In re Porter's Estate — 25 N.Y.S. 822

Majority

p. 822

(5 Misc. Rep. 274.)

In re PORTER’S ESTATE.

(Surrogate’s Court, New York County.

October, 1893.)

Headnote

Executors and Administrators—Accounting—Retaining Investments.

An administrator received, among the assets of the estate, shares of stock of a. speculative character, and he took the risk of retaining them; thereby making for the estate a large sum in dividends, and eventually disposing of a portion for more than the inventoried value of the whole. It appeared that he acted in good faith, and with great judgment. Meld, that the administrator would not be charged with losses on some of the stocks because of a technical violation of his duty, in not disposing of them.

Accounting by the administrators of decedent’s estate. The matter was ordered to be heard by a referee, and now conies up on exceptions to the referee’s report.

Am mix, Bitch & Woodford, for administrators.

Porte V. Ransom, special guardian.

Among the assets which came into the possession of the administrators herein, were shares of stock in various corporations, of a speculative character. Instead of disposing of these, they took the risk of retaining them. One block of 50 shares in an ice company, which was appraised at $5,000, brought into the estate nearly $11,000 of dividends, and was afterwards sold for

p. 823

§8,300. Another lot, appraised at §1,000, earned in dividends nearly §80,000, and the stock is still retained hy the estate. Some other oí .the stock paid dividends for a time, and then ceased, Others never brought in any income whatever. Taking the estate as a whole,. the administrators have disposed of and collected a little more than the entire inventoried value, while they have received for interest on balances and dividends nearly §150,000. Among the securities so held by the administrators, were 100 shares of the stock of a mining company, the par value of which was §10,000, and which was appraised at §5,000. This stock has never been sold. Dividends to the amount of $1,500 have been received. The evidence shows, and the referee finds, that the stock has always been unsalable. The accountant, however, claims credit for a subscription of §5,000 of the bonds of the company, which he purchased for the purpose of protecting the stockholding of the estate. An objection was made to the allowance of this sum by the special guardian, and was sustained by the referee, who charges the administrators therefor, and with interest thereon from the time of payment.

The court deals with executors and administrators with much greater liberality, where investments which result disastrously come into their hands from the deceased. They are only required to act in good faith, and to exercise a sound discretion. “Although, hy the light of subsequent events, the course determined on may appear unwise, he cannot be held liable for any loss or depreciation of stock, unless it be found that he acted carelessly, or in bad faith. If the testator has given no directions in his will, the ordinary rules of prudence and diligence apply, and the fact that he has invested Ms property in particular stocks, shares, or corporations, mortgages or securities, will go far in justifying his executor in continuing them.” 2 Woeraer, Adm’n, p. 710, and cases cited. In the case at bar, no question whatever is made as to the good faith of the accountant. In pursuing a settled and consistent policy with reference to the speculative securities of different kinds wMeh came into his possession, he acted with rare good judgment. Had he looked only to his own protection from risk, and a speedy settlement of the estate, and consequent shifting of responsibility from his shoulders, the infants 'in whose behalf complaint is now being made would have been deprived of the enormous advantages which have accrued from his management. To permit a distributee to select an investment out of others more fortunate, though the executor’s conduct with reference to all has been actuated from the same motives, and in the exercise of the same discretion, would he a gross 'injustice. It is a familiar maxim “that he who seeks equity must do equity,” and infants are not more relieved from tins rule than adults. Upon a survey of the entire administration of this accountant, I think that his judgment is to he commended; that Ms good faith is beyond question; and still it is seriously urged that I must, nevertheless, mulct Mm in a large sum of money because of a techmcal violation of law, although the persons seeking thus to penalize him have been, hy just such violation, largely benefited. Such a claim does not recommend itself to my notions of eqmty, and I refuse to

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give the 'support of my opinion to such construction of the law. In the respects above alluded to, the exception to the referee’s report is sustained, and in all other respects the report is confirmed,