It is not the law, however, that trustees may not receive any part of the trust estate, consisting of personalty, until the executor has accounted and been directed to pay it over. Whilst in case the same person is both executor and trustee, a decree of the court is the most satisfactory evidence of a separation of his duties, it is not indispensable. ( Hurlburt v. Durant, 88 N.Y. 121, 127.) And even with respect to the residuary estate, the trustee may enter upon his duties as such even before his accounting and discharge as executor. ( Olcott v. Baldwin, 190 N.Y. 99.) Cases dealing with the liability of a person as executor, such as Matter of Hood ( 98 N.Y. 363), are not decisive of the point involved in this case; but in that case it was recognized that there might be a severance of the trust fund by the executor without a judicial decree. The trustees were not bound to wait until the final accounting of the executor before investing the money belonging to the trust funds in the manner directed by the testator.
The fact that the trustees have not made an actual division of the trust fund into shares as directed by the will, does not, we think, change the question. * * * The executors have upon a final accounting as executors been discharged as such. The fund has become exclusivly a trust fund under the will to be held by the trustees," etc. Our attention is also called to Matter of Estate of Hood ( 98 N.Y. 363), where there was a final accounting of the executors, and the decree of the surrogate directed "that the balance of said moneys, being the sum of $53,710.69, said executors shall hold and invest pursuant to the powers in said last will and testament," and it was held in a proceeding to revoke the letters testamentary of one of the executors, that he as such was not discharged by that decree. And in the opinion of the court, delivered by Judge MILLER, it was said that in the absence of any direction in the will that the executors should become trustees, no reason exists why the executor, whose account was settled, should not continue to act in that capacity.
) As the consequence of this, the proceeds of the sale, when received by the executors, would be legal assets in their hands, for which they would be required to account. ( Hood v. Hood, 85 N.Y. 561. ) And if any duties were to follow, in respect to one-third of the fund, which would require the function of a trustee to execute, the executors, as such, would remain responsible for it until the severance in some manner by them of the trust fund. ( In re Hood, 98 N.Y. 363.) We have proceeded far enough to show the relation of the executors, as such, to the powers given by the will, sufficiently for the purpose of the question here.
When the case was first before us ( 85 N.Y. 561), we decided that by the will of Andrew Hood there was an equitable conversion of the real estate into personalty, and that for the proceeds of its sales the executor was accountable in that capacity. At a later period the order revoking his letters testamentary came up for review ( 98 N.Y. 363), and we then held, passing by the inquiry whether under the will it was possible for him to exchange the character of executor for that of trustee, that he had not effected such exchange, and remained executor only and removable as such for his misconduct in that capacity. We pointed out that on the accounting in 1869 he was not discharged, was not directed to hold the remaining assets as trustee, was not credited with such transfer and his account thereby balanced, but the decree entered directed as to the assets remaining that "the said executor shall hold and invest pursuant to the powers and directions contained in said last will and testament."
It is easily demonstrable, however, that we cannot affirm the order on this ground. The surrogate alone can remove an administrator ( Hood v. Hood, 2 Dem. 583; affd., sub nom. Matter of Hood, 98 N.Y. 363), and the reasons for which he can revoke letters of administration are explicitly specified in section 2685 of the Code of Civil Procedure. His authority to remove executors and administrators and to revoke letters for cause is solely derived from the Code. ( Matter of Estate of Corn, 9 Civ. Proc. Rep. 243, per ROLLINS, S.), and before he may act he must find as a fact that some of the causes specified in section 2685 exist.
On this state of facts it seems perfectly clear that the deceased Gwynne was at the time acting as executor and held the funds as such, for his sole authority to hold them was derived from the will, wherein he was designated as executor and not as trustee, and his duties as executor had not terminated. ( Matter of Hood, 98 N.Y. 363; S.C., 104 id. 103; Lansing v. Lansing, 45 Barb. 182; Matter of Underhill, 35 App. Div. 434; affd., 158 N.Y. 721; Cluff v. Day, 124 id. 195.) The doctrine of these cases is not modified by Laytin v. Davidson ( 95 N.Y. 263) and Olcott v. Baldwin (190 id. 99), wherein an accounting as executor and setting apart of the trust funds were not deemed conditions precedent to the termination of the duties of executor and the commencement of his duty as a trustee.
He kept his account, what little there was of it, from the first as an executor's account, without any attempt to separate the funds or to set up any distinct trust for any legatee. He has never been discharged as executor. In Matter of Estate of Hood ( 98 N.Y. 363) it was held that "even where by the terms of a will an executor may become a trustee simply, his liability as executor continues until there has been a final accounting, and a discharge by decree of the surrogate, or a direction in such decree that he hold the fund thereafter as trustee, and an entering by him upon the duties of trustee as distinct and separate from those of executor." In Matter of Accounting of Mason ( 98 N.Y. 527) it appeared that the accounts of the executors, as such, "were fully and finally settled, and the trust funds were separated by the decree of the surrogate on such accounting," and it was there held "that thereafter the executors acted simply as trustees, and were entitled to commissions, as such, in addition to those received by them as executors."
The Supreme Court has no power to remove an executor, as this power is confided to the Surrogate's Court exclusively. ( Matter of Hood, 98 N.Y. 363; Greenland v. Waddell, 116 id. 234; Widmayer v. Widmayer, 76 Hun, 251; 1 Jessup-Redfield, Law and Practice in the Surrogates' Courts, ยง 621, p. 1296.) In any event, therefore, the present application so far as it seeks the removal of the respondent as executor would have to be denied.
( Laytin v. Davidson, 95 N.Y. 263. ) In Matter of Hood ( 98 N.Y. 363, at p. 370) the court said: "In the case at bar there was no provision in the will, or by intendment, that the two functions were to be separate, * * *. The case of Laytin v. Davidson ( 95 N.Y. 263) is not adverse to the views already expressed. Trusts were there created under the will, and the decree of the surrogate directed that the property be held by the executors as trustees.
The distinction between an executorship and a trusteeship is made plain when we consider that the same person may continue in one office and be removed from the other. Matter of Hood, 98 N.Y. 363; S.C., 104 id. 103, 107. Nor does it matter that Mr. Horne did not after probate qualify as an executor.