Johnson v. Kellog — 8 N.Y. St. Rep. 413

Majority

p. 413

Ebenezer Platt Johnson as Executor, etc., of Ann M. Brooks, Deceased, Resp’t, v. Melville A. Kellog, Adm’r, with Will Annexed, etc., of George Brooks, Deceased, App’lt.

(Supreme Court, General Term, First Department,

Filed March 31, 1887.)

Headnote

1. Executors and administrators—No power to borrow money to carry on business.

In an action to recover a sum of money advanced to the executors of George Brooks for the purpose of being used in the business of G. Brooks & Co, which had been continued by the two surviving partners. Held, that it was not competent for executors or administrators to make an original contract of the kind mentioned which would bind the estate of a decedent, even though made in the interest and for the benefit of the estate they represented.

:2. Same—Advances to pay ope debts can be recovered.

Held, that so much of the original fund as was used by the executors of George Brooks to pay off and discharge the indebtedness of the estate could be recovered.

Appeal from a judgment for $2,025.76 in favor of the plaintiff entered upon an order confirming the report of a referee to whom the matter in controversy had been referred under the statute. The original plaintiff was Ann M. Brooks, the widow of George Brooks, deceased, who brought this action against the defendants as administrators with the will annexed of the said George Brooks. The amount claimed was $10,000 (less a payment of $1,150), loaned by said Ann M. Brooks in August, 1876, to Anthony Halsey ;and Henry J. Brooks, now deceased, who were then executors of the said George Brooks’ will, and by them placed to the credit of George Brooks’ estate in the co-partnership of a firm known as G. Brooks & Co., of which firm George Brooks had been a member in his lifetime.

The evidence established the fact that the whole sum of $10,000 was advanced by the plaintiff’s testatrix to the executors of George Brooks for the purpose of being used in the busines of G. Brooks & Co., which had been continued by the two surviving partners from June, 1876, when George Brooks died, until the 1st day of February, 1880.

Samuel L. Gross, for app’lt; E. P. Johnson and William Pierrepont Williams, for resp’t.

The contract which the executors of George Brooks made with the plaintiff’s testatrix bound

p. 414

themselves personally only, and did not bind the estate of which they were the personal representatives. It is not competent for executors or administrators to make an original contract of the kind mentioned which shall bind the estate of the decedent, even though made in the interest and for the benefit of the estate which they represent. Austin v. Munro, 47 N. Y., 360 . In accordance with this well established rule, the learned referee has denied to the plaintiff a recovery for the $10,000 as a whole, so loaned by the testatrix to the executors of George Brooks. But the sum of $2,025.76 rests for its support upon the claim, which is borne out by the evidence, that so much of the original fund was used .by the executors of George Brooks to pay off and discharge the indebtedness. of the estate.. These moneys having been parted with in good faith by the lender, and expended in good, faith by the executors of George Brooks, should be allowed as advances made by them, as the estate of the deceased has by so much been benefited thereby. Had the executors advanced such moneys personally, they would be allowed to recoup therefor in their accounts with the 'decedent’s estate. Livingston v. Newkirk, 3 Johns. Ch., 312 ; Freeman v. Freeman, 2 Redf., 137.

It is insisted, however, by the learned counsel for the defendant that the sum of $1,150, which was repaid by the executors of George Brooks to the plaintiff’s testatrix, and which forms no part of the $2,025.76 mentioned above, should be deducted from the recovery. We do see how this can properly be done, for it does not appear that this sum was paid out of the property of the estate of George Brooks.

It is further urged that the cause of action arose more than seven and one-half years prior' to the beginning of . the suit, and is consequently barred by the statute of limitations.

This argument does not give proper weight to the payment of the $1,150 already mentioned, which by the fourteenth finding of the referee was made in July, 1881. This payment is not to be applied upon the claim which the referee has allowed to the plaintiff, but upon the whole sum loaned.

The whole transaction proceeded upon an erroneous conception of the rights, powers and duties of personal representatives of decedent’s estates; yet the claim of the plaintiff and of his testatrix has been consistent throughout that a recovery should be had for the whole $10,000. So far as the cause of action is concerned, the claim and the recovery are not separable.

There is a slight discrepancy in the date of the receipt

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given by the executors to Ann M. Brooks, and the time of the receipt by her of the insurance moneys out of which, it is stated, the loan was made to the executors of George Brooks. That any suspicion should be thrown upon the claim made by the plaintiff by reason of this variance does not by any means follow, for it might well be that, as is claimed by the counsel foi the plaintiff, the arrangement between Ann M. Brooks and the executors was made at the time of the advancement of the moneys by the executors, one-half in the month of August, as is stated in the receipt, and that the sums in that paper recited as having been received were advanced by the executors, but under an agreement with Ann M. Brooks that she should reimburse them as soon as her insurance moneys were received, which seems to have done accordingly.

This circumstance does not vary the legal rights of the parties in any respect.

The judgment should be affirmed, with costs.

Bartlett, J., concurs.