Opinion per FINCH, J.

of fact which the surrogate had. We are of opinion, therefore, that the point of jurisdiction of the General Term urged by the appellant is not well taken.

We are not sure that what has been said may not be inconsistent with some expressions in Angevine v. Jackson (103 N. Y. 470) but the principle there decided, that there must be an exception in order to raise a question of law in the appellate court, is unquestionably sound. The disposition of the point discussed leaves but little to be said. The General Term has power to reverse on the facts. The case of Sutton v. Ray (72 N. Y., 482), conclusively shows that this court will not review the order of the General Term directing issues. The claim that the contestant was not aggrieved by the decision of the surrogate has no force.

We think the proper disposition of the case is to dismiss. the appeal, leaving it to stand upon the order of the General Term.

FINCH, J. I am inclined to agree in the result reached by the foregoing opinion, and to modify the doctrine of Angevine v. Jackson, so far as to hold that even in probate cases, and notwithstanding the supposed tenor of section 2545, an exception to a finding of fact is neither permissible nor necessary. In that action, nevertheless, our conclusion was correct, because no case was made and settled and signed by the surrogate, as the Code explicitly commands (§ 2576), when the appeal is sought to be taken upon the facts; and the papers did not show that the whole evidence was returned, as the General Terms have required by decisions which we have approved. (Spence v. Chambers, 39 Hun, 193; Porter v. Smith, 107 N. Y. 531.) While I thus agree that an exception to a finding of fact is not essential to a review of the facts, I am not yet sure that, by attacking the facts, one may review and reverse the final conclusions of law without any exception taken to them, or some of them; or that an exception to such conclusions of law has no wider effect on an appeal to the General Term, where the facts are open to review, than we

Statement of case.

have given it on appeal to this court, where the findings are, in general, conclusive. These questions are not involved in the case at bar, as presented for our consideration, and, while the law may be as intimated, I prefer to reserve a final judgment upon them till they are necessarily presented.

All concur with ANDREWS, J.; FINCH, J., concurring in result.

Appeal dismissed.

PHILIP DEOBOLD, as Executor, etc., Respondent, v. FREDERICK
OPPERMANN, Jr., et al., Appellants.

The sureties upon an administrator's bond are his privies, and so are pre-
cluded from questioning any lawful order made by the surrogate in pro-
ceedings wherein the administrator is a party, if obtained without collu-
sion between him and the next of kin or creditors of the estate.
A decree, therefore, of a surrogate setting aside, on the ground of fraud, a
decree rendered on the final accounting of an administrator, which by
its terms discharged the sureties, and ordering a further accounting, is
binding on the sureties, although they were not served with notice of the
application; and the omission to give notice is no defense to an action
brought pursuant to an order of the surrogate directing the prosecution
of the bond because of the failure of the administrator to pay over a
sum directed, on a further accounting, to be paid by him to one of the
next of kin.

Nor is it any defense that, pursuant to an agreement made with them at
the time the sureties executed the bond, the administrator deposited with
them the proceeds of the estate, to be retained until they were discharged
from liability on the bond, and with the authority to use the proceeds in
their business, they paying interest, and that upon the rendition of the
decree discharging them they paid over the amount so deposited.
Such a contract is invalid and gives the sureties no right to retain funds
received by virtue of it, and it seems an action could be maintained
against them by the administrator to reclaim the funds, in case of refusal
to pay them over.

A party cannot claim to have been defrauded who has been induced by
artifice to do that which the law would have compelled.

The object of an administrator's bond is to relieve the next of kin from the necessity of resorting to the personal liability of a dishonest, negligent or absconding administrator, and so it is the duty of the sureties, not that of the next of kin, to pursue the administrator for money of the estate improperly retained by him.

Statement of case.

When an administrator obtains by fraud a decree awarding the funds of the estate to him and canceling his bond, this, in itself, is a breach of the covenant of the bond that he will faithfully execute his trust, and renders the sureties liable; they cannot stand as innocent parties in relation to an act which they have covenanted shall never be performed. The employment of the trust fund by an administrator or other trustee for his individual benefit, or as loans to persons engaged in and to be used in business, is illegal and constitutes a derastarit, and the funds may be reclaimed by the trustee or the beneficiaries of the trust from anyone receiving them with knowledge of their character.

A transferee from an executor or administrator cannot protect himself from an action brought by the trustee to reclaim the trust fund by showing that such trustee is a legatee under the will or next of kin to the intestate, and thus entitled to an interest in the fund.

An executor or administrator cannot bind the estate to any use of its funds by contract with third persons having knowledge of their character except in the ordinary and usual course of administration.

The next of kin of an intestate are entitled not only to the security afforded by the bond of the administrator, but also to that of the funds of the estate remaining in his hands, and it is unlawful for him to place those funds beyond the reach of the Surrogate's Court, and irreclaimable until after the duties of administration have been performed.

It is no defense, therefore, in an action against a third person to recover possession of such funds, that he holds them by virtue of a contract with the executor or administrator.

(Submitted October 19, 1888; decided December 11, 1888.)

APPEAL from judgment of the General Term of the Supreme Court in the first judicial department, entered upon an order made December 31, 1886, which affirmed a judgment in favor of plaintiff, entered upon a verdict directed by the court, and affirmed an order denying a motion for a new trial.

The nature of the action and the material facts are stated in the opinion.

Ashbel P. Fitch for appellants. The plaintiff must show, to entitle him to a verdict in this action, that in a subsequent proceeding to which the defendants were parties, the liability of the defendants on the bond was restored. (Browning v. Vanderhofer, 4 Abb. N. C. 166.) Of two innocent parties, that one must suffer who puts it in the power of the third person to do the act which caused the injury. (Greenleaf v.

Statement of case.

Stanton, 6 Week. Dig. 33; Manufacturers and Traders' Bank v. Hazard, 30 N. Y. 326.)

George F. Langbein for respondent. The arrangement or agreement between the sureties and the administratrix for indemnity was void as against public policy. (Poultney v. Randall, 9 Bosw. 234; Wilder v. Butterfield, 50 How. Pr. 386; Hill on Trustees, 266; Higgins v. Healey, 47 N. Y. Supr. Ct. [15 J. & S.] 209; Seaman v. Duryea, 11 N. Y. 330.) The sureties were not innocent third parties. (Theobald on Principal and Surety, 1; Hill on Trustees, 266; Cushing v. Gore, 15 Mass. 60; Stewart v. Eden, 2 Caines, 121; 14 Am. L. Rev. 839; Jones v. Quinnipiak Bk., 29 Conn. 15; Dudley v. Hawley, 40 Barb. 397; Hoffman v. Carson, 22 Wend. 285; Cobbs v. Dow, 9 Barb. 230; Ely v. Ehle, 3 Comst. 506; 1 Smith's L. C. 488; Stanley v. Gaylord, 1 Cush.. 550; Platt v. Tuttle, 23 Conn. 233; Justice v. Mundell, 14 B. Monroe, 12; Spraights, Exr. of Dudley, v. Hawley, 39 N. Y. 441; Hunter v. H. R. I. & M. Co., 20 Barb. 493, 494; Moore v. Payne, 12 Wend. 123.) If the sureties had a right to have this estate in the manner in which they had it in their hands, it was their own negligence that they gave it back to the administratrix. (Devoe v. Fanning, 2 Johns. Ch. 251; Gardner v. Ogden, 22 N. Y. 327; Linke v. Wilkinson, 57 id. 445, 451-453; Pringlev. Phillips, 5 Sandf. 157; Danforth v. Vanderwoort, 4 Duer, 101.) The sureties were never discharged from liability. (7 Wend. 435; 21 id. 270; Gardner v. Barney, 24 How. Pr. 467; Van Gerhard v. Lighte, 13 Abb. Pr. 101, 103; Watt v. Reilly, 62 How. Pr. 351; In re Van Horn, 7 Paige, 46; 1 Crary's Spec. Pro. 442; Keily v. Dusenbury, 42 N. Y. Supr. Ct. 238; Westervelt v. Smith, 2 Duer, 456, 457; Thayer v. Clark, 4 Abb. Ct. App. Dec. 391; 48 Barb. 243; Schofield v. Churchill, 72 N. Y. 566; Douglass v. Howland, 24 Wend. 35; Jackson v. Griswold, 4 Hill, 522; Arnett v. Sherry, 35 N. Y. 256, 260; Baggett v. Boulger, 2 Duer, 160; Gerould v. Wilson, 81 N. Y. 583; W. N. Y. L. Ins. Co. v. Clinton, 66 id. 331; Louman v.

Opinion of the Court, per RUGER, Ch J.

T

Yates, 37 id. 604; Gottberger v. Taylor, 19 id. 150; Gordon v. McCarthy, 3 Whart. [Penn.] 407; Coleman v. Bean, 1 Abb. Ct. App. Dec. 374; Lee v. Clark, 1 Hill, 56, Buel v. Gordon, 6 Johns. 126; Page v. Russel, 2 M. & S. 551; Welsh v. Welsh, 4 id. 333; Frost v. Carter, 1 Johns. Cas. 73, 2 Caine's Cases in Error, 310; Macdonald v. Bovington, 4 T. R. 825; Mayor v. Steward, Burr. 24, 39; Lucas v. Winton, 2 Camp. 443; Ballard v. Burgett, 40 N. Y. 314; Belloni v. Freeborn, 63 id. 387.)

RUGER, Ch. J. This action was brought by the plaintiff as executor of the estate of his mother, Maria Deobold, to recover from the defendants as sureties upon the bond of Louisa Deobold, given upon her appointment as administratrix of the estate of her husband Henry Deobold, a sum of money ordered by the surrogate to be paid to Maria Deobold, as mother and next of kin to the intestate, but which the administratrix refused or neglected to pay. The trial court directed a verdict for the plaintiff, and the judgment entered thereon was affirmed upon appeal. The Supreme Court having granted leave to appeal to this court, the matter con.es here for review.

The record presents the following facts, the evidence being practically undisputed. Prior to January 16, 1880, Henry Deobold, a resident of the city of New York, died possessed of personal property of the value of about $3,300 and leaving him surviving his widow, Louisa Deobold, his mother, Maria Deobold, and brother Philip Deobold, next of kin. On that day the surrogate of New York issued letters of administration upon the estate to the widow, Louisa Deobold, and the defendants became sureties upon her bond for the faithful performance of her duties as such. On December 9, 1882, upon a general accounting before the surrogate by the administratrix, he made a decree finally adjusting her accounts, and discharging the administratrix and her sureties from their bond.

This decree purported to have been based upon a written waiver of notice of the settlement of the estate, signed by Maria and Philip Deobold, and a written assignment by them to the