Court Opinion

ID: 6408277
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:50:39.268541+00
Date Added: 2024-06-11T15:51:17.111184
License: Public Domain

Shaw, C. J.
The court are of opinion that the decree of the judge of probate was right, and that to charge the adminis*39trator with the full amount of the estate sold, without deducting the amount paid to redeem the mortgage, would be contrary to the first principles of justice.
It was inadvertent in the administrator to file an account crediting the whole amount of the proceeds of the sale, and claiming allowance for the sum paid to discharge the mortgage, as a debt paid to a creditor. Perhaps the fact is well enough accounted for by the suggestion, that the administrator then believed the estate to be solvent; and in that event it would have been correct. But it is allowable for an administrator, in the settlement of a subsequent account, to correct any mistake in a former one, conformably to the rights of the parties and the justice of the case.
It has been argued, that the administrator had no right to pay one debt in full out of the personal assets, though secured by mortgage, or to apply the assets to any other purpose than the payment of debts and an equal distribution, in case of insolvency. This is very true. But what are the assets in the administrator’s hands? The equity of redemption only, where there is a mortgage on the property; and this is the value of the estate over and above the charge upon it. This might be ascertained in one of two modes. The equity might be sold, that is, the estate subject to the mortgage, and then the whole of the proceeds would be assets. Or, the amount of the mortgage being fixed, it would be equally certain, to put up the whole estate, with notice that a sufficient amount of the purchase money must be applied to discharge the incumbrance ; and the balance is the value of the equity, and the amount of assets. The estate is charged with no new burden. The undertaking of the owner to apply the purchase money is no new obligation ; it does not bind the estate ; it is simply a mode of selling the equity. This is found, in the present case, to be a judicious mode of selling, and better for the estate than to sell it in one lot. It may be often beneficial for the estate, to redeem pledges and mortgages, by which property may become available, which would be otherwise lost. It is a question, in each case, whether the mode adopted is legal and beneficial to the estate. Decree affirmed