Matter of Schaefer, 18 N.Y.2d 314 (1966)

A release contained in a Surrogate’s Court decree, which explicitly states that it is in full satisfaction of a claim representing the decedent’s liability, releases the estate from all liability on that claim, precluding the creditor from asserting further claims against after-acquired assets of the estate.

Summary

This case concerns whether a bank’s acceptance of assets from an estate, as stipulated in a Surrogate’s Court decree, acted as a full release of the estate’s liability on a promissory note, or merely a release of claims against the specific assets listed in the accounting. The Court of Appeals held that the decree’s language, indicating “full satisfaction” of the claim representing the decedent’s liability, constituted a complete release. Consequently, the bank was estopped from claiming additional funds from the estate that became available later. This decision highlights the importance of clear and unambiguous language in releases and the conclusive nature of Surrogate’s Court decrees.

Facts

In 1932, Federal Concrete Co. executed a promissory note to Liberty National Bank, endorsed by Walter Jones, Philip Schaefer, and two others. Schaefer died shortly after, and a claim was filed against his estate for the unpaid note. The estate made payments on the note for many years. A decree in 1960 awarded the remaining estate assets to the bank