Opinion
May, 1900.
Andrew M. Clute (George H. Harman, of counsel), for appellant.
Dennis McMahon, for respondents.
This is an action brought by all the next of kin of James Keegan, deceased, except the defendant, Michael Keegan, who is the administrator of said James Keegan, deceased, against John Smith and Edward McGuire, who are the sureties of said administrator's bond. John Smith only defends. The issues herein, with the exception of one, have been discussed and decided by the Appellate Division on a former appeal. See McMahon v. Smith; Keegan v. Smith, 24 A.D. 25.
The defense or issue, which constitutes the one exception, above mentioned, is set up in an amended answer, interposed after the decision of the above-cited cases, and is as follows: That the surety of the administrator is not liable for the three judgments obtained by the administrator's intestate, in her lifetime, against the administrator, because the latter was, at the time of the death of the intestate, and ever since, has been insolvent and wholly unable to pay said indebtedness. The liability imposed by 2 Revised Statutes, m.p. 84, section 13, is as follows: "The naming of any person executor in a will, shall not operate as a discharge or bequest of any just claim which the testator had against such executor, but such claim shall be included among the credits and effects of the deceased, in the inventory; and such executor shall be liable for the same, as for so much money in his hands * * * and he shall apply and distribute the same in the payment of debts." Under this statute, it has been held that an executor, although insolvent at the time of his appointment, is bound to account for a debt so due from him, and should be charged therewith on settlement of his accounts as for so much money in his hands. Baucus v. Stover, 89 N.Y. 1. It was also held, that, under this statute, the liability of an executor or administrator is a qualified one, and that if the proofs show that the executor was wholly unable to pay his debt to the estate, for want of property, he cannot be punished for contempt, nor would he be guilty of embezzlement. Baucus v. Stover, 89 N.Y. at p. 5; Baucus v. Barr, 45 Hun, 582; affid., 107 N.Y. 624. The executor or administrator is, however, subject to all provisions of law applicable to the enforcement of decrees and orders of surrogates, relating to the estate and its property, when he has received property or ought to have received it, by the exercise of proper diligence, as enjoined upon an executor or administrator by law. The question now is, "Will the surety of an administrator be held responsible for the latter's debts to the estate as for so much money received?" Certainly he will be, provided it was established by the evidence, that by proper diligence and faithful execution of the trust on the part of the executor or administrator, he ought to have or could have so much money in his hands. The evidence adduced at the trial is sufficient to sustain the sixth finding of the court, to wit: "That the administrator should have accounted for said judgments, as debts due from him to said estate, as he was able to pay them, and that the said administrator should be charged with the same." There is evidence that the administrator, about five or six months before the deceased's death, disposed of a liquor store at $5,250 and sold a horse for about $700 to $800, and that from $2,000 to $3,000 of that money was deposited in his wife's name in a savings bank. From this the inference may well be drawn, that the administrator was able to pay the three judgments, owing by him to the estate. Furthermore, the question of the administrator's ability to pay was inquired into by the referee, Bradley, on the administrator's accounting before the surrogate and the said referee's report, with the evidence taken by the referee annexed and surrogate's decree thereon, were put in evidence herein. Said referee did report, in his fifth finding, that the administrator should have accounted for said judgments and debts due said estate from him; and the said surrogate's decree entered on said report and evidence annexed adjudges that the administrator should account for such judgments and should be personally charged therewith, and the evidence then before the surrogate warranted said conclusion. On the former appeal, 24 App. Div., supra, the Appellate Division held that this decree is conclusive upon the administrator and also upon the surety, who is in privity with the administrator. For said indebtedness on the part of the administrator, his surety is liable, because the surety's obligation under the bond is conditioned upon "Michael Keegan (the administrator) faithfully executing the trust reposed in him as administrator of all and singular the goods, chattels and credits of Jane Keegan, deceased, and obeying all lawful decrees and orders of the Surrogate's Court of the City and County of New York, touching the administration of the estate committed to him." The administrator failed to fulfil either of the said two obligations. His failure makes the surety liable.
Judgment affirmed, with costs.
FITZSIMONS, Ch. J., concurs.
Judgment affirmed, with costs.