Opinion
Argued January 27, 1882
Decided April 11, 1882
William Allen Butler for appellant. E.L. Fancher for respondents.
We are of opinion that upon a reference under the statute, of a disputed claim against the estate of a deceased person, there is no power either in the referee or the court to render an affirmative judgment against the claimant, upon a counter-claim, in favor of the executors. The question in controversy which is submitted to the referee on such a reference is, whether the claimant has a just claim against the estate of the deceased, and for the purpose of determining this question the referee may consider and pass upon any defense, legal or equitable, and any offset which the executors, etc., may give in evidence for the purpose of reducing or extinguishing the demand of the claimant. In trying and adjudicating upon these matters, which are within the scope of the reference, the statute (2 R.S. 88, § 36) confers upon the referee and the court the same powers as if the reference had been made in an action. But the proceeding is not an action ( Roe v. Boyle, 81 N.Y. 305), and no power is conferred to render an affirmative judgment therein for the executors and against the claimant, or to certify a balance in their favor and render judgment therefor, and we know of no precedent for such a judgment.
If the executors have a demand against a claimant, exceeding the amount claimed by him, they cannot resort to this special proceeding for its recovery. Their proper course for the accomplishment of that purpose is either to bring their own action, or to put the claimant to an action and not to agree to refer under the statute. The provisions of the Code in respect to counter-claims cannot be complied with in this proceeding, and no mode is therein provided for setting up, or giving notice of a claim for affirmative relief against the claimant, or for bringing in additional parties. The claimant, when he consents to refer, is not notified that he thereby subjects himself to an affirmative judgment against him, or that such a judgment will be sought, and it may be that he would not have consented to the reference had he been informed that it might be attended with such a result.
The executors can undoubtedly avail themselves of their set-off or counter-claim, to the extent necessary to extinguish the demand of the claimant. What effect their so doing would have upon an action afterward brought by them for the residue (if any) of their claim, and whether they could divide their claim by setting off part and bringing an action for the residue, it is not necessary now to consider. Nor need we now determine what effect a judgment in favor of the claimant would have if the executors should withhold or withdraw their counter-claim from the consideration of the referee and afterward bring a separate action therefor. But in view of the difficulties arising from these doubts, probably the safer course for the executors in the present case would be to commence an action upon their counter-claim, and stay or enjoin proceedings on the reference until the determination of such action.
It is entirely optional with the executors whether or not to agree to such a reference. It involves the questions only of delay and costs, and if they desire to prosecute a demand against the claimant they cannot well avoid that inconvenience and risk.
The absence of any precedent for a judgment, or application for a judgment of the description now appealed from, strongly indicates the understanding of the profession that it is not within the scope of the statute.
The judgment should be reversed and a new trial granted, costs to abide the event.
All concur.
Judgment reversed.