W. P. Converse & Co. v. Sorley

39 Tex. 515

• Court: Texas Supreme Court
• Decided: July 1, 1873
• Status: Published

Opinions

Ogden, P. J.

We think that the objection raised to the rights of Converse & Co. in the note sued on not well taken, since a tona fide and legal transfer to them in part payment and satisfaction of a just and subsisting debt, or as a collateral security for said debt, made by Crawford before any act of bankruptcy by him, would vest in the transferree all the rights which Crawford might have had in and to the instrument so transferred—regardless of the fact that he might subsequently have become a bankrupt. As no question is raised in regard to the time of the transfer from Crawford to Converse & Co., it is presumed that the transfer was made a sufficient time before Crawford’s bankruptcy to give plaintiffs, in error a good title to the note. And if suit had previously been instituted on the instrument transferred, they, as assignees, would unquestionably have the right to come into court at any time and prosecute or defend that suit as their interest might require. There appears to have been no objection on the part of the administrator of Williams’ estate to the plaintiffs in error coming in as the assignee of Crawford and prosecuting this suit to final judgment. Nor does there appear to have been any real objection to the plaintiffs in error obtaining a moneyed judgment against the estate of Williams; as it appears to have been virtually admitted that the note sued on was a just and subsisting debt against the estate of James E. Williams, deceased.

But there were several exceptions raised by the other defendants in error to the right of Converse & Co. to come in and prosecute this suit. In the first place, W. B. Sorley, one of the defendants in error, claims to be the owner of the note sued on by virtue of Ms purchase of the same at a sale by Crawford’s assignee in bankruptcy, and that Converse & Co. had no interest in the same, and therefore should not be permitted to prosecute this suit.

But Sorley himself proves that Crawford had transferred this note to Converse & Co. before he applied for a discharge fn bankruptcy, and the assignee- could' not sell, nor did Sorley purchase, anything more than Crawford’s interest at the time of the sale; and, therefore, as no attempt was made to cast any suspicion of fraud or unfairness upon the transfer from Crawford to Converse & Co., we think the court below did not err in coming to the conclusion that the transfer was & bona fide one, and conveyed to Converse & Co. full authority to prosecute this action. (See Devine v. Martin, 15 Texas, 30; Heard v. Lockett, 20 Texas, 162.)

The fact that Crawford had been discharged in bankruptcy cannot in any way affect the rights of Converse & Co. which were transferred to them in good faith before the act of bankruptcy..

It is further claimed that the plaintiff below should not have been permitted to prosecute his suit against the estate of Williams, because the claim had not been probated according to law, and presented to the administrator for an allowance, nor to the probate judge for approval. But it should be recollected that this suit was instituted long before, and was pending at the time of, the death of Williams; and Article 7, Paschal’s Digest, has fully provided for such a case, and fully authorizes the prosecution of this suit, against the representative. (Bennett v. Spillars, 9 Texas, 521.)

We are, therefore, clearly of the opinion that the court did not err in overruling the demurrer to plaintiffs amended petition and the exceptions to the right of Converse & Co. to prosecute their suit to judgment.

The suit was brought on a promissory note given for ' the purchase money of a certain specified tract of land on which the vendor’s lien was specifically reserved, and the plaintiff, under the proof, was entitled to a judgment against the estate of Williams for the amount of the note ■and a decree foreclosing the vendor’s lien, unless other -equities have intervened to defeat that lien.»

The defendant, W. B. Sorley, claims the land described in plaintiff’s petition by virtue of a deed made in pursuance of an order of the County Court of Grimes county, -which was obtained on the petition of Tarver, administrador of Williams’ estate, in which petition he alleges the fact that Sorley had, during the lifetime of his intestate, Williams, obtained a judgment in the District Court for -something over $5000, on a note given for the purchase money of the same tract of land which was covered by the lien of Converse & Co.; that the judgment was a valid -and unpaid debt against the estate, and asked for an or.der authorizing him to make a deed of the land to Sorley, in full satisfaction of his judgment. It appears from ,-the evidence and admissions of the parties, that the order .of the probate court was made as prayed for in the petition of the administrator^ and that the deed to W. B. Sorley was executed in conformity with the order. It ■.further appears that W. B. Sorley obtained his judgment ...against James E. Williams about one year before his death, and the deed by his administrator to Sorley was made about three years after the death of said Williams. This deed purports to convey the entire tract of land upon which Converse & Co. claim to hold—by virtue of •..the note sued on—a vendor’s lien; and if that deed to W. B. Sorley is a valid deed, then Converse & Co. have lost their lien, and they should have had only a moneyed judgment against the estate oí Williams, to be paid in the due course of administration. It is admitted by the parties hereto, that the claim of W. B. Sorley against the estate of Janies E. Williams was never proven up nor presented to the administrator for his allowance, nor to the chief justice or county judge for his approval, as is required by law (Article 1307, Paschal’s Digest), “ That every claim for money against a testator or intestate shall be presented to the administrator within twelve months after the grant of letters testamentary, or the payment thereof, shall be postponed until the claims which have been allowed within that time have been paid.” And repeated decisions of this court have held that a mortgage or other lien is such a claim for money as must be presented for allowance. (Danzey v. Sweeney, 7 Texas, 625; Crosby v. Willie, 11 Texas, 94; Robertson v. Paul, 16 Texas, 475.)

This statute is positive and imperative, and cannot be avoided. (Graham v. Vining, 1 Texas, 671.)

Article 1308, Paschal’s Digest, declares that “Ho executor or administrator shall allow any claim for money against his testator or intestate, nor shall any chief justice approve of any such allowance, unless such claim is accompanied by an affidavit in uniting that the claim is just, and that all legal offsets, payments and credits known to affiant have been allowed.”

This statute prescribes the only mode of establishing a moneyed demand against an estate of a deceased person, and is too plain and definite to require explanation or interpretation, and is a total prohibition against an administrator or executor, or the probate court, from recognizing or paying any claim for money until the same has been properly proven up or sworn to as the law directs.

The purpose of the statute is most manifest, to prohibit-the representative of an estate from allowing or paying-any claim until the holder thereof shall swear to the justness of the same, and also swear that no part had been settled or paid, and thereby protect estates from fraud and imposition. The objects and wisdom of this statute have been fully recognized and enforced by repeated decisions of this court. (Gregory v. Hughes, 20 Texas, 347; Cunningham v. Taylor, 20 Texas, 129; Hansell v. Gregg, 7 Texas, 228; Coles v. Portis, 18 Texas, 157; Fulton v. Black, 21 Texas, 423.)

It follows most clearly that as the statute is direct and’ mandatory, and neither the administrator nor the probate-court has the power or authority to settle any such claim without authentication as prescribed by statute, any attempt to do so would be in direct violation of law, and must of necessity be void. Indeed, such a direct and palpable violation of so plain and notorious a juovision of the statute by the creditor, administrator, and the court, and particularly under the circumstances surrounding this case, would raise a sufficiently strong presumption of fraud and combination to vitiate the whole transaction.

Should it be claimed that the debt of Sorley had been established by a judgment during the lifetime of the debtor, and that therefore it was not subject to the statutory regulations and restrictions, the answer is, that Article 14, Paschal’s Digest, provides that such judgments shall be presented as other claims, and declares that this may be done in order to establish his debt against the estate, clearly implying that a judgment rendered against a person during his lifetime is no claim against his estate until the same has been established as other claims.

But the necessity of a presentation of a judgment for money rendered during the lifetime of the testator or intestate, duly authenticated for allowance and approval, has been fully considered and definitely settled in the cases of Birdwell v. Kauffman, 25 Texas, 191; Robertson v. Paul, 16 Texas, 472; and in Cunningham v. Taylor, 20 Texas, 129, in which it is said that “a judgment not having been presented to the administrator in the mode and within the time prescribed by law, was not legally established as a claim against the estate.” And in case of a mortgage with power to sell, Justice Wheeler says, “there is the same necessity for presentation for allowance and approval, duly authenticated,” and if not presented as the law requires he has no right to demand payment for his debts.

In the case at bar the judgment was nearly a year old at the death of the intestate, and there was no proof—not even the affidavit of the holder—that the claim had not been fully paid before the death of Williams; and four years had passed from the rendition of the judgment before the deed was executed, and yet not an affidavit that the debt had" not been paid. It is contended by counsel for defendants in error that there are two decisions of this court in 6 and 7 Texas Reports which hold that a judgment rendered against a party during his life need not be presented to his administrator for an allowance. It may be sufficient answer to such a claim to say that both of these decisions were rendered upon the 131st Section of the District Court act, and which section has been amended and repealed by subsequent legislation. And in Birdwell v. Kauffman, 25 Texas, 191, the court says those decisions are no longer applicable to our laws.

For the reason given and upon the authorities referred to, we are of the opinion that the judgment of W. B. Sorley has never been a legally established claim against the estate of James E. Williams, and that the conveyance of the land claimed by plaintiffs in error made by the administrator of Williams to said Sorley in obedience to the order of the county court was without authority of law, and conveyed no title or interest in the same; and that therefore the District Court did not err in setting aside and annulling not only the deed to W. B. Sorley, but also the order of the county court directing the execution of the deed.

But we think the court erred in its further judgment, decreeing that the land should be sold, and the proceeds equally divided between plaintiffs in error and the defendant in error, W. B." Sorley.

It is true that the claims of plaintiffs in error and the defendant in error, Sorley, were of the same grade or character, and originally evidenced by similar notes, executed by the same parties on the same day, and each being for a part of the purchase money for the same tract of land, and both notes retained the vendor’s lien. But James E. Williams, the maker of both notes, has been dead four or five years, and letters of administration granted two or three years ago, and yet Sorley has failed to present his claim or judgment for an allowance and approval as the law requires. His judgment or debt will therefore have to be postponed, under the law, until those claims are paid which were presented and allowed or prosecuted within the time limited by the statute. Suit was pending on the note of plaintiffs in error at the death of Williams, the maker, which finally ended in the judgment which has been brought here by a writ of error. The plaintiffs in error in the prosecution of their claim have followed every requirement of the statute, and their judgment is entitled to the same credit and standing as though the same had been legally presented, allowed, and approved.

The judgment of W. B. Sorley, however, establishes and forecloses the vendor’s lien; and, as the estate of Williams cannot properly claim the land or the proceeds thereof until the purchase money is paid (Robertson v. Paul, 16 Texas, 477), he will have the right to establish his judgment, as the law provides, as a just and subsisting debt against the estate of James E. Williams, and then be entitled to claim whatever remains of the land, or the proceeds thereof, after satisfying the judgment of plaintiffs in error.

We therefore are of the opinion that there was error in the judgment of the District Court in decreeing a sale of the land and division of the proceeds between plaintiffs in error and the defendant in error, Sorley; and for these reasons the judgment of the District Court is reversed. Arid this court proceeding to enter such judgment as the District Court should have rendered, it is ordered, adjudged, and decreed, that the deed made by the administrator of James E. Williams to W. B. Sorley for the land described in plaintiffs petition filed in this cause in the District Court be annulled, canceled and set aside ; and it is further ordered, that the plaintiffs in error do have and recover of and from the estate of James E. Williams the amount of the note sued on, together with interest and costs of suit, and that the vendor’s lein be foreclosed on the land described in plaintiffs’ petition below, and that the same be sold as under execution to satisfy this judgment ; and that if said land does not bring enough to pay and satisfy this judgment and all costs, then the balance still due and remaining unpaid shall be paid by the administrator of James E. Williams, deceased, in the due course of administration.

And it is further ordered, that should the land bring more than enough to pay off and satisfy this judgment, interest and costs, then the balance of the proceeds of the sale shall be held by said administrator to pay any balance which may be due on the original purchase of said land, should any such claim be legally established against the estate of James E. Williams, deceased.

Reversed and rendered.

D. D. Atchison, for motion for rehearing.

In support of the motion filed for a rehearing in the above entitled cause, we present the following argument:

And first, we respectfully submit that the judgment rendered in the cause is clearly erroneous, and that it is quite too clear for argument that under no circumstances whatever can a judgment entered by the District Court, or the Supreme Court, or any other court, be enforced by execution in the hands of the sheriff against the property of an estate. An execution cannot issue thereon; no property of an estate can .legally be disposed of except through the jurisdiction of the probate court by the administrator. The court is respectfully referred to its judgment entered in this cau'se, and the following authorities fully sustaining the foregoing position: Hartley’s Digest, Article 1168; McMiller v. Butler, 20 Texas, 404; Chandler v. Burdett, 20 Texas, 44; Fortson v. Caldwell, 17 Texas, 629; Robertson v. Paul, 16 Texas, 476; Boggess v. Lilly, 18 Texas, 205.

And second, we respectfully submit that under no circumstances whatever can the vendor of land.be divested of his title without first having received the purchase money. That when the vendor has conveyed the land, retaining the vendor’s lien for the purchase money, the superior title remains in him, and cannot vest in the vendee until the purchase money is paid, has long been the well settled and established doctrine and law of this'State.

The death of the vendee no way impairs the vendor’s lien, nor can his estate claim the land without first having likewise paid the purchase money. So far from a vendor being required to present his claim to the administrator, as decided in this case, the statute of limitations does not even run against his debt. It is the duty of the representatives of the deceased vendee to pay the purchase money before the- title vests in the estate, and such is likewise the long, well settled, and recognized doctrine of this court—as more fully, and as we respectfully submit conclusively, appears from the following authorities : Dunlap v. Wright, 11 Texas, 597; Robertson v. Paul, 16 Texas, 476; Ramey v. Baker, 27 Texas, 59; Caldwell v. Fraim, 32 Texas, 326, 327.

In the third place, we most respectfully submit, if the foregoing proposition be true—as we think we have clearly shown—does it then follow, that when, as in the present cause, the vendor had obtained a judgment foreclosing the lien in the District Court, and the vendee died before the same could be executed, his rights as vendor are in any manner impaired? The point is not, as loosely stated, “that a judgment rendered in the lifetime must be presented,” etc.; but it is, as stated in my brief presented to the court, that the judgment rendered in the lifetime of James E. Williams, on the-day of November, 1866, and the execution of which was suspended, both by his death in October, 1867, less than one year from its rendition, and the stay law. then in force, and up to February, 1868, was such a judgment, in full force and virtue, that was not required to be presented to the administrator; not a judgment, as the court ■ say, about a year old—not a dormant judgment. As we then said in our brief, the question is not an open one in this court, as will conclusively appear from the following authorities: Cole v. Robertson, 6 Texas, 367-8; Hall v. McCormick, 7 Texas, 276-7.

We respectfully submit that it is a grave error for the court to hold that these decisions are no longer law, because, as stated by your honors, that the 131st Sec- . tion, District Court act, which was repealed by the act of 1853, and the opinion of Mr. Justice Wheeler thereon, in the case of Birdwell v. Kauffman, 25 Texas, has rendered them so. Read that opinion—based on what?—on claims of the fourth class? (See Hartley’s Digest, as to claims of the fourth class, Art. 1187.) The case we have is of the third class (Ib.), and clearly so. And the opinion of Judge Wheeler is only to the effect that the mode of establishing claims of the fourth class by scire faciasy ' under this 131st Section, no longer existed, because repealed by the act-of 1853. This is the more apparent from the decisions made since this 131st Section was repealed;, and I note particularly Robertson v. Paul—my own case.

The history of that case is: Judge Wheeler, when he first read the opinion, entered the judgment reversing and dismissing the case ; and being pressed immediately for a rehearing, on the ground that the purchase money had not been paid, decided as in 16 Texas, 476, 477. With this decision, we ask your honors with the-very gravest emphasis, how you can insist that Judge Wheeler for a moment could have ever entertained in all his thoughts that the rigid rule now laid down by this court in this case was to be implied or deduced from his. opinion in Birdwell v. Kauffman, 25 Texas, 192 ?

The opinion in Robertson v. Paul was delivered long-after the repeal of this 131st Section; and if any such imperative rule as that all demands were to be presented, as decided by this court, why did he establish the claim of Paul without its having.been sworn to—not requiring, as he said, the useless formality of presentation ?

And I may add the same as to the following authorities:. Fortson v. Caldwell, 17 Texas, 629; Boggess v. Lilly, 18 Texas, 205; McMiller v. Butler, 20 Texas, 405; Chandler v. Burdett, 20 Texas. Paschal’s Digest, Article 14, shows the remedy not to be presentation, but certifying the judgment.

If I have not shown in the foregoing that we are entitled to a rehearing in this cause, it would be a vain thing for me to pursue it further. I assert with all boldness that my brief contains the law of this case; except in this I may be in error, that the fund, as decided by the court below, should be shared alike by the holders of the notes. But suppose Williams had not died, and there had been no suspension of the execution of Sorley, and the land had been sold and purchased by Sorley, and yet the judgment not satisfied, but a large balance due, would Sorley have been compelled to pay the other note % We think the answer to this question solves the whole matter; and referring to our printed brief as a part hereof, we most humbly petition this court not to take away our land without paying the purchase money.

Terrell & Walker, for plaintiffs in error.

In reply to the argument on filq for rehearing, it is urged:

1. By the Constitution and statutes under it all probate jurisdiction is vested in the District Court.

The court having jurisdiction could either order- sale by the administrator, or, in the cheaper mode, by the sheriff. At most, on the administrator, Tarver, claiming the right to sell, the court would remodel its mandate as to the mode of sale.

But the administrator does ‘not complain; and Sorley being the only adversary, his rights are as safe in the hands of the sheriff as if the sale was made by Tarver, administrator.

The case of McMiller v. Butler, and the others cited by appellant, apply to sales under executions under judgment rendered prior to the death of the defendants in execution, and do not limit the power of the court in decrees against estates.

2. Converse & Co. can as well insist upon the superior rights of the vendor as can Sorley; and the more so, for his proceedings against the land bear date before Williams’ death. No break is in the chain of acts prescribed by the law in enforcing the lien. Not so with Sorley; his, or rather Tarver’s, proceedings in the probate court are new, unconnected by any legal (the statutory) link with the suit and judgment in the lifetime of Williams.

The controversy is not made by heirs or creditors against the rights of the unpaid vendor, but by the diligent vendor against the negligent, whose rights, equal in equity, must be determined by their standing in law under the statute.

Converse & Co. exhibit a perfect right to their judgment. Sorley, not having his judgment presented and approved within twelve months after the grant of letters of administration, is postponed in favor of Converse & Co., but is allowed to enforce his lien to the residue; and his claim is superior to that of creditors or heirs.

3. We are unable to find, save in the equity jurisdiction of the District Court, any right to enforce a money judgment, secured by the vendor’s lien, or otherwise, after the death of the defendant, without first establishing the judgment, by presenting it, duty sworn to, for allowance and approval. When allowed and approved, the lien can be enforced. (Pas. Dig., Art. 1319.)

This rule is statutory and binding upon the courts. (Birdwell v. Kauffman, 25 Texas, 192.) Except in this way, the probate court, under the act of 1848, had no jurisdiction.

The probate court exceeded its jurisdiction when attempting, in favor of Sorley, to rescind the contract; and the act became a wrong when made without regard to the equal rights of Converse & Co. Nor does it require argument to ascertain that the rights of Converse & Co. are not affected by the ex parte and unauthorized proceedings in the probate court; but such as they are must be determined by this suit, in which they have been so long .seeking to enforce their rights.

Both these claimants are third class creditors, seeking to enforce their moneyed judgments against the same land. Sorley’s attempted appropriation of the entire fund, through the probate court, may excuse, in morals, the effort by Converse & Co. to obtain a preference, leaving to Sorley the residiré, and having the benefit of pub-, lie sale.

The postponement visited upon the negligent creditor was held even to destroy as well the security as the debt, under the act of 1843. (2 Texas, Graham v. Vining.)

But the equitable right to enforce his lien is given by this court to Sorley. He is only postponed to plaintiffs. All the rights he can claim under Robertson v. Paul have been allowed him, as against heirs and creditors. He is not dismissed to begin by presenting anew his claim.

Converse & Co. had the right to select their mode of realizing upon their security from Crawford—were not required to go into the bankrupt court. The assignee could have redeemed the security had it been beneficial to the estate.

Sorley can only claim the note by paying Converse & Co. their debt; and we think the court presented the law of this case in its opinion heretofore delivered; and we ask that .it be again rendered in final decision of this controversy.