Case Name: Stephen Farrelly, as Ancillary Receiver of the City Trust, Safe Deposit and Surety Company of Philadelphia, Respondent, v. Caroline A. Schaettler, as Executrix, etc., of Ferdinand Schaettler, Deceased, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1907-10-25
Citations: 121 A.D. 678
Docket Number: 
Parties: Stephen Farrelly, as Ancillary Receiver of the City Trust, Safe Deposit and Surety Company of Philadelphia, Respondent, v. Caroline A. Schaettler, as Executrix, etc., of Ferdinand Schaettler, Deceased, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 121
Pages: 678–683

Head Matter:
Stephen Farrelly, as Ancillary Receiver of the City Trust, Safe Deposit and Surety Company of Philadelphia, Respondent, v. Caroline A. Schaettler, as Executrix, etc., of Ferdinand Schaettler, Deceased, Appellant.
First Department,
October 25, 1907.
Executors and administrators — unauthorized acts in connection with ■ power to carry on business,
When an executrix empowered to- cany on ber testator’s businéss allows' her agent to apply for a'bond in'the name of the estate to qualify him as a member of a trade employers’ association, of which, the testator was-not a member, a-legal action by the surety, which was compelled' to pay the bond on the expulsion of the agent, does not lié against the estate, whatever’ may be the personal liability of ■ the executrix or the liability of the estate in equity in case the executrix be insolvent.
Appeal by the ■ defendant, Caroline A. Sohaettler, as executrix, etc., from a judgment of the Supreme" Court in favor of. the 'plaintiff, entered in the office of the clerk of the county of New York on the 1st day of March,-1907; upon the verdict of a jury rendered by direction of the court, and also from an order, bearing date the 8th day of - March, 1907, and entered in said clerk’s office, denying the defendant’s motion, for a' new trial made upon the minutes, '
P. J. Rooney, for the appellant.
Frederic J. Swift, for the respondent.

Opinion:
Ingraham, J.:
Ferdinand Sohaettler, ihe'testator, died leaving a widow and four children and -a last will and testament which was duly admitted to probate.. That will contained the following provision :
" I would hereby suggest to my family my earnest desire that they should • conduct together, if such" a-result can -be amicably arranged, my business of cabinet maker and builder at -the factory now owned by me in Thirty-fourth street in this city, ánd.'whil'e 1 give no specific-directions-fearing some complication may arise therefrom, I nevertheless feel convinced -that the business now in .progress', if properly Conducted and continued by them would result to the- material advancement and benefit of my family and should they elect so to continue said business under the direction of my said executrix the privilege of so doing is granted by this my will. and an earnest wish expressed by me that they shall act harmoniously in the conduct thereof in such manner and on such terms as my said wife and executrix may elect in her discretion, leaving this matter absolutely and entirely with her."
Letters testamentary were issued to the defendant on August 10, 1893, and acting under the authority of this clause of the will she continued the business of " F. Schaettler." It would seem that the defendant had little to do with this business, but it was conducted by George Schaettler, the testator's son, who was her general representative in managing the business, and on Movember 17, 1904, there was published a notice that the executrix was the person who intended to deal under the name of " F. Schaettler," and to continue and carry on stich business of making and dealing in cabinet and architectural woodwork under such name of " F. Schaettler " in the city of Mew York, and that was signed by herself as " Executrix', of the' last, will and testament of Ferdinand Schaettler, deceased-." It appeared that during the periods that this business was conducted by the testator's son there was a voluntary" association known as the Association of Interior Decorators and Cabinet Makers of the City of Mew York, and that " George Schaettler," the testator's son, was a member of that association. Meither the testator nor the defendant, however, was a member of that association. There was also an association known as the Building Trades Employers' Association, but neither the defendant nor her son was ever either an associate or honorary member of that association. On June 13, 1904, George Schaettler applied to the City Trust, Safe Deposit and Surety Company of Philadelphia to procure a bond for $1,000. In this application he stated that his full name and principal place of business was "F. Schaettler, 533-537 W. 54. St. N. Y. C. Estate of F. Schaettler; " that he had answered that question for the purpose of procuring the above-mentioned bond; " and in consideration of the execution by the City Trust, Safe Deposit and Surety Company of Philadelphia (hereinafter called the Company) of the bond above applied for, I, (we) do hereby agree for myself, my (ourselves, our) heirs, executors and administrators to pay to the Company upon the execution of the said bond the premium of Five dollars, .* and to faithfully, fully and strictly-Comply with all the terms and conditions of the said bond and. to-keep harmless the Company from and'.against all suits, actions, loss,- damages, costs, charges, counsel fees-and expenses whatsoever, which the Company shall or may from any cause, at any. time sustain or in cur by reason or in consequence of the Company having given and executed the said bond, and to pay to the company all -damages for which the Company shall become responsible upon said bond before the Company shall b.e compelled to pay the same." This application was signed " F.' Schaettler, Géo.' Schaettler, Atty." The trust company executed the bond whereby " We, F. Schaettler (hereinafter called the Principal) and The City Trust, Safe Deposit and Surety Company of Philadelphia, ' (hereinafter called the Surety), are held and. firmly bound unto The Building Trades Employers' Association, and "Charles L. Eidlitz, as President of The Building Trades Employers' Association and his successors^ and the individual members thereof (hereinafter called the Obligees), in the su-m- of one thousand ($1,000) dollars." The, bon'd -then recited that the aforesaid principal had. been admitted as a represented member -of the' Building Trades Employers' Association upon.his'agreement.and stipulation that he would obey and execute all decisions, orders, prohibitions and regulations of the board of governors of .said Building Trades Employers' Association, .and also upon the execution and delivery of this undertaking to said association to pay to said obligees, the sum of $1,000 for liquidated damages to said -obligees by reason pf any non-compliance of said principal with said agreement - and. stipulation, and the bond was thereupon conditioned that if the said principal should duly and. faithfully obey and execute any and all such- decisions, orders, prohibitions and regulations of the said board of governors of the said Biiilding Trades Employers' Association, given in purstiance and under the authority of the constitution and bydaws, of said association then the undertaking should be void, otherwise to remain in full force and effect, and this instrument was signed by F. Schaettler, G. Schaettler, attorney, and by the trust company and delivered to the Building Trades Employers' Association.
O.-n November 17,1904, ijhe - trust company was notified by the-Building Trades Employers' Association that this bond had .beep. ordered forfeited by the board of governors, and a letter was written by the said association to " Hr. F.'Schaettler." that the bond had. been declared forfeited by the association and payment had been, demanded of the amount secured to be paid. There was evidence that charges had been made against the firm of F. Schaettler of having violated the orders of the board of governors of the Building Trades Employers' Association; that notice of such charges had been given to the firm of F. Schaettler, with a notice that the - charges had been referred by the board of governors to the grievance committee, and F. Schaettler was required to appear before the grievance committee on ¡November 1, 1904. On ¡November 2, 1904, the board of governors of this association passed a resolution that the bond of F. Schaettler be forfeited and F. Schaettler be expelled from the association. On October 25, 1904, notice was given to the trust company by F. Schaettler to refuse to pay the amount of the bond. Subsequently the surety company paid the $1,000 to the Building Trades Employers' Association and. then made a demand on the defendant as executrix for the amount of the bond that they had paid. That demand not having been complied with, this action was commenced and judgment has been rendered against the defendant as executrix of the estate of Ferdinand Schaettler, deceased.
The first and serious question presented is,.whether upon these facts there is any liability against the estate of Ferdinand Schaettler. In the first place, it is apparent that the estate of Ferdinand Schaettler was not a member of either of these voluntary associar tions. The membership of the Building Trades Employers' Association, by section 3 of its constitution, consisted of " any person who employs or any firm or corporation which employs labor in the building industry or who has or which has its individual capital invested in such business, or any person .who, on the date of 'the adoption of this constitution,-was a member in good standing in the Building Trades Association of the City of ¡New York." Section 4 provides that " Any employer, firm or corporation holding membership in a trade organization represented in the Board of Governors of the Building Trades Employers' Association shall be a member of the Association and known as a represented member. . * Any person of good- inoral character who is an employer of labor or has his individual capital invested in business (other than the building industry) is eligible and is herein designated as Associate-member." Section 11 proyides that " In order to insure the compliance with andobedience to the decisions, orders, prohibitions and regulations of the Board of -Governors, all Represented and Individual members shall give bonds to this Association. The form and .amount of such bonds^shall be determined by and satisfactory to the' Board of Governors." "George Schaettler, who, as a'representative of his mother, conducted this business of F. Schaettler, was á member of the Association of Interior Decorators and' Cabinet Makers. "This association was represented-upon the board of governors, and George Schaettler was, therefore; under section 4 of the constitution, a' represented member of the association;- George Schaettler, who became a representative member of this association, was, under the provisions of the constitution .before referred to,, required to give a bond to the association. He made an application for the bond in the name of the business carried on by his motílelas executrix, and,- under the name in which the business'was Carried on, agreed to indemnify- the plaintiff for any loss or damage' occasioned to them by reason of the execution of this bond.
Assuming that the defendant- would be individually liable, the' question is then presented as to whether the estate is liable. This obligation was not-created as a part of the business which the defendant was canning on under the provisions.of the will tó which reference has been made. So far as appears, the business obtained ho' advantage in consequence of this mémbership of George 'Schaettler in the voluntary association.
It is the settled doctrine of the'courts of common-law that a. debt contracted by an executor after the death of his testator, although contracted by him as executor, binds him individually, and does not bind the estate which- he represents, notwithstanding it may have been contracted for- the benefit of the estate. (Austin v. Munro, 41 N. Y. 360.) " It has Ibeen held in- numerous, cases that an executor, carrying on á trade under the authority of the will, binds himself individually by his contracts in the trade." (Willis v. Sharp, 113 N. Y. 586.)
The action is against the defendant-in her representative capacity, and a judgment in this action binds all the estate of the testator, whether or not it was invested in the business or used to carry it on under the power contained in the will. Whatever rights the plaintiff may have as against .the individuals who are carrying on the business, or would have in equity as against the- assets of the estate in the event that the executrix whose contracts are sought to be enforced should be insolvent, it seems to me clear, applying the principle clearly established, that at law no contract' made by the executor of the estate can be enforced against the estate. There is nothing in this will which authorizes the executrix to incur any liability on behalf of the estate, or, in express terms, makes all the assets of the estate responsible for the obligations of the business to be carried on, or authorizes the executrix to make contracts on behalf of the estate for that purpose. The executrix .is authorized to carry on the business theretofore conducted by the testator, and undoubtedly the assets of the. estate invested in the business- were exposed to the vicissitudes of the business, and the executor was •protected from any loss sustained in carrying out. the provisions, of the will in good faith; but- the executor is nowhere authorized to become a member of such a voluntary association or to pledge the assets of the estate for such a purpose. The agent -of the executrix, being a member of the association, applied for'and" obtained' á' bond to qualify him as such a member, and it may be claimed the defendant, through her agent, agreed to indemnify the surety oh that bond for any loss sustained by reason of its execution; but whatever the form of the obligation, and whatever obligation it would impose upon the executrix individually, it seems to me quite clear that it imposed no obligation upon the estate of which she was. executrix, and. that the judgment, therefore, cannot be sustained. . -
It follows that the judgment and order appealed 'from must be reversed and a new trial ordered, with costs to the appellant to abide the event. '
Patterson,' E.' J., Laughlin, Clarke and Houghton, JJ., concurred.
Judgment and order reversed, new trial ordered, costs to appellant to abide event.