OJornf II ICatu irl^nnl IGtbrary Cornell University Library KFN5188.Z9L78 Livermore's trustees' handbook :a manual 3 1924 022 815 256 The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924022815256 LIVERMORE'S TRUSTEES' HANDBOOK; A MANUAL POR THB USE OF TRUSTEES, EXECUTORS, ADMINISTRATORS, ASSIGNEES FOR THE BENEFIT OF CREDITORS, RECEIVERS, GUARDIANS, AND COMMITTEES OF LUNATICS, IDIOTS, AND HABITUAL DRUNKARDS. COHTAIHIN« A BKIEE STATEMENT OF THBIK POWEES AND DnTIES, KrOHTS AND LIABILITIES, WITH PEAOTICAL SUGGESTIONS AND INFORMATION FOR THEIR GUIDANCE IN THE MANAGEMENT OF THEIJS TRUSTS GENERALLY, AND PARTICULARLY AS TO MATTERS RELATING TO THEIR ACCOUNTS, AND THE SETTLEMENT OF THEM, UPON THBIB APPLICATION TO BE DISCHARGED. RUFUS P. liVBRMORE, OF THX NEW YOBS BAB. NEW YORK : L. K. STROUSE & CO., PUBLISHERS, 95 Nassau Steeet. 1881. Entered according to Act of Congress, in the year Eighteen Hundred and Eighty-one, by EUFUS P. lilVEKMOBB, in the Office of the Librarian of Congress, at Washington, S. C. CONTENTS. PAOK Trustees, 5 Executors and Administrators, 20 Assignees for the Benefit of Creditors, 51 Receivers, .64 Guardians, 73 Committees op Lunatics, Idiots, and Habitual Drunkards, . 83 TRUSTEES. section. page. 1. Definition of 5 3. Books of Account ■. . .., 6 3. Schedules and Inventoi^ . . .; 7 4. Bank Account. 9 5. Interest 9 6. Rent : 9 7. Sales 9 8. Advertising 11 9. Names of Purchasers 13 10. Credit 13 11. Statements of moneys received for outstanding debts collected, and from sales should be separate 13 12. Vouchers 13 13. Outstanding Debts and Claims 16 14. Compromising Claims due the estate 16 15. Insurano, Taxes, etc 16 16. Proofs of Debt or Claim against the estate 17 17. Dividend 17 18. Accounting , 18 19. Reserved Fund 18 20. Resignation, Removal 19 EXECUTORS AND ADMINISTRATORS. 31. Who may he an Executor , 30 23. Who is entitled to be an Administrator. 21 23. Renunciation or Acceptance of Appointment 21 24. Bond, Security 32 25. Appraisal 35 36. Inventory 25 27. Articles set apart by Statute for the Use of Decedent's Widow and Minor Children 36 28. Power over Estate 37 29. Taking Possession 37 30. Real Estate 28 31. Vouchers 28 33. Interest 29 CONTENTS. SECTION. PAGE. 33. Sales 30 34. Liability of one Executor or Administrator for the acts of his co- Executor or Administrator 30 35. Debts and Claims against the estate 31 36. Legacies '. ; 37 87. Statute of Distribution 41 88. Account and Accounting 45 39. Commissions and Compensation 48 ASSIGNEES FOR THE BENEFIT OF CREDITORS. 40. Taking Possession 61 41. Schedules and Inventory 53 42. Assignee's Bond 54 43. Books of Account 55 44. Continuing Assignor's Business 56 45. Notice to present Claims, etc 56 46. Payment of Claims 57 47. Payment of Preferred Claims 58 48. Selling the Assigned Property 59 ^9. Composition, Assignee's Accounting and Discharge 60 50. Assignee's Resignation or Removal 62 51. Assignee's Commission and Compensation 62 RECEIVERS. 53. Nature of the Office 64 53. Bond, Security 65 54. Duties and Powers 66 55. Suing and ^leing. Sued 68 56. Continuing Business, etc 70 57. Sales 70 58. Inventory 70 59. Accounting 70 60. Compensation, Commissions 71 61. Receivers of Corporations 71 GUARDIANS. 62. Nature of the Office 73 63. Powers and Duties 74 64. Bond and Security , 77 65. Account and Accounting 78 66. Commission and Compensation '. 80 67. Removal from Office 81 68. Guardian ad litem 81 69. Bond and Security of Guardian ad litem 81 70. Miscellaneous Duties and Liabilities 83 COMMITTEE OP LUNATICS, IDIOTS, AND HABITUAL DRUNKARDS. 71. Nature of the Office 8S 73. Bond and Security 84 73. Powers and Duties 84 74. Commission and Compensation of the Committee 86 75. Accouiiting 86 INTRODUCTION. This little book, intended to be essentiaWjpr aotieal in its na- ture, is designed to be placed by lawyers in the hands of those of their clients who occupy the office of a trustee, whether as execu- tor, administrator, assignee for the benefit of creditors, receiver, guardian, or committee of a lunatic, etc., or a trustee generally. It is not considered by the author to be a complete statement of all the duties of a trustee — by trustee we refer generally to any of the officers just mentioned— nor does it trace the course of all his proceedings, but it is simply intended to, and if re- garded, will, we modestly believe, greatly aid the trustee in the administration of his trust, and save him and his counsel much time and annoyance, and the client under some circumstances personal liability and expense, by tending to put him upon in- quiry as to his liabilities before taking some important step in the course of his proceedings, besides facilitating proceedings for his discharge, and the cancellation of his official bond, on wind- ing up the trust estate. It is not its purpose to describe the attorney's duties, but only such as relate to the trustee himself. We do not wish to be understood as desiring that it shall in the least degree take the place of an attorney. There are no forms annexed. It is not intended that an executor should draw a petition to advertise for claims himself, but that he should know when his counsel may do it, and that until he has advertised he should not pay any debts or legacies where there is reason to be- lieve that there will be a deficiency of assets. We are opposed to any system which purports to make " Every man his own lawyer for one dollar ;" on the contrary, we adviseevery trustee at the outset to retain competent counsel. See third paragraph of Section 1 jpost. That " a little knowledge is a dangerous thing" is an aphorism peculiarly applicable to a knowledge of law and legal procedure, we fully realize ; but every attorney, coun- 2 INTEODUCTIOIfr. sel for a trustee, well knows that there are many matters about which he desires to make suggestions to his client which escape his memory at the tiine, and although he answers all inquiries made of him, and spontaneously gives much information unasked, nevertheless there are many important subjects left undiscussed. "We recently saw the report of a referee on an accounting, upon which a trustee was ordered by the Court in the decree to pay several hundred dollars interest from his owd pocket, simply be- cause he deposited the proceeds of the trust estate in his bank, in his own name, individually, and not " as trustee" (in whatever capacity). He doubtless stated to his counsel, and truly too, that he received no pecuniary benefit whatever from such deposit, and he probably asked why he was not told the proper way to deposit it, and thereby have been saved the money. The counsel either supposed that his client would know without being told, or, more likely, had forgotten to include that important item of informa- tion in the. hundred and odd questions (some of them no doubt very trivial) he had answered. It is our desire to give the trus- tee in the following pages information of a similar character, with a view to relieving the attorney from taxing his memory with so many details of a like nature. It is this responsibility for his many acts, committed and omit- ted, which makes the trustee a peculiar client, distinct from all others, sui generis. An ordinary plaintiff or defendant has gen- erally but three duties to perform : First, to promptly pay all counsel fees called for ; second, to keep his mouth shut about his case ; and, thi/rd, to produce his witnesses on the trial ; his counsel attends to everything else. But a trustee's personal duties are many and often perplexing ; with every act scrutinized by from ten to three hundred parties in interest — oftener con- strued by such parties against him than in his favor — it is prob- ably no exaggeration to say that fully seventy-five per cent of the trustees of estates of less than $25,000 in amount refuse to act in that capacity the second time. The peculiar circumstances surrounding each case make it im- possible in any book, large or small, to answer all practical ques- tions that may arise ; for those unanswered, and there are many the trustee must consult his counsel. Many trustees have an erroneous idea that immediately upon INTEODUCTIOK. O assuming the duties of tlieir office they become possessed for the time being of the trust estate, to deal with.it as if it were their own property ; forgetting that they must not only " Be as careful of other people's property as of their own," but more careful of it. There is a routine and detail which is irksome to some ; they try to avoid it by saying, " Oh, I'm not so par- ticular in my own business, why should 1 be with this ?" The answer is, because he is a trustee. It is barely possible that some attorneys may raise the objec- tion that there is considerable information here given for whicli an attorney might make a charge to his client, a trustee, under the general head of " Consulting and advising." To such objection we answer : " Nothing succeeds like suc- cess." As counsel for a trustee, it is, or ought to be, his sole object to have his client perform his duties with as little annoy- ance to the client as possible, to have him make no mistakes, avoid all difficulties, and finally receive his commission and obtain his discharge without being personally charged with a dollar. Such a result is always satisfactory alike to client and couhsel. In such a case his own fees (it is presumed that the counsel for a trustee always takes a perspective view of his fees) would be equally as large as they would be if his client were charged with interest for using the funds of the estate, uninten- tionally probably, for his own benefit ; or if he were obliged to defend him on the accounting for having sold the. bulk of the trust property at private sale to his friends for small prices. It is no (?*sad vantage to counsel, for a trustee to obtain a cer- tain amount of information as to his rights and duties from a source other than his counsel. We were recently informed of a case where a large law finn, composed of more than four prom- inent lawyers, acting under a conscientious misapprehension as to the rate at which their client's commissions as a trustee were to be computed, informed him at the time of Ms accounting that he was entitled to a certain amount at a certain rate. During the accounting it was discovered by a third party that they were properly to be computed at a rate which would produce ,five times the amount supposed by the counsel, and in the decree the trustee was allowed such larger amount by the Court. The Courts always assume that such general instruction and advice as is con- * mTEODUCnOlT. tained in the following pages, is given, and they act on that assumption when they charge a trustee for any loss to the estate resulting from l^is improper acts. It is expected that counsel will elaborate upon matters merely suggested here. The counsel for the successful trustee is generally well paid for his services, and he ought to be, for he is engaged in one of the most laborious branches of the profession. That " Time is money" is a maxim as much appreciated by the lawyer in active practice as by any business man. The counsel for twenty -five trustees would, if he had the time, like to have fifty for clients. Surely anything which tends, in however small a degree, to assist him to acquire such increase, is not inimical to his interests. If the trustee does not here find everything necessary for him to know to make his task easy, he will, at least, be led by a perusal of these pages to do what many trustees fail to do, and by their omission get into trouble — ^that is, to ask their counsel for information upon subjects here simply suggested, before pro- ceeding in any important matter connected with their trusts. We have endeavored, the book being intended for laymen, to use very plain language, and trust that the reason for it wiU be seen without being stated here. E. P. L. No. i Waeeen Street, New Tore, ) June 23, 1881. J TRUSTEES. SECTION 1. — Under this general head of "Trustees''' we in- clude suggestions relating generally to executors, administrators, assignees, receivers, guardians, and other trustees ; for they are all " trustees,'''' though there is a technical difference which we do not deem it necessary here to discuss / and the attention of each of those officers is directed to the rema/rhs under this title, as they concern them equally as m^uch as if they were included under their respecti/oe titles, where information more exclusively for them is to he found. A trustee is "a person in whom some estate, interest, or power in or affecting property of any description, is vested for the benefit of another." Generally, any person of full age and sound mind may be a trustee. A trustee of any hind ought never to attempt to perform a/ny of the duties which are properl/y a lawyer'' s, all petitions, orders, applications to the court of any nature, receipts, vouchers, con- tracts, notices, advertisements, etc., should always he prepared T)y his counsel, so also should all schedules, inventories, and ac- counts, the trustee furnishing his counsel with full memoranda as herevnafter referred to, to enable the counsel to prepa/re such papers, inventories, and accounts / where a trustee being a lay- man attempts to perform an attorney'' s duties he almost invari- ably gets into trouble, he is never allowed any extra compensation because he performed any part of a la/wyer's duties in addition to his own, and courts aVways allow a reasonable compensation to be paid by the trustee to his cownsel, no matter how small the estate is. Where the words " former party" are used in these pages, they refer : in proceedings in the Surrogate's Court, to the " de- 6 TRUSTEES. Section 2. cedent," or deceased person ; in assignment proceedings, to the assignor ; in trusteeships generally, to the person who, prior to the trustee's entry upon his administration, owned the trust property and estate. A trustee, though occupying a prominent place in the business community, with an established reputation for honor and integ- rity, immediately upon accepting the management of a trust estate places himself in a position where he is open to criticism ; disappointed people, who do not receive upon the death of a relative as large a portion of his estate as they expected, and creditors, upon the failure of a debtor, who are not preferred in an assignment, angered and chagrined because they have not the power to alter the will or assignment, always imagine that they punish the "former party" for neglecting them by annoying the trustee in the management of his estate — in effect, they say to the trustee, " We believe that you are dishonest, that you desire to use your position for your own benefit ; show us by your acts and by your accounting that you have administered the estate for the interest of the beneficiaries, or parties entitled to share in the estate or its proceeds ;" but if his proceedings are sPrmght and regular, he need not have the slightest fear, as aU courts are very favorably disposed toward trustees who exhibit a willingness to properly perform their duties. SECTION 2. Books of Accoimt.-.A little care on the part of a trustee to keep a complete record of all his proceedings will save him much trouble. If he cannot spare the time ,.to make memoranda and entries of his proceedings and accounts himself in his books, including brief mention of any important event — so that on his accounting he may not only remember that the transaction occurred, but also ih.& particulars of it — he should employ some One to do it for him, under his direction, at stated intervals, say once or twice a week;, or every day if necessary. If the payment for this service is reasonable it would probably be allowed out of the estate. He should, immediately on entering upon his duties, provide himself with proper books of account {proper books should show the details of all his transactions), in which entries should be made at the time of all moneys received and paid out on account of the estate — full particulars and items Section 3. trustees. 1 of any considerable amount should be given. In regard to receipts and payments it should clearly appear : 1. When, the year, month, and day, the money was received or paid out. 2. From whom it was received, or to whom it was paid — ^giving the per- son's,/wB name and address. 3. For what purpose ovupon whose account it was received or paid out, giving full particulars. (For instance, it is insufficient to state simply " Expenses," or " Ex- penses for business," or, if he should go to Boston, it is not enough to state, " Expenses to Boston, $50 ; he should state who went to Boston, and ijphat for, giving the items.) 4. The exact amount which was received or paid out. All these facts must be shown on the accounting, and it is Tnioch easier to make a memorandum of them at the time than to attempt to remem- ber them months and perhaps years afterward. Take three or four lines to each item, if necessary. 5. If a payment of any considerable amount M'as made, an entry should be made of the number of the voucher for it. All entries in his ioohs should he made chronologically — that is, in the exact order of the time of the occurrence of the transactions — and they should so appear in his account. SECTION 3. Schedules and Inventory.— The attention of all trustees is directed to Section 41, " Schedules and Inven- tory," under the head of "Assignees," as the remarks in that section relate in many respects to all trustees. A trustee should carefully examine the schedule and inventory to see that the values of the stock, property, and outstanding debts are therein correctly given, the actual values should not be excessive, remembering creditors' and beneficiaries' rights. He should see, if possible, that all the property mentioned in the inventory is or was actually in the former party's possession, or that he. is entitled to the posses- sion of it, or claims to be entitled to the, possession of it. The attention of assignees is particularly called to this section, for the schedules and inventory are taken as presumptive though not conclusive evidence of all property which came into his hands (and when they are filed by the trustee himself they are in the nature of an admission to that efiEect), and at the values therein stated ; and he will be held accountable for all property therein mentioned. The inventory is the basis upon which his account- 8 TEtrsTEES. Section 3. ing proceeds, and lie will be charged with the property and at the values there mentioned, unless he can show that he did not receive such property, or. that such values were excessive; he should therefore see that the actual values as stated in the inven- tory are not too high, and in determining such value he should consider the prices he will obtain upon a sale under the circum- stances. If in preparing or assisting to prepare the inventory (and an inventory always should be prepared and filed at the com- mencement of the proceedings), he is unable to arrive at the values because of his being unfamiliar with the nature of the property or the " former party's" business ; then he should obtain the services of a person who is, to the end that a fair val- uation may appear. If the property should realize more than the values stated in the inventory, any increase belongs to the estate ; whereas he is accountable for, and must explain, any de- crease. A trustee cannot in any manner use or employ the trust estate or its proeeeds for his. own profit. An account should be kept, and an entry made in his books as an " important event," of a,ny property which may come into his hands not included in the schedules or inventory; he must account for this just as though it were set out in the inventory, as originally filed. A copy of the, schedules and inventory in assignment matters, and the inventory in Surrogate's and other proceedings, should be obtained by the trustee at the commencement of his adminis- tration for his guidance ; so that he may always see for what property he must account, what outstanding debts, etc., he must collect, and he must remember that he will be closely questioned on his accounting as to what disposition he made of the property, and he will be expected to show that he realized the values named therein, or, if he did not, he must show why he ^id not. When the sheriff makes a levy, under writs from the courts, upon any portion of the estate, the trustee should always make and keep a careful inventory or statement of all the property so taken, and should measure and ascertain the exact quantity of the goods and property taken (if it is of a nature incapable of measurement, it should be described so as to be readily identi- fied), and have the sherifiE to give a receipt. Whenever the trustee is served with any legal papers, he should irmnediately make a memorandum on them of day, month, and Sections 4, 5, 6, 7. trustees. 9 year when served upon him, and send them to his counsel at once. SECTION 4. Bank Account. — A trustee should always keep a bank account of moneys belonging to the trust estate, or an account of any kind relating to the trust property, entirely separate from his own individual account, or his firm's account. It should stand in his name as trustee, thus : " Bank, in account with as (executor or assignee) of the estate of ." He should always heep the trust property in mvy form, and its proceeds, enti/reby separate am,d distinct from his own / a failure to do this will not onT/y render him and his sure- ties liable for any loss occasioned thereby, but will also result in his being charged with interest, and in some cases with com- pound i/nterest, to he paid from his own funds. Any trustee who now has trust funds of the estate deposited in his own name should immediately transfer the account as above. SECTION 5. Interest. — He will be charged with interest if he mingles the trust funds with his own, although he made no profit thereby ; he will be compelled to pay interest if he in any way employs the funds for his own advantage ; but in general he will not be charged with interest where he holds funds from which he is obliged to make frequent payments ; but if he retain moneys for any considerable length of time he may be charged with interest. He is allowed six months generally to invest the funds, but it is safer for him to deposit the funds where they will draw interest if possible. SECTION 6. Rent. — The trustee should always enter into a new contract with the landlord of the premises occupied by him for the period during which he actually occupies them. He should be careful not to give any preference to the landlord, nor to assume any of the " former party's" contracts with him. Of course he should not engage himself to pay a large rent for the purposes of winding up the estate, unless it is clearly apparent that it will be of benefit to the estate for him to do so. SECTION 7. Sales. — In the majority of cases, in the absence of specific directions in the instrument under which he acts, it is 10 TEU8TEE8. Section 7. safer and better for the trustee, im.mediately after taking posses- sion of the trust estate, lawfully, to sell it at auction, and Tiot at private sale. He is protected by an auction sale, fairly conducted and had upon proper notice (he should always consult his counsel as to the length of notice and the manner in which it should be given), even though the prices obtained are much lower than he could get at private sale. An auction sale, honestly conducted, had upon proper notice and after due publicity, cannot he vm- peached, and the trustee cannot be successfully attacked because the prices obtained were inadequate ; but upon a private sale under certain circumstances he can be made liable for any de- ficiency between the prices obtained and those which opposing parties may make it appear to the Court ought to have been obtained. He should always give notice of the sale (at auction or not) to the beneficiaries or persons entitled to share in the estate ; by doing this he gives them the opportunity which they Tnay avail themselves of — that is, of purchasing at fifty per cent higher prices than any other parties attending the sale would give. He should never sell at retail, as a rule, unless he is di- rected to do so by the instrument imder which he acts (an assignee never should). There are a very few instances where he will be justified in selling at private sale, but when he does be should be veiy careful to sell for what he hnows to be good prices, and higher than he could get at auction. He will be compelled to sustain his action on his accounting, and show that the manner of sale was for the benefit of the estate. As it is sometimes necessary to obtain the order of the Court to authorize a sale, he should never sell any property until he has first made that inquiry of counsel. Upon the sale of real prop- erty he should be careful to observe all legal formalities, with two objects in view — first, to give a good title to the purcJiaser by having all proceedings regular, and, second, for his own pro- tection. In these sales also he should be careful to sell, or to attempt to sell rather, his "right, title, and interest" in the property to be sold, and to avoid all warranties or guaranties. He may sell what he received from his grantor ; he cannot give a better title than he received, and should not attempt it. In re- leases, however, although he may release or quit claim a piece of land, he reaUy releases only his actual interest in it. Section 8, teustees. 11 He should never sell property at private sale without knowing its value, and if he is personally unacquainted with it, he should have it appraised by competent appraisers. Property should generally be sold in its primary state, or as the trustee finds it, and he should not spend money or purchase other material to manufacture.it into the articles intended by the " former party" ; if he does he must be prepared on his accounting to show that such action resulted in a pecuniary benefit to the estate — some- times a difiicult matter to establish. SECTION 8. Advertising.— The trustee should always give as much pubKcity and notoriety to his sales of property as possible — ^the' more the better; it has a tendency to bring together a large number of would-be buyers, and increases the proceeds of the sale thereby, and shows that the trustee is perfectly willing that his proceedings in relation to the sale shall be examined, that he has no secret interests to guard. He should always ad- vertise the sale of both real and personal property in at least two newspapers. In some classes of trustees the requisite number of times that the notice of sale should be advertised is regulated by rule or statute ; but in most instances it is a matter of discretion with the trustee. He should advertise all sales at least once a week for three weeks successively, and particularly real estate, which, if valuable, should be advertised once a week for six suc- cessive weeks prior to the date of sale. The trustee should be careful to preserve his receipts or vouchers obtained from the newspapers upon payment of their charges for advertising, how- ever small in amount, as the Court requires jwoo/" of the due ad- vertisement of all notices, and this proof is furnished by the affidavit of the publisher, principal clerk, or foreman of the newspaper, identifying the notice and the number of times, and when it was inserted. The newspapers generally require the production of their receipts before delivering the affidavit men- tioned, so that they may know that the party paying for the ad- vertisement is the one who received the proof. These affidavits should always be procured by the trustee immediately after the last insertion of the advertisement in the newspaper. It is very difficult, and perhaps impossible, for the newspaper to supply it after the lapse of a long 'delay after the completion of the adver- 12 TEUSTEES. Section 9. tisement. THe proofs or ajBBdavits should be carefully preserved by the trustee, to be used on his accounting. Most newspapers will furnish " slips," or extra copies of the advertisement or notice for a trivial sum abore the charge for advertising. There are some newspapers designated by law and the rules of the courts in which all legal notices must be advertised. Where creditors, c]aima.nts, or any parties in interest reside without the State of New York, all notices intended for them must be adver- tised in the " State paper," published at Albany. At present the " State paper" is The Alhomy Morning Express ;'''' office, comer Green and Beaver Streets, Albany, New York. It will continue to be the State paper until March 8th, 1885. In each county there is a newspaper in which legal advertisements should be inserted. In the county of New York The Daily Register, office. No. 303 Broadway, is the official law journal of the county, and all advertised notices of proceedings of any nature, in cases in the courts of that county, should always be inserted in that journal. All newspapers require that legal advertisements shall be paid for in advance. SECTION 9. Names of Purchasers.— The trustee should always ascertain and enter in his books the fuU names and address- es of parties who purchase property composing the trust estate from him, either at auction or private sale, with quantities pur- chased, and the amounts paid therefore. He should also keep a memorandum of when the sale occurred. It has a prejudicial appearance for him not to know to whom he sells the property forming the trust estate. He should always retain a copy df the catalogue of an auction sale, with the prices obtained for eacA lot marked thereon, to be used on his accounting ; he should also re- tain a copy of any posters or hand-bills advertising the sale for the same purpose. A trustee himself cannot properly le a purchaser of any of the trust property, nor can he have any one purchase it for him, or in his behalf, either at auction or private sale ; if he does, the sale may be set aside. It is a general principle of the law governing trustees, that a trustee cannot place himself in a position antag- onistic to his trust, or against its best interests ; and he would be doing so were he to become a purchaser on the sale of the trust .Sections 10, 11, 12. teustees. 13 property, because in that event he would naturally desire that it should sell for as little as possible, whereas, properly, he should desire and exert himself to have it sell for as muoh as possible. SECTION 10. Credit.— In general he should not give any credit or time whatever upon the sale of any of the trust property (an assignee or executor never should) ; if he does it is at his own personal risk, and he should remember that when he incurs a personal risk he also renders his sureties liable. SECTION 11. Statement of Moneys Received for Outstanding Debts Collected, and from Sales, should be separate. — The amounts received for stock and property sold, either at auction or private sale, should always be kept entirely separate and distinct from the statement of amoimts received on account of outstanding debts due the estate which the trustee has collected ; and under no circumstances should they all be in- cluded in one item. The attention of assignees is particularly called to this section. SECTION" 12. Vouchers. — Vouchers, commonly called re- ceipts, should always be taken by a trustee, and carefully pre- served by him, upon payment of all sums amounting to five dollars or over. (Of course this amount is arbitrary ; he oan de- mand a receipt for a payment of ten cents, and he is not abso- lutely compelled to take one for $19.50, but it- is decidedly the betljer way to take vouchers down to at least $5 ; in large estates this amount may be too small and produce too many vouchers ; in such case a larger sum can be fixed upon, not exceeding $20 ; it reminds him of the transaction, and the exact cause of the dis- bursement, and it relieves him of a great deal of swearing.) The law ahsolutely requires that vouchers shall he f reduced on the trustee's accounting for all payments exceeding twenty dollars ($20), and that he must swear positively that he actually made for the benefit of the estate all payments aniounting to less than that sura, giving full particulars as to exact amounts, to wJiom paid, and the object of the payment, and that the total of such payments unsupported by vouchers shall not exceed $500, on all accountings, by all trustees, in any one case.. 2 1^ TEusTEES. Section 12. Any payment over twenty dollars ($20) for which no voucher is produced will le disallowed, and when a payment is disallowed, the trustee must lose the amount of such payment from his oion pocTcet. When the trustee pays money to him- self he slionld always give a receipt or voucher to himself " as trustee" (assignor or executor, for instance) in the same form as from other persons ; this is not always conclusive as to the fact of payment. A voucher should be numbered so as to correspond in number> with the payment to which it relates, which should also be num- bered, so as to distinguish them, as payments of the same amount and for the same object are frequently made at difEerent times. For example, in the statement of payments by the trustee, sup- pose the first item to be as follows : " 1881, July 1. John Jacob Astor, 85 Prince Street, New York, -for rent of premises No. 500 Broadway, New York, occupied by assignee for month of June, 1881, $250." On the left margin of the book this item should be numbered " No. 1 " with colored pencil or ink (and the voucher should be marked "No. 1 " to correspond). All vouchers for payments by, and all bills rendered to, the trustee after he enters upon the discharge of his duties for any indebtedness incurred by him, since his appointment, must be in the name of the trustee, " as trustee (executor, assignee, etc.) of the estate of ;' ' that is, the bills and claims represented thereby should be against the trustee, and not against the " former party ;" it must appear lyy the till or voucher that the trustee incurred the debt and paid the money. Where a trustee now holds bills or vouchers for any indebtedness incurred by him since his appointn;ient, and which bills were rendered to him, but in the "former party's" name, he should immediately obtain from the party rendering the bill a new bill or voucher by which it should appear that the claim was against th^ trustee (and it should mention his name, and not the " former party's," as afore- said). The attention of assignees is paHicularly called to this suggestion, as a failure to observe it will result in their defective vouchers being thrown out, and the payment disallowed. A correct voucher should show the following facts : 1. The exact date wloen the money was paid, day, month, and year. 2. From whom it was received, and m what capacity of the Section 12. teustees. 15 party making the payment — "as executor, etc., of , de- ceased," for instance. 3. The exact amount paid. 4. The ob- ject of payment, stated briefly as " my salary for one week as porter" (always giving full particulars, so that it will be unneces- sary for his counsel in making up his accounts on his accounting to ask a dozen questions in regard to each item) ; and 5. The legible signature of the party to whom the payment was made, by himself personally, or by his duly authorized agent for him, in which case the agent should sign the principal's name, and afterward his own name after the word " by ;" but as a rule the agent should not sign except in the absence of his principa,l. More care should be taken in this respect because of the trast re- lation than in case of individuals perhaps. Vouchers should be on paper about the size of legal cap or letter paper, the larger the better, and less the liability that they will be mislaid or lost ; paper is cheap, and ererj court will allow the trastee to buy enough for vouchers of proper size. Some trustees have an erroneous idea that it is an indication of economy in their administration, for them to take a receipt for a payment of $1000 on a scrap of paper about the size of a postage stamp. It is advantageous to have the vouchers prmted on legal cap (or paper about that size), and bound in book form, with the court and title of the proceedings, thus : Surrogate's Court, New York County. In the Matter of the Estate of Christopher Columbus, deceased. New Yoek, , 188 . Eeceived from William H. Prescott and James Eussell Lowell, executors, etc., of Christopher Columbus, deceased, the sum of dollars. (Here leave ample space in which to insert the object of payment.) The word " No." should be printed at Jo^^m left-hand comer. Vouchers similar to this may always be identified at a glance ; they are all of imif orm size ; they are in a neat and compact 16 TRUSTEES.. Sections 13, M, 15. form, are well preserved, easy to refer to, and easy to bind together when the proceedings are ended. Care should be taken to have the vouchers contain no memo- randa of a personal character which the trustee might desire to keep, as the vouchers at the close of the accounting must be filed in court permanently. SECTION 13. Outstanding Debts and Claims.— The trustee should make diligent efforts to collect all outstanding debts and claims due the estate, and properly he should not call in the services of a collecting agency until he has ascertained that he is unable to collect them without such assistance. On his accounting he will be rigidly questioned in regard to each claim due the estate, and if any are uncollected, he will be asked why he did not collect them. He must also then be prepared to show the cause for any difference between the amounts stated in the schedules or inventory in the list of outstandings and the amounts of such outstandings shown by his account to have been collected. He should make an entry in his books at the time of payment ^f the reasons for the difference (whether of discounts, offsets, goods returned, etc. , giving the particulars), so that they may appear in his final account — that is, the difference between the face of the claim as given in the inventory and the amount actually col- lected. SECTION 14. Compromising Claims due the Estate. — A trustee has the right generally to compromise or compound a claiim due the estate ; but, as in some cases it should be done only upon the order of the Court upon notice to all beneficiaries and parties in interest, he should never compromise a claim with- out first consulting his counsel. Generally he will have to show on his accounting that the amount received in compromise was the largest possible to be obtained. SECTION 15. Insurance, Taxes, etc.— He may properly pay necessary insurance premiums, taxes, etc. ; but he should be careful to ascertain so as to be able to show that such disburse- ments were for the benefit of the estate. Sections 16, 17. trustees. IT ' SECTION 16. Proofs of Debt or Claims against the Estate. — These should be carefully preserved. The trastee should endorse upon the proof the name of the court in which the proceeding is pending and the title of the case (so that any one viewing it from the outside will not throw it away as waste paper), together with the day, month, and year when it was filed with him, as follows : ' ' Court, title of case, proof of claim of John Brown, 400 Broadway, N. Y., $1200. Filed with trustee (assignee or executor) April 20th, 1881 ;" adding his initials. He should also obtain from the party filing it the address of the claimant or creditor, street and number, which should also be en- dorsed on the proof, with the amount of the claim. He should also enter in his hoohs the full name of the creditor or claimant, his address, the amount of his claim, and date of filing with him. The object of this is to keep a record of claimants' names and addresses, amounts, etc. , so that in the event of the proof itself being lost his books will show. who filed it, etc. The preserva- tion of these claims is important, as generally only such claimants as thus prove their claims are entitled to share in the proceeds of the estate. If a proof of claim is once filed with a trustee, he should not allow the party filing it, or any one else, to take it from him again for any reason. If the party filing has omitted something or made a mistake of any kind, inform him that he may file an amended proof if he desires to do so, but retain the old one. SECTION 17. Dividend.— The t,rustee should always figure the amount of any dividend due to creditors or other beneficiaries himself, or have his clerk do it. It is not his counsel's place to do it ; the trustee having the funds in his custody, it is better that he should calculate the payments to be made himself. He should always take a receipt or voucher from a party to whom a dividend is paid ; the voucher should be entitled in the proceed- ings, and should be written or printed, to correspond with each other, and should be acknowledged before a notary public or officer of similar powers, the fees for which are payable out of the estate. He should give notice to all parties in interest of the payment of a dividend, and if a meeting is held for the purpose of computing its amount, of the time and place of the meet- 18 TEUSTEES. Sections 18, 19. ing, and in some cases of notice to present claims before- that time. SECTION 18. Accounting.— A trustee should always ac- count as soon as he can ; and generally speaking he can when the object of creating the trust has been realized, carried out, or accomplished. The lapse of time is frequently the cause of annoyance, additional expense, and delay in the proceedings, and in some cases the trustee may be charged personally with the cost of proceedings taken to compel him to account. On his account- ing he must show generally what disposition he has made with the trust property and estate ; how he has performed his duties ; what property has come into his hands, as appears by the inven- tory filed at the commencement of the proceedings ; how much of that has actually come into his hands ; why all of it has not come into his possession, showing any depreciation in values, dis- counts, goods returned, amounts, etc. ; why he did not collect all outstanding debts due the estate ; the exact amounts of such as he did collect ; why he actually received less than the face amoimt of the claim ; how he sold the property, whether by auc- tion or at private sale, the exact amounts received therefor ; the exact amounts of all payments, showing the date of payment, to whom, for what purpose, vouchers, etc.; and, lastly, the, balance remaining in his hands at the date of filing his account. His whole proceedings and all his acts (particularly such as are in these pages referred to) in the care and management of the estate come up for review on his accounting. SECTION 19. Reserved Fund.— A trustee, before making any payments for expenses, claims of creditors, dividends, etc., should always retain in his hands a " reserve fund " — that is, a certain sum of money to meet contingent expenses, as on the final settlement of the estate it frequently occurs that unforeseen pay- ments have to be made. The amount of this fund must vary in different cases. It should cover before everything of course, the trustee's commissions ; next, the expenses of his accounting, in- cluding referee's fees, advertising, etc., and allowances to coun- sel. We have seen several cases where trustees had to personally bear the expenses of their accounting because of their failure to Section 20. teitstees. 19 retain the funds of the estate necessary for that purpose ; but he must exercise an honest discretion of course in fixing upon the amount he ought to retain ; $100,000, for instance, would ordi- narily be too large — too much hke a " sinking fund." Of course this " reserve fund " being a fart generally of the estate, must be entirely used up or distributed by proper payments before the trustee is finally discharged. SECTION 20. Resignation— Removal.- If a trustee accepts his appointment and enters upon the discharge of his duties, he cannot relinquish the trust entirely of his own motion. To resign and be properly discharged, he should through his coimsel petition the Court, account for all funds and property which have come into his hands, and then, after notice to all parties interested, he can be duly discharged by an order of the Court having jurisdiction. He should show some reason for desiring to resign. Misconduct and insolvency generally are causes for a trustee's removal. Of course the misconduct must be some material impropriety, such as a refusal to perform his duties, or where he is guilty of fraud, etc. EXECUTOES AND ADMINISTKATOES. The attention of executors and administrators is directed to all information and instrtictions under the head of ' ' Trustees, ' ' as the matter there to he found is Just as important to executors and administrators as that contained under this title {which relates more exclusively to therri), and is not repeated here simply to avoid repetition. The provisions of law governing executors and administrators are almost identical. SECTION 21. Who may be an Executor.— Any person may be an executor or executrix in this State who is of sound mind, over twenty-one years of age, capable of making a con- tract, and who is not an alien — that is, a resident of a foreign country (a resident of another State of the United States may be an executor in this State) — and who has not been convicted of an infamous crime (by " infamous crime," as used in the statute, is meant every offence punishable with death, or by imprisonment in a State prison, and no other). No one can be an executor who on proper proof shall be deemed by the Surrogate to be incompe- tent by reason of drunkenness, dishonesty, improvidence, or want of understanding ; and it is discretionary with the Surro- gate to appoint as executor or administrator one who cannot read and write the English language. Formerly a married woman could not act as executrix without her husband's consent ; but like many other barbarous restrictions against gentle woman all disabilities have been removed, and she may now act as execu- trix, administratrix, guardian, etc., in the same manner as if she were sole or unmarried. Sections 22, 23. exectjtoes and abministeatoes. 21 SECTION 22. Who is Entitled to be an Administra- tor. — The same legal requirements exist as to the right of a per- son to be an administrator as to an execntor as above set forth. A testator (a testator is a person who makes a will) may appoint any- competent person his executor or executrix, but the law requires the Surrogate to appoint a legally competent person an adminis- trator or administratrix, in the following order of preference : First. To the widow (or husband). Second. To the children. Third. To the leather. Fourth. To the mother. Fifth. To the brothers. Sixth. To the sisters. Seventh. To the grand- children. Eighth. To any of the next of kin who would be entitled to share in the distribution of the estate. If any persons entitled are minors (that is, under the age of 21 years), adminis- tration shall be granted to their guardians. If none of the rela- tives of the deceased will accept the appointment, then the creditors of the deceased will be appointed ; the one applying lirst will be entitled to a preference ; but in ]!>[ew York and Kings counties the Public Administrator has a preference after the relatives and before creditors and all other persons. Where there are several persons of the same degree of relationship to the intestate (an intestate is one who dies without leaving a will) entitled to administration, they are preferred in the following order : First. Males to females. Second. Relatives of the whole blood to those of the half blood. Third. Unmarried women to such as are married. And where there are several persons equally entitled, the Sm-rogate may in his discretion grant letters of administration to one or more of such persons. Where all the executors named in a will do not for any reason enter upon the discharge of their duties, the Surrogate, appoints a residuary legatee, or any other legatee, and if they decline then the next of kin are appointed according to the foregoing order of preference, an administrator with the will annexed, who stands in all respects in the position of an executor. SECTION 23. Renunciation or Acceptance of Ap- pointment. — JSTo one can be compelled to accept his appoint- ment as executor or administrator, but an executor must renounce his appointment in a formal manner, or fail to qualify after due notice to do so, before the Surrogate will appoint some other 22 EXECUTOES AND ADMINISTEATOES. Section 24. person. He may withdraw his renunciation at any time before letters are actually issued, but having once accepted he cannot renounce. The renunciation must be in writing, attested by two witnesses, acknowledged or proved before a notary or similar ofiBcer, and filed with the Surrogate. If a person named as executor fails to appear before the Surro- gate and take the oath of office within thirty days after the will is proved, not having renounced meanwhile, a summons will be issued by the Surrogate requiring him to appear and qualify, and if he fails to do so within the time named in the summons he will be deemed to have renounced. In case of the death of one of several executors, or if for any reason one or more shall cease to act, the survivor or survivors proceed to, complete the administration of the estate alone, in the same manner as if the deceased or retiring executor had never been named in the will. Executors and administrators hold their estate as " joint tenants," and are considered in law as one per- son, and they are presumed to act together in all that they do. SECTION 24. Bond— Security— An executor is not obliged to give a bond if he reside in this State, unless he is or- dered to do so by the Surrogate, and the Surrogate will not make such an order unless the will directs that the executor shall give a bond, or where objection is made that the pecuniary circumstances of the executor are such that they do not afford adequate security to the parties interested in the estate, or because he is not a resi- dent of this State ; but a non-resident executor will not be re- quired to give a bond if he has an office within the State for the regular transaction of business in person, and the will contains an express provision to the effect that he may act without giving security. "When a bond is required of an ' executor, it is to the same effect, amount, etc., as an admin istr£),tor's bond. But an executor will not be required to give security simply because he is not as rich a man as the testator was, or anywhere approaching it ; it is necessary simply that he should be responsible in the general acceptation of that word. An administrator must always give a bond, the amount of which is fixed by the Surrogate pursuant to statute, and the fol- lowing is a copy of Section 2267 of the Code of Civil Procedure, and is now the law relating thereto. Section 24. executors and administeatoes. 23 " Section 2667. A person appointed an administrator must, before letters are issued to him, besides filing his official oath, execute to the people of the State, and file with the Surrogate, the joint and several bond of himself and two or more sureties, in a penalty fixed by the Surrogate, not less than twice the value of the personal property of which the decedent died possessed, and of the probable amount to be recovered by reason of any right of action, granted to an executor or administrator by special provision of law. The sum to be fixed as the amount of the penalty must be ascertained by the Surrogate, by the examination upon oath, of the applicant or any other person, or otherwise, as the Surrogate thinks proper. The bond must be conditioned that the administrator will faithfully discharge the trust reposed in him as such, and obey all lawful decrees and orders of the Surrogate's court, touching the administration of the estate committed to him." By an amendment of 1881, Section 2667 is so amended as to permit the Surrogate to accept modified security from an execu- tor or administrator and issue limited letters where a right of ac- tion is given to him by special provision of law ; as to sue for damages for causing the decedent's death, etc. If there is more than one administrator, one bond executed by all will answer, with sureties of course. Any person interested in the estate may require sureties to justify before the Surrogate or his chief clerk, and submit to an examination as to their sufficiency, upon at least five days' notice to the executor- or administrator. If the sureties are deemed sufficient the bond will be approved, if insufficient the Surrogate will make an order requiring substitution of new sureties within five days after service of a copy of said order upon the executor, administrator or trustee, or his attorney. It is the rule of the Surrogate of New York County to require that at least one of the sureties on an administrator's bond over $500 in amount, shall be a freeholder (or owner of real estate) within this State. In large estates it is often a difficult matter for an executor or administrator to give ^ bond with sureties who are able or will- ing to justify in double the penalty of the bond, and among the ffood features of the new Code of Civil Procedure is Section 24 EXECUTORS AND ADMINISTEATOES. Soctioil 24. 2595, which relieves an executor or administrator in such cases. It reads as follows : " Section 2595. In a case where a bond, or new sureties to a. bond, may be required by a Surrogate from an executor, admin- istrator, or other trustee, if the value of the estate or fund is so great that the Surrogate deems it inexpedient to require security in the full amount prescribed by law, he may direct that any securities for the payment of money belonging to the estate or fund be deposited with him, to be delivered to the County Treas- urer, or be deposited subject to the order of the trustee, counter- signed by the Surrogate, with a]trust company duly authorized by law to receive the same. After such a deposit has been made, the Surrogate may fix the amount of the bond with respect to the value of the remainder only of the estate or fund. A security thus deposited shall not be withdrawn from the custody of the County Treasurer or trust company, and no person, other than the County Treasurer or the proper officer of the trust company, shall receive or collect any of the principal or interest secured thereby, without the special order of the Surrogate, entered in the appropriate book. Such an order can be made in favor of the trustee appointed, only where an additional bond has been given by him, or upon proof that the estate or fund has been so reduced by payments or otherwise, that the penalty of the bond originally given will be [sufficient in amount to satisfy the pro- visions of law relating to the penalty thereof, if the security so withdrawn is also reckoned in the estate or fund." Pursuant to the foregoing section the Surrogate of the County of New York has established the following among other new rules relating to his court : " Rule XVII. The deposit of securi- ties for the payment of money belonging to an estate or fund, as provided in Section 2595 of the Code of Procedure, for the pur- pose of reducing the^ bond of an executor, administrator, or other trustee, shall be made under the order of the Surrogate, in the Union Trust Company of the city of New York, subject to the order of the trustee, to be countersigned by the Surrogate, and not otherwise." Any party interested may show to the Surrogate that the bond is insufficient for any cause, and if the Surrogate orders a new bond or sureties they must be furnished within five days from the Sections 23, 26. executoes and administbatoes. 25 date of the order, or the letters will be revoked. Any or all of the sureties on a bond in the Surrogate's Court may present a petition to that court praying to be released from responsibility on account of any future breach of the condition of the bond, and the administrator must file a new bond with new sureties within five days after he is ordered to do so. SECTION 25. Appraisal. — After the bond is given, where necessary, the next act on the part of the executor or adminis- trator is to apply to the Surrogate for the appointment of two disinterested persons to act as appraisers, to estimate the value of the personal property. This they proceed to do with the aid of the executor or administrator, after due notice of the time and place of the appraisal has been given to all parties interested ; and an inventory should be prepared for the use of the appraiser showing the property and assets in detail, and after the valuations are affixed to it by the appraiser it may be used and filed as the inventory proper. The executor or administrator should make it his Wsiness to attend the appraisal, and should see that a just valuation is put on the property, so that on his accounting he will be saved the trouble of showing that an excessive value was unintentionally given to certain property by the appraisers, and he may then be able to learn from conversation with legatees and others the nature of the property, its true value, etc., and other information that will be useful to him. SECTION 26. Inventory.— This must be filed by the executor or administrator within a reasonable time, and must be filed within three months from the date of his letters. The in- ventory is a list or statement of all the property and assets com- posing the estate, with its appraised value. The inventory must be sworn to by the executor to the effect that it is in all respects just and true, and contains a true statement of all the personal property of the deceased which has come to his knowledge, and particularly of all money, bank bills, and other circulating me- dium, belonging to the deceased, and of all just claims of the de- ceased against such executor or administrator, according to the best of his knowledge. The statement should be full, giving all details and particulars, including any incumbrances, etc. 26 EXECUTOKS AND ADMINISTEATOES. SectlOn 27. The Surrogate may order an executor or administrator who per- sists in his refusal to tile an inventory, to be lodged in jail until he files it, or pays the funds in his hands to his successor. When property comes into the hands of the executor or administrator not included in the inventory, he must apply to have it appraised, and an inventory of it prepared within two months after he dis- covers it. Where the executor is tardy in filing the inventory, and he only does so when ordered by the Surrogate upon the application of a party in interest, he may be charged personally with the payment of the cost of the proceedings taken to compel him to file it. If only one of several executors or administrators file his inventory, those neglecting cannot interfere with or have any power over the personal estate, but the one who filed the in- ventory has the sole administration until the others make and file their inventory as require by law. The inventory is prima facie evidence of the value of the estate. Any increase over the values there stated belongs to the estate, and any decrease must be explained on the accounting. SECTION 27. Articles set Apart by Statute for the Use of Decedent's Widow and Minor Children.— The statute declares that where a man having a family dies, certain articles shall be considered as exempt, and the executor or ad- ministrator has no control over these except to take possession of them simply for the purpose of including them in the inventory, without being appraised. He holds such property in trust, not for the benefit of creditors or legatees, but for the decedent's widow and minor children, and they cannot ie disposed of by the testator by his will ; but they remain in possession of the widow, if there be one, during the time she shall live with and provide for the minor child or children. If there be a widow and no minor child, then such articles belong to the widow. When the children, if any, come of age, she is entitled to such property absolutely. Where a widow dies leaving a minor child or children, the same articles are to be set apart for the minors as are set apart for the widow in the case of a man dying. The following are the articles enumerated by the statute : ' ' 1. All spinning wheels, weaving looms, one knitting machine, one sewing machine, and stoves put up or kept for use, by his family. Sections 28, 29. executoes and adminibteatoes. 27 " 2. The family Bible, family pictures, and school books used by or in the family of such deceased person, and books not ex- ceeding in value fifty dollars, which were kept and used as part of the family library before the decease of such person. ' ' 3. All sheep to the number of ten, with their fleeces, and the yarn and cloth manufactured from the same ; one cow (it must be a milch cow, if there is one in the estate) ; two swine, and the pork of such swine, and the necessary food for such swine, sheep or cow for sixty days, and all necessary provisions and fuel for such widow or child or children for sixty days after the death of such deceased person. "4. All necessary wearing apparel, beds, bedsteads, and bed- ding ; necessary cooking utensils, the clothing of the family, the clothes of the widow and her ornaments proper for her station ; one table, six chairs, twelve knives and forks, twelve plates, twelve tea-cups and saucers, one sugar dish, one milk-pot, one tea-pot, and twelve spoons, and also other household furniture which shall not exceed one hundred and fifty dollars in value." SECTION 28. Power over Estate.— An executor or administrator has no - power to dispose of the estate until after letters are granted to him, except to preserve it and to pay funeral charges ; though in law he is considered as taking possession at the instant after the testator's death, so that his power after he has qualified relates back to the decedent's death. An executor should supply himself with a true copy of the will as soon as he enters upon his duties, and he should always carefully follow its directions in his administration, but he should not attempt to act upon his own interpretation of any abstruse provision of it. SECTION 29. Taking Possession.— He should take possession of the estate after the return of the inventory. He may obtain the process of the court to assist him in case any per- son refuses to dehver the property. He should take possession of all papers, etc. , relating to the personal estate. For the pur- pose of taking possession he has all the powers of the decedent over the property. He holds the property, however, as trustee for the legatees or next of kin. Two or more executors or ad- ministrators are considered as one person ; the entire estate is 28 EXECUTOES AND ADMINISTEATOES. SectionS 30/ 31. held by tliem jointly. Upon the death of one the title to the estate vests in the survivors, until they all die or are removed. The law requires that where the will relates to real property, the executor, or administrator, with the will annexed, must cause the same to be recorded, with the certificate of proof an- nexed thereto, or endorsed thereon, in each county where real property of the testator is situated, within twenty days after letters are issued to him ; but, by an amendment of 1881, a copy duly exemplified by the Surrogate will be accepted for record by a County Clerk or Register in place of the original will. Employment of Agent. — -Where the executor or administrator can show that his employment of an agent benefited the estate, or he is authorized to employ one by the will, he may charge the expense of such agent's salary to the estate ; but in general he should not employ an agent in any transaction where he him- self can act Just as well. He will be allowed for all reasonable ex- penses and proper disbursements. SECTION 30. Real Estate.— Unless real estate is devised to an executor in trust, the heir or devisee is the only person who has the right to its possession, except where it may be required to pay debts of the deceased, and the executor or administrator as such has no control over it ; they receive their authority from the will or statute. Where a devise of real estate is made to an ex- ecutor in trust to sell, etc., the title will vest in him, and he is accountable for the proceeds of such real estate upon such sale ; but the executor should never think of selling any real estate without first consulting his counsel in relation thereto. SECTION 31. Vouchers.— The executor or administrator should take vouchers for all payments made by him other than trivial expenses. His attention is directed to Section 12, under the head of " Trustees," and he should carefully read that sec- tion, as it applies to him in every particular. The following is a copy of Section 2734 of the Code of Civil Procedure, and is in- serted here because of its importance : " Section 2734. Upon an accounting by an executor or admin- istrator, the accounting party must produce and file a voucher for every payment, except in one of the following cases : Section 32. executoes and administeatoes. 29 ^' 1. He maybe allowed, witlioat a voucher, any proper item of expenditure, not exceeding twenty dollars, if it is supported by his own uncontradicted oath, stating positively the fact of pay- ment, and specifying when and to whom the payment was made ; provided that all the items so allowed against an estate, upon all the accountings of all the executors or administrators, shall not exceed five hundred dollars. "2. If he proves by his own oath or another's testimony, that he did not take a voucher when he made the payment ; or that the voucher then taken by him has been lost or destroyed ; he may be allowed any item, the payment of which he satisfactorily proves by the testimony of the person to whom he made it ; or if that person is dead, or cannot after diligent search be found, by any competent evidence other than his own oath or that of his wife. " But an allowance cannot be made, as specified in this section, unless the Surrogate is satisfied that the charge is correct and just. ' ' Where an executor is also, .a trustee or guardian under the will, he should take a voucher in his capacity as executor, and another one as guardian or trustee on a payment to the ward or minor. SECTION 32. Interest.— It is a general rule that legacies draw interest from the time that they are payable, and where no time is fixed by the will for the payment of a legacy it becomes due at the end of a year from the date of issuance of letters testa- mentary, and interest begins to run from that time. In some instances interest is to be computed from the date of the testator's death. An executor or administrator will be charged with interest, which he must pay from his own private funds, when he mingles the funds of the estate with his own, retains them unnecessarily long, or in any way uses them for his own advantage. A reason- able time is allowed him in which to invest the funds ; this time must vary accordiog to the case. Generally six months from the date of the issuance of letters is considered sufiicient, though a year is allowed where payments have to be made frequently ; and in- terest will run against him generally after the lapse of eighteen months from the date of his letters. 3 30 EXKCUTOES AND ADMINISTKATOESi SectiOHS 33, 34. SECTION 33. Sales.— Where the executor is given au- thority by the will to sell real estate, for any purpose, he may of course do so, either publicly or privately, and on such terms as the executor may deem for the best interest of the estate. He is of course accpuntable for the proceeds of the sale of real estate. Where real estate is devised to the widow until her death or re- marriage, and then is directed to be sold, he has no authority in relation to such real estate until after her death or remarriage. Where real estate is directed to be sold for the payment of debts, that is the primary purpose to which its proceeds are to be ap- plied, notwithstanding that the same property is devised to a devisee. As to the personal property, the executor has general authority to sell it when necessary ot advisable, and when directed by the will to sell it, for any purpose, he should sell it whenever he thinks he can obtain the highest price for it. He should always sell for cash only. SECTION 34. Liability of one Executor or Admin- istrator for the Acts of his Co-executor or Adminis- trator. — The general rule that co-trustees are jointly and severally liable for each other's acts, does not apply to executors and administrators. Each executor is responsible only for the money and property he receives, and they each have equal right and authority to receive and pay out moneys individually, and without the knowledge or consent of the other ; but this indi- vidual exemption does not always apply. For instance, one executor cannot wink at the fraud or improper acts of his co- executor. If he can be shown to have knowledge of, or in any way to have consented to, the wrongful acts of the other, he is responsible to the estate for any loss to it resulting from those improper acts. Where one executor or administrator knows that his co-executor or administrator is acting improperly with the estate, or any part of it, or refuses to do what he ought to do, in order to free himself from liability, he ought immediately re- quest such wrong-doing executor to do his duty, whatever it may be, and if he does not comply with such request in a very short time, he should through his counsel apply to the Surrogate for an order in the premises. Each executor Section 35. executoes and administeatoes. 31 or administrator is bound to exert a watchful care over the estate, and prevent any loss to it by whatever means. SECTION 36. Debts and Claims against the Estate. — An executor or administrator in many respects is a tnistee for the creditors ; he should therefore pay only the funeral expenses attending the burial of the decedent, and should postpone the payment of all other debts until the expiration of the time limited in the notice to present claims against the estate. This applies to all cases where there is the slightest reason to suppose that the es- tate will prove insufficient to pay all the debts and claims against it in full, and if the executor or administrator pays claims in full, and subsequently and before the expiration of the time limited other claims are presented, such creditors may hold the executor or administrator personally liable for the amount of their claims or their proportional part of them. Where it appears that the estate cannot pay all the debts in full, they must be paid pro rata, and it therefore becomes necessary to know the amount of all the debts. To ascertain that, the statute authorizes the executor or administrator, after the expiration of at least six months since the granting of letters, to apply to the Surrogate for an order, authorizing liim to insert a notice in a newspaper printed in the county and in such other newspapers as the Surrogate directs. The Surrogate ought to be informed by petition or otherwise where the creditors reside. This notice must be inserted once in each week for six months, " requiring all persons having claims against the deceased, to exhibit the same, with the vouch- ers thereof, to such executor or administrator, at the place of his residence or transaction of business, to be specified in such notice, at or before the day therein named, which shall be at least six months from the day of the first publication of such notice." An excellent custom (among many others) now obtains in the office of the Surrogate of New York County, of sending notice to the executor or administrator after the lapse of, six months, that he should advertise for claims. This notice when received should always be heeded, and whether received or not he should always apply through his counsel for an order to advertise imme- diately upon the expiration of the six months. The following are the prices charged at the present time for advertising this 32 EXBCUTOES Al^D ADMrNISTEATOKS. Sectioil 35. notice in the city of N"ew York by the newspapers named : The Dodly Register, office 303 Broadway, N. Y., the official law journal of the county, in which the notice is always advertised in proceedings in New York County, $20 ; Ths Star, $30 ; The New York Evening Express, $30 ; The World, $26 ; The Com- 'inercial Advertiser^, $26 ; The Daily News, $20 ; The 'WeekVy Union, of Morrisania, N. Y., $20 ; The Hebrew Leader, $20 ; The Sunday Democrat, $20. It is the almost invariable practice of the Surrogate to order the notice to be inserted in Pwo newspapers. The clerk charges one dollar for notifying the ex- ecutor or administrator of the time to advertise, entering the order, and supplying fomjs of the notice, which should be added to the charges of the two newspapers ordered, the Daily Register always being one. All these newspapers require payment in ad- vance as a condition of their inserting the notice. After the ex- piration of the six months the executor should obtain and care- fully preserve an " affidavit of pablication" of the notice made by the publisher of the paper ; this will be needed on the account- ing. The executor or administrator should always require claim- ants to produce the voucher, bill, or statemeht relating to their claims and verify or swear to it, but the claim need not be sworn to unless the executor demands it, and the executor or adminis- trator has no right to reject or to refuse to receive and file any claim, statement, voucher (or scrap of paper which the creditor calls a claim or voucher), iecause it is not sworn to ; but he must receive and file it for what it is worth, having first requested the claimant to swear to it. A claimant may file his claim after the expiration of the time limited in the notice to present, and in fact at any time up to the executor's or administrator's discharge after his last accounting ; but the claimant's right to have his claiia paid upon its presenta- tion after the expiration of the time named in the notice is an- other matter. Where there is no deficiency of assets, the claim- ant, if otherwise entitled thereto, is not debarred from having his claim paid, because presented after the time, and he may maintain an action against the executor to enforce payment. The object of the notice is to protect the executor and the estate, so that where a distribution takes place in full or pro rata, 'after the expiration of the time limited in the notice, all claims Section 36. executoes akd administeatoes. 33 not presented by that time are not considered in tlie computation, and in case of a deficiency of assets claims not in the computation would not be paid. If an executor owed the decedent a debt at the time of hie death, or a liability accruing subsequently, that debt is not dis- charged because the executor was named as such in the will, the same as to an administrator ; but such a debt must be considered as a part of the estate the same as all others. If a debt is dis- charged by a will, such discharge does not hold good as against creditors, but is to be considered only as a specific legacy or be- quest to the debtor. The executor or administrator can give no preference in any way to his own claim against the estate ; he must prove and verify his claim to the satisfaction of the Surro- gate on the accounting, but he may and should prove it before the accounting. The Statute of Limitations may bar certain debts, including the executor's or administrator's own claim. A claim barred by the Statute of Limitations is not a "just debt " to an extent to authorize the executor to pay it without an order of the Surrogate. Section 2740 of the Code declares that from the death of the decedent until the first judicial settlement of an account of his executor or administrator, the running of the Statute of Limitations against a debt due from the decedent to the accounting party is suspended unless the accounting party was appointed upon the revocation of former letters issued to an- other person, and that after the first judicial settlement of the executor's or administrator's account the statute runs against his debt. An executor or administrator has the statutory right to com- promise or compound a debt due the estate, and he should do so when the interests of the estate require it. He should always obtain authority from the Surrogate to do it. But even in tha,t event any party interested may show on the accounting that the debt was negligently or fraudulently compromised or compounded. "Where the personal property of an estate proves to be in- sufficient to pay all its debts, a creditor or the executor or admin- istrator may apply to the Court for leave to sell real estate of the decedent for that purpose. The first debts to be paid by an executor or administrator are the funeral expenses connected with the burial of the deceased. 34 EXECTJTOES AND ADMINISTKATOES. Section 35. These he can pay if reasonable in amount, without any order or authority, whether the estate is solvent or not, or he can pay them out of his own pocket and reimburse himself with the first funds he receives. The expenses of the deceased's last sickness, includ- ing the physician's bill, is generally paid among the first. If the estate can afford it, and creditors will riot be injured, the erection of a tombstone over the decedent's grave is included as funeral expenses. ' After the funeral expenses are paid, and a fund for the pay- ment of the expenses of the administration is reserved, the debts preferred Tyy Ioajo should be paid, in the following order of preference : "1. Debts entitled to a preference under the laws of the United States." {All debts due the United States are preferred, and the executor or administrator will be personally liable if the United States Government sufEer any loss by a neglect to give such pref- erence.) " 2. Taxes assessed upon the estate of the deceased previous to death." (Such taxes only as were assessed upon the estate of the deceased at the time of his death are entitled to a preference ; assessments are not included in the term " taxes.") " 3. Judgments docketed and decrees enrolled against the de- ceased, according to the priority thereof respectively." (Judg- ments are to be paid in point of time of their docketing ,; judg- ments rendered in the courts of other States are not entitled to this preference ; the judgment must be against the deceased, and must have been entered before his death.) " 4. All recognizances, bonds, sealed instruments, notes, bills, and unliquidated demands and accounts." In certain cases the Surrogate may order the payment of rent, where it will benefit the estate, before debts of the fourth class. With this exception no preference can be given to any debt over others of the same class, except judgments in the third class, which are to be paid in the order of the time of their docketing. Debts due are not entitled to any preference over those not due ; such debts may be paid in their proper class, with a rebate of in- terest for the unexpired time. Judgments recovered against the executor or administrator are entitled to no preference over other debts of the same class. Section 35. executors and administeatoes. 35 Debts must always be paid before legacies ; they must be paid according to their legal priority from the proceeds of the sale of the personal estate, if there is insufficient collected from other sources. Property not specifically bequeathed shoiild be sold first. The executor or administrator ought never to pay a debt in full, or a legacy, unless he is positive that the assets of the estate are abundantly sufficient to pay all the debts and legacies, or all the debts at least, in full", with a surplus for contingent expenses. Should there be insufficient assets to pay all in full, the unpaid creditors could compel the executor or administrator to pay their claim or the unpaid balance /rom his own funds. Where there is an insufficiency of assets to pay all debts, there must be a. pro rata dividend paid in proportion to the amount of each debt, under the order of the Surrogate, upon all unpreferred and un- secured debts after deducting the amounts already paid on account, if any. After the expiration of six months after the granting of letters, any creditor of the estate may present a petition to the Surrogate for a citatibn to phow cause, directed to the executor or administrator, why a decree should not be made for the payment of a debt or its just proportional part. It is in the discretion of the Surrogate to grant the application, and if there is reason to believe that the claim is not genuine it will be denied. The Surrogate cannot try the question of the validity or the proper amount of the claim. Of course if the decree is granted the executor or administrator must obey it and pay the amount ordered therein. A creditor acquires no lien against the estate because he has recovered judgment against the executor or administrator. The exact amount of the debt has simply been ascertained thereby. He cannot issue execution before the settlement of the executor's account without leave of the Surrogate. If it appears that there are funds in the hands of the executor properly applicable to the payment of the judgment upon an accounting, the Surrogate will allow execution to be issued for the amount applicable. If the claimant establishes his claim, and if an executor or ad- ministrator unreasonably refuses to pay a debt manifestly just and legal, and there is no deficiency of assets, he will be personally liable for the creditor's costs of proceedings to compel payment. 36 EXECUTOES AND ADMINISTEATOES. Scction 35. It is the duty of an executor or administrator to endeavor to collect debts owing to the estate by persons residing in other States and countries, if they are solvent ; arid he should procure himself or some other person to be appointed administrator in the State where the debt is to be collected. He is accountable for the amount of a debt which is lost by his neglect to collect it. If on the accounting it appears that there is a debt not due, and the creditor refuses to accept payment before due, with a rebate of interest, then there must be funds reserved to pay such claim. The executor or administrator ought early to conclude whether to accept claims and pay them, or whether to reject any of them and refuse payment. He is personally liable for any invalid claim paid by him. He shquld never pay a claim barred by the Statute of Limitations without an order of the Surrogate (debts on sim- ple contract are barred after six years from the time a right of action accrued on them). Where a claim is disputed by the executor or administrator, he may agree in writing with the claimant to refer it to three dis- interested persons, or to a disinterested person to be approved by the Surrogate ; proceedings are had before the referee as on a trial, and a judgment may be entered and enforced thereon. An offer to refer a disputed claim must be made by the claimant. When a judgment for a sum of money only is rendered against an executor or administrator in an action brought against him in ' his representative capacity, where it appears : (1) that the plain- tiff's demand was presented within the time limited by public notice ; (2) and that payment was unreasonably resisted or neg- lected ; or (3) that the defendant (the executor or administrator) refused to refer the claim ; in either of these instances the Court may award costs against the executor or administrator, to be col- lected either out of his individual property, or out of the prop- erty of the decedent, as the Court directs, having reference to the facts which appeared on the trial. In all other cases and in- stances the executor or administrator is not personally liable for costs, unless the Court directs him to pay costs personally for mis- management or bad faith in the prosecution or defence of the action. The executor should, in a case where he desires to do so. plainly inform the claimant that he refuses to refer his claim ; but he is not deemed to have refused to refer until the claimant Section 36. exeoutoes and administeatoes. 37 lias ofiEered to refer, and a refusal to refer will not be implied from a rejection of the claim. "Where the executor disputes or rejects a claim exhibited to him after the commencement, and before the completion of the publication of the notice to present claims, unless the claim is referred, suit thereon must be com- menced within six months after dispute or rejection, or within six months after a part of the debt becomes due. A failure to bring the action within the time named bars any recovery on the claim. SECTION 36. Legacies. — Personal property is lequeath- ed, real estate is devised. Under a will, a legatee receives a legacy or hequest of personal property ; a devisee receives a devise of real property or estate. Legacies are of various kinds, as general, specific, or demon- strative as to subject matter ; they are also either vested or con- tingent, absolute or conditional, as to the time and possibility of their enjoyment. A general legacy is one which does not relate to any particular thing or kind of property distinct from others ■ of the same kind, and usually though not always refers to money. " To my cousin Rebecca Harris I give and bequeath the sum of ten thousand dollars," is a common instance of a general legacy. ' There is a general presumption of law that all legacies are general, and they are not to be considered as specific unless such clearly appears to be the testator's intention as expressed in his will. A specifijG legacy is one which distinctly names the ob- ject bequeathed, and separates it from the decedent's general property. For instance, to give " to my daughter Rachel, my gold watch, presented to me by the Spanish Government," is a specific legacy, and relates to that particular watch and no other ; but if the testator had bequeathed to his daughter " a fine gold watch," he would then give a general legacy, and the executor would be authorized to purchpise ed in the course of the proceedings). If the creditor receive letters, etc. , at his place of business, his business address should be given ; if he has no place of business, then the street and street number of his private residence should be stated. In the case of firms, their business address, street arid number, is sufficient. These addresses must thus be given as to each creditor ; the memorandum should , also state the exact sum of money owing to each creditor, with the true cause and considera- tion therefor, showing how the indebtedness was contracted, or what the debt is for, when (as near as possible) it was contracted, and a statement of any existing security held by the creditor for the payment of the same. 4. A full and true statement of all the assignor's property and estate at the date of the assignment, both real and personal, in law and in equity, with the mortgages or any other incumbrances existing thereon, and of all writings relating thereto. Full details and j)ariiculars must be given of the stock ; each lot must be described as to the number of pieces, yards, etc., or number of dozens, etc. ; and the nominal as well as actual value of such property, includirig the nominal and actual value of the outstanding debts according to the best knowledge of the assignor or assignee. These values must be M ASSIGNEES. Section 42. stated, and the fact that it is sometimes difficult to arrive at them is never received as an excuse for not giving them. There should be two columns ; the nominal value should appear in one column, and the actual value in the next column on the same line. Prop- erly these values should be given of each lot of goods or mer- chandise composing the stock, and of each outstanding debt due the assignor at the time of the assignment. The nominal value is considered to be the cost price of merchandise, and the face amount of the outstanding debt. The actual value is the amount which the lot of stock or outstanding debt is believed to be worth at the time of preparing the schedules. Of course no one can tell positiveh/ what the exact actual values are, but they must be estimated so as to come as near as possible, however difficult it may be ; care being taken, as before suggested, that the actual values are not unnecessarily and improperly high or above what they really ought to be, considering the manner in which the property is to be disposed of, and the assignee's conscientious duty toward the creditors. The assignee should see that all discounts, and offsets, and de- ductions for goods returned, etc., are taken off in the schedule as to each lot or outstanding, as stated in the actual values. The General Assignment Act of 1877, as amended in 1878, provides that any party in interest may apply for an assignee' s re- moval, if he neglect, in case of a failure on the part of the assignor, to file an inventory and schedules within thirty days after the date of the assignment. The rules of the Court of Common Pleas in regard to assign- ments require that each page of the schedules and inventory must be signed by the party filing (the assignor or assignee, as the case may be)— they should be signed at the bottom of the page ; and also that where the schedules are filed by the assignee there must be a f ijll affidavit made by such assignee and some disinterested expert, showing the nature and value of the property assigned. SECTION 42. Assignee's Bond.— The law declares that " The assignee named in any such assignment shall, within thirty days after the date thereof, a/nd before he shall ha/oe any power or authority to sell, dispose of, or convert to the purposes of the trust any of the assigned property, enter into a bond to the people of Section 43. assignees. 55 the State of New York in an amount to be ordered and directed by the County Judge of the county where such assignment is re- corded, with sufficient sureties to be approved of by such judge, and conditioned for the faithful discharge of the duties of such assignee, and for the due accounting for all moneys received by him, which bond shall be filed in the clerk's office of the county where such assignment is recorded (in the city of New York, in the office of the clerk of the Court of Common Pleas) ; but in case the debtor shall fail to present such inventory within the twenty days required, then the assignee, before the ten days there- after shall have elapsed, may apply to said County Judge by veri- fied petition for leave to file a provisional bond, until such time as he may be able to present the schedule or inventory as here- inbefore provided." The rules before mentioned declare that the bond must be joint and several in form, and that at least one of the sureties must be a freeholder (that is, the owner of real estate within this State). Also that if the penalty of the bond be $20,000 or over, it may be executed by two sureties, justifying each in that sum, or by more than two sureties, the amount of whose justification united is double the penalty of the bond. (By justification is here meant the amount in value of a surety's property, either real or personal.) Where the assignee is desirous of taking immediate possession of the estate, and disposing of the same, as where it is perishable, and he is unable to file his schedule, the Court will, upon the assignee's affidavit, in which must be fully set forth the property assigned, its nature, value, and extent, showing good reason, why the schedules cannot be filed, fix the amount of a temporary or provisional bond to be given by the assignee, and the amount of a final bond will be determined when the schedules are filed. SECTION 43. Books of Account. — The rules read : " Every assignee shall keep full, exact, and regular books of ac- count of all receipts, payments, and expenditures of money by him, which said books shall always during business hours be open to the inspection of any person interested in the trust estate." In his books he should also insert, at the time of filing, the names and addresses of claimants who file their claims with him, with the amount of the claim and the date of filing the same. 56 ASSIGNEES. Sections 44, 45. SECTION 44. Continuing Assignor's Business.— An assignee cannot lawfully continue the assignor's business ; his only duty is to follow the directions given him in the assignment, convert the assets into money, and Tnake the payments directed. In some few cases it may be shown that it will be of advantage to the estate generally to manufacture the stock on hand, but it is dangerous for him to do this ; it may avoid the assignment, and he renders himself liable to be charged with wasting the assets. He had generally better sell the stock in its primary state as he finds it, without attempting to manufacture it, with other stock, into a completed state. SECTION 45. Notice to Present Claims, etc.— The rules and practice of the Court of Common Pleas require that notice to creditors to present their claims against the assignor must be advertised and mailed in all cases, whether a settlement or compromise has teen effected hy the assignor with his creditors or not — that is, if the assignee desires to be discharged, and he should always desire that when his duties are ended. The law declares that the judge may (and he always does in a proper case), upon the petition of the assignee, grant an order authorizing him to advertise a notice to creditors of the assignor to present to him their claims, with the vouchers therefor duly ver- ified or sworn to, on or before a day to be specified in such ad- vertisement, not less than thirty days from the last publication thereof, which advertisement or notice shall be published in two newspapers, to be designated by the judge in the order, as most likely to give no'^ice to the person to be served, not less than once a week for six successive weeks (this is the usual time, and is sufiScient) ; and if it appears by the assignor's books or other- wise (in which case it should be stated in the petition for the order to advertise) that any of the creditors reside out of the State of New York, then, in like manner, in the " State paper," which at present is The Albany Morning Express, office corner Green and Beaver Streets, Albany, N. Y. Its term as State pkper expires March 8th, 1885. There is a regular form for this notice, which it is well to follow ; it will be furnished by coun- sel. This notice, and all other notices in assignments in New York County, should always be advertised in The Daily Register, Section 46. assignees. 57 the official law journal of the county, office 303 Broadway'; New York The other newspaper, two only being necessary where none of the creditors reside out of the State, is designated by the judge in the order, according to his preference, but The Daily jBeg'isfe?' is always named. The charge for inserting this notice in the usual form in the newspapers (payment in advance always being required) is as follows : The Albany Morning Express, $7.70 ; The Daily Register, $7 (if the assignee desires to be economical, a good trait in an assignee, this paper will print for him copies or " slips" of the notice at 50 cents per hundred) ; The New YorTc Evening Express, $14.40 ; The 'World, about $12.60 ; The Star, about $14.40. These figures are liable to vary according to the size of the notice, a line or two making a difference of a dollar or two. The assignee should always send to the newspaper, when the advertisement is completed, for an affidavit of the publication of this or any other advertised notice. He should never forget to do this, as such affidavits are neces- sary on his accounting. It is also required that a copy of this notice should be mailed to all creditors named on. the assignor's books, at least thirty (30) days before the day mentioned in the notice for the presentation of claims. These and all other notices in assignment proceedings must be inclosed in a wrapper or envelope bearing a notice re- questing the postmaster to return it to the sender, giving his name and address, within ten days unless called for. An affidavit of such mailing must be made and preserved and presented on the assignee's accounting, showing hy whom the notices were mailed, when, and to all the creditors as required by the rule be- fore mentioned ; also showing the addresses to which they were sent. An affidavit must also be made showing what notices have been returned to th« sender as undelivered. SECTION 46. Payment of Claims. — An assignee should never pay a claim against the estate until it has been duly proven by the affidavit of the claimant duly sworn to before a notary pub- lic or other officer of like powers ; but he has no right to refuse to receive and iile a statement or memorandum purporting to be a proof of debt, because it is not sworn to. All claims before any payment is made thereon must be duly verified {sworn to), pre- 58 ASSIGNEES. Section 47. ferred and nnpreferred. The attention of assignees is especially directed to this section, as the Court of Common Pleas, following a decision of the Cotirt of Appeals, have recently decided that (mJ/y such claimants amd creditors as duly prove their claims a/re entitled to share im, the proceeds of the assigned estate. The assignee should be careful not to pay in full any claim (except preferred claims), unless he has the funds on hand to pay all in iull. Claims contracted by the assignor, however small, can have no preference unless preferred in the assignment. The payment of all claims should be deferred until the assignee's accounting at the close of the proceedings, as the assignee for his own protection should have the Court (and referee on the accoimt- ing) pass on the validity and proper proof of claims. Where he pays a claim before the accoimting, or any part of it, he does so at his own personal risk. In the great majority of cases, a, pro rata payment only is all that the creditors receive. The amount of such payment cannot be determined until all the claims proven are considered, and all expenses are deducted. A claimant may file his claim with the assignee after the expi- ration of the time limited in the notice to present, and in fact at any time up to the assignee's discharge after his last accounting ; but after the expiration of the time limited in the notice, if the assignee were to account immediately, and a computation made upon the amount of claims proven against the estate and allowed by the referee on the accounting, only those creditors whose claims were proven would be considered in the computation. In short, any claim filed at any time before the actual distribution of the assets by the assignee will be entitled to a dividend, if not objected to ; but where the claim is presented -after the case leaves the referee on the accounting, the assignee should not pay dividend on it except by special order of the Court, as its validity must be passed upon. SECTION 47. Payment of Preferred Claims.— He should be very careful in paying preferred claims to pay them in the exact order of preference set forth in the assignment, a failure to do this, with insufficient funds remaining to pay the injured creditors, would render the assignee personally liable to them. As this order of preference is sometimes a little difiScult to determine Section 48. assignees. 59 where tlie preferences are in classes, the assignee should never pay a preferred claim until he has first consulted his counsel in regard thereto. He should obtain and always retain a certified copy of the assignment for his guidance. He should always re- member the "reserve fund" mentioned in Section 19, under " Trustees," in paying preferred creditors. The assignee should always compel a preferred creditor to swear to his claim, in the same manner as if he were unpref erred. This protects the assignment somewhat, the assignor in his oath to the schedule having sworn also that the claim was owing to the creditor. In every assignment containing preferences the question arises. Can the assignee lawfully and safely pay the preferred claims im- mediately and before his accounting ? The question is an im- portant one. The circumstances attending each case are often so widely difEerent that we are unwilling to consider that there is a fixed rule as to all cases, and we must therefore advise the assignee to consult his counsel. We will say, however, that the majority, if not all the decisions of the Court of Common Pleas, on the question are to the effect that the assignee can lawfully pay the preferred creditors before the accounting, if the assign- ment is unimpeached. Orders have been granted by that court upon the petition of a preferred creditor directing the assignee to pay the claim, because the assignment had not been attacked by a judgment creditor. The inquiries as to the good faith with which the assignment was executed, the genuineness of the pre- ferred claim asked to be paid, and the probability or improbability of a successful suit by the judgment creditor to set aside the assignment, are all to be considered by the assignee before he pays a preferred claim. In most cases the assignees do pay pre- ferred claims before the accounting. SECTIOX 48. Selling the Assigned Property. — In making sales at auction (and that is the only way that an assignee should sell the property) the assignee must give at least ten days' notice of the time and place of the sale of personal property, and briefly describe the articles to be sold, being personal property, by advertisement in one or more newspapers (the ten days should be fuU and complete ; the last advertisement should be inserted be- 60 ASSIGNEES. Section 49. fore tlie tenth day prior to the sale) ; and he must give notice of the sale at auction of any real estate, at least twenty days before the day of such sale, the last advertisement being inserted more than twenty days prior to the day of the sale. Great care should be taken to observe all statutory requirements in the sale of real estate. The assignee must always sell by printed catalogues in parcels, and must file a copy of such catalogue, with the prices obtained for the goods sold marked thereon, with his final account. He of course has a right to, and always should, obtain the ser- vices of an auctioneer. He can choose his own auctioneer. He should always advertise the sale of either real or personal property, wherever it may be situated, in the Daily Register, oSice 303 Broadway, New York City, the official law journal of the County of New York, and in such other newspapers as he may choose. It has been decided by one of the judges of the Court of Com- mon Pleas in one case, that an advertisement inserted once in one newspaper is sufficient, but we recommend the assignee to advertise the sale of personal property once a week for at least two weeks, in at least two newspapers, and the sale of real estate twice a week for at least three weeks in at least two newspapers. Beside this advertisement he should always give notice by mail of any sale to all creditors, so that they may become purchasers if they desire. If the property to be sold is situated in another county or State, he should advertise the sale in some newspaper published in that county or State. He should always make every effort to have the property realize as much as possible. SECTION 49. Composition— Assignee's Accounting an(i Discharge. — An assignee who desires to have the assign- , nient proceedings closed on record, and his bond cancelled, and his sureties relieved from liability, must account in all cases, whether a comjaromise or settlement has been effected hy the assignor with his creditors or not. This is the rule and practice enforced by the Court of Common Pleas. And as he in some cases turns over the property in his hands to the assignor because of the compo- sition or settlement, he should observe through his counsel that the composition papers are regular in form. At any rate, the Section 49. assignees. 61 Court will not discharge him unless they are — that is, if he asks to be discharged, hecause the assignor has compromised with his creditors, and asks that the assignee deliver the property to him. The assignee should he particular, therefore, where a composition has been efEected, to see that all the papers in the composition proceedings are carefully executed hy the creditors themselves. A tliird party can execute them for a creditor only under peculiar circumstances, and the party signing should in such case show and swear to his authority ; where a firm signs, the firm name should be signed by one of the ' firm, and under it the member who signed it should sign his own name, preceded by the word " by." All papers in composition proceedings should be under seal and duly acknowledged before and certified by a notary pub- lic cr other officer of like powers, in proper form. It is better to have all the papers entitled in the assignment proceedings printed ; of course these should be prepared in proper form by counsel. A voucher and release and consent to reconvpy should be taken from each creditor. It is a common practice, though it is actually unlawful and im- proper, in cases where the assignor has effected a composition or compromise with his creditors, for the assignee to advance him the money from the assigned estate wherewith to pay the com- position payment — in other words, the assignor settles with his creditors upon the assumption that if they all sign the compo- sition agreement, that he can immediately use the proceeds of the assigned estate to pay the amount in settlement. This he has no right to do until the Court grants an order directing the assignee to reconvey the assigned estate or its proceeds, and such order will not be made until the Court is satisfied that all the creditors have been paid or provided with the composition payment, and generally not until after the assignee's accounting. Where the assignee, before such an order is made, voluntarily delivers the assigned estate or its proceeds to the assignor, he does so at his own risk, for if the assignor under promise that he would pay his composition payment, should pocket the money, the assignee would be liable to the creditors for the value of the property so delivered. Therefore the assignee should be satisfied that the assignor will act honestly before delivering to him the property, and we recommend him to always pay the amount of the compo- 6 62 ASSIGNEES. Sections 50, 51. sition in such a ease to the creditors himself. Of course the safer and better way is to proceed only on the order of the Court. An assignee may petition the Court for leave to account at any time after the assignment is made. He may be ordered to account upon the petition of a creditor, the assignor, or the sure- ties on the assignee's bond, at any time after the lapse of one year from the date of the assignment, and he may be ordered to account when he is removed. An assignee's account must be verified (sworn to). The afii- davit is to the effect that the account, according to the best of the knowledge, information, and belief of the assignee, contains a full and true accoimt of all his receipts and disbursements on account of the estate, and of all sums of money belonging to the estate which have come into his hands, or which have been re- ceived by any other person by his order or authority for his use, and that he does not know of any error or omission in the account to the prejudice of any of the parties interested in the estate. Vouchers must be produced for all payments exceeding twenty ■dollars in amount, and we recommend him to take vouchers for smaller sums. Any item exceeding twenty dollars in amount for which no voucher is produced wiU be disallowed, in which case he must take the amount of it from his own funds. All items of disbursement under twenty dollars, for which he produces no voucher, will be allowed only when he swears positwely (and not upon information and belief) that he paid them, to whom paid, when and for what purpose. The total amount of such items xm- supported by vouchers must not exceed $500. See Section 12, ante. SECTION 50. Assignee's Resignation or Removal. — An assignee may be removed on application of one or more creditors for misconduct or incompetency, and on his own peti- tion showing sufiicient reason therefor, upon five days' notice to the assignor, assignee's sureties, and to such other persons as the Court may direct. He must always account before he can be discharged, and then his bond will be cancelled, SECTION 51. Assignee's Commission and Compen- sation. — The statute declares that " the assignee or assignees Section 51. assignees. 63 named in any assignment shall receive for his or their services a commission of five per cent on the whole sum which will have come into his or their hands." Chief Justice Daly recently decided {In re HuTberi) that the five per cent above mentioned refers, as had been theretofore held, not only to money, but it also includes the amount and value of the property which passes through the assignee's hands, ,and that such value is the basis upon which an assignee's compensation is to be reckoned, and that in a case where the assignor has com- promised with his creditors, and they agree that the assigned |)roperty may be returned to him, the total amount paid in composition or compromise, together with all expenses and pay- ments by the assignee, is the proper value of the property assigned, upon which the assignee's commissions are to be computed. See Section 39 in regard to executor's commissions, which are governed to a certain extent, by the same practice as those of an assignee, but at a different rate. EECEIVERS. The attention of Receivers is directed to all information and instruction under the head of " Trustees,'''' as the matter there to he found is just as important to receivers as that con- tained under this title {which relates more exclusively to them) a/nd is not repeated here simply to avoid repetition. SECTION 52. Nature of the Oflace.— A receiyer is an oflElcer appointed by the Court, to take possession of, hold, control, and generally to dispose of certain property and its proceeds, under the order of the Court. , Probably the most common cases iu which a receiver is ap- pointed are where copartners are unable to agree, or where for any reason a dissolution is asked for. When a corporation be- comes insolvent, a receiver is generally appointed upon the appli- cation of the attorney-general, and in any case where property the title to which is in dispute or the interest of parties entitled to it is undetermined and disputed, the Court, pending the ques- tion to be decided, usually appoints a receiver. A receiver is also appointed where property of a judgment debtor is discovered upon his examination in supplementary proceedings. A receiver is an officer of the Court appointing him, and he derives all his authority solely from the order appointing him and the practice of the Court as regulated by statutes, and acts en- tirely under the direction of the Court. He represents all parties to the action or proceedings, and he should therefore be careful to always act impartially and without any favoritism to one party or the other. H e should never take any step in any matter of importance with- Section 53. eeoefvees. 65 out first receiving the sanction of the Court by its order. He probably possesses less discretionary powers than any other trustee. Ris principal duty is, as his name implies, to receive money and property to be disposed of under the direction of the Court, though in some cases he is empowered to carry on the business of the parties who owned the trust property before his appointment. Where a receiver is appointed in one action, he becomes thereby receiver of all the trust property, and represents not only the parties to the suit in which he was appointed, but also the parties to all subsequent suits relating to the same persons or property. SECTION 53. Bond— Security.— A receiver must always give security, whether all the parties interested consent that he act without giving a bond or not. The Code declares that " a receiver, appointed in an action or special proceeding, must, before entering upon his duties, execute and file with the proper clerk a bond to the people, with at least two sufiicient sureties, in a penalty fixed by the Court, judge, or referee making the appointment, conditioned for the faithful discharge of his duties as receiver. And the Court, or when the order was made out of court, the judge making the order by or pursuant to which the receiver was appointed, or his successor in office, may at any time remove the receiver, or direct him to give a new bond, with new sureties, with the like condition." Where the security given by the receiver become impaired by the insolvency of one of the sureties, or where additional property comes into his hands, he may, upon the application of a party in interest, be compelled to give additional security, in the shape of another bond with other or additional sureties. The amount or penalty of the bond to be given by the receiver is fixed by the Court appointing him, when it has by affidavit or otherwise ascertained the value of the property as nearly as pos- sible, that will come into the receiver's hands. The bond must be executed by the receiver and two sureties, and is to the effect that the receiver will faithfully discharge the duties of his office, and promptly obey all the orders of the Court. Where the penalty of the bond is considerable, it may be executed by more than two sureties. 66 EEOEivEES. Section 54. The receiver's appointment does not take effect until his hond has been duly approved and filed, and he cannot act until that is done. The title to the trust property becomes vested in him immedi- ately upon his giving the bond. SECTION 54. Duties and Powers.— His first duty, after giving his bond, is to take possession of the trust property. This he may do without further order of the Court. He may, where it is necessary, appoint a clerk or agent to assist him, but he should be careful not to make such an appointment if he can perform all the work himself ; otherwise he may not be allowed for it upon his accounting, and then he would be obliged to lose the money paid to such agent or clerk. He should not pay any considerable sum without the order of the Court. He must of ''course at all times protect the property and in- terests confided to his custody. He becomes vested with the title to all personal property of the receivership immediately upon filing his bond,, but he acquires title to real estate only by conveyance by direction of the Court. The party formerly in possession may be compelled to convey to him. The statute authorizes him to hold and dispose of real estate under the direction of the Court. All rights of action on contracts pass to the receiver, but claims for damages for per- sonal torts, as for malicious prosecution, slander, libel, assault and battery, etc. , do not, unless merged in judgment. The following is a copy of Eule 78, one of the " General Rvles of Practice" which have the same force as statiites : " Every re- ceiver of the property and efEects of the debtor shall, unless re- stricted by the special order of the Court, have general power and authority to sue for and collect all the debts, demands, and rents belonging to such debtor, and to compromise and settle such as are unsafe and of a doubtful character. He may also sue in the name of a debtor, where it is necessary or proper for him to do so ; and he may apply for and obtain an order of course that the tenants of any real estate belonging to the debtor, or of which he is entitled to the rents and profits, attorn to such re- ceiver, and pay their rents to him. He shall also be permitted to make leases, from time to time, as may be necessary, for Section 54. eeceivees. 67 terms not exceeding one year. And it shall be his duty, with- out any unreasonable delay, to convert all the personal estate and effects into money ; but he shall not sell any real estate of the debtor without the special order of the Court, until after judg- ment in the cause. He is not to be allowed for the costs of any suit brought by him against an insolvent, from whom he is un- able to collect his costs, unless such suit is brought by order of the Court, or by the consent of all parties interested in the funds in his hands. But he may, by leave of the Court, sell such des- perate debts, and all other doubtful claims to personal property, at public auction, giving at least ten days' public notice of the time and place of such sale. " ■ The statute requires a judgment debtor to deliver to a receiver appointed in supplementary proceedings, any personal property which may be discovered belonging to such judgment debtor, and the' receiver or any party in interest may apply for an order compelKng such delivery, directed to the judgment debtor, if the property is in his possession, or to a third party who holds it. So also, the sheriff may be compelled to pay and deliver to such receiver all money and property in his hands belonging to the judgment debtor, after deducting his fees. Where the proceedings in which the receiver was appointed are discontinued, or where the judgment has been satisfied, or where there is any surplus remaining in the receiver's hands after the satisfaction of the judgment, the receiver must, under the order of the Court onVy, pay and deliver to the judgment debtor or other person entitled to it, such property or surplus, upon the payment of his fees, and all other sums legally chargeable against the same. A receiver appointed upon the death of a sole surviving ex- ecutor has the same powers as the deceased executor. , A re- ceiver of a creditor of an insolvent's estate may consent to the vs^- solvent's discharge, when ordered to so consent by the Court. The new Code declares : That an order appointing a receiver of the property of a judgment debtor in supplementary proceed- ings, or extending the receivership (as where a judgment creditor in a second suit asks for the appointment of a receiver ; in such case the powers of the receiver originally appointed are extended 68 EECEivEES. Section 55. to the parties and property in or relating to such second or sub- sequent suit) must be filed in the ofiice of the clerk of the county wherein the judgment roll in the action is filed ; or if his ap- pointment is based upon an execution issued out of a court other than that in which the judgment is rendered, in the office of the clerk of the county wherein the transcript of the judgment is filed. The property of the judgment debtor is vested jn the receiver, who has qualified (or given his bond) from the time of filing the order appointing him or extending the receivership, except that real estate is vested in him only from the time when the order, or a certified copy thereof, as the case may be, is filed with the clerk of the county where it' is situated. Where the judgment debtor resides in another county of the State, a certified copy of the^ order appointing the receiver must be filed in the county where the judgment debtor resides. It is a general rule that the receiver's title relates back to the date of serving an order or warrant upon any party in relation to any of the property of the judgment debtor. The receiver is responsible for any loss that may result from his neglect in the care and management of the estate. He may apply to the Court for instruction in regard to the care and management of the estate, and, as we have before stated, he always should do so when any question of importance arises. SECTION 55. Suing and Being Sued.—" Whenever are- ceiver, appointed under proceedings supplementary to execution, shall apply for leave to bring an action, he shall present and file with his application the written request of the creditor, in whose behalf he was appointed, that such action be brought ; or elge he shall give a bond with sufficient security and properly acknowl- ■ edged and approved by the Court, to the person against whom the action is to be brought, conditioned for the payment of any costs which may be recovered against such receiver And leave to bring action shall not be granted except on such written re- quest, or on the giving of such security. " In all other cases where a receiver applies to the Court -for leave to bring an action, he shall show in such application that he Section 55. eeobivees. 69 has sufficient property in liis actual possession to secure the ]3er- son against whom the action is to be brought for any costs which he may recover against such receiver ; otherwise the Court may require the receiver to give such bond conditioned for the pay- ment of costs, and with such security as is above mentioned." " Ko receiver shall have power to employ more than one coun- sel, except under special circumstances and in particular cases re- quiring the employment of additional counsel, and in such cases only upon special application to the Court, showing such cir- cumstances by his petition or affidavit, and on notice to the party or person on whose behalf or application he was appointed. This rule shall apply to all receivers, present and future ; and no allowance shall be made to any receiver for expenses paid, or made, or incurred in violation of this rule." The two foregoing rules of the courts shall always be carefully heeded by the receiver. He should never bring proceedings of a criminal nature, as where he applies to have the defendant in an action brought by him, arrested, unless he not only receives the written request of the creditor for whom he is acting, but a very substantial bond with good sureties from such creditor, to the effect that he will indemnify the receiver for any loss or damage Hk may sustain ; for if the receiver should be unsuccessful the injured defendant could bring an action against the receiver personally, and charge him personally, not only for the costs, but also for dainages, for false imprisonment, etc. He should never in any event bring such an action except upon the recommendation of competent counsel, and unless he is well protected by a bond and the order of the Court. Being an officer of the Court it is contempt of Court to sue a receiver without permission of the Court appointing him, and, on the other hand, he must obtain the leave of the Coui-t to bring an action against some one else ; if he does not do so he will be personally liable for costs. In an action brought by a receiver, the Court may, in its dis- cretion, require him to give security for costs. See Eule T8, quoted near the beginning of the previous Sec- tion 54, a/)ite. 70 , EECEivEES. Sections 56, 57, 58, 59. He should generally obtain leave to defend an action brought against him as receiver. SECTION 56. Continuing Business, etc. — He should proceed to collect the outstanding debts due the estate, and sell the property vnthourt delay. He may in some eases be justified in car- rying on the business for a brief period in order to sell the prop- erty at a better price ; but he should be careful not to continue it too long, as the Court will not continue the business longer than is necessary to prevent a sacrifice of the property. SECTION 57. Sales. — He should convert the personal es- tate into money. He may obtain an order authorizing him to sell doubtful claims. He should always sell the property by auction, giving at least ten days' notice of the sale of personal property, the notice should be advertised once a week for three weeks in two newspapers, generally designated by the Court in the order. The Dail/y Hegister, official law journal of New York County, always being one in sales in this county. SECTION 58. Inventory. — He should always make and file an inventory of all the property which comes into his hands, with its appraised value. He should file one at the commencement of the proceedings, and at any time after when property comes into his hands. This he should do not only for his protection, but also for his convenience on his accounting. SECTION 59. Accounting. — The rules formerly required him to make and file an annual account or report, and it is an ad- vantage for him to do so, where the estate is large and his adminis- tration continues for several years. Of course when his administration is closed, and the proceed- ings are ended, he must always account to the Court before he can, be discharged. He first has his account showing all his re- ceipts and expenses prepared and filed, and he then petitions the Court for an accounting upon notice to all parties interested. The accounting is then referred to a referee, who examines the account and the receiver, and takes testimony and reports to the Court, upon which a decree is entered discharging the receiver and his sureties if everything is satisfactory. Sections 60, 61. eeceivees. 71 He should always give notice of his appointment by mail and advertisement, and require claimants to verify their claims within a fixed day, or be barred from sharing in a dividend to be paid at that time, if any. He should always give three weeks' notice of the payment of a dividend. SECTION 60. Compensation— Commissions.— Section 3320 of the Code of Civil Procedure reads : " A receiver, except as otherwise specially prescribed by statute, is entitled, in addition to his lawful expenses, to such a commission, not exceeding five per centum upon the sums received and disbursed by him, as the Court by which, or the judge by whom, he is appointed allows. ' ' The commissions are computed not only upon money, but on the value of the property which passes through the receiver's hands in place of money. One of the exceptions provided for in the above section is that of a receiver of a moneyed corporaUon, who, by the Laws of 1842, is allowed the same commissions as are allowed by law to an executor or administrator^viz. : For receiving and paying out all sums of money, not exceeding $1000, at the rate of five per cent ; for receiving and paying out any sums exceeding $1000, and not amounting to $10,000, at the rate of two and one half per cent ; for all sums above $10,000, at the rate of one per cent. SECTION 61. Receivers of Corporations. — A receiver of a corporation becomes vested with all the estate, real and per- sonal, of the corporation from the time of filing the required se- curity. He must immediately give notice of his appointinent by ad- vertising — "once a week for three weeks," the statute says,; but he should always continue it for six weeks so as to give ample notice. The notice should be published in the State paper, now The Albomy Morning Express, published at Albany, and in at least tw6 newspapers published in the county in which the principal place of business of the corporation is situated, and also by mail to all parties interested. The notice should be to the effect that the receiver was duly appointed by the Supreme Court, and that pursuant to an order of the Court, notice is 72 EECEiTEEs. Sectioii 61. given to all persons having claims against the corporation to pre- sent them within a time in the notice, which should be at least two months from the date of the last pubHcation of the notice. The notice should also require any debtor to the corporation to pay to him any debts or claims owing to it and deliver to him any property belonging to the corporation. He should also always give full and lengthy notice of the pay- ment of any dividend to all stockholders, creditors, claimants, etc. He should compel any subscribers to the capital stock of the corporation who have not paid for their shares, to do so, and for that he may, if necessary, and by leave of the Court, bring an action against them. He must call a meeting of all creditors of the corporation within four months after his appointment, and make to them at such meeting a statement of all his receipts and disbursements, and his balance on hand, and of all open and subsisting contracts with the corporation, and in certain cases he is authorized to cancel such contracts. He must pay all claims and demands against the corporation according to the order of preference given by the statute, which we do not give here for the reason that it is presumed that the receiver of a corporation will constantly consult his counsel, as the interests involved in such cases are of such magnitude that the right to pay each particular claim or class of claims, and to do any act generally, is to be carefully considered by his counsel. Generally, two dividends are to be paid, of both of which full notice should be given by advertisement and by rnail to all par- ties in interest. Within three months after the payment of the final dividend, the receiver must account. Notice should be given by publica- tion of the time and place of accounting. GUAEDIANS. The attention of Guardians is directed to all informa- tion and instruction wnder the head of ^'■Trustees,'''' as the matter there to he found is just as important to guardians as that contained under this title {which relates more exclusively to them), and is not repeated here simply to avoid repePition. SECTION 62. Nature of the Office— A guardian is a person who by law has the custody of the person and estate of an infant (and an infant, as we have previously stated, is, in this State, any person, male or female, under the age of twenty-one years ; in the Surrogate's Court an infant is generally called a minor, after the Civil law ; various rights accrue to the infant upon his attain- ing the age of fourteen years, the principal of which is that he is then allowed to nominate his own guardian). A person who is under the care of a guardian is called a ward. A guardian, iinless he sooner resigns or is removed, continues his protective care of his ward until the ward arrives at majority (twenty-one years of age). The relation of guardian and ward during this period closely resembles that of parent and child, though the guardian's duties are not exactly similar to a parent's. The guardian is not compelled to support the infant, except from the child's own estate, and he has no right to the ward's services. An infant's parents are his guardians by nature. In this State, where an infant acquires real estate, the guar- dianship belongs, j'jra^, to the father; second, to the mother.; and third, to the nearest and eldest relative of full age, males being preferred to females. But the appointment of a testamentary guardian appointed by the Court, supersedes the guardians just mentioned. 74 GTTAEDiANS. Sectioii 63. Tlie Supreme Court has the inherent power to appoint a gen- eral guardian, and it acts as guardian of all infants (the ward is allowed his choice if over fourteen) ; and that Court may require the guardian to account at any time for all money and property belonging to the ward. A testamentary guardian is appointed by a father's will (a guardian may also be appointed by deed), but the written con- sent of the mother is necessary to such appointment, although there is a decision to the effect that such consent is not necessary since the Law of 1871. In case of the omission of the father to make such disposition of the child, its mother may do so in like manner. The same person is usually appointed guardian of both the person and estate of the ward. The Surrogate may also appoint a general guardian, upon the application of any person in the infant's behalf, if under four- teen,' and upon the petition of the infant himself if over four- teen, who at that age has the right to nominate his own guardian, to be appointed by the Surrogate ; and upon the application for probate of a will, as to which infants are interested parties, and also upon the accountiag of an executor or administrator, the Surrogate appoints a special guardian to look after the interests of infants in the proceedings. And when an action is about to be brought by or against an infant, the Court (or ^ judge under the new Code, except in a partition suit, when the appointment must be made by the Court) appoints a person to prosecute or defend the action for the infant ; such a person so appointed is called a " guardian adUterrC (that is, for the suit). SECTION 63. Powers and Duties. — A general guardian, unless he sooner resign or is removed, continues his duties and protective care and custody of his ward until the latter reach his majority (that is, the age of twenty-one years). The guardian has almost the same power and authority over his ward that the father has. He has the care and custody of the ward's person and property (if appointed guardian of both his person and estate, which is usually the case, though there may be a separate' guardian for each). He may direct his education, Section 63. guaedians. 75 and change his place of residence, and supervise his religious and Hioralinstruction. The guardian is not entitled to the Avard's earnings for his services ; and on the other hand he is not re- sponsible for the ward's debts for necessaries beyond the value of the ward's estate in his hands! Guardianship of the person of a female generally ends when the ward marries, and in case of feniales guardianship of the property also, though if the deed or will of the parent should provide for such marriage before majority, and declare that not- withstanding the guardianship should continue during infancy, it is probable that marriage during minority would not end the guardianship. Decisions in this State are to the effect that the marriage of a male infant does not end the guardianship. The guardian appointed by order of the Court cannot consider himself released except by order of the Court. A person appointed guardian of the person and propei-ty of an infant, by an infant's parents, in a last will and testament or a deed executed by such parents, and where such parent shall have died after September 1st, 1880, cannot exercise within this State any of the powers or duties of such guardian, " unless the will have been duly admitted to probate, and recorded in the proper Surrogate's Court, and letters of guardianship have been issued to him thereupon ; or by virtue of an appointment contained in a deed of the infant's father or mother, being a resident of the State, unless the deed has been apknowledged or proved, and certified so as to entitle it to be recorded, and has been recorded in the office for recording deeds in the county in which the per-, son making the appointment resided at the time of the execu- tion thereof. "Where a deed containing such an appointment is not recorded within three months after the death of the grantor, the person appointed is presumed to have renounced the appoint- ment ; and if a guardian is afterward duly appointed by a Sur- rogate's Court, the presumption is conclusive." (Code, Section 2851.) Where a will was admitted to probate after September 1st, 1880, before letters are issued to the guardian, before he can enter upon the discharge of his duties, he must within thirty days thereafter (after the probate of the will), or within such further Y6 ' GUAEDiANS. Sectioa 63. time as the Surrogate may allow, not exceeding three months, take an official oath before the Surrogate, a notary public, or officer having power to administer oaths to be used in the Supreme Court, to the effect that he will well, faithfully, and honestly discharge the duties of his office as such guardian, and the same must hb filed with the Surrogate appointing him. A person appointed guardian by will may, at any time before he qualifies, renounce the appointment by a written instrument under his hand, filed jn the Surrogate's office. The Surrogate's Court has jurisdiction " to appoint and re- move guardians for infants ; to compel the payment and de- livery by them of money or other property belonging to their wards, and in the cases specially prescribed by law, to direct and control their conduct, and settle their accounts. " The guardian must carefully preserve and keep in good con- dition all the ward's property, real and personal, and if necessary, he may expend from the income of the estate funds for that pur- pose, and must deliver the property, and all its unexpended in- come and increase, to the ward when he comes of age, at which time he must also account to him for all the property and estate which has come into his hands as such guardian. If he makes or suffers any waste, sale, or destruction of the inherited real estate, he will lose the custody of the same and of the ward, and shall forfeit to the ward twice the sum at which the damages shall be taxed by the jury. Section 2846 of the Code is as follows : " Upon the petition of the general guardian of an infant's person or property, or of the infant, or of any relative or other person in his behalf, the Sur- rogate, upon notice to such persons, if any, as he thinks proper to notify, may make an order directing the application by the guardian of the infant's property, to the support and education of the infant, of such a sum as to the Surrogate seems proper, out of the income of the infant's property, or, where the income is inadequate for that purpose, out of the principal. ' ' As a matter of precaution, the guardian should always' obtain the sanction of the Court by its order, of the amount of the in- come or principal which he shall expend in the education and support of the ward, and this too even where the instrument by which he was appointed fixes the amount. Section 64. guaedians. 77 He should never use the principal or sell the infant's real estate without an order of the Court authorizing him to do so. All courts maintain a jealous watchfulness over the rights of infants, who are presumed to be ignorant of business affairs and generally helpless ; consequently a guardian should always act with great prudence, and after mature deliberation as to the best course to pursue for the infant's welfare. SECTION 64. Bond and Security.— A general guardian of an infant's property, before he receives his letters, and before he may lawfully do any act in his official capacity, must execute^ a bond, besides taking his official oath, to the infant, with at least two sureties, ia a penalty to be fixed by the Court, not less than twice the value of the personal estate of the ward and of the rents and profits of the real property. Each of the sureties must be worth the amount of the penalty of the bond over and above aiU his debts. By the Laws of 1881 the Surrogate is empowered to take a bond of a guardian for double the amount of three years' in- come from real property to which an infant may be-entitled, in his discretion. Where the guardian is appointed by the Supreme Court, the Court may in its discretion vary the security, where from special circumstances it may be found for the interest of the infant ; and may direct the principal of the estate, or any part thereof, to be invested in the stocks of the State of New York, or of the United States, or with the New York Life Insurance and Trust Company, the United States Trust Company, the Union Trust Company, the Brooklyn Trust Company, or the Farmers' Loan and Trust Company, and by rule adopted, July 25, 1881, in the Central Trust Company, which is now made a regular court de- positary to the extent of the above-named companies ; or on bond and mortgage upon unincumbered improved property of at least double the value of the amount invested, to be shown to the satisfaction of the Court, for the benefit of the infant, and that the interest or income thereof only be received by the guard- ian. The condition of the bond is, that the guardian will, in all things, faithfully discharge the trust reposed in him, and obey 6 <( (( 78 GDAEDiA^s. Section 65. all lawful direction of the Court touching the trust ; and that he will in all respects render a just and true account of all money and other property received by him, and of the application thereof, and of his guardianship, whenever he is required so to do, by a court of competent jurisdiction. The Surrogate may also require a guardian of an infant's per- son to execute a bond to the infant in a penalty to be fixed by the Surrogate, with or without sureties, conditioned that the guard- ian will faithfully perform all his duties, and account for all moneys which may come into his hands. SECTION 65. Account and Accounting.— As we have before stated, the Supreme Court has jurisdiction over all guard- ians, and it may require them to account at any time. The Surl'Ogate may compel a guardian appointed by him to account in the following cases only : " 1. By the ward, after he has attained his majority. 2. By the executor or administrator of a ward who has died. 3. By the guardian's successor, including a guardian ap- pointed after the reversal of a decree, appointing the persons so require to account. " (Code, Section 2847.) This refers to a " judicial settlement " of the account, and is distinct from the annual account required to be filed by the guardian, which we shall presently refer to. The Surrogate may also, where the guardian was appointed by the Supreme Court, require him in like cases to account. The following is a copy of Section 2842 of the Code of Civil Procedure: " A general guardian of an infant's property, ap- pointed by a Surrogate's Court, must, in the month of January of each year, as long as any of the infant's property, or of the proceeds thereof, remain under his control, file in the Surrogate's court the following papers : "1. An inventory, containing a fuUand true statement and description of each article or item of personal property of his ward, received by him since his appointment, or since the filing of the last annual inventory, as the case requires ; the value of each article or item so received ; a list of the articles or items remaining in his hands ; a statement of the manner in which he has disposed of each article or item not remaining in his hands ; Section 65. gttaedians. 79 and a full description of the amount and nature of each invest- ment of money made by him. "2. A full and true account in form of debtor and creditor, of all his receipts and disbursements of money, during the pre- ceding year ; in which he must charge himself with any balance remaining in his hands, when the last account was rendered^ and must distinctly state the amount of the balance remaining in his hands, at the conclusion of the year, to be charged to him in the next year's account." A guardian appointed by will or by deed may also be required to file such account upon the application of any party in interest, by the Surrogate's order. This annual account is carefully examined by the Surrogate, and is required so that he and the ward may Jjnow the condition of the estate. An afiidavit must be annexed to such account, which must state in substance " that the inventory and account contain, to the best of the affiant's knowledge and belief, a full and true statement of all the guardian's receipts and disbursements, on account of the ward ; and of all money and other personal prop- erty of the ward, which have come to the hands of the guardian, or have been received by any other person by his order or authority, or for his use, since his appointment, or since the filing of the last annual inventory and account, as the case re- quires ; and of the value of all such property ; together with a full and true statenlent and account of the manner in which he has disposed of the same, and of all the property remaining in his hands at the time of filing the inventory and account ; and a full and true description of the amount and nature of each in- vestment made by him since his appointment, or since the filing of the last annual inventory and account, as the case requires ; and that he does not know of any error or omission in the in- ventory or account to the prejudice of the ward." ' It will thus be seen that guardians are held to a strict account, but if they regulate their acts by the requirements of the fore- going oath, they will comply with the statute, and do all that can be required of them. A failure to file such annual account will subject the guardian to removal from office, and where the account filed by him is 80 GUAEDiANB. SectioQ 66. not full and complete, or is erroneous, He may be compelled to amend it, and file an additional and further account, lie must file such account where he has not filed it, or he must file a more detailed account when required, within three months after the service upon him of the order of the Surrogate requiring him to file such account. The guardian of an infant's person may also be required to account when he is shown to hare received money or property of the ward for which he has not accounted. The guardian himself (of either the infant's person or prop- erty) may present to the Surrogate's Court a written petition duly verified, praying for a judicial settlement of his account in the three cases before mentioned where he may be requi/red to ac- count, and he may at the same time ask for a discharge from his duties and liabilities. The requirements in regard to vouchers, and the proceedings generally on the accounting, are the same as those relating to an executor or administrator. SECTION 66. Commission and Compensation.— A guardian is entitled to the same compensation as is allowed by law to executors and administrators. See Section 39, under the head of " Executors and Administrators." A guardian is allowed com- mission on all receipts and payments of money by him during the year, where he renders an annual account, as he is now com- pelled to do by statute. Upon filing his first annual statement or account, he is allowed one half of the commissions stated in Section 39 above men- tioned, upon all moneys received by him, and half commissions on all moneys paid out by him pother than moneys invested or reinvested by, him in securities, leaving the balance of his haK commission to be computed upon the fund which has come into his hands, and which remains invested or unexpended at the time of the accounting, for future adjustment when ex- pended, or when finally accounted for ; and upon subsequently filing his, annual account, half commissions are to be computed in the same manner upon all sums received as interest or income, or as additions to the capital of the estate, since the last account was filed, and half commissions upon all sums expended, except as investments. Sections 67, 68, 69. gtjaedians. 81 SECTIOX 67. Removal from Oflace— The Surrogate is empowered, by Section 2832 of the Code, upon the application of a party in interest, the ward or any one in his behalf, or the guard- ian's surety, to remove the guardian from office, for the follow- ing causes : " 1. Where the guardian is disqualified by law, or is, for any reason, incompetent to fulfil his trust. " 2. Where, by reason of his having wasted or improperly applied the money or other property in his charge, or invested money in securities unauthorized by law, or otherwise improvi- dently managed or injured the real or personal property of the ward, or by reason of other misconduct in the execution of his office, or his dishonesty, drunkenness, improvidence, or want of understanding, he is unfit for the due execution of his office. " 3. Where he has wilfully refused, or without good cause neglected to obey any lawful direction of the Surrogate contained in a decree or an order ; or any provision of law relating to the discharge of his duty. " 4. Where the grant of letters to him was obtained by a false suggestion of a material fact. " 5. Where he has removed, or is about to remove, from the State. "6. In the case of the guardian of the person, where the in- fant's welfare will be promoted by the appointment of another guardian." So the guardiam, may petition to have his letters revoked, his account settled, and himself discharged ; but the Surrogate may in his discretion entertain or decline to entertain the application. SECTION 68, Guardian ad litem. — The Code declares that where an infant has a right of action he is entitled to maintain it, and being too young, presumably, to properly look after his own interests in the course of the litigation, the Court appoints a guardian ad litem, for him for that purpose. SECTIOX 69. Bond and Security of Guardian ad litem. — A guardian ad litem appointed for an infant is not per- mitted to receive money or property of the infant other than costs or expenses allowed to the guardian by the Court, until he 82 GUAEDiANs. Sectioii 70. has given sufficient security approved by a judge of the court or a county judge, to account for and apply the same under direc- tion of the judge. The security must be a bond to the infant in such penalty as the judge directs, not less than twice the sum or value of the property to be received, executed by the guardian and two sureties, approved and filed with the clerk of the court. This does not apply to the general guardian of an infant who has been appointed guardian ad litem (a guardian ad litem is always appointed in an action by or against an infant, whether there is a general guardian or not) ; but the Court may require the general guardian to give additional security ; but in an action for partition of an infant's real property, even a general guardian must always give a bond. SECTION 70. Miscellaneous Duties and Lia1}ilities. — A guardian ad Utem should mark on the front of all legal papers served upon him the exact date when they were served, and he should then immediately send or take them to his counsel. Delay may be injurious alike to the guardian and the infant. A guardian ad litem, for an infant plaintiff is by statute made responsible for the costs of the action ; such costs range in amount from $100 to $500, according to the amount in dispute and the intricacy of the question involved ; a guardian for an in- fant defendant is not liable for costs unless specially charged therewith by the order of the Court for personal misconduct. The written consent accepting the appointment of a guardian ad Utem, except the clerk of the court, niust always be pro- duced to the Court or judge making the appointment. COMMITTEES OF LUNATICS, IDIOTS, AND HABITUAL DRUNKAEDS. The attention of Committees is directed to qll inform^a- tion and ins^'uction under the head of " Trustees" as the matter there to be found in just as important to committees as that contained under this title {which relates more exclusively to them), and is not rejpeated here simply to a/ooid rejpetition. SECTION 71. Nature of the Office.— Formerly the care and custody of tlie persons and the property, both real and per- sonal, of lunatics, idiots, persons of unsound mind, and persons who are incapable of conducting their own affairs in consequence of habitual drunkenness, was vested in the Chancellor of. the State. But since the office of Chancellor was abolished, the same pow-, ers which 'he possessed are now vested in the Supreme Court and in the various County courts of the State, including the Court of Common Pleas for the City and County of New York, where the lunatic resides in that county, and each of these courts now has the power to appoint a committee of the person and estate of a lunatic or similarly incapable person. A committee (this word, although a collective noun, and gen- erally denoting more than one person, is in this connection usually employed to designate but a single individual) of course must himself or herself (a female, married or unmarried, may be appointed) be of full age, sound mind, and of some pecuniary re- sponsibility. He is usually nominated by the party in interest who petitions the Court for an inquisition to inquire into the alleged lunacy, drunkenness, etc., of the incapable party. The Court usually appoints as a committee some person who is con- 84: coMMTTTEEs. Sections 72, 73. nected by blood or marriage with tbe incapable party, and who has some interest in his welfare, though a stranger may be appointed. The commissioners, generally three, a lawyer, a physician, and a laymen, with the aid of a jury, hear and try the question of lunacy, etc., and if they decide that the party is a lunatic, idiot, habitual drunkard, or person incapable of managing his own affairs, a committee is appointed by the Court in which the pro- ceedings were commenced, by its order, duly entered. The committee should provide himself with a certified copy of this order as his authority to act. The coromissioners at the same time ascertain the nature and value of the incapable party's property and estate. A committee, like a guardian, may be either the committee of the person or property. One person may be committee of the person, and another the committee of the property, but usually the same person is appointed committee of both. SECTION 72. Bond and Security. — The same provisions of law now (under the new Code) relate to the amount and nature of the security required to be given by a committee as is required of a guardian ; for those provisions, see Section 64, under the head of " Guardians." A committee of the person must give security where a guardian of the person would be required to give it ; and a committee of the property, like a guardian of the property, must always execute and file his official bond before he can enter upon the discharge of his duties, and a committee of the person must also execute a bond before he has a right to act, when required to do so by the Court. SECTION 73. Power and Duties.— "A committee, either of the person or of the property, is subject to the direction and control of the Court by which he was appointed, Avith respect to the execution of his duties ; and he may be suspended, removed, or allowed to resign, in the discretion of the Court. A vacancy created by death, removal, or resignation may be filled by the Court. But a committee of the property cannot alien, mortgage, or otherwise dispose of real property, except to lease it for a term not exceeding five years, without the special direction of the Section 73. commiti'ees. 85 Court, obtained upon proceedings taken for that purpose." (Code, Section 2339.) The committee of the person of the lunatic, etc., must care- fully watch over him, and see that no harm comes to him ; he must do everything he can for the comfort and entertainment of his charge, always with a view of inducing the lunatic's recovery of his senses, if possible ; he must see that he is fed and clothed in a manner proportionate to the amount of income from his estate. Frequently in cases of extreme and acute afiliction it be- comes necessary that the incapable person should be confined in an asylum or hospital devoted to the treatment of persons simi- larly afflicted. In such cases it is not absolutely necessary that the committee should reside in the same institution, or even in the same city with the lunatic, etc., but he should in the first place personally proceed to the institution, and by inspection of the surroundings and conversation with its officers ascertain and satisfy hiraseK that it is a place where the lunatic will in all re- spects be well treated. The committee of the property must carefully keep and pre- serve it, and deal with it in all respects for the lunatic's interest. He may under direction and order of the Court sell the real estate of the lunatic. In such case he must of course account for its proceeds, so he may also be directed to purchase real estate where it is shown to the Court that it will be for the lunatic's interest to do so, and generally any disposition of his property may be made under the direction of the Court for the lunatic's benefit. The lunatic is primarily to be supported from the income of his estate, which the committee should invest in safe securities, as on bond and mortgage on real estate ; but where the income may prove insufficient to maintain him, then the principal must be devoted to that purpose. A committee of the property pays over to the committee of the person the funds necessary for the support of the lunatic. A committee should have the incapable party placed in an asylum only when necessary, and only on the order of the Court. Where the lunatic's estate is large, the committee may obtain leave of the Court authorizing him to employ a clerk or agent to assist him in the care and management of the estate, and that his compensation be paid out of the fund. 86 coMMiTTKBS. Scctions 7i, 75. Upon the death of the lunatic, etc., the committee's duties cease, except to pay over to the lunatic's executor (where he made a will when sane) or his administrator all property remaining in his hands, after deducting his expenses, commissions, and the costs of his accounting, but such property should be so transferred only upon the order of the Court. Section 2321 of the Code declares that the Court (through the committee) must preserve the property of such an incompetent person from waste and destruction ; and out of the proceeds thereof must provide for the payment of his debts, and for the safe keeping and maintenance and the education, when required, of the incompetent person and his famil/y. A committee pos- sesses the general power to sue and be sued by leave of the Court. SECTIOX 74. Commission and Compensation of the Committee.— A committee of the property is entitled to the same compensation as an executor or administrator, and for the compensation and commission to which an executor or adminis- trator is entitled see Section 39, under the head of " Executors and Administrators." But in a special case, where his services exceed those of an executor or administrator, the Court may allow him such an additional compensation for such additional services as it deems just. The compensation of a committee of the fer- son must be fixed by the Court, and paid by the committee of the property, if any, out of the funds in his hands. SECTION 75. Accounting.— A committee of a lunatic or other incompetent person must now, under the Code of Civil Pro- cedure, make and file the same annual account as is required to be filed by a guardian in the Surrogate's Court, and for the purpose of filing such account the committee is deemed a general guardian of the property, and the person for whom he is committee is deemed a ward. The account, etc. , must be filed in the office of th^ clerk of the court by which the committee was appointed, or if he was appointed by the Supreme Court, in the clerk's office where the order appointing him is entered. That is, the committee of the property must, iu the month of January of each year, as long as any of the incompetent party's property, or of the proceeds thereof, remains under his control, Sebtion 75. committees. 87 file in the clerk's office, as aforesaid : 1. An inventory, contain- ing a full and true statement of all the party's property, and its value, and the manner in which it has been disposed of ; and 2. A full and true account, in form of debtor and creditor, of all his receipts and his disbursements during the preceding year. Annexed to the inventory and account must be an affidavit, by the committee, to the effect they are in all respects true and cor- rect. (For fuller particulars as to the exact facts and items to be set forth in the inventory and account, and the statements to be made in the affidavit, see Section 65, ante, under the head of " Guardians.") INDEX, ADVERTISING page Trustee should give notice by 11 how often sales should be advertised generally 11 receipts obtained on paying for, should be preserved 11 affidavits of, when to be procured 11 " slips " of, may be obtained 11 when notices should be advertised in " State Paper " and County Paper 12 Executor and Administrator, must advertise notice to present claim 31 how long to be advertised 31 and in what newspapers 31 Assignee, must advertise notice to present claims 56 for how long and in what newspapers 56 ACCOUNTING Trustee, should account as soon as possible 18 What facts he must show on bis accounting ; 18 Executor and Administrator, different kinds of accounting by 45 " final accounting " defined 45 ■who must be notified 45 when he may be compelled to account 46 objections which he can make to being compelled to account. . . 46 when he may voluntarily account 47 who must be cited to attend 47 oath to account, what to contain , 47 Assignee, must account in all cases 60 should observe that composition papers are regular, how signed 61 as to advancing the money to assignor to pay composition 61 when he may voluntarily account 62 when compelled to account 63 account must be sworn to 63 nature of oath 62 vouchers must be produced for all payments over $30 63 Heceker, should make annual report or account 70 must account before being discharged 70 Guardian, when he may be compelled to account 78 must file an annual account in Surrogate's Court 78 what to contain 78' affidavit to, what to contain 79 penalty for not filing 79 when may voluntarily account 80 guardian df an infant's person may be required to account 80 Committee, must file same annual account as guardian 86 where to be filed, &c 86 90 INDEX. PAGE ACCOUNT BOOKS, see Books of Account. APPRAISAL Executor^s and Administrator's duties in, manner of, in Surrogate's Court 25 ARTICLES SET APART FOR WIDOW Executor'^s and Administrator's duties as to 36 articles enumerated 26 ADMINISTRATOR who is entitled to be, order of preference 21 by whom appointed ^. . . . 31 qualification of 21 bond and security 33 must alvrays give bond 22 when security to be given, nature and amount of 33 modified or reduced security in certain cases 23 sureties on bond, may be required to justify .... 33 deposit of securities in reduction of amount of bond 34 must furnish new sureties, when 34 must file inventory, within what time 25 must be sworn to 35 substance of oath to 35 penalty for refusing to file 36 must file supplemental inventory when '. 36 charged with costs when 36 chargeable with increase in inventory 26 commissions of 48 statutory rate of commissions ' 48 upon what computed 48 when, and by whom allowed 49 provision where there is more than one administrator 49 if rate of commission increased by statute entitled to increase 50 can receive no greater compensation than statute allows 50 when charged with interest ^ 39 time allowed to invest funds 39 may pay rent upon Surrogate's order in certain cases 84 cannot sell property set apart for widow or children 36 as to sale of personal property 80 must advertise notice to present claims 31 how long notice to be advertised 31 and in what papers 31 should hot pay claims in full, when 31 claim should be sworn to 33 claim may be presented after expiration of notice 33 may compromise claims due estate 33 claims preferred by law, order of preference 34 claims should not be paid in full unless estate is ample 85 no preference acquired where judgment recovered against ad- ministrator \. 35 all claims due estate should be collected 36 where he disputes claim proceedings to be taken 36 must always take vouchers for other than trivial expenses 28 when he may be allowed for payments made without 29 power over' estate 27 INDEX. 91 PAGE has same power as decedent to take possession 27 statute of distribution, provisions of 42 must distribute estate according to 41 legal representatives who are 43 distributive sliare what is 42 effect where child dies before receiving his share 43 how estate divided where intestate leaves a widow 43 if there be no widow ' 43 if no children 43 equal degrees ^ 43 unequal degrees 44 relatives of the half blood 44 born after 44 illegitimates 44 as to married women 44 advancement what is 44 different kinds of accounting by 45 " final accounting " defined 45 who must be notified 45 when he may be compelled to account 46 objections which he can make to application for him to account. . . 46 when he may voluntarily account 47 who must be cited to attend 47 oath to account, what to contain 47 See 'EXECUTOR for other subjects. Ancillary Administration, defined 48 ADMINISTRATOR WITH THE WILL ANNEXED. who entitled to be 21 ADVANCEMENT what is 44 ALBANY MORNING EXPRESS State paper 12 ASSIGNEES FOR THE BENEFIT OF CREDITORS must keep books of account 55 which are always open to inspection 55 names and addresses of parties filing claims should beentered. ■ • • • ■ 55 must file schedule and inventory, if assignor does not file, within what time _■ 63 when schedule filed by either, what the memoranda furnished coun- sel to prepare them should contain •. 58 all discounts, etc., should be deducted in 54 penalty for not filing, when assignor has not filed 54 schedules must be signed by party filing 54 must file bond, within what time 54 amount, and condition of bond 65 provisional bond, when given 55 his right to continue assignor's business 66 how he should take possession of assigned property 51 duty as to recording assignment in other counties 62 may sell real estate, length of notice to be given 60 92 INDEX. FAOB ASSIGNEES FOR THE BENEFIT OF CREDITORS— Continued, his duty where assignor compromises with his creditors when he turns over property to assignor 61 commissions, statutory rate of 62 how computed where assignor compromises with his creditors 63 should sell stock in its primary state 56 length of notice of sale of personal property hy auction ■ 69 notice of sale of real estate 60 must always sell by catalogue 60 is entitled to an auctioneer 60 sale should be advertised i 60 how often 60 notice should also be given by mail 60 notice where property situated in another county or state 60 must advertise notice to present claims in all cases 56 for how long and in what newspapers 56 length of notice 56 usual charges for advertising 57 affidavit of publication should be obtained. 57 affidavit of mailing notices 57 affidavit showing notices returned as undelivered 57 when he should not pay a claim 57 all claims must be sworn to 57 payment of claims should be deferred until after accounting 58 claims may be presented after time limited in notice 58 preferred claims, care to be taken in payment of 58 preferred claims should be sworn to 59 can he pay preferred claims before accounting ? 59 must take vouchers for all payments over |20 62 payment of dividend 58 when he may resign or be removed 54, 62 must account in all cases 60 should observe that composition papers are regular, how signed. ... 61 as to advancing money to assignor lo pay composition 61 when he may voluntarily account 63 when compelled to account 62 account must be sworn to. 62 . substance of oath 62 BOOKS OP ACCOUNT Trustee should keep 6 also memoranda of all his proceedings 6 what books and memoranda should contain 7 entries in, should be chronological 7 should contain entry of any property which comes into his hands after filing of inventory 8 also names of purchasers of trust property and full particulars as to sales 12 items in, showing payments for which vouchers taken should be numbered lo correspond with vouchers 14 should contain an entry of reason for difference between face amounts of outstanding debts due estate and actual col- lections 16 also full names and addresses of claimants^ and amounts of claims filed 17 INDEX. 93 TAGE Assignee must keep 55 always open to inspection 55 names and addresses of claimants should be entered 55 BANK ACCOUNT Trustee should always keep separate 9 form in which account should stand 9 penalty for not so keeping 9 BOND AND SECURITY Resident Executor not obliged to give unless ordered by the Surro- gate 33 non-resident executor must give, except in certain cases 22 Administrator must always give 22 within what time to be given 33 amount of, substance of bond 23 modified or reduced security in certain cases 23 sureties may be required to justify 23 one surety must be a freeholder, when 33 provisions of Code and rules in regard to deposit of securities in reduction of amount of bond 34 when new sureties to be furnished 24 suBeties may apply to be released 25 Assignee, must give, within what time 54 amount of penalty and condition of 55 provisional bond, when to be given 55 Seceieer must always give 65 amount of, condition of 65 may be compelled to give additional security 65 by whom executed 65 appointment does not take effect until given 66 Guardian must give 77 penalty, sureties, etc , 77 security may be varied when for infant's interest to do so ... . 77 condition of bond 77 Committee must give same bond as is required of guardian 84 COMMISSIONS Executor'' s and Administrator'' s statutory rate of 48 upon what computed 48 not charged on each legacy 48 nor on reinvestments 49 when, and by whom allowed 49 provisions of statute as to where there is more than one exe- cutor or administrator 49 where will provides for specific compensation 49 where successive or different letters are issued to the same person 49 when executor can, and when he cannot receive both commis- sions and allowance by will 49 where executor is also trustee how computed 50 where there are several executors or administrators 60 if rate of, increased by statute executor or administrator en- titled to increase 50 7 94 INDEX. PAGE COMMISSIONS— Continued. executor or administrator can receive no greater compensation than statute allows 50 may be apportioned by Surrogate 50 Assignee's statutory rate of 62 how computed when assignor compromises with his creditors. 63 Secewer's statutory rate of 71 upon what computed 71 rate of to receiver of moneyed corporation 71 GhMrdian's statutory rate of 80 how computed 80 Committers statutory rate of 86 CREDIT Trustee should never give 13 COMPOSITION Assignee's duty where assignor compromises with his creditors 60 when assignee turns over property to assignor 61 COMMITTEE OF LUNATIC, etc. nature of the office 83 qualifications of 83 how appointed 88 is always subject to the order of the court 84 duties of committee of the person 85 duties of committee of the property 85 must give same bond as is required of guardian 84 must file same annual account as guardian 86 where account to be filed 86 commissions, statutory rate of 86 CLAIMS AGAINST THE ESTATE Trustee, should preserve proofs of 17 how indorsed and filed 17 Executor and Administrator when should not pay claims in full 31 may be authorized to advertise for 31 length of notice, how given 31 claims should always be sworn to 82 may be presented after time limited in notice 83 may be barred by Statute of Limitations 38 leave to sell real estate to pay, may be obtained 88 preferred by law, order of preference 34 should not be paid in full unless estate is ample 35 no preference acquired where judgment recovered against / executor or administrator : 35 where disputed proceedings thereon 36 Assignee, must give notice to present in all cases 56 how notice given 56 length of notice 56 usual charge for advertising notice 57 affidavit of advertising notice to be obtained 57 notices to be mailed, affidavit of 67 INDEX. 95 returned as undelivered, afBdavit of ; 57 when he should not pay 57 all claims must be sworn to 57 payment should be deferred until after accounting 58 may be presented after time hmited in notice 58 preferred claims, care to be taken in payment of 58 preferred, should be sworn to 59 right to pay preferred claims before accounting 59 DEBTS OUTSTANDING AND DUE TO THE ESTATE Trustee^ should keep statements of moneys received on account of, separate from proceeds of sales 13 should always endeavor to collect 16 must account for face value and should make entry for cause for deduction therefrom 16 right to compromise 16 on accounting will be questioned in regard to 16 Executor and Administrator owing by executor or administrator not discharged because he is executor or administrator 33 may compromise 33 all debts should be collected 36 Receiver has general power to sue for and collect 66 DIVIDENDS Trustee — should always calculate amount of, himself 17 vouchers to be taken for payment of 17 notice to be given of payment of 17 Afsignee — payment by 58 DISTRIBUTION, STATUTE OP Administrator — must distribute estate according to 41 provisions of 42 legal representatives, who are 42 distributive share, what is 42 effect where child dies before receiving his share 42 provisions of, where intestate leaves a widow 42 if there be no widow 48 if no children 43 equal degrees 43 unequal degrees 44 relatives of the half blood 44 born after 44 illegitimates 44 as to married women 44 advancement, what is 44 DAILY EEaiSTER, THE official law journal of the City and County of New York 13 EXECUTOR who may, and who may not be 30 liability of one for acts of another. 30 must file inventory, within what time , 35 what is an inventory 25 96 INDEX. PASS EXECUTOR— Continued. inventory must be sworn to 25 substance of oath to 25 penalty for refusing to file. 26 supplemental inventory, when to be filed 26 when tardy in filing charged with costs 26 eflect where inventory filed by one executor only 26 inventory prima facie evidence of value of estate 26 efiect of increase or decrease in amounts in 26 articles set apart for widow to be included in 26 when charged with interest 29 interest on legacy when begins to run 29 time allowed to invest funds after which interest runs 29 may pay rent, upon Surrogate's order in certain cases 34 cannot sell property set apart for widow or children 26 may sell real estate when devised to him for that purpose 28 accountable for proceeds thereof 30 also as to personal property 80 resident executor not obliged to give a bond unless ordered by the Surrogate 33 non-resident executor must give, except in certain cases 33 when he gives bond it is the same in effect, amount, etc., as admin- istrator's 33 must advertise notice to present claims, when 31 how long to be advertised 31 and in what newspapers, etc i 31 return day, when 31 should not pay claim in full, when 31 claims should always be sworn to 32 claim may be presented after time hmited 32 claim may be barred by Statute Limitations 33 debt owing by to estate not discharged because he is executor 33 may compromise debt due estate 33 may apply for leave to sell real estate to pay claims 33 claims preferred by law, order of 34 claims should not be paid in full unless estate is ample 35 no preference acquired where judgment recovered against 35 all debts due estate should be collected 36 where he disputes claim, proceedings thereon 36 must always take vouchers for other thain trivial expenses 28 when allowed for payments made without 39 may renounce appointment, how 21 when deemed to have renounced 32 result of death of one executor 22 different kinds of accounting by 45 " final accounting," what is 45 who must be notified. 45 when he may be compelled to account 46 objections which he can make to being compelled to account 46 when he may voluntarily account ; 47 who must be cited to attend 47 oath to account, what to contain 47 duties as to appraisal of decedent's estate 35 articles set apart for widow and children, duties as to 26 articles enumerated 2S INDEX. 97 power over estate possessed by 27 has same power as decedent to take possession 27 has no power over real estate unless devised to him in trust 28 in such case he may sell, being accountable for proceeds 30 legacies are of various kinds 37 general, what are 37 specific, what are , 37 demonstrative, what are 37 general, to be first sold to pay debts 38 abatement, what is 38 when legacy has adeemed 38 annuities, how considered 38 when legacies vested, contingent, absolute and conditional 38 residuary, what are 39 lapsed, what are 39 specific to be paid before general 39 deficiency of assets, how made up ' 39 efiect of birth of child after decedent's death 39 effect where legatee is a necessary subscribing witness 39 where legatee Is a minor 39 when legacies to be paid generally 40 ma}' be sooner paid 40 may offset claim due estate against legacy 41 commissions, statutory rate of 48 upon what computed 48 not charged on each legacy 48 nor on re-investments 49 when, and by whom allowed 49 provisions of statute where there is more than one executor 49 where will provides for specific compensation 49 . where successive or different letters are issued to same person 49 when he can, and when he cannot receive both commissions and allowance 49 where he is also trustee, how computed , 50 when several executors 50 if rate increased by statute he is entitled to increase 50 can receive no greater compensation than statute allows 50 commissions may be apportioned by Surrogate 50 For other subjects see Administbator. GUARDIAN who is a 73 period of guardianship 73 relation to ward 73 power of Supreme Court over 74 testamentary and general guardian, how appointed 74 duties nearly same as parent's 74 efiect of ward's marriage 75 when guardianship ceases 75 guardian appointed by will or by deed can act only after certain prescribed conditions 75 nor until he has taken oath of office 76 must file inventory and account 78 when to be filed 78 what to contain 78 98 HfDEX. FAQS GUARDIAN— Continued. must be sworn to, contents of oath 79 penalty for not filing 79 grounds for his removal , 81 may resign 81 when he may be compelled to account 78 must file an annual account. 78 what to contain 78 affidavit to 79 penalty for not filing 79 may voluntarily account 80 guardian of person may be required to account 80 commissions, statutory rate of 80 how computed 80 must give bond. 77 penalty, sureties, etc 77 security may be varied when for infant's interest 77 condition of bond 77 GUARDIAN AD LITEM who is a 81 bond and security 81 duties and Uabilities 83 INVENTORY AND SCHEDULES should be prepared and filed at commencement of proceedings 8 Trustee should examine to see if correct in all respects 7 when filed by trustee are an admission of amount and value of property i^i-his hands 7 is the basis upon which accounting proceeds 7 copy of, should always be obtained by trustee for his guidance 8 should be made of property taken by sheriff. 8 on accounting he must explain cause of difference in face values and actual collections 16 Executor and, Administrator must file, within what time 25 what is an inventory 25 must be sworn to 35 oath to 25 penalty for refusing to file 26 supplemental inventory, when to be filed 36 when executor or administrator tardy in filing may be charged with costs 36 effect where filed by one executor or administrator only 26 in prima facie evidence of value of estate 26 effect of increase or decrease in 26 articles set apart for widow to be included in 36 Assignor must file within what time 53 ! must file within what time 63 whenever filed by either the memoranda furnished counsel to prepare should contain what 53 all deductions by way of discounts, etc., should appear by. ... 54 penalty when assignee fails to file, when assignor has not filed. 54 must be signed and sworn to by party filing 54 • must iile, when 70 INDEX. 99 PAQB Gua/rdian must file, and account , 78 when to be tiled 78 what to contain 78 must be sworn to, oath to 79 penalty for not filing 79 Committee must file same inventory and account as guardian 86 INTEREST Trustee, when charged with 9 Executor and Administrator, when charged with 29 on legacy, when begins to run 29 time allowed to invest funds, after which interest runs 39 INSURANCE Trustee may pay premium 16 "INFAMOUS CRIME" what is 20 LEGACIES are of various kinds . . . .' 37 general, what are 37 specific, what are 37 demonstrative, what are 37 general, to be first sold to pay debts 38 abatement of, what is 38 when said to have adeemed 38 annuities, how considered 38 when legacies vested, contingent, absolute, and conditional. 38 residuary, what is .• 39 lapsed, what is 39 specific to be paid before general 39 deficiency of assets, how made up 39 effect of birth of child after decedent's death 89 eflfect where legatee is a necessary subscribing witness 39 where legatee is a minor 39 when to be paid 40 may be sooner paid 40 executor or administrator may ofifset claim due estate against leg- acy or distributive share 41 NOTICE TO PRESENT CLAIMS See Claims Against the Estate, in this Index OUTSTANDING DEBTS See Debts Outstanding and Due the Estate, in this Ifidex OFPICAL LAW JOURNAL of the City and County of New York, name, and address of the. . . 12 PURCHASERS Trustee should ascertain names of 12 cannot be a of any of trust property 13 100 INDEX. I PAGE POWER OVER ESTATE possessed by Executor and Administrator 27 Assignee's right to continue assignor's business 56 Seceiver — right to continue business 70 RECEIVER who is a 64 when and by whom appointed, authority 64 is an officer of the court 64 acts under order of court 64 , may appoint clerk 66 how acquires title to real and personal property 66 general powers to sue for and collect debts, rents, etc 66 may make leases, convert property into money, but cannot sell real estate without order of court 67 may compel delivery of property to himself 67 possesses power of executor in some cases 67 order appointing receiver of property of judgment debtor must be filed in office of County Clerk 68 and in county where judgment debtor resides 68 when property vests in •. , 68 may sue and be sued 68 must obtain consent to bring action 68 or give security for costs 69 can employ but one counsel generally 69 never should bring action of criminal nature without indemnity bond 69 contempt to sue without leave 69 may continue business under some circumstances 70 commission, statutory rate of. . » 71 upon what commissions computed 71 rate of commissions to receiver of money corporation 71 how, and when he should sell property 70 should make annual report 70 must account before being discharged 70 must always give a bond 65 amount of, condition of 65 may be compelled to give additional security 65 ; by whom bond executed 65 appointment does not take effect until bond given 66 cannot sell real estate without special order of the court 67 Receiver of corporations 71 RENT Trustee should always enter into new contract with landlord as to. . 9 claim for not preferred by law , 9 Executdr and Administrator rasi^ pay, upon Surrogate's order in cer- tain cases 34 RESERVED FUND what is a.. 18 Trustee should always retain 18 INDEX. 101 _ PAGE RENUNCIATION, RESIGNATION, AND REMOVAL Trustee, how he can resign and when be removed 19 Executor may renounce, how 31 when deemed to have renounced 23 in case of death of one executor or administrator 33 Assignee, when may resign or be removed 54, 62 Guardian, grounds for removal 81 may resign 81 REAL ESTATE Trustee should not sell until he has inquired as to order for 10 what interest he sells 10 Executor has no power over, unless devised to him in trust 28 in such case he may sell, being accountable for proceeds 30 Assignee may sell, length of notice to be given 60 Receiver cannot sell without special order of the court 67 Statute governing Descent of 41 SCHEDULES See Inventory and Schedules STATUTE OF DISTRIBUTION See Distribution, Statute of STATUTE OF DESCENT 41 SALES Trustee should sell at auction only 10 advantage of auction sale 10 notice of, to whom given * 10 property should never be sold at private sale 10 sometimes necessary to have order of court directing 10 of real estate, how sold 10 property should be sold in its primary state 10 memorandum should be kept of date of 13 Executor and Administrator cannot sell property set apart for widow or children 26 may sell real estate when devised to him for that purpose 28 accountable for proceeds of 30 also as to personal property 30 Assignee should sell stock in its primary state _ 56 length of notice of sale of personal property by auction 59 length of notice of sale of real estate by auction 60 must always sell by catalogue 60 is entitled to an auctioneer 60 sale should be advertised in " The Daily Register " 60 how often he should advertise notice of sale 60 notice should also be given by mail to creditors 60 where property situated in another county or state 60 Receiver, how and when he should sell property 70 STATE PAPER Albany '' Morning Express " is the 13 102 INDEX. TRUSTEE who is a 5 who may be a 5 never should perform attorney's duties ' 5 is always open to criticism '. 6 cannot employ trust estate in any manner for his own profit 8 may pay taxes 16 should keep proper books of account 6 also memoranda of his proceedings 6 what books and memoranda should contain 7 entries in books should be chronological 7 should contain entry of any property which comes into his hands after filing of inventory 8 should contain names of purchasers of property and full particulars as to sales 12 items in books showing payments for which vouchers taken should be numbered to correspond with vouchers 14 books should contain an entry showing cause of difference between face amounts of outstanding debts due estate and amounts actually collected 16 also full names and addresses of claimants and amounts of their claims filed with him 17 should always examine inventory and schedules to see if correct in all respects 7 when filed by himself are an admission of amoimt and value of property in his hands 7 inventory is basis upon which his accounting proceeds 7 inventory should be prepared and filed at commencement of proceed- ings 8 copy of inventory should always be obtained by him for his gui- dance 8 inventory should be made of property taken by Sheriff. 8 on his accounting he must explain cause of difference between face amounts of debts due estate and amounts actually collected. . . 16 \ never should give credit ; 13 should always keep bank account separate 9 form of — penalty for not so keeping 9 when he will be charged with interest 9 should always enter into new contract with landlord as to rent .... 9 claim for rent not preferred by law 9 should sell property at auction only 10 advantage of auction sale, 10 notice of sale, to whom given ; 10 property should not be sold at private sale 10 sometimes necessary to have order of court directing sale 10 how to sell real estate. 10 property should be sold in its primary state 10 memorandum should be kept of date when sales occur 12 should give notices by advertising. 1 how often sales should be advertised generally. . , j receipts obtained for advertising should be preserved 1 I affidavits of advertising, when to be procured 1 " slips " may be obtained ■ 1 when notices should be advertised in state and county papers 13 should always ascertain names of purchasers 12 INDKX. 103 PAGE cannot purchase, trust property himself 12 statements of debts due estate collected should be separate from statement of sales 13 should endeavor to collect all debts due estate 16 must account for full value 16 right to compromise debt 16 should preserve proofs of claims against estate 17 how endorsed and filed 17 must always take vouchers for payments exceeding $20 13 particulars to be stated in vouchers 13 suggestions in regard to what a correct voucher should contain. ... 14 how agent should sign 15 form of voucher 15 may pay insurance premiums 16 should always calculate amount of dividend himself 17 vouchee to be taken for payment of. 17 notice to be given of paymetit of dividend 17 what is a " reserved fund " 18 should always retain fund 18 how he can resign and when be removed 19 should always account as soon as possible 18 what facts he must show on his accounting 18 may pay taxes .... 16 TAKING POSSESSION Executor and Administrator has same power as decedent 27 provision of law where will relates to real property 28 Assignee, how he should take possession 51 duty as to recording assignment in other counties 52 TAXES Trustee may pay 1^ VOUCHERS Trustee, must always be taken for payments exceeding $20 13 particulars to be stated in • • 13 suggestions in regard to, what a correct voucher should contain 14 how agent should sign 15 form of -^5 Executm- and Administrator must always take, for other than trivial expenses • 28 when he may be allowed for payments made, without 29 must take ^2