In re Rothschild — 96 N.Y.S. 372

Majority

p. 372

(109 App. Div. 546)

In re ROTHSCHILD. In re WEISELL’S ESTATE.

(Supreme Court, Appellate Division, First Department.

December 8, 1905.)

Headnote

1. Executors and Administrators—Temporary Administrators—Accounting —Parties.

Code Civ. Proc. § 2678, provides that, where a temporary administrator is appointed by the surrogate of the county of New York, the moneys of the estate must be deposited in a domestic incorporated trust company specially approved by the surrogate or designated in the general rules of practice. Section 2080 provides that the money' so deposited cannot be withdrawn, except by order of the surrogate: Section 2472, subsec. 6, confers jurisdiction upon the Surrogate’s Court to administer

p. 373

justice in all matters relating to the affairs of decedents. Held, that the Surrogate’s Court has jurisdiction to bring in a trust company, named as depositary of the funds in the hands of a temporary administrator, as a party to a judicial accounting of such administrator.

2. Depositaries—Designation—Order—Necessity op Service.

A trust company, designated by the Surrogate’s Court as depositary of funds in the hands of a temporary administrator, was bound by the order appointing it a depositary, although it was not served with a copy of the order, where the administrator, before depositing any funds with it, sent it a letter stating that he was required by the order of his appointment as temporary administrator to deposit funds with it, and inclosed in the letter the surrogate’s certificate as to his qualifications.

Houghton, X, dissenting.

Appeal from order of Surrogate, New York County. -

In the matter of the judicial accounting of David Rothschild, as temporary administrator of the goods, etc., of William Weisell, deceased. From an order making the Bankers’ Trust Company a party to th'e accounting, said company appeals.

Affirmed.

Argued before O’BRIEN, P. J., and PATTERSON, INGRAHAM, CLARICE, and HOUGHTON, JJ.

J. Du Pratt White, for appellant.

Henry White, for respondent.

One David Rothschild was appointed by the Surrogate’s Court the temporary administrator of the goods, chattels, and credits of 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 fluids coming into my hands as such temporary administrator in your company, I respectfully herewith inclose 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 bank book 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 file an account of his proceedings as temporary administrator within 15 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 were 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 rep

p. 374

resentatives 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 the proceeding, “so that whether or not they have the moneys 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 moneys 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 provides that, where the temporary administrator was aopointed 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 New York, and either specially approved by the surrogate or designated by the general rules of practice as a depositar}' of funds paid into court. Section 2680 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 o£ decedents ' according to„tlie 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 be drawn therefrom upon the court's order. The company became pro 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 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:

p. 375

“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., and PATTERSON and INGRAHAM, JJ., concur. HOUGHTON, J., dissents.