In re Estate.

• Decision Date: 28 September 1937
• Docket Number: No. 4260.,4260.
• Citation: 41 N.M. 576,72 P.2d 27
• Parties: In re KENNEY'S ESTATE.
• Court: New Mexico Supreme Court

41 N.M. 576

72 P.2d 27

In re KENNEY'S ESTATE.

No. 4260.

Supreme Court of New Mexico.

Sept. 28, 1937.

Appeal from District Court, McKinley County; M. A. Otero, Jr., Judge.

Action by Donald B. Moses, administrator de bonis non of the estate of Eugene F. Kenney, deceased, against L. N. Cary, administrator with the will annexed, and the American Surety Company of New York, as surety on defendant administrator's bond. Decree for plaintiff, and defendants appeal.

Reversed and remanded, with instructions.

A voluntary surety on bond of one taking possession of property as trustee cannot release himself from liability on ground that principal's appointment as trustee was irregular or unauthorized and is estopped to say that principal is not trustee.

Bryan G. Johnson and Gino J. Matteucci, both of Albuquerque, for appellant American Surety Co. of New York.

W. A. Keleher and A. H. McLeod, both of Albuquerque, for appellant L. N. Cary.Mechem & Hannett and Donald B. Moses, all of Albuquerque, for appellee.

BRICE, Justice.

This is an appeal from a decree of the district court in an action for an accounting brought by appellee as administrator de bonis non of the estate of Eugene F. Kenney, deceased, against appellants, as administrator with the will annexed of the same estate, and his surety on his bond. The appellant American Surety Company will be referred to as “Surety Company,” and the other parties as appellant and appellee, respectively.

The record shows the following proceedings in the probate and district courts:

On July 7, 1924, an instrument purporting to be the last will and testament of Eugene F. Kenney, deceased, was filed in the office of the probate clerk of McKinley county, by E. L. Kenney, one of the legatees, and recorded in the records of wills. The will accompanied a petition requesting that it be admitted to probate, and that letters testamentary issue to John C. Spears and Simeon Frost, named executors therein. An order was entered on the 15th day of July, 1924, fixing the 2d day of September following as the date for proving the will; for which purpose statutory notice was duly given. On the 2d day of September, 1924, the testimony of Dr. A. H. Delong, a subscribing witness to the will, was taken and filed in the case. No order probating the will appears in the record or on file. If it was made, it has been lost. On the 18th day of September, 1924, a petition was filed in the cause by appellant, in which it was stated that the two persons named for executors in the will had refused to qualify as such and had expressed the desire that the petitioner “be appointed as the person to administer upon said estate.” On the same date an order appointing appellant administrator was entered, in which among other things it was stated: “*** that decedent died testate, leaving two persons named as executors, each of which have refused to act as such executors; that L. N. Cary, who has petitioned to be appointed as administrator, is legally competent to act for said estate. It is therefore ordered that L. N. Cary be and he is hereby appointed administrator of the estate of Eugene F. Kenney, deceased.”

Appellant did not file an oath as administrator; but made and filed his bond with appellant surety company as his surety. The bond is in form that of an ordinary administrator's bond. No mention is made of the fact that he was appointed administrator with the will annexed in the order, bond, or letters. Notice was duly published of appellant's appointment.

On the 21st day of January, 1925, appellant as “administrator of the estate of Eugene F. Kenney, deceased, with the will annexed,” petitioned to remove the proceedings into the district court of McKinley county; which was accordingly done by order of the district court, in which it was recited that the matter came on for hearing on “the petition of L. N. Cary, petitioner and administrator with the will annexed,” etc.

An application was made by appellant, as administrator of the estate with will annexed, to have the will construed by the district court; and process duly served. The court thereafter entered his decree construing the will, in which it was recited:

“This cause coming on to be heard upon this 16th day of February, 1926, in a suit brought by L. N. Cary, administrator of the estate with the will annexed, of Eugene F. Kenney, deceased, the court doth find the following facts:

“First: That Eugene F. Kenney aforesaid died testate on or about the 5th day of July, 1924, in Gallup, New Mexico, leaving a will, a copy of which is attached to and made a part of the bill filed herein; that letters of administration with the will annexed were issued unto L. N. Cary as administrator on or about the 15th day of December, 1924, by the Judge of the probate court of McKinley County, New Mexico. That said L. N. Cary, administrator as is set forth hereinbefore has qualified as such administrator by giving the bond required by the order of the probate judge, and that said will was duly probated by said court.”

In fact, since appellant's appointment, it has been assumed by the courts and all persons concerned in the administration of the estate, as all proceedings show, that the will was duly probated and appellant was the administrator with the will annexed.

In a petition by some of the heirs for the removal of appellant, he was designated “administrator cum testamento annexo,” as he was in the order of removal, and the order appointing appellee administrator de bonis non.

Upon order of the court, appellant filed a final report and accounting, to which the appellee filed objections and gave notice thereof to appellant and the surety company, both of whom appeared at the hearing on the objections to the final report.

At such hearing counsel for the surety company stated: “Mr. Johnson: I am appearing in this proceeding on the objections filed to the final report of L. N. Cary on behalf of the American Surety Company of New York, by reason of the fact that the American Surety Company of New York appears as the surety on a bond executed by L. N. Cary as principal, and that notice of this proceeding was given to the American Surety Company of New York. The general rule of law is apparently that a surety who has notice of a hearing on an administrator's account will be bound in any suit on the bond as to the judgment entered by the Court against the administrator, and we therefore appear in this proceeding solely to protect our interests in that regard; but, this appearance, in so far as the law may permit, does not or is not intended to submit the Surety to the jurisdiction of the Court for the purpose of entering judgment in this proceeding, nor does the American Surety Company of New York waive any rights that it may have to question the liability of the Surety Company on the bond itself.”

[1] The fact that the bond designates appellant “administrator” instead of “administrator with the will annexed” is immaterial, if in fact the order of appointment shows the true intent was to appoint him administrator with the will annexed. The appellant's application and the order appointing him administrator recite in substance that Eugene F. Kenney died testate; that the executors named in the will had refused to act as executors and that appellant was legally competent to act. This state of facts permitted only the appointment of an administrator with the will annexed; and such was the effect of the order of the court. Bull v. Bal, 17 N.M. 466, 130 P. 251. For more than ten years the court and all parties interested have assumed in all proceedings in the cause that appellant was the administrator with the will annexed. This was the evident intention of the court, and the district court did not err in holding that appellant was the administrator with the will annexed. It may be stated in passing that the Surety Company and not the appellant raises this question.

[2][3] The Surety Company raises the question that the will was never probated, by reason of which there could be no administrator with the will annexed. The whole proceeding has been conducted as though the will had been probated; the appellees have taken the benefits as though it had been probated, received a distribution of cash, and the administrator has proceeded to sell real estate and otherwise act under the terms of the will.

So far as the liability of appellant is concerned, it is immaterial whether a formal order was entered probating the will. In fact, all parties to the proceeding, including the probate and district courts, have acted under the assumption that the will was duly probated. Appellant took possession of the property of the estate and made disposition of it under this assumption. Except for the bond, appellant could not have obtained possession of the estate, and his surety (appellant does not raise the question) cannot now release itself from its obligation by denying the only authority under which its principal could have secured possession of these funds. A voluntary surety of one who takes possession of property as a trustee cannot release himself from liability on his principal's bond after he becomes liable thereon, upon the ground that the appointment of the principal as trustee was irregular or unauthorized. Under these circumstances the surety of a trustee will not be permitted to say that his principal was not in fact a trustee; he is estopped under well-recognized principles of law.

“If the proceeding was irregular for want of notice to the children of Mrs. Lynch, they might object to it in a proper manner for that cause; but Lynch, after having obtained the property upon the pretence of being the trustee, cannot be permitted to deny his liability to account as such. The defendant, who voluntarily became his surety in order that he might take the trust property, is for a like reason precluded from denying his liability as surety.” People v. Norton, 9 N.Y. 176.

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