Court Opinion

ID: 3581169
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:32:15.933594+00
Date Added: 2024-06-11T07:41:30.729404
License: Public Domain

Section 109 of the Surrogate's Court Act gives a surety an absolute right to retire. In a proceeding under that section by a surety for a release, the only parties are the surety and the fiduciary-principal. The beneficiaries of the trust are not to be cited. Where no accounting has been made in the course of the proceeding (as was the case in this instance) it may very well result that *Page 196 
the beneficiaries will have no notice of a substitution of sureties until the fiduciary thereafter makes an accounting — perhaps after delay such that the beneficiaries may then meet sizable difficulties in fixing the period during which a default of their fiduciary occurred.
The application of a surety for a discharge does not diminish the powers of the fiduciary until on his failure to give a new bond (as was not the case in this instance) the fiduciary's letters have been canceled. It is true that in a proceeding under section 109 a successor surety has the right to have completed transactions in the estate closed up. But it is only completed transactions of the fiduciary that can be so concluded.
Consequently, as I apprehend, the beneficiaries of an estate will be seriously prejudiced in the practical enforcement of their rights if (as the court now holds) the liability of a substituted surety is to begin only as of the date when the former surety is let out. I cannot believe that by section 109 of the Surrogate's Court Act the Legislature intended so to improve the interests of business sureties to the disadvantage of beneficiaries of their undertakings. (Cf. Scofield v.Churchill, 72 N.Y. 565.) The fact is that section 109 says nothing in respect of the inception or extent of the liability of a successor surety.
The order of the Appellate Division should be reversed and the decree of the Surrogate's Court affirmed, with costs in this court and in the Appellate Division to all parties filing separate briefs payable out of the estate.
LEHMAN, Ch. J., LEWIS and DESMOND, JJ., concur with FINCH, J.; LOUGHRAN, J., dissents in opinion in which RIPPEY and CONWAY, JJ., concur.
Orders affirmed, etc. *Page 197