
    In the Matter of the Judicial Settlement of the Account of Frederic Grant, as Temporary Administrator, etc., of James Grant, Deceased. Frederic Grant, Individually and as Temporary Administrator, etc., of James Grant, Deceased, and Others, Appellants; Annie Grant and Others, Respondents.
    First Department,
    June 4, 1909.
    
    Executors and administrators — accounting by temporary administrator — when accounting stayed pending determination of action brought to determine title to property — appeal — reargument denied — entry of judgment not prerequisite — additional papers not considered — waiver of objections to account — seat in stock exchange is property.
    Where the trustee in bankruptcy of members of an insolvent firm of stock brokers is suing the New York Stock Exchange to recover the proceeds of a seat on the exchange which was transferred to a member of the firm by the temporary administrator of a deceased member who had formerly owned the seat, the administrator being also made defendant, a provision in a surrogate’s decree charging the temporary administrator with the value of the seat should be stricken out and the accounting before the surrogate stayed until the title to the proceeds of the seat is determined in the pending action.
    Under rule 8 of the Appellate Division, first department, a motion for a reargument may he made as soon as a decision is announced without the entry of the order or judgment of the appellate court.
    Where, on the accounting of a temporary administrator, an objection to his failure to account for the interest of a decedent in a partnership was withdrawn, and the only question litigated was as to the ownership of a seat in the Stock Exchange, which had formerly stood in the name of the decedent and was transferred by his administrator, there is a waiver of the failure of the administrator to list the seat in his account.
    Where the accounting of a temporary administrator has been stayed by the Appellate Division and the matter remitted to the surrogate pending the decision of an action brought by third persons to determine the ownership of property transferred by him, the contestants are not entitled to a reargument on an affidavit presenting additional facts showing the results of the pending action. The time to present such proof is on the argument, and the appellate court is under no obligation to receive the same after the decision of an appeal.
    A seat or membership in the Stock Exchange is a property right, notwithstanding the fact that the rules of the exchange do not recognize the ownership of a seat or membership by the estate of a deceased member.
    
      Appeal by Frederic Grant, individually and as administrator, etc., and by the American Surety Company of Mew York from part and by Thomas H. O’Connor from the whole of a decree* of the Surrogate’s Court of Mew York county, entered in* said ¡Surrogate’s Court on the 9th day of October, 1908,
    
      Charles Edward Souther, for the appellant Frederic Grant.
    
      Henry C. Willcox, for the appellant American Surety Company.
    
      Richard O' Gorman, for the appellant Thomas H. O’Connor.
    
      Arthur L. Marvin, for the respondents Annie Grant and others.
    
      
       Decided May 7, 1909, and opinion temporarily withheld from publication by direction of the court. See post, p. 745.— [Rep.
    
   Laughlin, J. :

The question presented for decision on this appeal is whether the learned .surrogate Was right in surcharging" the account of thei temporary administrator'with $18,000 and interest thereon from the 11th day of May, 1895, as the amount received, or that should have been received, by him on the transfer to Charles F. Grant of. a seat in the Mew York Stock Exchange, which stood'in the name of the decedent. One of the contentions of the appellants is that the seat did not belong to the decedent, but was owned by a firm of. which lie was a member,, and that, therefore, the temporary-administrator is under no obligation to account' therefor. The decedendied on the 22d day of April, 1895, leaving a last will and tes tat ment. The probate of the will was contested, which delayed the issue of letters, testamentary until the 30th-day of Movember, 1895, when they were issued to Frederic Grant, a brother of-the testator, to whom the temporary letters had been issued. The decedent was a member of the firm of Grant Brothers,, composed of himself and' Frederic, his brother, and Frederic’s son, Charles F. Grant.', They conducted the business of stockbrokers, and were represented on the floor of the exchange by the decedent, and had- been- since ‘the formation of the firm ih 1891. Prior to that time the firm* had been composed of the two brothers only. Since 1877 the decedent was also the representative of the former firm on the floor of' the exchange, lr appears from the evidence that the Stock Exchange was organized in 1869 by the consolidation of the government (or gold) board of stockbrokers and the open board of stockbrokers and the former New York Stock Exchange. The decedent was a member of the gold board, and his brother Frederic of the open board, at the time of the consolidation. There is evidence tending to show that each of them owned a seat in the New York Stock Exchange. after the consolidation; and there is a conflict of evidence on the question as to whether the seat which stood in the name of the decedent at the time of his death was the one which he originally owned or whether it was the one owned by his brother Frederic; but the records of the Stock Exchange show that the decedent- lias been a member of the Stock Exchange ever since it was organized, and it does not appear what became of the seat which his brother Frederic owned therein.

The evidence upon which the question as to whether this seat was a partnership asset or the individual property of the decedent depends is quite unsatisfactory, owing to the fact that the partnership agreement evidently was not in writing and to the disqualification of the surviving partners to testify ; but it would seem that further evidence might have been given. It does appear, however, that the profits of the firm consisted of charges or commissions on the purchases and sales of stock made on the Stock Exchange for the firm by" the decedent, and interest on loans to customers ; that the commissions were not received by the decedent, but by the firm, and the firm paid the assessments levied by the Stock Exchange against the members upon the death of a fellow-member, and such assessments were charged to the expense account of the firm. It appears that dues were paid to the New York Stock Exchange on account of this seat from the 1st day of January, 1877, to the 1st day of May, 1895, aggregating $3,000. It does not clearly appear whether there were dues in addition to the assessments upon the death of members, nor does it clearly appear whether the $3,000 paid to the New York Stock Exchange, said to have -been paid for dues, embraced the assessments levied on account of the death of members. If there were dues, as distinguished from assessments in this regard, it does not appear that the firm paid them. If the evidence be sufficient to warrant an inference one way or the other, I should say that it is to be inferred that the firm paid all charges made on account of this seat during its existence. There is other evidence tending to show that the seat was regarded b'y the surviving members of the firm, after the death of the decedent, as a firm asset, but the foregoing is tlie only material evidence-bearing on the question as to whether it belonged to the decedent or to the firm,. This evidence, I think, tends to-show that the Seat was owned by the firm, but it is, not very satisfactory and ;is far from conclusive on that subject, and is scarcely Sufficient upon which to predicate an adjudicaton one way or the- other,, especially in view of tlie fact that firms are not admitted to membership in the ¡Stock Exchange, and'are customarily represented by one of their members who doubtless frequently Contributes his seat as his share of the capital, and doubtless often the seat is purchased by the firm in the name of one of its members.

The Stock Exchange recognizes the survivorship of the- right to a seat therein after the death of a member to the extent that it is provided by rules that the seat may be sold by the committee on admissions and the proceeds of the sale shall be applied in the first-instance to the payment of obligations, if any, owing by tlie decedent to fellow-members of the exchange, and tl'ie surplus, if any, shall be paid! to the personal representatives of the -decedent, and evidently in tlie sale of the seat it reserves -the right to pass upon the membership of tlie purchaser. The decedent owed no- obligations to his fellow-members of the exchange,, and the Stock Exchange, therefore, did -not proceed to sell the seat. The surviving members of the firm, claiming the seat as a firm asset, were desirous of having one of their members elected, and of having the seat transferred to his name by the Stock Exchange. It Was evident, however, that, under the rules of the Stock Exchange, this .could not be done without a receipt by the administrator of the decedent, showing a sale and transfer of the seat -by him and the receipt of the full consideration, the object of which was to have no liens -upon dr claim against the seat in the name of the new member: The issuance of letters testamentary having been delayed as. stated,. Frederic Grant, on the advice of counsel, presented a. petition to the Surrogate’s Court for his appointment as temporary administrator for the purpose of executing a receipt that would enable the firm to have the seat transferred upon- the books of the exchange to the name of li-is sou, who was the other member -of -the firm; In his. petition, these facts were set forth, and it was stated that the- seat was an asset of the firm, but stood in- the name of the decedent, and that the sole purpose of having temporary letters issued was to accomplish the end desired.. • Temporary-letters were -accordingly issued, and the American Surety Company became surety for the temporary administrator. The temporary administrator, under date of May 11, 1895, executed a receipt, reciting that he had received from Charles F. Grant the sum of one dollar and. other Araluable considerations, “ being the amount in full payment for the transfer of the membership in the Mew York Stock Exchange of said James Grant, deceased,, to said Charles F. Grant, in consideration of Avhich I hereby relinquish all the right, title and interest of said James Grant, deceased, as a member of the Mew York Stock .Exchange.” This was deemed unsatisfactory by the secretary of the exchange, who f urnished the usual blank in such cases,,and thereupon the temt porary administrator filled out the blank and executed and delivered it to the exchange in the following form, to Avit:

“New York, May 11th, 1895.

“I, Frederic Grant, as temporary administrator of the- estate of ■ James- Grant, deceased, hereby acknowledge the receipt 'from Charles F. Grant of the sum of Eighteen thousand dollars, being the amount in full payment for the transfer of the membership in the Mew York Stock Exchange of said Grant, deceased, to said Charles F. Grant, in consideration of which I hereby relinquish all the right, title and interest of said James Grant as a member of the Mew York Stock Exchange. '

“(Seal). $18,000. (Signed) FREDERIC GRANT,

as Temporary administrator of the estate of James Grant, deceased.

“ Witness J. C. Burns—Correct—William L. Bull, Chairman.”

Mo part of the $18,000 ivas received by the temporary administrator. It appears, however, that the firm, acting under the advice of counsel — the significance of which it is difficult to appreciate — drew a check to the order of Charles F. Grant upon its own bank account for $18,000, which, according to the testimony of Frederic Grant, he indorsed, but, according to his own testimony, he did not, and it ivas then stamped for deposit by the firm and delivered to the bank, a more bookkeeping entry being made concerning the same, ño funds having changed hands. The temporary administrator received nO authority from the court to sell the seat, and he executed no hill of sale thereof. Assuming that the seat belonged to the decedent, the temporary administrator, at most* by his acts, permitted the seat to be transferred on the books of the exchange to the name of his son, who did not pay therefor, nor did the firm. Either the son or the firm, whichever was the purchaser, would still remain liable-to the estate of the decedent for the value of the seat* if it belonged to such estate. It appears that on the 1st day of January, 1897, the surviving members of the firm took one Yan Sickle into partnership- with them, and thereafter the business was still conducted in the name of Grant Brothers* Until the- 3d day of December, 190.0, when proceedings in bankruptcy were instituted'-against them, upon which, on-the 18th day of March* 1901, both the firm and the individual members thereof were, duly adjudged bankrupts and the same trustee Was appointed, both for the firm and for the individual members. After the bankruptcy of Charles E. Grant and on the 21st of July, 1904, the Stock Exchange sold. this seat and realized On the sale tlm sum of $59,68.5 over and abové all charges and payments due the Stock Exchange. That fund was claimed .by the.trustee in bankruptcy, but a claim therefor ■having been made against the exchange by some of the parties interested in the estáte of the decedent, the Stock Exchange refused to pay it over to the-trustee and he commenced an action in the Supreme Court against it to recover the same, whereupon it inter-pleaded the appellant Grant, both as temporary administrator and as executor.' That action is still pending undetermined. It is evident that it can be authoritatively determined in that action whether this seat belonged to the copartnership, represented: by the- plaintiff, the trustee in bankruptcy, or whether it belonged to the estate of the decedent represented by his temporary administrator and by his executor. The right of the temporary administrator to collect assets doubtless terminated upon the appointment of the exécutof, and if there shall be a recovery in the action in favor of the estate1 of the decedent, the fund will doubtless be awarded to the executor! In these circumstance's it would seem that the temporary administrator either, should be relieved from accounting for this fund, which he never received, or that the. accounting proceedings should be postponed until the final determination of that action. Of course, if, by the action of the temporary administrator with respect to this seat, the estate of the decedent has been prejudiced, he should be held to account and so should his sureties within their contract obligations. While it seems improbable that the estate can be prejudiced with this fund in court, yet we cannot foresee the outcome of the litigation between the trustee and the temporary administrator and executor, with that degree of certainty which warrants us at this time in saying that the estate has not been prejudiced by the conduct of the temporary administrator in executing the receipt in his official capacity, without which the seat would hot have passed to Charles F. Grant.

I am, therefore, of opinion that the decree should be modified, with one bill of costs to appellants, by striking out the provision thereof surcharging the account of the temporary administrator on account of the sale of the seat in the Stock Exchange and remitting the matter to the Surrogate’s Court for a further hearing, and that further proceedings on the accounting be stayed until the final determination of the action pending between the trustee and the temporary administrator and executor, with leave to either party to bring on the accounting after such final determination of the issues in said action.

Patterson, P. J., Ingraham, McLaughlin and Clarke, JJ.,. concurred.

Decree modified as stated in opinion, with one bill of costs to the appellants. Settle order on notice.

Upon a motion for reargument an opinion was handed down June 4, 1909, with appearances as follows:

Charles Edward Souther, Clarence Edwards and Richard O’Gorman, for the appellants.

Arthur L. Marvin, for the respondent Annie Grant and others.

William Lloyd Kitchel, for the respondent Irey and others.

Laughlin, J.:

The appeals herein were submitted on the 22d day of April, 1909, and an opinion of the court deciding the same was handed down on the 7th day of May, 1909. (132 App. Div. 739.) The'determination of the surrogate was reversed, in part, by a modification of the decree, ih part, and. directing a rehearing thereon, with- a stay of proceedings. Therespondents.move for a reargument, claiming that the decision of the court is inconsistent with the propositions of law and authorities, which they concede were notvpresented for the consideration of the court,on the. appeal and upon an affidavit shewing the.final determination'of ,an action, which the record showed.to have been brought and indicated was still pending. The appellants contend that the motion cannot be heard, for the'reason that the order; upon our decision, is not entered. Rule 8 of the rules of the Appellate Division, First Department, authorizes a motion for a. reargument after a decision is announced, and does not contemplate or require, the prior entry of the order or judgment of this court.. The propositions of law which the learned .counsel for the respondents now bring to the attention of the court were, so far as the sanie are sustained by authority, fully considered by the court, although not contained in the briefs. - ;

We were of opinion that there should be a. rehearing on the: facts with respect to, the ownership: of the. seat or membership in the Stock Exchange, and we assigned as an additional ground the pendency of the action shown by the record to have been brought to determine the ownership of the fund' in court which was the proceeds of the sale of the Stock Exchange membership or seat in question. On the point made1 on the motion for reargument, to tlie-effect that the court overlooked the principie by which it is the duty of an administrator to state in his accounts any and all property which-comes to his knowledge, and the O.ode provisions.and decisions of the courts to. that effect, and that “ This principle, if applied, to the facts of this case, would have required the administrator to list in liis accounts the interest of James .Grant and the partnership of Grant Brothers, which interest, upon the testimony "of the appellants, was twenty-five per cent,” it .is sufficient to observe that on the hearing on the first reference the counsel who now makes this claim expressly withdrew the objection which he had filed to the-account of the temporary administrator for his failure to account for the-interest of." the. decedent, in the -copartnership, and expressly confined Ms objection, arid stated that he-was acting in this -regard fox all óf the contestants, to the point that the temporary administrator had wrongfully sold this seat and had failed to account therefor. The last hearing was before the same referee on an order to take further evidence on the single point as to the ownership of the seat in the Stock Exchange and, therefore, the withdrawal of the other objections stands. We are of opinion that the appeals were properly decided by the original opinion on the record as presented, and that the respondents are not at liberty to present facts tending to show the subsequent history and the result of the litigation, the pendency of which, as disclosed by the record, was given material consideration by this court. Buie 8, above referred to, enumerates the papers upon which a motion for reargument may be made, and it does not authorize the presentation of affidavits. The affidavit is not record .evidence, and even if the record of the judgment in the action to which reference is made had been presented on a motion for a reargument, that would not have availed the respondents. It is true that the court may, in a proper case, receive record evidence which is unimpeachable, to sustain a judgment or decree, but the time to present such proof is on the argument, and the court is under no obligation to receive the same after a decision of the appeal. Assuming that the action by the trustee in bankruptcy of the firm against the executor and temporary administrator of the estate of the decedent, to recover the proceeds of the sale of the seat in question, which it appears were paid into court by the- Hew York Stock Exchange, has been finally decided in favor of the trustee by default, that will, of course, be no adjudication upon the merits as to the ownership of the seat, and will not even be presumptive evidence in favor of the temporary administrator that it belonged to the firm, but even if the action had been contested, the decision, of course, would at most be presumptive evidence in favor of the administrator on the accounting, the same as if, after he found a purchaser for the seat, the firm claimed the proceeds of the sale which he made, and the fund was paid into court to have their respective rights thereto determined, but if he were guilty of fraud or collusion with respect thereto or failed to present all of the material facts and properly urge them for an adjudication by the court, the judgment would cease to be even presumptive evidence in his favor as against persons interested in the- estate. (Matter of Watson, 101 App. Div. 550 and cases cited ; S. C., 115 id. 310; affd., 187 N. Y. 541. See, also; Nicholas v. Lord, 118 App. Div. 800; S. C., 121 id. 924; affd., 193 N. Y. 388.) This court did not, by the original opinion, make any decision on the* question as to the effect of the adjudication in that action upon the issues in this proceeding. It appeared by the record that the temporary administrator was not authorized to sell this seat or to dispose of any of the property of the estate, but merely to collect assets, and that he did not in form attempt to execute a bill of sale-or otherwise sell the seat,' excepting to give a receipt erroneously reciting the receipt of $18,000 in consideration of a transfer of the membership to his son, one of the surviving members of the firm. . A seat or membership in the Stock Exchange is a valuable property right notwithstanding the fact that the rules of the Exchange do not recognize ownership of the seat or membership by the estate of & deceased member,, excepting as it is.provided by the rules that in such case the membership shall be disposed of by the committee on admissions,. and after paying any obligations of the member to the Exchange or to Ins fellow-merm bers, the proceeds shall be paid to his personal representatives. (Matter of Hellman, 174 N. Y. 254, 257; Wrede v. Gilley, 132 App. Div. 293.) By virtue of a paper, therefore, executed by the temporary administrator, which as between the parties was void for want of consideration, a surviving member of the firm succeeded to* the rights and privileges of this membership in the Exchange, commonly called a seat ” in the Exchange, and that seat had been sold by the. Exchange and the proceeds had been, brought, into .the Supreme Court to ■ await the determination of conflicting claims' made in behalf of the* trustee, both of the firm and of the surviving,member, who succeeded to the ‘decedent’s membership in the exchange and the estate of the decedent. It was,apparent, that in that action the question of ownership of this* seat or /membership, as between the firm and the estate of the decedent, could have* been authoritatively determined for, if the right thereto had. been contested upon the merits and all of the available evidence had1 been presented in good faith, there appears to be* no reason why the adjudication should not have been accepted by the surrogate as decisive of the proposition that the seat wasa firm.asset and did not belong to the decedent, and that the temporary administrator was not properly accountable therefor any more than if, after he had agreed with a purchaser on a sale thereof if authorized to sell it by the Surrogate’s Court, it had been authoritatively decided that the firm and not the temporary administrator was entitled thereto or if it had been recovered from him by the firm. Of course, the contestants and others interested in the estate were still at liberty, even after final judgment in that action if adverse to their interests, to contest the temporary administrator’s claim to be relieved of liability for the value of the seat in the Stock Exchange upon the ground that he was guilty of collusion or fraud in the defense of the action, or that he failed to present all of the material evidence available and to urge the same upon the consideration of the court.

The direction in the original opinion for a stay of proceedings until a final determination of that action cannot prejudice the respondents if, as they claim, the action has already been finally determined, for they will be at liberty to move the court to proceed with the rehearing without delay.

It follows, therefore, .that the motion for reargument should be denied, with ten dollars costs.

Patterson, P. J., Ingraham, McLaughlin and Clarke, JJ., concurred.

Motion denied, with ten dollars costs.  