Alford v. Smith , 40 Tex. 77 ( 1874 )

Moore, Associate Justice.

The law prescribing the mode, of proceeding in the District Courts in matters of probate furnishes the general rule for settlement of the debts and liabilities of estates of deceased persons, and provides that such settlement shall be made by a proceeding in the District Court, in the exercise of its probate jurisdiction in -the county in which the estate in question is subject to administration. It is manifestly contrary to the general purpose of the law regulating and prescribing rules for the administration of estates, that this probate jurisdiction of the District Court to which they are committed should be trenched upon or interfered with by proceedings in other co-ordinate tribunals, or by proceedings in. the same court, in the exercise of its jurisdiction not pertaining to matters of probate; and as by the law regulating their settlement the debts of estates are classified, and the time as well as order of their payment is prescribed, it would evidently contravene its general policy, and tend to impede and clog the administration and settlement of estates under the probate jurisdiction of the court where they are pending, if parties, when sued for moneys due the estate, were permitted, as a general rule, to plead in offset claims due them by the estate. While, however, this is the well established general rule (See Atchison v. Smith, 25 Texas, 231, and cases there cited), it has been heretofore held by this court, that this rule was not without exception, and that sometimes cases under peculiar circumstances would arise rendering the interposition of the equitable jurisdiction of the District Court absolutely necessary to prevent great hardship and oppression. Otherwise, the very law enacted for the benefit of the creditor of the estate, and intended to enable him to secure the speedy payment of his claim, might be wantonly perverted to his injury, if not utter ruin. (Hall v. Hall, 11 Texas, 526.)

This exception to the general rule, if it can be properly considered as such, can, however, only be invoked by a creditor where the rules prescribed in the statute for the settlement of the estate in the District Court, in the exercise of its probate jurisdiction, does not furnish him a plain and adequate remedy, and when, but for the interposition of the authority of a court of equity, he would be liable to suffer great, if not irreparable, injury.

In appellants’ answer it was alleged that the claim pleaded in offset was a charge upon the money, for the collection of which the suit against them was being prosecuted ; that the notes upon which the suit was brought were given by them for property which had been sold to pay this very claim which was set up in offset, and that the money, when collected by the administrator, was, by the order of the court, to be paid back, upon their claim, except so much thereof as was not otherwise appropriated by said order, and against the payment of which they made no defense.

To this answer, when presented as a joint)defense by all the appellants, the court sustained appellee’s exceptions. Whereupon appellants, Geo. F. Alford & Veal, amended their answer, and alleged that they were the principals in the notes sued on, and that the half-interest of the estate of appellee’s intestate in the boat, in payment for which the notes were given, was bought by them ; that previous to the date of said sale they had purchased from their co-defendant, A. N. Alford, the claim, for the payment of which said boat was sold; that the estate was insolvent; and they would not have purchased said boat but for the fact that they were the owners of said claim, etc. To this amended answer' appellee also excepted, but the court overruled the exception, and held the answer sufficient. In this we think the court erred. "

The facts and circumstances alleged in the answer certainly present strong grounds to invoke the interposition of a court of equity; but as strong as they are, unless it was more clearly shown that appellants were the only creditors interested in the fund to which they asked to apply their offset, or had set forth more definitely and precisely the extent and character of the claims of such other creditors as were interested in it, so that the court might see whether the relief asked could be granted without other parties being brought before it, and without injustice • to the other creditors of the estate, or too greatly interfering with the probate jurisdiction of the court, and embarrassing the administration and parties interested therein in the final settlement of the estate, we are of the opinion appellants could not invoke the equity power of the court for their relief.

It is to be borne in mind appellants’ defense does not rest upon the statutory right of a debtor to set off a demand due him by his creditor, against the debt upon which he is sued, but depends upon the application of the principles of equity to the peculiar facts of his case. And while it must be conceded the fact that the claim presented in offset was a lien upon the boat, in payment for which the notes were given, and that it was sold under an order of the court, in the exercise of its probate jurisdiction, for the payment of this very claim, presents a strong ground for the relief asked in appellants’ answer, yet it must be remembered that even a claim secured by a special lien is not ranked in the first class of debts against an estate. The order for the sale of the boat, upon which this claim was secured by mortgage, shows that it was postponed to the payment of the allowances made by the court to the widow and child of the intestate. Although the order of. sale raises a strong presumption-that the money, when received by the administrator from the sale of the boat, except so much as was otherwise appropriated in the order of sale, would be applied to the payment of this claim, yet other claims, which were not brought to the attention of the court at the time the sale was ordered, might be presented before the money was paid out, and shown to stand upon an eqnal footing with appellants’ claim, or to take precedence of it.

This ruling of the court, however, was in favor of the appellants,- and though erroneous, as they cannot complain, if there was no other error disclosed by the record, the' court would not have felt called upon to notice it. But we are of opinion the deposition of appellant, George F. Alford, was improperly excluded. This seems to have been done solely upon the supposition that the deposition proved that the claim pleaded in offset was his individual property, and not that of the firm of which he was a member, and by whom, as appellants allege, the boat was bought to secure this debt. We think it too technical a construction of the answer of the witness, that “he bought the boat” (which, from the bill of exceptions, seems to be the language which caused the exclusion of the deposition), to conclude that he meant to be understood to say that the purchase was an individual and not a partnership transaction. The deposition, from anything we can see from the record, might have been submitted to the jury in connection with the other evidence for their consideration, under such instructions as the court might have deemed it necessary to give them for their guidance, if it had been incumbent upon appellants to have shown that thé firm of George F. Alford & Veal were the owners of the claim. We are, however, of the opinion that this was unnecessary. It was immaterial to which of the defendants the claim belonged. If the owner was willing to apply it to the extinguishment of the debt upon which all of them were sued, surely, if this was his only objection. the administrator could not complain of such application of it.

As we have said, appellant’s answer did not authorize the defense upon which they relied, and. to support which the deposition of the appellant, George F. Alford, was offered; its exclusion, therefore, it may be insisted, was immaterial. The answer to this is, that we cannot say, if the court below had sustained the exceptions to the answer, appellants might not have answered, and alleged such facts as would have authorized the interposition of the equitable jurisdiction of the court for their relief.

For this error of the court in sustaining the objections of appellee to the deposition of George F. Alford, one of the appellants, the judgment is reversed and the cause remanded.

Reversed and remanded.