Case Name: Matter of Estate of Michael O'Connell, Deceased
Court: New York Surrogate's Court
Jurisdiction: New York
Decision Date: 1892-11
Citations: 1 Misc. 50
Docket Number: 
Parties: Matter of Estate of Michael O’Connell, Deceased.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 1
Pages: 50–54

Head Matter:
Matter of Estate of Michael O’Connell, Deceased.
(Surrogate's Court—Essex County,
November, 1892.)
After payment of debts and legacies, the residue of an estate was left to testator’s son. The personal assets were insufficient for the payment of debts. After the father’s death, the son insured a house and barn belonging to his testator, loss, if any, payable to the estate. The son was afterwards appointed administrator with the will annexed and pending a proceeding by a creditor to sell the real estate for the payment of debts, the house and barn were destroyed by Are. The administrator made proof of loss, stating that the property destroyed belonged to his testator’s estate and received §700 in full for the loss, receipting therefor as administrator. Held, that the money received from the insurance company belonged to testator’s estate and should be applied to the payment of his debts.
The son claimed that the loss was made payable to the estate by mistake of the agent who wrote the policy. Held, that his contention was not supported by the evidence.
Application by A. S. Prime, a creditor of the estate of Michael O’Connell, deceased, to compel the administrator, with the will annexed, to render an account, pay certain claims against the estate, and for such other and further relief as may be just.
F. A. Smith, for petitioner.
P. C. McRory, for contestant, Michael O’Connell, administrator with the will annexed.

Opinion:
McLaughlin, S.
Michael O'Connell died in 1884, leaving a last will and testament, by which he devised, subject to the payment of his debts and the payment of certain legacies, all his real and personal estate to his only son, Michael, the contestant, and the present administrator with the will annexed. At the time of O'Connell's death, he was possessed of real estate of the value of $1,350, and also personal property of the value of about $310. The will was admitted to probate and letters testamentary thereon, issued on the 15th day of January, 1887, to the executor named in said will, one William J. Harrington, who qualified, and continued to act, as executor until September 23, 1889, when a judicial accounting Aims had in this court, and a decree entered. This decree shows that the total amount of personal estate which had come to the hands of the executor was $316.38, and the total expenses of administration, $395.73, and that valid claims against the estate had been presented and allowed, amounting in the aggregate to nearly $900, and among the other claims presented and allowed was the claim of the petitioner. On the 23d day of January, 1890, the petitioner commenced proceedings in this court for the disposition of the real estate of said deceased for the payment of debts, and thereafter, said proceeding was prosecuted to a sale, and all of the real estate of said deceased, on the 26th day of December, 1890, sold, and the proceeds realized therefrom applied towards the payment of debts, not enough, however, being realized to pay the debts in full. After making such application, there remained due the petitioner upon his own claim and claims which had been theretofore duly assigned to him, the sum of $244.91, and no question is made upon this proceeding, but that the claim of the petitioner is a valid claim against the estate, and that there is due him the sum of $244.91. On March 23,1890, and while the proceeding above mentioned, was pending for the sale of the real estate, Harrington resigned as such executor, and the present administrator, on the same day, upon his own application, was appointed administrator, with the will annexed. At the time of the death of the deceased, he held a policy of fire insurance upon the house and barn which stood upon the real estate above mentioned; which policy of insurance was thereafter, and while Harrington was executor, twice renewed, or new policies issued. The last policy, so issued, expired April 20, 1,889, and on that day, at the request and on the application of the contestant, a new policy of insurance was issued by the .¿Etna Eire Insurance Company upon the house and barn, the loss, if any, being made payable to the " estate of Michael O'Connell, deceased." On the 30th day of January, 1890, the house and barn mentioned in the policy were destroyed by fire, and thereafter the contestant, as the " administrator of the estate of Michael O'Connell, deceased," made proofs of loss, and verified the same by his affidavit, in which he stated, among other things, that the property destroyed belonged to the " estate of M. O'Connell, deceased," and immediately thereafter, and on the 6th of March, 1890, the insurance company paid to the contestant, " as the administrator of M. O'Connell, deceased," the sum of $700, in full for such loss, and the said Michael, as the administrator of the estate of his father, gave to said insurance company his written receipt therefor. It is conceded that the property destroyed belonged to the estate of Michael O'Connell, deceased, and that any loss occurring thereunder was, by the terms of the policy, made payable to said estate. It is also conceded, that the contestant,'as the administrator of the said estate, made proofs of loss, received the insurance money, and receipted for the same as such, and that he has never accounted for this money or any part of it. The claim of the contestant is, that the money received from the insurance company does not belong. to the estate of Michael O'Connell, deceased, but that it belongs to him personally, because, when the policy was issued, he instructed the insurance agent who wrote the policy to make the loss, if any, payable to him; and that he personally paid the premium on the policy, and supposed the policy was so issued until after the loss occurred. That it was made payable to the estate by the mistake of the agent who wrote the policy. The only question, therefore, presented upon this application is: Whether the money received from the insurance company is part of the assets of the estate of Michael O'Connell, deceased, and to be administered as such by the administrator, or whether it belongs personally to the contestant.
Conceding the contention of the contestant, viz., that he gave directions to the insurance agent to issue the policy to him personally, and that the same was made payable to the estate only by a mistake of the agent who wrote the policy; or, conceding that the policy had been issued just as contestant claims it should have been, I am of the opinion that this money would, in that event, belong to the estate, and should be applied towards the payment of the debts of the deceased. The contestant could have no interest in the property covered by the"' policy, except by virtue of his father's Will; the only right or interest he had, or could have, was by virtue of that paper. The will directs that the property of the intestate shall be first used to pay his debts and certain legacies, and after the payment of such debts and legacies, then the remainder, if anything, to belong to the contestant. So that the contestant could have no interest in any of the property as against creditors until their claims had been paid; and, while he might assume or attempt to act so as to protect only his own personal interest in the property devised, yet whatever pecuniary benefit was derived from the property for such acts of his, must be held to be for the benefit of creditors until their claims had been satisfied; to hold otherwise would be to defeat the intention of the intestate as expressed in the will. When the contestant assumed to act, assumed to claim an interest in the property, even an insurable interest, he could only do so by first protecting creditors, managing the property as a trustee, as it were, for their benefit. He held all of the property in trust for the benefit of creditors and legatees until the debts and legacies were fully paid. It is true, he was not obliged to pay his father's debts ; he was not obliged to pay the legacies mentioned in the will; he was not obliged to do any act in reference to carrying out the intention of his father as manifested in the will; but when he once assumed to act, which he did, according to his own contention, by attempting to insure his personal interest in the property devised, then, that moment, there was a legal obligation upon his part to so use and protect the property devised, that it should first pay the debts of the deceased. But the contention of the contestant, that the policy was made payable to the estate by a mistake, is not supported by the evidence in the case; on the contrary, the evidence clearly shows that when the policy was issued it was contestant's intention to protect the interest of the estate, and not solely his personal interest. The policy itself is made payable to the estate. The proofs of loss, which were made out and verified by the contestant himself, state that the property belonged to the estate. lie receipted for the money as administrator, and every act which he took in relation to the insurance or the collection of the insurance money, would seem to indicate clearly his intention in that respect as above expressed.
I am of the opinion, therefore, that the money received from the insurance company belongs to the estate of Michael O'Connell, deceased, and that the application of the petitioner should be granted, -with thirty-five dollars costs, and witnesses' fees, and fifteen dollars, fees of stenographer, to be paid out of the estate, and an order may be entered to that effect.