Wyatt v. Morse

• Decision Date: 24 February 1937
• Docket Number: No. 7194.,7194.
• Citation: 102 S.W.2d 396
• Parties: WYATT et al. v. MORSE et al.
• Court: Texas Supreme Court

102 S.W.2d 396

WYATT et al. v. MORSE et al.

No. 7194.

Supreme Court of Texas.

February 24, 1937.

Error to Court of Civil Appeals of Second Supreme Judicial District.

Action by Dr. S. B. Wyatt and others against H. H. Morse, administrator of the estate of John A. Jackson, deceased. A judgment for plaintiffs in part was affirmed by the Court of Civil Appeals , and plaintiffs bring error.

Reversed and remanded.

R. G. Scurry, of Dallas, for plaintiffs in error.

W. M. Short and J. E. Whitmore, both of Fort Worth, for defendants in error.

TAYLOR, Commissioner.

In this case plaintiffs in error, who will be designated as plaintiffs, presented their claim secured by specific property belonging to the estate of John A. Jackson, deceased, to H. H. Morse, the administrator. The claim was rejected except as to one or two items. Plaintiffs thereupon filed suit in the district court, alleging that in filing their claim with the administrator they had specified in the accompanying affidavit that they desired to have it approved, allowed, and fixed as a preferred debt and lien against the specific property securing the indebtedness, as provided in subsection (b) of section 1 of article 3515a, Vernon's Texas Statutes 1936 (G.L. 42d Leg., 1931, c. 52, pp. 79, 80, § 1(b), and paid according to the terms of the mortgage contract. Upon trial before the court without a jury plaintiffs recovered judgment for the amount sued for and for foreclosure. The judgment, however, establishes and fixes the claim as one of the third class against the estate as a whole, subject to first class claims for funeral expenses and expenses for last sickness and second class claims for expenses of administration in the preservation, safekeeping, and management of the estate. The judgment decrees foreclosure as stated and further directs that it be certified to the probate court for observance. The Court of Civil Appeals affirmed the judgment. 97 S. W.(2d) 336, 337.

The sole question presented is whether plaintiffs' secured claim has priority over first and second class claims against the estate in view of the provisions of article 3515a, and article 3531, R.C.S.1925, as amended (G.L. 42d Leg., 1931, c. 234, p. 389 [Vernon's Texas Statutes 1936, art. 3531]). Both the act (article 3515a) and the amendment (article 3531) were passed in 1931 at the same session of the Legislature.

The first four sections of the act (article 3515a) read:

"Sec. 1. That in addition to the matter contained in the affidavit provided for in Articles 3514 and 3515 of the Revised Civil Statutes of 1925, when a secured claim against an estate is presented, the claimant shall specify therein:

"(a) Whether it is desired to have the claim allowed and approved as a matured secured claim to be paid in due course of administration, in which event it shall be so paid if allowed and approved, or

"(b) Whether it is desired to have the claim allowed, approved and fixed as a preferred debt and lien against the specific property securing the indebtedness and paid according to the terms of the contract which secures the lien, in which event it shall be so allowed and approved if it is a valid lien, provided, however, that the executor or administrator may pay said claim prior to maturity if it is for the best interest of the estate to do so.

"Sec. 2. If a secured claim is not presented within the time provided by law it shall be treated as a claim to be paid as provided in Subsection (b) of Section 1. If the instrument evidencing or supporting a claim provides for attorney's fees then the claimant may include as a part of the claim the portion of such fee that he has contracted to pay to an attorney to prepare, present and collect such claim. If the claim is presented under Subsection (b) of Section 1 and is not contested the fee shall not exceed fifty (50%) per cent. of the amount provided in the instrument evidencing or supporting the claim, which fee shall be treated as a matured part of such claim, but if the claim is contested the full amount of attorney's fees may be recovered.

"Sec. 3. When an indebtedness has been allowed and approved under Subsection (b) of Section 1 hereof no further claim shall be made against other assets of the estate by reason thereof, but the same thereafter shall remain a preferred lien against the property securing same and the property shall remain security for the debt in any distribution or sale that may be made of it prior to final maturity and payment of the debt.

"Sec. 4. If property securing a claim allowed, approved and fixed under Subsection (b) of Section 1 hereof, is not sold or distributed within twelve months from the date letters testamentary or of administration are granted the executor or administrator shall promptly pay all maturities which have accrued on the debt according to the terms thereof and shall perform all the terms of any contract securing same. If the executor or administrator defaults in such payment or performance on motion of the claimholder, the court shall require the executor or administrator to sell said property subject to the unmatured part of such debt and apply the proceeds of the sale to the liquidation of the maturities or, at the option of the claimholder, a motion may be made in a like manner to require the executor or administrator to sell said property free of such lien and apply the proceeds to the payment of the whole debt."

Section 5 (Vernon's Texas Statutes 1936, art. 3515a note), in addition to repealing all laws in conflict with the act, provides that it is cumulative of the provisions of chapters 18 and 19 of title 54 (Vernon's Texas Statutes). Section 6 is the emergency clause.

Section 1 of chapter 234, Acts 1931 (article 3531, as amended), reads:

"That Article 3531, Chapter 19, Title 54, of the Revised Civil Statutes of 1925, be, and the same is hereby, amended so as to hereafter read as follows:

"`Article 3531. The claims against an estate shall be classed and have priority of payments as follows:

"`1. Funeral expenses and expenses of last sickness for a reasonable amount, to be approved by the county judge, not to exceed the sum of five hundred ($500) dollars; any excess to be classified and paid as other unsecured claims.

"`2. Expenses of administration and expenses incurred in preservation, safekeeping and management of the estate.

"`3. Claims secured by mortgage or other liens so far as the same can be paid out of the proceeds of the property subject to such mortgage or other lien, and when more than one mortgage or lien shall exist upon the same property the oldest shall be first paid; but no preference shall be given to such claims secured by mortgage or other lien further than regards the property subject to such mortgage or other lien.

"`4. All claims legally exhibited within one (1) year after the original grant of letters testamentary or of administration.

"`5. All claims legally exhibited after the lapse of one (1) year from the original grant of letters testamentary or of administration.'"

Section 2 repeals all conflicting laws, and section 3 is the emergency clause.

It is contended on behalf of the administrator that there is an irreconcilable conflict between the provisions of the act and the amendment, in that the act gives such claim priority by providing it may be fixed as "a preferred debt and lien" and be paid "according to the terms of the...