
    LYMAN, adx. v. ESTES.
    An equitable claim, against an insolvent estate, though never presented to the commissioners, may still be shewn by way of set-off to an action of assump-sit brought by the administrator.
    
      Assumpsit upon a promissory note made by the defendant, payable to Moses Lyman the plaintiff’s intestate. In a case stated for the opinion of the Court the parties agreed upon the following facts.
    The consideration of the note was the warranty-deed of the intestate to the defendant, of certain lands in the town of Brunswick. These lands were part of a tract sold to the defendant and others by the intestate, and which was conveyed with the usual covenants of warranty. After the sale, and delivery of the deeds, it was ascertained by the grantees that the whole tract thus sold had been previously mortgaged by Lyman for a large sum, and that the mortgage deed had been duly registered before the conveyance to the defendant and others ; and after the death of Lyman the mortgagee entered into said tract for breach of the condition of the mortgage, and obliged the grantees, in order to redeem the land, to pay the balance due to him from Lyman, of which the defendant’s proportion was one hundred and one dollars and nineteen cents. Lyman died insolvent, and a commission of insolvency was duly taken out, but the defendant never had exhibited his demand before the commissioners.
    The question submitted to the Court was—whether the money thus paid by the defendant to extinguish the title of the mortgagee might be offset against the demand of the administratrix in this action.
    
      Emery for the plaintiff.
    
      Mitchell for the defendant.
   Mellen C. J.

delivered the opinion of the Court as follows.

The equity of this case is clearly with the defendant; and if the deduction claimed by him cannot be made, the most manifest injustice will be the consequence. In a Court of equity there would not be a moment’s hesitation. The plaintiff’s counsel seems to admit all this ; but contends that by law it is not competent for the Court in this action to make the allowance and deduct it from the sum due on the note.

Our statutes relative to the settlement of insolvent estates, contemplate a fair adjustment of all demands subsisting between the deceased and his creditors at the time of his death ; so that the balance justly due to the estate may be collected, and then fairly distributed among the creditors. In the case of M'Donald v. Webster, 2 Mass. 498. the Court decided that a sum due on account from such an estate, which had never been presented to the commissioners, and was therefore barred as a claim, may still be good by way of set-off, in an action brought by the administrator, against the person having such a claim.

A creditor cannot maintain an action against the administrator of an insolvent estate, except to decide the merits of » claim rejected by the commissioners. If, in the present instance, the defendant could support an action on the covenants of the intestate to recover the sum paid to the mortgagee, no injustice could be done. The Court would so control the proceedings as to give the defendant an opportunity to bring a cross action and obtain his judgment. The mutual judgments might then be set off against each other;—or, if executions were issued, the officer holding the execution against the defendant would be bound to offset the defendant’s execution against the plaintiff, and deduct the amount therefrom. But as such a course cannot here be legally pursued, we ought to allow the same justice to the defendant, by considering the sum paid to the mortgagee, as to all equitable purposes, paid to the administrator. And no principle of law forbids this construction in the present case. The sum paid has already gone to the benefit of the estate, because it has discharged a debt which the estate owed, and removed an incumbrance which lessened its value ; and neither law nor justice requires that it should be paid a second time; and by him, too, who has paid it already. The strict principles of the common law^ and technical rules of pleading must not be applied to cases where the parties have not mutual remedies at law, which they can enforce, as in cases of insolvency.

In the action of Sewall & al. v. Sparrow, administrator of John Thacher, decided in this county and not yet reported, the Court recognized a principle which sanctions the distinction we make between solvent and insolvent estates. Sewall & al. declared on a judgment recovered against Thacher the intestate, which had been presented to, and rejected by, the commissioners on the estate, which was deeply insolvent;—and the action was pursued according to the provisions of the statute in such cases. The defendant pleaded that the intestate had paid a part of the judgment to the creditors, and that they thereupon entered into an agreement with him in writing, not under seal, never to demand the balance, or sue execution. On demurrer to this plea the Court decided that it was an equitable bar, and unquestionably good before the commissioners, and ought to be a substantial bar to the action; and so it was adjudged. The injustice which would have been the consequence of rejecting such defence in cases of insolvency, was the principal ground of the decision.

We are not aware that our present opinion violates any principles of law as heretofore applied in other cases. We mean only to decide that such principles are not applicable with the same strictness and to the same extent in those cases where one of the parties represents an insolvent estate under administration ; and when such application interferes with the design, or opposes the spirit of our statute-provisions relating to the equitable settlement and distribution of such an estate.

Accordingly the sum of one hundred and one dollars and nineteen cents paid to the mortgagee must be deducted from the note declared on, and judgment be entered for the plaintiff for the balance. 
      
      Since published in 16 Mass. 24.
      
     