
    In the Matter of the Estate of Azariah B. Shipman, Deceased.
    
      (Supreme Court, General Term, Fourth Department,
    
    
      Filed December 7, 1894.)
    
    1. Executors—Accounting—Consolidation.
    Where a petition for an accounting by the executor of a deceased executor is filed, and such executor files a petition that the accounts of his testator as executor be judicially settled, and a citation is issued and served upon all parties interested, the action of the surrogate in consolidating the two proceedings will not be disturbed, where it does not appear that atíy one was harmed by the order, and the decree made was entitled in both matters.
    2. Same.
    Where, by the aid of the inventory as filed, and the other evidence in the case, the true amount of the estate as then existing can be ascertained with reasonable certainty, and the executor acted in good faith, it will not be presumed that all the property of such executor belongs to his testator’s estate, under the doctrine of confusion of goods,
    -3. Same—Inventory.
    The inventory is prima facie proof of the amount of the estate.
    4. Same—Surcharging account.
    The executor is not chargeable with money deposited to the credit of the estate after the filing of the inventory, unless it is shown that it was not received for property included in the inventory.
    5. Same—Gold.
    If the executor'collects money in gold when the latter is at a premium, he is not chargeable with the premium.
    6. Same—Bonds.
    Bonds, owned by the decedent, should be inventoried at their market, and not their face, value.
    7. Same—Tomb.
    Allowance of $2,000 for a tomb will not be made, where the estate is valued at $17,000.
    8. Same—Taxes.
    In case of a bequest of the income of a fund, the taxes on the fund and the expenses of the trust must be paid out of the income.
    Appeal from an order consolidating the two proceedings for an accounting.
    
      Matthew Hale and Jerome Egelston, for app’lt Shipman; C. W. Andrews, for res’pt Nottingham and for app’lts Andrews and another.
   Merwin, J.

On September 15,1868, Azariah B. Shipman died at Paris, France. He left a last will and testament, which bears clate March 12, 1868. This was, on the 19th November, 1868, admitted to probate in Onondaga county, where the testator resided, and letters testamentary at that date were issued to Emily C. Shipman, the widow of the deceased, and one of the executors-named in the will. Afterwards, and on the 6th February, 1869, an inventory of the personal estate was filed in the surrogate’s-office. This purports to have been made by two appraisers on the 11th January, 1869, and was verified by Mrs. Shipman before the surrogate of the county on the day it was filed. The amount of property, as there stated, was $13,669. By the will, after providing for “ debts and funeral expenses,” the testator gave legacies to the amount of $300, payable as soon as practicable after his decease; and by the fifth and sixth clauses he gave legacies-to the amount of $1,500, payable at the death of his wife, without interest. He then disposed of his medical'library and surgical instruments and apparatus. Then came the following provisions :

“Eighth, I give, devise, and bequeath to my wife, Emily C. Shipman, the one undivided one-half paid of all the rest and- residue of my real and personal estate of which I may die seised or possessed, to have and to hold the same to her and her heirs forever.
“ Ninth. I give, devise, and bequeath to my said wife the remaining undivided one-half part of all the rest and residue of my personal estate of which I may die seised or possessed, to have and to hold the same, and to receive the income therefrom, for and during the term of her natural life; and upon her death I give, devise, and bequeath said undivided one-half part as follows.”

—the manner of such disposition being stated, which is not important here, except it was to brothers and sisters of their descendants. Tw'o executors were named, and they were directed and empowered to sell and convey any real estate that he owned at his decease, and “ meanwhile to pay all taxes and charges thereon.” In the last clause there is this statement:

“ It is my intention that my wife shall receive all the income1 from my estate during her life, arising as well from the rest and residue bequeathed as from any sums set apart to pay the legacies provided for the fifth and sixth items of my will.”

Mrs. Shipman died on July 26, 1892, never having had a judicial settlement of her accounts. The other executor named in the will did not qualify. Mrs. Shipman had a separate estate, which at her death inventoried $100,000 and upwards. She left a will, which was afterwards duly proved, and letters testamentary issued to Jacob A. Nottingham on 24th September, 1892.. At the same-date, Madison D. Shipman was duly appointed administrator with the will annexed of the estate of Azariah B. Shipman. On 30th March. 1893, he presented a petition to the surrogate’s court of Onondaga county, praying that Nottingham, as executor, etc., be required to render an account of the proceedings of Emily 0. Shipman as executrix, etc., of Azariah B. Shipman, deceased, and to deliver and pay over whatever was found to belong to said administrator. A citation was duly issued, and, upon its return, Nottingham, as executor, presented his petition for a final judicial settlement of the accounts of Emily C. Shipman as executrix. Upon this a citation was issued to the proper parties, returnable on 20th June, 1893. On the 30th June, 1893, to which time both matters had been duly adjourned, an order was made that “ said matters of accounting be, and the same are hereby, consolidated.” Afterwards Nottingham, as executor, filed an account of the proceedings of Mrs. Shipman as executrix. Objections were filed by the administrator with the will annexed, and after a trial the decree was made that is appealed from.

The appellant the administrator, etc., claims that the order of consolidation was improperly made. The administrator was proceeding under § 2606 of the Code of Civil Procedure. The same section, as amended in 1891, authorized the proceeding of the executor of Mrs. Shipman. There seems to be no special power given to consolidate the two, but they are both proceedings for the same purpose. It is difficult to see how the administrator was harmed by the order. In re Hodgman’s Estate, 31 St. Rep. 479. He had full opportunity to have determined what moneys or property should be turned over to him. He suggests that the whole estate should have been turned over to him, but he hardly claims that the deceased executrix should not be credited with the half of the estate that was absolutely given to her. She is charged in the decree with all the costs, and disallowed commissions. The decree is in fact entitled in both matters. We find no good ground for interfering with the order.

The main question in the case relates to the basis on which the accounting should be had. The decree is made on the basis of the inventory, adding thereto such items as upon the facts were considered proper. The claim of the administrator with the will annexed is that the inventory is not prima facie evidence of the amount of the estate, because : First, it is not shown that the

proper notice was given of the time and place of the appraisal; and, second, items are shown to have been omitted,—intentionally, as the appellant claims,—to such an extent as to máte the inventory unreliable, and in effect fraudulent, and that, as the executrix kept no accounts, and mingled the estate of her testator with her own, it should be assumed that all the property which she left belonged to the estate of her own testator, except such as her representatives may be able to show belonged to her individually. In this way it is claimed that the doctrine of confusion of goods (1 Story, Eq. Jur. § 468; 1 Perry, Trusts, § 447) should be applied. The inventory was made January 11,1869, and verified before the surrogate and filed in the surrogate’s office February 6, 1869. No question is made about the proper appointment and qualification of the appraisers! No proof was given that notice of the appraisal was served and posted as required by the statute. The inventory was offered in evidence by the executor of Mrs. Shipman, and was received in evidence without objection. No question was raised as to its invalidity until requests were made upon the settlement of the case on the appeal. If it had been raised in time, and the defect not then supplied, it might with considerable reason be said that after this lapse of time it would be presumed that the proper notice was given. See Lawson, Pres. Ev. 60. The circumstance that for 20 years and upwards, and until after the death of Mrs. Shipman, no question was raised about the inventory, deserves some consideration. Thomson v. Thomson, 1 Bradf. (Sur.) 24. The surrogate, by his decree, charges the estate of the executrix with several additional items of assets, but finds that she committed no willful breach of trust,, and did no fraudulent or dishonest act, and refuses to find that she intentionally withheld and omitted from the inventory any of the additional items. There are in the case circumstances which tend to support this conclusion of the surrogate, and we are not prepared to say that his conclusion is wrong. Besides, there is evidence in the case that is quite persuasive to the .conclusion that the inventory is substantially correct. I refer to the statement oor inventory made by the testator in his diary on December 9,1867. This was evidently a statement of his securities and real estate, and include an item for notes and bank accounts. The testator and his wife went to Europe in March, 1868, and upon the letter of credit of the testator there was drawn about $2,500 up to the time of his death. Having this in view, it would seem that the inventory filed did not depart greatly from the situation of fact when it was made. If by aid of the inventory as filed, and the other evidence in the case, the true amount of the estate as then existing can be ascertained with reasonable certainty, and the testatrix acted in good faith, the severe remedy upon confusion of goods should not- be applied. We are of the opinion that the surrogate did not err in taking the inventory as a basis. That was prima facie the amount of the estate. Marre v. Ginochio, 2 Bradf. (Sur.) 165; In re Ryalls, 74 Hun, 207; 56 St. Rep. 291, and cases cited. Code Civ. Proc. § 1832.

The administrator claims that there are other items that the surrogate should have charged to the executrix.. It appears, that on February 1, 1869, Mrs. Shipman deposited in the Syracuse Savings Bank, in an account kept by her husband in his lifetime, and continued by her after his death, the sum of $2,000, which on the 3d of March following she drew out, signing the receipt as. executrix. Presumptively this was property of the estate. There was no item of this particular amount and character in the inventory, and therefore it is claimed it should be added to it. The argument seems to be that the verification of the inventory by' Mrs. Shipman on February 6, 1869, was a statement by her that the estate was then situated as stated in the inventory,- and that, as it did not include the item of $2,000, it should be added to it. The surrogate disallowed the item on the ground that, the inventory being prima facie proof of the assets, it could not be found from the evidence that this'item was not some portion of the property mentioned in the inventory, or the proceeds thereof. It is to be observed that the inventory was made January 11, 1869, and must .speak, of the character of the property as it was then. So we think the surrogate did not err in disallowing the item. The same may be said as to divers items deposited by Mrs. Shipman to her credit as executrix in the Onondaga County Savings Bank from October 1, 1869, to June 30, 1874.

It was found by the surrogate that Mrs. Shipman, on or about September 15, 1868, received from her husband, at Paris, France, £360 sterling, of the value of $1,746, which belonged to her husband, and was received by her either as his agent, before his death, or as part of his estate after his death, and should be charged to her; and he did so charge it' in his decree. The administrator claims that the charge was too small, in that it did not, as he claims, include the premium then on gold. The appellants’ legatees under the will of Mrs. Shipman claim that the evidence does not warrant the finding that the money was the testator’s, or that it was received by Mrs. Shipman as agent for her husband, or as part of his estate. The testator, on going to Europe, in March, 1868, took with him a letter of credit from a banking house in New York having as correspondents John Munroe & Co. in Paris, France, and J. S. Morgan & Co. in London, England. He died in Paris, France, about twilight on September 15, 1868. On the 15th of September, 1868, Mrs. Shipman received by credit with John Munroe & Co. at Paris £360. This credit was by draft on London. On 16th September, 1868, the account of the testator with J. S. Morgan & Co. in London was charged with draft for £360, and the letter of credit was surrendered. There is evidence from which it may be inferred that the credit to Mrs. Shipman at Paris was by means of the letter of credit. The money was largely used for funeral expenses and expenses of return home. The circumstances warrant the conclusion that the money was received, not as a gift or in the payment of a debt, but to be accounted for. The conclusion on this subject of the surrogate should not be disturbed. The estate of Mrs. Shipman is allowed credit for the funeral expenses. It is not found or shown, except perhaps by inference, that Mrs. Ship-man received the amount in gold. Assuming that she did, the case of Kellogg v. Sweeney, 46 N. Y. 291, seems to be against the right to add the premium to the recovery. All that was received was money, and the judgment can only be for so much money. See, also, Phillips v. Speyers, 49 N. Y. 653; Swanson v. Cooke, 45 Barb. 574. The same rule would apply to the claim as to an item of $225 received in gold, and which was charged to the estate of the executrix at the par value. In the inventory were several bonds, being “ five-twenties,” so called, of date November 16,1861, to the amount of $1,500, and of date July 1, 1865, to the amount of $4,000. These are appraised in the inventory at par value, and so charged in the decree. It was admitted at the trial that these bonds, at the time of filing the inventory, were at a premium. We see no good reason why they should not have been appraised at their actual value at the time. There were then, according to the evidence, at a premium of 7 per cent. This would add to the inventory the sum of $885.

The surrogate allowed, as part of the funeral expenses, the sum of $2,000 for the construction of a vault and tomb,” and.the sum of $580 for a cemetery lot. A reasonable charge for a suitable headstone is proper to be allowed as part of the funeral expenses. Code Civ. Proc. § 2749; Owens v. Bloomer, 14 Hun, 296. The monument, if it be called that, which is allowed for here, was not of the ordinary character. The amount of the real and personal estate altogether was about $17,000. We find no sufficient reason in the facts or in law for the allowance of so large a sum for the purposes stated without express authority in the will. The item of $2,000 should be reduced to the sum of $1,000.

The testator, at the time- of his death, was the owner of a house and lot in Syracuse.' This was sold in 1881 by the executrix, under the power given her by the will. In the meantime she paid for taxes on the premises the sum of $821.44. This the surrogate refused to allow to the estate of the executrix, on the ground “ that the ordinary rule should apply that taxes assessed during the existence of a life tenancy must be paid by the life tenant; and, although the will directs the executors to pay the taxes, the fair construction of the will in that regard is that they should pay them out of the income. ” The appellants the legatees, etc., claim that this ruling was erroneous. The general rule is admitted to be as stated by the surrogate, but it is argued that this case is an exception, by reason of the clause of the will that directs the executors “ meanwhile to pay all taxes and charges thereon.” In re Albertson, 113 N. Y. 434; 22 St. Rep. 728, it was held that, to sustain, a construction of a will whereby the capital of a trust fund may be impaired by using it in payment of taxes and of interest on mortgages and in maintaining the realty used by the life tenant, it must contain words of the most unmistakable import pointing unequivocally in that direction. In that case the words to “pay out of my estate ” were held not to he sufficient to relieve the income from the charge. The force of this decision, as applicable here in favor of the ruling of the surrogate, is sought to be met by the provision of the eleventh or last clause of the will, where it is stated to be the intention of the testator that his wife “ shall receive all the income from my estate during her life, arising as well from the rest and residue bequeathed as from any sums set apart to pay the legacies provided for in the fifth and sixth items of my will.” The claim is that the expression “all the income” shows an intention to cast the burden of the taxes in question on the capital of the estate. Very clearly- the object of the eleventh clause was to make clear the proposition that the testator’s wife should have the income on the fund, to be set apart for the payment of legacies that were not to be paid until her death. It' can hardly be construed to mean that the testator by it indicated an intention that his wife should have the gross income of the estate. The general rule is that, in case of a bequest of the income of a fund, the taxes on the fund and the expenses of the trust must be paid out of the income. Whitson v. Whitson, 53 N. Y. 481. The ruling of the surrogate should not, we think, be disturbed.

There are no other questions that need be here discussed. It follows that the inventory account should be increased in the sum of $385 and interest from July 26, 1892, the date of Mrs. Ship-man’s death, and the amount allowed for funeral expenses should be decreased to the sum of $1,000, and the decree .should be modifled accordingly. In other respects the decree should be affirmed.

Martin, J., concurs.

Hardin, P. J.

Upon the force of Owens v. Bloomer, 14 Hun, 296, I assent to the modification as to the “ vault and tomb.” As to the other portion of the opinion I give my assent.

Decree modified as stated in the opinion, and as modified, affirmed, without costs of the appeal to either party.  