W. P. Converse & Co. v. Sorley

• Decision Date: 01 January 1873
• Citation: 39 Tex. 515
• Parties: W. P. CONVERSE & CO. v. W. B. SORLEY ET AL.
• Court: Texas Supreme Court

39 Tex. 515

W. P. CONVERSE & CO.

v.W. B. SORLEY ET AL.

Supreme Court of Texas.

1873.

1. Where a note has been sued on by the payee who, pending the suit, assigns the note, the assignee may intervene and have the benefit of the proceedings and prosecute the suit to judgment; and this he may do although defendant may have died before his purchase of the note.

2. The purchaser of a note at a sale of the assets of a bankrupt takes only such interest as the bankrupt had at the time of the act of bankruptcy, and such purchaser cannot, in the absence of fraud, claim as against a prior assignee to whom the note had been assigned as collateral security.

3. A judgment enforcing the vendor's lien rendered in the life-time of the intestate must be presented duly authenticated to the administrator for allowance; otherwise such judgment will be postponed in favor of others of the same class which have been so presented, allowed and approved.

4. It is the purpose of the statute to prohibit the payment of claims until the holder thereof shall swear to the justness of the same, and that they have not been paid off, etc., thereby protecting estates from fraud and imposition.

5. Therefore, neither the administrator nor the probate court has the power or authority to settle a claim not so authenticated, presented, allowed and approved, and an attempt to do so would not be valid, and no title would pass by such order or deed made to transfer land to the holder of such claim in satisfaction thereof.

6. In the case of two creditors holding liens of equal dignity, the diligence in enforcing them may give priority to one, and the failure to present within one year after the qualification of the administrator postpones such claim in favor of the claim presented within the year.

7. Suit pending at the death of intestate may be prosecuted against the administrator, and such judgment is a preferred claim over those of same class not presented.

8. But a claim for the purchase money of land when before the district court will be allowed under the equitable powers of the court; the purchaser will not be allowed to have the land without paying for it.

9. A judgment rendered against the estate and not authenticated and presented for allowance under the statute, is postponed in favor of a judgment rendered in a suit pending at the time of the death and prosecuted against the administrator to judgment.

10. The sale to be made in proceedings against an administrator to enforce the vendor's lien should properly be made by the administrator or executor.

ERROR from Grimes. Tried below before the Hon. James R. Burnett.

On the second of September, A. D. 1863, Boulds Baker sold to James E. Williams the land mentioned in the pleadings, for the sum of fourteen thousand nine hundred dollars; of this, six thousand five hundred dollars was paid in sheep, and for the balance two notes were executed by Williams to Baker, each for the sum of four thousand dollars, the first note maturing January 1, 1864, and the second maturing January 1, 1865, both bearing ten per cent. per annum interest from date, and both holding a lien on the land sold.

On the seventh day of September, 1863, the first maturing of these notes was transferred by Baker to W. B. Sorley; and the second note was before maturity transferred by Baker to G. W. Crawford.

October 6, 1866, W. B. Sorley brought suit in the district court of Grimes county on the note belonging to him, and the second of November, 1866, he recovered judgment by default against Williams for the amount of the note and interest, with a writ of inquiry, which was executed seventh of November, 1866, and a judgment final was, on the day last mentioned, rendered in favor of Sorley and against Williams for the sum of $5,272.22, with ten per cent. interest, and foreclosure of the lien on the land described in the pleadings and in the deed from Baker to Williams.

On the fourth day of October, A. D. 1866, one day before Sorley's suit was filed, G. W. Crawford brought suit in the district court of Grimes county on the note belonging to him. Williams made no defense to Sorley's suit, but to the Crawford suit filed an answer. And Sorley obtained his judgment by default at the first term of the court after suit brought. On account of the crowded condition of the docket, Crawford could not force a trial, and his (Crawford's) suit was still pending when the defendant, J. E. Williams, died, in the summer or fall of 1867.

On the 30th of November, 1867, E. Tarver made application for letters of administration on the estate of J. E. Williams, deceased, which were granted to him on the 27th day of January, 1868. On the 23d of April, 1868, G. W. Crawford made E. Tarver, as administrator of the estate of James E. Williams, party to his suit. It appears from the evidence that on the 31st day of December, A. D. 1868, G. W. Crawford filed in the district court of the United States, at Galveston, his petition for adjudication in bankruptcy; but anterior to this Crawford had transferred his note on Williams to Wm. P. Converse & Co., the plaintiffs in error, as a collateral, together with other collaterals, to secure a debt existing in favor of Converse & Co., and against Crawford.

In Crawford's schedule, rendered in the bankruptcy proceedings, is found the note and land as transferred to Converse & Co. as collateral security. Sorley, at assignee's sale, bought the right of the bankrupt Crawford to both the note and the land.

W. B. Sorley recovered his judgment during the life-time of defendant, Williams. No sale was made under the judgment, and nothing done with it (except that he had his judgment recorded) while Williams lived; and when Williams died and his administrator was appointed, Sorley's judgment was not authenticated and presented as a claim against the Williams estate for allowance by the administrator and approval by the court. Nevertheless, on the first day of February, 1870, Tarver presented to the county judge of Grimes county his application, recognizing the Sorley judgment as a claim against the Williams estate, and applying for an order authorizing him, the administrator, to convey the whole of the land to Sorley in satisfaction of his judgment; and on the same day the order was granted by the county judge; and subsequently, in pursuance of the order, Tarver, as administrator of Williams, made the deed to Sorley for the whole of the land; and Sorley was in possession and still held the land, claiming under this deed.

On the 29th of March, 1871, W. P. Converse & Co. filed their petition in the case of Crawford v. Williams' administrator, setting up their ownership of the note sued on by Crawford, making Tarver, administrator of Williams, and Sorley defendants; alleging, among other things, that the judgment in favor of Sorley had never been authenticated and established against the Williams estate; that the order of the court authorizing the administrator, Tarver, to make a deed of the land to Sorley, was illegal; that by the failure of Sorley to establish his judgment against the Williams estate, as required by law, his claim was postponed; and praying that the order of the county judge and the deed made to Sorley in pursuance thereof be set aside, that judgment be rendered in their favor establishing their claim against the Williams estate, that their lien on the land be enforced and foreclosed, and that the land be ordered to be sold and the proceeds be applied to the payment of their claim, interest and costs, to the exclusion of Sorley's judgment.

Sorley answered, claiming the ownership of the note claimed by Converse & Co. under a purchase made of the assignee of Crawford in bankruptcy; that if there ever was transfer of the note to Converse & Co. it was in fraud of the bankrupt law; that he had obtained the land by deed from Tarver, administrator, under order of the probate court of Grimes county, in satisfaction of his judgment obtained in the life-time of Williams.

Tarver, by the same attorney, defended against Converse & Co., alleging that the “Sorley judgment” was a lien upon the land when he had obtained the order to convey the land to Sorley; that the sale to Sorley was fairly made and for the best interest of the estate. Both Sorley and Tarver denied specifically fraud, and insisted that the transaction between them was just and fair.

At the October term, 1871, the parties waived a jury, and a judgment was rendered in favor of Converse & Co. for $7,241.11 and costs; recognizing the validity of the claim of Sorley under the judgment, but annulling the order of the probate court ordering Tarver, administrator, to convey the land to Sorley; recognizing the claims of Sorley and Converse & Co. as of equal amount and dignity; and ordering the sale of the land, the proceeds to be applied equally to the two parties.

Converse & Co. and defendant Sorley made motions for new trials, which were overruled; and both parties seek to reverse the judgment below so far as appropriating any of the proceeds of the sale of the land against him.

Boone & Goodrich, for plaintiffs in error.

1. Converse & Co. could intervene; and being the legal and equitable owners of the note, were entitled to judgment. Thompson v. Cartwright, 1 Tex. 87; Martin v. Manning, 2 Tex. 351;Giddens v. Byer's Heirs, 12 Tex. 75;Devine v. Martin, 15 Tex. 25;Heard v. Lockett, 20 Tex. 162.

2. The next question is as to the order of the county judge and the deed to Sorley in pursuance thereof. We think we cannot better dispose of this than by quoting the language of the learned judge before whom the case was tried below: “The order of the county court, conveying all the land to Sorley in satisfaction of his judgment, is so palpably unjust and illegal, so far as its effect is claimed to forestall plaintiffs' rights, that no further notice of it is necessary.”

The third question is, how is Sorley's judgment affected by his failure to authenticate...