Wiseman v. Swain

• Citation: 114 S.W. 145
• Parties: WISEMAN v. SWAIN et al.
• Decision Date: 28 October 1908
• Court: Court of Appeals of Texas

114 S.W. 145

WISEMAN v. SWAIN et al.

Court of Civil Appeals of Texas.

October 28, 1908.

On Rehearing, December 2, 1908.

Appeal from District Court, Harris County; Chas. E. Ashe, Judge.

Action by S. Wiseman against Mary F. Swain and another. From a judgment granting insufficient relief, plaintiff appeals. Reversed and rendered.

Baker, Botts, Parker & Garwood, and I. M. Standifer, for appellant. Andrews, Ball & Streetman, for appellees.

FLY, J.

The foundation of this suit, which was instituted by appellant, is a judgment in favor of appellant and against W. J. Swain, the deceased husband of Mary F. Swain, which was rendered in Collin county on October 20, 1896, in the sum of $4,477.13. The suit was brought on the judgment against Mary F. Swain, as survivor, and the surety on her bond, the Fidelity & Deposit Company of Maryland. The cause was tried without a jury, and judgment was rendered against Mary F. Swain, as survivor, in the sum of $4,726.13, with interest and cost of suit, and in favor of the Fidelity & Deposit Company. The only part of the judgment that is in question is that in favor of the Fidelity & Deposit Company of Maryland.

There is no question as to the validity of appellant's judgment against W. J. Swain, nor as to it being a charge against the estate, if any, left by him. Mary F. Swain was his wife at the time of his death, which occurred on December 20, 1904, and was his wife when the debt was created and the judgment rendered against him on October 20, 1896. On December 28, 1904, Mary F. Swain was granted letters of survivorship, and appraisers were appointed, and she and they returned an inventory valuing the community estate at $140,688.50, and Mary F. Swain filed her bond, as survivor, in the sum of $145,000, with the Fidelity & Deposit Company of Maryland as surety. Among the property named in the inventory were 1,128½ shares of stock of the Houston Fire & Marine Insurance Company, 1,080 of which were transferred, it was stated, to W. J. Swain by J. C. Preston, the latter being valued at $135,000. On December 30, 1904, Mary F. Swain obtained from the Houston Fire & Marine Insurance Company a transfer of the stock mentioned in the inventory, and she sold 1,120 of the shares for the sum of $75,000, and after paying some debts and costs of administration, she retained one-half of it, and distributed the other half among her children, being also the children of W. J. Swain. The distribution of the estate was made in less than 12 months after the death of W. J. Swain, and within a few weeks after the letters of survivorship were granted.

The surety company alleged that W. J. Swain, at his death, owned no property, and that the shares did not belong to the estate of Swain, but that the certificate of stock had been originally issued by the Houston Fire & Marine Insurance Company to one John C. Preston, and was in his name when W. J. Swain died; that the stock was fraudulently issued to Preston, and was void; that no consideration was paid for it by Preston or any one else, but that Preston, or some one acting for him, pretended to pay for the stock in forged and fictitious bonds of the city of Austin which were of no value; that Swain knew these facts, and after his death the 1,080 shares in the name of Preston were found among his papers, as well as a purported transfer of the shares from Preston to Swain. It was further alleged that Mary F. Swain presented the bogus certificate, and forged transfer to the Houston Fire & Marine Insurance Company, and obtained from it the issuance of a new certificate to herself, and that the surety company was, at the time, ignorant of the facts narrated. It was contended that the stock constituted no part of the estate of W. J. Swain, and that the bond given by the surety company did not cover such shares. The evidence tended to show that the allegations were true as to the certificate having been issued to John C. Preston, as to payment for it with fictitious city bonds, as to the bogus transfer made by Preston, and as to issue of another certificate to Mary F. Swain at her request. W. J. Swain was president of the Houston Fire & Marine Insurance Company from its organization until his death, and the evidence tended to show that the man who claimed the stock in the name of Preston was Swain himself. There can be no disputing the fact that Mrs. Swain in good faith inventoried the 1,080 shares issued to John C. Preston, and neither is it disputed that the bond was signed by her and the surety company with those shares in view as the bulk of the property of W. J. Swain. Presumably the certificate of those shares, found in decedent's possession at his death, was his property, and it was the duty of the survivor to so treat it. The survivor, in the exercise of that duty, took possession of the certificate in her own name for 1,080 shares of stock. The certificate was then sold, and the proceeds appropriated to the use of the community estate.

The gist and substance of the whole defense of the Fidelity & Deposit Company in this case is crystalized in the following proposition, advanced by an administrator in the case of DeValengin's Administrators v. Duffy, 14 Pet. 282, 10 L. Ed. 457: "The administrator could not, by a wrongful receipt or conversion of property which did not belong to the intestate, create a debt against the intestate, or charge against the estate of the intestate, which enables the owner of the property to come in as a general creditor against the estate. The administrator alone is personally liable for such wrongful receipt or conversion, even where the property has gone to the benefit of the estate." To that proposition the Supreme Court of the United States responded: "There are doubtless decisions which countenance the doctrine that no action will lie against an executor or administrator in his representative character, except upon some claim or demand which existed against the testator or intestate in his lifetime, and that, if the claim or demand wholly accrued in the time of the executor or administrator, he is liable therefor only in his personal character. But upon a full consideration of the nature and of the various decisions on the subject we are of opinion that whatever property or money is lawfully recovered or received by the executor or administrator, after the death of his testator or intestate, in virtue of his representative character, he holds as assets of the estate, and he is liable therefor, in such representative character, to the party who has a good title thereto." In our judgment, this upon principle must be the true doctrine. Now in this case Mrs. Swain was lawfully entitled to receive the money realized from the sale of the certificate of shares. She did receive it, and appropriated it to the uses of the estate for whose benefit she received it; and neither she nor her surety can be permitted to escape liability on the ground that the money was received for void and fictitious stock which was not property. The money she received was property, and it went, a part of it, to pay debts, and the balance for distribution to the survivor and children of W. J. Swain. It is utterly immaterial that the money may have come from the sale of fictitious stock or mere moonshine, or the mythical pot of rainbow money. It was received by Mrs. Swain in her capacity of statutory survivor, and was appropriated by her to the uses of the estate. As said in the case of Fidelity & Deposit Company v. Mortgage Co., 40 Tex. Civ. App. 489, 90 S. W. 197: "Whatever an administratrix lawfully receives in her official capacity her sureties become responsible for. It is immaterial that it may thereafter develop that the property so received did not in law belong to the estate. If the receipt is lawful and in an official capacity, the surety becomes bound, and so remains until proper disposition is made of the thing received." Suppose that W. J. Swain had sold the certificate of stock and then died, and had left the money received for it, and it had come into the hands of the survivor, can it be doubted that the surety on her bond would be liable for the proper distribution of the money? What can be the difference between receiving the money from a sale of the certificate made by the survivor and the money that may have been derived from its sale by the deceased? We can see no difference. In each instance the money has been received and appropriated by the administratrix in the name and for the benefit of the estate of the deceased.

It is a general principle of law that an administrator or executor, coming into possession of property by virtue of his position, is estopped, while he holds possession of the property, from disputing the title of testator or intestate. The property must be surrendered and administration abandoned before the estoppel is removed. Bigelow, Estoppel, 554. A strong and pertinent case on this subject is that of Clark v. Pence, 111 Tenn. 20, 76 S. W. 885, in which the Supreme Court of Tennessee held, as correctly stated in the syllabus, that where an administrator collects notes payable to his intestate as executrix of her former husband's estate, the sureties on his bond cannot escape liability for his failure to account for the proceeds because, as administrator of the estate, he had no authority to collect notes, executed to her as executrix of her deceased husband, which could not legally pass to him as administrator, but passed to the administrator de bonis non of the deceased husband, since, having undertaken their collection, his sureties were responsible. The effect of that decision was to hold the sureties on an administrator's bond liable for money collected by him which did not belong to the estate represented by him, on the...