McCully v. Chapman

Dec 15, 1877
Reporters:
Before:
Bbickell
BBICKELL, C. J.

Tbe general rule in a court of equity *328is, that all persons having an interest in the subject matter of the suit, must be made parties, either as plaintiffs, or as defendants. The purpose of the court, is, the prevention of future litigation, and security in the performance of its decrees. There may be a separation of the legal and equitable title, and if there is, the court will not generally proceed to a decree, unless the persons in whom each resides, are made parties, so as to bind them by the decree which may be rendered. If the legal title was not affected, the persons in whom it resides, could, notwithstanding the decree, proceed at law to assert it, and the decree, being as to them res inter alias aetae, would be no answer, and would not afford security in its performance. — 1 Dan. Oh. Pr. 240-243.

The title to the lands, which are the subject of this suit— title for which the appellant contracted, and which the ap-pellee contracted to sell, if they were not devised by Jerr© G. Cole, descended to his heirs, or if devised, passed to the devisees, eo instanti his death. This title was not divested by the decree of the court of probate, authorizing the appellee to make sale of them, nor would it have been divested if a sale had been made in strict conformity with that decree. The purchase-money must have been fully paid, the payment reported to the court of probate, and a conveyance executed to the purchaser under a decree of the court, to divest the title passing to the heirs by descent, or to the devisees, if devised. Until the execution of the conveyance, the heirs, or devisees, may maintain ejectment against the purchaser, or whoever enters under him. — Doe v. Hardy, 52 Ala. 297, The court should not, therefore, in the absence of the heirs, if the lands descended, or in the absence of the devisees, if they were devised; render a decree for their sale. The purchaser could acquire, at most, but an equitable title, which would not avail at law, and for protection against the legal title, he would be compelled to resort to another suit in equity, This would be true if the sale had been made in conformity with the decree of the court of probate. The sale was not made in conformity with that decree, but was matter of contract with the administrator, made without authority, and is dependent wholly for its validity, and for its operation, on its ratification by the heirs, or the devisees, or on its confirmation by the court of chancery, because the price paid, or contracted to be paid, is adequate, and has been, or shall be, under the direction of the court, applied to the satisfaction of the debts chargeable on the lands. The order of the court of probate required a sale for cash, and was the limit for the authority of the administrator. A sale on credit was without his authority, and if reported to the *329court of probate, would not have been capable of cornfirmation. We repeat, therefore, the sale made depends for its validity on its ratification by the heirs or devisees, or its confirmation by the court of chancery. There is no averment of ratification, and in the absence of the heirs, or devi-sees, there could be no confirmation. The bill does not show whether the land were devised, or whether they descended to the heirs of Jerre G. Cole. We hold, the devisees, if the lands were devised, or the heirs, if they descended, are indispensable parties, without whom no decree can be rendered, which can be safely performed, or which will finally quiet litigation. While the general rule is, the want of parties should be insisted on by demurrer, or in the answer; yet, the rule in this State has been to restrict the application of the general rule, to formal parties. The omission of an indispensable party is a defect that will reverse the decree on error, though objection has not been made in the court of chancery. — Batre v. Auge, 5 Ala. 173; McMaken v. McMaken, 18 Ala. 576. We think the creditors, who have filed their claims in the court of probate, in the course of the insolvency proceeding, and had them allowed, thus becoming entitled to share the purchase-money, if the sale to the appellant is confirmed, should be made parties either as plaintiffs or defendants. The lands are chargeable with the payment of their claims, and they have an immediate interest in the sale — -the right to show that its confirmation would be unjust to them, because of the inadequacy of the price, or from any other cause.

The sale made under the decree of the court of probate, at which the appellant bid off the lands, if the purchase-money had been paid, in accordance with its terms, was inchoate until confirmed by the court. The purchase-money not having been paid, no report of the sale having been made, and no confirmation by the court, it conferred on the appellant no right or interest in the lands. — Hutton v. Williams, 35 Ala. 503. The strict line of duty and authority of the appellee, was to report the failure of the appellant to comply with the terms of sale, obtain an order of resale, holding the appellant responsible for the differences, if any, in the price obtained on such resale. This course wa,s not pursued, each party being anxious to avoid a resale. A contract was made,' by which appellant was to be let into possession, and at the expiration of twelve months, was to pay the sum at which she had bid off the lands, and a stipulated rent for the current .year. Under^this contract, appellant executed to the appellee her promissory note for the aggregate of the rent, and the sum bid; entered into and remained in undisturbed *330possession, having made partial payments on the note. It is certainly true the appellee was without authority to make this contract, and that it is without validity, if not ratified by the heirs or devisees, and the creditors ; or confirmed by the court of chancery. Having entered into possession under the contract, and remaining in possession, the appellant' can not be heard to deny the authority of the appellee to make the sale. She is enjoying the benefits of the contract, and can not escape from its obligations. If she desires to perfect her title, or to rescind the contract, because of appellant’s want of authority to make the sale, she can, doubtless, compel the creditors, and heirs, or devisees, to elect its ratification and confirmation, or its rescission. It is not within her power to rescind it, without affording them the opportunity of ratifying it, and passing to her the title for which she contracted. — Lamkin v. Reese, 7 Ala. 170; Bland v. Bowie, 53 Ala. 152.

It is true that, under our statutes, it has been uniformly held, that administrators or executors, not having power under a will, can not, without an order of the court of probate, make sale of the personal property coming to their possession, or control, for administration; and that a sale made without an order of court, is void, passing no title to the purchaser, and that the executor, or administrator, can not coerce the payment of the purchase money. At common law, the power of the personal representative, to dispose of the personal assets, was unlimited. The decisions to which we have referred, rest upon the ground, that as to personal property, the subject of transfer by sale, — personal property, other than choses in action — the statutes have taken away the common law power of disposition, and prohibited sales, except under an order of the court of probate. A sale not made under such an order, is something more than an excess of authority; it is a violation of express statutory prohibition, and consequently void. The contract between these parties is not tainted with illegality — it is but an excess of the authority with which the appellee is clothed. If the parties in interest elect its ratification, or it shall be confirmed by the court of chancery, the appellant can acquire title without the violation of any statutory inhibition.

We can not perceive that the contract has in it any element of usury. It was a simple contract of sale. There was no forbearance of a debt, for none existed. The prior sale was inchoate, and was never completed, so as to render the appellant liable for the price bid — her only liability was for a failure to comply with the terms of sale. The measure of that liability, was the difference between the sum bid, and *331the price obtained on a resale. No resale having been made, there conld be no liability, for more than nominal damages. The theory urged by the appellant, that the sum agreed to • be paid for rent of the current year, was a device to obtain more than legal interest for the forbearance of the debt incurred by the bidding off the lands, at the public sale, can not be sustained. No such debt was incurred; and whatever may have been the expressions of the parties, the legal effect of the contract, is that of sale and of renting; not of the payment of rent, as interest for forbearance in the payment of the purchase-money.

For the defect, in the want of proper parties, the decree must be reversed, and the cause remanded.