Opinion
January 17, 1906.
J.I. Casey, for the appellant.
W.H. Weller, for the respondent.
James G. Hunt, as sole surviving trustee under the will of John Ingersoll, deceased, filed his petition for the judicial settlement of his accounts as such trustee in the Surrogate's Court of Herkimer county, and with the petition filed his account, in which it appears that the trust fund in his hands is invested in securities, except $669.14 in cash, in all at the inventoried and purchase price of the securities, amounting to $31,592.69, from which amount the trustee begs leave to credit himself or charge himself, as the case may be, with any depreciation or appreciation shown to have accrued upon converting the said securities into cash, as compared with the values set upon them in this account and statement as so inventoried and purchased, and particularly with respect to the securities listed as $11,000 in United States registered 4's, which were an actual investment made by the deceased testator, and were inventoried to the trustee at 121¼, and which are now believed by him to be marketable at much less than that sum, and not greatly in excess of their par value. It is stated in the petition that upon the death of Mary Hunt the trust estate vested in her heirs, the trustee and Loton S. Hunt, "each of whom is now entitled to an one equal half part thereof."
The citation issued upon filing the petition and account was returnable July 10, 1905, and the proceeding was adjourned to July thirty-first, at which time the trustee was directed to appear in the Surrogate's Court for the purpose of being examined in regard to his account, and with a view of determining the necessity of filing objections thereto.
On the twenty-ninth of July Loton S. Hunt filed objections to the account, in which it is alleged that by reason of the neglect of the trustee there has been a loss of principal of the securities, railroad and United States registered bonds, amounting to $2,562.25.
The contestant also, by his objections, seeks to charge the account of the trustee with other sums, amounting to several thousand dollars, and seeks to deprive the trustee of commissions.
July thirty-first the parties appeared before the surrogate. No examination of the trustee was required or had. Loton S. Hunt, in person, moved the court for an order directing an immediate division and transfer of a portion of the securities comprising the estate. The trustee opposed the motion and objected thereto, upon the ground that the surrogate had no jurisdiction, power or authority to make such an order; that the trustee was, as a matter of right, entitled to retain the securities and all the property and assets of the trust until a final order of distribution should be made. The court thereupon made an order as follows: "The trustee herein having filed his account of his proceedings as such trustee, together with a petition for the judicial settlement of said account, and a citation having been issued and returned with proof of due service of the same on all the parties to this accounting, and Loton S. Hunt, one of the beneficiaries under said trust, having appeared and filed objections to the account as filed, now, on motion of Loton S. Hunt, attorney in person,
"IT IS ORDERED, that pending the hearing upon said objections, and within five days from the service upon him of a certified copy of this order, said James G. Hunt, as trustee of the estate of John Ingersoll, deceased, duly assign, transfer and deliver to said Loton S. Hunt, One Registered U.S. Government Bond, of the face value of $5,000.00, and three Chicago, Rock Island and Pacific Refunding Bonds, of the face value of $1,000.00 each, and which are a part of the assets of said estate; that said trustee take a receipt for the same, and that upon the entry of a decree of judicial settlement herein, said trustee be credited with the value of said property as may hereafter be determined by the court."
Subsequently, upon motion, the order was resettled, so as to recite the appearance of counsel and objections made in behalf of the trustee in opposition to the order on the "ground that the Surrogate had no jurisdiction, power or authority to make such an order; that the trustee was entitled as a matter of right to retain the said securities and all the property and assets of the said trust fund until a final order of distribution was or should be made."
The Surrogate's Court did not have jurisdiction, power or authority to make the order.
It has always been held that Surrogates' Courts have only such jurisdiction as is expressly conferred upon them by statute, and it is expressly provided by section 2472 of the Code of Civil Procedure that the jurisdiction must be exercised in the cases and in the manner prescribed by statute. The Code provides when, upon the judicial settlement of the accounts of an executor or administrator, the court may order delivery of specific property.
"§ 2744. In either of the following cases the decree may direct the delivery of an unsold chattel, or the assignment of an uncollected demand, or any other personal property, to a party or parties entitled to payment or distribution, in lieu of the money value of the property:
"1. Where all the parties interested, who have appeared, manifest their consent thereto by a writing filed in the surrogate's office.
"2. Where it appears that a sale thereof, for the purpose of payment or distribution, would cause a loss to the parties entitled thereto.
"The value must be ascertained, if the consent does not fix it, by an appraisement under oath, made by one or more persons appointed by the surrogate for the purpose."
This section of the Code is, by section 2811, made applicable to the judicial settlement of the accounts of testamentary trustees. The executor or administrator is required by due course of administration to reduce the assets to cash ready for distribution upon the judicial settlement of his accounts, except for some cause shown, in which case section 2744 becomes applicable.
The procedure to compel the delivery of property by a testamentary trustee to a person entitled thereto by the terms of a will, is regulated by sections 2804-2806 of the Code.
The statute does not make any provision whatever for a partial distribution of the assets of an estate by a testamentary trustee upon the judicial settlement of his accounts.
There is no provision of the statute which permits a Surrogate's Court, as provided by the order, to fix the value of property for the purpose of distribution.
The assets of the trust should remain in the custody of the trustee until the final decree, when the proper procedure may be had as to the distribution of any specific property remaining in his hands belonging to the trust.
The order should be reversed.
All concurred.
Order reversed, with ten dollars costs and disbursements, and application denied.