
    William R. Thurston v. E. P. Wilbur Trust Co., as Executor, et al. Matter of the Application of the Guardians of Infant Defendants for Order Directing the Chamberlain of the City of New York to Pay Over Certain Moneys.
    (New York Common Pleas—General Term,
    March, 1894.)
    Where there has been no order of the court as to the investment of moneys deposited with the city chamberlain as the shares of infants in - the proceeds of a sale in partition, but the chamberlain has, under a general permission from the state comptroller, mingled the fund with other moneys and invested them together in securities of large amount, and where it appears that he is prepared at short notice to substitute other moneys on deposit for the fund so invested, there is no permanent investment as required by section 1581 of the Code, and the shares of such infants must be deemed to be still uninvested, and the court has power, under said section, to direct the. same to be paid to their general guardian.
    Appeal from an order denying an ez> porte application, made at Special Term of this court, that the chamberlain of the city of New York be directed to pay over to the guardians of the infant defendants moneys in his hands belonging to them.
    
      W. Morris JRoome, for guardians.
   Daly, Ch. J.

The infants, E. Ooppee Thurston, Joseph Wharton Thurston, William Wharton Thurston and Mary Wharton Thurston, were parties defendant in an action of partition in this court, and by the final judgment' confirming the sale, entered April II, 1893, it was directed that their shares be paid over to their general guardian, if any should be appointed within sixty days, and should have given a bond to be approved by the court within the same period. The share of each infant was $1,610.15.

Within the period specified general guardians for the infants were appointed in Pennsylvania — Joseph Wharton guardian of' the three first-named infants, and Louisa Nina Wharton of the last named. A bond in $60,000 was given by Joseph Wharton and in $20,000 by Louisa Nina Wharton in the Orphans’ Court of Northampton county, Pennsylvania. The bond was never presented to this court for approval. On July fifth, after the sixty days had expired, ancillary letters of guardianship were issued by the surrogate of New York county to the said guardians.

No bond having been presented for approval to the court within the period limited by the judgment, the referee paid the shares of the infants into court, and the money was deposited with the chamberlain of the city of New York. The chamberlain, as appears upon inquiry, disposed of the money in the following manner: He used $5,000 towards the purchase of an $8,000 mortgage, and used $1,000 toward the purchase of an $18,000 mortgage, and retains the balance, $410.79, in cash. An application was afterwards made to the Special Term, upon the affidavit of the guardian ad litem of the infant defendants and of the attorney in Pennsylvania of the general guardians of the infants, for - an order that the infants’ share be paid over by the chamberlain to the said general guardians. The application was referred to the General Term, as the learned judge at Special Term was in doubt as to the power of the court to grant the application.

The Code provides (§ 1581), with respect to the distribution' of the proceeds of sale in partition, that the court may direct the share of an infant to be invested in permanent securities in the name and for the benefit of the infant, or may direct it paid over to his general guardian when he shall have executed a bond to the infant with two sureties approved by the court; or, if any of the moneys shall have been paid to the county treasurer, on proof that such money has remained uninvested in permanent - securities for the space of three months, may direct the same to be paid to the general guardian upon his giving an undertaking, in the amount and with sureties satisfactory to the court, for the faithful execution of his trust.

The court has never directed the share of these infants to be invested as provided by the section of the Code .above referred to, and such investment as the city chamberlain has made was pursuant, as we are informed, to a general permission given him by the comptroller of the state to invest moneys belonging to infants. The comptroller is authorized by the Code (§ 744) to supervise the administration of all funds paid into courts of record, and to prescribe regulations and rules for the care aud disposition thereof, unless the court having jurisdiction over the same shall make different directions by special order pursuant to a subsequent section (747). The last-named section prescribes that each court may direct that money paid into that court, or any security which represents property belonging to any suit or party, may be transferred, invested, reinvested or deposited in any maimer or form that appears to it best for the interest of the owners thereof; but such directions must be embodied in an order or decree of the court, founded upon proper and sufficient evidence, satisfactory to the court, that such disposition is best for the interest of the owners or parties interested therein.

The provisions of sections 744 and 747 are qualified by the provisions of section 1581 when there is question of the disposition of moneys belonging to infants, and the provisions of the latter section will govern in such a case. By that secr tion the investment of such moneys must be in permanent securities in the name and for the benefit of the infant, ,and if such money has remained uninvested in permanent securities for a space of three months, the court may direct the same to be paid to the general guardian of the infants upon his giving the prescribed bond.

No such investment as is contemplated by the Code has been made of the fund in question. The money has been properly, so far as anything appears to the contrary, used by the chamberlain in such a way as to secure, a substantial income. It has been mingled with other funds in big hands in the purchase of different mortgages for large amounts, but, as I am informed, the chamberlain is prepared, at short notice, to substitute other moneys on deposit with him for any particular fund so employed, and thus converting the latter into cash, hold it subject to the disposition of the court. His investment of the moneys of these infants is, therefore, of a temporary and not permanent character.

As no permanent investment in the name ” of the infants, as required by section 1581 of the Code, has so far been made, the share of each must be deemed to be still uninvested and subject to the order of the court upon the application of the general guardians authorized by the said section. The court, therefore, has power to direct such share to be paid over to the general guardian. In thus disposing of the particular case, it must not be considered that we have any doubt of the power of the court to order the transfer by the chamberlain to the general guardian of an infant of any permanent security in which the share of such infant has been invested. Nothing in the Code limits the power of the court over the investments of moneys paid into court. By section 747 of the Code, already cited, each court may direct that money paid into court, or any security which represents property belonging to any suit or party interested therein, may be transferred in any manner or form that appears to it best for the interests of the owners thereof. This provision is general, and there is no reason why it should not apply to moneys belonging to infants. In at least two cases brought to our notice precedent for the exercise of such power is found in orders made in the Supreme Court. Matter of Holland Trust Co., as General Guardian of Lizette Georgi, July 3, 1893; Matter of Petition of Katherina Bescher, June 8, 1892. Although in another case (Flynn v. Lynch, 10 N. Y. L. J. 1372) an order was denied in the exercise of discretion.

In this case we cannot order a transfer of the securities in which the infants’ money is at present tied up, because such security represents, also, an investment of other funds; but, treating the infants’ shares as uninvested, for that reason the court will, upon a proper application at Special Term, make an order under section 1581 for the payment of the infants’ shares to the general guardians of such infants upon' their giving undertakings in an amount and with sureties satisfactory to the court for the faithful execution of their respective trusts.

The application to the Special Term should be in the form of a petition by the general guardians upon notice to the chamberlain, and the proposed undertaking should be presented with the petition. Ah order may be entered accordingly.

Bookstaveb and Bischoff, JJ,, concur.

An application may be made at Special Term in the form prescribed in the opinion and upon giving an undertaking as provided in section 1581 of the Code, upon notice to the chamberlain, for an order that he pay the shares of the infants to their general guardians.  