Summary
In De Crano v. Moore (supra) it was held that the debt of a testator arising out of trust relations was properly enforcible from the property devised; that the fact that there was a fiduciary relation between the parties did not alter the nature of the obligation, and that the terms "simple contract" and "specialty" used in the statute comprised every kind of contractual obligation.
Summary of this case from Richards v. GillOpinion
April Term, 1900.
Charles P. Howland, for the plaintiff.
James A. Dunn, for the defendant.
We think that little need be added to the opinion of the learned judge at Special Term in which all the points again urged except the Statute of Limitations, were expressly considered and correctly determined. Upon the question of the amount of the indebtedness and the relation of the parties, the account and letter sent by defendant's testator were competent and conclusive in the absence of any evidence to impeach or contradict them.
The following is the opinion of the judge at Special Term:
SCOTT, J.:
This is an action to charge the real estate of which Gideon E. Moore died seized with an indebtedness due from him to the plaintiff, who is his sister. Gideon E. Moore died on or about the 13th day of April, 1895, leaving a last will and testament which was duly admitted to probate on or about the 24th day of June, 1895, and letters of administration with the will annexed were issued to the defendant on September 4, 1895. To the defendant, the testator's wife, was bequeathed and devised all his estate, real and personal, and she entered into possession thereof. Included in the estate thus devised to her were the pieces of real estate described in the complaint. She has never filed an inventory as administratrix, nor advertised for creditors to present claims to her, nor filed any account. It appears from a statement of account made out by Gideon E. Moore in his own handwriting, that on March 31, 1890, he had in his possession the sum of $8,640.45 belonging to the plaintiff. Other statements of account and letters to the plaintiff and her mother indicate that plaintiff's money had been invested by the decedent in his own name, in such manner that it was producing interest at the rate of five per cent per annum. These letters and accounts are competent evidence, and satisfactorily establish the fact of decedent's indebtedness to plaintiff on May 1, 1890. ( Hurlburt v. Hurlburt, 128 N.Y. 420; Terwilliger v. Industrial Benefit Assn., 83 Hun, 320.) The plaintiff testifies that no part of this indebtedness, or the income thereof has been paid to her. And the defendant does not offer any evidence, either from decedent's books or otherwise, to disprove the fact of the indebtedness. Section 1843 of the Code of Civil Procedure authorizes an action of this kind, to enforce, as against the heirs and devisees of a testator, debts of the decedent arising by simple contract or by specialty. Such an action, although now regulated by the Code, is one of equitable cognizance. ( Wood v. Wood, 26 Barb. 361; Mortimer v. Chambers, 63 Hun, 335.) The defendant's contention, that relief has been sought in the wrong forum, cannot, therefore, prevail. It is objected, however, that the action cannot be maintained against the defendant both individually and in her representative capacity, and that an administrator or executor cannot be joined as defendant in an action to charge real estate in the hands of a devisee.
It is further objected to the maintenance of the action against the defendant individually that it is not shown that the plaintiff has exhausted her remedy against the testator's personal estate, but, on the contrary, it affirmatively appears that there are personal assets in the hands of the defendant as administratrix applicable to the payment in whole or in part of the plaintiff's claim. If the defendant was not at once the sole administratrix of the estate, and the sole devisee of the real estate, these objections would be fatal to the plaintiff's recovery. As it is, however, the action can, I think, be maintained in its present form. The complaint sets up a single cause of action for the recovery of the debt due from the testator to the plaintiff. It is sought to recover this amount from the defendant in her representative capacity to the extent that the personal property in her hands may suffice to pay the claim, and, as to any remainder, to recover it out of the real estate which passed to her individually as sole devisee. Under such circumstances, section 1815 of the Code of Civil Procedure expressly authorizes an action against an executor or administrator personally and also in his or her representative capacity.
The other objections are answered by section 1860. Sections 1848 and 1849 provide that, to maintain an action of this character against devises, the plaintiff must show that the decedent's assets, if any, within this State were not sufficient to pay the plaintiff's debt, in addition to the expenses of administration and debts of a prior class, or that the plaintiff has been unable or will be unable with due diligence to collect his debt, by proceedings in the proper Surrogate's Court, and by action against the executor or administrator and against the surviving husband or wife, legatees and next of kin, and that the plaintiff has been unable or will be unable to collect his debt by an action against the heirs. In short, the plaintiff must show that he has exhausted his remedy against the personal property, or that to pursue such remedy would be futile. In the present case there appears to be personal property, of somewhat uncertain value, in the hands of the defendant as administratrix, against which the plaintiff has not exhausted her remedy. Of course it would be useless to pursue decedent's heirs at law or next of kin, because by his will his entire estate is given away from them to his wife. Section 1860 provides as follows: "Where a person who takes real property of a decedent by devise and also by descent; * * * or who is executor or administrator, and also takes in either of the before mentioned capacities; would be liable, in one capacity, for a demand against the decedent, after the exhaustion of the remedy against him in another capacity; the plaintiff in any action to charge him which can be maintained, without joining with him any other person, except a person whose liability is, in all respects, the same, may recover any sum for which he is liable, although the remedy against him in another capacity was not exhausted." This section precisely fits the case presented here. The defendant has taken the real property of the decedent by devise, and is also administratrix with the will annexed of his estate. As sole devisee she is liable for the plaintiff's demand, being for an indebtedness which accrued before his death. After the exhaustion of the remedy against her as administratrix, this action to charge her as devisee can be maintained without joining any other person because she is sole administratrix and sole devisee. Hence, the plea that the remedy against her as administratrix has not been exhausted, is not available as an answer to the present action.
I think that plaintiff is entitled to judgment for the sum of $8,640.45, with interest from March 31, 1890. It is fairly inferable from the evidence that it was with the plaintiff's consent that the decedent invested her money for her. In the letter of April 25, 1890, read in evidence by the plaintiff, it appears that the money was then earning interest at the rate of five per cent per annum. It does not appear whether or not the decedent, or this defendant, ever changed the investment, and in the absence of proof upon the subject, it may be presumed that the money has continued to earn that rate of interest. There may be circumstances which would justify charging the defendant with the full legal rate of interest from the date of the decedent's death, but these circumstances do not now appear, and could only be ascertained upon an accounting. I understand that the parties do not desire to assume the expense that such an accounting would involve. The plaintiff may, therefore, take a judgment against the defendant individually and as administratrix, etc., for $8,640.45, with interest thereon at the rate of five per cent per annum from March 31, 1890, to be collected out of the assets in the hands of the defendant as administratrix with the will annexed, and out of the real property devised to her by the decedent, with costs and an extra allowance of $375.
Decision and decree to be settled on notice.
The fact that there was a fiduciary or confidential relation between the parties does not alter the nature of the obligation which was on contract; and whether we consider the right of plaintiff to be based on contract express or implied, its enforcement is regulated by section 1843 of the Code of Civil Procedure. As correctly urged by the plaintiff, the terms "simple contract" and "specialty," as used in the section, comprise every kind of contractual obligation. The section provides: "The heirs of an intestate and the heirs and devisees of a testator, are respectively liable for the debts of the decedent, arising by simple contract or by specialty, to the extent of the estate, interest and right in the real property which descended to them from or was effectually devised to them by the decedent." By virtue of this section, the action against the defendant as sole devisee for an indebtedness of a fixed amount arising out of a contractual relation can be maintained. In Wilkes v. Harper ( 1 N.Y. 586) wherein a testator during his lifetime received moneys in trust and invested them in his own name, it was said that the devisees were liable in their respective proportions in an action brought to recover the same.
The plaintiff was not required to prove that there was no personal property of the decedent sufficient to satisfy her debt; and, aside from the question of the sufficiency of the answer as raising such an issue, proof or allegations as to the non-existence of the assets is unnecessary where the administratrix, as here, is also the sole devisee. Section 1860 of the Code of Civil Procedure provides: "Where a person who takes real property of a decedent by devise and also by descent; or who takes personal property as next of kin, and also as legatee; or who takes both real and personal property in either capacity; or who is executor or administrator, and also takes in either of the before mentioned capacities; would be liable in one capacity for a demand against the decedent after the exhaustion of the remedy against him in another capacity; the plaintiff in any action to charge him which can be maintained, without joining with him any other person, except a person whose liability is in all respects the same, may recover any sum for which he is liable, although the remedy against him in another capacity was not exhausted."
With regard to the Statute of Limitations, if the ten-year rule applies, it had not run, for plaintiff's account was sent on April 25, 1890, and the action was begun April 24, 1899 — a period of less than ten years; and if the six-year Statute of Limitations applies, then by section 1844 of the Code, in an action of this character where the death of the testator occurs before the running of the statute, three years additional are allowed, making nine years in all, and as the action was commenced within nine years, that statute is not a bar. Indeed, it may be doubtful whether the Statute of Limitations had commenced to run at all. The transaction was either a deposit of money to be paid upon demand, or it was a deposit of money to be held and invested by the depositary as trustee. If the transaction was of the character first mentioned, the statute could only be set running by a demand; and if it was of the latter character the statute would only commence to run after it had been ascertained that the depositary had converted the money to his own use.
Upon the question of interest the plaintiff insists that from the death of Dr. Moore she should have interest at six per cent, on the ground that as an indebtedness existed which the administratrix should have paid, but did not even recognize as a debt of the estate, the law fixes the interest ( Barker v. White, 58 N.Y. 204, 214); and that in any event, interest at six per cent should be allowed from April 24, 1899, the date on which the action was brought. On this subject the judge at Special Term said: "In the letter of April 25, 1890, read in evidence by the plaintiff, it appears that the money was then earning interest at the rate of five per cent per annum. It does not appear whether or not the decedent or this defendant ever changed the investment, and in the absence of proof upon the subject, it may be presumed that the money has continued to earn that rate of interest. There may be circumstances which would justify charging the defendant with the full legal rate of interest from the date of the decedent's death, but these circumstances do not now appear, and could only be ascertained upon an accounting. I understand that the parties do not desire to assume the expense that such an accounting would involve." Although we approve of this reasoning, we do not think it applies to the period subsequent to the commencement of this action. That constituted a demand and an election by the plaintiff to receive back her money or the property, if any, in which it had been invested. The refusal to comply with the demand entitled plaintiff to sue for and recover the amount which her brother owed her, with legal interest.
The judgment should be modified by giving the plaintiff interest at six per cent from April 24, 1899, and as so modified affirmed, with costs to the plaintiff.
VAN BRUNT, P.J., RUMSEY, PATTERSON and McLAUGHLIN, JJ., concurred.
Judgment modified by giving the plaintiff interest at six per cent from April 24, 1899, and as so modified affirmed, with costs to plaintiff.