Case Name: In re WATSON et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1905-02-24
Citations: 92 N.Y.S. 195
Docket Number: 
Parties: In re WATSON et al.
Judges: 
Reporter: West's New York Supplement
Volume: 92
Pages: 195–203

Head Matter:
(101 App. Div. 550.)
In re WATSON et al.
(Supreme Court, Appellate Division, First Department.
February 24, 1905.)
Executors—Accounting—Payment oe Widow’s Claim.
On a reference by the surrogate, the widow’s claim against her husband’s estate for property advanced to him was allowed on her testimony (her competency to testify as to transactions between herself and her deceased husband, under Code Civ. Proc. § 829, not being raised), and the testimony of W., one of the executors, who had been testator’s private secretary and business manager, and who was familiar with the nature and merits of the claim. It also appeared that, if her claim had not been allowed, the widow would have contested the validity of testator’s will. The judgment on the claim having been paid, the executors charged the same to the estate, and on their judicial settlement the amount so paid was surcharged to their account; W. being excluded as a witness as a person interested, and the testimony of the widow being given little weight because she was incompetent when testifying in support of her claim before the referee. Held, that the acts of the executors should not be characterized as fraudulent, collusive, or negligent, in failing to resist the widow’s claim more stubbornly, and that a new hearing of their account should be had before another referee.
Laughlin and Patterson, JJ., dissenting.
Appeal from Surrogate’s Court.
Thomas Watson and others, executors of the estate of Joseph Corbit, deceased, presented their final account for judicial settlement, and from the judgment rendered they appeal. Reversed.
Argued before VAN BRUNT, P. J., and HATCH, PATTERSON, O’BRIEN, and LAUGHLIN, JJ.
Henry A. Forster, for appellants.
Milton E. Robinson, for respondents Jane Bunnell and others.
James H. Marsh, for respondents Ellen Patterson and others.

Opinion:
O'BRIEN, J.
The facts are sufficiently stated in the opinion of Mr. Justice LAUGHLIN. The rule is settled that, where inferences are equally consistent with innocence or guilt, equally consistent with good faith or bad, or equally consistent with the view that one upon whom a duty is placed has or has not performed it, we are required to draw those inferences which are consistent with innocence, with good faith, with diligence and performance of duty, rather than the opposing inferences. I think that, without doing violence to any of the inferences that should fairly be drawn from the facts surrounding the obtaining and paying of the judgment by the executors, an argument could be built up in support of the view—equally as cogent and logical as that presented against it—that, so far as the executors are concerned, there is no reason for holding that by any collusion with the widow, or through any fraud upon the estate of which they are trustees, they entered into any arrangement or were guilty of bad faith, or were negligent in permitting the judgment to be obtained.
It must be conceded that there was a question as to whether the widow had or had not a valid claim against the estate. She had asserted it, and was engaged in pressing it; and, in addition, she had a right and had shown an inclination to contest the validity of the will itself. The executor Watson, who had been, the private secretary and business manager of the testator, and who was entirely familiar with the merits of the claim, as well as what were the chances of success, had the widow contested the will, is not to be charged with bad faith or want of diligence if, in his best judgment, he concluded that it would be better to avoid the contest of the will, and pay the claim of the widow if it could be established. To that end, the claim was rejected by the executors, and afterwards referred; and it is because the attorney for the executors did not object to the widow's testifying to personal transactions between herself and her deceased husband which were incompetent under section 829 of the Code of Civil Procedure, that the charge of negligence is made.
The executor Watson was examined as a witness on the reference to prove the widow's claim, and his testimony tended to establish its validity. This testimony was competent when given, and was sufficient to sustain the validity of the widow's claim. On this accounting, however, wherein the good faith of the executors in paying the claim or judgment is brought in question, Watson's testimony was excluded, upon the ground that it is incompetent, under section 829 of the Code, although concededly competent when given on behalf of the widow on the reference to prove her claim.
The testimony of the widow upon this accounting of the executors was received, but, as appears from the report of the referee, the proceedings had upon the hearing, and the discussion by him in his final opinion, no weight was attached to it, because, as suggested, the testimony which she had formerly given upon the reference to establish her own claim was then incompetent. In this record, therefore, we have these anomalies: That the original claim of the widow was sustained by her own testimony, which should have been excluded because incompetent, and by the testimony of the executor Watson, who was on that proceeding a competent witness, while upon the subsequent accounting of the executors it was held to be an invalid claim, as the referee rejected the testimony of Watson because it was then incompetent, and rejected the testimony of the widow as of little or no weight because formerly incompetent. ' Thus the executors are "between the devil and the deep sea," and it cannot be that these inconsistent rulings on evidence are right. We are of opinion that, as the widow was a competent witness upon this hearing, the executors were entitled to have her evidence received, and to have the same fairly considered and weighed, and, if it established that the claim which she enforced was a just claim, the executors would be protected in the payment of it. As her testimony appears to have been arbitrarily rejected by reason of her former incompetency, the executors have been placed in a position of being unable to establish the validity of the claim, even though it exists as a fact, and of which they had competent evidence at the time of its payment.
It would seem to be a harsh and unjust rule to apply to surcharge the executors with this judgment. It is only, as said, by resolving against the appellants inferences equally as consistent with their good faith and honesty as with bad faith and fraud, that the conclusion can be reached that the claim of the widow, which was reduced to judgment, and which was admittedly paid by the executors, is not a proper credit to allow them. The principal argument in support of this finding is that their attorneys upon the reference were not sufficiently astute, and did not avail themselves of the advantage which, under section 829 of the Code, they possessed, of keeping out certain testimony which was given in support of the widow's claim. Taking the then situation from the executors' standpoint, there was a fair question as to whether the widow's claim was honest and valid. They required her to establish it before a referee, and the reason why a more stubborn contest was not made is furnished by the testimony of the executor Watson, who believed it to be a good claim. After it was proven, the executors, by paying it, avoided the contest of the will. Are they to be judged upon' the basis of the fuller knowledge of all the facts which they now possess,, and which now appear, rather than upon the knowledge and the facts which they possessed at the time when the widow's claim was presented ? I think their acts are to be judged in the light of the knowledge which they possessed when they paid the claim, and, so judged, I do not think they can be justly characterized as fraudulent, collusive, or negligent; but, on the contrary, though they may not have acted wisely, and through their judgment, as shown by subsequent events, may have been faulty when they exercised it, I believe they acted in. good faith and honestly.
The decree should be reversed, and a new hearing had before another referee, with costs to appellants to abide the event
VAN BRUNT, P. J., and HATCH, J., concur. PATTERSON,. J., dissents.
Appeal by executors of Joseph Corbit from so much of the decree' of the surrogate judicially settling their accounts as surcharges them with $12,754.82 principal and $937.17 interest, and surcharges their account in other respects, and as reduces their commissions. The executors filed their accounts, and applied for judicial settlement. Objections having been filed, a referee was appointed to examine the accounts' and determine the questions arising, and report. The decree follows and confirms the report, and, upon further evidence taken, before the surrogate, fixed the commissions of the executors.