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a set-off only when the claim against him sued upon is one which he owed the decedent at the time of the decedent's death. A debt due from the decedent to the defendant in the decedent's lifetime can not be used as a set-off where the obligation sued upon by the personal representative is one which arises during the course of administration.87 This rule is well established in law and prevails generally in equity. And the rule is mutual; for if the defendant has no right of set-off in such a case, the personal representative has no such right if he be the defendant.88

It has been held that the defendant is not entitled to set-off a claim due him from the decedent against a claim of the personal representative for goods of the estate sold to the defendant during the course of administration, even though there was evidence that the representative agreed to allow the set-off as an inducement for the purchase of the goods, the court declaring it to be the settled rule that in a suit by the personal representative for a debt due the estate of a decedent originating after the death of the decedent, the defendant can not set-off a debt due him from the decedent prior to his death.89 And

87 Shipman v. Thompson, Willes 103; Watts v. Rees, 9 Exch. 696; Rees v. Watts, 11 Exch. 410; Lambarde v. Older, 17 Beav. 542; McKown v. Manhattan L. Ins. Co., 91 Fed. 352; Bizzell v. Stone, 12 Ark. 378; Newhall v. Turney, 14 Ill. 338; Welborn v. Coon, 57 Ind. 270; Shaw v. Gookin, 7 N. H. 16; Fry v. Evans, 8 Wend. (N. Y.) 530; Patterson v. Patterson, 59 N. Y. 574, 17 Am. Rep. 384; Aiken v. Bridgman, 37 Vt. 249.

In Barbee v. Green, 86 N. C. 158, it is said that a claim for funeral expenses may be set-off against a debt due the decedent in his lifetime.

88 Dale v. Cooke, 4 Johns. Ch. (N. Y.) 11; Root v. Taylor, 20 Johns. (N. Y.) 137, 138.

89 Dayhuff v. Dayhuff's Admr., 27 Ind. 158.

To the same effect see, Wisdom v. Becker, 52 II. 342; Harte v. Houchin, 50 Ind. 327; Cook v.

a cause of action which arises subsequent to the death of a decedent is not a proper subject for a set-off against a debt owing the decedent in his lifetime, the reason being that there is no mutuality of indebtedness. The same reason applies where the defendant purchases a claim against the estate after the decedent's death. These propositions are based upon considerations of sound public policy which require the estate to be settled as of the time of the death of the decedent and forbid any alteration in the course of the distribution of the assets.90

$1500. Personal Representative May Retain Assets of Estate to Satisfy Debt Due Himself.

At common law funeral charges and the expenses of administration were first satisfied, thereafter debts to the Crown, debts of record, specialty debts, simple con-, tract debts and other voluntary debts were paid in the order mentioned. In the United States this classification does not prevail. In many jurisdictions funeral charges and expenses of administration must first be satisfied out of the assets of the estate. But further than this it is unsafe to state a general rule and the statutes in every instance must be consulted. A personal representative to whom a debt is owing has the same right to have the debt satisfied as has any creditor standing in the same degree.

Lovell, 11 Iowa 81; Lee v. Russell, 18 Ky. L. Rep. 951, 38 S. W. 874, 878; Grew v. Burditt, 9 Pick. (Mass.) 265; Lamberton v. Freeman, 16 N. H. 547; Aiken v. Bridgman, 37 Vt. 249.

Some authorities hold that an agreement of the personal representative to allow a set-off will be enforced against them, see Mc

Daniel v. Hooks, 30 Ga. 981; Dickenson v. McDermott's Exrs., 13 Tex. 248.

90 Bizzell v. Stone, 12 Ark. 378; Rich v. Hayes, 101 Me. 324, 115 Am. St. Rep. 321, 8 Ann. Cas. 304, 64 Atl. 656; Irons v. Irons, 5 R. I. 264; Union National Bank V. Hicks, 67 Wis. 189, 30 N. W. 234.

Since it is not contemplated that an executor or administrator individually shall sue himself in his representative capacity, the personal representative may retain out of the assets of the estate sufficient to satisfy his debt to the same extent that he pays other debts in the same degree.91 This right of retainer merely puts the personal representative in the same position as if he were a creditor who had established his claim, and he can retain only out of the same assets and to the same extent that a creditor of equal degree is entitled to payment. The personal representative can not retain assets to satisfy his debt to the detriment of creditors holding claims of equal degree, and if there is a deficiency of assets to pay such claims, the personal representative must suffer the loss equally with claimants in the same degree.92 He is not entitled to retain assets to satisfy his own debt as against a claim having a right to priority of payment. And where the personal representative holds claims of different degree, he can not defeat the rights of any claimant by first retaining assets to satisfy the claim of the lesser degree and

91 Hasluck v. Clark (1899), 1 Q. B. 699; Davies v. Parry (1899), 1 Ch. 602; In re Hayward (Tweedie v. Hayward) (1901), 1 Ch. 221; In re Belham (Richardes v. Yates) (1901), 2 Ch. 52; Kirksey v. Kirksey, 41 Ala. 626; Buckner v. Morris, 2 J. J. Marsh (25 Ky.) 121; Rogers V. Hosack's Exrs., 18 Wend. (N. Y.) 319; White v. Griffin, 2 Jones L. (47 N. C.) 3; Sims' Admr. v. Chew, 15 Serg. & R. (Pa.) 197.

Where an executor is given a power of sale by the will and is

at the same time both a creditor and legatee, he can not by the exercise of the power convey any portion of the real estate to himself in satisfaction of the indebtedness due him from the estate.Ash v. Wells, 76 W. Va. 711, 86 S. E. 750.

92 Chapman v. Turner, 9 Mod. 268.

93 In re Hankey (Cunliffe Smith v. Hankey) (1899), 1 Ch. 541; In re Rhoades (1899), 2 Q. B. 347; Dolman v. Cook, 14 N. J. Eq. 56; Cookus v. Peyton's Exr., 1 Gratt. (Va.) 431, 432.

then claim priority for a claim of higher degree, but of the claims which he holds he must first satisfy the one of the highest degree.94

§1501. Right of Personal Representative to Compromise or Compound Claims.

The common law rule is that the personal representative has the authority to compromise or to compound claims in favor of or against the estate, subject only to personal liability in the event that, upon his final accounting, it is shown that his action was fraudulent or not for the best interests of the estate.95 This matter is now covered by statute in England," and in most of the jurisdictions of the United States.97 The statutes usually provide for the personal representative securing an order of the probate court authorizing him to compromise or compound claims due to or against the estate, but the purpose and effect of the statutes generally is not to extend or restrict the common law powers of the personal represen

94 Johnson v. Ward, 2 L. J. Ch. 137.

95 In re Houghton (Hawley v. Blake) (1904), 1 Ch. 622; Nance v. Gray, 143 Ala, 234, 5 Ann. Cas. 55, 38 So. 916; Johnson's Appeal, 71 Conn. 590, 42 Atl. 662; Pittsburgh etc. R. Co. v. Gipe, 160 Ind. 360, 65 N. E. 1034; Matter of Gilman, 92 App. Div. (N. Y.) 462, 87 N. Y. Supp. 128; affirmed, In re Norton, 178 N. Y. 606, 70 N. E. 1103; Matter of Meyer, 95 App. Div. (N. Y.) 443, 88 N. Y. Supp. 798; affirmed, 181 N. Y. 562, 74 N. E. 1120; Moore's Estate, 198 Pa. St. 611, 48 Atl. 884.

96 See statute of 44 and 45 Vict., ch. 41, § 37.

97 See local statutes, and see, generally, Logan v. Central Iron etc. Co., 139 Ala. 548, 36 So. 729; Taylor v. Sanson, 24 Cal. App. 515, 141 Pac. 1060, 1061; Johnson's Appeal, 71 Conn. 590, 42 Atl. 662; Fender v. Phillips, 59 Ind. App. 85, 108 N. E. 971; In re Beecher's Estate, 113 Mich. 667, 72 N. W.11; Gillilan v. Oakes (Oakes v. Gillilan), 1 Neb. Unof. 55, 95 N. W. 511; Matter of Gilman's Estate, 82 App. Div. (N. Y.) 186, 81 N. Y. Supp. 713; Matter of Gilman's Es

tative in such matters, but to relieve him from personal liability if a claim is compromised or compounded under an order of court.98

Some jurisdictions do not require an order of court." The statute may make an order of court a condition precedent to the power of a personal representative to compromise or compound claims.1 But in all cases the main point to be considered is whether the action or the proposed action of the personal representative is for the best interests of the estate. It is only in such a case that the court is justified either in authorizing the personal representative to compromise or compound a claim or in approving such action upon final settlement when done without order of court. Each case must be determined according to its particular circumstances. The fact that the debtor is insolvent or that there is a dispute as to the

tate, 92 App. Div. (N. Y.) 462, 87 N. Y. Supp. 128.

98 In re Houghton (Hawley v. Blake) (1904), 1 Ch. 622; Logan v. Central Iron etc. Co., 139 Ala. 548, 36 So. 729; Moulton V. Holmes, 57 Cal. 337, 344; Taylor v. Sanson, 24 Cal. App. 515, 141 Pac. 1060, 1061; Fletcher v. American T. & B. Co., 111 Ga. 300, 78 Am. St. Rep. 164, 36 S. E. 767; Pittsburgh etc. R. Co. v. Gipe, 160 Ind. 360, 65 N. E. 1034; Matter of Gilman's Estate, 92 App. Div. (N. Y.) 462, 87 N. Y. Supp. 128.

99 Parker V. Providence etc. Steamboat Co., 17 R. I. 376, 33 Am. St. Rep. 869, 14 L. R. A. 414, 22 Atl. 284, 23 Atl. 102.

Under the Mississippi statute,

previous

section 2065 of the Code of 1906,
it is not necessary that the ad-
ministrator obtain &
order of the court in order that
his compromise of a claim made
in good faith be valid.-Montgom-
ery v. Mutual Life Insurance Co.,
111 Miss. 6, 71 So. 162.

Statute does not change the common law rule except regarding claims against insolvent debtors. Cogswell v. Concord etc. R. R., 68 N. H. 192, 44 Atl. 293.

1 Hayes v. Massachusetts etc. Ins. Co., 125 Ill. 626, 1 L. R. A. 303, 18 N. E. 322; Pullins' Admr. v. Smith, 106 Ky. 418, 50 S. W. 833; Bunnell v. Bunnell, 111 Ky. 566, 64 S. W. 420, 65 S. W. 607; Smith v. Pate (Tex. Civ.), 43 S. W. 312.

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