Zacharie's Administrator v. Prieur

Bullard, J., delivered the opinion of the court. The administrator of the estate of J. M. Zacharie took a rule on Prieur and Lea, commissioners appointed by the District Court of the United States to sell certain property in the city of New-Orleans, in controversy between the city and the United States,, together with the recorder of mortgages, to show cause w7hy certain mortgages retained on the property to secure the payment of the price to the party which might finally prevail in that suit, should not be cancelled, so far as they affected the lots purchased by the deceased, and' which, had been recently sold by the administrator, in pursuance of a decree of the Court.of Probates. The corporation of New-Orleans, for answer to the rule, deny that the mortgage can be raised by order of the Probate Court, because they say the lots having been adjudicated [200] under a decree of (be District Court of the United States, in the sujt above mentioned, and that suit being still pending on appeal, the mortgage must stand in full force until its final determination. aud'privilege of the vendor re-salts irom the sale itself, ai-ditions "of °the sale are prescribed by judicial authority or order of court, and the question, to which of the parties litigant the proceeds should be decreed, is still left open. The rqortgage is conventional as soon completed!'0 IS Whereproperty m dispute is sold with the parties! by 'an order of court, retained, the purchaser becomes the debt- or to him who is decreed to be the true owner. But at the death of the mortgagor inthe meantime, and a sale of this property by order of the Court of Probates, the mortgage is raised and the purchaser takes it free of incumbrance. The mortgage attaches to the proceeds in the hands of the administrator. [200] This answer appears to admit the general principle that mortg'ages aud liens or privileges created by the deceased proprietor, and cut ofTbv a regular sale of the property made 1 , , ~ ^ „ under the authority oí the Court of Probates in the course of a(lniinistration, but endeavors to create an exception in the present case, in consequence of the peculiar origin of this mortgage. But the mortgage and privilege of vendor resulted from the sale itself, and although the conditions of the sale were prescribed by judicial authority and the question to which of the parties litigant the proceeds should be finally decreed, was still open, yet the mortgage thus prescribed became one of convention as soon as the sale was complete, and ceased to be under the control of the court of the United States. We cannot distinguish it from the case of the sale of a thing in dispute pen dente lite, by agreement of parties, even without the consent of the court. The mortgage resulting from the sale would accrue to the benefit of the party who might be finally recognised as the owner, or in other words, who was the real vendor; but the sale would be considered, nevertheless, asa contract, and the mortgage, conventional or legal, as the case might be, as between the vendor and the purchaser. Zacharie consented to the mortgage to secure the payment of the price to the party who might be finally entitled to it. The circumstances which, preceded the contract, we think may well be laid out of view, and as both the parties litigant in that case aré before the court, it does not appear material which of them may finally be entitled to the price. The teal owner became the creditor of Zacharie for the amount of the purchase. "We cannot, therefore, recognise this as a case excepted . ° , , . 1 from the operation of the general rule settled m the cases of De Ende vs. Moore, 2 Martin, N. S., 336, and of Lafon's Executors vs. Phillips, 2 Martin, N. S., 224, and which it is admitted is at this time consonant to the positive legislation [201] of the state. That rule is in fact but a corollary from the admitted principle, that the property of the debtor is the common pledge of his creditors, and that on his decease the pledge may be reduced to money for their common benefit, under the authority of the Court of Probates, and its proceeds distributed by the administrator among them, according to their rank as privileged, hypothecary or chirographic, thereby forming a real concurso to' which all are parties. If the property be sold to pay the creditors, as well hypothecary as simple, upon what principle can the mortgage creditor pretend that his original mortgage still exists on the property in the hands of the purchaser 1 The creditor may indeed complain that under the existing laws his rights may be at the mercy of faithless executors, administrators or syndics. But a purchaser at probate sale may well parry such an argument, by answering that such administrator is no agent of his, and it is not his fault if through a defect in the law itself, or the want of vigilance in the creditors, the money he has paid for the property purchased is liable to be wasted, squandered or embezzled. It is, therefore, ordered, adjudged and decreed, that the judgment of the Court of Probates be affirmed, with costs.