Court Opinion

ID: 8003626
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:51:24.315325+00
Date Added: 2024-06-11T16:35:47.979808
License: Public Domain

Adams, Judge,
delivered the opinion of the court on motion for rehearing.
Lewis Welton, being indebted to one Townley for over $5,000, executed a deed of trust on his real estate to secure this debt. He afterwards died intestate, and his estate was administered on by Jesse Welton. This debt of Townley’s was allowed against the estate and placed in the fifth class of demands.
Afterwards, as there was not sufficient personal property to pay .the debts, Jesse Welton, as administrator, procured an order of the Probate Court to sell the real estate for payment of debts, and under this order did sell the real estate and realized enough to pay all the debts of the estate; and the debt secured by the *300deed of trust, together with the other debts, were paid off by him out of the proceeds of the sale.
Jesse Welton, the administrator, died before making final settlement, and Jacob Hull, as his administrator, made application for settlement, and among other credits claimed credit for $6,044.17, amount paid in discharge of the debt secured by the deed of trust. To this credit the plaintiffs, as distributees, objected, asserting that Jesse Welton, as administrator, had no right to pay this debt out of the proceeds of the sale of the real estate.
The case was taken to the Circuit Court by appeal, and that court allowed the credit as claimed.
1. I am unable to see the force of the objection urged by the distributees to this credit. The real estate was sold subject to the deed of trust, and the proceeds of sale became assets in the hands of the administrator for payment of the debts according to their classification. This debt was in the fifth class of demands, and the administrator not only had the right, but it was his duty, to pay this debt ratably with the other debts in the fifth class. As Townley’s debt was secured by deed of trust, he had two remedies for its collection. He might either proceed against the real estate by foreclosure and sale under his deed of trust, or he might proceed against Welton in personam if alive; or, which is the same thing, have the demand allowed against his estate if dead, and collect it out of any of the assets applicable to the payment of debts of its class.
The allowance and classification of this demand did not in any manner affect the security he held on the real estate for its payment. Nor did the administrator’s sale for payment of debts destroy this 'security. It still remained on the lands notwithstanding the sale, and the purchaser at such sale took the lands subject to this encumbrance.
2. The payment of this debt did not extinguish the encumbrance upon the lands, but upon the payment of the debt the estate of Lewis Welton became entitled to the amount so paid, to be made out of the lands in the hands of the purchaser at the administrator’s sale. It is not exactly a subrogation of the estate *301to the rights of the creditor, but is in the nature of a subrogation, or rather a return to the estate of a security which had been pledged for the payment of a debt.
Where a debt is paid by the debtor, all securities given or pledged for the payment must be returned to the proper owner. So in this case, as the debt for which the deed of trust was given has been paid out of the assets of the estate, the amount may be recovered out of the lands by an administrator de bonis non for the benefit of the estate.
The motion for rehearing is overruled.
The other judges concur in this conclusion.