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Court Discusses the Power of a Surrogate to Order a Bond

The question turns upon the power of the surrogate to require an administrator’s bond in double the value of the personal estate in this state (New York) of Mr. JP, who at the time of his death was a resident of New Jersey, as a condition to the grant of ancillary administration. The personal estate of the decedent at the time of his death consisted of personal effects of the value of about $2,500 in New Jersey, and of stocks and securities of the value of about $40,000, deposited with a safe-deposit company in the city of Brooklyn.

On the 1st day of August, 1889, letters of administration were issued by the probate court of New Jersey to the widow of the decedent upon her petition setting forth that the personal estate of the decedent in that state did not exceed the sum of $2,500. The administratrix, on the granting of the letters, executed her bond with sureties in the penal sum of $5,000 to the surrogate of Monmouth county, N. J., where the decedent resided, conditioned to account for the personal estate of the intestate ‘in the state of New Jersey,’ which has or shall come to her hands. The petitioner did not disclose in her petition the fact that there was any other personal estate of the decedent beyond what was in his actual possession in that state at his decease. On the 1st day of April, 1890, the widow, who with her infant child had become a resident of Brooklyn, applied to the surrogate of Kings county, by petition, for ancillary letters of administration, the petition for the granting of the letters in New Jersey, and that the decedent left personal estate in Kings county of the value of about $40,000, and that one Mr. MP, of Brooklyn, is or claims to be a creditor of the decedent, and that there was no other person claiming to be a creditor known to the petitioner.

The surrogate thereupon issued a citation to creditors of the decedent, and on the hearing Mr. MP presented affidavits to the effect that the decedent was indebted to him in the sum of $7,371.73, with interest; that the decedent, at his death, was the owner of securities to the amount above mentioned, deposited in a safe-deposit company in Brooklyn; that the only security given by the administratrix was the bond of $5,000, and that she had no pecuniary responsibility apart from her interest as widow in the estate of the decedent. The surrogate made an order that ancillary letters be granted to the widow on condition that she should give a bond, with sureties, to be approved by the surrogate, in a penalty of double the value of that part of the personal estate of which the deceased died possessed, which at his death was within the county of Kings.

The administratrix appeals from the order on the ground that the surrogate had no power to require a bond, upon the application for ancillary letters, in a penalty exceeding twice the amount of the debts owing by the intestate to creditors within the state.

If the surrogate had power to impose as a condition to the granting of letters ancillary that the administratrix should give a bond to secure the whole fund which might come to her hands by virtue of such letters, the imposition of the condition was a discreet exercise of such power. The general rule in this and other states requires that the administrator should give security in double the value of the personal estate of an intestate, before assuming the administration. The actual location of the personal estate or of the securities by which it is represented, is not, under our statute, material in determining the amount of the bond in a case of purely domestic administration, for the rule that personal property is deemed to follow the person of the owner, fixes the legal possession in the intestate at his place of residence, wherever in fact the property may be.

The unquestioned rule of the common law, that the succession to and the distribution of the estate of an intestate is governed by the law of the domicile, makes security there taken on the granting of letters of administration covering the whole personal estate of the intestate an adequate protection to all parties interested, and where ancillary letters are applied for in another state or jurisdiction there would not seem to be any necessity that additional security should be required, were it not for another principle, almost universally recognized, that the claims of creditors living in a jurisdiction where ancillary letters are sought are entitled to have their just rights in the assets of the intestate secured by a proper bond, as a condition of granting the application.

To this end security is usually required to be given by the applicant for ancillary administration enforceable in the tribunals of the place, for the protection of creditors therein residing. The Revised Statutes enacted that ‘every person appointed administrator’ should give a bond in a penalty not less than twice the value of the personal estate of which the deceased died possessed. Provision was made for granting letters on the application of foreign executors or administrators where persons not inhabitants of this state shall die leaving assets here. There was no provision exempting persons applying for ancillary letters from the operation of the general rule declared in section 42, and it would seem that they, as well as domestic adminstrators, ministrators, were required to give a bond in a penalty twice the value of the property upon which administration was sought.

It is contended on the part of the appellant that on an application for ancillary letters under section 2699 no security can be required, in any case, exceeding twice the amount of claims of domestic creditors; and that the discretion of the surrogate is only to be exercised within this limit. The security given in New Jersey was limited to the sum of $5,000, double the value of the personal estate of the intestate in his actual possession there, taking no account of the much larger amount in this state, and this course seems to have the sanction of the New Jersey courts. The contention of the appellant, if sustained, would enable the administratrix to take into her possession $40,000 in securities belonging to the estate, without any security except a bond not exceeding double the amount of the debt of $7,305, alleged to be due to Mr. MP.

It may be, then, that the primary purpose of section 2699 was the protection of domestic creditors. The citation is required to be issued to creditors only. The legislature may have assumed that proper and adequate general security would be exacted by the law of the place of the principal administration. But, although the language of section 2699 is vague, we think it is capable of a construction which will subserve the general policy of the law.

It is somewhat difficult to so construe the language. But the solicitude with which courts guard the rights of infants and persons standing in the relation of beneficiaries of trusts, and the uniform policy in respect of security required of administrators, justify the court in going to the verge of construction in order to protect parties so situated, and to carry out the general policy of the law. We think the order should be affirmed.

The settlement of estate may involvement difficult questions when the properties involved are situated to two different state and the laws treating the same are not similar. However, with the assistance of the experienced attorneys of Stephen Bilkis & Associates, these issues will be simplified.

 

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