In re the Judicial Settlement of the Accounts of Timerson

3 Mills Surr. 405, 39 Misc. 675, 80 N.Y.S. 639

Opinion

Woodin, S.

The above-entitled proceeding was instituted by Frank A. Timerson and Genie Timerson for a judicial settlement of their accounts as administrators, etc., of Charles W. Timerson, deceased. An answer containing objections to the account was filed by Charles A. and Ned Timerson.

The above-named deceased died intestate on August 7, 1901, leaving Genie Timerson, his widow, and Frank A. Timerson, William H. Timerson, Marian Murphy, Ned Timerson and Charles A. Timerson, his children, and only heirs-at-law. Letters of administration were issued out of this court to said Genie and Frank A. Timerson on the 15th of August, 1901.

The administrators charged themselves in' their account, as part of the assets of the deceased, with certain promissory notes, in favor of the deceased, made by Charles A. Timerson and Ned Timerson,' respectively, more specifically set forth as follows: One note, dated March 22, 1889, for $145, made by Red Timer-son; one note, dated August 1, 1895, for $124, made by Red Timerson; one note, dated April 20, 1889, for $250, made by 0. A. Timerson; one note, dated September 2, 1889, for $200, made by 0. A. Timerson; one note, dated April 1, 1891, for $150, made by 0. A. Timerson; and the account contains the further statement that these notes should be deducted from the respective shares of said parties in the estate.

The answer alleges that these notes are not valid or subsisting claims against the makers, and that they are not liable for the payment of the same and that all of said notes are barred by the Statute of Limitations; and further, that the deceased did not intend to collect or enforce payment of said notes or any of them, and regarded said notes as having been paid and did not hold them in his possession as evidence of a collectible debt or obligation due to him.

Upon this issue, as raised, proof has been offered by the contestants and other parties to this proceeding.

Taking up, first, the allegation in the answer that the notes are barred by the Statute of Limitations, I believe the rule of law to be well -settled in cases of this kind, that the administrators have a lien and a right of detention upon the distributive shares sufficient to pay the indebtedness, to the estate, and it is the duty of the court to make a decree accordingly. The rule is based upon the theory that the Statute of Limitations does not raise a presumption of payment, but merely creates a bar to the remedy by action. In this proceeding the administrators are not seeking to recover the claims, and as no presumption' of payment arises from the lapse of time, they are assets in the hands of the administrators, for which they must account. It is not a mere question of legal offset, but of equitable lien and right of retainer, and the right depends upon the principle that the distributee is not entitled to his distributive share while he retains in his own hands a part of the fund out of which that and other distributive shares ought to be paid. Rogers v. Murdock, 45 Hun, 30. Taking this view of the matter, that leaves to be decided, as the sole remaining question, the contestants’ allegation that the decedent did not intend to collect or enforce payment of said notes or any of them, and regarded them as having been paid and did not hold them in his possession as evidence of a collectible debt or obligation due him.

To support this contention, the contestants have offered proof tending to show that the deceased had forgiven or condoned the indebtedness. It appears from the proof that the deceased died with these notes in question in his possession, and the administrators found them among his papers. There being no question but what the notes were valid in their inception; in the absence of any proof showing payment or gift of the indebtedness, the administrators would be entitled to the usual presumption which the possession of these evidences of indebtedness would raise,' and could properly ask for a decree directing that these notes be deducted from the distributive shares of the makers. The proof offered by the contestants consists of declarations made by the deceased to certain of his friends and neighbors, and it is to be determined whether these declarations overcome the legal presumption to which the administrators are entitled by virtue of their possession of these uncanceled notes. These declarations must show either payment or a gift. Mr. Bloomingdale, a neighbor and friend of the deceased, testifies that he had a talk with the deceased in the spring of 1901, in which the deceased stated “ that he had settled with his children and that they were square now; that he was going to give that to them; that he was going to call square what Frank, Med and Albert owed him, and was not ever going to ask them for it.” Mr. Bloomingdale states that the deceased did not refer to any notes or give any figures or amounts. Mr. Hereon J. Lewis testifies to a conversation with the deceased in the spring of 1901, in which the deceased stated “that he did not expect to enforce payment of the notes, for the reason that he could not collect them.” In this talk, the deceased said, in answer to Mr. Lewis’ question, why he did not deliver up the notes, that “ it would keep them better natured if I hold them awhile.” Mr. Charles Myers testifies that he had a talk with the deceased, in April or May, 1901, and that the deceased said “ he had given Red four or five hundred dollars, and that he had now got through, and what Red got thereafter he had got to settle for.” Mr. Ryder’s testimony is to the effect that the deceased told him “ he had always helped his boys and that what he had given them was gone; he had given that to them, but that he had got through now.” The deceased made no reference to any particular loan or obligation. This consists of all the evidence, in substance, bearing upon the payment or discharge of these notes. I think the intention of the decéased not to prosecute these claims is fairly inferable from these declarations, and I would be strongly disposed to carry out that intention in ordering distribution, if possible. There is no proof that the notes in question have been paid, and, of course, there must have been a gift by the deceased to the contestants of these notes in order to sustain their position. The courts have defined what elements are necessary to constitute a valid gift. In Beaver v. Beaver, 117 N. Y. 428, the court says: “ The elements necessary to constitute a valid gift are well understood and are not the subject of dispute. There must be on the part of the donor an intent to give, and a delivery of the thing given, to or for the donee, in pursuance of such intent, and on the part of the donee, acceptance. The subject of the gift may be chattels, choses in action, or any form of personal property, and what constitutes a delivery may depend on the nature and situation of the thing given: The delivery may be symbolical or actual, that is, by actually transferring the manual custody of the chattel to the donee, or giving to him the symbol which represents possession. In the case of bonds, notes or choses in action, the delivery of the instrument which represents the debt is a gift of the debt, if that is the intention ; and so, also, where the debt is that of the donee it may be given, as has been held, by the delivery of a receipt 'acknowledging payment. The acceptance, also, may be implied where the gift, otherwise complete, is beneficial to the donee. But delivery by the donor, either actual or constructive, operating to divest the donor of possession of and dominion over the thing, is a constant and essential factor in every transaction which takes effect as a completed gift. Anything short of this strips it of the quality, of completeness which distinguishes an intention to give, which alone amounts to nothing, from the consummated act, which changes the title. The intention to give is often established by most satisfactory evidence, although the gift fails. Instruments may be ever so formally executed by the donor, purporting to transfer title to the donee, or there may be the most explicit declaration of an intention to give, or of an actual present gift, yet, unless there is delivery, .the intention is defeated. Several cases of this kind have been recently considered by this court. Young v. Young, 80 N. Y. 438,” etc.

In the case at bar we have proof of the intentions of the deceased concerning the notes, but that is as far as the proof goes. There is no proof that the deceased ever gave or delivered these notes to the makers, or that he even told them that he had relinquished all right therein. Declarations that he never intended to require payment of the notes are not sufficient to constitute a gift without the delivery of the notes to the makers. To prove a gift the makers are required to show that the gift was complete with nothing left undone, with an actual delivery and acceptance of the notes, so that the donor parts with all right, title and interest therein. There was no delivery in this case-; in fact, according to Mr. Lewis’ testimony, there was a positive intention not to surrender up the notes. Mo presumption in favor of the contestants arises from the fact that the deceased had not at tempted to collect these notes in his lifetime. In fact, it appears in the proof that he stated that he could not collect them.

Leaving out'the question of the 'Statute of Limitations, I do not think there is any doubt but what the deceased could have recovered judgment on the notes if the sole defense consisted of declarations of his intentions as submitted upon this hearing, for, he could have changed his mind as to collecting them at any time, and these declarations would be no defense.

I cannot see that the dealings which the deceased had with his other children or compromises made with them can have any legal bearing upon this case. The question is, did or did not the deceased give these particular notes to the contestants in his lifetime. If he did, then they should be stricken from the account. If he did not, then they must be deducted from the shares of the makers in the estate. Contestants’ counsel urges that the fact that the notes were not delivered has no force, for the reason that the notes were outlawed prior to the death of the deceased, and that the notes were no longer representative of present obligations and had no value, and that the delivery would have been idle ceremony. I cannot agree with this view however. The Statute of Limitations does not extinguish the debt,' but merely bars an action thereon if it is pleaded. The debt remains, and the Statute of Limitations may be removed by payment being made upon the debt, and we have proof in the case (offered by con-, testants) of $50 having been paid to the deceased in February, 1809, by Charles A. Timerson, and this payment, of course, must be deemed to have been paid upon the indebtedness represented by his notes.

In view of the above I think that the contestants have failed to prove either payment or a gift of the notes in question, and a decree may be entered dismissing the objections, and that the account be allowed as filed. Parties may move for further hearing upon notice.

Decreed accordingly.