In re Yetter

The decree appealed from settles the account oí the appellant as the administrator of William Livingston, deceased. The account and objections were referred to a referee, “to hear and determine the allegations arising upon the settlement of the account.” The referee, after a full hearing, made his report; and both the administrator and the contestant, the decedent’s widow, duly filed exceptions thereto. The surrogate overruled all of the exceptions, save one of the contestant’s, and in all other respects confirmed the report. The administrator thereupon appealed to this court, but filed no new exceptions to the decree.

The respondents contend, at the outset, that the exceptions to the referee’s report raise no question for review; the only method of presenting the case on appeal being, as they insist, by means of further exceptions to the surrogate’s decree.

Section 2545 of the Code of Civil Procedure provides:

“An exception may be taken to a ruling by a surrogate, upon the trial by him of an issue of fact, including a finding, or a refusal to find, upon a question of fact, in a case where such an exception may be taken to a ruling of the court upon a trial without a jury of an issue of fact as prescribed in article third of title first of chapter tenth of this act. * * * Upon such a trial the surrogate must file in his office his decision in writing, which must state separately the facts found and the conclusions of law. Either party may, upon the settlement of a case, request a finding upon any question of fact, or a ruling upon any question of law; and an exception may be taken to such a finding or ruling, or to a refusal to find or rule accordingly. An appeal from a decree or an order of a surrogate’s court brings up for review by each court to which

an appeal is carried each decision fo which an exception is duly taken by the appellant as prescribed in this section.”

Section 2546 gives the surrogate authority, in a special proceeding other than one instituted for probate or revocation of probate of a will, to appoint a referee—

“To take and report to the surrogate the evidence upon the facts, or upon a specific question of fact; to examine an account, rendered; to hear and determine all questions arising upon the settlement of such an account, which the surrogate has power to determine; and to make a report thereon; subject, however, to confirmation or modification .by the surrogate.”

The section further provides that:

“The provisions of this act, applicable to a reference by the supreme court, apply to a reference made as prescribed in this section, so far as they can be applied in substance without regard to the form of the proceeding.”

The meaning of these provisions seems clear. When the surrogate himself takes the testimony and tries the issues of fact, he must make a decision containing specific findings, and the appellant must file the required exceptions, if he desires an effective review. This also applies to a case where a reference is ordered merely to take and report the evidence. The surrogate himself then tries the issue, using the reported evidence as an aid. Where, however, a reference is ordered to hear and determine, there is no trial of the issues by the surrogate, within the meaning of section 2545. He may still, it is true, as the section provides, deny confirmation or modify the report. But his action in that regard is in its nature appellate or supervisory, not original. In such cases, section 2546 clearly governs. The intention was to conform the practice upon accountings to the ordinary practice in such matters in the supreme court. It certainly was not intended upon such accountings to have two primary trials,—one by the referee, and another by the surrogate,—with the two sets of findings and two sets of exceptions. Such a view would deprive section 2546 of all force, would impose upon the surrogate much of the very labor which the reference was provided to save him, and would" inflict upon the parties an unnecessary and useless multiplication of routine work. We say useless, because in such a case a second' set of exceptions would be quite needless to point out to the appellate court the specific error complained of. When the referee in such a case makes separate findings, numbering them properly, and exceptions are duly filed to one or more of such findings, the surrogate, upon the hearing, sustains or overrules each of the numbered exceptions to the numbered findings, and his decree thereupon shows upon its face precisely what is the subject of further review. Ho difficulty, that we are aware of, has ever been experienced on this head in the supreme court, and we can see no reason why that practice may not here, as the section directs, be “applied in substance.” Upon an assignee’s accounting in the supreme court, or upon the accounting which frequently follows an interlocutory judgment, the referee makes his separate findings; and they must, of course, be excepted to, if they are to be reviewed. But, after that has been done, who ever heard of requiring the 61 N.Y.S.—12

It thus becomes necessary to consider the merits of the appeal. The appellant’s first complaint is .of the disallowance of a payment of $447.41 made to satisfy a judgment recovered against him by one Trumbull. Trumbull claimed to own a furniture van and two horses, which came into the appellant’s possession when ho entered upon his duties. The appellant resisted the claim, and Trumbull sued him personally for conversion, and obtained the judgment in question. The evidence tends to show that the appellant bought these articles, from the estate. He admits that he took the van,

The appellant also complains of the disallowance of a payment of $427:57 made to satisfy another judgment obtained against him personally by one Aiken. We may say that the appellant was not only justified in resisting Aiken’s demand, but he was bound, under the circumstances, to contest it. Aiken was a youthful employé of the decedent, at a small salary. He claimed a one-half interest in a certain secondhand furniture business carried on by the decedent. He did not pretend to have contributed any money to the business, and he offered no documentary evidence of an agreement giving him an interest in it. The claim was plainly suspicious, and the appellant could not properly do otherwise than resist it. Unfortunately, however, there is no evidence of diligent resistance or of genuine good faith in the effort to defeat this claim. The recovery of a judgment against the administrator personally was not enough, standing alone, to justify the surrogate in charging the estate with its amount. The facts and circumstances attendant upon the litigation and the trial should at least have been shown, and the referee and surrogate would then have been enabled to decide advisedly whether the administrator and his counsel had defended the case with reasonable care and skill,—in other words, whether the defense was active and reasonably adequate, or merely formal and perfunctory. The burden was upon the administrator, claiming the allowance against the estate of a judgment rendered against him personally, to show good faith and diligence; and he cannot be said to have fulfilled that burden by simply putting in the pleadings and judgment, and leaving all else entirely to presumption. If this item should be allowed, upon the bare fact of a

The appellant was surcharged with the sum of $307, as the value of the other one-half of the secondhand furniture business concededly belonging to the deceased. This sum was the amount of the verdict recovered by Aiken in the action against the appellant personally, to which we have referred. The referee adopted it as the standard of value of the decedent’s one-half interest. We think this was clearly erroneous. The judgment in the Aiken suit was between different parties,—that is, between Aiken and the administrator personally,—while this proceeding is between the administrator, as such, and those who contest his account. It was not binding upon the administrator in his representative capacity, any more than it would have been binding upon the contestant. As evidence against the administrator in his representative capacity it was entirely incompetent,—in fact,' irrelevant and. immaterial. If the verdict had been for a nominal sum, it certainly would not have bound the estate or this contestant. The appellant could only be charged here upon independent evidence as to the value of this interest. There was no such evidence,—no definite evidence of its value at all. It follows that this part of the decree cannot stand.

The appellant was also charged with the sum of $1,20'0 for the lease and good will of the decedent’s business, instead of $105, the sum for which they were sold at auction. This was clearly proper. The sale was made nominally to the appellant’s son-in-law; but the latter almost immediately transferred the property to the appellant, and it is practically uncontradicted that the appellant was the real purchaser. He was thus accountable for the true value of the property. Ames v. Downing, 1 Bradf. Sur. 321. Upon this latter question considerable evidence was given, which we have examined carefully. We think, notwithstanding the ingenious and elaborate argument of the learned counsel for the appellant, that it amply justified the award.

The decree denies costs to the administrator, while allowing him commissions. We think that it would have been a justifiable exercise of discretion to deny both costs and commissions, for it appeared that the appellant omitted important items of property from his account, and bought in property of the estate for himself at inadequate figures. Under such circumstances, the fact that he was allowed commissions affords him no right to insist upon costs, also.

The other points presented by the appellant are unimportant, ■and call for no special consideration. So far as the exceptions to the refusals to admit certain evidence are concerned, the appellant was not prejudiced, and the provision of section 2545, that a sur

The decree should be modified by disallowing the sum of $307, with which the appellant was charged, and as modified affirmed, without costs of the appeal. All concur.