Shaffer v. Bacon

35 A.D. 248
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 1, 1898
StatusPublished
Cited by14 cases

This text of 35 A.D. 248 (Shaffer v. Bacon) 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
Shaffer v. Bacon, 35 A.D. 248 (N.Y. Ct. App. 1898).

Opinion

Adams, J.:

The plaintiff, as administrator de bonis non of George A. Bartholick, deceased, brings this action to recover of the defendants, [249]*249who were partners in the practice of law at the city of Rochester, certain sums of money paid to them by one Charles Flaherty, as executor of the last will and testament of Bartholiek, in compensation for professional services rendered to Flaherty as executor, in a protracted litigation over the probate of the will under which he assumed to act.

There is but little, if any, controversy respecting the essential facts of the case, which may be thus briefly epitomized :

The decedent, who was a resident of the city of Rochester, departed this life in July, 1888, leaving an instrument which purported to he his last will and testament. In this instrument Flaherty was named as the sole executor thereof, and by its terms he was entitled to receive a legacy of $15,000.

Flaherty subsequently offered the alleged will for probate, and although vigorously contested by one of the decedent’s heirs at law, it was duly admitted by the surrogate of Honroe county. Letters testamentary were thereupon issued to Flaherty, who took possession of the personal assets of the estate, which were of the value of about $30,000. An appeal was then taken to the late. General Term, where the decree of the surrogate was reversed, and issues were framed for a trial by jury of certain questions of fact. Upon the trial of these issues the jury, by their verdict, found that the decedent was not, at the time of the execution of the alleged will, possessed of testamentary capacity, and that its execution was procured by fraud and undue influence. The case then went back to the Surrogate’s Court, where, on the 6tli day of June, 1892, a decree was entered adjudging the alleged will void and revoking the former probate thereof. From this decree Flaherty appealed to the General Term and then to the Court of Appeals, but in neither instance was he successful in his effort to reverse the decree of the surrogate. (Matter of Bartholick, 141 N. Y. 166.)

Before the alleged will was offered for probate the defendants were retained by Flaherty, and in pursuance of such retainer they acted as his legal advisers and counsel until the second appeal to the General Term was perfected. From time to time during this period Flaherty paid to his counsel various sums of money which had come into his hands as executor; but the moneys thus paid amounted in [250]*250the aggregate to no more than a reasonable and adequate compensation for the services which the defendants had rendered.

Subsequently, the plaintiff was duly appointed administrator de bonis non, and he thereupon brought this action.

Upon the foregoing state of facts this court is called upon to determine whether or not the plaintiff’s action can be maintained, or, in other words, whether the defendants can be compelled to pay over to the plaintiff the moneys which they have actually earned and which they have received in the utmost good faith for valuable services rendered by them in behalf of an estate at the instance of one who, at the time of the rendition of the greater part of those services, was both de jure and de facto the personal representative of that estate.

The theory upon which this action is sought to be maintained, if we correctly apprehend the position of the learned counsel for the plaintiff, is that inasmuch as the defendants have received moneys which they knew belonged to the Bartholick estate, in settlement of an account for the payment of which the representative of that estate was primarily personally liable, they have thereby not only profited by a devastavit of the estate, but they have actually participated in the misappropriation of trust funds.

If this view of the case finds warrant in the facts above stated, it is not to be denied that there is great force in the contention that the defendants should be required to restore to the estate the moneys thus obtained; for it is a rule too well settled to admit of discussion, that one who holds money as agent, trustee, executor, administrator, guardian or partner, has no authority or right to use the same in payment of his individual debt, and that if he does thus use it, the party who receives it with knowledge of the facts, does so at his peril. (National Bank v. Ins. Co., 104 U. S. 54; Gerard v. McCormick, 130 N. Y. 261; Marshall v. de Cordova, 26 App. Div. 615.)

But, unfortunately for the plaintiff, this contention rests upon a rule which, in our opinion, has no application to the facts of this particular case, and, therefore, for reasons which we shall proceed to state, it must be regarded as untenable.

This action is one which under ancient nomenclature would have been designated “ m debitatis assumpsit,” or an action for money [251]*251had and received to the use of the plaintiff; and although such an action is, strictly speaking, legal in its nature, it is one wherein the plaintiff may not recover until he establishes a right founded upon equity and justice; and it is likewise one in which the same principle operates in favor of a defendant who is in this manner called upon for the payment of money. (Eddy v. Smith, 13 Wend. 488 Cope v. Wheeler, 41 N. Y. 303; Rothschild v. Mack, 115 id. 1.)

Now, it is undoubtedly true, as claimed by the plaintiff’s counsel,, that primarily an executor personally, and not an estate, is liable for all contracts made by him in the course of the execution of his trust, even though they be made in the interest of the estate which he represents. (Ferrin v. Myrick, 41 N. Y. 315; Austin v. Munro, 47 id. 360.) And in one instance, at least, this rule has been extended so far as to hold that it was not within the power of an. executor or administrator to bind an estate to pay counsel whom he had employed to assist him in preparing and settling his accounts. (Willcox v. Smith, 26 Barb. 316.)

The peculiar circumstances, however, which appear to have influenced the court in reaching the conclusion it did in the case last cited, need not be adverted to with particularity, inasmuch as th& ■ court was particular to say that the principle upon which it was. decided in no wise conflicts with the statutory rule which authorizes, an allowance to executors and administrators for such actual and necessary expenses as are justly and reasonably incurred by them in the-, management of estates committed to their care.

But while theoretically the estates of deceased persons are administered upon the principle asserted in many cases of which those above cited are types, that the executor or administrator shall personally advance the necessary expense of administration in reliance upon the final decree of the surrogate for reimbursement, yet it is well known that no administrator or executor does in fact thus execute his trust. On the contrary, he pays all necessary expenses of administration out of the trust funds, if he happens to have sufficient on hand for that purpose, with the understanding that if for any reason, upon the final settlement of his accounts, any item of expenditure thus made shall be disallowed by the .surrogate, he will be required to reimburse the estate therefor.

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Bluebook (online)
35 A.D. 248, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shaffer-v-bacon-nyappdiv-1898.