the residuary legatees were estopped from asserting any personal liability against thew or either of them in case of a loss. 2 Rul ing Case Law, p. 142. Their liability to es tablish the trusts provided by the will were not affected by their acts pursuant to the request of such residuary legatees. [1] While the primary duty of an executor | chased were at least presumptively held by 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 gifts and bequests provided by the will, it may be necessary, or at least prudent in many cases, to hold all of the assets of the estate until a distribution thereof pursuant to a decree upon a judicial accounting, and it may also be desirable or even the duty of an executor to invest uninvested funds in his The testator did not in express terms propossession as executor during such time, and vide that the trusts should be set apart to 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 securi ments, 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 Case Law, 143. It is not therefore entirely correct to say that an executor as such has no authority to make investments. sums provided by the testator to be paid in accordance with the sixth and seventh paragraphs of the will, respectively. The trust company doubtless could have insisted that the executors deliver to it either cash or securities owned by the testator at the time of his death or such securities as are named in the will or as are prescribed by section 111 of the Decedent Estate Law. The only express limitation on the securities to be set apart for the trust funds is that they, with the "sum of money" included therewith, shall be "of value in their (executors') judgment amply sufficient to provide" the required income. The executors were, of course, bound to act in good faith in exercising their judgment. It appears by the twenty-third paragraph of the will that the testator appreciated that the executors, except for the authority therein given, might be required in the perform ance of their duty to sell, during the continuance of their duties as executors, some of the stocks, bonds, and other securities held by him at the time of his death. That knowledge by the testator necessarily included an appreciation of the possibility that the proceeds of the bonds and stocks and other securities so held might have to be reinvested. Even the provision in the will relating to 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. Supp. 372, affirmed 117 N. Y. 354, 22 N. E. 1044. Our statute provides in detail in what securities an executor, administrator, trustee, or other person holding trust funds may invest. Decedent Estate Law (Cons. Laws, c. 13) § 111. There can be no reasonable doubt that, if the trust company accepted the stocks as stated knowing that some of them were own were not owned by the testator in his lifetime, it would have so accepted them as investments for the trust funds and become responsible for them as investments made by it as of the time of the acceptance of the trust funds respectively. [2] If an executor disregards the provi-ed by the testator in his lifetime and some sions of the will or a rule of law relating to investments, he takes the risk of any loss that may result, without the right to any profit that he may make by reason of such investment. Holden v. N. Y. & Erie Bank, 72 N. Y. 286; Adair v. Brimmer, 74 N. Y. 539. [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 request of the residuary legatees, and they retained in their hands as executors sufficient of cash and securities held by the testator at the time of his death to pay all of the gifts provided by the will, other than those to residuary legatees. In doing so under the circumstances disclosed, the securities thus pur sixth and seventh paragraphs of the will should be set apart, concluded to submit to the trust company the stocks mentioned for its approval and acceptance. It is not claimed that the executors intentionally and in bad faith refrained from telling the appellant that part of the investments proposed were not owned by the testator at the time of his for the Metropolitan Street Railroad Company and the Baltimore & Ohio Railroad Company stocks were dated subsequent to the death of the testator and were in the individual name of one of the executors. It also appears that there had been a proceeding to determine the amount of the transfer tax to which the trust company was a party, and the papers in that proceed death. The appellant does claim, however, his name unchanged, while the certificates that it was the duty of the executors to make such statement to it, and that because they did not make such statement the trust funds should be deemed never to have been formed, and the court should now direct that an amount be taken from the residuary estate to make good the loss occasioned by the depreciation in the Metropolitan Street Railroad Company and the Baltimore & Ohio Railroad Company stocks. The whole claiming showed that the testator did not own any of the appellant depends upon its assertion that it had a right, as a matter of law, to assume that all stocks submitted to it by the executors to make up the trust funds were stocks owned by the testator at the time of his death. The trust company in its brief says: "This is the crux of the whole decision as to the liability of the trust company. The court will find upon reflection and analysis that every thing else in the case bearing upon the trust company's liability carries back to this one point." stock in the Metropolitan Street Railway Company or in the Baltimore & Ohio Railroad Company at the time of his death. The trust company knew, or could have known, that the executors had made investments from the cash remaining in their hands or from the proceeds of investments owned by the testator at the time of his death, or even that, as the estate was solvent, they had made a change of investments in obedience to the wishes of those interested 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 accepted and receipted for by the trustee, were of a market value sufficient with the other stocks to constitute a fund as directed by the testator, and such stocks continued of such or of greater value for some time thereafter, and could have been sold by the trustee even at a material profit over the market value thereof at the time when they were received by it. There was no possible purpose, therefore, in the executors in attempting to deceive the trust company or to induce it to take the stocks in setting apart the trust funds. It is not to be assumed that the trust company with all its experience was unwittingly and innocently deceived into accepting the stocks in question. It is rather to be inferred that the trust company did not at the time of the acceptance of the trust funds consider whether the stocks in question had been owned by the testator in his lifetime. So far as there was presented to it any facts affecting the question whether the Metropolitan Street Railway Company and the Baltimore & Ohio Railroad Company stocks were purchased before or after the testator's death, such facts tended to show that they were subsequently purchased because the certificates presented to it for the Milwaukee Electric Railway & Light Company stocks which were owned by the tes were not owned by the testator at the time of his death, did not amount to a fraudulent concealment by the executors, as the trustee had ample opportunity to make any investigation thereof that it deemed or should have deemed advisable. Long v. Warren, 68 N. Y. 426. Not a question was asked in behalf of the trust company in regard to the investments when it was given an opportunity in advance of the delivery of the stocks to express its approval or disapproval of the securities proposed to make up the trust funds. It doubtless could then have had the trust funds set apart in cash if a suggestion to that effect had been made. Instead of that, the appellant expressed itself as satisfied with setting apart the trust funds as proposed. If the appellant assumed that its liability was restricted because of the provisions of the will that have been quoted in regard to holding the stocks owed by the testator at the time of his death, it was an assumption without inquiry or investigation, and the trial court has found as a fact that such assumption was unwarranted. It is said by the Appellate Division herein that: "An inquiry would have been a simple act of prudence required by the measure of care owed by the trustee in the discharge of its duties." So it seems to us. In a solvent estate like the one now under consideration it should not be assumed that no new invest 22 Hun, 270. It was not the care of an ordinarily prudent man to continue to hold the investments without inquiry or further investigation. Rush v. Steele, 93 Va. 526, 25 S. E. 604. of the article for disability or death of his employé, etc. Section 11 provides that the liashall be exclusive, and section 16, under the tibility prescribed by the last preceding section tle "Death Benefits," provides that the compensation shall be payable to a surviving wife, a dependent husband and children under the age making no provision for adult brothers and sisof 18, and dependent parents and grandparents, ters. Held, that such brothers and sisters of a servant killed in service, not entitled to compensation for his death under the act, had no right of action, under Code Civ. Proc. §§ 1902-1908, against the employer for damages for the death. [Ed. Note.-For other cases, see Master and Servant, Dec. Dig. 351.] 2. MASTER AND SERVANT 358-CONTRACT OF EMPLOYMENT INCLUSION OF WORKMEN'S COMPENSATION LAW. The stocks were, at the time they were received by the trust company, of a market value sufficient to produce an income ample to pay the amounts to be paid to the testator's daughter and sister as provided by the will. That was the important consideration. The trust company from that time became answerable for the conduct of the funds. Matter of Wotton, 59 App. Div. 584, 69 N. Y. Supp. 753, affirmed 167 N. Y. 629, 60 N. E. 1123. The trust company was not In the absence of something indicating the bound to retain them. The loss resulted 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 determined to retain the securities in the trust funds. We agree with the courts below that the trust company was not entitled as a matter of law to assume that the stocks delivered to it were owned by the testator at the time of his death. [7] The court has found against the appellant on all questions of fact. We have quoted the most important of them, and there is some evidence to sustain each of such findings. The proposed findings to the contrary which the court refused were not established by uncontradicted evidence. We are bound by findings when supported by some evidence. Ostrom v. Greene, 161 N. Y. 353, 55 N. E. 919; Costello v. Costello, 209 N. Y. 252, 103 N. E. 148. The findings of fact so supported by evidence require an affirmance of the judgment, with costs. HISCOCK, COLLIN, CUDDEBACK, HOGAN, and POUND, JJ., concur. WILLARD BARTLETT, C. J., not sitting. Judgment affirmed. (219 N. Y. 469) contract of employment of an engineering company's servant. [Ed. Note.-For other cases, see Master and Servant, Dec. Dig. 358.] Willard Bartlett, C. J., and Chase, J., dissenting. Appeal from Supreme Court, Appellate Division, Fourth Department. Action by Margaret Shanahan, as administratrix, etc., of Michael Shanahan, deceased, against the Monarch Engineering Company. From an order of the Appellate Division (172 App. Div. 221, 159 N. Y. Supp. 257), affirming an interlocutory judgment made by the Supreme Court sustaining a demurrer to an answer interposed by defendant, defendant appeals. Order reversed, and questions certified answered in the negative. lant. W. J. Wetherbee, of Buffalo, for reGeorge P. Keating, of Buffalo, for appelspondent. POUND, J. A demurrer to one of the defenses in this action as insufficient has been sustained. The pleadings upon which this decision has been based disclose the following facts: This action is brought under the provisions of sections 1902-1908 of the Code of Civil Procedure to recover damages for the benefit of the next of kin of Shanahan, 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 SHANAHAN v. MONARCH ENGINEER- (Court of Appeals of New York. Dec. 28, 1916.) 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 Compensation Law applied and would have recover damages for injuries resulting in death shall never be abrogated and the amount recov- 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 sum. Workmen's Compensation Law (Consol. who are not entitled to compensation under Laws, c. 67; Laws 1914, c. 41), 8 10, provides the act. The answer which has been held inthat every subscribing employer shall pay or provide compensation according to the schedules sufficient set up the Compensation Law as a For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes far as material it reads as follows: bar to this action, and thereby the question |ed 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. rights or remedies, even though it happens in a particular case that the decedent has left no widow or next of kin who are entitled to benefits under the act, but has left next of kin not entitled to such benefits. [1] The statutory provisions which for many years before the enactment of the Workmen's Compensation Law permitted the present form of action to be maintained against an employer to recover damages on behalf of the next of kin of an employé who had met his death as the result of his employer's negligence, were deemed so important that the right of action was in 1894 protected by a constitutional provision. Section 18 of article 1 of the state Constitution provided: "The right of action now existing to recover damages for injuries resulting in death, shall never be abrogated; and the amount recoverable shall not be subject to any statutory limitation." At the time this amendment was adopted our statutes defined next of kin in whose behalf such action might be maintained and included adult brothers and sisters. Code Civ. Pro. §§ 1903, 1905. So "Nothing contained in this Constitution shall be construed to limit the power of the Legislalives, health, or safety of employés; or for the ture to enact laws for the protection of the payment, either by employers, or by employers and employés or otherwise, either directly or through a state or other system of insurance or otherwise, of compensation for injuries to employés or for death of employés resulting from such injuries without regard to fault as a cause thereof, * * * or to provide that the right of be exclusive of all other rights and remedies for such compensation, and the remedy therefor shall injuries to employés or for death resulting from such injuries; or to provide that the amount of fixed or determinable sum: such compensation for death shall not exceed a Provided that all moneys paid by an employer to his employés or their legal representatives, by reason of the enactment of any of the laws herein authorized, shall be held to be a proper charge in the cost of operating the business of the employer." Thereafter the present Workmen's Compensation Law was passed. Laws 1914, c. 41. At the times involved in this action section 10 of the law read in part: "Liability for Compensation. Every employer subject to the provisions of this chapter shall pay or provide as required by this chapter compensation according to the schedules of this ar ticle for the disability or death of his employé resulting from an accidental personal injury the course of his employment, without regard to sustained by the employé arising out of and in fault as a cause of such injury, except where the injury is occasioned by the willful intention jury or death of himself or of another, or where of the injured employé to bring about the inthe injury results solely from the intoxication of the injured employé while on duty." Section 11 provided: "Alternative Remedy. The liability prescrib ed by the last preceding section shall be exclusive, except that if an employer fail to secure employés and their dependents as provided in the payment of compensation for his injured section fifty of this chapter, an injured employé, or his legal representative in case death results from the injury, may, at his option, elect to claim compensation under this chapter, or to maintain an action in the courts for damages In defense of the present Compensation Law against any charge of unconstitutional interference with the rights thus secured, it is urged that while this constitutional provision prohibited the abrogation of a "cause of action" arising from the negligent killing of an employé, the Legislature was not thereby inhibited from changing the classes of persons in whose behalf as next of kin such cause of action might be enforced, and that, therefore, the Compensation Law may be regarded as merely changing the definition of next of kin who are entitled to relief in case of death by dropping therefrom adult brothers and sisters. Amendments in respect of the persons who should be entitled to damages which might be collected under 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, provides that the term "next of kin" shall mean both the father and the mother in certain cases, and Laws 1911, c. 122, excluded the next of kin, e. g., the father, in favor of the wife or husband in certain cases. In the view which I take of the later constitutional amendment and of the provisions of the Compensation Law adopted in pursuance thereof, it will not be necessary to decide this proposition. caused death, the compensation should be known as a death benefit and should be payable, first in satisfaction of reasonable funeral expenses not exceeding $100 and thereafter in the amounts and to the persons therein named, including, under the conditions and with the rights of priority fixed by the section, a surviving wife, or a dependent husband and children under the age of 18 years, until they shall reach the age of 18 years; 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 held to be unconstitutional because it impos-dependent husband) and to children under the age of eighteen years shall be less in the ag- of compensation as That is, courts for damages." Section 11. This legislation may or may not be condemned as ill considered or unjust in its 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. tion shall be construed to limit the power provided for under certain conditions in case They are 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. taking property without due process of law. again, if it be said that the law is defective And 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 exfor 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 pursuance of this constitutional amendment clearly provides that the liability provided shall be exclusive of all other rights and remedies except as in section 11, supra. We have the provision that: "Every employer subject to the provisions of this chapter shall pay or provide pensation according to the schedules of this arcomticle for the disability or death of his employé. 99 Section 10. * The schedules so referred to said: "If the injury causes death, the compensation shall be known as a death benefit and shall be payable" (section 16) in the amount and to the persons fixed. The conclusions which we draw from an examination of the language of the constitutional amendment and of the statute become irresistible when we consider the conditions and purposes which led to their adoption and enactment. While the right to maintain negligence actions to recover damages for the of great importance and in death cases injury and death of employés was regarded protected by the Constitution this method of remedy had generally become economically unsatisfactory. It resulted, it was widely believed, in injustice both to the employer who was sometimes the victim of unjust or Thus we have the fundamental provision to bear the necessary risk of the business and excessive claims and to the employé who had 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 liability 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.) |