In Re the Accounting of Sherman ( 1919 )

On March 25th, 1914, William S. Deyoe, a resident of the town of Northumberland, Saratoga county, died leaving a last will and testament in which the appellant, Frank R. Sherman, was named as sole executor. Probate being contested, the appellant on the 31st day of March was granted letters of temporary administration. After the will was admitted to probate Frank R. Sherman renounced the executorship and letters of administration with the will annexed were issued to Maude Van Denburgh, the respondent herein, who duly qualified and has since been acting in that capacity.

On August 20th, 1914, the appellant filed his petition and account as such temporary administrator. He failed to include therein three bonds of the American Wood Board Company. Objections to this omission having been filed, the surrogate after a hearing surcharged the appellant with the sum of $3,297, the value of the bonds with interest thereon from March 1st, 1914. The appellant claimed that these bonds were a gift to him by the deceased shortly before his death. The surrogate made the following findings of fact:

"12. That on the said trial in this accounting the contestant called the said Sherman as a witness and said Sherman testified that just before leaving for said hospital said Deyoe delivered to said Sherman said three coupon bonds, and at the same time said to Sherman that one of the bonds was his; that said Sherman thereupon placed all said bonds in his own safe, and none of the same were ever redelivered to said Deyoe; Sherman further testified that afterwards at the hospital, said Deyoe told said Sherman that all the said bonds were Sherman's to do with as he pleased; and that afterwards said Sherman sold said bonds as his own.

"13. That said Sherman testified truly in relation to said matter, but was not sufficiently corroborated by other evidence to establish his claim to said bonds."

In his opinion the surrogate said:

"While I fully believe that Mr. Sherman told the exact truth, I feel constrained to hold as matter of law upon the authority of the foregoing cases that the evidence is insufficient to establish a gift of the bonds to him."

The cases referred to were Hamlin v. Stevens (177 N.Y. 39) and Rosseau v. Rouss (180 N.Y. 116). At the time of this decision by the surrogate he had not before him our decision in the case of Mc Keon v. Van Slyck (223 N.Y. 392,397) as it was not decided until May of 1918. There we stated as follows:

"In civil cases a plaintiff is never required to prove his case by more than a preponderance of evidence. This is as true of actions against an executor, founded on claims put forward for the first time after the death of the testator, as it is of other actions. (Lewis v. Merritt, 113 N.Y. 386.) No doubt in determining whether the preponderance exists, the triers of the facts must not forget that death has sealed the lips of the alleged promisor. They may reject evidence in such circumstances which might satisfy them if the promisor were living. They must cast in the balance the evidence offered upon the one side and the opportunities for disproof upon the other. They may, therefore, be properly instructed that to make out a preponderance, the evidence should be clear and convincing. (Roberge v. Bonner, 185 N.Y. 265.) But all these instructions in last analysis are mere counsels of caution. The responsibility of determining whether the evidence is clear and convincing must ultimately rest upon the jury, subject, of course, to the power of the court to set aside their verdict. There is no rule of law that the claimant's contract must be in writing, or even that it must be made out in all substantial particulars by disinterested witnesses."

After explaining the decision of Hamlin v. Stevens, the opinion further states:

"In the instant case the jury might properly have been instructed that they could reject the testimony though uncontradicted unless they found it clear and convincing. They might even have been instructed that they could in their discretion reject it if it was not corroborated in all substantial particulars by disinterested witnesses. But they could not properly be instructed that such corroboration was essential as a matter of law, or that the law, irrespective of the circumstances, viewed the claim with suspicion." (p. 398.)

The learned surrogate was, therefore, in error when he ruled in this case that the testimony of the appellant although true required corroboration as a matter of law. This matter having been set forth and the attitude of the surrogate fully stated in his findings of fact, the unanimous affirmance by the Appellate Division does not preclude us from reversing a judgment which those findings do not support or justify. In other words, the judgment is based upon insufficient and improper findings.

While the testimony of the appellant was not required as a matter of law to be corroborated by other evidence in order to make out a gift yet it did call for a very careful scrutiny and examination in accordance with the suggestions made in Ward v.N.Y. Life Ins. Co. (225 N.Y. 314, 322). It was there said:

"The rule in any civil case is that the plaintiff must establish his claim by a fair preponderance of evidence. He need do no more than this if his claim deals with a dead person; he cannot do less if he is attacking the rights and property of a living person. The general rule as to weight and quality of evidence is no different in one case than in the other. In applying the rule and test to specific evidence, however, it very likely will and should occur that the triers of fact will more carefully and critically scrutinize evidence offered against a dead person's estate for the purpose of deciding whether it does make the necessary weight and preponderance of evidence, than would be done if the testimony was offered against one who was alive to contradict it."

If upon a rehearing of this case the evidence of the appellant is admitted it should be treated in the light of these suggestions by the surrogate in determining whether or not a gift has been established.

Without of course designing to review the findings made by the surrogate, we may refer to the evidence for the purpose of illustration of what we have said.

William S. Deyoe was the owner of a number of farms and woodlots and tenement houses in Saratoga Springs and Schuylerville. He was engaged in lumbering, operated a sawmill and had a large number of men and teams employed in his business. On the 5th day of November, 1914, being about to enter St. Peter's Hospital in Albany for a serious operation which resulted in his death on March 25th, he requested the appellant to take charge of his farms and lots during his absence and placed in his hands three $1,000 bonds which are involved in this proceeding. Whether the bonds were given solely to make provision for funds for the purpose of carrying on the business or given outright as the appellant's absolute property is a question even on the testimony of the appellant himself to be determined by the surrogate.

He swore that the bonds were handed to him to keep himself supplied with money. Deyoe was going to the hospital and Sherman was to look after his business affairs while he was away. Sherman says that he understood from the conversation that Deyoe was giving him these bonds or two of them to carry on the business so far as necessary. At a later time Deyoe, he says, told him that all the bonds were his. While it was not necessary as a matter of law that Sherman's testimony should be corroborated to establish a gift it surely needed careful scrutiny and analysis to ascertain whether it had that reasonableness and probability in view of all the circumstances as would naturally lead to the belief that a gift had been made and intended. Sherman was the only one interested in establishing the gift, and was foreclosed from testifying as to transactions with the deceased under section 829 of the Code of Civil Procedure. His statements regarding the nature of his possession were received apparently on the ground that the respondent had opened the door to a full inquiry by one or two questions asked by examining counsel. The situation and condition of the deceased, the necessities of the business, the work the appellant was to do and the manner of making the claimed gift are all matters to be considered by the trier of the facts in determining whether this testimony of a party interested proves by the necessary preponderance that a gift of the three bonds was actually made and was not intended as a means solely of raising funds to meet expenses.

In the light of the later decisions of this court and with these suggestions as to the application of the rule we send this case back to the surrogate for a retrial of the issue upon this question of gift.

The order of the Appellate Division and decree of Surrogate's Court should be reversed and a new trial granted, costs to abide the event.