Price v. Smith

• Decision Date: 15 October 1937
• Docket Number: No. 1695.,1695.
• Citation: 109 S.W.2d 1144
• Parties: PRICE et al. v. SMITH et al.
• Court: Texas Court of Appeals

Page 1144

109 S.W.2d 1144

PRICE et al. v. SMITH et al.

No. 1695.

Court of Civil Appeals of Texas. Eastland.

October 15, 1937.

Rehearing Denied November 24, 1937.

Appeal from District Court, Mitchell County; A. S. Mauzey, Judge.

Suit by R. P. Price and others against Jack Smith, administrator, and others. From a judgment of dismissal, plaintiffs appeal.

Affirmed.

Thomas R. Smith, of Colorado, Tex., for appellants.

Mays & Perkins and P. Edward Ponder, all of Sweetwater, for appellees.

GRISSOM, Justice.

Jack Smith was appointed by the probate court of Mitchell county administrator of the estate of Chas. Mann, deceased, and duly qualified. Lincoln National Life Insurance Company presented its claim, asserting it was a secured creditor of the estate, which claim was in part allowed, conditioned upon a release being executed by the claimant of a lien against the Mann homestead. (The claim was based on notes and a deed of trust executed by Lena Smith Mann and Chas. Mann, deceased.) The allowed portion of said claim was approved by the court, subject to said release, and ordered paid. Apparently, the payment of the approved portion of said claim as a secured claim exhausted the remaining assets of the estate in the hands of the administrator, claims having priority having been paid, and left nothing for the payment of claims of unsecured creditors.

Appellants, R. P. Price et al., unsecured creditors of the estate, long after the payment of the claim of Lincoln National Life Insurance Company, brought this suit in the county court in the nature of a bill of review to set aside the order of the probate court approving said claim. In appellants' unverified petition it was alleged that appellants did not know of the approval of the claim of Lincoln National Life Insurance Company and of the order for payment thereof until after the period within which they might appeal had elapsed; they alleged that upon such discovery they filed an application for writ of certiorari in the district court; that it was dismissed for want of jurisdiction; that appellants then instituted a suit in the district court to set aside the order of the probate court approving said claim and that this petition was dismissed for want of jurisdiction; then the present suit was instituted in the county court on behalf of appellants and all other unsecured creditors of the estate to set aside said order of the probate court, in which appellants prayed for a judgment vacating and annulling the allowance of said claim, the approval by the court and the order of payment, and for an order commanding said insurance company to pay over to the administrator the money collected by it, and that such money be held by the administrator for the payment of claims against the estate, etc.

Appellants appealed from the decision of the probate court to the district court. That court sustained appellees' plea to the jurisdiction and general demurrer to the petition, and, upon appellants declining to amend, dismissed the suit, from which action of the court appellants have appealed to this court. Said, insurance company, the administrator, and Mrs. Lena Smith Mann are the appellees.

Appellees contend that appellants, unsecured creditors of the estate, cannot avail themselves of a bill of review to set aside said order of the probate court approving said claim, and that the only remedy for such dissatisfied creditor is an appeal to the district court from the order of the probate court.

In Jones et al. v. Wynne et al. (Tex. Civ.App.) 104 S.W.(2d) 141, 144, the court said:

"We are of opinion that the action of the Legislature, in expressly providing in article 3525 for an appeal to the district court, was intended to make this method of review an exclusive remedy. This is the opinion of the Supreme Court in DeCordova v. Rogers, 97 Tex. 60, 75 S.W. 16; see, also, Eastland v. Williams, 92 Tex. 113, 46 S.W. 32; Logan v. Gay, 99 Tex. 603, 90 S.W. 861, 92 S.W. 255; Jones v. Williams (Tex.Civ.App.) 14 S.W.(2d) 300 (writ of error dismissed); Bolton v. Baldwin (Tex.Civ.App.) 57 S.W.(2d) 957 (writ of error dismissed); Jones v. Silverman (Tex.Civ.App.) 84 S.W.(2d) 1013.

"It is true that the cases cited and quoted from arose in guardianship proceedings, but no good reason can be advanced why the doctrine should not apply equally as well in administration of estates. We have pointed out above the various changes in the statutory law, and have applied the reasoning of the Supreme Court showing the applicability of its holdings to the case at bar."

The authorities cited in the above quotation are relied on by appellees to sustain their proposition. However, since the filing of briefs in this case, the Supreme Court granted a writ of error in said case with the following notation: "The court erred in overruling appellants' first assignment of error, as follows: The court erred in sustaining defendant's general demurrer and dismissing plaintiffs' petition for want of jurisdiction, because plaintiffs' petition for certiorari alleged that Helen M. Jones was merely a surety upon the note of the administrator and that no suit had been had against the principal maker of the note, in which event the approval of the claim by the probate court was void and was subject to be set aside upon proceeding for certiorari."

We think appellees' proposition is not entirely correct. A probate court may set aside its order and judgments after the expiration of the term for fraud or want of jurisdiction in a direct suit for that purpose instituted in the court in which the judgment was rendered; such suit is a proceeding in equity, not a statutory bill of review, but in the nature of a bill of review. In 13 Tex.Jur. § 54, p. 639, it is said: "But while it is true that the probate court may not revise its own judgment rendered at a previous term, it may, in common with the other courts, set aside its order or decrees for fraud or want of jurisdiction; and a bill of review or a similar proceeding may be maintained for this purpose." Hicks v. Oliver, 78 Tex. 233, 14 S.W. 575; Edwards v. Halbert, 64 Tex. 667, 669; Fortson v. Alford, 62 Tex. 576.

It is not shown that the order approving the claim was void for want of jurisdiction; the court had jurisdiction of the persons and subject-matter involved. Stegall v. Huff, 54 Tex. 193. But before appellants can in this equitable proceeding set aside the order of the probate court entered at a former term they must excuse their failure to appear and contest the claim and to appeal to the district court in addition to showing a meritorious defense. 25 Tex.Jur. §§ 224, 239.

In Nevins v. McKee, 61 Tex. 412, 413, the court said:

"A court of chancery has power to grant such relief, but it will not do so except upon facts which show the clearest and strongest reasons for its interposition.

"It was held by this court in Johnson v. Templeton, 2 Tex.L.Rev. 269 (60 Tex. 238), that it is not sufficient to show that injustice has been done, or that the plaintiff had a good defense which he was prevented from making upon the trial. But he must further show that he has not resorted to chancery because of any inattention or negligence on his part. He must show a clear case of diligence as well as of merit; that he has a good defense which he was prevented from making by fraud, accident or the acts of the opposite party, wholly unmixed with any fault or negligence on his part." (Italics ours.)

To the same effect, see Stewart v. Byrne (Tex.Com.App.) 42 S.W.(2d) 234, 236. In Harding v. W. L. Pearson & Co. (Tex. Com.App.) 48 S.W.(2d) 964, 965, the rule in such cases, without reference to failure to appeal was stated in an opinion by Justice Sharp, as follows: "The rule is well established in this state that to obtain a new trial after the expiration of the term something more than that injustice has been done must be shown. It must appear: (1) That the former judgment was not caused by any negligence on him who seeks to set it aside, but that diligence was used to prevent it; (2) that he had a good defense to the action, which he was prevented from making by fraud, accident, or the acts of the opposing party, wholly unmixed with any fault or negligence of his own; (3) that there is good cause to believe that a different result will be obtained by a new trial; and (4) the pleadings and issues of the former suit, and its result, must be set forth distinctly and clearly. It has also been established that bills seeking relief from final judgment, solemnly rendered in the due and ordinary course of the administration of justice by courts of competent jurisdiction, are always watched by courts of equity with extreme jealousy, and the grounds on which interference will be allowed are narrow and restricted. Johnson v. Templeton, 60 Tex. 238; Nevins v. McKee, 61 Tex. 412; Sharp v. Schmidt, 62 Tex. 263; Humphrey et al. v. Harrell (Tex.Com.App.) 29 S.W.(2d) 963; Empire Gas & Fuel Co. v. Noble et al. (Tex.Com. App.) 36 S.W.(2d) 451."

In Bearden v. Texas Co. (Tex.Civ.App.) 41 S.W.(2d) 447, 462, the court said:

"As said in Freeman on Judgments, vol. 3 (5th Ed.) § 1233 p. 2567: `It must be borne in mind that it is not fraud in the cause of action, but fraud in its management which entitled a party to relief. The fraud for which a judgment may be vacated or enjoined in equity must be in the procurement of the judgment. If the cause of action is vitiated by fraud, this is a defense which must be interposed, and unless its interposition is prevented by fraud, it cannot be asserted against the judgment; "for judgments are impeachable for those frauds only which the court has been imposed upon or misled into a false judgment. They are not impeachable for frauds relating to the merits between the parties. All mistakes and errors must be corrected from within by motion for a new trial, or to reopen the judgment, or by appeal." The fraud must be "in some matter other than the issue...