

It is objected by the counsel for the executor, that there is no proof from which referee and surrogate were authorized to find that it could have been collected. In this the appellant is in error. The presumption of law is that a chose in action is worth its face value; and the burden of proof is upon the person, who alleges the contrary. If the maker of a note is insolvent, the fact can be shown. If stocks or bonds or mortgages are not worth the amount they purport to represent, proof will be received to show that fact, but in the absence of evidence the presumption must, of necessity be, that the value represented is the real value, and whoever avers the contrary must sustain the burden of the contention.

In this case the Noble mortgage was a second incumbrance upon suburban property executed in 1873, immediately before the great panic of that year. Had any adequate proof been offered to show that the bond and mortgage could not have been collected, we cannot doubt the court below would have listened with a willing ear and the memory of the great financial depression of 1873, and the years succeeding is so recent that slight testimony would have had weight.

But the only evidence offered by the executor to repel the presumption that the mortgage was worth its face was the proof that the foreclosure in 1880 of the prior mortgage resulted in a deficiency of $5,000, and that the bondsman had no personal responsibility.

No proof was offered by appellants to show the value of the mortgaged property in 1873. Reliance seems to have been placed in the erroneous idea that the mortgage must be affirmatively shown to be worth its face value. The presumption of law supplied that proof.

These considerations dispose of the question as to the Clinton mortgage. In that case the executor showed some diligence, and, as the mortgage was the third encumbrance upon property which, on foreclosure, failed to fully pay the first mortgage, it may, perhaps, be taken as sufficiently proved that the mortgaged property was inadequate to pay the debt in question.

But it also appears that the executor took no steps to enforce the personal liability of the bondsman. He did not even make inquiries as to his responsibility. For all that is shown he may be abundantly responsible for the debt. The law presumes him responsible. The executor not having shown the contrary was properly charged with the value of that security.

The next most important item is the expenditure of $2,458, taken from the personal property and applied to making repairs upon the house occupied by the widow and children of the testator. There is no reason to doubt that this expenditure was made in entire good faith, and we think with the desire of the widow, although she now hesitates to say it had her approbation.

It is not impossible that, had the trustee applied to the court for instructions, he would have been ordered to make the repairs. He assumed the responsibility of acting without instructions, and in so doing exceeded his authority. It may be, as claimed by appellant, that in a proper case an excess of power by a trustee should be ratified by the court. But in this case the advantage of the course pursued is so doubtful and the excess of authority so clear that the expenditure was properly disallowed.

No other questions require discussion, and the decree of the surrogate must be affirmed, with costs.

Barnard, P. J., and Dykman, J., concur.