In re the Final Accounting in the Estate of Hood

1 Tuck. Surr. 396

• Court: New York Surrogate's Court
• Decided: July 1, 1870
• Status: Published

Opinion

The Surrogate.

It appears, from the auditor’s report, that the . objections filed to the account of the executor were reduced, on the hearing before, him, to three in number, which are the only ones, I am to consider and pass upon, upon these exceptions to his action.

T,he first is as to the, items of interest charged against •himself by the executor, in his final account.. This, calculation of interest has been made by him at the rate of six per cent per .annum, as. he states, “on both sides the account, on the whole amount.” , The calculation shows a balance of interest of $4,412.82, .in favor of the estate; for which sum hé áccordingly credited. the estate, and Charged himself as executor.' ’

This is not the manner in which to Calculate interest, and the auditor has very, correctly disallowed it.. The executor qualified on the 4th September, 1860; ¡and from January, 1861, until July 20th, 1862, ,a.t. various times, he had received assets amounting in the-, aggregate to the si;m' of $19,642.74. He should be charged with, interest at the lawful rate' of seven per cent from the time the amounts, were respectively received until the 28th of March, "1868,’ when his final accounts were filed. . .The decree to be entered in this proceeding will provide for * the interest with which the executor may be charged up, . .to the day of its entry. . '.......

The second question is as to the payments. made, by the executor to or for Mrs. Ann Hewland, the mother of testator. The will bequeathed $2,500, being part of a Certain fund of $10,000; which $2,500 was to be invested,; and the- interest accruing, to be paid to Mrs. Ann Hew-land during her life. It also contains a conditional clause-: “ That my two children shall support and assist,in.all her wants, their grandmother, my mother, during all her lifetime.” The executor claims to hold in trust, the $2,5.00"; and he also charges the estate with the sum of $1,916, paid to Mrs. hfewland.

The executor testifies as follows, as to the payments to Mrs. Hewland: ...... , . . . ..

Q. What rate of interest have you paid to Mrs. Ann Mewl and on the $2,500 trust fund in this estate? A. I have not paid any particular interest, but have paid her expenses.

Q. Up to what time have yon paid Mrs. Mewl and ? A. In the account, up to the 31st December, 1867, and up to the 31st December, 1868, since the filing of the account.

The executor should have invested this sum of $2,500 and paid the interest only. He will be allowed the $2,500, together with interest thereon from the 10th January, 1861, to the 28th March, 1868, amounting to $1,262.92, upon his showing that he has invested the principal sum. In default of this, his payments of $1,976 will be disallowed, and the decree will contain a direction to invest the $2,500.

The third question relates to the purchase of real estate at the town of Flatbush, Mew York, in the name of Maria C. Hood (who is the wife of the executor), with assets in part belonging to the estate.

It appears that, about the 15th day of July, 1862, Mrs. Maria C. Hood became the purchaser of a house and lot in Flatbush, and the consideration paid therefor was the sum of $22,500. The payment was made by assigning a mortgage for $4,000 upon real estate in the State of Ohio, belonging to this estate, and by a transfer of $2,500 of India rubber stock, and by a purchase money mortgage of $5,000, executed on the premises purchased, by Maria C. Hood and her husband, this executor. There were other encumbrances on the land to the amount of $11,000. On the 2d day of May, 1868, since this accounting commenced, Mrs. Hood sold the land she had so purchased for $62,000. It is claimed by the special guardian of the infant legatee, and the administrator of a deceased legatee, that this mortgage of $4,000 was an investment, and to be treated as a cash investment in the land purchased in the name of Mrs. Hood, and that the executor should account for the proportion of the rents of the land purchased, from July 15, 1862, to. Hay 2, 1868. I have considered the facts and weighed the arguments. This mortgage of $4,000 had been received by the testator in part payment of land formerly belonging to him in Ohio, and which he had' conveyed in, his lifetime. The executor did with it what he seems to have done generally with the funds belonging, tq the estate;. mingled it with his own property and dealt, with it as, Ms o.wn. There are cases in which such, conduct h^s. been visited in- Courts of Equity and courts of conscience with, the severe, penalty of a confiscation of all the gains made, in this illegal manner. There is no doubt that it would have, been the duty .of the Surrogate to have held this, executor rigidly accountable - for any" loss, any devastavit of the estate, occurring through such conduct. 'But in this estate there has been no loss to. the. parties, entitled; the assets; are in hand, and- a dis- ' tribution, however tardy, can be made to these cMldren. While,, therefore, I am holding, this, executor strictly to ■ the payment of full interest upon all the assets* I shall not pursue him to- the- extent of also charging against him the . rents; and. profits, of the. realty'tbps purchased by his wife.

There/is one point,, also,upon,which I must overrule :. the. learned, auditor* whose labors in this, matter have i brought order out of chaos;.. The payments made by the ■ ■ exceptor on account of the, minors. Ellen and John,. Jr., > cannot, he allowed., They were net made to, a guardian , of the. minors, and; they cannot, be. charged against- per-8ons"wbo "were incppafile of contracting. ....