
    Anna Evans Lahn, Appellant, v. Henry J. Sullivan and The American Surety Company, Respondents.
    Fourth Department,
    December 28, 1906.
    Executors and administrators —when executor cannot pay to himself as attorney in fact of next of kin — surety liable for sums paid by an administrator to himself as agent.
    An administrator after his appointment was given power, of attorney by one of the next of kin whereby he was authorized to receive the moneys of the estate and manage her affairs relating to the estate in- his absolute discretion. . On his accounting he showed that he had paid to himself as attorney in fact certain mo'neys due his principal, but this payment was disallowed. The next oi kin being unable to collect a j udgme'nt for the amount from the administrator brought action against his surety. •
    
      Setd, that the power of attorney was inoperative to allow the administrator to pay money to himself as by virtue of his office he had control of the estate;
    That the surety was not exonerated from liability by the giving of the power of attorney nor by consenting to the transfer of the moneys under the joint control of itself and the administrator to the administrator personally as attorney in . fact. .
    McLennan, P. J., dissented.
    Appeal by. the plaintiff, Anna Evans Lahn, from an order of the Supreme Court, made at the Monroe.Trial Term and entered in the office of the clerk of the county of Monroe on the 3d day of October, 1904, setting aside the verdict of a jury in favor of the plaintiff and granting a new trial of the action.
    The action 'is brought to recover upon a bond given by the defendant Henry J. Sullivan and the other defendant, the American Surety- Company, upon the appointment of Sullivan as the administrator of the. estate of Rebecca B. Evans, such appointment having been made by the surrogate of Monroe county on January 15,1896, the bond being-in the penal sum of $40,000, dated the 30th day of December, 1895, and in the usual form. Upon an accounting before the surrogate of Monroe county the administrator was found chargeable with the amount of certain distributive shares, among others the sum of $1,010.20, 'which he was directed to pay to Anna Evans Lahn, the plaintiff in this action. A decree to that effect was entered'in the surrogate’s office of Monroe county on the 31st day of July, 1903. A transcript of the-decree was filed and a judgment thereupon was docketed in the clerk’s office of" the county of-.Monroe on the 1st day of August, 1903. - Thereafter an execution was issued thereon to the sheriff of Monroe county, and-the execution was returned wholly unsatisfied on the 21st day of September, 1903. ■Thereupon' this action was. commenced in October following.
    D. W. Forsyth, for the appellant.
    
      Frederick W. Smith, for the respondent surety company.
   Kruse, J.:

Rebecca B. Evans died intestate on the 28th day of July, 1895, leaving her surviving as her sole heirs at law- and next of kin Jane Evans, her mother, Bichará B. Evans, her brother, and two sisters, Jane E.. Collins and Anna Evans Lahn. The intestate was a resident of this State at the time of her death. Her mother, her brother and her sister Jane were residents of Ireland, and Anna Evans Lahn, her other sister, resided iii the city of Schenectady, in this State.

The defendant Henry J. Sullivan seems to have acted for the deceased as attorney in her lifetime, and in the October following her death he secured powers of attorney from the brother and sister residing in Ireland, and about a year later a similar power of attorney was given to him by Mrs! Lahn, the other sister. These powers of attorney authorized Sullivan to act for the persons giving them in matters pertaining to the estate of their deceased sister. The nature of the instruments and the authority given by them will later be stated more precisely.

It seems that the residence of Mrs. Lahn was not known by her relatives and parties interested in this estate until it was discovered through the efforts of Sullivan in October, 1896. On October 11, 1896, she made herself known in a letter written by her husband‘to Sullivan in answer to an advertisement published in a newspaper. Within a few days thereafter Sullivan went to Schenectady and procured from her the power of attorney which has been referred to. Before procuring this last power of attorney, however, he had been appointed by the surrogate of Monroe county the administrator of the estate of Bebecca B. Evans. His bond as such administrator was executed by himself as principal and by the defendant American Surety Company as surety on the 30th of December, 1895. And thereupon, and on the 15th day of January,, 1896, letters of administration were issued to him by the surrogate.

At the time of the execution of the bond Sullivan executed an agreement of indemnity to the surety company, providing for the joint control of the estate by himself and the surety company.

It will thus be seen that at the time of his appointment as administrator Sullivan had secured the powers- of attorney from the brother and sister residing in Ireland, but did not obtain the power of attorney from the sister residing in Schenectady until about nine months thereafter; and this last power of attorney was revoked by her, as she claims, by an instrument bearing the date of June 29, 1897, although it does not appear clearly what the principal did to accomplish the revocation beyond - execution of the instrument. The mother was incompetent, and Quincy Van Voorhis, a practicing attorney of Rochester, was appointed her committee and acted for her. , ■

A decree was made by the Monroe County Surrogate’s Court October 26, 1898, settling the accounts of the administrator, charging him with $17,468.88 cash and $7,153.93 in securities. The securities were directed by the decree to be assigned and delivered to the brother and two sisters of the deceased and 'the committee of the mother of the deceased. The remaining portion of the estate was directed to be distributed among them, witli the exception of $4,536.16, which Sullivan claimed he had paid to himself as attorney in fact for the brother and .the two sisters, $1,586.50 being the amount which he had received for the sister," Anna 'Evans Lahn, the plaintiff in this suit, and claimed to have been paid by himself, as administrator to himself as attorney in fact. The Surrogate’s Court refused to hold that the administrator was authorized to make such payment to himself as attorney in fact, but declined, at that time, to pass upon the rights of the claimants to the funds, remitting th¿ parties to such other court having jurisdiction as "they might be advised to invoke.. It was, however, further adjudged by that decree that as to the personal claim and indebtedness- of the administrator and as to the moneys claimed to be held by him as attorney in fact and all the other matters not specifically disposed of, the determination should be postponed to an adjourned .day for determination, the adjourned day being January 3,-1899".

Before the-adjourned day an appeal seems to have been taken by the administrator from certain parts of the decree of the Surrpgate’s Court, among others the disallowance of payments claimed to have been made by himself as administrator to himself as attorney in fact. The decree appealed from was affirmed by this court (Matter of Sullivan, 41 App. Div. 623), and a like result was had in the Court of Appeals upon a further appeal taken to that court by the administrator. ' (166 N. Y. 595.) The matter came back to the Surrogate’s Court after the determination of the said appeals, and on a further hearing and accounting the decree of July 31, 1903, was made, which, among other things, directed the administrator to pay to Anna Evans Lahn, the plaintiff in this action, the sum of $1,010.20, that being her share of the moneys claimed by Sullivan to have been paid to himself as her attorney. A transcript of this judgment and decree was thereafter docketed in the county clerk’s office of Monroe county and an execution issued thereon. The execution having been returned wholly unsatisfied, this action was brought to recover the amount under the provisions of the bond given upon Sullivan’s appointment as administrator by Sullivan and his surety, the defendant American Surety Company.

The power of attorney given by the plaintiff to the defendant Sullivan in October, 1896, the giving of which the surety company claims exonerated it from liability under the bond executed by it as surety for Sullivan, the administrator, relates largely to the real estate left by the deceased and, in which the plaintiff inherited an interest. It authorizes Sullivan to receive the rents and profits of the real estate; to rent and demise the premises; to accept surrenders and releases of tenancies; to make allowances to the tenants; to repair the buildings and to insure them against fire ; to repair the fences ; to drain and improve the premises ;'to employ persons to assist.in the management of them ; to collect the rents and profits ; to recover possession of the land, and to éxecnte deeds, transfers or mortgages. In 'general, the power was to do in the management of the premises whatever he might do if he were the absolute owner.

It will be observed that while the power of attorney given by plaintiff is dated October 5, 1895, it was not executed until October 16, 1896. Sullivan evidently intended it to be executed before he was appointed administrator; for it provides that he is authorized' to obtain letters of administration of the personal estate of the intestate ; to recover all moneys, goods and effects belonging to the deceased, Eebecca B. Evans; to sell the personal as well as real property of the deceased; to apply any moneys which may come into his hands 'under power of attorney to pay costs or expenses incurred 'by him in or about the execution of the powers contained therein. It also-authorized him to adjust or compromise any action or claims between himself and her brother, her sister or any other person, and to appear for her in any suit or proceedings brought against her, and to suffer judgment or to act otherwise, as he should think proper. After enumerating in detail the powers to which attention has been called in a general way, .the power of attorney concludes as follows: “A3STD generally to manage all.our concerns and affairs of every description so far as- relates to the estate of the said. Rebecca B. Evans, deceased, at his absolute discretion and as fully and effectuálly as We could do if we were present and acting in our proper persons.”

.It is contended on behalf of the surety company 'that the power of attorney given by the brother and sister in Ireland was unknown to it at the time the bond in question was executed, and that it did not consent to the execution of the power of attorney given by the plaintiff, to which reference has just been made, and that it had no knowledge of any of these ¡lowers of attorney until^ some' time thereafter, when copies thereof were served upon it; that"thereafter it did consent to the drawing of checks by Sullivan as administrator upon the. funds of the estate, payable to-him as attorney in fact, and that -it, by its authorized agent, countersigned such checks, and payment thereon was made to Sullivan accordingly.

It seems if. such consent had been withheld, Sullivan could not have obtained moneys upon these checks; for under the agreement of Sullivan and the surety company at the time of his appointment as administrator, these moneys could not be withdrawn without the written consent of the surety company. The agreement is quite specific in that regard, and need not be referred to here in detail. It was authorized under section 813 of the Code of Civil Procedure.

It is contended, however, upon the part of the surety company that -it.was .justified in giving its consent, without incurring any liability to the plaintiff for the moneys so withdrawn.

The claim in that regard is made on behalf of Sullivan and his surety that Sullivan as administrator was authorized by this power of attorney to pay money to himself as attorney in fact for the plaintiff,'and thus absolve his surety from further liability therefor. We think the power of attorney gave Sullivan no such authority. Upon his appointment as administrator Sullivan was invested with the legal title to all the personal property of the deceased'. It was his duty to convert it into money; to pay the debts and the expenses of administration; to distribute what remained to the persons entitled by law to share as distributees in the estate, as determined by a court of competent jurisdiction.. Until sucli determination and decree was made and the money paid over the legal title to the fund remained in the administrator.

There was no occasion for a power of attorney authorizing Sullivan to receive money or personal property from this estate, for lie- had that power under his letters of administration.

Uor was there any good reason for authorizing him to pay the money already in his possession as trustee for another, to himself as trustee for the same person; for whether he held; the money as administrator or as attorney in fact for Mrs. Lahn, in either case his holding was in the nature of a trust. The giving of such authority as is claimed by Sullivan under this power of attorney in addition to what he already had as administrator would serve no good or useful purpose, and it should not be inferred from this general, provision contained in the power of attorney, which seems to be a resumé at its close of the specific authority theretofore given in the instrument. If it was intended to authorize Sullivan to act in this dual capacity, the power of attorney should have so stated plainly and explicitly. (Wilcox v. Smith, 26 Barb. 316, 351, 352; Bank of New York N. B. Assn. v. American Dock & Trust Co., 143 N. Y. 559, 564.)

The same claim has been made bv Sullivan twice in controversies arising out of this estate, and in both instances the courts have held adversely to him; once in the surrogate’s proceedings referred to, and again in an action of partition of certain real estate of the deceased in this court, in which the present plaintiff was one of the plaintiffs and Sullivan was' a defendánt. In the last case he claimed that he was entitled to recover for services claimed to have been rendered by him in connection witlrproperty turned over by himself as administrator to himself as attorney in fact. It was held that Sullivan had no such authority and that he was not entitled to recover extra compensation in addition to his fees as administrator. To that action the surety company was not a party, but upon the accounting before the surrogate the surety company was a party.

It is claimed on behalf of the plaintiff that the decree in the Surrogate’s Court is res adjudícala upon the question involved in this action, and that the surety company is concluded thereby, and may not now be heard to question the binding force of the judgment entered upon that decree against Sullivan. ■ This claim is not without force, for an examination of the record of the proceedings in the Surrogate’s Court" discloses that the matter was referred to a referee by the surrogate; that the referee reported in favor of allowing these various sums-claimed to be held by Sullivan as attorney in fact of the distributees as payments to them. Upon the coming in of the report the surrogate specifically directed the dis-allowance thereof. If such allowance'had been permitted to stand as a payment the adjudication would have been binding against the plaintiff in favor of the surety company, unless subsequently reversed or set aside. And so it is urged that the surety company, which was a party to the proceeding, is bound by the adjudication adversely to it itpon that question.

It is, however, suggested on behalf of the surety company that the mere giving of this power of attorney and Sullivan acting under it was so prejudicial to the surety company and so changed its position that it was released upon the bond, éven if the moneys so received by the administrator with its consent under the claim that he was entitled to them as an attorney in fact may not have been a payment as between himself and the plaintiff. We deem it unnecessary to decide these1 questions.

We prefer to place our decision upon the broad ground that the power of attorney executed by the plaintiff to Sullivan did riot authorize him to take the moneys of the estate, or any of them, coming into his hands as ’ administrator,, and pay himself in the other capacity as attorney .in fact for the plaintiff and the others from whom he obtained similar powers of attorney. And so the surety company was not prejudiced by the giving of the power of attorney by the plaintiff to Sullivan, and was not exonerated from liability upon his bond by consenting to the transfer of the monéys under the joint control of' itself and the .administrator to' the administrator personally or nominally as attorney in fact for the plaintiff. ■

If these views are correct, it follows that the trial judge properly directed a verdict in favor of the plaintiff, and that he was in error in setting aside this verdict upon the motion for a new trial.

The order vacating and setting aside the verdict and granting a new trial should be reversed, with costs.

All concurred, except McLennan, P. J., who dissented upon the ground that in executing the power of attorney the plaintiff voluntarily changed the position of Sullivan from that of administrator to that of her personal representative, so far as his relations to the estate were concerned, and thereby, as to the plaintiff, exonerated and discharged the surety company.

Order reversed, with costs, and motion for new trial denied.  