Palmer v. Kingsford — 20 N.Y. St. Rep. 761

Majority

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John G. Palmer, as Administrator of the Estate of Harmon L. Wilber, Deceased, App’lt, v. Thomas Kingsford, Resp’t.^[1]

(Court of Appeals,

Filed January 29, 1889.)

Headnote

1. Administrator—Duty to divide estate—Who cannot question division.

It is the duty of an administrator to divide the estate he holds as such among those entitled thereto according to law; and the debts having been paid, no one can complain of a division of the estate among those entitled, thereto according to their respective rights.

2. Same—When may divide estate in specie—Who can demand an accounting.

Where the debts have all been paid, there is no role of law which prohibits the administrator, who is an heir of the intestate, from dividing up the estate and appropriating a portion thereof to himself and a portion to the other parties interested. The parties interested can afterward investigate the conduct of the administrator and ask for an accounting from him in reference to the property which he took and disposed of.

3. Same—When cannot assail act of predecessor.

An administrator who seeks to recover a note (given to a previous ad

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ministrator of his intestate on the settlement of the affairs of a co-partnership and the transfer of the intestate’s interest to the maker of the note) cannot in the same action assail the settlement and transfer. Éy bringing the action he affirms the settlement and transfer and becomes bound thereby.

» Appeal from a judgment of the supreme court, general term, fourth department, affirming the judgment of the special term dismissing the complaint entered upon the report of a referee.

The plaintiff brought this action in the supreme court as administrator of the estate of Harmon L. Wilbur, deceased, to recover from the defendant the value of a note made by him for $30,117.47, dated January 1, 1879, and also of six first mortgage sinking fund bonds of the Oswego Water Works Company of $1,000 each, which he alleged in his complaint belonged to the estate of his intestate, and the defendant wrongfully took and appropriated to his own, use on the 3d day of May, 1879. The cause was put at issue and referred to a referee, and the material facts found by him are as follows : That on or about the 26th day of October, 1853, Thomas-Kingsford and his son, Thomson Kingsford, the defendant-in'this action, were the owners of the real estate, buildings and machinery therein, situate in Oswego, and of the business of manufacturing boxes carried on in such buildings ; that Ann Wilber was the step-daughter of Thomas Kingsford and the half-sister of Thomson Kingsford, and on- the 5th day of October, 1853, ■she married Harmon L. Wilber; that on April 14, 1854, Thomas Kingsford, Thomson Kingsford and Wilbur made and executed, in writing, an agreement, of which the following is a copy :

“ Thomas Kingsford and Thomson Kingsford and Harmon L. Wilber, all of the city of Oswego, have joined themselves together as copartners, under the firm name and style of T. Kingsford, Son & Co., for the manufacture of boxes for the starch factory, or any other kindred business, and planing and splitting lumber, and also buying and selling lumber of all kinds. Said copartnership is to commence on the 26th day of October, 1853, and to continue for the term of five years, with the understanding, however, that the same may be sooner terminated at the end of any of said years in case any of said partners shall give six months’ notice of their intention so to terminate it to the other members of said firm. Each member shall receive interest on the amount he puts into the capital; losses to be borne equally between the parties and profits to be. •divided in the same proportions. Neither member of the firm shall use the name or credit of the firm for any other purpose except for the business connected with the firm.

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It is understood that the said Harmon L. Wilbur shall devote his entire time and energies to the business of the firm, and for which he shall receive from the firm the annual salary of $600. It is understood that said Kings-fords shall devote only so much of their time to the said business as they may find necessary. Books of account shall be kept, in which shall be entered all the transactions of said firm.

That at the time of making such agreement it was mutually understood and agreed by and between the parties thereto and Ann Wilber that she should contribute and put into the partnership as a part of the capital the sum of $1,500, and that she should be a member of the partnership, and be interested therein equally with her husband in the one-third part thereof, each to be interested in and «entitled to one-sixth part of such partnership and in such proportions to share in the profits and losses thereof; that pursuant to such understanding and agreement Ann Wil-. her paid into the partnership, as a part of the capital thereof, $1,500, her own money, given to her by Thomas Kingsford, and Harmon L. Wilber paid into the partnership as a part of the capital thereof $1,500 loaned to him by Thomas Kingsford; that from entries in the books of the partnership it appears that the capital of the partnership was $10,500, of which Thomas Kingsford and Thomson Kingsford each paid in and is credited with having paid in one-third part thereof, and Harmon L. Wilber, including the $1,500 paid in by his wife, is credited with having paid in one-third part thereof; and that by virtue of the agreement and the payment of the money into the partnership Ann Wilber became a member .of and interested in the partnership equally with her husband in the one-third part thereof, each being interested in and owning one-sixth part of the partnership and entitled to share in one-sixth part of the profits and losses thereof; that the partnership carried on business up to the death of Harmon H Wilber; that he died on or about the 20th day of January, 1867, and at the time of his death he left him survivmg_ his widow, Ann Wilber, and two minor daughters, Julia A. and Virginia, his only heirs and next of kin.

That in February, 1867, Ann Wilber, was duly appointed by the surrogate of Oswego county, administratrix of the •estate of her husband, and duly qualified as such administratrix, and caused to be made, and filed an appraisal of the estate, including her husband’s' one-sixth interest of the partnership, which was appraised at $4,500; that all the •claims and debts against and owing by the estate were settled and paid by the administratrix within the first year of her administration, and there are now no creditors of the

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estate; that no further proceedings were ever taken by theadministratrix for the settlement of the estate, and there-never was any accounting or settlement, or distribution of the estate by the administratrix; that in the month of February, 1867, Ann Wilber, was duly appointed by the surrogate of Oswego county, the general guardian of her two-minor daughters, and qualified as such, and she continued such guardian to the time of her death, hereinafter stated; she never rendered any account as such guardian; that Virginia Wilber, "while still a minor, on or about the 5th day of October, 1869, died intestate, unmarried and without issue, and leaving her surviving her mother and her sister, her only heirs and next of kin: that after the death of Harmon L. Wilber, there was no accounting, adjustment or settlement of his interest in the partnership between the administratrix of his estate and the surviving partners, and no withdrawal of such interest from the partnership, but the-business of the partnership was continued and carried on by the surviving partners the same as before his death.

That in 1869 Thomas Kingsford died,and his one-third interest in the partnership became the property of defendant, and from that time he was the owner of two-thirds interest in the partnership; that after the death of Thomas Kingsford, the partnership business was continued and carried on by the surviving partners until the 1st of January, 1876, when the partnership was dissolved, an inventory of the property of the partnership was made, by which it appeared that such assets and property at that time were of the value of one hundred and fifty-three thousand, nine hundred and two dollars* and twenty-six cents; that Ann Wilber, in her own right, and as guardian of her daughter, and as administratrix of the estate of her husband had made a settlement with Thomson Kingsford of the partnership business and of her several interest therein, whereby it was settled and agreed by and between them, that at the time the interest of Ann Wilber, in her own right as guardian of her daughter, and the interest of the estate of her husband, being together a one-third interest in the partnership, were of the value, and amounted to the sum of fifty-one thousand three hundred dollars and seventy-five cents; that thereupon on the 1st day of January, 1876, Thomson Kingsford executed and delivered to her his two promissory notes for the fifty-one thousand three hundred dollars and seventy-five cents, one being for thirty-four thousand two hundred dollars and fifty cents and one for seventeen thousand one hundred dollars and twenty-five cents, and in consideration thereof she executed and delivered to Thomson Kingsford two instruments

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in writing, one of which instruments was executed by her individually and as administratrix to the estate of Harmon L. Wilber, whereby in consideration of $34,300.75, she sold, •assigned and transferred to him all her right, title and interest in both of such capacities in and to the partnership assets and property; and the other of which instruments was executed by her as guardian of Julia A. Wilber, whereby in consideration of $17,100.75, as such guardian, she sold, transferred and assigned to him all the right, title and interest of Julia A. Wilber in and to the partnership property. That after the settlement and during her life, down to January 1, 1879, the defendant advanced to and paid for her divers sums of money in each year; and on or about the first of January in each year they had a settlement, and such money was deducted from the amount of the notes and new notes given by the defendant for the amounts still remaining unpaid, the smaller in amount of the renewal notes being made to the order of Ann Wilber, guardian; that the last two notes so given were dated January 1, 1879, one thereof payable on demand to the order of Mrs. Ann Wilber, for $30,117.47; and one payable on demand to the order of Mrs. Ann Wilber, guardian, for $20,948.53. That on the 37th day of April, 1879, Ann Wilber was attacked by sickness, of which she died on the eighteenth day of May following. That on 3d day óf May, 1879, while she was sick and confined to her bed, she made a distribution of the property by gifts as follows:

She gave, surrendered and delivered to the defendant, with the intention that he should have and retain the same, his promissory note given by him to her, dated January 1, 1879, for $30,117.41 and also six bonds of the Oswego water works company of $1,000 each and worth a premium of about ten per cent, and the defendant received and has since retained the same. She also gave to the defendant a vacant lot, in the city of Oswego, of about the value of $2,000 and requested Julia A. Wilber to deed the same to the defendant when she should become of age. She gave and requested that there should be paid out of money she had on deposit in the savings bank, in Oswego, $1,000 each to four parties designated by her. The rest of the said property she gave'to her daughter, Julia A. Wilber, at the time delivering to her the note of the defendant for $20,948.53, dated January 1, 1879; and six of the bonds of the Oswego water works company of $1,000 each, and naming over the personal property and the real estate so given to her.

That at the time of making such gifts she was of sound mind and understanding and fully competent mentally to dispose of her property, and to make the gifts ; that upon the death of Harmon L. Wilber, his widow became the owner in her own right of one-third of his interest in the partnership and his two daughters the owners each of one-

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third of the other two-thirds interest; and upon the death of Virginia, Ann Wilber became the owner of one-half of Virginia’s interest and Julia A. Wilber the owner of the other half; so that Ann Wilber, with her own interest in the partnership, upon the death of her husband and daughter, became and was the owner in her own right of ’ three-fourths of the one-third interest in the partnership. That the securities so given by the said Ann Wilber were considerably less than her share or portion of the property so held by her, and she had the right to give the same as a part of her own property; that it is not shown nor does, it appear that such securities belonged to, or were a part of, the estate of Harmon L. Wilber, so as to entitle the plaintiff to recover the same in this action. That on September 29, 1882, John Gr. Palmer was appointed the administrator of the estate of Harmon L. Wilber, and qualified as such administrator and commenced this action on September 30, 1882, a demand having been previously made by him of the defendant for the note and bonds, for which this action was brought, and the defendant refused to give them up.

The referee found as matter of law that Ann Wilber, though a married woman, could legally become a member of, and interested in, the partnership. That the plaintiff is not entitled to recover in this action the notes or bonds' or the proceeds thereof. That the note and bonds given by Ann Wilber to the defendant were her property, and she had the right to give the same; and that the gifts of the same to the defendant were legal and valid, and by reason thereof the defendant became the owner thereof; and he. ordered judgment in favor of the plaintiff, dismissing the complaint, with costs. That judgment, upon the appeal of the plaintiff, having been affirmed by the general term, this appeal was brought to this court.

William, H. Kenyon, for app’lt; ri. C. Huntington, for resp’t.

The finding of the referee that Ann Wilbur was a member of the firm of T. Kingsford, Son & Co., is assailed by the plaintiff, and we do not deem it important to determine whether that finding was justified by the evidence and the law or whether any illegal evidence was taken relating thereto,- because we think the result must be the same whether she was a member of that firm or' not.

If the referee was right in his finding and she was a. member of the firm, then upon the death of her husband she and the Kingsfords became the surviving partners and had the right to the possession and control of the partnership property, and the legal title thereto was vested in them. By mutual consent they carried on the partnership-business until the death of Thomas Kingsford in 1869, and

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then she and Thompson Kingsford as surviving partners carried it on until the first day of January,-1876, when she settled with him and sold and transferred to him the entire assets remaining of the firm. In consequence of the death of her daughter Virginia she became and was the owner of one-half of her husband’s interest in the firm, which together with her one-sixth interest gave her three-quarters of the one-third interest which stood on the books of the firm in his name.

In this action the plaintiff cannot assail the settlement and transfer which was made on the 1st day of January, 1876, because the note which he seeks to recover in this action is part of the consideration given upon that transfer, and by claiming the same he affirms the settlement and transfer, and becomes bound thereby. At the time of that settlement she transferred the interest which her daughter had in the firm as the only child of Harmon L. Wilbur. She also transferred her individual interest which she' owned as a member of the firm or as the widow of the deceased, and also all the right and title which she had as administratrix. The whole one-third of the firm assets amounted at that time to $51,300.75, and she took one note payable to herself for $34,200.50, and one note to herself as guardian for $17,100.25. Upon the assumption that she was a member of the firm the note which she took to herself was less than her personal interest in the partnership. And she had a good title to the note, and a lawful right to dispose of the same. It is not seriously contended that if the finding be sustained that she was a member of the firm that the plaintiff as administrator of her husband has any standing for the maintenance of this action.

But it is equally clear that the action must fail if we assume that she was not a member of the firm, and that the only interest she had in the firm property on the 1st day of January, 1876, was in some or all of her capacities ás administratrix, widow, heir of her deceased daughter and guardian of her surviving daughter. Then she was beneficially interested in one-half of the firm property and her daughter Julia in the other half. All the debts of the estate having been paid .within a year after the death of her husband there was no one interested in the estate on the 1st day of January, 1876, and during the eight previous years but herself and her daughter. No one else could call her to account or question any of her acts. During that time it must be deemed and held that the partnership was carried on and managed for the benefit of herself and daughter, representing the one-third interest therein, and the other partners; and on the 1st day of January the one-third interest by operation of law and the acts of the parties had ceased to belong to her husband’s estate had been separated therefrom and absolutely belonged to her

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and her daughter, and no other human being had any interest therein. But for her daughter she could have dealt with that interest in any way she saw fit. She could have sold or assigned or given it away, or bequeathed it and the title thereto would have passed, and being the guardian of her daughter she was perfectly competent at any time to convey a good title to the whole of the interest. Hasbrouck v. Hasbrouck, 27 N. Y., 182 ; Sage v. Woodin, 66 id., 578.

It was not necessary for her at that time, nine years after the death of her husband, during all of which time the partnership, as to the one-third interest, had been carried on for the benefit of herself and her daughter, and that interest had been by her exclusively appropriated to the use of herself and her daughter, to act or assume to act as administrator in making the transfer. It was sufficient for her to act in her individual capacity and as guardian of her daughter to convey a perfect title. And hence the proceeds of that sale in the form, of the two notes never became part of her husband’s estate, and this plaintiff as administrator of the estate has no right to claim the same or maintain any action in reference thereto.

But still further, if we assume that this sale was made by her as administratrix, and that she was bound to make ■it and could make it only in that capacity, the result is still the same. Having sold the property and taken these notes therefor, she had the right to divide the same between herself and her daughter. If she had received money upon the sale for the whole purchase price, and had set apart half of it for her daughter and half of it for herself, the division would have been complete, and the property so divided would no longer have belonged to or been part of the estate of Harmon L. Wilber. It is the duty of an administrator to divide the estate he holds as such among those entitled thereto according to law; and the debts having been paid no one can complain of a division of the estate among those entitled thereto according to their respective rights. On this sale she took and set apart to her daughter the one note as her share, and that note' was subsequently delivered to the daughter, and she retained the same and had the benefit thereof. The other note she took to herself as her own individual share of her husband’s estate. While, upon the assumption that she was not a member .of the firm, that note was more than her interest in the firm property, it does not appear to be more than her share of the property then sold," and of that which she had previously received as the proceeds of the firm business. In the division of the property she made on the 3d day of. May, 1879, she gave her daughter more than one-half, so

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■that it cannot be said that the whole of the note given to the defendant, was not at that time, as between her and her daughter, her property. By what took place at the time of the sale in 1876, and subsequently thereto and on the 3d day of May, 1879, that note ceased to be part of the estate of Harmon L. Wilber, and she was entitled to dispose of the same as- she willed.

This plaintiff has no right to question the gift which Mrs. Wilber made to the defendant. There is no rule of law which prohibits an administratrix thus situated from dividing up the estate and appropriating a portion thereof to herself and a portion to the other parties interested. In this case her daughter Julia, who afterwards intermarried with the plaintiff, could have questioned the disposition of the property ; or the plaintiff, as administrator of. Harmon L. Wilber, could investigate her conduct and ask for an accounting from her administrator in reference to the property which she took and disposed of. But this plaintiff, as administrator of Harmon L. Wilber, cannot come into court affirming the sale, and then claim that this note taken to Mrs. Wilber, and by her disposed of as her own, is part of the estate of Harmon L. Wilber. It is a sufficient answer to this action that she had some interest in. that note, and assumed to have the entire interest, and, therefore, it cannot be said that the whole of that note belonged to the estate of W ilber, and his administrator cannot repudiate the gift made by her.

We have not deemed it very important to scrutinize the ■evidence as to the gift of the note. While we find it ample to sustain the findings of the referee, it is a sufficient answer to the plaintiff’s contention that even if the gift was for any reason invalid, there is no foundation for the maintenance of this action to recover the note.

All we have said with reference to the note applies with ■equal force to the bonds ; and as to them there is also entire .absence of proof that they ever belonged to the estate of Harmon L. Wilber.

We think the jugment should be affirmed, with costs.

All concur, except Pojg-eb, Oh. J., not sitting.