O'Brien v. Jackson

• Decision Date: 30 April 1901
• Citation: 167 N.Y. 31,60 N.E. 238
• Parties: O'BRIEN v. JACKSON et al.
• Court: New York Court of Appeals Court of Appeals

167 N.Y. 31

60 N.E. 238

O'BRIEN

v.JACKSON et al.

Court of Appeals of New York.

April 30, 1901.

Appeal from supreme court, appellate division, First department.

Action by Michael J. O'Brien against Henry H. Jackson and others, executors of the will of Peter A. H. Jackson. From a judgment of the appellate division (58 N. Y. Supp. 1044) affirming a judgment in favor of plaintiff, and from an order denying a new trial, defendants appeal. Reversed.

Edward W. S. Johnston, for appellants.

Thomas C. Ennever, for respondent.

CULLEN, J.

This action was brought against the defendants, as executors of and trustees under the will of Peter A. H. Jackson, deceased, to recover a balance due on a contract for repairs made to some buildings of the testator, which were devised to the defendants on certain trusts. The complaint alleged that the defendants were the executors of and trustees under said will, and were authorized to make the agreement sued on. This allegation as to authority was put in issue by the answer. On the trial of the case the defendants moved to dismiss the complaint on the ground that it stated no cause of action against them in their representative capacity. This motion was denied. At the close of the evidence the motion was renewed on the same grounds, and again denied, to which rulings the defendants excepted. The case was then submitted to the jury on the issues relating to the performance of the contract and the plaintiff's claim for extra work. A verdict was rendered for the plaintiff, on which judgment was entered that the plaintiff recover of the defendants, as executors of and trustees under the last will and testament of Peter A. H. Jackson, deceased, a specified sum, and that the plaintiff have execution therefor. The judgment having been affirmed by the appellate division, an appeal has been taken to this court.

We are of opinion that the action in its present form cannot be maintained, and the defendants' motion to dismiss the complaint as not stating a cause of action against them in their representative capacity should have been granted. The general rule is well settled in this state that executors or trustees cannot, by their executory contracts, although made in the interest and for the benefit of the estate they represent, if made upon a new and independent consideration, bind the estate, and thus create a liability not founded upon the contract or obligation of the testator. Ferrin v. Myrick, 41 N. Y. 315;Austin v. Munroe, 47 N. Y. 360;Van Slooten v. Dodge, 145 N. Y. 327, 39 N. E. 950;Parker v. Day, 155 N. Y. 383, 49 N. E. 1046. The reason for the rule is clearly explained by Hunt, C. J., in the earliest of the cases cited. While, as between the executor and the person with whom he contracts, the latter may rely on the contract, the beneficiaries are not concluded by the executor's act, but the propriety of the charge and the liability of the estate therefor must be determined in the accounting of the executor. In an action at law against the executor, the legatees and persons interested in the estate have no opportunity to be heard. To the general rule there are exceptions, and an equitable action can be maintained against the estate on behalf of a creditor in case of the fraud or insolvency of the executor, or when he is authorized to make an expenditure for the protection of the trust estate, and he has no trust fund for the purpose. In the latter case, if unwilling to make himself personally liable, he may charge the trust estate in favor of any person who will make the expenditure. Charges against the trust estate in such cases can be enforced only in an equitable action brought for the purpose. To that action the beneficiaries and cestuis que trustent are necessary parties. The trust estate cannot be depleted or swept away except in an action which they may defend. The defendants were personally liable on their contract with the plaintiff, but the action cannot be changed on this appeal into one against the defendants individually. Austin v. Munroe, supra. Any amendment of the pleadings or in the parties must be sought in the supreme court. This action is in form at law, and has proceeded on that theory. The judgment is for the recovery of a sum of money, and authorizes the issue of an execution. But, while no action at law can be maintained against the defendants in their representative capacity, it may be that, if the complaint stated a good cause of action in equity, the defendants' motion to dismiss the complaint was properly denied, and the judgment might be suffered to stand for whatever it is worth in any subsequent proceedings the plaintiff should take to reach the trust estate. The defendants did not take the objection at the trial, either by demurrer or answer, that their cestuis que trustent were not made parties to the action, and therefore cannot raise that objection now. But the difficulty is that the complaint did not allege facts sufficient to entitle the plaintiff to charge the trust estate in equity. It did not allege that the defendants were insolvent, or not amply personally responsible for the debt; nor did it state...