estate are the only ones who can object so long as the assets of the estate are not so impaired but that all creditors can be paid in full, if the personal representative continues the business of the decedent at the request and with the consent of all the beneficiaries of the estate, he will not be held liable for any losses which occur in the usual course of the business.29

But creditors holding valid claims against the estate may object to the personal representative using the assets of the estate for the purpose of carrying on the business if the assets are liable to be so impaired that their claims can not be paid.30 And the creditors of the personal rep

(N. Y.) 472; Whitman's Estate, 195 Pa. St. 144, 45 Atl. 673; Waddell's Estate, 196 Pa. St. 294, 46 Atl. 304; Allen v. Shanks, 90 Tenn. 359, 16 S. W. 715.

29 In re Johnson (Shearman v. Robinson), 15 Ch. Div. 548; In re Gorton (Dowse v. Gorton), 40 Ch. Div. 536; In re Brooke (Brooke v. Brooke) (1894), 2 Ch. 600; Hodges v. Hodges (1899), 1 Ir. 480; Foxworth v. White, 72 Ala. 224; Mathews v. Sheehan, 76 Conn. 654, 100 Am. St. Rep. 1017, 57 Atl. 694; Poole v. Munday, 103 Mass. 174; Matter of Jones, 103 N. Y. 621, 57 Am. Rep. 775, 9 N. E. 493; Whitman's Estate, 195 Pa. St. 144, 45 Atl. 673.

See, also, Austin v. Munroe, 47 N. Y. 360.

An administrator is not liable for losses incurred in the management of a business continued after the death of the decedent, where all parties interested agreed to III Com. on Wills-31

If the heirs and devisees desire to continue the business of the ancestor undivided, they should first have the estate closed, as provided by law, and take over the business individually; but it is not the affair of the administrator to continue the business as a part of the administration, and the county court has no power or authority to authorize or permit him so to do.-In re S. Marks & Co.'s Estate, 66 Ore. 340, 133 Pac. 777, 778.

80 Dowse v. Gorton (1891), A. C.

resentatives who have claims against him, because of matters arising out of his conduct of the business, are entitled to be subrogated to his rights to indemnity for the satisfaction of their claims.31

§ 1508. No Authority to Expend Funds of Estate for Improvements.

It is the duty of an executor or administrator to fulfill all valid contracts entered into by his decedent and which were binding upon the decedent but uncompleted at the time of his death. He has no authority, however, to expend the funds of the estate by engaging in new work which the decedent, if living, would not be bound to perform. Such an expenditure, except when for the purpose of preserving the property of the decedent, is not a charge upon the estate.3

32

The personal representative has no right to improve the property of the estate, speculate with its funds or pay

190, 199; M'Aloon v. M'Aloon (1900), 1 Ir. 367; Braun v. Braun, 14 Manitoba 346; Allam's Estate, 199 Pa. St. 573, 49 Atl. 252.

V.

31 In re Frith (Newton Rolfe) (1902), 1 Ch. 342; Braun v. Braun, 14 Manitoba 346.

32 In re Moore's Estate, 72 Cal. 335, 13 Pac. 880; Gray v. Hawkins' Admx., 8 Ohio St. 449, 72 Am. Dec. 600.

An administrator is empowered to complete a building commenced by the deceased.-Massey v. Doke, 123 Ark. 211, 185 S. W. 271.

While it is the duty of executors and administrators to perform valid and uncompleted con

tracts entered into by testator, they may not expend the estate's funds to do new work which testator was not bound to do; and hence, where testator devised a building "in course of construction," the executors were not bound to pay for the completion thereof.-In re Hincheon's Estate, 159 Cal. 755, 36 L. R. A. (N. S.) 303, 116 Pac. 47, 48.

Where property has been specifically devised, an executor has power to make repairs upon it, but only sufficient to keep it in as good condition as he found itIn re Ullman, 31 Ohio Cir. Ct. Rep. 370.

off claims or encumbrances, merely to improve the estate's title.33 Nor is he authorized to erect a new building in order to improve the property. It is no part of the duty of an executor or administrator to improve the property of the estate, and he will not be entitled to credit if he uses the personal estate to improve the realty.36

35

§1509. Personal Representative Can Not Deal With Assets of Estate to His Personal Benefit.

An executor or administrator occupies a position of trust. A purchase by the personal representative of any of the assets of the estate is presumptively fraudulent, and in a proceeding to set the sale aside it is not necessary to show that the estate has been damaged."7 Such purchase is voidable at the option of the beneficiaries unless

33 Estate of Knight, 12 Cal. 200, 207, 208, 73 Am. Dec. 531; Tompkins v. Weeks, 26 Cal. 50, 60-63; Brenham v. Story, 39 Cal. 179, 188.

It is not the policy of the law to encourage or to permit the administrator to expend the money of the estate for any purpose except to pay the debts of the decedent and expenses incurred in the course of administering the estate. The administrator, as such, has nothing to do with the education of the children, the support of the widow, nor with the permanent improvement of the lands of the estate further than is necessary to make these lands a source of income for the payment of the

debts. Stuckey v. Stephens, 115 Ark. 572, Ann. Cas. 1917A, 133, 171 S. W. 908.

34 Stuckey v. Stephens, 115 Ark. 572, Ann. Cas. 1917A, 133, 171 S. W. 908; In re Moore's Estate, 72 Cal. 335, 342, 13 Pac. 880; Byrd v. Governor, 2 Mo. 102; Rolfson v. Cannon, 3 Utah 232, 2 Pac, 205.

35 Fay V. Muzzey, 13 Gray (Mass.) 53, 74 Am. Dec. 619; Byrd v. Governor, 2 Mo. 102; Aldridge v. McClelland, 36 N. J. Eq. 288.

36 Cannon v. Copeland, 43 Ala. 252; In re Motier's Estate, 7 Mo. App. 514.

37 Mettler v. Warner, 156 Ill. App. 31.

See, also, Montgomery v. Black, 75 Ark. 184, 86 S. W. 1006.

And it may be avoided without

they consent thereto.

regard to the bona fides of the transaction or the adequacy of the consideration. Thus an administrator who con

tracts with the widow of the decedent in relation to property of the estate, does so at his peril; his relation is fiduciary and his contract is subject to the closest scrutiny and is liable to be set aside for constructive fraud.40 The general rule, however, is that although an executor or administrator may even be expressly enjoined by statute from purchasing the property of the estate, such purchase is not void ab initio but may be avoided by any of the beneficiaries. And the right to have the transaction set aside may be barred by failure to move within a reasonable time.42

41

An administrator of an estate who purchases property for his own individual benefit from a debtor of the estate and pays therefor by giving to such debtor á receipt for the amount of the purchase price as so much money received, and returns it in his inventory as money on hand belonging to the estate, is chargeable with legal interest on the amount, compounded annually, the reason being

An executor or administrator has no power to pledge the assets of the estate for the security of his own debt, and if he does so, and the pledgee has actual or constructive notice of that fact, such pledge is not valid as against the estate.-Goodell v. Monroe (N. J. Eq.), 100 Atl. 238.

38 Goodell v. Monroe (N. J. Eq.), 100 Atl. 238.

39 Estate of McClear, 147 Wis. 60, 132 N. W. 539.

40 Hancock v. Hancock (Ind. App.), 111 N. E. 336.

41 Estate of Richards, 154 Cal. 478, 483, 98 Pac. 528; French v. Phelps, 20 Cal. App. 101, 128 Pac. 772, 776; Handlin v. Davis, 81 Ky. 34; Furth v. Wyatt, 17 Nev. 180, 30 Pac. 828. 1

In Alabama the executor may rent the real estate of the deceased under the provisions of the probate court.-Shotts v. Cooper (Ala.), 74 So. 353.

42 Word v. Davis, 107 Ga. 780, 33 S. E. 691.

that he not only has the property purchased, but also the purchase money which he as administrator does not separate from his individual funds as money of the estate.18

§1510. Duty of Personal Representative as to Investing the Funds of the Estate.

The principal duty of an executor or administrator is to conserve the assets of the estate, use them so far as is necessary for the purposes of administration, and as soon as possible distribute them to those entitled thereto. The general rule is that the personal representative, by virtue of his office, has no authority to speculate with or invest the assets of the estate; all that he is required to do is to properly conserve them until they are paid out in the course of administration or under a decree of distribution. He is not charged with the duty, under ordinary circumstances, of seeing that a revenue is derived from the assets in his hands.44

The rule just announced, however, is subject to modification. The personal representative should keep on hand sufficient funds to pay the expenses of administration or other obligations the payment of which may be demanded at any time. However, those interested in the estate not only have the right to have the estate ultimately distributed to them, but also have the right of compensation if they are unduly deprived of the use of

43 Merrifield v. Longmire, 66 Cal. 180, 4 Pac. 1176.

44 Gerald v. Bunkley, 17 Ala. 170; Clark v. Knox, 70 Ala. 607, 45 Am. Rep. 93; Candee v. Skinner, 40 Conn. 464; Wadsworth v. Connell, 104 Ill. 369; Fitzgerald v. Paisley, 110 Iowa 98, 81 N. W. 181; Brigham V. Morgan, 185

Mass. 27, 69 N. E. 418; Matter of Ryer, 94 App. Div. (N. Y.) 449, 88 N. Y. Supp. 52; Matter of Sudds, 32 Misc. Rep. (N. Y.) 182, 66 N. Y. Supp. 231; Collier's Estate, 30 Pa. Co. Ct. 607; Charlton's Appeal, 34 Pa. St. 473, 75 Am. Dec. 673.