Keenan v. Tonry

• Decision Date: 03 December 1940
• Parties: KEENAN v. TONRY et al.
• Court: New Hampshire Supreme Court

16 A.2d 705

KEENAN

v. TONRY et al.

Supreme Court of New Hampshire, Cheshire.

Dec. 3, 1940.

Transferred from Superior Court, Cheshire County; Connor, Judge.

Proceeding in the matter of petition by Sarah J. Tonry and others against Brendon J. Keenan, executor of the estate of John Tonry, deceased, for accounting to charge executor and sureties for loss to estate, appealed to superior court from probate court. Transferred from superior court, on the executor's exceptions.

Decree modified and case discharged.

Probate appeal, from a decree of the Judge of Probate for Cheshire County. The chief question of law presented relates to the chargeability of the executor with a shrinkage in the value of real estate in Winthrop, Massachusetts, which he foreclosed and bought in for the estate under a power of sale mortgage formerly held by the testator as security for a note.

The decedent, John Tonry, was a resident of Cheshire County at the time of his decease in 1926, testate. His will was proved in that county, and Brendon J. Keenan there received domiciliary letters on March 25, 1927. Among the assets of the decedent were a house and garage in Medford, Massachusetts, and a first mortgage on the Winthrop, Massachusetts, property in the sum of $20,000. This mortgage and the note secured by it were at the time of the decedent's death held by the Columbia Trust Company of Boston, Massachusetts, as collateral security for a debt due from the testator to that company. The proceeds of this note and mortgage are substantially the only assets out of which the presently outstanding charges against the estate may be liquidated or the legacies paid.

The New Hampshire executor applied for and was granted ancillary letters of administration by the Probate Court of competent jurisdiction in Massachusetts. Under the license of that court he sold the real estate in Medford and out of the proceeds paid both a mortgage on that property and the debt of the estate to the Columbia Trust Company. The ancillary administrator thus became possessed of the note for $20,000 and the mortgage on the Winthrop property.

This note was not due until March, 1929. The ancillary administrator, unable to collect the note, foreclosed the mortgage under a power of sale clause in September, 1929. After numerous bids at the foreclosure sale, part of which were made by one of the legatees in conjunction with Keenan, for the benefit of the estate, a responsible bidder offered $17,050. The legatee bid $17,100, and there was no further bid. The property being struck off, the administrator gave a foreclosure deed to one Brown in trust for the estate. Since then he has found no sale for the property, the value of which has declined to a startling degree as the result of the panic of October, 1929, the ensuing depression, and various changes in the local business conditions and in the zoning laws of Winthrop.

The present stage of the proceedings was initiated by Sarah J. Tonry, a legatee under the will of John Tonry, in the form of a petition to the Probate Court for Cheshire County, seeking an accounting to charge the executor and the sureties on his New Hampshire bond for the loss to the estate by reason of alleged malfeasance and misfeasance in the administration of the asset represented by the Winthrop mortgage. Later a part of the other legatees became parties to the petition.

The Judge of Probate ruled that Keenan had no legal right to bid in the property for the estate; that the bid was his individually; and that he was consequently indebted to the estate in the sum of $17,050. The Court also "credited" [charged] the executor with all rental receipts from the Winthrop property since the foreclosure, and "debited" [credited] him with all expenditures in connection with the same property. The executor was allowed $1,000 in full for his services and expenses and was ordered to file "a new and complete account of his entire administration from the beginning to the end and to distribute the estate upon the order of the Court, to be made upon the allowance of said account." The decree provided that the executor should on this final account have credit for reasonable expenditures in preparing and filing it, for hearing on the same, and for making the distribution then to be ordered. Otherwise than that, the decree is to be taken as intended to be final, at least as far as there might be questions concerning maladministration of the Winthrop property or the services of the accountant or his expenses as administrator in Massachusetts. The Judge of Probate refused to make any order for the sureties to pay any sums, leaving the legatees to their rights to sue on the bond, if and when those rights should accrue.

Upon appeal to the Superior Court, there was a reference to a master, who made findings and rulings substantially supporting those of the Judge of Probate. The master adopted the view that Keenan acted at his peril when he rejected the bid for $17,050, that he speculated with the funds of the estate when he made a higher bid, and that he became insurer for the subsequent loss, although the master found that Keenan acted both before and during the sale, as indeed ever since, in accordance with his honest judgment.

The master's report was accepted by the Superior Court, and the executor excepted. He also excepted to the denial by the master of certain requests for findings of fact and rulings of law, and to the refusal of the Superior Court to set aside the master's report.

William H. Watson, of Keene, and Dudley W. Orr, of Concord, for executor.

Howard B. Lane, of Keene, and MacKusick & Wenrich, of Boston, Mass., for Sarah J. Tonry.

PAGE, Justice.

We are urged by the appellees to sustain the rulings made below, while the executor argues that the true test of his chargeability is whether he acted in the administration of the Winthrop property in accordance with honest and reasonably prudent judgment.

No court in New Hampshire has jurisdiction to declare the appropriate law. It is true that the parties have either invoked or submitted to this jurisdiction. But if jurisdiction of the subject matter is lacking consent cannot confer it. Wolf Klein & Sons, Inc., v. Bronstein, 91 N.H.——, 13 A.2d 149, and cases cited. The rule applied here. Though a probate court assumes jurisdiction of foreign assets without objection, its judgment will not be given credit in the state where the assets lie. As to such foreign assets the judgment is void. Reynolds v. Stockton, 140 U.S. 254, 272, 11 S.Ct. 773, 35 L.Ed. 464; Jefferson v. Beall, 117 Ala. 436, 23 So. 44, 67 Am.St.Rep. 177.

"Administration only extends to the assets of the intestate, within the State where it was granted. * * * The administrator appointed in one State has no power over the property in another State." Taylor v. Barron, 35 N.H. 484, 485, 495, 496. Ancillary administration in Massachusetts "extends to all assets found within the state; and, within the jurisdiction where granted, it is exclusive of all other authority." Merrill v. New England Mut. Life Ins. Company, 103 Mass. 245, 248, 4 Am. Rep. 548.

The general rule stated is recognized with practical universality. "The office of administrator of the estate of the decedent in one state is legally separate from the office of administrator of the estate of the same decedent in another state." Restatement, Conflict of Laws, § 466. This is true when the same person receives letters of administration in both states. "He is responsible in each state only for the assets which he obtained or should have obtained as a result of his appointment as administrator by a court of that state." Id., § 466, Comment a. See, also, Restatement, §§ 519, 520; Beale, Conflict of Laws, 1560, 1561.

The general rule is somewhat limited. If the executor, under the New Hampshire appointment, had been able to...