In re the Judicial Settlement of the Accounts of Doig

Houghton, J. : The appellant presented a claim against the estate of Robert McCafferty, deceased, and when the respondent administrators presented their accounts to the surrogate for judicial settlement they set forth that the claim had been rejected in writing, and that more than six months had expired without reference or action, and hence that it was barred by the short Statute of Limitations as provided by section 1822 of the Code of Civil Procedure. Citation was issued to appellant, who appeared, and he claims that it was understood between himself and the attorneys for the administrators that the question as to whether his claim had been legally rejected should be determined in an action then pending against him brought by the administrators, in which he had set up the claim in dispute as a counterclaim, and to which the plaintiffs had replied setting up rejection and the running of the short Statute of Limitations. Thereupon the appellant abandoned, as he asserts, the surrogate’s proceeding, supposing that all matters would be determined in the action pending against him. The respondents insist that no such understanding was had, and they caused to be inserted in the decree judicially settling their accounts an adjudication that appellant’s claim had been rejected and was barred by the Statute of Limitations. Thereupon appellant moved to open the decree of the surrogate for the purpose of eliminating such adjudication, and his motion being denied he now appeals. The right of the surrogate to make an adjudication that a claim has been rejected by executors or administrators and is barred by the short Statute of Limitations from lapse of time, is challenged by the appellant. If the surrogate had no jurisdiction he is not harmed. Whatever doubt, however, there may have been with respect to the jurisdiction of the Surrogate’s Court to determine whether a claim has been conclusively allowed so that payment must be ordered, or whether it has been rejected and is barred by the Statute of Limitations, is set at rest by the decision in Matter of Miles (170 N. Y. 75) expressly holding that it has such jurisdiction. The Surrogate’s Court having jurisdiction to determine the ques [748] tion, its decree adjudging that the claim was rejected and is barred is conclusive upon the appellant and he is aggrieved if such adjudication was improperly made. It is suggested that the Surrogate’s Court had no power to open the decree, and that even if it had this court cannot disturb the discretion which it exercised in refusing so to do. If a party brought into Surrogate’s Court by citation, through mistake or inadvertence or from any excusable cause, fails to appear and a decree is entered against him, we think that court has the power to open the decree and let him be heard. Some expressions are found in the opinions in Matter of Tilden (98 N. Y. 434) and Matter of Hawley (100 id. 206) seeming to limit the power of the Surrogate’s Court in this respect; but in Matter of Henderson (157 id. 423) these decisions are commented upon and a much broader view taken of the inherent powers of so important tribunals as are the various Surrogates’ Courts of the State. As early as Pew v. Hastings (1 Barb. Ch. 452) it was distinctly held that a surrogate had the power to open a decree taken by default in consequence of a mistake or an accident, on the principle that such power is absolutely essential to the due administration of justice, and it is upon this principle that Matter of Henderson (supra) was decided. To the same effect is Matter of Flynn (136 N. Y. 287) and Matter of Traver (9 Misc. Rep. 621). By section 2570 of the Code of Civil Procedure it is provided that an appeal may be taken to the Appellate Division from a decree of a Surrogate’s Court or from an order affecting a substantial right, made by a surrogate or by a Surrogate’s Court in a special proceeding. In Matter of Selleck (111 N. Y. 284), notwithstanding the equivocal language of certain sections of the Code, it was determined that the former General Term had the right in certain cases to review discretionary orders made by a surrogate or a Surrogate’s Court. To like effect is Matter of Adler (60 Ilun, 481), and this court has been called upon and has passed upon the propriety of many discretionary allowances of costs in the Surrogate’s Court. In our opinion this court has the power to review a discretionary order of the surrogate or the Surrogate’s Court and determine whether or not there has been an abuse of discretion so as to work [749] substantial injury to the party claiming to be aggrieved. If it is true that there has been no legal rejection of appellant’s claim so that the short Statute of Limitations could rhn against it, he is very seriously aggrieved by the adjudication in the decree which he sought to open. If, also, he was led to believe, or had any substantial grounds for the mistaken belief, that the question of such rejection would be and was to be determined in the action pending, and for that reason paid no further attention to the proceedings in the Surrogate’s Court and permitted a decree to go against him by default, he should have an opportunity to try out the question in some proper tribunal. This opportunity can be granted him by opening the decree and eliminating therefrom the adjudications respecting the rejection of the claim so that there will be no binding judgment against him on that question, or by opening the decree and permitting him to contest the matter in the Surrogate’s Court. While much can be said with respect to appellant’s lack of diligence in failing to inform himself as to how the decree was to be entered after a copy of the proposed decree had been served upon him, still on all the facts we are of the opinion that justice would be best subserved by permitting an opening of the decree and a trial of the question of rejection upon the merits in one tribunal or the other. There is no occasion for opening the entire decree, except in so far as it shall be necessary to preserve funds for the payment of appellant’s claim if he shall succeed in establishing any. The order should be reversed and the matter remitted to the Surrogate’s Court, with direction to open the decree and to proceed thereon as the parties may be advised, with ten dollars costs and disbursements to appellant payable out of the estate. Ingraham, Laughlin, Clarke and Scott, J.J., concurred. Order reversed, with ten dollars costs and disbursements, and matter remitted to Surrogate’s Court as directed in opinion. Settle order on notice.