In re the Judicial Settlement of the Estate of Gray — 6 N.Y. St. Rep. 97

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p. 97

Matter of the Judicial Settlement of the Estate of Charles B. Gray, Deceased—Claim of Sarah B. Lockwood, App’lt.

(Supreme Court, General Term, Second Department,

Filed December 14, 1886.)

Headnote

Reference of disputed claim—Report, when binding—How reviewed.

The appellant held a claim as she alleged against the estate of Charles B. Gray. The administrator rejected the claim, it was referred under the statute and it appeared that the appellant had endorsed and become surety upon papers made by Charles B Gray and G. C. Lockwood. They were partners and intended to use the money in their business and did so. The referee reported that the claim was a claim against the estate of Charles B. Gray and entitled to share with the individual creditors of the' deceased. This report was confirmed by the supreme court A decree of the surrogate’s court was entered upon the final settlement of the estate of decedent, directing that the individual creditors were to be paid first in full, and that the balance then remaining should be divided among the partnership claimants and included the appellant among the latter. Held, that the decree should be reversed; that the report of the referee having been confirmed by the supreme court, was binding and could only be reviewed by appeal.

Appeal from a decree of the surrogate of Orange county, entered on the final settlement of the estate of Charles B. Gray, deceased.

The appellant was surety and joint-maker on a certain note and an accommodation indorser upon five other notes, all of which notes were signed by Charles B. Gray and 0. G. Lockwood. All these notes were paid by appellant and she held them.

Gray and Lockwood were doing business at the time the notes were made, as partners under the firm name of Gray & Lockwood. The firm was dissolved several years before the death of Charles B. Gray, and the firm and Lockwood, the surviving 'partner,- are insolvent. The claims of Mrs. Lockwood were duly presented to the referee, who reported that they were all just claims against the estate of said Gray and that she was entitled to a share equally with the individual creditors and a judgment was entered in accordance with this report.

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The surrogate on this settlement of the final judicial settlement of said estate, was requested to find that this judgment was conclusive upon him as to the matters therein decided, and also that appellant was entitled to share equally with the nidi vidual creditors of decedent, both of which requests were refused. The surrogate holding that appellant’s claim should be deferred until the individual debts of decedent were paid and that she was only entitled to a share with the partnership creditors.

C. E. Cuddeback, for app’lt; Lewis E. Cass, in person and for individual creditors, res’pts.

The judgment of the supreme court was binding upon the surrogate’s court. The plaintiff held claims, as she alleged, against the estate of Charles B. Grey. The administrators rejected the claim. It was referred under the statute, and it appeared that the appellant bad indorsed and become surety upon papers made by Charles B. Grey and G. C. Lockwood. They were partners and intended to use the money in their business, and did so. The referee reported that the claim was a claim against the estate of Charles B. Grey and entitled to share with the individual creditors of the deceased.

This report was confirmed by this court. The statute is-very general in respect to claims against deceased persons, but broad enough to determine whether a creditor was entitled to share with the individual creditors of deceased or whether the claim was one which must await the payment in full of partnership debts before it was entitled to payment out of the assets. Besides this, it was the very thing submitted to the referee, by both parties by consent, to adjudicate upon her claims against the estate, and the adjudication in a court having jurisdiction of the subject matter and the parties, was binding and could only be reviewed by appeal. Fisher v. Hepburn, 48 N. Y., 41 . It was as valid as if commenced by ordinary process. 2 R. S., 89, § 37.

As to the $2,000 note, the appellant was a surety. It-was a joint and several note, and when the surety paid it she took the place of the debt as one against the individuals who made the note and each of them.

The decree. should be reversed and the proceedings remitted to the surrogate’s court with instructions to allow the appellant’s claim as an individual debt against the estate, with costs to appellant out of the estate.

Dykman, J., concurs.

(dissenting).—On the reference under the statute the order of distribution of the assets of the estate was not in question. That was nsot a question which the admin

Dissent

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istrator could legally submit in that proceeding, and what was done in that respect was not binding on the other creditors. They now have for the first time the opportunity to be heard.

The jurisdiction of a court to render a judgment can always be inquired into.

The decree of the surrogate should be affirmed.