In re the Judicial Settlement of the Account of Kellogg

Majority

p. 668

Matter of the Judicial Settlement of the Account of Asa B. Kellogg, as Executor of Benjamin Akin, deceased.^[1]

(Court of Appeals,

Filed January 18, 1887.)

Headnote

1. Fraudulent Conveyance — Gift to Executor — Jurisdiction op Surrogate.

Prior to 1876 the testator held a note for upwards of $11,000 against the person subsequently his executor and in that year he gave it to said person who destroyed it. The testator lived till October 1881, when he died insol

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vent. After the time of this gift the testator had assets far exceeding in amount the value of his debts. Held, that the gift in absence of an actual intent to defraud (of which there was no proof) was not a fraud upon the creditors and must stand. Whether the surrogate on an accounting of the executor had jurisdiction to enter upon the inquiry whether the gift was fraudulent and void as to creditors. Quaere.

2. Practice — Appeal prom Surrogate’s decision — Exceptions — Wiiat reviewed — Code Civ. Pro., § 2545.

An appeal to the court of appeals from an affirmance by the general term of a surrogate’s decree brings nothing there for review, where there was no appeal to the general term and upon an appeal from a surrogate’s decree, no complaint can be made of any finding or decision which has not been excepted to.

3. Executor — Liability por money collected on check delivered before death op testator but drawn after.

A claim belonging to the testator was collected by an attorney and deposited in his bank account. He had been directed by the testator to pay it when collected to the executor as his agent. The attorney made the payment by check which was delivered at the office of the executor for him to some one there in charge. The testator died later in the same day. Two days later the executor drew the money on this check and credited it in his account with the testator. Held, that when the money was drawn upon the check the payment related back to the delivery of the check. That he did not draw the money as executor but as payee of the check and he could not, in law or equity, be compelled to account for the check, except by first applying it upon what the testator owed him in current account.

4. Same — Effect of admission of claim by.

The executor had admitted the claim upon a certain note. Held, that in so doing he acted for and represented all the persons interested in the estate. That upon this admission alone in the absence of countervailing evidence, fraud or collusion, the surrogate was authorized to order the executor to pay it.

5. Bills and notes — Evidence — Admission against interest.

Endorsements of the amounts received as interest together with the dates thereof were made by the holder of a certain note at the dates of such payments. All of the dates being while the note was in life, and when it was against the interest of the holder to make them, unless true. Held, that it mattered not that the last two payments were made after the lapse of six years from the date and maturity of the note. That it is the fact, and that alone, that it was against the interest of the holder to make such endorsement that makes them mima facie evidence of payments.

6. Evidence — Competent — Code Civ. Pro., § 829.

The testimony of the executor as to the payment by him of certain money to the testator, on an accounting by the executor when he sought a credit for that amount related to a personal transaction with the testator and was properly excluded under Code Civ. Pro., § 829.

7. Appeal — general term may modify Surrogate decree — Code Civ. Pro., § 2587.

On an appeal from a surrogate’s decree the only error found by the general term of the supreme court was the charge against the executor of his certain note, and the only modification of tlje surrogate’s decree was that made necessary by the disallowance of that charge. Held, that the general term was competent to make the modification under Code Civ. Pro., § 2587.

8. Same — Objections — What considered by court of appeals.

The only objection filed to a certain note before the Surrogate was that it had been paid. Held, that the objection that the note was barred by the statute of limitations could not prevail in the court of appeals.

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Appeal from an order of tbe supreme court, general term, third department, modifying, and affirming as modified, tbe decree of tbe surrogate’s court, of Rensselaer county, on tbe accounting of an executor.

Arthur II. Smith, for Sarah A. Kellogg, a legatee appl’t; L. Laflin Kellogg, for Asa B. Kellogg, executor appl’t; Matthew Kale, with Ward Cameron, for Aletha A. Akin, a creditor, resp’t and appl’t.

These appeals bring to our attention “several matters, which will be separately'considered.

1. Prior to 1876 the testator held a note for upwards of «111,000 against the executor, and early in that year he gave it to the executor, who destroyed it. The testator lived, until October 10, 1881, when he died insolvent. It was claimed by the testator’s widow, who at the accounting, was the sole creditor, that, at the time he made the gift of the note, the testator was insolvent, and hence that the gift was fraudulent and void as to her, and that, therefore, the executor, as to her, should be charged with the amount of the note. In the surrogate’s court he was so charged; but the general term reversed the decision of the surrogate as to that item, and relieved the executor from the charge, and, we think, correctly.- We do not determine that the surrogate had jurisdiction to enter upon the inquiry whether the gift was fraudulent and void as to creditors, and that, finding it fraudulent and void, he could, on that ground, charge the executor with it, although it was good and valid as against the testator. But passing the question of jurisdiction, we fail to End any evidence in the record that, at the time of the gift, more than five years before his death, the testator was insolvent. After that time, he had left a valuable farm and other assets, in all, far exceeding in amount the value of his debts, and hence the gift, in the absence of an actual intent to defraud, (of which there is no proof or finding,) was not a fraud upon the creditors, and must stand.

2. During the life-time of the testator, for some years prior to his death, the executor was the general agent of the testator, having the general management of his business, and as such he. placed in the hands of an attorney, a claim against one Schuyler for collection, Suit was brought upon it, and the attorney, some time before the death of the testator, collected $6,500. From that sum he deducted $500, for his services, and after-wards, on the tenth day of October, while the testator was still alive, he drew his own check upon a New York bank for the sum of $6,000, payable to the order of Asa B. Kellogg, the executor, and sent it to his office in the city of New York, and it was there delivered to some person who was in charge of the office, before the testator’s death, with directions to telegraph its de

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livery to the executor, wbo was then with the testator at Green-bush. The testator died the same day, and, on the twelfth day of October, the executor drew the money on the check, and credited it in his account with the testator. After such credit, there was still a balance due from him to the testator, with which he charged himself <rp. the accounting. The surrogate allowed the $6,000, as a credit in the account of the executor, as claimed by him. But some of the appellants claimed that that sum should have been charged to the executor as if he had actually received the check after the testator’s death, and that the courts below erred in not so charging it. We are of opinion that none of the appellants are in a position to claim any error here as to this item. Mrs. Akin, the widow, neither excepted to the finding of the referee, nor appealed to the general term. The general guardian of the infant appellants appealed, but did not except to any of the findings or decisions of the surrogate, and the special guardian of the'infants filed exceptions, but did not appeal to the general term. An appeal to this court from an affirmance by the general term of a surrogate’s decree brings nothing here for review, where there was no appeal to the general term, and, upon an appeal from a surrogate’s decree, no complaint can be made of any finding or decision which has not been excepted to. Code, § 2545. But for a further reason we think there was no error in reference to this item. The money, when collected, was deposited by the attorney in his bank account, and hence he became a debtor to the testator for that sum. He had been directed by the testator to pay it, when collected, to the executor, as his agent. He made such payment by .his check, and when the check was delivered at the office of the executor for him to some one there in charge, it was delivered to him, and operated as a payment sub modo. He could then treat it as funds in his hands, to be applied, so far as needed, in payment of what the testator then owed him. When the money was drawn upon the check, the payment related back to the delivery of the check. He did not draw the money as executor, but as payee of the check, and he could not, therefore, in law or equity, be compelled to account for the check except by first applying it upon what the testator owed him in current account.

3. At the time of the death of the testator, his widow held a note for $5,000 against him, given for borrowed money, dated March 17, 1870, upon which there were indorsed the following payments : $850, March 17, 1873; $350, March 17,1874; $350, March 17, 1875 ; $300, March 17, 1877; and $200, December 8, 1880. It was proved that the indorsements were made by Mrs. Akin at their dates. The note had been presented to the executor as a claim before the accounting', and admitted by him, and he had made payments upon it. The objection is now made by

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some of tbe appellants that the note was barred by the statute of limitations, and that the surrogate erred in ordering the executor to pay it. To this there are several answers. The only objection filed to this note before the surrogate was that it had been paid; and the statute of limitations does not appear to have been mentioned during the trial. The objection that the note was barred should not, therefore, prevail here. The executor had admitted the claim upon the note, and, in doing that, he acted for and represented all the persons interested in the estate. The admission implied that the note had not been paid, and that, by payments made thereon, it had been kept in life: and so, upon the admission alone, in the absence of countervailing evidence, fraud or collusion, the surrogate was authorized to find. But proof that the indorsements were made at their dates was sufficient to authorize the surrogate to find, and required him, in the absence of conflicting evidence, to find, that the note had been kept in life by payments actually made. The indorse-ments were all made while the note was in life, and when it was against the interest of the holder to make them unless true. It matters not that the last two payments were made after the lapse of six years from the date and maturity of the note. It is the fact, and that alone, that it was against the interest of the holder to make such indorsements, that makes them prima facie evidence of payments. Roseboom v. Billington, 17 Johns. 182 ; Risley v. Wightman, 13 Hun, 163 ; Hulbert v. Nichol, 20 Hun, 454 .

4. It is claimed, on behalf of the executor, that his evidence as to the payment of $590 to the testator was improperly excluded, and that he was thus erroneously deprived of a credit for that sum. The payment was a personal transaction with the testator, and hence, under section 829 of the Code, he was incompetent to prove it. We cannot be certain, from an examination of all the evidence, that the testator, by his previous examination on behalf of the contestants, had been rendered competent to testify as to the payment, and, in view of the small difference the allowance of this credit would make in the final result, we are constrained to hold that the surrogate did not err in reference thereto.

5. The executor claims that the general term erred in its modification of the surrogate’s decree, and that it should have sent the case back to the surrogate for a rehearing. By the finding of the surrogate that the executor was chargeable with his note for upwards of $11,000, the estate of the testator was shown to be solvent, and there was enough to pay all the debts in full. But when the general term, upon the claim of the executor, struck out the note as the charge against him, the estate was shown to be insolvent, and then it appeared that the executor had made an overpayment to one of the creditors, whom

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lie bad paid in full. In readjusting tbe account, tbe general term disallowed tbis overpayment, and in tbis no error was committed. Objection to tbe overpayment was distinctly made before tbe surrogate. Tbe general term bad power to reverse, affirm, or modify tbe decree appealed from. Code, § 2587. All tbe elements for tbe modification appeared in tbe findings of tbe surrogate, and it had the power to render such a judgment as the surrogate should have entered. Tbe only error found by the general term was tbe charge against the executor of bis note for upwards of $11,000, and interest, and tbe only modification of the surrogate’s decree was that made necessary by tbe disallowance of that charge, and that modification tbe general term was competent to make.

Tbis case is not without some difficulties; but, after careful consideration, we have reached the conclusion that tbe judgment should be affirmed, without costs to any party.

All concur.

Cases cited

Roseboom v. Billington 17 Johns. 182 N.Y. Sup. Ct. p. 672