Breevort v. M'Jimsey

1 Edw. Ch. 551 | New York Court of Chancery | 1833

The Vice-Cham celloe.

It was decided on a former occasion in this cause, that the court could order a sale of the whole of the mortgaged premises, even though there might be itioro than- enough to satisfy the complainant’s debt and costs and notwithstanding portions of it could be sold without prejudice to the value of the residue.

Under the decree, consequent upon that decision, the lands' have been sold; and an application is now made, to compel the purchasers to accept the deeds and pay the purchase money. The only objection to the completion of the master’s sale arises from the proceeding of Silvanus Miller, Esquire,the administrator of Alexander C. Jackson, deceased. 1

The law, as to the authority of executors or administrators1 over the real estate of their testator or intestate, is very plain. As such, they have no title or interest whatever in the real' estate. By virtue of their office, they may, at any time within three years after letters testamentary or administration granted and by showing a deficiency of personalty to pay debts, apply for and obtain an order from the surrogate authorizing them- to exercise acts of ownership over the real estate for the purpose of raising money to pay the debts. This is in the nature of a power vested in them by statute and is to be exercised-in behalf of creditors only.

It cannot be made use of for any other purpose. Under our present system, it is a substitute for the remedy of creditors against heirs and .devisees—who, for the period of three years,are not liable to be sued for the debts of the- ancestor, and even-after such period they can only be sued in a- court of equity := 2 R. S. 100 ; Ib. 452, 454, 456. And it is to be observed,that whenever an executor or administrator makes a sale by virtue of such power, the proceeds are not-left in his hands to' be applied or distributed in the course of administration, but-are paid to the surrogate ; in whose hands the money is regarded in the same light as this court would look upon it-,namely, as equitable assets for the payment of debts: since it-is to be applied towards the payment, if not sufiicient to dis-charge the whole of them and “ without giving any preferences “ to bonds br other specialties or to any demands on account “ of any suit being brought thereon2 R. S. 106. Tiie surplus, if any, is declared to belong to the heir or devisee ; and does not go into the hands of the executor or administrator for distribution as personal estate.

' From this view of the law, and which is doubtless a correct one, it is certain there could be no object in proceeding to a sale under the surrogate’s order beyond what is already attained by the decree of this court. The property is sold to as good an advantage ; and the probability is; to a' better advantage as to price : since there is as much confidence in a mortga'ge sale under the decree of this court as in a sale by an administrator. In the one case, all persons having heneare made parties and a purchaser gets a title free from alb these incumbrances; while in the other, the property is sold “ subject to all charges by judgment, mortgage or otherwise."' Again, in regard to the proceeds of sale under a decree of foreclosure, the surplus, after satisfying the mortgage debt and costs, is brought into court and is subject to its control and disposition in favor of other creditors. Equity can ascertain who have claims upon as well as who shall receive such surplus monies, and can also pay it over. If the administrator of the deceased mortgagor has a right to receive any part of the proceeds, he may apply, and as the court has possession of the fund, it can award such part to him. If he has not the right to receive it in behalf of the creditors at large, then the latter may apply, upon the equity of the statute which gives them a remedy against the heirs in this court and here only. Although that remedy cannot be pursued until after a certain period which has not arrived in the present case, yet, as the lands have here been sold for other purposes and the proceeds arc within the power of this court, and as such sale may fairly be considered, in respect to the surplus, a substitute for the sale which the administrator might have procured, I see no difficulty in permitting the equitable rights of the creditors to attach at once to such proceeds, instead of the land, and the money to be applied in the same equitable .manner under the direction of this court as would be applied by the surrogate, provided the lands were sold under his authority.

The court of chancery possesses all the requisite powers of calling creditors before it, preserving the fund for their use and applying it to the discharge of their debts in the most equitable way. No good reason can be assigned, therefore, why this court should have forborne, to decree a sale for the purpose of ■converting the whole of the mortgaged premises into money. If we look at tho expediency of a sale, every thing concurs to •show it was proper and necessary ; and so far as creditors ■are concerned, the object and end of a proceeding before a surrogate is attained equally as well through the aid of this Court.

Could, then, the appointment of an administrator and the commencement of his proceedings before the surrogate, after the filing of the bill in this cause, intercept the authority of this court or prevent its making the decree it has done ?

• There was a lis pendens, with notice, when Mr. Miller took out letters of adminstration and commenced proceedings before the surrogate. The whole of the mortgaged premises, embraced also in his proceedings, formed the, subject matter of this suit 4 and this subject matter was fairly within the jurisdiction of this court. As chancery had taken cognizance df the ease, no subsequent conduct of Mr. Miller’s nor the act of .any other tribunal could take from it the power to proceed. At the utmost, the authority of the-surrogate to order a sale by the administrator, under the circumstances of the case, was but concurrent; and the one which is first exercised must certainly be effectual, although it may have been, in some respects, for a different purpose.

In Beckford v. Kemble, 1 S. & S. 7, the court of chancery granted an injunction to restrain a mortgagee of a West India estate from proceeding on a bill of foreclosure in the Colonial court, filed after a decree for an account upon a bill by the mortgagor to redeem in the court of chancery. And, in Bushby v. Munday, 5, Mad. 297, an injunction was granted to restrain proceedings in the court of sessions in Scotland brought to enforce the payment, of a bond : a bill having been filed in the court of chancery for the purpose of having the bond delivered up and cancelled. ■

Upon a like principle, it is competent for this court to restrain administrator from proceeding to a sale of the lands al? rea(jy so]cj Jjy a decree of this court and which is made between parties in whom the immediate legal and equitable title were vested: taking care, of course, to preserve to the administrator (or the creditors in whose behalf his proceedings were undertaken) all rights and equities in the surplus.

Having no doubt upon the subject and believing no embarr rassment can arise to the title of tile purchasers by reason of the steps taken by the administrator before the surrogate, or because he was not a party to the suit when the decree in this cause was made, I shall direct that the purchasers complete their respective purchases, by paying the balance of the purchase monies and accepting deeds from the master; and Mr, Miller is perpetually enjoined from any further proceedings before the surrogate in relation to these lands—leaving him however and all persons who may be supposed to have any claims or interests in the surplus monies, to take such steps in relation to the same as they may be advised, and without preju" 1 ¿lice to their rights therein.