In re the Judicial Settlement of the Estate of Strickland

Majority

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In the Matter of the Judicial Settlement of the Estate of Dan A. Strickland, Deceased.

(Surrogate’s Court, Cattaraugus County,

Filed April 10, 1889.)

Headnote

. 1. Executors and administrators—Jurisdiction of surrogate’s court

AS TO CLAIM DISPUTED BY ADMINISTRATOR.

A surrogate’s court possesses only a limited jurisdiction, and cannot ordinarily try a claim disputed by the administrator; but in order to carry out fully the powers vested in a surrogate’s court, incidental authority is lodged with the surrogate, even though its exercise may impose upon him the burden of trying a controverted demand.

2. Same—Effect of allowance of claim by administrator.

Where a claim is presented to an administrator, he must either allow or reject it. If he rejects it, the statute provides for a reference for its determination, and it is relegated to another tribunal; but if he allows it, that is the establishment of the demand so far as he is concerned, bu,t his action in allowing .the claim is not a res adjudicata as against the other creditors or the next of kin.

3. Same—Accounting of—Every item may be contested—Parties—Jur-

isdiction of surrogate.

When an administrator presents his account for judicial settlement,

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every item may be controverted and his entire management of the estate may be overhauled. All claims, whether allowed by him or not, or even if he has paid them, may be litigated and passed upon by the surrogate; but on such settlement of the account, the creditor, whose claim was paid or allowed by the administrator, is not a party to the proceeding—the administrator stands in place of the creditor—and becomes the claimant, and the controversy, if any, is between him and the other creditors and next of kin, and over that the surrogate has jurisdiction.

4. Same—Any pabty mat contest the account—Code Civ. Peo., §§ 2730,

2743—Test in case of disputed claim.

Section 2730 of the Code permits anybody to “contest the account with respect to a matter affecting his interest in the settlement and distribution in the estate,” and section 2743 is not antagonistic to that section, for the “ disputed claim ” there mentioned has reference to one disputed by the administrator; otherwise any claim paid would be without the pale of the surrogate’s jurisdiction. This seems to be the test in such cases.

5. Same—Debt admitted bt administbatob—Effect of.

Notwithstanding many expressions in the cases to the effect that a debt admitted by the administrator becomes “an established and undisputed debt against the estate,” the law never designed to give such power to the administrator.

6. Same —Intebest on claim allowed bt administbatob—When ebbo-

NEGUS AND STBICKEN FBOM ACCOUNT.

In the case at bar, Abbey and the decedent had extensive mutual dealings, each having an open and unliquidated account against each other of many items. The administrator in adjusting a settlement with Abbey allowed him over twelve hundred dollars for interest in excess of that credited to the decedent. Held, that the allowance of this item was erroneous, and should be stricken out.

A. D. Scott, for the administrator; C. D. Murray and W. S. Thrasher, for the contesting creditors.

—Chauncey Abbey presented a claim of about $3,000 to the administrator of Dan A. Strickland, deceased, and the same was allowed by him.

Upon the judicial settlement of the account of the said administrator, objections thereto were filed, and particularly to the claim of the said Abbey.

The counsel for the administrator objects to the trial and consideration of such claim, on the ground that it involves the trial of a disputed claim, over which the surrogate’s court has no jurisdiction.

After a thorough search I am unable to find that this precise question has been determined by the courts of our state.

That a surrogate’s court possesses only a limited jurisdiction, and cannot ordinarily try a claim disputed by the administrator, has long been well established; but while this is so, it is equally well established that in order to carry out fully the powers with which a surrogate’s court is vested, incidental authority is lodged with the surrogate, even though its exercise may impose upon him the burden of trying a controverted demand.

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A brief examination of the authorities upon this vexed question may be of some service.

A surrogate’s court has jurisdiction to try a disputed claim in favor of an administrator against his intestate. Code, § 2739; Kyle v. Kyle, 67 N. Y., 400 , 408; Boughton v. Flint, 74 id., 476 . And a claim against an administrator in favor of a decedent. Everts v. Everts, 62 Barb., 577 ; 7 Paige, 112. And that, too, though the claim be held by him as administrator of another estate. Neilley v. Neilley, 89 N. Y., 352 . And one in which he is jointly interested. Shakespeare v. Markham, 72 N. Y., 400 . And against a firm of which the accounting party is a member. Matter of Eisner, 5 Dem., 383 . Also to try the question as to whether or not a claim has been rejected. Lambert v. Craft, 98 N. Y., 342 ; Bowne v. Lange, 4 Dem., 350 ; Hoyt v. Bonnett, 50 N. Y., 538 . And to try a disputed claim in proceedings to sell real estate, and for the payment of the debts of the decedent. Code, §§ 2755, 2759; In Re. Haxtun, 102 N. Y., 157 ; 1 N. Y. State Rep., 164; People ex rel. Adams v. Westbrook, 61 How., 138 . To try the validity of a debt against the decedent, allowed and paid by the administrator. In Re. Frazer, 92 N. Y., 239 . And to exercise such incidental powers as may be necessary. Code, §§ 2743, 2481; Hyland et al. v. Baxter, 98 N. Y., 610 ; In Re. Verplanck, 91 id., 439-450.

The mode of procedure for an administrator to follow is extremely simple; a claim is presented to him; his duty is plain; he must either allow or reject it. If he rejects it the statute provides for a reference for its determination, and it is relegated to another tribunal; but if he allows it, that is an establishment of the demand so far as he is concerned. His action in allowing the claim is not assuredly a finality, a res adjudicata, as against the creditors or next of kin. When he presents his account to be judicially settled, every account or item therein may be controverted; his entire management of the trust estate may be overhauled; the wisdom of his action in allowing demands against his intestate may all be litigated and and passed upon, even though such a course may involve the trial of a disputed claim.

Suppose he pays a claim presented to him ? The constant practice in the surrogate’s courts, ratified by the court of appeals, In re Frazer (92 N. Y., supra), is to try the claims paid by the administrator. Instead of paying the claims, the administrator may "allow them and defer their payment until the distribution on his judicial settlement. This will be the proper course for him, if the property of the decedent is insufficient to pay his debts in full, and he can do that in any case. Whether paid, or simply

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allowed by him, he seeks distribution on all bearing his approval in each instance, the controversy is over his account, between him and the next or kin or the creditors. The creditor whose claim is allowed is npt a party at all, to the proceeding, because he has complied with the statute, and his demand has received the sanction of the authorized representative of decedent., Now, suppose after the claim has been presented and allowed, one-half the same is paid by the administrator. He incorporates this in his account as a payment on this claim, and by the uniform practice of the court, this claim can be contested, although it involves the trial of a disputed claim, but the remaining half, which is also embodied in his account, and which he seeks to pay, cannot be controverted if the position of the administrator in this proceeding is correct. If that is the law, we are in this anomalous situation; one-half of the claim is within the jurisdiction of the surrogate’s court to litigate, and pass upon, and determine fully; and the other half depending upon the same proof to sustain it, with precisely the same ■defense, and affecting the same parties, must either be turned over to another tribunal, or perhaps is absolutely ■established, with all the verity of a judgment of a competent court, by the action of the administrator in admitting the demand as a debt against the decedent. An absurdity ■of that kind can hardly be upheld.

So far as the distributees are concerned, there is no distinction whatever, between a claim paid by the administrator, and one allowed by him but unpaid. In either case he stands in the place of the creditor whose demand has received his approval; he is the real claimant, the real party in interest, and is in the same predicament as if he was enforcing a personal demand; the controversy, if any, is between him and the next of kin, and over that a surrogate’s court has jurisdiction. To be sure, this compels him to make a vicarious sacrifice of himself, but no more in the one case than in the other.

Section 2730 of the Code is amply broad to cover a case of this kind, as it permits any party to “contest the account with respect to a matter affecting his interest in the settlement and distribution in the estate.”

Nor does section 2743 weigh against this, for the “disputed claim ” there mentioned has reference to one disputed by the administrator; otherwise any claim paid would be without the pale of the jurisdiction of the surrogate to,consider, and to my mind that makes the test in all the cases.

There are many expressions in the authorities to the effect that a debt admitted by the administrator becomes “an established and undisputed debt against the estate.” Lambert v. Craft (supra).

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If this language is to be taken literally, no court would have jurisdiction to pass upon the validity of a debt that had received the omnipotent sanction of an administrator, for his allowance of a claim would give it all the weight and dignity of a judgment. It was never designed to give such power to an administrator.

In the case under consideration, it appears that Abbey and decedent were dealing together quite extensively and each had an open and unliquidated account against the other, containing many items. In adjusting this account with Abbey, the administrator allowed him over $1,300 for interest in excess of that credited to the decedent. The allowance of this item was erroneous, and should be stricken out. Hand v. Church, 39 Hun, 303 ; McCollum, as Adm’x, v. Seward, 62 N. Y., 316 ; Mercer v. Vose, 67 id., 56; McMaster v. The State of New York, 108 id., 542, 557; 13 N. Y. State Rep., 674.

Findings of facts will be prepared, and a decree entered in accordance herewith, and I will then adjust the costs.