Danielson v. Pritz

Birdzell, J.

Hans M. Hanson died intestate in May, 1919. In August, 1919, Oscar Greenland qualified as administrator of his estate, being appointed by the county court of Griggs county. The administrator later filed an inventory and proceeded to handle the affairs of the estate, paying claims, widow’s allowance, taxes, mortgages, interest on mortgage indebtedness and the like, and selling under the direction of *552tbe county court property belonging to tbe estate. Greenland, tbe administrator, died in September, 1926, without having filed a report in tbe county court. His account as administrator bad been kept in tbe First National Bank of Binford, of which be was an officer. Upon his death Otto Pritz and Bertha Greenland were appointed executors of bis estate, tbe latter being tbe widow and sole legatee, and one Ole Daniel-son was appointed administrator of tbe estate of Hans M. Hanson, deceased, as tbe successor of Oscar Greenland. Difficulty was experienced immediately in adjusting tbe accounts of tbe Hanson estate in such a manner that tbe administrator could know that be bad received all tbe property belonging to tbe estate. Upon tbe petition of Danielson, Greenland’s executors and sureties upon bis bond as administrator were ordered to render an account within thirty days. In compliance with this order an account based largely upon tbe bank records was presented by tbe executors of tbe estate of Oscar Greenland, to tbe approval of which objections were made by Danielson as administrator of tbe Hanson estate. During tbe process of administration tbe administrator bad sold property of tbe estate, both real and personal, and in tbe account presented by bis executors be was charged with the proceeds of such sales which bad been deposited in bis account in tbe bank as administrator. Likewise, be Avas credited with whatever bad been paid out of this account. It appeared that some of the money ($4,196.97) entered as-receipts in tbe bank account of tbe administrator was paid to him by one Vrem who bad purchased a quarter section of land which was tbe separate property of tbe widow, Ida X. Hanson. With tbe payments for this land included, tbe bank account showed receipts of $19,552.49 and expenditures of $19,525.16, leaving a balance in tbe bank for tbe present administrator of $27.33. Tbe probate court, however, did not bold tbe first administrator accountable as administrator for tbe proceeds of tbe sale of tbe Ida Hanson land which bad been so deposited in bis account as administrator, and it disallowed several hundred dollars of expenditures shown, tbe result of tbe action of tbe probate court being to find that tbe administrator bad expended $3,611.92 more than be bad received as administrator of tbe estate. From a decree so allowing tbe account of tbe former administrator Danielson appealed to tbe district court, and from a judgment of the *553district court modifying tbe decree of tbe county court Danielson again appeals.

We have occasion to consider here only tbe issues presented on tbe record wbicb are created by objections to tbe allowance of certain items of tbe account. These objections are concerned both with charges to be made on account of tbe receipt of property belonging to tbe estate and credits to be given for moneys expended. As it will be necessary to state tbe facts in connection with each contested item, a more extended general statement of tbe facts with reference to tbe administration of tbe estate is not required.

Tbe main objection to the account is concerned with tbe proceeds of tbe sale of tbe Ida Hanson land and with payments to or for tbe account of Ida Hanson.

In tbe petition for letters of administration tbe character of tbe estate is referred to as 480 acres of farm land in certain sections in Nelson county and a hotel property in Cooperstown. In tbe inventory 480 acres of land and tbe hotel property satisfying tbe general description in tbe petition are described and appraised, but one quarter section was stricken from tbe inventory, ink marks being drawn through tbe lines. Tbe circumstances in wbicb this description was crossed out do not appear. This quarter section, however, was sold to oneN Vrem who afterward and before tbe death of G-reenland made payments aggregating $4,196.91. It was stipulated at tbe bearing in tbe district court that this land bad stood in tbe name of Ida Hanson, tbe widow of Hans M. Hanson, deceased, for more than twenty years. Ida Hanson signed tbe contract for tbe sale individually, but tbe payments were made to Greenland and, as previously stated, be placed tbe proceeds in tbe estate account in tbe bank, thus mingling them with tbe proceeds of tbe sale of other property wbicb bad belonged to tbe estate and with miscellaneous collections.

Soon after tbe appointment of tbe administrator in 1919 an order was entered in tbe probate court directing him to pay to Ida Hanson as a family allowance $35 per month from September 1, 1919. These payments, if made, up to tbe time of tbe death of tbe administrator would have amounted to $2,940. While these payments were not regularly made, tbe account and stipulated facts show beyond question that an amount much in excess of this figure was paid to Ida Hanson out *554of "the .bank' account of Greenland, administrator. The district court found that the amount so paid was $é,090.20 and it charged the administrator with $1,150.20 as representing an excess paid to the widow above the amount authorized by the order of the county court. Under -the stipulated facts it is clear that the amount paid out by the administrator for or on account of the widow is much in excess of $4,090.20, if she, rather than the estate, is chargeable with payment of liens and incumbrances on her separate property. It appears that Ida M. Hanson and Hans M. Hanson had jointly mortgaged the quarter section owned by Ida Hanson and which was later sold by her to Yrem and a quarter section owned by Hans' M. Hanson. The account and the stipulated facts show that Greenland paid on account of joint mortgages $6,121.93; also, that he paid out of this account $132.20 as taxes on the Ida Hanson quarter section. If Ida Hanson is chargeable with an equal share of the joint mortgage, there has' been paid on account of her mortgage indebtedness $3,060.96 and on account of taxes $132.30 in addition'to the cash paid to her or for her use and benefit of $4,090.20, ora total of $1,283.36. Under the account as approved by the district court the administrator is not charged with the proceeds of the Ida Hanson quarter section, but he is credited, as administrator, Avith all payments made to discharge mortgages and taxes on this same land.

The position of the appellant Avith respect to this matter, as we understand it, is that the administrator should now be estopped to contend that the proceeds of the Ida Hanson land do not bélong to the estate and that he should be charged Avith such receipts. Then the further contention is made that the administrator should not be credited Avith any money paid to the widoAV except such as was regularly paid in accordance with the order of allowance, and especially should no credit be given for the amount paid to discharge mortgages, because claims for such Avere not presented and proved in the regular way. In addition an alternative contention is made that if the administrator is not chargeable as such for the proceeds of the Ida Hanson land, he should not be credited in any event with estate moneys expended to discharge liens thereon. The first contention is, in our opinion, clearly without merit in light of the stipulated facts. This quarter section of land belonged to Ida Hanson. Neither she nor the administrator of the Hans Hansdn estate should be precluded from asserting her OAvnership by reason of *555tbe fact that the administrator was allowed to, or ior convenience did, deposit the proceeds in the estate account.. No party .now objecting is shown to have been prejudiced in the least degree by any such act of the administrator or of Ida Hanson. There is no estoppel and the administrator is not chargeable as such for the Vrem payments.

Is the administrator entitled to credit for expenditures made in discharging liens and incumbrances on this separate property of Ida Hanson ?

At the time these liens were discharged Greenland had in his possession both funds belonging to the estate and funds belonging to Ida Hanson, although but one account was kept. No' proof of claim was submitted in probate court from which it could be determined that the mortgage indebtedness was, as. between the two debtors, that of one rather than the other. For aught this.record shows the entire mortgage indebtedness might have been that of Ida Hanson and the liability of Hans Hanson that of a surety or vice versa. In other words, there was no proof before the district court by which the indebtedness could be apportioned or any right of contribution fixed on any other basis than the separate ownership of the property mortgaged. There is no basis for- any presumption that the administrator, in discharging the mortgage and other liens, used funds of the estate to relieve the Ida Hanson lands of incumbrances. Much less is it shown that she had a right to call upon him to do so. It is not to be presumed that an owner of land will mortgage the same without receiving value in exchange and where the estates of two or more persons are subjected to one common incumbrance it should be presumed, in the absence of evidence, that the indebtedness as between the obligors is proportionate to their respective titles. Weed v. Calkins, 24 Hun, 582. In these circumstances either debtor paying more than his proportionate share of the indebtedness is entitled to contribution from the other. See 2 Jones, Mortg. 8th ed. §§ 1393 and 1394. No claim having been allowed in probate court and it now appearing that the administrator at the time of paying the mortgages in question was acting both as trustee for Ida Hanson and as administrator of the Hans Hanson estate and had money in his hands in both capacities, he should not receive credit as administrator for the discharge of any mortgage • indebtedness that is properly chargeable to the trust estate of Ida Hanson. Hence, on the *556record in its present condition the credits for the taxes upon the Ida Hanson land, for one-half the amount of the joint mortgages discharged and the similar proportion of the interest thereon should be disallowed in the account of the administrator. It does not appear, however, that it may not be possible to obtain evidence which would establish more definitely the relation of the parties with respect to this mortgage indebtedness. In the interest of justice such evidence, if obtainable, should be produced and the account adjusted accordingly. The modification, therefore, will be without prejudice to the right of either party to' adduce further testimony in the district court which will have a bearing on the relation the parties sustain to the indebtedness evidenced by the'joint notes and mortgages.

With respect to the contention that no credit should be given to the •administrator for payments made on the mortgages covering the estate lands because claims were not presented and proved, little need be said. It is true that under our statute a mortgagee could not obtain a deficiency judgment against the estate of a deceased mortgagor unless the claim for such deficiency were presented as a contingent claim. Comp. Laws 1913, § 8736; Johnson v. Larson, 56 N. D. 207, 216 N. W. 895. But where no claim is filed and substantiated as required by statute (§ 8737), and the administrator upon settlement of his accounts shows to the satisfaction of the county court that such debt was justly due and was paid by the administrator in good faith, et cetera (§ 8738), the latter may properly be credited with the payment so made. An administrator need not suffer a foreclosure, at the instance of a mortgagee content with the security, at the peril of being personally charged should he pay the valid lien. He should, however, first obtain an order of the court (Comp. Laws 1913, § 8759), though this is not necessarily a prerequisite to approval by the court of such a payment after the fact (§ 8738, supra).

Concerning the widow’s allowance, both the probate court and the •district court credited the administrator’s account with the full amount ($2,940) which would have been paid had the order been regularly complied with. The administrator was not directed to take receipts. Lie did pay for and on account of Ida Hanson substantial amounts of ■money in lump sums. There is no question but that she received the benefit of payments made by the administrator equivalent to the maxi*557mum sbe would have received had the allowance been doled out in monthly payments. While it is true that the administrator held funds belonging to her personally from which those same payments might have been made, there is no reason for assuming that he was protecting the estate by withholding payments that were justly due to her and which had been ordered made. We can see no reason for disturbing the rulings of the probate court and the district court which credit the administrator with these payments. f

The remaining contentions of the appellant are so obviously without merit as to require but brief attention. It is claimed that the record shows the 1919 thresh bill to have been paid twice. This is apparently based upon the fact that more than one receipt or voucher for this bill is in the files. Counsel point to no credit allowances in the account which would show more than one payment.

The evidence shows the hotel personal property was sold for an amount in excess of $500.00 and it is claimed that the administrator-should be charged with the receipt of this amount instead of $315 as shown in the account. It is true the testimony of one Kuud shows that this property was sold for more than $500 or approximately $530.00, but the deposition of Helmer Hanson shows that he had a third interest in the hotel property. This readily accounts for the estate receiving but two-thirds of the proceeds of this sale and supports the account as rendered.

In conclusion we deem it proper to refer to a fundamental misconception which seems to characterize the efforts to adjust the account in question. Counsel for the appellant seem to be under the impression that in the event the Vrem payments are held to belong to Ida Hanson rather than to the estate the account with respect to such payments can be settled in closing up the estate of Hans M. Hanson in probate court. The contention is made that whether these payments are treated as funds of the estate or as funds of Ida Hanson “is merely a question of accounting practice and does not affect the result.” It is said that if this money was paid to Greenland as an agent of Ida Hanson and by him expended for estate purposes, it would not follow that Greenland as' administrator is entitled to credit for this fund and not required to account therefor j and it is assumed that in this event Ida Hanson might have a claim against the estate. Clearly, any money that came *558into the bands of ¡Greenland that did not belong to tbe estate -but-did belong to some other person does not become-subject to the jurisdiction of the probate court either by reason of being deposited in a-bank account- carried-in the name of the administrator or by reason of the fact that the owner of the fund happens to be interested as an heir or otherwise in the estate.

For the reasons stated, the judgment of the district-court is modified to the extent that the payments made by the administrator on account of joint mortgages executed by Hans Hanson and Ida Hanson are to be apportioned and the administrator in his account credited only with the money applied to discharge the mortgages on the Hans'Hanson land. As thus modified, the judgment of the district court is affirmed, without prejudice, however, to the right of either party to introduce additional evidence in the district court bearing upon the relations of Ida Hanson and Hans Hanson to the mortgage indebtedness secured on their separate properties and to such further modification of the judgment as the district court may make in the light of such evidence. Neither party will recover costs on this appeal.

Bueiee, Oh. J., and Nuessle, Bube, and CheistiaNSON, J.J., concur.