
    Cordelia F. Shimmel, Plaintiff, v. Emily Morse et al., Defendants. Cordelia F. Shimmel, Plaintiff, v. Emily Morse et al., Defendants.
    (Supreme Court, New York Special Term,
    January, 1900.)
    Trust — Substituted family arrangement permitted to stand — Acquiescence — Statute of Limitations.
    Where no rights oi creditors intervene, the court will not permit a family arrangement, made by children, to be set aside, although it be at variance with the terms of a real estate trust created by their mother’s will and has had the effect of changing realty into personalty, where it appears that the child, attacking the arrangement, has waited more than twenty years to do so, has benefited substantially by it, and that its validity, as well as that of a debt (now attacked) due from the mother to another child, who was one of her executors and trustees, was passed upon by the proper surrogate more than twenty years ago, when the said executrix and her co-executor and trustee, accounted as executors before him and then obtained a decree from which no child ever appealed.
    Action for the construction of a trust.
    Richard P. Lydon and Amasa A. Bedfield, for plaintiff.
    Seth Sprague Terry, for defendants.
   Russell, J.

In stating the result reached in these cases it is unnecessary to allude to many of the details of the transactions affecting the title to the Thirty-fourth street and Hudson street properties which the plaintiff now seeks to reach an interest in, arising out of events occurring more than twenty years ago.

Her mother, Emilie Ostheim, died in May, 1874, seized of these premises, and by her will, probated June 20, 1874, devised to her daughter Mrs. Emily Morse and her son Felix Ostheim as trust executors these properties to divide the proceeds among her five children.

The main controversy is over the Thirty-fourth street property, which is conceded to have been worth at the time Mrs. Ostheim died the sum of $22,000, and was subject to a mortgage of $11,000. There were family reasons why this house should be kept in the ownership of one of the children and not be sold to a stranger. Ho debts to outsiders intervened to prevent the five children from making such arrangement as they saw fit. Accordingly it was planned that the executors should not sell to a purchaser for cash, but use should be made of a claim which Mrs. Morse, executrix, held against the deceased toother, a conveyance should be made to the son Albert Ostheim, mortgages given back to the amount of $14,350.67, and such mortgages should be reported by the executors as assets to apply in part payment of the claim of the executrix, Mrs. Morse. On the 14th of July, 1877,' Mrs. Morse and Felix Ostheim, as executors, conveyed the premises accordingly to Albert Ostheim, and the arrangement was carried out as contemplated. By subsequent conveyances the title became vested in the defendant Mrs. Richmond, who is the daughter of Mrs. Morse. Her title is subject to a mortgage given for value to the Bowery Savings Bank, and also to certain mortgages to her mother, Mrs. Morse, reaching back to the original consideration of the mortgages given in part satisfaction of Mrs. Morse’s - claim against Mrs. Ostheim.

On the 10th day of October, 1882, Mrs. Morse and Felix Ostheim, executrix and executor, accounted before the surrogate of the county of Hew York, charging themselves with the two mortgages to the amount of $14,350.67, and it was on such accounting adjudged that the executors were released from any farther liability, and the balance, treating the mortgage as assets, of $9,384.98, should be applied upon the claim of Mrs. Morse of $15,446.15, with interest from February 28, 1874. ,Mo steps have ever been taken to set aside this judicial determination.

The details of the claim of Mrs. Morse against her mother were not given in evidence on this trial by original proof, but that claim had some substantial foundation and was verified by the plaintiff before the surrogate. That plaintiff has received material benefits from her sister, Mrs. Morse, and the daughter, Mrs. Eichmond, in contributions of money and otherwise, and a home with them in their Thirty-fourth street property. The dealings of the parties for over twenty years, including all of those who were interested in the due execution of the will of Mrs. Ostheim, have been governed by the assumed acceptance of the transactions by which the title eventually came to Mrs. Eichmond.

It is very plain that the plaintiff, or either of the others interested, could have strenuously objected to the manner in which the trust was executed by the executor and executrix, if such choice had been made, and it is not probable that such an execution would have been contemplated without the willing consent of all. The plaintiff was an active participant in the manner of its accomplishment; has received material advantages flowing from her assent to its execution. She could not lend a willing hand to take the property from the estate, vest it in her brother, eventually in her niece and at the same time carry in the other hand a weapon to strike down its validity when from subsequent humor or interest she chose to repudiate the acts which had been executed, and insist upon a contrary course which might have been originally taken but for her own willing participation.

It is also apparent that the decree of the surrogate was of binding force upon her as a party and as one who helped to procure its rendition. Mo doubt a hidden device by which a trustee secures ultimately to himself property, which by duty he was forbidden to transfer directly to himself, will not be protected by the adjudication of the surrogate on his accounting as executor. Fulton v. Whitney, 66 N. Y. 548.

But the decree of the surrogate reaches to settle forever all questions which come properly before him for decision, even though the effect of it may shelter an executor from breach of trust duty. Mutual Life Ins. Co. v. Schwaner, 36 Hun, 373; affd. on opinion of Gen. Term, 101 N. Y. 681.

Here the plaintiff affirmed to the surrogate that the claim of the creditor, Mrs. Morse, was a just one; the funds realized by the sale of the property were placed subject to the order of the surrogate; with willing acquiescence of all who were interested in that fund or the property from which it was derived, the portion which was left after paying other charges was devoted to part satisfaction of the claim of Mrs. Morse. It becomes, therefore, an adjudication of binding force upon all the parties that the amount of the claim was as stated, its origin just, and the proceeds of the real property which had passed away from the estate were properly devoted to the claim of Mrs. Morse. -The conclusion as to the legal effect of that decree necessarily follows that the corpus of tire real. property liád passed into personalty, and was lawfully disposed of by a competent tribunal.

We, therefore,. see that by choice as to the methods of disposition of property of her mother, by ratification, by the absence of any legal action for a period longer than that fixed by the statute of limitations, and by adjudication of the ■ Surrogate’s Court, the plaintiff’s original right to insist upon a "different method of execution of the trust created in 1814 has entirely passed away.

The questions arising as to the Hudson street property are of smaller importance. That property is stipulated to have been worth the sum of $10,000 and it was subject to' a mortgage of $5,200. It was conveyed to Mrs. Richmond, and the consideration of the conveyance paid to satisfy a ’part of the balance owing to Mrs. Morse. The considerations which determine the result of the matter of the Thirty-fourth street property so largely pertain to the transaction in regard to the Hudson street property that a similar result must be reached. Judgment for defendants, in accordance with this opinion, with costs.

Judgment for defendants, with costs.  