Cook v. Pollard

70 Tex. 723 | Tex. | 1888

Collard, Judge.

The intervention of appellees Simon & Morse, and Max Judd & Company in the attachment suit of appellant Cook against O. H. Pollard, was to have set aside and canceled the note sued on by Cook as a fraudulent and fiqticious claim, and to have the proceeds of the goods levied on by Cook applied to the claims of other attaching creditors according to the priority of their attachment liens. Intervenors sued in their own names for the benefit of such subsequent attaching creditors without making them parties. The court rendered judgment for intervenors, declaring Cook’s note fraudulent, and rendered judgment for Cook for the whole of his note against Pollard, but applying a sufficient amount of the proceeds of the sale of the goods that would otherwise have gone to the full payment of Cook’s debt, to the satisfaction of tihe claims of the intervenors. After such deduction from Cook’s claim the residue of his claim was ordered paid out of the fund in the hands of the clerk, who held the proceeds of the sale of attached goods. Thus no benefit of the intervention was given by the decree to other attaching creditors, besides the intervenors. We think there was fundamental error in the decree. The pleadings of intervenors did not warrant the judgment. The object of the bill was to have the Cook claim declared fraudulent as to all the subsequent attaching creditors to Cook, and to have the fund distributed among them according t.o priority of their respective attachment leins. The judgment did not grant the relief prayed for, but a wholly different relief, as upon a suit by intervenors for their own exclusive benefit. The result was materially different from the one sought, depriving several creditors whose attachments were subsequent to those of intervenors from a participation in the benefits of the writ that they would have received had the judgment of the court followed the pleadings and prayer of the bill. The judgment will have to be reversed.

The appellant Cook excepted to the intervention because the proper and necessary parties were not before the court, and it is claimed by appellant that all the creditors for whose benefit the suit was brought by intervenors were necessary parties. The general rule is that all persons interested in the object and purpose of a suit must be made parties. There are exceptions to the rule; as in estates of deceased persons, suit may be maintained by one or a few creditors for themselves, and for other creditors against the legal representatives of the estate to have assets applied to payment of their debts (Story’s Eq., 99), and in such case a creditor who claims a priority over other creditors by mortgage can sue in his own name for all the creditors, upon the principle that such other creditors can come in at any time before the succession is closed and have their rights adjusted. (Id., 101.) It has been decided in this State that one creditor can maintain a creditor’s bill to set aside a fraudulent conveyance by a deceased person and subject the property so conveyed to be applied as assets of the estate. (Nix & Story v. Dukes, 58 Texas, 96.)

In a suit like the one at bar, where the decree is to be final, where priority of attachment liens of creditors is to be determined, and the fund actually and conclusively applied to their respective debts, we think all the creditors whose interests are to be affected by the decree should be made parties.

Opinion adopted May 15, 1888.

Where the interest of a person is necessarily affected by a Buit he is a necessary party, whether he is to be benefited or not. (Hall v. Harris, 11 Texas, 300; Hall v. Hall, Id., 526; Buffalo Bayou Ship Channel Co. v. Bruly, 45 Id., 6.) Especially is the law strict to require all interested persons to be made parties when the question between them is as- to priority of liens. (Delespine v. Campbell, 45 Id., 628; Rodriguez v. Trevino, 54 Id., 198.)

The attaching creditors whose interests will be affected by the suit of intervenors must unquestionably be made parties. To hold the contrary would be contrary to the entire tenor of decisions in this State. It is proposed by the decree to finally settle the rights.of all the lien holders and to apply the fund as so determined to their debts. This can not be done unless they are before the court. It is settled in this State that subsequent attaching creditors can maintain a suit by intervention in order to protect their interests in the attached property, and to set aside the judgment for fraud. (Nenney & White v. Schluter, 62 Texas, 328; Grabenheimer v. Rindskoff, 64 Id., 49.) And no bond is required of the intervenors for such purpose.

We are of opinion that on account of the errors pointed out the judgment of the court below should be reversed and the. cause remanded.

Reversed and remanded„

Judge Gaines did not sit in this case.