Geraerdts' Will, In re
| Decision Date | 23 January 1961 |
| Citation | 211 N.Y.S.2d 915 |
| Parties | In re GERAERDTS' WILL. Application of Millie KADE, Executrix of the Estate of Eugene Kade, deceased, to compel Frieda Ostermeyer to render and settle her account as Administratrix with the Will annexed of the Estate of William Geraerdts, Deceased. Surrogate's Court, Westchester County |
| Court | New York Surrogate Court |
Turk, Marsh, Ouchterloney & Kelly, New York City, for petitioner.
Davis Polk Wardwell Sunderland & Kiendl, New York City, for respondent.
Julian A. Ronan, New York City, for respondents.
JOHN J. DILLON, Surrogate.
This is a proceeding for a compulsory accounting instituted by the executrix of the estate of a judgment creditor. Answers were filed by the administratrix c. t. a. and by the trustees of the estate of one of the sureties and the surviving individual surety on her bond. The answers challenged the status of the petitioner to demand an accounting, alleging among other things that the claim is barred by the statute of limitations and by laches and estoppel. Since the account, if directed to be filed, would cover a period of nearly thirty-five years the court held a preliminary hearing to determine the question of status.
The original cause of action upon which the petitioner's claim is based appears to have arisen in or about 1921. In December, 1925, Eugene Kade commenced an action for an accounting in the Supreme Court, Westchester County (subsequently transferred to Kings County), against William Geraerdts, the testator, and Sanitary Fireproofing & Contracting Co. The theory of the action was that Kade and Geraerdts had entered into a partnership, and that Geraerdts had wrongfully diverted the partnership profits to the defendant corporation which he controlled. On April 11, 1926, while the action was pending, Geraerdts died. His will was admitted to probate by this court and Frieda Ostermeyer was appointed administratrix c. t. a. Henry P. Thompson and Madeline O. Thompson, his wife, became sureties on the fiduciary's bond. Kade thereupon in effect discontinued his action against Geraerdts and elected to proceed only against Sanitary Fireproofing & Contracting Co. The action was still pending when Henry P. Thompson died on October 13, 1930. His will was likewise admitted to probate by this court, his widow and Guaranty Trust Company being appointed executors and trustees. In June, 1932, a decree was entered settling the accounts of the executors of the Thompson estate. The widow and Guaranty Trust Company (now Morgan Guaranty Trust Company) are still functioning as trustees of that estate.
After two trials, with intervening appeals to the Appellate Division and Court of Appeals, Kade v. Sanitary Fireproofing & Contracting Co., 227 App.Div. 622, 236 N.Y.S. 78; 228 App.Div. 646, 238 N.Y.S. 858; 257 N.Y. 203, N.E. 421, judgment was directed in the Supreme Court action in favor of Kade against Sanitary Fireproofing & Contracting Co. on July 3, 1934, in the sum of $107,877.35, but judgment was not entered until some two years later. The judgment remains unsatisfied.
In 1936 Kade commenced a similar action in the Supreme Court, New York County, against Frieda Ostermeyer individually. The action resulted in a judgment against the individual defendant, entered on April 26, 1939, for $128,652.38. That judgment likewise remains unsatisfied.
Up to this point, and in fact until 1941. Kade had never sought relief in any forum against the estate of William Geraerdts. In the meanwhile the estate had been fully distributed, although no accounting was filed. In 1941 Kade commenced two new actions in the Supreme Court, New York County, both having their origin in the same basic cause of action. One of these is important because it furnishes the foundation for the present proceeding. This was an action against Frieda Ostermeyer, as administratrix, c. t. a. of the William Geraerdts estate, and two other defendants, not including however the sureties on the bond. In that action a default judgment was entered against Frieda Ostermeyer, as administratrix, on August 2, 1943, for $73,534.02, the action having been severed as to the other defendants. This judgment, like the others, has never been satisfied, and is the indebtedness upon which the present proceeding is based.
More than thirteen years passed without incident after the entry of the judgment. Eugene Kade died on January 9, 1957. Shortly thereafter his will was admitted to probate by this court, and letters testamentary were issued to the petitioner. This proceeding for a compulsory accounting was commenced in March, 1959, by which time nearly sixteen years had elapsed since the date of the judgment . It is plain that the petitioner's objective is to recover against the estate of the deceased surety, or the surviving surety, or both.
It would be difficult to find a case in which a claimant has slept on his rights with such perseverance as the petitioner's testator, who waited until fifteen years after the death of the alleged wrongdoer before asserting a cause of action against his estate, and who died thirty-six years after his cause of action arose and fourteen years after the entry of judgment without invoking the remedy now sought by his executrix. And yet there appears to be no statute of limitations which the administratrix can successfully invoke. The rule is firmly settled that where a fiduciary relationship exists no period of limitations ever commences to run in favor of the trustee until he 'openly repudiates the trust, and asserts and exercises individual ownership over the trust property' (Matter of Ashheim's Estate, 111 App.Div. 176, 97 N.Y.S. 607, 608, affirmed 185 N.Y. 609, 78 N.E. 1099). Thus in Matter of Meyer's Estate, 98 App.Div. 7, 90 N.Y.S 185, affirmed 181 N.Y. 553, 74 N.E. 1120, it was held that a delay of more than thirteen years is no bar to a proceeding for a compulsory accounting in the absence of proof of a rejection of trust liability by the trustee. In Matter of Jacobs' Estate, 257 App.Div. 28, 12 N.Y.S.2d 605, 606, it was said that the applicable statute is the ten-year period provided for in § 53 of the Civil Practice Act, but again the rule was repeated that the statutory period 'does not begin to run until the administrator has openly repudiated his obligation to administer the estate'. Here there is no evidence of any such...
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