In re Accounting of Storm — 84 A.D. 552

Majority

p. 552

In the Matter of the Accounting of Edward Storm, as Testamentary Trustee under the Third Clause of the Will of Margaret A. Brinckerhoff, Deceased. Abram S. Humphrey, Appellant; Charles A. Hopkins, as Substituted Trustee under the Third Clause of the Will of Margaret A. Brinckerhoff, Deceased, Respondent.

Headnote

Surety upon the bond of a defaulting trustee—he can be cited under section 2728 of the Code of Oivil Procedure only on a voluntary accounting — under section S605 the trustee may be cited to account although letters testamentary to him have not been revoked — an order of removal is a revocation of the letters — the accounting binds the surety although he is not a party thereto.

A person who had heen appointed executor and trustee under a will was duly-discharged from all liability as executor by a decree of the Surrogate’s Court. He continued to act as testamentary trustee for some time thereafter and until he was removed by an order of the Surrogate’s Court, and another person was appointed testamentary trustee in his place. No order ■ was ever entered expressly revoking the letters testamentary granted to him.

Upon the application of the substituted testamentary trustee the removed trustee rendered an account, by which it appeared that he had converted to his own use the whole amount of the trust fund. The surrogate thereupon made a decree directing him to pay the amount of the trust fund to the substituted trastee.

p. 553

Upon an appeal from, this decree taken by the surety upon the removed trustee’s bond, who was not made a party to the accounting proceeding, it was

Held, that section 3728 of the Code of Civil Procedure, providing that the sureties upon the official bond of an executor or administrator may be cited to attend a settlement of his accounts, only applies to a voluntary accounting by the executor or administrator;

That the surrogate, under section 2605 of the Code of Civil Procedure, had authority at the instance of the substituted trustee to require the removed trustee to render an account, even though there had been no express order revoking the letters issued to the removed trustee;

That the order of removal operated in substance and effect as a revocation of such letters;

That the fact that the decree was made without notice to the surety did not prevent it from being binding upon him.

Appeal by Abram S. Humphrey, one of the sureties on the bond of Edward Storm, as testamentary trustee under the 3d clause of the will of Margaret A. Brinckerhoff, deceased, from a decree of the Surrogate’s Court of the county of Dutchess, entered in said Surrogate’s Court on the 14th day of July, 1902, settling the account of said trustee and directing him to pay over the trust fund found due by said decree to Charles A. Hopkins, as trustee, appointed in hi& place and stead.

George Worrall, for the appellant.

Isaac JE. Bingham, for the respondent.

Edward Storm was executor and trustee under the will of Margaret A. Brinckerhoff, deceased. Abram S. Humphrey, the appellant, is one of his sureties as trustee under the will. Storm was. duly discharged from all liability as executor by a decree of the Surrogate’s Court of Dutchess county in 1901. He was subsequently removed from his position as testamentary trustee by an order of the Surrogate’s Court, and Charles A. Hopkins was duly appointed testamentary trustee in his place. Upon the application of Hopkins Storm was cited to show cause why he should not render and settle his accounts as testamentary trustee, appeared upon the return day of the citation, applied for an adjournment for the purpose of preparing his account, which was granted, and on the adjourned day filed his account in which he charged himself with $3,905, and

p. 554

-stated that he had on hand his own note as security for the amount. Testimony was taken, and it appeared by the admission of Storm himself that he had converted' the whole amount of the trust fund to his own use, and that the note referred to in the account ■ was worthless. The learned surrogate thereupon made the decree from which the present appeal is taken by the surety, who was not made a party to the accounting proceeding, and contends that, therefore, the Surrogate’s Court was without jurisdiction to make the decree..

It is true that under section 2728 of the Code of Civil Procedure the sureties upon the official bond of an executor or administrator may be cited to attend the settlement of his account, but. the provision permitting this applies only toj .a voluntary accounting. (McMahon v. Smith, 24 App. Div. 25 .) The accounting in this case was not voluntary but- compulsory, and the order for it appears to have been warranted by section 2605 of the Code, which provides that where letters have been revolted by a decree of the Surrogate’s Court that court has the power to appoint a successor, and which further provides as follows: £? The Surrogate’s Court has the «ame jurisdiction, upon the petition of tile successor, or of a remaining executor, administrator, guardian or trustee, to compel the person whose letters have been revoked to Recount for, or deliver over money or other property, and -to settle Ms account, which it would have upon the petition of a creditor or person interested in the estate, if the term of office, conferred byj the letters, had expired by its own limitation.”

There was no order expressly revoking the letters testamentary ¿granted to Edward Storm in the case ¡at bar. He had been discharged as executor, but continued in office as trustee under the will for some time after such discharge until jhis final removal from his position as trustee by the Surrogate’s Court. As I understand the -argument for the appellant on this branch of the case, it is that there was no authority to order an accounting under section 2605 of the Code of Civil Procedure at the instance of the succeeding trustee, in the absence of an express order revoking the letters to Storm, but it seems to me that the order of rerpoval operated in -substance and effect as a revocation of the letters, and, therefore, that the -case fairly falls within the purview of tike section cited. The propriety of the order of removal does ndt seem to have been ques

p. 555

tioned, and, indeed, could hardly be questioned on this appeal; nor does it appear that the original trustee made any objection before the surrogate to the jurisdiction of the court to compel him to account. He acquiesced in the assertion of jurisdiction, and if the view which I have expressed as to the effect of the order of removal is correct, the surrogate had power to make the order appealed from.

The fact that it was made without notice to the surety does not prevent it from being binding upon him. “When sureties go upon the bond of a testamentary trustee, they make themselves privy to all proceedings against the principal, and when he, without fraud or collusion, is concluded, they are concluded also.” (Haywood v. Townsend, 4 App. Div. 246 ; Kelly v. West, 80 N. Y. 139 , 146.)

The decree should be affirmed.

Goodrich, P. J., Woodward, Hirsohberg and Hooker, "JJ., concurred.

Decree of Surrogate’s Court of Dutchess county affirmed, with costs.

Cases cited

McMahon v. Smith 24 App. Div. 25 N.Y. App. Div. 1897-12-31 p. 554
Kelly v. West 80 N. Y. 139 N.Y. 1880-02-24 at 146 p. 555