Sheerin v. Public Administrator

Tbce Surrogate. I am satisfied that the referee erred in finding that the general reputation of the Third Avenue Savings Bank, for solvency, was bad at the times mentioned. The testimony given upon that subject seems to fall very far short of establishing a general reputation, which would raise a presumption of a knowledge of its unsound condition on the part of the Public Administrator. Indeed, on the evidence given before the auditor alone, I should not hesitate to find that the bank was in good repute in respect to its solvency, for it had withstood a very severe ran upon it,— paid the demands, and continued its business; and those witnesses who were sworn, and knew of its reputation, and course of business, had confidence in its entire solvency, up to the time it finally suspended. But the first question for consideration in this matter is, as to the effect of the statute relating to the duty of the Public Administrator and the deposit of moneys by him “ collected and received.” By section 36, of 2 Statutes at Large, 130, it is provided that the Public Administrator shall deposit all moneys by him “ collected and received” within two days after the receipt thereof, in such bank as the common council shall designate, to the joint credit of himself, and the comptroller. It is claimed by the counsel for the objector, and approved by the finding of the referee, that the receipt by the public administrator of the bank book showing the deposit in [425] the Third. Avenue Savings Bank, was money “ collected and received,” within that provision, and that it was his duty to have deposited the same in the Park Bank, which has been duly designated according to the statute, and that for that neglect he is liable to the estate for any loss resulting from non-compliance with that statute. The object of this statute undoubtedly is, to secure the safety of funds belonging to an estate which shall come into the hands of the Public Administrator, so that he may not use them for his own purposes, or deposit them in an unsafe bank, at his own discretion, and I am quite clear in the opinion that the fund deposited in the Third Avenue Savings Bank by the intestate, and evidenced by his bank book, did not, within any legitimate construction of the words, constitute moneys by him “ collected and received.” It had never been in his hands, and his having the means to draw it, cannot be even a constructive collection or receipt. If it were, then on presentation of the bank book, if the bank had declined to pay, and suspended the next day, the Public Administrator would be held to have collected what might in fact be an entirely worthless claim of the estate. I entertain no doubt that the referee has fallen into an error in holding that the Public Administrator was liable for failing to deposit the money which was in the Third Avenue Savings Bank, in the Park Bank, within two days after his receipt of letters ; and that the money was never in the hands of the Public Administrator so that the same could have been deposited. The next question to be considered is, whether the Public Administrator was guilty of neglect under the circumstances of this case, for his failure to draw the from money the Third Avenue Savings Bank before its suspension. An administrator is bound to use such care, and dili [426] gence as a business man would exert in the management of his own property, in order to collect claims-against debtors of the estate (Moor's estate, 1 Tucker, 41). In Thompson v. Brown (4 Johns. Ch., 619) Chancellor • Kent holds that executors and administrators acting in good faith, and without any wilful default or fraud, will not be responsible for the loss which may arise. (See Schultz v. Pulver, 11 Wend., 361; Ruggles v. Sherman 14 Johns., 446.) In discussing the question of a devastavit by an executor, Williams on Executors lays down the rule that an executor is not guilty of a devastavit provided he exercised fair and reasonable discretion on the subject. (See Barn. & Ald., 360; Williams on Executors, 1539.) In Whitney v. Peddicord (63 Ill., 249), Chief Justice Lawrence, in discussing a kindred question, says:“When they have acted with reasonable diligence, and honest desire to-do their duty faithfully, amere error of. judgment, in what was fairly a matter of judgment, or opinion, could not make them liable, merely because subsequent events have shown they did not pursue the wisest course; but on the other hand, they must be held to that degree of diligence which men ordinarily use in. the management of their own affairs, and if through lack of that, the interests of the trust estate are damnified, they must make good the loss.” The case cited by counsel for the oojector, Cornwell v. Deck, 8 Hun, 122, does not militate against the authorities and principles above cited. That was a case where the administratrix had kept money of the estate in a trunk, in a bed room occupied by her son, adjoining the store, for nearly a year from whence it was stolen, and the court held that, had only a portion of the money collected necessary for the use of the business been so kept, and the balance deposited in bank, it would not have rendered the administratrix liable; but in com [427] meniing on the case, Judge Smith cites, with approbation, the case of the Chambersburg Savings Associations Appeal (76 Pa., 203), where it is stated that it is well settled that a trustee shall not be surcharged by a court of equity for a loss which has occurred, in case he has exercised common skill, common prudence, and common caution ; but for supine negligence, and wilful default, he shall be held responsible. It is also urged by the counsel for the objector that the inventory filed by the public administrator, stated the amount of money in said bank to be assets, and in cash, and that he is estopped by his inventory. In this position he is clearly in error, for it often occurs that on a final accounting the inventory may be shown to be incorrect, and so be , corrected in the final decree. (See 2 R. S. 440, §§ 14, 15; Montgomery v. Dunning, 2 Bradf., 220). Having concluded from the evidence that there was no such general reputation of insecurity, on the part of the Third Avenue Savings Bank, as charged the Public Administrator with knowledge of that fact, and as it nowhere appears that he in fact knew of any suspicion in respect to it, and as the investment was made by the intestate, I am unable to find from the evidence that the Public Administrator was guilty of any negligence in permitting the fund to remain on deposit in that bank, for the time stated, or that he failed to take such care of the -fund, as men of ordinary prudence would take of their own affairs. This case is one of considerable interest and importance, not on account of the amount involved, but because it affects the conduct of a every responsible public officer; and for that reason I have felt it my duty to consider the question involved, with considerable care, with a desire, on the one hand, not to relax the rule of responsibility on the part of the Public Administrator, [428] and on the other, npt to impose any such burthens as would either deter a competent and careful person from assuming its responsibilities, or imposing unjust liability upon him in the performance of his trust; and it seems to me that the rule adopted by the auditor in this case, would impose burthens entirely inconsistent with the nature of the office, and the trust reposed in him, and would, carried to its legitimate conclusions, render it impracticable to procure any competent and responsible person to accept the office. In the consideration of this matter, I have weighed the distinction which properly grows out of the English doctrine and practice, denying executors and administrators compensation for their services, and that which prevails in this country, of compensating by commissions for such services, and the different responsibility which attaches by reason of the changed condition of the trust; but on such examination as I have been able to give the facts of this matter, and the authorities bearing upon the subject, I am unable to concur with the auditor in his conclusions. I am of the opinion that in respect to the fund in the Third Avenue Savings Bank, the account should be settled as stated, and that the report of the auditor in that particular should be modified. Decree accordingly.