Opinion
July 10, 1967
Appeal from the Surrogate's Court, Queens County.
Decree modified on the law and the facts, as follows: (1) by amending the recitals therein, which refer to the decision of the Surrogate, dated April 25, 1966, so as to provide that:
"A. With respect to the initial account: `Objection #2 is sustained to the extent that the $15,000 claim against Muller Bros., Inc. shall be included in the final statement of the assets of the estate. The executor shall not be surcharged therefor. Objection #3 is sustained to the extent of $2,000. Objections #1, 4, 5, 6, 7, 8, 9 and 10 are dismissed.'
"B. With respect to the First Supplemental Account: `Objections #1, 3, 9 and 14 are withdrawn. Objections #4 and 10 are sustained. Objections #2, 5, 6, 7, 8, 11, 13 and 15 are dismissed. Objection #12 is disposed of by item #4 of the objections to the Second Supplemental Account.'
"C. With respect to the Second Supplemental Account: `Objections #1 and 2 are sustained. Objections #3 and 6 are dismissed. Objection #4 is sustained to the extent that the $1,400 claim remaining against Daniel Keller shall be included in the final statement of the assets of the estate. The executor shall not be surcharged therefor. Objection #5 has been disposed of by item #2 of the objections to the initial account;'" (2) by amending the recitals therein, setting forth a "summary statement" of the state and condition of said account, so as to provide as follows:
Schedule A Schedule A-1 Schedule A-2 Schedule B Schedule C Schedule F
Assets as stated in Third Account .............. $203,425.77 Keller Claim ........................ $1,400.00 Claim against Muller Bros. .......... 15,000.00 16,400.00 __________ $219,825.77 Increment ................................................. 18,067.98 Income (reported) ................................ 3,918.25 Surcharge .......................... 1,918.76 Surcharge .......................... 10,450.00 Surcharge .......................... 2,091.68 14,460.44 18,378.69 _________ Losses ............................. 2,500.00 ___________ Total Assets .............................................. $256,272.44 Administration ............................... 22,160.04 Surcharge ........................... 2,000.00 Surcharge ........................... 1,000.00 3,000.00 19,160.04 Legacy Paid ......................... 1,000.00 Legacy Paid ......................... 867.00 1,867.00 ___________ Net estate as of 9/30/65 ................................ $235,245.40 (3) by amending the recitals therein, setting forth the contents of the net estate, so as to provide as follows: "said net estate, as of September 30, 1965, in the sum of $235,245.40 is represented by and consists of the following assets: Justice Realty Corp. 5 shares .............................. $60,336.47 Muller Brother Holding Corp. 200 shares .................... 128,092.94 United Grocers 25 shares ................................... 350.00 Muller Bros., Inc. 66 2/3% ................................. 5,000.00 Keller Claim ............................................... 1,400.00 Claim against Muller Bros., Inc. ........................... 15,000.00 Cash ....................................................... 25,065.99 ___________ $235,245.40 (4) by amending the sixth decretal paragraph thereof so as to provide that the executor shall pay $140.50 to Leo Katzman, attorney for objectant, as and for disbursements, payable out of the estate; (5) by adding immediately after the sixth decretal paragraph, a provision that the executor shall receive $8,800 as and for his commissions and expenses of the account; (6) by amending the seventh decretal paragraph thereof so as to provide that the executor pay $10,562.74 to Edwin G. Muller, as directed therein, and that the executor shall deliver to Edwin G. Muller an assignment in due form, transferring to Edwin G. Muller a claim of $5,000 against Muller Brothers, Inc., and an assignment in due form, transferring to Edwin G. Muller a claim of $700 against Daniel Keller; and (7) by amending the eighth decretal paragraph thereof so as to provide that the executor deliver to Henry Muller, III, certain stock certificates, as directed therein, and an assignment in due form transferring to Henry Muller, III, a claim of $10,000 against Muller Bros., Inc., an assignment in due form transferring to Henry Muller III a claim of $700 against Daniel Keller, and $5,562.75 in cash. As so modified, decree, insofar as appealed from, affirmed, without costs. The executor incorrectly received, as his own, certain sums paid by the Justice Realty Corporation, stock in which was held by the estate. Although labelled "salary", these payments, on this record, appear to be in the nature of dividends, and should be included in the estate by way of surcharge. The testator died in October, 1961. The executor expended certain sums on behalf of Muller Bros. Holding Corporation (of which the estate owned 100%) and Muller Bros., Inc. (of which the estate owned 66 2/3%), as permitted by paragraph Fourth of the will. Most of these payments were made during the early period of administration, to preserve possibly valuable estate assets. However, certain sums were expended in 1963, after the time at which these assets could reasonably have been sold or distributed. As to these sums, the surcharges were proper. The Keller claim was regarded as a bad debt by the executor. Thereafter, he found it possible to collect on it, and included such collections in the estate. The uncollected portion should, therefore, be included as an asset. The $15,000 claim against Muller Bros., Inc., was not collected, and it appears that such forebearance was sound. However, it was not uncollectible, and should be included as an asset. The executor spent $275 for witness' fees in connection with a claim to certain property. On this record, it does not appear that these payments were improper. Tax penalties were assessed for late payment of estate taxes owed to the Federal and New York State Governments. However, the record indicates that the executor paid all sums initially assessed on time, made a small overpayment, and pressed for a speedy audit. Additional sums were found to be due after the audit, at a date after the time for payment had expired; interest was then imposed. This record does not warrant surcharging the executor for these interest payments. The executor managed a sizeable and complex estate for several years. The record indicates that he is entitled to his commissions, and the Surrogate so held by dismissing the objections thereto. Objectant's attorney seeks a fee from the estate for services which were directly beneficial to his client, and to no one else. This request was properly denied. Christ, Acting P.J., Rabin, Hopkins, Benjamin and Munder, JJ., concur.