Thurston v. E. P. Wilbur Trust Co.

The infants, E. Coppee Thurston, Joseph Wharton Thurston, William Wharton Thurston and Mary Wharton Thurston were parties defendant in an action of partition in this court and by the final judgment confirming the sale, entered April 17th, 1893, it was directed that their shares be paid over to their general guardian if any should be appointed within sixty days and should have given a bond to be approved by the court within the same period. The share of each infant was $1,610.75.

Within the period specified, general guardians for the inEants were appointed in Pennsylvania; Joseph Wharton guardian of the first three named infants, and Louisa Nina Wharton of the last named. A bond in $60,000 was given by Joseph Wharton and in $20,000 by Louisa Nina Wharton in the Orphans’ Court of Northampton County, Pennsylvania. The bond was never presented to this court for approval. On July 5th, after the sixty days had expired, ancillary letters of guardianship were issued by the surrogate of New York county to the said guardians.

No bond having been presented for approval to the court within the period limited by the judgment, the referee paid the shares of the infants into court and the money was deposited with the chamberlain of the City of New York. The chamberlain, as appears upon inquiry, disposed of the money in the following manner: He used $5,000 towards the purchase of an $8,000 mortgage and used $1,000 towards the purchase of an $18,000 mortgage and retains the balance, $410.79, in cash. An application was afterwards made to the special term upon the affidavit of the guardian ad litem of the infant defendants and of the attorney in Pennsylvania of the general guardians of the infants for an order that the infants’ share be paid over by the chamberlain to the said general guardians. The application was referred to the general term, as the learned judge at special term was in doubt as to the power of the court to grant the application.

The Code provides (§ 1581,) with respect to the distribution of the proceeds of sale in partition, that the court may direct the share of an infant to be invested in permanent securities in the name and for the benefit of the infant, or may direct it paid over to his general guardian when he shall have executed a bond to the infant with two sureties approved by the court; or, if any of the moneys shall have been paid to the county treasurer, on proof that such money has remained uninvested in permanent securities for the space of three months, may direct the same to be paid to the general guardian upon his giving an undertaking in an amount and with sureties satisfactory to the court for the faithful execution of his trust.

The court has never directed the share of these infants to be invested as provided by the section of the Code above referred to, and such investment as the city chamberlain has made was pur

The provisions of §§ 744 and 747 are qualified by the provisions of § 1581 when there is question of the disposition of moneys belonging to infants, and the provisions of the latter section will govern in such a case. By that section the investment of such moneys must be permanent securities in the name and for the benefit of the infant and if such money has remained uninvested in permanent securities for a space of three months the court may direct the same to be paid to the general guardian of the infants upon his giving the prescribed bond.

No such investment as is contemplated by the Code has been made of the fund in question. The money has been properly, so far as anything appears to the contrary, used by the chamberlain in such a way as to secure a substantial income. It has been mingled with other funds in his hands in the purchase of different mortgages for large amounts ; but, as I am informed, the chamberlain is prepared at short notice to substitute other moneys on deposit with him for any particular fund so employed, and thus converting the latter into cash, hold it subject to the disposition of the court. His investment of the moneys of these infants is therefore of a temporary and not permanent character.

As no “permanent investment in the name” of the infants, as required by § 1581 of the Code, has so far been made, the share of each must be deemed to be still uninvested and subject to the order of the court upon the application of the general guardians, authorized by the said section. The court, therefore, has power to direct such share to be paid over to the general guardian. In thus disposing of the particular case it must not be considered that we have any doubt of the power of the court to order the transfer by the chamberlain to the general guardian of an infant of any permanent security in which the share of such infant has been invested. Nothing in the Code limits the power of the court over the investments of moneys paid into court. By § 747 of the Code already cited, each court may direct that money paid into court or any security which represents property belonging to any suit or party interested therein may be transferred in any manner or form that appears to it best for the interests of the owners thereof. This

In this case we cannot order a transfer of the securities in which the infants’ money is at present tied up, because such security represents also an investment of other funds; but, treating the infants’ shares as uninvested for that reason the court will, upon a proper application at special term, make an order-under § 1581 for the payment of the infants’ shares to the general guardians of such infants upon their giving undertakings in an amount and with sureties satisfactory to the court for the faithful execution of their respective trusts.

The application to the special term should be in the form of a petition by the general guardians upon notice to the chamberlain and the proposed undertaking should be presented with the petition. An order may be entered accordingly.

All concur.