The Second Department determined Surrogate’s Court properly denied the petition by the administrator of decedent’s estate seeking authority to conduct a “short sale” of real property that was worth substantially less than the mortgage which encumbered the property. Surrogate’s Court determined the proof offered in support of the petition fell short in several respects:
A decedent’s personal property is the primary source for the payment of the decedent’s debts, and land cannot be used as a source of funds unless the personalty has been exhausted … . However, the primary source for payment of a mortgage debt is the mortgaged premises (…EPTL 3-3.6). To obtain court authorization to sell real property to satisfy a decedent’s debts, including mortgage debts, a personal representative must demonstrate that the decedent’s personal property is insufficient to satisfy the debts (see SCPA 1902 …).
A Surrogate has ” the right to decree intelligently, and upon equitable principles, and to order [executors’ and administrators’] conduct upon principles of justice and of reason,'” and may not ” rubber stamp'” an application without examining its basis … . Here, we agree with the Surrogate’s Court’s determination that, without other evidence, the petitioner’s conclusory assertions regarding the extent of the decedent’s personal property and debts, the existence and status of the mortgage, and the identities of potential distributees were insufficient to support the relief he sought. Matter of Kahn, 2019 NY Slip Op 04384, Second Dept 6-5-19