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[1] While the primary duty of an executor chased were at least presumptively held liy is to convert the assets of an estate into cash them for the estate and not personally, and and pay the debts of the testator and the the residuary legatees were estopped from gifts and bequests provided by the will, it asserting any personal Hability against them may be necessary, or at least prudent in or either of them in case of a loss. 2 Rul many cases, to hold all of the assets of the ing Case Law, p. 142. Their liability to es estate until a distribution thereof pursuant tablish the trusts provided by the will wert to a decree upon a judicial accounting, and it not affected by their acts pursuant to the may also be desirable or even the duty of an request of such residuary legatees. executor to invest uninvested funds in his The testator did not in express terms pro. possession as executor during such time, and vide that the trusts should be set apart tu in any case circumstances may arise which the trust company in cash or in securitie: may make it desirable or the duty of an ex-owned by the testator at the time of his ecutor to change the investments of the tes- | death. The direction is "that the executors tator as in case of palpably unsafe invest

set apart a sum of money or securiments, or those reasonably certain to depre ties to an amount or of value in their judgciate in case they are held. Dunscomb v. ment amply sufficient to provide from the anDunscomb, 1 Johns. Ch. 508, 7 Am. Dec. 504; nual income" an amount sufficient to pay the Ormiston v. Olcott, 84 N. Y. 339; 2 Ruling sums provided by the testator to be paid in Case Law, 143. It is not therefore entirely accordance with the sixth and seventh paracorrect to say that an executor as such has graphs of the will, respectively. The trust no authority to make investments.

company doubtless could have insisted that It appears by the twenty-third paragraph the executors deliver to it either cash or seof the will that the testator appreciated that curities owned by the testator at the time of the executors, except for the authority there his death or such securities as are named in in given, might be required in the perform the will or as are prescribed by section 111 ance of their duty to sell, during the continu- of the Decedent Estate Law. The only exance of their duties as executors, some of the press limitation on the securities to be set stocks, bonds, and other securities held by apart for the trust funds is that they, with him at the time of his death. That knowl-the "sum of money” included therewith, shall edge by the testator necessarily included an be "of value in their (executors') judgment appreciation of the possibility that the pro- amply sufficient to provide" the required inceeds of the bonds and stocks and other se- come. The executors were, of course, bound curities so held might have to be reinvested. to act in good faith in exercising their judg. Even the provision in the will relating to ment. holding investments owned by the testator (5) A legacy or other payment pursuant at the time of his death did not wholly re- to a direction in a will is ordinarily payable lieve the executors from care and responsibil- in cash, but it does not prevent any other ity regarding such investments. Matter of form of payment which is acceptable to the Hall, 164 N. Y. 196, 58 N. E. 11.

payee. Camp v. Smith, 49 Hun, 100, 1 N. Y. Our statute provides in detail in what se- Supp. 372, affirmed 117 N. Y. 354, 22 N. E. curities an executor, administrator, trustee, 1014. or other person holding trust funds may in There can be no reasonable doubt that, if vest. Decedent Estate Law (Cons. Laws, c. the trust company accepted the stocks as 13) $ 111.

stated knowing that some of them were own[2] If an executor disregards the provided by the testator in his lifetime and some sions of the will or a rule of law relating to were not owned by the testator in his lifeinvestments, he takes the risk of any loss time, it would have so accepted them as inthat may result, without the right to any vestments for the trust funds and become reprofit that he may make by reason of such sponsible for them as investments made by it investment. Holden v. N. Y. & Erie Bank, as of the time of the acceptance of the trust 72 N. Y. 286 ; Adair v. Brimmer, 74 N. Y. 539. funds respectively.

[3] It is optional with beneficiaries of the [6] We do not find any evidence of colluestate to hold the personal representative lia- sion between the executors and the residuary ble for the amount of funds that he has in- legatees. The executors, after a conference vested improperly, or to accept the invest with the residuary legatees, each apparently ment as made. King v. Talbot, 40 N. Y. 76. in good faith desirous that an amount amply

[4] The executors in this case made invest- sufficient to provide an Income to the testaments that are not authorized by statute. tor's daughter and sister as provided in the They were made pursuant to the express re- sixth and seventh paragraphs of the will quest of the residuary legatees, and they re- should be set apart, concluded to submit to tained in their hands as executors sufficient the trust company the stocks mentioned for of cash and securities held by the testator at its approval and acceptance. It is not claimthe time of his death to pay all of the gifts ed that the executors intentionally and in bad provided by the will, other than those to faith refrained from telling the appeilant residuary legatees. In doing so under the cir- that part of the investments proposed were cumstances disclosed, the securities thus pur- | not owned by the testator at the time of his

death. The appellant does claim, however, his name unchanged, while the certificates that it was the duty of the executors to make for the Metropolitan Street Railroad Comsuch statement to it, and that because they pany and the Baltimore & Ohio Railroad did not make such statement the trust funds Company stocks were dated subsequent to should be deemed never to have been formed, the death of the testator and were in the and the court should now direct that an individual name of one of the executors. amount be taken from the residuary estate It also appears that there had been a to make good the loss occasioned by the de proceeding to determine the amount of the preciation in the Metropolitan Street Rail-transfer tax to which the trust company road Company and the Baltimore & Ohio was a party, and the papers in that proceedRailroad Company stocks. The whole claim ing showed that the testator did not own any of the appellant depends upon its assertion stock in the Metropolitan Street Railway that it had a right, as a matter of law, to Company or in the Baltimore & Ohio Railassume that all stocks submitted to it by the road Company at the time of his death. executors to make up the trust funds were The trust company knew, or could have stocks owned by the testator at the time of known, that the executors had made investhis death.

ments from the cash remaining in their The trust company in its brief says:

hands or from the proceeds of investments "This is the crux of the whole decision as to owned by the testator at the time of his the liability of the trust company, The court death, or even that, as the estate was solwill find upon reflection and analysis that every: vent, they had made a change of investments thing else in the case bearing upon the trust company's liability carries back to this one in obedience to the wishes of those interested point.”

in the residuary estate. The estate of Villard was solvent. The

The executors on their part, in paying the value of the stocks at the time they were amount to the trust company, were dealing accepted by the trust company was amply with a corporation making a specialty of sufficient to provide an income to the testa- | trust matters, and very familiar with the tor's daughter and sister as provided by the authority of executors and trustees and as will. Such stocks were then in good repute, to trust investments, and no special duty and dividends thereon were regularly paid. was owing by them to it. The payment to In placing them in the trust funds, the the trust company, without expressly calling executors were not attempting to carry out to its attention the fact that the Metropolisome scheme, device, or purpose. The execu- tan Street Railroad Company and the Baltors did not foist the stocks upon the trus- timore & Ohio Railroad Company stocks tee. The stocks in question, at the time they were not owned by the testator at the time were accepted and receipted for by the trus- of his death, did not amount to a fraudulent tee, were of a market value sufficient with concealment by the executors, as the trustee the other stocks to constitute a fund as had ample opportunity to make any investidirected by the testator, and such stocks gation thereof that it deemed or should have continued of such or of greater value for deemed advisable. Long v. Warren, 68 N. some time thereafter, and could have been Y. 426. Not a question was asked in behalf sold by the trustee even at a material profit of the trust company in regard to the inover the market value thereof at the time vestments when it was given an opportunity when they were received by it. There was in advance of the delivery of the stocks to no possible purpose, therefore, in the execu- express its approval or disapproval of the tors in attempting to deceive the trust com- securities proposed to make up the trust pany or to induce it to take the stocks in set- funds. It doubtless could then have had the ting apart the trust funds.

trust funds set apart in cash if a suggestion It is not to be assumed that the trust to that effect had been made. Instead of company with all its experience was unwit- that, the appellant expressed itself as sattingly and innocently deceived into accept-isfied with setting apart the trust funds as ing the stocks in question. It is rather to proposed. If the appellant assumed that its be inferred that the trust company did not liability was restricted because of the proat the time of the acceptance of the trust visions of the will that have been quoted funds consider whether the stocks in ques- in regard to holding the stocks owed by the tion had been owned by the testator in his testator at the time of his death, it was an lifetime.

assumption without inquiry or investigation, So far as there was presented to it any and the trial court has found as a fact that facts affecting the question whether the such assumption was unwarranted. Metropolitan Street Railway Company and

It is said by the Appellate Division herethe Baltimore & Ohio Railroad Company

in that: stocks were purchased before or after the “An inquiry would have been a simple act of testator's death, such facts tended to show prudence required by the measure of care owed that they were subsequently purchased be- by the trustee in the discharge of its duties." cause the certificates presented to it for the So it seems to us. In a solvent estate Milwaukee Electric Railway & Light Com- like the one now under consideration it pany stocks which were owned by the tes should not be assumed that no new invest

22 Hun, 270. It was not the care of an or- of the article for disability or death of his emdinarily prudent man to continue to hold ployé, etc. Section 11 provides that the liathe investments without inquiry or further shall be exclusive, and section 16, under the ti

bility prescribed by the last preceding section investigation. Rush v. Steele, 93 Va. 526, tle "Death Benefits," provides that the com25 S. E. 604.

pensation shall be payable to a surviving wife, The stocks were, at the time they were a dependent husband and children under

the age received by the trust company, of a market making no provision for adult brothers and sis

of 18, and dependent parents and grandparents, value sufficient to produce an income ample ters. Held, that such brothers and sisters of a to pay the amounts to be paid to the tes- servant killed in service, not entitled to compen. tator's daughter and sister as provided by sation for his death under the act, had no right the will. That was the important consid- against the employer for damages for the death.

of action, under Code Civ. Proc, 88 1902–1908, eration. The trust company from that time [Ed. Note.-For other cases, see Master and became answerable for the conduct of the Servant, Dec. Dig. Om 351.] funds. Matter of Wotton, 59 App. Div. 584, 2. MASTER AND SERVANT 358_CONTRACT 69 N. Y. Supp. 753, affirmed 167 N. Y. 629, OF EMPLOYMENT-INCLUSION OF WORKMEN'S 60 N. E. 1123. The trust company was not

COMPENSATION LAW. bound to retain them. The loss resulted

In the absence of something indicating the

contrary, the provisions of the Workmen's Comentirely from continuing to hold the securi- pensation Law applied to and entered into the ties named. It was the trust company that contract of employment of an engineering comdetermined to retain the securities in the pany's servant. trust funds. We agree with the courts be

[Ed. Note. For other cases, see Master and

Servant, Dec. Dig. 358.] low that the trust company was not entitled as a matter of law to assume that the stocks

Willard Bartlett, C. J., and Chase, J., dissent

ing. delivered to it were owned by the testator at the time of his death.

Appeal from Supreme Court, Appellate [7] The court has found against the appel. Division, Fourth Department. lant on all questions of fact. We have quot Action by Margaret Shanahan, as admin. ed the most important of them, and there istratrix, etc., of Michael Shanaban, deceased, is some evidence to sustain each of such against the Monarch Engineering Company. findings. The proposed findings to the con- From an order of the Appellate Division (172 trary which the court refused were not App. Div. 221, 159 N. Y. Supp. 257), affirming established by uncontradicted evidence. We an interlocutory judgment made by the Suare bound by findings when supported by preme Court sustaining a demurrer to an some evidence. Ostrom v. Greene, 161 N. answer interposed by defendant, defendant Y. 353, 55 N. E. 919; Costello v. Costello, 209 appeals. Order reversed, and questions cerN. Y. 252, 103 N. E. 148.

tified answered in the negative. The findings of fact so supported by evidence require an affirmance of the judgment, lant. w. J. Wetherbee, of Buffalo, for re

George P. Keating, of Buffalo, for appelwith costs.

spondent. HISCOCK, COLLIN, CUDDEBACK, HOGAN, and POUND, JJ., concur. WILLARD POUND, J. A demurrer to one of the deBARTLETT, C. J., not sitting,

fenses in this action as insufficient has been

sustained. The pleadings upon which this Judgment affirmed.

decision has been based disclose the following

facts: This action is brought under the (219 N. Y. 469)

provisions of sections 1902–1908 of the Code SHANAHAN V. MONARCH ENGINEER of Civil Procedure to recover damages for ING CO.

the benefit of the next of kin of Shanahan, (Court of Appeals of New York. Dec. 28, 1916.) claimed to have been caused by his death

while in the employ of the defendant, result1. MASTER AND SERVANT 351-WORKMEN'S

COMPENSATION LAW - EXCLUSIVE CHARAC" ing from the negligence of the latter. Shana. TER OF REMEDY.

han at the time of his death was engaged in Const. art. 1, § 18, adopted in 1894, pro- a class of work to which the Workmen's vides that the right of action now existing to recover damages for injuries resulting in death Compensation Law applied and would have shall never be abrogated and the amount recovo provided compensation for a widow or cererable shall not be subject to any statutory lim- tain designated next of kin if he had left itation. Article 1, § 19, inserted in 1913, gives them, and the defendant as employer had the Legislature plenary power to enact workmen's

compensation laws and to provide that complied with the requirements of the statthe right of such compensation and the remedy ute. Shanahan, however, left no widow or therefor shall be exclusive of all other rights next of kin meeting the description of those and remedies for injuries to employés or for entitled to compensation under the act, his death resulting from such injuries, and to provide that the amount of such compensation for next of kin in whose behalf this action is death shall not exceed a fixed or determinable brought being adult brothers and sisters

Workmen's Compensation Law (Consol. Laws, c. 67; Laws 1914, c. 41) $ 10, provides who are not entitled to compensation under that every subscribing employer shåll pay or pro- the act. The answer which has been held invide compensation according to the schedules / sufficient set up the Compensation Law as a

sum.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

case

bar to this action, and thereby the questioned liability without fault and thus took prophas been presented which we are called on erty without due process of law. Ives V. to determine-whether the Workmen's Com- South Buffalo Ry. Co., 201 N. Y. 271, 94 N. E. pensation Law in the classes of employment 431, 34 L R. A. (N. S.) 162, Ann. Cas. 1912B, therein enumerated, when an employer com- 156. Thereafter in 1913 the amendment to plies with its requirements, provides a right the Constitution was made (article 1, $ 19), of compensation for death and a remedy which gave to the Legislature plenary power therefor which are exclusive of all other to enact workmen's compensation laws. So rights or remedies, even though it happens far as material it reads as follows: in a particular that the decedent "Nothing contained in this Constitution shall has left no widow or next of kin who are be construed to limit the power of the Legislaentitled to benefits under the act, but has lives, health, or safety of employés; or for the

ture to enact laws for the protection of the left next of kin not entitled to such benefits. payment, either by employers, or by employers

[1] The statutory provisions which for and employés or otherwise, either directly or many years before the enactment of the through a state or other system of insurance or

otherwise, of compensation for injuries to emWorkmen's Compensation Law permitted the ployés or for death of employés resulting from present form of action to be maintained such injuries without regard to fault as a cause against an employer to recover damages on such compensation, and the remedy therefor shall

or to provide that the right of behalf of the next of kin of an employé who be exclusive of all other rights and remedies for had met his death as the result of bis em- injuries to employés or for death resulting from ployer's negligence, were deemed so impor- such injuries ; or to provide that the amount ot tant that the right of action was in 1894 pro- fixed or determinable sum: Provided that all

such compensation for death shall not exceed a tected by a constitutional provision. Section moneys paid by an employer to his employés or 18 of article 1 of the state Constitution pro- their legal representatives, by reason of the en. vided:

actment of any of the laws herein authorized,

shall be held to be a proper charge in the cost “The right of action now existing to recover of operating the business of the employer." damages for injuries resulting in death, shall never be abrogated; and the amount recoverable Thereafter the present Workmen's Comshall not be subject to any statutory limitation." pensation Law was passed. Laws 1914, c. 41.

At the time this amendment was adopted At the times involved in this action section our statutes defined next of kin in whose 10 of the law read in part: behalf such action might be maintained and "Liability for Compensation. Every employer included adult brothers and sisters. Code subject to the provisions of this chapter shall

pay or provide as required by this chapter comCiv. Pro. $8 1903, 1905.

pensation according to the schedules of this ar. In defense of the present Compensation ticle for the disability or death of his employé Law against any charge of unconstitutional resulting from an accidental personal injury interference with the rights thus secured, the course of his employment, without regard to

sustained by the employé arising out of and in it is urged that while this constitutional fault as a cause of such injury, except where provision prohibited the abrogation of a the injury is occasioned by the willful intention "cause of action" arising from the negligent of the injured employé to bring about the in

jury or death of himself or of another, or where killing of an employé, the Legislature was the injury results solely from the intoxication not thereby inhibited from' changing the of the injured employé while on duty." classes of persons in whose behalf as next of Section 11 provided: kin such cause of action might be enforced,

"Alternative Remedy. The liability prescriband that, therefore, the Compensation Law ed by the last preceding section shall be exe may be regarded as merely changing the defi- clusive, except that if an employer fail to secure nition of next of kin who are entitled to re-employés and their dependents as provided in

the payment of compensation for his injured lief in case of death by dropping therefrom section fifty of this chapter, an injured employé, adult brothers and sisters. Amendments in or his legal representative in case death results respect of the persons who should be entitled from the injury, may, at his option, elect to

claim compensation under this chapter, or to to damages which might be collected under maintain an action in the courts for damages the statute which have thus far been unchal-, on account of such injury. lenged in the courts are referred to as sus Section 16, under the title "Death Benetaining this view, and they do perhaps fur fits,” provided that in cases where the injury nish support for it. Thus Laws 1913, c. 756, caused death, the compensation should be provides that the term “next of kin” shall known as a death benefit and should be paymean both the father and the mother in able, first in satisfaction of reasonable funer. certain cases, and Laws 1911, c. 122, exclud- al expenses not exceeding $100 and thereafted the next of kin, e. g., the father, in favor er in the amounts and to the persons therein of the wife or husband in certain cases. In named, including, under the conditions and the view which I take of the later consti. with the rights of priority fixed by the sectutional amendment and of the provisions of tion, a surviving wife, or a dependent husthe Compensation Law adopted in pursuance band and children under the age of 18 years, thereof, it will not be necessary to decide this until they shall reach the age of 18 years; proposition.

dependent parents and grandparents. In 1910 the first Workmen's Compensation Subdivision 4 specially provided that: Law was passed. Laws 1910, c. 674. It was "If the amount payable to surviving wife (or

age of eighteen years shall be less in the age of compensation as an exclusive remedy gregate than sixty-six and two-thirds per centum emphasizes the meaning and force of the for the support of grandchildren or brothers and rule. If an employer fail to secure the pay. sisters under the age of eighteen years, if de- ment of the compensation to his employés pendent upon the deceased at the time of the and their dependents as required by the accident, fifteen per centum of such wages for statute, "an injured employé, or his legal the support of each such person until of the age of eighteen years; and for the support of each representative in case death results parent, or grandparent, of the deceased if de- may

maintain an action in the pendent upon him at the time of the accident, courts for damages.” Section 11. That is, fifteen per centum of such wages during such dependency. But in no case shall the aggregate if the employer fails to comply with the amount payable under this subdivision exceed statute, he is subjected to such an action as the difference between sixty-six and two-thirds the present one as a penalty. per centum of such wages, and the amount pay

This legislation may or may not be conable as hereinbefore provided to surviving wife (or dependent husband) or for the support of demned as ill considered or unjust in its surviving child or children.”

bearing upon the present next of kin. BrothThe constitutional amendment added in ers and sisters as a class and as proper next 1913 overrides all else in the state Consti- of kin to be considered under the Compensatution. "Nothing contained in this Constitu- tion Law were not overlooked. They are tion shall be construed to limit the power provided for under certain conditions in case of the Legislature to enact” (employés com- they are under 18 years of age and dependpensation laws) is the comprehensive lan- ents.

Section 16. The same condition in guage used and this excludes the limitations respect to age is observed in the case of chilof section 18 of article 1 relative to damages dren, those under the age of 18 years being for injuries causing death as well as the limi- entitled to the benefits of the act, those over tations of section 6 of article 1 relative to that age not being entitled thereto. And taking property without due process of law. again, if it be said that the law is defective It permits the Legislature to fix the right to in not going farther and insuring that in a compensation to be paid by an employer for given case the liability of the employer shall death resulting to an employé from injuries not be allowed to lapse because none of the received in the course of his employment and designated beneficiaries survive, although to provide that "the right of such compensa- there are living next of kin, the answer may tion, and the remedy therefor shall be ex- be made in behalf of the Legislature that clusive of all other rights and remedies in the exercise of legislative judgment it ex

for death." It authorizes the Leg. tended the benefit of the act as far as seemed islature to adopt an employé's compensation necessary to accomplish its purpose of prosystem and to define who should be entitled viding compensation for those who had a to relief for damages without any state con- right to rely upon the support of the deceasstitutional limitation whatever.

ed employé. The statute which was adopted in pursu

The conclusions which we draw from an ance of this constitutional amendment clearly examination of the language of the constituprovides that the liability provided shall be tional amendment and of the statute become exclusive of all other rights and remedies ex- irresistible when we consider the conditions cept as in section 11, supra.

and purposes which led to their adoption and We have the provision that:

enactment. While the right to maintain neg"Every employer subject to the provisions of ligence actions to recover damages for the this chapter shall pay or provide

com- injury and death of employés was regarded pensation according to the schedules of this ar- of great importance and in death cases ticle for the disability or death of his employé. protected by the Constitution this method of

Section 10.
The schedules so referred to said:

remedy had generally become economically "If the injury causes death, the compensation unsatisfactory. It resulted, it was widely shall be known as a death benefit and shall be believed, in injustice both to the employer payable" (section 16) in the amount and to the who was sometimes the victim of unjust or persons fixed.

excessive claims and to the employé who had Thus we have the fundamental provision to bear the necessary risk of the business and of liability for the payment of a certain who was often delayed in the enforcement of amount in a case of death which is to be the a just claim and burdened with the expenses compensation therefor and to be distributed of a protracted litigation. The danger was amongst the persons designated. A certain ever present that an employé or his family liability is imposed for death, and that lia- might become dependent upon public support bility exclusive, No other responsibility is because no relief could be given for injuries left which springs from the occurrence upon to employés or for death resulting from such which lability rests—death-and the effect injuries. This old and unsatisfactory system of the compensation as a satisfaction of all of negligence law was the evil to which the other claims is in no way limited or impair- Legislature addressed itself when it enacted ed by the circumstances of the identity of the the Compensation Act of 1910, which was depersons to whom it is paid or because in clared invalid because of constitutional oba given case no one survives to take advan. jections. Ives v. South Buffalo Ry. Co., 201 tage of the statute. The exception to the rule N. Y, 271, 94 N. E. 431, 34 L. R. A. (N. S.)

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