In re Bingham

• Decision Date: 09 June 1891
• Citation: 27 N.E. 1055,127 N.Y. 296
• Parties: In re BINGHAM.
• Court: New York Court of Appeals Court of Appeals

127 N.Y. 296

27 N.E. 1055

In re BINGHAM.

Court of Appeals of New York, Second Division.

June 9, 1891.

Appeal from judgment of the general term of the supreme court in the fifth judicial department, affirming decree of the surrogate of the county of Livingston. The First National Bank of Dansville, N. Y., having been organized pursuant to the laws of the United States, and after having carried on its business for many years, became insolvent, and Charles L. Bingham was by the comptroller of currency of the United States duly appointed receiver of the bank in September, 1887, and entered upon the performance of his duties as such. The comptroller of the currency made an assessment of 100 per cent. of the amount of capital stock of the bank upon its shareholders; and James Faulkner, who died in October, 1884, was at the time of his decease the owner of 290 shares of the stock, of $100 each, and held 50 more shares, which came to him from his son Samuel D. Faulkner, who died intestate in 1878, and of whom the father was the only heir and next of kin, and with Henry J. Faulkner took letters of administration of his estate. James Faulkner, deceased, by his will nominated James Faulkner, Jr., Lester B. Faulkner, and another as executors. On April 25, 1885, the will was admitted to probate, and letters testamentary issued to James Faulkner, Jr. His letters were revoked in October, 1887, and in December following letters were issued to Lester B. Faulkner. Before the expiration of three years from the time those first letters were issued, Bingham, as receiver, brought an action against the executor to recover such assessment made by the comptroller of the currency upon the stock of the bank belonging to the estate of the testator, and within that time caused to be filed in the offices of the clerks of Livingston and Allegany counties notices of the pendency of the action. The petition by which this proceeding was instituted was filed July 9, 1888. Charles J. Bissell and Christiana Smith, respectively, came in as creditors of the testator, and established their claims. The surrogate determined that the estate of the decedent was indebted to the receiver $29,000, to Bissell $620.65, and to Smith $2,900, and that the petitioner was entitled to decree. It was entered accordingly. Other facts appear in opinion.

W. A. Sutherland, for appellant Hyland.

Chas. J. Bissell, for Bingham, receiver.

Joseph W. Taylor, for Crisfield, trustee, etc.

C. W. Stephens, for respondent Smith.

BRADLEY, J., ( after stating the facts as above.)

The testator, James Faulkner, died seised of a considerable quantity of real property, some of which he specifically devised, and the rest of it came within the residuary clause of his will, by which he gave to his heirs and next of kin the residue of his estate, to be divided between and paid to them in cash in five years from his decease, and gave to the executors power to sell and convert into money the property, and make the distribution there directed. In July and August, 1887, James Faulkner, Jr., mortgaged to John Hyland lands specifically devised to him by the testator, and situated in the county of Livingston, to secure the payment in the aggregate of $40,000. This was done by three mortgages; and by another made in August, 1887, he mortgaged his title and interest as residuary devisee and legatee in the lands convered by that clause to John Hyland, to secure the payment of the further sum of $20,000. These mortgages were, soon after their dates, recorded in the clerk's office of Livingston county. They were assigned to George Hyland, and the assignments recorded in April, 1888. He was not named in the petition; and for that reason, as well as others, it is urged by his counsel that the surrogate acquired and had no jurisdiction to entertain the proceeding, or to make the decree which was made. It is true, as claimed, that the proceeding is dependent upon the statute for its support, and substantial compliance with it is essential to jurisdiction. This proceeding was not commenced within three years after letters testamentary were first issued to the executor of the will of the testator. This is the time within which it is provided that a creditor of a decedent may present his petition to the surrogate's court praying for a decree directing the disposition of the decedent's real property for the payment of his debts. Code Civil Proc. § 2750. But the time during which an action is pending in a court of record between a creditor and an executor or administrator of the estate is not a part of the time so limited ‘for presenting a petition founded upon a debt which is in controversy in the action, if the creditor has, before the expiration of the time so limited, filed in the clerk's office of the county where the real property is situated a notice of the pendency of the action, specifying the names of the parties, the object of the action, * * * containing a description of the property in that county to be affected thereby, and stating that it will be held as security for any judgment obtained in the action.’ Id. § 2751.

It appears by the petition that before the expiration of three years from the time letters were issued to James Faulkner, Jr., and until the time of the presentation of the petition, an action brought by the petitioner, as receiver of the First National Bank of Dansville, as creditor, against the executor of the will of the testator, was pending, and that before the expiration of such three years the plaintiff duly filed a notice of pendency of the action, etc. The petition did not state that it was ‘founded upon a debt which was in controversy in the action;’ and for that reason it is urged that the surrogate took no jurisdiction by it to proceed in the matter. While it is essential that the petition be founded upon such debt to relieve the proceeding from the limiting provision of section 2750, the statute does not in terms require that the fact should appear in the petition, but does provide what it shall set forth. Section 2752. It would therefore seem that such requirement was effectually suppliable by proof; and the fact that the lis pendens was filed, etc., in compliance with the statute was proved. It appeared that the debt upon which the petition was founded was the subject-matter of the action; but there was no evidence other than the inference derivable from the fact that the action had been brought, and was pending, that the cause of action alleged was contested. The action had been pending about six months at the time of filing the petition; and, in view of its commencement and such pendency, the reasonable presumption is that the claim made by the receiver was disputed, and that the alleged debt was in controversy in the action. This question was not raised on the hearing, not is it distinctly presented by any exception.

It is contended in behalf of George Hyland that the surrogate acquired no jurisdiction as against him, because he was not named in the petition. The statute upon the subject provides that the petition must set forth ‘as nearly as the petitioner can, upon diligent inquity, ascertain them,’ the names of all the heirs and devisees of the decedent, and also of every other person claiming under them or either of them, (Id. § 2752;) and that a decree can be made only where it is established to the satisfaction of the surrogate that the proceedings have been in conformity to the statute, (Id. § 2759.) Neither was he named in the citation issued upon the filing of the petition. The proceedings progressed, and thus far he could not have been prejudiced by them. But afterwards an affidavit of the petitioner to the effect that certain other persons named, not including Hyland, had or claimed to have a claim or lien on or interest in the premises described in the petition, was filed with the surrogate, who then issued citations to such persons and George Hyland, citing them to appear and show cause why a decree should not be made directing the disposition of the property of testator for the payment of his debts. This citation was served upon Hyland, and he appeared and filed his answer, setting forth as well objections to the jurisdiction of the surrogate as matters upon the merits of the petition. Thereupon the petitioner and the other creditors before mentioned repeated the introduction of the evidence before given; and after the close of the proofs Hyland submitted propositions to the surrogate, with request to find them, and excepted to findings of fact and conclusions of law as found by him. As presented by the record, there was an irregularity in not having any proof and order upon which to found the citation issued to Hyland, and in not so amending the petition as in that manner to make him a party to it; yet by his appearance generally, and taking part in the proceeding, he became a party to it, and, assuming that the surrogate had jurisdiction of it, the power as against Hyland to make decree was as effectual as if he had originally been made a party. While appearance or consent cannot confer upon a tribunal jurisdiction of subject-matter not within it, the rule is otherwise as to the jurisdiction of the person. In the present case, not only the subject-matter was within the jurisdiction of the surrogate, but the petition contained the elements essential to its support, although further facts were necessary to the maintenance of the proceeding, and, so far as they existed, were available for such purpose. Id. § 2474.

The statute provides that the petition must set forth as nearly as the petitioner can, upon diligent inquiry, ascertain, a general description of the decedent's real property, and interest in real property, within the state, (Code Civil Proc. § 2752,) which may be disposed of in the order prescribed in section 2763. The testator had an interest in what was known as the ‘Tolles House,’ which was not mentioned in the...