Stout v. Betts , 81 N.Y. Sup. Ct. 266 ( 1893 )

MAYHAM, P. J.

The case shows that the appellant was named in the will of Hiram Betts as executor and trustee, and on the probate of such will he qualified, and entered upon the duties of his trust; that, on being cited by respondent to account before the surrogate of Cortland county, he voluntarily rendered his account, and on such accounting the surrogate found, and by his decree adjudged, that the appellant had in his hands, as trustee, the sum of 82,159.62 belonging to the respondent as cestui que trust, pursuant to the terms of said will, and that he had improvidently managed the trust committed to his charge, and that he Was unfit for the due execution of the trust, and that there was reason to believe that his financial condition hazarded the existence of the trust. The surrogate also, in his decree, removed the appellant, as testamentary trustee, from his trust, and in the same decree appointed Lewis Boughton as trustee, with all the rights and duties with reference to said trust fund conferred upon the appellant under and in pursuance of the terms of such will, and the letters testamentary issued to him thereon. This decree was made and entered in surrogate’s court on the 13th day of December, 1892, and a copy served on Betts, the appellant, on the 14th of the same month. On the 13th of January, 1893, Betts, by his attorney, served on the attorney for the respondent herein a notice of appeal, in which he gives notice “that Hiram W. Betts, the acting executor and trustee, hereby appeals,” etc. This notice is signed, “L. B. Treadwell, Atty. tfor Hiram W. Betts, Executor,” etc. No copy of an undertaking on appeal was served with the notice, and no undertaking thereon was filed in the surrogate’s office of Cortland county until the 16th day of June, 1893. On the 14th day of January the notice of appeal served by the appellant was returned to his attorney, on the ground that no undertaking was filed, and the notice of appeal was a nullity. No leave of the court to file an undertaking on the 16th of June seems to have been obtained. The appeal on this motion is taken in the name of Hiram W. Betts individually, and is addressed to the attorney for the plaintiff, and not served upon the trustee and administrator with the will annexed, on whose petition the substitution was made. This substitution is claimed to have been made under the provisions of section 756 of the Code of Civil Procedure, on the theory that by the decree of the surrogate a devolution of liability was cast upon Lewis Boughton by his appointment as trustee in the place of Hiram W. Betts, removed, who was prosecuted originally in this action, and has been removed. That section provides that:

“In case of a transfer of interest, or devolution of liability, the action may be continued by or against the original party; unless the court directs the person, to whom the interest is transferred, or upon whom the liability is devolved, to be substituted in the action, or joined with the original party, as the case requires.”

But it is insisted by the respondent that the appeal in this matter suspended the operation of the surrogate’s decree, and that proceedings under it stayed all action on the part of Boughton, who was appointed successor of Hiram W. Betts, and in support of' that contention the court is referred to sections 2576 and 2578 of the Code of Civil Procedure. But we think that an examination of those sections will show that they do not relate to decrees removing testamentary trustees or executors. By section 2583 of the Code, it is provided that:

“An appeal from a decree revoking the probate of a will or revoking letters testamentary, letters of administration, or letters of guardianship; or from a decree or an order, suspending an executor, administrator, or guardian, or removing or suspending a testamentary trustee, * * * does not stay the execution of the decree or order appealed from.”

The language of this section seems to embrace an appeal from a decree like the one from which this appeal is taken. If we are right in this conclusion, then this appeal, even if regular, did not prevent the devolution of this trust property upon the successor of the deposed trustee; and Boughton, as such successor, would seem to be a proper person to be substituted as the defendant for the purpose of protecting the trust fund, either as against the plaintiff in the action, or his insolvent predecessor. We are therefore of opinion that the order of substitution was correct, and should be affirmed.

Order affirmed, with $10 costs and printing disbursements. All concur.