Brown v. King

This is an application by parties interested in the proceeds of land sold under judgment in partition in this action to compel the executor of the referee appointed by the judgment to pay over $1,230.15 to the county treasurer as required by the judgment, besides interest. The receipt of this sum by the referee prior to July 1, 1876, has been proven. The final order or judgment requires the payment of $2,665.66 to the county treasurer, besides $245.40 to the petitioners for their costs and disbursements.

Independently of the question of practice the liability of the «estate of the referee in the hands of his executor seems plainly established by the facts found by the referee and recited in the order. But the question of practice will, I think, be found to depend on the nature of this liability. If the executor had found the specific fund on the death of his testator, or any other fund of which it formed part, so that it could be ear-marked, then it did not pass to him as a part of the decedent’s estate at all In that view it formed a part of a fund in this court which ought to have been in the county treasurer’s hands. The executor became its possessor by mere accident and a trust arose ex aequo et bona, for the benefit of lawful owners of the money. I am inclined to think that, on this hypothesis, and to this extent at least, it would have been proper practice to have required the executor by summary application in this action to have turned over the money to the county treasurer.

But this is not the case made by the petitioners. It may be that the findings of the referee will bear that construction, but I do not think that view is sustained by the evidence. The petitioners were not content with proving simply the receipt of the money and the failure to pay it over as required by the judgment. If they had stopped there perhaps they might have justified their practice on the theory that the presumption was that the money remained in the referee’s hands at his death as a separate fund or in some fund which came to the executor’s custody. They proved by the referee’s son that his father said that he had deposited this money in a savings bank; and the same line of proof showed that the deposit was made with the approval of the petitioners’ counsel. This proof was not controverted. They then proved farther that the referee had declared to his son'that he had withdrawn this money, to the extent, at least, of $1,000, and in-vested it as a private business venture. Thus it was an easy matter for petitioners to have proven that the deposit was not made .at all, if that was the fact, and how much, if any, of the fund remained on deposit, if it was true that the deposit was made., At all events it was the duty of the petitioners to -have shown by some proof that the executor received this fund so that it could be ear-marked, and a finding that the money had gone into his •estate was not enough.

They, by their own proof, created the presumption that the referee has misapplied the fund in his own business, and they then failed to ear-mark any particular fund. The proof, therefore, as it

I have thus far spoken only of the original fund of $1,230.15, Undoubtedly, if the petitioners had proceeded against the referee-in his lifetime they could have obtained an order, on a mere motion in the original partition action, to compel the payment of this money to the county treasurer and the interest as well by some form of summary proceeding, charging him with annual rests in the computation. The liability for interest comes in place-of damage for the failure to perform the duties of the referee's-trust, but it by no means follows that the same remedy ■would apply for this interest by way of damages against, the executor of the referee thus in default, especially when it appears that he used the principal fund in his business and its-identity was thus lost.

The question then arises, can this order or judgment be sustained as made in a proper proceeding against the executor ? His-testator died January 9, 1889. He received letters testamentary March, 1889. This proceeding was commenced December 18r 1890, twenty-one months after the qualification of the executor. It did not appear that any claim had ever been exhibited to the executor against the estate of his decedent, and, hence, the case cannot be technically classed as a proceeding on the reference of a, disputed claim under the statute.

But, for all that, it was competent for the owners of this fund to commence an action against the executor. So, too, it matters not. .how the litigants got into court to litigate this matter so long as-they got there in some proper proceeding. The court had jurisdiction of the subject matter, and these parties appear to have subjected themselves to its jurisdiction.' The question of jurisdiction or regularity seems to have been raised or suggested forth e first time on this appeal. I am, therefore, inclined to think that it is too late to raise any question of jurisdiction or regularity.

Coming, then, to the merits, we find proof that the estate of the-referee is solvent and able to pay this claim in full.

The executor seems to have raised no point before the referee-about notice of the claim. The amount directed to be paid is $2,665.66, which is $1,435.51 by way of interest. This sum is clearly within the amount for which the referee would have been liable if he had lived, charging him only with simple interest, but .making annual rests in the computation. That rule doubtless applies to his executors. Hence, the sum awarded is not beyond,, but is within the liability of the decedent’s estate.

But the order or judgment directs payment of this sum and not, simply its recovery, leaving the executor to pay the claim in the ordinary course of administration. I cannot see why this should have been done. Again, the order or judgment requires payment-

It would, therefore, seem that this final decretal order, whether we call it a final order in a special proceeding or a judgment, must be modified in both these respects; i. e., it must be reduced to a mere recovery, and there should be no costs except after regular .application under the appropriate sections of the Code.

We come then to the final question : Gan this proceeding and order be justified on any technical ground ? I do not think it can be sustained as a mere order or a mere motion in the old partition action. The executor was not a party, and the whole subject-matter of the inquiry was not appropriate to a simple motion. There are difficulties also in the way of treating the application as an action. It is not in any form appropriate to an action. The petitioners are not the owners of the money or claim. The title to it would seem to be in the county treasurer as a trustee for the unknown owners for whose benefit it was to be paid to him. The -defendants doubtless have an interest in it in default of such unknown owners. But the rule is that before they can maintain an .action for its recovery in their own names, they must show that there has been something equivalent to a demand upon, and refusal by, their trustee to sue to enforce their rights.

But the fact still appears that these parties have voluntarily -come into this court, taken these proceedings up to the making of this final order, without objection. They have made this record for themselves, and with the modifications above suggested substantial justice will be accomplished. If there is any irregularity -or informality it is their own fault, and I do not see why the ■court should do more than simply to make such determination as would have been appropriate in an action or proceeding formally •commenced.

Order, modified as above stated, affirmed, without costs.

Dykman, J., concurs; Barnard, P. J., not sitting.