Croft v. Williams , 30 N.Y. Sup. Ct. 102 ( 1880 )

Learned, P. J.:

The first question relates to the $2,000. The circumstances aré as follows. The testatrix left no personal property of any consequence. She. left a house and lot at Rondout, and a farm' al White Plains, which the executors had a power to sell. She diei in April, 1868. In October, 1869, Williams, one of the executor», applied to Croft, the other, for $2,000. The purpose avowed tjy Williams, was to pay a mortgage on the house and lot, and to pay bills and funeral, expenses.. Thereupon Croft advanced to Wiliams, at that time, $2,000 ; and took Williams’s note therefor’, not signed as executor. Williams, at the time, made up, but did not execute, a paper, reciting that ho had paid out of his own funds this bond and mortgage, and a. note and' debts of the estate, amounting in all to $5,064.46; and containing an assignment' of these .-claims to Croft, as collateral , to the $2,000 -note. For this $2,000 note thus given to Croft, Williams confessed, judgment .to 'Cj’of-t, January, 1873..

Croft now claims to bo allowed for this $2,00.0 and interes thereto. The surrogate disallowed this, and properly. It was on its face a loan to Williams personally. If Williams stated that he was about to pay debts of the estate, and Croft lent him money for that-purpose, we see no reason for charging the estate on account of Williams’s intention, expressed but not performed. If an executor lends money to a co-executor, it is plain that this cannot be made a charge-against the estate, simply because the executor who borrowed it stated, honestly or falsely, his inte'ntion to pay debts of the estate. If Croft had then had money of the estate, this loan of it to. Williams would not have discharged Croft. (Adair v. Brimmer, 74 N. Y., 539.) Croft was bound to see that the money of the estate which came to him, was properly applied. So that, even if lye treat this transaction as an advance to Williams in his capacity as exqcutor, we do not see that Croft stands in any better position. Whatever debts Williams had, in fact, previously paid had been made good to him by money which came into his hands.

Second. The appellant objects that ho is charged with $800 received December 18, I860,, on the sale of the farm. It is ,not disputed that he received this money. His defense is that he paid it to his co-executor, Williams. He produces a receipt from Williams,mot as executor, dated two days afterwards, for the amount. For the reasons above given this does ■ not discharge him. We do ñot think-it necessary to discuss the point. If there may bo, sometimes; peculiar, circumstances under which such a payment to a coexccutor-would discharge an executor, none such exist in this case. The same may bo said as to the item of $G36.12, received by Croft, May TO, 1872.

Third. It is claimed by the respondent that Croft received, and should bo charged - ivitli, $50 paid by John Tlxeill November 23, 18G9, and also with $800 paid by him, as of the date of January 17, 1870. The appellant insists, as a matter of fact that lie did not receive.these.payments; and the surrogate so found. The respondent seeks to review these findings of fact. These sums of money were paid upon a'contract, made by Croft and Williams, as executors,'for. the sale'of. the White, Plains farm. The receipts for said payments are indorsed on the contract, and each is signed by Croft. ...

As to the $50, Theill, the purchaser, testifies that he paid it to Croft. Theill is interested, being the father of the testatrix; Croft at first testified that ho must have received it, as his siguaturo was there ; but that he had no idea he had ever seen it; that is, the money. Afterwards he testified: “Wo all stood by the desk, and Mr. Theill laid down the $50, tand Williams picked it up and put it in his pocket, and I receipted it.” Mr. Laird testifies to substantially the same facts. Mr. Laird is a lawyer, and drew the receipt. lie says that Theill came up and laid the money on the desk; that Williams took it up and put it in his pocket; and then that Croft signed the receipt.

The question of the liability of an executor, in such a case, cannot depend on such a merely formal matter as his actually touching,’-or handling the money. Suppose that Croft had picked up the money, had given a receipt for it, and then had handed it over to his co-executor, thus putting it in his co-executor’s power to waste or misapply it. Under the doctrine above cited, Croft would not have been discharged from the liability.imposed by his receiving the money. It can make no practical difference, both parties being together, that the money was not actually held, for a moment ór two, in Croft’s hands. The money was there, and within his power. By signing the receipt, he acknowledged that he was the executor to whose fidelity it was intrusted. He might have refused to sign the receipt, unless he should have the money. But by' signing the receipt, and consenting to Williams’s taking the money, he did substantially the same act as if a clerk of his had actually taken the money, and Croft had given the receipt.

Judge Story well says that, if two executors sign á receipt, it is prima facie evidence that the money came to the hand's of both; but either of them may show that his joining in the receipt was merely formal. (2 Story Eq., 1283.) But here the. other oxector did not sign; and Croft’s signing could not have been formal merely. Without his signature there would have been no receipt.

We do not mean to controvert the doctrine that a receipt may be explained. The difficulty is that Croft does '-not explain tin's receipt. On the contrary, he shows that, if he did not take manual possession of the money, it was because he voluntarily permitted some one else to take it away. (1 Perry on Trusts, 510.)

We think Croft was chargeable with the $50.

As to the $800 paid in January, 1870, Croft’s receipt is shown. Theill says that he sent the money, and that he was notified by his messenger that Croft would not sign the receipt; that ho went to see Croft the next day, and asked him if he received the money; that Croft equivocated; that he-asked Croft if he would indorse it, and said: “If you do not, I have my remedy;” that Croft then wrote the receipt on the contract and signed it. Croft denies that he received the money, or that he saw any one receive it; says that he does not know who received it; that he objected to signing the receipt, because he had not had the money.. To sustain Croft, it is testified by Laird that he drew up the receipt at the request of Williams. And it is testified, by one familiar with Laird’s handwriting, that the body of the receipt is in his handwriting. These receipts, it is to be noticed, are on that agreement which was held by the purchaser. The duplicate, held by the executors, contains only one receipt, that of the first $50. And Theill reiterates the • statement that Croft wrote and signed the receipt, and admitted that ho had had the money.

There is thus a perplexing conflict of evidence. It is difficult to understand how Williams could 'have brought -to Laird the fur-chaser's duplicate of the agreement. Theill was not present at that time. Williams did not sign the receipt.

If wc leave out the evidence of Theill and of Laird, as contradictory as to who wrote the body of the receipt, and come to the examination of the evidence on the real point, viz., whether Croft had the $800, it stands thus: The next of. kin produce Croft’s receipt for the money, admitted to be genuine ; and there is no doubt that the money was paid to some one. . Croft, on .the other hand, denies that he received it, and does not show that it was received by any one else. Croft has lie ver. kept any account with the estate, and, even since the death of Williams, he has never kept the moneys of the, estate separate. Thus the denial of’ the receipt of the money stands on his uncorroborated testimony, without anything like a voucher or a contemporaneous series of entries to support his denial. The case would be different, if he showed affirmatively that Williams received the money, or if his account as executor, kept at that time, showed that no such money was entered therein. But, as it is, there is nothing to contradict his receipt but his own testimony. We do not think, that his own evidence is enough to discharge him as to this item.

Fourth. The next item which the respondents say should have been charged against Croft is that of $1,167.77, paid in April, 1870, when the deed of the farm was given, and which .was a part of the purchase price. The payment was made by a check of Deuterman, to whom Theill had transferred the contract. The check was to the order of Theill, indorsed by him.

Croft testified that the money was counted out and laid on the table, and Williams took it up. Afterwards he stated that it was a check, draft or money which was paid. Laird testifies that the purchase-money was paid in two cheeks, both handed by Deuterman to Williams, in'Marshall’s office; and that the next morning Williams went over to the Westchester County National Bank, where, it appears, that a check of this amount was cashed on April 20, 1870.

: Mr. Marshall, a lawyer in whose office the business was done, testifies that Deuterman, Laird, Croft, and others were present; that he was acting for Deuterman ; that three checks were, drawn by him, to order of Theill, and were signed by Deuterman and delivered to Theill; that ho does not recollect Williams being there. Dcuterm.an .testifies that he did not hand the checks to Williams. , Theill gays that ho handed the checks to Croft. The.evidence, therefore, does not, we think, charge Croft, on the ground of his receiving the.money. No receipt was given. Whether ho.is liable,.onthe ground of joining in the deed, will bo considered hereafter.

Fifth. It is claimed that Croft- should bo charged with two payments of $1,000 and $1,500, respectively, made on the Ingersoll bond and mortgage. At the time of the conveyance of the farm to Deuterman there was an apparent lion by judgment thereon. For this reason a part of the purchase price, $6,694.6.8, was, by agreement, held by Mr. Frost in trust, until the judgment should cease to be a lien. Afterwards the sum of $5,000, part .of this money, was invested in the Ingersoll bond and mortgage, which was subsequently assigned by Mr. Frost to Croft and Williams, executors. And the question now presented relates to payments made and indorsed on that bond.

The first is that of $1,500, September 27, 1872; the other is that of $1,000, June 20, 1873. Both of these payments are indorsed on the bond; and the receipts therefor are signed by Croft as executor.

Mr; Frost testifies that it is his recollection that, when judgment was about to be taken on a foreclosure of this bond and mortgage, he noticed that the indorsements were not signed; and that he asked Croft to sign them; that this was about May or June, 1875 ; and that Croft did sign them then.

Croft testifies that it is his impression that he signed these receipts all at one time. There are three receipts, one for $036.12, May 10, 1873, which money it is undisputed that Croft received. Croft testified, at first, that he never received any of the money mentioned in the three receipts. Afterwards he testified that he found that the $636.12 had been paid, in his absence, to his bookkeeper, from Ingersoll.

Ingersoll testifies that he made these payments to Williams. He even testifies (as to which he is plainly mistaken), that he paid the $636.12 to Williams. He has no memoranda or receipts.

The respondents urge the following facts. A receipt is produced, dated September 27, 1862, of $1,000, given by Williams to Croft as co-executor of the above estate. It is preceded by a statement of sums, alleged to have been paid by Williams, amounting to $901. The receipt is mutilated. It concludes,- “in consideration upon the future settlement.” They show also a deposit by Croft in his bank account, September 27, 1862, of $500, and they urge that these two sums make up the $1,500, paid that day.

Now, this receipt of Williams, given to Croft as co^exeoutor, with its reference to future settlement, is evidence, of some weight, that Croft had at least $1,000 of the money of the estate from some source. And, as ho kept no separate account, the $500 may well have been the residue of the $1,500. As the receipt is signed by him, his own evidence ought not to be enough to discharge him. True, we have the testimony of Ingersoll. But he is admitted to have been mistaken as to the payment of the $636.12; which Croft acknowledges, on more careful examination, that he received. Why should Ingersoll be more accurate as to the other payments ? And if Williams, in fact, received on September 27, this $1,500, what need was there that Croft, as co-executor, should advance him $1,000 more on the same day ?

It seems altogether incredible that Willliams should have in fact received this $1,500 from Ingersoll, on September 27, and that, besides this sum, Croft, on the same day, as co-executor, should have advanced Williams $1,000, to meet alleged payments by Williams of $901. It is very probable, as Ingersoll says, that Williams was pressing for money. And if Croft received the $1,500, and at once gave $1,000 to Williams, Ingersoll may easily be mistaken as to the actual recipient of the money.

There was some evidence given tending to show that the indorsements were signed at the time of the foreclosure. The counsel who conducted the foreclosure was not certain as to this. And, therefore, we are at liberty to examine the probabilities freely. And we are unable to understand why it was needed, at the time of taking judgment of foreclosure,' or at any other time, that the indorsements of money, paid on the' bond, which had been made without signature, should then be signed. It was not pretended that these «payments had been made to the attorney fpr the executors ; so that be should need vouchers for his own protection.

The payments had been made to one, or the other, of the parties in interest; their own attorney was foreclosing; and no one disputed the fact of payment. The counsel’s recollection was not perfectly certain, as he said, on the matter. If any one had desired to have the indorsements signed, it would seem probable that tbis would be Ingersoll, and not the attorney of tbe owners of the bond and mortgage.

At any rate, it is not very material when the receipts were signed. Whether signed at the time when the money was paid, or afterwards, they are evidence that Croft was the executor who had the money. We can hardly suppose that Mr. Croft’s attorney would have asked him to sign receipts for money which he had not had ; knowing, as a lawyer would know, the risk to which he thus exposed his client, by an act altogether unnecessary. On the whole, we do not think that Croft has satisfactorily done away with the presumption arising from his signature to the receipt for $1,500 ; and that he is chargeable therewith.

Next, in regard to the $1,000, receipted for as of June 20,1813 ; much that has been said above applies to this also. The testimony of Croft and of Ingersoll is substantially the same, as to this item. His cash book shows a deposit June 23,1813, of $1,060.

On June 21, only a few days afterwards, Croft paid to Williams $150, which, as in the former instance, indicates the possession of funds of the estate. The counsel for Croft, in answer to this, say that he had received May 10, 1813, from this Ingersoll bond and mortgage $636.12, the item above spoken of; and that he thus had funds out of which he could advance to Williams the $150.

■ .But the conclusive reply is that Crofts, in his account, credits himself, as of May 10, 1813, with this vqry sum of $636.12, as then paid to Williams, his co-executor. It is true that he did not prove' this payment by any voucher. But his putting it in his account contradicts his claim that it made a part of the subsequent payment of $150. Therefore the $150 musthave come from some other source. From what, if not from the $1,000 ?

For these reasons, more fully stated previously, we think that Croft has not done away with the presumption arising from his signing the receipt for $1,000 ; and that he is chargeable therewith.

Sixth. It is claimed by the respondents’ counsel that, aside from the question of fact, as 'to the receipt of the moneys arising from the sale of the farm, Croft is liable for all the avails thereof, on the ground that he joined in the execution of the power of sale.

We do not think that this position is well taken. It was necessary for all the executors to join in the deed. (1 R. S., m. p. 735, § [112].) On the execution of the deed, one or the other executor must receive the money. And therefore the claim, contended for by the respondents, would make one- executor liable, in spite of himself.. For each ought to join in the execution of the deed, in order to carry out the will of the testatrix; while, as both could not receive the money, one or the other would be liable for money which never had come to his hands.

Even in regard to property which one executor alone may transfer it is often reasonable that the other should join, to show his approval of the act. But it would be most unreasonable that, when none of the avails had come to his hands, he should be chargeable, merely for approving of the transfer.

The testatrix, in this case, placed confidence in each of the executors; and gave to each the power with which the law clothes such persons. It is enough to hold each responsible for the faithful application of such part of the estate as he'actually received, when it was sold under the power. We think' that this Nile is sound, although there have been some deviations from it. (1 Perry on Trusts, § 420 et seq.)

Seventh. The respondents urge again that Croft so negligently managed, and so carelessly permitted his co-cxecutor to waste the estate, that he should on that ground be held liable for all the assets which he might have cared for and preserved. (Clarkv. Clark, 8 Paige, 153 ; Elmendorf v. Lansing, 4 Johns. Ch., 562.) The doctrine on which the respondents rely, is stated in Adair v. Brimmer (74 N. Y., 539, 566). The important question is the application of the doctrine to the facts of the case.

Letters testamentary were issued in May, 3 868. Croft knew, before the death of the testatrix, that Williams, -his co-executor, was pecuniarily involved. Ho says that he did not account him solvent; but declines to fix the time when he thought him insolvent. Ho testifies that Williams received $1,167;77 (the sum above spoken of; with his consent, and in his .presence; and that he then knew him to be entirely irresponsible. He testifies that he knew, within a few months after the ' testatrix’s -death,..that Williams was badly cramped, and had been trying to compromise his debts; and that, in his own business,, he .would not have trusted a man in such condition. lie testifies that Williams crowded him, because ho was hard up and cramped. He heard that the going west of Williams’s father-in-law cost Williams §600, and a piano $600. Again, he testifies that he know that Williams was using the money for himself and his family; that he advised him to invest the money, but did not understand that Williams did so; or that he kept a separate account. He testifies that he made no inquiry as to the debts of the estate; or as to how much of them-Williams paid. That Williams . was sometimes in the. tobacco, and sometimes in the crockery .business, and his crockery store would not have brought $300. .That he was continually wanting money. That he did not think the. $1,167.77 would last. Williams long.

Now, without going over the evidence in any further detail, if is evident that, from the first appointment of the .executors, Croft knew that Williams was an embarrassed and insolvent man. And that, under the knowledge of this. fact, instead of taking car.e of. the avails of the sale of the farm, he allowed them to go into Wil- • liams’s hands, without any good reason to believe that they would be properly applied: It is very plain also that, in fact, the avails which passed into Williams’s hands were not properly applied. • The account of Croft contains items of board and clothing paid for the children. But we do not see that proof is given that Williams, used for their benefit the money which thus came to his hands.

We think, therefore, that such negligence and want of care have been shown, on the part of Croft, that he should be held liable also for the item above-mentioned under the fourth head, of. $1,167.77, in having permitted this money to go into the hands of an insolvent co-executor, when he had reason to believe it would not be properly used.

The decree should be modified accordingly, with costs against - appellant personally.

Present — Learned, P. J., Bookés and Westbrook, JJ.

Decree modified, with costs, against appellant (executor) personally. Order to be settled before Learned, P. J.