In re the Estate of Smith — 26 N.Y. St. Rep. 235

Majority

p. 235

In the Matter of the Estate of Hanford Smith, Deceased Application of Mrs. Drinker et al., to remove Trustee.

(Surrogate’s Court, New York County,

Filed September 20, 1889.)

Headnote

1. Trustee — Removal of.

The mere fact that the acts or omissions of a trustee complained of were done or omitted in good faith and with no dishonest purpose will not necessarily save the trustee from removal.

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2. Same — What facts will -wabbant.

The trustee omitted to charge herself with rents collected by her both before and after testator’s death. The testimony showed this to have been done with intent to conceal them from those interested and convert them to her own use. The referee found that there was no dishonest purpose, and that she acted in good faith. Held, that even if there was no dishonest purpose, there was such carelessness and inattention shown as to prove her to be an unsafe guardian of the property of others, and she "should therefore be removed.

Application for removal of trustee.

Dilloway, Davenport & Leeds, for petitioners; Ovide Dupre, for trustee.

The evidence which is now before the court shows that the learned referee has found that the respondent collected before the death of the testator the sum of $1,063, and afterwards the further sum of $465, and that she failed to charge herself in her account with any part of these sums, and that she was charged with the same by a decree of this court entered upon the report of a referee holding her liable for it. The learned referee herein, however, decides that her failure to charge herself with the moneys collected was not the result of dishonesty or bad faith, and concludes as matter of law that she was not guilty of any misconduct for which she "could be removed.

This conclusion of law seems to be deduced solely from the finding of fact as to the absence of dishonesty and bad faith in omitting to charge herself with the collections stated. It is apparent that, the learned referee has not considered whether the acts or omissions in question, although done or omitted to be done in good faith and with no dishonest purpose, might not involve such an improper application or administration of the funds of the trust, or such an improvident management thereof or such other misconduct, in the execution of the trust, as would justify the removal of the trustee. That the utmost good faith and honesty would not, in a multiplicity of instances, readily suggested as coming-' within the cases mentioned, save a trustee from removal from his-office, is manifest. The statute plainly recognizes this. Section 2817, subd. 2, Code Civ. Pro.; Estate of Stanton, 18 N. Y. State-Rep., 807; Morgan v. Morgan, 3 Dem., 616 .

I have very carefully examined and considered the evidence-which has been adduced before the learned referee, and am unable to reach any other conclusion than that which follows. The testimony of the respondent, given upon the previous reference, and. which has been admitted in evidence, discloses, to my mind, an intention on her part, existing at and previously to the time of the filing of her account, and afterward persisted in until discovery made impossible its further continuance, to conceal from the parties interested the fact of her reception of the rents collected,, and to convert the same 'to her use. This conduct I deem such dishonesty as would warrant her removal.

Aside from this, and assuming that she had no knowledge qf the amount of the rents she received in the month of May previously to her father’s death, which I do not believe, she should ab

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once, upon the death of her father (which occurred on the 11th day of May), or, at least, as soon thereafter as she had received her letters, have informed herself of their amount and the disbursements made from them, as she knew, I am satisfied from the evidence, that any balance remaining constituted assets of the estate for which she was accountable as executrix. Her testimony with regard to the rents received from Wolfe since the death of the testator, and her attempted explanation of her omission to charge herself with them, evidence such a degree of carelessness and inattention as prove her to be an unsafe guardian of the property of others. Her conduct with respect to the rents collected before, as well as after, her father’s death is such as to satisfy me that she has not shown that fidelity which the law exacts from a person in her position, but, on the contrary, she has so improvidently and faithlessly managed the property committed to her charge as to render her an unfit person for the due execution of her trust. Section 2817, subd. 3, Code Civ. Pro., and cases above cited.

It is hardly necessary to add that the fact that the trustee satisfied the decree which charged her with the rents in question — a decree which could have been enforced by procéedings for contempt — does not relieve her from liability to removal. Matter of Wiggins, 29 Hun, 271 .

I have thus reached a conclusion opposed to that arrived at by the learned referee, and am, therefore, constrained to overrule his report, and decide that the respondent should be removed from her office as trustee.