
    New York County.
    Hon. RASTUS S. RANSOM, Surrogate.
    January, 1890.
    Matter of Topping.
    
      In the matter of the estate of Henry Foster Topping, deceased.
    
    Upon an application for permission to sell real estate to pay the debts of the decedent, a grantee of an heir can show in opposition thereto that there were other assets besides those contained in the inventory available for the payment of the decedent’s debts, though the inventory was filed by the heir who was his grantor.
    While ordinarily before a direction is given for the sale of real estate to pay the debts of a decedent, all the personal property of decedent should be applied, to the payment of such debts, yet the court can direct a sale in a proper case where all the personal property has not been so applied or where a part of the debts consists of demands which are doubtful or in litigation. But reasonable diligence to effect the conversion of the assets into money and their application to the payment of the debts is necessary in such case.
    Where it is shown that the administratrix who applies for permission to sell the real estate of decedent for such purpose has made no attempt to collect the proceeds of a sale of some of the decedent’s personal property by a former administrator, it not being shown that such an attempt would have been futile, reasonable diligence is not exercised by the administratrix, and her application to sell the real estate will be denied.
    A Surrogate obtains jurisdiction to order a sale of the real estate of a decedent for the payment of debts if a petition is filed therefor within three years from the granting of letters of administration, although the citation is not returnable until after such period.
    Motion to confirm the report of a referee in proceedings to sell real estate belonging to the estate of Henry Foster Topping deceased, for the payment of debts.
    The facts appear in the opinion.
    
      R. H. Underhill, for petitioner.
    
    Daniel Finn, for contestant.
    
   The Surrogate.

The present is an application by the administratrix of the decedent for the sale of his real estate for the payment of his debts. The grantee of decedent’s heir contests the application. The referee to whom the issues were referred has filed his report. The petitioner excepts to the admission by the referee, against her objection, of certain evidence adduced to show the existence of assets in addition to those mentioned in the inventory, which came to the hands of the administrator whom petitioner succeeded. Such administrator was the only heir of the decedent, and was the grantor of the real estate in question. The contestant is the grantee. The latter has filed exceptions to the findings of the referee. These involve the following questions:

First — Whether the referee was right in finding, that the debts mentioned in his first finding were established as debts against decedent’s estate;
Second — Whether there was sufficient personal estate available for their payment.

The evidence whose admission is the subject of the administratrix’s exception, was properly received. It was entirely competent for the contestant to show that there were other assets besides those contained in the inventory available for the payment of the debts sought to be collected from his property, despite, the fact that the inventory was filed by his grantor.

The exception of the contestant with respect to the holding of the referee in his first conclusion of law as to the debts established against the estate, is overruled. The evidence sustains the conclusion. The referee finds and the evidence shows, that in addition to the property inventoried there was certain other personal property left by the decedent which was sold by the former administrator for $646. There is nothing to show that this amount was ever applied to the payment of decedent’s debts, or that diligent effort was made to collect it or effect such application. For aught that appears it is readily collectible. Certain stock which was inventoried as valueless was sold by the former administrator for $1,500. Of this $250 were, it seems, allowed as a commission upon the sale, and $950 paid to the attorney of the administrator for collecting certain notes received as the purchase price of the stock and for rendering other services of a trifling character to the administrator. It is not entirely clear from,, the evidence that this payment to the attorney was not in part for other services than those performed for him as administrator.

Ordinarily, it is necessary, before a direction is given for a sale such as is sought to be effected here, that all the personal estate should be first applied to the payment of the debts. Corwin v. Merritt, 3 Barb. 346; Moore v. Moore, 14 Barb. 29-30; Forbes v. Halsey, 26 N. Y. 64; Tucker v. Tucker, 4 Abb. App. Dec. 433-4.

It is, however, entirely competent for the court in a proper case to direct a sale where all the personal property has not been so applied, or where a part of the debts consists of demands which are doubtful or are in litigation. But reasonable diligence to effect the conversion of the assets into money, and their application to the payment of the debts, is, in such case, necessary. Farrington v. King, 1 Bradf. 185; Skidmore v. Romaine, 2 Bradf. 122; Moore v. Moore, 14 Barb. 29-30; Bridge v. Swain, 3 Redf. 490; Code of Civil Procedure, section 2759, subd. 5.

I am not satisfied, upon the evidence submitted, that such diligence has been exhibited by the administratrix. Unless the petitioner can show that an attempt to collect from her predecessor any of the assets for which he is liable, would be futile, the attempt to recover such assets should be made before an order directing the sale of the real estate should be granted.

This matter may, if petitioner elect, be referred back to the referee for proof as to the petitioner’s ability to collect the assets, and as to such efforts as she may have already made for the purpose. In case she should not so elect, an accounting to establish the liability of the former administrator to the estate and the ability of the petitioner to realize upon it will be necessary. In case the course last indicated is adopted, this application will be suspended to await the result. The conclusion which I have reached necessitates the overruling of the referee’s second and third conclusions of law.

It is claimed that this proceeding was not commenced within three years since the granting of letters of administration to the former administrator, and that therefore the court was without jurisdiction to entertain it. The letters were issued November 23, 1885. The petition was filed herein November 21st, 1888. The citation, although returnable after the lapse of three years since the issuance of the letters, was issued at the same time the petition was filed. The petition having been filed within the three years, the court acquired jurisdiction of the proceeding. (Section 2750 Code Civil Procedure; Matter of Gouraud, 95 N. Y. 256; Matter of Phalen, 51 Hun 208.  