In re the Final Judicial Settlement of the Account of Niles ( 1888 )

Barnard, P. J.

—Chauncey S. Stephens died in Brooklyn in June, 1873, and as he left no will letters of administration were granted by the surrogate of Kings county to Elizabeth S. Miller and Nathaniel Niles. The deceased left a widow and an only child, Mrs. Miller, and about $75,000 of personal estate. The appellant, Niles, was a lawyer and managed the estate entirely by the assent of Mrs. Miller. The investments made by Mr. Niles do not meet the requirements of the law which governs trustees. He loaned money in New Jersey on unimproved land, and, also, in the state of New York. He loaned money on second mortgage, which was swept away by the foreclosure of the prior mortgage. He loaned money to himself, directly, and to a firm of which he was a member. As a whole, the loss on these investments is so large as to hardly permit a finding of good faith in making the loans. Added to this, there are in several of the loans indications that the same were beneficial to the administrators, directly or indirectly. One is met by a defense of usury, and in one the property under the foreclosure of a first mortgage was bought by the administrator, personally, with a total loss of the estate loan. The record is so difficult to account for, or to uphold, that the real issue on the case is-shifted so as to make the loans payments to Mrs. Miller. The explanation made by the appellant is quite as unsatisfactory as the record of the loans. The appellant testifies that Mrs. Stephens, who was entitled to one-third of the property, was flighty and had been in an asylum; that Mrs. Miller told him so, and, also, told him that as she, Mrs. Miller, was the sole heir she did not wish her mother informed of the details, and that she requested the appellant “to put the money as it came in in her name.” He then states, “I asked her whether I should take second mortgages,” and in her reply she said “she thought well of them.” Mr. Niles knew that Mrs. Stephens had a right to one-third of the personal estate, and that to divide her inheritance because she was helpless was not the right thing to do. He knew that such a division did not bind Mrs. Stephens. He also knew that he had no function of investment in any way. The administrator held the legal title to the fund and could temporarily invest it, but the duty imposed on the appellant was one of administration only and was designed by the law to be ended in eighteen months. Mrs. Miller denies these allegations. She testifies that she never authorized or directed “any investment in my name,” or ever assented to any form of security being taken. If this were all the evidence the appellant has the weak side of it. It would have been illegal for the appellant to do the acts he says Mrs. Miller told him to do, and a finding in her favor upon the issue will not be disturbed on appeal. The general facts of the case are against the appellant. This account was kept as of the Stephens estate, and he repeatedly informed Mrs. Miller, after his failures, that the Stephens estate was intact, and that the investments made in her name “would be for the advantage of the estate.” The letters and accounts support Mrs. Miller. There is not a word in them to show these large payments out of the estate to her; but they all proceed upon-the basis of an unimproved estate. There is not a receipt given by her which" supports appellant’s theory. They are based upon a receipt of moneys from appellant as administrator. There is not an account of the estate, in the course of - the administration, which is brought to Mrs. Miller’s attention in which it can be seen, or even inferred, that any portion of the estate had been paid over to Mrs. Miller beyond income, and as has been stated, that was received from the estate as incomes. No amount is paid as interest on the-mortgages owned by Mrs. Miller. The referee properly rejected'the claim for services in respect to the Connecticut Wester bonds. The appellant paid nothing, but agreed with a Connecticut attorney that he should look for his fees to the road on reorganization, and appellant was to pay a New York attorney, who was the appellant’s partner. The transaction is unreal in appearance and ought not to succeed. The interest on the Mostert mortgage was properly charged against the appellant. He told Mrs. Miller he wanted to call it in and lend the money to a firm, William S. Tuttle & Co., a firm of brokers of which, the appellant was a member. From its date, any amount the interest charged should have been paid. The mortgage was paid and, presumably, all arrearages of interest. A general statement that all receipts of interest received by appellant was stated in the account must yield to facts proven and which unexplained tend to show that the administrator, appellant, must have received the money. If he did not receive it he should have done so. The appellant proposed to the surrogate’s referee two hundred and eight proposed findings, which the referee refused to find and disallowed. They all, or nearly all, refer to items of evidence, only important as tending to prove the main issues which were, whether the investments were made with Mrs. Miller’s assent or were payments to her. Very many of the requests are in respect to entirely immaterial matters. Some, and not a few of them, have been found by the referee in his two reports, and upon a careful reading none under the rule in James v. Cowing (82 N. Y., 449) call for a reversal. They are “mere items of evidence, not proper subjects for specific findings,’’ according to the rule laid down in Quincy v. Young (53 N. Y., 504).

The appellant has no grievance in the refusal of the surrogate to appoint a guardian for Mrs. Stephens. A party may appear in the surrogate’s court until he has. been judicially declared to be incompetent. Section 2528, Code. The surrogate, it is true, may act upon information of incapacity with judicial determination, and direct mode of service of citation. Section 2527. We have no power to direct the manner in which the case shall be settled. If the proposed amendments were inserted they are not sufficient to reverse any finding made, but the case seems to be settled right.

The decree and order should be affirmed, with costs.

Dxkeman and Pratt, JJ., concur.