In re the Accounting of Siegel

Appellate Division of the Supreme Court of New York

In re the Accounting of Siegel

2 A.D.2d 662, 152 N.Y.S.2d 250, 1956 N.Y. App. Div. LEXIS 5098

CourtAppellate Division of the Supreme Court of the State of New York

DecidedJune 5, 1956

StatusPublished

Cited by1 cases

This text of 2 A.D.2d 662 (In re the Accounting of Siegel) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re the Accounting of Siegel, 2 A.D.2d 662, 152 N.Y.S.2d 250, 1956 N.Y. App. Div. LEXIS 5098 (N.Y. Ct. App. 1956).

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Opinion

On this appeal, the entire controversy revolves around an inter vivos agreement executed by the testator and his brother in 1945. Both owned all the stock of Sherman Brothers, Inc. The contract provided, in part, that the surviving brother would have the right to acquire the other’s stock upon payment to the estate of the deceased brother of a sum to be determined by the net worth of the corporation as calculated by Samuel Siegel, the firm’s accountant, who was also named as executor by this decedent. By the terms of the contract, Siegel’s determination became final and binding. On two prior occasions, the validity and binding effect of this agreement have been upheld (279 App. Div. 981, motion for leave to appeal to the Court of Appeals denied 279 App. Div. 1064, 1065, 304 N. Y. 990). In our view, he accountant’s report of the net worth of the corporation is conclusive except for palpable errors therein. The respondents point to two items wherein they allege such errors were made and which would impose an additional liability upon the objectant Sam Sherman to the extent of $12,956.59. While the named objectant urges that the accountant correctly reflected those items, he is nevertheless willing to pay such sum. The respondents additionally urge that an error was made by the accountant in the use of an incorrect accounting method in his computations. The method he employed had been used in determining the net worth of the corporation for 25 years. We cannot now substitute, as did the learned Surrogate, an accounting theory never before used in this enterprise and not generally applied in the industry of which the corporation is a part. Decree unanimously modified by striking the provision therein ordering the objectant to pay the estate the sum of $39,052.26 with interest thereon and substituting therefor a provision requiring the objectant to pay the estate the sum of $12,956.59, without interest and, as so modified, affirmed. Settle order on notice. Concur — Peck, P. J., Rabin, Cox, Frank and Valente, JJ.

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On this appeal, the entire controversy revolves around an inter vivos agreement executed by the testator and his brother in 1945. Both owned all the stock of Sherman Brothers, Inc. The contract provided, in part, that the surviving brother would have the right to acquire the other’s stock upon payment to the estate of the deceased brother of a sum to be determined by the net worth of the corporation as calculated by Samuel Siegel, the firm’s accountant, who was also named as executor by this decedent. By the terms of the contract, Siegel’s determination became final and binding. On two prior occasions, the validity and binding effect of this agreement have been upheld (279 App. Div. 981, motion for leave to appeal to the Court of Appeals denied 279 App. Div. 1064, 1065, 304 N. Y. 990). In our view, he accountant’s report of the net worth of the corporation is conclusive except for palpable errors therein. The respondents point to two items wherein they allege such errors were made and which would impose an additional liability upon the objectant Sam Sherman to the extent of $12,956.59. While the named objectant urges that the accountant correctly reflected those items, he is nevertheless willing to pay such sum. The respondents additionally urge that an error was made by the accountant in the use of an incorrect accounting method in his computations. The method he employed had been used in determining the net worth of the corporation for 25 years. We cannot now substitute, as did the learned Surrogate, an accounting theory never before used in this enterprise and not generally applied in the industry of which the corporation is a part. Decree unanimously modified by striking the provision therein ordering the objectant to pay the estate the sum of $39,052.26 with interest thereon and substituting therefor a provision requiring the objectant to pay the estate the sum of $12,956.59, without interest and, as so modified, affirmed. Settle order on notice. Concur — Peck, P. J., Rabin, Cox, Frank and Valente, JJ.

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Bluebook (online)

2 A.D.2d 662, 152 N.Y.S.2d 250, 1956 N.Y. App. Div. LEXIS 5098, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-accounting-of-siegel-nyappdiv-1956.

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