Court Opinion

ID: 6152716
Source: CourtListenerOpinion
Date Created: 2022-02-05 16:07:12.519046+00
Date Added: 2024-06-11T08:55:06.239509
License: Public Domain

Foley, S.
It appears from the testimony taken by the referee that the respondent, executor, deposited the funds of the estate in a bank account in the name of a personal employee in violation of the provisions of section 231 of the Surrogate’s Court Act, which requires an executor to maintain the estate moneys in a bank account in his name as executor. The individual chosen by him was apparently without financial responsibility and the trust funds were thereby imperilled. In addition her funds and his personal funds Were mingled in this same account. On the hearing for the revocation before me both sides rested on the testimony given in the reference and upon the petition and answer herein.
It also appears that this violation was not isolated but was continued for a period of six years by the respondent. The duty imposed upon fiduciaries by section 231 of the Surrogate’s Court Act is based upon sound public policy. It is a salutary protection to beneficiaries of estates. It tends to prevent diversion and defalcations by representatives of estates. It prevents the mingling of trust funds. It furnishes in piany cases effective means of tracing the trust property. It earmarks the trust funds and affords an opportunity for beneficiaries to verify the receipts and disbursements of the executor, administrator, guardian or trustee. Its effect is to charge third persons dealing with a representative with knowledge that the funds of the estate are being used for a particular purpose which may be hostile to the trust. Under section 104 of the Surrogate’s Court Act, subdivision 7, a violation of the duty to deposit the funds in the name of the executor is a cause for the revocation of letters or the removal of the executor without even the necessity of citation to him. In the estate here involved, the contention of the executor that he was entitled to use the funds of the estate to reimburse himself for alleged advancements made by him in no way excuses his disobedience of his statutory duties. The duty still existed to make the deposits in a legal manner. The statute is plain. Its violation is not only a ground for removal, but also a misdemeanor. The fact that it was violated is not disputed by the respondent and his answer furnishes no adequate explanation or excuse for his misconduct.
The letters testamentary are, therefore, revoked. Submit decree on notice accordingly.