In re Judicial Settlement of the Account of Irvin

Fitzgerald, S.

This is a. proceeding for an accounting under section 2606, Code of Civil Procedure^, by tbe executors of Richard Irvin, deceased, who was in bis lifetime tbe sole executor of John J. Irvin. Tbe administrator c. t. a. of tbe last-named estate and two residuary legatees filed objections to tbe account, alleging that it failed to charge the accountants with an unascertained amount representing the value of tbe alleged interest of this decedent in tbe firm of Richard Irvin & Co. Tbe present motion is made to dismiss the 'objections on the ground that tbe objectants are barred by an agreement and release by which tbe entire matter was settled and mutual re*536leases exchanged. The execution of this release is not denied. In the Matter of Randall, 152 N. Y. 508, decided in April, 1897, the Court of Appeals considered the subject of the jurisdiction of -the Surrogate’s Court where it is sought to avoid the effect of an instrument by which parties in interest have divested themselves of their shares in the estate. In that ease it appeared that during the summer following the decedent’s, death parties interested entered into negotiations with the ad'ministrator for a sale to him of their respective interests in the estate. Four days before the administrator was appointed they executed an assignment to him of their interests in the estate, and he paid them certain -sums of money therefor. It was claimed that these papers were procured from them by the administrator by false and fraudulent representations. The latter gave a different version of the transaction, claiming that it was a fair purchase by him of the interests of the sisters, made upon their urgent solicitation and based upon what was regarded at the time as a fair valuation. By his decree the surrogate, without formally setting aside the assignments, ignored them and required the administrator to account upon .the same basis as if they had not been made, but he credited the amount of the consideration recited in the respective assignments as of the date when the money was paid. Upon appeal to the General Term the decree was affirmed on the ground that the administrator had no right to purchase the interests of the sisters for his own benefit; that the attempt to so purchase inured to the benefit of the remaining heirs and next of kin of the decedent, and, as they did not appeal, that the administrator had not been injured by the decree of the surrogate and had no cause for an appeal therefrom. The Court of Appeals, after reviewing the former decisions upon the lack of jurisdiction of the surrogate to annul or.set-aside releases, etc., and to exercise generally the pqwers.of a court of equity, ■says: “ It cannot be denied that a distributive share of an estate may be transferred by assignment, for the- statute recog*537nizes tbe right, and, where the validity of the assignment is undisputed, the court may decree distribution accordingly. 'When, however, the validity of the assignment is attacked on the ground that it was procured by fraud, a question is presented requiring for its determination the.,general power of a court of equity and, in some cases, the trial of issues by a jury. The Surrogate’s Court was not created for .that purpose' and has not been given that power. It is not claimed that such power has been expressly conferred, and the argument in favor of its existence, by implication, is opposed by the current of authority as well as the' improbability that, the legislature, in view of the trend of judicial decisions, would leave to inference a subject of such moment. When, therefore, upon an accounting in Surrogate’s Court the same distributive share is claimed by two persons, one by original title and the other by assignment, apparently valid,, resort must be had to a court of equity to settle the dispute, for the surrogate is without power to determine the question. A genuine controversy as to the validity of the assignment prevents the surrogate from directing payment to either claimant until the one or the other has ‘ established ’ his claim before the proper tribunal. We think that the learned surrogate exceeded his power’s when he disregarded and practically set aside the written assignments, made by Jane and Sarah Randall, of their distributive shares in the estate of the decedent. The judgment of the General Term and the decree of the surrogate, so far as appealed from, should, therefore, be reversed, with costs, and the matter remitted to the Surrogate’s Court of Washington county, with directions to proceed in accordance with this decision, and with leave to grant a stay of proceedings for a reasonable time to enable the respondents to establish their rights by an action in the Supreme Court.” Matter of Randall, 152 N. Y. 520. This case is on all fours with the case, at bar. Until the. agreement mentioned above has been set aside by a court of competent jurisdiction, it is an insuperable obstacle to the filing of *538objections by tbe parties thereto. The very parties’now' filing objections were made parties to and duly appeared in the accounting of William Irvin, surviving executor of Richard Irvin, Sr., the decree in which was entered March 9, 1891, in which this agreement and -the assignment given in pursuance thereof were ratified and' confirmed. They are consequently doubly estopped from questioning its validity, first, by the decree above referred to, and also by joining in the agreement. The application to strike out the objections is granted and a course should be pursued similar to that directed by the Court of Appeals in the Matter of Randall, supra.

Decreed accordingly.