Case Name: DUNNE v. AMERICAN SURETY CO. OF NEW YORK
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1899-07-18
Citations: 59 N.Y.S. 429
Docket Number: 
Parties: DUNNE v. AMERICAN SURETY CO. OF NEW YORK.
Judges: 
Reporter: West's New York Supplement
Volume: 59
Pages: 429–439

Head Matter:
(43 App. Div. 91.)
DUNNE v. AMERICAN SURETY CO. OF NEW YORK.
(Supreme Court, Appellate Division, First Department.
July 18, 1899.)
1. Executors and Administrators—Administrator De Bonis Non—Powers
—Suit on Predecessor’s Bond.
Code Civ. Proc. § 2606, provides that, where an executor dies, the surrogate court has the same jurisdiction, on petition of his successor, to compel the executor or administrator of decedent to account, that it would have against decedent if his letters had been revoked. Section 2605 empowers the surrogate to compel the person whose letters have beén revoked to deliver the property, and generally settle his account. Section 2606 provides that, for the purpose of maintaining an action upon decedent’s official bond, a decree against his executor or administrator, rendered upon such accounting, shall have the same effect as if an execution issued on a surrogate’s decree against the property of decedent had been returned unsatisfied during decedent’s lifetime. Section 2608 provides that, where letters have been revoked by decree of surrogate’s court, the successor may maintain an action on his predecessor’s official bond, and recover the full value of any property received by the principal and not duly administered by him, and to the full extent of any injury sustained by any act or omission of the principal; the money recovered in such action to be regarded as part of the estate. Held, that the administrator de bonis non is exclusively authorized to recover from the sureties of his deceased predecessor for wrongful conversion of testator’s property, the proceeds of the property sold being considered as in the hands of the deceased administrator.
2. Same—Leave to Sue on Bond.
Code Civ. Proc. § 2.609, providing that where letters are revoked, and no successor is appointed, a person aggrieved, who desires to sue upon the bond, must obtain leave, lias no application to the case of an administrator de bonis non appointed to succeed a deceased predecessor, and does not require that, as a condition to a suit on his predecessor’s bond, he first obtain consent. •
3. Same—Administrator not Public Officer.
Code Civ. Proc. § 1888, requiring leave of court to prosecute official bonds of public officers in general, where special provision is not otherwise made by law, has no application to an action by an administrator de bonis non on the bond of his predecessor; section 1890, which enumerates the officers intended, not including administrators.
4. Same—Equitable Action.
Consent to bring an equitable action by an administrator against the surety of his predecessor for maladministration need not be first obtained.
6. Same—Necessary Parties.
The administrator de bonis non being the representative of the estate until it shall have been fully administered, next of kin are not necessary parties to an action against the sureties of his deceased predecessor for maladministration.
Bumsey, J., dissenting.
Appeal from special term, New York county.
Action by Frank J. Dunne, as administrator de bonis non of the estate of Terence A. Macaulay, deceased, against the American Surety Company of New York. From an interlocutory judgment overruling a demurrer to the complaint, defendant appeals.
Affirmed.
Argued before BABBETT, BUMSEY, PATTEBSON, and O’BBJEN, JJ.
D. J. M. O’Callaghan, for appellant.
Wm. P. Maloney, for respondent.

Opinion:
BABBETT, J.
We are all agreed in this case, except as to the question whether it was necessary for the plaintiff to obtain leave to bring the action. It is proper that we should give the reasons which, in the judgment of tire majority, call for a different conclusion upon this point from that reached by Justice BUMSEY. A few words, too, may not be inappropriate as to the other questions. Our agreement with Justice BUMSEY as to the plaintiff's right to maintain the action does not rest wholly upon the authority of Walton v. Walton, 4 Abb. Dec. 512. The allegation of the complaint there was that the deceased executor had in his hands, at the time of his death, unadministered assets of his testator. It was held that the administrator de bonis "non could recover these assets from the executor of the deceased executor,—in specie, if unconverted; their value, if converted into money. The conversion without an appropriation of the money to the purposes of the estate was deemed but a partial administration. "Administration of assets," said Judge Hogeboom, "implies such a complete disposition of them as not only to collect them from the debtor of the estate, if they are in that condition, but finally to place them in the hands of the creditor, legatee, or distributee to whom, after undergoing the process of administration, they finally belong. As before stated, they had not undergone this latter process; and we are obliged, in the state of facts in which the parties have presented the case to us, to assume that the assets required further administration." The question whether the action could have been maintained for a devastavit was not discussed. Nor was it discussed in Clapp v. Meserole, *40 N. Y. 288. The court there simply held, following Walton v. Walton, that an administrator de bonis non can maintain an action against the representatives of a deceased executor who died without applying the assets which had come to his hands. In the case at bar the allegation is that the deceased administrator converted the proceeds of his testator's property to his own use. There would seem to be no substantial distinction in principle between the cases. In legal intendment, the proceeds of the property sold were here in the hands of the deceased administrator. These proceeds were not administered, in the sense of "administration" as defined in Walton v. Walton. Practically, it is immaterial whether incomplete administration, resulting from the failure to place these proceeds in the hands oí the persons to whom they finally belonged, was caused simply by their retention, or by the administrator's personal use of the funds. It is correctly stated in 2 Am. & Eng. Enc. Law (2d Ed.) p. 1331, that the authority of administrators de bonis non has been extended in the United States far beyond that which was accorded to them at common law, and in many states of the Union it has been expressly held that such an administrator may recover against his predecessor or his predecessor's representatives for any devastavit or maladministration. See cases cited in note 1 of the volume referred to.
We prefer, however, to fortify our conclusion that the plaintiff may maintain this action by a reference to the provisions of the statute. Section 2606 of the Code of Civil Procedure provides that, where an executor or administrator dies, the surrogate's court has the same jurisdiction, upon the petition of his successor, to compel the executor or administrator of the decedent to account, which it would have against the decedent if his letters had been revoked by a surrogate's decree. Upon such revocation of letters the surrogate has full jurisdiction to compel the person whose letters have been revoked to account for or deliver over money or other property, and generally to settle his account. Section 2605. Section 2606 further provides that:
"With respect to the liability of the sureties in, and for the purpose of maintaining an action upon the decedent's official bond, a decree against his executor or administrator, rendered upon such an accounting, has the same effect as if an execution issued upon a surrogate's decree against the property of decedent had been returned unsatisfied during decedent's life-time.''
Section 2608 then provides:
"Where letters have been revoked by a decree of the surrogate's court,' the successor of the executor, administrator, or guardian, whose letters are so. revoked, may maintain an action upon his predecessor's official bond, in which he may recover any money, or the full value of any property, received by the principal in the bond, and not duly administered by him; and to the full extent of any injury, sustained by the estate of the decedent or of the infant, as the case may be, by any act or omission of the principal. The money recovered in such action is regarded as part of the estate in the hands of the plaintiff, and must be distributed or otherwise disposed of accordingly."
It is apparent from these provisions that the purpose of the legislature was to leave no further trace in the law of this state of the common-law rule that assets converted by the executor or administrator were, technically speaking, administered. We agree with the learned author of the notes to Hodge v. Hodge (Me.) 40 Lawy. Rep. Ann. 54 (s. c. 38 Atl. 535), that "in 1880 the provisions of the Code authorized a recovery by the administrator de bonis non from his predecessor for a balance, or accounting, or conversion, or maladministration." It should be observed in this connection that where letters are revoked, and a successor appointed, no provision is made for leave to sue upon the bond. Section 2608. Where, however, letters are revoked, and no successor is appointed, the person aggrieved, who desires to sue upon the bond, must obtain leave. Section 2609. The reason is obvious. The person aggrieved is not exclusively vested with the cause of action. His ac tian is "on behalf of himself and all others interested." The successor, however, when appointed, is exclusively vested with the cause of action. He represents the estate, the creditors, next of kin, and all persons who may be interested in the estate. By analogy, the same rule applies in the case of a deceased administrator. Upon the appointment .of his successor, the latter succeeds to all the powers and duties of his predecessor. The administration of the successor is no longer regarded as separate and distinct from the preceding administration, as it was at common law, but, rather, as a continuation of it,—the one beginning where the other left off. 2 Am. & Eng. Enc. Law (2d Ed.) p. 1331. The Code, however, makes one important distinction between a deceased administrator and one whose letters have been revoked. In the former case, where a successor is not appointed, no provision is made for an action upon the administrator's bond by "persons aggrieved," while in the latter such provision is made. The Code does not seem to contemplate the possibility of failure to appoint a successor to a deceased administrator. At all events, the effect of this distinction is to limit an "aggrieved person's" right of action at law upon an administrator's bond to cases of revocation. In the case of death, such a person can proceed at law only through the instrumentality of a successor. Neither of these sections, however, has any relation to an action in equity based upon the impossibility of securing redress at law. Their significance, so far as concerns the present question, is only in the plain implication that, when a successor to a previous administrator is appointed, all rights of action, whether at law or in equity, either against the predecessor or his perspnal representatives, are vested in such successor. The right of action being thus vested in the successor, to the exclusion of persons interested in the estate, leave to sue is unnecessary. This would be so even were the action one at law upon the bond. Justice RUMSEY concedes that sections 2606 to 2609 of the Code contain no express provision requiring the successor of a deceased administrator to obtain such leave. He thinks, however, that it is within the reason of the requirement of section 2609 with regard to an action by "persons aggrieved," where no successor is appointed. If so, why did not the legislature so provide? Such a requirement is hardly the subject of implication. To say that it is within the reason of the requirement of section 2609 is seemingly but another way of saying that it would have been well for the legislature.to have thus extended that requirement. We think, however, that the omission was intentional and was well advised. The only purpose of requiring leave to sue was to save sureties from the harassment of unnecessary actions. Where that annoyance was possible, we find the requirement. Where, however, but a single action by a responsible successor is contemplated, it is omitted. So we also find it omitted in section 2607, where a right of action upon the bond is given, without obtaining leave, to the person in whose favor a decree against the administrator has been granted. It is in fact omitted in every instance where the right of action is given to a particular individual or representative of the estate, and it is inserted only where, in the absence of a representative, all persons interested in the estate are indiscriminately authorized to sue.
The suggestion that the case, on this head, is also within the provisions of section 1888 of the Code, will hardly bear analysis. The article in which this section is found relates to actions upon official bonds. The first eight sections (sections 1880 to 1887) relate to sheriffs, surrogates, and county treasurers,—plainly' public officers. Section 1888 then provides for obtaining leave to prosecute the official bonds of public officers in general, where special provision is not otherwise made by law. It is quite clear from the context that executors and administrators (other, of course, than the public administrator) are not public officers, within the meaning of this section. If they were, it would have been quite unnecessary to enumerate, as was done in section 1890, the officials who are embraced within section 1888, namely, "a receiver, an assignee of an insolvent debtor or a trustee or other officer, appointed by a court or a judge." That an ordinary administrator was not comprehended within the expression, "other officer appointed by a court or a judge," is apparent from what immediately follows, namely, that:
"Where he was appointed by or pursuant to the order of a court, the application for leave to prosecute his official bond must he made to the court by which or pursuant to whose order he was appointed. * =•• * An action brought as prescribed in this section must be brought in the court to which application is made for leave to bring it."
Thus, administrators could not well have been intended, for no such action can be brought in the surrogate's court, and yet no application for leave to sue can be made in any other court. The provisions of the article relating generally to letters, already referred to, were undoubtedly deemed "special provision made by law" for administrators.
We have thus gone over these Code provisions, quite as though this were an action at law upon the bond. The contention that leave to prosecute the bond was required proceeds solely upon this inaccurate view of the nature of the action. It is essentially an action in equity. It alleges the special circumstances which make it impossible for the plaintiff to obtain against the deceased administrator or his representatives a decree or order of the surrogate's court of the county of New York. It shows that, owing to these special circumstances and this consequent inability, the plaintiff can never point to a literal breach of the condition of the bond. It shows, however, what equity will treat as a breach, in every essential and substantial particular,—that the administrator did not faithfully execute the trust reposed in him as administrator, and that he so conducted himself that no decree can be made or obedience enforced against him or his representatives. The learned counsel for the surety frankly asserted upon the argument that there was here a wrong without a remedy; that the surety could not be made liable in any manner, or under any circumstances, unless there were a literal breach of the precise condition of the bond, namely, "to obey all lawful decrees and orders of the surrogate's court." If he is right in this assertion,—if, indeed, Bischoff v. Engel, 10 App. Div. 243, 41 N. Y. Supp. 815, and Scharmann v. Sckoell, 23 App. Div. 399, 48 N. Y. Supp. 306, were not well decided,—then any administrator who leaves the jurisdiction, taking the assets of the estate with him, and dying abroad, penniless, after having squandered such assets, practically nullifies the security given for the faithful performance of his trust. We advert at this time to these considerations for the reason that they lie at the root of the action itself, and yet they constitute the very considerations upon which the court would naturally be moved for leave to bring the present action. Whether there are merits in the plaintiffs alleged equity is something to be determined upon the trial, not upon a preliminary motion for leave to present that equity. There is no more reason for compelling him to apply for leave to bring, such an action than there would be for compelling him to so apply before commencing any other action which may be cognizable on his behalf in equity. However the action may be viewed, therefore, that point of demurrer is not well taken.
Our conclusion is that the action is well brought by the administrator de bonis non, and that leave to prosecute the bond was not essential to its maintenance. This conclusion is supported by the following authorities, as well as those already cited: Haines v. Meyer, 25 Hun, 414; Deposit Co. v. Pratt, Id. 23; Williams v. Kiernan, Id. 358. See, also, Harrington v. Keteltas, 92 N. Y. 40; Wiggin v. Sweet, 6 Metc. (Mass.) 194; and 2 Woerner, Adm'n, p. 749.
We may add that, though the bond runs to the people, it so runs in form only, for the benefit of those to whom the right of action thereon is given by the statute. Here, as we have seen, the right of action at law upon this bond is, by the Code provisions, expressly given to the successor of the deceased administrator, upon his obtaining a decree against the latter's personal representatives, as provided in section 2606, supra. It is because this latter prerequisite to the action at law has, by the misconduct of the deceased administrator, been rendered impossible of procurement, that equity lends the plaintiff its aid. In doing so, it but affords him the indemnity which was the essential feature of the contract, and was necessarily in the contemplation of the sureties when they signed it in assumed good faith. In other words, equity enforces the substantial obligation, and relieves the plaintiff from a technical preliminary requirement, which, upon the facts averred, is but purely formal and nonessential. As representative of the estate and of all parties in interest therein, his is the legal right to indemnity, and the maintenance of this action to procure that indemnity in the only possible way is but the equitable sequence to that legal right.
The interlocutory judgment overruling the demurrer was right, and should be affirmed, with costs. All concur, except RUMSEY, J., dissenting.