In re the Judicial Accounting of Rothschild — 109 A.D. 546

Majority

p. 546

In the Matter of the Judicial Accounting of David Rothschild, as Temporary Administrator, etc., of William Weisell, Deceased, by the Bankers’ Surety Company, as Surety on His Official Bond. Bankers’ Trust Company, Appellant; Bankers’ Surety Company and the Executors of William Weisell, Deceased, and Others, Respondents.

First Department,

December, 1905.

Headnote

Surrogate of New York county -— power’ to bring in depositary of funds of temporary administrator, on accounting.

As the Code of Civil Procedure (§ 3678) requires that when a-temporary administrator is appointed by the surrogate of the county, of Mew York, the money he ordered to be deposited in a domestic incorporated trust company designated by said surrogate aud having its place of business in the city of Mew York, and whereas the Code of Civil Procedure- (§ 3680) provides that such money cannot be withdrawn except upon order of the surrogate, such- depositary becomes pro 7iae mee an officer of .the court. Hence, the surrogate has-power,, on an accounting made by the sureties of such temporary administrator, who is imprisoned for a felony, to bring in such. depositary, shown to have paid out moneys without order, to establish the legality of such payments-and / ' j / ' . to defend the same. 1 *

Th,e fact that such depositary was not served with the surrogate’s order designating it, is no defense, when the temporary administrator notified it by letter of his appointment, a copy of which appointment was Inclosed, and stated that he was required thereby to deposit the funds with the. depositary. Houghton, J., dissented.

Appeal by the Bankers’ Trust Company from an order of the Surrogate’s Court of the county of Hew York, entered in said Surrogate’s Court on the 6th day of October, 1905, granting a motion made by the Bankers’ Surety Company to have the said Bankers’ Trust Company made a party to the proceeding.

J. Du Pratt White, for the appellant.

Henry White, for the respondent, Bankers’ Surety Company.

One David Rothschild was appointed by the Surrogate’s Court the temporary administrator o,f the goods,' chattels and credits, of

p. 547

William Weisell, deceased, and gave a bond as such in. the penal sum of $400,000, which was executed.by the Bankers’ Surety Company as surety. On the 10th day of July, 1903, said Rothschild opened an account with the Bankers’ Trust Company, delivering to said company this letter: “As I am required by the order of my appointment as temporary administrator of William Weisell,. deceased, to deposit funds coming into my hands as such temporary administrator in your company, I respectfully herewith enclose certificate of the Surrogate’s Court as to my qualification etc., together with my signature as temporary administrator. Kindly open account, for me and deliver the bankbook to my attorney, Mr. John, W. Wooten, the bearer of this communication.” It appears that the. first deposit was made on July 11, 1903, of $1,445.54, and at the time of said deposit the letter quoted supra was on file with said company. Subsequently, said David Rothschild was convicted of a felony, sentenced to State’s prison and is now incarcerated therein. He was on July 6, 1904, duly removed from the office of temporary administrator of said estate, and by an order, dated October 24, 1904, he was directed to filé an account of his proceedings as temporary administrator within fifteen days. He did not account, as required. Thereafter the Bankers’ Surety Company, the surety on his bond, applied to the Surrogate’s Court for an order discharging it from its bond, and filed an account of said temporary administrator to the best of its ability, and an order was made directing all persons interested in said estate to appear and attend a settlement-of said account. There wore a number of appearances and certain objections were filed, and the questions raised by the objections were referred to a referee, and the matter is now pending before him. Upon said reference representatives of the Bankers’ Trust Company have been examined, who have admitted the deposit of the funds of the estate with them, the amounts paid out by them on the checks of the temporary administrator, and that such amounts were paid out without any order of the Surrogate’s Court. The surety company thereupon served a notice on the trust company to appear before said referee and “ establish the legality of said payments and defend the same.” Said trust company not having responded to said notice, the surety company made an application for an order to bring in said trust company and make it a party to

p. 548

the proceeding, “ so that the question as to whether or not they have monies belonging to the estate- can be finally determined upon this accounting, and if it be determined that they have,-that they can be directed to pay over the monies according to law,” and- thereupon it was “ ordered that said motion be, and it 'hereby is, in all. respects granted, and that the. Bankers’ Trust Company be, and hereby is, brought in and made a party to the above-entitled proceedings;” which is the order appealed from.

The power of the surrogate to make the order is challenged. Section 2678. of the Code of Civil Procedure provides that where -the. temporary, administrator was. appointed by the surrogate. ■ of the county of New York, the money must be deposited in a domestic incorporated trust company having its principal, office or place of business in the city of N ew York, and either specially approved by the surrogate or designated in the General Buies of; Practice^[1] as a depositary of funds paid into, court. Section 2.680 of said -Code provides that “ money deposited'by a temporary administrator as prescribed in this article cannot be withdrawn except upon the order of the surrogate, a'certified copy of" which must be presented to the "depositary.” Section 2472 of the Code confers jurisdiction upon the' Surrogate’s' Court: “ '6. To administer justice in all matters relating to, the affairs of decedents according to the provisions of the statutes relating thereto.” ■' ...

From a consideration of section 2678 it will be seen that the ' moneys were required by the Court to be placed by the administrator in the possession of the Bankers’ Trust Company, as- its depositary. By section- '2680 such moneys could only Jto drawn therefrom upon the court’s order. The company became hac vice an officer of the court. • Instead of leaving these funds in the hands of the administrator, concededly . an officer of - the court accountable to it, or placing them in. the hands of. its. clerk, for greater security, to insure the preservation of the decedent’s estate, they were placed with the trust company solely as the depositary of the court and subject to its order. It comes as somewhat of a shock to have it seriously argued, that the court, because of whose order alone the fund has come into possession of the company, and upon

* See Gen.- Rules Pr.. rule 68.— [Rep.

p. 549

whose order alone the money can be legally paid out, may not say to its trusted depositary, “ what have you done with the funds so intrusted to you % ” The power of the court is unquestionable.

The appellant makes the point that it was not served with a copy of the order appointing it a depositary. Before any moneys were received it received the letter which stated, “ I am required by the order of. my appointment as temporary administrator of William Weisell, deceased, to deposit funds coming into my hands as such temporary administrator in your company,”' and the surrogate’s certificate as to his qualification was inclosed. Here was distinct notification as to-the way in which the moneys came into its possession. It was put upon its inquiry, and must be held to have been bound by the order, and to have known the law governing the subject.

"The order appealed from should be. affirmed, with costs.

O’Brien, P. J., Patterson and Ingraham, JJ., concurred; Houghton, J., dissented.

Order affirmed, with costs.