
    Matter of the Judicial Settlement of the Account of Cornelia M. Henshaw, as Executrix of the Last Will and Testament of Sarah Gracie, Deceased.
    (Surrogate’s Court, Kings County,
    March, 1902.)
    Distribution, in Surrogate’s Court — The holder of a.contingent debt against a decedent’s estate, is not a creditor thereof — Code C. P. § 2745 — Covenant not running with the land.
    A covenant under which a lessor, since deceased, agrees to pay her lessees, in a manner prescribed, “ for the buildings remaining on the premises at the expiration of the term ” does not make them her creditors to any extent until the term has actually expired and therefore where she dies before that time the court has no authority upon the judicial settlement of the account of her executrix to direct the latter to retain in her hands the probable amount of the cliitm of the lessees.
    In the absence of a specific provision to that effect such a covenant is personal to the lessor and does not run with the land nor bind her heirs or legatees.
    Proceedings upon the judicial settlement of the account of an executrix.
    Smith & Buxton (H. O. M. Ingraham, Edgar M. Doughty, of counsel), for petitioner.
    Wilson & Wallis, for Cornelia H. Sands, legatee.
    Pearsall, Rapper & Pearsall, for Fannie Lupton Shepperson, legatee.
    George S. Ingraham, for Ovington Brothers Company.
   Church, S.

On the judicial settlement of this account objection is made to the decree, providing for settlement and distribution, on the part of certain persons by the name of Ovington, claiming to be creditors of the deceased. The sole question is one of law, and arises from the following questions:

The deceased in her lifetime made a lease to the firm of Ovington Brothers of certain real estate in this State. Said lease contained the following proviso: “ The party of the first part hereby agrees to pay for the buildings remaining on the premises at the expiration of the term hereby created, the amount to be so paid by the party of the first part unless otherwise agreed upon shall be determined' by arbitrators to be chosen as follows: The party of the first part shall choose one person, the parties of the second part a second and the two so chosen shall choose a third, and the decision of such arbitrators shall be final and binding as to the amount to be paid.”

This lease was executed in 1880, and was executed in pursuance of a proviso contained in a previous lease made by the testator’s grantor, which’ gave to the Ovington Brothers the power of renewal, and also containing a similar covenant. The building was destroyed by fire in 1883. Thereupon an agreement was made between the decedent and Ovington Brothers extending the term of the lease until May 1, 1904. After this extension had been given, the lessees, who owned premises adjoining the demised premises, erected a new building, which covered the entire property, there being mo division lime between the property of which the Ovington Brothers had the fee and that which they held by lease.

The Ovington Brothers have served a claim upon the executrix, stating that under this covenant in the lease the value of the buildings so erected is $40,000, and that there should be no distribution of the estate until the claim is paid or sufficient money is set aside to pay same when it becomes due.

It appears that there is over $20,000 of personalty and also about the same amount in real estate in the decedent’s estate.

The Code provides, under certain circumstances, - that the accounting party must retain in his hands the probable amount of a claim so as to protect a creditor. The exact character of such claim, however’, is as follows: (§ 2745) “ Where an admitted debt of the decedent is mot yet due ” ; then follows a provision as to the form of decree to make payment when the same becomes due.

This case is certainly mot within the class of cases contemplated by the above section of the Code. That section of the Code obviously was intended to apply to a present debt, the amount of which could not be disputed, but where, as stated in the Code, it was not yet due, and the debtor had a period of time within which to pay the same. This manifestly was intended to apply to a case of a bond or note, where the validity of the bond or note was not questioned, but where, by its terms, it could not be paid until some future date, but it is evident from the language of the section that at the time the matter was presented to the court two facts must certainly appear, namely:

First. That it was a debt.

Second. That the amount of it was admitted.

The liability of the testatrix, under the contract in question, does not fall within this class of cases provided for by the Code. In the first place it is not a debt. It is simply an executory contract by which, at a certain time, the testatrix might have been liable to pay a certain amount to the lessees. Before the testatrix could have become liable to the lessees it was necessary that there should be “ buildings remaining on the premises at the expiration of the term,” namely: May 1, 1904.

It is entirely possible and by no means improbable that this building may, like its predecessor, be destroyed by fire between now and the first day of May, 1904; in fact it might be destroyed by fire on the last day of the term. If this contingency should arise absolutely no liability would attach to the testatrix or her estate, as there would be no buildings remaining on the premises for which she was liable to pay.

The testatrix, therefore, is not indebted to the Ovington Brothers; the mere fact that they have not disputed the contract does not make it an admitted claim within the language of this section.

The next question under consideration is: Was this a covenant running with- the land ? or is it a mere covenant of payment upon which only a personal liability could be enforced against the covenantor.

Upon this matter there is certainly nothing in the lease in question which by any specific terms provides that this shall be a covenant running with the land or indicating any intention on the part of the lessee to do other than create a personal liability on the part of the lessor to pay for the value of these buildings. In the absence of any such express proviso is there anything in the contract in question from which such an intention can be gathered? The general theory of contracts of character similar to this is that where there is no specific provision making it a covenant running with the land.1 that then it can be admitted as a personal covenant only. Spencer’s Case, 5 Coke, 16; Tallman v. Coffin, 4 N. Y. 134.

There is no doubt, from the entire tenor of this matter, that the parties did not intend to make this proviso in the lease otherwise than a personal covenant.

It certainly will not be contended that the lessees get any greater rights against the testatrix’ heirs-at-law and legatees by reason of the testatrix’ death than they would have had against the testatrix if she had lived. If the testatrix lived she certainly could have disposed of her real and personal estate by gift, or otherwise, and they could not bring any action to restrain her from disposing of the same on the ground that at the expiration of their lease the lands or the property would be insufficient to pay the amount of money which she would be liable to pay under this covenant.

I, therefore, see no reason why any decree should be entered herein which would result in preventing the settlement of this estate until the expiration of this lease and until the measure of liability, if any, which the Ovingtons) may have against the testatrix shall be determined.

It seems to me, therefore, unnecessary to consider the question as to whether the legacies provided for in the will are a charge upon the real estate or not.

Let a decree be entered, judicially settling the accounts, as presented, and directing distribution.

Decreed accordingly.  