Richardson v. Root

Smith, J. : The intestate, in his life-time, hold a claim against F. G. &r. L. N. Van Vliet, of New York city, for the sum of $1,014. On: the day before he died he delivered to his. wife, Annie Wightman, an order or draft upon the Van Vliets, of which the following is a copy : “ Mohawk, April 29, 1873. “ Please pay to my wife, Mrs. Annie Wightman, the balances due me for malting, up to the close of this season, after .deducting' all expenses which you may incur in shipping the malt; and please pay it in installments, if she wishes it, always saving yourself whole for said expense, and charge the same to account for-malting'. “ Yours, etc., “ J. N. WIGHTMAN. “ To F. G. & L. N. Van Vliet, “No. 5 Water street, New York City.” The paper was delivered to Mrs. Wightman about one o’clock in the afternoon of the day on which it was drawn, and soon after-wards was sent to the drawees by mail. After the death of the intestate, Mrs. Wightman received from the Van Vliets $1,014 on account of the claim, $1,000 of which she placed with Mr. Richardson, her co-administrator, and she retained the remainder in her own hands. The personal estate ivas insufficient to pay the debts of the intestate. The intestate left a considerable real estate, parcels of which were mortgaged, and the testimony before the surrogate was conflicting as to the value of the real estate. One of the questions, litigated was whether the estate was insolvent. Letters of administration were issued to Mrs. Wightman and [475] Mr. Richardson, and upon their final accounting they did not include the money received by Mrs. Wightman from the Van Vliets, but Mrs. Wightman claimed it as her own. The respondents, two of the creditors of the intestate, • claimed that tha account should be surcharged with the amount so received, and. interest thereon from the time it was so received, and the surrogate allowed the claim and surcharged the account accordingly.. From that portion of the decree this appeal is taken. Objection was made before the surrogate,' and is now urged,, that he had not jurisdiction to try the claim thus set up by the-, creditors. We think there is force in the objection. No question is or can be made by the creditors, but that' the draft or order was valid as between Wightman and his wife, and operated as an equitable assignment to her of the claim against the drawees. The only parties who could object that the instrument did net amount to an assignment of the claim were the drawees, and they having recognized its validity by paying it to Mrs. Wight-man, the question is foreclosed. The only ground on which the. respondents can attack the transfer is that although it ivas valid, as between the parties to the paper, it was fraudulent and void as. against the creditors of Wightman. Has the surrogate jurisdiction to try that question ? As between Mrs. Wightman and the? next of kin, the money is clearly hers. It would be so, as. between her and Wightman, if he were living. And if Wight-man were living, the only remedy of the creditors would be by an action against him and his wife to impeach the transfer as. fraudulent and to reach the fund. We are not aware of any authority for saying that the surrogate has jurisdiction to try such an issue. The cases, cited by the respondent’s counsel fail far short of it, In Merchant v. Merchant (2 Bradf., 447), the-question was whether an alleged gift to the executor by the testator had been revoked by him, so that the litigation was directly between the executor and the estate. There are numerous cases, in which it has been held that the surrogate has jurisdiction to-try claims of an executor or administrator against the estate. Such are the recent cases of Kyle v. Kyle (67 N. Y., 408) ; Shakespeare v. Markham (72 id., 400); and Boughton v. Flint (74 id., 476). They hold that the power is given by section 33 [476] (2 R. S., 88), which abrogated the common law rule giving an .administrator’s debt preference over others, and allowing him to retain assets in payment, and provided that no part of the assets ;shall be retained by an executor or administrator in satisfaction of his own claim until it shall have been proved to and allowed by the surrogate. But here no claim is made by the administrator^ ;against the estate, and they do not seek to retain any of the .assets which were left by the intestate at the time of his death. The issue presented results from an effort of some of the creditors to overhaul a transfer made by the intestate during his life-dime to his wife, who happens to be the administratrix. It is said by the respondent’s counsel, that the transfer was a mere gift, causa mortis. But there was uncontradicted evidence tending to show that the intestate was indebted to his wife in the .amount of the claim transferred, for services rendered by her before their marriage ; and there was no evidence that the transfer was made in expectation of death, except so far as the fact might be inferred from the circumstance that the intestate had then been sick nearly a year, and that he died the next day. So far.as the question of jurisdiction is concerned, it is difficult to •see of what consequence it is whether the transfer was a gift, or a sale for a good and sufficient consideration; and- if a gift, whether it was or was not made in expectation of death, it not having been revoked. In either case, it would be competent for ■creditors to attack the transfer on the ground of fraud, and if the surrogate has jurisdiction to try that issue it would seem that the jurisdiction must extend to every like issue however large the amount of the consideration, or however considerable the length •of time intervening between the date of the transfer and the ■death of the intestate. It has been frequently held, also, that the surrogate has jurisdiction upon the accounting of an executor or administrator, to try all claims against him in favor of the estate. (Gardner v. Gardner, 7 Paige, 112 ; Jumel v. Jumel, id., 591 ; Westfall v. Westfall, 16 Hun, 541.) But our attention has not been called to a reported case holding that the surrogate may try an issue as to the good faith of a transfer made by the deceased to the person who subsequently became the administrator of his estate, which. [477] transfer was confessedly valid between the parties, and good and effectual as against the heirs and next of kin. Nor are we aware of any statute giving such jurisdiction to the surrogate. "We. think that the issue as to the good faith of the transfer can only be tried in an action brought in a court of competent jurisdiction. The portion of the decree appealed from is reversed, with costs, of the appeal to the appellants. Talcott, P. J., and Hardin, J., concurred. That portion of the decree of the surrogate of Herkimer county which is appealed from reversed, and proceedings remitted, to said surrogate, with directions to amend his decree accordingly, with costs of the appeal to be paid by the respondents.