Court Opinion

ID: 5814751
Source: CourtListenerOpinion
Date Created: 2022-01-12 19:29:43.742661+00
Date Added: 2024-06-11T08:42:58.110650
License: Public Domain

Capozzoli, J. (dissenting in part).
I join my colleague, Mr. Justice Nunez, in his dissent and concur in his views.
I would add, by way of emphasis, that, as was noted by Mr. Justice Nunez, there is a difference between the case of Menzel v List (24 NY2d 91) and the case at bar. In the former the court was dealing with a painting which was stolen, The thief could at no time convey a .good title, so that anyone who came into possession of that painting was subject to an order of the court to deliver same to the true owner or, if that could not be done, then to pay to the true owner the value of same as of the time of the decree. The situation in the case at bar does not deal with stolen paintings. The executors and trustees were expected, by way of discharging their duties, to turn the assets of the estate into cash. They were authorized and expected to sell. As was noted by the Surrogate in his comprehensive decision (84 Mise 2d 830, 876): "If in the area of trusts and estates the sole purpose of damages is to make the beneficiary whole, it would seem that when a fiduciary is authorized to sell and he sells to himself or to another with whom he is closely associated, the actual injury to the beneficiary is the difference, if any, between the price paid and the price which could have been obtained on the market.”
The Surrogate then went on to discvfss the award of appreciation damages under certain conditions and said (p 877): "While such damages might not be absolutely necessary for adequate protection of the beneficiary, the awarding of such consequential damages is justified as a deterrent to future conduct of this nature by fiduciaries.” But, he cites no relevant authority for this statement. I do not believe that, under the circumstances of this case, punitive damages should be awarded. I can understand the different measure of damages where the trustee sells trust property which it is his duty to retain. Again, this is not our case. The executors were not directed to distribute in kind. They had the power of sale.
It has been noted that the Surrogate, while holding appellants, Reis and Stamos, liable for the paintings as of the time of the decree, he did hold appellant, Levine, liable only for the actual value of the paintings as of the date of the sales. It is difficult to understand why these three appellants should be *507treated differently. Whatever damages were suffered by the estate, the Surrogate found they were suffered by the actions of these three executors. The three of them are in the same position to the estate. Each of them should be held to answer for the same measure of damages. In effect, they are charged with failing to get fair market value for the paintings sold by them. Hence, if it be shown that they were sold for less than the market value, as a result of the breach of trust by these executors, then the estate is entitled to be given the difference between the market value and what was actually obtained. I know of no principle of law which justifies the position of the majority in distinguishing the actions of Levine from those of Reis and Stamos on the basis of activity and deliberateness. The rule is clear, they are subject to the same liability for their failure to carry out their duties as fiduciaries.
Therefore, with Mr. Justice Nunez, I would modify to remand this case but only to determine the reasonable value of the paintings as of May, 1970, and award damages, if any, without any consideration of punitive damages, as they should not be awarded in this case. The damages properly due to the beneficiaries are compensable damages which are intended to make the beneficiaries whole.