Court Opinion

ID: 5438127
Source: CourtListenerOpinion
Date Created: 2022-01-08 17:57:31.368198+00
Date Added: 2024-06-11T08:31:55.024580
License: Public Domain

By the Court, Crockett, J.:
This is an appeal by the administrator from an order of the Probate Court settling his annual account, which was contested by Weeks and Johnson, two of the creditors. At *568the hearing the Court disallowed certain credits claimed by the administrator, and debited him with several sums which were omitted from the account. In the opinion of the Probate Court, it became necessary to restate the account on the basis settled at the hearing, and an order was entered to that effect, and directing that if the administrator “shall neglect or omit to so restate and present the same within ten days from the date hereof, the said J. S. Johnson and E. J. Weeks shall be and they are hereby authorized to restate and present the same.” The administrator having failed to obey the order, the account was restated and presented by Johnson and Weeks, and settled by the Court. This ruling, and the disallowance of certain items on the credit side, and the addition of certain others to the debit side of the account, are relied, upon as erroneous.
We do not understand the appellant to claim that the account, as restated, varies in any substantial particular from the basis settled by the Court at the hearing, or that the result would have been substantially different if the administrator had himself restated the account in obedience to the order of the Court. If it was error to authorize the creditors to restate the account, it has wrought no injury to the administrator, and would not of itself justify a reversal of the judgment. But as the Court had already settled the basis on which the account was to be stated, we do not see that it was material by whom the mere clerical duty of arranging the items in proper order was performed.
Amongst the debts due to the estate was a promissory note made by Salisbury and Alpaugh to the intestate for one thousand dollars, bearing interest at the rate of three per cent per month, and secured by mortgage on the Alpaugh ranch. But one Toomes held a prior unsatisfied mortgage on the ranch. The makers of the note'were insolvent, and the administrator commenced an action to foreclose the mortgage, making Toomes a party defendant. A decree of fore*569closure was obtained directing a sale of the mortgaged premises, and that the proceeds be applied: First, to the payment of the costs of the action; second, to the payment of the mortgage to Toomes; and third, to the payment of the mortgage to Miner. At the sale the administrator purchased the ranch at the price of five thousand dollars, on behalf of the estate, and the Toomes mortgage, amounting to two thousand nine hundred and thirty dollars, and the costs, amounting to two hundred and sixty-seven dollars and fifty cents, were paid by the administrator. The mortgage debt due to the estate then amounted, with the accrued interest, to two thousand two hundred and thirteen dollars and forty cents. In his next annual account the administrator credited himself with the amount paid to satisfy the Toomes mortgage and the costs of the action. These items were objected to by the creditors, but were allowed by the Probate Court. On appeal to this Court the payment of the Toomes mortgage was disallowed, the Court holding that the administrator had no lawful authority to purchase the ranch for the estate at the foreclosure sale, and that the purchase must be deemed to have been made for himself and not for the estate. (26 Cal. 57.) - On the return of the case to the Probate Court, the administrator filed an amended account; from the credit side of which was omitted the item of two thousand nine hundred and thirty dollars paid to satisfy the Toomes mortgage. But there was included on the credit side of both the .original and amended accounts an item of two hundred and sixty-seven dollars and fifty cents for the costs of the foreclosure suit; and an item of eight hundred dollars for money paid to George C, Hickox; and on the same side of the amended account an item of two hundred and seventy-five dollars for counsel fees, on the hearing of the former appeal in this Court; and another *570item of eight hundred dollars paid to Hickox. All these items were excepted to by the contesting creditors, and were disallowed by the Probate Court. The Court also added to the debit side of the account the amount of the Salisbury and Alpaugh note, which, with interest at the rate of three per cent per month, then amounted to four thousand six hundred and forty-seven dollars; and also charged the administrator with his own note to the deceased for one thousand nine hundred dollars; which, with the interest at one per cent per month, then amounted to three thousand nine hundred and sixty-six dollars and fifty-seven cents. These rulings are complained of as error.
The item of two hundred and sixty-seven dollars and fifty cents for the cost of the foreclosure suit,was improperly disallowed. There is nothing to impeach the good faith of the administrator in foreclosing the mortgage; on the contrary, it is clear that in this transaction he was acting in what he deemed to be the interest of the estate. So far as appears from this record, it was his duty to foreclose the mortgage; and there is no reason why he should be denied a credit for the cost of the proceeding. The Court also erred in charging him with interest at the rate of three per cent per month ©n the note of Salisbury and Alpaugh. The estate is certainly in no worse condition than if the mortgaged premises had been sold at the foreclosure sale to a stranger, instead of to the administrator, for five thousand dollars. In that event there would have been paid out of the purchase money: First, the costs of the action, amounting to two hundred and sixty-seven dollars and fifty cents; second, the prior mortgage of Toomes, amounting to two thousand nine hundred and thirty dollars and ninety-four cents, and leaving only the sum of one thousand eight hundred and one dollars and fifty-six cents to be applied on the mortgage held by the estate. This sum represents the interest of the estate in the proceeds of the sale; and if the whole purchase money had then been *571paid in cash, the administrator would have received this sum, and no more, to the credit of the estate. This Court having decided that the purchase by the administrator must be held to have been made on his private account, it results that after having paid the costs of the foreclosure and the prior mortgage, he remained a debtor to the estate, for its share of the proceeds of the sale, amounting as we have seen to one thousand eight hundred and one dollars and fifty-six cents. If he had then paid the money, and had thenceforth kept it separate from his private funds, it is clear that this sum would have been the limit of his liability on account of this transaction. But the money was not in fact paid, and he became a debtor to the estate for the amount thus remaining in his hands, not separated or set apart from his private funds. He is, therefore, liable only for this sum and for interest, at the legal rate; but not at the rate stipulated in the note, which has been merged in the judgment. The interest must therefore be reduced from three per cent per month to the rate fixed by law when there is no written stipulation as to the rate, and must be computed, not on the original amount or from the maturity of the note, but on one thousand eight hundred and one dollars and fifty-six cents, from the date of the foreclosure sale. But we think there was no error in charging the administrator with the amount of his own note and the stipulated interest. It is a debt due to the estate and has never been paid. The money has remained in his hands, not separated or set apart from his private funds or been devoted to the uses of the estate. Under what circumstances an administrator will become liable to pay interest is discussed In the Matter of the Estate of Mary McQueen, 44 Cal. 584, and upon the principles settled in that case we think the administrator cannot escape the payment of interest. Nor can he set off the debt against his commissions. Section two hundred and twenty-one *572of the Probate Act provides that an administrator “ shall be. allowed commissions upon the amount of the whole estate - accounted for by him, as follows: For the first thousand dollars, at the rate of seven per cent,” etc. The statute contemplates that the amount of commissions due to the administrator is to be ascertained when he has rendered his final account and the estate is ready for distribution. It is then for the first time that it can be ascertained what is “ the whole estate accounted for by him;” and if the commissions were to be settled and allowed, piecemeal, as the administration progressed, it might happen that after receiving a large amount of commissions, the administrator in the end would fail to account for a considerable share of the estate. If the commissions had been reserved until the final accounting, they could be deducted from the deficit; but if paid in advance, might be lost to the estate. We think the commissions can be allowed only on a final accounting. The next question relates to the payments to Hickox, and we think they ought to be allowed. It appears from the evidence that in the lifetime of Miner, Hickox entered into a contract with him for certain services to be performed by the latter for one year, at a compensation of two hundred dollars per month. Miner died soon after Hickox entered upon the performance of his duties, and thereafter the duties were performed as before, with the knowledge and assent of the administrator. The proof shows that the services were necessary for the protection and preservation of the interests of the estate, and it is not pretended that the administrator acted in bad faith. We think these payments were proper and valid charges against the estate and ought to have been allowed. We are of the same opinion in respect to the payment of two hundred and seventy-five dollars to Cadwalader for the argument of the former appeal in this Court. An administrator acting in good faith is entitled to the aid of counsel in all litigation *573concerning the estate, and we see nothing in this case to take it out of the general rule.
Judgment and order reversed and cause remanded for further proceedings in accordance with this opinion.