Morris v. Porter

Wisavell, J. This case comes to the Hav court upon a report of the writ and the defendant’s pleadings, Avith the stipulation that if the facts set up in the brief statement would constitute a [515] defense, in whole or in part, the case is to stand for trial; if not, judgment is to be rendered for the plaintiff. These facts appear from the brief statement. Isaiah Morris, the plaintiff’s intestate, died on the 18th of May, 1890. At the time of his death he was indebted to the defendant in the sum of' $8294.72 for supplies, and commissions, furnished him by the-defendant, during the preceding fall and winter while said intestate was carrying on a lumbering operation. At the time-of Morris’ death the logs were being driven to market, and in order to protect and save the property, to get the logs to market and to prevent the enforcement of lien claims by stumpage owners and laborers, with the consent of the widow, now the administratrix, and a son who was engaged with his father in the operation, the defendant made further advances to the amount of $3631.97, which paid all claims upon the logs and the expense-of driving the same. Subsequently, with the consent of the widow and son, before-her appointment as administratrix, the defendant sold these logs, realizing from such sale the sum of $11,726.76. It further appears from the brief statement that, after her appointment asadministratrix, the plaintiff and the defendant had a full settlement of all matters between him and the estate, in the presence- and with the approval of the judge of probate, and after a full examination of the accounts by the plaintiff aided by her counsel.. At this time there was in the hands of the defendant the sum of $11,726.76, the proceeds of the sale of the logs, and there was due him the sum of $11,926.69 for advances, supplies and commissions as above stated. By the terms of this settlement these two amounts were offset against each other, and each of the parties gave the other a receipt in full. In other words, the administratrix paid the defendant’s claim, substantially in full, by the application to that purpose of the proceeds of the logs in the defendant’s hands, which was accepted by the defendant in full satisfaction of the amount due him. The plaintiff now seeks to recover back the amount so paid or applied, less the advances made by the defendant after the intestate’s death. [516] It may be admitted that an administrator who, within the year allowed by statute, pays a creditor’s claim in full, acting upon the honest belief that the estate is solvent, may, upon the estate proving actually insolvent, recover back the difference between the amount so paid and that pro rata share which the creditor would have been entitled to in common with all other general creditors. But this right of action is based upon the equitable doctrine that such creditor has received money, which in equity and in good conscience belongs to the estate, for the purpose of making a just and equal distribution among all the general creditors, which is the cardinal principle of the laws relating to the administration and settlement of decedents’ estates. The creditor who in good faith has received payment in full of his claim against an estate should certainly not be placed in a worse position by reason of such payment than those whose claims have not been paid and wrho have had an opportunity to present and prove the same before the commissioners. If an administrator could recover back the full amount paid under the above circumstances, it would leave the creditor, whose claim had once been paid in full, after the expiration of the time allowed to prove claims, entirely without remedy. This would not be just and equitable, but quite the reverse and to a very marked degree. ■ This question arose in Walker v. Hill, 17 Mass. 380, in which, after a full discussion of the principles involved, the court said : " The plaintiff' will take judgment for the difference between the amount paid by him to the defendant, and the amount that would have been payable to him on the decree of the judge of probate for the distribution among the creditors, whose debts were allowed by the commissioners, with interest on the amount of their difference.” To the same effect is Heard, admx. v. Drake, 4 Gray, 514. An administrator cannot recover back the whole amount so paid but only the amount of the over-payment. The burden is upon the administrator to show what that difference is. He can do this by introducing the decree of the judge of probate ordering the dividend to be paid to creditors and especially that to be paid upon the claim originally of the creditor from whom the [517] excess of payment is sought to be recovered. It is incumbent upon an administrator, at his peril, to have this dividend upon such, creditor’s claim determined by decree of the judge of probate. It is a matter exclusively within the original jurisdiction of the probate court and cannot be determined in a common law court. This is no great hardship upon an administrator who seeks to be relieved from his own mistake. He may prove any claim so paid in his own name, being subrogated to the rights of the creditor whose claim has been fully paid. This course was adopted by the administrators in the two Massachusetts cases above cited, and either this, or some other course, must be pursued which will result in a decree of the probate court of the amount of the dividend on the claim that has been paid. It is not the representation of insolvency which entitles an administrator to disturb a previously made settlement, and to recover any portion of the amount paid, but actual insolvency as shown after the commissioners have passed upon the claims presented, the acceptance of such report by the probate court, the settlement of the administrator’s account showing the amount in his hands available for the payment of debts, and the decree ordering the payment of a dividend. The defendant sets up in his brief statement that the estate is not actually insolvent, that the account of the administratrix shows that she charges herself with the sum of $1099.97, and that all of the claims allowed aggregate only $796.97. If the estate is not actually insolvent the plaintiff is not entitled to recover anything. It is further claimed in defense that the defendant’s original claim has not been passed upon by the commissioners and that the time for presenting the same has expired. We have already seen that unless this has been done the action cannot be maintained. What has already been said applies to the further contention of the defendant, set up in his brief statement, that the intestate, in his lifetime, made a conveyance and transfer of real and personal property to his wife, the present administratrix, which [518] was without consideration and void both as to then existing and subsequent creditors. This may be a pertinent inquiry upon the question of the amount of the estate in an administrator’s hands, available for the payment of debts. But it is only after all such matters have been fully and finally adjudicated, and the amount of dividend that the creditor would be entitled to accurately ascertained, that such an action as this can be maintained. In accordance with the terms of the report, The action is to stand for trial.