Hall v. Hall , 11 Tex. 526 ( 1854 )

Lipscomb, J.

This suit was brought to recover the amount of a note given by the defendant to the plaintiff, on the second day of December, A. D., 1840, and to enforce a lien for the payment of the note aforesaid, on certain negroes named in the petition, for the purchase of which the note was given. There was a general demurrer filed, to the petition, which was sustained by the Court; which is assigned as the first error, by the counsel for the appellant.

To enable us to determine whether the demurrer was correctly sustained, we will recite briefly the substance of the petition. It alleges that Warren D. C. Hall is indebted to her in the sum of nine thousand six hundred and forty-five dollars, with legal interest from the second day of December, A. D., 1841; for that the said Hall, with one Edwin Waller, who is not sued, on the second day of December, A. D., 1840, ex-executed and delivered to petitioner their joint and several obligation, by which they, or either of them, promised twelve months after date to pay to petitioner, administratrix of William S. Hall, dec’d, or order, the aforesaid sum, which, though due, has not been paid; which debt was contracted for certain slaves which belonged to the estate of William S. Hall, petitioner’s intestate, which negroes were purchased by Warren D. 0. Hall, at a public sale of the property of said estate, made at the Court House in Brazoria, on the first day of December, 1840,,by William P. Scott, Judge of Probate for said county; and a lien or mortgage was retained on said negro slaves, to secure the payment of the aforesaid debt, which will more fully appear by a reference to the process verbal and act of sale, executed by the said William P. Scott, Judge as aforesaid, in favor of said Warren D. C. Hall, which was delivered to the said Warren D. O. Hall, and is recorded in the Recorder’s office of Brazoria county. Then follow the names and description of the negroes, all of which are named in the process verbal and act of sale, and a lien or mortgage was retained on them to secure the payment of the said debt. She prays for citation to the said Warren D. C. Hall; that she have judgment against him for her debt, interest and costs ; that the mortgage on the said negroes be foreclosed accordingly to law; and that the negroes and their increase be decreed to be sold in satisfaction of the said debt. She then alleges that several of the negroes, giving their names, had been mortgaged by said Hall subsequent to her mortgage on them ; and that he had sold some of them; she fears that all or most of the negroes so mortgaged to her, will be removed from the jurisdiction of the Court. She prays a sequestration.

The first objection, in sustaining the demurrer to the petition, is the want of proper parties to it. It is an acknowledged rule of equity jurisprudence, that all persons who may be affected by the decree, should be made parties. Therefore all persons having an interest in the equity of redemption, should be made parties to a bill for a foreclosure, and a fortiori to a bill to sell the mortgaged property; and hence the general, though not universal rule is, that all incumbrancers, (as well as the mortgagor,) should be made parties, if not as indispensable, at least as proper parties, to such a bill, whether they are prior or subsequent incumbrancers. If, indeed, such incumbrancers, whether prior or subsequent, are not made parties, the decree of foreclosure does not bind them, as also a decree of sale would not. The prior incumbrancers are not bound, because their rights are paramount to those of the foreclosing party. The subsequent incumbrancers are not bound, because their interests would otherwise be concluded, without any opportunity to assert or protect them. (Story’s Eq. Pl. Sec. 193.) The same learned author, after showing in his notes on the preceding Section, how very unsettled the authorities prove the rule to be, as to the necessity of making all such parties in interest, parties to the bill, states that the cases in the text in 3 Vezey, 315 ; 11 Wheat. 304; 3 Johns. Ch. 459, seem to treat all incumbrancers as necessary parties, and adds: “ Perhaps all the authorities may be reconciled, by “ considering all incumbrancers as proper parties, though not “ in all cases indispensable.” I have no doubt, but if time permitted, an investigation of all the best authorities would lead to the conclusion, that as a general rule, they were required to be made parties; the rule, however, admitting in some cases, under their own peculiar circumstances, of an exception. In cases of a mortgage of real estate, in foreclosing the mortgage, it might well be supposed that a prior incumbrancer need not, as indispensable, be made a party to the bill to foreclose ; because it is not conceived how his interest would be prejudicially affected, his right being superior to that of the mortgagee ; whilst the interest of a subsequent incumbrancer would sometimes suffer materially, by not having an opportunity to protect his rights, although it might be true that he would not be concluded by the foreclosure, to which he was not a party. He would at least be exposed to an original suit, to obtain the right to redeem, and pay off the prior mortgage. And this would generally be very onerous to him. Again, as in the case before us, of personal property, he might be deprived of the possession and use of the property, before having an opportunity to pay off the mortgage, or to defend Ms possession, by showing that the money secured to be paid by the mortgage, had been paid or part thereof, and his readiness to pay the balance, or that there was some legal objection to the first mortgagee’s right to foreclose or to sell the property. The subsequent purchaser or mortgagee could at least set up, in his defence, all the legal or equitable defences, that the mortgagor himself could have offered.

. In this ease, the plaintiff had disturbed the rights of the purchasers and subsequent mortgagees, at the very outset of her suit, in a way that she could not have done had it been a mortgage of real estate; and this without maMng them parties to the suit. She had prayed in her petition for a sequestration of the negroes, so purchased by them, and had obtained, on her petition, the writ of sequestration. Again, it has been the uniform and most cherished rule of this Court, to prevent a multiplicity of actions, and to settle all the rights connected with the same subject matter of litigation, in the same suit. It would, therefore, be a case of very peculiar circumstances, where we would prevent a known subsequent incumbrancer to be dispensed with as a party ; more particularly if the petition was for the foreclosure of a mortgage or sale of personal property.

In this case, the plaintiff knew of the subsequent purchases and mortgages, because she alleged it in her petition. She should then have made them parties, and by so doing saved the circuity of action. It is the practice, sustained by respectable authority, to require the mortgagee to propound questions to the mortgagor, in the bill for a foreclosure where the incumbrancers are not known, calling upon him, for information of the existence of such incumbrancers; and if any, to ask leave to make them parties defendants. (See Story, Eq. Pl.)

The demurrer was, then, in my judgment, well taken to s6 much of the petition as claimed a foreclosure of the mortgage. It did not go to the claim of judgment on the note; and if the petition had not amended after the demurrer was sustained, she could have had the judgment on the note, if no other defence had been offered.

But, to my mind, there is another more formidable objection to the petition, for the foreclosure and sale of the slaves, than the one just discussed; that is, a total failure of alleging in the petition, any mortgage or lien or sale of the property, known to the law in relation to the sales of the.property of a deceased person, or regulating mortgages, and the manner of foreclosing them, or of having them recorded. The acts and doings of the Judge of the Probate Court were not merely void, but were absolute nullities, and could create no lien ; nor could the fact of their being spread upon the record books of the Recorder of Brazoria, confer upon them any validity, as a lien, nor as notice to subsequent purchasers or mortgagees. The so called process verbal and act of sale of the Probate Judge, being unknown to the law in force at the time and for a long time before, their record, like the originals, was mere waste paper and ink. So much of the petition, then, as asked a foreclosure of the mortgage and a sale of the slaves under the supposed specific lien, was so substantially bad and fatally defective, that it was bad on demurrer or in arrest of judgment, or upon error assigned, in this Court, as it affords no basis for a decree of foreclosure or of sale.

The 22d Section of the Act of 5th February, 1840, (Art. 1016, Hart. Dig.,) directs how sales shall be made, of the property of an estate, that it shall be by the executor or administrator. Section 29 of the same Act, (Hart. Dig. Art. 1023,) directs, “ That every executor or administrator is bound, within three “ months after his appointment, to petition the Probate Court, “ granting letters testamentary or administration, for the sale of “ all the perishable property belonging to the succession, and “ all or such portion of the other personal property, except slaves, as may be shown to the Court to be necessary for the “ payment of debts against said estate; and in case, or if on “ further information, he.finds that the proceeds of the sale of “ the personal property will not bo sufficient for the payment “ of the said debts, he shall then, within six months after his “ appointment, or as soon as he ascertains the said deficiency, “ petition the Probate Court for the sale of slaves and real “ estate of the decedent, or so much thereof as may be neces- “ sary for the payment of the said debts; and the said Court, “ on full and satisfactory proof of the existence of debts, and “ the necessity of the sale, shall order the same on cash or “ credit as may be most advantageous to said estate, or as the “ nature of the claims against said estate may require.” Section 56 of the same Act, (Art. 1039, Hart. Dig.,) provides, “ That in all cases where property is sold at a sale of a suc- “ cession of any deceased person, or of the property of min- “ ors, idots, lunatics and persons non compotes mentis, the pro- “ perty of the purchaser, or his securities, may be seized and “ sold on execution, for cash, to the highest bidder, without “ the necessity of appraisement.”

These are the provisions of the laws regulating the duties of administrators, so far as they are material to the subject we have been investigating. Ho lien or mortgage is provided for by law; but the Section last cited seems to confine the security to personal, as it gives the remedy against the purchaser and his securities, by the sale of their property in general, not the property so purchased at the administrator’s sale, without appraisement.

After the demurrer was sustained, the plaintiff amended her petition, only so far as to bring in as defendants the subsequent incumbrancers, the purchasers and mortgagees, but left the petition still obnoxious to the objection, that it contained no ground for the foreclosure of a mortgage, or the sale of the particular property; that it presented no mortgage or lien known to the laws of the forum. A mortgage must be constituted by the Act of a mortgagor, and it must be in writing acknowledged by him or proven, to admit it to record. Had the purchaser at the sale of an administratrix, chosen to give, as security, a mortgage on the property purchased, and that in writing executed by himself, it would have been a valid mortgage, although the 56th Section of the Act repudiates the necessity or legal obligation, on the part of the administratrix, at that time, to exact such security, and a mortgage so taken, acknowledged and recorded, would have been notice to subsequent incumbrancers, and would have been available, if it bad not been recorded, against those who had actual notice of such mortgage ; but the so called process verbal and act of sale by the Probate Judge, was not the mortgage of Hall, and created no lien. Therefore its being recorded could not affect the interest of any one, nor could actual notice have had more effect. If this ground had been taken, in adjudicating on the demurrer, it would have been conclusive against the application for a foreclosure of the supposed mortgage and the order of sale; and there would have been no necessity or propriety in bringing purchasers and mortgagees under Hall, in as parties; because their interest in the suit was based upon the hypothesis that their mortgagor or vendor had given a previous lien on the property conveyed to them, and the suit would have been simply against Hall, on his note given to the administratrix.

The defendants, brought in under the amendment, after the demurrer was sustained, plead the statute of limitations, which was ruled out by the Court, on the motion of the plaintiff. On the sufficiency of this plea, we have been furnished by the counsel for the appellees, an able, and we may say a conclusive argument. Why the jury were not permitted to pass upon that plea, we acknowledge our inability to perceive. But, in the state of the record, we are not called upon to discuss the ruling of the Court, in relation to that defence; for, although the plea was ruled out, the verdict and judgment was in favor of those defendants, and they are not the appellants ; and from the view we take of the whole case, there will be no necessity of discussing that question, by way of instruction to the Court below. If we had come to the conclusion that the judgment in this case ought to be reversed, we would have felt bound to decide upon the correctness of the ruling of the Court below, in excluding the plea of the statute of limitations.

But, to return to the assignments of error. The appellant complains that she was not permitted to give this process verbal of the Probate Judge, already commented on, in evidence to the jury, in support of a lien or mortgage on the negroes ; not permitted to prove notice of it; not permitted to amend and allege that the Probate Judge was her agent. In none of these rulings can we perceive that the Court erred. The notice of the writing, called a process verbal, as we have shown, could not affect any rights of the parties; and whether it was to be regarded as the voluntary, officious act of the Probate Judge, or as the act of the agent of the administratrix, it created no lien, and was properly excluded from the jury. The construction of written evidence properly belonged to the Judge; and we believe that he properly excluded it. And it would have made no difference, had there been an averment in the petition, that the paper was made as the agent of the administratrix. The Judge would still have been called upon to give it a legal construction; and he rightly adjudged that it was not evidence of a lien or mortgage.

There was no evidence before the jury to establish the lien; and none could have been received, under the petition, to give validity to the instrument alleged to be a mortgage; and consequently the jury had nothing before them but the evidence of the indebtedness of Hall. They found a verdict against him, on that evidence, and found in favor of the other defendants. We find no error in the judgment in favor of the defendants who were brought in as purchasers under the defendant Hall.

Hall has not appealed from the judgment against him, and consequently we cannot revise the correctness of that judgment ; but we see no impropriety in giving a passing notice of a defence offered by him, and ruled out by the Court. And the fact that the decisions of this Court were probably misunderstood, would require some remarks on the defence offered, to remove that misconception. We have held, that in an action brought by an administrator, the defendant cannot be permitted to plead in off-set a debt that had been allowed by the administrator and approved by the Probate Judge, and assigned to the defendant before the commencement of the suit. This as a general rule is correct, as it might embarrass the settlement of estates, and lead to difficult investigations, ás to what proportion of the claims against an estate could be paid out of the assets to be administered. We never, however, intended to say that this rule would admit of no exceptions. There is no question that sometimes cases under peculiar circumstances would arise, that would render the interposition of the equitable jurisdiction of the District Court absolutely necessary to prevent great hardship and oppression. A man may be the sole creditor of an estate, and his claim may be allowed by the administrator and approved' by the Probate Judge, and he may afterwards become the debtor; would it be consistent with equity, to force payment of his debt, perhaps at a great sacrifice, when the money, so raised by him, would of right be paid back to him, as soon as paid to the administrator. If so, a sacrifice would be required, without any advantage to the estate, or to any other person, as creditor of the estate. The plea of Hall, in this case, was in the nature of a cross petition. He admits his indebtedness to the estate, on the note payable to the administratrix; alleges that he is the creditor of the estate, on claims duly presented and allowed by the administratrix, approved by the Probate Judge, to an amount four times the amount for which he has been sued; that he is almost the only creditor of the estate, he offers to pay whatever balance there should be against him, if any, after receiving credit for what was justly due to him from the estate; he alleges that he had often urged the administratrix to settlement, and had not been able to procure a settlement, and he prays that the Court will take cognizance of the matter, and require the administratrix to make a settlement. His condition was certainly very peculiar. If he had applied to the Probate Court for an order of payment of his claim, the administratrix may perhaps reply, no assets in hand excepting the debt due the estate from him, which cannot be available until the money is paid by him. He is not able to raise the money because he cannot collect what is due from the estate. Shall the administratrix be permitted to sue him, obtain judgment and sacrifice his property by a sale; all for the purpose of paying the same money afterwards to him ? This would not only be absurd, but would be wantonly oppressive.

Another aspect may be presented, that would as clearly manifest the necessity for the interposition of the District Court, when, from the organization and powers of the Probate Court, the relief could not be had. Suppose that Hall had in truth mortgaged these negroes for the purchase of which his indebtedness to the estate had accrued, to the administratrix, to secure the payment of the indebtedness, and he had after-wards sold or mortgaged them to the other defendants, as he had a right to dó, and such vendee or mortgagee would have a clear title encumbered by the first mortgage only. If a decree of foreclosure or sale should be sought by the first mortgagee, the subsequent purchaser or mortgagee could successfully resist such suit, by showing that the money had been paid by the first mortgagor, and the lien extinguished. Or, if they could show that there was a fund in the hands of the administratrix belonging to their vendor or mortgagor, it would scarcely be doubted that they would have an equitable right to have that fund appropriated to the extinguishment of the first lien, and thereby remove the incumbrance from their own purchase. This they could have done by a separate petition, or could have claimed the same on becoming parties defendants, on the petition to foreclose the first mortgage. And when a distinction is made between equity and Common Law jurisdiction, although Hall might not have been able, at Common Law, to resist the judgment against him, in a suit brought on his bond or note, he could have had relief by filing a bill in chancery; and if there was money in the hands of the administratrix, belonging to him, a Court of equity would have decreed its appropriation to the extinguishment of the lien. We have before disclaimed any intention to 'adjudicate upon the question; because Hall has not appealed. We, for the purpose already expressed, assert the jurisdiction of the District Court, on the presentation of a proper case, to take it into its own hands, from the Probate Court. And we claim this right and authority, not from any special legislation, but upon the broad ground of the general equity jurisdiction of the District Court. It should not be exercised, though, unless it was in a case that called for it, on the ground that adequate relief could not be obtained in the Probate Court. The judgment of the Court below is affirmed.

Judgment affirmed.

Wheeler, J. The Reporter will note, that not having been present at the argument, I gave no opinion.