Court Opinion

ID: 6244037
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:53:00.999011+00
Date Added: 2024-06-11T08:59:14.566785
License: Public Domain

Opinion by
Mr. Justice Mitchell,
This case illustrates very forcibly the dangers of short cuts out of the regular course of administration of estates, which as the learned judge below well remarked “ not infrequently prove more expensive than to follow the procedure established by law.” He was clearly right in getting the estate back to the orderly and regular course of administration, and therefore in refusing to rescind the confirmation of the sale. But the decree was made unduly burdensome to the appellant by insistence on the formal terms of sale, and failure to recognize fully the agreement between appellant and the executor upon the basis of which the former made the purchase.
The situation was anomalous. The decedent died in 1892, and at the end of four years the estate was not only unsettled, but the executor did not seem to know, certainly has not shown, what its real condition was. On the contrary his management exhibits great irregularity. He has intermeddled with the real estate and collected rents, etc., from it, for which he has *217not accounted. The charge that he permitted debts of the estate bearing interest to run on while available assets to pay them remained, without effort to collect and apply them, appears to be backed by substantial evidence; and his apparent settlement with Scott, the purchaser of the seventy-three acre farm, as shown in the memorandum of May. 15,1895 (called exhibit C), allows Scott interest on his half of the mortgage, but charges him no interest on the unpaid purchase money. All these matters may be susceptible of full and satisfactory explanation, but it should be given as the first step toward the proper extrication of the estate out of its present disorderly condition.
Prior to the sale in August, 1895, the appellant had become interested in the estate by purchase of the shares of the heirs, and in order to hasten the relief of the land from the decedent’s debts which were a charge upon it, he had paid some of them himself, and had made a partial settlement with the executor, as shown by the memorandum of May 8,1895 (exhibit B). In this situation of affairs the sale of the home farm came on to be made, and on July 30, 1895, appellant and the executor entered into an agreement which is the substantial basis on which this controversy turns. By it, if appellant should become the purchaser, the accounts assigned to him by the executor in the memorandum of Maly 8, 1895, “ as well as the accounts against said estate heretofore paid by said Stevenson, shall be deducted from the amount of purchase money,” etc. The learned judge below was of opinion that this was a private arrangement between the executor and the purchaser, which the court could not recognize after the confirmation of the sale upon its expressed terms, and also that the rents or other moneys collected by the executor from the real estate could not be considered in this proceeding. In the regular and orderly course of administration he would undoubtedly be right, but this proceeding was not in the regular and orderly course. Appellant as assignee of the heirs had a claim against the executor for rents, etc. and he was also a creditor of the estate by subrogation to the claims against it, which he had paid. If the executor had settled with appellant before the sale, there could be no question of his right to do so, although the claims were partly against him as an individual and partly in his capacity as executor. But the parties chose to postpone the settlement *218until after the sale, and then to settle the balance on whichevei side it should appear. If fairly and honestly done there was nothing unlawful in this, and it does not appear that anyone is injured by it. It is not shown that there are any debts of the estate except possibly a balance on the mortgage which will be referred to later, nor that if there are any such debts that the executor has not funds in his hands to pay them. There is no one before the court complaining either as heir, devisee, distributee or creditor. So far as appears the only matters to be adjusted are the items of the account between the executor and the appellant in his threefold relation of assignee of the heirs, creditor of the estate, and purchaser at the sale. The executor mingled all these items in the agreement of July 80, 1895, and on the basis of that agreement appellant became the purchaser. Equity requires that as a first step, before any payment is demanded from him, it should be shown that there is a balance on that account against him. The executor should be required to state a full account of all his dealings with the estate, real and personal, and of all outstanding debts, etc. The court will then have before it the information necessary to make a final settlement of the whole matter.
One matter left in especially unsatisfactory shape is the mortgage to the New York Mutual Life Insurance Co. Scott claims to be the owner by assignment of one half, and the executor and his brother owners of the other half, but the assignment has not been put on record, nor so far as appears has it even been produced on call, and on proper occasion. This appears not only from the testimony of appellant, but also of Mr. McCracken who represented parties willing to make a loan on the property if the title could be relieved from the lien of this mortgage. It is the duty of the executor before calling on the appellant for payment of the purchase money to clear up the apparent mystery surrounding this mortgage. Appellant claims that the present owners are estopped by their declaration at the sale that the mortgage was paid and would be satisfied, though we have not found any adequate explanation, if this was so, why appellant agreed to recognize the mortgage, as an existing incumbrance, in the memorandum of May 15,1895. But in any case the executor owes the appellant, as purchaser of the property, the duly of having the mortgage satisfied, if paid, or if not, of *219having the assignments put of record, and the balance due definitely ascertained.
So much of the decree as refuses to rescind the confirmation of the sale is affirmed. But the rest of the decree is reversed, and it is ordered that no payment be required from appellant until it shall appear by the executor’s account, made up in accordance with this opinion, that a balance is due by appellant. Costs of this appeal to be paid by the executor, appellee, but without prejudice to his right to be repaid out of the moneys of the estate, if upon final hearing and decree, such repayment shall appear to be just and equitable.