Continental Trust Co. v. Nobel

Since the decision of the general term of this court in Knox v. Nobel, in which the validity of the appointment of the testator’s widow as administratrix was in question, it is settled that the act of the surrogate in issuing letters to the widow was void, as she was then a minor, and that any contract made by her as administratrix, so far as it attempted to bind the estate of her husband was also void. See 77 Hun, 282 ; 59 St. Rep. 387 .

The letters that the surrogate issued which attempted to appoint testator’s widow as administratrix, being void, there was no representative of the estate, with whom the defendant could deal, or make any contract that would bind the estate. The bill of sale that he received from the widow was therefore an absolute nullity, so far as the estate was concerned; and the plaintiff, having been duly appointed administrator, and being in a position to enforce the rights and obligations of the estate, is clearly entitled to require the defendant, as surviving partner, to account for the co-partnership property in his hands.

It is not necessary that I should pass upon the question as to whether or not Nobel had knowledge of the fact that the widow was a minor, and that the letters issued to her were void, or that he procured her appointment as administratrix for the purpose of

Upon the death of the plaintiff’s testator it was the duty of the surviving partner at once to close up the business, reduce the estate to cash, pay the debts, and divide the balance remaining; but, where the surviving partner fails to perform this duty, he is held accountable for all profits made with the copartnership property up to the time of a final decree dissolving the copartnership and directing an accounting. Thus the rule is stated in 17 Am. & Eng. Enc Law, p. 1166: “And, if the surviving partner continues the trade or business with the partnership stock, it is at his own risk; and he will be liable, at the option of the representatives of the deceased partner, to account for the profits made thereby, or to be charged with the interest upon the deceased partner’s share of the surplus, besides bearing all the losses.”

In this case the estate of the deceased partner has elected to require the surviving partner to account for the profits made from the copartnership property, and the plaintiff is entitled to such a judgment The defendant, of course, would be entitled to be credited with all the debts of the estate that he had paid, including funeral expenses, as well as the disbursements made by him in carrying on the business, and to be charged with all the receipts from the business, including the value of the copartnership property at the present time. All renewals of leases of the hotel made since the death of the plaintiff’s testator are to be considered as belonging to the copartnership. See Mitchell v. Reed, 61 N. Y. 123 .

The answer sets up as a defense that there is a defect of parties defendant, in that the widow is not joined as a party to this action ; and this presents a more serious question, especially in view of the allegations of the answer and complaint, whereby it appears that this defendant paid to the widow $6,500 for an assignment by her, presuming to act as administratrix, of the share of the plaintiff’s testator in the copartnership. I think, however, that that defense fails, because whatever defect of parties there was appeared on the face of the complaint, and the defendant should have taken that objection by demurrer (see Code, § 498), and by § 499, where the objection appears on the face of the complaint, and is not taken by demurrer, it is waived. The defendant, however, alleges, as an equitable defense, that he is entitled to be credited in the accounting with the amount that he paid to the infant, which has been received and retained by her. Under the statute of distribution the widow would be entitled to a third of

The plaintiff also applies for the appointment of a receiver of the copartnership property. I am somewhat reluctant to appoint such receiver at the present time, as it would entail large expenses upon the parties, and would seem to me to be' unnecessary until after the accounting. I am disposed, therefore, to deny the application for a receiver in the interlocutory judgment; the judgment to contain, however, a provision enjoining the defendant from disposing of any of the copartnership property, except in the usual and ordinary course of carrying on the business of closing up the copartnership. The order directing the widow to be made a party defendant to this action is to be settled on notice; further proceedings in the action, including the entry of the interlocutory judgment, to be stayed until such order has been complied with.

Several questions as to the admissibility of the testimony taken under the commission were reserved. Objections to the following interrogatories to John J. Stewart are overruled : Second interrogatory ; fourth interrogatory. The last clause of the answer to the fourth interrogatory is stricken out, viz., “ Mr. Nobel objected to the employment of any other lawyer than Mr. Glass.” Fifth interrogatory: The motion to strike, out the answer to the interrogatory is denied. Sixth interrogatory: Except that clause in the answer of the sixth interrogatory, “It was the first time we had ever seen Mr. Glass,” is stricken out. The objections to the following interrogatories are sustained, and the answers stricken out: Third, seventh and eighth. The objections to the ninth and last interrogatories are overruled.

Objections as to the interrogatories to be administered to Annie L. Stewart: The objection to the third interrogatory is sustained, and the answer stricken out. The objection to the fourth interrogatory is overruled, and the words, “ They agreed upon Glass, I think,” in the answer to that interrogatory, stricken out. The ob