In re Judicial Settlement of Accounts of Hawley

• Decision Date: 01 February 1887
• Citation: 10 N.E. 352,104 N.Y. 250
• Parties: In re Judicial Settlement of Accounts of HAWLEY, Testamentary Guardian, etc.
• Court: New York Court of Appeals Court of Appeals

104 N.Y. 250

10 N.E. 352

In re Judicial Settlement of Accounts of HAWLEY, Testamentary Guardian, etc. ¹

Court of Appeals of New York.

February 1, 1887.

Charles E. Tracy, for appellant.

James C. Carter, for respondent.

RAPALLO, J.

Isaac M. Singer died July 23, 1875, leaving a will dated July 16, 1870, whereby, after making certain legacies, he divided all his residuary estate, real and personal, into 60 equal parts, and devised and bequeathed 6 of said parts, being one-tenth of his estate, to his son Adam Mortimer Singer, for his sole and separate use and benefit. Adam Mortimer Singer was, at the date of the decease of the testator, an infant of the age of about 12 years. The testator directed that should he continue to hold, at the time of his decease, the stock of the Singer Manufacturing Company, such stock should, in no event, be sold, but should be divided by his executors as near as might be in the proportions indicated in the will. He appointed David Hawley and Charles M. Kellar executors, and appointed his executors guardians and trustees of the estates of such of his legatees as should be under the age of 21 years at the time of his decease, to continue such guardians and trustees until said legatees should respectively arrive at that age. The will, however, contained no trust, but all the property devised and bequeathed was given directly to the legatees named.

The will was admitted to probate by the surrogate of Westchester county on the tenth of January, 1876. The principal item of the property left by the testator was 41,800 shares of the capital stock of the Singer Manufacturing Company, the value of which was appraised at $175 per share, amounting in the whole to $7,315,000, of which the share of Adam M. Singer was $731,500. David Hawley qualified as executor, and as such rendered his account to the surrogate of Westchester county on the twelfth of January, 1877, and petitioned for a final settlement of his account as executor. Citations were duly issued, and a decree was made by the surrogate on the thirty-first of October, 1877, finally setting such account. The executor was charged with $9,651,521.85 of assets, including the 41,800 shares of the stock of the Singer Manufacturing Company, amounting to $7,315,000. He was credited with $1,546,636.54 for expenses and payments, leaving in his hands the sum of $8,104,885.31. Out of this balance he was allowed $96,225 for commissions for receiving and paying out the whole principal. The several distributive shares of the legatees were ascertained, and he was directed to retain and hold in his hands, as testamentary guardian and trustee of Adam M. Singer, and to be accounted for by him as such testamentary guardian and trustee, his share of the cash assets remaining in his hands, and also one-tenth of the stock of the Singer Manufacturing Company left by the testator, until said Adam M. Singer should become of age.

In December, 1878, said Hawley presented to the surrogate of Westchester county his account as testamentary guardian and trustee of Adam M. Singer, in which he charged himself with the stock and money found to be in his hands by the decree entered by the surrogate on his account as executor, and also all the dividends and interest subsequently received; and he applied to said surrogate for a final settlement of such account. A citation was issued to Adam M. Singer, who was then still an infant, and residing in Europe, and a special guardian was appointed for him, for the purpose of taking care of his interest in that proceeding. A decree was afterwards entered by the surrogate on the thirtieth of December, 1878, purporting to finally settle and allow said account; and the guardian was by said decree again allowed full commissions for receiving and paying out the whole principal received by him for said infant, which was found to be $1,040,600, the commissions amounting to $10,581. The decree purported to finally discharge said Hawley from all accountability, except for the 41,800 shares of stock and the United States bonds then held by him. In December, 1880, the said Adam M. Singer being still an infant, said Hawley applied again to the surrogate for a judicial settlement of his accounts, as testamentary guardian and trustee, from the date of the last accounting, and the passing of the same by the surrogate, in December, 1878. He presented his account, which commenced by charging himself with the balance due from him December 30, 1878, being $1,211,344.44. This account did not, on its face, disclose the fact that he had already received commissions, first as executor, and again as testamentary guardian, on the principal of his ward's estate. A guardian ad litem was appointed for him by the surrogate on this last accounting, and it is stated in one of the affidavits of Mr. Hawley that the guardian who represented him on the second accounting was a different person from the one who represented him on the former accounting. On this last accounting a decree was made, on the tenth of January, 1881, judicially settling his accounts up to that time. By this decree Mr. Hawley was again allowed full commissions for receiving and paying out the whole principal of his ward's estate, including the stock of the Singer Manufacturing Company, which commissions amounted to the sum of $12,288.

Adam M. Smger having become of age on the twenty-fifth of July, 1884, Mr. Hawley, in October of that year, presented a petition to the surrogate for a judicial settlement of his accounts as testamentary guardian and trustee, and asked to be discharged from all liability as such. On the hearing of this petition, Mr. Singer appeared by counsel, and objections were filed to the accounts rendered by Mr. Hawley. The account, as in the last proceeding, began by charging Mr. Hawley with the balance found in his hands by the decree of January 10, 1881; and it was objected on the part of Mr. Singer that the balance was less than was properly chargeable by Mr. Hawley; that he had, without warrant of law, retained commissions upon the 41,800 shares of the Singer Manufacturing Company's stock; that he had also retamed commissions upon the principal for which he had accounted on the accounting of December 30, 1878, and likewise upon the principal for which he had accounted on the tenth of January, 1881; and that the balances had been improperly brought down by reason of such acts.

On the hearing of these objections before the surrogate, the decrees upon the former accountings were relied upon by Mr. Hawley as conclusive on the question of his right to the commissions charged therein; and thereupon an amendment of the objections was asked for and granted, by which amendment the contestant claimed that the cash balance brought down was produced by means of deductions from moneys belonging to the estate, for commissions allowed to the guardian and trustee by the court on the two former accountings, and that said two decrees were without the jurisdiction of the surrogate to grant, so far as the matter of commissions was concerned, and were obtained by misrepresentations on the part of said guardian and trustee, and those representing him, and that the matter of the commissions, as allowed by said decrees, was never, in fact, judicially investigated or determined by the surrogate. Under these objections, the contestant asked Mr. Hawley whether he did not draught the decree; whether there was any contest by the special guardian on the first accounting in respect to the amount of commissions; whether there was, in fact, any argument or taking of evidence in regard to that matter. The same question was asked in regard to the second accounting, and whether the fact was made known to the surrogate upon the second accounting, when the matter of the computation of commissions was on hand, that Mr. Hawley had already received full commissions upon the same principal fund for which he at that time asked for another allowance of full commissions. These questions were severally objected to on the part of Mr. Hawley, on the ground that they were immaterial, irrelevant, and incompetent, and all the objections were sustained, and exception taken. The decrees of December 30th and January 10th being offered in evidence, Mr. Hawley was further asked whether, on either one of the occasions when the decrees were entered, any statement or representation was made to the court in regard to the contents of the will of the testator respecting the shares of stock of the Singer Manufacturing Company. This question was objected to and excluded. The surrogate then proceeded to finally settle the accounts of the guardian, taking as the basis of the accounting the balance found due upon the settlement of January 10, 1881. He allowed to the guardian no commissions on the principal of the estate, but only on such increase as had come into his hands subsequent to the last accounting of January 10, 1881, which commissions amounted to about $3,000; and he delivered an opinion, reported in 3 Dem. 591, in which he conclusively showed that Mr. Hawley was not entitled to charge, as guardian or trustee, commission on the principal of his ward's estate more than once,-a proposiotion too plain for discussion.

The surrogate, in excluding the testimony offered by the contestant for the purpose of impeaching the former decrees, expressed the opinion that it was an endeavor to do indirectly what the contestant had attempted to do directly; referring to an application which the contestant had made to open the decrees of December 30, 1878, and January 10, 1881, which he had denied on the ground of want of power, and which was afterwards passed upon by this court under the following circumstances: While the accounting of 1884 was in progress, the contestant presented a petition to the surrogate praying that the decrees of December 30, 1878, and January 10, 1881, might be set aside. That petition set forth...