Elmendorf v. Lansing — 4 Johns. Ch. 562

Majority

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Elmendorf and Beekman against G. Lansing, Jun. and others.

August 22d.

Headnote

Where an executor, or other trustee, mismanages the estate confided to his catre, or puts the assets in jeopardy, by his aclual or impending insolvency, this Court will restrain him from all further inter-meddling with the estate, and compel him to restore the funds in his hands.

An executor, on a bill filed against him by his co-executors, was restrained from all further interference in the management of the estate, and decreed to restore to the plaintiffs a bond and note of the estate, in his possession, but not to account for money he had received on the bond, or to pay the costs of the suit.

1 THE bill stated, that Jeremiah Lansing, of Albany, who died in February, 1810, by his last will, appointed the plain"tiffs, and the defendant, G. Lansing, jun. his executors. G. L., who had united with the plaintiffs in the execution of the will, removed to Herkimer in 1811, and the whole care of the estate, from that time, devolved on the plaintiffs. In September, 1817, G. L. returned to Albany, and demanded of B., one of the plaintiffs, access to the papers of the testator. which was, at first, refused, but afterwards granted; and without the knowledge or consent of the plaintiffs, G. L„ took from the assets of the testator, a bond of J. T., for 1,215 dollars, and a note of G. P„ for 2,218 .dollars and 47 cents; and assigned them to J. V. N. Yates, from whom he received a bond and mortgage in his own name. On representation, and at the instance of the plaintiffs, this assignment, and the securities, were cancelled, and the bond and note returned to G. L. who had demanded, and received of the obligor 200 dollars, and refused to return to the plaintiffs the bond and note, or deposit them with the papers of the testator, or account for the mo

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ney so received by him. That in November, 1818, G. L. again sold the note to one S., and received a greater ° _ part of the amount to his own use; and had put the bond in the hands of an attorney, with directions to collect it for him. That G. L. had drawn a check on the Bank of Albany, for 450 dollars, as one of the executors, in favour of one W. G., which had been refused payment, and W. G. had brought an action thereon against the bank. The bill charged that G. was utterly insolvent, and was indebted to the estate of the testator. That the interest of the estate-did not require that the bond and note should be collected. The bill prayed, that the defendants G. L. and S., may be decreed to deliver the bond and note to the plaintiffs, or bring them into Court, and for an injunction, and for general relief.

The answer of G. L., charged the plaintiffs with remissness in settling the estate, and as disposed to exclude him from an active participation in the management of it. He admitted, that he took the bond and note belonging to the testator’s estate, and insisted that he had a right to do sb; that his object was to guard the interest of the estate, and not fraudulent, or with a view to appropriate the money to his own use. He admitted the assignment to Yates; which was afterwards cancelled; that he, afterwards, sold the note to S., but that the sale had since been revoked, and the note" returned. That he drew the check on the bank, which had been refused payment, because not signed by a majority of the executors, and a suit brought in the name of D., who was his agent. He denied the charge of insolvency. He admitted, that he received the 200 dollars on the bond, but without intending "to apply it to his own use;' that he was indebted to the estate for money received as executor, of which he had already rendered an account, except for the 200 dollars; but that, on á settlement of all just claims between him and the estate, there would be a balance in his

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favour. That he is a legatee, and entitled to a just allowance, as an executor, ike.

The other defendants put in their answers; and proof was taken as to the insolvency cf 6r. L., and it appeared, that he had little or no property.

Van Buren and Butler, for the plaintiffs.

They cited 2 Cases in Ch. 130. Ambler, 309. 2 Vesey, jun. 94. 4 Vesey, 592. 5 Vesey, 722.. 2 Atk. 213. 2 Sch. Lef. 26. 1 Bro. 105. 279. 13 Vesey, 266. 4 Bro. 277. 2 Vesey, 95. Rep. in Ch. 110. Carth. 457. Cases in Ch. 75. 2 Vern. 249.

J. V. N. Yates, contra.

The defendant Lansing’s answer, is a sufficient admission of abuse of trust. After residing several years out of the city and county of Albany, he returned there in 1817, and took from the custody of the plaintiffs, without their knowledge or consent, a bond and note, being part of the testator’s assets, and which amount* ed, on the face of them, to 3,400 dollars, and upwards. He applied to the obligor of the bond, and received 200 dollars, in part payment of it, and then sold the bond and note to a third person, and took a bond and mortgage for the amount to himself. The bond was then put in suit by the purchaser; but, upon the remonstrance of the plaintiffs, the sale was rescinded, and the bond and note restored to the defendant. He then sold the note to another person, and that sale was-afterward rescinded. The bond was then ordered to be put in suit, and he drew a check on the Bank of Albany, where the executors had made deposits of the trust moneys, for 450 dollars; and the check was delivered to the other defendant, who resided in his family, and is charged to be insolvent.

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These acts show an unequivocal disposition to convert the assets of the testator to his own use, and the proof is full and satisfactory to the point, that this defendant is worth little or no property. It becomes, therefore, just and necessary, that the defendant L., should be restrained from further intermeddling with the estate, as a co-executor $ and that he should restore the bond and note which he so improperly took, and has so injuriously converted ; and that the suit against the bank, upon the check, should be perpetually enjoined, and the check cancelled.

It is a settled principle of this Court, that an executor, or other trustee, who mismanages, or puts the assets in jeopardy, by his insolvency, either existing or impending, should be prevented from further interfering with the estate, and that the funds should be withdrawn from his hands. The authorities to this point are sufficiently numerous. (Rous v. Noble, 2 Vern. 249. Batten v. Earnley, 2 P. Wms. 163. and vide 3 P. Wms. 334. S. P. Carth. 458. Taylor v. Allen, 2 Atk. 213. Utterson v. Mair, 4 Bro. 277. 2 Ves. jun. 95. Lake v. De Lambert, 4 Vesey, 592. Middleton v. Dodswell, 13 Vesey, 266.) I shall, accordingly, restrain the defendant L. from acting, or intermeddling any further with the assets, or in the administration thereof, as a co-executor; and shall direct him to restore the bond and note to the plaintiffs, and cause the check on the bank to be cancelled; and that the suit thereon be perpetually enjoined.

As to the 200 dollars, which L. has collected, that may be left to be accounted for when he is called to an account, at the instance of creditors or legatees, for his previous share of the administration of the estate, in which, perhaps, he may have a claim for just allowances. This suit is founded on principles of preventive policy, and to stay future waste and conversion of the assets. I am not disposed to go further upon this present application by the co-executors. I shall not charge the defendants with the plaintiffs’ costs of

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this suit, but I shall allow the plaintiffs to charge their reasonable costs and charges of this suit, upon the assets in their hands.

Decree accordingly.